FIRST QUARTER
HIGHLIGHTS:
- Reported sales $3.6 billion, +9% versus last year. Organic
sales +13%, led by double-digit growth in the Institutional &
Specialty, Industrial, and Other segment, and improved growth in
the Healthcare & Life Sciences segment.
- Reported operating income +38%. Organic operating income
growth accelerated to +19%, as continued strong pricing and
productivity gains more than offset easing but ongoing delivered
product cost inflation and challenging macroeconomic
conditions.
- Reported operating income margin 9.8%. Organic operating
income margin 10.6%, +50 bps versus last year, reflecting modest
gross margin expansion and improved productivity.
- Reported diluted EPS $0.82, +37%. Adjusted diluted EPS,
excluding special gains and charges and discrete tax items were
$0.88, +7%. Currency translation and higher interest expense had a
combined $0.11 per share unfavorable impact on first quarter
EPS.
2023
OUTLOOK
- 2023: Ecolab continues to expect to deliver quarterly
adjusted earnings per share growth that accelerates towards its low
double-digit historical performance.
- 2Q 2023: Expect second quarter 2023 adjusted diluted
earnings per share in the $1.15 to $1.25 range, +5 to 14% versus
last year.
First Quarter Ended March 31
Reported
Adjusted
(unaudited)
Public Currency Rates
%
Public Currency Rates
%
(millions, except per share)
2023
2022
Change
2023
2022
Change
Net sales
$
3,571.6
$
3,266.7
9
%
$
3,571.6
$
3,266.7
9
%
Operating income
351.6
254.5
38
%
379.3
331.5
14
%
Net income attributable to
Ecolab
233.4
171.9
36
%
250.5
236.5
6
%
Diluted earnings per share
attributable to Ecolab
$
0.82
$
0.60
37
%
$
0.88
$
0.82
7
%
Organic
%
2023
2022
Change
Net sales
$
3,533.8
$
3,137.7
13
%
Operating income
376.1
315.5
19
%
CEO Comment
Christophe Beck, Ecolab’s chairman and chief executive officer,
said, “We had a very strong start to 2023 with our team delivering
continued double-digit organic sales growth, consistent with our
expectations. We continued taking steps to further strengthen our
growth foundation, like making investments in our Life Sciences
business to capitalize on its long-term growth opportunities.
Overall, our efforts drove organic operating income margin
expansion with continued strong pricing and further productivity
gains, in addition to easing but ongoing inflationary headwinds.
This excellent performance resulted in 19% growth in organic
operating income and accelerating growth in adjusted earnings per
share despite significant currency translation and interest expense
headwinds in a challenging macroeconomic environment.
“Looking ahead, we are well positioned to build on our operating
momentum and expect further performance improvement in 2023. While
the macroeconomic headwinds and inflationary pressures are expected
to persist, our focus remains on offense – driving robust sales
growth as we leverage our leading customer value proposition and
our innovation pipeline, as well as on capturing our significant
operating margin expansion opportunity. As a result, we continue to
anticipate strong organic sales gains, double-digit growth in
organic operating income, and adjusted earnings per share growth
that accelerates towards our low double-digit historical
performance.”
First Quarter 2023 Consolidated
Results
Ecolab’s first quarter reported sales increased 9% and organic
sales increased 13% when compared to the prior year.
First quarter 2023 reported operating income increased 38% and
includes the impact of special gains and charges, which were a net
charge primarily related to restructuring costs. Organic operating
income growth accelerated to 19%, as strong pricing overcame
investments in the business, higher delivered product costs, and
softer volume.
Reported other income decreased $6 million in the first quarter
of 2023 due to higher pension costs.
Reported interest expense increased 40% reflecting the impact
from higher average interest rates on floating rate debt and last
year’s fourth quarter debt issuance.
The reported income tax rate for the first quarter of 2023 was
18.0% compared with the reported rate of 20.7% in the first quarter
of 2022. Excluding special gains and charges and discrete tax
items, the adjusted tax rate for the first quarter of 2023 was
19.8% compared with the adjusted tax rate of 19.5% in the first
quarter of 2022.
Reported net income increased 36% versus the prior year.
Excluding the impact of special gains and charges and discrete tax
items, adjusted net income increased 6% versus the prior year.
