Slide 1: 2023 Fourth Quarter Results & Earnings
2023 Fourth 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: Q4 2023 Performance Summary
Q4 2023 Performance Summary ($ in millions, unless otherwise noted) Measurement Integrated Xylem Consolidated Water Infrastructure Applied Water and Control Solutions Solutions and Services Reported Q4 Adj* Q4 Reported Q4 Adj* Q4 Reported Q4 Adj* Q4 Reported Q4 Adj* Q4 Reported Q4 Adj* Q4 Orders $2,
Slide 4: Q4 2023 Earnings Highlights
Q4 2023 Earnings Highlights Continued Outperformance During a Transformational Year Exceeded guidance on revenue and Adj. EPS* throughout 2023; full-year Adj. EBITDA* margin expansion of 190 bps Created world’s most advanced water platform with Evoqua combination Integration well on track, with cost
Slide 5: Q4 2023 Financial Performance
Q4 2023 Financial Performance Orders Revenue Adj. EBITDA* Margin Adj. EPS* YTD Adj. Free Cash Flow* $2,044 $2,118 19.6% $1.00 $0.99 $729 18.7% $1,439 $1,506 $388 Organic* 10% Organic* 9% +90 bps (1%) 88% Q4 2022 Q4 2023 Q4 2022 Q4 2023 Q4 2022 Q4 2023 Q4 2022 Q4 2023 FY2022 FY2023 FY23: +1% organic*
Slide 6: Q4 2023 Segment Performance Summary
Q4 2023 Segment Performance Summary Measurement and Integrated Solutions Water Infrastructure Applied Water Control Solutions and Services Orders / Organic Growth* $483M +14% $820M +9% $420M +5% $321M N/A Revenue / Organic Growth* $468M +21% $871M +9% $457M ~FLAT $322M N/A $81M $188M Adj. EBITDA* Ma
Slide 7: FY 2024 Segment Outlook
FY 2024 Segment Outlook Measurement and Integrated Solutions Water Infrastructure(1) Applied Water Control Solutions(1) and Services(1), (2) (2) Organic* Up Mid-Single Down Low Up Mid-Single Revenue Up Low-Teens Growth Digits Single Digits Digits Key Drivers • Sequential improvement • Resilient due
Slide 8: FY 2024 and Q1 2024 Guidance
FY 2024 and Q1 2024 Guidance FY 2024 Guide Q1 2024 Guide Highlights $8.4B – $8.5B $1.97B – $2.00B Revenue 14% – 15% Total Growth 36% – 38% Total Growth Initiating full year 2024 guide 3 – 5% Organic* Growth 4 – 6% Organic* Growth • Revenue growth driven by resilient demand and backlog execution • Ev
Slide 9: Key Takeaways
Key Takeaways Continued Q4 outperformance on strong operational execution Evoqua integration and value capture well on track FY 2024 guidance reflects healthy demand in our major end-markets Xylem investment thesis is powerful: creating social and economic value 9 Q4 2023 Results & Earnings
Slide 10: Appendix
Appendix
Slide 11: Q4 2023 Xylem Performance and Key Performance Drivers
REVENUE ADJUSTED ADJUSTED EPS* $2,118 EBITDA MARGIN* 18.7% 19.6% $1.00 $0.99 $1,506 Q4 2023 XYLEM PERFORMANCE Organic* +90 bps (1%) 9% Q4 2022 Q4 2023 Q4 2022 Q4 2023 Q4 2022 Q4 2023 Adj. Op Margin* 15.4% 14.8% KEY PERFORMANCE DRIVERS Organic Growth* by End Market • Organic* revenue growth of 9% mai
Slide 12: Q4 2023 Measurement and Control Solutions Performance
Q4 2023 Measurement and Control Solutions Performance REVENUE Organic Growth* by Application Highlights $468 • Organic* orders growth of 14% driven by strength across all applications, Water 17% $383 Energy 36% particularly metrology and assessment services • Robust $2.3B backlog provides long-term
Slide 13: Q4 2023 Water Infrastructure Performance
Q4 2023 Water Infrastructure Performance REVENUE(1) Organic Growth* by End Market Highlights $871 Utilities • Organic* orders up 9% led by robust treatment demand in all regions 9% Industrial 8% and strength in opex particularly in U.S. and W. Europe $668 • Utilities growth driven by strong opex dem
Slide 14: Q4 2023 Applied Water Performance
Q4 2023 Applied Water Performance REVENUE Organic Growth* by End Market Highlights $455 $457 Industrial (1%) • Organic* orders grew 5%, driven by growth in Emerging Markets and W. Building Solutions 0% Europe partially offset by softness in U.S. • Industrial decline in U.S. and W. Europe partially o
Slide 15: Q4 2023 Integrated Solutions and Services Performance
Q4 2023 Integrated Solutions and Services Performance ADJ. REVENUE EBITDA* Segment Adj. Margins* Highlights Adj. EBITDA 21.1% • Pro forma(1) orders growth of 5% with services strength led by Energy and Life $322 Sciences, partially offset by softer capital orders Adj. Operating Income 11.8% $68 • Ba
Slide 16: Xylem Financial Position
Xylem Financial Position Capital Summary CASH DRIVERS December 31, 2023 $837 Cash & Cash Equivalents $ 1,019 Debt $ 2,284 ($271) $944 $1,019 Net Debt $ 1,265 ($324) ($167) Shareholders Equity $10,166 • Net cash for acquisitions / divestitures: ($371M) Net Capital $ 11,431 • Net debt issuance: $118M
