Slide 1: Q4 2016 Earnings
Q4 2016 Earnings November 2, 2016
Slide 2: Forward-Looking Statements and Non-GAAP Measures
Forward-Looking Statements and Non-GAAP 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 are subject
Slide 3: Q4 Highlights
Q4 Highlights Strong quarter with record adjusted EPS and free cash flow • Sales of $3.3B in line with guidance • Adjusted EPS of $1.27, above the high end of guidance • Excluding the additional week in Q4, year-over-year sales were up 2% organically and adjusted EPS were up 27% to $1.14, a new reco
Slide 4: FY16 Highlights
FY16 Highlights Delivered solid performance in a challenging economic environment • Sales of $12.24B, flat Y/Y and up 2% organically • Delivered mid-single digit organic growth in Transportation • Industrial Solutions showed sequential 2H growth following 1H supply chain corrections • SubCom grew 25
Slide 5: Segment Orders Summary
Segment Orders Summary ($ in millions) FY15 FY16 FY16 FY16 Q4 Q3 Q4 Q4 14 Week 13 Week • Transportation Y/Y growth in all regions with Transportation 1,480 1,659 1,854 1,704 significant strength in China Industrial 720 879 888 832 • Y/Y growth in all Industrial businesses excluding Oil and Gas Commu
Slide 6: Transportation Solutions
Transportation Solutions $ in Millions Sales Business Performance Actual Y/Y Growth Rates 14 Week 13 Week Actual Organic Organic Up 15% $1,736 Automotive $1,311 16% 15% 6% Organic $1,508 Commercial 215 13% 12% 4% Up 13% Q4 2015 Q4 2016 Transportation Sensors 210 11% 4% (2)% Reported Organic Transpor
Slide 7: Industrial Solutions
Industrial Solutions $ in Millions Sales Business Performance Y/Y Growth Rates 14 Week 13 Week Actual Actual Organic Organic Up 16% $919 Industrial Equipment $427 25% 1% (7)% Organic $792 Aerospace & 269 14% 13% 6% Defense Up 6% Q4 2015 Q4 2016 Oil and Gas 30 (25)% (23)% (27)% Reported Organic Energ
Slide 8: Communications Solutions
Communications Solutions $ in Millions Sales Business Performance Actual Y/Y Growth Rates 14 Week 13 Week Actual Organic Organic Down 1% $684 $677 SubCom $239 18% 18% 13% Organic Appliances 176 11% 10% 3% Up 6% Q4 2015 Q4 2016 Data & Devices 262 (19)% (6)% (13)% Reported Organic Communications $677
Slide 9: Q4 Financial Summary
Q4 Financial Summary 14 Week 13 Week ($ in Millions, except per share amounts) Q4 FY15 Q4 FY16 Q4 FY16 Net Sales $ 2,984 $ 3,332 $ 3,094 Operating Income $ 407 $ 517 $ 462 Operating Margin 13.6% 15.5% 14.9% Acquisition Related Charges 11 4 4 Restructuring & Other Charges, net 70 30 30 Adjusted Opera
Slide 10: Q4 Operating Metrics
Q4 Operating Metrics $ in Millions Adjusted Gross Margin Percentage Free Cash Flow 33.2% $594 32.5% $389 Q4 2015 Q4 2016 Q4 2015 Q4 2016 Adjusted Operating Margin Adjusted EBITDA Margin 21.7% 20.9% 16.4% 16.5% Q4 2015 Q4 2016 Q4 2015 Q4 2016 10 Adjusted Gross Margin Percentage, Free Cash Flow, Adjus
Slide 11: Q1 Outlook
Q1 Outlook Guidance* Highlights • Automotive growth expected in China and EMEA, with mid single digit growth expected on 2% global auto Transportation Up Mid Single Digits production growth; Commercial Transportation growth Solutions Up Mid Single Digits Organic expected above market, with strength
Slide 12: FY17 Outlook vs 52 week prior year
FY17 Outlook* vs 52 week prior year Guidance* Highlights • Expect Automotive organic growth in the mid-single digits on ~1% increase in global auto production, Transportation Up Mid Single Digits reflecting content growth trends; Commercial Solutions Transportation expected to perform better than ma
Slide 13: Additional Information
Additional Information 13
Slide 14: Q4 FY16 Impact of Additional Week
Q4 FY16 Impact of Additional Week Q4 13 Week Impact of Sales Actual Organic Q4 Sales 14th Week (Normalized) Growth Growth Automotive $1,311 $(102) $1,209 7.2% 6.3% Commercial Transportation 215 (15) 200 5.3 4.2 Sensors 210 (13) 197 3.7 (2.3) Transportation Solutions 1,736 (130) 1,606 6.5 4.9 Industr
Slide 15: Y/Y Q4 2016 Sales and Adjusted EPS
