Ecolab : Annual Report 2024

Published: 2025-03-24 20:31:04 ET ECL

/ 1 / INTRODUCTION

WELCOME

GROWTH, IMPACT, HIGH PERFORMANCE

T his was a record-breaking year for Ecolab.

Thanks to the best sales and service team in the business, we delivered record sales, record adjusted earnings per share, record operating income margins and record free cash flow by taking care of our customers. Our team's unparalleled reach and unique capabilities have protected the health of 1.4 billion people, conserved water equivalent to the drinking needs of nearly 800 million people, safeguarded a third of the world's processed food production, and supported more than a fifth of the world's power production. And we delivered our best year ever the right way, being named the most admired company in our industry and one of the world's most ethical companies for the 19th consecutive year.

Ecolab's performance was impressive and broad-based:

• Industrial accelerated its performance, generating strong new business wins

while exploring emerging micro-electronics and global high-tech opportunities.

• Institutional & Specialty delivered impressive growth in a down market, helping our restaurant and lodging customers improve performance, optimize labor and reduce costs.

• Healthcare & Life Sciences refocused on the infection prevention and instrument reprocessing needs of hospital customers, while continuing to emerge as a future leader in the fast-growing biotechnology sector.

• Pest Elimination delivered robust performance, as it made sizable investments in the scalable digital capabilities that will support future growth.

This success is the product of the passion and expertise of 48,000 Ecolab associates serving at millions of customer locations across more than 170 countries around the world. We believe the rich diversity of our associates, customers and communities around the world is our strength. That's why we draw a direct connection between our best year ever and the most engaged and inclusive workforce in our history.

While I am proud of what our winning team achieved in 2024, I am just as excited for what lies ahead as we invest in our people and the solutions that will fuel our continued growth. New digital technologies will extend the positive impact of our sales and service team, with Artificial Intelligence powered dish machines, circular water systems and connected pest management delivering new insights and value for our customers.

The world is also at a moment of incredible change and opportunity, as it makes the transition to Artificial Intelligence. This evolution will reward those who can successfully address the resource constraints presented by a power- and water-intensive technology. These demands play into Ecolab's strengths, and we are perfectly positioned to address the water and cooling needs of this high-growth industry.

A fascinating chapter has just begun, and Ecolab's services and solutions have never been more relevant. We have a solid growth formula in place, the right plan to invest in our business, and a winning people strategy that will fuel continued high performance for the years ahead.

I thank you for your investment in Ecolab and your continued belief in our team.

Christophe Beck

CHAIRMAN & CEO

Thanks to the best sales and service team in the business, we delivered record sales, record earnings per share, record operating income margins and record free cash flow by taking care of our customers.

- Christophe Beck

DELIVERING FOR OUR SHAREHOLDERS

A s we reflect on another outstanding year for Ecolab, the Board of Directors would like to extend our heartfelt thanks to the company's 48,000 associates. Under the capable leadership of Christophe and his executive team, Ecolab has consistently met high expectations, delivered positive impacts for our customers, and provided sustained returns for its shareholders.

By the end of the year, the company achieved record sales, adjusted earnings per share, operating income margins and free cash flow. This performance underpinned the Board's confidence as we approved a 14% increase in our quarterly cash dividend - the 33rd consecutive annual dividend increase.

We have made positive changes to the Board, adding new directors with a range of perspectives and expertise to support the company's growth ambitions.

In February 2024, we welcomed Judson Althoﬀ as an independent director and member of the Audit and Finance Committees. With Ecolab building a new global high-tech business and furthering our digital programs, Judson's global executive and technology experience at Microsoft has proven to be a valuable addition.

In February 2025, we welcomed Michel Doukeris, Chief Executive Oﬀicer of AB InBev, as an independent director. Michel's experience leading a major global company and his deep knowledge of complex operations, world-class branding of innovative products and winning in consumer industries will make him a tremendous asset to the Board.

We also look forward to welcoming another independent director in Marion Gross, currently Executive Vice President and Global Chief Supply Chain Oﬀicer at McDonalds. Marion has extensive international business expertise with specialist knowledge of global supply chains and the foodservice industry. Marion plans to retire from her current executive role prior to her election to the Ecolab Board.

Together, these directors will oﬀer a wealth of knowledge and insights that will help guide Ecolab's growth strategy.

In February 2025, Arthur Higgins informed the board that he would not stand for re-election at the annual meeting. Arthur has provided so much to our Board and to Ecolab, consistently oﬀering independent advice based on his knowledge of the healthcare and life sciences sectors. He has been a valued colleague, and we thank him for his many significant contributions to the company.

