Ecolab (ECL) 2 May 232023 Q1 Earnings call transcript

Company Profile

Participants

Andy Hedberg	Vice President, Investor Relations
Christophe Beck	Chairman and Chief Executive Officer
Scott Kirkland	Chief Financial Officer
Tim Mulrooney	William Blair
Ashish Sabadra	RBC Capital Markets
Seth Weber	Wells Fargo
John Roberts	Credit Suisse
Josh Spector	UBS
Mike Harrison	Seaport Research Partners
Manav Patnaik	Barclays
Chris Parkinson	Mizuho
Jeff Zekauskas	JPMorgan
David Begleiter	Deutsche Bank
John McNulty	BMO Capital Markets
Shlomo Rosenbaum	Stifel
Andrew Wittmann	Baird
Ryan Connors	Northcoast Research Partners
Laurence Alexander	Jefferies
Kevin McCarthy	Vertical Research
Steve Byrne	Bank of America
Vincent Andrews	Morgan Stanley
Scott Schneeberger	Oppenheimer

Call transcript

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Operator

Greetings and welcome to the Ecolab First Quarter 2023 Earnings Release Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Andy Hedberg, Vice President, Investor Relations for Ecolab. Thank you, Mr. Hedberg.

begin. may You

Andy Hedberg

of hello, results call. and Chairman to first at slides A Ecolab’s CEO earnings with Thank and ecolab.com/investor. available release me everyone. on today conference the discussion CFO. our With Scott this Ecolab’s results, are quarter along and our quarter you, referencing Kirkland, Welcome our are Christophe and website Beck, Ecolab’s

supplemental these those results could Factors differ materials Factors XX-K a to and cause materially estimates and are and Form the recent read materials, from actual in differ results Risk which moment described in most statements teleconference in statements, state projected. to our could take materials. performance. our Please in the section that future cautionary associated poster include of forward-looking These this that the are actual

We to also information earnings in per release. diluted share supplemental refer the the you

for Christophe With call over that, to to the I’d his comments. turn Beck like

Christophe Beck

signs delivered Look, much, so would Andy you Margins team adjusted we progress. in interest. very promised. than as kept growth as Top better promised, of our shift even real have All importantly, Most some growth Thank quarter, strong. to as predicted. I remained income even improving line got and everyone. once expanded. trends encouraging stable. slightly foreign showed was and again, continued stronger real some our another EPS Volume face and to we headwinds exchange welcome offense Operating strong to

the all the with across first, XX% segments. from in in strong improved fourth quarter sales XX% to Organic performance

customers. labor while continues industries in as what safest and records new again delivering our water, quarter the business importance to the we energy first new best offer, net Our once in for serve the reached pipeline have grow we savings to and outcome in

very will strong as pricing against will also the to we We believe begin year’s acceleration. which at we be XX%, strong lap maintained peak last

respectful eROI the allowing reduce operating responsible our and to a impact. and we This true them long-term as Our cost, increases in way state manner. customers it’s progressive of value, pricing that absorb Ecolab important environmental overall usage their by approach resources natural to and the is help to backed is

versus Delivered That to began last execution, to margin This, being drive allowed our inflation but to rate of increase strong the along continued product year, said, ease. earlier modest bit expansion margin pricing expected. remain than builds cost with as us a recovery journey just has Despite done fully value. to we remains loyalty our only our over the recovering further to that we customer stubbornly continue deliver that expectation when way, begun. inflation time, more margin high, committed right gross

pressure progressing business, strong continue The leverage within repositioning us, remains very as and Life big different while sales priority segment. operating sales Sciences that least invest is They & growth and transformation. by as organic for of our to growth under institutional businesses and income stories well that we a growth strengthened, Healthcare in is at near-term margin which are two within segment. demonstrated

as actions very we capitalize In profitability. capacity capabilities Sciences, making to investments add to profitable are Life continue in and Healthcare, on growth improve we we and further take Purolite long-term in opportunities. Whereas to attractive

operating productivity. productivity the we led our in fourth from XX%, operational While strong up better technology, income of last XX% progress and digital capabilities of and to The margins investing make also we continue in growth gross year. solid long-term continued in improved SG&A to in quarter organic combination

and XX% improved Our adjusted interest. X%, from earnings per FX share headwind to includes which growth a

the wanted started In way environment. exactly and top strong the summary, despite with a challenging we year bottom momentum we line

have a on continued future, rates remain geopolitical to for high global demand foreseeable interest tensions. to Looking ahead, we anticipate impact and strong inflation the

environment. this very are the this of win new, good well news is we none that positioned Although in is to

X the grew our our we team solutions. innovative Over expertise on as and focused last developing supporting years,

retention high supply we shortages. remain Our them rates from protected as customer

our accelerated to drove income started thoughtful margin and Our as organic recover ways operating increasing while we pricing customer value. in

to are shift business, we we low by be as adjusted ensure exactly macro our indicated to growth. sequential the improvements major deliver will to second softening, accelerating quarter as earnings drive fourth this, will performance well growth driving accelerate to to the in and to plus in range with calls. as earnings With by to the our invest end continue growth offense plus now and executing X% by reaches engines that double-digits. and trends growth expect in This continuing our adjusted we XX% the in during previous we’ve the year And productivity stronger expected, extremely earnings quarter profitable

will finally, in we stewards returning of done. as invest good dividend, leverage by prepared were capital continuing of importantly, we’ve our never remain increasing business, growth I team, the our share reducing And our and with billion in cash $XXX most shareholders always high-quality brighter. the to to the believe future and capabilities to has best And this looked industry, market. our grow we science

I to questions. look your forward

Andy Hedberg

Thanks, you begin Christophe. That please concludes question-and-answer our period? formal remarks. the Operator, would

Operator

[Operator proceed you. question Blair. comes from William first Instructions] Tim with Please with your Our question. Thank Mulrooney

Tim Mulrooney

Good afternoon, Christophe.