Reported diluted earnings per share increased 37% versus the
prior year. Adjusted diluted earnings per share increased 7% when
compared against the first quarter of 2022. Currency translation
had a $0.05 unfavorable impact on first quarter 2023 earnings per
share.
First Quarter 2023 Segment
Review
Global Industrial
(unaudited)
First Quarter Ended March 31
Organic
(millions)
2023
2022
% Change
% Change
Fixed currency
Sales
$
1,699.3
$
1,511.4
12
%
12
%
Operating income
215.6
179.9
20
%
20
%
Operating income margin
12.7
%
11.9
%
Organic operating income margin
12.7
%
11.9
%
Public currency
Sales
$
1,709.4
$
1,565.7
9
%
Operating income
217.7
191.1
14
%
The Industrial segment includes Water,
Food & Beverage, and Paper
Effective January 1, 2023, the Company’s
former Downstream operating segment is now part of the Water
operating segment. This change did not have any impact on the
Global Industrial reportable segment.
Global Institutional &
Specialty
(unaudited)
First Quarter Ended March 31
Organic
(millions)
2023
2022
% Change
% Change
Fixed currency
Sales
$
1,126.6
$
991.3
14
%
14
%
Operating income
125.7
108.6
16
%
16
%
Operating income margin
11.2
%
11.0
%
Organic operating income margin
11.2
%
11.0
%
Public currency
Sales
$
1,128.8
$
1,009.4
12
%
Operating income
125.9
110.9
14
%
The Institutional & Specialty segment
includes Institutional and Specialty
Organic sales growth accelerated to 14%. Continued double-digit
growth in the Institutional division reflected strong pricing and
new business wins. Specialty sales growth accelerated, driven by
robust quickservice sales growth. Organic operating income growth
accelerated to 16% as strong pricing overcame investments in the
business, higher delivered product costs, and unfavorable mix.
Global Healthcare & Life
Sciences
(unaudited)
First Quarter Ended March 31
Organic
(millions)
2023
2022
% Change
% Change
Fixed currency
Sales
$
378.6
$
348.2
9
%
9
%
Operating income
35.0
41.9
(16
)%
(16
)%
Operating income margin
9.2
%
12.0
%
Organic operating income margin
9.2
%
12.0
%
Public currency
Sales
$
379.7
$
362.8
5
%
Operating income
35.2
44.3
(21
)%
The Healthcare & Life Sciences segment
includes Healthcare and Life Sciences
Organic sales grew 9%, driven by double-digit growth in Life
Sciences and strengthening Healthcare sales growth. Organic
operating income decreased 16%, as strong pricing was more than
offset by softer volume, targeted investments in the business, and
higher delivered product costs.
Other
(unaudited)
First Quarter Ended March 31
Organic
(millions)
2023
2022
% Change
% Change
Fixed currency
Sales
$
329.3
$
286.8
15
%
15
%
Operating income
50.1
37.1
35
%
35
%
Operating income margin
15.2
%
12.9
%
Organic operating income margin
15.2
%
12.9
%
Public currency
Sales
$
330.0
$
294.0
12
%
Operating income
50.2
37.9
32
%
The Other segment includes Pest
Elimination, Textile Care and Colloidal Technologies
Organic sales growth accelerated to 15%, reflecting double-digit
growth across all divisions, with continued strong performance in
Pest Elimination. Organic operating income increased 35% as strong
pricing overcame investments in the business, higher delivered
product costs, and unfavorable mix.
Corporate
(unaudited)
First Quarter Ended March 31
(millions)
2023
2022
Public currency
Sales
$
23.7
$
34.8
Corporate operating expense
Nalco and Purolite amortization
50.2
52.7
Special (gains) and charges
27.7
77.0
Other
(0.5
)
-
Total Corporate operating expense
$
77.4
$
129.7
First quarter of 2023 corporate segment includes:
- sales of $24 million to ChampionX under the Master Cross Supply
and Product Transfer agreements Ecolab entered into as part of the
ChampionX separation
- amortization expense of $29 million related to the Nalco merger
intangible assets and $21 million related to Purolite acquisition
intangible assets
- special gains and charges were a net charge of $28 million,
primarily related to restructuring costs
Special gains and charges for the first quarter of 2022 were a
net charge of $77 million and primarily reflected Purolite
acquisition costs, COVID-related charges, and charges related to
our operations in Russia.
