ECOLAB INC. (ECL) Q4 2024 Earnings Summary

Executive Summary

Q4 delivered steady top-line and strong margin progress: revenue $4.01B (+2% YoY) and adjusted EPS $1.81 (+17% YoY), with organic OI margin +150 bps to 17.4% as value pricing and new business offset growth investments .
Results modestly beat consensus: revenue $4.01B vs $3.99B estimate and adjusted EPS $1.81 vs $1.80 estimate; FY24 adjusted EPS finished at $6.65, above the $6.64 consensus (beats in bold in tables below; S&P Global consensus) *.
2025 outlook: adjusted EPS $7.42–$7.62 (+12–15% YoY) despite ~4% FX headwind to EPS growth; Q1 2025 adjusted EPS $1.47–$1.53 (+10–14% YoY); company expects faster One Ecolab savings and “slightly higher” value pricing to offset FX pressure .
Key stock reaction catalysts: rising confidence in 20% OI margin by 2027; high‑margin growth engines (data centers, microelectronics, Life Sciences) and Ecolab Digital disclosure starting in 2025; plus accelerated One Ecolab savings pacing .

What Went Well and What Went Wrong

What Went Well
- Margin expansion: Q4 organic OI margin rose to 17.4% (+150 bps YoY) on solid sales growth and lower delivered product costs, while reported gross margin expanded 130 bps to 43.3% .
- U.S. strength and execution: CEO emphasized the U.S. (over half of sales) as the most profitable region with strong growth; reiterated confidence in 12–15% EPS growth for 2025 and path to 20% OI margin by 2027: “I think that we should cross the 18% OI margin this year… get to 20% by 2027” .
- Growth engines: High‑tech business >$300M sales with OI margin well above 20%; AI-driven shift to liquid cooling in data centers and water circularity in fabs support multi‑year opportunities; Digital to be reported starting 2025 (top line) .
What Went Wrong
- Pest Elimination profitability: Organic OI down 15% due to “an unfortunate and unusual spike in accidents” and investment in digital pest intelligence; management expects stabilization in Q1 2025 and reacceleration thereafter .
- FX headwinds: 2025 guidance embeds ~3% sales and ~4% EPS growth headwinds from currency translation, requiring stronger value pricing and faster One Ecolab savings to offset .
- Healthcare (reported) still lapping portfolio moves: Reported sales/OP down on the divestiture of Surgical Solutions; while organic growth improved to +3% and organic OI +47%, reported metrics remain pressured until the portfolio reset fully annualizes .

Financial Results

Headline results vs prior periods and estimates

Metric	Q4 2023	Q3 2024	Q4 2024	Vs YoY	Vs QoQ	Vs S&P Consensus
Revenue ($B)	$3.94	$4.00	$4.01	+2%	+0.2% (calc from cited)	$4.01 vs $3.99 estimate – Beat*
Diluted EPS (GAAP)	$1.41	$2.58	$1.66	+18%	down vs Q3 (gain in Q3)	N/A
Adjusted EPS (Non‑GAAP)	$1.55	$1.83	$1.81	+17%	-1% vs Q3	$1.81 vs $1.80 estimate – Beat*

Margins

Margin	Q4 2023	Q3 2024	Q4 2024
Gross Margin (GAAP)	42.0%	43.4%	43.3%
Operating Margin (GAAP)	15.0%	26.1% (includes gain on Surgical sale)	14.6%
Organic OI Margin (Non‑GAAP)	15.9%	17.9%	17.4%

Segment performance – Q4 2024 (Fixed currency unless noted)

Segment	Sales ($MM)	YoY %	OI ($MM)	YoY %	OI Margin	Organic OI Margin
Global Industrial	$2,066.5	4%	$374.6	11%	18.1%	18.2%
Global Institutional & Specialty	$1,367.3	6%	$288.4	18%	21.1%	21.1%
Global Healthcare & Life Sciences	$322.1	(23%)	$40.7	(14%)	12.6%	12.6%
Global Pest Elimination	$295.2	8%	$46.3	(15%)	15.7%	16.0%

