Te Connectivity Plc · NYSE:TEL
Te Connectivity — Q1 2020 Earnings Presentation
30 slides from Te Connectivity's earnings presentation, Jan 29, 2020
Slide 1: Q1 2020 Earnings January 29, 2020
Q1 2020 Earnings January 29, 2020
Slide 2: Forward-Looking Statements and Non-GAAP Financial Measures
TE Connectivity Confidential & Proprietary. Do not reproduce or distribute. 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 Ref
Slide 3: Q1 Highlights
TE Connectivity Confidential & Proprietary. Do not reproduce or distribute. Sales and Adjusted EPS exceeded guidance midpoint • Sales of $3.2B, down 5% on a reported & organic basis Y/Y; outperforming markets with content growth • Transportation down 6% organically, as expected, driven by production
Slide 4: Segment Orders Summary
TE Connectivity Confidential & Proprietary. Do not reproduce or distribute. Reported FY19 FY19 FY20 Q1 Y/Y Growth Q1 Q4 Q1 Reported Organic Transportation 1,916 1,899 1,867 (3)% (2)% Industrial 1,001 933 965 (4)% (2)% Communications 403 374 409 1% 2% Total TE 3,320 3,206 3,241 (2)% (2)% Book to Bill
Slide 5: Transportation Solutions
TE Connectivity Confidential & Proprietary. Do not reproduce or distribute. Y/Y Growth Rates Reported Organic Automotive $1,405 (4)% (3)% Commercial Transportation 258 (13)% (16)% Sensors 205 (7)% (11)% Transportation Solutions $1,868 (6)% (6)% $ in Millions Q1 Sales Q1 Business Performance Reported
Slide 6: Industrial Solutions
TE Connectivity Confidential & Proprietary. Do not reproduce or distribute. Y/Y Growth Rates Reported Organic Aerospace , Defense and Marine $309 8% 9% Industrial Equipment 263 (17)% (15)% Medical 179 7% 7% Energy 176 10% 12% Industrial Solutions $927 0% 1% $ in Millions Q1 Sales • AD &M strong grow
Slide 7: Communications Solutions
TE Connectivity Confidential & Proprietary. Do not reproduce or distribute. 16.4% 12.1% Q1 2019 Q1 2020 $433 $373 Q1 2019 Q1 2020 Y/Y Growth Rates Reported Organic Data & Devices $219 (15)% (15)% Appliances 154 (13)% (11)% Communications Solutions $373 (14)% (14)% $ in Millions Q1 Sales • Data & Dev
Slide 8: Q1 Financial Summary
TE Connectivity Confidential & Proprietary. Do not reproduce or distribute. ($ in Millions, except per share amounts) Q1 FY19 Q1 FY20 Net Sales $ 3,347 $ 3,168 Operating Income $ 484 $ 471 Operating Margin 14.5% 14.9% Acquisition Related Charges 6 7 Restructuring & Other Charges, net 75 24 Adjusted
Slide 9: Q1 Financial Performance
TE Connectivity Confidential & Proprietary. Do not reproduce or distribute. Q1 Financial Performance 9 Adjusted Operating Margin Free Cash Flow $69 $243 Q1 2019 Q1 2020 $3,347 $3,168 Q1 2019 Q1 2020 Sales $ in Millions Adjusted Operating Margin, Adjusted EPS, Adjusted EBITDA Margin and Free Cash Flo
Slide 10: Q2 Outlook
TE Connectivity Confidential & Proprietary. Do not reproduce or distribute. Guidance* (Y/Y) Transportation Solutions Industrial Solutions Communications Solutions TE Connectivity Highlights Sales $3.1B to $3.3B Adjusted EPS $1.22 to $1.28 • Sales down 6% reported and 5% organic Y/Y • Adjusted EPS do
Slide 11: FY20 Outlook
TE Connectivity Confidential & Proprietary. Do not reproduce or distribute. * Assumes foreign exchange rates and commodity prices that are consistent with current levels Organic Net Sales Growth (Decline) and Adjusted EPS are non - GAAP financial measures; see Appendix for descriptions and reconcili
Slide 12: Additional Information
TE Connectivity Confidential & Proprietary. Do not reproduce or distribute. Additional Information 12
Slide 13: Q1 2020 Sales and Adjusted EPS Bridge
TE Connectivity Confidential & Proprietary. Do not reproduce or distribute. Y/Y Q1 2020 13 Sales (in millions) Adjusted EPS Q1 2019 Results $3,347 $1.29 Operational Performance (136) (0.05) FX Impact (43) (0.02) Tax Rate Impact - (0.01) Q1 2020 Results $3,168 $1.21 Adjusted EPS is a non - GAAP finan
Slide 14: Q2 2020 Guidance Bridge
TE Connectivity Confidential & Proprietary. Do not reproduce or distribute. Y/Y Q2 2020 14 Sales (in millions) Adjusted EPS Q2 2019 Results $3,412 $1.42 Operational Performance (135) (0.11) FX Impact (77) (0.04) Tax Rate Impact - (0.02) Q2 2020 Guidance $3,200 $1.25 Guidance Range: Sales of $3.1B -
Slide 15: FY 2020 Guidance Bridge
TE Connectivity Confidential & Proprietary. Do not reproduce or distribute. Y/Y FY 2020 15 Guidance Range Sales of $12.85B - $13.25B Adjusted EPS of $4.95 - $5.25 Adjusted EPS is a non - GAAP financial measure; See Appendix for description and reconciliation. Sales (in millions) Adjusted EPS 2019 Re
Slide 16: Q1 Balance Sheet & Cash Flow Summary
