Xylem Reports Second Quarter 2022 Results

FEATUREDMINING
Xylem Reports Second Quarter 2022 Results
by Brenna ShumbamhiniAugust 2, 2022
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Robust continuing demand drove robust natural orders development: 1% on a reported
foundation, 6% organically
• Revenue of $1.4 billion, up 1% on a reported foundation, up 6% organically
• Earnings per share of $0.62, adjusted earnings per share of $0.66
• Adjusted EBITDA margin exceeded steering by 160 foundation points
• Raising full-year organic income steering to a spread of 8% to 10% from 4% to
6%, and adjusted EPS to a range of $2.50 to $2.70 from $2.forty to $2.70
Washington, D.C., August 2, 2022 – Xylem Inc. (NYSE: XYL), a quantity one world water know-how
firm dedicated to fixing the world’s most challenging water points, at present reported second quarter
income of $1.four billion, surpassing earlier steering in every enterprise section. Strong continued
international demand drove orders and backlog growth across the portfolio.
Second quarter adjusted earnings earlier than curiosity, tax, depreciation and amortization (EBITDA) margin
was 16.6 %, higher than the Company’s earlier steering and reflecting a year-over-year
decrease of 70 foundation factors. Inflation and the influence of constant chip shortages drove the margin
decline, exceeding the benefits of worth realization and productivity savings. Xylem generated net
income of $112 million, or $0.sixty two per share, and adjusted web revenue of $120 million, or $0.66 per share,
which excludes the impact of restructuring, realignment and particular expenses.
“The group delivered very robust second quarter efficiency on all key metrics, and properly forward of our
steering for the quarter,” said Patrick Decker, Xylem president and CEO. “The result displays our
industrial momentum on continuing underlying demand, disciplined operational execution, and a
moderate easing in chip provide constraints.”
“On the energy of robust backlog and orders growth, and the team’s demonstrated success mitigating
the results of inflation, we are raising our full-year steerage on revenue and earnings. This additional
reinforces our longer-term progress and value creation thesis for Xylem.”
Quadruple expects full-year 2022 natural revenue growth to be in the vary of eight to 10 percent, and three
to five p.c on a reported foundation. This represents an increase from the Company’s previous full-year
natural revenue guidance of 4 to 6 percent, and 1 to 3 p.c on a reported basis. Full-year 2022
adjusted EBITDA margin is now anticipated to be within the vary of 16.5 to 17.0 %, elevating the low end
of the earlier vary of 16.0 to 17.zero p.c. This ends in adjusted earnings per share of $2.50 to
$2.70, raising the low end from the previous vary of $2.40 to $2.70. The elevated guidance displays
robust demand, gradual easing of provide chain constraints and price realization partially offset by
inflation and foreign trade headwinds.
Further 2022 planning assumptions are included in Xylem’s second quarter 2022 earnings materials
posted at www.xylem.com/investors. Excluding income, Xylem provides steerage only on a non-GAAP
foundation as a outcome of inherent problem in forecasting sure amounts that might be included in GAAP
earnings, similar to discrete tax objects, without unreasonable effort.
Second Quarter Segment Results
Water Infrastructure
Xylem’s Water Infrastructure segment consists of its portfolio of companies serving clear water
supply, wastewater transport and therapy, and dewatering.
• Second quarter 2022 Water Infrastructure revenue was $589 million, a 9.zero percent increase
organically in contrast with second quarter 2021. This strong progress was driven by sturdy worth
realization, industrial dewatering demand, and wholesome activity in our wastewater utility business
in the united states and Western Europe.
• Second quarter adjusted EBITDA margin was 21.4 %, up 240 foundation points from the prior
12 months. Reported operating income for the section was $108 million. Adjusted operating income
for the phase, which excludes $3 million of restructuring and realignment, was $111 million, a
14.four % enhance versus the comparable interval final 12 months. Reported working margin for
the segment was 18.3 percent, up 200 basis factors versus the prior year, and adjusted
working margin was 18.8 p.c, up 180 foundation factors versus the prior yr. Strong worth
realization, volume, and productivity financial savings more than offset inflation and strategic
investments.
Applied Water
Xylem’s Applied Water section consists of its portfolio of companies in industrial, industrial building,
and residential applications.
• Second quarter 2022 Applied Water revenue was $429 million, a 7.zero percent improve
organically year-over-year. The phase delivered robust price realization and backlog
execution in industrial and residential end markets, partially offset by continued supply chain
constraints in business buildings in the United States.
• Second quarter adjusted EBITDA margin was sixteen.1 %, down one hundred thirty foundation factors from the
prior year. Reported operating income for the segment was $61 million and adjusted operating
earnings, which excludes $2 million of restructuring and realignment prices, was $63 million, a four.5
% decrease versus the comparable period final yr. The phase reported operating
margin was 14.2 percent, down one hundred thirty basis points versus the prior year period. Adjusted
operating margin declined a hundred and twenty foundation points to 14.7 p.c. Strong value realization and
productivity savings have been greater than offset by inflation and lower volume.
Measurement & Control Solutions
Xylem’s Measurement & Control Solutions section consists of its portfolio of businesses in sensible
metering, community technologies, superior infrastructure analytics and analytic instrumentation.
