賽莱默 (XYL) 2023 Q2 法說會逐字稿

Welcome to Xylem's Second Quarter 2023 Earnings Conference Call. (Operator Instructions) I would now like to turn the call over to Andrea van der Berg, Vice President of Investor Relations.

歡迎參加賽萊默 2023 年第二季度收益電話會議。 （操作員指示）我現在想將電話轉給投資者關係副總裁 Andrea van der Berg。

Thank you, operator. Good morning, everyone, and welcome to Xylem's Second 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 perspective on Xylem's second quarter 2023 results and discuss the third quarter and full year outlook.

謝謝你，接線員。大家早上好，歡迎參加賽萊默 2023 年第二季度收益電話會議。今天與我在一起的有首席執行官帕特里克·德克爾 (Patrick Decker)；首席財務官桑迪·羅蘭；和首席運營官馬修·派恩。他們將提供對賽萊默 2023 年第二季度業績的看法，並討論第三季度和全年的前景。

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.

在我們準備好的發言之後，我們將回答與電話會議所涵蓋信息相關的問題。我會請您繼續回答一個問題並跟進，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, August 9. Please note the replay number +1 (800) 839-1320 or +1 (402) 220-0488. 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.

謹此提醒，本次電話會議和我們的網絡廣播均附有幻燈片演示文稿，可在我們網站 www.xylem.com 的投資者部分查看。今天的電話會議重播將持續到 8 月 9 日午夜。請注意重播號碼 +1 (800) 839-1320 或 +1 (402) 220-0488。此外，電話會議可通過我們網站的投資者部分的投資者活動標題進行回放。請翻到幻燈片 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 in 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.

我們將在今天的電話會議上發表一些前瞻性聲明，包括提及我們預計未來將發生或可能發生的未來事件或發展。這些聲明受到未來風險和不確定性的影響，例如賽萊默最新的 10-K 表格年度報告以及隨後向 SEC 提交的報告中描述的因素。請注意，公司沒有義務公開更新任何前瞻性聲明以反映後續事件或情況，實際事件或結果可能與預期存在重大差異。

Please turn to Slide 3. We have 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 and non-GAAP financials have been reconciled for you and are included in the Appendix section of the presentation.

請參閱幻燈片 3。我們向您提供了關鍵績效指標的摘要，包括 GAAP 指標和非 GAAP 指標。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基於有機和/或調整的基礎，並且已為您核對非公認會計準則財務數據，並將其包含在演示文稿的附錄部分中。

Now please turn to Slide 4, and I'll turn the call over to our CEO, Patrick Decker.

現在請翻到幻燈片 4，我會將電話轉給我們的首席執行官帕特里克·德克爾 (Patrick Decker)。

Thanks, Andrea, and good morning, everyone. Today is a significant milestone for Xylem as we have the pleasure to present the performance and outlook of quite a different company than just a quarter ago as we describe our ability to make an impact on the world as society deals with growing water challenges.

謝謝，安德里亞，大家早上好。今天對於賽萊默來說是一個重要的里程碑，因為我們很高興向大家展示一家與四分之一前截然不同的公司的業績和前景，我們描述了我們在社會應對日益嚴峻的水挑戰時對世界產生影響的能力。

The combination of Xylem and Evoqua has already begun taking shape as an even stronger global platform that will have a profoundly positive impact on our customers and communities. We have a responsibility in front of us to help at exactly the moment when the world's water challenges are coming into more acute focus than ever. When we completed the acquisition in May, our capability to meet this moment expanded along with our opportunities for growth. Now, 10 weeks into the integration of these 2 great enterprises, we are even more confident about the value we will create with our combined company.

Xylem 和 Evoqua 的合併已經開始形成一個更強大的全球平台，將對我們的客戶和社區產生深遠的積極影響。當世界水資源挑戰比以往任何時候都更加受到關注時，我們有責任提供幫助。當我們五月份完成收購時，我們應對這一時刻的能力隨著我們的增長機會而增強。現在，這兩家偉大企業的整合已經過去了 10 週，我們對合併後的公司將創造的價值更加充滿信心。

There are 3 things that underpin that confidence. First, the team is delivering impressive performance across both companies. I am so very proud of our team for staying focused on serving our customers at a potentially distracting time. Each team, both legacy Xylem and Evoqua turned in a quarter significantly exceeding expectations and giving us brisk momentum for the future.

有三件事支撐著這種信心。首先，該團隊在兩家公司都取得了令人印象深刻的業績。我為我們的團隊感到非常自豪，因為他們在可能分散注意力的時間仍然專注於為客戶提供服務。每個團隊（包括傳統 Xylem 和 Evoqua）的季度業績都顯著超出預期，為我們的未來帶來了強勁動力。

Second, our early progress on integration has increased our confidence in the cost synergies we previously laid out and the growth synergies ahead of us. We have moved well forward on both sources of value. And third, as water challenges continue to intensify for our customers across many parts of our economy and society, they are seeking simpler, more affordable ways to tackle them.

其次，我們在整合方面的早期進展增強了我們對之前提出的成本協同效應和未來增長協同效應的信心。我們在這兩個價值來源方面都取得了很大進展。第三，隨著我們經濟和社會許多領域的客戶面臨的水挑戰持續加劇，他們正在尋求更簡單、更實惠的方法來解決這些問題。

While we are now even more strongly positioned to solve those needs and capture that demand with increased exposure to attractive, durable end markets. We'll come back at these bigger points in a few minutes, but I want to make sure we also give appropriate attention to the very strong quarter we just closed. As we shared in our press release this morning, we significantly exceeded expectations on revenue growth, margin and earnings per share. Organic revenue growth was 15%, with total reported revenue growth of 26%. EPS was up 32% and grew 28%, excluding the impact of the acquisition. And we delivered EBITDA margin well above our guide at more than 19%. It was driven by strong demand and the team's continued focus on pricing as well as ongoing continuous improvement aimed at simplifying how we serve our customers.

雖然我們現在更有能力解決這些需求，並通過增加對有吸引力、持久的終端市場的接觸來抓住這些需求。我們將在幾分鐘後回到這些更大的點，但我想確保我們也對我們剛剛結束的非常強勁的季度給予適當的關注。正如我們今天早上在新聞稿中分享的那樣，我們的收入增長、利潤率和每股收益都大大超出了預期。有機收入增長 15%，報告總收入增長 26%。剔除收購影響後，每股收益增長 32%，增長 28%。我們的 EBITDA 利潤率遠高於我們的指導值，超過 19%。這是由強勁的需求、團隊對定價的持續關注以及旨在簡化我們為客戶提供服務的持續改進所推動的。

Organically, all segments contributed double-digit revenue growth in all end markets. And each of our regions grew, led by notably strong pace in the U.S. and a solid recovery in China. Our legacy backlog was up 7%. And then we added Evoqua's backlog of more than $1 billion, and the 2 together bring our total backlog to $5.3 billion.

從有機角度來看，所有細分市場都為所有終端市場貢獻了兩位數的收入增長。在美國的強勁增長和中國的穩健復甦的帶動下，我們每個地區都實現了增長。我們的舊積壓訂單增加了 7%。然後我們加上 Evoqua 超過 10 億美元的積壓訂單，這 2 項合計使我們的積壓訂單總額達到 53 億美元。

Well, we have a lot to do with the integration of these 2 great companies. We have strong commercial momentum, which gives us the confidence to raise our guidance for the year. And again, I want to thank every one of our team members around the world and our partners for what they are doing every day to deliver real impact to our customers and our communities.

嗯，我們對這兩家偉大公司的整合有很多工作要做。我們擁有強勁的商業動力，這讓我們有信心提高今年的指引。再次，我要感謝我們世界各地的每一位團隊成員以及我們的合作夥伴每天所做的工作，為我們的客戶和社區帶來真正的影響。

In a moment, we'll give more color on our outlook as well as detail on our end markets and regions. But first, I'm going to hand it over to Sandy to dig into the quarter's strong results.

稍後，我們將詳細介紹我們的前景以及我們的終端市場和地區的詳細信息。但首先，我將把它交給桑迪來深入研究本季度的強勁業績。

Thanks, Patrick. Please turn to Slide 5. Since this is the first time we are reporting as a combined company, I would like to walk you through how we will cover our performance. We now have 4 reporting segments: Evoqua's Applied Product Technologies business has been integrated into water infrastructure, immediately combining our 2 complementary treatment product businesses. Evoqua's Integrated Solutions & Services business, or ISS, is reported as its own segment, providing continued transparency on the segment's results.

謝謝，帕特里克。請參閱幻燈片 5。由於這是我們第一次作為合併後的公司進行報告，因此我想向您介紹我們將如何報導我們的業績。我們現在有 4 個報告部門： Evoqua 的應用產品技術業務已整合到水基礎設施中，立即合併了我們的 2 個互補處理產品業務。 Evoqua 的集成解決方案和服務業務（ISS）作為其自己的部門進行報告，為該部門的業績提供持續的透明度。

Our other 2 segments, Measurement & Control Solutions and Applied Water are unchanged. Additionally, since this quarter includes about a month of Evoqua's results, we have laid out organic results compared to our previously shared expectations and broken out the impact of the acquisition. Unless otherwise stated, all growth rates shared are on an organic basis.

我們的其他兩個部門：測量與控制解決方案和應用水部門保持不變。此外，由於本季度包含大約一個月的 Evoqua 業績，因此我們列出了與我們之前共同預期相比的有機業績，並詳細列出了收購的影響。除非另有說明，所有共享的增長率都是有機的。

And lastly, we have reported EPS on an adjusted basis that adds back noncash purchase accounting intangible amortization from the Evoqua acquisition and Xylem's previous acquisitions. We have therefore recast 2022 amounts for comparison purposes. And now let's turn to Slide 6 for our quarter's results.

最後，我們報告了調整後的每股收益，其中增加了 Evoqua 收購和 Xylem 之前收購的非現金購買會計無形攤銷。因此，出於比較目的，我們重新計算了 2022 年的金額。現在讓我們轉向幻燈片 6，了解本季度的業績。

The team delivered strong performance, beating our expectations for both growth and margin expansion. Total revenues grew 26%, while organic revenue growth of 15% was led by double-digit growth in the U.S. and Western Europe and high single-digit growth in emerging markets. Each business exceeded our expectations, and we saw double-digit growth in all segments and end markets.

該團隊表現強勁，超出了我們對增長和利潤擴張的預期。總收入增長了 26%，而有機收入增長了 15%，這主要得益於美國和西歐的兩位數增長以及新興市場的高個位數增長。每一項業務都超出了我們的預期，我們在所有細分市場和終端市場都看到了兩位數的增長。

Utilities was up 17% due to robust demand and price realization in both M&CS and Water Infrastructure. Industrial grew 11% on strong price realization and demand across all regions. And lastly, building solutions, which includes commercial and residential grew 15%. Overall, demand remains resilient as demonstrated by our $5.3 billion backlog, up 7% organically, as Patrick highlighted, and now includes Evoqua. And while orders were down 2% on the quarter, book-to-bill continues to be above 1.