KPIs

KPI	Q4 2024	FY 2024
Cash from Operations ($MM)	$766.7	$2,813.9
Free Cash Flow ($MM)	$407.0	$1,819.4
Capex ($MM)	$359.7	$994.5
Net Debt / EBITDA (TTM)	1.7x	1.7x
Adjusted Tax Rate	18.2%	19.3%

Estimate comparisons (S&P Global)

Item	Period	Actual	Consensus	Surprise
Revenue ($B)	Q4 2024	$4.01	$3.986*	+$0.02B – Beat*
Adjusted EPS	Q4 2024	$1.81	$1.80*	+$0.01 – Beat*
Adjusted EPS	FY 2024	$6.65	$6.64*	+$0.01 – Beat*

Note: Asterisked consensus values are from S&P Global; Values retrieved from S&P Global.*

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Adjusted EPS	FY 2025	Not previously quantified; reiterated 12–15% EPS growth trajectory	$7.42–$7.62; +12–15% YoY, ~4% FX drag to EPS growth	Initiated numeric range; consistent with growth target
Adjusted EPS	Q1 2025	N/A	$1.47–$1.53; +10–14% YoY; ~4% FX drag to EPS growth	New
FX Impact	FY 2025	N/A	~3% drag to sales growth; ~4% drag to EPS growth	New disclosure
Special Charges	FY 2025	N/A	~$0.25–$0.30 per share (restructuring)	New
SG&A leverage	FY 2025	N/A	20–30 bps leverage expected; near lower end given FX; Q1 slightly negative	New detail
Adjusted Tax Rate	FY 2025	N/A	~20–21%	New detail
Dividend	Next payable	Prior $0.57/qtr in 2024 (14% raised in Dec per CEO)	Declared $0.65 per share (April 15, 2025)	Raised/maintained trajectory

Consensus context for guidance (S&P Global): FY25 consensus $7.53; ECL midpoint $7.52 (in line). Q1’25 consensus $1.50; guide midpoint $1.50 (in line). Values retrieved from S&P Global.*

Earnings Call Themes & Trends

Topic	Q2 2024 (Q‑2)	Q3 2024 (Q‑1)	Q4 2024 (Current)	Trend
AI / High‑Tech (data centers, microelectronics)	High‑tech double‑digit growth in “light water”	Continued wins; segment commentary stayed firm	>$300M sales; OI margin >20%; liquid cooling shift creates large opportunity	Accelerating; strategic focus
One Ecolab program	Launched; $225M charges, $140M savings by 2027	Growth+margin lever; 2025 EPS growth 12–15% reiterated	Savings “slightly faster than expected”; 40–50% of savings in 2025	Execution accelerating
Delivered Product Costs	Moderately favorable; gross margin +420–440 bps YoY	Tailwinds easing into Q4	2025 DPC inflation low single digits; offset by efficiencies	Normalizing
Pricing	+3% in Q2 (value pricing)	+2% in Q3	Pricing +2% in Q4; “slightly higher” in 2025 to offset FX	Sustained 2–3%
Regional Demand	Broad; APAC/IMEA strong in Inst’l	U.S. strong; mixed elsewhere	U.S. very strong; rest uneven but offset by wins	U.S. outperformance
Pest Elimination	+9% sales; OI +20%	+8% sales; OI +6%	+7% sales; OI –15% on accidents/investments	Temporary OI headwind in Q4
Healthcare/Life Sciences	Flat organic; Life Sciences improving	Organic +1%; LS up; Healthcare flat	Organic +3%; LS up; Healthcare modest	LS improving; portfolio reset

