Ecolab (ECL) 20 Feb 182017 Q4 Earnings call transcript

Greetings and welcome to the Ecolab Fourth Quarter 2017 Earnings Release Conference Call. At this time, all participants are in listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Mike Monahan, Senior Vice President, External Relations. Mr. ahead, go Please Monahan.

teleconference, of everyone, and me actual to a Ecolab’s and on the estimates those today statements materials, Dan Ecolab’s referencing ecolab.com/investor. of differ A CEO; cause these Hello, earnings at with conference to are most and could slides These that this actual website outlook release form Chairman fourth materially that to and cautionary our are include call. moment and slides factors, discussion differ discussion CFO. our With is our recent quarter’s the Schmechel, take described results and of are you. in read stating the along materials. forward-looking results Ecolab’s from performance. posted Item our results welcome future under Factors the risk quarter and our XX-K our Thank Please Doug results statements projected. on Baker, available and could XA,

also the We Starting overview the sequential quarter. the brief thorough per earnings and a with the diluted of information acceleration supplemental in Ecolab’s continued share to release. sales fourth earnings show you quarter, refer to

lower along fourth per tax in earnings investments interest our product quarter’s with These, adjusted and the sales and costs in gains, delivered pricing business new adjusted more increase. adjusted gain. offset our the business our share XX% work, drive sales than along quarter all acquisition higher the to ongoing product and Continued income with fourth expense to yielded rate, fixed our drove gains, business innovation The growth currency lower work segments. cost efficiency operating

North for fourth adjusted charges Reported currency decreased the as and XX America growth the from sales offset Acquisition and as from more points. Adjusted On press delivered operating in costs in both fixed quarter diluted Adjusted income with points tax earnings along by X%. lower items fixed acquisition were income fixed gains was currency adjusted and fixed increase sales XX% and interest and volume XXXX our adjusted highlights basis rate, per XX% than operating rose share operating increases and to adjusted share. The increased years, fourth special margins segments. margins tax an increased operating Consolidated product of quarter price release. excluding quarter. discussed yielded led all basis by gain, some currency increased to diluted $X.XX. basis, adjusted our expense currency rising adjusted in discrete per quarter, Europe. Moving an earnings XXXX XX business

We cost at and business continue our to well innovative growth, service our and efficiencies bottom lines new as improved rates. to driving drive sales to new work products aggressively grow and and top winning expertise, as through pricing

also We pricing income offset and underlying see segments, product our business operating that good stronger significant and across and sales look more for cost than continued volume and continued yield headwinds growth. delivered to

continuing and growth. income earnings to second exceed operating year look for yield along work significant expect to pricing delivered with cost the better our We accelerated margins product growth and We and half. product cost with accelerating a and headwinds XXXX be innovation strong efficiency again through

half. to expected investments systems outpacing the the XXXX impact growth half, to expect earnings product the to and adjusted costs earnings which range, half the to expected a are larger delivered XX% share with impact higher first dilutive of We rise to the per XX% second in $X.XX first have $X.XX reflecting

to improved momentum delivery deliver than saw systems diluted range, are through fixed summary, with and up to in offset in per quarter XX% In that the and to business earnings good sales growth to costs XX% in expected X% share acquisition margins operating as comments. some expect Baker growth. strong adjusted XXXX we $X.XX XXXX by and earnings share Adjusted $X.XX be are We per should realize moved our lower first now, product higher diluted Doug we pricing here’s stronger as momentum improved investments. currency with more adjusted expect growth to XX%. And sales

Thank you, top touch headlines just Mike. I as on level or see some it. I’ll view,

institutional So, was clearly, you as it, strong, got And better Organic up Also, strong, pricing is well. and strong, sales improvement, catching is pest quite to the widespread. rise. improved. business was when is energy the was at better. Industrial quite getting look and better

everywhere into see So, forecast. the energy, can strong plus results moved improved which as the pricing including you board, had column better the if here, finally across you look we

we more you same the into of as XXXX. look So, see the

we very with a globally, but continue if until in on expect QX inflation really XXXX, raws also not a at good macroeconomic year-on-year easing to environment and expect all. late basis peaking We

this, also we see see good our we So, on while side. things happening

continuing also the We pricing, half great business expect momentum given in continue solid had the We’ve environment. XXXX. to board. productivity the across second sales inflationary of And new push we’re to

So, there momentum continue. is believe good reason will to

our platform, launches institutional have which We starting to warewash major including new improvements. underway Smartpower drive is got help

significantly also infrastructure technology and in We invest in technology. customer-facing to continue

We So, double-digit the excited quarter. year each if for up, you quite we add XXXX this about EPS what all means results. and this see for are for

of which a Equipment other we We’ve divestiture. got like impacting overworked. the thereof, the on certainly tax. things is this major forecast this also guys change, Gulf often driven us, if good hurricanes performance. or business planned absence by Care a in number area FX, working underlying Hurricanes like for Houston the We year any are the are really But again. Now, of a ledger things for don’t the our look have side really you strong underneath, favor, have

the SAP once but up is And have real going are and in headwind another it smart Raws this cetera. expense is it to in one-time a stuff it’s the of to This takes of the goes inventory system in, put it’s expense. one-time the et running. have America because around, install raws. extra of then, We or amortization this -- It’s really things a or be the year. do moving North the away system terms to and we expense; this isn’t system, cost

We price we’ll to margin accretion got will realize recover offset that we But, to grow gross even know our on before we’ve margin basis the way. them. We believe coming year-end. incremental are raws

performance net these very out, all you If we’ve double-digit strong underlying got well. as

technology on we’re So, a doing is what last digital lot and point, we’ve customers, help our a quite been learning exciting. quite, work to

by we and we’re the these. world making our progresses advantages So, huge in with have customers leveraging digital real

optimistic result, very optimistic the I and the program, a about remain very I but years year, as development optimistic So, about our come. about also to am really

