Xylem Reports Second Quarter 2022 Results
by Brenna ShumbamhiniAugust 2, 2022
Robust continuing demand drove sturdy organic orders development: 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 $0.62, adjusted earnings per share of $0.66
• Adjusted EBITDA margin exceeded guidance by a hundred and sixty foundation factors
• Raising full-year natural revenue steering 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.forty to $2.70
Washington, D.C., August 2, 2022 – Xylem Inc. (NYSE: XYL), a quantity one international water technology
firm devoted to solving the world’s most challenging water issues, at present reported second quarter
income of $1.four billion, surpassing previous guidance in each business phase. 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, higher than the Company’s previous guidance and reflecting a year-over-year
lower of 70 basis points. Inflation and the impression of continuing chip shortages drove the margin
decline, exceeding the advantages of price realization and productivity financial savings. Xylem generated web
earnings of $112 million, or $0.sixty two per share, and adjusted net income of $120 million, or $0.66 per share,
which excludes the impression of restructuring, realignment and special costs.
“The team delivered very strong second quarter performance on all key metrics, and nicely forward of our
steerage for the quarter,” mentioned Patrick Decker, Xylem president and CEO. “The result reflects our
industrial momentum on continuing underlying demand, disciplined operational execution, and a
average easing in chip supply constraints.”
“On the strength of sturdy backlog and orders progress, and the team’s demonstrated success mitigating
the consequences of inflation, we’re raising our full-year guidance on income and earnings. This further
reinforces our longer-term development and value creation thesis for Xylem.”
Xylem now expects full-year 2022 organic income progress to be within the range of 8 to 10 %, and 3
to five percent on a reported foundation. This represents an increase from the Company’s previous full-year
natural income steering of 4 to six percent, and 1 to three p.c on a reported foundation. Full-year 2022
adjusted EBITDA margin is now expected to be in the range of 16.5 to 17.0 percent, raising the low end
of the earlier vary of 16.0 to 17.zero percent. This ends in adjusted earnings per share of $2.50 to
$2.70, raising the low finish from the earlier range of $2.forty to $2.70. The elevated guidance displays
strong demand, gradual easing of provide chain constraints and price 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 income, Xylem provides steering only on a non-GAAP
foundation because of the inherent issue in forecasting certain quantities that may be included in GAAP
earnings, corresponding to discrete tax gadgets, without unreasonable effort.
Second Quarter Segment Results
Water Infrastructure
Xylem’s Water Infrastructure section consists of its portfolio of companies serving clear water
delivery, wastewater transport and remedy, and dewatering.
• Second quarter 2022 Water Infrastructure income was $589 million, a 9.zero percent improve
organically in contrast with second quarter 2021. This sturdy development was pushed by robust worth
realization, industrial dewatering demand, and healthy activity in our wastewater utility enterprise
in the us and Western Europe.
• Second quarter adjusted EBITDA margin was 21.four percent, up 240 foundation points from the prior
yr. Reported operating 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 % improve versus the comparable interval final yr. Reported operating margin for
the segment was 18.3 %, up 200 foundation factors versus the prior yr, and adjusted
working margin was 18.8 %, up 180 foundation factors versus the prior yr. Strong value
realization, quantity, and productiveness financial savings more than offset inflation and strategic
Applied Water
Xylem’s Applied Water segment consists of its portfolio of companies in industrial, business building,
and residential functions.
• Second quarter 2022 Applied Water income was $429 million, a 7.0 p.c increase
organically year-over-year. The segment delivered robust value realization and backlog
execution in industrial and residential finish markets, partially offset by continued provide chain
constraints in commercial buildings in the United States.
• Second quarter adjusted EBITDA margin was sixteen.1 p.c, down 130 foundation factors from the
prior yr. Reported operating earnings for the segment was $61 million and adjusted working
income, which excludes $2 million of restructuring and realignment prices, was $63 million, a four.5
% decrease versus the comparable period final year. The phase reported working
margin was 14.2 p.c, down one hundred thirty basis factors versus the prior 12 months interval. Adjusted
operating margin declined a hundred and twenty foundation factors to 14.7 p.c. Strong value realization and
productiveness financial savings have been more than offset by inflation and lower quantity.
