Ecolab(US:ECL)2025-10-30 20:13Financial Performance - Reported net sales for Q3 2025 increased 4% to $4,165.0 million, with organic sales rising 3%[149] - Reported operating income decreased 27% to $760.2 million, while organic operating income increased 10%[153] - Net income attributable to Ecolab decreased 21% to $585.0 million, but adjusted net income increased 13% when excluding special items[153] - Reported diluted EPS decreased 21% to $2.05, while adjusted diluted EPS increased 13% to $2.07[153] - Gross margin improved to 44.8% in Q3 2025 from 43.4% in Q3 2024, reflecting strong value pricing[154] - Consolidated reported GAAP net sales for Q3 2025 were $4,165.0 million, a 4% increase from $3,998.5 million in Q3 2024[188] - Reported GAAP operating income decreased by 27% in Q3 2025 and 9% in the first nine months of 2025 compared to the same periods in 2024[172]. - Non-GAAP adjusted operating income increased by 10% in Q3 2025 and 9% in the first nine months of 2025 compared to the same periods in 2024[172]. - Reported GAAP net income attributable to Ecolab was $585.0 million in Q3 2025, down 21% from $736.5 million in Q3 2024[184]. - Reported GAAP diluted EPS was $2.05 in Q3 2025, a decrease of 21% from $2.58 in Q3 2024[185]. Segment Performance - Organic sales for the Global Water segment grew 2% to $1,929.4 million, driven by Food & Beverage and Light & Heavy sales growth[149] - Global Water segment net sales for Q3 2025 were $1,953.5 million, up 3% from $1,897.6 million in Q3 2024, with organic sales growth of 2%[191][192] - Global Institutional & Specialty segment net sales for Q3 2025 were $1,544.8 million, a 1% increase from $1,525.7 million in Q3 2024, with organic sales growth of 4%[197][198] - Global Pest Elimination segment net sales for Q3 2025 were $322.6 million, a 7% increase from $301.7 million in Q3 2024[188] - Global Water segment operating income for Q3 2025 was $336.0 million, a 3% increase from $324.8 million in Q3 2024[191] - Global Institutional & Specialty segment operating income for Q3 2025 was $365.0 million, an 11% increase from $327.6 million in Q3 2024[197] - Global Life Sciences segment operating income for Q3 2025 was $28.1 million, an 18% increase from $23.9 million in Q3 2024[188] - Global Pest Elimination segment reported fixed currency sales of $322.6 million in Q3 2025, a 7% increase from the previous year, with organic sales also up by 6%[202] - Operating income for Global Pest Elimination increased by 11% in Q3 2025, with an operating income margin of 20.9%[202] - Global Life Sciences segment achieved fixed currency sales of $171.0 million in Q3 2025, reflecting a 6% increase, with organic sales rising by 6%[207] Cost Management and Restructuring - The One Ecolab initiative anticipates restructuring costs of $240 million and annualized cost savings of $225 million by 2027[158] - Cumulative restructuring charges under the One Ecolab initiative reached $148.1 million, with a restructuring liability of $64.8 million as of September 30, 2025[159][160] - The Combined Program delivered targeted annual cost savings of $175 million after completion in 2024[163] - The net liability related to the Combined Program was $3.2 million as of September 30, 2025, down from $12.8 million as of December 31, 2024[164]. - The restructuring liability balance for other plans was $5.6 million as of September 30, 2025, compared to $6.5 million as of December 31, 2024[165]. Cash Flow and Debt - Cash provided by operating activities decreased by $184.7 million to $1,862.5 million in the first nine months of 2025, primarily due to unfavorable changes in working capital[215] - Cash used for investing activities was ($729.0 million) in the first nine months of 2025, significantly down from $193.7 million in the same period of 2024[216] - The company issued $1.0 billion of long-term debt in the first nine months of 2025, while repaying €575 million ($674 million) of long-term debt[221] - As of September 30, 2025, the company had $1,956 million in cash and cash equivalents, with $582 million held outside the U.S.[223] Tax and Interest - The company recognized net tax benefits related to discrete tax items of $16.3 million in Q3 2025[179]. - Interest expense decreased by 21% to $55.3 million in Q3 2025 from $70.4 million in Q3 2024, reflecting lower interest rates[175]. Risks and Forward-Looking Statements - The impact of geopolitical instability and supply chain challenges are noted as risks that could affect future performance[244] - Forward-looking statements include expectations regarding capital investments, acquisitions, and the impact of economic factors such as interest rates and foreign currency risk[242] - The company may further narrow its presence in Russia depending on future developments related to geopolitical events[232] Non-GAAP Measures - Non-GAAP financial measures are used to evaluate performance, including adjusted cost of sales, gross margin, and operating income, which exclude special gains and charges[234] - EBITDA is defined as net income including noncontrolling interest, with significant components such as provision for income taxes and depreciation added back[237] - Organic sales and operating income measures exclude the impact of special gains and charges, as well as results from acquired and divested businesses[240] - The company emphasizes the importance of viewing non-GAAP measures in conjunction with U.S. GAAP measures for a comprehensive understanding of financial performance[241]