賽莱默 (XYL) 2022 Q2 法說會逐字稿

Welcome to the Xylem Second Quarter 2022 Earnings Conference Call. (Operator Instructions).

歡迎來到賽萊默 2022 年第二季度收益電話會議。 （操作員說明）。

I would now like to turn the call over to Andrea van der Berg, Vice President, Investor Relations.

我現在想將電話轉給投資者關係副總裁 Andrea van der Berg。

Good morning, everyone, and welcome to Xylem's Second Quarter 2022 Earnings Conference Call. With me today are Chief Executive Officer, Patrick Decker; and Chief Financial Officer, Sandy Rowland. They'll will provide their perspective on Xylem's second quarter 2022 results and discuss the third 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.

大家早上好，歡迎參加賽萊默 2022 年第二季度收益電話會議。今天和我在一起的是首席執行官帕特里克·德克爾；和首席財務官桑迪·羅蘭。他們將就賽萊默公司 2022 年第二季度的業績發表看法，並討論第三季度和全年的展望。在我們準備好的評論之後，我們將解決與電話中涵蓋的信息相關的問題。我會要求您保留一個問題和一個後續，然後返回隊列。

As a reminder, this call and our webcast are accompanied by a slide presentation available in the Investors section of our website, www.xylem.com. A replay of today's call will be available until midnight on August 9. Please note the replay number is +1-800-839-5676 or +1-402-220-2565.

提醒一下，本次電話會議和我們的網絡廣播附有幻燈片演示，可在我們網站 www.xylem.com 的“投資者”部分找到。今天電話的重播將持續到 8 月 9 日午夜。請注意，重播號碼是 +1-800-839-5676 或 +1-402-220-2565。

Additionally, the call will be available for playback via the Investors section of our website under the heading Investor Events. Please turn to Slide 2.

此外，該電話將可通過我們網站的“投資者”部分在“投資者事件”標題下播放。請轉到幻燈片 2。

We will 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 Xylem's most recent annual report on Form 10-K and subsequent reports filed with the SEC.

我們將對今天的電話會議做出一些前瞻性陳述，包括對我們預計將或可能在未來發生的未來事件或發展的引用。這些陳述受未來風險和不確定性的影響，例如賽萊默最近提交的 10-K 表格年度報告和隨後提交給 SEC 的報告中描述的那些因素。

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. We've provided you with a summary of our key performance metrics, including both GAAP and non-GAAP metrics in the appendix.

請注意，公司不承擔公開更新任何前瞻性陳述以反映後續事件或情況的義務，實際事件或結果可能與預期存在重大差異。我們為您提供了我們關鍵績效指標的摘要，包括附錄中的 GAAP 和非 GAAP 指標。

For purposes of today's call, all references will be on an adjusted basis, unless otherwise indicated, and non-GAAP financials have been reconciled for you and are also included in the Appendix section of the presentation. Now please turn to Slide 3, and I'll turn the call over to our CEO, Patrick Decker.

就今天的電話會議而言，除非另有說明，否則所有參考資料都將在調整的基礎上進行，並且非公認會計原則財務已為您對賬，並且也包含在演示文稿的附錄部分。現在請轉到幻燈片 3，我將把電話轉給我們的首席執行官 Patrick Decker。

Thanks, Andrea, and good morning, everyone. We're pleased to report that the team delivered a very strong second quarter performance on all key metrics and well ahead of our guidance. But the result builds on the momentum and underlying demand we saw in the first quarter with disciplined operational execution on strong fundamentals and a moderate easing in chip supply constraints.

謝謝，安德里亞，大家早上好。我們很高興地報告，該團隊在所有關鍵指標上都取得了非常強勁的第二季度業績，並且遠遠超過了我們的指導。但結果建立在我們在第一季度看到的勢頭和潛在需求的基礎上，在強勁的基本面和適度緩解芯片供應限制的情況下嚴格的運營執行。

Revenues grew 6% organically, surpassing our guide. The team's commercial performance was outstanding in all segments and supply improvements in M&CS and Water Infrastructure enabled increased conversion of orders into revenue. Geographically, the growth was broad-based, western Europe was up 9%, North America 6%; and emerging markets, excluding China, was up double digits. While China was down due to COVID lockdowns, backlogs continue to grow on underlying demand.

收入有機增長了 6%，超過了我們的指南。該團隊在所有領域的商業表現都非常出色，在 M&CS 和水基礎設施方面的供應改進提高了訂單轉化為收入的能力。從地域上看，增長基礎廣泛，西歐增長 9%，北美增長 6%；不包括中國在內的新興市場增長了兩位數。儘管中國因 COVID 封鎖而下降，但由於潛在需求，積壓訂單繼續增加。

In addition to organic revenue growth, the team posted 6% orders growth. That orders momentum reflects strong performance across each segment. Water Infrastructure set the strongest pace, growing orders 21% in the quarter. Our backlogs were up shortly versus last year, with digital solutions comprising more than half the total backlog. EBITDA margin also came in well ahead of our guidance. We delivered strong quarter-on-quarter expansion driven by disciplined execution. All of that good work delivered earnings per share of $0.66, which soundly beat our expectations. As you can see, some incremental improvement in chip supply came earlier than anticipated, and it had a strong positive impact on the quarter. To be clear, we don't believe chip supply will improve much more quickly than previously expected.

除了有機收入增長外，該團隊還公佈了 6% 的訂單增長。這種訂單勢頭反映了每個細分市場的強勁表現。水利基礎設施的步伐最為強勁，本季度訂單增長 21%。與去年相比，我們的積壓很快增加，數字解決方案佔總積壓的一半以上。 EBITDA 利潤率也遠高於我們的預期。在嚴格執行的推動下，我們實現了強勁的季度環比擴張。所有這些出色的工作帶來了每股 0.66 美元的收益，這完全超出了我們的預期。如您所見，芯片供應的一些增量改善比預期的要早，並且對本季度產生了強烈的積極影響。需要明確的是，我們認為芯片供應的改善速度不會比之前預期的快得多。

What we are seeing is a gradual improvement in supply, which provides further confidence in our second half outlook. The team also delivered pricing actions to mitigate inflation across all segments, and I want to give a big shout out to the entire team, including our distribution and channel partners for managing through a dynamic market environment. We combine those disciplined actions with productivity savings from simplifying the way we work and entirely offset inflation in the quarter.

我們看到的是供應的逐步改善，這為我們的下半年前景提供了進一步的信心。該團隊還採取了定價行動來緩解所有細分市場的通貨膨脹，我想向整個團隊大聲疾呼，包括我們的分銷和渠道合作夥伴，以便在動態的市場環境中進行管理。我們將這些有紀律的行動與通過簡化工作方式節省的生產力結合起來，並完全抵消了本季度的通貨膨脹。

We expect demand to remain resilient due to the essential nature of the services our customers need from us. So as you've seen in this morning's release, we are raising our organic revenue guidance to 8% to 10% growth for the full year, and we're raising the bottom end of our EPS range by $0.10. And -- we'll come back and discuss our overview of the macro environment in a few minutes, but let me hand it over now to Sandy for some additional color on the second quarter.

由於客戶需要我們提供的服務的基本性質，我們預計需求將保持彈性。因此，正如您在今天上午的新聞稿中所看到的，我們將全年有機收入增長預期提高至 8% 至 10%，並將每股收益範圍的下限提高 0.10 美元。而且 - 我們將在幾分鐘後回來討論我們對宏觀環境的概述，但現在讓我把它交給桑迪，以便在第二季度獲得一些額外的色彩。

Thanks, Patrick. Please turn to Slide 4. The team did a tremendous job, over-delivering on our commitments with disciplined execution on strong fundamentals and continuing demand. As a result, revenues grew globally, high single digit and mid-single digits in the U.S. In emerging markets, revenue grew low double digits, excluding China, which was slowed by ongoing COVID restrictions.

謝謝，帕特里克。請轉到幻燈片 4。團隊做得非常出色，在強大的基本面和持續的需求下嚴格執行我們的承諾，超額兌現了我們的承諾。因此，全球收入增長，美國為高個位數和中個位數。在新興市場，收入增長低至兩位數，不包括中國，由於持續的 COVID 限製而放緩。

In a moment, I'll detail performance by segment. But in short, utilities was up 2%, led by strength in Western Europe and the U.S. Industrial grew 12% on increasing activity in all geographies, particularly the U.S., Western Europe and Latin America. Commercial was down 1%. Strength in Western Europe was offset by continued U.S. supply chain challenges.

稍後，我將按部分詳細說明性能。但簡而言之，公用事業上漲 2%，其中西歐和美國的強勁表現領漲。由於所有地區，特別是美國、西歐和拉丁美洲的活動增加，公用事業增長了 12%。商業下跌 1%。西歐的實力被美國供應鏈的持續挑戰所抵消。

And residential was up 13%, led by commercial execution and backlog conversion in the U.S. Organic orders were up 6% in the quarter, with water infrastructure up 21% and AWS up 2%, partially offset by M&CS. Global demand continues to be strong, and our book-to-bill ratio was a healthy 1.2 in the quarter.

住宅增長 13%，主要是美國的商業執行和積壓轉換。本季度有機訂單增長 6%，水利基礎設施增長 21%，AWS 增長 2%，部分被 M&CS 抵消。全球需求持續強勁，本季度我們的訂單出貨比為 1.2 的健康水平。

EBITDA margin was 16.6%, well above our guided range, and that reflects a 240 basis point rise sequentially on strong commercial execution and discipline on discretionary costs. Price contributed 2 points of incremental revenue growth sequentially. As Patrick mentioned, pricing and productivity benefits combined more than offset inflation, and our EPS in the quarter was $0.66, coming in above expectations.

EBITDA 利潤率為 16.6%，遠高於我們的指導範圍，這反映了強勁的商業執行和可自由支配成本的約束，環比上升了 240 個基點。價格連續貢獻了 2 個百分點的增量收入增長。正如帕特里克所提到的，定價和生產力收益相結合，抵消了通貨膨脹，我們本季度的每股收益為 0.66 美元，高於預期。

Please turn to Slide 5, and I'll review the quarter's segment performance in a bit more detail. Water Infrastructure revenue exceeded expectations, growing 9% organically in the quarter. Industrial remained strong, driven by continued backlog conversion, and our U.S. wastewater utility business grew double digits as supply chain constraints improved throughout the quarter.

請轉到幻燈片 5，我將更詳細地回顧本季度的細分市場表現。水利基礎設施收入超出預期，本季度有機增長 9%。在持續積壓轉換的推動下，工業保持強勁，隨著整個季度供應鏈限制的改善，我們的美國廢水公用事業業務增長了兩位數。

Geographically, the U.S. and Western Europe were also up double digits, driven by robust transport demand in the U.S. and treatment applications in Western Europe, alongside strong dewatering growth. Emerging markets, excluding China, was up high single digits, driven by strength across Latin America and Africa. These markets were down mid-single digits, including China, due to COVID site access restrictions there.

