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Ecolab (ECL)

Participants
Mike Monahan Senior Vice President, External Relations
Doug Baker Chairman and Chief Executive Officer
Christophe Beck Chief Operating Officer
Dan Schmechel Chief Financial Officer
Tim Mulrooney William Blair
Manav Patnaik Barclays
Gary Bisbee Bank of America
Katherine Griffin Deutsche Bank
John Roberts UBS
Chris Parkinson Crédit Suisse
Vincent Andrews Morgan Stanley
John McNulty BMO
Scott Schneeberger Oppenheimer
Rosemarie Morbelli G.research
Eric Petrie Citi
Mike Harrison Seaport Global
Andy Wittmann Baird
Call transcript
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Operator

Greetings, and welcome to the Ecolab First Quarter 2020 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. Mr. you, Thank Monahan.

begin. now You may

Mike Monahan

and Thank you. conference Ecolab's Ecolab's quarter Operating welcome and Officer. Chief everyone, With me and Officer; Chief call. our Baker, Christophe to Schmechel, today our CEO; Financial first Beck, Hello, Dan is Chairman Doug

the our on referencing Ecolab's ecolab.com/investor. results discussion website the of earnings and outlook along at results, A and our our with release slides quarter's available are

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

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

overview an to growth, yielded a upper quarter's earnings with negative share the earnings adjusted reaching increase. the reflected Starting controls. underlying XX%, sales, on benefit Results impact from our modestly minor the grew netted to controls, COVID-XX which of range. earnings and cost good of per end a first results, but forecast cost pricing sales

Sciences good The X%. and fixed sales X% Energy. currency offset Acquisition-adjusted increased decline sales more a Healthcare segment and than institutional which Life showed growth, in Upstream

sales X%. fixed increased Upstream the currency Ecolab's segment, Excluding acquisition-adjusted Energy

points. Pricing, the and ChampionX the investments growth during operating rose offset of other continues margins volume income XXX XX% improved currency Progress on expenses fixed basis cost operating quarter. selling-related Adjusted business business. more our savings with and the in than separation initiatives expanding

the transaction the to continue quarter. of We end second expect be completed the by to

responded environments us clean to effective in aggressively water as Ecolab's we've the world this and safety, an leading crisis. pandemic. have And food positioned healthy partner in well capabilities

time, safely a and outlined keep consulting we they product, our them customers, further flows. have At XX, already taken for broad service position need they same financial reopen. As the to COVID-XX operations cash assist when aggressively their to and prepared and providing webcast, functional have more and our fully for strong well present important safe March and them are our support that working we the in bolstered

also aggressively gains the recovery to drive preparing growth are We plans business as new develops.

As quarterly communicated, its of and longevity the outlook the pandemic's on us uncertain an for or previously the provide forecast. earnings adequate regarding not the annual economy provide full either basis do to impact global extent

forward-looking As remains suspended. a our result, guidance

an XXXX represents unprecedented anomalous proportions. period of

water COVID-XX, challenges and the infection the management have even protection become safety, food navigates As world positioning our relevant. from more

growth opportunity long-term customer huge water, energy remains our remaining opportunity. leading Our results, strong base and costs our by improved our and focus while positions, lowering with robust, market on operating providing our their market other driven

financial strong and performance and on our Further, flow. investors. long-term free cash long-term beyond Ecolab our position superior these We resilient liquidity with believe near-term looking business uncertainty focusing ample will is for yield drivers and for sustainable the

here's some comments. now And with Baker Doug

Doug Baker

good to and Mike, Thanks, everybody. day

on perspective some offer QX on just and of bit XXXX. I'll So, comments a

We costs, business So, impact will more negatively a were pattern COVID-XX QX, other but QX realized we expense in sales period results see COVID-XX be COVID-XX drove the our sales not T&E, the than EPS impact. we also the benefits than know were anticipated. did than But is expected acceleration adjusted and adverse. lower as we forward. this which more coming expected, offset different better impacts versus going

a that's model and we regularly, before. of strong business in a period resilient a this a and We've cash crisis been very that and great, sheet business in entered got company position we got balance importantly, strength. shape. good are team have very But The We've cash experienced generates reserves. through

we as more the V. important we of extend expect a a be believe like will period all shaped than XXXX, this to the U COVID-XX is and recovery into So

that COVID significant our longer also a we Finally, but will quite impact term, have believe term, on positive. quite business, negative, short

principle a guiding long-term the way manage really us is the for is. maximum term positions in short that where value our benefit. So That's

So, investments were. we've number cetera. increases, capital already created We freezes, steps a backstop. antimicrobial preserved budget, reserve hygiene to do by taken digital also this. but hiring We our eliminated We put cut versus as merit a cut they expenses. and XX% of tech et cash in We've

let perspective future. COVID detailed But steps Now, we've of year taken are managing shows offer our how examples the approach potential the of some on our maximize and post these me up. to the year in

Like XXXX. to everything with the asymmetrical. COVID, first, it going is be seems are So outcomes

record having have and that record businesses F&B, Healthcare Food years to expect like or years have We Sciences. Life we Retail,

businesses markets we But a in hotels, restaurants, lines, also cruise shut really have have with not been virtually Institutional, way. down, competing in that business in cetera, like material et

the of The impact will minuses to of imbalanced, too. businesses year line, previously. going impact net these negative timing the groups of the and for both be the the be top course of we've is on total, and though, that in signaled pluses over bottom So, and year,

destocking volume believe, we is temporary closures channel to going markets. the declines, time. key at Plus, driven effects both impacted QX, quarter also full the to we of going as most in by the be same realizing realize be we're COVID-XX these

be and recovery increased for to hygiene expected in QX but part This start reopenings, by the will However, half by programs. during expect showing sequential recovery demand also we driven QX. second certainly QX from

this we industrial we're Now, seeing in Food industries hadn't Retail settings, this like F&B, where demand already across traditional before. had of type even and

powerful that new sanitizer a Bioquell initiatives that a people, we for FRS, We're will Look, capital, F&B, with of on feeding that by hand particularly have launching developing underway. and we're momentum, own be and to We're need fueling driven Life segments we're new we further our system. do categories. to in the investing Sciences. already Healthcare in care doing number The things applications recovery all momentum. adding offerings, build and And

