Greetings. Welcome to the Ecolab second quarter 2026 earnings release conference call. At this time, all participants are in a 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 is now my pleasure to introduce your host, Andrew Hedberg, Vice President, Investor Relations for Ecolab. Thank you, Mr. Hedberg. You may begin. Thank you. Hello, everyone. Welcome to Ecolab's second 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.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 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 in our posted materials. We also refer you to supplemental diluted earnings per share information in the release. With that, I'd like to turn the call over Christophe Beck for his comments. Thank you so much, Andy. Welcome to everyone joining us today. Well, we delivered another strong quarter with accelerating performance across our business. Adjusted EPS grew 11%, driven by accelerating organic sales growth of 5%, stable organic gross margin, and continued strong productivity. This performance reflects the strength of our growth model and most importantly, the power of our global team to deliver for our customers every day in any environment. Last quarter, we talked about the second quarter being a short transition period. We entered the quarter with commodity costs increasing and the expectation that they would remain high through the year. We started the quarter with very little surcharge pricing, but expected benefits from the surcharge would progressively build through the quarter. That's exactly what happened. We moved quickly to implement the global energy surcharge backed by incremental customer value as we always do. As a result, pricing strengthened to 4% in the second quarter, and we expect the second half to be in our targeted 5%-6% range. It is allowing us to offset the impact of rising commodity costs on our margins and EPS this year. Our global team executed extremely well through this transition period. In just one quarter, we absorbed increasing commodity costs, continued to win new business, grew volumes, stabilized organic gross margin, and delivered double-digit EPS growth. Importantly, momentum continued to strengthen across the portfolio. Volumes grew 1%, despite a nearly 1% headwind from customer operations disrupted by the conflict in the Middle East. Excluding this, underlying volume growth accelerated from the first quarter. Growth in our core businesses strengthened, with Food & Beverage accelerating to 7% growth, Institutional & Specialty growing 4%, and growth in Light Water improving, all supported by strong new business from our One Ecolab Growth initiative. At the same time, performance in Heavy Water and Paper improved. Our growth engines continued to show strong momentum, delivering strong double-digit growth. Life Sciences accelerated to 15% growth, driven by very strong share gains in bioprocessing and pharma and personal care, and improved performance in purification. We have been investing in talent, capabilities, capacity, and breakthrough innovation for years in this high-growth business, and those investments now are clearly paying off. In bioprocessing, we continue to take market share with the innovative resin technologies we've launched over the last few years. As a result, our business continues to rapidly scale as customers move their drugs into commercial manufacturing. Life Sciences margin performance was exceptional this quarter, delivering a mid-20% operating income margin, giving a strong indication of the high margin profile this business has. During the quarter, we benefited from very strong sales growth and a spike in bioprocessing. While underlying operating income margin is expected to remain in the mid-20s, reported margin in the third quarter is expected to be in the high teens as we continue to invest in this high-growth, high-margin business. Ecolab Digital grew 27%, reflecting strong adoption of software and connected solutions that help customers optimize performance in real time. Recent launches of solutions like DishIQ, AquaIQ, KitchenIQ, and CIP IQ are performing very well and are expected to continue to help drive long-term growth of more than 20% for Ecolab Digital. Pest Elimination also delivered a strong quarter with 7% growth, driven by share gain from our One Ecolab Growth initiative and continued expansion of our Pest Intelligence platform. We've deployed nearly 800,000 connected devices at customer sites and continue to expect to reach 1 million connected devices by year-end. With the unique insights from Pest Intelligence, we aim to deliver nearly 99% pest-free environments for customers on the platform. Growth in Global High-Tech accelerated to 29%, reflecting very strong demand across both microelectronics and data centers, driven by the rapid build-out of AI infrastructure. We further strengthened our position in this market with the acquisition of CoolIT Systems, which closed on July 2nd. CoolIT is off to a very strong start, with year-to-date sales growth prior to acquisition of more than 100%. With this addition, Global High-Tech is now approaching $1.5 billion in sales, annualized sales up from approximately $150 million in 2021. This reflects the strength of our strategy and sustained investments to capture the long-term opportunity in advanced computing. At the heart of AI is water. Water is required to produce, to power, and to cool chips. We are now the only company with integrated solutions across that value chain. With all the talks around data centers and AI infrastructure, the world truly needs companies that can help build data centers the right way. We're one of them, and we're committed to lead that journey. Together with Ovivo and CoolIT, our Global High-Tech platform is expected to grow more than 25% annually, reaching $4 billion in sales by 2030, with an operating income margin of 25%. These targets represent an increase from our previous expectations of more than 20% growth and 20% OI margin, reflecting the acceleration we are seeing in this business. Global High-Tech is now our largest growth engine. On a pro forma basis, including Ovivo and CoolIT, our sales growth would have been approximately 7% in the second quarter, demonstrating already the two points of incremental growth these businesses will add to the overall company. The rapid growth of Global High-Tech and our other growth engines continues to shift Ecolab's portfolio to higher growth, higher margin businesses. In 2025, our core businesses represented about 70% of our sales, growing low single digits with OI margins just above 20%. Our growth engines were approximately 15% of sales, growing low double digits with OI margins of nearly 20%. Our underperforming businesses represented about 15% of sales, with low single-digit sales declines and OI margins in the mid-teens. In 2026, performance has strengthened across all three groups. Our core businesses are now growing mid-single digits, with OI margins getting further above 20%. Our growth engines are growing in the low teens, with OI margin of nearly 20% as we continue to invest heavily behind these attractive high-growth opportunities. At the same time, our underperforming businesses have stabilized while maintaining operating income margins in the mid-teens. What is the most encouraging is that all parts of the portfolio are moving in the right direction. Our core is performing well, our growth engines are scaling faster, and our underperforming businesses are improving. As a result, the mix of our business continues to shift toward faster-growing, higher-margin markets. Looking ahead to 2027, we expect this trend to accelerate further. Our core businesses should continue to deliver strong performance, while our growth engines, which are expected to approach 25% of Ecolab's