Ecolab Inc. · NYSE:ECL
Ecolab — Investor Day (September 2023)
156 slides from Ecolab's investor day presentation, Sep 14, 2023
Slide 1: Ecolab Investor Day
EC@LAB ECOLAB INVESTOR DAY
Slide 2: Cautionary statement
Cautionary statement Forward-Looking Information This presentation contains forward looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, statements regarding EPS, sales, OI, margins, free
Slide 3: Christophe Beck, Chairman and Chief Executive Officer
Christophe Beck Chairman and Chief Executive Officer Investor Day Naperville | September 14, 2023
Slide 4: Double-digit EPS growth is back
ECOLAB Double-digit EPS growth is back +17% +12-19%* COVID-19 +13% +12% WAR +7% -4% -22% 2019 2020 2021 2022 Q1 23 Q2 23 Q3 23 Q3 2023 FORECAST RANGE, PUBLIC RATES *UPDATED AS DISCUSSED 4 *ADJUSTED EPS GROWTH DURING INVESTOR DAY CALL.
Slide 5: Returning to long-term double-digit trajectory
ECOLAB Returning to long-term double-digit trajectory EPS (Adjusted, Continuing Operations) $6.00 $5.00 $4.00 $3.00 $2.00 $1.00 $0.00 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Consensus Note: 2017-2020 Adjusted EPS ca
Slide 6: Executive summary
ECOLAB Executive summary ▪ Business momentum is strong and steady ▪ Growth opportunities keep expanding ▪ 20% operating income margin in line-of-sight ▪ Expect to deliver strong 2H 2023 and 2024 (in a world that remains complicated) 6
Slide 7: Strong business momentum
STRONG BUSINESS MOMENTUM 7
Slide 8: Strong sales growth
ECOLAB Strong sales growth $17 $16 $15B+ +11% $15 $14B +7-9% $14 +8% +13% $13 $13B $12B(6%) $12 +5% $11 (7%) $10 $9 $8 2020 2021 2022 2023 ORGANIC GROWTH RATES 2023 FORECAST RANGE 8
Slide 9: Strong earnings momentum
ECOLAB Strong earnings momentum Organic Operating Income Growth Adjusted EPS Growth +21% +20-23% +19% +12-19%* +13% +10% +7% +3% -1% -6% Q3 22 Q4 22 Q1 23 Q2 23 Q3 23 Q3 22 Q4 22 Q1 23 Q2 23 Q3 23 Q3 2023 FORECAST RANGE, *UPDATED AS DISCUSSED Q3 2023 FORECAST RANGE, PUBLIC RATES DURING INVESTOR DAY
Slide 10: Thoughtful value pricing
ECOLAB Thoughtful value pricing ($B, cumulative by quarter) $2.3 Pricing Delivered Product Cost $1.9 $1.5 $1.3 $1.4 $1.2 $1.1 $1.0 $0.8 $0.7 $0.5 $0.4 Q1 22 Q2 22 Q3 22 Q4 22 Q1 23 Q2 23 ADJUSTED, FIXED CURRENCY RATES 10
Slide 11: Delivered the right way
ECOLAB Delivered the right way 2023 – Best Employers for 2023 – America’s Greatest Places 2022 - Best Employers for New 2022 – 100% Corporate Equality 2023 – Ranked on Index Diversity (3rd year) to Work for Diversity (1st year) Grads (1st year) Index (10th year) (4th year) 2022 – Terra Carta Seal 20
Slide 12: Growing our impact by growing fast
ECOLAB Growing our impact by growing fast Planet health People health WATER CLIMATE FOOD HEALTH 2030 GOAL: 2030 GOAL: 2030 GOAL: 2030 GOAL: 300 BILLION 6 MILLION 2 BILLION 90 BILLION gallons of water saved metric tons of CO2e avoided people provided high-quality and hands cleaned safe food Made prog
Slide 13: Expanding growth opportunities
EXPANDING GROWTH OPPORTUNITIES 13
Slide 14: Positive macro trends for Ecolab
ECOLAB Positive macro trends for Ecolab PEOPLE HEALTH FOOD SECURITY WATER STRESS CLIMATE CHANGE 30% 56% 56% 47% more people more food freshwater deficit more energy by 2050 by 2050 by 2030 by 2050 14
Slide 15: Market opportunity continues to expand
ECOLAB Market opportunity continues to expand $152B $152B $135B $106B UNSOLD EXISTING CUSTOMERS CUSTOMERS $83B $55B $57B $39B $32B $18B 10% SOLD 1995 2000 2005 2010 2015 2020 2023 + + + + Pest Water Life Purolite Elimination Sciences MARKET DATA REFLECTS CURRENT ESTIMATES OF POTENTIAL OPPORTUNITIES
Slide 16: Right model to drive strong growth
ECOLAB Right model to drive strong growth BREAKTHROUGH ON-SITE TECHNOLOGY EXPERTISE BEST RESULTS AT LOWEST TOTAL COST (Reduced water, energy, waste impact) GLOBAL DIGITAL KNOW-HOW ARTIFICIAL INTELLIGENCE 16
Slide 17: Leading where it matters
ECOLAB Leading where it matters Infection Water Hygiene Life Sciences Prevention #1 #1 #1 Emerging Leader 17
Slide 18: Investing in future growth
ECOLAB Investing in future growth Leading bets High-growth bets Emerging bets Water Life Sciences Microelectronics Food & Beverage Purolite Data Centers Institutional / Pest Digital New Channels 18
Slide 19: Building unique capabilities, unmatched reach
ECOLAB Building unique capabilities, unmatched reach 47,000 40 170+ 1,200+ 1,000+ ASSOCIATES INDUSTRIES COUNTRIES SCIENTISTS DIGITAL EXPERTS WATER: FOOD: MILLIONS 36% OF CUSTOMER LOCATIONS WORLD’S FOOD PRODUCTION CLIMATE: HEALTH: 22% 1.4 BILLION WORLD’S POWER PEOPLE PROTECTED 19
Slide 20: Line of sight to 20% OI margin
Line of sight to 20% OI MARGIN 20
Slide 21: Strong margin expansion underway
ECOLAB Strong margin expansion underway Adjusted Operating Income Margin % Adjusted Gross Margin % 20% 2019: 44% 44% 2019: 16% ~15% 13.8% 13.7% 39.6% ~40% 13.3% 38.8% 38.3% 10.6% 37.7% Q3 22 Q4 22 Q1 23 Q2 23 Q3 23 Target Q3 22 Q4 22 Q1 23 Q2 23 Q3 23 Target Q3 2023 FORECAST RANGE PUBLIC RATES 21
Slide 22: Margins: Delivering value pricing
ECOLAB Margins: Delivering value pricing ($B, cumulative by year) $5.5 Delivered Product Cost Pricing Total Value Delivered $4.2 $3.2 $3.0 $2.0 $1.8 $1.4 $1.2 $0.8 $0.8 $0.5 $0.3 $0.3 $0.0 2019 2020 2021 2022 2023 ADJUSTED, FIXED CURRENCY RATES 22
