Sensata Technologies Holding Plc · NYSE:ST
Sensata Technologies — Q1 2021 Earnings Presentation
32 slides from Sensata Technologies's earnings presentation, Apr 27, 2021
Slide 1: Sensata First Quarter 2021 Earnings Presentation
SENSATA FIRST QUARTER 2021 EARNINGS PRESENTATION April 27, 2021
Slide 2: Forward-Looking Statements and Non-GAAP Measures
Forward-Looking Statements and Non-GAAP Measures Safe Harbor Statement This earnings release contains "forward-looking statements" within the meaning of the Private Securities Litigation Act of 1995, which relate to future events and are subject to risks and uncertainties. The forward-looking statem
Slide 3: Q1-2021 GAAP Results
Q1-2021 GAAP Results $ and shares outstanding in millions, except EPS Q1-2021 Q1-2020 B/(W) Revenue $942.5 $774.3 21.7 % Gross Profit $307.2 $207.9 47.8 % (% of revenue) 32.6% 26.8% R&D $36.0 $34.5 (4.4)% (% of revenue) 3.8% 4.4% SG&A $77.1 $77.2 0.1 % (% of revenue) 8.2% 10.0% Amortization of Intan
Slide 4: Key Performance Highlights
Key Performance Highlights • Record revenue of $942.5M grew 21.7% in Q1-21 from the prior-year period Continuing to • Adjusted operating Income of $198.1M in Q1-21; operating margin increased 330 bps execute well with • Demonstrates market leadership and the strength and flexibility of organizationa
Slide 5: Sensata aims to be a leading provider of mission-critical sensor-rich hardware and software solutions
Sensata aims to be a leading provider of mission-critical sensor-rich hardware and software solutions to help customers transition to an Electrified future Sensata is expanding its Electrification capabilities and opportunities CO2 Reduction • Opportunity is much broader than just auto EVs Storage D
Slide 6: Significant progress in Heavy Vehicle and Industrial electrification
Significant progress in Heavy Vehicle and Industrial electrification Partner of choice for high-voltage Gaining momentum in fast electrical protection solutions to leading emerging Electric Truck segment charging solutions providers with key partnerships Acquisition of Lithium Balance opens up new o
Slide 7: EV content per vehicle represents an average ~20% uplift from comparable-class ICE
EV content per vehicle represents an average ~20% uplift from comparable-class ICE Electric Vehicle Internal Combustion Engine NA and EU EV CPV: ~$50 NA and EU CPV: ~$40 EV CPV +20% by Vehicle Class ICE-Specific components Powertrain Agnostic New EV-Specific components components for ICE or EV • ~$2
Slide 8: Xirgo provides data insights to Transportation and Logistics customers
Xirgo provides data insights to Transportation and Logistics customers Acquisition of Xirgo Technologies (closed April 1) brings new capabilities and customers • Extends sensing portfolio into telematics and asset tracking and adds cellular gateways and cloud infrastructure • Propels Smart & Connect
Slide 9: Q1-21 Financials & 2021 Outlook
Q1-21 FINANCIALS & 2021 OUTLOOK
Slide 10: Q1-2021 Financial Summary
Q1-2021 Financial Summary $ in millions, except EPS Q1-2021 Q1-2020 B/(W) • Revenue growth YoY of 21.7% composed of: Revenue $942.5 $774.3 21.7 % • Organic revenue increased 18.8% Adjusted Operating Income $198.1 $136.7 44.9 % • Foreign exchange increased revenue by 2.9% % Revenue 21.0% 17.7% Adjust
Slide 11: Sensata outgrew its end markets in Q1-21
