Xylem Reports Second Quarter 2022 Results

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Xylem Reports Second Quarter 2022 Results
by Brenna ShumbamhiniAugust 2, 2022
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Robust persevering with demand drove robust organic orders progress: 1% on a reported
foundation, 6% organically
• Revenue of $1.4 billion, up 1% on a reported basis, up 6% organically
• Earnings per share of $0.62, adjusted earnings per share of $0.66
• Adjusted EBITDA margin exceeded steerage by one hundred sixty foundation points
• Raising full-year organic revenue guidance 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 quantity one world water know-how
company dedicated to solving the world’s most challenging water issues, right now reported second quarter
income of $1.four billion, surpassing earlier steerage in each business section. Strong continued
international demand drove orders and backlog progress throughout the portfolio.
Second quarter adjusted earnings earlier than interest, tax, depreciation and amortization (EBITDA) margin
was 16.6 %, higher than the Company’s earlier steerage and reflecting a year-over-year
lower of 70 basis points. pressure gauge ด้าน ดูด and the influence of constant chip shortages drove the margin
decline, exceeding the advantages of worth realization and productiveness financial savings. Xylem generated internet
earnings 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 impact of restructuring, realignment and special charges.
“The team delivered very robust second quarter performance on all key metrics, and nicely ahead of our
steering for the quarter,” stated Patrick Decker, Xylem president and CEO. “The result displays our
industrial momentum on continuing underlying demand, disciplined operational execution, and a
moderate easing in chip supply constraints.”
“On the strength of robust backlog and orders progress, and the team’s demonstrated success mitigating
the results of inflation, we’re elevating our full-year guidance on income and earnings. This further
reinforces our longer-term growth and worth creation thesis for Xylem.”
Outlook
Xylem now expects full-year 2022 organic income growth to be in the range of 8 to 10 %, and 3
to 5 p.c on a reported foundation. This represents an increase from the Company’s earlier full-year
natural revenue steering of four to 6 %, and 1 to three p.c on a reported foundation. Full-year 2022
adjusted EBITDA margin is now expected to be in the range of sixteen.5 to 17.0 p.c, raising the low finish
of the previous vary of 16.0 to 17.0 %. This leads to adjusted earnings per share of $2.50 to
$2.70, raising the low finish from the previous vary of $2.forty to $2.70. The increased steerage reflects
sturdy demand, gradual easing of provide chain constraints and worth realization partially offset by
inflation and overseas exchange headwinds.
Further 2022 planning assumptions are included in Xylem’s second quarter 2022 earnings materials
posted at www.xylem.com/investors. Excluding revenue, Xylem offers steerage only on a non-GAAP
foundation as a result of inherent difficulty in forecasting certain quantities that may be included in GAAP
earnings, corresponding to discrete tax gadgets, with out unreasonable effort.
Second Quarter Segment Results
Water Infrastructure
Xylem’s Water Infrastructure section consists of its portfolio of companies serving clean water
delivery, wastewater transport and therapy, and dewatering.
• Second quarter 2022 Water Infrastructure income was $589 million, a 9.0 percent increase
organically compared with second quarter 2021. This strong progress was driven by robust 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 percent, up 240 basis factors from the prior
yr. Reported working earnings for the section was $108 million. Adjusted operating earnings
for the segment, which excludes $3 million of restructuring and realignment, was $111 million, a
14.four % enhance versus the comparable period last 12 months. Reported working margin for
the phase was 18.3 %, up 200 foundation points versus the prior 12 months, and adjusted
working margin was 18.eight p.c, up a hundred and eighty foundation points versus the prior year. 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 income was $429 million, a 7.0 percent enhance
organically year-over-year. The segment delivered robust value realization and backlog
execution in industrial and residential finish markets, partially offset by continued supply chain
constraints in industrial buildings in the United States.
• Second quarter adjusted EBITDA margin was 16.1 %, down one hundred thirty foundation factors from the
prior yr. Reported working earnings for the segment was $61 million and adjusted operating
earnings, which excludes $2 million of restructuring and realignment prices, was $63 million, a 4.5
p.c decrease versus the comparable interval last 12 months. The section reported operating
margin was 14.2 p.c, down one hundred thirty foundation factors versus the prior yr period. Adjusted
operating margin declined one hundred twenty basis points to 14.7 percent. Strong value realization and
productiveness financial savings had been more than offset by inflation and lower quantity.
Measurement & Control Solutions
Xylem’s Measurement & Control Solutions phase consists of its portfolio of companies in sensible
metering, community technologies, superior infrastructure analytics and analytic instrumentation.
• Second quarter 2022 Measurement & Control Solutions income was $346 million, down 2.zero
percent organically versus the prior 12 months. While chip provide remains constrained, the result is
higher than our expectations as a result of improved chip supply within the quarter, and strength in our
water quality check applications.
