Xylem Reaffirms Growth Strategy and Digital Leadership at 2021 Investor Day

Provides Long-term Financial Framework and Updates Current Year Outlook

Global water technology company, Xylem (NYSE:XYL), will reaffirm its growth strategy and set out its long-term financial framework at its Investor Day, to be held today. Xylem President and CEO Patrick Decker, along with other senior leaders, will provide an update on the Company’s plans to drive above-market organic growth and margin expansion. It expects growth to reflect strong underlying demand, across geographies and end-markets.

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.

2021 Outlook

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.

A live stream and replay of the Investor Day event will be available, along with all presentation materials, on Investors Events | Xylem US.

About Xylem

Xylem (XYL) is a leading global water technology company committed to solving critical water and infrastructure challenges with innovation. Our more than 16,000 diverse employees delivered revenue of $4.88 billion in 2020. We are creating a more sustainable world by enabling our customers to optimize water and resource management, and helping communities in more than 150 countries become water-secure. Join us at www.xylem.com.

Forward-Looking Statements

This press release contains “forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Generally, the words “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “contemplate,” “predict,” “forecast,” “likely,” “believe,” “target,” “goal,” “will,” “could,” “would,” “should,” "potential," "may" and similar expressions or their negative, may, but are not necessary to, identify forward-looking statements. By their nature, forward-looking statements address uncertain matters and include any statements that are not historical, such as statements about our strategy, financial plans, outlook, objectives, plans, intentions or goals; or address possible or future results of operations or financial performance, including statements relating to orders, revenues, operating margins and earnings per share growth.

Although we believe that the expectations reflected in any of our forward-looking statements are reasonable, actual results could differ materially from those projected or assumed in any of our forward-looking statements. Our future financial condition and results of operations, as well as any forward-looking statements, are subject to change and to inherent risks and uncertainties, many of which are beyond our control. Additionally, many of these risks and uncertainties are, and may continue to be, amplified by the coronavirus (“COVID-19”) pandemic. Important factors that could cause our actual results, performance and achievements, or industry results to differ materially from estimates or projections contained in or implied by our forward-looking statements include, among others, the following: overall industry and economic conditions, including industrial, governmental and private sector spending and the strength of the residential and commercial real estate markets; geopolitical, regulatory, economic and other risks associated with international operations; continued uncertainty around the COVID-19 pandemic’s magnitude, duration and impacts on our business, operations, growth, and financial condition, as well as uncertainty around approved vaccines and the pace of recovery when the pandemic subsides; actual or potential other epidemics, pandemics or global health crises; manufacturing and operating cost increases due to inflation, prevailing price changes, tariffs and other factors; fluctuations in foreign currency exchange rates; disruption, competition and pricing pressures in the markets we serve; cybersecurity incidents or other disruptions of information technology systems on which we rely, or involving our products; disruptions in operations at our facilities or that of third parties upon which we rely; availability of products, parts, electronic components and raw materials from our supply chain; availability, regulation and interference with radio spectrum used by some of our products; our ability to retain and attract senior management and other key talent; uncertainty related to restructuring and realignment actions and related charges and savings; our ability to continue strategic investments for growth; our ability to successfully identify, execute and integrate acquisitions; risks relating to products, including defects, security, warranty and liability claims, and recalls; difficulty predicting our financial results, including uncertainties due to the nature of our short- and long-cycle businesses; volatility in our results due to weather conditions, including the effects of climate change; our ability to borrow or refinance our existing indebtedness and the availability of liquidity sufficient to meet our needs; risk of future impairments to goodwill and other intangible assets; failure to comply with, or changes in, laws or regulations, including those pertaining to anti-corruption, data privacy and security, export and import, competition, and the environment and climate change; changes in our effective tax rates or tax expenses; legal, governmental or regulatory claims, investigations or proceedings and associated contingent liabilities; and other factors set forth under “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2020 and in subsequent filings we make with the Securities and Exchange Commission.

All forward-looking statements made herein are based on information currently available to us as of the date of this press release. We undertake 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.

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