艺康全球生命科学：全球生物生产炉边谈话系列

2024A2025E2026E-15,961.016,582.0-3,818.04,136.0-7.498.4415,741.016,081.016,943.0 2027E17,386.04,530.09.7317,787.0 Laurence Alexander * | Equity Analyst(212) 284-2553 | lalexander@jefferies.comMatthew Stanton * | Equity Analyst(615) 963-8397 | mstanton@jefferies.comDaniel Rizzo * | Equity Analyst(212) 336-6284 | drizzo@jefferies.comKevin Estok * | Equity Associate(212) 778-8516 | kestok@jefferies.comCarol Jiang * | Equity Associate+1 (212) 284-1714 | cjiang@jefferies.comXianrao Zhu * | Equity Associate+1 (212) 778-8742 | xzhu@jefferies.com The Long View: EcolabInvestment Thesis / Where We Differ•We expect Ecolab to drive top-line growth through penetration in emergingmarkets and market share gains in core geographies•Cost savings will help mitigate regional headwinds•Ecolab should offset raw material inflation through disciplined pricingactions•Effective use of cash for M&ABase Case,$310, +19%•Europe and Asian demand trends recover•Sluggish macro environment in North America•Long-term core EPS growth of 11-15%,supplemented by rapid growth in the digitalplatform and related adjacencies•ESG premium equivalent to 3x EBITDA or 6x netincome•2026E EPS: $8.75, Target Multiple: 35.4x; PriceTarget $310Sustainability MattersTop Material Issue(s):1) Water & Wastewater Managementhas been a core competitive advantage ofEcolab’s since the 1930s, reinforced by the Nalco acquisition.2) Energy Management.Ecolab’s servicemodel effectively transmits best practices in highly fragmented markets.3) Business Model Resilience.Risk is mitigated by focusing on capital-light B2B services that leverage proprietary chemistries to addresshigh-hassle tertiary problems that are brand-critical.Company Target(s):1)100% renewable energy by 2030, halve carbon emissions by 2030 and achievenet-zero carbon emissions by 2050.2)Reduce water impact by 40% per unit production from 2018.3)Increase management-level gender diversity to 35% with the ultimate goal of gender parity.4)Increasemanagement-level ethnic/racial diversity to 25%.Qs for Mgmt.: 1)How have sustainability initiatives affected your ability to capture value for deliveringprocess and labor efficiency?2)How is digitalization transforming the growth algorithm and improvingthe efficiency of human capital?ESG Sector Deep Dive: ChemicalsPlease see important disclosure information on pages 5 - 11 of this report.This report is intended for Jefferies clients only. Unauthorized distribution is prohibited. Upside Scenario,$380, +46%•Robust demand environment from recovery inkey end-markets leads to 100-200bps fasterorganic sales growth, adding $0.25 to EPS•Acquisitions add $0.10-$0.15 to EPS•Market focuses on chance for structuralacceleration: each 100bps increase in long-termsales growth adds ~$41/share•Shares trade in line with long-term average peakrelative multiples•2026E EPS: $10.00; Target Multiple: 38x; PriceTarget: $380 Downside Scenario,$140, -46%•Weak cycle with -1-2% GDP growth•Margins compress due to raw materialpressure; European margins continue to lag;Noincremental benefit from acquisitions;European transformation is muted•Shares trade in line with long-term averagetrough multiples•2026E EPS:$7;Target Multiple:20x;PriceTarget: $140Catalysts•Recovery in the restaurant and food & beverageend-markets: ~55% of sales•Margin expansion in Europe;pricing>rawmaterial inflation•Continued commercialization of premiumproducts; i.e., APEX•Bolt-on M&A in healthcare, water, energy, waste,and pest elimination•Recovery(pricing)in energy-related end-markets 2 Value Capture:Whereas in industrial water treatment the sales cycle is driven more by annualproductivity benchmarks, in Life Sciences the value proposition is usually more significant processchanges that are locked in for regulatory reasons, and then the value proposition is stable for thelife of the product program. Contamination control and purification resins can both contribute toproductivity and water efficiency by reducing process steps, leading to less wastewater, chemicaluse, and labor requirements — as well as longer maintenance cycles and faster time to market fornew drugs. Ecolab can also cross-sell to pharma companies its traditional boiler and cooling towermanagement solutions.A More Extensive R&D Cycle?The shift from vanilla monocolonal antibodies to a more diverseset of drug molecules, delivery solutions and treatments, coupled with economic pressure for yieldimprovements, has created a space for Ecolab to leverage its competitive advantages: an agnosticapproach to a broad range of industrial and workflow solutions; deep technology and process know-how in water solutions, purification, contamination control and decontamination; and a core skillset around integrating materials into novel industrial workflows augmented by calibrated feedbackprotocols (e.g. digital compliance solutions). Life Sciences digital solutions are expected to bea significant part of the growth rate in Ecolab's broader digital platform (currently pegg