TE Connectivity plc Citi Global TMT Conference

Thank you for the question, and also thank you all for being here. I'll get to your question, I promise. First off is I think what's important is when you think about what TE does, we very much focus on where does data need connectivity, as well as when you need compute and data, you also need power. It's areas that I think drive the growth that I'll talk about. One of the things that we've been very focused on at TE is how do we continue to broaden our growth profile. It was a big part of what we teed up at Investor Day. Like you said, Asiya, there's a lot of it that I'm sure we'll have questions around AI and our momentum and our DDN business that has had tremendous growth.

But I also think when you look at what we're experiencing right now is across our industrial businesses, anything that's CapEx exposed is really driving growth, and faster than we would've even expected when we talked earlier in the year. Certainly on the data side, what we see happening, and you've seen a lot of companies here today talk about everything that has to happen around AI and also the hardware around it. We're no different than that. Our DDN orders are up 70%, and while we grew $1 billion this year, that really sets up a very strong backlog for next year with the partnerships we have with our hyperscale customers. But it's just not what's happening in data.

In our industrial segment, what we're seeing with where we serve connections from an energy infrastructure, which are driven around power, we're seeing double-digit orders there, where you have a market that used to grow 1% or 2%, now it's probably growing three to four times what it used to, and we've really capitalized to make sure we can grow double digits in that business. Then you have those secular areas that we benefit from, like aerospace and defense, going to grow double digits due to everything happening there, as well as a general industrial uptick that we've seen around the world. This is where we would play with factory automation, where you need connectivity that brings that data out to get to the intelligence to be processed through the LLMs. When you think about our industrial segment, we're going to grow about $2.5 billion this year.

About 80% of our growth is in that segment, and it's very broad. Then in the transportation area, that's an area that we're sort of driving content growth in a flat market. There are areas that are also around data and power. Self-driving cars, software-defined vehicles, also an electric vehicle, which in Asia is very strong, and we're strong. When you think about that framework, which we're growing about twice it- Right We see that momentum are going to continue, and it all starts around data and power.

Certainly the CapEx elements of where we play, we just see that motoring along and orders up very strong to record backlog as we enter into our 2027. There's no reason to say that's going to slow down as we go into 2028 when you think about all that's happening on the data side and the power side.

Yeah. On our strong growth this year, which will be mid-teens, probably a point or two is pricing where we're actually managing through inflationary effects, where we're actually getting recovery across the portfolio. So pricing is really a cost recovery tool right now. The rest of it's around volume leverage on what we've done to make the portfolio healthy as well as our footprint healthy. So it's really good operating conversion.

But the other thing that I just want to highlight is we're investing significantly back into the business, especially to those areas that have really strong growth. We're adding engineering in our DDN business. We've added factories in our DDN business. We're adding capacity. So we're driving that earnings leverage to really good conversion on the volume while also making investments for the future to make sure we capitalize on that growth ahead of us. So I feel the levers, how the team's operating is very strong. Certainly our cash element, we have a very strong cash generation model. We've done some acquisitions as well as returning capital also helps the EPS line as well.

Totally. Yeah. So first off, our orders this year with our DDN business, which is where that is housed, is up 70%.