sales, continue to compound at double-digit rates and play an increasingly important role in driving growth and margin expansion for Ecolab. That future is already taking shape today. We're preparing to introduce a breakthrough innovation at SuperCompute, a new integrated end-to-end cooling platform combining CoolIT's liquid cooling technologies with Ecolab's 3D TRASAR digital capabilities to optimize water, power, and compute performance at scale. We will be hosting an Investor Day at Supercomputing in Chicago on November 17th, where we will share more about the growth opportunities ahead and how they will strengthen our long-term performance. As we move into the second half, we expect continued momentum. Pricing is anticipated to strengthen to the 5%-6% range as energy surcharge benefits are fully realized. Volumes are expected to continue to grow as strong new business wins more than offset ongoing disruption in the Middle East. As a result, we expect organic sales growth of 6%-7%, helping drive an adjusted operating income margin of 19% in the second half, keeping us on track to deliver our 20% OI margin next year. With this momentum, we're increasing our outlook for 2026, where we now expect EPS in the range of $8.05-$8.25, rising 7%-10% versus last year. This range reflects strong underlying performance and a short-term impact from non-cash amortization and financing costs from the CoolIT acquisition. Beyond this year, we continue to expect adjusted EPS growth, including CoolIT, to accelerate to a strong 12%-15% growth trajectory. In closing, our business continues to strengthen with the core improving and growth engine scaling. With this, our portfolio is shifting faster toward higher growth, higher margin, and markets. Just as importantly, our team continues to execute at a very high level to deliver for our customers every single day. We've never been better positioned to deliver long-term organic sales growth of 5%-7%, expand operating income margins well beyond 20%, and continue strengthening our EPS growth algorithm. Thank you for your continued trust and investment in Ecolab. I'll now turn it back to Andy for Q and A. Thanks, Christophe. That wraps up our formal remarks. Operator, would you please begin the question and answer period? Thank you. We will now be conducting a question and answer session. We ask that you please limit yourself to one question so that others will have a chance to participate. If you have additional questions, please rejoin the question and answer queue. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Our first question will come from the line of Tim Mulrooney with William Blair. Please proceed with your question. Yes. Good afternoon. Thanks for taking my question. Thank you, Christophe, for reaffirming the 20% operating margin target that you have for 2027. I was there in my model, but then when you acquired CoolIT, there's so much extra amortization there that I actually came off that margin target. Now you reaffirmed it today, can you just help bridge that gap for us? There's a lot of extra incremental amortization coming through on the CoolIT side. Just want to make sure I heard you right. You are reaffirming the 20% operating margin target for 2027, can you help us understand how you plan to offset those incremental expenses flowing through? Thank you. Yes, Tim, you understood that right. We've been very consistent, by the way, on making sure that we stay on our commitment of delivering 20% operating income in 2027. That remains unchanged. I'll ask as well Scott to add some color to it in a second. Before we get there, our expectation and everything that we're doing is ultimately to drive our commitment of 5%-7% organic sales growth to 20% OI margin and a strong 12%-15% earnings per share growth. Ultimately, our job is to make sure that everything we're doing, not only leads us to that, but leads us to beyond that. That's especially true for the 20% OI in 2027. I spent, together with the team, a lot of time as well to think how do we get beyond the 20% after 2027. The vast majority of our businesses today are already either close to 20% or beyond 20%. We know well how to do that. The second half of this year, the adjusted OI margins will be at 19% as well. All leading nicely towards the 2027 story. It's going to be important to keep in mind that the first half and second half of 2027 will be a tale of two stories because of the lapping, obviously, of the CoolIT acquisition that closed early July. The 12 months, mid-next year, and then the second half of 2027. In other words, the second half of 2027 will be even stronger. As mentioned before, my objective is really to not only deliver on those commitments beyond 2026, but really making sure that we get beyond the 20%, that we can strengthen these 5%-7% on the organic, and also on the earnings per share, the 12%-15%. I guess that's going to get stronger as well over time. Scott, do you want to add any color to that? The only thing, Tim, that I would add is that next year, as you might remember, the Nalco amortization falls off. That also is part of when you said how do you reconcile that we do get the benefit of annualizing the CoolIT amortization, but offset by the Nalco amortization. Thank you. Our next question comes from the line of Manav Patnaik with Barclays. Please proceed with your questions. Thank you. Good afternoon. Christophe, I was just hoping within High-Tech, could you just help us with the current mix of the business between data centers and microelectronics, or however you want to rake it out and just some more color on your confidence on getting to that $4 billion target, I guess. Hi, Manav. High level, obviously, since we don't go much in detail, for the size of the business right now, it's roughly $1.5 b illion annualized sales. Obviously, right now when you have our legacy business, microelectronics, and data centers within legacy, then CoolIT, and then Ovivo, which is in microelectronics. Each of them is roughly half a billion today of annualized sales. That's how you get to the $1.5 billion. For perspective, we were $150 million just a few years back. This is a platform that we've built over the last few years extremely rapidly. The very good news is that all three elements are growing very nicely. You've heard about the legacy business growing 29%, Ovivo expected to deliver some mid-teens for this year, and CoolIT being north of 100%. If you add it all up, you get to a very good place. Our trajectory of 25% growth for the next few years leads you to the $4 billion by 2030, and feel quite confident that that's very realistic. Thank you. Our next question comes from the line of Ashish Sabadra with RBC Capital Markets. Please proceed with your question. Thanks for taking my question. Just wanted to follow up on the Global High-Tech. You mentioned the integrated end-to-end cooling platform that you plan to launch at the SuperCompute. I was just wondering if you could help or discuss how that can help drive more cross-selling opportunity across all the different Global High-Tech offerings that you have. Thanks Thank you, Ashish. Well, generally as we mentioned when we did the acquisition of CoolIT, adding CoolIT to a data center multiplies between three and five times the sales opportunity that we have compared to legacy Ecolab in a data center. Much bigger obviously than what we had before. That's the penetration of solutions opportunity. The most interesting part is when you put all the pieces together from a CDU integrating 3D TRASAR control technology to a 3D TRASAR coolant to cold plates that are integrated in that system and ultimately an end-to-end optimization system to reduce the power used to cool while using zero net incremental water because everything is within the system is the biggest