2025 The next chapter of value creation TE Connectivity 2025 Investor Day Welcome Sujal Shah VP, Investor Relations Agenda Welcome Next Chapter of TE Industrial Solutions Transportation Solutions Shareholder Value Creation Sujal Shah VP, Investor Relations Terrence Curtin Chief Executive Officer Shad Kroeger President, Industrial Solutions Aaron Stucki President, Transportation Solutions Heath Mitts EVP & CFO Break Lunch Q&A 3 Forward-looking statements and Non-GAAP Financial Measures Forward-Looking Statem ...

Core Insights - U.S. stock futures advanced on Friday following a decline on Thursday, driven by strong quarterly results from Amazon and Apple [1] - Amazon reported net sales of $180.2 billion for Q3, a 13% year-over-year increase, and projected Q4 sales between $206.0 billion and $213.0 billion, up 10% to 13% year-over-year [6] - Apple reported revenue of $102.47 billion, exceeding analyst estimates, with earnings of $1.85 per share, also above expectations [6] Market Performance - Major indices showed mixed performance with Dow Jones up 0.11%, S&P 500 up 0.69%, and Nasdaq 100 up 1.21%, while Russell 2000 was down 0.03% [2] - The SPDR S&P 500 ETF Trust (SPY) rose 0.80% to $685.27, and Invesco QQQ Trust ETF (QQQ) advanced 1.31% to $634.23 in premarket trading [2] Company Highlights - Amazon's stock jumped 12.21% in premarket trading following its positive earnings report [6] - Apple's stock rose 1.88% after reporting better-than-expected financial results [6] - Netflix advanced 3.21% after announcing a 10-for-1 stock split [6] Analyst Insights - Wells Fargo's Scott Wren advises focusing on long-term trends rather than short-term market fluctuations, emphasizing the importance of sectors like technology, financials, and industrials [9][10] - The firm views market pullbacks as buying opportunities, targeting the S&P 500 to reach 7,400-7,600 by the end of 2026 [11] Upcoming Economic Data - Investors are awaiting key economic data releases, including personal income and consumer spending figures, which have been delayed [14]

Summary of CIIF 2025 Conference Call Industry Overview - **Industry**: Factory Automation in Japan - **Event**: China International Industry Fair (CIIF) 2025 held in Shanghai from September 23-27, 2025 - **Participants**: Included Japanese companies such as SMC, Misumi Group, Yaskawa Electric, Nabtesco, Mitsubishi Electric, NSK, Amada, and Greater China companies like Inovance, Airtac, Hiwin [2][6] Key Points Demand Environment - **Current Demand**: Demand remains steady, particularly in semiconductor and battery-related sectors, as well as medical-related businesses [3][11] - **Capex Recovery**: Capital expenditure-related demand has shown a steady recovery from low levels in the first half of the year, but no further recovery is expected in the latter half [3][4] - **General Outlook**: Most industry participants believe that current demand levels will hold steady without significant changes [3][4] Competitive Landscape - **Competition Intensity**: The competitive environment remains harsh, especially in middle- and low-end markets, with many companies struggling due to intensified competition [4][5] - **High-End Market Stability**: Conditions in high-end markets are largely unchanged, although local parts are increasingly adopted due to Chinese government onshoring policies [4][5] - **Company-Specific Insights**: - **Omron, Yaskawa Electric, SMC**: Facing stiff local competition and struggling somewhat [5] - **Fanuc and Nabtesco**: Competitive conditions appear stable due to strong product technologies [5] - **Misumi Group**: Has improved competitiveness through successful economy product launches and innovative products tailored for the Chinese market [5] Company Strategies - **Mitsubishi Electric**: Launched a second brand (Lingling) for the Chinese market, focusing on local development and manufacturing to reduce costs [9] - **Omron**: Plans to introduce new products tailored to the Chinese market, though these are not yet released [9] - **Yaskawa Electric**: Continues to focus on high-end markets and value-added products, avoiding low- and medium-end markets due to competition [12] - **Amada**: Reduced its Chinese business significantly over the past decade but sees future opportunities due to local manufacturers shifting to overseas production [13] - **NSK**: Focused on high-end applications with no significant changes in competitive environment [14] Additional Insights - **SMC's Focus**: Plans to concentrate on high-growth potential areas like semiconductors and medical equipment, despite tough competition in midrange markets [10] - **Misumi Group's Innovations**: Showcased new products including a small SCARA robot and AI agent for customer inquiries, with steady demand in semiconductor and medical sectors [11] Conclusion The factory automation industry in Japan is currently experiencing stable demand, particularly in high-tech sectors. However, competition remains fierce, especially in lower-end markets. Companies are adapting their strategies to enhance competitiveness and cater to local market needs, with a focus on innovation and local production.

