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Jun 30, 2022
Ecolab Q2 2022 Earnings Report
Ecolab's second quarter earnings reflected double-digit sales growth, driven by strong performance in Institutional & Specialty, Industrial and Other segments, with accelerating pricing offset by inflation and unfavorable currency translation.
Key Takeaways
Ecolab reported a 13% increase in sales to $3.6 billion, with fixed currency sales up 17%. Adjusted diluted EPS was $1.10, a 10% decrease year-over-year, impacted by currency translation and Purolite amortization. The company expects improved performance in the second half of 2022.
Very strong second quarter sales growth, driven by accelerating total pricing and good volume leverage were more than offset by continued substantial delivered product cost inflation, investments in the business, and unfavorable currency translation.
Reported sales $3.6 billion, +13% versus last year. Fixed currency sales +17%.
Acquisition adjusted fixed currency sales +13%, led by double-digit growth in Institutional & Specialty, Industrial and Other segment sales.
Total pricing accelerated to +9%, driven by higher structural pricing and the implementation of the energy surcharge, which together exceeded delivered product cost inflation in the last month of the quarter, helping to sequentially stabilize gross margin.
Ecolab
Ecolab
Ecolab Revenue by Segment
Revenue by Segment
Institutional & Specialty Revenue
CapyFin.comPest Elimination Revenue
CapyFin.com Forward Guidance
Ecolab anticipates continued growth, higher inflation, and challenging currency translation impacts. With the global energy surcharge mechanism implemented, total pricing is expected to accelerate further to keep the company ahead of inflation. The company expects overall performance to improve sequentially in the second half.
Positive Outlook
- Total pricing is expected to accelerate further to keep us ahead of inflation, resulting in easing year-over-year margin pressure going forward.
- Our primary focus will now shift to new business development to support our strong topline momentum.
- Total pricing expected to accelerate even further, reaching the low double-digit level in the second half
- Further new business wins
- Breakthrough innovation and continued productivity benefits
Challenges Ahead
- Economic environment remains complex and unpredictable
- Inflation will remain higher for longer
- Currency translation impacts become more challenging.
- Full year earnings will be impacted by increasing currency translation headwinds, now estimated to be $0.30 per share unfavorable for the full year
- Potentially softer volume growth as our team shifts their focus to new business.
Revenue & Expenses
Visualization of income flow from segment revenue to net income