Te Connectivity Plc · NYSE:TEL
Te Connectivity — Merger or Acquisition (June 2014)
26 slides from Te Connectivity's merger presentation, Jun 18, 2014
Slide 1: TE Connectivity Acquires Measurement Specialties
Investor Presentation June 18, 2014 TE CONNECTIVITY ACQUIRES MEASUREMENT SPECIALTIES
Slide 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 are subject to risks, uncertainty and changes in circumstances, which may cause actual
Slide 3: Additional Information and Where to Find It
Additional Information and Where to Find It -- This communication is for informational purposes only and does not constitute an offer to purchase or a solicitation of any proxy, vote or approval. In connection with the proposed merger, Measurement Specialties, Inc. (MEAS) intends to file a proxy sta
Slide 4: If Data, Power, or Signal Moves Through It, TE Connects and Senses It
Industrial Transportation Consumer Devices Industrial Equipment Oil & Gas Aerospace & Defense Automotive If Data, Power, or Signal Moves Through It, TE Connects AND Senses It 5 Appliances Medical Broadband Networks Energy Networks
Slide 5: Compelling Strategic Rationale
Leadership position in attractive sensor market Combination establishes TE as one of the largest sensor companies in the world Sensors is a fragmented, large and high-growth market Acquisition increases TE’s addressable market by nearly $40 billion Compelling Strategic Rationale Accelerates sales an
Slide 6: Sensors – An Attractive Growth Market
Global Sensor Market Sources: BCC Research, Strategic Analytics, TE Analysis (1) FY2013 sales for TE $116B $80B 2019 +8% 2014 The global sensor market is large, profitable and high growth Sensors and connectors have common end market-segments, and a common customer base Global trends of Green, Safe,
Slide 7: Bringing the Power of TE to Measurement Specialties' Customers
TEOA Operations Excellence Committed to Innovation Global customer focus teams Strategic partnerships Unparalleled customer access Unmatched customer channels in all markets 5,000 customer-facing employees 7,000 engineers Dedicated customer engineering teams 18,000 patents granted or pending $675 mi
Slide 8: Measurement Specialties Adds Broad Capability in Sensors
Broad Set of Market Segments Vibration Sensors Force Sensors Humidity Sensors Pressure Sensors Position Sensors Temperature Sensors Key Metrics Fiscal 2015 Estimated Financials Revenue ~$540M / 19% EBITDA1 26% Revenue CAGR (2010-2014) Global footprint with infrastructure in North America, Europe and
Slide 9: TE is the World Leader in Connectivity
10 Automotive Industrial Transportation Industrial AD&M Medical Appliance/ Consumer SENSOR TYPES Temperature Pressure Position Position ~$200M TE SENSOR BUSINESS ~$10B CONNECTOR1 SALES IN FY13 TE Connectivity Broadest range of connectivity solutions /// Highly-engineered products /// Global scale //
Slide 10: TE and Measurement Specialties Will Be a World Leader in Sensors
11 SENSOR TYPES $10B CONNECTOR1 SALES IN FY13 $40B ADDRESSABLE SENSOR MARKET Pressure Position Vibration Temperature Temperature ~$800M TE SENSOR BUSINESS Automotive Industrial Transportation Industrial AD&M Medical Appliance/ Consumer Humidity Humidity Force Force TE Connectivity Broadest range of
Slide 11: TE Will Bring Measurement Specialties' Sensors to the Automotive Market
Transmission Fluid Level TRICAN (pressure, temp, humidity) Engine Air Intake Exhaust Gas Temp Cabin Humidity Sensor Engine Oil Level (“electronic dipstick”) Engine Oil Temp Brake Pedal MR Position billion In sales in FY13 $5.0 TE MARKET SHARE IN CONNECTORS #1 Measurement Specialties TE Connectivity
Slide 12: Transaction Highlights
Transaction Value Financial Impact Timing Revenue and Cost Synergies Capital $86 a share in cash $1.7B including assumption of net debt Multiple revenue synergy opportunities Significant tax synergies Significant cost savings through application of our TEOA system Expected to be accretive by mid-sin
Slide 13: Acquisition Is a Great Fit with TE's Target Financial Model
Adjusted Gross Margin, Adjusted Operating Margin, Adjusted EPS, and Free Cash Flow are non-GAAP measures; see Appendix for description and reconciliation. Adj. Gross Margin % >34% Adj. Operating Margin >15% FY12 FY13 Trailing 12 Month’s Results (1) Target Model Adj. EPS $2.86 $3.23 Double-Digit Grow
