Xylem Reports Second Quarter 2022 Results

Xylem Reports Second Quarter 2022 Results
by Brenna ShumbamhiniAugust 2, 2022
Robust continuing demand drove strong natural orders development: 1% on a reported
basis, 6% organically
• Revenue of $1.four billion, up 1% on a reported basis, up 6% organically
• Earnings per share of $0.62, adjusted earnings per share of $0.sixty six
• Adjusted EBITDA margin exceeded guidance by 160 foundation points
• Raising full-year natural income steering to a variety 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 quantity one world water technology
firm devoted to fixing the world’s most challenging water issues, right now reported second quarter
revenue of $1.4 billion, surpassing previous steerage in every business section. 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 sixteen.6 p.c, better than the Company’s earlier steerage and reflecting a year-over-year
decrease of 70 basis points. Inflation and the influence of continuing chip shortages drove the margin
decline, exceeding the advantages of price realization and productiveness savings. Xylem generated net
earnings 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 particular costs.
“The group delivered very robust second quarter efficiency on all key metrics, and nicely ahead of our
guidance for the quarter,” said Patrick Decker, Xylem president and CEO. “The end result displays our
business momentum on persevering with underlying demand, disciplined operational execution, and a
reasonable easing in chip provide constraints.”
“On the energy of sturdy backlog and orders growth, and the team’s demonstrated success mitigating
the consequences of inflation, we’re elevating our full-year guidance on income and earnings. This additional
reinforces our longer-term growth and worth creation thesis for Xylem.”
Xylem now expects full-year 2022 natural income progress to be in the range of 8 to 10 p.c, and three
to 5 percent on a reported basis. This represents a rise from the Company’s earlier full-year
organic revenue steerage of 4 to 6 %, and 1 to three % on a reported basis. Full-year 2022
adjusted EBITDA margin is now anticipated to be within the range of 16.5 to 17.zero %, elevating the low end
of the previous range of sixteen.0 to 17.zero 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 guidance reflects
robust demand, gradual easing of supply chain constraints and value realization partially offset by
inflation and foreign change headwinds.
Further 2022 planning assumptions are included in Xylem’s second quarter 2022 earnings supplies
posted at www.xylem.com/investors. Excluding revenue, Xylem supplies steerage solely on a non-GAAP
basis due to the inherent issue in forecasting sure quantities that might be included in GAAP
earnings, corresponding to 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 clean water
supply, wastewater transport and treatment, and dewatering.
• Second quarter 2022 Water Infrastructure income was $589 million, a 9.0 p.c improve
organically in contrast with second quarter 2021. This robust progress was driven by robust worth
realization, industrial dewatering demand, and healthy exercise 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
12 months. Reported operating earnings for the phase was $108 million. Adjusted working revenue
for the phase, which excludes $3 million of restructuring and realignment, was $111 million, a
14.four % increase versus the comparable period last yr. Reported working margin for
the phase was 18.three p.c, up 200 foundation factors versus the prior year, and adjusted
operating margin was 18.8 percent, up one hundred eighty basis factors versus the prior yr. Strong worth
realization, volume, and productiveness financial savings greater than offset inflation and strategic
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 p.c improve
organically year-over-year. The segment delivered strong worth realization and backlog
execution in industrial and residential finish markets, partially offset by continued supply chain
constraints in commercial buildings in the United States.
• Second quarter adjusted EBITDA margin was sixteen.1 %, down a hundred thirty foundation factors from the
prior year. Reported working revenue for the segment was $61 million and adjusted operating
earnings, which excludes $2 million of restructuring and realignment costs, was $63 million, a 4.5
p.c decrease versus the comparable period final yr. The section reported operating
margin was 14.2 p.c, down one hundred thirty basis factors versus the prior yr period. Adjusted
operating margin declined one hundred twenty basis points to 14.7 %. Strong value realization and
productiveness financial savings have been greater than offset by inflation and lower quantity.
Measurement & Control Solutions
Xylem’s Measurement & Control Solutions phase consists of its portfolio of companies in good
metering, network technologies, superior infrastructure analytics and analytic instrumentation.
• Second quarter 2022 Measurement & Control Solutions revenue was $346 million, down 2.zero
p.c organically versus the prior year. While chip supply stays constrained, the result is
higher than our expectations due to improved chip provide within the quarter, and strength in our
water quality take a look at applications.
• Second quarter adjusted EBITDA margin was 9.eight p.c, down 410 foundation points from the prior
yr. Reported operating income for the segment was $(5) million, and adjusted operating
earnings, which excludes $3 million of restructuring and realignment prices and $1 million of
shortages, unfavorable combine and better inflation greater than offset price realization and
productiveness financial savings.
