藝康 (ECL) 2023 Q3 法說會逐字稿

Greetings. Welcome to the Ecolab Third Quarter 2023 Earnings Release Conference Call.

問候。歡迎參加藝康 2023 年第三季財報發布電話會議。

(Operator Instructions)

（操作員說明）

As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Andrew Hedberg, Vice President, Investor Relations for Ecolab. Thank you, Mr. Hedberg. You may begin.

提醒一下，本次會議正在錄製中。現在我很高興向您介紹主持人，藝康投資者關係副總裁安德魯·赫德伯格 (Andrew Hedberg)。謝謝你，赫德伯格先生。你可以開始了。

Thank you, and hello, everyone, and welcome to Ecolab's third 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 the quarter results are available on Ecolab's website at ecolab.com/investor.

謝謝大家，大家好，歡迎參加藝康第三季電話會議。今天與我在一起的有 Ecolab 董事長兼執行長 Christophe Beck；和我們的財務長斯科特柯克蘭。有關我們業績的討論、收益發布以及引用季度業績的幻燈片，請訪問 Ecolab 網站：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 the actual results could differ materially from those projected. Factors that could cause actual results to differ are described under the Risk Factors section in our most recent Form 10-K and our posted materials. We also refer you to the supplemental diluted earnings per share information in the release.

請花一點時間閱讀這些資料中的警告聲明，其中指出本次電話會議和相關補充資料包括對未來績效的估計。這些均為前瞻性陳述，實際結果可能與預測有重大差異。我們最新的表格 10-K 和我們發布的資料中的風險因素部分描述了可能導致實際結果不同的因素。我們也請您參閱新聞稿中的補充稀釋每股收益資訊。

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

說到這裡，我想把電話轉給 Christophe Beck，徵求他的意見。

Thank you so much, Andy, and welcome to everyone on the call. Building on our momentum with strong and reliable growth. That's the headline for Ecolab third quarter. Thanks to exceptional execution by our team, Ecolab delivered a very strong quarter as our momentum continued with 7% organic sales growth, which was actually exactly as expected and 18% growth in adjusted earnings per share reaching the high end of our expected range.

非常感謝你，安迪，歡迎大家參加電話會議。以強勁而可靠的成長來鞏固我們的勢頭。這是藝康第三季的頭條新聞。由於我們團隊的出色執行力，藝康實現了非常強勁的季度業績，我們的有機銷售增長了7%，這實際上完全符合預期，調整後每股收益增長了18%，達到了我們預期範圍的上限。

Against unpredictable macro conditions, we drove continued strong pricing, new business, accelerated volume trends and continued robust margin expansion. Our focus remains on offense, which we are best at, continuing to fuel strong and consistent double-digit earnings per share growth.

在不可預測的宏觀環境下，我們推動了持續強勁的定價、新業務、加速的銷售趨勢和持續強勁的利潤擴張。我們的重點仍然是進攻，這是我們最擅長的，繼續推動每股收益強勁且持續的兩位數成長。

We maintained strong organic sales growth with pricing increasing by 7%. This increase reflects both the value-based pricing we put in place last year and the new pricing we've implemented this year reflecting the enhanced value we offer to our customers.

我們維持強勁的有機銷售成長，定價上漲 7%。這一成長既反映了我們去年實施的基於價值的定價，也反映了我們今年實施的新定價，反映了我們為客戶提供的更高價值。

Our volume trends continue to strengthen as well, which is great news, with new business helping to accelerate volumes despite softening in global end-market demand. Organic operating income margin continued its impressive expansion, up 160 basis points compared to last year, reaching 15.5%. This notable progress reinforces our path towards achieving our long-term margin goal of 20%.

我們的銷售趨勢也持續加強，這是個好消息，儘管全球終端市場需求疲軟，但新業務有助於加速銷售。有機營業利潤率繼續保持令人印象深刻的擴張，與去年相比增長了 160 個基點，達到 15.5%。這項顯著進展鞏固了我們實現 20% 長期利潤率目標的道路。

In the third quarter, our adjusted gross margin expanded 360 basis points to 41.3%. This strong expansion is a result of our value-based pricing strategy, improved volume trends and a slight decline in delivered product costs. While global energy prices remain dynamic, we're confident in our value-based pricing strategy and is absolutely necessary, our capability to implement energy surcharges.

第三季度，我們調整後的毛利率擴大了 360 個基點，達到 41.3%。這種強勁的擴張是我們基於價值的定價策略、銷售趨勢改善以及交付產品成本略有下降的結果。儘管全球能源價格仍然動態，但我們對基於價值的定價策略充滿信心，而且我們實施能源附加費的能力也是絕對必要的。

We continue to take a prudent stance on the trajectory of delivered product costs as costs remain up nearly 40% compared to pre-inflation levels. Assuming the current high energy price environment persists, and our cost ease only slightly in 2024, we continue to expect very strong gross margin expansion in the quarters ahead. This will help us make progress in achieving our historical 44% gross margin and our 20% OI margin target over the next few years.

我們繼續對交付產品成本的軌跡採取審慎立場，因為與通貨膨脹前的水平相比，成本仍高出近 40%。假設當前的高能源價格環境持續存在，並且我們的成本在 2024 年僅略有下降，我們繼續預計未來幾季的毛利率將出現非常強勁的成長。這將有助於我們在未來幾年實現 44% 的歷史毛利率和 20% 的 OI 利潤率目標方面取得進展。

Underlying productivity also remains strong as we continue to leverage our leading digital capabilities. As expected, SG&A expense was relatively stable versus second quarter levels.

隨著我們繼續利用領先的數位能力，基礎生產力也保持強勁。正如預期的那樣，SG&A 費用與第二季度水準相比相對穩定。

The year-over-year comparison reflects the rebuild of incentive-based compensation, a result of our strong sales and earnings' growth and the strategic investments in our growth engines. We also expect SG&A dollars in Q4 to remain very consistent with second and third quarter levels.

同比比較反映了基於​​激勵的薪酬的重建，這是我們強勁的銷售和盈利增長以及對增長引擎的戰略投資的結果。我們也預期第四季的銷售、行政管理費用將與第二季和第三季的水平保持非常一致。

Our performance further strengthened across our businesses. The highlight was Institutional & Specialty. We grew organic sales double digits and organic operating income, 28%. Organic OI margin was up 260 basis points to 19.3%, approaching its historical 20% level.

我們各個業務的業績進一步增強。亮點是機構和專業。我們的有機銷售額成長了兩位數，有機營業收入成長了 28%。有機 OI 利潤率上升 260 個基點，達到 19.3%，接近 20% 的歷史水準。

Our Industrial segment also performed well, especially comparing to an extremely strong Q3 last year, led by attractive growth in Food & Beverage and in Water as our unique ability to bring end-to-end Water and Hygiene technologies to customers continues to drive strong share gains in this segment.

我們的工業部門也表現良好，特別是與去年極其強勁的第三季度相比，食品和飲料和水領域的成長引人注目，因為我們為客戶提供端到端水和衛生技術的獨特能力繼續推動強勁的份額該細分市場的收益。

Operating income growth is the bit in the third quarter, reflecting the incentive-based compensation rebuild as mentioned in the last call. And importantly, we expect this segment's operating income to return to double-digit growth in Q4.

第三季營業收入略有成長，反映出上次電話會議中提到的基於激勵的薪酬重建。重要的是，我們預計該部門的營業收入將在第四季度恢復兩位數成長。

Our healthcare bifurcation strategy is progressing well. Strong pricing and new business had to improve underlying sales growth and operating income. The business also benefited from larger than normal surgical sales, which is not expected to recur. While we are pleased with our progress, delivering sustainable and profitable growth remains a focus for me and for our team.

我們的醫療保健分叉戰略進展順利。強勁的定價和新業務必須改善潛在的銷售成長和營業收入。該業務還受益於高於正常的手術銷售，預計這種情況不會再次發生。雖然我們對我們的進展感到滿意，但實現可持續和盈利的成長仍然是我和我們團隊的重點。

Life Sciences growth also improved to mid-single digits despite continued short-term pressure for everyone in this market as our team continued to win share. While we expect the market to remain under pressure for the next few quarters, our ongoing investments in additional new product capacity and keen capabilities will allow us to capitalize on attractive long-term high-growth, high-margin opportunities. In summary, in the third quarter, we delivered as expected with strong sales and solid earnings' growth.