由於 M&CS 和水基礎設施的強勁需求和價格實現，公用事業上漲 17%。由於價格實現強勁以及所有地區的需求強勁，工業增長了 11%。最後，建築解決方案（包括商業和住宅）增長了 15%。總體而言，正如帕特里克所強調的那樣，我們的 53 億美元積壓訂單證明了需求仍然具有彈性，有機增長了 7%，現在還包括 Evoqua。儘管本季度訂單量下降 2%，但訂單出貨比仍高於 1。

EBITDA margin was 19.1%, up 250 basis points from the prior year on higher volumes, productivity savings and favorable price cost dynamics. Excluding the impact of Evoqua, EBITDA margin was up 200 basis points, exceeding our previous expectations. Our EPS in the quarter was $0.98, up 32% year-over-year and up 28% excluding the impact of acquisitions. Please turn to Slide 7, and I'll review each segment's second quarter performance in a bit more detail.

由於產量增加、生產力節省和有利的價格成本動態，EBITDA 利潤率為 19.1%，比上年增長 250 個基點。剔除 Evoqua 的影響，EBITDA 利潤率增長 200 個基點，超出我們之前的預期。本季度我們的每股收益為 0.98 美元，同比增長 32%，剔除收購影響後增長 28%。請參閱幻燈片 7，我將更詳細地回顧每個部門的第二季度業績。

M&CS revenue was up 21%, driven by improved chip supply as well as strong demand in pipeline assessment services. U.S. and Western Europe saw robust growth, and we continue to see favorable momentum in emerging markets. Orders grew 6% with a book-to-bill ratio of 1.2 and our backlog of $2.4 billion is up 17% versus the prior year, demonstrating continued strong demand for our AMI offerings.

由於芯片供應改善以及管道評估服務的強勁需求，M&CS 收入增長了 21%。美國和西歐增長強勁，我們繼續看到新興市場的良好勢頭。訂單增長了 6%，訂單出貨比為 1.2，我們的積壓訂單金額為 24 億美元，比上一年增長了 17%，這表明對我們的 AMI 產品的需求持續強勁。

EBITDA margin for the segment was up 590 basis points versus the prior year on strong incrementals. Volume conversion, price realization and productivity drove the expansion, more than offsetting inflation and unfavorable mix. And now let's turn to Slide 8, and I'll cover our Water Infrastructure business.

該部門的 EBITDA 利潤率較上年增長了 590 個基點，增幅強勁。數量轉換、價格實現和生產率推動了擴張，遠遠抵消了通貨膨脹和不利的組合。現在讓我們轉向幻燈片 8，我將介紹我們的水基礎設施業務。

Water Infrastructure, which now includes Evoqua's Applied Product Technologies segment grew 20% on a reported basis and 13% organically. Growth was robust across the portfolio, with revenues up double digits in all end markets and applications. Developed markets saw particularly strong growth driven by OpEx demand, while emerging markets grew 7%, driven by Latin America and Asia Pacific.

水基礎設施部門（現在包括 Evoqua 的應用產品技術部門）按報告增長 20%，有機增長 13%。整個產品組合增長強勁，所有終端市場和應用的收入均實現兩位數增長。在運營支出需求的推動下，發達市場的增長尤其強勁，而在拉丁美洲和亞太地區的推動下，新興市場增長了 7%。

Orders in the quarter were down 4% year-over-year, lapping prior year growth of over 20%, and book-to-bill was above 1. EBITDA margin for the segment was roughly flat year-over-year and up 20 basis points when excluding the contribution of Evoqua. Please turn to Slide 9 for an overview of Applied Water.

本季度訂單同比下降 4%，較去年同期增長 20% 以上，訂單出貨比高於 1。該部門的 EBITDA 利潤率與去年同期基本持平，但增長了 20%排除 Evoqua 的貢獻時的積分。請參閱幻燈片 9，了解應用水的概述。

Applied Water revenues grew 12% on continued strong price realization and backlog execution. The U.S. and emerging markets grew double digits, while Western Europe grew mid-single digits. Industrial demand was both resilient in both Western Europe and emerging markets, particularly due to recovery in China. And while orders were down 6% in the quarter, our backlog continues to be elevated versus historical levels, and book-to-bill is 0.9.

由於持續強勁的價格實現和積壓執行，Applied Water 收入增長了 12%。美國和新興市場實現兩位數增長，而西歐則實現中個位數增長。西歐和新興市場的工業需求均表現強勁，尤其是由於中國的複蘇。儘管本季度訂單下降了 6%，但我們的積壓訂單仍高於歷史水平，訂單出貨比為 0.9。

Segment EBITDA margin was up 290 basis points in the quarter with continued strong price realization, coupled with productivity more than offsetting inflation. Please turn to Slide 10.

由於價格實現持續強勁，加上生產率足以抵消通貨膨脹，本季度該部門的 EBITDA 利潤率增長了 290 個基點。請翻到幻燈片 10。

I'm very pleased to introduce Integrated Solutions & Services as our newest reporting segment. ISS is a leading North American water treatment solution and services provider that brings access to a durable and highly recurring revenue stream as well as a diverse and attractive industrial verticals. With approximately 75% recurring revenue, ISS is known for dependability and bringing mission-critical water treatment expertise to our customers.

我很高興介紹集成解決方案和服務作為我們最新的報告部分。 ISS 是北美領先的水處理解決方案和服務提供商，提供持久且高經常性的收入流以及多樣化且有吸引力的垂直行業。 ISS 擁有約 75% 的經常性收入，以可靠性和為客戶提供關鍵任務水處理專業知識而聞名。

Although we only reported ISS after our May 24 close, full quarter revenue was up 12%, driven by strong price realization and backlog execution. And orders grew 4% with a book-to-bill ratio above 1 due to broad-based demand across industrials and utilities. Backlog of nearly $1 billion to end the quarter, was up 15% year-over-year. And adjusted EBITDA margin post close was a solid at 24%. And now let's turn to Slide 11 for an overview of cash flows and the company's financial position.

儘管我們在 5 月 24 日收盤後才報告了 ISS，但在強勁的價格實現和積壓執行的推動下，整個季度收入增長了 12%。由於工業和公用事業領域的廣泛需求，訂單增長了 4%，訂單出貨比超過 1。截至本季度末，積壓訂單接近 10 億美元，同比增長 15%。收盤後調整後的 EBITDA 利潤率穩定在 24%。現在讓我們轉向幻燈片 11，了解現金流量和公司財務狀況的概述。

After retiring over $600 million of debt in conjunction with the closing of Evoqua, our financial position remains robust as we exit the quarter with over $700 million in cash and available liquidity of $1.6 billion. Net debt-to-EBITDA leverage is 1.4x and in the second quarter, we had solid adjusted free cash flow conversion of 86%. Please turn to Slide 12, and I'll hand it back over to Patrick.

隨著 Evoqua 的關閉，我們還清了超過 6 億美元的債務，在本季度結束時，我們的財務狀況依然強勁，擁有超過 7 億美元的現金和 16 億美元的可用流動資金。淨債務與 EBITDA 的槓桿率為 1.4 倍，第二季度，我們的調整後自由現金流轉換率為 86%。請翻到幻燈片 12，我會將其交還給帕特里克。

Thanks, Sandy. Just a little more than 2 months post close, our excitement about the Evoqua acquisition has only grown. We've made great progress in 3 areas. First is our performance and outlook as the business stands today. We began the integration with an overarching principle, and that was to deliver continuity for our customers, keep our commitments and not disrupt business performance. The results tell a clear story of focused near-term delivery.

謝謝，桑迪。交易完成僅兩個多月後，我們對 Evoqua 收購的興奮與日俱增。我們在 3 個領域取得了巨大進展。首先是我們目前業務的表現和前景。我們以一個總體原則開始整合，那就是為我們的客戶提供連續性，信守我們的承諾，並且不影響業務績效。結果清楚地說明了近期重點交付的情況。

The combination of our team's disciplined execution and healthy underlying market demand has given us the confidence to raise our full year guide. But our current performance is, as you would expect, largely a reflection of our businesses as they are. What we're most excited about is our future potential and the opportunities ahead of us, which brings me to the second dimension on which our confidence is only growing.

我們團隊嚴格的執行力和健康的潛在市場需求相結合，使我們有信心提高全年指引。但正如您所料，我們目前的業績在很大程度上反映了我們業務的現狀。最令我們興奮的是我們未來的潛力和擺在我們面前的機遇，這將我帶到了第二個維度，我們的信心只會在這個維度上不斷增長。

When the transaction closed, we announced a combined leadership team. And frankly, I'm energized by the strong cultural fit the team has already been demonstrating and the early momentum we've created. We are well on track to deliver the cost synergies outlined when we announced the transaction. And as we progress through the integration, we have even more greater visibility of the operating efficiencies to be realized in coming quarters, along with the opportunity for significant further margin expansion.

交易完成後，我們宣布了合併的領導團隊。坦率地說，我對團隊已經展現出的強大文化契合度以及我們創造的早期勢頭感到充滿活力。我們正在順利實現我們宣布交易時概述的成本協同效應。隨著整合的進展，我們對未來幾個季度將實現的運營效率以及進一步大幅擴大利潤率的機會有了更清晰的了解。

At the same time, the whole strategic rationale of this combination has always been about further accelerating our profitable growth. And that's the third dimension I referred to in my opening comments. We are now even more strongly positioned in attractive, durable end markets with a significant component of recurring revenue streams.

與此同時，此次合併的整體戰略理由始終是為了進一步加速我們的盈利增長。這就是我在開場白中提到的第三個維度。現在，我們在有吸引力、持久的終端市場中的地位更加穩固，並成為經常性收入流的重要組成部分。

Now that we have deeper insight into the intersection of our businesses and customers, we see those opportunities even more clearly.

現在，我們對業務和客戶的交叉點有了更深入的了解，我們更清楚地看到了這些機會。

So moving on to Slide 13. This is the right combination at the right time. Together, we have the strongest platform of capabilities to address customers' critical water challenges. Those needs are increasing, and we have the scale and reach now to deliver differentiated solutions globally. Our teams are already detailing how we will do that.

那麼請轉到幻燈片 13。這是在正確時間出現的正確組合。我們共同擁有最強大的能力平台來解決客戶面臨的關鍵水挑戰。這些需求正在不斷增加，我們現在擁有在全球範圍內提供差異化​​解決方案的規模和覆蓋範圍。我們的團隊已經詳細說明了我們將如何做到這一點。

First, in utilities, we will deepen our penetration, especially with the addition of Evoqua's Applied Product Technologies to our Water Infrastructure offerings. In industrial, we'll use the power of our combined offering to scale our presence in attractive industrial end markets. And then we will expand our Services Solutions business by leveraging Xylem's well-established global distribution platform.

