賽莱默 (XYL) 2023 Q4 法說會逐字稿

Welcome to Xylem's Fourth Quarter 2023 Results Conference Call. (Operator Instructions) Please note, this event is being recorded.

歡迎參加賽萊默 2023 年第四季業績電話會議。 （操作員說明）請注意，正在記錄此事件。

I would now like to turn the conference over to Andrea van der Berg, Vice President of Investor Relations. Please go ahead.

現在我想將會議交給投資人關係副總裁 Andrea van der Berg。請繼續。

Thank you, operator. Good morning, everyone, and welcome to Xylem's Fourth Quarter 2023 Earnings Call. With me today are Chief Executive Officer, Matthew Pine, and Chief Financial Officer, Bill Grogan. They will provide their perspective on Xylem's fourth quarter and full year 2023 results and discuss our outlook and guidance for 2024.

謝謝你，接線生。大家早安，歡迎參加賽萊默 2023 年第四季財報電話會議。今天與我在一起的有首席執行官馬修·派恩 (Matthew Pine) 和首席財務官比爾·格羅根 (Bill Grogan)。他們將提供對賽萊默 2023 年第四季和全年業績的看法，並討論我們對 2024 年的展望和指導。

Following our prepared remarks, we will address questions related to the information covered on the call. I'll ask you to please keep to one question and a follow-up and then return to the queue. As a reminder, this call and our webcast are accompanied by a slide presentation available in the Investors section of our website. A replay of today's call will be available until midnight, February 13. Additionally, the call will be available for playback via the Investors section of our website under the heading Investor Events.

在我們準備好的發言之後，我們將回答與電話會議所涵蓋資訊相關的問題。我會請您繼續回答一個問題並跟進，然後返回隊列。謹此提醒，本次電話會議和我們的網路廣播均附有幻燈片演示文稿，可在我們網站的投資者部分查看。今天的電話會議重播將持續到 2 月 13 日午夜。此外，電話會議還可以透過我們網站的投資者部分的投資者活動標題進行回放。

Please turn to Slide 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. 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.

請參閱投影片 2。我們將在今天的電話會議上發表一些前瞻性聲明，包括提及我們預計將來將會或可能發生的未來事件或發展。這些陳述受到未來風險和不確定性的影響。例如賽萊默最新 10-K 年度報告以及向 SEC 提交的後續報告中所述的因素。請注意，本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有重大差異。

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 organic and on adjusted basis, unless otherwise indicated, and non-GAAP financials have been reconciled for you and are included in the Appendix section of the presentation.

請參閱投影片 3。我們為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，所有參考資料都將基於有機和調整後的基礎上，並且非公認會計準則財務數據已為您進行了核對，並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, Matthew Pine.

現在請翻到幻燈片 4，我會將電話轉給我們的執行長 Matthew Pine。

Thanks, Andrea. Good morning, everyone, and thanks for joining us. It's a pleasure to share the Xylem team's exceptional performance in the fourth quarter of a transformational year for the enterprise. The team delivered both Q4 and full year results exceeding expectations on revenue and earnings per share.

謝謝，安德里亞。大家早安，感謝您加入我們。很高興與大家分享賽萊默團隊在企業轉型年第四季的卓越表現。該團隊在第四季度和全年的收入和每股收益方面均超出了預期。

Looking at the fourth quarter, strong demand drove organic revenue growth of 9%. With disciplined execution, delivering EBITDA margin expansion of 90 basis points, that drove double-digit orders growth, and our backlog is now more than $5 billion. Our Q4 performance capped off a year in which the team overdelivered in every quarter.

從第四季來看，強勁的需求推動有機收入成長 9%。透過嚴謹的執行，EBITDA 利潤率成長了 90 個基點，推動了兩位數的訂單成長，我們的積壓訂單現已超過 50 億美元。我們第四季的表現為團隊每季超額交付的這一年畫上了圓滿的句號。

Full year organic revenues were up 12% with EBITDA margin expansion of 190 basis points and adjusted earnings per share growth of 20%. The team even delivered Evoqua run rate cost synergies in 2023 ahead of plan. Both the quarter and the full year give us very strong momentum entering 2024.

全年有機收入成長 12%，EBITDA 利潤率成長 190 個基點，調整後每股收益成長 20%。該團隊甚至提前於 2023 年實現了 Evoqua 運行率成本綜效。無論是季度還是全年，我們都為進入 2024 年提供了非常強勁的動力。

Despite a dynamic environment and the excitement of our combination with Evoqua, the team stayed focused on serving our customers. Joining forces with Evoqua has put the sector's most advanced portfolio of capabilities in the hands of our customers and opened up new opportunities to address even more of their water challenges.

儘管環境充滿活力，而且我們與 Evoqua 的合併令人興奮，但團隊仍然專注於為客戶提供服務。與 Evoqua 的合作使我們的客戶掌握了該行業最先進的功能組合，並為解決更多的水挑戰開闢了新的機會。

In our last earnings call, we shared a bit about the synergy traction we're seeing between the legacy Evoqua services business and Xylem's dewatering business. And since then, we've seen the momentum continue to build as the team wins in the marketplace with our combined offering. On January 1, we made it even easier for our customers to access the full breadth of our capabilities with the creation of the Water Solutions and Services segment, effectively combining Xylem and Evoqua services offerings in a realigned segment structure. The move supports the continuing growth of our services business and expansion of recurring revenues. And to put Xylem in an even stronger position to capture value by serving industrial water customers who are increasingly outsourcing water management as water stresses intensify.

在我們上次的財報電話會議中，我們分享了一些關於我們所看到的傳統 Evoqua 服務業務和賽萊默脫水業務之間的協同效應。從那時起，我們看到隨著團隊憑藉我們的組合產品在市場上獲勝，這種勢頭繼續增強。 1 月 1 日，我們透過創建水解決方案和服務部門，將 Xylem 和 Evoqua 服務產品有效地結合到重新調整的部門結構中，使客戶能夠更輕鬆地獲得我們的全部能力。此舉支持我們服務業務的持續成長和經常性收入的擴大。隨著水資源壓力的加劇，賽萊默透過為越來越多地外包水資源管理的工業用水客戶提供服務，使賽萊默處於更有利的地位，從而獲取價值。

Looking forward, we are starting off strong in 2024 with the momentum from our outperformance in '23, and continued healthy demand in our major end markets. Though we're keeping a close eye on demand dynamics in China and are taking a prudent view of end markets for Applied Water, which is our most cyclical segment, our backlog across the business is a source of continuing strength, especially in M&CS. We also feel very confident in our ability to drive continuing margin expansion by focusing our energy on the parts of the business delivering the greatest value. Overall, we're well positioned for profitable and sustainable growth. We expect 2024 organic revenues to be up 3% to 5% with solid EBITDA margin expansion, resulting in earnings per share between $4 and $4.20.

展望未來，憑藉 23 年優異表現以及主要終端市場持續健康的需求，我們將在 2024 年強勁起步。儘管我們密切關注中國的需求動態，並對應用水務（我們最具週期性的細分市場）的終端市場持謹慎態度，但我們整個業務的積壓訂單是持續增長的源泉，尤其是在 M&CS 領域。我們也對透過將精力集中在能提供最大價值的業務部分來推動利潤率持續擴張的能力充滿信心。總體而言，我們已做好盈利和可持續增長的準備。我們預計 2024 年有機收入將成長 3% 至 5%，EBITDA 利潤率穩定擴張，每股收益將在 4 美元至 4.20 美元之間。

I'll now turn it over to Bill to walk through the quarter's results and our outlook for 2024 in more detail.

