Slide 1: Q2 2017 Earnings
Q2 2017 Earnings April 26, 2017
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 subject
Slide 3: Q2 Highlights
Q2 Highlights Record Q2 performance and raising FY17 Guidance • 8% organic growth year-over-year • Sales of $3.2B, with organic growth across all segments and regions, with Asia up 16% • Organic growth of 10% in Transportation, with content growth driving market outperformance • Industrial markets i
Slide 4: Segment Orders Summary
Segment Orders Summary ($ in millions) Reported FY16 FY17 FY17 Q2 Growth Q2 Q1 Q2 Reported Organic • Transportation Y/Y growth driven by strength Transportation 1,551 1,775 1,811 17% 18% in all regions • Industrial Y/Y growth driven primarily by factory Industrial 762 832 927 22% 8% automation and i
Slide 5: Transportation Solutions
Transportation Solutions $ in Millions Sales Business Performance Reported Y/Y Growth Rates Reported Organic Up 9% $1,755 Automotive $1,309 8% 9% $1,608 Organic Commercial 248 19% 21% Up 10% Transportation Q2 2016 Q2 2017 Sensors 198 7% 3% Reported Organic Transportation $1,755 9% 10% Orders $1,811
Slide 6: Industrial Solutions
Industrial Solutions $ in Millions Sales Business Performance Reported Y/Y Growth Rates Reported Organic Up 16% Industrial Equipment $418 36% 4% $853 Organic $738 Aerospace, Defense 268 (2)% -% and Marine Up 3% Q2 2016 Q2 2017 Energy 167 6% 7% Reported Organic Industrial Solutions $853 16% 3% Orders
Slide 7: Communications Solutions
Communications Solutions $ in Millions Sales Business Performance Reported Y/Y Growth Rates Reported Organic Up 2% Data & Devices* $233 (10)% 5% $606 $619 Organic Appliances 165 12% 14% Up 9% Q2 2016 Q2 2017 SubCom 221 11% 11% Communications Reported Organic $619 2% 9% Solutions Orders ex SubCom* $4
Slide 8: Q2 Financial Summary
Q2 Financial Summary ($ in Millions, except per share amounts) Q2 FY16 Q2 FY17 Net Sales $ 2,952 $ 3,227 Operating Income $ 535 $ 473 Operating Margin 18.1% 14.7% Acquisition Related Charges 4 3 Restructuring & Other Charges, net (99) 59 Adjusted Operating Income $ 440 $ 535 Adjusted Operating Margi
Slide 9: Q2 Operating Metrics
Q2 Operating Metrics $ in Millions Adjusted Gross Margin Percentage Free Cash Flow 34.4% $387 $209 32.6% Q2 2016 Q2 2017 Q2 2016 Q2 2017 Adjusted Operating Margin Adjusted EBITDA Margin 16.6% 21.3% 14.9% 19.7% Q2 2016 Q2 2017 Q2 2016 Q2 2017 9 Adjusted Gross Margin Percentage, Free Cash Flow, Adjust
Slide 10: Q3 Outlook
Q3 Outlook Guidance* Highlights Transportation Up Low Single Digits • Transportation Solutions mid single digit organic Solutions Up Mid Single Digits Organic growth expected on 1% global auto production; Heavy truck performance remains strong • Industrial Solutions organic growth expected across In
Slide 11: FY17 Outlook vs 52 week prior year
FY17 Outlook* vs 52 week prior year Guidance Highlights • Transportation organic growth increases from prior view driven by 1H China strength; Expect 2-3% global Transportation Up Mid Single Digits auto production growth; Continue to expect strong Solutions growth in Commercial Transportation and gr
Slide 12: Additional Information
Additional Information 12
Slide 13: Y/Y Q2 2017 Adjusted EPS
Y/Y Q2 2017 Sales Adjusted (in millions) EPS Q2 2016 Results $2,952 $0.90 Operational Performance 242 0.23 Acquisitions / Divestitures, net 78 0.03 Tax Impact - 0.06 FX Impact (45) (0.03) Q2 2017 Results $3,227 $1.19 13 Adjusted EPS is a non-GAAP measure; See Appendix for description and reconciliat
Slide 14: Y/Y Q3 2017 Adjusted EPS of $1.14 – $1.18
Y/Y Q3 2017 Sales Adjusted (in millions) EPS Q3 2016 Results $3,121 $1.08 Operational Performance 162 0.14 Acquisitions / Divestitures, net 29 0.01 Tax Impact - (0.03) FX Impact (72) (0.04) Q3 2017 Guidance $3,240 $1.16 Guidance Range: Sales of $3.2B - $3.3B Adjusted EPS of $1.14 – $1.18 14 Adjusted
