TE Connectivity Ltd. (Formerly Tyco Electronics Ltd.) Business Report FY ended Sep. 2017
Financial Overview |
(in million USD) |
| FY ended Sep. 30, 2017 |
FY ended Sep. 30, 2016 | Rate of change (%) |
Factors | |
| Overall | ||||
| Net Sales | 13,113 | 12,238 | 7.1 | 1) |
| Operating Income | 2,047 | 1,902 | 7.6 | - |
| Transportation Solutions Segment | ||||
| Net Sales | 7,039 | 6,503 | 8.2 | 2) |
| Operating Income | 1,209 | 1,191 | 9.1 | - |
Factors
1) Overall Net Sales
-The Company's net sales in FY ended September 30, 2017 increased by 7.1% to USD 13,113 million.
The increase in net sales resulted from organic net sales growth of 6.0% and net sales contributions from acquisitions and a divestiture of 1.8%, partially offset by negative impact of foreign currency translation of 1.7%.
2) Transportation Solutions Net Sales
-Net sales in the Transportation Solutions segment in FY ended September 30, 2017 increased by 8.2% to USD 7,039 million as a result of organic net sales growth of 8.5%. Fiscal 2016 included an additional week which contributed USD 130 million in net sales.
-The organic net sales for Automotive market increased 7.1% in FY 2017.The increase resulted from growth of 11.1% in the Asia–Pacific region, 5.6% in the EMEA region, and 1.4% in the Americas region.
The growth in the Asia-Pacific region was driven by increased demand in China resulting from a tax incentive program, market share gains, and increased electronification. In the EMEA region, the organic net sales growth was driven by market growth, electronification, and new model launches. The growth in the Americas region resulted from continued market recovery in South America.
Acquisitions
-On August 31, 2017, the Company announced that it has completed the acquisition of Hirschmann Car Communication (HCC). The business will now be reported as part of the TE's Transportation Solutions segment. Hirschmann Car Communication is one of the world’s leading specialists in antenna technologies, primarily for automobile communications and connectivity. Hirschmann Car Communication is known for its strong engineering expertise and developing technologically advanced offerings such as antenna modules and tuners for automotive connectivity. HCC is based in Germany and operates in Europe, North America and China. (From a press release on August 31, 2017)
-During FY 2016, the Company acquired four businesses, including Jaquet Technology Group, a manufacturer of speed sensors, for a combined cash purchase price of USD 1.3 billion, net of cash acquired. (From FY 2016 annual report and a press release on May 20, 2016)
Outlook for FY ending Sep. 2018
-For FY 2018, the Company expects net sales to be between USD 13.7 billion and USD 14.1 billion. These increases reflect sales growth in the Transporatation Solutions and Industrial Solutions segments, and to a lesser degree, the Communications Solutions segment relative to the same periods of fiscal 2017.
-The Company expects global automotive production to increase approximately 1% in fiscal 2018. The Company also expects continued growth in the commercial transportation and sensors end markets.
R&D Expenditure |
(in million USD) |
| FY ended Sep. 30, 2017 |
FY ended Sep. 30, 2016 | FY ended Sep. 25, 2015 | |
| Overall | 595 | 566 | 540 |
| -Transportation Solutions | 344 | 312 | 262 |
R&D Structure
-The Company has more than 7,000 engineers working in product research, development, and engineering.
-In FY 2017, 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. 30, 2017 |
FY ended Sep. 30, 2016 | FY ended Sep. 25, 2015 | |
| Overall | 702 | 628 | 600 |
| -Transportation Solutions | 471 | 429 | 400 |
Investment Outside Switzerland
-The Company's China auto business has started the second phase of its NEPZ Plant expansion project in Suzhou. Approximately USD 100 million is expected to be invested in this project, and new operations are scheduled to begin in 2017. The plant will have a floor area of 45,000 square meters, and will produce connectors, wire harnesses, junction boxes, and sensors for new energy vehicles. The Company’s EPZ Plant in Suzhou is also planning the third phase of its expansion project, which will increase the plant’s floor area to 36,500 square meters. Its new operations are expected to begin in 2017 as well. (From news releases issued by multiple sources on January 10, 2017)