It's a pleasure to host this next session with Ecolab, and we have Scott Kirkland up here with me. Scott's been with Ecolab for 20 years in a variety of finance roles and businesses and regions. Previously, he was at Novartis and, like many CFOs, cut his teeth at PwC. So, glad to have you here, Scott. Andy Hedberg is back here if you need to reach him. So, go through some slides and then we'll get into Q&A. So, glad to have you, Scott.
Awesome. Thank you, Steve, for the nice introduction. Thank you all for coming to listen to us today. I'm really excited to share with you Ecolab's great growth story, which I've been, as Steve said, a part of for about 20 years. Before I get there, I have to start with our obligatory cautionary statement, which I'm sure you're all very familiar with. So, I will not bore you and read this verbatim, but I will let you take a peek at that. And with that, I will get on to the fun stuff in the conversation today. Okay. Ecolab's purpose is to protect what's vital. And that starts with protecting people's health. We do that by protecting people from infection, whether it's in general public spaces or across the entire food chain. We also protect planet health.
And we do that by making sure our customers can operate very efficiently while using as little water as absolutely necessary. And through the combination of those two, we also protect planet health and business health, sorry. And we do that through the combination of those two by helping our customers deliver on their sustainability promises, but doing it in a way that improves their P&L. Because we know from experience that being sustainable does not require a green premium. Ecolab, at its core, is the leader in water, hygiene, and infection prevention. We're an innovative and trusted partner at more than a million customer locations, leveraging the expertise from our 48,000 associates. And we support customers in 40 industries in more than 170 countries.
And those customers choose Ecolab for our science-based solutions, our data-driven insights, and the world-class service capabilities that we have to support them, all of which is really helping our customers advance their goals around food safety, around clean environments, and optimize water and energy usage. Those relationships are with some of the world's biggest and most trusted brands, many of these relationships that we've had for decades. Starting with our institutional specialty business, we work with restaurants and hotels like this one to make sure that they have the same hygiene standards across their entire footprint. Looking at our industrial business, which is about half of the company and focused primarily on water, which I'll get to in a second. But they focus on water in a wide variety of industries.
Our healthcare and life sciences business works with hospitals and pharmaceutical companies to help make sure they have clean and sanitary environments, but also helps purify medications through our Purolite business. Last, but certainly not least, is our pest elimination business, a fantastic business that sells across the rest of our end markets, a real great cross-sell for us. As you can see, we're very balanced in terms of the markets that we operate in and the segments we operate in and a great customer set. We have what we call a razor/razor blade model. What I mean by that is that more than 90% of our revenues come from consumable products. Those products are also really critical to our customers' operations. As a result, we have a very predictable revenue stream. There we go.
With a balanced business, those great customers, and these attractive end markets that we serve, we've been able to deliver consistent OI margin expansion while also continuing to make investments in our business to fuel long-term growth. I'll talk about those growth targets in a little bit. As you can see here, in 2024, our organic OI operating income margin got to 16.8%, which was a record high for us. That was an expansion compared to last year of 290 basis points. That's on top of the 140 basis points we delivered in 2023 over 2022. As a result of that, in the trajectory we've been on, we are very confident that we're going to hit our 20% OI operating income target by 2027. That's one of the long-term financial objectives that we have that you can see here. Our business is in a great place.
We're in growing markets and positioned stronger than ever, which is why we feel very confident in these long-term financial targets, including the 20% OI margin target, our 5%-7% sales growth target, and our adjusted EPS growth of 12%-15%. So, now that I've introduced you to Ecolab, I want to talk a little bit more about what we do, who we serve, and the huge opportunities in front of us. So, as you probably know, the world continues to face real challenges around public health, food scarcity, water stress, and climate change. For example, it's estimated by 2050 that we will have 30% more people in the world. That's about 2 billion more people on the planet putting even more stress on natural resources and food requirements.
