Xylem Reaffirms Growth Strategy and Digital Leadership at 2021 Investor Day
As the leader in the advanced technologies transforming the water sector, Xylem will also provide an update on its digital strategy. The Company will announce the establishment of Xylem Vue, a market-leading digital ecosystem bringing together the power of Xylem’s advanced hardware and software technologies and service capabilities.
“Underlying demand for sustainable, affordable water solutions is strong and growing, as the long-term trends driving water challenges accelerate,” said Decker. “Xylem is exceptionally well positioned with leadership in water technology and a global installed base in attractive, growing markets. We expect to continue delivering above-market organic growth, with enhanced margins, by helping our customers climb the technology curve as the water sector digitizes.”
“With sustainability at the core of our strategy, our growth creates both economic and social value, as we enable customers to create better water outcomes for their communities. Alongside growth, we expect to continue delivering strong free cash flow conversion, providing capacity for significant capital deployment underpinning sustained returns for years to come. That includes using M&A when it enhances our capability to serve our customers, accelerates our growth, and creates value for shareholders.”
Long-term Financial Framework
Xylem’s long-term financial framework anticipates annual organic revenue growth in the range of 4 percent to 6 percent, with average annual adjusted EBITDA margin expansion of 50-75 basis points per year. The Company is also maintaining its commitment to average annual free cash flow conversion of 100 percent.
Underlying demand continues to be robust, with higher-than-expected growth in orders and backlog, but the global supply chain environment has become increasingly volatile, including with respect to escalating electronic component shortages. The Company currently estimates adverse revenue impacts of approximately $100 million in the second half of the year. Xylem will report third quarter earnings on November 2, 2021, and expects to provide an updated full-year outlook at that time.
Source: Xylem Inc.