Measurement & Control Solutions
Xylem’s Measurement & Control Solutions phase consists of its portfolio of businesses in good
metering, community applied sciences, advanced infrastructure analytics and analytic instrumentation.
• Second quarter 2022 Measurement & Control Solutions revenue was $346 million, down 2.zero
p.c organically versus the prior 12 months. While chip supply stays constrained, the result’s
higher than our expectations as a outcome of improved chip provide in the quarter, and power in our
water high quality take a look at purposes.
เพรสเชอร์เกจวัดแรงดันน้ำ adjusted EBITDA margin was 9.eight percent, down 410 foundation points from the prior
yr. Reported working revenue for the segment was $(5) million, and adjusted operating
earnings, which excludes $3 million of restructuring and realignment costs and $1 million of
shortages, unfavorable mix and better inflation greater than offset price realization and
productivity financial savings.
Supplemental data on Xylem’s second quarter 2022 earnings and reconciliations for sure nonGAAP items is posted at www.xylem.com/investors.
About Xylem
Xylem (XYL) is a number one international water know-how firm dedicated to fixing important water and
infrastructure challenges with innovation. Our 17,000 various staff delivered income of $5.2
billion in 2021. We are creating a extra sustainable world by enabling our prospects to optimize water
and useful resource management, and serving to communities in more than a hundred and fifty international locations turn out to be watersecure. Join us at www.xylem.com.
Forward-Looking Statements
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past our control. Additionally, many of those risks and uncertainties are, and will continue to be,
amplified by impacts from the struggle between Russia and Ukraine, in addition to the continuing coronavirus
(“COVID-19”) pandemic and related macroeconomic situations (including inflation). Important components
that would trigger our actual results, efficiency and achievements, or industry results to differ
materially from estimates or projections contained in or implied by our forward-looking statements
include, amongst others, the next: the impact of total business and common financial conditions,
together with industrial, governmental, and public and private sector spending and the strength of the
residential and industrial actual property markets, on economic activity and our operations; geopolitical
events, together with the war between Russia and Ukraine, and regulatory, economic and other dangers
related to our world sales and operations, including with respect to home content material
requirements applicable to tasks with governmental funding; continued uncertainty around the
ongoing COVID-19 pandemic’s magnitude, period and impacts on our enterprise, operations, progress,
and financial situation; actual or potential different epidemics, pandemics or global well being crises;
availability, scarcity or delays in receiving electronic parts (in specific, semiconductors), elements,
and uncooked materials from our supply chain; manufacturing and operating cost will increase because of
macroeconomic conditions, together with inflation, supply chain shortages, logistics challenges, tight labor
markets, prevailing worth modifications, tariffs and other elements; demand for our merchandise; disruption,
competition or pricing pressures within the markets we serve; cybersecurity incidents or different disruptions of
info know-how methods on which we rely, or involving our merchandise; disruptions in operations at
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and other various and key talent, as properly as competitors for overall expertise and labor; difficulty predicting
our financial results; defects, security, warranty and legal responsibility claims, and recalls with respect to merchandise;
availability, regulation or interference with radio spectrum utilized by sure of our merchandise; uncertainty
related to restructuring and realignment actions and related charges and financial savings; our capacity to continue
strategic investments for progress; our capability to successfully determine, execute and integrate acquisitions;
volatility in served markets or impacts on business and operations as a outcome of weather conditions, including
the results of climate change; fluctuations in overseas foreign money trade rates; our ability to borrow or
refinance our current indebtedness and uncertainty across the availability of liquidity adequate to fulfill
our needs; threat of future impairments to goodwill and other intangible assets; failure to adjust to, or
modifications in, legal guidelines or regulations, together with those pertaining to anti-corruption, information privacy and safety,
export and import, competitors, and the surroundings and local weather change; modifications in our efficient tax
charges or tax bills; legal, governmental or regulatory claims, investigations or proceedings and
related contingent liabilities; and other elements set forth beneath “Item 1A. Risk Factors” in our Annual
Report on Form 10-K for the year ended December 31, 2021 and in subsequent filings we make with
the Securities and Exchange Commission (“SEC”).
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