Ecolab at William Blair Conference: Digital Innovation and Sustainability

On Tuesday, 03 June 2025, Ecolab Inc. (NYSE:ECL) presented at the 45th Annual William Blair Growth Stock Conference, emphasizing its strategic focus on digital innovation and sustainability. CEO Christophe Beck highlighted Ecolab’s resilience and growth opportunities, while also acknowledging challenges in the current market. The company aims to maintain its leadership position by leveraging macro trends and enhancing customer relationships.

Key Takeaways

• Ecolab targets 5-7% top-line growth and 12-15% earnings per share growth.
• The company plans to achieve a 20% operating income margin by 2027.
• Expansion into high-tech sectors and digital innovation are key growth drivers.
• Ecolab serves over 1 million customers in 172 countries, demonstrating global reach.
• Sustainability initiatives focus on reducing environmental footprints and operational costs.

Financial Results

• Ecolab aims to protect 2 billion people from infection and provide enough water for 1 billion people by 2030.
• The company helped save EUR 9.1 billion for customers last year, targeting EUR 20 billion by 2030.
• 90% of sales are recurring, with a commitment to a 20% operating margin by 2027.
• Ecolab Digital reported annualized sales of EUR 320 million, growing at 12% in Q1.
• Over EUR 10 billion has been returned to shareholders over the past decade.

Operational Updates

• Ecolab operates in 40 industries, with a strong presence in North America, Europe, and Greater China.
• 92% of products are produced locally, with 30% of sales from recent product launches.
• The company manages 100,000 water systems remotely and is expanding into data centers and microelectronics.
• The Life Sciences business is valued at $800 million with strong growth and margins.
• Focus on direct-to-chip cooling for data centers, reducing power usage by 40%.

Future Outlook

• By 2030, the world will need 56% more water than nature can replenish.
• Ecolab aims to reduce natural resource use while improving customer outcomes.
• The company targets a EUR 55 billion opportunity within a EUR 152 billion market.
• Expansion plans include global high-tech, life sciences, and digital markets.

Q&A Highlights

• Labor shortages are driving digital solution adoption in hotels and restaurants.
• Ecolab’s digital technology enhances customer retention and operational efficiency.
• Remote monitoring in dish rooms, laundry rooms, and pools is improving service quality.
• Pool water quality is a significant factor in hotel guest satisfaction.

In conclusion, Ecolab’s presentation at the conference highlighted its strategic initiatives and growth potential. For a deeper dive into their strategies and outlook, please refer to the full transcript below.

Full transcript - 45th Annual William Blair Growth Stock Conference:

Tim Mulrooney, Analyst, William Blair: Alright. We’re gonna get we’re gonna get started here. Thank you everybody for joining. My name is Tim Mulrooney, and I’m the analyst here who covers Ecolab. For a complete list of, research disclosures or potential conflicts of interest, please visit our website at williamblair.com.

So Ecolab, I mean, we we host them every year, here, and we’re very excited to have them again this year. They’re a leading provider of chemical based solutions for institutional industrial end markets. Shares so I I you know, to write this in introduction, I kinda stepped back for a second. I looked at the the stock price chart. And what I noticed is that, essentially since the end of twenty twenty two, shares have been on an upward trajectory since late twenty twenty two as the company successfully navigated what was several years of unprecedented, direct product cost inflation.

And they successfully navigated through that really nicely and the stock has responded really nicely. And I think that’s largely due to the strong relationships that they have with their customers and the strong value proposition that they bring to their customers. That’s how you offset the raw material price inflation. You partner with your customers and you navigate your way through that, and Ecolab largely proved that, was the case. So now that they’ve proved that out, that they have the ability to do that, the focus on the company has really pivoted towards growth, towards volume growth and towards them hitting their long term target of 20% OI margin.

And so I’m excited to dig into all of that with you today, Christophe, as well as some of the newer growth opportunities on the horizon. So very pleased to have CEO Christophe Beck with us today. This is a formal presentation. If there’s a little time at the end for q and a, we can do that. But most of the q and a will do at the breakout session after this, which is in the Maher Room.

