Ecolab Inc. (ECL) Earnings Call Transcript & Summary

[Audio Gap] and the growth themes for our conference, and that's Ecolab. Now those of you who know Ecolab know that ESG and growth are a huge part of their product offerings that target energy reduction, water reduction as well as things like food safety, et cetera. But equally importantly, it's a large part of their DNA internally. And that's evidenced with some of the top ESG scores across the materials and even broader industrial space. Now some of this was evident in their recent ESG presentation that they actually posted earlier this week. Now speaking to us today about the company and how they expect to continue to partner with their customers to drive growth with an ESG bend over the long term, we're very happy to have Dan Schmechel. He is Ecolab's CFO, as you all know. We also have Mike Monahan, Senior VP of External Relations; and Andy Hedberg, Director of Investor Relations. Now to start off, Dan is going to give a bit of a presentation on Ecolab to help those of you who are a little bit less familiar with the story and the company overall, just given some of the more recent updates as well. And then we'll turn it over to Q&A, both mine and yours. So we encourage you to use the app, send in the questions to me, and we'll be happy to wean them into kind of the back half of the presentation. So with all of that, let me turn it over to Dan, and you can hear a little bit more about Ecolab.

Terrific. Thank you very much, John. Thanks for hosting, and thank you for the kind introduction. Thanks to all of you for your interest. So I will be calling out the BMO team to advance slides, so we can go ahead here, if you would, please, okay? Yes. So I'll start here, right, with the cautionary statement, which says that anything I might say about the future might not actually turn out that way. And for lots of reasons, as detailed in our most recent earnings release, other SEC filings. I suppose I should say now more than ever. But with that, cautionary statement, let's go ahead and move to the presentation. I want to spend some time today talking about our third quarter, what our experience has been as we have navigated through COVID-19 and why our experience to date has left us so bullish for Ecolab's long-term growth opportunity. And let's advance, please, a couple to the next, yes. So yes. So we'll dig in here. In navigating our response to COVID-19, we have been guided by some fundamental principles. The first is that we started with a very clear intent to take care of our customers, to take care of our team, and of course, to look out for the best interest of our shareholders and our company. Secondly, and this is something that Doug and Christophe drove from the very beginning, understand the situation but manage with the end in mind. So that number third -- number three, we really want to make decisions, and we have made them to maintain investments and do the right thing for our business to maximize our post-COVID position. So we're very confident that our capabilities and our value proposition will be even more relevant to our customers and to their customers when the world mercifully emerges from the pandemic. So advance, please. Those of you who know us know that we have a very long track record of driving consistent top line growth and translating that into consistent EPS growth. So over 10 years, we've delivered 11% compounded EPS growth and 12% over 15 years, very well recognized for transparency and predictability in delivering our results. Advance, please. So look, this is a track record that continued right through the first quarter of 2020. We delivered good sales and good EPS growth, even as COVID was beginning to show the first hints of its lethal force beginning first in China. Advance. So as the full potential impact of the pandemic became clear, we adopted a very simple model to deal with its implications, beginning first with the commitment to both a science-based understanding of the situation, how the virus was behaving, how it was communicated and how those concerns impacted our customers and their customers most directly. We developed, as I said earlier, this commitment to protect our people, our customers and our company. And this has led us to plans to serve our customers better, to capture new business opportunities and to prepare for a post-COVID world, where, frankly, our business and what we offer our customers is going to be more relevant and more powerful than ever. Advance, please. Yes, when I look back and think about all of the uncertainty in the world, and as I've said, one of the things about Ecolab is, we really we've been at this for a long time. We know our customers very well. We know the impact, or could gauge the impact that COVID was going to have on them, which segments were going to be most really impacted. And even with the benefit of hindsight, I would say that our initial assessment of the impact of COVID-19 proved to be way, way more right than wrong. And as uncertain as the world is, we remain very confident in our trajectory. We think we saw the worst of the pandemic impact in the second quarter of '20. That we predicted and delivered a third quarter, which was sequentially better and anticipate, expect that moving forward, we will continue to see a sequential, though an uneven recovery. It's the fact that this virus continues to throw surprises. I think the surprises are getting few and sort of leverage the vaccine we view is very hopeful. And I think the whole world does. But it's not done yet, and we will continue to navigate through it. The expectation for sequential recovery will be borne out. I only offer this comment that says it's not a straight-line because it's not done yet. And frankly, the reaction of governments, consumers, of cultures, societies, whatever, that's not done yet either. So we'll deal with it as it comes. What we are confident of is a sequential recovery. And at the end of that, a more powerful and relevant Ecolab business model. Advance, please. Yes. This summarizes much of what I've said. So we have continued to drive strong new Ecolab business gains driven by the fact that our customers, even those that have their own businesses significantly impacted, recognize the value of the products and services that we deliver and how important that they will be into their successful opening and success post-COVID. New products, programs, all of the work that we've done on more effective and, frankly, faster products that kill virus, antimicrobials, so just speed and effectiveness being the name of the game. We've continued to drive that innovation. The business has not played out equally across all of our businesses, as you would expect. We've got a big platform in health care and life sciences, which, frankly, have shot the lights out through this COVID environment with sales rising 30% and continued very strong income growth. Interestingly, across our industrial platform, we have maintained through this COVID experience very steady performance declines in the low single digits, but across that business, that delivered very, very strong OI growth, you can see plus 18%. Across the businesses that is really being driven by a consistent formula, meaning they were on pricing, they were on cost savings, they were on efficiencies