從地理上看，美國和西歐也出現了兩位數的增長，這得益於美國強勁的運輸需求和西歐的處理應用以及強勁的脫水增長。受拉丁美洲和非洲實力的推動，除中國以外的新興市場上漲了個位數。由於那裡的 COVID 站點訪問限制，這些市場（包括中國）下跌了中個位數。

Orders in the second quarter were up 21% organically versus last year, with growth underpinned by strong underlying demand supported by large infrastructure projects in the U.S. and Canada. We also saw sustained demand in our wastewater utility business in North America and Western Europe. EBITDA margin for the segment was up 240 basis points as strong price realization, volume and productivity benefits more than offset inflation and investments.

第二季度的訂單與去年相比有機增長了 21%，增長得益於美國和加拿大大型基礎設施項目支持的強勁潛在需求。我們還看到北美和西歐的廢水公用事業業務需求持續增長。該部門的 EBITDA 利潤率上升了 240 個基點，因為強勁的價格實現、銷量和生產力收益超過了通貨膨脹和投資的抵消。

Please turn to Page 6. In the Applied Water segment, second quarter organic revenues grew 7%, modestly exceeding our expectations. Geographically, the U.S. was up high single digits with strength across industrial and residential, partially offset by supply chain constraints in the commercial business. Western Europe delivered low double-digit growth with healthy gains across all end markets, led by benefits from new energy-efficient product introductions.

請轉至第 6 頁。在應用水領域，第二季度有機收入增長了 7%，略高於我們的預期。從地理上看，美國在工業和住宅領域的實力強勁增長了個位數，部分被商業業務的供應鏈限制所抵消。西歐在所有終端市場都實現了兩位數的低增長，並在新的節能產品推出帶來的好處下取得了健康收益。

Emerging markets was up low single digits driven by strong industrial demand. Orders were up 2% organically and continued to outpace revenue with a book-to-bill ratio of 1.1 for the quarter. Segment's EBITDA margin declined 130 basis points compared to the prior year. And while price realization more than offset inflation, volume and mix for the quarter were negative. Despite lower volumes, demand remains robust as seen in our book-to-bill ratio. However, we expect to continue to deliver sequential EBITDA improvement as the benefit of pricing actions comes through our backlog.

在強勁的工業需求的推動下，新興市場上漲了個位數。訂單有機增長 2%，並繼續超過收入，本季度的訂單出貨比為 1.1。與去年相比，該部門的 EBITDA 利潤率下降了 130 個基點。雖然價格實現抵消了通貨膨脹，但本季度的銷量和組合都是負數。儘管銷量下降，但從我們的訂單出貨比來看，需求仍然強勁。然而，由於定價行動的好處來自我們的積壓，我們預計將繼續實現 EBITDA 的連續改善。

And now let's turn to Slide 7, and I'll cover our Measurement & Control Solutions business. M&TS exceeded expectations on strong demand and modestly better chip supply with revenue declining 2% organically. We also saw strong growth in our test and pipeline assessment services product lines. Geographically, the U.S. and Western Europe were down mid-single digits and emerging markets was up high single digits.

現在讓我們轉到幻燈片 7，我將介紹我們的測量和控制解決方案業務。 M&TS 在強勁的需求和適度改善的芯片供應方面超出預期，收入有機下降 2%。我們的測試和管道評估服務產品線也出現了強勁增長。從地理上看，美國和西歐下降了中個位數，而新興市場則上升了高個位數。

M&CS orders declined 9% organically in the quarter, due to lapping some large deals in North America and the U.K. Underlying demand for our AMI offering remains strong and orders continue to outpace revenue. We recorded a book-to-bill ratio of 1.4 and have built a backlog of over $2 billion.

由於北美和英國的一些大宗交易，本季度 M&CS 訂單有機下降 9%。對我們 AMI 產品的潛在需求仍然強勁，訂單繼續超過收入。我們的訂單出貨比為 1.4，積壓超過 20 億美元。

Segment EBITDA margin in the quarter was ahead of expectations, expanding 120 basis points sequentially on improved volumes. As supply chain stability improves and we convert our backlog, we will see strong margin accretion on higher volumes as we have previously discussed.

本季度的分部 EBITDA 利潤率超出預期，由於銷量增加，環比增長 120 個基點。隨著供應鏈穩定性的提高和我們轉換積壓訂單，我們將看到我們之前討論過的更高數量的強勁利潤增長。

And now let's turn to Slide 8 for an overview of cash flows and our balance sheet. In the second quarter, we generated free cash flow of $67 million, driven by income conversion, partially offset by higher working capital. Our financial position remains strong with $1.1 billion in cash and $1.9 billion of available liquidity. Net debt-to-EBITDA leverage is 1.5x.

現在讓我們轉到幻燈片 8，了解現金流和資產負債表的概覽。在第二季度，在收入轉換的推動下，我們產生了 6700 萬美元的自由現金流，部分被更高的營運資金所抵消。我們的財務狀況依然強勁，擁有 11 億美元的現金和 19 億美元的可用流動性。淨債務對 EBITDA 的槓桿率為 1.5 倍。

I'm going to turn to Slide 9, and I'll hand the call back to Patrick to look forward at the rest of the year.

我將轉到幻燈片 9，我會將電話轉回帕特里克，以期待今年餘下的時間。

Thanks, Sandy. As you've seen, the team is delivering strong results in a very dynamic environment. Given the prominence of discussions about macro uncertainty in the economy, it's worth spending a few minutes talking about our confidence and the resilience of underlying demand for Xylem's offerings. The aspect of our sector and our business model that gets most discussed in this context and for good reason, is that our offering is at the core of essential services through the ups and downs of economic cycles.

謝謝，桑迪。如您所見，該團隊在一個非常動態的環境中取得了出色的成果。鑑於有關經濟宏觀不確定性的討論很重要，值得花幾分鐘時間談談我們的信心以及對 Xylem 產品的潛在需求的彈性。在這種情況下，我們的行業和我們的商業模式得到最多討論的方面是有充分理由的，那就是我們的產品在經濟周期的起伏中處於基本服務的核心。

Cities and towns must provide essential water and wastewater services. So the demand associated with water management tends to be quite resilient. It's also important to understand the dynamics between OpEx versus CapEx across economic cycles, particularly for water utilities. OpEx spending is very stable, given the basic need for day-to-day water services. CapEx, which represents roughly 1/3 of spending on Xylem's offerings is focused on infrastructure expansion or refurbishment and it comes with longer regulatory and funding approvals.

城鎮必須提供基本的供水和污水處理服務。因此，與水資源管理相關的需求往往具有很強的彈性。了解跨經濟周期的運營支出與資本支出之間的動態也很重要，尤其是對於水務公司而言。鑑於日常供水服務的基本需求，OpEx 支出非常穩定。資本支出約佔 Xylem 產品支出的 1/3，主要用於基礎設施擴展或翻新，並且需要更長的監管和資金批准。

So spending against these projects once approved historically has not wavered to a material extent. And this is not just a U.S. dynamic, but it applies globally. You see it in Europe, both at the regional level. For example, with the EU's recovery and resilience funding and at the country level as seen in the U.K.'s AMP process. Similarly, infrastructure funding is embedded in China's 5-year planning cycle.

因此，這些項目的支出在歷史上一旦獲得批准並沒有發生實質性的動搖。這不僅是美國的動態，而且適用於全球。你可以在歐洲看到它，無論是在區域層面。例如，從英國的 AMP 流程中可以看出，歐盟的複蘇和復原力資金以及國家層面的資金。同樣，基礎設施資金也包含在中國的 5 年規劃週期中。

And of course, you're all familiar with the recent U.S. federal infrastructure funding and the time lines on which the state-revolving funds at work. Those structural advantages of the sector, however, are only a benefit if our portfolio delivers distinctive value to our customers through the cycle.

當然，你們都熟悉最近的美國聯邦基礎設施資金以及州循環資金發揮作用的時間表。然而，只有當我們的投資組合在整個週期內為我們的客戶提供獨特的價值時，該行業的這些結構性優勢才會帶來好處。

For many of our customers, value is defined in terms of becoming more efficient, and that means modernizing their infrastructure with digital technologies to make their networks more affordable. Our AMI metrology backlogs offer a proof point about the resilience of that demand.

對於我們的許多客戶而言，價值的定義是提高效率，這意味著使用數字技術對其基礎設施進行現代化改造，以使他們的網絡更加實惠。我們的 AMI 計量積壓為該需求的彈性提供了一個證明點。

Despite the ongoing chip supply challenges that have dogged the tech sector for the last year, our backlogs have continued to grow. Our distinctive data and communications driven AMI solutions deliver a step change in both efficiency and resilience for utilities. AMI represents now roughly 1/3 of all water meters in the U.S., which shows the progress of adoption, but also the potential for future growth. Given the budgetary pressures the utilities face, both to generate revenue and reduce water loss, smart meters will remain a top imperative.

儘管去年一直困擾著科技行業的芯片供應挑戰，但我們的積壓訂單仍在繼續增長。我們獨特的數據和通信驅動的 AMI 解決方案為公用事業的效率和彈性帶來了巨大的變化。 AMI 現在約占美國所有水錶的 1/3，這顯示了採用的進展，也顯示了未來的增長潛力。鑑於公用事業公司面臨著創造收入和減少水損失的預算壓力，智能電錶仍將是當務之急。

One other demand trend that will persist in the cycle and, in fact, is set to increase is the growing response to climate change. Cities around the world are committing to net 0 emissions. At the same time, they are investing in mitigating the impacts of climate change that are already here, like those we've seen this summer in the form of historic and tragic flooding in the U.S. and Asia. These are generational challenges.

另一個將在周期中持續存在並且實際上將增加的需求趨勢是對氣候變化的日益增長的反應。世界各地的城市都致力於實現淨零排放。與此同時，他們正在投資減輕已經存在的氣候變化的影響，就像我們今年夏天在美國和亞洲看到的歷史性和悲慘的洪水一樣。這些都是代際挑戰。

Innovation and new approaches are absolutely essential to solving them because water management is a significant carbon contributor, accounting for up to 10% of greenhouse gas emissions globally. In commercial and residential markets, cities have begun introducing building regulations to reduce emissions, including efficient water management standards for both regional construction and retrofits and the utility market, which produces greenhouse gas emissions equal to the entire global shipping industry. It's going to be required to reduce its carbon intensity in line with the commitments of their cities, municipalities and countries.

創新和新方法對於解決這些問題絕對必不可少，因為水管理是一個重要的碳貢獻者，佔全球溫室氣體排放量的 10%。在商業和住宅市場，城市已經開始引入建築法規以減少排放，包括區域建築和改造以及公用事業市場的高效水資源管理標準，其產生的溫室氣體排放量相當於整個全球航運業。它將被要求根據其城市、市政當局和國家的承諾降低其碳強度。

And we at Xylem are an outright leader in this space and are in a unique position to support our customers and their sustainability commitments. You may have seen that we released our annual sustainability report in May. Among all the progress made against our 2025 goals, I'd highlight that we enabled our customers to reduce their carbon footprint by 730,000 metric tons in 2021 alone using our technology. That is the equivalent of taking 160,000 cars off the road. And we're on track to help them reduce their emissions by 2.8 million metric tons by 2025.