But with that, we’ll

Christophe Beck, CEO, Ecolab: get started. Good afternoon, Christophe. Good afternoon, Tim. Good afternoon, everyone. Enjoy your lunch.

I’ll try to be as entertaining as I can as well in that interesting world, obviously. But I like where the company is. As you said, Tim, we’re in a very good place with great opportunities in front of us with a very strong balance sheet, so one that we’ve never had as great as it is even today. And difficult times are good times for Ecolab. We’ve been one hundred and two years in business.

We’ve seen it all in a way. And every time that the world gets into more challenging situation, we take it as an opportunity to improve the company, to improve our businesses, to improve our relationships with our customers, which have been strong for many, many years as well. And we end up so those interesting times in history in a place that’s stronger than we used to be as well before. So in other words, it’s an Ecolab moment for us that we’re experiencing as well here. And I’ll go briefly.

So on the cautionary statement, you’re familiar with it, obviously, especially since we’re talking about the future as well today. For the ones who are a little bit less familiar with our company, our purpose is to protect what’s vital. Our ambition by 2030 is to protect two billion people from infection and enough water for the drinking needs of 1,000,000,000 people. And we do that while helping our customers save operating costs in the P and L. Last year was EUR 9,100,000,000.0 that we helped them save.

And by 02/1930, we’ll see how close to EUR 20,000,000,000 we can get as well in the next few years. We have huge reach and huge capabilities. We have 48,000 people that are serving over 1,000,000 customers around the world. We touch onethree of the world food production, a quarter of the power that’s being generated. We have close to 3,000 people in R and D and digital technology.

And we serve these million of customers in 172 countries in 40 different industries, all with their dedicated experts as well serving them. So a lot of capabilities, a very broad reach with a purpose that is game changing for many human beings and industries around the world. We’re also the world’s water company. What we do in water is not just in our water business, where it’s close to EUR 8,000,000,000 in sales. What we do in our institutional businesses, in hotels and restaurants is also water related.

So EUR 10,000,000,000 of what we do out of the close to EUR 16,000,000,000 is water related, which makes of us the world’s water company with the most advanced technology, which the biggest reach as well out there and capabilities to really have customers produce more products, better products, safer products while reusing and recycling water as much as we can, ideally reaching net zero. We protect the world’s most trusted brand in all industries, being in industrial setups, being in institutional, hotels, restaurants, being in hospitals, being in pharma. We are everywhere it matters, really protecting people and the resources vital to life very well aligned with our purpose. One thing which is really essential to us, we’ve been in one hundred and two years following our customers everywhere that we’re going around the world. And today, that’s the key reason why we are present with our own operations, with our own people in 172 countries.

And we have this blessing in a way that we’ve built over the years to have end markets from a geographic perspective that are very balanced around the world. We have three mega markets with North America, with Europe and with Greater China, but we are present everywhere around the world as well with very similar margin profile as well. So when economies are changing around the world, ultimately, our overall performance remains more or less the same as well as a company. This is true when we think in terms of end markets, industries as well. The 40 that we serve, as mentioned before, well, they have kind of similar margins as well around the world, which allows us depending on how things are evolving to remain extremely resilient at the same time.

90% of our sales are recurring and 92% of what we sell is produced locally. We didn’t do that for tariff reason, obviously. So over history, that was really sort secure proximity to our customers at any time. What we do for our customers is essential for them to keep operating. A data center without cooling technology stops, a restaurants without washing stops, a hospital without sterile operating room stops and so on.

And that was the reason why we put our plants so close to our customers. It became a sustainable way of running our operation. It was a good approach in terms of FX. And today, well, it’s a good thing in terms of tariffs, but that was not the reason why we built that obviously. Tim just mentioned as well, our objective to get to 20% operating margin by 2027.

It’s a commitment I’ve made two years ago. The last few years, we’ve been improving our margins very nicely. We get to 18% in 2025. So this year, I feel pretty good about this one as well. So it’s 150 basis points improvement versus last year, and we’ll keep on that trajectory, so until 2027.

