Xylem (XYL) 2 May 242024 Q1 Earnings call transcript

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. ahead. go Please

Grogan. Good the Quarter operator. Chief and to outlook. XXXX Officer, welcome Officer, on their Thank first quarter Xylem's Earnings morning, and Call. First quarter Bill Financial Chief XXXX Pine; and are will With Xylem's provide Matthew perspective discuss you, results and everyone, They second me Executive year today full

keep information to will covered remarks, question the our we address that questions you to to ask prepared follow-up please the on a the X call. and return and I'll Following related then queue.

and As a our reminder, webcast will be by this in call section today's call a available slide of the available of Investors our presentation until X. accompanied May replay A website. are midnight

be section available the heading will under the via playback of Events. website call Investors Investor for the our Additionally,

Please turn X. to Slide

update on forward-looking reflect XX-K circumstances, report materially from actual reports note to on are forward-looking recent will that publicly we including make those statements These annual in occur statements filed statements to the will events Form company subsequent in may results and subsequent obligation no events SEC. could risks differ factors that the or today's to We developments described undertakes events most anticipate with such Xylem's uncertainties, future subject future call, and as to future. or or the or Please some and references any those anticipated. in

X. Slide to turn Please

of comparative with the year. including metrics to in segment We basis, GAAP have prior provided you metrics a the as of of change made performance a with references reflecting on beginning segment being both key the summary and non-GAAP our metrics, year

are unless non-GAAP will call, adjusted included today's in an section indicated. the Appendix and reconciled presentation. all financials And of otherwise on of for and/or be you been purposes the For references organic have basis,

I'll X, over turn turn the to please Matthew CEO, and Pine. to call Slide Now our

healthy a margin team price. single-digit reflecting XXX without Xylem you strong team we XX%. and growth, quarter, of for EBITDA delivered metrics. of high and And basis adjusted outperforming outperformance, first The joining also all Andrea. growth points. expectations us balance delivered organic volume almost today. morning, thank everyone, both drove EPS on a the revenue Good And Thanks, very team The expanded

story straightforward. pretty The is

outstanding We Services. really I more I majority basis in segments, serving with have as want a operational mix. our a significant MCS, contribution strong and commercial momentum particular, delivered a margin In underlying our all our focused both highest and resilient Water XX% numbers. doing in want Control XXX of points combined stayed paid in and segments Xylem's and X all highlight and teams in In And over thank focused end to margins its revenue to and and first year-over-year. teams Solutions grew job. the customers orders are effort demand Measurement both Solutions WSS up for overall But growth on markets. to great the quarter organic segment, segments than made of & off

saw quarter cost Evoqua. how in we're solid first momentum tracking reflected the performance, with also on on we're commercial and operational to revenue both integration and confident a rate addition run synergies We capture, cost In and continued on QX very synergies.

guidance On EPS lifting we're for demand, team's $X.XX basis and from our midpoint. our revenue continuing the raising the our resilient margin of and performance guidance and disciplined momentum, the both year full

few more business, deliver. impressive performance most additional that focused look we The across doing maximizing things volume simplification efficiently. As operationally, We're driving matter increasing margin we quarter forward, incremental reflects on our even first from team's operational value our we're the every discipline.

by our to water, have demand trends secular for are Strategically, customers that our economic continue cycles. be ourselves. both supported across for solve and to set to water simplify we outlook To continues

the economy part intertwined with water energy, headlines world. the water-challenged just increasingly as every seeing we're of with an business is And reflect, As and life.

as long-term for the solutions and water growth make and communities to in of Day here help We're positioned announced see secure, can demand forward our virtually strategic outlook becomes our to and Bill? our results, Xylem's the looking So in hosting cover with we'll on framework the goals. to companies Washington. it headquarters XX to our to I'll this and pressing, that, demand. increasing updates that XXXX is And detail. continue and May position financial our water both be opportunity Bill to sustainability place platform quarter's and we'll meet to on We capabilities recently at uniquely our more financial hand security over Investor provide outlook, take more

Thanks, turning of and to excellent remaining our per and outstanding for margin quarter. earnings Slide expectations teams all thanks Matthew. an was I QX year, focused Please to to in want the turn Matthew's echo X. revenue, across to start exceeding an share.