upside obviously. For our customers and with everything that's happening right now in the AI infrastructure and data center pushback in the communities, well, as mentioned, the world needs a company that can help this industry scale fast while doing it the right way, both in terms of cost performance and in terms of impact on communities and natural resources. I think that we're very uniquely placed here to do that, and it took us just two weeks basically to get the 3D TRASAR technology embedded in the next generation of the CDU. For CoolIT, it's a good example of how the two teams have come together. It's going to be really good to share with all of you and with customers obviously at SuperCompute how everything comes together. Last thing I'd say, we really look at it from an ecosystem perspective. We will not be owning everything. We don't want to get into a lot of hardware obviously out there, but we want to be the platform that ultimately all the other elements have come around in order to truly maximize cooling, minimize the water and energy usage, and maximize ultimately the uptime and performance of the data center as well. A typical Ecolab story where the outcome of the operations is the main objective we have. Thank you. Our next question comes from the line of John McNulty with BMO Capital Markets. Please proceed with your question. Good afternoon. Thanks for taking my question and congrats on some really solid results. Just wanted to ask or dig a little bit deeper on the Life Sciences side of the business. Clearly there's a lot of interest on the bioprocessing side. We've seen a number of drugs kind of hitting the market or starting to hit the market. At the same time, you've outpaced the other major competitor in the space by a decent amount. I guess can you help us to think about how much of it is just the end market growth, how much of it is share gain, and how much of it may be just some of the capacity unlock that you've been working on as well? Thank you, John. Very pleased with the Life Sciences team. It's been a few years in the making. As you know, we started that business in 2017. It was less than $100 million, and today it's close to $1 billion. 10 times the size of where it was back then. We made the acquisition of Purolite in 2021, and the COVID implications on the market have been a little bit difficult to manage for the whole industry by the way. When I look back and think about what the team has done in how to build capacity, capabilities, relationship with customers, trust that we can really be the best partner in the future, well, I'm super pleased with what the team has done. We were not on the trajectory we had initially planned as you know since the acquisition of Purolite, but we have always been growing when the rest of the industry was not. Not in line with what we had expected, but better than competition. The very good news right now, John, is that while we're not only outperforming the market and competition, but we're back in line with our returns expectations that we had set early in that process. Really happy with the trajectory, the returns, the work that's been done by the team. Ultimately the most important element is to listen to our customers that are really pleased with the agility of the team, the innovation strengths of this team being very entrepreneurial need to be as close to them what they need short term in order to deliver the life-saving drugs that they're trying to bring into the market. We knew we would not become in the short or medium term the largest life science player in the industry, but our objective to be the best performing and the best partner of our customers, I guess that we're pretty close to that ambition right now. Early, but good news for the future. Thank you. Our next question comes from the line of David Begleiter with Deutsche Bank. Please proceed with your question. Thank you. Afternoon. Christophe, on CoolIT, when the business was acquired, you mentioned perhaps a 30% type annual growth rate to the model going forward. Given the 100%+ growth rate in the first half of the year, should we update our models to a higher growth rate over the next few years here for CoolIT? Really like this acquisition. That's one of many where, obviously, before I embark on such a journey, I had my set of sleepless nights. When I look back, well, I'm really saying, I'm glad we did it, because this is the best technology in the market. It's the best performing business as well, in directed sheet liquid cooling technology. I've been so impressed with the team that I've met at CoolIT and how these two teams are coming together. Now, David, it's been two or three weeks that we together, it's very early, and we're getting to know each other, starting to work together with customers. It's so early that we're not in a position to change anything. If I look at the trajectories, well, they're better than what we had thought. That's the good news. When we did our plans for the next four, five, 10 years, a lot can happen. That's why we've picked a trajectory of 30%, which I think is the right one. True that the first half of this year for CoolIT has been way better than that. Acceptance by customers of the latest technologies of CoolIT is extremely good and even better when we come together with Ecolab. That's an even better sign. That's the reason why we'd like to be together with you in November at SuperCompute, is basically we will have four or five months of working together with CoolIT. We better understand how it works, what's to like, what we need to work on, what's the new type of trajectory. Too early to change right now, but give us the time the next few months to really get the teams together, making it really well work together with the customers. In November, we will sit together to share with you how do we see 2027, and the years beyond. Thank you. Our next question comes from the line of Chris Parkinson with Wolfe Research. Please proceed with your question. Christophe, I'd love to just circle back to Life Sciences, just given the trajectory there and all the work you've been doing with your team in King of Prussia. Just a few things that I'd like to break down. First of all, just how you see the trajectory of some of the biopharm applications versus some of the purification and resins, how much this is attributable to basically the beginning of the ramps in both King of Prussia and Wales. Then also, correct me if I'm wrong, but a lot of that business initially started off in larger scale in Europe, and it seems like you've been making a lot of investments in leeway with partners in the United States. I'd love to just drill down to just anything that you can do to basically increase the probability of The Street sustaining this type of growth and trajectory, especially relative to the 2027 margin targets. Thank you. It's been a few quarters now that Life Sciences has been on the high end of the expected performance, which is a very good sign. I've been very open with you that the early years of that journey, we were growing faster than the industry, but we were not growing as fast as we were expecting, or I was expecting. That's a time behind us, and it gave us the opportunity to build those capabilities and these capacities that we needed around the world. We just opened our latest, one of the biggest plants in China a few weeks ago. That's going to give us a big footprint in a market that's going really well for Life Sciences, the industry, and for us. By the way, expanding as well around Asia. In Europe, the core of Purolite came from Europe as well, both Eastern Europe and Wales, as you mentioned, for bioprocessing and capacity as well in North America that we've kept building and that we will keep building. It's always been part of our strategy