Summary of Key Points from the Conference Call Industry Overview - **Industry**: China Industrials - **Outlook**: The industrial sector in China is facing a challenging trajectory in 2H25, with persistent macro headwinds and a cautious outlook due to muted demand and external risks, particularly from US tariffs [10][11][24][25]. Core Insights 1. **Earnings Performance**: In 1H25, 39% of companies reported earnings beats, a notable increase from 20% in 2H24, indicating improved performance against lower expectations [1]. 2. **Manufacturing Activity**: The Manufacturing PMI fell below 50 during Apr-Aug 2025, reflecting weak domestic consumption and cooling export orders [11][12]. 3. **Corporate Profits**: Industrial profits declined by 1.7% year-on-year to RMB 4 trillion (approximately USD 559 billion) in 7M25, with a slight recovery noted in July due to government measures [14]. 4. **Capex Intentions**: There is a significant contraction in Japan's machine tool orders to China, indicating a risk-off sentiment among manufacturers [16][20]. 5. **Destocking Cycle**: The destocking phase is nearing an end, but restocking is not yet in sight, as businesses await improved demand and profit margins [21]. Investment Strategies Barbell Strategy - **High-Risk Basket**: Focus on sectors like AI infrastructure, factory automation, and humanoid robots. Key picks include: - **AI Infra**: Kingboard Laminates (KBL), Shengyi Technology (SYTECH), Han's CNC [26][27]. - **Factory Automation**: Wuxi Lead, UBTECH, Hengli Hydraulic [43][46]. - **Low-Risk Basket**: Emphasize infrastructure and export sectors, with a preference for: - **China Infrastructure**: CRRC, Lesso, China State Construction International (CSCI) [5][61]. - **Export**: Techtronic, Shenzhou, Stella, focusing on high dividend yields [5]. Key Company Insights 1. **Kingboard Laminates (KBL)**: Reported 1H25 earnings growth of 28% to HKD 933 million, with expectations of improved gross margins in 2H25 due to price increases [28][29]. 2. **Shengyi Technology (SYTECH)**: Anticipates a 10-15% increase in shipments of AI-related materials, with ongoing expansion plans [33][34]. 3. **Wuxi Lead**: Expected to benefit from an EV battery capex cycle turnaround, with new orders projected to exceed previous guidance [47][48]. 4. **UBTECH**: Revised delivery guidance for humanoid robots upwards, indicating strong demand in the auto and electronics sectors [52][53]. 5. **CRRC**: Upgraded to Buy due to strong earnings and increased high-speed rail tenders, with a target price raised to HKD 7.30 [62][64]. Additional Considerations - **Policy Response**: The effectiveness of government policies in stimulating demand remains uncertain, with a need for decisive action to restore private sector confidence [24]. - **Market Sentiment**: The overall sentiment in the industrial sector is cautious, with a preference for companies with strong balance sheets and exposure to structural growth themes [25]. This summary encapsulates the key points discussed in the conference call, highlighting the current state of the China industrial sector, investment strategies, and specific company insights.

