Xylem Reports Second Quarter 2022 Results

FEATUREDMINING
Xylem Reports Second Quarter 2022 Results
by Brenna ShumbamhiniAugust 2, 2022
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Robust persevering with demand drove robust natural 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 a hundred and sixty foundation factors
• Raising full-year natural income steering to a variety of 8% to 10% from 4% to
6%, and adjusted EPS to a range of $2.50 to $2.70 from $2.40 to $2.70
Washington, D.C., August 2, 2022 – Xylem Inc. (NYSE: XYL), a quantity one global water technology
firm dedicated to solving the world’s most difficult water issues, right now reported second quarter
income of $1.four billion, surpassing previous guidance in each enterprise section. Strong continued
global demand drove orders and backlog development across the portfolio.
Second quarter adjusted earnings earlier than interest, tax, depreciation and amortization (EBITDA) margin
was 16.6 p.c, better than the Company’s earlier guidance and reflecting a year-over-year
decrease of 70 foundation factors. Inflation and the impact of continuing chip shortages drove the margin
decline, exceeding the advantages of value 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 impact of restructuring, realignment and particular costs.
“The staff delivered very strong second quarter performance on all key metrics, and properly forward of our
steerage for the quarter,” stated Patrick Decker, Xylem president and CEO. “The result displays our
business momentum on persevering with underlying demand, disciplined operational execution, and a
reasonable easing in chip supply constraints.”
“On the power of strong backlog and orders growth, and the team’s demonstrated success mitigating
the consequences of inflation, we’re elevating our full-year steerage on revenue and earnings. This additional
reinforces our longer-term development and worth creation thesis for Xylem.”
Outlook
Xylem now expects full-year 2022 organic income growth to be within the range of 8 to 10 percent, and 3
to 5 percent on a reported foundation. Steal represents a rise from the Company’s previous full-year
natural revenue steerage of 4 to six percent, and 1 to three p.c on a reported foundation. Full-year 2022
adjusted EBITDA margin is now anticipated to be within the range of sixteen.5 to 17.0 p.c, elevating the low end
of the previous vary of 16.0 to 17.zero percent. This leads to adjusted earnings per share of $2.50 to
$2.70, elevating the low finish from the earlier vary of $2.forty to $2.70. The elevated steering displays
strong demand, gradual easing of supply chain constraints and price realization partially offset by
inflation and overseas change headwinds.
Further 2022 planning assumptions are included in Xylem’s second quarter 2022 earnings materials
posted at www.xylem.com/investors. Excluding revenue, Xylem supplies guidance only on a non-GAAP
foundation because of the inherent issue in forecasting certain quantities that would be included in GAAP
earnings, similar to discrete tax gadgets, without unreasonable effort.
Second Quarter Segment Results
Water Infrastructure
Xylem’s Water Infrastructure segment consists of its portfolio of companies serving clear water
delivery, wastewater transport and therapy, and dewatering.
• Second quarter 2022 Water Infrastructure income was $589 million, a 9.0 % increase
organically compared with second quarter 2021. This robust progress was pushed by strong worth
realization, industrial dewatering demand, and wholesome activity in our wastewater utility business
in the U.S. and Western Europe.
• Second quarter adjusted EBITDA margin was 21.four %, up 240 basis factors from the prior
12 months. Reported operating income for the segment was $108 million. Adjusted operating revenue
for the section, which excludes $3 million of restructuring and realignment, was $111 million, a
14.four % increase versus the comparable interval last yr. Reported operating margin for
the section was 18.three %, up 200 foundation factors versus the prior 12 months, and adjusted
operating margin was 18.8 p.c, up 180 basis points versus the prior yr. Strong price
realization, volume, and productivity 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 building,
and residential functions.
• Second quarter 2022 Applied Water revenue was $429 million, a 7.zero % increase
organically year-over-year. The segment delivered strong price realization and backlog
execution in industrial and residential finish markets, partially offset by continued supply chain
constraints in business buildings in the United States.
• Second quarter adjusted EBITDA margin was 16.1 percent, down 130 basis points from the
prior 12 months. Reported operating earnings for the section was $61 million and adjusted working
earnings, which excludes $2 million of restructuring and realignment prices, was $63 million, a 4.5
percent decrease versus the comparable interval last year. The segment reported operating
margin was 14.2 p.c, down one hundred thirty foundation points versus the prior yr interval. Adjusted
operating margin declined a hundred and twenty basis points to 14.7 percent. Strong price realization and
productiveness financial savings have been more than offset by inflation and decrease volume.
