Sensata Technologies Holding Plc · NYSE:ST
Sensata Technologies — Q1 2023 Earnings Presentation
29 slides from Sensata Technologies's earnings presentation, Apr 25, 2023
Slide 1: Sensata First Quarter 2023 Earnings Presentation
Sensata First Quarter 2023 Earnings Presentation April 25, 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 Q1 2023
Key Performance Highlights Q1 2023 • Revenue of $998M in Q1-23 Strong financial • Outgrowth to market of 630 bps over the past twelve months; above the target range performance • Adj. operating profit of $193M, 60 bps improvement YoY • ANI of $141M grew 14.0% YoY, Adj. EPS of $0.92 grew 17.9% YoY El
Slide 4: Sensata is on track to achieve its Electrification growth vector goals
Sensata is on track to achieve its Electrification growth vector goals Growth driven by >$1.1B in Electrification new business wins over the past three years (2020-2022) $2B Dynapower launches validate potential in Solar Electrification revenue expected by 2026 Energy Generation BEV content remains
Slide 5: Innovative product development to solve regulatory-driven requirement
Innovative product development to solve regulatory-driven requirement New greenhouse gas emission regulation creates an opportunity for Sensata $40M* Sensata Gas Detection GAS new business wins to date DETECTION SENSOR • Government regulation reducing the consumption and production of hydrofluorocar
Slide 6: Q1-2023 Financials and Q2-2023 Financial Guide
Q1-2023 FINANCIALS AND Q2-2023 FINANCIAL GUIDE
Slide 7: Q1-2023 Financial Summary
Q1-2023 Financial Summary • Revenue growth YoY of 2.3% composed of: $ in millions, except EPS Q1-2023 Q1-2022 YoY B/(W) ◦ Organic revenue increased 4.7% Revenue $998.2 $975.8 2.3 % ◦ Acquisitions net of divestitures decreased revenue by (0.1)% Adjusted Operating Income $192.9 $182.5 5.7 % ◦ Foreign
Slide 8: Expecting steady improvement in Adj. Operating Margin through 2023 as volumes grow
Expecting steady improvement in Adj. Operating Margin through 2023 as volumes grow ADJUSTED OPERATING MARGIN • Adj. Operating Margin can improve steadily due to: ◦ Leverage on increased volumes from market growth or outgrowth 19.4% 19.3% ◦ Improved pricing offsetting inflationary material and 19.0%
Slide 9: Q1-2023: Performance Sensing
Q1-2023: Performance Sensing Revenue Segment Operating Income $751.5 $717.7 % operating margin $188.4 $180.6 25.1% 25.2% Q1-23 Q1-22 Q1-23 Q1-22 Q1-23 YoY Revenue Growth Reported Organic • Automotive revenue increase reflects market growth and Automotive 2.9% 6.0% pricing, partially offset by unfavo
Slide 10: Q1-2023: Sensing Solutions
Q1-2023: Sensing Solutions Revenue Segment Operating Income % operating margin $246.7 $258.1 $69.7 $72.5 28.3% 28.1% Q1-23 Q1-22 Q1-23 Q1-22 Q1-23 YoY Revenue Growth Reported Organic • Industrial revenue decline reflects weakness in HVAC and Industrial & Other (10.0)% (6.7)% appliance markets, net i
Slide 11: Corporate and Other Operating Expenses
Corporate and Other Operating Expenses $ in millions Q1-2023 Q4-2022 Q1-2022 YoY B/(W) • Adj. Corporate and Other decrease YoY Corporate and Other $62.4 $65.5 $76.1 18.0 % primarily due to cost containment, lower incentive compensation, and FX % Revenue 6.3% 6.5% 7.8% Adj. Corporate and Other $63.4
Slide 12: Repaid $250M of variable rate term loan in line with capital deployment strategy
Repaid $250M of variable rate term loan in line with capital deployment strategy; expect to repay the $200M balance during Q2 Free Cash Flow ($ millions) $60 $0.12 3.3x Quarterly Dividend Payment net leverage ratio as of March 31, 2023; $12 on May 24, 2023 for shareholders of record as of May 10, 20
Slide 13: Q2-23 Financial Guidance
Q2-23 Financial Guidance $ in millions, except EPS Q2-23 GUIDANCE Q2-22 B/(W) • Q2-23 end-market growth expected to be Revenue (2%) - 2% ~(2%) YoY $1,000 – $1,040 $1,020.5 ◦ Auto: ~4% organic (2%) - 2% ◦ HVOR: ~(7%) Adj. Op Income $190 – $206 $193.8 (2%) - 6% ◦ Industrial: ~(8%) ◦ Aerospace: ~4% Adj
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: Q1-2023 GAAP Results