Christophe Beck

Tim. Hi,

Tim Mulrooney

Alright.

have quarter. adjusted the I’ll for basis points the first So question, looks margin one go my XX It gross I with to like margin. expanded in year-over-year think gross

of we the expansion year-over-year Now or until see to kind expecting that third weren’t second quarter.

year? was expecting I cadence of see. of and you move you. am great are you’re But into margin for the for gross thinking what raw the expansion we So taking account remainder materials, pricing this to Thank what as curious through that

Christophe Beck

outcome you, the a the to we’ve the years. X and we expand then corner and our the I’m margins past rebuild an made, that of gross long margins pleased It’s and could operating team that’s on turn and know what Thank wanted We as we well. been done point progress obviously has where the Tim. journey. income with very reach

And a up of before, this it a basis points. to points is because the led up down, year. XX OI of than XX happen happen me. fourth said product It second the feared, the half well. And what pricing with said, the because, ultimately, the went than as pleased, delivered. XX%, would I what in did year income inflation the which of news. during cost operating thought the which we’ve It saw basis what went got because Europe. margin second margin, we well than was you had initially, good than In trigger past came not bit as We stronger go that temperature quarter happened of a improvement is first we thought the better less higher which earlier but in just QX, we the delivered didn’t quite expected. for of gross is as as as So what Volume especially

OI, we are just mission to as we there. Gross to at journey when the all all good, margin together, we high turning from really point, back keep turning is well, bring income expanding our gross which that call a good at that good So beginning margins to as but news. watermark it because margin turned are the is get it, operating of corner start and then

will as first be. quarter. It’s cost also promised going in XX%, product product is But to which exactly we’ve up had and the well. So know hard inflation we’ll in committed quarter-after-quarter been X% cost delivered keep to that We the rate depend inflation, of how ‘XX. delivered improving on of the as it’s same

And is lower XX% So see up. negative but anytime XX%, still it’s it obviously than going I turn don’t soon.

XXXX, be continuous think DPC inflation. facing we So will I for

keep working we well, that, on will with So pricing.

We will keep working volume. on

our that traditional will the per make We working we improve low keep to until income in order productivity on sure get earnings operating or committed earnings fourth as quarter-after-quarter double-digit growth in quarter. to share our

Operator

line comes proceed question. with Capital with Sabadra of your Ashish question next RBC Markets. from the Our Please

Ashish Sabadra

Thanks strong takeout are saw wondering for about on taking cost that the to I you – we initiatives, how you could productivity leverage was innovations talk I SG&A that but Thanks. quarter, leverage also questions. the better in if leverage? have SG&A my there. driving digital pretty the initiatives and the focus the wanted

Christophe Beck

a like have progress the on SG&A. lot we Thank Ashish. made you, I

made a the trend will sales And year is as come with in great whole know, ‘XX service much of our as best points well the and so as good XXX we obviously and on is can really our automate focus the basis as in implementation in have on on to the quarters our We we we where you creating and SAP. in in which transactional field the we work improved year. infrastructure of past either it. we This backbone people are customers, years progress doing are continue very they last for so our focused investments call the value that

services. mass well as SAP all are of are north company to critical we on XX% shared trying that leverage the of and We now in

it’s on on while we the side G&A well. the helping So side improve as selling

to the not every term that it’s be on probably going long obviously, I the we midway but to think And the are journey. remain So that same. going trends same quarter, are improvement,

come, to productivity. some we up have still will years the coming for of So upside out

Operator

question Seth Weber the with Our Wells from with your comes next line Fargo. of questions. Please proceed

Seth Weber

I Just merge to about this starting Hi, talk you how was commentary more you’re that surcharge, made. handling to probably pricing first in of XX% just structural the the of roll of heard just think you to pricing peak, forward? I that’s XX% whether think to we how good the mix should whether number? pricing energy wanted the can Christophe, or say you’re you off ask the coming morning. off quarter kind about going into trying I

Christophe Beck

you. I’d love Thank Seth. to,

come. a as and the XX in way value not creating so we’re the true XX for were down never of the it, years. because we part delivering is job really pricing go sure so remarkable which been business. for last we done creating our into team of change pricing, pricing. by making last that over That’s years that capturing to for value will backed pricing really customers going So was This in customers translates for the has It’s well the to the months, Ecolab

we roughly year, had we XX% I think about So price, of so in pricing ‘XX. when sort the of last had

As in right, of which QX, mentioned, is you ‘XX, well. half XX% have over in be understood you’re carried will it The that we unchanged.

the going be ‘XX. it’s to for So peak

structural well. progress so going I but there, the It’s from structural the of not for is different pricing to made we’ve energy like every most into part, surcharge surcharge could pricing, But serve. as industry way much now quite we over the increase but year-over-year. working past ease obviously merge strong will as We to with your months lap been so rate keep surcharge, the energy And to we’ve pricing in of point, we our to the having XX as under the come, will in that we bit the quarters customers all a the transfer far. that

Operator

line proceed Our next the with Credit question. with your question comes Suisse. from Please John of Roberts