By 2030, it's estimated that there will be a 56% gap between the supply and demand for fresh water. You've probably seen that the issue is becoming more and more prevalent as we see global droughts around the world. By 2050, it's estimated that we'll need 47% more energy due to the increasing population. Frankly, that does not even consider the exponential demand on energy from the advent of GenAI. Water is really at the nexus of all of these global needs and issues. Ecolab, as I'll talk more about, is a leader in water technology and solutions. We help customers solve some of the biggest challenges. Smart water management is core to what we do, and we deploy it across the vast majority of our business. As I mentioned, industrial is focused on water and has the biggest exposure to water revenue.
Our institutional specialty business also has a very significant portion of their revenue, as you can see here, about 70% connected to water because of our programs like warewashing and commercial laundry. Healthcare and life sciences also touch water in a significant way as a result of our infection prevention programs and our Purolite purification programs. Here's Ecolab's market. It's large, it's growing, and it's fragmented. It continues to expand as we add new solutions and innovations focused on helping our customers solve their biggest challenges. Frankly, we love growing our sales fast, but we want to grow our market opportunity even faster. As you can see on the bottom here, we have leading competitive positions in nearly every market that we serve. How do we achieve this growth and these results? It's really helping our customers.
And we do that by deploying dedicated on-site expertise in every market that we serve, whether it's power generation, a data center, a pharmaceutical company, a restaurant, a hotel, you name it. We deploy dedicated experts in those fields. Those teams get to know our customers' operations intimately, right? And understand how they operate and then deploy our technology, our data, and their expertise and know-how to help our customers deliver what we say is the best results at the lowest total cost. I'll talk more about that here, about what that means to us. Our value proposition rests on that ability to drive these high returns for our customers. And that's due to the fact that our cost to our customers is small, very small relative to the benefits we achieve, right?
Those benefits are demonstrating how much water and energy we can save, as well as labor and waste. The combination of those things is what we call total value delivered. Here's that equation here. If you look at water, energy, and waste, that equals our total value delivered. That is core to our value proposition. Also key to that growth and that customer value is our long history of innovation. Shown here, you can see the last five years of our innovation sales. In 2025, you can see in that last column, we're anticipating to launch our biggest innovation pipeline ever at $1.7 billion in five years. In cumulative revenue, that equates to about two and a half to three times that amount. Over five years, $1.5 billion in year five, $1.7 billion in year five.
That contributes to what we call our Vitality Index, which is an important KPI for us, and that Vitality Index, what that means is the percentage of sales over the last five years from products that have been launched in the last five years. In the past five years, we've also pivoted, as you can see here in the dark blue, focusing on what we call breakthrough innovation, pivoting from just product innovation to bigger, more impactful program innovation that have a bigger impact and value to our customers. Here's a few of those examples of breakthrough innovation focused on our biggest growth opportunities like Global High-Tech water, Life Sciences, and digital. These innovations are really tightly aligned to our customers' biggest needs. As part of that innovation, as I mentioned, is digital. It continues to be an important part of our digital foundation and our innovation.
But we've been building on this concept for decades of what we call Connected Chemistry, building on a foundation from our 3D TRASAR technology in the industrial business that we've continued to expand across other markets. And we've innovated that to a point where customers can understand and see their water processes and water quality on a real-time basis. And we do that, as you see here, by being able to collect over 120 billion, 120 billion unique data points. And through that, we connect that to our Ecolab 3D Cloud. And by looking at this data, it allows us to see across the customer's footprint and understanding the best performing location, such as a power generation plant, and then use that data and insights to help understand how they can deliver that same level of performance across the rest of their global footprint.
Here's an example of how we drive our value and growth through our One Ecolab sales strategy and this lodging customer. In this lodging customer, we serve the front of house, the housekeeping, the pool and spa, and the laundry. But we also help deliver the hygiene and food safety at the restaurant in this particular location here. At the same time, then we bring in other cross-divisional programs as part of our CTC and One Ecolab strategy to bring in expertise from Nalco Water, pest elimination, and our EcoSure auditing business. The combination results in significant savings for our customers. In this case, it's 160 million gallons of water that we've helped this hotel save, with a total value delivered of $10 million. Here's another example of how we Circle the Customer in a food and beverage plant.
