Xylem Inc. posted fourth quarter revenue of $1.373 billion, compared to $1.371 billion in the fourth quarter of 2019, essentially flat – a good result in a challenging pandemic environment. For the full year, Xylem reported $4.876 billion, compared to $5.249 billion in 2019, a 7.1-percent decrease.
Fourth quarter reported operating margin was 13 percent, and adjusted operating margin was 13.8 percent, both declining 120 basis points year over year. Adjusted EBITDA margin declined 170 basis points to 18.8 percent. COVID-related impacts and inflation drove the margin decline, exceeding productivity improvements and cost savings. Xylem generated net income of $148 million, or $0.82 per share, and adjusted net income of $145 million or $0.81 per share.
For the full year, the company reported operating margin of 7.5 percent, a drop of 180 basis points.
“Our team again delivered solid operational performance, exceeding expectations across all major indicators, including revenue, margin and EPS,” said Patrick Decker, president and CEO of Xylem. “We drove better-than-anticipated top-line improvements in all segments, taking full advantage of stabilizing demand, demonstrated by sequential gains globally, and with particularly strong performance in Europe and China. Our improved bottom-line performance reflects effective cost containment and supply chain execution through the pandemic, and over-delivery on our free cash flow conversion commitment and supply chain execution through the pandemic, and over-delivery on our free cash flow conversion commitments on the back of disciplined working capital management.
“That performance gives us positive momentum entering 2021 as our end markets showed encouraging signs of recovery in the fourth quarter, with healthy orders trends and significant backlog growth. We also delivered strong performance with our industry-leading digital portfolio, as the pandemic continues to accelerate customer adoption of digital technologies across the water sector. This clearly positions Xylem well in both the near and long term.”
Xylem is forecasting full year 2021 revenue in the range of $5.16 to $5.26 billion, up 6 to 8 percent on a reported basis and up 3 to 5 percent on an organic basis. The company expects full-year 2021 adjusted EBITDA margin in the range of 16.7 to 17.7 percent and adjusted operating margin in the range of 11.5 to 12.5 percent.