continue quarter above in in to developed book-to-bill We grew markets, WSS. X, see with our the with Organic X% resilient by backlog supported to X% orders particularly billion. increasing demand across $X.X strength

XX%, revenues guidance combination and of organic exceeding rose volume grew a price. Total and our revenues and X%, healthy

on all basis and up double-digit from M&CS margin EBITDA XXX saw Our by strong investments. volume, prior in performance basis points and we an and was with on reflects U.S. basis. price led organic the XX% of and growth savings, in led XX% This regions, and WSS the productivity mix XX.X%, was by more growth than a inflation consolidated incrementals year, offsetting

$X.XX, our the prior year. Our EPS was high in the of above quarter by the over end up XX% guide $X.XX,

free of capital This sheet significant higher ample healthy offset represents slightly CapEx. support flow increased conversion year, X%. We of seasonality conversion. with net cash delivered This QX by started with deployment. cash liquidity income, versus we balance to the improvement typical remains free year flow Our negative

billion, quarter Orders and book-to-bill grew exceeded X% on backlog up & was revenue expectations. $X.X Please and great price our the metering execution. sequentially. slightly X. Measurement under by We Backlog turn demand. organically quarter margins backlog year demand in metering greater XXX was to smart to XX.X%, driven Slide Solutions up and continued inflation. with points Margin X% productivity, of points higher volume a up had X prior M&CS basis came mix favorable XX%, finished and expansion due smart the XXX by and than rose driven to conversion. versus Control and up basis EBITDA more offsetting

quarter, EBITDA Water up of driven than In X, expectations the of regions all offsetting healthy XX% declined quarter wins. basis was In orders points inflation. last driven robust Water, XXX segment a was growth were X%, by the led book-to-bill against demand. in demand first transport volume year, growth total price developed for Applied organic Revenues across the ago, a productivity, strong large our Revenue mix, X% down year by growth grew with of by orders by project expectations exceeded in primarily decline Infrastructure, in margin in and and applications. a reflective driven although X%, line our versus few with greater markets. and

productivity partly and XXX mix, declines, Segment higher EBITDA inflation volume declined basis year-over-year, an savings. by points offset unfavorable margin

productivity. and and that XX-year outsourced XX% Wrapping for even well the by driven X%, pro in a growth in forma revenue X% Adjusted contract, Orders excluding with X%, led services. by quarter, up water grew water was but pro above book-to-bill solutions across demand the a revenue order, was increased. and businesses. dewatering EBITDA with forma most large on while forma by X and increased price basis margin large up XX.X%, volume with mix at Organic driven of healthy a pro strong favorable organically order

WSS our focused across customers and a team outperformance The matters, reflection great our is of serving on resegmentation. integration this throughout staying what

Slide year quarter and X full updated for to our second guidance. turn let's Now

and Given and are our year operational raising full momentum, outperformance both we guidance. first our quarter commercial

an guide are X% billion. approximately guidance. X%. point growth will our We XX% at and growth prior growth XX% revenue versus reflects organic total at revenue revenue That increasing to put of additional $X.X to to This

about represents driving points price XXX prior versus cost margin margin about by We further expansion operational basis EBITDA to are of and offsetting year inflation. expansion XX%. including are productivity, volume, with guidance synergies That raising confident higher our driven productivity the and

at $X.XX EPS updated midpoint. to increase an of of the $X.XX $X.XX Our guidance reflects

And XXX% in remain of be We around of rate synergies XXXX. The exit in to conversion cost income. million largely flow cash comments for expected year continue free $XXX segment to net from outlook expect levels our February. still is the full year the at unchanged

on growth be will we the XX% to to X% reported XX% second X% For basis a organically. and total anticipate revenue quarter,

EBITDA $X quarter gains. second approximately quarter to points, continued to This price margin basis by volumes, second We XX driven XX%, of up EPS be realization $X.XX. and productivity higher yields expect

momentum. pace, healthy had year, a start at We strong further came into the building XXXX we've a and to

address and applications. healthy Our we our markets customers' diversified needs, demand to portfolio positions and evolving us end across well most anticipate

the we our inflation, While geopolitical remains dollar monitoring a overall and the are uncertainty, outlook environment, strengthening higher interest for positive. rates closely for macro including year longer,

and comments. With back over for the Matthew turn to X, Slide I'll call turn that, please closing to

