Top Companies Report

7. Ecolab

July 11, 2011

St. Paul, MN

651.293.2233

www.ecolab.com

Sales: $5.7 billion


Sales:

$5.7 billion for cleaning and sanitizing products and services. Corporate sales: $6.1 billion. Net income: $530 million.


Key Personnel:

Douglas M. Baker Jr., chairman, president and chief executive officer; Steven L. Fritze, chief financial officer; Thomas W. Handley, president, global food & beverage and APLA sectors; Phillip J. Mason, president, EMEA sector; James A. Miller, president, global services and specialty sectors; Susan K. Nestegard, president, global healthcare sector; James H. White, president, international sector; Christophe Beck, executive vice president, institutional North America; Larry L. Berger, chief technical officer and senior vice president; John J. Corkrean, principal accounting officer, vice president and corporate controller.


Major Products:

Institutional—warewashing, laundry, housekeeping, water filtration and conditioning and pool and spa management products; Food and beverage—cleaning and sanitizing products, equipment, systems and services; Pest elimination—commercial elimination and prevention services and grease elimination programs; Kay—cleaning and sanitizing products and services for restaurant and food industries; Professional—floor care, carpet care and personal care products for the commercial, industrial and health care markets.


New Products:

DryExx conveyor lubricant, Virasept hard surface disinfectant, Rain-X for Wheels.


Comments:

Corporate sales rose 3% and net income improved 7%. US cleaning and sanitizing sales rose 2% to more than $2.7 billion. Institutional, which accounted for 54% of sales, reported a 1% sales gain. Segment results were mixed as demand in lodging improved while foot traffic in food service continued to decline.


Sales within the food and beverage division rose 3% and accounted for 20% of US sales. Ecolab said sales increased in almost all end markets. However, sales were soft in meat and poultry.


Kay accounted for 12% of US sales and recorded a 7% gain. Growth was led by new food retail accounts. Healthcare sales rose just 2%, as gains in the sales of infection barriers and surgical instrument cleaning products more than offset the spike in demand due to H1N1 virus preparations and slowing healthcare market trends in the current year. Accounting for the rest of US cleaning and sanitizing results were textile care (3%), vehicle care (2%) and specialty markets (1%).


International sales rose 3% to more than $3 billion. The Europe, Middle East and Africa (EMEA) region accounted for 63% of sales, followed by Asia/Pacific, 20%; Latin America, 9% and Canada, 8%. EMEA sales rose just 1%, as gains in the UK and Turkey were offset by lower sales in Italy and France. Food and beverage and pest elimination gains were offset by flat healthcare sales and declining textile sales.


Sales in Asia Pacific rose 8%, led by China, Australia and New Zealand. Institutional sales rose on higher hotel occupancy rates and better food and beverage sales.


Latin American sales rose 8% due to strong growth in Brazil, Mexico and Venezuela. Institutional, food and beverage and pest elimination divisions all reported sales gains.


Sales in Canada were up 4% on gains made in food and beverage and institutional, partially offset by lower health care sales.


Moves and More

In September, Ecolab purchased the commercial laundry division of Dober Chemical, which had sales of $37 million. Ecolab said the move strengthens its North American commercial laundry business.


Outside the US, in December, Ecolab purchased the Cleantec business of Campbell Brothers Ltd., Brisbane, Queensland, Australia. Cleantec had annual sales of $55 million and improves the company’s position in Australia, as well as in food and beverage processing, foodservice, hospitality and textile care.


Acquisitions aside and looking further ahead, several megatrends appear to be in Ecolab’s favor. For instance, a growing global population will require an increasingly complex supply chain, putting added pressure on every link to assure food safety. Similarly, the emergence of countries such as China and Brazil is opening up new opportunities for restaurants and food service facilities.


Ecolab notes that an aging population is driving demand in both hospitality and health care segments, which should increase sales of infection control products and services.


Good growth in Asia, Latin America and the US, helped Ecolab’s first quarter 2011 sales rise 6% to $1.5 billion.

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