Growth Investments and 20% Margin Target
Q: Will growth investments delay reaching 20% operating margin target?
A: Christophe Beck expressed confidence that despite increased growth investments, Ecolab will achieve the 20% operating margin in the next few years. He emphasized that the company is accelerating investments in three growth drivers—sales force expansion, digital and AI technologies, and capabilities to serve as one Ecolab—while keeping a close eye on underlying productivity.

Components of Growth: Pricing and Volume
Q: Are pricing and volume growth on track amid macro conditions?
A: Beck confirmed that Ecolab is on track with 2% to 3% pricing in 2024. He is optimistic about volume growth of 1% to 2%, driven by strong new business and investments in teams and technology. He noted that macro conditions remain unpredictable but currently feels good about the outlook.

Surgical Divestiture Impact
Q: What is the impact of selling the Surgical Solutions business?
A: Beck stated that the sale to Medline is a great transaction and hopes to close quickly. The company will focus on building its infection prevention business with typical Ecolab models involving machines, consumables, and digital technology.

Timing and Areas of Investment
Q: Where are the growth investments being focused?
A: Investments are primarily behind growth drivers such as data centers and semiconductors, digital and AI technologies, and capabilities to serve as one Ecolab. Beck mentioned significant opportunities in high-tech markets and digital capabilities that offer high returns.

Industrial and Institutional Volume Trends
Q: How are industrial and institutional volumes trending?
A: Overall company volume grew 2%. Institutional volumes were up around 5% to 6%, driven by market share gains despite foot traffic not fully recovering. Industrial volumes were flat but positive excluding the paper segment, indicating a good position even with soft manufacturing demand.

Life Sciences Business Momentum
Q: Is the Life Sciences business gaining momentum?
A: Beck noted that the Life Sciences division is growing despite the market being down double digits. The company is investing in capabilities and capacities, aiming for this business to become a multi-billion-dollar segment with margins exceeding 20%.

Health Care Business Changes
Q: Are there more structural changes after selling Surgical Solutions?
A: Beck indicated no significant additional changes. The focus is on building the infection prevention business through internal innovation and potential small acquisitions, creating a great health care business over time.

Pest Elimination Business Strategy
Q: What are the strategic plans for the Pest Elimination business?
A: Beck highlighted the Pest Elimination business's strong performance and plans to invest in digital capabilities. The company will pursue organic growth and small bolt-on acquisitions to expand this high-growth, high-margin business.

DPC Cost Trends
Q: How are Delivered Product Costs trending?
A: Scott Kirkland reported that DPC decreased in the upper single digits in Q1 as expected. Costs are expected to continue easing but will remain high compared to pre-pandemic levels, with favorability diminishing from high single digits to lower single digits by Q3.

PFAS Opportunities
Q: What is Ecolab's position on PFAS opportunities?
A: Beck stated that Ecolab is working closely with customers on PFAS purification, focusing on commercial and B2B solutions. The company possesses the technology and expertise but aims to proceed safely and profitably without engaging in political fray.