It starts, like in all of our businesses, with an anchor technology. The anchor technology in this case is a clean-in-place system. What the clean-in-place system does, it allows us to efficiently sanitize and clean the production lines without having to dismantle it. Then, in addition to that, we bring in other solutions, as I mentioned before, like water treatment, pest elimination, and Circle the Customer with the solutions that help them drive a total value, in this case, saving over 960 million gallons of water and delivering a TBD of $18 million. Here's another example, this being for a data center. As you probably know, this industry is growing at a very rapid pace with the exponential increase in AI. A typical data center like this one, you can see the black boxes there, has a lot of servers that generate a lot of heat.
That heat has to be dissipated in order for this data center to have 100% uptime. And a single data center can use as much water as a city of about 50,000 people, okay? So, very water intensive and continues to be even more so with the rapid expansion of AI. And you'll see our various water offerings, which is starting with the pretreatment of the incoming or the influent water, but also the cooling water for key process equipment, the humidification systems. And then on top of that, we add in digital programs to help optimize both water and energy usage throughout the data center. This results in a really large annual savings, both in water and a Total Value Delivered of about $8 million. So, if you look at the markets that we serve, it's about $150 billion, $152 billion to be exact, right?
With almost half of that market being customers that we already serve today, including the $16 billion in sales that we currently have. But that represents a $55 billion opportunity with our current customer set. And then there's another more than $80 billion opportunities with customers that we have not yet sold. But we get after both of these opportunities through our One Ecolab enterprise selling approach and the leading innovation that I referenced earlier. As I've talked about a lot through this conversation, is that we're driving best performance for our customers and cost savings for our customers, but at the same time, having a huge impact on their sustainability. And as a result, our solutions to help our customers save money and do it more sustainably places in the middle of some of their biggest challenges.
They come to us trying to help solve and reach their sustainability goals. And we do that by looking at the commitments they've made, understanding their operations, where they're at today, and then how helping them close the gap to those long-term targets for sustainability. Here's an example of just how this is progressing. Excuse me. Sorry. This is showing disclosures that companies make around climate change and water. You can see a significant increase in disclosures around climate reporting coming from the Carbon Disclosure Project. That's the green line. You can also see in the blue line that the reporting and disclosures around water are also increasing, but not at the same pace. And this is where there is a huge opportunity because we know that smart water strategies are very important and very critical because they're a significant portion of greenhouse gas emissions.
This is where water is at the nexus of many of these problems. Shown here on this slide is our customer impact goals. Because the biggest impact that we can have in addition to our own operations, but the biggest impact we have in sustainability is helping our customers achieve their goals. We do this helping them around water, climate, food, and health. You can see here, this is 2023 data. The 2024 data will be coming soon. That's in 2023, we help customers on the far left here conserve 226 billion gallons of water. So that's equivalent to the drinking needs of 780 million people. Okay? Just saying that again. We help save the drinking needs for 780 million people. A fantastic number.
We also helped avoid 3.8 million metric tons of greenhouse gas emissions, provided safe food to 1.4 billion people, and cleaned 60 billion hands, if you can imagine that. So, as I've talked, we've demonstrated a very long-term ability to generate strong financial performance and do this over very long periods of time while helping our customers achieve their sustainability goals. That strong financial position starts with our long-term targets. On the upper left, I talked about some of these earlier. Our sales goal is driving 5%-7% sales growth every year, our 20% OI margin target that we will hit by 2027, and annual adjusted EPS growth of 12%-15%. And we have a very strong cash generation model. We have free cash flow conversion of 90%-100%.
And on the bottom left, you can see here our net leverage target is about two times net debt to adjusted EBITDA. Frankly, we're a little bit lower than that right now, but that provides us a lot of optionality to invest in the business. And we have clear capital deployment priorities that we've had for a very long time. The first is increasing our dividend in line with earnings, which we've done for more than 30 years, investing in the business, and including attractive M&A. And then third is repurchasing shares at attractive prices, which we did last year and repurchased $1 million of shares. We're certainly committed to delivering attractive growth for shareholders, driving great returns in addition to the great operating performance that I've shown here.
