Ecolab Reports $1.2B Loss for 2020
St. Paul-based Ecolab Inc. was not immune to the economic fallout of Covid-19. The company reported 2020 sales of $11.8 billion, a 6 percent drop compared to 2019. The company’s fourth quarter sales of $3.1 billion were also down 6 percent compared to a year ago.
The bottom line showed more pain. Ecolab posted a $1.2 billion loss for 2020, due to losses from discontinued operations. Before taking those losses into account, Ecolab saw $967 million in net income from continuing operations.
The losses stemmed from Ecolab’s unloading of its Upstream energy business, which was finalized in June 2020. On the books those losses became “discontinued operations.” The move had first been announced in February 2019.
The company’s biggest news of the year was likely the retirement of long-serving CEO Doug Baker after 16 years at the helm of the company. Christophe Beck took over as president and CEO on Jan. 1. Baker, who had a stellar reputation for leading Ecolab’s business, retains his role as chairman of the company’s board of directors.
“We had a solid business performance during the fourth quarter in the face of significant Covid-19 related end market restrictions that were more substantial and widespread than anticipated,” said Beck in a statement on the results. “Our underlying business continued its sequential improvement as sales trends remained stable and operating income further improved, driven by new business and customer penetration gains, along with continued pricing and lower costs.”
During the third quarter of 2020, the company announced an expansion of its “Ecolab Efficiency Initiative” – a restructuring aimed at saving money over the long haul. On Tuesday, the company added a new element billed as the Institutional Advancement Program.
In its Tuesday financial filing, the company noted: “Ecolab expects that these restructuring charges will be completed by 2023, with total anticipated costs of $80 million ($60 million after tax). The costs are expected to be primarily cash expenditures for severance costs and facility closures.”
While things are looking up on the long-term horizon, uncertainty remains.
“As we enter 2021, we expect Covid-19 will continue to have a significant effect on the economy and our end markets, with its primary impact in the early part of the year,” said Beck in a statement. “We expect to see the beginning of the Covid-19 recovery in our global end markets starting in the second quarter but believe it will take several quarters to fully realize a new normal.”
Like many other companies, Ecolab is not currently providing forecasts of quarterly or annual results to Wall Street.