我現在將把它交給 Bill，讓他更詳細地介紹本季的業績和我們對 2024 年的展望。

Thanks, Matthew. Please turn to Slide 5. As Matthew mentioned, we are pleased with the strong finish to 2023. The team has stayed focused and consistently we delivered throughout the year, exceeding our expectations on revenue and earnings per share for Q4 and the full year. We continue to see resilient demand and are supported by our $5.1 billion backlog, which grew 5% organically for the year. Organic orders grew 10% in the quarter, with book-to-bill approximately 1 for the quarter and greater than 1 for the full year. Total revenues grew 41%, while organic revenues rose 9%, exceeding our guidance of 4% to 5%. Our performance was led by M&CS and water infrastructure. All regions grew, led by double-digit growth in the U.S.

謝謝，馬修。請參閱幻燈片5。正如Matthew 提到的，我們對2023 年的強勁收官感到高興。團隊始終保持專注，全年始終如一地交付成果，超出了我們對第四季度和全年收入和每股收益的預期。我們繼續看到強勁的需求，並得到了 51 億美元的積壓訂單的支持，該積壓訂單今年有機增長了 5%。本季有機訂單成長 10%，季度訂單出貨量約 1，全年訂單出貨量超過 1。總收入成長了 41%，而有機收入成長了 9%，超出了我們 4% 至 5% 的指導。我們的業績以 M&CS 和水基礎設施為主導。所有地區均實現成長，其中美國實現了兩位數成長。

EBITDA margin was 19.6%, up 90 basis points from the prior year. With productivity savings, price and higher volume more than offsetting inflation, this reflects 33% incrementals on the legacy Xylem performance. We finished the year with EBITDA margin of 18.9%, up nearly 200 basis points over prior year. Our EPS in the quarter was $0.99, above the high end of our guide by $0.03. When excluding the impact of Evoqua, EPS was $1.10, up 10% over prior year.

EBITDA 利潤率為 19.6%，比上年增長 90 個基點。由於生產率的節省、價格和產量的增加足以抵消通貨膨脹，這反映了傳統賽萊默性能的 33% 增量。年底，我們的 EBITDA 利潤率為 18.9%，比上年增長近 200 個基點。我們本季的每股收益為 0.99 美元，比我們的指導上限高出 0.03 美元。在排除 Evoqua 的影響後，每股收益為 1.10 美元，比上年增長 10%。

Our financial position remains robust with over $1 billion in cash and available liquidity of approximately $2 billion. We ended the year with adjusted free cash flow conversion of 122%, exceeding our expectations and significantly improved versus last year.

我們的財務狀況依然強勁，擁有超過 10 億美元的現金和約 20 億美元的可用流動資金。年底，我們的調整後自由現金流轉換率為 122%，超出了我們的預期，並且與去年相比顯著改善。

Please turn to Slide 6. Before I highlight each segment's fourth quarter performance, I want to touch on some changes you'll see in our earnings materials going forward. In the spirit of 80/20, we have simplified our earnings materials to focus on what is most important for investors. To insist with the transition this quarter, we have provided our historical presentation format in the appendix.

請參閱投影片 6。在重點介紹每個部門第四季的業績之前，我想談談您將在我們未來的收益資料中看到的一些變化。本著 80/20 的精神，我們簡化了獲利材料，並專注於對投資者最重要的內容。為了堅持本季的過渡，我們在附錄中提供了我們的歷史演示格式。

And now on to the segment performance. Measurement and Control Solutions saw robust orders growth of 14%, with strength across the portfolio, led by metrology and assessment services. Backlog is $2.3 billion and book-to-bill is above 1, a reflection of the strong demand for our AMI solutions and other digital offerings. M&CS revenue was up 21%, driven by metrology backlog execution and strong demand. We finished the quarter with improved EBITDA margins of 17.3%, up 220 basis points versus the prior year and up 160 basis points sequentially on productivity, price and higher volumes.

現在談談細分市場的表現。測量和控制解決方案的訂單強勁增長 14%，在計量和評估服務的推動下，整個產品組合均表現強勁。積壓訂單為 23 億美元，訂單出貨比高於 1，反映出對我們的 AMI 解決方案和其他數位產品的強勁需求。在計量積壓執行和強勁需求的推動下，M&CS 營收成長了 21%。本季結束時，我們的 EBITDA 利潤率提高了 17.3%，比上年提高了 220 個基點，在生產力、價格和銷量方面環比提高了 160 個基點。

Water Infrastructure also saw orders growth of 9% for the quarter, with strength across the portfolio led by robust treatment demand globally. Revenue exceeded our expectations with total growth of 30% and organic growth of 9%, driven by robust OpEx demand across all regions. EBITDA margin for the segment was down 90 basis points, driven by the impacts of legacy Evoqua. When excluding the impact of Evoqua, EBITDA margin was up 50 basis points primarily due to price, productivity and volume more than offsetting inflation and unfavorable mix.

水基礎設施本季的訂單也成長了 9%，全球強勁的處理需求帶動了整個產品組合的實力。在所有地區強勁的營運支出需求的推動下，收入超出了我們的預期，總成長 30%，有機成長 9%。受遺留 Evoqua 的影響，該部門的 EBITDA 利潤率下降了 90 個基點。在排除 Evoqua 的影響後，EBITDA 利潤率成長了 50 個基點，主要是因為價格、生產力和產量足以抵消通貨膨脹和不利的組合。

In Applied Water, although orders grew, book-to-bill was 0.9x, as we continue to work down our backlog, and we saw softer demand environment in the U.S., our largest geography. Revenues were flat, in line with our guide with the decline in developed markets offset slightly offset slightly by growth in emerging markets. Segment EBITDA margin expanded 80 basis points with productivity and price more than offsetting inflation and volume declines.

在Applied Water，儘管訂單有所增長，但隨著我們繼續減少積壓訂單，訂單出貨比增長了0.9倍，而且我們看到我們最大的地區美國的需求環境更加疲軟。收入持平，與我們的指導一致，已開發市場的下滑被新興市場的成長略微抵消。部門 EBITDA 利潤率擴大了 80 個基點，生產力和價格足以抵消通貨膨脹和銷售下降的影響。

Integrated Solutions & Services, orders grew 5% on a pro forma basis, and book-to-bill was 1. Demand was driven by services. Pro forma revenue growth of 10% exceeded our expectations as implied in our reported guidance with healthy growth across the portfolio. Adjusted EBITDA margin was strong at 21.1% driven by price realization and volume.

綜合解決方案和服務，預計訂單增長 5%，訂單出貨比為 1。需求由服務驅動。正如我們報告的指導中所暗示的，預計收入增長 10%，超出了我們的預期，整個投資組合健康成長。受價格實現和銷售的推動，調整後 EBITDA 利潤率高達 21.1%。

Please turn to Slide 7. I will cover our segment outlook for the year. As Matthew mentioned, in December, we announced the creation of Water Solutions and Services segment. We are providing organic revenue guidance based on our previous reporting segments. Later this month, we will provide recast financial information aligned to the new segments. However, we expect the segment guidance outlook to largely be in line with the new segment structure and we'll update as needed in our Q1 earnings call.

請參閱投影片 7。我將介紹我們今年的部門展望。正如 Matthew 所提到的，12 月，我們宣布創建水解決方案和服務部門。我們根據先前的報告分部提供有機收入指導。本月晚些時候，我們將提供與新細分市場一致的改版財務資訊。然而，我們預計部門指導前景將在很大程度上與新的部門結構保持一致，我們將根據第一季財報電話會議的需要進行更新。

In M&CS, we expected growth of low teens. Demand and order momentum for our AMI solutions remains strong. We expect to see sequential revenue improvement throughout 2024 supported by a robust backlog. In Water Infrastructure, we expect growth of mid-single digits. We expect resilient OpEx demand due to mission-critical nature of our applications and a healthy CapEx demand. We are continuing to closely monitor softness in China where the majority of our business is in the utility end market.

