Slide 1: 2023 First Quarter Results & Earnings
2023 First Quarter Results & Earnings
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation 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,” “int
Slide 3: Q1 2023 Performance Summary
Q1 2023 Performance Summary ($ in millions, unless otherwise noted) 2023 Reported Q1 Adj* Q1 2023 Reported Q1 Adj* Q1 Xylem Consolidated Measurement & Control Solutions Revenue $1,448 $1,448 Revenue $406 $406 Overall Growth 14% 14% Overall Growth 29% 29% Constant Currency* Growth 17% Constant Curren
Slide 4: CEO Patrick Decker commentary on Q1 performance
“ The team delivered very strong first quarter performance, well ahead of expectations. Market demand remains robust, reflected in strong backlog growth and book-to-bill greater than one across all segments. We continue to see solid results on revenue and margin due to commercial momentum, price rea
Slide 5: Q1 2023 Xylem Performance
REVENUE ADJUSTED ADJUSTED EPS* EBITDA MARGIN* $1,448 16.3% $0.72 $1,272 14.2% Q1 2023 $0.47 XYLEM PERFORMANCE Organic* +210 bps +53% 17% Q1 2022 Q1 2023 Q1 2022 Q1 2023 Q1 2022 Q1 2023 Adj. Op Margin* 9.1% 11.5% KEY PERFORMANCE DRIVERS • Organic* revenue growth of 17% mainly driven by strong demand,
Slide 6: Q1 2023 Measurement & Control Solutions Performance
Q1 2023 Measurement & Control Solutions Performance REVENUE Highlights Organic Growth* by Application $406 • Organic* orders down 17% lapping prior year compare of 25% growth. $314 Water 29% Strong Advanced Metering Infrastructure (AMI) demand continues with a Energy 46% book-to-bill ratio of 1.1 •
Slide 7: Q1 2023 Water Infrastructure Performance
Q1 2023 Water Infrastructure Performance REVENUE Highlights Organic Growth* by End Market $589 • Organic* orders up 1%, lapping 12% growth last year, with book-to-bill ratio $533 Utilities 14% of 1.1 Industrial 18% • Utilities growth driven by price and strong opex demand particularly in the US and
Slide 8: Q1 2023 Applied Water Performance
Q1 2023 Applied Water Performance REVENUE Highlights Organic Growth* by End Market $453 • Organic* orders down 1%; demand is resilient with book-to-bill ratio of 1.1 $425 Industrial 8% Commercial 16% • Industrial growth led by price realization and project execution on healthy Residential (2%) deman
Slide 9: Xylem Financial Position
Xylem Financial Position Capital Summary CASH DRIVERS March 31, 2023 $944 $29 $837 Cash & Cash Equivalents $ 837 ($19) ($49) Debt $ 1,881 ($68) Net Debt $ 1,044 Shareholder’s Equity $ 3,578 Net Capital $ 4,622 Net Debt to Net Capital 23% Q4 2022 Operating Capital Dividends & Share Other Q1 2023 Cash
Slide 10: Continued Commercial and Operational Momentum to Deliver our 2023 Commitments
Continued Commercial and Operational Momentum to Deliver our 2023 Commitments 1. SERVING OUR CUSTOMERS WITH DIFFERENTIATED OFFERINGS • Strong value proposition for driving digital adoption • Simplifying our business to drive speed to customer 2. RELENTLESS COMMITMENT TO DELIVER MARGIN EXPANSION • Ac
Slide 11: FY 2023 End Market Commentary
FY 2023 End Market Commentary See appendix for end market key facts HEADLINE HRE • Industrial dewatering demand is healthy, driven by mining demand in Latin America and strategic • Continued Opex strength due to mission critical applications and growth investments large install base in North America
Slide 12: FY 2023 and Q2 2023 Guidance & Key Assumptions
REVENUE ADJUSTED ADJUSTED EPS* FCF EBITDA MARGIN* CONVERSION*† $5.9B to 17.5% to $3.15 to $5.5B $6.0B 18.0% ~100% 17.0% $3.35 FY 2023 and Q2 2023 $2.85 80% Guidance & Key Organic* Assumptions 8% to 9% Full year guidance does not reflect the planned acquisition of Evoqua, announced January 23, 2023 F
Slide 13: Key Takeaways
1 Outperformed Q1 with double digit growth and strong margin expansion 2 Raising full-year organic revenue and adjusted EPS guidance for 2023 Key Takeaways 3 Focused on successful integration of Evoqua post-close 4 Xylem investment thesis is strong: creating economic and social value Q1 2023 Results
