This document provides an overview of Ecolab's performance in 2006 and outlook for 2007 across its various business units. In 2006, Ecolab achieved strong sales growth and record performance across many business units by focusing on new customer acquisition, successful programs like 360° Protection and Circle the Customer, and new product innovations. Heading into 2007, Ecolab expects continued growth driven by further investments in sales, service, technology and research and development to provide even greater value to customers.

1. INSPIRING
CONFIDENCE
2006 REVIEW OF OPERATIONS
How do we inspire confidence every day with customers around the globe? It’s
simple. Through personal service. Innovative products. And consistently superior
results. Our people across all business units continually provide customers with
the best products, programs and services they need to make their operations
run smoothly and efficiently.
The following is a detailed summary of 2006 and outlook for 2007 from each of
our core businesses.
HIGHLIGHTS
Increased its sales force productivity
Accomplished continued, strong
with the completed national rollout
success with its proven 360° of
of portable 360° Advisor™ tablet
Protection™ program, a
computers, which gather critical
comprehensive suite of solutions for
service reporting information in real
foodservice, hospitality and long-term
time and enhance operational data,
care customers that significantly
helping customers increase food
increases food safety, guest
safety and operational efficiencies.
satisfaction, operating efficiency and
Continued to make significant
employee safety.
investments in its field sales-and-
Achieved substantial competitive
service organization through hiring
gains with new corporate accounts
UNITED STATES:
additional sales-and-service associates,
and independent (street) customers.
INSTITUTIONAL
training and new technology.
Integrated the Professional Products
Institutional drove record 11% sales
line into the Institutional range of
growth and increased profits in 2006,
OUTLOOK
solutions, leveraging the breadth and
thanks to significant new account gains
Institutional expects to once again
expertise of the Institutional sales
and comprehensive, differentiated
achieve strong growth in 2007. The
force to deliver value-added floor care
programs. The division also achieved
division will invest in additional sales-
and janitorial products to customers in
greater operating efficiency, successfully
and-service associates, technology,
hospitality, healthcare and commercial
offset increases in raw materials and
training and R&D to ensure it continues
facilities.
fuel costs, and further penetrated key
to deliver the highest level of exceptional
Drove accelerated growth in the
customer segments with additional
service to customers. The water
water care solutions market, thanks
solutions.
solutions segment offers particularly
in part to a newly designed FresH2O™
good growth potential, and new product
water filtration system, which is used
launches will also enhance the division’s
by restaurants and hospitality
360° value proposition.
customers to purify tap water used
in beverages and food.
10 ANNUAL REPORT 2006

2. PEST ELIMINATION KAY HEALTHCARE
Pest Elimination enjoyed strong, 13% By focusing on large new customer gains Healthcare achieved record sales
sales growth in 2006 driven by new in its core quickservice and food retail and improved market share in its
contract sales, Circle the Customer and markets, Kay accomplished another year instrument care and rinseless hand
penetration of existing accounts in core of strong double-digit growth, with hygiene segments in 2006. Nonetheless,
segments. The division also significantly record sales increasing 11%. Kay also comparing against a strong year-ago
improved its operating income, and expanded its reach in all of its markets period, sales grew 4%. The division
earned the highest level of customer through aggressive penetration of new invested in new training programs for
retention in its history. and existing customer accounts, while sales, leadership and key technical roles
benefiting from continued growth and in order to further strengthen the field
HIGHLIGHTS success of its global chain customers. organization and drive sales.
Attained significant growth in sales
of its Innspect Bed Bug Service™ for HIGHLIGHTS HIGHLIGHTS
the hospitality market and its Wing Enjoyed good gains across the board Made significant new account gains
CommandSM bird program in the retail in the quickservice food industry, as and successfully renewed key GPO
and government segments. new accounts, new programs, new (group purchasing organization)
Created a new, limited-service hotel products and improved product contracts.
program in response to customer penetration all contributed to the gain. Expanded its highly successful
need for bundled services, which has Continued to drive Circle the Customer Asepti-Solid™ program with additional
achieved considerable sales and is – Circle the Globe success through the solutions that further solidify its
driving growth with franchises. MarketGuard™ food retail program, presence as the market leader in
Expanded its proven EcoProSM FS which combines best-of-industry central sterile.
program to the quickservice solutions for food safety, pest Upgraded its hand hygiene dispensing
restaurant segment, where it elimination and floor care. systems, offering superior, touchless
provides exceptional protection Introduced the Formula Foam™ technology while preventing drips
against pests such as fruit flies, Cleaning System, a portable, and clogs.
cockroaches, mice, rats and ants. self-contained, high-foaming system Partnered with industry experts to
Achieved outstanding double-digit designed for cleaning fresh foods develop programs to promote hand
growth in the EcoSure food safety departments in food retail locations hygiene compliance and reduce
and quality assurance business, driven more quickly and thoroughly. healthcare-associated infections.
