Ecolab Inc. (ECL) Earnings Call Transcript & Summary

Good morning, everyone. I hope you enjoyed that video. First of all, welcome to our 2021 Biannual Investor Meeting. I'm Mike Monahan, along with Andy Hedberg and Nate Brochmann are responsible for Ecolab's Investor Relations. On behalf of all of us at Ecolab, thank you for coming to St. Paul today. It's great to see you all in person after 16 months of virtual meetings, and for me to know that I don't have to worry about being double muted. And for those of you who are on the webcast, thanks for joining us online. We're looking forward to a very productive day today discussing Ecolab's business and our plans for the growth. As you know, time is very important. So we have a lot to cover, so let's get underway. First of all, a few housekeeping items for those in attendance. We'll begin with a safety announcement. In case of fire, you may exit either through the side door over there, behind the intersection of the ESG and the health booths, or through the main doors you came in here through the lobby. Once outside, please cross the road and go down the parking lot where you'll find an assembly point at the red evacuation sign. Restrooms are out the door to the right. There will be a short break at approximately 9:10 a.m. We'll hold a trade show to display the products from our business, as you see around you, a little after 11 a.m. It should run about 45 minutes and be immediately followed by lunch with the presenters around noon. We'll then continue with presentations after lunch and conclude with the Q&A session followed by 2 tour options, one being the R&D labs with our large heating/cooling system in our building to show the alkaline water. The other will be a tour of the nearby Omni Hotel, which I think some of you stayed at last night, to see the Ecolab Science Certified in action, along with our products that support that at a customer property. [Operator Instructions] For those in person, WiFi is available in this room. If you have any problems, please contact Susie outside the doors. Transportation from the event to the airport or elsewhere is available through app-based services. If anyone is having difficulty, please see Susie at the break, and she can provide you with contact information for alternative transportation. Finally, please turn off your smartphones and other noisy gadgets to mute or off, and recall that this event is being webcast. And now to everyone's favorite, the cautionary statement. Please take a moment to read the disclosures about forward-looking information, non-GAAP information and market share data on the slide shown here. Please note this presentation at this meeting and the accompanying slides include estimates of future performance. These are forward-looking statements, and actual results could differ materially from those projected. Factors that could cause actual results to differ are described under the Risk Factors section in our most recent Form 10-K. And now it's my pleasure to introduce Ecolab's President and Chief Executive Officer, Christophe Beck.

Thank you, Mike, and good morning, everyone. Glad that we could make it, that event, even if it's in a hybrid form with people online and you're in the room in as safe an environment as we could be, obviously. And I'm glad as well I can lead that conference in my first year as CEO. What a year. I'll remember that. I've always been told that the first year is a very special year. Well, it is a very special, for sure. But at the same time, we have a great team, leading a great business. And that's why I feel really good with where we are, and even more, where we're going as well as an organization. And interestingly enough, when we think a little bit back, last time we met was end of 2019 when the world was kind of in a normal place and a lot has happened, obviously, in the meantime. So when we look back the last 2 years, well, following our big pillars as a company, well, we look at what happened on the health front. Well, we got the COVID-19 pandemic that's been hitting over 200 million people globally. There's another pandemic that most do not talk about, which is the African swine fever, which has hit many pigs as well around the world and led to the killing of 25% of them as well during that same time as well. Water has remained an issue, with a gap between the supply that nature can provide and what we need as mankind. By 2030, that's going to exceed 40% by it, and climate hasn't improved, obviously, as well in the meantime. And when we thought that, that was kind of enough, during that time, we got the D variant over the last few months, starting obviously so in Europe and other places around the world and moving to the U.S. as well. The African swine fever so became as well the #1 pandemic in China as well at the same time. The gap for water supply and demand moved from 40% to 56%, and on the climate, while we've seen the reality of this change pretty clearly at the beginning of the year as well in February in the U.S. with the Texas freeze. And that was not enough. We got, obviously, so Hurricane Ida as well 10 days ago that hit to the south of the U.S., where we have a lot of operations as well, and most importantly, our suppliers and our customers as well being based over there. So it's an unfortunate event, obviously so, for those who have been impacted in that region of the world. And for us, it's a short-term event. And that's why we wanted to announce it as well yesterday in the spirit of old transparency with our investors as well as a company, we would have preferred not having an event like that, obviously. When there is something, we share it as well with you with what we know, and we don't know everything yet. But what we know is, basically, we don't see that as a long-term event. It's short term with a short-term impact, and it won't have a significant impact on our top line momentum, which is really good, which is led by the institutional recovery, which is led by the momentum we have in our Industrial segment as well, but it will have an impact on our margins short term, especially in Q3, which we estimate overall between Q3 and Q4 something similar than what we've seen as well with the Texas freeze earlier this year. But at the same time, when we look at the second half of the year, we will deliver very strong growth versus 2020, which is a good sign as well. And most importantly, we keep building the momentum as well so for a very strong 2022, which is what matters, ultimately. Now when we think about all those challenges that we're facing and that our customers are facing as well, we're in a place, as a company, that's uniquely positioned to help our customers help address some of those major challenges because we have an impact, which is big. When you think about it, on our health pillar, we've helped in 2020 clean over 60 billion hands. Interestingly enough, we thought we would be there by 2030. It's been 10 years earlier. That's showing so how much the company has been agile as well, so helping customers address issues like COVID-19. In terms of food, we've helped our customers serve safe food for over 1 billion people. We've helped save enough water for over 700 million people as well in 2020 alone. And in terms of climate, we've had reduced greenhouse gas emission by 3.5 million, as well, metric ton, which is really demonstrating what we can do as a company. When we saw that happening earlier in the pandemic, it was really for us the sign that it's an Ecolab moment. It's really where we can help our customers more than ever. And we know they will remember how we dealt with them during difficult times, obviously. And that's why we decided to double down and to invest even more in what we're doing and what we are counting on so for our future as well at the same time. And that's why we decided to protect what matters most for us. First, our team really making sure that we kept the whole team, we trained the whole team really so to have them ready-to-serve customers as well as they could, and they've done an unbelievable job in very difficult times as we all know. We protected our customers with expertise. They didn't know what COVID-19 was, obviously, but people in this building had the expertise and could help those millions of customers out there understand what is it, how can I deal with it, how can I operate further as well depending on the industry I was in. As well at the same time, we provided innovation. We launched Ecolab Science Certified as well. And most importantly, we protected the company. We really said we will keep our investments for the future that are so important so for us and where we're going. We protected our cash flow, as you know, and we protected the balance sheet as well at the same time. And thank God, we did that as well, because we could strengthen our fundamentals as well at the same time, which is so important and so at the core of everything we do in the company. When you think about top line and bottom line as well, 80% of our business has been doing pretty well, a top line and a bottom line. While institutional has been hit, obviously so, the most as a market, they really took that opportunity to reposition themselves during that time, gain share and come much stronger when the markets reopened, wherever that is, obviously, around the world, which is in different places as we know, as we speak as well at the same time. We've strengthened as well the new business generation. I was positively surprised to see that in 2020, we managed to sell more new business than even a year before, which has been a remarkable accomplishment by this team as well. And in '21, the progress is being shown as well, which is all leading to good news, obviously, so for the future as well at the same time. Pricing and inflation. This is not just a new topic, obviously so for us. Pricing at Ecolab is pricing for value. The value we create for our customers needs to lead for increased pricing. And that's why we never go backwards in pricing as a company, as you know, over the last many years that we've been together as well. And you can see on that chart, blue is the pricing and the orange is the delivered product cost, basically. So our cost increase that we have, really following our mantra, that we cover the dollars for the first year and we cover the margin in percentage as well so for the second year as well, which is a practice that we've been using for many, many years so very successfully. So as you can see, this is a journey that's never an easy journey, but a quite successful journey so for Ecolab, and especially, for the future. Pricing is good, ultimately, so for us going forward. And in terms of structural productivity as well, we've invested so for years in digital automation, in backbone infrastructure as well very successfully. And as you can see as well, so our SG&A ratio went down not because we reduced our team but because we improved the performance through technology, which is the right way to do that, and the best is to come. We're definitely not at the end of that journey as well. And we strengthened our moat, our competitive advantage as well supporting our 25,000 field experts we have around the world, keeping -- feeding R&D, which is so important. When you think about it, it's almost 10x more than our next competitor as well, which is showing the power of innovation that we have here. We've expanded our digital footprint as well; and as well, the trust in our brand with Ecolab Science Certified that I'm going to cover as well in a second. And when we think about innovation and leveraging our competitive advantage is really thinking about customers. What do they truly need in the future? And when we look at what many companies out there are committing as well in terms of ESG ambitions, many, and always, more are doing so as well, being net zero water, net zero carbon or both, diversity objective as well, well, we want to be here with our innovation, with our services, with our programs to help them get there. And this is our main driver in terms of innovation. And that's why when we think about our value proposition, we fine-tuned it as well over the last 2 years, which is basically helping them maximize the outcome of what they produce, being guest satisfaction in a hotel or safe food for a consumer good company or a safe environment in a hospital, ultimately. But at the same time, it's to minimize the impact they have on the environment. That's the usage of natural resources, the creation of waste as well, and ultimately, do all that as well at optimized cost, the lowest possible total cost that you can have. And we support this value proposition by big programs like Ecolab Science Certified and digital for net zero as two examples. Those are not the only ones, obviously. So let me take the first one, talking about public health, people health, Ecolab Science Certified. Well, during the pandemic, infection risk became very apparent for everyone around the world, whether we loved it or not so much. Well, it's been clear for everyone, and people got worried going to public spaces. People got worried to go to hospitals. People got worried with what they were eating. And people got worried as well about what was in the food that they are basically eating as well at the same time. And that's why we came up with that program of Ecolab Science Certified, which was a COVID-19 program, ultimately, really following the needs of our customers. And that's been a very successful story. We didn't know at the beginning, it turned out into a very good story, where today, we have a program that's reassuring guests going to restaurants and hotels for 150 chains in the country. We wanted to really focus that to the U.S. First and foremost, it's 30,000 locations and counting. Obviously, we're not going to stop here at that time. And it's created $50 million of incremental sales as well at the same time. And the last one who joined the pack is McDonald's, actually, who endorsed as well for this program a few weeks ago, which is really showing how relevant that is for that industry and how we can drive sales for us because to be certified, you need to use all the programs that's driving penetration, it's driving growth naturally as well. Talking about the planet health. I mentioned so to you just before as well, and we're all aware of all the challenges we have in water and in climate as well which, in both cases, are not going in the right direction. We'll need more water than what nature can replenish, and temperature is going the wrong way. The interesting news is that one of the main vectors in order so to reduce carbon emission is to reduce the water usage, because almost 25% of the energy that's being produced in the world is used to manage water, to heat water, to cool water, to transport water, to treat water, you name it, ultimately. So when you reuse water, you reduce the usage of water, you reduce the energy, you reduce the cost, you reduce the carbon footprint as the main and most immediate driver as well so for it. And that's why we've launched over the last 2 years, this digital for net zero program, which is helping our customers get to the ambition of net zero by 2030 or 2050 depending of the company, depending of the level of development as well really in 3 phases. The first one, really leveraging the technology we have with 3D TRASAR, you're familiar with it as well, reducing as much as you can with existing technology and best practices around that specific customer. But it's moving to the next level and having plants that are -- flagship plants that are at net zero operating, learning from it, and then expanding within that company, and ultimately, bringing companies together within a watershed since we know water issues are local issues, ultimately, to help them get to net zero in a way that makes financial sense as well, which brings me to eROI. You're familiar with it as well. This is our core performance metric for our customers, which is driving growth and driving pricing. What is it actually? Just as a quick reminder, it's basically summing all the benefits that we are providing to customers, starting with business outcomes, the quality of the food, the quality of the service, whatever the industry is focused on and how we can help them improve that. It's improving their performance, their productivity. It's improving the environmental impact, water and energy and waste, as mentioned before. You add those 3 and you get to a dollar number of how much value we've created for them, and we divide it by the incremental investment they made in our company. This is what we call the Ecolab Return, eROI. And as you will see, with most of the business afterwards, you usually get a return that's north of 25%, which is why pricing is something that is doable so for us, doesn't make it easy, but it makes it definitely easier, and it helps customer merchandise as well the progress they've made from an ESG perspective as well because we help them get this information in real time. Which is why we believe that we can do even better as well going forward and that we will keep delivering on everything that we've promised. Starting as well with the fact that our market is growing, not only because the market we serve in many cases are growing but at the same time, because we're adding new end markets, like in the last 2 years, data centers is a market we didn't have 10 years ago or animal health is a market we didn't have either. So we serve $147 billion market today. We're the market leader in most of those places, and we only have 8% of that total market. And when you think about it, so going circle to customer, which means selling to customers who are already buying something from us, where we can multiply by 4 or 5 the size of the company just by selling to them everything we have in order to get to net zero, or in order, ultimately, start to protect their guests or their consumers as well. In most of the end markets that we serve, as you know, you've seen that chart many times, we're the leader in most of those places. But at the same time, we have huge room to grow. The blue is the size of Ecolab in that market. The green is the available market that you see as well out there. We have plenty of rooms as well in difficult times, which is why we remain committed to our long-term stretch objectives. It's not going to be every year, but that's the long-term trajectory that we want to keep of 6% to 8% organic growth. It's 20% operating income margin, and that's not a sound barrier either. That's the next frontier, and then we will keep moving up, obviously so, from there and delivering so 15% earnings per share on an annual basis as we've done as well for many, many years. And we firmly believe that, that's something that we need to keep as our ambition year after year for the years to come. At the same time, to do it the right way, as we've always done it, especially in difficult times, and really making sure that we are a company where the very best, most diverse talent want to come, join, grow and thrive. And we've made very good progress as well on that side as well as a company, and you will learn much more as well a little bit later during the trade show as well so from Anne and team, who are going to share us the progress and what we're doing as well there. So after 97 years as a company, starting in 1923, we're still at the beginning of our growth journey, which is really what's pumping me up every day, so to come and work with this team and addressing some of the biggest world challenges, serving a market that's $147 billion big, with 8%. So we know that we have 92% out there that we can still address, which is really good for us as well. We're serving long-term needs, as we've mentioned before, so on health, on food, on water, on climate, which are pretty key right now and even more important after the pandemic as well. We have a good strategy that's been proven as well. We're fine-tuning it all the time. We're not changing direction. We're fine-tuning it, making it even stronger in order so to accelerate the top line. We work a lot on our margins as well at the same time. You've heard about eROI driving pricing at the same time as well, structural productivity as well, all the investments in digital automation that we do are leading to that as well and will pay off as well in the years to come. And we will keep working on our competitive advantage, really making sure that we can offer as much as we can to our customers going forward, and we have the means to get there which is the beauty as well of our model, our team and our business. So let me conclude here and share with you a little bit of how the day is going to go. It's most importantly for you to know the team. You know many of us, not all of us. Well, it's an opportunity so to get together, to learn about those businesses, to ask questions as well and getting closer to what we do and opportunities that we see as well going forward. So we will have 3 groups' presentation this morning, starting with Industrial; and then we'll go institutional; and then we'll go health care and life science; and before the lunch, we will have a trade show around the room. And here, we'll have an opportunity to see firsthand what it means and how it works and what are the challenges that we are addressing as well at the same time. And after lunch, we'll come back. We'll have Dan Schmechel, our CFO, who's going to share his view of the company and our future. I'll do a quick close, and then we'll have time again for Q&A. Three Q&As after the 3 groups, a Q&A after R&D, and a Q&A after my close as well at the same time. And then for the ones who can make it, there will be 2 tours that will be available, one here in the R&D center and the second at the Omni Hotel, which is kind of a showcase for us where we're trying to really bring our very best technology so in a place that's very close to us as well, and we should be done at around 4:00 p.m. So with that, I'd like to introduce my friend and colleague, Darrell Brown, who is running Industrial. Is that Darrell?

Thank you, Christophe. Well, good morning, everyone. My name is Darrell Brown. I've been working for Ecolab for 19 years. In February of next year, I'll get my 20-year pin with the company. I've worked for Ecolab in many locations around the world: Australia, New Zealand, in Asia Pacific itself, in Europe, and I've led global businesses. So a very long history with the company in very diverse environments, which has allowed me to really understand the business very deeply such that we can position it for future growth and performance. So let me move now to who we serve. So we have 90,000 customers worldwide, across 170 countries, providing the best of Ecolab's offerings in the Industrial space. We have 3 big groups that you'll hear from today. So Jeff Bulischeck will be talking about our heavy water business; Nick Alfano, our light water business; and Chris Roberts, our food and beverage business. So we have fundamental value proposition, which Christophe has talked about around delivering maximizing outcomes, minimizing impact, and of course, optimizing total cost of operational savings, delivering highest return of eROI. We have an incredible field team driving on-site expertise. We also manage connected chemistry through digital offerings that we have across the globe. We also have great predictive and prescriptive analytics, which are now being developed day in and day out across these locations. So an incredible value proposition, which resonates incredibly well with our customers. We also have a huge market opportunity. We have a small share of a large market. So we have an 11% share of a $60 billion market. We have a very good and balanced portfolio across the globe, both in geographical terms but also in segment terms. We also show terrific performance year-on-year. As we know, COVID was impacting 2020 performance top line. However, in 2020, we delivered double-digit operating income, and we continue to aspire to the 6% to 8% top line growth in the organization as we move forward. And we think we're incredibly well positioned to do that. So looking at the drivers for growth. And really, I'm going to concentrate on the top 5 drivers that we have in the organization. First of those, of course, is segmentation for growth. We continue to look for opportunities where we see the biggest opportunity for growth and the areas where we can provide focused investment and resource. Some of those areas, I'll talk about a little bit further on, and of course, Jeff and the rest of the team will talk through that segmentation approach as we walk deeply into some of the divisions. The big growth bets we have. Food and beverage global solutions is a big growth bet. Animal health is a big growth bet for us. Data centers, as Christophe has talked about, and microelectronics. So those areas we're really doubling down in terms of our investment and our resource and our focus to continue to drive double-digit growth in those areas. Of course, digital solutions. We continue to make big investments in this space, which is enabling us to drive digital solutions for our customers to provide predictive and prescriptive analytics. We also have the Ecolab Global Intelligence Center, our Hub & Spoke model, based in Pune, now expanding that Hub & Spoke model into Shanghai, into Europe, of course, into our Leiden facility, into the Middle East, into Daman, providing our customers with the insights that they need to make the decisions for their customers and for their business. Also, innovation. We have 4 big innovation pillars in Industrial: We have global high-tech. We have food safety. We have prescriptive analytics and process analytics, which drive continued innovation from top to bottom in terms of how we go to market and how we make the investments we need to make to innovate to go forward. So a big, big focus on innovation. And lastly, ESG. And we know the conversations with our customers are changing. Those customers used to focus very heavily on who has the best corrosion inhibitor, who has the best antimicrobial agents. Now it's about how do we get our customers to a net zero position? How do we make sure we meet their sustainability goals in 2030 and 2050? And how could Ecolab help our customers drive to those ESG goals? So we have a couple of performance enablers, 2 of which, digital and innovation. So we're really working hard to make sure that we're digitally enabling our customers to drive that innovation. We also have the task to drive our ambition of 100% of our customers connected to 100% of the cloud to drive 100% capability so that they have the insights that they need to make the right decisions for their business. And so these 4 innovation areas, which I talked about earlier, high-tech, fuels and feedstock, food quality and process analytics, are helping us drive through those needs our customers have whilst enabling it with digital technology and investment. And the focus for today. So what you'll hear today from our team, both on the heavy, light and food and beverage side is really focused around some of the efforts we have around segmentation, our digital for net zero initiatives, the innovation pillars which we're driving hard towards the 4 pillars I mentioned earlier, our pricing activity, also sustainability as we drive towards a net zero world, of course, making sure that we continue to lean on our value proposition of highest return for our customers driving eROI. And with that said, let me now pass on to Jeff Bulischeck, who heads our water heavy business. Jeff?

