Rachel Vatnsdal: Thanks so much. Yes, good morning. Thanks for taking the questions. So, I wanted to push a little bit more on bioprocessing. You’ve noted that you’re not modeling an inflection in that business this year, but can you talk about if you’re seeing any of these green shoots from customers, signaling that they may have gotten too lean on inventory? And then if we look back at last year, you’d mentioned on the 4Q call that, you’d had conversations with customers that shifted your expectations around bioprocessing and order trends at the JPMorgan conference last year. So, can you talk to us about how those conversations with customers trended at the conference this year and how that’s impacting the guide as well?
Matt McGrew: Yes, maybe I can start, and Rainer can probably – he had more of the customer conversations than I did, if we’re being honest. So yes, I mean, I think when we think about the guide and you think about green shoots, I think maybe the way I would characterize it, is we – you know, six months ago, there were no anecdotes. There were no customers coming and saying, I needed something quickly. There were no pull-forwards from out-quarters into this quarter. I think, we have started to see a little bit more of that here anecdotally. I don’t think it is widespread enough to be able to say, we’re going to be beyond this in the next two, three months, which is why we sort of have our – the first half tagged where we do. But combined with the – our tracking of the inventory, so we do know where it is at.
We’ve got a much better handle on that. Combined with sort of some of these anecdotes and frankly, a little bit better sort of funnels that we are seeing, we do feel like we’ve got a little bit better visibility as we head into the year, which gives us the confidence, as we talked about earlier, to think that the de-stocking is going to be largely behind us as we get through the first half. And that’s sort of how we modeled into the – into the book-to-bill slowly kind of getting up. But not wanting to get, real aggressive and call a big inflection anywhere. So that’s sort of how we – what we’ve seen here over the course of the last probably three, four months. So anecdotally, a little bit better situation out there. Are hearing some good things that you want to call it a green shoot, I suppose you could, but I’d probably call it, a good anecdote that is now starting to see more of those and sort of less of the negative ones, if you will.
And maybe, Rainer, you want to talk about the customer discussions at JPM?
Rainer Blair: And just really just to confirm that we continue to see a trend of more positive conversations of customers returning to normal order patterns, thinking about how they’re planning out not only the first, but the second half of the year. So all of these conversations are directionally, we believe, positive and sort of support what we saw also in the sequential improvement, which was partially seasonal certainly, but we also saw some improving order patterns there. So what we’re looking for ultimately, and that’s what Matt referred to previously, is a broad-based improvement in order patterns, at which point we will update accordingly. But where we sit today, we think that the first half will be slower also related to some of the comps that we talked about and that the positive development, which we’ve seen here in the past months, will continue and then manifest itself really in the second half where we then exit with high single-digits or better exit rate.
Rachel Vatnsdal: Great. And then my follow-up, I wanted to just press a little bit more on this pace of recovery within bioprocessing. So, one of your peers has slowly been taking up their book-to-bill sequentially over the last few quarters. They just recently crossed that 1.0 level. That said, though, Danaher is really one of the few companies, or only that has been actively working with customers to manage their inventory levels. So while I appreciate the guidance, isn’t modeling a massive inflection at some point this year in bioprocessing, how should we think about that impact in managing your customers’ inventory levels on what that does to the pace of recovery? And is there some reason why we shouldn’t see more of a V-paced recovery – V-shaped recovery excuse me for Danaher? Thank you.
Matt McGrew: Well, I mean, I think it’s a little bit tough. When everybody is going to be, while we are all in the same kind of boat, I think everybody will have a slightly different timing about when we get through sort of the inventory destockings. So, I think part of it is going to be the breadth of our portfolio. Part of it is going to be the geographic mix we have, and part of it is going to be just sort of our customers and where we were kind of heavier or not. So, I think there’s a lot that goes into it. So I think, it will be a little bit different for everybody. I think kind of each modality might be different as well. So cell culture media might be different from chromatography and filtration. So, I think all of those things combined sort of, are what we’re seeing.
I think everybody is going to see it at a different time, and I think you saw that with us in the first half of last year. We were – only down low singles, and I think some other folks were down mid-teens or more, right. So I think, there is going to be a little bit of a lag in timing. Could – to your second question, could we see a V? I mean it’s possible, but we did not want to kind of model that in for a lack of a better – we don’t have enough confidence right now. We have not seen it in the order book of enough magnitude and duration, to be able to call a turn of a V-shaped recovery. Is it possible? Sure. Anything is possible. But if we see that, we obviously would talk about it. But we’re going to exit the year here at high single-digits from a high single-digit plus, frankly, as we exit the year.
And if we do better than this forecast that, we have here of in the nines, that will have obviously an impact on – at some point the exit trajectory. I suspect it depends on when it happens. Specifically if it happens earlier, I think it would have an impact. But again, we’re not planning for it. When we see it, we will obviously update and let people know. But for this guide, it is – you’re trying to be transparent with everybody. That’s what we’re expecting, or what we’re guys planning for.
Rachel Vatnsdal: Great. Thank you.
Operator: Our next question comes from Puneet Souda with Leerink Partners. Please go ahead.
Rainer Blair: Good morning.
Puneet Souda: Yes hi, yes thanks, Rainer. My first question – I’m tempted to ask about bioprocessing, but let me stick with instrumentation first. Could you tell us what you’re expecting for growth in instrumentation in 2024? And maybe if you could provide some context on the instrumentation recovery, and when can we potentially start to see that at a normalized sort of growth level?
Rainer Blair: We think, our life science instrumentation business will, for the year, be down low single-digits. And that’s based really on a softer first half of the year and then slow, but persistent improvement here in the second half of the year. What are some of the drivers of that? Well, first of all, here in the first half, we are looking at some pretty significant comps. You will recall the China loan program in particular in the first half of last year, put us into mid to high-teens growth. And of course, at the current activity levels, that will result in a softer first half here. We also talked about the fact that pharma, biopharma, are constraining their investment a bit more along the lines of just recently having changed out, their installed base, taking advantage of additional dollars available during the pandemic and normalizing here as we get through the first half of the year.
If we think geographically, China remains weak and we don’t expect that to improve here. If anything, that will be a second half of the year dynamic. So life science is starting to stabilize really at the activity levels of the second half of last year. We expect that to continue through the first and then see gradual improvement here in the second half of the year, also from a comp perspective.
Puneet Souda: Got it. That’s helpful. And then on Abcam, could you update us on the DBS efforts there? And what are you seeing in terms of the RU antibodies markets and expectations that you have for sort of Abcam in ’24? And lastly, if I could just ask about after the Veralto spin, how are you thinking about capital deployment overall? Thank you.
Rainer Blair: So, first of all, Abcam, we couldn’t be more pleased than having closed that early here in December. They had a good finish to the year and we are working with the team and we’re up and running. And of course, you can imagine the DBS implementation is proceeding, in a focused way where the team is really pulling. So Abcam is on the way. Then as it relates to capital deployment, you heard my comments earlier around our balance sheet optionality, which is strong, we believe, differentiated. And post the Veralto spin, we’ll continue, as we always have, to work on deploying that capital to strengthen our portfolio and continue to be active as always.