在 M&CS 領域，我們預計青少年人數將會成長。我們的 AMI 解決方案的需求和訂單動能依然強勁。我們預計 2024 年營收將在強勁的積壓訂單的支持下實現連續成長。在水利基礎設施方面，我們預計將出現中個位數的成長。由於我們應用程式的任務關鍵型性質和健康的資本支出需求，我們預期營運支出需求將具有彈性。我們將繼續密切關注中國的疲軟情況，我們的大部分業務都在公用事業終端市場。

In Applied Water, we expect a modest decline of low single digits. We continue to see pockets of softness across our end markets, particularly in developed markets, which make up about 80% of our business. We also expect to see headwinds as we lap price increases and our backlog returns to more historic levels.

在應用水領域，我們預計將出現低個位數的小幅下降。我們繼續看到終端市場出現疲軟，尤其是已開發市場，這些市場約占我們業務的 80%。我們也預計，隨著價格上漲和積壓訂單恢復到歷史水平，我們也會遇到阻力。

ISS growth is expected to be mid-single digits with growth across both capital and services. We continue to see strong activity in our funnel particularly in high-growth verticals such as food and beverage, energy and life sciences. This segment is supported by $1 billion in backlog and a durable service business model. And as a reminder, the ISS growth outlook is on an organic basis.

隨著資本和服務的成長，基礎設施服務部門的成長預計將達到中個位數。我們繼續看到漏斗中的強勁活動，特別是在食品和飲料、能源和生命科學等高成長垂直領域。該細分市場得到了 10 億美元的積壓訂單和持久服務業務模式的支持。提醒一下，國際太空站的成長前景是有機的。

Now let's turn to Slide 8 for our 2024 and Q1 guidance. The growth outlook by segment translates to 2024 full revenue of $8.4 billion to $8.5 billion, resulting in total revenue growth of 14% to 15% and organic revenue growth of 3% to 5%. EBITDA margin is expected to be 19.4% to 19.9%. This represents 50 to 100 basis points of expansion versus the prior year, driven by higher volume, productivity and price offsetting inflation. This yields an EPS range of $4 to $4.20, up 8% at the midpoint over prior year. We are expecting approximately $100 million of exit run rate cost synergies in 2024, which is embedded in our guide. Free cash flow conversion for the year is expected to be 115% of net income.

現在讓我們轉向幻燈片 8，了解 2024 年和第一季的指導。按細分市場劃分的成長前景為 2024 年總收入為 84 億至 85 億美元，總收入成長 14% 至 15%，有機收入成長 3% 至 5%。 EBITDA 利潤率預計為 19.4% 至 19.9%。這意味著與前一年相比擴張了 50 至 100 個基點，這是由於產量、生產率和價格的增加抵消了通貨膨脹。每股收益範圍為 4 美元至 4.20 美元，比去年中位數成長 8%。我們預計 2024 年退出運行率成本綜效將達到約 1 億美元，這已納入我們的指南中。全年自由現金流轉換預計為淨利的115%。

Drilling down on the first quarter. We anticipate total revenue growth will be in the 36% to 38% range on a reported basis and 4% to 6% organically. We expect first quarter EBITDA margin to be approximately 18%, up 170 basis points, driven by higher volumes, continued price realization and productivity gains. This yields first quarter EPS of $0.80 to $0.85.

深入研究第一季。我們預計總收入成長將在報告基礎上的 36% 至 38% 範圍內，有機成長將在 4% 至 6% 範圍內。我們預計第一季 EBITDA 利潤率約為 18%，成長 170 個基點，主要得益於產量增加、價格持續實現和生產力提高。這使得第一季每股收益為 0.80 美元至 0.85 美元。

We are entering the year with momentum and from a position of strength. Our balanced outlook reflects our strong commercial position and the durability of our portfolio. While we also continue to monitor broader market conditions, particularly in China and Applied Water, which is our shortest-cycle business. In the case of larger-than-expected volume declines, we're ready to take additional cost actions as needed to ensure continued focus on margin expansion. Overall, our expectations for the year remain positive as we build on our strong momentum.

我們正以強勁的勢頭和強勁的勢頭進入新的一年。我們平衡的前景反映了我們強大的商業地位和投資組合的耐用性。同時我們也持續監控更廣泛的市場狀況，特別是中國和應用水務，這是我們週期最短的業務。如果銷量下降幅度大於預期，我們準備根據需要採取額外的成本行動，以確保繼續專注於利潤率擴張。總體而言，我們在強勁勢頭的基礎上，對今年的預期仍然樂觀。

With that, please turn to Slide 9, and I'll turn the call back over to Matthew for closing comments.

接下來，請翻到投影片 9，我會將電話轉回給 Matthew，以徵求結束意見。

Thanks, Bill. It's been incredibly exciting to step up as CEO at a time of such great momentum and opportunity for Xylem. I began the year by spending time with customers and colleagues in India and the Middle East. Bill and I started off in India, and the scale of ambition there, to modernize infrastructure and tackle the big water challenges is frankly awe inspiring. We have an outstanding team there, doing great work to serve customers from our localized R&D and manufacturing platform that gives us a real competitive advantage. And both India and the Middle East provide great reminders of the fundamental interconnectedness of economic value and social value creation in our business.

謝謝，比爾。在賽萊默發展勢頭如此強勁、機會如此之際，擔任執行長真是令人興奮不已。今年伊始，我與印度和中東的客戶和同事共度時光。比爾和我從印度開始，坦白說，那裡實現基礎設施現代化和應對重大水資源挑戰的雄心壯志令人驚嘆。我們在那裡擁有一支優秀的團隊，透過我們的在地化研發和製造平台為客戶提供出色的服務，這為我們帶來了真正的競爭優勢。印度和中東都很好地提醒我們，我們業務中的經濟價值和社會價值創造之間存在著根本的相互連結。

These markets present the expanse of commercial opportunity. In both markets, every project improves lives and increases the sustainability of communities. We took some time out with colleagues in India to visit a school in a rural area outside of Bangalore. We got hands on building a small-scale water treatment system that now provides clean drinking water to those students and their community. I'll be honest, the experience of celebrating with those kids and their teachers as the clean water started to flow, well, it's just hard to describe. And you also know that the impact on educational outcomes, health and quality of life is likely to be profound. That experience drove home for me not just the importance of what Xylem does but it reinforced the focus we're bringing into 2024. Whether at the scale of a school or the scale of a mega city, we have to make it easier for customers and communities to solve their big water challenges. Reducing the complexity of water solutions, that is our focus, simplifying water.

這些市場提供了廣闊的商業機會。在這兩個市場中，每個項目都改善生活並提高社區的可持續性。我們和印度的同事一起花了一些時間參觀了班加羅爾郊外農村地區的一所學校。我們著手建立了一個小型水處理系統，現在可以為這些學生及其社區提供乾淨的飲用水。老實說，當乾淨的水開始流動時，與這些孩子和他們的老師一起慶祝的經歷，嗯，很難描述。您也知道，這對教育成果、健康和生活品質可能會產生深遠的影響。這次經歷不僅讓我認識到賽萊默所做的事情的重要性，而且強化了我們對 2024 年的關注。無論是學校規模還是大城市規模，我們都必須讓客戶和客戶更容易社區解決巨大的水資源挑戰。降低水處理解決方案的複雜性是我們的重點，簡化水處理。

We have assembled the most advanced and most comprehensive portfolio of products, solutions and services in this sector. The value creation opportunity in front of us is to make all that capability far easier for customers to access, to empower them to solve their most critical water challenges and deliver great outcomes with far less complexity.