首先，在公用事業領域，我們將深化滲透，特別是在我們的水基礎設施產品中添加 Evoqua 的應用產品技術。在工業領域，我們將利用我們組合產品的力量來擴大我們在有吸引力的工業終端市場的影響力。然後，我們將利用賽萊默完善的全球分銷平台來擴展我們的服務解決方案業務。

Now as many of you know, this combination delivers on part of the strategy we laid out back in our 2021 Investor Day, and that was to expand our capability and our presence in industrial end markets. Increasing industrial exposure reinforces the durability of our overall business model and gains us greater access to attractive customer sets for even faster long-term growth. The recurring revenues of ISS, which deliver consistent performance throughout economic cycles, it complements our M&CS and Water Infrastructure businesses, which also benefit from the resilience of utility spending.

現在，正如你們許多人所知，這種合併實現了我們在 2021 年投資者日制定的戰略的一部分，即擴大我們在工業終端市場的能力和影響力。不斷增加的行業曝光度增強了我們整體業務模式的持久性，並使我們能夠更好地接觸有吸引力的客戶群，從而實現更快的長期增長。 ISS 的經常性收入在整個經濟周期中提供一致的業績，它補充了我們的 M&CS 和水基礎設施業務，這些業務也受益於公用事業支出的彈性。

We've already taken the first steps in offering our combined portfolio to light and general industry customers and we're already targeting attractive industrial verticals such as life sciences and microelectronics. Both have strong long-term outlooks that are driven by secular trends that align well with Xylem's existing business. We look forward to keeping you up to date with our integration progress on a regular basis and anticipate providing a longer-term growth outlook at an Investor Day likely to be scheduled in the first part of 2024.

我們已經邁出了向輕工業和一般工業客戶提供組合產品組合的第一步，並且我們已經瞄準了具有吸引力的垂直工業領域，例如生命科學和微電子。兩者都擁有強勁的長期前景，這些前景是由與賽萊默現有業務非常吻合的長期趨勢驅動的。我們期待定期向您通報我們的整合進展，並預計在 2024 年上半年的投資者日提供長期增長前景。

Now with that, I'm going to hand it over to Matthew to say a bit more about our end market outlook.

現在，我將把它交給馬修，讓他更多地談談我們的終端市場前景。

Thank you, Patrick. Turning to Slide 14. Before I cover our end market outlook for the year, I want to thank the team and our partners for a great quarter. Our continued outperformance and momentum give us confidence to deliver in 2023 and beyond. We have record backlogs and the value proposition of our differentiated portfolio in attractive end markets puts us in a strong position even in a potentially dynamic macroeconomic environment. We continue to take a balanced approach in our outlook and are monitoring leading indicators watching for signs of moderation. That said, we expect resilient demand in utilities and continued steady growth in industrial water applications.

謝謝你，帕特里克。轉向幻燈片 14。在介紹今年的最終市場前景之前，我要感謝團隊和合作夥伴為我們帶來了一個出色的季度。我們持續的優異表現和勢頭讓我們有信心在 2023 年及以後實現目標。我們的積壓訂單創歷史新高，而且我們在有吸引力的終端市場中的差異化投資組合的價值主張使我們即使在潛在動態的宏觀經濟環境中也處於有利地位。我們繼續對前景採取平衡的態度，並正在監測領先指標，尋找放緩的跡象。也就是說，我們預計公用事業的需求將有彈性，工業用水應用將持續穩定增長。

And now I'll turn to our 2023 outlook by end market, which will be on an organic basis. Utilities, which is approximately 45% of our revenue continue to be healthy and we now expect growth of mid-teens, up from low teens. On the clean water side, we anticipate growth of low 20s, up from high teens previously due to robust demand for our AMI solutions, and backlog execution on improved chip supply. In addition, we are seeing great traction on solution selling with our digital platform and customers are increasingly interested in bundling offerings.

現在我將談談我們對 2023 年終端市場的展望，這將是有機的。公用事業業務約占我們收入的 45%，繼續保持健康發展，我們現在預計增長將從十幾歲左右上升到十幾歲左右。在清潔水方面，由於對我們的 AMI 解決方案的強勁需求以及改善芯片供應的積壓執行，我們預計增長將從之前的十幾歲左右增長到 20 歲左右。此外，我們看到通過我們的數字平台銷售解決方案的巨大吸引力，客戶對捆綁產品越來越感興趣。

On the wastewater side, we continue to expect high single-digit growth, resilient OpEx in developed markets as well as continued CapEx spend in emerging markets will underpin demand.

在廢水處理方面，我們繼續預計發達市場的高個位數增長、彈性運營支出以及新興市場的持續資本支出將支撐需求。

Turning now to the industrial end market, which is 45% of our revenue, we expect steady global growth of mid-single digits, but are keeping a close watch for signs of moderation. We expect any softness from developed markets to be somewhat offset by growth in emerging markets including China, where industrial momentum has continued to outpace utilities.

現在轉向占我們收入 45% 的工業終端市場，我們預計全球將實現中個位數的穩定增長，但正在密切關注放緩的跡象。我們預計發達市場的疲軟將在一定程度上被包括中國在內的新興市場的增長所抵消，這些市場的工業勢頭繼續超過公用事業。

Lastly, in building solutions, which is about 10% of our revenue, we expect growth of mid-single digits, driven by steady replacement business and backlog execution. The overall demand outlook remains healthy. And although we are not including Evoqua in our organic outlook, we expect the contribution of mission-critical solutions and services in attractive high-growth verticals such as life sciences and microelectronics to further increase the durability of our business. That outlook, combined with our operating discipline, commercial momentum and large backlogs gives us confidence for the rest of the year and beyond.

最後，在構建解決方案方面（約占我們收入的 10%），我們預計在穩定的替換業務和積壓執行的推動下，將出現中個位數的增長。整體需求前景依然健康。儘管我們沒有將 Evoqua 納入我們的有機展望中，但我們預計關鍵任務解決方案和服務在生命科學和微電子等有吸引力的高增長垂直行業中的貢獻將進一步提高我們業務的耐用性。這一前景，加上我們的運營紀律、商業勢頭和大量積壓訂單，讓我們對今年剩餘時間及以後充滿信心。

Now I'll turn it over to Sandy to walk you through the detail of our raised guidance.

現在我將把它交給桑迪，讓您詳細了解我們提出的指導意見。

Thank you, Matthew. Turning to Slide 15. We are increasing our full year guidance across revenue, EBITDA and EPS and also incorporating Evoqua. I want to take a moment to walk you through the puts and takes of how we now see the full year.

謝謝你，馬修。轉向幻燈片 15。我們正在提高全年收入、EBITDA 和 EPS 的指導，並納入 Evoqua。我想花點時間向您介紹一下我們現在如何看待全年的情況。

We expect total revenues to be around $7.2 billion for the year, which includes approximately $1.1 billion from Evoqua and another increase in our organic revenue guidance. We now expect full year organic revenue growth of 9% to 10%, up from 8% to 9%. We are raising the low end of our EBITDA guidance to about 18%. And in addition, we are lifting full year adjusted EPS guidance to $3.50 to $3.70, up approximately $0.35 at the midpoint. This incorporates a $0.15 raise from our strong organic outlook and a $0.20 increase due to acquisition-related adjustments. This includes a contribution from Evoqua of approximately $0.45 and the add back of legacy purchase accounting intangible amortization of $0.30 and partially offset by incremental share dilution of about $0.55.

我們預計今年總收入約為 72 億美元，其中包括來自 Evoqua 的約 11 億美元以及我們有機收入指導的再次上調。我們現在預計全年有機收入增長從 8% 到 9% 為 9% 到 10%。我們將 EBITDA 指導的下限提高至 18% 左右。此外，我們還將全年調整後每股收益指引上調至 3.50 至 3.70 美元，中間值上漲約 0.35 美元。其中包括因我們強勁的有機前景而增加的 0.15 美元，以及因收購相關調整而增加的 0.20 美元。其中包括 Evoqua 約 0.45 美元的出資以及遺留採購會計無形攤銷 0.30 美元的加回，並被約 0.55 美元的增量股份稀釋部分抵消。

As Patrick highlighted, we've made great progress on integration. We expect to be at $40 million of run rate cost synergies by the end of the year and we remain on track to deliver $140 million of run rate cost synergies within 3 years.

正如帕特里克強調的那樣，我們在整合方面取得了巨大進展。我們預計到今年年底，運行成本協同效應將達到 4000 萬美元，並且我們仍有望在 3 年內實現 1.4 億美元的運行成本協同效應。

Turning to Slide 16. For 2023, our organic revenue growth by segment breaks down as follows: approximately 20% growth in M&CS, high single-digits growth in Water Infrastructure and mid-single-digit growth in Applied Water and we are still on track to achieve free cash flow conversion of at least 100% of net income.

轉向幻燈片16。對於2023 年，我們按部門劃分的有機收入增長細分如下：M&CS 增長約20%，水基礎設施實現高個位數增長，應用水務實現中個位數增長，我們仍在正軌上實現至少100%淨利潤的自由現金流轉換。

We've also provided you with a number of other full year assumptions in the appendix on Slide 21. And now drilling down in the third quarter, we anticipate total company growth will be in the range of 40% to 45% on a reported basis and 4% to 6% organically.

我們還在幻燈片 21 的附錄中為您提供了一些其他全年假設。現在深入研究第三季度，我們預計公司總增長率將在報告基礎上的 40% 至 45% 範圍內有機地佔4%至6%。

By segment, we expect revenue growth to be in the high teens in M&CS and mid-single digits in Water Infrastructure and remained flat in Applied Water. We expect third quarter EBITDA margin to be approximately 18%, driven by higher volumes, continued price realization and productivity gains. And with that, please turn to Slide 17, and I'll turn the call back over to Patrick for closing comments.

按細分市場劃分，我們預計 M&CS 領域的收入增長將達到兩位數，水基礎設施領域的收入增長將達到中個位數，應用水領域的收入增長將保持平穩。我們預計，在產量增加、價格持續實現和生產率提高的推動下，第三季度 EBITDA 利潤率約為 18%。接下來，請轉到幻燈片 17，我會將電話轉回給帕特里克以徵求結束意見。

Thanks, Sandy. We've covered a lot here. So we look forward to your questions. But just before we do that, I want to reiterate a fundamental point. This is a transformational step forward for Xylem, and we believe it is transformational for our customers and our communities. We are very excited about this strategic evolution, but the most important things about Xylem are not changing.

