Te Connectivity Plc · NYSE:TEL
Te Connectivity — Tyco Electronics — Merrill Lynch Technology Conference 2008
27 slides from Te Connectivity's conference presentation, May 6, 2008
Slide 1: Tyco Electronics Merrill Lynch Technology Conference 2008
Tyco Electronics Merrill Lynch Technology Conference 2008 Terrence Curtin Executive Vice President & Chief Financial Officer May 6, 2008
Slide 2: Forward-Looking Statement / Non-GAAP Measures
Page 2 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 are subject to risks, uncertainty and changes in circumstances, which may cause
Slide 3: Tyco Electronics Overview
Page 3 Tyco Electronics Overview • A leading global provider of engineered electronic components, network infrastructure solutions, undersea telecommunication systems and wireless systems • Global leader in attractive, growing industries • Diverse customer base and industry base • Global reach and s
Slide 4: Market dynamics should continue to drive above-GDP growth
Page 4 Market dynamics should continue to drive above-GDP growth Market Drivers • Electronic feature growth in all industries • Miniaturization and higher data-speed requirements • Broadband and wireless proliferation • Upgrade of global energy networks “Dot Com” Bubble & Bust 27 Year historical CAG
Slide 5: Broad Industry Diversification
Page 5 Computer 9 % Automotive 31% Telecommunications 16 % Aerospace & Defense 5% Household Appliance 5% Energy 7% Consumer Electronics 2% Other 13% Instrumentation 2% Commercial & Building Equipment 2% Industrial 4% Building Networks 4% Sales by Industry* Broad Industry Diversification 2007 Total S
Slide 6: Approximately 40% of Sales Come From Long-Cycle Markets
Page 6 Consumer Markets Approx. 60% Infrastructure / Industrial Markets – Approx. 40% Approximately 40% of Sales Come From Long-Cycle Markets 2007 Total Sales: $13.0 Billion • Automotive • Computer • Mobile Phone • Appliance • Consumer Electronics • A & D • Comm. Equip. • Industrial • Energy • Comm.
Slide 7: Global Reach and Scale
Page 7 Asia ex- China 16% China 12% Europe 37% Americas 35% Asia ex- China 16% China 12% Europe 37% Americas 35% Sales by Geography Asia Total 28% Global Reach and Scale • Balanced geographic presence • Located near our customers – 7,000+ engineers – 17 global design centers – 5,000+ salespeople ser
Slide 8: Organized in Four Business Segments
Page 8 2008 YTD Sales $7.2 Billion Electronic Components 75% Network Solutions 14% Undersea Telecomm 8% Wireless Systems 3% Organized in Four Business Segments * See Appendix for description of “Adjusted Operating Income” and reconciliation to GAAP operating income 2008 YTD Adj. Operating Income* $1
Slide 9: Our Strong Cash Flow Gives Us Flexibility and Choices
Page 9 $1,028 $1,111 $837 $0 $200 $400 $600 $800 $1,000 $1,200 $1,400 2005 2006 2007 $1,028 $1,111 $837 $0 $200 $400 $600 $800 $1,000 $1,200 $1,400 2005 2006 2007 • Fund organic investments – Emerging / high growth markets – State of NY wireless project – Footprint simplification • Return capital to
Slide 10: Strategic Priorities
Page 10 Strategic Priorities • Organic sales growth* of 5-7% • Operating margins above 15% • Free cash flow approximately equal to net income** 3-Year Objectives Year Objectives * See Appendix for description of “Organic Sales Growth,” a non-GAAP measure ** Before dividends and cash outflows to buil
Slide 11: First Half Performance
Page 11 First Half Performance * See Appendix for description and reconciliation of “Adjusted Operating Income”, “Adjusted Earnings Per Share”, “Free Cash Flow” and “Organic Sales Growth” • Sales growth in Industrial and Infrastructure markets including Undersea Telecommunications, Wireless Systems,
Slide 12: 2008 Outlook
Page 12 2008 Outlook 15% to 17% 14% to 16% Sales Growth Approx. $0.03 Approx. $0.17 Restructuring Costs per Share •Strength in industrial and infrastructure markets •Lower tax rate and higher Other Income vs. prior year • Strength in industrial and infrastructure markets •Strength in international m
Slide 13: Tyco Electronics Summary
Page 13 A solid foundation with significant opportunity Tyco Electronics Summary • A leading global provider of engineered electronic components, network infrastructure solutions, undersea telecommunication systems and wireless systems • Global leader in attractive, growing industries • Diverse cust
Slide 14: Appendix
Appendix E ayco Electronics
Slide 15: Electronic Components Overview
