Ecolab Announces a Temporary Global 8%-12% Energy Surcharge

Rhea-AI Summary

Ecolab (NYSE:ECL) announced a temporary energy surcharge of 8%-12% on all global products, effective April 1, 2022, due to rising energy costs exacerbated by the Russia-Ukraine conflict. CEO Christophe Beck stated that this measure aims to ensure reliable supply amid challenges from inflation and logistics. Ecolab is actively taking steps to enhance supply chain resilience and operational efficiency. The surcharge will be monitored monthly, with potential reductions as energy costs stabilize. Ecolab remains committed to innovation and sustainability despite these challenges.

Positive

• Introduction of a temporary energy surcharge to maintain product supply amid rising costs.
• Continued actions to enhance supply chain resilience and operational efficiency.

Negative

• Implementation of an 8%-12% surcharge indicates significant inflationary pressures.
• Rising raw material and logistics costs may affect profitability.

ST. PAUL, Minn.--(BUSINESS WIRE)-- Ecolab Inc. (NYSE:ECL) announced a temporary 8%-12% energy surcharge on all of its global products, effective April 1, 2022. This surcharge is intended to mitigate the dramatic rise in energy costs.

Christophe Beck, Ecolab’s president and chief executive officer, commented, saying, “The protracted global environment for higher raw material and logistics costs, driven by the inflationary environment the world has experienced over the past year, have recently faced unprecedented surges resulting from the Russia-Ukraine conflict.

“As a long-term business partner to our customers, we have taken continued actions to ensure supply chain resilience and reduce volatility by accelerating value engineering, optimizing supplier footprints, increasing strategic inventory and expanding our end-to-end supply chain partnerships to help mitigate extreme raw material and logistics shortages. We have also taken a wide range of productivity actions to improve our efficiency and reduce our costs to help offset the strong inflationary challenges and subsequent pricing.

“Nonetheless, we now also need to implement this temporary energy surcharge to mitigate the dramatic rise in oil and gas costs and its impact on raw material and logistics inflation to ensure we can continue to provide reliable product supply, as well as continue to invest in the product innovation, digital technology and service expertise that is core to our differentiated global offering. We will monitor this situation monthly; when the current energy cost surge moderates, we expect to reduce or remove this surcharge.

“We are confident that this measure will ensure our ability to continue to provide the products and services our customers rely on as well as provide the leading technologies, solutions and services to help our customers reduce their usage of natural resources and their impact on the environment while improving their total cost of operation.”

About Ecolab

A trusted partner at nearly three million customer locations, Ecolab (ECL) is a global leader in water, hygiene and infection prevention solutions and services that protect people, planet and business health. With annual sales of $13 billion and more than 47,000 associates, Ecolab delivers comprehensive science-based solutions, data-driven insights and world-class service to advance food safety, maintain clean and safe environments, optimize water and energy use, and improve operational efficiencies and sustainability for customers in the food, healthcare, hospitality and industrial markets in more than 170 countries around the world. www.ecolab.com

Cautionary Statements Regarding Forward-Looking Information

This communication contains certain statements relating to future events and our intentions, beliefs, expectations and predictions for the future which are forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. Words or phrases such as “will likely result,” “are expected to,” “will continue,” “is anticipated,” “we believe,” “we expect,” “estimate,” “project,” “may,” “will,” “to ensure,” “intend,” “plan,” “believe,” “target,” “forecast” (including the negative or variations thereof) or similar terminology used in connection with any discussion of future plans, actions or events generally identify forward-looking statements. These forward-looking statements include, but are not limited to, the duration, reduction and removal of the energy surcharge and the continuity of supply of products and services. These statements are based on the current expectations of management of the company. There are a number of risks and uncertainties that could cause actual results to differ materially from the forward-looking statements included in this communication, including duration and severity of the geopolitical events driving the current inflationary environment and other developments that increase costs or affect the availability of products or services.

Additional risks and uncertainties that may affect operating results and business performance are set forth under Item 1A of our most recent Form 10-K, and our other public filings with the Securities and Exchange Commission (the "SEC"), and include the effects and duration of the COVID-19 pandemic; difficulty in procuring raw materials or fluctuations in raw material costs; exposure to global economic, political and legal risks related to our international operations, including the impact of sanctions or other actions taken by the U.S. or other countries, and retaliatory measures taken by Russia in response, in connection with the conflict in the Ukraine; our ability to successfully compete with respect to value, innovation and customer support; pressure on operations from consolidation of customers or vendors; restraints on pricing flexibility due to contractual obligations and our ability to meet our contractual commitments; repeated or prolonged government and/or business shutdowns or similar events; acts of war or terrorism; natural or man-made disasters; and other uncertainties or risks reported from time to time in our reports to the SEC. In light of these risks, uncertainties, assumptions and factors, the forward-looking events discussed in this communication may not occur. We caution that undue reliance should not be placed on forward-looking statements, which speak only as of the date made. Ecolab does not undertake, and expressly disclaims, any duty to update any forward-looking statement whether as a result of new information, future events or changes in expectations, except as required by law.

(ECL-C)

View source version on businesswire.com: https://www.businesswire.com/news/home/20220315005611/en/

Michael J. Monahan (651) 250-2809

Andrew C. Hedberg (651) 250-2185

Cairn Clark (651) 250-2291

Source: Ecolab Inc.

FAQ

What is the reason for Ecolab's energy surcharge?

Ecolab announced the surcharge to address significant rises in energy costs influenced by the ongoing Russia-Ukraine conflict.

When does the energy surcharge go into effect for Ecolab?

The energy surcharge is effective from April 1, 2022.

What percentage will Ecolab's energy surcharge be?

The surcharge will be between 8% to 12% on all global products.

How will Ecolab manage the energy surcharge in the future?

Ecolab plans to monitor the situation monthly and may reduce or remove the surcharge when energy costs stabilize.

What impact does the energy surcharge have on Ecolab's customers?

The surcharge is implemented to maintain reliable product supply and support ongoing investment in innovation and sustainability.