1. GO
2004
Ecolab Annual Report

2. Description
of Business
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, foodservice, institutional and industrial markets. Founded in 1923 and headquartered in St. Paul, Minn., Ecolab reaches customers in more than
160 countries across North America, Europe, Asia Pacific, Latin America, the Middle East and Africa, and employs more than 21,000 associates worldwide.
Customers include hotels and restaurants; healthcare and educational facilities; quickservice (fast-food and convenience stores) units; grocery stores; commercial
and institutional laundries; light industry; dairy plants and farms; food and beverage processors; pharmaceutical and cosmetic facilities; and the vehicle wash
industry. Products and services are marketed by the industry’s largest and best-trained direct sales-and-service force, numbering more than 12,000 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 Pacific Exchange under the symbol ECL. Ecolab news releases and other selected
investor information are available on the Internet at www.ecolab.com.
Forward-Looking Statements and Risk Factors
We refer readers to the company’s disclosure, entitled “Forward-Looking Statements and Risk Factors,” which is located on page 30 of this Annual Report.
Financial
Highlights
Percent Change
(thousands, except per share) 2004 2003 2002 2004 2003
Net Sales $4,184,933 $3,761,819 $3,403,585 11% 11%
Net Income 310,488 277,348 209,770 12 32
Percent of Sales 7.4% 7.4% 6.2%
Diluted Net Income Per Common Share 1.19 1.06 0.80 12 33
Diluted Weighted-Average Common Shares Outstanding 261,776 262,737 261,574 - -
Cash Dividends Declared Per Common Share 0.3275 0.2975 0.2750 10 8
Cash Provided by Operating Activities 582,464 529,199 423,326 10 25
Capital Expenditures 275,871 212,035 212,757 30 -
Shareholders’ Equity 1,562,519 1,295,426 1,099,751 21 18
Return on Beginning Equity 24.0% 25.2% 23.8%
Total Debt 701,577 674,644 699,842 4 (4)
Total Debt to Capitalization 31.0% 34.2% 38.9%
Total Assets $3,716,174 $3,228,918 $2,865,907 15% 13%
Diluted Net Income Dividends Declared
Net Sales Net Income per Share per Share
(dollars in millions) (dollars in millions) (dollars) (dollars)
$4,185 $0.328
$1.19
$310
$3,762 $0.298
$277 $1.06
$3,404 $0.275
$0.263
$0.245
$210
$206
$2,231 $2,321 $0.80
$0.78
$188
$0.72
2000 2001 2002 2003 2004 2000 2001 2002 2003 2004 2000 2001 2002 2003 2004
2000 2001 2002 2003 2004

3. GO Overview Ecolab
Ecolab has been going strong for Services/Products
Provided
more than 80 years. The last eight
Institutional Textile Care
decades have seen Ecolab grow
Products, programs and services for the Cleaning and sanitizing products, programs and
from a one-product shop to the foodservice, hospitality and healthcare industries, services, including water and energy recycling
leading global partner for including warewashing, on-premise laundry, solutions and data management systems, for
housekeeping, water filtration and conditioning, commercial laundries serving the work wear, linen
cleaning, sanitizing and service
food safety products, specialty kitchen and laundry and healthcare markets.
solutions. We are the trusted products, and pool and spa management.
source for “clean” among Vehicle Care
Kay Cleaning and treatment products and programs for
restaurants, hotels, hospitals, food
Cleaning and sanitizing products, services and professional conveyor, in-bay and self-service car
and beverage plants, laundries, training programs for quickservice restaurants, wash operations and corporate-owned
retail facilities, and commercial, food retail markets, movie theaters and transportation fleets.
convenience stores.
industrial and educational
Water Care Services
institutions. Pest Elimination Water treatment programs for boilers, cooling
Service and technology for the detection, water and waste treatment systems.
identification, elimination and prevention of pests
Wherever you go, Ecolab is there.
in commercial facilities, as well as food safety
We serve customers in more than auditing and training services.
160 countries through our direct
Food & Beverage
sales-and-service force,
Cleaning and sanitizing products, equipment,
distributors and export activities. systems and services for the agribusiness,
In the United States, we have 10 beverage, brewery, pharmaceutical, dairy, meat,
poultry and food processing industries.
complementary business units:
Institutional, Kay, Pest Elimination, Professional Products
Food & Beverage, Professional Janitorial cleaning and floor care products,
systems and services for the retail, building
Products, Healthcare, GCS
services and industrial markets.
Service, Textile Care, Vehicle Care
and Water Care Services. We con- Healthcare
Products and services including healthcare
tinue to expand many of these
personnel hand wash, surgical scrubs, cleaning
services to markets throughout the and disinfection products used in processing
world, delivering our Circle the surgical instruments, and hard surface disinfection
for acute care hospitals, clinics, long-term care
Customer - Circle the Globe
facilities and nursing homes.
promise.
GCS Service
Service and parts for the repair and maintenance
All of these actions are focused on
of commercial foodservice equipment.
fulfilling our main goal:
outstanding results for Ecolab’s Note: All product names and certain information
customers and shareholders appearing in italic type in the text of this Annual Report
are trademarks, brand names, service marks or
everywhere. copyrighted material of Ecolab Inc., Kay Chemical
Company or Ecolab GmbH & Co. OHG.

