Slide 1: TE Connectivity Second Quarter 2024 Earnings
TE Connectivity Second Quarter 2024 Earnings April 24, 2024 EVERY CONNECTION COUNTS
Slide 2: Forward-Looking Statements and Non-GAAP Financial Measures
Forward-Looking Statements and Non-GAAP Financial Measures Forward-Looking Statements (“COVID-19”) negatively affecting our business operations; business, economic, This presentation contains certain "forward-looking statements" within the competitive and regulatory risks, such as conditions affecti
Slide 3: Earnings Highlights
Earnings Highlights 13% Adjusted EPS growth Y/Y in Q2 driven by Adjusted Operating Margin expansion of 250bps Q2 Sales in line with guidance at $3.97B, up 3% organically on a sequential basis Sales down 5% reported and 3% organically Y/Y as expected with each segment in line with our expectation
Slide 4: Segment Orders Summary
Segment Orders Summary ($ in millions) FY23 FY24 FY24 Q2 Growth Reported Q2 Q1 Q2 Y/Y Q/Q Transportation orders reflecting ongoing stable global Transportation 2,412 2,247 2,288 (5)% 2% Auto production with incremental weakness in Commercial Transportation markets Industrial 1,193 1,122 1,197 0% 7
Slide 5: Transportation Solutions
Transportation Solutions $ in Millions Automotive Q2 SALES Q2 BUSINESS PERFORMANCE Organic growth in China offset by declines in North America & Europe. Our Reported Y/Y Growth Reported Organic Rates performance continues to be Down 4% driven by our leading global $2,483 $2,384 Automotive $1,749 (
Slide 6: Industrial Solutions
Industrial Solutions $ in Millions Industrial Equipment Decline driven by continued Q2 SALES Q2 BUSINESS PERFORMANCE impact of destocking in our customers’ supply chain Reported Y/Y Growth Reported Organic AD&M Down 4% Rates Organic growth reflects Industrial $1,191 $1,143 $356 (23)% (28)% Equip
Slide 7: Communications Solutions
Communications Solutions $ in Millions Data & Devices Q2 SALES Q2 BUSINESS PERFORMANCE Q2 decline driven by destocking in our Reported customers’ supply chain; Down 10% Y/Y Growth Rates Reported Organic continue to see strong momentum in Cloud and $486 Data & Devices $273 (5)% (4)% Organic $440 AI
Slide 8: Q2 Financial Summary
Q2 Financial Summary ($ in Millions, except per share amounts) Q2 FY23 Q2 FY24 Net Sales $ 4,160 $ 3,967 Operating Income $ 537 $ 692 Operating Margin 12.9% 17.4% Acquisition-Related Charges 8 3 Restructuring & Other Charges, Net 119 40 Adjusted Operating Income $ 664 $ 735 Adjusted Operating Margin
Slide 9: Q2 Financial Performance
Q2 Financial Performance SALES ADJUSTED OPERATING MARGIN $ in Billions Sales down 250bps of 5% Y/Y margin $4.2 $4.0 18.5% expansion 16.0% Q2 2023 Q2 2024 Q2 2023 Q2 2024 ADJUSTED EPS FREE CASH FLOW $ in Millions Up 32% Up 13% Y/Y Y/Y driven by $1.86 margin $1,113 $1.65 $845 expansion Q2 2023 Q2 2024
Slide 10: Additional Information
Additional Information EVERY CONNECTION COUNTS
Slide 11: Y/Y Q2 2024 Sales and Adjusted EPS
Y/Y Q2 2024 Sales Adjusted EPS (in millions) Q2 2023 Results $4,160 $1.65 Operational Performance (143) 0.31 FX Impact (50) (0.07) Tax Rate Impact - (0.03) Q2 2024 Results $3,967 $1.86 11 Adjusted Earnings Per Share is a non-GAAP financial measure; see Appendix for description and reconciliation.
Slide 12: Y/Y Q3 2024 Sales and Adjusted EPS
Y/Y Q3 2024 Sales Adjusted EPS (in millions) Q3 2023 Results $3,998 $1.77 Operational Performance 65 0.23 FX Impact (63) (0.06) Tax Rate Impact - (0.09) Q3 2024 Guidance $4,000 $1.85 12 Adjusted Earnings Per Share is a non-GAAP financial measure; see Appendix for description and reconciliation.
