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ST Sensata Technologies Holding

Participants
Joshua Young VP, IR
Martha Sullivan CEO
Jeff Cote CEO-elect, President and COO
Paul Vasington CFO
Sameet Chatterjee JPMorgan
Amit Daryanani Evercore ISI
David Kelley Jefferies
Wamsi Mohan Bank of America Merrill Lynch
Dan Galves Wolfe Research
Joe Spak RBC Capital Markets
Shawn Harrison Longbow Research
Brian Johnson Barclays Capital
Christopher Glynn Oppenheimer
Deepa Raghavan Wells Fargo
Joe Giordano Cowen & Company
Steven Fox Cross Research
Mark Delaney Goldman Sachs
William Stein SunTrust Robinson Humphrey
Jim Suva Citi
Craig Hettenbach Morgan Stanley
Call transcript
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Operator

Good morning, and welcome to the Sensata Technologies Fourth Quarter and Full-year 2019 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. Please note this event is being recorded.

I would now like to turn the conference over to Joshua Young, Vice President of Investor Relations. ahead. go Please

Joshua Young

and you Andrew, earnings everybody. like I'd call. Thank Sensata's good fourth welcome to XXXX quarter to you, morning and conference full-year

Joining Operating Officer; Sensata's Paul Vasington, Martha CEO-elect, call Financial current and me Officer. Chief Cote, and Chief Jeff Sensata's Sullivan, and President Sensata's on today's CEO; are

downloaded earnings Relations of issued slide to earlier site. today's during In this presentation will can call. we Investor the conference addition PDF from today, release we The Web presentation be a Sensata's be referencing

We today's conclusion will webcast shortly of today's a replay post of after call. the

Before Harbor we number begin, I'd on like to reference Sensata's two. statement Safe slide

in The the such discussed regarding to, actual limited materially differ Factors conference future During as well of results subsequent call, statements. statements the are or cause as make XX-Q XX-K, uncertainties. that financial those but performance include, such and forward-looking projections involve this company's other from filings. described differences of not in events that the may Forms our we course might SEC company will and risks

segment business. in our the to evaluate on to income are and we of today's The management of three, webcast uses subsequent our included slide to addition results XXXX. full-year XX, to of operating release the non-GAAP and GAAP statements earnings presentation. to its Sensata's presentation. financial GAAP encourage show call Reconciliations provides you today's will Most in On be measures measures. financial measures for We review that in during GAAP information our the slides we will non-GAAP our number are primary which company discuss financial the XX related details

past quarter transformation cover After and a detail and on of today's for on brief guidance for progress comments seven review quarter then business our Jeff our summary, XXXX, Sensata's first full-year for begin will more growth over and will the outlook provide and overall our provide with megatrends. will XXXX, including and key financials years. and full-year fourth call which, XXXX. Paul discussion the Martha the

We your after will prepared our then questions take remarks.

the like Now, turn Sensata's to CEO, I'd Sullivan. over call Martha to

Martha Sullivan

and management of sure do at Cote to our succession Jeff as On joining By I read planned Sensata. the of I for call X, on well-planned and press morning. many so. officially CEO our am that now, XX, release a Thank everyone on transition thanks process you I of us pass to delighted March to process, detailing you, part am baton Joshua, the over this January will

as our board past strategy CEO, a laid over I remain the I have out company advisor will investors be retiring strategic While and several years. the the as will member for as we executes

have As closely together you know, years worked Jeff and arrival XX since ago. Sensata at I his

company-wide developing the to global megatrends seven full rest December this position. Jeff he first P&L we for as effort, our to at of operational industry our significant preparation closely with advantage take moves strategy Key collaborated at Investor that unveiled effort has growth. future is CEO past our team in the have business This which the all Sensata Jeff provides deliver the leadership into of and wave the our of had next operations responsibility. Day Sensata. to including of industry in position for and team excellent along leveraging Sensata he our and growth transform leadership XXXX, leading the years, and Over responsibilities, to segments executing with I