我們匯集了該領域最先進、最全面的產品、解決方案和服務組合。我們面前的價值創造機會是讓客戶更容易獲得所有這些功能，使他們能夠解決最關鍵的水挑戰，並以更低的複雜性交付偉大的成果。

We started the year with great pace with strong execution off the back of a great Q4 in 2023 across both legacy Xylem and legacy Evoqua businesses. And our integration is well on track to deliver on the full value creation opportunity of the combination. Our end markets are resilient, and as long as the long-term trends in water continue to intensify, our team is energized to take all of our capabilities to deliver even greater impact for our customers.

憑藉 2023 年第四季的出色表現，我們在傳統賽萊默和傳統 Evoqua 業務上以強勁的執行力開啟了新的一年。我們的整合進展順利，將充分發揮合併帶來的價值創造機會。我們的終端市場具有彈性，只要水的長期趨勢持續加強，我們的團隊就會充滿活力，並利用我們所有的能力為我們的客戶帶來更大的影響。

Our investment thesis remains robust, and we continue to execute on the strategy that has positioned us so strongly for further economic and social value creation. We look forward to sharing further insights into our priorities and strategic direction at our upcoming Investor Day on May 30 in Washington, D.C., when I hope many of you will join us.

我們的投資理念仍然穩健，我們將繼續執行使我們在進一步創造經濟和社會價值方面處於強有力地位的策略。我們期待在即將於 5 月 30 日在華盛頓特區舉行的投資者日上分享對我們的優先事項和戰略方向的進一步見解，屆時我希望你們中的許多人能夠加入我們。

Now operator, I'll turn the call back over to you for questions.

現在接線員，我會將電話轉回給您詢問問題。

(Operator Instructions) Our first question is 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。

Matthew, as we start the year, I'd love to hear what's top of mind for you on your priorities. I know we're going to get a lot more specifics at the Analyst Day, but I think everyone would love to hear more about what you're thinking of the path and the opportunity for margin improvement broadly. And just some early thoughts on optimizing the portfolio potentially.

馬修，在新的一年開始之際，我很想聽聽您最關心的優先事項是什麼。我知道我們將在分析師日獲得更多細節，但我認為每個人都希望聽到更多關於您對整體利潤改善路徑和機會的看法。以及一些關於潛在優化投資組合的早期想法。

Great. Thanks, Deane. First, I want to just acknowledge the team's Q4 and full year performance during really a transformational year for Xylem. We had the Evoqua combination. We announced that in January. Followed by the Idrica partnership. And then obviously, we had a leadership change, all that while dealing with a lot of macro challenges out there around the globe. So the team has done an incredible job staying focused.

偉大的。謝謝，迪恩。首先，我想對賽萊默團隊第四季和全年的表現表示認可，這對賽萊默來說確實是轉型的一年。我們有 Evoqua 組合。我們在一月份宣布了這一點。其次是 Idrica 合作夥伴關係。顯然，我們領導層發生了變化，同時應對全球各地的許多宏觀挑戰。因此，團隊在保持專注方面做得非常出色。

I'm really humbled and excited to lead Xylem into the next chapter. We built, as I've said before, an incredible platform over the past decade. If you look back 6 or 7 years ago, half the company did not even exist. So a lot of really good momentum there. And from my perspective, we're in a very unique position with our platform leadership of this 10-year journey to have visibility across the water value chain. And this really enables us to provide holistic kind of optimized solutions to our customers.

能夠帶領賽萊默進入下一個篇章，我感到非常謙卑和興奮。正如我之前所說，我們在過去十年中建立了一個令人難以置信的平台。如果你回顧六、七年前，一半的公司甚至不存在。所以那裡有很多非常好的勢頭。從我的角度來看，我們處於非常獨特的地位，我們的平台在這十年的旅程中處於領先地位，可以了解整個水價值鏈。這確實使我們能夠為客戶提供全面的最佳化解決方案。

And moving forward, we're going to continue to build on that platform. As COO last year, I did lead the strategic planning process at Xylem. So we have, I'd say, really strong strategic continuity as we transition this year. And I've talked about 3 strategic execution priorities that we're focused on. Number one, we have to deliver the Evoqua value capture. That's first and foremost. That's the transformational deal that we did last year. Number two, is -- and you hit on it, is we've got to get after margin expansion acceleration, and we're going to do that through productivity and continuing to drive operational excellence through the business. And then lastly, scaling our services business, enabled by digital, which we'll talk probably later in the call about the WSS segment for 2024 and its ability to help us do that.

展望未來，我們將繼續在該平台上進行開發。去年，身為營運官，我確實領導了賽萊默的策略規劃流程。因此，我想說，在今年的轉型過程中，我們擁有非常強大的策略連續性。我已經談到了我們關注的 3 個戰略執行優先事項。第一，我們必須提供 Evoqua 價值捕獲。這是首要的。這就是我們去年所做的轉型交易。第二，你注意到了，我們必須實現利潤率加速擴張，我們將透過提高生產力並繼續透過業務推動卓越營運來實現這一目標。最後，透過數位技術擴展我們的服務業務，我們稍後可能會在電話會議中討論 2024 年的 WSS 細分市場及其幫助我們實現這一目標的能力。

One thing I'd mention that we don't talk a lot, it's kind of the soft side and that's on culture. As we bring 2 large companies together, culture is really important, and we put a lot of focus in that area. We call it high-impact culture. And there's behaviors to drive alignment around our culture and those behaviors are, first of all, to have our people be inspired to innovate. We don't want people to fill a fear of failure. We want them to innovate and that's going to drive the next cash flows and top line growth in the company. The second is we want them to be empowered to lead and empowered in the business. And then thirdly and most importantly, we want them to be accountable to deliver.

我要提到的一件事是，我們談得不多，這是一種軟性的一面，那就是文化。當我們將兩家大公司合併在一起時，文化非常重要，我們在該領域投入了大量精力。我們稱之為高影響力文化。有一些行為可以推動我們文化的一致性，而這些行為首先是為了激勵我們的員工進行創新。我們不希望人們充滿對失敗的恐懼。我們希望他們進行創新，這將推動公司接下來的現金流和營收成長。第二是我們希望他們能夠在業務中發揮領導作用並獲得授權。第三，也是最重要的一點，我們希望他們有責任交付。

And so those are things we're really pushing the organization on to get alignment around that will, I think, help us going forward. Maybe the last comment I would make is we have a call to action in the company that we've been working on over the past few months, and that's -- we want to simplify water. And what that means is really bridging our aspiration, which is let's solve water, which everybody knows our tagline to our strategic execution priorities, which is really -- the what we're going to focus on. So that's really the rallying cry in the organization, and that's where we're going to be focused in 2024.

因此，我們確實在推動組織圍繞這些事情達成一致，我認為這將有助於我們前進。也許我要說的最後一句話是，我們在過去幾個月一直在公司內呼籲採取行動，那就是——我們希望簡化水處理。這意味著真正彌合了我們的願望，即讓我們解決水問題，每個人都知道我們的口號與我們的策略執行優先事項，這確實是我們要關注的重點。因此，這確實是該組織的戰鬥口號，也是我們 2024 年的重點工作。

I appreciate all that color. And just as a follow-up for Bill, I would love to get an update on the rollout of 80/20 besides the check the box, a successful recast of the slides, which I really like. And then could you also lead in on the update on the revenue synergy plans on Evoqua specifically? I know there's a plan to roll out existing North America customers who have asked to have similar facilities outsourcing in Europe. So an update there, please.

