Slide 1: Sensata Second Quarter 2024 Earnings Presentation
Sensata Second Quarter 2024 Earnings Presentation July 2024
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 Q2-2024
Key Performance Highlights Q2-2024 • Revenue of $1,036M is an increase of approximately 3% sequentially from Q1-2024 Delivered financial • Adj. Operating Income of $197M or 19.0% of revenue is up 30 basis points from 18.7% in results in line with Q1-2024 expectations • On a constant currency basis,
Slide 4: New business wins across diverse end markets continue to deliver market outgrowth
New business wins across diverse end markets continue to deliver market outgrowth in a challenging economic environment • S&P Global projecting market down ~2% for • HVAC & Appliance recovery lagging due to 2024 – decrease of 0.8M units since June destocking and slower housing construction 2024 and
Slide 5: Segment mix continues to challenge adjusted operating margin
Segment mix continues to challenge adjusted operating margin as Automotive outgrows Industrial due to market down-cycle Revenue Mix Year over year changes in revenue mix Automotive outgrowth over Industrial Aerospace negatively impacted margins in Q1-2024 accelerated in Q2-2024 26% 26% 25% 26% Indus
Slide 6: Q2-2024 Financials and Q3-2024 Financial Guide
Q2-2024 FINANCIALS AND Q3-2024 FINANCIAL GUIDE
Slide 7: Q2-2024 Financial Summary
Q2-2024 Financial Summary Q2 results in line with midpoint of $ in millions, except EPS Q2-2024 Q2-2023 YoY B/(W) previously provided guidance ranges Revenue $1,035.5 $1,062.1 (2.5)% Revenue decreased 2.5% year over year Adjusted Operating Income $196.7 $205.7 (4.4)% • On a constant currency basis,
Slide 8: Q2-24 Segment Performance
Q2-24 Segment Performance Revenue Growth Segment $ in millions Q2-2024 Q2-2023 YoY B/(W) Reported Organic Performance Net Revenue $723.9 $693.6 $30.4 4.4 % 6.1 % Performance Sensing revenue Sensing(1) increases as Automotive and Adj. Operating Margin $177.0 $180.4 -$3.4 HVOR businesses deliver stron
Slide 9: Capital deployment strategy, including repayment of debt, is improving ROIC
Capital deployment strategy, including repayment of debt, is improving ROIC Free Cash Flow ($ millions) 163 128 $0.12 3.2x Quarterly Dividend Payment Net Leverage Ratio on August 28, 2024 for shareholders as of June 30, 2024 of record as of August 14, 2024 <3x expected by December 31, 2024 Q2 YTD 20
Slide 10: Q3-24 Financial Guidance
Q3-24 Financial Guidance $ in millions, except EPS Q3-24 GUIDANCE Q3-23 B/(W) Revenue flat to down 3% year on year primarily driven by an expectation to exit Revenue (3%) - 0% $30M of underperforming products in Q3. $970 – $1,000 $1,001.3 organic (3%) - 0% Revenue for Q4-2024 expected to be in Adj.
Slide 11: Appendix A: Other Financial Information
APPENDIX A: OTHER FINANCIAL INFORMATION
Slide 12: Q2-2024 GAAP Results
Q2-2024 GAAP Results $ and shares outstanding in millions, except EPS Q2-2024 Q2-2023 B/(W) Revenue $1,035.5 $1,062.1 (2.5)% Gross Profit $311.1 $330.0 (5.7)% (% of revenue) 30.0% 31.1% R&D $45.3 $44.9 (1.0)% (% of revenue) 4.4% 4.2% SG&A $93.3 $91.3 (2.1)% (% of revenue) 9.0% 8.6% Amortization of I
Slide 13: Q2-2024 Non-GAAP Results
Q2-2024 Non-GAAP Results $ and shares outstanding in millions, except EPS Q2-2024 Q2-2023 B/(W) Revenue $1,035.5 $1,062.1 (2.5)% Adj. Gross Profit $325.9 $341.1 (4.5)% (% of revenue) 31.5% 32.1% R&D $45.3 $44.9 (1.0)% (% of revenue) 4.4% 4.2% Adj. SG&A $82.2 $89.1 7.7 % (% of revenue) 7.9% 8.4% Adj.