Slide 17: FY 2024 Guidance Key Assumptions
FY 2024 Guidance Key Assumptions FY 2024 Assumptions Corporate Expense ~$65M Restructuring & Realignment Costs* ~$50 – 70M Capex ~$390M Estimated Tax Rate* ~23% Purchase Accounting Intangible Amortization ~$225M EUR / USD Rate 1.09 17 Q4 2023 Results & Earnings *See appendix for definitions of non-G
Slide 18: Segment Key Facts
Segment Key Facts Water Solutions and Services(2) Applied Water Treatment, transport and assessment services solutions with an Industrial and buildings solutions applications including pumps, extensive service network and highly recurring revenue valves, heat exchangers, controls, and dispensing equ
Slide 19: Appendix Measures
Appendix Xylem Inc. Non-GAAP Measures Xylem Inc. Non-GAAP Measures Management reviews key performance indicators including revenue, gross margins, segment operating income and margins, orders growth, working capital and backlog, among others. In addition, we consider certain non-GAAP (or "adjusted")
Slide 20: Reported vs. Organic & Constant Currency Revenue
Xylem Inc. Non-GAAP Reconciliation Reported vs. Organic & Constant Currency Revenue ($ Millions) Appendix (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 21: Reported vs. Organic & Constant Currency Orders
Xylem Inc. Non-GAAP Reconciliation Reported vs. Organic & Constant Currency Orders ($ Millions) Appendix (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 Orders Orders 2023 v. 2022 20
Slide 22: Adjusted Operating Income Reconciliation
Appendix Xylem Inc. Non-GAAP Reconciliation Adjusted Operating Income ($ Millions) Q1 Q2 Q3 Q4 YTD 2023 2022 (1) 2023 2022 (1) 2023 2022 (1) 2023 2022 (1) 2023 2022 (1) Total Revenue • Total Xylem 1,448 1,272 1,722 1,364 2,076 1,380 2,118 1,506 7,364 5,522 • Water Infrastructure 589 533 704 589 803
Slide 23: Adjusted Operating Income Reconciliation (continued)
Xylem Inc. Non-GAAP Reconciliation Adjusted Operating Income ($ Millions) Appendix Q1 Q2 Q3 Q4 YTD 2023 2022 (1) 2023 2022 (1) 2023 2022 (1) 2023 2022 (1) 2023 2022 (1) Special Charges • Total Xylem 25 1 67 1 24 13 22 1 138 16 • Water Infrastructure - - 12 - 6 - 11 - 29 - • Applied Water - - - - - -
Slide 24: Adjusted Diluted EPS Q4
Xylem Inc. Non-GAAP Reconciliation Appendix Adjusted Diluted EPS ($ Millions, except per share amounts) Q4 2023 Q4 2022 (1) As Reported Adjustments Adjusted As Reported Adjustments Adjusted Total Revenue 2,118 - 2,118 1,506 - 1,506 Operating Income 211 102 a 313 197 35 a 232 Operating Margin 10.0% 1
Slide 25: Adjusted Diluted EPS Year to Date
Xylem Inc. Non-GAAP Reconciliation Appendix Adjusted Diluted EPS ($ Millions, except per share amounts) Q4 YTD 2023 Q4 YTD 2022 (1) As Reported Adjustments Adjusted As Reported Adjustments Adjusted Total Revenue 7,364 - 7,364 5,522 - 5,522 Operating Income 652 420 a 1,072 622 122 a 744 Operating Mar
Slide 26: EBITDA and Adjusted EBITDA by Quarter
Xylem Inc. Non-GAAP Reconciliation Appendix Xylem Inc. Non-GAAP Reconciliation EBITDA and Adjusted EBITDA by Quarter ($ Millions) EBITDA and Adjusted EBITDA by Quarter ($ Millions) Water Infrastucture 2023 2023 Q1 Q2 Q3 Q4 Total Q1 Q2 Q3 Q4 Total Net Income 99 92 152 266 609 Operating Income 70 106
Slide 27: EBITDA and Adjusted EBITDA by Quarter: Applied Water, MCS
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 20 26 27 4
Slide 28: EBITDA and Adjusted EBITDA: Integrated Solutions & Services
Appendix Xylem Inc. Non-GAAP Reconciliation EBITDA and Adjusted EBITDA by Quarter ($ Millions) Integrated Solutions & Services 2023 Q1 Q2 Q3 Q4 Total Operating Income - (7) (3) 18 8 Operating Margin - (5.6%) (0.8%) N/A 5.6% N/A 1.0% Depreciation - 8 30 27 65 Amortization - 12 36 17 65 EBITDA - 13 63
Slide 29: Net Cash Operating Activities vs. Free Cash Flow
Xylem Inc. Non-GAAP Reconciliation Appendix Net Cash - Operating Activities vs. Free Cash Flow ($ Millions) Q1 Q2 Q3 Q4 Year-to-Date 2023 2022 2023 2022 2023 2022 2023 2022 2023 2022 Net Cash - Operating Activities ($19) ($81) $28 $113 $373 $202 $455 $362 $837 $596 Capital Expenditures - PP&E (33) (
Slide 30: Thank you.
Thank you. NYSE: XYL Q4 2023 Earnings & Results Xylem Investor Relations Website Replay of the webcast is available until midnight February 13, 2024 Replay: +1 (877) 344-7529 or +1 (412) 317-0088 (INTL) LinkedIn | Twitter | Facebook | YouTube | Instagram