4. Net Sales Ecolab Business Mix 2004
(dollars in millions)
United States 51% G International 49%
$4,185
G Institutional 25% Europe/Africa/ME 35%
$3,762
$3,404 G Food & Beverage 8% Asia Pacific 7%
G Pest Elimination 5% Canada 3%
G Kay 5% Latin America 3%
G GCS Service 3% Other 1%
G Professional Products 1%
G Healthcare 1%
G Vehicle Care 1%
G Textile Care 1%
G Water Care Services 1%
2002 2003 2004
Customers/Markets
Served
Customers Healthcare facilities Light manufacturing industries
Dairy farms and plants Fleet and vehicle wash
Full-service restaurants
Food, beverage and brewery plants
Quickservice restaurants
Markets
Pharmaceutical and cosmetic facilities
Hotels
Office buildings United States
Food retail
Shopping malls Europe/Africa/ME
Schools
Recreational facilities Asia Pacific
Colleges and universities
Building service contractors Canada
Laundries
Cruise lines Latin America
Hospitals
Foodservice operators
Nursing homes
Sales-and-Service
Ecolab
Associates
Stock Performance
2002 2003 2004 (December 31) 2002 2003 2004
Quarter Low High Low High Low High
Institutional* 3,125 3,190 3,055
First $19.43 $23.94 $23.08 $26.00 $26.12 $28.61
Kay 245 275 325
Second 21.25 24.00 24.21 27.92 27.95 31.77
Pest Elimination 1,555 1,645 1,725
Third 18.27 24.51 23.78 26.80 29.04 31.80
Professional Products** 175 180 95
Fourth 20.71 25.20 25.15 27.89 31.32 35.59
Healthcare** - - 70
GCS Service 530 535 470
Textile Care 85 80 75
Food & Beverage 395 405 450
Ecolab Stock Performance Comparison
Water Care Services 100 95 95
$38
Vehicle Care 100 100 100
∑ Ecolab Stock Price 1.70
$36
Europe/Africa/ME 3,370 3,285 3,915
∑ Ecolab Stock Price Index, Dec. 31, 2001=1.00
$34
Asia Pacific 925 1,015 960
∑ S&P 500 Index, Dec. 31, 2001 = 1.00 1.50
$32
Canada 320 340 355
Ecolab, S&P 500 Indices
$30
Ecolab Stock Price
1.30 Latin America 485 540 590
$28
Total 11,410 11,685 12,280
$26 1.10
$24
*2004 decrease of 250 associates due to
$22 0.90 the sale of a grease management product line.
$20 **2004 reflects the separation of Healthcare
0.70 from Professional Products.
$18
4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q
2001 2002 2003 2004

5. Who says you
can’t have it all?
At Ecolab, we have a talented, global workforce. Strong, proven leadership.
State-of-the-art products and systems. And service that’s second-to-none.
All of this coupled with a drive for results that’s unparalleled.
GO
All of this fueled by a clear vision of the
future and a sound strategy to achieve it. All from the word

6. GO farther. We go the distance for our customers.
2 • GO • Ecolab

7. Almost anywhere in the world, you’ll find dedicated Ecolab associates armed with
the tools and training needed to serve our customers. Our global coverage spans over
160 countries on six continents, with more than 12,000 sales-and-service experts leading
the charge. To the ends of the earth – and everywhere in between – Ecolab is there.
Ecolab • GO • 3

8. GO deeper. We delve into our customers’operations to find
solutions for all their needs.
4 • GO • Ecolab

9. Comprehensive programs like MarketGuard for food retail customers
combine cleaning, sanitation, pest management and floor care to cover every
inch of an operation. And that’s just the beginning.
We examine it all, down to every detail. Who else? Only Ecolab.
Ecolab • GO • 5

10. GO anytime. Whether on Tokyo time, Greenwich Mean or Central Standard,
we’re on the job when our customers need us most.
6 • GO • Ecolab

11. Night or day, around the clock, we respond with energy and expertise
in the face of any challenge. Our quick response and time-saving solutions
help customers keep their operations on track.
Our customers can rest easy, because Ecolab never sleeps.
Ecolab • GO • 7

12. GO above and When it comes to cleaning, sanitation and service,
Ecolab sets the standard. And then surpasses it.
Again and again.
8 • GO • Ecolab

13. beyond.
We work harder. We look closer. We outdo the rest. With an unparalleled portfolio of
products. A passion for discovery. A commitment to continuous improvement. And the
desire to excel. We’re hungry to succeed, and we won’t ever slow the pace.
Ecolab • GO • 9

14. Douglas M. Baker, President and CEO (left)
GO
Allan L. Schuman, Chairman of the Board (right)
We to the ends
of the earth
to deliver superior customer results
and shareholder value.
To our shareholders: effort to contribute to their success. nine years and as an Ecolab associate for 47
As you can see, at Ecolab, the operative We don’t let anything slow us down. We years, remains chairman of the company’s
word is GO. pride ourselves in our ability to manage and board of directors.
Our team of more than 21,000 associates adapt to change. Our successful leadership While Ecolab’s leadership may have
is continually on the move, around the clock, transition proved, once again, the power of changed, there is no question the character
across the globe. We go aggressively – our dedicated team to do just that. Doug and pillars that support Ecolab’s success
anywhere, anytime – to help our business Baker, a 15-year veteran of Ecolab, became remain constant. We’ve never stopped
partners. We work relentlessly to solve their chief executive officer on July 1, retaining his pushing toward our unwavering and
problems. We zealously protect their title of president of Ecolab. Al Schuman, who unstoppable objective: growth. We
reputations. And, above all, we spare no served as Ecolab’s chief executive officer for accomplish this in the same manner we
10 • GO • Ecolab

