Ecolab Inc. (ECL) Q4 2022 Earnings Call Transcript

For the period ending December 31, 2022

February 14, 2023 1:00 p.m. ET

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks:

Operator

Greetings, and welcome to the Ecolab's Fourth Quarter 202 Earnings Release Conference Call. At this time all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation.

It's now my pleasure to introduce your host, Andy Hedberg, Vice President, Investor Relations for Ecolab. Mr. Hedberg, you may now begin.

Andrew Hedberg - Head of IR

Thank you, and hello, everyone, and welcome to Ecolab's fourth quarter conference call. With me today are Christophe Beck, Ecolab's Chairman and CEO; and Scott Kirkland, our CFO. A discussion of our results, along with our earnings release and slides referencing the quarter's results are available on Ecolab's website at ecolab.com/investor. Please take a moment to read the cautionary statements in these materials, which state that this teleconference and the associated supplemental materials include estimates of future performance. These are forward-looking statements, and actual results could differ materially from those projected. Factors that could cause actual results to differ are described in the Risk Factors section in our most recent Form 10-K and in our posted materials. We also refer you to the supplemental diluted earnings per share information in the release.

With that, I'd like to turn the call over to Christophe Beck for his comments.

Christophe Beck - CEO

Thank you so much, Andy, and welcome to everyone. Our team delivered a strong fourth quarter, and honestly, even slightly better than I would have predicted. The milder winter in Europe certainly helped, but most importantly, our team executed very well in a macro environment that was far from ideal. Organic sales grew 12%, with good momentum across all segments. Industrial grew 14%, Institutional & Specialty grew 11%, Healthcare & Life Sciences got back to growth, delivering 7% organic, and Pest Elimination remains very strong, growing 10%.

Volumes outside Europe remained stable year-over-year, while our total pricing continued to accelerate from 12% in the third quarter to 13% in the fourth quarter. All this contributed to a strong 14% adjusted fixed currency operating income growth even as we experienced the expected peak in delivered product cost inflation, which reached 43% over the last two years in the fourth quarter. This led to adjusted EPS getting very close to last year's $1.28 EPS, while mitigating $0.10 of currency headwinds or 8 percentage year-over-year headwind to adjusted EPS growth.