Operator: Your next question comes from the line of Jeff Hammond with KeyBanc. Your line is open.
Jeffrey Hammond: Hey. Good morning, everyone.
Ivo Jurek: Good morning.
Jeffrey Hammond: EMEA was one of your better growth markets. It seems like there’s maybe some broadening weakness there. Just speak to how you’re thinking about Europe into ’24?
Ivo Jurek: Yeah. So Europe, the anticipation, Jeff, is that ag is going to continue to remain weak as the construction end market. Other remains kind of flattish to plus LSD. Diversified Industrial still reasonably negative core growth and all the news flow from places like Germany and Italy is not necessarily terrific. So who am I to predict that it’s going to get dramatically better short term. So we anticipate that, that’s going to remain somewhat weak and maybe as the second half progresses, start getting less bad. And On-Highway, we anticipate is going to be down versus 23%. So Europe, I think, is dealing with more fundamental slowdown than perhaps any other region that we participate in.
Jeffrey Hammond: Okay. And then I was at super compute and saw some of your houses on some liquid cooling applications. And certainly an area of strength and conversation. Just wondering if you can speak to that opportunity. I’m not sure if it’s a rounding error or if something we should get excited about. Thanks.
Ivo Jurek: If I get excited about every opportunity, when you sit in my chair, every opportunity is a great opportunity. But we will speak actually a little bit more about the hyperscale data centers and the liquid cooling in dose. We actually have a couple of really interesting technologies that I will share more about both on the electric water pump side that helps to provide efficient cooling and on leak-free applications for conveyance of the fluids that cools these data centers. So yeah, we’re actually excited about it. I’m not prepared to size the opportunity for you at this point in time. It’s early stages, but we’re excited that we have lots of — actually have lots of really interesting technologies that are being adopted in what I kind of term the new economy from hyperscale to broad-based electrification and industrial automation. So we’ll share more on March 11 in New York.
Operator: Your next question comes from the line of Mike Halloran with Baird. Your line is open.
Michael Halloran: Good morning, everyone. A couple of questions. First, on the — just on the guide one last time here. I look at just normal sequentials and it kind of gets you to the middle part of the range. Normal sequentials doesn’t necessarily imply anything better from here from an end market perspective. So you’ve commented on gradual improvement in the back half of the year. I’m just kind of curious what that means from your perspective? And if that’s even really required to hit the midpoint of the range versus just kind of float along at current levels?
Ivo Jurek: Yeah, Jeff, I think that — I would say that certainly, the back half of the year has significantly easier comps as well, right? So that’s going to be part of it, to be quite frank. And we kind of feel that Q1 is, frankly, a continuation of what we have seen in Q4, in terms of the demand dynamics. And then just steady normalization of demand as inventories have normalized as the underlying purchases are very much aligned to the underlying demand for the products and the applications that we service. So it really doesn’t — again, we’re being very pragmatic, but we don’t believe that we require any significant improvement in the end markets to be able to deliver the guidance. And again, it’s an early guidance. That’s why we are quite forefront and fore-right about making sure that we have to put a pragmatic view of what we believe the world’s economy is going to do.
Michael Halloran: And then on the M&A side of things, how developed is that pipeline at this point? You’ve been out of the market for a bit focused on other areas of capital usage certainly understand your comments about how many expensive your stock is and that makes it a priority. But if the opportunity comes up, how invested or how in the market are you on the M&A side to be able to identify and go after some of those areas?
Ivo Jurek: Yeah. Look, because we don’t necessarily talk about it front and center, doesn’t mean that we don’t develop a strong pipeline. We have a good pipeline of opportunities, but again, the issue is that our stock is undervalued. And we just believe that, that is just — it’s just tough to compete with generating strong returns on deploying that capital, and we believe that it’s in the best interest of our shareholders to go further reduce our debt and opportunistically deploy capital through share buybacks. And that’s going to put the company in the strongest and very forward-leaning footings as the time moves forward over the next kind of four, five, six quarters, you’re going to be in a situation where you can start thinking about maybe better, bigger deals, if that’s what you ultimately want to do, getting the stock and the valuation normalize because, again, I certainly feel that the stock is quite undervalued.
And we’ve got to do everything that we can to take advantage of that.
Operator: There are no further questions at this time. I will turn the call to Rich Kwas for closing remarks.
Richard Kwas: Thank you, everyone, for participating today. If you have any follow-up questions, please feel free to contact me. Thanks, and have a great day.
Operator: This concludes today’s conference call. We thank you for joining. You may now disconnect your lines.