儘管隨著我們的團隊繼續贏得份額，生命科學市場的每個人都面臨著持續的短期壓力，但其成長也提高到了中個位數。雖然我們預計未來幾季市場仍將面臨壓力，但我們對額外新產品產能和敏銳能力的持續投資將使我們能夠利用有吸引力的長期高成長、高利潤機會。總而言之，第三季我們的業績符合預期，銷售強勁，獲利成長穩健。

Now looking ahead, we expect our strong performance to continue in the fourth quarter with adjusted earnings per share increasing 17% to 24% versus last year, which is above the mid-teens growth we had guided to during our second quarter call and will bring the full year EPS north of 2019's EPS. This performance is expected to be driven by new pricing, volume growth and robust gross margin expansion expected to be up 250 to 300 basis points versus last year.

現在展望未來，我們預計第四季將繼續保持強勁的業績，調整後每股收益較去年增長17% 至24%，高於我們在第二季度電話會議中指導的中位數增長，並將帶來全年每股收益高於 2019 年每股收益。這一業績預計將受到新定價、銷售成長和強勁毛利率擴張的推動，毛利率預計將比去年增長 250 至 300 個基點。

As we shared with you at our Investor Day in September, we see continued strong momentum in '24. Even as global uncertainty remains with softening macro demand, we continue to expect mid-teens or better growth in adjusted earnings per share in 2024. As always, we'll remain good stewards of capital by continuing to invest in the business, increasing our dividend, reducing leverage and returning cash to shareholders. Most importantly, with the best team, science and capabilities in the industry, we will continue to grow our share of the stable and high-quality $152 billion market we serve.

正如我們在 9 月的投資者日與您分享的那樣，我們看到 24 年持續強勁的勢頭。儘管宏觀需求疲軟，全球不確定性依然存在，但我們仍預計2024 年調整後每股收益將實現十幾歲左右或更好的增長。一如既往，我們將透過繼續投資業務、增加股息來保持良好的資本管家，降低槓桿並向股東返還現金。最重要的是，憑藉業內最優秀的團隊、科學技術和能力，我們將繼續擴大我們所服務的穩定且高品質的 1520 億美元市場份額。

I believe that Ecolab's long-term fundamentals are stronger than ever and I am confident in our outlook for continued strong performance as we work to deliver superior shareholder returns. So thank you for your continued support and your investment in Ecolab.

我相信藝康的長期基本面比以往任何時候都更加強勁，並且我對我們在努力提供卓越股東回報的過程中持續保持強勁業績的前景充滿信心。感謝您對藝康的持續支持與投資。

I look forward to your questions.

我期待您的提問。

Thanks, Christophe. That concludes our formal remarks. Operator, would you please begin the question-and-answer period?

謝謝，克里斯托夫。我們的正式發言到此結束。接線生，請開始問答環節好嗎？

(Operator Instructions)

（操作員說明）

Our first question comes from the line of Tim Mulrooney with William Blair.

我們的第一個問題來自蒂姆·馬爾魯尼和威廉·布萊爾的對話。

So I see you eclipse 19% OI margin in Institutional in the third quarter, which was great to see. If you go back to pre-pandemic times, you're doing about 21% OI margin every year on an annual basis. I think there's some debate amongst the investor community about whether or not Ecolab will ever get back to that 21% OI margin days or if the business has structurally changed. I'd love to get your perspective on that, Christophe, how long that might take particularly given the good momentum that we've seen this quarter?

所以我看到第三季機構投資者的 OI 利潤率超過了 19%，這真是太好了。如果你回到疫情前的時代，你每年的 OI 利潤率約為 21%。我認為投資者界對於 Ecolab 是否會回到 21% 的 OI 保證金天數或業務是否發生結構性變化存在一些爭論。我很想聽聽您對此的看法，Christophe，考慮到我們本季看到的良好勢頭，這可能需要多長時間？

Thank you, Tim. I have no doubt in my mind that we will get there. We have a great team running a great business on a great trajectory. And as mentioned many times, Tim, the P&L of I&S will end up in a better place post the cycle versus previous years like 2019. Just for perspective, so in Q4, as mentioned during Investor Day as well, our OI dollar will already be back to the 2019 level. So I really expect to cross that 20%, 21% line in the next few years while we drive new business, innovation, price, the advantage of the new organization as well with the focus on sales and service and leverage as well, digital technology, as we've done over the past few years. So of all the opportunities we have in front of us, all the challenges that we might be facing, I think Institutional is going to be probably one of the best promises that we have ahead of us.

謝謝你，提姆。我毫不懷疑我們會到達那裡。我們擁有一支優秀的團隊，在良好的軌道上經營著一家偉大的企業。正如蒂姆多次提到的，與前幾年（如2019 年）相比，I&S 的損益表在周期結束後將處於更好的位置。僅從長遠來看，因此在第四季度，正如在投資者日期間提到的那樣，我們的OI 美元將已經是回到2019年的水平。因此，我真的希望在未來幾年內能夠跨越 20%、21% 的界限，同時我們將推動新業務、創新、價格、新組織的優勢以及重點關注銷售和服務以及槓桿、數位技術，正如我們過去幾年所做的那樣。因此，在我們面前的所有機會、我們可能面臨的所有挑戰中，我認為制度可能是我們面臨的最佳承諾之一。

Our next question comes from the line of Seth Weber with Wells Fargo.

我們的下一個問題來自富國銀行的賽斯‧韋伯 (Seth Weber)。

You mentioned a few times in the slides, in the release and your comments just about new business wins. I'm just -- can you talk to the selling environment, your sort of traction with new wins and how we should think about new ads going forward?

您在幻燈片、新聞稿和評論中多次提到了新業務的勝利。我只是——你能談談銷售環境、你對新勝利的吸引力以及我們應該如何考慮未來的新廣告嗎？

Thank you, Seth. Well, selling new business is what we're best at and what we like the most doing. So we shift to offense over the past few quarters is delivering results because our team is really focused on driving new business with our customers. In more difficult environment, and it's always been the case at Ecolab, well, our customers are looking for ways to improve their operating performance, which is what we've always done for them and that they need the most, right now. So they're very receptive to what we can do as well for them.

謝謝你，賽斯。嗯，銷售新業務是我們最擅長也最喜歡做的事。因此，我們在過去幾個季度的進攻正在取得成果，因為我們的團隊真正專注於與客戶推動新業務。在更困難的環境中，藝康的情況一直如此，我們的客戶正在尋找提高其營運績效的方法，這是我們一直為他們所做的事情，也是他們現在最需要的。因此，他們也非常樂意接受我們為他們所做的事情。

At the same time, we're bringing as well all the offerings from the company, especially Water and Hygiene in Industrial segments, but also in Institutional which are very well received by our customers, and we have innovation as well, which has made a step change over the last few years, which are addressing customer challenges or opportunities that they have.

同時，我們也帶來了公司的所有產品，特別是工業領域的水和衛生產品，而且還有機構領域的產品，這些產品受到了我們客戶的好評，我們也有創新，這使得過去幾年發生的重大變化，正在解決客戶面臨的挑戰或機會。

So all in, the team focused on what they truly like with the right tools, right innovation, right new products, and customers that are open to what we can do for them, speak, improving their operating performance. Ultimately, that's all driving better performance in terms of new business, which is really good.

總而言之，團隊專注於他們真正喜歡的東西，使用正確的工具、正確的創新、正確的新產品，以及對我們能為他們做什麼、說話、提高他們的營運績效持開放態度的客戶。最終，這一切都推動了新業務的更好表現，這真的很好。

Our next question comes from the line of Josh Spector with UBS.