by Circle the Customer relationships Launched Polar Blue™, a high-
and focus on operational efficiencies. performance pot-and-pan detergent OUTLOOK
Invested in a number of strategies to designed specifically for cold Healthcare expects strong growth in
reduce work-related injuries, increase temperatures found in certain areas 2007 as it continues to make further
driver safety, attract and recruit top of the food retail environment. investments in field sales-and-service
talent, and more efficiently manage its personnel and their capabilities, invest in
routes, all to further enhance its high OUTLOOK R&D, and pursue strategic acquisition
service levels and customer Kay expects continued aggressive growth opportunities. The division plans further
satisfaction. in 2007 in all of its market segments, expansion into the gastrointestinal
fueled by a healthy mix of corporate market with a broad cleaning and
OUTLOOK account gains and new product disinfection portfolio. Its growth is also
In 2007, Pest Elimination expects innovations. Kay will also help develop expected to come from its core product
continued strong growth as it drives new additional solutions for its customers, portfolio for instrument care and hand
contract sales and additional service and further growth for Ecolab, through hygiene, as well as from its strong base
solutions in its core segments. The application of the Circle the Customer – of contract sales.
division also plans to introduce an Circle the Globe strategy in its core
improved food and beverage segment markets of quickservice and food retail.
program, including new programs for the
education and healthcare sectors.
ANNUAL REPORT 2006 11

3. GCS SERVICE TEXTILE CARE FOOD & BEVERAGE
In 2006, GCS Service focused on Textile Care showed a strong Food & Beverage achieved solid growth
developing systems and processes improvement in 2006, with sales rising and record sales in 2006, fueled by
that will drive competitive advantage, 10% to record levels and significantly double-digit gains in its meat and poultry
business scalability and profitable long- improved operating income. The division business and steady gains in the dairy
term growth. Reflecting that focus on continued to invest in field sales-and- and soft drink segments. Ecolab’s Circle
infrastructure development, sales grew service associates and training. Its full the Customer strategy led the 8% sales
only modestly, while substantial progress cycle solutions™ program, an application growth, as the division expanded its
was made in achieving important of Ecolab’s Circle the Customer strategy, antimicrobial platforms, upgraded its
strategic priorities. continued to perform well and helped field training and bolstered its market
drive growth. position through an acquisition.
HIGHLIGHTS
Invested in a major systems conversion HIGHLIGHTS HIGHLIGHTS
Introduced Octa-Gone®, a
to remove inefficient systems, enhance Leveraged tunnel washer technology
speed and service quality, and become from its sister division in Europe for revolutionary, fatty acid-based
better positioned to meet customer the U.S. launch of PERformance™, a antimicrobial product that reduces
challenges. low-temperature, proprietary oxygen microbial contamination on ready-to-
Retooled its business model, including bleach that reduces energy and eat meat and poultry product surfaces
strengthening the management team increases textile life. – the first of its kind on the market.
Tsunami® 100 became the first
and increasing associate retention. Continued to build on the success of
Sharpened the focus on the parts the Aquamiser water reuse system EPA-registered antimicrobial
business, including establishing a and Energy Optimiser heat exchange product that reduces pathogens in
courier program to replenish parts system to provide customers with fruit and vegetable process water.
Tsunami® 100 also controls spoilage-
daily, thereby increasing technician substantial water and energy savings.
efficiency, improving first-time fix Made important account wins and causing organisms, enhances shelf
results and reducing customer better account penetration, including life, and requires no rinsing.
equipment downtime, improving gains in the growing healthcare linen Acquired Georgia-based DuChem
customer satisfaction. market. Industries, further solidifying Ecolab’s
Achieved continued success with Drove continued success with its full leadership position in the meat and
Unit-Trax™, an asset tracking system cycle solutions™, a complete program poultry segment, improving service
that supplies customers with encompassing chemistry, service, coverage, and enhancing growth.
important information about their water care, engineering and Launched DryExx™, a dry lube for
kitchen equipment, related repair technology that helps commercial beverage plants that increases
history and costs. laundries lower costs and optimize productivity by reducing soil buildup
their operations. and eliminating drips and associated
OUTLOOK hazards.