謝謝，桑迪。我們已經在這裡介紹了很多內容。所以我們期待您的提問。但在我們這樣做之前，我想重申一個基本點。這是賽萊默向前邁出的變革性一步，我們相信這對我們的客戶和社區來說也是變革性的。我們對這一戰略演變感到非常興奮，但賽萊默最重要的事情並沒有改變。

Our investment thesis is one of those unchanging constants. We are creating significant economic and social value with a durable business model that addresses intensifying water challenges. And we're doing that with a differentiated portfolio of solutions and services in attractive and growing end markets. This gives us a multiyear runway of profitable growth with sustainable margin expansion on the foundations of a strong balance sheet and cash generation with capital deployment to further strengthen our portfolio.

我們的投資理念是那些不變的常數之一。我們正在通過持久的商業模式創造巨大的經濟和社會價值，以應對日益嚴峻的水資源挑戰。我們正在有吸引力且不斷增長的終端市場中通過差異化的解決方案和服務組合來實現這一目標。這為我們提供了一條多年盈利增長的跑道，在強勁的資產負債表和現金生成的基礎上實現可持續的利潤率擴張，並通過資本部署進一步加強我們的投資組合。

It has become increasingly apparent that the need for solutions to the world's water challenges is only growing, and we are in a very privileged position to serve those needs. So now we look forward to taking your questions. So operator, let me turn the call back over to you for Q&A.

越來越明顯的是，解決世界水資源挑戰的需求只會不斷增長，而我們在滿足這些需求方面處於非常有利的地位。現在我們期待回答您的問題。接線員，讓我將電話轉回給您進行問答。

(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 資本市場的 Deane Dray。

Just a comment to start, and we really appreciate all the heavy lifting that went on, all these moving parts, recasting financials, the re-segmentation, the new end market mix and the move to cash EPS. And look, from our perspective, that all makes sense, but we appreciate all the work that...

只是一個評論開始，我們真的很感謝所有正在進行的繁重工作，所有這些移動部件、重鑄財務、重新細分、新的終端市場組合以及向現金每股收益的轉變。從我們的角度來看，這一切都是有道理的，但我們欣賞所有的工作......

Deane, before your question, I just want to -- I do want to give a shout out to the entire team here and around the world that have been a part of not just closing this transaction, but all the moving parts and pieces that you talked about. In the midst of exciting momentum, a lot of work, and we really appreciate that recognition.

迪恩，在你提問之前，我只想——我確實想向這里和世界各地的整個團隊大聲疾呼，他們不僅參與了完成這筆交易，而且參與了你所參與的所有活動。討論過。在令人興奮的勢頭中，我們做了很多工作，我們非常感謝這種認可。

Yes. That's exactly what I was doing. And just the fact you did not skip a beat on the organic side of the business. Cash conversion, order intake and so forth. So that was the comment part. And now I go to my question. On the re-segmentation, ISS is a stand-alone check the box. That's what we'd expect you to do. And then combining APT with Water Infrastructure that also makes sense because that's where there's some interesting overlap in terms of go-to-market, customer, not so much on the technologies, but on the go-to-market side.

是的。這正是我所做的。事實上，您並沒有在業務的有機方面跳過任何一步。現金轉換、訂單接收等。這就是評論部分。現在我來回答我的問題。關於重新分段，ISS 是一個獨立的複選框。這就是我們希望你做的。然後將 APT 與水基礎設施結合起來，這也是有意義的，因為這在進入市場、客戶方面存在一些有趣的重疊，不是在技術方面，而是在進入市場方面。

So first question, because that is where there's some integration that will be going on. So give us a sense of what that integration effort is on combining those businesses and anything about the cost synergies and any conceptual thoughts on revenue synergies?

所以第一個問題，因為這是將要進行一些整合的地方。那麼，請讓我們了解一下整合這些業務的努力是什麼，以及有關成本協同效應的信息以及有關收入協同效應的概念性想法？

Yes. Thanks, Deane. So I'm going to hand it to Matthew to comment on your specific question. I would say that the integration efforts are really off to a great start. And APT, that part of Evoqua is a clear and obvious opportunity for us, and I've been really pleased and impressed by the cultural assimilation of the teams. But with that, I'll let Matthew comment a bit more on why that integration, why now and what that kind of looks like for us.

是的。謝謝，迪恩。所以我將把它交給馬修來評論你的具體問題。我想說，整合工作確實有了一個良好的開端。 APT，Evoqua 的這一部分對我們來說是一個明顯而明顯的機會，我對團隊的文化同化感到非常高興和印象深刻。但接下來，我會讓馬修更多地評論一下為什麼要進行這種整合，為什麼是現在，以及這種整合對我們來說是什麼樣子。

Thanks, Patrick. Deane, first of all, as Sandy mentioned a few minutes ago in her remarks, they're very complementary businesses, first and foremost. And there is immediate synergies, both on the revenue and the cost side. So that's getting us out of the gate fast. The teams are making great progress, as Patrick mentioned. It allows us to quickly cross-sell our products, both in industrial and utilities. And an example of this would be in the utility space, being able to bundle our solutions and kind of walk through the front door with a total solution across the whole treatment train, if you will, from beginning to end. We didn't have that capability before. Bringing the 2 companies together enables us to bring that full offering to the table.

謝謝，帕特里克。迪恩，首先，正如桑迪在幾分鐘前的講話中提到的那樣，首先也是最重要的是，它們是非常互補的業務。而且在收入和成本方面都會產生直接的協同效應。這樣我們就可以快速走出大門。正如帕特里克所說，團隊正在取得巨大進步。它使我們能夠在工業和公用事業領域快速交叉銷售我們的產品。這方面的一個例子是在公用設施領域，能夠將我們的解決方案捆綁在一起，並通過整個治療序列的整體解決方案走進前門，如果你願意的話，從頭到尾。我們以前沒有這個能力。將兩家公司合併在一起使我們能夠提供完整的產品。

Also, something that maybe is not as intuitive is our technicians, what we call AQUApros, are out with our customers. Now they have a broader portfolio to solve customer pain points. And we're already seeing that play out just organically with our technicians recommending other -- recommending new products in the portfolio very quickly. So that may be something that's not as intuitive, but it's happening already.

此外，可能不太直觀的是我們的技術人員（我們稱之為 AQUApros）與我們的客戶在一起。現在他們擁有更廣泛的產品組合來解決客戶的痛點。我們已經看到，我們的技術人員很快就推薦了其他產品，從而有機地發揮了作用——推薦產品組合中的新產品。所以這可能不是那麼直觀，但它已經發生了。

I'd say thirdly, I'd say the R&D synergies. There's obviously R&D synergies when we bring the treatment businesses together. And then lastly, we -- Patrick mentioned leadership in the very beginning. We brought over 3 leaders to the senior leadership team from Evoqua. Hervé Fages will lead the combined treatment business. He has tremendous experience here and bringing those 2 pieces together will be instrumental for our out-of-the-gate performance on cost and revenue.

我想說的第三點是研發協同效應。當我們將治療業務整合在一起時，顯然會產生研發協同效應。最後，我們帕特里克一開始就提到了領導力。我們從 Evoqua 引進了 3 名以上的領導者加入高級領導團隊。 Hervé Fages 將領導聯合治療業務。他在這裡擁有豐富的經驗，將這兩部分結合在一起將有助於我們在成本和收入方面取得出色的表現。

That's all really good to hear. And so second question is, the theme is digital. And first, just give us an update on the chip supply. Does it continue to be a gradual supply improvement there? And what's the outlook and then related to that is, Patrick, there's been this digital path for Xylem, where you were targeting a 50% of revenues by 2025. And I know it's still early, and I'm not asking a real specific number here, but just conceptually, how -- and our view is Evoqua is significantly on the path of digital themselves. So now combined, that should help you towards this goal. So just chip supply and then conceptually, where are you on the path on half of digital revenues by what timeframe?

聽到這些真是太好了。第二個問題是，主題是數字化的。首先，請向我們介紹一下芯片供應的最新情況。那裡的供應是否繼續逐步改善？與此相關的前景是什麼，Patrick，Xylem 的數字化道路是這樣的，您的目標是到 2025 年實現 50% 的收入。我知道現在還為時過早，我並不是在問一個真正的具體數字在這裡，但只是從概念上講，我們認為Evoqua 正在走上數字化道路。現在結合起來，這應該可以幫助您實現這一目標。那麼，就芯片供應而言，然後從概念上講，到什麼時間範圍內，您的數字收入一半將處於什麼位置？

I'll let Matthew start on where we are on chip supply and then he and I will tag team on where we are in digital.

我會讓馬修從我們在芯片供應方面的情況開始，然後他和我將標記團隊我們在數字方面的情況。

Great. Chip supply, Deane, as you mentioned, is continuing to the moderate improvement as we expected. Q3 will look a lot like Q2. We do expect a pickup in Q4 and also as we head into 2024, we do expect chip supply to improve, but also our redesigns will be coming online as we head into the really the end of 2023 into 2024. So that gives us confidence that we'll see that ramp Q4 and then into '24.

偉大的。正如您提到的，迪恩的芯片供應正繼續溫和改善，正如我們預期的那樣。 Q3 看起來很像 Q2。我們確實預計第四季度會有所回升，而且隨著我們進入2024 年，我們確實預計芯片供應將會改善，而且當我們進入2023 年末到2024 年時，我們的重新設計也將上線。因此，這讓我們有信心我們將看到第四季度的增長，然後進入 24 年。

Maybe just a few comments on digital and then Patrick can wrap it up. We are making good progress towards the 50% of revenues digital goal. That was a legacy Xylem target. We can see it in the backlog. We have a lot of digital content that's trapped in the backlog. And that will start to release as we get better chip supply and we get better, just in general electronic supply over the course of the next 6 to 12 months. The continued adoption of AMI, as you see in the backlog increase this quarter with M&CS, we're up $300 million. So making significant progress on digital, especially buoyed by AMI.

也許只是對數字化的一些評論，然後帕特里克就可以結束它。我們正在朝著 50% 的收入數字化目標取得良好進展。這是賽萊默的遺留目標。我們可以在待辦事項中看到它。我們有很多數字內容被積壓。隨著芯片供應的改善，以及未來 6 到 12 個月內一般電子供應的改善，這種情況將開始釋放。正如您在本季度 M&CS 的積壓訂單增加中看到的那樣，AMI 的持續採用使我們增加了 3 億美元。因此，在數字化方面取得了重大進展，尤其是在 AMI 的推動下。

And then I'd say, lastly, the partnership with Idrica is really important because it enables us to pull through more digital content. We're already starting to see that play out. So I'd say, all in all, we're in a good trajectory, and we're making good progress.

最後我想說，與 Idrica 的合作非常重要，因為它使我們能夠獲取更多數字內容。我們已經開始看到這種情況的發生。所以我想說，總而言之，我們正處於良好的軌道上，並且正在取得良好的進展。

Yes. And I just -- I would wrap that up, Deane, with -- first of all, great question because it's a key underpinning of our overall story and differentiation in the marketplace, which is I know why you raised the question.

