Xylem Reports Second Quarter 2022 Results

by Brenna ShumbamhiniAugust 2, 2022


Robust persevering with demand drove robust organic orders progress: 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.sixty six

• Adjusted EBITDA margin exceeded steering by 160 basis factors

• Raising full-year organic 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 number one international water technology

firm devoted to fixing the world’s most difficult water issues, right now reported second quarter

revenue of $1.four billion, surpassing earlier guidance in every business section. Strong continued

world demand drove orders and backlog growth throughout the portfolio.
Second quarter adjusted earnings before interest, tax, depreciation and amortization (EBITDA) margin

was 16.6 %, better than the Company’s previous steerage and reflecting a year-over-year

lower of 70 basis points. Inflation and the impact of constant chip shortages drove the margin

decline, exceeding the benefits of value realization and productivity savings. Xylem generated net

earnings of $112 million, or $0.sixty two per share, and adjusted web revenue of $120 million, or $0.66 per share,
which excludes the impression of restructuring, realignment and particular expenses.
“The group delivered very strong second quarter efficiency on all key metrics, and nicely forward of our

steering for the quarter,” mentioned Patrick Decker, Xylem president and CEO. “The end result reflects our

commercial momentum on persevering with underlying demand, disciplined operational execution, and a

average easing in chip supply constraints.”

“On the power of strong backlog and orders development, and the team’s demonstrated success mitigating

the effects of inflation, we’re raising our full-year steerage on revenue and earnings. This further

reinforces our longer-term development and worth creation thesis for Xylem.”


Xylem now expects full-year 2022 natural income growth to be in the range of 8 to 10 percent, and three

to 5 p.c on a reported basis. This represents an increase from the Company’s earlier full-year

natural revenue guidance of 4 to six percent, and 1 to three % on a reported foundation. Full-year 2022

adjusted EBITDA margin is now expected to be in the vary of sixteen.5 to 17.0 %, raising the low end

of the earlier vary of to 17.0 percent. This ends in adjusted earnings per share of $2.50 to

$2.70, elevating the low end from the previous vary of $2.forty to $2.70. The elevated steering displays

strong demand, gradual easing of provide chain constraints and value realization partially offset by

inflation and international exchange headwinds.
Further 2022 planning assumptions are included in Xylem’s second quarter 2022 earnings supplies

posted at Excluding revenue, Xylem provides steering only on a non-GAAP

basis as a end result of inherent difficulty in forecasting sure quantities that would be included in GAAP

earnings, such as discrete tax gadgets, without unreasonable effort.
Second Quarter Segment Results

Water Infrastructure

Xylem’s Water Infrastructure phase consists of its portfolio of companies serving clean water

delivery, wastewater transport and remedy, and dewatering.
• Second quarter 2022 Water Infrastructure income was $589 million, a 9.0 p.c increase

organically in contrast with second quarter 2021. digital pressure gauge was pushed by strong worth

realization, industrial dewatering demand, and wholesome exercise in our wastewater utility enterprise

in the U.S. and Western Europe.
• Second quarter adjusted EBITDA margin was 21.four p.c, up 240 basis points from the prior

12 months. Reported working revenue for the segment was $108 million. Adjusted working income

for the segment, which excludes $3 million of restructuring and realignment, was $111 million, a

14.4 percent enhance versus the comparable period last yr. Reported working margin for

the segment was 18.three percent, up 200 foundation factors versus the prior 12 months, and adjusted

operating margin was 18.eight percent, up a hundred and eighty basis points versus the prior year. Strong worth

realization, quantity, and productivity savings more than offset inflation and strategic

