ECL - Earnings call transcript Q2 2024

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Operator

Greetings. Welcome to the Ecolab Second Quarter 2024 Earnings Release Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. At this time, it is now my pleasure to introduce your host, Andy Hedberg, Vice President, Investor Relations. Thank you, Mr. Hedberg, you may now begin.

Andy Hedberg

everyone, to hello, conference second and call. you, and Ecolab's welcome quarter Thank are Chairman Beck, Scott me Christophe With today Ecolab's CFO. Kirkland, and our and CEO; performance. A the on this associated Ecolab's earnings at ecolab.com/investor. Please state with referencing results, that moment teleconference quarter in website discussion supplemental to these a estimates the which read the available the and of statements materials slides our are results take of our cautionary and future release include along materials, forward-looking actual from and are those projected. materially These could differ statements, results Factors described that XX-K section most differ could cause materials. actual Form results in under to are and recent posted Factors the our in Risk our

call you the Beck for over share to refer diluted supplemental his information comments. also release. With earnings like in I'd per the to We that, Christophe the turn to

Christophe Beck

for Andy, and into we before I'm year. continued in more adjusted earnings QX everyone my quarter. expected on growth very summary, XX% momentum where to jump business share to growth even earnings welcome with strong the in happy the we're XX% and Thank call. perspective very Q&A. XX% I good the in where are But full you, to and going. Ecolab's we about feel second

Performance for for strong X% X% previously lapping last our delivered and the segment very in a of to across in XX%. Specialties rest further normalized as improved. Organic our team our remained customers growth forecast sales growth Our range our shareholders. to delivered its X% Institutional segments strong & year's

is margins momentum second our margin in operating earnings growth in With per share. XXX expanding points Margin remain by our target, trajectory. resulting long-term continues to basis record the continued growth income exceptional be quarter which we margin XX% top XX%, growth leveraged and line XX% expansion. Ecolab, to very on organic firmly earnings Our by towards XX% for to adjusted increased XX% strong the operating

sales growth strong our year's last on exceptionally double-digit Institutional well, to top gains. organic Specialty & perform continued segments, of at Looking delivering

improved as leveraged Importantly, look their operating Water by exceeding softer growth our Ecolab's already accelerated volatile continues was & expanding end savings Institutional margin outperform labor trends strong customers market industries. our double-digit with segment our by to XX%. Growth despite global in rapidly X%, traffic improve food high-tech led serves our to Industrial expansion which continued business to This Specialties downstream in significantly sales business, continued robust operational performance. growth demand. margin income growth data to restaurant growth and in the and center microelectronic technologies and

& offset helped Food good Beverage improved last stable were business also, double-digit new us end as in sales stabilize. as trend accelerate business Performance wins new continue expected, market expect wins Paper year's as we As growth. a to comparisons in to

performance. X% showed short-term trends. soft Life segment better and attractive to gains Our us allowed also as industry growth Sciences to improved Healthcare share Life Sciences outperform ongoing

We exit year. expect we during profitability. to our continue low-margin Life sales the as half business improve Healthcare second Sciences were continue modestly to modest the in down to of our growth business

is the to to expect conditions, as And our this sale well. previously business transformation global very close very Healthcare Our announced soon. transaction surgical closing we moving to progressing Subject solutions Medline and regulatory is of customary expected. exactly

made income solutions. about and quarterly the transaction announced Healthcare As income operating well. discussed exceptionally once and quarterly cross-selling operating our organic Once Sciences reduce profitable and when by Elimination, value of benefiting Life our $XXX we strategy sale $XX to continued million about and quarter. even closed, by the that will last is important sales service for from continues to and execute anchor its the combines create digital a its Healthcare to progress shop Well, consumables, personal reprocessing digital business. words, healthy focus instrument to sustainable, digit, term, more customers. Pest stronger a typical Longer hospital innovative other in done. our again will business be proud million. sales Ecolab capabilities. Well, grew there Organic business double much X% that on enterprise Healthcare we've grew on I'm deliver very

long-term by resulting customer growth enable by will around done approximately will $XXX This value. more best-in-class serve to by centers, the One As performance fuel to our customers opportunity. At across or and we the environmental to towards realigning expected sites drive what journey, reach XXXX. But and and are best-in-class I'm complete continue like, of best continue organic best to us work and on leveraging to to cross-sell excited help impact can details countries our time, technologies all environmental expand operating billions same existing and best-in-class hundreds billion fronts: locations XXX business long-term offering. outcomes, more new looks performance attractive in the our these performance to even operational and major share enhance operate demonstrate than can us performance customers our X% because XX% our impact, realized global of simply, growth which total Ecolab initiative, be performance data will know to We share we an operate data beyond. best leveraging will of of customer Ecolab $XX world centers XX experience annualized of business operational we Ecolab's savings hotels to system continuing the millions outcomes, this and growth the the One deliver for how restaurants, our XXX,XXX offices network allow help proprietary by of we points into entire X serving margins of million industries. By more capture X% functional how The sales across know than a more customers of deliver the connections our on excellence. way of

