01—Abstract
Summary
Summary of the 10-K filed February 23, 2018. Cited figures are marked; the original filing is the authoritative source.
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 billiona, 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.
02—Key points
Key Highlights
- Reported sales increased by 5% to $13.8 billion in 2017, with fixed currency sales also increasing by 5%.
- The company completed the acquisition of Laboratoires Anios and divested its Equipment Care division.
- Operating income increased by 5% to $2.0 billion, with adjusted operating income showing a 2% increase.
- Diluted EPS increased significantly by 24% to $5.13, reflecting strong operational performance and benefits from lower interest and taxes.
- Cash flow from operating activities was robust at $2.1 billion, supporting business investments and shareholder returns.
- Ecolab continued its consistent dividend payment history, increasing the quarterly cash dividend by 11% and marking its 81st consecutive year of dividend payments.
- The company maintained investment-grade credit ratings and is focused on achieving 'A' range metrics.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2017, Ecolab Inc. kept $0.11.
- Revenue$13.84B100.0%
- Cost of revenue−$8.06B58.3%
- Gross profit$5.77B41.7%
- Operating costs−$3.82B27.6%
- Operating income$1.95B14.1%
- Interest, other & tax−$445.5M3.2%
- Net income$1.50B10.9%
Where FY2017 revenue went
$13.84B- Cost of revenue: $8.06B, 58% of revenue
- SG&A: $3.83B, 28% of revenue
- Net income: $1.50B, 11% of revenue
- R&D: $201.0M, 1.5% of revenue
- Interest, other & tax: $445.5M, 3.2% of revenue
Kept 11% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2017filed February 23, 2018Financial Statements
FY2017 against FY2016
| Line item | FY2017FY2016 | Change |
|---|---|---|
| Revenue | $13.84B$13.15B | +5.2% |
| Cost of Revenue | $8.06B$7.53B | +7.0% |
| Gross Profit | $5.77B$5.62B | +2.8% |
| R&D Expenses | $201.00M$189.00M | +6.3% |
| SG&A Expenses | $3.83B$3.71B | +3.2% |
| Operating Income | $1.95B$1.87B | +4.3% |
| Interest Expense | $274.60M$285.40M | −3.8% |
| Net Income | $1.50B$1.23B | +22.4% |
| EPS (Basic) | $5.20$4.20 | +23.8% |
| EPS (Diluted) | $5.12$4.14 | +23.7% |
| Shares Outstanding (Basic) | 289.60M292.50M | −1.0% |
| Shares Outstanding (Diluted) | 294.00M296.70M | −0.9% |
05—Questions
Frequently Asked Questions
What were Ecolab's key revenue drivers in 2017?
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.
How did Ecolab manage its business portfolio in 2017?
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.
What was Ecolab's financial health and cash flow situation as of December 31, 2017?
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.
How did the Tax Cuts and Jobs Act of 2017 impact Ecolab's financial results?
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.
06—Continue