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  1. 1. one Ecolab 2001 Annual Report
  2. 2. Ecolab overview With our acquisition of the remaining 50 percent of our European joint venture, we begin 2002 as one united Ecolab around the globe. This transaction enhanced our position as the world leader in premium cleaning, sanitation and service solutions. Combined with our European operations, we serve the needs of hospitality, institutional and industrial customers in nearly 170 countries. True to our Circle the Customer – Circle the Globe strategy, we surround our customers with a comprehensive, ever-expanding array of products, programs and services, around the world. In the United States, Services/Products Sales-and-Service Associates Institutional: Products, programs and services for the foodservice December 31 1999 2000 2001 and hospitality industries, including warewashing, on-premise laun- Institutional 2,705 2,975 2,985 dry, housekeeping, water filtration and conditioning, specialty Pest Elimination 1,380 1,475 1,450 kitchen and laundry products, kitchen exhaust cleaning and rooftop Kay 150 180 235 grease containment, and pool and spa management. Food & Beverage 420 410 385 Professional Products 195 195 190 Pest Elimination: Services and technology for commercial pest GCS Service 285 415 560 elimination and prevention, and grease elimination. Textile Care 130 125 125 Kay: Cleaning and sanitizing products, services and training Vehicle Care 100 95 100 programs for the quickservice restaurant, convenience store and Water Care Services 90 90 100 food retail markets. Europe 2,400 2,460 2,570 Canada 280 300 320 Food & Beverage: Cleaning and sanitizing products, equipment, Asia Pacific 775 955 1,065 systems and services for the agribusiness, beverage, brewery, Latin America 310 480 505 pharmaceutical, dairy and food processing industries. Africa/Export 100 125 130 Professional Products: Janitorial cleaning and infection prevention Total 9,320 10,280 10,720 products, programs and systems for the commercial, industrial and healthcare markets. Ecolab GCS Service: Leading independent national provider of repair, Business Mix Pro Forma Sales parts replacement and customized maintenance for commercial (Percent) (Dollars in billions) $3.1 $3.2 foodservice equipment. s International 43% Europe 27% Textile Care: Cleaning and sanitizing products and services that Asia Pacific 8% Canada 3% meet the needs of for-profit commercial and shirt laundries. Latin America 3% Africa 2% Vehicle Care: Cleaning and appearance products and programs for United States 57% s vehicle rental, commercial and retail car wash operations. Institutional 29% s Food & Beverage 8% s Pest Elimination 5% Water Care Services: Water treatment programs for boilers, cooling s Kay 4% s water and waste treatment systems. GCS Service 3% s Professional Products 3% s Textile Care 2% s Vehicle Care 2% s Water Care Services 1% 2001 2000 2001
  3. 3. Ecolab operates through nine complementary business units: Institutional, Food & Beverage, Pest Elimination, Kay, Professional Products, GCS Service, Textile Care, Vehicle Care and Water Care Services. Globally, our core institutional and industrial offerings are available in all markets – with additional businesses added as demand dictates. Through direct subsidiaries, export operations, joint ventures, distributors and licensees, we reach customers in Europe, Asia Pacific, Canada, Latin America, the Middle East and Africa, with offerings tailored as necessary to meet unique local and regional needs. Customer/Markets Ecolab Stock Performance Customers 1999 2000 2001 Quarter High Low High Low High Low Restaurants s Hotels First $41.25 $34.63 $40.75 $28.00 $44.19 $37.88 s s Quickservice operations Second 44.44 34.69 41.25 34.94 43.20 36.35 s Food retail (grocery) Third 43.88 31.69 40.00 33.25 42.00 28.50 s Schools Fourth 39.25 32.50 45.69 34.06 41.05 34.20 s Laundries s Healthcare facilities s Dairy farms and plants Ecolab Stock Performance Comparison s Food, beverage and brewery processing plants 1.25 $45 s Pharmaceutical and cosmetic facilities s Office buildings 1.20 $40 s Shopping malls 1.15 Ecolab, S&P 500 Indices s Light industry Ecolab Stock Price 1.10 $35 s Fleet and vehicle wash 1.05 $30 1.00 Markets 0.95 $25 United States s 0.90 $20 s Europe 0.85 s Asia Pacific 4 1 2 3 4 1 2 3 4 1 2 3 4 s Canada 1998 1999 2000 2001 s Latin America Ecolab Stock Price Ecolab Stock Price Index, Dec. 31, 1998 = 1.00 S&P 500 Index, Dec. 31, 1998 = 1.00 s Africa
  4. 4. Description of Business Founded in 1923, Ecolab is the leading global developer and marketer of premium cleaning, sanitizing, pest elimination, maintenance and repair products and services for the world’s hospitality, institutional and industrial markets. Headquartered in St. Paul, Minn., Ecolab reaches customers in North America, Europe, Asia Pacific, Latin America, the Middle East and Africa, employing more than 19,000 associates worldwide. Customers include hotels and restaurants; foodservice, healthcare and educational facilities; quickservice (fast food) units; commercial laundries; light industry; dairy plants and farms; and food and beverage processors. Products and services are marketed by the industry’s largest and best-trained direct sales-and-service force, numbering more than 10,000 