Core Insights - The Modular Wall Panel Systems Market is projected to grow from USD 1.6 Billion in 2024 to USD 2.5 Billion by 2030, with a CAGR of 7.80% driven by urbanization, faster construction needs, and sustainable practices [2][19]. Market Drivers - The demand for time-efficient and cost-effective construction solutions is a primary driver, as modular wall panels reduce construction time and labor requirements through prefabrication [6][8]. - Sectors such as healthcare, education, and commercial real estate benefit from the rapid deployment capabilities of modular systems, enhancing project planning and budgeting [7]. - Rising labor costs and a shortage of skilled tradespeople in developed regions make modular construction a practical alternative, minimizing on-site labor dependency [8]. Market Challenges - High initial investment and setup costs hinder adoption, as establishing production facilities requires significant capital for specialized equipment and automation [9][10]. - Comprehensive planning and design expenses, along with limited financing options in developing regions, further restrict the transition to modular construction [10]. - Resistance to change within construction firms complicates the adaptation of existing workflows to modular techniques, delaying broader adoption [11]. Market Trends - The integration of smart and sustainable materials into modular panels is a key trend, with manufacturers adopting eco-friendly alternatives to meet tightening environmental regulations [12][13]. - Materials such as recycled metals and engineered wood are replacing traditional materials, providing benefits like improved insulation and energy efficiency [13]. Key Market Players - Notable companies in the modular wall panel systems market include Armstrong World Industries, Hufcor, PortaFab, DIRTT Environmental Solutions, and others [16]. Report Scope - The report segments the market by product type and application, covering various sectors including healthcare, education, and commercial [15][21].

Core Insights - Aeva Technologies is strategically entering a $4 billion industrial sensing market with its Eve-1 sensor, which utilizes FMCW technology for high precision in detecting distance and micro-vibrations [1][7] - The company has successfully integrated its technology into real-world applications, with leaders like SICK AG and LMI Technologies deploying the Eve-1 sensor [2][7] - Aeva's pivot from automotive to industrial applications positions it as a significant player in factory production and quality checking [3] Aeva Technologies - Aeva's Eve-1 sensor is designed for critical industrial tasks, including electronics manufacturing and warehouse automation, showcasing its versatility beyond automotive applications [1][3] - The company has repurposed its automotive sensor for industrial use, allowing for a low-cost and rapid entry into the factory automation market [2][7] - Aeva's stock performance has seen a remarkable increase of 550% in the first half of 2025, indicating strong market interest [6] Competitors and Industry Trends - Innoviz Technologies is expanding its solid-state LiDAR technology into various sectors, including precision surveying and heavy machinery, highlighting the versatility of LiDAR beyond automotive applications [4] - Ouster is also growing its presence in factory automation and security with its Time-of-Flight LiDAR sensors, which are effective in real-time spatial understanding [5]

