In today's world, many companies try to present themselves as particularly sustainable. The American company Ecolab does this in a special way. On the Group's homepage, every visitor can see how much water, energy, CO2 emissions or waste customers have saved in a certain period of time with the help of Ecolab products and services. The long-established company has succeeded in doing this with its offerings in the field of industrial cleaning and hygiene. Reducing water consumption and keeping everything clean with environmentally friendly cleaning systems – these are exactly the goals that the company, which is probably unknown to many investors in this country, has committed itself to.

Many fields of activity

Among the Group's various offerings is, for example, the water management of data centers. In view of the exponentially increasing flood of data, the topic of cooling such buildings is of particular importance. This is particularly successful with water in this growth segment. The subsidiary Nalco Water, among others, helps with this. However, water can also be saved in many other areas. A joint initiative with the Chinese company Sinopec – to reuse wastewater for the Group's cooling towers at a chemical plant in Chongqing – is one of the most recent prestige projects.

Ecolab's many other activities include cleaning services for hotels, restaurants, breweries, laundries, hospitals, agriculture and food manufacturers. Wherever there are products and services related to washing, cleaning and polishing, Ecolab is available in more than 40 industries. Since the above-mentioned operating areas had to close or reduce their production capacities during the Corona period, this also caused problems for Ecolab. In the meantime, however, the Group is benefiting from the end of the pandemic. This recovery, which began in 2022, continued in the first quarter of 2023.

Solid figures and a good outlook

Revenue increased 2023 percent year-on-year to $9.3 billion between January and March 6. Organically, the increase was 13 percent. Operating profit rose 38 percent to $351.6 million. With the help of higher prices and efficiency improvements, the company was able to more than offset the negative impact of cost inflation and difficult economic conditions on earnings. Ultimately, adjusted earnings per share of $0.88 were above market expectations of $0.86.

For the current second quarter, management expects earnings per share to increase by 5 to 14 percent to $1.15 to $1.25. On average, the forecast of $1.20 is slightly above analysts' targets. This had recently expected Ecolab to have a value of 1.19 dollars. For the full year, Ecolab is committed to returning to the low double-digit percentage growth in adjusted earnings per share seen in the past.

A reliable dividend payer

In addition to savings and the hope for a further recovery after the Corona crisis, Ecolab is also increasingly focusing on new growth areas. The Group – with its more than 47,000 employees and more than 10,000 patents – has identified these in the life sciences sector, for example.

It develops comprehensive cleaning and disinfection solutions for the production of pharmaceuticals and personal care products – another reason why the company continues to expect strong organic sales growth, double-digit growth in organic operating income and a return to historically known earnings per share growth rates despite difficult market conditions. Especially since Ecolab works with many customers who are considered to have a defensive character. These are particularly robust in economically turbulent times, similar to Ecolab itself.

The steady growth in sales is also reflected in the long-term share performance. Even during turbulent market periods, Ecolab demonstrated a high level of defensive strength in the stock market. The company has been paying dividends to its shareholders continuously for 86 years now.

Investing in Ecolab has been worthwhile for investors with a focus on defensive stocks over the past decade. Over a ten-year period, a €10,000 position grew to more than €24,000, reflecting the solid price stability of the American cleaning specialist's shares. Since Ecolab actually lives the topic of sustainability in its products, a shareholder is actually doing something good with an investment. Greenwashing in the pure sense of the word, so to speak.