Ecolab (ECL) 14 Feb 232022 Q4 Earnings call transcript

Greetings, and welcome to the Ecolab's Fourth Quarter 202 Earnings Release Conference Call. At this time all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions].

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

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

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

With the to his Beck for call turn that, like Christophe comments. over I'd to

you Andy, and welcome to Thank so everyone. much,

Europe Sciences Healthcare and strong, have Life Our across even Industrial organic, grew slightly would environment macro segments. and remains & very team quarter, good back XX%, delivering all Organic Specialty ideal. growing milder far importantly, predicted. momentum team XX%, but & grew grew Elimination helped, honestly, from XX%, with sales to Pest Institutional The XX%. well a X% winter I than got delivered in a growth, most better strong in our certainly very fourth executed that was

total currency in All adjusted led third fixed currency remained fourth XX% in the experienced EPS headwind quarter cost the from to as adjusted quarter. the operating peak in a percentage Europe EPS while accelerate to last we continued last the over stable headwinds years of This adjusted delivered inflation, pricing Volumes product fourth even close XX% growth quarter. two getting income year-over-year, year's year-over-year EPS, expected to to to or in while contributed strong which the very this our $X.XX X outside growth. $X.XX XX% XX% reached to mitigating

war operating impact improvement the quarter we the have mentioned delivered call, the the as Since in path the for quarter. we And stay initial to Europe, last from performance expected this consistent quarters after during is on come. to earnings

level of We're entering confidence. reasonable 'XX with a

our momentum is within our its best, value progress. in rebuilt of to $X.X While to very of all rebuild. we it power where in proposition encouraging is and year. would some which signs the This of Most demonstrates true margin earnings of the almost Ecolab importantly, lost of have is the billion we shift inflation, have our most same have XXXX cost showing strong at we also offense, earnings

in Our savings we pipeline net the and industries offer. And to expect this the in end we continues trend world of Water, delivering reached and while outcomes grow high safest our we continue record the around the importance to best as year labor serve energy strengthen. new to what at business to last customers.

markets, year, On impact on remains the expect and Europe, we increasing high in China an the and Middle to feel environment now still inflation our have in macro remain interest view Nevertheless, and to into We the in geopolitics higher other ready. unchanged. to well hand, remain move East the demand unpredictable. on most rates

higher approximate and income earnings double-digit historical growth deliver In interest earnings headwind XXXX. unfavorable X% This FX adjusted that expense accelerating operating therefore, expect and to keeps from growth performance. adjusted double-digit an towards our we, 'XX, low includes in year-over-year

we quarter, to ready guidance. are more quarterly resume and first confident feel even the For

share per to year-over-year earnings momentum line adjusted XX% interest This $X.XX earnings the range approximate be compared an to to and headwind top strong our higher ago. a $X.XX expect includes $X.XX and deliver year in from We to of continue expense to FX.

finally, a on outlook period while we're headed. this caution, of positive where And we is have a

two developing our we as our supporting expertise focused grew innovation. the Over new and team strong on years, last on

Our retention as rates shortages. supply protected high our customers remain from we

we Our income. in we margin market drive years. started as remain for Europe accelerating while increasing ways, We pricing had softening by to in acceleration helping recover in trends future productivity value, for a drove to the thoughtful customer strong prepared improvements planned operating

adjusting reality, we're promised. beginning are we winning profitable to as Healthcare Institutional We and new growth. to reposition the for

water engines our of accelerated major We Life like XX% will Sciences and quarter, investing keep in QX. organic to the growth in delivered XX% last profitable high that also in growth sales that

Lite, Additionally, its margins online, with in as new helping sales, strong a coming income exactly started drive to capacity expected operating Pure north XX%. we very acceleration expansion of with

of cash science future looked to and our good your capital never look our best most questions. billion our and done. industry, I And we've the stewards continuing the high-quality and the by leverage returning our remain has importantly, we're as market, brighter. shareholders We in team, dividend, reducing ready grow in with business, to $XXX of always invest to capabilities to share increasing forward

That Christophe. concludes formal Thanks, our remarks.