Thank you, Darrell, and good morning, everyone. My name is Jeff Bulischeck, I've been with the company for 31 years now. I've had the opportunity to run a variety of global businesses, and I'm really excited today to share with you what we're doing in the heavy water space. Just to orient to, this is a $2 billion sector that's comprised of 5 different divisions operating and serving essential markets from chemicals through power and primary metals, our downstream energy and our mining business, leveraging all the best that Ecolab has to offer for water management and process stewardship. So let's look at what that really means from the composition of this. We're a $2 billion business, but we have a very big playground to operate in with tremendous opportunities. And what we're also excited about is how well we're positioned both regionally in the construct of where we serve our customers, but then by the scale and scope of each one of the segments we're in, giving us the opportunity to compete, win and then continue to invest to grow. And speaking of growth, what we're most excited about and quite confident in is the journey we're on for accelerated performance. What's really driving that and enabling it is the outside in view that we take on everything we do. Ultimately, we help our customers with what Christophe and Darrell talked about, and that's the monetization of the value proposition. We demonstrate that through our eROI metrics, and we use it to also drive what we're doing from an innovation standpoint. Our customers are really walking with us at this point on net zero ambition, which then further leverages our historical capability around water management. But then also, as Christophe talked about, has that impact on greenhouse gases. So we're at a really good nexus of doing what we've done really well for a long time and using that to drive outpaced growth in the future. So let's talk about how this really translates to what our customers are asking us for, and it's what we call the power of end. We've had a rich history of talking about how we can help our customers' operations improve the efficiency and the effectiveness of what they do. And that's always monetized through cost of operation or asset reliability. Now we're coupling the end of sustainability. And what they're coming to us and asking is, how can you help us get to these ambitions that we're putting out and the goals to achieve a better sustainability and environmental footprint. And that's all going to come from how we take them from a history of looking at single unit operations and making those integrated. A lot of you may be familiar with our 3DT control technology, which really positions us for decades now in the digital space. So for us, this is nothing new. And quite frankly, we feel it's a tremendous competitive advantage, because we've got a rich history of what we've been able to do and learn that then drives leverage. And if you look at what a lot of the customers in this space want is they want deeper insights not only at a local plant, but as you get that integrated plant, they know that for them to compete on a global scale, they have to have enterprise insights to drive outcomes based on benchmarking, and then best practice sharing so they can get a bigger lift. So let's look at an example I orient to. On the left-hand side, you'll see that we deliver outcomes consistently in a very data-oriented way. And then on the right-hand side, if you will, this is an example from one of our partners in the global energy space. And we worked with them and are continuing to work with them to show them how you could take one operation and employ technology to not only make the assets more efficient and more effective but you can drive energy and water savings at the same time, monetizing and documenting that. That in and of itself at one plant gives you a better than 50% return on your spend. Through our auditing, modeling and then execution, we've also shown them that as you grow with us, you grow exponentially. It's not even linear. So we've shared with them and that we're now working on the process of taking this broader globally. And by the numbers, not only does the eROI go from over 50% to over 75%, you could see the material impact on the amount of water and energy that gets saved, and then the financial operational savings it generates. With what we did before the pandemic, during the pandemic and then continue in the future, it's really about robust fundamentals and then very forward-looking transformation. Everything that we've done to leverage our history now positions us for our future. That's positioning us now for entering very new and emerging markets, leveraging what we've always done around digital, connected chemistry and on-site expertise. It's the trifecta combination that really sets us apart in the industry. What we're doing with that, not only helping the current customer base but we're looking at new and exciting markets, whether it's hydrogen, decarbonization, plastics to fuel, getting into solar as well as different minerals for -- such as lithium for electric vehicles. Nowhere is this more relevant in the transformation and application of technology and innovation than in our downstream business. We've had numerous conversations with executives around the world as they've stated their new net zero goals. And as they're doing everything they can operationally and even some name changes to go from big oil to big energy, what that allows us to do, again, is take all of our capabilities, work with them to continue to do profit management and help them run their operations as best possible, but leverage what we're really good at on the water management side that affects their net zero water ambition, and then also translates to the net zero carbon ambition. Let me share one more case study with you. This is a European partner of ours in the steel industry whose initial goal was to increase their production so that they could increase their market share. But at the same time, they came to us and said, we want to do that, but we want to compound that with reducing our environmental footprint. Sometimes, that would seem like those are going in different directions to try and accomplish, but we worked together with them with our auditing, modeling, machine learning capabilities, leveraging our digital and our water management solutions to come up with an end-to-end comprehensive package that they're deploying that now has the opportunity to not only help them achieve that extra 3 million ton production, but they're reducing their waste footprint. And they've actually saved 19 million a year. With the span of the contract that we're in, it's going to be greater than $180 million, or substantially, beyond the 75% eROI. What I'd like to wrap up with is clear and simple. We're very proud of the fact that we're a world-class leader in this space. We've got significant room to grow. We serve essential industries in helping them do things and provide things that touch everybody's live on a daily basis. Net zero builds on our rich history of capabilities. It's more relevant, practical, and we're extremely well positioned to have material impact helping them achieve that right now. And we're doing this by leveraging digital, not only for some internal operational efficiencies, but more to the point, we're leveraging digital for these external platforms that provide unparalleled insights for our customers to drive enterprise-wide outcomes in their operations globally. Last, this sets us up for an incredible gain share, and that's what we're most excited about is continuing on this growth journey. Thank you. And now I'll turn it over to my friend, Chris Roberts.

Thank you. Good morning. My name is Chris Roberts, and I lead our food and beverage business. I've had the pleasure of being on the Ecolab team for a year, but I do come to the team with over 30 years of experience in the food industry at companies like the Frito-Lay division of PepsiCo, the Coca-Cola Company, Cargill and Land O'Lakes. So I really enjoy food. I'm a foodie, if you will. And I'm happy to be a part of the food and beverage team now helping to lead our growth efforts on a go forward. With the time that I have, I'm going to share a brief overview of our business, and then really try to contextualize our opportunities for growth around the world given the innovations that we have across the multiple segments that we serve. To start, I'd just like to provide a brief overview, which shares with you the fact that we have a $2 billion franchise, which is focused on serving customers in the food, beverage and animal health segments. Each day, we try to help our customers create value within their franchises by helping them or enabling them to drive meaningful outcomes specific to clean water, safe food and intelligent insights. This is incredibly important for us, and we are able to successfully deliver consistent results around the world. But as many have shown you in the earlier charts, we still have huge upsides in terms of the opportunities that we have. The important thing to really take away from this is the fact that our value proposition in both hygiene as well as water are critically important to our customers as our consumers consistently demand new and better product, services and transparency. We feel good about the fact that we are developing and deploying digital technologies, which help our customers deliver intelligent insights, which, again, help them deliver or come by meaningful insights or meaningful outcomes across their businesses. Because of all of this, when taken together, we feel as though we have the opportunity to deliver strong long-term performance in all of our segments in all the regions across the world. And I'll talk a little bit about that. What we try to do as best we can is to link to insights that are most critical or trends that are most critical to consumer demand and customer needs. Here, we've depicted a few on the left side of this chart. The key here is not so much the trend itself but the implication, because by understanding the implication, we can work alongside of our customers as strategic partners and innovate in ways that create value for them and for our franchise as well. Consumer preferences are critical and understanding them is really important. And so I've tried to create -- or we've tried to create a quick example explaining to you why it's so important for us to understand the consumer needs and how they have evolved. If you think about it some years back, consumers were very basic in the types of things that were basically driving their purchase preferences. In many cases, it was all about taste and price. However, today, the things that drive purchase are much more complex. They've created multiple challenges and opportunities for our customers. And as we've studied the insights I talked about before, we're able to innovate and work alongside of our customers as they go into new geographies, new locations around the store and go into new products. An example of this would be PepsiCo. If you think about what their portfolio is, long ago, it was all about fun for you. But over time, it's morphed into better for you and good for you, which means that around the world, it has various consequences as it relates to packages, the different products and the different solutions that they need. By working together with them and innovating around outcomes that were meaningful to both of us, ultimately, we've gotten to a place where as they've grown, we've grown, because we've been able to create value in our proposition that comprises both water and hygiene. The big bets that we see that we're investing in as well also align very much with consumer demands and needs across the world. As you know, as many economies continue to expand, protein and food consumption will expand right along with it. We spend a lot of time thinking about what these growth drivers are, but more importantly, aligning our product services portfolio and our approach around innovation and how and where we deploy it to ensure that we are part of that growth. We have great relationships with customers in these segments. And we see, as I mentioned in the previous chart, our opportunity to growth is very much aligned to this. In addition, we also are very optimistic about growth that we'll be able to glean from our animal health business. As food transparency and biosecurity continually become more and more important, our portfolio, when you think about water, hygiene, going all the way back to the farm and moving all the way forward to the fork, is uniquely positioned to create value and provide value for customers in a unique way that only we can provide. All of these components are incredibly important, particularly though, when linked to our customers' increasing focus on sustainability. This is where we really are able to bring all of this together. What this chart really depicts is, on the one hand, on the left-hand side here, our customers are one customers, basically, pronouncement or commitments around sustainability, but the middle part is where we link to that and can bring everything, all of our resources to bear to drive outcomes. It's really based on our food and beverage global solutions team, which has relationships at senior levels that then enables us to make sure that our innovations around water and hygiene are both purposeful and effective. We're constantly innovating around digital and making sure that our service model is integrated in a way that provides outcomes that deliver a sustainable eROI. An example of how this has worked is depicted here inside of a processing area of a customer. As you can see, there are water solutions as well as hygiene solutions that all have sensors that basically flow information into our ECOLAB3D solution. What we're able to do here is provide intelligent insights to our customers. These help them deliver on increased operating efficiency and reduce the use of water. This is one of the ways where all those things come together, the understanding of what's important from a consumer standpoint which is driving the activities of our customers, adding to it, our customers' focus on sustainability and our technology and enabling both our customers and ourselves to help make, or together, collaborate on intelligent insights leading to outcomes that grow both their business and ours. A case study which depicts this is a cold food customer we've actually worked with. As we put all of our insights and innovations together, basically, the annual savings from that around water, energy, greenhouse gases are meaningful and significant. You can see in this particular case that the eROI is above 25%. The solutions that we deployed are everything that I spoke about: water quality, you have financial impact, you have a number of different things that are valuable to our customers. So we're very, very optimistic about our opportunities to grow. We have opportunities to grow around the world. Our growth will be very balanced. We have innovations and focus in those categories and segments, where consumers will increasingly seek new and different solutions. And we're working collaboratively with our customers as we see a suite of products, services and solutions that provide them with unassailable value. In the end, we are a market leader with major growth opportunities. We are operating in a favorable landscape and leveraging digital to win. We believe that we're positioned well to grow, and we're excited about our future prospects. Thank you. I'll turn it over to Nick next.

Thank you, Chris. All right. Well, good morning. My name is Nick Alfano, and I'm leading our Global Light business. And I'm now in my 26th year with the company. And the first 25 years, I was involved in the business that Chris just talked about, which is the Global Food & Beverage business. So what I'd like to do now is just give you a profile of the business. So this is -- light is a $1.3 billion global business, where we run the same consistent operating model all over the world. You can see that it's very highly segmented into the five segments you see there. A couple of call-outs. So in transportation, we operate in traditional auto and truck assembly, but we're now pivoting towards electric vehicles, batteries and aerospace and defense. When we say high tech, that's the name for our data centers and microelectronics business. So data centers, you know what that is. Microelectronics, that's the manufacture of the chips that end up in vehicles, computers, in your phone. Manufacturing is a grouping of different industries, pharmaceutical, glass, metalworking that will further segment. And then institutional, of course, is facilities management, lodging and schools. And then you can see that as my colleague said, we operate five anchor platforms, which gives us the ability to go influent to effluent with our customers and solve their biggest water-related challenges. So we're at the forefront of the biggest water challenges in the world, right, starting with water quality, right? So if we get the water quality equation right, that helps our customers with Legionella prevention. Then pivoting over to water quantity, right? So that's the whole notion of reducing, reusing and repurposing water that ultimately gets to the right, which is leveraging for net zero. We know, as everybody said, that if we can reduce the amount of water used, we can drive down the amount of energy, which then reduces the greenhouse gas emissions. And our value proposition is strong. As Christophe mentioned before, it starts with people health to planet health to business health and ultimately ends up with the highest return to the customer as we can serve those precious natural resources in the eROI. So think about a hotel in New York City, right? We'll start out with our water safety program focused on Legionella and then we'll put in our 3DT digital offerings on all the HVAC systems to drive down water usage, which takes down with it energy and then ultimately greenhouse gas emissions. So if you think about the business, right, like we've all said, so we operate in a $14 billion global opportunity. We've got about a 10% share. You see good geographic balance between North America and outside North America. Very good levels of growth as we drive into Europe, EMEA, AP, China and Latin America. And the operating model here is we incubate our segments in North America and then move them around the world as the customers are ready for those offerings. So a good example of that would be data centers. We started our data centers in the United States. And now we've moved it to Asia Pacific, Greater China, Europe as well as our microelectronics business. So again, we lift and shift as markets are ready for the solutions. Now this is a good, strong growth business for the company. You see that we generally operate and have performed in the 6% -- the 6% to 8% top line sales arena. And really, what makes this light business run is that segmentation that I talked about. We carve out the segment. We put the resources on it. And that gives us the ability to drive faster growth. In addition, we've put a lot of innovation into this segment to help our customers manage their water processes more efficient. Then on the digital front, we've got a number of digital offerings. You'll hear them as Water Flow Intelligence, Water Safety Intelligence, 3DT, Water Quality. Those help our customers monitor all the streams of water in their plant with smart water meters and digital sensors to get at that water reuse, recycle and repurpose. And that -- all of that allows us then, as Christophe said earlier, to get that eROI, which allows us to price for that value. Now when we think about the growth opportunities in this business, as I said before, there's $13 million of available market share to go after. The way we've chunked it up, and we think we're in a great position to drive this business for the next coming years, is to continue with that geographic and market expansion that I spoke about. So an example of that would be, as Chris said, the partnership between the light business and the hygiene business, we call it Food & Beverage Global Solutions. That's giving our customer influent to effluent water and hygiene solutions for the 35 or 36 biggest food companies in the world. In addition, we're taking our core segments, like transportation and institutional, from North America to places where there's big opportunity, like in Europe, Asia Pacific and Greater China and making sure that we focus on again that key opportunity of water safety and influent to effluent water. Another big opportunity for us is in the pharmaceutical market. So that was in that bucket of manufacturing that I talked about earlier. It's a huge global opportunity. And we believe that there's an excellent chance to drive significant growth in partnership with our Life Sciences business, already has a pretty good footprint in that market. The story here is that a lot of the pharmaceutical companies now are becoming very prescriptive on their sustainability goals. And we believe in partnership with Life Sciences, we can drive that quality and end-to-end story very, very strongly. And then Global High Tech, which again is the combination of our data centers and microelectronics, a very, very large global opportunity. We're on the front end of it right now. We see data centers exploding everywhere around the world. And really what they're concerned about is water use and uptime. And our offerings are geared towards both of those. As well as microelectronics, those chips that are everywhere, what's really important there is getting the surface precise and ready for it to put the nodes in and then controlling the wastewater that's generated from the operations that go there. So we like this segment a lot. And we feel like it's a great growth bet for the future. Now on the topic of data centers. This is a story of -- this is a large hyperscale global data center customer of ours, where we join them right on the front end of their journey for water management. And you can see that what they asked us to do was figure out where all the water is being used in the data centers and also bring them consistency and standardization to 290-plus data centers around the world. What we did was we combined a lot of digital offerings, starting with our Water Flow Intelligence, that's the ability to map those water streams everywhere that they are in the plant, and then couple that with our 3DT technology on the cooling towers to again drive down the water usage as you see, 30 million gallons, 17 million kilowatts of energy and ultimately ending up with $8 million of value and a very, very strong eROI. Similarly, this is a global brewer, one of the largest brewers in the world. And you can see here that they were asking us to take them, help get them to net zero, right? So they wanted to be carbon-neutral on those breweries around the world. And they operate in places around the world that are very water-stressed. So they asked us to focus on a key subset of breweries. You can see the same thing there. We focused again on the Water Flow Intelligence digital offering and coupled that with 3DT for CIP to really save them a lot of water and drive down their greenhouse gas emissions with a very strong eROI of greater than 60%. The other thing that's important to note here is with this performance in this customer, we've had the opportunity to expand with them significantly around the world in all places where they go. So in summary, I think what I wanted to convey today was this is a business that's got a serious amount of opportunity, $13 billion of opportunity. We will continue to segment it, so we know the equation here is segmentation, gives us focus and then ultimately gives us growth. I showed you a couple of the growth bets. And we'll continue to leverage those in a big way, combining again the digital and innovation for net zero. And we feel like we're very, very strongly positioned for growth here in the future to keep this business going. So thank you. And I think now we're doing questions.

You can also make sure that you submit your questions in the chat, if you have any. So beyond those folks who are in the room here, please make sure you submit your questions on the chat. And I think we're going to be open for questions. So ask away. Sure.

John Roberts from UBS. What are we seeing in the value or price of water, which again drives the economics of your customers to want to use your chemicals to save more water?

