But, I would take that with a grain of salt right now, but it’s one trend that we watched now for a number of months, and it hasn’t changed, and it continues to be strong. So you put that together, is there a generational impact there? Maybe. But we’ll continue to monitor it. But right now, it’s held up surprisingly well now for 16 straight quarters.
Nathan Jones: That would be a nice tailwind, if it’s a structural change to the industry. I guess, my second…
Kevin Wheeler: I would tell you, we think that as well, but we’re not ready to say that. But again, it’s something we watch and the data that we use, we’ve been doing this for a decade-plus. So, it’s been a good guidepost for us long term. But again, we’ll see how it plays out. But right now, we see the proactive side of it holding up pretty well.
Nathan Jones: That’s good news. Second question on, I guess, your cost input. You guys had guided to seeing sequentially lower margins in the second half than the first half. And despite the outperformance you’re still are getting a bit lower margins in the second half than the first half, with higher-priced steel costs rolling through the P&L in the second half. We did see pretty significant declines in steel costs over the last six odd months before the last week. Should we expect to see that start rolling P&L in the first half of ‘24, and you should get some nice benefit from a price cost standpoint in the first half price of 2024?
Kevin Wheeler: [Technical Difficulty]
Operator: Please stand by for our next question. Our next question comes from the line of Bryan Blair of Oppenheimer.
Bryan Blair: To help us think about Rest of World segment profitability and your potential there, how does the contribution margin on your new China offerings compared to segment average? And what’s the run rate margin in India? And how does your team think about operating leverage there?
Kevin Wheeler: [Technical Difficulty]
Bryan Blair: That makes sense. Any quick color you’d offer on your M&A pipeline? You’ve executed some bolt-ons that are pretty down the middle in terms of your water treatment strategy. It’s been an interesting year with macro uncertainty in the rate environment and just that overall mosaic. Just curious how your deal funnel has progressed and how your team is thinking about actionability over the near term?
Chuck Lauber: [Technical Difficulty]
Operator: Please stand by for our next question. Our next question comes from the line of Susan Maklari of Goldman Sachs.
Susan Maklari: Maybe to start with, I’m not sure if maybe it’s our line, but I think you broke up a little bit when you were talking about the previous question on raw materials and how we should be thinking about steel over the next coming quarters. Can you just maybe perhaps go back and reiterate some of those key points for us?
Chuck Lauber: [Technical Difficulty]
Susan Maklari: No, you’re very clear right now.
Chuck Lauber: [Technical Difficulty]
Susan Maklari: Okay. That’s very helpful. Thank you. And then, following up on the conversation earlier as well on thinking of proactive replacement versus the more nondiscretionary pieces of there. Can you give a bit more color perhaps on how you’re defining one versus the other? And as you’re thinking about that potential structural shift that’s coming through, any thoughts on what portion of the volumes today or the demand today is really sort of coming from that proactive replacement relative to the sort of nondiscretionary side of it?
Kevin Wheeler: [Technical Difficulty]
Operator: Thank you. Please stand by for our next question. Our next question comes from the line of Andy Kaplowitz of Citigroup.
Andy Kaplowitz: Kevin and Chuck, can you give us more color into the components of China growth in terms of the strength in commercial water treatment and the new products growth you’re seeing as well as the mix benefit you’re getting? And then, how do you think about the durability of that growth going into ‘24?
