Ecolab shares rose 0.8%, a roughly flat reaction to a quarter with 7% organic sales growth and expanding margins. Results varied by business: Life Sciences and Digital grew quickly, while Institutional & Specialty faced tougher industry trends and management said it was not satisfied with performance.
- Organic sales grew 7%; organic operating income rose 11%, and organic operating margin expanded to 19.6%.
- Organic gross margin was maintained despite significant commodity-cost inflation; management expects commodity costs to remain high and is relying on pricing and supply-chain discipline to offset the impact.
- Food & Beverage grew 8%, Light Water 5%, and Life Sciences 17%; Ecolab Digital sales increased 34%.
- Institutional & Specialty performance was described as consistent, but restaurant foot traffic in North America declined mid-single digits. Management plans to expand field sales and service and increase solution penetration.
- On a pro forma basis including CoolIT and Ovivo, management said Q3 sales would have grown high single digits and adjusted EPS mid-teens.
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