So John, I think, generally speaking, it varies widely across the globe as we know, and particularly in areas that are significantly water-stressed right now. Some of those areas, the price of water isn't necessarily consistent with the actual stress that they're seeing. So our solutions that we're providing for our customers in those places really lean very heavily on some of the digital technologies that we have, our 3D TRASAR technology, as you know, which has been developed for about the last 30 years, I think, continues to provide insights that our customers can use to minimize their usage of water, maximize their outcomes and, of course, drive down their operational costs. And it varies across industries, of course. But generally speaking, our heavy bias towards 3D TRASAR technology and the use of that to drive down the cost of our customers for water usage, I think, plays very nicely into the value proposition that we have. Yes, next question?

Dave Begleiter, Deutsche Bank. Darrell, how do you think about margins in this business going forward as you attain your top line growth targets?

It's a great question. We've managed to weather the storms somewhat in terms of inflationary headwinds certainly as we've seen them manifest themselves in 2021, so increasingly seeing raw material costs escalate. I think our team has done a fabulous job pricing against those headwinds. We have a pricing for value concept, as I think you've heard the team talk about today, whereby in 2021, our chief effort is to really make sure that we cover the dollar headwind. And then in terms of margin rate recovery, we were looking for that in the following year in 2022. And I think that's a very typical flow for us as we see inflationary headwinds impact the organization, trying to make sure we price for that in the year. We see that inflationary headwind and then the next year, picking up the margin rate. Yes, please?

I'm Bruce Kennedy at D.F. Dent. I think the tailwinds, which you all discussed, seem like huge secular tailwinds. And one might see the tailwinds and think, "Wow, these are huge. This business could be growing above 10% or in the double digits." What do you say the biggest constraint is to your growth -- to your revenue growth? Is it a need -- is it that it's hard to get revenue growth that's at that level to be profitable? Or just what are the biggest constraints? And then secondly is the -- actually, if you'd answer that, then I'll -- sorry, blanked on the second half of my question, but I'll come back for the second half in a sec.

That's okay. So look, I think I tried to walk everyone through the drivers of growth that we have in the organization. And I think, for us, trying to get after that segmentation allows us to drive growth in areas where we see the biggest opportunity is. Some of the team have spoken about, they've spoken about the opportunities in data centers, in microelectronics, in our Food & Beverage Global Solutions business, in animal health, which is an emerging area for us. And so I think we see outsized growth, particularly in those areas. The segmentation is helping us get after that. So we're looking at dedicated teams, dedicated resources, dedicated innovation. And I think getting to those opportunities and coupling those with the rich history that we've had in terms of managing the water complexity for customers in our traditional businesses, I think, will continue to escalate the growth going towards our ambition of 6% to 8%.

Got it. And what do you say the biggest constraint is to growth? And then the second part of the question is, is there -- is your business something where maybe 60% or 70% of the business is growing at 1% or 2%, then you have this other 30% or 40% that is growing in the double digits? Or if you might be able just to break it down, so the biggest constraint to growth and then is there a dichotomy?

I probably wouldn't categorize it as being a constraint to growth. I think we try, I think, as dedicated as we possibly can to try and put the best resources against the best opportunity. And so as we think about our business portfolio and our geographical portfolio, we work very hard to manage that intersection between the both. And so where we see great business opportunity and where we see our own capabilities and the attractiveness of those markets, that's where we tend to go after that. So I wouldn't say we necessarily see constraints. I think what we try to do is focus our efforts in areas where we see the biggest opportunity and continue to leverage the foundation of what we've done for the last 100 years on our traditional business.

And is there a dichotomy? Is there one part that is perhaps...

I think there probably is. In every business, we see portfolios that have different portions to them. So we have parts of our portfolio growing double digit. Our data center business, I think, is growing beyond 40% right now. But we have more of our legacy businesses that are not growing certainly at that rate. So as we blend the two together, it's our ambition to try and get to that 6% to 8%. So yes, absolutely, we see businesses growing double digit and higher. And we see other businesses growing in the single-digit range, for sure. Yes?

Vincent Andrews from Morgan Stanley. Just staying within that conversation, how do you think about the investment spending necessary to continue to go after that aspirational growth rate? And maybe it's in terms of people, maybe it's in terms of R&D, maybe it's in terms of CapEx, maybe it's in terms of are there bolt-on M&A opportunities or other things you can do to sort of make sure that you maintain your competitive advantage as the industry continues to evolve.

Sure. Look, I think what we've always done at Ecolab is we've always tried to concentrate very heavily on our gross profitability and our gross margin. And so as we continue to see these increasing headwinds roll through with raw materials and our ability to price for those and to get value for what we do, I think that's the real engine for us in terms of our ability to continue to invest. That's the area we need to make sure that we maintain. And so we manage our portfolio incredibly tightly in our gross margin space. We manage our innovation incredibly tightly there as well to make sure we're innovating and we're gaining gross margin accretion each and every year. We're seeing the evolution of our digital tools helping us with our gross margin evolution as well. And so as digital becomes more prominent, as we provide more insights for customers and we get paid for those, along with what we're doing on innovation, along with what we're doing on pricing and managing our portfolio, that continued improvement in gross profitability allows us to have the investment dollars we need to get after this segment approach we've taken and get very focused on exactly the areas where we want to make big investment bets.

We've got a question online from Mike Harrison from Seaport Research Partners. As you look to pursue a broader set of opportunities in Global High Tech, will that all be organic? Or will you pursue acquisitions to expand the product offering?

So maybe I might throw that to Nick, who heads up our light business. Maybe, Nick, do you want to field that one?

I sure will, Darrell. So look, we've got a very large opportunity to grow in the base right now. So might there be some opportunities on the M&A front? Yes. But right now, we've got our -- we've got a very, very long opportunity to go and expand one of those data centers all over the world, I mean, North America, Asia Pacific, Greater China. So we want to capture that opportunity first. Of course, we are looking at innovation in different ways to change the game. But like I said, the organic growth is going to be obviously significant.

Yes, sure? I think we need a mic down the front here, just down here. We're probably due -- this may be our last question. I think we're kind of running close to time.

I just had a question on -- okay, I just have a question about -- on heavy water. How big a business is power currently? And what has been the net impact, positive and negative, of the transition that we've been seeing in energy away from more fossil fuel generation to renewables?

You know what, I'll let Jeff handle that one, who heads up our heavy water business.

In short, as everybody moves from thermal coal to other sources, we've been leveraging a lot of innovation, both in the renewables, in natural gas and then building up our position in nuclear. So we've been able to grow it. We see that as a continual growth opportunity because they're trying to do more with less. So it's an exciting space for us.

Nuclear is growing now?

Yes. And we can grow not only organically, but we can grow with new innovations to help on the digital and the data side.

So I think we're out of time. So thank you, everyone, for your questions, very much appreciated. And I might throw to Christophe, just finally.

Yes. Like just to make a few comments to build on what the team has said and especially your question, John, before related to the cost of water. I think it's important to keep in mind that the way we sell is basically not on how much what are savings dollars you get, but the energy that you save because you reduce water. And that's where you have the highest cost ultimately. And that's how we can mitigate basically the very low price of water, which is a complete separate discussion ultimately. So that's one. The second one, so for you, Bruce, as well talking about the higher growth businesses versus the lower growth businesses, we have this mantra as well in the company of saying there is no low-growth businesses. You might be in a low-growth moment, which is different, but you need to get back to a higher growth, downstream being a perfect example as such. So it's kind of where are you in your growth journey. Downstream is in a complete transformation for now because the industry is in a transformation as well. So we are at a lower growth now but building towards a bigger growth ultimately. So there is no business that is having a pass in a way and saying, "Okay, you're low growth and you're going to stay like that ultimately." So it's wherever you are on your development journey, if that makes sense.

Is it something there where you'll keep a low growth business that has very good returns and good margins? Or is it something where if you have a 3% top line growth story with extraordinary returns and margins, would you keep it? Or would you say the growth is too slow, so we have to ease your way out of it?

It's a great question. You know my predecessor, Doug Baker, used to say, "So let's not have strategy get on the way of making money." So that kind of situation, if we're better off with than without, we'll keep it. And if not, we won't keep it. That's basically the way we think about it. Thank you. Thank you, Tim.

Great. Thanks.

Everyone, thank you. We're going to take a 10-minute break right now. So please be back in your seats at 9:20 Central Time. And the restrooms are out the doors to the right. Thank you. [ Break ]

Okay. Let's do that again. Hello, everybody. Good morning. My name is Tim Mulhere. I've been with Ecolab over 20 years, and I've had the great honor of really running or operating in every single business that we have. You're going to -- we're going to spend the next 35 minutes or so giving you some insight in the fun business of Ecolab, the Institutional and Specialty business. So let me start off with the -- just a little bit of context of the group. We've got Institutional, which serves full-service restaurants, hospitality, long-term care and facilities as well; our Specialty business, which focuses on quick serve restaurants and food retail grocery stores effectively; and then we've got Pest Elimination, which, of course, serves all of those segments plus our Food & Beverage business in the Industrial group. Like Darrell talked about and his team, we really have very, very deep domain knowledge. And that proven expertise, combined with significant technology programs, really -- and adding in actionable insights and increasingly more so leveraging digital in terms of the insights gives us the value creation that we drive with our customers. When we get the feedback from our customers, the three things that they ask us to continue to focus on are making sure we help them on delighting their guests; driving optimized operational performance that is effectively improving their business operations; and importantly, maintaining their reputations, particularly as it relates to obviously foodborne illness, et cetera. So we chase a big market, $50 billion-plus market across the group. And you can see, we have leading positions in each of the businesses and great growth opportunities. And you're going to hear that through each of the individual presentations as we move through. So I would say one of the things that we found through the pandemic was that we ended up building stronger relationships, and we started with very strong ones with our customers. And we come out of the pandemic, we believe, stronger than when we went into it. And again, we felt like we had a very good position going into it. And you'll see that across all three businesses, and particularly so in Institutional, where our customers were under tremendous duress during the pandemic. And our teams really rallied, and we focused on making sure we took care of our teams, our customers and, of course, our overall business performance, as Christophe talked about, and driving deeper relationships with those customers, really focused on unit penetration and solution penetration, bringing new innovation to the table. And you'll hear that as Greg Cook takes you through the Institutional business and, of course, importantly introducing the Ecolab Science Certified that Christophe talked about earlier, and we'll give you a little bit of more depth on that as well. Our Specialty business has fantastic and very, very deep and long-standing relationships with quick serve restaurants across the globe, major players and, of course, importantly, food retail as well. The focus in terms of the growth there is very much on new segments, market expansion, including geographic and certainly new technology. And John Houghtby will take you through that business and give you some insight there. And then finally, our pest business, which I think has really demonstrated incredible agility, super historical performance, incredible agility through the pandemic and then through the reopening. And you'll see that as we move through the businesses. And our focus in terms of growth there, of course, is continuing to expand the market focus and importantly circle the customer. And you've heard circle the customer for many years at Ecolab. And we continue to drive that and really presents a great opportunity for us as our other businesses continue to grow. All of that we enable with digital and, of course, innovation as well. So Christophe and Darrell and his team talked about people health, planet health and business health. And for our business, it's no different, those are the drivers. You can see the Ecolab Science Certified and really protecting what matters most to our customers, which, of course, is their employees, their associates as well as their customers, driving that through the Ecolab Science Certified program. Planet health, and many of our customers, not unlike the Industrial business, are very much focused on ESG and driving sustainability particularly and reducing our impact with them and then, of course, importantly reducing their impact as well. And then last, but not least, of course, that adds up to the business health and the eROI that both Darrell and Christophe and all of the other individuals talked about earlier and really driving optimized outcomes. And if you remember, our historical kind of verbiage around this, it was best possible outcomes at the lowest total operating cost. And that's really the origins of the eROI that we continue to drive. So look, what you're going to hear from the team today is strong underlying business momentum. We've got very deep customer relationships, and we continue to build those during the pandemic and strengthen those frankly as we helped many of our customers through some incredibly difficult times. We've got some very targeted growth initiatives, and I think you're going to really like what we're talking about here today in terms of the bets that we're making and doubling down. And then last, but certainly not least is, as I said, we leverage digital, we leverage innovation to be accelerators for that growth. And I think the most important thing you're going to take away is what a great team we have here in Institutional and Specialty and across Ecolab in general. So with that, I'm going to introduce Greg Cook, who runs our Global Institutional business.

Well, thank you, Tim, and hello to everybody in the room, and hello to everybody online, so thrilled to be with you today. I lead our Institutional program. My name is Greg Cook. I've been with Ecolab a little over 24 years. I've had the unique opportunity to be in many functions across the company, multiple divisions in the company, spent time within every region. But really, the vast majority of my time has been working with and around the Institutional program here at Ecolab, so thrilled to be with you all today. We've created a great history. Christophe mentioned before, we're coming up on our 100th year anniversary. And this business, Institutional, was the start of all that. And we're thrilled about coming up on 100 years more so than the number. We're thrilled about the changes that we've driven in the market, the opportunities that we've created and how we've expanded within the markets and with our customers, which really has led us to serving over 800,000 locations around the world. We've been a huge part of helping our customers expand their locations as well to new geographies. And by doing so, we've expanded with them. So we're now in over 130-plus countries around the world. And we really do that by driving our core capabilities that are anchored around unique chemistry, unique dispensing, personalized service and then a data-driven insights that help us drive training but also value with our customers that we believe separates us within the segments we serve. And who do we serve? We started off in foodservice and lodging, and we've grown to long-term care and facilities. And we really anchor those markets primarily around the warewashing program, the laundry program, housekeeping and floor care, which gives us a strong anchor, which allows us to introduce programs and solutions that broadens out that offering to our customers and provides more value to our customer. And why is that important? Because our customers are all about delighting their guests. You've heard that before. And we're a huge part of allowing them to delight their guests so that their guests come back for repeat visits, which is really protecting their brand reputation. And we're a large part of that. And we do that again by cleaning and sanitizing, training and unique innovations along the way, all while providing optimized operational results for our customers. And we're really proud of the customers that we do serve. We cover a large number of the main players within the industries that really, like I mentioned before, have crossed the globe. And we've helped them do that, and they've pulled us along with them to provide that value. But what also it's really done is it's allowed us to grow within a geographical region, which allows us to grow within the segments within that market and then grow locally as well, which is great for our teams and great for the customers that we serve. And so it's created a $3 billion market leader position that we shared today. You can see we've started in North America. We're still largely anchored in North America. We look to expand and push more aggressively outside the North American markets, with roughly 20% coming from Europe, Middle East, Africa, almost a little shy of 10% in Asia Pacific and then the balance coming in Latin America. And you can see the segments we sell or service today, roughly 50% within foodservice, 25% within the lodging segment, 15% in facilities and 10% in long-term care. So I mentioned about the history we've had, specifically within institution. We've got a long history of delivering growth. And if you look at U.S. in particular over the last 20 years, we've got a solid path of delivering 5 -- roughly in the 5% to 6% growth range. And even during economic downturns, which I was personally involved in the Institutional program at those times, during 9/11 and the recession in 2008, 2009 and '10, is we had one common theme, which was take care of our teams, take care of our customers and then take care of our company and stay focused on the investments that are going to accelerate us into future growth. Now obviously, this economic crisis were a little different than the previous ones, right, being squarely focused on the restaurant segment, the lodging segments, but was not -- wasn't different was our approach. It was still take care of our people, take care of our customers and take care of our company while staying focused on investments that will drive future growth, not only in the next year but in the coming years to come. And we believe we're on path to doing that. And we expect to have rapid turnaround this year and solid growth going forward. Also, what was unique to prior events is this one really highlighted and pulled the value that we play within this environment we operate within. Over the last number of weeks and months, I've actually been to quite a few industry events and met with many of the large customers within our segments and many of the top executives that are leading those organizations. And the themes are pretty clear: it's we need you more than ever, we need what you do, but the unique part is we need how you do it. We need you at these times, which has elevated hygiene standards. That's not a secret to anybody. And how we do it is important. We obviously leverage digital to help drive those innovations for our customers, but also to drive leverage with our teams as well. And the other thing that has come out of those meetings with customers in the industry is that right now labor is of utmost importance. They're having a hard time finding labor. They need us to help them deliver on value to customer. They need to stay focused on bringing customers back into their locations and making sure that they have a great experience. We'll take care of the rest. That's where we come into play. And obviously, we're back into renewed focus on sustainability more so than ever, and Europe is leading the way, which is exactly why we're excited about the future. We believe we are on the right path for our ambition of 6% to 8% growth. And you look at the share we have today, the opportunity is significant at $28-plus billion market share. We are well positioned not only to take advantage of that opportunity within customers we currently service with more solutions, more opportunities and new programs, but obviously, a large number of list of customers to go after and gain. And how do we plan on doing that? What we're focused around, some key growth opportunities that I mentioned, we have continued to invest in and we stay focused on: breakthrough innovation; enhanced customer value; leveraging the digital ecosystem; and then fourth, geographic acceleration. I'm going to touch on each of these in a little more detail here. So the first, breakthrough innovation. We have always had the ability to generate innovation that helps our customers and total deliver cost of ownership to the locations. You can see here, there's a list of them ranging from Solid Power, which is solid technology and chemistry, which is safe, cost-effective; Aquanomics, which is centered around the lodging segment, to drive water energy and labor savings; Peroxide Multi Surface Cleaner; Sanitizing Wash 'N Walk around water and safety; and then the fourth one, listed there secondly, is Sink and Surface Sanitizer. And I kind of highlight that one for a specific reason. Here's an opportunity of game-changing chemistry that we develop that allows us to do 2 things at once: go after foodborne illness. It also takes multiple steps and combine them into one, which creates labor savings as well as creating operational efficiencies. So we do 2-in-1 cleaning. We've got the quickest kill time in the industry, which is important right now and always, while providing food contact safe environments. At the same time, we take that application and we drive solution growth through application, taking that chemistry and creating wipes, creating spray bottles, creating mop buckets or buckets, excuse me, and even the electrostatic. So we take 1 solution in 4 applications. And then we take those 4 applications, and we expand them into the segments we serve going into the platforms that I mentioned earlier on. So really, it's taking 1, making it 4 and taking those 4 and taking them to multiple segments to help our customers and to drive solution penetration. And you've heard about this a bit today already, but we've really been able to bundle all these programs together with the Ecolab Science Certified, which has been hugely received by our customers. They love the support of the industry, they love the differentiation that we provide and they love the guest assurance to get people back into their locations and come back multiple times again. It's that creating of clean. We uniquely do the checking of clean with our EcoSure program. We see clean in action, and then obviously, we want to give confidence to the locations, the employees and their guests with the Ecolab Science Certified. Also around innovation, you saw a couple of case studies earlier today. Here's another one with a global hospitality chain, where we took a whole host of innovations that we've rolled out, whether it be in the warewashing program, whether it be in the laundry program, whether it be in the housekeeping program. And we bundle them together into a total solution and a total program, which generates water savings, energy savings, waste, productivity and asset longevity, all delivering almost $10 million in savings to this one global hospitality chain, which is greater than 25% when it comes to customer realization of savings. So we're extremely excited about that and the programs we provide to our customers. The other area that I touched on was the digital ecosystem. During this time, many companies, including us, have been able to accelerate the utilization of digital. It's one of those investments we stay extremely focused on. And what it's done for us is to enhance our customer outcomes. It gives them greater insights to what's going on within their locations. It helps improve on customer performance and translating that. At the same time, our field has benefited from it from maximizing the impact of their visit on those calls. It's also allowed us to be more productive on routing of those calls and at the same time, responding to ESRs, extra service request, what a customer needs. And when they're making that visit, it allows them to identify opportunities in nearby areas to maximize their day, but also to take advantage of opportunities and provide help to customers in geographies that are close. And it really has helped transform our customer experience. Customers have more insights. We've done ease of doing business. We allow access to data and information and insights through our Ecolab Connect program and many other programs that we offer. So a huge area of focus and one we will continue to invest in going forward. And then I talked about geographic acceleration. I wanted to hit on 2 specific areas. One, obviously, China has been a great growth opportunity for us. It will continue to be a great growth opportunity. This is a great area. We've been able to leverage many of the global brands that we have to drive sales, drive penetration within existing customers. But then we leverage that and take it down into the regional level into the lodging chains, into the restaurant chains and then break it down into the local level as well on that. So it's been great growth. We've augmented, like I said, our global approach with a regional chain focus. We've invested in strong talent within that region and investments to act very quickly and very swiftly to take advantage of the opportunity. And we're excited about the legal -- the local leadership within those markets. The second is within Europe. Europe has been an area that we historically had been somewhat challenged by in driving sales growth and generating incremental profit. It's an area where I believe prepandemic, we were extremely focused on elevating the talent in the local market, taking it down to the local level with execution and accountability. We strengthened our distributor partners in all countries within Europe. And we've actually gone through a major effort of streamlining our product line, maximizing outcomes to customers and product to drive margin improvement. And prepandemic, we were very encouraged on the results that we started to see, which makes me convinced we're on the right path forward for that. And even as we exit 2021, we start to see momentum in Europe as well as they start to recover from the pandemic as well. So as I wrap it up, I'm thrilled to be back within the Institutional team. I love the Institutional energy. I love the Institutional focus. I like the competitiveness because we operate within a big market. We've got $25 billion plus opportunity, I mentioned, between existing customers and new customers. It is a solid model that has proven over time, and we've adopted that model to keep up with being aggressive. It's supported by long-term customer relationships. And it's really being pulled by challenges that the segment sees today. Again, it goes back to customers need us more than ever on what we do. They also need on how we do it. And we're excited about our long-term ambition. So I appreciate the time. And to that, I'd like to turn it over to my friend, John Houghtby.

