- Adjusted Diluted EPS $0.88, +7%;
- Continue to Expect Further Performance Improvement Through 2023
According to the company’s website press release on May 2, 2023:
FIRST QUARTER HIGHLIGHTS:
- Reported sales $3.6 billion, +9% versus last year. Organic sales +13%, led by double-digit growth in the Institutional & Specialty, Industrial, and Other segment, and improved growth in the Healthcare & Life Sciences segment.
- Reported operating income +38%. Organic operating income growth accelerated to +19%, as continued strong pricing and productivity gains more than offset easing but ongoing delivered product cost inflation and challenging macroeconomic conditions.
- Reported operating income margin 9.8%. Organic operating income margin 10.6%, +50 bps versus last year, reflecting modest gross margin expansion and improved productivity.
- Reported diluted EPS $0.82, +37%. Adjusted diluted EPS, excluding special gains and charges and discrete tax items were $0.88, +7%. Currency translation and higher interest expense had a combined $0.11 per share unfavorable impact on first quarter EPS.
2023 OUTLOOK
- 2023: Ecolab continues to expect to deliver quarterly adjusted earnings per share growth that accelerates towards its low double-digit historical performance.
- 2Q 2023: Expect second quarter 2023 adjusted diluted earnings per share in the $1.15 to $1.25 range, +5 to 14% versus last year.
CEO Comment
Christophe Beck, Ecolab’s chairman and chief executive officer, said, “We had a very strong start to 2023 with our team delivering continued double-digit organic sales growth, consistent with our expectations. We continued taking steps to further strengthen our growth foundation, like making investments in our Life Sciences business to capitalize on its long-term growth opportunities. Overall, our efforts drove organic operating income margin expansion with continued strong pricing and further productivity gains, in addition to easing but ongoing inflationary headwinds. This excellent performance resulted in 19% growth in organic operating income and accelerating growth in adjusted earnings per share despite significant currency translation and interest expense headwinds in a challenging macroeconomic environment.
“Looking ahead, we are well positioned to build on our operating momentum and expect further performance improvement in 2023. While the macroeconomic headwinds and inflationary pressures are expected to persist, our focus remains on offense – driving robust sales growth as we leverage our leading customer value proposition and our innovation pipeline, as well as on capturing our significant operating margin expansion opportunity. As a result, we continue to anticipate strong organic sales gains, double-digit growth in organic operating income, and adjusted earnings per share growth that accelerates towards our low double-digit historical performance.”
First Quarter 2023 Consolidated Results
Ecolab’s first quarter reported sales increased 9% and organic sales increased 13% when compared to the prior year.
First quarter 2023 reported operating income increased 38% and includes the impact of special gains and charges, which were a net charge primarily related to restructuring costs. Organic operating income growth accelerated to 19%, as strong pricing overcame investments in the business, higher delivered product costs, and softer volume.
Reported other income decreased $6 million in the first quarter of 2023 due to higher pension costs.
Reported interest expense increased 40% reflecting the impact from higher average interest rates on floating rate debt and last year’s fourth quarter debt issuance.
The reported income tax rate for the first quarter of 2023 was 18.0% compared with the reported rate of 20.7% in the first quarter of 2022. Excluding special gains and charges and discrete tax items, the adjusted tax rate for the first quarter of 2023 was 19.8% compared with the adjusted tax rate of 19.5% in the first quarter of 2022.
Reported net income increased 36% versus the prior year. Excluding the impact of special gains and charges and discrete tax items, adjusted net income increased 6% versus the prior year.
Reported diluted earnings per share increased 37% versus the prior year. Adjusted diluted earnings per share increased 7% when compared against the first quarter of 2022. Currency translation had a $0.05 unfavorable impact on first quarter 2023 earnings per share.
Investor Contact:
Andrew Hedberg (651) 250-2185
Cairn Clark (651) 250-2291
Media Contact:
Nigel Glennie (651) 250-2576
ABOUT ECOLAB
A trusted partner for millions of customers, Ecolab (NYSE:ECL) is a global sustainability leader offering water, hygiene and infection prevention solutions and services that protect people and the resources vital to life. Building on a century of innovation, Ecolab has annual sales of $14 billion, employs more than 47,000 associates and operates in more than 170 countries around the world. The company delivers comprehensive science-based solutions, data-driven insights and world-class service to advance food safety, maintain clean and safe environments, and optimize water and energy use. Ecolab’s innovative solutions improve operational efficiencies and sustainability for customers in the food, healthcare, life sciences, hospitality and industrial markets.
