Sensata Technologies Holding Plc · NYSE:ST
Sensata Technologies — Q3 2022 Earnings Presentation
28 slides from Sensata Technologies's earnings presentation, Oct 25, 2022
Slide 1: Sensata Third Quarter 2022 Earnings Presentation
SENSATA THIRD QUARTER 2022 EARNINGS PRESENTATION October 25, 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 Continued strong • Strong Q3-22 revenue outgrowth of 650 bps across all of Sensata outgrowth • LTM outgrowth of 720 bps Record new business • Company achieved record new business wins, surpassing previous annual record in just wins nine months; ~70% of wins in Electrificat
Slide 4: Sensata is executing well on the Electrification opportunity
ELECTRIFICATION PRODUCT CATEGORIES Sensata is executing well on the Electrification opportunity in front of us Components Electrification New Business Wins more Power Conversion than doubled in 2022E ($M) Green House Gas emissions Energy Storage GR $580 reduction efforts, including % CA +100 increas
Slide 5: High Voltage Junction Boxes capitalize on Sensata's strengths
HIGH VOLTAGE PRODUCT CATEGORY UPDATE High Voltage Junction Boxes capitalize on Sensata's strengths; $250M* business wins YTD High Voltage Junction Boxes • Power Distribution Units • Charging Units >$60M* • Battery Disconnect Units Charge unit win • Unique design solves critical high voltage electric
Slide 6: Sensata's Safe & Efficient sensing capabilities remain vital
TIRE PRESSURE SENSING IN HEAVY COMMERCIAL VEHICLES Sensata's Safe & Efficient sensing capabilities remain vital and prosperous Regulations that drive adoption Example: steady pace of heavy vehicle • EU fitment requirements Tire Pressure Sensing new business by mid-2024 wins from past three years are
Slide 7: Q3-22 Financials and Q4-22 Financial Guidance
Q3-22 FINANCIALS AND Q4-22 FINANCIAL GUIDANCE
Slide 8: Q3-2022 Financial Summary
Q3-2022 Financial Summary $ in millions, except EPS Q3-2022 Q2-2022 Q3-2021 B/(W) • Revenue growth YoY of 7.1% composed of: Revenue $1,018.3 $1,020.5 $951.0 7.1 % ◦ Outgrowth of 6.5%, market growth Adjusted Operating Income $197.3 $193.8 $201.0 (1.8)% of 10.6%, and net M&A of 3.3% % Revenue 19.4% 19
Slide 9: Q3-2022: Performance Sensing
Q3-2022: Performance Sensing Revenue Segment Operating Income $754.5 $746.9 % operating margin $706.5 $188.6 $185.5 $193.7 25.0% 24.8% 27.4% Q3-22 Q2-22 Q3-21 Q3-22 Q2-22 Q3-21 • Automotive revenue increase reflects new product launches, Q3-22 YoY Revenue Growth Reported Organic pricing, and market
Slide 10: Q3-2022: Sensing Solutions
Q3-2022: Sensing Solutions Revenue Segment Operating Income % operating margin $263.7 $273.7 $244.6 $73.6 $79.5 $75.3 27.9% 29.0% 30.8% Q3-22 Q2-22 Q3-21 Q3-22 Q2-22 Q3-21 Q3-22 YoY Revenue Growth Reported Organic • Revenue increase YoY reflects new Electrification launches, pricing, and revenue fro
Slide 11: Corporate and Other Operating Expenses
Corporate and Other Operating Expenses $ in millions Q3-2022 Q2-2022 Q3-2021 B/(W) Corporate and Other $76.4 $76.4 $72.7 (5.0%) • Adj. Corporate and Other decrease primarily % Revenue 7.5% 7.5% 7.6% due to lower incentive compensation and FX, partially offset by higher Megatrend Adj. Corporate and O
Slide 12: Financial position strong with over $1.1B in cash
Sensata's financial position is strong with over $1.1B in cash; refinanced $500M Oct-23 Note at attractive rate Free Cash Flow ($ millions) $410 $0.11 $98M $242 Quarterly Dividend Payment Share Repurchase on Nov 23 for shareholders of during Q3-22 record as of Nov 9, 2022; FY 2021 LTM Q3-22 $17M tot
Slide 13: Q4-22 Financial Guidance
Q4-22 Financial Guidance $ in millions, except EPS Q4-22 GUIDANCE Q3-22 Q4-21 B/(W) • Q4-22 end-market growth expected to be ~(2%) YoY Revenue 5% - 9% $980 – $1,020 $1,018.3 $934.6 ◦ Auto: ~3% organic 7% - 11% ◦ HVOR: ~(13%) Adj. Op Income $193 – $205 $197.3 $197.6 (2%) - 4% ◦ Industrial: ~(7%) ◦ Ae
