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 strong organic orders progress: 1% on a reported
basis, 6% organically
• Revenue of $1.four billion, up 1% on a reported foundation, up 6% organically
• Earnings per share of $0.62, adjusted earnings per share of $0.sixty six
• Adjusted EBITDA margin exceeded guidance by 160 basis points
• Raising full-year organic 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 world water technology
firm devoted to solving the world’s most difficult water points, at present reported second quarter
revenue of $1.four billion, surpassing previous steerage in each business phase. Strong continued
international demand drove orders and backlog growth across the portfolio.
Second quarter adjusted earnings earlier than interest, tax, depreciation and amortization (EBITDA) margin
was sixteen.6 percent, higher than the Company’s previous steering 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 advantages of value realization and productiveness savings. Xylem generated net
earnings of $112 million, or $0.62 per share, and adjusted internet earnings of $120 million, or $0.sixty six per share,
which excludes the impact of restructuring, realignment and special expenses.
“The team delivered very strong second quarter efficiency on all key metrics, and well forward of our
steerage for the quarter,” mentioned Patrick Decker, Xylem president and CEO. “The result displays our
commercial momentum on persevering with underlying demand, disciplined operational execution, and a
average easing in chip provide constraints.”
“On ชนิดของpressuregauge of strong backlog and orders growth, and the team’s demonstrated success mitigating
the effects of inflation, we are elevating our full-year steerage on income and earnings. This further
reinforces our longer-term growth and value creation thesis for Xylem.”
Outlook
Xylem now expects full-year 2022 natural revenue development to be in the vary of 8 to 10 %, and three
to five percent on a reported foundation. This represents an increase from the Company’s previous full-year
organic income guidance of four to six percent, and 1 to three p.c on a reported foundation. Full-year 2022
adjusted EBITDA margin is now expected to be in the range of sixteen.5 to 17.0 p.c, elevating the low finish
of the earlier range of sixteen.zero to 17.zero percent. This leads to adjusted earnings per share of $2.50 to
$2.70, raising the low finish from the earlier vary of $2.40 to $2.70. The elevated steering displays
strong demand, gradual easing of provide chain constraints and worth realization partially offset by
inflation and international 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 steering only on a non-GAAP
foundation because of the inherent issue in forecasting sure amounts that might be included in GAAP
earnings, such as discrete tax items, without unreasonable effort.
Second Quarter Segment Results
Water Infrastructure
Xylem’s Water Infrastructure segment consists of its portfolio of companies serving clean water
delivery, wastewater transport and therapy, and dewatering.
• Second quarter 2022 Water Infrastructure revenue was $589 million, a 9.zero percent enhance
organically compared with second quarter 2021. This sturdy growth was pushed by robust worth
realization, industrial dewatering demand, and wholesome activity in our wastewater utility enterprise
in the us and Western Europe.
• Second quarter adjusted EBITDA margin was 21.four p.c, up 240 foundation factors from the prior
12 months. Reported operating earnings for the segment was $108 million. Adjusted working earnings
for the phase, which excludes $3 million of restructuring and realignment, was $111 million, a
14.four p.c increase versus the comparable interval last 12 months. Reported operating margin for
the phase was 18.3 %, up 200 foundation points versus the prior 12 months, and adjusted
working margin was 18.eight percent, up 180 foundation points versus the prior 12 months. Strong price
realization, volume, and productivity financial savings greater than offset inflation and strategic
investments.
Applied Water
Xylem’s Applied Water phase consists of its portfolio of businesses in industrial, commercial building,
and residential applications.
• Second quarter 2022 Applied Water income was $429 million, a 7.0 percent enhance
organically year-over-year. The segment delivered sturdy 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 sixteen.1 %, down 130 basis factors from the
prior yr. Reported working income for the segment was $61 million and adjusted operating
income, which excludes $2 million of restructuring and realignment prices, was $63 million, a 4.5
percent decrease versus the comparable period final yr. The segment reported operating
margin was 14.2 %, down a hundred thirty foundation factors versus the prior 12 months interval. Adjusted
working margin declined a hundred and twenty foundation factors to 14.7 %. Strong price realization and
productiveness savings were more than offset by inflation and decrease volume.