By investing heavily in its service model OUTLOOK
in 2006, GCS Service has made essential Textile Care expects solid sales OUTLOOK
progress in building the right growth in 2007. The division foresees In 2007, Food & Beverage expects
infrastructure to drive long-term growth. accelerated growth in the healthcare and continued strong growth in its protein
and antimicrobial segments. Tsunami®
GCS expects to benefit from these workwear markets, driven by its unique
investments in 2007 as infrastructure lineup of superior solutions. Textile Care 100 is expected to show good strength
work is completed. Long-term, the need will also further develop its information thanks to its unique process water
for a national independent kitchen management systems, and plans to make pathogen claims. The division will
equipment repair service remains strategic investments in R&D aimed at also invest in training and service
important for leading chain accounts, helping customers reduce operating management tools to further enhance its
and GCS will meet that demand as it costs. successful value proposition, and will
leverages its efficient systems and pursue strategic acquisitions that benefit
national footprint. the business.
12 ANNUAL REPORT 2006

4. WATER CARE SERVICES VEHICLE CARE
Water Care Services improved its Vehicle Care posted record sales with
performance in 2006 through aggressive growth of 5% in 2006, led by the
Circle the Customer partnerships with development of new product innovations,
Food & Beverage and Institutional, new account gains, and the addition of
growing sales 8% to record levels. sales-and-service associates. The division
also achieved improved profitability
HIGHLIGHTS through increased efficiency, reduced
Leveraged Ecolab’s expertise in solids costs and an improved operations
technology to introduce a solid network.
product solution for boiler and cooling
towers that replaces large liquid drums HIGHLIGHTS
of product with compact, easy-to-use Built momentum as the industry’s
solid capsules and state-of-the-art innovation leader with its highly
successful Rain-X® Online Protectant,
dispensing systems.
Achieved record growth in the marine a complete surface protectant, which
market, including cruise lines, and was named Most Innovative New
strong double-digit growth in the food Product of 2006 by the International
and beverage market, by partnering Car Wash Association.
with other Ecolab divisions to provide Extended its expertise to new markets
solutions to their core customer base. and customers with the launch of its
Blue Coral® Solid Power program,
Introduced its indoor air quality
program that helps reduce indoor air which includes an alkaline detergent
quality issues that arise from mold, and a powerful presoak that require
dust, allergens and other less space, less labor and reduced
contaminants. storage requirements compared to
Made investments in talent and field traditional liquids.
technology to strengthen its field Made significant new account gains
team and provide excellent service through its focus on advanced
to customers. technology, superior service and
powerful marketing.
OUTLOOK Strengthened its current business
Water Care Services expects to see through increased direct sales and
further growth in 2007 through a distributor partnerships.
continued focus on Circle the Customer
opportunities aided by new innovation. OUTLOOK
Water Care plans to further invest in its Vehicle Care anticipates further growth
infrastructure by attracting, developing in 2007 as it aggressively drives new
and retaining top talent and building its platforms to create additional, value-
field service capabilities through the added products to meet customer needs
introduction of new service reporting and drive sales. The division expects
tools. strong performances from its full-service,
convenience store and fleet segments.
Vehicle Care will also leverage its
TURN THE PAGE FOR MORE
dispensing systems and presoaks
2006 HIGHLIGHTS...
technology, and will add field sales-and-
service staff.
ANNUAL REPORT 2006 13

5. Food & Beverage introduced a new
INTERNATIONAL: ASIA PACIFIC
innovation in low-pressure foaming
EUROPE/MIDDLE EAST/AFRICA In 2006, Asia Pacific achieved a 6%
with Chameleon™, which uses
Market-leading innovations and sales increase with sales reaching record
frequency-controlled pumps to reduce
increasing solutions with existing levels. The region enjoyed strong growth
energy and water required to clean
customers served to offset continuing in China and Southeast Asia, particularly
food processing plants. F&B also
widespread unfavorable market in Thailand and Indochina, as it expanded
leveraged the successful global
conditions in Europe, yielding 4% growth its Professional Products and Pest
DryExx™ dry lubricant technology to
in fixed currency exchange rates for the Elimination programs, added field
help customers achieve water and
region. Europe also realized geographic associates and launched new offerings.
energy savings while improving
growth through further expansion in
workplace safety with the elimination
Eastern Europe, including Russia, HIGHLIGHTS
of wet, slippery floors.
Romania and Bulgaria. In the Middle Drove improved growth in its Australia
Pest Elimination drove new account
East and Africa, Turkey and South Africa business, where innovation, including
sales through investments in its
are creating solid foundations for the launch of Aquamiser, a highly
corporate accounts team, including
continued growth. efficient water reuse system, has led
establishing an expanded sales team to solid business growth and new
in France and accelerating corporate
HIGHLIGHTS account gains.
account growth in the UK. In addition,
Institutional made important gains in Successfully introduced Exelerate™
Pest Elimination introduced new
the retail segment, using the HS, which penetrates dairy soils and
solutions for high-potential markets in
MarketGuard™ program to secure new speeds up the cleaning process for
Europe, and increased customer
corporate accounts. Institutional also dairy pasteurizers and other heated
retention through its Service
introduced comprehensive programs process equipment, while also offering
Excellence program.
that provide a complete suite of savings in water usage and effluent
Middle East and Africa achieved a
products and services for its varied surcharges.
strong sales performance led by
markets, including the 360º of Strengthened the China business
excellent growth in South Africa.