我很欣賞所有這些顏色。作為比爾的後續行動，我很想了解 80/20 推出的最新情況，除了複選框之外，幻燈片的成功重鑄，我真的很喜歡。那麼能否具體介紹一下 Evoqua 收入協同計畫的最新情況？我知道有計劃推出現有的北美客戶，這些客戶要求在歐洲進行類似的設施外包。請更新一下。

Sure. So maybe I'll start with the first part of the question. And first off, 80/20 is a multiyear journey. As it gets weaved into the fabric of the culture. Matthew just highlighted, we are on a cultural evolution and incorporate some new tools and behaviors into the organization. And you have to remember, 80/20 is kind of about systematic complexity reduction. And that takes time. It's not just a quick math exercise and you're done. It's really about focused resource allocation methodology, aligning the teams around the things that matter most in the business.

當然。所以也許我會從問題的第一部分開始。首先，80/20 是一個多年的旅程。當它融入文化結構時。馬修剛剛強調，我們正在經歷一場文化變革，並將一些新的工具和行為融入組織中。你必須記住，80/20 是一種降低系統複雜性的方法。這需要時間。這不僅僅是一個快速的數學練習，你就完成了。這實際上是關於集中資源分配方法，使團隊圍繞業務中最重要的事情進行協調。

Obviously, there's a tremendous margin opportunity that comes with the tool set, but longer term, it's really a tool to drive better organic growth performance by overserving your best customers and innovating around your best ideas. We've kicked off 2 pilots late in Q4 within Applied Water North America and North American Metrology within M&CS. It takes some time to do the analytics. And I look to see some benefits starting to evolve within 6 to 12 months. Obviously, as we get to Investor Day, we'll be able to put some more specific numbers around that. But I really think it's going to be a transformational tool for the organization as we roll it out and be a big part of our longer-term margin improvement story.

顯然，該工具集帶來了巨大的利潤機會，但從長遠來看，它確實是一個透過過度服務您最好的客戶並圍繞您最好的想法進行創新來推動更好的有機成長績效的工具。我們在第四季末在 Applied Water North America 和 M&CS 的 North American Metrology 內啟動了 2 個試點計畫。進行分析需要一些時間。我希望看到一些好處在 6 到 12 個月內開始出現。顯然，當我們到了投資者日時，我們將能夠提供一些更具體的數字。但我確實認為，隨著我們推出它，它將成為組織的轉型工具，並成為我們長期利潤改善故事的重要組成部分。

Yes. Maybe a little bit of color on revenue synergies, Deane. I was proud of the team in Q4. We completed the APT integration to water infrastructure, which was a big deal. We've appointed regional synergy leads for the revenue capture around the globe, and incentives are in place to drive that execution. And one thing we've been really focused on is training our sales teams as well as our service teams. And as you know, in December, we announced the creation of the WSS segment for 2024. And a few comments there.

是的。迪恩，也許對收入綜效有一點色彩。我為第四季的團隊感到自豪。我們完成了 APT 與水利基礎設施的集成，這是一件大事。我們已經任命了區域協同負責人來負責全球範圍內的收入獲取，並製定了激勵措施來推動這項執行。我們真正關注的一件事是培訓我們的銷售團隊和服務團隊。如您所知，12 月，我們宣佈在 2024 年創建 WSS 細分市場。並發表了一些評論。

Number one, we feel it's going to accelerate our synergies, both on the cost side as well as the revenue side, which is where we're focused the most. One thing that maybe is not as intuitive, I do think it's going to help us with technician utilization so we can leverage our technicians across the broader portfolio and also provide better career pathing for them long term, as well as leveraging technology. And then the big thing it does for us, it really helps us leverage and enable the international expansion of WSS going forward in '24, like I said, internationally. And then the most important thing, it makes it easier for our customers because at the end of the day, it's about customer focus. And our customers instead of picking up the phone to pick -- make 4 phone calls, they can make 1 to Xylem to solve their biggest problems.

第一，我們認為這將加速我們在成本方面和收入方面的協同效應，這是我們最關注的領域。有一件事可能不那麼直觀，我確實認為這將有助於我們提高技術人員的利用率，這樣我們就可以在更廣泛的投資組合中利用我們的技術人員，並為他們提供更好的長期職業道路以及利用科技。然後它為我們做的一件大事是，它確實幫助我們利用並實現了 WSS 在 24 年的國際擴張，正如我所說的，在國際上。最重要的是，它讓我們的客戶變得更容易，因為歸根結底，這是以客戶為中心的。我們的客戶無需拿起電話接聽——打 4 通電話，而是可以打 1 通電話到賽萊默來解決他們最大的問題。

The next question is from Mike Halloran with Baird.

下一個問題是 Mike Halloran 和 Baird 提出的。

A couple of questions to you. First, you commented on confidence in the end markets and sustainability of existing trends. Maybe talk a little bit about utility and industrial markets. What the customers are saying at this point, willingness to put capital forward for CapEx-related projects. Any signs of softness, acceleration? How are you thinking about this on that side?

有幾個問題問你。首先，您評論了對終端市場的信心和現有趨勢的可持續性。也許可以談談公用事業和工業市場。客戶此時所說的是願意為資本支出相關項目提供資金。有任何柔軟、加速的跡象嗎？您那邊怎麼看待這個問題？

Yes, I could start this out. I mean from -- on the CapEx front, we've seen continued momentum there. For us, the proxy is our treatment business. Orders were very strong, both in Q4 and the full year, up double digits. And so that's -- that gives us a lot of confidence. And that number is not only just in the U.S., that's a global number. So every region is performing very well in treatment.

是的，我可以開始這個。我的意思是，在資本支出方面，我們看到了持續的動力。對我們來說，代理商就是我們的治療業務。第四季和全年的訂單都非常強勁，成長了兩位數。這給了我們很大的信心。這個數字不僅存在於美國，也是一個全球數字。所以每個地區在治療方面都表現得很好。

So from a CapEx perspective, we haven't seen any pullback or any concern there. And obviously, a big part of our focus in our portfolio in utilities is focused on the OpEx side, and that's about 75% of the revenue, and that remains pretty strong. And it's also -- we've talked about buoyed, especially the long term. It's not going to be this year or even in the next year, but over the next 5 to 7 years, it's buoyed by regulation globally. Whether that's in the U.S. with the infrastructure bill, which includes PFAS funding or if you get into Europe with the Recovery and Resilience Act and then the AMP cycle in the U.K. That gives us a lot of confidence that we'll continue to see those markets do well.

因此，從資本支出的角度來看，我們沒有看到任何回調或任何擔憂。顯然，我們公用事業投資組合的很大一部分集中在營運支出方面，約佔收入的 75%，而且仍然相當強勁。我們也談到了提振，尤其是長期來看。這不會是今年，甚至不會是明年，但在未來 5 到 7 年裡，它將受到全球監管的推動。無論是在美國通過基礎設施法案（其中包括 PFAS 資金），還是在歐洲通過《復甦與彈性法案》以及英國的 AMP 週期，這都讓我們充滿信心，我們將繼續看到這些市場做得很好。

I'd say industrially, it's a little bit of a mixed bag on the new segment, WSS, which is a legacy ISS business, which contains assessment services and dewatering now. We're seeing strong momentum there, especially in power, life sciences, microelectronics. We're seeing a lot of bid activity there and we feel good about that. We've seen a little bit of lumpiness in the applied water end markets, especially resi. Some of that is just due to coming out of the pandemic where people were investing their discretionary income and upgrading their houses. And also weather has played some of a role in that is a lot of our resi products are applied into ag applications. And so we've seen some lumpiness there in the U.S. and a little bit in Western Europe. So that's a little bit of the view of the landscape.