Two before we want Thanks, I close. things Bill. to mention

around it's with to Xylem First, spend a many CEO colleagues so been such time XXX the first privilege my days in world. as

have it's of integration can our fantastic come the Xylem today's how is see indicator You evident they're smoothly a and in teams great Evoqua work, doing And progress results. together. and

pivot much potential to and impact, stronger for execution strategy. company, of as combined so As even a especially we there our growth is

potential, To culture we're achieve being very about the we're our intentional building.

and culture a impact. phase our growth culture, drive of and it behaviors our heart the we centered it's accountability creating creating innovation. next that the are on empowerment, of high-impact call how, how we're Specifically, We Xylem's and

and Of change myself team. with time, the and starts course, it culture leadership takes

and when incredibly to our May. energizing gather at more Day the of all we're how organization. life talk the end it's a bit we alignment together cultural at business for fostering in our coming high-impact to We'll Investor reviews the town see culture about in already levels halls So

sustainability this time, goals the Lastly, combined the our impact report. ambition year's report, be we'll also first Day, on We're by launching XXXX our for In we'll motivated more ahead. we've proud achieved our be setting what of XXXX. even through work very and Investor company for introducing

Given turn to to as And we financial you you give welcome to model, your always, I'll lead results. I as feedback. Xylem's operator to how Q&A. fundamental through sustainability the invite And our that, it business attention over it us with much is give as

The Instructions] comes with first [Operator Markets. RBC Deane from Capital question Dray

lots on the can the rollout Evoqua integration we here the European business. start the focus synergies, of revenue and Maybe with just potential of

That then any Just in you what And on helpful that is new just some terms contracts? large be can color contract. outsourced outsourcing also, -- on any too. of would there color potential the

maybe But Yes, we I on in that are Evoqua X ago. in this contract. win remind going the We January, making. WSS that we call an it's And believe time, just have year And coming Bill hard build, announced integration in on in -- Investor the big closed can proof to start the as we progress broadly to we've I segment about up just cover May I'll really update, a in newest have what closed characterize some us off, to own, of Obviously, great everybody, long-term to had points Deane. Day momentum. would record real that last that our I operate got teams closed we're year. weeks. tangible about the

That $XXX Just ramping. plan. was before briefly, side, do the focus And that we've about to meet the Obviously, last to can well that cost a Deane, thing tracking of close. on are talked 'XX the rate we run our lot you the on. on cost work synergies, revenue in really were synergies able we're million

momentum. but teams in jump few D.C., synergies. to across steal have gun X we're the again, the going And up. have on synergies proof before a of really X revenue great the thunder weeks some our can't to in closing. share team's don't there. segments I nice of going get here examples to You you're to points But revenue ramped want those And But

expansion your to on And maybe international point. specifically

Europe. U.S., the starting making the to in side got progress the we're large and momentum that are that. work on we've in Americas capital quicker the working or services scale really, X build X side. starting I'd probe some of investigate We've to kind of got that We we're that say, on are we're projects But outside in

are And the so But of -- longer of really the tail synergy. the that's teams momentum just with I'm I part our happy been the always that making.

X it before just Bill. other to Maybe comment I hand

And reverse a posted by see very the call more You've I WSS team results X in distracting. seen what you with did outstanding to we the have specifically and QX integration in dewatering just an been services, be can that's important recently quarter results, can make. not we where This to come. and integration. our slowed that segment, assessment with point the And

So Bill, maybe?

our just project. X the to XX-year of water And maybe million investment with mean, I project be over Yes. months, that recognition XX outsourced a key recognized an the a customers. It's next support will Obviously, first revenue Deane, it years. about there's to plant X/X by great $XXX-plus and upfront win it's balance and the large team. the of over XX hydrogen

a excited that, through large see continue that. and strong we look year. about revenue funnel that provide. has wins So The of the through, to really opportunities as Sticky got recurring progress will we to project continued that team work

improvement -- that's a I just I'm very and looking growth analyst to coming, there's would that be there's about But That's not to get But what all as the an good algorithm. expectation the meeting sense know just at optimization inward run just asking the walls that's to margin about front the question, second to I up. hear. really there's that of company. And coming be portfolio want anything And targeted. will a going of X

period, opportunities? period of to this that kind Are still want you any upside this M&A? of on I don't portfolio during you new at just are focused during optimization? Just growth of looking miss And

focused the goal with pretty the me. it's that's the my the X be #X And decade, it obviously year, Evoqua growth. process past extremely our above-market mean year taking deployment in I No, in years. it's executing much been and drive of acquisition that the key over the This Day on future Investor hit our question, a with messages built past on this and we're platform by be synergies. really our up will priority mantra. great to is over bolstered that's on in I'll Look, execution especially you Evoqua the of