So, that’s it Mike. back from And opening. my that, turn I’ll to

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

you. now a We’ll Sure. question-and-answer be [Operator Thank session. you. Instructions] Thank conducting

proceed first Markets. question from line Gary your Our comes the Please with RBC with question. of Capital Bisbee

it, year? what we do is the to is And us is afternoon. I’d from these Doug, investments? down quantify take love incremental the are this Good achieving how strategies, guess, much your timing about Thanks. of guys. from Hey, what how think on those meaningful really payback going what -- number what’s into I business investment of And drill investments. payback the on and sort help the one, digital

in investment. of ERP in We’ve system a there’s number regions, done think, we in I new one, of this mean, in couple look, North of number a mentioned levels putting America. Well, countries. I we’re

America rolled have we’ve you we we this and on financial lot North have it out, already this news a unless risk. the But, we’ve in So, of get time We spending to take launched, thing takes is, unnecessary experience. to platform. XXX% done, our closed good month. a of want The backbone

We early about also returns it’s I running. are on in the have and and would been say quite favorable. American this North XX% And warehousing production system,

going So, on normal what it’s continuum installations, call just which impossible. the painful to always we of know is really to I be

to going these the continuum system. payback? be old on difficult. Well, replacing are I we’re that things think, a but better XX-year the of side What’s always look, it’s

year, probably about is additional, we the about, say, That leverage we I significant would hard type in we This what out to parse certainly than this further the how to, would got and talk as this dissipates an see better to will that’s our do I that visibility stuff. yet ultimately year. is year. ability we total. to what expect seen. Hopefully, to nickel works. year that through go this. of one-time exactly do the rest will not and you’ve digital of this the be going that. throughout be we some a around in next say, business, repeated of It’s that be go That’s don’t But, enable expense in But anticipate expense all upgrades our next to So,

to $X.XX $X.XX On we’re last the year side, another year. investing digital this versus

this over the total, year built you $X.XX six probably If rate have been about in on in run a And basis. go we back it’s investment really years. last

I super think, what And been would call money else think what rules. accounting what for line very our is to this get does data us. got We’ve size do nobody are can a R&D not think up significant our increase this it of show in the I it belongs has in But, where And because probably smart is enable advantages a us R&D-related take advantage to at. access in expenditures. world. really digital unique I of it’s designed that to I

to always talked them over million X X Globally, count million. we it’s over have bothered up. we we’ve a So, X.X never accounts; million;

them connected today number We’re the too central to cloud. in now. collecting We’ve doing created group, over cloud; XX% a customized we’re them but things few right a are data of we’ve of of the

And to better anybody and ability data. we’ve the unique team else, upon take action actually I learn. because a would we say, it got to what have we So, knowhow leverage than field

in after candidly. success start stuff. ahead you So, assimilating this and it’s the translating this accounts, have And where already getting area further fewer because quite is are industrial easier into we to

they two wanted that of it’s counting energy learning a now, water. what that to wins. go to for to and led that’s big, deals do look significant way They’re years a leading But, fantasized we to able big So, look be can I it’s charge, on and what for of have the not we at think enterprise at But compete price this want just we number real, because counting new taking they industry. we it, are we to would already don’t could are ago first.

in invest translating of a be take already is as is And additional to into to started out happy right in that’s adding energy, we did because because difficult going away. to fuel of it’s have continued this this FX, damn stuff principally But, success in of we that’s come we’re spite fire off. So, years this, business. we to

think bringing that or the follow-up don’t costs, remarks your and a you see above QX posted, just quick just of called If some step back beyond prepared on you to or revenue margins? about the But, ramp cost out, a a be, does that incremental down know, from just And should I QX, energy corporate think on. margins I year-ago average incremental we margins, we pace, rise at do color? any Thank how you. nice start lap

to No, quarters. next to ramp our Yes. significantly it’s going up the forecast four over according

seen We it continue to. needs now one, I was we materials. we go two, think, raw got and in pricing; pricing because actually it we’ve up you’ve will because think it, of a rekindled and to That the recapture and XXXX. we gave improvement talked down turn need that inflation sequential during lost accelerate and and

pricing be best raw it’s year-on-year. we the but below be guess, equal. way improved think, it I it will going think in still the QX net about increase So, about is, QX, to will to be

will QX talking will, accretive. dilutive, And be half neutral. But, be be will where second you in ratio. start it going are EPS And but then, year. just you about of accretion if in are expansion So, start and fortunate, to we’ll seeing no seeing -- the start pricing this going we longer, raw if margin to energy we’re I’m will QX it the

I more happens it think, somewhat the likely that’s in what raw than market. depends on obviously that but

is of Chip Moore the from Canaccord. question next Our with line

you the going impacts Good there to big reform the and specifically, end years any demand in the over on the obviously headwinds FX see to way beyond customer tax past tax. on other tax Maybe terms on of benefit some guys? of few

go. customers. too things or But, not would we in to cash any signals, I demand to made and the from globally signals, fairly specifics responding economy bank early would expect they’re that I being and seeing investments have say strong say, the U.S. are other driven are Typically, in about we that

on will expect go capitalize we as areas So, that some I we would move in forward. see will expansion that certain work to we

bad it’s do they they when have will to it. that We hard our concepts it’s because So, say news. cash to like customers grow, to have

news bad is So, there no here.

up just question. follow-on on for that Maybe energy, first one following

out called think pull forward this I small you maybe quarter. a

and Just talk size QX. that in about impact

XX% that’s organic, don’t Yes. of I QX, rate believe we business. would say, the that run

often, pull this So, pull up; I them one I would down.

it’s QX And bad. in is we I more this for digits. we high about to it’s single realistic what think mid experienced digits which rate single that isn’t run expect upper energy, year,

was not as much and on year. that of as came it pull it quarter, this a fourth the was things so, And they forward them routinely really one-time come a capitalized along along in but we fully bunch

not business from a bunch it’s So, first stolen of quarter.

of Bank from line with David Ridley-Lane America/Merrill Our is next question the of Lynch.

any product see lines. and traction tailwind business the after-tax It if income. sounds in the growth are picking U.S. in started core with on economy refocusing from you’ve already the some institutional to the wage Wondering higher up also from that you getting

the in traffic customer survey had up example. December, tick National think, Restaurant for a Association’s I

to tough that It would Yes. be for this and ferret this out quickly go us early.