Q1-2023 GAAP Results $ and shares outstanding in millions, except EPS Q1-2023 Q1-2022 B/(W) Revenue $998.2 $975.8 2.3 % Gross Profit $327.7 $318.7 2.8 % (% of revenue) 32.8% 32.7% R&D $45.9 $46.0 0.1 % (% of revenue) 4.6% 4.7% SG&A $86.2 $95.7 10.0 % (% of revenue) 8.6% 9.8% Amortization of Intangib
Slide 17: Q1-2023 Non-GAAP Results
Q1-2023 Non-GAAP Results $ and shares outstanding in millions, except EPS Q1-2023 Q1-2022 B/(W) Revenue $998.2 $975.8 2.3 % Adj. Gross Profit $324.9 $320.9 1.3 % (% of revenue) 32.6% 32.9% R&D $45.9 $46.0 0.1 % (% of revenue) 4.6% 4.7% Adj. SG&A $84.4 $90.6 6.9 % (% of revenue) 8.5% 9.3% Adj. Operat
Slide 18: Q1-2023 Cash Flow Statement
Q1-2023 Cash Flow Statement $ in millions Q1-2023 Q1-2022 B/(W) Net Income $86.4 $22.4 285 % Depreciation & Amortization $71.7 $68.9 4.1 % Changes in Working Capital ($71.4) ($103.2) (30.8)% Other $10.1 $59.2 (82.9)% Operating Cash Flow $96.9 $47.4 105 % Capital Expenditures ($36.9) ($35.7) (3.3)% F
Slide 19: Balance Sheet
Balance Sheet $ in millions MAR 31, 2023 DEC 31, 2022 Total Assets $ 8,584.9 $ 8,756.2 Working Capital $ 1,530.7 $ 1,596.1 Intangibles, Net & Other Long-Term Assets $ 5,944.7 $ 5,981.2 $ in millions MAR 31, 2023 DEC 31, 2022 Cash & Equivalents $ 1,034.1 $ 1,225.5 Current Debt $ 198.7 $ 256.5 Net Cas
Slide 20: Appendix B: GAAP to Non-GAAP Reconciliations
APPENDIX B: GAAP TO NON-GAAP RECONCILIATIONS
Slide 21: 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 22: Non-GAAP Measures – continued
Non-GAAP Measures – continued Free Cash Flow – is defined as 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 operat
Slide 23: Adjusted EBITDA
Adjusted EBITDA In thousands Period Total Sensata LTM 1Q 2023 4Q 2022 3Q 2022 2Q 2022 1Q 2022 Net income $ 374,661 $ 86,417 $ 113,150 $ 140,253 $ 34,841 $ 22,441 Interest expense, net 173,465 40,091 43,676 44,856 44,842 45,445 Provision for income taxes 102,155 23,726 11,988 46,421 20,020 7,588 Depr
Slide 24: Organic Revenue Growth
Organic Revenue Growth Q1-2023 0 Constant Currency % Reported % Change Less: Acquisition & Organic Growth Less: FX Impact Change (GAAP) Divestitures, net (non-GAAP) (non-GAAP) Performance Sensing 4.7% (2.7%) 7.4% 0.4% 7.0% Sensing Solutions (4.4%) (1.5%) (2.9%) (1.4%) (1.5%) Sensata Total 2.3% (2.3%
Slide 25: Free Cash Flow
Free Cash Flow $ in thousands Q1 Total Sensata 2023 2022 Change Net cash provided by operating activities $ 96,888 $ 47,355 104.6% Additions to property, plant and equipment and capitalized software (36,882) (35,711) (3.3%) Free cash flow $ 60,006 $ 11,644 415.3% 25 SENSATA Q1-2023 EARNINGS PRESENTA
Slide 26: Net Debt and Net Leverage Ratio
Net Debt and Net Leverage Ratio $ in thousands As of Total Sensata 3/31/2023 12/31/2022 9/30/2022 6/30/2022 3/31/2022 Current portion of long-term debt, finance lease and other financing $ 198,696 $ 256,471 $ 6,536 $ 6,566 $ 6,694 obligations Finance lease and other financing obligations, less curre
Slide 27: Adjusted Taxes and Adjusted Tax Rate
Adjusted Taxes and Adjusted Tax Rate $ in thousands Q1 Total Sensata 2023 2022 Provision for income taxes $ 23,726 $ 7,588 Non-GAAP adjustments: Deferred income tax and other tax expense/(benefit) 6,791 (8,335) Current tax effect of non-GAAP adjustments 3,055 1,167 Adjusted taxes $ 13,880 $ 14,756 A
Slide 28: Adjusted Corporate and Other Expenses
Adjusted Corporate and Other Expenses In thousands Q1 Total Sensata 2023 2022 Corporate and other expenses $ (62,441) $ (76,123) Non-GAAP adjustments: Restructuring related and other (1,429) 2,514 Financing and other transaction costs 2,619 3,727 Step-up depreciation and amortization 54 298 Deferred
Slide 29: Other GAAP to non-GAAP Reconciliations
Other GAAP to non-GAAP Reconciliations $ in thousands (except EPS amounts) Q1-2023 Q1-2022 Operating Operating Operating Operating Total Sensata Net Income EPS Net Income EPS Income Margin Income Margin Reported (GAAP) $ 148,842 14.9% $ 86,417 $ 0.56 $ 125,930 12.9% $ 22,441 $ 0.14 Non-GAAP adjustme