Josh Spector: Hi, thanks for taking my question here. Curious if you could talk about your expectation on buybacks versus M&A. I know you talked about no M&A in 2024 kind of through the September period. Can you extend that through the rest of this year, and maybe think about ’25 in terms of your total capital allocation.
Edward Breen: Yes, so we’re not planning on any acquisition this year. When we do one, I would think it’s more in the tuck-in size. We’re not looking at anything big. We would love to add to the healthcare platform, and there’s a fair amount of what I’d call tuck-in opportunities there. I mean, it’s possible we could do one this year, but it’s not really in our plans. Our team, Lori and I have said to the teams, all hands on deck operationally as we were going through the destock, and that was our focus area. We still have an outstanding ASR for–you know, we just completed the one $500 million ASR, we have one more to do, so we would plan on doing that obviously this year, and then after that, I think it’ll be a nice mix of some tuck-in acquisition and, depending where our stock price is, I’ve always been a pretty big share repurchaser when I feel our stock and our multiple is not where it should be, so I don’t think you’ll see any change in our thinking there.
Josh Spector: Got it, thanks guys.
Operator: Your next question comes from the line of Michael Sison of Wells Fargo. Your line is open.
Richard: Hi, this is Richard on for Mike. I just wanted to ask in terms of the guidance for the full year, and what you’re seeing in terms of demand and destocking coming to an end, should we expect year-over-year volume growth starting in the third quarter, or how are you looking at volumes in the second half of the year?
Lori Koch: Yes, in the guide that we gave, we do see a return to volume growth in the second half. It ramps as you go from 3Q to 4Q, really just a comp because 4Q was our weakest quarter last year, but we will be returning to growth from both a volume and an earnings perspective in the second half.
Richard: Okay, great. Then just in terms of your comments on China recovering, was that more specific to E&I, or maybe if you can just talk about what you’re seeing on the water solutions side, because you do cite that industrial demand remains weak in China, but I guess you’re saying it’s recovering better than you thought?
Lori Koch: Yes, no change there, so the volume uptick that we saw in China in the first quarter was primarily E&I. As Ed had mentioned, we were up kind of mid-teens for volumes in China. We still do see industrial weakness that’s impacting W&P, primarily in the water space, so no change to our expectations. We will get the orders in from the key distributors towards the end of this quarter and be able to ship those to see a ramp sequentially in water, and then a further ramp as you head into the second half.
Richard: Great, thank you.
Operator: Your next question comes from the line of Frank Mitsch of Fermium Research. Your line is open.
Frank Mitsch: Yes, hi. Good morning. Lori, if I could follow up on a free cash flow question, what are your expectations–you did 86% free cash flow conversion in 1Q. What is your expectation for 2024?
Lori Koch: Yes, I think we’ll be at or near our target of greater than 90%. I was really pleased with the Q1 performance of 86% – that’s a sizeable improvement from where we were last year, which was around 45%. I do expect to take a little bit of a dip down in Q2, really reflecting the payment of our biannual interest expense, so that’s about $200 million. We pay it in May and in November, so it will be a headwind in Q2, but overall I expect us to deliver nice free cash flow conversion for the year, really around the target.
Frank Mitsch: Terrific. Ed, you’ve commented multiple times on how progress that you’re seeing, the progress in Asia, especially in China. The year-over-year negative delta has been lessening, down to 4% organic decline in 1Q. Are you anticipating that to be flat or up in 2Q and beyond in terms of the year-over-year comp?
Lori Koch: Yes, we expect overall China to be, both price and volume and currency headwinds, about flat for the year, so as you head mentioned, the Q1 numbers, we were up in volume but overall it was about flat with the currency headwinds. So yes, improvement in volume that we expect to see, and some currency headwinds as the year goes on.
Frank Mitsch: Understood, thanks so much.
Operator: Your next question comes from the line of Patrick Cunningham of Citi. Your line is open.
Edward Breen: Let’s go to the next one.
Operator: Your next question comes from the line of Steve Byrne of Bank of America. Your line is open.
Steve Byrne: Yes, thank you. The three-year stack on volumes in your water and protection segment is flat. The losses over the last four or five quarters essentially offset the gains in 2021, and you had kind of flat volumes in ’22, so just a question about that. Do you see that as suggesting just modest underling volume growth, or do you think that there might be some losses to generic products in that segment, and did you have visibility on those inventory levels that were–that have been destocked now?
Lori Koch: Yes, I think the history has been impacted a lot by COVID. We saw an unwind of the garments that were a sizeable benefit during the 2020 time frame, and you saw an unwind not unlike most of the peers out there, that saw a run-up from the garment perspective, and then once we moved through that, then we transitioned into the general industrial destock, so I think we need to look into 2025 to really get a good read on the volumes in that business. Right now, we’re expecting low to mid-single digit volume growth in 2025, off of a more normal macro, so no concerns overall around the efficacy of those products in the market. It’s really just getting beyond those chunky one-timers around COVID and then the broader industrial destock, to be able to see the true growth profile of that business.
Steve Byrne: Then Kalrez and Kevlar, these are both fluoropolymer products. Just a question for you on that – do you have any customers that are saying, I’m going to switch to something else just to avoid the flouropolymer issue, and how are you managing your own wastewater from the manufacturing of those products?
