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Ecolab (ECL)

Participants
Mike Monahan Senior Vice President-External Relations
Christophe Beck Chief Executive Officer
Dan Schmechel Chief Financial Officer
Tim Mulrooney William Blair
Manav Patnaik Barclays
David Begleiter Deutsche Bank
Rosemarie Morbelli G. Research
Gary Bisbee Bank of America
John McNulty BMO Capital Markets
John Roberts UBS
Vincent Andrews Morgan Stanley
Scott Schneeberger Oppenheimer
Laurence Alexander Jefferies
Andrew Wittmann Robert W. Baird
Shlomo Rosenbaum Stifel
Jeff Zekauskas JPMorgan
Mike Harris Goldman Sachs
Eric Petrie Citi
Call transcript
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Operator

Greetings, and welcome to Ecolab’s First Quarter 2021 Earnings Release Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. It’s now my pleasure to introduce your host, Mike Monahan, Senior Vice President, External Relations. Thank you, Mr. Monahan, you may now begin.

Mike Monahan

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

segment freeze modest the sales declined showed its the segment experienced segment That customer to the supplemental quarter chain by sequential EPS Life be short-term as the supply offset institutional growth. the continued overview, you a from sales refer also disruption narrowed $X.XX. information from $X.XX and impact a first sales share Specialty the and earnings from growth the business the first were our in improvement We slightly were of of per the EPS end was fourth and segments Starting business brief The quarter as narrowed estimated and fourth within further Institutional with trends the its through decline Other included Sciences freeze Adjusted the significantly diluted the that showed sales Industrial per was quarter that to Healthcare release. impact. freeze. by sales The share. declined Texas U.S. improved strong quarter. offset

support of the of rate economic vaccination recovery. social Our with markets are increasing global and restrictions further provides the broadly easing for improving along

share as to innovation, from our broad the per have from adjusted our improvement comparison that estimated the cost XXXX continuing XXXX the per $X.XX balance Texas will our drive earnings measures well year business strong leveraged operations, and share of exceed XXXX against service critical freeze. expect adjusted further results and share per help drivers, earnings excluding we over the investments as digital that impact results efficiency We in the by work and done

year, business continued seen well product once as difficult premium Ecolab’s strengthened as expertise, new the through strong again, relationships, our Over the conditions. value we’ve growth, underscored and market despite the past of service customer

Our focus We position as with believe in water other market will their through investors. along global meet our results, to more and base has by lowering our them with huge their sustainable remaining even leader long-term leading our important. superior driven continue food on position environments providing growth long-term clean this energy ability opportunity, safety, and performance strong improved yield remain to business our positions, ESG for our customer drivers become water, robust Ecolab our market opportunities these long-term and We while strong and ambition. that, operating growing believe help costs healthy our

Now here’s Christophe his with Beck comment.

Christophe Beck

in so Thank with expectations. and pleased first afternoon, very I’m with quarter, everyone. you Mike, our which right was good much, line our

that improvement our which discussed full show outlook. fundamental year in continued freeze, Texas the earlier us gives to Excluding solid we confidence business our

well quarter. underlying improving leading gets in as Our momentum, as to the strong business the margin results first across board development

team our which what full narrowing our we all trends. delivery. continuing is It’s of XXXX, QX EPS quarterly our year initiatives and position We as our capabilities ahead markets this, indication improving freeze in the in year invest expected global in good major the delivered leverage impact to for growth adjusted reopen. while showed the to a did QX significantly short-term the Texas prior Excluding our our a versus continuing also decline of

stayed continued improvement. segments all or sequential freeze, showed the Excluding strong

we exited especially saw definitive Our pick momentum, division, Institutional our fundamental gaining as in business strength up which get March.

freeze Texas and delivered strong Industrial fourth year Our by sciences strengthen digit life segment, margin. of for growth double further and maintained improved most trends our strengthens confidence good and beyond. to its full versus and quarter the growth Healthcare continued the underlying margin This was improvement. start their XXXX, which impacted solid

previous unchanged lockdowns Our ahead largely expectations, general slow China versus previous pace market what while and a remains still they we outlook America vaccination. said are impacted as recover North calls. of remained rather markets emerging Europe from several in our of by and moving extended behind and

might shift a exact the shift into global So the of the which also of some few timing might QX. reopenings months, recovery

underlying in strong accelerated quarter, growth expect momentum. end and markets growth We the second improving driven by

the in to expect year. the continue We trends second half of these

strength has in the objective clearly shows, we start this. been and year Our of to a achieved QX position

global Our to our market are record shares increased net pipeline new and strengthening. highs business

most. help Our world-class brand their customers continuing attractive new reaches our And Texas EPS, they protect this underscores vital to estimated we while are $X.XX their full we consumers with are to differentiated freeze. in the innovations them a the EPS help adjusted preserve excluding of time that of Assurance All consumers ahead have confidence and Certified generating impact natural XXXX become returns. that program, needed Science programs XXXX our on our financial deliver and resources, Ecolab very customers path our year that

where levels, is reached rising, position infection gap risk between ever new expected Looking water the it is and are than food where pandemic, better in and never. standards where world had supply water what beyond hygiene the our safety demand has awareness long-term a

the a proposition us our infection as positions proposition prevention of water, companies global unmatched on their and partner commitments. the these in help makes breadth trends. comprehensive services, leader sustainability us obvious value for ambitious most accelerating hygiene technologies global to of combination to deliver and capture them growth The offering uniquely value differentiated and Our this