Slide 14: 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 bps Targeting M&A to expand Electrification and Insights capabilities Execute long-term strategy to drive Foster a culture of innovation organic revenue
Slide 15: Appendix A: Other Financial Information
APPENDIX A OTHER FINANCIAL INFORMATION
Slide 16: Q3-2022 GAAP Results
Q3-2022 GAAP Results $ and shares outstanding in millions, except EPS Q3-2022 Q3-2021 B/(W) Revenue $1,018.3 $951.0 7.1 % Gross Profit $323.7 $322.1 0.5% (% of revenue) 31.8% 33.9% R&D $47.9 $40.1 (19.7%) (% of revenue) 4.7% 4.2% SG&A $90.0 $85.8 (4.9%) (% of revenue) 8.8% 9.0% Amortization of Intan
Slide 17: Q3-2022 Non-GAAP Results
Q3-2022 Non-GAAP Results $ and shares outstanding in millions, except EPS Q3-2022 Q3-2021 B/(W) Revenue $1,018.3 $951.0 7.1 % Adj. Gross Profit $332.4 $326.1 1.9% (% of revenue) 32.6% 34.3% R&D $47.9 $40.1 (19.7%) (% of revenue) 4.7% 4.2% Adj. SG&A $85.6 $82.8 (3.4%) (% of revenue) 8.4% 8.7% Adj. Op
Slide 18: Q3-2022 Cash Flow Statement
Q3-2022 Cash Flow Statement $ in millions Q3-2022 Q3-2021 B/(W) Net Income $140.3 $85.0 65.1% Depreciation & Amortization $72.0 $66.1 8.9% Changes in Working Capital ($23.1) ($37.5) 38.4% Other ($95.3) $11.8 NM Operating Cash Flow $93.8 $125.3 (25.1%) Capital Expenditures ($36.4) ($36.8) 1.3% Free C
Slide 19: Balance Sheet
Balance Sheet $ in millions SEP 30, 2022 DEC 31, 2021 Total Assets $8,712.6 $8,613.8 Working Capital $1,794.2 $2,240.7 Intangibles, Net & Other Long-Term Assets $6,012.4 $5,536.8 $ in millions SEP 30, 2022 DEC 31, 2021 Cash & Equivalents $1,103.9 $1,709.0 Current Debt $6.5 $6.8 Net Cash $1,097.4 $1,
Slide 20: Appendix B: GAAP to Non-GAAP Reconciliations
APPENDIX B GAAP TO NON-GAAP RECONCILIATIONS
Slide 21: 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 22: 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 23: Adjusted EBITDA
Adjusted EBITDA $ in thousands Period Total Sensata LTM 3Q 2022 2Q 2022 1Q 2022 4Q 2021 3Q 2021 Net income $ 309,507 $ 140,253 $ 34,841 $ 22,441 $ 111,972 $ 84,959 Interest expense, net 180,041 44,856 44,842 45,445 44,898 45,137 Provision for income taxes 74,607 46,421 20,020 7,588 578 21,840 Deprec
Slide 24: Organic Revenue Growth
Organic Revenue Growth Q3-2022 Constant Currency % Reported % Change Less: Acquisition & Organic Growth Less: FX Impact Change (GAAP) Divestitures, net (non-GAAP) (non-GAAP) Performance Sensing 6.8% (3.6%) 10.4% 3.2% 7.2% Sensing Solutions 7.8% (2.4%) 10.2% 3.3% 6.9% Sensata Total 7.1% (3.3%) 10.4%
Slide 25: Free Cash Flow
Free Cash Flow $ in thousands Q3 Q3 YTD Total Sensata 2022 2021 Change 2022 2021 Change Net cash provided by operating activities $ 93,845 $ 125,295 (25.1%) $ 235,733 $ 393,226 (40.1%) Additions to property, plant and equipment and (36,355) (36,838) 1.3% (110,424) (100,410) (10.0%) capitalized softw
Slide 26: Net Debt and Net Leverage Ratio
Net Debt and Net Leverage Ratio $ in thousands As of Total Sensata 9/30/2022 6/30/2022 3/31/2022 12/31/2021 9/30/2021 Current portion of long-term debt, finance lease and other financing $ 6,536 $ 6,566 $ 6,694 $ 6,833 $ 6,632 obligations Finance lease and other financing obligations, less current p
Slide 27: Adjusted Taxes and Adjusted Tax Rate
Adjusted Taxes and Adjusted Tax Rate $ in thousands Q3 Q3 YTD Total Sensata 2022 2021 2022 2021 Provision for income taxes $ 46,421 $ 21,840 $ 74,029 $ 49,759 Non-GAAP adjustments: Deferred income tax and other tax expense 27,121 1,971 28,455 5,893 Current tax effect of non-GAAP adjustments 2,164 4,
Slide 28: Other GAAP to Non-GAAP Reconciliations
Other GAAP to non-GAAP Reconciliations $ in thousands (except EPS amounts) Q3-2022 Q3-2021 Operating Operating Operating Operating Total Sensata Net Income EPS Net Income EPS Income Margin Income Margin Reported (GAAP) $ 252,901 24.8% $ 140,253 $ 0.91 $ 161,339 17.0% $ 84,959 $ 0.53 Non-GAAP adjustm
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