15. always have – innovative systems and $4.2 billion and increased 11 percent over way the industry approaches floor care. We
second-to-none service for our hundreds of 2003. also unveiled our Grease Exxpress line, which
thousands of customers around the globe. • Operating income was $534 million for includes a high-temperature grill cleaner and
This uncompromising drive for results on 2004, an increase of 11 percent from $483 fast foam degreaser that both significantly
behalf of our customers and shareholders is million in 2003. Operating income speed up the grease removal process in
nothing new. Ecolab has been aggressively represented 12.8 percent of net sales, restaurants and foodservice operations.
driving growth for more than 80 years. consistent with last year’s 12.8 percent, and The Gatekeeper and Gatekeeper XP
Certainly a lot has changed since we began. was led by differentiated new products and traps allow for discreet, pesticide-free rodent
We started out as a one-employee operation operating efficiencies. protection both indoors and out. Our CanCare
selling a single cleaning product to a handful • Diluted net income per share was $1.19 technology prevents corrosion, spotting and
of hospitality customers. Today we’re a for 2004, up 12 percent from $1.06 in 2003. scale buildup on canned products that use
growing $4+ billion enterprise that provides a Excluding unusual items, diluted income per water for process heating and cooling. And
myriad of differentiated cleaning, sanitation share from ongoing operations increased 16 Asepti-Solid II offers exceptional instrument
and service offerings to customers in an array percent from $1.03 in 2003. cleaning for healthcare facilities with hard
of industries the world over. Our success is • Our return on beginning shareholders’ water issues.
based, in large part, on the fact that we equity was 24 percent for 2004, the 13th You can see more of our latest offerings
never run from a challenge. consecutive year in which the company in the “Review of Operations” section of
Our culture – spirit, pride, determination, exceeded its long-term financial objective of this report.
commitment, passion and integrity – a 20 percent return on beginning The No. 1 sales force in the industry
continues to thrive throughout Ecolab’s global shareholders’ equity. grew even bigger and better in 2004. We
ranks, keeping us focused squarely on • Ecolab’s share price rose 28 percent in added more than 800 new associates to our
tomorrow and our unstoppable quest 2004 – outperforming the Standard & Poor’s global field organization, which is now over
for growth. 500 by 19 percentage points. In addition, we 12,000 members strong. And their expertise
The strength of our Ecolab culture has increased our annual dividend rate for the reached a new level as well, with the
never changed – and never will. Nor will our 13th consecutive year as it rose 9 percent in addition of robust training initiatives
company’s unwavering commitment to December 2004 to an annual rate of $0.35 including Ecolab University online and cross-
excellence in everything we do, from per common share. functional mentoring programs.
developing the latest product, system and • We achieved record cash flow from
service innovations for our customers to operating activities of $582 million, and our GO Acquisitions
delivering consistently strong returns to our total debt to capitalization ratio declined to & divestitures
many valued shareholders. 31 percent. These results allowed us to again We further expanded our wide-ranging
Ecolab is well-positioned to go as far as earn a debt rating within the “A” categories food safety offering with the acquisition of
our imaginations can take us – as our most of the major rating agencies during 2004. Daydots International in February. Daydots,
recent performance clearly demonstrates. based in Fort Worth, Texas, is a manufacturer
Here is a rundown of our 2004 GO Product offerings and supplier of food safety products,
accomplishments: & service capabilities including food rotation labels and food
In 2004, we continued to go to great preparation and handling bags. Its sales were
GO Financial lengths to deliver innovative new solutions to approximately $22 million. Daydots helps
performance our customers. We introduced our pioneering customers in more effective and safe
We are pleased to report that Ecolab’s enzyme-based no-rinse floor cleaner, management of their food inventory, food
net sales for 2004 reached a record-breaking Wash ‘n Walk, which is revolutionizing the handling and other kitchen product needs
Ecolab • GO • 11

