Slide 1: TE Connectivity Third Quarter 2021 Earnings
EVERY CONNECTION COUNTS TE Connectivity Third Quarter 2021 Earnings July 28, 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 Q3 results above guidance - Record Sales & Adjusted EPS with strong Free Cash Flow • Record Sales of $3.8B, up ~50% Y/Y and up 3% sequentially • All Segments up significantly Y/Y with strong performance through the economic recovery • Growth benefitting from market improvement as
Slide 4: Segment Orders Summary
Reported FY20 FY21 FY21 Q3 Growth Q3 Q2 Q3 Y/Y Q/Q Transportation 1,178 2,766 2,562 118% (7)% Industrial 824 1,126 1,218 48% 8% Communications 384 678 755 97% 11% Total TE 2,386 4,570 4,535 90% (1)% Book to Bill 0.94 1.22 1.18 Segment Orders Summary ($ in millions) 4 • Y/Y orders growth in all busin
Slide 5: Transportation Solutions
Transportation Solutions $1,255 $2,265 Q3 2020 Q3 2021 • Automotive benefitting from market recovery; continued strong content outperformance driven by leading position in electric vehicle applications • Commercial Transportation growth driven by higher production and content gains from electronific
Slide 6: Industrial Solutions
Industrial Solutions $865 $1,002 Q3 2020 Q3 2021 Y/Y Growth Rates Reported Organic Industrial Equipment $377 42% 36% Aerospace, Defense and Marine 260 (2)% (7)% Energy 187 8% 9% Medical 178 11% 10% Industrial Solutions $1,002 16% 13% Strong operational performance driving margin expansion despite AD
Slide 7: Communications Solutions
$428 $578 Q3 2020 Q3 2021 Reported Up 35% Organic Up 31% Y/Y Growth Rates Reported Organic Data & Devices $329 19% 16% Appliances 249 64% 57% Communications Solutions $578 35% 31% •Data & Devices performance driven by content growth from high-speed cloud applications • Appliances growth in all regio
Slide 8: Q3 Financial Summary
Q3 Financial Summary ($ in Millions, except per share amounts) Q3 FY20 Q3 FY21 Net Sales $ 2,548 $ 3,845 Operating Income $ 134 $ 714 Operating Margin 5.3% 18.6% Acquisition-Related Charges 8 9 Restructuring & Other Charges, Net 98 11 Adjusted Operating Income $ 240 $ 734 Adjusted Operating Margin 9
Slide 9: Q3 Financial Performance
Q3 Financial Performance $2,548 $3,738 $3,845 Q3 2020 Q2 2021 Q3 2021 $0.59 $1.57 $1.79 Q3 2020 Q2 2021 Q3 2021 Adjusted EBITDA Margin 16.3% 22.2% 24.6% 9.4% 17.0% 19.1% Q3 2020 Q2 2021 Q3 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 Q3 2021 Sales and Adjusted EPS Bridge
Y/Y Q3 2021 Adjusted EPS is a non-GAAP financial measure; See Appendix for description and reconciliation. Sales (in millions) Adjusted EPS Q3 2020 Results $2,548 $0.59 Operational Performance 1,159 1.24 FX Impact 138 0.01 Tax Rate Impact -(0.05) Q3 2021 Results $3,845 $1.79 11
Slide 12: Y/Y Q4 2021 Sales and Adjusted EPS Bridge
Y/Y Q4 2021 Adjusted EPS is a non-GAAP financial measure; See Appendix for description and reconciliation. Sales (in millions) Adjusted EPS Q4 2020 Results $3,261 $1.16 Operational Performance 457 0.52 FX Impact 82 0.03 Tax Rate Impact -(0.06) Q4 2021 Guidance $3,800 $1.65 12
Slide 13: Free Cash Flow and Working Capital; Liquidity, Cash and Debt
($ in Millions) Q3 2020 Q3 2021 Beginning Cash Balance $796 $1,748 Free Cash Flow 280 539 Dividends (159) (165) Share repurchases (115) (259) Net decrease in debt (352) (426) Acquisition of businesses, net of cash acquired 31 (19) Other (7) (2) Ending Cash Balance $474 $1,416 Total Debt $4,086 $4,13
Slide 14: Appendix
EVERY CONNECTION COUNTS Appendix
Slide 15: Description of Non-GAAP 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 Definitions
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 $ 2,265 $ 1,255 $ 6,776 $ 4,980 Industrial Solutions 1,002 865 2,827 2,754 Communications Solutions 578 428 1,502 1,177 Total $ 3,845 $ 2,548 $ 11,105 $ 8,911 Transportation Solutions $ 433 19.1 % $ (1) (0.1) % $ 1,139 16.8 % $ (291) (5.8) % Industrial Sol
