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36 States Could Face Water Shortages This Year

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    Xylem CEO and president Gretchen McClain on the water crisis facing Americans.

  • Duration 4:24
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CEO president Gretchen McClain is I want is a water technology companies that.

Is pretty much global right in here in many different countries correct and we -- river 150 countries.

And what exactly do you do for them.

Where -- really a world global water applications experts who would bring equipment whether it's transporting water treating water.

We're testing water with -- whole cycle water.

You do not have to sell me on water shortages I'm from California LA even worse because of northern California that -- don't touch our -- down in Los Angeles but.

We know -- issues 36.

Different states are going to have drought conditions and water shortages.

And yet.

It's a tough business because you're dealing with municipalities are dealing with states are dealing with infrastructure that is usually paid for by federal or state funds.

-- which there's not a lot these states having battle.

Well a couple of things within an industry for over a hundred years many many of our brand 150 years well -- -- -- a wonderful installed base both in the US and Europe.

And those products after they come to -- -- of their life cycle.

Get replaced with the loyalty of the brands that they are well known.

And you and I are paying more more each year for a lot of cash so there is a demand ultimately repair the infrastructure which cast.

And then think about emerging markets.

Emerging markets today don't have the infrastructure you have today growing economies if they want -- growing economies in the future they have to have safe water.

For the businesses as well as the health for the people will.

-- that Europe is an emerging market but you've got business in Europe and that really hurt some of your earnings last year in a pretty much sluggish throughout the whole year.

And now you are coming out with 2013 estimates the first half doesn't look that great.

What's going on.

Well again you have an economy that has been challenged and do we solve second half -- last year slowdown not what we thought an anticipated.

And so orders are obviously impacting the first part of this next year coming in 2013.

But I still look at the fundamental demands on water.

They need to be addressed our aftermarket.

Position allows us to going in an August giving an example we'll go into public utility will help them do an audit.

We can actually help them reduce their energy efficiency and bring their cost of ownership down so they actually -- can go do more expansion and capital deployment.

So if you look at the operational part of it.

The aftermarket is is very profitable it's expanding and any emerging markets as well it is a challenge market right now.

The other area say is industrial we're moving much more industrial and if you think about water as a critical issue.

Macy's weeks have sustainability.

Leaders that are always thinking about how to they make sure they have the water the reason -- water for the products for their.

Did the products are producing for what they -- should be having those folks this is this is something that's going to run out of business looking at the breakdown here close to 45% of your business.

Your sales come to from public utility business.

You know -- during the State of the Union Address the president talked about infrastructure and its.

It's -- our health but more importantly he -- a growing economy you absolutely have to have a robust water and wastewater system.

And that's critically important all of us need to be -- recognizing that just plastered in the last we had -- enormous amount of drought we've got aged infrastructure it needs for your parents your.

Right were all right.

How do we know that I'm gonna see your company get the business now your stock is up about 10% over the past year you do have a little bit -- the dividend here one point 7% -- PE is thirteen but.

If if somebody's watching -- should not put aside -- -- my portfolio what's the big selling point.

It's energy efficiency it's working with our customers that we currently have existing positions at work helping them run their business more efficiently we've got good technology our new product launches.

Are actually making a difference significant growth we saw last year and like it's an emerging markets.

It's a huge opportunity take our experience and our expertise.

And continue to grow in that area.

Everybody just conserve water please.

But that's like Europe conserve water could serve Gretchen thank you very much thank we'll be watching the company ticker symbol XYL Gretchen McClain is the CEO and president of asylum.

Nine years at NASA.

It's not very bright at all not at all thank you very thank you very much and closing bell ringing and sixteen minutes so a couple of weeks ago remember this.

We gave JC -- some advice about what it could -- to ramp up sales.

What target meaning hook up with some hot -- --

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