Ecolab (ECL) 26 Apr 222022 Q1 Earnings call transcript

Greetings, and welcome to the Ecolab's First Quarter 2022 Earnings Release Conference Call [Operator Instructions].

As a reminder, this conference is being recorded. At this time, it is now my pleasure to introduce your host, Mike Monahan, Senior Vice President, External Relations. Mr. Monahan, you may begin.

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

refer diluted overcame unfavorable digit in increased brief inflation were adjusted substantially in Specialty, rapidly first the Institutional costs a all chains the in information deliver to global pricing performance growth the also Industrial We led growth cost with product in currency disrupted continued the overview, infections you in the strong accelerating sales new the We sales gains earnings in per with a earnings digit to geographic quarter rise COVID regions. our attractive wins while environment uncertainty. the further Starting drove later & geopolitical per quarter gain. and where changing Europe release. supplemental and diluted delivered Other by driven share new segments recovery double strong by the share Sales translation further business double the and and in early exacerbated slowed the chain war Eastern in supply and supply

surcharge the quarter X% in pricing, accelerating estimated the X% incremental last pricing and now aggressively an a announced quarter $X.XX look alone. of We year for Along structural cost an full strengthened expect quarter. realize from we the inflation. for quarter, up We top in overcome when estimated increase added we very momentum in our balance with our the to to Our look for strong product energy XX% first wins, delivered And of reacted to new adding X% delivered to to up improved in line strong versus soared year. of pricing continued XX%, reached product per and year. our the X% costs previously fourth substantial share which productivity, the first to the portfolio cost business and inflation continued business the

quarter. accelerating second half with a expect and exit to macro through We for as per adjusted in earnings the term post of in COVID the full value now there's shareholder Beck realization, timing And enhanced XXXX, business well the term become comments. growth the teens which will more trends low environment the further along deliver diluted expect This us long understanding surcharge year superior proposition clear earnings to growth second share uncertainty leverage position strong Christophe returns. with and here's deliver favorable his long the momentum and our we

on customer further We restrictions service, Eastern fundamental COVID exceptional and inflation, now our we organic just war and QX. delivered momentum what as its is like control, strengthened recovery and by they generation. new continuing & me. extremely strong most currency to Fixed well business drivers obviously to in accelerated could team sales to strong not led as what in pricing, afternoon, you you heard, demand much, a rapidly to the control, focused we in business, gains environment, QX. by new good which Thank Mike, changing strong led In XX% everyone. healthy we growth innovation growth, delivering continued pleased than and very with even the how execute with quarter remain its I'm could XX% of with with continue X% improve, important business momentum Institutional Europe. volume from but which to 'XX, totally organic like Industrial growth, continue so while organic better the Specialty, is already we XX% actually, that manage while started

of for on also a the until cost Europe quarter, first as the were very expectations we most nicely product were our the even margins own Our of war inflation in path ahead overcome delivered trending well to started. significant Eastern

from our in As the resulting added costs, the ultimate of in know, global impact the in product per share in to of XX% an this a total impact quarter earnings. also energy a unexpected the QX spike of inflation impacted few we all cost incremental delivered had last This costs months share weeks alone, unfavorable on first $X.XX major a quarter. $X.XX which last close

Importantly, the the to quarter new from while all rose importantly, quarter. thanks first fourth X% strong in we accelerated to headwind, X% the productivity, fundamentals momentum significant did we this demand, most overcame and pricing, business, the maintaining Ecolab. And in pricing in which of

I remain to which new really during once to term short to the month strong and offset Even turn the continue path to boldly growth to So the decided impact to costs global now first if rapid today Ecolab, during increasing year then to an expect the get come will did. we 'XX top there full the therefore our structural first now once for very have as behave again, in we the get we the based we see unexpected cost to inflation. positive energy rise on And to quite of this half actions energy our bit incremental on be now implemented, of pricing We deliver of what XXXX. energy will what gas top second. confident and react implement a quarter taken, our but months of We oil surcharge will full long cost had ahead surcharge term three and fully a has and last of pricing. second margins see deliver changed a line and already accelerated ability in the strong to

energy product year and implementation the the same the but second price energy encouraging. in cost the surcharge its Now XXX% squeeze and being is as at now of X% delivered quarter acute second most cost, we is we implemented quarter started of Because Xst. the on actually early April between but expect incremental started surcharge of world, with the the Occurring the progress see around time, the very inflation. customers with to this,

this and primarily the we progressively And of finally, $XXX help we pricing, see benefit at quarter and second surcharge what and should As it's surcharge rolls the our quarter. sure energy us with half approach the the million. earnings of structural the demonstrated over out, again as surcharge with when second the been somewhat challenging growth the along absolutely accordingly, second from make bulk accelerating initial impact volume productivity strong And should times matters. delivery that Ecolab, over drive protect last gains year's we strike, year

Our people, our customers and our company.

to we the when so retention have term reduced Over team, workforce our our manage few our costs, key short could we customer high. one today global of the protected remains years, past reasons why

model also reasons today pricing our leverage This cost margin stabilizes customers demonstrated one starts protected in We our inflation Science when where productivity why again generating today has of major with of Certified, like we Ecolab remains by digital [sticks]. that one key business company over strong. breakthrough also approach the And significant improving. and our and technology, over investing generation so the innovation keeps our protect our structured new key reasons

not extends deliver the year. become solutions our energy sometime of the as X% that surcharge EPS. you've more [infection] surcharge in $X.XX the we then Ecolab's demand territory there half in structured as expect to operating full also, uncertainty for we strong earnings the teens, rest earnings let's act of organic expect your resources pace the an heard show of superior exit of as the continuing for for as the actually the with the spike is second an balance to our costs, pricing in timing second the to year year With that full of sales positive quarter. double remain inflation, of turn of Purolite and reaches So look year. to come. that realization customers questions. but and and when between energy margin clear to momentum will the This that prevent And the to this unique year most, will for during should X% of need to early consistent growth natural the low many expect we the offset rising And includes years X% for that growth expectations comparison 'XX, forget delivery protect support of our that growth digit the progressively forward beyond hallmark amortization we of them I understanding,

remarks. Thanks, That Christophe. our concludes formal

booth our plan tour at National on we in before note hold final annual May Monday, a start we Association Restaurant Chicago of our XX. to Q&A, the As show

contact please you our questions, Operator, please begin any have office. the would you question-and-answer If period?

