FEATUREDMINING
Xylem Reports Second Quarter 2022 Results
by Brenna ShumbamhiniAugust 2, 2022
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Robust continuing demand drove sturdy organic orders development: 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 $0.62, adjusted earnings per share of $0.66
• Adjusted EBITDA margin exceeded guidance by a hundred and sixty basis points
• Raising full-year natural revenue steering 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 leading world water expertise
company dedicated to fixing the world’s most challenging water issues, at present reported second quarter
revenue of $1.four billion, surpassing previous steerage in every enterprise section. Strong continued
international demand drove orders and backlog progress throughout the portfolio.
Second quarter adjusted earnings before curiosity, tax, depreciation and amortization (EBITDA) margin
was sixteen.6 %, higher than the Company’s earlier steerage and reflecting a year-over-year
lower of 70 basis points. Inflation and the impact of continuing chip shortages drove the margin
decline, exceeding the advantages of value realization and productiveness savings. Xylem generated net
income 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 special expenses.
“The staff delivered very sturdy second quarter efficiency on all key metrics, and well forward of our
guidance for the quarter,” said Patrick Decker, Xylem president and CEO. “The outcome displays our
commercial momentum on continuing underlying demand, disciplined operational execution, and a
reasonable easing in chip supply constraints.”
“On the energy of sturdy backlog and orders progress, and the team’s demonstrated success mitigating
the consequences of inflation, we are elevating our full-year steering on revenue and earnings. This further
reinforces our longer-term progress and value creation thesis for Xylem.”
Outlook
Xylem now expects full-year 2022 natural revenue growth to be in the vary of 8 to 10 p.c, and three
to 5 percent on a reported foundation. This represents a rise from the Company’s earlier full-year
natural income steerage of 4 to six p.c, and 1 to three % on a reported basis. 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 previous range of 16.0 to 17.zero percent. This results in adjusted earnings per share of $2.50 to
$2.70, raising the low finish from the earlier vary of $2.forty to $2.70. The elevated steering displays
strong demand, gradual easing of provide chain constraints and value realization partially offset by
inflation and overseas trade headwinds.
Further 2022 planning assumptions are included in Xylem’s second quarter 2022 earnings materials
posted at www.xylem.com/investors. Excluding income, Xylem supplies steerage only on a non-GAAP
basis as a end result of inherent problem in forecasting certain quantities that might be included in GAAP
earnings, corresponding to discrete tax gadgets, without unreasonable effort.
Second Quarter Segment Results
Water Infrastructure
Xylem’s Water Infrastructure segment 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 improve
organically in contrast with second quarter 2021. This sturdy development was driven by sturdy price
realization, industrial dewatering demand, and healthy activity in our wastewater utility enterprise
in the united states and Western Europe.
• Second quarter adjusted EBITDA margin was 21.4 p.c, up 240 basis points from the prior
year. Reported working pressure gauge วัด แรง ดัน น้ำ for the segment was $108 million. Adjusted working revenue
for the segment, which excludes $3 million of restructuring and realignment, was $111 million, a
14.4 % increase versus the comparable period final yr. Reported working margin for
the section was 18.3 p.c, up 200 basis points versus the prior 12 months, and adjusted
working margin was 18.eight %, up one hundred eighty basis points versus the prior 12 months. Strong price
realization, volume, and productiveness savings more than offset inflation and strategic
investments.
Applied Water
Xylem’s Applied Water segment consists of its portfolio of businesses in industrial, industrial constructing,
and residential applications.
• 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 business buildings within the United States.
• Second quarter adjusted EBITDA margin was 16.1 p.c, down one hundred thirty foundation factors from the
prior year. Reported operating income for the section was $61 million and adjusted working
income, which excludes $2 million of restructuring and realignment costs, was $63 million, a 4.5
p.c lower versus the comparable interval last 12 months. The phase reported working
margin was 14.2 %, down 130 basis factors versus the prior year interval. Adjusted
operating margin declined a hundred and twenty basis points to 14.7 %. Strong worth realization and
productivity financial savings had been more than offset by inflation and decrease volume.
Measurement & Control Solutions
Xylem’s Measurement & Control Solutions phase consists of its portfolio of businesses in good
metering, network technologies, advanced infrastructure analytics and analytic instrumentation.
• Second quarter 2022 Measurement & Control Solutions revenue was $346 million, down 2.0
% organically versus the prior yr. While chip provide remains constrained, the result’s
better than our expectations due to improved chip provide in the quarter, and strength in our
water quality check functions.