to be on each of the three continents, North America, Europe, and Asia, and we're almost there, and it's never going to be enough because it's growing fast. That's a good problem to have as well. We have great teams as well that we had to build. Bioprocessing is the fastest growing one. It is a very interesting, very technology-leading type of business that we will keep as the anchor in the biotechnology industry. I'd like to add as well our whole pharma and personal care business that's focused on contamination control, basically making sure that the environment where the drugs are being produced is as healthy as it can be. This business is doing extremely well as well at the same time. The purification business, that's kind of lower grades type of products, but still on the same platform. We were capped by capacity constraints. As you know, that's changing with the opening of the plant in China. That's going to help us as well sustain the growth trajectory of that business going forward. We're in a place where we have very good momentum. Our long-term target was 10%-12%, by the way, so we are ahead of that range right now. Our margin, to get towards the 30% OI target, we will get there. We see the line of sight to get there, I want to make absolutely sure that we keep investing in capacity and capabilities in the meantime in order to get the business that has not only the critical mass, but the right momentum to keep winning in the future. Kind of a little bit of an overview of what we're trying to build here, all driven by research, by innovation, by science, which is ultimately what's most important for our customers, and it's working really well. Thank you. Our next question comes from the line of Seth Weber with BNP Paribas. Please proceed with your question. Hey, guys. Good afternoon. Wanted to ask a little bit about some of your old economy stuff. I was struck by your comment that you think paper could see some modest growth here in the third quarter. Do you feel like we're past the bottom in some of these categories, or is it just maybe less bad and pricing is helping? Can you just help us frame what's going on in some of your older economy stuff? Thank you. I'm not sure I would call that old economy, but it's more traditional businesses. For sure, we know that those businesses are not going to grow as the growth engines do. That's why we have that differentiation, by the way, between growth engines, double-digit type of business. Our core business, which is the key of our company, kind of in this mid-single, and then you have the lower growth businesses that I've called, with some affection, underperforming, because they were underperforming for a while. To your point on paper, well, the good news is that it was fairly positive in Q2, which is a big deal, obviously, for that business after more than a year being in negative territory, impacted by the industry that was not doing great, and then an industry that was consolidating because of that. We lost a lot of paper mills as well, and when we lose a paper mill, that has a big impact on our sales because they use a lot of our solutions. We can see that the last six months, that consolidation has stopped, or paused, and that things are getting slightly better. Here as well, we are a bit better than the industry, so we're gaining share, which is good thing as well. Very positive in Q2 for the Paper team. I feel really confident with the great leadership that we have there to get even more positive in Q3 and beyond. I'm cautiously optimistic with that business. It's having good margins, by the way, important to keep that in mind. Yeah, they're improving and they're in positive territory, so they're generating value for shareholders, which is the first step towards greatness. Thank you. Our next question comes from the line of Laurence Alexander with Jefferies. Please proceed with your question. Hi, I'd like to revisit the Life Sciences. Can you just dig in a little bit on bioprocessing? Are you mostly winning share in the early-stage preclinical, or are you also getting equivalent share gains in the later-stage commercial? Really, I'm trying to dig into your CapEx. You're talking about big CapEx, I think was the words you used. Are you trying to get your CapEx additions ahead of your growth rate so you can go into adjacencies? Or should we be thinking about this CapEx cycle as this is kind of the run rate that you'll be continuing into the 2030s because that's just how fast the end market is growing? A few things, Laurence. First, bear with me. I'll have to be careful into how much details I'm going on the sensitivity of the competitive situation. There's very few players in that industry. We know each other very well. We all understand that what we do is sustaining lives around the world. I'm very careful how I'm going to talk about that. Generally, we have a very good position now across the whole spectrum between early innovations, clinical trials of various stages, and commercial drugs, that the team has done very well in terms of jumping ahead the queue, in some cases, to make sure that we were covering the whole chain. As you know, it's another type of approach. You need to have a lot early in order to get a few big ones later. That's the rule of the game, obviously, in Life Science. Now we are ideally positioned, as the team has done, in order to make sure that we can sustain and accelerate the growth in the future. The question on our investments, we've clearly been investing ahead of the growth in that business. That's why we were talking about reported growth in the mid-teens and underlying growth in the mid-20s. Those 10 points were investments ahead the growth as we want to see that business driving 30%-ish type of margin at cruising speed. I don't want to get too quickly ahead of that. This is an industry of perfection. The quality of the products, of the team, of the delivery, of the innovation. It takes time, it takes depth, it takes passion and commitment to get it done. As you can see now, the underlying margins are getting closer to the reported margins, which is a good thing. Q2 was a little bit of an extreme because we had a spike in bioprocessing. It's not every quarter created the same, generally the trajectory is very good. I like our competitive situation, as mentioned before, we don't have the ambition to become the biggest. We want to become the best life sciences business in the industry. Thank you. Our next question comes from the line of Vincent Andrews with Morgan Stanley. Please proceed with your question. Thank you very much. To go back to CapEx, Christophe, when you acquired Cool IT, my recollection is you said that they had enough capacity on their own to supply a doubling of their sales, which seems like a pace that they're very much on. I think you separately said that the plan was to go asset light, similar to how you do it in your dishwashing business, where you design and have the IP, and then somebody else does the manufacturing. Just wondering if you can tell us where you are in that journey, given it sounds like the growth rate of Cool IT is really moving maybe faster than originally thought. Yeah. Generally, directionally, absolutely no change. What you've said is still valid with one small exception, which is a good one, is that the growth seems to be faster than what we had expected for all the reasons I mentioned before. The leading-edge technologies that Cool IT is having, the combination of Ecolab and Cool IT coming together, providing the market with something that no one else can provide in terms of higher performance, no water, and less energy to do the same job as well. Generally for the company, I don't see big changes. For our High-Tech business, we might have to go faster, which is exactly what we'd like