Three, they opportunities. growth animal we're customers. in great about times. and And which before good and actively is great we to finally, health to difficult we're have growth strategic great as data in centers, bring talk remain benefits the This seen investments pursuing COVID, time that a new growth opportunities we maintaining continue and

Now this represents early-stage we all world the after what of call the COVID. development for

generate We believe has the Our passed. factors digital, remain will delivery; hygiene, pressured be certainly use throughout year. environmental in this And to our be lowest continue share leadership true. will a number but business will year, antimicrobial, we'll cost pandemic valued and the cash clear we gain after offerings flow important believe more even of positive

chase huge a still will market. We

a competitors advantage. still argue improved. We're have this. will handle situation like than One shape We of our be advantage that will sizable most a to better competitive might our competitive in

water great will have tough, relationships for have gets significant answers ESG we still then huge will going which will We our be demonstrate as we're advantages customer the finally, important. a issue. we and right will when the particularly scarcity, remain partner, And

and also term as believe extraordinary communities' transformational through more expectations effort We as new see even building of broader that, use we the put where be that an and this for is the got firmly benefit the in time we've going to to there's play. annuity believe evolve. year. we us businesses robust what set right priority is so maximum for is move But will that this through opportunities to highest This a year. And short managing we positions customers and the time why do. this as way long-term we It's

it that, to I'll hand So back Mike. with

Mike Monahan

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

Operator

Thank you.

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

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

Tim Mulrooney

programs When cleaning now? have If positioning ball how value that you what you Doug. like for to governments And year ask protocols, in the a out second, all their could going? you last proposition? this are afternoon, thinking Good puck sanitation If corporations build how of about crystal from are company and just could I world where's your best retooled on I were likely your increase take the break and to advantage the you looks the and comment a making.

Doug Baker

is by guess businesses which we're is confident and standards. what's mean, mean raise awareness to early drive I to I going I I there's that twofold. consumers, be Well, heightened their ultimately sensitivity concerns read hygiene going to quite think towards

think in this variety I see so, a ways. we'll of And

to time to here. back first the for earlier things that hand went was put to might some you the of pandemics, If almost potential in the be buildings commercial their they step a sanitizer what many would feel like say caused we baby I lobbies.

going cleanliness aware show think to consumers. it clean? consequence actually things going quite this call consumer's up? quite And our et going to visible signs, manifest does to sensitive is it's does be to, going theater. be itself, want important to to and cetera, How of surroundings. be customers. quite I are They're this to How it They're a

big So that's obviously area. one

now different The other the customers. is experience interesting part with our very is, so we've have digital. all had this And

And this provide during ongoing couldn't it levels, connected we ask digital maintenance, we've time and you us because I if it be do invaluable imagine were. were about we're in the service levels, you had to so questions going advantage, way proven while has big vigilance to allows to this, awareness that

the have some in even were big converts. who become some food industries customers And party and real reluctant in to beverage I think say the industries,

we is chain field have the I sure to to want do us supply our really ways true think digital want to connectivity broadly, our this We to customers. connected that that is going certain and want going with prove we to customers. in to adequately our and connect be to push We customers. is to right make that accelerate in

of to And lot important. think, become so only I a more going this is area,

am, value, our a value, stream this only to further potential effective we're of information work able even the all there. And our But as I connection, because I got think remotely. are AI we're we've think, I iceberg get how think amplifier for surprised still all our heightened it. we we at tip our maybe touching, gets I great value, unique the know-how somewhat, value,

coming then to, exactly that approaching this. over how yet that's understand a think, we're we And don't And that's lot I itself reveal going there's the months.

couple in in of a few how a for us. because going have go things. thing very aggressively watching It's confident we're be to I We in ways. itself terrible to areas, think, quite we quite in it other it's can this And areas, learning And positive positive a be mostly are comes very through. and important. and think reshape But manifest will society, confidence I

Tim Mulrooney

is this on Okay. Thank question ago. And you. I mean, second raw My materials. years was

broke are think long here. fast remember different as I you'd it you $XX, oil time was And long-term your get ever now? And company Thank are that counterparties of hedge I could. on the you environment? moving there that is more I with the price finding what issues aggressive a mean if this might But you. out things view hedging saying with in And as oil? and right

Doug Baker

of the a Well, I have benefit memory. great lousy

plausible about got no It have we I hedge just $XX, oil if happen. recollection. which everything it I would didn't So doesn't deniability I have mean means below

what I say. like We that. would hedge positions take don't So here's

nobody we'd timing, this. but good extent For the really that's because and the simple it. are reason, which we'll discrete transactions, known buys stock, be And any of discrete think specific at and hedge our they with

And if we're value programs, because about there, way. and great what needs we're kick about. that's would you straying we creating us, meeting is start customer not that creating just What

say other In stuff, When is cycles a in end oil it to oil obviously, one. have too, I of mean, terms very I ball, believe call. just the some I and crystal comes hard I the would don't That's business. this the don't of this of

there so it moved of is terms how can You inventory and see which why radically is in for demand sensitive top, moves. it the when space supply is

normally, April. point in moves by by had And demand it's I Now or oil we've during supply recessionary fall a unparalleled. and mean, like two here period. in a demand XX%

think to wrong hedge watch it to we're it, going likely I it we So over and positions we'll but going time. take get go because are understand know we

Tim Mulrooney

you. Thank

Operator

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

Manav Patnaik

gauge obviously, rates color, to hit been that exit in hard. what in maybe up Good that like? you. obviously of month give some color are some if you the could of afternoon. segments the thus was and get those the that looks just far Doug, hoping terms you some like look Thank I April of on gave moving what