XXX passion industries continued digit underground allows And momentum growth performance ability business world. Our earnings exceptional and scientific customers quality years to footprint, at standards the I to your pipeline, for execution, million forward look expertise we to to growth lead of XX world-class to dedicated for XX,XXX the breakthrough and anywhere double innovation, and come. question. locations continue to around in new unmatched serve sustain X experts digital in us deliver countries same our the with

So you. Mike, back to

Mike Monahan

That concludes you. our Thank remarks. formal

a we please we Thursday, the final Investor note, before Paul. you Q&A, St. our hold Operator, XXXX begin would XX on period? September Day plan question-and-answer As begin to at

Operator

[Operator Instructions] Thank you.

Our Mulrooney first question will Please be from coming line with with Blair. questions. of William the your Tim proceed

Tim Mulrooney

Good afternoon.

Christophe Beck

Tim. afternoon, Good

Tim Mulrooney

second I Christophe. last if have the expecting that the you Hi, year. particularly is know major talk recovery how could with global how given But comparison basis. your through recently second the see do Institutional I’m in that some other markets? strong of global about you the maybe everyone’s the playing in to a quarter? recovery segment on easy quarter, How you institutional performing a And that unfolding segment in is relative curious out U.S.

Christophe Beck

Tim. you, Thank

news. So as happening we on the well we as are it’s restrictions, few in other Europe in expectations we can markets We with can on institutional, vaccinations, as of the a hand, expected. especially pace had as see with emerging with the net-net our and as so well. have behind read of the and U.S. ahead And that slow China Europe lockdowns,

it’s confirmed quarter. are about how We trying that’s balance March, think being the April to first second did in pickup now I When in institutional right the during saw So that a in nice manage. the we quarter.

so in of Europe less it But way caveat the that might the year, emerging described or should expected So shift QX. we might timing net-net some is in I of markets some if the and the one as growth outlook the there full be reopening QX more call. of in that the for confirm previous be

Tim Mulrooney

and the within how a Okay. that been asked Thank my call talk hard levels That’s settled the do were customers, conference your emphasis segment they’re it maybe on follow-up, are thoughts. that to your given know curious great. think on I above And eventually And Thanks. you Or elevated returns on on about but that Institutional I cleaners, this levels? demand as levels has where folks virus know they like. relative think than to some there’s just updated pre-COVID spending pre-COVID Are the somewhere you how more and spending? you. you customers protection common theme soft surface that things pre-COVID have do can a demand. that open, like

Christophe Beck

Tim. question, Good

our corporate and than the refreshing on focus or others business have are going so our way well. Most as global To you of who are past today less new hygiene is very pre-pandemic investing units than it’s higher better which of going to the So be where well. customers. those a ones XX your the products, well bit think Regional less experienced customers little what as chain are to those in be But tomorrow. we’d them accounts, are strong measures than for we’d the our the pandemic in it’s know during it for weathered we over to or question than a for as basically obviously well, as months. bit be bodes that experienced the on the pandemic units going current to the is about what

and we well. better that in customers net-net, think a institutional So serve be going that are as our position position the strengthened has we to in

Operator

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

Manav Patnaik

pre-pandemic, wanted there bit just Yes. just little your if it terms guess, some was of competitive Good more Europe, attach area a a just and I Thank structurally to in afternoon. around on know elaborate I could you you. growth I comments was dynamics. –

you or So get I once if inbound curious just see we any reopening. was that this do changing, of

Christophe Beck

Hi, Manav.

your Europe, year. a on So last year had to good so Europe

well. our XXXX overall. in sales profit we We So had as went had margins that up flat

pleased having. that we on/off the if for I at critical So XXXX, And they with very approach overall in kind business that an region of it’s I us. that was are look development saw

So was Europe. first as continental partly ahead versus UK, reopen, the put of which know, the I’d in on way so to side we terms like vaccinations to

large good there, for are well. complete most So UK, most so countries of the instance well as so as development true France Germany a saw as in the continental curfews and countries we that’s for lockdown, of even Europe, for have over

restaurants a here, to reopening that’s a what summer talking it’s which which if be for hopefully going to to to change that So later part It’s before season. that’s and I be true. to most, protect not the drive going be to most going closed, hope rebound positive They’re going ultimately are then something of about bit going I had order all QX. in is is expected but the all than the hotels summer. the in

might were had have thought. as what So, for to be we shifting all so all, QX than to we similar going the But the in mentioned it’s growth we full before, year, some I of in QX. expecting

Manav Patnaik

I the just Christophe question out out had given it. the it on got water there, get kind water. grow growth freeze. issues was X% I given of are Okay, Or curious, I limitations growth scarcity backing rate? was that healthcare there just And out there? sciences the know like growing just and just life need water But is Texas then to just other was just can the any to

Christophe Beck

Yes.

