Te Connectivity Plc · NYSE:TEL
Te Connectivity — Q1 2021 Earnings Presentation
26 slides from Te Connectivity's earnings presentation, Jan 27, 2021
Slide 1: TE Connectivity First Quarter 2021 Earnings
EVERY CONNECTION COUNTS TE Connectivity First Quarter 2021 Earnings January 27, 2021
Slide 2: Forward-Looking Statements
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 to risks, uncertainty and changes in circumstanc
Slide 3: Earnings Highlights
Earnings Highlights Q1 Results exceeded guidance with double digit growth in Sales and EPS • Sales of $3.5B, up 11% on a reported basis and 6% organically Y/Y • Transportation up 12% organically Y/Y, with growth in all businesses • Industrial down 8% organically Y/Y, driven by weakness in Comm Air •
Slide 4: Segment Orders Summary
Reported FY20 FY20 FY21 Q1 Growth Q1 Q4 Q1 Y/Y Q/Q Transportation 1,867 2,124 2,537 36% 19% Industrial 965 799 956 (1%) 20% Communications 409 425 556 36% 31% Total TE 3,241 3,348 4,049 25% 21% Book to Bill 1.02 1.03 1.15 Segment Orders Summary ($ in millions) 4 • Transportation Y/Y growth driven by
Slide 5: Transportation Solutions
Transportation Solutions $1,868 $2,224 Q1 2020 Q1 2021 • Automotive organic sales growth of 11%, versus low- single digit global production growth, driven by continued strong content outperformance and supply chain benefits • Commercial Transportation organic growth driven by electronification trend
Slide 6: Industrial Solutions
Industrial Solutions $927 $873 Q1 2020 Q1 2021 Y/Y Growth Rates Reported Organic Aerospace, Defense and Marine $250 (19)% (22)% Industrial Equipment 295 12% 8% Medical 156 (13)% (13)% Energy 172 (2)% (4)% Industrial Solutions $873 (6)% (8)% Adjusted Operating Margin performance remains resilient des
Slide 7: Communications Solutions
$373 $425 Q1 2020 Q1 2021 Reported Up 14% Organic Up 12% Y/Y Growth Rates Reported Organic Data & Devices $234 7% 5% Appliances $191 24% 21% Communications Solutions $425 14% 12% • Data & Devices growth driven by market strength and share gains in high-speed cloud related applications • Appliances g
Slide 8: Q1 Financial Summary
Q1 Financial Summary ($ in Millions, except per share amounts) Q1 FY20 Q1 FY21 Net Sales $ 3,168 $ 3,522 Operating Income $ 471 $ 448 Operating Margin 14.9% 12.7% Acquisition-Related Charges 7 9 Restructuring & Other Charges, Net 24 167 Adjusted Operating Income $ 502 $ 624 Adjusted Operating Margin
Slide 9: Q1 Financial Performance
Q1 Financial Performance $3,168 $3,261 $3,522 Q1 2020 Q4 2020 Q1 2021 $1.21 $1.16 $1.47 Q1 2020 Q4 2020 Q1 2021 Adjusted EBITDA Margin 21.3% 20.1% 23.0% 15.8% 14.5% 17.7% Q1 2020 Q4 2020 Q1 2021 Adjusted Operating Margin, Adjusted EPS, Adjusted EBITDA Margin and Free Cash Flow are non-GAAP financial
Slide 10: Additional Information
EVERY CONNECTION COUNTS Additional Information
Slide 11: Y/Y Q1 2021 Adjusted EPS Bridge
Y/Y Q1 2021 Adjusted EPS is a non-GAAP financial measure; See Appendix for description and reconciliation. Sales (in millions) Adjusted EPS Q1 2020 Results $3,168 $1.21 Operational Performance 248 0.23 FX Impact 106 0.06 Tax Rate Impact -(0.03) Q1 2021 Results $3,522 $1.47 11
Slide 12: Y/Y Q2 2021 Adjusted EPS Bridge
Y/Y Q2 2021 Adjusted EPS is a non-GAAP financial measure; See Appendix for description and reconciliation. Sales (in millions) Adjusted EPS Q2 2020 Results $3,195 $1.29 Operational Performance 138 0.12 FX Impact 167 0.09 Tax Rate Impact -(0.03) Q2 2021 Guidance $3,500 $1.47 12
Slide 13: Free Cash Flow and Working Capital; Liquidity, Cash & Debt
($ in Millions) Q1 2020 Q1 2021 Beginning Cash Balance $927 $945 Free Cash Flow 243 529 Dividends (154) (159) Share repurchases (139) (119) Net decrease in debt (9) (30) Acquisition of businesses, net of cash acquired (115) (107) Other (11) 39 Ending Cash Balance $742 $1,098 Total Debt $3,973 $4,201
