Operator: Thank you. Please stand by for our next question. Our next question comes from Arun Viswanathan from RBC Capital Markets.
Arun Viswanathan: Thanks for taking my question. Yes, congrats on the new roles there to both of you. Just wanted to understand — yes, just continuing on the last theme, maybe you can help us understand the synergies between the two businesses and where automation and maybe some of the other initiatives you have overlap? I’m just thinking that we’ve seen these huge double-digit declines on volume in Protective? And do you think it’s necessary to take more decisive action and maybe separate the Protective portfolio? What really makes it important to keep within the portfolio as is? Thanks.
Dustin Semach: So I’ll answer that question really in two parts. Obviously, the business is — obviously create — there’s a lot of similarity in terms of overall raw materials [indiscernible] resins that are used within both businesses. And so one of the key advantages of our company and the scale that we operate at is the level of purchasing power that we have in that particular space, right? And so any form of action like that could lead to form [indiscernible] beyond of — beyond kind of thinking about how you would structure kind of that disposition between the two businesses. The second piece is in terms of the comment about should you be more decisive about where we are at. What I want to remind, kind of everybody is thinking about Protective is we are sitting from our point of view towards the bottom of an overall cycle, right, which is really important to take into consideration from a timing point of view.
Second, broader market dynamics that are in play around taking an action like that, that could effectuate the timing if and when you chose to make an action like that. And the second piece around Protective holistically and the comment about shared aspects underneath it, some of these strategies, whether it’s automation, they’re very independent for each business, but they’re effectuating the same outcome, right, relative to the points that Emile made earlier around the combination of materials and equipment together, drawing a bigger pull-through for us by having huge advantages for overall customers relative to having a single point of contact from a relationship perspective, from a service perspective and the overall value creation. So that’s where we are at.
Operator: Thank you. Please stand by for our next question. Our next question comes from Gabe from Wells Fargo.
Gabe Hajde: Emile, Dustin, thank you and thanks for the crisp messaging this morning. Two-part question. The first is, you had a large customer put out a press release saying that they’re migrating, I think, one of their first locations here in Ohio, actually to 100% paper-based. So I’m curious if this is specifically what you were referencing in terms of working more closely with your customers? And does this require sort of additional investment, either in the P&L and/or CapEx side? And I guess, relatedly, if there is some sort of P&L impact, would that be sort of incorporated or included in still being able to achieve your $140 million to $160 million of Cost Take-Out to Grow? And I apologize if I missed it. So the second part is, I think, Dustin, you mentioned a $30 — or $30 million discrete fourth quarter revenue item.
What was that associated with? And then in your commentary as well, I know you talked about going into ’24 price cost being a headwind, but specifically in Q4 with the moves that we’ve seen in polyethylene as it relates to timing, is there a bracket that you can give us $5 million to $10 million or so that you guys are incurring specifically in the fourth quarter?
Dustin Semach: Yes. Great question. So I’m going to hit the first the question you have around the discrete item, and then I’ll bring it back to Emile, he’ll walk through your points around kind of paper-based solutions and where we are headed. So on the first one for what we call it out for the fourth quarter, a nonoperational issue with FX. So if you think about where we were in July and then where we are at now today and where the GBP and the euro moved, that’s creating an FX impact in the fourth quarter to the tune of about $30 million, right? And the secondary point we made to that was that underlying volume estimates that we made are still intact, right, for both businesses. And then I’m going to turn it to Emile to head on the question.
Emile Chammas: Yes, on the first question, I mean, it’s broader than just paper or plastic. It’s really around the sustainable offerings that we bring to the marketplace, and that’s both on the Protective and on the Food side. So yes, getting closer to our customers so that we are at the table helping our customers choose the right solution. And you can see in our — in parts of our portfolio, we were light, and we’ve seen some of that impact in terms of that share loss. But our paper solution continues to make progress on the Protective side, both on the automation piece of Protective as well as on the material side. On the Food side, we are continuing to push on our sustainability pledge around bringing our solutions to being 100% recyclable or usable.
Just to give you a perspective, we are around 51% of the portfolio away today. We did try to bring in that plant-based roll-stock solution. But unfortunately, that was not successful in the market as the market shifted. And we’ll be shortly announcing interesting, sustainable solution will bring into markets around roll-stock. But let’s talk about that in our next call.
Operator: Thank you. Please stand by for our next question. Our next question comes from Mike Roxland from Truist Securities.
Michael Roxland: Thank you. In Food, obviously, you mentioned the company has mentioned in the past facing a growth headwinds, you mentioned again kind of U.S. cattle cycle customer preference shift in meat, the Food automation slowdown. Can you talk about any of the initiatives you started to pursue maybe you have accelerated in your to reverse that and to drive better growth? And then just quickly on the second question, if you take out Liquibox in 3Q, what would Food volumes would have [indiscernible] grown or declined ex Liquibox? Thank you.
Dustin Semach: So great questions. And a couple of points to make. One is — and I want to just clarify the comment on automation, just to make this really clear, is that automation is still performing very well in this quarter and very well for the full year, right? What we are referencing in terms of commentary that going forward from a sales perspective, which is indicative of some of the pressure in 2024, it’s under pressure, and that’s really related to orders. When someone purchased an automation solution, there is a decent lead time before it’s delivered, which is a statement about kind of the future into 2024, but it continues to be very strong. Our offerings continue to be very relevant, and we are still very focused on those platforms in both businesses and bring them to market.
Okay. And then going back to Food overall relative to the cattle cycle and impacts in the quarter, in general, I think that we are going to accelerate it. I would tell you, going back to Emile’s commentary around competitive positioning in certain products as part of Cost Take-Out to Grow within Food and Protective, we are specifically focused within that business going back to this concept around the plant-based roll-stock business that we are disposing of, we are focused on our roll-stock business, right, at a competitive positioning within our bags business and the bags and the food automation we have in our bags business. We are performing actually ahead of market and doing very well this year, considering some of the kind of negative market trends.
In our roll-stock business, which we had commentary beforehand, if you go back to last year, this is the one that was really impacted by the specialty resin prices we had in 2022 into 2023. And so as that business specifically, there’s continued intensifying pressure around competitiveness, pricing. And so what we are working on is reducing the cost to serve, including the cost to deliver and produce in that area, so we can be more competitive and more relevant in the marketplace and drive growth going into 2024.
Operator: Thank you. Please stand by for our next question. Our next question comes from Phil Ng from Jefferies.
Phil Ng: Hey, guys. Dustin, you kind of breeze through your early 2024 outlook. So I just want to make sure I heard you correctly. You’re effectively going for flat sales, up volumes and up EBITDA in 2024. Can you kind of help unpack the components a little more between how you’re thinking about volume growth between the two segments, particularly Protective just because it’s been under pressure, price cross and then progress on the restructuring efforts? I think last quarter, you were calling for a mid single-digit EBITDA growth. I don’t know if that’s still achievable, especially with the FX headwinds you’re seeing at this point?