Slide 18: Net Sales Growth
Reconciliation of Net Sales Growth 18 Transportation Solutions (3): Automotive $ 803 100.8 % $ 738 90.2 % $ 65 $ — Commercial transportation 149 63.9 136 56.3 13 — Sensors 58 25.8 47 20.3 11 — Total 1,010 80.5 921 71.6 89 — Industrial Solutions (3): Aerospace, defense, oil, and gas (5) (1.9) (18) (6
Slide 19: Reconciliation: Quarter Ended June 25, 2021
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Quarter Ended June 25, 2021 19 Operating income: Transportation Solutions $ 433 $ 5 $ 2 $ 440 Industrial Solutions 148 4 6 158 Communications Solutions 133 — 3 136 Total $ 714 $ 9 $ 11 $ 734 Operating margin 18.6 % 19.1
Slide 20: Reconciliation: Quarter Ended June 26, 2020
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Quarter Ended June 26, 2020 20 Operating income (loss): Transportation Solutions $ (1) $ 6 $ 55 $ — $ 60 Industrial Solutions 70 2 40 — 112 Communications Solutions 65 — 3 — 68 Total $ 134 $ 8 $ 98 $ — $ 240 Operating m
Slide 21: Reconciliation: Nine Months Ended June 25, 2021
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Nine Months Ended June 25, 2021 21 Operating income: Transportation Solutions $ 1,139 $ 15 $ 130 $ — $ 1,284 Industrial Solutions 335 11 49 — 395 Communications Solutions 300 — 16 — 316 Total $ 1,774 $ 26 $ 195 $ — $ 1,
Slide 22: Reconciliation: Nine Months Ended June 26, 2020
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Nine Months Ended June 26, 2020 22 Operating income (loss): Transportation Solutions $ (291) $ 21 $ 77 $ 900 $ — $ 707 Industrial Solutions 327 6 56 — — 389 Communications Solutions 154 — 11 — — 165 Total $ 190 $ 27 $ 1
Slide 23: Reconciliation: Quarter Ended March 26, 2021
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Quarter Ended March 26, 2021 23 Operating income: Transportation Solutions $ 398 $ 5 $ 10 $ 413 Industrial Solutions 111 3 5 119 Communications Solutions 103 — 2 105 Total $ 612 $ 8 $ 17 $ 637 Operating margin 16.4 % 17
Slide 24: Reconciliation: Quarter Ended September 25, 2020
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Quarter Ended September 25, 2020 24 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 25: Reconciliation: Year Ended September 25, 2020
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Year Ended September 25, 2020 25 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 26: Reconciliation: Year Ended September 27, 2019
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Year Ended September 27, 2019 26 Operating income: Transportation Solutions $ 1,226 $ 31 $ 144 $ - $ 1,401 Industrial Solutions 543 15 63 - 621 Communications Solutions 209 1 48 - 258 Total $ 1,978 $ 47 $ 255 $ - $ 2,28
Slide 27: Free Cash Flow
Reconciliation of Free Cash Flow 27 Net cash provided by operating activities $ 682 $ 380 $ 1,902 $ 1,272 Net cash used in investing activities (174) (81) (497) (748) Net cash used in financing activities (842) (625) (943) (970) Effect of currency translation on cash 2 4 9 (7) Net increase (decrease
Slide 28: Adjusted EBITDA and Adjusted EBITDA Margin
Reconciliation of Adjusted EBITDA and Adjusted EBITDA Margin 28 Net income (loss) $ 580 $ 506 $ (41) (Income) loss from discontinued operations 1 (1) (17) Income tax expense 124 106 185 Other income, net (2) (4) (4) Interest expense 14 13 13 Interest income (3) (8) (2) Operating income 714 612 134 A
Slide 29: Forward-Looking GAAP Financial Measures Reconciliation
Reconciliation of Forward-Looking Non-GAAP Financial Measures to Forward-Looking GAAP Financial Measures 29 Diluted earnings per share from continuing operations $ 1.55 $ 5.94 Restructuring and other charges, net 0.08 0.54 Acquisition-related charges 0.02 0.08 Tax items — (0.09) Adjusted diluted ear