Xylem Reports Second Quarter 2022 Results

by Brenna ShumbamhiniAugust 2, 2022


Robust persevering with demand drove sturdy natural orders growth: 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 steering by one hundred sixty foundation points

• Raising full-year natural income steering 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.forty 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 difficult water points, right now reported second quarter

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

global demand drove orders and backlog growth throughout the portfolio.
Second quarter adjusted earnings before interest, tax, depreciation and amortization (EBITDA) margin

was 16.6 p.c, better than the Company’s previous guidance and reflecting a year-over-year

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

decline, exceeding the advantages of worth 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 group delivered very sturdy second quarter efficiency on all key metrics, and properly forward of our

steering for the quarter,” mentioned Patrick Decker, Xylem president and CEO. “The outcome reflects our

business momentum on continuing underlying demand, disciplined operational execution, and a

moderate easing in chip provide constraints.”

“On the strength of sturdy backlog and orders development, and the team’s demonstrated success mitigating

the consequences of inflation, we’re elevating our full-year steering on revenue and earnings. This further

reinforces our longer-term growth and value creation thesis for Xylem.”


Xylem now expects full-year 2022 organic revenue growth to be within the vary of 8 to 10 percent, and three

to 5 percent on a reported foundation. This represents a rise from the Company’s previous full-year

organic income steering of 4 to 6 percent, and 1 to 3 percent 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 end

of the earlier range of 16.zero to 17.zero percent. This leads to adjusted earnings per share of $2.50 to

$2.70, raising the low end from the earlier range of $2.40 to $2.70. The elevated guidance reflects

sturdy demand, gradual easing of supply 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 materials

posted at www.xylem.com/investors. Excluding income, Xylem offers steerage only on a non-GAAP

basis due to the inherent problem in forecasting certain quantities that might 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

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

organically in contrast with second quarter 2021. This strong progress was pushed by robust price

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

in the united states and Western Europe.
• Second quarter adjusted EBITDA margin was 21.four %, up 240 foundation points from the prior

year. Reported working income for the segment was $108 million. Adjusted operating earnings

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

14.4 p.c improve versus the comparable interval last yr. Reported working margin for

the section was 18.three %, up 200 basis points versus the prior 12 months, and adjusted

operating margin was 18.eight percent, up one hundred eighty basis points versus the prior year. Strong price

realization, volume, and productiveness savings more than offset inflation and strategic

Applied Water

Xylem’s Applied Water segment consists of its portfolio of businesses in industrial, industrial constructing,
and residential applications.
• Second quarter 2022 Applied Water income was $429 million, a 7.zero % improve

organically year-over-year. The segment delivered sturdy worth realization and backlog

execution in industrial and residential finish markets, partially offset by continued provide chain

constraints in industrial buildings within the United States.
• Second quarter adjusted EBITDA margin was sixteen.1 percent, down 130 foundation factors from the

prior 12 months. Reported operating ไดอะแฟรม ซีล for the phase was $61 million and adjusted working

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

percent lower versus the comparable period last yr. The phase reported operating

margin was 14.2 %, down 130 basis factors versus the prior yr interval. Adjusted

operating margin declined a hundred and twenty basis points to 14.7 percent. Strong price realization and

productivity financial savings had been more than offset by inflation and decrease volume.
Measurement & Control Solutions

Xylem’s Measurement & Control Solutions phase consists of its portfolio of companies in good

metering, community technologies, superior infrastructure analytics and analytic instrumentation.
• Second quarter 2022 Measurement & Control Solutions revenue was $346 million, down 2.zero

% organically versus the prior yr. While chip supply stays constrained, the result’s

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

water quality check purposes.
• Second quarter adjusted EBITDA margin was 9.eight %, down 410 basis points from the prior

yr. Reported working revenue for the phase was $(5) million, and adjusted working

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

shortages, unfavorable mix and higher inflation more than offset value realization and

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

About Xylem

Xylem (XYL) is a leading international water technology firm committed to fixing critical water and

infrastructure challenges with innovation. Our 17,000 various employees delivered income of $5.2

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

and resource management, and serving to communities in more than 150 countries turn into watersecure. Join us at www.xylem.com.
Forward-Looking Statements

This press launch 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 phrases “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,”

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

“potential,” “may” and similar expressions or their negative, may, but aren’t necessary to, identify

forward-looking statements. By their nature, forward-looking statements handle uncertain issues and

include any statements that are not historic, corresponding to statements about our technique, monetary plans,
outlook, aims, plans, intentions or objectives (including these related to our social, environmental and

other sustainability goals); or address possible or future outcomes of operations or monetary efficiency,
together with statements relating to orders, revenues, operating margins and earnings per share growth.
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. Our future monetary condition and outcomes of operations, as nicely as any forwardlooking statements, are topic to change and to inherent dangers and uncertainties, a lot of that are

past our control. Additionally, many of these dangers and uncertainties are, and should continue to be,
amplified by impacts from the warfare between Russia and Ukraine, as nicely as the continuing coronavirus

(“COVID-19”) pandemic and associated macroeconomic situations (including inflation). Important elements

that would 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

embody, amongst others, the following: the influence of total trade and common economic situations,
including industrial, governmental, and public and private sector spending and the power of the

residential and business real estate markets, on financial activity and our operations; geopolitical

events, together with the warfare between Russia and Ukraine, and regulatory, financial and other risks

associated with our international sales and operations, including with respect to domestic content

necessities relevant to tasks with governmental funding; continued uncertainty across the

ongoing COVID-19 pandemic’s magnitude, period and impacts on our enterprise, operations, growth,
and monetary condition; precise or potential other epidemics, pandemics or global health crises;
availability, shortage or delays in receiving electronic parts (in particular, semiconductors), parts,
and uncooked supplies from our supply chain; manufacturing and operating cost will increase as a outcome of

macroeconomic situations, including inflation, supply chain shortages, logistics challenges, tight labor

markets, prevailing value changes, tariffs and different factors; demand for our products; disruption,
competition or pricing pressures in the markets we serve; cybersecurity incidents or other disruptions of

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

our facilities or that of third parties upon which we rely; ability to retain and attract senior administration

and different diverse and key expertise, in addition to competition for general talent and labor; difficulty predicting

our monetary results; defects, security, guarantee and liability claims, and recollects with respect to merchandise;
availability, regulation or interference with radio spectrum used by certain of our products; uncertainty

related to restructuring and realignment actions and related charges and savings; our ability to proceed

strategic investments for growth; our capacity to efficiently determine, execute and integrate acquisitions;
volatility in served markets or impacts on enterprise and operations due to weather situations, including

the consequences of local weather change; fluctuations in international currency exchange charges; our ability to borrow or

refinance our existing indebtedness and uncertainty around the availability of liquidity sufficient to fulfill

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

changes in, legal guidelines or regulations, including these pertaining to anti-corruption, information privateness and security,
export and import, competitors, and the surroundings and local weather change; adjustments in our effective tax

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

associated contingent liabilities; and other elements set forth underneath “Item 1A. Risk Factors” in our Annual

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

the Securities and Exchange Commission (“SEC”).
Forward-looking and other statements on this press launch regarding our environmental and different

sustainability plans and objectives are not an indication that these statements are essentially materials to

investors or are required to be disclosed in our filings with the SEC. In addition, historic, current, and

forward-looking social, environmental and sustainability related statements may be primarily based on requirements

for measuring progress which may be nonetheless developing, internal controls and processes that continue to evolve,
and assumptions which are subject to change in the future. All forward-looking statements made herein

are primarily based on information presently obtainable to us as of the date of this press release. We undertake no

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

info, future events or in any other case, besides as required by legislation