TE CONNECTIVITY LTD.

(TEL)
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TE Connectivity : Q321 Presentation

07/28/2021 | 10:04am EDT

TE Connectivity

Third Quarter

2021 Earnings

July 28, 2021

EVERY CONNECTION COUNTS

Forward-Looking Statements

and Non-GAAP Financial 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 to risks, uncertainty and changes in circumstances, which may cause actual results, performance, financial condition or achievements to differ materially from anticipated results, performance, financial condition or achievements. All statements contained herein that are not clearly historical in nature are forward-looking and the words "anticipate," "believe," "expect," "estimate," "plan," and similar expressions are generally intended to identify forward-looking statements. We have no intention and are under no obligation to update or alter (and expressly disclaim any such intention or obligation to do so) our forward-looking statements whether as a result of new information, future events or otherwise, except to the extent required by law. The forward-looking statements in this presentation include statements addressing our future financial condition and operating results, and the impact on our operations resulting from the coronavirus disease 2019 ("COVID-19"). Examples of factors that could cause actual results to differ materially from those described in the forward-looking statements include, among others, the extent, severity and duration of COVID- 19 negatively affecting our business operations; business, economic, competitive and regulatory risks, such as conditions affecting demand for products in the automotive and other industries we serve; competition and pricing pressure; fluctuations in foreign currency exchange rates and commodity prices; natural disasters and political, economic and military instability in countries in which we operate; developments in the credit markets; future goodwill impairment; compliance with current and future environmental and other laws and regulations; and the possible effects on us of changes in tax laws, tax treaties and other legislation, including the effects of Swiss tax reform. In addition, the extent to which COVID-19 will impact our business and our financial results will depend on future developments, which are highly uncertain and cannot be predicted. Such developments may include the geographic spread of the virus, the severity of the virus, the duration of the outbreak, the impact on our suppliers' and customers' supply chains, the actions that may be taken by various governmental authorities in response to the outbreak in jurisdictions in which we operate, and the possible impact on the global economy and local economies in which we operate. More detailed information about these and other factors is set forth in TE Connectivity Ltd.'s Annual Report on Form 10-K for the fiscal year ended Sept. 25, 2020 as well as in our Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and other reports filed by us with the U.S. Securities and Exchange Commission.

Non-GAAP Financial Measures

Where we have used non-GAAP financial measures, reconciliations to the most comparable GAAP measure are provided, along with a disclosure on the usefulness of the non-GAAP financial measure, in this presentation.

2

Earnings Highlights

Q3 results above guidance - Record Sales & Adjusted EPS with strong Free Cash Flow

  • Record Sales of $3.8B, up ~50% Y/Y and up 3% sequentially
    • All Segments up significantly Y/Y with strong performance through the economic recovery
    • Growth benefitting from market improvement as well as secular trends in electric vehicles, data centers, and factory automation
  • Orders of $4.5B, consistent with Q2 levels
  • Adjusted Operating Margins of 19.1%, up 210 basis points sequentially with increases in each Segment
  • Record quarterly Adjusted EPS of $1.79, up 14% sequentially with strong operational performance
  • Q3 Free Cash Flow of $539M with ~$445M returned to shareholders; YTD FCF of ~$1.5B

Q4 guidance reflecting double digit Y/Y Sales growth & continued strong performance

  • Q4 FY21 Sales of ~$3.8B, up high-teens reported and mid-teens organically Y/Y
  • Q4 FY21 Adjusted EPS of ~$1.65, up over 40% Y/Y
  • Fiscal 2021 Sales of ~$14.9B and Adjusted EPS of ~$6.47
    • Sales up 22% & Adjusted EPS up 52% versus FY20
    • Sales up 11% & Adjusted EPS up 17% versus FY19, reflecting performance vs a pre-Covid baseline

3

Organic Net Sales Growth (Decline), Adjusted EPS, Adjusted Operating Margin and Free Cash Flow are non-GAAP financial measures; see Appendix for descriptions and reconciliations

Segment Orders Summary

($ in millions)

Reported

FY20

FY21

FY21

Q3 Growth

Q3

Q2

Q3

Y/Y

Q/Q

Transportation

1,178

2,766

2,562

118%

(7)%

Industrial

824

1,126

1,218

48%

8%

Communications

384

678

755

97%

11%

Total TE

2,386

4,570

4,535

90%

(1)%

Book to Bill

0.94

1.22

1.18

  • Y/Y orders growth in all businesses and regions
  • Transportation orders remain elevated due to market recovery and industry supply chain dynamics
  • Industrial Segment sequential growth in Industrial Equipment, Energy and Medical, with stabilization in AD&M
  • Communications sequential growth driven by strength in Data & Devices

Order Levels Continue to Reflect Economic Recovery and Supply Chain Dynamics

4

Transportation Solutions

$ in Millions

Q3 Sales

Reported

Up 81%

Organic

$2,265

$1,255

Up 72%

Q3 2020

Q3 2021

Q3 Adjusted Operating Margin

Margin expansion

driven by market

19.4%

recovery and

operational

4.8%

performance

Q3 2020

Q3 2021

Adjusted EBITDA Margin

13.8%

25.9%

Q3 Business Performance

Y/Y Growth Rates

Reported

Organic

Automotive

$1,600

101%

90%

Commercial

382

64%

56%

Transportation

Sensors

283

26%

20%

Transportation

$2,265

81%

72%

Solutions

  • Automotive benefitting from market recovery; continued strong content outperformance driven by leading position in electric vehicle applications
  • Commercial Transportation growth driven by higher production and content gains from electronification trends
  • Sensors growth primarily driven by auto and commercial transportation applications

5

Organic Net Sales Growth (Decline), Adjusted Operating Margin and Adjusted EBITDA Margin are non-GAAP financial measures: see Appendix for descriptions and reconciliations

Disclaimer

TE Connectivity Ltd. published this content on 28 July 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 28 July 2021 14:03:08 UTC.


© Publicnow 2021
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Financials (USD)
Sales 2022 15 795 M - -
Net income 2022 2 244 M - -
Net Debt 2022 2 817 M - -
P/E ratio 2022 18,9x
Yield 2022 1,57%
Capitalization 41 802 M 41 802 M -
EV / Sales 2022 2,82x
EV / Sales 2023 2,60x
Nbr of Employees 89 000
Free-Float 94,9%
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Managers and Directors
Terrence R. Curtin Executive VP & President-Industrial Solutions
Heath A. Mitts Chief Financial Officer, Director & Executive VP
Thomas J. Lynch Chairman
Joseph F. Eckroth Chief Information Officer & Senior Vice President
Phil Gilchrist Chief Technology Officer & Vice President
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