Company also reaffirms full-year 2017 guidance
RYE BROOK, N.Y.--(BUSINESS WIRE)--Apr. 4, 2017--
At its Investor Day in Raleigh-Durham, North Carolina, Xylem (NYSE:XYL),
a leading global water technology company, today will update its 2020
financial guidance and showcase the broad portfolio of smart
infrastructure technologies and solutions provided by its Sensus and
Visenti businesses. Xylem acquired Sensus and Visenti in October 2016.
Xylem President and CEO Patrick Decker, along with other senior
leadership, will provide an update on the Company’s plans to drive
above-market organic growth and capture significant cost and revenue
synergies through the integration of Sensus.
“The addition of Sensus is reshaping the growth and profitability
profile of Xylem by expanding our smart infrastructure portfolio and
increasing our exposure to faster-growing end markets and geographies,”
said Mr. Decker. “With the combination of Sensus’ higher growth rate,
the robust revenue synergies we expect to realize and our ongoing
productivity initiatives, we now expect to deliver higher organic
revenue growth and an additional 100 basis points of margin expansion by
2020 versus previous targets laid out in 2015. In addition, our ability
to generate significantly more operating cash flow as well as our larger
scale and leverage capacity will provide us with an additional $1.8
billion for disciplined capital deployment, which brings the total
capital available for deployment from 2015 through 2020 to $5.3 billion.
With our acquired businesses serving as catalysts for accelerated
growth, we are well positioned to create even more value for our
stakeholders.”
Xylem now projects to generate organic revenue growth of four to six
percent through 2020, up from the previous forecast of three to five
percent. The Company expects to achieve 400 to 500 basis points of
operating margin expansion by 2020 – a 100 basis-point increase from the
previous target of 300 to 400 basis points – driven by its ongoing focus
on driving productivity as well as the expected impact from the cost and
revenue synergies from its recent acquisitions. Xylem anticipates
delivering adjusted core earnings per share growth in the mid-teen range
and, with the impact of capital deployment, the growth range is
projected to be in the high teens.
Xylem also announced that it will combine its Analytics, Sensus and
Visenti businesses, effective second quarter 2017. As a result of this
change, the Company will report the financial and operational results
from these businesses as one segment. Xylem’s Water Infrastructure
segment will no longer include the results of its Analytics business.
The Applied Water segment remains unchanged.
Reaffirming 2017 Outlook
Xylem also reaffirmed its 2017 outlook, including full-year revenue in
the range of $4.5 to $4.6 billion, up 20 to 22 percent from the 2016
results, including growth from previously announced acquisitions and
projected unfavorable impacts of foreign exchange translation. On an
organic basis, Xylem’s revenue growth is expected to be in the range of
one to three percent, and two to four percent on a pro forma basis.
The Company continues to project full-year 2017 adjusted operating
margin to be in the range of 13.2 to 13.7 percent, resulting in adjusted
earnings per share of $2.20 to $2.35. This represents an increase of 8
to 16 percent from Xylem’s 2016 adjusted results. Excluding projected
unfavorable impacts of foreign exchange translation, Xylem’s adjusted
earnings per share growth is anticipated to be in the range of 12 to 20
percent. The Company’s adjusted operating margin and earnings outlook
excludes projected integration, restructuring and realignment costs of
approximately $30 million for the year. 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.
All presentations and a Q&A session at the Investor Day will be webcast
live at http://investors.xyleminc.com.
A replay will also be available.
About Xylem
Xylem (XYL) is a leading global water technology company committed to
developing innovative technology solutions to the world’s water
challenges. The Company’s products and services move, treat, analyze,
monitor and return water to the environment in public utility,
industrial, residential and commercial building services. With its
October 2016 acquisition of Sensus, Xylem added smart metering, network
technologies and advanced data analytics for water, gas and electric
utilities to its portfolio of solutions. The combined Company’s nearly
16,000 employees bring broad applications expertise with a strong focus
on identifying comprehensive, sustainable solutions. Headquartered in
Rye Brook, New York with 2016 revenue of $3.8 billion, Xylem does
business in more than 150 countries through a number of market-leading
product brands.
The name Xylem is derived from classical Greek and is the tissue that
transports water in plants, highlighting the engineering efficiency of
our water-centric business by linking it with the best water
transportation of all – that which occurs in nature. For more
information, please visit us at www.xylem.com.
Forward-Looking Statements
This press release contains information that may constitute
“forward-looking statements.” Forward-looking statements by their nature
address matters that are, to different degrees, uncertain. Generally,
the words “anticipate,” “estimate,” “expect,” “project,” “intend,”
“plan,” “forecast,” “believe,” “target,” “will,” “could,” “would,”
“should” and similar expressions identify forward-looking statements,
which generally are not historical in nature. However, the absence of
these words or similar expressions does not mean that a statement is not
forward-looking.
These forward-looking statements include statements about the
capitalization of Xylem Inc. (the “Company”), the Company’s
restructuring and realignment, future strategic plans and other
statements that describe the Company’s business strategy, outlook,
objectives, plans, intentions or goals. All statements that address
operating or financial performance, events or developments that we
expect or anticipate will occur in the future – including statements
relating to orders, revenues, operating margins and earnings per share
growth, and statements expressing general views about future operating
results – are forward-looking statements. Forward-looking statements
involve known and unknown risks, uncertainties and other important
factors that could cause actual results to differ materially from those
expressed or implied in, or reasonably inferred from, such
forward-looking statements. Factors that could cause results to differ
materially from those anticipated include: economic, political and other
risks associated with our international operations, including military
actions, economic sanctions or trade embargoes that could affect
customer markets, and non-compliance with laws, including foreign
corrupt practice laws, export and import laws and competition laws;
potential for unexpected cancellations or delays of customer orders in
our reported backlog; our exposure to fluctuations in foreign currency
exchange rates; competition and pricing pressures in the markets we
serve; the strength of housing and related markets; ability to retain
and attract key members of management; our relationship with and the
performance of our channel partners; our ability to successfully
identify, complete and integrate acquisitions, including the integration
of Sensus; our ability to borrow or to refinance our existing
indebtedness and availability of liquidity sufficient to meet our needs;
changes in the value of goodwill or intangible assets; risks relating to
product defects, product liability and recalls; governmental
investigations; security breaches or other disruptions of our
information technology systems; litigation and contingent liabilities;
and other factors set forth in Item 1A of our Annual Report on Form 10-K
for the year ended December 31, 2016, and those described from time to
time in subsequent reports filed with the Securities and Exchange
Commission. Forward-looking statements made herein are based on
information currently available to the Company. The Company undertakes
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.
View source version on businesswire.com: http://www.businesswire.com/news/home/20170404005739/en/
Source: Xylem
Xylem
Media
Kelly McAndrew, +1-914-281-4207
Kelly.McAndrew@xyleminc.com
or
Investors
Matt
Latino, +1-914-323-5821
Matthew.Latino@xyleminc.com