Sundaram Nagarajan: Yeah. If you think about China itself, right, a majority of our electronic businesses — if you look at our electronic business divisions, more than 75% of their revenues is in Asia, right? And significant part of that is in China. So if you think about our China, Asia Pac impact, what you find is the majority of the China impact is due to electronics. And so, that is more cyclical and we fully expect that it follows the cyclicality. What we — what we do see is our major global customers. So if you think about our China exposure, our China exposure is following large international global customers to China. And we do have some mid-tier Chinese customers that we serve, but across the segments, mostly it is global customers.
What we find with most of our global customers, there is some amount of rebalancing of supply chain going on, but we don’t see anybody making significant moves out of China. It seems from our work with our customers in other regions, be it in North America or be it in Europe or in other parts of Asia, we do see customers building, let’s say, additional capacity or new capacity in different regions other than China. So that’s why you begin to see in our regional numbers a nice growth in Americas and a nice growth in Europe and a decline in Asia Pac. Asia Pac, in some ways, a big part of it is China. Japan in general is doing really well for us. It’s a smaller business, but it is doing well. So, from what we can see, the majority of the decline that we see today is cyclical related to electronics.
We do see some large system misses which are and could be up and down given in any quarter. So, we don’t see anything structurally changing, but we do see investments happening in other places, if that makes sense.
Allison Poliniak: It does. That was helpful, thanks. And then, backlog is still relatively strong. There’s been a lot of supply chain rebalancing this year. Do you feel like a lot of that’s out of the backlog at this point and it’s really just sort of backlog growth as we look forward or projects being pushed out? Just any color on that backlog number would be great.
Sundaram Nagarajan: Yeah. I’ll give you some color and Joe can help me with some additional detail, but the way to think about is our backlog is so historically high. And that historically high backlog is driven by couple of system businesses and our medical interventional business, where we get longer-term orders, which kind of go into our backlog, right? So if you think about majority, about 60%, 70% of our business, we fundamentally believe our backlogs have normalized to the pre-pandemic levels. So, you can think about supply chain normalizing in 60%, 70% of the businesses, these elevated targets mainly related to large system businesses, be it our polymer processing business or our ICS business and our medical IS business, which is sort of our — where customers give us blanket orders. Joe, would you add anything more to that?
Joseph Kelley: No. I would just — I would be just repeating what you said. I mean if you think about our backlog worth of $1 billion, it used to be balanced across all the divisions. It has migrated over the last, I would tell you six months, maybe nine months and today, it’s disproportionately heavy weighted — heavily weighted on the large systems businesses and medical IS where the remaining, which is the majority of our business has normalized to historical levels.
Allison Poliniak: Great. Thank you.
Operator: Your next question comes from the line of Matt Summerville of DA Davidson. Your line is open.
Matt Summerville: Yeah, thanks. Couple of questions. If we kind of think about fiscal ’24 at a high level with the electronics piece seemingly turning in the second half, does that — is that going to line up or coincide with a continued strength in T&I, or is there a little bit of give and take here? And I basically has the same question for the medical side of the business. As biopharma begins to reaccelerate, does medical interventional begin to rollover or decelerate? And I guess at the end of the day, I’m trying to conclude whether or not we can see a thinking, if you will, of organic growth between all four of those different pieces of the business, such that we see pretty good things out of Nordson towards the latter part of next year.
Sundaram Nagarajan: Yeah. So let me — I’ll give you some color around the end markets and what our expectations are, and Joe, maybe you could add some numbers next to with — to the extent that we can. So first of all, we’re not giving guidance for ’24 yet. So that’s the perspective I’d give you, but in terms of end-market color, Matt, that’s a really good question. Our expectations in — let me start with electronics. My expectations are that our electronic cycle sort of rebounds calendar 2024 — middle of calendar 2024. And at that time, our expectation is that you’re going to see growth both in T&I and EPS. All along, we’ve talked about T&I yielding the amplitude of the cycles. That’s really what T&I is doing for us. It is not — it is not like T&I is not cyclical, it’s just the cycle amplitude.
It’s smaller in T&I when compared to EPS, based on the business, as we — based on the customers and the end applications we serve. So clearly, ATS, from a historical perspective, is muted, but as it comes back, you’re going to see EPS bounce back nicely like the traditional way we’ve done. But T&I will benefit from this as well. So it is not — T&I is not going to benefit. So that is the electronic piece of it. If you think about our biopharma and medical, what you’re going to find is medical has some very strong double-digit growth here for the last couple of quarters, mainly because as you’re coming off of backlog and as you have elective surgery all getting back to normal. What you find is this pretty big uptick in demand for medical interventional compartments.
