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 continuing demand drove robust organic orders development: 1% on a reported
basis, 6% organically
• Revenue of $1.four 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 basis points
• Raising full-year organic income steerage to a range 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 number one international water expertise
company devoted to fixing the world’s most difficult water issues, right now reported second quarter
income of $1.4 billion, surpassing previous steering in each business phase. Strong continued
world demand drove orders and backlog growth across the portfolio.
Second quarter adjusted earnings before curiosity, tax, depreciation and amortization (EBITDA) margin
was sixteen.6 p.c, higher than the Company’s previous steering and reflecting a year-over-year
decrease of 70 foundation points. Inflation and the impression of continuing chip shortages drove the margin
decline, exceeding the advantages of worth realization and productivity savings. Xylem generated web
earnings of $112 million, or $0.sixty two per share, and adjusted web income of $120 million, or $0.66 per share,
which excludes the influence of restructuring, realignment and special charges.
“The team delivered very robust second quarter efficiency on all key metrics, and nicely forward of our
steering for the quarter,” mentioned Patrick Decker, Xylem president and CEO. “The outcome reflects our
business momentum on continuing underlying demand, disciplined operational execution, and a
reasonable easing in chip provide constraints.”
“On the energy of robust backlog and orders progress, and the team’s demonstrated success mitigating
the effects of inflation, we are raising our full-year steerage on revenue and earnings. This further
reinforces our longer-term progress and worth creation thesis for Xylem.”
Outlook
Xylem now expects full-year 2022 natural income development to be within the vary of eight to 10 percent, and three
to 5 p.c on a reported foundation. This represents an increase from the Company’s earlier full-year
natural income guidance of four to 6 %, and 1 to three % on a reported basis. Full-year 2022
adjusted EBITDA margin is now anticipated to be within the range of sixteen.5 to 17.0 percent, elevating the low end
of the earlier vary of sixteen.0 to 17.zero p.c. This results in adjusted earnings per share of $2.50 to
$2.70, elevating the low end from the earlier range of $2.forty to $2.70. The increased steering displays
strong demand, gradual easing of provide chain constraints and worth realization partially offset by
inflation and international exchange headwinds.
Further 2022 planning assumptions are included in Xylem’s second quarter 2022 earnings materials
posted at www.xylem.com/investors. Excluding income, Xylem offers steerage solely on a non-GAAP
foundation as a outcome of inherent issue in forecasting certain amounts that would be included in GAAP
earnings, such as discrete tax gadgets, with out unreasonable effort.
Second Quarter Segment Results
Water Infrastructure
Xylem’s Water Infrastructure section consists of its portfolio of companies serving clean water
delivery, wastewater transport and treatment, and dewatering.
• Second quarter 2022 Water Infrastructure revenue was $589 million, a 9.zero % enhance
organically in contrast with second quarter 2021. This robust growth was driven by sturdy value
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 %, up 240 basis points from the prior
12 months. Reported operating income for the section was $108 million. Adjusted operating revenue
for the section, which excludes $3 million of restructuring and realignment, was $111 million, a
14.four p.c increase versus the comparable period last yr. Reported operating margin for
the section was 18.three p.c, up 200 foundation points versus the prior yr, and adjusted
working margin was 18.eight percent, up a hundred and eighty foundation points versus the prior yr. Strong worth
realization, volume, and productivity financial 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 applications.
• Second quarter 2022 Applied Water income was $429 million, a 7.0 % enhance
organically year-over-year. The phase delivered sturdy worth 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 sixteen.1 %, down a hundred thirty foundation factors from the
prior 12 months. Reported working revenue for the phase was $61 million and adjusted working
income, which excludes $2 million of restructuring and realignment costs, was $63 million, a four.5
percent lower versus the comparable interval final yr. The segment reported working
margin was 14.2 p.c, down a hundred thirty basis factors versus the prior year interval. Adjusted
working margin declined 120 basis points to 14.7 percent. Strong price realization and
productiveness savings had been greater than offset by inflation and lower quantity.
Measurement & Control Solutions
Xylem’s Measurement & Control Solutions section consists of its portfolio of businesses in good
metering, network technologies, superior infrastructure analytics and analytic instrumentation.
• Second quarter 2022 Measurement & Control Solutions income was $346 million, down 2.zero
p.c organically versus the prior year. While chip supply stays constrained, the result’s
higher than our expectations due to improved chip supply in the quarter, and energy in our
water high quality take a look at purposes.