And it’s not that we all go home in 2027 and stop there. 20% is the next threshold that we want to reach. A large part of the company is already there, by the way, and then we will keep building, so towards much higher margins numbers in the years to come, which is ultimately one of the key reasons why our earnings per share so have been growing for a very long time. And even in more challenging times, as you’ve mentioned as well, Tim, before during COVID, during hyperinflation and all that, we’ve used those times to strengthen the company and position ourselves in order to be even more successful after those cycles. And you can see obviously, so the evolution of our earnings per share growing very nicely, so over time, long term especially.

Our financial targets, 5% to 7% top line, 20% operating income margin by 27%, then we keep building from there, leading to 12% to 15% earnings per share growth. We don’t need 5% to 7% to get to the 12% to 15%. This is a third ambition that we have here. The 12% to 15% is really our commitment that we’ve been delivering for a long time. And we’re just getting started.

Why that? First, the macro trends are in our favor. We’re going to be much more people on the planet in the years to come. Well, that’s a good news. Obviously, we’ll need more food, we’ll need more energy, we will need more water, unfortunately, that we don’t have.

We will need 56% more water than what nature can replenish by 02/1930. That was before AI. With AI started kind of two years ago to become really big, the world will need the same equivalent of power of electricity as India and the drinking water needs of The United States in the next four to five years. So if we thought that we were a little bit challenged from a natural resources perspective, well, it just got a little bit more challenging when we think in terms of AI for the years to come as well. The very good news, we have technology in order to help get the growth while using less natural resources as well at the same time.

The other thing is I always get that question, so who is Ecolab’s competitor? There is not really a company out there that’s doing what we’re doing. So end to end for each end market covering so many end markets in so many countries as well around the world. So we’re the leader, the clear leader in a very fragmented global market that keeps growing. It’s a very good place to be, obviously.

The third one is the way we provide value to our customers generates a virtuous cycle. Because our promise since 1923, when we were called Economics Laboratory back then was to really help our customers produce better outcomes, because in the hotel was guest satisfaction back then at the lower total operating cost by reducing natural resources and labor. That’s been true for 102, which means in other words that the more they invest in what we do for them, the better off they are in their own operations and in what they do for their own customers, consumers, patient, whatever or whoever they serve as well out there. We’re feeding as well our future through breakthrough innovation. As mentioned before, we have 3,000 people in R and D and digital technology, all helping, obviously, so to feed our pipeline, which keeps growing.

As you can see here, what we call pipeline for us is ultimately the sales that our new products launched within the last five years are contributing to our top line. And today, it’s roughly 30% of our sales are from products that have been launched the last five years. We have some great breakthrough solutions. A few I can share with you. One is helping data centers to move from water cooling to direct to chip cooling, where we’ve invented a lot of technology in order to go water free in ways that are helping data centers to use much less power to cool, 40% usually is used for cooling and to shift that power towards compute power as well at the same time.

On microelectronics, I’ll come back to that as well a little bit later as well. Semiconductor manufacturing is a water business. You’ve got the siliceum in water, you polish in water, you print in water as well, and it’s all in ultra pure water. It’s water that is more pure than thousand times what you get when you get water injected in your bloodstream, just to put it in perspective. So when we’re trying to help those microelectronics manufacturers to reuse and recycle within their semiconductor plants, well, this is really hard from a technology perspective.

And then we do the same so for restaurants with DISH IQ, which is a very different technology, obviously, but it’s making sure that these machines, it’s a water system, obviously, so it can be operated, monitored and fixed as well. So remotely and last but not least, because we make sure as well that wherever you go around the world, it’s a pest free environment. Well, it’s a hard thing to do. But with digital technology, you can do it so much easier at a lower cost with a much better results as well. So just a few of the breakthrough innovation that we’re launching in the market.

They’re all connected. We’ve been on digital technology for thirty years. Nineteen ninety one, we invented connected chemistry. It’s called three d Tracer. In our company, we have 100,000 water systems that are operated, monitored and controlled remotely today.