As Lead Independent Director, I work to serve the best interests of Ecolab's shareholders by ensuring that your independent directors provide critical oversight and are closely involved in the company's major strategic decisions.

On behalf of the Board, I have also worked to represent your interests by actively seeking and responding to feedback from our investors to align Ecolab's strategies with their interests and expectations.

Finally, the Board would like to thank you for your continued confidence in our company. We have the privilege of witnessing firsthand the many reasons why that confidence is well placed. Ecolab has a history of delivering innovation and high performance, even in uncertain times. The company has the right strategy, leadership and structure to build on its record year and deliver continued shareholder returns.

David W. MacLennan

LEAD INDEPENDENT DIRECTOR

COMPANY OVERVIEW

A TRUSTED PARTNER

Ecolab's innovative solutions improve operational eﬀiciencies and sustainability for customers in the food, healthcare, life sciences, hospitality and industrial markets.

STRONG STOCK PERFORMANCE IN 2024

A n innovative and trusted partner at millions of customer locations, Ecolab Inc. is a global sustainability leader oﬀering water, hygiene and infection prevention solutions and services that protect people and the resources vital to life.

Building on a century of innovation, Ecolab's approximately 48,000 associates deliver comprehensive science-based solutions, data-driven insights and world-class service to advance food safety, maintain clean and safe environments and optimize water and energy use. Ecolab's innovative solutions improve operational eﬀiciencies and sustainability for customers in the food, healthcare, life sciences, hospitality and industrial markets in more than 170 countries around the world.

ECL

From hotels, restaurants and healthcare facilities to food and beverage plants, manufacturing plants and power generation facilities across the globe, Ecolab's more than 25,000-strong sales-and-service team, the industry's largest and best trained, uses innovative solutions, digital technologies and unmatched insights to help solve the most pressing challenges our customers face. Many of the world's leading companies rely on Ecolab to help ensure product quality and guest satisfaction, maintain brand reputation and achieve their operational and sustainability goals.

Ecolab is headquartered in St. Paul, MN, and its common stock is listed under the ticker symbol ECL on the New York Stock Exchange. For more information, visit ecolab.com or call 1.800.2.ECOLAB. Follow us on LinkedIn @Ecolab, Instagram @Ecolab_Inc and Facebook at @Ecolab.

FORWARD-LOOKING STATEMENTS AND RISK FACTORS

We refer readers to the company's disclosures titled "Forward-Looking Statements" and "Risk Factors," which begin on page 16 of Form 10-K.

CONTINUING OPERATIONS - MILLIONS, EXCEPT PER SHARE

PERCENT CHANGE

2024

2023

2022

2021

2020

2024

2023

2022

2021

Net Sales

15,741.4

$15,320.2

$14,187.8

$12,733.1

$11,790.2

11%

Net Income from Continuing Operations

Attributable to Ecolab

2,112.4

1,372.3

1,091.7

1,129.9

967.4

54%

26%

-3%

17%

Net Income from Continuing Operations as a Percent of Sales

13.4%

9.0%

7.7%

8.9%

8.2%

Diluted Earnings per Share from Continuing Operations

7.37

4.79

3.81

3.91

3.33

54%

26%

-3%

17%

Adjusted Diluted Earnings per Share from Continuing Operations (non-GAAP measure)

6.65

5.21

4.49

4.69

4.02

28%

16%

-4%

17%

Diluted Weighted-Average Common Shares Outstanding

286.6

286.5

286.6

289.1

290.3

-1%

Cash Dividends Declared per Common Share

2.36

2.16

2.06

1.95

1.89

Cash Provided by Operating Activities from Continuing Operations

2,813.9

2,411.8

1,788.4

2,061.9

1,741.8

17%

35%

-13%

18%

Capital Expenditures

994.5

774.8

712.8

643.0

489.0

28%

11%

31%

Ecolab Shareholders' Equity

8,757.3

8,044.7

7,236.1

7,224.2

6,166.5

11%

17%

Return on Beginning Equity

26.3%

19.0%

15.1%

18.3%

11.1%

Total Debt

7,564.9

8,181.8

8,580.4

8,758.2

6,686.6

-8%

-5%

-2%

31%

Net Debt to EBITDA (non-GAAP measure)

1.7

2.4

3.2

3.4

2.4

Total Assets

$22,387.8

$21,846.6

$21,464.3

$21,206.4

$18,126.0

17%

Adjusted earnings per share amounts exclude the impact of special gains and charges, discrete taxes and the impact of the Purolite acquisition.