Doug Baker

see. would I mean, April what I Yes. seen to we to in what similar very we've expected was say

lines is disadvantage But we your expected. we the Now you what that know just along didn't talked about. it's

increased expect consumers businesses where our very situation. food hygiene to stores sales like The protect that to as of standards would are workers pickup going be from their an because even Food to look in to the business and we're the their advantaged have working you Retail restaurants retail, a it's shift hard increase to grocery environment

out that so for we've increased play demand in And seen certainly that business.

shifts changes food cetera. service-oriented have This beverage to pack environment shift and within continue also consumer-oriented from industry driven causes make itself as safe the to in they've those change as and their more big food sizes pack And got shifts heightened has sizes, et they for operate. to workers can sure that also for continue hygiene demand create a to workers to

frozen. in are offset healthcare by say you expect. in would and in I'd obviously U.S. then is surgeries demands So that around antimicrobials particular, -- that hand the and in fact been elective and care That's particular, like obvious those the have stuff somewhat

said, in in of net with as Healthcare we in significant that our is business a got With with go upswing demand huge we've part net downswing. so through. positive And the Healthcare part

Sciences. And Life then

was an that's number So then of couldn't and made a little that continues are listed do we quite important do that right enables Life year basically to customers. hydrogen pre-COVID, And to over now us things that has a Sciences well well. before do doing quite peroxide we ago, technology to a acquisition which Bioquell,

leave they're technology this is go So getting believe going that we is watching because experience unique to of -- of going as permanent but to the lead use at to technology it, experience the we forward. we're needs,

and docked. know not the Cruise where consuming And right are hotel They're on like. all much the then downside, are and lines now. occupancy you restaurants

So inventories as through have the XX% to opening where think them because we particularly with But kind a quarter their significant you in you going double the result is I rush. the business restaurants if real all second we these you pressure, summer, as our know is distributors most cetera, quarter compound it's under down. There having of demand of quarter, second being of of be that will. acute be the one reduce in et don't most of move some the to will whack, down,

variable you XX-XX, get a the And you if this in profit we're demand like case, because when at significant, fall-through with like and can't some this, reduced to of variable suddenly, you because move you have right, find this, quickly fixed will costs.

a of the be news, will So the quarter gets that is consequence the if quarter to second you going bad most as of COVID.

Manav Patnaik

maybe And follow-up to just Got a it. that. quick as

them view sectors to the In that Main just negatives of terms on up. impacted versus what today referred what of Street pretty to, things the opening thoughts you most Wall some kind you're are is feeling Street hearing the from optimistic

if any curious, had comments there? you Just

Doug Baker

I going guess, we're the around what's world. on watching

steering to by have think, probably States, And I to the got you're And look, fashion. governors so United not situations in very much more pattern, going very because appropriately, in simply different And one the different, seem to have state. wheel they've the going here. they're act

others. states some in density different than very got You

think patterns as reopening going I to so emerge through walk here. you you're And different see

Atlanta's They're moving early, criticized it's getting day I a not -- in early. doing. what We've they're doing this day late, I'm going a for But doing. think They're it. situation. honestly, to they're moving than smarter seen what moving

And so, you're it's reopen. areas allowing would and to in U.S., restaurants completely predictable but guess the some going not start reopening to I seeing that

consumer is behavior. to what govern I you're see then think going And

you're how has we if we So low, has I up was it's and near that you China; people to vaccine treat completely don't revert one, step a similar the but disease, a know norm. until ultimately, restaurant go back because in pre-COVID where think reopened think, have, X/XX. picked And abate just the for see wasn’t It China volume where to we to going disease, restaurants. to security it point to fear I nowhere and then from the have

boardings control years forward. which to a X/XX, through event, time. opened a took within for went this Why? period it months. you for travel had if a probably took that going two of the while got comfortable people But airline under So pre-X/XX. feel Because government was for We it fear equal up there to stopped

will mean move you'll comfort binary I terms I this think vaccine, up. And comfortable see be going as there's reversion more back take I short it's order fairly that's my think of then, somewhat a people's until will to slow consumers they people can estimation. is to But this level if be a ramp-up to think become safely, and a going reopen, time. do in just

Manav Patnaik

Thank you.

Operator

with the America. with Gary is of Please proceed Bank line Bisbee your of from question. question Next

Gary Bisbee

the a out help disinfection, things Thanks. office it's reopening? test see your get restaurant to -- other business with opportunity whether of calling a role Yes. to firms number How in and been building. an big do services outsourced There's cleaning, you or

think at in onetime could I they'd are a as the chemicals your do there's normally than some scheme buy. do, a you grand for of Or next more over sales the not that Is big huge you? some of Maybe would pest this business what quarters? few benefit. you a see opportunity -- real point potential

Doug Baker

think and I operating aware operations way it start-up to they in from I'd our They've the manner challenges say, real got opportunities of got that of well different the all and before health again. somewhat to were customers that's certainly, because a Well, do are face. concerns. these They've we reopening, expectation consumer of

municipal inventory. only shutdowns, demand down lost is a making the in because you going make expect artificially brought certainly, sort of can lost really so suddenly from doing also we are, And provide so customers but have like of this you Yes, help that reverse whenever you're it's us. area work I this, the which not we down have the demand to mean, I'm case, when consequence obviously, here, in the a as sure our on lot of

up, start to back up. patterns. of pick obviously back work kind going before to get heavy more they to There's to going there's they when be normal have clean be And inventory early

be reverse there this process. of the go somewhat will through So as you

I believe United to one across the of that States is to going don't are across be that But think this months. occurs a of day or going across Europe. It's number this be a reopenings I series

event. it's be to a So know that I don't seminal going

Gary Bisbee

on Okay. has of a And lower benefit oil thought the Obviously, for your you oil you are period you be down. Or some how past any prices? of right that to time? some to or then customers accommodative about challenge the from flow periods now the lower you. follow-up, Thank margins raw is -- being of in, process to prices? pricing sharing benefit of gross of material way able there through done thinking lot of your in as you've gone given are Are likely just that much

Doug Baker

Yes. the example. materials will oil is reasons our I we sure. -- going are less is be expectation into than year, forecast this raw per the No. price be of one as And had going for mean, year to year

