UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
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Item 2.02 Results of Operations and Financial Condition.
Ecolab Inc. (“Ecolab” or the “Company”) is providing as an exhibit to this Current Report on Form 8-K a table (Exhibit 99.1) with supplemental unaudited reportable segment net sales and operating income information for the years ended December 31, 2023 and December 31, 2022 reflecting international operations at the fixed currency exchange rates established by Company management at the beginning of 2024. The exhibit also reflects changes to the Company’s segment reporting structure, including the movement of certain operating segments, customers and cost allocations effective in the first quarter of 2024.
The Company’s organizational structure consists of global business unit and global regional leadership teams. The Company’s operating segments follow its commercial and product-based activities and are based on engagement in business activities, availability of discrete financial information and review of operating results by the Chief Operating Decision Maker at the identified operating segment level. Effective January 1, 2024, the Company’s former Textile Care and Colloidal Technologies Group (“CTG”) operating segments are now part of the Water operating segment which continues to remain in the Global Industrial reportable segment. Additionally, the Pest Elimination operating segment, formerly aggregated with the Textile Care and CTG operating segments within Other, is now reported as the stand-alone Global Pest Elimination reportable segment. After these changes, the Company has eight operating segments.
The Company is also providing a table (Exhibit 99.2) with supplemental unaudited reportable segment net sales and operating income information for each of the four quarters of 2023 and for the twelve months ended December 31, 2023, reflecting the changes noted above. Ecolab also will publish the attached exhibits on its website located at www.ecolab.com.
The financial information in the tables represents a supplemental presentation of certain of Ecolab’s 2023 and 2022 reportable segment information as explained in this Current Report on Form 8-K and is not intended to replace the presentation of such information in Ecolab’s Quarterly Reports on Form 10-Q filed with respect to the first, second and third quarters of 2023 and Ecolab’s Annual Reports on Form 10-K filed with respect to the fiscal years ended December 31, 2023 and December 31, 2022.
The information in this Current Report on Form 8-K, including the exhibits attached hereto, is furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section and shall not be deemed incorporated by reference into any registration statement or other document filed with the Securities and Exchange Commission, except as shall be expressly set forth by specific reference in such a filing.
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Item 9.01 Financial Statements and Exhibits.
(d) | Exhibits. |
The following exhibits are furnished pursuant to Item 2.02 of Form 8-K and should not be deemed to be “filed” under the Securities Exchange Act of 1934.
Exhibit No. | Description | Method Of Filing | |||
(99.1) | Supplemental Reportable Segment Information and Non-GAAP Reconciliation (unaudited). | Filed herewith electronically. | |||
(99.2) | Filed herewith electronically. | ||||
(104) | Cover Page Interactive Data File. | Embedded within the Inline XBRL document. |
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Exhibit 99.1
ECOLAB INC.
SUPPLEMENTAL REPORTABLE SEGMENT INFORMATION
AND NON-GAAP RECONCILIATION
(unaudited)
Year ended December 31 (millions) | | 2023 | | 2022 | ||||||||||||
| | | | | | Fixed | | | | | | | | Fixed | | |
| | | | | | Currency | | | | | | | | Currency | | |
| | Values at | | | | Rate | | Values at | | Values at | | | | Rate | | Values at |
| | 2023 Rates | | Other | | Change | | 2024 Rates | | 2023 Rates | | Other | | Change | | 2024 Rates |
Net Sales | | | | | | | | | | | | | | | | |
Global Industrial | | $7,193.1 | | $407.3 | | $40.1 | | $7,640.5 | | $6,736.3 | | $392.5 | | $43.8 | | $7,172.6 |
