Thanks, Christophe. That concludes our formal remarks. Operator, would you please begin the question-and-answer period.
Operator
(Operator Instructions) Tim Mulrooney, William Blair.
Hi. This is Luke McFadden on for Tim Mulrooney. Thanks for taking our questions. So I know you've talked about sourcing more than 90% of your raw materials regionally. So on the surface, it sounds like you're pretty well insulated from the trade war in any given region. But if we take, for example, the US, where you have many companies scrambling to onshore as much of their supply chains as possible and as fast as possible, is this having any kind of a second derivative impact on your domestically sourced materials? And just maybe as a follow-up, I was hoping you could just level set us on where you expect pricing to ultimately shake out in 2025 after taking into consideration the recent surcharge? Thanks.
Christophe Beck
Hi, thank you, Luke. Good to hear you. Well first, as you said, we're in a very fortunate situation with our local for local strategy where 92% of what we sell is produced locally. We didn't do that for tariffs. Obviously, that's something that we've built over years, mostly to secure supply to our customers, to have it at most optimized cost and it helped us for FX. And now, it's helping us, unfortunately, if I may say, for tariffs. So that's a very good place to be for our customers and our company.
That's also helping us to mitigate the 10% that we're kind of expected for 2025. So we feel good about the overall plan that we had for 2025. Obviously, there are the two small exceptions, if I may say. You mentioned both of them, Luke. On one hand, so China and the move from many companies, as you said, to source in the US, which drives prices higher as well at the same time.
So talking about China, we don't buy much from them because 99% of what we sell there is produced locally, but we still import roughly $100 million from China. But when you apply 145% tariff on top of the inflation, on local sourcing here in the US because of people, so onshoring, as you mentioned. You get to some meaningful numbers, hence the nominal trade surcharge of the 5% that will be entering in effect on May 1.
So this trade surcharge will apply only in the US and the commitment that we've made to our customers is also to make sure that the value we provide to them, incremental savings in their operations will overcome the total pricing that we are asking from them as well at the same time in a typical win-win situation as we practiced for many, many years with our customers.
So ultimately, to answer your other questions as well in terms of delivered product costs, we started the year -- kind of, market was slightly up. Our net P&L impact was slightly down because of the efficiencies that our great supply chain and procurement teams could deliver. And if I look forward, so in the quarters to come, it's probably going to be probably more towards mid-single-digits increase, when we put everything together with everything we know now. Obviously, things can change in the weeks or months to come.
And if I think about the overall pricing with the surcharge, I think we will get close to 3%, maybe better. We will see how that works. But all in progressing very well. I like how the team has gotten ahead of what's happening at the market and done in a way that's a win-win for customers and for our shareholders as well at the same time.
Operator
Manav Patnaik, Barclays.
Manav Patnaik
Thank you. Christophe, in mid-March, you had already started talking about seeing weakness in the demand environment broadly. And I was just wondering, if you could give us an update since then. Have things gotten worse? Did that happen kind of in advance of what people see here? Just some flavor there and in terms of how we should think of that translating into the volume assumptions for the rest of the year.
Christophe Beck
It's a good question, Manav. In February, so the second half February, we saw that dip in demand, especially in the heavier industries that we're serving. I was not sure if it would keep going down in the weeks to come. And if I look back, since we talked, a month plus ago, well it dipped but it can stabilize at that lower level since then, which I take as a reasonably good news. But I don't take that as a given for the rest of the year. My assumption is that it's going to keep softening in the months to come. It's not going to be a straight line because of the events happening out there.
So as a team in a typically Ecolab fashion, it's to focus on offense, it's to play to win, it's to focus on new business. The new business in the first quarter has been very strong. It's been a real record for our whole team. So we're kind of generating our own tailwind, which is why I feel confident that we should have positive volume in 2025. We see how strong that's going to come. But as far as I can see, I feel reasonably good and the stabilization over the past few weeks is kind of, at least, short-term reassuring element.