associates who advise and assist customers in meeting a full range of cleaning, sanitation and service needs. Ecolab common stock is traded on the New York Stock Exchange and the Pacific Exchange under the symbol ECL. Ecolab news releases and other selected investor information are available on the Internet at or by calling 1-800-FACT-ECL (1-800-322-8325). Forward-Looking Statements We refer readers to the Company’s disclosure, entitled “Forward-Looking Statements,” which is located on page 20 of this Annual Report. Financial Highlights Percent Change (thousands, except per share) 2001 2000 1999 2001 2000 Net Sales $2,354,723 $2,264,313 $2,080,012 4% 9% Net Income 188,170 206,127 175,786 (9) 17 Percent of Sales 8.0% 9.1% 8.5% Diluted Net Income Per Common Share 1.45 1.56 1.31 (7) 19 Diluted Weighted-Average Common Shares Outstanding 129,928 131,946 134,419 (2) (2) Cash Dividends Declared per Common Share 0.525 0.490 0.435 7 13 Cash Provided by Operating Activities 364,481 315,486 293,494 16 7 Capital Expenditures 157,937 150,009 145,622 5 3 Shareholders’ Equity 880,352 757,007 762,016 16 (1) Return on Beginning Equity 24.9% 27.1% 25.5% Total Debt 745,673 370,969 281,074 101 32 Total Debt to Capitalization 45.9% 32.9% 26.9% Total Assets $2,525,000 $1,714,011 $1,585,946 47% 8% Net Sales Net Income Diluted Net Income per Share Dividends Declared per Share (Dollars in millions) (Dollars in millions) (Dollars) (Dollars) $1,640 $1,888 $2,080 $2,264 $2,355 $134 $193 $176 $206 $188 $1.00 $1.44 $1.31 $1.56 $1.45 $0.335 $0.390 $0.435 $0.490 $0.525 $155* $1.15* 1997 1998 1999 2000 2001 1997 1998 1999 2000 2001 1997 1998 1999 2000 2001 1997 1998 1999 2000 2001 *Income from continuing operations. Excludes gain from discontinued operations of $38 million, or $0.28 per diluted share, which was included in net income for 1998.
  5. 5. onecompany onewor ld One thing is clear: When it comes to delivering premium commercial cleaning and sanitizing solutions on a truly global basis, Ecolab is the one. No other company comes close to rivaling our worldwide reach or the extraordinary breadth of products, systems and services we offer. We meet the varied and specialized needs of thousands of diverse businesses and institutions in North America, Europe, Asia, Latin America, Africa, the Middle East – the list of countries in which we do business reads like an atlas. In 2001, we took decisive actions to ensure that Ecolab remains No. 1 in the world for many years to come. This report outlines these actions. Ecolab 2001 Annual Report 1
  6. 6. one! We are One. We chose this simple, elegant word as the theme for our 2001 report because it so effectively summarizes and celebrates the major strategic achievement that characterizes the year and our future: the unification of Ecolab’s global enterprise. But in the aftermath of the terrorist attacks, as we To Our Shareholders Thanks to our acquisition of the remaining 50 percent sent our thoughts and prayers to the families of those of our European joint venture, Ecolab is now one seam- who lost their lives, we also made a conscious decision less company worldwide. For the first time since the for- not to let these events defeat our Ecolab spirit. We are, mer Henkel-Ecolab was established more than 10 years after all, a company that has risen to the occasion time ago, we are one Ecolab in Europe, North America and and time again throughout our remarkable history. around the globe – one company, sharing one culture From the Great Depression and various wars to countless of excellence and one destiny: unlimited growth! challenges from competitors, Ecolab has not only perse- This transaction, completed November 30, served as vered, but emerged even stronger than we were before. a stirring climax to what was a truly unusual and extra- As we look back on our accomplishments in 2001, ordinary year. it’s clear that we have a lot to be proud of. While In addition to celebrating our global unity in 2001, our financial results may not have met the aggressive we rallied together to face extremely tough market con- standards we set for ourselves, it is important for us to ditions that were, in many ways, unlike anything we’ve keep in mind that – during a year in which the earnings experienced during our almost 80 years in business. of the Standard & Poor’s 500 declined more than 25 per- The once robust U.S. economy, of course, had already cent and the hospitality industry faced a record drop-off begun to slow when terrorists attacked the United States in business – we still handily outperformed the broad on September 11. This horrific tragedy and the unprece- market. And, just as importantly, we took steps to dented events that occurred in its immediate wake – further solidify our position as an industry leader in such as the three-day shutdown of the stock market and the coming years. the grounding of all domestic air transportation – sent Here’s a brief overview of 2001’s highlights: the economy plunging even further into a recession. The Ecolab 2001 Annual Report travel and lodging industry, one of our largest markets, ONE pinnacle of performance was hit especially hard due to the climate of public fear Sales from wholly owned operations increased s and uncertainty. 4 percent to a record $2.4 billion. Investments in our sales-and-service force, new products and services, aggressive sales initiatives and strategic acquisitions were key drivers of the gain as we fought the sliding 2