And over the last decade, we've returned $11 billion in cash to shareholders through a combination of dividends and share repurchases. Oops. Go back one, please. One extra click. So, just in closing. Oops, I'm missing the slide. So, sorry about that. So, hey, in closing, we love our mission. We love the position that we hold. We know that what we do for customers matters. And that matters not only for our customers, but for the communities around them. And we do it in a way that helps to improve their profitability, not just their sustainability. And we're continuing to our strong legacy of strong financial performance and shareholder returns. Thank you for listening. Steve?
All right, Scott, come on over here. If you want to ask Scott a question, raise your hand. Sharon will bring you the mic. I got a few for you. You guys hosted an event at the old Nalco facility outside Chicago a couple of falls ago. And I got to tell you, one of the takeaways that I had from that event was a comment that you just made a few minutes ago about you have experts in all of these various industries.
One of the comments that I got at that event was you hire individuals from those industries that have that understanding. Like, you may have somebody that knows how to treat water, but to go into a food and beverage facility, do they really understand how it works? Is that a fair characterization that some of this expertise wasn't just developed in-house? It was you brought that expertise in.
Yeah. We certainly hire great talent all the time, but I would tell you we hire both experienced industry experts, but also hire and develop people right out of school, chemical engineers, in the case of life sciences, PhDs, so hiring people who have deep expertise in these fields, but having great expertise given our long tenure. As you said, I've been at Ecolab 20 years, and I feel like I'm a newbie in a lot of cases because there's been a lot of people that have been there 30 years and 40 years that we retain people and that expertise that is passed on to the next generation, and so, but we continue to develop internally and hire externally where it makes sense.
Also, at that event, we really were drilling into this one Ecolab concept. I was just curious. You made a comment on one of your slides about this, whatever it was, 120 billion data points or so forth. Does that digital platform you have help you win business, or does it help you cross-sell? Both, really.
As I mentioned before, digital, we've had a long history in digital foundation with 3D TRASAR. So, it's an important part of it. As I think about our business, it's like a three-legged stool, Steve. We have the innovation on the chemistry, we have the equipment and the technology, the data, and then we have the expertise. Those three things are the moat that we have. So, certainly, the digital technology in helping our customers solve their problems, that's an important element.
Industrial has been doing this for a long time with our 3D TRASAR program and continued to add other programs on it. But we've also been investing in digital over the last several years in an accelerated way where all of our business has a digital foundation, if you think about institutional, with the launch of our DishIQ, which is the smart dish machine. Or in pest, we're investing in Pest Intelligence, and we are seeing the uptake in the market from those. And it's benefiting customer outcomes. It also helps deliver operating efficiency for us. But we're also investing technology from an internal operations standpoint where we're able to invest in technology to bring data together so we understand where the opportunities are to help solve customer problems.
As I mentioned, like the best in class where we can use the 3D TRASAR monitoring, we understand what the best in class plant is in an industrial footprint across the customer's enterprise and then what is happening there that we can replicate across the rest of the universe. But also being able to cross-divisionally, it's enabled our One Ecolab program where we can see opportunity across our different verticals, right? Pairing our ERP system data, which we've invested in, as well as our CRM data to understand where those opportunities are and then connect that to what we understand where a best in class solution customer is, what solutions they're deploying, and how do we extrapolate across that their entire network.
And by the way, that technology, when we have that technology, we have a very high customer retention rate already, but when we have that technology, it's even more so.
In a couple of your examples, you have a water treatment part of the business, you have a cleaning technology you're providing, maybe you have the pest management part. Is that also part of this platform, to leverage that loyalty you have in one of those to also gain share in these other businesses?
Yeah, totally. As we looked at that $150 billion market that I talked about earlier, there's a $55 billion opportunity with customers that we already have relationships with. Some of that's penetration of solutions with one division, but sometimes it's just the cross-sell between different verticals or different divisions. We've always had a Circle the Customer strategy even before I came to Ecolab.