賽萊默是這一領域的絕對領導者，在支持我們的客戶及其可持續發展承諾方面處於獨特的地位。您可能已經看到我們在 5 月發布了年度可持續發展報告。在針對 2025 年目標取得的所有進展中，我要強調的是，僅在 2021 年，我們就使我們的客戶能夠使用我們的技術將他們的碳足跡減少 730,000 公噸。這相當於減少 160,000 輛汽車上路。我們有望在 2025 年前幫助他們減少 280 萬公噸的排放量。

So stepping back, we're very confident that the macro forces driving our underlying demand will continue. We're also confident that Xylem is better positioned than ever to create value by helping our customers respond to them.

所以退一步說，我們非常有信心推動我們潛在需求的宏觀力量將繼續存在。我們也相信，賽萊默比以往任何時候都更有能力通過幫助我們的客戶回應來創造價值。

So now I'll turn it back over to Sandy for more detail and color on our outlook and guide.

所以現在我將把它交給桑迪，以獲得更多關於我們的展望和指南的細節和色彩。

Thanks, Patrick. Consistent with our previous presentations, we've provided key facts for each end market in the appendix. The outlook across our end markets has broadly improved. We expect healthy underlying demand will continue through the remainder of the year with improved price cost mix and modest improvements in supply chain. We now expect our utility business to grow mid-single digits, up from low single digits.

謝謝，帕特里克。與我們之前的介紹一致，我們在附錄中提供了每個終端市場的關鍵事實。我們終端市場的前景已普遍改善。我們預計，隨著價格成本組合的改善和供應鏈的適度改善，健康的潛在需求將持續到今年剩餘時間。我們現在預計我們的公用事業業務將從低個位數增長到中個位數。

On the wastewater side, we now expect mid-single-digit growth, up from low to mid-single-digit growth on improved backlog conversion and resilient global demand. the outlook for longer-term capital project spending and bid activity remains solid globally. For clean water utilities, we now expect mid-single-digit growth, up from flat. The main driver is earlier than expected easing of chip supply constraints.

在廢水方面，我們現在預計由於積壓轉化率的提高和全球需求的彈性，將出現中個位數增長，從低到中個位數增長。全球長期資本項目支出和投標活動的前景依然穩健。對於清潔水公用事業，我們現在預計中個位數增長，高於持平。主要驅動因素是芯片供應限制的放鬆早於預期。

Although supply has improved, lead times continue to remain elevated and our volumes continue to be constrained. We also expect momentum in our test and pipeline assessment services business to continue due to increasing focus in our end markets on infrastructure and climate challenges as evidenced by our strong backlog.

儘管供應有所改善，但交貨時間繼續延長，我們的產量繼續受到限制。我們還預計，由於我們的終端市場越來越關注基礎設施和氣候挑戰，我們的測試和管道評估服務業務將繼續保持勢頭，我們的大量積壓證明了這一點。

Please turn to Slide 11. Looking at the industrial end market, we now expect high single-digit to low double-digit growth, up from mid-single-digit growth, our increased activity in the U.S. and Europe and strong global demand for our solutions. We continue to expect the commercial end market to deliver mid-single to high single-digit growth on solid replacement activity and new introductions in the U.S. and Europe.

請轉到幻燈片 11。看看工業終端市場，我們現在預計從中個位數增長到兩位數的高個位數增長，我們在美國和歐洲的活動增加以及全球對我們的強勁需求解決方案。我們繼續預計商業終端市場將在美國和歐洲的固體更換活動和新引進方面實現中個位數到高個位數的增長。

In residential, our smallest end market, we now expect healthy demand to drive double-digit growth, up from mid-single digits. As a reminder, the majority of our commercial and residential end market exposure is replacement driven versus new construction.

在住宅這個我們最小的終端市場，我們現在預計健康的需求將推動兩位數的增長，高於中個位數。提醒一下，我們的大部分商業和住宅終端市場敞口是更換驅動而不是新建。

Now let's turn to Slide 12, and I'll walk you through our updated guidance. Our out-performance in the second quarter gives us confidence to increase our full year guidance for organic revenue growth and to raise the low end of the adjusted EPS range. We now expect full year organic revenue growth of 8% to 10%, up from 4% to 6%, and we have raised the bottom end of our EPS range by $0.10. The increase in the reported revenue guidance is more modest as the strength of the dollar offsets roughly half of our operational improvements.

現在讓我們轉到幻燈片 12，我將向您介紹我們更新後的指南。我們在第二季度的出色表現使我們有信心提高全年有機收入增長的指引，並提高調整後每股收益範圍的下限。我們現在預計全年有機收入增長 8% 至 10%，從 4% 上升至 6%，我們將每股收益範圍的下限提高了 0.10 美元。由於美元的強勢抵消了我們運營改進的大約一半，因此報告的收入指導的增長更為溫和。

We have modified our assumptions on our basket of currency exposure, which is included in the appendix. These changes result in an incremental $0.05 headwind to the full year EPS guide. And this is on top of a $0.10 EPS FX headwind that we discussed last quarter.

我們已經修改了我們對一攬子貨幣敞口的假設，該假設包含在附錄中。這些變化導致全年每股收益指南增加 0.05 美元。這是我們上個季度討論的 0.10 美元每股收益外匯逆風之上的。

On Slide 13, we've shown how our guidance breaks down by segment. We now expect high single-digit growth in Water Infrastructure, up from mid-single digits and low double-digit growth in Applied Water, up from high single digits, driven by disciplined commercial execution and backlog conversion on continuing strong demand in both segments.

在幻燈片 13 上，我們展示了我們的指導如何按細分市場細分。我們現在預計水基礎設施將實現高個位數增長，高於中個位數，應用水務的低兩位數增長（高於高個位數），這是由嚴格的商業執行和積壓轉換以及這兩個領域持續強勁的需求推動的。

We now expect Measurement & Control Solutions to be up mid-single digits, up from flat. This reflects the out-performance in the first half from chip supply improving sooner than expected. For 2022, we are raising the bottom end of our adjusted EBITDA margin range, which is now 16.5% to 17%. And [this year you'll see] adjusted EPS range of $2.50 to $2.70 that I just mentioned.

我們現在預計測量和控制解決方案將從持平上升到中個位數。這反映了上半年由於芯片供應改善快於預期而表現出色。 2022 年，我們將調整後 EBITDA 利潤率範圍的下限提高到 16.5% 至 17%。 [今年你會看到]我剛才提到的調整後的每股收益範圍為 2.50 美元至 2.70 美元。

We now expect free cash flow conversion to be approximately 90% of net income. We're carrying about a month of extra inventory to mitigate the risk of supply chain disruptions and provide continuity of service to our customers. We expect to bring conversion back to historical levels as supply chain stabilize, enabling us to return to free cash flow conversion of at least 100%. We have provided you with a number of other full year assumptions on this slide to supplement your models.

我們現在預計自由現金流轉換約為淨收入的 90%。我們準備了大約一個月的額外庫存，以降低供應鏈中斷的風險並為我們的客戶提供服務的連續性。隨著供應鏈的穩定，我們希望將轉化率恢復到歷史水平，使我們能夠恢復至少 100% 的自由現金流轉化率。我們在這張幻燈片上為您提供了許多其他全年假設，以補充您的模型。

And now drilling down on the third quarter, we anticipate total company organic revenues will be up 10% to 12%. This includes mid-single-digit growth in water infrastructure and mid-double-digit growth in Applied Water and M&CS. We expect third quarter adjusted EBITDA margin to be in the range of 16.5% to 17%, a sequential improvement over the prior quarter.

現在深入研究第三季度，我們預計公司總有機收入將增長 10% 至 12%。這包括水基礎設施的中個位數增長以及應用水和 M&CS 的中位數增長。我們預計第三季度調整後的 EBITDA 利潤率將在 16.5% 至 17% 之間，比上一季度有所改善。

And with that, please turn to Slide 14, and I'll turn the call back over to Patrick for closing comments.

有了這個，請轉到幻燈片 14，我會將電話轉回帕特里克以結束評論。

Thanks, Sandy. We saw the power of some short-term swings this past quarter. A small improvement in chip supply had a big impact. Currency movements have been offering what you could call a challenging forecasting environment and the unexpected duration of COVID shutdowns held China back. Just a quick note on China. Our team and our customers there have been continuing to serve their communities under very tough conditions, given the extensive restrictions in place to manage COVID. I'm incredibly proud of the team.

謝謝，桑迪。我們在上個季度看到了一些短期波動的力量。芯片供應的小幅改善產生了很大的影響。貨幣走勢一直在提供您可以稱之為具有挑戰性的預測環境，而 COVID 關閉的意外持續時間使中國退縮了。簡單介紹一下中國。鑑於管理 COVID 的廣泛限制，我們的團隊和那裡的客戶一直在非常艱難的條件下為他們的社區服務。我為這個團隊感到無比自豪。

We expect to see progressive improvements in the market for the second half and have full confidence China will continue to be a source of innovation and growth for the long run. In the context of short-term uncertainty, [our job is] -- demands through the unexpected, meeting those challenges is what being a good operator is all about. And the team has certainly been doing that. The team's strong operational execution is built on the same foundation as our 2025 growth and strategic milestones, a consistent story at the heart of our investment thesis.

我們預計下半年市場將逐步改善，並有信心中國將繼續成為長期創新和增長的源泉。在短期不確定性的背景下，[我們的工作是]——通過意想不到的需求，應對這些挑戰是成為一名優秀運營商的全部意義所在。團隊當然一直在這樣做。團隊強大的運營執行力建立在與我們 2025 年增長和戰略里程碑相同的基礎之上，這是我們投資論點的核心一致故事。

We are building on our leadership position as a technology company with a durable business model. We're benefiting from long-term secular trends of rising demand, driven by water and climate-related challenges. We're driving above-market growth and margin expansion as we digitize our portfolio to serve our customers' imperative to be more efficient.

作為一家擁有持久商業模式的科技公司，我們正在鞏固我們的領先地位。在水和氣候相關挑戰的推動下，我們正受益於需求增長的長期長期趨勢。我們正在推動高於市場的增長和利潤率擴張，因為我們將我們的產品組合數字化，以滿足客戶提高效率的需求。

We're successfully putting sustainability at the center of everything we do across our company, our customers and our communities. And we'll create additional stakeholder value with disciplined capital allocation as opportunities warrant. Strong continued demand and the kind of performance we're seeing from the Xylem team show our ability to deliver on that thesis.

我們成功地將可持續發展作為我們在公司、客戶和社區所做的一切工作的核心。我們將在機會允許的情況下通過嚴格的資本分配創造額外的利益相關者價值。強勁的持續需求和我們從賽萊默團隊看到的那種表現表明我們有能力實現這一論點。

And with that, operator, let's open it up for Q&A.

有了這個，操作員，讓我們打開它進行問答。

(Operator Instructions) Our first question is coming from Deane Dray with RBC Capital Markets.

（操作員說明）我們的第一個問題來自 RBC Capital Markets 的 Deane Dray。

Maybe we can start with the better news on the chip supply. And we've been hearing that from other manufacturers that it's starting to improve gradually, and your commentary is pretty consistent with that. But just some additional color, what you see in the quarter? And what's that outlook for the second half, how much of the backlog in digital might you be able to ship?

