When you look at as reported margins for the year, those will be down probably about 50 basis points due to acquisition dilution. So that’s the whole story.
Nigel Coe: Okay. That’s really helpful. And then just quickly on geographies. You’ve gone through the end markets but just wondering if there’s anything to call out in ’24 geographically?
David Zapico: Yes, I’ll do a summary of Q4 geographically, so you know where we stand. And we had growth in the quarter led by the U.S. and Asia. So the U.S. has been strong all along. Asia is picking up a bit. The U.S. was up mid-single digits with notable strength in our Materials Analysis division and Aerospace & Defense, Europe was down high single digits, driven in part by our automation business. And Asia was up about a little under 10%, about 9% with strength in our Materials Analysis division and our Ultra Precision Technology division. We have a dynamic that was a little different than what’s going on in the general marketplace. Our China sales were up 22% in Q4. So that — they were up about 14%, 15% in the year, 22% in Q4.
Strong growth in our Materials Analysis division and UPT. When we look into 2024, we think we’ll grow in Asia, but we think China is going to moderate to more of a flattish market because there was some — one of project businesses that we benefited from. So it’s still going to be good for us, but we are seeing the broader impacts on the economy, and we think it will be flattish on an orders basis in 2024 in China, and we’ll grow in Asia.
Operator: Our next question will be coming from Scott Graham of Seaport Research Partners.
Scott Graham: Hi, good morning. Bill, congratulations on a great run. It’s been a complete pleasure working with you. I hope you remain happy invest to your family. Thank you.
Bill Burke: Thank you very much, Scott. Appreciate it.
Scott Graham: I was hoping, Dave, you could go through the orders a bit for the quarter, both in total and organically?
David Zapico: Yes. Sure. The — let me make sure I’m looking at the right stuff here. Yes, the orders in total for the quarter we’re up 16%. Now that was largely driven by the Paragon acquisition because the orders get booked as backlog the first when you acquire a business. So that 16% orders, EIG orders were up 3% and EMG orders were up 43%. And again, the EMG orders were driven by Paragon. Organically, the orders were minus 2%, and it translated into a book-to-bill of 1.10.
Scott Graham: And would you expect, Bill, that sometime in the first half, perhaps the second quarter that the orders may be really kind of flatten out for you organically and then start to progress into the second half?
David Zapico: Yes. I think in the first quarter, we have some pretty difficult comps. So I expect a similar trend with orders trailing sales. But then as we get out in the second half of the year, maybe even in the second quarter, I think the orders will outpace sales. Yes.
Scott Graham: Got it. Thank you. And then might just one other question. Within the guidance, I guess, I was a little bit surprised at the level of organic you’re expecting in a good way. And it looks to me off of your summary that, that’s stemming from the aerospace and defense businesses. Would you mind parsing out for the total company kind of what you’re expecting in sort of Aerospace versus Defense this year and maybe tack on what the drivers are, particularly in commercial?
David Zapico: Yes. I mean the overall organic growth for the company is a low to mid-single-digit number, and that’s going to be in both groups, EIG and EMG. And in terms of Aerospace, we think we’re going to grow about the same level that we did this year at plus high single digits. And we have really good diversity in that business. And the military orders are strong, and the commercial OE aftermarket are strong, and the commercial OE are good, too. So we think largely the — both the military and the total commercial markets are going to be up high single digits in 2024. Pretty optimistic about that.
Operator: Our next question will come from Rob Wertheimer of Melius Research.
Rob Wertheimer: Thank you. So first question is just on growth into ’24 and maybe even beyond on the growth algorithm. It seems like your expectations starting out the year is more price-led than volume. And I assume, obviously, some of the destock or channel that you talked about is holding that back. But as we get into 2H, are we looking at return to normal volume growth? And then maybe we’re in place environment. I don’t know if you have a bigger picture view on where pricing is going? Are we in more of a 3% world and as volume comes back, that kind of ticks up core as we exit the year? That’s my first question.
David Zapico: Yes. That very well could happen, Rob. I think the — I think we’re in a 3% pricing world. And I think our volume has the potential to be a little stronger in the second half than the first half. So that — what you’re saying is kind of how we’re thinking about it. We’ve been pretty conservative in our second half outlook. But if there was something that could exceed it, it will be the second half volume. Sales volume organically.
Rob Wertheimer: Okay. Perfect. And then I wonder, just given the rise of med tech in the portfolio, if you could just give a general thought on your value add there. Is it different from anything in the core, general thoughts on core growth there. And then if the acquisition environment differs at all, if it’s more white space, if it’s more competing against others and deals? Just a couple of general thoughts there, if you would.
David Zapico: Yes, we’ve been acquired some good medical businesses. I mean as we go back and look the Rauland business has been a fabulous winner for us and that business is growing in the market. And we made an EMC acquisition, and that business has been very successful. And that business is in the similar market that Paragon that gave us confidence. And it’s — they’re classic AMETEK businesses. We win in the market based on technology, based on engineering. They’re a little more OEM than end market. But basically, our whole EMG business is more OEM than end market. You have longer looked at your customers in terms of what you’re going to be building in the future. So it’s a pretty stable market. And we just think the growth in the case of Paragon over the next 3 years will be a little bit slower to get down on that gate because of some of the things that are going on.
But we’re pretty confident it’s going to be a low double-digit grower over the next few years. So we think with those portfolio additions, they’re going to grow just a bit greater than the rate of our base portfolio.
Operator: Our next question is going to come from Andrew Obin of Bank of America.
Andrew Obin: Hi, guys. Good morning. Can you hear me? Hey, Bill, congratulations. Yes. So just a little bit more color. You — I think other automation like short cycle companies expect second half rebound. Your comments sort of indicate something very similar. What kind of visibility do you have on that? And what gives you confidence that things are actually are going to turn in the second half? And I acknowledge that your view is very much consistent with what we hear from everybody else.
