FEATUREDMINING
Xylem Reports Second Quarter 2022 Results
by Brenna ShumbamhiniAugust 2, 2022
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Robust persevering with demand drove sturdy organic 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 steerage by a hundred and sixty foundation factors
• Raising full-year organic revenue steering 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.forty to $2.70
Washington, D.C., August 2, 2022 – Xylem Inc. (NYSE: XYL), a leading world water expertise
firm devoted to fixing the world’s most difficult water points, today reported second quarter
revenue of $1.4 billion, surpassing earlier steerage in every business section. Strong continued
world demand drove orders and backlog development across the portfolio.
Second quarter adjusted earnings before interest, tax, depreciation and amortization (EBITDA) margin
was 16.6 percent, higher than the Company’s previous steerage and reflecting a year-over-year
lower of 70 foundation points. Inflation and the impact of continuing chip shortages drove the margin
decline, exceeding the benefits of price realization and productiveness financial savings. Xylem generated net
income of $112 million, or $0.sixty two per share, and adjusted web income of $120 million, or $0.sixty six per share,
which excludes the impact of restructuring, realignment and particular expenses.
“The staff delivered very robust second quarter efficiency on all key metrics, and properly forward of our
guidance 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 strong backlog and orders progress, and the team’s demonstrated success mitigating
the results of inflation, we are elevating our full-year guidance on income and earnings. This further
reinforces our longer-term development and worth creation thesis for Xylem.”
Outlook
Xylem now expects full-year 2022 organic income growth to be within the range of eight to 10 %, and three
to five p.c on a reported basis. This represents an increase from the Company’s earlier full-year
organic income steering of 4 to six p.c, and 1 to three percent on a reported basis. Full-year 2022
adjusted EBITDA margin is now expected to be in the vary of sixteen.5 to 17.0 %, raising the low finish
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, elevating the low finish from the earlier vary of $2.forty to $2.70. The increased guidance reflects
robust demand, gradual easing of provide chain constraints and price realization partially offset by
inflation and overseas change 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 guidance only on a non-GAAP
basis because of the inherent issue in forecasting certain quantities that may 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 clear water
supply, wastewater transport and remedy, and dewatering.
• Second quarter 2022 Water Infrastructure revenue was $589 million, a 9.zero percent enhance
organically compared with second quarter 2021. This strong growth was driven by robust value
realization, industrial dewatering demand, and wholesome activity in our wastewater utility enterprise
in the united states and Western Europe.
• Second quarter adjusted EBITDA margin was 21.four percent, up 240 foundation points from the prior
year. Reported working income for the segment was $108 million. Adjusted operating income
for the phase, which excludes $3 million of restructuring and realignment, was $111 million, a
14.four p.c enhance versus the comparable interval last yr. Reported operating margin for
the phase was 18.three %, up 200 basis factors versus the prior yr, and adjusted
operating margin was 18.8 p.c, up 180 foundation points versus the prior yr. Strong value
realization, volume, and productiveness savings more than offset inflation and strategic
investments.
Applied Water
Xylem’s Applied Water segment consists of its portfolio of companies in industrial, business building,
and residential purposes.
• Second quarter 2022 Applied Water income was $429 million, a 7.zero p.c enhance
organically year-over-year. The phase delivered sturdy price realization and backlog
execution in industrial and residential finish markets, partially offset by continued supply chain
constraints in industrial buildings within the United States.
• Second quarter adjusted EBITDA margin was 16.1 %, down 130 basis factors from the
prior year. Reported operating income for the segment was $61 million and adjusted operating
income, which excludes $2 million of restructuring and realignment costs, was $63 million, a four.5
% decrease versus the comparable period final yr. The section reported working
margin was 14.2 percent, down a hundred thirty basis points versus the prior year interval. Adjusted
working margin declined one hundred twenty basis points to 14.7 percent. Strong worth realization and
productiveness financial savings have been more than offset by inflation and decrease quantity.
Measurement & Control Solutions
Xylem’s Measurement & Control Solutions phase consists of its portfolio of businesses in sensible
metering, network applied sciences, superior infrastructure analytics and analytic instrumentation.
• Second quarter 2022 Measurement & Control Solutions revenue was $346 million, down 2.zero
% organically versus the prior year. While chip provide remains constrained, the result is
higher than our expectations due to improved chip supply in the quarter, and energy in our
water high quality take a look at functions.