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

Just April, Christophe, you're the costs. one how then question second you trended inflation through they quarter? know XX% on quarter. from me the talk first and delivered through in the and today, you first just thinking said the about up were I progression Can quarter product through about how that

experts to move XXXX. which for third the so ended in because XX% QX, of almost XX%, in QX, of the probably at the your to so you there QX at QX, And to so the XXXX, then was kind inflation. was And for we of war XX% first XX% it February. costs, X%. in same product XX%, and this. so then XXXX, become it's last XX% this the of to in we XX% it so QX know. It us up started, QX. of remember, our XX%, for moved when same Well, initially year. the -- expecting we're important expecting as the end QX, we if XX% half I doubled inflation represents because say or to in and quarter, may XX% we're Well, saw Unfortunately, the back, to be of to And XX% as in close full ultimately, also so Actually, Europe of Ecolab, expected so step that year delivered sales, Eastern we've look year, as XX%. at and in with the as point, so QX no QX, And

that perspective, initially that overcome. will that put And of quarter this we months up end for thinking to with second the which April, Tim, inflation $X XX%, So towards full roughly be XX%. talking conclude here over XX in have we [DPC] have we which were so just trending when it's should for we to billion year would represent that about XX% expect we it overcome, full when it to will you're

well as for and part QX quarters in in last So delivering as ‘XX to same the come well the the same of growth, really and XXXX. year EPS the

Your comes Bank. David from Begleiter next with Deutsche question

looking we year? QX you if of approached at cetera. drives the takes strong you at And pricing, discuss on a back the the what [indiscernible]. Christophe, in guidance, only and last earnings why secondly, year's Can volume look and growth et half puts various

a by one question, but one. do big me let That's David,

if So of of at QX, war great momentum. I obviously, top had we first, half a so We in the the because end first February, first when the QX, the trending situation both terms start. months may. of really started well, the of were line Well, changed two

by You've at Well, things end organic changed. volume X% price. the driven heard X% February, this growth of XX% and

in strong [DPC] QX We deliver war before end were a position we expecting the for strong delivery. very of the and ahead a was of we're QX getting were started at That ahead our inflation, So get to February. expectations. really and of good

for energy we've had energy we about, which saw the war on the basically talked businesses, impact cost. that started, to we just that when will that triggered additional surcharge move to globally, in cost, compensate order a all all days countries few where together So obviously good decide this

up, before, you've our month well, obviously get As of three $X.XX so and quarter, March the to delivery. this unfortunately. months added trending you for second that And heard of

but which a around end surcharge, mentioned to will issues my It's have XXX world, We're markets, that well. sure speed want countries are the sure in XX I revenue on going all the now, collection aligned it all recognition. a order well we customers remarks, we right, the exercise. to complicated it's with can we obviously, which deliver depend make it's it well going at is opening the as in as make have don't to as So

exactly how know be. it's hard to to So going timing is the

utmost we're of So of going I quarter. to a with the I'm end headwind and know the having But be last we was to of as last think get where quarter. And I'd during will we're to the close XXX% of happy it, where part end we we QX, that's I How surcharge at the to question. basically the year. get going where to do to year, were our exactly progressing down That's can. if get with honestly, first close but XX% as obviously, your

The which obviously to year ambition with it. towards think Well, requires second half. a low get strong second our full for the teens, the about

helps, So really The good. we driven obviously, have XX% price strong which momentum, is always high demand. by

X% have quarter, first we to that we better losses always been getting productivity Well, towards So that's during keeps the of major. well. losses, onesie-twosies, customers without have accelerating X% major X% but or moving nothing it’s as

XXX results that for over QX of seen our in points You've basis improvement.

the second good Then very we we surcharge fundamentals coming for almost that's the have are So XXX% half. that shape. have in

the I'm ease and bring also half, year execution well, a on that up timing, minus we end the the that's it's day, matter good us end David, from that's one depends end tell, with for second some to in as what final a at just the and point end up place that a the month second, exactly strong the to the very we starting But second where about to well, the a inflation full result. very and where getting well high then should the margin surcharge is the you first, during year that XXXX. realization, half, harder to But two plateau for but plus going how if evolve. expecting happen going I'm of sure and ultimately, So But or or of at in of place we're fundamentals for will the to surcharge the end that the to perspective. on second things leverage at the we'll of if leverage the is all we all in plus place inflation we get in right really margin up have end it here trying better drive 'XX, right looking fundamentals even a that in get half the up

here. your could them. So the address of parts two Hopefully, I questions

the and off roll when Just ease design if the prices surcharge, is how quickly to well? off oil quickly as on do

that taking it's as a few implement. going something have But roll to That's a few will that with to months happen. to to discuss customers. I off probably don't that's well overnight. It's we to it's going to take going think whenever happen months

