Xylem Reports Second Quarter 2022 Results


Xylem Reports Second Quarter 2022 Results

by Brenna ShumbamhiniAugust 2, 2022


Robust continuing demand drove sturdy natural orders progress: 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.sixty two, adjusted earnings per share of $0.66

• Adjusted EBITDA margin exceeded guidance by 160 foundation points

• Raising full-year organic income guidance to a spread 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 leading world water technology

company devoted to fixing the world’s most difficult water issues, right now reported second quarter

income of $1.four billion, surpassing earlier steering in each enterprise section. Strong continued

global demand drove orders and backlog progress across the portfolio.
Second quarter adjusted earnings before interest, tax, depreciation and amortization (EBITDA) margin

was 16.6 p.c, better than the Company’s earlier steering and reflecting a year-over-year

decrease of 70 foundation factors. Inflation and the impact of continuous chip shortages drove the margin

decline, exceeding the advantages of price realization and productivity financial savings. Xylem generated net

income of $112 million, or $0.62 per share, and adjusted internet income of $120 million, or $0.66 per share,
which excludes the impression of restructuring, realignment and special costs.
“The team delivered very robust second quarter efficiency on all key metrics, and nicely forward of our

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

industrial 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 development, and the team’s demonstrated success mitigating

the effects of inflation, we’re elevating our full-year steerage on revenue and earnings. This additional

reinforces our longer-term progress and value creation thesis for Xylem.”


Xylem now expects full-year 2022 organic income growth to be in the range of 8 to 10 percent, and 3

to five percent on a reported basis. This represents an increase from the Company’s earlier full-year

organic revenue steerage of 4 to 6 p.c, and 1 to three percent on a reported basis. Full-year 2022

adjusted EBITDA margin is now expected to be within the range of sixteen.5 to 17.zero p.c, elevating the low end

of the earlier vary of 16.0 to 17.0 p.c. This results in adjusted earnings per share of $2.50 to

$2.70, raising the low end from the previous vary of $2.forty to $2.70. The elevated steering reflects

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

inflation and foreign change headwinds.
Further 2022 planning assumptions are included in Xylem’s second quarter 2022 earnings materials

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

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

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

Water Infrastructure

Xylem’s Water Infrastructure segment consists of its portfolio of businesses serving clean water

supply, wastewater transport and remedy, and dewatering.
• Second quarter 2022 Water Infrastructure income was $589 million, a 9.0 percent improve

organically compared with second quarter 2021. This robust growth was driven by sturdy worth

realization, industrial dewatering demand, and wholesome exercise in our wastewater utility enterprise

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

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

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

14.four p.c enhance versus the comparable period final year. Reported operating margin for

the segment was 18.three p.c, up 200 foundation factors versus the prior 12 months, and adjusted

working margin was 18.eight percent, up a hundred and eighty basis points versus the prior 12 months. Strong price

realization, volume, and productivity savings more than offset inflation and strategic

Applied Water

Xylem’s Applied Water phase consists of its portfolio of companies in industrial, business constructing,
and residential purposes.
• Second quarter 2022 Applied Water revenue was $429 million, a 7.zero % improve

organically year-over-year. The segment delivered robust value realization and backlog

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

constraints in industrial buildings in the United States.
• Second quarter adjusted EBITDA margin was sixteen.1 %, down a hundred thirty basis factors from the

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

earnings, which excludes $2 million of restructuring and realignment costs, was $63 million, a four.5

p.c lower versus the comparable period final yr. The phase reported working

margin was 14.2 %, down 130 basis points versus the prior yr interval. Adjusted

working margin declined a hundred and twenty basis factors to 14.7 %. Strong value realization and

productiveness financial savings had been more 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, community applied sciences, superior infrastructure analytics and analytic instrumentation.
digital pressure gauge & Control Solutions revenue was $346 million, down 2.zero

p.c organically versus the prior year. While chip supply remains constrained, the result is

higher than our expectations as a end result of improved chip provide within the quarter, and power in our

water quality check functions.
• Second quarter adjusted EBITDA margin was 9.8 percent, down 410 basis points from the prior

12 months. Reported operating income for the section 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

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

About Xylem

Xylem (XYL) is a leading global water know-how firm dedicated to solving critical water and

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

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

and resource management, and serving to communities in more than 150 international locations turn into 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, might, however usually are not necessary to, determine

forward-looking statements. By their nature, forward-looking statements tackle uncertain matters and

embrace any statements that aren’t historical, similar to statements about our strategy, monetary plans,
outlook, aims, plans, intentions or goals (including these associated to our social, environmental and

different sustainability goals); or handle potential or future results of operations or monetary efficiency,
together with statements relating to orders, revenues, operating margins and earnings per share progress.
Although we consider that the expectations reflected in any of our forward-looking statements are

reasonable, actual results might differ materially from those projected or assumed in any of our forwardlooking statements. Our future financial condition and results of operations, in addition to any forwardlooking statements, are topic to alter and to inherent dangers and uncertainties, a lot of which are

beyond our control. Additionally, many of these risks and uncertainties are, and will proceed to be,
amplified by impacts from the struggle between Russia and Ukraine, in addition to the ongoing coronavirus

(“COVID-19”) pandemic and related macroeconomic situations (including inflation). Important factors

that could cause our actual outcomes, efficiency and achievements, or business outcomes to differ

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

embody, among others, the next: the impression of total business and basic economic situations,
together with industrial, governmental, and private and non-private sector spending and the strength of the

residential and industrial real property markets, on financial activity and our operations; geopolitical

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

associated with our international gross sales and operations, together with with respect to domestic content

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

ongoing COVID-19 pandemic’s magnitude, period and impacts on our enterprise, operations, progress,
and monetary situation; precise or potential different epidemics, pandemics or international well being crises;
availability, scarcity or delays in receiving electronic elements (in particular, semiconductors), elements,
and uncooked supplies from our provide chain; manufacturing and working value increases because of

macroeconomic situations, together with inflation, supply chain shortages, logistics challenges, tight labor

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

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

our facilities or that of third events upon which we rely; capacity to retain and attract senior administration

and other numerous and key talent, as properly as competition for general expertise and labor; issue predicting

our financial outcomes; defects, security, warranty and liability claims, and recollects with respect to merchandise;
availability, regulation or interference with radio spectrum used by sure of our products; uncertainty

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

strategic investments for growth; our capability to successfully determine, execute and combine acquisitions;
volatility in served markets or impacts on enterprise and operations due to weather situations, including

the effects of climate change; fluctuations in overseas currency change charges; our ability to borrow or

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

our needs; danger of future impairments to goodwill and different intangible assets; failure to comply with, or

adjustments in, legal guidelines or laws, including those pertaining to anti-corruption, data privacy and security,
export and import, competition, and the environment and climate change; adjustments in our efficient tax

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

associated contingent liabilities; and different components set forth beneath “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 relating to our environmental and other

sustainability plans and objectives are not a sign that these statements are essentially 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 requirements

for measuring progress which are nonetheless creating, internal controls and processes that proceed to evolve,
and assumptions which may be topic to vary in the future. All forward-looking statements made herein

are based on info presently available 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

data, future occasions or in any other case, besides as required by regulation


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