Operator
Ashish Sabadra, RBC Capital Markets.
Thanks for taking my question. I just wanted to focus on the institutional and specialty segment. I was just wondering if you could talk about the demand trends there, what you're seeing from a foot traffic perspective. And as you continue to drive the digital solution, how you can help offset some of the weakness we might see from a foot traffic or occupancy perspective? Thanks.
Christophe Beck
Yeah, great question, Ashish. Thank you. Generally, our INS business is doing really, really well. And it keeps on that trajectory, which is really encouraging. I love what this team is doing. It's about gaining shares the right way by helping our customers, well, produce more meals and serve more guests while reducing their cost of labor and energy and water and waste as well at the same time. It's important.
So when we look at the overall number of INS, we know that we have healthcare in there now, which is we're using 1 percentage point, the INS number, so institutional division is growing at 5%. Very steady, very strong, very good.
Specialty is actually underlying growing even much faster than what we see in our reported numbers, because it was kind of the last quarter-ish of a private label business that we decided to discontinue last year and that business is going to improve. And there is also a natural shift in more difficult economic times from foodservice restaurants to quick serve restaurants. So that's going to have specialty as well.
So feel really good about the INS trajectory. Margins are improving nicely. It's not going to be the same improvement for every quarter coming up, but it's going to keep improving in the quarters to come as well. It's at the highest margin level it's ever been. So in a very good place, good growth, doing the right thing for customers, margins improving. And innovation in that business, that's at the strongest point it's ever been, as well. So really happy with what's happening in INS, not in an easy situation.
Operator
John McNulty, BMO Capital Markets.
John McNulty
Yeah, good afternoon. Thanks for taking my question. So you've been pushing the Ecolab One initiative pretty hard. I guess, can you help us to think about the growth the business saw for those roughly 35 accounts, say, versus the core, just so we can get a better feel for the volume trends there in this kind of new big push initiative?
Christophe Beck
Thank you, John. It's the One Ecolab initiative actually, which you're right, is focused on growth. So I'll be careful not to disclose too much numbers. But our focused accounts are progressing very well because if I remember, I'll remind you a little bit the broader picture. One Ecolab is to increase our share of the $55 billion penetration opportunity that we have, mostly with our corporate accounts and we started focusing on our top 35 that are doing really well.
How do we approach them? It's best-in-class approach. It's basically, so for each of those customers, understand what is their best operating unit that they have around the world in terms of product outcome, cost performance, environmental impact and then drive that performance across their own network. We translate that, obviously, in a dollar TVD, total value delivered, and we give ourselves a few years to get there as well. That's the general approach strategically. And One Ecolab as a program, as a platform enables all that for our firm clients to get that done.
So we're early on that journey, John. I like the progress that we're making here. Customers are very interested in that because it's cool insights to know what's best in class within my company or outside my company within the industry as well. And as you know, so on the internal side, from a productivity perspective as well, One Ecolab is improving and progressing very well not in terms of cost-cutting but in terms of operational performance because of AI platforms that we're using in some critical processes. We're using agents as well at the forefront as well as technology. And so far, it's working really well, which is why we're ahead as well of our savings delivery on that program. So on both fronts, growth and performance improvements, we see some very good progress.
Operator
David Begleiter, Deutsche Bank.
David Begleiter
Thank you. Christophe, you announced a surcharge back in 2022 for energy. Can you remind us the success of that surcharge? How much did you realize versus what you announced? And would you expect a similar or higher realization on this surcharge this time around? Thank you.
Christophe Beck
So the good news is that in 2022, that was the first time we were doing a surcharge like that. Honestly, I knew that the team would get something done. I didn't know how quick and how much we would truly get. And it worked out really well. As we all remember, everything stuck as well, got converted into structured pricing, driven by value generated for customers as well, all in that win-win approach between customers and shareholders ultimately here. So we had this 8% surcharge back then. At the highest, it went up to 5% surcharge, then it got converted into structured price. So you lost track a little bit of what was the net impact of it. But it worked out very well actually here.
