William Grogan
Senior Vice President, Chief Financial Officer at Xylem
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 were 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 one for the quarter and greater than one for the full year. Total revenues grew 41%, while organic revenues rose 9%, exceeding our guidance of 4% to 5%. Outperformance was led by M&CS and Water Infrastructure. All regions grew led by double-digit growth in the US.
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 impacts of Evoqua, EPS was $1.10, up 10% over prior year. 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.
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.
And now onto 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 one, a reflection of the strong demand for our AMI solutions and other digital offerings. MCS [Phonetic] revenue is 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.
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.
In Applied Water, although orders grew book-to-bill was 0.9 times, as we continue to work down our backlog and we saw softer demand environment in the US, our largest geography. Revenues were flat in-line with our guide with a decline in developed markets 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.
Integrated Solutions and Services, orders grew 5% on a pro forma basis and book-to-bill was one, 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.
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 will update as needed in our Q1 earnings call.
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.
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.
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.
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 basis points 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.
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.
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 shorter 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.
With that, please turn to Slide 9, and I'll turn the call back over to Matthew for closing comments.