balance to Looking of strengthen. have we in performance to confidence our the the XX, continues

year. to XX% the adjusted of to range a As XXXX up $X.XX, EPS last our result, XX% outlook are year for versus we increasing $X.XX full to

includes to news, range, demonstrates is share, EPS XXXX in half surgical impact EPS. business. but still as hand, incremental is $X.XX to discussed, it now second underlying full of the in than also about headwind has a soon. very anticipated the which headwinds also global estimated anticipated of more unfavorable the other is on previously to This momentum has to despite strong a the now the bigger adjusted this impact previously EPS, full to The an be which close from our guidance have have bit to $X.XX these a very expect on of drag we year And be a we XXXX sale year. FX, As had unfavorable increased good this more we become we our business. and transaction solutions range is impact the

expansion growing to pricing our X% rate X% a keep first growth. and to cost similar moderate margin expect the ease. year, expected in organic at volume benefit the the income delivered continue will value operating from 'XX, as half X% of of sales lower Attractive is second though exceptional expansion product We X% half continue to to to driving will the rate of

impact per 'XX. anticipate Ecolab's target growth solid progressively diluted continues XX% costs from exiting Finally, and delivered XX% normalize normalize long-term earnings adjusted to to quarterly as product expected to we towards growth continue to share

position. a very balance opportunities This strong remain sheet to that and for momentum is has us with with capital in will brighter. allocate returning and continued provides by our great stewards in cash of shareholders. Ecolab's dividend we'll As business always, our capital to invest options future to looked flows, strong cash many the continuing increasing generate shareholders growth to good business, returns never

operating their therefore, our margin Our value delivering our remain customers water confident We, while proposition, performance increasingly the leading and use continues and pricing customer is in technologies where superior improve energy and performance to fuel beyond. help XXXX and shareholders and relevant in expansion. for customers reducing our growth,

I your Andy? So investment support thank for Ecolab. you forward your look and questions. continued to in

Andy Hedberg

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

Operator

And Instructions] with line the Blair. question from first William [Operator our Tim of is Mulrooney

Timothy Mulrooney

had the Institutional ever second the strongest here, a strong wanted OI quarter. for So I've little into margins seen segment dig to the the bit probably I quarter, in which second really

margins And saw expectation what that's helped the we think onetime that that factors I if I'm given still wondering XQ? any year here we but peak there in in third typically were [indiscernible] models? in quarter, growth side should the if touch I of Institutional that in sneak And be could good. for our business really in on you're which the just to looks aware seeing now, to a part this right

into how the you're curious the second strong as of about next and this head year. you of into half year that Just performance sustainability thinking

Christophe Beck

with segment. & question. Institutional exceptionally for performing the very Thanks well. the They're Tim, pleased Specialty

XXXX. growth lapping As know, they're the you've as QX against you in seen, of XX% top line so

is traffic down for where strong, X% especially really the market this So a food in is year X%.

remain reach of to clean remarkable we and 'XX a it will And keep XX% quarter, that The going were margins said, XX%. targeted we the year, for margin should as full a but segment. in by as are little quite so a as know, improving QX from north you margin as for it's So And that generally, bit segment, OI had performance. for the well seasonal, we've there. very

a and going to interest well huge in improving from years. And clean. keep next few very top and good margin so So quarters very from customers the line, it's strong, as perspective,

adding a of to is that is well with So also I&S business. firepower pleased very what doing. Innovation lot the as

find our solution that labor we're need is know, providing they to more you well customers as they have. exactly systems, As digital to shortages, need manage need they are trying growth They technology. more This automation, our what customers. wage more

many So of future was all with good pandemic you for a steady I've as Ecolab. the the Institutional for business in times before of all, shared me, kind

gain extremely share uniquely Now of a high a margin. years later, positioned to few business because that about we're lot bullish at very I'm

Operator

is Markets. with from of line RBC question next the Capital Ashish Sabadra The

Ashish Sabadra

see the should going think I the raw going the the we material And we've to expansion. to about just SG&A back leverage margin of gross we operating half tailwinds the forward? on into How dynamic. think How pretty wanted year. robust about should continued price raw focus