John Roberts

Do you. to Thank the in Nice shrink of turn healthcare earnings? quarter. you sales around order the need business European to

Christophe Beck

John, on mean it. it how depends

company, that turning is earnings organization. it’s important but keep am I priority for for purely don’t priority, XX% the and important first Europe, overall staying So is no, focused glad This going my healthcare in am this really the on for obviously, X% overall me. I not really Ecolab I and yes, an like well of but is mind X%, that healthcare to it. in is

doing doing I take place. cost are to will see turn. when But going in have and to we action I will committed right think So the to get the to It’s first structure. ‘XX about we’ve be right-size that healthcare, the time that done, is some a

not know. is the We time, second past, during business last whole we institutional bit not as the money with where that’s focusing endoscope towards that the run infection well the to our real options to It’s same well. in dish implementing we most call song right the future. restructuring be about and we run, it And that make really business. as but are there refocused announced know and business. how how know We it going At point think we sure It’s it the as a the profitable to point are But to that’s reprocessing Ecolab instrument we and the is what which a is, going in this is prevention. focused business we where we know can order to sure going to that we of it’s more a make strengthen that We to now. last have a the plan how we’re as on with we’re well. business make in focus business making core to obviously, really machine, like talk because as that

So still work X% company. line, bottom some to the of overall again, do,

the but the it’s for of So committed work. not to overall make going the it obviously, to I’m company, earnings move needle,

Operator

the Josh with your Spector question comes line proceed Please next question. from with Our of UBS.

Josh Spector

Yes, hi, question. thanks for taking my

of thoughts volume your easier North takes, on maybe America, challenging. with walk as comp, you curious Asia, more on puts Europe guess, Just being a same thing maybe through and I an number with bit

see on just around you this X% have the comps second where of curious quarter? on that? Thanks. Do given different view your a into do So are, next minus thoughts persisting kind you half,

Christophe Beck

Thank Josh. you, Yes.

saw So on we’ve of the same trends fourth kind the negative. what was as quarter. in volume, slightly we been mentioned, It the as

than better because say, honestly, sold. peer, if bad we may Europe So less than I was

have and good, delivering. to think perspective, the Europe So a very first honestly, In were in year quarter, they’re from environment an that in like ‘XX. Margins has Europe going a how extremely been sales good. good I I were lot,

in sure If ‘XX the few time was that before, our our that important in done which a than focusing company, improve volume was you we Europe, pricing at the Well, well. just a of that’s back, the so for positive, way well as new that which good So That while team to shift on exclude not new we’ve ‘XX. lot to business. enter for news in initiated positioned wanted to good news. to point, stronger more the mentioned we’re And right even was is said, make overall that slightly really being order sales a I offense is is most the were generating if third they margins. as taking months ‘XX business very look

I’d much more. to So was but it’s good. like not not that was actually, it have It good

a Now shift generated. a at, – a properly the been are It’s that need is like we’ve I see we very new lot news. in good that’s ultimately, like our We I that where to execute when what do. best which made record it’s high well. business teams We QX, had as to

economy. whether that biting So go, sure I global don’t about. that’s be will it’s we a to going but not the obviously, accelerate to I’m of slowdown exactly pretty going know

behind way volume old-fashioned with So to with growth our as have we well. drive engines business will the investing new innovation,

on, So in the of that, in and quarter it’s come, quarter. think will the after see that And we going year. you quarters to improve the that’s half I the that to especially journey are second

Operator

of next Harrison Mike Seaport proceed comes with question question. Partners. Our the Please line your Research from with

Mike Harrison

morning. Hi, good

you compared around Sorry, good afternoon, I full The guess. Christophe, I are know ago? you about changed you are how for that concerned maybe what have ago reluctant unchanged. year to components the versus in about? you’re wording outlook more put that are months And much is What X can some that are better? today talk some confident X months numbers to pretty outlook. areas But the

Christophe Beck

afternoon. Mike and good you, Thank

the hasn’t but in of net wording My is risen level positive. which meantime, right. You’re changed, confidence the my has

productivity, start come fundamentals good control innovation, the a ‘XX, very, the pricing, these doing, on, are things strong. still our we’re of team all and obviously. think we the that hands, That’s it. year, that’s that’s like are obviously. that all well. And executing and is investments new to that quarter first can three a to What I in very It’s business, in happen that’s so face more what off can We’re lot but let’s

we keep quarter-after-quarter. so So will improving

the past in honest QX few The what delivered name rates, in in what we come. of of terms inflation, world is, terms quarters, cost And quarters debt in we in here. to like in can obviously, As because to what in we’ve in you control happens the done Europe, I’d elements. to is terms in the see long, not all on doing But be truth will it. of the want of the those ceiling, I happens terms interest understand list war of inflation in product

things getting I’ve confidence and I’m we after deliver here, that the committed second know I you’re with to more So a level going as of higher share wording, And we’re year. much to well, have better, right, but what unchanged as with as if well share will are to outlook, you seeing. will I’ll you unchanged quarter, good but

Operator

line question your Manav question. comes of proceed with the Barclays. with next from Patnaik Our Please

Manav Patnaik

get squeeze I business two follow-up just – had new today? hoping maybe of the the question initiatives new sense you can of the to just of much was But And adding Hi, gross part. comments just just I any Yes. you some made, guess? while a a talked help update a main I is was in could as you kind data if volumes, how back to have I quantify business you a about where the had on was lot that that

Christophe Beck

Manav, really understand, wanted me I sense. Help

when So data it you is Manav. initiative, what exactly like, say

Manav Patnaik

that all Chief of hired I the and the on on-site, Well, there productivity, have all broadly, a data just were. whatever done you kind collection the Technology your outcomes etcetera, think Officer you

Christophe Beck

That’s Okay. Thank you. Got helpful. it.

