Slide 1: Q2 2014 Earnings Call
Q2 2014 Earnings Call April 23, 2014
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 subj
Slide 3: Summary
Summary • Sales of $3.43 billion; up 6% organically versus prior year • Adjusted EPS of $0.95, up 25% versus prior year • Adjusted Operating Margin of 15.5%, up 190 basis points versus prior year • Free Cash Flow of $273 million; returned $281 million to shareholders • Book-to-Bill of 1.03 with orde
Slide 4: SEACON Group Overview
SEACON Group Overview Overview Sales by Market A leading provider of underwater connector technology and systems that serves the military, Oil & Gas marine, and oil and gas industries. Production & Drilling 75% Founded in 1964; operations in the U.S., Norway, U.K., and Mexico Purchase price: $
Slide 5: Transportation Solutions Q2 Summary
Transportation Solutions Q2 Summary ($ in Millions) Growth Rates Actual Organic Sales by Business Growth Rates Sales $1,571 13% 13% Actual Organic Orders $1,568 7% 7% Automotive $1,571 13% 13% Book to Bill 1.00 Transportation Solutions $1,571 13% 13% Adj. Operating Income $346 33% Adj. Operating Mar
Slide 6: Industrial Solutions Q2 Summary
Industrial Solutions Q2 Summary ($ in Millions) Growth Rates Sales by Business Growth Rates Actual Organic Actual Organic Sales $789 4% 4% Industrial Equipment $330 8% 8% Orders $827 1% 2% Aerospace, Defense, Oil, and Gas 273 5% 5% Book to Bill 1.05 Energy 186 (4)% (1)% Industrial Solutions $789 4%
Slide 7: Network Solutions Q2 Summary
Network Solutions Q2 Summary Growth Rates ($ in Millions) Actual Organic Sales By Business Growth Rates Actual Organic Sales $688 (5)% (1)% Telecom Networks $318 6% 6% Orders $690 (1)% 3% Data Communications 160 (18)% (7)% Orders ex SubCom $661 (2)% 1% Enterprise Networks 149 1% 5% Book to Bill 1.00
Slide 8: Consumer Solutions Q2 Summary
Consumer Solutions Q2 Summary ($ in Millions) Growth Rates Sales by Business Growth Rates Actual Organic Actual Organic Sales $383 (4)% (3)% Consumer Devices $223 (9)% (8)% Orders $403 (1)% -% Appliances 160 5% 5% Book to Bill 1.05 Consumer Solutions $383 (4)% (3)% Adj. Operating Income $35 (3)% Adj
Slide 9: Q2 Financial Summary
Q2 Financial Summary ($ in Millions, except per share amounts) Q2 FY14 Q2 FY13 Net Sales $ 3,431 $ 3,265 Operating Income $ 510 $ 359 Restructuring & Other Charges, net 21 81 Acquisition Related Charges 1 3 Adjusted Operating Income $ 532 $ 443 Operating Margin 14.9% 11.0% Adjusted Operating Margin
Slide 10: Q2 Operating Results & Other Items
Q2 Operating Results & Other Items Gross Margin Percentage Other Items 35.0% 34.2% 33.7% 33.6% 34.0% ($ in Millions) Q2 FY14 Q2 FY13 32.8% 33.0% 32.2% 32.0% 31.6% Interest Expense, Net $ (26) $ (30) 31.0% Adjusted Other Income, Net $ 2 $ 8 30.0% Q1 Q2 Q3 Q4 Q1 Q2 Income Tax Expense $ (136) $ (60) FY
Slide 11: Q2 Balance Sheet and Cash Flow Summary
Q2 Balance Sheet and Cash Flow Summary Free Cash Flow and Working Capital Liquidity, Cash & Debt Liquidity Summary ($ in Millions) Q2 FY14 Q2 FY13 ($ in Millions) Q2 FY14 Q2 FY13 Beginning Cash Balance $ 1,397 $ 972 Cash from Continuing Operations $ 453 $ 446 Free Cash Flow 273 353 Capital expenditu
Slide 12: Q3 Outlook
Q3 Outlook^ ($ in Millions, except per share amounts) Sales $3,540 to $3,640 Y/Y Growth Actual 3% 6% Organic* 2% 5% Adjusted EPS* $0.96 to $1.00 Y/Y Growth 9% 14% Transportation Solutions Network Solutions Revenue up 8-10% vs. prior year Revenue ~flat excluding Subsea Communications Global aut
Slide 13: FY14 Outlook
FY14 Outlook^ ($ in Millions, except per share amounts) Sales $13,800 to $14,100 Y/Y Growth Actual 4% 6% Organic* 4% 6% Adjusted EPS* $3.72 to $3.84 Y/Y Growth 15% 19% Transportation Solutions Network Solutions Revenue up 10-12% vs. prior year Revenue down slightly vs. prior year excluding SubCo
Slide 14: Q&A
page 14 / April 2014 Q&A TE
Slide 15: Appendix
Appendix # page 15 / April 2014 = TE
Slide 16: Non-GAAP Measures
Non-GAAP Measures “Organic Sales Growth,” “Adjusted Operating Income,” “Adjusted Operating Margin,” “Adjusted Other Income, Net,” “Adjusted Income Tax Expense,” “Adjusted Effective Tax Rate,” ”Adjusted Income from Continuing Operations,” “Adjusted Earnings Per Share,” and “Free Cash Flow” (FCF) are
Slide 17: Non-GAAP Measures (cont.)