Business
Outlook
2023
Ecolab continues to expect to deliver performance that improves
despite a challenging macro environment characterized by high
delivered product costs and easing demand. In addition, higher
interest expense and currency translation are estimated to have a
combined $0.30 per share unfavorable impact in 2023, or a 7%
headwind to year-over-year earnings growth.
The Company expects double-digit growth in organic operating
income, driven by continued robust sales growth, easing delivered
product cost inflation, and improved productivity. This strong
performance is expected to more than overcome the challenging
environment to deliver quarterly adjusted earnings per share growth
that accelerates towards our low double-digit historical
performance.
2023 – Second Quarter
Ecolab expects second quarter 2023 adjusted diluted earnings per
share in the $1.15 to $1.25 range, compared with adjusted diluted
earnings per share of $1.10 a year ago. This forecast includes an
estimated unfavorable $0.12 per share impact from higher interest
expense and currency translation, or a 11% headwind to
year-over-year earnings growth.
The Company currently expects quantifiable special charges in
the second quarter of 2023 to be approximately $0.08 per share,
principally related to restructuring charges. Other than the
special gains and charges noted above, other such amounts are not
currently quantifiable.
About
Ecolab
A trusted partner for millions of customers, Ecolab (NYSE:ECL)
is a global sustainability leader offering water, hygiene and
infection prevention solutions and services that protect people and
the resources vital to life. Building on a century of innovation,
Ecolab has annual sales of $14 billion, employs more than 47,000
associates and operates in more than 170 countries around the
world. The company delivers comprehensive science-based solutions,
data-driven insights and world-class service to advance food
safety, maintain clean and safe environments, and optimize water
and energy use. Ecolab’s innovative solutions improve operational
efficiencies and sustainability for customers in the food,
healthcare, life sciences, hospitality and industrial markets.
www.ecolab.com
Ecolab will host a live webcast to review the first quarter
earnings announcement today at 1:00 p.m. Eastern Time. The webcast,
along with related materials, will be available to the public on
Ecolab's website at www.ecolab.com/investor. A replay of the
webcast and related materials will be available at that site.
Cautionary Statements Regarding
Forward-Looking Information
This news release contains certain statements relating to future
events and our intentions, beliefs, expectations and predictions
for the future which are forward-looking statements as that term is
defined in the Private Securities Litigation Reform Act of 1995.
Words or phrases such as “will likely result,” “are expected to,”
“will continue,” “is anticipated,” “we believe,” “we expect,”
“estimate,” “project,” “may,” “will,” “intend,” “plan,” “believe,”
“target,” “forecast” (including the negative or variations thereof)
or similar terminology used in connection with any discussion of
future plans, actions or events generally identify forward-looking
statements. These forward-looking statements include, but are not
limited to, statements regarding macroeconomic conditions,
delivered product costs, demand, inflation, currency translation,
and our financial and business performance and prospects, including
sales, earnings, special charges, margins, interest expense, and
productivity. These statements are based on the current
expectations of management of the company. There are a number of
risks and uncertainties that could cause actual results to differ
materially from the forward-looking statements included in this
news release. In particular, the ultimate results of any
restructuring initiative depend on a number of factors, including
the development of final plans, the impact of local regulatory
requirements regarding employee terminations, the time necessary to
develop and implement the restructuring initiatives and the level
of success achieved through such actions in improving
competitiveness, efficiency and effectiveness.
