Ecolab Inc. (ECL) Earnings Call Transcript & Summary

Hi. Good afternoon. I'm Jeff Zekauskas, I cover chemicals for JPMorgan. This afternoon. It's my pleasure to introduce the management of Ecolab. Representing Ecolab is Christophe Beck, who is the CEO and Chairman. And Christophe has been CEO since the beginning of 2001. Over the past 2 years, Ecolab has faced a recession, very, very sharply rising raw material costs, it's made large acquisitions. It's rethought its business portfolio. And Christophe will tell you the details of what he's up to today and what he sees for the future. Christophe?

Thank you, Jeff. Good afternoon, everyone. Tough act to follow, obviously, after Jamie Dimon. It's going to be a bit of a different discussion, obviously, but a good story that I always like to share because it's a growth story in a world where many companies want to reach the sustainability goal have a hard time to get there and think that it's going to come at a cost. In our model, it's a bit the other way around because we've been helping our customers for now 100 years. We've just celebrated our 100-year anniversary on March 10 just last week. Based on the premise, ultimately, that we can deliver sustainable impact while reducing your total cost because if you use less energy, ultimately, so your cost is lower as well. And it's been the core of our story, so for a very long time as a company. So before I jump in, obviously, going through the cautionary statement. We're going to talk about the future, obviously, in a world that's a little bit unpredictable. So you're familiar with it. So let's jump in. I like this company; I've been 16 years in the company now because it's a growth company. And it's a growth company that's growing because we help our customers reduce the impact. And the more they reduce the impact, the more we grow and the better their performance as well as an organization. We ultimately as well known as the world's water company, the world's hygiene, and infection prevention company as well. We're the global leader in those fields. We've been for a long time. And it's not just about size, it's about leading in terms of technology, leading in terms of expertise, and leading in terms of the customers that we have as well and serve around the world. Second, we have a strategy that we have developed, fine-tuned, and practiced for a very long time. As you will see that we call Circle the Customer and Circle the Globe, which is really helping individual customers to do better and to expand what we do around the world. We've done that for a very long time in many different industries, and it's a strategy that we like so quite a bit. We have a significant margin opportunity. You've heard so from Jeff. We've been facing like everybody else, obviously, say inflation over the last 2 years or whenever that started as well. It's something that we've been facing in the past. Those were many inflationary cycles compared to this one that we are all experiencing, obviously. The good thing in our model is that since we never give pricing back. It's a good way to get our margins to a higher level, ultimately stick to it and to expand, obviously, our earnings. We talk about earnings power. And last but not least, that drives strong cash flow. We have a high conversion rate as well north of 90%, which allows us to reinvest in the business, which allows us to invest in innovation, in M&A and in some cases, most cases, most years as well, so to return money as well as to shareholders. So we are service and technology company that's really protecting people health, which means preventing infections. It's been a big deal, obviously, over the last 3 years. But it's not just about COVID. It's also what can happen in a hospital. You don't want to get a hospital-acquired infection. You don't want to get sick because of what you've been eating or drinking or in the place that you've been as well. We're protecting planet health as well with our main focus being on water, as you will hear it as well in a while, and ultimately doing it in why that is protecting business [ health ]. So it's really helping our customers protecting their customers, their consumers, their guests, whatever they're called, while reducing the impact on the environment and improving their own operational performance, which means the more they invest in us, the better the performance, the safer the end customers and the lower the impact as well on the environment. When you think about how our capabilities and the needs align, it's pretty impressive. We have 47,000 people serving 1 million customer locations around the world in 40 different industries in 172 countries as well, which is a big deal for the customers that we serve. Because wherever we serve them, while we can serve them the same way anywhere around the world at the same time. So as you've heard, so 1 million customer locations that we serve, especially on water. We touch 1/3 of the world food production, 1/4 of the power that's being generated as well, and we help protect the health of close to 2 billion people, and that's happened over the last 100 years. So a pretty cool story and means and capabilities that we have to really deploy what we can do for our customers. We protect the world's most trusted brands out there, 80% of the Fortune 500 work with us. It can be in the industrial field, which is roughly half the company. It can be in the institutional field, which is mostly hospitality. The third one is hospitals and life sciences, some call it health care as 1; for us, it's 2 different ones because 1 is really related to hospital and the other 1 related to the pharma world who serve ultimately so patients. But those are the 3 big pillars that