Slide 1: Sensata Second Quarter 2022 Earnings Presentation
SENSATA SECOND QUARTER 2022 EARNINGS PRESENTATION July 26, 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 • Strong Q2-22 revenue outgrowth of 650 bps across all of Sensata exceeded target Outgrowth exceeds • Increased investments leading to new business wins on pace to exceed 2021 record levels; long-term targets over half in Megatrend areas • Received largest new business win
Slide 4: New High Voltage Product Category
NEW HIGH VOLTAGE High Voltage: new Electrification product category PRODUCT CATEGORY already producing significant business wins and High Voltage represents a very large business opportunity Junction Boxes • Power Distribution Units • DC Charging Units >$150M • Battery Disconnect Units battery disco
Slide 5: Q2-22 Financials and 2022 Financial Guidance
Q2-22 FINANCIALS AND 2022 FINANCIAL GUIDANCE
Slide 6: Q2-2022 Financial Summary
Q2-2022 Financial Summary $ in millions, except EPS Q2-2022 Q2-2021 B/(W) • Revenue growth YoY of 2.8% composed of: Revenue $1,020.5 $992.7 2.8 % ◦ Outgrowth of 6.5% offsetting Adjusted Operating Income $193.8 $209.3 (7.4)% market decline of (0.9%) and % Revenue 19.0% 21.1% Q2-21 inventory build of
Slide 7: Q2-2022: Performance Sensing
Q2-2022: Performance Sensing Revenue Segment Operating Income $746.9 $741.9 % operating margin $185.5 $202.1 24.8% 27.2% Q2-22 Q2-21 Q2-22 Q2-21 • Automotive revenue decline reflects unfavorable FX, Q2-22 YoY Revenue Growth Reported Organic inventory build in Q2-21, timing of product shipments and A
Slide 8: Q2-2022: Sensing Solutions
Q2-2022: Sensing Solutions Revenue Segment Operating Income % operating margin $273.7 $250.8 $79.5 $76.5 29.0% 30.5% Q2-22 Q2-21 Q2-22 Q2-21 Q2-22 YoY Revenue Growth Reported Organic • Revenue increase YoY reflects new Electrification Industrial & Other 7.8% 7.7% launches, pricing, and revenue from
Slide 9: Corporate and Other Operating Expenses
Corporate and Other Operating Expenses $ in millions Q2-2022 Q2-2021 B/(W) Corporate and Other $76.4 $74.0 (3.2%) • Adj. Corporate and Other increase primarily due to higher Megatrend investments % Revenue 7.5% 7.5% Adj. Corporate and Other $69.4 $67.7 (2.6%) % Revenue 6.8% 6.8% Megatrend Spend ($ m
Slide 10: Financial position strong with over $1.5B in cash
Sensata's financial position is strong with over $1.5B in cash, a recently expanded credit line of $750M, and no Notes due until Oct '23 Free Cash Flow ($ millions) $410 $273 $0.11 $77M Quarterly Dividend Payment Share Repurchase on Aug 24 for shareholders of record during Q2-22 as of Aug 10, 2022 F
Slide 11: Q3-22 Financial Guidance
Q3-22 Financial Guidance $ in millions, except EPS Q3-22 GUIDANCE Q3-21 B/(W) • Q3-22 end-market growth expected to be Revenue 3% - 7% ~4% YoY $980 – $1,020 $951.0 organic 2% - 6% ◦ Auto: ~13% ◦ HVOR: ~(8%) Adj. Op Income $187 – $199 $201.0 (7%) - (1%) ◦ Industrial: ~(4%) ◦ Aerospace: ~4% Adj. Net I
Slide 12: Updated FY-22 Financial Guidance
Updated FY-22 Financial Guidance $ in millions, except EPS FY-22 GUIDANCE FY-21 B/(W) • 2022 end-market growth now expected to Revenue 4% - 6% be down (1%) overall; macroeconomic $3,970 – $4,050 $3,820.8 organic 3% - 5% factors weighing on production expectations in all markets Adj. Op Income $758 –
Slide 13: Assumptions underlying H2-22 guidance
Assumptions underlying H2-22 guidance ADJUSTED OPERATING MARGIN WALK H1 – H2 2022 OEM PRODUCTION GROWTH RATE EXPECTATIONS 18.8% 0.3% 0.7% 19.6% 6% 4% (0.2%) 2% 1% H1-22 Mat. & Log. Investment Supply H2-22 (1%) inflation, net (MT/M&A) Chain (3%) of recovery Challenges (5%) (9%) Aerospace Industrial H
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 and technology partnerships bps Targeting M&A contribution of 400-600 bps inorganic revenue growth Execute long-term strategy to drive organic revenue g
Slide 15: Appendix A: Other Financial Information
APPENDIX A OTHER FINANCIAL INFORMATION
Slide 16: Q2-2022 GAAP Results
Q2-2022 GAAP Results $ and shares outstanding in millions, except EPS Q2-2022 Q2-2021 B/(W) Revenue $1,020.5 $992.7 2.8 % Gross Profit $333.9 $334.4 (0.1%) (% of revenue) 32.7% 33.7% R&D $48.0 $42.9 (11.8%) (% of revenue) 4.7% 4.3% SG&A $97.3 $86.8 (12.1%) (% of revenue) 9.5% 8.7% Amortization of In
Slide 17: Q2-2022 Non-GAAP Results
Q2-2022 Non-GAAP Results $ and shares outstanding in millions, except EPS Q2-2022 Q2-2021 B/(W) Revenue $1,020.5 $992.7 2.8 % Adj. Gross Profit $335.2 $337.4 (0.7%) (% of revenue) 32.8% 34.0% R&D $48.0 $42.9 (11.8%) (% of revenue) 4.7% 4.3% Adj. SG&A $91.6 $83.6 (9.6%) (% of revenue) 9.0% 8.4% Adj.
