Ecolab Q2 2024 Earnings Report
Key Takeaways
Ecolab reported a 3% increase in sales to $4.0 billion, with organic sales up 4%. The company's adjusted EPS grew by 35% to $1.68, driven by strong operating income margin expansion. Ecolab also raised its full-year adjusted EPS outlook to $6.50 - $6.70.
Reported sales reached $4.0 billion, a 3% increase year-over-year, with a 1% headwind from unfavorable foreign currency exchange.
Organic sales grew by 4%, with the Institutional & Specialty segment normalizing to a strong 7% growth.
Reported operating income margin was 16.5%, while organic operating income margin expanded by 360 bps to 17.0%.
Adjusted diluted EPS increased by 35% to $1.68, excluding special gains, charges, and discrete tax items.
Ecolab
Ecolab
Ecolab Revenue by Segment
Forward Guidance
Ecolab anticipates full-year 2024 adjusted diluted earnings per share to be in the range of $6.50 to $6.70, reflecting a 25% to 29% increase compared to 2023.
Positive Outlook
- Continued solid sales growth, driven by value pricing and new business gains.
- Attractive organic operating income margin expansion, driven by robust increases in gross margin.
- Good underlying productivity.
- Quarterly adjusted diluted earnings per share growth to progressively normalize towards the company’s long-term 12-15% target as solid growth continues.
- Impacts from delivered product costs are anticipated to normalize exiting 2024.
Challenges Ahead
- Unfavorable impact in the second half of 2024 from the sale of Ecolab’s global surgical solutions business, estimated to be $0.08 per share.
- Soft but stable macroeconomic demand.
- Favorability from delivered product costs that eases through the third quarter of 2024.
- Impact of global inflation remains hard to predict.
- 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.
Revenue & Expenses
Visualization of income flow from segment revenue to net income