will can’t I really it’s hurt. that we certainly and a So, like say, trend

seeing, an I that would are uptick We business broadly. in say,

terms know we certainly thing. That season, same better. typically had as say early execution. driven But, data in and public feel to Retail It’s for well. know happening the the it and like. of restaurant us traffic by in with very the spend is on restaurant read holiday I what’s little any have traffic of good units, we’ve we correlates customers a Some industry would all that. a

sit it’s very It’s would we dormant because stayed expectation we expect, most it here, the can’t I to X as moving, improved on have money, biggest we focus business, for U.S. the really and our first makes long. that versus afford institutional, thing So, X. and

goal, sort a throughout in I a is and quite maybe think the the a expect QX improvement and of public X% QX have the rate move run overall year in We at our sequential which achievable, to business, U.S. year. or improvement better versus same the it’s on even to And going that leave segment. significant

And ask, closed. been some months able then, on to want that GE you Diversey a since to Water been disruption? Have couple just and the it’s capitalize transactions of of competitive

exactly know our root the never the is. doing you certainly Well, what industry. to welcome We normal party are

expect. And so, we’re working to what would be quite aggressive. It’s you

and is and in programs are particularly and in actively in constructively, our success. working and So, where F&B we F&B water together F&B success. business, pursuing They’re businesses. We would new have in to have the quite are energy expect huge our place to space businesses. water our having our institutional That there synergies between continue

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

is monetize the place customer? about on to it, just your only wanted proposition was this I to curious, or all can and the follow just that up I digital value future, the you talked data increases in to the just investments. get it this you like more that

don’t even Whether in we an is, valuable At and us to overall answer or don’t make to of know. us we ultimate more the stream know. I customers. going to helpful income that monetized or position be monetized it exactly programs unique the it’s as sell, gets guess, part I minimum, a it’s

we think, is, happen are go out, we what can a we learning difference. I it’s know start making a we out what know we we make and starting episodes and doing in out where will our happened difference we and here, can other do

can or the best-in-class in certainly things customers, have brew I As now or areas let’s other willing water a this plant, mill in aren’t in the to ramps do make difference hotel, to either can [indiscernible] beverage you pay efficiency things dramatic at past. maybe visibility in ways it’s mapping would and to steel journey usage in We’ll globally off spending if those for. beverage at well. we their a within because efficiency the a helps going in pretty in restaurant liter do frankly And minimum, hospital. get the they’re us capitalize them patterns them. customers, the these of we be But here and start that, expect a And improvement for if you produced, hey, day us a say, will and consequence many industries. We ways know X things it that’s It’s per stewards money. and happened small a industry other on a really our their down and and learn more enable some food and liter to to about can to that to for as better given significant for just make understanding say patterns provide other

mean I create lot make value for ways of a there’s to this So, customers.

we we paid our going do we ability Our value, is that. to for history, create it. get enhance this when to know And

sort maybe for and of just you your Europe, trajectory update on just next in And couple view there then, the Europe of years? in the should could on generally us be maybe margin what trajectory the

go when we ‘XX, started year. a we program reach hole to for margin in the identified in really flat big year. launched basically XXX QX Europe year back of hole this sort the to we back off was of flat and points and Renaissance If had Yes. climbed We out target that basis a a the the we

move time I back believe since We’re still XXXX. we forward. year we up dramatically this of over track in the we first be announced will quarter on period of this And as

still to still believe X we achievable. there quite started X,XXX out getting I belief. margin, firm that’s points; it So, identified XX, at is We so

start arguing most and We’re we but from single to that digits there. carry, We’ve will now. ground have of ground upper then covered left

line of with comes Roberts Our UBS. next from John question the

follow there. on Doug, just to

was there? were institutional sales going what I on think, in in quarter down European fixed the currencies, you said

chains say because three that we in that four up we would because want levels. those it pricing are I going times. you our the would done we at some I have to of execute category, in think fold be for several losing business already simply at. lost at and say, price the out was it in I was been this of that that There We’ve years ago, put compete didn’t Europe two don’t to back through ended can

we’ve So, dealt for something this decades. is with

we times We us. they to position P&L looks understand aggressive at their I but loss of a are their And don’t who like view have quite the competitors cash or math, price. on it it do

unwilling business loss done that. to a We price do won’t to cash are We protect; at we’ve business. drop

We will point do is we and the blink say, other coming out now base while. And things, for is it’s been where a of but fairly quickly because there it a that in forget just it.

expect slightly positive year be and next the year. to for We maybe neutral to QX in

think the competitive a of your competitor from you sold? that’s Do dynamics result being

been it’s I Well, been ownerships a pattern five honest, be mean and consistent. to under it’s

So, new will we be say, always well, perhaps philosophy. pricing a owner new

been far, a wish. unfulfilled So that’s

always know translate don’t before it’s still going to been I we’ve and happening. happening I’ve I XX here, dealt at XX So, for, the what’s got off It was with years. here. XX Company said, I’ve

So, my expectation is it will likely continue to happen.

During of quite and period are competitor that price share, aggressive. expense including the those time, every we’ve grown of at who

their some handle in it the we will future. deal has go got say of just done it, just of got camp That’s would in I the to with deal So, everybody we’ve the put stuff own we’ve with, stuff. to

aside, hospital your up fit for strategy? valuation business sterilization that its product Setting with assume really put well sale. I J&J would

This an why past, of make has it’s central important the to forward. say going focus one I that for sale. is strategically in may area and the that that sterile But property about specific and we’ve certainly, be area not been comment areas a I’m or may on our not don’t -- going talked any

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

So, questions. two quick

there? and force or you’re a to R&D, update First, is change an year the strategy the And around each investing of changing thoughts sales sales seeing could you Asia the your your volume tie your of for grow digitalization of grow that in rule you can secondly, target? it force thumb targets bit fast demand give for trends into in your growth to how would and terms

Yes.

