FEATUREDMINING
Xylem Reports Second Quarter 2022 Results
by Brenna ShumbamhiniAugust 2, 2022
Share
Robust continuing demand drove robust natural orders development: 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 one hundred sixty basis points
• Raising full-year natural income steering to a spread 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 leading world water technology
firm devoted to solving the world’s most difficult water issues, right now reported second quarter
income of $1.4 billion, surpassing previous steerage in every business segment. Strong continued
global demand drove orders and backlog growth throughout the portfolio.
Second quarter adjusted earnings before interest, tax, depreciation and amortization (EBITDA) margin
was 16.6 percent, better than the Company’s previous steerage and reflecting a year-over-year
lower of 70 basis factors. Inflation and the impression of continuous chip shortages drove the margin
decline, exceeding the advantages of price realization and productivity financial savings. Xylem generated web
earnings of $112 million, or $0.62 per share, and adjusted web earnings of $120 million, or $0.66 per share,
which excludes the impression of restructuring, realignment and special costs.
“The group delivered very robust second quarter efficiency on all key metrics, and properly forward of our
steerage for the quarter,” mentioned Patrick Decker, Xylem president and CEO. “The outcome reflects our
industrial momentum on persevering with underlying demand, disciplined operational execution, and a
moderate easing in chip provide constraints.”
“On the power of robust backlog and orders progress, and the team’s demonstrated success mitigating
the results of inflation, we’re elevating our full-year guidance on revenue and earnings. This additional
reinforces our longer-term development and value creation thesis for Xylem.”
Outlook
Xylem now expects full-year 2022 organic revenue development to be within the vary of 8 to 10 %, and 3
to five p.c on a reported basis. This represents an increase from the Company’s earlier full-year
organic income steerage of 4 to 6 p.c, and 1 to 3 % on a reported foundation. Full-year 2022
adjusted EBITDA margin is now expected to be within the range of 16.5 to 17.0 %, raising the low finish
of the previous range of 16.0 to 17.zero p.c. This leads to 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 elevated steering reflects
robust 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 offers steerage solely 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 items, with out unreasonable effort.
Second Quarter Segment Results
Water Infrastructure
Xylem’s Water Infrastructure section 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 percent enhance
organically compared with second quarter 2021. This robust 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 21.4 percent, up 240 foundation factors from the prior
12 months. Reported working earnings 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 last year. Reported operating margin for
the phase was 18.3 p.c, up 200 basis points versus the prior yr, and adjusted
operating margin was 18.8 p.c, up a hundred and eighty basis factors versus the prior 12 months. Strong worth
realization, quantity, and productivity savings greater than offset inflation and strategic
investments.
Applied Water
Xylem’s Applied Water section consists of its portfolio of businesses in industrial, industrial constructing,
and residential functions.
• Second quarter 2022 Applied Water income was $429 million, a 7.zero p.c increase
organically year-over-year. The section delivered sturdy worth 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 sixteen.1 percent, down 130 foundation factors from the
prior year. Reported working revenue for the segment was $61 million and adjusted working
earnings, which excludes $2 million of restructuring and realignment costs, was $63 million, a four.5
p.c decrease versus the comparable period final 12 months. The segment reported working
margin was 14.2 p.c, down a hundred thirty foundation points versus the prior yr period. Adjusted
working margin declined 120 basis points to 14.7 percent. Protected and
productivity financial savings have been greater than offset by inflation and decrease volume.
Measurement & Control Solutions
Xylem’s Measurement & Control Solutions segment consists of its portfolio of businesses in good
metering, network applied sciences, advanced infrastructure analytics and analytic instrumentation.
• Second quarter 2022 Measurement & Control Solutions revenue was $346 million, down 2.zero
percent organically versus the prior year. While chip supply stays constrained, the result is
better than our expectations due to improved chip supply in the quarter, and energy in our
water high quality check purposes.