Slide 23: Margins: Rolling out breakthrough innovation
ECOLAB Margins: Rolling out breakthrough innovation Market Innovation Enterprise Innovation Breakthrough Innovation Low-Water Data Centers Pharma Intelligence Data Centers Industrial Asset Intelligence TM ReadyDose Life Sciences Next Gen. Bioprocessing Food Quality Intelligence Restaurant Ops Automa
Slide 24: Margins: Fix Healthcare for growth
ECOLAB Margins: Fix Healthcare for growth 10% Healthcare 2.0 Adj. OI Margin ▪ Innovate ▪ Enhance profitability Bifurcation ▪ North America Surgical & Infection Prevention focus ▪ Leverage Institutional Restructure sales organization ▪ Right size support ▪ Optimize portfolio 1H 2023 2H 2023 2024+ 24
Slide 25: Margins: Shift portfolio
ECOLAB Margins: Shift portfolio Future 2019 Life 2010 Sciences/ HC/LS HC HC Ind/ Ind/ Water Water >$20B Ind/ $12B Water $6B I&S I&S I&S 13% Adj. OI Margin 16% Adj. OI Margin 20% Adj. OI Margin ~95% Recurring Sales OTHER SEGMENT INCLUDED IN I&S PUBLIC RATES 25
Slide 26: Confidence in the future
CONFIDENCE ve I THE FUTURE EC@LAB
Slide 27: Confidence in longer-term performance
ECOLAB Confidence in longer-term performance Organic Sales OI Margin EPS MSD - HSD Mid-teens 20% +12-15% +5-7% Mid-teens 13-16% +11% +4% 2009-2019 F2023-2024 Longer-term 2009-2019 F2023-2024 Longer-term 2009-2019 F2023-2024 Longer-term Longer-term +5-7% 20% +12-15% ORGANIC OI MARGIN AJDJUSTED EPS SA
Slide 28: In summary
ECOLAB In summary ▪ Business momentum is strong and steady ▪ Growth opportunities keep expanding ▪ 20% operating income margin in line-of-sight ▪ Expect to deliver strong 2H 2023 and 2024 (in a world that remains complicated) 28
Slide 29: Enhancing customer value to drive volume and pricing
Enhancing customer value to drive volume and pricing Darrell Brown President and Chief Operating Officer Investor Day Naperville | September 14, 2023
Slide 30: Critical imperatives for growth
ECOLAB Critical imperatives for growth 01 02 03 04 05 ACCELERATE DRIVE MARGINS LEVERAGE ENHANCE STRENGTHEN SALES GROWTH & PRICING BREAKTHROUGH OPERATING THE TEAM MOMENTUM INNOVATION PERFORMANCE 30
Slide 31: Accelerate sales growth momentum
ECOLAB 01 Accelerate sales growth momentum 31
Slide 32: Strong new business wins
ECOLAB Strong new business wins 1,300 1,200 1,100 1,000 900 800 700 600 500 2019 2020 2021 2022 2023 32
Slide 33: Robust pipeline of opportunities
ECOLAB Robust pipeline of opportunities 30-day pipeline 90-day pipeline +70% +60% Target Pipeline Target Pipeline 33
Slide 34: Accelerate impact through enterprise selling
ECOLAB Accelerate impact through enterprise selling END MARKETS Industrial Institutional Healthcare / Life Sciences WATER HYGIENE FOOD SAFETY PEST OFFERINGS 34
Slide 35: Leveraging our unique sales culture to drive growth
ECOLAB Leveraging our unique sales culture to drive growth ▪ Deep Knowledge ▪ Digital Solutions ▪ Value Delivered ▪ Analytics and Insights ▪ Enterprise Selling Customer Innovation Customer Focus Focus Incentives + Recognition Service Problem ▪ Knowledge Sharing and Training Solving ▪ Collaboration ▪
Slide 36: Drive margins & pricing
ECOLAB 02 Drive margins & pricing 36
Slide 37: Total value delivered exceeds pricing
ECOLAB Total value delivered exceeds pricing ($B, cumulative) $5.5 Delivered Product Cost Pricing Total Value Delivered $4.2 $3.2 $3.0 $2.0 $1.8 $1.4 $1.2 $0.8 $0.8 $0.5 $0.3 $0.3 $0.0 2019 2020 2021 2022 2023 ADJUSTED, FIXED CURRENCY RATES 37
Slide 38: Delivering strong customer value
ECOLAB Delivering strong customer value BUSINESS IMPACT OPERATIONAL IMPACT ENVIRONMENTAL IMPACT $ FINANCIAL IMPACT SAFETY PRODUCTIVITY WATER TOTAL VALUE BRAND CAPACITY ENERGY DELIVERED $ QUALITY COMPLIANCE WASTE Incremental Investment >25% 38
Slide 39: Leverage breakthrough innovation
ECOLAB Leverage 03 breakthrough innovation 39
Slide 40: 2023 innovation pipeline largest in history
ECOLAB 2023 innovation pipeline largest in history Industrial ▪ Global High-Tech $1.3 Billion* ▪ ▪ Food quality + safety Plastic recycling *Projected sales in year 5 ▪ Industrial Asset Intelligence Institutional ▪ Small-Format stores ▪ Beverage water quality ▪ Digital dishmachine program ▪ Healthy b
Slide 41: Enhance operating performance
ECOLAB 04 Enhance operating performance 41
Slide 42: Market structure supports global growth
ECOLAB Market structure supports global growth NORTH AMERICA EUROPE GREATER CHINA MILLIONS 16 110+ 10,000+ OF CUSTOMER LOCATIONS GLOBAL TECHNOLOGY MANUFACTURING PATENTS CENTERS FACILITIES 47,000 40 170+ 1,200+ 1,000+ ASSOCIATES INDUSTRIES COUNTRIES SCIENTISTS DIGITAL EXPERTS LATIN AMERICA IMEA ASIA
Slide 43: Leveraging digital to drive customer value
ECOLAB Leveraging digital to drive customer value Today Tomorrow Visit BETTER OUTCOMES FOR Preparation CUSTOMERS AND ECOLAB Time Visit Customer Preparation ▪ Increased market share Value ▪ Better customer retention Time Customer Value ▪ Improved selling capabilities ▪ Higher margins MORE TIME End-to
Slide 44: Accelerate impact through enterprise selling
ECOLAB Accelerate impact through enterprise selling ONE ECOLAB ONE ECOLAB CUSTOMER EXPERIENCE ASSOCIATE BENEFITS • More clarity • Single point of contact • Reduced complexity • Ease of doing business • More time to sell • Simpler, faster problem solving • More job satisfaction RIGHT RESOURCE, RIGHT
