8-K - TEL - Equibles

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): May 28, 2020

TE CONNECTIVITY LTD.

(Exact name of registrant as specified in its charter)


Switzerland		98-0518048
(Jurisdiction of Incorporation)		(IRS Employer Identification Number)

001-33260

(Commission File Number)

Mühlenstrasse 26 , CH-8200 **** Schaffhausen

Switzerland

(Address of Principal Executive Offices, including Zip Code)

+41 **** (0)52 **** 633 66 61

(Registrant’s telephone number, including Area Code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:


Title of each class		Trading symbol		Name of each exchange on which registered
Common Shares, Par Value CHF 0.57		TEL		New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 7.01. Regulation FD Disclosure

TE Connectivity Ltd. (the “Company”) is furnishing under Item 7.01 of this Current Report on Form 8-K a presentation that will be made by the Company at Bernstein’s 36^th^ Annual Strategic Decisions Conference on May 28, 2020 at 8:00 a.m. ET. At the conference, the Company will discuss and provide an update to its business and financial condition. A copy of the presentation is being furnished pursuant to Regulation FD as Exhibit 99.1 and is incorporated herein by reference. A live webcast of the event will be available at the “Investors” section of the Company’s website (www.te.com).

Item 9.01. Financial Statements and Exhibits

(d) Exhibits

ExhibitNo.	****	Description
99.1		Presentation by TE Connectivity at Bernstein’s 36^th^ Annual Strategic Decisions Conference on May 28, 2020

104		Cover page interactive data

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: May 28, 2020	TE CONNECTIVITY LTD.
	By: /s/ Harold G. Barksdale
	Name: Harold G. Barksdale
	Title: Vice President and Corporate Secretary