• Second quarter adjusted EBITDA margin was 9.eight p.c, down 410 basis factors from the prior
12 months. Reported working earnings for the section was $(5) million, and adjusted working
income, which excludes $3 million of restructuring and realignment prices and $1 million of
shortages, unfavorable mix and better inflation more than offset value realization and
productivity savings.
Supplemental data on Xylem’s second quarter 2022 earnings and reconciliations for certain nonGAAP gadgets is posted at www.xylem.com/investors.
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About Xylem
Xylem (XYL) is a number one global water know-how company dedicated to solving critical water and
infrastructure challenges with innovation. Our 17,000 numerous workers delivered revenue of $5.2
billion in 2021. We are creating a more sustainable world by enabling our customers to optimize water
and resource management, and helping communities in more than 150 nations become watersecure. Join us at www.xylem.com.
Forward-Looking Statements
This press launch contains “forward-looking statements” throughout 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 adverse, may, but aren’t essential to, identify
forward-looking statements. By their nature, forward-looking statements address uncertain matters and
include any statements that are not historical, corresponding to statements about our technique, monetary plans,
outlook, goals, plans, intentions or targets (including these related to our social, environmental and
different sustainability goals); or handle 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 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 monetary situation and results of operations, as nicely as any forwardlooking statements, are topic to change and to inherent dangers and uncertainties, a lot of which are
beyond our control. Additionally, many of those dangers and uncertainties are, and may continue to be,
amplified by impacts from the warfare between Russia and Ukraine, as nicely as the continued coronavirus
(“COVID-19”) pandemic and associated macroeconomic conditions (including inflation). Important components
that could trigger our actual outcomes, performance and achievements, or business results to differ
materially from estimates or projections contained in or implied by our forward-looking statements
embody, amongst others, the following: the impact of total industry and basic financial situations,
including industrial, governmental, and private and non-private sector spending and the power of the
residential and industrial real property markets, on financial activity and our operations; geopolitical
events, together with the struggle between Russia and Ukraine, and regulatory, financial and different risks
related to our global sales and operations, including 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 health crises;
availability, scarcity or delays in receiving digital parts (in particular, semiconductors), elements,
and raw materials from our provide chain; manufacturing and working value increases because of
macroeconomic situations, together with inflation, provide chain shortages, logistics challenges, tight labor
markets, prevailing worth modifications, tariffs and different factors; demand for our merchandise; disruption,
competition or pricing pressures within the markets we serve; cybersecurity incidents or different disruptions of
information expertise techniques on which we rely, or involving our products; disruptions in operations at
our amenities or that of third parties upon which we rely; capacity to retain and entice senior administration
and different diverse and key talent, as nicely as competition for general talent and labor; issue predicting
our monetary outcomes; defects, safety, warranty and legal responsibility claims, and recalls with respect to products;
availability, regulation or interference with radio spectrum used by sure of our products; uncertainty
related to restructuring and realignment actions and related costs and savings; our capacity to continue
strategic investments for growth; our ability to efficiently identify, execute and combine acquisitions;
volatility in served markets or impacts on business and operations because of weather conditions, including
the results of local weather change; fluctuations in overseas currency exchange rates; our capacity to borrow or
refinance our current indebtedness and uncertainty around the availability of liquidity adequate to meet
our needs; risk of future impairments to goodwill and different intangible assets; failure to comply with, or
changes in, legal guidelines or laws, including these pertaining to anti-corruption, knowledge privacy and safety,
export and import, competitors, and the setting and climate change; changes in our efficient tax
rates or tax expenses; authorized, governmental or regulatory claims, investigations or proceedings and
associated contingent liabilities; and different elements 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 on this press release concerning our environmental and other
sustainability plans and goals are not a sign that these statements are essentially materials to
investors or are required to be disclosed in our filings with the SEC. In Interesting , historic, current, and
forward-looking social, environmental and sustainability related statements may be based mostly on standards
for measuring progress which are still growing, inside controls and processes that continue to evolve,
and assumptions that are topic to vary in the future. All forward-looking statements made herein
are based mostly on info at present obtainable to us as of the date of this press launch. We undertake no
obligation to publicly update or revise any forward-looking statements, whether on account of new
data, future occasions or otherwise, except as required by law
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