And that’s growing very fast, which means that we know how the units are operating out there, what’s good, what’s bad, what’s the best performance, how we can help any customer around the world reach that best in class performance that they would like to reach. What’s the performance improvement? What’s the dollar value that’s related to it? And we usually get the share of it as well, which translates into what we call value pricing, which is why we have this strong pricing muscle as well as a company. We measure it in a very disciplined manner.

We call it total value delivered. It’s how much do we help you improve your business performance, uptime in a data center, quality of the food in a food and beverage plant, guest satisfaction in a hotel, how much do we help you in terms of cost performance and how much do we help you in terms of environmental impact, water usage, energy usage and waste generation as well. It all adds up to total value delivered, and we make sure that whatever they invest in what we do, they get it back at least in their own operation. This is TBD at Ecolab. The way we operate, the way we grow within a customer, it’s two dimension.

The first one is what I mentioned before, it’s helping a hotel chain, for instance, or a hyperscaler in data centers to really bring their performance everywhere at every location to their best in class location. But then it’s at the location level is really making sure that we implement all the solutions that they need. It’s a penetration ply. You can see it’s a hotel here. We do the wear washing in the kitchen.

We do the laundry for your linen in your room. We do the pool systems as well. We do the pest elimination. We do the food safety. We do guest satisfaction audits as well, all to make sure that ultimately, guests are satisfied, guests are safe, costs are as low as they can be, and the environmental footprint of that hotel is the lowest possible as well as it can be.

That’s driving what I meant before with best in class, which has been a new approach for our corporate customers ultimately to help them understand what’s the best restaurant in the world, what’s the best data center in the world, what’s the best car manufacturing plant in the world. We serve 1,000,000 of them in 172 countries. We know that, and they want to know it. And this is a huge element of the value we provide to our customers. They can know how far they are from best in class, but most importantly, we can help them get there as well over time, which ultimately helps us grow our share of our market, which is EUR 152,000,000,000 market.

We’re a EUR 16,000,000,000 company with EUR 55,000,000,000 of penetration opportunity, which means customers buying everything that we do or could offer them, but not in ways that are self serving for Ecolab, but in ways that are driving them towards the best in class performance, which is the way we think about it. At the same time, we’re thinking about what’s the future, what are the new segments, the new industries where we can leverage our expertise, our technology in order to keep growing the company by providing value to our customers. And we have three or four key ones that I’d like to share with you. The first one is what we call our global high-tech business. There are two big pillars here, as mentioned before, data centers and the fabs, the microelectronics manufacturers.

Life Sciences, Pharma, I’ll come back to that, and Ecolab Digital, and I’ll cover a few just in a second here. When you think about AI, as mentioned before, in terms of power equivalent to India, water equivalent to The United States. When you think about that power of India, it’s 50 nuclear plants that should come online in the next five years. Well, it’s not going to happen because you need more than five years to build them, obviously. So we need to find different ways to provide that power.

But most importantly, to reduce the power that’s being used to cool data centers in order to use it on the compute side. Again, 40% for cooling, 60% for power for compute. Well, if you can shift that balance, you can have much more to compute while everyone is building as well the power supply that we all need. We see that for us as an opportunity that’s north of EUR 5,000,000,000, which ultimately is helping our customers, the hyperscalers and the chips manufacturers to grow faster while doing what we all need in terms of digital technology on our phones, in our companies, at home or wherever you use that. When you think about the data center, well, it’s been for the last ten years when it really so started to grow.

It was computers in a room that was air conditioned. We’ve been the number one cooling technology company in the world for eighty plus years. That was a very natural area for us to penetrate. And we did that. But now with the power that’s required, so for those new chips, just air conditioning in a room doesn’t work anymore.

So we’ve shifted technology towards directed chip technology, which means you bring a coolant directly on top of a chip, much more complicated. And if you bring together a liquid on a chip in a high powered environment, that’s not exactly the best combination in terms of risk management. Well, we’ve developed technology not only to provide the cooling, but to develop the CDUs, the coolant distribution unit, which is ultimately how you cool the coolant that’s ultimately going to the chip. And we have technology that helps manage the fluid, which is something that we’ve done with three d Tracer as well for a very long time. So ultimately, helping drive uptime higher while reducing the power that’s required for cooling and to shift it towards the compute power as well at the same time.