Exhibit 99.1

EVERY CONNECTION COUNTS<br>TE Connectivity<br>Bernstein Strategic<br>Decisions Conference<br>Terrence Curtin, CEO
© 2020 TE Connectivity.<br>Forward-Looking Statements<br>and Non-GAAP Financial Measures<br>2<br>Forward-Looking Statements<br>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<br>management's current expectations and are subject to risks, uncertainty and changes in circumstances, which may cause actual results, performance, financial condition or<br>achievements to differ materially from anticipated results, performance, financial condition or achievements. All statements contained herein that are not clearly historical in nature are<br>forward-looking and the words "anticipate," "believe," "expect," "estimate," "plan," and similar expressions are generally intended to identify forward-looking statements. We have no<br>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<br>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<br>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<br>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<br>operations; business, economic, competitive and regulatory risks, such as conditions affecting demand for products in the automotive and other industries we serve; competition and<br>pricing pressure; fluctuations in foreign currency exchange rates and commodity prices; natural disasters and political, economic and military instability in countries in which we<br>operate; developments in the credit markets; future goodwill impairment; compliance with current and future environmental and other laws and regulations; and the possible effects on<br>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<br>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<br>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<br>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<br>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. 27, 2019 as well as in our Quarterly Reports on Form<br>10-Q, Current Reports on Form 8-K and other reports filed by us with the U.S. Securities and Exchange Commission.<br>Non-GAAP Financial Measures<br>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<br>financial measure, in this presentation.
---
© 2020 TE Connectivity.<br>• Q3 sequential drivers trending roughly as expected, driven by COVID-19 impacts<br>• Orders and sales trending roughly in line with expectations through April and May, month to date<br>• China continuing to show improvement, with regional weakness in NA and Europe, as expected<br>• Continuing to demonstrate resiliency in manufacturing, with most factories operating globally; few shut downs due to<br>government regulations<br>• Our balance sheet is strong, with a strong free cash flow generation model<br>• Greater than $2B of liquidity available; expect FY20 FCF to exceed $1B<br>• Remain committed to quarterly dividend; will continue to evaluate share repurchases<br>• Continue to execute on footprint consolidation efforts, with acceleration of cost actions<br>• Investing in content growth and benefiting from secular trends across our business<br>• Expect higher earnings leverage when markets return to growth<br>• Well positioned to benefit from recovery in China and broader recovery in the Auto market<br>• Enabling a sustainable future and continuing to drive ESG initiatives<br>• Enabling sustainable applications including electric vehicles, interventional medical procedures, and efficient data centers<br>• Making continued progress on ESG initiatives and metrics<br>Key Messages<br>3<br>Free Cash Flow is a non-GAAP financial measure: see Appendix for description.
---
© 2020 TE Connectivity. 4<br>INDUSTRIAL TECHNOLOGY COMPANY CREATING A SAFER, SUSTAINABLE, PRODUCTIVE AND<br>CONNECTED FUTURE<br>TE CONNECTIVITY<br>WORLD LEADER in connectivity and sensor solutions<br>with the broadest range of technologies<br>Highly engineered products and integrated solutions perform in<br>harsh environments where failure is not an option<br>TE serves a<br>BILLION<br>MARKET<br>$190<br>TRANSPORTATION<br>SOLUTIONS<br>INDUSTRIAL<br>SOLUTIONS<br>COMMUNICATIONS<br>SOLUTIONS<br>58% 30%<br>12%<br>FY19 SALES BY SEGMENT<br>Automotive Sensors<br>Commercial<br>Transportation<br>Data & Devices Appliances<br>Aerospace &<br>Defense<br>Industrial<br>Equipment Medical Energy
---
© 2020 TE Connectivity.<br>Leading the Powertrain Revolution in Electric Vehicles<br>5<br>ENABLING END-TO-END CONNECTIVITY<br>& SENSING SOLUTIONS WHY TE IS WINNING<br>• Enabling the 10 minute charging vision<br>• Combine reliability, durability, &<br>performance<br>• Advanced thermal modeling<br>• Safe assembly, maintenance & use<br>• Global footprint and portfolio<br>WINNING WITH INDUSTRY LEADERS<br>• Vehicle Charging<br>• Power Management<br>• Electric Propulsion<br>~$6B HYBRID/EV DESIGN WINS<br>MOTOR MOTOR<br>POWER<br>DISTRIBUTION CLIMATE<br>COMPRESSOR<br>CELL<br>CONTROLLER CELL<br>MODULE<br>ON-BOARD<br>CHARGER<br>(AC/DC)<br>INVERTER<br>(DC/AC)<br>CHARGING<br>INLET<br>CONVERTER<br>(AC/DC)<br>INVERTER<br>(AC/DC)<br>HEATER<br>~$120 CONTENT PER VEHICLE
---
© 2020 TE Connectivity.<br>Saving Lives Through Interventional Medical Applications<br>6<br>ENABLING MINIMALLY INVASIVE<br>TREATMENTS LEADING EDGE TECHNOLOGY<br>• Engineering centric global ground game<br>• Deep technology expertise<br>• Embedded in high growth therapies<br>• Global supply chain with scale<br>WINNING WITH INDUSTRY LEADERS<br>• Addressing heart disease & stroke<br>• Superior patient outcomes<br>• Lower cost to providers<br>~$1B OF NEW DESIGN WINS<br>~$150 CONTENT TAVR<br>PERIPHERAL<br>ARTERIAL DISEASE,<br>STENTS<br>HEART VALVES,<br>REPAIR/REPLACE<br>STROKE CLOT<br>REMOVAL<br>BRAIN ANEURYSM<br>TREATMENT<br>Handles &<br>connectors<br>Guidewires<br>Balloons<br>Sheaths<br>Steerable<br>metal shafts<br>CORONARY<br>ARTERY DISEASE<br>HEART RHYTHM<br>DISEASE
---
© 2020 TE Connectivity.<br>Enabling Higher Performance in the Data Center<br>7<br>THE APPLICATIONS WE ENABLE WHY TE IS WINNING<br>• Global engineering excellence<br>• Strong signal integrity at high speed rates<br>• Thermal management<br>• Safe power delivery<br>WINNING WITH INDUSTRY LEADERS<br>• 800Gbps performance<br>• Cooler data centers<br>• 45KW Power Rack<br>SERVER<br>~$80<br>CONTENT<br>SWITCH<br>~$150<br>CONTENT<br>~$1B IN NEW DESIGN WINS<br>Existing Platform<br>New Platform
---
© 2020 TE Connectivity.<br>Free Cash Flow and Liquidity<br>8<br>LIQUIDITY<br>STRONG LIQUIDITY POSITION<br>• $2.3B liquidity available<br>• ~$800M in cash<br>• $1.5B undrawn revolver<br>• Debt/EBITDA currently at 1.5x**<br>PRIORITIES<br>• Remain committed to quarterly dividend<br>• Will continue to evaluate share<br>repurchases<br>• Capital expenditures reduced by<br>over $100M<br>FY20 FCF EXPECTED TO BE >$1B<br>Free Cash Flow is a non-GAAP financial measure; see Appendix for description and reconciliation<br>Excludes debt maturing after fiscal year 2025<br>Represents the Ratio of Consolidated Total Debt to Consolidated EBITDA as defined in our five-year unsecured senior credit agreement. Please refer to the Appendix for additional information<br>$ in Millions<br>CASH & DEBT MATURITY PROFILE<br>As of 3/27/2020<br>Cash Debt<br>$796<br>$350<br>$635<br>$500<br>$605<br>$350<br>$605<br>2020 2021 2022 2023 2024 2025<br>FREE CASH FLOW<br>$64<br>Q1<br>Q2<br>Q3<br>Q4<br>2018 2019 2020<br>$670<br>$688<br>$443<br>$515<br>$344 $223<br>$311<br>$243<br>$69
---
© 2020 TE Connectivity.<br>REPORTING FRAMEWORKS<br>TE is Enabling a Sustainable Future<br>9<br>MEASURING OUR PROGRESS<br>~40%<br>reduction in GHG<br>emissions intensity<br>since FY2010<br>30%<br>reduction in<br>water usage<br>since<br>FY2010<br>80%<br>of manufacturing<br>sites recorded one<br>injury/illness orless<br>30%<br>reduction in<br>energy use<br>intensity since<br>FY2010<br>~30%<br>of middlemanagement<br>positions occupied<br>by women<br>240,000+<br>Hours of compliance training<br>and LEARN@TE courses<br>completed by employees<br>20<br>Tech Days innovation<br>Events held in<br>10 countries<br>~20%<br>of leadership<br>positions occupied<br>by women<br>THE APPLICATIONS WE ENABLE<br>TE Corporate Responsibility Report:<br>https://www.te.com/global-en/about-te/corporate-responsibility.html<br>Metrics reported in 2018 Corporate Responsibility Report, issued July 2019
---
WHEN<br>TECHNOLOGY<br>CONNECTS,<br>SO DOES HUMANITY.<br>EVERY CONNECTION COUNTS
---
© 2020 TE Connectivity.<br>Appendix
---
© 2020 TE Connectivity.<br>Non-GAAP Financial Measures<br>12
---
© 2020 TE Connectivity.<br>Reconciliation of Free Cash Flow<br>13
---
© 2020 TE Connectivity.<br>Ratio of Consolidated Total Debt to Consolidated EBITDA<br>(as defined in the Credit Facility)*<br>14
---