Slide 1: TE Connectivity Third Quarter 2023 Earnings
TE Connectivity Third Quarter 2023 Earnings July 26, 2023 EVERY CONNECTION COUNTS
Slide 2: Forward-Looking Statements and Non-GAAP Financial Measures
Forward-Looking Statements and Non-GAAP Financial 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 a
Slide 3: Earnings Highlights
Earnings Highlights Q3 Sales in line with Expectations & Adjusted EPS Exceeding Guidance • Sales of $4.0B, with Y/Y organic growth in the Transportation and Industrial Segments • Transportation up 7% organically Y/Y, with growth in all businesses • Industrial up 2% organically Y/Y, with growth in AD
Slide 4: Segment Orders Summary
Segment Orders Summary ($ in millions) Reported FY22 FY23 FY23 Q3 Growth Q3 Q2 Q3 Y/Y Q/Q • Transportation book to bill of 0.98, Transportation 2,303 2,412 2,374 3% (2)% reflecting ongoing stable demand • Industrial book to bill of 1.04, reflecting ongoing strength in AD&M, Industrial 1,312 1,193 1,
Slide 5: Transportation Solutions
Transportation Solutions $ in Millions Q3 Sales Q3 Business Performance Reported Y/Y Growth Rates Reported Organic Up 6% Automotive $1,747 7% 9% $2,300 $2,433 Commercial Organic 403 1% 2% Transportation Up 7% Sensors 283 4% 4% Q3 2022 Q3 2023 Transportation $2,433 6% 7% Solutions Q3 Adjusted Operati
Slide 6: Industrial Solutions
Industrial Solutions $ in Millions Q3 Sales Q3 Business Performance Reported Y/Y Growth Rates Reported Organic Up 1% Industrial Equipment $423 (10)% (10)% $1,126 $1,141 Aerospace, Defense Organic 293 8% 13% and Marine Up 2% Energy 230 11% 8% Q3 2022 Q3 2023 Medical 195 10% 11% Industrial Solutions $
Slide 7: Communications Solutions
Communications Solutions $ in Millions Q3 Sales Q3 Business Performance Reported Y/Y Growth Rates Reported Organic Down 37% Data & Devices $252 (41)% (41)% $671 Appliances 172 (30)% (29)% Organic $424 Down 37% Communications $424 (37)% (37)% Solutions Q3 2022 Q3 2023 Q3 Adjusted Operating Margin • D
Slide 8: Q3 Financial Summary
Q3 Financial Summary ($ in Millions, except per share amounts) Q3 FY22 Q3 FY23 Net Sales $ 4,097 $ 3,998 Operating Income $ 719 $ 630 Operating Margin 17.5% 15.8% Acquisition-Related Charges 12 9 Restructuring & Other Charges, Net* 30 53 Adjusted Operating Income $ 761 $ 692 Adjusted Operating Margi
Slide 9: Q3 Financial Performance
Q3 Financial Performance Sales Adjusted Operating Margin $ in Millions $4,097 $4,160 $3,998 18.6% 16.0% 17.3% Q3 2022 Q2 2023 Q3 2023 Q3 2022 Q2 2023 Q3 2023 Adjusted EBITDA 23.6% 20.9% 22.3% Margin Adjusted EPS Free Cash Flow $ in Millions +40% Y/Y $1.86 $1,459 ~$1.2B $1.65 $1.77 $1,038 returned to
Slide 10: Additional Information
Additional Information EVERY CONNECTION COUNTS
Slide 11: Y/Y Q3 2023 Sales and Adjusted EPS
Y/Y Q3 2023 Sales Adjusted EPS (in millions) Q3 2022 Results $4,097 $1.86 Operational Performance (57) (0.06) FX Impact (42) (0.05) Tax Rate Impact - 0.02 Q3 2023 Results $3,998 $1.77 11 Adjusted EPS is a non-GAAP financial measure; see Appendix for description and reconciliation
Slide 12: Y/Y Q4 2023 Sales and Adjusted EPS Guidance
Y/Y Q4 2023 Sales Adjusted EPS (in millions) Q4 2022 Results (13 weeks)* $4,053 $1.75 Operational Performance (121) 0.01 FX Impact 68 (0.02) Tax Rate Impact - 0.01 Q4 2023 Guidance $4,000 $1.75 * Note: Q4 FY22 13 week does not include the impact of the additional week which contributed sales of $306
Slide 13: Q3 Balance Sheet & Cash Flow Summary
Q3 Balance Sheet & Cash Flow Summary Free Cash Flow and Working Capital Liquidity, Cash & Debt ($ in Millions) Q3 2022 Q3 2023 ($ in Millions) Q3 2022 Q3 2023 Cash from Operating Activities $579 $779 Beginning Cash Balance $749 $905 Free Cash Flow 423 614 Capital expenditures, net (170) (165) Divide
Slide 14: Appendix
Appendix EVERY CONNECTION COUNTS
Slide 15: Non-GAAP Financial Measures
Non-GAAP Financial Measures We present non-GAAP performance and liquidity measures as we believe it is appropriate for investors to consider adjusted financial measures in addition to results in accordance with accounting principles generally accepted in the U.S. (“GAAP”). These non-GAAP financial m
Slide 16: Non-GAAP Financial Measures (cont.)