也許我們可以從芯片供應的好消息開始。我們從其他製造商那裡聽說它開始逐漸改善，您的評論與此非常一致。但只是一些額外的顏色，你在這個季度看到了什麼？下半年的前景如何，您可以運送多少積壓的數字產品？

Yes. Thanks for the question. We certainly were pleased to see definitely slightly better chip supply throughout the quarter. And I think if you go back to where we were from a low point from a revenue perspective last year in Q4, we're under $300 million of revenue. We've clawed that back and we're approaching 350 in the second quarter. So it was definitely a bigger step-up than we had anticipated.

是的。謝謝你的問題。我們當然很高興看到整個季度的芯片供應肯定略有改善。而且我認為，如果您從去年第四季度的收入角度回到我們的低點，我們的收入將低於 3 億美元。我們已經收回了這一點，我們在第二季度接近 350。因此，這絕對是比我們預期的更大的進步。

As we look at the second half of the year, Deane, we see a more modest increase from Q2 to Q3. And and then a little more -- another step-up into Q4. We think we're going to exit the year really in line with what we had modeled. We've just been benefiting from some better supply earlier in the year. And I give credit to the team that has been in really close contact with all of our key suppliers leaning in and also being opportunistic in the spot market so that we could take care of our customers.

當我們回顧今年下半年時，迪恩，我們看到從第二季度到第三季度的增長較為溫和。然後再多一點——進入第四季度。我們認為我們將真正按照我們的模型退出這一年。今年早些時候，我們剛剛從一些更好的供應中受益。我要感謝與我們所有主要供應商保持密切聯繫的團隊，他們在現貨市場上傾斜並投機取巧，以便我們能夠照顧到我們的客戶。

And I would just add, Deane, that -- sorry for my voice, that, in addition to that, the team has done work not just on landing chips in the spot market, but a lot of the redesign work that we talked about in past quarters is nearing completion. And so there was an added cost in the quarter for that, but it was there to really make sure we secured supply for our customers. And we also shipped out more mechanical meters in the interim in order to bridge that gap while we're waiting on the chip to come through. So there were multiple dynamics but as Sandy laid out, things certainly got better, and we feel more confident now about the second half than we did before.

我想補充一下，Deane，我的聲音很抱歉，除此之外，團隊不僅在現貨市場上做了一些工作，而且還做了很多我們談到的重新設計工作過去的幾個季度即將完成。因此，本季度為此增加了成本，但這確實是為了確保我們為客戶確保供應。我們還在此期間運送了更多的機械儀表，以便在我們等待芯片通過時彌合這一差距。所以有多種動力，但正如桑迪所說，事情肯定會變得更好，我們現在對下半場比以前更有信心。

That's real helpful. And just the context of this and I'm not sure if you can give specific numbers, but our expectation is that the profitability of these digitally enhanced products and services they're roughly 50% more profitable than the legacy -- I don't want to say dumb, but not digitally enabled products and services. Is it still that magnitude of difference in margins on the digital side?

這真的很有幫助。只是在這個背景下，我不確定你是否可以給出具體數字，但我們的期望是這些數字增強產品和服務的盈利能力比傳統產品和服務的盈利能力大約高出 50%——我不知道想說啞巴，但不是數字化產品和服務。數字方面的利潤率差異仍然如此巨大嗎？

Yes. Deane, the margins are clearly richer on the digital side. And we saw that in our mix in M&CS in the quarter. We were about 5% less digital this year compared to last year. And I think that was with the purpose of taking care of our customers and putting product into the hands of our customers where -- to keep them up and going. And so that took a more mechanical meaning this time around. I think as we look at longer term where we expect to land from a margin perspective, nothing has changed structurally from what we laid out in our Investor Day last year in September.

是的。迪恩，數字方面的利潤顯然更豐富。我們在本季度的 M&CS 組合中看到了這一點。與去年相比，我們今年的數字化減少了約 5%。我認為這樣做的目的是照顧我們的客戶，並將產品交到我們的客戶手中——讓他們保持正常運轉。所以這一次有了更機械的意義。我認為，當我們從利潤率的角度來看我們預計會降落的長期時，我們在去年 9 月的投資者日中所闡述的結構沒有任何變化。

If anything, gained the backlog has gotten stronger, especially with some of the large deals that we brought in over the last few quarters and the bidding pipeline remains very robust, just given how early we still are in terms of conversion to MI across especially the U.S. on the water side of things. So we expect that runway to be there for quite some time.

如果有的話，積壓的訂單變得越來越多，特別是在過去幾個季度我們帶來的一些大宗交易中，並且投標渠道仍然非常強勁，只是考慮到我們在轉換為 MI 方面仍然處於早期階段，尤其是美國在水方面。所以我們預計這條跑道會在那裡存在相當長的一段時間。

Got it. And then just last question for Sandy, on the free cash flow. We've seen most of the companies this earnings season, trimming free cash flow guidance, all because of higher working capital commitments, both supply chain inefficiencies and big demand. Just -- how do you -- the expectation for returning to 100% free cash flow, is that really dependent on the supply chain? And what would be the time frame?

知道了。然後是桑迪的最後一個問題，關於自由現金流。我們已經看到大多數公司在本財報季都削減了自由現金流指引，這一切都是因為營運資金承諾增加、供應鏈效率低下和需求量大。只是 - 你如何 - 恢復 100% 自由現金流的期望，真的取決於供應鏈嗎？時間框架是什麼？

Yes. I think a great question, Deane. When we built our plan for 2022, we expected that supply chains would be meaningful -- meaningfully improved in the second half of the year. And we're not seeing big changes yet. And therefore, we think it's prudent to carry some extra inventory with the [leaning out] delivering on revenue and delivering on our backlog. So there's a couple of things that are going on. Lead times are still elongated. We're still having problems where we're missing 1 or 2 key components, and then we're not able to get the entire solution out the door.

是的。我認為一個很好的問題，迪恩。當我們制定 2022 年計劃時，我們預計供應鏈將是有意義的——在下半年得到有意義的改善。而且我們還沒有看到大的變化。因此，我們認為謹慎的做法是攜帶一些額外的庫存，以提供收入和交付我們的積壓訂單。所以有幾件事正在發生。交貨時間仍在延長。我們仍然遇到缺少 1 或 2 個關鍵組件的問題，然後我們無法推出整個解決方案。

And of course, inflation is bringing up the overall balances in our inventory. But we will bring that down. We'd expect that is certainly in 2023 at the latest, and it will be a key focus item for our teams. This is not something that we plan to do for a long period of time.

當然，通貨膨脹正在提高我們庫存的整體餘額。但我們會降低它。我們預計最晚肯定是在 2023 年，這將是我們團隊的重點關注項目。這不是我們計劃在很長一段時間內做的事情。

And from a segment perspective, Deane, it was most notable in Applied Water, where, again, we've had continued knock-on effects, whether be supply chain, [castings] coming out of China due to COVID. Obviously, we expect those to continue somewhat in the second half. And that's why, to Sandy's point, we brought in an extra month of inventory into that business. So it's very visible. We know exactly what it is. It's totally under control. It's simply a matter of meaning to do that in order to supply customers and maintain that demand.

從細分市場的角度來看，迪恩，最引人注目的是應用水，我們再次受到持續的連鎖反應，無論是供應鏈，[鑄件]由於 COVID 而從中國出口。顯然，我們預計這些將在下半年繼續。這就是為什麼在桑迪看來，我們為該業務增加了一個月的庫存。所以非常顯眼。我們確切地知道它是什麼。它完全在控制之中。這樣做只是為了滿足客戶並維持這種需求的意義問題。

We will take our next question from Nathan Jones with Stifel.

我們將帶著 Stifel 回答 Nathan Jones 的下一個問題。

Going back to M&CS. I think Deane asked enough questions on the chip supply and how that's progressing. Maybe you could talk a little bit about the expected profitability of that business as we say revenue pick up in the third quarter and then you've talked about a bigger step-up in the fourth quarter, assuming that it's probably going to continue to improve going into next year.

回到 M&CS。我認為 Deane 就芯片供應以及進展情況提出了足夠多的問題。也許你可以談談該業務的預期盈利能力，因為我們說第三季度收入回升，然後你談到第四季度更大的增長，假設它可能會繼續改善進入明年。

Can you talk about the path to getting back to those profitability targets that you laid out at the Investor Day? Where might we be able to get to in 2023. How quickly can you get to that kind of expected margin level on the business.

你能談談回到你在投資者日制定的盈利目標的途徑嗎？到 2023 年，我們可能會達到什麼水平。你能多快達到這種預期的業務利潤率水平。

Yes. I think, obviously, a really important question. I think one thing I want to call out is we've already seen from the low point in Q4, 300 basis points of margin expansion from Q4 to Q2. And that's evolving because of the higher volumes, partially constrained by some of the things that we referenced earlier in the call, the mechanical mix, the redesign costs on optimal manufacturing flows.

是的。我認為，顯然，這是一個非常重要的問題。我想我想指出的一件事是，我們已經從第四季度的低點看到，從第四季度到第二季度利潤率擴大了 300 個基點。由於更高的產量，這種情況正在發展，部分受到我們在電話中早些時候提到的一些事情的限制，機械組合，優化製造流程的重新設計成本。

But as we look out into the back half of the year, there's not as much of a pickup from a revenue perspective. But we would expect margins to kind of continue along the same trajectory that we've recognized from Q4 Q to Q2. And I'm not going to give guidance on '23 on this call. But as we look out to '24, '25, we don't see anything structurally different about where margins should land in that time period.

但是，當我們展望今年下半年時，從收入的角度來看並沒有那麼大的回升。但我們預計利潤率將沿著我們從第四季度到第二季度認識到的相同軌跡繼續。我不會在 23 年的電話會議上提供指導。但是，當我們展望 24 年和 25 年時，我們沒有看到在那個時期的利潤率應該落在哪裡的結構上有任何不同。

Okay. My follow-up is Europe and industrial. One of the biggest concerns we hear from investors is Europe and industrial not only are you not seeing that. I think that was 1 of the stronger areas in terms of growth in the quarter and solid orders there. Maybe you can talk about the trends that you're seeing there? And then if you can talk about the resilience of the industrial business in general, particularly the light industrial side of the business and how you would expect that to react in the potential for a recession in Europe?

好的。我的後續行動是歐洲和工業。我們從投資者那裡聽到的最大擔憂之一是歐洲和工業，您不僅沒有看到這一點。我認為就本季度的增長和穩定的訂單而言，這是其中一個較強勁的領域。也許你可以談談你在那裡看到的趨勢？然後，如果你能談談工業業務的總體彈性，特別是輕工業業務的彈性，你會如何看待歐洲經濟衰退的可能性？

Yes. I think for us, Europe has been a real bright spot. And it's not just in 1 segment. It's really across the entire portfolio, we've seen good revenues in Europe. We've seen good orders. I know there's a lot of concern about potential recession in Europe and the industrial market in particular, I think 1 thing I would call out is that if you look at our dewatering business, for example, which is more industrial, we've done a lot to diversify the end markets there, much less exposure to oil and gas than we did in the prior recession.

