Te Connectivity Plc · NYSE:TEL
Te Connectivity — Q4 2019 Earnings Presentation
33 slides from Te Connectivity's earnings presentation, Oct 30, 2019
Slide 1: Q4 2019 Earnings
Q4 2019 Earnings October 30, 2019
Slide 2: Forward-Looking Statements and Non-GAAP Financial Measures
TE Connectivity Confidential & Proprietary. Do not reproduce or distribute. 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
Slide 3: Q4 Highlights
TE Connectivity Confidential & Proprietary. Do not reproduce or distribute. Sales and Adjusted EPS above the midpoint of Guidance • Sales of $3.3B, down 6% on a reported basis and down 5% organically Y/Y • Transportation down 5% organically driven by production declines in global auto and commercial
Slide 4: FY19 Highlights and FY20 Guidance
TE Connectivity Confidential & Proprietary. Do not reproduce or distribute. Demonstrated margin and earnings resiliency in a challenging market • Sales of $13.4B, down 4% on a reported basis and down 2% organically Y/Y • Transportation down 3% organically with content growth driving performance abov
Slide 5: Segment Orders Summary
TE Connectivity Confidential & Proprietary. Do not reproduce or distribute. Reported FY18 FY19 FY19 Q4 Y/Y Growth Q4 Q3 Q4 Reported Organic Transportation 2,033 1,897 1,899 (7)% (6)% Industrial 980 1,042 933 (5%) (4)% Communications 452 382 374 (17)% (16)% Total TE 3,465 3,321 3,206 (7)% (6)% Book t
Slide 6: Transportation Solutions
TE Connectivity Confidential & Proprietary. Do not reproduce or distribute. Y/Y Growth Rates Reported Organic Automotive $1,374 (6)% (4)% Commercial Transportation 283 (9)% (14)% Sensors 239 1% 0% Transportation Solutions $1,896 (6)% (5)% $ in Millions Q4 Sales Q4 Business Performance Reported Down
Slide 7: Industrial Solutions
TE Connectivity Confidential & Proprietary. Do not reproduce or distribute. Y/Y Growth Rates Reported Organic Aerospace , Defense and Marine $348 12% 13% Industrial Equipment 479 (7)% (8)% Energy 187 (2)% 2% Industrial Solutions $1,014 0% 1% $ in Millions Q4 Sales • AD&M strong growth ahead of marke
Slide 8: Communications Solutions
TE Connectivity Confidential & Proprietary. Do not reproduce or distribute. 16.8% 12.1% Q4 2018 Q4 2019 $483 $390 Q4 2018 Q4 2019 Y/Y Growth Rates Reported Organic Data & Devices $240 (18)% (18)% Appliances 150 (21)% (18)% Communications Solutions $390 (19)% (18)% $ in Millions Q4 Sales • Data & Dev
Slide 9: Q4 Financial Summary
TE Connectivity Confidential & Proprietary. Do not reproduce or distribute. ($ in Millions, except per share amounts) Q4 FY18 Q4 FY19 Net Sales $ 3,509 $ 3,300 Operating Income $ 570 $ 444 Operating Margin 16.2% 13.5% Acquisition Related Charges & Other Items 5 23 Restructuring & Other Charges, net
Slide 10: FY19 Summary
TE Connectivity Confidential & Proprietary. Do not reproduce or distribute. FY19 Summary 10 Adjusted Operating Margin 17.7% 17.0% FY18 FY19 Free Cash Flow $1,400 $1,616 FY18 FY19 $13,988 $13,448 FY18 FY19 Sales $ in Millions Adjusted Operating Margin, Adjusted EPS, Adjusted EBITDA Margin and Free Ca
Slide 11: Q1 Outlook
TE Connectivity Confidential & Proprietary. Do not reproduce or distribute. Guidance* Transportation Solutions Industrial Solutions Communications Solutions TE Connectivity Highlights Sales $3.0B to $3.2B Adjusted EPS $1.10 to $1.16 • Sales down ~$250M Y/Y reflecting 7% reported and 6% organic decli
Slide 12: FY20 Outlook
