01—Abstract
Summary
Summary of the 10-K filed November 15, 2013. Cited figures are marked; the original filing is the authoritative source.
TE Connectivity Ltd. (TEL) reported fiscal year 2013 results marked by stable net sales of $13.28 billiona, consistent with the prior year.
The company experienced organic sales growth in its Transportation Solutions segment, driven by the automotive market, but this was offset by declines in its Network Solutions, Industrial Solutions, and Consumer Solutions segments. TE Connectivity continues to focus on operational efficiency, including restructuring initiatives aimed at simplifying its manufacturing footprint and migrating operations to lower-cost countries, incurring $311 millionb in net restructuring and other charges in fiscal 2013. The company's financial position remained solid, with net income attributable to TE Connectivity Ltd. of $1.28 billion.
Despite pressures from price erosion and fluctuations in raw material costs, TE Connectivity emphasized its competitive strengths, including a diverse product portfolio, strong customer relationships, and a global presence. The company also highlighted its commitment to returning capital to shareholders through dividends and share repurchases, with $384 millionc distributed in dividends and $829 million spent on share repurchases in fiscal 2013.
02—Key points
Key Highlights
- Net sales remained stable at $13.28 billion for fiscal year 2013.
- Transportation Solutions segment showed organic sales growth driven by the automotive market.
- Network Solutions, Industrial Solutions, and Consumer Solutions segments experienced organic sales declines.
- Restructuring charges of $311 million were incurred in fiscal 2013 to improve operational efficiency and cost structure.
- Net income attributable to TE Connectivity Ltd. was $1.28 billion.
- The company maintained a strong global presence and diverse customer base.
- Shareholder returns included $384 million in dividends and $829 million in share repurchases during fiscal 2013.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2013, TE Connectivity plc kept $0.11.
- Revenue$11.39B100.0%
- Cost of revenue−$7.74B67.9%
- Gross profit$3.65B32.1%
- Operating costs−$2.27B19.9%
- Operating income$1.39B12.2%
- Interest, other & tax−$109.0M1.0%
- Net income$1.28B11.2%
Where FY2013 revenue went
$11.39B- Cost of revenue: $7.74B, 68% of revenue
- SG&A: $1.44B, 13% of revenue
- Net income: $1.28B, 11% of revenue
- R&D: $494.0M, 4.3% of revenue
- Other operating costs: $332.0M, 2.9% of revenue
- Interest, other & tax: $109.0M, 1.0% of revenue
Kept 11% as net incomeInterest, other & tax $109.0M · 1.0%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2013filed November 15, 2013Financial Statements
FY2013 against FY2012
| Line item | FY2013FY2012 | Change |
|---|---|---|
| Revenue | $11.39B$13.28B | −14.2% |
| Cost of Revenue | $7.74B$9.24B | −16.2% |
| Gross Profit | $3.65B$4.05B | −9.8% |
| R&D Expenses | $494.00M$595.00M | −17.0% |
| SG&A Expenses | $1.44B$1.69B | −14.5% |
| Operating Income | $1.39B$1.52B | −8.8% |
| Interest Expense | $139.00M$176.00M | −21.0% |
| Net Income | $1.28B$1.11B | +14.7% |
| EPS (Basic) | $3.05$2.61 | +16.9% |
| EPS (Diluted) | $3.02$2.59 | +16.6% |
| Shares Outstanding (Basic) | 418.00M426.00M | −1.9% |
| Shares Outstanding (Diluted) | 423.00M430.00M | −1.6% |
05—Questions
Frequently Asked Questions
What were TE Connectivity's key segment performance drivers in fiscal year 2013?
TE Connectivity's Transportation Solutions segment saw organic sales growth, primarily due to increased demand in the automotive market. However, this growth was counteracted by declines in the Network Solutions, Industrial Solutions, and Consumer Solutions segments, which were impacted by weaker demand in their respective end markets.
How is TE Connectivity managing its operational costs and manufacturing footprint?
TE Connectivity is actively engaged in restructuring initiatives to simplify its global manufacturing footprint. These efforts include migrating facilities to lower-cost countries, consolidating operations, and transferring product lines. In fiscal year 2013, the company incurred $311 million in net restructuring and other charges related to these initiatives, which are aimed at improving competitiveness and positioning the company for future growth.
What is TE Connectivity's financial health and shareholder return strategy?
In fiscal year 2013, TE Connectivity reported net income attributable to TE Connectivity Ltd. of $1.28 billion. The company maintained a strong financial position and continued its strategy of returning capital to shareholders. This included distributing $384 million in dividends and repurchasing approximately $829 million of its common shares during the fiscal year.
What are the main risks TE Connectivity identified in its business operations?
TE Connectivity highlighted several key risks, including dependence on the automotive and other cyclical industries, intense competition and pricing pressure, the need for continuous product innovation, raw material availability and cost fluctuations, foreign currency exchange rate volatility, and potential disruptions from global economic or geopolitical instability.
06—Continue