是的。我認為對我們來說，歐洲一直是一個真正的亮點。而且它不只是在 1 段中。它確實貫穿整個投資組合，我們在歐洲看到了良好的收入。我們看到了良好的訂單。我知道人們對歐洲的潛在衰退，特別是工業市場有很多擔憂，我想我要指出的一件事是，如果你看看我們的脫水業務，例如，它更工業化，我們已經做了一個使那裡的終端市場多樣化，石油和天然氣的敞口比我們在上一次經濟衰退中所做的要少得多。

I think we're down to about 1% revenue in that end market. And then, of course, there, we've also been diversifying from a geographic perspective.

我認為我們在該終端市場上的收入下降到大約 1%。然後，當然，在那裡，我們也一直在從地理角度進行多樣化。

Again, I would just offer up, Nate, you publicly recall this, but if you go back over time and look at previous kind of industrial recessions back in kind of the 2015, '16 time frame, our European business still held up in terms of growth during that time frame because the results are much less cyclical there given the end market exposure that we've got. And also -- so for example, I think the numbers in 2016, Europe still grew 3% despite being in the middle of an industrial recession. So -- we feel pretty good about that. We think it would be that resilient again.

再說一次，我只想提出，內特，你公開回憶起這一點，但如果你回顧過去，看看 2015 年，'16 時間框架內以前的工業衰退，我們的歐洲業務仍然保持穩定在那段時間範圍內的增長，因為考慮到我們所擁有的終端市場敞口，結果的周期性要小得多。而且 - 例如，我認為 2016 年的數字，儘管歐洲處於工業衰退之中，但仍增長了 3%。所以——我們對此感覺很好。我們認為它會再次具有彈性。

I think, as you well know, if we were to first see any softening in orders, which we've not seen to this point, it would be in our short-cycle businesses, which would be more Applied Water and dewatering. And again, we've not seen that yet. Our backlog continues to grow, good book-to-bill, and again, obviously, there would be actions that we would take, if we began to see those metrics coming through as we've done in the past.

我認為，如您所知，如果我們首先看到訂單出現任何疲軟（到目前為止我們還沒有看到），那將是在我們的短週期業務中，這將是更多的應用水和脫水。再說一次，我們還沒有看到。我們的積壓工作繼續增長，良好的帳單到帳單，而且，顯然，如果我們開始像過去那樣看到這些指標通過，我們會採取行動。

We can phase investments. We still have further productivity opportunities to go after across the organization, and we're sitting on record backlogs. And the fact that we've been able to weather the chip supply issue without losing any business and those deals and backlog is pretty strong statement about the resilience of our pipeline and the markets that we serve.

我們可以分階段投資。我們仍然有更多的生產力機會去追求整個組織，而且我們正處於創紀錄的積壓中。事實上，我們已經能夠在不失去任何業務以及這些交易和積壓的情況下度過芯片供應問題，這一事實非常有力地說明了我們管道的彈性和我們所服務的市場。

We will take our next question from Connor Lynagh with Morgan Stanley.

我們將向摩根士丹利的康納·林納提出下一個問題。

Just wanted to talk a little bit about cash flow and capital allocation. So on the cash flow side, your full year free cash flow guidance does seem to anticipate some pretty good relief on working capital investment in the back half. I'm just thinking through, it looks like you have a CapEx acceleration.

只是想談談現金流和資本配置。因此，在現金流方面，您的全年自由現金流指導似乎確實預計下半年的營運資金投資會有所緩解。我只是在想，看起來你有資本支出加速。

Obviously, we can sort of get to the EBITDA number. So -- is that because you think that you will be starting to work down inventories? Or is that just sort of a seasonal release in working capital that you're anticipating?

顯然，我們可以得到 EBITDA 數字。那麼 - 是因為您認為您將開始減少庫存嗎？或者這只是您所期待的營運資金的季節性釋放？

Yes. No. Great question. We do have a plan to start working down some of our inventory through the back half of the year. It's nothing dramatic. It's going to take place over the next 6 months on a very gradual basis. And I think we are -- our teams have been doing a good job on the elements around working capital. We are going to continue to lean in hard on collections and make sure we bring those in and that -- we've seen really good results through the pandemic on our collections front.

是的。不，好問題。我們確實有計劃在今年下半年開始減少我們的一些庫存。這沒什麼戲劇性的。這將在接下來的 6 個月內以非常漸進的方式進行。我認為我們是——我們的團隊在營運資金方面做得很好。我們將繼續大力支持收藏品，並確保我們把它們帶進來——我們已經在收藏品方面看到了非常好的結果。

And similarly, we're doing work around getting better terms from a payable perspective, I may have referenced it on another call. We have a supply chain financing program that's quite active and it allows our supplier base to take advantage of our credit rating. We're getting more of our supplier base engaged on that program, and that will give us some incremental days from a payables perspective.

同樣，我們正在努力從應付賬款的角度獲得更好的條款，我可能在另一個電話會議上引用了它。我們有一個非常活躍的供應鏈融資計劃，它允許我們的供應商基礎利用我們的信用評級。我們正在讓更多的供應商參與該計劃，從應付賬款的角度來看，這將給我們一些額外的日子。

And I think it all ties in to being prudent also around cost and discretionary spend and CapEx spend to make sure we start seeing a better cash conversion in the second half, which lines up with our historical seasonality as well.

而且我認為這一切都與在成本和可自由支配支出以及資本支出支出方面保持謹慎有關，以確保我們在下半年開始看到更好的現金轉換，這也符合我們的歷史季節性。

Makes sense. And then I was noticing it looks like you slowed your cadence of buybacks in the quarter. Is that driven by any concern around the state of the business? Is it because you're starting to see more opportunities emerge on M&A? Just any color on what you're thinking there?

說得通。然後我注意到您似乎在本季度放慢了回購的節奏。這是出於對業務狀況的擔憂嗎？是不是因為你開始看到更多的併購機會出現？只是你在想什麼顏色？

Yes. So we haven't changed our strategy, our capital allocation strategy. We've typically bought stock back in the first quarter, which is when we have a vesting date in our equity compensation programs. And so this was nothing that we bought back stock in Q1. We wrapped that up at -- in the March time frame. And as we look at our M&A funnel and pipeline, we still see a really -- we're really encouraged by the funnel, the range of opportunities and that remains a higher priority for us than buying back our stock.

是的。所以我們沒有改變我們的策略，我們的資本配置策略。我們通常在第一季度回購股票，也就是我們在股權補償計劃中有歸屬日期的時候。所以這不是我們在第一季度回購股票的東西。我們在三月份的時間框架內完成了這一點。當我們查看我們的併購漏斗和管道時，我們仍然看到一個真正的 - 我們對漏斗、機會範圍感到非常鼓舞，這對我們來說仍然比回購我們的股票更重要。

Yes, I would just add to that, if you look at our balance sheet, we've got upwards of about $4 billion in dry powder, and we are not hesitant to do a deal when it needs to be done. But again, that would all be in advanced in serving our strategy that we've laid out. As Sandy said, the pipeline is very active, all different sizes of opportunities in that pipeline. But again, we want to continue to be disciplined and selective with an eye towards significant value creation. And again, as I always say, it takes 2 to tango.

是的，我想補充一點，如果你看看我們的資產負債表，我們有超過 40 億美元的干粉，當需要完成交易時，我們會毫不猶豫地進行交易。但同樣，這一切都將在服務於我們制定的戰略方面處於領先地位。正如桑迪所說，管道非常活躍，管道中有各種不同規模的機會。但同樣，我們希望繼續保持紀律性和選擇性，著眼於創造重大價值。再說一次，正如我常說的，探戈需要 2 分鐘。

Right. Makes sense. I'll leave that comment for somebody else to ask about.

正確的。說得通。我會把這個評論留給別人問。

We will take our next question from Mike Halloran with Baird.

我們將向 Mike Halloran 和 Baird 提出下一個問題。

Obviously, you guys seem pretty confident in the underlying trends of the end market. I know you've spent a lot of time talking about the -- your ability to react as things do so here or there. But obviously, backlog is really strong. Maybe you could talk a little bit about how that visibility from the backlog stretches out here? How does that compare to what that normal visibility looks like?

顯然，你們似乎對終端市場的潛在趨勢非常有信心。我知道你已經花了很多時間談論——你在這里或那裡做出反應的能力。但很明顯，積壓工作真的很強大。也許您可以談談積壓工作的可見性如何延伸到這裡？這與正常的能見度相比如何？

And any color you can around how much -- how booked out you are as we get to out years at this point?

和任何顏色，你可以大約多少 - 在這一點上我們已經預訂了多少年？

Yes. I think, Mike, really good question. Nothing has changed structurally about our backlog. If you look at our AWS business, that has a larger book-to-bill ratio than the other segments, and we're carrying record backlogs across really all 3 of our segments.

是的。我認為，邁克，非常好的問題。我們的積壓工作在結構上沒有任何變化。如果你看看我們的 AWS 業務，它的訂單出貨比比其他部門要高，而且我們的所有 3 個部門都有創紀錄的積壓。

And we did see really strong book-to-bill ratios across the portfolio in the quarter from an orders perspective. As we look at our water infrastructure and M&CS backlogs, they stretch out for longer periods of time. Water Infrastructure is in the middle. We have our transport business, which turns fairly quickly and a treatment business that has projects that stand out for multiple years.

從訂單的角度來看，我們確實在本季度的投資組合中看到了非常強勁的訂單出貨比。當我們查看我們的水基礎設施和 M&CS 積壓時，它們會延長更長的時間。水利基礎設施位於中間。我們的運輸業務發展迅速，處理業務的項目多年來脫穎而出。

And then M&TS is the longest, coupled with the supply chain constraints, which don't magically disappear at any 1 month, we have a $2 billion backlog there. So that's going to take a couple of years plus to work through.

然後 M&TS 是最長的，再加上供應鏈限制，這些限制不會在任何 1 個月內神奇地消失，我們有 20 億美元的積壓訂單。所以這需要幾年時間才能完成。

Appreciate that. And then the price cost cadence sequential improvement, catching up on the price side relative to the inflation pressures. How does that work in the back half of the year on an EBITDA dollar basis when you think your whole? What do you think margins start reflecting the positive pricing you're putting through?

感謝。然後價格成本節奏環比改善，相對於通脹壓力在價格方面迎頭趕上。當你考慮你的整體時，這在今年下半年以 EBITDA 美元為基礎如何運作？您認為利潤率如何開始反映您正在實施的積極定價？

Yes. I mean, we are really pleased with what we saw from a price perspective. We've leaned in harder on price because inflation is also coming in higher throughout the year.A big milestone, we did get price cost positive in the quarter from a dollar perspective, given the magnitude, it's slightly dilutive to the rate in Q2, Q3 is a little bit lower from a seasonality -- a little bit lower on the revenue side compared to Q2 just because of the typical seasonality in our water infrastructure business.

是的。我的意思是，我們對從價格角度看到的情況感到非常滿意。我們更加傾向於價格，因為全年通貨膨脹率也在上升。一個重要的里程碑，從美元的角度來看，我們確實在本季度獲得了正的價格成本，考慮到規模，它略微稀釋了第二季度的利率，由於我們的水利基礎設施業務具有典型的季節性，第三季度的季節性略低——與第二季度相比，收入方面略低。

And so in Q3, we expect to continue to be price/cost positive on a dollar basis, probably still in the same order of magnitude about 30 basis points this quarter in that order of magnitude dilutive from a rate perspective. And then we think in Q4 we should be positive again from a dollar perspective and neutral from a rate perspective.