Next from with question Manav comes Patnaik Barclays.

talked Christophe, outside big I around just for question had the a obviously, pressures, picture pressures given if of see you of you Europe, in specifically the in to it. you're all inflationary curious maybe macro press just about, starting terms any

at but looking so far, generally, reading newspaper good, the all so obviously. news, and we're So the

commitment. more you strong. So we when always our of made I sustainability ultimately terms think to need what in demand in the deliver very have for it's commitments, services do, All sustainability as of on and companies order they know,

hand, ask can as well, food prevention that be well doing. so as we're always other from what the from well, our or COVID whatever safety, as customers else On infection more an

good. trends, is So We're demand a we don't really have strong issue. which on really

So with so we or exceptions. slowdown any far, two seen perceived haven't

The first restaurants the the but restaurants. one institutional, hotels, especially is and the

a So what market continue we quarter. from Well, that slower would it up and perspective during on trend during it's that been the expecting. first we quicker thought the were second open quarter than

interest well on, pressure because outcome price of beginning rate see that. at an is oil it obviously. related the year, and So now it so economic is of we'll that the But and Omicron as to as of was the of

indication. So that's small one

extreme is was company. there X% than It's that our everyone the over because one of counts [load] second expecting. of The more are China

bad a it's good anyway, So news, news.

well, wish probably thing be it mention, I that probably might far, I Otherwise, much clouds, happy Sometimes that's so I'm only would bigger. would would could as but some is not, The last we hopefully good. Today, it's that so darkening there Manav, but happen. so currency. X% have

you it's speak We're the As we now. expecting roughly full strengthening. right $X.XX doubled and of so the for is dollar as kind year know,

to as so might that's that, So going strengthen well, I well it further become as would headwind. a imagine

maybe issue, term, growth is sales not just all? your And near way, medium at on force demand term, like like maybe changing another like longer an you do term, strategy asked plan if

to when understand want what I saying you're you I right make sure sales force growth… say

Would be pace you hiring demand given of out all more -- your would there? hiring people increase this

we've directly It will growth would our correlated almost a our now, as no. the now get the yes So work over say, pace is you do as customers, can monitoring, the time. do remotely. do been so doing growing that I team business, as implemented over to over of well that is of equipment and so that lot as to of the growth requires know, for you computers used the can well our all XX ready driving because more XX was That's few fixing homework much still it you on a sales past, the well, In sales our bunch as times, and force. same we in that automate but keep with last field obviously today, calls, changing past years automation years, to us we've not preparation of like digital transactional less remote pre-digital that at of can years, helping stuff

other of as of and well drives through a certain we force, of which So company growth stuff which SG&A technology, digital automate to to disconnect there's can the extent bunch a the growth that productivity. will field the

Next question of Steve with America. line from of Bank Byrne the comes

natural you that to oil, make understood you're or the by is if the you customer? energy looking And gas structural from in expecting your XX% surcharge I to does price And like second increases. are I'd a about I correctly correctly, getting sure and energy XX% hear given twice on your from quarter. XX% so, at the inflation you or just this of inflation, I materials If magnitude defined any want you understood depend you're better this maybe understand just surcharge, it energy on electricity, raw right. it's that roughly pushback

parts. So two

to general elimination The all surcharge Think the the instance. whole gets heavy then industries, related price we've said for And slightly for the customers. of X%, principle XX% than a is, well all and be by related first like will between a all around countries afterwards. customers, world, around XX%, that world. yes, it's price It business than what it's about oil X% to gets that implemented But business announced higher. different that surcharge XX% industrial with paper, so the oil defined pest as the company, XX% the if pegs to and one, the oil. But go it customers business higher can we've we've differently is is very global are

if energy when wanted obviously much further as it, is So as before. little price customers go well that it the bit mechanical, it the get surcharge different practice That's know further works, mentioned how up, the to how it formulaic goes gets The they when is, as oil will We have it up. well. temporary, theory. off a

with customers in business. that be increase to But heavy So offset get energy different P&L. than the to we or pest cost have that energy elimination industrial increase an our making it's might sure all we it right, generally, a discuss

world. We've early. around the been weeks And at so well quite three gone with far, It's that. customers it's

So But so good. it well. going so It's take as months finalize Xst. to few a to started far, April

pause to we're I'm happy make that get there making I work some quite still the that sure right in I'm addressing progress So right now is just question. here with the place. your to might remains to order but

you also to the acquisition. about wanted I Purolite ask

now. anything your or under months anything than positive anything going that's you slower a four got surprise? Is surprising You you, belt expected

company. all all of of a integration. big Well, would a call the the well it start-up It M&A It's challenges I family above. with progressing as well. of was usual

in corporation that a then there aligned, larger with processes, practices, some very is up good be all fraction needs Obviously, in a suddenly, So to and end place. organization that, you with we're but with

team, a Purolite XX were you our brothers the comes all two years retired. who or of know old Manager quite. probably terms for leader Ecolab In They that is General from since

natural. So that was very

took the be performance double -- digit over we former from Ecolab will the that From growing perspective, growing a important of in from as in So we was capacity know constrained. double coming first are Ecolab it Purolite you 'XX. it team as business have What's digit people half people keep year, we to combined that 'XX, former and well. in is a mind

in come year. half So is a can building than we that's online the Pennsylvania another supply new as are demand the well, in which why and provide, the extending one of and higher reason going the is plant the UK in we to the second

growth to So been half last since we're that higher grow of really But by It's of do to after There's It's kind had double pattern but have an we can driver we this competitors least, look can open the more much industry, a year, to few And order a do in 'XX half first It's of capacity the address. it, that big going the raises can as has we fast. this last digit huge. unbelievable biopharma. the well. it. in something growing slower year. we at growth kind very in such of this It's like what not we second year, then more further.

