10-KPeriod: FY2021

TE Connectivity plc Annual Report, Year Ended Sep 24, 2021

Filed November 9, 2021For Securities:TEL

Summary

TE Connectivity plc (TEL) reported strong financial performance for the fiscal year ended September 23, 2021, demonstrating significant recovery and growth following the impacts of the COVID-19 pandemic. Net sales increased by 22.6% to $14.92 billion, driven by robust organic growth of 18.2% and a positive foreign currency translation impact. The company's three core segments—Transportation Solutions, Industrial Solutions, and Communications Solutions—all experienced sales growth, with Transportation Solutions showing particular strength, increasing by 31.1%. This performance reflects successful navigation of supply chain challenges and growing demand across key end markets, including automotive, industrial equipment, and data/devices. The company also highlighted its focus on operational efficiency and cost management, which contributed to a substantial increase in gross margin to 32.7% and operating income to $2.43 billion. TE Connectivity continues to invest in its business, evidenced by capital expenditures and strategic acquisitions, while also returning capital to shareholders through dividends and share repurchases. The company's outlook for fiscal 2022 indicates continued sales growth, albeit with some expected moderation in the automotive sector due to production declines, balanced by strength in industrial and communications markets.

Financial Statements
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Key Highlights

  • 1Net sales increased by 22.6% to $14.92 billion in fiscal 2021, with organic net sales growing by 18.2%.
  • 2All three reportable segments—Transportation Solutions, Industrial Solutions, and Communications Solutions—experienced net sales growth.
  • 3Transportation Solutions saw a significant 31.1% increase in net sales, driven by automotive, commercial transportation, and sensor markets.
  • 4Gross margin improved to 32.7% from 30.7% in the prior year, reflecting higher volume and manufacturing productivity.
  • 5Operating income surged to $2.43 billion, a substantial increase from $0.54 billion in fiscal 2020, which included a goodwill impairment charge.
  • 6The company returned $647 million to shareholders through dividends and repurchased approximately 7 million shares for $904 million in fiscal 2021.
  • 7TE Connectivity acquired four businesses in fiscal 2021 for $422 million, integrating them into its Industrial Solutions segment.

Frequently Asked Questions

In fiscal year 2021, TE Connectivity plc reported a 22.6% increase in net sales to $14.92 billion, driven by an 18.2% organic net sales growth. The company's gross margin improved to 32.7%, and operating income significantly increased to $2.43 billion. This performance reflects a strong recovery and growth across its key business segments.

All three segments, Transportation Solutions, Industrial Solutions, and Communications Solutions, contributed to growth. The Transportation Solutions segment was a major driver, with a 31.1% increase in net sales. Communications Solutions also showed strong growth at 30.4%, while Industrial Solutions increased by 3.5%.

TE Connectivity focused on cost management and operational efficiencies, which, combined with higher sales volumes, led to an improved gross margin of 32.7% compared to 30.7% in the prior year. The company also benefited from higher manufacturing productivity and favorable foreign currency translation.

For the first quarter of fiscal 2022, TE Connectivity expects net sales of approximately $3.7 billion and diluted earnings per share of around $1.50. The outlook anticipates sales growth in Industrial Solutions and Communications Solutions, partially offset by a decline in Transportation Solutions due to expected decreases in global automotive production.