Slide 15: Y/Y FY 2017
Y/Y FY 2017 1H 2H FY17 Sales Adjusted Sales Adjusted Sales Adjusted (in millions) EPS (in millions) EPS (in millions) EPS 2016 – 52 Weeks $5,785 $1.74 $6,215 $2.21 $12,000 $3.95 Operational 429 0.36 282 0.19 711 0.55 Performance Acquisitions / 146 0.05 50 0.03 196 0.08 Divestitures, net* Share Repur
Slide 16: Q2 Balance Sheet & Cash Flow Summary
Q2 Balance Sheet & Cash Flow Summary Free Cash Flow and Working Capital Liquidity, Cash & Debt ($ in Millions) ($ in Millions) Q2 2016 Q2 2017 Q2 2016 Q2 2017 Cash from Continuing Operations $156 $521 Beginning Cash Balance $2,223 $665 Free Cash Flow 209 387 Capital expenditures, net (131) (155) Div
Slide 17: Appendix
Appendix 17
Slide 18: Non-GAAP Measures (cont.)
Non-GAAP Measures (cont.) We present non-GAAP performance and liquidity measures as we believe it is appropriate for investors to consider adjusted financial measures in addition to results in accordance with accounting principles generally accepted in the U.S. (“GAAP”). These non-GAAP financial mea
Slide 19: Non-GAAP Measures (cont.)
Non-GAAP Measures (cont.) • Adjusted EBITDA and Adjusted EBITDA Margin - represent net income and net income as a percentage of net sales, respectively, (the most comparable GAAP financial measures) before interest expense, interest income, income taxes, depreciation, and amortization, as adjusted f
Slide 20: Segment Summary
Segment Summary For the Q uarters Ended For the Six Months Ended March 25, March 31, March 25, March 31, 2016 2017 2016 2017 ($ in millions) Net Sales Net Sales Net Sales Net Sales Transportation Solutions $ 1,608 $ 1,755 $ 3,115 $ 3,430 Industrial Solutions 738 853 1,447 1,648 Communications Soluti
Slide 21: Reconciliation of Net Sales Growth – Q2 17 vs. Q2 16
Reconciliation of Net Sales Growth – Q2 17 vs. Q2 16 Change in Net Sales for the Q uarter Ended March 31, 2017 versus Net Sales for the Q uarter Ended March 25, 2016 Net O rganic Net Acquisitions (1) (2) Sales Growth Sales Growth Translation (Divestiture) ($ in millions) Transportation Solutions (3)
Slide 22: Reconciliation of Net Sales Growth by Region – Q2 17 vs. Q2 16
Reconciliation of Net Sales Growth by Region – Q2 17 vs. Q2 16 Change in Net Sales for the Q uarter Ended March 31, 2017 versus Net Sales for the Q uarter Ended March 25, 2016 Net O rganic Net Acquisitions (1) (2) Sales Growth Sales Growth Translation (Divestiture) ($ in millions) Americas $ 78 7.9%
Slide 23: Non-GAAP to GAAP Measures, Quarter Ended March 31, 2017
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Quarter Ended March 31, 2017 Adjustments Acquisition Restructuring Related and O ther Tax Adjusted U.S. GAAP Charges (1) Charges, Net (1) Items (2) (Non-GAAP) (3) ($ in millions, except per share data) Operating Income:
Slide 24: Non-GAAP to GAAP Measures, Quarter Ended December 30, 2016
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Quarter Ended December 30, 2016 Adjustments Acquisition Restructuring Related and O ther Tax Adjusted (1) (1) (2) U.S. GAAP Charges Charges, Net Items (Non-GAAP) (3) ($ in millions, except per share data) Operating Inco
Slide 25: Non-GAAP to GAAP Measures, Quarter Ended March 25, 2016
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Quarter Ended March 25, 2016 Adjustments Restructuring Acquisition and O ther Related Charges Tax Adjusted U.S. GAAP Charges (1) (Credits), Net (1)(2) Items (Non-GAAP) (3) ($ in millions, except per share data) Operatin
Slide 26: Non-GAAP to GAAP Measures, Six Months Ended March 31, 2017
