Ecolab to cut 12% of Europe workers in reorganization

(Bloomberg) -- Ecolab Inc., the world's largest maker of cleaning chemicals for hotels and restaurants, plans to eliminate about 900 jobs in Europe in a reorganization.

Cost-cutting measures will reduce expenses by more than $100 million a year, including as much as $5 million in 2011, St. Paul, Minnesota-based Ecolab said today in a statement. About 3 percent of global workers and 12 percent of European employees will be cut, said Michael J. Monahan, an Ecolab spokesman. The actions will cost about $125 million over three years, including $40 million to $60 million in 2011, Ecolab said in the statement.

Ecolab said the changes it's making in Europe include alterations to supply-chain management and the consolidation of offices. The company will see an improvement of about 5 percentage points in its operating margin in its Europe, Middle East and Africa operations over three years, Chief Executive Officer Douglas Baker said in the statement.

Ecolab fell $2.19, or 4.4 percent, to $47.55 as of 11:22 a.m. in New York Stock Exchange composite trading.

Fourth-quarter net income rose 13 percent to $131.3 million, or 56 cents a share, from $115.8 million, or 48 cents, a year earlier, Ecolab said. Profit excluding restructuring costs was 60 cents a share, the company said. That trails the 61-cent average estimate of 13 analysts surveyed by Bloomberg. Sales rose 0.7 percent to $1.58 billion.

First-quarter profit will be 42 cents to 45 cents a share, Ecolab said. That's less than the 48-cent average estimate of eight analysts surveyed by Bloomberg. Full-year profit will be $2.47 to $2.53 a share, the company said. The average estimate of 13 analysts was $2.52.