Xylem Reports Second Quarter 2022 Results
by Brenna ShumbamhiniAugust 2, 2022
Robust persevering with demand drove strong organic orders growth: 1% on a reported
basis, 6% organically
• Revenue of $1.4 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 basis points
• Raising full-year natural revenue steerage to a spread of 8% to 10% from 4% to
6%, and adjusted EPS to a spread of $2.50 to $2.70 from $2.40 to $2.70
Washington, D.C., August 2, 2022 – Xylem Inc. (NYSE: XYL), a leading world 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 segment. Strong continued
world demand drove orders and backlog progress across the portfolio.
Second quarter adjusted earnings earlier than curiosity, tax, depreciation and amortization (EBITDA) margin
was 16.6 p.c, higher than the Company’s earlier steering and reflecting a year-over-year
decrease of 70 basis factors. Inflation and the impression of continuous chip shortages drove the margin
decline, exceeding the benefits of worth realization and productivity savings. Xylem generated web
revenue of $112 million, or $0.62 per share, and adjusted net income of $120 million, or $0.66 per share,
which excludes the impression of restructuring, realignment and special expenses.
“The group delivered very robust second quarter efficiency on all key metrics, and well forward of our
steerage for the quarter,” said Patrick Decker, Xylem president and CEO. “The outcome reflects our
business momentum on continuing underlying demand, disciplined operational execution, and a
moderate easing in chip provide constraints.”
“On the power of robust backlog and orders development, and the team’s demonstrated success mitigating
the consequences of inflation, we are elevating our full-year steerage on income and earnings. This additional
reinforces our longer-term growth and worth creation thesis for Xylem.”
Xylem now expects full-year 2022 organic income development to be within the range of eight to 10 p.c, and 3
to five p.c on a reported basis. This represents an increase from the Company’s previous full-year
organic revenue guidance of four to 6 p.c, and 1 to 3 % on a reported foundation. Full-year 2022
adjusted EBITDA margin is now anticipated to be within the range of 16.5 to 17.zero %, raising the low end
of the earlier vary of sixteen.0 to 17.zero %. This results in 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 steering reflects
strong demand, gradual easing of provide chain constraints and price 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 provides guidance only on a non-GAAP
foundation as a outcome of inherent difficulty in forecasting sure quantities that would be included in GAAP
earnings, corresponding to discrete tax gadgets, with out unreasonable effort.
Second Quarter Segment Results
Water Infrastructure
Xylem’s Water Infrastructure segment consists of its portfolio of businesses serving clear water
delivery, wastewater transport and therapy, and dewatering.
• Second quarter 2022 Water Infrastructure revenue was $589 million, a 9.0 % improve
organically in contrast with second quarter 2021. This sturdy progress was driven by robust price
realization, industrial dewatering demand, and healthy activity in our wastewater utility business
in the us and Western Europe.
• Second quarter adjusted EBITDA margin was 21.4 p.c, up 240 basis points from the prior
yr. Reported working income for the phase was $108 million. Adjusted working income
for the segment, which excludes $3 million of restructuring and realignment, was $111 million, a
14.4 % improve versus the comparable interval last yr. Reported operating margin for
the section was 18.3 p.c, up 200 foundation factors versus the prior yr, and adjusted
operating margin was 18.eight percent, up one hundred eighty basis factors versus the prior yr. Strong value
realization, quantity, and productivity financial savings greater than offset inflation and strategic
Applied Water
Xylem’s Applied Water segment consists of its portfolio of companies in industrial, commercial building,
and residential functions.
• Second quarter 2022 Applied Water income was $429 million, a 7.zero percent enhance
organically year-over-year. The segment delivered strong price realization and backlog
execution in industrial and residential finish markets, partially offset by continued provide chain
constraints in industrial buildings in the United States.
• Second quarter adjusted EBITDA margin was 16.1 percent, down 130 basis points from the
prior year. Reported working earnings 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
percent decrease versus the comparable interval last yr. The phase reported working
margin was 14.2 percent, down a hundred thirty foundation factors versus the prior yr interval. Adjusted
working margin declined one hundred twenty foundation factors to 14.7 percent. Strong value realization and
productiveness financial savings were greater than offset by inflation and decrease quantity.