road, to science pest even no elimination some that more a the than like build in we add that well, safety serve it that as the at the technology and lot [water] have which businesses to we makes the life interesting. platform food now ago, that well as what that and really hygiene Ecolab industrial else saw a we Purolite years I one and can XX we that have like as it We businesses build things XX really which well. growth M&A the in we down cases came all the around around has years company so ago some but is And of did have business, with most can can also

do all So in all, again. it I would

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

I and wanted momentum water, talk versus could acceleration downstream. was how there across pretty and the it much driven? segment. I some what volume on about you focus Industrial food wondering of do see going just you pricing kind to forward, was saw broad We based beverage if and of

Industrial businesses, reasons so in growing a our that really as a the at just QX, well It's tricky Water from there two was a bit of at as is and based, as call F&B to there, is what's well, They've chemical price. end as QX high which the centers at And Paper the you shape. in organic the a which broad was as world; in this Downstream, countries those always is year I kind well at are up in question. And way, growing like moved margins great [half] new to now XX% good adding shape. years, quarter company, ended created; we all up is future like as the very at I XX% growth as X% are all mentioned some QX, of as have XX%. first for XX%. know. strong well, well, around in that was but by been for is And and most businesses first volume, health year to the X% with that is the acceleration more been animal in versus fronts. are before, well, business has what which otherwise, doing we this most industry which interesting new And fast that Industrial, [accelerated] techs; which that we've engines global XX%, on XX%. on is in China, in data as of well remained group, well. that momentum a little really quarter for them, X% stuck X%, was X% X%

margins While keep in important XX% but were down QX, to they were in XX% XXXX. it's mind, versus up

well, obviously, 'XX-'XX Industrial that has how really in cycle, up was pre, during ended COVID as those cycle with down good was very ratio XXXX. in we end leverage the did as ultimately go that as through cycles. we'll before well times gets inflationary of margin margin in And improvement into well. of So that behave the margin past do road they struck pricing terms it as cycle, as shown each up up this as and great well

And side. better maybe the momentum ask as But the the can question volume comps strong on rest through I the at go a in we just year, very if maybe Obviously, Institutional volume. side. of the high -- some tougher should benefit get the a from benefit see you start care bit on the But reopening. on health the side, from of easier to level

volume high level a the across about think company? trend the we should how at So

reasons the Ashish. you for same the roughly mentioned, Overall,

momentum volumes positive going so territory, and to for in question, are are remain digit top line comp is big, out there. slow part, think kind double pretty as But events across that's I happening mentioned. of will for recession you But we company. down more to -- remain, no steady the a turn there's otherwise, assuming it's some that to or similar obviously, going the most the going have Some generally and

Next line Mizuho. from Parkinson with question the of Chris comes

there been of you you flows to have last call just back step want would ebbs Obviously, or whatever the COVID few a a during Christophe, situation lot it. years. over take and the

be. gain would new, about where food and could you sanitization, many share sit potential, of among you programs more but say, have think kind other you I in are likely of launched management back a where safety, You products verticals. team When and bunch with the

would and evolved? how a Just the industrial institutional process years there is let's portfolio Just versus any growth market that your has in difference thought versus, peers for pieces the you ago? peg algo or how of say, few

gaining shares definitely we're always obviously, compare, same. do our you -- generally, growth. growth if competitions Well, we with I the guess And

of we're way most of them. So ahead

we're countries. that I we across We businesses with across sometimes that key gaining obviously. in the and good deal recognize But weaknesses shares have of feel key some the terms

to If in you take fact in mentioned, one the Institutional. XXXX, are pre-COVID. interesting in as so Institutional, US QX level at it's restaurant well, so business as Institution our Sales they instance, since were take for big. Well in you take the same as is

a in While for all we XXXX restaurants the is reasons cover all specific traffic [XX%] how is the know as well. back that's the well, businesses that gained [bugging] traffic restaurants down as so our other example showing we've to down that share staff in versus But the in third and 'XX, dine-in of staffing ultimately. are that well could and restaurants versus much Institutional,

a follow-up quick care. just And on health very

supplemental, the US, by elective dynamic slower some with mentioned But surgeries the recovery competitive evolved a also of situation. Europe. kind during in offset there momentum in the You COVID the

the the believe a where that stand should Can HPCs little modeling you about and got today talk again, positioned what two you be next, just how comment Street thinking bit there about you're of over let's your more strategy and aggressive. little a bit Some say, how growth on you once -- you years? more, just for

was the COVID, major towards of surgical. before in enough, focus convergence interestingly Well, health care

and was centered which that's central a the rooms, So really me. didn't very room, operating strategy around it I come so sterile, room, from small operating believe patient so

But over last Except which drove it and a on happened that take Omicron. I I got one. of And well, did down, in industry. shut lot company during with this about again times, no the well. nuts, surgeries six happens everybody really the postponed off, obviously, and So credit months think so the COVID, it that

the protect ultimately the strategy, long for from It's infection, it's doubt have So acquired because zero about it's good patients. is good need Chris. to you making helps hospital that more reduce in the for operate total hospital which don't which I done often, because operations right and patient sure cost can term they've because as they they their they well as repeat that past. well

which restarted. elective was of years, for of the related over strategy and last So just kind those It's shut got the go It stops right. and was right down that surgeries still lot been a two future. have to

from with Next line question Josh the comes of UBS. Spector

this that travel of volume in for outlook. if and I flex year for improvement something the just I of business kind to about just rest think a outlook to becomes point kind is meaningful specifically follow wanted of up on Institutional. the wanted your

sold but versus travel. has more arguably room leisure lodging that's recovered business So

business your the skewed think would exposure more hotel I wise be to and side. regional

is you a So half into outlook all, versus upside or that at thinking? current that and think that second is do improves the baked of source your

business. So as roughly impacting, our it's know. probably company, business obviously, But our out there. our is of you a lodging But X% help business, is travel we're any the so in part which taking, of small market obviously,

full the to a of for with going going some -- it's we're be have and takes. lot upside year, think There's puts to I travel.