Sensata outgrew its end markets by 790 bps in Q1-21 PERCENT OF REVENUES Heavy Vehicle, Off-Road (1,070 bps of outgrowth) 32.8% 22.1% ~19% Performance Sensing • Outgrowth led by China VI emissions regulations, operator controls • Three year average outgrowth: 780 bps (600-800 bps target range) End Or
Slide 12: Q1-2021: Performance Sensing
Q1-2021: Performance Sensing Revenue Segment operating income % operating margin* $714.5 $568.7 $195.8 $135.0 27.4% 26.9%* 23.7% 15.8%* Q1-21 Q1-20 Q1-21 Q1-20 Q1-21 YoY REVENUE GROWTH REPORTED ORGANIC • Record revenue; Customers' production recovery and newly launched programs drove increase Automo
Slide 13: Q1-2021: Sensing Solutions
Q1-2021: Sensing Solutions Revenue Segment operating income % operating margin* $228.0 $205.6 $66.9 $56.5 29.3% 27.5% Q1-21 Q1-20 Q1-21 Q1-20 • Revenue increase YoY reflects HVAC market Q1-21 YoY REVENUE GROWTH REPORTED ORGANIC recovery and new Electrification launches Industrial & Other 19.5% 16.8%
Slide 14: Corporate and Other Operating Expenses
Corporate and Other Operating Expenses $ in millions Q1-2021 Q1-2020 B/(W) Corporate and Other $68.6 $95.4 28.0 % • Adj. Corporate and Other increase % Revenue 7.3% 12.3% primarily due to higher Megatrend investments and higher global incentive Adj. Corporate and Other $61.8 $53.2 (16.2)% compensati
Slide 15: Q1-2021 Non-GAAP Results
Q1-2021 Non-GAAP Results $ and shares outstanding in millions, except EPS Q1-2021 Q1-2020 B/(W) Revenue $942.5 $774.3 21.7 % Adj. Gross Profit $309.6 $243.9 27.0 % (% of revenue) 32.8% 31.5% R&D $36.0 $34.5 (4.4)% (% of revenue) 3.8% 4.4% Adj. SG&A $72.7 $71.0 (2.4)% (% of revenue) 7.7% 9.2% Adj. Op
Slide 16: Strong free cash generation enables investment in growth and enhances balance sheet
Strong free cash generation enables investment in growth and enhances Sensata's balance sheet Free Cash Flow ($ millions) $240 $100 $69 $77 $45 Q1-20 Q2-20 Q3-20 Q4-20 Q1-21 $77M $27M Q1-21 free cash flow, 56% conversion rate; Q1-21 Capital Expenditures 85% conversion rate expected in 2021 $160M-$17
Slide 17: Q2-21 Financial Guidance
Q2-21 Financial Guidance $ in millions, except EPS Q2-21 GUIDANCE Q2-20 B/(W) • Q2-21 market expansion expected to be ~49% YoY Revenue $960 – $990 $576.5 67% - 72% • Auto: ~69% organic 58% - 63% • HVOR: ~57% • Industrial: ~15% • Aerospace: ~19% Adj. Op Income $195 – $205 $75.0 160% - 173% • Guide no
Slide 18: FY-21 Updated Financial Guidance
FY-21 Updated Financial Guidance $ in millions, except EPS FY-21 GUIDANCE FY-20 B/(W) • FX expected to increase revenue by ~$58M at mid-point Revenue $3,675 – $3,825 $3,045.6 21% - 26% • Adjusted EPS: $0.03 increase from organic 16% - 21% FX at mid-point • Includes nine months of Xirgo Adj. Op Incom
Slide 19: We continue to expect strong market growth in 2021
We continue to expect strong market growth in 2021 Auto production down slightly from earlier expectations given semiconductor chip shortage, Heavy Vehicle and Industrial show improvement OEM Production Growth Rates 12% global auto production growth* 25% 20% 17% 15% 13% 9% 8% 6% 4% 3% 1% (4)% Aerosp
Slide 20: Key Messages – Looking Forward
Key Messages – Looking Forward Strong results well above rapidly M&A and technology partnerships are improving markets important value creation amplifiers Strong Q1-21 performance enabled by strength • Acquisition of Xirgo provides substantial footprint in and flexibility of organizational model Sma