因此，在第三季度，我們預計以美元為基礎的價格/成本將繼續保持正數，從利率的角度來看，本季度可能仍處於同一數量級約 30 個基點的稀釋水平。然後我們認為在第四季度，從美元的角度來看，我們應該再次保持樂觀，從利率的角度來看應該是中性的。

So really good progress across the portfolio to reach this important milestone.

因此，整個投資組合取得了非常好的進展，以達到這個重要的里程碑。

Mike, if I could just go back to your question on visibility and backlog. I think the other dimension that we feel much better about now than we even did in the last industrial downturn is the visibility and the closest we have to our channel partners, our distribution channel partners, both here in the U.S. as well as in Europe, where we have meaningful indirect channel business and we've got much better visibility and coordination with them now than we did back then.

邁克，如果我能回到你關於可見性和積壓的問題。我認為我們現在感覺比上一次工業低迷時期要好得多的另一個方面是我們與美國和歐洲的渠道合作夥伴、分銷渠道合作夥伴的知名度和最接近，我們擁有有意義的間接渠道業務，而且我們現在與他們的可見性和協調性比當時要好得多。

So we got hit with a couple of surprises last time around in a quarter, or two, we feel much better about that not happening going forward. So they are also our eyes and ears of what's going on in the marketplace at a local level.

因此，我們在上一季度或兩季度左右受到了一些驚喜的打擊，我們對未來不會發生這種情況感覺好多了。因此，它們也是我們在地方一級市場上發生的事情的眼睛和耳朵。

We will take our next question from Scott Davis with Melius Research.

我們將與 Melius Research 的 Scott Davis 一起回答我們的下一個問題。

A couple of little things here. I mean, the supply chain issues, I mean, chips we've been talking about for quite some time, have the other supply chain challenges gotten a lot better, the non-chip related stuff, getting materials faster, easier.

這裡有幾件小事。我的意思是，供應鏈問題，我的意思是，我們已經談論了很長一段時間的芯片，其他供應鏈挑戰是否變得更好，非芯片相關的東西，更快，更容易獲得材料。

Yes. Scott, another great question. It's a mixed bag. I'd say supply chain in the aggregate has modestly improved versus Q1, but it really does vary across the 3 segments. So as we mentioned, chip supply getting a bit better within M&CS, but lead times are still long, but they're not worse, they're getting better. And water infrastructure -- we have seen improvement in lead times from our European factories into the U.S. And certainly, what our infrastructure has benefited over the last year by offering more competitive lead times due to better vertical integration that we did within the company.

是的。斯科特，另一個很好的問題。這是一個混合包。我想說總體上的供應鏈與第一季度相比有所改善，但在三個部分之間確實存在差異。因此，正如我們所提到的，M&CS 的芯片供應情況有所好轉，但交貨時間仍然很長，但情況並沒有變差，而是在變好。和水利基礎設施——我們已經看到從我們的歐洲工廠到美國的交貨時間有所改善。當然，由於我們在公司內部所做的更好的垂直整合，我們的基礎設施在去年通過提供更具競爭力的交貨時間而受益。

But then I would say, as we mentioned earlier, 1 of the reasons we're carrying an extra month of inventory is because of applied water. It's not limited to applied water, but that's the main driver. And that's really, again, just knock on effects from China, mainly castings, but also we see continued delays in shipping and logistics that we're just having to work through. So I'd say it's getting marginally better, across the board, but it really varies by segment.

但是我想說，正如我們之前提到的，我們多存一個月的原因之一是因為應用了水。它不僅限於應用水，但這是主要驅動力。這真的是再次受到來自中國的影響，主要是鑄件，但我們也看到運輸和物流的持續延誤，我們只需要解決這個問題。所以我想說它在整體上變得稍微好一點，但它確實因細分市場而異。

And we talked a little bit about China. I -- how does it work? When you think about their controlled economy like that and their CapEx budgets and how they think about cadencing projects and stuff, when you have the lockdowns like you've had this year, does it -- does it push the projects to 2023, but then the existing '23 plan remains and then they try to catch up, does everything pushed right? I mean how does China kind of work?

我們談了一點關於中國的事情。我——它是如何工作的？當您考慮他們像這樣受控的經濟和他們的資本支出預算以及他們如何看待節奏項目和其他東西時，當您像今年一樣進行鎖定時，是嗎-是否會將項目推到 2023 年，但隨後現有的 '23 計劃仍然存在，然後他們試圖迎頭趕上，一切順利嗎？我的意思是中國是如何運作的？

Sure, yes. So -- and obviously, it's a big market. So it does vary depending upon the vertical, the end markets that we're talking about. What we find is that the utility side is much more stable. So right now, the issue for us has not been so much for our plants not to be up and running. We returned back to kind of normal levels in terms of staffing and presence back in May, I believe it was.

當然，是的。所以——很明顯，這是一個很大的市場。因此，它確實取決於我們正在談論的垂直終端市場。我們發現，效用方面更加穩定。所以現在，對我們來說，問題並不是我們的工廠不能啟動和運行。我們在 5 月份的人員配備和存在方面恢復到了正常水平，我相信是這樣。

It really though is logistics and transportation have been at a standstill, because customers and colleagues are required to be at home. These impact all kinds of projects, Scott, but mainly the government-funded projects. But that's not a bad thing because those projects don't go away. They simply shift to the right. And we would see from the past that there would be an accelerated catch-up as the restrictions are lifted. So we've got plenty of capacity in our factories. And as to the distribution partners to get this stuff out. It's simply a matter of sites not being open. I mean customer job sites, utilities not being open. That's what we're waiting to see recovery.

實際上，物流和運輸一直處於停滯狀態，因為客戶和同事都必須在家。這些影響各種項目，斯科特，但主要是政府資助的項目。但這並不是一件壞事，因為這些項目不會消失。他們只是向右移動。我們會從過去看到，隨著限制的解除，將會加速追趕。所以我們的工廠有足夠的產能。至於分銷合作夥伴把這些東西拿出來。這只是網站不開放的問題。我的意思是客戶工作網站，公用事業不開放。這就是我們等待看到的複蘇。

We're not assuming that we're going to get much of any recovery in the second half of this year, but we do expect that to recover to come back quite strongly in 2023. But no structural changes in our view on the attractiveness of China. This is simply things moving to the right.

我們並不認為我們會在今年下半年獲得大部分複蘇，但我們確實預計這種複蘇將在 2023 年強勁反彈。但我們對吸引力的看法沒有結構性變化中國。這只是事情向右移動。

We will take our next question from Brian Lee with Goldman Sachs.

我們將向高盛的 Brian Lee 提出下一個問題。

This is Miguel on for Brian. Just a quick question on the supply chain on the chips. I know a lot has been talked about there, but it sounds like on chip supply, it's definitely -- commentary sounds it's improving, but some of your peers have still been kind of been more cautious on the chip supply.

這是布賴恩的米格爾。只是一個關於芯片供應鏈的快速問題。我知道那裡已經談論了很多，但聽起來像芯片供應，這絕對是——評論聽起來它正在改善，但你的一些同行仍然對芯片供應更加謹慎。

Is there anything on the supply side or what you're doing specifically that maybe is helping you out a bit more recently versus peers?

供應方面是否有任何事情或您正在做的具體事情可能會幫助您最近與同行相比有所幫助？

I can't speak for all of our peers. I think we have been working very -- as we said earlier, working very closely with our suppliers, the trajectory on where we'll exit the year is very consistent with what we expected. It's been good work to get some better chip supply earlier. And also within M&CS, there have been some other product lines that have been strong as well.

我不能代表我們所有的同齡人。我認為我們一直在非常 - 正如我們之前所說，與我們的供應商密切合作，我們將在今年退出的軌跡與我們的預期非常一致。儘早獲得更好的芯片供應是一項很好的工作。在 M&CS 內部，還有一些其他產品線也很強大。

It's not only the chips that drove the upside in M&CS. So we're seeing good results from our test business, some traction with our pipeline assessment services business. And so that broader portfolio is also helping us get out ahead of what we had modeled for the year.

推動 M&CS 上漲的不僅僅是芯片。因此，我們的測試業務取得了不錯的成績，我們的管道評估服務業務也獲得了一些牽引力。因此，更廣泛的投資組合也幫助我們超越了我們今年的模型。

The only other thing I would add, which I'm cautious to share too much on this because we've got good visibility, but it's not perfect because things could change. But I do think, depending upon who you're including in that peer group, it talks about digital, we've got somewhat higher concentration.

我要補充的唯一另一件事是，我謹慎地在這方面分享太多，因為我們有很好的知名度，但這並不完美，因為事情可能會發生變化。但我確實認為，取決於你在那個同行群體中包括誰，它談到了數字化，我們的注意力會更高一些。

Therefore, we get a bit more leverage with suppliers. And we've got some really strong relationships with our partners, whether it be the direct suppliers from the chips and wafers, or whether it be our partnership with Flex, we aggregate our demand, and I think it gives us a stronger platform, at least stronger than what would be if we were doing it all on our own.

因此，我們對供應商有更多的影響力。我們與合作夥伴建立了非常牢固的關係，無論是芯片和晶圓的直接供應商，還是我們與 Flex 的合作夥伴關係，我們匯總了我們的需求，我認為它為我們提供了一個更強大的平台，在至少比我們自己做這一切要強。

So some of these things, it's also just -- I mean, the number of calls that I and others have been on with the leaders of these companies and you just got -- the team has been working it. And we've had to be more patient than we wanted to. But I think those relationships and those investments and relationships are beginning to pay off.

所以其中一些事情，也只是 - 我的意思是，我和其他人與這些公司的領導者打過電話的次數，而你剛剛得到 - 團隊一直在努力。我們必須比我們想要的更有耐心。但我認為這些關係以及那些投資和關係開始得到回報。

We will take our next question from Saree Boroditsky with Jefferies.

我們將向 Jefferies 的 Saree Boroditsky 提出下一個問題。

So you highlighted strong growth in dewatering applications across most geographies. Could you talk about the benefit that had on March during the quarter? And should that continue to be a margin tailwind for the remainder of the year?

因此，您強調了大多數地區脫水應用的強勁增長。您能否談談本季度 3 月份的收益？這是否應該繼續成為今年剩餘時間的利潤順風？

Yes. So if you look at water infrastructure business sits, we saw a really good margin performance. That business has been the most resilient when we look over the past couple of years. And certainly, the recovery in dewatering is a contributing factor.

是的。因此，如果您查看水利基礎設施業務，我們會看到非常好的利潤率表現。當我們回顧過去幾年時，該業務一直是最具彈性的。當然，脫水中的恢復是一個促成因素。

And so a lot of hard work has gone into our dewatering business, both to diversify it from an end market perspective, from a geographic perspective. We've made some purposeful investments in our fleet to make it more modern and current, and we're seeing that upside on the rental side as well.

因此，我們在脫水業務方面付出了很多努力，無論是從終端市場的角度，還是從地理角度來看，都是為了使其多樣化。我們對我們的機隊進行了一些有目的的投資，以使其更加現代和現代，我們也看到了租賃方面的優勢。

So certainly, dewatering positive, seeing good orders momentum there continue in the quarter, on a global basis. So certainly helpful to the margin expansion story with the water infrastructure.

