So factory automation is a big investment for us. We continue into 2024. Digital, think about digital services, digital controls. Dave just talked about the Nuvolo acquisition we’re very excited about as we continued investment there. Expanding digital twin opportunities. I can keep running down the list, but I’ll end with sales and service investments. We really see that over now six years, driving high single-digit CAGR and services growth. We really like making investments in that space as well. It’s about a third of our overall enterprise revenues. So the fact that we want to get started earlier in the year with those investments means that the payback will come sooner from that earlier start. So those are some of the reasons. But the guide is 25% plus.
We want to make sure we’re always relentlessly investing, and frankly, we don’t want anyone to catch up to where our investments are today.
Dave Regnery: Yes, it’s a great question. We really like the model we have today with 25% plus. It gives us a lot of optionality, and as a CEO, you look at our results, right? And you look at the top-line, you say, okay, we’re going to have 9% growth for the year. I’m not sure that’s going to be top quartile. We believe it will be. We’ll see when everyone else reports. I look at the bottom line and I look at EPS growth of 23%. Pretty confident that’ll be top quartile. And by the way, that’s the third consecutive year that we’ve had 20% or greater EPS growth. And then I look at the quality of our earnings, Julian, and I’ll use free cash flow as a proxy to determine that. And over a three-year period, free cash flow of 100%.
So, we’re very happy with the model. And you take that and you wrap it around our culture, which is uplifting and a can do culture that we have at train technologies. We’re very excited about the future, and we’re very happy with our performance in the past. But I always tell people our brightest days are still in front of us. So expect more investment, expect more growth, and expect us to continue to innovate for the industry.
Julian Mitchell: That makes a lot of sense. I just had one tiny follow up on the sales outlook, Dave. Transport down single digits. Any big divergence? First half versus second half in terms of the year-on-year there? Or right now, it looks pretty sort of steady down through the year.
Dave Regnery: No, I think the first half will be tougher than the second half. Okay. A lot of that has to do with the comps. As I said in our prepared remarks. Think of the America’s weighted average will be down in the 10%. We’ll do better than that. We’ll outperform. EMEA is a little bit down low single digits. We’ll do better than that as well. Look, our Thermo King business, it’s a great fact – actually, after right up to this meeting, I’m going to be joining the Thermo King dealer network in the Americas. And it’s a great business. We have such a great dealer network there. We’ve been through these slight downturns before. This will snap back. If you look at what axe projecting right now, it’s down in 2024, a quick snap back into 2025, and then they have growth through 2028.
And we’re very optimistic with a lot of the innovation that we’ve already launched and what’s coming, that this is a great business not only today, but well into the future.
Julian Mitchell: Great. Thank you.
Dave Regnery: Thanks, Julian.
Operator: Our next question comes from Chris Snyder from UBS. Please go ahead. Your line is open.
Chris Snyder: Thank you. I wanted to ask about orders. The back half of the year, orders have been incredibly strong and have really bifurcated when compared to any sort of industry benchmark we look at or peers. Is there anything specific that’s driving that pickup in orders that we’ve seen over the last six months and anything you would comment on data center, because it feels like a lot of the ramp we’ve seen has kind of lined up with a lot of the investment that we’re seeing in data center and AI specifically? Thank you.
Dave Regnery: Yes, Chris, great question. And our team has just executed at a very high level. I’ll start with that. And you think about it, with the direct sales force, we’re able to really pivot to where the opportunity is. And we track, I’ll use the Americas here, but we track 14 different verticals and there are some verticals that are very strong right now. Data centers you just spoke about also in the high tech, think of the semiconductor space. Education is another, healthcare is another, very strong verticals. We’re able to capture those opportunities with our direct sales force, very technical sales force, and be able to really meet or exceed, in many cases exceed our customers’ expectations. So very happy with what we’ve seen from an order growth standpoint in the Americas, very help and very happy as well as in Europe, that team has continued to perform very well.
And in Asia, I know there’s a lot of, we’ve heard a lot on the different calls that have already occurred where people were talking about being down in Asia. Well, our business in Asia, with the leadership team we have there, we’re doing very well in Asia. And our revenue growth in Asia last year was 10%. By the way, that’s on a two-year stack that’s 20%. So the team performs very well there. And I’d be – also, the service business that we have, I could not be prouder of what our service business really on a global basis has been able to do. In 2023, our service business was up in the teens on a compound annual growth rate over the last six years; our service business has been up in the high, high single digits. As our installed base continues to increase in the applied space, you could see that tailwind really happening within service.
