Sales Surge at Ecolab

Thanks to the acquisition of Nalco, Ecolab reported fourth quarter sales jumped 65% to $3 billion and net income surged 161% to $231.4 million. Results were led by strong growth in its global energy, Latin America and worldwide Kay business.


On the year, sales rose 74% to $11.8 billion and net income rose 51% to $701 million.


Douglas M. Baker, Jr., Ecolab’s chairman and chief executive officer said, fourth quarter results were strong as Ecolab performed very well in 2012’s challenging environment, driving strong sales growth in otherwise mixed end markets and economies.


“We continued to leverage our innovative products and industry-leading customer service to drive new business and increase our solutions within our current account base,” he said. “The fourth quarter segment earnings also benefited from comparison to a softer period last year for the Water, Paper and Energy Services businesses, when profits were impacted by a sharp run-up in raw material costs in that period.”


Baker said Ecolab continues to perform well despite difficult end-use markets. The company’s new business and customer retention metrics continue to trend well in all major businesses.


“We continue to build competitive advantage in both field service capabilities and technology solutions,” he said. “As a result, even though we do not expect a material improvement in the global macroeconomic environment, we remain bullish regarding our 2013 prospects.”


Baker said the company’s formula for 2013 is familiar: utilize its competitive advantages to drive growth to overcome sluggish economies and cost headwinds.


“We expect modest raw material inflation early in the year which we believe will abate,” he said in a statement. “We also expect another year of higher pension costs due to the extremely low interest rate environment. However, and more importantly, we see significant new business opportunities and further cost efficiency and synergy improvements.”


Baker said 2013 will deliver another year of double-digit adjusted earnings growth for Ecolab, and the company expects solid double-digit adjusted earnings gains in the first quarter as well, as it overcomes a difficult comparison and raw material and outsized pension cost impacts, with continued double-digit growth over the remainder of the year.


“We have excellent market positions and customer relationships, as well as the innovative technology and sales and service teams to serve them as we believe no one else can. We are confident this will be another year of superior growth for our company.”