Thank you, Greg. Good morning. My name is John Houghtby. I'm responsible for our Global Specialty business. I've been with Ecolab for just shy of 29 years. I started with the Pest Elimination business, served in a variety of roles, both in the U.S. and internationally. And for the last 6 years, I've been very blessed and honored to lead our global QSR business based in Greensboro, North Carolina, and now recently, our Specialty organization. And when you think of the Specialty business, to Tim's point, this is the fun group. The Specialty group is the fund group of the fun group, right? And it's really made up of global quick service and global food retail, 2 very strong businesses with a history of driving profitable growth and really taking market leadership position, doing one thing against these 2 very independent segments, and that's helping some of the world's largest, most valuable operators protect their brands and their customers as well as their profits. So it's a fantastic model by which we've been able to drive these businesses. And you can see, we've got a very strong track record of delivering growth year-over-year. And we feel that we're very well positioned from share growth, innovation, solution penetration into both of these segments that we can maintain that focus on our ambition to get back to our historical growth rates as we move forward in these 2 very strong organizations. One of the things that we're most proud about within Specialty are these strong customer relationships with the leading brands within our industries. These are relationships that have been developed and cultivated over decades, some going back as far as 30, 40 and 50 years of taking care of these customers and their safety programs. We are so integral to their operations that we understand the nuances of the way that they work, all the way down to the in-store experience. And we come together with them to develop programs that help drive a cleaner, safer and more efficient operation at that in-unit experience for their customers as well as their employees. And one of the opportunities that, that provides us working with these global brands is that as they extend their programs internationally and grow, we have the opportunity to continue to drive growth as we develop those programs and help make sure that they have a consistent delivery of a safe environment for their operations, no matter where it resides, whether it's in the U.S. or anywhere else internationally. Now this is a fast-paced, very dynamic industry between QSR and food retail. They're constantly understanding the various trends and dynamics coming at them and reimaging their brand, their model, how they go to the marketplace. And as we look at the current time period, there are many different challenges that they're faced with. What we hear from our operators is that really labor, sustainability and convenience are some of the key trends that they're having to address and alter their models to be more nimble, more agile to take care of their customers. Clearly, labor is a challenge within these industries. Collectively, we're going to -- they're going to employ more than a million -- millions of associates across the world. So labor cost and here, most recently, the shortage of labor creates a challenge. We also know that sustainability is a growing concern within these market segments, whether it's their own desires to drive a more sustainable offering, consumer pressure, looking to work with providers that have a more sustainable offering, but also regulatory pressures. So they're looking for help of how they can drive a more sustainable offering. And then what's become a far more aggressive, accelerating trend within our industries is around convenience to reach the end consumer. It was something that started well before the pandemic. We saw a lot of investment in digital, online ordering, moving towards more drive-thru, curbside pickup. But during the pandemic, you saw a huge acceleration of this trend, moving a tremendous amount of opportunity and investment in reaching the consumers in what we call one of the 3 Ds of convenience. It's the digital ordering, the drive-thru and the delivery. That's both impact of the QSR organization as well as in food retail, online grocery orders and curbside pickup at the grocery stores. It's a growing trend. These are areas that our customers are looking to us to continue to help them. We feel very well positioned to drive these opportunities with our innovation. We know that labor is a challenge. We have innovation around automation, simplification that allows them to more optimize the use of that labor within their operations. We know that we've got sustainable solutions, less waste. We can save water, energy and plastic waste within our innovation around unit dose solids, super concentrates. And we know that we have the ability to help them as they have to extend their cleaning protocols from the inside to the out with some of these different approaches to reaching the customers. Now as we look at some of the growth opportunities within Specialty, as with all of our businesses, we've got great share gain opportunities, both QSR and food retail, both here in the U.S. and around the globe. It is something that we have opportunity to pick up new customers, drive share gain within some of our existing customer relationships. We also have the ability to leverage some of those historical strengths of Ecolab around warewash, automatic warewash. It is interesting that particularly in North America, many of our QSR and food retail customers still manually wash the wares that they use to prepare food. It's a great opportunity for us to help them reduce their labor, get a better solution and drive growth opportunity for us. We also know from a digital standpoint, we've done a lot of work in creating new digital food safety platforms across both of our Specialty organizations, really driving a better food safety compliance program for our operations with our customers and helping them leverage their resources within those stores more efficiently. So we're able to digitize the food safety aspects, the task related to delivery and food safety management, bringing together comprehensive remote monitoring capability to bring in some of those other compliance and operational components and bringing that together to provide information and insights to whether the chain or the franchise leader, but more importantly, combining that with our in-store service support and training to help the actual operators on-site take action before they have a potential foodborne or food safety issue. As we look at other ways of driving growth, we indicated that one of the special parts about our business are those customer relationships with those leading brands and how we drive what's important to them. Whereas we look at our innovation pipeline, just a couple of examples of where we are focused on what matters most to our customers, we look at water within the QSR space. Most of the QSR operators, it's not a mystery that a significant portion of their revenue and profit comes from what we call dispensed water solutions: water, coffee, tea and soda. It's a significant revenue and profit driver and very important for us to leverage our Nalco water expertise on quality management, bringing digital solutions to help our customers ensure the integrity of the water that goes into that valuable part of their product offering to their consumers. On the food retail side, we're very excited about some of our produce wash technology that we're launching into the marketplace and getting great success. Great product helps drive, again, 5-log reduction against pathogens such as E. coli, Salmonella. But an additional benefit is that due to the fact that you're using this chemistry in the water -- in the wet base of the grocery stores, you're getting a reduction in biofilm, slime buildup, and our customers are seeing a reduction in labor to actually clean those wet bays within the produce sections. Not only do we help on the produce section, but we see some real exciting opportunities to extend this technology into other areas of the fresh sections of our food retailers, which is where they drive their differentiation and their profitability. So all in, looking at from a Specialty standpoint, we still see very strong growth outlook for the Specialty businesses. We are going to continue to leverage those strong market-leading customer relationships that underpins the foundation of our innovation and allows us to drive far better solutions that meet the needs of our customers and the growing market dynamics that they have. So thank you for your time. And now I'll turn it over to Nic Granucci and Pest Elimination.

Thank you, John. Good morning, everybody. My name is Nicolas Granucci. Happy to be here with you and talk about our Pest Elimination business. I've been with Ecolab for 19 years, starting with the food retail business, worked in QSR, worked in Institutional, in North America, in Europe and most recently in China. So now very excited to share the Pest Elimination story. It's a growth business. It's a resilient business. It's a global leader in a big opportunity, about $14 billion of market opportunity and growing. We provide a critical service, we provide on-site service, consultation and training to make sure that our customers are pest-free. What does that mean? When you are in a restaurant, when you're in a hotel, when you consume packaged foods, all of these facilities pests want to get in, and it's our job to keep them out. So it's a critical service to our customers that we succeed so that they can succeed and protect the brand. You see the track record there. It's a growth business, resilient even in the downturn of some of our end markets. Team have been able to continue to grow. And the macro trends are favoring our position of a premium pest service. We talked about the consumer awareness on health and safety. And of course, pests are a contributor to illness and foodborne illness as well. So that is additional tailwind for us, right? Gets experience on social media, right? I mean what could be worth that somebody posts in social media that a particular brand has a pest activity. Regulatory hurdles continue to get higher and higher, and we are driving those, and we're complying with those like nobody else. And finally, the environmental impact and the animal welfare, those are things that are hard to achieve, and we are very strong at it. In addition, it's a big fragmented market. We are one of the market leaders. We only have 6% market share. We've been growing, taking share, and we have a very large team that is very proficient at doing this. It's a great fit with the rest of Ecolab. Every single one of our other divisions, they have this need, and we complement each other, right? Whether it be in food manufacturing, in lodging, in restaurants and in supermarkets and in QSR, pest elimination is essential to helping them delight their guests, protect their reputation and optimize their operations. Why are we different? It's not about pest control. We drive pest elimination. Really, the tolerance for any pest activity in any of these brands, in any of these customers is 0, and we really work hard at achieving that. How do we do it? With unique innovation, with the unique training that we provide to both our specialists and our customers and with the highly segmented and specialized protocol services to achieve that pest-free environment outcome. And how we differentiate and how we do this different than anybody else is, of course, our people. This is a service-oriented business, right? We go there. We take care of the problem. We are the only competitor that is 100% commercially focused, right? We don't do any of the consumer side. And we segment the programs. It's not the same the program that goes into a supermarket, that goes into a restaurant, that goes into the food manufacturing plant. Some of the platforms are similar, but we really define these protocols and programs to work with our -- the environment of our customers. All of our training, all of our protocols are science-based. And we have one of the best associate retention ratios in the industry, which is a high turnover industry in general. We also do this with innovation. We have a large team of RD&E, entomologists that really study the behavior of pests and how to disrupt that and how to make sure we keep them out or we take them out if they already got in. And we have a number of award-winning innovations. I'll share just a couple of them. There is such a thing as a [ better ] mousetrap. So if you are -- in many places where you may have activity of rodents, sometimes you don't see them on the ground floor, they may be up here. In many commercial buildings, there's these drop ceilings and who checks on that, and it's kind of disruptive to the operations. So our team designed a mouse activity monitoring or trap that can be installed very efficiently, that is 3x more effective than not having it and that can be serviced in an efficient way and without disrupting our customers' operations. And then how can we use the data, not only from our service from our connected equipment and from the rest of the Ecolab divisions to really inform our service in a better way, so we can be predictive, so we can be proactive, so that we really stay one step ahead of nature, really, that is trying to get into that building and we beat it, both to help our customers with data so that they know what to do but also to inform our service specialists on how to do the job in the most proactive and efficient way. Another way that we're expanding our growth opportunities is expanding the reach, right? I talk about segmentation. A few years ago, we invested in a new capability of fumigation. And that allows us to really help our food manufacturing customers protect their food all across the supply chain, from the vessels or some of the food or the fruit or the grains come in, to the silos where store product pest can grow, to the plant itself where we've been really strong in the past, to the logistics downstream and into storage. We can really provide them an end-to-end solution to make sure that they are pest-free all throughout, and the food is safe and they don't have any downtime or have to throw away any of that food. Like we shared before, as the rest of our businesses keep growing, our opportunity also keeps growing because there's more opportunity for circle the customer, circle the globe. As our customers grow, our [ Delta ] divisions grow. We have a great opportunity with these customers. Pest is an essential part of Ecolab Science Certified. Of course, it's a great way to keep those establishments safe. If in addition to all the great cleaning and sanitation and food safety programs, we also have a pest-free environment. So the opportunity continues to grow in all these segments. In summary, it's a strong business in a large opportunity that we're chasing. We are seeing an acceleration of that growth. We are an industry-leading provider that is based on science, innovation and a great service. Training and retention of service specialist is how we achieve that. And we always keep looking at market expansions and get into new segments or new technologies like the Food & Beverage that I just talked about, while we continue to leverage the great relationships that we have with all of our Ecolab divisions. I think that with that, thank you for your attention, and we'll move to our Q&A for the group.

Good. Thank you, Nicolas. We're going to open it up for questions now. [Operator Instructions]

Wayne Pinsent with Gabelli Funds. Just wanted to get your thoughts on how -- in the past 18 months, how conversations with new customers have changed and winning new customers. And then also with the Ecolab Science Certified with existing customers and new customers, but with your existing customer base, obviously, a great launch in this environment. How many of your customers have onboarded that? And how does that change the economics with your customers if they're fully Ecolab Certified.

Yes. And Christophe had some numbers earlier. So just to start with that, which is the last part of your question, we've got over 30,000 unit sites, right, 150 chains, right, an incremental $50 million worth of business, right, that we've added. And some of that has been new customers, to your point, right? But a number of that -- and quite a bit of that has been broadening the program, driving more solution penetration, more of a holistic program with our existing customers as we built the rigor around the Ecolab Science Certified because it's not just the products, right? It's the process it's the training, it's the auditing, right, and it's the whole thing. So that's how we've driven that, and it's been both with existing and new customers. And then in terms of the conversations with customers, I would say this. And I think Greg hit on it when he was talking earlier. We found that customers -- our relationships deepened with customers. They were under tremendous pressure and tremendous duress, and they needed us more than ever. And I think we were able to demonstrate not only kind of our historical value, but really take it to another level, and so both existing customers and new customers. We took a lot of new business because, frankly, our competitors were struggling to meet the new demands, let's say, and that allowed us to really drive unit share gain as well as solution penetration.

Edwin Rodriguez, Jefferies. This is for Greg. I mean you had a chart in there, Greg, that shows the historical sales growth. So if we exclude 2020 and 2021, the growth has been about like 2% to 3%, but the ambition is to get to 6% to 8%. Like how do you get there? Is it going to be like market share gain? Is it going to be the growing of the market? Like how do you get to 6% to 8% from 2% to 3%?

Yes. I think to the one chart, if you look at over a long period of time, it tends to be around that 5% growth in the middle single-digit range when you look at a long period of time, which accounts for some challenging times, which we rapidly recovered from. I think to your question, exactly, we look at competitive gains as being a clear path to getting into that 6% to 8% ambition. But I think you also look at that other piece, which is penetration within our existing customers. We're encouraged to see that recovering and getting back to pre-COVID levels, which is adding more accounts, adding more solutions is really going to be the key leveraging innovation and digital into the future, not just 2022 but 2025 and 2030, et cetera, on that.

David Begleiter, Deutsche Bank. Tim and Greg, how did you go about maintaining the sales force last year or even this year, low level of activity and compensation?

Yes, that's a great question, Dave. So what Greg talked about earlier, we focused on maintaining and keeping our associates, our customers happy, right, and served and then obviously, making sure that we were performing from a company standpoint. Our first kind of point of contact was our service and sales organization because we don't keep them, we don't keep them in the right place and keep them happy. Obviously, the other -- the rest of that -- the equation doesn't work, right? And so we help them in terms of compensation. Obviously, a lot of them are on variable compensation. So we help them in terms of compensation. We worked really hard on maintaining the focus for the organization. we did a lot of excess training. We worked on remote training, i.e., how to deal with customers remotely, both in terms of service and in terms of selling. And in fact, I would say we were really pleasantly surprised that our ability to turn on a dime and sell remotely, and we continue to drive what we call our go to win or our net new business quite significantly. Greg, I don't know if you have anything?

I think you answered it perfectly. We took the question out of their minds initially of how am I going to pay my bills next month with [ Paper Tech ], which was the right thing to do. And it was -- it would provide a huge value to our teams. It also provided them some time to put a game plan going forward, like Tim said, a rapid recovery, things that they need to get on plan to do it a little differently and focus on the customer maybe in a way that they hadn't had time to do before. So let's take advantage of what you've got some time to do and don't be worried. So it's looking into the future. So I think Tim answered it perfectly.

And I think the other thing is just the -- and Greg talked about the introduction of some of the new innovation, 15 second time kill on COVID with sanitizer -- surface sanitizer as well as the Ecolab Science Certified. I think that brought some energy to what you got to do, right? So in addition to sort of immediately saying, okay, we'll protect you, we'll help you in terms of the bills. Okay, now here's some excitement, too.

Vincent Andrews from Morgan Stanley. Just trying to understand the integration between Pest and Specialty and Institutional in terms of what your penetration level is amongst the Specialty and Institutional clients from Pest? And then how does that work? If I'm a Specialty and Institutional client and I want to work with Pest, do I have to have a separate relationship within Pest? Or is it something that can be bundled with my existing product suite and with my existing Ecolab relationship? Or sort of what is the thought process behind the strategy that you have set up with the sort of separate silo for Pest versus there's clearly a lot of overlap with the other 2 segments?

