Operator: One moment for our next question. And our next question will come from the line of Michael Sison from Wells Fargo. Your line is open. Michael, your line is open. Michael, if you could please disconnect and try dialing in using the U.S. toll number or use the Call Me feature that would be great. Thank you. We’ll go ahead and move on to our next question. One moment. Our next question comes from the line of Vincent Andrews from Morgan Stanley. Your line is open.
Vincent Andrews: Thank you and good morning. You know, raw materials have been good new story in the back half of this year, in particular, helping you know, drive, drive some nice margin improvement. Is it fair to say that, that rise will probably continue to be a benefit through the first half of next year and then probably flatten out maybe we just start there.
Robert Patterson: Yeah. I mean, look, I think a lot of that of course depends on ultimately what happens with, with demand. But we’re still at a relatively low-demand type environment than I would expect the level of benefit that we are seeing right now does continue into the first half of next year. And obviously when you just look at the bridge schedule that Jamie presented, that’s a pretty significant, pretty significant benefit and tailwind. So hopefully that is the case, but I mean obviously with the — we do expect growth in 2024 which could take that down a little bit.
Vincent Andrews: Okay. And just you know, as we think it’s, it’s obviously early to talk about the full year 2024. But you know, as we think about 4Q, the way that it’s going to come in, you know, do you think that’s the sort of starting point for 2024 that 1Q, maybe just a bit better than 4Q or do you think 1Q could actually have a nicer step up from the 4Q exit rate?
Robert Patterson: I mean, look, typically, our, our first quarter and second quarter are the strongest of the years. Europe is typically the strongest in the first quarter. And I am expecting a good you know, first quarter, so you would see a step up from Q4 to Q1, simply because of seasonality and demand patterns that we see there. You know as I was said in my prepared remarks, you know, I’m really pleased with what we’re seeing right now. Anybody else is saying that are thinking that, but a lot of it’s been because of what we can control you know, with the facility closures, with the cost reductions and doing what we’re doing with price margins are overcoming the lower sales. So, I see that as a positive on 2024.
Vincent Andrews: Okay. Great. Thank you very much.
Robert Patterson: Yeah.
Operator: One moment for our next question. And our next question comes from the line of Kristen Owen from Oppenheimer. Your line is open.
Kristen Owen: Great. Thank you so much for taking the questions. Wanted to follow up on that last one. And just sort of outline some of the puts and takes for the margin coming into 2024. I’m looking at the adjusted EBITDA margin bridge that you provided at Sustainability Day here on Slide 19. Just thinking about the puts and takes for 2024 sort of those items within your control on the margin side.
Robert Patterson: Yeah, I mean, so there. One is, I mean, kind of just do the math right and maybe as a follow on in my previous response. I mean if you just look at where we are on the EBITDA bridge in Q3 and assume flat raw materials going into next year, you know, you should see some similar comparisons until you get to really you know, the middle of next year, which I think is true. There’s a little bit of cost action that has yet to you know, that will come into 2024 because those actions you know, came into fruition this year, you know, partly through the year, later in the year. And then lastly, just you know, one additional facility that we’re looking at, that was always part of the original Clariant, PolyOne sort of synergy plan, those are things that you know, I look at right now.
You know, I’d say that’s in our control. I’d also say look so as — you know, so as pricing and I think we’ve done a really good job of that over the last a few years. I view that as a strength. I think that’s a great sign in our portfolio and think that’s in our control for next year as well.
Kristen Owen: Fantastic. That, that was part of my follow up question. So I’ll ask a different one then. We’ve spent a lot of time talking about Europe, but I recall you mentioning some potential green shoots out of Asia earlier in the year. I’m just wondering if you can provide an update on that region. Thank you.
Robert Patterson: Yeah, I mean, look, I think you know, at the beginning of this year everybody was really optimistic that you know, when Asia know sort of came out of the COVID protocols specifically China, you know that we would see a return to growth. A little bit of that, we did see at the beginning of the year, we saw an uptick and requests for color design, color match and so on, which is usually a pretty good leading indicator that additional business is coming. But China is really kind of had some fits and starts this year and is largely you know, not you know, reached what we thought would happen. So I kind of view that as sort of flat or unchanged probably to where we were just a few months ago, so not much to report there at this point. I know there is some discussion around you know, government stimulus ultimately that could always take place would be should be a positive, I would think if that if that happens but until it does we’ll see.
Kristen Owen: Thank you so much.
Robert Patterson: Sure.
Operator: Thank you. One moment. For our next question. And our next question comes from the line of Laurence Alexander from Jefferies. Your line is open.
Laurence Alexander: Good morning. So wanted to touch on kind of the longer term growth targets you laid out at the Sustainability Day and you’ve been talking about, you know, for several quarters. How has the destocking affected your confidence and that maybe another way to put it is how much of the sales lost to destocking this year, do you expect to get back in 2024, 2025, you know, if and when demand trends normalize? Or do you just see kind of that longer term target now being applied to a lower base.
Robert Patterson: Yeah. Like I ultimately I see this playing out over a cycle where the growth rates that we presented inclusive of you know 2023 will be achievable going forward. So — in some of those cases obviously we’re down in 2023, just to give you some perspective on that. Laurence obviously with our guidance you can see with total sales are down in third quarter is down 15%. So far this year Sustainable Solutions have been down around five or six, kind of hard to get excited about a negative but obviously holding up well. So I do think that that helps to support the long-term growth rate that it’s really not down so much in 2023. Look, in terms of how destocking comes to an end and what that means for demand really has yet to be seen in play out yet, and I really can’t put any specific numbers to 2024, yet on now.
I think that plays out. But I am — look I’m optimistic and positive about composites and about sustainable solutions, returning to growth next year.
Laurence Alexander: Thank you.
Operator: Thank you. One moment for our next question. And our next question comes from the line of Vincent Anderson from Stifel. Your line is open.
Vincent Anderson: Yes, thanks, good morning. So not to deliver the price versus raw material conversation too much more. But you know, as I’m working through expectations on your mix on a mix that you know, now includes significantly more pigment than historically. I’m kind of curious if you’re able to optimize your color offerings around maybe a lower cost pigment mix in a way where intrinsic physical properties on, on a resin input wouldn’t allow that kind of flexibility on your part.
Robert Patterson: I’m not sure I completely got that question. But —
Laurence Alexander: Make rate cheaper.