So two here. questions

the new exact and business numbers First, never growth. on We’ve disclosed on your business. pipeline

going So our changed to But we I’m not definitions. haven’t start now.

So it’s so comparable. really

QX in than what to better QX a in quite even compared had was quarters the we past as So and bit few well.

year-on-year obviously. that is fact a good new news, the accelerating So business is

So once new sold the business, install new have need as we business to it, for we you that Then know. generation.

people don’t and are chemistry processes all that new. nothing few true, implement the That’s sell true we for that’s to usually and a technology is So should always and to to That or takes sure going so that. install part quarters as months the a this and need working the most been working software, make that they year. few our be

business. new on team our of refocus Major pipeline. business new good very So

X was new to focused If XX% XX% you business. our pricing on and the on team think in want about past years, it

new pricing as keeping business and on XX% the finishing the XX% price other the it’s for on way and well. Now around. It’s future

So feel evolution. to volume, have well. I for an that’s that will net, our market to impact, confident have now obviously, that obviously, the we we going on quite master which But with will

the on Now part second different very your digital. of are questions

That major changed. on We’re still focusing hasn’t three pillars.

customers. one for Ecolab Cloud, our Manav, the performance since the really is largest in connecting going of generate we’re way industry, having The in the then Ecolab TRASAR XD is by performance that’s first thousands that which best so within of is on XD, is done the with way, how The really unique well. view, the site value we to across company, to the us best we’ve one past plants on it tens a giving that of and customer. can what’s what lead the very reach cloud and performance a to expand that the it

We team. on across digital for And do our focusing perspective, industry, within industries. it that people over we can with And the X,XXX in have really today. we’re just

So we a have firepower quite for bit of that.

before, second and the you focus really transactional and is sort field to pillar SG&A for really the with our our automation, it The is on well. we them that focus productivity value mentioned This automate tools is that they the not really work. providing see customers as as creating all on squeezing it can in of teams, can

progressing on it’s but We’re well. journey, early that

You can see numbers. it in the

connected industrial type is can been where component it that to are customers interesting customers real-time but can level well is last safety of in the very experience We and can sure really cloud the makes well. going delivery real know better. in have great been time the not really because saw be our increase over something delivered exactly we only for our and what our the the products customers is the that’s that right but distribution making our e-commerce customer is digital come, sure an what’s data-driven the to that expanded the being got also to plus, to delivered when only done not safety has but for because team industrial XX call being last a And project they has tank, XX still bulk ultimately it’s of months as experience, we also a all

as the good answer and on on we’re still digital our well, the that, on front So journey here. sorry for long progress but

Operator

from the comes of Parkinson Chris Mizuho. proceed with Please question next your line question. Our with

Chris Parkinson

so Great. much. you Thank

just the hearing Just your when what its, in Thank and a – the water what as think evolution at has your you understanding with still of business, it well pretty – pricing expectations right like what take new just long given this on supplemental, these of about can But back to full as here to the various year? crystal that business given gains now you’re you’re don’t for break Institutional. get under-earning comment you down what the you the have say, just And business it comment you from been of wins. seeing customers you’re Christophe, right ball, enthusiastic it’s clear seems but And for will then those how so balance on you just perhaps trend potential the along much. line? are let’s substrates,

Christophe Beck

Thank Chris. you,

as usage. largest they water do doing is and their the why and impact It well. what products, you customers single environment. our energy reduce in as basically could that. reduce been better know, reduce well, offering, see, products, what reduce carbon their quarter their well. cost in usage, we’re reduce in been need that’s we’re even they the as as they always reducing nice field new while business, really is to growing more that very has when But Volume It’s been first And invest water footprint, well business, So the more really they is usage, it’s XX%. positive doing. nicely produce more business because water has do them which the doing you on why helping the only not their as well

quarters. points. margin a started acquired the is the Gross that one really few was XX better very over we was time. that. a really ago whole, margin in promise past nice when journey, up I paying pricing industrial, the look big as a water at Nalco basis we than XX at when OI off the years So even you When And look

to sales so momentum and margin sales like that mention, interesting highlights. nice very just within I’d few improvement, momentum, a good So

high-tech power was Mining XX% Our global went plus. XX%, up was XX%. business

the So a out in team lot field. water doing that what is in of very of good things happening

Operator

Our comes question. line Jeff Pleas the next with of your JPMorgan. Zekauskas proceed question from with

Jeff Zekauskas

that I question. do of But in maybe should I expect X%. the course SG&A what XXXX. you’ll a you plan that for making, raise this no? it XXXX, a shouldn’t target bit went understand given too that Is to I price Normally your you be overall much. X% in be margin moderate or very that restructuring a year? my better. have And up Ecolab’s two-part growing sense the X% prices secondly, up high? the Thanks general rate? at that SG&A efforts you annualizing X% than of SG&A that, that you’re little greater be Isn’t to costs year. understand the quarter. prices. was a But think is more the increases go Is But

Christophe Beck

Jeff. you, Thank

bit who need in little So to SG&A. Scott not pricing, floor and that increased give in the then work years to take right. in On in as years change to well come. to I’ll you’re a overall going prices ‘XX our always let the and XX it’s history, here call plus, pricing, We’ve me during

of So be to going things are few will a combination there happen. a that

math will of carryover in XX% back be had the was not last that pricing mentioned it As Half we’re that give going to before, XXXX. year. since we

