NYSE$ECL

Ecolab Inc · Q2 2022 earnings

Q2 2022 earnings · · Investor relations

Briefing

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.

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.

Headline financials

Total Revenue

$3.58B

Previous: $3.16B+13.2%
EPS (adj)

$1.10

Previous: $1.22-9.8%
Reported GAAP operating income margin

11.9%

No prior period
Capital Expenditures

-$318M

Previous: -$246M-29.3%
Free Cash Flow

-$9.2M

Previous: $68M-113.5%
Net Income

$308M

Previous: $314M-1.7%
Operating Income

$426M

Previous: $448M-4.9%
Gross Profit

$1.37B

Previous: $1.32B+3.9%
Cash & Equivalents

$125M

Previous: $1.4B-91.1%
Total Assets

$21.2B

Previous: $18.5B+14.2%
Stock-Based Comp

$24.6M

Previous: $27.6M-10.9%

Revenue & EPS history

Ecolab · Revenue · Quarterly

$3.58B

Q2 2022+13.2%vs Q2 2021
Beat estimate in 11 of 16 quarters(69%)
ActualEstimate

Revenue by segment

Ecolab · $1.47B total across 2 segments · Q2 2022

  • Global Institutional & Specialty
    $1.13B+15.5%
  • Global Pest Elimination
    $339M+10.9%

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.

Tailwinds

  • 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

Headwinds

  • 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.

Historical earnings impact

How earnings announcements have historically affected this stock's price.

Avg. return before/after earnings

Based on 20 quarterly earnings reports · overlaid with Q2 2022

Historical avgQ2 2022

+0.1%

Avg return

Earnings day

-0.0%

Avg return

5 days after

+1.3%

Avg return

30 days after

58%

42 / 73 earnings

Positive

+10.9%

Q4 2022

Best reaction

-12.6%

Q3 2022

Worst reaction

Earnings price reactions
QuarterReport dateReaction (Day 0)+5 days+30 days
Q1 2026+0.8%-3.1%-3.1%
Q4 2025+4.0%+3.8%-4.3%
Q3 2025-4.1%-8.3%-1.7%
Q2 2025+0.4%+2.9%+1.8%
Q1 2025+3.3%+6.8%+10.6%
Q4 2024+6.2%+7.6%+2.1%
Q3 2024-1.5%-4.6%-3.4%
Q2 2024-6.9%-4.3%+0.9%
Q1 2024+1.5%+2.6%+3.2%
Q4 2023+6.9%+1.7%-1.4%
Q3 2023+5.1%+9.8%+20.5%
Q2 2023+1.0%-0.3%+0.4%
Q1 2023+2.7%+2.9%+0.2%
Q4 2022+10.9%+9.8%+7.4%
Q3 2022-12.6%-14.2%-3.3%
Q2 2022-1.3%+1.5%+5.0%
Q1 2022-2.9%-3.6%-6.5%
Q4 2021-0.1%-2.3%-6.1%
Q3 2021-0.2%+0.3%+4.4%
Q2 2021-0.0%+0.8%+1.8%
Q1 2021-2.1%-1.2%-4.7%
Q4 2020-5.0%-5.4%-4.7%
Q3 2020-6.5%-7.4%+10.0%
Q2 2020-8.1%-11.8%-6.8%
Q1 2020+5.4%+1.3%+12.7%
Q4 2019+1.4%+0.1%-23.0%
Q3 2019+1.1%-0.3%-2.4%
Q2 2019+0.6%-0.3%+3.2%
Q1 2019-1.1%+0.3%-0.6%
Q4 2018+1.1%+2.2%+7.5%
Q3 2018+4.5%+5.5%+8.1%
Q2 2018+2.8%+4.5%+6.7%
Q1 2018-0.4%+0.4%-1.5%
Q4 2017-1.2%-0.5%+2.0%
Q3 2017+0.3%+0.4%+3.8%
Q2 2017+0.9%+0.9%+1.2%
Q1 2017-2.8%-2.2%+3.5%
Q4 2016-0.7%+1.3%+0.2%
Q3 2016-1.9%-3.1%+3.8%
Q2 2016+2.3%+3.4%+3.7%
Q1 2016+0.9%
Q4 2015-5.5%
Q3 2015-0.3%
Q2 2015+6.4%
Q1 2015-1.4%
Q4 2014+3.8%
Q3 2014-2.2%
Q2 2014-1.5%
Q1 2014-0.9%
Q4 2013+0.5%
Q3 2013+3.0%
Q2 2013+0.0%
Q1 2013+1.2%
Q4 2012+6.2%
Q3 2012+0.1%
Q2 2012-3.6%
Q1 2012+1.0%
Q4 2011-4.2%
Q3 2011-4.6%
Q2 2011-3.5%
Q1 2011+2.5%
Q4 2010+2.4%
Q3 2010+0.3%
Q2 2010-0.7%
Q1 2009-1.7%
Q1 2010+1.2%
Q4 2007+0.5%
Q4 2009+0.5%
Q3 2009+2.2%
Q3 2008+2.2%
Q2 2009+0.0%
Q2 2008+0.0%
Q4 2008+0.0%

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