Xylem Reports Second Quarter 2022 Results

Xylem Reports Second Quarter 2022 Results
by Brenna ShumbamhiniAugust 2, 2022
Robust persevering with demand drove strong organic orders progress: 1% on a reported
foundation, 6% organically
• Revenue of $1.four billion, up 1% on a reported foundation, up 6% organically
• Earnings per share of $0.sixty two, adjusted earnings per share of $0.66
• Adjusted EBITDA margin exceeded guidance by 160 basis points
• Raising full-year natural 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 leading global water technology
firm dedicated to fixing the world’s most difficult water issues, right now reported second quarter
revenue of $1.four billion, surpassing earlier steerage in every enterprise phase. Strong continued
world demand drove orders and backlog development across the portfolio.
Second quarter adjusted earnings earlier than interest, tax, depreciation and amortization (EBITDA) margin
was sixteen.6 %, better than the Company’s earlier steerage and reflecting a year-over-year
lower of 70 basis points. Inflation and the impression of continuous chip shortages drove the margin
decline, exceeding the benefits of worth realization and productivity savings. Xylem generated internet
earnings 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 strong second quarter efficiency on all key metrics, and properly ahead of our
guidance for the quarter,” mentioned Patrick Decker, Xylem president and CEO. “The end result reflects our
commercial momentum on continuing underlying demand, disciplined operational execution, and a
reasonable easing in chip provide constraints.”
“On the energy of sturdy backlog and orders development, and the team’s demonstrated success mitigating
the results of inflation, we are raising our full-year guidance on revenue and earnings. This further
reinforces our longer-term growth and value creation thesis for Xylem.”
Xylem now expects full-year 2022 natural income development to be within the range of 8 to 10 p.c, and 3
to 5 p.c on a reported foundation. This represents an increase from the Company’s previous full-year
organic income guidance of 4 to 6 percent, and 1 to three % on a reported basis. Full-year 2022
adjusted EBITDA margin is now expected to be in the vary of sixteen.5 to 17.0 p.c, raising the low end
of the previous range of 16.0 to 17.0 %. This results in adjusted earnings per share of $2.50 to
$2.70, elevating the low finish from the previous vary of $2.forty to $2.70. The elevated steering displays
strong demand, gradual easing of provide chain constraints and price realization partially offset by
inflation and foreign exchange headwinds.
Further 2022 planning assumptions are included in Xylem’s second quarter 2022 earnings materials
posted at www.xylem.com/investors. Excluding revenue, Xylem provides steerage only on a non-GAAP
basis due to the inherent problem in forecasting sure amounts that may be included in GAAP
earnings, corresponding to discrete tax items, without unreasonable effort.
Second Quarter Segment Results
Water Infrastructure
Xylem’s Water Infrastructure section consists of its portfolio of companies serving clean water
supply, wastewater transport and remedy, and dewatering.
• Second quarter 2022 Water Infrastructure revenue was $589 million, a 9.0 percent increase
organically in contrast with second quarter 2021. This robust development was pushed by sturdy value
realization, industrial dewatering demand, and wholesome exercise in our wastewater utility enterprise
in the U.S. and Western Europe.
• Second quarter adjusted EBITDA margin was 21.four p.c, up 240 basis points from the prior
year. Reported operating earnings for the phase was $108 million. Adjusted working income
for the section, which excludes $3 million of restructuring and realignment, was $111 million, a
14.four p.c increase versus the comparable interval final yr. Reported operating margin for
the section was 18.3 percent, up 200 foundation factors versus the prior 12 months, and adjusted
working margin was 18.eight p.c, up a hundred and eighty foundation factors versus the prior year. Strong worth
realization, volume, and productivity savings more than offset inflation and strategic
Applied Water
Xylem’s Applied Water segment consists of its portfolio of businesses in industrial, commercial building,
and residential purposes.
• Second quarter 2022 Applied Water income was $429 million, a 7.0 percent increase
organically year-over-year. The segment delivered robust value realization and backlog
execution in industrial and residential end markets, partially offset by continued provide chain
constraints in business buildings within the United States.
• Second quarter adjusted EBITDA margin was 16.1 %, down a hundred thirty basis factors from the
prior year. Reported working revenue 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
% lower versus the comparable interval last 12 months. The phase reported operating
margin was 14.2 p.c, down 130 foundation factors versus the prior year period. Adjusted
working margin declined a hundred and twenty basis factors to 14.7 p.c. Strong price realization and
productiveness savings were more than offset by inflation and lower quantity.
Measurement & Control Solutions
Xylem’s Measurement & Control Solutions section consists of its portfolio of businesses in sensible
metering, network applied sciences, advanced infrastructure analytics and analytic instrumentation.