  7. 7. in a new indicated annual rate of 54 cents per share. It was our 10th consecutive annual dividend rate increase. Our strong financial position allowed us to complete s the Henkel-Ecolab transaction through a cash payment to Henkel KGaA of Düsseldorf, Germany. Although debt rose as a result of the transaction, our excellent cash flow should enable us to pay this down soon. In fact, following this payment, the major credit rating agencies upheld Ecolab’s strong “A” category balance sheet and Prime-1 commercial paper rating. s In January 2002, we announced a global restructuring. Following several years of acquisition activity and global expansion, we needed to refine our organization to increase the long-term efficiency and productivity of our worldwide operations. In addition to forging an organi- zation that will be more effective and responsive for the long term, our efforts will result in significant annual cost savings. Although these savings will begin in 2002, their full impact won’t be realized until 2003. Our actions will make us an even more effective competitor in the marketplace. Allan L. Schuman Chairman of the Board, President and Chief Executive Officer ONE exceptional blend of products and service The selection of cutting-edge products and solutions s economy. Due to the timing of the acquisition’s closing we introduced in 2001 includes the Inspexx line of date, Henkel-Ecolab’s 2001 results have been accounted antimicrobial surface treatments for red meat and for as equity income, consistent with prior years. In poultry, which reduces potential contamination from future years, however, they will be fully consolidated in harmful bacteria during processing. Independent Ecolab’s operations. When European sales are included, restaurant customers now benefit from Soil-A-Way, a our global coverage will be more than $3 billion. comprehensive cleaning line tailored especially to their needs. Solid Ovation, a new solid detergent system for s Income was $188 million, a decline of 5 percent from high-pressure automatic car washes, offers an easy-rinsing income before unusual items of $198 million in 2000. foam, fast soil penetration and superior shine for clear- Diluted earnings per share eased 3 percent, to $1.45. coat finishes. Our Oxy-Sept 333 antimicrobial disinfectant Productivity gains and cost controls partially offset the was approved to guard livestock producers and owners difficult economic climate of 2001. from the threat of foot & mouth disease, which damaged We outperformed the S&P 500 for the second consecu- s the agricultural industries of several European and tive year, and we’ve now beaten the index nine years out South American countries. And thanks to our S.W.AT. of the past 11. Our stock price opened 2001 at $43.19 and Fruit Fly Service, we are helping our customers closed at $40.25, off 7 percent. While this was our first eliminate these increasingly problematic pests from such annual decline since 1994, we still outperformed their commercial kitchens. the 12 percent stock price decline of the S&P 500. You can read more about our numerous other advances in new products and technologies in the Ecolab 2001 Annual Report Return on beginning shareholders’ equity was 25 per- s “Review of Operations” section of this report. cent, exceeding our corporate goal of 20 percent for the 10th consecutive year. s The largest and best-trained sales-and-service organiza- tion in the industry only got better in 2001. In addition We raised our quarterly cash dividend in December by s to more than 2,500 European associates added through 4 percent to 13.5 cents per common share. This resulted the Henkel-Ecolab acquisition, we added more than 300 3
  8. 8. new associates to our field organization, which now totals In March 2002, we promoted four of our key leaders: s more than 10,000 members. Simply put, our global Doug Baker was named president of our Institutional service coverage is unmatched by anyone, anywhere. Sector and continues to have responsibility for our Institutional, Textile Care and Kay divisions. Rick Marcantonio is now president of our Industrial ONE company committed to growth Of course, as I mentioned earlier, our biggest acquisition and Service sectors, which include the Food & Beverage, ever became official on November 30 when we acquired Pest Elimination, Professional Products, Water Care 100 percent ownership of our former European joint Services, Vehicle Care and GCS Service divisions. venture. Again, this acquisition greatly strengthened John Spooner, promoted to president of our our global leadership position, and it positions us for International Sector, will continue to concentrate on improved growth because we now have the ability to accelerating the growth and profitability of our Europe, better serve our customers’ needs on a global basis and Asia Pacific, Latin America and Africa/Middle East/ introduce new offerings worldwide. But we also made a Export businesses. number of other notable acquisitions. They include: Steve Fritze was named senior vice president and chief financial officer. Formerly our senior vice s We extended our Pest Elimination services to Brazil