Sensata Technologies Holding Plc · NYSE:ST
Sensata Technologies — Q4 2021 Earnings Presentation
32 slides from Sensata Technologies's earnings presentation, Feb 1, 2022
Slide 1: Sensata Fourth Quarter and Full Year 2021 Earnings Presentation
SENSATA FOURTH QUARTER AND FULL YEAR 2021 EARNINGS PRESENTATION February 1, 2022
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
Key Performance Highlights • Strong Q4-21 revenue outgrowth of 800 bps across all of Sensata Outgrowth exceeds • Outgrowth of 960 bps in 2021 well above target range long-term targets • Record New Business Wins of $640M in 2021 expected to drive future revenue outgrowth • Xirgo and SmartWitness crea
Slide 4: Electrification driving substantial growth for Sensata
Electrification driving substantial growth for Sensata Sensata Electrification Key Recent Electrification Sensata Electrification New Business Wins New Business Win Revenue $270M $260M e-Motor Win during 2021 during 2021 • Dramatic increase from $180M in 2020 • Includes PHEV, BEV, Heavy • Position a
Slide 5: Sensata Insights is addressing fleet analytics needs with expanded capabilities
Sensata Insights is addressing fleet analytics needs with expanded capabilities Sensata Insights Key Recent Insights Sensata Insights New Business Wins New Business Win Revenue $37M $75M Tire pressure and during 2021 during 2021 telematics gateway • Total pipeline of potential new • Includes organic
Slide 6: Q4-21 Financials and 2022 Financial Guidance
Q4-21 FINANCIALS AND 2022 FINANCIAL GUIDANCE
Slide 7: Q4-2021 Financial Summary
Q4-2021 Financial Summary $ in millions, except EPS Q4-2021 Q4-2020 B/(W) • Revenue growth YoY of 3.1% Revenue $934.6 $906.5 3.1 % composed of: Adjusted Operating Income $197.6 $195.6 1.0 % ◦ Organic revenue decreased (0.9%) % Revenue 21.1% 21.6% ◦ Acquisitions increased revenue by 3.7% Adjusted Net
Slide 8: Q4-2021: Performance Sensing
Q4-2021: Performance Sensing Revenue Segment Operating Income % operating margin $685.1 $689.0 $185.6 $185.1 27.1% 26.9% Q4-21 Q4-20 Q4-21 Q4-20 Q4-21 YoY Revenue Growth Reported Organic Market • Lower revenue reflects declines in OEM production Automotive (11.3)% (11.7)% (16.2)% due to supply chain
Slide 9: Q4-2021: Sensing Solutions
Q4-2021: Sensing Solutions Revenue Segment Operating Income % operating margin $249.5 $217.5 $74.5 $70.7 29.8% 32.5% Q4-21 Q4-20 Q4-21 Q4-20 Q4-21 YoY Revenue Growth Reported Organic Market • Revenue increase YoY reflects new Electrification Industrial & Other 17.7% 16.1% 7.6% launches and HVAC mark
Slide 10: Corporate and Other Operating Expenses
Corporate and Other Operating Expenses $ in millions Q4-2021 Q4-2020 B/(W) Corporate and Other $72.8 $69.6 (4.6)% • Adj. Corporate and Other increase primarily due to higher Megatrend investments % Revenue 7.8% 7.7% Adj. Corporate and Other $61.0 $58.5 (4.3)% % Revenue 6.5% 6.5% Megatrend Spend ($ m
Slide 11: Strong free cash generation enables deployment of capital toward M&A and share repurchases
Strong free cash generation enables deployment of capital toward M&A and share repurchases Free Cash Flow ($ millions) $127 $117 $77 $88 Q1-21 Q2-21 Q3-21 Q4-21 $410M* $48M $44.0M 2.8x 2021 free cash flow, Share Buyback Q4-21 Capital Expenditures; net leverage ratio as of 72% conversion; $165M-$175M
