Ecolab Inc ECL
Q4 2012 Earnings Call Transcript

Transcript Call Date 02/26/2013

Operator: Welcome to the Ecolab Fourth Quarter 2012 Earnings Release Conference Call. At this time, all participants are in a listen-only mode. After the presentation, we will conduct a question-and-answer session. This call is being recorded. If you have any objections, you may disconnect at this time.

Now, I would like to turn the call over to Mr. Michael Monahan, Senior Vice President, External Relations. Sir, you may begin.

Michael J. Monahan - SVP, External Relations: Thank you. Hello everyone, and welcome to Ecolab's fourth quarter conference call. With me today is Doug Baker, Ecolab's Chairman and CEO. A copy of our earnings release and the accompanying slides referenced in this teleconference are available on Ecolab's website at

Please take a moment to read the cautionary statements on Slide 2 stating this teleconference and the slides include estimates of future performance. These are forward-looking statements and actual results could differ materially from those projected. Factors that could cause actual results to differ are discussed in the section of our most recent Form 10-Q under Item 1A Risk Factors, in our fourth quarter earnings release, and on Slide 2. We also refer you to the supplemental diluted earnings per share information in the release.

In addition as mentioned on Slide 2 of this conference call does not constitute an offer to sell or the solicitation of an offer to buy any securities. Also please note that in order to provide a meaningful comparison of our operating performance where applicable, actual results for the fourth quarter of 2012 are compared against pro forma results for the fourth quarter of 2011. The pro forma results are based on historical consolidated financial statements of Ecolab and Nalco, and were prepared to illustrate the benefits or the effects of our merger with Nalco. These pro forma statements are available on our website at, as well as our Form 8-K filed April 27, 2012, and selected portions are contained in our slides and press release.

Starting with an overview in Slide 3, we delivered strong results in the fourth quarter, despite continuing economic headwinds and higher delivered product costs. We leveraged improved sales volume growth, pricing and our synergy and cost efficiency work to produce our 10th year of double-digit adjusted EPS growth out of the last 11.

Looking ahead, we expect to continue to outperform our markets and show double digit earnings gains in the first quarter and the full year, as solid sales growth, appropriate pricing, innovation, synergies, and margin leverage more than offset increased delivered product costs.

Moving to some highlights from the fourth quarter and as discussed in our press release, reported fourth quarter earnings per share were $0.77. On an adjusted basis excluding special gains and charges and discrete tax items from both years, fourth quarter 2012 earnings per share increased 27% to $0.89.

The adjusted earnings per share growth was driven by volume and pricing gains, new products and new accounts which along with synergies and cost savings actions more than offset higher delivered product costs. We enjoyed strong gains in Global Energy, Latin America and our worldwide Kay operations. We continue to be aggressive focusing on top line growth. We're emphasizing our innovative product and service strengths to help customers get better results and lower costs, and through these drive new account acquisition across all of our customer segments.

Read our Earnings Call Transcript disclaimer.
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