president – finance and controller, Steve will lead our with the purchase of Microbiotecnica in July. This Accounting and Control, Treasury, Tax and Investor acquisition is part of our strategy to expand our inter- Relations organizations. national pest elimination business, which in addition to North America, spans select countries in Asia Pacific s In February 2001, our board of directors welcomed and Latin America. new members Ulrich Lehner and Stefan Hamelmann. Ulrich is the president and chief executive officer of s Our GCS Service Division in October acquired Henkel KGaA of Düsseldorf, Germany, a manufacturer Commercial Parts & Service, a provider of kitchen of chemicals, household and personal care products, equipment repair services and parts with branches in and adhesives. Stefan is a member of the Shareholders’ Indiana, Kentucky, Tennessee and Mississippi. GCS Committee of Henkel KGaA and owner of Franz now covers nearly every major U.S. restaurant market, Hamelmann Baugesellschaft GmbH, a privately held with the broadest national independent service capabil- construction company. ity in the country. In March 2002, Jochen Krautter, chief financial s In January 2002, we acquired Chicago-based Audits s officer of Henkel KGaA, joined the board. International – a provider of food safety services since 1982 – and launched a new service: EcoSure Food Safety We also bid farewell to several members of our Management. A natural extension of our growing serv- leadership team. ice offerings, EcoSure evaluates food safety procedures s L. White Matthews III resigned as chief financial of restaurants, hotels, supermarkets, and other officer in August 2001. He also resigned from our board foodservice and hospitality establishments. of directors later in the year. We thank White for the Also in January 2002, we made our first acquisition strategic leadership he provided our organization. s in Europe since closing the Henkel-Ecolab transaction In March 2002, I regretfully accepted Bruno s by purchasing certain operations of Kleencare Hygiene Deschamps’ resignation as president and chief operating in the United Kingdom, France, Switzerland and the officer. Bruno, who contributed to making Ecolab an Netherlands. Kleencare expands our market share in even more successful and global company, decided to key geographies, offering products, systems and services pursue personal interests. We wish him well in his future for the food and beverage industry, and providing cus- endeavors. tomer support for the varied hygiene requirements of Ecolab 2001 Annual Report each segment. In February 2001, the board recognized the resignations s of directors Roland Schulz and Albrecht Woeste after eight and 10 years of distinguished service, respectively. ONE incomparable level of leadership We continued to develop our management team, In May 2001, the board acknowledged the retirement leveraging the depth of talent within the Ecolab ranks. of Ruth S. Block after 16 years of exemplary service. 4
  9. 9. o n e unbreakable spirit Hugo Uyterhoeven retired as a member of our board There is nothing more resilient than the human spirit. s in March 2002 following 10 years of dedicated service. For me, that’s the one certainty that emerged from the tragedy and We thank each of the above for their many contribu- devastation that occurred in 2001. Through it all, our unique capacity tions, counsel and leadership, and for helping to develop to pick ourselves up, dust ourselves off and continue plowing ahead, the management talent that will lead Ecolab’s growth. even under the direst of circumstances, remains constant. I believe people everywhere share this common instinct. I certainly feel it – and ONE recognized standard of excellence it keeps me focused on the incredible future I know is within our grasp. With the public’s heightened concern regarding s corporate ethics, we were very pleased to have been So, despite the many challenges we faced last year, we will march designated, for the second year in a row, one of onward and upward. Inch by inch, step by step, we’ll keep pursuing our America’s “100 Best Corporate Citizens” by Business goals, undauntedly surmounting any obstacles we may encounter. Mark Ethics magazine. This honor reaffirms our continued my words, we’re up to the task. At Ecolab, we’ve always known that efforts to act with the highest level of integrity and growth and success don’t come easily. You have to work hard and be responsibility in all of our business dealings. willing to take risks, make sacrifices and create your own opportunities. We were the first recipient of the International Dairy s As someone once said, “If opportunity doesn’t knock, build a door.” Foods Association Supplier Excellence Award, which Like the human spirit, our Ecolab spirit can never be defeated. Sure, we received in October at the Worldwide Food Expo we take our hits now and then, but we keep coming back stronger than in Chicago. Judged on superior service to customers, ever. And we will again this time. That’s ONE thing you can count on. product/service innovations that assist customers, and demonstrated dedication to the food industry, we were very pleased to be recognized with this award. Outlook for 2002: When you put this all together and look at the big If the events of 2001 