Nigel Coe: Yeah, hey guys. I just wanted to perhaps come on the back of Andy’s question there, and I think you mentioned as well, Europe where you seeing sort of a pipeline of larger orders, kind of a lot of larger projects developing. It sounds like it’s more sort of reshoring into Europe. So I’d be curious you know, if that’s the case, whether you think this could be something we see happening pretty quickly or just more so ‘25, ’26. And any sort of color on some of the sectors where you see that activity?
Vicente Reynal: Yeah, there’s definitely a little bit of reshoring. And even I was actually talking to a very large chip manufacturing company earlier this week. And it is also about the color, the “CHIPS Act” put in Europe. I mean, so there’s also some investment of that happening, whether you think about it in the UK, so there’s some of that. There’s some of – going back to the energy crisis, there were some projects that got scoped around nuclear facilities and upgrading things like that, whether in France or in other locations and that takes time, but we’re seeing that better approvals coming through. So perhaps that is another bucket area that we see some good excitement there, where we have a very unique application with our blower technology that is already specting.
And the third area that we like is Middle East. I mean, we’re seeing a lot of good investments happening in the Middle East. Our team in Middle East and India are seeing the fruits of that. And even also India and particularly that as we have said in the past, doubling down on some of the investments in India are paying off based on the results that the team is writing.
Nigel Coe: Okay, that’s great. And then ILC Dover, the 25% that space and defense of. I think the question we are all asking ourselves was, how strategic is this business? And it sounds like it’s very strategic and it feels like you can actually – this sounds like you want to be a space player. I mean, it’s one of the better words. So is that the case? Do you think that it’s not just life sciences here? This is also an AMD play as well.
A – Vicente Reynal: Yeah, I mean, I think that’s what I call a very highly opportunistic in the sense that, I mean we’re learning a lot. But even before owning this space business, we were looking at already some compression technology and pump technology that is actually used in space. And even ourselves internally within PSP, we have a company called Haskel. And Haskel is already a big player, providing compression technology for SpaceX as an example. So we were all already kind of playing on the peripheries. I think this is now giving us a deeper penetration with some very strong customer base like NASA, Boeing and Sierra space and we’re learning a ton. So at this point in time, yeah, I mean we’re very excited with what we see here and we’ll continue to progress our learning, but yeah, I mean the funnel for bolt-on’s is there. We have it.
Nigel Coe: Great. Thanks Vicente.
A – Vicente Reynal: Thank you.
Operator: Your next question comes from a line of Joe O’Dea from Wells Fargo. Your line is open.
Joe O’Dea: Hi, good morning everyone.
A – Vicente Reynal: Good morning Joe.
Joe O’Dea: Can you just expand on the MQL trends during the quarter. The degree to which that surprised you, not sure if it was primarily China and Europe that drove that increase over the course of the quarter if there was anything in North America, but just any additional color on what you attribute that to?
Vicente Reynal: Yeah Joe, I’ll say that the reason why we wanted to kind of share that data points with everyone is because of not only in the MQL, but also the intra-quarter momentum that we saw that we also put on that page. It was just much more accelerated than what we have historically have seen in the first quarter. And I would say that the MQL fairly balanced across all the regions, believe it or not, particularly one of the regions that we saw good acceleration was around EMEA. But call it EMEA as well as Americas. I mean very, very strong on that, but yes, I think it was just fairly good across all the regions.
Joe O’Dea: And that continues in April?
A – Vicente Reynal: Yes. I mean April MQL activity was actually strong. 14% year-over-year growth on top of 5% growth in 2023. So again, it shows that good solid momentum. I mean I think 14% is very good. And I would say also April MQLs were also up 9% sequentially for March.
Joe O’Dea: Okay, very helpful. And then another one on ILC Dover, and I think the legacy of that business is aerospace and defense and that the life sciences is a relatively newer kind of addition to it. But could you just expand on what they did to build that out and now a $300 million business? And so what happened over the last several years to sort of put that together?
Vicente Reynal: Yeah, absolutely Joe. So you’re absolutely right. I mean I think the legacy here comes in from the space. And you remember that we mentioned that Dover is the one that put the man in the moon basically with the space suits and leveraging a lot of that kind of layering technology to really expand into inflatable habitats and things like that. So very, very specialized material technology that basically requires multiple layers. I mean, call it nine different layers in order to create containment, in this case containment of humans. So what they did is that, they took a lot of these kind of layering technology and material technology and knowledge and know-how to then move into the biopharma. And in the biopharma it’s basically about the containment of powders and liquids, and that’s why they have the single use powder and liquid contaminants.
And then from there, they took it to then how do they continue to expand? And then they acquire basically a CDMO, Flexon, the Flexon business. And they acquired it particularly because of the technology, specialized technology around silicon molding and extrusion, again all thinking about containment. And in this case, leveraging that very niche silicon production to create tubing for containment of liquids and move the liquids in a biopharma production. So I think the team was very strategic in terms of taking the core of the knowledge of the technology around material and material layering for containment, to then go into other diversifying very high growth end markets and I think that’s just the beginning I think in our interview.
Joe O’Dea: So it’s that more inorganic than inorganic building of that $300 million?
A – Vicente Reynal: For them it was basically a good blend of both. I mean, they had to acquire some companies, but then once they acquired, they continued that organic momentum.
Joe O’Dea: Great. I appreciate it. Thank you.
A – Vicente Reynal: Yep, sure.
Operator: [Operator Instructions] Your next question comes from a line of Nathan Jones from Stifel. Your line is open.
