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  "documentTitle": "Xylem Inc. (XYL)",
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  "authorName": "Spruce Point Capital Management",
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  "presentationDate": "2023-08-09 00:00:00",
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  "notes": "Uses a 'red arrow' visual to highlight the contradiction between the company's growth claims and the actual margin performance.",
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      "text": "According to a former high level Xylem executive we interviewed, digital sales are dilutive to margins. Yet, Xylem’s CFO suggested recently that a higher digital mix would bring higher margins.",
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      "text": "Backlog ($B) 2016-2021",
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      "text": "Adj. EBITDA Margin: 16.3%",
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      "text": "According to a former high level Xylem executive we interviewed, digital sales are dilutive to margins. Yet, Xylem's CFO suggested recently that a higher digital mix would bring higher margins.",
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      "kind": "quote",
      "text": "CFO Rowland: \"We're also excited as we continue to lean in and drive a conversion of our revenue portfolio towards digital, that roughly 50% of this backlog is higher-margin digital business.\" — Investor Day Sept 2021; CFO Rowland: \"And then, of course, our backlog has a higher digital mix. And so that will naturally bring with it some higher margins.\" — Q3'22 Earnings Nov 2022",
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      "text": "Source: Xylem Financial Results",
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      "text": "Source: 2021 Investor Day Presentation, Spruce Point Red Emphasis",
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      "text": "Xylem Consolidated Margins 2021-Q1 2023",
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