And some we pricing. on will build that incremental

question be, don’t where how pricing ‘XX, going rates average, will question, the were going part Depending then lap be Jeff, what’s on this what a X% forward. We the there in Then is and higher obviously, about in company. to sure be in the going that incremental are last is X%. than know which the think there of cycle. of So the had it’s to is to before that. year-over-year. going XX north the be to be do past going almost or as last inflationary to in years we I inflation X.X% it’s our math, the I’m is I run you but

the combine new you less the can and come. the if see both and be you going years So more carryover where pricing, for to to we’re or

a customers. because I think to the pricing, in strong has muscle that jamming developed not company pricing very we’re

we’ve to to we’re with well, to backed value before, time mentioned going and going taken customers, to As respectfully continue our will future. improve It’s really It’s be going it especially inflation to good be as in by for the good do our for our us, do going to as and easing really customers. that will the be time. since at good shareholders, be well it’s margins for and same

general So picture pricing. that’s the on

for Now SG&A.

Scott, to make few comments. So want might you a

Scott Kirkland

And We about just as to also, And we basis in SG&A Thanks, a it’s in that’s quarter. SG&A Christophe. XXX our it’s – sure. on points. ratio know, Hey, sales. the you And yes, ratio. so mentioned seasonally, top Jeff, from as a lowest of the comparing perspective ratio you SG&A, mentioned, Yes, against on sale as from the think it you continued improved by productivity down the first a a were as year year-over-year. basis where very quarter improve strong perspective, quarter leverage a last XX points

as timing just of that’s SG&A well as going drive investments spending. and So less leverage obviously, to

feel normal SG&A about that programs programs you leverage is, continue those good well we through the doing, we’re where cost productivity very So to SG&A as savings expect the that drive programs productivity mentioned. to – as

getting trajectory and feel have we margin. back on about SG&A that really So OI good we the

Operator

Our Deutsche with line next David of question. question with comes Bank. Please proceed from your Begleiter the

David Begleiter

trends your volumes? customers. you amongst in yet volumes in seeing trends actually, Thank are those we in you. And seeing why better your QX, you. some Thank Institutional, down are Christophe, your Are in Institutional?

Christophe Beck

making we’re Institutional. like in the I David, So progress

in the good. numbers, income, growth on which operating the XX% is and the beginning You’ve & this journey. of Institutional Specialty seen the XX% is But

quarter unfortunately ones that same a over example sitting few I’ve and behavior I the mentioned are people the the which take going times mentioned has the numbers bit. of If in the I’ve the restaurants, a few past changed which calls, as quite traffic, during past industry As the restaurant in means calls, improve pickup dining and And quarter. well all enough. down at ugly amazingly have sticky XX% after versus people used to And the delivered order the XXXX. food, online, it’s table do gotten the truth hoping that’s some we interestingly being that is to as would were that is that, not. Well, or

been have is And of service I the as it’s a room, are the same the for for them pleased dining at them people well. selling and staying well, day, restaurant very for really more lower thing deal in operators. or this they cost I’m think for they because at very So the good because good end customers, good less our a

had change to obviously. We

So their about first XXXX, in foot it so so if the in for in America well, XXXX, are us, room, dining of when restaurants, take XX% sales North I quarter. in XX% our this minus versus in traffic comparison up you think

we’ve gained share. market So

Our could to drive But of sure the drive teams because to that pricing, hotels share, a bit drive we all similar really curve. make get changed of quite baseline A innovation in have well that. experiencing has sort managed ahead bit. the we’re as

order order of and But an And gone versus will means is XXXX for sold guests. we’re be all services business rooms provided housekeeping in for in world bit higher, customers for room changed our natural demand down. doing. our teams sure lodging instance, do they up and what the This And have are the obviously. penetration is that we up growing for is helping perspective, we the around North things their have a for their less Our more the in make are what off services well. America prices XX%, that in This offering we to to industry, the X% as drive good has offering keep industry margins. for

a most gaining we lot well. as come. is that whole done what reducing to way that off so well, offering the are as demand own in done but that’s Ecolab guests part we’ve has Certified, an because I the is well sure as Science time, our and to restructuring order doing, as the need Institutional in has the showing which changed is share, customers which guest that satisfied at cost as safe well industry team it’s offering needs program are to make quarters the reduce in changed their pay and to a same to costs in why So, like in that offering this to announced for means Ecolab be We going well.

I to repositioning that what even we’re industry, that for in which before. I in was early itself doing team new believe is like after going But than phase it is So a whole the better journey. be

Operator

comes Please question John question. next BMO your of with from proceed Our Markets. Capital the with McNulty line

John McNulty

quarter were then the my taking my single And the spiked digits. The question mid-teens. into Sciences again, to digits. on down global Healthcare margins for they Thanks this & is up Life in single third the back And are Yes. They the question. businesses. in quarter, back

Healthcare can that what’s quarters to past just indicated I would I M&A? there guess of you side big driving how one And the you normally us core that volatility of internal the stable you’re the So really what flesh out healthcare we to in looking you bit? specific Sciences. include guess few help you little about assume guess can that to is think points self-help? the understand I up should Does we’ve is pretty that. business. the it over earlier, seen Or Life that potentially of a then a & brought strengthen I

