Ecolab forecasts strong 2012, as Nalco takeover costs hit Q1 results

By Rory Harrington

- Last updated on GMT

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Ecolab forecasts strong 2012, as Nalco takeover costs hit Q1 results
Ecolab’s year-on-year income almost halved in the first three months of 2012 after the firm revealed integration and restructuring costs following the acquisition of Nalco last year reached more than US$41m.

The global water, hygiene, safety and energy giant reported its net income fell from $93m in Q1 2011 to just under $50m a year later– a drop of some 47%.

The company said that excluding all the one-off costs its adjusted net income would have risen 40% to $150m

But the company was keen to stress that net sales had soared by 85% to a record $2.8bn thanks to the Nalco merger. Operating income increased 9% to $166m.

Strong top line momentum

Sales in it US Cleaning & Sanitizing operations rose 4% to $709m – with the food and beverage unit within this cited as being one of the engines for growth as sales rising 7%.

Sales for International Cleaning, Sanitizing and Other Services operations grew 3% to $733m in the period. Sales climbed by 5%, led by strong Latin America growth. Operating income increased 10% to $48m.

Global Water sales saw a 6% rise to $498m compared to Q12011, yield operating income of $43m.

Ecolab chairman and CRO, Douglas M. Baker, Jr., hailed the integration efforts and highlighted the delivery of what he claimed were “record business gains”.

"As a result, our top line momentum remains very strong,”​ he said. “Sales grew in every segment and in every region. Our new Global Energy business led the way with a truly standout quarter, and we also saw solid results in our Global Water, U.S. Institutional and worldwide Food & Beverage businesses. Regionally, both North America and Latin America strengthened compared with recent trends.”


The company expected 2012 to be a year of “strong performance” and one of “accelerated quarterly earnings gains, said Michael Monahan, senior vice president, External Relations, in a conference call.


JBT FoodTech - good results hit by freezer and chilling woes

Food processing giant JBT FoodTech posted strong Q1 results with year-on-year revenues climbing 9% to $116m.

The company said the growth was across most lines although the good performance was  ”partially offset by lower freezing and chilling equipment sales in Europe”.

In January this year, JBT FoodTech announced it would be cutting some 115 jobs as demand in Europe had dropped sharply. It said it would be transferring freezer and batch sterilization operations out of Sweden, where overhead costs were high, and relocating them to China or North America.

Despite these woes, the firm posted positive figures for the unit – as operating profits jumped 18% to $6.7m.

However, these results were also hit by “costs incurred in North America related to the learning curve for production of high capacity freezers and consulting costs for an operational efficiency project conducted in the quarter”,​ said the company.

The period also saw inbound orders of $147m – an increase of 10% compared to 2011 and a 20% jump on the previous quarter – thanks to strong demand for freezing, chilling and in-container processing equipment. 

Related topics Processing & Packaging

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