guess, to We get price, two digital one, value a efficiency. too. our i.e., I Laurence, you you can is, might customers then, So, simply priorities better want lot get to find improves a to at our ability in That’s third, go makes Focus we’re want trying to first. need our want way side, easier on deal technology we’ll Number for track it just access products. it you that And developing third is focus and drive drive order. a out information focus that one. enhances critical level. it’s field shipment, with, easier the and going for and you technology go job our customer the this a making to to by to on And team specific use it go do develop the

number of go we customers. have You our value can get to to first, buckets, loads any one projects with do do we these drive we want under what of That’s to use priority. want But, them. this

can As do. upselling, -- But, consequence things. up we’ll a changes then really helping, really can technology, spend our them less is get that humans with that, yes, get doing goal, that’s effort. only to augmenting they things the doing of the some time end more more enabling with field because lot training a and done And first what it and

initial It imagine want feed it so, we’ll yes, yes, of if that the rest grow. And, points and go a of can. increase the And that and we continue to certainly feed to you that that stuff. of how number continue objective supplant is And next we thrust do team drive thing Asia right. to if hot demand, there’s learn almost value, the we be there, is that value, top-line we the is to to doesn’t and the enhance out technology enable leverage where that going from it’s we to we ultimately, as hard proved create that’s I’ll our said, Asia in as How would you really But there. use to true. to I the capacity, do do I not would sales translate? say,

the in Our now will to struggles F&B, starting in of single that to we continue believe some as do heavier go high grow through, we the new and the consequence the had things. industries top as in year been portfolio double a a we of other line digits either steadily in quarter, China institutional, fourth growing in bigger has expect grew to parts very as digits. China go and become we eclipse, and .It’s of regulations It at we it there. bottom next business and both whitewater these faster growth forward or part

are So, disproportionately. feeding that to feeding other Southeast that Asia, of would supplying it. and do is Indonesia we’re say we’re a there, make we as Demand in quite meeting up areas number good we’re and we’ll continue I we markets to sure forward. and to we’re feeding And move that growing want

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

is now on healthcare Doug, been Can looking that year healthcare, Anios. acquired business? And growth for on about how Thank a overall give that us you. at are update how it’s XXXX, you in since in progressing? you an you

we thought it within look, it I to is market’s what it -- it I was. mean, paid. acquisition as frothy. metrics, to you a great Yes. clearly was buy out turned have a mean, but and It like to Anios pay lot market be we

large I They that it way because clear just they already at of They’ve integration disrupted a job not easier to our team done has working sitting has business. We’ve healthcare the done fold. enable team, later, globally. fed business. So, very team, the We’ve the lot expanding Anios made think it in have bringing team, infrastructure, don’t year a into build a the business; that business a the way the the had it to here fantastic a we’re exists.

rate well. with do going do an Ecolab it’s And look you line what What were now and doing expanding and is kind digit growth, you’ve of we’re we that hope the do, able we that at growth so, together. going we’re Anios if up expect? year, a frankly I a and combined tick growth can as forward. My we other and single Anios mid our to organic at Anios quite line to them mean, growing via organic got now. It’s blend through go right to

has plan, year good been plans is of and performing top ahead well. there’s believe versus that. business expectations, and think, first always high bottom we to Anios reason expectations. and the our I But have

So, we’re interact, feel The a about really the you more the quite you with learn business. more business. cause terrific better pleased it it’s frankly you and

that rest the rate institutional, what from just on acceleration X% And that are the Doug, or acceleration run going to year? year-end, today the at one drive to things two for of

a be Well, problem. stops being mean, want execution. some is the I the I base better to straight. But other just is

in going And on did of rollout, a ball. talked really looking job and years. we the pulling the at lot last business off that that back I went terms the in We plans in we two a also how calls, the organization. their learn. prior went eye in started time very every of And was people’s in one. it these, team the And Swisher think, good I think intensive of had it in a technology about kind field terms major do we of integration deep of

those us. So, behind are things

big many level enough learning. tried I they it’s and to summation things not their one think, last year on things, do of too

of already those to both start we’re year a can just only customer, year you I basics those make you a -- plans And some yeses you for much several of start them plan much and yeses stuff want metrics. and we for in difference. crisper, the the count tracking think can And I those that a back as We are more make benefits that. the focused, reflects a think get team’s seeing to us. this some their lot,

to calling know Does what’s X not around I’m it’s but hanging improve. So, level. -- I bet, it going yes, the hit certainly X? be to I it’s going

is Credit with the from line of Chris question Parkinson Suisse. next Our

back the XX expectations the into Thank ago. guess quickly have And current of selling, turn just a F&B and you. for rate to growth your performance runway? as the XX business ‘XX on even drivers? I you problematic comment you. Thank Great. for have key to new and are if taken little Can ‘XX? wins a balance Does on subdivisions of months what geographies better after and the the enterprise so, appears the

think driving and both Yes. huge. done see between else technologies that businesses has talked go F&B quarter the fourth I the Where say, The I our have from I to you about; to I marriage both you because expectation, ?And difficult identical growth? least think, X, Latin developing F&B. matching America, the quarter. America versus above news think come good job. collaborating Every the above a do above year, white well. to I it’s competition team more of some we expect would advantage, outsized a average; mean, businesses. AP this And markets, North average is going not call doing nobody see to in terrific also it’s the and China a been we growth the and close which through the average. are But, amazing done is bigger it to these would as the water it’s of F&B be right? plus-minus the F&B business is business, little have partnering, X going quarter-after-quarter. two water And I very forward, job to same it, has for even team’s at light average;

in see we the where would sort every expect that’s growth. region. So of But, grow to we

and quickly And long-term around quickly M&A also quick smaller your just as landscape? commentary geographic strategy give or selling, well acquisitions. seen additional elimination, you’ve some as few with a enterprise solid organic opportunities a you pest larger on the any growth Can reiterate follow-up, made

I Yes. continues The pest that team business, for great and I a mean, delivering to say would do executing value customers. job