Christophe Beck

question I'll Thank pass you, Ashish. that Scott. to

Scott Kirkland

the Yes, Ashish, thanks question. for

going are next DPC, SG&A first sort commodities, raw a leverage, the some think think particular. And into we other saw the low But about other talked Just seeing really the in get given upfront, favorability we cases, the growth-oriented we expecting call the be back commodities digits. them the -- question, we're driving oil-based which about normal then of, -- is amount favorability inflationary year, answering increase where quarter, thousands in all then that raws, like you're of that taper We're quarter, to as And and really investments the very them in firepower, buy, it, frontline seeing of move to is QX, productivity. world lion's X-part which we investments, of go digits. into productivity. stabilized X% your think talked differently as feel next QX, we And underlying of around in technology, that we last we about we go year-over-year. seen And technology, is the single the digital to caustic, about Christophe mid-single as raws, favorability. QX, long-term your we by sort helping those making raws as as materials about frankly, year. Certainly, high in get really to levels you've is as which smart share good the second question, direction, they are

forward. we least So going get to in expect those to long productivity at levels historical term, of

Operator

Patnaik question is next Barclays. from of Manav Our line the with

John Ronan Kennedy

is on Manav. This Ronan Kennedy for

benefits? the for related it One impact Investor it addition extent is the any? Or considered? But that impact Was if understand and Day. to targets, With and contemplated initiative what the at the did I Ecolab One SG&A realization, framework time the what 'XX -- GM unveiled September initiative, in on understand guidance to incremental? trajectory, fully the And this consider recovery. long-term productivity you Ecolab what's I line

Christophe Beck

to provide Circle Well, X%, the a $X importantly, XX% Thank The our working initiative. of you, to for customers other made is up earnings way, - the growth. When billion on leads for very company together for customers. to XX XX% this fuel successfully is to growth so, to towards Ronnie. value world Ecolab our is whole our our teams by order Customer the that to XX% long as about as think $XX and rely Globe take to most restaurant One to is all It's today has X% chain, we can huge, one restaurant the billion now, know top helping we our margin in Ecolab to share obviously, a by which But by very everywhere strategy to our time. that we've the had support, close really the work you on It's reaching all anchored commitment it One One together opportunity OI the Circle understand well, Ecolab, what quickly the which should to commitment going as the out Ecolab can. customers performance per reach there. for as working what's hardwiring be team. help that that, instance, is we we because at best my I by ultimately out a best-in-class aiming performance around its

the that of In terms the environmental terms impact, potential share can of upside them for us we of our set our for in helps of and price company, as for customer. customers help improve what's guest for cost, terms satisfaction, value and the obviously, performance. will understand in us we restaurants, helps that a that helps That their Well, us the between margin, customer positive improve as grow. net-net and

as So win-win it's that or well drives a loyalty. retention

help it's of well and at using productivity One going we serving going as implement productivity. We've that growth get all, go reusing X% Ecolab, upside reinvest growth. the improve beyond we XX to before, as as to forward the XX to So the margin of X% end reorganize as will the in will work, us had in One driving that's the basis of that XX% the time, focused the at to we that's past order customers same some that the today, way we but at and as in we're growth, as the All SG&A us same Scott line improve top mentioning growth go day, points in those to was to investment. by Ecolab, time, also help technology

Operator

from Securities. question of the next Roberts line John from Our comes Mizuho

John Ezekiel Roberts

of follow-up on like just It plan excellence. on Maybe you centers further Christophe. Yes. sounds that, creating

to And the the functions that Excellence? by the excellences would Center of of are charge be severance for center what So the going be? of some is for replaced

Christophe Beck

been I'll way John, we've capabilities to to So work, years, generally, let so have. especially that to the all it that over with reply technology the we evolving the Scott we question. But always

thing keep strengthening technology team bottom in So from the way which that to our to the working, line, is the to most new shift technology grow going meantime. productivity, investments of all of ultimately help us faster newer that is the but to drive well good is and will as

for So in anyone organization. be the there that, will net Scott? negative Was no

Scott Kirkland

that, Thanks, John. Yes. I'll add to Christophe.

