10-KPeriod: FY2014

TE Connectivity plc Annual Report, Year Ended Sep 26, 2014

Filed November 12, 2014For Securities:TEL

Summary

TE Connectivity Ltd. reported strong performance for the fiscal year ended September 26, 2014, with net sales increasing by 4.8% to $13.9 billion, driven primarily by growth in its Transportation Solutions segment. The company highlighted its competitive strengths, including a diverse product portfolio, strong customer relationships, and a global presence. Management expressed optimism for fiscal year 2015, forecasting net sales between $14.7 billion and $15.3 billion, supported by anticipated growth in automotive production and contributions from acquisitions. The company's financial health remains robust, with significant cash flow generation and a manageable debt level, although it continues to navigate economic uncertainties and foreign currency fluctuations. Key investments in research and development and strategic acquisitions underscore its commitment to innovation and market expansion.

Financial Highlights

57 data points
Beta

Revenue

$11.97B

33.2% Gross Margin

Net Income

$1.78B

14.9% Net Margin

EPS (Diluted)

$4.27

Total Assets

$20.13B

Cash & Equivalents

$2.46B

Free Cash Flow

$1.45B

Financial Statements
Beta
Revenue$11.97B
Cost of Revenue$8.00B
Gross Profit$3.97B
R&D Expenses$484.00M
SG&A Expenses$1.53B
Operating Income$1.80B
Interest Expense$127.00M
Net Income$1.78B
EPS (Basic)$4.34
EPS (Diluted)$4.27
Shares Outstanding (Basic)410.00M
Shares Outstanding (Diluted)417.00M

Key Highlights

  • 1Net sales increased by 4.8% to $13.9 billion in fiscal year 2014, primarily driven by a 11.0% increase in the Transportation Solutions segment.
  • 2The company completed the acquisition of Measurement Specialties for approximately $1.7 billion in October 2014, expanding its sensor capabilities.
  • 3Organic net sales grew by 4.6% in fiscal 2014, indicating underlying business strength beyond currency impacts and acquisitions.
  • 4Operating income increased to $2.05 billion in fiscal 2014, reflecting improved gross margins and operational efficiencies.
  • 5Free cash flow remained strong, totaling $1.73 billion in fiscal 2014, enabling robust capital allocation for share repurchases and strategic investments.
  • 6The company repurchased approximately $604 million of its common shares in fiscal 2014, demonstrating a commitment to returning value to shareholders.
  • 7Fiscal 2014 results included a significant income tax benefit of $282 million related to a reduction in the valuation allowance for certain tax loss carryforwards.

Frequently Asked Questions

TE Connectivity operated through four reporting segments: Transportation Solutions (44% of net sales), Industrial Solutions (24%), Network Solutions (21%), and Consumer Solutions (11%). The Transportation Solutions segment was the largest contributor to revenue.

Net sales increased by 4.8% to $13.9 billion in fiscal year 2014 from $13.3 billion in fiscal year 2013. This growth was driven by a 10.4% increase in organic net sales, particularly in the Transportation Solutions and Industrial Solutions segments. Operating income also saw a substantial increase, rising to $2.05 billion from $1.56 billion.

In fiscal 2014, TE Connectivity acquired six companies, including SEACON for $528 million. Most significantly, the acquisition of Measurement Specialties for approximately $1.7 billion was completed shortly after the fiscal year-end in October 2014. The Deutsch acquisition in fiscal 2012 had also significantly contributed to the company's scale and market position.

TE Connectivity projected net sales for fiscal year 2015 to be between $14.7 billion and $15.3 billion, anticipating continued growth in its key markets, especially automotive, and further benefits from strategic acquisitions. Diluted earnings per share were expected to be in the range of $3.99 to $4.29.