ECOLAB INC.

Ecolab is a global leader in water, hygiene and infection prevention solutions and services that protect people and the resources vital to life, with $16 billion in annual sales, 48,000 associates and customers in more than 170 countries and 40 industries ¹. The company helps protect one-third of the world's food production and a quarter of the power generated while delivering innovative solutions across food, healthcare, data centers, microelectronics, life sciences and hospitality ². Ecolab pursues a 'One Ecolab' enterprise selling strategy, built on the legacy of 'circle the customer – circle the globe', providing an array of innovative programs, products and services designed to meet the operational and sustainability needs of customers throughout the world ³. The company aims by 2030 to help protect 2 billion people from infections and enough drinking water for 1 billion people while enhancing business performance ⁴. In 2024, Ecolab helped customers conserve more than 226 billion gallons of water and avoid more than 4.6 million metric tons of greenhouse gas emissions ⁵.

Ecolab competes in markets led by a few large companies, with the rest served by smaller entities focusing on more limited geographic regions or a smaller subset of products and services ⁶. The company competes on the basis of demonstrated value, technical expertise, innovation, digital technology, chemical formulations, global customer support, detection equipment, monitoring capabilities and dosing and metering equipment ⁷. Within Global Institutional & Specialty and Global Pest Elimination, Ecolab competes with a small number of large companies selling directly or through distributors on a national or international scale, as well as numerous smaller regional or local competitors ⁸. The company believes it competes principally by providing superior value, premium customer support, training, service, and innovative and differentiated products to help customers protect their brand reputation and improve operational efficiency ⁹. Within Global Life Sciences, the business competes in the European market versus several mid-size and regional competitors and against two large and other mid-size or regional competitors in North America ¹⁰.

Ecolab generates revenue through the sale of products, equipment, services and leases across four reportable segments: Global Water, Global Institutional & Specialty, Global Pest Elimination, and Global Life Sciences ¹¹. The majority of revenue is from product and sold equipment and is recognized at the point in time when the obligations in the contract with the customer are satisfied ¹². Service and lease revenue is recognized when the services are provided, which is over time ¹³. The company's customer base is diverse, with no customer or distributor constituting 10 percent or more of consolidated revenues in 2025, 2024 or 2023 ¹⁴. Sales of warewashing products were approximately 13% of consolidated net sales in 2025 and 12% in 2024 and 2023 ¹⁵.

Global Water provides water treatment and process applications and cleaning and sanitizing solutions, primarily to large industrial customers within the manufacturing, food and beverage processing, transportation, chemical, primary metals and mining, power generation, global refining, petrochemical, pulp and paper industries ¹⁶. This segment consists of the Light & Heavy, Food & Beverage and Paper operating segments ¹⁷. Light & Heavy serves customers across industrial and institutional markets, including food and beverage, manufacturing and transportation, institutional clients, global high technology serving customers including data centers and microelectronics, and the power, chemicals, primary metals and mining and petroleum refining and fuels industries ¹⁸. Food & Beverage provides cleaning and sanitation products and water programs to facilitate the processing of products for human consumption, serving dairy plants, dairy, swine and poultry farms, breweries and soft-drink bottling plants, as well as meat, poultry and other food processors ¹⁹. Paper provides water and process applications for the pulp and paper industry, offering programs used in all principal steps of the papermaking process and across all grades of paper ²⁰. Global Water fixed currency sales were $7,679.9 million in 2025, $7,483.4 million in 2024, and $7,284.1 million in 2023 ²¹. Fixed currency operating income for Global Water was $1,263.9 million in 2025, $1,207.2 million in 2024, and $1,042.1 million in 2023 ²².

