ECL Ecolab 10-Q 2026-09-30 section summaries

Ecolab (ECL) — Q3 and first nine months of 2026

Consolidated results

Q3 sales grew 12.7% and 9M sales 10.9%. Despite higher operating income, Q3 net income declined as net interest expense more than doubled, reflecting the acquisition-related increase in debt. For 9M, net income was slightly higher than the prior year. Lower diluted share counts supported per-share results.

Q3 segment performance

Segment sales and operating income below are at fixed currency rates; prior-period figures are recast for Ecolab’s revised segment structure.

Corporate includes acquisition-related intangible amortization and special charges; its special charges were $81.7 million in Q3 2026 versus $24.3 million in Q3 2025. Segment operating income less the corporate loss yields fixed-rate consolidated operating income of $812.3 million versus $762.7 million. Actual currency translation brought reported GAAP operating income to $810.5 million versus $760.2 million. Global Water’s results include CoolIT Systems from Q3.

Cash flow — first nine months

Working-capital cash use increased: accounts receivable used $457.1 million versus $150.3 million, and inventory used $199.0 million versus $37.6 million. Cash was $722.3 million at September 30, 2026, compared with $1,955.8 million a year earlier.

Balance sheet and financing

Net intangible assets comprise $1,230.0 million of non-amortizing trade names and $3,868.5 million of net amortizing intangibles; the latter include customer relationships, patents, trademarks and other technologies. Goodwill and other intangibles together exceeded Ecolab shareholders’ equity, resulting in tangible common equity of negative $7,362.2 million.

The CoolIT acquisition drove much of the increase in debt, goodwill and intangibles. Ecolab paid $4,627.2 million cash, net of cash acquired, for CoolIT on July 2, 2026; preliminary purchase accounting recorded $1,755.7 million of identifiable intangibles and $3,251.1 million of goodwill, which is not expected to be tax deductible. Ovivo Electronics, acquired in December 2025 for $1,624.6 million net of cash acquired, added $1,258.1 million of goodwill and $516.7 million of identifiable intangibles; its purchase accounting remains preliminary. Total goodwill also reflects $153.6 million of prior-year acquisition adjustments and $40.9 million of currency translation and other changes. Ecolab recorded no goodwill or Nalco trade-name impairment.

In May, Ecolab issued $5.0 billion principal of fixed-rate notes to fund CoolIT and for general corporate purposes: $1.2 billion at 4.60% for three years, $0.9 billion at 4.80% for five years, $1.5 billion at 5.15% for seven years, and $1.4 billion at 5.35% for ten years. Debt fair value was $11,952.6 million, below its $13,183.8 million carrying amount. The $2.0 billion revolving facility had no borrowings, commercial paper outstanding was zero, and Ecolab reported compliance with debt covenants.

Other notable items and risks

Total special charges were $82.9 million in Q3 and $198.3 million in 9M 2026, versus $26.5 million and $87.9 million, respectively, in 2025. Acquisition and integration costs, primarily related to CoolIT and Ovivo, were $42.2 million in Q3 and $60.9 million in 9M. The expanded One Ecolab initiative is expected to incur $328 million of restructuring costs and $97 million of special charges by the end of 2027. Through September, cumulative restructuring charges were $261.4 million and cumulative special charges $72.0 million; the remaining restructuring liability was $63.2 million.

Intangible amortization expense increased to $106.2 million in Q3 from $76.6 million, and to $273.9 million for 9M from $226.5 million. The effective tax rate rose to 20.2% from 17.8% in Q3 and to 21.4% from 19.2% for 9M, primarily due to discrete items and special gains and charges. The estimated effect of the OBBBA was not material to income tax expense.

Ecolab uses derivatives to hedge currency, net-investment and interest-rate exposures, not for trading. At September 30, gross derivative fair-value assets and liabilities were $70.3 million and $311.5 million; after $64.7 million of offsets on each side, net assets were $5.6 million and net liabilities $246.8 million. It reported no expected counterparty nonperformance.

Ecolab described ordinary-course litigation and environmental matters as not currently expected to have a material adverse effect, while acknowledging adverse outcomes could produce material charges or cash-flow impacts. In litigation related to the TPC Group Port Neches explosion, more than 5,000 plaintiffs had asserted claims against Nalco; Ecolab reached a settlement in principle in July 2026 with substantially all remaining plaintiffs and said it expects any potential loss to be covered by insurance, subject to deductibles.

PwC performed a limited review of the unaudited interim financial statements, not an audit, and reported no awareness of material modifications needed for U.S. GAAP conformity.

Ecolab (ECL) — Q3 and first nine months of 2026

Ecolab delivered solid organic growth and higher adjusted operating profit in Q3, led by Water and Life Sciences. Reported margins and earnings were pressured by special charges and sharply higher interest expense following acquisitions. Nine-month sales and adjusted profitability also grew, while reported gross and operating margins remained below prior-year levels.

Consolidated results

Q3 organic sales rose 7%, from 5% pricing and 2% volume; acquisitions and divestitures added 6 percentage points to fixed-currency growth, while foreign exchange was neutral. For 9M, organic sales grew 5% (4% pricing, 1% volume); acquisitions and divestitures added 4 points and FX added 2 points to reported growth. Excluding special charges, FX and acquisitions/divestitures, organic gross margin was 44.9% in Q3 (44.8% prior year) and 44.6% for 9M (44.7%). Productivity and acquisition benefits helped lower SG&A as a share of sales to 25.1% from 25.9% in Q3 and 26.0% from 26.9% for 9M.