• Second quarter 2022 Measurement & Control Solutions revenue was $346 million, down 2.zero
percent organically versus the prior year. While chip supply stays constrained, the result’s
higher than our expectations as a result of improved chip provide in the quarter, and strength in our
water quality check functions.
• Second quarter adjusted EBITDA margin was 9.8 percent, down 410 foundation points from the prior
12 months. Reported working revenue for the segment was $(5) million, and adjusted working
income, which excludes $3 million of restructuring and realignment costs and $1 million of
shortages, unfavorable combine and higher inflation greater than offset worth realization and
productiveness financial savings.
Supplemental info on Xylem’s second quarter 2022 earnings and reconciliations for sure nonGAAP objects is posted at www.xylem.com/investors.
About Xylem
Xylem (XYL) is a leading world water know-how company dedicated to solving crucial water and
infrastructure challenges with innovation. Our 17,000 numerous workers delivered income of $5.2
billion in 2021. We are creating a more sustainable world by enabling our customers to optimize water
and useful resource management, and helping communities in additional than a hundred and fifty countries become watersecure. Join us at www.xylem.com.
Forward-Looking Statements
This press release accommodates “forward-looking statements” throughout 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 similar expressions or their adverse, might, but usually are not necessary to, determine
forward-looking statements. By their nature, forward-looking statements handle unsure issues and
embrace any statements that are not historic, corresponding to statements about our strategy, monetary plans,
outlook, objectives, plans, intentions or targets (including those related to our social, environmental and
different sustainability goals); or tackle attainable or future results of operations or monetary efficiency,
including statements regarding orders, revenues, working margins and earnings per share development.
Although we believe that the expectations mirrored in any of our forward-looking statements are
reasonable, actual outcomes may differ materially from these projected or assumed in any of our forwardlooking statements. Our future financial condition and outcomes of operations, as properly as any forwardlooking statements, are topic to change and to inherent risks and uncertainties, a lot of which are
past our management. Additionally, many of these dangers and uncertainties are, and will proceed to be,
amplified by impacts from the struggle between Russia and Ukraine, as properly as the continuing coronavirus
(“COVID-19”) pandemic and related macroeconomic conditions (including inflation). Important elements
that would cause our precise outcomes, performance and achievements, or business results to vary
materially from estimates or projections contained in or implied by our forward-looking statements
embody, among others, the next: the impression of general trade and common financial circumstances,
including industrial, governmental, and public and private sector spending and the energy of the
residential and business real estate markets, on financial activity and our operations; geopolitical
occasions, including the warfare between Russia and Ukraine, and regulatory, economic and other dangers
related to our global sales and operations, together with with respect to domestic content
necessities applicable to tasks with governmental funding; continued uncertainty around the
ongoing COVID-19 pandemic’s magnitude, period and impacts on our business, operations, development,
and financial situation; precise or potential other epidemics, pandemics or international well being crises;
availability, scarcity or delays in receiving electronic parts (in explicit, semiconductors), elements,
and uncooked supplies from our provide chain; manufacturing and working cost increases as a end result of
macroeconomic circumstances, including inflation, supply chain shortages, logistics challenges, tight labor
markets, prevailing value modifications, tariffs and different factors; demand for our merchandise; disruption,
competition or pricing pressures within the markets we serve; cybersecurity incidents or other disruptions of
info technology techniques on which we rely, or involving our products; disruptions in operations at
our amenities or that of third events upon which we rely; capability to retain and attract senior management
and other numerous and key expertise, in addition to competitors for total talent and labor; difficulty predicting
our financial results; defects, safety, guarantee and legal responsibility claims, and remembers with respect to merchandise;
availability, regulation or interference with radio spectrum utilized by certain of our products; uncertainty
associated to restructuring and realignment actions and related costs and savings; our capability to proceed
strategic investments for growth; our ability to efficiently establish, execute and integrate acquisitions;
volatility in served markets or impacts on business and operations because of weather circumstances, including
the consequences of climate change; fluctuations in international forex change charges; our capability to borrow or
refinance our present indebtedness and uncertainty around the availability of liquidity adequate to satisfy
our needs; threat of future impairments to goodwill and other intangible property; failure to adjust to, or
changes in, laws or regulations, together with these pertaining to anti-corruption, data privacy and security,
export and import, competitors, and the environment and local weather change; adjustments 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 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 other statements on this press release relating to our environmental and different
sustainability plans and goals usually are not a sign that these statements are essentially materials to
investors 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 may be based on standards
for measuring progress which are still developing, inner controls and processes that proceed to evolve,
and assumptions which are topic to alter in the future. pressure gauge 2.5 นิ้ว -looking statements made herein
are primarily based on info at present obtainable 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 because of new
data, future occasions or otherwise, besides as required by legislation

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