01—Abstract
Summary
Summary of the 10-K filed February 26, 2016. Cited figures are marked; the original filing is the authoritative source.
Ecolab Inc. (ECL) reported 2015 results reflecting a 5% decline in sales to $13.5 billiona, primarily due to unfavorable foreign currency exchange rates.
Despite these headwinds and challenges in the energy and emerging markets, the company demonstrated resilience with a 1%b increase in fixed currency sales and a 7% increase in adjusted fixed currency operating income. Strong performance in the Global Institutional, Global Industrial, and Other segments offset weaker results in the Global Energy segment. The company also maintained a commitment to shareholder returns, increasing its quarterly cash dividend by 6% and continuing its share repurchase program.
Financially, Ecolab maintained an investment-grade balance sheet, with net debt to EBITDA at 2.6x. Operating cash flow remained robust at $2.0 billionc, supporting operations, investments, debt repayment, and shareholder returns.
The company also continued to focus on strategic growth through acquisitions, completing three in 2015 to expand its industrial water treatment and hygiene solutions capabilities. A significant event was the deconsolidation of its Venezuelan operations due to economic and currency control challenges, resulting in a $289.3 milliond charge.
02—Key points
Key Highlights
- Ecolab reported 2015 sales of $13.5 billion, a 5% decrease from 2014, largely attributed to foreign currency headwinds.
- Despite sales challenges, fixed currency sales increased by 1%, and adjusted fixed currency operating income grew by 7%, demonstrating underlying business strength.
- The company increased its quarterly cash dividend by 6% to $0.35 per share, marking its 24th consecutive annual dividend rate increase and 79th consecutive year of paying dividends.
- Operating cash flow remained strong at $2.0 billion in 2015, supporting various corporate activities including debt repayment and shareholder returns.
- Ecolab executed three acquisitions in 2015: Jianghai Environmental Protection Co. Ltd (China), Swisher Hygiene Inc. (U.S.), and Ultra Fab Industries Ltd (Canada), aimed at expanding its capabilities.
- The company deconsolidated its Venezuelan subsidiaries due to economic and currency control issues, resulting in a $289.3 million charge for the year.
- Ecolab maintained an investment-grade balance sheet with a Net Debt to EBITDA ratio of 2.6x.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2015, Ecolab Inc. kept $0.07.
- Revenue$13.55B100.0%
- Cost of revenue−$7.22B53.3%
- Gross profit$6.32B46.7%
- Operating costs−$4.76B35.1%
- Operating income$1.56B11.5%
- Interest, other & tax−$559.2M4.1%
- Net income$1.00B7.4%
Where FY2015 revenue went
$13.55B- Cost of revenue: $7.22B, 53% of revenue
- SG&A: $4.35B, 32% of revenue
- Net income: $1.00B, 7.4% of revenue
- R&D: $191.0M, 1.4% of revenue
- Other operating costs: $223.8M, 1.7% of revenue
- Interest, other & tax: $559.2M, 4.1% of revenue
Kept 7.4% as net incomeNet income $1.00B · 7.4%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2015filed February 26, 2016Financial Statements
FY2015 against FY2014
| Line item | FY2015FY2014 | Change |
|---|---|---|
| Revenue | $13.55B$14.28B | −5.1% |
| Cost of Revenue | $7.22B$7.68B | −5.9% |
| Gross Profit | $6.32B$6.60B | −4.2% |
| R&D Expenses | $191.00M$197.00M | −3.0% |
| SG&A Expenses | $4.35B$4.58B | −5.1% |
| Operating Income | $1.56B$1.96B | −20.1% |
| Interest Expense | $253.70M$268.00M | −5.3% |
| Net Income | $1.00B$1.20B | −16.7% |
| EPS (Basic) | $3.38$4.01 | −15.7% |
| EPS (Diluted) | $3.32$3.93 | −15.5% |
| Shares Outstanding (Basic) | 296.40M300.10M | −1.2% |
| Shares Outstanding (Diluted) | 301.40M305.90M | −1.5% |
05—Questions
Frequently Asked Questions
What was Ecolab's overall financial performance in 2015?
In 2015, Ecolab reported sales of $13.5 billion, a 5% decrease from 2014, primarily due to unfavorable foreign currency exchange rates. Despite this, fixed currency sales grew by 1%, and adjusted fixed currency operating income increased by 7%, highlighting operational resilience. The company generated $2.0 billion in operating cash flow.
What significant strategic actions did Ecolab undertake in 2015?
Ecolab completed three key acquisitions in 2015 to bolster its offerings: Jianghai Environmental Protection Co. Ltd (industrial water treatment in China), Swisher Hygiene Inc. (hygiene and sanitizing solutions in the U.S.), and Ultra Fab Industries Ltd (oil and gas equipment in Canada). The company also addressed challenges in Venezuela by deconsolidating its operations, leading to a significant charge but stabilizing reporting.
How did Ecolab manage its balance sheet and shareholder returns?
Ecolab maintained an investment-grade balance sheet with a Net Debt to EBITDA ratio of 2.6x. The company continued its commitment to shareholder returns by increasing its quarterly cash dividend by 6% and actively repurchasing shares under its authorized program, demonstrating confidence in its long-term financial health and prospects.
06—Continue