TE Connectivity Ltd. (Formerly Tyco Electronics Ltd.) Business Report FY ended Sep. 2015
Financial Overview |
(in million USD) |
| FY ended Sep. 25, 2015 | FY ended Sep. 26, 2014 | Rate of change (%) |
Factors | |
| Overall | ||||
| Net Sales | 12,233 | 11,973 | 2.2 | 1) |
| Operating Income | 1,749 | 1,805 | (3.1) | - |
| Transportation Solutions Segment | ||||
| Net Sales | 6,351 | 6,090 | 4.3 | 2) |
| Operating Income | 1,193 | 1,245 | (4.2) | - |
Factors
1) Overall Net Sales
-The Company's net sales increased 2.2% to USD 12,233 million in the FY ended September 25, 2015 as compared to FY 2014. The increase in net sales resulted from sales contributions from acquisitions of 5.9% and organic sales growth of 3.8%, partially offset by the negative impact of foreign currency translation of 7.5%. On an organic basis, net sales increased 3.8%, primarily as a result of sales increases in the Transportation Solutions and Communications Solutions segments. Price erosion adversely affected organic sales by USD 208 million.
2) Transportation Solutions Net Sales
-Net sales in the Transportation Solutions segment increased 4.3% to USD 6,351 million in FY 2015 as compared to FY 2014 as a result of sales contributions from acquisitions of 9.3% and organic sales growth of 4.1%, partially offset by the negative impact of foreign currency translation of 9.1%. Measurement Specialties contributed net sales of USD 548 million.
-The organic net sales for Automotive market increased 5.1% with growth of 8.2% in the Asia–Pacific region, 4.4% in the EMEA region, and 0.8% in the Americas region. Growth in the Asia–Pacific and EMEA regions and North America was driven primarily by increased content per vehicle. This growth was partially offset by weakness in South America driven by lower production volumes in Brazil.
Acquisitions
-In October 2014, the Company announced that it has completed the acquisition of Measurement Specialties, Inc., which was announced in June 2014. Measurement Specialties offers a broad portfolio of sensor technologies including pressure, vibration, force, temperature, humidity, ultrasonics, position and fluid, for a wide range of applications and industries. Measurement Specialties will be included as part of TE's Transportation Solutions segment. (From a press release on October 9, 2014)
Divestitures
-In November 2015, Littelfuse, Inc. announced that it has entered into a definitive agreement to acquire the circuit protection business of TE Connectivity Ltd. for USD 350 million. This business has a leading position in polymer-based resettable circuit protection devices with a strong global presence in the automotive, battery, industrial, communications and mobile computing markets. The business is headquartered in Menlo Park, California, the U.S. with manufacturing facilities in Shanghai and Kunshan, China and Tsukuba, Japan. The acquisition is expected to close in the first half of 2016. Through this transaction, the Company intends to focus and expand its position in harsh environment connectivity and sensor solutions. (From a press release on November 9, 2015)
Outlook for FY ending Sep. 2016
-For FY 2016, the Company expects net sales to be between USD 12.0 billion and USD 12.8 billion, primarily reflecting sales increases in the Transportation Solutions segment offset by sales declines in the Communications Solutions segment from FY 2015 levels.
-During FY 2016, the Company expects sales for Transportation Solutions segment to increase in the automotive end market while it expects global automotive production to be flat as compared to FY 2015. Also, the Company expects its sales growth in the sensors end market to be partially offset by sales declines in the commercial transportation end market.
R&D Expenditure |
(in million USD) |
| FY ended Sep. 25, 2015 | FY ended Sep. 26, 2014 | FY ended Sep. 27, 2013 | |
| Overall | 540 | 484 | 494 |
| -Transportation Solutions | 262 | 196 | 199 |
R&D Structure
-The Company has approximately 7,000 engineers working in product research, development, and engineering.
-In FY 2015, the Company derived approximately 20% of its net sales from new products, including product extensions, introduced within the previous three fiscal years.
Capital Expenditure |
(in million USD) |
| FY ended Sep. 25, 2015 | FY ended Sep. 26, 2014 | FY ended Sep. 27, 2013 | |
| Overall | 600 | 635 | 581 |
| -Transportation Solutions | 400 | 379 | 325 |
Investment Outside Switzerland
-The Company has opened its new facility to design and manufacture temperature sensors in Andover, Minnesota, USA. The new 51,350 square foot facility will serve customers across several industries and sectors, from industrial solutions to HVAC, medical devices, food preparation, aerospace and defense and beyond. Current employees of TE's Ham Lake, Minnesota, location will move to the new Andover facility, five miles to the southwest. The new Andover facility has the capability to expand to over 80,000 square feet. (From a press release on December 11, 2014)