prior to COVID, and they have benefited significantly from them. There is a reduction in discretionary expense, which you'd expect. We've done everything that we can to improve our cost position. Likewise, in the raw material space, it sort of divided into their raw materials that drive sanitation, sort of ethanol, think about it as driving raw material costs for institutional, the rest of the raw material space being relatively benign, which industrial has benefited from. And the institutional business, especially looking at the part of that, that is anchored in full-service restaurant and lodging, grew sequentially in the third quarter, often admittedly quite weak base in the second quarter. And as indicated, our confidence is that, that business will continue to improve sequentially. If you'd advance, please? The same pattern, frankly, shows up on a year-to-date basis, right? So while COVID has had this impact on all of our businesses and, certainly, no one would have chosen it, the impact has been quite different. You can see the outsized impact on institutional, where global lockdowns, changes in consumer behavior have reduced customer demand for food consumption in restaurants, for travel and for lodging stays. I've already described the net impact across the rest of the businesses, which you can see in the middle of the chart here. And in total, year-to-date '20 through 3Q sales down 6% and OI down 22%, but a very, very different story across institutional. And within institutional, full-serve restaurants and lodging, the rest of the business is actually holding up quite well. And advance, please? So it's been extraordinary, right? And while the institutional business has been disproportionately hurt by this pandemic. We are certain that it will get back to growth. The chart shows COVID-19 impact on institutional and just like its impact on the world, frankly, it's unlike anything we've ever seen. We were used to describing this business in terms of its reaction to recessions, which frankly, as you can see, has been not much. COVID-19 is something completely different. Advance, please. So in the restaurant space, in particular, the full-service restaurant space, this is the chart that really outlines both the thesis and the pattern that gives us confidence. This is really driven by a very long-term trend for food away-from-home and the sharp rebound that we have seen since the initial days of the lockdown. Food away-from-home has increased nearly every year for the past 30 years and surpassed food-at-home in 2016. COVID obviously had a big impact on restaurants due to the lockdowns and changes in consumer behavior. But food away from home has rebounded, and we expect it to continue recovering to prior levels as we move forward, although I'm always careful to say this is not going to be a straight line. The virus will continue to throw surprises. Local governments, national governments, consumers will behave differently. But the trend, we think, is inevitable. I was asked a question in a breakout session earlier today on this. And it's one person's point of view and one person's experience, but let me just say, my wife and my daughter and I, who've been largely at home since last March, we've pretty much exhausted our repertoire of meal preparation and ideas for what we're able to do on our own, okay? And I'll tell you, when we feel safe and when we are able to go back to restaurants, sit down and enjoy a meal together or a meal with friends, we will do nothing else for at least a year. And I think that there's a lot of pent-up demand that people feel individually and that we also see across our customers and across their customer sets, and it shows up in the data. If you could advance, please? So I said it's not going to be a straight line, right? And here's our view of the post-COVID environment. First, the institutional recovery will continue although the timing of the recovery will be uneven. Foodservice, we'll start seeing, we think, a more natural recovery in the second half of 2021 as COVID infections decline and as consumer wariness dissipates, which means that more people will be more comfortable going out again. And there's a pent-up demand here. Lodging will take longer, we believe. The reason is, businesses -- travel will take longer to recover as businesses reevaluate how they're going to spend their discretionary money. It is remarkable as with this conference, to me, to everybody, I mean, it's just a sort of common reaction that the way the business has gotten done in a virtual world, supported by technology is amazing, more efficient, better than anything I could possibly have anticipated. It's not the same. Let's be clear. And people -- we're social animals at the end of the day. Doing business, face-to-face, especially the kind of business that we do, understanding and satisfying customer requirements will require us to get back on planes, get back into customer locations, meet them, understand their requirements and make sure that we're meeting them. That's our story. I think that will play out across business travel in particular. But look, it's going to take a while. And frankly, there are a lot of finance people like me and organizations that kind of like the current environment and the cost trade between digital and virtual versus travel. We will hold sway for a while. But at the end of the day, people are going to do what they do. Salespeople sell and selling happens face-to-face, and that's going to be the shape of the recovery. It'll take a while. More importantly, I think the fundamental themes that benefit Ecolab, so John, this was your point on upfront. We are a great ESG play, meaning water scarcity, climate change, driving sustainability efforts, food safety, improved health care, life sciences, population, continuing to age in the largest economies, all of these things that we've talked about for years are themes that will continue post-COVID. And we believe, in fact, will be enhanced as a consequence of COVID because on top of all of these themes, I think, will come an increased focus. The 2B administration will help to drive this, where efforts to reduce hydrocarbon based consumption of energy and the wider recognition of water scarcity and, frankly, the inequality of the allocation of water resources as well as on top of concerns about food safety and health care and healthy recovery, there's this layer of concern around sanitation and making all spaces safe that will continue to benefit Ecolab. Okay? So advance, please? So our focus, while we've continued to accelerate our antimicrobial rollout timetable this year, this is all about 2 simple things, right, developing products that have a broader range and a faster kill. We're great at it and because we play in this space in hospitals and in health care environments, and we're able to leverage that technology for the benefit of all of our customer groups. So we've moved fast on these. We've gotten good coordination with regulatory agencies around the world, and we will have, we believe, best-in-class COVID and other antimicrobial, antiviral claims on a continued basis. We've also accelerated our digital investments. We think that these are great ideas, no matter what environment you believe we'll be in post-COVID. Our digital investments drive enhanced