we have and really serving the largest company and most trusted brand as well out there. If you look at the business portfolio that we have, quite well balanced. We like where we are. Things are going to evolve over time. But if you look at the left here, so roughly half of our business is in industrial, which is our water business for the most part. The second is institutional and specialty. This is our hygiene business around our hotels, restaurants, food, retail, public spaces and then the last new group that we have, which is hospitals and life science, pharma as mentioned before. So we like kind of that split, which is going to evolve over time as well. And if I had to make a bet, life science is going to be one of the leading forces going forward because it's a huge market. It's a market that's growing. It's a market that has a very high margin, and it's a market where we have high capabilities that we can provide as well as to our customers going forward. And on the other hand, so from a geographic perspective, so half of it is roughly in the U.S. and then you have a quarter in Europe and India, Middle East and then you have 1/3 that's in Asia and Latin America. So we like that portfolio. We have both from an end market's perspective and from a geographic perspective, which helps us as well, keep a steady state, especially in difficult times that can happen in some places around the world as well. We have a strong history of growth -- of earnings growth in that case. If you look at it since the year 2000, it's been a steady earnings growth, double digit, depending on what's the time frame you want to take. So between 5 years or 15 years, it's been between 10% and 12%, which is the steady state that we want to start from and improve from as well going forward. We've gone through crisis, obviously, being the financial crisis, being a euro crisis, you name it during those times as well. And we are very good at resisting traditional crisis. COVID was something very different because it's a 1/4 of our business that kind of stopped hotels and restaurants. This is different than a recession, obviously here, and I'll come back in a second because this is how we've addressed those moments. 3 years in a row that were interesting. Obviously, the first one with COVID in 2020, where we made a clear decision of saying, we will keep everyone. We have roughly 10,000 people in that business and said, we will keep that team because it's how we maintain the relationship with our customers. That's how we maintain the capability. That's how we maintain the expertise as well. And when it was hard for everyone to rehire or to hire people, obviously, so for that industry, where we had that team already with us as well. And our team in the broader company stayed as well at the same time because they knew that we were in it with them for the long term. The second year '21 were the big shortages starting with the Texas phrase, as we're all familiar with as well. And since our customers, as you will see, are so depending on what we're doing, the power plant stops if we stop serving them. A restaurant stops if we stop serving them. The hospital, the same as well. We've made the commitment to all of them that we will never ever let them down, whatever the cost as well at the same time. And last but not least, you had inflation and the war that just accelerated and made it even worse in a way, we made sure that we drove pricing the right way, which means we keep our customers going forward as well, we make sure they can get the savings, while we increase our prices, and we can keep our prices while we increase our savings going forward as well. So when I look back, those last 3 years have been foundational, so for us in building new capabilities and strengthening our values as well within the organization and with our customers as well at the same time. One snapshot is, for instance, our earnings in 2022. If you look at '22 versus -- or '21 versus 2020, went up 17%. And when you look at what happened between '21 and '22, while we faced 60% of our earnings as a headwind that we had to compensate through old-fashioned pricing, volume and productivity and got close back to where we were in 2021. So if we just look at '21 and '22, you said, well, not much happened except that we lost almost everything in between and rebuilt everything during the same year. So it's important to look under the hood and what happened during the year 2022, which has been a great way to build a capability in price that we had in the past but not at that level as well going forward. Organic growth has been a good story on this one as well. So moving towards the double digit is 12%, 13%, which has been a good story for us. We're a growth company, and we want to keep it as such and becoming even higher growth going forward, as I will share with you as well. But talking about pricing, if you look at that chart, which at first glance can feel a little bit complicated. If you look at the last 20 years, the gray is inflation and blue is pricing. What's interesting and what's standing out is that we never go down in pricing. It's always up. The question is how much up we go. It could have been 0.5, 1, can be 2, it can be 3, it can be 10, like it was in '22 as well since we had to address as well as the inflationary pressure that we had in '22, which was close to $1 billion in that year as well, because it's based on the fact that we make that commitment to our customers that they're going to get whatever happens, a return on the investment of 25% at least, which needs to be a good financial deal so for them, not just short term, but especially longer term as well, which is the key reason why we can drive pricing every