Sensata Technologies Holding Plc · NYSE:ST
Sensata Technologies — Q4 2015 Earnings Presentation
20 slides from Sensata Technologies's earnings presentation, Feb 2, 2016
Slide 1: Sensata Fourth Quarter and Full Year 2015 Earnings Summary
FEBRUARY 2016 SENSATA FOURTH QUARTER AND FULL YEAR 2015 EARNINGS SUMMARY
Slide 2: Forward-looking Statements
Forward–looking Statements In addition to historical facts, this earnings release, including any documents incorporated by reference herein, includes “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward– looking statements relate to a
Slide 3: Executing On Our Strategy
Executing On Our Strategy VALUE CREATION OPPORTUNITY INTACT Delivered double-digit revenue growth through acquisitions and content growth in 2015 Diversified secular growth beyond automotive through CST acquisition Improved productivity to grow core* margins to 21% in the fourth quarter Acquisition
Slide 4: 2015 Summary
2015 Summary ANOTHER YEAR OF DOUBLE–DIGIT REVENUE GROWTH, 2015 CORE MARGIN OF 19.7% 2015 Revenue Growth 23% NBO WINS* Acquired Growth 26% $2,975 Foreign Exchange -3% $2,410 $400M $340M $390M $1,540 Organic Growth 0% Auto Sensing 6% HVOR Sensing -6% 2010 2014 2015 Other -7% 2013 2014 2015 Sensata gro
Slide 5: M&A Provides Sensata with Earnings Growth, Even In Weak Market Environments
M&A Provides Sensata with Earnings Growth, Even In Weak Market Environments GROWTH IN ACQUIRED MARGINS & LOWER INTEGRATION EXPENSE FUELS EARNINGS GROWTH TOTAL EPS FROM ACQUISITIONS • Acquisitions strengthen business model while reducing Auto exposure $0.60–$0.65 • CST adds 10% of non–Auto revenue an
Slide 6: Catalysts for Sensor Growth
Catalysts for Sensor Growth GROWING APPLICATIONS & CHINA SENSOR UNIT GROWTH (on no end-market growth) PENETRATION RATE OF AUTOS Per 100 People Example Applications CAGR 78.6 57.5 Gas Direct Injection 8% Electronic Stability Control 4% 6.9 Dual Clutch 13% North America Europe China Tire Pressure Sens
Slide 7: Sensing Content in Electrified & All-Electric Vehicles
Sensing Content in Electrified & All–Electric Vehicles SENSATA ALREADY HAS SIGNIFICANT CONTENT IN EVs, & INCREASING Top row: TPMS Tire Pressure Monitoring Sensor, XFF eXtra Small Form Factor Brake Pressure Sensor, Position Sensors Bottom row: SFF Small Form Factor Brake Pressure Sensor, HVAC Pressur
Slide 8: Q4 2015 Financial Summary
Q4 2015 Financial Summary Reported Q4 2014 Q4 2015 Growth Net Revenue $705.3M $726.5M +3.0% Adj. EBITDA $158.7M $177.9M +12.1% Adj. EBIT $138.8M $154.9M +11.6% Adj. Net Income $97.7M $113.3M +16.0% Adj. EPS $0.57 $0.66 +15.8% Free Cash Flow $59.3M $122.5M +106.5% RD&E index 7.4% 7.3% favorable by 10
Slide 9: Q4 2015 Review: Performance Sensing
Q4 2015 Review: Performance Sensing NET REVENUE PROFIT FROM OPERATIONS PRODUCTIVITY GAINS EXPAND MARGIN $549.3M $572.1M $150.9M $142.7M 26.0% 26.4% Q4 2014 Q4 2015 Q4 2014 Q4 2015 % of ST Net Q4 Growth y/y Revenue Reported Organic • 5% organic unit growth overall Automotive (inc.TPMS) 67% 5% 4% • Au
Slide 10: Q4 2015 Review: Sensing Solutions
Q4 2015 Review: Sensing Solutions NET REVENUE PROFIT FROM OPERATIONS SUSTAINED HIGH MARGIN PERFORMANCE $156.0M $154.3M $48.5M $48.7M 31.1% 31.5% Q4 2014 Q4 2015 Q4 2014 Q4 2015 % of ST Net Q4 Growth y/y Revenue Reported Organic • Slowdown in Industrial markets Sensing Solutions 21% (1)% (10)% • Weak
