Xylem Inc. · NYSE:XYL
Xylem — Investor Day (October 2011)
106 slides from Xylem's investor day presentation, Oct 13, 2011
Slide 1: Investor & Analyst Day October 13, 2011
Investor & Analyst Day October 13, 2011
Slide 2: Agenda
Agenda Welcome Phil De Sousa, IRO 1:30 pm Introduction to Xylem Gretchen McClain, CEO & President 1:45 pm Financial Review Michael Speetzen, CFO 2:30 pm Break Product Displays 3:00 pm Application Leadership Gretchen McClain 3:15 pm Transport & Treatment Michael Kuchenbrod, President Water Solutions
Slide 3: Forward Looking Statements
Forward Looking Statements 3 The Company undertakes no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise. Economic, political and social conditions in the countries in which we conduct our businesses; Changes in U.S. or Internatio
Slide 4: Introduction to Xylem
Introduction to Xylem Gretchen McClain, CEO & President
Slide 5: Overview
Overview 5 ~$3.8B Company Uniquely Positioned... in the attractive water industry Leading Brands and Technologies... in a water-focused portfolio Diverse Customer Base... across industries and geographies World-Class Distribution Channels... reaching 150+ countries Large Installed Base... driving re
Slide 6: Global Water Industry: $500B
Global Water Industry: $500B 6 Building Services 10% of Use Industrial Water 20% of Use Irrigation 70% of Use Applied Water Water Treatment Water Transport Water Sources Wastewater Treatment Wastewater Transport Water Infrastructure Test Test Depleting Water Supply Tightening Regulation Aging Infras
Slide 7: $500B Global Water Industry: Value Chain View
$500B Global Water Industry: Value Chain View 7 Public Utility ~250,000 Utilities Globally Water Infrastructure ~5%-10% EBIT Margin Design & Build ~8,000 EPC Firms Globally ~2%-5% EBIT Margin Equipment & Services ~20,000 Companies Globally Fragmented industry Installed base important Customers rely
Slide 8: Equipment & Services: $280B...Growing 3-5%
Equipment & Services: $280B...Growing 3-5% 8 Xylem Focus Predominately Commodity-like Equipment & Service Pipes, valves, fittings and low value pumps Low-value services Low or no differentiation Generally either capital or labor intensive Generally single-digit margins... some pockets of higher prof
Slide 9: Xylem Serves Diverse Growing Markets
Xylem Serves Diverse Growing Markets 9 ? Europe 39% ? US 35% ? Asia Pac 11% ? Other 15% End Market Mix* Geographical Mix* Mkt Growth Rates '10 -'15 Developed 1 - 3% Emerging 8 - 10+% Global 3 - 5% ? Public Utility 40% ? Industrial 35% ? Commercial 13% ? Residential 9% ? Agricultural 3% Global Market
Slide 10: Balanced End Markets With Strong Fundamentals
Balanced End Markets ... 10 .... With Strong Fundamentals End Market % of Xylem Revenues* Cycle Fundamentals Public Utility 40% Non-Cyclical Tariffs protected & growing ~70% for maintenance capital Strong aftermarket & replacement Industrial 35% Less Cyclical/ Late Cycle Products critical to operati
Slide 11: A Global Leader With All the Tools Necessary to Continue Robust Growth
A Global Leader... 11 .... With All the Tools Necessary to Continue Robust Growth
Slide 12: Industry Leading Positions
Industry Leading Positions 12 Transport & Treatment Applications Test Applications Building Services Applications Industrial Applications Irrigation Applications #1 #2 #2 #2 #3 Revenue by Application* ? Transport 44% ? Building Services 22% ? Industrial Water 15% ? Treatment 12% ? Test 4% ? Irrigati
Slide 13: How Does Xylem Create Value?
