Angela Jin: Got it. That’s really helpful. And then for my follow-up, so just thinking about your free cash flow guide of at least $500 million, can you maybe dig in more into, what portion of that is attributable to your core business versus FITTLE? It seems at some point right now that the core free cash flow is, for in the low 100s range unless there’s a plan to sort of very meaningfully ramp originations in 2023.
Xavier Heiss: Yes. So if I go back to — let’s start with 2022. In 2022, we said free cash flow is an anomaly. And it is an anomaly for 2 reasons. One anomaly is related specifically to the reduced profitability that we have in 2022. The second point, and I call it, good cholesterol, bad cholesterol. So good cholesterol was that FITTLE is growing. And when FITTLE is going, it means that the FITTLE is using cash and it has an impact on free cash flow. So now if I normalize this, and I project this in 2023, what will be a normal free cash flow? We gave you — I gave you an indication in my earlier comment there, by saying we expect in 2023 free cash flow without FITTLE movement here, normalized free cash flow to be around 90% to 100% of adjusted operating profit.
So that’s a earlier indication of what it could be. Then on top of that, you will have the benefit of what we call the forward flow agreement. You should look at this agreement as being simply the fact that we managed to get a great agreement with party who will fund the forward flow. By forward flow, you should look at this by saying this is like the future receivable from FITTLE or future origination of FITTLE, and we won’t have to do that from the Xerox balance sheet. What does that mean? It means that you will have the runoff of the book that was on Xerox balance sheet that will be completely offset by this forward flow agreement here. You have to take into account, 1 of the chart in the deck that explain it as an illustration. You have to take into account that FITTLE is still growing at the same time.
So this affects the $600 million waive 1 that we have signed in quarter 4, is offset by the fact that FITTLE is growing. So when you look at our guidance of $500 million, this takes into account this normalized free cash flow without FITTLE, let’s say, between $300 million to $330 million. And then you add on top of that roughly $200 million, and then you have this $500 million guidance that we have provided.
Angela Jin: All right. And if I could just squeeze in one last quick one. So equipment margins are up to 33%. So it drove a lot of upside in this quarter. It seems like the mix is more favorable than usual with A3 units being shipped and strong U.S. sales. So what is the sustainable level of equipment margins going forward?
Xavier Heiss: So equipment margins, when I look at the pattern we have had during the year, I’m not stopping only to quarter 4, I look at how equipment margin evolved across the year. And you’re right, mix is a key driver. But one of the key driver was, as well our ability to pass price increases to customers. And to keep this important margin for us, I would say, protected or intact in the way we were dealing on pricing with customers. This is what we have done. And we believe that with the prices that we have enacted and the impact it will have in 2023, we will be able to sustain and offset some of the pricing or cost inflation that we’re expecting here. So normalized margin is not far from what you have seen. I won’t say quarter 4 is entirely representative. But we can — if you want to — also provide via our IR team, give more guidance around how we look at the margin for the rest of the year.