Slide 45: Strengthen the team
ECOLAB 05 Strengthen the team 45
Slide 46: Building a more inclusive future
ECOLAB Building a more inclusive future Progress towards 2030 DEI goals 2020 2022 2023 Goal 2030 Goal Women 24.1% 26.5% 28.0% 35% POC U.S. 17.2% 19.5% 20.4% 25% Black / AA U.S. 2.7% 3.7% 4.1% 6% 46
Slide 47: Creating a workspace where everyone thrives
ECOLAB Creating a workspace where everyone thrives April 2023 employee engagement survey results +5% +1% 42,000 Response Rate Engagement Respondents +2% +4% Retention Inclusion 47
Slide 48: Critical imperatives for growth
ECOLAB Critical imperatives for growth 01 02 03 04 05 ACCELERATE DRIVE MARGINS LEVERAGE ENHANCE STRENGTHEN SALES GROWTH & PRICING BREAKTHROUGH OPERATING THE TEAM MOMENTUM INNOVATION PERFORMANCE 48
Slide 49: Delivering strong growth through innovation
Delivering strong growth through innovation Gail Peterson, Chief Global Marketing & Communications Officer Dr. Larry Berger, Executive Vice President & Chief Technical Officer Investor Day Naperville | September 14, 2023
Slide 50: Innovation at Ecolab
ECOLAB Innovation at Ecolab 01 02 03 04 MARKET ENTERPRISE BREAKTHROUGH DIGITAL INNOVATION INNOVATION INNOVATION INNOVATION 50
Slide 51: Market innovation
ECOLAB 01 Market innovation 51
Slide 52: Transforming industries
ECOLAB Transforming industries Life Sciences Transportation Data Centers Entered in 2017 Entered in 2018 Entered in 2020 Microelectronics Biopharmaceuticals The Home Depot Entered in 2021 Entered in 2021 Entered in 2023 52
Slide 53: Enterprise innovation
ECOLAB 02 Enterprise innovation 53
Slide 54: Circling the Customer with our best solutions
ECOLAB Circling the Customer with our best solutions Ultimate cleanliness Net zero 54
Slide 55: Driving outcomes that matter
ECOLAB Driving outcomes that matter AND MEETS THE HIGH A HIGHER LEVEL OF THAT IS EASY FOR EMPLOYEES EXPECTATIONS OF TODAY’S CLEANLINESS AND SAFETY TO IMPLEMENT CONSUMERS Deliver a Scientific Clean™ Enable Operational Enhance Customer Experiences Compliance and Stability 55
Slide 56: Creating value with our largest customers
ECOLAB Creating value with our largest customers Value drivers More solutions and units sold Higher total value delivered Improved health department scores Enhanced customer satisfaction 56
Slide 57: Increasing awareness
ECOLAB Increasing awareness Connecting with national audience 57
Slide 58: Helping customers achieve commitments
ECOLAB Helping customers achieve commitments Turning climate commitments into actions across our customers' enterprise and advancing sustainable business growth 58
Slide 59: Leading customers making water pledges
ECOLAB Leading customers making water pledges 59
Slide 60: Driving c-suite awareness
ECOLAB Driving c-suite awareness Launch strategy Compelling creative Precision c-suite targeting Sustainability or Growth? Driving thought Why not both? leadership Owning moments that matter 60
Slide 61: Breakthrough innovation
ECOLAB 03 Breakthrough innovation 61
Slide 62: Opportunity-rich environment fuels innovation
ECOLAB Opportunity-rich environment fuels innovation Climate Change + Data Centers + Biologics Personal Health Labor Challenges Water Scarcity Microelectronics Acceleration in Public Spaces 62
Slide 63: Breakthrough innovation accelerates our growth
ECOLAB Breakthrough innovation accelerates our growth Innovation Pipeline Year five annual sales 2023 Innovation pipeline $1.3 Billion* Largest in History *Projected sales in year 5 Target 50% 38% Vitality index 17% 2020 2021 2022 F2023 2024+ 30% in 2022 Mix of breakthrough innovation 63
Slide 64: Breakthroughs focused on biggest opportunities
ECOLAB Breakthroughs focused on biggest opportunities LIFE SCIENCES INSTITUTIONAL & SPECIALTY HIGH-GROWTH WATER INTELLIGENT OPERATIONS GROWTH ENGINE MARKET EXPANSION Low-Water Data Centers Pharma Intelligence Industrial Asset Intelligence ReadyDose™ Ultrapure Water for micro-e Next Gen. Bioprocessin
Slide 65: Digital innovation
ECOLAB 04 Digital innovation 65
Slide 66: Digital innovation driving growth and margins
ECOLAB Digital innovation driving growth and margins Monitoring + Control Predictive Analytics Enterprise Optimization Expanding our revenue streams Subscriptions + Subscriptions + Subscriptions + Applications + Applications + Outcomes 66
Slide 67: Monitoring & control: ECOLAB3D foundation
ECOLAB Monitoring & control: ECOLAB3D™ foundation >90B data points Real-time monitoring Total value Connected-chemistry gathered annually & control delivered Enhanced Total Value Delivered Monetizing digital Improved Operational Efficiency Proactive Monitoring Connected-chemistry + Subscriptions New
Slide 68: Predictive analytics: Water Safety Intelligence
ECOLAB Predictive analytics: Water Safety Intelligence Connected-chemistry Predictive analytics Water safety Total value delivered Monetizing digital Improved Operational Efficiency Connected-chemistry + Subscriptions + Cooling tower program to reduce Proprietary algorithms predict Intelligence appl
Slide 69: Enterprise optimization: Industrial Asset Intelligence
