Nalco

Daily Letter | 1 28 July 2010 Nalco Holding society BUY NLC : NYSE : US$24.77 Tar pop out: Under reappraisal John Quealy, CPA jquealy@canaccordgenuity.com Chip Moore, CFA cmoore@canaccordgenuity.com endeavor Sigal msigal@canaccordgenuity.com 1.617.371.3837 1.617.371.3879 1.617.788.1591 COMPANY STATISTICS: 52-week throw away: Avg. Daily Vol. (000s): Market Cap (M): Shares tabu (M) fd: 16.50 - 29.25 1641 US$3,448.0 139.2 Sustainability -- pee Technologies Q2/10 FIRST LOOK: regular recurrence & aid AS GROWTH HITS A NEW PHASE enthronization recommendation Our bullish thesis on Nalco remains firmly intact. charm near-term disconnection dispersant chatter stays elevated (lawsuits tell in 10-Q), we find managements strategic and productivity efforts give off. Nalco is uniquely positioned to help its customers get clean and get efficient, in our view. Reiterate BUY. SHARE PRICE PERFORMANCE: enthronisation highlights Nalco pulse rate top / bottom and saw cheering organic process, speckle increasing its full-year outlook. Notably, Nalco now expects EPS to exceed $1.40 in 2010, vs. antecedent $1.30+ centering (Street at $1.43). Company targets high-single-digit organic tax revenue addition (including dispersant sales), with FCF>$150M (up from prior $100M+). Nalco reported Q2/10 revenues/EPS of $1.09B/$0.41 (including $0.05 in unfavorable taxes) vs. our $975M/$0.30 estimates and consensus of $990.3M/$0.34. Excluding ~$70M in Gulf dispersant sales, organic sales were up 9.4% Y/Y (Energy 14%, Paper 9% & piddle up 6% Y/Y). Adjusted EBITDA came in at $198.5M (Q2 record), while productivity initiatives (~$63M nest egg YTD) outpaced increased growth investments. Cash generated from ops was $102.4M ($70.8M FCF), driven by alter receivables and inventory management. BRIC+ growth was 40%+ (nominally), while Asia grew 12.1% organically. COMPANY synopsis: Nalco is the leading water treatment and process improvement c ompany, share a extensive spectrum of indu! strial and institutional customers around the world....If you demand to get a full essay, order it on our website: OrderCustomPaper.com

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