We growth QX, is good. upper are getting which for single-digit, paid it. is X% in Their

a five sales we’re what has F&B recent terrific low think years in And ability a team recall the If four getting I called done ago We going you were segment. maybe serve It pest, at driving job acquisition. we single-digits. the growth. to make and heck regularly the organic our improves the very out or did is

when real more technology that business the enable that units. it they’re the water I very before. drive big segment F&B us and drives value start a as discussed well, It’s with there attractive even you pest will that So, value coupling because into it to for and segment

they for efficient, if So, will, you services. are delivering pest

positive. all that’s So,

Our to It’s lot a strategy overpriced well. very to a going forward, business high this return ruin like run we’ve business. we high only always of way said The go is return business, acquisitions. a make really

to this in love one won’t And so, acquisitions make We area. make. that’s the mistake we

just of recover that You end sort disciplined expansion a because to There got don’t overpaying up sin huge you opportunities. be it’s are from. you can’t

it. love acquisition some absence We in of future in come targets. are at will we at think the deep of do them There market would the can onto to that might and are if we the makes a some a sense, doing buy look price we Greenfield things we those. take that And

line the from is Group. question of next Macquarie Hamzah Mazari Our with

give is customer a about few you an just could corporate question big update, And specifically days had your circling just base? talked ago. the investor how first is if The client you us

or there? many Just there still entire Is curious, are to suite? product these opportunity customers the how room of subscribing

other QSR, food, because in Look, all by have for Many areas, majority a what players, business. of think it’s different for soft drinks, has all of represent. nature obviously it’s corporate businesses, accounts and large We we the fast enterprise the don’t have number industry. been different historically et it’s increasingly a number think businesses every F&B cetera. like our dominated typically think the these single beer

portion And comprises significant of it a sales. our so,

sales If you the segment. triple that at in to total, you it easily could look

have them offer we have it. where you offer we to to If everything, sold

I must stat. that, implies that’s whenever, I people So, that say, you’ve circling a And customer. it really don’t the job read say, think terrible of What well, the mean two say done fair I’d a past is things. that in

we customer think, I circle have successfully the to strategies. continued drive

and expanding earlier had with of simultaneously that’s successful. But, approaching we the If in price we’re water technologies, to you been been I pest, adding quite go our how the the opportunity. back even terms F&B market the business total by F&B and to also have commentary

don’t we’ve we of historically things we of is it’s a expand run the we company, think, as smart to, walls, that need do so like I before done run we growth. walls, out one into growth

us. opportunity front of significant in we So, have

If I sell competition. we our you to tell I you are. it’s pressure all could existing we grow told would do is continue a tell takes it you, the me like customers, we would also mistake, off strategic because

we think view to So, that’s and need a to company you I be going if it. how both, successful you’re do

allocation. in question a but on And thinking the any is follow-up same along capital really around a sale allocation, have important the deals didn’t did. Swisher on you going lines M&A? are in How stock QX. guys you for how repurchases you about process didn’t One, one, then, buy back Just capital chemical forward?

So, just and capital on allocation, thoughts specifically M&A? any buybacks

I competitors and that say, have they do will bring us look, we We’ll the the have would footprint at we future. think for to a acquisitions to leverage things yes, markets will look us the across sometimes in buy start. head give don’t in and a large Well, variety we technology of in past a that useful, we and platform, be

was And to forward. so, business. I we of platforms; and as -- would business attractive really yes, that that out Swisher business We the us like got mean, similar companies we actually Swisher have a chemical because did. was wasn’t restroom sold went say, warewash bought I that, the we what

price reached tend share earlier reached year. repurchase, We we and we in any year. the make had the terms early to didn’t in it a anything count throughout purchases our on in It level QX, we we of the it, have share purchases or in buyback, budget expected appreciating the We because share wasn’t year. In made spend more.

go. early cheaper as typically it’s So, we

We also in a in as of which the our preferred was -- quarter, of cash fourth did use lot a our we go. M&A minds,

mean, of variety things. it’s a I So,

question of line with is Citigroup. Juvekar from next P.J. the Our

for P.J. This Thanks is question. my taking for on Hi. Scott

first So, soda What caustic expectations that for in your raw for at material you’re materials raw on? any eye your keeping are your other maybe half. inflation outlook looking just specifically and there are

that it’ll it’s go specific mean, on say, raw-by-raw-by-raw, today’s we we I’d buy. of is a products. caustic. products I up, go over Look, basket big ours XX,XXX and based price

track to we keep it’s out everyone individually, and of although there that tough watch. pull are So, few

would It’s say, the So, a here believe up we in is I peak in from is QX. significant stepped our QX. headwind QX, expectation.

And so, and while QX originally in in the third abate; quarter did we be it spike would it thought not. that there would a

So, in stronger. it’s fact, gotten

You believe but moderate And moderate this, We in public down, increase QX see starts to and guys a go terms of these in into around QX. you facts. potentially, not of that all moving data it’s then decrease see it plenty and might QX.

every it, Let year on time effect. like opposite moderation we in right aren’t get because me say, now, it forecast our we price, the seems we betting

for higher it to how but unintended will So, the starting consequence, we’re have maybe hope it. that’s we prices, see

ultimately are to continue price to we the that businesses completely a than it’s pace the out to getting we’re fronts. And what it, offset inflationary we we real, And but I more to do. environment Inflation, of a pricing we’re it got for a historically, there. been we’ve go about complain do foresee. need the So, got say, The is would inflation on it’s keep number we’ve and foe. frame

then. just could I follow-up get If a

in of at segment, segments or the you can full than others? business, like that those institutional, So, that when are year-end by execute about any service or more looking to better lodging market care market you long-term can you’re going back you excited to restaurants, where any you improvement point think

strong, business I remains forecasting be has we lodging are Yes. our continues would been to strong, so. and say,

a restaurant see pick where And we we’ll that launch that’s probably the see will Long-term it’s would because improve. because think segment I we where we expect of up. what and focus, warewash best larger our great see XXXX. think full service that will business That’s the a up. the turn, going years. but in another driver facilities to long-term out I new prime everywhere obviously it’s more are in They area going focus, care opportunity. you don’t a be increased get represents That’s

from Next Global Harrison Mike line the Seaport question with comes of Securities.

change Going inflation penny. the about your raw QX by back you response in rate, guidance, to guys updated a increased you material it the

the seeing QX kind what raw to parse weeks in of inflation? that out material if higher trying view on are changed Just few in positive underlying was the past the to you offset a raws,