How Does Xylem Create Value? 13 Unique Global Assets High Performing Culture + In-Depth Customer Knowledge + Premium application solutions company solving our customers' most challenging water problems
Slide 14: Unique Global Assets
Unique Global Assets... 14 Leading Brands Diverse Product Portfolio World-Class Distribution Channels Diverse Customer Base Robust Aftermarket Opportunities Key Partnerships .... Provide Unrivaled Advantage High Performing Culture Unique Global Assets In-Depth Customer Knowledge
Slide 15: Key Partnerships
Technology Partnerships Industry Relationships Key Partnerships... 15 .... Improve Capital Efficiency and Extend Our Reach High Performing Culture Unique Global Assets In-Depth Customer Knowledge Reduces capital required Expands product offerings Extends distribution Influences regulators Creates de
Slide 16: Applications Expertise
Applications Expertise... 16 Water Infrastructure Water Infrastructure Water Infrastructure Applied Water Applied Water Applied Water Water as % of Total Revs Transport Treatment Test Res/Comm'l Industrial Irrigation Xylem >90% Danaher ~15% Franklin ~85% Grundfos ~85% KSB ~25% Pentair ~50% Siemens ~
Slide 17: A High Performing Culture
A High Performing Culture... 17 Strong Leadership Team & Management System Accountability & Execution Excellence Experience... Knowledge... Relentless Drive to Improve High Performing Culture Unique Global Assets In-Depth Customer Knowledge Innovative & Adaptive People
Slide 18: Xylem Management Team
Xylem Management Team 18 Gretchen McClain CEO & President Operational Leaders Mike Kuchenbrod President Water Solutions Chris McIntire President Analytics Ken Napolitano President Residential & Commercial Water Bob Wolpert President Flow Control Functional Leaders Angela Buonocore Chief Communicatio
Slide 19: A Proven Management System
Management System Leadership Development A Proven Management System 19 Monthly Performance Reviews High Performing Culture Unique Global Assets In-Depth Customer Knowledge Identify, recruit and retain top-tier talent Current talent pool provides for strong jump-off point Focused investment on people
Slide 20: Commercial Excellence Program
People Process Initiatives Commercial Excellence 20 Program Established... Significant Opportunities High Performing Culture Unique Global Assets In-Depth Customer Knowledge Competencies & capabilities Right people in right jobs Best practice sharing Built playbook to drive growth Repeatable commerc
Slide 21: How We Drive Price
Price Example 21 How We Drive Price Sample Analysis Drive change Analysis Leadership priority Dedicated resources Measure results Helping Us Achieve 1-2 Points of Price per Year High Performing Culture Unique Global Assets In-Depth Customer Knowledge
Slide 22: Operational Excellence: 2011 Actions, Initiatives, Results
2011 Actions Initiatives Results Operational Excellence 22 Well-Established Programs... Continue to Drive Results High Performing Culture Unique Global Assets In-Depth Customer Knowledge On time delivery and lead time improvement Simplified / increased supply chain penetration Expanded low cost regi
Slide 23: In Depth Customer Knowledge
In Depth Customer Knowledge 23 XYL Can Provide Unique Application Solutions High Performing Culture Unique Global Assets In-Depth Customer Knowledge Understand Customer's Value Chain Case Studies We'll Discuss Top Lift Station Adaptive N Pump Flygt Experior UF Membranes Advanced Oxidation Process En
Slide 24: Positioned as the Water Applications Leader
Positioned as the Water Applications Leader 24 Systems Application Solutions Components Issues Are Complex... Few Companies Can Address All Water Scarcity Environmental Protection Infrastructure Needs Population Growth Urbanization Unique Knowledge - Transport, Treatment, Test
Slide 25: Xylem has a Focused Growth Plan
