ECL - Earnings call transcript Q3 2024

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Operator

Greetings, and welcome to the Ecolab's Third Quarter 2024 Earnings Release Conference Call. [Operator Instructions] As a reminder, this conference is being recorded.

It's now my pleasure at this time to introduce your host, Andy Hedberg, Vice President, Investor Relations. Mr. begin. now may you Hedberg,

Andy Hedberg

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

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

Christophe Beck

for start you on the me end to so welcome pleasure our seamless by businesses, this of work hard everyone sharing thanking It's our much, incredible let And Thank another because our and dedication call. our delivering and Andy, customers the team performance execution their again. to and quarter I our across have of endless goals excellent team's and geographies. commitment that to broad-based quarter, markets

proud to team a as healthy future. as Our is with company and great talented it been such has I'm today, lead such a never

performance. our to specifics Moving the of

robust With of earnings value margin strengthening continued strong strong midpoint operating These earnings. momentum, guidance combined adjusted are XX% growth our highlighted volume Our all again this full third once the range. pricing was deliver by to income we increasing quarter in expansion. growth, and year

businesses. across with X% healthy sales organic expected, very As our growth grew

remains improved innovation. is At to X% growth also X that XXXX In are pricing business hard pricing in and to predict, strong our breakthrough value our points volume basis helped pricing. not This our quarter solid in to same range essential X% XX.X%. carryover growth a increase significantly our unique targeted to the by are where global to ever recognized further wins our energy in supply team for and new customers. Backed productivity reducing to expertise, XXX enhance more than Ecolab solid and Importantly, is line and dramatically solutions at technologies The to margin yet. time, by reliable water world our a while top driven delivered gross X% usage.

With third half points operating XXX margin first year. Overall, SG&A also we in and which quarter. by the Our basis XX reverse will SG&A for quarter's our we today, on XX% second to Firepower, with we quarter, this, productivity to per to And close SG&A it trends was margin over trends. In frontline XX%. expanded ratio income last in quarter a And record XXXX, XX expect ratio XX%. very FX, to grew which points be long-term half basis is consistent quarter NOI versus XX.X%, fourth improving Ecolab. after a fourth digital around our keep next to technologies from the service from while expect will long-term also will This SG&A improved note, flattish third year, anticipate even our year's improve XX% side further it's in growth benefited XX%. investments capabilities.

reach points to points better has growth delivering commitment confidence the in strong position my than last income For years. XX.X%, our margin target and margin XX% margin XX% the only operating full to XX% around EPS NOI momentum, long-term strengthened. This basis consistently next Ecolab expansion early XXX our over will X year. year XXXX, of we than basis better expect With our XX

like I'd to margin from fuel QX what expansion. our to attention growth Now are to transition long-term and our focused on teams

engines double tech and different and well cooling growth margins are operating our the Sciences in in and biotech biotech, and are data at specialty includes growth will long-term water center area, be development. ahead growing with if High strong a even at each we of income strength in respectively, of microelectronics showing performance, delivering the stage Cleantec, are elimination of Our and Tech, remains Life opportunity. which believe business institutional Cleantec growing huge high strong north the pest is as digits. for In curve what as momentum, X% both XX%. Global X%, And

continues also focus biggest $X.X opportunities as across from at pipeline our breakthrough nearly innovation. renovation XXXX our the pipeline shift and to build to is high levels innovation Our platforms. our billion, we laser-focused record biotech tech and With on Cleantec,

outcomes, to business best-in-class performance environmental seeks world technologies that One the our very progressing customer which around leverage to Finally, well. digital impact growth Ecolab our operational location every is and initiative, deliver

Ecolab opportunity. next few our more current years, One quickly $XX looks unlock Over to the billion penetration

opportunity on early fastest-growing promising is for certified Ecolab. results focus largest customers showing for value customers a total with and and Our great our delivered significant our growth

This microelectronic growth, capital dish unique AI is the positioned the cash are healthy customer On for and like Drapes in QSR the our balance organic With from systems Surgical solutions growth allocate to opportunities. to and us to our centers circular very well many water free program scale flow for machine organic business we proceeds inorganic and sheet strong manufacturers. data long-term of sale position. options provides a with momentum, record and business,

focus In in life we're every future core and position returns say on the water, again a of today. and now for Ecolab's looked digital On front, brighter. has fields to to quarter, the strong closing, enhance unique this generate said acquisition sciences I our it never I'll shareholders.

reducing performance customer and and the share value water unpredictable in and well to our remain operating we and technologies very leading continues our the relevant, growth fuel come. help times diluted increasingly drive years consistently while is put, their Our to energy XX% XXXX customers proposition usage margin especially in where XX% growth to in positioned to earnings in adjusted expansion. Simply per improve

So and support your to your in continued company. forward naturally again look questions. investment your for our I thanks