Additional risks and uncertainties that may affect operating
results and business performance are set forth under Item 1A of our
most recent Form 10-K, and our other public filings with the
Securities and Exchange Commission (the "SEC"), and include the
impact of economic factors such as the worldwide economy, capital
flows, interest rates, foreign currency risk, reduced sales and
earnings in our international operations resulting from the
weakening of local currencies versus the U.S. dollar, demand
uncertainty, supply chain challenges and inflation; the vitality of
the markets we serve; exposure to global economic, political and
legal risks related to our international operations, including
geopolitical instability, the impact of sanctions or other actions
taken by the U.S. or other countries, and retaliatory measures
taken by Russia in response, in connection with the conflict in
Ukraine; difficulty in procuring raw materials or fluctuations in
raw material costs; our ability to attract, retain and develop high
caliber management talent to lead our business and successfully
execute organizational change and changing labor market dynamics;
information technology infrastructure failures or breaches in data
security; the effects and duration of the COVID-19 pandemic or
other public health outbreaks, epidemics or pandemics; our ability
to acquire complementary businesses and to effectively integrate
such businesses, including Purolite; our ability to execute key
business initiatives, including restructurings and our Enterprise
Resource Planning system upgrades; our ability to successfully
compete with respect to value, innovation and customer support;
pressure on operations from consolidation of customers or vendors;
restraints on pricing flexibility due to contractual obligations
and our ability to meet our contractual commitments; the costs and
effects of complying with laws and regulations, including those
relating to the environment, climate change standards, and to the
manufacture, storage, distribution, sale and use of our products,
as well as to the conduct of our business generally, including
labor and employment and anti-corruption; potential chemical spill
or release; our commitments, goals, targets, objectives and
initiatives related to sustainability; potential to incur
significant tax liabilities or indemnification liabilities relating
to the separation and split-off of our ChampionX business; the
occurrence of litigation or claims, including class action
lawsuits; the loss or insolvency of a major customer or
distributor; repeated or prolonged government and/or business
shutdowns or similar events; acts of war or terrorism; natural or
man-made disasters; water shortages; severe weather conditions;
changes in tax laws and unanticipated tax liabilities; potential
loss of deferred tax assets; our indebtedness, and any failure to
comply with covenants that apply to our indebtedness; potential
losses arising from the impairment of goodwill or other assets; and
other uncertainties or risks reported from time to time in our
reports to the SEC. In light of these risks, uncertainties,
assumptions and factors, the forward-looking events discussed in
this news release may not occur. We caution that undue reliance
should not be placed on forward-looking statements, which speak
only as of the date made. Ecolab does not undertake, and expressly
disclaims, any duty to update any forward-looking statement whether
as a result of new information, future events or changes in
expectations, except as required by law.
Non-GAAP Financial
Information
This news release and certain of the accompanying tables include
financial measures that have not been calculated in accordance with
accounting principles generally accepted in the U.S. (“GAAP”).
These non-GAAP financial measures include:
- fixed currency sales
- organic sales, formerly known as acquisition adjusted fixed
currency sales
- adjusted cost of sales
- adjusted gross profit
- adjusted gross margin
- fixed currency operating income
- adjusted operating income
- adjusted fixed currency operating income
- adjusted fixed currency operating income margin
- organic operating income, formerly known as acquisition
adjusted fixed currency operating income
- organic operating income margin, formerly known as acquisition
adjusted fixed currency operating income margin
- adjusted tax rate
- adjusted net income attributable to Ecolab
- adjusted diluted earnings per share
We provide these measures as additional information regarding
our operating results. We use these non-GAAP measures internally to
evaluate our performance and in making financial and operational
decisions, including with respect to incentive compensation. We
believe that our presentation of these measures provides investors
with greater transparency with respect to our results of operations
and that these measures are useful for period-to-period comparison
of results.
Our non-GAAP financial measures for adjusted cost of sales,
adjusted gross margin, adjusted gross profit and adjusted operating
income exclude the impact of special (gains) and charges and our
non-GAAP financial measures for adjusted tax rate, adjusted net
income attributable to Ecolab and adjusted diluted earnings per
share further exclude the impact of discrete tax items. We include
items within special (gains) and charges and discrete tax items
that we believe can significantly affect the period-over-period
assessment of operating results and not necessarily reflect costs
and/or income associated with historical trends and future results.
After tax special (gains) and charges are derived by applying the
applicable local jurisdictional tax rate to the corresponding
pre-tax special (gains) and charges.
We evaluate the performance of our international operations
based on fixed currency rates of foreign exchange, which eliminate
the translation impact of exchange rate fluctuations on our
international results. Fixed currency amounts included in this
release are based on translation into U.S. dollars at the fixed
foreign currency exchange rates established by management at the
beginning of 2023. We also provide our segment results based on
public currency rates for informational purposes.
Our reportable segments do not include the impact of intangible
asset amortization from the Nalco and Purolite transactions or the
impact of special (gains) and charges as these are not allocated to
the Company’s reportable segments.