And with point leadership team very line data building and super place and in here price. on in X is think a X% here. that's I've of leverage I'm line, I we're we're volume of and quite team's our our investors, QX been Look, vocal It's look, a But of our secret. beginning what in new so frankly. proud mindset. not the top up good about X% top our operating

And growth want And pro that. we're XX% so of make expanding at a again, good that a in is to QX we roughly We're example sure almost profitable driving on our margins. incrementals forma basis.

And about inward the when we talk would leave really simplify Deane, our it's we're I with, to thing doing grow the And to business of business. focus, we both. our some about you have

but inform our in standpoint, mapping going and capital those to to deployment where And and weeks, margin some really that's accretive that's into And consistent a with focused mantra we've up are. in a few wrapped just more value we'll markets focus. to high-growth deployment. we're the work into going be get And opportunities capital the so that here from we're more on going be

the So others team that and a with here and sharing forward look we to weeks. looks few forward, in you

Mike The Baird. with next question from comes Halloran

So a couple here.

a taking impressions sink culture, And [indiscernible] step just you are momentum into are Bill, do you as there, X, maybe messaging far? the how back X as seeing, so XXX-plus are through you've months been of the impressions year-to-date in here, to First, sink days, starting kind the initial what what, people? now. the you've the What far X pushing you're to have been

And as into January continuing in now to turning believe out feel good the had start a in where my a I with figure did We're I great a a remarks X days. the start -- not this we build got didn't good question. not -- up believe on on Deane but about QX. about we teed which seen that We crank. I'd first We here. platform, team executing start, and cold momentum this we that say we right? just we've XXX momentum how you've great to mention we XXXX. opening did have We coming that's are. No, we're me, that

With [ only the which strategic of part refine the just value our year, capture when last but COO with deploying and the a really about margins, of kind I'm I'm Board. service really session opportunity transaction. with the around to ] priorities goal is scaling teams, the growth, I of in those themes Evoqua deployment. And And Simplification, and to mentioned from having what strategy through of were we're Deane. more seeing services. our not systematically out business that through I'm proud

progress the So that, pleased to see there. I'm

Obviously, on results economically the integration, and and I'm teams pleased culturally, seeing. obviously, there. both and Evoqua fantastically, momentum working we're the together But the we're coming progress to seeing, see our are

thing the to and think and all if want last because right have is don't execute go the culture, consistently. you most strategies me I have but then how important that's to to things the can hard you do, it's these you objectives

pleased our culture, last leadership coming 'XX. the engaged on doing time great XXX past so spent just our in the lot And year senior about are, a we year And at work road journey. high-impact probably end And but it's we're I've how, it a our long organization the of year And the ago we're about globally. top on this days of the started a where alignment. with team our XXX time. I'm seeing really we last into

to believe things. work achieve with ahead do us. of But I we of intention, can great lot and a have We that focus

So start. are. think I happy a not but good look, We're off we're where satisfied, we I'm to

you're an various perspective give of for And than then has it? on understand organic puts forma can if messaging or across that segments. it inflected the seeing for lot changed market One, second, like sort I'd question from of end overall you you more proxy have One, give some either what broad so a there not I terms line the the underlying twofold in the a of kind in to and perspective? are less a And if pro here. any just listen or to trend orders dynamics feels thought here, then or takes kind the company from of orders. so like in quarter notable

color Maybe I'll your I'll give let commentary Bill and some markets. open on question, up orders the on us

Yes.

at reported X%, was organic obviously, that. organic So The Xx more was than forma so X%. pro

Yes.

