Sensata Technologies Holding Plc · NYSE:ST
Sensata Technologies — Q3 2024 Earnings Presentation
23 slides from Sensata Technologies's earnings presentation, Nov 4, 2024
Slide 1: Sensata Third Quarter 2024 Earnings Presentation
Sensata Third Quarter 2024 Earnings Presentation November 2024
Slide 2: Forward-Looking Statements and Non-GAAP Measures
Forward-Looking Statements and Non-GAAP Measures Safe Harbor Statement This presentation includes "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements may be identified by terminology such as "may," "will," "could,"
Slide 3: Q3-2024 Business Highlights
Q3-2024 Business Highlights "Our third quarter core operating results demonstrate early positive returns from our efforts to improve operational efficiency, drive execution, and expand margins" - Martha Sullivan, Interim President and CEO ✓ Delivered Q3 results in line with midpoint of guide ✓ Deliv
Slide 4: Automotive and heavy vehicle production estimates for Q4 are lower
Automotive and heavy vehicle production estimates for Q4 are lower as inventory levels have grown faster than SAAR expectations Performance Sensing Sensing Solutions • Solid outgrowth in European and North • Muted expectations as destocking continues American markets in Q3 and housing market remains
Slide 5: Q3-2024 Financials and Q4-2024 Financial Guide
Q3-2024 FINANCIALS AND Q4-2024 FINANCIAL GUIDE
Slide 6: Q3-2024 Operating results consistent with guide
Q3-2024 Operating results consistent with guide • Revenue of $983M is a decrease of approximately $18.5M or 1.8% from Q3-2023, primarily Delivered operating attributable to product lifecycle management related exits results in line with • Adj. Operating Income of $188M or 19.2% of revenue is up 20 b
Slide 7: Q3-24 Segment Performance
Q3-24 Segment Performance Revenue Performance Sensing Net Revenue Segment $ in millions Q3-2024 Q3-2023 YoY B/(W) Growth decreased primarily due to product lifecycle Net Revenue $659.7 $696.8 $(37.2) (5.3) % management related exits and reduced Performance Sensing(1) Adj. Operating Income $161.9 $17
Slide 8: Q3-2024 Financial Summary
Q3-2024 Financial Summary $ and shares outstanding in millions, except EPS Q3-2024 Q3-2023 YoY B/(W) Revenue decreased primarily due to product lifecycle management related Revenue $982.8 $1,001.3 (1.8) % exits; adjusting for exited products, Adj. Gross Profit $312.1 $320.6 Revenue would have increa
Slide 9: Capital deployment strategy, including repayment of debt, is improving ROIC
Capital deployment strategy, including repayment of debt, is improving ROIC $0.12 3.0x Quarterly dividend payment Net leverage ratio paid on August 28, 2024 to as of September 30, 2024, down from 3.2x in Q2 shareholders of record as of August Target of <3x by December 31, 2024 14, 2024 $311M $37M $2
Slide 10: Q4-24 Financial Guidance
Q4-24 Financial Guidance $ in millions, except EPS Q4-24 GUIDANCE Q3-24 B/(W) Revenue decreases sequentially from Q3 to Q4 by approximately $100 million at midpoint Revenue $870 – $900 $982.8 (11) % - (8) % due to: • Sale of Insights business (~$50 million) Adj. Op Income $167.2 – $175.2 $188.4 (11)
Slide 11: Appendix A: Other Financial Information
APPENDIX A: OTHER FINANCIAL INFORMATION
Slide 12: Q3-2024 GAAP Results
Q3-2024 GAAP Results $ and shares outstanding in millions, except EPS Q3-2024 Q3-2023 B/(W) Revenue $982.8 $1,001.3 (1.8) % Gross Profit $281.4 $313.3 (10.2) % (% of revenue) 28.6 % 31.3 % R&D $42.7 $45.4 6.1 % (% of revenue) 4.3 % 4.5 % SG&A $102.5 $85.7 (19.6) % (% of revenue) 10.4 % 8.6 % Amortiz
Slide 13: Q3-2024 Cash Flow Statement
Q3-2024 Cash Flow Statement $ in millions Q3-2024 Q3-2023 B/(W) Net (Loss)/Income ($25.0) $62.8 (139.9) % Depreciation & Amortization $78.4 $73.3 (7.0) % Changes in Working Capital $30.8 $8.3 (272.6) % Other $46.7 ($5.4) (962.4) % Operating Cash Flow $130.9 $138.9 (5.8) % Capital Expenditures ($39.6
Slide 14: Balance Sheet
Balance Sheet $ in millions SEP 30, 2024 DEC 31, 2023 Total Assets $ 7,314.3 $ 7,681.0 Working Capital $ 1,288.4 $ 1,278.7 Intangibles, Net & Other Long-Term Assets $ 5,219.0 $ 5,578.6 $ in millions SEP 30, 2024 DEC 31, 2023 Cash & Equivalents $ 506.2 $ 508.1 Current Debt $ 2.1 $ 2.3 Net Cash $ 504.
