Ecolab Inc. (ECL) Q1 2023 Earnings Call Transcript

For the period ending March 31, 2023

May 2, 2023 1:00 p.m. ET

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks:

Operator

Greetings and welcome to the Ecolab First Quarter 2023 Earnings Release Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Andy Hedberg, Vice President, Investor Relations for Ecolab. Thank you, Mr. Hedberg. You may begin.

Andy Hedberg - VP, IR

Thank you, and hello, everyone. Welcome to Ecolab’s first 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 the slides referencing this quarter 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 the 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 in the Risk Factors section in our most recent Form 10-K and in our poster materials. We also refer you to the supplemental diluted earnings per share information in the release.

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

Christophe Beck - Chairman and CEO

Thank you so much, Andy and welcome to everyone. Look, our team delivered another strong quarter, once again, even slightly better than I would have predicted. Top line was very strong. Volume trends remained stable. Margins expanded. Operating income growth got even stronger and adjusted EPS growth kept improving as we promised. All as promised, as we continued to face some real headwinds in foreign exchange and interest. Most importantly, our shift to offense showed some real encouraging signs of progress.

Organic sales improved from 12% in the fourth quarter to 13% in the first, with strong performance across all segments. Our net new business pipeline once again reached new records in the first quarter as what we have to offer, water, energy and labor savings while delivering the best and safest outcome in the industries we serve continues to grow in importance for our customers. We also maintained very strong pricing at 13%, which we believe will be the peak as we will begin to lap against last year’s strong acceleration. Our approach to pricing and it’s important to state that is responsible and respectful allowing our customers to absorb long-term increases in a progressive manner. This is backed by true eROI value, the Ecolab way as we help them reduce the overall operating cost, usage of natural resources and their environmental impact.