TE Connectivity Confidential & Proprietary. Do not reproduce or distribute. ($ in Millions) Q1 2019 Q1 2020 Beginning Cash Balance $848 $927 Free Cash Flow 69 243 Dividends (150) (154) Share repurchases (519) (139) Net decrease in debt (28) (9) Proceeds from the sale of discontinued operation, net 2
Slide 17: Sales Breakout of Industrial Businesses
TE Connectivity Confidential & Proprietary. Do not reproduce or distribute. Sales Breakout of Industrial Businesses 17 September 27, June 28, March 29, December 28, September 28, June 29, March 30, December 29, September 27, September 28, Segment and Industry End Markets 2019 2019 2019 2018 2018 201
Slide 18: Appendix
TE Connectivity Confidential & Proprietary. Do not reproduce or distribute. Appendix 18
Slide 19: Non-GAAP Financial Measures
TE Connectivity Confidential & Proprietary. Do not reproduce or distribute. 19 Non - GAAP Financial Measures We present non - GAAP performance and liquidity measures as we believe it is appropriate for investors to consider adjusted financ ial measures in addition to results in accordance with accou
Slide 20: Non-GAAP Measure Definitions
TE Connectivity Confidential & Proprietary. Do not reproduce or distribute. 20 • Adjusted EBITDA and Adjusted EBITDA Margin - represent net income and net income as a percentage of net sales, respectively, (th e most comparable GAAP financial measures) before interest expense, interest income, incom
Slide 21: Segment Summary
TE Connectivity Confidential & Proprietary. Do not reproduce or distribute. 21 Segment Summary Net Sales Net Sales Transportation Solutions 1,868$ 1,986$ Industrial Solutions 927 928 Communications Solutions 373 433 Total 3,168$ 3,347$ Operating Operating Operating Operating Income Margin Income Mar
Slide 22: Reconciliation of Net Sales Growth
TE Connectivity Confidential & Proprietary. Do not reproduce or distribute. Reconciliation of Net Sales Growth 22 Translation (2) Acquisitions Transportation Solutions (3) : Automotive (64)$ (4.4)% (43)$ (2.9)% (21)$ -$ Commercial transportation (39) (13.1) (45) (15.6) (7) 13 Sensors (15) (6.8) (25)
Slide 23: Reconciliation for Quarter Ended December 27, 2019
TE Connectivity Confidential & Proprietary. Do not reproduce or distribute. Reconciliation of Non - GAAP Financial Measures to GAAP Financial Measures for the Quarter Ended December 27, 2019 23 Acquisition- Restructuring Related and Other Adjusted U.S. GAAP Charges(1) Charges, Net (1) Tax Items (2)
Slide 24: Reconciliation for Quarter Ended December 28, 2018
TE Connectivity Confidential & Proprietary. Do not reproduce or distribute. Reconciliation of Non - GAAP Financial Measures to GAAP Financial Measures for the Quarter Ended December 28, 2018 24 Acquisition- Restructuring Related and Other Adjusted U.S. GAAP Charges(1) Charges, Net (1) (Non-GAAP) (2)
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, 2019 25 Acquisition- Restructuring Related and Other Tax Adjusted U.S. GAAP Charges(1) Charges, Net (1) Items (2) (No
Slide 26: Reconciliation for Year Ended September 27, 2019
TE Connectivity Confidential & Proprietary. Do not reproduce or distribute. Reconciliation of Non - GAAP Financial Measures to GAAP Financial Measures for the Year Ended September 27, 2019 26 Acquisition- Related Charges Restructuring and Other and Other Tax Adjusted U.S. GAAP Items (1)(2) Charges,
Slide 27: Reconciliation of Free Cash Flow
TE Connectivity Confidential & Proprietary. Do not reproduce or distribute. Reconciliation of Free Cash Flow 27 December 27, December 28, 2019 2018 Net cash provided by operating activities: Net cash provided by continuing operating activities 411$ 328$ Net cash used in discontinued operating activi
Slide 28: Reconciliation of Adjusted EBITDA Margin
TE Connectivity Confidential & Proprietary. Do not reproduce or distribute. Reconciliation of Adjusted EBITDA Margin 28 December 27, December 28, 2019 2018 Net income 26$ 276$ Loss (income) from discontinued operations (3) 107 Income tax expense 447 78 Other (income) expense, net (5) 1 Interest expe
Slide 29: Adjusted Return on Invested Capital (ROIC)
TE Connectivity Confidential & Proprietary. Do not reproduce or distribute. Adjusted Return on Invested Capital (ROIC) 29 December 27, September 27, June 28, March 29, December 28, September 28, June 29, March 30, 2019 2019 2019 2019 2018 2018 2018 2018 Operating income 471$ 444$ 520$ 530$ 484$ 570$
Slide 30: Reconciliation of Forward-Looking Non-GAAP Financial Measures
TE Connectivity Confidential & Proprietary. Do not reproduce or distribute. Reconciliation of Forward - Looking Non - GAAP Financial Measures to Forward - Looking GAAP Financial Measures 30 Outlook for Quarter Ending March 27, Outlook for 2020 (1) Fiscal 2020 (1) Diluted earnings per share from cont