transparency for our customers so they can see more fully the value and results that we bring to them. And they are also the foundation for our continued SG&A efficiency. Advance, please? I'll take a minute to talk about our Science Certified program. Perhaps you've seen these ads. I've seen them on sports, which I watch a lot of, also on some network news, which I watch less of, but I've seen them. Look, we believe that we've got a unique opportunity to build awareness of our hygiene capabilities and advantages and to do this in a way that capitalizes on programs to help our customers make their customers feel better about returning to restaurants, to hotels and to spaces where they interact a lot with other people. This is what we're calling Ecolab Science Certified. The program is developed, designed to deliver improved cleaning and sanitizing protocols, better products and improve program compliances supported by audit capabilities to enable our customers, to assure their customers that they're living up to the highest standards. This means that we're using hospital-grade disinfectants much more widely throughout our served industries, which is one of the key advantages versus many of the other consumer products that are trying to move in or traditional competitive products. Also, merchandising the fact that we're doing this for customers and have talked about driving consumer awareness with our largest chains, so we want to be fully partnering with them to put our name out there as somebody who's partnering and convincing their customers that it's safe to come back, helps us, helps them and, frankly, helps the end customer as well. So we're going to continue to move and drive this and believe that this is going to give us an even stronger brand and position post-COVID. If we could advance a couple, please. I want to talk just generally, John, maybe about the platform that drives value for shareholders. This has not changed, right? There is stuff that is changing in the world, right? We also internally have recently announced a CEO succession plan. But let me just say that what drives Ecolab, how we drive value for customers and how we drive value for shareholders is not changing. Our value proposition is all about continuing to find new ways to help our customers serve their customers better. And protect their brands and doing so in a way that protects or improves their cost effectiveness, and importantly, reduces their impact on the environment. So more than 90% of our revenue comes from product sales, for which we provide very high levels of on-site support, and more than 90% of our product sales are consumable, and it's this [ combination ] team that can take care of customers in 172 countries. Our business models operate quite similarly. We're bound together by a very common culture. At the heart of this culture is delivering, delivering for our customers, delivering for each other and delivering for our shareholders. And as a result, we've got leading positions in nearly every market that we compete in. Next slide, please. But still a huge upside. So just to orient you to the chart for a minute. The blue is Ecolab sales, and the green is the remaining addressable market. So we chase something like $135 billion market globally. We did in the neighborhood of $13 billion sales last year. So something like a 9% share. Let me just say that it is not our ambition, okay, to make that green go away, frankly. It is to expand the green by identifying new opportunities where we can bring great products and services to the market for the benefit of our customers and grow with expanding markets, even as we continue to define the markets in a way that allows us to serve a greater -- and greater array of customer needs. Next slide, please. So it's a value proposition that is very compelling for our largest global customers. We continue to leverage innovation, and we continue to drive share. And this too, let me just say is an area where, I think, post-COVID the biggest players are going to be most appreciative of our capabilities. I mean they are, but they will continue to want the solutions that we can deliver globally -- uniquely globally for the benefit of their operations. Next slide, please. Very important to us, we serve our customers in a very sustainable way. Sustainability is critical to us and, of course, to our customers. We minimize packaging, we minimize transportation costs and along with our service expertise, the single biggest thing that we do is to help reduce our customers' consumption of water and energy. We have an integrated approach. It makes us a clear leader in our industry and a critical partner in reducing our customers' energy and water consumption. And we do walk the talk with strong sustainability commitments that have received recognition from leading third parties, as shown at the bottom here. Next slide, please. At the heart of our opportunity, and frankly, our success is our relationship with great customers. Truly, our customer portfolio is the best of the best. This is the way we want it. We want to be working with the most successful, most demanding customers in every segment. It requires us to be at our best and, frankly, builds these global relationships over time as we continue to expand with them. So among our customers, our global leaders, right, requiring the very best technology and the most effective solutions, and importantly, delivered on a global scale so that we show up where they need us. Many of these customer relationships span decades, and we are a completely integral part of their operations, helping them to achieve success in the business. Advance, please. So every Ecolab salesperson knows this chart, right, meaning that we're going to drive growth using the same value proposition across all of our businesses best results at the lowest use cost. So that as important as we are to our customers' operations, we represent a small share of their total cost, right? And this is a chart that really represents a typical Ecolab value prop. Our products and services are a small part of the customer spend. This is true if it's a restaurant kitchen, it's a food plant or any other industrial plant. But using our premium products, backed by leading on-site service, our customers get great results while reducing the biggest cost drivers, principally, water, energy, labor and asset protection and we yield substantial overall savings doing so in a way that, again, reduces their energy and water consumption. So best results, lowest use cost is at the heart of every Ecolab business model. If you could advance, please? We've been at the digital game for a long time, and we continue to innovate in this space. We've got a long track record. So we believe that digital is a great investment in our business. It significantly improves our customer experience and the visibility of the value that we provide. Consequently, it improves retention and attraction of new customers. It improves our margins. It improves the effectiveness of our new product introductions, and it improves our field productivity. So it's a win all the way around. We work with our customers to solve problems, having installed digital collection devices at something like 3 million customer sites. And our customers increasingly rely on our digital solutions to