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 development: 1% on a reported
basis, 6% organically
• Revenue of $1.four 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 points
• Raising full-year organic income guidance to a variety 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
firm dedicated to fixing the world’s most challenging water issues, today reported second quarter
revenue of $1.4 billion, surpassing earlier guidance in each enterprise phase. Strong continued
international demand drove orders and backlog growth across the portfolio.
Second quarter adjusted earnings before interest, tax, depreciation and amortization (EBITDA) margin
was sixteen.6 %, higher than the Company’s previous steerage and reflecting a year-over-year
decrease of 70 basis factors. Inflation and the impact of continuing chip shortages drove the margin
decline, exceeding the benefits of worth realization and productivity financial savings. Xylem generated web
income of $112 million, or $0.sixty two per share, and adjusted internet income of $120 million, or $0.66 per share,
which excludes the influence of restructuring, realignment and special charges.
“The team delivered very sturdy second quarter performance on all key metrics, and well ahead of our
steering for the quarter,” mentioned Patrick Decker, Xylem president and CEO. “The result displays our
industrial momentum on persevering with underlying demand, disciplined operational execution, and a
average easing in chip provide constraints.”
“On the power of strong backlog and orders development, and the team’s demonstrated success mitigating
the effects of inflation, we’re raising our full-year steerage on revenue and earnings. เครื่องมือวัดpressure
reinforces our longer-term development and worth creation thesis for Xylem.”
Outlook
Xylem now expects full-year 2022 organic revenue progress to be in the vary of 8 to 10 p.c, and 3
to five % on a reported foundation. This represents a rise from the Company’s earlier full-year
organic income steering of 4 to six p.c, and 1 to three percent on a reported basis. Full-year 2022
adjusted EBITDA margin is now anticipated to be in the vary of sixteen.5 to 17.0 %, raising the low finish
of the earlier vary of sixteen.0 to 17.0 p.c. This results in adjusted earnings per share of $2.50 to
$2.70, elevating the low end from the earlier vary of $2.40 to $2.70. The elevated steerage reflects
strong demand, gradual easing of supply chain constraints and worth realization partially offset by
inflation and international trade headwinds.
Further 2022 planning assumptions are included in Xylem’s second quarter 2022 earnings supplies
posted at www.xylem.com/investors. Excluding revenue, Xylem offers guidance only on a non-GAAP
basis due to the inherent difficulty in forecasting certain quantities that might be included in GAAP
earnings, such as discrete tax items, with out unreasonable effort.
Second Quarter Segment Results
Water Infrastructure
Xylem’s Water Infrastructure phase consists of its portfolio of businesses serving clean water
supply, wastewater transport and remedy, and dewatering.
• Second quarter 2022 Water Infrastructure income was $589 million, a 9.0 percent increase
organically in contrast with second quarter 2021. This robust progress was pushed by strong value
realization, industrial dewatering demand, and healthy exercise in our wastewater utility enterprise
in the us and Western Europe.
• Second quarter adjusted EBITDA margin was 21.4 percent, up 240 foundation points from the prior
yr. Reported operating income for the segment was $108 million. Adjusted operating revenue
for the phase, which excludes $3 million of restructuring and realignment, was $111 million, a
14.4 p.c increase versus the comparable interval final 12 months. Reported operating margin for
the segment was 18.three p.c, up 200 basis factors versus the prior yr, and adjusted
working margin was 18.eight %, up one hundred eighty foundation factors versus the prior 12 months. Strong worth
realization, quantity, and productivity savings greater than offset inflation and strategic
investments.
Applied Water
Xylem’s Applied Water phase consists of its portfolio of businesses in industrial, business constructing,
and residential purposes.
• Second quarter 2022 Applied Water income was $429 million, a 7.zero percent enhance
organically year-over-year. The section delivered strong worth realization and backlog
execution in industrial and residential finish markets, partially offset by continued supply chain
constraints in commercial buildings in the United States.
• Second quarter adjusted EBITDA margin was sixteen.1 p.c, down a hundred thirty basis points from the
prior 12 months. Reported working revenue for the phase was $61 million and adjusted operating
earnings, which excludes $2 million of restructuring and realignment prices, was $63 million, a four.5
percent lower versus the comparable period last 12 months. The phase reported working
margin was 14.2 p.c, down a hundred thirty basis points versus the prior yr interval. Adjusted
operating margin declined a hundred and twenty foundation points to 14.7 percent. Strong worth realization and
productivity financial savings were more than offset by inflation and decrease volume.
Measurement & Control Solutions
Xylem’s Measurement & Control Solutions segment consists of its portfolio of businesses in good
metering, community technologies, advanced infrastructure analytics and analytic instrumentation.
• Second quarter 2022 Measurement & Control Solutions income was $346 million, down 2.zero
% organically versus the prior yr. While chip supply stays constrained, the result is
higher than our expectations because of improved chip provide in the quarter, and strength in our
water quality check applications.
