SENSATA THIRD QUARTER 2018 EARNINGS PRESENTATION OCTOBER 30, 2018 - PowerPoint PPT Presentation

SENSATA THIRD QUARTER 2018 EARNINGS PRESENTATION OCTOBER 30, 2018

Forward-Looking Statements and Non-GAAP Measures Forward-Looking Statements This earnings presentation contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Sensata believes that its expectations are based on reasonable assumptions. No assurance, however, can be given that such expectations will prove to have been correct. A number of factors could cause actual results to differ materially from the projections, anticipated results, or other expectations expressed in this earnings presentation, including, without limitation, risks associated with regulatory, legal, governmental, political, economic and military matters; adverse conditions in the automotive industry; competition in our industry, including pressure from customers to reduce prices; supplier interruptions, which could limit access to manufactured components or raw materials; business disruptions due to natural disasters; labor disruptions; difficulties with or failures integrating acquired businesses; market acceptance of new products; fluctuations in foreign exchange rates; and our level of indebtedness. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak to results only as of the date the statements were made; and we undertake no obligation to publicly update or revise any forward-looking statements, whether to reflect any future events or circumstances or otherwise. See "Risk Factors" in the Company's 2017 Annual Report on Form 10-K and other public filings and press releases. Copies of our filings are available from our Investor Relations department or from the SEC website, www.sec.gov. Non-GAAP Financial Measures Where we have used non-GAAP financial measures, reconciliations to the most comparable GAAP measures are provided, along with a disclosure on the usefulness of the non- GAAP measure, at the back of this presentation or in the “Investor Relations” section of the Company’s website, www.investors.sensata.com. Q3-2018 EARNINGS SUMMARY 2

Q3-2018 GAAP Results Δ Q3-2018 Q3-2017 $873.6M $819.1M Revenue 6.7% Gross Profit $315.2M $291.8M 8.0% 36.1% 35.6% (% of revenue) R&D $37.8M $34.0M 11.2% (% of revenue) 4.3% 4.2% $73.9M $75.9M SG&A (2.6%) (% of revenue) 8.5% 9.3% Profit from Operations $222.3M $140.3M 58.5% 25.5% 17.1% (% of revenue) Tax Rate 14.1% 14.4% (30 bps) $149.1M $88.0M Net Income 69.4% (% of revenue) 17.1% 10.7% Diluted EPS $0.88 $0.51 72.5% Diluted Shares Outstanding 168.6M 172.2M (3.7M) Q3-2018 EARNINGS SUMMARY 3

Delivering strong secular growth and executing high-return capital deployment initiatives  Accelerating organic revenue growth as a result of attractive, secular content growth in all markets – Q3-18 organic revenue growth of 7.9%  End markets performing in-line with expectations – HVOR remains strong; auto production is in-line with expectations set at start of the year  Sustaining double-digit adjusted EPS growth – adjusted EPS growth of 12.3%, while making long-term investments  Strengthening portfolio and position in electrification – completed divestiture of valves business and announced acquisition of GIGAVAC  Executing on high-return capital deployment – substantially completed $400 million share repurchase program, announcing new $250 million authorization Q3-2018 EARNINGS SUMMARY 4

Secular growth drives strong Q3-18 performance PERCENT OF REVENUES HVOR – Organic revenue growth: 19.8% • Outgrew underlying market production by 1020 basis points ~16% • Secular growth being driven by the need for cleaner and more efficient engines and transition to electrified cabins • Secular growth extends into FY-19 and beyond • Wins for newly launched applications are ramping quickly Auto – Organic revenue growth: 6.8% • Outgrew underlying market production by 940 basis points • NA and China results strong due to new content gains ~59% • Auto production in-line with expectations at beginning of the year • Content drivers secured for 2019 and beyond: gas particulate filters in Europe, China TPMS and high- speed transmission launches in North America Industrial & Other – Organic rev growth: 4.0% • High-single digit organic growth in both Aero & Industrial Sensing • Aerospace is the strongest performing end market ~25% • North America and China drive growth Q3-2018 EARNINGS SUMMARY 5

Electrification is a significant driver of Sensata’s growth over the next 3 years and beyond Next 3 Years CLEAN & ELECTRIFICATION CHINA EFFICIENT Further expansion Sustained vehicle Mandates for cleaner, of electrification modernization more efficient vehicles in China Q3-2018 EARNINGS SUMMARY 6 6