Management Commentary

Strategic message: “We expect adjusted diluted EPS to increase 12% to 15% [in 2025], even with organic sales growth improving slightly… We also plan to build and invest… Ecolab’s global high‑tech business and Ecolab Digital” .
Margin trajectory: “I think that we should cross the 18% OI margin this year… and… get to 20% by 2027” driven by top‑line momentum, 2–3% value pricing, innovation and productivity .
Digital monetization: “Today, it’s a few hundred million… we’ll report digital sales in 2025… leases, subscriptions, and consumption” .
High‑tech opportunity: “Rise of AI… shift from air‑cooled to liquid‑cooled servers… we are uniquely placed… fluid management… water recycling in fabs” .
Capital allocation: “CapEx to ~7% of sales in 2025… investments in Ecolab 3D/Trasar, AI Dishmachine, pest intelligence… $1B buybacks in 2024; 14% dividend increase in December” .

Q&A Highlights

Path to 20% OI margin by 2027: Drivers are steady top‑line, 2–3% value pricing, innovation, and technology‑driven productivity; target 18% in 2025 .
2025 volume/pricing cadence and tariffs: Volume around ~2% with 2–3% pricing; tariffs low impact as ~92% of products produced locally; surcharge mechanism available if needed .
Delivered Product Costs: Expect low single‑digit inflation in 2025; plan to offset with supply chain efficiencies .
Pest accidents: Majority of OI decline due to accidents; expect some impact in Q1 then abate .
One Ecolab savings: ~40–50% of $140M savings to come in 2025; growth‑led initiative .
Taxes/SG&A: 2025 adjusted tax rate 20–21%; SG&A leverage 20–30 bps for 2025, near lower end given FX; Q1 slightly negative .
Segment realignment: Healthcare moves into Institutional; Life Sciences to standalone; INS remains ~20% OI business; LS investing for mid‑20s+ OI longer‑term .

Estimates Context

Q4 2024: Revenue $4.01B vs $3.99B consensus – Beat; Adjusted EPS $1.81 vs $1.80 – Beat (small, but positive). Values retrieved from S&P Global.*
FY 2025 guidance vs consensus: Midpoint $7.52 vs $7.53 consensus – in line; Q1 2025 guide midpoint $1.50 vs $1.50 consensus – in line. Values retrieved from S&P Global.*
Implications: Estimate revisions likely modestly upward on small Q4 beat and 2025 savings pacing, but FX headwind and Pest OI normalization could cap near‑term upward revisions absent clearer acceleration in volume or pricing .

Key Takeaways for Investors

Margin story intact and de‑risked: organic OI margin up 150 bps in Q4; management increasingly confident in 20% by 2027, targeting ≥18% in 2025 .
Guidance credible despite FX: 2025 adj EPS +12–15% with explicit plan (pricing + savings) to offset 3%/4% FX headwinds to sales/EPS .
Structural growth vectors: Data centers (liquid cooling), microelectronics (water circularity), Life Sciences, and Digital (high‑margin, recurring) provide multi‑year growth optionality .
Near‑term watch items: Pest OI recovery after accident costs; LS momentum pace; DPC inflation pass‑through and SG&A leverage against FX headwinds .
Capital deployment supportive: Dividend raised (declared $0.65 payable Apr 15, 2025) and share buybacks underscore balance sheet capacity to fund growth and return cash .
Narrative likely to move the stock: Clear line‑of‑sight to higher margins, accelerating savings, and disclosure of Digital revenues beginning in 2025 .

Additional detail and source tables (press release 8‑K and supplemental slides)

Consolidated income statement and segment tables (Q4 2024)
Non‑GAAP reconciliations and margin bridges
Cash flow and leverage metrics

Asterisked consensus values are from S&P Global; Values retrieved from S&P Global.*

Citations:

Q4 2024 8‑K/press release:
Q4 2024 slides:
Q4 2024 earnings call transcript:
Q3 2024 8‑K:
Q2 2024 8‑K:
Dividend press release: