Slide 1: Forward-Looking Statements and Non-GAAP Financial Measures
Forward-Looking Statements and Non-GAAP Financial Measures 2 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
Slide 2: Q3 Highlights
Adjusted EPS above guidance driven by strong Industrial Segment performance and cost actions Sales of $3.4B, down 5% on a reported basis and down 3% organically Y/Y Transportation down 4% organically driven by global auto production declines of 10% Industrial grew 2% organically, in line with guidan
Slide 3: Segment Orders Summary
Reported FY18 FY19 FY19 Q3 Y/Y Growth Q3 Q2 Q3 Reported Organic Transportation 2,188 1,949 1,897 (13)% (10)% Industrial 1,102 1,067 1,042 (5)% (5)% Communications 476 441 382 (20)% (17)% Total TE 3,766 3,457 3,321 (12)% (10)% Book to Bill 1.05 1.01 0.98 Segment Orders Summary ($ in millions) 4 Trans
Slide 4: Transportation Solutions
Y/Y Growth Rates Reported Organic Automotive $1,418 (8)% (4)% Commercial Transportation 317 (5)% (5)% Sensors 233 (1)% 1% Transportation Solutions $1,968 (7)% (4)% $ in Millions Q3 Sales Q3 Business Performance Reported Down 7% Organic Down 4% Q3 Adjusted Operating Margin Transportation Solutions 5
Slide 5: Industrial Solutions
Y/Y Growth Rates Reported Organic Aerospace, Defense and Marine $342 16% 17% Industrial Equipment 485 (4)% (6)% Energy 178 (5)% 0% Industrial Solutions $1,005 2% 2% $ in Millions Q3 Sales AD&M strong growth ahead of market driven by new program ramps in Commercial Aerospace & Defense Industrial Equi
Slide 6: Communications Solutions
Y/Y Growth Rates Reported Organic Data & Devices $245 (12)% (9)% Appliances 171 (16)% (13)% Communications Solutions $416 (13)% (11)% $ in Millions Q3 Sales Data & Devices decline driven by inventory destocking, partially offset by growth in data center applications Appliances impacted by inventory
Slide 7: Q3 GAAP to Adjusted Results Summary
*Represents Diluted Earnings Per Share from Continuing Operations ** Includes a $214 million income tax benefit related to the tax impacts of certain measures of Swiss tax reform and a $93 million income tax benefit related to the effective settlement of a tax audit in a non-U.S. jurisdiction. Adjus
Slide 8: Q3 Financial Performance
$ in Millions Sales Adjusted EPS Adjusted Operating Margin Free Cash Flow, Adjusted Operating Margin and Adjusted Earnings Per Share are non-GAAP financial measures; see Appendix for descriptions and reconciliations. Q3 Financial Performance 9 Free Cash Flow Q3 FY19 FX headwind of $123M Y/Y 17.4% 17
Slide 9: Q4 Outlook
Guidance* Transportation Solutions Industrial Solutions Communications Solutions TE Connectivity Highlights Sales $3.2B to $3.3B Adjusted EPS $1.27 to $1.33 Sales down $250M Y/Y reflecting 7% reported and organic declines Adjusted EPS declining $0.05 Y/Y driven by sales decline FX headwind impacting
Slide 10: FY19 Outlook
Utilizing business model levers to preserve EPS resiliency Sales of $13.35B to $13.45B Adjusted EPS of $5.47 to $5.53 Sales down 4% reported and 2% organic Y/Y Adjusted EPS up low-single digits excluding FX headwind FX headwind impacting sales by ~$400M and Adjusted EPS by $0.16 Y/Y Down Mid Single
Slide 11: FY19 Outlook
FY19 Outlook Guidance* Highlights Transportation Down Mid Single Digits Down Low Single Digits Organic Industrial Solutions Up Low Single Digits Up Low Single Digits Organic Communications Solutions Down High Single Digits Down High Single Digits Organic Sales of $13.35B to $13.45B Connectivi MMMM A
Slide 12: Q3 2019 Sales and Adjusted EPS Y/Y Bridge
Y/Y Q3 2019 13 Sales (in millions) Adjusted EPS Q3 2018 Results $3,581 $1.42 Operational Performance (69) 0.07 FX Impact (123) (0.04) Tax Rate Impact - 0.05 Q3 2019 Results $3,389 $1.50 Adjusted EPS is a non-GAAP financial measure; See Appendix for description and reconciliation.
Slide 13: Q4 2019 Sales and Adjusted EPS Y/Y Bridge
Y/Y Q4 2019 14 Sales (in millions) Adjusted EPS Q4 2018 Results $3,509 $1.35 Operational Performance (209) (0.02) FX Impact (50) (0.03) Tax Rate Impact - - Q4 2019 Guidance $3,250 $1.30 Guidance Range: Sales of $3.2B - $3.3B Adjusted EPS of $1.27 – $1.33 Adjusted EPS is a non-GAAP financial measure;
Slide 14: FY 2019 Guidance Sales and Adjusted EPS Bridge
Y/Y FY 2019 15 Guidance Range Sales of $13.35B - $13.45B Adjusted EPS of $5.47 - $5.53 Adjusted EPS is a non-GAAP financial measure; See Appendix for description and reconciliation. Sales (in millions) Adjusted EPS 2018 Results $13,988 $5.61 Operational Performance (188) (0.02) FX Impact (400) (0.16
Slide 15: Q3 Balance Sheet & Cash Flow Summary
($ in Millions) Q3 2018 Q3 2019 Beginning Cash Balance $559 $565 Free Cash Flow 443 515 Dividends (154) (155) Share repurchases (230) (174) Net increase in debt 46 36 Acquisition of business, net of cash acquired - (291) Other 106 50 Ending Cash Balance $770 $546 Total Debt $4,008 $4,036 A/R $2,499
Slide 16: Q3 Balance Sheet & Cash Flow Summary
Q3 Balance Sheet & Cash Flow Summary (Sinatra) 32018 a32010 (Sinton) 032018 032019 Cash from Continuing Operations $734 © $692 Beginning Cash Balance $559 $565 Free Cash Flow 443515 (222) (166) Capital expenditures, net a GS) Cash collected pursuant to collateral cae repurchase requirements related
Slide 17: Non-GAAP Financial Measures
18 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 financia
Slide 18: Non-GAAP Measure Descriptions
19 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 adjusted for net other income, inco
Slide 19: Segment Summary
20 Segment Summary Net Sales Net Sales Net Sales Net Sales Transportation Solutions 1,968 $ 2,112 $ 5,925 $ 6,278 $ Industrial Solutions 1,005 988 2,940 2,842 Communications Solutions 416 481 1,283 1,359 Total 3,389 $ 3,581 $ 10,148 $ 10,479 $ Operating Operating Operating Operating Operating Operat
Slide 20: Segment Summary – Q2
21 Segment Summary – Q2 19 Net Sales Transportation Solutions 1,971 $ Industrial Solutions 1,007 Communications Solutions 434 Total 3,412 $ Operating Operating Income Margin Transportation Solutions 316 $ 16.0% Industrial Solutions 137 13.6 Communications Solutions 77 17.7 Total 530 $ 15.5% Adjusted
Slide 21: Reconciliation of Net Sales Growth – Q3 vs. Q3
Reconciliation of Net Sales Growth – Q3 19 vs. Q3 18 22 Translation (2) Acquisitions Transportation Solutions (3) : Automotive (123) $ (8.0)% (59) $ (3.9)% (64) $ - $ Commercial transportation (18) (5.4) (16) (5.1) (12) 10 Sensors (3) (1.3) 2 0.7 (8) 3 Total (144) (6.8) (73) (3.5) (84) 13 Industrial
Slide 22: Reconciliation for Quarter Ended June 28, 2019
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Quarter Ended June 28, 2019 23 Acquisition Restructuring Related and Other Tax Adjusted U.S. GAAP Charges (1) Charges, Net (1) Items (2) (Non-GAAP) (3) Operating income: Transportation Solutions 308 $ 6 $ 53 $ - $ 367 $
Slide 23: Reconciliation for Quarter Ended June 29, 2018
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Quarter Ended June 29, 2018 24 Acquisition Restructuring Related and Other Adjusted U.S. GAAP Charges (1) Charges, Net (1) (Non-GAAP) (2) Operating income: Transportation Solutions 393 $ 2 $ 11 $ 406 $ Industrial Soluti
