Slide 1: Q1 2016 Earnings
Q1 2016 Earnings January 20, 2016
Slide 2: Forward-Looking Statements and Non-GAAP Measures
Forward-Looking Statements and Non-GAAP Measures 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
Slide 3: Q1 2016 Summary
Q1 2016 Summary Performing well in a challenging macro environment • Sales above the midpoint of Guidance, down 7% Y/Y and down 2% organically to $2.83B • Adjusted EPS of $0.84, above the high end of Guidance, down 6% Y/Y and flat at constant currency • Results above Guidance driven by Transportatio
Slide 4: Segment Orders Summary
Segment Orders Summary ($ in millions) FY15 FY16 Q1 Q4 Q1 • Q1 3% sequential growth in orders driven by Transportation 1,668 1,480 1,583 Transportation • Industrial orders stabilizing; Slightly better than Industrial 818 720 728 expected OEM orders more than offset weaker Communications distribution
Slide 5: Transportation Solutions
Transportation Solutions $ in Millions Sales Business Performance Actual Y/Y Growth Rates Actual Organic Down 7% Automotive $1,141 (7)% 1% $1,612 $1,507 Organic Commercial 185 (11)% (5)% Transportation Up 1% Q1 2015 Q1 2016 Sensors 181 1% 9% * Actual Organic Transportation $1,507 (7)% 1% Solutions O
Slide 6: Industrial Solutions
Industrial Solutions $ in Millions Sales Business Performance Actual Y/Y Growth Rates Actual Organic Down 10% Industrial Equipment $289 (7)% (7)% $784 $709 Aerospace & Organic 218 (6)% (3)% Defense Down 6% Q1 2015 Q1 2016 Oil and Gas 34 (44)% (44)% Actual Organic Energy 168 (7)% 4% Orders $728 (11)%
Slide 7: Communications Solutions
Communications Solutions $ in Millions Sales Business Performance Actual Y/Y Growth Rates Actual Organic Down 6% SubCom $222 66% 66% $653 $617 Appliances 131 (17)% (13)% Organic Data & Devices 264 (27)% (25)% Down 3% Q1 2015 Q1 2016 Communications $617 (6)% (3)% Actual Organic Solutions Orders ex Su
Slide 8: Q1 Financial Summary
Q1 Financial Summary ($ in Millions, except per share amounts) Q1 FY15 Q1 FY16 Net Sales $ 3,049 $ 2,833 Operating Income $ 425 $ 398 Acquisition Related Charges 51 6 Restructuring & Other Charges, net 25 40 Adjusted Operating Income $ 501 $ 444 Operating Margin 13.9% 14.0% Adjusted Operating Margin
Slide 9: TE Operating Advantage (TEOA)
TE Operating Advantage (TEOA) $ in Millions Adjusted Gross Margin Percentage Free Cash Flow 34.3% 33.4% $237 $79 Q1 2015 Q1 2016 Q1 2015 Q1 2016 Adjusted Operating Margin Adjusted EBITDA Margin 16.4% 15.7% 21.4% 20.8% Q1 2015 Q1 2016 Q1 2015 Q1 2016 Adjusted Margin resiliency in a challenging macro
Slide 10: Q2 Outlook
Q2 Outlook Guidance* Highlights • Automotive growth expected across regions and above Transportation Up Low Single Digits 1% global auto production; Commercial Transportation Solutions Up Mid Single Digits Organic strength in EMEA offsetting weaker North America • Industrial Solutions continues to b
Slide 11: FY16 Outlook
FY16 Outlook Guidance* Highlights • Transportation remains strong with high single Transportation Up Mid Single Digits Solutions digit Automotive organic growth expected on Up High Single Digits Organic 2% global auto production growth • Industrial and distribution inventory corrections Industrial e
Slide 12: Additional Information
Additional Information 12
Slide 13: Y/Y Q1 2016 Sales and Adjusted EPS Bridge
Y/Y Q1 2016 Sales Adjusted (in millions) EPS Q1 2015 Results $3,049 $0.89 (Recast in March 23, 2015 Form 8-K) FX Impact (184) (0.05) Operational Performance (32) - Q1 2016 Results $2,833 $0.84 Adjusted EPS is a non-GAAP measure; See Appendix for description and reconciliation. 13
Slide 14: Y/Y Q2 2016 Sales and Adjusted EPS Bridge
Y/Y Q2 2016 Sales Adjusted (in millions) EPS Q2 2015 Results $3,082 $0.91 FX Impact (73) (0.03) Operational Performance (29) - Q2 2016 Guidance $2,980 $0.88 Adjusted EPS is a non-GAAP measure; See Appendix for description and reconciliation. Guidance Range Sales $2.88B - $3.08B Adjusted EPS $0.84 -
Slide 15: Y/Y 2016 Sales and Adjusted EPS Bridge
Y/Y 2016 Sales Adjusted (in millions) EPS 2015 Results $12,233 $3.60 FX Impact (344) (0.13) Operational Performance, 411 0.53 Including Share Buyback 2016 Guidance* $12,300 $4.00 Adjusted EPS is a non-GAAP measure; See Appendix for description and reconciliation. * 53 Week Year Guidance Range Sales
Slide 16: Q1 Balance Sheet & Cash Flow Summary
Q1 Balance Sheet & Cash Flow Summary Free Cash Flow and Working Capital Liquidity, Cash & Debt ($ in Millions) Q1 2016 Q1 2015 Liquidity Summary ($ in Millions) Q1 2016 Q1 2015 Cash from Continuing Operations $367 $205 Capital expenditures, net (138) (130) Beginning Cash Balance $3,329 $2,457 Tax pa
Slide 17: Appendix
Appendix 17
Slide 18: Non-GAAP Measures
Non-GAAP Measures “Organic Sales Growth,” “Sales in Constant Currency,” “Adjusted Gross Margin,” “Adjusted Gross Margin Percentage,” “Adjusted Operating Income,” “Adjusted Operating Income in Constant Currency,” “Adjusted Operating Margin,” “Adjusted Other Income, Net,” “Adjusted Income Tax Expense,
Slide 19: Non-GAAP Measures (cont.)