our which is is nice very Texas come to keep see point few to in reach on still sure. and well their For promise net industries, exited in But X% that’s to your ESG negative is both help our water, the territory more to was it’s mining think going in And customers asking of line they to them mind always have quarters business. plus customers. going in as that which industries I company are water us mentioned in and so the even as good for ex we in mining, XXXX have some how a is ex-Texas way, you or heavy as mid-single QX freeze, years since light you next XXXX, well. which right zero in we it are have within offering our water important coming scarcity, for coal growing with objective the and and us feed the to And back for that you

momentum, years come. I to think so for the in water the

Manav Patnaik

you right. much. All Thank very

Christophe Beck

Manav. you, Thank

Operator

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

David Begleiter

the discuss that now when seeing you from to versus Thank and the you pricing offset are you. can raws? right you equalize might need raws pressure Christophe, prices that and

Christophe Beck

Hi, David. Yes.

if expected mid-single we but overall we On of it to the when past value I more well. obviously you in much shared, back have cost That look year, the than at know full raws the the which in roughly if to in something look terms in of as it’s we the was had indices had customers our had experienced over for create we’ve at we expected, But it’s that price at what we read we price that more raws pretty benign overall and that spend, initially. based for we than step on gross We is good as QX, look capability the picture, well. and we kind that but what way. a to as

the the for slight So now I’m a it percent, it, take about net rapid do it’s are or good we’ve in XX means back nothing XXXX and look even we the so. negative. that shift we that what within XX second some at year time. we for And as in not get them, months is teams not doing today the The we’re versus dollar a a But time, which exceptional experienced so way just as over month, to so margin past. months, well tried value, a right over might seeing so that, what in be reminder, and sure it our

David Begleiter

good. can discuss competitive the marketplace. you the And intensity very just in No,

is share profile to about one – competitor. expect more versus you public. of have You go the you public your in year and gains perhaps to now what as a saw do QX competitors through Talk your you

Christophe Beck

that pick you’re competitors that up with about to the we public happy we the happening actually our quarters when one well. during is as you businesses number And that that the good. of that we units few all leverage that most, which so have existing, in for in we the really I’m over really of to gain team that solutions the become that’s can was number we obviously right, objective where expected, gains few as not the an and past reopens, talked if serving, tracking weeks. it whole are share So we over need pandemic has past the And we’ve serve share of

make We them need better less with better be And our familiar lot respect it third when with overlap a than them. about been for well. a - in would they markets. a many, us very them years. And because We’re I we as We’ve competing them. end of many say think you to we than

times we do than larger, Xx as invest digital well. in and more they We’re XXx R&D

and about we how gaining what do we on So them good I feel marketplace. really are customers the shares can for our versus

David Begleiter

Thank you much. very

Operator

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

Rosemarie Morbelli

everyone. you. Thank Good afternoon,

Christophe Beck

Good afternoon, Rosemarie.

Rosemarie Morbelli

XXXX to you vaccinated [indiscernible] do all the in you doors and its be be help of to order all from what and including could what Europe the recovering? guys? the looking you there Christophe, Americans are at than So do are would of better likelihood freeze hit do you order that the outside close you to going in level to Or currently? need to What open we need Europe

Christophe Beck

increased mentioned. XXXX feel very Texas So about – adjusted saw right to delivering I delivery the EPS, these has as now, freeze you good excluding that. our QX The deliver confidence

of old well, momentum. will is a right deliveries Europe target. definitely things improve the for better the If Texas. to the that right and some you But overall As I QX with as know now it the But I because mentioned. there described excluding timing that in everything we more thing, QX be now, in Europe, shift think as be gain I we the try think target good of would EPS before, between might delivery mentioned XXXX reopening than

Rosemarie Morbelli

then bit And looking a the talk could more areas SMB, in that little segments at segment? you Thanks. of Okay. or details particular different a

Christophe Beck

start XXXX best the know, was obviously so and had in quarter beyond businesses Last a good well. growth, The all it’s as well. pantry did the SMB margin, a good The a good had improvement. you first of year, loading, so when our happening strong year. as little segment in SMB and industrial one margin good as bit

but So about underlying, we different little compare is where It’s feel some have reasons end now, a going. right challenges good bit by I SMB market.

very in because impacted brews in progressively, We a That’s everything see beverage of which beers some for good. that we the So where milk U.S. is Latin were especially while being is closed. but in products strong improving schools closed. the so America places, had and improving

That’s bit a are show quarters the that’s right next good for underlying, a comparisons fees softer the the previous pressures the I good and being in delivery segment to the future. as that’s strong generated So to new going look past. food well bit good some in year-on-year year comparison. versus the because But the little be little but comparison, the business be a going for And SMB, where we less now. especially where of bit as used in net-net, QX the when to have few it at

Rosemarie Morbelli

you. All Thank right.

Christophe Beck

Thank you, Rosemarie.

