Xylem Reports Second Quarter 2022 Results

Xylem Reports Second Quarter 2022 Results
by Brenna ShumbamhiniAugust 2, 2022
Robust continuing demand drove strong natural orders progress: 1% on a reported
foundation, 6% organically
• Revenue of $1.4 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 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 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 international water expertise
firm dedicated to fixing the world’s most challenging water issues, today reported second quarter
revenue of $1.4 billion, surpassing earlier guidance in each enterprise phase. Strong continued
international demand drove orders and backlog growth across the portfolio.
Second quarter adjusted earnings earlier than curiosity, tax, depreciation and amortization (EBITDA) margin
was sixteen.6 p.c, higher than the Company’s previous steerage and reflecting a year-over-year
lower of 70 basis factors. Inflation and the impression of continuing chip shortages drove the margin
decline, exceeding the advantages of worth realization and productiveness financial savings. Xylem generated internet
income of $112 million, or $0.62 per share, and adjusted web revenue of $120 million, or $0.66 per share,
which excludes the impression of restructuring, realignment and special charges.
“The team delivered very robust second quarter efficiency on all key metrics, and properly ahead of our
guidance for the quarter,” stated Patrick Decker, Xylem president and CEO. “The outcome displays our
business momentum on persevering with underlying demand, disciplined operational execution, and a
moderate easing in chip provide constraints.”
“On the strength of strong backlog and orders growth, and the team’s demonstrated success mitigating
the results of inflation, we are elevating our full-year guidance on income and earnings. This additional
reinforces our longer-term growth and value creation thesis for Xylem.”
Xylem now expects full-year 2022 natural revenue growth to be within the range of 8 to 10 p.c, and 3
to five p.c on a reported basis. This represents an increase from the Company’s earlier full-year
natural revenue steerage of four to six percent, and 1 to 3 p.c on a reported basis. Full-year 2022
adjusted EBITDA margin is now expected to be within the range of sixteen.5 to 17.0 p.c, elevating the low finish
of the previous vary of sixteen.0 to 17.0 p.c. This leads to adjusted earnings per share of $2.50 to
$2.70, raising the low end from the previous range of $2.forty to $2.70. The increased steering displays
robust demand, gradual easing of supply chain constraints and worth 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 revenue, Xylem offers guidance only on a non-GAAP
basis because of the inherent issue in forecasting certain quantities that would be included in GAAP
earnings, corresponding to discrete tax gadgets, with out unreasonable effort.
Best selling consists of its portfolio of companies serving clear water
supply, wastewater transport and treatment, and dewatering.
• Second quarter 2022 Water Infrastructure revenue was $589 million, a 9.0 % enhance
organically compared with second quarter 2021. This robust development was driven by robust worth
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 21.4 p.c, up 240 foundation factors from the prior
year. Reported operating earnings for the phase was $108 million. Adjusted operating revenue
for the section, which excludes $3 million of restructuring and realignment, was $111 million, a
14.4 percent improve versus the comparable period final yr. Reported operating margin for
the section was 18.three percent, up 200 basis factors versus the prior yr, and adjusted
working margin was 18.8 percent, up a hundred and eighty foundation points versus the prior 12 months. Strong worth
realization, volume, and productiveness financial savings more than offset inflation and strategic
Applied Water
Xylem’s Applied Water segment consists of its portfolio of businesses in industrial, business building,
and residential functions.
• Second quarter 2022 Applied Water income was $429 million, a 7.zero p.c improve
organically year-over-year. The phase delivered sturdy value realization and backlog
execution in industrial and residential finish markets, partially offset by continued supply chain
constraints in commercial buildings within the United States.
• Second quarter adjusted EBITDA margin was sixteen.1 %, down 130 basis points from the
prior year. Reported working revenue for the phase was $61 million and adjusted operating
earnings, which excludes $2 million of restructuring and realignment costs, was $63 million, a 4.5
% lower versus the comparable period final year. The section reported operating
margin was 14.2 %, down a hundred thirty basis points versus the prior yr period. Adjusted
working margin declined one hundred twenty foundation factors to 14.7 percent. Strong worth realization and
productivity savings have been greater than offset by inflation and lower quantity.
Measurement & Control Solutions
Xylem’s Measurement & Control Solutions section consists of its portfolio of companies in smart
metering, community applied sciences, superior infrastructure analytics and analytic instrumentation.