have taught us anything, it’s that picture, it’s easy to see why I’m so confident that Ecolab predicting the future is a very tricky proposition. Nobody will continue to outperform the broad market and really knows what the coming year might bring. What produce attractive results. We are a global leader, and we can do, however, is make sure we’re fully prepared we already have the tools and people in place to achieve to meet every challenge and seize every opportunity our goals in 2002 and the years to come. But that doesn’t that lay ahead. That is exactly what Ecolab has done. mean we’re going to stop pursuing new avenues for Right now, at this moment, we are unquestionably growth. No way. stronger than at any other point in our history. We have We have a roadmap for growth that emphasizes new a greater reach and more potential for really big-time products, new accounts, deeper product penetration, growth than ever before. And it’s our strength that will aggressive cross-selling, sales force increases and profit help us weather the current economic climate, as well as margin improvement. It also stresses further expansion – any new twists and turns that events may take in the com- via global account growth, acquisitions, strategic alliances, ing months. We’ve done it before, and we’ll do it again. and by tapping into new and expanding markets – to I’ve said it many times before, but the fact is, everyone help us even better circle our customers and circle has to eat and everything has to be cleaned – during the the globe. good times and the bad. That’s why Ecolab’s leading- Think about it: Can anyone else deliver so much to edge products, systems and services are always in both customers and investors alike? The answer is clear. demand. And our customers need us the most during There is only ONE – Ecolab! troubled economic times, when they have to fight even harder to protect their brand names and keep their Ecolab 2001 Annual Report customers coming back. We not only give them the highest-quality cleaning and sanitation solutions, but we Allan L. Schuman help them achieve significant cost and labor savings – Chairman of the Board, President because every penny counts. and Chief Executive Officer 5
  10. 10. 6 Ecolab 2001 Annual Report onegoal
  11. 11. To e x c e e d c u s t o m e r expectations e v e r y d a y. Dedicated. Passionate. Reliable. The People men and women of Ecolab are your partners in success. Around the globe, we recruit top-notch individuals and train them to be experts in their field. Our people are problem-solvers who never say “never” and always strive for excellence – nothing less. Your business Ecolab 2001 Annual Report is their business, and they are constantly motivated by their No. 1 concern: You. 7
  12. 12. 8 Ecolab 2001 Annual Report oneresul t
  13. 13. per formance Unbeatable t i m e a f t e r t i m e. Powerful. Easy to use. Safer for employees. Products Ecolab products and systems are all these things and more. We combine the industry’s most advanced chemistry with cutting-edge dispensing technology. What you get are offerings that not only meet your every cleaning and sanitizing challenge, but uniquely deserve to be Ecolab 2001 Annual Report called solutions. And you’ll always get results you can count on. Guaranteed. 9
  14. 14. Ecolab 2001 Annual Report 10 onepassi on
  15. 15. Creating entirely new concepts o f c l e a n. Ingenious. Insightful. Innovative. Research and Development Ecolab’s research, development and engineering experts imagine the possibilities and make them a reality. Never content with the status quo, we strive for constant improvement, so far earning nearly 2,600 patents world- wide. And we boast the industry’s most Ecolab 2001 Annual Report sophisticated R&D facilities – where breakthroughs happen every day. 11
  16. 16. Ecolab 2001 Annual Report 12 onepromi se
  17. 17. Expert service whenever y o u c a l l. Repairs. Training. Support. The word Service “service” encompasses many things. Only Ecolab does it all. Our skilled field associates are fast, professional and trustworthy. They troubleshoot problems and fix them on the spot. They teach your employees to properly use our products and systems. They do Ecolab 2001 Annual Report whatever it takes to keep your business running smoothly – and nobody does it better. 13
  18. 18. Ecolab 2001 Annual Report 14 onevi sion
  19. 19. Tools to keep y o u c o n n e c t e d. Indispensable. State-of-the-art. Technolog y Exciting. Ecolab is taking cleaning and sanitation into the realm of high technology. From hardware to software and everything in-between, we’re putting the most revolutionary new business tools into the hands of our associates and customers. We’re Ecolab 2001 Annual Report improving results and increasing efficiency. It’s our competitive edge – and your secret advantage. 15