我們的下一個問題來自瑞銀集團的 Josh Spector。

Christophe, and a question along the similar lines and particularly just related with just volume expectations. I mean, you were pretty confident a couple of months ago that you're going to deliver positive volumes in 3Q. I guess, it rounds down to 0 or maybe flattish is the best way to describe how that came in. You're talking about positive volume in the fourth quarter. I guess, I don't know, did 3Q change versus your expectations of where it would come in? And the backlog combined with -- or the new wins combined with base earnings, I guess, how do you envision volume moving into early next year?

Christophe，還有一個類似的問題，特別是與數量預期相關的問題。我的意思是，幾個月前您非常有信心在第三季度實現正銷量。我想，它四捨五入到 0 或可能持平是描述其產生方式的最佳方式。你談論的是第四季度的正成交量。我想，我不知道，第三季的變化是否超出了你對它的預期？我想，積壓訂單與基本收益相結合，或者新的勝利與基本收益相結合，您如何看待明年初的銷售？

Volume is the most important driver, obviously, for us. And Q3 happened pretty much as expected. We can talk about rounding, obviously here, but we were in positive territory, which is good. And if we exclude Europe, which is the most difficult place in terms of volume, we are at plus 1% already. And I feel confident that in Q4, we will have a 1% volume growth overall also for the company. So when I look at the trajectory that we're having on volume, especially with all the pricing that we've done over the past few years and in a market that's not exactly booming right now. I feel really good with what we're doing, where we're heading.

顯然，對我們來說，成交量是最重要的驅動因素。第三季的情況幾乎符合預期。我們可以談論四捨五入，顯然在這裡，但我們處於正值領域，這很好。如果我們排除歐洲（就數量而言這是最困難的地方），我們已經增加了 1%。我相信，在第四季度，我們公司的整體銷量也將成長 1%。因此，當我觀察我們的銷售軌跡時，特別是考慮到我們在過去幾年中以及在目前不完全繁榮的市場中所做的所有定價。我對我們正在做的事情和我們前進的方向感覺非常好。

And to your point, so for '24, while it's the best way we can close the year with good volume momentum in order to start '24 in whatever environment we're going to find with a company that's having good sales momentum, which is our #1 priority as a company right now.

就你的觀點而言，對於24 年來說，雖然這是我們以良好的銷售勢頭結束這一年的最佳方式，以便在任何環境下開始24 年，但我們將找到一家具有良好銷售勢頭的公司，即作為一家公司，我們目前的首要任務是。

Our next question is from the line of Mike Harrison with Seaport Research Partners.

我們的下一個問題來自 Seaport Research Partners 的 Mike Harrison。

Congratulations on a nice quarter here. Just in terms of the Healthcare and Life Sciences business, I'm curious, if we saw any of the benefits from some of the changes that you're making on the Healthcare side of that business already in Q3? Or are those actions still to come? And then just curious on the onetime 6% sales benefit, did that also help margins come in higher? Or was that kind of an average incremental margin contribution?

恭喜您度過了一個愉快的季度。就醫療保健和生命科學業務而言，我很好奇，我們是否看到了您在第三季度對該業務的醫療保健方面所做的一些改變帶來的任何好處？或者這些行動還會發生嗎？然後只是好奇曾經 6% 的銷售收益，這是否也有助於提高利潤率？還是這是一種平均增量利潤貢獻？

Thank you for your nice comment, Mike. Three comments on your question. So focused on Healthcare, not Life Science, I know that they all combined, obviously, but 2 very different stories as we know. So, first, if we saw some results of the organizational changes in Q3, the short answer is yes, but it's early.

謝謝你的好評論，麥克。針對你的問題提出三點意見。因此專注於醫療保健，而不是生命科學，我知道它們顯然都結合在一起，但據我們所知，這是兩個截然不同的故事。因此，首先，如果我們看到第三季組織變革的一些結果，簡短的答案是肯定的，但現在還為時過早。

I've been really impressed with how the team has executed this bifurcation, truly leveraging the market strength, the breadth, the critical mass of Institutional, both in terms of selling to new customers or existing Institutional customers, the healthcare portfolio and at the same time, getting the cost down. The team has moved very fast, very well, and I'm really pleased with where we are right now. But that being said, it's very early in the process. So it's going to leverage as well or lead to better results in the quarters to come. There's still a lot of work that remains, but I like the progression. It's going to be always better so as we move forward.

我對團隊如何執行這種分叉印象深刻，真正利用了機構的市場實力、廣度和臨界質量，無論是在向新客戶還是現有機構客戶、醫療保健產品組合還是在銷售方面時間，降低成本。團隊進展得非常快、非常好，我對我們現在的處境非常滿意。但話雖這麼說，現在還處於早期階段。因此，它也將在未來幾季發揮槓桿作用或帶來更好的業績。還有很多工作要做，但我喜歡這個進度。隨著我們不斷前進，一切都會變得更好。

Now the last point on the onetime sale was related to a contractual commitment that we had to deliver by the end of the third quarter. If you strip that out, Healthcare had kind of low single type of growth, which is better than in the past, but probably what we're going to see so in the next immediate quarters until we can truly accelerate by leveraging the power of the Institution.

現在，一次性銷售的最後一點與我們必須在第三季末之前交付的合約承諾有關。如果剔除這一點，醫療保健行業的單一類型增長較低，這比過去要好，但我們可能會在接下來的幾個季度中看到這一點，直到我們能夠通過利用醫療保健的力量真正加速增長。機構。

But overall, I like the progress that we're making in Healthcare, but let me be very clear. So I've not been happy with the performance of Healthcare for many years. I'm really happy with what the team is doing now in terms of transformation, early results, more is to come and more work is also required to get to the place that we all want to be with that business.

但總的來說，我喜歡我們在醫療保健領域取得的進展，但讓我說得非常清楚。所以多年來我對醫療保健的表現一直不滿意。我對團隊現在在轉型、早期成果方面所做的事情感到非常滿意，未來還會有更多的工作，還需要做更多的工作才能達到我們都希望這項業務達到的目標。

Our next question is from the line of David Begleiter with Deutsche Bank.

我們的下一個問題來自德意志銀行的 David Begleiter。

A very nice quarter, Christophe and team. Just on the delivered product costs, they came in below your expectations or better than your expectations. What drove that? And what are your expectations for Q4?

克里斯托夫和團隊，這是一個非常美好的季度。僅就交付的產品成本而言，它們低於您的預期或優於您的預期。是什麼推動了這一點？您對第四季有何期望？

So DPC or delivered product cost was roughly 3% down versus last year. A little bit better than what we had expected. It's always a very broad mixed bag, as you know. So we have 10,000 raw materials that we buy. So they didn't all go in the same direction, obviously. So some easing on the market. At the same time, our supply chain team speak, procurement team did also some remarkable work as well with our partner suppliers. So both together led to this 3% easing versus last year. Keeping in mind that our costs are still 40% higher than where they used to be pre-inflation. That's important to keep in mind.

因此，DPC 或交付產品成本比去年下降了約 3%。比我們預期的好一點。如您所知，它始終是一個非常廣泛的混合包。所以我們買了 10,000 種原料。所以顯然，他們並沒有都朝著同一個方向前進。所以市場上有一些寬鬆。同時，我們的供應鏈團隊、採購團隊也與我們的合作供應商一起做了一些出色的工作。因此，兩者共同導致了與去年相比 3% 的寬鬆。請記住，我們的成本仍比通貨膨脹前高出 40%。記住這一點很重要。

I expect kind of the same type of costs for Q4, so kind of a similar easing versus the prior year. And I expect basically so those costs to stay similar in the quarters to come, which will mean so the slight easing versus '23 when we talk about '24. So I'm not banking on big improvements in the quarters to come. And if they come, well, we will all benefit from them.

我預計第四季的成本將與去年相同，因此與去年相比也會有類似的寬鬆政策。我預計這些成本在未來幾季基本上會保持相似，這意味著當我們談論「24」時，與「23」相比會略有放鬆。因此，我並不指望未來幾季會有重大改進。如果他們來了，我們都會從中受益。

Next question is from the line of Jeff Zekauskas with JPMorgan.