Measurement & Control Solutions
Xylem’s Measurement & Control Solutions phase consists of its portfolio of companies in good
metering, community applied sciences, advanced infrastructure analytics and analytic instrumentation.
• Second quarter 2022 Measurement & Control Solutions revenue was $346 million, down 2.0
p.c organically versus the prior yr. While chip supply remains constrained, the result’s
better than our expectations due to improved chip provide in the quarter, and energy in our
water high quality check applications.
• Second quarter adjusted EBITDA margin was 9.8 %, down 410 basis factors from the prior
year. Reported working income for the segment was $(5) million, and adjusted operating
earnings, which excludes $3 million of restructuring and realignment costs and $1 million of
shortages, unfavorable mix and better inflation greater than offset price realization and
productiveness financial savings.
Supplemental information 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 know-how company dedicated to fixing critical water and
infrastructure challenges with innovation. Our 17,000 various staff delivered revenue of $5.2
billion in 2021. We are making a extra sustainable world by enabling our clients to optimize water
and resource administration, and helping 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 incorporates “forward-looking statements” within the that 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 related expressions or their negative, might, however are not essential to, determine
forward-looking statements. By their nature, forward-looking statements address uncertain issues and
embrace any statements that are not historical, corresponding to statements about our technique, monetary plans,
outlook, aims, plans, intentions or goals (including these related to our social, environmental and
different sustainability goals); or tackle attainable or future outcomes of operations or monetary performance,
including statements relating to orders, revenues, operating margins and earnings per share growth.
Although we imagine that the expectations reflected in any of our forward-looking statements are
affordable, actual results may differ materially from these projected or assumed in any of our forwardlooking statements. Our future financial situation and outcomes of operations, as properly as any forwardlooking statements, are subject to alter and to inherent dangers and uncertainties, a lot of which are
beyond our management. Additionally, many of these dangers and uncertainties are, and should continue to be,
amplified by impacts from the warfare between Russia and Ukraine, as well as the continuing coronavirus
(“COVID-19”) pandemic and related macroeconomic conditions (including inflation). Important factors
that could trigger our actual results, efficiency and achievements, or trade results to differ
materially from estimates or projections contained in or implied by our forward-looking statements
embody, among others, the following: the impact of total business and basic financial circumstances,
together with industrial, governmental, and public and private sector spending and the energy of the
residential and commercial real property markets, on financial exercise and our operations; geopolitical
events, together with the warfare between Russia and Ukraine, and regulatory, financial and other dangers
associated with our global sales and operations, including with respect to home content
necessities applicable to projects with governmental funding; continued uncertainty around the
ongoing COVID-19 pandemic’s magnitude, duration and impacts on our business, operations, development,
and financial condition; actual or potential other epidemics, pandemics or world well being crises;
availability, shortage or delays in receiving electronic elements (in explicit, semiconductors), parts,
and uncooked materials from our provide chain; manufacturing and working value increases due to
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 within the markets we serve; cybersecurity incidents or different disruptions of
data expertise methods 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 diverse and key talent, in addition to competition for overall expertise and labor; issue predicting
our monetary results; defects, security, warranty and legal responsibility claims, and recollects with respect to products;
availability, regulation or interference with radio spectrum used by certain of our products; uncertainty
associated to restructuring and realignment actions and related costs and financial savings; our capability to continue
strategic investments for development; our capability to efficiently identify, execute and integrate acquisitions;
volatility in served markets or impacts on business and operations because of climate situations, including
the consequences of local weather change; fluctuations in foreign foreign money trade charges; our ability to borrow or
refinance our present indebtedness and uncertainty around the availability of liquidity adequate to meet
our needs; threat of future impairments to goodwill and different intangible belongings; failure to adjust to, or
changes in, laws or laws, including those pertaining to anti-corruption, knowledge privacy and safety,
export and import, competitors, and the environment and climate change; adjustments in our efficient tax
rates or tax expenses; legal, governmental or regulatory claims, investigations or proceedings and
related contingent liabilities; and other components set forth under “Item 1A. Risk Factors” in our Annual
Report on Form 10-K for the year 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 relating to our environmental and different
sustainability plans and targets 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, historic, current, and
forward-looking social, environmental and sustainability related statements may be primarily based on standards
for measuring progress that are still developing, inside controls and processes that continue to evolve,
and assumptions which would possibly be topic to change sooner or later. All forward-looking statements made herein
are based on information currently 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 as a outcome of new
info, future events or otherwise, besides as required by legislation
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