optimize performance, to anticipate operating challenges, meaning we help them identify problems before they occur and to continuously improve their cost effectiveness and reduce their impact on the environment. I want to spend a few -- advance, please -- just a few minutes. I don't -- I'm not going to like drain these, but we continue to innovate across the product space, and it's important, I think, to take a quick look at some of these recent innovations just to get a sense of how it is that we develop product technology and how it benefits the customer. So here is a sink and surface sanitizer. We recently launched this and it is the first product that kills COVID-19 virus in less than 15 seconds. This gets back to the speed factor that I referenced earlier. There's none other that does this work as quickly or as effectively from a labor productivity perspective. You can sanitize the tables in a restaurant or hotel much quicker since the kill time is at least 4 times faster than the competitors. And unlike competitor products, you don't need to [ ring fence ] reducing labor, also have less packaging. And with all that, you get significantly improved guest safety. Next, please. So MarketGuard 365 is a program that we have rolled out for grocery stores and retailers. This includes Walmart and Target. It operates in real time, helping retail operators that we serve around the world, document, track, analyze their daily food safety practices and risks across global operations that monitors and tracks holding temperatures, wind cleaning was performed, confirms that the required sanitation chemistry was used. It's sort of -- as it's indicated, it is a scorecard. It's also proved very important in the COVID environment as we were able to remotely expand its capabilities and add critical COVID cleaning, sanitizing protocols to the pre-existing protocols that the stores were following. So we can design the program and track their compliance with it and allow them to do that corporately, which you can imagine is a huge advantage to large grocery and retail operators. Next page. On the background, the world remains much the same, meaning that threats that existed before COVID continue to be out there. This is our Legionella protection program. It remains a significant risk for all commercial building owners, including office buildings, hotels, pharma plants. Our chemical programs, the technology, predictive analytics that we use on-site and using AI on water towers 24 hours a day, this is to detect specifications and conditions where our customers should be concerned about Legionella growth. This, by the way, remains a real concern and, perhaps, a heightened concern in environments where people are not showing up to the office because the water is still in the systems, the bacteria is still in the systems, and frankly, having less flow-through of the water increases the risk. And so this has been a nice opportunity for us even in COVID because the concerns about Legionella growth are heightened, frankly, in a low use environment. Last example for ADM, if you would advance, please? A specific customer case study. So this shows how we helped ADM save over 2 billion gallons of water. We help them reduce their greenhouse gas emissions and energy, save them buckets of money by using Ecolab products. And we have actually highlighted this in our own ESG communications. This is great for the environment, great for our customers, good for people and particularly good for our customers and our bottom line. Advance, please? So I want to say, we play in very big markets. And we have a very significant impact on the world, supporting our customers who are large users of water and energy across the food, the water, health care space, and so we will continue to provide the products to ensure great operations and great cost performance for our customers. And at the same time, we'll play a very big role in continuing to make the world and, frankly, our customers much more sustainable. Advance, please? And again. So not surprisingly, we remain very, very committed to delivering great shareholder returns. In addition to strong operating results, which drive great stock performance, we have also returned nearly $9 billion in cash to shareholders over the past decade through share repurchase and dividends. We -- I am at the moment, let me just say, we are running with a higher level of cash on the balance sheet than we have done historically. I think it remains the right thing to do. And so we'll continue in that position, the world being a very uncertain place and opportunities showing up in ways that we don't always anticipate them. But our primary return is to take a great business model that does not consume a lot of cash and generates and is wickedly efficient in terms of converting net income into cash and to make sure that we are making the right investments in the business. And what we don't need to invest in the business, we will return to shareholders. If you'd advance a couple, please. Thank you. So I hope that it is clear to you that we sit here today, tired, frankly, of the COVID journey and yet very, very confident that our long-term opportunities remain very strong. We're all tired of it. The world is tired of it. And yet, at Ecolab, we think that we're going to emerge stronger. We will have an increased global focus on cleaning and sanitizing, so will our customers will benefit from it. We will continue to invest in strategic drivers, meaning effective product technology and digital technology, to make our service offering and our people even more effective. And we will continue to deliver terrific financial results, which we think will continue to benefit us versus weaker competition. Last page, please. So I've always introduced this slide the same way, and I'll do it again. I hope it's clear. We love this business. This year has been unlike any other. We've worked tirelessly as always to make sure that this lives up to its potential and that we exit COVID in a stronger position than ever. We're a global leader with a great customer set and yet with still a pretty small share in big and growing markets. So we have a lot of upside opportunity on the top line, which means on the bottom line, too. We get better and better every day at driving not only customer solutions, but the effectiveness, the efficiency of our ability to do it. The needs that we drive are absolutely fundamental. They're global. They're increasingly complex and our customers' requirements and their customers' requirements grow each day. So the macro trends are very much with us. We think that our customers are going to need more of what we have to offer as we look to the future. And importantly, this is an annuity-type business, right? So once you sell a customer, if we do a good job and we're good at it, we'll keep that business for long periods of time. So it's great in terms of return on capital, return on effort, predictability, et cetera. We have huge opportunities for new growth across all of our business platforms. And finally, we are very confident in our ability to perform consistently at this very high level as we go forward, which will continue to drive great shareholder value. So John, that's the Ecolab story, and I will be very happy to take yours or the audience's questions, please.

