Stephan Tanda: Yes, let me take the first one and then Bob come, back on the second one. So fundamentally, we’ve been prided for this, we’re living in a new world. The competitiveness of supply chains regionally is very important and we have a number of steps that we are executing on to increase our competitiveness. This one that I mentioned earlier in China is really a company we’ve collaborated with for some time and now making a minority investment in and we really see it as filling out some of the gaps we have in our industrial footprint in China that will serve us well to serve not only the Chinese consumers but consumers across Asia and in particular, I would highlight that it’s an integrated capability of designing and building molds, building equipment, some additional dispensing manufacturing capability that’s complementary to what we have, and last but not least, additional metal and anodizing capability that’s almost impossible to get new approvals for, and it’s very important to have for integrated solutions.
So, in respecting our partner’s wishes, we’re only disclosing a lot more detail when we close, but what we can disclose, you will find in the K.
Bob Kuhn: Yes, and George, on the point, on the one-time items positively impacting, we were happy to report that we were able to close out our insurance claim dating back to our fire and our anodization facility in France, so that’s now behind us, which is great news. The huge devaluation in Argentina was an unforeseen negative in the quarter, and then we had some other items that popped up from a quality perspective that we’re not anticipated. All-in-all, it netted, let’s say, roughly about a $2 million positive in the quarter for Beauty.
Operator: Our next question comes from the line of Daniel Rizzo of Jefferies.
Daniel Rizzo: Hi, good morning. Thank you for taking my questions. Just getting back to what’s happening in China with the JV, which sounds exciting. I was wondering if there’s a concern with protecting IP in the region, just given you working with a local manufacturer?
Stephan Tanda: Look, we’ve been operating in China since the mid-90s, so I think we’re quite experienced in how to manage IP risks, and it really depends. In this case, we’re really existing a lot of technology from the partner and getting that at competitive conditions, and it’s just making the local supply chain more complete and more competitive. And I mean, by analogy, we’re also improving the competitiveness of our North America supply chain, and we are actually expanding capacity in Mexico as more and more of our customers want to do nearshoring and reroute some of their supplies in the US, so we’re expanding our capabilities in Mexico to make the US supply chain more competitive. So it’s really similar kind of concept, just broader based.
Daniel Rizzo: Okay, and then with the restructuring and productivity costs, just two questions. One, what is the cash cost going to be for 2024, for the region and the productivity you’re doing? And two, when should we think that we’re kind of getting towards the end of the program, or is it ever going to end where a lot of the heavy lifting is already done?
Stephan Tanda: Yes, so we don’t give guidance on that. When you do these things in Europe, roughly that you can have a two to one kind of rule of thumb, meaning that the annual savings rate costs about two times as much in terms of restructuring costs because basically you’re talking about severance for people. And that’s guided by law and the social plans. And yes, what we have on the hopper now, so to speak, we see contributing to the bottom line in ‘24 and well into ‘25. But if you get additional ideas, of course we will execute on those. The big themes are reducing labor, streamlining factories, shutting down some factories like the closure facility in France, and moving activities into global talent centers in Eastern Europe, in Mexico, and in Asia. So those themes will continue. And as we have new ideas and additional ideas, we will disclose them at the time when we are ready.
Operator: Our next question comes from the line of Alexander Yee of Wells Fargo.
Alexander Yee: Hey, this is Alex on for Gabe. Thanks for taking my question here. I guess I want to ask about the pharma pipeline. I know you guys laid out a path back in your industry during September. Can you maybe provide any updates that you guys have in terms of new projects or any kind of conversion or commercialization improvements that you guys are seeing for 2024 versus from when you gave us the last update.
Stephan Tanda: Sure, Alex. What we try to describe maybe a bit complicated, of course, the pipeline has things going in and things coming out. And when you launch a product, those are no longer in the pipeline. We had in ‘23 a record year of new product launches, those things come out of the pipeline, and then, of course, it depends how well they do in the marketplace, and that’s usually a multiyear built. What we said is new projects that we put into the pipeline were on a risk-adjusted basis. That’s how we measure the pipeline value, of equal value of what has come out of the pipeline in terms of product launches. So we feel actually very good about that given the record launches in ‘23, and that’s why we feel, it’s another reason why we feel very comfortable with to raise the long-term target for pharma.
Incidentally, we also see, although it doesn’t have the same mechanics, but we see the order book, if you want, order pipeline growing in the consumer-facing market as we are more on the front foot with project opportunities.
Alexander Yee: Okay, thanks. I guess, can you, I don’t know if you can, but if you could, how much would last out biologics be as part of your pharma portfolio?