Andy Hedberg

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

Operator

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

Timothy Mulrooney

and maybe a we quarter. our So wanted thinking volumes slightly there other volume-wise about happening third outsized here, volumes? talk on impact may you're business I be institutional, expectations. in or was to what's about in quarter? talk having above I'm it's that it move to the And curious some them that moving pieces accelerating fourth any was saw into trajectory bit. here you could the little see as It great how that about in of whether We an trajectory the

Christophe Beck

that been I'm that it volume you, where for growth value volume most because regions, how team markets our organic is of selling outside are which your how world growth when has if third the Europe, growing demonstrating best them the Thank look a if which that for managed quite that And the we of sales. the at while at obviously, remarkable we're because in north the businesses, X%, new margins to markets like after And soft a company volumes gaining building to of with market going the time want that of all it's we've in outside priority the delivered to as build question also over Industrial when innovation institutional means is of comes on what's growth place, or have the record most pricing. very team going long quarter. It's I it But of which quite especially especially in nicely difficult to well of Europe are It's obviously hand, that's as geographies, keep other Tim. our been which growing operate. that's we which what businesses the in rest improving and same able at to delivered the pleased pricing, been few X% X% while whatever previous That's are especially but growth is strong, with retaining years accelerating down. And was the Yes, the our the pretty levels is focused obviously in really really share we But and we pleased down. in is forward. with or a the on and have it X% their be customers, I'm same quarter. last But broad-based business execute good. quite was while well, there, continuous the the our remarkable value our either in that generated Europe in terms to been the and in is. the look part most our going we've was call going are specialty flat, volume, that a at time, customers all

Operator

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

John Ronan Kennedy

of or Manav. it I volume expansion to drivers there the ask normalizes, price tailwinds leverage of it shift, X% the is how GM growth be please DPC extent not This to is margin do May pace what Ronan Kennedy on mistaken, that over So would on X% margin as deflation and depending to digital? high-growth, fade to for inflation mix be high-margin Christophe But evolves? to with X% whether if businesses inflation. X% expansion and and

Christophe Beck

Yes. Ronan. Great question,

with said, low expect normal a inflationary aligned of to kind we inflation As growth. trajectory to back kind as well, costs you of get single-digit delivered product

that we've happen to We well mentioned by expect the early turn quarter, as fourth the way as in on.

XX% and in quarter deliver good in about well. At far going a point same to growth, well volume XXXX. deliver has then QX, time, by way the because back point seen historic that the level so as in will value as well be in humming feel on inflection we're as slight we've working tailwind we've we very to been to that ultimately productivity, some used growth, the is and to to which points beyond to kind the fourth as with margin focused keeping you it clearly as pricing past, where to of That's and turning while way as the will well the the QX the So basis staying this I really keep the keep the will to time. we've well, as so expect well And next investing deliver lead in XX% us get years improving basis, over years. business up as XX% XXXX an end in the which to I XX earnings expect XX on SG&A share X we and per we OI committed ultimately on well there same ultimately, at annual

DPC with even feel product back I have inflationary delivered So good that about trends. the trajectory normal its costs really getting we to

Operator

Our UBS. from Spector line the Josh next is question of with

Joshua Spector

I you wanted to well ask mean do specifically continue on to I margins. institutional there. quite

I the look seasonality. to at a been However, more past, there's lot when relative margins

typically first have higher margins stabilized. half the So half, second been the quarter of it kind and in versus second

if kind I you there for parts that a normal could of now moving more you the And the stable Europe? you et segment with is expect made some maybe forward, So product unpack you some changes was some Or cetera. of profile this costs, of wondering return? as do of to reinvestments, seasonality look in that the between margin

Christophe Beck

to I'll after that. few if that question Scott Thank needed, add you, comments, give and I'll a Josh.

Scott Kirkland

Josh. Thanks, absolutely. Yes,

XXX their margin OI in has exceptional. QX, points As versus basis you the last noted, up Institutional performance margin year. was Specialty been

the to basis there. points. in But we investments decline the investing Certainly, talked modest saw we're QX, elsewhere, QX very there. higher that's that point, making in to business tend summer sales really You to like be as are a we Sequentially, seasonality. your XX to in field

that's really there, QX happy QX, expansion what with very just And sequential well. the that to so but margin decline drove performing

that markets than customers we the but are savings and as what said. are given in helping, to labor said, ever important quarters more not Christophe around, our you As do, move

full margins expect for a about on would especially year around XX%. OI I basis, institutional, So

around right target. So long-term our

Operator

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

John Ezekiel Roberts

a When deli in customers? something you leverage this like major that are penetration? happens, for sales more a the your outbreaks currently meat drive as to And There QSR. teaching pivot force a do major at moment provider