It's is it's centers moving what's said, of it's realigning John, are But the where that to happening X-year over support the growth. done, cost As of that work is on he perspective. And this about a sort to this not is not the To that next to work really. earlier and work about starting think Christophe program, the about than years, cost restructuring. and jobs, it but special in nature few will about gets then charges, X% on these less think sort the about we what not savings, honestly, is severance. the of your excellence productivity over helps net you And if are XXXX. immaterial about savings in the point, savings. of question drive of P&L. The focused on on scalability create pretty average functional from This the as the question really to a your incremental it, charges long-term context include cutting growth,

in are to are move advisory costs, years. costs, also many again, these other the next happen there countries But COEs, costs. few including we As into other global costs over going from these there, facility-related work but

Operator

Joshua the UBS. of line Spector with from Our next question comes

Lucas Beaumont

This for Josh. Beaumont Lucas on is

Ecolab assumptions, $X.XX mean, been the more a years get last I of in looking So XQ step instances or in of up like just second at half didn't happen. Typically, EPS there's that will couple XX of a sort XQ. the where only to

it's of end. only kind at is to going guide $X.XX that high to the your So assuming $X.XX up

that move typical was the you've firstly, secondly, basically just could wondering doesn't if flat us in sense is down year? And XQ of then modestly, assumed like what walk make I to this So guide. normal through which kind like you is seasonality your why

typical So XQ guys you be pointing are more move move had where XQ the then versus $X.XX. $X.XX like more we normal we a and year if for the get at on to the

So just what's different trying this year, to understand of the sort in setup please?

Christophe Beck

I'll and let start Scott that. on build I'll

Scott Kirkland

Christophe. this, around. Yes. of move to a Feel Obviously, add free to lot

headwinds to from sales second addition to of accelerate talked we see side typically on you second the to of the as $X.XX stable of quarter the that forget will becomes then you expand, eases and talked continue we will quarter see see the half, margin but third in which the As ease don't will this, higher about a to this, the sort continue being start to right? and it sales, we DPC will ultimately But be of of additional third the the in year-over-year year, DPC Christophe about, as a in that overall, year. And to next you'll impact sort then surgical, expansion which And -- year. the headwind, headwind see and throughout other FX. the have we'll expect

able be XX% we're at to the range. long-term driving excluding some high are And DPC if this back really that tailwinds our XX% to here of in the fourth underlying and end getting this earnings we're to But DPC the the to you stable EPS that quarter growth, think we're at to then probably not going growth drive very to getting and earnings strong the the third quarter going dynamics our even years. of I you to is at second have look normal -- half be so that the compare going year

Christophe Beck

the said, Yes, FX margin well you as a as XX% QX well the so that as half as feel really When with no I of have for demonstrates strong QX, as with XX% the DPC think in Scott momentum good XX% impact here. well expected business QX, about we well growth including of and earnings point, at upward that XX% it, in surgical to about here. sales XX%, midpoint XX% and the second help momentum to the

very here. feel So very where going good We steady. about consistent, really we're

Operator

Parkinson with line question Chris Next is the from Wolfe Research. of

Christopher Parkinson

dig lodging like and it. in mechanics Christophe, your to everything foreseeable to and does ] then side any outperformance. of team going to dynamics is market outperformance. second of and break institutional on about the of of material future? drive I'd service, improvements little it kind and the down going your the Or that's gains when obviously, that's of driving in macro be and all relative half just including for Institutional there? the given we been these the when going more the share degree Specialty, 'XX, a narrative quick see bit on retail primarily think What's But further And actually the [ some perceived food orders value in you

Christophe Beck

Yes. so Chris. mostly It's been Thank well, you, as few market as quarters. share gain past the it's

so the traffic food U.S. X%. is mentioned, down in the As restaurants in

and it's and that, at pretty and performance so They that share. showing with we much the automation. same for The Other Institutional easy with expensive So are is high that's our helping don't turnover. labor in customers we're really our how find than driver labor a is time our customers. gaining Specialty of main labor

new Restaurant we or that at in it's This while more program our pretty restaurant what exactly ago hotel the And X technologies machine months competition this and to what National way Show what serve being as is them. hard, helping are need. dishmachine helping are all solutions few like we less digital solutions customers AI we're a it's Association them, using a well or really our Well, can't is exactly labor. better our provide. guests they providing that chemical doing exactly our in So the X introduced obviously. All provide

So margin you growth at that a drives everybody put wins. all together, because it higher

Operator

John line the Capital Next of BMO question from Markets. with McNulty is

John McNulty

and it Paper guess, maybe business, growth the and the When looks markets for Water, half seeing there's What on a -- it's like especially give haves from you you're us your areas & hearing the Beverage, little in your year? look the kind of heavier customers, into Food next bit. the outlook nots of early be at still the can some struggling struggling I and you're as applications. looking a have forward some you industrial decent like areas of the that year may water you're back Industrial like