16. through unique food labels and handling bags. GO Leadership team GO Recognition
• In April, we sold a $20 million grease As mentioned earlier in this letter, we & achievement
management product line to National Fire executed a smooth leadership transition when For the fifth straight year, Ecolab was
Services of Gurnee, Ill. This action allows us Doug Baker succeeded Al Schuman as CEO, proud to be named to Business Ethics
to focus our resources where we believe they effective July 1, 2004. Doug had served as magazine’s list of the “100 Best Corporate
can generate greater customer and president and COO since 2002, and has been Citizens” in America. As always, it is an honor
shareholder value. with Ecolab since 1989 in a variety of to be included on this elite list, which
• In May, we purchased Elimco, a $4 business leadership positions. Doug was also applauds corporate integrity and good
million pest services provider based in Cape elected to Ecolab’s board of directors in citizenship. This year we were proud to be
Town, South Africa. This acquisition, along February 2004. ranked 10th on the list. We have a great
with the earlier pest services acquisitions in Other significant developments in our responsibility to all of our stakeholders, and
the United Kingdom and France, supports leadership team include: we continue to focus on doing what’s right for
Ecolab’s efforts to build a worldwide Pest • In May, we were pleased to welcome our associates, our customers and our
Elimination organization. the return of Phil Mason, who is now shareholders.
• In June, we acquired VIC International’s executive vice president of Asia Pacific and Ecolab was also named as one of the
restoration and maintenance business unit Latin America. Phil previously worked at best companies for sales professionals by
located in Knoxville, Tenn. The business, Ecolab from 1974 to 1997, and was Selling Power magazine. We’ve always
which focuses on professional stone care instrumental in building our international known Ecolab’s most important asset is its
products designed to protect, repair and business in Asia. We are fortunate to have dedicated sales-and-service team. This
restore natural stone floors, had annual sales someone with Phil’s experience and business recognition is a terrific acknowledgement of
of approximately $5 million. savvy lead these important growth regions. our efforts to carefully select, train,
• In July, we acquired Alcide, a Redmond, • After 30 years of service, Maurizio Nisita compensate and develop our field associates.
Wash.-based producer of biocidal and retired from Ecolab in June. Maurizio most In addition, Ecolab was also highlighted
sanitation products that are primarily used in recently served as Ecolab’s senior vice as one of the 26 “Best-Managed Companies
the agribusiness, meat and poultry industries. president of Global Operations, overseeing in America” by Forbes magazine. This was a
It had worldwide sales of approximately $24 the company’s 55 manufacturing plants and reaffirmation of our commitment to ongoing
million in calendar 2003. Alcide offers Ecolab distribution centers around the globe. His talent development, performance and results.
proven, valuable technology that will provide unwavering commitment to exceptional We were proud to receive recognition for
a great addition to our product offering for our standards secured consistency and uniformity these efforts.
food and beverage customers, and for hard of Ecolab’s products on a global basis.
surface and skin sanitation in other markets. • And in February 2005, William L. Jews Outlook for 2005:
• And, in January 2005, we announced our retired from Ecolab’s board of directors. Bill The message is clear: At Ecolab, we
acquisition of Midland Research Laboratories, had served on Ecolab’s board since 1999, never stop. We GO.
a $16 million Lenexa, Kan.-based provider of most recently as a member of the Audit In 2005 and beyond, we aim to establish
water treatment products, process chemicals Committee and as the chair of the Finance the industry’s next level of performance and
and services for the commercial, institutional, Committee. We thank Bill for his strong deliver the best results for our customers and
industrial, food and sugar processing markets. counsel and outstanding service to Ecolab, shareholders. We’re aggressively pursuing
This acquisition reflects Ecolab’s ongoing and wish him well. higher growth by focusing on the key areas of
interest in water care products and services our Circle the Customer - Circle the Globe
for the middle market. strategy: building our core businesses;
investing in new products, programs and
12 • GO • Ecolab

17. businesses; and backing them up with global scale, and we plan to further expand provide the highest level of professional,
outstanding service. our global presence along the way. We took a personalized service that our customers have
That’s why we offer answers to just quantum leap toward this goal in 2004 by come to rely on.
about every type of cleaning, food safety and establishing our U.S. Healthcare Division, We will press ahead to accomplish these
brand protection issue that anyone can catering to the needs of a growing $3 billion aggressive goals as we move forward, not
imagine. That’s why our products and services market. We’re also rapidly rolling out our only in 2005, but also every year thereafter.
not only produce sparkling clean and hygienic proven Pest Elimination services to new You won’t see us waiting around for
results, but at the same time help save in locations across the globe. And we’re opportunities to come to us. We can’t wait to
major cost areas like water, energy and labor. advancing our core business throughout the go after them.
And that’s why we continue to introduce inno- world with small chains and independent Ecolab is ready for the future. Just
vative technologies to make our customers’ operators in the restaurant and food and watch us GO!
lives easier – cleaner – and better. beverage manufacturing markets, which
As always, new products and programs represent tremendous growth opportunities.
will help lead the charge. Ecolab’s research Above all, we remain committed to
and development team is dedicated to raising growing our global sales-and-service force. Douglas M. Baker
the standard of clean throughout the globe. We already have the largest, most dynamic President and Chief Executive Officer
They strive to elevate industry benchmarks field presence in the industry, and we are
and stay well ahead of the competition. They persistent in making key investments to
tackle this challenge with tenacity and enhance our abilities. We continue to equip
determination – because they relish being our team with the right technology, tools and Allan L. Schuman
the best. training to tackle any challenge. And they Chairman of the Board
We’re driving these advancements on a possess the knowledge and know-how to
Some things should never change – Doug Baker,
and never will President and Chief Executive Officer
In the months leading up to July 1, when I took the reins as Above all, we’re not going to
Ecolab’s new chief executive officer, the same question cropped up change the caring, which is the
in meetings both inside and outside of Ecolab. What are you going heart of the Ecolab culture. We
to change when you become CEO? believe in the real meaning
I think some people were afraid of my response – after all, behind the words spirit, pride,
Ecolab has a long legacy of industry leadership, aggressive growth determination, commitment, passion and integrity, which guide us
and superior shareholder returns. Believe me, we’re certainly not in our daily actions. We care about our customers and one another,
letting up now. and we will do what’s right to succeed.
So when people ask me what’s going to change, I start by But I am committed to change one thing: With the help of all
telling them what’s not going to change. of our associates, we will improve the value of the business and
We’re not going to change the passion. I love Ecolab, and I’m our capabilities – all for the better, each and every day. With more
not alone. It’s a great place to work. We bring our hearts and than 21,000 talented and determined associates around the world
heads to work every day, and put them to good use. It’s truly an giving it everything they’ve got, we can’t go wrong.
incredible team. Ecolab is clear about its mission: Exceed the expectations of
We’re not going to change the attitude. My predecessor Al our customers, achieve excellent returns
GO
Schuman taught us to “think big, act big and be big.” That’s our for our shareholders, and work together
attitude, and it will always remain our attitude. It fuels our to help everyone in our organization be
aggressiveness and pushes us to go after all the goals we want successful. These things should never
to – and will – accomplish. change – and never will.
Ecolab • GO • 13

