Slide 1: Tyco Electronics Q1 2010 Earnings Call
Tyco Electronics Q1 2010 Earnings Call January 27, 2010
Slide 2: Forward-Looking Statements / Non-GAAP Measures
Forward-Looking Statements / Non-GAAP Measures This presentation contains certain “forward-looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995. These statements are based on management’s current expectations and are subject to risks, uncertain
Slide 3: Summary
Summary Good start to fiscal 2010 First quarter sales, adjusted operating income and EPS exceeded guidance Sales up sequentially 7% led by 17% growth in Electronic Components Sequential order growth of 15% and book-to-bill of 1.09, excluding Undersea, with improvement in both consumer and industrial
Slide 4: Q1 Revenue Summary
Q1 Revenue Summary Electronic Components Consumer and industrial markets improved sequentially due to production increases and inventory replenishment Order rates continued to improve and book-to-bill was 1.11 Network Solutions Reduced capital spending by customers Order rates essentially flat seque
Slide 5: Q1 Revenue by Segment
Q1 Revenue by Segment Electronic Components - Revenue $1,911 Million Network Solutions - Revenue $422 Million Automotive up 30% vs. prior year, up 17% vs. Q4 due to production increases and inventory re-stocking in the supply chain. DataComm down 14% vs. prior year. Revenue up 13% vs. Q4 driven by c
Slide 6: Q1 Revenue by Segment (cont.)
Specialty Products - Revenue $358 Million Undersea Telecom - Revenue $201 Million Revenue down 24% vs. prior year, down 25% sequentially – lower project activity and completion of certain projects as expected. Backlog at quarter-end of $777M. Q1 Revenue by Segment (cont.) Aerospace, Defense & Marine
Slide 7: Q1 Financial Summary
Q1 Financial Summary ($ in Millions, except per share amounts) Adjusted Operating Income, Adjusted Operating Margin and Adjusted EPS are non-GAAP measures; see Appendix for description and reconciliation. Q1 FY10 Q1 FY09 Q4 FY09 Net Sales $2,892 $2,713 $2,698 Operating Income $269 $83 $176 Restructu
Slide 8: Q1 Operating Results
Q1 Operating Results * Gross Margin Reconciliation Operating Expense Performance Q1 2009 SG&A included loss of ~$50 million related to currency hedging activities ~$22 million year-on-year reduction, excluding currency effects Operating Expenses up ~8% vs. Q4 driven by: Increased investment in RD&E
Slide 9: Q1 Other Items
Q1 Other Items Interest Expense Benefit of lower debt level essentially offset by lower interest income Other Income Relates to Tax Sharing Agreement Expect ~$11 million in Q2 Income Taxes on Adjusted Income Expect tax rate of ~28% in Q2 Adjusted Income Tax Expense and Adjusted Effective Tax Rate ar
Slide 10: Q1 Free Cash Flow and Working Capital
Q1 Free Cash Flow and Working Capital Q1 Free Cash Flow driven by: Increased earnings levels and low adjusted cash tax rate of 5% Significant working capital improvement vs. prior year Sequential working capital performance improvement: Receivables ~3 day improvement Inventory ~1 day improvement Pay
Slide 11: Q1 Liquidity and Debt
Q1 Liquidity and Debt * Cash >$500M plus available credit facility ** Calculated in accordance with terms of credit facility ($ in Millions) Liquidity and use of cash: Retaining additional cash for flexibility Dividends $0.16 per share paid in December Share Repurchase Repurchased ~750K shares for $
Slide 12: Q2 Outlook
Q2 Outlook * Assumes current currency exchange rates Sales up 22-26% year over year; flat to 2% growth sequentially End demand has stabilized Components will continue to benefit in Q2 from re-stocking Operating income and margin improvement sequentially as gross margin increase to ~30% Leverage on v
Slide 13: Q & A
Q & A
Slide 14: Appendix
Appendix
Slide 15: Non-GAAP Measures
Non-GAAP Measures “Organic Sales Growth,” “Adjusted Operating Income,” “Adjusted Operating Margin,” “Adjusted Income Tax Expense,” “Adjusted Effective Tax Rate,” “Adjusted Income from Continuing Operations,” “Adjusted Earnings Per Share,” and “Free Cash Flow” (FCF) are non-GAAP measures and should n
Slide 16: Non-GAAP Measures (cont.)
Non-GAAP Measures (cont.) The company has presented income from continuing operations attributable to Tyco Electronics Ltd. before special items including charges related to legal settlements and reserves, restructuring charges, impairment charges, other income or charges and, if applicable, related
Slide 17: Net Sales Growth Reconciliation – Q110 vs. Q109
Net Sales Growth Reconciliation – Q110 vs. Q109 (3) Industry end market information about net sales is presented consistently with our internal management reporting and may be periodically revised as management deems necessary. (2) Represents the change in net sales resulting from changes in foreign
Slide 18: Net Sales Growth Reconciliation – Q110 vs. Q409
Net Sales Growth Reconciliation – Q110 vs. Q409 (3) Industry end market information about net sales is presented consistently with our internal management reporting and may be periodically revised as management deems necessary. (2) Represents the change in net sales resulting from changes in foreign
Slide 19: Reconciliation of Non-GAAP Measures, Quarter Ended December 25, 2009
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Quarter Ended December 25, 2009 Adjustment Restructuring and Other Adjusted U.S. GAAP Charges, Net (1) (Non-GAAP) (2) ($in millions, except per share data) Operating Income: Electronic Components $163 $44 $207 Network S
Slide 20: Reconciliation of Non-GAAP Measures, Quarter Ended December 26, 2008
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Quarter Ended December 26, 2008 Adjustments Restructuring and Other Other Items, Adjusted U.S. GAAP Charges, Net (1) Net (2) (Non-GAAP) (3) ($in millions, except per share data) Operating Income: Electronic Components $