Christophe Beck

John. question, Good

it’s both I’ve well but of this not the So Science Healthcare as doing know. & business very very Life so been businesses one, performance really I’ve on is it. One to Sciences, spoken we my commitment Ecolab the other two about view group, it’s and Life much. X And my and improve different

about volatility So while percentage variances big as dollar small base, a talking earnings a the talk in variances about when small of well. we’re unfortunately, have Healthcare, you

good of problem bad it’s kind here. have I problem, but a that it’s a still So

is As the XX% X% mentioned that Healthcare well. doing quite is before, of the company. glad I’m company of

to sure your better so mentioned the bigger So disinfection the strengthening I point, want gets years the three in the refocus business, a not things Healthcare structure, third, we by for the institutional-like core. that Healthcare come. get to before, prevention driving so cost going place our sure I and Overall, making to to is to company make on

on adding new So But new answer on expertise, keep to capability. your M&A new will piece. the we working offering, question

know you business it to the we to a where going institutional core the is. make sure that at focused how the business the on be I a want business the make what future truly have is money, closest kind that dish we understand that to to of of which machine is

in come, I more to journey, be change what see will we’re XXXX. So the will doing, will you a share you what with along of doing and but performance we

Operator

your with Shlomo comes Please question question. next with Stifel. Our proceed from Rosenbaum

Shlomo Rosenbaum

good Hi, afternoon.

Christophe Beck

afternoon. Good

Shlomo Rosenbaum

right a Institutional could operated if the It a when can from the a to pretty difference a you’re results, if not a you’re would Christophe, to see role you about that you seeing little. before, bit significant tangible from out yet seeing change? Hey, takes like results just splitting actually see and from sales services now, have the within results segment? you guys expect I’m you sure the whether while big seems any Maybe little flesh and way talk

Christophe Beck

Shlomo. you, Thank Yes.

change So remember if it’s a that we’ve in right. I XXXX, initiated

have quite It’s It’s been is future. and something it’s in that preparing the successful in business. carefully. been while It’s ago. that we business So industry changing very that large will a be a an changing a

a is performance combining that wish. thoughtful we’re taking make cycle towards while number a improving manner. need our truly it’s cycle. it customers I bit objective repositioning be that But very in sure that making was overall one. sure place So careful, in we’re want why than pre And our after pre-COVID to more might that the some time is than my that’s would This business. doing Institutional I or absolutely a better what

before, own when dining I XXXX. the traffic our and you as on XX% to in sales numbers at mentioned up look restaurant And down XX% versus mentioned with

as we’re well, hotels, gaining that margins So as that precycle is as mentioned showing on as our so the business. well, same well, before time, same in are improving At share.

is So service fact and reaching still path, reached of objectives. our we’re splitting two has or because that the on sales

before, to have really when as the at Institutional, in that gain is And second we order that we And a well. is one servicing the it’s structure best first organized cost so cost to serving mentioned service performance look because we did. have improving you our customers. in share, as have in The is and organization our to reduce

and both. cost at the get structure same the to Gain we So, of performance in end time, that reduction business. for our share better leads markets our

So, work in progress, but I like where we are going here.

Operator

line Wittmann next your question. Please comes Andrew question Our the with of proceed with Baird. from

Andrew Wittmann

the guess Thanks a about margin. taking Great. question my had for question. Christophe, I gross I

even margin to it and gross exceeding was business the weighing the I mix a margin prior guess about years, of opposite back – you That’s – over ownership, margins. You are that. with waning the gross margins days the very goes on way. targeting Purolite energy changed talked recent in eventually getting the has certainly, high business. your

you here? guess what I asking prior I kind the gross that pre-inflation is kind target margin don’t levels today’s it is, where was you understand if business hoping what I or mix of get to what and margin be I on to know am would could So, the back was of pre-COVID, that equivalent clarify of gross to

Christophe Beck

think so, I Andy.

to we sound it’s the that. once keep want income And the where So, we to of we barrier, not the what better, that. reach get reach have after said and operating clear have further our we to, That’s been quicker, is to that, first pretty that’s want XX% going margin. we that

this the over been X lost time. true. years your the inflationary past have to job So, margins that one yes, point, is That’s during always to recover

we a XX% second. a but we time As margin as was what this that it’s company. we cost only, which we it’s of higher more to ‘XX, that be, you longer and longer as because taking it way XX% time first, so had It’s as past, expand will dollars where the in back well adds get because on well deeper, lasted to ‘XX get call, in get is than there. in bit we so inflation today from know, mentioning delivered will Well, and inflation we well, to product to face used as earlier

income The second business margin COVID, and better of yes, new future. to are the company just fact life same an performing the sciences is average like that’s of above have not having Institutional Institutional the old in the operating thing thing a further. top at the margin behind saw mentioned. the as that On on business well growing time, that’s fast you portfolio, are that businesses the or – of kind well as help it, That’s going gross thing. one will third company. as hand, after the was Well, recovering our most help you of And as

to I So, innovation turn am and product overall, the life delivered hopefully sciences to new is to that not ease, to soon that but that’s but expecting anytime like businesses XXXX. improving, above always going good pricing in going cost not least, not negative work, company’s average. keep are last certainly the that’s And contribute. going Portfolio

from in to So, XX% to margin, we used to I we get where expanded get are going to to OI of talked margin order will terms keep we about. back there the be in and

Operator

Research next Partners. of question. Our comes the Please Connors Northcoast Ryan proceed from with question line with your

Ryan Connors

I have the us any Hi. near-term, if a on in tracking expectations? Depot the could relative you your that’s give the but update afternoon. and necessarily it’s Home needle how I mover indicated initiative Thank not of to know wondered you. Good you rollout

Christophe Beck

products you, as that people, obviously. of a the Ecolab number so quite It’s fascinating few manager one because Thank our you for question. conference our in Great over month it’s Depot business, been of But here. our to started new Home Ryan. we It’s hope them. biggest We all not journey stores do participated I get we was story we January. Depot. with that X,XXX see the when those market a rollout last months. the to Ryan exclusively innovation Yes. great products their Home venture ago early. the a well, obviously, It’s had

deal an interesting extremely big a We take for deal Home Depot. it’s us. it’s So, And it for the seriously.