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

please interested please in you're my questions, question-and-answer or would the have begin attending any Operator contact office. period? you If

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

my Scott Christoph, taking Andy. questions. for afternoon, Good Thanks and

territory? unsurprisingly, for quarters gains expect inflect given outlook gross in your same margin mean, I margin seeing and on And pricing the for cost to Based So margin. goes the first productivity seeing. gross OI you're what to you were question into that few would down but of one, they now. narrow year-over-year, when we're continued positive on some the inputs, a inflationary expansion that contractions

Tim. you, Thank

remarks focus within our to we so the our headwinds same year. were me what have because my the a I've billion. margins, done as net and for one a as so And is And to So so showing of margins as full that and we model equivalent which well, company. gross number with able facing earnings start most OI as year, let $X.X we've XXXX were in mentioned in margins that income, been the it to we've power close really were rebuild

So well. that as as and to times I'm confident we in from our done expand our rebuild where were, there they many margins will will history we we've

they So turned margin slightly positive. quarter. still if in They I in at the our QX, look down almost were fourth OI

So good a of that's where we're trending. sign, obviously,

was organic, well. XX% Our as OI growth, up

trajectory, a look we if in we're at So the good fairly place.

of Productivity good OI as place keeps see be with we a accelerating. obviously, first 'XX, and good keep growth, momentum. the so Pricing as inflation. is some OI means in half. that at look I a if well improving the So well, we'll which should will happens, have in QX continuation what

think of on turn going first It's it's probably to the half positive the X, July of going And in the it's the follow that I in happen to to year. margin in gross going half. 'XX. will happen but not So second half second sometime

Got it. you. clear. Very Thank

what recently, than profile And institutional your follow-up, line think. launching you consumer an talk I to like drove margin channel? Just about margins? that Home what retail this materially with announcement saw a into I Can decision expand Depot, the as looks different product just a if brief you're it's

love I Tim. to, would

really as brand. pros a end in their mostly vast aimed contractors. the consumer not addressed first, calls Depot which them. It's Home the never as for XXX That's majority an a cleaning we've buying that this also we distribution So go brand through market the range, and years. of so because at we that's It's past service it's done customers is

it consumers. again, on pros, was space, for basically So focused white a really not on us,

partner the Home do Depot We have that as to well. the with best ever

to to we'll could in we're going how quite what bullish see churn, about So big come. years it's deliver the but that

Thank Got it. you.

line the Next Securities. question Wells with Fargo Weber comes Seth of from

everybody. to those volumes Hey, we ask savings importantly, those permanent? about through? new wanted will And the meant How cost to better? think more get cadence Or that are costs program. should I if come back the good flowing be on about morning

Thank on comments that, I'd first and outcome an of to is and just I'll it us, will for say a to give foremost, a then you from few that. momentum. you, Scott, who productivity like, little details more Seth. Maybe me pass bit

this years, and So few is the obviously, way, do we'll pricing, the best drive sales, innovation, done as continue past over to well to it future. productivity, we've as the in

really Now so we've it's focus to markets, the programs, disclosed, or businesses Europe individual our as to program. on

challenge, businesses to more evolved, market changed. be so good the like on it Institutional many, to two and some to to evolve But we need address, we give profitable last focused since back years. market growth color here, it's Scott has and a that because need Healthcare to and business during been that. on has to place, because but more I'd many pass the to a We're to you that in need now bring for we quarter, So

for Yes. Thanks, Christophe. Seth. question, the Thanks

just to savings announced as about talking million Christophe the the when combined Healthcare program, as talked about, program, about QX I'm the in talked So talk about and the expansion includes I your Institutional the program. pacing getting that well the question of program includes $XXX And about which which focus. we

in XX% of and that XXXX. pacing in the X/X, remainder it expect about the million of would I XXXX, So $XXX then

are meant like to Okay. And is be it permanent. sounds -- changes it those

you back, expect those So to not if volume comes back costs wouldn't then? volume -- come

that quarters doing Christophe had Exactly. those this Europe, on years specific talked for And businesses, cleat then and it's about businesses. to on on targeted really and Healthcare, thinking come. is about we we're as been And Institutional stuff those

will And we those so retain yes, expect savings. to

Right.

the you. And Thank what can understand just are just trying done run a mean, at the rate the that Okay. just of business And there follow-up this additions capacity like on then to really point? like Thank today? I quick looks you you. I'm Purely.

question, maybe that Seth. take Yes, I

So but part a continuing story. it's for the it's most done,

a couple as as max, years which of previous is really in a because it's a the mentioned business so problem that's well growing again, of will the road, fast. down We out be I've good quarter,

north by So forma with of but to have a But here, forever, strong detail I too margins very has what much acceleration get it's it's good not QX don't been which want XX%. seen thank We we've been going done pro growth, strong to so didn't God, of in way. double-digit so be in is sales. the reporting

the what near-term So is seen we've of QX or future in we kind a good the of expect that for trajectory future. the indication

you. Thank

proceed is the Please John next line Roberts from Credit with of question Suisse. with your question. The

do the here come the get any price you. And back Thank the drop in to surcharge at energy the prices? have into to you plans the Europe a Did with surcharge, structure? point simple base I guess, to roll down merge in some pricing

John.

questions. two parts, few a So

April on it So the started X. first, has since not come down surcharge we

so structural XXX% generally, so not yes, your going as So here. question, we It's be to can of a part different of the pricing. game. place. change we no second into far, as progressively good, the are emerging in And is a much region Every traditional surcharge

well. get everything mentioned to different You customer generally, in in forward. traditional Europe. a trying place But Every is going we're as pricing

the will customers the Ecolab Depot, And you those Pro identical then Home what program So through and distribute with through salespeople to service will buy Home And Clean products who Cisco Depot? on be others?