Our non-GAAP financial measures for organic sales, organic
operating income and organic operating income margin are at fixed
currency and exclude the impact of special (gains) and charges, the
results of our acquired businesses from the first twelve months
post acquisition and the results of divested businesses from the
twelve months prior to divestiture. In addition, as part of the
separation, we also entered into a Master Cross Supply and Product
Transfer agreement with ChampionX to provide, receive or transfer
certain products for a period up to 36 months and for a small set
of products with limited suppliers over the next few years. Sales
of product to ChampionX under this agreement are recorded in
product and equipment sales in the Corporate segment along with the
related cost of sales. These transactions are removed from the
consolidated results as part of the calculation of the impact of
acquisitions and divestitures.
These non-GAAP financial measures are not in accordance with, or
an alternative to, GAAP and may be different from non-GAAP measures
used by other companies. Investors should not rely on any single
financial measure when evaluating our business. We recommend that
investors view these measures in conjunction with the GAAP measures
included in this news release. Reconciliations of our non-GAAP
measures are included in the following "Supplemental Non-GAAP
Reconciliations" and “Supplemental Diluted Earnings per Share
Information” tables included in this news release.
We do not provide reconciliations for non-GAAP estimates on a
forward-looking basis (including those contained in this news
release) when we are unable to provide a meaningful or accurate
calculation or estimation of reconciling items and the information
is not available without unreasonable effort. This is due to the
inherent difficulty of forecasting the timing and amount of various
items that have not yet occurred, are out of our control and/or
cannot be reasonably predicted, and that would impact reported
earnings per share and the reported tax rate, the most directly
comparable forward-looking GAAP financial measures to adjusted
earnings per share and the adjusted tax rate. For the same reasons,
we are unable to address the probable significance of the
unavailable information.
(ECL-E)
ECOLAB INC.
CONSOLIDATED STATEMENTS OF
INCOME
(unaudited)
First Quarter Ended
March 31
%
(millions, except per share)
2023
2022
Change
Product and equipment sales
$
2,876.3
$
2,624.1
Service and lease sales
695.3
642.6
Net sales
3,571.6
3,266.7
9
%
Product and equipment cost of sales
1,798.3
1,695.6
Service and lease cost of sales
406.9
377.8
Cost of sales (1)
2,205.2
2,073.4
6
%
Selling, general and administrative
expenses
990.3
914.7
8
%
Special (gains) and charges (1)
24.5
24.1
Operating income
351.6
254.5
38
%
Other (income) expense
(13.1
)
(18.8
)
(30
)%
Interest expense, net
74.2
53.0
40
%
Income before income taxes
290.5
220.3
32
%
Provision for income taxes
52.4
45.6
15
%
Net income including noncontrolling
interest
238.1
174.7
36
%
Net income attributable to noncontrolling
interest
4.7
2.8
Net income attributable to Ecolab
$
233.4
$
171.9
36
%
Earnings attributable to Ecolab per common
share
Basic
$
0.82
$
0.60
37
%
Diluted
$
0.82
$
0.60
37
%
Weighted-average common shares
outstanding
Basic
284.6
286.2
(1
)%
Diluted
285.9
288.1
(1
)%
(1) Cost of sales and Special (gains) and
charges in the Consolidated Statement of Income above include the
following:
First Quarter Ended
March 31
(millions)
2023
2022
Cost of sales
Restructuring activities
$
3.2
$
2.6
Acquisition and integration activities
-
27.6
COVID-19 activities, net
-
16.3
Russia/Ukraine activities
-
6.4
Subtotal (a)
3.2
52.9
Special (gains) and charges
Restructuring activities
12.6
0.8
Acquisition and integration activities
5.0
7.5
COVID-19 activities, net
-
1.5
Russia/Ukraine activities
0.3
11.6
Other
6.6
2.7
Subtotal
24.5
24.1
Total special (gains) and charges
$
27.7
$
77.0
a) Special charges of $0.8 million and
$52.0 million in the first quarter of 2023 and 2022, respectively,
were recorded in product and equipment cost of sales. Special
charges of $2.4 million and $0.9 million in the first quarter of
2023 and 2022, respectively, were recorded in service and lease
cost of sales.
ECOLAB INC.
