Your SlideShare is downloading. ×
Minnesota Chamber Business Conference & Annual Meeting, keynote speaker, Doug Baker, chairman and CEO of Ecolab
Upcoming SlideShare
Loading in...5
×

Thanks for flagging this SlideShare!

Oops! An error has occurred.

×
Saving this for later? Get the SlideShare app to save on your phone or tablet. Read anywhere, anytime – even offline.
Text the download link to your phone
Standard text messaging rates apply

Minnesota Chamber Business Conference & Annual Meeting, keynote speaker, Doug Baker, chairman and CEO of Ecolab

422

Published on

Doug Baker, prominent chairman and CEO of Ecolab, shares the story of Ecolab and a provides a formula for Minnesota to achieve a successful environment for Businesses to thrive.

Doug Baker, prominent chairman and CEO of Ecolab, shares the story of Ecolab and a provides a formula for Minnesota to achieve a successful environment for Businesses to thrive.

Published in: Business
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total Views
422
On Slideshare
0
From Embeds
0
Number of Embeds
2
Actions
Shares
0
Downloads
8
Comments
0
Likes
0
Embeds 0
No embeds

Report content
Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
No notes for slide

Transcript

  • 1. 1 Minnesota Chamber of Commerce Annual Meeting DOUG BAKER, CHAIRMAN AND CEO October 3, 2013
  • 2. What I’d Like to do Today Introduce you to Ecolab Share how we look at our business Look at Minnesota through our lens 2
  • 3. Ecolab By the Numbers 3 ASSOCIATES SERVING CUSTOMERS IN 171 COUNTRIES $30 Billion Market Cap 6,300 Patents $13 BILLION ANNUAL SALES 44,000 1.3 MILLION CUSTOMERS
  • 4. 90 Years Young 4
  • 5. Ecolab Timeline 5 1923: Ecolab Founded 1935: Service Tradition Begins 1957: Ecolab Goes Public 1987: Ecolab Leaves Consumer Market 1991: Ecolab forms Strategic Alliance with Henkel KGaA 2011-2013: Ecolab Acquires Nalco and Champion
  • 6. Macro Trends Aging Population Water Shortage Energy Demand Nature Increasing middle class globally Technology  Aging population in EMEA, Japan, and China will drive healthcare  Meal prep away from home continues in emerging markets driving foodservice growth  Food production accounts for nearly 75% of water consumption  Demand for energy requires more geographically and technically challenging sources, which are more difficult to reach and treat as well as more water intensive  Water scarcity is expected to be a dominant issue, particularly in high growth emerging market economies  Evolution presents new food safety and infection challenges  Science & technology enables broader set of product and process improvements Population Growth Diet Shifts  More people: +50% by 2050. Most growth in emerging markets  Diets move from grains to proteins in emerging markets  Population growth plus diet shift means 75-100% more calories needed to feed the world
  • 7. Ecolab: Uniquely Positioned To Deliver What Matters Most… CLEAN WATER SAFE FOOD ABUNDANT ENERGY HEALTHY ENVIRONMENTS
  • 8. Ecolab Model Drives Value 8 Shared Operating Principles Shared Model Shared Technology Foodservice/ Hospitality Food & Beverage Processing Healthcare/ Infection Prevention Industrial Water Services Energy Services >90% Product Sales, >90% Recurring Revenue
  • 9. Ecolab Business Model INDUSTRY LEADER IN PRODUCT INNOVATION AND SERVICE EXPERTISE Ecolab’s core capabilities that drive value: ServiceTechnology Training Information 9
  • 10. Innovation Leader  Major R&D investment  Anchor Technologies Drive Customer Decisions  Food Safety  Infection Prevention  Energy  Water Sustainability  Cost Savings and Sustainability BEST IN CLASS SOLUTIONS FOR CUSTOMER NEEDS 10 $0 $200 $400 $600 $800 $1,000 2008 2009 2010 2011 2012 2013 New/Modified Products As % Of Total Sales >30% Each Year Innovation Pipeline (Estimated 5th year new product sales) * *excludes Champion ($mlns) Apex 2 Low Temperature Corrosion Inhibitors Encor for Operating Room
  • 11.  Leverage 3DTRASAR Technology  Extend Solids Franchise  New Antimicrobial Solutions Innovation Drives Margin & Competitive Advantage 11 enVision 2013: CROSS-FERTILIZE ECOLAB, NALCO AND CHAMPION TECHNOLOGIES 3D TRASAR Apex 2 Solids for Cooling Water Aquanomic
  • 12. 12 Ultimate Competitive Advantage 12,000 15,000 18,000 21,000 24,000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 “Ecolab is among the top ten best U.S. manufacturing companies to sell for.” Selling Power Magazine INDUSTRY-LEADING SALES AND SERVICE FORCE 25,000 Field Associates Experience That Matters  30% > 10 years  40% > 8 years SALES AND SERVICE FORCE Combined Ecolab and Nalco
  • 13. Balanced Business, Big Opportunity 13
  • 14. 34% 17%22% 27% 48% 26% 13% 8% 5% 31% 27% 6% 36% 14 Balanced Business Sales by Region Sales by Segment Asia Pacific Canada US EMEA Latin America Abundant Energy Safe Food Healthier Environments Clean Water Institutional Industrial Energy Other Sales by Strategy Ecolab Pro Forma 2012 Sales $13B