When you think about the fabs, total different technology, but producing obviously what ends up in the data center. One fab in general requires the water equivalent of 17,000,000 people. That’s a lot. It’s a water business and just a few percentage points is reused in a fab, which means that we’re coming at the limit of how much water we can get to produce those microelectronics chips, and we have a discharge issue as well at the same time if it’s not the right way. So the way we’re working with semi manufacturers is ultimately to help them understand that the new fabs will have to be designed in ways that eliminate the idea of wastewater, where we use and recycle water all the time.

But as mentioned before, it has to be ultra pure water. So that requires a lot of technology to get there. That’s what we’ve been developing for years as well and that we’re providing to that industry for them to ultimately provide produce more chips, more powerful chips with ultra pure water that’s been reused and recycled as well over and over again. This is a very good deal for them, and it’s very high margin business for us as well at the same time. Shifting gear on Life Sciences.

It’s a business that we started in 2017, ’20 ’18, where we brought our expertise in process manufacturing, in health care and digital technology to help the life science industry, which is the pharma industry for us produce safer drugs at a lower cost. It’s been a very good story. We built a CHF 300,000,000 business with it, a 30% margin growing very nicely. It was environmental hygiene, which was a business making sure that where the drugs are produced is a safe environment, clean rooms, processing capabilities, everything that was ultimately touching the drug, but not the drug itself. In 2021, we made a fairly significant investment in Pure Light, which was one of the leading companies during ultrafiltration of drugs.

And we’ve added that to our portfolio. And today, so we have the opportunity to make sure that the environment is safe, the product is safe and done in typical Ecolab way that you can produce safe products at a lower cost, reducing the impact on environment as well. This is our Life Science business. It’s an $800,000,000 business today that’s growing nicely, very nice margins as well with a very good future as well, so within the company. And we’re touching like it was in a hotel before every part of the pharma manufacturing plant.

It can be the clean room, it can be the cleaning in place, it can be the filtration of the product, it can be the ingredient water, it can be the audits as well that are provided in there. It’s the same approach. In a hotel or in a pharma manufacturing plant, the technology and the expertise are completely different, obviously, but the business model is very similar. Last part, Ecolab Digital. We’ve been in digital technology for thirty years when we started in ’ninety one, as I mentioned, so with connected chemistry.

But that’s been game changing, except that for 28 of the thirty years, we did that for free for our customers. It was part of the programs we were providing to our customers. In the last few years, we’ve shifted our model towards what tech companies are doing. Our customers pay for the hardware, control equipment, sensing equipment, remote monitoring, you name it. They pay for software as a subscription, and they pay for subscription for consumption of the subscription software that they are buying as well at the same time.

And in the first quarter, we reported for the first time, our sales. It was an annualized number of EUR $320,000,000 at very high margin, growing 12%. And it’s just the beginning of that whole story to serve the customers that are already using it today. And that’s a multibillion opportunity that we have in front of us. Last but not least, it’s helping us improve our impact in our own operations and in our customers’ operations for the most part.

And really proud that every single year we’ve delivered on our commitment on how much water we’ve had saved, how much energy, how much food, how much value we’ve been generating as well so far with customers. We published that so a few weeks ago, and we’re perfectly on track towards our 2,000,000,000 people being protected by 2,030, enough water for 1,000,000,000 people while generating operating income value for our customers as well. And that leads to great financial performance. You’ve heard about our commitments on top line, on margin, earnings per share as well, making sure that our cash flow conversion remains north of 90%, that’s been very steady for a very long time, a very strong balance sheet and a very clear capital allocation in terms of dividend, investing in the business and last but not least, share buyback. And at the end of the day, we’ll return over EUR 10,000,000,000 of cash to our shareholders over the last ten years and that journey is going to continue.

