Ecolab(US:ECL)2021-10-28 16:00Financial Performance - Reported net sales for Q3 2021 increased by 10% to $3,321 million, with fixed currency sales also up by 8%[112] - Reported operating income for Q3 2021 increased by 13% to $466 million, with adjusted operating income up 15%[113] - Net income from continuing operations attributable to Ecolab increased by 32% to $324 million, with adjusted net income up 20%[113] - Reported diluted EPS from continuing operations increased by 32% to $1.12, with adjusted diluted EPS rising 20% to $1.38[113] - Reported GAAP operating income increased by 13% to $465.8 million in Q3 2021 compared to $411.4 million in Q3 2020, and by 24% to $1,210.9 million for the first nine months of 2021 compared to $979.6 million in the same period of 2020[129] - Non-GAAP adjusted operating income rose by 15% to $525.0 million in Q3 2021 and by 16% to $1,323.8 million for the first nine months of 2021[129] - Reported GAAP net income from continuing operations attributable to Ecolab increased by 32% to $324.5 million in Q3 2021 compared to $246.2 million in Q3 2020, and by 24% to $828.9 million for the first nine months of 2021 compared to $667.1 million in the same period of 2020[133] - Non-GAAP adjusted net income from continuing operations attributable to Ecolab rose by 20% to $399.0 million in Q3 2021 and by 22% to $985.5 million for the first nine months of 2021[133] Segment Performance - Global Industrial segment fixed currency sales rose 7% to $1,620 million, driven by strong growth in Water and Paper sectors[112] - Global Institutional & Specialty segment fixed currency sales increased 18% to $1,077 million, supported by recovering markets and new business wins[112] - Global Healthcare & Life Sciences segment fixed currency sales decreased 13% to $290 million, with underlying Healthcare sales estimated to grow at mid-single digit rates[112] - Global Industrial segment net sales for Q3 2021 were $1,620.4 million, up 7% from $1,512.9 million in Q3 2020[137] - Global Institutional & Specialty segment net sales increased by 18% to $1,076.6 million in Q3 2021 from $914.4 million in Q3 2020[137] - Global Healthcare & Life Sciences segment reported a 13% decrease in net sales to $290.2 million in Q3 2021 from $335.1 million in Q3 2020[137] Cost Management and Restructuring - Selling, general and administrative expenses as a percentage of sales decreased to 25.1% in Q3 2021 from 27.2% in Q3 2020[118] - Total restructuring charges recorded in Q3 2021 were $1.4 million, with cumulative charges under the Institutional Plan amounting to $44.7 million[118] - The anticipated total costs for the Institutional Advancement Program are $80 million, with expected savings of approximately $50 million by the end of 2024[118] - Restructuring activities incurred costs of $2.2 million in Q3 2021, up from $1.0 million in Q3 2020, with cumulative restructuring charges of $242.1 million since the start of the Accelerate 2020 plan[119] - The Institutional Plan has delivered $29 million in cumulative cost savings, with estimated annual savings of $50 million expected by 2024[121] Special Charges and Inventory - COVID-19 related inventory reserves of $50 million were recorded in Q3 2021 for excess sanitizer inventory, with total after-tax net charges of $40.6 million in Q3 2021[126] - Total special (gains) and charges amounted to $98.5 million in Q3 2021, down from $127.6 million in Q3 2020[119] - Acquisition and integration costs related to CID Lines and Bioquell amounted to $0.8 million in Q3 2021, with total costs of $3.3 million for the first nine months of 2021[123] Debt and Cash Flow - Cash provided by operating activities increased by $329 million in the first nine months of 2021 compared to the same period in 2020, totaling $1,421 million[166] - Total assets were $17.9 billion as of September 30, 2021, a decrease from $18.1 billion as of December 31, 2020[164] - Total liabilities decreased to $11.0 billion as of September 30, 2021, down from $11.9 billion as of December 31, 2020[165] - The net debt to EBITDA ratio improved to 2.0 as of September 30, 2021, compared to 2.4 as of December 31, 2020[166] Future Outlook - The company expects fourth quarter earnings to grow in double digits, although not as strongly as in Q3 2021[174] - The company emphasizes the uncertainty surrounding the COVID-19 pandemic, which could significantly impact business performance and prospects[182] Risk Management - The company utilizes foreign currency forward contracts and interest rate swap agreements to manage risks related to foreign currency exchange rates and interest rates[183] - There is a focus on restructuring activities, with expectations of cost savings and efficiency improvements, although specific financial impacts are not detailed[182]