TransDigm Incorporated : Q4 2021 Transdigm Group Inc Earnings Presentation

FY 2021 Q4 Earnings Call

November 16, 2021

Agenda

 TransDigm Overview, Highlights and Outlook	Kevin Stein
	President and CEO

 Market Review	Jorge L. Valladares III
	COO

 Operating Performance and Financial Results	Mike Lisman
	CFO

• Q&A

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Forward Looking Statements & Special Notice Regarding Pro Forma and Non‐GAAP Information

FORWARD LOOKING STATEMENTS

This presentation contains forward‐looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including information regarding our guidance for future periods. These forward‐looking statements are based on management's current expectations and beliefs, as well as a number of assumptions concerning future events, many of which are outside of our control. Consequently, such forward looking statements should be regarded solely as our current plans, estimates and beliefs. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied in the forward‐looking statement. The Company does not undertake, and specifically declines, any obligation, to publicly release the results of any revisions to these forward‐looking statements that may be made to reflect any future events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events. All forward -looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these cautionary statements. These risks and uncertainties include but are not limited to: the impact that the COVID‐19 pandemic has on our business, results of operations, financial condition and liquidity; the sensitivity of our business to the number of flight hours that our customers' planes spend aloft and our customers' profitability, both of which are affected by general economic conditions; future geopolitical or other worldwide events; cyber‐security threats, natural disasters and climate change‐related events; our reliance on certain customers; the U.S. defense budget and risks associated with being a government supplier, including government audits and investigations; failure to maintain government or industry approvals; failure to complete or successfully integrate acquisitions; our indebtedness; potential environmental liabilities; liabilities arising in connection with litigation; climate‐related regulations; increases in raw material costs, taxes and labor costs that cannot be recovered in product pricing; risks and costs associated with our international sales and operations; and other risk factors. Further information regarding the important factors that could cause actual results to differ materially from projected results can be found in TransDigm Group's Annual Report on Form 10‐K for the fiscal year ended September 30, 2021 and other reports that TransDigm Group or its subsidiaries have filed with the Securities and Exchange Commission.

You are cautioned not to place undue reliance on our forward‐looking statements. TransDigm Group Incorporated assumes no obligation to, and expressly disclaims any obligation to, update or revise any forward‐looking statements, whether as a result of new information, future events or otherwise.

SPECIAL NOTICE REGARDING PRO FORMA AND NON‐GAAP INFORMATION

This presentation sets forth certain pro forma financial information. This pro forma financial information gives effect to certain recently completed acquisitions. Such pro forma information is based on certain assumptions and adjustments and does not purport to present TransDigm's actual results of operations or financial condition had the transactions reflected in such pro forma financial information occurred at the beginning of the relevant period, in the case of income statement information, or at the end of such period, in the case of balance sheet information, nor is it necessarily indicative of the results of operations that may be achieved in the future.

This presentation also sets forth certain non‐GAAP financial measures. A presentation of the most directly comparable GAAP measures and a reconciliation to such measures are set forth in the appendix.

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TransDigm Overview

Distinguishing Characteristics

	Highly engineered aerospace components		Significant aftermarket content
	Proprietary and sole source products		High free cash flow
	Proprietary Revenues (1)	Pro Forma Revenues (1)	Pro Forma EBITDA
					As Defined (1)
	Non‐		Comm OEM
	Proprietary
		25%		OEM

Defense

50%

Proprietary

Comm	Aftermarket
Aftermarket
25%

1. Pro forma revenue is for the fiscal year ended 9/30/2021. Includes full year impact of the Cobham Aero Connectivity acquisition completed January 2021. Excludes full year impact of FY 21 divestitures including Avista (divested November 2020), Racal Acoustics (divested January 2021), Technical Airborne Components (divested April 2021), and ScioTeq and TREALITY

Simulation Visual Systems (divested June 2021). Please see the Special Notice Regarding Pro Forma and Non‐GAAP Information.

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2021 Q4 Financial Performance by Markets - Pro Forma

Highlights

Commercial OEM:	25% Biz
Jet/Heli

• Q4 '21 Commercial Transport Revenue Up 2%
• Q4 '21 Business Jet/Helicopter Revenue Flat
• Q4 '21 Bookings Outpace Shipments

Commercial Aftermarket:	15% Biz
	Jet/Heli

• Q4 '21 Commercial Transport Revenue Up 49%
• Q4 '21 Business Jet/Helicopter Revenue Up 21%
• Q4 '21 Bookings Outpace Shipments

75% Com Transport

85% Com

Transport

Q4 Review - Pro Forma Revenues⁽¹⁾

	Actual vs. Prior Year
	Q4		YTD
Commercial OEM:	Up 1%		Down 25%

Commercial	Up 41%	Down 18%
Aftermarket:

Defense:

• Q4 '21 Defense Revenue Up 9% Sequentially versus Q3 '21
• Q4 '21 Defense Aftermarket Revenue Growth Outpaced

Defense OEM

Defense:

Up 2%

Up 5%

(1) Pro forma revenue is for the fiscal year ended 9/30/2021. Includes full year impact of the Cobham Aero Connectivity acquisition completed January 2021. Excludes full year impact of FY 21 divestitures including Avista (divested November 2020), Racal Acoustics (divested January 2021), Technical Airborne Components (divested April 2021), and ScioTeq and TREALITY Simulation Visual Systems (divested June 2021). Please see the Special Notice Regarding Pro Forma and Non‐GAAP Information.

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