I right? bearing well one, that cost. in for plant just in You've of gross reduced materials. not you've or some raw got would say variable margin, also beyond I manufacturing. bodes costs never got mean, fixed a insignificant we're fixed cost volume environment a There's asset lot a

of lot needs sanitizers demand customer this. this of had we've what's and we special for right have as uptick go we're the to other through is And doing because huge what in and things. And the a transportation

this turn So I to a into event. big expect don't pricing

is buying to reduced are to down cases. it customers really not And realizing mean, adds when the their in they're lowering pain. they're our they're just their way not doesn’t anything fundamentally, because pleasure, I add long-term anything buying spend price our many shut

make But through to been what where these unbelievable we've understand for good decades is they that's -- are I trial companies of an been some we really think And sure right it's So and do going. going with we partners trying for reason. not are now.

small about restaurant group, hotel hotel small restaurant Think companies, large the large companies, groups.

things of how long-term take role benefit arrangements, understand in we fee stuff. right who How but around think pain, and lengthen around to you as we the help exactly we actively partners are can seriously as forward to our the decades to and accentuate difficult for do the that postpone times when going some we so And partners may agreements times do do be other in the short-term well. thing is good and working and fixed expect do

steps, this through are QX our smartly of those the what taking conversation. way believe we're And this will for bit is. to company. is we But that's some So which manage and little mindset long-term I maximize intelligently a that positioned in why a exactly gain

Operator

Thank you.

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

Katherine Griffin

is taking Katherine for on Griffin David. This there. my question. Hi, Thanks for

improving. in so So call, that curious to it update first off, improvement customer I'm trend improve, activity, Institutional on was that seeing in if some seeing the continue China April? March in in lodging discussed COVID far you begin you've whether seen occupancy

Doug Baker

China and I it March our say X, up like Yes. would -- And that. in down. be I think recovery is a negative going was China is actually to than to going better be we said

in a China, Institutional side our from business the So, business. we continued on the saw of the and Industrial on both recovery

in alluded in see a answer, slow. we to I was It's What moving. previous as Institutional, it's

occupancy, looked If lodging at around for now low XX%. you XX. was certainly below it It's the point

up, rapid but So, not pace. a moving it's at

it's up. recovery than that moving expect we a more Let's comment say than faster V. it my opening Hence, a fell U just of

for lot I just think there's beyond reasons of what in seeing a China. we're that

side, very very back. they're of which infection. cautious the because freedom this And we're the so colors informs I gave is earlier. or I is gave pattern answers the say think in On they I that double being answers while the population a seeing, complete weary -- of them they're that part still, the seeing In allowing instances, foodservice you're is China terms of

the of call, than than in we So faster our same the more are a but direction. recovering in Sales moving still patterns recovery, China XX March yes, said in different. right the China little

Katherine Griffin

Great. Thanks. question. And for my follow-up

or customers prioritize as how your being it to specifically to more investments care you investments, meet Institutional the help, on your directed might BioQuell. I'm think kind in need? their needs of you about So, for long-term customers these also focusing digital you near-term curious talked hand are anticipate is the efforts you those more about and solutions

words, have adapt to gotten how your and to a are sense to other post-COVID-XX extend a looking In customers urgently you of what environment.

purchases looking to disinfectants? they're what if think for? simple you or advanced invest early is like think Or year just of used on there urgency that dispensers down maybe do more do You BioQuell as double something applications your solutions, in be would this as to more

Doug Baker

Yes.

So, well, Katherine, would be honest. it's say, I'd I -- a combination of both, to

So, will have like, to the mean, quicker look, instance, fuel we and doing it fill areas, opportunities, enable capability basis. I effective training, large technology and are but work, long he's because its also that we -- Other some of let we're needs utilize ongoing have ability charge to and an customers terms more some provide for Christophe Christophe long-term legs on connectivity their investment. they around the open are in how going that ask on those. and digital this speak I'm the to to but leading digital but ways, believe in a on there to to use me a of near-in

Christophe Beck

Doug, you, Katherine. hi Thank and

to that it's years. our the change. So, doesn't but with investments good in What's digital And the accelerated very past going we just question. in our remain now, few consistent direction thanks the is focus, get for over

customer enhance the to Just pillars three digital as first, a value. reminder, is our big in

is a that so personnel hand sure think protective making healthcare maximizing, like really whole have care with hospital, it You that in the a hand measure compliance can so can care they products. about the

three our that we've our of pillars performance. improve Those third, Second And that many and to declared is, so really really maximize on. field which impact, we've our to teams. really focused the operational to work strategic the it's ago are is remained big years facilitating

the monitoring, terms alignment we can as that fact truly we provide if physically. with well. even the And we cant we service that if fact they're Well, even center, and need, heard have place in, think many remote when not what The as you've customers even go operating. in systematic of there we're value in

as be, our we're automating here, is customer that can so the whether as there that as well, for reducing for it we're their second need not analytics in it instance, truly now. processes. disease, costs while The one reduce well also that's as them regional Well, customers But helps well doing the for risks that well. predictive

compliance, And as mentioned. least, last our but not

that So, compliance this minutes COVID the what for well, Doug to earlier, more. next customers. hospitals again believe for in We we hand obviously, take go years. in quarters, us, the few for mentioned help debate is I And to a few environment, more while ago, to the few going program instance, care to even useful said this our digital our hygiene much going can are standards help is up that, even how while technology customers

would So that be my take.

Operator

Thank you.

Roberts with with proceed your Our next of UBS. question is from question. John Please line the

John Roberts

services all Korea, full areas restaurants sound in open. use South of some countries, Taiwan, stayed those increased have of well. you have any you evidence kept any Do product I'm you. Sweden, serve glad, Doug, full open? per location Thank yet where

Doug Baker

open. small. have say No. QSR They're I of is, restaurants number What relatively we a would

sales open other where care certainly sanitizer seen restaurants in have we've heightened sales, in particular. We markets, hand

lower so is And cases, even traffic. that, in many offset

John Roberts

much then And other lower you of surfactants that from Okay. less Do you propylene, help so before some down. longer are to and chemicals going buying be will raws? some think it's see of the lower raws? in benefit take these Or get quarter you second the coming you'll

Doug Baker

rest, overhead focused have which expect is costs, a in in the But much does of to that lower QX. plant QX, in but to to it's business, mean, term, of -- mean, to Institutional benefit short be I more we No, going acutely the would Yes. be what because volume just going going is that's raw and particular, to destruction story. I the absorption in the

John Roberts

you. Thank Okay.

