Ecolab(US:ECL)2020-10-27 20:34Financial Data and Key Metrics Changes - The third quarter results showed significant improvement from the second quarter, with fixed currency sales and earnings per share declines narrowing as the company leveraged recovering customer end-markets [6][12] - Healthcare and Life Sciences segment sales increased by 29%, while the Industrial segment experienced a modest sales decline of 3% but achieved 18% operating income growth [12][13] Business Line Data and Key Metrics Changes - The Healthcare and Life Sciences segment benefited from strong cleaning and sanitizing demand, along with several large one-time sanitizer orders [7] - The Institutional division improved from the second quarter as consumer activity in restaurants, hotels, and entertainment facilities began to recover, although foot traffic remained below last year due to COVID-related restrictions [8] Market Data and Key Metrics Changes - Over 90% of restaurants in the U.S. were open by the end of the third quarter, operating at approximately 55% capacity [40] - The water business improved from a decline of 5% to a decline of 2% in Q3, with expectations for further improvement in upcoming quarters [76] Company Strategy and Development Direction - The company remains focused on maximizing its post-COVID position, believing that long-term growth opportunities remain robust due to its strong market positions and focus on lowering customer operating costs [10][16] - Investments in hand care and sanitizer capacity are expected to pay off, alongside continued digital investments and technology deployment to enhance customer support [9][14] Management's Comments on Operating Environment and Future Outlook - Management expects overall improvement to continue in Q4, albeit at a slower pace due to the anticipated second wave of COVID-19 [9][13] - The company is confident in its ability to exceed 2019 earnings per share in 2021, driven by market recovery and share gains [21][22] Other Important Information - The company has increased its cost savings target for 2020 from $270 million to $335 million, with a significant portion expected to benefit 2021 [46][47] - The Ecolab Science Certified program aims to reassure consumers about safety in restaurants and hotels, receiving positive feedback from customers [34] Q&A Session Summary Question: When does the company expect to return to 2019 EPS or better? - Management is not providing a specific forecast but believes they are in good shape to exceed 2019 EPS in 2021, with several factors contributing to this confidence [20][21] Question: How did new business wins trend through the quarter? - New business has been performing well, with year-over-year growth tracking similarly to pre-COVID levels, driven by customer demand for expertise in dealing with COVID [23][25] Question: What updates are there on capacity for hand care and sanitizers? - The company has significantly increased capacity for hand sanitizer production, which is now coming online to meet the tripled demand [31][32] Question: How does the company view the market share gain environment? - Management believes they are gaining share in the Institutional segment, outperforming competitors despite the challenges posed by COVID [40][70] Question: What are the expectations for the Institutional business post-COVID? - While there will be lingering effects from COVID, management is confident that the Institutional business will recover and continue to grow, particularly in the restaurant sector [49][51]