single year and why we can drive growth because ultimately, it's a good return as well. So for all of them. And we've been moving as well on structural productivity, which is not cost savings for us. It's much more leveraging digital technology, which is a big deal in our company. We've been at it for 30 years, especially in our industrial businesses. As you will see a little bit later, we have one of the largest industrial cloud out there with ECOLAB3D. Well, this is technology that helps us do more with less, which helps us monitor customers remotely instead of going as well there, if you don't need to, as well, this is helping us get the productivity up or our cost down, depending on how you want to look at it as well, which is ultimately driving good operating income growth. So when we have pricing that's going in the right way, that we have volume that's staying steady, that we have productivity that's improving, that you have innovation that's contributing to it as well. Well, you can see that our operating income has been improving quarter-after-quarter last year. We were starting very well in '22. The war started in the second quarter or -- at the end of the first quarter as we know in February 24 last year kind of stepping back and then improving quarter-after-quarter ending with the 10% in the fourth quarter. And have indicated that for the first quarter will be between 15% and 25%, which is the range that I shared as well with all of you. So basically, a very good story from an operating income, which will continue, which is why we see that operating margins will improve in the first half and gross margin will improve in the second half as well in a very steady way in the quarters to come, which is why I firmly believe that the objectives that have been set by my pre-predecessor that was 30 years ago, actually, you're saying 6% to 8% is the mantra we need to have from an organic growth perspective should remain. Getting to 20% operating margin has been an objective that remains. The path has changed slightly over the last few years. But if anything, we're going to get beyond that because of all we've built as well and really driving this double-digit EPS growth, which has been our mantra for a very long time. So a very good continuation of that story, so for the years to come. So let me cover a little bit with you how we grow and how we look as well at the future. First and foremost, we're driven by macro trends that are challenging for the world, but in our favor. And I'm careful how I'm saying that, obviously. We'll be 30% more people by 2050. We will need 56% more food. That's a bit of a challenge. Obviously, you might ask why 56%, if we have 30% more, it's seen in terms of calories. So people moving, so from cereals to protein-based. Well, this is the reason why you have almost doubled the food versus the number of people. When you look at the energy, 50% more roughly as well by 2050. And in terms of water, this is by 2030. Three years ago, we thought that we would have a gap of 40% between what the world needs and what nature can replenish. Fast-forwarding today, it's 56%, which means that the problem has become bigger. So what we do for our customers to help them produce more products, better products at a lower cost because they reduce the usage of natural resources. Well, it's bad ultimately, but those macro trends that are helping us as well. We're lucky to be the leader in a very fragmented market, the $152 billion market that we're serving. We have 9% of that market. And we try to grow that market as much as we can. So it's not to get 90% of a small market. It's to keep 10% of a bigger market. And as you can see, so we've been keeping, expanding that market, Life Sciences being, for instance, the last add as well to that market, which has helped us move from this $135 billion to $152 billion as well on that chart. And if you look at versus competition, no one does all we can do, but many can do a part of what we can do, which is why you see that bar chart, which is long tail, but puts us in a very unique position where we can serve customers in ways that no one else can as you will see as well. And ultimately, how do we drive value? We have 27,000 people in 40 different industries. The experts, the one serving operating rooms are not the same serving paper mills or serving power plants, obviously. But the model is always the same. It's an expert trying to understand the process of that power plant. That's the example. I'm going to share a few with you in a minute as well. Bringing technology, bringing chemistry, bringing know-how and bring data insights, AI as well as for this customer to help them produce better products more products at a lower cost because they use less natural resources and lower the cost as well at the same time. That's been true forever since 1923. When we started, that model is the same. The expertise, the solutions are obviously evolving as we evolve. Interestingly enough, when we look at all the end markets that we have, we might think it's a portfolio of businesses. This is not the way we look at it because there is a lot we share. The expertise is very dedicated by end market, but the technology, 80% of the cases is similar from many end markets across many end markets as well. Our engineering, our chemistry, our cloud is the same. The one that we can use for power plants or the one that we use for restaurants, McDonald's, or Marriott, whoever those are, they're all based on the same cloud. So if you have a cooling tower on a hotel or a cooling tower in a power plant, they connected the same way, we can learn what's the best practice, what's the best-in-class performance, and we can exchange obviously that information