Greetings, and welcome to Ecolab's third quarter 2023 earnings release conference call. At this time, all participants are in listen-only mode. A question-and-answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It's now my pleasure to introduce your host, Andy Hedberg, Vice President, Investor Relations for Ecolab. Thank you, Mr. Hedberg. You may begin. 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. 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 in 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. With that, I'd like to turn the call over to Christophe Beck for his comments. 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. 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. 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. Our volume trends continued to strengthen as well, which is great news, with new business helping to accelerate volumes despite softening in global and 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%. 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 Cost. While global energy prices remain dynamic, we're confident in our value-based pricing strategy and, if absolutely necessary, our capability to implement energy surcharges. 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 costs 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. 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. 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. Our performance further strengthened across our businesses. A highlight was Institutional and 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. 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 the segment. Operating income growth eased a bit in the third quarter, reflecting the incentive-based compensation rebuild, as mentioned in the last call. Importantly, we expect this segment's operating income to return to double-digit growth in Q4. Our Healthcare bifurcation strategy is progressing well. Strong pricing and new business helped 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. 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 team 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. Now, looking ahead, we expect our strong performance to continue in the fourth quarter, with adjusted earnings per share increasing 17%-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 250-300 basis points versus last year. As we shared with you at our Investor Day in September, we see continued strong momentum in 2024. 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. 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. I look forward to your questions. Thanks, Christophe. That concludes our formal remarks. Operator, would you please begin the question-and-answer period? Thank you. We'll now be conducting a question-and-answer session. We ask you to please limit yourself to one question, so others may have a chance to participate. If you'd like to ask a question, please press star one on your telephone keypad, and a confirmation tone indicate that your line is in the question queue. You may press star two if you'd like to move your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment please, while we poll for questions. Thank you. Thank you. Our first question comes from the line of Tim Mulrooney with William Blair. Please proceed with your question. Christophe, Scott, good afternoon. Good afternoon, Tim. So I see you eclipsed 19% OI margin in Institutional in the third quarter, which was great to see. If you go back to pre-pandemic times, you were 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, you know, 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. 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 INS will end up in a better place post this 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 it 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. Of all the opportunities we have in front of us, all the challenges that we might be facing, I think Institutional is gonna be probably one of the best promises that we have ahead of us. Our next question comes from the line of Seth Weber with Wells Fargo. Please proceed with your question. Hi. Thanks. Good morning. You mentioned a few times in the slides, in the release, in your comments, just about new business wins. I'm just... You know, can you talk to, you know, the selling environment, you know, your, your sort of traction with new wins and how we should think about, you know, new adds going forward? Thank you. Thank you, Seth. Well, selling new business is what we're best at and what we like the most doing. So our 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. At the same time, we're bringing as well all the offerings, so from the company, especially water and hygiene in Industrial segments, but also in Institutional, which are very well received by our customers. 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. All in, a 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. Our next question comes from the line of Josh Spector with UBS. Please proceed with your question. ... Yeah. Hey, Christophe. And a question along similar lines, and particularly just related with just volume expectations. I mean, you were pretty confident a couple of months ago that you were gonna deliver positive volumes in 3Q. I guess it rounds down to zero, or maybe flattish is the best way to describe how that came in. You're talking about positive volumes in 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? Thanks. Yeah, volume is the most important driver, obviously, so for us. Q3 happened pretty much as expected. We can talk about rounding, obviously here, but we were in positive territory, which is good. If we exclude Europe, which is the most difficult place in terms of volume, we are at +1% already. I feel confident that in Q4, we will have a 1% volume growth overall, so 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 years, and in a market that not exactly booming right now, I feel really good with what we're doing, where we're heading. To your point, so for 2024, while it's the best way we can close the year with good volume momentum in order to start 2024 in whatever environment we're gonna find, with a company that's having good sales momentum, which is our number one priority as a company right now. Our next question is from the line of Mike Harrison with Seaport Research Partners. Please proceed with your question. Hi, 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 one-time 6% sales benefit, did that also help margins come in higher, or was that kind of an on average incremental margin contribution? Hey, thank you for your nice comment, Mike. It's three comments on your question. So focused on Healthcare, not Life Science. I know that they all combine, obviously, but two 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. 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 costs 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 gonna 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 gonna be always better, so, as we move forward. Now, the last point on the one-time sale was related to a contractual commitment that we had to deliver, so 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 gonna see, so in the next immediate quarters until we can truly accelerate by leveraging the power of institution. But overall, I like the progress that we're making on 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. The next question is from the line of David Begleiter with Deutsche Bank. Please proceed with your question. Thank you, and a very nice quarter, Christophe and team. Thank you, David. 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? 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, specifically procurement team, did also some remarkable work as well with our partner suppliers. So brought 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. I expect kind of the same type of costs, so 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 2023 when we talk about 2024. So I'm not banking on big improvement in the quarters to come, and if they come, well, we will all benefit from them. Thank you. The next question is from the line of Jeff Zekauskas with JP Morgan. Please proceed with your question. Thanks very much. 