Operator

Suisse. is Our Crédit Parkinson the question. from Chris Please proceed with with your next question of line

Chris Parkinson

Thank much. you very Great.

the terms terms long where develop the to very basically, environment? you'll In platforms? trends, still? your BioQuell yourself on your Healthcare of most term? there commentary are mode in are So, much. regarding already your solely in of supplemental customers Healthcare the further over their discussions in reactionary how Life you you how programs on and Or believe would Thank and impact offer you And competitive the rank do former, of terms Sciences

Doug Baker

new management offer these kind just quick scale. to think From I enter strength; a new But they That's sheet, also watching accentuates typically but to periods, entrants, comment. that the this this previously environment, would ask I'll entering, of, in sense, If opens say, Christophe us, way, I -- and then model, people competitors, you our maybe got a the I in watch and got your true for make Yes. long-term say, ways balance door. there. sure I for certainly also financial would you're think you perspective some that by to anything, traditional businesses. didn't competitive make much

I it. And broaden to then finally, think ask I'd Christophe even

think, Christophe? ahead a who of times other going are there's are then Even think are and comment. already interesting the an number toughest businesses. in places the different customers of those comment I some certainly having per through is I and thinking Healthcare, on your question maybe conversations.

Christophe Beck

came past obviously, growing the disinfecting they them helped hospital we've as sure proactive, it the as that maybe could months. making masks, well most And a as patients really serve also hospitals in as sanitizing helping needs so well especially reactionary Doug. -- in with programs the they been seen well in many you, have so overwhelmed reactionary PPE, hospitals, It's over in or fast. have because that comment got who clearly they that few with the Chris, we've the urgent hospitals. as versus a weeks media, was very to well, that mode so so hi on started as you Thank And them in

And coming Now value offering. enough, interestingly proactive. more been it's to that shifting towards the it's well, we've back

So is for a as prevent what's with we long infections, them hospitals for here. time, reminder, help a happening in acquired hospital is obviously to aligned what very just do which

really hospitals we growing. is hospitals how infection needs bit So the come reduce for we the really little is us once going forward. wave asking, them can see And them, those softening and are for really risks a of see to back to help tidal this

well, programs by further that programs about obviously, had so as them well they providing And move bit we thinking stay then we and where helped that require? down, our different, really then the What wave really from products hospitals a how do closed. long sanitation as think as so and the they they them a What are worked will hotels open down bit quite are if it's And away, reopen? they little so out well, could them need? helping about the been because so it's restaurants,

webinars can it taking have well, of dealt understand, as people the well had a them with? so to so people as How training our people, as this then really going of serving forward? of that with well can well, of We And between, training people, time well. downtime as it's as their kind in it as we How we train well well the well lot live as done where so thousands as be joining background COVID.

which has and also ultimately And Chris, we've services, been sure such. together them to planned provide our it's as delivered last really to audit that but not closing give to least, truly the loop so everything that making is

So, so kind of, very value far. the that offering been we've aligned with

Chris Parkinson

in your is to you. one disinfectants, what customers Thank ongoing. service, wanted versus, Thank you quarter hear into prior trends XXXX emerging believe all how just et disease you you're results, let's getting years? opportunity which global And cetera, kind seeing and the do mega and from ultimately just say, I see this across it. given your of Just of you. you you're water, mentioned the hygiene, component? elimination customers merge pest accessing pest other the will difficulties for of that still first imagine Got But

Doug Baker

Yes, I'll quick answer.

some yes, business, access closed. just mean, the of was I reference the fundamentally, pest the So buildings are

And probably They're not so circumstance that's programs, argument. better going the valued case created That think in access We pest where any our some be is we do services and will abate. pest short particular, challenges. to the But are less forward. going opposite see term.

Operator

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

Vincent Andrews

you sell-in across built-up being afternoon, where guys -- bit forth. a you products in lots you of that that the anything and have good Was so you Do Maybe just everyone. hoarded to strong of of hand universe talk obviously, a maybe stories Thank sanitizer beyond very have substantially? little the first sense could there you been saw and might you quarter. results about the customers think

Doug Baker

The in I'd are modestly we the the We Well, to were and that good other Yes. but sales COVID, talked a earnings. going had recovery were say having negatively COVID. quarter. before of we We we things. were couple great quarter Institutional quarter, a from realizing have a that good up in predicted ended impacted businesses having

saw there in Institutional quarter sanitizers, in in other across I of a of but really was though spikes also COVID, demand in and where, some heightened Where demand, even we demand the destruction the the sanitizers, Healthcare, particular, certainly, fast. some and first F&B surface we hand certainly said businesses consequence as mean,

does built instance significantly consequence as this consumption consumption and is What you consumption, more customers. are we sanitizer a where So, care do by believe big a hand too, being so of there an hoarding is not this. stockpiles have

So haven't you doesn't have it didn't places of -- don't I big garage mean but where that's a story. that's the it's believe full had somewhere, somebody That before. stuff the in

in think these real is jacked I has up consumption story dramatically the areas.