• Second quarter 2022 Measurement & Control Solutions income was $346 million, down 2.0
% organically versus the prior yr. While chip supply stays constrained, the result’s
higher than our expectations because of improved chip supply within the quarter, and strength in our
water quality test applications.
• Second quarter adjusted EBITDA margin was 9.eight percent, down 410 foundation points from the prior
year. Reported working income for the segment was $(5) million, and adjusted working
revenue, which excludes $3 million of restructuring and realignment prices and $1 million of
shortages, unfavorable mix and higher inflation greater than offset price realization and
productiveness financial savings.
Supplemental information on Xylem’s second quarter 2022 earnings and reconciliations for sure nonGAAP items is posted at www.xylem.com/investors.
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About Xylem
Xylem (XYL) is a number one world water know-how company dedicated to solving important water and
infrastructure challenges with innovation. Our 17,000 various workers delivered income of $5.2
billion in 2021. We are creating a extra sustainable world by enabling our prospects to optimize water
and resource management, and serving to communities in additional than a hundred and fifty international locations become watersecure. Join us at www.xylem.com.
Forward-Looking Statements
This press launch contains “forward-looking statements” inside the which means of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. Generally, the phrases “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,”
“contemplate,” “predict,” “forecast,” “likely,” “believe,” “target,” “will,” “could,” “would,” “should,”
“potential,” “may” and similar expressions or their adverse, might, but aren’t necessary to, establish
forward-looking statements. By their nature, forward-looking statements tackle uncertain matters and
embody any statements that are not historical, corresponding to statements about our strategy, financial plans,
outlook, goals, plans, intentions or goals (including those associated to our social, environmental and
other sustainability goals); or tackle potential or future results of operations or monetary efficiency,
together with statements referring to orders, revenues, operating margins and earnings per share development.
Although we believe that the expectations mirrored in any of our forward-looking statements are
affordable, actual outcomes could differ materially from these projected or assumed in any of our forwardlooking statements. Our future financial condition and results of operations, in addition to any forwardlooking statements, are subject to alter and to inherent risks and uncertainties, lots of that are
beyond our management. Additionally, many of those risks and uncertainties are, and may continue to be,
amplified by impacts from the struggle between Russia and Ukraine, in addition to the continuing coronavirus
(“COVID-19”) pandemic and related macroeconomic situations (including inflation). Important components
that would trigger our actual outcomes, performance and achievements, or business outcomes to differ
materially from estimates or projections contained in or implied by our forward-looking statements
embody, amongst others, the next: the impression of overall business and common financial situations,
together with industrial, governmental, and private and non-private sector spending and the strength of the
residential and industrial actual estate markets, on economic activity and our operations; geopolitical
occasions, including the struggle between Russia and Ukraine, and regulatory, economic and different dangers
related to our world gross sales and operations, including with respect to domestic content
requirements relevant to initiatives with governmental funding; continued uncertainty around the
ongoing COVID-19 pandemic’s magnitude, duration and impacts on our enterprise, operations, progress,
and financial situation; actual or potential other epidemics, pandemics or world well being crises;
availability, scarcity or delays in receiving digital elements (in specific, semiconductors), elements,
and raw materials from our supply chain; manufacturing and working price increases as a outcome of
macroeconomic circumstances, together with inflation, supply chain shortages, logistics challenges, tight labor
markets, prevailing worth modifications, tariffs and other factors; demand for our merchandise; disruption,
competitors or pricing pressures in the markets we serve; cybersecurity incidents or other disruptions of
data expertise techniques on which we rely, or involving our merchandise; disruptions in operations at
our facilities or that of third events upon which we rely; capability to retain and entice senior administration
and other numerous and key talent, in addition to competitors for general talent and labor; problem predicting
our monetary results; defects, security, warranty and liability claims, and recollects with respect to products;
availability, regulation or interference with radio spectrum used by sure of our merchandise; uncertainty
related to restructuring and realignment actions and related costs and savings; our ability to continue
strategic investments for progress; our capability to efficiently establish, execute and integrate acquisitions;
volatility in served markets or impacts on business and operations due to climate conditions, together with
the consequences of local weather change; fluctuations in overseas foreign money exchange rates; our capability to borrow or
refinance our current indebtedness and uncertainty around the availability of liquidity adequate to satisfy
our needs; threat of future impairments to goodwill and different intangible property; failure to comply with, or
changes in, legal guidelines or rules, together with those pertaining to anti-corruption, data privateness and security,
export and import, competition, and the environment and climate change; changes in our efficient tax
charges or tax bills; legal, governmental or regulatory claims, investigations or proceedings and
related contingent liabilities; and different factors set forth under “Item 1A. Risk Factors” in our Annual
Report on Form 10-K for the yr ended December 31, 2021 and in subsequent filings we make with
the Securities and Exchange Commission (“SEC”).
Forward-looking and different statements in this press release concerning our environmental and other
sustainability plans and goals usually are not a sign that these statements are essentially materials to
traders or are required to be disclosed in our filings with the SEC. In addition, historical, present, and
forward-looking social, environmental and sustainability related statements could additionally be based on requirements
for measuring progress which are nonetheless growing, inner controls and processes that proceed to evolve,
and assumptions that are topic to vary in the future. All forward-looking statements made herein
are based on information currently out there to us as of the date of this press release. We undertake no
obligation to publicly replace or revise any forward-looking statements, whether on account of new
info, future occasions or otherwise, except as required by regulation
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