Xylem Reports Second Quarter 2022 Results

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Xylem Reports Second Quarter 2022 Results
by Brenna ShumbamhiniAugust 2, 2022
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Robust persevering with demand drove robust organic orders growth: 1% on a reported
basis, 6% organically
• Revenue of $1.4 billion, up 1% on a reported basis, up 6% organically
• Earnings per share of $0.sixty two, adjusted earnings per share of $0.sixty six
• Adjusted EBITDA margin exceeded guidance by 160 basis points
• Raising full-year natural revenue guidance to a spread of 8% to 10% from 4% to
6%, and adjusted EPS to a spread of $2.50 to $2.70 from $2.40 to $2.70
Washington, D.C., August 2, 2022 – Xylem Inc. (NYSE: XYL), a leading international water technology
company devoted to solving the world’s most difficult water points, right now reported second quarter
income of $1.4 billion, surpassing earlier guidance in each enterprise segment. Strong continued
international demand drove orders and backlog development across the portfolio.
Second quarter adjusted earnings earlier than curiosity, tax, depreciation and amortization (EBITDA) margin
was 16.6 percent, better than the Company’s earlier steerage and reflecting a year-over-year
decrease of 70 basis points. Inflation and the impact of constant chip shortages drove the margin
decline, exceeding the benefits of price realization and productivity savings. Xylem generated net
earnings of $112 million, or $0.sixty two per share, and adjusted web earnings 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 efficiency on all key metrics, and properly forward of our
guidance for the quarter,” stated Patrick Decker, Xylem president and CEO. “The outcome displays our
commercial momentum on persevering with underlying demand, disciplined operational execution, and a
average easing in chip provide constraints.”
“On nuova fima pressure gauge ราคา of robust backlog and orders progress, and the team’s demonstrated success mitigating
the consequences of inflation, we’re raising our full-year steerage on income and earnings. This additional
reinforces our longer-term growth and value creation thesis for Xylem.”
Outlook
Xylem now expects full-year 2022 organic income growth to be in the range of eight to 10 percent, and three
to 5 % on a reported basis. This represents an increase from the Company’s previous full-year
organic revenue guidance of 4 to 6 %, and 1 to three % on a reported basis. Full-year 2022
adjusted EBITDA margin is now anticipated to be in the vary of sixteen.5 to 17.0 %, elevating the low finish
of the previous range of 16.zero to 17.zero %. This leads to adjusted earnings per share of $2.50 to
$2.70, raising the low end from the previous range of $2.40 to $2.70. The elevated steering displays
sturdy demand, gradual easing of provide chain constraints and value realization partially offset by
inflation and overseas change headwinds.
Further 2022 planning assumptions are included in Xylem’s second quarter 2022 earnings supplies
posted at www.xylem.com/investors. Excluding income, Xylem offers guidance solely on a non-GAAP
foundation because of the inherent problem in forecasting sure quantities that would be included in GAAP
earnings, corresponding to discrete tax objects, with out unreasonable effort.
Second Quarter Segment Results
Water Infrastructure
Xylem’s Water Infrastructure section consists of its portfolio of businesses serving clear water
supply, wastewater transport and therapy, and dewatering.
• Second quarter 2022 Water Infrastructure income was $589 million, a 9.zero percent increase
organically compared with second quarter 2021. This robust development was pushed by robust 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 basis points from the prior
12 months. Reported working income for the phase was $108 million. Adjusted working revenue
for the segment, which excludes $3 million of restructuring and realignment, was $111 million, a
14.4 p.c increase versus the comparable interval final year. Reported operating margin for
the phase was 18.3 percent, up 200 basis factors versus the prior 12 months, and adjusted
operating margin was 18.eight p.c, up one hundred eighty foundation points versus the prior yr. Strong price
realization, quantity, and productiveness savings more than offset inflation and strategic
investments.
Applied Water
Xylem’s Applied Water phase consists of its portfolio of companies in industrial, industrial building,
and residential functions.
• Second quarter 2022 Applied Water income was $429 million, a 7.0 percent improve
organically year-over-year. The section delivered strong worth realization and backlog
execution in industrial and residential end markets, partially offset by continued supply chain
constraints in commercial buildings in the United States.
• Second quarter adjusted EBITDA margin was 16.1 p.c, down one hundred thirty basis factors from the
prior year. Reported operating income for the section was $61 million and adjusted operating
revenue, which excludes $2 million of restructuring and realignment prices, was $63 million, a 4.5
p.c lower versus the comparable period final yr. The segment reported operating
margin was 14.2 %, down a hundred thirty foundation factors versus the prior yr interval. Adjusted
operating margin declined 120 foundation factors to 14.7 %. Strong price realization and
productiveness savings had been greater than offset by inflation and lower volume.
Measurement & Control Solutions
Xylem’s Measurement & Control Solutions segment consists of its portfolio of companies in sensible
metering, community technologies, advanced 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 provide stays constrained, the result is
higher than our expectations as a end result of improved chip provide within the quarter, and strength in our
water high quality take a look at purposes.