因此，可以肯定的是，在全球範圍內，本季度繼續保持良好的訂單勢頭，積極脫水。所以肯定有助於水利基礎設施的利潤擴張故事。

Yes. And I would just add, it's -- I mean, certainly it's one of the shorter cycle businesses that we've got, and it's not immune to cyclical downturn, just like it hits it up on the way up. I think the other area that we benefited from is full on integration within our commercial team, most notably in North America, where I think it's been upgraded and leadership. I think there have been investments that Sandy has talked about.

是的。我只想補充一點，它是——我的意思是，它當然是我們擁有的較短週期的業務之一，它不能免受週期性衰退的影響，就像它在上升過程中遇到的一樣。我認為我們受益的另一個領域是我們商業團隊的全面整合，尤其是在北美，我認為它已經升級和領導。我認為桑迪談到了一些投資。

And the diversification has really been away from heavy oil and gas and mining and looking at more utility muni opportunities where there's visibility with some of our other businesses in the portfolio. So good lead generation. by sharing leads with our field services teams. So we're in the early stages of that, but we've had some really good growth rates there. We're up maybe, yes, double digit here through the first half of the year on the order side, and we hope that continues.

多元化實際上已經遠離重油、天然氣和採礦業，而是尋找更多公用事業機會，這些機會在我們投資組合中的其他一些業務中具有可見性。那麼好的潛在客戶一代。通過與我們的現場服務團隊分享線索。所以我們正處於早期階段，但我們已經有一些非常好的增長率。我們可能會上漲，是的，在今年上半年的訂單方面達到兩位數，我們希望這種情況繼續下去。

Okay. And then obviously, you've talked a lot about M&CS and kind of the strong growth outlook there, but organic orders hours declined in the quarter. So just wondering do you expect to see orders turn positive again?

好的。然後很明顯，你已經談了很多關於 M&CS 以及那裡的強勁增長前景，但本季度的有機訂單小時數有所下降。所以只是想知道您是否希望看到訂單再次轉正？

I think when orders -- we've had a real surge in orders over the past several quarters and so while the headline print on orders for M&CS may have been negative, when you look at the orders from a dollar perspective, we're still running well ahead of what we're able to convert from a revenue perspective.

我認為，當訂單——在過去幾個季度中，我們的訂單確實激增，所以雖然 M&CS 訂單的標題印刷可能是負面的，但當你從美元的角度來看訂單時，我們仍然從收入的角度來看，遠遠領先於我們能夠轉換的東西。

I think we had $475 million of orders in the quarter, which is still a really good number relative to our revenue. The pipeline continues to be robust. We're still in the early innings of the overall AMI conversion journey.

我認為本季度我們有 4.75 億美元的訂單，相對於我們的收入而言，這仍然是一個非常好的數字。管道繼續強勁。我們仍處於整個 AMI 轉換之旅的早期階段。

About 1/3 of the industry has converted to AMI in North America. So there's still a lot of runway and we have a really differentiated product there that's gaining traction.

北美約有 1/3 的行業已轉換為 AMI。所以仍然有很多跑道，我們在那裡有一個真正差異化的產品，它正在獲得牽引力。

Yes. And I think as we said earlier, I know none of us ever like to be talking about difficult year-over-year comps when you have big deals in a quarter last year, but it is -- there is some element of the nature of that in the business. And we'll certainly be even more transparent going forward as to how big are those deals, what other big deals are coming because it is a big, rich pipeline right now that we're bidding on. And so we have been running hot for the better part of 1.5 years or so on some big deals being booked. So but we remain very positive on that pipeline.

是的。而且我認為，正如我們之前所說，我知道當您在去年一個季度有大筆交易時，我們誰都不喜歡談論困難的同比比較，但它是 - 有一些性質的元素在業務中。我們肯定會更加透明地了解這些交易有多大，還有哪些大宗交易即將到來，因為我們現在正在競標的是一個龐大而豐富的管道。因此，我們在 1.5 年左右的大部分時間裡一直很火爆，一些大筆交易被預訂了。因此，但我們對該管道仍然非常積極。

We will take our next question from Andrew Kaplowitz with Citigroup.

我們將向花旗集團的 Andrew Kaplowitz 提出我們的下一個問題。

Patrick I said maybe you could talk about what you're seeing on the municipal water front and how [IAGA] funding may be starting to flow in. Have you seen any of that funding yet? And how are you thinking about that moving forward into 2023?

帕特里克，我說也許你可以談談你在市政海濱看到的情況以及 [IAGA] 資金如何開始流入。你看到任何資金了嗎？您如何看待 2023 年的發展？

Yes. No, we've really -- we've not seen -- I mean, well, first of all, we see demand in utilities very robust. And especially here, I mean, stable in Europe, good emerging markets, obviously, ex-China, and was really strong in the quarter here in North America. We really have not seen anything meaningful come through from a funding standpoint yet.

是的。不，我們真的 - 我們沒有看到 - 我的意思是，首先，我們看到公用事業的需求非常強勁。特別是在這裡，我的意思是，在歐洲穩定，良好的新興市場，顯然是中國以外的市場，並且在北美這個季度非常強勁。從資金的角度來看，我們真的還沒有看到任何有意義的事情發生。

So that would still be upside. And -- we talk a lot about the infrastructure bill here in the U.S. But as I mentioned in my prepared comments, you've also got the recovery and resilience funding going on in the EU. You've got at the country level in the U.K.'s 5-year process that we talk about. And then you've got the infrastructure funding that's embedded in China's 5-year planning cycle, which remains unchanged. So all those together, we think, really point to a very strong funding infrastructure for utility spend globally.

所以這仍然是有利的。而且 - 我們在美國談論了很多基礎設施法案。但正如我在準備好的評論中提到的那樣，歐盟也在進行複蘇和彈性資金。在我們談論的英國 5 年進程中，你已經在國家層面上進行了討論。然後你就得到了嵌入中國5年規劃週期的基礎設施資金，這個週期保持不變。因此，我們認為，所有這些共同表明，全球公用事業支出的融資基礎設施非常強大。

Got. That's helpful, Patrick. And I know, Sandy, you talked about price cost improving. Obviously, you've mentioned productivity in the past. It seems like it's also improving, but maybe you can talk about that, how constrained labor is and you're sort of pushing productivity as you go forward and how that impacts the overall price cost dynamic?

得到。這很有幫助，帕特里克。我知道，桑迪，你談到了價格成本的提高。顯然，您過去曾提到過生產力。看起來它也在改善，但也許你可以談談，勞動力是多麼受限制，你在前進的過程中正在推動生產力，以及這如何影響整體價格成本動態？

Yes. So I think we were price cost positive, excluding productivity in the quarter. So that was really encouraging. We have a pipeline of continuous improvement projects that we're driving across the portfolio. Some of that has been a little bit constrained this year as we've moved engineers off of continuous improvement projects on to redesign work. As Patrick talked about earlier in the call, as that work matures, and we move through the sort of the test and certification part of that process, we'll be able to bring some of our resources back and focus on continuous improvement projects and continue to pick up momentum on the productivity front as well. But I think looking across the globe, our teams are doing a good job there, and it's contributing to our margin improvement story on a quarter sequential basis.

是的。所以我認為我們的價格成本是積極的，不包括本季度的生產力。所以這真的很令人鼓舞。我們有一系列持續改進項目，我們正在整個投資組合中推動。由於我們已經將工程師從持續改進項目轉移到重新設計工作，因此今年其中一些受到了一些限制。正如帕特里克早些時候在電話會議中談到的那樣，隨著這項工作的成熟，我們將完成該過程的測試和認證部分，我們將能夠收回我們的一些資源並專注於持續改進項目並繼續在生產力方面也獲得動力。但我認為放眼全球，我們的團隊在那裡做得很好，這有助於我們連續季度的利潤率改善。

And we will take our next question from Joe Giordano with Cowen.

我們將與 Cowen 一起回答 Joe Giordano 的下一個問題。

So when -- you think when we start -- when this all normalizes on supply chain, you look back at how it went and you think about -- sorry, when you think about M&CS, like what do you think you're going to come out thinking like -- this is what we did really well. This is some things that we need to like structurally maybe alter going forward to kind of meet a new reality.

因此，當您認為當我們開始時，當這一切在供應鏈上正常化時，您回顧一下它的進展並思考-對不起，當您想到 M&CS 時，您認為您將要做什麼出來想像 - 這就是我們做得很好。這是我們需要在結構上喜歡的一些事情，可能會改變未來以適應新的現實。

It's a great question. I think right now, Joe, as -- certainly as I look at it, and Sandy can certainly comment here. I think we're going to look back on and say we did quite well is navigating through the chip supply, and holding a team together, holding morale, people spending days and nights and weekends over and over and over again on the phone with suppliers. Customers working -- our commercial teams are working with customers, keeping them on board, nobody happy. But the team's fortitude really shown through and it continued to show through.

這是一個很好的問題。我認為現在，喬，正如我所看到的那樣，桑迪當然可以在這裡發表評論。我想我們回顧一下，說我們做得很好，就是在芯片供應方面做得很好，把一個團隊團結在一起，保持士氣，人們在日日夜夜和周末一遍又一遍地與供應商通電話.客戶工作——我們的商業團隊正在與客戶合作，讓他們參與進來，沒有人感到高興。但是球隊的毅力確實表現出來了，而且還在繼續表現出來。

I think, two, the fact that there have been no cancellations and a record backlog is a testimony to that. And no decline in the margins of that backlog due to chip supply. Our margins have been impacted by some of the near-term choices we've had to make on spending money on redesigns, on selling some mechanical meters in at lower margin than our other meters. And so those, I think, are all going to be in the plus column.

我認為，第二，沒有取消和記錄積壓的事實證明了這一點。並且由於芯片供應，該積壓的利潤率沒有下降。我們的利潤率受到了一些近期選擇的影響，我們不得不在重新設計上花錢，以低於我們其他儀表的利潤率出售一些機械儀表。因此，我認為，這些都將出現在加號欄中。

I think if there were things that we could have done differently, the 1 that comes to mind for me was I think we probably waited a little too long to get going on some of the redesign work. I don't think we missed it by much. But I think we all learned that the sooner you get on that, the better you're going to get because it takes a while to sort through that. So that would be my high-level takes on this, but we're not out of it yet. So we still have time to reserve the right to get smarter.

我認為如果我們可以做一些不同的事情，我想到的 1 是我認為我們可能等了太久才開始進行一些重新設計工作。我不認為我們錯過了太多。但我認為我們都知道，你越早開始，你就會變得越好，因為這需要一段時間來解決這個問題。所以這將是我對此的高層次看法，但我們還沒有擺脫它。所以我們還有時間保留變得更聰明的權利。

And then maybe I'll ask 1, some of your more international products, you've been hearing this from some other companies. Have you seen like increased international competition from like maybe competitors who are selling in U.S. dollars but have like fully local currency cost basis, so they don't really need to raise prices. I guess their margins are benefiting and you guys are in a comparably tougher situation. Are you seeing any of that?