Slide 13: Q2 Balance Sheet and Cash Flow Summary
Q2 Balance Sheet and Cash Flow Summary Free Cash Flow and Working Capital Liquidity, Cash and Debt ($ in Millions) Q2 2023 Q2 2024 ($ in Millions) Q2 2023 Q2 2024 Cash from Operating Activities $634 $710 Beginning Cash Balance $793 $1,170 Free Cash Flow 446 543 Capital expenditures, net (188) (167)
Slide 14: Appendix
Appendix EVERY CONNECTION COUNTS
Slide 15: Non-GAAP Financial Measures
Non-GAAP Financial Measures We present non-GAAP performance and liquidity measures as Organic Net Sales Growth (Decline) – represents net sales Adjusted Income Tax (Expense) Benefit and Adjusted we believe it is appropriate for investors to consider adjusted growth (decline) (the most comparable
Slide 16: Non-GAAP Financial Measures (cont.)
Non-GAAP Financial Measures (cont.) Adjusted EBITDA and Adjusted EBITDA Margin – property, plant, and equipment. These items are subtracted represent net income and net income as a percentage of net because they represent long-term commitments. In the sales, respectively, (the most comparable GAAP
Slide 17: Segment Summary
Segment Summary For the Q uarte rs Ende d For the Six Months Ende d March 29, March 31, March 29, March 31, 2024 2023 2024 2023 ($ in millions) Ne t Sale s Ne t Sale s Ne t Sale s Ne t Sale s Transportation Solutions $ 2,384 $ 2,483 $ 4,757 $ 4,742 Industrial Solutions 1,143 1,191 2,168 2,251 Commun
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 March 29, 2024 ve rsus Ne t Sale s for the Q uarte r Ende d March 31, 2023 Ne t Sale s O rganic Ne t Sale s Acquisitions/ Growth (De cline ) Growth (De cline ) (1) Translation (2) (Dive stiture s) ($ in millions) Trans
Slide 19: Reconciliation of Net Sales Growth - Sequential
Reconciliation of Net Sales Growth - Sequential Change in Ne t Sale s for the Q uarte r Ende d March 29, 2024 ve rsus Ne t Sale s for the Q uarte r Ende d De ce mbe r 29, 2023 Ne t Sale s O rganic Ne t Sale s Acquisitions/ (1) (2) Growth Growth Translation (Dive stiture ) ($ in millions) Total $ 136
Slide 20: Reconciliation to GAAP, Quarter Ended March 29, 2024
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Quarter Ended March 29, 2024 Adjustme nts Acquisition- Re structuring Re late d and O the r Adjuste d (1) (1) U.S. GAAP Charge s Charge s, Ne t (Non-GAAP) (2) ($ in millions, e xce pt pe r share data) Operating income:
Slide 21: Reconciliation to GAAP, Quarter Ended March 31, 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 (1) (1) U.S. GAAP Charge s Charge s, Ne t (Non-GAAP) (2) ($ in millions, e xce pt pe r share data) Operating income:
Slide 22: Reconciliation to GAAP, Six Months Ended March 29, 2024
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Six Months Ended March 29, 2024 Adjustme nts Acquisition- Re structuring Re late d and O the r Adjuste d (1) (1) (2) U.S. GAAP Charge s Charge s, Ne t Tax Ite ms (Non-GAAP) (3) ($ in millions, e xce pt pe r share data)
Slide 23: Reconciliation to GAAP, Six Months Ended March 31, 2023
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Six Months Ended March 31, 2023 Adjustme nts Acquisition- Re structuring Re late d and O the r Adjuste d (1) (1) U.S. GAAP Charge s Charge s, Ne t (Non-GAAP) (2) ($ in millions, e xce pt pe r share data) Operating incom
Slide 24: Reconciliation to GAAP, Quarter Ended June 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 (1) (1) U.S. GAAP Charge s Charge s, Ne t (Non-GAAP) (2) ($ in millions, e xce pt pe r share data) Operating income: T
Slide 25: Reconciliation to GAAP, Year Ended September 29, 2023
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Year Ended September 29, 2023 Adjustme nts Acquisition- Re structuring Re late d and O the r Adjuste d (1) (1) (2) U.S. GAAP Charge s Charge s, Ne t Tax Ite ms (Non-GAAP) (3) ($ in millions, e xce pt pe r share data) Op
Slide 26: Reconciliation of Free Cash Flow
Reconciliation of Free Cash Flow For the Q uarte rs Ende d For the Six Months Ende d March 29, March 31, March 29, March 31, 2024 2023 2024 2023 (in millions) Net cash provided by operating activities $ 710 $ 634 $ 1,429 $ 1,215 Net cash used in investing activities (159) (139) (627) (404) Net cash
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 March 29, March 31, 2024 2023 ($ in millions) Net income $ 541 $ 433 Income from discontinued operations — (8) Income tax expense 146 100 Other expense, net 5 4 Interest expense 19 20 Interest income (19) (12) Ope
Slide 28: 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 O utlook for Q uarte r Ending Q uarte r Ending June 28, Se pte mbe r 27, 2024 (1) 2024 (1) Diluted earnings per share from continuing operations $ 1.71 Restructuring and other charge