So we see how it works on this one. It's the same platform. It's the same approach. It's on one country, as mentioned. So just in the US at least for now, we'll see what happens with the tariffs, as well as going forward. So it's not a perfect science, but generally, it works quite well. And really, our objective is to mitigate, obviously, so the incremental cost while driving even more savings at the customer location in order to make sure that we have something that is sustainable. So this time around, I feel quite good that that's going to work the way that it's intended.
Operator
Vincent Andrews, Morgan Stanley.
Vincent Andrews
Thank you. Last quarter in Pest, you had some safety issues which had a profitability or negative profitability impact to them. Comments today said that those metrics are getting back in the right direction. So I'm just curious, in the first quarter, were there still sort of adverse costs associated with that? And is there any adverse costs still expected in the guidance for the back half?
Christophe Beck
Yeah, there were some, as I mentioned actually, so last quarter. So it doesn't happen, obviously, on a calendar basis. But generally, the safety insurance costs are getting behind us. And as I mentioned last time, for me, that was mostly a human issue. I knew that it would be kind of short-to-mid term, but happy that our safety performance has improved dramatically. In pest elimination, we've installed in most vehicles now, so dash cans, that are looking at where the vehicles are going and how is the driver behaving as well.
We've reduced dramatically our safety incidents by doing so much so that we are leveraging all those best practices for other businesses, all our folks that are on the road, as you know. So we have close to 30,000 people on the road generally.
So as unfortunate and sad as it was for pest, I think that we're getting this one under control. At the same time, we can leverage all what we've learned across the company. It's going to take time because that's practical work, obviously, to get them.
So that's moving progressively behind us. At the same time, we are shifting towards pest Intelligence, which is this remote monitoring of devices, mousetraps for a different word, obviously. That's quite a heavy lift for our team. We've completed one of the major retailers with it as well, with very good results, with much more pest free environment at a lower cost, which is a really good proposition.
But all in, obviously, it works. It takes time. That has an impact slightly on growth and our margins. But generally, I'm really happy with that business, with the leadership team, with the mindset we have on that team. The best days of pest elimination are ahead of us. And as you will see, Q2 margins are going to improve quite substantially, as I mentioned in my remarks as well at the beginning. So overall, a very good story that keeps getting better.
Operator
Patrick Cunningham, Citi.
Patrick Cunningham
Hi, good afternoon. Very helpful disclosure on the digital sales. You mentioned an accelerating growth rate throughout the year and over the coming years. What sort of growth rates and margin accretion are you anticipating? And can you unpack this anticipated growth between software subscriptions versus hardware sales?
Christophe Beck
Yeah. So a few questions, Patrick, in your question here. So we're going to learn together, obviously, as we keep reporting on that. So we're not disclosing margin of that yet because we need to do it the right way. There's a lot of accounting practices that we need to get right, obviously, for that. We're going to get there as soon as we're ready to do it. But as you can imagine, it's very high because you have almost no, obviously, materials related to it since it's all digital.
To your question on hardware versus software, hardware needs to be installed because it's AI-ish machines, it's pest intelligence devices, it's 3D TRASAR and so on. So that grows nicely but at the much lower growth rate than software, which is as it's called software. So we don't need to install anything except on a computer getting the right connection and monetizing the subscription as we progress.
So as you know, most of what we do in digital today has been done for a few years or many years for free. And as we upgrade technology, software and consumption models as well, so we charge slightly for it as well to do it in a smart way for our customers, always driven by generating more value than what we're charging. That's the EROI approach from the company.
But when you think about it, we have 100,000 devices that are connected today. We have over 1,000,000 customer locations with a lot of devices that we could connect in each of them. And most of them are not being monetized, which is what drives me towards clearly knowing that we will be building a multi-billion business through Ecolab digital. We're in the early innings of that journey. So the fact that we have over 300 million already growing double-digits and accelerating in the quarters to come as well, which showing a little bit the potential of that growth opportunity that we have here, which I think is going to be significant in the mid term.
