Ecolab predicts strong year despite tough market

Ecolab has predicted “another strong year” despite continued soft economic and market trends.

The firm said it would drive growth through product introductions, new account wins and better customer penetration.

Ecolab expects to deliver full year 2012 adjusted diluted earnings per share in the $2.96 to $3 range despite the delayed passage of the 2012 R&D tax credit in early January 2013.

The credit was expected to benefit Q4 2012 by $0.01 per share but due to the delayed approval by Congress, the $0.01 per share R&D tax credit benefit will now be recorded as a discrete tax item in Q1 2013 and not included in 2012 results.

Special gains and charges for the full year 2012 are expected to be a net charge of $0.60 per share.

Plan to drive growth

Douglas M. Baker, Jr., Ecolab's chairman and chief executive officer, said: "In spite of expected continued soft economic and market trends in 2013, as well as unfavorable pension expense due to lower interest rates, we plan on again driving growth using new product introductions, superior sales and service execution, new account wins, and better customer penetration.”

Baker added that they will focus on cost reductions, improved operating efficiency, and merger synergies to leverage top line gains and yield margin improvement.

"With our business focused on helping our customers deliver on fundamental global needs including clean water, safe food, abundant energy and healthy environments, we believe we are very well-positioned to deliver steady, above-average growth for 2013 and beyond.

“We have made and will continue to make the right investments in our business to further build our product and service capabilities as well as our business base so that we can better service our customers, and as a result of these, generate superior returns for our shareholders.”

Buying and selling

Ecolab expects 2013 adjusted diluted earnings per share, excluding special gains and charges and discrete tax items, to be in a $3.38 to $3.48 range, including the $0.03 per share dilutive impact of the Vehicle Care Division sale and excluding the accretive impact of the pending acquisition of Champion Technologies, a US-based chemical manufacturer.

Ecolab previously expected the acquisition to close by year end 2012 and to be accretive to 2013 earnings by $0.12 per share.

The firm said it remains confident the transaction will close in early 2013 but it is possible that it will not be completed in that time or at all.

It also acquired Mexico-based Quimiproductos, a manufacturer and provider of cleaning, sanitizing and water treatment products, in October last year to strengthen its position in Latin America.

Ecolab expects to announce final 2012 results on 26 February.