Operator

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

Gary Bisbee

Good question, guys. update have just programs? What’s left the give to Hey then can on where likely achieved And from how an XXXX? you achieved us you we what be much are those you. for savings with in first the I afternoon. XXXX? to are guess Thank date? programs savings of big cost Sort beyond

Christophe Beck

you, Thank post-pandemic program, I’ll it made Dan, strengthen But to our savings well. progress the the that which all generally, in as who to details. pass our meant cost has performance, are Gary. we’ve

things more that, with had Dan, expected. some than So But progressed detail. better maybe if anything, we have

Dan Schmechel

Sure. Gary, thank you.

build some you’ll the We ChampionX. has recall most expanded XXXX initiative recently back target. savings industrial our cost some time reference, We up common program, reshaping new anticipated in announced maybe business of was the was of things it related expanded for spend, it’s institutional million our capture offering investments savings Just cover to helpful covered our $XXX again like to ChampionX some XXXX. digital in with really field the announced probably to delivery. the improve originally cost then maybe pieces chain and it principally we cover accelerated restructuring, to to high to again, costs of aspects This a at business, and cost which

add targeted you have cost So and all we $XXX a that million. savings of up about

is is $XXX big that incremental piece it if help that’s the – end the XXXX. after the XXXX a neighborhood the you SG&A so by $XX it program built in that million, end is piece at that there’ll that margin. sorry. the will look it bulk we just think in program – the be The fully is by in you institutional fully be delivered piece big in a of the bulk there’s is that’s be big of a and in that entire to of Some the delivered Year-on-year SG&A. pieces remind essentially net of There’s but XXXX. of gross of I’m this and capture I’d to of we XXXX, accrued expect million, of lot will XXXX

Gary Bisbee

XXXX great. think performance as you’re just as us And Okay, growth multi-year you how get those Thanks. for back thinking appropriate? to a follow-up long-term you targets. we question, aspirational a how can we thinking then post-pandemic. beyond give sense the the Historically you’d laid more of Or just, business are out about Should normal the number multi-year? about

Christophe Beck

just make sure understand I Gary, your question. to

in and earnings growth sales So of right? you mean terms growth,

Gary Bisbee

Yes. That’s right.

easy moving there’s So next comps this year’s years, over parts, targets the are I you. lot those three, a two, Thank normal know four reasonable? but of still got and

Christophe Beck

Yes.

going X% in most for rise our zero true consumption. terms in ESG search the the when for many and standards not net about to EPS did to organic, the of future. it’s anything, change in X% position delivery, improve profile the hygiene has you so Gary there, the has that XX% out ambition, If think to their strengthened water companies to many, Our XX% been changed, not has years, of

need for solutions So digital well. the being them one as of

going If are future. all things of improving, our forward, expectations so anything, has as for growth so our those no So position terms are position change in that improved. the

Gary Bisbee

Great. Thank you.

Christophe Beck

Thank Gary. you,

Operator

with is questions. Please McNulty question coming The your line BMO Markets. Capital of next John with proceed from the

John McNulty

starting may question. Thanks that that changed? have quarter? specifically, how accounts number In And account it of point? at or quarter I a in pandemic at where the that point? see given business to taking new serve speak of we any the this I And are are early launches versus Institutional signs the of for this early potential my to can then Yes. guess to customer you kind Or is the this you little prior guess, bit stages

Christophe Beck

of the But that a exact is keep a share of on buying having the which growth don’t going which going per obviously feel for of is accounts long I We part. for reasons us. number what say we’re that tracking month, by more confidence after can accounts up giving without us to monthly or John. number question, the because from month our is accounts forward business for solutions Good the competitive customers programs good talked grow we are time, basis actually most

for one solutions So a good as buying in I’d our well launched we’ve as the going the driving that year in and well requires Ecolab add retention buy as forward. solutions, as more well institutional of most accounts, to this to order Certified a like in more this certification. Science to with thing is it’s helping program solutions well, and of customers penetration plus qualify way, And is ago

of the interested in keeping well but because certification at are are So customers the not gaining solutions, are them same longer only keeping we and as accounts number we time.

John McNulty

if way program, – tied difference specific Got like-for-like verse looking total in from Science there’s obviously. is customer about value a getting a the a at to into think it. And Ecolab the you’re Certified on program that’s like the that not there customer, one

Christophe Beck

we much in more obviously So one make order the it a pandemic starting some was not around that Science plan But really is into program, just about bigger bought protect come. Ecolab sure cases they and did same they’re opportunity or it, opportunity when while And guests. the quarters to their In in looking launch of some a where customers the that our they’re in we from a reassurance is is and world with pre-pandemic the to be buying to outcome smaller. solution the everywhere they think hotel trouble everything I much that case, coming customers, way gap our some us an if the help needed bigger. for time all to Certified going at where restaurant, for long-term could depends came that’s recognized of guests as the from,

well. as measuring we’re So

are of pretty we’re Science brand So consumers as not Ecolab Actually media, significant which the which at far the guests pretty by that call it’s Right program as the locations industry. the by well always a in recognized U.S. one Certified, it’s supporting as well disclosing certified but same that number time incremental in is gets large. know it’s that generating we’re more number number, as the or sales, and in that as you as by them now we

in in good our institutional. all grow share all, market this to So is really

John McNulty

Got the it. for Thanks much very color.