Operator
Chris Parkinson, Wolfe Research.
Chris Parkinson
Good afternoon. Chris, you hit on a few of your growth engines. But when you cross over pest elimination, light water with data center, as well as kind of the green shoots for the recovery and life sciences and biopharma. In the intermediate term, what are you the most enthusiastic about? And are there any of those three that you think you're going to further evolve your go-to-market strategy to further solidify yourself as kind of the go to in any of those substrates? Thank you.
Christophe Beck
Thanks, Chris. I love and hate that question because you're asking is which kid I love the most. That's a bit of a hard one. They're all very well-positioned. But if I have to pick one, it would be data centers cooling, where we have not only a huge opportunity but the right to win. As we shared, we have cooling expertise that no one else has. We have fluids monitoring capabilities that no one else has as well at the same time. So we're bringing the three components of data center cooling so nicely together between cooling tower CDUs, so coolant distribution units, and we're producing those as we speak.
And third, the access to the chip as well, while you monitor through 3D TRASAR on the overall data center. So when I look at the number of data centers we have out there, the growth of data center construction as well the fact that chips used to be changed every three years. Now, it's getting closer to every six months, especially if there are direct-to-chip cooling as well at the same time.
Well, there's a lot of work and there's a lot of operating service that we need to provide as well. I love that business, the way we're building it with high-tech companies as well at the same time. Early on that journey, but in a great position. We're growing really fast, great margins, and it's going to be really big going forward.
Operator
Shlomo Rosenbaum, Stifel.
Shlomo Rosenbaum
Hi. Thank you very much. Christophe, can you talk a little bit about pest and when you expected to get growth accelerate back to what we've been seeing kind of the upper single-digits range? You talked about the margin getting better next quarter. But I want to ask a little bit about the revenue growth. And then, I know it's a two part or you just wanted one, but you mentioned something about agentic.ai and using that. If you don't mind expanding on exactly where you're using that within the company. Thank you.
Christophe Beck
Thank you, Shlomo. I'm going to pass the second question on Agentic to Scott, who is becoming an expert in that area by the day. Maybe first on pest elimination. First, we're growing 5%, which is kind of a good problem to have to your point. So we want to see that business get back to the high single type of growth pattern as well. I feel really good in getting towards that probably sometime during the second half of the year and certainly, so in '26 and beyond because we are building, so the most advanced pest elimination platform that's out there. We have all the capabilities, all the cloud platform, all the AI capabilities. We have 1,500 people that are working on digital technology in our company. Well, it's hard to beat, obviously, in our industry.
So not where exactly I'd like to be, so with the 5% today. The team doesn't like it either. But we know why we're there, it's because of all the transformation work that we're doing. But we know as well at the same time that, that transformation work is going to pay dividends, going forward. So getting at the higher growth rate sometime in the second half of the year, I would say, is a good expectation.
Maybe Scott on Agentic, what you got?
Scott Kirkland
Yeah, absolutely, Shlomo. As Christophe said, we're using the Agentic solutions, developing those in One Ecolab. But starting with building a foundation that we'll be able to use across the enterprise. But within One Ecolab, because it's very focused on the customers in the field, that's the processes that we're starting with, the processes close to the customers and closest to the sales team. So think lead to cash processes and looking at those initial use cases. And then as we build those, we'll be able to build off into other end-to-end processes.
Operator
John Roberts, Mizuho.
John Roberts
Thank you. Your dispensing equipment, whether it's a dishwasher or a 3D TRASAR machine, is bundled into your pricing. Is the surcharge primarily around covering the costs related to the dispensing equipment?
Christophe Beck
No, John. That's one component because some of it comes from China, but we have also chemistry that's coming from China. We have packaging that sometimes coming from China. So it's pretty broad-based. But as mentioned, John, we're talking about $100 million that we're importing from China, so for a $16 billion company, it's not exactly huge. But when you add 145% surcharge tariff on that, obviously, so you get too meaningful number.