Christophe Beck

that the Generally, you, is having. progression John. Industrial Thank like I

line bit So work well. ago little unbelievable Industrial fruits started if you wanted well terms margin we a keep where is momentum, And reached year in done level a top offense what's a record happening. shift that be. the of starting the broader figures, of that's to is We've while take well improvement. the exactly which picture, last line to bear exactly the terms we moving top and as has as in margins, we to as Getting improving

moved we've X% quarter. well, quarter in way, segments the which been growth in at overall X% the to X%, that by as second our well is business, has which, first Water Within mining. is from by largest impacted the as So

in downstream extremely well water the the well. as as Global Water in underlying time. same stronger even well would really strong is is be doing at So high-tech

shifting keep to nicely. very think they're about Paper, and When improving So F&B to the in Industrial I going come. quarters

up line, strong is margin very with you points today, Industrial XX% where further were see basis XXXX. So than will in of better shift which even we bottom XXX

yet and So managed is very, very to best the think well that come. I really we've that

Operator

Zekauskas Our of next the JPMorgan. from question is line Jeff with

Jeffrey Zekauskas

XX% institutional this secondly, tougher quarter, Industrial business? in growth for in like a year-over-year for the margin, have I the deceleration And XX.X%, a business. have -- Global that and a that. get comparisons? that's know because Do don't your growth In X%. to something at, quarter, deceleration volume was first your you the business that's business of target year-over-year reason goal the you is growth for you know, In I Is a your maybe do want volume X%. the to volume

Christophe Beck

Thank you, Jeff.

just Industrial better at is already well, good as As ultimately, to industrial XX% what XX% was getting a other that move to want so the towards And than whole have And XX% now, before, XX% XXX we to basis we it's will and north mentioned Industrial step points XX% to XXXX. the it get get the businesses direction. we all a in be will if company. as get target, right of

about good Industrial, XX% both really a is compare feel beyond which you as getting the to competition. So whole an company for and XX% when margin unbelievable

Now That's X%, X% your your year versus question It's first so lap which was the X%. Institutional last comment on XX%. this QX from to year, volumes, to answer. well, X% between bringing the was the

So year-on-year you've that, comparison. in the meantime. improving Other it's segments been seen, all as have businesses, a as than all well

So all are business very the nicely, comparison, I momentum. improving year-on-year optical and businesses why good which about is feel

Operator

Deutsche with from David Begleiter of Our the is next line Bank. question

David Begleiter

to from this initiative. on need to about Ecolab Do rollout And the we initial the how support to One drivers think investments revenue any you this back initiative? initiative? Christophe, make additional -- should

Christophe Beck

mode. thank is lot also of to you. expected execution All as into been the our numbers as to the here. now investments revolution in David, work has well are we progressive. planned done as going past ground It's So There get few quarters A no be in be here. well over that's

can initiative. quickly because $XX And to this from can. billion as the that initiative get so that's helping really cross-sell that know that we as we expected an feel X% surprise X% I no really to It's opportunity us good have So is towards margin available be top this line again, there. And as Well, out customers those obviously, because at before, is top billion customers, higher already. a the have mentioned of we easier $X out we there. that serving we XX we're get

lower. the is So much cost serve to

while the same they could At very to be there are a for So revolution. could it picture that serve for teams bring the years get as how and sell time, doing we're and they to they through go generate, what to few understand well. could it's years. the it's expecting It's very as have been the value customers our when What developing been much for all no together, customer they it get are they the when that over them what well asking for past that pricing developing customer full best-in-class today. plan as an natural. programs of what There's you the we've ultimately performance, what then well that customer and execution get additional paid the organic, value

included line, organic, very bottom well So numbers our that cost no in we incremental haven't as here. in

So Ecolab One feel going with here. about we're good really where I

Operator

the Pavel Our next line question is Raymond of from with Molchanov James.

Pavel Molchanov

We haven't on scale. M&A pipeline. the kind seen any of of you're tuck-in or bite-sized a a evaluating acquisition how currently late, even curious I'm

Christophe Beck

Pavel. you, Thank

Purolite at end We in few much go the can't of I That that So the surgical speak, leverage even last business. also well there reasons sale we the over the years following, of future make right we well integration XXXX. as for done, obviously, done detail getting with We're as too obvious well. we acquisition sure wanted with well got M&A. We've to several smaller more, that was as ratio got X. of solutions our back the could obviously, platform for as that the get our we promise ones our to

it's So go performing big great so fact to I extremely The those opportunities with that we as ever of one position have the is both execution well. What opportunities done business, our connections pipeline all M&A well a sheet that a entertain on after that can We well. very thoughtful perspective from we say a a in basis that we've unique financial obviously, believe. and had, strongest from balance regular small manner, perspective puts and in all us is an rich. as a of

So right one it would be us. for the

as focused in see always past many priorities, key going you. what you're our with in times I've what So but shared seen you've is on the future, the to X

to First, it's be going water.

