Slide 1: Forward-Looking Statements and Non-GAAP Measures
Forward-Looking Statements and Non-GAAP 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 are subje
Slide 2: Q2 Highlights
Record Q2 performance and raising FY17 Guidance 8% organic growth year-over-year Sales of $3.2B, with organic growth across all segments and regions, with Asia up 16% Organic growth of 10% in Transportation, with content growth driving market outperformance Industrial markets improving with 3% organ
Slide 3: Segment Orders Summary
Reported FY16 FY17 FY17 Q2 Growth Q2 Q1 Q2 Reported Organic Transportation 1,551 1,775 1,811 17% 18% Industrial 762 832 927 22% 8% Communications Ex SubCom* 422 417 446 6% 17% Total TE Ex SubCom* 2,735 3,024 3,184 16% 15% Book to Bill Ex SubCom* 0.99 1.06 1.06 Segment Orders Summary ($ in millions)
Slide 4: Transportation Solutions
Y/Y Growth Rates Reported Organic Automotive $1,309 8% 9% Commercial Transportation 248 19% 21% Sensors 198 7% 3% Transportation Solutions $1,755 9% 10% $ in Millions Sales Automotive sales significantly above market driven by content growth and growth in Asia and EMEA Commercial Transportation orga
Slide 5: Industrial Solutions
Y/Y Growth Rates Reported Organic Industrial Equipment $418 36% 4% Aerospace, Defense and Marine 268 (2)% -% Energy 167 6% 7% Industrial Solutions $853 16% 3% $ in Millions Sales Industrial Equipment organic growth driven by factory automation Industrial Equipment reported growth of 36% from Cregann
Slide 6: Communications Solutions
Y/Y Growth Rates Reported Organic Data & Devices* $233 (10)% 5% Appliances 165 12% 14% SubCom 221 11% 11% Communications Solutions $619 2% 9% $ in Millions Sales Data & Devices growth driven primarily by high speed programs with cloud infrastructure customers Data & Devices portfolio transformation
Slide 7: Q2 Financial Summary
Adjusted Operating Income, Adjusted Operating Margin and Adjusted EPS are non-GAAP measures; see Appendix for description. *Represents Diluted Earnings Per Share from Continuing Operations ($ in Millions, except per share amounts) Q2 FY16 Q2 FY17 Net Sales $ 2,952 $ 3,227 Operating Income $ 535 $ 47
Slide 8: Q2 Operating Metrics
$ in Millions Adjusted Gross Margin Percentage Adjusted Operating Margin Free Cash Flow Adjusted Gross Margin Percentage, Free Cash Flow, Adjusted Operating Margin and Adjusted EBITDA Margin are non-GAAP measures; See Appendix for description and reconciliation. Q2 Operating Metrics 9 Adjusted EBITD
Slide 9: Q3 Outlook
Guidance* 5% organic sales growth Y/Y driven by all segments Transportation Solutions Industrial Solutions Communications Solutions TE Connectivity Highlights Sales $3.2B to $3.3B Adjusted EPS $1.14 to $1.18 Sales up 4% Y/Y and up 5% organically at midpoint Adjusted EPS up 7% at the midpoint FX head
Slide 10: FY17 Outlook
FY17 Outlook® vs 52 week prior year Guidance Highlights Up Mid Single Digits Up High Single Digits Organic Industrial Solutions Up High Single Digits Up Low Single Digits Organic Communications Solutions Up Low Single Digits Up Mid Single Digits Organic Sales of $12.6B to $12.8B TE Connectivity Adju
Slide 11: Q2 2017 Y/Y Sales and Adjusted EPS Bridge
Y/Y Q2 2017 13 Adjusted EPS is a non-GAAP measure; See Appendix for description and reconciliation. Sales (in millions) Adjusted EPS Q2 2016 Results $2,952 $0.90 Operational Performance 242 0.23 Acquisitions / Divestitures, net 78 0.03 Tax Impact - 0.06 FX Impact (45) (0.03) Q2 2017 Results $3,227 $
Slide 12: Q3 2017 Y/Y Sales and Adjusted EPS Bridge