So as well two parts your question in here.

distribution part, for are are concentrated those not cleaning ready-to-use like smaller what products. than through are we or Those the first made Those Cisco. really different They're contractors. products. distribute So products

the for part. most So

as at needs So well. their they're so different, really the point right for but price adapted

So bigger competition And some for well. be do no do well all might those of cleaning with that as there. service that It is when there service no they will question, program your those Keystone knowing straight them, bigger, non-service, who we part with become line shifting Cisco towards And be else consumer a to those as them. products. their what to and well a service as have But at customers as well. real own become contractors as point, sometimes like anyone which out products start ones we we second

there. finding really part every out the it's to So of approach ways market

you. Thank

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

or surprised if about about? else talk could that the expectations Yes, some wasn't quarter. question. hi. taking if first volume of the sure I'm volume the And you Thanks mentioned were was I curious talking in in your quarter. in you you you were performance prepared for my something your remarks,

not so in we everybody Europe, It Josh, else, like were expecting situations worse Yes. actually. surprised. was

in geopolitical been the has eastern generally in take. not We situation for winter a so the the dramatically, now. more well. And in Europe the the going but could So Europe, on so take company, as bank I'm as to generally, whole negative 'XX less months is it news we'll not taking I'm milder the prediction And is for you've come, less QX, to what or know for I'm make in what it front the excluding fairly Europe. with to quite We'll seen 'XX. volumes that change so But right trajectory stable, any in here. expecting

to think in the rising is offense going Europe. positive think, generally of the as intent few going business, I there. months we've new which, and interest up the rates, I've shift that interest results to a U.S. the obviously. whole with the of demand driving of in environment I out soften it's should But very in so back, terms That's the made further mentioned, mitigate some softening rates

in is think, 'XX. see indication So what what could a QX, good we've I we of seen in

specifically follow-up is Thanks. and that volume a I potential? mean of different? And adjusting when environment, the something that institutional. and I in mean just takeout restaurants terms guess And what reductions, recovery does to current cost the or on

Great question.

So Institutional is place. in a good

As a love we a that business. business. came from. where highly It's we That's profitable business,

We be great to future a going have I as think the it's for well. And great position. business

So situation. the here's

our say is of it's so which So good. I XX%, north would

is Our margins yet, the that are to which not adjust. have we we need there opportunity

fact of changed using the XX% market but that are office, takeout so we what gone business, demand our before, all traffic, the need dine-in than in seeing a to because it's versus ordering has they more That's the that down own well saying did much restaurant sitting the well, because as Now to has people as not return live a the to we translating XXXX. It's with. reduction people in of are online, down. it you're

So for amount we we of there work slightly have of customers lower. similar have out demand because a that is the same a amount

that. for So we adjust need to

drives not doing one just XX, XX program We're past right So two accelerating one structure program our and that reduce and and in is months, it's things. that totally where doing that organization second is have productivity our organization what increased sales we service hand, started order as On dedicated new on. directly it's we're and well, to a the over units to that's hand, the penetration, that drives cost focused On now. new.

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

the key if strong, maybe increase 'XX. price you. how with for just assumptions is then Good XX% Thank raw you could [indiscernible]? that expecting is the for increase fourth versus material help in Christoph, the like And made us afternoon. you whatever the your quarter and you're is also the the very obviously sustainable

Well, parts questions. of your two

margins. from the with look a in cost driving it pricing, that the than will at we've we but first, then are product market we way what keep it inflation obviously can't outlook, lower in which delivered XXXX. obviously, at influence, So our Starting seen our and up, rate XXXX, perspective going both but the

going is going product delivered our than that fast XXXX. to to cost did get what less it not in it's increase So cheaper, it's

part. things way road But the can the of one obviously, we've or for well first the a high past as as taken. XXXX, the world. during on And in depending call. I've well staying other what's the Inflation that's that happening rate the that's move longer So mentioned into as middle

we piece, pricing the on focused pricing. remain on Now

in carryover 'XX. 'XX have coming from will so We

quarter quarter so see, estimating margins. net pricing 'XX. progressive after over doing be company, expand done that's how we further to and forward out, it, basically into sequential of We a keep our half always we earnings recover and in as will into but Wait we're improvement And we'll 'XX. to keep expect will will order strictly we've our going carry as

call. talked And often Okay. couple That's the times then you about helpful. in

Just I more the that which you equip And a is are you're cost reductions headcount beefing to, categories, the force are I your up reductions? making, guess guess, sales faster you question doing had maybe? tied the

not our So all force, when sales beefing talk up the they're equal. about created we

driving high-growth We because like people, ones profitable add clearly high growth. those fueled, being so are and investments businesses add know Purelite ones Science, for it's have Hightech, the we we those Life we

on billion some of need money And the being we side have, Healthcare the as work. because we where it's business, we not that's know. one of spectrum, ones do $X much making to the other examples other