Slide 24: Reconciliation for Nine Months Ended June 29, 2018
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Nine Months Ended June 29, 2018 26 Acquisition Restructuring Related and Other Tax Adjusted U.S. GAAP Charges (1) Charges, Net (1) Items (2) (Non-GAAP) (3) Operating income: Transportation Solutions 1,237 $ 9 $ 13 $ - $
Slide 25: Reconciliation for Quarter Ended March 29, 2019
TE Connectivity Confidential & Proprietary. Do not reproduce or distribute. Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Quarter Ended March 29, 2019AcquisitionRestructuringRelatedand OtherTaxAdjustedU.S. GAAPCharges (1)Charges, Net (1)Items (2)(Non-GAAP) (3)Opera
Slide 26: Reconciliation for Quarter Ended September 28, 2018
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Quarter Ended September 28, 2018 28 Acquisition Restructuring Related and Other Tax Adjusted U.S. GAAP Charges (1) Charges, Net (1) Items (2) (Non-GAAP) (3) Operating income: Transportation Solutions 341 $ 3 $ 20 $ - $
Slide 27: Reconciliation for Year Ended September 28, 2018
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Year Ended September 28, 2018 29 Acquisition Restructuring Related and Other Tax Adjusted U.S. GAAP Charges (1) Charges, Net (1) Items (2) (Non-GAAP) (3) Operating income: Transportation Solutions 1,578 $ 12 $ 33 $ - $
Slide 28: Reconciliation of Free Cash Flow
Reconciliation of Free Cash Flow 30 June 28, June 29, June 28, June 29, 2019 2018 2019 2018 Net cash provided by operating activities: Net cash provided by continuing operating activities 692 $ 734 $ 1,575 $ 1,379 $ Net cash provided by (used in) discontinued operating activities (1) 66 (31) 148 691
Slide 29: Reconciliation of Adjusted EBITDA Margin
Reconciliation of Adjusted EBITDA Margin 31 June 28, June 29, 2019 2018 Net income 757 $ 454 $ (Income) loss from discontinued operations, net of income taxes 1 (1) Income tax expense (benefit) (245) 77 Other (income) expense, net (2) 1 Interest expense 13 26 Interest income (4) (3) Operating income
Slide 30: Adjusted Return on Invested Capital (ROIC)
Adjusted Return on Invested Capital (ROIC) 32 June 28, March 29, December 28, September 28, June 29, March 30, December 29, September 29, 2019 2019 2018 2018 2018 2018 2017 2017 Operating income 520 $ 530 $ 484 $ 570 $ 554 $ 621 $ 586 $ 491 $ Acquisition related charges 9 9 6 5 5 5 7 1 Restructuring
Slide 31: Reconciliation of Forward-Looking Non-GAAP Financial Measures
Reconciliation of Forward-Looking Non-GAAP Financial Measures to Forward-Looking GAAP Financial Measures 33 Outlook for Quarter Ending September 27, Outlook for 2019 (1) Fiscal 2019 (1) Diluted earnings per share from continuing operations (GAAP) $0.81 - $0.87 $5.42 - $5.48 Restructuring and other c
Slide 32: Reconciliation of Forward-Looking Non-GAAP Financial Measures
Reconciliation of Forward-Looking Non-GAAP Financial Measures to Forward-Looking GAAP Financial Measures Quarter Diluted earnings per share from continuing operations (GAAP) Restructuring and other charges, net Acquisition elated charges Taxitens Adjusted uted earnings per share from continuing oper