Slide 12: Q1-22 Financial Guidance
Q1-22 Financial Guidance • Q1-22 end-market growth expected to be $ in millions, except EPS Q1-22 GUIDANCE Q1-21 B/(W) ~(7%) YoY ◦ Auto: ~(9%) Revenue (1%) - 3% $935 – $975 $942.5 ◦ HVOR: ~(14%) organic (4%) - 1% ◦ Industrial: ~3% ◦ Aerospace: ~2% Adj. Op Income $171 – $183 $198.1 (14%) - (8%) • FX
Slide 13: FY-22 Financial Guidance
FY-22 Financial Guidance $ in millions, except EPS FY-22 GUIDANCE FY-21 B/(W) • 2022 end-market growth expected to be ~4% Revenue 8% - 12% overall $4,125 – $4,275 $3,820.8 organic 6% - 10% • Automotive supply chain inventory build of $90M in 2021 not expected to repeat in 2022 Adj. Op Income $848 –
Slide 14: We expect low single digit end-market growth in 2022 overall
We expect low single digit end-market growth in 2022 overall Our Auto production estimates are below IHS' forecast for the year OEM Production Growth Rates 24% 7% global auto production 2022E* 15% 12% 7% 8% 7% 0% 1% 0% (1)% (6)% (9)% Aerospace Industrial HVOR China Auto EU Auto NA Auto 2021 OEM Unit
Slide 15: Sensata targets revenue growth 8-12% above market
Sensata targets revenue growth 8-12% above market Sensata's markets of Automotive, Heavy Vehicle Off-Road, Industrial, and Aerospace are cyclical in nature • Sensata grows revenue faster than markets due to expanding content and through acquisitions Organic Market Outgrowth (bps) Inorganic M&A Reven
Slide 16: Key Messages – Looking Forward
Key Messages – Looking Forward Deliver strong outgrowth to market Create additional value through M&A Long-term Company outgrowth target of 400-600 and technology partnerships bps Targeting M&A contribution of 400-600 bps inorganic revenue growth Execute long-term organic Megatrend growth strategy E
Slide 17: Appendix A: Other Financial Information
APPENDIX A OTHER FINANCIAL INFORMATION
Slide 18: Q4-2021 GAAP Results
Q4-2021 GAAP Results $ and shares outstanding in millions, except EPS Q4-2021 Q4-2020 B/(W) Revenue $934.6 $906.5 3.1 % Gross Profit $314.7 $296.6 6.1 % (% of revenue) 33.7% 32.7% R&D $40.1 $33.3 (20.5)% (% of revenue) 4.3% 3.7% SG&A $87.3 $77.0 (13.3)% (% of revenue) 9.3% 8.5% Amortization of Intan
Slide 19: 2021 GAAP Results
2021 GAAP Results $ and shares outstanding in millions, except EPS 2021 2020 B/(W) Revenue $3,820.8 $3,045.6 25.5 % Gross Profit $1,278.4 $926.5 38.0 % (% of revenue) 33.5% 30.4% R&D $159.1 $131.4 (21.0)% (% of revenue) 4.2% 4.3% SG&A $337.0 $294.7 (14.3)% (% of revenue) 8.8% 9.7% Amortization of In
Slide 20: Q4-2021 Non-GAAP Results
Q4-2021 Non-GAAP Results $ and shares outstanding in millions, except EPS Q4-2021 Q4-2020 B/(W) Revenue $934.6 $906.5 3.1 % Adj. Gross Profit $321.8 $301.4 6.8 % (% of revenue) 34.4% 33.2% R&D $40.1 $33.3 (20.5)% (% of revenue) 4.3% 3.7% Adj. SG&A $82.6 $70.8 (16.7)% (% of revenue) 8.8% 7.8% Adj. Op
Slide 21: 2021 Non-GAAP Results
2021 Non-GAAP Results $ and shares outstanding in millions, except EPS 2021 2020 B/(W) Revenue $3,820.8 $3,045.6 25.5 % Adj. Gross Profit $1,294.9 $969.4 33.6 % (% of revenue) 33.9% 31.8% R&D $159.1 $131.4 (21.0)% (% of revenue) 4.2% 4.3% Adj. SG&A $321.7 $269.2 (19.5)% (% of revenue) 8.4% 8.8% Adj.
