Robert McMahon: Yes. I think if — I’ll try to answer all that in short order, Rachel. As we think about the first half of the year, yes, we think that we — as we look at our business and look at that kind of book-to-bill, we’ve kind of troughed in Q2. Q3, I think we mentioned actually was a little better. It was less than — still less than 1 and then Q4 continue to improve. And our expectation is that, that kind of performance will continue. Now we’re going up against difficult comps when we were actually bleeding down our inventory. And that particularly happened in Q1 and Q2 of last year as we were talking about it. And so I would expect us to have the trough of ’24 be in Q1, Q2 being a little better and then growing out of that as we benefit from the easier compares.
And I would expect our P&L and the EPS to look very similar to that. Q1, we are — we’ve taken most of the actions they will have all been taken in the first quarter, but they won’t have a full quarter. And so we’ll have full quarters of the cost savings in Q2 through Q4. And so as that business kind of improves as the business improves, we’ll get more and more leverage on the bottom line.
Operator: Moving on now to Derik De Bruin at Bank of America.
Derik De Bruin: So can we talk a little bit about pharma? That market was up and down all year, not a lot of visibility. Are you seeing some of the orders that were sort of stuck in the funnel starting to come loose, right? I mean, how are you sort of looking at the pharma market going forward?
Mike McMullen: Yes, I think the answer is the deal funnel still remain elongated. So…
Padraig McDonnell: So yes, I think what we see from our funnels is that they’re growing, but the velocity in closing deals from the point of funnel to order is still static on that side — elongated.
Robert McMahon: Yes. And Derik, I think if we think about the pharma end market, we’re assuming very low single-digit growth for next year. And some of that is actually getting past the tougher comps in China. If we looked at actually our pharma business ex China, we grew in FY23. And actually, our biopharma business grew in total. And we think about small molecule was the area that was dragging the pharma business down as you know very well, that typically has a replacement cycle. We are well into that replacement cycle. We were up very high. We kept calling it. And we’ve seen that be very depressed, and our expectation is that will start coming back in earnest in ’24, but probably in the back half of ’24.
Derik De Bruin: So this goes — sorry to beat this up, but your China got going down. Pharma, you just basically said you’ve got — not — you don’t have a ton of visibility, hope things have come back. I’m just not — I’m curious why you can put a little bit more cushion in the guide, like that. It just seems like — it still feels like it’s a little bit — it still feels like it’s a little back end. Well, it’s not a little a lot back-end heavy, given where we are soaring in the cycle?
Mike McMullen: Yes. I think as we said earlier, Derik, there’s reason to believe that you have the comps working in our favor for the second half, there’s real. And we know that customers want there’s interest in the products. And I think they’ve got a step — and by the way, we’re not calling for this miracle snapback in 2024. But we’re also saying that small markets continue to decline 20%, 30% on the numbers we’re seeing this year, particularly, that’s where the pressure has been. But we know that biopharma, they need some tools for R&D. We know that those replacement cycles only last — can only be held up for so long. So there’s confidence relative to what we see in the funnel. Deals aren’t coming out of the funnel. And then although we are focusing here on pharma right now in his commentary, there’s a lot of other strength in some of the other secular markets and applied markets, in particular, which is a nice diversification we have on the instrument side as well.
And Bob, I don’t know if there’s any additional thoughts on the pharma story.
Robert McMahon: No.
Derik De Bruin: And just one final one. Just what were bookings. I mean, I know you said the book-to-bill was greater than 1, but I’m just curious in terms of bookings. And do you often see a spike in bookings in Q4 Basically, I’m just trying to get the sense of like what you saw as a head fake or you’ve got — where you think you’ve got real demand here?
Robert McMahon: Yes. So we don’t give the absolute dollars rather than to say it was greater than 1. It was — roughly 1 for the total company and then instruments were higher. Typically, we do see a where it is higher. So this kind of goes back to kind of our historical performance where orders are a little higher, particularly because we have October in our results. And so last year was actually an aberration, so to speak, as we’re working down the backlog and this kind of gets back to our normal process.
Mike McMullen: Yes. And through the quarter, Derik, we saw a normal seasonality. So there wasn’t anything unusual about the order pattern to kind of say, is this a head fake or not. So I think that also is one of the reasons why we say, okay, early signs of some stabilization here. Again, not huge growth. We’re seeing stabilization.
Operator: We’ll go next now to Jack Meehan at Nephron Research.
Jack Meehan: So I wanted to dig a little bit more into LSAG in the quarter. Can you break down the growth between instruments and consumables and just any commentary across product lines.