across the end markets that we serve, which is very unique. Which is all driven by this ECOLAB3D cloud platform, where we have 40,000 plants that are connected in real time. On that cloud, remote monitored 24/7 as well, and it's something that we've done for 20 years. So it's not something that we just started for the past few months as well. Now the challenge and the opportunity to leverage all those capabilities across the million customers that we have around the world, but the technology is existing. The cost is going down, which means that we can accelerate as well. So the penetration of that technology in end markets, which could not afford that kind of price if you have a QSR Burger King compared to a power plant, they can't invest the same amount, obviously, behind technology. That's changing, as we know, because the cost of technology is going down in a dramatic way. And last but not least, it's this promise of eROI that we will help you produce better products, we'll help you produce more products. That translates in dollar terms. We will help you improve your environmental impact, water, energy, waste, that translates in dollar terms as well, and we will help you as well, making sure that your assets are being produced or used to produce as well as you can as well at the same time, you get the total value delivered. I invest $1 million in what we can do for the customer. You get 1 million back, that would be 100% eROI in that case as well, which is the way we've been selling to customers for a very long time, which is helping drive, obviously, is the pricing. Last but not least, our strategy, knowing that we have this 9%, 10% of a large market is $152 billion. Interestingly enough, almost half of the remaining opportunity is with customers we already have today. They buy 1 part of what we can do as a company, but not others. They can buy from pest elimination, from water, from food safety, you name it, and they don't buy elsewhere, which means that we can triple, quadruple times the size of the company just by working in our existing customers. And that's why the organization we have in sales is split in 2 parts. We have the enterprise accounts manager, the corporate account, as we call them. We have 1,200 of them and we have 27,000 people who are serving the individual units of all those customers as well around the world to capture as much as we can of that one. If I look at 2 examples here, the food and beverage client. It can be a brewery, for instance, well, how do we approach them? We do first what we call a total plant assessment. So we try to understand in that brewery, how much water is being used, where is it being used? What's the flow of water, what's the flow of energy, where is the waste happening? Where are the cost in order to understand what's the max potential of improvement that you can have? The second one is to focus on what we call an anchor solution. And for a brewery, for instance, is the one in the middle up there that you see, so this clean in place. It's a bit of a tech world for the industrial plants is basically an automatic system that allows you to clean and sanitize a lot of pipes in a plant in an automatic way. You don't need to dismantle anything. You just get chemistry go through it, you rinse it, you dry it, and you can keep operating then afterwards. We have the whole system, sensors, controls, chemistry, engineering in order to make that happen. Once we have that in and it's something that is really sticky because it's an engineering technology, dispensing technology that's in there that's really hard to take out well you build a rent and it's adding so surface sanitizers if you need to sanitize the floors, if you need to sanitize clean rooms as well. It's other programs in water management, it's water, but it can be pest elimination as well. So you add all the solutions around that plant, and you do it and afterwards around the world. And we do that for many brewing companies that are trying to get to their net 0 water, net 0 carbon as well. And we develop a road map with them. We do it plant by plant, and then in every plant around the world. And when you look at the numbers, then afterwards, yes, they save cost, they save water, they save energy, but they get that return, which is the thing which is really interesting. And when many talk about this green premium, as mentioned early on that you need to pay more in order to have a lower impact on the environment. It's never been true in our case, since we are driven by this eROI, making sure that you get a good return out of it. It can be the same in a biopharma production. It can be a vaccine like the one we've been using the last few years, our monoclonal antibody is a very different technology, obviously, than what we see in a brewing plant. Well, the core of the pharma is the clean room. That clean room needs to be perfectly sanitized, needs to be sterile. This is the core of what we do. And then you build around with water treatment, with pest elimination and Purolite, for instance, that we just acquired a year ago, making sure that the product that's being produced is as pure as it can be at the same time. So it's not just the environment, but it's the product that's being produced as well. That needs to be as clean as pure as it can be to be safe to be consumed. And at the end of the day, very similar approach than what we saw also with a brewery, very different technology, very different expertise, obviously, but a lot that we can leverage across those businesses and driving that return as well. As you can see in that example in that pharma customer as well. And when I think about life science, as mentioned before, I think that, that's going to be one of the