Slide 1: TE Connectivity Second Quarter 2022 Earnings
EVERY CONNECTION COUNTS TE Connectivity Second Quarter 2022 Earnings April 27, 2022
Slide 2: Forward-Looking Statements and Non-GAAP Financial Measures
Forward - Looking Statements and Non - GAAP Financial Measures 2 Forward - Looking Statements This presentation contains certain "forward - looking statements" within the meaning of the U.S. Private Securities Litigation Ref orm Act of 1995. These statements are based on management's current expecta
Slide 3: Earnings Highlights
Earnings Highlights Record Sales & Adjusted EPS driven by strong operational performance • Demonstrating strategic positioning of our portfolio - Sales of $4.0B, up 7% reported and 8% organically Y/Y • Transportation up 5% organically Y/Y, primarily driven by Auto • Industrial up 11% organically Y/Y
Slide 4: Segment Orders Summary
Reported FY21 FY22 FY22 Q2 Growth Q2 Q1 Q2 Y/Y Q/Q Transportation 2,766 2,158 2,549 (8)% 18% Industrial 1,126 1,402 1,309 16% (7)% Communications 678 769 664 (2)% (14)% Total TE 4,570 4,329 4,522 (1)% 4% Book to Bill 1.22 1.13 1.13 Segment Orders Summary ($ in millions) 4 • Strong book to bill in ea
Slide 5: Transportation Solutions
Transportation Solutions $2,287 $2,314 Q2 2021 Q2 2022 • Automotive growth despite production declines. Continue to benefit from content outperformance through our global leadership position in electric vehicles • Commercial Transportation growth driven by North America and Europe, with significant
Slide 6: Industrial Solutions
Industrial Solutions $952 $1,075 Q2 2021 Q2 2022 Y/Y Growth Rates Reported Organic Industrial Equipment $472 39% 27% Aerospace , Defense and Marine 261 (2)% 0% Energy 184 (1)% 5% Medical 158 (2)% (1)% Industrial Solutions $1,075 13% 11% Margin expansion driven by higher volume and strong operational
Slide 7: Communications Solutions
$499 $618 Q2 2021 Q2 2022 Reported Up 24% Organic Up 23% Y/Y Growth Rates Reported Organic Data & Devices $385 39% 35% Appliances 233 5% 7% Communications Solutions $618 24% 23% • D ata & Devices outperformance driven by content growth in high - speed cloud and share gains in artificial intelligence
Slide 8: Q2 Financial Summary
Q2 Financial Summary ($ in Millions, except per share amounts) Q2 FY21 Q2 FY22 Net Sales $ 3,738 $ 4,007 Operating Income $ 612 $ 705 Operating Margin 16.4% 17.6% Acquisition - Related Charges 8 10 Restructuring & Other Charges, Net 17 21 Adjusted Operating Income $ 637 $ 736 Adjusted Operating Marg
Slide 9: Q2 Financial Performance
Q2 Financial Performance $3,738 $3,818 $4,007 Q2 2021 Q1 2022 Q2 2022 $1.57 $1.76 $1.81 Q2 2021 Q1 2022 Q2 2022 Adjusted EBITDA Margin 22.2% 23.8% 23.2% 17.0% 18.6% 18.4% Q2 2021 Q1 2022 Q2 2022 Adjusted Operating Margin, Adjusted EPS, Adjusted EBITDA Margin and Free Cash Flow are non - GAAP financi
Slide 10: Additional Information
EVERY CONNECTION COUNTS Additional Information
Slide 11: Q2 2022 Sales and Adjusted EPS bridge
Y/Y Q2 2022 FX includes $6M unfavorable currency impact to sales from acquisitions Adjusted EPS is a non - GAAP financial measure; See Appendix for description and reconciliation. Sales (in millions) Adjusted EPS Q2 2021 Results $3,738 $1.57 Operational Performance 385 0.28 FX Impact (116) (0.01) Ta
Slide 12: Q3 2022 Guidance bridge
Y/Y Q3 2022 Adjusted EPS is a non - GAAP financial measure; See Appendix for description and reconciliation. Sales (in millions) Adjusted EPS Q3 2021 Results $3,845 $1.79 Operational Performance 209 0.02 FX Impact (154) (0.02) Tax Rate Impact - (0.04) Q3 2022 Guidance $3,900 $1.75 12
Slide 13: Q2 Balance Sheet & Cash Flow Summary
($ in Millions) Q2 2021 Q2 2022 Beginning Cash Balance $1,098 $982 Free Cash Flow 477 242 Dividends (159) (163) Share repurchases (140) (404) Net increase in debt 411 106 Other 61 (14) Ending Cash Balance $1,748 $749 Total Debt $4,521 $4,051 A/R $2,921 $3,068 Days Sales Outstanding* 70 69 Inventory
Slide 14: Appendix
EVERY CONNECTION COUNTS Appendix
Slide 15: Description of non-GAAP financial measures
15 Non - GAAP Financial Measures We present non - GAAP performance and liquidity measures as we believe it is appropriate for investors to consider adjusted financ ial measures in addition to results in accordance with accounting principles generally accepted in the U.S. (“GAAP”). These non - GAAP f
Slide 16: Non-GAAP measure definitions