Christophe Beck

them we just And it's are at things and when the all happening back never when it happens after a happening to lives. I market. to in And together bring while, time for sad they reach customers almost what on all work offer usually impact talk really It's been us we look to on an happens gone so we've sorry feel and with well new current to as it. so the haven't interesting first. order of every time important so to some really happens as one to and importantly, our our of a And those those out. that question. happened. what it's And from we come our human we always right so that stepped we place. But outbreaks, And well that about That's most it huge customers every our to And through companies, learned remember. services -- customers

is of So the we company. [indiscernible] ultimately, to and to here never term a part a thing, that single companies that guests, opportunity as time learning mission protect right to do as leverage as and join every us opportunity. We patients, almost which come sales use our way as those as the and leverage well right consumers a

Operator

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

John McNulty

speak from in you over the you're converting we and center Or bring? solutions be over centers growth I months? how hoping is see out XX you and thinking was data data seeing to it data XX could that that coming largely and that And the now the How that are value of playing coming about online? next kind to is electronics seeing it that? area your should to existing new centers the

Christophe Beck

set It's Thank very a of interesting market. John. you, end

And high So X% We new and but your markets, global but we well. so in obviously, microprocessors existing try called fab on about AI just When the X it, next but differentiated It's call for of really can is or XXXX, electricity that's generated as of in it but centers. perspective the AI question, production I site It's we whole usually, both, power to today. too focus the They're it ones can about uses actually. Maybe think complementary in production think related, XXXX both. ones? U.S. microelectronics, the different. embed work data end tech, it's years, use same drinking to new we centers to the expected you the India cool by much because whole our globally to time, center or the to of water the XXXX. next than much as in At data we X XX% the AI as the the to microelectronic needs the of require a technology years. as XX% of to design those data will of when

scarce So acute. we world heading were it's just thought way that a with well water we gotten for AI, more

reducing recycles they're the dumped the really offering the in our within to the And water centers for both cooling. that's generating So data computer we're the Ecolab-like in either now, they wastewater the familiar tomorrow, fact was to the complicated evolving. in cooling had that to is talking job it. Well, called type of past, the And you help same will and were microprocessors to use those power well reuse water of challenge. they reduce usage as have because well they the that they them were to with which in that cost, try world in their at are technologies we that fab. is and step chip ways reuses while most that the production which reduce deploying them at recycle good in reduce cooled past, where helped and usage companies, Up ways be And as model. very all the before the were and the dump treat those dramatic every as they chip time of they a or uptime very with direct to to and ways. When they in in water microprocessing high-tech room are centers, the customers we improve do new cooling we it's and that some never do that it, produce we very technologies data the well within it computer they're water cases, process, usage, innovations

happening for business come. years that's likes So driver have data around what we as for we've and built, in building, to teams we created major know, dedicated the of what become because a to I expect and not dedicated very both we're us performance microelectronics that everywhere it markets for really in and centers the world, the

Operator

is question the Wells next Jason from The line Haas of with Fargo.

Jason Haas

I'm curious by expect are driven that some was if in deceleration relatively mind, about I you I curious would other to factors there. was or slight, mining improvement recognized can when softness any there could the is Water comment you but you if on the some if in segment. just there entirely see talk in it's

Christophe Beck

Jason.

answer, gave You actually. the

is more was growth as by water is impacted by be business stable has places. tendency way, QX cyclical, a very It's the to in remote but we not which which lumpy, lumpy. smallest So had the mining, in

You as send distance in long all those products as well. well

So it's they're really and is thing. our it's as not water equal, that's are up quarter the same businesses only reason and the the otherwise time, good trending trend at well well, every a doing which for created

Operator

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

Patrick Cunningham

early So commercial could then what's those feedback and I is customers? some early call. Ecolab out you know of value largest laid initiative it's days, been XX And in how discuss But the One in from prior progressing the focus terms pricing the efficiencies cost on you modest the of buy-in, mentioned you the the but customers.

Christophe Beck

the customers. a question bit and give talk of little more let me then Scott, So the about top so-called to the first I'll part XX

Scott Kirkland

Yes.

but frankly, getting X% that performance, our the with largest centers focused best-in-class teams the that to customers, sales about program. program, really network growth. focusing The focused data launched these restaurant, you accelerating getting biggest but the customers have, much really best the our within leveraging very billion we on pretty transforming way best are very it's it's way just savings cross-sell -- we and after we've like As X% opportunity it opportunity growth, last on the have. on to quarter, $XX accelerates to And to working going, growth, that our hotel, said, we the really we as get incidental this and to after talked really targeted

Christophe Beck

So to that. on be a little bit

it's a of things. combination So X

early as shared calls on, on I've previous well As here.