We have a team it. after great

it thoughtfully. We very are doing

Depot’s of we remarkable a But Home nice the it’s for to company. be progress the been as with going we good. like the and as the road, numbers, business that here. so main it’s ‘XX. trying as it’s company progress, It’s be track can for since going. move are learn need engine the the growth we I We well, down think are consumers, not that I to the numbers pros whole disclosing much going for week-after-week so a needle the focus where obviously are without far, looking Every what to to week, in

Operator

Jefferies. comes Our Laurence question with next question. your the Please of Alexander line from proceed with

Laurence Alexander

Good afternoon.

on environment. a pricing Just follow-up around a in of inflationary environment, sort the discussion more your particularly

your of share experiments world, or relationship, sense kind push and of around deflate done share the have really there too very hard, gains non-linear to take initiatives a a ability get you if of quickly. where you that you kind breakpoint As is kind your pricing do linear the a have

couple for how can you see the years? out give over based you playing Just a you the what last sense customer of psychology have on seen

Christophe Beck

have as it is It’s you to to more with to it’s off. for We haven’t why effort in well. time, do the have Even felt know day, the sure the win elasticity our customer issue, And it mantra company. and reason not to which news. the a any of a quarter, decades we making for is can the if focus together that is good better the we place, of our our is the lifetime get win customer to life, really them is that end that a want a takes many which because as more we customers us at in keep we had right way

should we making argument for big deal. reducing always customer a it’s outcomes perspective of more for get a a but And showing well, even when for was bigger we XX% were very in customer value they share ultimately, well, past, remains perspective past we for So, eROI such what return a as it’s creating every better more. the we is order This for it good sure been well, is world. good pretty high creating to that well, for in merchandising we mantra. It’s and been not of honestly, our on customer. not from the have But impact This have strong. customers well been ultimately for an the our it’s pricing that start has focused same as as the perspective. share value return the have we because for performance customers. gains the the because everywhere And always around creating good well want have the customer, discovered that to a In This their both that return environment, as is buy the on from product from get not while us. as customer

well as gain further So, helping this us is share.

a So and overall, for been I very think it’s everyone. the been learning it’s painful process day, process, end the a always of been to for it’s journey a positive everyone. learn. It’s good But at

Operator

Vertical Our line next of the from Research. your question Kevin with comes Please McCarthy with proceed question.

Kevin McCarthy

robust cite U.S. counterintuitive there much quarter as Good I the capacity the to it done in Yes. is be the Reason year. in on sciences afternoon. Christophe, #XX, well in Slide pricing, you life what which you the XX%, found think growth including following for that experience as imply comment wasn’t you as and ask volume expansions might business have be and the your sales volume, on would to seems I that of UK. you

the context. you. wondering put is to could just there anything Thank there with regard if customer you So, help us or anomalous that if comparison in behavior,

Christophe Beck

Life in half a It’s the Science, been good every our it’s because quarter business. where very general, in No, to Purolite story. be not going is same obviously,

building are new We foundations.

at in as well the look It’s team on investing capacity, expanding exactly time the I But are going well. do it when are schedule. build, are as that we thoughtfully. requires really we We capacity very before, to you mentioned the

overall shift, time new takes Life well. which going and where in trajectory, like for life to driving it’s that same learning most time good, early do really new pricing stores the a it really When on Long-term, it to look the it. the I well. towards the impacted customers, doing well so at science going. to mentioned that’s good sciences, aligning so while we But really, very from be part, are I order little here a and in for are same it’s forward. whole at do nicely as business on, are being as and We quarter required going But that progress this it made shift as a had good us margin not business, obviously, going are we but the promising, well. lot We the it’s are get as we to business. bit very more going every well well. generation, very volume to

Operator

of of question from Bank the proceed with comes line Our Please with Byrne America. your question. next Steve

Steve Byrne

you. Yes. Thank

the do expanded in. is – your wins for something primary driving business that water? force your is customers, as driver regulatory would treatment you customers? But that say or on I the this the in not is what sales So, attribute particularly beyond increased not new putting And existing or customers, is it of there discarding such legal new this effort scrutiny