  20. 20. one Ecolab INSTITUTIONAL KAY 2001 Review of Operations Despite unprecedented mar- With differentiated offerings ket turmoil in the second and fast-growing new market Dedicated associates. Unbeatable half of 2001, Institutional segments, Kay posted strong finished the year with record sales growth in 2001 despite products. Innovative research. Expert sales and established key economic challenges facing service. State-of-the-art technology. Our initiatives that will help con- some of its corporate cus- tinue its growth in 2002. tomers. Specific achievements: Circle the Customer – Circle the Globe Highlights include: s Aggressively pursued new strategy articulates Ecolab’s proven business and increased account Instituted sales and promotion s ability to deliver these unique advantages penetration in the quickservice actions to offset the decline in the restaurant (QSR) segment. U.S. travel and lodging industries, to our customers on a global scale. emphasizing offerings that provide s Won the business of two major value in challenging times. Our various operating divisions and busi- grocery store chains in the fast- growing food retail segment, s Launched an initiative to ness units are the instruments through which drove double-digit increase sales to independent sales increases. restaurants and regional chains by which we put Circle the Customer – better leveraging its distributor net- s Increased sales to convenience Circle the Globe into practice every day. work and creating 50-plus sales- stores by 40 percent, thanks in and-service positions targeted to Individually, our businesses continually part to a corporate account focus this large market segment. that helped gain a large chain in strive to expand their reach by tackling the southeastern United States. Debuted Soil-A-Way, an all- s an ever-growing array of customer issues. encompassing kitchen sanitation s Introduced 25 new products, program for independent Together, they form an integrated, including LimeShield, REMOVE restaurants. and Pizzazz. complementary offering unmatched Developed new Ecotemp s s Continued to expand internation- by any other company. This is the key Omega dishmachines, loaded with ally by leveraging relationships features never before available. to Ecolab’s ongoing success. As 2001 with U.S.-based global accounts. Outlook came to a close, all were positioned to Outlook While the difficulties in the Kay foresees another year of leverage their many strengths and help hospitality industry will present strong growth as it continues to a challenge in early 2002, Ecolab achieve accelerated growth in develop innovative product offer- Institutional has positioned itself ings and steps up its aggressive for strong growth as the market 2002 and beyond. efforts to take further market share recovers. It will continue to focus away from the competition in the on its strong position in the global Here is a division-by-division review of QSR and food retail segments. Kay and national chain restaurant seg- is also exploring a variety of new 2001 accomplishments. ment, while expanding its offerings growth opportunities beyond its for independent “street accounts” core markets, focusing on facilities and regional chains. Also, with similar cleaning, sanitation Ecolab 2001 Annual Report Institutional is further tailoring and service needs. its offerings to meet the special needs of healthcare facilities, and is pursuing additional growth opportunities in other areas. 16
  21. 21. GCS SERVICE PEST ELIMINATION PROFESSIONAL TEXTILE CARE PRODUCTS In 2001, GCS Service Pest Elimination’s strong In the face of rising raw exceeded $100 million in growth in 2001 far outpaced material costs and continued Professional Products sales as acquisitions and that of its industry and pricing competition, Textile continued to apply its strate- internal growth expanded helped offset the impact of the Care completed a field reor- gic focus in 2001, enjoying its position as the No.1 travel industry’s slowdown, ganization in 2001 designed healthy growth in its core independent service provider as customer demand contin- to lay solid ground for janitorial and healthcare in kitchen equipment repair. ued for a premium service improved performance going markets, and gaining lead- Among the division’s that delivers value and forward. Highlights for ing accounts in key markets. achievements: results. Among the the year: Highlights include: accomplishments: s Purchased Commercial Parts & s Transferred its on-premise Broadened its national distribu- s Service, a provider of commercial laundry responsibilities to Ecolab’s Rolled out eStat Communicator s tion network through a multi-year kitchen equipment repair services Institutional Division in order to handheld computers to all field partnership with the leading North with branches in Indiana, Kentucky, better concentrate on the commer- associates, replacing paper with American distributor of janitorial Tennessee and Mississippi. cial segment and improve sales electronic service reports, invoices products. force efficiency. and customer data. s Increased its emphasis on s Expanded its building service Launched Turbo-FlexTra Visco corporate accounts and cross- Introduced S.W.A T. Fruit Fly s s contractor (BSC) business thanks Conditioner, a conditioning agent divisional sales to help offset the Service, the first guaranteed solu- to extensive product offerings, effects of the general economic that provides commercial laundries tion for a leading pest problem strong service support, and a long- downturn. with superior cleaning performance faced by foodservice operations. term agreement with the largest at energy-saving low wash North American BSC. s Continued to build its national s Generated double-digit growth