Yes. I first start off by saying that the easy and short answer is all of the above, okay? But the reality is we -- the way we approach each segment, we have lead corporate account organization that is the primary contact to the customer. But the service delivery, the delivery at the unit level, right, where we provide that value on a very granular basis, that all has to be done separately because there's very clear capabilities, delivery issues, et cetera, that are very different between the businesses, right? So that's critically important. And the more that we invest in digital, the more we're able to integrate all of those services in a much more robust way to give insights to the customer, et cetera. So hopefully, that answers the question. I don't know if anybody has anything to add?

I guess maybe just a follow-up to that, why would -- just as a follow-up to that. So why would the penetration in Pest be less robust than the penetration in the other segments if that's actually the case? And then how do you accelerate the penetration in Pest so that you're getting where you have Institutional or Specialty customers that become Pest customers. What's sort of the barrier that prevents that from being equal across the 3 segments?

Yes. I mean there's granular barriers. It's different folks that are involved or whatever. But when we do what we do well, which is get with the customer and talk about outcomes, which is talk about eROI, which you've heard throughout every single business today, right? The barrier, frankly, goes down, right? And this becomes about how we drive outcomes. And more importantly, going forward, the work we're doing around -- and you heard this from the Industrial group, we've been out in front on this, but we have been all over it as well in the last number of years. Predictive analytics, machine learning, AI, et cetera, is really giving us some incredible insights that more service points that an Institutional or Specialty customer works with us, including Pest, including our EcoSure auditing business, including our training business, et cetera, the more points that they work with us, the higher likelihood of success they have in terms of things like health scores, et cetera, et cetra.

Andy Wittmann from Baird. I guess this question is for Tim or Greg. The question is kind of 2 parts, I guess. Your business is obviously the one that's had the biggest COVID impact. I was wondering if you could talk about the positive and negative implications from the delta variant in the last couple of months? As well as the fact, if you could talk about some of the pricing trends in your business, given your overall customer health there. Obviously, there's a huge need for pricing. You guys have talked about 3% exiting the year beyond that. But specific to Institutional, can you just talk about how the pricing discussions are going there?

Yes. I'll start it and then we can see what I -- Greg might cover that I missed. Look, I think Delta variant, we certainly see some impact. But it has not been, I would say, significant so far. Obviously, it's something we're going to have to watch. I would say, in the U.S., the reopening continues to go very nicely. We believe we're positioned really well. Our team is really excited about what we're doing in terms of unit growth and solution penetration that I talked about that we did last year and, of course, continuing through this year. So I think right now, that's a watch for us, but not a huge issue in terms of the United States. In terms of Europe, also sort of a little slower to get going in terms of the recovery, but very steady. And we do not see them pulling back draconian measures in terms of Delta or other, right? And the other thing I would say is what we are seeing in all of the surveys that we're doing and the data that we're seeing is customers are becoming more comfortable and saying, "Look, I want to get back out, and I'm willing to wear a mask." So I think that's a helpful, helpful part of the trend as well. Greg, anything?

Yes. I would add by your last comment there is I think we're seeing a resilience of people want to get back to a level of normalcy and are willing to do things to continue that. I think the other part to your pricing question, I mean, when you're providing value and I think someone said it earlier, when there is a pull, there's a recognition of what the value is and how we do it, it makes those conversations a lot easier to have. I would say we've got a pretty good pricing muscle within North America that we've continued to strengthen around the rest of the world. But when you've got those factors in your favor, it makes those conversations a lot easier to have. And our teams are pretty confident because they know the value they're providing. And it's actually a different conversation as well. It's not just about price.

Thank you very much for your attention and for the questions. And for those that are here physically in attendance, we look forward to having some conversation with you at the trade show and Q&A. And I'd like to introduce Beth Simermeyer, who is Executive Vice President and President of our Global Healthcare and Life Sciences business.

Okay. Good morning, everyone. I am thrilled to be here today. So I have been at Ecolab for 8 years. Before that, I was at a couple of other companies, leading big global businesses for them. I started as the CMO of the company. And then after that, I launched the Life Sciences business, and that was really exciting and fun. Hayley will have the opportunity to talk to you about Life Sciences. Right now, I'm the President of Global Healthcare and Life Sciences and a few other cross-divisional opportunities. And today, I'm focused on the health care business. Our GM of health care is based in Europe, and he is not able to be here today. So I will be talking to you about health care, which is also a really exciting business. So what I want to talk to you today about is -- it is a $20 billion growth market. It is a really big business. And we are able to address challenges that Ecolab can uniquely solve. We have a leading position in Europe and North America. And there are favorable trends that are really giving us tailwinds, okay? So if you think about it, not only aging population, but unfortunately, we have a sicker population post-COVID, right, whether it's long-haul symptoms or whether it's people who deferred medical care during the pandemic. We also have really increased awareness of the risk of infection, staff shortages. Before the pandemic, there were staff shortages. And now because of burnout and stress, there's even more staff shortages. And then there's advances in medical technology, particularly assisted surgeries, robotic-assisted surgeries. So there is so much changing in this field, and it was accelerated by COVID. So really, a perfect time to come in with innovation in this field. We feel really well poised for this. The pandemic created a turning point for us proving our plan is working. I'm going to show you that. And our growth strategies are already getting real traction. So we have proof points to say we're on the right track. And the portfolio is continuing to grow in our favor. So what I hope you leave here with today is saying, maybe healthcare hasn't been a great growth business in the past, but we see it as one for Ecolab in the future, okay? Just in brief, it's a $20 billion market. We have a 5% share. We're very concentrated in North America and Europe. That is intentional. That's where we see the real big market opportunity for a lot of our innovative solutions. So we do have several different customer groups, but the really big one is acute care hospitals. They have the biggest group of services and departments. And like what many of my colleagues have talked about, we provide chemistry, digital solutions and analytics to give the best outcomes at the lowest total cost and the highest return. So very -- the Ecolab model does work perfectly in healthcare. Now if you look at the segments that we serve, you can see hand care and surface care, and those were the ones that got the real bump in the beginning of the pandemic. So particularly, a lot of governments we're buying. They were stockpiling. So we got a nice bump in hand care in the beginning of the pandemic. The other segments are really procedure-based, and so they had a bit of a hit. They had a challenge during the pandemic. But we see them as a really important opportunity for the rest of the pandemic. I mean short-term challenged, but midterm, very important. And across all of these segments, we're trying to decrease infection and increase performance and efficiency. So that's the big program that we have going on. So this is what our -- the COVID as a turning point. So if you look at the last few years, our sales have been low single digits. And I know that's not what the company was hoping for, and that's probably not what you were hoping for from health care. When we look at what we've done during COVID, it's been mid-single digits. And that's adjusted for, as I said, we had some really big Hand Care sales in the beginning of COVID to government. So we adjust it and say, our results were mid-single digits. But post-COVID, we are very confident in getting to that 6% to 8% range. And I'll show you why we're confident in that. I just want to talk a little bit more about the trends that are shifting. So there's obviously infection risk, which there's much more awareness around that. It's always been a big issue for patients and concern about patient risk. But now there's also staff risk. So if you think about what was going on during the pandemic and the concern about risk to staff, that was really critical. Also super bug development and concerns around that. And then staff shortages, so there was a staff shortage before going into the pandemic. And then with burnout and the stress, there is an acute staff shortage going on in hospitals. So anything that helps save labor is really critical. And then surgery automation with like robotic-assisted surgery is really on the upswing. So when we put all of this together and look at these trends shifting in our favor, we have 3 high-performance programs that we're so excited about, comprehensive surface disinfection, instrument reprocessing and then protective barriers for surgical robotics. Now this is illustrative, but it shows how we're shifting to our high-performance program. So in blue, what you see are foundational segments. They're the lower growth segments, but they play a really important role in our portfolio. So that might be things like hand care, surgical curtains, but they are things that our customers expect from us for a complete portfolio. We also don't want competition in their selling, right? We don't want to give them a foothold. So we want those in the portfolio, but we want to decrease our -- the percent of the portfolio. So you can see what pre-COVID looked like and how we've been shifting the portfolio to these higher-growth segments. And post-COVID, we expect it to be the majority of the portfolio to be in these higher-growth segments. So that's what we're looking at. And the high-performance programs I want to talk to you about today are driving leadership in these comprehensive surface disinfection programs in the operating room and patient room through high and quick kill rates, very important. Second is the comprehensive offering for instrument processing for best safety and performance. And then third, infection prevention for surgical and diagnostic equipment. And I'll explain what all of that is. At the same time, we are leveraging and transforming more mature segments, right? So we always want to look at how we can improve them, increase their growth rate. But today, I think it's most important to talk to you about these high-performance segments. So first, let's talk about this. So there's a surge in demand for ready-to-use solutions, things -- mainly wipes, okay? So when there's a staff shortage, we really want to make sure that we're giving them the fastest, easy-to-use solutions. And so we have new breakthrough portfolio of rapid disinfection wipes. There's no faster kill products out on the market today. Fast pathogen kill is really the program that we need. We've actually invested in surge manufacturing capacity, which is now available, which is really important. And then we have digitally enabled training, tracking and insights for quantifiable improvements in operating and patient rooms. We expect this program to grow 10% a year. And I want to give you an example of how that works. So we partnered with a large healthcare system to reduce healthcare-associated infections. I think you've all heard about HAIs. And we implemented this program, which included advanced chemistry, realtime analytical data and insights, training and consultation services and standardized protocols and auditing tools. And what it did was it reduced their HAIs by 50%. Now analysis shows that every time you reduce an HAI case, it saves the hospital $34,000. So it is real money to the hospital, which operates on pretty thin margins anyway. So we were able to reduce the cases 50%. We were also able to save 9 minutes in patient room turnover, which doesn't sound like a lot, but it actually ladders up to 3,000 hours of labor saved in patient room turnover per year. So $750,000 in annual efficiency savings, which is really big for that particular hospital. Now the second area I'd like to talk to you about is in central sterile. So you've probably all been in hospitals or visited hospitals but not really thought about the equipment that a surgeon uses, how does it get really clean and sterile, right? So there's a central sterile department where they take all the equipment the surgeon uses, all the scopes and they wash it first manually and then in machines that are sort of large washing machines. And that is the single biggest opportunity for infection prevention in the whole hospital. So what we've come out with this a range of innovative solutions. So for manual cleaning, something that cleans far superior to our competition. For the machines, machines that have the fastest reprocessing time. And also, it's a regulatory requirement on scopes that they track and trace exactly what happens on each scope during the cleaning process, and it's all been done manually. So we've come up with digital solutions for that. So really revolutionizing that whole process. And we expect this program to have 9% growth per year. Very exciting. And then finally, surgical and diagnostic automation. So this is robotic arms basically for surgery. And what this is, is they really require custom partnerships to develop drapes to put on those. So if you think about this hospital buys one of these, they have to figure out how to keep it sterile during the surgery, but it's complicated because they've got complement -- they've got complex geometries. They have to be able to be put on and off, these drapes, quickly because the last thing you can do is take time in the OR where they make all their money. Has to stay sterile. Has to be easy for the surgeon to be operating and not get in the way. So what we've done is invest in an advanced design center that's a few miles from here where we can codevelop with the equipment manufacturer, come up with these custom drapes. And whenever a hospital buys one of these pieces of equipment, they're guaranteed to buy our drapes. So this is a great program. We have rapid prototyping, a clean room manufacturing operation, and we think this will grow 12% per year. So we're growing along with the robotic-assisted surgeries. So a very exciting program here. And so sort of in conclusion on healthcare, we have leading positions in U.S. and Europe. The trends are changing. Healthcare is really changing a lot, accelerated by COVID. And we see our innovation is really playing into these accelerated trends, unlocking the long-term growth and taking us from mid-single digits to the 6% to 8% per COVID and feeling really confident in it. So I'd love to talk more, but I see 0 on my time here. So I'm going to turn it over to Hayley then to talk about Life Sciences, and then we'll be back for Q&A. So Hayley, come on up.

Good morning, everybody. My name is Hayley Crowe, and I'm the VP and GM of the Global Life Sciences business. I've been here for about 3 years. However, I spent my entire career in the life sciences space working for companies such as Pfizer, Novartis and PerkinElmer. I'm really excited to talk to you today about the growth we've had in the business thus far, the market trends that are favorable for us as well as our ability to take advantage of the opportunity. So first, I'd like to talk to you about our business. Who do we serve? We serve both pharmaceutical customers who make things that you're pretty familiar with, like tablets, pills, COVID vaccine, and biological drugs like cancer therapies. We also serve the personal care market who produce products like toothpaste and cosmetics, mascara, things of that nature. The way that we partner with these customers is through our global cleaning expertise for both their production equipment as well as their environmental quality control. And what that delivers back to our customers in terms and value is that they have safe compliant drugs with the regulatory bodies like the FDA as well as we help them with operational efficiency in relation to their cleaning programs. So let's talk about the growth of the business. We had a pretty good last 5 years. We've had double-digit growth, around 14% CAGR. And you can see that we certainly had some COVID opportunities in 2020. However, we do believe and know that there is double-digit growth underlying here. Additionally, we continue with the ambition. And I'll talk to you about some of those market trends in a minute. And also our strategy is to continue the momentum. We also have a big opportunity. So we're just 4% market share and a $7 billion business. And so there's a lot of room to continue the growth. So if we move on to the market trends, they're favorable. First, it's a fast growth market. The subsegments within this market are growing anywhere from 5% to 14%. And we have a global harmonized cleaning program to work with our customers directly. Second, there is a rapid growth in the biologics space. And so you've had experience with this with a COVID-19 vaccine, but there's also things like cancer therapies and arthritis therapies. And it's to be 40% of the global drug market by 2024, replacing those tablets. We are the pharmaceutical cleaning partner of choice for that environmental cleaning space, and I'll talk to you about that in a little bit. Third, there is a massive increase on expectations to get drug to market fast. And the pharmaceutical customers certainly demonstrated that as they were able to get the COVID vaccine to the market in record time. So now there's an expectation to continue that. By leveraging our acquisition of Bioquell and the technology there, we're able to help get them up and running fast and help them scale their business. And then the last big market trend is to push into digital innovation. Pharma has been a little bit slow to adopt. They're very risk adverse. However, there is a big trend moving into digitization of manufacturing as well as their quality management systems. And we launched this year our virtual site survey program where we're able to deliver the same services without physically entering the plant. So then if we take a look at our growth strategy and our growth priorities to continue the momentum. The first is that we're going to continue to leverage our great pharmaceutical innovation. And so I'll talk you through an example of that and what that delivers back to our customers in a moment. The second is that we want to take the opportunity in the biopharma space to increase our footprint there. Like I mentioned, it's rapidly growing, and our Bioquell technology enables them to get up and running fast. And then the last one is that we'd like to leverage our European partnerships to continue expanding in North America, China and India. And across those 4 markets, that takes up 80% of the global pharmaceutical market today. So let's talk about one of our great pharmaceutical innovations. We recently launched a chemistry program that is a low residue program. It has 96% less residue than the leading competitor. And so why do residues matter? They harbor microorganisms and you have to spend time cleaning to get rid of them. So less residue, equals less time cleaning, equals more productivity back to our customers. So in this example on just one plant, we converted them from our -- from competitive chemistry into our low residue program and save them 22 days of production time and over $500,000 of labor savings and productivity. And so I'll give you an example when you start to take this across multiple plants and what that might look like in terms of value delivered to our customer. So moving into gaining footprint in the biopharma space. This is a rapidly growing space, a lot of innovation, a lot of scale-up happening and getting to commercialization of those drugs. Our Bioquell technology has mobile equipment that's able to scale up with our customers, and we can implement it in just a couple of months to get them up and running compared to historical equipment that may have taken 6 months to 8 months to get installation, and it's permanently fixed. The second bit to this is that they need to have continual decontamination of the space. So when you get a bioburden in the space, they may have to shut down for a week and upwards up to a month, which means they can't produce life-saving drugs. And so on the example on the right, we've worked with a cell and gene therapy company who's scaling up and they cannot afford to be down. One week of downtime equals $1 million of scrap -- of potential scrap product and a loss in productivity. So this is just one example of how our decontamination services with the Bioquell equipment helps them keep running. So the third priority is around expanding into China, India and North America. Historically, we've been using our expert services, getting into the plants. We travel in, we do these site assessments with our experts in person, may take 2 days to 5 days depending on the size. And now we've launched our virtual site survey program. So with the pandemic upon us, most of our customers don't want extra people in their plants for risk purposes. And so we've been able to actually get into their plants using things like Microsoft Remote Assist and as well as the HoloLens. And so in this example, we had a tablet manufacturer that were having a cleaning issue, using a competitive product and they called us and asked for help. We were able to get right into their plant just a matter of hours using Remote Assist, take a look at the issue, recommend a program, get the chemistry shipped out to them and get them back up and running in just a couple of days. This saved them a ton of time and productivity as well as continues with that safe, compliant drug. So if we pull it all together, the way we deliver value to our customers is really by utilizing all of this in our total plant solution. We take our expert team, and we help our customers with anything from cleaning programs to understanding regulatory bodies and how they need to have their cleaning programs, be compliant. We help the training of their team as well as technical lab support. And so the example on the right is a major pharmaceutical customer. We started with just one plant. They had 2 main goals. They needed to be compliant because they had an FDA warning letter, and they also needed operational efficiency so they could produce more drug. We did a site survey at that one plant. We implemented our low residue program, and then they took that and copied and pasted across 26 plants. And so what we delivered was $14 million in productivity savings in terms of labor, validation services to help them with that transition over to our cleaning program, which oftentimes can take over a year as well as help them get ready for their next audit. And so total value delivered here was over $16 million to just 1 customer. So with that, in closing, we have a high-performing high-profit business here. It's been growing double digits over the last 5 years. We continue to have those ambitions. We've got favorable market trends coming behind us. We've got a nice footprint starting in the biopharma market, which I mentioned is rapidly growing, and we'll continue to expand there. And we're utilizing and are uniquely positioned with our innovation that's very specific to the space as well as our global on-site expertise. So with that, we'll move to questions, and I'll invite Beth up here.

So we'd love to take your questions. Wow, here we go.

John Roberts, UBS. In the Healthcare segment, how important are the buying groups or the healthcare industry to purchasing? Are you largely outside that because you've got more innovative stuff that they don't have codes for and need competitive bids? Or are you largely inside that?

Well, they are important, for sure. Particularly, if you think back to the pie chart where I showed the green and blue. A lot of -- on the foundational programs, they're very critical. But on more of the innovative programs, like if you think about those drapes for the robotic assisted, if we're scoped in when they buy the equipment, the buying group doesn't have a role there, right? So we're intentionally looking for innovation that would not go to a buying group. So -- but I would have to say they still play an important role, and we respect that, but innovation helps a lot.

