Bob Fishman: Yeah, that’s really how we do view it. We expect growth to return in Q2. Again, Q2 is historically our largest quarter. We had a big Q2 in 2023, but we still expect growth and then we continue to grow in Q3 and Q4.
Operator: The next question comes from Nathan Jones with Stifel. Please go ahead.
Nathan Jones : Good morning, everyone.
John Stauch: Good morning.
Nathan Jones: Let me start with a follow up on the Transformation initiatives. I think you guys have some pretty good visibility to the savings that you’re going to generate over the next more than one year, two, three, maybe even four years. Can you talk about the linearity of savings realization there out of Transformation? Kind of when do those savings peak and start to level off? Just any color you can give us on the longer term outlook?
Bob Fishman: Yeah, we’re pleased with what we’re seeing in terms of Transformation reading out. It was $29 million in both Q3 and Q4 of 2023. And as I just mentioned, we’re looking at roughly a net $75 million number in 2024. When we look at the funnel, we would expect those type of Transformation numbers to continue over the next couple of years. We think the funnel supports the various waves, whether it’s pricing, sourcing, the operations or the org excellence. So we think it’s going to create runway for us over the next couple of years, for sure.
Nathan Jones: And then I guess my follow up on the water quality business. I think Manitowoc burnt some backlog off that it had built up during supply chain challenges. Is it possible to quantify the tailwind that was there in 2023 and maybe is a bit of a headwind in 2024? And then what the underlying expectations are for growth for Manitowoc Ice in 2024 and beyond?
John Stauch: Yeah, let me just give some color and I’ll let Bob close out. I think we enter 2024, especially in the Q1 phase with much more normalized backlog levels. We still grew nicely in Q4 Manitowoc and we expect to grow again in Q1. So I think we’re at normal levels. Just as a reminder, this business was only taking 60 days to 75 days of orders. So the backlog was more relative to what the nearer term dynamics were, Nathan, not some level of large backlog that wouldn’t be used in the future. So obviously we had a great 2023. This business contributed nicely to overall Water Solutions and overall Pentair and we couldn’t be more pleased where we are. And 2024 is more about getting the filtration synergies lined up along with the Manitowoc Ice acquisition.
They’re the same business unit and when we gave the numbers of what we expected this business to achieve in the longer term of 2025, it was inclusive of those revenue synergies on both the services side and the filtration side. So very pleased where we are and very excited about the contribution we’ll see in 2024 and beyond.
Bob Fishman: Yeah, I would just add that historically Ice is a mid-single digit grower. When we look back at the CAGR, that’s historically what they’ve grown. The 23% increase in 2023 included some nice wins in China and working down the backlog. So as we look to 2024, we would expect that business to take a little bit of a breather down mid-single digits. But good news is that the business unit commercial water will actually grow low-single digits. So you’re seeing some benefit of filtration business as well as some of the synergies coming from the Ice acquisition but being captured within services and filtration. So overall could not be more pleased with how Ice is performing and continue to, once we get through 2024, be back on that mid-single digit type trajectory.
Operator: The next question comes from Mike Halloran with Baird. Please go ahead.
Mike Halloran: Thanks everyone, morning.
John Stauch: Good morning.
Mike Halloran : Can we just continue on the water solution side and round out the residential piece? Easy comps, still expecting some pressure, I’m guessing the cadencing improves through the year but any context on that piece would be helpful?
John Stauch: Yeah, there is easier comps but it’s also the most global of the businesses inside that portfolio, Mike, so we’re balancing off Europe, China and North America and while the comps are easier in North America, we do expect some return to growth. We’re not yet seeing the interest rate environment propel new housing starts and/or a lot more movements which is usually key indicators to drive that business. But we’re at levels now where we’re definitely growing off of these compares in North America but we’re anticipating a little bit more choppier outcomes in China and Europe in that business. So net-net probably slightly down but getting closer to flat.
Mike Halloran : No, makes sense. Appreciate that. And then quick clarification on something you said earlier, John. The expectation was for volume and price to be down. I’m assuming you mean that on a net basis and pricing is slightly up and volume is the majority of the downside? I just wanted to clarify.
John Stauch: That’s correct. On Pool —
Mike Halloran : On the Pool?
John Stauch: You expect a net price benefit and a contribution in line with the way that Bob shared it across the total Pentair portfolio and the offsets to that would be the volume which would be the market challenges.
Mike Halloran : That’s what I figured but figured out to clarify. I appreciate it everyone. Thank you.
John Stauch: Thank you. Appreciate it.
Operator: The next question comes from Scott Graham with Seaport Research. Please go ahead.
Scott Graham: Hey, and good morning. Thank you for taking my question. Just on two quickly — the fourth quarter price cost on the order side. I was just kind of wondering what happened there. But it looks like there was some slippage. And did that reverse, maybe in the first quarter or second quarter of this year?