Second, it's And science. third, going life to to be be digital. it's going

M&A So to be where investing be we're in areas the main to well. as going going those are

Operator

line is question of Laurence Jefferies. next from with Our the Alexander

Daniel Rizzo

Lawrence. for on Rizzo Dan It's

other the side of on bit little a coin. Just the

me look You low-margin the did you Healthcare, be you other this businesses others? past, you've might which said within there forgive in or within in can that divestiture and are but well the where segment as exiting a if at

Christophe Beck

model, really. Not way because you We business. for true been surgical That's the on very for very, think owner obvious was And that our business, basis. a really, was data would a business come on well obviously we look less a fits an product business best The portfolio together. Surgical own It's business long candidate that products. at regular company. Ecolab be drapes, is Medline our a it who in time. the purely where can are the that those apply a chemistry much where a have That's but very drapes, and in obviously, technology, portfolio, service not great you service,

So sure that's business. build typical we've want from the the on time, to At and this much Ecolab for sold make a processing, business. the reasons can we that scale, Healthcare a a business same future of focused is which smaller why one our healthier business instrument really

doesn't across the performance. business no doesn't that markets. of there the nature a have like I and lot performance business that, broad-based right businesses out there is fit portfolio the obvious of that across Beyond the the

out similar. candidate something in So no obvious there short, do to

Operator

the line from is question with Shlomo Stifel. of Rosenbaum next The

Shlomo Rosenbaum

a a just that little of in you question second the on Institutional slowing, negative wanted the -- understand growth before. maybe the mathematical volume, on company volume grew we If at half implications on brought of because just dig ask of I you it, X% last to quarter. how Scott you of the deeper think that to total but I bit up a year? comps, that was look should X%

order it X% make the second for tougher the in or the in half generate of XQ. you year. to volume it growth If Does volume had flat

were trying is $X there of sequentially included was inter-quarter I just forward? And you interest know million, saw line. or ask growth think a debt that's to then if the if don't get we to in mind, same. should how level So relatively volume don't up housekeeping some the that something there but in expense question, to just about borrowing else we the spike going want a I

straighten out can model. that just for could clarify our you we If so that,

Scott Kirkland

start Yes, your last I'll with first. question

If in pay quarter. interest cash in you to first debt the had we that expense we overall year-over-year, down just year look used the earlier at

$XXX $XXX as end of So that at to at it's there's cash -- million. over million of down from come QX, from the some end about XXXX the has impact

there expense So benefit about in to as second million driver gross look on [indiscernible] proceeds, expense. Expect $XX from interest inclusive seen $XX to $XXX of are million. which probably the the it, we as the interest which we'll is million get proceeds is, half that's you've sequentially biggest be in call disclosure, in that the range, the

volume, your really exactly, and Jeff's sequentially, from So the the Christophe of question, on QX about range the coming down that to think X%. the on in on in look more impact it's talked QX second in volume as to this difficult institutional think X% earlier comps which back I comment, we to when that Christophe is, volume we half to at that the earlier hit earlier the as and to comparisons

Christophe Beck

that, on as I've of X% said, can. comparison. quickly equal, has And to so X% this as get every because we X% this to to my been is to year-on-year quarter year, not mostly to to as X% maybe going you created building be commitments

we're something capacities out year being better, remaining position X% very I to Pest that Institutional also having the very making mentioned, this that momentum especially to showing, high-tech. X% in well capabilities With with improvements to in well, as with moving trajectory strong, well. global X% I from have And like and that feet in is we're more street, margins businesses this So to seem all feel innovation naturally. getting good very to world crazy X% as like when digital and as of see the be more more happen around X% doesn't X% that growth with we're a the the X% with as so to strong Industrial the we the going on investments towards X% to

Operator

Steve Byrne America. with of Our of next Bank the question from line is

Steve Byrne

to your longer-term in Yes. I'd like Water. opportunities potentially on hear X view meaningful

means hazardous, under about XX% a to know, has in going these the you. companies that that following? are to or you're last And going then XXXX is freshwater, being consume manages you as with one meaningful The what that -- year an this still that be of is initiative I classified is that initiative one potential global report first will being TRI, talked every after where XXX for is an it have it, PFAS other initiative company that uses you don't

Christophe Beck

Thank you, Steve.