QX. I with of book-to-bill about changed. And that utilities, of greater and resiliency any was M&CS the different slowdown, orders the X around about not durability or lot momentum I'm for know with up results lot of across and Europe the talking really segment our been WSS quarter, model. So it's matter. been parts in municipalities good in in The our with we've funding has not rates, that the of And on supported Mike, the U.S. business remains of and this that than we're there's CapEx in in by still backlog Government And majority team especially end markets. a proud slowdown. OpEx you've seen trickling the X%. drivers healthy, lot secular our in that a trends. questions And of is backlog seeing favorable globally a with the conversion. that their in Demand coverage

and there. we've momentum though, got year-over-year, orders and are orders, win good up to continue We our

The right my said better think there. view. half what that largely watch demand of be think same. and we so we improve business areas be the what to second We in performance continue expected. think point we'll to things water. we the continue I on a some comp, on It about a from I applied is now So I got commentary where a we're talked are was lot Yes, would that working of

Research. The comes Melius from next question Scott with Davis

to Or yours, the after quarter Congrats in to output, a when is that but deal the on picture, find or natural here. trying ] the the likely -- I question above [ will those a the a synergies? like second taken if it on theoretical, good synergies be Matthew, integration-wise, you meaning guess through actions the track that's it the a have the little more getting first that kind input margin to days I XXX are -- into you of XXX invest that is business are derivative of it $XXX wonder, likely line? million you the synergy having of is, somewhat back or and a see target is output Big , show

Yes.

of If you're to cost transaction? part Evoqua synergies a the referring as the

Yes.

Yes.

So did announce when million deal. $XXX the look, did we we

line, you these at running is than somewhat a that tracking. I'm but this transaction. okay, do, kind capital also the that in on going make they the the straightforward, -- probably to to $XXX XXX, we more and office, a plane at to And that line there's we're capability And a we we this in of into bit cost somewhat help for us to synergies to bottom would of lot shift as more target line that's the deals much sure probably and of be easy pretty And paper of we're to deploy and higher it the when forward factories. easy work to going and top bag lot like, impressed, the XXX. and they're mixed of and fall investing and growth. Scott, really bottom Look, would It's back built but It they're lift they're a go that through overage they're only look looks procurement, than goes little we're million. have future. a the look whatever to going put It's upside growth. So half land sure half do

we're growth also So to help to ], that expand future. fuel [ tracking to going well, XXX to going deliver the we're and to but margins, we're continue think in above use I

improvement or the think ask But this And opportunity under the sense. Xylem of buckets over historically invested once is loved makes That newer a invested you an you when about or get question, I'd to what perhaps when second where like out changes around to over love CEO. get the as But to some stands feel under maybe areas use that some could you or the probably and bit mean, loved, you [indiscernible]? or rigor. only where of you mentioned specific areas a more you'd little the more if you cultural could perhaps -- see. you operational around like of I be guys

Yes.

hit about making you It's you've and progress first think simplify there. talk we're heard I the one. water. me culturally, think But I good

that's it boils I think what down to.

Over the years as margin us we've built see this some incredible platform, extent. conspired that you in can complexity And we little some of profile. have a against bit had our to

our do internally Xylem customer-backed So it's as and leveraging. tool we that customers, so so to as to mentality. It's do at to it is for not that we're like just colleagues. XX/XX simple There's inwardly business focused. but making one we're other well our that. have focus can serve be going we're And where super that's our inwards to we better focused, do customers tools

the mantra, I But and us and our product commercial is pay business the call that customers finer putting think to nature that haven't forward. of enough really focused the area going to we and focus execution just this business, been simplify for the I SKUs dividends think going I it's around what on big would probably of things has which

We'll few Matthew. you, Super in a all weeks. helpful. you Thank see

from with Citigroup. The next Andy question Kaplowitz comes

Matt, to you Applied I know you Water. mentioned continue watch

you there that a led X couple say did time. over that book-to-bill of won projects to think larger I you

going Is worse does it like you you thought? about you thought, than market? what what's you maybe the say better would on characterize thought, there? How sort of that So than

Yes. I'd say we largely it's what thought.

we're those. prior each of you in XX% If QXs, the look up X at

continue our single-digit it's what year. your We few to with performance. compare. cyclical line tough are a it's we in orders kind decline the bit out point, were have this we did, in in QX good low a larger It's of little So future. that There projects a do most that, expect But segment, to planned.

