Q1 2024 Xylem Inc Earnings Call Transcript
Key Points
- Xylem Inc (XYL) reported strong first quarter results, outperforming expectations with high single-digit organic revenue growth and a 300 basis point expansion in adjusted EBITDA margin.
- Earnings per share (EPS) grew by 14%, driven by robust operational and commercial performance across key segments.
- The Measurement & Control Solutions (MCS) segment saw organic revenue growth of over 20% and a significant 500 basis point improvement in margins year-over-year.
- Integration synergies with Evoqua are progressing well, with a solid Q1 run rate on cost capture, supporting both revenue and cost synergies.
- Xylem Inc (XYL) raised its full-year guidance for revenue, margin, and EPS, reflecting strong current performance and confidence in continued demand.
- Despite overall strong performance, the Applied Water segment experienced a decline in orders and a 380 basis point drop in EBITDA margin year-over-year.
- Free cash flow conversion started the year at 9%, indicating a significant improvement but still reflects typical negative seasonality for Q1.
- The company noted ongoing challenges in emerging markets and Europe within the Applied Water segment, impacting performance.
- Higher inflation and investments partially offset the benefits from productivity savings, strong volume, price, and mix improvements.
- While government funding is supporting market growth, the inflow is slow, and the impact is expected to be gradual over the next 3 to 5 years.
Welcome to Xylem's First Quarter 2024 Results Conference Call. (Operator Instructions). Please note, this event is being recorded.
I would now like to turn the conference over to Andrea van der Berg, Vice President of Investor Relations. Please go ahead.
Thank you, operator. Good morning, everyone, and welcome to Xylem's First Quarter 2024 Earnings Call. With me today are Chief Executive Officer, Matthew Pine; and Chief Financial Officer, Bill Grogan. They will provide their perspective on Xylem's first quarter 2024 results and discuss the second quarter and full year outlook.
Following our prepared remarks, we will address questions related to the information covered on the call. I'll ask that you please keep to 1 question and a follow-up and then return to the queue. As a reminder, this call and our webcast are accompanied by a slide presentation available in the Investors section of our website. A replay of today's call will be available until midnight May 9. Additionally, the call will be
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