Andrew Kaplowitz: Could you give us a little more color regarding your order cadence within Building Solutions and what you’re seeing, obviously, most of the slowdown in orders as you said in Q1 was because of the slowdown in China, but did you see a dip in orders because of the cyber incident and then improvement, I think you changed your incentive comp structure for some of your salespeople as well in the quarter, so a lot going on, and how are you thinking about orders and backlog from here?
George R. Oliver: Yes. So as we talked about, we did lose some momentum because of the cyber incident. And so when you look at the sales conversion cycle, it did lengthen in the first quarter by about a week, a little bit better than a week. And so when you look at our pipeline, it continues to expand and does support the acceleration of orders in Q2 and through the remainder of the year, in line with what we were projecting prior to having the impact that we had. So we’re very confident that with the pipeline, with the generation — pipeline generation and then our ability to be able to convert with the cycle times we convert with, we’re back to where we were. And then that also being combined with our success in services and being able to continue to build strong pipelines for services, convert to PSAs, building backlog, and then ultimately, supporting our ability to get services, deliver high single-digit services for the year.
Andrew Kaplowitz: Thanks for that George. And this question might be for Marc. I know you ran Building Solutions in EMEALA at least for a little while. So obviously, those margins have continued to be challenging. Can you give us more color into what is holding down that segment, projects ending there, and maybe better margin going forward? And then talk about the changes you began to institute and when they might have more impact on that segment?
Marc Vandiepenbeeck: Oh, great question. So right away, when I took the role last year, we started to work on implementing our enterprise field operating model. That’s very similar to what we did in North America a few years ago. Johnson Controls operates in markets that are very sizable and complex, but that provides ample opportunity for us to grow. But when you face large market, it’s important to remain focused and disciplined on the sub-segments of that markets that provide the right level of product capabilities, leverage our engineering talent, and our solutions. And we are looking for those sub-segments of the market that provide the most value for both our customers and the company. As we continue to simplify, standardize, and I would say rationalize that business, the operating model becomes easier to adopt in the field, in the regions, and the benefits of that model get amplified.
We get a lot of leverage. And that’s really what we’ve been focused on over the last six to eight months. There’s still work to be done, but I see great improvement in our book margin. And as we start seeing the benefit of that model and the actions we’ve taken, so I’m very confident that EMEALA will return to a comparable profit level that the other field segment are seeing.
Andrew Kaplowitz: Appreciate the color guys.
Operator: And our next question today comes from Julian Mitchell with Barclays. Please go ahead.
Julian Mitchell: Hi, good morning. And thanks, Olivier, and congrats to Marc. Maybe just on Slide 9, the guidance for the sort of existing portfolio. So you’re looking at sort of 4% organic sales growth, let’s say, for the year. So the second half is implied, up 8%. How should we think about that plus 8%, splitting between Global Products and then Building Solutions? And just trying to confirm, does that second half growth guide of plus 8% include growth in both U.S. Resi HVAC and also China Building Solutions?
Marc Vandiepenbeeck: Yes. So thank you. So as you look at the breakdown between our Business Solutions segments and Global Products, we see a recovery in growth in Asia Pac in the second half of the year. So that will turn positive. And as we continue to see the other segment, BS&A in North America and EMEALA continuing to clog at mid-single digit, you can see the balance of those two offsetting and getting very strong single digits all the way to almost double-digit in the second half of the year. That support the growth you’re seeing on the slide. When it comes to Global Products, we continue to see an improvement in orders. As we said, we believe that Q2 is really the bottoming out and the stabilization of that business, and we see quite good momentum in the recovery into Q3 and accelerating into Q4, supporting that number you see on the slide.
Julian Mitchell: Got it. So both GP and Building Solutions grow at a similar rate in the second half to each other?
Marc Vandiepenbeeck: That’s right.
Julian Mitchell: Thanks. And then just a second question. I understand you can’t talk too much about the portfolio. So maybe thinking about some other items. Just wanted to, Marc, on the perspectives on sort of receivables factoring from here and what the approach will be in terms of does that factoring get unwound now because lead times are going back to normal? And pillar two has come in, so should we think about the medium-term tax rate moving up to the high teens? Thank you.
Marc Vandiepenbeeck: Yes. So starting on that last question on tax rate. Obviously, there are some headwinds there with the good changes in the rate. We are continually assessing it, and we’ll continue to look at it. But you’re right, there is a headwind longer-term on the rate. When it comes to factoring, we always look at different methods to finance the company. And as you said, when lead times got difficult, when inventory were a little bit more elevated than traditionally, factory became a logical avenue. We will continue to review the most economical ways to finance the company. We’ll make sure that we take appropriate action against that program to align it with the financial commitment we’ve made to you, both in terms of profitability and free cash flow conversion.
Operator: Thank you. And our next question today comes from Gautam Khanna with TD Cowen. Please go ahead.
Gautam Khanna: Hey, good morning guys.
George R. Oliver: Good morning.
Gautam Khanna: I was wondering if you could comment on pricing in the various verticals. What you’re seeing with respect to pricing power? And then I had a follow-up.
Marc Vandiepenbeeck: Yes. As part of that simplification of our business model, one benefit that comes in, we have more clarity on our cost accumulation and our ability to drive price, focusing the businesses, particularly of Business Solutions segments towards better vertical and better product lines and solution. We are able to drive more price to the market than we have been historically, chasing less the segments of the market where competitiveness but also value is hard to sell to the end customer. So as part of our Building Solutions operating system, you can see a great improvement, both on the price we can command in the market but also the price realization we see in our backlog and our executed margin. When it comes to Global Products, we’ve always tried to shy away from the more commoditized part of the market.
