Rob Wertheimer: Okay. Thank you.
Operator: Your next question comes from the line of Nigel Coe from Wolfe Research. Please go ahead.
Nigel Coe: Thanks guys. Good morning. A couple as well. You covered a lot of ground. On PST, maybe could you just remind us after this, obviously, this correction where is biopharma as a proportion of that segment now? And then on the fourth quarter in PST, I think we’re assuming a minus 5% to, I think, low to mid-single-digit growth there. I think the step up from Q3 to Q4 is a bit heavier than normal. So just wondering what you’re seeing near term driving that improvement?
Vicente Reynal: Yes. Nigel, first on the PST, overall life science is about a quarter of the PST segment. And biopharma, it is, maybe — I’ll say maybe I don’t know, maybe a third of that quarter and the big life science here for us, more so is on the oxygen concentration side of the equation. I think it’s important to note that when you look at PST segment ex life science, we have been able to kind of put organic orders and revenue positive momentum on 10 out of the last 11 quarters. So, that kind of shows the good strength and diversity of that segment, that gives us confidence on that overall over the long cycle or cycle the mid-single-digit plus.
Vik Kini: Yes. And I think your second part of your question was the sequential movement from Q3 to Q4?
Nigel Coe: That’s right. Yes. Yes.
Vik Kini: Yes. Yes, I think we do expect to see, what I’ll say, a slight nominal uptick from Q3 to Q4. I would remind you that this business doesn’t, I would say, have a tremendous amount of seasonality comparatively speaking to other businesses. It’s a relatively consistent quarter to quarter. But that being said, I’d say a combination of a couple of things. One, still continue to have a relatively healthy backlog, and that is reflected in terms of what we expect to ship in Q4 as well as Vicente indicated, relatively healthy and good, strong momentum on the, what I’ll call, the industrial side of the business, where you continue to see good order intake in Q3, and we would expect to see that continue into Q4. So again, for those reasons, we would expect to see a slight nominal uptick from Q3 to Q4. I’d say relatively consistent to what you’ve seen historically.
Nigel Coe: Okay, that’s great. Thanks Vik. And then on the — I mean, Jeff asked the question as well, but I just want to follow up on a couple of the $1 billion type transactions. Are these typical properly sourced negotiated deals? Or are these more sort of investment banking driven auction-type processes?
Vicente Reynal: No, they’re property sourced. I mean they are ones that we have been cultivating for quite some time.
Nigel Coe: Okay. Great. Good luck with that. thanks.
Vicente Reynal: Yes, thank you.
Operator: Your next question comes from the line of Joe Ritchie from Goldman Sachs. Please go ahead.
Joe Ritchie: Hey guys, good morning.
Vicente Reynal: Good morning. Hey Joe.
Joe Ritchie: Hey. So just a lot of color today. Thank you. Just as you’re kind of thinking through the book-to-bill and the order rates as you head into 2024, so is the expectation then that in the first half of 2024, we would expect a book-to-bill in IPS to be above one again, orders to continue to expand just based on what you’re seeing today in your MQL?
Vik Kini: Joe, yes, I think obviously, we’re not going to get into guidance for 2024 yet, but I think the construct remains consistent with what you indicated. I think in generally any degree of a typical year, book-to-bill above 1 through the first half of the year, particularly as that longer cycle kind of orders funnel continues to progress through. And then book-to-bill below 1, what I’d say, a combination of normal seasonality combined with the longer cycle, larger project shipping through the back half, that will typically led to that normal dynamic of book-to-bill above 1 in the first half and below 1 in the second half. Right now, no reason to think anything differently for 2024.
Joe Ritchie: Okay, great. And then maybe just a follow-up to that. Are you guys like hearing any concerns around projects pushing out a little bit to the right, just given what the rate environment looks like today and there’s been a — there’s been, I think, a lot of concern in the market with certain end markets, at least like seeing projects push to the right, like the renewable sector. I’m just curious what you’re seeing specifically in the conversations that you’re having with your customers?
Vicente Reynal: Joe, I’ll say nothing of significant or material change. And if anything, when we — if we see projects pushed to the right, it is really mainly due to sites not been ready which has been more driven by finding the labor to just get the sites on track and be done having heard much about the context of interest rates being the driver for getting these projects pushed to the right.
Joe Ritchie: Okay, great. Thanks guys.
Vicente Reynal: Thank you.
Operator: Your next question comes from the line of Joe O’Dea from Wells Fargo. Please go ahead.
Joe O’Dea: Hi, good morning. Thanks for taking my questions.
Vicente Reynal: Good morning.
Joe O’Dea: I wanted to start on just resource allocation planning for 2024. And I think you’ve got a model that allows you to be pretty nimble as you sort of exploit growth where growth is. And so what are you doing now? What’s kind of underway in terms of how you want to position those resources. And thinking from a geographic perspective, from an end market perspective, where you see growth is most attractive and how you’re positioning for that?
Vicente Reynal: Hey Joe, it’s an interesting question. I — again, and also maybe a few weeks ago, we were actually — we were together with our team — our demand generation team in Poland where we had a long week session, particularly thinking and looking at what are we seeing today and what do we expect to see in 2024? And how do we position the next level of demand generation activities to really position us in good strength as we go into 2024? So, all of that work is undergoing. I can tell you that — the one level of detail, I’ll tell you, as you kind of double click on that is that it varies region-by-region and even country — in countries within the region. Like for example, in Mainland Europe, what we might be doing in France is very different from what we might be doing in the UK.
And a lot of that is driven by what we’re seeing at the micro level. So that’s the level of detail that we undergo and we, as a team, kind of put together to really understand those best growth vectors that we’re seeing at the micro level versus not keeping it at the macro, which if you do it at the macro is, you’re going to get a few products wrong. So, that’s the exciting piece. As a team, we kind of get together, and we feel that we’re in pretty good momentum here to start 2024 in a good shape.