REPORTABLE SEGMENT
INFORMATION
(unaudited)
First Quarter Ended March 31
Fixed Currency Rates
Public Currency Rates
%
%
(millions)
2023
2022
Change
2023
2022
Change
Net Sales
Global Industrial
$
1,699.3
$
1,511.4
12
%
$
1,709.4
$
1,565.7
9
%
Global Institutional & Specialty
1,126.6
991.3
14
%
1,128.8
1,009.4
12
%
Global Healthcare & Life Sciences
378.6
348.2
9
%
379.7
362.8
5
%
Other
329.3
286.8
15
%
330.0
294.0
12
%
Corporate
23.6
34.6
(32
)
%
23.7
34.8
(32
)%
Subtotal at fixed currency rates
3,557.4
3,172.3
12
%
3,571.6
3,266.7
9
%
Currency impact
14.2
94.4
*
-
-
*
Consolidated reported GAAP net sales
$
3,571.6
$
3,266.7
9
%
$
3,571.6
$
3,266.7
9
%
Operating Income (loss)
Global Industrial
$
215.6
$
179.9
20
%
$
217.7
$
191.1
14
%
Global Institutional & Specialty
125.7
108.6
16
%
125.9
110.9
14
%
Global Healthcare & Life Sciences
35.0
41.9
(16
)
%
35.2
44.3
(21
)%
Other
50.1
37.1
35
%
50.2
37.9
32
%
Corporate
(77.4
)
(129.0
)
*
(77.4
)
(129.7
)
*
Subtotal at fixed currency rates
349.0
238.5
46
%
351.6
254.5
38
%
Currency impact
2.6
16.0
*
-
-
*
Consolidated reported GAAP operating
income
$
351.6
$
254.5
38
%
$
351.6
$
254.5
38
%
* Not meaningful.
As shown in the “Fixed Currency Rates” tables above, we evaluate
the performance of our international operations based on fixed
currency exchange rates, which eliminate the impact of exchange
rate fluctuations on our international operations. Amounts shown in
the “Public Currency Rates” tables above reflect amounts translated
at actual public average rates of exchange prevailing during the
corresponding period and are provided for informational purposes.
The difference between the fixed currency exchange rates and the
public currency exchange rates is reported as “Currency impact” in
the “Fixed Currency Rates” tables above.
The Corporate segment includes amortization from the Nalco and
Purolite transactions intangible assets. The Corporate segment also
includes special (gains) and charges reported on the Consolidated
Statement of Income.
ECOLAB INC.
CONSOLIDATED BALANCE
SHEETS
(unaudited)
March 31
December
March 31
(millions)
2023
2022
2022
Assets
Current assets
Cash and cash equivalents
$
419.4
$
598.6
$
99.4
Accounts receivable, net
2,667.8
2,698.1
2,508.2
Inventories
1,727.3
1,792.8
1,589.9
Other current assets
458.3
404.7
407.0
Total current assets
5,272.8
5,494.2
4,604.5
Property, plant and equipment, net
3,312.7
3,293.4
3,285.7
Goodwill
8,062.2
8,012.7
8,081.0
Other intangible assets, net
3,616.8
3,680.7
4,138.3
Operating lease assets
430.6
448.2
385.8
Other assets
556.4
535.1
571.9
Total assets
$
21,251.5
$
21,464.3
$
21,067.2
Liabilities and Equity
Current liabilities
Short-term debt
$
1,118.1
$
505.1
$
493.1
Accounts payable
1,469.9
1,728.2
1,423.9
Compensation and benefits
450.2
493.6
469.6
Income taxes
171.6
197.6
108.6
Other current liabilities
1,279.8
1,285.9
1,136.1
Total current liabilities
4,489.6
4,210.4
3,631.3
Long-term debt
7,521.7
8,075.3
8,267.2
Pension and postretirement benefits
665.5
670.3
874.5
Deferred income taxes
496.1
505.6
619.2
Operating lease liabilities
323.4
337.8
275.2
Other liabilities
390.2
406.3
294.7
Total liabilities
13,886.5
14,205.7
13,962.1
Equity
Common stock
365.0
364.7
364.5
Additional paid-in capital
6,626.5
6,580.2
6,501.5
Retained earnings
9,401.3
9,318.8
8,840.4
Accumulated other comprehensive loss
(1,737.2
)
(1,726.6
)
(1,563.6
)
Treasury stock
(7,311.4
)
(7,301.0
)
(7,061.2
)
Total Ecolab shareholders’ equity
7,344.2
7,236.1
7,081.6
Noncontrolling interest
20.8
22.5
23.5
Total equity
7,365.0
7,258.6
7,105.1
Total liabilities and equity
$
21,251.5
$
21,464.3
$
21,067.2
ECOLAB INC.
