Nalco Holding Q3 2009 Earnings Call Transcript

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2009-10-28 12:21:07.0

Tags: Nalco Co., Restructuring, Europe, Call Transcript, Earnings, Sales Strategy, Manufacturing, Supply Chain Management (SCM), Sales, Enterprise Software, Software, Seeking Alpha, Nalco Holding Co., National Challenge Systems Inc.

Question-and-Answer Session

Operator

(Operator's Instructions) And at this we have a question with PJ Juvekar with Citi.

PJ Juvekar – Citi

Hi, good morning. Erik, it's refreshing to see such a strong focus on internal productivity improvement. My question is on Europe, with all the restructuring that you guys have done in that region, how is it paying off? Can you talk about where margins are today compared to where they were before and how do they compare with North America?


Bradley J. Bell

PJ, Europe has got its work cut out for it. We took a good size restructuring charge there in the fourth quarter of last year and another charge in the second quarter of this year. These got at our manufacturing footprint in the region, they got at resizing our sales force, and they got at the commitment we're making to paper or not making to paper and in various customer segments.

The plants that we provided for closure really are still operating and wont' be physically down until the end of this year. As you know that's a lengthy process with works counsels, et cetera, in that part of the world. So we are really not yet seeing the full benefit of this activity. You certainly saw it in the paper results. They were a contributor in that part of the world, but the manufacturing supply chain reorganization, et cetera, really is the 2010 implementation step.

J. Erik Frywald


But I think to add to that PJ, it's very important to understand that in Europe, as we talked about earlier in the year and last year, have cleaned up the back office issues that faced us. We've got a stronger leadership team in place and I believe poised to not only successfully get this restructuring behind us and get to the better margin position, but also to drive our market share position.

In fact, in the third quarter our sequential nominal sales growth in Europe was 8%. So we are starting to see not only some market lift, but I think our position is strengthening in Europe. So I am very pleased that we're getting our costs right sized for the market opportunity in Europe, but also our capability to deliver against the market benefits that Nalco can bring to our customer base is very strong and I think you'll see some very good performance from Europe going forward.

 

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