Xylem has a Focused Growth Plan 25 Emerging Markets Xylem Growth Platforms Organic Growth Long-term market growth rate 3-5% Developed market growth 1-3% Emerging markets growth 8-10+% Expand the core Geographic expansion Acquisition Strategy Disciplined bolt-on approach Build on existing growth plat
Slide 26: Organic Growth Strategy
Organic Growth Strategy 26 Replicate Leadership Positions Across Global & Local Footprint Innovative Application Solutions Leveraging Leading Brands with Global Water Partners Over 150 Countries Over 4,500 Sales Reps Established Leadership U.S. Europe Focal Areas for Replication Emerging Markets Und
Slide 27: Growing Xylem Recurring Revenues
Growing Xylem Recurring Revenues 16% of Xylem revenue Strong global presence 120+ owned service centers 600+ service employees Extensive channel partner network Revenue growth 8.5% CAGR '06-'10 despite economic downturn $370 $382 $396 $433 $512 Approximately 22% of Xylem revenue Installed base drive
Slide 28: Emerging Market Growth Strategy
Emerging Market Growth Strategy 28 Market drivers: $47B Central Gov't investment in next 5 years Westward & 2nd tier city expansion Xylem focus: WW treatment and flood control projects Localized and decentralized treatment systems Western Expansion Market drivers: India planning to add 30+ power pla
Slide 29: Analytics & Dewatering Growth Strategy
Analytics & Dewatering Growth Strategy 29 Strong Existing Business in Flygt Dewatering pumps Strategic Focus: Infrastructure projects Mining Emerging markets Emergency response services Attractive & growing market "Smart" technology Strategic focus Expand capabilities Leverage distribution Analytica
Slide 30: Xylem's Sustainable Infrastructure Initiatives
Xylem's Sustainable Infrastructure Initiatives... Field surveys ? by over 50% 25% ? in plant opex from energy savings Environmental Water Quality Networks Energy Efficient Secondary Treatment Measurable Sustainable Benefits Shale Gas Fracking Water Management Trucking costs ? by 70% Contaminant regu
Slide 31: Xylem Acquisition Strategy
Xylem Growth Platforms Xylem Acquisition Strategy Future Acquisition Focus Growth Platform Expansion Through Bolt-on Acquisitions 31 Bolt on acquisitions in growth platforms Product gap fillers Channel build-out Targeted deployment of up to $300M / year Strict financial & strategic filters Focused o
Slide 32: Business Performance: Long-Term Targets
Business Performance: Long-Term Targets Top Line Growth Gross margins > 40% Segment margin expansion of 50 - 75 bps / yr Organic growth of 4 - 6% Acquisitions add 1 - 2 points of growth Emerging market revenue >20% of sales Free cash flow at ~100% of net income ROIC in mid to upper teens Earnings Gr
Slide 33: Financial Review
Financial Review Mike Speetzen, CFO
Slide 34: Strong Track Record of Financial Performance
Strong Track Record of Financial Performance 34 Solid financial performance, well-positioned for the future Track record of balancing growth & productivity Well-capitalized ... Solid financial policies in place Industry dynamics support stable and consistent growth Solid pipeline of organic growth o
Slide 35: Strong Growth and Solid Margin Expansion
Strong Growth and Solid Margin Expansion 35 Revenues ($M) Operating Income & Margin ($M) Op Margin expands 250 bps Operational & Commercial Excellence Initiatives Price & Productivity more than offset Inflation Includes restructuring costs $41M, $31M, and $15M ('08 - '10) Focused on Profitable Growt
Slide 36: Demonstrated Consistent Margin Improvement
Demonstrated Consistent Margin Improvement 36 Gross Margin Up 320 bps...Execution Will Drive Further Expansion Operational & Commercial Excellence Gross Margin Performance Key Focus Areas Expanded low cost region manufacturing & sourcing to ~30% Leveraged procurement scale effectively Simplified sup
Slide 37: Operating Margin Walk
Operating Margin Walk 37 Operating Margin Expansion of 250 bps...Resilient During Downturn Organic Revenue up 3.4% Organic Revenue down 8.8% Operations: Price 0.7% Volume/Mix -3.9% Cost Improvements 4.1% 2008 - 2009 2009 - 2010 Operations: Price 0.5% Volume/Mix 0.5% Cost Improvements 4.0%
