Brian Newman: Sure. Happy to Amit. So, from a shape of the year perspective, the full year we called revenue at 1% to 4%. But based on lapping of the volumes and the contract overlap, we would expect revenue to be flat to down 2% in the first half, up 4% to 8% in the back half. And from a profit perspective, I had mentioned that it’s a tale of two cities. In terms of halves of the year, the second half of the year, we’d expect profit to grow about 20% to 30%. So Q1 will be the biggest challenge because we’re lapping from a volume comp perspective and a full contract. But on a full-year basis, we’re looking at OP margin 10% to 10.6%. I think you can expect the second half of the year to be 11% to 12% in that range and you can back into the first half.
In terms of your question of backing out the $1 billion in cost, that $1 billion will be a cost-benefit in 2024. But I think we’ve said in the past, Amit, it would take twelve months to digest the new labor cost. We are confident we can get back to consistent expansion of US margins as we lap the first year of the contract. That’ll be a combination of pricing and productivity. So, net-net, it’s really lapping that contract and then you start to get the benefits. As Carol said, some of those benefits would accrue over to 2025 as well.
Amit Mehrotra: And are we done there on the $1 billion or is there like there’s $55 billion in total cost? I mean, are we just getting started or like what’s the actual opportunity there beyond the $1 billion?
Brian Newman: So Carol talked about the differences between the Nando and Kate, the operating cost and what we’re talking about management headcount. If you bifurcate the two, I think you’re going to hear more at the Investor Day through things like network of the future, how we go after additional headcount in that area. But this would be about a 14% reduction in that 85,000 heads.
Carol Tome: Yeah, we’re never done. We continue to drive productivity. It’s a virtuous cycle here, and technology has changed so much in the past year. When you think about the advent of Generative AI and the applications inside of our business, we’re just getting started and I’m really excited about what the future will mean in terms of driving productivity and as well as improving the customer experience.
Amit Mehrotra: Thank you very much.
Brian Newman: Thanks, Amit.
Operator: Our next question will come from the line of Conor Cunningham of Melius Research. Please go ahead.
Conor Cunningham: Hi, everyone. Just to stick with the productivity side, you’ve been obviously pretty dynamic with your network and you mentioned, I think, 30 close outs — sort closures and whatnot. Can you just talk about the consolidation opportunity in ’24 and how that may play out to drive further efficiencies in the business? Thank you.
Carol Tome: Yeah. We’d be happy to do that. But we’re going to kick that question to our March conference because we’ve got a great presentation to share with you regarding network of the future, and it would take up way too much time today to go through that. We want to spend a good amount of time talking to you about that in March. So thank you for understanding.
Brian Newman: Thanks, Conor.
Operator: Our next question will come from the line of Allison Poliniak of Wells Fargo. Please go ahead.
Allison Poliniak: Hi. Good morning. Just want to turn to the growth aspect of it, I guess, more specifically the market share capture. Could you maybe walk through the different levers in terms of — I know you mentioned Project Brown, your ability to recapture diverted volume, but also talking to the SMB penetration, your opportunity on the healthcare side, just any color in terms of where those levers can be pulled for that market share growth in ’24? Thanks.
Carol Tome: I’ll start with a few comments about Project Brown. Project Brown really is a new way of going after business and it has many elements to it, and I’ll make some of those real to you. First of all, we looked at ourselves and said, what’s getting in the way of speed? Because it was taking us too long to respond to a customer. And we found that we hadn’t really declared service level agreements amongst the various groups that participate in this exercise of providing offers to our customers. So we shortened up the time to response and that’s important and that’s going to be with us now forever. I can make that real for you. Outside of the United States, it used to take 22 days. We dropped it to six days. We’re now at two days.
That’s best in class. And we’ve made similar improvements in the United States. Project Brown was also looking at Deal Manager. Deal Manager is the new tool that we introduced that uses artificial intelligence and machine learning to score a deal and avoid the need for our salespeople to go up to our pricing people for appeals, they can actually see the score of their deal. We’ve had great acceptance and win rates, 79% win rates with this tool. But we found through Project Brown that we weren’t offering all of our products in the tool and one of the products we weren’t offering was SurePost, which is a great product. So we introduced SurePost into the Deal Manager, and we’re getting some good return on that. That’s particularly attractive for our small and medium-sized customers.
