10-QPeriod: Q1 FY2021

ECOLAB INC. Quarterly Report for Q1 Ended Mar 31, 2021

Filed May 6, 2021For Securities:ECL

Summary

Ecolab Inc. (ECL) reported its first quarter 2021 financial results, showing a net sales decrease of 4% to $2.89 billion compared to the prior year. This decline was primarily driven by the ongoing impacts of the COVID-19 pandemic, particularly on the Global Institutional & Specialty segment, and supply chain disruptions including the Texas freeze. Despite the sales dip, the company demonstrated resilience with improved operational efficiency initiatives. Net income attributable to Ecolab decreased by 34% to $193.6 million, resulting in diluted EPS of $0.67. The company continued to generate strong operating cash flow, supporting its strategic investments and shareholder returns through dividends and share repurchases. Ecolab also enhanced its liquidity by amending and extending its revolving credit facility.

Financial Highlights

53 data points
Beta

Revenue

$2.88B

40.7% Gross Margin

Net Income

$196.50M

6.8% Net Margin

EPS (Diluted)

$0.67

Total Assets

$18.21B

Cash & Equivalents

$1.19B

Free Cash Flow

$193.20M

Financial Statements
Beta
Revenue$2.88B
Cost of Revenue$1.71B
Gross Profit$1.17B
SG&A Expenses$862.90M
Operating Income$297.30M
Interest Expense$53.80M
Net Income$196.50M
EPS (Basic)$0.68
EPS (Diluted)$0.67
Shares Outstanding (Basic)286.00M
Shares Outstanding (Diluted)288.80M

Key Highlights

  • 1Net sales decreased by 4% to $2.89 billion in Q1 2021 compared to Q1 2020, impacted by ongoing COVID-19 effects and supply chain disruptions.
  • 2Operating income decreased by 21% to $297.3 million, and net income attributable to Ecolab decreased by 34% to $193.6 million.
  • 3Diluted EPS from continuing operations was $0.67, a decrease from $1.00 in the prior year's quarter.
  • 4The Global Healthcare & Life Sciences segment showed strong growth with a 14% increase in fixed currency sales, benefiting from COVID-19 related demand.
  • 5The Global Institutional & Specialty segment experienced a significant 21% decline in fixed currency sales due to continued pandemic-related restrictions affecting customer demand.
  • 6Ecolab generated $295.3 million in cash from operating activities, demonstrating continued strong cash flow generation.
  • 7The company amended and extended its $2.0 billion revolving credit facility in April 2021, extending maturity to April 2026, reinforcing its liquidity position.

Frequently Asked Questions

The primary driver for the decrease in net sales was the continued impact of the COVID-19 pandemic, which affected customer demand, particularly in the Global Institutional & Specialty segment. Additionally, supply chain disruptions, including those caused by the Texas freeze, also negatively impacted sales performance.

The Global Healthcare & Life Sciences segment showed strong growth, increasing fixed currency sales by 14%. The Global Industrial segment saw a modest 2% decrease in fixed currency sales, impacted by weather disruptions. The Global Institutional & Specialty segment experienced a significant 21% decline in fixed currency sales due to pandemic-related restrictions.

Ecolab maintains a strong liquidity position. As of March 31, 2021, the company had $1.19 billion in cash and cash equivalents. Furthermore, in April 2021, Ecolab amended and extended its $2.0 billion revolving credit facility, extending its maturity to April 2026, which provides significant financial flexibility.

Ecolab anticipates very strong growth in the second quarter of 2021 compared to the second quarter of 2020, driven primarily by significant growth in its Institutional division as economies reopen. The company expects continued robust consolidated gains in the second half of the year, provided the pandemic continues to wane.