Slide 18: Q2-2022 Cash Flow Statement
Q2-2022 Cash Flow Statement $ in millions Q2-2022 Q2-2021 B/(W) Net Income $34.8 $112.9 (69.1%) Depreciation & Amortization $68.2 $66.5 2.5% Changes in Working Capital ($40.0) ($20.8) (92.5%) Other $31.6 $4.8 NM Operating Cash Flow $94.5 $163.4 (42.2%) Capital Expenditures ($38.4) ($36.4) (5.4%) Fre
Slide 19: Balance Sheet
Balance Sheet $ in millions JUN 30, 2022 DEC 31, 2021 Total Assets $8,606.7 $8,613.8 Working Capital $2,232.6 $2,240.7 Intangibles, Net & Other Long-Term Assets $5,486.9 $5,536.8 $ in millions JUN 30, 2022 DEC 31, 2021 Cash & Equivalents $1,558.6 $1,709.0 Current Debt $6.6 $6.8 Net Cash $1,552.0 $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 2Q 2022 1Q 2022 4Q 2021 3Q 2021 2Q 2021 Net income $ 254,213 $ 34,841 $ 22,441 $ 111,972 $ 84,959 $ 112,916 Interest expense, net 180,322 44,842 45,445 44,898 45,137 45,213 Provision for income taxes 50,026 20,020 7,588 578 21,840 7,638 Depreci
Slide 24: Organic Revenue Growth
Organic Revenue Growth Q2-2022 0 Constant Currency % Reported % Change Less: Acquisition & Organic Growth Less: FX Impact Change (GAAP) Divestitures, net (non-GAAP) (non-GAAP) Performance Sensing 0.7% (2.2%) 2.9% 3.0% (0.1%) Sensing Solutions 9.1% (1.9%) 11.0% 2.0% 9.0% Sensata Total 2.8% (2.2%) 5.0
Slide 25: Free Cash Flow
Free Cash Flow $ in thousands Q2 Q2 YTD Total Sensata 2022 2021 Change 2022 2021 Change Net cash provided by operating activities $ 94,533 $ 163,420 (42.2%) $ 141,888 $ 267,931 (47.0%) Additions to property, plant and equipment and (38,358) (36,400) (5.4%) (74,069) (63,572) (16.5%) capitalized softw
Slide 26: Net Debt and Net Leverage Ratio
Net Debt and Net Leverage Ratio $ in thousands As of Total Sensata 6/30/2022 3/31/2022 12/31/2021 9/30/2021 6/30/2021 Current portion of long-term debt, finance lease and other financing $ 6,566 $ 6,694 $ 6,833 $ 6,632 $ 7,281 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 Q2 Q2 YTD Total Sensata 2022 2021 2022 2021 Provision for income taxes $ 20,020 $ 7,638 $ 27,608 $ 27,919 Non-GAAP adjustments: Deferred income tax and other tax expense 9,669 (6,200) 1,334 3,922 Current tax effect of non-GAAP adjustments (4,499) (
Slide 28: Other GAAP to Non-GAAP Reconciliations
Other GAAP to non-GAAP Reconciliations $ in thousands (except EPS amounts) Q2-2022 Q2-2021 Operating Operating Operating Operating Total Sensata Net Income EPS Net Income EPS Income Margin Income Margin Reported (GAAP) $ 138,943 13.6% $ 34,841 $ 0.22 $ 164,755 16.6% $ 112,916 $ 0.71 Non-GAAP adjustm