Paul Clegg: Yeah. That’s fair. Yeah. We’ve historically said that while cooling and heating or similar margin, the electrical heating side is at a higher margin than hydraulic side. That’s right.
Steve Ferazani: Thanks. On Ingenia, Paul, you often like to talk about the types of multiples you pay pre-synergy and post-synergy and a lot of your success has been not overpaying. This looked like a really, really good acquisition we’ll look into it and what they’re doing technology wise. Can you give us any sense of them though what you paid versus your historic 13, 14 acquisitions?
Paul Clegg: So we’ve been historically we’ve talked about our average being just a little under 11 times and that includes ranges from about eight to 12. I wouldn’t say it’s changed all that and it really hasn’t changed as a result of that. Some are very, very similar in terms of the average.
Steve Ferazani: Okay. And any extension of this technology given its — given the use of robotics and less labor-intensive and the precision of it and the extension of this technology to some of your other some cooling businesses.
Gene Lowe: And there could be in particular, our package business the level of sophistication that they have in there. Software solution is incredibly impressive and there could be very much applications of that in our packaged cooling business, which has a very similar type of a build material, bill lasers, punches so forth. So I think that very much could be I also think if you have a better solution, and you really only playing in a portion of the market. Now the key question is can you play in more the market? We actually think that’s rather as I mentioned earlier another potential synergy and we have very good coverage across North America may have happened in that scenario that we think we can help them accelerate as well.
Steve Ferazani: Excellent. Great. Thanks everyone.
Paul Clegg: Thanks, Steve.
Operator: Please standby for our next question. Our next question comes from the line of Walter Liptak with Seaport Research. Your line is open.
Walter Liptak: Hi. Thanks, and congratulations on a great year. So I wanted to ask a couple of follow-ons. One on HVAC and the 390 basis points of margin improvement looks great. I wonder if you could help us understand what’s going on there with automation and that your go to market strategy whenever to try to improve the margins?
Mark Carano: Yeah. I think Walt, I’ll start when you look at that increase in Q4 knowing what we’re forecasting into our guidance for 2024. And a lot of this is being driven by two elements the majority of it is and just the operational improvements that we’ve made in that business. But I kind of referenced this earlier in the call that, but the substantial investment that we’ve made from a capital perspective to improve the quality of the equipment in there to automate to reduce labor content on it. All of those elements have helped drive throughput in the property HVAC platform and particularly on the crewing side. In addition, I think you know certainly those last two acquisitions that are impacting 2023 and then Ingenia in 2020 for all three our operate at higher margins than the segment has traditionally operated at.
So you’re getting kind of a benefit from both. We haven’t really quantified that with numbers, but I would say probably two thirds of it is really coming from the operating side with the balance from accretion in the quality of the businesses that we’ve acquired.
Walter Liptak: Okay. Now that you’re at this nice level of margins. It sounds like you’ll keep pushing those margins higher. What do you think the operating leverage the incremental margins will be in HVAC with some revenue growth?
Paul Clegg: So whilst historically we look for incrementals that in the 30s in HVAC what we will say is that if you do some math around our 2024 guidance you’re going to see that there’s a little bit of P&L investment baked in there to support some of our growth initiatives.
Walter Liptak: Okay. Great. And then just thinking about some of the good things that HVAC has done could you and core — is it possible to incorporate some of those things into DNM to improve their profitability?
Gene Lowe: Yes, Juan I we actually feel very good about the path of the [indiscernible]. We have had very strong success at HVAC. And one of the things you’re going to see at our Investor Day next month we’re going to go a lot deeper and the strategy and the value creation model that both HVAC and D&M. And you’re actually going to hear it from Sean McClanahan over HVAC and jobs on over detection and management. Actually feel really good about the things we’re doing and I do feel like we’re going to be on a good path there. So I think we’re going to get a lot more detail. And I do believe we’ll get back to where we’ve been historically in Detection & Measurement. We are a lot larger. Some of the businesses had a little bit different margin profiles go to a really good about where we go.
Walter Liptak: Okay. All right. Sounds great. And then just thinking about the D&M. business and just the flattening in the of the run rate business why did that I mean you may have said it I just didn’t pick it up. Why did that business flatten out?
Mark Carano: Well I mean really we relative to our expectations I think we saw more softness outside the US than we had originally expected. As I mentioned earlier it was primarily in Europe but you know Europe. But as you know some of those economies are weaker than we’re seeing in the US. US platform has been resilient. So we feel good about that and the demand drivers behind that.
Walter Liptak: Okay, great. Okay. And then maybe a last one for me is the working capital this year looked like good. If you think about the core business can you get more working capital in 2024 a cash inflow I mean from the working capital?
