Xylem Reports Second Quarter 2022 Results


Xylem Reports Second Quarter 2022 Results

by Brenna ShumbamhiniAugust 2, 2022


Robust persevering with demand drove sturdy organic orders growth: 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 $0.66

• Adjusted EBITDA margin exceeded guidance by a hundred and sixty basis factors

• Raising full-year organic income guidance to a range of 8% to 10% from 4% to

6%, and adjusted EPS to a variety 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 world water know-how

firm devoted to fixing the world’s most difficult water issues, at present reported second quarter

income of $1.four billion, surpassing earlier steerage in each business section. 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 steering and reflecting a year-over-year

lower of 70 foundation points. Inflation and the influence of continuous chip shortages drove the margin

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

revenue of $112 million, or $0.62 per share, and adjusted internet income of $120 million, or $0.sixty six per share,
which excludes the impact of restructuring, realignment and particular costs.
“The group 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 provide constraints.”

“On the energy of robust backlog and orders growth, and the team’s demonstrated success mitigating

the effects of inflation, we are elevating our full-year steerage on revenue and earnings. This further

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


Xylem now expects full-year 2022 organic revenue progress to be in the vary of eight to 10 percent, and three

to 5 p.c on a reported foundation. This represents a rise from the Company’s previous full-year

natural income guidance of four to six p.c, and 1 to three % on a reported foundation. Full-year 2022

adjusted EBITDA margin is now anticipated to be within the vary of sixteen.5 to 17.zero p.c, elevating the low finish

of the previous vary of sixteen.zero to 17.0 p.c. This ends in adjusted earnings per share of $2.50 to

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

posted at www.xylem.com/investors. Excluding income, Xylem offers steering only on a non-GAAP

foundation because of the inherent difficulty in forecasting sure amounts that may be included in GAAP

earnings, similar to discrete tax gadgets, with out unreasonable effort.
Second Quarter Segment Results

Water Infrastructure

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

delivery, wastewater transport and treatment, and dewatering.
• Second quarter 2022 Water Infrastructure income was $589 million, a 9.0 percent enhance

organically compared with second quarter 2021. This sturdy progress was driven by sturdy value

realization, industrial dewatering demand, and healthy exercise in our wastewater utility business

in the us and Western Europe.
• Second quarter adjusted EBITDA margin was 21.four percent, up 240 basis factors from the prior

12 months. Reported working earnings for the section was $108 million. Adjusted working income

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

14.4 percent increase versus the comparable interval final 12 months. Reported operating margin for

the phase was 18.three percent, up 200 basis points versus the prior year, and adjusted

working margin was 18.eight %, up 180 basis points versus the prior yr. Strong value

realization, volume, and productiveness financial savings more than offset inflation and strategic

Applied Water

Xylem’s Applied Water segment consists of its portfolio of companies in industrial, industrial constructing,
and residential purposes.
• Second quarter 2022 Applied Water revenue was $429 million, a 7.zero p.c enhance

organically year-over-year. The section delivered robust worth realization and backlog

execution in industrial and residential end markets, partially offset by continued supply chain

constraints in business buildings in the United States.
• Second quarter adjusted EBITDA margin was 16.1 p.c, down one hundred thirty basis factors from the

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

earnings, which excludes $2 million of restructuring and realignment costs, was $63 million, a 4.5

p.c lower versus the comparable period last 12 months. The segment reported working

margin was 14.2 %, down a hundred thirty basis points versus the prior year period. Adjusted

operating margin declined a hundred and twenty basis factors to 14.7 p.c. Strong price realization and

productivity savings had been more than offset by inflation and lower volume.
Measurement & Control Solutions

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

metering, community technologies, superior infrastructure analytics and analytic instrumentation.
เพรสเชอร์เกจ & Control Solutions income was $346 million, down 2.0

% organically versus the prior yr. While chip provide remains constrained, the result’s

higher than our expectations due to improved chip provide within the quarter, and energy in our

water quality test applications.
• Second quarter adjusted EBITDA margin was 9.8 p.c, down 410 basis points from the prior