Slide 14: Appendix
EVERY CONNECTION COUNTS Appendix
Slide 15: Non-GAAP Financial Measures
15 Non-GAAP Financial Measures 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 financia
Slide 16: Non-GAAP Measure Descriptions
16 • Adjusted EBITDA and Adjusted EBITDA Margin - represent net income (loss) and net income (loss) 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 for net ot
Slide 17: Segment Summary
Segment Summary 17 Transportation Solutions $ 2,224 $ 1,868 Industrial Solutions 873 927 Communications Solutions 425 373 Total $ 3,522 $ 3,168 Transportation Solutions $ 308 13.8 % $ 316 16.9 % Industrial Solutions 76 8.7 115 12.4 Communications Solutions 64 15.1 40 10.7 Total $ 448 12.7 % $ 471 14
Slide 18: Reconciliation of Net Sales Growth
Reconciliation of Net Sales Growth 18 Transportation Solutions (3): Automotive $ 224 15.9 % $ 161 11.3 % $ 63 $ — Commercial transportation 73 28.3 65 24.9 8 — Sensors 59 28.8 7 3.2 5 47 Total 356 19.1 233 12.3 76 47 Industrial Solutions (3): Aerospace, defense, oil, and gas (59) (19.1) (68) (22.0)
Slide 19: Reconciliation for Quarter Ended December 25, 2020
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Quarter Ended December 25, 2020 19 Operating income: Transportation Solutions $ 308 $ 5 $ 118 $ — $ 431 Industrial Solutions 76 4 38 — 118 Communications Solutions 64 — 11 — 75 Total $ 448 $ 9 $ 167 $ — $ 624 Operating
Slide 20: Reconciliation for Quarter Ended December 27, 2019
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Quarter Ended December 27, 2019 20 Operating income: Transportation Solutions $ 316 $ 5 $ 4 $ - $ 325 Industrial Solutions 115 2 15 - 132 Communications Solutions 40 - 5 - 45 Total $ 471 $ 7 $ 24 $ - $ 502 Operating mar
Slide 21: Reconciliation for Quarter Ended September 25, 2020
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Quarter Ended September 25, 2020 21 Operating income: Transportation Solutions $ 198 $ 11 $ 36 $ — $ 245 Industrial Solutions 85 2 46 — 133 Communications Solutions 64 — 31 — 95 Total $ 347 $ 13 $ 113 $ — $ 473 Operatin
Slide 22: Reconciliation for Quarter Ended March 27, 2020
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Quarter Ended March 27, 2020 22 Operating income (loss): Transportation Solutions $ (606) $ 10 $ 18 $ 900 $ — $ 322 Industrial Solutions 142 2 1 — — 145 Communications Solutions 49 — 3 — — 52 Total $ (415) $ 12 $ 22 $ 9
Slide 23: Reconciliation for Year Ended September 25, 2020
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Year Ended September 25, 2020 23 Operating income (loss): Transportation Solutions $ (93) $ 32 $ 113 $ 900 $ - $ 952 Industrial Solutions 412 8 102 - - 522 Communications Solutions 218 - 42 - - 260 Total $ 537 $ 40 $ 25
Slide 24: Reconciliation of Free Cash Flow
Reconciliation of Free Cash Flow 24 Net cash provided by operating activities: Net cash provided by continuing operating activities $ 640 $ 719 $ 411 Net cash provided by discontinued operating activities — 1 — 640 720 411 Net cash used in investing activities (246) (117) (289) Net cash used in fina
Slide 25: Reconciliation of Adjusted EBITDA and Adjusted EBITDA Margin
Reconciliation of Adjusted EBITDA and Adjusted EBITDA Margin 25 Net income $ 381 $ 230 $ 26 Income from discontinued operations (6) (2) (3) Income tax expense 60 109 447 Other (income) expense, net 1 - (5) Interest expense 15 12 12 Interest income (3) (2) (6) Operating income 448 347 471 Acquisition
Slide 26: Reconciliation of Forward-Looking Non-GAAP Financial Measures
Reconciliation of Forward-Looking Non-GAAP Financial Measures to Forward-Looking GAAP Financial Measures 26 Diluted earnings per share from continuing operations $ 1.38 Restructuring and other charges, net 0.07 Acquisition-related charges 0.02 Adjusted diluted earnings per share from continuing oper