Xylem Reports Second Quarter 2022 Results


Xylem Reports Second Quarter 2022 Results

by Brenna ShumbamhiniAugust 2, 2022


Robust persevering with demand drove robust organic orders growth: 1% on a reported

basis, 6% organically

• Revenue of $1.4 billion, up 1% on a reported basis, up 6% organically

• Earnings per share of $0.sixty two, adjusted earnings per share of $0.sixty six

• Adjusted EBITDA margin exceeded guidance by 160 foundation factors

• Raising full-year natural 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 quantity one global water expertise

company devoted to solving the world’s most challenging water issues, today reported second quarter

revenue of $1.4 billion, surpassing earlier steering in every business phase. Strong continued

world demand drove orders and backlog progress across the portfolio.
Second quarter adjusted earnings earlier than interest, tax, depreciation and amortization (EBITDA) margin

was sixteen.6 p.c, higher than the Company’s earlier guidance and reflecting a year-over-year

decrease of 70 foundation points. Inflation and the impression of continuing chip shortages drove the margin

decline, exceeding the advantages of price realization and productivity financial savings. Xylem generated web

income of $112 million, or $0.62 per share, and adjusted net income of $120 million, or $0.66 per share,
which excludes the impression of restructuring, realignment and special expenses.
“The staff 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

reasonable 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 elevating our full-year guidance 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 range of eight to 10 percent, and 3

to five % on a reported foundation. This represents a rise from the Company’s earlier full-year

organic revenue guidance of four to 6 percent, and 1 to 3 percent on a reported foundation. Full-year 2022

adjusted EBITDA margin is now anticipated to be in the vary of 16.5 to 17.0 percent, elevating the low end

of the previous vary of sixteen.zero to 17.0 p.c. This leads to adjusted earnings per share of $2.50 to

$2.70, elevating the low end from the earlier vary of $2.forty to $2.70. The elevated steerage reflects

sturdy demand, gradual easing of provide chain constraints and worth realization partially offset by

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

posted at www.xylem.com/investors. Excluding revenue, Xylem supplies guidance solely on a non-GAAP

basis because of the inherent issue in forecasting certain quantities that would be included in GAAP

earnings, similar to discrete tax gadgets, without unreasonable effort.
Second Quarter Segment Results

Water Infrastructure

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

delivery, wastewater transport and remedy, and dewatering.
• Second quarter 2022 Water Infrastructure income was $589 million, a 9.zero % enhance

organically compared with second quarter 2021. This robust progress was driven by sturdy worth

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

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

yr. Reported working revenue for the phase was $108 million. Adjusted operating เพรสเชอร์เกจ

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

14.4 % improve versus the comparable interval final 12 months. Reported operating margin for

the section was 18.3 p.c, up 200 foundation factors versus the prior yr, and adjusted

working margin was 18.eight p.c, up a hundred and eighty basis factors versus the prior year. Strong value

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

Applied Water

Xylem’s Applied Water segment consists of its portfolio of businesses in industrial, business building,
and residential purposes.
• Second quarter 2022 Applied Water revenue was $429 million, a 7.zero p.c improve

organically year-over-year. The phase delivered sturdy value realization and backlog

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

constraints in commercial buildings within the United States.
• Second quarter adjusted EBITDA margin was 16.1 p.c, down one hundred thirty basis factors from the

prior yr. Reported operating revenue for the segment was $61 million and adjusted operating

revenue, which excludes $2 million of restructuring and realignment costs, was $63 million, a four.5

p.c decrease versus the comparable interval final yr. The section reported operating

margin was 14.2 p.c, down one hundred thirty foundation points versus the prior 12 months interval. Adjusted

operating margin declined one hundred twenty basis factors to 14.7 p.c. Strong price realization and

productivity savings had been greater than offset by inflation and decrease quantity.
Measurement & Control Solutions

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

metering, community technologies, advanced infrastructure analytics and analytic instrumentation.
• Second quarter 2022 Measurement & Control Solutions revenue was $346 million, down 2.0

p.c organically versus the prior 12 months. While chip supply remains constrained, the result’s

better than our expectations because of improved chip supply within the quarter, and power in our

water quality take a look at purposes.
• Second quarter adjusted EBITDA margin was 9.8 percent, down 410 foundation factors from the prior

year. Reported working income for the section was $(5) million, and adjusted working

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

shortages, unfavorable combine and better inflation more than offset worth realization and

productiveness financial savings.
Supplemental info on Xylem’s second quarter 2022 earnings and reconciliations for certain nonGAAP gadgets is posted at www.xylem.com/investors.