Financial Data and Key Metrics Changes - Consolidated revenue for Q1 2025 was $136 million, down from $144.1 million in Q1 2024, reflecting a decrease in customer capital spending due to market uncertainties [13][14] - Product revenue decreased to $93.8 million from $99.2 million year-over-year, while service revenue fell to $42.2 million from $44.9 million [14] - GAAP gross margin was 44.3%, slightly down from 44.4% in the same period last year, while non-GAAP gross margin was 48.3%, down from 48.6% [15][16] - GAAP net loss for the quarter was $13.1 million, or $0.18 per diluted share, compared to a net loss of $26 million, or $0.37 per diluted share, in the same period last year [17] Business Line Data and Key Metrics Changes - System revenue was $31.2 million, down from $32.9 million year-over-year, while consumables revenue decreased to $62.6 million from $66.3 million [14] - Consumables revenue showed a sequential growth of approximately 7% compared to the previous quarter, indicating strong utilization rates [15] - Customer support revenue within service revenue was $30 million, down from $31.4 million year-over-year [15] Market Data and Key Metrics Changes - The company noted that most of its printers and materials are produced in the U.S. or Israel, which mitigates the impact of tariffs [5][6] - The ongoing tariff situation is being monitored, with expectations of no material revenue impact [6] Company Strategy and Development Direction - The company is focusing on high-growth end users driven by megatrends such as supply chain improvement, next-generation mobility, and sustainability initiatives [4] - A strategic investment of $120 million from Fortissimo Capital has strengthened the company's cash position to approximately $270 million with no debt, enhancing its ability to pursue growth opportunities [4][18] - The company is refining its strategic focus to target promising applications while enhancing customer engagement through improved go-to-market strategies [22] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate market uncertainties and emphasized a focus on securing profitability and EBITDA [28][29] - The outlook for 2025 anticipates revenues between $570 million to $585 million, with expectations of sequential growth throughout the year [19] Other Important Information - The company launched new products, including the NEO 800 plus 3D printer and advanced materials for industrial applications, enhancing its product portfolio [7][11] - The company is actively engaging with customers to explore additive manufacturing as a solution for mitigating uncertainties in the market [58] Q&A Session Summary Question: Impact of tariffs on imports from Israel - Management clarified that tariffs are paid on the cost of goods sold, with the current tariff at 10% not being material [25][26] Question: Economic situation forecast for the second half of the year - Management reiterated guidance, expecting a slight revenue increase in the second half, while focusing on securing EBITDA amidst market uncertainties [28][29] Question: Insights on consumables and utilization trends - Management noted a return to higher utilization rates and expected full-year consumables revenue to exceed 2024 levels [34] Question: Capital allocation and M&A appetite post-Fortissimo investment - Management indicated a focus on inorganic growth opportunities and strategic acquisitions aligned with their strategy [36][37] Question: R&D spending and focus areas - Management emphasized that R&D spending is focused rather than cut, maintaining investment in key technologies and use cases [42][43] Question: Competition from low-end manufacturers - Management stated that Stratasys focuses on industrial-grade solutions, differentiating itself through reliability and total cost of ownership [47][50] Question: Customer engagement and macroeconomic conditions - Management highlighted strong customer engagement despite macroeconomic uncertainties, emphasizing the advantages of additive manufacturing [58] Question: Involvement in GenAI and automation discussions - Management confirmed ongoing efforts to integrate with the GenAI and robotics communities, leveraging data for improved manufacturing solutions [64][66]

Core Insights - Broadcom Inc. announced the launch of Audi's Edge Cloud 4 Production (EC4P) initiative, utilizing VMware Cloud software to enhance manufacturing efficiency at the Boellinger Hoefe plant in Germany, where the electric Audi e-tron GT is produced [1][2] - The EC4P initiative aims to integrate software-defined factory automation, bridging the gap between IT and operational technology (OT), with partnerships involving Broadcom, Cisco, and Siemens [2][3] Group 1: EC4P Initiative Details - The EC4P initiative includes the deployment of virtual programmable logic controllers (vPLCs) to improve productivity and efficiency in Audi's manufacturing strategy [3] - Audi plans to expand the local cloud for production across all plants, leveraging advancements in digital control systems [3] - The collaboration between Audi and Broadcom is focused on creating a more efficient, cost-effective, and secure manufacturing future [3][6] Group 2: Benefits of VMware Cloud Foundation - VMware Cloud Foundation (VCF) enables Audi to create a private cloud environment for managing critical shop floor workloads, enhancing operational efficiency [4][5] - Key benefits of VCF include reduced hardware footprint, lower maintenance costs, improved agility and scalability, and enhanced security through centralized patching [5][6] - The initiative is expected to facilitate faster updates and deployments, minimize downtime, and lower environmental impact by reducing power consumption and e-waste [5][6] Group 3: Future Applications - Future use cases for the EC4P initiative may include AI-driven production, data analytics, and computer vision applications [4] - The transition to a cloud-based infrastructure is anticipated to increase factory uptime and speed up the rollout of new applications across production lines [6]