SALES BY REGION 2024

(PERCENT OF TOTAL SALES)

BUSINESS MIX 2024

(PERCENT OF TOTAL SALES)

BUSINESS HIGHLIGHTS

EFFICIENCY UNLOCKED

Ecolab's new DishIQ™ program combines digital capabilities with proprietary data science models to create an adaptive dish machine that solves these challenges.

Increasing customer productivity while delivering best in class performance

Dish machines are a crucial component in any commercial kitchen, requiring consistent operation every shift. Variables like pre-scraping procedures, water conditions and the number of guests change every day and our customers need solutions beyond what traditional dish machines can deliver. They expect a solution that adapts automatically to their unique needs delivering the best possible cleaning performance. Our customers also continue to experience a combination of high labor, water and energy rates and expect next generation solutions to reduce their dish machine's cost of operation.

Ecolab's new DishIQ™ program combines digital capabilities with proprietary data science models to create an adaptive dish machine that solves these challenges. Remote monitoring and predictive maintenance models identify critical issues that our service associates can fix before they cause costly downtime or rewash.

A new customer-facing application provides real time operational updates and proactively identifies when key operational tasks are needed, supported by built in training. This enables our customers to focus on their operational priorities such as inventory, staﬀing, guest experience, and food quality.

Ecolab's DishIQ™ program delivers incredible value for our customers. The combination of technology, equipment and service with our best-in-class chemistry enhances productivity, delivers exceptional performance and creates eﬀicient and reliable operations for the long-term growth and success of our customers.

Pest Elimination delivers innovation and value for customers

After exceeding $1 billion of revenue for the first time, Ecolab's Pest Elimination business continued its strong growth trajectory in 2024 by delivering value for a wide range of commercial customers across 30 countries globally.

Underpinning confidence in the segment's growth is our continued investment in Pest Intelligence, an innovative program created by Ecolab that reduces pest activity for our customers. The impact of Pest Intelligence is realized through our highly-trained service professionals who use actionable insights from advanced data-driven models to solve customer problems.

Our unique, comprehensive Pest Intelligence program builds from a successful history of using a science-based approach to achieve a high level of service quality. The program leverages sensor technology to enhance

Our unique, comprehensive Pest Intelligence program builds from a successful history of using a science-based approach to achieve a high level of service quality.

- ECOLAB PEST ELIMINATION

our Pest Elimination service through advanced analytics, predictive modeling, and stronger customer partnerships. Our associates extend their reach and positive customer impact through root cause analysis and actions taken to prevent future pest activity.

The Pest Intelligence program will be core to the business's continued digital transformation. Designed to predict pest risk, proactively address issues, and ultimately exceed customer expectations, we are energized by the growth of our Pest Elimination business and how new technologies improve our support of customers around the world.

Future-focused innovation in Life Sciences

Ecolab continues to elevate its Life Sciences oﬀering for customers, introducing new innovations to deliver cost eﬀiciencies and accelerate the production of life-saving drugs for patients worldwide.

Artificial Intelligence: Driving water demand, delivering water solutions

The AI revolution is driving demand for data center capacity, and with it, the demand for natural resources. Water plays an essential role in data center cooling, transferring heat 23.5 times more eﬀectively than air. This growing sector has created an urgent need for sustainable solutions that disconnect AI's rapid growth from the strain it traditionally places on natural resources.

In 2024, Ecolab collaborated with Digital Realty, a leading global provider of data center co-location and interconnection solutions, to pilot AI-driven solutions that help minimize water use, maintain system performance and protect data center operations from water-related risks.

Our collaborative eﬀorts are helping Digital Realty evaluate water practices across its sites and implement digitally enabled monitoring and measurement tools to help track and manage progress.

Ecolab is proud to innovate AI-powered water solutions with Digital Realty, showcasing how next-generation technology can elevate water stewardship across industries.

DurA Cycle™

Ecolab also launched DurA Cycle™ Chromatography Resin, a protein A purification resin designed for large-scale biologic manufacturing of monoclonal antibodies. DurA Cycle™ resin is crucial for biologic drug developers focused on cost eﬀiciency. It oﬀers high productivity, lower aggregation and reduced processing time, increasing manufacturing eﬀiciencies and a lower cost per gram of the commercial drug product. DurA Cycle™ resin is the latest addition to Ecolab's Purolite Resins toolbox, addressing the complex purification of modern biologic drugs.