ECOLAB Enterprise optimization: Industrial Asset Intelligence Total operational Connected-chemistry Predictive analytics Total value delivered savings Monetizing digital Connected-chemistry + Subscriptions Benchmark + optimize heat Replicate best-in-class + exchanger performance performance across I
Slide 70: Delivering strong growth through innovation
ECOLAB Delivering strong growth through innovation Market innovation Enterprise innovation Breakthrough innovation Digital innovation 70 70
Slide 71: Driving margin expansion and strong shareholder returns
Driving margin expansion and strong shareholder returns Scott Kirkland Chief Financial Officer Investor Day Naperville | September 14, 2023
Slide 72: Committed to deliver 20% operating income margin
ECOLAB Committed to deliver 20% operating income margin 20% 16% Objective 12% Today 2019 2022 GM SG&A Target Recovery Productivity ADJUSTED OPERATING INCOME MARGIN, 72 PUBLIC RATES
Slide 73: Realized $2B+ value-based pricing
ECOLAB Realized $2B+ value-based pricing ($B, cumulative by quarter) Pricing Delivered Product Cost $2.3 $1.9 $1.5 $1.3 $1.4 $1.2 $1.1 $1.0 $0.7 $0.8 $0.5 $0.4 Q1 22 Q2 22 Q3 22 Q4 22 Q1 23 Q2 23 ADJUSTED, FIXED CURRENCY RATES 73
Slide 74: Significant opportunity to expand gross margins
ECOLAB Significant opportunity to expand gross margins Gross Margins Gross margin drivers 44.2% Value-Based Pricing 44% ~40% Institutional Recovery 39.6% 38.2% 38.3% High-Margin Growth Engines Supply Chain Optimization FY19 FY22 Q1 23 Q2 23 2H 23 Target ADJUSTED, PUBLIC RATES 74
Slide 75: Strengthened structural productivity
ECOLAB Strengthened structural productivity Net Sales per Headcount ($M) SG&A% of Sales $0.31 28.3% 250 +14% BPS 25.7% $0.27 2019 2020 2021 2022 Q2 23 2019 2020 2021 2022 Q2 23 R12 R12 PUBLIC RATES 75
Slide 76: SAP: Strong and growing ERP foundation
SAP | Strong and growing ERP foundation Total Ecolab Sales in SAP 98%+ 85% 35% 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 76
Slide 77: Transforming the way we work
ECOLAB Transforming the way we work One Ecolab ONE ECOLAB ▪ Improving customer value and experience ▪ Unlock $55B enterprise sales opportunity ONE CUSTOMER EXPERIENCE ▪ Increasing time to sell ▪ Delivering G&A support at scale ONE FIELD ONE COMPANY ▪ Continue to invest and leverage digital + DIGITAL
Slide 78: Operating income margin path to 20%
ECOLAB Operating income margin path to 20% 20% 16% 12% 2019 Covid Inflation Supply SG&A 2022 Value Growth Institutional SG&A Target Impact Impact Constraints Productivity Pricing Engines Recovery Productivity ADJUSTED OPERATING INCOME MARGIN, 78 PUBLIC RATES
Slide 79: Generating strong free cash flows
ECOLAB Generating strong free cash flows FREE CASH FLOW CONVERSION 127% 124% Free cash flow drivers 100% 103% 97% Target ▪ Strong earnings growth ▪ Low capital intensity, 5-6% sales ▪ Working capital efficiency ▪ Free cash flow conversion 95%+ 2018 2019 2020 2021 2022 2023 79
Slide 80: Remain focused on strong balance sheet
ECOLAB Remain focused on strong balance sheet Returning to A-range metrics ~2x net debt / adj. EBITDA 3.5x 14.00 3.1x 2.9x 2.9x 2.8x 3.0x 12.00 2.5x 2.4x 2.4x 2.2x 2.5x 10.00 2.2x 2.2x 2.2x 2.2x 2.2x $8.8 $8.6 $8.6 $8.3 2.0x 8.00 $7.6 $7.3 $6.9 $6.7 $7.0 $6.7 $6.5 $6.6 $6.5 $6.4 1.5x 6.00 4.00 1.0x
Slide 81: Creating shareholder value through M&A
ECOLAB Creating shareholder value through M&A Acquisition Strategy Results Created global leader in water and 2011 Water & Sustainability enhanced Circle the Customer (CTC) opportunity Strengthened F&B international business 2013 Food & Beverage Expansion and expanded Coca-Cola relationship +15% Add
Slide 82: $10B cash returned to shareholders
ECOLAB $10B cash returned to shareholders ~$10B Cumulative Cash Returned 2012-2022 ($ Billions) $10.0 INCREASED CASH $9.0 DIVIDEND FOR $8.0 $4.7 31 $7.0 Consecutive years $4.2 $6.0 $4.1 $5.0 $4.0 TOTAL RETURNS $3.6 2012-2022 $4.0 $3.1 $3.0 $2.5 $4.9 $4.7B $1.7 $4.3 Shares repurchased $2.0 $3.7 $3.2
Slide 83: Long-term financial objectives
ECOLAB Long-term financial objectives FREE CASH FLOW CONVERSION ORGANIC SALES OI EPS GROWTH MARGIN GROWTH 90% - 100% +5-7% 20% +12-15% of net income LEVERAGE FREE CASH FLOW PRIORITIES ~2x net debt / 1.Grow dividend in line with EPS growth adjusted EBITDA 2. Acquisitions 3. Share repurchase ADJUSTED
Slide 84: Driving margin expansion & strong shareholder returns
ECOLAB Driving margin expansion & strong shareholder returns Strong margin expansion Strong free cash flow Strong shareholder returns 84
Slide 85: Industrial Water: Unleashing the world's water company
Industrial Water: Unleashing the world’s water company Nick Alfano EVP & President, Global Industrial Investor Day Naperville | September 14, 2023
Slide 86: Global water leader
INDUSTRIAL WATER $10B Global water leader ECOLAB WATER-BASED SALES $0.5B Institutional Healthcare & $3B & Specialty Life Sciences $10B $3.5B Heavy Water & Light Water Industrial $6B - Water - F&B - Paper 86
Slide 87: Impacting water across our end markets
INDUSTRIAL WATER Impacting water across our end markets Heavy Water Sector Light Water Sector MANUFACTURING PRIMARY GLOBAL DOWNSTREAM CHEMICAL MINING POWER F&B & INSTITUTIONAL METALS HIGH-TECH TRANSPORTATION O N - S I T E E X P E R T I S E | C O N N E C T E D C H E M I S T R Y | D I G I TA L T E C H
