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Xylem Reports Second Quarter 2022 Results
by Brenna ShumbamhiniAugust 2, 2022
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Robust continuing 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.sixty two, adjusted earnings per share of $0.sixty six
• Adjusted EBITDA margin exceeded steerage by a hundred and sixty basis points
• Raising full-year natural revenue steerage to a range 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
company devoted to solving the world’s most difficult water points, at present reported second quarter
income of $1.four billion, surpassing earlier steerage in every enterprise section. Strong continued
world demand drove orders and backlog growth across the portfolio.
Second quarter adjusted earnings earlier than curiosity, tax, depreciation and amortization (EBITDA) margin
was sixteen.6 %, higher than the Company’s previous steerage and reflecting a year-over-year
lower of 70 basis factors. Inflation and the impact of constant chip shortages drove the margin
decline, exceeding the advantages of value realization and productivity savings. Xylem generated web
earnings of $112 million, or $0.62 per share, and adjusted net revenue of $120 million, or $0.sixty six per share,
which excludes the influence of restructuring, realignment and special costs.
“The team delivered very robust second quarter performance on all key metrics, and nicely ahead of our
steerage for the quarter,” stated Patrick Decker, Xylem president and CEO. “The end result reflects our
business momentum on persevering with underlying demand, disciplined operational execution, and a
reasonable easing in chip provide constraints.”
“On the power of robust backlog and orders development, and the team’s demonstrated success mitigating
the effects of inflation, we’re elevating our full-year guidance on income and earnings. This additional
reinforces our longer-term growth and value creation thesis for Xylem.”
Outlook
Xylem now expects full-year 2022 natural income development to be in the vary of 8 to 10 %, and three
to five percent on a reported foundation. This represents a rise from the Company’s previous full-year
natural revenue steering of four to 6 p.c, and 1 to 3 p.c on a reported basis. Full-year 2022
adjusted EBITDA margin is now expected to be in the vary of 16.5 to 17.0 p.c, raising the low end
of the earlier range of sixteen.0 to 17.zero p.c. 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 reflects
sturdy demand, gradual easing of provide chain constraints and worth realization partially offset by
inflation and foreign exchange headwinds.
Further 2022 planning assumptions are included in Xylem’s second quarter 2022 earnings materials
posted at www.xylem.com/investors. Excluding income, Xylem supplies steerage only on a non-GAAP
basis as a outcome of inherent issue in forecasting certain 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 segment consists of its portfolio of businesses serving clean water
supply, wastewater transport and remedy, and dewatering.
• Second quarter 2022 Water Infrastructure revenue was $589 million, a 9.zero % increase
organically compared with second quarter 2021. This strong progress was pushed by strong worth
realization, industrial dewatering demand, and wholesome exercise in our wastewater utility enterprise
in the us and Western Europe.
• Second quarter adjusted EBITDA margin was 21.four %, up 240 foundation points from the prior
year. Reported working earnings for the section was $108 million. Adjusted operating earnings
for the phase, which excludes $3 million of restructuring and realignment, was $111 million, a
14.4 p.c improve versus the comparable interval final 12 months. Reported operating margin for
the phase was 18.3 p.c, up 200 foundation points versus the prior year, and adjusted
operating margin was 18.8 p.c, up one hundred eighty basis points versus the prior 12 months. Strong price
realization, volume, and productiveness savings greater than offset inflation and strategic
investments.
Applied Water
Xylem’s Applied Water phase consists of its portfolio of companies in industrial, business building,
and residential applications.
• Second quarter 2022 Applied Water revenue was $429 million, a 7.0 p.c improve
organically year-over-year. เกจ์แรงดัน delivered sturdy value realization and backlog
execution in industrial and residential finish markets, partially offset by continued supply chain
constraints in commercial buildings within the United States.
• Second quarter adjusted EBITDA margin was 16.1 percent, down a hundred thirty foundation factors from the
prior 12 months. Reported working revenue 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
p.c decrease versus the comparable interval last 12 months. The phase reported operating
margin was 14.2 p.c, down one hundred thirty basis factors versus the prior year period. Adjusted
working margin declined 120 foundation points to 14.7 %. Strong price realization and
productiveness financial savings have been more than offset by inflation and decrease quantity.
Measurement & Control Solutions
Xylem’s Measurement & Control Solutions section consists of its portfolio of businesses in good
metering, network technologies, superior infrastructure analytics and analytic instrumentation.
• Second quarter 2022 Measurement & Control Solutions income was $346 million, down 2.zero
p.c organically versus the prior 12 months. While chip provide stays constrained, the result is
higher than our expectations as a outcome of improved chip supply in the quarter, and energy in our
water high quality check functions.