Great. And so yes, look, we have gotten a handful of questions in, and I'm trying to kind of put them all together so they kind of flow relatively well. For those of you who still have other questions that they're looking for, obviously, because that's the point, we want to meet your needs, make sure you have everything covered. By all means, send them in. Ideally, please use the app. I did get a couple e-mailed in, and admittedly, I'm not going to be tracking that throughout the rest of this conversation. So if you get them, please -- if you do have questions, please send them through the app. So I guess the first couple of questions that came in are really around the current environment. So you guys gave an update on the third quarter call, kind of highlighted restaurants, about 90% were open, 55% of that -- or they were running at kind of half or 50% operating rates, lodging was maybe a little bit better than that. Can you give us an update as to what you're seeing with some of the recent lockdowns. I know you're expecting sequential improvements. Is that still the case, or the lockdowns maybe crimping that a little bit? How should we think about that?

Both things are true, I would say, John. The lockdowns are crimping a little bit, and we expect sequential improvement in the fourth quarter. We were careful to say at the time that this is not a story that involves straight lines, okay? And so the comment that we will see sequential improvement is true. I'll say this, too. And I mentioned upfront, the virus continues to turn up surprises. So on the one hand, going all the way back to at least April. You had people like our hometown guy here, Mike Osterholm, where in fact he's saying that the fall is going to be rough when people -- the virus does better in environments that are less human and the cooler temperatures, and so everybody should go into the holiday season, expecting that there's going to be a surge in infections. It's easy to hear that, right? It's hard to live it. And I would say, personally, the pickup in the virus or the sort of the resurfacing of it, which came in Europe even before the U.S., surprised me. I think it surprised a lot of people in terms of its pitch and it's height. That said, it was expected, and people have sort of continued to adopt and find ways to live with it. The numbers that we referenced, the sort of 90% open and 60% capacity, they're less, but it's not -- it is -- if instead of 90%, it's 80% and instead of 60%, it's 50%, that's more the -- how straight is the line conversation. Sequentially, the business gets better, and it will continue to get better.

