Slide 1: TE Connectivity Second Quarter 2023 Earnings
TE Connectivity Second Quarter 2023 Earnings April 26, 2023 EVERY CONNECTION COUNTS
Slide 2: Forward-Looking Statements and Non-GAAP Financial Measures
Forward-Looking Statements and Non-GAAP Financial Measures 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 a
Slide 3: Earnings Highlights
Earnings Highlights Q2 Sales & Adjusted EPS Exceeded Guidance • Sales of $4.16B, up 4% reported, up 8% organically Y/Y • Transportation up 12% organically Y/Y, with growth in all businesses • Industrial up 15% organically Y/Y, with growth in all businesses • Communications down 20% organically Y/Y,
Slide 4: Segment Orders Summary
Segment Orders Summary ($ in millions) Reported FY22 FY23 FY23 Q2 Growth Q2 Q1 Q2 Y/Y Q/Q • Sequential order improvement Transportation 2,549 2,154 2,412 (5)% 12% indicating overall stability in the Transportation and Industrial segments, with continued weakness Industrial 1,303 1,085 1,193 (9)% 10%
Slide 5: Transportation Solutions
Transportation Solutions $ in Millions Q2 Sales Q2 Business Performance Reported Y/Y Growth Rates Reported Organic Up 7% Automotive $1,795 9% 14% $2,314 $2,483 Organic Commercial 405 3% 7% Transportation Up 12% Sensors 283 6% 9% Q2 2022 Q2 2023 Transportation $2,483 7% 12% Solutions Q2 Adjusted Oper
Slide 6: Industrial Solutions
Industrial Solutions $ in Millions Q2 Sales Q2 Business Performance Reported Y/Y Growth Rates Reported Organic Up 12% Industrial Equipment $461 (1)% 3% $1,191 Aerospace, Defense Organic $1,068 298 14% 19% and Marine Up 15% Energy 233 27% 28% Q2 2022 Q2 2023 Medical 199 26% 26% Industrial Solutions $
Slide 7: Communications Solutions
Communications Solutions $ in Millions Q2 Sales Q2 Business Performance Reported Y/Y Growth Rates Reported Organic Down 22% Data & Devices $288 (27)% (25)% Organic $625 Appliances 198 (15)% (12)% $486 Down 20% Communications $486 (22)% (20)% Solutions Q2 2022 Q2 2023 Q2 Adjusted Operating Margin • D
Slide 8: Q2 Financial Summary
Q2 Financial Summary ($ in Millions, except per share amounts) Q2 FY22 Q2 FY23 Net Sales $ 4,007 $ 4,160 Operating Income $ 705 $ 537 Operating Margin 17.6% 12.9% Acquisition-Related Charges 10 8 Restructuring & Other Charges, Net* 21 119 Adjusted Operating Income $ 736 $ 664 Adjusted Operating Marg
Slide 9: Q2 Financial Performance
Q2 Financial Performance Sales Adjusted Operating Margin $ in Millions $4,007 $4,160 18.4% 16.0% Q2 2022 Q2 2023 Q2 2022 Q2 2023 Adjusted EBITDA 23.2% 20.9% Margin Adjusted EPS Free Cash Flow $ in Millions Q2 2023 EPS includes $0.17 +37% $1.81 $1.65 of FX & Tax $845 Y/Y headwinds Y/Y $615 Q2 2022 Q2
Slide 10: Additional Information
Additional Information EVERY CONNECTION COUNTS
Slide 11: Y/Y Q2 2023 Sales and Adjusted EPS
Y/Y Q2 2023 Sales Adjusted EPS (in millions) Q2 2022 Results $4,007 $1.81 Operational Performance 308 0.01 FX Impact (155) (0.15) Tax Rate Impact - (0.02) Q2 2023 Results $4,160 $1.65 11 Adjusted EPS is a non-GAAP financial measure; See Appendix for description and reconciliation.
Slide 12: Y/Y Q3 2023 Sales and Adjusted EPS Guidance
Y/Y Q3 2023 Sales Adjusted EPS (in millions) Q3 2022 Results $4,097 $1.86 Operational Performance (81) (0.15) FX Impact (16) (0.05) Tax Rate Impact - (0.01) Q3 2023 Guidance $4,000 $1.65 12 Adjusted EPS is a non-GAAP financial measure; See Appendix for description and reconciliation.
Slide 13: Q2 Balance Sheet & Cash Flow Summary
Q2 Balance Sheet & Cash Flow Summary Free Cash Flow and Working Capital Liquidity, Cash & Debt ($ in Millions) Q2 2022 Q2 2023 ($ in Millions) Q2 2022 Q2 2023 Cash from Operating Activities $413 $634 Beginning Cash Balance $982 $793 Free Cash Flow 242 446 Capital expenditures, net (170) (188) Divide
Slide 14: Appendix
Appendix EVERY CONNECTION COUNTS
Slide 15: Non-GAAP Financial Measures
Non-GAAP Financial Measures We present non-GAAP performance and liquidity measures as we believe it is appropriate for investors to consider adjusted financial measures in addition to results in accordance with accounting principles generally accepted in the U.S. (“GAAP”). These non-GAAP financial m
Slide 16: Non-GAAP Financial Measures (cont.)
