FEATUREDMINING
Xylem Reports Second Quarter 2022 Results
by Brenna ShumbamhiniAugust 2, 2022
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Robust continuing demand drove sturdy organic orders growth: 1% on a reported
foundation, 6% organically
• Revenue of $1.four 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 steerage by one hundred sixty foundation points
• Raising full-year natural income steering 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 global water know-how
firm devoted to fixing the world’s most challenging water points, at present reported second quarter
income of $1.4 billion, surpassing earlier guidance in each business phase. Strong continued
global demand drove orders and backlog development throughout the portfolio.
Second quarter adjusted earnings before curiosity, tax, depreciation and amortization (EBITDA) margin
was sixteen.6 percent, higher than the Company’s previous guidance and reflecting a year-over-year
decrease of 70 foundation factors. Inflation and the impact of continuing chip shortages drove the margin
decline, exceeding the advantages of price realization and productiveness financial savings. Xylem generated web
revenue of $112 million, or $0.sixty two per share, and adjusted net income of $120 million, or $0.sixty six per share,
which excludes the influence of restructuring, realignment and particular costs.
“The team delivered very strong second quarter performance on all key metrics, and well ahead of our
steerage for the quarter,” said Patrick Decker, Xylem president and CEO. “The result reflects our
commercial momentum on persevering with underlying demand, disciplined operational execution, and a
average easing in chip provide constraints.”
“On the energy of strong backlog and orders growth, and the team’s demonstrated success mitigating
the effects of inflation, we are elevating our full-year steering on revenue and earnings. This additional
reinforces our longer-term development and worth creation thesis for Xylem.”
Outlook
Xylem now expects full-year 2022 natural income growth to be in the vary of 8 to 10 percent, and three
to five percent on a reported basis. This represents an increase from the Company’s earlier full-year
organic income steering of four to 6 %, and 1 to three p.c on a reported foundation. Full-year 2022
adjusted EBITDA margin is now anticipated to be in the range of sixteen.5 to 17.zero percent, elevating the low end
of the previous vary of 16.zero to 17.zero percent. This results in adjusted earnings per share of $2.50 to
$2.70, elevating the low finish from the earlier range of $2.40 to $2.70. The elevated steerage displays
robust demand, gradual easing of supply chain constraints and worth realization partially offset by
inflation and foreign trade headwinds.
Further 2022 planning assumptions are included in Xylem’s second quarter 2022 earnings supplies
posted at www.xylem.com/investors. Excluding income, Xylem provides guidance only on a non-GAAP
foundation because of the inherent difficulty in forecasting certain quantities that would be included in GAAP
earnings, such as discrete tax objects, 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 revenue was $589 million, a 9.zero p.c improve
organically in contrast with second quarter 2021. This robust development was pushed by sturdy worth
realization, industrial dewatering demand, and healthy activity in our wastewater utility business
in the U.S. and Western Europe.
• Second quarter adjusted EBITDA margin was 21.4 p.c, up 240 basis points from the prior
year. Reported operating revenue for the phase was $108 million. Adjusted working revenue
for the segment, which excludes $3 million of restructuring and realignment, was $111 million, a
14.four % increase versus the comparable period last yr. Reported operating margin for
the segment was 18.3 %, up 200 basis factors versus the prior year, and adjusted
working margin was 18.eight percent, up a hundred and eighty basis points versus the prior yr. Strong value
realization, volume, and productivity savings more than offset inflation and strategic
investments.
Applied Water
Xylem’s Applied Water section consists of its portfolio of companies in industrial, business building,
and residential applications.
• Second quarter 2022 Applied Water income was $429 million, a 7.0 p.c improve
organically year-over-year. The phase delivered sturdy worth realization and backlog
execution in industrial and residential finish markets, partially offset by continued provide chain
constraints in business buildings within the United States.
