TE Connectivity Ltd.

Overview Key strengths Key risks Global operating scale in the connector industry that has favorable growth tailwinds and strong demand over the next few years. High automotive end-market concentration leads to potential business volatility and revenue and margin pressures. Solid free operating cash flow generation approaching $2 billion in fiscal 2022. Ongoing expense restructuring to manage price erosion and optimize manufacturing footprint. Strong liquidity position and low adjusted leverage at about 1.2x. Automotive is an important end market for the company and has been a major contributor to transportation revenue expansion over the past few years. Automotive sales have contributed 40%-45% to total revenue historically and generate higher-than-corporate-average profitability. TE Connectivity's automotive revenues declined 6% (on an organic basis) year

...Global scale and diverse product applications across a variety of industries experiencing strong demand. Automotive is an important end market for the company and has been a major contributor to transportation revenue expansion over the past few years. Automotive sales have contributed 40%-45% to total revenue historically and generate higher-than-corporate-average profitability. TE Connectivity's automotive revenues declined 6% (on an organic basis) year over year in the first quarter of fiscal 2022, reflecting industry and auto production challenges that will likely last into calendar 2023. While this segment can experience revenue variability, S&P Global Ratings expects TE Connectivity's solid market position--as evidenced by $6.4 billion in revenues (fiscal 2021) from its automotive segment--and well-established customer relationships will support relative outperformance of industry trends...

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