Y/Y Q3 2017 14 Adjusted EPS is a non-GAAP measure; See Appendix for description and reconciliation. Sales (in millions) Adjusted EPS Q3 2016 Results $3,121 $1.08 Operational Performance 162 0.14 Acquisitions / Divestitures, net 29 0.01 Tax Impact - (0.03) FX Impact (72) (0.04) Q3 2017 Guidance $3,24
Slide 13: FY 2017 Y/Y Sales and Adjusted EPS Bridge
Y/Y FY 2017 15 Adjusted EPS is a non-GAAP measure; See Appendix for description and reconciliation. 1H 2H FY17 Sales (in millions) Adjusted EPS Sales (in millions) Adjusted EPS Sales (in millions) Adjusted EPS 2016 – 52 Weeks $5,785 $1.74 $6,215 $2.21 $12,000 $3.95 Operational Performance 429 0.36 2
Slide 14: Q2 Balance Sheet & Cash Flow Summary
($ in Millions) Q2 2016 Q2 2017 Beginning Cash Balance $2,223 $665 Free Cash Flow 209 387 Dividends (118) (131) Share repurchases (1,274) (105) Divestiture, net of cash retained 261 - Pre-separation and BNS related tax payments, net (141) - Other (10) (43) Ending Cash Balance $1,150 $773 Total Debt
Slide 15: Q2 Balance Sheet & Cash Flow Summary
Q2 Balance Sheet & Cash Flow Summary 922017 $665 387 (5 nations) Cash from Continuii ing Operations Capital expenditures, net Cash paid pursuant to collateral requirements related to cross currency swaps Pre-separation and BNS related tax payments, net Free Cash Flow AIR -$ Days Sales Outstanding” I
Slide 16: Non-GAAP Measures (cont.)
18 Non-GAAP Measures (cont.) 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 financial
Slide 17: Non-GAAP Measures definitions
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 18: Segment Summary
20 Segment Summary Net Sales Net Sales Net Sales Net Sales Transportation Solutions 1,608 $ 1,755 $ 3,115 $ 3,430 $ Industrial Solutions 738 853 1,447 1,648 Communications Solutions 606 619 1,223 1,212 Total 2,952 $ 3,227 $ 5,785 $ 6,290 $ Operating Operating Operating Operating Operating Operating
Slide 19: Net Sales Growth – Q2 vs. Q2
Reconciliation of Net Sales Growth – Q2 17 vs. Q2 16 21 Acquisitions Translation (2) (Divestiture) Transportation Solutions (3) : Automotive 94 $ 7.7% 112 $ 9.3% (18) $ - $ Commercial transportation 40 19.2 44 21.0 (4) - Sensors 13 7.0 6 3.5 (3) 10 Total 147 9.1 162 10.1 (25) 10 Industrial Solutions
Slide 20: Net Sales Growth by Region – Q2 vs. Q2
Reconciliation of Net Sales Growth by Region – Q2 17 vs. Q2 16 22 Acquisitions Translation (2) (Divestiture) Americas 78 $ 7.9% 31 $ 3.1% 4 $ 43 $ EMEA 80 7.9 58 5.7 (36) 58 Asia-Pacific 117 12.4 153 16.2 (16) (20) Total 275 $ 9.3% 242 $ 8.2% (48) $ 81 $ (1) Organic net sales growth is a non-GAAP me
Slide 21: Non-GAAP to GAAP, Quarter Ended March 31, 2017
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Quarter Ended March 31, 2017 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 300 $ - $ 33 $ - $ 333
Slide 22: Non-GAAP to GAAP, Quarter Ended December 30, 2016
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Quarter Ended December 30, 2016 24 Acquisition Restructuring Related and Other Tax Adjusted U.S. GAAP Charges (1) Charges, Net (1) Items (2) (Non-GAAP) (3) Operating Income: Transportation Solutions 343 $ 1 $ 24 $ - $ 3
Slide 23: Non-GAAP to GAAP, Quarter Ended March 25, 2016
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Quarter Ended March 25, 2016 25 Restructuring Acquisition and Other Related Charges Tax Adjusted U.S. GAAP Charges (1) (Credits), Net (1)(2) Items (Non-GAAP) (3) Operating Income: Transportation Solutions 289 $ 1 $ 15 $
Slide 24: Non-GAAP to GAAP, Six Months Ended March 31, 2017
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Six Months Ended March 31, 2017 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 643 $ 1 $ 57 $ - $ 7
Slide 25: Non-GAAP to GAAP, Six Months Ended March 25, 2016