是的。我只是——迪恩，我想總結一下——首先，這是一個很好的問題，因為這是我們整體故事和市場差異化的關鍵基礎，這就是我知道你提出這個問題的原因。

So high confidence in both the heritage kind of Xylem business. I would say what I'm most encouraged by there also is we continue to see really exciting adoption on AMI in the marketplace, which really is borne out by the print in our increased backlog and deal wins.

對賽萊默的傳統業務充滿信心。我想說的是，最令我鼓舞的是，我們繼續看到 AMI 在市場上得到令人興奮的採用，這確實通過我們不斷增加的積壓訂單和贏得的交易中的印刷品得到了證實。

With Evoqua, the opportunity there, it really is more of a complementary strategy on digital. In the Evoqua businesses, we're really talking about the ISS business. The digital path that the team there has been on is really more around how do you use digital and connectivity to actually improve the productivity of the services offering making it easier for AQUApros to do their jobs. That leads to margin enhancement. That's a big opportunity within the ISS portfolio to improve our EBITDA margins by, again, digitally enabling kind of what they do every day, making less truck rolls, less visits to serve the customer, give the customer more data insights, predict where the issues are, before they have to go out and find them.

有了 Evoqua，那裡的機會，它實際上更像是數字方面的補充戰略。在 Evoqua 業務中，我們真正談論的是 ISS 業務。該團隊所走的數字化道路實際上更多地圍繞如何使用數字化和連接性來實際提高服務產品的生產力，從而使 AQUApro 更輕鬆地完成工作。這會導致利潤率提高。這是ISS 產品組合中的一個巨大機會，可以通過數字化方式實現他們每天所做的事情，從而提高我們的EBITDA 利潤率，減少上門服務，減少服務客戶的次數，為客戶提供更多數據洞察，預測問題所在是，在他們必須出去找到他們之前。

So there's a whole exciting area there that for those that are new to either the Xylem or the Evoqua story, we'll have more to share on that at our Investor Day going forward. It's very exciting.

因此，對於那些剛接觸 Xylem 或 Evoqua 故事的人來說，這是一個令人興奮的領域，我們將在未來的投資者日分享更多相關內容。這是非常令人興奮。

And we'll take our next question from Mike Halloran with Baird.

我們將回答 Mike Halloran 和 Baird 提出的下一個問題。

So the first question, I think, is a relatively straightforward question, but I just want to level set everything, given how many moving pieces here that there are. So it sounds like guidance was raised both organically as well as your expectations that have moved higher on the Evoqua piece if we compare this to, call it, 2, 3 months ago, whenever you last gave an update. Can you just talk through the pieces of why that those expectations have moved higher? I know some of it is the second quarter outlook, but it feels like that it's a little broader than that. So can you just maybe line out those moving pieces for us?

因此，我認為第一個問題是一個相對簡單的問題，但考慮到這裡有多少可移動的部分，我只想對所有內容進行水平設置。因此，如果我們將其與 2、3 個月前（即您上次更新時）進行比較，聽起來您對 Evoqua 作品的指導和期望都提高了。您能否詳細談談為什麼這些期望變得更高？我知道其中一些是第二季度的展望，但感覺它的範圍比這更廣泛。那麼你能為我們列出那些感人的片段嗎？

Yes. Let me take a crack at that, Mike. If you rewind back to February, we -- if you look at where -- compared to our initial guide, organically, we're now forecasting about $300 million higher revenue. We did raise our guidance the last time we spoke and this quarter we raised it by another $75 million.

是的。讓我來嘗試一下，邁克。如果你回到 2 月份，我們——如果你看看在哪裡——與我們最初的指南相比，我們現在預測收入將增加約 3 億美元。上次我們講話時我們確實提高了指導值，本季度我們又提高了 7500 萬美元。

In M&CS, we started the year thinking that the business would grow somewhere in the low teens. We now are expecting 20% growth in that segment. And we're seeing very good strong incremental margins come from that business. So it's a combination of metrology. It's also a combination of the other businesses that we wrap around metrology and M&CS that's giving us good upside. And then the other 2 businesses, they've been performing really well. They've gotten ahead of the curve from a price cost perspective we sustain that momentum. But I think what's also encouraging is we're seeing significant -- we're seeing more increases on the volume side as well. And so it's really all parts of our portfolio that are contributing to the beat and raise.

在 M&CS，我們年初時認為業務將在十幾歲左右增長。我們現在預計該細分市場將增長 20%。我們看到該業務帶來了非常強勁的增量利潤。所以它是計量學的結合。這也是我們圍繞計量和 M&CS 的其他業務的結合，這給我們帶來了良好的優勢。然後其他兩家企業的表現也非常好。從價格成本的角度來看，他們已經走在了前面，我們維持了這種勢頭。但我認為同樣令人鼓舞的是我們看到了顯著的增長——我們也看到了數量方面的更多增長。因此，我們投資組合的所有部分都對業績增長和加薪做出了貢獻。

When I look at the Evoqua side of the house, we talked about them contributing about $1.1 billion this year. This past quarter, we brought in about $175 million of revenue from Evoqua. Margins there are developing really nicely and if you look at our implied outlook for the rest of the year, there -- the margins for both companies are really right on top of each other. So it's really good to see strong momentum from both sides of the house. And I think it goes back to the deal operating principles where we've kept both teams really focused on delivering on the organic plan.

當我看到房子的 Evoqua 一側時，我們談到他們今年貢獻了約 11 億美元。上個季度，我們從 Evoqua 獲得了約 1.75 億美元的收入。那裡的利潤率發展得非常好，如果你看看我們對今年剩餘時間的隱含前景，兩家公司的利潤率確實是遙遙領先。所以很高興看到房子兩邊的強勁勢頭。我認為這可以追溯到交易運營原則，我們讓兩個團隊真正專注於實現有機計劃。

Great. No, that's exactly what I was looking for. Appreciate that. And then second question, maybe you could just talk a little bit about the momentum you're seeing on the utility side as we work through next year. Book-to-bill seems pretty good on the utility pieces. Obviously, M&CS is healthy. I think the infrastructure piece is healthy, though, obviously, you got some industrial in there. Backlog is very high on the M&CS side. Maybe just talk about the visibility you have on those pieces in the next year, wrapping ISS into that a little bit as well, and talk about how you're looking at the contribution from some of these regulatory drivers coming out of some of the funding that might or might not get released here?

偉大的。不，這正是我一直在尋找的。感謝。然後是第二個問題，也許你可以談談我們明年工作時在公用事業方面看到的勢頭。在實用件方面，按訂單發貨似乎相當不錯。顯然，M&CS 是健康的。我認為基礎設施部分是健康的，但顯然，那裡有一些工業。 M&CS 方面的積壓量非常高。也許只是談談你明年對這些作品的可見度，將國際空間站也納入其中，並談談你如何看待這些監管驅動因素從一些資金中產生的貢獻可能會或可能不會在這裡發布？

Yes. So I'll start, Mike, and then I'll hand it over to Matthew. Just to your question, zooming out around utilities, we remain, I would say, more confident than ever around where utilities -- again, this is a global statement where utilities are in the cycle. One, we see here in the U.S. that while we're still early in the adoption of AMI, we continue to see an increased excitement around that. And that shows up in our bidding pipeline. It shows up in our deal wins. It shows up in our backlog. And I think the numbers speak for themselves there on where AMI adoption is going and our ability to successfully compete and win in that space of the market.

是的。所以我先開始，邁克，然後我會把它交給馬修。就你的問題而言，圍繞公用事業，我想說的是，我們仍然比以往任何時候都對公用事業更有信心 - 再說一遍，這是公用事業處於週期中的全球聲明。第一，我們在美國看到，雖然我們仍處於採用 AMI 的早期階段，但我們仍然看到人們對此越來越興奮。這也體現在我們的投標渠道中。它體現在我們的交易勝利中。它顯示在我們的積壓工作中。我認為這些數字足以說明 AMI 的採用進展情況以及我們在該市場領域成功競爭和獲勝的能力。

Secondly, the -- there are the underlying fundamentals of -- the largest part of utility spend, as you well know, is OpEx, it's repair replace. And given the age of infrastructure around the world, most notably here in North America but also in Europe. We see continued increases in that demand and outlook. And that's going to continue as a long-term trend.

其次，正如您所知，公用事業支出的最大部分是運營支出，這是維修更換的基本原理。考慮到世界各地基礎設施的老化程度，尤其是在北美，在歐洲也是如此。我們看到需求和前景持續增長。這將作為一種長期趨勢繼續下去。

I think in terms of other demand profiles beyond that, as we think about whether it be the Inflation Reduction Act, other infrastructure legislation here in the U.S. We get a lot of questions around PFAS and obviously, with our Evoqua capabilities coming in, that's obviously a very exciting area for us. But as we've said before, and I know Ron, the CEO of Evoqua in the past has said, that's a dimmer switch. It's not like all of a sudden one day it's going to show up. It's going to be adoption over time. And it just reinforces the positive tailwind that we believe we have in the areas that we're focusing on at Xylem.

我認為就除此之外的其他需求概況而言，當我們考慮是否是《通貨膨脹削減法案》、美國的其他基礎設施立法時，我們收到了很多有關PFAS 的問題，顯然，隨著我們Evoqua 能力的加入，這顯然是對我們來說這是一個非常令人興奮的領域。但正如我們之前說過的，我知道 Evoqua 過去的首席執行官 Ron 也說過，這是一個調光開關。並不是突然有一天它就會出現。隨著時間的推移，它將被採用。它只是強化了我們相信我們在賽萊默重點關注的領域所擁有的積極推動力。

So that's my commentary around utilities. I don't know, Matthew, if you want to add anything to that.

這就是我對公用事業的評論。我不知道，馬修，你是否還想補充什麼。

I think the only thing I would add to that, we have really close relationship with our customers, especially our utility customers. And based on conversations that we've had with them over the past few months, we don't see a reason that there's going to be any slowdown. The draft muni budgets for the next year for some of our [bowl] weather utilities are showing growth year-over-year. So I'd say kind of -- that's kind of customer back, the feedback we're getting. Obviously, we play very globally in utilities, not only in the U.S. but half of our revenue is outside the U.S. And to Patrick's point, there's a lot of public funding globally both in the U.K. with the AMP cycle. In China, the EU and then obviously, in the U.S. So feels pretty good.

我想我唯一要補充的是，我們與客戶，尤其是公用事業客戶有著非常密切的關係。根據過去幾個月我們與他們的對話，我們看不出有任何放緩的原因。我們的一些[碗]氣象公用事業明年的市政預算草案顯示逐年增長。所以我想說的是——這就是客戶的反饋，我們得到的反饋。顯然，我們在公用事業領域的業務非常全球化，不僅在美國，而且我們一半的收入來自美國以外。就帕特里克的觀點而言，全球範圍內，英國和 AMP 週期都有大量公共資金。在中國、歐盟，當然還有美國，感覺都不錯。

And we'll take our next question from Joe Giordano with TD Cowen.

