Lawrence Alexander

Lawrence Alexander observed that Ecolab's organic growth is meeting or exceeding expectations, while FX tailwinds have doubled. He asked about the 'gives and takes' and what levers Ecolab has to manage if currency movements become unfavorable next year.

Answer

Scott Kirkland, Ecolab's CFO, confirmed that underlying performance remains strong, with double-digit EPS growth even with FX impacts. He noted that in Q3, FX was in line with expectations, but the year-over-year SG&A comparison offset some of the FX benefit. Kirkland expects SG&A to normalize in Q4 and mentioned overcoming low to mid-single-digit commodity cost growth. Christophe Beck, Chairman and CEO, added that while 2025 saw unexpected FX headwinds and product cost benefits, the company delivered on its promises. He expressed confidence in 2026's trajectory, expecting 3-4% top-line growth, positive volume, and 2-3% pricing to drive 12-15% EPS growth and at least 100 basis points of operating income margin expansion.

Lawrence Alexander asked about the factors contributing to Ecolab's operating results, noting that organic growth is meeting or exceeding expectations while FX provides a double tailwind compared to last year, and inquired about levers available if currency trends reverse next year.

Answer

Scott Kirkland, CFO of Ecolab, confirmed that underlying performance remains strong, with double-digit EPS growth even with FX. He explained that in Q3, the FX tailwind was offset by the year-over-year SG&A comp and rising commodity costs (low to mid-single digits). Kirkland noted that SG&A is normalizing, and the underlying growth is robust.