• Second quarter 2022 Measurement & Control Solutions income was $346 million, down 2.zero
percent organically versus the prior year. While chip supply remains constrained, the result is
higher than our expectations due to improved chip provide in the quarter, and strength in our
water high quality test purposes.
• Second quarter adjusted EBITDA margin was 9.8 %, down 410 basis points from the prior
12 months. Reported working income for the segment was $(5) million, and adjusted working
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
productivity financial savings.
Supplemental data on Xylem’s second quarter 2022 earnings and reconciliations for sure nonGAAP gadgets is posted at www.xylem.com/investors.
About Xylem
Xylem (XYL) is a leading global water know-how firm committed to solving important water and
infrastructure challenges with innovation. Our 17,000 numerous workers delivered revenue of $5.2
billion in 2021. We are making a more sustainable world by enabling our clients to optimize water
and resource administration, and helping communities in more than one hundred fifty international locations turn out to be watersecure. Join us at www.xylem.com.
Forward-Looking Statements
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different sustainability goals); or tackle possible or future results of operations or financial efficiency,
including statements relating to orders, revenues, working margins and earnings per share development.
Although we consider that the expectations mirrored in any of our forward-looking statements are
reasonable, precise results might differ materially from these projected or assumed in any of our forwardlooking statements. Our future financial condition and outcomes of operations, as nicely as any forwardlooking statements, are topic to change and to inherent dangers and uncertainties, a lot of that are
past our management. Additionally, many of those risks and uncertainties are, and should continue to be,
amplified by impacts from the struggle between Russia and Ukraine, as well as the ongoing coronavirus
(“COVID-19”) pandemic and related macroeconomic circumstances (including inflation). Important components
that might trigger our precise results, efficiency and achievements, or trade results to differ
materially from estimates or projections contained in or implied by our forward-looking statements
include, among others, the next: the influence of overall trade and general economic situations,
together with industrial, governmental, and public and private sector spending and the power of the
residential and commercial real estate markets, on financial activity and our operations; geopolitical
occasions, including the war between Russia and Ukraine, and regulatory, economic and other dangers
related to our international gross sales and operations, together with with respect to domestic content
requirements applicable to projects with governmental funding; continued uncertainty across the
ongoing COVID-19 pandemic’s magnitude, period and impacts on our business, operations, progress,
and financial condition; precise or potential different epidemics, pandemics or international well being crises;
availability, scarcity or delays in receiving digital parts (in explicit, semiconductors), components,
and raw materials from our supply chain; manufacturing and operating price increases due to
macroeconomic situations, together with inflation, provide chain shortages, logistics challenges, tight labor
markets, prevailing price modifications, tariffs and different components; demand for our products; disruption,
competition or pricing pressures in the markets we serve; cybersecurity incidents or different disruptions of
information expertise systems on which we rely, or involving our merchandise; disruptions in operations at
our services or that of third events upon which we rely; capacity to retain and appeal to senior management
and other various and key talent, as nicely as competitors for general talent and labor; issue predicting
our monetary results; defects, security, warranty and liability 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 associated charges and savings; our ability to proceed
strategic investments for growth; our capacity to efficiently identify, execute and combine acquisitions;
volatility in served markets or impacts on business and operations because of climate situations, including
the results of climate change; fluctuations in foreign currency exchange charges; our ability to borrow or
refinance our existing indebtedness and uncertainty across the availability of liquidity sufficient to fulfill
our wants; threat of future impairments to goodwill and different intangible assets; failure to adjust to, or
modifications in, laws or laws, including these pertaining to anti-corruption, data privacy and safety,
export and import, competition, and the environment and local weather change; changes in our effective tax
rates or tax expenses; authorized, governmental or regulatory claims, investigations or proceedings and
related contingent liabilities; and other factors set forth underneath “Item 1A. Risk Factors” in our Annual
Report on Form 10-K for the yr ended December 31, 2021 and in subsequent filings we make with
the Securities and Exchange Commission (“SEC”).
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sustainability plans and goals aren’t an indication 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 may be based on standards
for measuring progress that are still developing, internal controls and processes that continue to evolve,
and assumptions that are topic to change in the future. All forward-looking statements made herein
are based on information presently out there to us as of the date of this press release. We undertake no
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data, future events or in any other case, besides as required by regulation