Julian Mitchell: That’s great. Thank you.
Operator: Thank you. One moment for our next question. Your next question comes from Brett Linzey of Mizuho. Please go ahead.
Brett Linzey: Hi, good morning, all. Just wanted to come back to the investments and you talked about some of the carryover in the first half, just wanted to clarify, are these embedded within the volume portion of the bridge and separate from the footprint? I’m just trying to understand if you could quantify the investment versus restructuring and what those paybacks might look like.
Gerben Bakker: Yes, so if last year it was an investment that continues, i.e., if you added headcount, it would show up, yes, in margins, in volume. So, as we step things up in areas last year, for example, like new product development or people to work on productivity initiatives, that would wrap around higher costs, wouldn’t be a new investment, right, it would show up as you’re saying, Brett, in margin of that volume.
Brett Linzey: And then anything you can share in terms of the paybacks on these footprints? Is something embedded this year or is that a little bit longer term?
Gerben Bakker: Yes, I think the new – I think there is order of magnitude another $10 million of R&R in that bucket that will be invested this year it’s of a footprint nature and I think the paybacks are that we have good ROICs on that. The paybacks tends to be in the 3-ish year range and so we’re sort of investing today in those cases with benefits that probably start a year or two from now.
Bill Sperry: Maybe the other thing that I would say is embedded is some of those investments will drive a higher level of productivity that’s embedded in our guidance. So when you look at the construct of flat price cost productivity, it has a higher level of productivity and higher level of inflation in it to offset it. So that’s where some of those investments are going.
Brett Linzey: Okay, great. Yes, thanks for the color there. And then just a follow-up on the price expectations. So it sounds like no incremental actions embedded in the planning, I’d imagine you’re seeing some raw non-material inflation, maybe just a little context as to maybe what that potential hedge could look like if you do see it sticking some of these actions that you are out in the marketplace with.
Bill Sperry: Yes, I mean, you’d be kind of maybe asking a little bit about a speculative sensitivity analysis, right, so, you can see, each point – each point of price gets us north, obviously, of $50 million of price and it’s that – that’s a lot of leverage if there is no corresponding inflation to that. Conversely, if you have to give a little it equally has kind of this 100% sort of drop through, and so as Gerben sort of outlined, I think we have because of the investments we made last year, we have a more ambitious productivity target level and we certainly see some inflation on wage transportation area as well as in kind of a material-related areas. So, I think getting the rigor that we need to focus on all of those levers to come out even or ahead is sort of a – it’s an obsession. We review it really carefully every month at Gerben and my level and continue to push enough initiatives to make sure we stay even or ahead.
Brett Linzey: Got it. Appreciate the insight.
Operator: Thank you. One moment for our next question. Our next question comes from Joe O’Dea of Wells Fargo. Please go ahead.
Joe O’Dea: Hi, good morning. Thanks for taking my questions. First, just wanted to focus on the 2024 bridge and if we think about it, I guess in three buckets with the organic piece, the M&A piece, and then some of the restructuring, is it fair to think about a 25% incremental on the organic piece? And then on the M&A side of things, can you add any detail on what you think interest expense is in ’24, just so we get that right in the model, and does that interest expense contemplate the deployment of Resi Lighting proceeds? Thanks.
Bill Sperry: Yes, so I think we – you could put in about $40 million of incremental interest expense and I think the drop through of 25 on volume is reasonable. I’d rather see that more like 30, but somewhere in that high 20s is reasonable I think.
Joe O’Dea: And the Resi Lighting proceeds.
Bill Sperry: Yes, so we’ve – you see, we have interest income there as a plus and interest expense as a minus, so we sort of built to construct that, it’s either cash that’s going to earn or, yes, it’s going to be available to pay down, and I guess – so I guess the one thing I’d say is, it’s explicit that we’re not modeling in our guidance any new acquisitions and so that would be incremental to this guide.
Joe O’Dea: Got it. And then on the Electrical side, can you size roughly what the destock headwind was to top-line growth in ’23? And so just kind of the non-repeat of that, what we should think about that kind of contribution to the plus 3 to 4 for ’24.
Gerben Bakker: Yes, overall, I would say, sell-through volumes were down kind of in the high-single to low-double-digits most of the year and I think sell-through was flattish to slightly up, so it got better in the fourth quarter, but overall, I think you can think about it a single-digit impact on a full-year basis.
Joe O’Dea: Okay. And then just a clarification that the fourth quarter 9% organic in Utility, did you give the price and volume split of that?
Bill Sperry: Yes, the volume was – it was negative, right, so it ate into the price. Volume was slightly positive, Joe, sorry.
Joe O’Dea: Volume was slightly positive.
Bill Sperry: Yes, you’re asking for whole of Utility, sorry, I thought you were talking about [indiscernible]
Joe O’Dea: Yes, sorry, just 9% whole organic, so slightly positive volume. Got it. All right, great. Thanks very much.
Operator: Thank you. One moment for our next question. And our next question comes from Nicholas Amicucci of TD Cowen. Please go ahead.
Nicholas Amicucci: Hi, good morning, guys.