temperatures. service network, entering 12 in the government, food and Launched Episoft Foam, a s new markets. s Executed an aggressive SKU beverage processing, and food differentiated foaming handsoap reduction initiative to standardize retail segments. that provides superior efficacy s Achieved major operational product offerings, improve and cost effectiveness. improvements in areas such as Outlook operating efficiencies, and provide scheduling, field management and Pest Elimination anticipates double- s Introduced Asepti-Solid, consistent performance across technical assistance, resulting in digit growth in 2002 as it further which cleans hospital carts while the division’s large and diverse greater efficiency and technician penetrates new markets. The reducing storage requirements, customer base. effectiveness. division will enhance its eStat freight costs and packaging. Outlook program, adding such tools as Web Outlook Outlook Textile Care has laid the foundation reporting and customized services. GCS Service looks forward to Professional Products anticipates for top-line growth in 2002, despite Training and R&D innovation are continued growth as it focuses continued growth in the BSC and the ongoing challenges of a con- also expected to drive productivity on its core repair and parts serv- janitorial markets as its corporate solidating marketplace. The divi- and lead to additional service ices for cooking, refrigeration and partnerships gain full speed. At the sion is responding with advanced programs, helping to offset the warewashing equipment. The divi- same time, it will phase out non- chemistry that produces unprece- challenging economy. sion will also leverage its corporate strategic business lines, partially dented wash results while helping account relationships to support offsetting progress elsewhere. customers decrease temperatures parts sales. Strong healthcare industry sales and water usage – true value- are expected thanks to its core added, cost-reducing benefits. soaps and lotions business, and Ecolab 2001 Annual Report the new Asepti-Solid. 17
  22. 22. FOOD & BEVERAGE WATER CARE VEHICLE CARE INTERNATIONAL: SERVICES EUROPE Against a backdrop of 2001 was a good year for industry consolidation, Vehicle Care, with improved Water Care Services In its final year as a joint contraction and competition, profitability and solid sharpened its focus on key venture, the former Henkel- Food & Beverage reported sales growth. Among its markets, leveraging Ecolab’s Ecolab focused on aggressive modest sales growth. Specific accomplishments: account relationships and marketing strategies and an accomplishments: Circle the Customer strategy emphasis on system-concept s Expanded penetration through to produce solid growth in sales to fuel growth. Specific several major, national corporate Emphasized greater market spe- s 2001. Accomplishments highlights include: account agreements with full- cialization, aggressive sales efforts include: service conveyor wash chains and and new product introductions to s Accelerated Institutional “street oil companies, which value offset general economic challenges. account” sales with popular s Achieved double-digit growth Ecolab’s advanced formulas and offerings such as the Ecotemp in the food and beverage and s Posted double-digit sales growth well-recognized Blue Coral brand. dishmachine rental program and hospitality sectors. in its brewery, engineering and the Ecoplus Future solid ware- s Introduced solids technology filtration businesses. Continued to enjoy success with s washing system. to the vehicle wash industry the Bubble Accelerated Flotation s Launched Quadexx, an Internet- with Solid Ovation, a pioneering s Achieved Food & Beverage (BAF) wastewater treatment sys- based formulation and allocation pre-soak for gas station car growth through strong corporate tem. Offered via a strategic part- system for plants. washes that revolutionizes cost account initiatives and a focus nership with a leading equipment effectiveness, performance, safety s Introduced Inspexx, an anti- on the promising pharmaceutical, supplier, BAF combines technology and convenience. microbial food surface sanitation cosmetics and food processing and products to significantly program for meat and poultry markets. reduce costs for users. Launched Velocity, a line of s carcasses. pre-soak, wheel-cleaning and s Increased Professional Products Outlook protectant products. Entered the U.S. biosecurity contract sales with offerings such s In 2002, Water Care Services will market with its Livestock Disease as Mono Star floor coating and the maintain a strong focus on its Outlook Interventions (LDI) program. Zip & Safe hygienic washroom core markets while aggressively Vehicle Care looks forward to soap system. capitalizing on cross-selling oppor- continued growth thanks to s Received the first-ever tunities with other Ecolab divisions. differentiated offerings and a Supplier Excellence Award from s Dramatically reduced customers’ In particular, the division expects strong commitment to product the International Dairy Foods water and energy costs with several to pursue increased opportunities innovation and associate training. Association. Textile Care resource management in the healthcare and commercial The division plans to capitalize on