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Six Months Ended March 25, 2016 27 Restructuring Acquisition and Other Related Charges Tax Adjusted U.S. GAAP Charges (1) (Credits), Net (1)(2) Items (3) (Non-GAAP) (4) Operating Income: Transportation Solutions 550 $ 4
Slide 26: Non-GAAP to GAAP, Quarter Ended June 24, 2016
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Quarter Ended June 24, 2016 28 Acquisition Restructuring Related and Other Tax Adjusted U.S. GAAP Charges (1)(2) Charges, Net (2) Items (3) (Non-GAAP) (4) Operating Income: Transportation Solutions 297 $ 2 $ 21 $ - $ 32
Slide 27: Non-GAAP to GAAP, Quarter Ended September 30, 2016
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Quarter Ended September 30, 2016 29 Restructuring Acquisition and Other Related Charges Adjusted U.S. GAAP Charges (1) (Credits), Net (1) (Non-GAAP) (2) Operating Income: Transportation Solutions 344 $ 3 $ (6) $ 341 $ I
Slide 28: Impact of Additional Week for Q4 2016
Impact of Additional Week for Q4 2016 30 Adjustment Adjustment Adjustment 14 Weeks Impact of 13 Weeks 14 Weeks Impact of 13 Weeks 14 Weeks Impact of 13 Weeks U.S. GAAP 14th Week (Non-GAAP) (1)(2) U.S. GAAP 14th Week (Non-GAAP) (1)(2) (Non-GAAP) (2) 14th Week (Non-GAAP) (1)(2) Net Sales: Transportati
Slide 29: Non-GAAP to GAAP, Year Ended September 30, 2016
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Year Ended September 30, 2016 31 Restructuring Acquisition and Other Related Charges Tax Adjusted U.S. GAAP Charges (1)(2) (Credits), Net (2) Items (3) (Non-GAAP) (4) Operating Income: Transportation Solutions 1,191 $ 9
Slide 30: Impact of Additional Week for Fiscal 2016
32 Impact of Additional Week for Fiscal 2016 Adjustment Adjustment Adjustment 53 Weeks Impact of 52 Weeks 53 Weeks Impact of 52 Weeks 53 Weeks Impact of 52 Weeks U.S. GAAP 53rd Week (Non-GAAP) (1)(2) U.S. GAAP 53rd Week (Non-GAAP) (1)(2) (Non-GAAP) (2) 53rd Week (Non-GAAP) (1)(2) Net Sales: Transpor
Slide 31: Gross Margin & Gross Margin Percentage
Reconciliation of Gross Margin & Gross Margin Percentage 33 March 25, March 31, 2016 2017 Net Sales 2,952 $ 3,227 $ Cost of Sales 1,990 2,119 Gross Margin 962 1,108 Gross Margin Percentage 32.6% 34.3% Acquisition Related Charges 1 1 Adjusted Gross Margin (1) 963 $ 1,109 $ Adjusted Gross Margin Perce
Slide 32: Free Cash Flow
Reconciliation of Free Cash Flow 34 March 25, March 31, March 25, March 31, 2016 2017 2016 2017 Net cash provided by operating activities: Net cash provided by continuing operating activities 156 $ 521 $ 547 $ 925 $ Net cash used in discontinued operating activities (1) - (2) - 155 521 545 925 Net c
Slide 33: Adjusted EBITDA Margin
Reconciliation of Adjusted EBITDA Margin 35 March 25, March 31, 2016 2017 Net Income 380 $ 405 $ Loss from discontinued operations 9 1 Income tax expense 130 39 Other (income) expense, net (12) 2 Interest expense 32 32 Interest (income) (4) (6) Operating Income 535 473 Acquisition related charges 4
Slide 34: Forward-Looking Non-GAAP to GAAP Financial Measures
Reconciliation of Forward-Looking Non-GAAP Financial Measures to Forward-Looking GAAP Financial Measures 36 Outlook for Quarter Ending June 30, 2017 (1) Diluted earnings per share from continuing operations (GAAP) $1.08 - $1.12 Restructuring and other charges, net 0.05 Acquisition related charges 0.
Slide 35: Forward-Looking Non-GAAP to GAAP Financial Measures
Reconciliation of Forward-Looking Non-GAAP Financial Measures to Forward-Looking GAAP Financial Measures 36 Dilutedearnings per share from continuing operations (GAAP) Restructuring and other charges, net ‘Acquistion related charges Taxitems Adjusted luted earnings per share from continuing operatio