I feel pretty good with our flattish growth because if I compare it to competition, which are great companies, by the way, well, their growth is way down. So being flattish, I feel pretty good about that. It’s driven by what you mentioned. It’s kind of still the outcome of the past few years with COVID, COVID-related production inventories as well. And in an industry that is basically getting ready for the future. It’s not going to last long. It’s going to last a few quarters. So, we’re not going to see a major pickup in Q3, but I think it’s going to happen over the next few quarters. But if anything, when I look back, so a year ago, how I was looking at Life Science, how am I looking at the market and the business today where I feel really good and even better with where we’re going, which is why we’ve decided to stay on offense.
Even if the market is pressured for a while, it’s not going to last forever. So, for me, making sure that we can get more new customers, that we can build capabilities, which means expertise, people on the street, people in R&D, innovation, and at the same time, some building capacity as well to produce for the future, well, it’s the best time to do it. That has an impact on the operating income margin. That’s okay, because we know that that business is kind of north of 30% on a long-term run rate basis, it’s worth doing it. So, a few quarters a bit pressured, but we’re going to get to a better place, and that business is more promising than it’s ever been. So, I feel good about Life Sciences.
Operator: Our next question is from the line of Patrick Cunningham with Citi.
Patrick Cunningham: So, we’re starting to see some deceleration on pricing. What can we expect from normalized pricing going forward? And specifically on the water business, you’ve highlighted the unique competitive position and customer sustainability objectives. Do you think that will translate into higher pricing power relative to historical pricing?
Christophe Beck: So, two short answers here, Patrick. The first one is the deceleration of pricing. As you mentioned it, is 100% related to year-on-year comparison. The carryover, we’ve kept 100% of it, including the energy surcharge, by the way. And on top of it, we’re expanding as well new pricing because we’ve become as well even better. We’ve always been good at pricing as an organization. Well, over the past two years, we’ve become even better because it’s been so much related to the value we’re creating for our customers or the savings in their operations in dollar. And we want to make absolutely sure that net-net, it’s a positive story for customers, which it is. So, that’s the first answer, entirely, so the slowdown entirely related to a year-on-year comparison.
Carryover is stable, and pricing is expanding, which leads to the second question, pricing for the future. I don’t know, where it’s exactly going to shake out. We’ve been always within the range of 1% to 2% in the past 10 years or pre this inflationary time. Post that cycle, whenever that cycle is over, is going to be better than that. I don’t know exactly what the number is going to be, but it’s going to be north of two. That’s for sure.
Operator: The next question is from the line of Laurence Alexander with Jefferies.
Laurence Alexander: So, it sounds as if the path to positive volumes in the back half is you’re widening the spread that Ecolab can get versus the end markets. How do you see that developing in 2024, 2025? Do you think you can keep the new wider spread or expand it further, or do you see kind of this as a bit countercyclical? And as the end markets recover, maybe Ecolab’s volume spreads sort of compresses a little bit?