Non-GAAP Measures (cont.) We present income from continuing operations attributable to TE Connectivity Ltd. before special items including charges or income related to legal settlements and reserves, restructuring and other charges, acquisition related charges, impairment charges, tax sharing income
Slide 18: Q2 Revenue Summary
Q2 Revenue Summary ($ in Millions) Actual Organic Segment Q2 FY14 Q2 FY13 Growth Growth(1) Transportation Solutions $1,571 $1,385 13% 13% Industrial Solutions 789 758 4% 4% Network Solutions 688 725 (5)% (1)% Consumer Solutions 383 397 (4)% (3)% Total $3,431 $3,265 5% 6% page 18 / April 2014 (1)See
Slide 19: Reconciliation of Net Sales Growth – Q2 14 vs. Q2 13
Reconciliation of Net Sales Growth– Q2 14 vs. Q2 13 Percentage of Segm ent's Total Change in Net Sales for the Quarter Ended March 28, 2014 Net Sales for the versus Net Sales for the Quarter Ended March 29, 2013 Quarter Ended Organic (1) Translation (2) Divestitures Total March 28, 2014 ($ in m illi
Slide 20: Reconciliation of Net Sales Growth by Segment and Geography
Reconciliation of Net Sales Growth by Segment and Geography – Q2 14 vs. Q2 13 Change in Net Sales for the Quarter Ended March 28, 2014 versus Net Sales for the Quarter Ended March 29, 2013 (1) Organic Translation (2) Divestitures Total ($ in m illions) Transportation Solutions: EMEA $ 70 11.9 % $ 22
Slide 21: Reconciliation of Non-GAAP Measures, Quarter Ended March 28, 2014
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Quarter Ended March 28, 2014 Adjustm ents Acquisition Restructuring Related and Other Tax Adjusted U.S. GAAP Charges Charges, Net Item s (1) (Non-GAAP) (2) ($ in m illions, except per share data) Operating Income: Trans
Slide 22: Reconciliation of Non-GAAP Measures, Quarter Ended March 29, 2013
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Quarter Ended March 29, 2013 Adjustments Acquisition Restructuring Related and Other Tax Adjusted U.S. GAAP Charges Charges, Net Items (1) (Non-GAAP) (2) ($ in millions, except per share data) Operating Income: Transpor
Slide 23: Reconciliation of Non-GAAP Measures, Quarter Ended June 28, 2013
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Quarter Ended June 28, 2013 Adjustm ents Acquisition Restructuring Related and Other Tax Adjusted (1) U.S. GAAP Charges Charges, Net Item s (Non-GAAP) (2) ($ in m illions, except per share data) Operating Income: Transp
Slide 24: Reconciliation of Non-GAAP Measures, Year Ended September 27, 2013
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Year Ended September 27, 2013 Adjustm ents Acquisition Restructuring Related and Other Tax Adjusted U.S. GAAP Charges Charges, Net Item s (1) (Non-GAAP) (2) ($ in m illions, except per share data) Operating Income: Tran
Slide 25: Reconciliation of Forward-Looking Non-GAAP Measures
Reconciliation of Forward-Looking Non-GAAP Financial Measures to Forward-Looking GAAP Financial Measures Outlook for Quarter Ending June 27, Outlook for 2014 Fiscal 2014 Diluted earnings per share from continuing operations attributable to TE Connectivity Ltd. (GAAP) $0.93 - 0.97 $3.62 - 3.74 Restru
Slide 26: Every Connection Counts
EVERY CONNECTION COUNTS