Xylem Reports Second Quarter 2022 Results


Xylem Reports Second Quarter 2022 Results

by Brenna ShumbamhiniAugust 2, 2022


Robust persevering with demand drove robust natural orders development: 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.sixty six

• Adjusted EBITDA margin exceeded guidance by 160 basis points

• Raising full-year natural 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 number one world water know-how

company devoted to fixing the world’s most challenging water points, today reported second quarter

revenue of $1.four billion, surpassing earlier steerage in each business segment. Strong continued

international demand drove orders and backlog growth across the portfolio.
Second quarter adjusted earnings earlier than curiosity, tax, depreciation and amortization (EBITDA) margin

was sixteen.6 %, higher than the Company’s earlier steering and reflecting a year-over-year

decrease of 70 foundation points. Inflation and the impact of continuing chip shortages drove the margin

decline, exceeding the benefits of worth realization and productivity savings. Xylem generated internet

income of $112 million, or $0.sixty two per share, and adjusted internet income of $120 million, or $0.66 per share,
which excludes the impression of restructuring, realignment and special charges.
“The team delivered very strong second quarter efficiency on all key metrics, and nicely ahead of our

steering for the quarter,” said Patrick Decker, Xylem president and CEO. “The result displays our

business momentum on persevering with underlying demand, disciplined operational execution, and a

moderate easing in chip supply constraints.”

“On the energy of strong backlog and orders development, and the team’s demonstrated success mitigating

the consequences of inflation, we are elevating our full-year steering on income and earnings. This additional

reinforces our longer-term development and worth creation thesis for Xylem.”


Xylem now expects full-year 2022 natural revenue growth to be within the range of 8 to 10 %, and 3

to five p.c on a reported foundation. This represents a rise from the Company’s previous full-year

organic revenue guidance of four to six p.c, and 1 to 3 p.c on a reported foundation. Full-year 2022

adjusted EBITDA margin is now anticipated to be in the range of 16.5 to 17.zero %, raising the low end

of the earlier vary of sixteen.zero to 17.zero %. This results in adjusted earnings per share of $2.50 to

$2.70, raising the low finish from the earlier range of $2.40 to $2.70. The increased guidance displays

robust demand, gradual easing of provide chain constraints and price realization partially offset by

inflation and international exchange 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 steering solely on a non-GAAP

foundation because of the inherent problem in forecasting sure amounts that might be included in GAAP

earnings, similar to discrete tax objects, without unreasonable effort.
Second Quarter Segment Results

Water Infrastructure

Xylem’s Water Infrastructure phase consists of its portfolio of businesses serving clear water

delivery, wastewater transport and therapy, and dewatering.
• Second quarter 2022 Water Infrastructure income was $589 million, a 9.zero percent improve

organically in contrast with second quarter 2021. This strong progress was pushed by strong value

realization, industrial dewatering demand, and healthy activity in our wastewater utility enterprise

in the U.S. and Western Europe.
• Second quarter adjusted EBITDA margin was 21.4 %, up 240 foundation factors from the prior

12 months. Reported working income for the segment was $108 million. Adjusted operating revenue

for the phase, which excludes $3 million of restructuring and realignment, was $111 million, a

14.four % improve versus the comparable period last year. Reported operating margin for

the phase was 18.three p.c, up 200 foundation points versus the prior year, and adjusted

operating margin was 18.eight %, up 180 foundation factors versus the prior year. Strong price

realization, quantity, and productiveness financial savings greater than offset inflation and strategic

Applied Water

Xylem’s Applied Water segment consists of its portfolio of companies in industrial, business constructing,
and residential functions.
• Second quarter 2022 Applied Water revenue was $429 million, a 7.0 percent improve

organically year-over-year. The phase delivered sturdy value realization and backlog

execution in industrial and residential finish markets, partially offset by continued provide chain

constraints in commercial buildings within the United States.
• Second quarter adjusted EBITDA margin was 16.1 %, down one hundred thirty foundation points from the

prior 12 months. Reported operating income for the segment was $61 million and adjusted working

revenue, which excludes $2 million of restructuring and realignment prices, was $63 million, a 4.5

% decrease versus the comparable period final year. The phase reported working

margin was 14.2 p.c, down 130 basis points versus the prior year interval. Adjusted

working margin declined one hundred twenty basis factors to 14.7 p.c. Strong price realization and

productivity savings had been greater than offset by inflation and lower quantity.
Measurement & Control Solutions

Xylem’s Measurement & Control Solutions phase consists of its portfolio of businesses in sensible

metering, community applied sciences, advanced infrastructure analytics and analytic instrumentation.
• Second quarter 2022 Measurement & Control Solutions income was $346 million, down 2.zero

percent organically versus the prior yr. While chip provide stays constrained, the result’s

better than our expectations due to improved chip supply in the quarter, and strength in our

water high quality take a look at applications.
• Second quarter adjusted EBITDA margin was 9.8 percent, down 410 foundation points from the prior

year. Reported operating earnings for the phase was $(5) million, and adjusted working

earnings, 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

productiveness financial savings.
Supplemental information on Xylem’s second quarter 2022 earnings and reconciliations for certain nonGAAP gadgets is posted at www.xylem.com/investors.