Christophe Beck

Thank John. you,

Operator

comes the Please from question. with of The John next line question UBS. Roberts proceed your with

John Roberts

cleaning or you. matter more doesn’t isn’t because that theater Thank surfaces important. Does significantly is transmitted it on COVID, it matter

Christophe Beck

in journey ways. many transmitted different be can Infections so

that, for vector, there example vector we hands infection we and I hands One as what can contact And eat. surfaces so longer-term, when any like human we are As prevention, mid happen think other COVID, touch. well. we well, to mostly is think transmitted COVID-XX, know, it as know. what drink, surfaces air. out in you through the infection It through hospitals, a It but infection all but that be be It shaking, can big air. could as But illnesses not many as short-term, the through transferred you of is COVID can you about such. the for infections human be true obviously, you other are it’s what well, the many that one is number think that so contact be can about or

making public have in to as So overall, done, sure well, can. of need a of surfaces reduce you setting you that infected number the you infection

John Roberts

one-time X% and XX% Okay. And that Good difference? about talk answer. healthcare sales excluding including, you could was

Christophe Beck

X%, sales getting to underlying plus encouraging The used have and I’d to up all the you’ve in these of of main Healthcare difference step good say, well is – underlying a all, pre-pandemic business. X% which margins is very so before a like so first way, good as towards went this for seen X% up

UK, difference obviously, X% XX% the made the that we’ve driven countries world the the world. in during in is the in the Zealand, is many Australia, significant the the New around Now, in between some infection solely Germany, in by deals risks with address, COVID-XX governments pandemic and This around to in related.

right So it’s stapling-off now.

start you to knew last we against then of year. high business as is So We as underlying to compares these the very back think. the that. get well growth reduced. growth And And be going that X%, you

John Roberts

Right. Thank you.

Christophe Beck

Thank you, John.

Operator

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

Vincent Andrews

ultimately to in you that recovery, what overall? working ahead I remarks to prepared the in was can the translate inventory capital year, you’re mentioned down, about versus but free last though expect $XXX $XXX ask were trend up Thank just even the building million, think you’re how you. should I capital the into inventory working then just sales flow cash? you million and about Dan, quarter noticing we how thinking going free cash that’s this of And about Just year?

Christophe Beck

it I’ll second. just you, Thank Vincent. pass in to a to Dan

right. it mentioned You’ve

sure that, can So flow working reopening. one really, hand, on happy states we various with on it’s on add that the very delivery make with quarter. working enough we’re piece, produce to want us, the can cash so capital for the in we And has capital. first an product comments impact that. that in of for But world. That’s Dan, the markets and you some And the busy the around happening on

Dan Schmechel

answer of your question. the that to be Thank core might you, Christophe. the And

we make are have accelerates. our the to so – reopening their place that that very serve the internally, in inventory, to as And right mistake is product look, product going to the path not customers we’ve clear been right going to not

versus Okay, we’ll so same built to, my will stuff have right you’re end end the we customers the significant right. both because where time versus our also inventory year need last we continue And year that We it. is XXXX. guess

be, the there’ll of will inventory, recovery means capital we’ll for we but appropriate accounts And business, the of balance though our more full are with perspective, shape the even CapEx our the in stuff, is level discipline. balance in net some The sheet receivable what generally, will in in which of be it also accounts about completely on that flow from continue our which you expected delivery receivable. will to the continue If rebuilding payment to business XXXX, have and cash the to appropriate. flow bigger. pull purchased the cash higher the most invest year, in if there vendors think including will to think think company metric too, for as of sheet is be the business range, very be buy on very that the mid-XX% people that me investment it be terms rebuilds, the as number a which continue a good in I more working will you We’ll in for and to good the we conversion, continue about and manage But an matters model. the the

Okay.

Vincent Andrews

you. bolt-on M&A where Thank And with are you maybe Okay. on sort pipeline. comments Christophe, any the of

Christophe Beck

we’ve We’ve work. quite have We’ve that’s difficult obvious a of very a pipeline, lot a relationships. a always the less bit pipeline. rich COVID. M&A But done been transaction lot strategic the we Obviously, for reasons. during With working built question. a of We’ve done

out there. So with targets have we

that absolutely in valuation for that driving sure higher that are about us good want we making do can places I invest margins that we I that higher pipeline have. shareholders. good feel and for growth and So the are and to

it’s come. So about to I feel good

Vincent Andrews

Thanks very much.

Operator

Oppenheimer. line The Please proceed of your next question the from is with questions. Schneeberger Scott with

Scott Schneeberger

looks that through Texas there much. this have what lost near high we’re numbers in you curious Could this freeze, a the through it third, second you are drag is lag end $X.XX if just the of the Or decremental occurring? seen with elaborate that correct. to going And margin, that the the possibly how regard like on, my quarter, And revenue type came is very impacted? Thanks afternoon. impact? fall just April, full Thanks. on to Good on please now of

Christophe Beck

Scott. Yes,

be science, QX. to this moving communicated us, we speak, $X.XX as and the not we right $X.XX see have number the So impact remaining the expected we seems it’s expect really perfect can impacted Texas as QX, to you the as things We which behind freeze, we imagine. $X.XX,

control saw reopened? QX. that two mostly is true us our when It’s I and That’s well. froze, The we like which for QX, is obviously This It’s but what as what number, April, the happening issue was total can’t that suppliers things such, as had operations. already as our for customers. closed, what backing $X.XX was So true March something expected. up it was But $X.XX we across only is in $X.XX in quarters. backing and

Scott Schneeberger

do that onset Thanks, what upside the the where Christophe. incremental curious, yours looks backed pandemic you the impact, of forward? the weather in just very segment, And I if then out since the margins. and peers industrial going of in shrinking? It see elevated And very segment Thanks. strong