我想說的是，在工業上，WSS這個新領域有點魚龍混雜，WSS是一個傳統的ISS業務，現在包含評估服務和脫水。我們看到那裡的強勁勢頭，特別是在電力、生命科學、微電子領域。我們看到那裡有很多投標活動，我們對此感覺很好。我們看到應用水端市場有些不穩定，尤其是樹脂市場。其中部分原因是疫情結束後，人們開始投資可支配收入並升級房屋。天氣也發揮了一定的作用，我們的許多 Resi 產品都應用於農業應用。因此，我們在美國看到了一些不穩定，在西歐也有一些不穩定。這就是風景的一點點。

Appreciate that. Second question, just on the pricing side of things, I guess, twofold. One, how are you thinking about pricing for '24? And as you think about the multiyear journey here as you're rolling out 80/20 and all the other tool kits you're going to be implementing, what is the opportunity for pricing as you think about the broader portfolio?

感謝。第二個問題，就定價方面而言，我想是雙重的。第一，您如何考慮 '24 的定價？當您考慮這裡的多年旅程時，您正在推出 80/20 以及您將要實施的所有其他工具包，當您考慮更廣泛的投資組合時，定價的機會是什麼？

Yes. Mike, maybe I'll take that one. So price expectations for next year are going to ramp down versus the capture that we experienced in 2023 will be a little over 1 point. That's still significantly higher than pre-pandemic pricing. But it is an opportunity as we look forward. As we calibrate and hone in the skills to continue to capture the value for our products across the portfolio. Obviously, that 1 point plus varies across the different segments. With M&CS and WSS going forward, probably stronger price capture opportunities. And then 80/20, I think will be up as we roll out opportunities within AWS as they've done some additional analytics and we look for just better pricing methodology and capture on some of the longer tail customers that we have.

是的。麥克，也許我會買那個。因此，與 2023 年的價格預期相比，明年的價格預期將下降略多於 1 個百分點。這仍然明顯高於大流行前的定價。但這是我們期待的一個機會。隨著我們校準和磨練技能，以繼續在整個產品組合中獲得產品的價值。顯然，不同細分市場的 1 分加分有所不同。隨著 M&CS 和 WSS 的發展，可能會有更強的價格捕獲機會。然後 80/20，我認為隨著我們在 AWS 中推出機會，因為他們做了一些額外的分析，我們會尋找更好的定價方法並捕獲我們擁有的一些長尾客戶。

Obviously, we're leveraging price as one of our components to offset inflation. The team does a really good job driving operational productivity as a second lever to offset inflation. So we're going to manage price and material cost and stay positive. Obviously, that will compress a little bit next year as pricing goes down, but also our expectations relative to inflation will be price material cost positive and then look for productivity to really enhance our margins as we move forward.

顯然，我們正在利用價格作為抵消通貨膨脹的組成部分之一。作為抵消通貨膨脹的第二個槓桿，團隊在提高營運生產力方面做得非常好。因此，我們將管理價格和材料成本並保持積極態度。顯然，隨著價格下降，明年的成本將會壓縮，但我們相對於通膨的預期將是材料成本正值，然後在我們前進的過程中尋找生產力來真正提高我們的利潤率。

The next question is from Scott Davis with Melius Research.

下一個問題來自 Melius Research 的 Scott Davis。

Wanted to -- you made some comments incrementally on China, seemed a little bit more cautious, which is not a surprise just given what we've heard from others. But it looks like your business there has held up okay, at least versus some peers out there, but what -- maybe a little bit more granularity there would be helpful.

你對中國逐步發表了一些評論，似乎更加謹慎，考慮到我們從其他人那裡聽到的情況，這並不奇怪。但看起來你在那裡的業務表現還不錯，至少與其他一些同行相比是這樣，但也許更詳細一點會有幫助。

Yes. Thanks for the question, Scott. China, for us, now with the new combination of the company is about mid-single digit in terms of our revenue. With over 50% of that being water infrastructure from an exposure standpoint, largely tied to public utilities. We've seen pretty decent orders there. Q4 orders were up 11%, full year up 10%. On the revenue side, we were up on the full year about 2%, low single digits. But if you look back on a 2-year stack, we're down mid-single digits in China. So the backlog is building, but we haven't seen that convert to revenue yet. Things continue to slide to the right in terms of funding.

是的。謝謝你的提問，斯科特。對我們來說，現在隨著公司的新合併，中國的收入約為中個位數。從風險敞口的角度來看，其中超過 50% 是水利基礎設施，主要與公用事業相關。我們在那裡看到了相當不錯的訂單。第四季訂單成長 11%，全年成長 10%。在收入方面，我們全年成長了約 2%，較低的個位數。但如果你回顧過去兩年的業績，我們在中國的業績下降了個位數左右。因此，積壓訂單正在增加，但我們還沒有看到它轉化為收入。在資金方面，事情繼續向右滑。

I think if you read the news, you continue to see the government's intervention in the economy there, and that's taking some of the funds away from investing in some of the infrastructure. But we believe that's more of a short-term issue. Across the utilities exposure, we continue to see, again, a healthy pipeline and we'll continue to monitor that funding.

我認為，如果你讀新聞，你會繼續看到政府對那裡經濟的干預，這導致一些資金從投資某些基礎設施上消失。但我們認為這更多的是短期問題。在公用事業領域，我們再次看到健康的管道，我們將繼續監控該資金。

I would say on the industrial side, it's a little bit of a similar demand environment, and that's held up a little bit more resilient, to be honest, over utilities. And the last thing I would say with China, overall, we expect China to be roughly flat in 2024 for the business.

我想說，在工業方面，需求環境有點類似，老實說，它比公用事業更具彈性。我要對中國說的最後一件事是，總體而言，我們預計 2024 年中國業務將大致持平。

Okay. That's super helpful. Your balance sheet is in fantastic shape. And given the way you structure the Evoqua deal, just leads me -- a natural question would be are there -- should we expect kind of some bolt-on acquisitions or anything kind of in '24 that perhaps you could talk about your M&A backlog? And just as much just talk about the pipeline, perhaps talk about your interest in doing deals. That would be helpful.

好的。這非常有幫助。您的資產負債表狀況非常好。考慮到你建立 Evoqua 交易的方式，這讓我想到了一個自然的問題：我們是否應該期待一些補強收購或 24 年的任何事情，也許你可以談論你的併購積壓？就像談論管道一樣，也許可以談談你對交易的興趣。那會有幫助的。

Yes. No, thanks. It's a good question. We closed out 2023, very strong following the close of our largest transformational deal in our history. And so one of the things we're laser focused on is making sure that we integrate the Evoqua well and we get the value capture in the near term. To your point, we do have a strong M&A pipeline. And the structure of the Evoqua deal allows us flexibility with a strong balance sheet.

是的。不，謝謝。這是一個好問題。在完成了我們史上最大的轉型交易後，我們在 2023 年的業績表現非常強勁。因此，我們重點關注的事情之一就是確保我們很好地整合 Evoqua，並在短期內獲得價值。就您而言，我們確實擁有強大的併購管道。 Evoqua 交易的結構為我們提供了靈活性和強大的資產負債表。

The short-term focus, Scott, is going to be to focus on small to medium bolt-ons. Evoqua, we can fairly ring-fence within the business, but there's other parts of the portfolio where we do want to continue to be inquisitive, with again, with small to medium bolt-ons. And we'll continue our disciplined approach, and we're evaluating our longer-term capital allocation framework, and we'll share more about that at Investor Day in May.

斯科特，短期的重點將是集中在中小型附加設備。 Evoqua，我們可以在業務範圍內進行相當的隔離，但我們確實希望在產品組合的其他部分繼續保持好奇心，再次是中小型附加產品。我們將繼續採取嚴格的方法，我們正在評估我們的長期資本配置框架，我們將在五月的投資者日分享更多相關資訊。

The next question is from Andy Kaplowitz with Citigroup.