Non-GAAP Financial Measures (cont.) • Adjusted EBITDA and Adjusted EBITDA Margin - represent net income and net income as a percentage of net sales, respectively, (the most comparable GAAP financial measures) before interest expense, interest income, income taxes, depreciation, and amortization, as
Slide 17: Segment Summary
Segment Summary For the Q uarte rs Ende d For the Six Months Ende d March 31, March 25, March 31, March 25, 2023 2022 2023 2022 ($ in millions) Ne t Sale s Ne t Sale s Ne t Sale s Ne t Sale s Transportation Solutions $ 2,483 $ 2,314 $ 4,742 $ 4,472 Industrial Solutions 1,191 1,068 2,251 2,120 Commun
Slide 18: Reconciliation of Net Sales Growth
Reconciliation of Net Sales Growth Change in Ne t Sale s for the Q uarte r Ende d March 31, 2023 ve rsus Ne t Sale s for the Q uarte r Ende d March 25, 2022 Ne t Sale s O rganic Ne t Sale s Acquisitions/ Growth (De cline ) Growth (De cline ) (1) Translation (2) (Dive stiture ) ($ in millions) Transp
Slide 19: Non-GAAP Reconciliation for Quarter Ended March 31, 2023
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Quarter Ended March 31, 2023 Adjustme nts Acquisition- Re structuring Re late d and O the r Adjuste d (1) (1) U.S. GAAP Charge s Charge s, Ne t (Non-GAAP) (2) ($ in millions, e xce pt pe r share data) Operating income:
Slide 20: Non-GAAP Reconciliation for Quarter Ended March 25, 2022
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Quarter Ended March 25, 2022 Adjustme nts Acquisition- Re structuring Re late d and O the r Adjuste d U.S. GAAP Charge s (1) Charge s, Ne t (1) Tax Ite ms (2) (Non-GAAP) (3) ($ in millions, e xce pt pe r share data) Ope
Slide 21: Non-GAAP Reconciliation for Six Months Ended March 31, 2023
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Six Months Ended March 31, 2023 Adjustme nts Acquisition- Re structuring Re late d and O the r Adjuste d U.S. GAAP Charge s (1) Charge s, Ne t (1) (Non-GAAP) (2) ($ in millions, e xce pt pe r share data) Operating incom
Slide 22: Non-GAAP Reconciliation for Six Months Ended March 25, 2022
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Six Months Ended March 25, 2022 Adjustme nts Acquisition- Re structuring Re late d and O the r Adjuste d U.S. GAAP Charge s (1) Charge s, Ne t (1)(2) Tax Ite ms (3) (Non-GAAP) (4) ($ in millions, e xce pt pe r share dat
Slide 23: Non-GAAP Reconciliation for Quarter Ended June 2022
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Quarter Ended June 24, 2022 Adjustme nts Acquisition- Re structuring Re late d and O the r Adjuste d U.S. GAAP Charge s (1) Charge s, Ne t (1)(2) Tax Ite ms (3) (Non-GAAP) (4) ($ in millions, e xce pt pe r share data) O
Slide 24: Non-GAAP Reconciliation for Year Ended September 30, 2022
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Year Ended September 30, 2022 Adjustme nts Acquisition- Re structuring Re late d and O the r Adjuste d U.S. GAAP Charge s (1) Charge s, Ne t (1)(2) Tax Ite ms (3) (Non-GAAP) (4) ($ in millions, e xce pt pe r share data)
Slide 25: Non-GAAP Reconciliation for Quarter Ended December 30, 2022
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Quarter Ended December 30, 2022 Adjustme nts Acquisition- Re structuring Re late d and O the r Adjuste d (1) (1) U.S. GAAP Charge s Charge s, Ne t (Non-GAAP) (2) ($ in millions, e xce pt pe r share data) Operating incom
Slide 26: Reconciliation of Free Cash Flow
Reconciliation of Free Cash Flow For the Q uarte rs Ende d For the Six Months Ende d March 31, March 25, March 31, March 25, 2023 2022 2023 2022 (in millions) Net cash provided by operating activities $ 634 $ 413 $ 1,215 $ 945 Net cash used in investing activities (139) (184) (404) (383) Net cash us
Slide 27: Reconciliation of Adjusted EBITDA and Adjusted EBITDA Margin
Reconciliation of Adjusted EBITDA and Adjusted EBITDA Margin For the Q uarte rs Ende d March 31, De ce mbe r 30, March 25, 2023 2022 2022 ($ in millions) Net income $ 433 $ 397 $ 560 (Income) loss from discontinued operations (8) 1 — Income tax expense 100 87 136 Other (income) expense, net 4 5 (5)
Slide 28: Reconciliation of Forward-Looking Non-GAAP Financial Measures
Reconciliation of Forward-Looking Non-GAAP Financial Measures to Forward-Looking GAAP Financial Measures O utlook for Q uarte r Ending June 30, O utlook for 2023 (1) Fiscal 2023 (1) Diluted earnings per share from continuing operations $ 1.56 Restructuring and other charges, net 0.07 Acquisition-rel