Sensata Technologies Holding Plc · NYSE:ST
Sensata Technologies — Q1 2022 Earnings Presentation
32 slides from Sensata Technologies's earnings presentation, Apr 26, 2022
Slide 1: Sensata First Quarter 2022 Earnings Presentation
SENSATA FIRST QUARTER 2022 EARNINGS PRESENTATION April 26, 2022
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: Key Performance Highlights
Key Performance Highlights • Strong Q1-22 revenue outgrowth of 790 bps across all of Sensata exceeded target Outgrowth exceeds • Extremely active quoting activity within the first quarter long-term targets • New business wins on pace to exceed 2021 record levels - over half in Megatrend areas Succes
Slide 4: Electrification driving substantial growth for Sensata
Electrification driving substantial growth Electrification Revenue for Sensata Continued Leadership in Thermal: EV Win: Multiple OEM Awards Tire Management System $260M during 2021 ~$9M $40M annual revenue annual revenue 1.5x • Continuing to build on our strong position in thermal management • Tire
Slide 5: Sensata Accelerating Clean Energy Strategy with Acquisition of Dynapower
Sensata Accelerating Clean Energy Strategy with Acquisition of Dynapower – a Leader in Power Conversion Solutions End Market Focus • Trusted leader with nearly 60 years of experience in power conversion for clean energy, defense and industrial 55% 25% 20% • ~$100M in 2022E annual revenues @ ~20% EBI
Slide 6: Dynapower Builds Foundation for Sensata's Presence in Clean Energy
Dynapower Builds Foundation for Sensata’s Presence in Clean Sensata Energy; Power Conversion Solutions for Renewable Energy, Electrification Microgrids, Green Hydrogen and E-Mobility Infrastructure Objectives Combined Electrification SAM, $B P2X Sensata Today Dynapower 3.2 $2.0B Green 2026 Total Net
Slide 7: Sensata Insights/IoT delivers actionable data insights
Insights and IoT Sensata Insights/IoT delivers actionable data insights to our Revenue customers and their partners enabling them to drive operational efficiency, cost savings and safety solutions $75M during 2021 Sensata Insights Q1-22 Bringing IoT solutions into shipping New Business Wins accelera
Slide 8: Q1-22 Financials and 2022 Financial Guidance
Q1-22 FINANCIALS AND 2022 FINANCIAL GUIDANCE
Slide 9: Q1-2022 Financial Summary
Q1-2022 Financial Summary $ in millions, except EPS Q1-2022 Q1-2021 B/(W) • Revenue growth YoY of 3.5% composed of: Revenue $975.8 $942.5 3.5 % ◦ Outgrowth of 7.9% offsetting market Adjusted Operating Income $182.5 $198.1 (7.9)% decline of 5.8% and Q1-21 inventory % Revenue 18.7% 21.0% build of 2.1%
Slide 10: Q1-2022: Performance Sensing
Q1-2022: Performance Sensing Revenue Segment Operating Income % operating margin $717.7 $714.5 $180.6 $195.8 25.2% 27.4% Q1-22 Q1-21 Q1-22 Q1-21 Q1-22 YoY Revenue Growth Reported Organic Market • Flat revenue reflects declines in OEM production due Automotive (6.4%) (5.8%) (6.2%) to supply chain con
Slide 11: Q1-2022: Sensing Solutions
Q1-2022: Sensing Solutions Revenue Segment Operating Income % operating margin $258.1 $228.0 $72.5 $66.9 28.1% 29.3% Q1-22 Q1-21 Q1-22 Q1-21 Q4-21 YoY Revenue Growth Reported Organic Market • Revenue increase YoY reflects new Electrification Industrial & Other 15.1% 13.3% 0.9% launches and revenue f