Vincent Andrews

if maybe just you could done you've you Or these there differently ask sales haven't other given, with go the that can't are doing -- that inroads much share folks had the on over made you Doug? you particularly particularly and have doing, I webinars. Or social you are everything, customers things getting then just being the would involved distancing potential large as sort assume after, market of your are than of some directly, And opportunity, are what -- the maybe years? I

So then how maybe little you've make and more this trying a personal you that bit of are to business that always wanted? some get

Doug Baker

certainly executives -- doing been and And front in we've corporate years army great other large, old we customers. blanket team. the We're open are get the is where doors past. doing of hard But what would environments in some over rule, door account we've doing opening. a ways that the them open by Yes. to with of these to not following learned we're look, videos. We're we're got an But have people. Yes. Yes, certainly,

going fill a some need there real understand we're that where can others. add true. are actually I'll several ask that in and a us opportunities we in instances Christophe that healthcare here, And They also have. too. it's life, our little customers, experience they to color saying, of now And and but on maybe large what technology can we of prove can And quite honestly, in have

Christophe Beck

Doug. we the our times. you, dealt weaknesses to But at them how with true during that's Thank in Well, also and customers so that difficult more strength accentuated philosophy customers. mind when of our the broadly, the existing for our remember look really we keep is others, will market of too. company And gets

who have that have we other meantime well. as companies So working customers with in been

current they that some a get for don't which very recognizing they're thing. looking with So partners to is us, very what comes of their naturally and good

pest program, the be provide. we all in help be them as water programs. can where can can very be obviously, sanitation, We're elimination, provide -- and can So new can where a with things position safety the prevention, a infection well, that company obviously comprehensive we cleaning it's

but as do capacity up can and large not so quantities supply that. we they those we least, products need that sanitizing elements go just to two well, one last And require on discussed, hand; needs of

extent. unlimited, we much It's more. could We provide have it to not but a certain

have the companies And we them, it doing and is do. digital can understanding how they're that last, something bring is customer. but all least as This capabilities together can't that for most a that not

helping line, us, term. long especially bottom it's So yes,

Operator

with Our proceed John your next is from Please question with the of BMO. line McNulty question.

John McNulty

period? to acting like kind I some Institutional greater about I regard you segment, how of Yes, be thanks does seem fears as should we Industrial there the are through for I thinking resilient taking obviously, that business this guess, side, resiliency. this Global recessionary have we my guess, on may question. of but that? go the thinking are one mean, it how With

Doug Baker

not Institutional going certainly scenarios shutdown in that the side. through seeing the Well, you're

that. has it So

we below I last morning think released that transcripts to was, be in said we total. equal resilient, in modestly the on what this or this of Industrial some later or year expected morning fairly we to

And going talked got some so, F&B you've that a on, you in about bit But some talk it? see have large Christophe, about. don't we've Industrial you there; why you'll winners too. stuff how

Christophe Beck

strong for businesses as believe programs, Beverage, well, Food We & that very sure, so before with the most mentioned, COVID, be has a will by way, business as Industrial, But business generation less good as new growing nicely, in general, well. be will Yes. ultimately. QX, very impacted, is been in very impacted nice Doug

well And because read keep need just sanitizing programs the has can the obviously. to but those consumer make we goods grown goods, so need not demand, sure people only operating in more companies as as consumer more they newspaper,

is humming. So going F&B to keep

half. in And flat in some with That's to year back The as in now. slightly everything come aggregate right then going we second continue whole to we to QX. mentioned, business, be so it know below QX as felt mentioned, and extent demand to last we a Water certain we've expect slowdown so

but Downstream the story the oil so is, also There's obviously, chapters of to what in it's do stable that refineries but two consumption, no related for a consumption, here. is being it’s we out what and oil matter fuel there.

where, business has interesting whole gone obviously, very to reason, whatever towels, be in that months highly the the so up Paper, paper, And resilient e-commerce past seems for over few far. goes situation up and and toilet fairly interesting

So, potentially last to stable all-in-all, of kind negative. year versus slightly

John McNulty

wanted Doug, just lot. I I to Great. then clarify. I heard Thanks And it, but think a

did kind we So, range? you be that the right margins somewhere way about and to we think into should XQ XX% say XQ, the as in the when about Is of it? it go decremental think

Doug Baker

you have you are but total, don't the XX% theoretically There fixed not that what time, one. particularly are will. And they're I they're variable. day we time, around if variable over in costs were because variable on are saying think early level, costs

in particularly QX, way a XX-XX to we're And on so the about think is thinking, better it. probably

John McNulty

Thank you.

Operator

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

Scott Schneeberger

Thanks. Good afternoon.

on of following Just that. up kind

year. XX% about to being alluded already this down probably CapEx You've

Thanks. what year thought how the maybe doing would through process doing think about more, progress as you curious see, Just you the about and maybe less? you

Doug Baker

think capital antimicrobial X took hold digital We aggressively and for ears their management -- Ecolab down investments thought all process; to I -- going the Well, investments, ask while for to I purposely I'm mentioned, investments. their protecting other this as comment. but plug

took it's the work, we it to it's And down is And cuts. add off better do double this you aggressively easier to for because it you than it earlier go back in are.

certainly have would we our room estimation. in So,

going part ideas, could money of early to before. have to invest return great And is kept things, where maybe some certainly long-term. capital And mentioned go there some learn going smart at do we outsized returns bay for learning we imagine If are we're that be I as I to that.

direction my here, would not So, moves expectation from down. it move one be if any that will probably up, in it

Scott Schneeberger

that up. Thanks just following Doug. And

and -- full side, the the look that steam something you're going to are On just OpEx with with investments, on ahead is and those business reining you go stronger in coming environment out regard the this fall to for through side? back or

Doug Baker

program it digital, not to roll when quite again, depends we're cetera, capital. that in just costs, both you the et out, things around is, it that takes OpEx it development, confident back Well, antimicrobial but on Yes. what

to we so the think remains. in We've now retained future. for plan, it's with COVID. all we COVID, significant. know that and that The critical before all I It stuff money would more is it's even absolutely important argue, the And reason was it's that

my And as to you we're could is go as going And overarching to say, what view. look, that's XXXX our try make to working be to do, goal possible. and good

the with XXXX doesn't to in be XXXX, else. really foolish manage right et in answer. locked business, like that answer is responsibly to all team, this, is that or not we anything XXXX, a The we're but right a believe our For and on going mind mean intelligently, situation, we're as arm on And and cetera. our

there would after and answer we're frankly, of But balance to is exactly to that we our it's that and And up, ability using I the things. really going consequence, given if to of artificially and this a allow do induced, your to advantage, our argue, as model Nobody's these clear going some time sheet show this going to went given you help have how resiliency is to recovery. the taking position. time be cash and XXXX,

businesses upsets. So intelligently. that reshaped going reshape think, We instead don't how invest to I times, we to to get We're once know like multiple need multiple know how to moves of intelligently. just organizations make, and

