01—Abstract
Summary
Summary of the 10-Q filed May 6, 2021. Cited figures are marked; the original filing is the authoritative source.
Ecolab Inc. (ECL) reported its first quarter 2021 financial results, showing a net sales decrease of 4% to $2.89 billiona 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 millionb, 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.
02—Key points
Key Highlights
- Net 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.
- Operating income decreased by 21% to $297.3 million, and net income attributable to Ecolab decreased by 34% to $193.6 million.
- Diluted EPS from continuing operations was $0.67, a decrease from $1.00 in the prior year's quarter.
- The Global Healthcare & Life Sciences segment showed strong growth with a 14% increase in fixed currency sales, benefiting from COVID-19 related demand.
- The Global Institutional & Specialty segment experienced a significant 21% decline in fixed currency sales due to continued pandemic-related restrictions affecting customer demand.
- Ecolab generated $295.3 million in cash from operating activities, demonstrating continued strong cash flow generation.
- The company amended and extended its $2.0 billion revolving credit facility in April 2021, extending maturity to April 2026, reinforcing its liquidity position.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q1 FY2021, Ecolab Inc. kept $0.07.
- Revenue$2.88B100.0%
- Cost of revenue−$1.71B59.3%
- Gross profit$1.17B40.7%
- Operating costs−$875.7M30.4%
- Operating income$297.3M10.3%
- Interest, other & tax−$100.8M3.5%
- Net income$196.5M6.8%
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2021filed May 6, 2021Financial Statements
Q1 FY2021 against Q1 FY2020
| Line item | Q1 FY2021Q1 FY2020 | Change |
|---|---|---|
| Revenue | $2.88B$3.02B | −4.5% |
| Cost of Revenue | $1.71B$1.72B | −0.5% |
| Gross Profit | $1.17B$1.30B | −9.8% |
| SG&A Expenses | $862.90M$908.30M | −5.0% |
| Operating Income | $297.30M$376.20M | −21.0% |
| Interest Expense | $53.80M$52.50M | +2.5% |
| Net Income | $196.50M$283.40M | −30.7% |
| EPS (Basic) | $0.68$0.98 | −30.6% |
| EPS (Diluted) | $0.67$0.97 | −30.9% |
| Shares Outstanding (Basic) | 286.00M288.80M | −1.0% |
| Shares Outstanding (Diluted) | 288.80M292.60M | −1.3% |
05—Questions
Frequently Asked Questions
What was the primary driver for the decrease in net sales?
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.
How did Ecolab's different business segments perform?
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.
What is the company's current liquidity position?
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.
What is the company's outlook for the second quarter of 2021?
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.
06—Continue