Sensata Technologies, Inc. Business Report FY ended Dec. 2015

Business Highlights

Financial Overview

(in million USD)
  FY ended Dec. 31, 2015 FY ended Dec. 31, 2014 Rate of change
Net Sales 2,975.0 2,409.8 23.5 1)
Operating Income 798.3 678.1 17.7 -
Performance Sensing business
Net Sales 2,346.2 1,755.9 33.6 2)
-Pressure sensors 1,631.7 1,164.5 40.1
-Speed and position sensors 328.1 275.6 19.0
-Temperature sensors 191.4 152.7 25.3
-Pressure switches 55.6 65.1 (14.6)
-Other 139.5 97.9 42.5
Operating Income 598.5 475.9 25.8

-In 2015, the Company determined that force sensors were no longer a significant product category for its business, and reclassified the revenue related to "force sensors" category to "other."
-In 2015, the Company determined that the products of certain businesses acquired in 2014 that were previously included in "other" were more appropriately categorized as "speed and position sensors". Prior periods have been recast to reflect these changes.

1) Overall
-Net revenue for FY 2015 was USD 2,975 million, an increase of 23.5% from FY 2014. The Company sells a significant portion of its products in the automotive industry (67% in FY 2015), demand for its products is driven in large part by conditions in this industry.

2) Performance Sensing business
-Net revenue in the Performance Sensing business totaled USD 2,346.2 million, a 33.6% increase over the previous year. It was accounted for approximately 79% of total net revenue.


-On December 1, 2015, the Company completed the acquisition of all of the outstanding shares of certain subsidiaries of Custom Sensors & Technologies Ltd. (CST) in the U.S., the U.K., and France, as well as certain assets in China, for an aggregate purchase price of approximately USD 1,008.8 million. The acquisition included the Kavlico, BEI, Crydom, and Newall product lines and brands, and encompassed sales, engineering, and manufacturing sites in the U.S., the U.K., Germany, France, and Mexico. The Company acquired CST to further extend its sensing content beyond automotive markets and build scale in pressure sensing.

Outlook for FY 2016

-For FY 2016, the Company anticipates net revenue of USD 3,140 to USD 3,280 million which, at the midpoint, represents growth of 7.9% compared to the FY 2015. (From a press release on February 2, 2016)

-The Company continues to focus on expanding its presence in all global geographies, both emerging and mature. Customers include established multinationals, as well as local producers in emerging markets such as China, India, Eastern Europe, and Turkey. China continues to remain a priority for the Company because of its export focus and domestic consumption of products that utilize its devices. The Company continues to focus on managing its costs and increasing its productivity in these lower-cost manufacturing regions.

Automotive sensor market
-The global automotive sensor market was USD 19.9 billion in 2015, compared to USD 19.1 billion in 2014.

-The Company believes revenue growth from the global automotive and HVOR sensor end-markets is driven by three principal trends.
1) Global automotive vehicle unit sales are expected to continue to increase over the long-term due to population growth and increased usage of cars in emerging markets.
2) The number of sensors used per vehicle has expanded, driven by a combination of factors including government regulation of safety, emissions, and greater fuel efficiency, consumer demand for new applications, and productivity for HVOR applications.
3) Revenue growth has been augmented by a continuing shift away from legacy electromechanical products towards higher-value electronic solid-state sensors.

R&D Expenditure

(in million USD)
  FY ended Dec. 31, 2015 FY ended Dec. 31, 2014 FY ended Dec. 31, 2013
Overall 123.7 82.2 58.0


-As of December 31, 2015, excluding the acquisition of CST, the Company had approximately 239 U.S. and 244 non-U.S. patents and approximately 47 U.S. and 172 non-U.S. pending patent applications that were filed within the last five years. The acquisition of CST added approximately 83 U.S. and 175 non-U.S. patents and approximately 12 U.S. and 35 non-U.S. pending patent applications that were filed within the last five years. These patents have expiration dates ranging from 2016 to 2035.

Technological Alliance

-The Company purchases sense element assemblies, which are components used primarily in the Company's monosilicon strain gage pressure sensors, from Measurement Specialties, Inc. and its affiliates (MEAS) and also manufacture them internally as a second source. In March 2013 the Company entered into an intellectual property licensing arrangement with MEAS. Pursuant to the terms of the License Agreement, the Company is authorized to produce its entire need for these sense elements within the passenger vehicle and heavy duty truck fields of use. The sense element assemblies subject to the License Agreement accounted for USD 386.3 million in net revenue for the year ended December 31, 2015, of which USD 206.7 million was related to products that were manufactured by MEAS, and USD 179.6 million was related to products that were manufactured by the Company.

Product Development

-The Company is known for its expansive sensor portfolio for diesel and petrol engines. One example of the Company's pro-active sensor development is related to the engine intake air manifold pressure and temperature sensor, known as the TMAP. This sensor measures the pressure and temperature of the intake air for optimized engine performance. The usage of the TMAP sensor is partly driven by the more frequent usage of turbo chargers for engines, a trend which is more visible recently with the downsizing of petrol engines for passenger cars. (From a press release on July 16, 2015)

Capital Expenditure

(in million USD)
  FY ended Dec. 31, 2015 FY ended Dec. 31, 2014 FY ended Dec. 31, 2013
Performance Sensing 125.4 95.5 38.4
Sensing Solutions 16.9 13.8 20.7
Corporate and other 34.9 34.8 23.7
Total 177.2 144.2 82.8

-The Company's capital expenditures in 2015 primarily relate to investments associated with increasing its manufacturing capacity.


-The Company anticipates capital expenditures of approximately USD 150 million to USD 175 million in 2016.