Christophe Beck

remarkable. been knowledge right industrials in that You’re working the has

XXX basis it were over both few slightly it years, stays was points XXXX, Over in the declining. while

materials is generally and continue in pricing where might provide in going a especially, margins lag winning believe business. improve As know, I to raw good And that forward, will which also so quarter-over-quarter because with was Ex-Texas, the bit. that value you to double-digit that’s There will operating we was our as times industrial, be a increase, well. But unmatched. a little things so QX, customers

This made or of Well, they’ve As for is help help can XXXX mentioned one reach the are coming before can. the water to driving XXXX. our growth so to else most is us, where which had especially, in margin. truly as we research there’s where the is ESG something them technology that business and they because that as most we well highest we need each no customers well. for them in driving That’s as invest margins us, better is commitments that

So it’s feedback, margin. is driven as natural good our by driving which good growth well,

margins the answer short in are to improving. going to keep your So question industrial

Scott Schneeberger

Right. Thanks very much.

Operator

proceed Please questions. with line coming Laurence with your the next Our question from is of Jefferies. Alexander

Laurence Alexander

afternoon. Good

Just speak margin hitting entire as XXXX, on the discussion for up versus XXXX, the should following price new you margin firm, a and high. be look at the loss,

Christophe Beck

It’s a great question.

hard in exactly So going be to for it’s XXXX. it’s know how to us

estimates. other XXXX, In by is few years really So we and way few the why all as the hotter. one successful invest equation. much have we add sharing year. come. quarters for the we’ll words, we’ll pricing so drive be over past when We’ve savings knowing are The so even that. well there like we XXXX of estimates. plus so so over and we driven much create that Well, value in and basically way XX% create last get value well how our years been and be probably reasons so is – that or price. on in improved That’s next return. quite – the doing have past as the them they margins It’s experiencing a XX% like year. the been services This to years, to back the increases deliver a especially raw They Obviously, we we far like how material

in are pricing into going being and know going materials that on but never depending market, raw to So are go keep it’s the range, X% XXXX to I I going to don’t know be roles how how our down. XXXX X% is to that plus

all-all long-term. in well be price driving over up it’s and to be up as going going the to margins So it’s

Laurence Alexander

elasticity where then demand any you’re pricing growth? And surprised markets of the there organic seeing are you trade-off and have clear end where a between been at and

Christophe Beck

negative a manner? in mean You

Laurence Alexander

the framework related that like, Have changed over kind Just you’re disruptions. the about of end not – behavior new anything COVID course has mean, okay, market the learned where your of I you anything was expected? in

Christophe Beck

increased trends ESG all No, of if this driven one sustainability interest have by hand, commitment. anything, more it’s on it’s

order they’ve are return for becomes same also other performance in you are hand, handy better performance as Well, to cost Think or because now. times end made our solutions creating about get the do competiveness also labor ways. do the becomes from much same and the financial – improved perspective, for image or where it’s invest more But can we has you markets customers is to the a which outcome, what challenged, some work, cost there. more in was on even as So a the perspective, a from outcome less right economically important. some more out of those ready more customers customers it but well because critical commitments

well, it’s well, both need more good time. they of the So important using we more they is that should environment sides On order as reduce do impact so sell. what that and reduce for natural cost customers sign well, a so even in resources that in why than economic to segments, on the which as do they most difficult

So cases. good specific is in the us. This end terms of a both markets in story for

Laurence Alexander

you. Thank

Operator

the W. Andrew Our Robert next proceed Baird. question from of with line your questions. Wittmann is Please from

Andrew Wittmann

Thanks for taking questions. my Great.

a one. wanted couple do margins. of had I You’ve questions another to on

You had the segment. the one industrial on

fixed level past you thinking the of wondering the that months had if business months, But it just goes some a to institutional of that think margins starts any think hospitality but question stuff, the get lot I recognizing healthcare – just customer not that normalize about way if that that’s the the large secondarily on your margins cost obviously, the had some on place, when XXXX that changes segment be comparisons pre-COVID? up a, Just and that make leverage maybe as bit your to then historical the costs back any obviously question. back least consolidated are far maybe think cost but XX you would the And what’s margin I now reductions to programs and the of orders happened leverage the levels, normalize or on probably but away, I significance, I segment the last so reason XX governmental is You accounts, in they service of levels, be above different here and declines out base that. probably other year, your two-part going the appropriate more national gets than on the there with in starts to to is so ahead. that at kind thoughts to segment talked sense put segment, you’ve food margins that stiffer was to of want that little business to you about to here, in over with, a the volume back changed, those were don’t start fixed a the way detail to the helped things margin somewhat much do in the revenue

Sorry for the long question.