Slide 14: Appendix
Appendix
Slide 15: End Market Key Facts
End Market Key Facts Industrial (~35% of Revenue) Utilities ~50% Revenue • Oil & Gas revenue: ~1% of total Xylem • Mining revenue: ~5% of total Xylem Wastewater Utilities • “Light” industrial revenue: ~25% of total Xylem • Revenue: ~50% of Xylem utilities revenue • XYL businesses: all 3 segments (~4
Slide 16: Foreign Exchange Translation Sensitivity
Foreign Exchange Translation Sensitivity Foreign Exchange Translation • The table below illustrates the impact of FX fluctuations on Xylem’s reported results Currency FY 2023 Guidance Rate Revenue Impact* on FY 2023 EPS Impact* on FY 2023 of 5% Decrease in Rate of 5% Decrease in Rate Euro 1.08 ($51M
Slide 17: Xylem Inc. Non-GAAP Measures
Appendix Xylem Inc. Non-GAAP Measures Management reviews key performance indicators including revenue, gross margins, segment operating income and margins, orders growth, working capital and backlog, among others. In addition, we consider certain non-GAAP (or "adjusted") measures to be useful to man
Slide 18: Reported vs. Organic & Constant Currency Revenue
Xylem Inc. Non-GAAP Reconciliation Appendix Reported vs. Organic & Constant Currency Revenue ($ Millions) (As Reported - GAAP) (As Adjusted - Organic) Constant Currency (A) (B) (C) (D) (E) = B+C+D (F) = E/A (G) = (E - C) / A Change % Change Acquisitions / Change % Change Revenue Revenue 2023 v. 2022
Slide 19: Adjusted Operating Income
Xylem Inc. Non-GAAP Reconciliation Appendix Adjusted Operating Income ($ Millions) Q1 2023 2022 Total Revenue • Total Xylem 1,448 1,272 • Water Infrastructure 589 533 • Applied Water 453 425 • Measurement & Control Solutions 406 314 Operating Income (Loss) • Total Xylem 131 111 • Water Infrastructur
Slide 20: Adjusted Operating Income
Xylem Inc. Non-GAAP Reconciliation Appendix Adjusted Operating Income ($ Millions) Q1 2023 2022 Special Charges • Total Xylem 25 1 • Water Infrastructure - - • Applied Water - - • Measurement & Control Solutions 2 - • Total Segments 2 - Restructuring & Realignment Costs • Total Xylem 11 4 • Water In
Slide 21: Adjusted Diluted EPS
Xylem Inc. Non-GAAP Reconciliation Appendix Adjusted Diluted EPS ($ Millions, except per share amounts) Q1 2023 Q1 2022 As Reported Adjustments Adjusted As Reported Adjustments Adjusted Total Revenue 1,448 - 1,448 1,272 - 1,272 Operating Income 131 36 a 167 111 5 a 116 Operating Margin 9.0% 11.5% 8.
Slide 22: EBITDA and Adjusted EBITDA by Quarter
Xylem Inc. Non-GAAP Reconciliation Appendix EBITDA and Adjusted EBITDA by Quarter ($ Millions) Xylem Inc. Non-GAAP Reconciliation 2023 EBITDA and Adjusted EBITDA by Quarter ($ Millions) Q1 Q2 Q3 Q4 Total Water Infrastructure Net Income 99 99 Net Income margin 6.8% 6.8% 2023 Depreciation 28 28 Q1 Q2
Slide 23: EBITDA and Adjusted EBITDA by Quarter
Xylem Inc. Non-GAAP Reconciliation Xylem Inc. Non-GAAP Reconciliation Appendix EBITDA and Adjusted EBITDA by Quarter ($ Millions) EBITDA and Adjusted EBITDA by Quarter ($ Millions) Applied Water Measurement & Control Solutions 2023 2023 Q1 Q2 Q3 Q4 Total Q1 Q2 Q3 Q4 Total Operating Income 83 83 Oper
Slide 24: Net Cash - Operating Activities vs. Free Cash Flow
Xylem Inc. Non-GAAP Reconciliation Appendix Net Cash - Operating Activities vs. Free Cash Flow ($ Millions) Q1 2023 2022 Net Cash - Operating Activities ($19) ($81) Capital Expenditures - PP&E (33) (31) Capital Expenditures - Software (16) (18) Capital Expenditures (49) (49) Cash paid in excess of t
Slide 25: Thank you. Q1 2023 Earnings & Results
Andrea van der Berg, VP, Investor Relations Kristina Lee, Director, Investor Relations Jacob Frisbee, IR Associate, Finance Leadership Development Program Thank you. NYSE: XYL Xylem Investor Relations Website Q1 2023 Earnings & Results LinkedIn | Twitter | Facebook | YouTube | Instagram