16 • Adjusted EBITDA and Adjusted EBITDA Margin - represent net income and net income as a percentage of net sales, respectively, (th e most comparable GAAP financial measures) before interest expense, interest income, income taxes, depreciation, and amortization, as adjusted for net other i nco me
Slide 17: Segment Summary
Segment Summary 17 Transportation Solutions $ 2,314 $ 2,287 $ 4,472 $ 4,511 Industrial Solutions 1,075 952 2,134 1,825 Communications Solutions 618 499 1,219 924 Total $ 4,007 $ 3,738 $ 7,825 $ 7,260 Transportation Solutions $ 409 17.7 % $ 398 17.4 % $ 804 18.0 % $ 706 15.7 % Industrial Solutions 14
Slide 18: Net Sales Growth
Reconciliation of Net Sales Growth 18 Transportation Solutions (3) : Automotive $ 23 1.4 % $ 80 4.9 % $ (57) $ — Commercial transportation 12 3.1 21 5.4 (9) — Sensors (8) (2.9) — — (8) — Total 27 1.2 101 4.5 (74) — Industrial Solutions (3) : Industrial equipment 133 39.2 93 27.2 (13) 53 Aerospace, d
Slide 19: Reconciliation for Quarter Ended March 25, 2022
Reconciliation of Non - GAAP Financial Measures to GAAP Financial Measures for the Quarter Ended March 25, 2022 19 Operating income: Transportation Solutions $ 409 4 9 — $ 422 Industrial Solutions 148 6 10 — 164 Communications Solutions 148 — 2 — 150 Total $ 705 $ 10 $ 21 $ — $ 736 Operating margin
Slide 20: Reconciliation for Quarter Ended March 26, 2021
Reconciliation of Non - GAAP Financial Measures to GAAP Financial Measures for the Quarter Ended March 26, 2021 20 Operating income: Transportation Solutions $ 398 $ 5 $ 10 $ 413 Industrial Solutions 111 3 5 119 Communications Solutions 103 — 2 105 Total $ 612 $ 8 $ 17 $ 637 Operating margin 16.4 %
Slide 21: Reconciliation for Quarter Ended December 24, 2021
Reconciliation of Non - GAAP Financial Measures to GAAP Financial Measures for the Quarter Ended December 24, 2021 21 Operating income: Transportation Solutions $ 395 3 (6) — $ 392 Industrial Solutions 123 12 22 — 157 Communications Solutions 154 1 8 — 163 Total $ 672 $ 16 $ 24 $ — $ 712 Operating m
Slide 22: Reconciliation for Six Months Ended March 25, 2022
Reconciliation of Non - GAAP Financial Measures to GAAP Financial Measures for the Six Months Ended March 25, 2022 22 Operating income: Transportation Solutions $ 804 7 3 — $ 814 Industrial Solutions 271 18 32 — 321 Communications Solutions 302 1 10 — 313 Total $ 1,377 $ 26 $ 45 $ — $ 1,448 Operatin
Slide 23: Reconciliation for Six Months Ended March 26, 2021
Reconciliation of Non - GAAP Financial Measures to GAAP Financial Measures for the Six Months Ended March 26, 2021 23 Operating income: Transportation Solutions $ 706 $ 10 $ 128 $ — $ 844 Industrial Solutions 187 7 43 — 237 Communications Solutions 167 — 13 — 180 Total $ 1,060 $ 17 $ 184 $ — $ 1,261
Slide 24: Reconciliation for Quarter Ended June 2021
Reconciliation of Non - GAAP Financial Measures to GAAP Financial Measures for the Quarter Ended June 25, 2021 24 Operating income: Transportation Solutions $ 433 $ 5 $ 2 $ 440 Industrial Solutions 148 4 6 158 Communications Solutions 133 — 3 136 Total $ 714 $ 9 $ 11 $ 734 Operating margin 18.6 % 19
Slide 25: Reconciliation for Year Ended September 24, 2021
Reconciliation of Non - GAAP Financial Measures to GAAP Financial Measures for the Year Ended September 24, 2021 25 Operating income: Transportation Solutions $ 1,526 $ 18 $ 135 $ — $ — $ 1,679 Industrial Solutions 469 15 73 — — 557 Communications Solutions 439 1 25 — — 465 Total $ 2,434 $ 34 $ 233
Slide 26: Free Cash Flow
Reconciliation of Free Cash Flow 26 Net cash provided by operating activities $ 413 580 $ 945 $ 1,220 Net cash used in investing activities (184) (77) (383) (323) Net cash provided by (used in) financing activities (460) 151 (1,012) (101) Effect of currency translation on cash (2) (4) (4) 7 Net incr
Slide 27: Adjusted EBITDA and Adjusted EBITDA Margin
Reconciliation of Adjusted EBITDA and Adjusted EBITDA Margin 27 Net income $ 560 $ 566 $ 506 (Income) loss from discontinued operations — 1 (1) Income tax expense 136 110 106 Other income, net (5) (15) (4) Interest expense 18 12 13 Interest income (4) (2) (8) Operating income 705 672 612 Acquisition
Slide 28: Forward-Looking GAAP Financial Measures
Reconciliation of Forward - Looking Non - GAAP Financial Measures to Forward - Looking GAAP Financial Measures 28 Diluted earnings per share from continuing operations $ 1.71 Restructuring and other charges, net 0.07 Acquisition-related charges 0.03 Tax items (0.06) Adjusted diluted earnings per sha