So cost done including we'll building all but have well, our as efficiencies, with structure to long-term work in on view of growth business. sales a profitable

we new 'XX. the when as talk an It's Manav. to is, one So about this have for offense, cheap priority that about far, business, we by organization number

You're and familiar well the I QX. had good high-growth in as mentioned. is a as and with The innovation. Home Depot that, just talked about some It's businesses, example we very we that about results fueling good

it's what at. the what It's we're So organization really good loves doing.

as back mentioned. do so we'll will and that, our and our address new is to be used we a we not this main to in as while And margins to But further, going because priority be get where real they need we to way, well, surgical programs, those 'XX. to stick pricing in expand third,

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

Hi, give EPS cadence bit if you're wondering getting a good to earnings color little you on of low year. in at You I was thinking a Christophe, about could range I to growth your the rate about talk the if growth afternoon. an for end X% XXXX? more guidance later QX, top double-digit XX% is But of rate. look the that already in kind how

drivers you higher help to maybe play end lower some just how And outlook? of the you us the be maybe are of year that towards what the that or lead key to end understand out. So maybe expect could

said, third because the what two and call, in seen see in guidance will for we more for past. as what fourth I guidance no point, to than a look obviously, so now at The in But the some way quarter but here, we remarks pretty parts, what the parts the We're So at or the hasn't we've first the and happening, a in my and decided what's it's the full quarter. It versus during outlook QX release few year year. well We've changed. clearly quarter yet. to formal providing come formal provide question. your full we our clearly generally, change for said not for

the expect 'XX Now way. so continued as well as you've we mentioned, I've by sequential as seen improvement in

QX. going in improvement So QX of that's we're same a head well, QX a QX. range. to versus and is improvement the what direction improvement was being And nice versus nice was QX the a providing further with as

going will and to done in half. have, quarters income and we'll forward, as to That's well in pricing as to time going that's income the half continue in the double-digit the we will we've an we'll which obviously, lead sometime operating doing the turning drive driven the operating the the come, momentum so going some to keep in be margin doing, by keep gross the and which margin that we've productivity positive well that first done growth so range, that second

we quarter-after-quarter, that it the well. an as improvement mentioned, first headwinds in in in interest, we've to leads keeping have $X.XX, EPS of That mind as half and FX quarter

going low today, performance? half continued with said the second know everything I to do it's last you that's the improvement sometime during probably quarter-after-quarter. I we happen to in see then Ecolab And everything question, I fourth call, today, the the going I will when think the So quarter. see during double-digit happen to traditional get

volumes right. quick the improvement And as prior guess you business that out Water main a understand the of the the particularly in kind looking question business, that additives year. called refinery downstream sales in reason impact to was hoping All just I we're those I that portion. is better some the aren't And Were on in rates? that seeing in utilization downstream nature? onetime then

That's right. exactly

need they're gave customers' our and not where sometimes as the need depending need. one coming additives on the don't where our additives time answer. from from. they That's so buying on depending You is crude that's nature. sometimes they It's well, control, in not control under crude they It's whether the or

water well. the business general in the On other is doing hand, really

to as total X.X% business, fourth the close in in volume it's XX% a So that growth well quarter.

case So water as place, one mentioned, additive, with downstream you've this being is very in timers. special a in good the

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

Thank to just this for 'XX. raws wage you actually you. guys? expecting year? in it Christophe, down raws and Are inflation year-over-year your cost Is on you be primarily for inflation

up in don't. going we mentioned is we be to 'XX, No, going as Dave, going wage in seen of contribute we've is our cost. be of in product before, going minimal the to is part part lower seen XXXX, keep than that costs in our to we've the rising It's case year, what rate an but did The going are every a lower what the XXXX. -- always cost delivered to rate increase single expect, obviously. is as increase to That's they keep going it. to

So well but that's and material, to up before. the described outlook that's of parts go all as that not exactly I going

the most which some rest of on So that the materials you just are seeing right year, raws the now specifically? and year-over-year through inflation raw note,

XX,XXX different raw buy We materials.

