Now within that, there are trends that we all know, Ghansham, that we see them manifesting themselves in our business. Smaller accounts and companies are struggling in this environment, larger accounts are getting bigger. In our business segments, we see in wrapping more softness and that’s driven by certain retailers, let’s say, in home furnishings or in consumer goods, in particular, the more durable expensive consumer goods where they might be adding a little bit of wrapping solution. We’re seeing more softness in those. We’re seeing the cushioning part of our business continue to perform and be very consistent. And in void-fill, frankly, it’s a little bit dependent on what’s happening in e-commerce. And not just broadly in e-commerce, because if it’s e-commerce that’s more grocery related and small items related, that’s not typically where we play.
If it’s more the slightly more weighty items, if you will, that require our solutions, then that’s where you see our product being consumed. So the reasons, honestly, varied, I would say, in void-fill and cushioning overall, we feel okay despite that volatility. In wrapping, this is the new reason why we’ve been innovating quite a bit and coming up with solutions to address market needs and price sensitivity from some of our customers. The softness has been a bigger disappointment and a bigger surprise for us.
Ghansham Panjabi: And that softness is more pronounced on a monthly basis in North America or Europe? Or is it equally sort of distributed?
Omar Asali: I would say probably a little bit more pronounced in North America than in Europe. And I would say, in Asia, depending on the country, there’s quite a bit of monthly volatility. So what we see, in particular out of China, South Korea, et cetera, can be pretty pronounced in terms of volume. I would say Europe has been a little bit more consistent. And then certainly, places like Japan and Australia have had a better cadence.
Ghansham Panjabi: Okay. And then just finally, as it relates to deleveraging, you made some comments in there about your commitment towards deleveraging, et cetera. You highlighted the liquidity that you have. But you have a couple of big tranches of debt coming up for renewal. And I think the swap expires in June of next year, which is going to increase your cash cost as well. So what is the strategy as it relates to deleveraging? Is it just based on EBITDA improvement and then some level of free cash flow conversion beyond that? Or how should we think about the phase towards your — towards hitting — the pathway towards hitting your target of under three times?
Omar Asali: Sure. I think — and I’ll let Bill chime in with the details. The first step is EBITDA improvement. We believe by the end of this year, at the end of Q4, we will be at a high-4 handle, which is a meaningful move in the right direction. And we feel we — given all the discussions and outlook, I said about 2024, we think that will continue to help us trend in the right way. And then obviously, next year, given the swap, as you discussed, we will be looking at optimizing depending on the cost of capital and the financing environment then. But we think through EBITDA growth, we could meaningfully go down from here in the very near term. But I’ll let Bill chime in and then give you more detail.
Bill Drew: Yeah, Ghansham, just on the deleveraging, right? I mean that’s a top priority for us as an organization. So priority number one is continue to increase EBITDA and hit numbers, so continue each quarter to get that leverage ratio down. And when we get below that five turns, right, that will save us 25 bps on our interest expense just based on the leverage ratio. And then throughout next year, right, focus on cash maximization and get ourselves ready to hit the refinancing market. The maturity is June 26, right? So we’ve got some time, but we want to do it from a position of strength. So top priority for the organization is minimize CapEx. The nice thing is we are through the majority of our major investment cycle, right, between the ERP and IT investments as well as all the real estate investments, which are coming to an end this year with only a small part carrying over into next year.