And then, you have everybody else that is localizing sourcing of everything they buy in the US right now, which is driving purchasing cost up as well, which is a derivative from what's happening between US and China. And that's across the board, it's not just an equipment and dispensing technology. But we're talking about manageable numbers here, which is why I feel pretty good about how we can mitigate that and to do that in a way that's good for customers as well.
Operator
Steve Byrne, Bank of America.
Steve Byrne
Just another couple of questions on the surcharge. Is there any particular linkage in this, like, it's not natural gas or like your prior one? Is there the potential that it could be reversed if there was some resolution in tariffs and/or do you think you could convert this into more of a structural price increase rather quickly? And just one more comment, Christophe, you mentioned that you demonstrate value in your price increases. Do you have to generate or demonstrate an incremental 5% value to your customers associated with the surcharge?
Christophe Beck
Yeah, so Steve, a few elements to unpack your question here. First, on the value piece, this is what we call total value delivered, which we document and align and agree with customers. We've done that for years. So this is a very well-practiced process on how much we help them save in operating costs, in product improvements and in environmental impact as well. And in many cases, we even measure that on a real time basis through connected chemistry to the Ecolab 3D cloud. So this is something we know extremely well how to do.
And we sit together with customer when we look at a price increase like the trade surcharge, 5% is nominal. It's not a big number and usually, we're between 1% to 3% of their total cost as well in their operation. So we're talking about fairly small numbers for the customers. But still, we take it very seriously and we want to make sure that for the customer, it's a win-win. So a practice that we know very well how to do.
The second on tariffs going away, I'm not going to make personal comments on that. But I don't think that it's going to disappear. The 10% of baseline is here to stay. We haven't heard what's happening as well with Europe, especially other countries as well around the world. It's not going to be zero. We know that as well.
And as mentioned before, so the tariff from China is on kind of almost every product coming from there with a few exception. But for us, it's mostly all products. And the onslaught impact of people on-shoring in the US is pretty broad-based as well at the same time. So it's kind of an overall tide. It's not individual raw materials or packaging or equipment out there in a way makes it easier to manage than just a few as we'll hear because at the end of the day, we can mitigate that with a nominal surcharge, as we're going to do so on May 1.
The last part of your question, shifting trade surcharge into a structural price. That's exactly what we did with the energy surcharge, which was much higher as mentioned earlier as well, so a few years back. We know how to do it. We've demonstrated we can do it. We've held as well relationship with customers while we did it as well. So our approach is to make sure it ends up in structured price as quickly as we can. But this is not a perfect time. It depends on the customer, the industry, the situation, but that's the ultimate goal.
Operator
Mike Harrison, Seaport Research.
Michale Harrison
Hi. Good afternoon. I have kind of a higher level question here associated with the guidance. So you maintained your full year EPS guidance. But if I look at what's happened with the dollar, FX has really swung from being a headwind when you initially issued this guidance a few months ago to being a tailwind, probably in the rest of the year.
So should we think of the guidance and maintaining guidance as some FX tailwind or FX good guys offset by lower underlying market expectations, or have your underlying market expectations not really changed that much? And maybe the currency is something that could potentially give you upside in the rest of the year. Thank you.
Christophe Beck
I'll let Scott make a few comments here. But what I'd say is that we will deliver the same promise, the same expectations quarter-by-quarter and for the full year. But the path to get there has been different. We've seen it in the first quarter and will be different in the quarters to come, depending on what we know as we've been discussing on that goal. And what we don't know that we'll have, so to trigger new actions as well, so in the months to come. So same delivery, different path. The FX component is one of them, but it's a complicated equation. This is not the name of the game. It's one of the many drivers that we have or can deal with.
Scott, any comment on that?