• Second quarter adjusted EBITDA margin was 9.eight %, down 410 foundation points from the prior
yr. Reported working income for the segment was $(5) million, and adjusted working
revenue, which excludes $3 million of restructuring and realignment costs and $1 million of
shortages, unfavorable mix and higher inflation greater than offset worth realization and
productivity savings.
Supplemental information on Xylem’s second quarter 2022 earnings and reconciliations for sure nonGAAP objects is posted at www.xylem.com/investors.
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About Xylem
Xylem (XYL) is a number one world water expertise firm dedicated to fixing crucial water and
infrastructure challenges with innovation. Our 17,000 various employees delivered revenue of $5.2
billion in 2021. We are making a more sustainable world by enabling our prospects to optimize water
and resource administration, and helping communities in additional than a hundred and fifty nations turn out to be watersecure. Join us at www.xylem.com.
Forward-Looking Statements
This press release accommodates “forward-looking statements” throughout 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 words “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,”
“contemplate,” “predict,” “forecast,” “likely,” “believe,” “target,” “will,” “could,” “would,” “should,”
“potential,” “may” and comparable expressions or their adverse, might, but are not essential to, identify
forward-looking statements. By their nature, forward-looking statements tackle unsure matters and
embrace any statements that are not historic, corresponding to statements about our strategy, monetary plans,
outlook, goals, plans, intentions or goals (including these related to our social, environmental and
other sustainability goals); or tackle attainable or future results of operations or financial performance,
including statements regarding orders, revenues, working margins and earnings per share progress.
Although we believe that the expectations reflected in any of our forward-looking statements are
affordable, precise results could differ materially from these projected or assumed in any of our forwardlooking statements. Our future financial situation and results of operations, as nicely as any forwardlooking statements, are topic to vary and to inherent risks and uncertainties, a lot of that are
beyond our control. Additionally, many of these dangers and uncertainties are, and will proceed to be,
amplified by impacts from the war between Russia and Ukraine, as properly as the continuing coronavirus
(“COVID-19”) pandemic and associated macroeconomic situations (including inflation). Important factors
that might cause our actual outcomes, performance and achievements, or business results to vary
materially from estimates or projections contained in or implied by our forward-looking statements
include, among others, the next: the impact of general trade and basic economic situations,
including industrial, governmental, and public and private sector spending and the energy of the
residential and industrial actual property markets, on financial exercise and our operations; geopolitical
events, together with the struggle between Russia and Ukraine, and regulatory, financial and other dangers
related to our international sales and operations, including with respect to domestic content material
requirements applicable to tasks with governmental funding; continued uncertainty around the
ongoing COVID-19 pandemic’s magnitude, period and impacts on our enterprise, operations, development,
and monetary condition; precise or potential other epidemics, pandemics or international health crises;
availability, shortage or delays in receiving digital elements (in explicit, semiconductors), elements,
and uncooked materials from our supply chain; manufacturing and operating price will increase because of
macroeconomic conditions, including inflation, supply chain shortages, logistics challenges, tight labor
markets, prevailing price changes, tariffs and other elements; demand for our merchandise; disruption,
competitors or pricing pressures within the markets we serve; cybersecurity incidents or different disruptions of
info know-how systems on which we rely, or involving our merchandise; disruptions in operations at
our services or that of third parties upon which we rely; capacity to retain and appeal to senior administration
and other numerous and key expertise, in addition to competitors for overall talent and labor; problem predicting
our financial outcomes; defects, safety, warranty and liability claims, and remembers with respect to products;
availability, regulation or interference with radio spectrum used by certain of our merchandise; uncertainty
associated to restructuring and realignment actions and associated charges and savings; our capacity to continue
strategic investments for growth; our ability to successfully determine, execute and combine acquisitions;
volatility in served markets or impacts on enterprise and operations due to weather situations, including
the consequences of local weather change; fluctuations in foreign foreign money change rates; our capability to borrow or
refinance our present indebtedness and uncertainty around the availability of liquidity sufficient to meet
our wants; threat of future impairments to goodwill and different intangible belongings; failure to comply with, or
modifications in, legal guidelines or laws, together with these pertaining to anti-corruption, data privacy and security,
export and import, competitors, and the setting and climate change; changes in our effective tax
charges or tax bills; authorized, governmental or regulatory claims, investigations or proceedings and
related contingent liabilities; and other elements set forth underneath “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 on this press launch regarding our environmental and different
sustainability plans and goals are not an indication that these statements are essentially material 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 related statements could also be based mostly on requirements
for measuring progress that are still growing, inside controls and processes that proceed to evolve,
and assumptions which are subject to alter in the future. All forward-looking statements made herein
are based on information presently available to us as of the date of this press release. We undertake no
obligation to publicly update or revise any forward-looking statements, whether as a outcome of new
info, future occasions or otherwise, except as required by regulation
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