Adjusted operating income grew faster than reported operating income; Q3 adjusted and organic operating margins were 19.0% and 19.6%, respectively, versus 18.9% for each a year earlier. Nine-month adjusted and organic margins were 18.1% and 18.4%, versus 17.8%. Reported earnings were weighed down by $82.9 million of Q3 special charges ($26.5 million prior year) and $198.3 million for 9M ($87.9 million). Q3 charges included $42.2 million for acquisition and integration, $17.1 million for One Ecolab and $21.5 million of other charges. Nine-month charges included $60.9 million for acquisition and integration, $76.2 million for One Ecolab, $36.0 million of other charges and $17.5 million in cost of sales. Reported tax rates were 20.2% in Q3 and 21.4% for 9M, versus 17.8% and 19.2%; discrete tax items also shifted from net benefits in the prior-year periods to a $1.1 million Q3 benefit and $7.5 million 9M expense in 2026.

Segment performance

Q3 segment revenue and operating income below are at public currency; margins are fixed-currency.

Water organic sales grew 9%; High-Tech rose 63%, driven by microelectronics and data-center wins, while Food & Beverage grew 8%, Light Water 5%, Paper 6% and Heavy Water 4%. Acquisitions, including Ovivo Electronics and CoolIT Systems, contributed to reported growth. Institutional & Specialty organic sales increased 3%, supported by Institutional (+2%) and Specialty (+5%). Pest Elimination organic sales grew 8%, and Life Sciences grew 17%, led by bioprocessing, pharmaceuticals, personal care and purification. Life Sciences’ fixed-currency margin rose to 23.3% from 18.3%; Institutional & Specialty’s increased to 24.7% from 23.6%. Effective January 1, 2026, the former Light & Heavy Water segment was divided into Heavy Water, Light Water and High-Tech; Ecolab now has nine operating segments.

Cash flow, financial position and capital allocation

Higher net income, excluding noncash depreciation, amortization and deferred taxes, supported operating cash flow; $200 million of one-time incentive payments to CoolIT and Ovivo employees partly offset the increase. Investing outflows primarily reflected $4.7 billion of net cash used for acquisitions and affiliate investments, mainly CoolIT. Financing included $5.0 billion of long-term senior-note issuance, with maturities in 2029, 2031, 2033 and 2036. Ecolab repurchased $672 million of shares ($375 million prior year) and paid $629 million of dividends ($564 million).

At September 30, 2026, total assets were $31.1 billion versus $24.7 billion at December 31, 2025; liabilities were $20.7 billion versus $14.9 billion. Total debt rose to $13.192 billion from $8.2363 billion, and cash was $722.3 million versus $646.2 million. Net debt increased to $12.4697 billion from $7.5901 billion, taking net debt/TTM EBITDA to 3.1x from 2.0x. TTM EBITDA was $4.0168 billion versus $3.7654 billion. Cash included $610 million held outside the U.S.; $1.277 billion of notes payable and long-term debt was due within one year. Ecolab reported covenant compliance and no commercial-paper or credit-facility borrowings; its $2.0 billion revolving facility expires in March 2030.

Outlook and risks

One Ecolab is expected to incur $328 million of restructuring costs after tax and $97 million of other special charges before tax by the end of 2027, targeting $325 million of annualized continuing-operations savings by 2027; cumulative savings had reached $217 million. Geopolitical and trade uncertainty, conflict in the Middle East and supply disruptions have increased energy, raw-material, manufacturing and logistics costs. Ecolab began an energy surcharge in Q2 2026 and expects pricing, volume growth, savings and productivity to offset pressures, with the surcharge subject to change. About half of sales are outside the U.S.; Argentina, Türkiye and Egypt together represented about 1% of Q3 sales and assets, and Russia and Ukraine less than 1% of sales. Ecolab limits Russian operations to essential life-supporting businesses and may further reduce its presence.

The company’s fixed-currency, organic and adjusted measures exclude specified acquisition, divestiture and special-item effects and are not substitutes for GAAP measures. Forward-looking outcomes—including restructuring savings, acquisitions, cash flows and debt repayment—remain subject to execution, market, regulatory, geopolitical, supply-chain, currency, cybersecurity, environmental and other risks.

Ecolab manages foreign-exchange, interest-rate, and net-investment exposure in foreign operations using cross-currency swaps, foreign-currency forwards and options, interest-rate swaps, forward-starting interest-rate locks, and foreign-currency debt. The company states these instruments are not held for speculative or trading purposes. Further details on derivatives are referenced in Note 8 to the consolidated financial statements.

Disclosure Controls and Internal Control over Financial Reporting

As of September 30, 2026, management, including the CEO and CFO, concluded that disclosure controls and procedures were effective. No changes to internal control over financial reporting during Q3 2026 materially affected, or were reasonably likely to materially affect, those controls.

ERP upgrades covering supply-chain and certain finance functions are continuing, with phased rollout expected over several years. The upgrades are intended to improve the efficiency of financial and related transactional processes. Because they will affect processes within internal control over financial reporting, the company will need to test the effectiveness of the affected controls as implementation proceeds.

Risk Factors

The Form 10-Q refers readers to Item 1A of Ecolab’s 2025 Form 10-K, filed February 23, 2026, for risks that could materially affect performance or cause actual results to differ from expectations. It also directs readers to the Form 10-Q’s Forward-Looking Statements section on pages 47–48 for related disclosures. This section identifies no specific new or changed risks.