TE Connectivity Confidential & Proprietary. Do not reproduce or distribute. * Assumes foreign exchange rates and commodity prices that are consistent with current levels Organic Net Sales Growth and Adjusted EPS are non - GAAP financial measures; see Appendix for descriptions and reconciliations. Fu
Slide 13: Additional Information
TE Connectivity Confidential & Proprietary. Do not reproduce or distribute. Additional Information 13
Slide 14: Q4 2019 Sales and Adjusted EPS Bridge
TE Connectivity Confidential & Proprietary. Do not reproduce or distribute. Y/Y Q4 2019 14 Sales (in millions) Adjusted EPS Q4 2018 Results $3,509 $1.35 Operational Performance (146) (0.04) FX Impact (63) (0.01) Tax Rate Impact - 0.03 Q4 2019 Results $3,300 $1.33 Adjusted EPS is a non - GAAP financi
Slide 15: FY 2019 Sales and Adjusted EPS Bridge
TE Connectivity Confidential & Proprietary. Do not reproduce or distribute. Y/Y FY 2019 15 Adjusted EPS is a non - GAAP financial measure; See Appendix for description and reconciliation. Sales (in millions) Adjusted EPS 2018 Results $13,988 $5.61 Operational Performance (131) (0.03) FX Impact (409)
Slide 16: Q1 2020 Guidance Bridge
TE Connectivity Confidential & Proprietary. Do not reproduce or distribute. Y/Y Q1 2020 16 Sales (in millions) Adjusted EPS Q1 2019 Results $3,347 $1.29 Operational Performance (185) (0.13) FX Impact (62) (0.03) Tax Rate Impact - - Q1 2020 Guidance $3,100 $1.13 Guidance Range: Sales of $3.0B - $3.2B
Slide 17: FY 2020 Guidance Bridge
TE Connectivity Confidential & Proprietary. Do not reproduce or distribute. Y/Y FY 2020 17 Guidance Range Sales of $12.7B - $13.3B Adjusted EPS of $4.85 - $5.25 Adjusted EPS is a non - GAAP financial measure; See Appendix for description and reconciliation. Sales (in millions) Adjusted EPS 2019 Resu
Slide 18: Q4 Balance Sheet & Cash Flow Summary
TE Connectivity Confidential & Proprietary. Do not reproduce or distribute. ($ in Millions) Q4 2018 Q4 2019 Beginning Cash Balance $770 $546 Free Cash Flow 670 688 Dividends (153) (154) Share repurchases (268) (178) Net decrease in debt (1) (31) Acquisition of business, net of cash acquired (153) 0
Slide 19: Appendix
TE Connectivity Confidential & Proprietary. Do not reproduce or distribute. Appendix 19
Slide 20: Non-GAAP Financial Measures
TE Connectivity Confidential & Proprietary. Do not reproduce or distribute. 20 Non - GAAP Financial Measures We present non - GAAP performance and liquidity measures as we believe it is appropriate for investors to consider adjusted financ ial measures in addition to results in accordance with accou
Slide 21: Non-GAAP Measure Descriptions
TE Connectivity Confidential & Proprietary. Do not reproduce or distribute. 21 • Adjusted EBITDA and Adjusted EBITDA Margin - represent net income and net income as a percentage of net sales, respectively, (th e most comparable GAAP financial measures) before interest expense, interest income, incom
Slide 22: Segment Summary
TE Connectivity Confidential & Proprietary. Do not reproduce or distribute. 22 Segment Summary Net Sales Net Sales Net Sales Net Sales Transportation Solutions 1,896$ 2,012$ 7,821$ 8,290$ Industrial Solutions 1,014 1,014 3,954 3,856 Communications Solutions 390 483 1,673 1,842 Total 3,300$ 3,509$ 13
Slide 23: Reconciliation of Net Sales Growth
TE Connectivity Confidential & Proprietary. Do not reproduce or distribute. Reconciliation of Net Sales Growth 23 Translation (2) Acquisitions Transportation Solutions (3) : Automotive (89)$ (6.1)% (59)$ (4.1)% (30)$ -$ Commercial transportation (29) (9.3) (41) (13.6) (7) 19 Sensors 2 0.8 1 0.4 (4)
Slide 24: Non-GAAP Reconciliation, Quarter Ended September 27, 2019