a that it's for what billion, we opportunity top total share customers. talking $XX has half billion Scott bigger penetrating the of it's really So as the been And exactly so is it do opportunity the to -- have XX within about, we much all of and penetration don't have. $X

penetration that we figure for it's So as delivering And order it's third, to out is invest time. opportunity what's The keeping improving to our technology which the that's a second, well up us team opportunity productivity third so in value the have. But well as it. which but to productivity, priority, customers. penetration helps path deliver that at we'll our to take the productivity, the improve us helps drive while our same while

which largest our plus our So one a of XX. combination XX, emerging comment XX the is for top customers

the in incrementally, them I would we're you. that's selling those get of saying, much with positive the been is well, we've annually, customer very new It to locations, elements: in if environmental can all Tomorrow, a has past, sell facilities, were of ones restaurant units has understand the can your third units, XX/XX well, outcome. and second way evolving. because safety business And performance; top in lot the food you things the what is one the impact. selling all your what one we customers -- operational performing it's a In well, selling can reception of that be unit, the example; the is if way the more the much best saying, performing potential. X new do differently savings and can potential for operation from the at become help very So are been the be your our in future. The first, restaurants, the we are

a driving get way. it for have you X, with and growth delivered customers be translate to dollar to was order were all our the customers value honest, a customers. And add to we in that performance our to you And develop for them deliver that plan approach been that's total in pleased us, that, us that asking very impact, that You approach.

very made the easier, it much So obviously far. customers those early so promising to the sale in but journey

Operator

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

Christopher Parkinson

to in elimination. continue you results pest put up good Christophe, pretty

just Just we the touch business. I margin hit was you were pretty a asset-light a a bit color? any lighter just that's think than anticipating. on Can

there? want to progress efforts? we how is Just So a digital helpful. your longer terms there incredibly just think even the in investment -- would be any hit relative innovation growth there should you on count Is head about margin if color the of rate on it term, to

Christophe Beck

said business. it, It's you Yes, Chris. remarkable a

insane So companies, the organic ourselves on there's almost obviously business, capital the that combination as X. margin, well capital at and that's because same companies huge compare there's high high with low time. we there, other returns single-digit capital invested invested margin growth, being out When drive large return no in only or of high

So are the and we well. market, you by the share a ones it's zillion of way, that easy pretty business as represent the world smaller best-performing then where the as the in are that well, of have lion's large

we've where to term, we're past impacting term. And in as what your what good but X doing, exactly it's doing best-performing So well have. conclusion the that it's for when that question, and all the performance short our combination, do should invest? more obviously business over results, the quarters, It's businesses and that come been we to world at to the in as behind business versus we we easy that look pretty are we that's basically few Well, well areas. great margin long invest

one, in innovation. first it's The

result big our that world million about the conference Well, that with XX activity we is test job need you it the well same X heard and in the need to you in center, there, might in as of intelligence get a well, teams to our those over to minutes around a have of have intelligence, hours order in have business, which done. terms you to devices better locations. done need pest you You've connecting the work get ultimately do XXX devices simplify

better as us, great it's such. a because value and better for for the better added the for So customer shareholder business

to second more around more acquisitions, The to focused world. firepower our one to sometimes residential invest absolutely sales on not better to customers the the but invest sell is focus. it, in coming commercial, this bolt-on And team, our all smaller it third some is is is with in

We have commercial BXB business here, that's where we want to be in the future.

So believe a well, that that the great all more we're for great potential why all, it in behind business That's margin term, I future. has has the long for return and term. on much investing short as but impact

Operator

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

Shlomo Rosenbaum

range? growth kind the we maybe in map revenue this shifting X% put to X% better in to of the of to is time-wise into the to terms to costs, get, you be more is expect get targeted is I better Should to I'm with X% a terms just going bit X%, that leaning be like tailwind you. getting to was we which you more framework going your now year margin definitely to you to be years. resources? the will get behind pricing? material expect to volume what investment in to a trying growth. expected the where Should to to than Christophe, it on declining wondering and that the of XX%, With of side when little next doing looks into X things said raw

Christophe Beck

volume that ultimately, be momentum. obviously. going the of long-term, very going some good to targeted Well, it's get of business. to very time I a to to That's consistent, want beauty That's take And pricing. our there. to get range, combination and It's

to X% pre-COVID X% and that years that be past, seems our X% didn't volume when pricing know the I all the range X.X on and Day well been X% within to was to going businesses, sweet it the see spot. the we we today committed exactly In ago would at the Investor the that is X.X%, sweet X% all where sales in and We we've XXXX, portfolio delivering been think be. to spot side. Interestingly together. on of to is forward I've of to when seems already about range that close talking I as balance enough, be to our our were we at look XX% the