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

earnings, which excludes $3 million of restructuring and realignment costs and $1 million of

shortages, unfavorable mix and better inflation more than offset worth realization and

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

About Xylem

Xylem (XYL) is a leading world water expertise company committed to fixing crucial water and

infrastructure challenges with innovation. Our 17,000 diverse staff delivered income of $5.2

billion in 2021. We are creating a extra sustainable world by enabling our prospects to optimize water

and resource management, and serving to 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 launch accommodates “forward-looking statements” inside 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 comparable expressions or their negative, could, but usually are not essential to, identify

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

embody any statements that are not historical, such as statements about our strategy, monetary plans,
outlook, aims, plans, intentions or objectives (including those related to our social, environmental and

different sustainability goals); or tackle attainable or future results of operations or monetary performance,
including statements relating to orders, revenues, operating margins and earnings per share progress.
Although we consider that the expectations mirrored in any of our forward-looking statements are

affordable, precise results may differ materially from those projected or assumed in any of our forwardlooking statements. Our future financial condition and outcomes of operations, as well as any forwardlooking statements, are topic to change and to inherent dangers and uncertainties, many of that are

past our management. Additionally, many of those dangers and uncertainties are, and should proceed to be,
amplified by impacts from the struggle between Russia and Ukraine, in addition to the continued coronavirus

(“COVID-19”) pandemic and associated macroeconomic circumstances (including inflation). Important factors

that would cause our actual outcomes, efficiency and achievements, or industry outcomes to vary

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

embrace, amongst others, the next: the impact of overall business and general financial circumstances,
together with industrial, governmental, and private and non-private sector spending and the strength of the

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

occasions, including the warfare between Russia and Ukraine, and regulatory, economic and other dangers

related to our world gross sales and operations, including with respect to domestic content

requirements relevant to initiatives with governmental funding; continued uncertainty around the

ongoing COVID-19 pandemic’s magnitude, length and impacts on our business, operations, development,
and financial situation; actual or potential other epidemics, pandemics or world health crises;
availability, shortage or delays in receiving electronic parts (in explicit, semiconductors), components,
and uncooked supplies from our supply chain; manufacturing and working cost increases due to

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

markets, prevailing price adjustments, tariffs and other elements; demand for our merchandise; disruption,
competitors or pricing pressures in the markets we serve; cybersecurity incidents or different disruptions of

info know-how techniques on which we rely, or involving our products; disruptions in operations at

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

and different various and key expertise, in addition to competition for total expertise and labor; problem predicting

our monetary outcomes; defects, safety, guarantee and liability claims, and recalls with respect to products;
availability, regulation or interference with radio spectrum utilized by sure of our merchandise; uncertainty

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

strategic investments for growth; our capability to successfully establish, execute and combine acquisitions;
volatility in served markets or impacts on enterprise and operations because of climate circumstances, together with

the results of climate change; fluctuations in international currency change charges; our ability to borrow or

refinance our existing indebtedness and uncertainty around the availability of liquidity adequate to fulfill

our wants; threat of future impairments to goodwill and different intangible belongings; failure to comply with, or

modifications in, laws or laws, including these pertaining to anti-corruption, information privateness and safety,
export and import, competition, and the setting and local weather change; changes in our efficient tax

rates or tax bills; legal, governmental or regulatory claims, investigations or proceedings and

related contingent liabilities; and different 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 different statements in this press launch regarding our environmental and different

sustainability plans and objectives aren’t an indication that these statements are necessarily materials to

buyers or are required to be disclosed in our filings with the SEC. In addition, historic, current, and

forward-looking social, environmental and sustainability related statements could additionally be based mostly on standards

for measuring progress which may be still developing, inner controls and processes that continue to evolve,
and assumptions which would possibly be subject to change in the future. All forward-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

information, future events or otherwise, except as required by law


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