About Xylem

Xylem (XYL) is a quantity one world water technology company committed to fixing important water and

infrastructure challenges with innovation. Our 17,000 numerous staff delivered revenue of $5.2

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

and resource management, and helping communities in more than one hundred fifty international locations become watersecure. Join us at www.xylem.com.
Forward-Looking Statements

This press release accommodates “forward-looking statements” inside the which 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 words “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,”

“contemplate,” “predict,” “forecast,” “likely,” “believe,” “target,” “will,” “could,” “would,” “should,”

“potential,” “may” and similar expressions or their adverse, might, however aren’t necessary to, establish

forward-looking statements. By their nature, forward-looking statements address unsure issues and

embody any statements that are not historical, similar to statements about our strategy, financial plans,
outlook, aims, plans, intentions or objectives (including these related to our social, environmental and

other sustainability goals); or handle possible or future results of operations or financial efficiency,
including statements relating to orders, revenues, working margins and earnings per share progress.
Although we consider that the expectations mirrored in any of our forward-looking statements are

reasonable, actual outcomes might differ materially from these projected or assumed in any of our forwardlooking statements. diaphragm seal and results of operations, in addition to any forwardlooking statements, are topic to change and to inherent risks and uncertainties, lots of which are

past our management. Additionally, many of those risks and uncertainties are, and will proceed to be,
amplified by impacts from the war between Russia and Ukraine, in addition to the continuing coronavirus

(“COVID-19”) pandemic and related macroeconomic circumstances (including inflation). Important elements

that might trigger our precise results, efficiency and achievements, or trade results to differ

materially from estimates or projections contained in or implied by our forward-looking statements

embrace, among others, the following: the impression of general trade and common financial circumstances,
including industrial, governmental, and private and non-private sector spending and the strength of the

residential and industrial real estate markets, on economic activity and our operations; geopolitical

events, including the war between Russia and Ukraine, and regulatory, financial and other risks

associated with our world sales and operations, including with respect to home content material

requirements applicable to projects with governmental funding; continued uncertainty across the

ongoing COVID-19 pandemic’s magnitude, duration and impacts on our business, operations, progress,
and monetary situation; actual or potential different epidemics, pandemics or world well being crises;
availability, scarcity or delays in receiving digital parts (in particular, semiconductors), elements,
and uncooked materials from our provide chain; manufacturing and operating cost will increase as a outcome of

macroeconomic conditions, including inflation, provide chain shortages, logistics challenges, tight labor

markets, prevailing worth modifications, tariffs and other components; demand for our products; disruption,
competitors or pricing pressures within the markets we serve; cybersecurity incidents or other disruptions of

information know-how methods on which we rely, or involving our merchandise; disruptions in operations at

our services or that of third events upon which we rely; capacity to retain and attract senior administration

and different various and key talent, in addition to competitors for total talent and labor; problem predicting

our financial outcomes; defects, safety, warranty and liability claims, and remembers with respect to merchandise;
availability, regulation or interference with radio spectrum utilized by sure of our merchandise; uncertainty

associated to restructuring and realignment actions and related costs and financial savings; our capability to proceed

strategic investments for growth; our capacity to successfully establish, execute and integrate acquisitions;
volatility in served markets or impacts on enterprise and operations as a result of climate conditions, together with

the results of local weather change; fluctuations in overseas forex change rates; our ability to borrow or

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

our needs; threat of future impairments to goodwill and other intangible assets; failure to comply with, or

adjustments in, legal guidelines or laws, together with these pertaining to anti-corruption, information privacy and security,
export and import, competitors, and the surroundings and climate change; adjustments in our effective tax

charges or tax bills; legal, governmental or regulatory claims, investigations or proceedings and

related contingent liabilities; and different factors set forth under “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 launch relating to our environmental and other

sustainability plans and goals are not a sign 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 associated statements may be based on requirements

for measuring progress which are nonetheless developing, inner controls and processes that proceed to evolve,
and assumptions that are subject to change sooner or later. All forward-looking statements made herein

are based on info at present out there to us as of the date of this press launch. We undertake no

obligation to publicly replace or revise any forward-looking statements, whether or not because of new

info, future events or otherwise, besides as required by regulation


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