Slide 38: Segment Overview: Water Infrastructure
Segment Overview: Water Infrastructure 38 (YOY) 2009 2010 Organic -3.6% 1.5% Acquisitions -% 14.9% FX -5.9% 0.5% Total -9.5% 16.9% Good Market Fundamentals ... Sustainable Business Performance Revenues ($M) Operating Income & Margin ($M) Op Margin expands 220 bps Operating productivity funds increme
Slide 39: Segment Overview: Applied Water
Segment Overview: Applied Water 39 Actions Taken ... Business Better Positioned (YOY) 2009 2010 Organic -14.9% 5.8% Acq/Div 0.5% 1.3% FX -3.5% -1.3% Total -17.9% 5.8% Applied Water 41% * Revenues ($M) Operating Income & Margin ($M) Op Margin expands 130 bps Lower volume and restructuring expense dri
Slide 40: Strong Cash Flow Generation
Strong Cash Flow Generation 40 1 Free Cash Flow = Net cash from operating activities - Capital expenditures Free Cash Flow1 and Conversion ($M) Operating Working Capital as % of Sales 2008 2009 2010 AR 608 599 690 Inv 342 301 389 AP 298 256 309 Working Capital 652 644 770 W/C as % Sales* 21% 22% 22%
Slide 41: 2011 1st Half Performance
2011 1st Half Performance 41 Revenues ($M) Operating Income and Margin ($M) Jun'11 YTD Organic 8.7% Acquisitions 13.3% FX 5.3% Total 27.4% 12.7%* * Ex. $21M of One-Time Separation Costs Good Performance ... Challenging Environment Operations: Price 0.8% Volume/Mix 1.1% Cost Improvements 2.3% Op Marg
Slide 42: Summary Capital Structure & Liquidity Position
Summary Capital Structure & Liquidity Position 42 Capital Summary ($M) As of June 30, 2011 Strong Liquidity Position Targeted cash position of $200M at 10/31/11 Placed $1.2B debt 5yr $600M at 3.55% 10yr $600M at 4.875% 4 yr $600M revolving credit facility Access to commercial paper market anticipate
Slide 43: Financial Policies
Financial Policies 43 Targeted Metrics Maintain solid investment grade rating Leverage position consistent with investment grade metrics Free Cash Flow (Operating Cash Flow less Capex) conversion target of 100% Dividend Policy Initial dividend targeted in the peer range; Subject to Board vote Q4 '11
Slide 44: Capital Deployment
Capital Deployment 44 2.5% - 3.5% of sales Dividend in line with peers Up to $300M / year Capital Deployment Strategy Balance of organic & inorganic investment Return value to shareholders Maintain solid investment grade metrics Debt & pension Organic Growth World Class Facilities Cash return to sha
Slide 45: Update on Separation Costs
Update on Separation Costs 45 Actively Managing Recurring Costs One-Time $25-$35M Incremental to 2010 Cost Base Public Company "stand-up" IT Infrastructure Timing of impact: $5-10M beginning in 2011 Balance expected in 2012 ~80 bps impact on operating margin Estimated one-time costs: Professional se
Slide 46: Financial Projections
Financial Projections 46 Market growth of 3-5%...4-6% Xylem targeted growth Acquisition strategy adds 1-2 % points of growth Xylem is poised to achieve our long-term financial objectives Revenue Growth Rates Based on 2011 Range of $3.7B to $3.8B Operational & Commercial excellence expand margins 50-
Slide 47: Water Application Leadership
Water Application Leadership Gretchen McClain, CEO & President
Slide 48: Participating in the Global Water Industry Through Two Segments
Participating in the Global Water Industry... 48 Applied Water Water Treatment Water Transport Water Sources Wastewater Treatment Wastewater Transport Water Infrastructure Test Test Water Transport Water Transport .... Through Two Industry-Aligned Segments
Slide 49: Water Infrastructure Overview
Water Infrastructure Overview 49 Market Size: $16B 2010 Revenues: $1.9B 2010 Op Margin: 14% Revenue by Application Applications: Transport, Treatment and Test Customers: Public Utilities and Industrial Facilities Distribution: World-Class Global Direct & Indirect Channels Strong Aftermarket & Replac
Slide 50: The Public Utility Market