John McNulty, BMO. So a question on the HAI side. It's been an important area for a long time, and it never seemed to quite reach that tipping point. And it sounds like you're confident that we're there now, like where the hospitals are going to care more about it. Is it more about regulation? Has something changed there? Is it more about the labor savings where they're just so constrained? Like what's driving us to that tipping point that realistically seemed like it should have been there a long time ago?

Yes. I think it's the cost. I think there's been a lot of work to quantify the cost to the industry of -- because of what they don't get reimbursed for. And so it's a bottom line issue for them now. It should have always been a human cost kind of thing, but also now the cost of what they don't get reimbursed for is driving a lot of the discussion about it [ -- from it ].

Are you seeing it as a pull for the most part from the customers? Or is it still very much a push from your end? I guess how would you characterize it?

I'd say it's both. I mean I'd say it's a receptive audience when we go in and make a case.

Aaron Wasserman from Third Period Capital. A question for Beth on the sterile program. My understanding is the competitors, they are pretty strong and very well entrenched in the hospitals. Can you talk about competitive displacement or new greenfield opportunities? Which is going to be the biggest factor in driving that double-digit growth?

Yes. It is a competitive -- it is difficult competitively. And so we are trying to come up with better programs, both with better claims. There's ways to have innovation where you have better material compatibility, better claims on different bugs, better -- faster kill claims. So if you actually look at some wipes, it's not practical. You have to have the surface be wet for a long period of time, which doesn't happen. So we're always looking at the best possible claims, the right usage, et cetera. But it is -- most places will be using something. So it's not really white field as much as having a better product that's going to meet their usage requirements better.

John Roberts again. The -- early in the pandemic, they were using Bioquell, I think, to resanitize face masks when there was a shortage of masks. Then they started using Bioquell for ambulances, I think, to decontaminate. So Bioquell got a bigger addressable market here. I don't know if you're doing more innovation to try to -- those are things I think you probably never thought of before the pandemic. I don't know, maybe even on the industrial side, there might be other opportunities, not just in health care.

It's a really good point. And yes, we started to see some interesting uses that have definitely expanded. So EMS space continues to be an opportunity. The health care space continues to be an opportunity. And recently, we launched a partnership with a clean health care service provider publicly, and we'll continue to look at those. In the future, we anticipate potential in other areas.

And I would just add that the timing of Bioquell was incredibly good. Sometimes you're good, sometimes you're lucky. I think it was both in that case, maybe. But the masks was an emergency use authorization. We were really happy to be able to help in that case. That's finished, given the shortage. But there's a lot of additional opportunities that Hayley and the team are looking at, and we think we can expand it really significantly. Yes, good programs in place. Yes. I guess you need a microphone so others can hear. There's Nate.

I was wondering if you could discuss the opportunity in selling to CDMOs. How big is that market currently? And what do you see as the opportunity for growth there as that industry continues to expand?

Yes. So CDMOs are lumped into our pharma opportunity. See, up there, and we work with many of them today, the major ones. We do believe that, that will continue to expand. So there is a trend of -- as these rapid scale-ups in biopharma continue, especially on the smaller customers. So they go to commercialization, they're going to need to use CDMOs. So yes, we work with them. It's the same program. They certainly need help with expert services and cleaning just the way larger customers do.

We've got a question online from Gary Bisbee of BofA Securities. "What's different today that will allow health care to achieve your growth targets?"

Gary, thank you for the question. So I think that -- 2 things. One is health care is really in -- having some extreme challenges that they hadn't had before. And two, I think we've really shifted our focus in innovation and some unique areas that we see growing faster than normal that -- like the robotic-assisted surgery, like really new, differentiated solutions to help them be more effective and faster, more efficient in the central sterile, which is their #1 infection prevention need. So trying to shift out of some of the more -- the less differentiated places like hand care and surgical curtains and into these more differentiated, difference-making segments that we talked about, I think that's really the key. We have 2 minutes and 42 seconds left for any additional questions. Love to answer them. As you could tell, we're both pretty passionate about these businesses. All right. I'm getting this from Mike. So thank you all for your attention and time.

Thank you.

Hey. Good morning, everyone. My name is Larry Berger, and I've been with Ecolab now for 13 years and have the privilege of leading our research development and engineering teams as well as commercial digital solutions in close partnerships with our functional and commercial leaders. So a couple of things. First, you've heard quite a bit already about the importance of innovation. No doubt it is key to our strategy to bring our mission to life cleaner, safer, healthier. In fact, we think about innovation as the leading edge of how we bring our purpose to life, improving planet health, people health while helping our customers improve their business performance. And you've heard many exemplifications, and I will amplify that a bit today as well. Innovation is also naturally central to our growth strategy. We have a team of about 1,500 scientists and engineers globally working with our customers. We are the technology leaders in our verticals. We look to grow our innovation pipeline. Again, you heard many examples of that today, roughly 2x organic top line. So we try to grow our innovation pipeline 12% to 15% year-on-year and have done a pretty good job of that over the last decade. In fact, this year, we will launch our largest pipeline, which is $1.1 billion and forecasted revenue in year 5. That cannibalizes about 40% of preexisting revenue. It does so at greater margin, greater differentiation. It heightens our stickiness. We like to cannibalize our own products. We're built to do that. It often gives us, frankly, our best pricing opportunities as well. Indeed, we've launched about $3 billion of innovation in the last 3 years. And all of which is very much tightly focused on helping solve the problems that matter most to our customers. So we are fortunate, no doubt, right? We work in a target rich and dynamic environment. You've heard a little bit of that today. I really like this slide because it paints the picture of the operating environment that we see ourselves in and, more importantly, our customers are constantly working in. You've heard a major theme around sustainability. Again, no doubt, climate change is driving more action in and around people trying to find better solutions, more holistic solutions. Fully 1/5 of the 2,000 largest publicly traded companies have committed to a net-zero -- largely net-zero emissions, some net-zero water commitment over the next decade or 2. Frankly, there's zero way to get to net-zero emissions without an underlying water strategy that helps enable that. You continue to hear about water and energy being inextricably linked. We help work those 2 things collectively to try to optimize solutions at our customer site. The heightened demand for personal health and public spaces is a constant theme in facilities, restaurants, hotels. Again, I would say COVID here has been more of an accelerant than something entirely new, but it's pulled that awareness forward by more than a decade, whereas, previously, we've largely talked about cleaning buildings. Now we're talking about personal health and clean spaces. That's a big pivot. We are well positioned to do that. Ecolab Science Certified is a big component of it. You heard also about labor issues. We have a lot of really great solutions that are allowing more prudent, more thoughtful use of labor and largely labor-constrained environments. Nick Alfano talked a little bit about data centers. It's one of the things we skipped over. Data centers, no doubt, high-growth area but also some unique challenges around cooling. We have some proprietary technology that we have developed and will continue to deploy. We also think about our underlying competitive advantage is rooted in our operating model. It's an enduring model. We practice it across the enterprise. It's largely a combination of the industry-leading service team with best-in-class products. Increasingly, too, service for us is not only infield physical service. I think Hayley gave a good example of how we're using remote service as well to augment physical service. And again, we practice this model across all of our end-use markets. We think -- when we think about technology, and I could talk here for a while, so Beth, I might even take your extra 2 minutes. We have 3 large, at an enterprise level, deep technology platforms from which we innovate and derivatize unique solutions in different geographies and different end-use applications, okay? We work these collectively. We bring them together seamlessly. The first is in the area of chemistry. You've heard many examples already about antimicrobial chemistry. We have the industry-leading franchise position in this. It takes a lot of expertise, regulatory expertise and know-how to bring all these solutions to bear. We have unique capability in fabricating solids in different form factors. We are vertically integrated where we get economic and proprietary advantage. And of course, we also have our connected chemistry. So we have deep expertise in formulation and chemistry. We marry that with engineering know-how. It's our dispensing systems, allows us to do an in-situ dilution of a solid. It allows us to handle safely concentrates to react different actives on site that otherwise couldn't be handled safely. And increasingly, too, now, we have a deep network of embedded sensors that allow us to collect data in real time, in different end-use applications. We use that in the third platform that we call ECOLAB3D. That's our cloud platform where we ingest data, real-time data. I'll give you an illustrative example of that. But we're really excited about that because it gives us an opportunity to drive more holistic solutions by collecting data and optimizing -- often it's predictive. We have some unique algorithms and AI engines that power that. Maybe to double-click a little bit on the ECOLAB3D platform. Here's a cartoon of what that looks like. We are now collecting data, real-time data. These unique data assets could be resonant in 20, 30, 40 different industries. We collect that data. We ingest it. What kind of data is it? Well, it's operational data. It's service data. Sometimes it's metadata, data about data. So we can use exogenous data like weather patterns and other sorts of things that are central to being able to inform a model. So these are holistic models that collect a lot of data, proprietary engine that helps us process that data. It helps us think about and optimize an end-use application for a customer that hereto forth was not possible, okay? And I'll give you an example of that or a few examples of it, but we're really excited about the platform, okay? I would say we're still in the early stages, but we are really humbled by the power of AI engines to really augment our overall programs and drive optimization at a different end unit -- at different end units in our customers' sites. So we're thinking more about things like improving productivity at lower cost holistically. It's not just the best chemistry. I won't read all those examples. Each of those are different products that we bring to bear that are tightly aligned with driving customer outcomes. So maybe spend a minute on this as well. So you've known us historically as a company with best-in-class products. I don't think that changes. We continue to innovate great products. In fact, these outcomes stand on the shoulders, if you will, of best-in-class products. The first one in the left pillar here is water. So for example, and I think Darrell mentioned this, too, we sell great biocides, antiscalants, corrosion inhibitors. There's still a lot of innovation runway. We continue to do that. We largely marry that with ECOLAB3D tracer. You've heard that as well. So it's a dispensing logic that dynamically doses as required. Increasingly, though, this idea of net-zero requires that you co-optimize multiple-unit operations at a site, not a cooling tower and a condenser, but you do multiple-unit operations across the site, and then you help customers manage that across their entire network. And again, net-zero is an outcome that really stands on the shoulders of a lot of capability. Foodservice, we talk about Ecolab Science Certified as creating a safe environment. Again, lots of great products in there, training, et cetera. But the outcomes that matter most to our customers are illustrated here. I think it was a question around hospital-acquired infections. I think it's a really -- it was a really good question. I -- my personal view of that is we are increasingly seeing more adoption as we're able to prove a good correlation between a great program and the outcome, and it often requires a behavioral change. We've done that in and around hand care compliance monitoring with several hospitals now, and a very compelling drop in hospital-acquired infections when you have a compliance monitoring system that drives a behavioral change. Let me just say, no combination of a better dispenser and hand care product alone could do that. You really need to basically track and trace and improve people's performance in and around compliance. So let me walk through just a handful of quick examples that brings, I think, some of this to life. The first example, you've heard a little bit from from Tim's team around what we've been doing around COVID. This is a great product. It's sort of the triumvirate of great products. This is a product that we introduced in and around COVID. There's not a product in the market today that has a faster kill time for COVID. It's also a product that's effective against rhinovirus and influenza, and most importantly, you'll hear more about this going forward, norovirus. We're not talking as much about norovirus given the current environment, but I would say norovirus remains the single largest contributor to foodborne illness. The reason norovirus is so prevalent is it's equally likely to happen in a food preparation area, a food holding area or, frankly, in the dining area. A sick person comes in and ultimately has an event, and you have a broad food safety outbreak. This particular product is a 2-in-1. So it's a cleaner, it's a sanitizer. It's a no-rinse product, okay? And it comes from a concentrate. So we really like this particular product, again, not only because of the COVID performance but, broadly, its anti-viral activity, particularly around noro. The second example is in our food and beverage plants. The cartoon on the right is a cross-section of a pipe connected to a clean-in-place system. So this particular technology leverages our ECOLAB3D TRASAR system, which allows us to drive quality and proof-of-clean with our peracid technology, which is the leading franchise in the industry with a new product called Synergex that goes after something called biofilms. Biofilms are not new. They've been ubiquitous. But hereto forth, there has not been a good solution for biofilms. These are sort of the sticky, glue-like colonies that live inside a variety of different pipes, dead ends, what have you, notoriously difficult to identify and kill. This particular product kills 99.9999% of pseudomonas, listeria. These are ubiquitous and clean-in-place systems. This is the first product that has EPA registration for killing these biofilms. You can see the improvement. Typically, when a customer would discover you have a problem is these spoilage organisms would be resident -- present at higher concentrations. You get a shortened shelf life. The perishability of the product has been compromised. And so the benefit for customers in driving yield, quality, throughput, energy savings, water savings and brands really cannot be overemphasized. We really are excited. We're just launching this product. This next example is one that comes out of our light water business and working in a close partnership with an automotive manufacturer. And here, our customer is looking to save, targeting 15% water per car. I think all in, it probably takes something north of about 20,000 to 30,000 gallons of water to produce a single automobile. This example is in the most water-intensive part of the processing plant. This is the automotive paint where there's the ECoat, the phosphating, et cetera. This was a particularly thorny problem. We got excited about it. We launched something called Water Flow Intelligence, which provides a good visibility and a quantitative road map of how water is being used in this plant. We were able to identify how water was being used, how the chemistry was being dosed and synchronize it with the throughput of the auto fabrication and allow the operators in the plant to really see a variety of different opportunities for saving water. There's a great question around water a little earlier today. Often the true cost of water is not just the cost of buying the water or even heating the water. It's often having to dispose of the water. In many places in the world, disposing of wastewater is more expensive than buying clean water. So this allowed our customer to reduce water use by -- you can see about 25 million gallons in a single plant. It allows us to standardize what I'll say is excellence. So Water Flow intelligence, we can apply that across many different end-use applications in different industries. We're just launching that and really excited about it. The next example comes from health care. You heard an example in patient rooms. This is a particular example in an operating room. Again, it's one of these programs in our health care business that allows us to focus on what matters most to our customers. I think most of you know, the operating room really is the profit center. It's a source of the primary revenue in a hospital. Throughput's important. Often compromising, trying to speed the cleanup to try to drive more procedures is a bad trade, of course. What we've done here is we tried to develop a program, a lot of training, best-in-class products but also an auditing scheme that allows our customers to be able to test and validate how clean the -- how effective their cleaning process is, where they have gaps, identify and reinforce. And so it's not just a trend analysis, but it helps inform and shape the overall administration of the cleaning and hygiene program in a hospital that drives the outcome. So we really are excited about this program as well, the benefits of which are shown here. Broadly, when we think about innovation, and I've called out the pipeline, the importance of innovation to the revenue, revenue growth, the profitability of the company, again, cannot be overstated. We do a really good job of monetizing innovation across the Ecolab. Roughly 30% of all the revenue, this is the Vitality Index measure, is products -- is from products that we've brought to market over the past 5 years. And so we continue to drive Vitality Index and a variety of other metrics that really triangulate and sure we do a good job of monetizing. I would also say that the portfolio that we lead in any year, how it comes together, we have a process within the divisions. They do a very good job of prioritizing their opportunities. We look across the sector. And then lastly, with the third cut, and often this may be the most important cut as we looked across the enterprise to make sure that our biggest growth bets, our biggest growth opportunities are adequately fueled. And I'd say the agility of the team in the last 18 months, we've really been proud because we have brought to bear lots of solutions. You've heard some of them already for a COVID market, I would say, as well as have a really big pipeline headed up into '22. So a lot of agility to pull things forward, to adjust and showing steady growth in our pipeline. So let me just summarize by saying we, Ecolab, have a really strong foundation and innovation. It's central to our growth strategy. I heard many exemplifications of it. And I think what uniquely we're doing now is bringing capability, again, across these platforms with chemistry, engineering and, most recently, now our digital platform that allows us to real-time data capture and optimize outcomes that matter most for our customers. So with that, I think I'll thank you for your attention and open it up for some questions.

Hey, John.

John Roberts, UBS. Ecolab has great products for surface-borne pathogens, waterborne pathogens. You don't do much for air that's there. Do you think about filtration, air filtration or partnering with HVAC customers or anything to, again -- Bioquell does a little bit in terms of large-surface cleaning but something more broader?

So John, I think you nailed it. Historically, we have not really been in air directly for sure. I would say COVID reveals sort of a respiratory transmission vector of heightened awareness. We've done quite a bit of work in the last year or so beginning to scout and look at alternative -- look at solutions that could complement. I would just say that there's not a single magic bullet, as you could imagine. Part of the issue is depending upon how large the space is, how much air turnover there is, how effective. And increasingly, the science informs it's less about droplets, more about aerosols. They can be long-lived. So that is a long answer to a good question. I'd say it is very much on our radar screen. We're looking at that. Our customers have asked and need that. So we have a lot of exciting things going on in that space, and I'll just maybe leave it there for now. Thank you for the question, though.

We've got a question online from Ashish from RBC Capital Markets. "ECOLAB3D-connected devices are generating a huge amount of data. Who owns the data? How does Ecolab continue to use the data to improve operations for that particular customer, proactively help other customers and innovate for new products?"

Yes. So we've done a lot of work in this area for obvious reasons. So the sensitivity about customer-specific data, we would never do anything to compromise that. The trust that we've built with our customers and the long-term partnerships, we have required that. Having said that, I'd say broadly, the trend data, we utilize to help fuel our AI engines, okay? In the area of food safety, though, I would also add that most of our customers have a share -- they don't really compete on food safety. They compete on a lot of other things, the menu, price points, other issues. But helping the industry get better in food safety is a shared interest. So we've been able to pull a lot of that data. So some of the data is owned by our customers that we use in a partnership with them. The trend datas that help inform our AI engine, we have access to. Dave?

Larry, you highlighted this year's innovation pipeline. Any more detail around the key end markets, products or sectors that, that $1.1 billion is addressing?

Yes. So a couple of things. One, we -- let me back up and say we like a steady stream of innovation. Having said that, we've been working increasingly on getting more tightly focused with a fewer, bigger, more impactful, and I think we've made a big step forward this year as well. So the areas that we're broadly focused on are things like food safety, water and energy savings across the different end-use markets, trying to really -- and I think Beth and Hayley called this out, really trying to help accelerate the growth in both our health care and life sciences. We have a unique set of solutions. So I'd say you kind of heard a little bit today of the big themes areas. We'll probably launch 50 or 60 new products per year. Most of those are doubles, some triples, a few home runs. But we like the steady stream of innovation.

Next speaker is Emilio Tenuta.

