Xylem Reports Second Quarter 2022 Results


Xylem Reports Second Quarter 2022 Results

by Brenna ShumbamhiniAugust 2, 2022


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.”


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

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.

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

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include, among others, the following: the impact of general business and basic economic situations,
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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,
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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

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the consequences of climate change; fluctuations in international currency trade rates; our capability to borrow or

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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

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Report on Form 10-K for the yr ended December 31, 2021 and in subsequent filings we make with

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