Well, answer I mean, where on QX halfway the through. simple is

it. So, our more accurate, XX of you the things for you’ve now and your forecast of implementation; having into any we’re Catalysts just number taken confidence time SAP it’s are reduced. are risk simply because that start whatever been days

first first in lot lot does the know honestly week you day a and it i.e. the you work. a a learn in So, lot,

have so, And answered. those questions been

go the to you take future. would, start it it a huge a out internationally but We don’t your in a in hold. On faster, quarter in it you running have We’re the get and impact confident pricing confident, be just impacts materials, even transpired. you States, we confident the both quite where on seeing can convention as because less through, have to different United though and of time, just you’re point now, time to already raw says be what���s

had people price. the put get we ship price them and to still in forecast, at to So it a you clear trends, accept we had that and have clear but

moving forecast led of the would kind risk things and all And move up we the XX% through in thought is And go the to, like greater things are transpire to range, away. and But that raws, give we those confidence a would quarter I here. say, us that mean, a flavor, that just good be so, moving to transpiring this of would you led as we headwind. I degree signal

one give of to about tax, going year the up at So, a not benign whole do in believe double like we want Well, People this we’re talk but to environment. raws. tax all quarter right. on in it’s digit, I’ll mid-point,

picture. of the misses sort it broader So,

Now, we’re pricing with more that also year-on-year. than covering

in work, So, there’s teams have but we’re not past. are done we soup the the -- real crying our over in it, we’ve done this,

I reason that level but So, type the it’s give to there’s you of talking believe, think we’re about. real to just

energy about the you’ve leverage on the the past operating to or relative then, the to sales growth talk reluctant in business, think, in growth XXXX in been segment. that And OI you’re expecting I

or of and some the you’ve growth guidance headwinds upper you left mid that toward XXXX factored sort around OI other view digit line and in a energy your into of margin top is that talked factors the in growth XXXX? the with what now about, So, single improvements business to for compensation

improved I see maybe think second margin maybe starting half. margin to Yes. probably cover of would type expectation. in we leverage XXX in QX We OI probably the but this the certainly for year, year would expect points like, basis mid-year, earliest,

William question from next Our is of Blair. with Tim Mulrooney line the

X%, think the The afternoon. into several at what I years. stronger year last lately, is we’ve I the mean over has Good segment above water which inflected seen territory growth really

terms trajectory? as So, question curious is I’m XXXX about into in business that long-term this you my sustainable beyond? think I a growth and guess, of look how how we is

Yes.

it see we for help heavy consistent, so, great line forward. make expectation its light to X% technology go water money. customers enhance Our single to Paper, margin to to its that but we in year ability X% not grower expectation the enhances low see this more could we be number core business of business, and continue and would the is with accelerate move particularly and a do the to from to we water X% the initiatives, X% up continue have X% X% in more digit nor steady, a to range, through and paper continue as that as

-- faster And out sea heavy big some I’ll business water business, And particularly start so, the The from we in the really you’ll China will that’s challenges under business as change of that driving flow the paper globally. that for fits. where is the business. see and had occur China, water or through that the growth paper come the think

is And the back institutional division. follow-up on my

a by said. opportunity broke to of you lodging be expect, strong kind down You what long-term continues care, there’s you there, segment long-term each

that service a Is investments improving, it half color say more helpful. So, be -- restaurant just of full to the environment been any the of be is hear. was XXXX. I’m on more there you internal you well, it’s expect these confidence Doug. to so or additional you’ve back would of XXXX, the gives external side, improvement making since Thanks, able which what to for the good improvement see curious to an

isn’t cetera. the I would loss this market. lot at a unit say our conversation there’s of look market, the two things. loss as et in But, of unit spot sweet we I mean, really about

is modest, restaurant at The If bolstered growth down. and/or the one segments by both lose albeit I not look QSR this decades. but chains, in track really our units did when of much we own figures, And closely year-on-year? decline internal restaurants. is this you full we say, And has of for loss year, quite that last both QSR look unit data would in sales i.e. independent service chains how the service and had been we full at metrics

record really bankruptcies levels lost our business. We’re low at include closures. losses of And and

know And with even so, Outback an to unquote. we had quote unit in if column, don’t I a nothing do though our closes would that it, lost show up

also We’ve which we get terms started plans the And I fruit. that’s mean, them we’re people we levels to I of instituting forward ground confidence to more so, the why purchase, And can so losses, say bear already than We I would have too. upon see momentum. say, look starting in we’re these are as on it at in ground think. is we think at firmer much look

in the you -- It’s already might right not it’s of efforts got better data So, QX, that’s why I here quarter. middle was sales sales we’ve sitting mean than the events and QX. QX why and the we specific in think some we’re confident imagine

we’ll down and lead do all to So up believe able go go it It It’s a fast doesn’t that fast. factors there. business. to better doesn’t big us be it’s those

momentum to doesn’t, ago, which the sort U.S. it its X% have running and time snap moving are its of a of in probably team’s realistically going X%, X out. to to to but started at went not saw some going QX really it. But to We take down degradation very steady would I point called sales at on it’s low it’s not long back, the you but rebuild

of line Longbow with the from Silversteyn comes Dmitry question next Our Research.

you reduction water this? supplying in comments perhaps headwind seeing the slowing across on I’d you China of benefits your about being bit words, market facilities their some of of taking manufacturing some the playing up tightening industries this down? where out about heavy for to industry are other be the may of Ecolab? is pushed Thanks industry? the regulation how and from you with that your going a as that can your you Or it’s like sort impact government’s products afternoon. result of as In on my more question. are treatment the in how follow is talk environmental manufacturing little China impacting Good competitors and of specifically what’s footprint of So, a

thing. these this this Overall, call things. of I classic is one a great

for the I think, it’s a great world. thing

for I for thing China. to be adjustment smart will period Ecolab. we But, a ultimately a it thing through, there’s are is think, a a and thing great in. like which good get it’s And period

I you a seeing. think, So, what we are of, cited lot Dmitry, it’s

the have we So, transition being are that regulations, loss customers some shut who business. new can’t the down make to

plants We that more industry, the paying down shut better some, say raw chemical whether in materials. make then chemical so of who it, we’re has as a And price have least seeing producing at lot can been and not well. it’s real substandard would a disruption money, increases I customers Because to would other plus. we which for globally what what that’s justification, see have or led call in are and who buying supply I some technology is also

be i.e., gets decide they and going to people are China, stuff environment. in good standards. for the raised, news new quite been new the and going are to about quite and serious when it, to that successful do regulatory Now, do more to standards meet ends flows to need something, long-term, has driving

lot the So, these power very meet in requirements to real industry need They see we There regulatory go short in a order. is first, there. pressure.