key drivers of growth and margin growth as well. So for our company. We started a few years back in 2017 with our Life Sciences business, where we brought technology from different parts of their organization, created the business. It's a $300 million business today. We added Purolite that will become a $1 billion business together. So with our legacy business very soon, like this year. And then we can build from there as well through innovation, through expansion, through penetration and through M&A as well in a business that we believe is going to grow a double-digit with margins that are already today, north of 30%. So a very good story, large market, growth market and in a place where only 1 or 2 players can truly help customers do that. Last but not least, all what we do, protecting people and protecting planet while improving business health as well, positions us as a sustainability leader. Some call us the world sustainability company. That's one way to describe what we do as well. But it's absolutely essential. So for us that we help our customers deliver on the sustainability goal and at the same time that we deliver internally on our own sustainability goal, but knowing that there is a factor between 1 and 1,000 between what we do internally in our operations versus what we can do for our customers. So that's important to keep in mind. And when we look at the disclosures of CDP, interestingly enough, so the number of companies disclosing is going up in a rapid way, especially on a carbon. Interestingly enough, water is the main driver of carbon usage in industrial production as well because it's how you transport energy. Hot water, cold water, pumping water, treating one and all that requires a lot of energy, depending on the industry can be between 20% and 80%, depending on what it is ultimately. So the needs from our customers is going to go up. The commitments they've made are really hard to deliver. And most of those companies have a hard time so to get to the right place. And water is lagging behind the commitments that most have made on the energy side as well. Well, that's where we can make a big difference. And if we look at the 2 ways for us to look at our delivery versus our commitment, we've described where we want to be. So by 2030, I'll take just one example on water in here that we will have saved 300 billion gallons of water. That's the annual equivalent of drinking needs for 1 billion people. And as you can see, so we have 113% of our targets by that we've delivered already here in '21, and year '22 is going to get even better ultimately in here. So our customers are getting to where they promised as well so to be, same on climate, same on food, same on health as well. At the same time, it's making sure that within our own operations, and you make the progress that we can get ultimately at net 0 water, net 0 energy and carbon. As well, you can see we're making nice progress on water and climate as well. Diversity, equity, and inclusion has been a huge driver of our performance as a company as well. We have targets every single year as well for every leader in our company and we are delivering against those targets every single year as well. It drives better performance better retention and a better team as well to work on. And that's probably one of the reasons why so many of the new generation want to join us as well as a company and last but not least, it's to get to this goal 0 in terms of safety, and we've saved hundreds of lives over the last year or so because of this focus on vehicle driving safety, injury, process, wrong tank deliveries, everything we do in our business and ultimately really getting into a very good place where it's as safe as it can be to work with us and work with our customers. I'll conclude just on our financial objectives. We haven't changed too much over time. So it's not true for every single year, but it's true for the long term. As mentioned, sales growth between 6% to 8% organic, getting to this 20% OI margin, getting this 15% of earnings per share and the free cash flow conversion between 90% and 100%, that's been true even during the last few years as well, which is really important for us and getting back. So always the 2x leverage after in M&A. We were now close to 3 with Purolite and heading back down so to 2 as well. But making sure that the way we use our cash is always in the same order. And it's always starting with dividend in line, so with our earnings; second, investing in the business; and third, it's to do share repurchase like we've done for many, many years, which ultimately has helped us not only drive dividend growth for 31 years in a row and give back close to $10 billion to shareholders over the last 10 years as well as you can see half in dividends and half in share repurchase as well. So at the end of the day, like a lot of where we are, even more where we're going in this world with more people with less natural resources because we need more of them as well. It's kind of good to be the global leader in water, in infection prevention and in hygiene. To have a model that works, especially in more difficult times. So is a big thing and a good thing so for us as well. And really so making sure that we can get the margin out of what we offer to our customers over time, not immediately, but making sure that when we drive pricing, and that inflation eases as well. We can expand our margin to drive our cash flows is really the way we're thinking, and we're thinking in long-term ways to do that. So like where we are, as mentioned, like even more where we're going, good story of doing well by doing good, and we'll keep doing so. So with that, Jeff, we can open it to questions or comments.

