Sensata Technologies Holding Plc · NYSE:ST
Sensata Technologies — Q4 2022 Earnings Presentation
31 slides from Sensata Technologies's earnings presentation, Jan 31, 2023
Slide 1: Sensata Fourth Quarter and Full Year 2022 Earnings Presentation
Sensata Fourth Quarter and Full Year 2022 Earnings Presentation January 31, 2023
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 Q4 and 2022
Key Performance Highlights Q4 and 2022 Strong financial • Revenue of $1,015M in Q4-22; Record full year revenue of $4,029M in 2022 performance • Adj. operating margin of 20.1% in Q4-22, 70 bps improvement from Q3 Continued strong • Full year 2022 outgrowth of 820 bps; third consecutive year above th
Slide 4: Significant investments in growth vectors enabled over $1B in new business wins
Acquisitions expanded Significant investments in growth vectors enabled Sensata's capabilities in Electrification: over $1B in new business wins • Contactors Megatrend Spend ($M) • Fuses $69.8 • Increased investment in new products and $51.7 • Battery management $30.8 technologies aligned with Megat
Slide 5: Sensata is executing on its growth vector strategy
Sensata is executing on its growth vector strategy ELECTRIFICATION PRODUCT CATEGORIES Electrification Revenue ($M) $460 $2B GR 67% CA Electrification revenue Components $260 expected by 2026 $165 Power conversion • Existing business, market growth, business wins in hand expected to Energy storage co
Slide 6: Q4-2022 Financials and Q1-2023 Financial Guide
Q4-2022 FINANCIALS AND Q1-2023 FINANCIAL GUIDE
Slide 7: Q4-2022 Financial Summary
Q4-2022 Financial Summary • Revenue growth YoY of 8.6% composed of: $ in millions, except EPS Q4-2022 Q3-2022 Q4-2021 YoY B/(W) ◦ Organic revenue increased 10.0% Revenue $1,014.7 $1,018.3 $934.6 8.6 % ◦ Acquisitions increased revenue by 2.2%, net Adjusted Operating Income $204.3 $197.3 $197.6 3.4 %
Slide 8: Adj. Operating Margin steadily improved through 2022
Adj. Operating Margin steadily improved through 2022 ADJUSTED OPERATING MARGIN • Adj. Operating Margin steadily improved during 2022 due to: ps +140 b ◦ Improved pricing to offset inflationary material and logistics 20.1% costs 19.4% ◦ Improved availability of materials reducing variability of 19.0%
Slide 9: Q4-2022: Performance Sensing
Q4-2022: Performance Sensing Revenue Segment Operating Income $757.7 $754.5 % operating margin $685.1 $196.9 $188.6 $185.6 26.0% 25.0% 27.1% Q4-22 Q3-22 Q4-21 Q4-22 Q3-22 Q4-21 Q4-22 YoY Revenue Growth Reported Organic • Automotive revenue increase reflects continued content Automotive 13.3% 18.5% g
Slide 10: Q4-2022: Sensing Solutions
Q4-2022: Sensing Solutions Revenue Segment Operating Income % operating margin $257.0 $263.7 $249.5 $74.4 $73.6 $74.5 28.9% 27.9% 29.8% Q4-22 Q3-22 Q4-21 Q4-22 Q3-22 Q4-21 Q4-22 YoY Revenue Growth Reported Organic • Industrial revenue decline reflects weakness in HVAC and Industrial & Other (0.4)% (
Slide 11: Corporate and Other Operating Expenses