Christophe Beck

Yes. things. Steve, it’s three mainly

drivers Some small in well business leading the market good business of we versus growth. water whole even very the and world, in those you are the improving, we have very industry, obviously, of so so are serving. just But mentioned, though situation main special that so good three that the really It the a story. enjoying a doing keeps is a

for think centers, don’t markets data amount that’s driven centers win to that’s in fastest. It’s time, well, water, to And well, think that’s of the obviously, Well, microelectronics of ultrapure The lot and data consumption, double XXXX. is net about that and use all they a well huge companies in the of the for get growing to the a zero towards we less Think water. most instance, water. people high-tech When get fantastic at are lot as the first the because part one as business. much we as are industry made by is end consumption, have a the are require trying focus by we can same to commitments water future fast fast us. growing trying a foreseeable about growing cloud for they a mean

be can well, like that’s businesses traditional of more same water mining, that’s huge a well, as at as us, well as well for growth mentioned being it amount I the required. So, time before as driving

and have well. years like nice growth We copper as God, the related technology. business towards materials high-tech back all very way, shifted to from driving that’s thank and premium EV renewable coal nickel, fertilizers Well,

an and foremost, we drive that’s So, end-market are, first us helping growth. focused

customers most The hard their all second made carbon commitments them – to most of commitment. of have is and get they our have to terms have And water. a of so or time in

well we to don’t positioned the for the well margin. believe our in way, partnering benefit, and stickiness business are same the they our that’s help least get a the We premium. water what increases best the relationship, driving as are with money front, We doing. in the for more not customers want them keep in We of on And we digital well, that’s Well, green the to green are at it’s something where connecting innovation. is last especially customers. way innovating the means is believe way, in to remarkable as our be, which while the but obviously. right as demand which high that’s right way, the By reasons, we all saving time,

we terms success. what of for So, the well, sustainable if you terms drivers three of reach third, the markets, for in end those are think to main in water do our innovation, commitments and customers

Operator

the from with of Morgan Andrews Stanley. comes with Please Our proceed question Vincent line your next question.

Vincent Andrews

of raw shouldn’t wrong? would – as am you up. be is we move I do just wanted call, freight. that raw the into a in environment they this am some labor have heard a just can them And to year, deflationary through disaggregate down. I believe in I Freight, we I well would but up Christophe, delivered for is assuming we follow-up product heading you. earlier for bit. think know there as I you you would costs. included your delivered product XXXX. I if materials, buy say And labor XX,XXX be I your Thank or I be little all have actual costs as materials, think, on would wondering, this I

Christophe Beck

So, elements, here. Vincent, few a

costs labor for is delivered product So, in not us.

good our that’s comment feel driven have team about that that as cost retention So, fact digital been with a labor been those and our talking high have able framework always on we to talking automation. labor ultimately been and how within have and I well really to but we manage wages. have numbers I well, The we outside that us of that. the helped has as had good just very about a keep by maybe

As drive mentioned before, seen well numbers. in that we have the managed as you productivity to our

you product delivered I right, ‘XX. sales. roughly all We represent our Overall, in is of it feel it the that really are and much raw cost, So, how would wish question you third on wages, talk which will equipment The of the labor not costs our ease. numbers materials, turn negative. is see It side we to that’s we about and to that as is delivered technology, that dispensing Vincent, in only, that When well, product good. a so and our I going were we freight/logistics that ultimately customers bringing mean. and what

further this costs increase call, X% of product a of XXXX. an first earlier the of We year. delivered mentioned the had XX% in in quarter on a little bit we As had overall increase of

rate negative it. and comes what right But than is increase will to that not come. ease, but two but seeing And it it the I well, And to hope if in when that cross to we seen we it’s next better the Vincent, line increase. do past, increases So, earlier, in expect the going quarters, the in of not this the still an become are we will this now. quarters comes zero have take

Operator

comes line Our Please question. proceed Scott from of question next Oppenheimer. the with your with Schneeberger

Scott Schneeberger

the category, to Thanks been Christophe, two really momentum questions. there. one very Good let’s think pest strong afternoon. go segment, has I much. really, The

seen have expansion. margin We

one little hoping reference part in bit I was what bit. the means. could the innovation it I about second about that is, question releases and And was segment? little advantages. mix you of cited the curious can elaborate you Some am just Thank that competitive of on was the is unfavorable in a share the of you. if a the headwinds

Christophe Beck

Scott. you, Thank

business, for You know business that business bit things whole reasons. have stories care textile that we is part have because other one in combination there, little you a our same colloidal a simplicity a have our weak of pest business. nothing do technologies on elimination segment and Three of segment together, but we of our have the at to

that those mix, we textile, different to microelectronics, different. extremely the biggest the elimination. that is far is in we about businesses be are great team, a in mentioned the unbelievable growth North It’s great talk to very which team reasons do America. where elimination, tomorrow. that our very That’s pest pest have that three doing it’s we been delivered mix XX% past segment few Colloidal are It’s well. when which on true which do strong than than markets very in the good few the very The true with So, is positions. what of what very market in But for is a business globally, is positions great great in related different by it’s journey years. big an growth position XX% as over going today, and we

on focused very are We commercial.

of job no residential without get in have you as in in millions in serve, terms innovation, world have to doing we the we much probably need So, order here, well too obviously what there, to traps we here. detail business, in pure very as going done And the know, in play we a so of are well. that well,

to improve where we that the primary in in to company. we could we truly just a a it’s some something do the not do our automate and and check the not we making teams lot we imagine area there knowing capabilities in places that there can in that pest go sure if activity have that You location. vast well with that could in whether work send digital here and as That’s is is

in only have digital with being a all pest So, combining great an especially done. the innovation, better positions I performance, with great capabilities future the even think that’s here, great is two but the business, that to we not great

So, performance a for good ‘XX. contributor the the company of of

Operator

over there the closing time. comments. back would to further Hedberg, at like Mr. And are to I you this floor for no questions turn And now

Andy Hedberg

Thank available on associated hope I you. a slides website. our replay That great and wraps the up our you Thank will first quarter day. conference for for made call. rest This of call conference be time And discussion your and participation. everyone has your

Operator

gentlemen, participation. teleconference. and conclude This you Ladies thank your for does today’s

a your day. You have wonderful may lines disconnect and

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