Scott Kirkland
Yeah, sure, Mike. As Christophe said, there's a lot of variables, very dynamic environment. Specific to the FX, in Q1, as we expected, that was the headwind as we disclosed about 4% to EPS. And although more recently FX has improved, it's a volatile dynamic environment. And so we're going in this with a very clear view and believe that FX is still going to be a headwind for the full year although, maybe a bit better than we originally expected.
Operator
Jeff Zekauskas, JPMorgan.
Jeffrey Zekauskas
Thanks very much. I think I have a two-part question. Your global water business year-over-year was down a little bit in operating income in the quarter. Why was that? Revenues grew year-over-year. I think you had positive pricing.
Secondly, when you look at the water business, a lot of the water business is propylene derivatives. And maybe propylene derivatives are down 20% year-over-year. Chlorine is down. Ethylene is down. Oil is down. And if you look at your cost of goods sold, your cost of goods sold overall is down 3%. When you go to your customers and you say that you want a surcharge, do they resist at all or do they feel that it's amply justified in the current environment?
Christophe Beck
Jeff, two different questions here, again for the price is one. The first one, the water OI or operating income for the first quarter, the simple answer is, it was Europe and it was because of last year. We had a 200% increase in operating income in Europe in 2024. So it's the year-on-year comparison on Europe. That's the single story. Otherwise, a very good story and you'll see that in the second quarter and going forward as well in water. So I feel good about that.
The second part of your question, our DPC market, everything we buy, Jeff, the 10,000 raw materials and packaging that we're buying out there, they're up, they're not down. So when we look at everything together, if you look at all the indices, our basket is up. Then, you have our procurement team doing great work. We've been reducing as well our operating expenses or improved our operating performance in the plant as well around the world. And then, you end up on a DPC, delivered product cost, net-net that is 1% to 2% better than it was a year ago.
Well, that's going to change and it's changing right now. We see it as well all the reasons I mentioned on that call being import from China, being the onslaught here on the US market as well, which is why I expect, DPC and it is trending right now towards low-single up to mid-single up in the months to come. This is clearly sort of the trajectory that we're seeing right now.
So this is what we're discussing as well with customers. And I'll remind you that the core discussion we have with our customers is not on the cost side, it is really how much can we help them improve their operating performance as well. At the same time, this is real time, this is documented, this is aligned with customers, this is approved with customers. This is not just Ecolab coming up. So it's what we believe we saved with them, is what we believe we've saved together. That needs to be in the P&L as well at the same time. That's the whole discussion that we have with them. This is not new, but it contains part of the input cost, but the whole discussion is related to value.
Operator
Laurence Alexander, Jefferies.
Laurence Alexander
Good afternoon. Could you speak a little bit about how a shift in the US to aggressive deregulation would either create opportunities or headwinds for your institutional and pest businesses on a secular basis?
Christophe Beck
Well, the short answer here is, we haven't seen anything yet in terms of impact of the regulation on any business. I hope we're going to see that because this is a very important element of focus that we expect from the industry and that's been promised by the administration as well. At the same time, this is something that we should see as well in our downstream business. This is hard to see right now. So I remain hopeful that that's going to help industry in the US in the month and quarter to come. But so far, we haven't seen any positive sign in the numbers.
Operator
Jason Haas, Wells Fargo.
Jason Haas
Hey, good afternoon and thanks for taking my question. I was curious if you could talk about what trends you're seeing in the life sciences segment and if you expect that growth to accelerate through this year? Thanks.
Christophe Beck
Yes, Jason. We've been building that business for a few years. We've been growing not as fast as we were hoping. Obviously, early on when we acquired Purolite, especially at the end of 2021, competition was down double-digits. We were up single-digits. We kind of felt good about our delivery, but not as good as we were hoping for; as we were gaining share, innovating, building capabilities, which means getting the right expertise, so on our team building capacity as well in terms of manufacturing capacity with the highest levels of quality as well. That takes time to get done, obviously. Unlike a lot what the team has done over the last three years, we see now that business turning up in very nice ways as well.
