ECOLAB INC. Q2 FY26 Results

We delivered another quarter of double-digit EPS growth, driven by strong execution across the company which produced accelerating organic sales growth, a stable organic gross margin excluding the impact from Ovivo Electronics, and strong productivity. Reported volume grew 1%, despite a nearly 1% headwind from customer operations disrupted by the conflict in the Middle East, while underlying volume growth strengthened. Pricing improved to 4%, reflecting the early benefits of our energy surcharge implementation, which helped to mitigate the impact of rising commodity costs. This strong performance demonstrates the durability of our growth model and the power of our global team to deliver for our customers no matter what. As we indicated last quarter, the second quarter was a transition period. We entered the quarter with higher commodity costs and little benefit from our energy surcharge. Our team executed extremely well, implementing the surcharge globally, strengthening pricing throughout the quarter, continuing to grow volumes, and stabilizing organic gross margin in just one quarter. With total pricing in the second half expected to be in the 5% to 6% range, we are very well positioned to offset higher commodity costs and deliver strong underlying performance. Growth in our core businesses improved as we advanced our One Ecolab growth strategy to continue to gain share. Food & Beverage, Institutional, and Light Water accelerated, while performance in Heavy Water and Paper improved. Our growth engines continued to rapidly scale, led by 29% growth in Global High-Tech and 15% growth in Life Sciences. Our acquisition of Ovivo Electronics is also performing very well, and we continue to expect it to grow mid-teens this year versus pre-acquisition sales. The recent close of our acquisition of CoolIT further strengthens our Global High-Tech growth engine, extending our leadership in water technologies, research, and services into the rapidly growing AI infrastructure market. CoolIT's growth momentum continues to strengthen, with pre-acquisition sales up more than 100% in the first half. Our Global High-Tech platform is now approaching $1.5 billion in annualized sales, and we expect it to grow to $4 billion in sales by 2030, with operating income margins of 25%. This business is now our largest growth engine and is expected to contribute more than two percentage points to Ecolab's annual sales growth one year after acquisition with increasing margins. Looking ahead, we expect continued momentum, supported by very strong performance in our growth engines, ongoing share gains from One Ecolab, accelerating pricing, and improved productivity. We have never been better positioned to deliver long-term organic sales growth of 5% to 7%, expand operating income margins well beyond 20%, and continue strengthening our EPS growth algorithm.