Amol Chaubal: Yes. So, I mean, look, Vijay, the FX situation has improved versus what we said at the end of Q3 earnings call. Now, we are looking at 1% headwind on sales and about 3% headwind on EPS. The 3% headwind on EPS translates to about 50 basis points headwind on operating margin. And the reason for that is, I mean, U.S. dollar progressively strengthened throughout the course of 2022, and then it, sort of weakened towards the end of 2022. But where it is today, it is still a significant headwind for the first half of the year 2023, and that is, sort of playing through the numbers. And the reason there is an headwind on the operating margin is, we are one of the most geographically diversified companies in the sector, and we have a lot of revenue coming out of markets like Japan and China.
And while we are operationally hedged in a currency like euro and pound, we still have significant profit there. So, if you have a headwind that profit shrinks, and then we don’t have the level of cost structure in these other markets like China and Japan, which then creates higher FX flow-through on our operating margin versus our sales profile by a little bit. And that’s why you see the headwind on FX, on operating margin.
Udit Batra: And just, Vijay, your question on pricing, it was roughly 300 basis points. For this year, we expect 200 basis points as an assumption for 2023. And you can imagine that’s largely because the inflation is still not gone. Second, our new products definitely should command a higher margin as we go forward. And then, finally, the teams have built a muscle through these very, very difficult times on passing on pricing wherever it seems .
Amol Chaubal: And , I mean we had 80 basis points of headwind on FX. And the business was resilient. It sort of offset pretty much all that impact and delivered a flat operating margin. So, if dollar goes back to where it started back in 2022, I mean, all the work is done in terms of margin expansion.
Udit Batra: Now going into the year, we feel very good about where our margin profile is.
Vijay Kumar: That’s helpful Udit. And one quick one on the acquisition, 70 million of revenue synergies. That’s a big number relative to Wyatt’s revenue base. Can you give us some background on how well was this asset known? What kind of due diligence was done? What Wyatt’s revenue mix is coming from established biopharma versus early stage? What gives you the confidence in the revenue synergy?
Udit Batra: It’s a lot of questions. I’ll try to take them one after the other. 80% of the applications for Wyatt are in large molecule applications. As you know, we screen, and we were pretty clear on the Investor Day, we screen a lot of targets. And I can tell you without reservation, in bioanalytical, biophysical characterization, this is the Number 1 asset that we had in our minds. So, when we spoke with Geof and we spoke with Cliff, and we started our discussions, this was not something that’s unknown to us. We’ve known company really well, really well for a significant period of time. And what Waters does on the chemical characterization, on the composition of characterization, Wyatt does for using light scattering for physical characterization.
