APH Q4 2021 Earnings

Call Details

• Call Title: Amphenol Corporation Q4 2021 Earnings Call
• Date: January 26, 2022 at 6:00 PM UTC
• Management Team:
  • Craig Lampo (Chief Financial Officer)
  • Adam Norwitt (Chief Executive Officer)

Call Summary

Financial Performance

• The company reported record fourth quarter sales of $3,278,000,000, which were up 25% in U.S. dollars and in local currencies and up 18% organically versus Q4 2020.
• Full year 2021 sales were a record $10,876,000,000, which were up 26% in U.S. dollars, up 25% in local currencies, and up 18% organically versus 2020.
• GAAP operating income for Q4 was $593 million and adjusted operating income was $608 million, with GAAP operating margin of 19.6% and adjusted operating margin of 20.1% (excluding $15 million acquisition-related costs).
• Q4 GAAP diluted EPS was $0.72, up 26% versus prior year, and adjusted diluted EPS was $0.70, up 23% versus prior year; full year GAAP diluted EPS was $2.51 and adjusted diluted EPS was $2.48.
• Q4 GAAP EBITDA was $726 million and full year GAAP EBITDA was $2.6 billion; Q4 operating cash flow was $464 million and free cash flow was $379 million.
• Full year 2021 operating cash flow was $1,524,000,000 and free cash flow was $1,167,000,000, representing 98% and 75% of adjusted net income respectively.
• Working capital metrics at year-end were inventory days of 80, day sales outstanding of 71, and payable days of 56, and net leverage finished at 1.4x.
• Segment mix in Q4 was interconnect at 96% of sales (up 25% in USD) and cable up 22% in USD, with interconnect operating margin of 22.1% and cable operating margin of 2.4%.
• Book-to-bill in Q4 was 1.08-to-1 driven by a record $3,278,000,000 in orders for the quarter.
• Acquisition activity included HALO (purchase price approx. $715 million; expected sales this year approx. $250 million) and other 2021 acquisitions that contributed to revenue growth and near-term margin dilution.

Guidance

• First quarter 2022 guidance is sales in the range of $2,690,000 to $2,750,000 and adjusted diluted EPS of $0.59 to $0.61.
• The Q1 guide implies year-over-year sales growth of 13% to 16% and adjusted diluted EPS growth of 13% to 17% versus Q1 2021, assuming constant exchange rates.
• The company expects its 2022 adjusted effective tax rate to be approximately 24.5%.
• The company stated it will not provide full-year guidance beyond Q1 due to ongoing pandemic and supply chain uncertainty.
• Company expects sequential moderations in the first quarter for several end markets, including a high single-digit sequential moderation in automotive and a high single-digit moderation in IT datacom and industrial from very strong Q4 levels.
• Mobile devices are expected to show a typical seasonal sequential decline of approximately 35% in Q1 and broadband is expected to increase low double digits as Halo product sales are included.