Corporate and Other Operating Expenses $ in millions Q4-2022 Q3-2022 Q4-2021 YoY B/(W) Corporate and Other $65.5 $76.4 $72.8 9.9 % • Adj. Corporate and Other increase primarily % Revenue 6.5% 7.5% 7.8% due to higher Megatrend investments, partially offset by lower incentive Adj. Corporate and Other
Slide 12: Targeting net leverage range of 1.5 - 2.5x within the next 2-3 years
Targeting net leverage range of 1.5 - 2.5x within the next 2-3 years; focused on strengthening the balance sheet Free Cash Flow ($ millions) $185 $0.11 $50M $117 Quarterly Dividend Payment Share Repurchases during Q4-22 on Feb 22 for shareholders of Pace reduced from Q3-22 record as of Feb 8, 2023 F
Slide 13: Q1-23 Financial Guidance
Q1-23 Financial Guidance $ in millions, except EPS Q1-23 GUIDANCE Q1-22 B/(W) • Q1-23 end-market growth expected to be Revenue (3%) - 3% ~(4%) YoY $950 – $1,000 $975.8 ◦ Auto: ~flat organic 1% - 6% ◦ HVOR: ~(10%) Adj. Op Income $182 – $198 $182.5 0% - 8% ◦ Industrial: ~(9%) ◦ Aerospace: ~11% Adj. Ne
Slide 14: Key Messages – Looking Forward
Key Messages – Looking Forward Deliver strong outgrowth to market Foster a culture of innovation Long-term company outgrowth target of 400-600 bps Helping customers solve their mission-critical, hard-to- do engineering challenges Execute long-term strategy to drive organic revenue growth Reach our E
Slide 15: Appendix A: Other Financial Information
APPENDIX A: OTHER FINANCIAL INFORMATION
Slide 16: Q4-2022 GAAP Results
Q4-2022 GAAP Results $ and shares outstanding in millions, except EPS Q4-2022 Q4-2021 B/(W) Revenue $1,014.7 $934.6 8.6 % Gross Profit $340.8 $314.7 8.3 % (% of revenue) 33.6% 33.7% R&D $47.4 $40.1 (18.2)% (% of revenue) 4.7% 4.3% SG&A $87.6 $87.3 (0.4)% (% of revenue) 8.6% 9.3% Amortization of Inta
Slide 17: FY 2022 GAAP Results
FY 2022 GAAP Results $ and shares outstanding in millions, except EPS FY 2022 FY 2021 B/(W) Revenue $4,029.3 $3,820.8 5.5 % Gross Profit $1,317.2 $1,278.4 3.0 % (% of revenue) 32.7% 33.5% R&D $189.3 $159.1 (19.0)% (% of revenue) 4.7% 4.2% SG&A $370.6 $337.0 (10.0)% (% of revenue) 9.2% 8.8% Amortizat
Slide 18: Q4-2022 Non-GAAP Results
Q4-2022 Non-GAAP Results $ and shares outstanding in millions, except EPS Q4-2022 Q4-2021 B/(W) Revenue $1,014.7 $934.6 8.6 % Adj. Gross Profit $339.7 $321.8 5.6 % (% of revenue) 33.5% 34.4% R&D $47.4 $40.1 (18.2)% (% of revenue) 4.7% 4.3% Adj. SG&A $86.4 $82.6 (4.5)% (% of revenue) 8.5% 8.8% Adj. O
Slide 19: 2022 Non-GAAP Results
2022 Non-GAAP Results $ and shares outstanding in millions, except EPS FY 2022 FY 2021 B/(W) Revenue $4,029.3 $3,820.8 5.5 % Adj. Gross Profit $1,328.1 $1,294.9 2.6 % (% of revenue) 33.0% 33.9% R&D $189.3 $159.1 (19.0)% (% of revenue) 4.7% 4.2% Adj. SG&A $354.2 $321.7 (10.1)% (% of revenue) 8.8% 8.4
Slide 20: Q4-2022 Cash Flow Statement
Q4-2022 Cash Flow Statement $ in millions Q4-2022 Q4-2021 B/(W) Net Income $113.2 $112.0 1.1 % Depreciation & Amortization $71.9 $63.2 13.7 % Changes in Working Capital $40.5 ($7.4) NM Other ($0.7) ($6.8) 89.4 % Operating Cash Flow $224.9 $160.9 39.7 % Capital Expenditures ($39.6) ($44.0) 9.9 % Free
Slide 21: Balance Sheet
