FEATUREDMINING
Xylem Reports Second Quarter 2022 Results
by Brenna ShumbamhiniAugust 2, 2022
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Robust continuing demand drove strong natural orders development: 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.sixty two, adjusted earnings per share of $0.sixty six
• Adjusted EBITDA margin exceeded steering by one hundred sixty basis points
• Raising full-year natural revenue steerage to a variety of 8% to 10% from 4% to
6%, and adjusted EPS to a range of $2.50 to $2.70 from $2.40 to $2.70
Washington, D.C., August 2, 2022 – Xylem Inc. (NYSE: XYL), a number one global water technology
firm devoted to solving the world’s most challenging water points, at present reported second quarter
income of $1.4 billion, surpassing previous guidance in each business phase. Strong continued
world demand drove orders and backlog development throughout the portfolio.
Second quarter adjusted earnings before interest, tax, depreciation and amortization (EBITDA) margin
was 16.6 p.c, higher than the Company’s previous steerage and reflecting a year-over-year
lower of 70 basis points. Inflation and the influence of continuous chip shortages drove the margin
decline, exceeding the advantages of worth realization and productivity savings. Xylem generated internet
revenue of $112 million, or $0.62 per share, and adjusted web earnings of $120 million, or $0.66 per share,
which excludes the impression of restructuring, realignment and special costs.
“The staff delivered very sturdy second quarter performance on all key metrics, and nicely ahead of our
steering for the quarter,” stated Patrick Decker, Xylem president and CEO. “The outcome reflects our
commercial momentum on persevering with underlying demand, disciplined operational execution, and a
average easing in chip provide constraints.”
“On the strength of robust backlog and orders development, and the team’s demonstrated success mitigating
the effects of inflation, we are elevating our full-year steerage on revenue and earnings. This additional
reinforces our longer-term growth and worth creation thesis for Xylem.”
Outlook
Xylem now expects full-year 2022 natural revenue development to be within the vary of 8 to 10 %, and three
to 5 percent on a reported foundation. This represents an increase from the Company’s previous full-year
organic revenue steering of 4 to six %, and 1 to 3 percent on a reported basis. Full-year 2022
adjusted EBITDA margin is now expected to be within the vary of sixteen.5 to 17.0 %, elevating the low finish
of the earlier vary of sixteen.0 to 17.zero %. This leads to adjusted earnings per share of $2.50 to
$2.70, raising the low finish from the earlier range of $2.40 to $2.70. The elevated guidance reflects
robust demand, gradual easing of provide chain constraints and worth realization partially offset by
inflation and international trade headwinds.
Further 2022 planning assumptions are included in Xylem’s second quarter 2022 earnings supplies
posted at www.xylem.com/investors. Excluding revenue, Xylem offers steering only on a non-GAAP
foundation due to the inherent difficulty in forecasting certain amounts that may be included in GAAP
earnings, similar to discrete tax items, without unreasonable effort.
Second Quarter Segment Results
Water Infrastructure
Xylem’s Water Infrastructure phase consists of its portfolio of businesses serving clear water
supply, wastewater transport and treatment, and dewatering.
• Second quarter 2022 Water Infrastructure revenue was $589 million, a 9.0 p.c increase
organically compared with second quarter 2021. This sturdy development was driven by sturdy value
realization, industrial dewatering demand, and healthy activity in our wastewater utility business
in the united states and Western Europe.
• Second quarter adjusted EBITDA margin was 21.four %, up 240 foundation points from the prior
yr. Reported operating pressure gauge ไท วัสดุ for the segment was $108 million. Adjusted working income
for the phase, which excludes $3 million of restructuring and realignment, was $111 million, a
14.4 % increase versus the comparable period last yr. Reported working margin for
the segment was 18.three %, up 200 basis points versus the prior yr, and adjusted
working margin was 18.eight %, up 180 basis points versus the prior yr. Strong value
realization, volume, and productivity financial savings more than offset inflation and strategic
investments.
Applied Water
Xylem’s Applied Water segment consists of its portfolio of businesses in industrial, commercial building,
and residential applications.
• Second quarter 2022 Applied Water income was $429 million, a 7.zero % increase
organically year-over-year. The section delivered sturdy price realization and backlog
execution in industrial and residential finish markets, partially offset by continued supply chain
constraints in business buildings within the United States.
• Second quarter adjusted EBITDA margin was 16.1 percent, down one hundred thirty foundation factors from the
prior year. Reported working revenue for the section was $61 million and adjusted operating
earnings, which excludes $2 million of restructuring and realignment costs, was $63 million, a 4.5
% decrease versus the comparable period last year. The phase reported working
margin was 14.2 percent, down one hundred thirty basis factors versus the prior year period. Adjusted
working margin declined 120 basis factors to 14.7 percent. Strong price realization and
productiveness financial savings had been greater than offset by inflation and lower quantity.