Okay. Good morning, everyone. My name is Emilio Tenuta, and I've been with Ecolab for 37 years. In the last 11 years, have been leading sustainability and our ESG strategy. And so I was listening to all the business updates just like you were, and I'm sensing this common theme that ties us all together, which is that we're helping our customers navigate and succeed in a changing world, right? And so we're -- as you heard this morning, we're in a unique position to help our customers really achieve their ESG goals, and we are helping them with the challenges that you've heard about addressing some of these challenges related to water, food, health and climate. In fact, in 2020, some of these stats up here are fairly significant. When you think about helping our customers conserve 206 billion gallons, thanks to our food safety solutions, providing 1.3 billion people with high-quality and safe food, cleaned 66 billion hands with our hand hygiene solutions and helped our customers get to net-zero by avoiding 3.5 million metric tons of emissions. And so what I'm going to do today is really tell you about the progress that we're driving in the world and even in the next 10 minutes. You see we have an eROI counter that our team is going to have on the screen somewhere. And this counter shows how we're delivering on outcomes to our customers. In fact, I'm going to -- we're going to start the counter now to see how much water we helped our customers save. So let's get started over the next 10 minutes. So even though we've made progress, we have still more work to do. We've heard about some of the challenges related to water stress, food shortages, public health and climate change. And so the decisions that we make over the next decade, especially our customers with their meaningful targets that they're setting that you've heard about from the other business updates, requires us to really drive solutions that help them deliver sustainable way of life for all of us. And Ecolab has a role to play, which is why we created our 2030 customer impact goals. These customer goals are designed to deliver positive operational outcomes for our customers around water, food, health and climate. So it's really driven by a lot of the solutions and the expertise that you heard from the business updates before me that deliver on these impact goals. And so as you can see from this chart, we're well on our way through the first year to achieving those targets. And the good news is that this work also translates to our world-class operations. Here's our 2030 operational goals. We are setting targets as a company just like our customers with ambitious targets around net-positive water; getting to 50% reduction by 2030 with science-based targets, something that is -- continues to grow as people establish targets to get to net-zero; supporting a diverse and inclusive workforce; and ensuring that all our associates are safe. We actually bring these goals to life within the organization by setting meaningful targets that -- with annual milestones that we track every year and implement throughout the business. As you can see here, again, we're well on our way to achieving those targets. Now we continue to elevate our ESG leadership, and I spoke to some of you at the break about this. This is something that continues to be elevated in our day-to-day activities. These are just some of the highlights of the programs that we implemented this year. For example, we're one of 76 companies to adopt the World Economic Forum Stakeholder Capitalism metrics. We launched the enhanced Smart Water Navigator, which helps industry and our customers drive smart water management at the facility level, really to look at the full value of water to the earlier comment about water prices. We've also been a co-founder of the Water Resilience Coalition, which I'll touch on in a minute. And we've hosted a series of associate day of understanding events really geared at open conversations around gender and race. And we've been -- as you saw earlier, we've been recognized by some of the who's-who when it comes to ESG indices, right? For those that are familiar with CDP, for instance, the Carbon Disclosure Project, 9,000 companies that disclose their inventory around carbon and water, we were ranked AA for water security and climate, which is only held by 60 companies out of the 9,000. So we continue to drive, what we call, elevating our ESG communication somewhere. Here we go. Increasing our ESG disclosure and communicating our impact in the world. We've listened to you. Thanks to the IR team, we've gotten your feedback. And we continue to enhance our reporting. This is just some of the examples of some of the things that we've done already. We've expanded our GRI -- comprehensive GRI report to include workforce demographics. We've heard you loud and clear. We need more eROI customer impact testimonials, which we've begun to really implement in a big way. We've expanded our ESG overview, which also includes more information on our climate disclosure and the work that we're doing around TCFD, the Task Force on Climate-related Financial Disclosure; and SASB. So this is the -- as you all know, the alphabet soup of all the acronyms in the ESG world. And I think most important of all is that we heard you loud and clear in terms of enhancing our corporate responsibility reporting on ecolab.com by really taking these ESG metrics that I've been talking about and bringing them together into a central hub, which we did this past June, that enables us to better tell our story so that you can find those ESG metrics that you're looking for. Speaking of which, telling our story, a big part of our story is how we leverage partnerships in industry to really go further. And this has -- this comes to life 2 ways: one, through our customers, And you've heard from the presentation from the other business leaders that we're helping our customers drive cost savings, operational performance and a reduced environmental footprint. We've also been a leading voice when it comes to convening some of the biggest brands in the world through a CEO-led initiative called the Water Resilience Coalition, really designed as a movement to really address the water crisis in the world and really focus on best practices in industry as well as how we drive watershed impact through partnerships and drive access for all. So we're really proud of that initiative, and it continues to grow in terms of 25 members with a goal of getting to 50 in the next 6 months. Now whether it's through partnerships, through our customers or within our own responsible operations, were kind of this -- we have this idea that we drive throughout all of our organization that smarter and efficient operations is good for the planet, it's good for business. Simply put, the more we help our customers save, the more they grow and the more we succeed, right? And so this gives us an opportunity for us to really look at how this comes to life with the eROI counter, which is on ecolab.com. Let's take a look at and see what the numbers look like. So we're at 2.8 million gallons, just shy of 3 million gallons. Just to put this in perspective, I'm doing the math in my head as we speak. We're talking about 10,000 to 11,000 -- the drinking water needs of 10,000 to 11,000 people in, what, 9 minutes, just to demonstrate the kind of impact we're making in the world through our solutions. So I think it's no secret that healthy operations is kind of the future for business, right, and being able to drive responsible operations. And throughout all the presentations that you've heard today, clearly, we're talking about the fact that ESG is core to everything we do. And across every business, we're really -- we know that we can help our customers not only drive business results but also achieve their sustainability ambition. They don't have to be at odds or there doesn't have to be a trade-off. So with that, I'm going to pause and address any questions from the group. All right, more coffee. Okay, Mike.

Thanks all. I hope you've enjoyed our presentations thus far. We're going to take about a 5-minute break right now as they set up for our trade show. We encourage you all to take a good look at the products. We'll have some of our managers that you've heard speaking here. We'll have some of our marketing and R&D people as well, looking at our pillars, food safety, water, health, the environment in ESG and how we use them to drive growth. You also have an opportunity to, again, talk to all our folks, presenters and stuff. Following the trade show, we'll be going at about noon to our lunch where, again, we'll have opportunities to talk with our folks. So with that, let's start our 5-minute break. Please get back in here for the trade show. I think it would be really interesting for you all. So thank you.

Okay. What a wind up. Awesome. Well, I hope you all enjoyed your lunch. Those of you who are in attendance and would like to begin, please just by saying how much I appreciate your ownership and interest in Ecolab, a great company, as I think has been clear to you today. Had a wonderful conversation at lunch, I had some conversation around how current times reveal how little we really know about the future and how prepared we have to be for virtually anything. And this has certainly been proven over the past 2 years, almost, right? So I was also remembering a little bit this conversation that I had quite some time ago with a wonderful gentleman, Larry Cohen, who is a great mayor of St. Paul, later a state court judge, and -- so he was a retired guy. I ran into him in the skyways of St. Paul back in the time when people actually got out casually and spoke to each other and said hello to each other. And I made to the retired mayor and the retired State Court judge a comment, which was a little too casual. I said, "Larry, you're looking great." And Larry looked at me and said, "Oh, it will happen to you, too." So I've kept that in mind. He followed it, though, by saying something that I've always remembered, which was the only constant is change. And so I've got 2 words of advice for you: save your money and learn to live with it. And Lord knows that's been something that we can all live by, too. So look, where are we? Well, since we got together in Naperville 2 years ago, this has obviously been a very, very busy 2 years and not what any of us expected. We're very proud, as you can tell, about the way that we have navigated through this COVID-19 crisis. We have done this by continuing to invest in the business. And by that, I mean, we had this great question on how we've approached the field sales force and made sure that they continue to be engaged and trained. We've also continued to invest in digital. We feel like we are particularly well set up for the future. Some things don't change, too. So we believe that the Ecolab model is stronger than ever and that we are very well positioned to be delivering superior growth over the long term. This is -- has been, always will remain a high-quality growth company. We have been known for and will continue to be for delivering consistent financial performance. It is not a capital-intensive business. Consequently, it delivers very strong returns, and we have demonstrated the ability to grow while delivering expanding margins. Christophe showed this slide, right, which was the long-term track record of providing and delivering consistent double-digit EPS growth before COVID. As I mentioned, very proud of what we've accomplished through COVID. So we started with some very simple principles. I was pleased to have Greg come up here and say that the way we approach COVID is the way that we've approached earlier, I want to say, challenges. Meaning, we started with the absolute determination that we would protect our people, that we would protect our customers and we would protect our company. I think we've done it very successfully. From a financial perspective, look, here was our deal. It's hard almost to put ourselves back in the time frame of where we were when all this started, where the CP markets were in doubt, really risk was having a very difficult time being priced. We immediately went into the capital markets and raised $1 billion in cash. This was a commitment to our business partners from the finance team to say, "come what may". We know the liquidity is not going to be an issue for this company, so we should all get about our business jobs and doing it in the process. And in subsequent capital market transactions, we've been managing, I think, our debt portfolio very smartly, meaning that we have extended our maturity and reduced our cash sequentially as we've managed our debt. We increased our dividend in 2020, and '21 is a clear commitment to our investors of our confidence in future growth. Our free cash flow, in fact, has held up exceptionally well. Our cash conversion ratios remain very, very healthy even as we have made investments in the business. We've been smart, I think, in the management of working capital, and have been either hawkish or slightly less hawkish depending on what the time required in terms of what we were willing to accommodate in terms of working capital on the balance sheet. And so I think our financial performance and really our whole business response to COVID has been exemplary. You've seen the numbers, so I'll just orient you a bit to the chart, the left-hand side of our year sequentially through 2020 and then the quarterly recovery. I think the pace of the recovery is clear, meaning the sequential improvement has been demonstrated, which is what we've expected and continue to expect. Very, very different story also, as you've seen by business. The total numbers match on the right-hand side, and then we've broken it out between institutional, and really, everybody else. Christophe told this story, too. The bulk of the COVID experience has been felt by the institutional business across their restaurant and lodging space. No one would pick this environment to operate in. But frankly, I think that the great bulk of the business has held up exceptionally well, even stronger from a profitability perspective, this being the sales view. That said, it's a very dynamic environment and uncertainty remains. We live in the same world that everybody else lives in. Of course, the COVID virus and the various variants thereof have remained very difficult, right, to wrestle down, to even understand to some extent, but certainly to pin down. Inflation remains a concern. A lot of this is based on dislocation of the supply chain. There is this connected issue, which is labor availability, particularly in the U.S. It doesn't impact our business so much. I was asked this question at lunch, where do we see it? Well, we see it where you would probably expect us to see it, which is on manufacturing supply chains, including -- or also places like customer service centers, but not in a way that really impacts our ability to serve customers. But for our customers, it is a very, very big deal. And these 2 things intersect to some extent, right, because I think what's being priced in the labor market is a still to be discovered price point for what's required to get people back to work safely. And that, of course, has -- feeds expectations about future inflation. The weather, what can I say? I said to somebody earlier, I've lived in Houston for 5 years. Across that entire 5-year period, I took the precaution one time of filling up the tanks of my vehicle and going out and buying some water for a hurricane that never showed up. Obviously, the recent period of time has been much, much more dynamic and interesting than that. So uncertainties, sure, but we have many, many, many opportunities. One of the things that I've continued to engage in personally as we've gone through this COVID deal and remote work and where people, et cetera, is the talent funnel for Ecolab, especially finance, which is the part that I touched most. So I've been very active in our recruiting efforts talking to people who have an interest in the company, closing deals for candidates that we have a particular interest in. And I've said to all of them the same thing that I've said to those of you that I know many, many times, I've never been more optimistic about the future of Ecolab than I am standing here today. You've heard the story about the enormous record-setting gains that we've driven through COVID. You've seen great examples of technology driving productivity and, frankly, better customer outcomes. We are clearly established as the thought leader and also the practice leader in all dimensions of food safety. Our relevance to our customers' ESG missions and water and especially its relation to their energy consumption is well understood and drives value. And we have, of course throughout, maintained a very strong finance position and execution. And so my message to them -- again, my message to you today is my confidence that we will emerge from this a much more powerful partner for our customers and also a competitor in the marketplace. You've seen various references to this during the day. This is what we referred to as our napkin math. We believe it remains very, very relevant. It's an ambition. I wish to be clear about that. We don't deliver it every year, of course. But you can tell by the conversations of the business leaders at Ecolab that they understand fundamentally that we are united by a common understanding of our value proposition as well as in our DNA, this expectation that we deliver on the growth potential of the business. And I think this is a good expression of it and that we deliver it profitably as is also indicated. We are sustained in our confidence of the napkin math, if you will, by this -- Christophe showed this slide, our progressive efforts to expand our market opportunity. We've talked many times about how it is not our goal to own the market but rather to continue to reinvent the market and find new ways to serve customers in ways that create great value for them and great opportunity for us. We talked about this Ecolab Science Certified program, which all of you, I'm sure, regardless of what media you follow or what network have seen, I'm going to stand before you today to convince that -- or to acknowledge, confess, really, that as the finance guy, I was skeptical on my first viewing of this idea. Christophe will testify to this, sort of a, really, what does it buy? Can you track it? Can you do it? Let me just say, I'll take a big step back. This has been one hell of a success for the company and for our customers, and was like just a great initiative that continues to, most importantly, win new business and drive greater solution penetration. Many other things as well. We've talked about share gains, pricing, our opportunity or really sort of ability to offset the higher raw material costs that we face, not all at once, but we've got a long track record of demonstrating our ability to do it. We have delivered on our cost savings programs largely by driving scale and productivity. I mentioned the management through the COVID crisis, which I'm very proud of this team for leading, safety thought, practice, you get it and the strong financial position. The balance sheet is and remains in very, very strong shape. We've targeted for a long time what we describe as A-range metrics, meaning our key metric being about 2x net debt to adjusted EBITDA. We've been there quite consistently even through the COVID crisis. I mentioned already that we took full advantage of the attractive markets -- attractive capital markets to extend our debt portfolio and to reduce the cost, which has been very successful. Not noted here, but importantly, I think, or at least of interest, in August of last year, we went to the market with a 10-year issuance, which priced at the lowest rate ever achieved by an A-rated issuer in industrial America, which is a testament to the financial strength of the company but also to the confidence in the future of the company. We have continued and will continue to turn significant amounts of cash back to investors, both through dividends and through share repurchase, and we will continue to be guided by a very consistent set of financial objectives, including the EPS growth target that I've mentioned, our demonstrated ability to improve ROIC sequentially, even when we go through the setback temporarily of doing acquisitions. Our ability to drive returns on these acquisitions, I think, is very well demonstrated. And our cash flow priorities remain very much the same, which is we'll continue to, of course, make necessary investments in the business to grow the dividend in line with EPS growth, to make smart and accretive acquisitions and to do share repurchase really with what's left over and as a way to address and maintain the balance sheet where we want it to be. I stand here today, and this is my last slide, at representing an absolutely terrific Ecolab finance organization. The great majority of people in finance at Ecolab do not report to me. They report to the business leadership team that you've seen standing up here today. They are terrific partners with them in driving profitability of the business where it has to be driven, which is at the customer contract and the product level. Similarly, they are great partners and helping our business teams demonstrate the value that we add to our customers. We will and have been strong stewards of cash on behalf of investors, a responsibility that we take very seriously. And this will remain a very powerful mission-driven company with a great strategy and a great market opportunity, serving very fundamental and increasingly relevant customer needs. And so with that, I'm a bit early, but would love to take your questions, please.

[ William Pinson ] with Gabelli Funds. Thanks, Dan. With that 2% acquisition growth that you factor in there, I was just wondering if you could talk about any categories that you're particularly focused in? I know as Scott mentioned earlier that it's a highly fragmented area. Are there any areas like that where you go and roll up a lot of little ones?

Sure. And we've done that specifically in the past. So needless to say, we don't talk about any of our current acquisition targets. We see opportunities really across the entire business portfolio. They're not exactly even by geography. But frankly, at the roll-up level, okay, they're literally across the business, typically driven by unique customer positions that, frankly, it's more advantageous for us to buy our way into than to compete out, right? Or proprietary technology that gives us a leg up in specific applications. I mean that's the thrust of our bolt-on acquisition strategy. I was also asked this question about am I too proud of the balance sheet? I'll say I don't think so. And all I mean by that is, look, I think the balance sheet, it's like a muscle, okay? So you got to pay attention to it every day and make sure it stays toned. But if you don't give it a good vigorous work out now and then, that you're not getting the true value of it. And we've demonstrated in the past an ability to step up significantly to strategic larger acquisitions when they make strategic sense and also when the valuations are right, okay? Yes, please.

Thanks, Dan. On free cash flow, is there a way to move that a little bit higher through some working capital initiatives or other areas within the firm?

Yes. There is. The opportunity is not endless. So I'll give a more direct question. But on the way to getting there, let me just say, look, I think we were really smart in the management of working capital through the COVID crisis. Meaning across some of our institutional customers that were current, right, we gave them some relief on payments because we wanted to be full partners not only in their full safety -- or their food safety initiatives but also sort of in their existence and their ability to thrive. And so we agreed to a certain amount of extension of our days sales outstanding, our receivables, in ways that are almost completely recovered now. On inventory, and Christophe really loved this point of view, which seems obvious, but it took a while to get our heads wrapped around. The one thing that in a period of recovery like this, we talked also at lunch about all the supply chain disruptions going on around the world. Here's our deal: The one position we do not want to be in is not having product available to sell to customers when they need it. And so we have allowed our inventory to build the higher levels in places in anticipation of recovery just to make sure that our customers can count on us when they're ready. That said, if you back out the impact of how we navigate it through COVID, we push hard on working capital. It does not -- and as a metric of financial performance, it doesn't trump what is the greatest priority and the best way to generate cash, which is to sell more profitable business, okay? If I look at where we've been historically and where I think the improvement opportunities are in -- on the balance sheet and working capital, we're talking about a number that's in the $300 million range maybe. And so it's not really meaningful to the context of investor return or total market cap. But we'll continue to push it, okay?

We've got a question online from Tim Mulrooney at William Blair. Your financial targets assume 75 basis points of annual margin expansion. How does that break down by segment? And do you expect outsized expansion from any particular business?

