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Xylem Reports Second Quarter 2022 Results
by Brenna ShumbamhiniAugust 2, 2022
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Robust continuing demand drove strong natural orders growth: 1% on a reported
basis, 6% organically
• Revenue of $1.4 billion, up 1% on a reported foundation, up 6% organically
• Earnings per share of $0.62, adjusted earnings per share of $0.66
• Adjusted EBITDA margin exceeded steerage by 160 foundation factors
• Raising full-year natural revenue steering to a variety 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 number one global water know-how
firm dedicated to fixing the world’s most challenging water points, at present reported second quarter
income of $1.4 billion, surpassing previous steerage in every business section. Strong continued
world demand drove orders and backlog growth throughout the portfolio.
Second quarter adjusted earnings earlier than interest, tax, depreciation and amortization (EBITDA) margin
was sixteen.6 %, higher than the Company’s previous steering and reflecting a year-over-year
decrease of 70 foundation points. Inflation and the impact of continuing chip shortages drove the margin
decline, exceeding the benefits of worth realization and productiveness savings. Xylem generated net
earnings of $112 million, or $0.sixty two per share, and adjusted web income of $120 million, or $0.66 per share,
which excludes the impact of restructuring, realignment and special charges.
“The staff delivered very sturdy second quarter performance on all key metrics, and nicely ahead 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 supply constraints.”
“On the energy of sturdy backlog and orders growth, and the team’s demonstrated success mitigating
the results of inflation, we are elevating our full-year steering on revenue and earnings. This further
reinforces our longer-term growth and value creation thesis for Xylem.”
Outlook
Xylem now expects full-year 2022 organic income progress to be in the range of 8 to 10 percent, and three
to five percent on a reported basis. This represents a rise from the Company’s earlier full-year
organic revenue steering of four to six percent, and 1 to 3 % on a reported basis. Full-year 2022
adjusted EBITDA margin is now expected to be in the vary of sixteen.5 to 17.zero %, raising the low finish
of the earlier vary of 16.zero to 17.0 %. This results in adjusted earnings per share of $2.50 to
$2.70, elevating the low finish from the earlier range of $2.forty to $2.70. The elevated steerage reflects
strong demand, gradual easing of supply chain constraints and value realization partially offset by
inflation and foreign 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 supplies steerage solely on a non-GAAP
basis because of the inherent difficulty in forecasting certain amounts that might be included in GAAP
earnings, corresponding 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 revenue was $589 million, a 9.zero % improve
organically in contrast with second quarter 2021. This sturdy growth was pushed by strong value
realization, industrial dewatering demand, and wholesome activity in our wastewater utility enterprise
in the U.S. and Western Europe.
• Second quarter adjusted EBITDA margin was 21.4 p.c, up 240 foundation points from the prior
year. Reported working income for the phase was $108 million. Adjusted operating revenue
for the phase, which excludes $3 million of restructuring and realignment, was $111 million, a
14.four percent improve versus the comparable interval final year. Reported operating margin for
the phase was 18.3 %, up 200 basis factors versus the prior year, and adjusted
operating margin was 18.eight percent, up a hundred and eighty foundation factors versus the prior 12 months. Strong value
realization, volume, and productiveness financial savings greater than offset inflation and strategic
investments.
Applied Water
Xylem’s Applied Water section consists of its portfolio of businesses in industrial, commercial constructing,
and residential functions.
• Second quarter 2022 Applied Water income was $429 million, a 7.zero percent enhance
organically year-over-year. pressure gauge น้ำ delivered strong 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 sixteen.1 percent, down a hundred thirty foundation factors from the
prior 12 months. Reported working earnings for the phase was $61 million and adjusted operating
earnings, which excludes $2 million of restructuring and realignment costs, was $63 million, a four.5
% lower versus the comparable interval last yr. The segment reported operating
margin was 14.2 percent, down one hundred thirty basis points versus the prior year interval. Adjusted
operating margin declined one hundred twenty basis points to 14.7 percent. Strong value realization and
productivity financial savings had been greater than offset by inflation and lower volume.
Measurement & Control Solutions
Xylem’s Measurement & Control Solutions segment consists of its portfolio of companies in good
metering, network applied sciences, advanced infrastructure analytics and analytic instrumentation.
• Second quarter 2022 Measurement & Control Solutions income was $346 million, down 2.zero
% organically versus the prior yr. While chip provide remains constrained, the result’s
higher than our expectations due to improved chip provide within the quarter, and power in our
water quality take a look at purposes.