It's been part of our strategy for a very long time. How I describe One Ecolab, it's operationalizing that strategy where it happened organically in the past sometimes, but how do we bring those teams together to provide those cross-divisional solutions to customers? For example, pest, as I talked about, the pest business is a cross-sell opportunity across all of our segments. In the pest business and their opportunity, they could double or triple size the business if we sold the pest elimination solutions at every other customer that we have, whether it be food and beverage or institutional or a pharmaceutical company.
How do you use this One Ecolab initiative to cut costs? You had a slide where that shows how you're going to get to the 20% operating income margin, and some of it was cost. Most of it was gross margin, but some of it was cost.
Yeah, the One Ecolab program is about growth. When we announced this in Q3 last year, there was a restructuring in the savings tied to it. But frankly, Steve, the restructurings are not why we're doing it. The savings that we announced were about $140 million over the course of three years, which is about 1% of SG&A. It's not super material in the scheme of things, and it's not why we're doing it. The One Ecolab program is about growth, right? How do we accelerate from the historical 4% sales that we've had over very long periods of time to this 5%-7% sales growth target? We do this by focusing and accelerating the capture of this $55 billion cross-sell opportunity, which includes the digital component that you talked about before.
The cost savings are honestly coming from how do we take the functional processes, the end-to-end processes that we have to support the sales growth and make that more scalable because we do not want those functional processes to be an inhibitor to growth. And so it's how do we create great processes to enable that growth and free up time from our teams to focus on the highest value items.
In your examples, you showed for each of these various industries that you have a customer, you saved them $10 million a year, $15 million, whatever. Does that just drive loyalty, or are you a beneficiary of that cost savings?
Both. Certainly both. As we talk about the TBD, which I mentioned before, our total value delivered, is that's how we quantify the value we deliver to our customer, which since the pandemic inflation, it's something that we've always done and we implicitly did, but we're operationalizing the TBD in a way we never had before. As we got this with the significant inflation, we got record high pricing. And in order to keep that pricing, as we always have, we've never had negative pricing in our history, but historically have had 1-1.5% of pricing and now are getting to pricing of 2%-3%. It's because we understand quantitatively that TBD in a way we never have before, right? And then being able to share in that where the customer, the TBD relative to the price we're getting is at least 2x.
So the customer is sharing in that value, and then we're getting that pricing of 2%-3%, which is enabled by that TBD delivery. And as you're delivering that value to customer, and when we have TBD, it's just not us saying it's value we've delivered. That's the customer agreeing on the value that has been delivered.
This razor razor blade model that you have, that would be in all of your technologies. It would be water treatment. Is that a company that needs to pre-treat the water going in or treat it during the process? Is that technology, that equipment, do you own that or do they own that?
Yeah, we do in virtually all cases. It's equipment and proprietary equipment that we have. And we have this razor razor blade. The razor in this is the anchor equipment. I mentioned in F&B earlier, the clean-in-place system is equipment that we have that we lease to a customer. That's an F&B case in an institutional space, like a restaurant. It would be the dish machine, which again, we've continued to innovate with this DishIQ, the smart dish machine. Then in an industrial or a plant where we're managing the water processes, this is the 3D TRASAR technology where it's the technology and the dispensing equipment to dispense chemistry on a real-time basis.
Are you seeing an increase in your industrial customers, not just from pre-treating water that might enable them to access something that was not crystal clean to start with? They could use something that was industrial wastewater that they could then reduce their reliance on freshwater. But then also their discharges of wastewater, are you seeing more and more scrutiny, regulatory scrutiny that those discharges have to meet even more stringent PFAS is what comes to mind?
Yeah, we do not operate in PFAS per se, right? There's technology that we have, but it's not something we do. It tends to be in more of the municipal space. But it comes to water, certainly, as I talked about before, the gap between fresh, the demand and supply for freshwater is going to continue to be a problem. And in some of the areas of the world, it's already a significant problem. For India, for example, where we had a very large customer that wanted to double the size of their operations, but the local government said they could, but couldn't use any more water.
