Operator: Thank you. One moment for our next question. Our next question comes from Andrew Steinerman with JPMorgan. Your line is now open.
Andrew Steinerman: Hi, it’s Tom. If you could believe it, I’m going to ask my two questions about FX. So the FX drag in the just reported quarter was $0.03. And you said, of course of the stronger dollar than a year ago. Could you just tell us how much FX drag on EPS was expected by management in the just reported quarter, kind of like back in November when you started to guide? And I might as well just give you a second question about FX. So also now looking at that full-year guide on Slide 13, your model assumptions, I see this line that says FX will be a 2% drag on fiscal 2023 guide at current FX rates. I assume that’s a revenue figure. So if you could, what is the assumed FX drag on EPS? And of course, you can imagine I’m talking about at current FX rates.
Tom Ondrof: Yes. About both for — is the answer for or about 2% for both — both what we anticipated and then what we expect for the full-year. And then it does impact revenue and bottom line equally.
Andrew Steinerman: You said, I just to make sure I heard you said you were expecting about $0.03 of FX drag in the quarter?
Tom Ondrof: Yes, 3% in the quarter. We were expecting — you asked that —
Andrew Steinerman: $0.03.
Tom Ondrof: Yes, to begin with.
Andrew Steinerman: Yes, $0.03. Yes.
Tom Ondrof: It’s probably a little bit more than we expected.
Andrew Steinerman: Okay. That makes sense.
Tom Ondrof: Beginning of the year and then we expect it to be a little bit lower to average out about 2% for the year.
Andrew Steinerman: I understand now. Thank you so much, Tom.
Operator: Thank you. One moment for our next question. And our next question comes from Neil Tyler with Redburn. Your line is now open.
Neil Tyler: Yes. Thank you. Good morning, John. Good morning, Tom. Quick question on the revenue guidance and breaking that out into the components. You are running I think you said pricing is running around 6%. I understand the base effect will cause that to slow. But then if you add net new into on top of maybe a mid-single-digit price effect that doesn’t leave a lot within the mid-point of your revenue guidance for further organic growth recovery given the trajectory you’re on. So are you being — are you seeing any sort of signs of maybe participation rates declining anywhere or any other trends that would cause you to be sort of cautious on the recovery of the base business?
Operator: One moment, please standby. Ladies and gentlemen, please standby. Your call will resume momentarily. Ladies and gentlemen, please standby. Your call will resume momentarily. Ladies and gentlemen, please standby. Your conference will resume momentarily. Ladies and gentlemen, please continue to standby. One moment please.
John Zillmer: Okay. Can you hear us now?
Operator: Yes. I can hear you now. Thank you. Our next question comes from Neil Tyler with Redburn. Your line is now open.
Neil Tyler: Yes. Hi guys. Yes, so the question I had was really on the revenue guidance and taking the mid-point of that organic revenue guidance. And if I deduct pricing, which I think you said is running at about 6%, obviously that will ease due to base effects. And if I deduct your net new contribution in the mid-point, then that doesn’t leave a lot left for the base business recovery. So I suppose the question, is there anything in the business that you are seeing that would cause you to expect that to sort of — to the rate of recovery to slow meaningfully i.e. participation rates going in the wrong direction or any longer-term caution on the impairment of any of your businesses? Thank you.
Tom Ondrof: No, really don’t. It’s just really a gradual lapping of last year’s recovery because we started the year in the mid-1980s, finished the year in the mid-1990s. And so the recovery is going to ease the sort of base recovery is going to ease as we go throughout the year with net growth staying in that sort of 4% to 5% range that we’ve talked about. And then pricing obviously will ease a bit too as we lap what was very strong pricing this past Q4 as we get to the next this year’s Q4. So I think all those things will naturally ease the net growth will stay constant.
Neil Tyler: Okay. And then I suppose — yes, so in that context, when you spoke previously about the sort of bridge to your revenue targets and trajectory and you talked about $1.6 billion to $1.9 billion at the beginning of last fiscal year, and I guess you sort of overshot that a bit, so maybe there was $.5 billion left. Can you give us some updated thoughts on how much of that you think may not come back?
Tom Ondrof: Well, yes, the bulk of it is B&I and it could be 80% of that that balance. I mean we’re so far well beyond the 2019 number that it in terms of recovery it’s almost irrelevant now. And it’s also hitting the crosswinds of what is not COVID recovery and what is the beginnings of recessionary impact layoffs and that type of thing, particularly within B&I and you see in the tech sector. So it’s really hard to disaggregate coming up on three years on or past three years on as to what is layoffs, what is COVID recovery, what is participation rates, what is pricing. So with respect to the question, I — it’s just becoming less and less relevant, especially as we’re moving way beyond our COVID-19 base revenue levels.
Neil Tyler: Okay.
John Zillmer: Yes. I would — Neil, I would just add that there really all the other businesses have gone well beyond the COVID recovery index and are growing rather nicely without significant impairments. Really the only business that has any lasting impacts is B&I, which still has some return to work kind of activities taking place. But you’re seeing those trends accelerate, so hard to predict exactly how the rest of that business will get layered in whether companies continue to maintain four-day work weeks or continue to re-expand their work schedules. So it’s just really hard to predict. But we fully expect that B&I as a business will be very profitable and will continue to grow going forward. And so we’re not really focused on the recovery — on that recovery number any longer.
It’s just business growth driving base revenues and growing new accounts, adding new accounts and the like. So — and I have to also add my apologies for the technical difficulty. Sorry, that call dropped. We couldn’t reconnect. So apologize to the listeners for that brief gap in coverage.
Neil Tyler: Thanks very much. I’m glad it wasn’t something I said.
