Adam Greenlee: I think that’s right. There are no acquisition timing issues. So what you’re seeing is, really what we’ve been talking about, right? I mean I think we stood and delivered in 2022 and we talked a lot about the dynamics of each of our segments and the growth profiles of each of our segments then delivered it in ’22, it rolls right forward to ’23. So you’re seeing the kind of power of the portfolio and each of our individual operating segments delivering growth in their own way for 2023. I think you’ve got it right, Jeff.
Operator: And we’ll take a follow-up question now from George Staphos of Bank of America.
George Staphos: I’m guessing the answer will be no, there’s no change but it’s a box-checking exercise here. So given that there’s been changes in the landscape of other players in the North American metal container sector, are you seeing any change in the level of competitive activity, bids, things like that, that we should be mindful of? And then knowing that it’s not 2024 yet, can you size for us a couple of things. One, how big was that win that you’re going to get at the end of this year on an annualized basis in terms of what it might mean for ’24. And as we now or in the next sort of phase, are you done with your big contract renewals in metal container for the next several years.
Adam Greenlee: So maybe, Bob and I will ham and eggs through that for you, George. But for competitive activity, a good question. I think you’re right with the answer to. So really no change. As a reminder, so much of our business is under long-term contract that we’re just — we’re not necessarily out in the market bidding on new opportunities each and every day. We win and we grow when we have competitive advantage to our customers in that market and they go win in the markets that they serve . And then as far as our contractual renewals in the Metal Container business, we always have a couple here and there. Nothing that I can think of off the top of my head as we sit here for 2024 that’s significant. But again, you understand our business model as well, that we’re always in conversations with our customers about investing in new capacity for their growth, etcetera. and we reserve the right to maintain those conversations.
Robert Lewis: Yes. I would say, George, just to remind you that with 90-plus percent of our business under some form of long-term contracts, there’s always something that’s coming for renewal but there’s nothing that’s out of the ordinary nor is it a large block of business. We’ve had these periods where we have the conversation that we’ve renewed a significant piece of our business and it’s had a meaningful price step down. We don’t have any impacts coming at us in the near-term.
George Staphos: And that’s what we’re getting at.
Robert Lewis: This is more ordinary course that’s out in front of us.
George Staphos: Understood. And custom, how big might that be someday?
Adam Greenlee: So there’s a couple of large contractual pieces of business. So I think, George, you should think about them in kind of the range of $8 million to $10 million of revenue kind of — for each of those opportunities. So call it two opportunities that will be commercializing in that range.
Operator: We’ll take a follow-up question now from Gabe Hajde at Wells Fargo. We’ll go next now to Adam Josephson at KeyBanc.
Adam Josephson: To Jeff’s question earlier, by the way, I certainly hope you’re doing your part to support national pet ownership. Bob, in terms of…
Adam Greenlee: I promise you, we are, Adam.
Adam Josephson: Fancy feast. Bob, on working capital, you’re expecting improvement there. Can you flesh out roughly how big a source of cash you’d expect that to be? Is it coming from lower inventories, lower receivables, any impact on payables.
Robert Lewis: Well, so what we’re really looking at is a smaller use on a year-over-year basis. So it’s a bit of a benefit. But given where inflation is and as we anticipate it to go, it’s not like we’re liquidating a lot of working capital. We just got a lesser use as we move year-over-year. So basically, if you think about where the free cash flow generation is coming from, it’s essentially the improvement in earnings, a little bit less of a use of working capital and the elimination of the payment for the European Commission that was made offset by the slightly higher CapEx is how you get to the broad bridge for working capital change.
Adam Josephson: Right. So there are no components of working capital that you’re expecting to be major sources or uses it sounds like, just a modest use on an absolute basis.
Robert Lewis: Yes, nothing out of the ordinary.
Adam Josephson: Okay. And Adam, just to put a bow around all the comments you’ve provided. Your guidance range for this year, the range is 5% which is entirely consistent with what it’s been in previous years, obviously, many people have concerns about the global economy but those don’t seem to be manifest in any wider range for you than normal? Because I ask because some other companies have provided much wider ranges than usual given the tremendous uncertainty that seems to exist. So do you have any less confidence just in the outlook than you’ve had in previous years given the state of the economy. I assume the answer is no but just hoping you could address that anyway.
Adam Greenlee: Sure. Maybe I’ll start with the last piece. So no, you’re right. The answer is no. We actually have more confidence, I think, as we sit here heading into 2023 than we had heading into 2022 because of all the uncertainty that we were facing. And Adam, we did have a lot of debate around this table and with our team about what that range should be. And ultimately, it’s kind of the last point. We said that we think there’s less volatility and less risk than what we came into 2022 with. And we think that we’ve got pretty good insight into the depths of our business and we should be providing that level of insight to the market. And there was discussion of a change but ultimately, we all agreed and decided that it would be appropriate to leave the range exactly where it was.
Adam Josephson: No, I appreciate it. And what is the if there is a particular source of uncertainty for you, is it around inflation? Is it demand? Is there anything? Is that the pack? It’s January, so you probably don’t know much of anything about the pack. But is there any particular source of uncertainty that you would call out or not really?
