So it’s about balance in new equipment. But it’s a growing service and long story.
Operator: [Operator Instructions] Your next question comes from the line of Julian Mitchell from Barclays.
Julian Mitchell: I just wanted to clarify perhaps on the new equipment outlook. You’ve got the Slide 9, I think, the market down in every region and globally for the year. How are you thinking about the backlog trending sort of as we move through the year? Because I guess, last year, you had the backlog up new equipment, even with the orders down. So you had a sort of a book-to-bill, I guess, over 1x in ’23 in new equipment. So just trying to understand in 2024, how are we thinking about the sort of backlog progression there and the implied book-to-bill?
Judy Marks: Yes. So the backlog itself, Julian, is obviously, we’re going in with 2%. We really couldn’t be more pleased with how especially Americas and EMEA really drove strong new equipment orders in the fourth quarter. Americas was up 6%, EMEA was up 11%. So everyone is going in with backlog strength with the exception of China backlog is down mid-single-digits as we go into to ’24. But it’s that strong backlog that’s giving us that line of sight in the majority of our regions that gives us the confidence that we can — between that and new equipment share gain of 50 basis points that we’re going to sustain that gives us the confidence. Anurag, I’ll let you take them through kind of how the year transpires.
Anurag Maheshwari: Yes. Thanks, Judy. Yes. So as you said, Julian, our book-to-bill was more than 1x in ‘23. We expect that to be similar in ’24 because orders are quite higher than our new equipment revenue. So as we go through the course of the year, we do expect to finish even if we perform in line with our market outlook and don’t even increase share, we should end the year at a backlog flattish to be slightly higher. Clearly, the comps are tough for us in the first quarter in terms of new equipment orders, but then they get easier for us in the second and third quarter. So you will see a little bit of generation quarter-by-quarter, but we are confident that given this market outlook, if it stays the way we should remain in the year with a flattish or slightly higher backlog.
Julian Mitchell: And then maybe just 1 for Judy on particularly sort of North America and EMEA, how you’re seeing that market right now in terms of sort of verticals and how customers are behaving in new equipment? Are you seeing particular weakness in office versus multifamily? Are you seeing projects being delayed or it sort of existing projects are going ahead on plan and it’s the new projects that maybe it’s just taking longer for customers to sign-off. Any sort of color on that North America and Europe, please?
Judy Marks: Sure, Julien. Let me start with North America. And as I said, our team is out there and it goes back to these long-term customer relationships that really enable the orders book to be up in the backlog to be up. But for context, the new equipment market segment in units in North America finished last year, the lowest since the GFC. And yet, we still we gain share, we delivered and we increased pricing. So our team is performing very well there. When we look at the segments themselves, none of the segments are strong in North America. Multifamily is the weakest due to several years of outpaced growth. If I had to rank order them, infrastructure is the best, and we’ve had really good success with major projects. We’re going to continue to grow there.
But all of the segments — none of them are strong in North America. And so this is going to be a year where the benefit to Otis and why we’re going to be successful is we invested in the low-rise market. We introduced our Gen3 Core product and 80% of the North American market is 2 to 6 stories. And that market, we’re still seeing active bids. We’ve seen a great pipeline for Gen3 Core and that gives us the encouragement between the backlog and the orders we’re seeing to know that we can — it’s a mid-single-digit backlog in North America. So — and that gives us a good 12, 18 plus months line of sight for next year’s revenue. In Europe, South Europe remains strong, led by Spain, we’re seeing sustained activity. Central Northern Europe is weak.
And again, there, infrastructure tends to lead residential is a little better in Europe than it is in North America by far. But again, we — what we see on the ground, whether it’s the German economy or any of the other locations is looks to us like ’24 looks like ’23 in terms of the segments in Europe.
Operator: Your next question comes from the line of Miguel Borrega from BNP Paribas Exane.
Miguel Borrega: The first one, just on China, the market — the competitive environment in China. Obviously, as I said, the market remains weak. But do you sense increased pricing pressure over the last quarter or so, one of your peers reported strong market share gains in Q4. So just wanted to get your views on anything incremental to what we’ve seen so far?