Slide 14: Summary
Leverages TE’s strengths – unparalleled go-to-market capabilities, deep OEM relationships and global footprint – to drive double-digit growth in sensors Establishes TE as a leader in the high-growth sensor market Increases TE’s addressable market by nearly $40 billion Furthers TE’s position in high-
Slide 15: Appendix
Appendix 16
Slide 16: Non-GAAP Measures
Non-GAAP Measures “Organic Sales Growth,” “Adjusted Gross Margin,” “Adjusted Operating Income,” “Adjusted Operating Margin,” “Adjusted Earnings Per Share,” “Free Cash Flow” (FCF) and “Earnings Before Interest, Taxes, Depreciation and Amortization” (EBITDA) are non-GAAP (U.S. generally accepted accou
Slide 17: Non-GAAP Measures, continued
Non-GAAP Measures, continued We present operating margin before special items including charges or income related to legal settlements and reserves, restructuring and other charges, acquisition related charges, impairment charges, and other income or charges, if any (“Adjusted Operating Margin”). We
Slide 18: Non-GAAP Measures, continued
Non-GAAP Measures, continued FCF is defined as net cash provided by continuing operating activities excluding voluntary pension contributions and the cash impact of special items, if any, minus net capital expenditures. Net capital expenditures consist of capital expenditures less proceeds from the
Slide 19: Reconciliation of Gross Margin and Gross Margin Percentage
RECONCILIATION OF GROSS MARGIN AND GROSS MARGIN PERCENTAGE 20 For the Years Ended September 27, September 28, March 28, December 27, September 27, June 28, 2013 2012 2014 2013 2013 2013 ($ in millions) Net sales 13,280 $ 13,282 $ 3,431 $ 3,326 $ 3,432 $ 3,449 $ Cost of sales 8,951 9,236 2,258 2,209
Slide 20: Reconciliation of Non-GAAP Measures, Year Ended September 28, 2012
RECONCILIATION OF NON-GAAP Financial Measures to GAAP Financial Measures for the Year Ended September 28, 2012 21 Acquisition Restructuring Related and Other Tax Adjusted U.S. GAAP Charges (1) Charges, Net Items (2) (Non-GAAP) (3) Operating Income 1,518 $ 116 $ 114 $ - $ 1,748 $ Operating Margin 11.
Slide 21: Reconciliation of Non-GAAP Measures, Year Ended September 27, 2013
RECONCILIATION OF NON-GAAP Financial Measures to GAAP Financial Measures for the Year Ended September 27, 2013 22 Acquisition Restructuring Related and Other Tax Adjusted U.S. GAAP Charges Charges, Net Items (1) (Non-GAAP) (2) Operating Income 1,556 $ 14 $ 311 $ - $ 1,881 $ Operating Margin 11.7% 14
Slide 22: Reconciliation of Non-GAAP Measures, Quarter Ended March 28, 2014
RECONCILIATION OF NON-GAAP Financial Measures to GAAP Financial Measures for the Quarter Ended March 28, 2014 23 Acquisition Restructuring Related and Other Tax Adjusted U.S. GAAP Charges Charges, Net Items (1) (Non-GAAP) (2) Operating Income 510 $ 1 $ 21 $ - $ 532 $ Operating Margin 14.9% 15.5% Oth
Slide 23: Reconciliation of Non-GAAP Measures, Quarter Ended December 27, 2013
RECONCILIATION OF NON-GAAP Financial Measures to GAAP Financial Measures for the Quarter Ended December 27, 2013 24 Restructuring and Other Tax Adjusted U.S. GAAP Charges, Net Items (1) (Non-GAAP) (2) Operating Income 479 $ 7 $ - $ 486 $ Operating Margin 14.4% 14.6% Other Income, Net 32 $ - $ (25) $
Slide 24: Reconciliation of Non-GAAP Measures, Quarter Ended September 27, 2013
RECONCILIATION OF NON-GAAP Financial Measures to GAAP Financial Measures for the Quarter Ended September 27, 2013 25 Acquisition Restructuring Related and Other Tax Adjusted U.S. GAAP Charges Charges, Net Items (1) (Non-GAAP) (2) Operating Income 465 $ 3 $ 71 $ - $ 539 $ Operating Margin 13.5% 15.7%
Slide 25: Reconciliation of Non-GAAP Measures, Quarter Ended June 28, 2013
RECONCILIATION OF NON-GAAP Financial Measures to GAAP Financial Measures for the Quarter Ended June 28, 2013 26 Acquisition Restructuring Related and Other Tax Adjusted U.S. GAAP Charges Charges, Net Items (1) (Non-GAAP) (2) Operating Income 439 $ 3 $ 67 $ - $ 509 $ Operating Margin 12.7% 14.8% Othe
Slide 26: Reconciliation of Free Cash Flow
RECONCILIATION OF FREE CASH FLOW 27 For the Years Ended September 27, September 28, September 30, September 24, September 25, September 26, 2013 2012 2011 2010 2009 2008 (in millions) Reconciliation of Free Cash Flow: Net cash provided by continuing operating activities 2,048 $ 1,888 $ 1,722 $ 1,603