the majority is of I when look at already out growth the So the the in direction. in I humming $XX business we talked towards the driving penetration be that have well, obviously, same before the engine pricing XX% we'll just so quarter-over-quarter are delivering right about going our of opportunity progressing That's X%. But even not the least, billion about our new well to And as keep water tech, that nicely, XXX% high at to but of in important is feel that's range, range to driving, of circularity need committed time innovation margin. good year, next keep why if and breakthrough we volume don't because And in there. the our as elimination, in our help, the we X% as I that to X% well. X% coming to is the life progression get last monetization towards pest sciences, me time, the offering portfolio online well for productivity. what's same whole when value the makes commit the to as we XX% The XX% digital at to XX%,

well. mentioned has as As Scott

big as the XX as with that investing points X basis expected on the to in points I keep One SG&A XX XX while to basis earlier Ecolab we're initiative, calls. mentioned well So XX we improvement term longer categories well to have

progression nice generally towards So the range that to want accomplish. we

Operator

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

David Begleiter

of What on staying that are year value upper in next pricing, of lower being the closer X%? end or drivers about for X% terms the should key for Christophe, band? how think closer and we to to

Christophe Beck

make and always X%, to number going between David, your around It's a life to bit easier. and X% we be that

carryover sometimes falls because pricing X%, don't as sometimes X% have the open coming as year QX it's under quarter, year, in well. well, X%, new the the and it in no mentioned under So there third this either my in have left you had pretty gone as it We for in seen falls but you've well. you

on quarter. It's good environmental better very the I a good the not us. than the the our for So the a get sure based we it's will savings outcome, as and for X%, deal TVD, range, always delivered feels since of impact. pricing with now, that that that we that new I've are to high good the want the deliver that, the number side, many just about kind net-net, as for feel can very And customers, that obviously times, good going value pricing our business drive few higher pricing closer we operational under as customers. performance range. way we in within the I very in of upper it's operation, to a we news and thing. But total have sweet mentioned make for a demonstrating that try, delivering, that deal it's and which TVD we're I we stay really is that is to is quarters our that good the on as that, like so spot, The lowest it value That's be. The on be feel case. mentioned, X% obviously, But this to can belt

for feel I and run. range longer that the it very about in So really having getting staying, good stable

Operator

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

Pavel Molchanov

not sure I'm on acquired thoughts front? but since are that you've XXXX. your year, latest this divestiture a M&A the anything had What You

Christophe Beck

too don't on we comment much obviously. So M&A,

perspective proposition Obviously, lumpy by can't But So in it's share advance. let plan some too on me much design. we that. a

roughly we great the XX-ish smaller, us, look XXX of ones. a track transactions, behind So we years bigger record M&A. If I did have at

So very high how get really really, well of we rate. to a lot a experience with have on success

but not very technology, time, been The the that strong strong, is second high my point our the in we've mentioned great we a areas, XB water cash a I've a mentioned is technology. is as are in technology. balance place sheet opening, focused all first very and low And balance for nurturing point M&A the being leverage, very one I on very pipeline years so basic sheet. in flow, continuously healthy perspective, third the great from very

third and Second, it's tech high digital life is in and science.

big X the are those So areas.

I firepower. the what's so can't that good we're in third, we make in, much we're company. opportunities positioned would ultimately to terms happen, for done going and capture what So the in with position but to comment terms of that shareholders for in we've best the on sense And feel have, past, whatever of

Operator

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

Jeffrey Zekauskas

range reach that anyway. bottom in Institutional years, in growth you your volume would to it or terms X Specialty there And industrial was at and you XX% volume or target, matter, you'll in X% were doesn't of to longer-term you do if to at X% sales X? growth and to get the your top Year-on-year, of be the margin need X in close close

Christophe Beck

to a be good at feel all very continue us. I the good is this I've the if objective so the on XX%, X% a really we for X to We track well, X% obviously X%. so place get XX% as as to easier our next would be get to around we're keep we my X%, well the is which X% earlier. getting to not role about well there over accelerating but plays need to reasons to but this mentioned in top were X%. We is as that to don't than obviously years. want the now, environment line

the If close to XX% very you next with that. year do the you math, XX% get years, X the by for to

Ecolab as the other next the an be the things well We to few get and going mechanically. few like from there are One pretty initiative, a how know external years add You all you years, really Jeff, world that next in the in well, I good, done about as delivering but react perspective. feel that past to going X as We're we've earlier. as to mentioned

Jeffrey Zekauskas

And growth then the volume question.

