Our visibility into next year is that we see that we should have another really good year of project activity. But given the comparison, it’s still going to be down a little bit. And — but going forward, I think, it’s always better to have a long-term view on retail. We still view it as like a long-term a lower-single digit kind of growth business, but pleased to see how well it’s doing this year.
Jack Meehan: Okay. Thank you, Shawn.
Shawn Vadala: Yeah, welcome.
Operator: Our next question comes from the line of Rachel Vatnsdal with JPMorgan. Please go ahead.
Rachel Vatnsdal: Thanks. Good morning and thanks for taking my questions. So, first up, I just wanted to see if you could spend a few minutes talking about your exit rates of how the segments performed in the month of September and then so far into October and early-November here. And then you mentioned during Derik’s question four-year CAGR on the volume side is seeing some stabilization there that gives you confidence into the back-half ramp next year. So can you just talk about, are those CAGRs that you are applying referring to really about the overall 3Q CAGR or are you just looking at some of the exit rates here, given it sounds like July and August were likely a bit stronger?
Shawn Vadala: Yeah. Hey, Rachel. So maybe I’ll start with the second part of your question. So from a CAGR perspective, we’re kind of looking at what we saw in Q3 and how we’re guiding Q4. And then just kind of taking a step back and applying our own judgment as to like that looks reasonable to us as kind of a moderation or normalization rate as we kind of think about next year. And then in terms of like exiting and entering, you know, we usually don’t try to comment too much on individual months. But I would say that we certainly understood both of those numbers as we were providing guidance on the fourth quarter here. And if it helps at all, maybe, I haven’t really touched upon guidance for the fourth quarter, but I can maybe just run through that by segment just to provide a little bit more color in terms of how we’re thinking about the different parts of the business.
So we were looking at for the fourth quarter Lab being down in the 10% kind of a range. We’re looking at core industrial being down mid-single digit. Our Product Inspection being down high-single digit, but with Retail growing in the 20% kind of a range. And then from a geographic perspective, I’ve already mentioned, China being down like mid-20s. And then from a geographic perspective, the Americas being down mid-single digits, with Europe being down low-single digit.
Rachel Vatnsdal: All right. That’s helpful. And then I just wanted to press a little bit more on that first-half, second-half dynamic here. You talked about China being pretty pressured in the first-half and then starting to get optimistic about growth in the back half of the year. But I wanted to press on those types of assumptions around the Lab and Industrial businesses. How much of a meaningful step-up should we see in growth rates in both of those segments next year and then again how much of that is really driven off the easier comp dynamic versus underlying demand accelerating?
Shawn Vadala: Yeah. I mean, like I said before, I mean, I think we expect Lab for the full-year to be up slightly. And then we expect on the Industrial side, overall, it’s going to be flattish with core industrial down slightly and Product Inspection up slightly. I think, China, of course, is going to be a big part of like the seasonality next year. And so, I would expect things to be relatively down in the first half of the year and then up in the second half of the year. But, like I said earlier, we don’t have specifics to share regarding some of the other granularity of how we would arrive at that. And as we — like I said before, as we enter the year, we’ll have more visibility and can provide — help you refine models and provide more color.
Operator: Our next question comes from the line of Catherine Schulte with Baird. Please go ahead.
Catherine Schulte: Hey, guys. Thanks for the questions. Maybe first, you mentioned manufacturing customers in Americas remained cautious with spend on new equipment. I know you talked about Product Inspection being up slightly next year. But maybe talk about the outlook for that customer group in ’24, and what gets them to start being a little more constructive around spend.
Shawn Vadala: Yeah, maybe I’ll start, Catherine, and then I’ll let Patrick pick it up. So, you know, so, hey, we’ve talked a lot about food manufacturing over the last couple of years. I’d say, overall, it’s probably exceeded our expectations to a certain degree this year. But we do see a lot of pressure on that segment, kind of going into the fourth quarter and by this time we have enough visibility to say that. So, for the fourth quarter of this year, we’re seeing, you know, negative results or declines, I should say, both in the Americas, but frankly, also in Europe. That market segment has been under a lot of pressure in terms of their own cost structure. Their own challenges with inflation and you’ve seen some of the food companies closing plans, executing restructuring plans, a lot of antidotes from our team say like, like a lot of other things like, hey, there’s a lot of interest there, but they’re just not getting approved, things are getting held off to a certain degree.
But outside of the Americas and Europe, we’re also seeing actually good growth at the moment. And as we kind of enter into 2024, this is a really good example, where we have a lot of nice innovation in the portfolio coming out. We have a lot of good products in different areas of Product Inspection, like in the x-ray business, I think we talked about it in our prepared remarks. We have good stuff also coming out in metal detection as well. And in the innovation and the new products are being very, very well-received by the marketplace. We just heard some updates yesterday about some antidotes from a trade show that the guys were recently at and really good market reception of some of the new products. So, we feel good about what we’re doing what we can control and how we’re positioning.
It’s just a much more — it’s a difficult market environment, but it’s frankly been like that for a little while. It’s been a little bit up and down, but the value proposition is still there, right, like the need to help these companies with productivity. We can really help them and I think they recognize that. So I think that’s still there. And then just the focus on food safety and brand protection, you know, you see things in the news in that regard. And of course, that we certainly can help companies as they seek to address those needs as well too.
Catherine Schulte: Okay. Great. And any update on how PendoTECH is performing and your thoughts on there going forward?
Patrick Kaltenbach: I can take this. Yes. So PendoTECH again for us has been performing really well over the last years. I mean, integration went really well with PendoTECH. Of course, they are strongly dependent on the underlying biopharma market and we have seen a slowdown compared to the years before. That shouldn’t be surprise, but what we have done with PendoTECH is we expanded also the offering there. We have new parts within their portfolio. So that’s not only pressure sensors, they also have now UV monitorings — monitors, et cetera in their portfolio. So while, of course, we see lower demand compared to last year, we think the portfolio is really, really strong, and of course, by expanding it also different application wages, we are quite optimistic on PendoTECH’s future, although we are seeing negative growth here.
Operator: I would now like to turn the call over to Adam Uhlman for closing remarks.
