Te Connectivity Plc · NYSE:TEL
Te Connectivity — Q1 2014 Earnings Presentation
25 slides from Te Connectivity's earnings presentation, Jan 22, 2014
Slide 1: Q1 2014 Earnings Call
Q1 2014 Earnings Call January 22, 2014
Slide 2: Forward-Looking Statements and Non-GAAP Measures
Forward-Looking Statements and Non-GAAP Measures Forward-Looking Statements -- This presentation contains certain “forward-looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. These statements are based on management’s current expectations and are subj
Slide 3: Summary
Summary • Sales of $3.33 billion; up 7% organically versus prior year • Adjusted EPS of $0.82, a Q1 record and up 26% versus prior year • Adjusted Operating Margin of 14.6%, up 220 basis points versus prior year • Free Cash Flow of $266 million; returned $315 million to shareholders • Book-to-Bill o
Slide 4: Q1 Revenue Summary
Q1 Revenue Summary ($ in Millions) Actual Organic Segment Q1 FY14 Q1 FY13 Growth Growth Transportation Solutions $1,440 $1,264 14% 14% Industrial Solutions 763 720 6% 6% Network Solutions 713 734 (3%) -% Consumer Solutions 410 416 (1%) 1% Total $3,326 $3,134 6% 7% 7 Percent Organic Growth page 4 / J
Slide 5: Transportation Solutions Q1 Summary
Transportation Solutions Q1 Summary ($ in Millions) Growth Rates Actual Organic Sales by Business Growth Rates Sales $1,440 14% 14% Actual Organic Orders $1,468 13% 13% Automotive $1,440 14% 14% Book to Bill 1.02 Transportation Solutions $1,440 14% 14% Adj. Operating Income $297 45% Adj. Operating M
Slide 6: Industrial Solutions Q1 Summary
Industrial Solutions Q1 Summary ($ in Millions) Growth Rates Sales by Business Growth Rates Actual Organic Actual Organic Sales $763 6% 6% Industrial Equipment $322 9% 10% Orders $810 9% 9% Aerospace, Defense, Oil, and Gas 248 4% 4% Book to Bill 1.06 Energy 193 3% 4% Industrial Solutions $763 6% 6%
Slide 7: Network Solutions Q1 Summary
Network Solutions Q1 Summary Growth Rates ($ in Millions) Actual Organic Sales By Business Growth Rates Actual Organic Sales $713 (3)% -% Telecom Networks $313 11% 11% Orders $724 14% 18% Data Communications 164 (18)% (8)% Orders ex SubCom $632 3% 7% Enterprise Networks 151 3% 6% Book to Bill 1.02 S
Slide 8: Consumer Solutions Q1 Summary
Consumer Solutions Q1 Summary ($ in Millions) Growth Rates Sales by Business Growth Rates Actual Organic Actual Organic Sales $410 (1)% 1% Consumer Devices $258 (6)% (3)% Orders $412 (4)% (2)% Appliances 152 8% 8% Book to Bill 1.00 Consumer Solutions $410 (1)% 1% Adj. Operating Income $38 (3)% Adj.
Slide 9: Q1 Financial Summary
Q1 Financial Summary ($ in Millions, except per share amounts) Q1 FY14 Q1 FY13 Net Sales $ 3,326 $ 3,134 Operating Income $ 479 $ 293 Restructuring & Other Charges, net 7 92 Acquisition Related Charges - 5 Adjusted Operating Income $ 486 $ 390 Operating Margin 14.4% 9.3% Adjusted Operating Margin 14
Slide 10: Q1 Operating Results & Other Items
Q1 Operating Results & Other Items Gross Margin Percentage Other Items 35% 34% ($ in Millions) Q1 FY14 Q1 FY13 33% 32% Interest Expense, Net $ (29) $ (33) 31% Adjusted Other Income, Net $ 7 $ 5 30% Q1 F Y13 Q2 F Y13 Q3 F Y13 Q4 F Y13 Q1 F Y14 Income Tax (Expense) Benefit $ (127) $ 245 Seri es1 31. 6
Slide 11: Q1 Balance Sheet and Cash Flow Summary
Q1 Balance Sheet and Cash Flow Summary Free Cash Flow and Working Capital Liquidity, Cash & Debt Liquidity Summary ($ in Millions) Q1 FY14 Q1 FY13 ($ in Millions) Q1 FY14 Q1 FY13 Beginning Cash Balance $ 1,403 $ 1,589 Cash from Continuing Operations $ 387 $ 393 Free Cash Flow 266 304 Capital expendi
Slide 12: Q2 Outlook
Q2 Outlook^ ($ in Millions, except per share amounts) Sales $3,400 to $3,500 Y/Y Growth Actual 4% 7% Organic* 5% 8% Adjusted EPS* $0.88 to $0.92 Y/Y Growth 16% 21% Transportation Solutions Network Solutions Revenue up 10-12% vs. prior year Revenue about flat vs. prior year Global auto production exp
