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 natural orders growth: 1% on a reported
foundation, 6% organically
• Revenue of $1.4 billion, up 1% on a reported basis, up 6% organically
• Earnings per share of $0.62, adjusted earnings per share of $0.sixty six
• Adjusted EBITDA margin exceeded steerage by 160 foundation points
• Raising full-year organic revenue steerage 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.forty to $2.70
Washington, D.C., August 2, 2022 – Xylem Inc. (NYSE: XYL), a quantity one world water technology
company devoted to solving the world’s most challenging water issues, today reported second quarter
income of $1.four billion, surpassing earlier guidance in every enterprise section. Strong continued
global demand drove orders and backlog progress across the portfolio.
Second quarter adjusted earnings before interest, tax, depreciation and amortization (EBITDA) margin
was 16.6 %, higher than the Company’s earlier steerage and reflecting a year-over-year
lower of 70 basis factors. เกจวัดแรงลม and the impact of continuous chip shortages drove the margin
decline, exceeding the benefits of value realization and productiveness savings. Xylem generated web
earnings of $112 million, or $0.sixty two per share, and adjusted internet income of $120 million, or $0.sixty six per share,
which excludes the impression of restructuring, realignment and particular costs.
“The team delivered very sturdy second quarter performance on all key metrics, and well ahead of our
guidance for the quarter,” said Patrick Decker, Xylem president and CEO. “The end result reflects our
industrial momentum on continuing underlying demand, disciplined operational execution, and a
average easing in chip supply constraints.”
“On the strength of sturdy backlog and orders progress, and the team’s demonstrated success mitigating
the results of inflation, we are raising our full-year steering on revenue and earnings. This additional
reinforces our longer-term development and worth creation thesis for Xylem.”
Outlook
Xylem now expects full-year 2022 natural revenue growth to be in the range of 8 to 10 p.c, and 3
to five p.c on a reported basis. This represents an increase from the Company’s previous full-year
organic income steering of 4 to 6 %, and 1 to 3 p.c on a reported foundation. Full-year 2022
adjusted EBITDA margin is now expected to be in the vary of sixteen.5 to 17.zero percent, elevating the low finish
of the earlier vary of 16.zero to 17.zero percent. This ends in adjusted earnings per share of $2.50 to
$2.70, elevating the low finish from the previous range of $2.40 to $2.70. The increased guidance displays
sturdy demand, gradual easing of provide chain constraints and worth realization partially offset by
inflation and foreign trade headwinds.
Further 2022 planning assumptions are included in Xylem’s second quarter 2022 earnings supplies
posted at www.xylem.com/investors. Excluding revenue, Xylem offers guidance only on a non-GAAP
basis as a result of inherent problem in forecasting certain amounts that would be included in GAAP
earnings, such as discrete tax gadgets, without unreasonable effort.
Second Quarter Segment Results
Water Infrastructure
Xylem’s Water Infrastructure section consists of its portfolio of businesses serving clear water
delivery, wastewater transport and treatment, and dewatering.
• Second quarter 2022 Water Infrastructure income was $589 million, a 9.0 percent increase
organically compared with second quarter 2021. This sturdy progress was pushed by strong value
realization, industrial dewatering demand, and healthy activity in our wastewater utility business
in the us and Western Europe.
• Second quarter adjusted EBITDA margin was 21.four percent, up 240 basis points from the prior
yr. Reported operating earnings for the section was $108 million. Adjusted operating income
for the section, which excludes $3 million of restructuring and realignment, was $111 million, a
14.4 p.c enhance versus the comparable interval final 12 months. Reported operating margin for
the segment was 18.3 %, up 200 basis factors versus the prior 12 months, and adjusted
operating margin was 18.8 percent, up a hundred and eighty foundation points versus the prior 12 months. Strong price
realization, quantity, and productivity savings more than offset inflation and strategic
investments.
Applied Water
Xylem’s Applied Water section consists of its portfolio of businesses in industrial, industrial constructing,
and residential purposes.
• Second quarter 2022 Applied Water income was $429 million, a 7.zero % increase
organically year-over-year. The section delivered robust value realization and backlog
execution in industrial and residential finish markets, partially offset by continued provide chain
constraints in industrial buildings within the United States.
• Second quarter adjusted EBITDA margin was sixteen.1 percent, down one hundred thirty foundation factors from the
prior yr. Reported working revenue for the segment was $61 million and adjusted working
revenue, which excludes $2 million of restructuring and realignment prices, was $63 million, a four.5
p.c lower versus the comparable period last year. The section reported working
margin was 14.2 percent, down 130 basis points versus the prior yr interval. Adjusted
operating margin declined 120 basis factors to 14.7 %. Strong price realization and
productiveness savings were greater than offset by inflation and lower volume.
Measurement & Control Solutions
Xylem’s Measurement & Control Solutions phase consists of its portfolio of businesses in smart
metering, community applied sciences, advanced infrastructure analytics and analytic instrumentation.