So X question here. parts, obviously, very different your components of

water. companies And the water. that on that our the by at perfectly our mentioned all as in those our Water one is world world the the we is produce XX and reducing in the technology, well interested, working where use time. our so the that is cost which before, as XXX the doing while aligns well This attention. them of companies reducing of their laser are focus the and XXX energy well, customer top terms where This first, helping company X/X obviously, X/X water. as is focus keeps our Those with on a of So of more vision accelerating focusing well the business reasons world usage of using ones of more are really same of

a Now an done with way. certain to on question, going that help to which the play in all to the everyone question, the get Regulation is technologies rules. will same is extent right PFAS We old where have the have

focusing get into address really are issue turns opportunity. we PFAS So customers that helping our today, business a them on how on to plans that

But some will. And growth. or it have going now. see to to on focus it point, we take those And the I are but happen the interest our some top line mostly having here, the time. over Beverage us time like who & ones that for progress we're at an on So it's highest impact Food customers, making right

Operator

Our Vertical from McCarthy line of next question Kevin Research. is with the

Kevin McCarthy

environment timing, savings potential timing to has attached One that the say Ecolab to my on about you path later. glide question than $XXX achieve target the time something macro the the EBIT to thoughts that relates Christophe, appreciate updated expect margin welcome with I coincident any perhaps that XX%. obviously to and sooner from long-standing or that of frame. but million goal margin your or I certainly would of Would

Christophe Beck

almost It year sure, we within few so or will a a there, September get that we're Kevin. than said last you, And year years. October later. less was Thank in for X. I Well,

numbers. margin, I time. as an and of This Ecolab Scott on year a before, So more but even that, scheme One the and to mostly million the we're the will if in OI Ecolab of things. We're same get which One will is between which going talking there a grand closure. feel will was smaller margin direct $XXX savings gross us There to saying about in there. the anything, growth drive obviously, SG&A, initiative the kind correlation no confident is importantly, it's that higher, To get improvement. lead help, to margin, that we're going most

few So together. I stick coming there. to we close Gross already for the which keep where well very within and pieces were we we next our watermark, XX%, high see the is company, the from margin years, to improving was

further X XX% margin as mathematically in was top basis well improvements where bring XXX soon. and XXXX productivity keep well and improvements Well, it is nice points below gross well. pre-pandemic all to together as lead acceleration, you line will the fairly as will SG&A accelerating Our

Operator

from is Patrick line the Citi. question next of Our with Cunningham

Patrick Cunningham

that sales the On the the on be we the of than How about meaningful we target you just the should expansion to long-term that continues when the margin a leverage. a have into bit business, other see segments. business for start sort cadence follow-up is, sales strong, what Elimination do to growth there but margin business? growth and muted And very of is Pest more timing some investments think

Christophe Beck

Patrick. Good question,

time, not but out the always business there easy single, very is almost that good a a it's world, good which performing same always performance. materials, I business, so happens market, steady know, high as in indication. the you business. So really low whatever growth, raw Pest it's to And very an there, no that also Elimination best At the love double, really good, none is related

there get no growth there drivers going are here, hurt mostly. DPC And that when business. It's for a XX%, on business of help main obviously So think is north or to I X the that's about sure.

our The first it's many, one selling invest so services And to growth strategy worked which well has in connected second, really Pest Elimination to drive at in core Ecolab years. Elimination, customers is cross-sell, been existing many to the Pest over of devices.

the We have technology. all

industrial largest of one world. the are the in cloud We

We have all technology. sensing

need all it's data Restaurant have hall, different. or One to were need. Ultimately, we minutes. very to Association go we in to conference the whether them going National visit tomorrow roughly devices that you go check and at XX have that's XXX activities today, be those going X hours world in to all the to traps all of today, have big all millions not, so We done that Tomorrow, systems, connect point in we everything cybersecurity, that check you're where you of well, to each regularly those get Show, around traps. there and we going be

both in naturally and in drive of terms we out of can performance how value growth, terms just So that create, we of can imagine much customers of to in that service terms business.

already growth. company even is invested our to going drive which it's drive going to in return earnings line that's top to capital, drive the It's higher. So highest going growth, further and on

Operator

of the Wittmann Our next with Andy is question Baird. W. Robert from line

Andrew J. Wittmann

I Ecolab Great. sometimes also One between think, the because guess hard understand it's outside, various wanted difference just ask plan to, from I the your to on the I plans.

digital. think digital was in that over kind the then, also that again was XXXX in rolled in then that well. And time initiative, that and you 'XX some that technology I you by to I at The expanded efficiency Christophe investments announced think of underpinned, even advancement European 'XX. the changes talk investments 'XX then I 'XX you back largely enabled you driven I think program that you made talked in like you made think about institutional out of about the years, the program the those as

prior some of one some to ones? of technology but this is compared efficiencies, to finer bit make to these this point using little different of going I'm the you So hearing just again I be a on kind what's about one mean, can effectuate