• Second quarter adjusted EBITDA margin was 9.eight percent, down 410 foundation factors from the prior
yr. Reported working revenue for the section was $(5) million, and adjusted operating
earnings, 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
productiveness savings.
Supplemental information 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 leading world water expertise company committed to solving critical water and
infrastructure challenges with innovation. Our 17,000 various staff delivered revenue of $5.2
billion in 2021. We are making a extra sustainable world by enabling our customers to optimize water
and useful resource administration, and serving to communities in more than a hundred and fifty nations become watersecure. Join us at www.xylem.com.
Forward-Looking Statements
This press launch contains “forward-looking statements” within 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 phrases “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,”
“contemplate,” “predict,” “forecast,” “likely,” “believe,” “target,” “will,” “could,” “would,” “should,”
“potential,” “may” and comparable expressions or their negative, may, however usually are not essential to, identify
forward-looking statements. By their nature, forward-looking statements handle unsure issues and
include any statements that aren’t historic, such as statements about our technique, monetary plans,
outlook, aims, plans, intentions or objectives (including these related to our social, environmental and
other sustainability goals); or address attainable or future outcomes of operations or monetary efficiency,
including statements relating to orders, revenues, working margins and earnings per share development.
Although we imagine that the expectations mirrored in any of our forward-looking statements are
cheap, 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 topic to change and to inherent risks and uncertainties, many of which are
past our control. Additionally, many of these dangers and uncertainties are, and may continue to be,
amplified by impacts from the struggle between Russia and Ukraine, as properly as the continuing coronavirus
(“COVID-19”) pandemic and related macroeconomic situations (including inflation). Important elements
that could trigger our precise outcomes, efficiency and achievements, or trade results to differ
materially from estimates or projections contained in or implied by our forward-looking statements
embody, amongst others, the next: the impact of overall industry and basic economic conditions,
together with industrial, governmental, and private and non-private sector spending and the strength of the
residential and industrial actual property markets, on financial activity and our operations; geopolitical
occasions, together with the warfare between Russia and Ukraine, and regulatory, financial and other dangers
related to our international gross sales and operations, together with with respect to domestic content material
requirements applicable to initiatives with governmental funding; continued uncertainty across the
ongoing COVID-19 pandemic’s magnitude, period and impacts on our enterprise, operations, progress,
and monetary situation; actual or potential different epidemics, pandemics or world health crises;
availability, scarcity or delays in receiving digital parts (in specific, semiconductors), parts,
and raw supplies from our provide chain; manufacturing and working value will increase due to
macroeconomic situations, together with inflation, provide chain shortages, logistics challenges, tight labor
markets, prevailing value adjustments, tariffs and other components; demand for our products; disruption,
competition or pricing pressures within the markets we serve; cybersecurity incidents or different disruptions of
info technology methods on which we rely, or involving our products; disruptions in operations at
our services or that of third parties upon which we rely; capability to retain and attract senior management
and other diverse and key expertise, in addition to competition for total expertise and labor; issue predicting
our financial outcomes; defects, safety, warranty and legal responsibility claims, and recalls with respect to merchandise;
availability, regulation or interference with radio spectrum used by certain of our products; uncertainty
associated to restructuring and realignment actions and associated costs and financial savings; our capability to continue
strategic investments for progress; our ability to successfully establish, execute and combine acquisitions;
volatility in served markets or impacts on enterprise and operations because of climate circumstances, together with
the effects of climate change; fluctuations in international foreign money change charges; our capability to borrow or
refinance our existing indebtedness and uncertainty around the availability of liquidity sufficient to satisfy
our wants; danger of future impairments to goodwill and other intangible assets; failure to comply with, or
changes in, laws or rules, including these pertaining to anti-corruption, data privateness and safety,
export and import, competition, and the setting and climate change; adjustments in our effective tax
charges or tax expenses; authorized, governmental or regulatory claims, investigations or proceedings and
associated contingent liabilities; and other factors set forth beneath “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”).
Forward-looking and other statements on this press release relating to our environmental and different
sustainability plans and targets aren’t an indication that these statements are necessarily materials to
traders or are required to be disclosed in our filings with the SEC. In addition, historical, present, and
forward-looking social, environmental and sustainability associated statements may be primarily based on standards
for measuring progress which might be nonetheless creating, internal controls and processes that proceed to evolve,
and assumptions which might be topic to vary sooner or later. All forward-looking statements made herein
are based on data at present out there to us as of the date of this press release. We undertake no
obligation to publicly replace or revise any forward-looking statements, whether or not because of new
data, future occasions or in any other case, except as required by regulation
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