Okay. So we've had a conventional presentation. And so if there are questions from the audience, please signal with your hand. Kevin, start? There's a microphone coming.

Following up on 3 things that you said there. One, you mentioned when you had the slide up about your OI margin that you see you -- the ability to get beyond that. So pre-pandemic, the peak was 16%. You've got pricing that you've taken pricing that you can take. There might be some giveback on the cost front. You've had productivity continuing many evident things, but my question really is about your expectation for the pacing of the improvement from here. Is it the old Ecolab incremental steps as you were getting towards that 16%? It was a little incremental steps? Or is there something that will be a period here that you would be -- that you would expect to be a market step back towards that 20% target? The second thing, you said you now want to do more with less, and you talked about a lot of the technology changes. So for example, with those 10,000 salespeople targeted towards hospitality, in the vision forward, do you need that many? And then third, you had a slide there on the Life Sciences, the eROI of greater than 50%, which also piqued my interest because it's also one of your better margin businesses. Is there a wide range in your -- among your end market customers as you assess it now for the level of, as you measure the eROI, is there a wide gap? Everyone is above 25%, but -- are there some that are way up the threshold?

So thank you, Kevin. So maybe I'll answer those 3 first. Otherwise, I might forget what the third one was. But starting with the last one, the range is wide, it is. It can be between 25% and 200%. Then comes the question, obviously, are you selling at too lower price if you can get to 100% return, which is a totally fair question, which is one of the reasons why I believe that our margins can get better as well going forward. Because we've learned during this inflationary time that the value we create is actually way bigger than what we've documented so far as well, we had to do it during this inflationary time. And we were positively surprised customers as well on how much value savings we were creating for them. So yes, the range is big. The second question on the feet on the street, we've evolved on that. I would say for the last 100 years, probably the last 98 years, we said we will grow by adding people on the street. And my predecessors have talked about that for years, decades. That's changing. We might be the same number of people or slightly more, but there will be a disconnect between the growth of the company and the growth of our people serving customers. And the easiest way to describe it is, as I've described it many times as well is if you have your security partner, whatever the brand is for your house, he used to be the guy coming at midnight with the flashlight and now it's a real-time monitoring that's being done. Well, it's less people, it's lower cost, it's better outcome, it's better experience as well. In our case, we've been visiting every single customer all the time. Sometimes we're there 24/7, sometimes once a week, sometimes once a month, once a year, whatever that is. We have learned over the last few years that there is a lot that we can do remotely and go there only if it truly matters, if we can't do it remotely, which is an advantage because it's an immediate response like the alarm, I mentioned before, and in a power plant, in a nuclear power plant, it matters the time at which you can address that question. At the same time, you reduce your cost. So there will be a disconnect going forward. And your first question on the margin improvement, we will get probably quicker to this 20% that we initially thought because during those times we've had introduced so much foundational work in terms of productivity, in terms of innovation, in terms of investing behind the growth businesses. So I expect that in the years to come, we'll see what happens with inflation in the next few quarters, who the hell knows. But if I think the years to come, we will have some time where we're going to be ahead of the trajectory that we used to be. I hope I've got all the 3 questions, Kevin.