Y/Y Q4 2016 Sales Adjusted (in millions) EPS Q4 2015 Results $2,984 $0.90 FX Benefit 11 0.01 Operational Performance 99 0.23 Q4 2016 Results (13 Weeks) $3,094 $1.14 Additional Week 238 0.13 Q4 2016 Results* $3,332 $1.27 Net Sales Excluding the Impact of the Additional Week, Adjusted EPS Excluding th
Slide 16: Y/Y 2016 Sales and Adjusted EPS
Y/Y 2016 Sales Adjusted (in millions) EPS 2015 Results $12,233 $3.60 FX Impact (254) (0.07) Operational Performance 21 0.42 2016 Results (52 Weeks) $12,000 $3.95 2016 Growth in Constant Currency - 12% Additional Week 238 0.13 2016 Results* $12,238 $4.08 2016 Growth in Constant Currency 2% 15% Double
Slide 17: Y/Y Q1 2017 Sales and Adjusted EPS
Y/Y Q1 2017 Sales Adjusted (in millions) EPS Q1 2016 Results $2,833 $0.84 Operational Performance 82 0.13 Acquisitions / Divestitures, net 64 0.02 FX Benefit 21 0.01 Q1 2017 Guidance $3,000 $1.00 Guidance Range: Sales $2.95B to $3.05B Adjusted EPS $0.98 to $1.02 17 Adjusted EPS is a non-GAAP measure
Slide 18: Y/Y 2017 Sales and Adjusted EPS
Y/Y 2017 Sales Adjusted (in millions) EPS 2016 Results* $12,238 $4.08 Additional Week (238) (0.13) 2016 – 52 Weeks $12,000 $3.95 Operational Performance 416 0.33 Acquisitions / Divestitures, net 184 0.06 FX Impact N/M N/M 2017 Guidance $12,600 $4.34 Guidance Range: Sales of $12.3B - $12.9B Adjusted
Slide 19: Q4 Balance Sheet & Cash Flow Summary
Q4 Balance Sheet & Cash Flow Summary Free Cash Flow and Working Capital Liquidity, Cash & Debt Liquidity Summary ($ in Millions) Q4 2015 Q4 2016 ($ in Millions) Q4 2015 Q4 2016 Cash from Continuing Operations $540 $782 Beginning Cash Balance $701 $694 Free Cash Flow 389 594 Capital expenditures, net
Slide 20: Appendix
Appendix 20
Slide 21: Non-GAAP Measures
Non-GAAP Measures “Organic Net Sales Growth,” “Organic Net Sales Growth Excluding the Impact of the Additional Week,” “Net Sales Excluding the Impact of the Additional Week,” “Net Sales Growth Excluding the Impact of the Additional Week,” “Net Sales in Constant Currency,” “Adjusted Gross Margin,” “A
Slide 22: Non-GAAP Measures (cont.)
Non-GAAP Measures (cont.) Adjusted Income Tax Expense – represents income tax expense (the most comparable GAAP measure) after adjusting for the tax effect of special items including charges related to restructuring and other charges, acquisition related charges, impairment charges, other income or
Slide 23: Segment Summary for the Quarter & Year Ended September 30, 2016
Segment Summary for the Quarter & Year Ended September 30, 2016 Ne t Sale s O pe rating Adjuste d O pe rating For the Q uarte rs Ende d Y/Y Actual Y/Y O rganic Margin for the Margin for the Se pte mbe r 25, Se pte mbe r 30, Sale s Sale s Q uarte r Ende d Q uarte r Ende d Segment 2015 2016 Growth Gro
Slide 24: Reconciliation of Net Sales Growth – Q4 16 vs. Q4 15
Reconciliation of Net Sales Growth– Q4 16 vs. Q4 15 Pe rce ntage of Change in Ne t Sale s for the Q uarte r Ende d Se pte mbe r 30, 2016 Se gme nt's Total ve rsus Ne t Sale s for the Q uarte r Ende d Se pte mbe r 25, 2015 Ne t Sale s for the Acquisitions Q uarte r Ende d Total Translation (1) (Dive
Slide 25: Reconciliation of Non-GAAP to GAAP, Quarter Ended September 30, 2016
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Quarter Ended September 30, 2016 Adjustme nts Re structuring Acquisition and O the r Re late d Charge s Adjuste d U.S. GAAP Charge s (1)(2) (Cre dits), Ne t (2) (Non-GAAP) (3) ($ in millions, e xce pt pe r share data) O
Slide 26: Reconciliation of Non-GAAP to GAAP, Quarter Ended June 24, 2016
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Quarter Ended June 24, 2016 Adjustme nts Acquisition Re structuring Re late d and O the r Tax Adjuste d U.S. GAAP Charge s (1)(2) Charge s, Ne t (2) Ite ms (3) (Non-GAAP) (4) ($ in millions, e xce pt pe r share data) Op
Slide 27: Reconciliation of Non-GAAP to GAAP, Quarter Ended September 25, 2015
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Quarter Ended September 25, 2015 Adjustme nts Acquisition Re structuring Re late d and O the r Tax Adjuste d U.S. GAAP C harge s (1)(2) Charge s, Ne t (2) Ite ms (3) (Non-GAAP) (4) ($ in millions, e xce pt pe r share da