return and confident my and accomplishments team the future. XXXX, on my progress and strong I that our CEO, build leadership I value. of Sensata's excitement achievement, the wanted share past Jeff we conclude we shareholder tenure as to am our as and I Sensata's some convey will perspective close So, on to and rest create for

sensor-rich One is differentiating us features address their world, Sensata develop customers who rely of mission-critical with longstanding on that around to need. the and we the evolving build have solutions that relationships of both current

and and with engineering us enable combined innovation strength end to relationships market. Our our outgrow our capabilities

built highly our efficient These chain will our important sensing have a global differentiated are margin, have we industry-leading solutions our network. constantly as go element We manufacturing and optimizing supply for and also customers reduced strategy of and forward. remain pillars of and strategy

our the exposure. shareholders effective greater have added and to completed have seven greater acquisitions, of and capital XX the that company new created value past an we have deployment implemented flexibility our optionality. while strong are years, capabilities, Over We strategy has led diversification return, providing which market generating for end

position expanded to exposure continue aerospace and continue opportunities approximately executing over from our industry have decline and XX% industrial, focus growth the -- reduced today, and will in will to on to Our market to XX% this decline. automotive HVOR,

greater and business attractive and Our market. has capitalize a broader opportunities scale Sensing large Solutions fragmented portfolio in this to on

new electrification and important added sensing, integration & Connected portfolio These has foundation software, sensing Smart our voltage architecture. and strategy best-in-class subsystem and high our electrical along initiative. provided the with for capabilities in wireless M&A capabilities have Our

based addition, U.K. Sensata's our can the million completing In have M&A, repurchased between effort to growth our $XXX and our in you high we so and accelerate see since our of XXXX, expand approximately to Jeff aerospace future. have industrial, of investing back industries. us balance growth strengthening integral rest team are progress, Sensata in leadership shares. make enabling in further stock, to own auto and the [indiscernible] confident this in sheet, the HVOR, light and tradeoff in we been our In of business, why returns buying while to

management deployment combined while weak. performance, solid end operational have enabled markets decisions, been us financial have our with capital to disciplined Our deliver

$X.X our as tenure end $X.X nearly while my base. from During revenue our we have markets CEO, outgrowing meaningfully and our doubling grown employee billion billion, to

approximately X%. on helped of cost CAGR our us to ability capture to cost year Additionally, our seven M&A a and EPS focus generate efficiency synergies

even company. Jeff leader their the for perfect lay of the creation for deliver proud opportunities value our customers, strong team employees. and is our shareholders, more am our that I'm about to While ahead achievements, our the I and excited

not especially excited the far team, in could future. I'm strong a over about tremendous advisor high and leadership grateful testament be I comprise as I to team, the who and to innovation support the an is thus today, more the provide confidence member, as entire and support look deeply and progress move to we years. Our a commitment forward for have and board continuing forward. their Sensata around caliber

appreciate long-term you over have and be Many shares years. vision your our stewards capital. strategy, your and the want our conviction constructive provided also Sensata. shareholders I in for to responsible you to for the have years, feedback support trust me in of us owned than me five of I and thank of your your our more

Jeff? now key to performance the XXXX. priorities recent for over and our like I'd to call Jeff turn about our speak depth to more in

Jeff Cote

for and Thank where strategy, to you, a Martha. success. customers. our further high on develop we growth is which Martha individuals to in value our our forward diversifying named hard-to-do legacy opportunities and group our during I to I'm this that very as investing business, create of and of applications, on capitalizing develop megatrends, to for mission-critical, look growth, will sensor-rich It to time profitability, continuing solutions focus CEO be lead exciting our an continue of worked the such have next and talented closely honor thrilled Sensata, I company.