And so we figured out how to reduce their water consumption in their existing facility by 50% to allow them to double the production, right? And so there are these demands in a lot of places. As you think about very high growth areas in water, like the Global High-Tech space, which for us is microelectronics and data centers, or in other high water demand areas like food and beverage, where there is really a need to reduce the water, reuse the water, and in some cases use like MicroE, ultra-pure water. And this is this concept of water circularity, minimizing the amount of discharge because waste water is really an engineering issue, right? It's an engineering failure, not being able to use as much water as possible.
Anybody want to jump in with a question? Sharon?
So I have this question on the resegmentation of the business. So in Q4, you guys came up with the new divisional segmentation. So maybe can you explain a bit the rationale behind that? What does the company want to achieve here in terms of helping the investor to understand the business case more? Or is there any maybe M&A implication behind this as well? Thank you.
Yeah, we're always looking in our segmentation generally aligns with how we operate. And the biggest change that we've made over the last year, which was combining our Healthcare business with our Institutional and Specialty Segment. Historically, Healthcare was in the Healthcare and Life Sciences Segment. But frankly, those are two very different businesses, right? They operate completely independently of each other, really. And one is obviously in hospitals, one is in pharmaceutical and bioprocessing.
And so the healthcare business, really, after obviously has been a business for us that has not been very profitable. We've talked about it. It's about how do we get the cost structure right? We sold the surgical business last year, which frankly was the highest margin business there, but strategically didn't make sense, right? With the connection to the infection prevention business. And that legacy infection prevention business, there's two parts to it. It's really instrument processing, which is something that we want to invest in in terms of anchor platform. But the environmental hygiene piece of it is the biggest part of it, which is very similar to what we do in hotels and restaurants, for example, in terms of the environmental hygiene. A lot of the same chemistries, which are regulated, are used both in hotels, restaurants, and hospitals. So it's a very similar protocol.
And in some cases, our Institutional people were already showing up at the hospital, maybe working in the food service or the cafeteria of the hospital, but we're not involved in the environmental hygiene, and that was in the Healthcare business. So by pulling those field organizations together, there's definitely a synergy here. So that was the biggest change. And then we've talked about carving out our Global High-Tech business as a division within the Industrial Segment. And really, as we have done for a very long time, like we did for Life Sciences, where we identify high-growth, high-margin businesses that we want to fuel and focus on, that we will carve them out as individual businesses. We did this several years ago with Life Sciences, which was largely part of the Food and Beverage Division, but this was a market within that that was high-growth, high-margin.
And so we carved it out to focus. Same thing that we're doing with Global High-Tech as now a division within the industrial segment.
Claire?
Hi. I'm just wondering if you could roughly segment out the $1.7 billion in the 2025 innovation pipeline. And then broadly, how much segment mix do you expect in the next or mixed shift do you expect in the next five years?
Well, on the innovation, what I'd say there is that $1.7 billion, there's a number of programs that go behind us. Obviously, we've had a lot of businesses. But the big thing here is this shift, and you saw that proportion of how much is focused on product innovation in various businesses to this breakthrough innovation and that becoming a much bigger part of it.
And those big programs that I talked about before around water circularity in the Global High-Tech business, both MicroE and data centers and the Life Sciences Segment, the new generation bioprocessing. So I would say, and then DishIQ, which is the Institutional and Specialty Segment, talking about the big programs for each business, DishIQ and Redi-Dose solids. So there are big programs with each of these segments because we're wanting to fuel growth in all of them. So I don't have a specific breakdown of the $1.7 by business. And then in terms of the overall mix, as we think about how we accelerate from that 4% growth to that 5% top line, it's getting after that $55 billion. But as part of that, it's also investing in these higher growth businesses, which we have in each of our segments.
The bigger ones being in the Global High-Tech, where this is a business right now that's a few hundred million dollars, but growing at double digits, which will certainly provide an advantage to the overall mix within industrial because of the high-growth business. But then if you look at Life Sciences, which the total Life Sciences business is only about $700 million, again, a double-digit growth business, which will then become a bigger part of the mix. And from a margin profile, both of those businesses also have margins, OI margins above the corporate average. And so you will also see a contribution there.
And maybe just one last one for you, Scott. Any areas for M&A? Any of your businesses, do you think there's some bolt-ons?
