Ecolab Inc.

S&P Global Ratings' stable outlook on Ecolab reflects our expectation that its credit metrics will remain appropriate for the rating over the next two years. We expect weighted-average FFO to debt at or above 30% and debt to EBITDA remaining below 3x, even after factoring in an earnings decline related to the COVID-19 pandemic. Our base case does not factor in any major divestitures given a pending spinoff of its upstream energy business. We could lower our issuer credit rating on Ecolab over the next two years if we expect weighted-average FFO to debt to decline below 30% or debt to EBITDA to exceed 3x, with no immediate prospect of improvement. This could occur if operating performance is worse than

...Near-term end-market demand is affecting certain segments of Ecolab's business. The COVID-19 pandemic and shelter-in-place mandates have significantly reduced demand and traffic at restaurants, hotels, and cruise lines. We expect this weakness to be partially offset by strength for Ecolab Inc.'s cleaning and hygiene products with businesses such as food- and beverage-processing plants and food retailers. The company is well positioned as a global leader in a service-intensive segment of the chemicals sector. Ecolab has expanded organically and through acquisitions, reaching about 10% share in a fragmented market in 2020. Ecolab has consistently generated solid EBITDA margins at or above 20%. Its diversified and stable portfolio of products and services support this pattern. More than 75% of revenues come from relatively stable end markets consisting of safe food, healthy environments, and industrial clean water. The company's weighted-average credit ratios are appropriate for the rating....

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