Got it. That makes sense. And maybe can you speak to, from a geographic perspective, how the trends may or may not be different? I know you spoke a little bit to Europe. China seems like -- and Asia, seem a lot farther or, I guess, a lot maybe better off is a better way to put it. Can you speak to the differences that you're seeing from a geographic perspective?

I mean, sure. I'll start, though, by saying that consistent with what I said earlier, like no one would choose it. People -- the recovery path that people are on is different, but it's a recovery path still. Even in China, where they dealt with it, I would say most effectively, but there are lots of political and social dimensions to that recovery that just aren't possible in democracies. Clearly, they got on -- it started there, they got on it early and they have tools at their disposal to sort of manage the exposure at the individual level, which is where it matters. All that said, the China economy is in recovery. It's not shooting the lights out. It's anticipated to do better and to improve more quickly. Our business is kind of the same. It plays out as you'd expect. Our industrial businesses in China are clearly in recovery. A lot of that is based on local government stimulus. The sort of institutional QSR businesses are clearly better, but they are not great by any stretch of the imagination. They're just further along in a recovery than the rest of the world. And I would say that it's not -- this is not -- the clearest thing that I can say is, by geography, the businesses perform more or less the way that you would expect based on the -- how effectively -- I'm not going to -- it's not a political response -- it's just how effectively society dealt with the risk of COVID and how quickly we're getting on top of it. So the U.S., frankly, is seeing still the biggest impact. Europe is farther along the recovery curve. China and Asia markets are farther along still. But really, John, I view those as being -- these are not differences of a kind. They're basically differences of degree and where they are on the maturity curve, okay?