下一個問題來自摩根大通的 Jeff Zekauskas。

Ecolab buys its raw materials sometimes monthly, sometimes quarterly, sometimes annually. So raw materials have moved down through the course of the year, but it may be that the timing of your contractual agreements has slowed the benefits for Ecolab. Can you talk about how you purchase your raw materials in terms of the way raw materials are repriced? That is, should we expect different incremental changes on a 6-month basis or a 3-month basis or an annual basis?

藝康有時每月、有時每季、有時每年購買原料。因此，原材料在這一年中有所下降，但合約協議的時間表可能會減緩藝康的收益。您能從原料重新定價的方式談談您是如何採購原料的嗎？也就是說，我們是否應該預期每 6 個月、3 個月或每年會有不同的增量變化？

Well, I have 2 ways to answer your questions, in a complicated way or in a simple way, Jeff. So I'll go for the simple way.

好吧，我有兩種方法來回答你的問題，一種是複雜的方式，一種是簡單的方式，傑夫。所以我會採用簡單的方法。

You're right that depending on the raw materials, it's monthly, some quarterly, some annually with different types of contractual agreements.

你是對的，根據原料的不同，有的按月，有的按季度，有的按年，有不同類型的合約協議。

I think we have a very good team. We have a new leadership as well who is doing an exceptional work, by the way, so on procurement.

我認為我們有一支非常好的團隊。順便說一句，我們還有一個新的領導層，他在採購方面的工作非常出色。

The short way to explain it is, usually, we have a 2 or 3 quarter lag between sort of the market-to-market price changes up or down. By the way, that impact 2 or 3 quarters down the road, our P&L. That's the rule of thumb that I'm using and that you should be using as well.

簡而言之，通常情況下，市場價格的上漲或下跌之間存在 2 或 3 個季度的滯後。順便說一句，這會影響未來兩、三個季度的損益表。這是我正在使用的經驗法則，您也應該使用。

Our next question is from the line of John McNulty with BMO Capital Markets.

我們的下一個問題來自 BMO 資本市場的 John McNulty。

So the Industrial business, I guess, I was a little surprised to not see a little bit better margin lift just given that you have gotten some good pricing there and the raw materials does look like are starting to come off. So I guess, can -- one, can you help us to think about what the volumes were there?

因此，我想，我對工業業務沒有看到更好的利潤率提升感到有點驚訝，因為你在那裡獲得了一些不錯的定價，而且原材料看起來確實開始下降。所以我想，第一，你能幫我們想想那裡有哪些卷嗎？

And then do you feel like we're at a bottom in terms of the volumes for that business? And maybe we start to see things level off a bit? Or is there more to kind of think about in terms of concerns going forward? How would you frame that?

那麼您是否覺得我們的業務量已觸底？也許我們開始看到事情趨於平穩？或者在未來的擔憂方面還有更多需要考慮的地方嗎？你會如何建構它？

Thank you, John. Well, Industrial is in a very good place, actually. But I'd like to ask Scott maybe to give some perspective on margins' evolution.

謝謝你，約翰。事實上，工業界處於一個非常好的位置。但我想請斯科特對利潤率的演變給一些看法。

Yes, happy to, Christophe. So yes, as you're referring to the Industrial high growth was at 8% but the growth rates are really impacted by a couple of things. Certainly, there's a base comparison to last year. If you look at this on a 2-year basis, that business is improving. And then also, as we spoke to on the SG&A, they're impacted by the incentive comp given the strong performance they've had in the year. But overall, in that business, as Christophe sort of referenced, that the strong pricing that we delivered this year, we continue to add new pricing. And now as we start to see that DPC easing modestly, and there was certainly the biggest impact by that but on a dollar basis, that OI really remained very strong and I think we'll continue to improve off these levels.

是的，很高興，克里斯托夫。所以，是的，正如您所指的工業高成長率為 8%，但成長率確實受到一些因素的影響。當然，與去年有一個基礎比較。如果你以兩年為基礎來看的話，你會發現這項業務正在改善。此外，正如我們在 SG&A 方面談到的那樣，鑑於他們今年的強勁表現，他們受到了激勵補償的影響。但總的來說，在該業務中，正如克里斯托夫所提到的，我們今年提供的強勁定價，我們繼續增加新的定價。現在，當我們開始看到 DPC 溫和放鬆時，這無疑產生了最大的影響，但以美元為基礎，OI 確實仍然非常強勁，我認為我們將繼續改善這些水平。

But really, as Christophe mentioned, the opening, expect that the growth to return to double-digit OI growth in the fourth quarter, and you'll see the marginal impact on that as well.

但實際上，正如 Christophe 開頭提到的那樣，預計 OI 成長將在第四季度恢復兩位數成長，您也會看到對此的邊際影響。

Yes. As mentioned early on, John, I like a lot the performance of Industrial for the past few years, and that's going to be even more true in the years to come. If you strip out that incentive-based compensation, so the OI growth would be in the upper teens, which is what you're going to see in the fourth quarter as well. So it was kind of a 1-quarter story underlying our performance very strong.

是的。正如之前提到的，約翰，我非常喜歡工業公司過去幾年的表現，在未來幾年更是如此。如果剔除基於激勵的薪酬，那麼 OI 的成長將達到十幾歲，這也是您將在第四季度看到的情況。所以這是一個 1 季度的故事，也是我們表現非常強勁的基礎。

Our next question comes from the line of Manav Patnaik with Barclays.

我們的下一個問題來自巴克萊銀行的馬納夫·帕特奈克 (Manav Patnaik)。

Just a two-parter, Christophe. So in the pricing, firstly, I think in terms of what you already having things that they roll through, I think you get mid-single-digit pricing next year. But just curious on how you feel like you could keep pushing the pricing dynamic? And then just a quick follow-up. Was the new sales pipeline that you're really confident on, like how big is that to perspective? Like how much of a volume headwind can that offset?

只是兩個人，克里斯多福。因此，在定價方面，首先，我認為就您已經擁有的產品而言，我認為明年您的定價將達到中個位數。但只是想知道您覺得如何繼續推動定價動態？然後進行快速跟進。您對新的銷售管道是否真的有信心，例如它有多大？例如這可以抵銷多少成交量逆風？

Great question, Manav. So I think they're related, obviously. But the first one, pricing dynamics. If we think about our pricing, so going up, retention has remained very stable, customer retention and at the same time, saw volume accelerating.

好問題，馬納夫。所以我認為它們顯然是相關的。第一個是定價動態。如果我們考慮一下我們的定價，那麼價格上漲後，保留率仍然非常穩定，客戶保留率同時也出現了銷售的成長。

So it's basically showing that our balance of pricing and volume acceleration is going quite well. And I'm keeping a very close eye on that because we're keeping customers for life in our company and I want to make absolutely sure we do that the right way for our customers and for our company. So bottom line, I like the pricing that we've had so far.

所以這基本上表明我們的定價和銷售加速之間的平衡進展得很好。我正在密切關注這一點，因為我們將終身保留客戶在我們公司，我想絕對確保我們以正確的方式為我們的客戶和我們的公司做到這一點。所以最重要的是，我喜歡我們迄今為止的定價。

When I look at what's going to happen in the next few quarters, so in Q4, the carryover from last year by definition, is going to get close to 0, obviously, since it's going to be annualizing so over the 12 months. New pricing is quite good actually. So I'm especially pleased with the new pricing we have, which we will have, obviously, in Q4. And in 2024, it's a bit early to go too much in detail, but we're going to be pleased with the pricing that we have while we keep accelerating as well the volumes. So really keeping both in a very good place.

當我考慮接下來幾季會發生什麼時，在第四季度，根據定義，去年的結轉將接近 0，顯然，因為它將在 12 個月內進行年化。新的定價其實相當不錯。因此，我對我們的新定價感到特別滿意，顯然，我們將在第四季度推出新定價。到 2024 年，現在談論太多細節還為時過早，但我們會對我們的定價感到滿意，同時我們會繼續加快銷售。所以真的把兩者都放在一個非常好的地方。

Now to your question on the net new business, as you know, so we're not reporting the dollar value of the growth, but we are really so reaching record levels on a quarterly and annual basis as well of new business. Our team is 80% focused on your business. It's where we're good at, what we like doing as mentioned before. And those good results ultimately are compensating for the softening of the demand globally out there from all our customers. So if our volume is accelerating, it's all related to our new business.