to see and you'd like to see, I guess, as well. Let me ask maybe Scott, if you'd like to add any perspective on CapEx in general. Yeah, just more broadly, as Christophe talked about, we will invest ahead of growth in the growth engines, but expect that the CapEx as a company to remain similar to where we're at now for the next couple of years, and we've talked about this for a little while. Likely remaining around the 7% the next couple of years, because we are investing ahead for the Global High-Tech business and Life Science. As we scale these growth engines, we'll continue to evaluate it. We're always going to take advantage of these attractive returns. Thank you. Our next question comes from the line of Patrick Cunningham with Citi. Please proceed with your question. Hi, good afternoon. Just on Food & Beverage, pretty strong 7% sales growth there. A pretty good execution against a flat broader industry. I guess, can you share details on what is contributing to the increased traction there, and how much acceleration do you expect to see within this business over the coming quarters? Food & Beverage, which is one of those core businesses that we have that I think is one of the best global businesses we have. It's one of the best teams around the world, serving a very sophisticated industry of consumer goods companies with big brands everywhere around the world. It's a business I love. I love it even more looking at the performance that this business is driving. You mentioned 7%. If you remember, so our long-term target for this business is 5%-7%, they are at the higher end of that range. Why that? I'll give you the simple answer here. It's the One Ecolab approach, where the team has brought together our food safety capabilities with our water capabilities as one integrated organization. It's not just two teams playing nice together to serve the customer. It's an integrated team with experts in food safety and experts in water working on the same team for the same customers anywhere around the world. We're not done yet. We've done the work in North America, where the teams came together and ultimately, well, again, position it as a strategic idea of producing safe food while using less water and energy, there is a much more mundane driver of the growth, is the cross-selling. How do we sell food safety solutions into water customers and water solutions into food safety customers? That's a sales execution play with a good strategic intent. That's been the main driver. The execution has worked really well. We're expanding what we've done in North America now around the world. That will take some time, it's also driving some good runway of momentum for the years to come. Last but not least, with what you're hearing as well on the market, producing safe food. Well, it's something that is pretty top of mind for everyone right now, being in restaurants, being in retail. What we're doing is even more in demand than what it was in the past. Thank you. Our next question comes from the line of Eric Boyes with Evercore ISI. Please proceed with your question. Thanks and good afternoon. I think Ecolab Digital is nearly at a $500 million annual run rate and growing 20%-30%. Smaller than Global High-Tech, but pretty attractive incremental margin. I was wondering if there's anything you can share on the trajectory for digital into 2027. Maybe talk to the margin contribution then. Why not push through a faster transition to the subscription model, given the value proposition of the offerings? Thank you. Thank you, Eric. What you said is absolutely true. As well, on what you said, pushing for more faster, we're speaking the same language here. There's a lot of execution that needs to happen, obviously, in between. I'm very pleased with the progress that we've made over the last couple of years. As you know, it's a pretty new business as a business, not as an activity. We've been on digital since we invented 3D TRASAR. Just for memory, it was invented in 1991. It's been a long time that we've been in connected devices, but they were obviously not connected to the cloud, to mainframes, and all the complicated technology that we had. Today, that's the good news. Well, we have hundreds of thousands of connected devices and thousands of customer locations around the world. We have a great installed base with a good critical mass that only a few companies have out there. We know that for almost 30 years of that journey, we were doing that for free without going for subscriptions and making sure that we were remunerated for the value and the offering that we are providing for our customers. We changed that two years ago. That was a change for customers, not a change for the industry, because that's what tech companies are doing for a living, as well as making sure our teams know how to do that. That our customers realize that, yes, they pay for something that is something that we're used to. It's new, but it's driving as well incremental value. That's why we've introduced internally that playbook, which we call the 100/100/100 model, Eric. Which is basically to say we want to connect 100% of the customer locations, 100% of the applications within those customer location, and that 100% of them generate revenue. If you add all that, it drives a potential value of $3 billion. $3 billion is the revenue we could generate doing exactly that within our current customers. We are at $500 million today, and that's why growing towards the $3 billion is the job number one. We all aligned that we'd like to grow even faster, and I guess we will get there at some point. What's even better is that the $3 billion opens $10 billion incremental to it for applications that we haven't sold yet or customers that we haven't sold yet. Early on that journey, but on a very good trajectory so far. Thank you. Our next question comes from the line of Shlomo Rosenbaum with Stifel. Please proceed with your question. Hi, thank you very much for taking my question. Christophe, could you talk a little bit about the volume trajectory? It looks like it picked up, and the implication is if you would not have had the impact from the Middle East war, you would have picked up to 2% volume growth. Could you talk about where you're seeing the volume increases, where you might not be seeing them, and geographically, maybe from a high level, which areas of the business? Really, what should we be thinking about that? We've been accustomed to seeing some of the growth in terms of the pricing, but it's been a while since we've seen volume pick up to this level on what I would say a sustainable rate. Can you give us your thoughts on that? Yeah. Thank you, Shlomo. It seems like for the short term, for the next few quarters, the 1% run rate seems to be the right one. As you said, we were closer to 2% without the impact of the Middle East. Okay, we live in an imperfect world, and there will always be something somewhere obviously happening. We were all hoping that the Middle East would solve itself much earlier. Doesn't seem to be exactly the case right now. We're living with it, and that's why I'm saying, okay, the 1% trajectory is a healthy trajectory that I really like. This 1% is obviously the company average. You have the ones that are way ahead of that, and those are the growth engines in High-Tech, in Life Science, in Pest. But also, Food & Beverage has had some very good track records in volume. Then you have the other on the other extreme of the Paper and heavier industries that were in the negative territory. That's the beauty of the Ecolab portfolio, that ultimately, whatever happens in one business or one region in the world, we can keep a steady momentum, which I believe the 1% for the next few quarters seems to be the right assumption to make. Things improve out there. It's