XYL: Postcards from NYC: Takeaways from CFO Mtgs

研报英文原文证据摘录

XYL: Postcards from NYC: Takeaways from CFO Mtgs

eters and not bidding on installation work).

Management stressed that walk-away revenue improves earnings quality, simplifies

operations, and frees organizational capacity to support differentiated customer engagement

and faster innovation over the long term. As for where Xylem is in its transformation, the

company estimates it is approximately two years into what management characterizes as a

five-year adoption of the 80/20 toolkit.

Management described walk-away revenue as a combination of exiting both customers and

products. The analogy offered was that the company historically offered "a glass in 10 different

sizes, 50 colors, with a handle on the left or right," and is now selling five options. Lower-tier

customers receive a last chance to purchase at scale or on defined ordering windows before

the relationship is exited. Incentive schemes have been put in place to redirect sales effort

toward the A-customers. Management emphasized that the profitability improvement comes

not just from the revenue removal itself, but from eliminating the overhead required to

support the complexity of those products and customers.

M&CS Growth Trajectory and Smart Metering Demand

M&CS remains Xylem's highest-visibility growth segment, with management reaffirming a

HSD% long-term growth framework despite near-term variability driven by sector-wide

lumpy project timing. North American AMI adoption remains below 50%, providing

substantial runway for new deployments. Several large water meter project orders pushed

from 4Q25 into 1H26, driving +15% order growth in 1Q26. Management indicated it still needs

two additional project bookings in the first half to support its back-half revenue ramp, and