Applied Water

Xylem’s Applied Water phase consists of its portfolio of companies in industrial, commercial building,
and residential functions.
• Second quarter 2022 Applied Water income was $429 million, a 7.0 % increase

organically year-over-year. The section delivered strong price realization and backlog

execution in industrial and residential end markets, partially offset by continued provide chain

constraints in business buildings within the United States.
• Second quarter adjusted EBITDA margin was 16.1 percent, down a hundred thirty basis points from the

prior year. Reported working income for the phase was $61 million and adjusted working

earnings, which excludes $2 million of restructuring and realignment costs, was $63 million, a 4.5

percent lower versus the comparable period final 12 months. The segment reported working

margin was 14.2 percent, down a hundred thirty basis points versus the prior yr interval. Adjusted

working margin declined one hundred twenty basis factors to 14.7 p.c. Strong value realization and

productiveness financial savings have been more than offset by inflation and decrease volume.
Measurement & Control Solutions

Xylem’s Measurement & Control Solutions segment consists of its portfolio of companies in smart

metering, network technologies, superior infrastructure analytics and analytic instrumentation.
• Second quarter 2022 Measurement & Control Solutions revenue was $346 million, down

p.c organically versus the prior yr. While chip provide remains constrained, the result’s

higher than our expectations due to improved chip provide in the quarter, and strength in our

water quality test purposes.
• Second quarter adjusted EBITDA margin was 9.8 %, down 410 basis factors from the prior

year. Reported operating revenue for the phase was $(5) million, and adjusted operating

earnings, which excludes $3 million of restructuring and realignment prices and $1 million of

shortages, unfavorable mix and higher inflation more than offset price realization and

productivity financial savings.
Supplemental data on Xylem’s second quarter 2022 earnings and reconciliations for sure nonGAAP objects is posted at

About Xylem

Xylem (XYL) is a leading world water technology company dedicated to solving crucial water and

infrastructure challenges with innovation. ไดอะแฟรม delivered revenue of $5.2

billion in 2021. We are making a extra sustainable world by enabling our clients to optimize water

and resource administration, and serving to communities in more than 150 countries become watersecure. Join us at
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reasonable, actual outcomes might differ materially from those projected or assumed in any of our forwardlooking statements. Our future monetary condition and outcomes of operations, in addition to any forwardlooking statements, are topic to change and to inherent dangers and uncertainties, a lot of which are

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amplified by impacts from the warfare between Russia and Ukraine, in addition to the continuing coronavirus

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that could trigger our actual outcomes, efficiency and achievements, or business outcomes to differ

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including industrial, governmental, and private and non-private sector spending and the strength of the

residential and business actual property markets, on economic exercise and our operations; geopolitical

events, together with the war between Russia and Ukraine, and regulatory, financial and different dangers

related to our world sales and operations, together with with respect to domestic content

necessities relevant to initiatives with governmental funding; continued uncertainty around the

ongoing COVID-19 pandemic’s magnitude, length and impacts on our business, operations, development,
and monetary condition; actual or potential other epidemics, pandemics or global health crises;
availability, scarcity or delays in receiving digital parts (in particular, semiconductors), parts,
and uncooked materials from our supply chain; manufacturing and working cost increases as a result of

macroeconomic situations, including inflation, supply chain shortages, logistics challenges, tight labor

markets, prevailing price modifications, tariffs and different factors; demand for our products; disruption,
competitors or pricing pressures in the markets we serve; cybersecurity incidents or other disruptions of

information technology techniques on which we rely, or involving our products; disruptions in operations at

our amenities or that of third parties upon which we rely; capability to retain and entice senior administration

and other various and key expertise, in addition to competitors for general expertise and labor; problem predicting

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volatility in served markets or impacts on enterprise and operations due to climate circumstances, including

the results of climate change; fluctuations in foreign currency exchange rates; our capability to borrow or

refinance our existing indebtedness and uncertainty across the availability of liquidity sufficient to satisfy

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adjustments in, laws or rules, including those pertaining to anti-corruption, data privateness and security,
export and import, competitors, and the setting and climate change; modifications in our efficient tax

charges or tax bills; authorized, 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 year ended December 31, 2021 and in subsequent filings we make with

the Securities and Exchange Commission (“SEC”).
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