Sensata Technologies, Inc. Business Report FY ended Dec. 2016

Financial Overview

(in million USD)
FY ended Dec. 31, 2016 FY ended Dec. 31, 2015 Rate of change
Net Sales 3,202.3 2,975.0 7.6 1)
Operating Income 877.4 798.3 9.9 -
Performance Sensing business
Net Sales 2,385.4 2,346.2 1.7 2)
-Pressure sensors 1,724.7 1,631.7 5.7
-Speed and position sensors 305.3 328.1 (7.0)
-Temperature sensors 185.3 191.4 (3.2)
-Pressure switches 56.0 55.6 0.7
-Other 114.1 139.5 (18.2)
Operating Income 615.5 598.5 2.8

1) Overall
-Net revenue for FY 2016 was USD 3,202 million, an increase of 7.6% from FY 2015. The Company sells a significant portion of its products in the automotive industry (63% in FY 2016), 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 2,385.4 million, a 1.7% increase over the previous year. It was accounted for approximately 74% 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 2017

-For FY 2017, the Company anticipates net revenue of USD 3,150 to USD 3,250 million. (From a press release on February 2, 2017)

-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 21.2 billion in 2016, compared to USD 20.1 billion in 2015.

-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, 2016 FY ended Dec. 31, 2015 FY ended Dec. 31, 2014
Overall 126.7 123.7 82.2

- R&D expense has increased in FY 2015 and FY 2016 due to continued investment to support new platform and technology developments, both in our recently acquired and existing businesses, in order to drive future revenue growth.


-As of December 31, 2016, the Company had approximately 298 U.S. and 314 non-U.S. patents and approximately 46 U.S. and 275 non-U.S. pending patent applications that were filed within the last five years.

Technological Alliance

-The Company and Quanergy Systems, Inc., a provider of solid state LiDAR sensors and smart sensing solutions, announced that they have reached strategic partnership and investment agreements to advance the ongoing development and commercialization of Quanergy’s LiDAR technology. Sensata and Quanergy will be exclusive partners for component level solid state LiDAR sensors in the transportation market. LiDAR sensing is expected to be a mission-critical component of future advanced driver assistance systems including autonomous driving. Together, The Company and Quanergy will leverage Quanergy’s substantial intellectual property and current and future technology development to deliver LiDAR sensors that have substantially lower costs, higher reliability, improved capability, and lower power consumption when compared to traditional mechanical LiDAR sensors. (From a press release on March 7, 2016)

-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 397.7 million in net revenue for the year ended December 31, 2016, of which USD 150.6 million was related to products that were manufactured by MEAS, and USD 247.1 million was related to products that were manufactured by the Company.

Product Development

-The Company and Quanergy Systems, the leading provider of solid state LiDAR sensors and smart sensing solutions, showcased their solid state LiDAR solution at the Consumer Electronics Show (CES) in Las Vegas. The Company and Quanergy signed an exclusive agreement in March 2016 to provide component level solid state LiDAR sensors to the ground transportation market. Since finalizing the agreement, both companies have been working to develop solid state optical phased array scanning LiDAR sensors that provide long-range, high-resolution scanning for next-generation ADAS and autonomous driving systems. Quanergy was recently awarded the CES 2017 'Best of Innovation' Award in the vehicle intelligence category for its S3 solid state LiDAR sensor. The S3 is the first and only compact, low-cost, automotive-grade solid state LiDAR sensor. The sensor can be concealed within the body of any vehicle, ensuring uncompromised design aesthetics and aerodynamics. Sensata and Quanergy will deliver samples to automotive customers for testing and evaluation later in 2017. (From a press release on January 3, 2017)

-The Company announced that it has developed a line of smaller, lighter Micro-fused Strain Gage (MSG) pressure sensors for use in next-generation brake systems of hybrid, electric, and conventional vehicles. The MSG pressure technology will be offered at less than 5 grams, with a body diameter less than 7.8mm, and a height less than 30mm. The eXtra-small Form Factor (XFF) sensor is available for design-in beginning in January 2016. (From a press release on February 1, 2016)

Capital Expenditure

(in million USD)
FY ended Dec. 31, 2016 FY ended Dec. 31, 2015 FY ended Dec. 31, 2014
Performance Sensing 99.3 125.4 95.5
Sensing Solutions 11.9 16.9 13.8
Corporate and other 19.0 34.9 34.8
Total 130.2 177.2 144.2

-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 130 million to USD 150 million in FY 2017.