And it’ll be similar to a little less than what it was in fiscal 2022. But all in progressing nicely with the focus we’re having on productivity there.
Andy Kaplowitz: Thanks, Nick.
Operator: Our next question comes from Josh Pokrzywinski from Morgan Stanley. Please go ahead. Your line is open.
Josh Pokrzywinski: Hi, good morning all.
Blake Moret: Hey Josh.
Nick Gangestad: Hey Josh.
Josh Pokrzywinski: Blake, so just on the order normalization and customers, including some of the OEMs adapting to shorter lead times. I sort of get that that’s kind of a – maybe a bit of a one-time accordion squeeze as those folks don’t need to go out the same length of time or even pull that in. Any sense of sizing what that is? What that impact might be on that implied second half order outlook? Just trying to distinguish between the supply chain and sort of the back end of that phenomenon versus maybe what run rate orders might be?
Blake Moret: Yes. I mean giving a little bit more color on how this plays out, during the most constrained period of component shortages, we saw some OEMs that were placing orders for a year or more of their equipment demand, where in normal times when lead times were at, let’s say normal for the products that they put in their equipment, that might be only three or four months of demand. Now, that’s not across the board, but we did see cases of those larger orders. As the lead times have recovered actually a little bit faster than we expected over the last quarter or so and as we expect them to continue to improve, then we see OEMs no longer needing to place such long orders. And as they focus, as I said, on flushing some of the inventory and WIP that they have in their operations, importantly, their front log remains strong.
And as I visited machine builders and my staff has visited machine builders over the last couple of months that’s a consistent message that their demand remains strong. It’s just they don’t need to place such a large block of orders. Now, I want to put this in perspective. OEMs are in the neighborhood of a third of our business. So we don’t see the same patterns or need for those large orders at users, but that is an effect that’s impacted our machine builders. And in a little bit of a similar timeframe with our distributors, their inventories will relieve as they get those last constrained items over the next couple of months and are able to shift their committed inventory that’s inventory that’s already been committed to specific end user projects.
Josh Pokrzywinski: Got it. That’s helpful. And then maybe for a follow-up, just want to take a step back. I mean, there’s a lot of – there are a lot of elements of the business now where you can sort of see this before and after in terms of investment. We talk a lot about nearshoring, energy transition, you see process orders looking strong on that. But I can’t help notice that 30% of the business is food and bev and consumer packaged goods, where I don’t know if it’s quite as obvious that we’re seeing nearshoring or some fundamental breakout. I know you called out a bigger food and bev win. But maybe just talk about how that piece of the business has seen a secular shift or perhaps hasn’t? If you want to put backlog in context or anything else that would be helpful.
Blake Moret: Sure. So you’re right. I mean that as part of our Hybrid Industry segment is the single largest segment of our end market demand. And what we’re seeing in food and beverage and home and personal care is an increased focus on efficiency and resilience. So even though we don’t see the same amount of greenfield investment that we do say with electric vehicles or batteries, those big food and beverage companies are investing in their resilience. So they’re adding some measure of redundancy. They’re investing heavily in OT cybersecurity, which is one of our very fastest growing businesses and meaningful multimillion dollar orders. They’re also dealing with workforce shortages. So we’re all aware that unemployment remains very low.