• Second quarter adjusted EBITDA margin was 9.8 %, down 410 foundation factors from the prior
yr. Reported operating earnings for the segment was $(5) million, and adjusted working
earnings, which excludes $3 million of restructuring and realignment costs and $1 million of
shortages, unfavorable mix and better inflation more than offset price realization and
productivity savings.
Supplemental info on Xylem’s second quarter 2022 earnings and reconciliations for certain nonGAAP items is posted at www.xylem.com/investors.
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About Xylem
Xylem (XYL) is a number one world water expertise firm dedicated to fixing crucial water and
infrastructure challenges with innovation. Our 17,000 numerous workers delivered revenue of $5.2
billion in 2021. We are creating a extra sustainable world by enabling our clients to optimize water
and useful resource management, and serving to communities in additional than 150 nations turn out to be watersecure. Join us at www.xylem.com.
Forward-Looking Statements
This press release incorporates “forward-looking statements” throughout the that 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 related expressions or their unfavorable, might, however are not essential to, identify
forward-looking statements. By their nature, forward-looking statements tackle unsure matters and
embrace any statements that aren’t historic, corresponding to statements about our strategy, monetary plans,
outlook, objectives, plans, intentions or objectives (including those associated to our social, environmental and
other sustainability goals); or handle potential 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 reflected in any of our forward-looking statements are
cheap, precise outcomes could 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 subject to vary and to inherent risks and uncertainties, lots of which are
past our control. Additionally, many of these risks and uncertainties are, and may proceed to be,
amplified by impacts from the struggle between Russia and Ukraine, in addition to the continued coronavirus
(“COVID-19”) pandemic and related macroeconomic conditions (including inflation). Important components
that might trigger our precise results, efficiency and achievements, or business results to differ
materially from estimates or projections contained in or implied by our forward-looking statements
include, among others, the following: the impression of overall trade and general economic situations,
together with industrial, governmental, and private and non-private sector spending and the energy of the
residential and commercial real property markets, on economic exercise and our operations; geopolitical
occasions, together with the warfare between Russia and Ukraine, and regulatory, economic and other risks
associated with our international sales and operations, together with with respect to domestic content
necessities applicable to tasks with governmental funding; continued uncertainty across the
ongoing COVID-19 pandemic’s magnitude, duration and impacts on our business, operations, development,
and financial condition; actual or potential other epidemics, pandemics or international health crises;
availability, shortage or delays in receiving electronic components (in explicit, semiconductors), parts,
and uncooked materials from our supply chain; manufacturing and operating cost will increase because of
macroeconomic situations, together with inflation, provide chain shortages, logistics challenges, tight labor
markets, prevailing price modifications, tariffs and different factors; demand for our merchandise; disruption,
competition or pricing pressures in the markets we serve; cybersecurity incidents or other disruptions of
info expertise 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 appeal to senior administration
and different diverse and key talent, as properly as competition for total expertise and labor; difficulty predicting
our monetary outcomes; defects, security, guarantee and liability claims, and recollects with respect to products;
availability, regulation or interference with radio spectrum utilized by certain of our products; uncertainty
related to restructuring and realignment actions and related expenses and financial savings; our capability to proceed
strategic investments for development; our capacity to successfully determine, execute and combine acquisitions;
volatility in served markets or impacts on business and operations as a end result of climate conditions, including
the results of local weather change; fluctuations in international foreign money exchange charges; our capacity to borrow or
refinance our current indebtedness and uncertainty around the availability of liquidity enough to fulfill
our wants; threat of future impairments to goodwill and other intangible property; failure to adjust to, or
changes in, laws or rules, together with those pertaining to anti-corruption, data privacy and safety,
export and import, competition, and the surroundings and local weather change; adjustments in our effective tax
rates or tax bills; authorized, governmental or regulatory claims, investigations or proceedings and
related 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”).
Forward-looking and other statements on this press release regarding our environmental and other
sustainability plans and objectives aren’t an indication that these statements are essentially materials to
investors or are required to be disclosed in our filings with the SEC. In addition, historical, present, and
forward-looking social, environmental and sustainability related statements may be primarily based on requirements
for measuring progress that are still growing, inside controls and processes that proceed to evolve,
and assumptions which are topic to change in the future. All forward-looking statements made herein
are based mostly on data currently out there to us as of the date of this press launch. We undertake no
obligation to publicly update or revise any forward-looking statements, whether or not because of new
info, future occasions or in any other case, besides as required by law
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