Measurement & Control Solutions
Xylem’s Measurement & Control Solutions phase consists of its portfolio of businesses in sensible
metering, network technologies, advanced 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 provide stays constrained, the result’s
higher than our expectations as a result of improved chip supply in the quarter, and energy in our
water high quality test purposes.
• Second quarter adjusted EBITDA margin was 9.8 %, down 410 foundation points from the prior
yr. Reported operating earnings for the section was $(5) million, and adjusted operating
income, which excludes $3 million of restructuring and realignment prices and $1 million of
shortages, unfavorable combine and higher inflation greater 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 quantity one world water technology company committed to fixing critical water and
infrastructure challenges with innovation. Our 17,000 numerous employees delivered income of $5.2
billion in 2021. We are making a more sustainable world by enabling our customers to optimize water
and useful resource administration, and helping communities in additional than a hundred and fifty international locations turn into watersecure. Join us at www.xylem.com.
Forward-Looking Statements
This press launch accommodates “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 words “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,”
“contemplate,” “predict,” “forecast,” “likely,” “believe,” “target,” “will,” “could,” “would,” “should,”
“potential,” “may” and comparable expressions or their unfavorable, could, however usually are not necessary to, identify
forward-looking statements. By their nature, forward-looking statements handle uncertain matters and
include any statements that are not historical, such as statements about our strategy, monetary plans,
outlook, objectives, plans, intentions or goals (including those associated to our social, environmental and
other sustainability goals); or address potential or future results of operations or financial efficiency,
including statements relating to orders, revenues, working margins and earnings per share growth.
Although we imagine that the expectations reflected in any of our forward-looking statements are
cheap, actual outcomes could differ materially from these 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 change and to inherent risks and uncertainties, lots of that are
beyond 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 well as the ongoing coronavirus
(“COVID-19”) pandemic and related macroeconomic circumstances (including inflation). Important components
that might cause our precise results, performance and achievements, or industry results to differ
materially from estimates or projections contained in or implied by our forward-looking statements
embody, amongst others, the next: the impression of general business and basic economic circumstances,
including industrial, governmental, and public and private sector spending and the power of the
residential and industrial real property markets, on economic activity and our operations; geopolitical
occasions, together with the war between Russia and Ukraine, and regulatory, economic and different dangers
associated with our international sales and operations, including with respect to home content
necessities applicable to initiatives with governmental funding; continued uncertainty around the
ongoing COVID-19 pandemic’s magnitude, duration and impacts on our enterprise, operations, development,
and financial situation; precise or potential different epidemics, pandemics or international health crises;
availability, scarcity or delays in receiving digital parts (in explicit, semiconductors), parts,
and raw materials from our provide chain; manufacturing and working price will increase because of
macroeconomic conditions, including inflation, supply chain shortages, logistics challenges, tight labor
markets, prevailing price modifications, tariffs and different elements; demand for our merchandise; disruption,
competitors 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 services or that of third parties upon which we rely; capacity to retain and entice senior management
and other numerous and key talent, as well as competition for overall expertise and labor; difficulty predicting
our monetary outcomes; defects, safety, warranty and legal responsibility claims, and remembers with respect to products;
availability, regulation or interference with radio spectrum utilized by sure of our products; uncertainty
related to restructuring and realignment actions and related costs and savings; our capacity to proceed
strategic investments for growth; our ability to efficiently establish, execute and integrate acquisitions;
volatility in served markets or impacts on business and operations as a result of climate conditions, including
the results of local weather change; fluctuations in international foreign money change charges; our capacity to borrow or
refinance our current indebtedness and uncertainty across the availability of liquidity enough to satisfy
our wants; risk of future impairments to goodwill and different intangible property; failure to comply with, or
adjustments in, laws or laws, together with those pertaining to anti-corruption, knowledge privateness and safety,
export and import, competition, and the setting and local weather change; changes in our efficient tax
charges or tax expenses; authorized, governmental or regulatory claims, investigations or proceedings and
related contingent liabilities; and different elements set forth underneath “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 release regarding our environmental and other
sustainability plans and objectives are not an indication that these statements are essentially materials to
traders or are required to be disclosed in our filings with the SEC. In addition, historic, current, and
forward-looking social, environmental and sustainability associated statements may be based on standards
for measuring progress which are still creating, inside controls and processes that continue to evolve,
and assumptions which may be subject to change sooner or later. All forward-looking statements made herein
are based mostly on data presently out there to us as of the date of this press release. We undertake no
obligation to publicly update or revise any forward-looking statements, whether as a result of new
info, future occasions or in any other case, besides as required by law
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