Slide 15: Appendix B: GAAP to Non-GAAP Reconciliations
APPENDIX B: GAAP TO NON-GAAP RECONCILIATIONS
Slide 16: Non-GAAP Measures
Non-GAAP Measures We supplement the reporting of our financial information determined in accordance with U.S. generally accepted accounting principles (“GAAP”) with certain non-GAAP financial measures. We use these non-GAAP financial measures internally to make operating and strategic decisions, inc
Slide 17: Non-GAAP Measures – continued
Non-GAAP Measures – continued Free Cash Flow – is defined as net cash provided by operating activities less additions to property, plant and equipment and capitalized software. We believe free cash flow is useful to management and investors as a measure of cash generated by business operations that
Slide 18: Adjusted EBITDA
Adjusted EBITDA In thousands Period Total Sensata LTM 3Q 2024 2Q 2024 1Q 2024 4Q 2023 3Q 2023 Net (loss)/income $ (79,548) $ (25,034) $ 71,703 $ 76,021 $ (202,238) $ 62,801 Interest expense, net 138,559 33,085 35,061 34,657 35,756 36,908 (Benefit from)/provision for income taxes (209,438) (219,572)
Slide 19: Free Cash Flow
Free Cash Flow $ in thousands Q3 Q3 YTD Total Sensata 2024 2023 Change 2024 2023 Change Net cash provided by operating activities $ 130,891 $ 138,935 (5.8) % $ 380,834 $ 351,577 8.3 % Additions to property, plant and equipment and (39,571) (51,780) 23.6 % (126,759) (136,224) 6.9 % capitalized softwa
Slide 20: Debt and Leverage Ratio (Gross and Net)
Debt and Leverage Ratio (Gross and Net) $ in thousands As of Total Sensata 9/30/2024 6/30/2024 3/31/2024 12/31/2023 9/30/2023 Current portion of long-term debt and finance lease obligations $ 2,076 $ 702,701 $ 2,340 $ 2,276 $ 1,888 Finance lease obligations, less current portion 21,702 21,964 22,587
Slide 21: Adjusted Taxes and Adjusted Tax Rate
Adjusted Taxes and Adjusted Tax Rate $ in thousands Q3 Q3 YTD Total Sensata 2024 2023 2024 2023 Provision for income taxes $ (219,572) $ 17,868 $ (169,722) $ 61,467 Non-GAAP adjustments: Deferred income tax and other tax expense/(benefit) (239,221) (1,122) (233,775) 12,102 Current tax effect of non-
Slide 22: Adjusted Corporate and Other Expenses
Adjusted Corporate and Other Expenses In thousands Q3 Q3 YTD Total Sensata 2024 2023 2024 2023 Corporate and other expenses $ (268,809) $ (75,117) $ (442,665) $ (219,022) Non-GAAP adjustments: Restructuring related and other 182,528 9,234 209,363 20,915 Financing and other transaction costs 18,941 1
Slide 23: Other GAAP to non-GAAP Reconciliations
Other GAAP to non-GAAP Reconciliations $ in thousands (except EPS amounts) Q3-2024 Q3-2023 Operating Net Operating Operating Operating Total Sensata (Loss)/Inco (Loss)/Inco EPS Net Income EPS Margin Income Margin me me Reported (GAAP) $ (199,227) (20.3) % $ (25,034) $ (0.17) $ 116,260 11.6 % $ 62,80