Andy Wittmann: Great. Good morning and thanks for taking my question. Christophe earlier in the Q&A, you were talking about how you’re investing across three growth vectors, kind of more people to help serve our customers, digital and AI. And then you talked about investing to serve more as one Ecolab. So, there’s been various initiatives to bring the whole solution to customers over time. So I guess, I’d like to understand a little bit more about what you’re doing here that’s different from the past to try to circle that customer even better to use your terminology I guess?
Christophe Beck: Yeah. Thank you, Andy. It’s been a long journey, and it’s going to be a continued long journey. At the end of the day, we call it our one Ecolab growth program. It’s to provide our customers with a transparent view of all the businesses that are serving them and all the opportunities that they have, if they were to work even more with them. At the end of the day, we want to help them drive the performance of all the units at the performance level of the best-performing unit. We know, which one that is. We know how to get there. We know how to help them get there. We need data transparency. We’re making very good progress on that, and we will keep investing on that. And the second part is making sure that our teams also have real-time data at their fingertips on their phone knowing what’s the potential that this specific unit is having versus the best-performing unit of that customer, and how to get there.
What are the best practices that I can use that, I’m not familiar with. They’ve been probably used in another country, maybe in another business as well. I have all that information on my phone, and I can deliver that value as well so for the customer. And last but not least, needs to make sure that our back office, where we’ve made huge progress with SAP over the last 10 years. We have 80% plus of our business on SAP so today is perfectly aligned with that proposition behind customers. So there is no revolution here. It’s pure evolution. I’m taking the advantage of moving even faster in order to capture even more share in order to grow faster and get higher margin at the same time.
Operator: Next question is from the line of Mike Harrison with Seaport Research. Please proceed with your question.
Mike Harrison: Hi. Good afternoon.
Christophe Beck: Good afternoon, Mike.
Mike Harrison: I was wondering if we could dig in a little bit more on the mining business. You mentioned that it was weaker year-on-year against a tough comp, but I’m just curious if you can give a little more color on what’s going on and kind of how that’s expected to trend the rest of the year? And then where are we in the process of shifting that mining business toward higher-value segments of the market? And I know you did an acquisition back in November, how does that acquisition help you further move along in that shift toward higher-value segments and fertilizers? Thank you.
Christophe Beck: Mike, 10 years ago, I was not exactly in love with our mining business because it was focused on segments of the past, coal, primary metals all those things where the world is not exactly going towards to longer term. And we made the conscious decision back then to shift everything towards much less cyclical, much more growth focus, and much higher margin as well at the same time. And we’ve made a total transformation of that business over the last 10 years, and what was 80-20 yesterday is closer to 20-80 today, which is why I like where we are and even more where we’re going with mining. When you think about mining, well, think about green transformation, think about copper, think about lithium. That’s where we spend a lot of time.
So, it’s precious metals as well at the same time — and the mining industry has a lot to do with water to say the least because most of the time, there’s not enough water and the water they produce is not exactly great for the environment. We can help on both ends we use and recycle water for ultimately a much better mining operation with a much lower environmental impact. So, we’ve really driven that transformation. That takes time. Changing a portfolio within a business is something that takes years to get to the right place. And we’ve reached that place and the acquisition we did last year as you just mentioned well it is helping towards that because it’s towards the new mining as we call it as well. So, at the end of the day, right portfolio, much less cyclical, almost no cyclicality and margin much better.
We had that year-on-year comparisons with the first quarter of 2023 was up 42% last year. So, it’s just a year-on-year comparison. The next quarters to come for the most part is going to be a very good story. So, if I didn’t like mining so much 10 years ago, I like mining a lot today.
Operator: Our next question is from the line of Vincent Andrews with Morgan Stanley. Please proceed with your question.
Vincent Andrews: Thank you. Christophe if I could go back to the investment spending, I’d love just to get your thought process on how you sort of came up with the amount to spend. And I guess I’m just asking did you set a bar or hurdle somewhere. Are you trying to achieve a certain outcome either in terms of your near-term earnings or your medium term volume growth? And I guess why wasn’t the number higher or lower? What things did you say no to versus what things that you absolutely have to do?
Christophe Beck: Yes, Vincent, the guiding principle is to invest in wise that help us raise the probability of delivering our targets of the five to seven, the 20% OI margin as you know and 12% to 15% EPS growth, as well at the same time for the long run. This is my job. This is our promise. This is what we’re working all together towards to. So, that’s the way we’re looking at those investments. It’s not meant in a short-term way at all. It’s all about delivering our long-term commitment. So, there’s not a threshold — well, there’s a threshold of making intelligent moves and trying to avoid dumb moves at least willingly. That’s probably the only one we have there and in some places when we think about global high tech in data centers in semiconductors saying, well let’s go there as fast and as deep as we can.
We have a leadership position. It’s a huge market that keeps getting bigger as well out there. I’m not putting a threshold here. It’s get it done as fast and as well as you can. But at the end of the day, it’s making sure that we get the 5 to 7, 12 to 15 EPS, and a 20% OI margin as we’ve talked about in the next few years. This is my guidepost and my promise to you.
Operator: Thank you. Mr. Hedberg there are no further questions at this time. I would like to turn the floor back over to you for closing comments.
Andy Hedberg: Thank you. That wraps up our first quarter conference call. This conference call and the associated discussion slides will be available for replay on our website. Thank you for your time and participation and hope everyone has a great rest of your day.
Operator: Thank you. Ladies and gentlemen, thank you for your participation. This does conclude today’s teleconference. You may disconnect your lines at this time and have a wonderful day.