Global Institutional & Specialty | | 4,994.0 | | - | | 20.6 | | 5,014.6 | | 4,414.3 | | - | | 18.9 | | 4,433.2 |
Global Healthcare & Life Sciences | | 1,576.9 | | - | | 30.6 | | 1,607.5 | | 1,505.8 | | - | | 28.5 | | 1,534.3 |
Global Pest Elimination | | - | | 1,061.5 | | 8.7 | | 1,070.2 | | - | | 955.4 | | 8.1 | | 963.5 |
Other | | 1,442.3 | | (1,442.3) | | - | | - | | 1,313.3 | | (1,313.3) | | - | | - |
Corporate | | 69.1 | | (26.5) | | 0.1 | | 42.7 | | 123.7 | | (34.6) | | 0.1 | | 89.2 |
Subtotal at fixed currency rates | | 15,275.4 | | - | | 100.1 | | 15,375.5 | | 14,093.4 | | - | | 99.4 | | 14,192.8 |
Effect of foreign currency translation | | 44.8 | | - | | (100.1) | | (55.3) | | 94.4 | | - | | (99.4) | | (5.0) |
Total reported GAAP net sales | | $15,320.2 | | $ - | | $ - | | $15,320.2 | | $14,187.8 | | $ - | | $ - | | $14,187.8 |
| | | | | | | | | | | | | | | | |
Operating Income | | | | | | | | | | | | | | | | |
Global Industrial | | $1,080.7 | | $39.0 | | $2.3 | | $1,122.0 | | $935.8 | | $10.3 | | $2.8 | | $948.9 |
Global Institutional & Specialty | | 823.0 | | 14.9 | | 3.9 | | 841.8 | | 621.7 | | 8.1 | | 2.1 | | 631.9 |
Global Healthcare & Life Sciences | | 160.0 | | (6.7) | | 7.5 | | 160.8 | | 193.3 | | (4.1) | | 4.2 | | 193.4 |
Global Pest Elimination | | - | | 209.0 | | 1.4 | | 210.4 | | - | | 195.6 | | 1.7 | | 197.3 |
Other | | 255.0 | | (255.0) | | - | | - | | 209.9 | | (209.9) | | - | | - |
Corporate | | (331.7) | | (1.2) | | 0.1 | | (332.8) | | (414.4) | | - | | 0.1 | | (414.3) |
Subtotal at fixed currency rates | | 1,987.0 | | - | | 15.2 | | 2,002.2 | | 1,546.3 | | - | | 10.9 | | 1,557.2 |
Effect of foreign currency translation | | 5.3 | | - | | (15.2) | | (9.9) | | 16.2 | | - | | (10.9) | | 5.3 |
Total reported GAAP operating income | | $1,992.3 | | $ - | | $ - | | $1,992.3 | | $1,562.5 | | $ - | | $ - | | $1,562.5 |
Notes:
We evaluate the performance of our non-U.S. dollar functional currency international operations based on fixed currency exchange rates, which eliminate the impact of exchange rate fluctuations on our international operations. Fixed currency amounts are updated annually at the beginning of each year based on translation into U.S. dollars at foreign currency exchange rates established by management, with all periods presented using such rates. The "Fixed Currency Rate Change” columns in the table above reflect international operations at fixed currency exchange rates established by management at the beginning of 2024, rather than the 2023 established rates. The difference between the fixed currency exchange rates and the actual currency exchange rates is reported within the "Effect of foreign currency translation" rows in the table above.
The “Other” columns in the table above reflect changes between reportable segments including the movement of the Textile Care and Colloidal Technologies Group operating segments to the Water operating segment which continues to remain in the Global Industrial reportable segment, the movement of the Pest Elimination operating segment to the stand-alone Global Pest Elimination reportable segment and the immaterial movement of certain customers and cost allocations.
The above table includes financial measures that have not been calculated in accordance with accounting principles generally accepted in the U.S. (“GAAP”), including fixed currency sales and fixed currency operating income. We provide these measures as additional information regarding our operating results. We use these non-GAAP measures internally to evaluate our performance and in making financial and operational decisions, including with respect to incentive compensation. We believe that our presentation of these measures provides investors with greater transparency with respect to our results of operations and that these measures are useful for period-to-period comparison of results. These non-GAAP financial measures are not in accordance with, or an alternative to, GAAP and may be different from non-GAAP measures used by other companies. Investors should not rely on any single financial measure when evaluating our business. We recommend that investors view these measures in conjunction with the GAAP measures included in the table.
Exhibit 99.2
ECOLAB INC.
