Adam Samuelson: Yes, thank you. Good morning everyone.
Omar Asali: Good morning, Adam.
Adam Samuelson: Omay, and maybe following on that kind of line of questioning a little bit, can you, have tried to kind of size the impact of destocking both in the fourth quarter and in 2022 as a whole? And maybe disaggregate kind of the volume declines in paper consumables that you reported with between kind of destocking, lower throughput of existing machines, the growth in the installed base and kind of trying to think about that in context of 2023 guidance that I think was low to mid-single digit volume growth?
Omar Asali: Sure. Bill, you want to take that?
William Drew: Sure. So for the destocking last year, in Europe obviously it had a pretty substantial impact, right, and far bigger than we anticipated going into the year. I think we would put probably, the European volume pressure related to destocking was probably in the, call it 40% to 50% of the volume decline that we had last year. So moving away from that going into this year, I think will be a nice lack of a headwind, right, turning into a tailwind. I think where we’re being a little cautious is just on the overall environment, right, in terms of seeing what happens as the economy hopefully improves with the lower energy environment in Europe.
Adam Samuelson: Okay. And I guess as we think about the installed base, and you kind of made the point earlier, not trying to do anything kind of too hasty on pulling machines from existing customers, kind of help us from here delineate kind of what would it take to think about a more significant kind of change in the installed base and just confidence that you have that, the utilization of that installed base is going to improve?
Omar Asali: I mean, Adam, I think the next few quarters on watching the data closely will be key. So as we’re representing to you that we’re confident destocking is behind us, we will be watching that. We’re not seeing any pressure related to that because if we are seeing any pressure related to that, then that means our basic assumption about consumption and rate of consumption are incorrect and what we are considering as lean levels of inventory may not be as lean. And that would change, certainly change our calculus. The second thing that we’re watching, and frankly it’s already happening, and this is why we made a little bit of comments about January and February, is just stabilization of the utilization of our equipment.
So you had a very tough year in Europe last year. You had industrial activity come down. You had e-commerce activity come down in certain geography geographies very drastically. In the Nordic region in Eastern Europe, there were dramatic declines. And frankly, in a place like Germany, which is our biggest market, we saw some dramatic declines. We’re seeing that reverse this year already. So a continuation of that will prove our thesis that maybe being a little bit patient with these converters is the right approach. If we see a change in that in the next quarter or two, then I think we would be reassessing the quantum of converters that exist at some of these customers. We are applying a lot of discipline on any new converters that we’re putting in the field.
And we’ve seen just a lot of volume pressure with our existing guys. And I’ve mentioned these on some prior calls. You’ve had some e-commerce facilities either closed a lot of days during the week or in some cases open a few hours a day. So you’ve had some dramatic moves and we’re seeing some of that normalize. And naturally if it normalizes, it should lift the volume for converters and frankly, year-to-date, that’s what we’re seeing, but to give us more confidence that we’re on the right course, we just want to see that continue for the next couple of quarters because at the end of the day, data for the last 70 days is just not enough. So we will wait and see. We will assess it. We’re watching it very, very closely. If the data shows us something different, we will react accordingly.