下一個問題來自花旗集團的安迪·卡普洛維茨。

Matthew, Bill, when you look at the 50 to 100 basis points of margin expansion for '24, could you give us a little more color on how that margin improvement translates by segment. And then you mentioned the 80/20 pilots with a focus on M&CS. You did have nice improvement -- margin improvement in M&CS in Q4. So how do you think about the margin potential in that particular business over the longer term?

馬修、比爾，當您查看 24 年利潤率擴張 50 到 100 個基點時，您能給我們更多關於利潤率改善如何按細分市場轉化的信息嗎？然後您提到了重點關注 M&CS 的 80/20 試點。你們確實取得了不錯的進步——第四季度 M&CS 的利潤率有所提高。那麼，您如何看待該特定業務的長期利潤潛力？

Yes. I mean relative to the largest impact on margin expansion for next year, I think M&CS leads the pack. Obviously, we've started our journey on margin improvement and recovery as they've gone through chip supply shortages, which I think, for the most part, has resolved. They've added capacity within the production facility to meet kind of the record backlog levels that they've had. They've gone out with incremental pricing to improve the quality of the margin within the backlog. And I think the value of their products and solutions are able to continue to drive incremental price as we go into next year.

是的。我的意思是，相對於明年利潤擴張的最大影響，我認為 M&CS 處於領先地位。顯然，我們已經開始了利潤率改善和復甦的旅程，因為他們經歷了晶片供應短缺，我認為這在很大程度上已經解決。他們增加了生產設施的產能，以滿足創紀錄的積壓水準。他們採用增量定價來提高積壓訂單中的利潤品質。我認為，隨著我們進入明年，他們的產品和解決方案的價值將繼續推動價格增量。

So I think their ability to exit the year at near historic record levels of EBITDA margin is the target, as they continue to leverage their volume and drive some pretty significant productivity as they look at their labor and material footprint around their products. So we're excited about the progress that they've made and look for them to continue to sequentially improve as we progress through the year in 2024.

因此，我認為他們今年的目標是能夠以接近歷史記錄水平的 EBITDA 利潤率結束，因為他們在考慮產品周圍的勞動力和材料足跡時，繼續利用其銷售並提高相當顯著的生產力。因此，我們對他們所取得的進步感到興奮，並期待他們在 2024 年取得進展時繼續不斷改進。

That's very helpful. And Matt, maybe just a bigger picture question for you. I know you want to guide conservatively for this year. You've been prudent in Applied in China, but you've got such a strong growth business in M&CS, and you're still only guiding 3% to 5%. Xylem's had a longer-term algorithm of 4% to 6%. So as you take over the CEO reins, do you worry at all, that's higher given all the self-help focus, focus on digitization, all these kinds of things that that's still the right number to growth rate?

這非常有幫助。馬特，也許對你來說只是一個更大的問題。我知道你今年想保守指導。你們在中國的應用領域一直很謹慎，但你們在M&CS領域的業務成長如此強勁，而你們仍然只指導3%到5%。 Xylem 的長期演算法為 4% 至 6%。因此，當您接任執行長時，您是否擔心，考慮到所有自助焦點、數位化以及所有這些仍然是正確成長率的事情，這個數字會更高？

Yes. I think, again, a lot of that has not changed from what we've said in the past. It's just, I think, being balanced in our approach and with a watchful eye to China. We've got that flat year-over-year, but there could be some potential headwinds there. And also with Applied Water, which is it's some of that cyclicality and timing as we think about that, Andy. So from a long-term framework, I know that's changed. It's just really more thinking about in the context of 2024 and thinking about going out with a balanced approach.

是的。我再次認為，其中許多內容與我們過去所說的並沒有改變。我認為，這只是我們的做法保持平衡並密切關注中國。我們的情況與去年同期持平，但可能存在一些潛在的阻力。還有應用水，這是我們認為的一些週期性和時機，安迪。因此，從長期框架來看，我知道情況已經改變。只是更多地考慮 2024 年的背景，並考慮以平衡的方式走出去。

We do have a lot of healthy demand across our largest end markets. When you look at the year from a seasonality standpoint, it's normalized. There's no change in terms of the seasonality of our business and how we ramp from Q1 through the balance of the year. I think the thing I'd leave you with, too, is our margin guide reflects low 40s pro forma incrementals. And so we feel really strong about the margin that we're delivering as well on the growth.

我們最大的終端市場確實有很多健康的需求。當你從季節性的角度來看這一年時，它已經標準化了。我們業務的季節性以及我們從第一季到今年剩餘時間的成長方式都沒有改變。我想我還想留給您的是，我們的保證金指南反映了 40 多歲的預計增量。因此，我們對我們所實現的利潤率以及成長感到非常強勁。

The next question is from Nathan Jones with Stifel, please go ahead. Mr. Jones is your line open?

下一個問題是 Nathan Jones 和 Stifel 提出的，請繼續。瓊斯先生，您的電話接通了嗎？

I'm going to follow up on the margin question. I think your Evoqua cost synergies get you something like 80 basis points, and you're obviously going to get some pretty good margin expansion out of the M&CS operating leverage. Which when I do the math gets me well in excess of the 100 basis points top end of your margin expansion target. So can you talk about what could be the offsets there or increased growth investments or anything that's kind of muting some of that margin expansion that I might otherwise expect?

我將跟進保證金問題。我認為你的 Evoqua 成本協同效應會讓你獲得大約 80 個基點，而且你顯然會從 M&CS 營運槓桿中獲得一些相當不錯的利潤擴張。當我進行數學計算時，我遠遠超出了利潤擴張目標的 100 個基點上限。那麼，您能否談談可能存在的抵銷或增加的成長投資或任何抑制我原本預期的利潤擴張的因素？

Yes. I think the biggest piece probably in your high-level math is we continue to invest in the business. Obviously, we've got significant growth opportunities over the long term that we want to make sure that we're allocating resources around -- across all 4 segments. There's exciting things relative to product launches and market expansions that put a little bit of pressure on some of the significant accretion relative to productivity and the synergies that you highlighted.

是的。我認為在你的高級數學中最重要的部分可能是我們繼續投資這項業務。顯然，從長遠來看，我們擁有巨大的成長機會，我們希望確保我們在所有 4 個細分市場上分配資源。與產品發布和市場擴張相關的令人興奮的事情給一些與生產力和您強調的協同效應相關的顯著增長帶來了一些壓力。

And then also, Nathan, there's obviously an evolving macro environment that we want to make sure that we were prudent relative to the guide that we have the ability to account for things that come up. So I think our guide relative to the margin expansion is fairly balanced. I think Matthew just highlighted, at 40% incrementals on a pro forma basis, that's really strong flow-through. So excited about the opportunities the team has laid out here as we look for a really strong year on our margin expansion journey.

另外，內森，顯然宏觀環境不斷變化，我們希望確保我們相對於指南保持謹慎，因為我們有能力解釋出現的情況。因此，我認為我們相對於利潤率擴張的指導是相當平衡的。我認為馬修剛剛強調，按預計增量 40%，這確實是非常強大的流程。我們對團隊在這裡提供的機會感到非常興奮，因為我們希望在利潤擴張之旅中度過一個真正強勁的一年。

And I think longer term, obviously, we're just starting with the 80/20 implementation. That will add some tailwind as we exit the year and into 2025 to try to get us at the higher end of that range longer term.