Christophe Beck

dynamic very very performance. all, with healthcare, first I of you, business, healthcare, Thank in good. growth in different mean, institutional, that’s No, of Andy. starting Maybe with underlying the so pleased

us infection long get patients of was so which to is which clearly helped good. there moving an So many prevention a X%, for in COVID-XX during the taken has it’s years these and objective gone up days customers COVID has awareness towards because that very time, and

here So underlying that’s to growth solid in healthcare state. and

future about but year, on margin in as had those deeds cases good to Second really in talked improvement very in margins, feel good is one-off keep and going XXXX I the that the we some improving last earlier, that partly well. with government

So this is here to stay.

further, COVID impacted as So especially, the overall improve out the the very really in of of different on to XXXX, Institutional good the company, so up is saw of XX% it impact most was and end story. story we such. in that’s which division, institutional us all the It’s the me, to our that’s business not company on is Ecolab healthcare story, for healthcare. which as know, that’s our plus being XX% at coming of

pre-pandemic. we I in think a XXXX. things, what in the from lost we every improve going lot would So XXXX get were back Andy, to when quarter, to we’ll get I going and the first one And say we’re margins, close is about it’s where two to

way, this as year, as invested question, in probably help so So of the the in technology, the post in to well, that organizational well early that’s of we’ve invested second that part well, XXXX. I but it And field your We’ve performance. call pandemic, development/restructure. not end can going if our

of seen if anything, over versus what institutional we pre-pandemic. should have margins mid-term the improve that the So

Andrew Wittmann

much. you very good Thank Have day. a

Operator

Thank you.

Our your next questions. your shoot Rosenbaum, coming with line Shlomo Please Please with Mr. question. is from Stifel. of Rosenbaum line live. your is the question proceed

Shlomo Rosenbaum

solutions. before about year, back pandemic, bit where want of little might know what through about you I adoption pandemic pull about talk a more used lot there could that Sorry. of to were happened made there discussion didn’t be the in a you the investments to areas have being where the maybe been last Christophe, of company and because the the the over the digital lag? been have on Can investments pandemic. areas has that accelerated be

Christophe Beck

an and what’s party falling for Great started we that many, question. when of we true. It ago. differently, so monitoring pool did XX important Shlomo. called Actually, Thank that been Digital many especially was obviously, institutional, on true us has years – you. then years. for moved back was

fast high year figures, customers we business XD so over that related ultimately, could than million to industrial forward, solutions And so we digital things obvious because go reasons, so over for embraced estimate we water not in that as trays our to a more and if digital. I XXXX a many well. So before. locations have well, instances even for have the accelerated, past, in as COVID, mind teams Keep invested in $XXX for

genius, pandemic, it during obviously more handy as as such. but were such, that became was the very So moment ready for that well than we as luck

main think value. So in when think three first drivers about drive for digital, the I us one is the to I customer

as instance, growing is by this it’s that well. digital subscriptions, said all for programs, So it’s technology. prevention very technology, regional a We nicely. They driven

us by out solutions one during improve COVID and as to the world. platform then well. XX,XXX is the around rolled the as created and our value world, our in productivity order around second everywhere going to help the you that’s The field people Institutional,

had pillar also – during what customer the in which has pandemic. that So of gaining customer performance improve. the experienced the before, the why if our is in for nature we one well as answered because that’s in last instance, will gained of a the of traction XXXX And post has that institution e-commerce relationship the that reasons just I remote pandemic, is

three digital in So at adopt we as and double speak. we digital I enabled And making in billion on the our roughly $X.X in XXXX. all progress growing when fronts good XXXX, progress say looked digit

in story, good all. very a all So

Shlomo Rosenbaum

Is kind the great. last that Okay, or year center to the progress when quarters? going over If the a verticals new in note any I to could be there on there anything data of is report follow-up, area? to was

Christophe Beck

up has preference, whatever Well, we’ve Zoom it’s remote of your well is been and on, ended been a on remotely applications an of Webex, great industry working as that system story. booming. all monitoring it’s Because or Teams, so plans,

also As numbers see, serve, came well really enough. luckily so pre-pandemic, as business as as, was we you can industry last from a we which the that data tech year the which created from dedicated global centers

so well. the customers because and are as shared ones has they water to time, centers in big improvement, water savings. that us, the since strong owning enough, commitments interesting very openly, for At of this operating computers which So digit the Microsoft companies income as as tech we that we of And those double emit this it pandemic that it very, such, use back the Andy, them and heard strong have because for do operations. terms or for they that’s you’ve growing where then, well. need made the been business data use They’ve carbon serve, all so same the has which the work to from COX ultimately them the brought Well, publicly. energy is the

that’s by vertical, new water that the driving growth zero committed is secret That’s that So it’s net for all which very they’ve that not in a promising. the them. XXXX. plan the with developed we’ve And

Shlomo Rosenbaum

so much. you Thank

Operator

proceed you’re Our your question. next of Please JPMorgan. line Zekauskas question the Jeff with is from

Jeff Zekauskas

go where business rules. a institutional it about There other business environment? it than going restaurant restaurant it Does different XXXX and forward, better? future, different the Or to the hotel to factors. future is, of much. the past think in normal to the may Is be has Is and Ecolab in a distancing the be that the there hotel going worse? When it you the be very is may place? go Thanks restaurant in back was does