Slide 11: 2016 Financial Guidance
2016 Financial Guidance FY 2015 FY 2016 Guide Reported Organic Excludes FX, CST, Exited business Net Revenue $2,975M $3,140 – $3,280M 6% – 10% 0% – 3% Adj. Net Income $472.0M $470 – $515M 0% – 9% 4% – 11% Adj. EPS $2.75 $2.74 – $3.00 0% – 9% 4% – 11% Diluted Shares Outstanding 171.5M 171.7M $0.08 –
Slide 12: 2016 Financial Guidance (Organic Revenue)
2016 Financial Guidance % of 2015 ST 2016 Guide October Framework Revenue Midpoint Auto (ex–TPMS) 45% Up 5% – 6% 5% – 6% ORGANIC TPMS 22% In line with market 0% HVOR 12% Up low single (6)% – (8)% Sensing Solutions 21% Up low single (1)% – 0% Acquisition (CST) <1% ~10% ~10% Exited businesses ~(0.7)%
Slide 13: Q1 2016 Financial Guidance
Q1 2016 Financial Guidance Q1 2015 Q1 2016 Guide Reported Organic Excludes FX, CST, Exited business Net Revenue $750.7M $770 – $810M 3% – 8% (3)% – 0% Adj. Net Income $110.9M $104 – $114M (6)% – 3% (2)% – 7% Adj. EPS $0.65 $0.61 – $0.67 (6)% – 3% (2)% – 7% Diluted Shares Outstanding 171.3M 171.5M •
Slide 14: Financial Liquidity
Financial Liquidity STRONG CASH FLOW GENERATION FUELS ROBUST CAPITAL ALLOCATION FREE CASH FLOW NET LEVERAGE RATIO 4.6x 4.4x ~$375M 3.7 – 3.9x $356M $238M 71% 67% 54% 2014 2015 2016 E 2014 2015 2016 E • FCF grows from higher earnings and efficiency • Target net leverage ratio to be below 3x • $350–$4
Slide 15: Sensata Will Outperform
Sensata Will Outperform Sensata Wins In Sensing, outperforming markets with leading margins Acquisitions diversify end–market exposure and provide earnings leverage Double–digit long–term revenue and earnings CAGRs Strong cash generation and disciplined capital allocation Sensata Generates I
Slide 16: Appendix
APPENDIX SENSATA FOURTH QUARTER 2015 EARNINGS SUMMARY
Slide 17: Sensata's Financial Framework
Sensata’s Financial Framework % Net Revenue 2015 Target Range Highlights Adj. Gross Margin 34.9% 36% – 38% Productivity, Integration synergies Invest for NBOs R&D 4.2% 3% – 4% Tech leadership position RDE 7.4% 6% – 7% Included in COR and R&D lines Operational efficiency Adj. SG&A 8.5% 7% –
Slide 18: CST Extends Sensata Beyond Automotive
CST Extends Sensata Beyond Automotive 2015 REVENUE PRO–FORMA FOR CST ACQUISITION 19% 3% 5% 10% 2% ADDITIONAL NON–AUTO 5% $3.3B 25% REVENUE in 2015 Pro-forma 4% Revenue 6% N.A. Automotive Europe Automotive Asia & ROW Automotive HVOR 3% 11% 17% Industrial HVOR REVENUE Appliance and HVAC Aerospace 50%
Slide 19: GAAP to Non-GAAP Reconciliation
GAAP to Non–GAAP Reconciliation Sensata Technologies Holding N.V. Reconciliation of GAAP Net Income to Adjusted EBITDA and Adjusted EBIT ($ in 000s) Quarter Ended Quarter Ended Quarter Ended Quarter Ended Year Ended Mar 31, 2015 Jun 30, 2015 Sep 30, 2015 Dec 31, 2015 Dec 31, 2015 Net income $35,355
Slide 20: Non-GAAP Measures
Non–GAAP Measures This presentation includes references to Adjusted net income, Adjusted EBITDA, Net debt, Net leverage ratio and free cash flow. Adjusted net income and Adjusted EBITDA are non-GAAP financial measures. The Company defines Adjusted net income as follows: Net income before certain res