Sara Zawoyski: No. So one of the things we commented on is if you look at the quarters, how we progressed with enclosures, that was our segment that had the most challenges in terms of demand and supply chain inefficiencies. And so, it was very — whether it was labor shortages, whether it was freight, et cetera. So to some extent, we had some inefficiencies, we improve that towards the backhand — back end of the year and some ketchup on price cost. We would expect to return to the more normal margin profile that we’ve shown over the last several years. And so, we don’t expect that margin to be at that level going into Q1.
Unidentified Analyst: Right. Thank you.
Operator: Thank you. And the next question is from Joe Ritchie with Goldman Sachs. Please go ahead.
Joe Ritchie: Thank you. Good morning, everyone.
Beth Wozniak: Good morning.
Joe Ritchie: So, I’ll ask hopefully, the last pricing question. And I’m just going to take a little different — a little bit of a different angle here. So you did over $300 million in pricing in 2022. There’s got to be some good carryover pricing that comes into 2023. And it also kind of sounds like, because you believe the backdrop is going to be inflationary, there is some likelihood that you’ll put additional pricing increases through. So can you maybe just comment on the carryover pricing and whether you plan to put additional pricing through in 2023?
Beth Wozniak: Yes. As we said in our prepared remarks there, Joe, I mean, that three points of price, that’s part of that 4% to 6%, organic growth, much of that is really carryover, as well as things that are already announced. And that’s reflective of the inflationary environment that we see today. But as the year progresses, we’re going to continue to manage that price cost equation as we’ve done in years past.
Joe Ritchie: Okay, great. That’s super helpful. And then just thinking through the volumes, right, your demand backdrop still sounds like it’s very good. Most of our companies have yet to see very much money from the infrastructure bill. And yet, you’re calling for volumes to be, maybe up low single-digits. So help me square that. And then if you could provide any color on whether you’re starting to see any benefit from the infrastructure bill, that’d be helpful?
Beth Wozniak: I think there still remains a lot of macro uncertainty, right. And so, that’s reflected in how we put our guide together. When it comes to both the infrastructure bill and the inflation reduction act, most of the infrastructure bill, some of that funding, it’s very — it’s moving through the states, and it’s allocated for roads and bridges and transportation and water and broadband and ports and airports, as you know. And we look at all that and say, okay, here’s where our enclosures are EFS business where we’re positioned, where we could expect to see some growth. But I think that in particular is going to be more towards the back half and it’ll be multi-years as we see those investments flow. Maybe could be a point for EFS and enclosures as we start to see those funds flow.
When it comes to the it’s the Inflation Reduction Act, some of that is going to start to drive demand in areas where we have like renewables and solar and some areas where we’re working on e-mobility. But I think more — that’s more to come and towards the back half of this year as we currently see it.
Joe Ritchie: Okay. Thank you.
Operator: And the next question is from Julian Mitchell from Barclays. Please go ahead.
Julian Mitchell: Hi, good morning.
Beth Wozniak: Good morning.
Julian Mitchell: Just — good morning. Just wanted to look at the operating margins a little bit more. So I think you’ve guided those may be up about sort of 50, 60 bps for the year. Just wanted to check that that’s roughly the right range. And then trying to understand sort of on a segment basis, how are we thinking about that? Just after the fourth quarter, you had very different sort of year-on-year margins by segment. Are we seeing a bigger increase, maybe in thermal and then enclosures is more flattish. Any color around that, please?
Sara Zawoyski: Yes. I would start by saying kind of that ballpark, margin, if you kind of just back into that from a segment income perspective, it’s in the ballpark, Julian. And then from a color perspective by segment, I would say a couple things. First, we’re confident in the year that next year is going to be or this year, right 2023 is going to be another year of margin expansion. Yes, that’s going to come from the contribution from volume, but also positive price cost productivity. We also expect margin year-over-year performance to be stronger than the first half versus the second half. And that’s really twofold. It’s one just given, our comparisons of a year ago. We’re lapping here in the first set half, some of that negative productivity and just high cost to serve, right, from a supply chain perspective.
But also, we’re carrying forward, as you saw in Q4, some stronger price cost. So, if you look at that from a segment perspective, we continue to expect really the largest expansion from enclosures, building off of that 17% ROS that they exited the year with in 2022. So again, expecting that price cost to benefit enclosures here in Q1 in the first half, and continue to expect to see gradual improvement from a productivity standpoint. I would also say that we expect to see margin expansion, both in enclosures and thermal management, just left so. I mean, EFS has had tremendous margin expansion over the last four years, we said, right? And then with thermal management, still expect margin expansion just a bit more modest given some of the mix pressures as projects really come back on board here and grow strongly.
Julian Mitchell: Thanks very much, Sara. And just trying to looking at, say, slide seven. So you’ve got that very helpful segment income bridge on the lower left. And just to focus on the sort of price and net productivity buckets for a second, when we’re thinking about 2023. You’ve got a sort of a $40 million odd spread between price versus net productivity in 2022. Just trying to understand sort of how do we think about that in 2023 in light of your comments around kind of productivity becoming a tailwind, but maybe the price cost spread narrows as we go through the year and investments, I don’t think you called out yet?