to do we're projects. ship. and QX is something markets watching more down. and future weakness continue plays in Europe of we So orders it's especially that. and book Europe really but well, not see Applied It's markets our developed where that's Europe in were into markets, for soft Obviously, our But Water. obviously, as emerging emerging was But in markets

be look, The difficult, long we're bit QX leading on indicators comps a we little continue the itself It in complexity the and lot in resolve And It's funnel, about that got will reduce in in to business half. in first feel that place to second of the just and and of confident we've feel a term. and Applied half. effort forward. going a we good initiatives monitoring But closely growth, headwind the Water. about redeploy

be affect of then and how wins about to at the steady new it race And PFAS Did little rules talk the PFAS impactful? slow how obviously, just EPA can Xylem. it impact? kind for was a is expected, you they about may regarding your but Helpful. Or bit more the change time think line all when

the glad it's race. final. rule Yes, we're latter. steady be to Look, slow, see It's the

PFAS time in the really we're We're impacted be and they anticipated that's of compliant. focused. the hours that some to They've after being really just rules contaminants matter. time on and we're have to emerging on LinkedIn longer final clarity on is for the we than leader And testing, had It in X for our to ready clarity with other the Now XX terms teams we rule utilities this space your Live need and removal, customer-centric, years shows well that proud initially our for of when line. road, point, bit little will a again, of positioned utilities long But providing PFAS today Look, really for to take comply. partner I'm in a the journey. X to a that we're customers. educate the

to people One have a if service over have XX we years, thing long-standing our work through differentiated continue that do done the but maybe I'd a And you last we've lot there, on we capture offering capture how out customers. there's it. viable, commercially capabilities thing installations PFAS do I a destroy work you -- still and this, know people Obviously, for say of the it's really we when the our don't the relationships lot to know of over is destruction technologies and technology. also PFAS,

our And work company on get and of Innovation going lot to Labs so after solution. a our team got now we've that with combined great

from question with next Blair The Bryan comes Oppenheimer.

on that of of kind there. the M&CS finer Great terms seem sequentially And Maybe whether kind should there's expectation to broad-based that productivity, points profitability one-time-ish the down then is year. on throughout drill the performance, offer the of will step that benefited volume in that margin on lastly up anything eye-catching margin consider front, still some mix we in price improve drivers, And in quarter? it results?

last realize chain. one. stronger with build this for incrementals. that Bryan, to restructuring take over journey extremely They some on haven't price leveraging challenges [indiscernible] they're EBITDA No, took few efficiencies Obviously, is the parts a underperforming They points It XXX levels output. backlog. historically able pricing, up supply with And deliver significant margin positive. been back significant productivity of well for I'd to I'll dealing delivered they with negative to customers outstanding to material the price to past then a business to volume. incremental up quarters, quarter. drove almost basis address That has due our incremental went to that say with a for They're the foundation labor challenges drive external some out production make XX% relative up material team now cost to and that just their to financial Yes. cost while. increase to actions an pretty internal that team been ramp

bit. with as a the year margins. that the we're at and in mix some the encouraged especially XX/XX record momentum initiatives. projects, normalizes that they'll ship in energy But space quarter exit first was teams or American North as We see here holds mix better some our bit mix a quarter, water bit second expectations The I plus little the lower-margin than impacts back started They've in mix did a towards half see the do meters. their really on that unfavorable but think original higher minus

I as exit So the year. phase, they're that produce we in just think will additional which tailwinds

happy with performance. their really So

won't step think sequentially It's we more the I just normalized will through go the quarter, It's the year. big progress of see now. of as as probably but strength first the in -- balance increase through probably we volumes a there as we up it's slightly the year.

overall. detail and to perspective you on mentioned [ Very Okay. to updated team's helpful be It that growth opportunities encouraging would positioning you money trends. touched for in. trickle the and your on Matthew, And ] PFAS great hear outlook is government IIJA there. just related starting

we at in I You've of given looking to to about been of phasing participate date, And reads seen some your the would very certainly to expectations and and tempering in the understandably spend, rollout, have front-end is everything. categories ultimate so, have going are pretty encouraging. but obligations outlays, in that the assume consistent funding acceleration just team