18. GO Review of 2004
Operations
Energy. Velocity. Drive. GO.
The Grease Exxpress line,
Ecolab’s operating divisions and business
including its Fast Foam
units keep going strong every day.
Degreaser and High-Temp
Our customers rely on Ecolab to provide
Grill Cleaner, uses fast-
products, systems and service expertise to
acting chemistry to
help streamline their operations.
significantly speed up the
And Ecolab delivers.
grease removal process in
restaurants and
The following is a detailed summary of
foodservice kitchens.
2004 and projected outlook for 2005 from
each of our core businesses.
United
Outlook new grill cleaner, a reformulated Glass &
States Institutional should benefit from improved Multi-Surface Cleaner and Spot Mop, a
Institutional market conditions in 2005, building upon unique flat mop with a quick-drying,
The rollout of one of the strongest slates of recent strong product technology launches, handle-mounted cleaner.
new, differentiated products in recent history • Enabled online food safety and pest
along with increased sales headcount and
propelled the Institutional Division as sales improved field training. The division continues elimination reporting to all food retail
rose 5% to record levels, improving across its to upgrade its anchor technologies of customers as part of MarketGuard, a key
business units in 2004. warewashing, laundry and housekeeping cross-divisional initiative that integrates
while building its water filtration portfolio the best food safety, pest elimination and
Highlights through new alliances with outside floor care solutions to help food retailers
• Launched a host of new products, including technology leaders. The division will also achieve the highest standards of
Wash ‘n Walk, which revolutionizes floor expand its business with independent cleanliness.
cleaning by reducing grease buildup on • Entered the movie theater market and
customers, and with the addition of long-term
floors, and Grease Exxpress, which care facilities and beverage line cleaning. gained several chain accounts with a
dramatically reduces cleaning time for comprehensive cleaning program and
restaurant grills. Kay specialty products.
• Introduced the Force family of ready-to-use • Strengthened training and certification
Kay achieved outstanding growth, as sales
light- and heavy-duty grease and soil rose 16% with gains realized across all of its requirements for its field team, improved
removers that are best-in-class solutions. markets in 2004, thanks to a compelling value sales productivity and implemented safety
• Acquired Daydots International, a leader in proposition, corporate account gains and new and diversity initiatives.
food safety products such as food rotation product innovations.
labels and food preparation bags, thereby
enhancing Institutional’s food safety Highlights
offerings and adding a strong catalog • Continued to drive sales The Spot Mop
marketing capability to the division’s in the quickservice encourages spot cleaning
portfolio. restaurant and food every 30 minutes of heavy
• Drove growth with independent restaurants retail markets, thereby foot-traffic areas such as
via Quick Snap, a highly effective new gaining market share movie theater lobbies,
product line with convenient packaging and and further quickservice restaurants
case sizes. strengthening Kay’s and public restrooms by
• Improved training programs, added sales reputation as the leader featuring a lightweight,
associates and reinforced its commitment in cleaning, sanitation ergonomically correct
to preventive maintenance and outstanding and brand protection for handle with a mounted
response times. these markets. product dispenser.
• Introduced several
quickservice restaurant
products, including a
14 • GO • Ecolab

19. is well-positioned and will continue to drive
growth by investing in its associates through
training and additional headcount.
The discreet Gatekeeper XP offers
preventive exterior protection by securing
Professional Products
rodents before they can enter a facility.
After repositioning the skin care and
instrument care portion of its healthcare
business as a separate division, Professional
Products focused on its core markets and
gaining market share.
• Created a co-marketing program with a
Outlook
Kay will continue to enhance its leading major distributor partner, resulting in a Highlights
• Created a Corporate Accounts group and
market position and strong corporate account significant increase in “street” accounts
relationships in 2005 to further drive growth. such as independently owned and operated realigned resources as it focused on key
Kay expects continued strong gains in 2005 restaurants. markets of building service contractors,
• Introduced the new Gatekeeper and
across all markets, driven by a healthy mix of retail and healthcare.
• Phased out a non-strategic janitorial
new corporate chain accounts, organic growth Gatekeeper XP interior and exterior rodent
with existing customers, and new product and traps, which secure pests in discreet units equipment distribution business and a
service offerings. The division will also roll disguised as heating vents. segment of its specialty product sales.
• Launched the Allur-Ring cockroach bait • Launched its comprehensive Bright FX High
out online MarketGuard reporting to select
quickservice restaurants. station, a portable, dual-action device that Performance Floor Care System, unveiling
monitors and eliminates cockroaches. innovations designed to whiten and
• Enhanced its service to the hospitality
Pest Elimination brighten floors in high-traffic retail
Pest Elimination posted strong, double-digit industry with new bed bug and fruit fly environments.
• Introduced its STEPsCheck Quality
growth in its food retail, government and non- service protocols.
• Continued its successful MarketGuard
food retail markets in 2004, resulting in a Assurance System, an electronic-based
10% sales gain. Sales to existing customers program, through which the division’s technology that allows facility managers to
were also strong, thanks to innovative product offerings are marketed alongside those quickly and easily audit their staff’s
offerings and exceptional service. from the Kay and Professional Products adherence to established cleaning criteria.
• Broadened its floor care offerings for stone
divisions.
• Experienced dramatic growth in its EcoSure
Highlights surface restoration and maintenance.
• Launched EcoPro FS to the full-service • Created the M.O.R.E. (Management of Risk
advanced quality assurance business by
restaurant segment. The program includes focusing on an integrated approach to food Exposure) program, which helps reduce
the core Pest Elimination program, along safety, workplace safety and consumer slips and falls, and also offers incident
with service for fruit flies and ants, which experience evaluations. response and claim support services.
are common problems for foodservice
operations. Outlook Outlook
In 2005, Pest Elimination expects to further With its strengthened product offerings in
penetrate its key food retail, non-food retail, place, Professional Products expects to
quickservice restaurant and government achieve solid growth in 2005, driven by a
markets. The division expects improved focus on food retail products and new
growth rates in its full-service restaurant and opportunities. It will strengthen its service
hospitality markets on the strength of new network through strategic personnel additions
product and service offerings. Pest Elimination in key markets. The division plans to continue
The time- and labor-
saving Phazer Mobile
Floor Care System
features a backpack
container, MonoStar
EcoSure provides advanced quality assurance floor finish, and a
services for food safety, workplace safety and microfiber applicator
consumer experience through on-site evaluations, and pad.
real-time reporting and training for foodservice,
retail and hospitality managers.
Ecolab • GO • 15