SUPPLEMENTAL NON-GAAP
RECONCILIATIONS
(unaudited)
First Quarter Ended
March 31
(millions, except percent and per
share)
2023
2022
Net sales
Reported GAAP net sales
$
3,571.6
$
3,266.7
Effect of foreign currency translation
(14.2
)
(94.4
)
Non-GAAP fixed currency sales
3,557.4
3,172.3
Effect of acquisitions and
divestitures
(23.6
)
(34.6
)
Non-GAAP organic sales
$
3,533.8
$
3,137.7
Cost of sales
Reported GAAP cost of sales
$
2,205.2
$
2,073.4
Special (gains) and charges
3.2
52.9
Non-GAAP adjusted cost of sales
$
2,202.0
$
2,020.5
Gross profit
Reported GAAP gross profit
$
1,366.4
$
1,193.3
Special (gains) and charges
3.2
52.9
Non-GAAP adjusted gross profit
$
1,369.6
$
1,246.2
Gross margin
Reported GAAP gross margin
38.3
%
36.5
%
Non-GAAP adjusted gross margin
38.3
%
38.1
%
Operating income
Reported GAAP operating income
$
351.6
$
254.5
Effect of foreign currency translation
(2.6
)
(16.0
)
Non-GAAP fixed currency operating
income
349.0
238.5
Special (gains) and charges at fixed
currency rates
27.6
77.0
Non-GAAP adjusted fixed currency operating
income
376.6
315.5
Effect of acquisitions and
divestitures
(0.5
)
-
Non-GAAP organic operating income
$
376.1
$
315.5
Operating income margin
Reported GAAP operating income margin
9.8
%
7.8
%
Non-GAAP adjusted fixed currency operating
income margin
10.6
%
9.9
%
Non-GAAP organic operating income
margin
10.6
%
10.1
%
ECOLAB INC.
SUPPLEMENTAL NON-GAAP
RECONCILIATIONS
(unaudited)
First Quarter Ended
March 31
(millions, except percent and per
share)
2023
2022
Net Income attributable to Ecolab
Reported GAAP net income attributable to
Ecolab
$
233.4
$
171.9
Special (gains) and charges, after tax
21.1
63.6
Discrete tax net expense (benefit)
(4.0
)
1.0
Non-GAAP adjusted net income attributable
to Ecolab
$
250.5
$
236.5
Diluted EPS attributable to Ecolab
Reported GAAP diluted EPS
$
0.82
$
0.60
Special (gains) and charges, after tax
0.07
0.22
Discrete tax net expense (benefit)
(0.01
)
-
Non-GAAP adjusted diluted EPS
$
0.88
$
0.82
Provision for Income Taxes
Reported GAAP tax rate
18.0
%
20.7
%
Special gains and charges
0.5
(0.9
)
Discrete tax items
1.3
(0.3
)
Non-GAAP adjusted tax rate
19.8
%
19.5
%
ECOLAB INC.
