Ecolab (ECL) investor relations material

Executive summary

• Adjusted EPS grew 11% year-over-year to $2.09, driven by 5% organic sales growth, strong volume, improved pricing, and productivity gains that offset rising commodity costs.

• Reported sales increased 10% year-over-year to $4.4 billion in Q2 2026, with growth engines like Life Sciences and Global High-Tech posting double-digit gains.

• Portfolio continues shifting toward higher-growth, higher-margin businesses, with recent acquisitions (CoolIT, Ovivo Electronics) contributing to performance.

• Volumes grew 1% despite a 1% headwind from Middle East disruptions; underlying volume growth accelerated from Q1.

• Growth engines such as Food & Beverage, Institutional, Light Water, and Life Sciences delivered robust performance, while headwinds from Paper and Heavy Water eased.

Financial highlights

• Organic sales growth reached 5% in Q2, with core businesses and growth engines both contributing.

• Adjusted operating income rose 10% to $809M; organic operating income margin expanded 40 bps to 18.8%.

• Adjusted gross margin declined 60–70 bps due to acquisitions, but organic gross margin remained stable at 44.9%.

• Cash from operations for the first half was $1.18B, with capital expenditures of $589M.

• Ecolab Digital grew 27%, nearing a $500M annual run rate.

Outlook and guidance

• Raised 2026 adjusted diluted EPS outlook to $8.05–$8.25, up 7%–10% year-over-year.

• Q3 2026 adjusted diluted EPS expected at $2.13–$2.23, up 3%–8% year-over-year.

• Second half 2026 organic sales growth forecasted at 6%–7%, with adjusted operating income margin of 19% and organic margin at 20%.

• EPS growth expected to accelerate to 12%–15% beyond 2026; 20% operating income margin target reaffirmed for 2027.

• Special charges in 2026 expected at $0.75–$0.80 per share, mainly for restructuring and integration.