Slide 28: Impact of Additional Week for Q4 2016
Impact of Additional Week for Q4 2016 Change in Ne t Sale s for the Q uarte r Ende d C hange in O rganic Ne t Sale s for the Q uarte r Ende d Se pte mbe r 30, 2016 ve rsus Ne t Sale s for the Se pte mbe r 30, 2016 ve rsus O rganic Ne t Sale s for the For the Q uarte r Ende d Se pte mbe r 30, 2016 Q
Slide 29: Reconciliation of Net Sales Growth – 2016 vs. 2015
Reconciliation of Net Sales Growth– 2016 vs. 2015 Pe rce ntage of C hange in Ne t Sales for the Ye ar Ende d Se pte mbe r 30, 2016 Se gme nt's Total ve rsus Ne t Sale s for the Ye ar Ende d Se pte mbe r 25, 2015 Ne t Sale s for the Acquisitions Ye ar Ende d Total Translation (1) (Divestiture ) O rga
Slide 30: Reconciliation of Non-GAAP to GAAP, Year Ended September 30, 2016
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Year Ended September 30, 2016 Adjustme nts Restructuring Acquisition and O the r Re late d Charge s Tax Adjuste d U.S. GAAP Charge s (1)(2) (Cre dits), Net (2) Ite ms (3) (Non-GAAP) (4) ($ in millions, exce pt per share
Slide 31: Reconciliation of Non-GAAP to GAAP, Year Ended September 25, 2015
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Year Ended September 25, 2015 Adjustme nts Acquisition Re structuring Re late d and O the r Tax Adjuste d U.S. GAAP C harge s (1)(2) Charges, Net (2) Ite ms (3) (Non-GAAP) (4) ($ in millions, e xce pt pe r share data) O
Slide 32: Impact of Additional Week for Fiscal 2016
Impact of Additional Week for Fiscal 2016 Change in Net Sales for Fiscal 2016 Change in O rganic Net Sales for Fiscal 2016 Fiscal 2016 versus Net Sale s for Fiscal 2015 versus O rganic Net Sales for Fiscal 2015 (2) Adjustment Adjustment Adjustment 53 Weeks Impact of 52 Wee ks 53 We eks Impact of 52
Slide 33: Reconciliation of Non-GAAP to GAAP, Quarter Ended December 25, 2015
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Quarter Ended December 25, 2015 Adjustme nts Acquisition Re structuring Re late d and O the r Tax Adjuste d (1)(2) (2) (3) U.S. GAAP Charge s C harge s, Ne t Ite ms (Non-GAAP) (4) ($ in millions, e xce pt pe r share dat
Slide 34: Reconciliation of Gross Margin & Gross Margin Percentage
Reconciliation of Gross Margin & Gross Margin Percentage For the Q uarte rs Ende d For the Ye ars Ende d Se pte mbe r 25, Se pte mbe r 30, Se pte mbe r 25, Se pte mbe r 30, 2015 2016 2015 2016 ($ in millions) Net Sales $ 2,984 $ 3,332 $ 12,233 $ 12,238 Cost of Sales 2,016 2,228 8,146 8,205 Gross Mar
Slide 35: Reconciliation of Free Cash Flow
Reconciliation of Free Cash Flow For the Q uarte rs Ende d For the Years Ende d Septembe r 25, September 30, September 25, Septe mber 30, 2015 2016 2015 2016 (in millions) Net cash provided by operating activities: Net cash provided by continuing operating activities $ 540 $ 782 $ 1,619 $ 2,019 Net
Slide 36: Reconciliation of Adjusted EBITDA Margin
Reconciliation of Adjusted EBITDA Margin For the Q uarters Ende d For the Ye ars Ende d Septe mbe r 25, June 24, Septe mber 30, Septe mber 25, Se ptember 30, 2015 2016 2016 2015 2016 ($ in millions) Net income $ 1,040 $ 839 $ 437 $ 2,420 $ 2,009 Income from discontinued operations (904) (48) - (1,18
Slide 37: Reconciliation of Forward-Looking Non-GAAP Measures for Q1 2017 and Fiscal 2017
Reconciliation of Forward-Looking Non-GAAP Financial Measures to Forward-Looking GAAP Financial Measures for Q1 2017 and Fiscal 2017 O utlook for Q uarte r Ending De ce mbe r 30, O utlook for (1) 2016 Fiscal 2017 (1) Diluted earnings per share from continuing operations (GAAP) $0.84 - $0.88 $3.84 -
Slide 38: Impact of Changes in Foreign Currency Exchange Rates
Impact of Changes in Foreign Currency Exchange Rates for Q4 2016, Fiscal 2016, Q1 2017 and Fiscal 2017 Adjuste d O pe rating Ne t Sale s Income (1) Adjuste d EPS (1) (in millions, exce pt per share data) Quarter ended September 25, 2015 $ 2,984 $ 488 $ 0.90 Impact of changes in foreign currency exch