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 sturdy organic orders growth: 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.sixty two, adjusted earnings per share of $0.sixty six
• Adjusted EBITDA margin exceeded steering by one hundred sixty basis points
• Raising full-year organic revenue guidance to a variety of 8% to 10% from 4% to
6%, and adjusted EPS to a spread 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 global water technology
firm dedicated to fixing the world’s most challenging water issues, today reported second quarter
revenue of $1.4 billion, surpassing earlier steerage in every business phase. Strong continued
international demand drove orders and backlog growth throughout the portfolio.
Second quarter adjusted earnings earlier than interest, tax, depreciation and amortization (EBITDA) margin
was 16.6 percent, higher than the Company’s previous guidance and reflecting a year-over-year
lower of 70 foundation points. Inflation and the impression of constant chip shortages drove the margin
decline, exceeding the benefits of price realization and productivity savings. Xylem generated internet
income of $112 million, or $0.62 per share, and adjusted web income of $120 million, or $0.66 per share,
which excludes the influence of restructuring, realignment and particular costs.
“The team delivered very sturdy second quarter performance on all key metrics, and properly forward of our
steering for the quarter,” stated Patrick Decker, Xylem president and CEO. “The end result reflects our
business momentum on continuing underlying demand, disciplined operational execution, and a
reasonable easing in chip provide constraints.”
“On Little-known of sturdy backlog and orders progress, and the team’s demonstrated success mitigating
the results of inflation, we are raising our full-year steerage on income and earnings. This further
reinforces our longer-term growth and worth creation thesis for Xylem.”
Outlook
Xylem now expects full-year 2022 organic income progress to be in the range of eight to 10 percent, and 3
to 5 percent on a reported foundation. This represents an increase from the Company’s previous full-year
natural income steering of four to six %, and 1 to three percent on a reported basis. Full-year 2022
adjusted EBITDA margin is now anticipated to be in the vary of sixteen.5 to 17.0 %, raising the low finish
of the earlier vary of 16.0 to 17.0 p.c. This ends in adjusted earnings per share of $2.50 to
$2.70, elevating the low end from the earlier range of $2.40 to $2.70. The increased steerage displays
sturdy demand, gradual easing of supply chain constraints and price realization partially offset by
inflation and international trade headwinds.
Further 2022 planning assumptions are included in Xylem’s second quarter 2022 earnings supplies
posted at www.xylem.com/investors. Excluding income, Xylem supplies guidance solely on a non-GAAP
foundation as a end result of inherent issue in forecasting sure quantities that would be included in GAAP
earnings, such as discrete tax gadgets, with out unreasonable effort.
Second Quarter Segment Results
Water Infrastructure
Xylem’s Water Infrastructure phase consists of its portfolio of businesses serving clean water
supply, wastewater transport and treatment, and dewatering.
• Second quarter 2022 Water Infrastructure revenue was $589 million, a 9.0 % improve
organically in contrast with second quarter 2021. This sturdy growth was driven by sturdy worth
realization, industrial dewatering demand, and healthy exercise in our wastewater utility business
in the us and Western Europe.
• Second quarter adjusted EBITDA margin was 21.four p.c, up 240 foundation factors from the prior
year. Reported operating revenue for the section was $108 million. Adjusted working revenue
for the phase, which excludes $3 million of restructuring and realignment, was $111 million, a
14.4 percent improve versus the comparable period final 12 months. Reported working margin for
the segment was 18.3 %, up 200 foundation factors versus the prior 12 months, and adjusted
working margin was 18.eight percent, up one hundred eighty foundation points versus the prior year. Concealed , quantity, and productiveness financial savings greater than offset inflation and strategic
investments.
Applied Water
Xylem’s Applied Water section consists of its portfolio of companies in industrial, industrial constructing,
and residential applications.
• Second quarter 2022 Applied Water income was $429 million, a 7.0 % increase
organically year-over-year. The phase delivered sturdy value realization and backlog
execution in industrial and residential finish markets, partially offset by continued supply chain
constraints in business buildings within the United States.
• Second quarter adjusted EBITDA margin was sixteen.1 %, down 130 basis points from the
prior year. Reported operating revenue for the phase was $61 million and adjusted operating
income, which excludes $2 million of restructuring and realignment prices, was $63 million, a 4.5
% lower versus the comparable interval last 12 months. The section reported operating
margin was 14.2 p.c, down 130 foundation points versus the prior yr period. Adjusted
working margin declined one hundred twenty basis factors to 14.7 %. Strong worth realization and
productivity financial savings had been greater than offset by inflation and lower quantity.
Measurement & Control Solutions
Xylem’s Measurement & Control Solutions segment consists of its portfolio of companies in sensible
metering, community applied sciences, superior infrastructure analytics and analytic instrumentation.