Sensata is solving some of our customers’ most complex Electrification challenges Industry Challenges Examples of Sensata Solutions • Increasing range • Advancing core sensor technology • Decreasing charging times • Scaling up high-voltage contactors • Scaling production expected through GIGAVAC acquisition • Wireless battery management • Driving lower costs • Innovative embedded motor sensing • Increasing safety as voltages/power • Operator sensing technologies for density increases • Onboarding energy regeneration electrified cabins Q3-2018 EARNINGS SUMMARY 7 7

Acquisition of GIGAVAC extends secular growth in Electrification across Auto, HVOR and Industrial markets • GIGAVAC is a profitable, fast growing provider of high-voltage contactors ; acquisition intended to extend Sensata’s core competency in electrical protection • GIGAVAC’s business is highly aligned to Sensata’s strategy and brings additional content to Sensata’s existing customer base GIGAVAC doubles Sensata’s 2X content per vehicle opportunity 34% + GIGAVAC revenue CAGR from 2013 to 2017 $80M GIGAVAC revenue estimate for FY-2018 – ~60% of revenues are outside of auto Q3-2018 EARNINGS SUMMARY Q3-2018 EARNINGS SUMMARY 8

GIGAVAC doubles our content on battery electric vehicles and we have significant potential for additional growth Pre-GIGAVAC Post-GIGAVAC BEV of the Future ~$20 per vehicle ~$40 per vehicle ~$175* of incremental content per vehicle • Regenerative Braking • 2 – 5 High-Voltage • Wireless Battery Management • HVAC Contactors per Vehicle • Motor Position Sensing • Thermal Management • Expansion of Core Sensors • TPMS *Potential Served Available Market (SAM) for Wireless Battery Management & Motor Position Sensing Q3-2018 EARNINGS SUMMARY 9

Sensata is exposed to some of the most attractive and fastest growing segments of the automotive industry Sensor-Rich Solutions for Efficient, Traditional Connected Subsystems Powertrain • HVAC 10% • Regenerative Braking • Vehicle Health Monitoring High-Growth Industrial Sensors for Clean Electrified Engines 19% Auto & Other • Gas Direct Injection 50% • Gas Particulate Filters • Cylinder Deactivation 5% Aerospace Solutions for New Energy Vehicles • High-Voltage Contactors 16% • Embedded Motor Position • Wireless Battery Management HVOR % of Sensata Revenue Q3-2018 EARNINGS SUMMARY 10

Growth in Electrification also extends into the HVOR, Industrial and Aerospace markets HVOR Industrial Aerospace APPLICATIONS APPLICATIONS APPLICATIONS • High-voltage contactors • Electrical protection to serve • Advanced circuit breakers • Embedded motor position high and low voltage/current used in long-cycle aerospace applications across industrial electrification • Current sensing markets • Wireless battery management • Power conversion components and subsystems • Battery back-up applications Q3-2018 EARNINGS SUMMARY 11

Sensata Electrification strategy: key takeaways  Electrification is a net content tailwind for Sensata and the company is winning business today in its automotive, industrial and heavy vehicle & off-road businesses as secular demand for electrified products grows  Sensata is delivering mission-critical, customized solutions to meet its customers most challenging problems and has expertise in adapting and evolving its portfolio to meet new market demands such as electrification  Acquisition of GIGAVAC is a positive catalyst for Sensata’s electrification strategy , as Sensata will leverage its industry expertise, manufacturing capabilities and leadership in automotive/electrical protection to scale GIGAVAC’s business globally Q3-2018 EARNINGS SUMMARY 12 12

We are executing against the operational targets we established at our Investor Day Execute Balanced, Deliver Double-Digit Accelerate Increase Returns-Driven Adjusted Organic Growth Margins Capital Deployment EPS Growth 70 bps 6.9% 14.2% Q3-18 YTD • Announced GIGAVAC Q3-18 YTD Adj. Q3-18 YTD acquisition Organic Revenue EBIT Margin Growth Growth Expansion (Organic) • Completed $400M share (Organic) repurchase program in past four months • Announced new share Long-Term Target: Long-Term Target: Long-Term Target: repurchase authorization of up to $250M over next 4 – 6% 10 – 13% 250 bps 18 months CAGR Margin Expansion CAGR Q3-2018 EARNINGS SUMMARY 13