Measurement & Control Solutions
Xylem’s Measurement & Control Solutions segment consists of its portfolio of businesses in smart
metering, network applied sciences, advanced infrastructure analytics and analytic instrumentation.
• Second quarter 2022 Measurement & Control Solutions income was $346 million, down 2.0
% organically versus the prior 12 months. While chip supply remains constrained, the result is
higher than our expectations because of improved chip provide in the quarter, and energy in our
water high quality take a look at applications.
• Second quarter adjusted EBITDA margin was 9.8 %, down 410 foundation points from the prior
year. Reported operating revenue for the phase was $(5) million, and adjusted working
revenue, which excludes $3 million of restructuring and realignment costs and $1 million of
shortages, unfavorable combine and higher inflation more than offset worth realization and
productivity financial savings.
Supplemental data on Xylem’s second quarter 2022 earnings and reconciliations for sure nonGAAP objects is posted at www.xylem.com/investors.
About Xylem
Xylem (XYL) is a leading world water technology company dedicated to fixing crucial water and
infrastructure challenges with innovation. Our 17,000 various staff delivered revenue 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 helping communities in more than one hundred fifty countries become watersecure. Join us at www.xylem.com.
Forward-Looking Statements
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Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as
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outlook, goals, plans, intentions or goals (including those related to our social, environmental and
different sustainability goals); or handle possible or future outcomes of operations or financial performance,
together with statements relating to orders, revenues, working margins and earnings per share development.
Although we believe that the expectations mirrored in any of our forward-looking statements are
reasonable, precise results could differ materially from these projected or assumed in any of our forwardlooking statements. Our future financial condition and results of operations, in addition to any forwardlooking statements, are subject to vary and to inherent risks and uncertainties, many of which are
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amplified by impacts from the war between Russia and Ukraine, in addition to the ongoing coronavirus
(“COVID-19”) pandemic and associated macroeconomic circumstances (including inflation). Important factors
that might cause our actual results, efficiency and achievements, or business outcomes to differ
materially from estimates or projections contained in or implied by our forward-looking statements
embrace, among others, the following: the impression of general trade and common economic conditions,
together with industrial, governmental, and public and private sector spending and the power of the
residential and industrial actual property markets, on economic exercise and our operations; geopolitical
occasions, together with the struggle between Russia and Ukraine, and regulatory, financial and different risks
associated with our global sales and operations, together with with respect to home content
requirements applicable to projects with governmental funding; continued uncertainty around the
ongoing COVID-19 pandemic’s magnitude, period and impacts on our enterprise, operations, growth,
and financial situation; precise or potential different epidemics, pandemics or international well being crises;
availability, scarcity or delays in receiving electronic components (in particular, semiconductors), parts,
and raw supplies from our supply chain; manufacturing and operating cost increases as a outcome of
macroeconomic conditions, together with inflation, supply chain shortages, logistics challenges, tight labor
markets, prevailing price modifications, tariffs and other factors; demand for our merchandise; disruption,
competitors or pricing pressures in 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 amenities or that of third events upon which we rely; ability to retain and attract senior management
and other numerous and key talent, as properly as competitors for general expertise and labor; issue predicting
our financial outcomes; defects, security, guarantee and liability claims, and recollects 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 associated charges and financial savings; our capacity to proceed
strategic investments for development; our capability to successfully identify, execute and integrate acquisitions;
volatility in served markets or impacts on business and operations as a end result of weather circumstances, including
the consequences of local weather change; fluctuations in foreign forex exchange charges; our capacity to borrow or
refinance our current indebtedness and uncertainty across the availability of liquidity adequate to fulfill
our wants; risk of future impairments to goodwill and different intangible property; failure to adjust to, or
adjustments in, legal guidelines or regulations, together with these pertaining to anti-corruption, data privateness and security,
export and import, competitors, and the setting and local weather change; changes in our efficient tax
charges or tax bills; legal, governmental or regulatory claims, investigations or proceedings and
associated contingent liabilities; and other 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”).
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for measuring progress which are still developing, inside controls and processes that proceed to evolve,
and assumptions which are subject to alter in the future. All forward-looking statements made herein
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