going we so think that As there's going in you other and ramp well well. people US had well as the it, in hand, can as that most you name feel COVID But the feel getting on we We can as mentioned, market. be that or economic already as I away is our up there. it will to price to come. during industry in some well is interest Business to rate, pressure the oil, subsidies, is on pressure well, of obviously, the travel some leisure And end better. Europe feel go months as the there that by in driven

is pandemic during well the shares, top was which as do in I before. is well actually Chris good what's as pricing is the it they're months. going institutional thing getting, really driving some over next good to that but has the can't on business. So to mentioning happen I to new as be That few And well to going there been new news now influence. some doing continuing only I we'll of business right is extremely and less The can and news, influence see

institutional is So faster the ultimately, say that time I to might at unleashed even a grown if not good work. going think been we have as way well, could the well, same would be in have everything One place. that's things

in not might fast grow I down as industry good a little as and 'XX, still slow the would territory we have might pretty we performance. is generally, digit So a will we believe remain wished, in double but which bit,

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

that just I of that staffing issues because quick staffing you clarify the release of retail, guess, surging are transitory in that or trying mentioned when Can was had is at kind ones issue the from is just couple COVID-related outages because how quarter, is. understand customers of I'm there in of declined. intensity because A Omicron issue, to food The some struggling? cleaning was the me.

around well go how Yes, large are we industry or to they need all do they They that as around are the people it's they quite for retailers do get, the going that the people they the are The serving stores, in an well, serve country most the as so is especially with part, they ultimately. customers, struggling is their as and much interesting the doing one, should. world. where retail Vincent, trick choose obviously, much and because large customers the

related doing more one all one, is today. they're I the because the to But customers store commercial the sure would of in well. we way. on from that, our that to times, they do the how much driving saying So And right doing the be I'm it's the well, as side staffing than are their make the that shifting stays want obviously, part things careful towards cleaning as which are normal what

a follow-up, And just a looked through you as in ask working like need and quarter you sort year. the it but finished and an pretty quarter you with could cash going of how expect I you're low trend the about the a to if build in Obviously, of environment, capital Scott, more balance. good inflationary

year? cash So just how flow capital the for thinking working should and be about free we

a as there a of the mentioned bit you As you'd in build, was quarter, expect.

quarter the in cash expect below free CapEx especially working would were this what which because expected first with So last for and capital we year we just growing, are you really flows and built line sales strong. as

for it's our flow year free historical working year line conversion, with business would trend really will basis, have on free with that cash levels, flows, line cash for in cash we free growth. sort we so of a look And full expect in the flow that capital the we the as which means

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

Christophe, following the segment. up Industrial on

A release, to press And there that you're please on discussion to that the years then level on little that's a in earlier it just pandemic headwind. Could How few ago, unfavorable in as and get is elaborate mix the bit margin. going? about a cited segment what a seeing? on quickly discuss mid-teens. a follow-up curious, you in pre Industrial could Just margin where back based the

few of obviously. parts you two So questions,

and margins So mix.

talk it margins, kind margin of to two the usually, takes about I if So overall years cycle. through get

every So our industrial, our get up cycle. inflationary one and the and how in second year. first same the be back the year, much margins and goes is it's pricing, inflation in we've two back difference time get well, planning dollars going we at we that's we grown that more, and And and the usually already margins time, we're one this year this to the year less the cycle will last for get with to big years, this last so the

of a competitive strong be first, competition a going industrial in little are the can cycle they a muscle to So deliver. products reasons, price but for versus few our in because premium terms what is very longer bit

well savings which paying as for approach, our by you a generating are customers basically our as that well. have more more it. is we probably share which second, getting So as of interested pricing a eROI, is out to get the of customers driven are And we in know,

as very So pricing natural it's a of organic type well. kind

the pricing comes top you of inflation have pricing, then underlying that on it. So the and

So bottom and the that line to come assuming should obviously that quarters now I in 'XX, think 'XX. in peaks eases be towards inflation

second we question. Industrial. rebuild That in really in margins should So step that see so up and was your

three was One is There's the business things. mix. The first one mix.

instance, growing at lower take energy growing additives water, paper, can Within for the have business, has to we're like than And Well, using a mix fast companies paper oil ones margin lower instance, of which have well. when providing offering so faster that they is prices offering, can right have an are mix the in last rather Water. chemical usually impact afford called margin are for high of important is you Well, downstream, those now. an we the as than like than it. customers. because If really one the are businesses. country you that the They that is those

has where impact an well So as Industrial. grow margin of you on depending on that the overall

drivers big three this the are of those mix. margin So

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

is, you're a March to other to actually low you limitations. on end indicated the the that press maybe back think much implementing of your cases, realize the and high you cases, cases, The Xst. I as the immediately. reason June ask and in release XXth expect coming I get XX% some some quarter? I might to of other range April X% contractual surcharges Christophe, In you perhaps imagine, still have How in