Measurement & Control Solutions
Xylem’s Measurement & Control Solutions segment 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 2.0
p.c organically versus the prior yr. While chip supply remains constrained, the result is
higher than our expectations because of improved chip provide in the quarter, and power in our
water quality take a look at purposes.
• Second quarter adjusted EBITDA margin was 9.8 percent, down 410 basis factors from the prior
year. 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 more than offset worth realization and
productivity savings.
Supplemental info 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 world water expertise company committed to fixing crucial water and
infrastructure challenges with innovation. Our 17,000 diverse workers delivered revenue of $5.2
billion in 2021. We are creating a extra sustainable world by enabling our clients to optimize water
and resource management, and helping communities in additional than a hundred and fifty countries turn out to be watersecure. Join us at www.xylem.com.
Forward-Looking Statements
This press launch incorporates “forward-looking statements” within 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 comparable expressions or their adverse, may, however usually are not essential to, establish
forward-looking statements. By their nature, forward-looking statements handle uncertain issues and
embody any statements that aren’t historical, similar to statements about our strategy, financial plans,
outlook, objectives, plans, intentions or goals (including those associated to our social, environmental and
other sustainability goals); or tackle potential or future outcomes of operations or financial efficiency,
together with statements referring to orders, revenues, working margins and earnings per share development.
Although we consider that the expectations reflected in any of our forward-looking statements are
cheap, precise outcomes could differ materially from those projected or assumed in any of our forwardlooking statements. Our future financial situation and results of operations, in addition to any forwardlooking statements, are topic to vary and to inherent dangers and uncertainties, a lot of which are
beyond our control. Additionally, many of these risks and uncertainties are, and may continue to be,
amplified by impacts from the struggle between Russia and Ukraine, as properly as the continuing coronavirus
(“COVID-19”) pandemic and associated macroeconomic circumstances (including inflation). Important elements
that might cause our actual results, efficiency and achievements, or industry outcomes to differ
materially from estimates or projections contained in or implied by our forward-looking statements
embrace, among others, the next: the impression of general trade and common financial conditions,
together with industrial, governmental, and public and private sector spending and the strength of the
residential and industrial real estate markets, on financial exercise and our operations; geopolitical
occasions, together with the warfare between Russia and Ukraine, and regulatory, financial and different dangers
associated with our global sales and operations, including with respect to home content material
requirements applicable to projects with governmental funding; continued uncertainty across the
ongoing COVID-19 pandemic’s magnitude, duration and impacts on our business, operations, growth,
and monetary situation; actual or potential different epidemics, pandemics or world well being crises;
availability, shortage or delays in receiving electronic parts (in specific, semiconductors), elements,
and raw materials from our provide chain; manufacturing and operating cost will increase due to
macroeconomic conditions, together with inflation, provide chain shortages, logistics challenges, tight labor
markets, prevailing price modifications, tariffs and different components; demand for our products; disruption,
competitors or pricing pressures in the markets we serve; cybersecurity incidents or other disruptions of
information know-how techniques 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 attract senior administration
and other numerous and key expertise, as properly as competitors for overall talent and labor; problem predicting
our financial outcomes; defects, security, warranty and liability claims, and recalls 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 expenses and savings; our ability to proceed
strategic investments for growth; our ability to efficiently determine, execute and integrate acquisitions;
volatility in served markets or impacts on business and operations as a outcome of weather conditions, together with
the results of local weather change; fluctuations in foreign forex exchange rates; our capability to borrow or
refinance our present indebtedness and uncertainty around the availability of liquidity adequate to satisfy
our wants; danger of future impairments to goodwill and different intangible property; failure to comply with, or
changes in, laws or regulations, including these pertaining to anti-corruption, information privateness and security,
export and import, competition, and the environment and climate change; changes in our efficient tax
rates or tax expenses; authorized, 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 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 launch concerning our environmental and different
sustainability plans and targets are not an indication that these statements are essentially material to
traders or are required to be disclosed in our filings with the SEC. In addition, historical, present, and
forward-looking social, environmental and sustainability related statements may be primarily based on standards
for measuring progress which are still creating, internal controls and processes that proceed to evolve,
and assumptions which are topic to alter sooner or later. 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 or not because of new
info, future events or otherwise, besides as required by legislation
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