20. • Completed administration agreements with
select major national chains for ongoing
Ecolab’s popular
maintenance and repair as part of the
Asepti-Solid System now
division’s approach toward more
includes an alkaline
nationwide marketing in 2005.
detergent and acid rinse that
• Introduced a number of differentiated
deliver superior instrument
offerings, including customized service
cleaning to healthcare
reporting tools that provide key operational
facilities with hard water
information for chain customers and
issues.
equipment manufacturers.
• Strengthened its management team, adding
key Ecolab associates with successful
service experience.
• Significantly increased sales of both liquid
to generate differentiated floor care
Outlook
technology, and will work closely with its and solid products for the instrument care
GCS Service expects improving results
European counterpart to accelerate equipment segment through aggressive sales efforts
throughout 2005, benefiting from its recent
and product launches in both regions. led by Ecolab’s strong product
investments. Its customer-driven solutions and
differentiation.
• Achieved high sales growth in its waterless investments in technical solutions will help
Healthcare
expedite sales growth and momentum going
In its first year as a separate division, skin care category, fueled by Endure and
forward. The division also plans increased
Healthcare sales rose 6%, achieving double- Quik-Care product effectiveness, and
corporate account business, delivering its
digit growth in its core markets. recommended hand hygiene guidelines
enhanced service levels and cross-divisional
for hospitals.
relationships with Ecolab’s existing
Highlights
• Delivered significant growth in its central customer base.
Outlook
sterile processing market with the launch of Healthcare foresees double-digit growth in
Textile Care
Asepti-Solid II, which provides excellent 2005 from its core markets as it expands its
Textile Care sales rose 6% in 2004, benefiting
results for surgical instrument cleaning in product portfolio in its target markets of
from important corporate account gains,
hard water and other difficult cleaning infection prevention, operating rooms and
differentiated offerings and a renewed focus
situations. sterile processing. It anticipates additional
• Introduced a convenient, 1.25-ounce size of on marketing its value-added services. The
customer contract gains, along with continued
division also realized improved profitability
its popular Endure 320 antimicrobial growth in its instrument care solids line.
during the year.
handwash, providing easy access for Going forward, the division will promote its
hospital staff in the fight against core products, technology and distribution
nosocomial infections, which are infections channels as it simultaneously invests in and
that take place or originate in hospitals. pursues additional headcount, R&D, marketing
and acquisition opportunities. Ecolab’s Aquamiser, an efficient
water reuse system, and Energy Optimiser
GCS Service (shown here), a self-cleaning heat
Led by a new management team, GCS Service exchanger, help reduce water consumption
focused on improving operations and and energy costs in commercial laundries.
infrastructure to further develop its scalable
business model for future growth. The
business achieved positive trends in its key
performance metrics – including increased
productivity and customer satisfaction –
during 2004 and is poised for sales growth
and profitability improvement in 2005.
Highlights
• Achieved additional improvements in its
centralized Customer Service Center,
technician productivity and customer
Ecolab’s GCS Service Division is the
satisfaction ratings. Ongoing investments
leading nationwide provider of repair,
to further enhance service capabilities will
customized care programs and services
be made, but the transition to its
for commercial foodservice equipment.
centralized facility has been completed.
16 • GO • Ecolab