• Second quarter adjusted EBITDA margin was 9.8 %, down 410 foundation factors from the prior
12 months. Reported operating earnings for the section was $(5) million, and adjusted operating
revenue, which excludes $3 million of restructuring and realignment prices and $1 million of
shortages, unfavorable combine and better inflation more than offset worth realization and
productivity savings.
Supplemental information 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 number one international water technology company dedicated to solving important water and
infrastructure challenges with innovation. เพรสเชอร์เกจ 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 administration, and serving to communities in more than 150 countries become watersecure. Join us at www.xylem.com.
Forward-Looking Statements
This press launch incorporates “forward-looking statements” inside 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 similar expressions or their unfavorable, might, but usually are not necessary to, establish
forward-looking statements. By their nature, forward-looking statements address unsure matters and
embrace any statements that are not historical, such as statements about our strategy, financial plans,
outlook, goals, plans, intentions or targets (including these associated to our social, environmental and
other sustainability goals); or tackle attainable or future outcomes of operations or financial performance,
including statements referring to orders, revenues, operating margins and earnings per share growth.
Although we imagine that the expectations mirrored in any of our forward-looking statements are
affordable, actual results might differ materially from those projected or assumed in any of our forwardlooking statements. Our future financial situation and outcomes of operations, as properly as any forwardlooking statements, are subject to vary and to inherent dangers and uncertainties, lots of which are
past our management. Additionally, many of these risks and uncertainties are, and should proceed to be,
amplified by impacts from the warfare between Russia and Ukraine, as properly as the continuing coronavirus
(“COVID-19”) pandemic and associated macroeconomic conditions (including inflation). Important factors
that could trigger our precise results, efficiency and achievements, or industry results to vary
materially from estimates or projections contained in or implied by our forward-looking statements
include, amongst others, the next: the influence of total business and common financial situations,
together with industrial, governmental, and public and private sector spending and the energy of the
residential and business actual property markets, on economic activity and our operations; geopolitical
occasions, including the war between Russia and Ukraine, and regulatory, financial and different risks
related to our global gross sales and operations, together with with respect to domestic content material
requirements applicable to tasks with governmental funding; continued uncertainty across the
ongoing COVID-19 pandemic’s magnitude, duration and impacts on our enterprise, operations, development,
and financial situation; actual or potential different epidemics, pandemics or world health crises;
availability, scarcity or delays in receiving electronic components (in specific, semiconductors), components,
and raw supplies from our supply chain; manufacturing and working cost increases because of
macroeconomic circumstances, together with inflation, provide chain shortages, logistics challenges, tight labor
markets, prevailing worth changes, tariffs and other components; demand for our merchandise; disruption,
competition or pricing pressures in the markets we serve; cybersecurity incidents or other disruptions of
data know-how systems on which we rely, or involving our products; disruptions in operations at
our services or that of third parties upon which we rely; ability to retain and appeal to senior management
and other various and key expertise, in addition to competition for overall expertise and labor; difficulty predicting
our monetary results; defects, security, warranty and liability claims, and recalls with respect to products;
availability, regulation or interference with radio spectrum utilized by certain of our merchandise; uncertainty
related to restructuring and realignment actions and related costs and financial savings; our ability to proceed
strategic investments for progress; our capacity to efficiently identify, execute and integrate acquisitions;
volatility in served markets or impacts on business and operations because of weather situations, together with
the results of local weather change; fluctuations in international foreign money exchange charges; our capability to borrow or
refinance our existing indebtedness and uncertainty around the availability of liquidity enough to satisfy
our needs; threat of future impairments to goodwill and other intangible property; failure to adjust to, or
modifications in, legal guidelines or rules, including those pertaining to anti-corruption, information privacy and security,
export and import, competition, and the setting and local weather change; modifications in our effective tax
rates or tax bills; authorized, governmental or regulatory claims, investigations or proceedings and
associated contingent liabilities; and other components set forth under “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 other statements on this press launch concerning our environmental and other
sustainability plans and goals aren’t a sign that these statements are necessarily materials to
investors 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 could also be primarily based on requirements
for measuring progress which are nonetheless growing, inner controls and processes that continue to evolve,
and assumptions that are subject to alter in the future. All forward-looking statements made herein
are based on info presently out there to us as of the date of this press release. We undertake no
obligation to publicly replace or revise any forward-looking statements, whether as a result of new
info, future occasions or otherwise, except as required by regulation
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