Ecolab Inc. (ECL) Q3 2022 Earnings Call Transcript

For the period ending September 30, 2022

November 1, 2022 1:00 p.m. ET

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks:

Operator

Greetings. Welcome to the Ecolab's Third Quarter 2022 Earnings Release Conference Call. At this time, all participants will be in a listen-only mode. A question-and-answer session will follow the formal presentation. As a reminder, this conference is being recorded.

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

Andy Hedberg - VP, IR

Thank you. Hello, everyone, and welcome to Ecolab's third quarter conference call. With me today are Christophe Beck, Ecolab's Chairman and CEO; and Scott Kirkland, our CFO.

A discussion of our results, along with our earnings release and slides referencing the quarter's results are available on Ecolab's website at ecolab.com/investor. Please take a moment to read the cautionary statements in these materials, which state that this teleconference and associated supplemental materials 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 in our posted materials. We refer you to the supplemental diluted earnings per share information and release.

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

Christophe Beck - Chairman and CEO

Thank you, Andy, and welcome to everyone.

In Q3, our team delivered another strong quarter, with steady double-digit organic sales growth of 13% and total pricing that accelerated from 9% in the second quarter to 12% in the third. Industrial grew 16% organic, with 15% pricing, and Institutional & Specialty grew 12% organic, with 10% pricing as market stabilized. The Other segment, led by Pest Elimination, continued on its strong trajectory with 13% organic and 7% pricing, and Healthcare and Life Sciences with year-over-year comparisons finally stabilizing, and with Life Sciences clearly leading.

Most importantly, accelerating pricing exceeded continued substantial delivered product cost inflation, with the net benefit expanding significantly since the end of the second quarter, which helped further ease year-over-year gross margin pressure. This, along with increased productivity gains, led to renewed positive growth in fixed currency operating income with nice gains in the Industrial, Institutional and Other segments. All in all, a clear and further step on our journey to fully recover our margins and get back to strong and steady earnings growth.