going to be better, but directionally, I think it's going to be 1%+ trending in the right direction. Ovivo and CoolIT, by the way, which are not in those numbers because they're not organic by definition. Well, they add almost two percentage points to it as well. You have this 1%+ the 2%± the Middle East I talked about. You get to some very healthy type of volume growth, which is exactly the place we wanted to be. Thank you. Our next question comes from the line of Scott Schneeberger with Oppenheimer. Please proceed with your question. Thanks very much. Similar question to Shlomo's, but on the pricing side, just curious how the energy surcharge is progressing. You've spoken about, hey, it's ramping up in second quarter, likely going to be more solidly in place in the back half. Just thoughts on that. The second part of the question is how is structural pricing progressing and thoughts in second half here? Thanks. We've always been pretty good at pricing. I think that we've become really good at value pricing because of all the practice that we were given for the last few years to manage through that. Let's not forget stepping back as well, that Ecolab, for a very long time, had an approach of getting the incremental cost back in dollars year one and the margin year two. A two-year cycle. Now in Q2, we managed to do both within three months, which is really a major change of the model. That's mostly driven by this value pricing approach, driven by this total value delivered that we're providing to customers, that customers are seeing that, yes, they're paying more, but they're getting more as well. Net-net, they are in a better place financially, which is where we laser-focused to deliver to them. It takes some time to get it done the right way. The fact that our retention of customers has remained super stable during all those years, well, it's a good indication that the approach is the right one. It's good for customers, it's good for Ecolab, it's good for shareholders as well at the same time. To your question on energy surcharge versus pricing, it's always an imperfect science because some of the businesses go straight into structural price. Others go in energy surcharge and move then afterwards in structural price. Honestly, I don't really care how the whole thing is happening as long as we get to the right place for us and for the customer as well. We exited to Q2 with 5% of pricing. When we're talking about 5%-6% in the second half, well, it's the exit trajectory of the second quarter. It's pretty solid, to say the least. Which is why I feel quite good that we can get this positive gross margin, organic gross margin in the second half because the team is really good at it. We have all the systems, the processes, the customers understand that, and we can manage almost any situation that's happening in the world that we cannot predict. We've demonstrated not only we can do it, but we can get it done in pretty short-term timing as well. Thank you. Our next question comes from the line of John Roberts with Mizuho. Please proceed with your question. Thank you. Pest Elimination has been delivering high single-digit revenue growth pretty consistently for at least a year now, and the operating margins are up around 20%. Does it accelerate to low mid-teens growth as you deploy digital and agentic AI? Do you spend the margin improvement, or do margins go up as you deploy digital and agentic AI? Well, John, it's going to be a sequential work here. First, on the top line. Our targeted trajectory is 6% to 8%. With the 7%, we kind of right in the middle of that targeted range, which is always an important first step to me, delivering on our promise first and then improving from it. The ambition of the team, which is an exceptional team, by the way, that we have in Pest Elimination. They're great at transforming the business, great innovation, working with the largest customers in the world in a difficult environment. The transformation they're doing is remarkable. I'm so impressed with everything that they're doing. It's going to drive top line ultimately even stronger. That's going to be the other good news. Back to the question on margin, it's a bit of a Life Science question. When we get into new technologies, new innovation, there is some need to create the right foundations first before we can really get the benefits of it. Yes, in the margin of Pest Elimination and in the operating income growth, you have investments behind. Pest Intelligence, but they're going to continue. As I've said, 800,000 connected devices will be north of 1 million by the end of the year. No other company is there around the world. Well, that requires efforts and investments, but ultimately, we know it's going to pay off both on top line and on bottom line in one of the businesses with the highest margins and the highest return as well at the same time. Early investments and ultimately better returns down the road. Thank you. Our next question comes from the line of Jeff Zekauskas with JP Morgan. Please proceed with your question. Thanks very much. Two-part question. The first is that you've acquired to accelerate your growth. Do you have goals for either return on capital or return on assets or return on equity, or goals that situate those metrics relative to where Ecolab was before the acquisitions were made? Secondly, in the Global Institutional & Specialty business, the organic growth was about 4%, and I would expect pricing in that segment to be higher than 4%. Was volume growth negative by 1% or 2%? I guess that may have had to do with the Institutional business. Can you talk about what's going on in that area? Yeah. Thank you, Jeff. Two very different questions here. Let me start with the second, and then I'll go to the first one, and then I'll ask Scott as well, so to add to the return question. On Institutional, really pleased with the steadiness. The 4% in Institutional & Specialty is the restaurants, hotels, and specialty retail and quick serve, well, allows us to capture consumers going to whatever segment, cheaper or more premium, depending on the economic state of the country, wherever our customers operate. In a place wherever people are going, we capture that growth. The 4%, I think is a pretty good, steady type of performance for that business. Keeping in mind that foot traffic in the U.S. in restaurants is down 5% year-over-year right now. The growth of the 4% versus the -5% in the restaurants is quite remarkable. It's not growth of life science, of digital, or of GHT. For such a traditional industry, we're clearly gaining share, and we're gaining margin as well at the same time, because that business is in the low 20s to mid-20s type of operating margins. A very strong, solid business with a franchise that's unmatched as well around the world. I&S, I'd love them to grow even faster, but honestly, I think that they are in a darn good place where they are now. Second or first, you question when you talk about organic versus non-organic. The results of growth that we had in the second quarter, especially if you adjust for the Middle East, well, that growth of volume was not acquired. That was organic. Yes. Now CoolIT and Ovivo, which have been acquired, are going to add a couple of points to the overall company. It's always been a kind of a combination of two-thirds or 80% core growth and 20% M&A. We're going to keep on that path as well, Jeff, and it's working quite well. I like it as well the return profile of it, but I'd like to ask Scott to comment on that. Jeff, as we talked about, obviously this specifically to CoolIT, but with all deals that we look at the specific investment or asset returns. As we've talked about with CoolIT, the returns on this are well above our cost of capital. More specifically, as we think about