• Second quarter adjusted EBITDA margin was 9.eight p.c, down 410 foundation points from the prior
12 months. Reported operating revenue for the section was $(5) million, and adjusted working
revenue, which excludes $3 million of restructuring and realignment costs and $1 million of
shortages, unfavorable combine and better inflation greater than offset price realization and
productivity savings.
Supplemental data on Xylem’s second quarter 2022 earnings and reconciliations for certain nonGAAP objects is posted at www.xylem.com/investors.
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About Xylem
Xylem (XYL) is a quantity one international water know-how company dedicated to fixing important water and
infrastructure challenges with innovation. Our 17,000 various workers delivered revenue of $5.2
billion in 2021. We are making a more sustainable world by enabling our customers to optimize water
and resource management, and helping communities in more than a hundred and fifty international locations become watersecure. Join us at www.xylem.com.
Forward-Looking Statements
This press launch 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 comparable expressions or their adverse, could, but usually are not essential to, establish
forward-looking statements. By their nature, forward-looking statements handle uncertain matters and
include any statements that aren’t historical, such as statements about our technique, financial plans,
outlook, goals, plans, intentions or objectives (including these associated to our social, environmental and
different sustainability goals); or tackle possible or future results of operations or monetary efficiency,
together with statements relating to orders, revenues, operating margins and earnings per share development.
Although we believe that the expectations mirrored in any of our forward-looking statements are
cheap, actual results might differ materially from these projected or assumed in any of our forwardlooking statements. Our future financial condition and outcomes of operations, as well as any forwardlooking statements, are topic to vary and to inherent risks and uncertainties, many of that are
past our control. Additionally, many of those dangers and uncertainties are, and will continue to be,
amplified by impacts from the warfare between Russia and Ukraine, as properly as the continuing coronavirus
(“COVID-19”) pandemic and related macroeconomic situations (including inflation). Important elements
that could trigger our precise outcomes, efficiency and achievements, or business outcomes to vary
materially from estimates or projections contained in or implied by our forward-looking statements
include, among others, the following: the impact of total trade and general economic situations,
including industrial, governmental, and public and private sector spending and the power of the
residential and industrial actual estate markets, on economic exercise and our operations; geopolitical
events, including the warfare between Russia and Ukraine, and regulatory, economic and other risks
associated with our world sales and operations, together with with respect to home content
necessities applicable to projects with governmental funding; continued uncertainty across the
ongoing COVID-19 pandemic’s magnitude, length and impacts on our business, operations, growth,
and monetary situation; precise or potential different epidemics, pandemics or world well being crises;
availability, scarcity or delays in receiving digital components (in explicit, semiconductors), components,
and raw supplies from our provide chain; manufacturing and operating price will increase as a end result of
macroeconomic situations, including inflation, provide chain shortages, logistics challenges, tight labor
markets, prevailing price adjustments, tariffs and different components; demand for our products; disruption,
competitors 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 services or that of third parties upon which we rely; ability to retain and entice senior management
and different various and key expertise, as properly as competitors for overall expertise and labor; difficulty predicting
our financial results; defects, security, warranty and legal responsibility claims, and recalls with respect to merchandise;
availability, regulation or interference with radio spectrum used by sure of our merchandise; uncertainty
related to restructuring and realignment actions and associated expenses and savings; our capacity to proceed
strategic investments for development; our capability to efficiently establish, execute and integrate acquisitions;
volatility in served markets or impacts on enterprise and operations due to climate situations, together with
the results of climate change; fluctuations in foreign forex exchange charges; our capacity to borrow or
refinance our current indebtedness and uncertainty around the availability of liquidity adequate to satisfy
our wants; danger of future impairments to goodwill and different intangible property; failure to comply with, or
modifications in, legal guidelines or laws, together with these pertaining to anti-corruption, data privateness and security,
export and import, competitors, and the surroundings and local weather change; modifications in our efficient tax
rates or tax expenses; authorized, governmental or regulatory claims, investigations or proceedings and
associated contingent liabilities; and other factors set forth underneath “Item 1A. Risk Factors” in our Annual
Report on Form 10-K for the 12 months 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 objectives usually are not an indication that these statements are essentially material to
traders or are required to be disclosed in our filings with the SEC. In addition, historical, present, and
forward-looking social, environmental and sustainability associated statements may be primarily based on standards
for measuring progress which are still creating, internal controls and processes that proceed to evolve,
and assumptions which are topic to vary in the future. All forward-looking statements made herein
are based mostly on information currently out there to us as of the date of this press release. We undertake no
obligation to publicly update or revise any forward-looking statements, whether because of new
data, future occasions or in any other case, besides as required by legislation
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