When you all did the Purolite acquisition, I think you were targeting returning to A-grade credit metrics by the end of 2023. And when you showed your free cash flow priorities growing the dividend, M&A and repos, there's no mention of delevering. And I think leverage ended the year probably about a turn above where your target is. Can you just kind of talk about how you get 2 A-grade credit metrics between here and then? And I'm kind of thinking about that in the context of maybe $1.1 billion in debt maturing later this year or early next year.

Yes. So we generate a lot of cash flow. That's what's helping for sure. The best way is to look at what we did in the past, when we did the Nalco acquisition as well. So our debt ratio went up just mathematically. And we went back to the 2 as well within whatever, 2, 3, 4 years, I don't remember exactly the timing that we had. We do it in a smart way. It's not an objective that has to be delivered at a certain point of time, it's the trajectory that's important to say, we're going to get back, obviously, so these 2. If we have an M&A in between, well, that's obviously changing the math as well, but it doesn't change the underlying trajectory. So when I look at Purolite, when I look at the cash flow generation, the conversion that we have as a company, I feel really good about being able to get back to where we promised to be.

And then as a follow-on to that I guess when you -- I think it was [ when Nalco ] you just mentioned [indiscernible] credit rate downgrades, high BBB. Is that something you'd be willing to repeat for the right acquisition will come up in 2023?

I would not exclude it. Let's put it that way. We are very disciplined in our M&A metrics. But we want to make absolutely sure as well that we're not missing. Why we respect our metrics, strategic moves that help us get into new growth, new high-margin businesses. Purolite has been a perfect example. It was different than what we did in the past. So for sure, when we look at multiples. But when we look at the growth profile, the margin profile of that business, the fact that we are 1 of only 2 companies who can do that, perfectly complementary to what the company does as well is that, well, this is a no-brainer. We should do it as well. So it's not to be totally dogmatic, but in terms of metrics, this is something that we are very disciplined about.

Are there other questions?

Yes. I have a question on actually the way the stock has been performing in the last -- if you look back the last 5 years, the stock hasn't moved a lot. We are back at that level where we were 5 years ago. And I think the company has, yes, quite a number of times missed analyst expectations. Has that now be more about the very difficult environment that you have to be operating with the COVID situation and now what is inflation and you had to invest quite a lot? What I'm a little bit getting at is that you said earlier on, we're going to get to that 20% OP margin quite soon. Is there a situation there in the next couple of years, it will be more about you're harvesting what you have been investing in the last few years and then you can surprise to the upside again? Or how should we see that?

I'm going to maybe surprise you. But when I look at the last 3 years, we've -- if I had to redo it again, I would do it exactly the same. Just to be very clear on this one. So the surprise is, as you call them, COVID, yes, that was a surprise. That was a surprise for the whole world. The decision we made as well to keep everyone during that time was unlike what our customers have done, what most of the industry has done as well. That was a conscious choice as well at the same time. The year after, with the Texas freeze and all the shortages, we had 80% of our supply that was to 0 for 6 weeks in January, February, so 2021. We've made absolutely sure that we wouldn't let no customer down during that time as well. That came at a cost short-term. When I look at the number of customers we have today, when I look at the shares that we have today as well, we've gained huge shares, we've gained huge trust with our customers at the same time. And when I look at inflation, as I tried to explain to you as well here, we do it in a way that we keep customers for life. We have many of our customers with whom we have a handshake for 30 years as well in here. We could have jacked up the prices, double as well as the short term. While a year or 2 later, we know how customers would react as well to us. This is not what happened and will happen as well in here. So when I look back, I think the company has done the right moves during that time as well. And it's because of those right moves that our performance going forward will be good.

All right. Thank you very much. Thanks, Christophe. It's a nice presentation. We hope to see you next year.

Thank you. Good to be here. Thank you, Jeff.