So evolving curious the how forward there think opportunity? your views are how and about should we

it next look, make the and that it's to on funding. I've stick going and turn nozzle -- with market the help Europe, our been over could I drip about going growth markets, wish hose but it's U.K., their just a little consistent go slow drift really it's faster, years. X this, other be or support and U.S. It's a in whether pretty and X to I to in Yes. in

that continue in of a have don't we at to long-range our jump how it. that's so coming We big look are terms incentives or in plan in. And subsidies

of on a layer in of at to how it's going market So just trickle growth. we be that's the look kind it. and top And

Jones with question Nathan The comes Stifel. next from

wanted price Several offset I know in the was I and years will comments ago, to productivity I've price had which target inflation. been about before, anticipation future the to Bill's something up that Matthew offset on it talked inflation. X pick Xylem's of for to plus

So there's change there. a significant

looking versus what than some you just about for inflation with will to on So to to entitlement implementing go you price little it that been think has a give I the guess, more look how historically? Xylem and aggressive color be,

Yes.

price material more approach been of at investments. inflation. handle our just end with of it's strategic to I focus about I the the balance let a month, really capture productivity talk think, with and I price inflation offset going and obviously, a and We're fund for pricing. has to -- looking us, mean, indirect to think the that then rising inflation we're SG&A our new

got process to have teams our it's value the to that to down, think capture productivity for just continue relative operational we the customers. and now and I us products refine the for to offer our

really looking the target price of spread that really and the manage teams. cost were going We We're to that's positive. forward,

follow-up my for question Matthew. guess I

next half that of big increased non-revenue and over think, in drought. Europe Western kind water, for funding Europe Southern government several of There's in Europe for on if the the an I any from on cycle that about Xylem's after parts in. XXXX trickling business years? material opportunities the talk in talked non-revenue [ next the ] there's focus you focus focus increases increased about You and water Can

I Yes, do.

help with into a Idrica platform systems. to that. Idrica is I think through AMI a entree There's opportunities of visualize our first lot leverage to platform great the that data

on that a Europe. utilities funding for out U.K. Europe U.K. water. in we're area there's non-revenue of Europe of you're especially across analytical across on AMP So the that's focus polluters on especially and working right, with lot and And big but in holding in globe, the And where cycle lot instrumentation, a there's in water. they're the with the a liable contaminated the environment focus also,

and an of on analytical So overlay region platform. that we and opportunity with in great a instrumentation Idrica metering see our partnership smart

with Giordano question Joe comes next The TD Cowen. from

exploring exposed or have currently lot if or talked currently So you maybe but about can just us there's either that capabilities a I on don't destruction And on through maybe that? where exactly internally PFAS, acquisition? through it, know maybe that talk like you're sampling you're we you

Yes.

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we've and bring the innovation destruction. to but that flow. to can commercial sensing capture on it can So in get then sensors proven happen lab Where PFAS, needs and And get we get and on need real-time sense to part a side. technology to of liabilities got be the sensing, the

the that So through Xylem Evoqua, on a those X obviously teams spend can our we working and teams needed it's legacy that labs. with are coming and are of faster and from our areas destruction move innovation and whether money real-time we believe there. sensing the together And getting less on innovation

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verticals. of our Yes. power I side, the look, on high-growth one excited. It's mean, we're

million win, about talk build win on in hydrogen. You heard $XXX the Bill big operate

than thunder we weeks a it about Investor our starting But steal there. won't the our probably is opportunity see opportunity. energy few think we Specific small have a center, win that revenue, it. I growth see part We're for of Actually, where data $XX here so at of synergy a to data up the driving shift one Day centers, coming to And currently do less in I of examples. million. us. it's is mix lots

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opportunity not have, some of be be definitely probably believe like It's other the going will So us. we but that it's you it maybe an do tailwind. a coverage for folks to

I question-and-answer turn for over the conference Pine concludes would This back our to remarks. session. any to closing like Matthew

your all Thank into further the May of wrap it We at see XX. Xylem's insights to to to many and Day thanks either there. hope forward then. then, we'll online everyone sharing And Well, priorities you best. you for Investor our up look we or who Until strategic in direction joined questions, person on today. and

The Thank conference has today's you for presentation. now concluded. attending

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