Robust continuing demand drove strong 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 $0.62, adjusted earnings per share of $0.66
• Adjusted EBITDA margin exceeded guidance by 160 basis points
• Raising full-year organic revenue guidance to a range of 8% to 10% from 4% to
6%, and adjusted EPS to a range 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 solving the world’s most challenging water issues, today reported second quarter
revenue of $1.4 billion, surpassing previous guidance in each business segment. Strong continued
global demand drove orders and backlog growth across the portfolio.
Second quarter adjusted earnings before interest, tax, depreciation and amortization (EBITDA) margin
was 16.6 percent, better than the Company’s previous guidance and reflecting a year-over-year
decrease of 70 basis points. Inflation and the impact of continuing chip shortages drove the margin
decline, exceeding the benefits of price realization and productivity savings. Xylem generated net
income of $112 million, or $0.62 per share, and adjusted net income of $120 million, or $0.66 per share,
which excludes the impact of restructuring, realignment and special charges.
“The team delivered very strong second quarter performance on all key metrics, and well ahead of our
guidance for the quarter,” said Patrick Decker, Xylem president and CEO. “The result reflects our
commercial momentum on continuing underlying demand, disciplined operational execution, and a
moderate easing in chip supply constraints.”
“On the strength of robust backlog and orders growth, and the team’s demonstrated success mitigating
the effects of inflation, we are raising our full-year guidance on revenue and earnings. This further
reinforces our longer-term growth and value creation thesis for Xylem.”
Outlook
Xylem now expects full-year 2022 organic revenue growth to be in the range of 8 to 10 percent, and 3
to 5 percent on a reported basis. This represents an increase from the Company’s previous full-year
organic revenue guidance of 4 to 6 percent, and 1 to 3 percent on a reported basis. Full-year 2022
adjusted EBITDA margin is now expected to be in the range of 16.5 to 17.0 percent, raising the low end
of the previous range of 16.0 to 17.0 percent. This results in adjusted earnings per share of $2.50 to
$2.70, raising the low end from the previous range of $2.40 to $2.70. The increased guidance reflects
strong demand, gradual easing of supply chain constraints and price realization partially offset by
inflation and foreign 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 provides guidance only on a non-GAAP
basis due to the inherent difficulty in forecasting certain amounts that would be included in GAAP
earnings, such as discrete tax items, without unreasonable effort.
Second Quarter Segment Results
Water Infrastructure
Xylem’s Water Infrastructure segment consists of its portfolio of businesses serving clean water
delivery, wastewater transport and treatment, and dewatering.
• Second quarter 2022 Water Infrastructure revenue was $589 million, a 9.0 percent increase
organically compared with second quarter 2021. This robust growth was driven by strong price
realization, industrial dewatering demand, and healthy activity in our wastewater utility business
in the U.S. and Western Europe.
• Second quarter adjusted EBITDA margin was 21.4 percent, up 240 basis points from the prior
year. Reported operating income for the segment was $108 million. Adjusted operating income
for the segment, which excludes $3 million of restructuring and realignment, was $111 million, a
14.4 percent increase versus the comparable period last year. Reported operating margin for
the segment was 18.3 percent, up 200 basis points versus the prior year, and adjusted
operating margin was 18.8 percent, up 180 basis points versus the prior year. Strong price
realization, volume, and productivity savings more than offset inflation and strategic
investments.
Applied Water
Xylem’s Applied Water segment consists of its portfolio of businesses in industrial, commercial building,
and residential applications.
• Second quarter 2022 Applied Water revenue was $429 million, a 7.0 percent increase
organically year-over-year. The segment delivered strong price realization and backlog
execution in industrial and residential end markets, partially offset by continued supply chain
constraints in commercial buildings in the United States.
• Second quarter adjusted EBITDA margin was 16.1 percent, down 130 basis points from the
prior year. Reported operating income for the segment was $61 million and adjusted operating
income, which excludes $2 million of restructuring and realignment costs, was $63 million, a 4.5
percent decrease versus the comparable period last year. The segment reported operating
margin was 14.2 percent, down 130 basis points versus the prior year period. Adjusted
operating margin declined 120 basis points to 14.7 percent. Strong price realization and
productivity savings were more than offset by inflation and lower volume.
Measurement & Control Solutions
Xylem’s Measurement & Control Solutions segment consists of its portfolio of businesses in smart
metering, network technologies, advanced infrastructure analytics and analytic instrumentation.
• Second quarter 2022 Measurement & Control Solutions revenue was $346 million, down 2.0
percent organically versus the prior year. While chip supply remains constrained, the result is
better than our expectations due to improved chip supply in the quarter, and strength in our
water quality test applications.
