10-KPeriod: FY2017

ECOLAB INC. Annual Report, Year Ended Dec 31, 2017

Filed February 23, 2018For Securities:ECL

Summary

Ecolab Inc. reported a solid financial performance for the fiscal year ending December 30, 2017, with a 5% increase in reported sales to $13.8 billion, driven by volume, pricing, and strategic acquisitions. The company successfully integrated the acquisition of Laboratoires Anios and divested its Equipment Care division, demonstrating active portfolio management. Ecolab maintained its leadership in water, hygiene, and energy technologies and services, serving diverse global markets including industrial, institutional, and energy sectors. The company highlighted strong cash flow generation from operations, enabling continued investment in business growth, debt reduction, and shareholder returns through dividends and share repurchases. Ecolab's commitment to financial strength was evident in its investment-grade credit ratings and efforts to achieve 'A' range ratings metrics. While facing mixed market conditions, Ecolab demonstrated resilience, supported by its diverse business segments and global presence.

Financial Highlights

56 data points
Beta

Revenue

$13.84B

41.7% Gross Margin

Net Income

$1.50B

10.9% Net Margin

EPS (Diluted)

$5.12

Total Assets

$19.96B

Cash & Equivalents

$211.40M

Free Cash Flow

$1.22B

Financial Statements
Beta
Revenue$13.84B
Cost of Revenue$8.06B
Gross Profit$5.77B
R&D Expenses$201.00M
SG&A Expenses$3.83B
Operating Income$1.95B
Interest Expense$274.60M
Net Income$1.50B
EPS (Basic)$5.20
EPS (Diluted)$5.12
Shares Outstanding (Basic)289.60M
Shares Outstanding (Diluted)294.00M

Key Highlights

  • 1Reported sales increased by 5% to $13.8 billion in 2017, with fixed currency sales also increasing by 5%.
  • 2The company completed the acquisition of Laboratoires Anios and divested its Equipment Care division.
  • 3Operating income increased by 5% to $2.0 billion, with adjusted operating income showing a 2% increase.
  • 4Diluted EPS increased significantly by 24% to $5.13, reflecting strong operational performance and benefits from lower interest and taxes.
  • 5Cash flow from operating activities was robust at $2.1 billion, supporting business investments and shareholder returns.
  • 6Ecolab continued its consistent dividend payment history, increasing the quarterly cash dividend by 11% and marking its 81st consecutive year of dividend payments.
  • 7The company maintained investment-grade credit ratings and is focused on achieving 'A' range metrics.

Frequently Asked Questions

Ecolab's reported sales increased by 5% to $13.8 billion in 2017. The primary drivers for this growth were an increase in sales volume, positive price changes, and contributions from strategic acquisitions, notably Laboratoires Anios.

In 2017, Ecolab actively managed its business portfolio by completing the acquisition of Laboratoires Anios, a European hygiene and disinfection products company, and by divesting its Equipment Care division. These strategic moves indicate a focus on optimizing its business mix and strengthening its core offerings.

As of December 31, 2017, Ecolab maintained a strong financial position with total assets of $20.0 billion and total liabilities of $12.3 billion. The company generated $2.1 billion in cash flow from operating activities, demonstrating its ability to fund operations, investments, debt repayment, and shareholder returns. Ecolab also highlighted its commitment to an investment-grade balance sheet, supported by its credit ratings.

The Tax Cuts and Jobs Act significantly impacted Ecolab's financial results. The company recorded a provisional net discrete tax benefit of $160.9 million in 2017, which included a tax benefit for recognizing deferred tax assets and liabilities at the new, lower U.S. enacted tax rate, partially offset by the expense of a one-time transition tax on unremitted foreign earnings. This led to a substantial reduction in the company's reported tax rate for the year.