The Public Utility Market ... 50 40% of Xylem Revenues related to Public Utility spending - in 2010: ~$900M for Maintenance Capital ~$400M for New Projects Public Utility spending grows long term U.S.: 6+% CAGR 1965 - 2010 Europe similar to U.S. Asia Pacific growing faster Funding of expenditures se
Slide 51: Transport
Transport Michael Kuchenbrod
Slide 52: Transport Overview
Transport Overview 52 Water Dewatering Wastewater Revenue by Application World's Largest Wastewater Pump Provider ... Large Installed Base World's Largest Dewatering Pumps & Services Company Global Application Specialists Dedicated Aftermarket & Service support team Strong global sales organization
Slide 53: Transport Portfolio
Wastewater Water Dewatering Transport Portfolio 53 35% 8% 57% Products Submersible Pumps Dry Installed Pumps Prefabricated Pump Stations Sludge Pumps Monitoring & Controls Customers EPC's Private & Public Utilities Industrial Facilities Products Submersible Pumps Prefabricated Pump Stations Monitori
Slide 54: Case Study: N-Pump Evolution
Case Study: N-Pump Evolution 54 Adaptive N-pump N-pump Benefits Self cleaning design minimizes clogging Reduced maintenance and service calls Improved energy efficiency Increased worker safety Reduced wear and longer pump life Benefits Further improved efficiency and non-clogging characteristics of
Slide 55: Transport Growth Strategy: Flygt Experior
Transport Growth Strategy: Flygt Experior 55 Motors IE3 compliant motors Hydraulics Adaptive N extension Controls SmartRunTM intelligent control with energy optimization and cleaning cycles Pre-programmed product and application data Superior reliability and energy efficiency with improved simplicit
Slide 56: Transport Growth Strategy: Dewatering
Transport Growth Strategy: Dewatering Strong Existing Business & Footprint Proven model Established customer base Broad applications ranging from public utility & industrial water control to emergency and flood control Leverage over 138 depots worldwide Focused on core pumping applications & expandi
Slide 57: Treatment
Treatment Michael Kuchenbrod
Slide 58: Treatment Overview
Treatment Overview 58 Revenue by Application Filtration Biological Disinfection Strong Positions in Attractive Treatment Segments Market Size: $3B Membrane market adds: ~$500M Market Growth: ^ Low Single Digit Membrane market growth: high teens 2010 Xylem Revenues: $377M Broad portfolio & understand
Slide 59: Treatment Plant Overview
Treatment Plant Overview 59 PRIMARY SECONDARY TERTIARY BIOSOLIDS MANAGEMENT
Slide 60: Treatment Portfolio
Treatment Portfolio 60 Biological Disinfection Filtration 11% 24% 65% Products Aeration Systems Sequencing Batch Reactors Drum Filters Monitoring & Controls Mixers & Agitators Customers Public Utilities Industrial Facilities Products Ultraviolet Disinfection Ozone Disinfection Advanced Oxidation Cus
Slide 61: Treatment Growth Strategy: Technology Expansion
Treatment Growth Strategy: Technology Expansion GE Channel Agreement - UF Membranes Channel Partner for UF Membranes - GE Water UF Membranes a key offering in water and wastewater treatment Partnership with GE gives Xylem a strong product offering to serve our customers wanting membrane technologies
Slide 62: Treatment Growth Strategy: Advanced Oxidation Process
Treatment Growth Strategy: Sustainable Infrastructure Advanced Oxidation Process (AOP) - MiPRO Description Drinking Water/ Water Reuse - Oxidation of Micro pollutants Integrated system containing the components ozone, UV and H2O2-dosing. Ensure removal performance for various micro pollutants with t
Slide 63: Treatment Growth Strategy: EE Secondary Treatment
Treatment Growth Strategy: Sustainable Infrastructure EE Secondary Treatment 63 Experience allows system optimization better than competition Key competitive advantages Capability to provide energy audits to understand baseline performance Optimize performance by combining in-depth process and produ
Slide 64: Test
Test Chris McIntire xylem.