Launched in 2024, our innovative CLEEN Technology Program oﬀers digital solutions for environmental control, cleaning, and validation. An enterprise-level solution, CLEEN helps pharmaceutical companies reduce compliance risks, enhance quality, and boost revenue by digitizing workflows and minimizing downtime between production runs. This increased eﬀiciency allows our customers to reallocate labor to other valuable plant needs.

- CLEEN TECHNOLOGY PROGRAM

CORPORATE RESPONSIBILITY

INTEGRITY & PURPOSE

Doing Business The Right Way

We lead with our values and are driven to uphold ethical, inclusive and responsible policies and practices wherever we operate. Our values and commitment to integrity are why we're trusted by our customers, our partners and our communities. Ecolab is managed under the direction of our 13-person board of directors, comprised of members with diverse business backgrounds and experiences, and we have transparent disclosure of our corporate governance practices.

The company also has formal policies and procedures in place to ensure we uphold the highest legal and ethical standards, regardless of when and where we conduct business. The Ecolab Code of Conduct is a guide to the principles and ethics that the company expects all employees to adhere to when making decisions and acting on its behalf. More than a policy, the Code of Conduct serves as the foundation of our success. The values reflected in the Code of Conduct help us continue to succeed in an increasingly competitive global marketplace.

Our Impact Within Our Company

We're committed to an inclusive culture where all associates belong and are encouraged to reach their full potential. We seek to foster an engaged workforce that reflects our longstanding value of working together to integrate diverse perspectives to challenge ourselves, reach our goals and do what's right. And we endeavor to maintain vendor relationships that reflect Ecolab's commitment to supporting all communities.

Our Impact Within Our Communities

In keeping with our company's culture of giving, we focused on giving back and making a positive impact, something that is always at the heart of our ongoing work in the community. And our associates delivered during 2024 with a 16 percent increase in participation compared to the prior year.

In 2024:

• We had associates in 56 countries donate and/or volunteer their time with an impact value of $5 million to our communities.

• 7,460 associates donated to and/or volunteered for causes that matter to them.

• We recorded more than 49,600 volunteer hours, valued at more than $1.66 million, a value determined by the Independent Sector.

• We awarded more than $1.7 million in grants to organizations supporting our global team and individual employee volunteerism.

And we contributed our support to the communities where we live and work through a variety of initiatives including cash grants to nonprofits, product donations to communities in need and employee volunteerism.

In 2024 we:

• Continued our foundation giving through grants totaling $8.8 million to global nonprofit organizations.

• Continued to grow giving in one of our key initiatives, conserving water and providing education around healthy hygiene around the world through nonprofit partnerships, global philanthropy and employee volunteerism. Since 2014, we've donated more than $7.9 million to global organizations and positively impacted water projects, most recently in Chile and the western United States.

• Donated more than $7.9 million worth of products that weighed more than 2 million pounds during numerous disasters throughout the year.

In keeping with our company's culture of giving, we focused on giving back and making a positive

impact, something that is always at the heart of our ongoing work in the community.

- OUR IMPACT WITHIN OUR COMMUNITIES

CUSTOMER CASE STUDIES

POWERING CHANGE

HELPING LOTTE CHEMICAL CLEAR THE AIR TO ACHIEVE ITS ENVIRONMENTAL IMPACT GOALS

Insights

Annual Savings

Total Value Delivered

$15.8M

Lotte Chemical, based in Seoul, South Korea, is one of the world's largest chemical companies. It manufactures synthetic resins and other chemical products used in materials such as polystyrene, a versatile plastic commonly used in food packaging, appliances, toys and other goods.

Actions

As part of its eﬀorts to create a better, more sustainable future, Lotte Chemical wanted to source more environmentally conscious chemistry solutions. They chose the dual-component PRISM™ antifoulant program developed by Nalco

Water, Ecolab's water and process management business.

Testing and a rigorous technical evaluation demonstrated that the Ecolab solution performed as well as hazardous alternatives, with a significant reduction in nitrogen oxides. As a result, Lotte Chemical implemented the antifoulant program to help protect critical assets and increase the eﬀiciency of its manufacturing process.

Outcomes

In addition to the environmental benefits that resulted from the switch to the Ecolab program, Lotte Chemical avoided a large capital expenditure that would have been required to meet the stronger emission standards being set for alternative chemistries by the Korean Ministry of Environment. Additionally, it enhanced operational eﬀiciency by substantially reducing the need for urea, a raw material used in the chemistry manufacturing process.

Ultimately, the new approach helped Lotte Chemical reduce costs, pursue a more sustainable solution, and enhance plant and operator safety.

Disclaimer

Ecolab Inc. published this content on March 25, 2025, and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on March 25, 2025 at 00:30:01.875.