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Mar 31, 2024
Ecolab Q1 2024 Earnings Report
Ecolab delivered a very strong first quarter performance, with adjusted diluted EPS up 52% and increased 2024 adjusted diluted EPS outlook.
Key Takeaways
Ecolab reported strong first quarter results, with sales of $3.8 billion and adjusted diluted EPS of $1.34, a 52% increase year-over-year. The company raised its full-year adjusted diluted EPS outlook to $6.40 - $6.70.
Reported sales $3.8 billion, +5% versus last year; organic sales +5%, led by strong growth in the Institutional & Specialty and Pest Elimination segments, and modest Industrial segment growth.
Reported operating income margin 13.8%. Organic operating income margin 14.7%, +400 bps as lower delivered product costs, value-based pricing, and volume growth more than offset growth-oriented investments in the business.
Reported diluted EPS $1.43, +74%. Adjusted diluted EPS, excluding special gains and charges and discrete tax items were $1.34, +52%.
First quarter cash flow from operating activities $649 million; free cash flow increased to $448 million, +$423 million versus last year.
Ecolab
Ecolab
Ecolab Revenue by Segment
Revenue by Segment
Global Water Revenue
CapyFin.comInstitutional & Specialty Revenue
CapyFin.comPest Elimination Revenue
CapyFin.comLife Sciences Revenue
CapyFin.com Forward Guidance
Ecolab expects full year 2024 adjusted diluted earnings per share in the $6.40 - $6.70 range, rising 23% to 29% compared with adjusted diluted earnings per share of $5.21 in 2023. Expect second quarter 2024 adjusted diluted earnings per share in the $1.62 to $1.72 range, rising 31% to 39% compared with adjusted diluted earnings per share of $1.24 a year ago.
Positive Outlook
- Sales growth, driven by continued value-based pricing and new business gains.
- Attractive organic operating income margin expansion, driven by robust increases in gross margin.
- Good underlying productivity is expected to be offset in the short-term by growth-oriented investments in the business to fuel Ecolab’s long-term performance.
- Second quarter SG&A expense is anticipated to increase by a couple of percentage points sequentially and stabilize at that level in the second half of the year.
- Quarterly adjusted diluted earnings per share growth in the second half of 2024 is expected to progressively normalize towards the upper-end of Ecolab’s long-term 12-15% target as favorability from lower delivered product costs eases.
Challenges Ahead
- This forecast assumes soft but stable macroeconomic demand and favorability from delivered product costs that eases through the third quarter of 2024, though the impact of global inflation remains hard to predict.
- Quantifiable special charges in 2024 to be approximately $0.15 per share, principally related to restructuring charges.
- Second quarter 2024 to be approximately $0.02 per share, principally related to restructuring charges.
- Unpredictable macroeconomic conditions
- Impact of global inflation remains hard to predict.
Revenue & Expenses
Visualization of income flow from segment revenue to net income