So unlike the U.S. where you either unionized or not, and that’s it. In Europe, you always have a work council and at the national — local union. And of course, those dynamics are different and time lines are different by country. So that’s why it takes quite some time to get all this done before you actually can implement. And then, of course, there are different stages of implementation first you need to give employees an opportunity to voluntarily take a package and then you look for redeployment and then you look for reductions. So this is a very thoroughly prescribed process and it takes the time, but you get — once you get to the end, you got to execute.
Unidentified Analyst: Great. Thanks for the color. And then should the realignment change the way we think about capital allocation going forward? And would you be able to quantify some of the costs that you’re going to incur due to realignment?
Stephan Tanda: The realignment does not create a lot of cost by itself. And the capital allocation does not really change that much. Clearly, we expect some capital savings by pooling assets that do the same thing, but we have ramped up our capital deployment towards pharma from five years ago, it was mid-20s now being over 50%. They will not change. And yes, we certainly count in more capital efficiencies, but you also see in overall CapEx guidance.
Unidentified Analyst: Great. Thanks for taking my question and good luck in 2023.
Operator: Thank you. Our next question comes from Dan Rizzo from Jefferies. Dan, your line is now open.
Daniel Rizzo: Good morning everyone. Thank you for taking my question. You talked a lot about margins, I think, in Beauty and Home. And I was just wondering in the Pharma segment, what the EBITDA or EBIT margin target is? And now over — this year and over the next couple of years where we expect to get to?
Stephan Tanda: Yes. Our external targets for pharma are 6% to 10% top line growth and 32% to 36% EBITDA margin. Not that the guarantee there’s every single quarter, but over time, that’s what we look for. And clearly, we are growing quite nicely at the moment. Now we’re putting in a lot of new capacity in our injectable business, which has created a drag. Bob mentioned $8 million in quarter one, going then down to $2 million to $3 million a quarter for the balance of the year. And we are also investing in digital health, which is a lumpy business, but on average, it’s also about $0.02 a quarter drag. So even with that, we look at the 32% to 36% EBITDA margin.
Daniel Rizzo: Those investments are most of this year or will it be over the next several years? I assume it would continue.
Stephan Tanda: The injectable investment is in multiple phases. So maybe let’s just step back. Injectables, we basically have three manufacturing steps. One is what we call the mixing where you prepare the polymer. Two is the molding where you create the stopper or the plunger or the needle shield. And then three is the washing and finishing that then creates the finished product. And we have three locations, two in France, one in the U.S. And those investments are made in all three locations at different steps of the value chain or this process that I described. We’ve concluded the first two in France are now making a third one, which is a big building next to the existing facility in Congers in New York also. So these increments come on stream at different times, and we’ll be done with everything about in 2024.
Daniel Rizzo: All right. Thank you very much.
Operator: Thank you Dan. Our next question comes from Kyle White from Deutsche Bank. Kyle, your line is now open.
