Padraig McDonnell: I think that’s right, Mike. And I think as far as the quality of orders remains — that remain in our backlog, nothing has changed. We’ve not seen any increase in cancellations and ex China the funnel continues to grow and that’s led by the aftermarket business. I will say as a continuing theme, the deal closure times remain at an elevated levels but it’s definitely stable and deal win rates have been consistent.
Mike McMullen: Yes. I think there’s been an important point made here, elevated but we’re not seeing the elongation. So they’re stable but they’re longer than they have been in the past.
Operator: Your next question comes from the line of Dan Leonard with UBS.
Dan Leonard: My first question, just a bit more on China. Are you expecting sequential growth in Q2 in China similar to Q1?
Robert McMahon: No, if you looked at the sequential number, it’s going to be roughly the same as what we had in Q1.
Dan Leonard: And Mike, congrats on your retirement. I was wondering if you could elaborate on timing. I was surprised, others were surprised. I’ve gotten the question a number of times and we would just love to hear your thoughts.
Mike McMullen: Yes. Thanks for that. So while it’s maybe a surprise to many on the call and it was a surprise when I shared the news across the company because the Agilent team just knows how much I love working for this company and work with them. And it really was a hard-wall, really difficult decision for me but not been contemplating this for a while. And I pulled the Board into the discussion sort of communicating with them because we really wanted to make sure that they had enough time to really run a thorough and thoughtful selection process in which they were able to do. And in my mind, they came out with the best possible choice in selecting Padraig. But yes but this is something that I’ve been contemplating for a while and then try to engage in the Board about my timing and then I really want to make sure they had enough time to really pick the right successor and that’s what they did.
Dan Leonard: You always seem to be having a lot of fun. So congrats again it’s been good.
Mike McMullen: Thank you. It’s going to be hard to step away. But I have to say, the [indiscernible] family was just too strong. We have a 6-month old — 18-month old grandson and he will soon have a brother and sister so there’s a lot going on, on the family side. And there’s only one way I could make more time. So again, it’s been a real pleasure to work with all of you on the call.
Operator: Your next question comes from the line of Luke Sergott with Barclays.
Luke Sergott: I just want to talk about the margins on the quarter and kind of the step down in DGG and LSAG and I assume, obviously, it’s probably driven by the volume declines there on the instrument side. But how do you guys view the recovery in the margins between DGG and LSAG throughout the year to hit your guide?
Robert McMahon: Luke, this is Bob. Just real quick. You’re right. If I look at DGG, it actually was improvement year-over-year but it was down and it was really a result of that margin or the volume. I would say also there was an element of mix in LSAG and I would expect that to continue to improve. The cost actions that we took weren’t fully actualized all and as expected in Q1. So we’ll have the full impact of those as well in Q2 throughout. So I would expect an improvement over the course of the year as volumes grow up in both LSAG and DGG.
Luke Sergott: And then, just a follow-up here from the 2Q guide. Can you just help frame what you guys are embedded there by the different segments?
Robert McMahon: Yes, if I look at Q2 guide, we’re still expecting, if I looked at the end market pharma down double-digits academia and government down low single digits really as a result of some of that timing shift, diagnostics and clinical down mid-singles and chemical and advanced materials, down high single digits and food about the same. Both of those are, as a result of some of the shift also in the China business from Q2 back into Q1 and then environmental and forensics kind of mid-single-digit decline.
Operator: Our final question will come from the line of Paul Knight with KeyBanc.
Paul Knight: Mike, really super to see you love doing what you’re doing and I knew you, I don’t know, 15 years before you became CEO. So I guess, concluding question I would have, at least professionally, would be what do you see in terms of two things. Number one, why do you think the kind of market growth rate is for the markets that Agilent participates in? And then geographically, where do you see the surprise over the next 5 years? Like will Japan reinvigorate its growth? Will Europe see more in-sourcing? I would love to have your perspective on those things.
Mike McMullen: Thanks, Paul. Yes, we do go way back to don’t we and it’s been great to work with you over those years, going way back to the CAG days in my prior role, I think we think this is a 4% to 6% kind of growth market, mid-singles. So we think that the kind of market growth that we’re not experienced in the industry right now is the anomalies and this will be back to that 4% to 6% kind of long-term growth rate. Obviously, certain segments within that overall macro number, that big TAM will be growing faster than that and that’s always a challenge to make sure that you pick those segments so you can actually beat that number. I think there’s going to be some geographic mix. I mean, we’ve evolved our view of long-term growth into China because we actually expect some of the supply chain moves and other things that have been going on that you’ll see a growth, more growth in Europe which has been more of a slower grower for us geographically.
But we’ve been — continue to be surprised how well we do. Our team does in Europe. I think you’re going to expect to see Japan rejuvenate it, particularly, I think you can make the case of the semi industry which is going to return to some strength in Japan. But that’s the beauty of this business is just the diversified nature of both the end markets and geographies. So that would be my last — I guess, my final projection of long-term growth for the market in this role. But thanks, Paul. I appreciate the comments and looking forward to staying in touch.
Operator: I will now turn the call back over to Parmeet Ahuja for closing remarks.
Parmeet Ahuja: Thank you, Regina and thanks everyone for being on the call today. With that, we’d like to close the call. Have a good day, everyone.
Operator: Ladies and gentlemen, this concludes today’s call. Thank you all for joining.