I think we're getting to the place we were expecting at some point. The market is turning a bit better. That helps. Our business is doing even better for all the reasons I mentioned before as well. We keep investing as you see the margin, operating income margin that we have in the business are kind of reported in the mid-teens. If you look at underlying, so if you strip out the early investment, it's more in the mid-20s. So that's why I feel pretty good about that business keeping accelerating its top-line and getting sort of an operating income that's getting closer to 30% as we've been targeting early on, and as I've shared with you as well. And that's been the case during Investor Day as well.
Operator
Josh Spector, UBS.
Joshua Spector
Hi, good afternoon. I had a question just on SG&A. You've done a good job controlling that and you actually brought it down in the quarter. I guess I thought the SG&A as a percentage of sales would decline over time as you grew SG&A slower than sales, but you actually brought that down. So I was curious, one, what do you expect SG&A dollars to grow or decline for this year? And then, two, are you pulling any additional levers with SG&A already to help to achieve your goals for this year? Thanks.
Christophe Beck
Yeah, thank you, Josh. I'm going to pass that question to Scott, who has become a PhD in the SG&A management. Scott?
Scott Kirkland
Yeah. Thanks for the question, Josh. As Christophe mentioned before, the Q1 SG&A was a bit better than we had expected coming into the quarter and really helped by the One Ecolab program, which is going very well. And that helped deliver that 30 basis points of leverage that we had year-over-year. And that was net of what we talked about coming in the year, the continued growth investments that we'd be making.
And we expect to continue that as we did the last few years. If you think back to we had 2017, we're at a 29% ratio and we brought that down to 27% last year and continue to expect, as we've guided earlier that, we will deliver on this 20 basis points to 30 basis points for the full year probably at the lower end of that range, as we continue to make these growth investments, but also deliver on the incremental savings from One Ecolab that is going quite well.
Although I will say not every quarter will be created equal. And then, as we go long term, we expect with the One Ecolab program with the digital capabilities to be able to deliver SG&A leverage beyond our historical 20 basis points to 30 basis points annually.
Operator
Kevin McCarthy, Vertical Research Partners.
Kevin McCarthy
Yes. Thank you and good morning. I'm curious, Christophe, as to whether or not your thoughts on capital deployment have changed at all with the external environment being so volatile. Still early in earnings season, but we've seen some other chemical companies throttle back on CapEx. Are you still tracking towards 7% of sales there? And might you be any more aggressive or conservative in evaluating M&A opportunities, for example?
Christophe Beck
So the headline here, Kevin, is, no change, but I'd like to ask Scott to add some details and comments to that as well.
Scott Kirkland
Yeah. Kevin, good morning. As Christophe said, no change to the long-term capital allocation priorities. As we've always said, we're going to continue to increase the dividend, invest in the business. And the balance sheet is in a really, really healthy position entering the year. As we've talked, net leverage, Christophe mentioned, is opening is down to 1.8%, so below our long-term target of around 2 times. We also repurchased about $140 million of shares you probably saw disclosed in the first quarter. That was on top of the $1 billion we did last year.
And again, all buybacks in the future are going to be dependent upon those investment opportunities, including the M&A pipeline, which is very robust. But, the biggest thing is this strong balance sheet provides us a lot of optionality, particularly in an environment like this, to take advantage of both organic and inorganic opportunities to invest.
Christophe Beck
To add to that, it's a moment where we need to play to win with the environment that we are in, with the capabilities we have, with the momentum we have, the balance sheet we have, as mentioned by Scott. For me, it's time to gain share, it's time to innovate, it's time to invest in the business in our future, and that's exactly what we're doing.
Operator
Andy Wittmann, Robert W. Baird.
Andy Wittmann
Yeah, great. Thanks for taking my question. I guess I have two questions here. Christophe, in your answer previously on the life sciences segment, you talked about how like you still see a view towards 30% segment margins there and that underlying the investments that you've made I think in the physical plant there, the capital base for that business, I mean, you're running in the mid-20s. So it's all just suggestive of you just kind of need some operating leverage to run through that business.