• Second quarter adjusted EBITDA margin was 16.1 p.c, down 130 basis factors from the
prior year. Reported operating revenue for the segment was $61 million and adjusted operating
income, which excludes $2 million of restructuring and realignment costs, was $63 million, a 4.5
p.c lower versus the comparable interval final yr. The section reported working
margin was 14.2 %, down one hundred thirty basis factors versus the prior yr interval. Adjusted
working margin declined a hundred and twenty basis points to 14.7 %. Strong price realization and
productiveness financial savings were more than offset by inflation and lower volume.
diaphragm seal & Control Solutions
Xylem’s Measurement & Control Solutions phase consists of its portfolio of companies in sensible
metering, network technologies, superior infrastructure analytics and analytic instrumentation.
• Second quarter 2022 Measurement & Control Solutions revenue was $346 million, down 2.0
percent organically versus the prior year. While chip supply stays constrained, the result is
better than our expectations as a outcome of improved chip supply within the quarter, and power in our
water quality take a look at applications.
• Second quarter adjusted EBITDA margin was 9.eight p.c, down 410 foundation factors from the prior
yr. Reported operating income for the segment was $(5) million, and adjusted operating
revenue, which excludes $3 million of restructuring and realignment costs and $1 million of
shortages, unfavorable combine and better inflation greater than offset value realization and
productivity savings.
Supplemental information 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 international water know-how firm dedicated to solving crucial water and
infrastructure challenges with innovation. Our 17,000 diverse staff delivered revenue of $5.2
billion in 2021. We are creating a more sustainable world by enabling our customers to optimize water
and useful resource administration, and helping communities in additional than one hundred fifty nations turn out to be watersecure. Join us at www.xylem.com.
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including 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
affordable, precise results might differ materially from these projected or assumed in any of our forwardlooking statements. Our future financial condition and outcomes of operations, in addition to any forwardlooking statements, are topic to change and to inherent dangers and uncertainties, many of which are
beyond our management. Additionally, many of those dangers and uncertainties are, and will continue to be,
amplified by impacts from the struggle between Russia and Ukraine, in addition to the continuing coronavirus
(“COVID-19”) pandemic and related macroeconomic circumstances (including inflation). Important factors
that could trigger our actual outcomes, efficiency and achievements, or trade outcomes to differ
materially from estimates or projections contained in or implied by our forward-looking statements
include, among others, the following: the impact of general business and basic economic situations,
including industrial, governmental, and private and non-private sector spending and the energy of the
residential and commercial real property markets, on economic activity and our operations; geopolitical
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related to our world gross sales and operations, together with with respect to home content material
requirements applicable to projects with governmental funding; continued uncertainty around the
ongoing COVID-19 pandemic’s magnitude, length 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 elements (in explicit, semiconductors), parts,
and uncooked materials from our provide chain; manufacturing and working value increases as a outcome of
macroeconomic conditions, together with inflation, supply chain shortages, logistics challenges, tight labor
markets, prevailing price adjustments, tariffs and different elements; demand for our merchandise; disruption,
competition or pricing pressures in the markets we serve; cybersecurity incidents or other disruptions of
information expertise techniques on which we rely, or involving our merchandise; disruptions in operations at
our amenities or that of third parties upon which we rely; ability to retain and attract senior administration
and different various and key expertise, in addition to competitors for overall talent and labor; issue predicting
our financial results; defects, safety, guarantee and liability claims, and remembers with respect to products;
availability, regulation or interference with radio spectrum used by certain of our merchandise; uncertainty
related to restructuring and realignment actions and related charges and financial savings; our capability to proceed
strategic investments for growth; our capability to successfully determine, execute and combine acquisitions;
volatility in served markets or impacts on enterprise and operations as a outcome of climate conditions, together with
the consequences of climate change; fluctuations in international currency trade rates; our capability 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 different intangible assets; failure to comply with, or
modifications in, laws or rules, including those pertaining to anti-corruption, data privateness and security,
export and import, competition, and the environment and climate change; adjustments in our efficient tax
rates or tax expenses; legal, governmental or regulatory claims, investigations or proceedings and
related contingent liabilities; and other factors 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”).
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for measuring progress that are nonetheless developing, inside controls and processes that continue to evolve,
and assumptions which may be topic to alter sooner or later. All forward-looking statements made herein
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obligation to publicly update or revise any forward-looking statements, whether or not because of new
information, future occasions or otherwise, except as required by legislation
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