caustic to truth going going XX%, than be to extreme for all The is keep that's me, for David, instance, some the in up of go in them most Europe, details. more hard are went others. that lately. up, But So

need So X, to XXX% like we is XXX% that mentioned close the everything the negative, before, slightly much those I deal plus caustic else And so to being things between here. but nothing negative, are with. that take

So with your it not there. our will that customers of hard commodities -- question, answer of buying an to be out thousands exact we're but the

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

businesses its that soda and has China, low. of their producers Thanks operating raised X% year there's caustic time, domestic and much been costs Historically, commodity very and chlorine inflation in over But less has pretty much. X.X% production prices of per about rate are in or differently. Ecolab

to that, X%? customers increases we're are price if maybe So the that that's to more your as a X.X% X% X% And Ecolab now expectations longer true? understand base case, for in but annual your range, no are

is, the past It's that teams we deliver learned we answer we The question, our new that time as what than we've short because And We've to, had Jeff. a well pricing and in so capability years. can customers it a well. wanted that in that was fact and good time almost rates during to And that way as customers. our retention have our thoughtful with We've the a that do and unchanged smart built gained more few we time, past. done has indication. is gaining great keep during over remained remarkable during customers the

difference are what's at that. beyond customers. the that we is the our can better to big can we've with we our customers for that that them We years in on team, our much savings the that The come capability discussion much, that fact we well, providing deliver it. we we the improving We've can value, that We much align share delivered service, Jeff, our customers. can well. within savings become document how ultimately we become share much for and documenting it a of as are better our make those with sure have numbers We at have on the as

it's the of It's brought get it for exact years. XX Jeff, were be future. in going pricing where past yet, range, high that's than What's to us going been the the We've before. such going to higher help than be to we've to a been level at core but more months, and way never XXX we don't selling know I the the

of it million to you me high. maybe What quickly like your too And -- source capital looks are Scott, inventories working cash a $XXX in will be as for XXXX? maybe are

just working Jeff, for year growth had the seen as again, because with we inventories as And pricing increased history, very both Christophe this pricing. Yes, sales and as relative talked because We you to higher thanks of about. throughout have year, the of the in high certainly question. well capital expect next

And decision. products decision -- our we the and our with that dealt can to and that so constraints was, get customers, chain supply again, as made we make sure very to chain inventory a around with the the help intentional supply world, customers very specific

supply So now start a as chain the we've our levels ease DOH then in will inventory working seen we bit, down. constraints

And having natural from time, same in to at same so level XXXX so and going we very drag will with have inventory are head in we XXXX. expect you there. high I the the some wouldn't sales But growth, continue certainly, as

Christopher is with Parkinson Mizuho. Our next of question line from the

little see you and more how much. segment. the on a heavy trends you the a Thank -- trends on I Christophe, just in water evolving wondering go volume down just mining, you light, little you. bit and hit bit so parse little the was throughout year? if between those in down a could you the Thank

it like segment Industrial seems on here? the your is focused So question

Right.

Good.

place, the know the and So going is generally, market industrial we not is in booming, rates that a good interest are because to soften demand.

like-for-like same-store to going So go that's our general sales base case our down. demand is of saying

drive in and on, our as innovation, through new new end past. own to as well done in markets we've will we business so need growth So the

is of a as very margins in terms good in place, solid trajectory a in Industrial very well.

lot with most as of before, driven to I I it's can business which act like the well making our because the doing. we what mentioned where as right new shift best while focus Jeff we drive and teams value, So it's doing that offense, that balancing by pricing, drive margins ultimately where the at to want getting we sure are the we It's a time. love

and will bit industrial very some little volumes higher, a So lower a going bit but being will good good generally a in in generally, some a place and quarters be little be in to is keep place.

not market it I market mean, Just but share is obviously, gains, coming a you. in reaccelerate. confirm drive, how going interested like just seems seems bit you're to you your talk further segment a and quick difficult, of is Can on Thank it whether out that are beginning innovation gains or and M&A? follow-up in that share Elimination, about to your Pest further like COVID your

But a in on can't It's generally, it's has very see I'm times team, as I side, that well business COVID a in for as fan continue a strong the during very and forward. that as to a do expect long well, after great to has obviously. the that business, well, quarter going time, and been of comment leadership years the well. the we fourth It's in business the unique very that business. market and business done that very done I delivered a a And well great M&A them growth they've so. positions nimble XX%

as very When they're services of well. be going doing terms to customers disinfection now to so here, are innovation provide right promising I teams a to complement their proposition. well, good think as It's a in for which, our starting think, is what I

strong business, on capital with that there's with strong the involved, almost for because in driven then good capital future. no innovation business, invested by So highest obviously, margin, the return

