Ecolab’s 2Q Sales Rise 12%

Ecolab’s reported sales rose 12% to $1.7 billion in the second quarter of 2011; when measured in fixed currencies, sales rose 8%. Adjusted for currency and acquisitions, sales rose 5%. Reported net income attributable to shareholders declined 3% to $126 million.

Second quarter 2011 sales for Ecolab’s U.S. Cleaning & Sanitizing operations rose 9% to $752 million. Adjusted for acquisitions, sales increased 6%. Food & Beverage, Kay and Institutional led the growth. Ecolab’s U.S. Cleaning & Sanitizing operating income increased 3% to $143 million. Adjusted for acquisitions, U.S. Cleaning & Sanitizing operating income decreased 4%, primarily reflecting the impact of higher delivered product costs which we believe peaked in North America in the second quarter.

U.S. Other Services sales increased 1% to $116 million in the second quarter. Operating income declined 15% to $16 million as higher service delivery costs more than offset sales gains and cost savings actions.

Sales for Ecolab’s International operations, when measured at fixed currency rates, grew 7% to $781 million in the second quarter. Adjusted for acquisitions and divestitures, fixed currency sales increased 5%. Fixed currency operating income increased 26% to $71 million in the second quarter as margins expanded in Ecolab’s International regions, led by EMEA. When measured at public currency rates, International sales increased 16% and operating income rose 40%.

“We had a very good second quarter. Our organic sales continued to accelerate, our recent acquisitions are all ahead of their plans, and our innovation and pricing plans also continued to gain traction,” said Douglas M. Baker, Jr., Ecolab’s chairman, president and CEO. “This enabled us to offset significant raw material inflation, which peaked for us during this quarter in North America and in total, while Europe will see raw material costs peak in the third quarter before abating on a year-on-year basis. Our work to transform Europe into a higher growth, more efficient and more profitable region is also going well. In spite of much higher than anticipated raw material costs, we remain on target to deliver significant improvement in our operating margin this year as our program to transform Europe operations is delivering ahead of schedule.”