Ecolab (ECL) Q2 2021 earnings summary

Executive summary

• Q2 results delivered strong YoY growth as recovering markets, accelerating pricing and new business wins more than offset higher delivered product costs and slower reopenings outside the U.S..

• Reported sales from continuing operations rose 18%; adjusted diluted EPS was $1.22, up 88% YoY.

Financial highlights

• Net sales were $3,162.7 million, up 18% reported; acquisition-adjusted fixed-currency sales rose 12%.

• Reported operating income was $447.8 million, up 133%; adjusted fixed-currency operating income was $471.4 million, up 53%.

• Net income from continuing operations attributable to Ecolab was $310.8 million, up 141%; adjusted net income was $352.6 million, up 86%.

• Reported diluted EPS was $1.08, up 145%; adjusted diluted EPS, excluding special gains and charges and discrete tax items, was $1.22, up 88%.

Outlook and guidance

• Expected the U.S. recovery to continue, Europe to reopen as forecast, and other regions to follow; pricing actions were ahead of input costs, with further coverage expected in H2.

• Expected strong YoY performance in H2, attractive sequential earnings improvement in Q3 and larger comparative gains in Q4 as pricing benefits build.

• FY 2021 diluted EPS expected to exceed 2019 continuing-operations EPS, excluding the $0.15/share Texas freeze impact.

• Record new-business and innovation pipelines, life sciences, data centers, animal health and expanding digital capabilities positioned as growth drivers.