• Second quarter 2022 Measurement & Control Solutions income was $346 million, down 2.zero
% organically versus the prior 12 months. While chip provide stays constrained, the result is
higher than our expectations as a outcome of improved chip supply in the quarter, and strength in our
water high quality test purposes.
• Second quarter adjusted EBITDA margin was 9.eight %, down 410 foundation factors from the prior
12 months. Reported operating revenue 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 higher inflation more than offset value realization and
productivity savings.
Supplemental data on Xylem’s second quarter 2022 earnings and reconciliations for certain nonGAAP objects is posted at www.xylem.com/investors.
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About Xylem
Xylem (XYL) is a leading global water technology company committed to solving critical water and
infrastructure challenges with innovation. Our 17,000 diverse workers delivered revenue of $5.2
billion in 2021. We are creating a more sustainable world by enabling our prospects to optimize water
and useful resource management, and serving to communities in more than one hundred fifty nations become watersecure. Join us at www.xylem.com.
Forward-Looking Statements
This press launch incorporates “forward-looking statements” throughout the meaning 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 unfavorable, may, but usually are not essential to, establish
forward-looking statements. By their nature, forward-looking statements tackle uncertain matters and
include any statements that aren’t historical, such as statements about our strategy, monetary plans,
outlook, goals, plans, intentions or goals (including these associated to our social, environmental and
different sustainability goals); or handle attainable or future results of operations or financial efficiency,
including statements regarding orders, revenues, operating margins and earnings per share growth.
Although we consider that the expectations reflected in any of our forward-looking statements are
affordable, precise outcomes may differ materially from these projected or assumed in any of our forwardlooking statements. Our future monetary condition and outcomes of operations, in addition to any forwardlooking statements, are subject to change and to inherent dangers and uncertainties, many of which are
beyond our control. Additionally, many of those dangers and uncertainties are, and will proceed to be,
amplified by impacts from the struggle between Russia and Ukraine, in addition to the continuing coronavirus
(“COVID-19”) pandemic and associated macroeconomic circumstances (including inflation). Important components
that would trigger our actual outcomes, performance and achievements, or industry outcomes to vary
materially from estimates or projections contained in or implied by our forward-looking statements
embody, amongst others, the next: the influence of total trade and general financial conditions,
together with industrial, governmental, and private and non-private sector spending and the power of the
residential and commercial actual estate markets, on financial activity and our operations; geopolitical
events, including the war between Russia and Ukraine, and regulatory, economic and other risks
associated with our world gross sales and operations, including with respect to domestic content
necessities applicable to tasks with governmental funding; continued uncertainty across the
ongoing COVID-19 pandemic’s magnitude, duration and impacts on our enterprise, operations, growth,
and financial situation; actual or potential different epidemics, pandemics or global health crises;
availability, scarcity or delays in receiving digital elements (in particular, semiconductors), components,
and uncooked supplies from our provide chain; manufacturing and operating value increases because of
macroeconomic conditions, including inflation, provide chain shortages, logistics challenges, tight labor
markets, prevailing worth modifications, tariffs and different factors; demand for our merchandise; disruption,
competitors or pricing pressures in the markets we serve; cybersecurity incidents or other disruptions of
information know-how methods on which we rely, or involving our products; disruptions in operations at
our amenities or that of third events upon which we rely; capacity to retain and attract senior administration
and other numerous and key expertise, in addition to competition for general talent and labor; difficulty predicting
our financial results; defects, security, warranty and legal responsibility claims, and recalls with respect to products;
availability, regulation or interference with radio spectrum used by sure of our products; uncertainty
related to restructuring and realignment actions and associated expenses and savings; our capability to continue
strategic investments for progress; our capability to successfully determine, execute and combine acquisitions;
volatility in served markets or impacts on business and operations as a end result of climate conditions, including
the consequences of local weather change; fluctuations in foreign currency exchange rates; our capacity to borrow or
refinance our existing indebtedness and uncertainty around the availability of liquidity adequate to meet
our wants; danger of future impairments to goodwill and other intangible belongings; failure to adjust to, or
modifications in, legal guidelines or laws, including these pertaining to anti-corruption, data privateness and safety,
export and import, competitors, and the setting and climate change; adjustments in our efficient tax
rates or tax expenses; legal, governmental or regulatory claims, investigations or proceedings and
associated contingent liabilities; and different factors set forth beneath “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 relating to our environmental and other
sustainability plans and objectives usually are not a sign that these statements are necessarily materials to
buyers or are required to be disclosed in our filings with the SEC. In addition, historic, present, and
forward-looking social, environmental and sustainability associated statements could also be primarily based on requirements
for measuring progress which are nonetheless growing, inner controls and processes that proceed to evolve,
and assumptions which are subject to change in the future. All forward-looking statements made herein
are based on info currently available 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
information, future events or otherwise, except as required by regulation
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