Margin Expansion Trajectory
Q: How should we think about margin expansion trajectory during the year? Which segment will see the most margin expansion?
A: Management expects continued Return on Sales (ROS) expansion, aiming for approximately 150 basis points of ROS expansion for the full year. - Significant expansion will occur in Q2, their largest quarter, and will also play out well in Q3 and Q4. -

Sales Growth Outlook
Q: How do you see the rate of improvement in year-on-year sales through the year?
A: They expect growth to return in Q2, historically their largest quarter, and continue growing in Q3 and Q4. - Each quarter should improve sequentially, moving from a decline in Q1 to growth across all three segments. -

Transformation Initiatives Savings
Q: Can you discuss the savings realization from transformation initiatives over the next few years?
A: They achieved $29 million in transformation savings in both Q3 and Q4 of 2023, and anticipate approximately $75 million in net savings in 2024. - Similar savings are expected over the next couple of years, supporting margin expansion. -

Capital Allocation and Share Repurchase
Q: What factors will drive the decision on share repurchases, and what's the optimal leverage for repurchases?
A: They plan to resume share buybacks to offset dilution, potentially starting later in the year. - Current debt-to-EBITDA is considered prudent, and focus remains on debt reduction given interest rates. -

Pool Business Outlook and Inventory
Q: How much visibility do you have on the 7% growth in Pool, and can you discuss early buy activity?
A: The $120 million year-over-year inventory reduction suggests price and volume are down. - They expect new pool builds to decline modestly and are cautious about remodel pools and discretionary purchases due to interest rates. -

Manitowoc Ice Business Growth Expectations
Q: Can you quantify the tailwind from Manitowoc's backlog in 2023 and expectations for growth in 2024?
A: After a 23% increase in 2023, they expect Manitowoc Ice to take a breather, down mid-single digits in 2024. - Historically, the business grows mid-single digits and should return to that trajectory post-2024. -

Price, Inflation, and Productivity Assumptions
Q: Can you help understand what's embedded in the 2024 guide around inflation and productivity?
A: They anticipate that price will offset inflation, with roughly 2 points of price offsetting inflation. - Transformation initiatives are expected to contribute $75 million in savings, driving 150 basis points of ROS expansion. -

Residential Water Solutions Outlook
Q: Any context on the Residential Water Solutions business?
A: They expect the business to be slightly down but nearing flat. - Easier comps in North America may lead to growth, but uncertainties in Europe and China and interest rates impact outlook. -

Pricing Across Segments
Q: Do any of the three segments benefit more or less from the 2% net price increase, and are the increases already implemented?
A: Pricing expectations do not vary greatly across segments. - All pricing increases are announced and implemented at this stage. -

Productivity Investments and Projections
Q: Can you quantify how much investments you're making in productivity, and is there conservatism in your projections?
A: They are reinvesting $10 million to $20 million into areas like sales, marketing, and digitization. - They have a funnel that could realize more but are balancing expectations given interest rate uncertainties. -

Early Buy Activity and Break Fix Market
Q: Do you have more early buy to go in Q1, and how are you thinking about the break fix market?
A: Early buys returned to normal levels in Q4 and are spread between Q4 and Q1. - They have a cautious outlook on the break fix market due to potential consumer discretion influenced by interest rates. -

$75 Million Transformation Savings Breakdown
Q: How does the $75 million of transformation planned for this year distribute across segments, and is it primarily from Wave 1 measures?
A: Savings primarily come from Wave 1 on sourcing, including electronics, motors, packaging, and logistics. - Benefits from Wave 2, pricing excellence, and operations will also start to be realized. -

Flow Segment Industrial and Commercial Outlook
Q: What are you seeing in Flow's industrial CapEx-exposed and commercial businesses?
A: They have steady order rates and deliveries in industrial, helping customers turn waste into value. - Continued investment in infrastructure benefits their commercial pump business. -

Rebranding of Industrial Flow Technologies
Q: Is there anything to read into the renaming of Industrial Flow Technologies to Flow? Are you still the natural owner of this business?
A: The renaming to Flow is a branding exercise for simplicity. - They believe the business naturally fits their portfolio and is essential for cross-pollination of technology. -

Clarification on Price and Volume Expectations
Q: Clarify your expectation that volume and price will be down.
A: Net price will have a benefit consistent with prior contributions, but volume will offset that due to market challenges. -

Price/Cost Dynamics in Q4
Q: What happened with the fourth quarter price-cost on the order side, and does that reverse going forward?
A: Price in Q4 reflects some early buy, so it's not a significant contribution. - They expect price to offset cost as they head into 2024. -

Manitowoc Ice Growth Drivers
Q: Can you break down the growth drivers in Manitowoc Ice, such as backlog, price, and synergies?
A: They are seeing great traction with Manitowoc and filtration through distributors and key accounts. - Synergies are being realized, contributing to growth. -