Ecolab's Organic Sales Growth Hits 7% Across The Board, But CoolIT Costs Cut Reported EPS 5%
Adjusted EPS rose 5% to $2.18 despite an approximate 10% CoolIT drag, and Ecolab set a fourth-quarter range of $2.13 to $2.23.
Ecolab, which sells water treatment, hygiene and infection-prevention products and services, said organic sales growth accelerated to 7% in the third quarter, while reported diluted earnings per share fell 5% to $1.95, according to an 8-K exhibit filed Tuesday. Net sales rose 13% to $4,694.8 million, helped by the Ovivo Electronics and CoolIT acquisitions.
Growth broadened, profit lagged
Adjusted earnings per share rose 5% to $2.18, and that figure carries an approximate 10% headwind from amortization and financing costs tied to the CoolIT purchase, the company said. Adjusted operating income grew 14%, while reported operating income rose 7%. Reported net income fell 6% to $551.3 million.
Volume rose 2% despite ongoing Middle East disruptions, and pricing added 5%. Food & Beverage and Light Water accelerated, and Heavy Water and Paper returned to solid growth. Global Water organic sales rose 9%, Institutional & Specialty 3%, Pest Elimination 8%.
Global High-Tech organic sales jumped 63%, and Life Sciences grew 17%. Ecolab Digital sales climbed 34% to $129 million. CEO Christophe Beck called the quarter "an inflection point in Ecolab's performance."
The price of the CoolIT deal
Net interest expense rose to $124.8 million from $55.3 million a year earlier, which the company tied to financing Ovivo Electronics and CoolIT. Long-term debt stood at $11,915.3 million at September 30, against $7,365.9 million at the end of 2025. Special charges, mostly acquisition and integration costs, totaled $82.9 million in the quarter.
Beck said Ovivo Electronics should grow in the mid-teens this year and CoolIT should more than double compared with pre-acquisition sales. Together, he said, they should add about two percentage points to annual organic growth one year after closing.
Outlook and 2027 targets
Ecolab expects 2026 adjusted EPS of $8.10 to $8.20, up 8% to 9%, including an approximate 6 percentage point CoolIT headwind. For the fourth quarter it guided to $2.13 to $2.23, up 2% to 7% from $2.08, with an approximate 12 percentage point headwind. It expects fourth-quarter organic sales growth of 6% to 7%.
Looking to 2027, Beck said organic sales should grow at the upper end of the 5% to 7% target and adjusted operating margin should reach 20%. Ecolab hosts a webcast on the results at 1:00 p.m. Eastern on Tuesday.
Ecolab's fourth-quarter guidance carries a CoolIT drag of about 12 percentage points, twice the 6-point drag it puts on the full year.
Sources
- 8-K Filing — ECOLAB INC. (ECL) — SEC EDGAR
- Exhibit ecl_ex99x1.htm — ECOLAB INC. 8-K exhibit — SEC EDGAR
- Exhibit ecl_ex99x2.htm — ECOLAB INC. 8-K exhibit — SEC EDGAR