  • 15. $0 $2,000 $4,000 $6,000 $8,000 $10,000 $12,000 Strong Competitive Position ECOLAB SHARE $13 BILLION Ecolab Others $100 BILLION MARKET 13% 15 ($ mlns.)
  • 16. 16 Major Opportunities in Existing Markets ESTIMATES BY MARKET Ecolab Sales Remaining Market $ MILLIONS SEGMENT $0 $5,000 $10,000 $15,000 $20,000 Janitorial Food Retail Ed./Government Other Lodging Light Industry Health Care Paper Heavy Industry/Mining Food & Beverage Energy Food Service
  • 17. Proven Strategy 17
  • 18. 18 Outstanding Global Customer Relationships Customers % of Sales Largest <2% Top 10 <10% 1,000,000+ CUSTOMERS
  • 19. Proven Effective Strategy CIRCLE THE CUSTOMER - CIRCLE THE GLOBE 19 Provide customers improved control over results, costs and quality Leverage strong Ecolab relationships to drive improved growth Increasing the solutions and services to better meet our customers’ global needs
  • 20. Strong Culture 20
  • 21. Culture  Service We win when customers win We get things done  Caring Ida C. Koran Foundation Community: internal, external  Performance Strive to be the best Aggressive objectives
  • 22. $0 $500 $1,000 $1,500 $2,000 $2,500 2008 2009 2010 2011 2012 Financial Objectives Growth  15% EPS growth Returns  Improve ROIC 100 bp per year Leverage  Return to A range metrics by year-end 2015  Total debt-to-capital ratio in the 35% - 40% range  < 2.0x total debt/EBITDA 22 $1.50 $2.00 $2.50 $3.00 2008 2009 2010 2011 2012 STRONG GROWTH, PRUDENT FINANCIAL MANAGEMENT EPS (adjusted) EBITDA (adjusted, $ - mlns) 2012 EPS and adjusted EBITDA data reflect Nalco merger
  • 23. History of Performance 23
  • 24. 2424 $0.50 $1.00 $1.50 $2.00 $2.50 $3.00 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Strong, Consistent Growth $0 $2,000 $4,000 $6,000 $8,000 $10,000 $12,000 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2012 Sales and EPS data include Nalco merger EPS CAGR Adjusted EPS Ecolab S&P 500 (Operating Earnings) 13% 12% 8% 4% 0% 5% 10% 15% 10year 5year SALES ($ mlns.) EPS (adjusted)
  • 25. Delivering on Expectations Forecast Actual PREDICTABLE QUARTERLY EPS $0.00 $0.10 $0.20 $0.30 $0.40 $0.50 $0.60 $0.70 $0.80 $0.90 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 ACTUAL > ECOLAB FORECAST 85 OF 86 QUARTERS (EXCEPTION = 3Q 2001) 25 Adjusted EPS.
  • 26. Performance that Outperforms the S&P 500 ECOLAB COMMON STOCK VS. S&P 500 SINCE 52 Years: Total Return Through 12/31/2012, Including Dividends Cumulative Return: 201,484% vs. S&P 500: 189,142% - 25,000 50,000 75,000 100,000 125,000 150,000 175,000 200,000 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 ECL S&P 500
  • 27. 27 Financial Formula
  • 28. Ecolab Success Formula 28
  • 29. 29
  • 30. Minnesota by the Numbers 30 5.1% $38.4 Billion Biennial Budget (2014-2015)$253Billion GDP 3.5% GDP Growth (2012) Unemployment
  • 31. Minnesota by the Numbers Education #2 high school graduates #1 ACT Scores #11 bachelor’s degree or higher Health #1 Least stressful metro #1 Health care system #3 Most people with health insurance #5 Healthiest state Economics #3 Labor force participation #9 Invention patents (2008- 2012) #2 Fortune 500 per capita #13 GDP per capita 31
  • 32. Minnesota by the Numbers Generosity #1 Philanthropy per capita #1 Volunteering (Twin Cities) #1 Most civically engaged metro #3 United Way campaign (Twin Cities) Quality of Life #3 Quality of Life #5 Standard of living Lifestyle #1 Most “playful” metro #1 Golfers per capita #1 Bike-friendly metro #1 Metro for health and fitness #2 Theater seats per capita #7 “Most happening” rock scene 32
  • 33. Minnesota by the Numbers #1 Business-to-Business Tax on warehouse and storage services #3 Corporate Tax Rate #4 Personal Income tax top rate #5 Business property tax rate (commercial business property in Minneapolis over $1 million) 33
  • 34. Minnesota by the Numbers #46 for new business startups #45 for business tax climate #42 in highway rankings #39 in attracting young talent to the metro 34
  • 35. Growing Spending Imbalance 35 24 29 $10 $15 $20 $25 $30 2010 2015 2020 2025 Revenue Growth @ 3% Spending Growth @ 4.7% 5% 3%
  • 36. Minnesota by the Numbers 36 #50 Hispanic students graduation rate (51%) #49 Black students graduation rate (49%) #49 Asian/Pacific students graduation rate (72%) #48 Low-income students graduation rate (58%) #29 White students graduation rate (84%)
  • 37. Minnesota Success Formula 37
  • 38. Minnesota Success Formula 38
  • 39. Minnesota Strategies 39 World-class talent Great infrastructure/ amenities Sustainable growth culture
  • 40. Minnesota Priorities 1. Tackle educational challenges – must remain #1 2. Invest in infrastructure for the future 3. Restructure Health & Human Services, bend the curve 4. Rebalance the tax code: Broaden consumer sales tax Reduce income tax Clean up business taxes – don’t punish those who HQ here 5. Change the conversation…growth, responsibility and unity 40
  • 41. “The future destiny of Minnesota is to be a glorious one.” Girart Hewitt, St. Paul Attorney and Author, Minnesota: Its Advantages to Settlers,1868 41
  • 42. 4242 Cleaner Safer Healthier

×