just the company as a whole, we've talked about ROIC for a long time. ROIC is sort of a point-in-time measure, and when you have a significant acquisition like this, that will have a dilutive impact in the short term. We still have a very focus on ROIC and growing ROIC, organic ROIC, as we define it by at least 100 basis points a year and feel very good about that. As we think about the impact of CoolIT, that will take a year and a half or so to annualize because of the denominator, but expect to get back to pre-acquisition levels on our organic ROIC by 2028. I'd like to make a comment on Life Science as well. I'll just underline what I said before, Jeff. With that, what's the return expectation that we have so for that business? Early on, we were not on track for two, three years as we now, That was the absolute focus for the team to get back on the early promised return of that business, That business is back on that track. We take it super seriously. Thank you. Our next question comes from the line of Matthew DeYoe with Bank of America. Please proceed with your question. Thank you for squeezing me in. 5%, 6% price I don't know. That's $450+ million of just EBIT tailwind year-over-year for the back half if I just give you a 100% margin, which I don't know, maybe it's too much. That's implying raw material inflation that candidly feels way too high. If I'm thinking about just operating leverage through the business covering normal course inflation, which maybe isn't the case. Long story, this is just why isn't margin expanding more materially in the back half? Does the guidance for raw material inflation that you're baking in reflective of the basket in March, April, or is it reflective of the current situation? As I think about things like propylene baskets kind of coming under pressure. Obviously, who knows, right? With the strait closed. I'm just trying to understand why the operating leverage isn't significantly higher with mid-single-digit price. A few comments here. I'll pass it to Scott as well a bit more. First, it's always with the latest information that we update you. We don't stay stuck. To assumptions that were made in March, the world has changed quite a bit obviously, in the meantime. It's fresh information when we talk together. Second, I don't need to explain to you how it works to get margins in positive territory. Since we have roughly 50% gross margin, well, you need double the price versus the cost that you're getting. When you need to do that in three months, not in a chemical business, but in a service technology expertise type of business, this is a remarkable accomplishment. Especially when you need to do it over and over again while keeping building more growth with more customers without losing any, as well at the same time. That's the simple math of the protecting gross margin. As I said before, it took us two years to do the same work as we do in three months today, a few years back. Last point, I'd say we do it in ways that are always constructive for our customers, which means that they get the savings in their operations higher than the incremental price that we are asking from them as a share of the benefits that they're getting as well at the same time. It's going to lead ultimately, that's the good news. Once the delivered product cost is going to stabilize, then you get a much better gross margin because we never give the pricing back in our model. Not because we just stay stuck on it, but because the value we're generating to our customers will remain within the customer operations. That's why every time that there is an economic cycle, going up in inflation, not only we manage it well, but second, it leads to a net incremental margin on our trajectory, which is why if you look at the last 10 years, our gross margin has kept going up. Yeah. Just add a couple of things to that, Christophe. Thank you. As you talked about, it's difficult to make these firm assumptions. It's a dynamic environment, but as we see it here today, we're expecting these high single-digit commodity prices for the balance of the year, right? If you look at that, then also the other thing I would say, and we talked about this earlier, if you look at the gross margin, you also have the impact of Ovivo. We had a reported gross margin. We have organic gross margin and Ovivo as we talked about in Q2, excluding Ovivo on an organic basis, our gross margins were stable. There's that call, 60 basis point drag just for Ovivo, and you'll see that same type of sort of difference in the second half. That may be part of the math. Thank you. Our next question comes from the line of Josh Spector with UBS. Please proceed with your question. Hey, good afternoon, guys. Thanks for squeezing me in. I wanted to go back to the High-Tech piece, and really what I want to ask about is that a few weeks ago when you closed CoolIT, you took up your plan to 2030. You took up your margins. Obviously, a high degree of confidence. I thought you'd come on this call and be able to give an update on CoolIT expectations for 2027, 2028, and maybe if that accretion math is pulled forward. Based on your comments earlier to David, it seems like you want to talk about that maybe in a few months. I'm just really curious, what gave you the confidence then at the start of July to raise your 2030 expectations there so much? Was it Ovivo or something else organic, or is it that you saw the backlog on CoolIT? Just help me understand that, please. A few things here. First, when we share new targets with you, we want to be sure, or as sure as it can be, of what we're sharing. Obviously, with you, and we're together with Cool IT since the first week of July. That's been just a few weeks. You can't do much before you close, as you know as well. We're getting to know much more when we look at the trajectory of both businesses, Cool IT and Ovivo and our core business, by the way, which has been doing really well for quite a long time now, and especially in the second quarter. Well, we ended up in a position where we can say the minimum has to be a reason. We don't need to go much into math and to say, "Okay, we can move up the floor," which means that the middle of the range is going up as well at the same time. This is also the reason why we want to have an Investor Day at SuperCompute in November, because we firmly believe with not only where the market is going, but most importantly, how our businesses are leading those technologies that we will be better than what we had initially planned, which is a good problem to have. If anything, it's going to be better than what we just communicated, we want to do the right work. We're talking about the next three, four, five years to come, that requires some in-depth work on all those businesses. Generally, the direction of travel for all of those, well, is quite a bit better than what we had expected. Expect good news in November. Thank you. Our next question comes from the line of Mike Harrison with Seaport Research Partners. Please proceed with your question. Hi, good afternoon. Christophe, you kind of referenced the increased attention that's happening around food safety recently. I'm just curious if you can comment at all on what kind of impact this Cyclospora outbreak has had on consumer behavior and maybe impacting your restaurant customers in terms of foot traffic. Then, I guess on your customers and them coming to you for food safety solutions or with greater attention on that. Maybe also tie in, it seems like the FDA has taken a little bit of a step back in terms of what they're monitoring and just curious if you view that as something that is helpful to your business or harmful to your business. Mike, I would not call that helpful or harmful. We're talking a little bit, or a lot, about people being