現在，關於淨新業務的問題，如您所知，我們沒有報告成長的美元價值，但我們確實在季度和年度以及新業務方面達到了創紀錄的水平。我們的團隊 80% 專注於您的業務。如同前面所提到的，這是我們擅長的、我們喜歡做的事。這些良好的業績最終將彌補我們所有客戶全球需求疲軟的影響。因此，如果我們的銷量在加速，都與我們的新業務有關。

The next question is from the line of Shlomo Rosenbaum with Stifel.

下一個問題來自什洛莫·羅森鮑姆 (Shlomo Rosenbaum) 和施蒂費爾 (Stifel)。

Christophe, I want to get back to a question that was asked earlier in terms of the volume. It sounds like after 3 quarters of negative volumes, you're starting to get into the positive territory. Could you just go into some of the kind of standout categories over there, what volumes are increasing and which volumes are decreasing? I know you mentioned a little bit about geography, but maybe you could talk a little bit just by like business unit, what's going on in various areas of Industrial, obviously, paper is down. But what are the standout areas where you might have accelerating volumes versus the ones which are shrinking? And how we should think of that going into next year with some of the softening end markets?

Christophe，我想回到之前就體積而言提出的問題。聽起來好像在經歷了三個季度的負成交量之後，你開始進入正成交量的區域。您能否簡單介紹一下那裡的一些突出類別，哪些數量正在增加，哪些數量正在減少？我知道您提到了一些關於地理的內容，但也許您可以透過業務部門來談談，工業各個領域正在發生什麼，顯然，紙張正在下降。但是，哪些領域的銷售量可能會加速成長，而哪些領域可能會萎縮？隨著終端市場的疲軟，我們該如何看待明年的情況？

Yes. So to give you a simple answer, so the ones that are on the soft side, paper, you mentioned it and Europe is the second one. So those are the 2. Everything else is trending in either positive direction or improve direction, if they were on the negative side. I'm especially pleased with the I&S, Institutional Specialty, improvements and Water is going to keep improving as well. So those 2 key businesses are going to be good in the quarters to come, at least with what we're seeing as well right now.

是的。所以給你一個簡單的答案，所以那些軟性的方面，紙質，你提到過，歐洲是第二個。所以這些就是 2。其他一切都朝著正面的方向發展，或朝著改善的方向發展，如果它們是負面的。我對 I&S、機構專業、改進感到特別滿意，水也將不斷改進。因此，這兩項關鍵業務在未來幾季將會表現良好，至少從我們目前所看到的情況來看是如此。

So we have pest elimination as well, which is always a bit of a different volume play, as we know, that's doing exceptionally well.

因此，我們也有消滅害蟲的工作，這總是有點不同的規模，正如我們所知，效果非常好。

We know that competition has a lot to do with themselves. By the way, it's providing us an opening for us to gain shares well and our team is doing an excellent job. In pest elimination, where we see growth, really steady, strong and margins as well at the same time, keeping improving. So overall, our business in a very healthy place with a few places where we need to work on, as mentioned, Europe and paper.

我們知道，競爭與自己有很大關係。順便說一句，它為我們提供了獲得股票的機會，而且我們的團隊做得非常出色。在害蟲消除方面，我們看到成長非常穩定、強勁，同時利潤率也不斷提高。總的來說，我們的業務非常健康，有一些地方需要我們努力，正如前面提到的，歐洲和紙張。

But to the point of Europe, I'd like to mention as well that margin improvement has been great. So volume challenged in Europe, as we know. But okay, not great. And when I think about our operating income, it almost doubled in Europe in the third quarter. So the team has done some really good work.

但就歐洲而言，我還想提一下，利潤率的改善非常大。據我們所知，歐洲的銷售面臨挑戰。但還好，不是很好。當我想到我們的營業收入時，第三季歐洲的營業收入幾乎翻了一番。所以團隊做了一些非常好的工作。

Our next question is from the line of Andy Wittmann with Robert W. Baird.

我們的下一個問題來自安迪·魏特曼 (Andy Wittmann) 和羅伯特·W·貝爾德 (Robert W. Baird)。

I guess maybe, Scott, probably for you, when I was just looking at the adjustments to the results, I noticed that there was $26 million of restructuring and the total exclusions were $0.13 for the quarter. You talked about last quarter expectation of 5. And actually, the guidance for fourth quarter is pretax around $30 million by my calculations or $0.09. I guess could you just talk about what the restructuring actions were in the quarter and the quarter ahead? Maybe which segments, geographies? And are these -- is it another restructuring program that you've taken in the past forming here? Or can you just maybe talk about some of the operational effects of what you've achieved and are trying to achieve?

我想，斯科特，可能對你來說，當我剛剛查看結果調整時，我注意到該季度有 2600 萬美元的重組，總排除額為 0.13 美元。您談到上季度的預期為 5。實際上，根據我的計算，第四季度的指導值為稅前 3000 萬美元左右，即 0.09 美元。我想您能否談談本季和未來季度的重組行動？也許是哪些細分市場、地區？這些是不是你們過去在這裡實施的另一個重整計畫？或者您能否談談您已經取得和正在努力實現的目標的一些營運效果？

Yes. Certainly, Andy. Happy to do that. Thanks for the question. Yes. So if we look at Q3, the special charges, restructuring was higher than we had guided to. But that's really due to the timing of the phasing of our combined savings program that we had announced earlier this year, that's really focused your question on where are we focused on it. This is really targeted around Institutional & Healthcare and as well as Europe, it started in the end of last year and then we added on to it earlier this year.

是的。當然，安迪。很高興這樣做。謝謝你的提問。是的。因此，如果我們看第三季度，特殊費用、重組費用高於我們的指引。但這實際上是由於我們今年早些時候宣布的綜合儲蓄計劃分階段的時間安排，這確實讓您的問題集中在我們將重點放在哪裡。這實際上是針對機構和醫療保健以及歐洲的，它在去年年底開始，然後我們在今年早些時候添加了它。

And that's what really drove it but really around the timing. But still expected, as I think I've talked about in previous calls that about of that program, about 90% of those costs are going to be done by the end of next year, okay? And so there will be a little bit of a tail going into 2024.

這就是真正推動它的因素，但實際上是在時機上。但仍然預計，正如我在之前的電話會議中談到的那樣，該計劃的大約 90% 的成本將在明年年底前完成，好嗎？因此，到 2024 年將會出現一些尾巴。

But really then if you look at that, as Christophe talked before, we're seeing the benefits in Healthcare from the program there, but we're also seeing great improvement in the Institutional businesses and that's where it was really focused. And then as we talked about at the end of last year, the actions taken against Europe and Christophe mentioned that we're seeing really great margin improvement in Europe as well. So I think the actions that we are taking are having the benefits we expected.

但實際上，如果你看一下這一點，正如克里斯托夫之前所說，我們看到了該計劃在醫療保健方面的好處，但我們也看到了機構業務的巨大改進，這才是它真正關注的地方。然後，正如我們在去年年底談到的那樣，針對歐洲採取的行動和克里斯托夫提到，我們也看到歐洲的利潤率確實大幅提高。所以我認為我們正在採取的行動正在帶來我們預期的好處。

Let me add a few comments here. So you totally support what Scott just said. Obviously, I'm really happy that most of the combined programs are coming to a close by the end of this year, which was the plan, so delivered as expected as well. At the same time, we know that digital technology, artificial intelligence will open some new productivity opportunities so for us in the future. There's nothing clear in our plans right now, but we will keep looking at that. And if there is an opportunity to improve significantly our productivity through technology in the quarters and years to come, we will certainly capture them and discuss that with you.

讓我在這裡添加一些評論。所以你完全支持斯科特剛才所說的。顯然，我真的很高興大多數合併項目都將在今年年底結束，這是計劃，因此也按預期交付。同時，我們知道數位科技、人工智慧將在未來為我們帶來一些新的生產力機會。目前我們的計劃還沒有明確的內容，但我們會繼續關注。如果在未來幾個季度和幾年裡有機會透過科技顯著提高我們的生產力，我們一定會抓住它們並與您討論。

Our next question is from the line of Steve Byrne with Bank of America.