very million, the end Now automotive also I these quarter, significantly range. $XXX.X fourth particularly turn XXXX. which reported key end X,XXX outgrow our the our in market of was let quarter. basis heavy environment of We our four, faced market organic in posting headwinds, which revenues XX% at of our off-road. decline We me continue in vehicle range. in of XXX to of fourth difficult my in highlights but delivered high-end the points off-road of we of earnings the guidance market the the $X.XX, in our exceeded declined fourth Despite points some We per and which adjusted On end share revenue a an high-end performance markets quarter. attention guidance quarter vehicle heavy outgrowth basis to X.X%, market, of slide list the of represented

XX% was primarily generated by in as the This was driven our secular X of quarter. our growth performance One the customers regulations. which of outgrowth fourth market growth key China overall strong drivers revenue organic with prepared China, comply to

cash of margins represents operating incremental flow growth net $XXX in adjusted quarter, a generated which the our which line in of XXX%. with our and in exceeded million generated the We in income, was quarter, free and guidance, XX.X% in megatrend initiatives. We adjusted rate conversion fourth investments includes our made

which we're Smart I excited making in later important we megatrends for in & future and electrification describe Connected presentation. to initiatives, the make Finally, more growth, about in investments our this in progress detail continue will and are long-term

begin revenue organic our aerospace, market or growth in by I the Slide and performance fourth will end with shows other markets. five end industrial quarter.

For the growth quarter this X.X% XXXX, fourth posted in of we business. organic

fourth had strong performance. growth Our of solid aerospace a business and a strong end quarter, content market, posting continued revenue a as double-digit particularly result aftermarket organic growth

in but improved continues China on business significantly industrial Our to a decline, sequential basis.

from inventory better our market are quarter channel performance benefited dynamics. reductions fourth modestly pressuring While results,

shared posted X% line the expectations quarter XXX was was in business points in the in organic end of October. basis fourth revenue X.X% an you market the with Our the than of This decline quarter. decline automotive we better global and in with

generated double-digit organic revenue as in automotive growth a end strong X%. our of we During business market content growth the quarter, result and gains, fourth China of

of specific in remains fourth by region. strong to and automotive American as performance continue in the strike, North softer primarily quarter resulted Europe, general to result market content market end market exports which in end volatile Our China to affected though Turkey. by business even saw decline a affected U.K. and decline, we adversely this due growth a the be weakness In its a GM meaningful

during vehicle of organic versus XXXX which off-road end XX.X% heavy the posted points decline an represented business outgrowth decline basis quarter. Our of market a revenue fourth X.X%

of which spot China by The XX% double-digit content The end which business, bright for market our post of European the truck. largest end the strong America remains was regulations. performance, implementation in continues healthy as for truck to was a followed end construction X China on-road as quarter the result down this market prepare OEMs growth and on-road North for from both declines especially decline market business

versus markets. At made outgrowth years. show we six, to significantly over Investor the outgrow our two we past a our XXXX, commitment market end Day slide in On end

of stated in would range be points. XXX outgrowth automotive vehicle heavy in be off-road points. basis business in our range to would the we Specifically, of XXX the XXX to basis business XXX our our And

are set. we to targets of of report two After the I'm operating years that execution, right we pleased the middle in

we declines offset during XXX of the our basis performance, has vehicle business into outgrowth two-year off-road XXX to end automotive performance average content operated of over an our generated Unfortunately, visibility that Our by points heavy speaks This outgrowth our have market while has in that business end average period. points, at strong markets. unanticipated our volatility. even been periods outgrowth of basis

XXXX, seen to since that example, the expectations For heavy automotive, X.X% of flat, in year. compared per off-road grow decline market would since average have markets to contrast end be X.X% X% in our we per grew in that vehicle our would our on expectations market end year market XXXX that

our of as million opportunities expectations I a In XXXX have an and We a pushed we new want ability and slide platforms. as in acceleration decisions is message pipeline of to XXXX, The some business you business than from sustain a consistent new support new $XXX XXXX expect key beyond. delayed which our on to this of out and take outcome. capture nearly growth we that is lower wins, would wins we away to closed confidence number our of these in have that we into level that strong customers

we're last some related progress Connected. areas to activities Smart slide as in as quarter's initiatives, megatrend in well our making & our XXXX. to our in our described I plans share investment on call, seven, Moving want accelerate updates our these to to I about

managers. some We testing with world's proof-of-concepts fleet are the of leading currently

currently working beliefs. is our trucks environments, in real-world solution and capturing customer's trailers and data in is Our on

sensing a demonstrated pressure tire value Our application clear and has compelling proposition.