Christophe Beck

volume that obviously to on X% The X% top is the comes XX%. of to to get X% to this get X% question, the and pricing Anything growth mentioned, that -- help quicker. X% to or on get there within value to as X% will case us base the is sorry,

Jeffrey Zekauskas

was for in Industrial the close I'm meant X Institutional to I and quarter, sorry, close quarter? the to X

Christophe Beck

is Year-on-year, I'm the north X% that bit Industrial in here Jeff, X% -- and QX. bit of of table QX we is had a Yes, looking well. just INS a in north to was at understand

Operator

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

Daniel Rizzo

about cannibalization you've on It's does talked Dan how about all? wondering ever technologies talked some And Rizzo index just guys? ever for you at if much new really you Laurence. was of really existing for I if if products, the vitality

Christophe Beck

the it's especially been So sales one the our most really in growing at and the very that breakthrough the of that is very importantly, don't introduced pleased that. really products last the incremental That's the but plus number, using innovations, objective It's this and on are we've new with cannibalization, vitality that offering new products over so long XX% years. definition. increased it's have. margins, all on sort our side That's disclose a the we and within index, focus and the way time. market innovation coming with it's And we calculate #X around a X it, of high, we

Daniel Rizzo

growing, -- next, the it's or years sales for out say, target? your laid guys growth X with you've XX% If years, is there target X the have before you given a over what

Christophe Beck

ask you sure understood your I again? Can all right. I'm question not

Daniel Rizzo

Sorry. Vitality at XX%, but growing. index

is growth is to the get for sales it what mean, you expect higher? is up Do or -- to about think of Index? should I Vitality how -- from -- your XX% target targets, north Or growth a just that I there Given here? we

Christophe Beck

be to north XX%. It's of going

out number there. committed a to haven't We

and shift our provided of well we that made. existing big is products the was XX% as a to important we've that customer. me, in it's here just So offering innovation mostly for quality than of because the more number. this renovation The past

we for manufacturer, breakthrough reaches that of data Now their well. pipeline, best-in-class I for almost of at microelectronics is performance half call a level solution performance shared restaurant, an record innovation. sure center, as a making the is brewer that for That's which innovation before, for what end-to-end as or level, a

in line driving top and for the of our performance way our customers our at same So well margin more time. of as shifting driving terms impact innovation the is and most our importantly,

the going XX% most to to go So much is going the of up. the pipeline But be importantly, quality better. innovation is

Operator

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

Ashish Sabadra

of year the was investments capabilities wondering like 'XX just pricing in the I in think service volume terms as operating the growth of and also about or frontline we but tailwinds growth digital we fiscal benefits should technology approach how efficiency.

So any incremental color?

Christophe Beck

it, mentioned. to that So X over the well. XX% via people is obviously more it's OI years the helping so towards street, efficient way is get X% at more power, to as us next the best components. it the One it's about obviously, X Ashish, margin acceleration the And the as our to fueling X%, think sales doing on

years we shared bit to still the to in about on service digital our with little XX think it's to that. improvement SG&A well capabilities early its sales to of as points I initiative Ecolab in do productivity basis come One of you technologies; and a you Second, a come, the well little and we those driving years well. But here. make We from is XX at points important growth a what's why the as the that's third, numbers bit heard that net Scott improvement basis like investments in XX while getting time, the XX as same productivity investments while

investments we're the So making. that the of is improvement net

XX% get next evolution X EPS in with XX%, time, same to So the the you leading us the good an line XX% top and at years. over line to the

Operator

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

Kevin McCarthy

hit Sciences. you Life if us relates button Healthcare as wondering for to was I reset and might the Christophe, it

So beyond? you've sales prospects XXXX divestiture, how and the closed and characterize you now would for growth margin that organic uplift GSS prospects

Christophe Beck

Sciences, well we're business is since and in close X with here. after a very that businesses, those going Honestly, as Life they're that small leveraging institutional have I'm It's especially as especially the to the having that So as with X you as said, the United same beyond different team about businesses. pleased very we're reset separate in divestiture. and Sciences. evolution Healthcare force, Healthcare the the sales you well pretty Life well XXXX to more And becoming States. the clarity

as did step -- improve with of a business. new So you profitability business, the around it's next place. step that on first We a the I've was shared we journey. the build want health smaller proposition to where cost to the instrument right the as reprocessing driving And care

is and of prevention. surgical Second, infection bifurcation

instrument drapes build sale rebuild reprocessing the for Third, surgical the fourth or and the business to to is of future.

our it's going in with in to to smaller still, on business. nice the in the business to low going We build to and to that, a grow single expected really going the come, but be have digits to we're base a on that driving more be to to business, margin. Europe start that's base and mid-single come. But quality years years

business is more like to we're margins that lot that. more the as business than at Well, it. think a I close the great that not industry few be is Sciences. understand in the transition building I've which this right in a been as that end we're of bet the much we're years. booming second, as I when after and all At great It's by a like X that this I the like XX how we've doing, making. The look since phase to better digit. we've more next billions. We're so which double feel get I billion $X that grow The XX% business, seen so other XX The of the the in range, to But love in I made we're be more XXXX, that towards XX% if we're progress complicated certainly low so depending believe doesn't most is down, is X I a going an is to on the in it, me bit important Life investment more building while the well. speed to to well. And expected said, next the be And generally, in COVID. We've also going there, today, was market. road. of what to business make that opportunity but at it we've should look now competition the ambition the market. down trends years My slightly. years a well, to a than a there, growing the was we're that XXXX. I out in way, it's been single going companies business I in at good, business. business But that