我們的下一個問題來自美國銀行的史蒂夫·伯恩 (Steve Byrne)。

Christophe, I'd like to hear your view or maybe ranking among your 4 key product areas: Water, Hygiene, Energy and Pest with respect to potential share gains? And would you expect your SG&A to increase over time commensurate with revenue growth? Or do you see a pathway to perhaps reduce that 47,000 headcount in a way that either utilize your digital approach or whatever to be more efficient and help you reach that 20% operating margin goal?

Christophe，我想聽聽您的觀點，或您的 4 個關鍵產品領域（水、衛生、能源和害蟲）的潛在份額收益排名？您是否預期您的 SG&A 會隨著時間的推移而與營收成長相稱？或者，您是否看到了一種可能減少 47,000 名員工的途徑，可以利用您的數位方法或其他更有效率的方法，並幫助您實現 20% 的營業利潤率目標？

Yes. Maybe 2 questions in your question here, Steve. So first, in terms of share gain, we're not a consumer goods company. So it's a bit harder to have the exact numbers, obviously here. But directionally, when I look at the big ones, so I&S up 12% in a flat market. So that's obviously indicating very interesting share gains.

是的。史蒂夫，你的問題可能有兩個問題。首先，就份額成長而言，我們不是一家消費品公司。因此，顯然在這裡獲得確切的數字有點困難。但從方向上看，當我關注大型企業時，I&S 在平坦的市場中上漲了 12%。因此，這顯然表明股票收益非常有趣。

Pest Elimination, up double digit when competition is either in the single digit or down for some of them as well, well that's showing as well so share gain. Industrial, even comparing to a very strong last year in the mid-single, well, PMI in the U.S. and in the EU is negative.

當競爭處於個位數或下降時，害蟲消除業務的成長達到兩位數，這也顯示了份額的成長。工業方面，即使與去年非常強勁的中期單項相比，美國和歐盟的 PMI 均為負值。

So that's also showing share gain as well. And as mentioned, in Healthcare is growing back again, is also showing so quite a healthy performance. So overall, I like a lot of how we're progressing versus our peers in the marketplace.

因此，這也顯示出份額的成長。如前所述，醫療保健領域再次成長，也表現出相當健康的表現。總的來說，我很喜歡我們與市場同行相比所取得的進步。

Now to your question on SG&A, as I've shared with you in the past, I think that ultimately, the company is going to be much bigger in the years to come. I don't think that our team is going to be much bigger. But I'm not expecting the team to be reduced but it might be in different places. And I want to make sure that the #1 place where I want to have all the firepower I can is in the front line, which means our team serving our customers, where we will leverage digital and AI technology not only to improve productivity, to help them serve more customers, sell more solutions.

現在，關於你關於銷售、管理和行政費用的問題，正如我過去與你分享的那樣，我認為最終，公司將在未來幾年變得更大。我不認為我們的團隊會變得更大。但我並不期望團隊會減少，但可能會在不同的地方。我想確保我想要擁有的所有火力的第一個位置是在前線，這意味著我們的團隊為客戶服務，我們將利用數位和人工智慧技術不僅提高生產力，幫助他們服務更多客戶，銷售更多解決方案。

But more importantly, spend way more time in creating value for our customers, which drives obviously value for our customers, which drives new business, which drives pricing and ultimately improves our margins. So the way I think about SG&A and ratio, it's going to keep going down the years to come. But ultimately, I'll make sure as well that through digital technology, we increase the impact of our front line with our customers, which has been core to this company for the years past too.

但更重要的是，花更多的時間為我們的客戶創造價值，這顯然會為我們的客戶帶來價值，從而推動新業務，推動定價並最終提高我們的利潤。因此，我對 SG&A 和比率的看法，在未來幾年將繼續下降。但最終，我也將確保透過數位技術，我們增加前線對客戶的影響，這也是過去幾年這家公司的核心。

Our next question is from the line of Patrick Cunningham with Citi.

我們的下一個問題來自花旗集團的 Patrick Cunningham。

On the Life Sciences business, how should we think about new business growth and investment into next year given some of the persistent near-term weakness sort of juxtapose with the long-term growth opportunity and margin expansion that you highlighted in your Investor Day?

在生命科學業務方面，考慮到近期持續疲軟的情況與您在投資者日強調的長期成長機會和利潤率擴張並存，我們應該如何考慮明年的新業務成長和投資？

Yes. So Patrick, so on Life Science, we've seen some improvement, which is good in the third quarter in a market that's generally down.

是的。帕特里克，在生命科學領域，我們看到了一些改善，這在第三季度總體下滑的市場中是不錯的。

And I see that as a short-term impact in the industry, it's an industry so pharma, biotech, that is very promising. So for the future, a few challenging times for a few quarters. We see how many more quarters that's going to last for the industry out there, but I'm very bullish with where the industry as a whole is going in the years to come.

我認為，作為該行業的短期影響，製藥、生物技術等行業非常有前途。因此，未來幾季將面臨一些挑戰。我們看到這個產業還會持續多少個季度，但我非常看好整個產業未來幾年的發展方向。

Now when it comes to our own net performance, well, the fact that we have positive growth is also a sign of the new business that we're generating, the share that we're gaining as well versus our competition. And it's in that time that Ecolab usually focuses the most in investing for the future. And as I've shared during Investor Day, well, we're investing in capacity, making sure that we will have enough production capacity.

現在，當談到我們自己的淨業績時，我們的正成長這一事實也是我們正在產生的新業務的標誌，也是我們相對於競爭對手所獲得的份額的標誌。正是在這個時候，藝康通常最關注對未來的投資。正如我在投資者日分享的那樣，我們正在投資產能，確保我們有足夠的產能。

So for the years to come, to deliver our growth and not just in one location, but in several locations, in Asia, in Europe and in North America. And at the same time, it's also building capabilities. It's building our team. It's building expertise. It's building science and R&D as well at the same time. And if the market is a bit different short term than what we had expected a year or 2 ago, our investment plan hasn't changed because for me, the future is totally unchanged. It's just a short-term impact that the market is having on everyone's performance.

因此，在未來的幾年裡，我們不僅要在一個地點成長，而且要在亞洲、歐洲和北美的多個地點成長。同時，它也在建立能力。它正在建立我們的團隊。它正在建立專業知識。它同時也在建構科學和研發。如果短期市場與我們一兩年前的預期略有不同，我們的投資計畫不會改變，因為對我來說，未來完全沒有改變。這只是市場對每個人表現的短期影響。

The next question is from the line of Kevin McCarthy with Vertical Research Partners.

下一個問題來自垂直研究夥伴的 Kevin McCarthy。

Christophe, I'd welcome your updated thoughts on the Healthcare business. I guess in terms of operations, would you expect that business to grow on par with your corporate average next year or better or worse? And then on the strategic side, I think you've now separated infection prevention from Surgical. And maybe you can kind of talk through what you're seeing in terms of incremental benefits from that in the early days as it relates to customer touches and productivity and the like?

Christophe，歡迎您提出有關醫療保健業務的最新想法。我想就營運而言，您預計明年的業務成長會與公司平均水平持平，還是更好或更差？然後在策略方面，我認為您現在已經將感染預防與手術分開了。也許您可以談談您在早期所看到的增量收益，因為它與客戶接觸和生產力等相關？

Yes. Thank you, Kevin. So 3 things. First is bifurcation, infection prevention and surgical as mentioned earlier, is progressing very well. It's really providing the right focus for the surgical business that's serving different people in a hospital than infection prevention, which is much closer to Institutional. This is helping, obviously, the surgical business. And the fact that infection prevention is now managed by the institutional team, well, we get not only the reach because they serve way more hospitals for institutional products, obviously, than healthcare did well, you get immediate synergies from a growth perspective. You get the synergies on the cost side as well because it's a way bigger team than what health care as well used to be. So in terms of transformation, I like the progress that's being made.