• Second quarter 2022 Measurement & Control Solutions revenue was $346 million, down 2.zero
% organically versus the prior year. While chip supply remains constrained, the result’s
higher than our expectations as a end result of improved chip provide within the quarter, and power in our
water high quality take a look at functions.
• Second quarter adjusted EBITDA margin was 9.8 percent, down 410 basis factors from the prior
yr. Reported working income for the section was $(5) million, and adjusted working
earnings, which excludes $3 million of restructuring and realignment costs and $1 million of
shortages, unfavorable combine and higher inflation more than offset price realization and
productiveness financial savings.
Supplemental info on Xylem’s second quarter 2022 earnings and reconciliations for sure nonGAAP gadgets is posted at www.xylem.com/investors.
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About Xylem
Xylem (XYL) is a number one international water expertise firm committed to solving important water and
infrastructure challenges with innovation. Our 17,000 various workers delivered revenue of $5.2
billion in 2021. We are creating a extra sustainable world by enabling our customers to optimize water
and useful resource administration, and serving to communities in additional than a hundred and fifty international locations turn into watersecure. Join us at www.xylem.com.
Forward-Looking Statements
This press launch accommodates “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 negative, could, but usually are not essential to, determine
forward-looking statements. By their nature, forward-looking statements address unsure matters and
embody any statements that aren’t historical, such as statements about our technique, monetary plans,
outlook, aims, plans, intentions or goals (including these associated to our social, environmental and
other sustainability goals); or address possible or future outcomes of operations or monetary performance,
including statements relating to orders, revenues, operating margins and earnings per share progress.
Although we imagine that the expectations reflected in any of our forward-looking statements are
affordable, precise results could differ materially from those projected or assumed in any of our forwardlooking statements. Our future financial situation and outcomes of operations, as nicely as any forwardlooking statements, are subject to change and to inherent risks and uncertainties, a lot of that are
beyond our management. Additionally, many of these dangers and uncertainties are, and should proceed to be,
amplified by impacts from the war between Russia and Ukraine, as nicely as the ongoing coronavirus
(“COVID-19”) pandemic and associated macroeconomic conditions (including inflation). Important elements
that might trigger our precise results, performance and achievements, or business outcomes to vary
materially from estimates or projections contained in or implied by our forward-looking statements
embody, among others, the following: the impression of overall business and general financial conditions,
including industrial, governmental, and public and private sector spending and the strength of the
residential and commercial real estate markets, on economic activity and our operations; geopolitical
occasions, including the war between Russia and Ukraine, and regulatory, economic and other risks
related to our world gross sales and operations, including with respect to domestic content material
requirements applicable to tasks with governmental funding; continued uncertainty across the
ongoing COVID-19 pandemic’s magnitude, duration and impacts on our business, operations, development,
and monetary condition; precise or potential different epidemics, pandemics or global well being crises;
availability, scarcity or delays in receiving electronic components (in specific, semiconductors), elements,
and raw supplies from our supply chain; manufacturing and operating price increases as a result of
macroeconomic conditions, together with inflation, supply chain shortages, logistics challenges, tight labor
markets, prevailing value changes, tariffs and different components; demand for our merchandise; disruption,
competition or pricing pressures in the markets we serve; cybersecurity incidents or other disruptions of
info technology methods on which we rely, or involving our products; disruptions in operations at
our amenities or that of third events upon which we rely; ability to retain and attract senior administration
and other diverse and key expertise, as well as competition for general talent and labor; difficulty predicting
our monetary outcomes; defects, security, warranty and liability claims, and recalls with respect to merchandise;
availability, regulation or interference with radio spectrum used by sure of our products; uncertainty
associated to restructuring and realignment actions and related charges and savings; our capability to proceed
strategic investments for development; our ability to efficiently identify, execute and integrate acquisitions;
volatility in served markets or impacts on enterprise and operations as a end result of weather circumstances, together with
the consequences of local weather change; fluctuations in overseas currency trade charges; our capacity to borrow or
refinance our existing indebtedness and uncertainty around the availability of liquidity sufficient to fulfill
our needs; danger of future impairments to goodwill and other intangible assets; failure to adjust to, or
adjustments in, laws or regulations, together with those pertaining to anti-corruption, data privateness and safety,
export and import, competition, and the environment and climate change; modifications in our effective tax
rates or tax bills; authorized, governmental or regulatory claims, investigations or proceedings and
related contingent liabilities; and other factors set forth beneath “Item 1A. Risk Factors” in our Annual
Report on Form 10-K for the 12 months 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 different
sustainability plans and goals aren’t an indication 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 associated statements could also be based on standards
for measuring progress that are still growing, inside controls and processes that proceed to evolve,
and assumptions which might be subject to change in the future. All forward-looking statements made herein
are primarily based on information presently available to us as of the date of this press launch. We undertake no
obligation to publicly replace or revise any forward-looking statements, whether or not as a result of new
information, future events or otherwise, besides as required by law
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