About Xylem

Xylem (XYL) is a leading global water expertise firm dedicated to solving critical water and

infrastructure challenges with innovation. Our 17,000 numerous employees delivered income 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 more than 150 nations turn out to be watersecure. Join us at www.xylem.com.
Forward-Looking Statements

This press launch contains “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 words “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,”

“contemplate,” “predict,” “forecast,” “likely,” “believe,” “target,” “will,” “could,” “would,” “should,”

“potential,” “may” and related expressions or their adverse, may, however usually are not necessary to, establish

forward-looking statements. By their nature, forward-looking statements address unsure issues and

embody any statements that are not historic, corresponding to statements about our technique, monetary plans,
outlook, goals, plans, intentions or goals (including those related to our social, environmental and

other sustainability goals); or address possible or future results of operations or monetary performance,
together with statements referring to orders, revenues, operating margins and earnings per share growth.
Although we believe that the expectations mirrored in any of our forward-looking statements are

cheap, precise outcomes might differ materially from those 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, many of that are

beyond our management. Additionally, many of these risks and uncertainties are, and will 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 cause our actual results, efficiency and achievements, or industry outcomes to vary

materially from estimates or projections contained in or implied by our forward-looking statements

include, amongst others, the following: the influence of overall trade and general economic circumstances,
including industrial, governmental, and public and private sector spending and the energy of the

residential and industrial real estate markets, on economic exercise and our operations; geopolitical

events, including the war between Russia and Ukraine, and regulatory, economic and different dangers

related to our international sales and operations, together with with respect to domestic content material

necessities applicable to projects with governmental funding; continued uncertainty across the

ongoing COVID-19 pandemic’s magnitude, length and impacts on our business, operations, growth,
and monetary situation; precise or potential other epidemics, pandemics or world health crises;
availability, shortage or delays in receiving digital components (in particular, semiconductors), parts,
and raw supplies from our provide chain; manufacturing and operating price will increase because of

macroeconomic conditions, together with inflation, provide chain shortages, logistics challenges, tight labor

markets, prevailing worth changes, tariffs and other components; demand for our products; disruption,
competition or pricing pressures within the markets we serve; cybersecurity incidents or different disruptions of

information expertise techniques on which we rely, or involving our products; disruptions in operations at

our services or that of third events upon which we rely; ability to retain and attract senior management

and different various and key expertise, in addition to competition for overall expertise and labor; issue predicting

our monetary results; defects, safety, warranty and legal responsibility claims, and remembers with respect to merchandise;
availability, regulation or interference with radio spectrum utilized by sure of our products; uncertainty

related to restructuring and realignment actions and associated charges and savings; our capacity to proceed

strategic investments for progress; our ability to successfully establish, execute and integrate acquisitions;
volatility in served markets or impacts on enterprise and operations because of climate circumstances, including

the effects of local weather change; fluctuations in international currency trade rates; our ability to borrow or

refinance our existing indebtedness and uncertainty around the availability of liquidity sufficient to meet

our wants; danger of future impairments to goodwill and other intangible belongings; failure to adjust to, or

adjustments in, laws or rules, including those pertaining to anti-corruption, information privacy and safety,
export and import, competitors, and the setting and climate change; adjustments in our efficient tax

charges or tax expenses; authorized, governmental or regulatory claims, investigations or proceedings and

related contingent liabilities; and other components 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 other statements in this press release relating to our environmental and other

sustainability plans and objectives aren’t a sign that these statements are essentially material to

buyers or are required to be disclosed in our filings with the SEC. In pressure gauge 10 bar , historic, present, and

forward-looking social, environmental and sustainability associated statements may be based on standards

for measuring progress which are nonetheless developing, internal controls and processes that continue to evolve,
and assumptions that are subject to vary in the future. All forward-looking statements made herein

are based mostly on data presently obtainable to us as of the date of this press launch. We undertake no

obligation to publicly update or revise any forward-looking statements, whether because of new

information, future occasions or otherwise, besides as required by regulation


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