是的。謝謝你，凱文。所以有三件事。首先是分叉，預防感染和手術如前所述，進展非常順利。它確實為外科手術業務提供了正確的重點，為醫院中的不同人員提供服務，而不是感染預防，後者更接近機構。顯然，這對外科手術業務有幫助。事實上，感染預防現在是由機構團隊管理的，我們不僅獲得了影響力，因為他們為更多的醫院提供機構產品，顯然比醫療保健做得更好，從成長的角度來看，您可以立即獲得協同效應。您還可以在成本方面獲得協同效應，因為這是一個比以前的醫療保健團隊更大的團隊。因此，就轉型而言，我喜歡正在取得的進展。

Now in terms of growth performance, if I think short term, speak '24, I think Healthcare is going to be below average of the company and more longer term, well, my objective is to make sure that our health care business becomes at least at the average of the company, if not better, but that's going to take some time and some work in order to get there.

現在就成長表現而言，如果我認為短期而言，就24年而言，我認為醫療保健將低於公司的平均水平，而從長遠來看，我的目標是確保我們的醫療保健業務至少成為達到公司的平均水平，即使不是更好，但這也需要一些時間和工作才能實現。

Our next question comes from the line of Vincent Andrews with Morgan Stanley.

我們的下一個問題來自文森特·安德魯斯與摩根士丹利的對話。

Just a question from me on inventories. Just looking at it at down, I don't know, mid-high teens year-over-year, but your volume is kind of flattish and price is up and you delivered products. So I'm just trying to understand if raws are still sort of flattish, what's helping the inventory come down and improve the working capital performance?

我只是問一個關於庫存的問題。只是看看下降，我不知道，同比中高青少年，但你的數量有點持平，價格上漲，你交付了產品。所以我只是想了解原材料是否仍然持平，什麼有助於降低庫存並提高營運資金績效？

Thank you, Vincent. I'm going to pass this one to Scott.

謝謝你，文森。我要把這個交給史考特。

Thanks, Vincent. I'd be happy to answer this. So yes, as you probably saw, our Q3 working capital was about $250 million favorable versus last year and largely driven by some targeted inventory reductions. We're down -- DOH is down about 10 days, so the rate impact on that versus the end of last year. So -- and that's really been driven by -- as the supply chain team has driven great supply chain resilience and allowed us to go after and reduce those inventory levels. And so I would expect really like the working capital trajectory and expect really strong free cash flow growth through the balance of the year. And frankly, expect our free cash flow conversion to be above historical levels, which tends to be mid-90s and expect that free cash flow conversion to be above 100% this year on a full year basis.

謝謝，文森特。我很樂意回答這個問題。所以，是的，正如您可能看到的那樣，我們第三季的營運資金比去年有利約 2.5 億美元，這主要是由於一些有針對性的庫存削減所致。我們下降了——衛生部下降了大約 10 天，因此與去年年底相比，利率對其產生了影響。因此，這確實是由供應鏈團隊推動了供應鏈的巨大彈性，並使我們能夠追求並降低庫存水準。因此，我預計營運資本軌跡會非常好，並且預計今年餘下的自由現金流成長會非常強勁。坦白說，預計我們的自由現金流轉換將高於歷史水準（通常是 90 年代中期），並預計今年全年自由現金流轉換將超過 100%。

Our next question is from the line of Rosemarie Morbelli of Gabelli Funds.

我們的下一個問題來自 Gabelli Funds 的 Rosemarie Morbelli。

Congratulations to everyone on that great quarter. Institution did really quite well. And I was in -- well, I was in several hotels recently. And the level of cleaning, changing sheets, changing towels and so on has come down substantially. I know you are adjusting your operations to reflect these different worlds. But I was wondering if you could give us a little more details on what you are doing because if they don't change anything, you obviously don't sell your products, services and so on. Details would be appreciated.

恭喜大家度過了這個偉大的季度。機構做得確實相當不錯。我最近去過幾家酒店。而且打掃、換床單、換毛巾等的水平也大幅下降。我知道您正在調整您的營運以反映這些不同的世界。但我想知道你是否可以向我們提供更多有關你正在做的事情的細節，因為如果他們不改變任何東西，你顯然不會出售你的產品、服務等。詳細資訊將不勝感激。

Thank you, Rosemarie. This is a core element of focus between us and our hospitality customers. It was initially driven by shortage, obviously, of labor that they didn't have to do all that work, which is still a challenge for that industry. At the same time, well, they like the fact that less labor meant as well less cost while pricing went up, that drove good margins for Institutional customers, which ultimately is a good thing for the industry and when the industry is doing well, it's a good thing for us as well at the same time.

謝謝你，羅斯瑪麗。這是我們和飯店客戶之間關注的核心要素。顯然，最初是由於勞動力短缺而導致他們不必做所有這些工作，這對該行業來說仍然是一個挑戰。同時，他們喜歡這樣一個事實，即更少的勞動力意味著更少的成本，同時價格上漲，這為機構客戶帶來了良好的利潤，這最終對行業來說是一件好事，當行業表現良好時，它同時對我們來說也是一件好事。

That being said, quality standards need to get back to where they used to be. It's exactly playing into what we're doing which is having products that are delivering better quality, better standards, better cleanliness with less labor. So it's 2-in-1 -- 3-in-1. It's automated dish machine, laundry, floor cleaning, whatever those solutions might be as well so for the industry. So we've reoriented really over the last 2 years, all our innovation towards increasing even more the automation level for our customers in order to drive better cleanliness while using less labor and keeping the margins that they used to have.

話雖這麼說，品質標準需要回到原來的水平。這正是我們正在做的事情，即用更少的勞動力提供更好的品質、更好的標準、更好的清潔度的產品。所以它是二合一——三合一。它是自動洗碗機、洗衣房、地板清潔，無論這些解決方案對於行業來說都是如此。因此，在過去的兩年裡，我們確實重新調整了方向，我們所有的創新都旨在為客戶提高自動化水平，以提高清潔度，同時使用更少的勞動力並保持他們以前的利潤。

So at the end of the day, if Institutional industry hasn't changed for a long time like 100 years, I think that the past few years, it's an industry that has made a step change in terms of leveraging technology more than ever. Well, this is exactly what we're doing. For me, it's going to help bring our partnership between us and our customers to a whole new level, helping them perform better and for us leveraging all the innovations that we have to offer. So at the end of the day, a good news and cleanliness is going to improve as well in the hotels that you're going to visit.

因此，歸根結底，如果機構行業在很長一段時間內（例如 100 年）沒有發生變化，我認為在過去幾年中，這個行業在利用技術方面比以往任何時候都發生了巨大的變化。嗯，這正是我們正在做的事情。對我來說，這將有助於將我們與客戶之間的合​​作關係提升到一個全新的水平，幫助他們表現得更好，並為我們利用我們所能提供的所有創新。因此，總而言之，一個好消息是，您要去的飯店的清潔度也會得到改善。

The next question is from the line of Scott Schneeberger of Oppenheimer.

下一個問題來自奧本海默的斯科特·施內伯格（Scott Schneeberger）。

Christophe, could you give us an update? It's been, I think, nearly 5 years since data centers and animal health became big areas of focus of the company. Could you speak to growth rates at both and how meaningful they've become within their subsegments of Industrial?

Christophe，可以為我們介紹一下最新情況嗎？我認為，資料中心和動物健康成為公司重點關注的領域已經將近五年了。您能否談談兩者的成長率以及它們在工業細分市場中的意義有多大？

Well, the 2 are very different, obviously. So data centers is growing at incredible rates. We're not giving sort of the detail here, but it's strong, and it keeps accelerating. So it's north of 30%, so which is quite remarkable.

嗯，很明顯，兩者非常不同。因此，資料中心正在以令人難以置信的速度成長。我們不會在這裡提供詳細信息，但它很強大，而且還在加速。所以它超過了 30%，所以這是相當了不起的。

You see that with the high tech companies, obviously, the usage of cloud is going up exponentially. They need way more computing power in places where there is limited water as well at the same time. And there's almost no one out there who can serve them in a way that's increasing capacity, reducing water consumption and at the same time, making sure that the uptime remains close to 100%. So quite a challenge from a technology and expertise perspective. This is playing exactly to our strength as a company. That's why having focused on that business, having a dedicated team on it is paying off more than ever. And I think that we are at the beginning of that growth journey, which is really good.