Balance Sheet $ in millions DEC 31, 2022 DEC 31, 2021 Total Assets $ 8,756.2 $ 8,613.8 Working Capital $ 1,596.1 $ 2,240.7 Intangibles, Net & Other Long-Term Assets $ 5,981.2 $ 5,536.8 $ in millions DEC 31, 2022 DEC 31, 2021 Cash & Equivalents $ 1,225.5 $ 1,709.0 Current Debt (1) $ 256.5 $ 6.8 Net C
Slide 22: Appendix B: GAAP to Non-GAAP Reconciliations
APPENDIX B: GAAP TO NON-GAAP RECONCILIATIONS
Slide 23: 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 24: Non-GAAP Measures – continued
Non-GAAP Measures – continued Organic or Constant Currency Measures – in discussing trends in the Company’s performance, we may refer to the percentage change of certain GAAP or non-GAAP financial measures in one period versus another, calculated on either a reported, constant currency, or organic b
Slide 25: Adjusted EBITDA
Adjusted EBITDA In thousands Period Total Sensata LTM 4Q 2022 3Q 2022 2Q 2022 1Q 2022 4Q 2021 Net income $ 310,685 $ 113,150 $ 140,253 $ 34,841 $ 22,441 $ 111,972 Interest expense, net 178,819 43,676 44,856 44,842 45,445 44,898 Provision for income taxes 86,017 11,988 46,421 20,020 7,588 578 Depreci
Slide 26: Organic Revenue Growth
Organic Revenue Growth Q4-2022 0 Constant Currency % Reported % Change Less: Acquisition & Organic Growth Less: FX Impact Change (GAAP) Divestitures, net (non-GAAP) (non-GAAP) Performance Sensing 10.6% (4.2%) 14.8% 2.2% 12.6% Sensing Solutions 3.0% (2.1%) 5.1% 2.2% 2.9% Sensata Total 8.6% (3.6%) 12.
Slide 27: Free Cash Flow
Free Cash Flow $ in thousands Q4 FY Total Sensata 2022 2021 Change 2022 2021 Change Net cash provided by operating activities $ 224,860 $ 160,925 39.7% $ 460,593 $ 554,151 (16.9%) Additions to property, plant and equipment and (39,640) (43,993) 9.9% (150,064) (144,403) (3.9%) capitalized software Fr
Slide 28: Net Debt and Net Leverage Ratio
Net Debt and Net Leverage Ratio $ in thousands As of Total Sensata 12/31/2022 9/30/2022 6/30/2022 3/31/2022 12/31/2021 Current portion of long-term debt, finance lease and other financing $ 256,471 $ 6,536 $ 6,566 $ 6,694 $ 6,833 obligations Finance lease and other financing obligations, less curren
Slide 29: Adjusted Taxes and Adjusted Tax Rate
Adjusted Taxes and Adjusted Tax Rate $ in thousands Q4 FY Total Sensata 2022 2021 2022 2021 Provision for income taxes $ 11,988 $ 578 $ 86,017 $ 50,337 Non-GAAP adjustments: Deferred income tax and other tax (benefit)/expense (10,627) (10,758) 17,828 (4,865) Current tax effect of non-GAAP adjustment
Slide 30: Adjusted Corporate and Other Expenses
Adjusted Corporate and Other Expenses In thousands Q4 FY Total Sensata 2022 2021 2022 2021 Corporate and other expenses $ (65,535) $ (72,752) $ (294,429) $ (288,111) Non-GAAP adjustments: Restructuring related and other (1,229) 5,569 11,896 9,948 Financing and other transaction costs 4,233 4,414 15,
Slide 31: Other GAAP to Non-GAAP Reconciliations
Other GAAP to non-GAAP Reconciliations $ in thousands (except EPS amounts) Q4-2022 Q4-2021 Operating Operating Operating Operating Total Sensata Net Income EPS Net Income EPS Income Margin Income Margin Reported (GAAP) $ 152,365 15.0% $ 113,150 $ 0.74 $ 149,692 16.0% $ 111,972 $ 0.70 Non-GAAP adjust