01—Abstract
Summary
Summary of the 10-K filed February 25, 2022. Cited figures are marked; the original filing is the authoritative source.
Ecolab Inc. (ECL) reported strong sales growth of 8% to $12.7 billiona for the fiscal year ended December 31, 2021.
This performance was driven by double-digit sales growth in the Institutional & Specialty and Other segments, coupled with robust growth in the Industrial segment. Despite facing significant headwinds from cost inflation and supply chain disruptions, Ecolab effectively managed these challenges through pricing increases and volume growth, which more than offset higher delivered product costs. The company also successfully integrated the Purolite acquisition, a significant transaction that closed in December 2021 for $3.7 billionb, bolstering its Life Sciences segment.
Financially, Ecolab demonstrated solid operational performance, with adjusted operating income increasing by 11% on a fixed currency basis. The company maintained a strong balance sheet, supported by 'A' range credit ratings, and generated robust cash flow from operations of $2.1 billionc.
Ecolab continues its commitment to returning capital to shareholders, marked by its 30th consecutive annual dividend rate increase. The company is strategically positioned to navigate ongoing economic uncertainties and capitalize on growth opportunities across its diverse end markets.
02—Key points
Key Highlights
- Reported sales increased 8% to $12.7 billion in 2021, driven by strong performance across key segments.
- Acquired Purolite for $3.7 billion, significantly strengthening the Life Sciences segment.
- Adjusted operating income (fixed currency) increased by 8% compared to the prior year, reflecting effective cost management and pricing strategies.
- Generated $2.1 billion in cash flow from continuing operations, demonstrating strong financial health.
- Increased quarterly dividend by 6%, marking the 30th consecutive annual dividend rate increase.
- Maintained strong credit ratings (A-/A3/A-) with a commitment to 'A' range metrics.
- Successfully navigated supply chain disruptions and cost inflation through pricing and volume management.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2021, Ecolab Inc. kept $0.09.
- Revenue$12.73B100.0%
- Cost of revenue−$7.62B59.8%
- Gross profit$5.12B40.2%
- Operating costs−$3.52B27.6%
- Operating income$1.60B12.6%
- Interest, other & tax−$454.6M3.6%
- Net income$1.14B9.0%
Where FY2021 revenue went
$12.73B- Cost of revenue: $7.62B, 60% of revenue
- SG&A: $3.42B, 27% of revenue
- Net income: $1.14B, 9.0% of revenue
- R&D: $186.0M, 1.5% of revenue
- Interest, other & tax: $454.6M, 3.6% of revenue
Kept 9.0% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2021filed February 25, 2022Financial Statements
FY2021 against FY2020
| Line item | FY2021FY2020 | Change |
|---|---|---|
| Revenue | $12.73B$11.79B | +8.0% |
| Cost of Revenue | $7.62B$6.91B | +10.3% |
| Gross Profit | $5.12B$4.88B | +4.8% |
| R&D Expenses | $186.00M$185.00M | +0.5% |
| SG&A Expenses | $3.42B$3.31B | +3.2% |
| Operating Income | $1.60B$1.40B | +14.5% |
| Interest Expense | $230.60M$304.80M | −24.3% |
| Net Income | $1.14B-$1.21B | +194.9% |
| EPS (Basic) | $3.95$-4.20 | +194.0% |
| EPS (Diluted) | $3.91$-4.15 | +194.2% |
| Shares Outstanding (Basic) | 286.30M287.00M | −0.2% |
| Shares Outstanding (Diluted) | 289.10M290.30M | −0.4% |
05—Questions
Frequently Asked Questions
What was Ecolab's revenue performance in 2021?
Ecolab reported a strong increase in net sales of 8% to $12.7 billion for the fiscal year ended December 31, 2021. This growth was driven by the Institutional & Specialty and Other segments showing double-digit increases, and strong performance in the Industrial segment, which helped offset a decline in the Healthcare & Life Sciences segment compared to a very strong prior year.
How did the Purolite acquisition impact Ecolab?
Ecolab acquired Purolite for $3.7 billion in cash on December 1, 2021. Purolite is a leading global provider of ion exchange resins for separation and purification, significantly enhancing Ecolab's Life Sciences segment. The acquisition is expected to be complementary to Ecolab's current offerings and critical for drug production and biopharma product purification.
What is Ecolab's approach to managing cost inflation and supply chain issues?
Ecolab stated that it undertook extraordinary measures to ensure customers were supplied with critical products and services amidst significantly higher delivered product costs and supply constraints. The company implemented accelerating pricing and increased volumes, which more than offset these cost pressures.
What was Ecolab's cash flow generation and capital return to shareholders?
Ecolab generated strong cash flow from operations, amounting to $2.1 billion in 2021. The company continues its commitment to returning capital to shareholders, demonstrated by a 6% increase in its quarterly cash dividend, marking its 30th consecutive annual dividend rate increase.
06—Continue