Slide 65: Test Overview
Test Overview Revenue by Application Industry Leading Platform in Water and Environment 65 Market Size: $2B Market Growth: ^ Mid Single Digits 2010 Xylem Revenues: $117M Well established brands delivering premium products, globally Full range of both state of the art technology and robust applicatio
Slide 66: Evolution of Our Analytics Platform
Evolution of Our Analytics Platform 66 Step 1 Step 2 Step 3 Sensor Technologies: Electrochemistry Optical Total Organic Carbon Acoustic Doppler Annual Revenues $300+M
Slide 67: Test Portfolio
Test Portfolio 67 Field Products Sensor Networks Portable monitors Photometers Temperature equipment Key Brands Customers Public Utilities Government Agencies Process engineers Environmental researchers Lab Products Electrochemistry systems Titrators Water quality analyzers TOC analyzers Key Brands
Slide 68: Wastewater Sensor Networks: IQ Sensornet
Wastewater Sensor Networks: IQ Sensornet 68 Water Quality system using a sensor network backbone with 17 parameters available for measurement Eases integration with plant control system and eliminates complicated installation Littleton/Englewood WWTP in Colorado has enjoyed reduced operating costs,
Slide 69: Sensor Networks: Susquehanna River Basin
Sensor Networks: Susquehanna River Basin 69 Sentinel Water Quality stations provide spill alert and validate safety of groundwater and surface water supply 50 station monitoring network ensures data coverage across the basin Monitoring the baseline parameters will show evidence of change over the lo
Slide 70: Sensor Networks: Hudson River Projects
Sensor Networks: Hudson River Projects 70 20 Water Quality Monitoring Systems 4 Buoy platforms to monitor turbidity dredging activities (PCB clean-up) 9 real time to monitoring water quality stations in the NYC area Ensures rapid response to any permit violations, mitigating environmental damage. Mo
Slide 71: Sensor Networks: LaGuardia Airport
Sensor Networks: LaGuardia Airport 71 Protecting Natural Waters in Urban Areas Port Authority, NY LaGuardia Airport Continuous Dissolved Oxygen Monitoring to study impact of de-icing fluid on Long Island Sound YSI provides instrumentation and performs monthly service through a maintenance contract
Slide 72: Creating the Future
Creating the Future 72 Organic Acquisitions Global Mindset Balanced M&A and Organic Global/Regional Organization Strong Customer Relationships Brand Growth Today Future Globalization (% of Total Revenues) ROW ROW Europe Europe N. A. North America ROW Europe North America Integrating Assets to Create
Slide 73: Participating in the Global Water Industry Through Two Segments
Participating in the Global Water Industry... 73 Applied Water Water Treatment Water Transport Water Sources Wastewater Treatment Wastewater Transport Water Infrastructure Test Test Water Transport Water Transport .... Through Two Industry-Aligned Segments
Slide 74: Applied Water Overview
Applied Water Overview 74 Revenue by Application Applications: Building Services, Industrial Water, Irrigation Customers: Residential & Commercial, Industrial Facilities, Agriculture Distribution: Primarily through World-Class Indirect Channels Strong Aftermarket & Replacement Contributions Building
Slide 75: Building Services
Building Services Ken Napolitano
Slide 76: Building Services Overview
Building Services Overview 76 Revenue by End Market Residential Commercial Strong, longstanding brands & channels Innovation in energy efficiency, reliability, life cycle cost Industry leading customer training support Application expertise drives enhanced solutions Market Size: $8B Market Growth: ^
Slide 77: Building Services Portfolio
Building Services Portfolio 77 Broad Offering, Large Installed Base, Application Expertise Customers Developers Building Operators Building Designers HVAC Specialists Contractors Plumbers HVAC - Heating Pressure boosters Fire protection HVAC - Cooling Wastewater Zone Control
Slide 78: Building Services: Green Building Macro Trend
Building Services 78 Best in class efficiencies Increasing Adoption Appearance of Green Project Specifications in the US (LEED) High Efficiency Awareness Consumer Interest In Life Cycle Cost Energy Price Escalations High Efficiency Legislation Performance Standards for Pumps and Systems Water Supply
