Xylem Reports Second Quarter 2022 Results

FEATUREDMINING

Xylem Reports Second Quarter 2022 Results

by Brenna ShumbamhiniAugust 2, 2022

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Robust continuing demand drove robust natural orders progress: 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 $0.66

• Adjusted EBITDA margin exceeded guidance by 160 foundation factors

• Raising full-year organic revenue guidance to a range of 8% to 10% from 4% to

6%, and adjusted EPS to a variety of $2.50 to $2.70 from $2.40 to $2.70

Washington, D.C., August 2, 2022 – Xylem Inc. (NYSE: XYL), a leading global water technology

company dedicated to fixing the world’s most challenging water issues, at present reported second quarter

revenue of $1.four billion, surpassing earlier steering in each business segment. Strong continued

global 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 %, better than the Company’s previous steerage and reflecting a year-over-year

lower of 70 basis points. Inflation and the impression of constant chip shortages drove the margin

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

income of $112 million, or $0.62 per share, and adjusted net revenue of $120 million, or $0.sixty six per share,
which excludes the impact of restructuring, realignment and particular charges.
“The group delivered very strong second quarter performance on all key metrics, and nicely ahead of our

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

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

reasonable easing in chip provide constraints.”

“On the energy of strong backlog and orders growth, and the team’s demonstrated success mitigating

the results of inflation, we’re raising our full-year guidance on revenue and earnings. This further

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

Outlook

Xylem now expects full-year 2022 natural revenue development to be within the range of 8 to 10 %, and three

to 5 percent on a reported basis. This represents an increase from the Company’s previous full-year

natural income steerage of 4 to six percent, and 1 to three p.c on a reported basis. Full-year 2022

adjusted EBITDA margin is now expected to be in the range of 16.5 to 17.0 %, raising the low end

of the previous vary of sixteen.0 to 17.0 %. This ends in adjusted earnings per share of $2.50 to

$2.70, elevating the low finish from the earlier vary of $2.forty to $2.70. The elevated steering displays

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

inflation and foreign 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 provides guidance solely on a non-GAAP

basis because of the inherent difficulty in forecasting certain quantities that might be included in GAAP

earnings, such as discrete tax gadgets, without unreasonable effort.
Second Quarter Segment Results

Water Infrastructure

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

supply, wastewater transport and therapy, and dewatering.
• Second quarter 2022 Water Infrastructure revenue was $589 million, a 9.0 % enhance

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

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

in the united states and Western Europe.
เกจวัดแรงดัน1บาร์ adjusted EBITDA margin was 21.four %, up 240 foundation points from the prior

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

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

14.four p.c improve versus the comparable interval final yr. Reported operating margin for

the segment was 18.three %, up 200 foundation points versus the prior yr, and adjusted

working margin was 18.eight %, up a hundred and eighty basis points versus the prior year. Strong price

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

investments.
Applied Water

Xylem’s Applied Water phase consists of its portfolio of companies in industrial, business constructing,
and residential functions.
• Second quarter 2022 Applied Water revenue was $429 million, a 7.0 % increase

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

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

constraints in commercial buildings in the United States.
• Second quarter adjusted EBITDA margin was 16.1 %, down 130 foundation points from the

prior year. Reported operating income 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

p.c lower versus the comparable period final yr. The phase reported working

margin was 14.2 p.c, down 130 basis factors versus the prior yr period. Adjusted

operating margin declined a hundred and twenty basis factors to 14.7 p.c. Strong worth realization and

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

Xylem’s Measurement & Control Solutions section consists of its portfolio of businesses in smart

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 12 months. While chip supply stays constrained, the result’s

higher than our expectations because of improved chip provide within the quarter, and strength in our

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

year. Reported operating income for the phase was $(5) million, and adjusted operating

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

shortages, unfavorable mix and better inflation greater than offset worth realization and

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

Xylem (XYL) is a number one global water know-how firm committed to solving crucial water and

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

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

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

This press release accommodates “forward-looking statements” within 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 unfavorable, could, however aren’t essential to, identify

forward-looking statements. By their nature, forward-looking statements handle unsure matters and

embrace any statements that are not historic, similar to statements about our technique, monetary plans,
outlook, objectives, plans, intentions or objectives (including these associated to our social, environmental and

other sustainability goals); or address potential or future results of operations or monetary performance,
together with statements referring to orders, revenues, operating margins and earnings per share development.
Although we imagine that the expectations mirrored in any of our forward-looking statements are

affordable, actual outcomes could differ materially from these projected or assumed in any of our forwardlooking statements. Our future monetary situation and outcomes of operations, in addition to any forwardlooking statements, are subject to alter and to inherent dangers and uncertainties, a lot of that are

past our management. Additionally, many of these dangers and uncertainties are, and will proceed to be,
amplified by impacts from the warfare between Russia and Ukraine, as well as the continued coronavirus

(“COVID-19”) pandemic and associated macroeconomic conditions (including inflation). Important components

that could cause our actual outcomes, performance and achievements, or industry outcomes to vary

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

include, amongst others, the following: the influence of general business and general economic circumstances,
together with industrial, governmental, and public and private sector spending and the strength of the

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

events, together with the warfare between Russia and Ukraine, and regulatory, economic and different dangers

related to our international sales and operations, together with with respect to domestic content material

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

ongoing COVID-19 pandemic’s magnitude, length and impacts on our business, operations, development,
and financial situation; precise or potential other epidemics, pandemics or world health crises;
availability, scarcity or delays in receiving digital parts (in explicit, semiconductors), elements,
and raw supplies from our provide chain; manufacturing and working price will increase because of

macroeconomic conditions, together with inflation, provide chain shortages, logistics challenges, tight labor

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

info expertise systems on which we rely, or involving our products; disruptions in operations at

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

and different diverse and key expertise, as nicely as competition for overall expertise and labor; difficulty predicting

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

associated to restructuring and realignment actions and related expenses and financial savings; our capacity to proceed

strategic investments for growth; our capacity to successfully identify, execute and combine acquisitions;
volatility in served markets or impacts on enterprise and operations as a result of weather situations, together with

the results of local weather change; fluctuations in international forex trade charges; our capability to borrow or

refinance our present indebtedness and uncertainty across the availability of liquidity sufficient to satisfy

our needs; threat of future impairments to goodwill and different intangible belongings; failure to adjust to, or

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

charges or tax expenses; authorized, governmental or regulatory claims, investigations or proceedings and

associated contingent liabilities; and different components set forth under “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 other statements on this press release relating to our environmental and other

sustainability plans and targets usually 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, historical, current, and

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

for measuring progress which are still creating, inside controls and processes that proceed to evolve,
and assumptions which are topic to alter sooner or later. All forward-looking statements made herein

are based on info currently available 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 otherwise, except as required by regulation

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