Spending we're a of care make money, so QX, XX-week the but is could we'll like And bad a to period. that's look I time time. tack taking. less about, honest. care. It's I It don't less waste making -- be on it seems

cetera. talking we're That's reopening how and who customers we all for the develop et create What around new for about comprehensive investments shareholders. value stuff, how and leverage team all ideas want been has create do that, talking we've our the programs focused for on to Christophe for about, that's the value really new and and we money been stuff all we how and digital, long-term connectivity have, -- that and where you clients is antimicrobial need And Bioquell, we behavior the is capacity think really ongoing how communities, over. you for stuff the that's

Operator

the next Laurence from proceed come Alexander Please line Thank The you. questions of with question. with your Jefferies.

Unidentified Analyst

were inventories they You wondering seeing Laurence. before I mentioned was certain or you? I are channel inventory's actually guys. Hi for wondering Were occur? companies much already you're can are their was Dan It's saying How normal? Lazar how that [ph] lean. inventory drawdown. that some mean, I lean what COVID.

Doug Baker

about it closed. talking food normal. don't the it pick a -- of all demand know is just abnormal, high fallen But because is their where exactly temporarily restaurants I drawdown as service distributors. now call normal has let's dramatically but in was inventory consequence stood, let's the Well, we're what being

like be So just make are what down was I consumption, will looks consumption normal up. based on to them. is driven inventory became too and mean, gone for going going models the much machine it's that inventory

shipping they're -- to They less buying. lot going shipping not they're not used a they're just buying, than they're and So more to. are than they

Unidentified Analyst

sanitizer products allow started? products. months were some introducing you're was would before introduce what you wondering hand what to say sanitizer ago you from prepared And and six then different introducing, up it or and I new products, say, mentioned and now you that they care is during you. for your hand remarks care thank Okay, go just how

Doug Baker

is sanitizer. and in Well, out and supply by I traditional we Christophe of is, from with our a mean, team ran everything example, capacity great driven huge assist else chain hand look,

heretofore than and went developed formulations allowed filling we and meeting using this were build different start us that to demand. equipment so new inordinate on And we

of I evolves would that There here. call are sanitizer from X.X hand what now, how views

move inside two. weeks So already is something being of do how that four even second rethought quarter in we stage literally now to happened that about

those So are examples.

in up we Around before, small lot were antimicrobials, the with a amounts. forms had early ways sold by didn't world, of demand sell meeting really forms but maybe in And January have they didn't very as consumer capability team we that others unique around up that customer as step came of our or we

of that will, behind good if done few And being What are we some so to. all to okay, going these you very already on? capital, we there of doing are permanent saying, now bet ideas going where the job a team really we're out we responsive. a to these and put want what And ideas, has is are

Unidentified Analyst

Thank much. you very

Operator

question. with Morbelli question from your the next with of Please is Rosemarie Our G.research. proceed line

Rosemarie Morbelli

any the change situation the Good advantage to the do is agreement situation I with you. everyone. to change something? you current afternoon that Thank Upstream, in they think take if given with going order going Apergy? of there to have wondering Are was be to you

Doug Baker

the wanted couldn't. the written they Well, mean, if agreement way they to, is I is even

successfully Our agreements will second within the quarter. still are conclude this that agreement. believe We

Rosemarie Morbelli

on that the business, facilities particular in the you -- of All do is -- right. your strong, And shutting the you're going which impact meat U.S.? some then given that packing was impact think very particularly F&B, down, to

Doug Baker

but that isn't generally us, highest business Christophe. consumption for I'll the protein Well, throw to part of it

Christophe Beck

Bonjour, Yes. Rosemarie.

comment a on maybe So F&B.

So closed interestingly down customers. plants not the enough, that were

right the point, That's part can major future, one programs we're that sanitizing that's business not more protein meat business, impacting more the offer. the other not so that contemplating us F&B. such. but on need So big it's is those Doug's for not the of obviously, To now. as And we hand, so customers

So that's for all actually, good so news, F&B.

Rosemarie Morbelli

question. another Okay. Christophe, And ask I if can

on you You the were what side. talked about doing digital

currently, the same digital environment path? customers? moving do you are Or you on your the keep the your needs on Given changing of think focus you

Christophe Beck

Yes. Great the It's actually. question. latter,

trying really not trying. even to we're stay, So

this faster. We interest provide in is to remote on it's get a order to are go staying customers connected of If to firmly the to be argument well, very the same connected customer, anything, growing, a can't And we the in situation path. service. to get is good especially where

as their I is helping And so before, reduce customers mentioned costs. automation

we and something that's the And more will the why technology, because invest in quarters. this they up. we're to down While ready in customers some ramp few road, that will is even things the will Whatever operating accelerating in need savings next happens digital so be it months, they need, more our costs. total

So speed changing here, not our the of we're direction progress, all. at

Operator

Thank you.

with Our from the proceed next Juvekar question. Please is with P.J. of line question Citi. your

Eric Petrie

magnitude due in China? to would Eric Hi. of but Petrie U.S. how the to any thoughts stay-at-home is and ask, This orders, there's Doug, P.J., be Europe Institutional? you wanted sales decline do some in on see compared I Guessing the differences to for particularly helpful, directionally extended

