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>>> Ecolab Expects Strong 4Q 2021 Sales Growth but Lower Than Expected EPS Growth Due to COVID & Supply Chain Disruptions; Expects Low-Teens Adjusted EPS Growth in Full-Year 2022


Business Wire

January 20, 2022


https://finance.yahoo.com/news/ecolab-expects-strong-4q-2021-213000274.html


ST. PAUL, Minn., January 20, 2022--(BUSINESS WIRE)--Ecolab said that it expects reported sales to increase 10% versus last year and acquisition adjusted fixed currency sales growth to accelerate to 9% in its fourth quarter 2021, led by double-digit increases in the Institutional & Specialty and Other segments, with further strong gains in the Industrial segment. However, fourth quarter adjusted diluted earnings per share growth (excluding Purolite impact) is expected to be below the previously announced double-digit growth outlook as temporary COVID related effects on broad business activity impacted the speed of the market recovery in the fourth quarter. Ecolab also absorbed significant short-term cost increases to assure seamless customer supply in a very tight environment that impacted margins in the short-term.

These incremental supply headwinds, alone estimated to be an unfavorable $0.10 per share, are expected to result in fourth quarter reported earnings per share from continuing operations in a $1.03 to $1.05 range and adjusted diluted earnings per share from continuing operations (excluding Purolite impact) in a $1.26 to $1.28 range, showing modest year over year growth. For the full year 2021, this would yield 16% to 17% adjusted diluted earnings per share growth, including an estimated $1.00 per share of substantial delivered product cost inflation and other supply chain impacts. Assuming the rate of cost inflation and COVID impacts ease over the next couple of quarters, Ecolab expects continued strong sales and pricing momentum in 2022 and looks for full-year 2022 adjusted diluted earnings per share growth to rise in the low-teens.

Fourth quarter and full year 2021 results remain subject to our normal year-end accounting and financial reporting procedures. Ecolab expects to report fourth quarter 2021 results February 15, 2022.

Christophe Beck, Ecolab’s president and chief executive officer, said, "In this very challenging environment, we remain encouraged by the exceptional work of our teams, which led to the strong sales results, new business wins and accelerating pricing nearing 4% as we exited the quarter, all of which improved further from the third quarter and underscore the success of our long-term value proposition. The raw material supply and customer logistics issues remain significant, which is why we have focused our efforts on protecting our current customers and on serving earlier business wins, with extraordinary actions that came at a substantial short-term cost. This was the outcome of a strategic decision made in 2020 to protect our current customers while investing further in accelerating share gains to emerge even stronger as market disruptions ease.

"We enter 2022 not with the environment we expected, but with the underlying momentum we wanted to have. With a continued, but uneven, global economic recovery, we expect further strong sales trends, robust new business wins, new innovation and increased pricing to capture the incremental value we create for our customers and to compensate for the much higher supply costs we expect in 2022. At the same time, we will continue to leverage digital automation to drive performance in ways that improve both customer experience and cost efficiency. While we expect the challenges that affected us and the rest of the world in the fourth quarter to continue into the first quarter of 2022, assuming the rate of cost inflation and COVID impacts ease over the next couple of quarters, we believe our continued actions should help us deliver improved results as the year goes on and deliver strong full year 2022 sales growth with adjusted diluted earnings per share growth reaching low-teens levels.

"With our unique value proposition to help solve the world’s people and planet health challenges while improving business health, we remain confident in our longer-term outlook and we expect to continue to leverage our growth opportunities to drive superior results for our customers and shareholders."

About Ecolab

A trusted partner at nearly three million commercial customer locations, Ecolab (ECL) is the global leader in water, hygiene and infection prevention solutions and services. With annual sales of $12 billion and more than 44,000 associates, Ecolab delivers comprehensive solutions, data-driven insights and personalized service to advance food safety, maintain clean and safe environments, optimize water and energy use, and improve operational efficiencies and sustainability for customers in the food, healthcare, hospitality and industrial markets in more than 170 countries around the world. www.ecolab.com

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