Slide 14: Q2-2024 Cash Flow Statement
Q2-2024 Cash Flow Statement $ in millions Q2-2024 Q2-2023 B/(W) Net Income $71.7 $49.1 46.0 % Depreciation & Amortization $72.6 $87.2 16.7 % Changes in Working Capital ($5.1) ($46.4) 89.0 % Other $4.3 $25.9 (83.5)% Operating Cash Flow $143.5 $115.8 23.9 % Capital Expenditures ($45.1) ($47.6) 5.3 % F
Slide 15: Balance Sheet
Balance Sheet $ in millions JUN 30, 2024 DEC 31, 2023 Total Assets $ 8,189.4 $ 7,681.0 Working Capital $ 1,178.1 $ 1,278.7 Intangibles, Net & Other Long-Term Assets $ 5,489.8 $ 5,578.6 $ in millions JUN 30, 2024 DEC 31, 2023 Cash & Equivalents $ 1,033.1 $ 508.1 Current Debt $ 702.7 $ 2.3 Net Cash $
Slide 16: Appendix B: GAAP to Non-GAAP Reconciliations
APPENDIX B: GAAP TO NON-GAAP RECONCILIATIONS
Slide 17: 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 18: Non-GAAP Measures – continued
Non-GAAP Measures – continued Free Cash Flow – is defined as net cash provided by operating activities less additions to property, plant and equipment and capitalized software. We believe free cash flow is useful to management and investors as a measure of cash generated by business operations that
Slide 19: Adjusted EBITDA
Adjusted EBITDA In thousands Period Total Sensata LTM 2Q 2024 1Q 2024 4Q 2023 3Q 2023 2Q 2023 Net income/(loss) $ 8,287 $ 71,703 $ 76,021 $ (202,238) $ 62,801 $ 49,111 Interest expense, net 142,382 35,061 34,657 35,756 36,908 38,105 Provision for/(benefit from) income taxes 28,002 27,280 22,570 (39,
Slide 20: Organic Revenue Growth
Organic Revenue Growth Q2-2024 Constant Currency % Reported % Change Less: Acquisition & Organic Growth Less: FX Impact Change (GAAP) Divestitures, net (non-GAAP) (non-GAAP) Performance Sensing 4.4 % (1.7)% 6.1 % —% 6.1 % Sensing Solutions (19.0)% (0.7)% (18.3)% —% (18.3)% Other 16.1 % (0.1)% 16.2 %
Slide 21: Free Cash Flow
Free Cash Flow $ in thousands Q2 Q2 YTD Total Sensata 2024 2023 Change 2024 2023 Change Net cash provided by operating activities $ 143,456 $ 115,754 23.9 % $ 249,943 $ 212,642 17.5 % Additions to property, plant and equipment and (45,058) (47,562) 5.3 % (87,188) (84,444) (3.2)% capitalized software
Slide 22: Debt and Leverage Ratio (Gross and Net)
Debt and Leverage Ratio (Gross and Net) $ in thousands As of Total Sensata 6/30/2024 3/31/2024 12/31/2023 9/30/2023 6/30/2023 Current portion of long-term debt and finance lease obligations $ 702,701 $ 2,340 $ 2,276 $ 1,888 $ 1,809 Finance lease obligations, less current portion 21,964 22,587 22,949
Slide 23: Adjusted Taxes and Adjusted Tax Rate
Adjusted Taxes and Adjusted Tax Rate $ in thousands Q2 Q2 YTD Total Sensata 2024 2023 2024 2023 Provision for income taxes $ 27,280 $ 19,873 $ 49,850 $ 43,599 Non-GAAP adjustments: Deferred income tax and other tax expense/(benefit) 4,160 6,433 5,446 13,224 Current tax effect of non-GAAP adjustments
Slide 24: Adjusted Corporate and Other Expenses
Adjusted Corporate and Other Expenses In thousands Q2 Q2 YTD Total Sensata 2024 2023 2024 2023 Corporate and other expenses $ (93,553) $ (81,464) $ (173,856) $ (143,905) Non-GAAP adjustments: Restructuring related and other 24,268 13,110 26,835 11,681 Financing and other transaction costs 1,507 974
Slide 25: Other GAAP to non-GAAP Reconciliations
Other GAAP to non-GAAP Reconciliations $ in thousands (except EPS amounts) Q2-2024 Q2-2023 Operating Operating Operating Operating Total Sensata Net Income EPS Net Income EPS Income Margin Income Margin Reported (GAAP) $ 129,947 12.5% $ 71,703 $ 0.47 $ 118,013 11.1% $ 49,111 $ 0.32 Non-GAAP adjustme