我認為從長遠來看，顯然我們才剛開始實施 80/20。當我們退出今年並進入 2025 年時，這將增加一些順風，試圖讓我們在長期內保持在該範圍的高端。

Great. And then my follow-up, Bill, I think you just mentioned that the chip supply issue has basically worked itself out. Can you guys comment on where the past due backlog is in M&CS today and when you expect that to get to whatever a normal level of past due backlog is?

偉大的。然後我的後續行動，比爾，我想你剛才提到晶片供應問題基本上已經解決了。你們能否評論一下今天 M&CS 中逾期積壓的情況以及您預計何時會達到逾期積壓的正常水平？

Nate, I'll take it, it's Matthew. Yes, we're making good progress on the past due backlog. If you remember, we started 2023 around 30% past due. We exited at 20%. And we feel that we're going to get to the bulk of the past due backlog in 2024. Some of that may stray into '25 but for the most part, we feel pretty confident that we'll get through the past due backlog in 2024, again, with a little bit of carryover into '25.

內特，我接受，是馬修。是的，我們在逾期積壓方面取得了良好進展。如果您還記得的話，我們從 2023 年開始就逾期了 30% 左右。我們以 20% 的價格退出。我們認為我們將在 2024 年解決大部分逾期積壓。其中一些可能會延遲到 25 年，但在大多數情況下，我們非常有信心 我們將在 2024 年解決逾期積壓。2024 年，再次，有一點延續到25 年。

And so really from a bottleneck standpoint, it really just comes down to our customers' ability to go out and execute the deployments Chip supply is falling. We've made investments over the past few years in our capacity. So there's no capacity limitations from our point of view internally here at Xylem in our 4 walls.

因此，實際上從瓶頸的角度來看，這實際上取決於我們的客戶出去執行部署的能力晶片供應正在下降。過去幾年我們已經盡我們所能進行了投資。因此，從我們的角度來看，賽萊默內部的 4 面牆不存在容量限制。

The next question is from Joe Giordano with TD Cowen.

下一個問題是 Joe Giordano 和 TD Cowen 提出的。

I wanted to touch on Idrica. I guess one of the more like interesting kind of high level, where can we go type stories within water, how to get a real connected utility and I'm just curious how you guys think about this, like how do we judge success? What -- how meaningful could something like this turn into kind of over near to medium term? And just kind of maybe set expectations about where that can go?

我想談談伊德里卡。我想其中一個更有趣的高水平，我們可以去哪裡在水中輸入故事，如何獲得真正的連接實用程序，我只是好奇你們如何看待這個問題，例如我們如何判斷成功？從近中期來看，這樣的事情會變得多麼有意義？也許只是設定了對未來發展的期望？

Yes. I mean, I've been pretty bullish on this. You've heard me talk about being the aggregator of data in the utilities, much like folks are in the building management world or in the residential home. We believe we have the capabilities through this partnership to be able to be the leader in aggregating utility data. We're off to a really good start. We only had about 6 months under our belt last year once we got the combination closed. The teams have made great progress globally, and we built a significant pipeline. And one of the things I've talked about is it's one thing is to get the platform in play at the utility, but it's about building on the applications as well as pulling through our core products. So a little bit of a land and expand is how I would frame it, get the platform in place, help them optimize their water networks with our applications, as well as pulling through our products like AMI or treatment products, et cetera.

是的。我的意思是，我一直都非常看好這一點。您聽過我談論過公用事業中的資料聚合器，就像建築管理領域或住宅中的人一樣。我們相信，透過這種合作關係，我們有能力成為聚合公用事業數據的領導者。我們有了一個非常好的開始。去年我們完成合併後，我們只花了大約 6 個月的時間。這些團隊在全球範圍內取得了巨大進展，我們建立了重要的管道。我談到的一件事是，讓平台在公用事業中發揮作用是一回事，但更重要的是在應用程式的基礎上建立以及推動我們的核心產品。因此，我將如何建立它，將平台安裝到位，幫助他們利用我們的應用程式優化他們的供水網絡，以及使用我們的產品（如 AMI 或處理產品等）。

So we've had some significant wins. Some of those I've highlighted on prior calls, we continue to have wins and build momentum. Like I said, and it's not a specific region, it's across the world, whether that's in the U.K., Italy, we just won a big deal in the Middle East, which is for a new city with fully digitizing their water management system with this platform. And I've talked in the past about some of the deals in Spain and the U.S.. We've done in terms of putting the platform in and being able to sell AMI deals as well as treatment products. So I think it can be a big opportunity for us. Obviously, we'll give you a lot more color as we get closer to May 30 at our Investor Day, but we're really bullish on the partnership.

所以我們取得了一些重大勝利。我在之前的電話會議中強調了其中一些內容，我們繼續取得勝利並建立勢頭。就像我說的，這不是一個特定的地區，而是在世界各地，無論是在英國、義大利，我們剛剛在中東贏得了一項大交易，這是一個新城市，其水管理系統完全數位化平台。我過去談到過西班牙和美國的一些交易。我們已經建立了平台並能夠銷售 AMI 交易以及治療產品。所以我認為這對我們來說可能是一個很大的機會。顯然，隨著 5 月 30 日投資者日的臨近，我們將為您提供更多信息，但我們非常看好此次合作。

That's great color. And then I just -- and apologies if you mentioned some of this on the prepared remarks, I had to join late. But on Evoqua like revenue side synergies. I know like selling an ISS solution outside the U.S. is going to take a long time to build out. But I'm curious if there's anything you can point to about like leveraging existing channels that you have in like Europe to put product through, which I would imagine would be a lower lift than to try to do a solution base sell.

那顏色真棒。然後我只是——如果你在準備好的發言中提到了其中的一些內容，我深表歉意，我不得不遲到。但在 Evoqua 上，收入方面具有綜效。我知道在美國境外銷售國際太空站解決方案需要很長時間才能建立。但我很好奇您是否可以指出任何事情，例如利用歐洲等現有管道來銷售產品，我認為這比嘗試進行解決方案基礎銷售的提升要低。

Yes. That's kind of a shorter to medium-term objective, and we've already had some wins. We just had one in South Africa actually where we took the capital from the legacy Evoqua business through the legacy Xylem business in South Africa. So we were able to execute and deploy that capital into an industrial application, without really having to have service folks on the ground and infrastructure. So those are things that we're focused on kind of in the short to medium term is leveraging the product side and really the capital side of the legacy Evoqua business through the Xylem channels both in the U.S. as well as internationally. So we are starting to see progress there.

是的。這是一個中短期目標，我們已經取得了一些勝利。事實上，我們剛剛在南非成立了一家公司，我們透過南非的傳統 Xylem 業務從傳統的 Evoqua 業務中獲得了資本。因此，我們能夠執行該資本並將其部署到工業應用程式中，而無需真正在現場和基礎設施上部署服務人員。因此，我們在中短期內關注的重點是透過賽萊默在美國和國際上的管道利用產品方面以及傳統 Evoqua 業務的資本方面。所以我們開始看到這方面的進展。

This concludes our question-and-answer session. I would like to turn the conference back over to Matthew Pine for any closing remarks.

我們的問答環節到此結束。我想將會議轉回給馬修·派恩（Matthew Pine）發表閉幕詞。

Yes. I just want to thank everybody for joining our call today and for your interest in Xylem. We look forward to speaking again in early May, followed by our Investor Day on May 30, where we're going to provide more details on our long-term outlook. Take care and make it a great day.

是的。我只想感謝大家今天加入我們的電話會議以及對賽萊默的興趣。我們期待在 5 月初再次發表講話，隨後是 5 月 30 日的投資者日，屆時我們將提供有關我們長期前景的更多詳細資訊。保重，讓這一天過得愉快。

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

會議現已結束。感謝您參加今天的演講。您現在可以斷開連線。