Page 15 Sales by Industry* Sales by Product 40% 12% 9% 14% 2% 6% 5% 3% 2% 7% Automotive Computer Telecommunications Aerospace & Defense Household Appliance Industrial Machinery Instrumentation Consumer Electronics Commercial Bldg & Equip Other 40% 12% 9% 14% 2% 6% 5% 3% 2% 7% Automotive Computer Tel
Slide 16: Network Solutions Overview
Page 16 Sales by Industry* Sales by Product Communication Service Providers 31% Building Networks 25% Heat Shrink Tubing 23% Wire & Cable 11% Racks & Panels 7% Fiber Optics 12% Other 3% Connectors/ Cable Assemblies 44% Sales by Geography EMEA 55% Americas 30% Asia Pacific 15% Energy 44% Network Solu
Slide 17: Undersea Telecommunications Overview
Page 17 Quarterly Sales Trends Undersea Telecommunications Overview • A world leader in developing, manufacturing, installing and maintaining the world’s most advanced undersea fiber optic networks • Sales of $0.6 billion in 2007 $0 $50 $100 $150 $200 $250 $300 $350 1Q05 3Q05 1Q06 3Q06 1Q07 3Q07 1Q0
Slide 18: Wireless Systems Overview
Page 18 Wireless Systems Overview • A leading innovator of wireless technology for critical communications systems and equipment – Sales of $0.4 billion in 2007 Appendix Operations & Maintenance Radio Products Revenue Model for a Typical Project Networks 62% Radios & Accessories 30% Operations & Mai
Slide 19: Non-GAAP Measures
Page 19 NON-GAAP Measures Appendix “Organic Sales Growth,” “Adjusted Operating Income,” “Adjusted Earnings Per Share,” “Adjusted Operating Margin,” and “Free Cash Flow” (FCF) are non- GAAP measures and should not be considered replacements for GAAP results. “Organic Sales Growth” is a useful measure
Slide 20: 2007 Income Reconciliation
Page 20 2007 Income Reconciliation Appendix Footnotes explained on next page Restructuring Allocated and Other Separation Class Action Charges, Net Adjusted Related Settlement and Related Other Items, Results US GAAP Costs (1) Costs, Net Costs (2) Net (3) (Non-GAAP) (4) Net sales 12,959 $ - $ - $ -
Slide 21: 2007 Segment Operating Income Reconciliation
Page 21 2007 Segment Operating Income Reconciliation Appendix Restructuring Allocated and Other Separation Class Action Charges, Net Adjusted Related Settlement and Related Other Items, Results US GAAP Costs (1) Costs, Net Costs (2) Net (3) (Non-GAAP) (4) Income from Operations: Electronic Component
Slide 22: Free Cash Flow
Page 22 Free Cash Flow Appendix “Free Cash Flow” (FCF) is a useful measure of the company’s cash generation which is free from any significant existing obligation. The difference between cash flows from operating activities (the most comparable GAAP measure) and FCF (the non-GAAP measure) consists m
Slide 23: Income Reconciliation – Six Months ended March 28, 2008
Page 23 Appendix Income Reconciliation – 6 Months ended March 28, 2008 Restructuring Adjusted and Other Tax Sharing Other Items, Results US GAAP Charges, Net Income (1) Net (2) (Non-GAAP) (3) Net sales 7,220 $ - $ - $ - $ 7,220 $ Cost of sales 5,358 (1) - - 5,357 Gross income 1,862 1 - - 1,863 Selli
Slide 24: Segment Operating Income Reconciliation – Six Months ended March 28, 2008
Page 24 Segment Operating Income Reconciliation – 6 Months ended March 28, 2008 Appendix Restructuring Adjusted and Other Tax Sharing Other Items, Results US GAAP Charges, Net Income (1) Net (2) (Non-GAAP) (3) Income from Operations: Electronic Components 771 $ 30 $ - $ (36) $ 765 $ Network Solution
Slide 25: Income Reconciliation – Six Months ended March 30, 2007
Page 25 Income Reconciliation – 6 Months ended March 30, 2007 Appendix Separation Restructuring Adjusted Related and Other Results US GAAP Costs (1) Charges, Net (Non-GAAP) (2) Net sales 6,179 $ - $ - $ 6,179 $ Cost of sales 4,560 - - 4,560 Gross income 1,619 - - 1,619 Selling, general, and administ
Slide 26: Free Cash Flow – Six Months 2008 vs 2007
Page 26 Free Cash Flow – 6 Months 2008 vs 2007 Appendix “Free Cash Flow” (FCF) is a useful measure of the company’s cash generation which is free from any significant existing obligation. The difference between cash flows from operating activities (the most comparable GAAP measure) and FCF (the non-
Slide 27: Organic Sales Growth – Six Months ended March 28, 2008
Page 27 Appendix Organic Sales Growth – 6 Months ended March 28, 2008 Translation (2) Electronic Components (3): Automotive 96 $ 5.0 % 180 $ 276 $ 14.3 % 41 % Computer (29) (5.6) 18 (11) (2.1) 10 Communications 68 17.9 27 95 25.2 9 Industrial 39 14.2 25 64 23.3 6 Appliance (12) (4.6) 16 4 1.6 5 Aero
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