Ecolab Inc. Q1 2009 Earnings Call Transcript

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2009-04-28 15:52:11.0

Tags: Food, Call Transcript, Earnings, Citigroup Inc., Ecolab Inc., Food Service, Doug Baker Let, Food & Beverage, Manufacturing, Seeking Alpha

Question-and-Answer Session

Operator

(Operator instructions) And our first question comes from P.J. Juvekar with Citi.

Eric HessCiti

This is Eric Hess [ph] in for P.J. In institutional, what percent of the business is expected to hold up? Where are you seeing the declines and how much of a volume decline do you expect in 2Q?

Doug Baker

Yes, Eric, Doug. I think the – what we're seeing in institutional is pretty much what we expected, which is we clearly have got the most severe pressure in lodging, food service, which is also under pressure is acting a lot like food service has acted in the past under pressure and we don't really expect either to recover, but we also don't believe that they're going to continue to decline at the rates we saw in the last couple of quarters, that they're semi bottoming and we will continue to look at these types of markets through the balance of the year. Volume, we've got a bunch of things going on in institutional. They're doing a very good job. You've still got a number of restaurant closings. We're having great success selling new business and we expect that to build momentum throughout the year. So while the market is not going to recover, we do expect that our new business results will continue to fuel improved results throughout the year.

Eric HessCiti

Okay. And how many sales associates did you hire last year and how many would you hire this year?

Doug Baker

Let's go look up exact numbers.

Michael Monahan

For this year, I think we're looking to be probably net flat, maybe off a little bit for a total head count. I'm trying to –

Doug Baker

Globally.

Michael Monahan

Yes, globally.

Doug Baker

Of course, it differs by region and by business. We aren't managing each business to the same number because we've got very different market conditions.

Michael Monahan

And in 2008, we were up about 550.

Eric HessCiti

Great, thank you.

Operator

Our next question comes from Mike Harrison with First Analysis.

Mike HarrisonFirst Analysis

Hi, good afternoon. I was wondering you talked a lot about targeting share gains and new accounts, particularly on the food service side. Do you have any metrics that you can provide to show us how you're doing on that front?

Doug Baker

Mike, Doug, we typically don't go out and give specific account wins nor give specific numbers of accounts. I guess I can't share that. We are significantly above our average year in terms of new account productivity and probably are only behind one stand out year at this point in time which was when we had a major competitive change in the market, which is really a one-year phenomenon. So we're above last year metrics, we measure unit gains all the way down to the individual territory manager level. We have gained loss reporting, we measure it to net sales, we know what's happening by region throughout all the countries that we compete in. So I think we've got a very good handle on this and we are achieving the type of successes that we hoped for moving into the year.

 

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