我們將回答 Joe Giordano 和 TD Cowen 提出的下一個問題。

Can you talk through like kind of how the quarter went in Western Europe and China? I mean that's where the debt has been kind of squishy and maybe getting work there a little bit. And I'm just curious on your thoughts on potential for Chinese stimulus and where that might get directed if it does impact you guys?

您能談談本季度西歐和中國的情況嗎？我的意思是，這就是債務有點緊張的地方，也許在那裡可以找到一些工作。我只是好奇你們對中國刺激計劃潛力的看法，以及如果它確實影響到你們的話，可能會走向何方？

Yes. Joe, it's Matthew. Just maybe just some comments on Europe. It continues to be resilient, especially in utilities, which is over 50% of our revenue in Europe. With the majority of that being in OpEx, as Patrick just mentioned earlier. We were up low teens in orders in Europe in utilities. And so that was really good news. The softness that we're seeing is more on the building solutions side, which is partially offset by industrial.

是的。喬，是馬修。也許只是對歐洲的一些評論。它繼續保持彈性，特別是在公用事業領域，該領域占我們歐洲收入的 50% 以上。正如帕特里克之前提到的，其中大部分都在運營支出中。我們在歐洲公用事業領域的訂單量上升了十幾位。這確實是個好消息。我們看到的疲軟更多是在建築解決方案方面，這部分被工業所抵消。

All in all, Western Europe is up low single digits in orders. So I'd say, all in all, faring pretty well there when you take the balance there in account.

總而言之，西歐的訂單僅出現低個位數增長。所以我想說，總而言之，當你考慮到那裡的餘額時，那裡的情況相當不錯。

China, which makes up around 6% of our revenues, we saw positive momentum both in orders and revenue in Q2. We were up 20% plus, which although it was an easier compare, it was really great work done by Shuping Lu, who leads our team there and the entire team in China. Just incredible resolve and just really in China for China, localizing products and shifting where some of the slowness is happening and getting into more of the high-growth areas.

中國約占我們收入的 6%，我們在第二季度看到了訂單和收入的積極勢頭。我們的業績增長了 20% 以上，雖然這比較容易比較，但這確實是 Shuping Lu 所做的出色工作，他領導著我們的團隊以及中國的整個團隊。令人難以置信的決心，真正在中國為中國服務，將產品本地化，改變一些緩慢的地方，進入更多的高增長領域。

Industrial has led the way in China for us, and we're starting to see a little bit of momentum in the utility space. And obviously, in the commercial building space in China, that's where the weakness is, but it's not a big part of our business in China. 75% of our business in China is more utility centric. So all in all, we're very confident in China, and we -- in the long-term outlook, given really the critical nature and focus on water in country there.

工業領域對我們來說在中國處於領先地位，我們開始在公用事業領域看到一些勢頭。顯然，在中國的商業建築領域，這就是弱點所在，但這並不是我們在中國業務的重要組成部分。我們在中國 75% 的業務更加以公用事業為中心。總而言之，我們對中國非常有信心，而且從長遠來看，考慮到那裡的國家對水的重視和關注。

And Joe, you know this already, but for the rest of the listeners, I've been a long-term bull on China just because of the underlying demands and needs from a water and environmental standpoint there continues to be a top policy mandate of the government. You couple that with the strength of our team and our portfolio of offerings. We've weathered a couple of cycles in China over the time that I've been here. But when you go back and look over the last 7 or so years, it's like a double-digit CAGR of growth, and we continue to see that potential going forward. So I'm very proud of the team and optimistic about China for us.

喬，你已經知道這一點了，但對於其他聽眾來說，我一直看好中國，只是因為從水和環境的角度來看，中國的潛在需求和需要仍然是最高政策任務政府。您可以將其與我們團隊的實力和我們的產品組合相結合。我在中國的這段時間裡，我們已經經歷了幾個週期。但當你回顧過去 7 年左右的時間時，就會發現複合年增長率呈兩位數，而且我們繼續看到這種潛力。所以我為我們的團隊感到非常自豪，並對我們的中國市場持樂觀態度。

That's good color. And then just I wanted to follow up on Idrica. Just -- where is that in terms of like what needs to happen for that to become kind of like a core kind of beachhead for you and digitalization on a scale basis? And then, Sandy, I just had one clarification for you. APT within Water Infrastructure. Just curious how that looked organically on like a full quarter basis for revenue and orders?

這顏色真好啊然後我想跟進 Idrica。只是——需要發生什麼才能成為你的核心灘頭陣地和大規模數字化？然後，桑迪，我只是向你澄清一件事。水基礎設施內的 APT。只是好奇整個季度的收入和訂單如何有機地呈現出來？

Yes, let me knock that out of the way and then Matthew can take Idrica. When you look at the performance of the full quarter of Evoqua, the business grew 9% organically and the APT piece of Evoqua grew 4%.

是的，讓我把它解決掉，然後馬修就能帶走伊德里卡。當你查看 Evoqua 整個季度的業績時，會發現該業務有機增長了 9%，而 Evoqua 的 APT 業務增長了 4%。

Great. Yes. In terms of Idrica, just for folks that are on the phone that may not know what Idrica is, it's -- we have an exclusive commercial partnership worldwide with Idrica, which is headquartered in Valencia, Spain. They were born out of the utility operator and the digital platform that they have that we're partnered with, addresses really the biggest pain point we hear from utilities, need for a singular platform to seamlessly integrate all of their applications and data. And I would say we have built really good momentum over the past 4 to 5 months. We've engaged over 200-plus utilities globally, and it's got really global reach, it's fairly balanced across the globe and have built a solid funnel with really significant synergy wins through bundling our solutions.

偉大的。是的。就 Idrica 而言，對於那些可能不知道 Idrica 是什麼的人來說，我們與總部位於西班牙巴倫西亞的 Idrica 建立了全球獨家商業合作夥伴關係。它們脫胎於公用事業運營商及其與我們合作的數字平台，真正解決了我們從公用事業公司那裡聽到的最大痛點，即需要一個單一平台來無縫集成其所有應用程序和數據。我想說，在過去的 4 到 5 個月裡，我們已經建立了非常好的勢頭。我們已經與全球 200 多家公用事業公司合作，它具有真正的全球影響力，在全球範圍內相當平衡，並通過捆綁我們的解決方案建立了一個堅實的渠道，具有真正顯著的協同效應。

So I would say it is becoming the beachhead. It will become the beachhead and earlier in Deane's question, is going to help us pull through and drive more digital content and also reoccurring revenue, which is really important.

所以我想說它正在成為灘頭陣地。它將成為灘頭陣地，在迪恩之前的問題中，它將幫助我們渡過難關並推動更多的數字內容和經常性收入，這非常重要。

Just one example I'll give you in the U.S. recently where we leveraged this digital platform, we're calling the Xylem View which is the Idrica platform. We pulled through a large AMI order. Now you're seeing in the backlog. So you saw the backlog grow by $300 million. One of those big synergy wins was due to the digital platform that we enabled and pull through this synergy order. So it's going to help us with recurring revenue, but it's also going to pull through content, which is really strong.

我最近在美國舉了一個例子，我們利用了這個數字平台，我們稱之為 Xylem View，即 Idrica 平台。我們完成了一份大額 AMI 訂單。現在您會看到積壓的情況。因此，您看到積壓訂單增加了 3 億美元。這些巨大的協同效應勝利之一歸功於我們啟用並完成此協同效應訂單的數字平台。因此，它將幫助我們獲得經常性收入，但它也將帶來內容，這非常強大。

And we'll take our next question from Nathan Jones with Stifel.

我們將回答 Nathan Jones 和 Stifel 提出的下一個問題。

I'm going to start on the cost synergy side. Pretty good run rate to be at $40 million by the end of the year, like 30% of the targeted cost synergy number. So maybe you could just start off by talking about where that's coming from to hit that kind of run rate that quickly in this kind of deal, the major buckets for the $140 million? And then if you can give us any color on how we should think about those layering in, in '24, '25, '26?

我將從成本協同方面開始。到今年年底，運行率將達到 4000 萬美元，相當於目標成本協同效應數字的 30%。所以也許你可以首先談談在這種交易中，1.4 億美元的主要資金來源是如何快速達到這種運行率的？然後，您能否給我們一些建議，告訴我們應該如何考慮“24”、“25”、“26”中的分層？

Yes. Sure, Nate. Let me kick that off. I think the cost synergy buckets that we outlined when we announced the transaction have not changed. So the first category was to go after a public company costs, overlapping public company costs as well as some of the SG&A savings. And so that is making up the lion's share of the savings that we're going to realize in 2023.

是的。當然，內特。讓我開始吧。我認為我們在宣布交易時概述的成本協同效應並沒有改變。因此，第一類是追求上市公司成本、重疊上市公司成本以及一些 SG&A 節省。因此，這將構成我們將在 2023 年實現的節省的大部分。

And the other 2 categories of savings, which are going to come from procurement savings as well as some site consolidations and manufacturing footprint overlap, we expect the procurement savings to start to kick in later in '24. And the manufacturing site consolidations, that's going to happen over time. We have those phased because we want to make sure we're purposely taking care of our customers.

另外兩類節省將來自採購節省以及一些站點整合和製造足跡重疊，我們預計採購節省將在 2024 年晚些時候開始發揮作用。隨著時間的推移，生產基地的整合將會發生。我們分階段進行這些工作是因為我們希望確保我們有目的地照顧我們的客戶。

So about $40 million exit rate in Q4 as I look into '24, we'll be more than double that when we exit '24. So I think all signs, we're very confident about the $140 million.

因此，當我展望 24 年時，第四季度的退出率約為 4000 萬美元，當我們退出 24 年時，我們將增加一倍以上。所以我認為從所有跡象來看，我們對 1.4 億美元非常有信心。

And I did want to ask a couple of questions or one probably long question about revenue synergies. It's obviously a big motivating factor for this deal to get done in the first place. Not looking for exact numbers. (inaudible), more of those in early '24. But if you can just talk conceptually about areas where you see potential for revenue synergies and kind of the phasing of those. I mean, there's obviously the APT and Water Infrastructure combination, I think, certainly signals that there's revenue synergies there, and you talked about them before.

我確實想問幾個問題，或者一個關於收入協同效應的可能很長的問題。這顯然是促成這筆交易的一個重要推動因素。不尋找確切的數字。 （聽不清），更多是在 24 年初。但如果你能從概念上談論你認為有收入協同效應潛力的領域以及這些領域的分階段。我的意思是，我認為 APT 和水基礎設施的結合顯然表明存在收入協同效應，您之前也談到過它們。

But maybe talking about things like expanding Evoqua's service-based business model internationally, maybe leveraging their footprint in the U.S. to develop some more service-based business models with Xylem's legacy products? And then any other channels you'd be willing to talk about to help us understand the opportunity here?

