Dear Shareholders,
Chairman & CEO Update
Ecolab’s long history is one characterized by growth and the ability to find opportunities where others see challenges. And 2022 was a year full of opportunities. It began with great optimism, as our Institutional customers saw the first signs of post-pandemic life. Before long, armed conflict in Eastern Europe presented new challenges for European customers and global supply chains, including rising energy costs, currency movement and global inflation that challenged businesses and consumers.
Through all this, Ecolab’s team of 47,000 associates, across 170 countries, continued to deliver. We were the first in our industry to implement a surcharge to offset rising energy costs. The pricing momentum continued throughout the year, as our team demonstrated the value they deliver to our customers when they need it most. We ended 2022 with record sales and pricing that more than offset inflation at 40-year highs. As global supply chains strained and cracked under the pressure, our approach to local sourcing and manufacturing was a competitive advantage. Especially in Europe, we won business where our competitors could not deliver for their customers. Where cost reduction within our business was required, particularly in Europe, we moved quickly.
Our investment in digital innovation also helped us operate more efficiently while providing valuable operational insights for our customers. This progress is best represented by the launch of our Ecolab Global Intelligence Centers, providing real-time digital monitoring and 24/7 on-call expertise for thousands of customers across all parts of the world. This network sets a new industry standard for remote monitoring and actionable intelligence and has created a platform for emerging digital capabilities.
But in 2022, Ecolab did not just react to events. We took control of our future. We began adapting our Ecolab Science Certified™ program for a post-pandemic world. We highlighted for our customers solutions that address a tight labor market and consumer demands for science-driven cleanliness in their restaurants, hotels and stores. We built on the successful integration of the Purolite® business and, in the fourth quarter, opened two new production facilities — one in the United Kingdom and one in the United States. A sign of the promising future ahead, these facilities are successfully ramping up to match high levels of customer demand. This investment positions Ecolab as a critical partner in the production of life-saving drugs and the fast-growing Life Sciences industry.
We also launched Ecolab Water for Climate™. This program helps Industrial customers address their short-term need for greater water and energy efficiency while also addressing our planet’s need for more sustainable operations. Through these programs and our own business, Ecolab is showing our customers how they can achieve both their sustainability and business goals. In 2022, our team was safer, more engaged and more diverse, and we delivered on our own water and climate commitments. We are one of very few global companies able to make this claim.
Now, as we enter our 100th year, I am reminded of where it all began. Our first customer sale was recorded in 1923. Our name at the time was Economics Laboratory — a name that mirrored our purpose of saving customers time, labor and cost through science-driven solutions. Today, we have grown to a $14 billion company that remains focused on growth, customer service and innovation. We are delivering at scale, across industries and across continents, and our services have never been more relevant. We have the strategy, technology, science and people to meet today’s global challenges and continue protecting the resources vital to life.
I thank you for your investment in Ecolab and your continued belief in our team. I am confident our next 100 years will be even better.
Christophe Beck
CHAIRMAN & CEO
Working for Ecolab Shareholders
2022 represented another year of solid progress for Ecolab. Under Christophe’s leadership, the company’s executive team acted quickly to navigate the challenging business environment, deliver for customers and further invest in areas of growth. This all helped drive strong, double-digit topline growth and improved operating performance.
Consistent with Ecolab’s corporate governance principles, 2022 was also a year of transition for the company’s Board of Directors. In May, we successfully managed the transition of the Chairman role, and in December, we welcomed Eric Green. Eric brings new insights and extensive Life Sciences industry experience to further strengthen our Board.
I am also pleased to announce the coming transition of the Lead Independent Director role to David MacLennan. David’s considerable corporate experience, including as Chairman and CEO of Cargill, will ensure he is a strong, independent voice on behalf of shareholders. The Board also plans to rotate the Chair positions for the Audit and Compensation Committees, ensuring fresh perspectives are part of our ongoing decision-making.
Personally, I am excited to continue serving the interests of Ecolab’s shareholders and ensuring your Directors are closely involved in the company’s major strategic and investment decisions. The company is well positioned to address the world’s biggest challenges. Ecolab has the right strategy, leadership and structure to deliver continued growth and strong returns for our shareholders.
Thank you for your continued support and confidence in our company.
Jeffery M. Ettinger
LEAD INDEPENDENT DIRECTOR
Read the original letter here.