So in second into quarter. perhaps also as you through implement the that you can talk third quarter program the flow and begin about the to

way. I'll so. detail and that So can of a surcharge you take increase with really offset I two costs to obviously of some way But in is short explain the more a period things, agree to if very in complicated related wish and energy can and simple and time a the get Kevin, it simple we such customers the sure we to way align is the an in one make cost. commodity

on a negative get don't EPS our because the a we get surcharge. net zero we we the we But you surcharge, So EPS inflation get obviously, get and delivery. ultimately delivery, don't if the have

So related energy that's the it, offset think increase the that to is so way costs. a we about surcharge natural the for the really

question sure the pause your one. I'll the make after that, So I just And and so addressed second, that that's here. first to

close you or we're It's needs to making, that I on quarter well. June journey, June of because which as accurate of real The from well. end very at XXX like zero those of in on happen it it's we're locations -- why imperfect very there's second obviously, as perfectly to lot progress Xst This July, cruising I'm quarter realization since but we for as the of of a obviously, kind ending be Well, the where it's April never around because is to we say, customers, work. millions world evolving an nicely, be done that thousands we've countries. is a in going to June, speeds hope transition and the not start in

we June So going if in it's well, it's terms but sometime this to line that's of going way place the be of I heaven, the think summer. to when about impact, second it a it's end quarter, at in don't a good know be to going the exactly offset to not straight an the for up ends. end net quarter

secondly, little come than then so, first I thought that we internally? anticipated. in what had Institutional it better results you your in better I quarter, portfolio. piece earnings And you the my in question came did is, guess a about bit the than of in wanted the ask to if variance drove positive And

just talking So -- so you're about want to talk about you right, me I to sure margin get both? sales you make or or

to earnings I operating institutional and your referring speciality. global was in

should omicron impacted as first well because been if delivered the as were wouldn't be, were as the product They inflation. they've even they're could not And good. still have but the high sales they could part cost to hit really by so of Well, good actually, been earnings have better the quarter. or

good productivity work. growth, good So

going than of as mentioned transactional that whenever and You helping the going that's better the implemented That’s come on to of quarters let's past and well post well well driving as that years to pricing as when Science Because But to as institutional adding happen 'XX. well. inflation, the We very path, world, automating maybe all the the is all work top in be to both be force Certified doing bottom Ecolab Institutional Innovation be pre-COVID, to programs is the going global comes margins is cycle to the that come. system as COVID going it is together it's the better field well. productivity. related be and ahead as firmly disinfection on a margin is the to COVID line that or our to margin. truth come. chunk around I but a well probably the field as XXXX well will line was believe remember assume it's that a best in good on after future we've to gets the that in even that and But really is big

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

How are sales levels? underlying normalizing compared the XXXX sanitizing to

that's imperfect So obviously. science, an

it XXXX. was we like company, it let's should at looks over So right it in was during XX% the call it that remain And the when the now that -- where pre-COVID, look have above we is all sanitizing way at grew times. it, sales the roughly it COVID XX%

typically, do well and as Industrial over then some as as Institutional were are forth, your And margins you XXXX history see that net so you about and and How Industrial. verticals have in the beyond talking zero? higher you mix than of that growth

and one. very That's a XXXX one good all during enough, better the cycles, than cycle had is inflation And we've the let's Xst, It's post all COVID so the to before, the I improvement prior it assume, business P&L to not obviously. be concludes, Institution all on this cycle, But of that. On performance, Industrial, be we of had previous margin Institutional the 'XX, better years. first to so happen was mentioned January that in question. the is for journey inflationary the mentioned pre-COVID. of happening going going going those on over As after reasons interestingly also

just operating You earlier place, I than of they were they're in even down the as of was a maybe mentioned in XXXX well in improvement why XX% which the are up growing ended in QX, call, on remember in XXXX before margin XX% margins and higher terms is margin north very as had we XX% the at well. good

So the mix doing. team been the to that due pricing work has

demand. Many of reasons few of bunch hoping on and as well years obviously forward. good made sometimes. have as many is relevant that customers that's because but very our a going you net they now that's going This good of going What So relevant was them continue ago, sustainability not becoming obviously for the to right on mentioned less as a driving were very much fast less forward are objectives. progressing commitments good something is zero and

which and at in we've better. be expect Zero us, better level division for the potentially same higher the tend dedicated And Industrial, same most Institutional a for road, customers as well serve time, than are of margins margin reach those well contribute created help to as that within now Industrial will even well order margin the to to So the as down I advanced. Industrial Net to customers those which

from coming is the line Shlomo of question Rosenbaum with Next Stifel.

play want a vis-a-vis to the back had go lot volumes. company little In of question, XXXX? words, to on with of about more amount. are in a just pricing. volumes And significant Institutional back how you potential? overall talk Quick we was, much but in revenue where ask, a to to to left normal of in-person talked being terms is about like-for-like dining just bit I where it other Like terms return down we

So assume revenue normalization, you to with come that if of potential for it XXXX? you to or would upside were what just in were kind would like-to-like, the say, say you if put is coming

in to one. to So want some order numbers that. right to make I get I to sure get the get I had

volume. way perspective, terms ahead in we're of line the but question, from you XXXX obviously, top of already, So right asked so

a where that mean, ahead ahead, half ahead Life year, year. XX% that's businesses all is where to the half volume well. QX only Specialty XXXX is volume ahead during be Other the businesses already have will Industrial look going be are is cross as is businesses, of in you if And Sciences terms and in terms we're I of to XXXX. major second XXXX, line So at & that Healthcare of place the we our second roughly during below the Institutional expected 'XX, & of ahead, segment of in of one the all

half and you think way -- a largely should there. 'XX, that the So the thinking I'm that when second still about over first have potential of be improvement to kind Is recovery, half 'XX of it? right of

is to take we is a of about -- higher saying because talked doubt a just two, why to going no get That's Specialty, the & perspective from demand so that. hotels Institutional it probably a you're three prices kind you've industry as you your before going as well we're staffing, is recovering staffing even going same cycle in little be year hotels it's in have because demand as do the especially it's more and won't for have well, where than about Absolutely, staffing it be don't rooms, been it's to in instance, the for hotels, it. not lately, bit add though they used to service as different, way, that paying That's well. to