story to that's going staying great great. keep So

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

was it my items? end factors and more What wanted takes prior on top I volume, the drill which the down raw of up EPS further are or on the below-the-line wide. you quarter Thanks follow material pretty or taking key question. to bottom range? seems the to guidance first the just for that a range question Is

good a question. It's

of or But we're with end So, for what obviously, when component provided for market consistent the QX, quarter, the in that's the first of product is as probably the well inflation providing range here. we timing is we as the past minimum cannot well. of in close we delivered that That's getting Obviously, the we've the The the as to were guidance speak. we range the reasonably done the main manage. maximum depending. driver cost

reasonable February, month, it quarters I to to the we of things as lot way end the month and Last had driving first the year, a was that. external But the view had with we quarter of it's a happen. on factors to first we're for one providing in go, going So, deal those started. the end. in in can pretty every At confident we and range are past. have a how the that ultimately for quarter, It's

I Association. the quick wondering, to on event? as that momentum in potentially provide very color just good that a Restaurant Maybe expect that you That's color. innovations was see preview And at any helpful we on the just a strong can well. new then perspective, can from question business National Thanks.

for business, before. been mentioned business Today, we've XXX in great a years. been We've that as successful. It's

We great positions. have

most the close the We around very are world. companies and of to hotel a restaurant partner

we're very before, I'm That about being adjust the to from in market mentioned restaurant evolved in need well because a get adjust. from today. need as as do stronger business. dining in future past. So, it said, after That's the time, well take that but that to of well. going some bullish taking a We've as We to to done place that. has restaurant going a out to the versus We need we as

good the important time, it's because us, the think it's bringing way of it's that terms in It's for as that have same that that's the a I solutions sure and and for making Certified to good have, that happen, good in is of customers they the that experience penetration. the protected way for at drive customer, and innovation, that one Institutional of for whatever the the all well. for we retail the are full have guest Science ultimately good most hotel, And store or we the from can all Ecolab they most restaurant program overall our innovations really because that being that

if the to be one, would important one. I that pick most had So,

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

my Thanks for taking question.

quarter, big versus of the initiatives. look trying trying later, drove you sales at improvement? force, that to I a the would attribute much a I if earnings such of getting Because unlocked I Life Healthcare what to the guess, guess of team, the at not enact double. segment one made you're changes Purolite And literally to capacity on better kind that to some how had acceptable. the kind move, types of with cost and dramatic quarter cutting, the is time were understand -- those that of that the So, as little how comments business, I'm it you the the it's when this some Sciences third

So, during good a lapping very different obviously, just numbers the very time. has well. two high prior long against things, in in They Science John, that place been a Life were segment. years and stories, as for so

comp Science, to and good driving during a prior than before, Life is of our earnings trajectory. was year-on-year issue was traditional ultimately as as that growth, anything XX% back an very it And their So, more back else. as they well mentioned did comp to

life you So, fully see fully in science in QX, QX. place, couldn't in a see very you good and which

could a in our of we capped to in bump, limited we as products QX. That QX, could change definition, sell definition by numbers couldn't by an and produce it's we so it's obviously, how in much produce since the It's which organic until we first QX. the has because the Second, mentioned terms going times, Purolite, ultimately. year. as acquisition, It's growth of that were created many not

they that that. story. some and excited And I'm growth. positive slightly dramatic like it's It's then fact you turning I Healthcare, getting they're have totally have overly not fact but in change different that business. The made money, the that quarter, with to not a one

other like are On cost we've part and, from a it margin that efforts perspective. The by to from that obviously, the of be team structure. hand, lot will drive to growth the that really should the it program made announced importantly, most being it is the a I help, that back a performance

for most that offering. that make But customers for make we focus at programs we as on well to time, the we same our to the need improve and We know us. need sure our sense

we ahead, it's place to will the as committed but a still to that. So, get long I've road right

China. Industrial about the Got and And thinking it. segment then

through snap it economically country, the we And kind yours how business be about that overly much the ripped if of in, but lockdowns but how how back? should may in to of that was to plants I had doesn't close. think sensitive, and guess you of had sensitive quarter? fourth is have the virus tend You pressure that a

represents X% First, of business. China global our

be in it's our hard results. be would material to like Europe So,

in position China. good a have We

very is Industrial as strong very them out that a safe as lot It's It's well Our for food, likes business a something there. clean customers obviously business. government What all of well. water, important we preventing and is about infection. do

well. a QX We've in as China, decent in performance had in 'XX

period There’s us positive the see happening. going during during in of how kind but kind was reopening. QX of of behind we matters happening a strong in what messy to a get China So, our we’ll once to It do and over is because team this the China bit the range That’s well be going the is is growth. really And quarter shutdown a that’s exactly it’s in a year ultimately, quarter back new fourth good mid-single in quarter. we’re think to I with there. place volatile and as QX, the

of next with Proceed your question line Shlomo Stifel. the question. Rosenbaum The comes from to

This Rosenbaum. of What tax is are from on Adam for seeing XXXX? you for

you give much right? I'll who talked that. the a to Sam, about tax, it Hi, back is better than Scott, about

but Thanks XXXX will I to cover the just call the expect due it, year right this geographic Yes, on around, XX%. higher for mix, slightly to off sort than question. I that. rate for be of

the of free savings about think related cash we should in restructuring how And cost the 'XX to expanded items program? Okay. light in flow

Yes.