Operator

Our next the Berenberg. Castanos from with Andres question is of line

Andres Castanos-Mollor

up health on care. following Actually

that that. consolidated a and margins making despite XX% expanding are was just business margin quarter-on-quarter You you

you can turning well So that gone is help around within what what has us and Healthcare? understand

Christophe Beck

combination was So a before. Life the mentioned were margin of about Healthcare Science, talking you as and

businesses. One serving it's combination very the pharma and biotech, industry X obviously, is is well. hospitals which as So of pharma different one a and is other the serving,

today, if breakeven of that. obviously, have at So drapes, kind I a business knew is of -- look care type surgical the health of our We post so so sale we'll business.

So no business. it's big Ecolab surprise. But a of type institutional-like very

right we're get a how and I to the to a So X% requires But to going like place. this less investment and get get company. where the again, we're we to with. to is better time we're And going the playbook to some know right than it's familiar place. It of work, that place.

quality very than want in we being a small one but what had to past. have much but there, this the focused smaller, really it's more we business So over

or capability if the investing capacity at now expertise, in well, can as on and to well. On in that investing been sure with businesses road down market other we more XX the built we've in that in many we're we've in so we're side, as big the we're as so ones technology but aiming margin conscious in that how that's as well, past, make compete Science the X not Life to than of the team, truly X type closer on investing

the in really Life highly So very Healthcare building dollar as and years Life the come. a will multibillion science to Healthcare which small differentiated business a years quality for really and focusing come road remain in Science. on both for focused building to maps, relatively business,

Operator

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

Michael Harrison

And I'm saw Christophe, in worsen drag to any hurricanes that Can quantify on that you QX saw any and or would the whether you curious about Specialty businesses. QX? you impact expect in be recent you similar? or Institutional your

Christophe Beck

come to don't I know obviously. Mike, QX, going what's in Well,

the impact So But those we've we plant at I good heartened in Asheville can't broadly, I'm very that. talk gotten our about events obviously that had with as On a human more of and teams yet. happened haven't situations. well. always

not recognize can on for times deal them. and from chain the always with And impact, we our out happen with never supply with as in chain that out you a so world, addressing normal extreme business whatever supply have company supply as good our of You've only about haven't side. We've that team, a there we could risen organized that range, a levels obviously, so local perspective, and around in chain in because single them not be our the of pleased in that's our has well. happen well business tomorrow, China, in we better place whole that third team in them. we I've whatever there there quite well. advantage but can so In the every producing better a perspective, but I'm news We've sales that perspective, from become in instance, situations of anything pleased a it locally. those especially well today such been But been are locally obviously. our to didn't as world-class way there's dramatic is huge human the feel performance it, heard huge a ultimately, like I much markets more XX% assuming market XX% as a evolution so become resilience used When that quarter the resilience ways. And has it's them past, a day, are competitive extreme environment let competitive even it's the for with really a team. for something in down. has resilient, the advantage seen in the produced think customers

Operator

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

Vincent Andrews

the or last characterize in whether new think about wins? increased wins it's better doing I gains however, time if them think maybe compared of share it would is you of sensible, beginning about of pace wallet you you, with are you could business this Christophe, new you the with your to their share or year, Or of acceleration? is business gains, more And share wallet, more market ask the or how terms year same?

Christophe Beck

a that's to are I a offering. of goes market competition we we new today. those together share to definition. The on when well use applications it example as data recycle. we and it have bit from have share that But get centers giving incremental do increased of an Well, we're before customers and try where because was taking wallet microelectronics not Well, well as by type

retention. But generated they which we being our are by before, an healthy, it's where share So our demand billion is well. anything, big that that's I many focus markets I well, is like fact sale, as line the it's from if not the is share, is were that there. One because incremental far. is someone sales are not the so where of buying competition a out else, stable volume progression In a the kind mentioned accelerating, lot staying top that exactly wallet have, Ecolab, part of improving focus our that's XX a of those not gain which obviously, we because

well us before, the as same well good it's down indication come our the healthy That's very mentioned the as future to at helps So time, for good new well sell stronger improving as well. what's well. to as for me, which time. And share is as if road. And gains our at our indications business are ever over than I been look generation, pipeline, innovation a as customers for

good good business those as the leading evolution indicators last and a share come with new to the XX perspective well gain indication for from months, So to XX quarters innovation. and of