be and fleet managers before trailers their eliminate safer trucks helping downtime, is helping identify, the hit reduce in fleet are fleets. operating We to in which and well costs, ready them road. not create driving their they driven conditions are This

year. We efforts. Due additional announce support business and increase progress fleet and initiative, wins this and we in OEMs XXXX both with expect plan our to be our to to investment about our this connected later able managers in to smart to excitement

we our of capabilities continue will trend. Further, electrified in on that to an for allow solutions have to us we large combustion add a continue front, to that be electrification the environment. On confidence to capitalize served portion to continue electrification the engines required this market

we offering expand For instance, with we're establishing a ago, And year into the ourselves more levels. GIGAVAC quickly most high to standard voltage with vehicles, little the applications particularly high electrified challenging than as acquired a contactors. our for electrification current premium

has thermal Sensata Also, to is in solution position wins runaway greater were safety had leadership the infrastructure develop have we in year. fast growing the issues Additionally, a we segment, a DC batteries, and with associated XX% which in the that first a Smart in related Sensor this charging risk of addresses than industry to company XXXX. several

full battery active business and leadership management applications. are R&D share We in pursue growth. and continue various we our extend this an have motor and investment And to applications we precision pipeline hybrid And in electrification increasing vehicles. new thermal both to electric our market

portion of trends eventually that serve. end our business markets of serve all significant we in A will wins new our electrification

smart So itself we connected, and important help both excited differentiate and initiatives Sensata to our customers about company for believe in with for far lead and and to progress long-term efforts advantages will continue and our these are that thus very some shareholders. our our electrification,

slide On summarize which key we have some discussed. we messages, eight,

for to market and We promise market are on volatility. growth our delivering our despite

disciplined are we will our add flow, for portfolio accelerating are cash given We solid say, investments to M&A. we the free strengthen growth our opportunities through we continue and generating value

to to our quarter review fourth like Paul quarter the first also guidance more results XXXX and Paul. call to now I in and and full-year over for to XXXX. provide would full-year the detail turn

Paul Vasington

XX net Changes organic decrease result on acquisition of currency decline highlights in a of The $XXX.X Jeff. of X.X%. revenue slide revenues quarter, revenues quarter. by Thank foreign decrease increased a you, X.X% quarter Key was fourth XXXX. for point million X.X% fourth the The shown from the as quarter of GIGAVAC in include by the X%. revenue

higher quarter effort Adjusted in was win and million X.X% to operating to decline organic compared megatrend million, $XXX.X XXXX in primarily Adjusted factors product revenues, year compared quarter, the quarter, a design, of headwinds, somewhat quarter. to a incentive net EPS partially driven development taken by a of this decrease better year. offset compensation. increasing and business Adjusted X.X% income fourth support productivity was saving and $XXX.X fourth XX.X% launches, prior These due quarter. were repositioning the income new decrease a $X.XX a by decrease quarter, a growth the action initiatives compared of prior was the of in to to new the

of for quarter of foreign the GIGAVAC impact reflecting fourth of million like same acquisition I revenues on fourth positive decrease $XXX.X X.X%. X of impact with Performance quarter, from reported I'd occurred our on the to comment a start Performance negative Sensing a X% currency the segments Sensing performance business to slide of on Now quarter XXXX. of in XX. X.X% the in a last of the will year,

Performance decline the quarter. X.X% to revenue prior Sensing organic these factors compared Excluding

revenue in XXX the Our reported the organic X.X% end basis an decline of market fourth automotive XXXX, quarter but business points. of by outpaced

revenue China by million, Organic in our expected. GM in less organic by quarter than America which growth North offset revenue revenues Europe. and $XX North America strike was in was reduced decline approximately fourth The

business single-digit the growth auto American content GM strike, in North delivered Excluding driven quarter by our high the organic revenue growth.