Slide 79: Building Services Growth Strategy: Multistage Pumps
Building Services Growth Strategy: Multistage Pumps Flygt N Pump eSV Pump Launched Q4 2010 Benefits Best in class efficiency and product range Available intelligent variable speed controller delivers 10-50% energy savings Lower maintenance costs from ability to replace mechanical seal without removi
Slide 80: Building Services Growth Strategy: HVAC Circulators
Building Services Growth Strategy: HVAC Circulators Acquired Q2'09 HVAC High Efficiency Circulators 30%+ CAGR in High Efficiency Segment Global Large Circulator market $800M following Expanding portfolio to take advantage of legislated technology shift Base Laing GmbH U.S. Europe Entry into attracti
Slide 81: Strategic Partnership Agreement
Strategic Partnership Agreement 81 Leading appliance retail chain in China Revenue of more than $15B 1,000 chain stores in more than 300 cities 120,000 employees Expansion into real estate development 100 Commercial Complexes 5 Star Hotels, Office, Residential, Retail 10 Year Plan Green Building des
Slide 82: Industrial Water
Industrial Water Bob Wolpert
Slide 83: Industrial Water Overview
Industrial Water Overview Revenue by Application Leisure Marine Food & Beverage General Industrial Core Technologies Leveraged Across Diverse Applications 83 Strong, longstanding brands & channels Wide product offering Global support Innovation in energy efficiency Application expertise Market Size:
Slide 84: Industrial Water Portfolio
Industrial Water Portfolio 84 General Leisure Marine Food & Beverage 9% 18% 73% Products Multistage Pumps End Suction Pumps Flexible Impeller Pumps Air & Electrical Operated Diaphragm Pumps Valves Heat Exchangers Customers All Industrial Plants OEMs Core Applications Pressure Boosting Cooling Water
Slide 85: Core Technology Leverage: General Industry
Core Technology Leverage: General Industry Customer: Global Data Center, Singapore Challenge: Design most efficient cooling system against highly variable load Solution: Install platform of 60 eSV pump sets with intelligent variable speed controllers Benefits: 22% energy savings Increased system rel
Slide 86: Core Technology Leverage: Diaphragm Pumping Solutions
Core Technology Leverage: Diaphragm Pumping Solutions Flojet G Series Diaphragm Pumps Patented design Global strategic account process Global supply chain Irrigation and agriculture Construction vehicles Rainwater harvesting Chemical dosing 86 Leading Expert In Beverage Dispensing Pumps Leveraging T
Slide 87: Irrigation
Irrigation Bob Wolpert xylem.
Slide 88: Irrigation Overview
Irrigation Overview Irrigation Drivers Population Increase Water Availability and Quality Rising Energy Cost Bio-fuel Demand Products Pumps Mixed Flow Pumps Boosting Systems Customers Farmers OEM Irrigation Strategy Expanding the Core Niche Player in Agriculture Essence of Life Initiative 88 Market
Slide 89: Essence of Life: Affordable Irrigation Systems
"Essence of Life" Affordable Irrigation Systems for Emerging Markets Synergistic Emerging Market Focus Hybrid Value Chain Partners Differentiated Product Portfolio Compelling Business Proposition Sustainable Engagement Strategy An innovative pilot to demonstrate how Xylem can meet the water needs of
Slide 90: Closing and Q&A
Closing and Q&A Gretchen McClain, CEO & President
Slide 91: A Genuine Water Company with an Exciting Future
A Genuine Water Company ... with an Exciting Future 91 Water Infrastructure Water Infrastructure Water Infrastructure Applied Water Applied Water Applied Water Water as % of Total Revs Transport Treatment Test Res/Comm'l Industrial Irrigation Xylem >90% Danaher ~15% Franklin ~85% Grundfos ~85% KSB ~
Slide 92: Q&A
xylem Let's Solve Water Q&A
Slide 93: Key Takeaways
Key Takeaways 93 Strong foundation set for launch as public company A genuine water company with scale Xylem is water's application solution leader Tremendous opportunities for profitable growth High-performing team delivering superior performance Xylem ... Poised to Outperform
Slide 94: Thank you for your interest!