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Six Months Ended March 31, 2017 Adjustments Acquisition Restructuring Related and O ther Tax Adjusted U.S. GAAP Charges (1) Charges, Net (1) Items (2) (Non-GAAP) (3) ($ in millions, except per share data) Operating Inco
Slide 27: Non-GAAP to GAAP Measures, Six Months Ended March 25, 2016
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Six Months Ended March 25, 2016 Adjustments Restructuring Acquisition and O ther Related Charges Tax Adjusted U.S. GAAP Charges (1) (Credits), Net (1)(2) Items (3) (Non-GAAP) (4) ($ in millions, except per share data) O
Slide 28: Non-GAAP to GAAP Measures, Quarter Ended June 24, 2016
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Quarter Ended June 24, 2016 Adjustments Acquisition Restructuring Related and O ther Tax Adjusted U.S. GAAP Charges (1)(2) Charges, Net (2) Items (3) (Non-GAAP) (4) ($ in millions, except per share data) Operating Incom
Slide 29: Non-GAAP to GAAP Measures, Quarter Ended September 30, 2016
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Quarter Ended September 30, 2016 Adjustments Restructuring Acquisition and O ther Related Charges Adjusted U.S. GAAP Charges (1) (Credits), Net (1) (Non-GAAP) (2) ($ in millions, except per share data) Operating Income:
Slide 30: Impact of Additional Week for Q4 2016
Impact of Additional Week for Q4 2016 Change in Net Sales for the Q uarter Ended Change in O rganic Net Sales for the Q uarter Ended September 30, 2016 versus Net Sales for the September 30, 2016 versus O rganic Net Sales for the For the Q uarter Ended September 30, 2016 Q uarter Ended September 25,
Slide 31: Non-GAAP to GAAP Measures, Year Ended September 30, 2016
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Year Ended September 30, 2016 Adjustments Restructuring Acquisition and O ther Related Charges Tax Adjusted U.S. GAAP Charges (1)(2) (Credits), Net (2) Items (3) (Non-GAAP) (4) ($ in millions, except per share data) Ope
Slide 32: Impact of Additional Week for Fiscal 2016
Impact of Additional Week for Fiscal 2016 Change in Net Sales for Fiscal 2016 Change in O rganic Net Sales for Fiscal 2016 Fiscal 2016 versus Net Sales for Fiscal 2015 versus O rganic Net Sales for Fiscal 2015 (2) Adjustment Adjustment Adjustment 53 Weeks Impact of 52 Weeks 53 Weeks Impact of 52 Wee
Slide 33: Reconciliation of Gross Margin & Gross Margin Percentage
Reconciliation of Gross Margin & Gross Margin Percentage For the Q uarters Ended March 25, March 31, 2016 2017 ($ in millions) Net Sales $ 2,952 $ 3,227 Cost of Sales 1,990 2,119 Gross Margin 962 1,108 Gross Margin Percentage 32.6% 34.3% Acquisition Related Charges 1 1 Adjusted Gross Margin (1) $ 96
Slide 34: Reconciliation of Free Cash Flow
Reconciliation of Free Cash Flow For the Q uarters Ended For the Six Months Ended March 25, March 31, March 25, March 31, 2016 2017 2016 2017 (in millions) Net cash provided by operating activities: Net cash provided by continuing operating activities $ 156 $ 521 $ 547 $ 925 Net cash used in discont
Slide 35: Reconciliation of Adjusted EBITDA Margin
Reconciliation of Adjusted EBITDA Margin For the Q uarters Ended March 25, March 31, 2016 2017 ($ in millions) Net Income $ 380 $ 405 Loss from discontinued operations 9 1 Income tax expense 130 39 Other (income) expense, net (12) 2 Interest expense 32 32 Interest (income) (4) (6) Operating Income 5
Slide 36: Reconciliation of Forward-Looking Non-GAAP Financial Measures
Reconciliation of Forward-Looking Non-GAAP Financial Measures to Forward-Looking GAAP Financial Measures O utlook for Q uarter Ending June 30, 2017 (1) Diluted earnings per share from continuing operations (GAAP) $1.08 - $1.12 Restructuring and other charges, net 0.05 Acquisition related charges 0.0