Non-GAAP Measures (cont.) Adjusted Income Tax Expense – represents income tax expense (the most comparable GAAP measure) after adjusting for the tax effect of special items including charges related to restructuring and other charges, acquisition related charges, impairment charges, other income or
Slide 20: Segment Summary for the Quarter Ended December 25, 2015
Segment Summary for the Quarter Ended December 25, 2015 Net Sales O perating Adjusted O perating For the Q uarters Ended Y/Y Actual Y/Y O rganic Margin for the Margin for the December 25, December 26, Sales Sales Q uarter Ended Q uarter Ended Segment 2015 2014 Growth Growth (1) December 25, 2015 Dec
Slide 21: Reconciliation of Net Sales Growth – Q1 16 vs. Q1 15
Reconciliation of Net Sales Growth– Q1 16 vs. Q1 15 Percentage of Change in Net Sales for the Q uarter Ended December 25, 2015 Segment's Total versus Net Sales for the Q uarter Ended December 26, 2014 Net Sales for the Q uarter Ended O rganic (1) Translation (2) Acquisitions Total December 25, 2015
Slide 22: Reconciliation of Non-GAAP to GAAP Measures, Quarter Ended December 25, 2015
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Quarter Ended December 25, 2015 Adjustments Acquisition Restructuring Related and O ther Tax Adjusted (1) U.S. GAAP Charges Charges, Net Items (Non-GAAP) (2) ($ in millions, except per share data) Operating Income: Tran
Slide 23: Reconciliation of Non-GAAP to GAAP Measures, Quarter Ended December 26, 2014
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Quarter Ended December 26, 2014 Adjustments Acquisition Restructuring Related and O ther Tax Adjusted U.S. GAAP Charges (1) Charges, Net Items (2) (Non-GAAP) (3) ($ in millions, except per share data) Operating Income:
Slide 24: Reconciliation of Non-GAAP to GAAP Measures, Quarter Ended March 27, 2015
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Quarter Ended March 27, 2015 Adjustments Acquisition Restructuring Related and O ther Tax Adjusted U.S. GAAP Charges (1) Charges, Net Items (2) (Non-GAAP) (3) ($ in millions, except per share data) Operating Income: Tra
Slide 25: Reconciliation of Non-GAAP to GAAP Measures, Year Ended September 25, 2015
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Year Ended September 25, 2015 Adjustments Acquisition Restructuring Related and O ther Tax Adjusted U.S. GAAP Charges (1) Charges, Net Items (2) (Non-GAAP) (3) ($ in millions, except per share data) Operating Income: Tr
Slide 26: Reconciliation of Gross Margin & Gross Margin Percentage
Reconciliation of Gross Margin & Gross Margin Percentage For the Q uarters Ended December 25, September 25, December 26, 2015 2015 2014 ($ in millions) Net Sales $ 2,833 $ 2,984 $ 3,049 Cost of Sales 1,888 2,016 2,029 Gross Margin 945 968 1,020 Gross Margin Percentage 33.4% 32.4% 33.5% Acquisition R
Slide 27: Reconciliation of Free Cash Flow
Reconciliation of Free Cash Flow For the Q uarters Ended December 25, December 26, 2015 2014 (in millions) Net cash provided by continuing operating activities $ 367 $ 205 Capital expenditures, net (138) (130) Payments related to pre-separation U.S. tax matters, net 1 4 Payments related to income ta
Slide 28: Reconciliation of Adjusted EBITDA Margin
Reconciliation of Adjusted EBITDA Margin For the Q uarters Ended December 25, December 26, 2015 2014 ($ in millions) Net Income $ 353 $ 472 (Income) from discontinued operations (29) (37) Income tax expense (benefit) 58 (109) Other (income) expense, net (8) 70 Interest expense 30 34 Interest income
Slide 29: Reconciliation of Forward-Looking Non-GAAP Measures for Q2 2016 and Fiscal 2016
Reconciliation of Forward-Looking Non-GAAP Financial Measures to Forward-Looking GAAP Financial Measures for Q2 2016 and Fiscal 2016 O utlook for Q uarter Ending March 25, O utlook for 2016 Fiscal 2016 Diluted earnings per share from continuing operations Connectivity Ltd. (GAAP) $0.78 - $0.86 $3.66
Slide 30: Impact of Changes in Foreign Currency Exchange Rates
Impact of Changes in Foreign Currency Exchange Rates for Q1 2016, Q2 2016 and Fiscal 2016 Adjusted O perating Net Sales Income (1) Adjusted EPS (1) (in millions, except per share data) Quarter ended December 26, 2014 $ 3,049 $ 501 $ 0.89 Impact of changes in foreign currency exchange rates (2) (184)