ECL
#Thank you
Hello, everyone, and welcome to Ecolab's fourth quarter conference call
With me today is <UNK> <UNK>, Ecolab's Chairman and CEO; and <UNK> <UNK>, our CFO
A discussion of our results along with our earnings release and the slides referencing this quarter's results and our outlook are available on the Ecolab's website at ecolab
com/investor
Please take a moment to read the cautionary statements on these materials stating that this teleconference, the discussion 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 described in the section of our most recent Form 10-K under Item 1A, Risk Factors, and in our posted materials
We also refer you to the supplemental diluted earnings per share information in the release
Starting with a brief overview of the quarter, continued attractive new business gains and new product introductions drove solid acquisition-adjusted fixed currency growth in our Institutional, Industrial and Other segments during the fourth quarter
These were offset by a moderating underlying sales decline in the Energy segment, though previously discussed one-time sales impacts in both this and last year resulted in a wider posted decrease for that business
Product innovation and ongoing cost efficiency work led the total company's adjusted fixed currency operating margin expansion, more than offsetting the impact of soft economies, challenging end markets and continued currency headwinds
These drove the fourth quarter's 2% adjusted earnings per share increase, which includes a 2 percentage point currency translation headwind
Moving to some highlights from the quarter and as discussed in our press release, consolidated acquisition-adjusted fixed currency sales for Institutional, Industrial and Other segments grew 4%, but were offset by lower Energy sales period
Regional fixed currency sales growth was led by Latin America
Reported operating margins increased 710 basis points
Adjusted fixed currency operating margins expanded 20 basis points, as continued sales growth from our Institutional, Industrial and Other segments as well as pricing and cost efficiencies offset lower Energy results
In 2016's difficult operating environment, we focused on driving new business gains by helping customers to lower their costs
We used our industry-leading product innovation and service strengths to help customers achieve the best results and lowest operating costs and, through these, aggressively drive new account gains across all of our segments
We expect 2017's external environment to show continued sluggish economic growth, higher delivered product costs, reduced but still unfavorable currency translation effects and gradually improving fundamentals in the energy markets
We will again work aggressively to drive our growth, employing the same fundamental approach, win new business using our innovative new products and a sharp focus on sales execution, and along with pricing and cost efficiencies, grow our top and bottom lines at improved rates
We look for strong earnings growth in 2017, significantly outperforming the headwinds
We look for a better year-on-year acquisition-adjusted fixed currency growth in our Institutional, Industrial, and Other segments, as they once again work aggressively to outpace their markets, leveraging investments we have made to further improve sales and service force effectiveness and profitability
We expect Energy to be modestly accretive to sales and earnings growth, as it benefits from a more stable market
We believe our actions will lead to better growth and stronger comparisons in the second half of the year versus the first half for Ecolab in 2017 with forecasted adjusted diluted earnings per share in the $4.70 to $4.90 range this year, increasing 8% to 12% including unfavorable $0.07 per share or 2 percentage point currency impact to earnings
In summary, despite a very challenging global, economic, and market environment, we expect to deliver strong adjusted diluted EPS growth in 2017. And now, here's <UNK> <UNK> with some comments
Thanks
That concludes our formal remarks
A final note before we start Q&A
We plan to hold our annual tour of our booth at the National Restaurant Association Show in Chicago on Monday, May 22. Looking further ahead, we also plan to hold our 2017 Investor Day in St
Paul on Thursday, September 7. If you have any questions, please contact my office
Operator, please begin the question-and-answer period
Question-and-Answer Session
That wraps up our fourth quarter conference call
This call and the associated discussion slides will be available for replay on our website
Thanks for your time today and your participation, and best wishes for the rest of the day
