Te Connectivity Plc · NYSE:TEL
Te Connectivity — Investor Presentation (May 2019)
17 slides from Te Connectivity's investor presentation, May 30, 2019
Slide 1: Forward-Looking Statements and Non-GAAP Financial Measures
2 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 to risks, uncertainty and changes in circumsta
Slide 2: Industrial Technology Company Creating a Safer, Sustainable, Productive and Connected Future
3 INDUSTRIAL TECHNOLOGY COMPANY CREATING A SAFER, SUSTAINABLE, PRODUCTIVE AND CONNECTED FUTURE TE CONNECTIVITY Automotive Sensors Commercial Transportation Data & Devices Appliances WORLD LEADER in connectivity and sensor solutions with the broadest range of technologies Highly engineered products a
Slide 3: Growth Driven by Secular Trends
GROWTH DRIVEN BY SECULAR TRENDS END MARKET TRENDS FACTORY AUTOMATION CONTENT GROWTH EXAMPLE EV adoption globally, driven by OEM & Government initiatives Safer, more autonomous vehicles Heavy truck content driven by regulatory requirements Smart, digital factories Lighter, more efficient aircraft Min
Slide 4: The Levers of Our Business Model
5 THE LEVERS OF OUR BUSINESS MODEL ORGANIC REVENUE GROWTH EPS GROWTH LOWER OPERATING EXPENSES M & A BALANCED CAPITAL STRATEGY Strategic M&A, Share Buybacks, Dividend increases, ROIC in mid-teens, strong FCF IMPROVED OPERATING MARGINS Expand 30-80 basis points annually Organic revenue growth, Operati
Slide 5: Business Model Performance Through the Cycle
6 BUSINESS MODEL PERFORMANCE THROUGH THE CYCLE Transportation Target Adjusted Operating Margins of ~20% Industrial continues migration to high teens Adjusted Operating Margins Communications target mid-teens Adjusted Operating Margins Strong return on invested capital model REVENUE $ Billions ADJUST
Slide 6: Capital Strategy: Balanced Deployment
7 CAPITAL STRATEGY: BALANCED DEPLOYMENT DIVIDENDS PER SHARE Share Repurchases $7.7B Acquisitions* $7.6B Dividends $4.5B MAJOR CAPITAL DEPLOYMENT** FY08 through FY18 Denotes dividends paid during the fiscal year. BNS Proceeds $2B FY19 represents dividends expected to be paid. Free Cash Flow is a non-
Slide 7: Capital Strategy: Balanced Deployment
CAPITAL STRATEGY: BALANCED DEPLOYMENT MAJOR CAPITAL DEPLOYMENT DIVIDENDS PER SHARE FY08 through FY18 Dividends Co S408 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 + Denotes dividends paid during the fiscal year. EXPECT TO RETURN ~2/3 OF FREE CASH FLOW TO SHAREHOLDERS OVER TIME EXPECT TO UTILIZ
Slide 8: Non-GAAP Financial Measures
Non-GAAP Financial Measures We present non-GAAP performance and liquidity measures as we believe it is appropriate for investors to consider adjusted financial measures in addition to results in accordance with accounting principles generally accepted in the U.S. (“GAAP”). These non-GAAP financial m
Slide 9: Non-GAAP Measure Definitions
Net Sales Excluding the Impact of the Additional Week, Net Sales Growth Excluding the Impact of the Additional Week, Organic Net Sales Growth Excluding the Impact of the Additional Week, Adjusted Operating Income Excluding the Impact of the Additional Week, Adjusted Operating Margin Excluding the Im
Slide 10: Reconciliation to GAAP Financial Measures, Year Ended September 28, 2018
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Year Ended September 28, 2018 11 Acquisition Restructuring Related and Other Tax Adjusted U.S. GAAP Charges (1) Charges, Net (1) Items (2) (Non-GAAP) (3) Operating income: Transportation Solutions 1,578 $ 12 $ 33 $ - $
Slide 11: Reconciliation to GAAP Financial Measures, Year Ended September 30, 2016
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Year Ended September 30, 2016 (1) 12 Restructuring Acquisition and Other Related Charges Tax Adjusted U.S. GAAP Charges (2)(3) (Credits), Net (3) Items (4) (Non-GAAP) (5) Operating income: Transportation Solutions 1,209
Slide 12: Reconciliation to GAAP Financial Measures, Year Ended September 25, 2015
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Year Ended September 25, 2015 (1) 13 Acquisition Restructuring Related and Other Tax Adjusted U.S. GAAP Charges (2)(3) Charges, Net (3) Items (4) (Non-GAAP) (5) Operating income 1,659 $ 94 $ 149 $ - $ 1,902 $ Operating
Slide 13: Impact of Additional Week in FY16 including Net Sales Growth to FY17
Impact of Additional Week in FY16 including Net Sales Growth to FY17 14 (3) Includes $22 million of acquisition and integration costs and $10 million of non-cash amortization associated with fair value adjustments related to acquired inventories and customer order backlog recorded in cost of sales.
Slide 14: Impact of Additional Week in FY16 including Net Sales Growth from FY15
Impact of Additional Week in FY16 including Net Sales Growth from FY15 15 Adjustment Adjustment Adjustment 53 Weeks Impact of 52 Weeks 53 Weeks Impact of 52 Weeks 53 Weeks Impact of 52 Weeks U.S. GAAP 53rd Week (Non-GAAP) (1)(2) U.S. GAAP 53rd Week (Non-GAAP) (1)(2) (Non-GAAP) (2) 53rd Week (Non-GAA
Slide 15: Change in Net Sales and Organic Net Sales Growth
Reconciliation of Net Sales Growth 16 Translation (2) Acquisitions 1,803 $ 14.8% 1,118 $ 9.2% 436 $ 249 $ Acquisitions Translation (2) (Divestiture) 833 $ 7.3% 694 $ 6.1% (83) $ 222 $ Acquisitions Translation (2) (Divestitures) (172) $ (1.5%) 1 $ -% (254) $ 81 $ ($ in millions) Change in Net Sales f
Slide 16: Forward-Looking to Forward-Looking GAAP Financial Measures: Outlook for Fiscal 2019
Reconciliation of Forward-Looking Non-GAAP Financial Measures to Forward-Looking GAAP Financial Measures 17 Outlook for Fiscal 2019 (1) Diluted earnings per share from continuing operations (GAAP) $4.88 - $4.98 Restructuring and other charges, net 0.55 Acquisition related charges 0.08 Tax items 0.04
Slide 17: Forward-Looking to Forward-Looking GAAP Financial Measures: Outlook for Fiscal 2019
Reconciliation of Forward-Looking Non-GAAP Financial Measures to Forward-Looking GAAP Financial Measures Outlook for Fiscal 2019 Diluted earnings per share from continuing operations (GAAP) S488 - $498 Restructuring and other charges. net 0.55 Acquisition related charges Taxitems Adjusted diluted ea