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 six-month basis, or a three-month basis, or an annual basis? Well, I have two ways to answer your question. So in a complicated way or in a simple way, Jeff. So I'll go for the simple way. You're right, that depending on the raw materials, it's monthly, some quarterly, some annually, with different types of contractual agreements. 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. The short way to explain it is usually we have a two or three quarters lag between, so the mark-to-market price changes, up or down, by the way, that impact two or three 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. Our next question is from the line of John McNulty with BMO Capital Markets. Please proceed with your question. Yeah, thanks for taking my question. 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? 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 kinda think about in terms of concerns going forward? How would you frame that? Hey, thank you, John. Well, industrial is in a very good place, actually. But I'd like to ask Scott, maybe, so to give some perspective on margins evolution. Yeah, happy to, Christophe. So, yeah, as you're referring to, the industrial-wide growth was at 8%, but the growth rates are really impacted by a couple things. Certainly, there's a base comparison to last year. If you look at this on a two-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 they were certainly the, the biggest impact by that, but on a dollar basis, that OI really remains very strong and think we'll continue to improve off these levels. But really, as, 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. Yeah, as mentioned early on, John, I like a lot the performance of industrial for the past few years, and that's gonna 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 gonna see in the fourth quarter as well. So it was kind of a one-quarter story, underlying performance, very strong. Our next question comes from the line of Manav Patnaik with Barclays. Please proceed with your questions. Thank you. Just a two-parter, Christophe. So, you know, in the pricing, firstly, I think, you know, in terms of what you already have in place, if you roll through it, and you get mixing of the 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, you know, the new sales pipeline that you're really confident on, like, how big is that to perspective? Like, how much of a, you know, volume headwind can that offset? Great question, Manav. So 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, so volume accelerating. 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 wanna 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 when I look at what's gonna happen in the next few quarters. So in Q4, the carryover from last year, by definition, is gonna get close to zero, obviously, since it's gonna 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, so to go too much in details, but we're gonna be pleased with the pricing that we have while we keep accelerating, as well, the volume. So really keeping both in a very good place. 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 new 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. The next question is in the line of Shlomo Rosenbaum with Stifel. Please proceed with your question. Hi, good afternoon, and thank you for taking my question. Hey, Christophe, I want to get back to a question that was asked earlier in terms of the volume. It sounds like after three quarters of negative volumes, you're starting to get into the positive territory. Could you just go into kind of some of the kinda 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, you know, what's going on in various areas of industrial. Obviously, Paper is down, but, you know, what are the standout areas where you might have accelerating volumes in versus the ones which are shrinking and, you know, how we should think of that, you know, going into next year with some of the softening end markets? Yeah. So to, 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 two. Everything else is trending, in either, positive direction or improved direction, if they were, on the negative side. I'm especially, pleased with the INS, so Institutional Specialty, improvements, and water is gonna keep improving as well. So those two key businesses, are gonna be good, in the quarters to come, at least with, what we're seeing, as well right now. 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. We know that competition has a lot to do, with themselves, by the way. It's providing us an opening for us to gain share as well, and our team is doing an excellent job in Pest Elimination, where we see our growth really steady, strong, and margins as well at the same time, so keeping improving. So overall, our business in a very healthy place, with a few places where we need to work on, as mentioned, so Europe and Paper. 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. Our next question is from the line of Andy Wittmann with Robert W. Baird. Please proceed with your questions. Oh, great. Thanks for taking my question, guys. 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 $0.05, and actually, the guidance for fourth quarter is pre-tax 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 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? Yeah, certainly, Andy. Happy to do that. Thanks for the question. Yeah, so if we look at Q3, yeah, 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 to your question on where we are focused on it. This was really targeted around Institutional and Healthcare and as well as Europe. It started in the end of last year, and then we added on to it earlier this year, and that's what really drove it. But really around the timing of it, still expected, as I think I've talked about in previous calls, that about of that program, about 90% of those costs are gonna be done by the end of next year, okay? And so there will be a little bit of a tail, going into next, the 2024. 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. ... Let me add a few comments here. So I totally support what, what Scott just said, obviously, and really happy that, most of the combined programs are, 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. Our next question is from the line of Steve Byrne with Bank of America. Please proceed with your question. Yes, thank you. Christophe, I'd like to hear your view or maybe ranking among your four 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, you know, either utilizes your digital approach or whatever, to be more efficient and help you reach that 20% operating margin goal? There may be two questions in your question here, Steve. So first, in terms of share gain, we're not a consumer good company, so it's a bit harder to have the exact numbers, obviously, here. But directionally, when I look at the big ones, so INS are up 12% in a flat market, so that's obviously indicating so very interesting, so share gains. 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 E.U. is negative, so that's also showing, so share gain as well. As mentioned, in Healthcare, growing back again is also showing quite a healthy performance. Overall, I like a lot how we're progressing versus our peers in the marketplace. Now, to your question on SG&A, as I've shared with you in the past, I think that ultimately the company is gonna be much bigger in the years to come. I don't think that our team is gonna be much bigger, but I'm not expecting the team to be reduced, but it might be in different places. I wanna make sure that the number one place where I wanna 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, 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 margin. So the way I think about SG&A in ratio, it's gonna 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 frontline with our customers, which has been core to this company for the years past, too. Thank you. Our next question is from the line of Patrick Cunningham with Citi. Please proceed with your question. Hi, good afternoon. On the Life Sciences business, how should we think about, you know, new business growth and investment into next year, you know, given some of the persistent near-term weakness, you know, sort of juxtaposed with the long-term growth opportunity and margin expansion that you highlighted in your Investor Day? Yeah. 