impacted by what's happening again here. We're experiencing those situations too often in our country and around the world, and that's why we exist. Actually, it's to reduce and remove that risk as much as it's possible for every one of us eating food, or infection prevention in general. We feel for everyone that's been impacted by what's happening in our country right now. The few key questions that you had, impact on demand on our business now. No change of consumption at all. In F&B, you've seen as well. No change either. What's true, however, is every time that something like that happens, customers come to us, spend a lot of time with our research and development team, with our scientists to really understand what is it, how does it work? How does it impact us? How can we solve it? There is no one in the world that has more knowledge and expertise in infection prevention than Ecolab. Customers are clearly coming to us, which is a good sign. In the case of the end users, the restaurants, in that case, I think that they've done a very good job. In the specific case that we're talking about, they've been exemplary in how they've taken care of their guests, of their employees, of their processes. We've been very close to them, as we always do, but we stay behind the scene. We're there to help them. We're not there, obviously, to get ahead of them in terms of news. We've worked with a lot of producers as well out there to make sure that they were learning from it, that we could make sure that the risk was going down for all the other ones as well. The one that's being talked about in the media right now is not one of our partners or customers, so I can't comment on them. I think ultimately that the next phase, and that's a big business opportunity, for us, is to connect the producers with the end users, being restaurants or retailers, which is something that hasn't been done much so far. We're uniquely placed because we protect a third of the world's food production, and we serve even more of the end users, retail, and restaurants and hotels. Connecting the two in the future will be a new business opportunity for us. Thank you. Our next question comes from the line of Jason Haas with Wells Fargo. Please proceed with your question. Hey, good afternoon, and thanks for taking my question. I'm curious if you could comment on what the customer and industry reaction has been to the 50 kW coldplate that was announced by CoolIT. Just curious what sort of reception there is, and maybe it's going to take some time, but curious just timeline for when that could start to benefit you guys. Thanks. It's been very well received. Actually, it's the first time in my business history, I have to admit, that I see and hear customers not only wanting to be in the queue but to be ahead of the queue because there's limited capacity, as we know out there. Well, that's the situation of CoolIT, of Ovivo too, by the way, in a different part of that industry. It's a very unique place to be. That technology that you're talking about, so on the coldplate is one of the elements, but there's many more in terms of CDU, in terms of 3D TRASAR, in terms of coolants as well, that we've developed and will be developing as well. Everybody is looking so for the latest and to have that as soon as they can. A very new experience for us, where you need to manage supply more than demand, but I guess that's a good problem to have. Thank you. Our final question will come from the line of Kevin McCarthy with Vertical Research Partners. Please proceed with your question. Yes. Good afternoon, and thank you for squeezing me in. Christophe, I want to follow up on a few prior questions regarding CoolIT. Is there a way to characterize or quantify the visibility that CoolIT has, or you now have into the order backlog or pipeline? Is there a way to measure it in terms of months or quarters or years? Maybe you can talk a little bit about how they go to market. What are the standard contract terms? Over the next little while here, perhaps we'll learn more in November, certainly, but is that triple-digit growth rate stable, do you think, between now and the end of the year? Or maybe you could just elaborate on that visibility question there. Thank you. A few questions into that. The visibility for the foreseeable future, for 2026, at the end of the year, as you're calling it, is pretty clear. Yes, we feel good about the trajectory for the year, which is a very good way to start. Obviously, saw an integration. For the years to come, as mentioned before, we've considered in all our math and projections a 30% growth rate for the next 10 years. We'll do the work to really understand what's the right number for it, and we'll share that with you when we get together at SuperCompute in November. Generally, that sounds like good news. Your second question on the go-to-market. It's mostly two different drivers. The first one are the chip designers and chip manufacturers, because the coldplate and technology of cooling for each individual chip well is chip related. That needs to be developed together with the chip designers and/or manufacturers, depending on who that is out there. They're very close to them, and this is a huge strength of that business. At the same time, they're very close to the hyperscalers as well, that are interested in optimizing the overall cooling performance of the data center that goes beyond obviously individual chips. When you put all of them together in one rack and then afterwards in one data center, the physics look very different. That's the relationship with hyperscalers. It's to be very close to those two constituents, and CoolIT Systems and Ecolab, by the way, are very strong at that type of relationship. That's the way the model works. It's developing together with the hyperscalers and the chip industry, and that's going very fast. As you know, every week there's something new that's happening very different than many of our businesses. The last question on the backlog and pipeline. We're learning as we are working closer together with them. They have very good sales metrics. We have on the more traditional Ecolab side, similar but a little bit different sales metric. We're going to try to learn from each other, and that's also something that we'd like to share with you in November. We've been three weeks together, that's very early. More is going to come November. Since it's the last question, just wanted to recap briefly. We had a very strong quarter in Q2 in a tough and complicated environment. As we all know, really happy with the team that's been able to protect gross margin in three months versus two years in the past, while accelerating the organic growth as well of the business. Second, the second half looks promising for the company, especially as a trajectory for 2027 and the years to come as well, where I believe that we've rarely been in a better position to deliver on our growth ambitions, our margin ambitions, and earnings growth ambition. Ultimately where we need to focus over time is how do we improve from there even further, which is where I spend my time, what the team is aligning around. I think that we're in a very good place as a company, especially when we look into the future because we have the best team in the industry. Thank you again for all your time, and your commitment to Ecolab. All the best. Talk to you soon. Thanks, Christophe. That's it for our second quarter conference call. This call and associated discussion slides will be available for replay on our website. Thank you for your time and participation. Hope everyone has a great rest of your day. Ladies and gentlemen, thank you for your participation. This does conclude today's teleconference. You may disconnect your lines at this time. Enjoy the rest of your day.