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• Organic Sales Growth: 4% in Q4, driven by consistent volume growth and value pricing.

• U.S. Organic Sales Growth: Mid-single digits, with the U.S. being the most profitable region.

• Global Sales Growth: Low-single digits outside the U.S., driven by resilient demand and value pricing.

• Organic Operating Income Margin (Q4): Increased by 150 basis points.

• Full Year Organic Operating Income Margin: 16.8%, up 290 basis points from the previous year.

• Expected Earnings Growth (2025): 12% to 15%.

• Currency Translation Impact (2025): Expected 3% unfavorable impact on reported sales growth and 4% on adjusted EPS growth.

• High-Tech Business Sales: Averaged over $300 million, with operating income margins above 20%.

• CapEx to Sales (2025): Expected to be around 7%.

• Free Cash Flow: Record levels achieved.

• Dividend Increase: 14% increase in quarterly cash dividend declared in December.

• Share Buybacks (2024): $1 billion of Ecolab stock repurchased.

• Warning! GuruFocus has detected 7 Warning Signs with ECL.

Release Date: February 11, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Ecolab Inc (NYSE:ECL) achieved record sales, earnings, margins, and free cash flow in 2024, demonstrating strong financial performance.

• The company reported a solid 4% organic sales growth in Q4, driven by consistent volume growth and value pricing, particularly in the United States.

• Ecolab Inc (NYSE:ECL) increased its organic operating income margin by 150 basis points in Q4, reflecting effective margin management.

• The company is well-positioned to leverage growth opportunities in high-tech sectors like data centers and microelectronics, with strong business pipelines.

• Ecolab Inc (NYSE:ECL) plans to report digital sales in 2025, highlighting its focus on high-growth, high-margin opportunities in digital and AI capabilities.

Negative Points

• Currency translation is expected to have a 3% unfavorable impact on reported sales growth and a 4% impact on adjusted EPS growth in 2025.

• The pest elimination segment faced earnings headwinds due to accidents, impacting operating income.

• The company anticipates low-single-digit inflation for delivered product costs in 2025, which could pressure margins.

• Ecolab Inc (NYSE:ECL) expects to increase its capital expenditure to 7% of sales in 2025, which may impact free cash flow.

• The healthcare business, now integrated into the institutional segment, has a lower margin profile, potentially affecting overall segment margins.

Q & A Highlights

Q: Can you elaborate on the confidence in achieving the 20% operating income margin target by 2027 and the primary drivers behind this expansion? A: Christophe Beck, CEO, expressed confidence in reaching the 20% OI margin by 2027, citing a steady trajectory with significant margin improvements in recent years. Key drivers include top-line momentum, value pricing, innovation, and productivity driven by technology. The company expects to cross the 18% OI margin in 2025, with new growth engines like data centers and life sciences contributing to future margin expansion.