QX that in a income. on conversion. for free XXXX our flow be expect to we but this You the should year I Certainly, flow right like historical conversion will free be would much think did mid-XXs XXXX always cash from perspective, in net of cash pacing terms the about lighter, in

Proceed of Next Rosemarie your question question. is to Morbelli line from Bally the of Funds.

first are quarter are -- everyone. on Thank you see on all, and a year. afternoon -- congratulations great beginning Good and challenging to But about it. great top a the we we talking currently, about you. of talked so environment economic One

signs the Now slowdown to see last to where if a what you indicating prior a or from it you you recession you saw compare stand? just those what recession, are

even tell. clear on true demand opinion obviously, our to individual very it's I or That's soft landing, don't a of indication have its It's but customers. that softening seeing so sales landing, segment, in no in recession, customers, they're same-store some be like-for-like We're every there, going to though softening the recession. whether hard demand hard from minimal. not is the a

shift the to seen here we've what the versus is the to which seen best way is Ecolab to it, very And past. to we have responding traditional going mitigate against offense, the in So, typical that. be tool what feels we've of

demand actually Can -- tell whether whether it destocking? you slow down is it or is will

don't both, have especially of they industrial distributors. restaurants, in combination a probably much segment, inventories, It's and for hotels

So, becoming case. it could more the cautious. be is Everyone a bit

it. of can't helping. but how I much, definitely influence an exactly has tell, it's not that So

so to reduction and with impact straight ship inventories what getting softening have market, our of slight far, But as So, getting rate we're offense good saw of it's at well of well because approach good I dramatic, the time. the Even innovation in you same demand. a new business, at. on penetration, nothing the demand, driving feel

line The Partners. next to of McCarthy question the is Vertical with Research Proceed Kevin from your question.

you Institutional segments? between afternoon. would of savings How $XXX apportion and Good the productivity Healthcare targeted the million

making comments, overall more the half the me any its you Healthcare let as mostly getting on that underway there. Europe. you've team of I'll But Scott. then progress Scott? give to seen, share. Institutional, few But of over this what we've That's balance fair the well is one. program And maybe comments, is a Well is as communicated. just pass So, I and the in it the like overall program with

No, Certainly, Yes. will lot that. largest certainly, impact program not as Institutional businesses other of overall to the year there, the well. will a have portion add Christophe, million. exactly But $XXX the

that if be? secondly, expense And that is case? then the still it Is if quarter in And headwind is, back XXXX. we for I large my pension go anticipated Scott, Okay. recollection if or you that how may, a might so, higher

the headwinds, modest we're expect of We sort Yes. $X.XX some range. do to $X.XX talking in but

overly not significant. So

the question The from Steve with Byrne line next to of of your question. Proceed is coming Bank America.

Thank you.

so flows material you to would you to of are raw that cost purchased the costs the estimate Now that versus is products. had also purchasing material fourth the that's sequential XX,XXX goods? in say, just change versus months through average be? estimate raw number of, when What it what have these your purchase products their versus been average would what estimate today -- would what If quarter, you to cost

spot or any to product buy with. spot begin price don't we price at So,

be it's some are than usually generally, range. it's not less X% it's but There up, contractual. should so material So, exceptions, a it

follow didn't I sorry, that. I'm

there been sequential what your raw has I'm range? X% You change costs? a mean to whether assess less is than the a in trying material

-- question. your make I I which During sure understand want to

we quarter the just last where to are today? From

Between QX and QX.

So overall...

anything we where are and seeing QX is… that today, in mean you I are recent weeks

Okay. Got it.

You today before, QX. The as up. going mean they mentioned trends, in keep

clear. just be So very to

less that? had little quarter, total up be They your answer we were QX, still bit third our like QX, little what up. up I Did that. they than a in as the but less question QX, were in in bit a up in mentioned, than costs, will So, XX%. And

here. Well, lap see maybe higher as the year-over-year part trend, But to starting you're costs two that there's things I that of and thus decrease.

takes is how actually Our cost sure the does seeing through to COGS. then the there's just Are take flow that outlook And lag goods rows some deflation? is I'm that flows raw deflate. of before cost it your long cost material it through because to starting you of for

but we see in versus in saw well. which what very means is going So, is that be that increase a increase, clear well or cost product want our to QX we generally. the the to cost equal a to dollar as of system product in net every two question, I as terms that QX delivered Not is lag QX the the through clearly here, get created quarter it up takes in in

keeps buy we than lower up, So, the in we what a what rate few increase past cost of going saw albeit at the of quarters.