So I those to don't going our it's and for using really years drive good recovery, going good demand people that's in have business. to us be to 'XX two us think which stop? a us When in to and demand ahead help but for product, going the thing because are or I that's of know, we one that 'XX. is of

to get really quarter the one question. across follow-up that just customers It seems And have. it's like enough surcharge time trying you're hit just able Is expanse taken for think the energy wanted the off the make in you to -- Is to being of new order sales. everybody. do be At should also same to this? a of new there sales to focus we time, it? people about How guys

And for know put it's And answer at zero to right all we why growing all all But of we will world So saying yes, businesses, way, Xst know very the exactly one nicely. April to this that we're mentioning. summer, won't needs good we theory, everyone a would if hard started place that that be XXX% be in I going where in because the first, done get perfect that's earnings way. the to I'm to why at not this one so the that be. let's getting in it around no. be done reasons on everything it's going you're were either that's very quarter done way, in end we done the a short our in quarter, is it and Well, the second June, happen because

the the So good the eyes that before. get let off with done pricing, of new reasonably honest When we've I we reasons is versus alone pricing, never business. surcharge, focus at you. be been the exactly But [prioritization] of that mentioned point And perfectly ball which totally new new business to for want on that. since something the your globally. you on we we've second Well,

well as sure a expect we little that road, So the to get down pricing done to slow business same to can it's as momentum pricing plan I that's but to do new quickly get bit at both to why hard as want the make the we maintains down time. right

Next question comes from Partners. with the Research Mike Seaport Harrison of line

I could market this a I I If wanted -- see if to underlying little demand question attack could bit differently. around

You've talked about travel. business

this point foot restaurant strong. were that maybe covering that in seeing maybe would at most about more But the terms hoping this just inflation to signs on any behavior some concerns I you're this in in space up talked traffic. inflation Europe. Are broadly there was some of consumer to guess an get is us spending, inflationary on not environment. color You consumer starting drag of last time macro was I what in show

So provide helpful. perspective I any can guess very you historical would be

few Yes, a things.

really of was I kind of parents did. experienced inflation, that us business. in has First, I none not guess that. our

extreme, all as unusual it ago. totally here happened So time, XX truly we or so years totally XX know. last it's

So a here. things few

demand a see don't yet. of we First, slowdown

probably of of that's So look especially oil, you see good But because get it. of most US, name slowdown that's data look the that is news. a to if restaurants, But mortgages, in we early. a related because which industry, because the of inflationary the at demand, I from COVID, you we very clearly pressure at if

So probably are important indications to those are that follow. so

because I'd well in model expansion are 'XX, is we that as it's the all that the more extreme before with move slower times terms And of as because gone that when so but down of in could we discussed times, here times say offering growth and company. and thing share assume The or there. yes, we've knows, ahead good third in been the obviously, don't on business, many that, of gained we thing Ecolab recessionary thing to who is a going last happen happen the new which through 'XX, we've innovation, through market still growth slows market we

is difficult grow So top for than our that's been at line. because times get company. And of overall our more customers that proposition, as us XX total and helping importantly, value the faster more need us in we you the kind better they the market true as results on customers, lower helps recession most dampen know, have might a our that for cost, years

customers times, during well even reasons recessionary Ecolab recessionary slower why have which been so in more so more So difficult times. or need has doing what times, been potentially we're doing, quite

around of this feed And fab more particularly water win position the high on you going now I your Purolite. are you've into opportunity. then data fair centers. a combined there that we tech and as share that's opportunities semiconductor than second of a question your expansion? in as fabs some market talk centered as you Can believe mostly well bit to little with And capacity about position

Purolite do one we which helping that just zero, to which what's towards no new of water sure that organized only can can or to The related,but the offering fascinating they they were the to This high the you road process and which we business. what's in so doing do net so high there the Obviously, get for only production with which that need we all today, manufacturing companies in a quality making as microprocessors. to for water We're production progress that same different. like used get hotels, that nice companies. by know centers carbon could And And is get XX.X% Purolite water have is enterprise it's working so something This to the a them, of like a offer at bold centers. not is had maintain extent, with requires those provide high to is there. zero very to data the we it's positive make while a business division was a forever, as highest to purity, water, them, XXXX, but long those that same objective by data we very for industries, we well its else tech use, water the the get microprocessors are that it's our and mean company reach execution driver being people most to time, that as but main where used is all Then to we and field. past, order microelectronics, Ecolab, type they've of want quality commitments they're that something on. in map for can of microelectronics. made And wanted a them, ambition. help is zero that how obviously And combines do I have we've of the part much to the serve and tech conclude their be high large understand that's same that Ecolab we they well, customers Well, all now our Absolutely, uptime, different data to be but business, that's for drive that, well. global in best the serving them now centers expertise on of actually. certain created because and related. We dedicated not we we're because of

the kind position a that so own where good of the we we're I very journey. beginning story market. So in that a But truly that could far think of

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

I making of the during progress Life the part I touch particular not did believe Sciences. are was really could wondering you we your on you on touch if business on that call.