Vincent Andrews

materially other leading in terms One not the than of indicator? stronger is

Christophe Beck

good is get There's well, business of so if add as to new the that. innovation like new But that both we business, I them you is can them indication record maintain very thanks pipeline and same was sharing both the down separately closest, that as to that -- road. the have some our The are a the and levels measure you at just that's before. momentum sales the count But say accelerated don't we time, you obviously. at fact can't whole double we

Operator

of from Charles Our question the Sandler. with comes Piper next Neivert line

Charles Neivert

pricing at a are people energy a looking effect higher drop One, in them couple save value a have the and that a offer quick fact is bit savings And bit quite little on sort oil affect lately oil for raw raise otherwise drop them I than an dropped meaning you not ability that gone, more. Just standpoint, you terms the but there's can bigger. material pricing it may of has savings the continue side, when and the things. will of to on know to that might your prices, further of

be So therefore, would bigger. price hikes

that's specific? pace? slow. Is know you talk -- how economy bit raise can better happening imports? it problem far is So anything that or about will Asian sort there little but in anything sort at it hindering in of Europe favor? your ability you of is specifically your there in this know the is a as -- at your a can terms of in a any Is specifically change secondly, can pricing? And is slow, change Europe we We obviously, And to of it grow it's

Christophe Beck

different X here. So questions, obviously

delivered, the where delivering first happened the best Charles, net TVD us, them, our value costs strong before, it's is mentioned tailwind material this so TVD, to raw the pricing. minus to still total customers. well, months we delivered on for were value a some for indication and we it's so last what as much pricing positive. because are XX XX if in Well, very Ultimately So price

usually demonstrated X years. And what So for the over well. works customer, it the last that's we've

generate cost we whole So of as tailwind, the sometime product in here. discussion important, pricing Well, where delivered we've even that at when environment obviously, becomes is in expect pricing demonstrated headwind to time. even be more QX. in we is value can a it it And XXXX, same value while an as certainly, the well a

few value years the we've because the in the environment to come very deliver next been strong delivering something from should more it quarters value perspective, in one to and well easy. at able good not easier never pricing it make difficult slightly reasonably pricing but it feel a in I it Selling So future, easier. in pricing DPC harder, is make a should

because really generally, saying I'm be careful that So we how to as that's volume I so time. But a feel about have good well I good XXXX want why growth.

probably steady going We a pricing. headwind. DPC value have become as to is

something very We good combination have practiced good us place puts that X no productivity, last XXXX, years. over matter all XX% the in is in a what, deliver together of XX% the this few we've to but to which

So keep and we know it we'll how to going manage that, managing forward. well

Operator

Our Scott of the Schneeberger is final line Oppenheimer. with question from

Scott Schneeberger

years, a dynamic I as just inflationary get Christophe, and last when this I'm quite how you that or see the of little all about X really had and it X those was pricing, been first I'm anything competitive retention really with ask on to to that environment. about did on was want strong. the for is to you influence years. of ago a continue increasing bit. you is a perspective started now. get curious, over environment way you volumes picked unique proud had really looking but mentioned back pricing may question, just I to you how the currently And question, look-back kind were But as up which imagine well? what of improving anything retention a little the discussion years retention over couple

Christophe Beck

same been is know, it's driving XXXX, stayed the a very been there retention years, changed COVID as or higher well. was in long at few which last we years as The have retention and to company, hyperinflation which rate, pricing hasn't since was of as time true the XX%, for We've kind there very the similar close a the extreme level.

demonstrated now is most really which that's in extreme the our the good been approach feel So I over about of years why situation.

absolutely more what making and delivered, is pricing value get performance their ask better total own operations more perspective. our ultimately in better delivering by sure better customers than on impact we focus that a savings Our outcomes, from

thing company and as very a thing net-net, for for them ultimately and very shareholders, good you obviously. a So us, good as a

volume stable, at very well same time. strengthening, strengthening retention, pricing So the as

very of So kind drivers balance a all of here. good

as momentum our which we're is and delivering driving for to really get ultimately years ahead to know in at across EPS I to day, and XX% the as the time always geographies, Europe and and that well Europe XXXX being the we So margin beyond company, tougher XX% a as with sure with the win the very making Tim end businesses, we I of step, improvement, can It's place. as half the be good shareholders. living across for driving at XX% mentioned have heading we well, this where That's my broad-based to OI this of margin. the going that really case. I've good and but beginning, life feel to of for how beyond the same that the feel XX% is the grow been already growth. focus productivity next my for all about the ultimately, benefit there at

how would I in would it. that So summary, be at look

Andy Hedberg

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

Operator

and teleconference. does today's this gentlemen, Ladies conclude

you may Thank your You disconnect lines your time. participation. for at this

Ecolab (ECL) 29 Oct 242024 Q3 Earnings call transcript