programs. laundry segments. It also plans its strengths in the fast-growing Outlook continued geographic expansion gas station wash market while Food & Beverage expects contin- Outlook toward complete U.S. coverage. expanding its solid product ued share gains across its markets Europe looks forward to acceler- technology to the full-service in 2002 despite ongoing economic ated growth driven by premium conveyor segment. challenges within some markets. service offerings, pan-European Inspexx will enhance its strong marketing programs, and an on- presence in the meat and poultry going commitment to innovation. markets, while LDI will help drive Associate training in high growth agribusiness growth. markets will also be emphasized, as well as a continued focus on cross-divisional selling. Ecolab 2001 Annual Report 18
  23. 23. INTERNATIONAL: INTERNATIONAL: INTERNATIONAL: INTERNATIONAL: ASIA PACIFIC CANADA LATIN AMERICA AFRICA / MIDDLE EAST / EXPORT The Asia Pacific region Canada posted solid growth Building on prior investment achieved excellent sales in in 2001 thanks to excellent and momentum, Ecolab’s Ecolab’s Africa, Middle 2001 by circling the customer, institutional sales, growth Latin American operations East and Export businesses and by capitalizing on its in western Canada, and achieved solid growth in generated strong 2001 cross-selling opportunities a commitment to account 2001, led by aggressive profits, driven by the and commitment to quality retention and penetration. entries into new markets company’s very successful staffing and training. Achievements include: and strong corporate account joint venture in Israel and Among the highlights: sales. Specific achievements: attention to smaller, local s Increased customer retention “street” account sales. with enhanced services and a Northeast Asia leveraged its s Grew its core Institutional and s Accomplishments include: highly successful service reporting sales force and corporate account Food & Beverage businesses with and tracking system. relationships to offset slow new products and programs that s Successfully expanded the economic conditions, generating broadened its customer base and brewery and beverage market s Produced double-digit growth in double-digit local currency sales gained new accounts. in South Africa thanks to a “total its Vehicle Care, FresH2O, Ecotemp growth. Japan enjoyed strong management” concept and key and Pest Elimination businesses. s Entered the supermarket seg- market gains and success, with corporate account gains. ment with MarketGuard, a com- GeoSystem 9000 leading the way. Launched the Aqua Balance s plete program that helps improve s Enjoyed particular success in Pool & Spa program, which Enjoyed outstanding New food safety throughout the store. s Israel’s food and beverage, distrib- provides superior chemistry Zealand farm sales, providing utor sales and street account seg- and remote monitoring services s Partnered with Kay to gain a wide range of products and ments through the Ecolab-Zohar for hotel pools and spas. pest elimination business at more services to the dairy industry in Dalia joint venture. than 300 restaurants in Mexico a strong year for that market. Strengthened its popular s managed by a major corporate s Continued to consolidate and Ecotemp lease program with Introduced CleanCare, a account customer. s improve the regional structure in Omega, a new low-temperature comprehensive hospitality house- East and South Africa to enhance dishmachine that is generating s Entered the Brazilian pest keeping program. operating effectiveness. strong sales. elimination market through the s Rolled out the Aquamat tunnel acquisition of Microbiotecnica, Outlook Outlook pasteurizer program for breweries a leading commercial provider. The Africa business expects Canada looks forward to continued and beverage processors. to leverage its recent Food & growth in 2002, and anticipates Outlook Beverage gains to help drive addi- particularly strong performances Outlook Despite ongoing economic chal- tional sales in that segment. The from its emerging Vehicle Care, Asia Pacific expects continued lenges posed by a downturn in Africa, Middle East and Export Pest Elimination and Pool & Spa sales growth in its core beverage resort travel and tourism, Latin businesses will all be placing an businesses. Independent street and brewery segments, as well America is poised for solid increased emphasis on corporate accounts are expected to provide a as in its pharmaceutical, seafood, market share gains in 2002 as account sales. Additionally, Export solid growth avenue for Institutional, poultry and dairy farm markets, its pharmacy, poultry, fish and plans to expand its institutional while Food & Beverage is poised to which should help offset the softer wine markets continue to grow. offerings to several new markets. gain additional market share in the hospitality industry. Distributor pro- Mexico’s Pest Elimination business brewery segment. grams are being rolled out across will benefit from its corporate Indonesia and China to provide account gains, and warewashing Ecolab solutions in areas with growth is predicted throughout the Ecolab 2001 Annual Report sprawling geography. region. In addition, Latin America will unveil new additions to its popular EcoStar laundry line. 19