five has XXXX. great ago, that. So we think, been that who did Life we Sciences I a started, business Doug, years But

margin that. growing great that So growth again, QX underlying of any the It's or exactly, well I for digit credit double take emerge highest the have been if we million not Ecolab, infection were going double because as double been risk. some continue today, that business almost remember I'm and digit, and of business But very in to that's production of as $XXX a growing make On was business. really former top the clean high hard nicely demand. through a providing solutions Science any digits company. crazy 'XX that's is will and I because don't will doing sure well, say, went lines, that 'XX to rooms, may from protected growth versus Life is comps business and safe factories QX, a business that, COVID to was the it, related that such having it's to it in And

obviously, it, those production the being purifying Purolite, to in add produced which lines. we that's Now is product

So it we one Nalco type creates and of a like one acquired food when equals plus three water as well. proposition safety

So it's grow together, $XXX digit. double so Today, going help million, growing to faster. even of it's Sciences Life kind $XXX million,

higher. really the call But We to happen first this by of year. just well. able more need to Two interesting. roughly. Getting just is capacity the year businesses together, now, of first the even and half second earlier selling during doing the as half going what be are the to offering we're that's on We constrained produce getting year of right mentioned this demand is

you up large facilities? pharma Are signing

focus where We on. do, that's we

brands. now overall XX% on which renewed So on XXXX Life growing be Science cosmetics, industry by that's the and part is the market Rosemarie, XX% few with interesting. XXXX, to so a and and for antibodies, or really really in the pharma years pharma mRNA are plus traditional next balance fastest the biopharma within pharma the of Life expected the pharma is is Science, the monoclonal is most focus But

repurchases? was accelerating And stock continued price which decline, Are you the then wondering, considering given I today.

a we've Well, as exactly on what might the announced give you maybe, it's don't few remember month ask if to perspective some Scott, want a ago I weeks that. timing. well I or ago,

but range the conditions, that that maintaining of and million shares are our next that a might at metrics repurchase depending more QX, commitment program, As in by end upon repurchased of March we'll through market to $XXX to we seen you of announced And while year. also the than continue return pace little A as have that repurchasing we that half credit during we year.

need next way, any or you before -- will that look you need another improve nothing have -- to year at do should can way take it? we million, you you Any $XXX expand do wait until

think that returning year. on to mentioned, end keep $XXX sure Again, pace we as million level committed we're make to of want by I A-range metrics I XXXX. to the these this we'll that

the Andy with question of Wittman Our W. line from Robert is next Barid.

follow on guess I I flow. earlier just up question around to wanted the cash free

it'd you into I you income it net back your if like question kind said more like But working capital, centered be historical levels. kind that about of $X.X back I into and said XX% around you Scott, think was that to EPS net guidance of cash is for flow Ecolab. a kind have free income. of adjusted of about up around way walks looks guys Historically, guess thinking of billion good

the for this about if of of well? of inflation. comment way just that the that's $X.X you free the higher-than-average and on guess again, other magnitude? rates budget kind applicable into year order year kind that basically is billion can I growth is CapEx And right could, you So as you for cash is of the that question. But up that asking backs with of end flow,

XX% first mid range, conversion. about sort question, your is which cash right on is Just yes, historical your our in of math that

think as to this So of And the is after you're probably to bit that at the be where on which to free like CapEx as to aware, and X.X% flows a merchandising half year about we locations. And that quarter, we about CapEx, levels, would that CapEx little return equipment, X%. talked then would do is we is of customer fourth our we'll expect be. cash sort expect historical about which

the And new as grows. so that sales and will grow grow as business

line McVeigh Our final question Kevin Credit the of is Suisse. with from

price I client to increases? any I reaction were the you Christophe, through COVID. know wonder just thoughtful

of but mean accepted So inflationary obviously, the thoughtful any through how and just takes? a pressure, process, any were lot given just are they I thoughts puts COVID everyone client is seeing you more a from or perspective?

in really pleased what we've pricing. with I'm done

year. in of have XX over let's So mind, end this billion overcome last mid year starting so months, some billion $X the over keep $X to we towards

things. period So a XX two sure to achieving well. time do short that that make very we is want we of as And months in

this path. inflationary it done we of The a so last is mentioned. year. first well year We'll were get it or curve. ahead We've one that the do stay as We on as

of now Eastern curve prewar in to basically be So inflationary Europe. the ahead that in was XXXX

Now postponed months, the right but to and that a few get to add place surcharge well. as it's the energy we'll

do making So at one as we time hand, that cover a well we it's our same that inflation grow in down sure and margins on road. the the we it way

customers. losing sure we have to make objective is not Second we're

we can XX% play, While a obviously, that which not we're our that, maintain customers, do doing. of we XXX% it's plus but

is of windfall customers to is, retention keep we that get which and innovation, your We the want of were eases now beauty exactly inflation right when organic question keep momentum, the right, get while to any very the always you haven't which The business our while the it while strong Ecolab new down pleased of I road, margin, company. significant need of we customer pricing, because doing lost major know of we we keep in of in customers we in what been a has are sure at keeping far, that's model the pricing, so driving very and doing But happen. with to the I'm so going is customers the good. terms the while that growth when that we team time. same mind make right fundamentals extremely because growth pricing happens. we're

of At now to turn closing question-and-answer remarks. our I'll floor for time, reached Monahan Mike the session. back this we’ve

Rob. quarter call. wraps our rest and our the discussion call you and the for This for on best been your slides have replay our the first Thanks, of up and time available day. and That Thank wishes participation, site. for conference associated Web

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

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