Slide 88: Huge market opportunity
INDUSTRIAL WATER Huge market opportunity Industrial water market Key growth drivers Breakthrough innovation 9% Ecolab Water for Climate $39B New segment development Market data reflects current estimates of potential opportunities 88
Slide 89: Strong long-term performance
INDUSTRIAL WATER Strong long-term performance INDUSTRIAL WATER SALES ($B) Industrial Segment 7-9% Long-term targets 13% 5% Organic sales growth CAGR 5% -4% 3% +5-7% Adj. OI margin 2019 2023 Target 15% 15% 18% 2019 2020 2021 2022 2023F GROWTH RATES FIXED CURRENCY RATES, ACQ ADJ 89
Slide 90: Industrial water – positive market trends
INDUSTRIAL WATER Industrial water – positive market trends Heavy Water Sector Light Water Sector MANUFACTURING PRIMARY GLOBAL DOWNSTREAM CHEMICAL MINING POWER F&B & INSTITUTIONAL METALS HIGH-TECH TRANSPORTATION Energy transition Renewable Mini mills and Decarbonization, Renewable Climate Electric Wa
Slide 91: Growing fast with the same water
INDUSTRIAL WATER Growing fast with the same water Our demand for fresh water will outstrip supply by 56% by 2030 All water 100% 860 miles Fresh water 4% 170 miles Lakes & rivers 0.1% 35 miles WATER SUPPLY DEMAND TODAY DEMAND IN 2030 Sources: U.S. Geological Survey, 2019 https://earthhow.com/how-much
Slide 92: Industry challenge and opportunity
INDUSTRIAL WATER Industry challenge and opportunity Water usage 33% 150 Companies 41% Agriculture / Homes Industry is driving 150 companies water use in high impact 1/3 of income countries industry water use 59% 66% Industry All others 92
Slide 93: Customer needs keep growing
INDUSTRIAL WATER Customer needs keep growing Number of Disclosing Companies (CDP) Customer Commitments 20 38% increase in CDP climate YoY disclosures 16 12 2,9 HL water/HL 20% by 2025 Positive water Thousands Beer by 2030 NPWI by 2050 impact by 2025 8 4 Water Positive - 15% by 2030 20% by 2030 2003
Slide 94: The water-energy nexus opportunity
INDUSTRIAL WATER The water-energy nexus opportunity GOOD FOR THE PLANET GOOD FOR BUSINESS UP TO 75% Water Resilience of energy in manufacturing is driven by water Energy Credibility Greenhouse gas (GHG) Profit emissions 94
Slide 95: Bringing the best of Ecolab together
INDUSTRIAL WATER Bringing the best of Ecolab together Total Plant Assessment Field Execution 3D TRASAR Implementation Strategy across the and roadmap enterprise ECOLAB3D Core Ecolab Enhance Productivity | Reduce Water | Improve Profitability Ecolab Global Intelligence Center 95
Slide 96: Best-in-class outcomes across an enterprise
INDUSTRIAL WATER Best-in-class outcomes across an enterprise Because of our field experts … we know what … and we deliver outcomes at and digital offerings… best-in-class looks like… a site and across an enterprise Data Center Cooling Boiler Power Plant 27,000 Field Experts Pre-Treatment Process Pos
Slide 97: Delivering value in critical data centers
INDUSTRIAL WATER Delivering value in critical data centers COOLING WATER APPLICATIONS PRE-TREATMENT SOLUTIONS Annual Savings 30 Million Gallons 1 Million WATER SAFETY PROGRAM kWh MANAGED OPERATIONS 1,000 Metric tons $8 Million DIGITAL SOLUTIONS Total Value Delivered CONSULTING SERVICES The results i
Slide 98: Unleashing the world's water company
INDUSTRIAL WATER Unleashing the world’s water company The world’s leader with global impact on water Breakthrough innovation to drive margins New segment development to accelerate growth 98
Slide 99: Food & Beverage: Water & hygiene for quality, sustainability, and performance
Food & Beverage: Water & hygiene for quality, sustainability, and performance Chris Roberts EVP & General Manager, Global Food & Beverage Investor Day Naperville | September 14, 2023
Slide 100: Water & hygiene for better outcomes
FOOD & BEVERAGE Water & hygiene for better outcomes BEVERAGE GRAINS, OILS, DAIRY PROTEIN FOOD ANIMAL HEALTH & BREWERY BIOFUELS & SUGAR C L E A N I N G & A N T I M I C R O B I A L | W AT E R M A N A G E M E N T | E N G I N E E R I N G & D I G I TA L | A N A LY T I C S & I N S I G H T S Superior Food
Slide 101: Robust market opportunity
FOOD & BEVERAGE Robust market opportunity Food & Beverage market Key growth drivers Ecolab Water for Climate 15% Food hygiene solutions $14B Digital innovation Market data reflects current estimates of potential opportunities 101
Slide 102: Strong profitable growth
FOOD & BEVERAGE Strong profitable growth FOOD & BEVERAGE SALES ($B) 10-12% Industrial Segment Long-term targets 14% 8% 2% CAGR Organic sales growth 2% 5% +5-7% Adj. OI margin 2019 2023 Target 15% 15% 18% 2019 2020 2021 2022 2023F GROWTH RATES FIXED CURRENCY RATES, ACQ ADJ 102
Slide 103: Positioned to win in an evolving market
FOOD & BEVERAGE Positioned to win in an evolving market CUSTOMERS SUSTAINABILITY FOOD SAFETY DIGITAL Increased focus Specific water Heightened attention Accelerating on costs reduction goals on food safety adoption M A N A G I N G W AT E R C O M M I T M E N T S A N D C L E A N I N G R E Q U I R E M
Slide 104: Water is critical to F&B customers
