| Key Figures (US$ million) | ||
|---|---|---|
| First quarter ended 31.3 | ||
| 2020 | 2019 | |
| Order Intake | 1261 | 1315 |
| Of Which: | ||
| Water Infrastructure | 514 | 532 |
| Applied Water | 372 | 394 |
| Revenue | 1123 | 1237 |
| Of Which: | ||
| Water Infrastructure | 438 | 482 |
| Applied Water | 338 | 379 |
| Cost of Revenue | 714 | 763 |
| Gross Profit | 409 | 474 |
| Selling, General & Admin Expenses | 297 | 303 |
| R&D Expenses | 49 | 51 |
| Operating Income | 61 | 109 |
| Of Which: | ||
| Water Infrastructure | 39 | 51 |
| Applied Water | 47 | 56 |
| Income before Taxes | 42 | 94 |
| Net Income | 38 | 79 |
Source: Xylem Q1 2020 results.
COMMENT.
Xylem had a difficult first quarter of fiscal 2020 with orders, revenues and profitability all falling as the Covid-19 pandemic began to impact its operations.
Revenue was US$1.1 billion, down 9.2% on a reported basis and 8% organically, with the impact of Covid-19 estimated at approximately five percentage points. Orders were down 4.1% on a reported basis (2% organically).
Xylem's operating income for the period was down 44.0% on the fiscal 2019 equivalent at US$61 million, while net income fell 51.9% to US$38 million.
In the company's Water Infrastructure segment sales were down 9.1% on the prior year at US$438 million with a double-digit organic decline in industrial markets due to Covid. The segment's operating income fell 23.5% to US$39 million reflecting US$5 million in restructuring and realignment costs, as well as a less favourable mix and reduced sales volumes.
The Applied Water division recorded a 10.8% drop in revenues to US$338 million with market softness resulting in falls in all its major geographic regions. Its operating income was down 16.1% to US$47 million with declines from lower volumes and inflation partially offset by better productivity.
Patrick Decker, Xylem's president and CEO, said the company was re-shaping its cost profile and re-focusing its investments on capabilities to maximize its resilience.
“These actions will enhance our competitiveness, and further differentiate our portfolio of products and solutions, positioning Xylem to out-perform over the medium and long term,” he said.