21. Highlights Highlights
• Acquired Alcide Corporation, a $24 million • Posted strong gains in the food and
producer of biocidal and sanitation products beverage industry, canning market and
for the agribusiness, meat and poultry corporate accounts, thanks to aggressive
industries, thereby increasing customer cross-selling and expansion with existing
coverage, further accelerating growth and customers.
• Strengthened its field organization by
increasing new product development.
• Added Sanova to Ecolab’s product portfolio increasing sales staff in key metro areas,
with the acquisition of Alcide. This accomplishing division-wide training and
effective antimicrobial is a high-value food investing in its R&D and marketing areas.
• Secured long-term contracts with key
safety intervention used in the processing
of red meat, poultry, seafood, and fruits and corporate accounts, including major
vegetables. In addition, the Udder Gold customers in the food and beverage and
brand of teat dips for dairy farms is a hospitality industries.
Food & Beverage’s Solodigm
• Launched its highly effective CanCare
premier global brand.
clean-in-place program is designed to
• Undertook an aggressive new account technology, which prevents corrosion,
reduce cleaning time and water
effort, winning significant new business as spotting and scale buildup on canned
consumption for dairy processors and
the division pursued its comprehensive products that utilize water for process
cheese manufacturers.
EcoShield plant protection effort. EcoShield heating and cooling.
• Enjoyed continued success of Blackwater
is a tailored program that combines
industry-specific solutions for both food 100, which helps prevent costly blockages
Highlights safety and operational efficiency. in onboard plumbing lines on cruise ships.
• Gained new corporate account business, • Enhanced its strong corporate relationships
including a significant account with one of in support of Ecolab’s Circle the Customer Outlook
the largest suppliers of uniforms and strategy, resulting in significant cross- Water Care Services expects its investments
business apparel in North America. divisional sales, organic growth and in sales personnel and training to accelerate
• Effectively marketed its differentiated improved customer results. growth in 2005. The division anticipates
• Posted record growth in its meat and dairy
offerings, including Ecoport, a powerful tool additional gains in its corporate account
that tracks water and energy usage in order markets. portfolio as it continues to enhance its
to optimize plant production. product and service tools, which provide
• Furthered Ecolab’s Circle the Customer Outlook added value to its customers.
strategy by partnering with Water Care Food & Beverage expects solid sales growth
Services to treat both wash aisle and in 2005, driven in part by its increased Vehicle Care
wastewater at key corporate accounts. presence in the meat and poultry industries Vehicle Care faced difficult weather
• Aggressively pursued new business following the Alcide acquisition. The division’s conditions in 2004, with record periods of rain
opportunities with its Aquamiser water continued emphasis on a comprehensive and cold that affected the entire industry, as
reuse system and the Energy Optimiser, a approach to food safety and intervention, as well as the detrimental effects of rising gas
heat exchange system that helps reduce well as its planned extension of new product prices. Despite these challenges, the division
energy costs, improve rinsing results and technologies to additional markets, should increased both its market share and
reduce drying times for professional help sustain growth despite industry-wide operating income.
laundries. challenges such as rising freight and raw
material prices.
Outlook
Despite continuing market challenges, Textile Water Care Services
Care plans to achieve higher sales again in Water Care Services enjoyed a strong year, as
2005 by building on its recent corporate it achieved 10% sales growth by focusing on
account gains and differentiated offerings. key cross-divisional sales opportunities in the
The division expects good growth in the food and beverage industry, as well as
healthcare market, and will aggressively corporate accounts.
pursue increased market share as it
simultaneously reduces internal costs and
focuses on profit improvement.
Blue Coral Solid Gold delivers
Food & Beverage concentrated power and solid
Food & Beverage achieved stronger growth in performance to car wash
2004, with sales up 9%, spurred by a operators in a lightweight,
significant acquisition, improved field convenient package.
productivity, new initiatives and growth in its
meat, poultry, dairy and beverage segments.
Ecolab • GO • 17

22. • Professional Products
Highlights
• Launched next-generation products in its helped offset the
solids area, including Blue Coral Solid Gold‚ effects of industry-wide
The BarGuard
which substantially improves cleaning, consolidation with
System is an
efficiency and ease-of-use while reducing successful new product
automatic
equipment maintenance for in-bay initiatives, including
beverage tube
customers such as convenience stores. Phazer, a mobile floor
cleaning program
• Achieved record sales in its detailing finishing system that
that increases
segment through new contracts with major features a backpack and
beverage quality
car dealerships, auto refurbishing and microfiber applicator to
and customer
auction chains. This important business is dramatically increase
satisfaction.
less affected by weather changes and efficiency, and Healthguard, a
offers attractive growth opportunities. hospital cleaning system that improves
• Established multi-year contracts with hygiene, ergonomics and productivity.
• Textile Care secured major customers with
several of the largest tunnel/conveyor
Highlights
chains in the nation, gaining multiple sites its popular Aquamiser, an efficient water
• Achieved strong Institutional growth with
in many different states. reuse system that reduces water
corporate account customers and
• Introduced a strong, new Black Magic consumption, and Energy Optimizer, a self-
independent restaurants. Institutional also
product for the online tire dressing market. cleaning heat exchange system that helps
completed the Japanese launch of
reduce energy costs.
LaunderCare, a comprehensive range of
• Healthcare’s solid growth, led by the United
Outlook
products and equipment for on-premise
Vehicle Care expects to show improved Kingdom and Germany, was driven by
laundries at nursing homes and hotels, and
results in 2005. The division will continue its success with government contracts and
launched FlowTech, a convenient dispenser
expansion strategy in the detailing, trucking geographic expansion.
and solid detergent for independent
• Pest Elimination expanded its international
and fleet segments, as well as explore new
restaurants.
vehicle wash segments. In addition, Vehicle presence through the acquisitions of
• Gained Food & Beverage market share with
Care plans to launch a polymer-based Nigiko, a $55 million Paris-based
its enhanced lubricant programs, which
protectant that helps shed water and dirt with commercial provider, and Elimco, a $4
offer superior performance for beverage
proven efficacy. million South African provider, as Ecolab
and brewery customers, and posted double-
continues to bring its proven premium
digit growth in China through sales to
International service to new global markets with good
breweries, beverage producers and
growth potential.
dairy plants.
Europe/Africa/
• Expanded its Pest Elimination business,
Middle East & Export Outlook
gaining new sales through Ecolab’s Circle
Europe achieved steady growth as sales rose Europe foresees continued growth in 2005 on
the Customer approach and an emphasis on
8%, driven by strong product offerings, cross- the strength of new product launches,
hiring and training skilled associates.
divisional distributor partnerships, a pan- increased headcount, corporate account gains
Ecolab also entered the Pest Elimination
European approach to offset sluggish markets and cross-divisional distributor relationships.
business in Malaysia, the Philippines
in the central regions and a Pest Elimination Key Institutional programs such as BarGuard
and Indonesia.
acquisition that bolstered the product are expected to grow business with
portfolio. The Middle East and Africa independent restaurants, and
businesses posted moderate growth despite foodservice distributor
turbulence in some areas. relationships will be aggressively
expanded. The division also plans
The flexible
Highlights to focus on healthcare
LaunderCare program
• Institutional sales showed solid growth, opportunities such as nursing
features ultra-
leveraging successful product launches homes and clean rooms.
concentrated laundry
including X-Streamtec, a revolutionary new
products designed to
warewashing system, and BarGuard, the Asia Pacific
enhance the efficiency
world’s first fully automated beer and Asia Pacific leveraged a 4% sales
of laundry operations by
beverage line cleaning system. Institutional gain to post a solid profit
reducing washing time,
also boosted growth in the independent improvement in 2004, led by
water usage and energy
restaurant segment. strong performances from its East
costs while maintaining
• Food & Beverage sales rose, benefiting Asia and New Zealand businesses
whiteness and
from ongoing success with existing that helped offset weak markets in
prolonging linen life.
products and innovative new introductions Japan.
such as Oxysan ZS, a disinfectant for
brewery, beverage and dairy customers.
18 • GO • Ecolab