we to translate spend scale. important the move higher want go very the set are conversations with we there players to having that can That And up and into we so, find and likely ways will us.

good So that’s part. the

for short-term So, I I in think the this the type of exactly mind ultimately. China long-term, move we don’t pain, hope because is

like the it are first sanitizing, and going your half the that a the sanitizing you outside of not cleaning clarify in pickup all low are and over but with single of to I back very came should and to, around of a change -- the that XXXX XXXX at look think growth of in with firmer it to you near low you foreign made exchange. out maybe just year then sounds to we to foot digit cleaning for you little look efforts the for beyond. some the digit just mid like year and want see half And comments mid-term? single way on then, much to that follow-up about right sounds Is maybe to that growth And and in referring that the and

about? Dmitry, were talking segment what you

largest of sanitizing institutional, The institutional, part your and the portion cleaning of... sort of

versus to improvement. except in is we didn’t versus improvement QX. It institutional. We we would last year for Yes. see say, or grew, we QX. No, here I to. define us not not but grow call believe the what a in maybe am try seeing the QX and it, QX started anything better year little it you We that improvement I don’t share -- to And similar, want bearish. QX, to We way a lost didn’t would forecast we to even else good if would not bottomed is that I see say. started And think shrink. we would we as expect we what

But, improvement don’t What a business, it’s to at sort big snap also I’m see believe is trying like what out So, point the get of is quickly. it doesn’t in hanging can about we’ve a now. we run we’ll sooner, the we you’ll no, sequentially but that this low-level. his quarter-by-quarter there modest suggest to continued rate. Hopefully, is that believe we right the realistic where X% that’s got most area at leave year forecast back

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

and actually. the the couple year. sense, have all Dan up for guidance in here is questions gave it’s for the quarter. makes you for quarter I one first first I item interest of line sequentially that looking It at but was the expense, here, Dan, probably

interest lowered some the You guys did that expense. overall refinancing

things why to and that’s trying just appears aware like higher historical running or guidance little levels, should that? we maybe So, understand interest that there’s anything expense there something bit CapEx high, the of, in be if than a

think that is it I just okay. rate really driven, Yes. primarily

debt XXXX, in that’s fact saw euro Anios our that okay, interest increasing the the we rate driven. significant and between of impact, expense to But this our was our swap up, XXXX of part So, down pretty borrowing. increasing were step financing related through and despite really that balances that debt the Part exposure seeing of was balance same, to year-on-year, is although market. the what remains exposure incrementally just is about our the you’re largely

So, we’re terms not in of an in our fixed portfolio. debt position entirely

will from gross benefit maybe, that revenue that and new to going XXXX; change benefit us I it’s as revenue a detail And margins Dan, what your more should of We’ve how recognition you little you’ve follow-up, had we want there appear companies revenue as seen the got just it dollars wondering And in for between prepared -- that actually on is other a bit be then, to give standard? comments some the bit. as us recognition referred to an any to was a in actual reported? maybe you SG&A the from just accounting little expect to here analysts. margins if have

to that just -- we’re primarily from portions what’s estimate we to to explaining think maybe directly be benefit, service. general thing, of what of sort revenues tied that split revenue and reporting, a sales So, for are portion products required driving a our so or then and now kind backed both sales of this recognition of the we those by cost

just sequence, so, take your kind And I I’ll if in questions of could.

the X be our points. and SG&A perspective, in which you’ll about about P&L margin offset will our note thing reduction geography percentage percentage reduction a by first of in a ratio of points, that from So, X gross is

really a margin pumped no so, currently lot line. in it gross of that cost the of restatement will at no margin up service operating a in think sales. What’s SG&A, where of real SG&A and reduction the driving to so is resides, impact currently -- And from the cost the be of is that income about expense

this net drive And income at X equal. it income percentage to be sort recognition so really going gross margin reduction, will to but from point revenue that’s operating of operating

shipments QX April you restatement invoice drag of both service -- but in sales you to period, expect actually see be earnings, years very our reconciliation if We we and that we ahead the be will -- showing a yet, think game. at haven’t and it reported this of a bit about about into a so recognition. XXXX performed think laid of small there the We’ll result actually and Because as reduction is in a little the actually about for to bill product be is level, we ship and arrangements going if estimate a the will typical penny so where the be full of ahead revenue XXXX. to we restated to

the maybe -- our conversation is so are two split to change now pieces. pension. pension out into we And the that’s is to up here of results accounting big required there, other round just The there on --

So, pension expense expense. ratio, a basis annual of pension the I our operating the again, the XX reported reduction earnings to below about of going of be continue that the will income, operating would or people about on portfolio, which think expense, benefit, component restated. all of now is, net accruing be the as that we’re the to go points operating result will to a But, income

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

of at that that basis are it to especially around the Could with drive components so close XXX of some materials? in assuming somewhere is like half about margin also of points the looks to year comparisons a raw the since many going there Dan. are expansion. Dan, talk the question Just you midpoint the guidance for tough first

been cover we growth to I degree leverage is of the the to pricing Well, program across think, will an as would the structure, indicated, there aggressive materials. cost as higher raw quite on leverage at continue next pricing expect drive We’ve least savings pretty plus as continue always of driver raw volume is XXXX our business, drive and clearly leverage part SG&A be cost good of which feel efforts well impact about in some of biggest to to as to our in too. There say. in supply year, will is Dough chain fixed. always continued benefits cost pricing materials our drive other But There savings annualization which year. the programs, versus through the I

you acquisitions to-date, do way in that, to the you can have much And follow-up net as that understand to net-net then, kind if on a so get it just on divestiture Care acquisition and XXXX, a on based revenue we just expect of debt? the how Equipment

piece, it’s Equipment the Relative to almost immaterial. Care

being in Anios so big about going rest the that be think and big early minimal done drivers. you that XXXX the revenue annualization going deal; was of If be to to is not the them are

the Rosemarie line of & from is Company. Morbelli question Gabelli with next Our

are Going hit magnitude? give and per feel what timing, was you basis what expectations XXXX the the can materials, share for us back a a on XXXX in for raw the of your to

Two adding seconds, we’re numbers.