Slide 12: Corporate and Other Operating Expenses
Corporate and Other Operating Expenses $ in millions Q1-2022 Q1-2021 B/(W) Corporate and Other $76.1 $68.6 (10.9%) • Adj. Corporate and Other increase primarily due to higher Megatrend investments % Revenue 7.8% 7.3% Adj. Corporate and Other $68.9 $61.8 (11.5%) % Revenue 7.1% 6.6% Megatrend Spend ($
Slide 13: Capital deployment strategy updated to include quarterly dividend
Capital deployment strategy updated to include quarterly dividend in addition to M&A and share repurchase Free Cash Flow ($ millions) $410 $344 $0.11 $67M Quarterly dividend payment on May 25 for shareholders Share Buyback of record as of May 11, 2022 during Q1-22 $70M annualized expenditure FY 2021
Slide 14: Q2-22 Financial Guidance
Q2-22 Financial Guidance • Q2-22 end-market growth expected to be $ in millions, except EPS Q2-22 GUIDANCE Q2-21 B/(W) ~(3%) YoY ◦ Auto: flat Revenue 0% - 4% $990 – $1,030 $992.7 ◦ HVOR: ~(14%) organic (2%) - 2% ◦ Industrial: ~1% ◦ Aerospace: ~3% Adj. Op Income $186 – $198 $209.3 (11%) - (5%) • Auto
Slide 15: FY-22 Financial Guidance
FY-22 Financial Guidance $ in millions, except EPS FY-22 GUIDANCE FY-21 B/(W) • 2022 end-market growth now expected to be Revenue 8% - 12% ~1% overall $4,125 – $4,275 $3,820.8 organic 6% - 9% • Automotive customer inventory build of $110M (2.9%) in 2021 not expected to repeat Adj. Op Income $848 – $
Slide 16: We expect 1% overall end-market growth in 2022
We expect 1% overall end-market growth in 2022 OEM Production Growth Rates 4% global auto production growth 2022E* 12% 8% 8% 7% 6% 7% 1% 0% (1%) (1%) (1%) (5%) Aerospace Industrial HVOR China Auto EU Auto NA Auto Prior 2022E Market Growth Current 2022E Market Growth *ST Automotive production estimat
Slide 17: Sensata targets revenue growth 8-12% above market
Sensata targets revenue growth 8-12% above market Sensata's Automotive, Heavy Vehicle Off-Road, Industrial, and Aerospace segments are cyclical in nature • Sensata grows revenue faster than markets due to expanding content and through acquisitions Organic Market Outgrowth (bps) Inorganic M&A Revenue
Slide 18: Key Messages – Looking Forward
Key Messages – Looking Forward Deliver strong outgrowth to market Create additional value through M&A Long-term Company outgrowth target of 400-600 and technology partnerships bps Targeting M&A contribution of 400-600 bps inorganic revenue growth Execute long-term organic Megatrend growth strategy F
Slide 19: Appendix A: Other Financial Information
APPENDIX A OTHER FINANCIAL INFORMATION
Slide 20: Q1-2022 GAAP Results
Q1-2022 GAAP Results $ and shares outstanding in millions, except EPS Q1-2022 Q1-2021 B/(W) Revenue $975.8 $942.5 3.5 % Gross Profit $318.7 $307.2 3.7 % (% of revenue) 32.7% 32.6% R&D $46.0 $36.0 (27.9)% (% of revenue) 4.7% 3.8% SG&A $95.7 $77.1 (24.1)% (% of revenue) 9.8% 8.2% Amortization of Intan
Slide 21: Q1-2022 Non-GAAP Results
Q1-2022 Non-GAAP Results $ and shares outstanding in millions, except EPS Q1-2022 Q1-2021 B/(W) Revenue $975.8 $942.5 3.5 % Adj. Gross Profit $320.9 $309.6 3.6 % (% of revenue) 32.9% 32.8% R&D $46.0 $36.0 (27.9)% (% of revenue) 4.7% 3.8% Adj. SG&A $90.6 $72.7 (24.6)% (% of revenue) 9.3% 7.7% Adj. Op