Protection™ program for foodservice infrastructure and added new capacity
Notably, Food & Beverage and Pest
customers, the HotelGuard program to supply our rapid growth with a new,
Elimination secured solid gains
for hospitality customers, and the state-of-the-art manufacturing plant
through the acquisition of new
HealthGuard program for hospitals and in Guangzhou.
customers.
long-term care facilities. Launched proven North American
Textile Care achieved solid growth programs, including the successful
OUTLOOK
through the ongoing success of its 360° of Protection™ program, a
Europe plans to build on the success of
water and energy saving systems, as comprehensive program for
the 360º of Protection™ program and on
well as the introduction of new foodservice, hospitality and long-term
its strengthened distributor network, in
services and products, such as the care customers.
addition to investing in its field teams,
extensions to its successful Turbo line
new technology and new products in
and special oxygen bleaching agent. OUTLOOK
2007. By focusing on customer segments
The business also expanded its Asia Pacific expects strong growth in
and strengthening corporate account
presence in the UK market through the 2007, led by gains in Southeast Asia,
teams across the region, Europe also
acquisition of Powles Hunt, which has China and Hong Kong. The region plans
expects to expand its customer portfolio
annual sales of $5 million. to launch a slate of new products, and
with gains in hospitality, retail, building
Healthcare strengthened its market will expand its Pest Elimination program
services contractors, and food and
leadership in endoscope reprocessing into new markets. It also intends to
beverage.
with Sekumatic Multi-clean, a new increase efficiency in Japan and
formula for cleaning surgical Australia through automated service
instruments, and sterile disinfectants reporting, and will strengthen functional
fueled record growth in the support in areas such as IT, marketing,
pharmaceutical and long-term care R&D and human resources.
markets. In addition, Healthcare
entered the clean room contamination
control products market through the
acquisition of Shield Medicare Ltd.,
a UK-based firm with sales of
$19 million.
14 ANNUAL REPORT 2006

6. CANADA LATIN AMERICA
Canada delivered solid sales growth of Latin America turned in another solid
8% in 2006, driven by strong year of double-digit growth and record
performances in its core markets and sales, increasing sales by 14% in fixed
large hospitality customer gains. currency exchange rates. Key
Investments in the field team, as well as investments in its field team and the
continued focus on Circle the Customer introduction of proven programs from
efforts, created additional synergies other regions helped Latin America make
across the region. significant customer gains and achieve
strong growth.
HIGHLIGHTS
Experienced success with Oasis® 146 HIGHLIGHTS
Multi-Quat Sanitizer, a food contact Launched a new sales automation
hard surface antimicrobial registered tool, which creates specialized,
for sanitizing and disinfecting uses, easy-to-use reports to assist in
gaining sales with independent customer business reviews by
restaurants and chain customers. recording information such as the
Increased its business with quality of results, operational
independent restaurant customers efficiency, customer satisfaction,
with the addition of dedicated sales training of employees and service
personnel and by working with key work performed.
distributor partners. Successfully introduced the 360º of
Leveraged the PERformance™ product Protection™ program for foodservice
line, which offers low-temperature, and hospitality customers, providing
chlorine-free bleaching, as well as the customers with one complete cleaning
Aquamiser water and energy reuse and sanitation program.
system to save customers significant Achieved continued success with
operating costs. DryExx™ dry lube for beverage
Introduced the Sanova® antimicrobial bottling plants, a dry lubricant that
food surface treatment to the protein eliminates the need to use water to
market, secured several new poultry dilute the lubricant, and accelerated
customers and made additional its success with Exelerate™ CIP, a
inroads in the market. premium liquid detergent for milk
Drove growth in the healthcare processing facilities that removes
market with a strong performance in tough soils and rinses faster than
the instrument cleaning segment, as traditional detergents.
well as expansion into the surgical Improved its supply chain efficiencies
scrub segment for operating rooms. with the opening of a state-of-the-art
manufacturing facility in São Paulo,
OUTLOOK Brazil.
In 2007, Canada expects to leverage
additional investments in field service OUTLOOK
tools to drive continued customer gains. In 2007, Latin America expects further
New products should provide Canada strong growth as it drives organic sales
vehicles for further growth, as well as through Circle the Customer – Circle the
offer robust opportunities for Circle the Globe partnerships. Investments in sales
Customer collaboration. force automation, sales training and
supply chain efficiencies should further
spur growth across the region.
ANNUAL REPORT 2006 15