94 Thank you for your interest !
Slide 95: Appendix
Appendix xylem,
Slide 96: Xylem Management Team
Xylem Management Team 96 Gretchen W. McClain Chief Executive Officer & President President of ITT's $5.7B Fluid & Motion Control Division Member of the Strategic Council Former President, ITT Residential and Commercial Water Fortune 500 background (Honeywell, ITT) Experience in Engineering, Aerospac
Slide 97: Xylem Management Team
Xylem Management Team 97 Colin Sabol Chief Strategy and Growth Officer VP of Marketing and Business Development for Fluid & Motion Control Division Significant acquisition experience 10 years of experience in the water industry 23 years of experience in global industries Fortune 500 background (GE,
Slide 98: Xylem Management Team
Xylem Management Team 98 Angela Buonocore Chief Communications Officer Senior Vice President and Chief Communications Officer for ITT Corp. Member of the Strategic Council Former Vice President, Corporate Communications for The Pepsi Bottling Group Fortune 300 background (Pepsi, IBM, GE, ITT) BS in
Slide 99: Xylem Management Team
Xylem Management Team 99 Mike Kuchenbrod President, Water Solutions President of ITT's China Operations A 23 year veteran of ITT Corp., including leadership positions as President of ITT's Interconnect Solutions, President & GM of Koni shock absorbers, and VP & GM of Cannon Leadership roles in Gener
Slide 100: Xylem Management Team
Xylem Management Team 100 Ken Napolitano President, Residential & Commercial Water Prior President of ITT's Industrial Process business Leadership roles included VP Sales, designing product strategies, and commercializing business technologies Led manufacturing projects in India & Saudi Arabia BS in
Slide 101: Non-GAAP Measures
Non-GAAP Measures 101 Management views key performance indicators including revenue, segment operating income and margins, orders growth, and backlog, among others. In addition, we consider certain measures to be useful to management and investors evaluating our operating performance for the periods
Slide 102: Non-GAAP Reconciliation: Organic Sales Revenues
Non-GAAP Reconciliation: Organic Sales Revenues 102 Xylem Inc. Non-GAAP Reconciliation Xylem Inc. Non-GAAP Reconciliation Xylem Inc. Non-GAAP Reconciliation Xylem Inc. Non-GAAP Reconciliation Xylem Inc. Non-GAAP Reconciliation Xylem Inc. Non-GAAP Reconciliation Xylem Inc. Non-GAAP Reconciliation Xyl
Slide 103: Non-GAAP Reconciliation: Adjusted EBITDA
103 Non-GAAP Reconciliation: Adjusted EBITDA Xylem, Inc. Non-GAAP Reconciliation Xylem, Inc. Non-GAAP Reconciliation Xylem, Inc. Non-GAAP Reconciliation Xylem, Inc. Non-GAAP Reconciliation Xylem, Inc. Non-GAAP Reconciliation Xylem, Inc. Non-GAAP Reconciliation Xylem, Inc. Non-GAAP Reconciliation Xyl
Slide 104: Non-GAAP Reconciliation: Adjusted Operating Income
Non-GAAP Reconciliation: Adjusted Operating Income 104 Xylem Inc. Non-GAAP Reconciliation Xylem Inc. Non-GAAP Reconciliation Xylem Inc. Non-GAAP Reconciliation Xylem Inc. Non-GAAP Reconciliation Operating Income vs. Adjusted Operating Income Operating Income vs. Adjusted Operating Income Operating I
Slide 105: Non-GAAP Reconciliation: Free Cash Flow
Non-GAAP Reconciliation: Free Cash Flow 105 Xylem Inc. Non-GAAP Reconciliation Xylem Inc. Non-GAAP Reconciliation Xylem Inc. Non-GAAP Reconciliation Xylem Inc. Non-GAAP Reconciliation Xylem Inc. Non-GAAP Reconciliation Xylem Inc. Non-GAAP Reconciliation Xylem Inc. Non-GAAP Reconciliation Net Cash -
Slide 106: Quarterly Financial Performance
Quarterly Financial Performance 106 Q1'10 Q2'10 Q3'10 Q4'10 FY'10 Q1'11 Q2'11 Net Sales 686 775 806 935 3,202 890 971 COGS 431 484 497 576 1,988 553 592 Gross Profit 255 291 309 359 1,214 337 379 SG&A 164 170 183 220 737 213 237 R&D 18 17 18 21 74 24 26 Restructuring, net 4 3 1 7 15 - - Op Income 69