Global Institutional & Specialty consists of the Institutional and Specialty operating segments, providing specialized cleaning and sanitizing products to the foodservice, hospitality, lodging, government, education and retail industries ²³. Institutional provides specialized cleaners and sanitizers, infection prevention solutions, food safety products and equipment, and a range of other products and programs to hospitality and healthcare institutions ²⁴. Specialty supplies cleaning and sanitizing products and related items primarily to regional, national and international quick service restaurant chains and food retailers ²⁵. Global Institutional & Specialty fixed currency sales were $5,962.0 million in 2025, $5,979.4 million in 2024, and $5,779.4 million in 2023 ²⁶. Fixed currency operating income for Global Institutional & Specialty was $1,357.8 million in 2025, $1,202.2 million in 2024, and $856.5 million in 2023 ²⁷. Global Pest Elimination provides services designed to detect, prevent and eliminate pests, such as rodents and insects, in full-service and quick-service restaurants, food and beverage processors, hotels, grocery operations and other commercial segments ²⁸. Global Pest Elimination fixed currency sales were $1,219.2 million in 2025, $1,140.1 million in 2024, and $1,044.3 million in 2023 ²⁹. Fixed currency operating income for Global Pest Elimination was $237.1 million in 2025, $209.7 million in 2024, and $200.9 million in 2023 ³⁰. Global Life Sciences provides end-to-end cleaning and contamination control solutions to pharmaceutical and personal care manufacturers, including premium fluid treatment and purification solutions under the 'Purolite' brand name and decontamination systems under the 'Bioquell' brand name ³¹. Global Life Sciences fixed currency sales were $706.1 million in 2025, $670.5 million in 2024, and $650.8 million in 2023 ³². Fixed currency operating income for Global Life Sciences was $120.7 million in 2025, $91.8 million in 2024, and $118.9 million in 2023 ³³.

On December 16, 2025, Ecolab acquired Ovivo's electronics business for total consideration of $1.6 billion in cash ³⁴. Ovivo Electronics is a leading and fast-growing global provider of breakthrough ultrapure water technologies for semiconductor manufacturing and is reported within the Light & Heavy operating segment ³⁵. On July 30, 2024, the company announced the One Ecolab initiative, a restructuring plan to leverage digital technologies to realign functional work into global centers of excellence ³⁶. In February 2026, the company expanded the One Ecolab initiative and anticipates total restructuring costs of $334 million ($261 million after tax) or $0.91 per diluted share and special charges of $91 million ($71 million after tax) or $0.25 per diluted share by the end of 2027 ³⁷. The company anticipates annualized cost savings of $325 million in continuing operations by 2027, with $119 million of cumulative cost savings delivered ³⁸. During 2025, the company recorded restructuring charges of $117.0 million ($90.5 million after tax), or $0.32 per diluted share under One Ecolab ³⁹. On August 1, 2024, the company closed the sale of its global surgical solutions business, recording a gain on sale of $355.9 million ($257.7 million after tax) or ($0.90) per diluted share in 2024 ⁴⁰. Dividends declared per common share in 2025 were $2.68 per share ⁴¹. In December 2025, the company increased its quarterly cash dividend by 12% to $0.73 per share, representing the 34th consecutive annual dividend rate increase ⁴². The company has paid cash dividends on common shares for 89 consecutive years ⁴³. As of December 31, 2025, the company had approximately $8.2 billion in outstanding indebtedness, with approximately $1.5 billion in the form of floating rate debt ⁴⁴.

In 2025, Ecolab delivered record sales, operating income margin, adjusted diluted earnings per share, and free cash flows ⁴⁵. Reported sales increased 2% to $16.1 billion in 2025 from $15.7 billion in 2024 ⁴⁶. Organic sales increased 3% compared to the prior year ⁴⁷. Reported gross margin was 44.5% of sales for 2025, compared to 43.5% in 2024 ⁴⁸. Reported operating income decreased 2% to $2.7 billion in 2025, compared to $2.8 billion in 2024 ⁴⁹. Adjusted operating income, excluding the impact of special (gains) and charges and the Ovivo Electronics acquisition, increased 11% in 2025 ⁵⁰. Reported diluted EPS decreased 1% to $7.28 in 2025, compared to $7.37 in 2024 ⁵¹. Adjusted diluted EPS, which excludes the impact of special (gains) and charges, discrete tax items and the Ovivo Electronics acquisition, increased 13% to $7.53 in 2025 compared to $6.65 in 2024 ⁵². Cash flow from operating activities was $3.0 billion in 2025, compared to $2.8 billion in 2024 ⁵³.