Doug Baker

quite And unified are fashion. Europe didn't different act terms situations frankly, the mean, of development. in in I a Well,

time different in act in at in ways had different of points You time. to progress different different countries disease points because at

will So in there's no one that answer Europe. work really

dissimilar, what shutdown. similar results, really of aggressively U.S. sometimes a hand cetera. seen clouds than more on percent went board is the sanitizer of some we've think kind I it et is, can across I cloud really say, the would the restaurant what

in stayed have the through talked is all Europe, of COVID they've experience heretofore. as restaurants countries number And as earlier in had whole You the a shut big not certain but countries. down, markets, open

you've there's closed business. at see. I expect are I transactions, data are lot which if is or the either the had What outside down of signaled, the there's our have a dramatic think And type think market, segment a restaurants to look pickup delivery, one indications I which number demand you downturn the and their or think, to to largest So public XX% allowed of that only of percent data around not, model. of U.S., which completely there's is And of the rate you XX% we good in year-on-year. on would depending plenty those in

Eric Petrie

new secondly, Or customer business, annuity do with Okay. opportunity see existing customers? customers and growing see as in opportunity increased And then per Helpful. you you're your account? solutions the from you do circling greater greater adding

Doug Baker

Well, always side. the on good answers I to protein the develop we have who there a both. love in concerned, quality time. time Christophe's are who providers right, on there be answer And mean, think we new over and That certainly, would that are not over highly evidence. developed with relationships it's be, relationships I would would high

going we And to within expectations. opportunity, believe base, hygiene, you here there's to while, will, new ample a which programs them help additional stay to quite is new the sell given around to if our meet then customer for new consumer sensitivity be

approach great at build So plans. I to both. That's all it's have we typically a for both have how times. a would chance like marketing We and balanced say, our

will fit this that so, well. also And

Operator

is Please you. from questions. The next Seaport with your line question of Mike Global. proceed with Thank the Harrison

Mike Harrison

afternoon. Good Hi.

in bad hospitality different, Can risk in in debt? downturn This prior downturn mentioned you under their sales general, accounts view you are Your of the deck kind receivable write-off or foodservice and thinking X% was around how the talk hitting collections about is financial really position customers. the how risk prior to and downturns. slide you of or your

Doug Baker

to give add ask Thanks. to some then perspective, it. we I'll Dan color and can Yes. his

Dan Schmechel

and Doug, question. thanks Thanks, Yes. for the

expense So, And, of trended the after an this you, bad you're gave think a event collection right. clearly, We going and is experience character. we around the different Recession. Great parameter be to that our like debt yes, how

We're with be say with. this financial to decades-long and into just that our position. Doug I upfront, relationships true. committed very experience mean, So this. let go confident partners said customers very in have me it's We we

That said, our our shareholder this it just interest. on also put guard are interest for way, for maybe. I'll our and we looking out and own

will We interest ultimately very customers great collaboratively also the collections. helping with them of with assuring work

deterioration portfolio we tested very positive very, have year. flow cash debt the and We delivering And of net the experience severely. across remain our confident it of bad is, very, very free

Doug Baker

company of the a you of lot I crises would is, time. global time. Yes. being crises lot And add, of see And disadvantage over global being the is, you a of advantage a a see over business

So good manage back, a these if history, between I and businesses. the even risks. it long go And there's a partnership to finance both takes very the team

be experience we've things go as So things through gone in Asia different points the crisis. it just could XXXX, Greek had that could in It through we in at Latin XXXX, we be routinely, even referenced in America and time.

that mean are the We going mitigate to have experience doesn't challenges we here. That all either.

capable that is I question would manage there. And fact there's we how increased it's bad to mitigate the team very going have a that. of a So we debt And be well and almost say, a do surety. then

Mike Harrison

things have the and last of an you one opportunity then like an It as them. Legionella. some guys addressed was seems of then when buildings time And your right. closed period this for All issue Day reopen that you you Investor is at

So start can some look at eventual you or talk into to lodging about Legionella factor we maybe and markets how might Institutional as an other reopening?

Doug Baker

will Yes, address this. Christophe

Christophe Beck

So opportunity. a becoming so question, the bigger water is

is is for true will hotels, is weakest hospitals. infection, sites, come in from general, true This So link. in true in This because the this manufacturing. those in

back well. previous little maybe question bit it's a So coming as a to

we comprehensive of water being eliminated, don't well, doesn't of serve the risk if is infection care the if don't our that company cleanliness, we that's the the if mean we sure food is whole for a very reduced huge forward. that the so, saying makes value risk take past that safety make where customers So the going difference

the becoming in Legionella. and in more demand, Healthcare. especially more water for interesting So Institutional question in and on This is is true so

the important disinfecting towers. of for well. the cooling Just or sprayed as And getting like for any of that water, right water to from which also it's quality building, the remind, water it's such. really the the also so coming food is drinks as But preparation out it's matter

period. water opportunity through the So, will raise going in forward those that segments

Operator

Thank you.

with the Please of Baird. line Andy from Our final is today question question. Wittmann proceed with your

Andy Wittmann

efficiency get I just And guess, an on Thanks. Great. to I you about guys complications where are three-year addressed of understand, the $XXX how playing million all other of wanted initiative the addressing with COVID. savings. that update, gets on cost trying to

savings you this savings? terms number on rate of incremental the I today. want us that -- the Can does maybe up at? just an year expect Can target you go see your annual next that's run into update update and quarter how or could really, your give us reiterate of understand, Just ended factoring of you maybe plans in savings that you you to year? to that just business and the

Doug Baker

I went with would expect the that. realize We incremental into the Yes. $XXX Andy, May still year consequence program. to we say, XXXX of million a savings as

a what lot we people interesting As going I let don't how be an on XXXX. I changes. Yes, to and of going know be May related mean, that it's time, know changes time. what's it's keep updating over and going to will to There's else. base

be certainly key is our still It's we're absolute san environment requirement million this savings year. the to coming from But in. $XXX component be this of going saving We year than given on SG&A May more a XXXX. will

Andy Wittmann

Thanks. Okay.

Operator

I'll of the this come to for At and Mike floor our back over you. to closing the end time, turn Thank Monahan session, we question-and-answer comments.

Mike Monahan

call. Thank you. on up day. will That wraps replay first quarter website. your time Thanks wishes available for for today the rest slides associated conference the best be and and for the discussion This and of conference participation our and call our

Operator

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

this time, disconnect wonderful may a have lines at and day. your You