FOOD & BEVERAGE Water is critical to F&B customers Key opportunity areas 2025 water goals 2030 water goals Up to 75% of energy driven by water Food industry has time bound water TRENDS and climate goals Water actions linked to external brand equity Ecolab Global Corporate Account relationships 104
Slide 105: Driving growth through key corporate accounts
FOOD & BEVERAGE Driving growth through key corporate accounts FOOD & BEVERAGE GLOBAL SOLUTIONS Target the world’s $2.5B global largest F&B companies opportunity One Contact CUSTOMER Dedicated resources One Contract Outcome based One Ecolab HYGIENE ECOLAB SOLUTIONS WATER FOR CLIMATE DIGITAL SOLUTIONS
Slide 106: Bringing the best of Ecolab together
FOOD & BEVERAGE Bringing the best of Ecolab together Total Plant Assessment Field Execution 3D TRASAR™ Implementation Strategy across the and roadmap enterprise ECOLAB3D™ Core Ecolab Enhance Productivity | Reduce Water | Improve Profitability Ecolab Global Intelligence Center 106
Slide 107: Delivering unmatched value to a brewery
FOOD & BEVERAGE Delivering unmatched value to a brewery COOLING WATER WASTEWATER STEAM APPLICATIONS APPLICATIONS APPLICATIONS CONSULTING SERVICES FOR DESIGN & ENGINEERING Annual Savings 962 Million Gallons MANAGED OPERATIONS 219 Billion BTUs 12,300 Metric tons DIGITAL SOLUTIONS PRETREATMENT CLEAN IN
Slide 108: Driving value through digital at a beverage customer
FOOD & BEVERAGE Driving value through digital at a beverage customer ECOLAB-ENABLED GROWTH REDUCING OPERATIONAL COMPLEXITY IMPROVING FOOD SAFETY Food Transport & Storage ENSURING HIGH QUALITY PRODUCTS TOTAL VALUE DELIVERED $380k/y The results in this case study are specific to this individual custom
Slide 109: Water & hygiene for quality, sustainability, and performance
FOOD & BEVERAGE Water & hygiene for quality, sustainability, and performance Ecolab Water for Climate to resolve water scarcity Food Hygiene Solutions for improved food safety Digital Innovation for margins and growth 109
Slide 110: Institutional & Specialty: Positioned to win in the evolving environment
Institutional & Specialty: Positioned to win in the evolving environment Greg Cook EVP & President, Institutional Group Investor Day Naperville | September 14, 2023
Slide 111: Market leader improving customers outcomes
INSTITUTIONAL & SPECIALTY Market leader improving customers outcomes FULL-SERVICE QUICK-SERVICE FOOD RETAIL LODGING LONG-TERM CARE PUBLIC SPACES RESTAURANTS RESTAURANTS WA R E WA S H I N G | L A U N D RY | S U R FA C E H Y G I E N E | F L O O R C A R E | A U D I T I N G | I N S I G H T S Maximize Ou
Slide 112: Huge opportunity remains
INSTITUTIONAL & SPECIALTY Huge opportunity remains Institutional & Specialty market Key growth drivers Transform business 11% Drive penetration $43B Breakthrough innovation Market data reflects current estimates of potential opportunities 112
Slide 113: Strong growth based on value delivered
INSTITUTIONAL & SPECIALTY Strong growth based on value delivered INSTITUTIONAL & SPECIALTY SALES ($B) 11-13% $5.0 Institutional & Specialty Segment Long-term targets $4.5 14% 4% 4% CAGR Organic sales growth $4.0 +4-6% 10% Adj. OI margin -20% 2023 Target $3.5 2019 21% 16% 22% $3.0 2019 2020 2021 2022
Slide 114: Dynamic market shifts accentuate Ecolab value
INSTITUTIONAL & SPECIALTY Dynamic market shifts accentuate Ecolab value FULL-SERVICE QUICK-SERVICE RETAIL LODGING LONG-TERM CARE PUBLIC SPACES RESTAURANTS RESTAURANTS Off-premise vs. Drive-thru Convenience Procedure Policy Limited return on-premise dining delivery changes overhaul to office Digital
Slide 115: Pivot to meet new market reality
INSTITUTIONAL & SPECIALTY Pivot to meet new market reality Institutional vs. 2019 96% 112% 35% 33% 91% 64% Market Units Ecolab Units Market Demand Ecolab Sales SG&A to Sales (Dine-In) UNIT AND SALES FIGURES ABOVE REFLECT U.S. INSTITUTIONAL 115 SG&A PUBLIC SEGMENT, PUBLIC RATES
Slide 116: Driving performance
INSTITUTIONAL & SPECIALTY Driving performance Productivity Penetration Innovation FOCUSED SALES BEST-IN-CLASS TEAM EXPANDED SOLID TECHNOLOGY SERVICE 116
Slide 117: Productivity: Transform business
INSTITUTIONAL & SPECIALTY Productivity: Transform business FOCUSED SALES TEAM BEST-IN-CLASS SERVICE Free up more time to sell. Aligned service to enhance value. Accelerate customer growth. Expanded service touchpoints. (Remote assist & on-demand training) 117
Slide 118: Penetration: Leverage Ecolab Science Certified
INSTITUTIONAL & SPECIALTY Penetration: Leverage Ecolab Science Certified SCIENCE BASED OPERATIONAL PROGRAMS EFFICIENCY COMPLIANCE BRAND CONSISTENCY SUPPORT Consumer Confidence + Location (Customer) Confidence Brand Standard Solution Penetration Margin Improvement 118
Slide 119: Innovation: Accelerating customer value
INSTITUTIONAL & SPECIALTY Innovation: Accelerating customer value Dishmachine Solids Program ReadyDose™ Automation Dishmachine technology Expanded solid technology Small footprint Labor automation Added digital capability Reduced labor costs Patented technology Insights & machine learning Lower cost
Slide 120: Delivering strong value across lodging property
INSTITUTIONAL & SPECIALTY Delivering strong value across lodging property POOL & SPA HOUSEKEEPING Rapid Disinfectant Cleaner Scrub Free OasisTM Aqua BalanceTM Pure ComfortTM Annual Savings 161 Million Gallons LAUNDRY FRONT-OF-HOUSE 1 Million Therms StainblasterTM AquanomicTM BEVERAGE QUALITY 5,900 N