• Second quarter adjusted EBITDA margin was 9.eight %, down 410 basis points from the prior
12 months. Reported operating income for the segment was $(5) million, and adjusted working
income, which excludes $3 million of restructuring and realignment costs and $1 million of
shortages, unfavorable combine and better inflation more than offset value realization and
productiveness 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 quantity one international water expertise company dedicated to fixing important water and
infrastructure challenges with innovation. Our 17,000 numerous employees delivered income of $5.2
billion in 2021. We are making a more sustainable world by enabling our prospects to optimize water
and useful resource administration, and serving to communities in additional than 150 countries become watersecure. Join us at www.xylem.com.
Forward-Looking Statements
This press release contains “forward-looking statements” throughout the which 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 similar expressions or their negative, might, however aren’t essential to, identify
forward-looking statements. By their nature, forward-looking statements address uncertain issues and
include any statements that aren’t historical, similar to statements about our technique, financial plans,
outlook, aims, plans, intentions or targets (including those related to our social, environmental and
other sustainability goals); or handle attainable or future outcomes of operations or financial performance,
including statements regarding orders, revenues, operating margins and earnings per share growth.
Although we believe that the expectations reflected in any of our forward-looking statements are
affordable, precise outcomes could differ materially from these projected or assumed in any of our forwardlooking statements. Our future monetary condition and results of operations, as properly as any forwardlooking statements, are subject to vary and to inherent dangers and uncertainties, a lot of which are
past our management. Additionally, many of these risks and uncertainties are, and should proceed to be,
amplified by impacts from the war between Russia and Ukraine, as well as the continuing coronavirus
(“COVID-19”) pandemic and related macroeconomic conditions (including inflation). Important factors
that could cause our precise outcomes, performance and achievements, or business results to vary
materially from estimates or projections contained in or implied by our forward-looking statements
embody, amongst others, the next: the influence of general industry and general financial situations,
together with industrial, governmental, and public and private sector spending and the energy of the
residential and business real estate markets, on financial exercise and our operations; geopolitical
events, including the struggle between Russia and Ukraine, and regulatory, economic and other risks
related to our international sales and operations, together with with respect to home 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 financial situation; actual or potential different epidemics, pandemics or global well being crises;
availability, shortage or delays in receiving electronic parts (in explicit, semiconductors), parts,
and uncooked supplies from our provide chain; manufacturing and working cost increases because of
macroeconomic conditions, including inflation, supply chain shortages, logistics challenges, tight labor
markets, prevailing price changes, tariffs and different components; demand for our products; disruption,
competition or pricing pressures within the markets we serve; cybersecurity incidents or other disruptions of
info technology systems on which we rely, or involving our merchandise; disruptions in operations at
our facilities or that of third events upon which we rely; capacity to retain and attract senior management
and different numerous and key expertise, in addition to competitors for total expertise and labor; problem predicting
our monetary outcomes; defects, security, guarantee and legal responsibility claims, and remembers 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 charges and financial savings; our ability to proceed
strategic investments for progress; our capacity to efficiently establish, execute and integrate acquisitions;
volatility in served markets or impacts on enterprise and operations due to climate situations, including
the results of climate change; fluctuations in overseas forex exchange rates; our ability to borrow or
refinance our existing indebtedness and uncertainty around the availability of liquidity enough to fulfill
our needs; danger of future impairments to goodwill and other intangible property; failure to comply with, or
adjustments in, laws or rules, including these pertaining to anti-corruption, data privateness and security,
export and import, competitors, and the surroundings and local weather change; modifications in our effective tax
rates or tax expenses; legal, governmental or regulatory claims, investigations or proceedings and
associated contingent liabilities; and different components set forth beneath “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 other statements in this press launch regarding our environmental and other
sustainability plans and targets aren’t an indication that these statements are essentially material 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 based on requirements
for measuring progress which are still developing, inner controls and processes that proceed to evolve,
and assumptions which are subject to vary in the future. All forward-looking statements made herein
are based on information currently obtainable to us as of the date of this press launch. We undertake no
obligation to publicly replace or revise any forward-looking statements, whether on account of new
data, future events or otherwise, except as required by legislation
Shareg