但也許談論諸如在國際上擴展 Evoqua 基於服務的業務模式之類的事情，也許利用他們在美國的足跡，利用賽萊默的傳統產品開發一些更多基於服務的業務模式？那麼您願意談論任何其他渠道來幫助我們了解這裡的機會嗎？

Sure. So Nate, this is Patrick. So I go back to the 3 overarching kind of areas that we're focused on. And what I would offer is we've also got special incentives in place for our teams to go capture the revenue synergy because we want people to be highly motivated to go do these things beyond their day job.

當然。內特，這是帕特里克。所以我回到我們關注的 3 個總體領域。我想說的是，我們還為我們的團隊提供了特殊的激勵措施，以獲取收入協同效應，因為我們希望人們有很高的積極性去做這些超出日常工作的事情。

So deep in our utility penetration. And that really is around, again, combination of our treatment product portfolio of the 2 companies. They really do complement each other very, very well and leveraging what Xylem's really market-leading utility position is around the world. These are not North America comments alone, they're around the world, is a big opportunity.

我們的公用事業滲透如此之深。這確實是圍繞我們兩家公司的治療產品組合的組合。它們確實非常非常互補，並且充分利用了賽萊默在全球市場上真正領先的公用事業地位。這些不僅僅是北美的評論，它們遍布世界各地，是一個巨大的機會。

Secondly, scaling our offering to industrial customers. Again, we call them industrial, and there's a number of customer sets that are in that area that we think there are big opportunities. We don't think we see big opportunities to really go solve their needs. So if you think about -- well, the third is expanding the ISS offering internationally.

其次，擴大我們向工業客戶提供的產品範圍。我們再次將其稱為工業領域，我們認為該領域有許多客戶群體存在巨大的機會。我們認為我們沒有看到真正解決他們需求的大機會。因此，如果你想一想，第三個就是擴大國際空間站的國際服務範圍。

And 2 and 3 have a lot in common because as part of our diligence when we looked at Evoqua, they have a really, really impressive roster of customers market-leading customers that cut across areas of whether it be power, whether it be food and beverage, whether it be life science, whether -- again, whether it be microelectronics that have needed even more Evoqua's capability than Evoqua has been able to provide in the past, especially international. And that's where we, as Xylem, have the footprint and we had the scale and the resources to be able to drive that adoption.

2 和 3 有很多共同點，因為作為我們在研究 Evoqua 時盡職調查的一部分，他們擁有非常非常令人印象深刻的客戶名單，這些客戶是市場領先的客戶，跨越了電力、食品和食品等領域。飲料，無論是生命科學，還是微電子領域，都需要Evoqua 的能力，而Evoqua 過去無法提供這種能力，尤其是在國際領域。這就是我們作為賽萊默的足跡，我們擁有能夠推動這種採用的規模和資源。

And we'll take our next question from Joe Giordano with Jefferies.

我們將回答喬·佐丹奴和杰弗里斯提出的下一個問題。

Operator, I think we've heard from him.

接線員，我想我們已經收到他的消息了。

We'll take our next question from Saree Boroditsky with Jefferies.

我們將回答 Saree Boroditsky 和 ​​Jefferies 提出的下一個問題。

Maybe digging into building solutions a little bit. Commercial demand has continued to be strong. I think this is one area that you're anticipating a slowdown previously. So maybe just an update on what you're seeing there.

也許會深入研究一下構建解決方案。商業需求持續強勁。我認為這是您之前預計會放緩的一個領域。所以也許只是您在那裡看到的內容的更新。

Yes. I mean -- I'm sorry, so it was a little bit choppy, you asked about commercial? Yes. So our commercial business has been pretty resilient this year. We've seen -- continue to see strong revenue growth. And our outlook for the back of the year is -- we still are going in with an elevated backlog. So nothing has changed materially there.

是的。我的意思是——抱歉，有點不穩定，你問的是商業廣告嗎？是的。因此，今年我們的商業業務相當有彈性。我們已經看到——繼續看到強勁的收入增長。我們對今年下半年的展望是——我們的積壓情況仍然會增加。所以那裡沒有發生任何實質性變化。

Saree you were a bit choppy and breaking. I want to make sure we clarify your question in terms of which segment.

紗麗你有點不穩定和破碎。我想確保我們能澄清您在哪個部分的問題。

Yes. I think you're anticipating a slowdown previously. I think said maybe [AMI]. Just trying to get an update there on building solutions. And then maybe just on -- just following that up on residential, obviously, small market for you guys, but how did that trend through the quarter? And are you seeing any positive signs there?

是的。我認為您之前預計經濟會放緩。我想也許是[AMI]。只是想了解有關構建解決方案的最新信息。然後也許只是 - 只是跟進住宅市場，顯然，對你們來說，這個市場很小，但是整個季度的趨勢如何？您是否看到任何積極跡象？

Yes. Saree, I mean, I think when you look across the portfolio, we're seeing really good orders momentum and strong book-to-bill. The one soft spot in our portfolio is residential. And before the acquisition, that made up about 5% of our revenue base. Now it's even lower than that. It's 2% or 3% of our revenue base. So yes, that is the weakest part of our portfolio. You're seeing a slower growth outlook in AWS for the second half of the year, offset by the other businesses that have more resilient end markets such as utilities.

是的。薩雷，我的意思是，我認為當你縱觀整個投資組合時，我們會看到非常好的訂單勢頭和強勁的訂單出貨量。我們投資組合中的一個弱點是住宅。在收購之前，這約占我們收入基礎的 5%。現在甚至比這個還要低。這是我們收入基礎的 2% 或 3%。所以，是的，這是我們投資組合中最薄弱的部分。您會看到 AWS 今年下半年的增長前景放緩，但被公用事業等終端市場更具彈性的其他業務所抵消。

And we'll take our next question from Andy Kaplowitz with Citigroup.

我們將回答花旗集團安迪·卡普洛維茨的下一個問題。

So Patrick, dewatering has obviously remained strong for you guys. We talked about it in the past being a little more cyclical, but it seems like it's sort of holding up well. So maybe you can talk about sort of what you see going forward, maybe even into '24 in that business.

帕特里克，脫水對你們來說顯然仍然很強勁。我們過去談到過它更具週期性，但看起來它保持得很好。所以也許你可以談談你對未來的看法，甚至可能到 24 年該行業的發展。

Yes. So dewatering had historically, for those that may be relatively new to the story of Xylem, had historically been one of our more cyclical businesses. And because it's such a high-margin business, it would tend to capture spotlight even with a little bit of movement in terms of downturn. And there have been a number of moves that we've made over the past handful of years to diversify the end market exposure of that.

是的。因此，對於那些對賽萊默的故事可能相對陌生的人來說，脫水在歷史上一直是我們更具週期性的業務之一。而且由於這是一項利潤率很高的業務，即使在經濟低迷時期出現一點點變化，它也往往會成為人們關注的焦點。在過去的幾年裡，我們採取了許多舉措來實現終端市場的多元化。

I'll hand it over to Matthew to kind of give his take on kind of where we are positioned right now. But I'm certainly proud of the work the team has done. And there's been a lot of work done on synergy, commercial integration even before the acquisition of Evoqua and I know it's like stronger now.

我將把它交給馬修，讓他對我們現在所處的位置發表看法。但我當然為團隊所做的工作感到自豪。甚至在收購 Evoqua 之前，我們就已經在協同和商業整合方面做了很多工作，我知道它現在變得更加強大。

Yes. No, it's great, Patrick. We've put a lot of time and effort into dewatering over the past couple of years, Andy. And I would say maybe a couple of things. One is we invested in the fleet, both in Europe and in the U.S., which has really helped us capture more wins. Number two, really coming out of 2019, we needed to diversify our segments in dewatering. We were too oil and gas dependent. And we've done a nice job of mixing into light construction as well as into mini bypass and some different areas that are a bit more profitable and a bit more steady and less cyclical.

是的。不，這太棒了，帕特里克。安迪，過去幾年我們在脫水方面投入了大量時間和精力。我也許會說幾件事。一是我們對歐洲和美國的機隊進行了投資，這確實幫助我們贏得了更多勝利。第二，從 2019 年開始，我們需要實現脫水領域的多元化。我們過於依賴石油和天然氣。我們在混合輕型建築、小型繞道和一些不同領域方面做得很好，這些領域利潤更高、更穩定、週期性更少。

So those are a couple of key drivers, I would say that's really helped us. And the last thing I would say in the U.S. where predominantly our revenue is, we've done a good job of driving the businesses together and driving synergies with our service organizations, passing leads back and forth to one another, with our pipeline assessment service businesses, our valve maintenance business and whatnot. So really good on the synergy side that's helped drive growth as well.

這些是幾個關鍵驅動因素，我想說這確實對我們有幫助。我要說的最後一件事是，在我們的收入主要來源的美國，我們在推動業務共同發展、推動與我們的服務組織的協同效應方面做得很好，通過我們的管道評估服務相互傳遞線索業務，我們的閥門維護業務等等。協同效應非常好，這也有助於推動增長。

I would just wrap up that answer by saying, I think in this business, like the entire business but certainly in this area, it's about leadership. We've got a strong leadership team in that area that are working together. They're leveraging the portfolio. They're focusing on what happens at a slight kind of local service level. This, just like our ISS business coming in, it's people, very people-driven business. It's an emergency room kind of operation. it's what happens every day, 24/7. And so the hearts and minds of the people really, really matter here. They do everywhere, but they really matter here in terms of what customers experience in the moment. And again, I just give -- I give an applause to leadership team for what they've done.

我想總結這個答案，我認為在這個行業，就像整個行業一樣，但當然在這個領域，這與領導力有關。我們在該領域擁有一支強大的領導團隊，他們正在共同努力。他們正在利用投資組合。他們關注的是在輕微的本地服務水平上發生的事情。這就像我們的國際空間站業務一樣，是人，是非常以人為本的業務。這是一種急診室手術。這是每天 24/7 都會發生的事情。因此，人民的心靈在這裡真的非常重要。它們無處不在，但就客戶當下的體驗而言，它們在這裡確實很重要。再說一次，我只是向領導團隊的所作所為致以掌聲。

Very helpful, guys. And I apologize, I joined the call a little late, so if this has been asked, but like on price versus cost, maybe talk about sort of -- you already talked about supply chain getting better, I think, but sort of what you're seeing on the pricing side versus that sort of improving supply chain? And then maybe looking at Evoqua too, any sort of differences in markets as you're thinking about price versus cost as you go to the second half of this year and into '24.