Non-GAAP Financial Measures (cont.) • Adjusted EBITDA and Adjusted EBITDA Margin - represent net income and net income as a percentage of net sales, respectively, (the most comparable GAAP financial measures) before interest expense, interest income, income taxes, depreciation, and amortization, as
Slide 17: Segment Summary
Segment Summary For the Q uarte rs Ende d For the Nine Months Ende d June 30, June 24, June 30, June 24, 2023 2022 2023 2022 ($ in millions) Ne t Sale s Ne t Sale s Ne t Sale s Ne t Sale s Transportation Solutions $ 2,433 $ 2,300 $ 7,175 $ 6,772 Industrial Solutions 1,141 1,126 3,392 3,246 Communica
Slide 18: Reconciliation of Net Sales Growth
Reconciliation of Net Sales Growth Change in Ne t Sale s for the Q uarte r Ende d June 30, 2023 ve rsus Ne t Sale s for the Q uarte r Ende d June 24, 2022 Ne t Sale s O rganic Ne t Sale s Acquisitions/ Growth (De cline ) Growth (De cline ) (1) Translation (2) (Dive stiture ) ($ in millions) Transpor
Slide 19: Non-GAAP Reconciliation, Quarter Ended June 30, 2023
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Quarter Ended June 30, 2023 Adjustme nts Acquisition- Re structuring Re late d and O the r Adjuste d U.S. GAAP Charge s (1) Charge s, Ne t (1) (Non-GAAP) (2) ($ in millions, e xce pt pe r share data) Operating income: T
Slide 20: Non-GAAP Reconciliation, Quarter Ended June 24, 2022
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Quarter Ended June 24, 2022 Adjustme nts Acquisition- Re structuring Re late d and O the r Adjuste d U.S. GAAP Charge s (1) Charge s, Ne t (1)(2) Tax Ite ms (3) (Non-GAAP) (4) ($ in millions, e xce pt pe r share data) O
Slide 21: Non-GAAP Reconciliation, Nine Months Ended June 30, 2023
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Nine Months Ended June 30, 2023 Adjustme nts Acquisition- Re structuring Re late d and O the r Adjuste d U.S. GAAP Charge s (1) Charge s, Ne t (1) (Non-GAAP) (2) ($ in millions, e xce pt pe r share data) Operating incom
Slide 22: Non-GAAP Reconciliation, Nine Months Ended June 24, 2022
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Nine Months Ended June 24, 2022 Adjustme nts Acquisition- Re structuring Re late d and O the r Adjuste d U.S. GAAP Charge s (1) Charge s, Ne t (1)(2) Tax Ite ms (3) (Non-GAAP) (4) ($ in millions, e xce pt pe r share dat
Slide 23: Non-GAAP Reconciliation, Quarter Ended September 30, 2022
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Quarter Ended September 30, 2022 Adjustme nts Acquisition- Re structuring Re late d and O the r Adjuste d U.S. GAAP Charge s (1) Charge s, Ne t (1) Tax Ite ms (2) (Non-GAAP) (3) ($ in millions, e xce pt pe r share data)
Slide 24: Non-GAAP Reconciliation, Year Ended September 30, 2022
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Year Ended September 30, 2022 Adjustme nts Acquisition- Re structuring Re late d and O the r Adjuste d U.S. GAAP Charge s (1) Charge s, Ne t (1)(2) Tax Ite ms (3) (Non-GAAP) (4) ($ in millions, e xce pt pe r share data)
Slide 25: Non-GAAP Reconciliation, Quarter Ended March 1, 2023
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Quarter Ended March 31, 2023 Adjustme nts Acquisition- Re structuring Re late d and O the r Adjuste d U.S. GAAP Charge s (1) Charge s, Ne t (1) (Non-GAAP) (2) ($ in millions, e xce pt pe r share data) Operating income:
Slide 26: Reconciliation of Free Cash Flow
Reconciliation of Free Cash Flow For the Q uarte rs Ende d For the Nine Months Ende d June 30, June 24, June 30, June 24, 2023 2022 2023 2022 (in millions) Net cash provided by operating activities $ 779 $ 579 $ 1,994 $ 1,524 Net cash used in investing activities (169) (185) (573) (568) Net cash use
Slide 27: Reconciliation of Adjusted EBITDA and Adjusted EBITDA Margin
Reconciliation of Adjusted EBITDA and Adjusted EBITDA Margin For the Q uarte rs Ende d June 30, March 31, June 24, 2023 2023 2022 ($ in millions) Net income $ 528 $ 433 $ 594 Income from discontinued operations — (8) (2) Income tax expense 96 100 116 Other (income) expense, net 4 4 (4) Interest expe
Slide 28: Impact of Additional Week on Net Sales - QTD
Impact of Additional Week on Net Sales - QTD For the Q uarte r Ende d Se pte mbe r 30, 2022 Adjustme nt 14 We e ks Impact of 13 We e ks U.S. GAAP 14th We e k (Non-GAAP) (1)(2) (in millions) Net Sales $ 4,359 $ (306) $ 4,053 (1) Excludes the impact of an additional week in the fourth quarter of fisca
Slide 29: Impact of Additional Week on EPS - QTD
Impact of Additional Week on EPS - QTD Adjustme nts Adjustme nt Acquisition- Re structuring 14 We e ks 13 We e ks Re late d and O the r Adjuste d Impact of Adjuste d U.S. GAAP Charge s (1) Charge s, Ne t (1) Tax Ite ms (2) (Non-GAAP) (3) 14th We e k (Non-GAAP) (3)(4) Diluted earnings per share from
Slide 30: Reconciliation of Forward-Looking Non-GAAP Financial Measures
Reconciliation of Forward-Looking Non-GAAP Financial Measures to Forward-Looking GAAP Financial Measures O utlook for Q uarte r Ending Se pte mbe r 29, O utlook for 2023 (1) Fiscal 2023 (1) Diluted earnings per share from continuing operations $ 1.63 Restructuring and other charges, net 0.10 Acquisi