So the question I guess on this one is, what do you think the approximate revenue level needs to be in life sciences to deliver something on that order of magnitude? Obviously, we're not looking for specifically, but just trying to see what you're thinking to it takes to achieve that level of margin.
And then, my second question would be a quick one for Scott. Just talking about the free cash flow outlook, obviously, the first quarter comp from last year on free cash flow is a really tough comp. This quarter feels more seasonally normal. But I'm just wondering, if you feel like the inventory cycle, given the tariffs and the trade risks that are out there, do you need to infuse more working capital into the business this year to be able to deliver certainty of supply for your customers, or do you still think that your normal cash flow targets as a percentage of net income apply here in 2025? Thanks.
Christophe Beck
Thank you, Andy. So I'll let Scott answer the second part of your question first and then I'll talk about life science.
Scott Kirkland
Yes, Andy. As you said, our Q1, although year-over-year, we believe was down. The Q1 was in line with our expectations and our historical progression, so the quarterly progression throughout the year. The Q1 was really comparing to a very strong comp last year, which was unusually high just due to timing of cash payments. But feel very good about with the strong earnings growth of 12% to 15% to be able to deliver our free cash flow conversion of this 90%, which is that we guided for the year.
Christophe Beck
So that's the second part of the question. The first part, obviously, very different on life science, Andy. So the investments that we're making are long-term investments, the plant extension in the UK on biotech. It's building in E1 in the US. It's building in E1 in Asia as well. So those are long-term investments. It's also deploying EBS, our SAP platform as well in there. It's also building our research muscle as well at the same time. Those are all long-term investments that we have here. We know exactly what we're doing, what's the impact on the P&L as well. That's why I can tell you kind of these are reported and underlying in the mid-20s.
So I think it's going to take a few years to get to the levels that we've talked about, depending as well on how the market is evolving. But we're building this business for the long run. If it takes us a couple of years to get to the steady state, high level place that we need or want to be, that's okay with me as well because we want to do it the right way for the long run.
Operator
Andres Castanos, Berenberg.
Andres Castanos
Hey, hello. I wanted to ask how important is early stage research for your life science business? Do you expect that this business may be impacted by cuts in the federal budget in subsidies? Thank you.
Christophe Beck
Good question. It's one of the open items out there. We don't exactly know how it's going to be. So far, it seems to be impacting mostly the generics. That's not exactly where we're focusing our attention. And we're serving customers globally in life science. So if it's being produced in Europe or in Asia today and it's moving to the US, we're going to benefit when it's coming here in the US. And if it's moving elsewhere around the world, we're going to follow them there as well at the same time.
So not too worried about what we're seeing right now. If there are more brutal changes, we'll revisit. But that's the world we're living in. We're fine with it. We adjust as we always do. But so far, I feel really good about our life sciences business whatever happens in the market out there.
So generally, one way to summarize in the whole discussion here is, while we're delivering as expecting in 2025, we expect to deliver as expected in the quarters to come and for the full year. But what's important to keep in mind is the path to get there is evolving because we try to stay ahead of what's happening in the world, but really with that spirit of playing to win as an organization, staying on offense, investing where it makes sense, supporting our teams and developing our teams.
So, feel good, in a difficult world about where we are and where we're going. I think that, in times like these that we make Ecolab even stronger and our future even better. So not easy, but a very good journey and a very good story so far.
Operator
Thank you. Mr. Hedberg, there are no further questions at this time. I'd like to turn the floor back over to you for closing remarks.
Thank you. That wraps up our first quarter conference call. This conference call and the associated discussion slides will be made available for replay on our website. Thank you for your time and participation, and hope everyone has a great rest of your day.
Operator
Ladies and gentlemen, today's conference has concluded. You may now disconnect your lines at this time. Have a wonderful day.
