Item 2.02 Results of Operations and Financial Condition.
On February 16, 2021, Ecolab Inc. (“Ecolab”) announced earnings for the fourth quarter ended December 31, 2020. A copy of the (i) News Release issued by Ecolab in connection with this report under Item 2.02 is furnished and attached as Exhibit (99.1), (ii) Supplemental Data to be used in connection with the conference call to be held discussing the fourth quarter results is furnished and attached as Exhibit (99.2), and (iii) Supplemental Discussion and related materials to be used in such conference call is furnished and attached as Exhibit (99.3), each of which is incorporated by reference herein. Ecolab also will publish the attached exhibits on its website located at www.ecolab.com.
Item 2.05 Costs Associated with Exit or Disposal Activities.
On February 16, 2021, Ecolab announced that it is expanding its Institutional Advancement Program (the “Institutional Plan”), which is a restructuring plan established in 2020 focusing on the Company’s Institutional business. The Institutional Plan, which includes certain activities previously approved as part of the Company’s Accelerate 2020 efficiency initiative (the “Ecolab Efficiency Initiative”), is intended to enhance our Institutional sales and service structure to allow the sales team to maximize service effectiveness by leveraging our ongoing investments in digital technology. Ecolab expects that these restructuring charges will be completed by 2023, with total anticipated costs of $80 million ($60 million after tax). The costs are expected to be primarily cash expenditures for severance costs and facility closures. We also anticipate non-cash costs related to equipment disposals.
Additionally, Ecolab has established revised estimates for its Ecolab Efficiency Initiative following the expansion of the program in 2020 to further leverage technology and structural improvements and the subsequent reclassification of certain activities to the Institutional Plan. Ecolab expects that the restructuring activities under the revised Ecolab Efficiency Initiative will be completed by the end of 2022, with total anticipated costs of $255 million ($195 million after tax) over this period of time, when revised for continuing operations. Costs are expected to be primarily cash expenditures for severance costs and some facility closure costs relating to team reorganizations.
Cautionary Statements Regarding Forward Looking Information
Statements contained in this Current Report on Form 8-K, including statements concerning Ecolab’s restructuring plan, may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. 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 report. In particular, the ultimate results of any restructuring and business improvement actions depend on a number of factors, including the development of final plans, the impact of local regulatory requirements regarding employee terminations, the time necessary to develop and implement the restructuring and other business improvement initiatives and the level of success achieved through such actions in improving competitiveness, efficiency and effectiveness. 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 the company’s other public filings with the Securities and Exchange Commission. 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.