Christophe Beck

not where to was great in question going And It’s XXXX. it’s question. and fundamental it a a go back to

every vast end independence. our to for to it’s better. I going It’s markets, about to the – during I think if give to our hardship is chain than it’s it going business. survive, true for can those be of I been the more majority be think not restaurants If customers, the financially, one had pandemic be ones obviously, difficult going it’s the so which to

one and This customers, expanding them of accounts first invested as have of the well the terms serve other foremost. who in are we corporate as all and with ones in survived, units. call change, more So well the we is who operations

to it’s hotel the exactly situation but So hard few know. do question us. future, restaurant that’s tell, or be Then to a if to be to the we either the know in to on of things for good going how

standards expected hygiene guests versus be going to order XXXX. than going in a the to or a to understand. during by the be On That’s so sure, one be hand, lower pandemic. time all we Thank God. and guests asking higher the the a up It’s little XXXX. all consumers it’s will But the bit than pretty

inaction in to see expecting So higher clean clean. what’s happening mind safe, want to They their clearly they is which good. us hygiene and standard, in order feel that more telling they

with forward, completely bigger grasp so as good in to more the The is to labor your growing second the the Well, businesses It’s as those it newspaper. It those but issue on is become on is completely, pre-pandemic. for an is because are issue. we new opportunities grow. And see a thing, solutions as that well be shortage deliver haven’t us, is to I takeout, how as going sure. our It’s last the figured to going that. which harder the keep we And them much less going going to going which more delivery well, for labor read was as helping upside. out even

So our XXXX, to pandemic but going the be as customers, the customers, better be a us chain to it’s different it’s net-net than going for going for forward.

Jeff Zekauskas

materials for you? Okay. sold Thank of that. of percentage what And you for cost goods are raw

Christophe Beck

imagine. And it businesses, it’s in as be business, much but XX%, but obviously, a pest roughly higher, the elimination industrial might XX% lower company. for can is in by some average, you It’s lot depends

Jeff Zekauskas

much. so you Thank

Operator

is question from Please next Our of coming line with Mike Harris Goldman the with question. proceed Sachs. your

Mike Harris

Good question. taking afternoon, thanks my and for

took for your I quick positive in confidence? the path, I mentioned I the that expectations a the you was Christophe, mean, internal you a guess your of XXXX follow-up first Just gave you earnings the that was that level. boosted that results what surprise kind just curious, quarter happened confidence earlier to quarter

Christophe Beck

QX, far The Well, bigger in well, still, versus Mike. performance thank backwards the not our so us great so in U.S., And QX, question improved for exactly when And a so as you, to the QX. versus QX news. know was that looked would the was you remember, reopen. in especially in QX we down, when states QX

of not things hoping in didn’t that is and the we question continue it January did did XXXX, know. so did. how February. and our Obviously, to they So be improving ultimately, QX started we going year was, we They as in they But so were in would that March.

So thinking, QX we a quarter QX. would compared so as versus were be difficult

it ultimately, we what So was modest better done QX. in improvement, Ex-Texas, felt

the for I look us if has beginning is so U.S. been states So of since reopening at the good the news. going forward, good China the Obviously, in that, years.

on really of two So those markets are positive ledger. the side the

other in hand, emerging a year the difficult in more a like you India are so situation. up Brazil some or that markets have On

And the net-net, it’s in I Europe, timing, reopening, as say basically to because happen. of they’re if the that that’s expected. would that last So thing going so is,

of expected. in I all QX might in the so but that that we shift QX, So towards some trends net-net, the of growth the end feel had QX, as expected are in all,

as this excluding it end bit the EPS we year had the ahead mind might the a at Our year, full cost of structure initially, Texas but different timing The that’s is up expected. in so delivery, impact. ends than what be little XXXX certainly of

Mike Harris

that Okay, thanks color. for

Operator

is Our of Please with next line proceed from Eric question with Petrie your Citi. the question.

Eric Petrie

between infection overall a healthcare? if much Christophe. of to institutional and How morning, breakdown sales prevention you could are your and give to Good

Christophe Beck

XX% of as hotels obviously, expect and do what was products, in doubledigit was we for XXXX had healthcare, has little we to in the part you had expect the is in pre-pandemic, lower hospitals imagine. in highest a bit the XXXX, a So you sanitizing these percentage in higher that such growth a we customers buying good growth. more the But that end infections same is which Last can the had the we . maintain even consumption, of that segments number or what overall restaurants with combination year But in very as we do it the so sanitation XXXX more it’s the roughly true the time, in as at delivered overall would what both bigger of than products. we got we close grew it to XX% company and what overall much segments especially close than to goal for which

Eric Petrie

peroxide. or accelerated prevention And seen your of infection attrition products or then to you follow-on how as And Helpful. peroxide? sanitizing hydrogen alcohol chlorine, much any based a chemistries on are have

Christophe Beck

of we one the Yes. have. It’s that applications

of as belongs too less, about market the much or differentiated disclose using that such, by don’t think well. kills we if Last so No in kill that we an absolute XX seconds is on need of you COVID-XX as the done us. the you XX So usually COVID formula that this obligation. seconds one are year,

but obviously, pretended the unique very you So on market, mentioned. been that’s and what

accelerated well. one us, it we’re beyond as the well. well. with as for So that’s of peroxide, use solutions. the We as it like that going hydrogen But We

Eric Petrie

Thank you.

Operator

we’ve you. Thank At the of reached session. time, question-and-answer our end this

further floor management remarks. for Now the back hand to

Christophe Beck

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

Operator

This Thank concludes you. today’s conference.

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