PFAS, these you? the of industrial taking maybe selling contains an they're because you. Is a A getting end products for it's in of PFAS are potential out water. lot And market Okay. And Do on the opportunity one then some not levels really expertise PFAS. minute sued in you that just for out of stuff really, companies have water? making they're opportunity of because it's

the managing science probably mastering most in water, company We're in water, Yes. in the water. advanced of

is demand PFAS hasn't a far. for would wish looking The So while. as we clear been we've been at an opportunity as that so quite

for like So, at which to probably as going that's point, something interesting most something well. will microplastic some come us, it's way, be the by

ready So, those have use the to the the we market it, science, we'll when be solutions. is technology, ready

line of question. with Proceed is your question Vincent to Stanley. next Our the Andrews Morgan from

and in Thanks. in one was were fact quarter just with In your And that wondering strength segment, assets U.S. Downstream could the cases, operating about particular I you question at petrochemicals. in you here. rates. if Europe, most have the left in the low bridge petrochemical I the that just particularly talked very running

management, water what do smart Yes, move. exactly the petrochemicals, footprint towards did which we energy shifted think the cost we've so for reduction, I reduction, team

to reduce at their looking are while well customers environmental for Our footprint, same time. the reducing solutions their as cost

rates the to are the going business though good even point, down, for our a years very being so keep is And your healthy utilization still to So in think come. to going place. I it's

Chris. much very Thanks Okay.

Schneeberger Proceed your Next question question. Scott of to line from Oppenheimer. is the with

Thank afternoon. Good so much. you

breakout, on it question to earlier third Europe, guys regions. in the and an cost the you savings when on program but on up curious, in was other now originally I'm let's announced Following Healthcare versus Institutional spend just quarter shared you

cost just these the savings of curious, this regard part is first U.S. with to So, non-U.S.? the involved plans? global mostly How is question,

much about announcement, you're what with enact go costs incremental also, only half than by for guess, topic, $XXX enactment. I And specifically originally this you the on this then $XX to Scott, million, yet more the as to from for a savings going cost it double up million as incurred

leverage the how more second basically So off to get Thanks. you're just iteration? able curious

first, So, question, Scott on U.S., to two and answer your question. build savings non-U.S. the let versus your cost parts then I'll of I'll maybe

first? Scott, So,

in you out, is programs experienced environment. then and first in we've Yes. with to of certainly, is programs to program, with less these savings, where this the and historically Europe very split due higher just what nature the the implement the as the The so the pointed consistent of U.S., cost

been And build in vast And those for U.S. while. your on that programs question, the is quite majority the to -- are U.S., working we've on it's a the maybe outside to

have to right mentioned the business as committed so Healthcare place that right at a is As before, time bring well. to the

And we've that as shift This take that's the what the mostly that to And first direction. we Institutional. in in is where well. that's for a dining mostly step want has is adjust U.S. in and happened shift from Same to the out in announced U.S.,

it clear as well as surgical business, a and want work of that I need our is productivity getting those way be But a pricing our well, in driving really margin we businesses. us of are where company time. programs The a the surgical to sort is innovation while of improvement kind and period helping truly short as improving do very earnings of new majority keep of program vast right,

a And follow-up. Thanks. Great. quick

perhaps this and You've think just CapEx past levels good addressed way that? going where versus is the working And on cash capital step year the flow, utilized a a cash year? to further, free bit this one curious revenue a and Thanks. what normalized be level about flow free might

sure. talk the Yes, I'll CapEx your then allocation and to sort of -- question next. I'll capital start with question the get

this XXst $XXX and to our is of which of program So, X% year I we continued, of that expect, get the couple we're buyback of to completed XXXX, that, that. close end of program as range sort our to X% about and million of in historical be years prior at sales, year allocation, X%. on this middle dividends. of the to And I share low Certainly, then to below capital we'll talk our And increasing would certainly, that range. sort about year, at of a historical

between And flows to XXX% $X over in of shareholders, those, XXXX. two free the our billion of returned cash

the to is, our as at expect share would looking continue M&A I as I buybacks. continue forward, which as investing excess first, with increasing mentioned, our which business, dividends includes Going consistent dividends, then principles, cash increase, well the and but in

session, reached the I'll remarks. to the time, floor for over of turn question-and-answer end closing Hedberg this and back At our we've Mr.

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

conference. conclude will today's This

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