Ecolab Posts Strong Results

Ecolab's reported and fixed currency sales rose 2% to a record $2.9 billion in the first quarter of 2013. When adjusted for acquisitions and divestitures, first quarter 2013 fixed currency sales rose 3%.

“The first quarter earnings reached the top end of our forecast range as we delivered excellent earnings growth despite comparison to a strong period last year and challenging market conditions in 2013,” said CEO Douglas M. Baker Jr. “Our team did a good job delivering results, with new account growth, appropriate pricing and significant synergy and cost savings driving the strong double-digit earnings improvement.”

First quarter 2013 reported operating income increased 58% to $262 million. Both reported first quarter 2013 and 2012 results include special gains and charges and discrete tax items. Excluding special gains and charges, first quarter 2013 adjusted operating income of $313 million increased 11% compared with first quarter 2012 adjusted operating income. Excluding special gains and charges and at fixed currency rates, first quarter 2013 adjusted fixed currency operating income of $313 million increased 10% when compared with first quarter 2012 adjusted fixed currency operating income.

First quarter 2013 reported net income attributable to Ecolab increased 221% to $160 million, representing $0.53 per diluted share, and included special gains and charges and discrete tax net benefits.

First quarter 2013 adjusted net income attributable to Ecolab rose 20% to $181 million, and adjusted diluted earnings per share increased 20% to $0.60, when compared with first quarter 2012 adjusted diluted earnings per share of $0.50. Currency translation had no significant effect on reported and adjusted diluted earnings per share in the first quarter of 2013.

First quarter 2013 sales for the Global Industrial segment, when measured at fixed currency rates, rose 1% to $1,141 million led by solid Global Food & Beverage growth which more than offset slight declines in Global Water and Global Paper sales. Fixed currency operating income increased 19% to $117 million compared with the year ago period. When adjusted for acquisitions, first quarter 2013 fixed currency sales were flat and showed similar results by region. Excluding the impact of mining and the deemphasized businesses which declined versus last year, Global Water sales to the heavy and light industries were flat; regionally, North America recorded good sales growth which was more than offset by modest sales declines elsewhere due to a challenging comparison period in last year's first quarter. When measured at public currency rates, Global Industrial sales were $1,146 million and operating income was $118 million.

First quarter 2013 sales for the Global Institutional segment, when measured at fixed currency rates, rose 2% to $975 million, led by double-digit Global Specialty sales growth. Fixed currency operating income increased 9% to $145 million compared with last year. Global Healthcare sales grew modestly and Global Institutional business sales were flat. Sales for the segment showed strong growth in Latin America with good gains in Asia Pacific and North America, which more than offset lower sales in EMEA. When measured at public currency rates, Global Institutional sales were $978 million and operating income was $145 million.

Global Energy segment sales, when measured at fixed currency rates, grew 7% to $579 million in the first quarter 2013 led by growth in the upstream market. Fixed currency operating income decreased 4% to $79 million. Both results reflect the comparison to an unusually strong first quarter 2012, when fixed currency sales rose 29% and operating income rose 53%, as well as ongoing investment in the field sales organization. Full year 2013 sales and operating income are expected to grow at double-digits rates. When measured at public currency rates, Global Energy sales were $580 million and operating income was $79 million.

Other segment sales, when measured at fixed currency rates, declined 5% to $167 million in the first quarter. Fixed currency operating income increased 4% to $21 million. Adjusted for the sale of Vehicle Care in the fourth quarter 2012, first quarter 2013 fixed currency sales increased 5% with good results from both Global Pest Elimination and Equipment Care, and fixed currency operating income increased 12%. When measured at public currency rates, Other segment reported sales were $168 million and reported operating income was $21 million.