• Second quarter adjusted EBITDA margin was 9.eight percent, down 410 basis factors from the prior
yr. Reported working revenue for the segment was $(5) million, and adjusted operating
revenue, which excludes $3 million of restructuring and realignment costs and $1 million of
shortages, unfavorable mix and better inflation more than offset value realization and
productiveness financial savings.
Supplemental info on Xylem’s second quarter 2022 earnings and reconciliations for sure nonGAAP items is posted at www.xylem.com/investors.
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About Xylem
Xylem (XYL) is a number one world water technology firm dedicated to fixing important water and
infrastructure challenges with innovation. Our 17,000 numerous workers delivered income of $5.2
billion in 2021. We are creating a more sustainable world by enabling our customers to optimize water
and resource administration, and serving to communities in more than a hundred and fifty countries turn into watersecure. Join us at www.xylem.com.
Forward-Looking Statements
This press release incorporates “forward-looking statements” within 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 negative, might, however are not essential to, identify
forward-looking statements. By their nature, forward-looking statements tackle uncertain issues and
embody any statements that are not historic, similar to statements about our technique, monetary plans,
outlook, objectives, plans, intentions or goals (including those associated to our social, environmental and
other sustainability goals); or tackle possible or future outcomes of operations or financial efficiency,
including statements relating 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
reasonable, precise results may differ materially from these projected or assumed in any of our forwardlooking statements. Our future financial situation and results of operations, as properly as any forwardlooking statements, are subject to vary and to inherent risks and uncertainties, a lot of that are
past our management. Additionally, many of these risks and uncertainties are, and may proceed to be,
amplified by impacts from the warfare between Russia and Ukraine, in addition to the ongoing coronavirus
(“COVID-19”) pandemic and associated macroeconomic situations (including inflation). Important components
that could cause our actual results, performance and achievements, or trade outcomes to differ
materially from estimates or projections contained in or implied by our forward-looking statements
embody, amongst others, the following: the influence of overall business and general economic circumstances,
including industrial, governmental, and public and private sector spending and the strength of the
residential and industrial actual property markets, on economic exercise and our operations; geopolitical
occasions, together with the war between Russia and Ukraine, and regulatory, economic and other risks
associated with our world gross sales and operations, together with with respect to domestic content material
requirements relevant to tasks with governmental funding; continued uncertainty around the
ongoing COVID-19 pandemic’s magnitude, duration and impacts on our enterprise, operations, development,
and financial condition; actual or potential other epidemics, pandemics or international health crises;
availability, shortage or delays in receiving digital components (in explicit, semiconductors), components,
and uncooked supplies from our provide chain; manufacturing and operating cost will increase as a result of
macroeconomic circumstances, including inflation, provide chain shortages, logistics challenges, tight labor
markets, prevailing price modifications, tariffs and different factors; demand for our merchandise; disruption,
competitors or pricing pressures in the markets we serve; cybersecurity incidents or different disruptions of
information technology systems on which we rely, or involving our products; disruptions in operations at
our facilities or that of third parties upon which we rely; ability to retain and appeal to senior management
and different numerous and key expertise, as well as competitors for overall expertise and labor; issue predicting
our financial outcomes; defects, safety, warranty and legal responsibility claims, and recalls with respect to products;
availability, regulation or interference with radio spectrum utilized by certain of our products; uncertainty
associated to restructuring and realignment actions and related expenses and financial savings; our capability to continue
strategic investments for development; our capacity to successfully determine, execute and integrate acquisitions;
volatility in served markets or impacts on business and operations as a outcome of weather situations, together with
the consequences of local weather change; fluctuations in foreign forex exchange charges; our ability to borrow or
refinance our existing indebtedness and uncertainty across the availability of liquidity enough to satisfy
our wants; threat of future impairments to goodwill and other intangible belongings; failure to adjust to, or
adjustments in, laws or laws, including these pertaining to anti-corruption, data privateness and security,
export and import, competition, and the surroundings and local weather change; modifications in our efficient tax
charges or tax bills; 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
investors 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 also be based mostly on standards
for measuring progress which would possibly be nonetheless growing, internal controls and processes that continue to evolve,
and assumptions which may be topic to vary sooner or later. All forward-looking statements made herein
are based mostly on information currently out there to us as of the date of this press launch. We undertake no
obligation to publicly update or revise any forward-looking statements, whether as a end result of new
information, future events or otherwise, besides as required by regulation
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