• Second quarter adjusted EBITDA margin was 9.8 p.c, down 410 basis points from the prior
year. Reported working income for the segment was $(5) million, and adjusted working
earnings, which excludes $3 million of restructuring and realignment prices and $1 million of
shortages, unfavorable combine and higher inflation greater than offset worth realization and
productivity savings.
Supplemental information on Xylem’s second quarter 2022 earnings and reconciliations for sure nonGAAP items is posted at www.xylem.com/investors.
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About Xylem
Xylem (XYL) is a number one global water technology firm committed to fixing crucial water and
infrastructure challenges with innovation. Our 17,000 diverse staff delivered income of $5.2
billion in 2021. We are creating a more sustainable world by enabling our prospects to optimize water
and useful resource management, and serving to communities in more than a hundred and fifty countries turn out to be watersecure. Join us at www.xylem.com.
Forward-Looking Statements
This press launch incorporates “forward-looking statements” inside 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 words “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,”
“contemplate,” “predict,” “forecast,” “likely,” “believe,” “target,” “will,” “could,” “would,” “should,”
“potential,” “may” and comparable expressions or their negative, might, but are not essential to, identify
forward-looking statements. By their nature, forward-looking statements address unsure matters and
embody any statements that are not historical, similar to statements about our strategy, monetary plans,
outlook, goals, plans, intentions or targets (including those related to our social, environmental and
different sustainability goals); or address possible or future results of operations or financial efficiency,
including statements referring 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, actual results may differ materially from those projected or assumed in any of our forwardlooking statements. Our future monetary situation and results of operations, in addition to any forwardlooking statements, are subject to alter and to inherent risks and uncertainties, a lot of that are
beyond our management. Additionally, many of these risks and uncertainties are, and may proceed to be,
amplified by impacts from the warfare between Russia and Ukraine, as properly as the ongoing coronavirus
(“COVID-19”) pandemic and associated macroeconomic circumstances (including inflation). Important components
that could cause our actual outcomes, efficiency and achievements, or industry outcomes to vary
materially from estimates or projections contained in or implied by our forward-looking statements
embrace, amongst others, the next: the influence of general business and general financial circumstances,
together with industrial, governmental, and private and non-private sector spending and the energy of the
residential and industrial real estate markets, on economic activity and our operations; geopolitical
occasions, including the warfare between Russia and Ukraine, and regulatory, economic and different dangers
associated with our world gross sales and operations, including with respect to home content material
requirements applicable to tasks with governmental funding; continued uncertainty around the
ongoing COVID-19 pandemic’s magnitude, length and impacts on our enterprise, operations, progress,
and financial condition; actual or potential different epidemics, pandemics or world well being crises;
availability, scarcity or delays in receiving digital elements (in particular, semiconductors), parts,
and uncooked materials from our supply chain; manufacturing and working value increases because of
macroeconomic situations, together with inflation, supply chain shortages, logistics challenges, tight labor
markets, prevailing worth adjustments, tariffs and other components; demand for our merchandise; disruption,
competitors or pricing pressures in the markets we serve; cybersecurity incidents or other disruptions of
info know-how systems on which we rely, or involving our merchandise; disruptions in operations at
our services or that of third events upon which we rely; ability to retain and appeal to senior management
and other diverse and key talent, in addition to competition for general expertise and labor; problem predicting
our financial results; defects, safety, guarantee and legal responsibility claims, and recollects with respect to merchandise;
availability, regulation or interference with radio spectrum utilized by certain of our products; uncertainty
related to restructuring and realignment actions and related expenses and savings; our capability to proceed
strategic investments for progress; our capability to efficiently establish, execute and integrate acquisitions;
volatility in served markets or impacts on enterprise and operations because of climate circumstances, including
the results of local weather change; fluctuations in overseas currency trade charges; our ability to borrow or
refinance our current indebtedness and uncertainty around the availability of liquidity adequate to fulfill
our wants; risk of future impairments to goodwill and other intangible property; failure to comply with, or
changes in, legal guidelines or rules, together with these pertaining to anti-corruption, knowledge privacy and safety,
export and import, competition, and the environment and local weather change; modifications in our efficient tax
rates or tax bills; authorized, governmental or regulatory claims, investigations or proceedings and
associated contingent liabilities; and different components set forth underneath “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”).
Forward-looking and different statements on this press launch relating to our environmental and different
sustainability plans and targets aren’t a sign that these statements are essentially materials to
buyers 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 could additionally be based mostly on standards
for measuring progress that are nonetheless growing, inside controls and processes that continue to evolve,
and assumptions that are topic to change in the future. All forward-looking statements made herein
are primarily based on info at present obtainable 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
information, future events or in any other case, except as required by legislation
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