So look, not all of these businesses are the same. So Christophe answered this question also earlier from a top line perspective. Look, some of these are double-digit growers consistently and some are lower single-digit growers. Similarly, the margin potential business of individual businesses is a little different. And now this is a finance guy answer, but I'll look back to my business peers here. I don't think I'm going to see any evidence of disagreement. There is margin potential in every one of our businesses, of course. Currently, we're in this period of raw material run-up, which we will price for and recover. But even on a steady-state basis, we have -- we're in a position to get better, and we will continue to be better positioned to drive margin expansion in all of our businesses by being better at demonstrating the value that we are creating for customers and by then translating our ability to keep what we think is our fair share of it. So just the natural win-win nature of this eROI concept will drive margin accretion across all of our businesses. They're not identical, okay? Is that it? Okay. So with that, I will invite up, please, my good friend, Mr. Beck. Thank you.

Thank you. I guess I'm so close with our CFO that we're even using the same clicker. Now so in COVID times, that's a testament to our confidence obviously that we have together. We're coming to the end, but not quite. So I'll just use a few charts that you've seen already today. You've seen many charts, I guess, today as well, so I'm not going to come up with new ones as such. But like just to kind of take what were the highlights as well of today. So for you, to keep that in mind and then opening up for questions as well so for me or for the team as well as such. And I'll just make a few closing comments as well at the end. And we'll be done, so around 2:00, 2:15, depending on how much questions we have as well. And either it's going to be the end or you can choose to go for the tours either at the hotel or here in R&D as we had planned. So the first chart I selected was what Dan said just now. It's been really busy 2 years, to say the least. We're not paid for effort. You're not looking for how much effort we're providing. Obviously, you're looking at what's the outcome that we are delivering ultimately but what our customers are looking for as well. So that's why we don't talk much about that, but talking about supply chain, talking about shortages, talking about all those things that are making our life a little bit complicated. While we don't want to talk about that because we master them, because we have a great team for it, but that's one of the strengths, obviously, of our company. And it's also when we talk about not what any of us had expected starting with COVID. It's when you test any team. And you look at what kind of resilience that team is having, what kind of agile response we can provide or not, ultimately. Well, that's been a great test, a great exercise for this team as well in saying, "well, what are your values? What are your principles? What's guiding you when you don't know where the world is going? How deep, how long it's going to be?" We're talking over lunch as well, talking about COVID-19 in the U.S. Well, in March, we thought it would be done by summer -- last summer. Obviously, it was just a few weeks, and then we'll be back in business. It's all going to be as it used to be. Well, the rest is a little bit different, as we know. And the team has really been following what mattered by protecting our team, protecting our customers, protecting the company as well, with the long term in mind. It would have been very easy for us to say, well, Institutional, that has been a pillar of our company for decades, if not, for a century since we started with that business in 1923. To say, okay, it's a market that's going down pretty big time, we need to adjust as well our cost structure, which means our size of the team. That was a very quick decision that we made, so 1.5 years ago saying, "Well, this is our biggest value." Those are the people who know how to help customers. Those are the people who know the relationship with all those customers and those customers' locations. We want to keep that value for the long term even if it's going to cost us in 2020 and in 2021 for that matter as well. Well, just imagine what would have happened if the thousands of people would have been let go. They would have taken different jobs in the industry or in different industries, ultimately. There were no way that those people would have come back to us right now. That's what the hospitality industry is experiencing the hard way, unfortunately, right now as well. Thank God, we kept the whole team, and that was one of our principle of saying we protect what matters to us: our team, our customers, our company, which means you, our shareholders, as such. So as a matter of fact, I think that we navigated quite well through the crisis of COVID-19 and really taken that crisis as an opportunity to get even better, even more on ESG, even more on gaining share, even faster in digital technology. We wouldn't have moved that fast on digital technology with COVID-19. It's helped us turn the corner as well in health care as well, boost our life science business as well. So as hard as it's been, it's been a good story for us and for the company. And we've continued to invest. That was also one of the big choices of saying it's not short-term delivery. It's about what we invest, where we invest, digital technology being a perfect example, our team being another one, obviously, for the future M&A as well in order to make sure that we're well positioned as the world reopens or whatever we want to call that as well. And I think that we're extremely well positioned for the future. So I'd like to come back as well to the much more short term, as such as well, what we've announced as well yesterday because of Hurricane Ida. And it's really in the spirit of total transparency. With U.S., we've always been, as well as a company, and we will always be in the future if it's for good news, but especially if it's not for good news, you will know what we know. And sometimes we don't know everything like in that case as well. But what we know is that it's a short-term impact like the Texas freeze earlier this year, different situation, different context, but similar impact as such as well, doesn't impact our top line momentum, which is really good news as such as well but will impact, obviously, so our margins especially in Q3 and some in Q4, depending on how long that lasts. It's not depending on us. It's depending on our suppliers' operations, which makes it a little bit more tricky. And we're working on that as well for the future. I want to have our supply chain become even more resilient as well, where we have alternative in order to make sure that, first and foremost, and we're known for that with our customers, that's why our top line is not impacted. We can still deliver them, but it comes at a cost. But I prefer delivering customers at a lower margin and keeping them for the future than not delivering to them and losing them as well so for the future. But there's always better ways to become even more resilient in the future. But at the end of the day, 2021 is going to be a strong year, both a top line and a bottom line, especially the second half of this year as well, which is, for me, the most important thing is how much momentum we're creating in the next few months in order to be ready for '22 and deliver a very strong 2022 as well and the future coming after that. And if I look a little bit more long term as well, we've talked about the secular trends that we are all experiencing today as a team and as a world as well as such. The pillars that we've chosen for years, they're not new. Those ones of health, food, water and climate are the ones that we've decided to focus on to build the future of the company, water being one that we've built over the last 10-plus years right now, which has been a great move, which has paid off in a very big way as well. When we think 2020, well our industrial business, one of the businesses we have, Healthcare and Life Science have been very strong as well, where they are helped, obviously, so Institutional that has been in a more difficult place as well. That's been a perfect bet in showing how our portfolio is demonstrating resilience as well. But being on health, being on food safety, being on water scarcity and being on climate, well, those are big trends that are going to obviously be tailwind for us if we really capture them the right way, and hopefully, we could convince them to -- or convince you today that we did think through that the right way and that we're ready as well, not only with what we've delivered so far, but will be delivering as well in the years to come. The value proposition we have as well is really something that we're trying to align with the customer needs today and talking to customers every single week. I'm going to talk to 2 this week, on Thursday and Friday as well in all industries. And I want to stay. All our teams are in touch with our customers. We want to speak their language. And the language is ultimately they know that they need to produce better outcomes with reduced impact on the environment and deliver better P&L results. That's what they need, and that's where we need to help them ultimately. And that's where our concept of people health, planet health and business health come into play. And ultimately, that's been our value proposition for many years that we've just fine-tuned here of maximizing the output of -- or the outcome of our customers, minimizing the impact in the environment at a high return and really supported by strong programs that hopefully to convince you. As well earlier today, you heard from Dan as well, an Ecolab Science Certified, that's been something we came up with 1.5 years ago. Well, that was really showing how innovative this industry or this company can be in times of needs as well. MedEuro is also something pretty new for many industries ultimately. I don't think many out there can help customers get there as quickly and as well as we can help them get there in a way that makes financial sense. eROI is critical for us. We have our P&Ls, obviously, that we need to deliver and master for the short term and for the long term. But that P&L is driven by how good we are at delivering value for our customers, which is measured by eROI, which is ultimately how much value do I create for those customers and how much incremental investments do they make. The return that you're calculating as well when you think about our own company when you invest in what we're doing as well, and that's the same way that we're looking at our customers. And at the same time, it helps them as well report and merchandise their own progress in terms of water usage, in terms of waste creation, in terms of CO2 footprint and all that. As you've seen from Emilio, while they can have that in real time as well, what does that mean for our company, speak, customer as such there and how fast am I getting to my commitment that I've made to my own consumers or investors by 2030 or by 2050. Well, and do I need more help or not? Well, that's going to drive growth for our company as well, which is a good deal for them, for the environment and for us, which means for you, ultimately. And the fact that we are not trying to become 90% of the market is by design. It's really trying every single year to make the market as big as we can, really to give us the opportunity to think what is out there that we can capture with the minimum investment. Life Science being a great example. You've heard from Beth and Hayley as well earlier today, data centers being another one, as well that you've heard from Nick Alfano, as what those are ways to think how can we expand the pie with everything that we have already in the company. And sometimes we need to buy it like animal health has been complemented last year in January when we acquired CID Lines as well. And we know that circle the customer ultimately is one of the great growth drivers that we have because those are relationship we have with customers, where we can sell more to those customers. And as you can see, $54 billion is out there to grab, at least in theory, obviously. And Science Certified is one way to get there because convincing customers that it's good for us to buy more product from us, from several divisions, they understand that it's good for us. Whether it's good for them is only demonstrated if their outcome is better, which is the idea of Science Certified, which is the idea of digital for net zero. You take all the programs we can provide. You get the 1 plus 1 equals 3 at a high return. You get a better outcome, a reduced impact and a higher return, that's a pretty good deal. We have a lot of room to grow even in the established businesses like restaurants for instance, as well as you can see. So it's the second largest in here with the blue being our part and the green, what we can get as well out there. We need to approach them differently. It's in different places around the world. It's less change-driven, for instance, as well. Those are still huge opportunities for us to go after. Which is the reason why I've been asked so many times, obviously, today, being the new guy, well, anything has changed in terms of long-term objectives? No, nothing has changed. Those objectives have been set many years ago. It's especially those for the top line organic growth, the 6% to 8%, the 20% operating income margin as mentioned. This is not a sound barrier. We have many businesses that are beyond that. Well, for them, it's getting to 30%. And for the ones that are in the teens, well, they need to get to 20% first, and then we'll raise the bar continuously in order to get as high as we can be, obviously, as such and delivering this double-digit 15% EPS growth. So really, I believe that we are very well positioned as a company because of the market we serve, because of the trends that we have, that are tailwinds as well for us in good -- like in less good times as well. We have an unbelievable team. We have the right means to get there. There is no other company that can deliver what we can. I think that we are very well positioned. We need to execute that especially well. That's what we're good at as well as a company. And I think that we have everything we need to get there in a good way, really focused on the long term. So with that, I'd like to open it up to Q&A and just make a few closing statements once we're done. So whoever wants to start.

Been a long day, I know. John?

Maybe you could talk a little bit more about the M&A pipeline? Are there kind of things you've been reviewing? And is it more product-oriented, geographic-oriented, market-oriented? What are you looking for there?

So as Dan said, John, it's always hard to go too much in details, obviously, in terms of M&A. I think the best way to think about the future of M&A for us is to look at the past. We've done a lot. We've done a lot of bolt-on acquisitions, so to gain shares. But it's true that in many places, we've reached the max of shares that we can get inorganically as well. So that's one limitation that we need to keep in mind. Products is a very interesting one as well because we can buy that at a fairly low price and then use our own distribution network ultimately to make it big. But most interestingly for me are the new fields, like Animal Health, which was a small example of a good M&A of something we did not address before biosecurity, so poultry and swine. We did dairy, beef, but we did not do poultry and swine in the past is a good example. We have no share there because we were not there, ultimately. So we have no limitation over there. It's adding as well, so to the market that we can address. So those are very interesting ones. And then there's always the question of the transformation deal. I'm not looking for a transformation deal for the sake of a transformation deal. It's -- if there is something out there like we did with Nalco that makes sense for the company long term, we will go for it, and we have the means to get there.

Thank you, Christophe. We discussed this earlier, but Diversey has been making some comments that they're doing well in the market. They're getting some business back, that they are -- they have good momentum. Are you worried at all about Diversey in a new public forum as a competitor than they were maybe previously?

I've never been worried about Diversey. We love to have them. We respect them. They are the ideal competitor for us. And I mean that, honestly, our teams likes to compete with them, especially because we win most of the time. But not all of the time as well. So there are sometimes where they did better than we did for a few months, and that ramps up the energy in our own organization to get to the next level, ultimately. The fact that they've become a public company, I think, is a good thing for us as well because talking a good game and then afterwards doing something different is way harder to do that as a public company. And for them, so to work on their better margins in the future, well, this is a good news. Ultimately, it's kind of welcome to the club. We're trying to do the same thing, the right way as well, which means what's right for customers and what's right for investors for the long term. So -- but let's keep in mind as well in terms of means they have. It's 1/10 of the R&D investments than what we have as well. We need to keep that in mind. As well, we have the advantage of water and hygiene, so coming together, which is not an obvious thing to do. Even if it's different divisions of the same company, well, we need to work together in order to make it work. For them to do that with outside companies, well, it makes it just harder, not easier, obviously, as such as well. So we respect them, and we look forward to keeping -- continuing to really compete with them.

How does the vitality index of 30%, sort of 30% of revenue from products introduced in the last 5 years, how does that change by division? I would think that there are some segments that face faster innovation cycles than others.

It's a great question, and there's no doubt about that. Sometimes it's the industry, and sometimes it's us too. Obviously, some are better than others with human beings, obviously, as such as well. But as we discussed before about so the high-growth business versus the low-growth business, there is no business that's allowed to be a non-innovative business because they've chosen to go the lazy path, ultimately. So there's no space for that in our own company. But sometimes you face industries that are resisting change or risk adverse as well, which makes it a bit harder. Let's take Downstream. For instance, while it's an industry that has been resisting change forever, interestingly enough, well it's probably an industry that will have to change the most of all our industries because they have no choice ultimately out there. And I love the way the Downstream team and Jeff's leadership as well has seen that as an opportunity and saying, well, helping them drive the transformation towards a decarbonized energy business, ultimately, is something we can help them get there towards to, that's driving innovation. That's a good thing as well. But I'd like to underline what Larry said as well earlier today, where we're shifting as well our innovation in an interesting way, where 2 elements that are important to keep in mind. The first one is we used to have a lot of individual innovation, and now we're trying to go for what we call mega projects. So it's fewer innovation projects with a much bigger bang ultimately for the customers and for us as well, which is a very interesting shift that Larry and the business team saw are making, as we speak, and quite successfully here. And the second dimension is the digital connection, if I may say. It's been seen for a long time as a separate stream. And now digital and data is completely embedded in innovation today and for the future as well. So that's going to redefine where we innovate as a company. And I think that innovation is going to play an even bigger role for growth going forward than it did in the past.

So a question online from Mike Harrison from Seaport Research Partners. You've been working to improve European margins for a while. What has the progress look like and how much further improvement could there be given some of the structural differences?

Great question. So coming from there. Well, we started at such a low level that we could only go up. That was the good news. It was together with Dan over there. So that was 10 years ago. It's quite a while. We were pretty large in Europe. We were making no money over there. That's maybe the French way of looking at things. I don't know. So we work a lot, but we didn't earn anything. That was a little bit unpleasant. And I really thought that in Europe is a place where if we do it right, if we can win in Europe, we can win anywhere. And I was there a few weeks ago and a month ago as well so with the team, I'm really impressed. First and foremost, with the team we have over there, wow, the quality of that team, it's been led by Darrell Brown, by Tim Mulhere as well over the years. We've all contributed to the success of Europe. We have an unbelievable diverse team over there, really on top of things, driving things better than ever. And if we look at the results, well, they were kind of flat last year, in the COVID year, which was quite a remarkable accomplishment. The margins went up as well at the same time. So we are kind of in the low teens in Europe today, which is obviously much, much better than being at zero. So we have kind of delivered what we had promised over the last 10 years, but there is no reason why they shouldn't get so to the 20% at some point as well at a different time than the U.S. Complexity is higher by definition, obviously, than in the U.S., where it's one country with a lot of critical mass. It's not exactly the same in Europe as well. But it's just a timing question. And I think that especially with the trends we talked about an ESG, well, Europe is leading for that as well for the better or the worse, and that's going to be a good news for us. So I'm really pleased with where we are in Europe and even more where we're going. Anyone else? [indiscernible] means a huge lot for us and for me. So a big thank you. So not only for your partnership but for coming as well today. That made a huge difference. Second, I'd like to thank the team as well for the great work that they've done as well to get ready here and hopefully present the businesses and where they're going as well as they could, during interesting times, like a hurricane, obviously, over the last few weeks. But still, and that's the commitment we have, it's to do what's right to the company and what's right for you as well at the same time. I'd like to thank the staff as well. We had to test yesterday, so 57 people. So those are the people who are behind the scenes supporting this event today who have done an unbelievable work. And I'd like to thank our friend, Mike Monahan as well. We've talked a lot about Mike as well. So at the bar yesterday, I have to admit that was a different setup. So for a workshop as such, after what, 37 years. Someone even told me, I think those 37 years even didn't change. I don't know if it's a good news or bad news. But we'll take that as a good thing, done an unbelievable work for so many years and obviously, for today as well as such. So we live in a complex world, in a world that's fascinating. I think today, we have trends that are good for our company as well. That's going to turn into opportunities for us as well going forward. We have a great team. We have a great business as well. And people, as we discussed over the lunch as well, the new generation wants to join this company because what we do is what they want to do with their own lives, which is a great place to be, obviously as such, because with great talent usually great things happen as well in the future. And last but not least, I'm the new guy. I have a bunch to learn, obviously, and you don't care about that, obviously. So I have zero time in a way to learn. At the same time, I need to learn as well. So I'm going to make a few mistakes, for sure. And I do one probably every single day. I try to do small ones and learning from them, obviously, avoiding the big ones. I don't know if I've done big ones yet, might come as well. But I want you to know that you have my commitment, not only to always tell you the truth in the good and especially like in the less good times, but most importantly, my commitment to go after what we've promised as well in here. It's not going to be every quarter, every year the same, ultimately. But for the long run, we will get there. We'll do everything we can to get there as well. Even if we live in an imperfect world, we'll do our best to ultimately lead towards those good places for our team, for our customers, for our company, which means for you as well. So a big thank you so for the trust that you place in us as well for your partnership. This means a lot. We are a people company. So those relationships means everything, and we would do anything that's required in order to keep that trust as well going forward. So thank you so much. Thanks for the partnership, and thanks for coming here. With that, Mike, you're on.

Thanks, Christophe. So I join Christophe in thanking you for attending today, and we appreciate your time and interest in us. So for that, we will begin the tours for those of you going on them immediately. For those going on the R&D tour, you can leave your stuff here. It will all be safe for your return. Those going on the hotel tour should definitely take your stuff with you so you can depart directly from the Omni. Please check your name badge and at the bottom for your tour group. If you're in the R&D, if you have a blue circle, you'll be going with Julie Markor, who is outside, okay? And then if you have a yellow, you'll be going with Jim Tarara. So please find them out there. Amy, they're outside the door? Perfect. And if you're going in the Omni, we'll exit into the lobby, and there is a motor coach, I believe, outside to go to the Omni. We'll have the Ecolab Science Certified. So again, bring your stuff if you're going to the Omni. Each tour should take about hour, 75 minutes, something like that. So with that, again, thank you very much for your participation, and best wishes and safe travels for today. Thank you very much.