Slide 21: Appendix A: Other Financial Information
APPENDIX A OTHER FINANCIAL INFORMATION
Slide 22: Q1-2021 Cash Flow Statement
Q1-2021 Cash Flow Statement $ in millions Q1-2021 Q1-2020 B/(W) Net Income $53.7 $8.4 537.3 % Depreciation & Amortization $63.3 $67.8 (6.7)% Changes in Working Capital ($58.3) ($21.5) 170.9 % Other $45.8 $43.9 4.4% Operating Cash Flow $104.5 $98.5 6.1 % Capital Expenditures ($27.2) ($29.5) 8.0 % Fre
Slide 23: Balance Sheet
Balance Sheet $ in millions MAR 31, 2021 DEC 31, 2020 Total Assets $ 7,945.2 $ 7,844.2 Working Capital $ 2,332.6 $ 1,484.8 Intangibles, Net & Other Long-Term Assets $ 4,839.1 $ 4,864.2 $ in millions MAR 31, 2021 DEC 31, 2020 Cash & Equivalents $ 1,893.9 $ 1,862.0 Current Debt (1) $ 9.7 $ 757.2 Net C
Slide 24: Appendix B: GAAP to Non-GAAP Reconciliations
APPENDIX B GAAP TO NON-GAAP RECONCILIATIONS
Slide 25: 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 26: Non-GAAP Measures – continued
Non-GAAP Measures – continued Free Cash Flow – represents net cash provided by/(used in) operating activities less additions to property, plant and equipment and capitalized software. We believe free cash flow is useful to management and investors as a measure of cash generated by business operation
Slide 27: Adjusted EBITDA
Adjusted EBITDA $ in thousands Period Total Sensata LTM 1Q 2021 4Q 2020 3Q 2020 2Q 2020 1Q 2020 Net income/(loss) $ 209,588 $ 53,733 $ 121,667 $ 76,729 $ (42,541) $ 8,431 Interest expense, net 176,397 44,043 47,417 44,129 40,808 39,403 Provision for/(benefit from) income taxes 23,152 20,281 (13,751)
Slide 28: Organic Revenue Growth
Organic Revenue Growth Q1-2021 0 Constant Currency % Reported % Change Less: Acquisition & Organic Growth Less: FX Impact Change (GAAP) Divestitures, net (non-GAAP) (non-GAAP) Performance Sensing 25.6% 3.2% 22.4% —% 22.4% Sensing Solutions 10.9% 2.1% 8.8% —% 8.8% Sensata Total 21.7% 2.9% 18.8% —% 18
Slide 29: Free Cash Flow
Free Cash Flow $ in thousands Q1 Total Sensata 2021 2020 Change Net cash provided by operating activities $ 104,511 $ 98,544 6.1% Additions to property, plant and equipment and capitalized software (27,172) (29,547) 8.0% Free cash flow $ 77,339 $ 68,997 12.1% Q1-2021 EARNINGS SUMMARY 29
Slide 30: Net Debt and Net Leverage Ratio
Net Debt and Net Leverage Ratio $ in thousands As of Total Sensata 3/31/2021 12/31/2020 9/30/2020 6/30/2020 3/31/2020 Current portion of long-term debt, finance lease and other financing $ 9,678 $ 757,205 $ 7,049 $ 407,042 $ 7,095 obligations (1) Finance lease and other financing obligations, less c
Slide 31: Adjusted Taxes and Adjusted Tax Rate
Adjusted Taxes and Adjusted Tax Rate $ in thousands Q1 Total Sensata 2021 2020 Provision for/(benefit from) income taxes $ 20,281 $ (1,516) Non-GAAP adjustments: Deferred income tax and other tax expense/(benefit) 10,122 (4,931) Current tax effect of non-GAAP adjustments (4,052) (9,269) Adjusted tax
Slide 32: Other GAAP to Non-GAAP Reconciliations
Other GAAP to non-GAAP Reconciliations $ in thousands Q1-2021 Q1-2020 Operating Operating Operating Operating Total Sensata Net income EPS Net income EPS income margin income margin Reported (GAAP) $ 157,454 16.7% $ 53,733 $ 0.34 $ 58,599 7.6% $ 8,431 $ 0.05 Non-GAAP adjustments: Restructuring relat
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