TE Connectivity Confidential & Proprietary. Do not reproduce or distribute. Reconciliation of Non - GAAP Financial Measures to GAAP Financial Measures for the Quarter Ended September 27, 2019 24 Acquisition- Related Charges Restructuring and Other and Other Tax Adjusted U.S. GAAP Items (1)(2) Charge
Slide 25: Non-GAAP Reconciliation, Quarter Ended September 28, 2018
TE Connectivity Confidential & Proprietary. Do not reproduce or distribute. Reconciliation of Non - GAAP Financial Measures to GAAP Financial Measures for the Quarter Ended September 28, 2018 25 Acquisition- Restructuring Related and Other Tax Adjusted U.S. GAAP Charges (1) Charges, Net (1) Items (2
Slide 26: Non-GAAP Reconciliation, Year Ended September 27, 2019
TE Connectivity Confidential & Proprietary. Do not reproduce or distribute. Reconciliation of Non - GAAP Financial Measures to GAAP Financial Measures for the Year Ended September 27, 2019 26 Acquisition- Related Charges Restructuring and Other and Other Tax Adjusted U.S. GAAP Items (1)(2) Charges,
Slide 27: Non-GAAP Reconciliation, Year Ended September 28, 2018
TE Connectivity Confidential & Proprietary. Do not reproduce or distribute. Reconciliation of Non - GAAP Financial Measures to GAAP Financial Measures for the Year Ended September 28, 2018 27 Acquisition- Restructuring Related and Other Tax Adjusted U.S. GAAP Charges (1) Charges, Net (1) Items (2) (
Slide 28: Non-GAAP Reconciliation, Quarter Ended December 28, 2018
TE Connectivity Confidential & Proprietary. Do not reproduce or distribute. Reconciliation of Non - GAAP Financial Measures to GAAP Financial Measures for the Quarter Ended December 28, 2018 28 Acquisition- Restructuring Related and Other Adjusted U.S. GAAP Charges (1) Charges, Net (1) (Non-GAAP) (2
Slide 29: Reconciliation of Free Cash Flow
TE Connectivity Confidential & Proprietary. Do not reproduce or distribute. Reconciliation of Free Cash Flow 29 September 27, September 28, September 27, September 28, 2019 2018 2019 2018 Net cash provided by operating activities: Net cash provided by continuing operating activities 879$ 922$ 2,454$
Slide 30: Reconciliation of Adjusted EBITDA Margin (Quarter)
TE Connectivity Confidential & Proprietary. Do not reproduce or distribute. Reconciliation of Adjusted EBITDA Margin 30 September 27, September 28, 2019 2018 Net income 372$ 1,661$ Loss from discontinued operations 4 13 Income tax expense (benefit) 61 (1,128) Other expense, net - 1 Interest expense
Slide 31: Reconciliation of Adjusted EBITDA Margin (Year)
TE Connectivity Confidential & Proprietary. Do not reproduce or distribute. Reconciliation of Adjusted EBITDA Margin 31 September 27, September 28, 2019 2018 Net income 1,844$ 2,565$ Loss from discontinued operations 102 19 Income tax benefit (15) (344) Other income, net (2) (1) Interest expense 68
Slide 32: Adjusted Return on Invested Capital (ROIC)
TE Connectivity Confidential & Proprietary. Do not reproduce or distribute. Adjusted Return on Invested Capital (ROIC) 32 September 27, September 28, September 29, 2019 2018 2017 Operating income 1,978$ 2,331$ Acquisition-related charges and other items 47 22 Restructuring and other charges, net 255
Slide 33: Reconciliation of Forward-Looking Non-GAAP Financial Measures
TE Connectivity Confidential & Proprietary. Do not reproduce or distribute. Reconciliation of Forward - Looking Non - GAAP Financial Measures to Forward - Looking GAAP Financial Measures 33 Outlook for Quarter Ending December 27, Outlook for 2019 (1) Fiscal 2020 (1) Diluted earnings per share from c