Got it.

It's true though. I mean, everything that we see in China and Europe makes us that much more confident that the U.S. will follow a similar progression. And of course, the vaccine is probably the one thing that is close to a global benefit against a backdrop of a lot of regional stories. Okay?

Got it. No, for sure. No, that makes sense. So we've got a couple of questions around some of the new product platforms and maybe branding that you put out. One was on the Ecolab Science Certified side. And the question really pertains to, I guess, when you think about the customer base and who's signing on to this, one, do they -- when they do sign on, do they have to abide by certain standards and certain protocols that you essentially push because it's -- obviously, it's a brand for you at this point or -- and there is some visibility around that and some importance to that. And then I guess the second part of the question was, really, can you speak to the value of a program? So if you had 2 separate restaurants that were basically similar, and one goes down the Ecolab Science Certified side, is there a higher value proposition for Ecolab in that? Or are they a little bit more on the comparable side? How should we think about it?

Yes. Well, so I'll answer both questions, okay. In terms of design of the program, yes, there is a specific protocol, and the protocol involves both kind of process, cleaning and sanitizing, but also specifies product ranges. It also includes audit, meaning we go background and make sure that what we have recommended is actually being done. It's a nuance, right? You said push to customers, there's pull across this business, meaning that more than anything, our customers are looking to us to come to them with a way to help their customers be more comfortable, showing up, sitting down and consuming what they have to offer, okay? So the pull for this is quite incredible. And consequently, the answer to your second question, as you might expect is, yes. Meaning, the penetration and profitability of an account that is signed up to these protocols is better than one that does not for us. And again, it's a great Ecolab story, right? It's a win-win-win. Win-win-win-win. So better for the end customer, the better for our customer, better for us and better for the shareholder. I guess getting back to this pull thing, it's pretty remarkable. So let me just say, I'm the finance guy, okay? As I said, I watch a lot of sports, I watch some news. I don't watch a lot else. I've seen these ads. I like them. I'm not like a marketer at the end of the day. And so I scratched my head the first time. But then I talked with a lot of friends. This is not like -- it's not like a sample, but if people respond to these things very positively at the individual level. And importantly, our customers have featured Ecolab in like 60 of them in their public pronouncements of how they're preparing their environments to -- for customers to come back safely. So I think it is driving the right level of awareness. At the end consumer level, it is a huge positive message for our customers that we're partners with them and helping them make their customers feel better coming back. And obviously, it's good for us, too.