Supplemental info 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 number one global water technology firm dedicated to solving important water and
infrastructure challenges with innovation. Our 17,000 diverse staff delivered income of $5.2
billion in 2021. We are making a extra sustainable world by enabling our clients to optimize water
and resource management, and serving to communities in more than one hundred fifty international locations become watersecure. Join เครื่องมือวัดpressure at www.xylem.com.
Forward-Looking Statements
This press release incorporates “forward-looking statements” throughout the meaning 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 words “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,”
“contemplate,” “predict,” “forecast,” “likely,” “believe,” “target,” “will,” “could,” “would,” “should,”
“potential,” “may” and related expressions or their negative, might, but usually are not essential to, determine
forward-looking statements. By their nature, forward-looking statements handle unsure matters and
include any statements that are not historic, such as statements about our strategy, financial plans,
outlook, goals, plans, intentions or objectives (including those associated to our social, environmental and
different sustainability goals); or handle attainable or future results of operations or financial performance,
together with statements relating to orders, revenues, operating margins and earnings per share progress.
Although we imagine that the expectations mirrored in any of our forward-looking statements are
affordable, actual results may differ materially from these projected or assumed in any of our forwardlooking statements. Our future monetary situation and outcomes of operations, in addition to any forwardlooking statements, are topic to alter and to inherent dangers and uncertainties, a lot of which are
beyond our management. Additionally, many of those dangers and uncertainties are, and should proceed to be,
amplified by impacts from the warfare between Russia and Ukraine, as well as the continuing coronavirus
(“COVID-19”) pandemic and related macroeconomic situations (including inflation). Important factors
that might trigger our precise results, efficiency and achievements, or industry outcomes to differ
materially from estimates or projections contained in or implied by our forward-looking statements
embrace, among others, the next: the influence of general trade and basic economic conditions,
together with industrial, governmental, and public and private sector spending and the energy of the
residential and commercial real property markets, on financial activity and our operations; geopolitical
occasions, including the warfare between Russia and Ukraine, and regulatory, financial and other risks
associated with our world sales and operations, together with with respect to domestic content material
necessities applicable to projects with governmental funding; continued uncertainty around the
ongoing COVID-19 pandemic’s magnitude, length and impacts on our business, operations, progress,
and monetary condition; actual or potential other epidemics, pandemics or global health crises;
availability, scarcity or delays in receiving digital elements (in specific, semiconductors), components,
and uncooked materials from our provide chain; manufacturing and working price will increase due to
macroeconomic conditions, together with inflation, supply chain shortages, logistics challenges, tight labor
markets, prevailing value changes, tariffs and other factors; demand for our products; disruption,
competitors or pricing pressures within the markets we serve; cybersecurity incidents or other disruptions of
info technology techniques 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 entice senior management
and other various and key talent, in addition to competition for total expertise and labor; difficulty predicting
our financial outcomes; defects, safety, guarantee and liability claims, and recollects with respect to products;
availability, regulation or interference with radio spectrum used by sure of our merchandise; uncertainty
associated to restructuring and realignment actions and associated charges and financial savings; our ability to continue
strategic investments for growth; our capacity to efficiently establish, execute and combine acquisitions;
volatility in served markets or impacts on business and operations as a result of climate circumstances, together with
the effects of local weather change; fluctuations in international foreign money trade rates; our capacity to borrow or
refinance our current indebtedness and uncertainty across the availability of liquidity sufficient to satisfy
our wants; threat of future impairments to goodwill and other intangible belongings; failure to adjust to, or
changes in, legal guidelines or rules, together with these pertaining to anti-corruption, information privateness and safety,
export and import, competition, and the surroundings and climate change; modifications in our effective tax
charges or tax expenses; authorized, governmental or regulatory claims, investigations or proceedings and
related contingent liabilities; and other components 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 in this press release concerning our environmental and different
sustainability plans and targets are not a sign that these statements are essentially material to
investors or are required to be disclosed in our filings with the SEC. In addition, historical, current, and
forward-looking social, environmental and sustainability associated statements may be primarily based on requirements
for measuring progress that are nonetheless growing, internal controls and processes that continue to evolve,
and assumptions which are subject to vary in the future. All forward-looking statements made herein
are based on information presently obtainable to us as of the date of this press release. We undertake no
obligation to publicly update or revise any forward-looking statements, whether or not on account of new
info, future events or in any other case, except as required by legislation

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