SUPPLEMENTAL REPORTABLE SEGMENT INFORMATION AND NON-GAAP RECONCILIATION
2023 REVISED SEGMENT DATA AT 2024 FIXED CURRENCY EXCHANGE RATES
(unaudited)
(millions) | | 2023 | ||||||||
| | First Quarter | | Second Quarter | | Third Quarter | | Fourth Quarter | | Twelve Months |
| | Ended | | Ended | | Ended | | Ended | | Ended |
| | March 31 | | June 30 | | September 30 | | December 31 | | December 31 |
Net Sales | | | | | | | | | | |
Global Industrial | | $1,808.2 | | $1,906.4 | | $1,940.8 | | $1,985.1 | | $7,640.5 |
Global Institutional & Specialty |
| 1,131.2 | | 1,273.7 | | 1,314.1 | | 1,295.6 | | 5,014.6 |
Global Healthcare & Life Sciences | | 386.1 | | 395.3 | | 408.3 | | 417.8 | | 1,607.5 |
Global Pest Elimination |
| 244.6 | | 269.7 | | 283.1 | | 272.8 | | 1,070.2 |
Corporate | | 10.7 | | 10.6 | | 10.7 | | 10.7 | | 42.7 |
Subtotal at fixed currency rates |
| 3,580.8 | | 3,855.7 | | 3,957.0 | | 3,982.0 | | 15,375.5 |
Effect of foreign currency translation |
| (9.2) | | (3.6) | | 1.1 | | (43.6) | | (55.3) |
Total reported GAAP net sales |
| $3,571.6 | | $3,852.1 | | $3,958.1 | | $3,938.4 | | $15,320.2 |
|
| | | | | | | | | |
Operating Income | | | | | | | | | | |
Global Industrial | | $219.8 | | $264.9 | | $299.1 | | $338.2 | | $1,122.0 |
Global Institutional & Specialty |
| 130.1 | | 213.4 | | 254.9 | | 243.4 | | 841.8 |
Global Healthcare & Life Sciences | | 35.4 | | 33.2 | | 44.7 | | 47.5 | | 160.8 |
Global Pest Elimination |
| 44.5 | | 52.4 | | 59.0 | | 54.5 | | 210.4 |
Corporate |
| (77.4) | | (79.3) | | (91.6) | | (84.5) | | (332.8) |
Subtotal at fixed currency rates |
| 352.4 | | 484.6 | | 566.1 | | 599.1 | | 2,002.2 |
Effect of foreign currency translation |
| (0.8) | | 0.1 | | (0.1) | | (9.1) | | (9.9) |
Total reported GAAP operating income |
| $351.6 | | $484.7 | | $566.0 | | $590.0 | | $1,992.3 |
Notes:
We evaluate the performance of our non-U.S. dollar functional currency international operations based on fixed currency exchange rates, which eliminate the impact of exchange rate fluctuations on our international operations. Fixed currency amounts are updated annually at the beginning of each year based on translation into U.S. dollars at foreign currency exchange rates established by management, with all periods presented using such rates. The difference between the fixed currency exchange rates and the actual currency exchange rates is reported within the "Effect of foreign currency translation" rows in the table above.
The table also reflects the other changes between reportable segments noted in Exhibit 99.1 including the movement of the Textile Care and Colloidal Technologies Group operating segments to the Water operating segment, the movement of the Pest Elimination operating segment to the stand-alone Global Pest Elimination reportable segment and the immaterial movement of certain customers and cost allocations.
The above table includes financial measures that have not been calculated in accordance with accounting principles generally accepted in the U.S. (“GAAP”), including fixed currency sales and fixed currency operating income. We provide these measures as additional information regarding our operating results. We use these non-GAAP measures internally to evaluate our performance and in making financial and operational decisions, including with respect to incentive compensation. We believe that our presentation of these measures provides investors with greater transparency with respect to our results of operations and that these measures are useful for period-to-period comparison of results. These non-GAAP financial measures are not in accordance with, or an alternative to, GAAP and may be different from non-GAAP measures used by other companies. Investors should not rely on any single financial measure when evaluating our business. We recommend that investors view these measures in conjunction with the GAAP measures included in the table.
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