您會看到，對於高科技公司來說，雲端的使用量顯然呈指數級增長。在水資源有限的地方，他們同時需要更多的運算能力。而且幾乎沒有人能夠以增加容量、減少水消耗的方式為他們提供服務，同時確保正常運行時間保持接近 100%。從技術和專業知識的角度來看，這是一個相當大的挑戰。這正是我們身為一家公司的優勢所在。這就是為什麼專注於該業務，擁有一支專門的團隊將比以往任何時候都獲得更多的回報。我認為我們正處於成長之旅的開始，這真的很好。

Animal Health, a total different story. Obviously, since the promise there is as the Food industry is moving away, at least in places where it's still being used, antibiotics. Well, you need to have much higher level of hygiene in the funds that are growing, obviously these animals. We've been building that over the last few years. It's not an exponential growth like data centers has been is and even more will be in the future.

動物健康，完全不同的故事。顯然，隨著食品工業逐漸遠離抗生素，至少在仍在使用抗生素的地方，抗生素是有希望的。嗯，你需要對正在生長的資金（顯然是這些動物）有更高的衛生水平。過去幾年我們一直在建造它。它不像資料中心那樣呈指數級增長，未來還會呈指數級增長。

But that's a business that's in a good place, but that you can't compare with the data center business. But it's a very good complement to our Food & Beverage business which is doing really well overall.

但這是一項處於良好位置的業務，但無法與資料中心業務進行比較。但這是對我們整體表現良好的食品和飲料業務的一個很好的補充。

So I like those focus and investments that we're making in those industries, but they're very different from each other.

因此，我喜歡我們在這些行業中所做的重點和投資，但它們彼此之間有很大不同。

The next question is from the line of Josh Spector with UBS.

下一個問題來自瑞銀集團的 Josh Spector。

I guess 2 quick ones, probably both for Scott, is when I look at SG&A, so flat into fourth quarter, if I think about normal seasonality and what that means for next year, extrapolating that gets me to like $4.4 billion to $4.5 billion or another 10% increase, I guess, is that the right way to think about it? Or would you expect it to move differently than that?

我想有兩個快速的問題，可能都是斯科特的，是當我看SG&A時，第四季度如此平穩，如果我考慮正常的季節性以及這對明年意味著什麼，推斷這讓我喜歡44億美元到45億美元或我想，再增加 10%，這是正確的思考方式嗎？還是你期望它的走勢與此不同？

And just second, you have a $1 billion plus in debt due in the next couple of quarters prevail coupon. Are you looking to pay that off? Or would you roll that?

其次，你還有超過 10 億美元的債務將在接下來的幾季到期（以票息計算）。你想還清這筆錢嗎？或者你會滾動它嗎？

Yes, Josh, I'll handle the 2 follow-ups. The first one on the debt and where we sit today, have strong liquidity, as you saw on the free cash flows for the third quarter and the expectation for the full year and we ended the third quarter with around about $1 billion of cash and so where we sit today, my expectation would be we paid down both maturities due in December and January combined is a little over $1 billion. So expectation there.

是的，喬什，我會處理 2 個後續行動。第一個關於債務的問題以及我們今天所處的位置，具有強大的流動性，正如您在第三季度的自由現金流和全年預期中看到的那樣，我們在第三季度結束時擁有大約10 億美元的現金，所以我們今天坐的位置，我的預期是，我們償還了 12 月和 1 月到期的到期債務，總金額略高於 10 億美元。所以期待在那裡。

Again, long-term focus on capital allocation remains the same. But obviously, in the short term, we're very committed to deleveraging. And on a good path to do that way at the end of the third quarter, leverage ratio was at about 2.5% and feel very good by end of next year to get back down to our historical sort of 2x range.

同樣，對資本配置的長期關注保持不變。但顯然，短期內我們非常致力於去槓桿化。在第三季末實現這一目標的良好路徑上，槓桿率約為 2.5%，到明年年底回到我們歷史上 2 倍的範圍非常好。

Getting back to your SG&A question. As we talked about, and Christophe talked about in the open, that the Q3 dollar was what we expected -- expect similar levels in Q4 as he talked about, but the year-over-year, really largely driven by this incentive compensation. And so -- and then as well, if you look at Q3, had a tougher comp -- low incentive compensation last year but that underlying productivity remains really strong. Just for perspective on that, the SG&A, as Christophe talked about, we will continue to grow this business, but we're needing less people. And actually, in the third quarter, our headcount year-over-year was down on SG&A 2% and so our sales per head was up about 7%.

回到你的SG&A 問題。正如我們所談論的，克里斯托夫公開談論的那樣，第三季度的美元水平符合我們的預期——預計第四季度的水平與他所說的類似，但與去年同期相比，實際上很大程度上是由這種激勵性薪酬所推動的。因此，如果你看看第三季度，你會發現，去年的激勵薪酬較低，但潛在的生產力仍然非常強勁。就這一點而言，SG&A，正如 Christophe 所說，我們將繼續發展這項業務，但我們需要的人員更少。事實上，在第三季度，我們的員工數量比去年同期下降了 SG&A 2%，因此我們的人均銷售額增加了約 7%。

So showing that good productivity. And I would expect it's early to sort of talk about 2024, but we'll expect to continue to drive great productivity next year, leveraging the technology that we continue to deploy and really increasing the time that our sales teams spend on creating customer value.

因此顯示出良好的生產力。我預計現在談論 2024 年還為時過早，但我們預計明年將繼續提高生產力，利用我們繼續部署的技術，並真正增加我們的銷售團隊花在創造客戶價值上的時間。

Maybe 2 points to build on what you just said, Scott. On SG&A, it's 100% in our control. We've demonstrated for years that we drive productivity the right way. It's not by squeezing cost, it's by automating our operations and focusing our teams on creating value with our customers. So I completely expect that in the years to come, through technology, through digital, through AI, we will keep on that journey and feel really confident about that.

史考特，在你剛才所說的基礎上也許有兩點。在 SG&A 方面，我們 100% 掌控。多年來，我們已經證明我們以正確的方式提高生產力。這不是透過壓縮成本，而是透過自動化我們的營運並讓我們的團隊專注於為客戶創造價值。因此，我完全希望在未來的幾年裡，透過科技、數位化、人工智慧，我們將繼續這趟旅程，並對此充滿信心。

And the point on cash flow and debt speak balance sheet, for me, in those times, having a very strong balance sheet, not only has been true for us for many, many years, it's especially true today. So getting our working capital as tight as it can be, getting our cash flow as strong as it can be through volume, new business, pricing and all that business, obviously, so generated is absolutely essential.

關於現金流和債務的問題是資產負債表，對我來說，在那個時候，擁有非常強大的資產負債表，不僅對我們來說多年來如此，在今天尤其如此。因此，讓我們的營運資金盡可能緊張，透過數量、新業務、定價和所有這些業務，讓我們的現金流盡可能強勁，顯然，如此產生的現金流是絕對必要的。

So on the 2 sides, keep looking for good progression, both on SG&A productivity and the strengthening of the balance sheet.

因此，在兩個方面，繼續尋求良好的進展，無論是在銷售管理、行政管理（SG&A）生產力方面還是在資產負債表的強化方面。

Thank you. Mr. Hedberg, there are no further questions at this time. I'd like to turn the floor back over to you for closing remarks.

謝謝。 Hedberg 先生，目前沒有其他問題。我想請您做結束語。

Thank you. That's wraps up for our third quarter conference call. This conference call and the associated discussion slides will be available for replay on our website. Thank you for your time for participation. I hope everyone has a great rest of your day.

謝謝。我們第三季的電話會議到此結束。本次電話會議和相關討論幻燈片將在我們的網站上重播。感謝您抽空參與。我希望每個人都度過愉快的一天。

Thank you. Ladies and gentlemen, thank you for your participation. This does conclude today's teleconference, and you may now disconnect your lines, and have a wonderful day.

謝謝。女士們、先生們，感謝您的參與。今天的電話會議到此結束，您現在可以掛斷電話，祝您有美好的一天。