Kevin Wheeler: Yes. Again, we’ve been watching it and it’s held pretty steady for a long time. Certainly, as we go forward and look at it, we still see housing renovation, even though things are going to be relatively flat, people are staying in the homes. We think housing renovation is still going to be a big part of how we go forward. And where it goes long term, we’re still trying to get our arms around it. We talked a little bit about some generational issues that we’ve seen. But overall, right now in 2024, we’re confident that the proactive replacement will stay steady. And we’ll continue to monitor it as we continue over the years.
Susan Maklari: Okay. All right. That’s helpful. And then as we come into this year, any thoughts on where channel inventories are anything that you would highlight there or expectations as we move through the year on that?
Kevin Wheeler: Well, I’ll start with North America water heating. We entered the year this year, pretty strong January. And I think we maybe had a little bit lower channel inventories coming into 2023. But we feel like we’re in great shape, very normalized on North America water heating. On the boiler and water treatment side, I think we still feel a bit ahead when as we go through the end of 2023, but feel like we’re going to exit the year in a good position of normalized inventories. In China, all the channel inventories are pretty much very normal kind of event for a while and kind of continue in that normalized zone.
Operator: One moment for our next question. Our next question comes from Saree Boroditsky with Jefferies. Your line is open.
Saree Boroditsky: Hi. Good morning.
Kevin Wheeler: Good morning.
Saree Boroditsky: Could you just go back and talk about what you saw from the water heater demand or market tier in the fourth quarter as shipments in October through November seem pretty strong versus the reported results and then any color on what you saw in January from a shipment perspective?
Kevin Wheeler: Q4 came in a little bit stronger than we expected and mostly on the residential side and we held our own and got our fair share of that. And so that was a nice positive plus. I think we’ve talked about being up four, being close to six in the residential side of the business. I will see how that actually comes out specifically. And I will tell you January gets early and January was a pretty strong month, particularly on the water heater side of the business. But orders remain strong. I mean, we continue to track towards our guidance. So in a one month view, we feel pretty good about what we’re at. And I would just tell you orders are fairly strong across all of our businesses starting the year. Again, one month doesn’t make a year, but we’re off to a good start.
Saree Boroditsky: Thanks. The rest of the world margins at 10% are flat from this year despite expectations for higher sales. So maybe just talk about some offsets that you expect to see there?
Chuck Lauber: Offsets for next year?
Saree Boroditsky: Yes. On the rest of the world side, on the margin.
Chuck Lauber: Yes. I mean, I’ll speak to China. So China first, we’re expecting growth in China 3% to 5%. Next year looks very similar in our outlook and that we’re going to be investing in new products, promoting new products, looking to have top line growth and kind of maintaining margins in China right around that 11%. So margin operating margins in China year-over-year, roughly the same. I think we’re, we’re really leaning on growth as in India. And maybe when you look at overall rest of the world, and you look at our outlook for India, we continue to invest in growth. So we’re going to continue to put kind of our, certainly we’re pleased to be in a profitable position in India. We would like to continue to invest in growth and have, growth outlooks of 15% in India next year.
Operator: One moment for our next question. Our next question comes from David MacGregor with Longbow Research. Your line is open.
David MacGregor: Yes, good morning, everyone. Thanks for taking my questions. I wanted to start by asking you about the North American gas tankless business. You talked about, it’s a contribution to that 50 basis points in margin pressure, but could you talk about the top line impact? What should we expect in terms of timing and the size of the impact in terms of, the initial channel fill? And how are you thinking about that within the context of your revenue guide?
Chuck Lauber: Yes. I mean, so we’ve got a revenue guide. I’ll just tie it back to the overall 3% to 5% growth on the top line. And, we’re pleased that there’s a number of drivers within that growth, and all of them are within the same amount, roughly. And if you kind of look at, just overall growth on tankless, heat pump, Kevin talked about pricing. We’ve got boilers growing kind of in that 8% to 10%. We’ve got North America water treatment growing 10% to 12%. And then, growth in China at 4%. And India, the ones that I mentioned are all very similarly sized. So it contributes in a meaningful way to growth, but it’s not, it’s not the largest part of growth in North America next year. We, I’ll just kind of tie it back to that we were expecting $100 million on the top line over three years. So, when we get to 2026, we would expect to be incrementally there. It’d probably be a little lumpy as we start out, but we’re looking for contributions in year one.
Kevin Wheeler: Yes. Just to add on the tankless side of it, we are building inventory as we speak. [Audio-Gap] on the ground in, we’ll launch in late March. We’ve already taken orders for it. And we’re excited about it. One, that we own the technology, we’re manufacturing, but more importantly, the first product that we’re bringing to market, which is a condensing premix, has all the features that quite frankly, we’ve been a little bit hamstrung with our product line. So two inch band, half inch connection, better flow rates are all, our team’s excited about getting in the market and being able to compete. So we’ll start in March. Early indications from a lot of customers are pretty excited about the product. We’re excited about the product. But as Chuck mentioned, this will be a ramp that we’ll start this year and continue to gain momentum over the next couple of years.
David MacGregor: Got it. Thanks for that. And there’s a follow up. I just wanted to ask about China, that the analysts meeting you outlined kind of a three segment, good, better, best market segmentation model. And what if you could just talk about what you’re seeing in terms of demand dynamics across those three segments right now. I realize AI link is still pretty new. But if you could share what you’re thinking, what you’re seeing there?
