Andy Kaplowitz: Appreciate the color.
Operator: Your next question comes from the line of Bert Subin with Stifel. Your line is open.
Bert Subin: Hey, good morning Bob and Claudia. Thank you for the time.
Bob Pragada: Hey, Bert.
Claudia Jaramillo: Hi.
Bert Subin: Bob maybe just taking that, I think that was more of a backlog question. You said in your prepared remarks, the outlook remains very healthy. Can you just walk us through how you’re thinking about the organic growth profile for the company in this coming year? Just for Remainco, you think the previous range for FY ’24 for P&PS was a 6% to 9% organic CAGR, with PA Consulting at 12% to 15%, do those remain intact? And on the advanced facility side, pretty positive comments there. Do you think that can keep growing double digits?
Bob Pragada: Yes. So the first part of the question, Bert, my answer is yes. I think on advanced facilities, I would say the underlying growth is strong. A lot of these larger programs, whether they be in the semiconductor space or in the life sciences space, are — there are several, in fact, from an account standpoint, it’s probably the highest that it’s been. It continues to stay at a very high level. We’re seeing now kind of the next wave of — I mentioned GLP-1, but also other novel therapies run, oncology and some of the neuroscience projects that we’re seeing. So the numbers will stay — as far as numbers of opportunities will stay high. Where they are in the project life cycle will kind of balance — imagine there’s two curves. One is kind of coming down as far as the way that we saw. The others coming up, which kind of leads to a 12 to 13 — I’m sorry, 12 to 18 month kind of reset there. Gather everything that I just said, your numbers work.
Bert Subin: Got it. Okay. And maybe just a level deeper into the P&PS side. You mentioned some positive remarks on water and on international opportunities. Can you just sort of give us the viewpoint on how you’re thinking about, I guess, the regional disparity in FY ’24? As FX starts to become less of a factor, do you think what you’re seeing in Europe and other parts of the world can rival sort of the growth we’re expecting from IIJA in the U.S.?
Bob Pragada: I don’t know if it will get to that level. But I think it will be robust. And I think Claudia mentioned it, our European business, despite these macro headwinds that it faced has done well. And so I think water transportation, energy transition that’s driving the U.S., probably more pronounced around energy transition in Europe. Middle East is across all of our sectors — P&PS sectors in the Middle East. And then in Southeast Asia and Australia and New Zealand, those have remained strong. Our business in APAC this year grew at significant double digits. And so a smaller base in the rest of the world. So I’d say all in all, the geographic diversity that we have in our business really, really is strong and helps us.
Bert Subin: Thanks, Bob.
Operator: Your next question comes from the line of Steven Fisher with UBS. Steven, your line is open.
Steven Fisher: Thanks. Good morning. I just wanted to follow-up on the mix element of the 300 basis point margin bridge. I think, Bob, when you were talking about the half before that’s mix, like how much of that is related to just not having the lower margin in CMS in there versus achieving better margins in P&PS? I guess I’m wondering when all is said and done with your cost optimization, will your segment-level margins be better? Or will that come out of some other initiatives over time?
Claudia Jaramillo: Yes. So Steven, let me just make sure I understand. So I’ll recap what Bob said, and then I’ll address the segment margins. So the first one is the going up to 13.8%, roughly half is just the mix. And by mix, I mean, just what remains with us. The other half is the cost optimization, the streamlining of the operating model. And that is really a function of the remaining businesses removing costs and also the addition of our digital enablement and all that. So that and other works, the segments remain with us or the businesses that stay with us are going to increase their individual margins. Does that answer your question?
Steven Fisher: Yes, it does. So as part of the cost optimization, there is segment level efficiency initiatives as opposed to just sort of the corporate level element. Yes, that’s helpful.
Claudia Jaramillo: Both operations that’s what the operating model, that’s where it shows overall as a company. Yes.
Steven Fisher: Okay. Great. And just trying to think about your debt position in about 12 months from now. I’m not sure if I missed if you frame this out or not, but $1.9 billion of net debt now, $1 billion of dividend coming back from the separation to pay down debt. Free cash flow looks like it would be about another $1 billion before whatever cash restructuring expenses you’re calling out. I don’t know how much that is. But are you assuming close to sort of a net cash position exiting 2024?