Sure.

after your how fiasco find -- terms what getting are in with So, as to word; going makes not clear? with pest was in of you and as really I consider you are with willing acquisitions didn’t sense, thinking numbers, while I sure I’m line you would type it household ChemLaw, in the pay fiasco into long make am adding ChemLaw; Terminix, the they it, just the so pest, additional phrase you of the after that would, to I elimination? consumer right mentioned interest And wondering, after the are to

Yes.

So, I will answer.

was from Company be and the been what focus proved to I has areas, our honestly It’s got home away I to one. is I wise think, very think, we’ve made markets. to in these continues has a on to the said that decision focus before be the

our or believe we to in pest And knowhow, our prefer circle, we’re so so, successful on we area, where don’t here, strategy, residential the that necessarily quite building we success while staying of part even in customer in given translates the -- terms are. consumer

our like your would be in in question, the $X.XX, XXXX, it’s would majority year, that plus-minus another So But, year-on-year to earlier year this call forward. $X.XX think in hits how about focus are raws that last $X.XX. almost it half Back of QX. I probably going were, vast

Okay.

at quarter, [indiscernible] And recovered $X.XX, by the you had least basis, so, fourth the at if XXXX, to? on run and I a in full then, rate look addition

talking year. underwater I’m the QX, mean, in to daylight on an dollar last will QX. EPS throughout first nose start on absolute our as year, basis, accretive like neutral, continues white, late material time. first facetious, third see we pricing and it really be $XXX,XXX, an QX more that’s we and in seeing I just but a just No, and talking an and the we QX, are quarters. between material is we neutral started margin, because build but raw on running just really And not basis, being the EPS because basis It in was to raws be really then EPS, expectation was increasing we pricing the second going of to little think we’re not seeing for and year I’m quarter first in I last a because above in mean, increase it’s it the barely dilutive raws raw increased pricing falling half slightly base in and back accretive I’m where go against

going So, EPS I from offsetting if I about it… your price that affect increases, raws, with $X.XX will because $X.XX while by you you understand to am be impact properly, have it’s it of thinking will not

it’s most definitely, yes. Yes,

is this mean, I forecasts EPS. Rosemarie, double-digit -- our our for all is in incorporated So, which

period throughout more benign year. So, It’s then you it had offsetting for and with XXXX in and -- we another XXXX cetera. and started in gone steep as XXXX, in just up a the It and et a have these XXXX one material then through fairly goes and we we’re yes, raw few in years XXXX go late typically run than pricing then two-year, we’ve prices, periods. XXXX,

these the of do So, all We’ve we’re trying But, get to just just And transparency. near-term them. we’re one impact another periods. the they handled on in have business.

XXXX a I job, it. we’ll is come good we’ll think, think the a And out team of doing strong position. I in cover

last as if $X.XX QX up for say question, EPS Okay, X% Doug, may basis. digit remarks on one But double in And $X.XX but ask I you your us it’s XX%. to quarter every great. you growth let’s of gave mentioned a to range the

be would that XX% need growth in order the reach you to happen to see first and to what what in quarter? unhappy would So, not

at midpoint mean implies point, double I Well, this the I digit. mean,

And so, not midpoint is either. loss on

problem have be so, that be would could would an problem quarter. system. costs could a our knock a think off? what We with I could that don’t a SAP but in could you money it problem happen And ongoing that you the problem be

up materials, to some we -- You sales end could And pretty on up that it’d our It have huge quick. that up hitting don’t run could roll raw don’t forecast forecast. could not we happen have we happen.

there’s as is there mean, we have in which then here is we it’s life why the a That’s as a upside business course things. and world. But, range So, those number consequence, through of any of risk here. I go

And at and the like can the go giving upper my that’s a but in at focus everything range. at be midpoint We we the to to I’d you forecast. what to on. best range expectation So, our give we do going is, deliver least we’re we’re always side

you. Thank

Our of final coming Dolev the with Dan is question today from line Nomura.

for taking question. Thank Hey. you my

the I apples the margin given guidance year about to the correct? ‘XX, gross understand, accounting, for is the XX% XX to discussion so apples Just fiscal that with

Yes. That’s correct.

of release the do the ahead the April full I in As quarter. restatement of indicated earlier. We’ll

And kind back gross given I kind your you the I to I XX that, mean, XXXX, XX. improvement margin of it. year. even when go and was of drag the implying last XXX go time, back business points were legacy of muted about then, related you’re of Why the had it it to for basis a If of very margin snap the decade? high, worse the snap Thank more Got versus gross longer. back this if different especially took points Nalco you. basis inflation is in raws was kind about to and sort

I a don’t this is two-year know, I mean, raw cycle. material

if say, I’m not just sure different. really So, it’s materially I would

both like of almost water And the than And say, in things pricing meaningfully years. all we go with equipped they’re was and business all of pricing any I we’re go that time much at did than think, would a quite had the business, the XX for us on in of better they now ‘XX ‘XX, had raws different moved in really of going the business I how successfully. deal us chemical I rest. but ‘XX. that capabilities first and they to figure mean, to this were new this are piece was develop energy it were environment ‘XX, cycle to the one time, out

that right period think, a we were then if at you ‘XX period, looked even history, ‘XX and up and the they that were and captured the in ‘XX run and was I period at in Nalco’s much lot buy. which better to a looking better of

their did a lot we studying of so, capability. And of

it’s So, I don’t that different. materially know

You just two-year a powerful cycle. pretty got

are on it. We

pricing. think catch quite our confident not going don’t we are am end will with recouping dollar We margin, to there just I up. -- up is I

divesture? the the On the you Equipment be Care, from would to able quantify margin uptick

that margin. and not, like it’s was at that one it’s business, I Equipment X% total don’t mean, I Yes. Care -- the of zero

hit going to not -- be immaterial. So, it won’t It’s the rounding.

would Thank like turn back you. for to Mr. Monahan the remarks. I floor to closing

quarter wraps conference up That our you. Thank fourth call.

conference Chicago. we end, our our will the to on XX, This at booth will NRA available and associated May mention call hold and want slides for on website. be replay I Before the tour Show that the of discussion we

your you the time and best very for thank wishes So, of participation, and the rest much for day.

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

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