Slide 22: Q1-2022 Cash Flow Statement
Q1-2022 Cash Flow Statement $ in millions Q1-2022 Q1-2021 B/(W) Net Income $22.4 $53.7 (58.2)% Depreciation & Amortization $68.9 $63.3 8.9 % Changes in Working Capital ($103.2) ($58.3) NM Other $59.2 $45.8 29.2 % Operating Cash Flow $47.4 $104.5 (54.7)% Capital Expenditures ($35.7) ($27.2) (31.4)% F
Slide 23: Balance Sheet
Balance Sheet $ in millions MAR 31, 2022 DEC 31, 2021 Total Assets $8,611.4 $8,613.8 Working Capital $2,250.1 $2,240.7 Intangibles, Net & Other Long-Term Assets $5,521.3 $5,536.8 $ in millions MAR 31, 2022 DEC 31, 2021 Cash & Equivalents $1,608.5 $1,709.0 Current Debt $6.7 $6.8 Net Cash $1,601.8 $1,
Slide 24: Appendix B: GAAP to Non-GAAP Reconciliations
APPENDIX B GAAP TO NON-GAAP RECONCILIATIONS
Slide 25: 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 26: Non-GAAP Measures – continued
Non-GAAP Measures – continued Organic or Constant Currency Measures – in discussing trends in the Company’s performance, we may refer to the percentage change of certain GAAP or non-GAAP financial measures in one period versus another, calculated on either a reported, constant currency, or organic b
Slide 27: Adjusted EBITDA
Adjusted EBITDA $ in thousands Period Total Sensata LTM 1Q 2022 4Q 2021 3Q 2021 2Q 2021 1Q 2021 Net income $ 332,288 $ 22,441 $ 111,972 $ 84,959 $ 112,916 $ 53,733 Interest expense, net 180,693 45,445 44,898 45,137 45,213 44,043 Provision for income taxes 37,644 7,588 578 21,840 7,638 20,281 Depreci
Slide 28: Organic Revenue Growth
Organic Revenue Growth Q1-2022 0 Constant Currency % Reported % Change Less: Acquisition & Organic Growth Less: FX Impact Change (GAAP) Divestitures, net (non-GAAP) (non-GAAP) Performance Sensing 0.4% (0.7%) 1.1% 4.8% (3.7%) Sensing Solutions 13.2% (0.5%) 13.7% 2.1% 11.6% Sensata Total 3.5% (0.6%) 4
Slide 29: Free Cash Flow
Free Cash Flow $ in thousands Q1 Total Sensata 2022 2021 Change Net cash provided by operating activities $ 47,355 $ 104,511 (54.7%) Additions to property, plant and equipment and capitalized software (35,711) (27,172) (31.4%) Free cash flow $ 11,644 $ 77,339 (84.9%) Q1-2022 EARNINGS SUMMARY 29
Slide 30: Net Debt and Net Leverage Ratio
Net Debt and Net Leverage Ratio $ in thousands As of Total Sensata 3/31/2022 12/31/2021 9/30/2021 6/30/2021 3/31/2021 Current portion of long-term debt, finance lease and other financing $ 6,694 $ 6,833 $ 6,632 $ 7,281 $ 9,678 obligations Finance lease and other financing obligations, less current p
Slide 31: Adjusted Taxes and Adjusted Tax Rate
Adjusted Taxes and Adjusted Tax Rate $ in thousands Q1 Total Sensata 2022 2021 Provision for income taxes $ 7,588 $ 20,281 Non-GAAP adjustments: Deferred income tax and other tax expense (243) 10,122 Current tax effect of non-GAAP adjustments (6,925) (4,052) Adjusted taxes $ 14,756 $ 14,211 Adjusted
Slide 32: Other GAAP to Non-GAAP Reconciliations
Other GAAP to non-GAAP Reconciliations $ in thousands (except EPS amounts) Q1-2022 Q1-2021 Operating Operating Operating Operating Total Sensata Net Income EPS Net Income EPS Income Margin Income Margin Reported (GAAP) $ 125,930 12.9% $ 22,441 $ 0.14 $ 157,454 16.7% $ 53,733 $ 0.34 Non-GAAP adjustme