Luca Savi: The trajectory doesn’t change, Joe. The trajectory for this business is up. And we have been very, very rigorous, very disciplined, everybody understands in IP that the rigor and the discipline in pricing is fundamental for us to deliver the performance that we are delivering. So just to give you another data point, if we look at the backlog that we do have today, also the projects backlog is at a record high of profitability. So everybody understand it. we have the proper processes, and we are executing that way.
Operator: Our next question comes from the line of Damian Karas of UBS.
Damian Karas: I want to start off asking you about the friction. I know you mentioned with respect to EV still targeting getting to that 30% global market share by 2026 and share gains continued to be expected this year. But there have been some headlines out recently about the global market leader in EVs, losing some market share to some of the Chinese manufacturers. And in general, it seems that EV space is getting more competitive. So just curious to hear your guys thoughts on what it means for ITT friction, your market positioning and profitability.
Luca Savi: Well, that’s very true, Damian. I think that the dynamic probably is changing, it’s getting more competitive out there, a couple of things. I think that the market will keep on growing, growing very fast, that has not changed. When it comes to the competition, we are still able to differentiate ourselves when we’re playing against the competition. So you’re still facing challenges when you are designing the braking system for EVs that are still relatively new. And therefore, the speed to solve those problems is something that really helps you to differentiate. And this has really helped us so far, and we believe it’s going to help us for the years to come. We haven’t — and this is demonstrated by the number of electric vehicle platforms that we have been winning in 2022 with 78% for the full year.
Emmanuel Caprais: And Damian, I would say that the greatness of friction is that we play with everyone. And so whether it is a Chinese electric vehicle or a more traditional OEM also continuing to develop ICE platforms, we made a point to apply the same focus and to defend our existing business and go after the competition. And so I would say that even if there’s a transition that changes a little bit or slows down, this does not impact our business.
Damian Karas: Understood. And as it relates to capital deployment, it doesn’t seem like you’re planning for much buyback this year. Are you maybe expecting some acquisitions to hit or €“ why is that? If not on the deal front, would it possibly make sense to repurchase more shares or offset some of the higher interest expense. Really appreciate just any thoughts around that.
A €“Emmanuel Caprais: Sure. So as you mentioned, Damian, we are really focused on growing this business through M&A and adding complementary businesses to really strengthen IT. And so we mentioned several times that we have a very healthy pipeline. We’re going after great opportunities. And when we travel around to see all these opportunities, it’s really refreshing to see that the team can relate immediately to the business opportunity or even the customers. And so we feel pretty good about our M&A activity in 2023. And that’s why it’s going to take precedence above repurchases. If that doesn’t materialize for whatever reason, then we’ll continue to be aggressive in repurchases as we’ve been in 2022.
Operator: Our next question goes to Joe Giordano of Cowen.