You can see it’s been very steady the last ten years as well. Nothing is going to change in the years to come. We’ve done that for one hundred and two years and the story is just going to continue. So at the end of the day, I really like where we are in an environment that’s not an easy environment for anyone, but we’re here to support our customers. And the more we support our customers, the better they do, the better we do, the more people we protect, the more natural resources we protect as well at the same time.

And that allows us to return as much as we can to our shareholders as well at the same time. So good story that keeps getting better.

Tim Mulrooney, Analyst, William Blair: That was great, Christophe. Thanks for the overview. And I hope you’ll all join us at the at the breakout room. We just have a couple minutes left. So I’m gonna kick it off with a question, which is yesterday, we had the opportunity to tour the Lowe’s hotel with some some Ecolab folks.

And, you know, I was really struck by example after example of how you’re integrating digital technology. I feel like five years ago when I when I would do one of these Ecolab tours, it was all about the superior chemistry and the superior service. And you guys are emphasizing that, which, you know, of course, is still part of the story. But now it’s also the how how you’re digitally connecting everything and how the customer’s paying for that. And it really struck me because I hear digital, but I didn’t really I wasn’t able to connect it as well until I went on the tour.

I could see it in person. I was wondering if you could share an example or two. I know you talked about digital high level, but maybe drill into an example or two of how you’re really using digital today and, you know, what that means translating that into into, some numbers for us.

Christophe Beck, CEO, Ecolab: It’s been game changing for us when the industry changed during COVID. For one hundred years, hotels and restaurants have been operated the same way. Anyway, not much was changing. The openness from the industry, so to use more technology was not exactly high. That has changed completely during COVID because most people went to other industries.

And at the same time, the consumption habits have changed completely where a third of people staying in a restaurant, well, are not staying in a restaurant anymore because you drive through, you get delivered, or you order from your phone. That was a big impact for the restaurants, for the hotels and for us. Suddenly, digital technology became necessary and game changing We’ve been using that in our industrial businesses for a very long time. We’ve brought it to the hotels and restaurants.

And today, well, we can remote monitor what’s happening in a dish room, in a laundry room, in what’s happening in a pool. You think about the pool here without going too much into detail. People don’t always go showering. So before they get in a pool, a lot of fun things are happening as well over there. Well, you don’t want to hear about those things, especially so just after lunch.

But our technology today, well, you can now what’s the quality of the water in any pool, in any hotel around the world, you can adjust it and making sure that it’s always healthy, and it reduces usually the labor that’s required for it as well because the hotel needs to do it as well. Usually, while you’re in your control room, you can check all the pools around the world, all the dish room around the world, making sure the linens are done the right way as well, which is making sure that guest satisfaction is high, you reduce the cost and you reduce water and energy usage while you reduce the labor as well at the same time because that labor doesn’t exist anymore. So it’s been a big change, and it’s the beginning of that journey, but the promising one.

Tim Mulrooney, Analyst, William Blair: That yeah. That’s interesting. I appreciate you making that connection. What stimulated you guys to go down this path was the labor shortages that all these hotels and restaurants are facing right now. It’s like they don’t have a choice.

They need to, and you’re partnering with them in a real way to reduce that.

Christophe Beck, CEO, Ecolab: And you get better results.

Tim Mulrooney, Analyst, William Blair: And you get better results. And I imagine had is there any data around the retention rates, customer retention rates improve when you implement your digital solutions at a customer?

Christophe Beck, CEO, Ecolab: Is it too early to say? Interestingly enough, so coming back to the pool, it’s the second highest driver of guest satisfaction in a hotel. The pool? The pool. So if that’s done well, well, if the pool is closed, that’s the bigger problem, obviously.

But if it’s an unhealthy pool, you feel it. You feel it in your skin. You feel it in your eyes. You feel it with your kids as well. This is the second highest on the list.

This is what we do. It’s water. It’s infection prevention. It’s digital technology. It’s Ecolab at its best, and that’s one example in one hotel.

Tim Mulrooney, Analyst, William Blair: That’s perfect.

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