Got it. And it seems like -- I mean, you make a fair point. It seems like it's a great ability for a customer in the hospitality industry, in particular, to really be able to use it as a marketing tool. I guess, when you think about the larger scale, the chain type customers, I mean, what -- is there a way to frame the level of interest you've seen? I mean, could we see 1/4 of all the major chains kind of move in this direction? Is that too aggressive? Is it too conservative? I guess, is there a way to frame it out at this stage?

At this stage, I would say not. It's got legs. It's getting great response. As we measure the sort of viewer response, that's very positive, but the customer response has been very positive. My expectation, John, is it will become much more like the program standard for our customers, but we're not at the stage where we're making predictions on penetration at this point. It will increase penetration, absolutely. But in terms of how many -- what percent of our full serve restaurant customers are signing up to this, I'm not -- we're not really in a position to make it. We're doing it to help them. The uptake has been terrific. We are gratified for it and happy that we're helping them. How far and how quickly it goes, we'll see.

But it will go.

Okay.

Makes sense. So we probably have time for one, maybe we'll say it's 1.5 questions because we're trying to put a bunch of them in together because they're all somewhat tied together. But around the data and technology. So you spoke about it earlier. So maybe we can flush that a little bit. I guess, there's a couple of different areas where it seems like it could be a noticeable benefit. Some is on the -- in a touchless world that we're in right now, there's certainly some demand, I would think, tied to that. There's also the use of big data. And you kind of highlighted in your comments that some of this, the technology, the data improvement, is really helping you in terms of the margins for your business. So I guess, can you address each of those topics briefly in terms of where you're seeing maybe the greatest demand pull? How much of it is a push from you? And then on the margin commentary, what maybe you meant about that? And then after that, we'll have to wrap it up, but maybe we can...

Yes, sure. So let's -- I mean, let's talk about digital technology across a couple of applications. And as I've said, we've been at this game for years and years and years. None of this is new. Ecolab was at it with Nalco, we acquired terrific this 3D TRASAR technology, which allows active continuous monitoring of our effectiveness at customer locations. So we continue to invest in it to make it more powerful. But it's something that we know how to do, and we've been doing for a long time. Broadly speaking, it falls in a couple of areas. First of all, field technology that allows our people in the field to plan their days, plan their routes, plan their work more effectively, and you just get more stretch at the field level. That's a productivity play, okay? It also shows up because they're able to anticipate customer questions better and answer customer questions more immediately. So things that used to be calls back to customer service or sales support, let me find out for you, are now answerable on a handheld or a tablet. And so there's some of it that is directed at making the field a more effective and productive tool in solving on-site customer problems. The more interesting piece, probably, is gathering information and then to your part, using the data and analytical techniques to spot not only how our products are performing at the inside of a customer operation. Think about this as primarily industrial application, right? But also to spot out-of-spec conditions and to continuously monitor that from a team based in Pune, India, across the -- all of the technology that we have invested at customer sites, which monitor this 3D TRASAR technology, which monitor concentration of our product. Is it working the way we expected to. We've got -- we've shown examples of where filter and membrane performance, we can actively monitor and make predictions on when filters or membranes are going to fail. So it's just a -- it's a more powerful data application to help our customers manage their operations better. This, of course, it translates into a better value proposition. We're able to demonstrate saving more money. At the core of everything Ecolab does is we get our fair share of what we help you save. And as I indicated earlier, it just makes customer retention better, customer attraction better and the effectiveness of our product rollouts much better, too. So it's a very smart investment. We've been at it for a long time. We continue to get smarter and better at it. I spend a lot of time convincing myself and I am, that we're spending money in the right ways and seeing the right financial return for it. The principal platforms are field productivity and enablement and then also the data that we're able to marshal for the benefit of our customer. Okay?

Got it. I think with that, we actually have to end the presentation and move on to the next ones. But Dan, thanks very much for giving us an update, both on some of the shorter-term things going on, but also and maybe more importantly, on the long-term trajectory and growth profile for Ecolab because it looks like you've got quite a lot laid out for you going forward, and we wish you the best of it.

Thank you, sir. Thanks for the opportunity, and thank you all for your interest.

Thank you.