SUPPLEMENTAL NON-GAAP
RECONCILIATIONS
(unaudited)
First Quarter Ended March 31
2023
2022
(millions)
Fixed Currency
Impact of Acquisitions and
Divestitures
Organic
Fixed Currency
Impact of Acquisitions and
Divestitures
Organic
Net Sales
Global Industrial
$
1,699.3
$
-
$
1,699.3
$
1,511.4
$
-
$
1,511.4
Global Institutional & Specialty
1,126.6
-
1,126.6
991.3
-
991.3
Global Healthcare & Life Sciences
378.6
-
378.6
348.2
-
348.2
Other
329.3
-
329.3
286.8
-
286.8
Corporate
23.6
(23.6
)
-
34.6
(34.6
)
-
Subtotal at fixed currency rates
3,557.4
(23.6
)
3,533.8
3,172.3
(34.6
)
3,137.7
Currency impact
14.2
94.4
Consolidated reported GAAP net sales
$
3,571.6
$
3,266.7
Operating Income (loss)
Global Industrial
$
215.6
$
-
$
215.6
$
179.9
$
-
$
179.9
Global Institutional & Specialty
125.7
-
125.7
108.6
-
108.6
Global Healthcare & Life Sciences
35.0
-
35.0
41.9
-
41.9
Other
50.1
-
50.1
37.1
-
37.1
Corporate
(49.8
)
(0.5
)
(50.3
)
(52.0
)
-
(52.0
)
Subtotal at fixed currency rates
376.6
(0.5
)
376.1
315.5
-
315.5
Special (gains) and charges at fixed
currency rates
27.6
77.0
Reported OI at fixed currency rates
349.0
238.5
Currency impact
2.6
16.0
Consolidated reported GAAP operating
income
$
351.6
$
254.5
ECOLAB INC.
SUPPLEMENTAL DILUTED EARNINGS
PER SHARE INFORMATION
(unaudited)
The table below provides a reconciliation
of diluted earnings per share, as reported, to the non-GAAP measure
of adjusted diluted earnings per share.
First
Second
Six
Third
Nine
Fourth
Quarter
Quarter
Months
Quarter
Months
Quarter
Year
Ended
Ended
Ended
Ended
Ended
Ended
Ended
Mar. 31
June 30
June 30
Sept. 30
Sept. 30
Dec. 31
Dec. 31
2022
2022
2022
2022
2022
2022
2022
Diluted earnings per share, as reported
(U.S. GAAP)
$
0.60
$
1.08
$
1.67
$
1.21
$
2.88
$
0.93
$
3.81
Adjustments:
Special (gains) and charges (1)
0.22
0.01
0.23
0.14
0.37
0.35
0.72
Discrete tax expense (benefits) (2)
0.00
0.01
0.02
(0.05
)
(0.03
)
(0.01
)
(0.04
)
Adjusted diluted earnings per share
(Non-GAAP)
$
0.82
$
1.10
$
1.92
$
1.30
$
3.22
$
1.27
$
4.49
First
Second
Six
Third
Nine
Fourth
Quarter
Quarter
Months
Quarter
Months
Quarter
Year
Ended
Ended
Ended
Ended
Ended
Ended
Ended
Mar. 31
June 30
June 30
Sept. 30
Sept. 30
Dec. 31
Dec. 31
2023
2023
2023
2023
2023
2023
2023
Diluted earnings per share, as reported
(U.S. GAAP)
$
0.82
Adjustments:
Special (gains) and charges (3)
0.07
Discrete tax expense (benefits) (4)
(0.01
)
Adjusted diluted earnings per share
(Non-GAAP)
$
0.88
$
0.00
$
0.00
$
0.00
$
0.00
$
0.00
$
0.00
Per share amounts do not necessarily sum
due to changes in shares outstanding and rounding.
(1) Special (gains) and charges for
2022 includes charges of $63.6 million, $2.6 million, $39.6 million
and $101.5 million, net of tax, in the first, second, third and
fourth quarters, respectively. Charges were primarily related to
acquisition and integration charges, reserves related to our
operations in Russia, COVID-19 related inventory write downs and
employee-related costs, restructuring charges, litigation and other
charges and pension settlements.
(2) Discrete tax expenses (benefits)
for 2022 includes $1.0 million, $3.7 million, ($14.2) million and
($2.3) million in the first, second, third and fourth quarters,
respectively. These expenses (benefits) are primarily associated
with stock compensation excess tax benefits and other discrete tax
benefits.
(3) Special (gains) and charges for 2023
includes charges of $27.7 million, net of tax, in the first
quarters. Charges were primarily related to restructuring charges,
acquisition and integration charges and litigation and other
charges.
(4) Discrete tax (benefits) for 2023
includes ($4.0) million in the first quarter. These expenses
(benefits) are primarily associated with stock compensation excess
tax benefits and other discrete tax benefits.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230501005759/en/
Investor Contact: Andrew Hedberg
(651) 250-2185 Cairn Clark (651) 250-2291
Media Contact: Nigel Glennie (651)
250-2576
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