10-KPeriod: FY2012

TE Connectivity plc Annual Report, Year Ended Sep 28, 2012

Filed November 13, 2012For Securities:TEL

Summary

TE Connectivity Ltd. (TEL) reported its fiscal year 2012 results on November 13, 2012. The company, a global leader in connectivity and sensor solutions, experienced a slight decrease in net sales, down 3.6% to $13.3 billion, primarily due to softness in the Communications and Industrial Solutions segment and unfavorable currency movements. However, the acquisition of Deutsch Group SAS in April 2012 provided a significant boost to the Transportation Solutions segment, particularly in the automotive and aerospace markets. Despite the top-line dip, TE Connectivity maintained a robust gross margin and focused on operational efficiency and cost management. The company continued to invest in research and development, aiming to strengthen its innovation leadership and extend its reach in emerging markets. Management expressed confidence in the company's strategic priorities and its ability to navigate the challenging economic environment, anticipating modest sales growth in fiscal year 2013.

Financial Highlights

58 data points
Beta

Revenue

$13.28B

30.5% Gross Margin

Net Income

$1.11B

8.4% Net Margin

EPS (Diluted)

$2.59

Total Assets

$19.31B

Cash & Equivalents

$1.59B

Free Cash Flow

$1.41B

Financial Statements
Beta
Revenue$13.28B
Cost of Revenue$9.24B
Gross Profit$4.05B
R&D Expenses$595.00M
SG&A Expenses$1.69B
Operating Income$1.52B
Interest Expense$176.00M
Net Income$1.11B
EPS (Basic)$2.61
EPS (Diluted)$2.59
Shares Outstanding (Basic)426.00M
Shares Outstanding (Diluted)430.00M

Key Highlights

  • 1Net sales for fiscal year 2012 were $13.3 billion, a 3.6% decrease from $13.8 billion in fiscal year 2011, primarily driven by organic sales declines in Communications and Industrial Solutions and unfavorable foreign currency impacts.
  • 2The acquisition of Deutsch Group SAS in April 2012 significantly strengthened the Transportation Solutions segment, contributing $327 million in net sales.
  • 3Gross margin decreased slightly to 30.5% from 31.0% year-over-year, impacted by acquisition-related fair value adjustments and lower sales volumes, partially offset by productivity improvements.
  • 4Operating income declined to $1.5 billion from $1.7 billion, reflecting lower sales and acquisition-related charges.
  • 5The company generated $1.9 billion in cash from continuing operations and $1.4 billion in free cash flow, demonstrating strong operational cash generation.
  • 6TE Connectivity's strategy remains focused on customer service, innovation leadership, expansion in emerging markets, smart connectivity, and strategic acquisitions.
  • 7The company maintained a strong global presence with manufacturing and sales operations in over 150 countries, emphasizing customer relationships and technological leadership.

Frequently Asked Questions

In fiscal year 2012, TE Connectivity reported net sales of $13.3 billion, a 3.6% decrease from the previous year. Operating income was $1.5 billion, down from $1.7 billion in fiscal year 2011. The company generated $1.9 billion in cash from operations and $1.4 billion in free cash flow.

The acquisition of Deutsch Group SAS in April 2012 was a significant event for TE Connectivity. It strengthened the Transportation Solutions segment, particularly in the automotive and aerospace markets, contributing $327 million in net sales during fiscal year 2012. However, the acquisition also resulted in acquisition and integration costs, including amortization of fair value adjustments.

TE Connectivity's core strategies include delivering exceptional customer service, strengthening innovation leadership by increasing sales from new products, expanding its presence in emerging markets, leading in smart connectivity, and supplementing organic growth with strategic partnerships and acquisitions.

Currency exchange rates had a negative impact on TE Connectivity's net sales in fiscal year 2012, decreasing them by $338 million (2.4%) compared to the prior year. This was primarily due to the strengthening of the U.S. Dollar against other major currencies.

For fiscal year 2013, TE Connectivity projected net sales between $13.4 billion and $14.0 billion, expecting growth in the automotive and aerospace markets driven by incremental Deutsch sales, but anticipating continued weakness in industrial, appliance, and energy markets. Diluted earnings per share were forecasted to be in the range of $2.61 to $2.91.