Ecolab is pursuing growth through the Ovivo Electronics acquisition, which is a leading and fast-growing global provider of breakthrough ultrapure water technologies for semiconductor manufacturing, acquired for total consideration of $1.6 billion in cash ⁵⁴. This acquisition is expected to enhance the company's position in the global high-tech market, which reported strong double-digit sales growth in 2025 driven by data centers and microelectronics ⁵⁵. The company is also executing the One Ecolab initiative, a restructuring program leveraging digital technologies to realign functional work into global centers of excellence, which is expected to deliver annualized cost savings of $325 million in continuing operations by 2027 ⁵⁶. The company continues to invest in supply chain investments to secure supply and add new capacity in the Life Sciences business ⁵⁷.

Ecolab is focused on sustainability as a growth vector, aiming by 2030 to help protect 2 billion people from infections and enough drinking water for 1 billion people while enhancing business performance ⁵⁸. The company aims to help customers conserve more than 300 billion gallons of water annually by 2030 ⁵⁹. In 2024, the company helped customers conserve more than 226 billion gallons of water and avoid more than 4.6 million metric tons of greenhouse gas emissions ⁶⁰. The company has established climate-related goals to reduce operational GHG emissions by half by 2030 and achieve net zero by 2050, and has committed to move to 100% renewable energy by 2030 ⁶¹. The near-term science-based target aims to reduce absolute Scope 1 and 2 emissions by 50% from 2018 levels, and Scope 3 emissions by 25% from 2022 levels, by 2030 ⁶². The company's 2030 goals also include customer GHG emissions reduction of 6.0 million metric tons and water stewardship to restore over 50% of water withdrawal ⁶³.

The company's adjusted gross margin increased to 44.5% in 2025 from 43.5% in 2024, reflecting strong value pricing ⁶⁴. Adjusted operating income margin was 18.0% in 2025 compared to 16.6% in 2024 ⁶⁵. Organic operating income margin was 17.9% in 2025 compared to 16.4% in 2024 ⁶⁶. The company is undertaking the One Ecolab initiative, which anticipates total restructuring costs of $334 million ($261 million after tax) or $0.91 per diluted share and special charges of $91 million ($71 million after tax) or $0.25 per diluted share by the end of 2027, with anticipated annualized cost savings of $325 million in continuing operations by 2027 ⁶⁷. The company recorded restructuring charges of $117.0 million ($90.5 million after tax), or $0.32 per diluted share in 2025 under One Ecolab ⁶⁸.

Ecolab is continuing implementation of its ERP system upgrades, which are expected to continue in phases over the next several years, including sales, supply chain and certain finance functions, expected to improve the efficiency of certain financial and related transactional processes ⁶⁹. The company is making supply chain investments to secure supply and add new capacity in its Life Sciences business ⁷⁰. As of December 31, 2025, Ecolab employed approximately 48,000 employees, with the largest component being more than 25,000 sales and service employees, and innovation efforts supported by approximately 3,000 research, development, engineering and digital experts ⁷¹. Approximately 43% of employees are employed in North America, 21% in Europe, 12% in Latin America, 8% in Asia Pacific, 8% in India, Middle East and Africa, and 8% in Greater China ⁷².

Capital expenditures for environmental, health and safety projects worldwide were approximately $62 million in 2025 and 2024, and $46 million in 2023 ⁷³. Approximately $59 million has been budgeted globally for projects in 2026 ⁷⁴. The company's Board of Directors authorized the repurchase of up to 10,000,000 common shares as announced on November 3, 2022 ⁷⁵. During the fourth quarter of 2025, the company repurchased 1,514,808 shares at an average price of $263.9068 per share ⁷⁶. Dividends declared per common share in 2025 were $2.68 per share ⁷⁷. In December 2025, the company increased its quarterly cash dividend by 12% to $0.73 per share, representing the 34th consecutive annual dividend rate increase ⁷⁸.