Yeah, I mean, bolt-ons are deals we love to do, Steve, because we really know the business. We can pull them in. They have great synergies, and in some cases, they also bring interesting technology. Last year, for example, we did a bolt-on in water, a small regional water competitor, but also that had a technology, so we understand smart water management. It's a great return, very low risk from an M&A integration perspective, but they also brought a unique technology that we can take and scale across our operations, so that is an ideal bolt-on in my mind. We've done a couple of small acquisitions, regional competitors that we can integrate, so bolt-ons are great. We've done them very well for very long periods of time.
Very good. We're out of time. Please join me in thanking Scott for this presentation.
Thank you.
Awesome. Well done. Thank you. Back. It's a pleasure to host this next session with Nutrien. I got Ken Seitz up here next to me. He's a CEO. He's had a long career in ag and mining. He used to run the potash business for Nutrien. Years ago, he was the CEO of Canpotex. So clearly knows potash. Also up here is Jeff Tarsi. Jeff runs the retail business for Nutrien. I met Jeff about 20 years ago, back in the UAP days when he was at UAP.
This is pre-acquisition by old Agrium. And he took me through a cotton field in Missouri, or as he referred to it, in the Bootheel. But so Jeff's got a long history in the retail business, ran the retail business in North America, ran it in South America, and now is global leader of the retail business. So awesome to have you both.
Thank you. Thanks for having us.
Maybe we'll start with you, Ken. You got a lot of momentum going in each of your various businesses. Give us a little bit of your high-level view on 2025. Where are you the most confident that you have growth?
Yeah. No, thanks for having us, Steve. Great to be here. And yes, we're entering the year here with some tailwinds. I think it kind of starts with the grower, and we can go really around the world, whether it's Southeast Asia and palm oil prices, whether it's a focus on food security that we're seeing a real step change in crop nutrient consumption in China, whether it's over to India where growing conditions are good. Certainly in Brazil last year, record fertilizer consumption.
We expect that to grow again this year or here in North America where corn prices to start the year have been strengthening up to $5 and saw some optimism, I would say, among farmers in this part of the world and a global grain stocks-to-use ratio that continues to be really quite tight. We haven't seen it this tight really since 2012, 2013. So it doesn't take much weather events and whatever else to tip that ratio. And we see that reflected in price. And indeed, with what the USDA has said about corn production here in this part of the world, we see that tightness now reflected in the corn price. So starting the year in terms of farmers and grower sentiment, we're feeling reasonably optimistic, I would say, for our business and what it is that we do.
We're coming off a strong year in our downstream business, in our retail business, where last year we were able to grow proprietary products. We're continuing on with our network optimization work. We saw strong margins in crop protection. And entering this year, we did have some weather events in 2024, which we always do, which we saw the impact on fertilizer in North America. We expect those volumes to return this year, weather cooperating, but that farmers will certainly look toward balanced fertilization to maximize yields. And that will carry on with our proprietary product growth. We'll carry on with optimizing our network and, importantly, continue to improve our business in Brazil. So that when we talk about earnings, our investor-day target of $1.9-$2.1 billion EBITDA out of our retail business, our downstream business next year, we have some confidence in that one.
And then in behind that, of course, is our footprint of the largest fertilizer production on the planet. And we can go commodity to commodity. In potash, we see tightening because of the supply and demand fundamentals. We can certainly talk more about that, Steve, but nitrogen as well, urea, with Chinese export restrictions and strong seasonal demand. We've seen favorable pricing there. And on ammonia, while we've seen some seasonal softening and some improved reliability, maybe in the Middle East and some potential new production this year out of the Gulf Coast, the fact is that European gas prices are still high. And we still have ammonia prices, albeit there's been some softening, but still above that $500 per ton ammonia that we call mid-cycle pricing.
And just looking at starting the spring planting season here in the U.S., some growers out as we speak and expected expanded corn acreage this year, which means good things for our business. So yeah, you put it all together, Steve. And I've been using the words over the last couple of days. We're cautiously optimistic.