然後也許我會問 1，你的一些更國際化的產品，你已經從其他一些公司那裡聽說過。您是否看到過來自可能以美元銷售但具有完全當地貨幣成本基礎的競爭對手的國際競爭加劇，因此他們真的不需要提高價格。我猜他們的利潤正在受益，而你們的處境相對艱難。你看到了嗎？

We're really not seeing anything meaningful on that front. We're seeing across our end markets with our competitors that they are also taking price increases I mean nobody has been immune to inflation in this market. And so we have been the price leader where we have competitive advantage. And so...

在這方面，我們真的沒有看到任何有意義的東西。我們與競爭對手一起在終端市場看到他們也在提價，我的意思是在這個市場上沒有人能倖免於通脹。因此，我們一直是具有競爭優勢的價格領導者。所以...

We have a structural, probably a somewhat different structure than some of our peers or other companies that you follow. And that our competitive base products that we, for example, sell out of Europe. Those product lines are also predominantly European competitors. So we've got great footprint, whether it be in Italy, whether it be in Sweden, whether it be the U.K. So -- and we've reduced our lead times on still being able to ship those things into the U.S.

我們的結構可能與我們的一些同行或您遵循的其他公司有些不同。例如，我們在歐洲銷售的具有競爭力的基礎產品。這些產品線也主要是歐洲競爭對手。所以我們有很大的足跡，無論是在意大利，無論是在瑞典，還是在英國。所以 - 我們已經減少了我們仍然能夠將這些東西運送到美國的交貨時間。

In North America, the markets we serve, our competitor there are, for the most part, U.S.-based companies also. So there's just structurally not that big of a disadvantage vis-a-vis our competitors. We're kind of all in the same boat. We don't take that for granted, we're always looking for ways to further localize and take cost out and reduce lead times.

在北美，我們服務的市場，我們的競爭對手，大部分也有美國公司。因此，與我們的競爭對手相比，在結構上並沒有那麼大的劣勢。我們都在同一條船上。我們並不認為這是理所當然的，我們一直在尋找進一步本地化和降低成本並縮短交貨時間的方法。

We will take our next question from John Walsh with Credit Suisse.

我們將向瑞士信貸的約翰沃爾什提出我們的下一個問題。

Wanted to say nice quarter. A lot of ground covered question around price cost. One, just wondering if you could talk about what you're seeing sequentially with some of the big cost buckets, be it materials, logistics, et cetera. And then I know you've done some structural pricing initiatives just how much of the price you think is structural? And how much might be tied to surcharges?

想說漂亮的季度。很多關於價格成本的地面問題。一，只是想知道您是否可以用一些大成本桶依次談論您所看到的內容，無論是材料、物流等。然後我知道你已經做了一些結構性定價計劃，你認為有多少價格是結構性的？多少可能與附加費掛鉤？

Yes. Thanks for the question, John. Yes, I'll take the last 1 first. And -- when you look at what we've done from a pricing perspective, we haven't taken the approach to tack on surcharges, what we've done is more permanent price increases. So that's been our road map there. Let me give a little bit of color from a price perspective, we saw a big step-up in our price realization from Q1 to Q2. We'd expect that to moderate in the back half of the year because it was the second half of the year last year that we started turning on our price increases.

是的。謝謝你的問題，約翰。是的，我會先拿最後一個。而且 - 當你從定價的角度來看我們所做的事情時，我們沒有採取增加附加費的方法，我們所做的是更持久的價格上漲。這就是我們的路線圖。讓我從價格的角度給出一點顏色，從第一季度到第二季度，我們看到我們的價格實現有了很大的提高。我們預計這將在今年下半年放緩，因為去年下半年我們開始開始提價。

So that will level out a bit in the second half. And I think the other thing I would just close with to remind people, there's been some headlines on some moderation in commodity pricing. We're still seeing inflation in many of the other categories, freight, labor, overhead, et cetera. And so we're still facing an inflationary environment. But net-net, all in, we're going to be in a better place in the second half of the year than we were in the first half.

因此，這將在下半場有所緩和。我想我要結束的另一件事是要提醒人們，有一些關於商品定價適度緩和的頭條新聞。我們仍然看到許多其他類別的通貨膨脹，包括貨運、勞動力、間接費用等。所以我們仍然面臨著通貨膨脹的環境。但是net-net，總而言之，我們在下半年的情況將比上半年更好。

Great. And then maybe just as a follow-on, any color you can provide kind of last time we saw commodity deflation and experience that. I mean, obviously, as you just noted, it's more than commodities, but just curious, historically, the ability of the price.

偉大的。然後也許只是作為後續，您可以提供的任何顏色，就像我們上次看到商品通貨緊縮並體驗到那樣。我的意思是，很明顯，正如你剛才所說，它不僅僅是商品，而且只是好奇，從歷史上看，價格的能力。

Yes. The -- if you take one example of when we were in the heavy tariff situation and then a number of those tariffs were rolled back, we did not give up those increases. -- because of the value that we were selling to our customers, and they understood the situation we were in.

是的。 - 如果你舉一個例子，當我們處於高關稅的情況下，然後一些關稅被回滾，我們並沒有放棄這些增加。 ——因為我們向客戶銷售的價值，他們了解我們所處的情況。

And so historically, when there has been a rollback in material inflation, we've been pretty successful at hanging on to that. So I think almost entirely successful in doing that. But I'm sure there's an exception or 2 here or there. But in the headline numbers, they don't roll back.

因此，從歷史上看，當物質通脹出現回落時，我們一直非常成功地堅持這一點。所以我認為這樣做幾乎完全成功。但我敢肯定這里或那裡有一個例外或 2 個例外。但在標題數字中，它們並沒有回滾。

We will take our next question from Pavel Molchanov with Raymond James.

我們將與 Raymond James 一起回答 Pavel Molchanov 的下一個問題。

Obviously, supply chain problems affect everybody. And probably touched on this a quarter ago. Are you seeing any situations where some of the smaller middle market players that could be prospective acquisition targets for you are struggling disproportionately and perhaps creating kind of an opportunistic situation for you to look at M&A?

顯然，供應鏈問題影響到每個人。並且可能在一個季度前談到了這一點。您是否看到一些可能成為您潛在收購目標的較小的中間市場參與者正在不成比例地掙扎，並可能為您創造一種機會主義的情況來看待併購？

It's an interesting question, and I think it was perhaps raised earlier in the previous quarter when we were all even more needy into supply chain challenges. We never really looked at it that way. We haven't really seen, I mean the companies that we look at are high quality and may not always be at big scale, but they are pretty good at managing their supply chains as well.

這是一個有趣的問題，我認為它可能是在上一季度早些時候提出的，當時我們都更加需要應對供應鏈挑戰。我們從來沒有這樣看待它。我們還沒有真正看到，我的意思是我們看到的公司質量很高，可能並不總是規模很大，但他們也很擅長管理他們的供應鏈。

I mean they're much more focused on product line or a couple of offerings. Having said that, I do believe -- and this speaks to maybe the question that Joe asked earlier, I think all of us look at supply chain now as being 1 of the new, most important competitive advantages that a company needed to have because whether it be chip supply this time, it will be something else down the road, and the world is so interdependent at this point in time.

我的意思是他們更專注於產品線或幾個產品。話雖如此，我確實相信 - 這可能與喬之前提出的問題有關，我認為我們所有人現在都將供應鏈視為公司需要擁有的新的、最重要的競爭優勢之一，因為是否這次是芯片供應，以後會是別的東西，世界在這個時間點是如此相互依存。

And we've got a whole lot better ourselves. We still have ways to go. But I do think that it can be the form of a new synergy going forward, but it's not prominent in our thinking about the specific pipeline that we've got right now.

而且我們自己也變得更好了。我們還有很長的路要走。但我確實認為這可能是一種新的協同作用的形式，但在我們對我們目前擁有的具體管道的思考中並不突出。

Understood. A follow-up about the U.K. specifically. There was a report from one of the government experts the other day saying that without the implementation of smart water metering the U.K. would be experiencing outright water scarcity by the end of this decade, pretty striking headline. Just thought I'd get your perspective on that.

明白了。關於英國的後續行動。前幾天一位政府專家的一份報告稱，如果不實施智能水錶，英國將在本十年末經歷徹底的水資源短缺，這是一個非常引人注目的標題。只是想我會得到你的看法。

Yes. So I won't prognosticate on the prediction. But what I can reinforce is the lead -- so Ofwat, which is the office of water in the U.K. they regulate the 17 or so utilities that serve the U.K. And that 5-year AMP cycle they go through, there is a pre-AMP piece to that where they all have to come for with their proposals in order to get their funding approvals, their rate cases approved.

是的。所以我不會預測預測。但我可以強調的是領導——所以 Ofwat，它是英國的水務辦公室，他們監管著為英國服務的 17 個左右的公用事業。他們經歷的 5 年 AMP 週期，有一個 pre-AMP為了獲得資金批准，他們的費率案例獲得批准，他們都必須提出他們的建議。

And all that is published very visibly as to what are the top 3 priorities that each utility is focusing on, they're mandated to have that. And we can confirm that in this last cycle, unlike any cycle before, virtually every 1 of utilities, when you look at what they were trying to solve for, it was things around scarcity.

所有這些都非常明顯地公佈了每個公用事業公司關注的前 3 個優先事項是什麼，他們被要求擁有這些。我們可以確認，在最後一個週期中，與之前的任何週期不同，幾乎每一個公用事業公司，當你看到他們試圖解決的問題時，都是圍繞稀缺性的問題。

It was things around water losses, and how they do all that in an affordable, efficient way. So that common theme was a big deal. And then also, in some cases, climate change impact in terms of flood prevention and building more resilient infrastructure. So there is a lot there. It makes it a very attractive market. So hopefully, that was helpful.

這是關於水損失的事情，以及他們如何以負擔得起的、有效的方式來做這一切。所以這個共同的主題很重要。此外，在某些情況下，氣候變化還會影響防洪和建設更具彈性的基礎設施。所以那裡有很多。這使它成為一個非常有吸引力的市場。所以希望這很有幫助。

We have reached our allotted time for questions. I would now like to turn the call back over to Patrick Decker for any additional or closing remarks.

我們已經到了規定的提問時間。我現在想將電話轉回帕特里克·德克爾（Patrick Decker），以獲取任何補充或結束語。

Well, thanks, everyone, for your time today, for your continued support. I know we've run a bit long here. I appreciate the questions and the interest. I trust you'll all have a very safe and enjoyable remainder of the year summer. I know you're knee-deep in earnings season. So we appreciate your time and your attention, and I look forward to hearing to you again.

好吧，謝謝大家，感謝你們今天的時間，你們一直以來的支持。我知道我們在這裡跑了很久。我很欣賞這些問題和興趣。我相信你們都會在今年夏天度過一個非常安全和愉快的時光。我知道你在財報季深陷困境。因此，我們感謝您的時間和您的關注，我期待再次收到您的來信。

Thank you -- this does conclude today's Item Second Quarter 2022 Earnings Conference Call. Please disconnect your lines at this time, and have a wonderful day.

謝謝——今天的 Item 2022 年第二季度收益電話會議確實到此結束。請在這個時候斷開您的線路，並祝您有美好的一天。