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. And I see that, so 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'll see how many more quarters that's gonna last, so for the industry out there. But I'm very bullish with where the industry, as a whole, is going, in the years to come. Now, when it comes to our own 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, so versus our competition. And it's in that time that Ecolab usually focuses the most in investing, so 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, so for the years to come, to deliver our goals, 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. If the market is a bit different short term than what we had expected a year or two ago, our investment plan haven'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. ... The next question is from the line of Kevin McCarthy with Vertical Research Partners. Please proceed with your question. Yes, good afternoon. 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, I think you've now separated, Infection Prevention from surgical, and maybe you can kinda talk through, what you're seeing in terms of, incremental benefits from that in the early days as, as it relates to, you know, customer, touches and, and productivity and the like. Yeah, thank you, Kevin. So three things: First, this 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, so the surgical business. And the fact that Infection Prevention is now so managed by the institutional team, well, we get not only so 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 Healthcare as well used to be. So in terms of transformation, I like the progress that's being made. Now, in terms of growth performance, if I think short term, speak 2024, I think H ealthcare is gonna be below average of the company, and more longer term, well, my objective is to make sure that our Healthcare business becomes at least at the average of the company, if not better, but that's gonna take some time and some work in order to get there. Our next question comes from the line of Vincent Andrews with Morgan Stanley. Please proceed with your question. Thank you, and good afternoon, everyone. Just a question from me on inventories. Just looking at it, it's down, I don't know, mid-high teens year-over-year, but your volume's kinda flattish and price is up on your delivered products. So I'm just trying to understand, if raw are still sort of flattish, what's helping the inventory come down and improve the working capital performance? Thank you, Vincent. I'm gonna pass this one to Scott. Thanks, Vincent. Be happy to answer this. So, yeah, 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. 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. Our next question is from the line of Rosemarie Morbelli with Gabelli Funds. Please proceed with your question. Thank you. Bonjour, Christophe. Bonjour, Marie. Congratulations, everyone, on that great quarter. Institutional did really quite well, and 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, you know, to reflect this different world, 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. Thanks. Hey, 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 so 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. 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 a two-in-one, a three-in-one, 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 two 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. So at the end of the day, if our industry hadn't changed for a long time, like hundred 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 gonna 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, the good news and cleanliness is gonna improve as well, in the hotels that you're gonna visit. Thank you. The next question is from the line of Scott Schneeberger, Oppenheimer. Please share your question. Thanks very much. Christophe, could you give us an update? It's been, I think, nearly five 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? Thanks. Well, the two are very different, obviously. So data centers is growing at incredible rates. We're not giving so the detail here, but it's it's strong, and it keeps accelerating. So it's north of 30%, so which is quite remarkable. You see that, so with the high tech companies, obviously, so 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. 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, while you need to have much higher level of hygiene in the farms that are growing, obviously, so 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, 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 and beverage business, which is doing really well overall. So I like both focus and investments that we making in those industries, but they're very different from each other. Thank you. Our next question is from the line of Josh Spector with UBS. Please hear your question. Yeah, hi. Thanks for taking my follow-up. I guess two quick ones, probably both for Scott, 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-$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? And just second, you have about $1 billion+ in debt due in the next couple quarters, pretty low coupon. Are you looking to pay that off, or would you roll that? Thanks. Yeah, Josh, I'll handle the two follow-ups. The first one, on the debt and where we sit today, have strong liquidity, as you saw in the free cash flows for the third quarter and the expectation for the full year. And we ended third quarter with around $1 billion of cash. And so where we sit today, my expectation would be we'd pay down both maturities due in December and January. Combined, it's a little over $1 billion. So expectation there, 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, where at the end of the third quarter, leverage ratio was about 2.5 and feel very good by end of next year to get back down to our historical sorta 2x range. 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 you talked about, but the year-over-year, really largely driven by this incentive compensation. 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. The, 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 head count year-over-year was down on SG&A 2%, and so our sales per head was up about 7%. So showing that good productivity, and I would expect it's early to sorta, you know, talk about 2024, but we'll expect to continue to drive great productivity next year, leveraging the technology that we've continued to deploy, and really increasing the time that our sales team spent on creating customer value. Maybe two points to build on what you just said, Scott. On SG&A, it's 100% under our control. We've demonstrated so 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. 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 so 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. So on the two sides, I keep looking for good progression, both on SG&A productivity and the strengthening of the balance sheet. 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. Thank you. That wraps up 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 and participation, and hope everyone has a great rest of your day. Thank you. Ladies and gentlemen, thank you for your participation. This does conclude today's teleconference. You may now disconnect your lines, and have a wonderful day.