And in recent years, you've pulled back on some of your investments in growth. How do you think about it now? Is it more return to shareholders, or do you see opportunities for some growth investments?
It's just I kind of think of it as high-grading our portfolio of growth investments. And so you're absolutely right. We were looking at building a clean ammonia plant. And the economics of that thing at the end of the day, even with the 45Q tax credit, in the end, it didn't make sense for us.
And so we walked away from that one. You're right, Steve, that we've deployed capital in Brazil. And that's been an incredibly challenged environment for us. And yet, even with the market continuing to be uncooperative, we have been making great strides in improving that business. And we have to, we're charting a path on what our exposure to Brazilian growth in agriculture looks like. So yes, we're pulling back on some of these things, but we have, and we have pulled back growth CapEx by about half from about $1 billion to $400-$500 million. But that $400-$500 million is just really focused on high conviction growth opportunities.
So whether it's automating our mining machines, which is improving productivity, definitely safety outcomes, whether it's the reliability, brownfield and debottlenecking investments we've made in our nitrogen complex, that's all contributing to, we talked about adding two to three million tons of fertilizer production to our portfolio last year at Investor Day and achieving that by 2026. We believe we're on track to do that. And if you look at the volume growth from 2024 to 2025, 2025 to 2026, again, we certainly have line of sight to that one. And then in our downstream business, flowing those crop nutrients through our footprint, but growing our proprietary business, growing our or optimizing our network and the cost benefits we get from that. It's just to say that it's very targeted growth as well in our downstream business that's going to contribute to that $1.9-2.1 billion EBITDA.
So, we do think about our business and get excited about it in terms of growth, but just extremely targeted and only focusing on what we're good at, and that is serving a farmer and producing fertilizers and flowing them through to that farmer.
I'm going to drill through each of their businesses, but if anybody wants to jump in with a question, just raise your hand. Let's talk about, in the downstream retail, the potential for more bolt-ons. The one that you guys made a few years back in Central Illinois, the Van Horn, I knew that business for a long time. My college roommate was loyal to that retailer, and their improvement, what they disclosed to me, their improvement in profitability post the acquisition was 2X. Talk about that potential to drive profitability through acquisitions.
Yeah, and first of all, that was a fabulous acquisition, a great business run by a good management team there. And we had our eyes on that one for quite a while. If you know of another one like that, I'm all ears right now because it sits in a really sweet spot for us as well in that Corn Belt. And Steve, I think when you look at what we can bring to that type of business, and the thing that jumps out at you to start with is that proprietary products business. And so businesses that size don't have the luxury of investing in a proprietary product business, especially across all three shelves, crop protection, seed, and the nutrient side of things. And so we were immediately able to bring that platform into that business.
And they were able to, because they had such good agronomy relations with their customers there, we brought a lot of value-added type products that we could expand out into their customer base. And when we do these tuck-ins or bolt-ons, these types of synergies come immediately. And that's what makes them so attractive to us. Also, Steve, I mean, if you look at the size that we are in the crop protection side of the business and the nutrient side of the business, and obviously that should come with some advantages as well in how we buy and what our terms are from that standpoint. And so we were able to add some of those synergies as well across each of those shelves that would have added to that side of the business.
I'll tell you also, we take a lot back across the rest of our network when we do those acquisitions as well. There are things that we learn out of those businesses. For instance, Van Horn was exceptional in upselling seed and seed with a lot of technology and such, and so there were things that we were able to integrate around our people in that same area that made them better on that seed shelf, which has been a goal of ours for some time, is increasing our share in that seed market, so a lot of things, a lot of things we learned out of the application side of the business as well from that standpoint of how do we run the equipment more efficient. So I always say this, and it doesn't matter where we do acquisitions, the learnings go both ways.
There are synergies that we're going to bring on day one, and there are things that we're going to pick up that when we pick those up, look how broad our network is that we can expand that across.
And your share in the U.S. on that retail channel, is it in the low 20s somewhere? Where do you think you can get it with bolt-ons without touching the co-ops?
Yeah, that's been a, I'd love to figure out a way to do something on the co-op side of things. We hadn't been able to do that, but we would like.