Slide 121: Positioned to win in the evolving environment
INSTITUTIONAL & SPECIALTY Positioned to win in the evolving environment Transform business for growth Drive penetration for volume Breakthrough innovation for margins 121
Slide 122: Pest Elimination: Strong and consistent growth platform
Pest Elimination: Strong and consistent growth platform Nicolas Granucci EVP & President, Global Pest Elimination Investor Day Naperville | September 14, 2023
Slide 123: Unique competitive advantage
PEST ELIMINATION Unique competitive advantage Pest ELIMINATION ≠ Pest Control Science-based Data & Expert + + INNOVATION INSIGHTS SERVICE R O D E N T | C O C K R O A C H | F LY | B E D B U G | F U M I G AT I O N Core Ecolab Segments Food Retail Foodservice Food & Beverage Lodging Pest Elimination |
Slide 124: Large global commercial market opportunity
PEST ELIMINATION Large global commercial market opportunity Commercial pest market Key growth enablers Circle the Customer / enterprise selling 7% Segment expansion $15B Digital value and productivity Market data reflects current estimates of potential opportunities 124
Slide 125: Significant growth opportunity
PEST ELIMINATION Significant growth opportunity PEST ELIMINATION SALES ($B) $1.1 10-12% 11% Other Segment Long-term targets $1.0 11% 7% Organic sales growth CAGR $0.9 +6-8% 11% Adj. OI Margin $0.8 6% 2019 2023 Target -3% 14% 18% 20% $0.7 2019 2020 2021 2022 2023F GROWTH RATES FIXED CURRENCY RATES, A
Slide 126: Macro trends drive customer needs
PEST ELIMINATION Macro trends drive customer needs HEALTH ENVIRONMENTAL GUEST EXPERIENCE REGULATORY LABOR & FOOD SAFETY & CLIMATE Food-borne illness and Customer brand and Evolving pesticide and Sustainable and animal Training for safety and Infection prevention reputation protection fumigant compli
Slide 127: Growth via Circle the Customer enterprise selling
PEST ELIMINATION Growth via Circle the Customer enterprise selling Current Sales Enterprise Selling Opportunity Food Retail Foodservice $1B $3B FOOD RETAIL FOODSERVICE Ecolab Pest Other Ecolab Customers Customers F&B Lodging Other FOOD & BEVERAGE LODGING 127
Slide 128: Innovation-driven segment expansion
PEST ELIMINATION Innovation-driven segment expansion Food Transport Food Distribution Consumption & Storage Manufacturing INNOVATION: Fumigation & Decontamination CORE: Pest Elimination 128
Slide 129: Digitally-enabled pest elimination and productivity
PEST ELIMINATION Digitally-enabled pest elimination and productivity Connected Predictive Risk-Based Rodent Fly + + Equipment Analytics Service VALUE = GROWTH Pest Elimination Engaged Team Productivity 129
Slide 130: Protecting customers' brand and reputation
PEST ELIMINATION Protecting customers’ brand and reputation Large franchised restaurant chain Pest mentions from 99% non-Ecolab locations Fewer critical 48% pest-related Health Department violations in Ecolab locations 130
Slide 131: Strong and consistent growth platform
PEST ELIMINATION Strong and consistent growth platform Circle the Customer / enterprise selling Segment expansion for growth Digital value and productivity for margins 131
Slide 132: Life Sciences: Building Ecolab's newest growth engine
TOPIC / PRESENTER Life Sciences: Building Ecolab’s newest growth engine Hayley Crowe EVP and General Manager, Global Life Sciences / Purolite Investor Day Naperville | September 14, 2023
Slide 133: Innovative solutions for Life Science customers
LIFE SCIENCES Innovative solutions for Life Science customers PHARMACEUTICAL PERSONAL CARE WATER Life saving medicines High quality global hygiene Essential purification PRODUCT QUALITY | COMPLIANCE + SAFETY | S U S TA I N A B L I T Y High Growth High Return 133
Slide 134: Large market rich with opportunity
LIFE SCIENCES Large market rich with opportunity Life Sciences market Key growth drivers Large market, growing double-digits 5% Expanding into new high-growth markets $11B Unique Ecolab value proposition Market data reflects current estimates of potential opportunities 134
Slide 135: Consistent, profitable growth in Life Sciences
LIFE SCIENCES Consistent, profitable growth in Life Sciences LIFE SCIENCES SALES ($B) Life Sciences Division 4-6% 7% 9% Long-term targets 11% Organic sales growth CAGR +10-12% Adj. OI margin 36% -5% 2019 2023 Target 13% 19% 20% 30% 2019 2020 2021 2022 2023F GROWTH RATES FIXED CURRENCY RATES, ACQ ADJ
Slide 136: Large market, high growth, lots of space
LIFE SCIENCES Large market, high growth, lots of space Examples of companies operating in this space GLOBAL PHARMACEUTICAL PIPELINE 2022-2027 CAGR 10% Biopharma 5% Conventional 2019 2020 2021 2022 2023E 2024E 2025E 2026E 2027E Conventional Biopharma Source: Pharmaprojects 136
Slide 137: Foundational offerings improve customer outcomes
LIFE SCIENCES Foundational offerings improve customer outcomes HISTORICAL OFFERINGS PUROLITE Add Purolite Photo CLEANING AND WATER ENVIRONMENTAL PRODUCT SANITIZATION PURIFICATION DECONTAMINATION QUALITY 137
Slide 138: Our unique capabilities align to macro trends
LIFE SCIENCES Our unique capabilities align to macro trends MODULAR, SMALLER SUSTAINABILITY PROCESS QUALITY GROWTH IN BIOPHARMA MANUFACTURING 138
