TE Connectivity : Q1 2023 TE Connectivity Ltd. Earnings Conference Call

TE Connectivity

First Quarter

2023 Earnings

January 25, 2023

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, including continuing military conflict between Russia and Ukraine resulting from Russia's invasion of Ukraine or escalating tensions in surrounding countries; 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. 30, 2022 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

Q1 Sales & Adjusted EPS Exceeded Guidance

• Sales of $3.8B, up 1% reported, up 8% organically Y/Y
• • Transportation up 14% organically Y/Y, primarily driven by Automotive
  • Industrial up 7% organically Y/Y, with growth in all businesses
  • Communications down 11% organically Y/Y, with weakness in end markets
  • Sales includes ~$300M of currency exchange headwinds Y/Y
• Orders of $3.6B, with continued strong Backlog position
• Adjusted Operating Margins as expected at 16.2%, Adjusted EPS of $1.53
• • Adjusted EPS results include ~$0.25 of FX and Tax headwinds Y/Y
• Strong Free Cash Flow of ~$400M; ~$410M returned to shareholders
• TE named to the Dow Jones Sustainability Index for the 11th consecutive year

Q2 Guidance

• Expect Q2 Sales of ~$3.9B and Adjusted EPS ~$1.57
• • Sales down 3% on a reported basis and up 2% organically Y/Y
  • FX headwind impacting Sales by ~$165M and EPS by ~$0.11 Y/Y
• Portfolio positioned for long-term growth with benefits from secular trends. Driving additional structural cost reductions to improve margin performance

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	FY22	FY22	FY23	Q1 Growth
	Q1	Q4	Q1	Y/Y	Q/Q
		(13 week)
Transportation	2,158	2,327	2,154	0%	(7)%
Industrial	1,395	1,172	1,085	(22)%	(8)%
Communications	776	480	395	(49)%	(18)%
Total TE	4,329	3,979	3,633	(16)%	(9)%
Book to Bill	1.13	0.98	0.95

• Y/Y orders trending as expected, impacted by FX, supply chain dynamics, and continued strong backlog level
• Transportation book to bill 0.95, reflecting ongoing stable demand and strong backlog levels
• Industrial book to bill 1.02, reflecting strong demand across most end markets
• Communications orders reflect market weakness and consumption of inventory across the supply chain

Orders Trending as Expected, Reflecting Y/Y Supply Chain Dynamics, Strong Backlog Levels, and Market Weakness in Communications

4

Transportation Solutions

$ in Millions

Q1 Sales

Reported

Up 5%

Organic	$2,158	$2,259
Up 14%
		Q1 2022		Q1 2023

Q1 Adjusted Operating Margin

Margins reflecting the
timing of pricing	18.2%
actions to offset				15.8%
inflation
				Q1 2022				Q1 2023
	Adjusted EBITDA Margin	24.1%	20.8%

Q1 Business Performance

Y/Y Growth Rates		Reported	Organic
Automotive	$1,649	9%	20%
Commercial	348	(5)%	3%
Transportation
Sensors	262	(4)%	3%
Transportation	$2,259	5%	14%
Solutions

• Automotive organic growth across all regions. Market outperformance driven by our leading position in electric vehicles along with electronification trends
• Commercial Transportation organic growth in North America and Europe, partially offset by declines in China
• Sensors organic growth driven by automotive 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