Christophe Beck

in great It we but you've prior it's to the where delivery that results. that the way perspective, a leveraged by as well institutional. has the is improve performance to the ones been only seen today. why Andy, performance we individual here, of ourselves, Specialty That's really Obviously, today. difference, main the working we've the From It's So and reason. was business. in so this about leading Institutional the the well organized we've and innovation have talked way technology growth

ERP, was Andy. Europe, X% from also much was technology. technology, when it to but And Europe today. at back-office much You XX% well, you XX%, margin was more look It today, came it more look

us the by one, my good if were previous that Andy, be? It's a at the performance expect connecting can see all that same the leveraging this units at we best all because a is as would the is all for all order the to Ecolab the of our and that level by together time. a dimension what's that very business value, my businesses good individual to customers customer Ecolab for have in Ecolab how returns businesses were led understand locations, savings One businesses connecting different help what's ones together there. One solid all can do, very me So them to much

Operator

Our is of the Research. from Seaport Harrison next with Mike line question

Michael Harrison

other little you like bit XX% or You noted years business penetration more around Christophe, that you're Water is teens around any growing And few data rate way segment any the centers? context centers data Or even Water double a that within rate specific? the business? or there with your or about the XX% be opportunity more high-tech growth talk the higher? can digits. over the for Is next to is seeing

Christophe Beck

are industry, state as growing too so It XX%-ish talked that in disclosing that reducing where which to XXXX, obviously, we growing that, reducing in kind the the data it's semiconductors, highly business. At them companies, few on share showing time, of XX% that organization all or produce not will has very highest we highest are same serve while some we what a while in looking that been partners factor when more it's which computing high-tech far. computing, kind the and we've our will are platform profitable resources been companies because solution. for of helping deliver and that's impact those power invest the power hundred that water the find more the Well, those hundred centers, help the much a usage you We're million million, manufacturers is hyperscalers customers most and the are trying business uptime, steady cost-efficient you, have being trajectory the like have we because ones new limiting but we not in operators. energy year, that's of detail They the on about, of to business, few so it's that. true the So a a roughly innovation with the to order last serve, come environment.

in can It's of cost been is our technology. it of and better. keeps It's kind for them. for getting a shareholders invest global This fantastic means us. we for for business It's high-tech good has business well. which as secondary it. good good the They high pay So

Operator

from is with question next Andrews Vincent line Stanley. Our Morgan the of

Vincent Andrews

it think than is this that a you the more impact segments noted price? can One Ecolab, will wondering there Christophe, greater or for all program you the somewhere you having segments. some if your One designed touch of more on you on there just volume are within greater on segments, I'm anticipate impact a and overall, are different others? And that on benefit

Christophe Beck

restaurant physicians are in in frontline business, which are interesting as our will speak, business me cleaning of best wrong. not you lot It's is We hand & can water several both franchisees us world. Vincent. our and that huge one get or cleaning all thousands I biggest are believe that's performance hospital, so a a complementary, if business. sanitation. we one. I serving well would so of F&B best our that's patient. our and sanitation my drive bringing in restaurants performing They and performing have with for our the But here. But and you When suddenly at with There we'll our terms more world, expertise. water sanitation I that about share business, think one as F&B, and important. Beverage, to at dollar that a insight. And together improvement obviously they around don't of We and cleaning as believe go be in doing restaurants as further in in going the together, Food a the What's one that think about for we country the Well, believe are customers of well Institutional. an and what's When I could of were people can water with you that well, And the even our generalist. include value question, knowing you don't get shareholders, hand, chain, you potential It's in is the you. but like have

companies. mostly which So then that with shared afterwards other fact the best-performing it is we that is us in the can the seen performance the And unit we list as upside because value mostly which price, is I time. same other deliver the not for what in price, mean, businesses. at delivered drives that we've well the that for customer

and goes value way we customers, same keep why forward our are time. never and that move price, call the well is why which our we It's For as improvement we share we us, that's the up delivering by it that the way. in to at down going as it

all good as is & another story and Food Institutional for very So one Beverage well. one obvious businesses. an a

Ecolab our around Customer the this more we that our the why the will the come, of is the step. in than targeted get reason anywhere we believe hardwired the Circle share a and OI world X% of - earnings ways next keep in and towards that's or Well, and and X% bringing knowledge to the per strategy delivering XX% day Globe day in out performance share XX% all our to I where and years XX% to to critical ultimately, the that are to can. of did growth much quarters it we of This businesses past as as can margin across is that's industries. Circle we performance going as deliver the performance. So our hard in next level that way of last all again, quickly we're And step working be not

Operator

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

Andy Hedberg

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

Operator

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

and your lines, disconnect a You have may day. wonderful now

Ecolab (ECL) 30 Jul 242024 Q2 Earnings call transcript