Slide 139: Purolite adding highly valuable capabilities
LIFE SCIENCES Purolite adding highly valuable capabilities 1 Gal ~1 Truck agarose ~ 1 Kilo gold industrial resin resin = = ALL OF THESE ARE WORTH ~$65K 139
Slide 140: Purolite resins attract what matters
LIFE SCIENCES Purolite resins attract what matters Targeted drug Agarose resin + “Programmed” protein = Purolite resin (Proteins, mRNA, etc.) ~Width of human hair PUROLITE RESIN ACTS LIKE A BIOLOGICAL “MAGNET” 140
Slide 141: More capacity for rapidly growing demand
LIFE SCIENCES More capacity for rapidly growing demand Global expansion for security of New pharma plants in King of Prussia, supply and new customers and Landenberg PA, USA Adding significant new capacity across pharma Significant Fueling continued double-digit expansion of Wales, UK plant growth a
Slide 142: Ecolab uniquely positioned to deliver value
LIFE SCIENCES Ecolab uniquely positioned to deliver value PROCESS INGREDIENTS PRODUCT ENVIRONMENT DRUG QUALITY | PLANT PRODUCTIVITY Comprehensive Solution | Safest Drug | Maximized Performance Highest Return 142
Slide 143: Delivering strong value across pharma production
LIFE SCIENCES Delivering strong value across pharma production ON-DEMAND WATER FOR FACILITY CLEANING PRODUCTION & IN-PROCESS CLEANING Delivering Downstream Processing Product Quality & Safety Compliance & Audit Readiness Fill & Finish PRODUCT PURIFICATION Sustainability AUTOMATED DECONTAMINATION + =
Slide 144: Additional new growth opportunities for Industrial
LIFE SCIENCES Additional new growth opportunities for Industrial MICROELECTRONICS ELECTRIC VEHICLES NUCLEAR 144
Slide 145: Building a $1B+ growth platform for Ecolab
LIFE SCIENCES Building a $1B+ growth platform for Ecolab Double-digit organic growth Increased capacity Innovation >$1B M&A >$300M Yesterday Tomorrow Future $11B MARKET + 10-12% GROWTH + 30% OI MARGIN 145
Slide 146: Building Ecolab's newest growth engine
Building Ecolab’s newest LIFE SCIENCES growth engine Large growth market, growing double digits Demonstrated performance, 10-12% growth, superior margins Unique Ecolab value proposition, for Life Sciences & Industrial 146
Slide 147: Closing thoughts
Closing thoughts Christophe Beck Chairman and Chief Executive Officer Investor Day Naperville | September 14, 2023
Slide 148: We have momentum
ECOLAB We have MOMENTUM Organic Operating Income Growth Adjusted EPS Growth +18-21% +19% +12-19%* +14% +13% +7% +1% -2% -1% -6% Q3 22 Q4 22 Q1 23 Q2 23 Q3 23 Q3 22 Q4 22 Q1 23 Q2 23 Q3 23 *UPDATED AS DISCUSSED FIXED CURRENCY RATES Q3 2023 FORECAST RANGE, PUBLIC RATES DURING INVESTOR DAY CALL. 148
Slide 149: We have major opportunity
ECOLAB We have major OPPORTUNITY $152B UNSOLD EXISTING CUSTOMERS CUSTOMERS $83B $55B 10% SOLD 149
Slide 150: We have 20% operating income margin in sight
ECOLAB We have 20% operating income MARGIN in sight Adjusted Operating Income Margin % Adjusted Gross Margin % 20% 2019: 44% 44% 2019: 16% ~15% 13.8% 13.7% 39.6% ~40% 13.3% 38.8% 38.3% 10.6% 37.7% Q3 22 Q4 22 Q1 23 Q2 23 Q3 23 Target Q3 22 Q4 22 Q1 23 Q2 23 Q3 23 Target Q3 2023 FORECAST RANGE 150 PU
Slide 151: We have confidence in longer-term performance
ECOLAB We have confidence in longer-term PERFORMANCE Organic Sales OI Margin EPS MSD - HSD Mid-teens 20% +12-15% +5-7% Mid-teens 13-16% +11% +4% 2009-2019 F2023-2024 Longer-term 2009-2019 F2023-2024 Longer-term 2009-2019 F2023-2024 Longer-term Longer-term +5-7% 20% +12-15% ORGANIC OI MARGIN AJDJUSTE
Slide 152: We have all it takes to win
ECOLAB We have all it takes to WIN $6.00 ▪ The right OPPORTUNITY $5.00 ▪ The right MOMENTUM $4.00 $3.00 ▪ The right CAPABILITIES $2.00 ▪ The right TEAM $1.00 $0.00 Consensus EPS (Adjusted, Continuing Operations) Note: 2017-2020 Adjusted EPS cannot be compared to prior periods as it excludes the 152
Slide 153: Non-GAAP Financial Measures
Non-GAAP Financial Measures Quarter Ended Fiscal Year Ended (millions, except percent) Q2 2023 Q1 2023 Q4 2022 Q3 2022 2022 2021 2020 Net sales Reported GAAP net sales $3,852.1 $3,571.6 $3,671.2 $3,669.3 $14,187.8 $12,733.1 $11,790.2 2021 Impact of Purolite on net sales - - - - - 12.0 - Non-GAAP adj
Slide 154: Non-GAAP Financial Measures
Non-GAAP Financial Measures Quarter Ended Fiscal Year Ended (millions, except percent) Q2 2023 Q1 2023 Q4 2022 Q3 2022 2022 2021 2020 Operating income Reported GAAP operating income $484.7 $351.6 $399.2 $483.0 $1,562.5 $1,598.6 $1,395.7 Special (gains) and charges at public currency rates $29.1 $27.
Slide 155: Non-GAAP Financial Measures
Non-GAAP Financial Measures Quarter Ended Fiscal Year Ended (millions, except per share) Q2 2023 Q1 2023 Q4 2022 Q3 2022 2022 2021 2020 Cash provided by operating activities $573.4 $198.2 859.2 $436.7 $1,788.4 $2,061.9 $1,860.2 Less: Capital expenditures (172.0) (173.7) (202.8) (192.5) (712.8) (643.
Slide 156: Non-GAAP Financial Measures
Non-GAAP Financial Measures Trailing Twelve Months Ended (millions) Q2 2023 Q1 2023 Q4 2022 Q3 2022 2022 2021 2020 EBITDA Net income including non-controlling interest 1,194.3 1,172.3 1,108.9 1,144.7 1,108.9 1,144.0 984.8 Provision for income taxes 251.3 241.3 234.5 226.6 234.5 270.2 176.6 Interest