Slide 13: FY14 Outlook
FY14 Outlook^ ($ in Millions, except per share amounts) Sales $13,800 to $14,200 Y/Y Growth Actual 4% 7% Organic* 4% 7% Adjusted EPS* $3.65 to $3.85 Y/Y Growth 13% 19% Transportation Solutions – up ~10% vs. prior year Network Solutions – flat vs. prior year Global auto production expected to be up ~
Slide 14: Q&A
Q&A —=TE page 14 / January 2014 2 connectivity
Slide 15: Appendix
Appendix page 15 / January 2014
Slide 16: Non-GAAP Measures
Non-GAAP Measures “Organic Sales Growth,” “Adjusted Operating Income,” “Adjusted Operating Margin,” “Adjusted Other Income, Net,” “Adjusted Income Tax Expense,” “Adjusted Effective Tax Rate,” ”Adjusted Income from Continuing Operations,” “Adjusted Earnings Per Share,” and “Free Cash Flow” (FCF) are
Slide 17: Non-GAAP Measures (cont.)
Non-GAAP Measures (cont.) We present income from continuing operations attributable to TE Connectivity Ltd. before special items including charges or income related to legal settlements and reserves, restructuring and other charges, acquisition related charges, impairment charges, tax sharing income
Slide 18: Reconciliation of Net Sales Growth– Q1 14 vs. Q1 13
Reconciliation of Net Sales Growth– Q1 14 vs. Q1 13 Percentage of Segment's Total Net Sales for the Change in Net Sales for the Quarter Ended December 27, 2013 Quarter Ended versus Net Sales for the Quarter Ended December 28, 2012 December 27, Organic (1) Translation (2) Divestitures Total 2013 ($ i
Slide 19: Reconciliation of Net Sales Growth by Segment and Geography
Reconciliation of Net Sales Growth by Segment and Geography – Q1 14 vs. Q1 13 Change in Net Sales for the Quarter Ended December 27, 2013 versus Net Sales for the Quarter Ended December 28, 2012 Organic (1) Translation (2) Divestitures Total ($ in millions) Transportation Solutions: EMEA $ 54 10.8 %
Slide 20: Reconciliation of Non-GAAP Measures – Quarter Ended December 27, 2013
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Quarter Ended December 27, 2013 Adjustments Restructuring and Other Tax Adjusted U.S. GAAP Charges, Net Item s (1) (Non-GAAP) (2) ($ in m illions, except per share data) Operating Income: Transportation Solutions $ 296
Slide 21: Reconciliation of Non-GAAP Measures – Quarter Ended December 28, 2012
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Quarter Ended December 28, 2012 Adjustm ents Acquisition Restructuring Related and Other Tax Adjusted U.S. GAAP Charges Charges, Net Item s (1) (Non-GAAP) (2) ($ in m illions, except per share data) Operating Income: Tr
Slide 22: Reconciliation of Non-GAAP Measures – Quarter Ended March 29, 2013
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Quarter Ended March 29, 2013 Adjustm ents Acquisition Restructuring Related and Other Tax Adjusted U.S. GAAP Charges Charges, Net Item s (1) (Non-GAAP) (2) ($ in m illions, except per share data) Operating Income: Trans
Slide 23: Reconciliation of Non-GAAP Measures – Year Ended September 27, 2013
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Year Ended September 27, 2013 Adjustm ents Acquisition Restructuring Related and Other Tax Adjusted (1) U.S. GAAP Charges Charges, Net Item s (Non-GAAP) (2) ($ in m illions, except per share data) Operating Income: Tran
Slide 24: Realignment of Certain Businesses – Impact to Net Sales
Realignment of Certain Businesses – Impact to Net Sales For the Quarters Ended For the Years Ended Septem ber 27, June 28, March 29, Decem ber 28, Septem ber 28, June 29, March 30, Decem ber 30, Septem ber 27, Septem ber 28, Segment and Industry End Markets 2013 2013 2013 2012 2012 2012 2012 2011 20
Slide 25: EVERY CONNECTION COUNTS
EVERY CONNECTION COUNTS