Xylem Inc.

Please stand by, your program is about to begin. If you need assistance during the conference today, please press star zero. Welcome to the Xylem first quarter 2023 earnings conference call. At this time, all participants have been placed in a listen-only mode, and the floor will be open for your questions following the presentation. If you would like to ask a question at any time, please press star one on your telephone keypad. If at any point your question has been answered, you may remove yourself from the queue by pressing star two. So others can hear your questions clearly, we ask that you pick up your handset for best sound quality. Lastly, if you should require operator assistance, please press star zero. I would now like to turn the call over to Andrea Vanderberg, Vice President of Investor Relations. Please go ahead.

Thank you, operator. Good morning, everyone, and welcome to Xylem's first quarter 2023 earnings call. With me today are Chief Executive Officer Patrick Decker, Chief Financial Officer Sandy Rowland, and Chief Operating Officer Matthew Pine. They will provide their perspectives on Xylem's first quarter 2023 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 one 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 investor section of our website, www.Xylem.com. A replay of today's call will be available until midnight, May 11th. Please note the replay number, plus 1-800-925-9354 or plus 1-402-220-5384. Additionally, the call will be available for playback via the investor section of our website under the heading Investor Events. Please turn to slide two. We'll make some forward-looking statements on today's call, including references to future events or developments that we anticipate will or may occur in the future. These statements are subject to future risks and uncertainties, such as those factors described in Bound's most recent annual report on Form 10-K and subsequent reports filed with the SEC. Please note that the company undertakes no obligation to update any forward-looking statements publicly to reflect subsequent events or circumstances. and actual events or results could differ materially from those anticipated. Please turn to slide three. We've provided you with a summary of our key performance metrics, including both GAAP and non-GAAP metrics. For purposes of today's call, all references will be on an organic and or adjusted basis unless otherwise indicated. Now GAAP financials have been reconciled for you and are included in the appendix section of the presentation. Now, please turn to slide four, and I will turn the call over to our CEO, Patrick Decker.

Thanks, Andrea, and good morning, everyone. As we indicated in our press release this morning, the team delivered very strong operational performance in the first quarter, exceeding our expectations on revenue, margin, and earnings per share. Revenue grew 17%. Earnings per share was up 53%, and we delivered significant EBITDA margin expansion. driven by volume growth on modest supply chain improvements, productivity, and operating efficiency, as well as a healthy price-cost mix. We saw backlog growth of 8% alongside double-digit organic revenue growth in utilities, industrial, and commercial, and growth across all regions, most notably the U.S., Western Europe, and key emerging markets such as Africa, Latin America, and China. The team came into the year with good momentum and has capitalized on supply chain improvements and our competitive position to secure customer advantages and convert our backlog. The results reflect resilient underlying demand as evidenced by sequential orders growth in each segment, our very healthy $3.7 billion backlog, and a book-to-bill ratio greater than one in each segment. Given the team's operating discipline, the continued demand for our solutions, and the intensifying long-term secular trends in water, we're confident about our momentum and growth outlook. So based on that, we're raising our full-year organic revenue guidance to high single digits from mid-single digits. And we're raising our EPS guide. Of course, we'll continue to monitor demand trends given some macro uncertainty in the broader economy, especially for the second half of the year. but we remain confident in our position for the remainder of the year and beyond. Alongside this quarter's performance, we've also made great progress towards the combination of Xylem and Avoqua. Integration planning is well advanced, and all necessary approval processes are moving ahead as planned. We continue to expect the transaction to close by mid-year. We'll give more color on the Avoqua combination in a moment, as well as more detail on our outlook in markets and regions. But first, let me now hand it over to Sandy to review the quarter's results.