非常有幫助，伙計們。我很抱歉，我參加電話會議的時間有點晚了，所以如果有人問這個問題，但就像價格與成本的問題一樣，也許會談論一些——我想，你已經談到了供應鏈變得更好，但你所談論的是什麼您是否看到了定價方面與供應鏈改善方面的對比？然後也許也看看 Evoqua，當你進入今年下半年和進入 24 世紀時，當你考慮價格與成本時，市場上的任何差異。

Yes. Thanks for the question, Andy. We've seen really nice development on the price cost side, and it continues -- the way we've managed it, it's now been a tailwind for us from a margin perspective. We are starting to anniversary some of the price increases that we took when inflation was peaking. And so you're not going to see as much of a tailwind from price in the back half of the year that you saw in the front half.

是的。謝謝你的提問，安迪。我們在價格成本方面看到了非常好的發展，而且這種發展仍在繼續——按照我們的管理方式，從利潤的角度來看，它現在對我們來說是一種順風。我們即將開始慶祝通脹見頂時的一些價格上漲週年紀念日。因此，下半年的價格上漲幅度不會像上半年那樣大。

The positive thing is that this is actually the first quarter that we've seen inflation start to moderate and come through our results. And we would expect to see a little more of that as well in the back half of the year. So really great work by the commercial teams to make that happen over the past year.

積極的一面是，這實際上是我們看到通脹開始放緩並體現在我們的業績上的第一季度。我們預計今年下半年也會看到更多這樣的情況。在過去的一年裡，商業團隊為實現這一目標付出了巨大的努力。

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

我們將回答高盛布萊恩·李 (Brian Lee) 提出的下一個問題。

A question on the M&CS margins. Kudos on super solid execution there. I don't think we've seen margins at these levels since I think right after you bought Sensus, so it's been a while. So just trying to get a better sense of what drove that, how sustainable it is? And then what we maybe should be thinking of run rates through year-end. And if you think this is a good sort of jumping off point for potentially getting back to a double-digit margin on a full year basis next year. Is that a reasonable sort of target to have at this point?

關於 M&CS 利潤的問題。感謝那裡超級可靠的執行力。我認為自從您購買 Sensus 後，我們就沒有看到過這樣的利潤率，所以已經有一段時間了。那麼，只是想更好地了解是什麼推動了這一趨勢，它的可持續性如何？然後我們也許應該考慮年底的運行率。如果您認為這是明年全年利潤率恢復兩位數的一個很好的起點。目前這個目標合理嗎？

Yes. Thanks for the question. I'll start us out and then turn it over to Sandy. But we've spent a lot of time in the past 6 to 12 months, really, the past 12 months on M&CS margins. And I'd say there's probably 2 or 3 things I would point to. Number one, obviously, we were hampered by chip supply, not being able to unlock the backlog. And so being able to unlock the backlog is really helped with absorption in our factories and helping cover fixed costs. So that's probably number one.

是的。謝謝你的提問。我先讓我們開始，然後把它交給桑迪。但過去 6 到 12 個月，實際上是過去 12 個月，我們花了很多時間在 M&CS 利潤上。我想說我可能會指出兩三件事。第一，顯然，我們受到芯片供應的阻礙，無法釋放積壓的訂單。因此，能夠釋放積壓訂單確實有助於我們工廠的吸收並幫助支付固定成本。所以這可能是第一。

Number two is we're getting back to productivity in that business. We had to redeploy resources to go after redesign our products for chips. And so productivity has increased this year year-over-year, and we'll continue to drive that in the business.

第二是我們正在恢復該業務的生產力。我們必須重新部署資源來重新設計我們的芯片產品。因此，今年的生產力逐年提高，我們將繼續推動業務發展。

And then thirdly, I would just say, in general, price cost has been a very good positive over the past 2 to 3 quarters in M&CS, which has helped buoy margins as well. So we'll continue that pace going forward and expect margin improvement sequentially going forward.

第三，我只想說，總的來說，在過去的 2 到 3 個季度中，價格成本對 M&CS 來說是一個非常好的積極因素，這也有助於提振利潤率。因此，我們將繼續保持這一步伐，並預計未來利潤率將繼續改善。

And Brian, this is Patrick. I would just offer up some historical perspective here for those that may be early on in the story here. M&CS is not a turnaround. We -- I mean, this has been an issue in terms of being able to deliver on what has been an impressively growing backlog over the course of the past few years. And we've had margin read-through on what that backlog is for a long time. We've made commitments in the past as to when we reach certain levels of revenue, what the margins would be, that's exactly what you're seeing right now.

布萊恩，這是帕特里克。我只想為那些可能處於故事早期的人提供一些歷史觀點。 M&CS 並不是一個轉機。我們——我的意思是，就能否交付過去幾年中不斷增長的積壓訂單而言，這是一個問題。我們長期以來一直對積壓的情況進行了保證金審查。我們過去曾承諾何時達到一定的收入水平，利潤率是多少，這正是您現在所看到的。

So again, I give a shout out to the entire team that drives, especially the metrology part of our business because they've been executing on this ever since we did the acquisition. It's just -- it's always been something along the way. And now we're seeing that the clouds have kind of moved off the horizon and you're now seeing what the full potential or at least the next stage of potential is for this part of our business.

因此，我再次向整個驅動團隊表示敬意，尤其是我們業務的計量部分，因為自從我們進行收購以來，他們一直在執行此任務。只是——它一直是一路走來的事情。現在我們看到烏雲已經消失，您現在看到了我們這部分業務的全部潛力或至少下一階段的潛力。

Okay. That's great. I appreciate that color. And then maybe just a second question around -- with the acquisition of Evoqua, clearly much bigger scale, but much more diversification across the business model. It seems like it'd be a lot less cyclical going forward. In the past, I know Evoqua has sort of broken out what the sort of their recurring revenue exposure is as a part of their portfolio or sales mix. Now on the combined entity, any sense you can give us as to how you think about the recurring revenue nature of the different segments where you have exposure there and kind of how that compares to Xylem stand-alone?

好的。那太棒了。我很欣賞那種顏色。然後也許只是第二個問題——收購 Evoqua 後，規模顯然更大，但業務模式也更加多元化。看來未來的周期性會少很多。過去，我知道 Evoqua 已經將其經常性收入敞口作為其投資組合或銷售組合的一部分進行了分類。現在，關於合併後的實體，您可以告訴我們您如何看待您所涉足的不同部門的經常性收入性質以及與賽萊默獨立部門相比如何？

Yes. No, certainly, great question, Brian. I mean it was certainly not the reason for the acquisition, but certainly, one of the big benefits is that recurring revenue component. The Evoqua business, we have tremendous line of sight going into any given year based upon contractual commitments as to what that looks like. And so you're talking about the largest portion of their revenue is predictable and repeatable going into the year. And so -- and that really is ISS, which is obviously the largest part of what we got from Evoqua.

是的。不，當然，這是個好問題，布萊恩。我的意思是，這當然不是收購的原因，但當然，最大的好處之一是經常性收入部分。對於 Evoqua 業務，根據合同承諾，我們對任何特定年份都擁有廣闊的視野。所以你說的是他們收入的最大部分是可預測和可重複的。所以——這確實是 ISS，這顯然是我們從 Evoqua 獲得的最大部分。

If you look at the other parts of our business, historically, our M&CS business, which is metrology, also has a lot of revenue under contract. And so a majority of revenue there is visible going into the year, but not even one year. It's looking at it over the course of a 10- to 12-year time frame, given AMI deals that are there. Water Infrastructure would be the next one, given the fact that we've got such a large installed base of our particularly submersible wastewater pumps, but also our treatment products that we do that are typically long-term kind of projects that we're operating under. And it's just a very stable repair replacement environment. We feel very good about that.

如果你看看我們業務的其他部分，從歷史上看，我們的 M&CS 業務（即計量）也有大量合同收入。因此，大部分收入在當年是可見的，但甚至不是一年。考慮到現有的 AMI 交易，它會在 10 到 12 年的時間範圍內進行研究。水基礎設施將是下一個，因為我們擁有如此龐大的潛水污水泵安裝基礎，而且我們所做的處理產品通常是我們正在運營的長期項目在下面。而且只是一個非常穩定的修復更換環境。我們對此感覺非常好。

The area -- the business that's always been shorter cycle for us is our Applied Water business. But even there, we would say upwards of 1/3 to 40% of our revenue, while it's not under contract, it's a replacement model. And once you've spec your pumps into a commercial building, or an industrial application, the likelihood of a customer changing out to a new supplier is very low. It's very sticky, and we have market-leading positions there. So even though it's not contractual, we can kind of have that visibility going into the year.

對我們來說周期一直較短的業務領域是我們的應用水業務。但即便如此，我們也會說占我們收入的 1/3 到 40% 以上，雖然它沒有合同規定，但它是一種替代模型。一旦您將泵指定為商業建築或工業應用，客戶更換新供應商的可能性就非常低。它非常有粘性，我們在那裡擁有市場領先地位。因此，即使它不是合同性的，我們也可以在今年獲得這種可見性。

So we will -- in the future, we'll give you specific numbers in the aggregate. I don't want to overcommit to that right now, but we feel very good about the durability and nature of recurring revenue of this business much more now than we did a quarter ago because of bringing in Evoqua.

因此，我們將在未來向您提供具體的總體數字。我現在不想對此做出過多承諾，但由於引入了 Evoqua，我們對這項業務的持久性和經常性收入的性質感到非常滿意，比一個季度前要好得多。

This concludes the Q&A portion of today's call. I would now like to turn the floor over to Patrick Decker for closing remarks.

今天電話會議的問答部分到此結束。現在我想請帕特里克·德克爾 (Patrick Decker) 致閉幕詞。

Well, again, I mean, thanks to all of you for your time this morning and for your ongoing support. I look forward to seeing many of you over the coming months here before our next call. And just a reminder, lastly, again, really excited today about the power of the combination of 2 companies coming together that were strong on their own and performing well. And now is the time. It's the right time in this world for these 2 companies to come together because there are so many great water challenges out there to be dealt with, and we feel that we are in a position to really be a meaningful part of that. So thank you all very much.

好吧，我的意思是，再次感謝大家今天早上的時間以及你們持續的支持。我期待著在接下來的幾個月裡在我們下次電話會議之前在這裡見到你們中的許多人。最後再次提醒大家，今天兩家公司的結合所帶來的力量讓我們感到非常興奮，這兩家公司本身實力雄厚，而且表現良好。現在是時候了。現在是這兩家公司走到一起的正確時機，因為有許多巨大的水挑戰需要應對，我們認為我們能夠真正成為其中有意義的一部分。非常感謝大家。

Thank you. This concludes today's Xylem Second Quarter 2023 Earnings Conference Call. Please disconnect your line at this time, and have a wonderful day.

謝謝。今天的賽萊默 2023 年第二季度收益電話會議到此結束。此時請斷開您的線路，祝您有美好的一天。