The company faces headwinds from changes in global trade policies, including the imposition of tariffs, import and export restrictions, and retaliatory trade actions, as well as implications of geopolitical situations in Europe, the Middle East, China, and Russia, which have resulted in economic and demand uncertainty ⁷⁹. During 2025, new tariffs were imposed in the U.S. for imports from a broad range of countries and materials, and several countries implemented or proposed retaliatory tariffs on imports from the U.S., creating a heightened level of uncertainty for the business ⁸⁰. The company also faces risks from the war and energy crisis in Europe, which has resulted in a more challenging macroeconomic environment with significantly impacted costs and demand ⁸¹. Additionally, the company's significant non-U.S. operations expose it to global economic, political and legal risks, including currency fluctuations and devaluations, changes in international trade policies, and unsettled political conditions ⁸².

The company faces constraints from the increasing reliance on artificial intelligence technologies in products, services, and operations, which presents risks including operational and technical risks from flaws in AI algorithms, legal and regulatory risks from evolving AI regulations, reputational risks from AI-related incidents, competitive risks from competitors developing AI technologies more effectively, financial risks from resource-intensive AI development, and cybersecurity risks from AI system vulnerabilities ⁸³. The company also faces risks from information technology system failures, network disruptions and breaches in data security, as the size and complexity of its information technology systems make them vulnerable to failure, malicious intrusion and random attack ⁸⁴. Geopolitical tensions or conflicts, such as Russia's invasion of Ukraine, may further heighten the risk of cybersecurity attacks ⁸⁵.

The company's results are impacted by general worldwide economic factors, and changes in global trade policies including the imposition of tariffs, import and export restrictions, and retaliatory trade actions have resulted in economic and demand uncertainty ⁸⁶. During 2025, new tariffs were imposed in the U.S. for imports from a broad range of countries and materials, creating a heightened level of uncertainty ⁸⁷. The company's significant non-U.S. operations expose it to risks including currency fluctuations, changes in international trade policies, and unsettled political conditions, with approximately 47% of net sales generated from customers outside the United States in 2025 ⁸⁸. The company faces risks from difficulties in securing the supply of certain raw materials or fluctuations in the cost of raw materials, as the largest single raw material represents approximately five percent of raw material purchases ⁸⁹. The company had approximately $8.2 billion in outstanding indebtedness as of December 31, 2025, with approximately $1.5 billion in the form of floating rate debt, and a one percentage point increase in the average interest rate on floating rate debt would increase future interest expense by approximately $15 million per year ⁹⁰. The company had goodwill of $9.2 billion as of December 31, 2025, which is maintained in various reporting units, and if assets or goodwill become impaired, the company would be required to record a loss resulting from the impairment ⁹¹.

Management's message emphasizes that in 2025, the company delivered record sales, operating income margin, adjusted diluted earnings per share, and free cash flows ⁹². The team generated strong organic sales growth in Global Pest Elimination and Global Life Sciences, and good organic sales growth in Global Institutional & Specialty and Global Water ⁹³. Organic operating income grew by double digits, as strong value pricing and improved productivity were partially offset by investments in the business ⁹⁴. Management states that the company remains committed to maintaining 'A' range ratings metrics over the long-term, supported by current credit ratings of A-/A3/A- by Standard & Poor's, Moody's Investor Services and Fitch, respectively ⁹⁵. The strong balance sheet has allowed continued access to capital at attractive rates ⁹⁶. Management highlights that cash flow from operating activities was $3.0 billion in 2025, compared to $2.8 billion in 2024, allowing the company to fund ongoing operations, investments, acquisitions, debt repayments, pension obligations and return cash to shareholders through share repurchases and dividend payments ⁹⁷. The company increased its quarterly cash dividend by 12% to $0.73 per share in December 2025, representing the 34th consecutive annual dividend rate increase ⁹⁸.