23. Highlights
• Strengthened Institutional sales through
the launch of its LaunderCare line,
The revolutionary enzyme- providing significant energy, water and
based Wash ‘n Walk no-rinse labor savings for customers such as hotels
floor cleaner literally eats and commercial laundries.
grease off kitchen floor tiles • Continued its successful penetration of the
and grout, improving retail supermarket segment with the cross-
appearance and helping to divisional MarketGuard program, which
reduce the chance of slips combines services and solutions from Pest
and falls. Elimination, Kay and Professional Products.
• Began rolling out its new natural stone care
line, which offers easy, cost-effective
maintenance and restoration of marble,
granite and limestone floors for hospitality,
Outlook Outlook retail and commercial customers.
Asia Pacific plans to accelerate growth in In 2005, Canada’s Institutional business will • Expanded geographic coverage by
Australia and Japan in 2005 through new build on a strengthened route program, realigning Export businesses in Peru,
programs and by “circling” existing customers momentum with “street” accounts and 2004’s Ecuador and Bolivia.
with additional solutions. East Asia’s high new product offerings to seek attractive
growth rate is expected to continue despite growth and expand market share. The Food & Outlook
the ongoing challenge of rising oil prices. The Beverage area has an aggressive plan that Latin America foresees continued strong
MarketGuard supermarket program and encompasses a renewed focus on corporate growth in 2005 as it launches an array of new
Ecolab’s floor care offerings will help drive account gains across its markets, supported products and aggressively expands into new
Institutional growth, specifically in China, by investments made this year in sales-and- markets and new geographies. As tourism
Korea and Thailand. The business will also service associates and education. markets rebound, Institutional will benefit
invest in additional sales-and-service from new product launches in its laundry,
associates and will pursue attractive Latin America housekeeping and retail segments. Food &
acquisitions to help drive growth. Despite ongoing political and economic Beverage will emphasize corporate account
uncertainties, the Latin America business had gains and new product penetration in the
Canada an excellent year. The region achieved 13% beverage, brewery and food markets. Pest
Canada sales increased 4%, led by new sales growth and improved earnings through Elimination will continue its rapid growth
products, corporate account gains and market robust growth in Institutional, Food & through geographic expansion and ongoing
share increases among independent Beverage and Pest Elimination segments cross-divisional efforts.
restaurants and breweries, as well as a across all regions.
favorable economic rebound in domestic and
international travel.
Highlights
• Signed new, long-term Institutional
corporate account agreements and aggress-
ively took “street” (independent restaurant)
business from the competition through
direct sales and distributor partnerships,
Our professional stone care
resulting in double-digit growth.
line offers solutions for stain
• Enjoyed success from the launch of several
protection, cleaning,
new Institutional products, including
maintenance, polishing and
Wash ‘n Walk and Grease Exxpress.
restoration of a variety of
• Introduced new Food & Beverage offerings
natural stone floors.
such as Emerald teat conditioner for the
agricultural segment, Lubodrive FP/FP+ low-
foam lubrication for beverage production,
and Bottleguard ACP, which improves
cleaning and rinsing for the returnable
bottle industry.
• Secured a new, multi-year corporate
account agreement with a major dairy
customer and generated significant sales
with large fisheries.
Ecolab • GO • 19

24. GO Financial 2004
Discussion
Contents
Overview for 2004 21
Critical Accounting Policies and Estimates 21
Operating Results 23
Operating Segment Performance 24
Financial Position 28
Cash Flows 28
Liquidity and Capital Resources 29
Market Risk 29
Subsequent Events 30
Forward-Looking Statements and Risk Factors 30
Consolidated Statement of Income 31
Consolidated Balance Sheet 32
Consolidated Statement of Cash Flows 33
Consolidated Statement of Comprehensive 34
Income and Shareholders’ Equity
Notes to Consolidated Financial Statements 35
Reports of Management and
Independent Registered Public Accounting Firm 51
Summary Operating and Financial Data 52
20 • GO • Ecolab