Slide 22: Q4-2021 Cash Flow Statement
Q4-2021 Cash Flow Statement $ in millions Q4-2021 Q4-2020 B/(W) Net Income $112.0 $121.7 (8.0)% Depreciation & Amortization $63.2 $62.6 1.0 % Changes in Working Capital ($0.4) $109.9 NM Other ($13.8) ($27.7) 50.1 % Operating Cash Flow $160.9 $266.4 (39.6)% Capital Expenditures ($44.0) ($26.8) (64.3)
Slide 23: Balance Sheet
Balance Sheet $ in millions DEC 31, 2021 DEC 31, 2020 Total Assets $ 8,613.8 $ 7,844.2 Working Capital $ 2,240.7 $ 1,484.8 Intangibles, Net & Other Long-Term Assets $ 5,536.8 $ 4,864.2 $ in millions DEC 31, 2021 DEC 31, 2020 Cash & Equivalents $ 1,709.0 $ 1,862.0 Current Debt (1) $ 6.8 $ 757.2 Net C
Slide 24: Appendix B: GAAP to Non-GAAP Reconciliations
APPENDIX B GAAP TO NON-GAAP RECONCILIATIONS
Slide 25: 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 26: Non-GAAP Measures – continued
Non-GAAP Measures – continued Organic or Constant Currency Measures – in discussing trends in the Company’s performance, we may refer to the percentage change of certain GAAP or non-GAAP financial measures in one period versus another, calculated on either a reported, constant currency, or organic b
Slide 27: Adjusted EBITDA
Adjusted EBITDA $ in thousands Period Total Sensata LTM 4Q 2021 3Q 2021 2Q 2021 1Q 2021 4Q 2020 Net income $ 363,580 $ 111,972 $ 84,959 $ 112,916 $ 53,733 $ 121,667 Interest expense, net 179,291 44,898 45,137 45,213 44,043 47,417 Provision for/(benefit from) income taxes 50,337 578 21,840 7,638 20,2
Slide 28: Organic Revenue Growth
Organic Revenue Growth Q4-2021 0 Constant Currency % Reported % Change Less: Acquisition & Organic Growth Less: FX Impact Change (GAAP) Divestitures, net (non-GAAP) (non-GAAP) Performance Sensing (0.6%) 0.3% (0.9%) 4.5% (5.4%) Sensing Solutions 14.7% 0.1% 14.6% 1.2% 13.4% Sensata Total 3.1% 0.3% 2.8
Slide 29: Free Cash Flow
Free Cash Flow $ in thousands Q4 FY Total Sensata 2021 2020 Change 2021 2020 Change Net cash provided by operating activities $ 160,925 $ 266,437 (39.6%) $ 554,151 $ 559,775 (1.0%) Additions to property, plant and equipment and (43,993) (26,780) (64.3%) (144,403) (106,719) (35.3%) capitalized softwa
Slide 30: Net Debt and Net Leverage Ratio
Net Debt and Net Leverage Ratio $ in thousands As of Total Sensata 12/31/2021 9/30/2021 6/30/2021 3/31/2021 12/31/2020 Current portion of long-term debt, finance lease and other financing $ 6,833 $ 6,632 $ 7,281 $ 9,678 $ 757,205 obligations (1) Finance lease and other financing obligations, less cu
Slide 31: Adjusted Taxes and Adjusted Tax Rate
Adjusted Taxes and Adjusted Tax Rate $ in thousands Q4 FY Total Sensata 2021 2020 2021 2020 Provision for/(benefit from) income taxes $ 578 $ (13,751) $ 50,337 $ 1,355 Non-GAAP adjustments: Deferred income tax and other tax (benefit)/ (10,758) (33,053) (4,865) (40,856) expense Current tax effect of
Slide 32: Other GAAP to Non-GAAP Reconciliations
Other GAAP to non-GAAP Reconciliations $ in thousands (except EPS amounts) Q4-2021 Q4-2020 Operating Operating Operating Operating Total Sensata Net Income EPS Net Income EPS Income Margin Income Margin Reported (GAAP) $ 149,692 16.0% $ 111,972 $ 0.70 $ 154,161 17.0% $ 121,667 $ 0.77 Non-GAAP adjust