• Second quarter adjusted EBITDA margin was 9.8 percent, down 410 basis points from the prior
year. Reported operating income for the segment was $(5) million, and adjusted operating
income, which excludes $3 million of restructuring and realignment costs and $1 million of
special charges, was $(1) million, a 108 percent decrease versus the comparable period last
year. The Measurement & Control Solutions segment reported operating margin was (1.4)
percent, down 490 basis points versus the prior year period. Adjusted operating margin of (0.3)
percent decreased 380 basis points over the prior year period. Volume declines from chip
shortages, unfavorable mix and higher inflation more than offset price realization and
productivity savings.
Supplemental information on Xylem’s second quarter 2022 earnings and reconciliations for certain nonGAAP items is posted at www.xylem.com/investors.
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About Xylem
Xylem (XYL) is a leading global water technology company committed to solving critical water and
infrastructure challenges with innovation. Our 17,000 diverse employees delivered revenue of $5.2
billion in 2021. We are creating a more sustainable world by enabling our customers to optimize water
and resource management, and helping communities in more than 150 countries become watersecure. Join us at www.xylem.com.
Forward-Looking Statements
This press release contains “forward-looking statements” within 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 similar expressions or their negative, may, but are not necessary to, identify
forward-looking statements. By their nature, forward-looking statements address uncertain matters and
include any statements that are not historical, such as statements about our strategy, financial plans,
outlook, objectives, plans, intentions or goals (including those related to our social, environmental and
other sustainability goals); or address possible or future results of operations or financial performance,
including statements relating to orders, revenues, operating margins and earnings per share growth.
Although we believe that the expectations reflected in any of our forward-looking statements are
reasonable, actual results could differ materially from those projected or assumed in any of our forwardlooking statements. Our future financial condition and results of operations, as well as any forwardlooking statements, are subject to change and to inherent risks and uncertainties, many of which are
beyond our control. Additionally, many of these risks and uncertainties are, and may continue to be,
amplified by impacts from the war between Russia and Ukraine, as well as the ongoing coronavirus
(“COVID-19”) pandemic and related macroeconomic conditions (including inflation). Important factors
that could cause our actual results, performance and achievements, or industry results to differ
materially from estimates or projections contained in or implied by our forward-looking statements
include, among others, the following: the impact of overall industry and general economic conditions,
including industrial, governmental, and public and private sector spending and the strength of the
residential and commercial real estate markets, on economic activity and our operations; geopolitical
events, including the war between Russia and Ukraine, and regulatory, economic and other risks
associated with our global sales and operations, including with respect to domestic content
requirements applicable to projects with governmental funding; continued uncertainty around the
ongoing COVID-19 pandemic’s magnitude, duration and impacts on our business, operations, growth,
and financial condition; actual or potential other epidemics, pandemics or global health crises;
availability, shortage or delays in receiving electronic components (in particular, semiconductors), parts,
and raw materials from our supply chain; manufacturing and operating cost increases due to
macroeconomic conditions, including inflation, supply chain shortages, logistics challenges, tight labor
markets, prevailing price changes, tariffs and other factors; demand for our products; disruption,
competition or pricing pressures in the markets we serve; cybersecurity incidents or other disruptions of
information technology 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 management
and other diverse and key talent, as well as competition for overall talent and labor; difficulty predicting
our financial results; defects, security, warranty and liability claims, and recalls with respect to products;
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 continue
strategic investments for growth; our ability to successfully identify, execute and integrate acquisitions;
volatility in served markets or impacts on business and operations due to weather conditions, including
the effects of climate change; fluctuations in foreign currency exchange rates; our ability to borrow or
refinance our existing indebtedness and uncertainty around the availability of liquidity sufficient to meet
our needs; risk of future impairments to goodwill and other intangible assets; failure to comply with, or
changes in, laws or regulations, including those pertaining to anti-corruption, data privacy and security,
export and import, competition, and the environment and climate change; changes in our effective tax
rates or tax expenses; legal, governmental or regulatory claims, investigations or proceedings and
associated contingent liabilities; and other factors set forth under “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 in this press release regarding our environmental and other
sustainability plans and goals are not an indication that these statements are necessarily material 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 based on standards
for measuring progress that are still developing, internal controls and processes that continue to evolve,
and assumptions that are subject to change in the future. All forward-looking statements made herein
are based on information currently available to us as of the date of this press release. We undertake no
obligation to publicly update or revise any forward-looking statements, whether as a result of new
information, future events or otherwise, except as required by law