the our X,XXX strong in primarily outpacing quarter, about on-road truck growth Our XX% HVOR a due of organic basis far points, to business X.X% content China in business. by decline market in reported decline -- revenue in fourth

growth wins declining operating fourth of quarter income and $XXX.X in development of to compared by million, partly basis business organic revenue product the was of operating Productivity percent The new income as offset launches, megatrend from somewhat year initiatives, decline X% in as due to actions. a in the was restructuring design a increasing and a due XX.X% decline segment to prior effort primarily support was quarter, operating new Sensing headwinds to the income savings greater decrease Performance points. revenue. XXX and

increase Solutions million a to reported and of the X.X% double-digit slide than of Sensing fourth a the the on compared of revenue of revenues albeit business, X.X%, on market result of Organic which shown content negative previously on significant acquisition of impact as organic an in quarter, prior impact by GIGAVAC anticipated. offset increase a in excludes X%. was industrial our XX, partially a end X.X% currency declines, aerospace This foreign healthy shorter $XXX.X quarter. by As increased growth positive driven market less in

of fourth productivity was operating headwind, X.X% was the prior GIGAVAC. from of Sensing decline quarter, by offset due slight and decrease quarter. in currency income and acquisition Solutions in operating the to repositioning a income million actions savings $XX.X primarily somewhat the from The foreign

not Corporate in income and million operating in other segment quarter. included costs were $XX.X the fourth

our back added to from in quarter XXXX, administrative the due fourth approximately $XX.X were fourth of and million of to higher million up XXXX, the and other charges $X results, Excluding costs quarter compensation non-GAAP corporate costs. variable primarily

to variable by shows profit new increasing results. unstable quarter Adjusted partially points margins XX.X%. The XX declined product related in margin higher productivity were to organic offset XXXX declined compensation, fourth revenue, and repositioning of decline actions. to gross profit launches, foreign and non-GAAP $XXX primarily and X.X% gross acquisition due headwinds year-over-year XXX Sensata's million Slide GIGAVAC gross and currency, savings to declining somewhat basis from

increasing design cost increased in business the development to of costs and GIGAVAC. Support effort. SG&A new were X% acquisition R&D primarily investment due megatrend. X.X% to and wins

are structure cost to the as were align the the cost lower flat of SG&A GIGAVAC, with quarter we our revenues impact experiencing. we Excluding prior

down year quarter. prior result, income the was adjusted to X.X%, a operating As compared

tax adjusted flat, percent the year. profit rate before roughly shown to the compared tax was on as slide Our prior of a

down decline adjusted as of repurchases. Finally EPS or compared to shared a quarter the offset partially the by XXXX in as operating was $X.XX benefit fourth X.X% was income of

primarily Sensata's parts currency variable to in declined XX gross profit Slide gross billion, launches, shows revenues, by points X.X% margins decline divestitures from net lower due and headwinds in full-year results. impact The costs. to product the organic the XXX offset basis stable gross acquisitions increasingly foreign declined compensation in and and XXXX profit Adjusted margin related year-over-year to to non-GAAP partially $X.X productivity were XX%. decline

or up design R&D selling million initiatives of increases currency lower costs repositioning currency. megatrend mostly new favorable costs savings X.X% $XXX.X $XXX.X year-over-year support variable and actions. impact win and by compensation foreign and growth business were cost efforts million were to lower X.X% development in were as SG&A foreign offset primarily or year-over-year, favorable to due costs from the

operating result, a prior income the year. adjusted to X.X%, As compared was down

rate with a percent on tax year-over-year adjusted before profit up slide was the line points our X.X% XX as Our of to in guidance. shown basis tax

$X.XX exceeded repurchases. EPS or and offset adjusted in free within XX.X% X.X October, Finally, target as was during was Free last flow net cash year X.X decline the X.X the times year income, or as share of XXXX operating down our provided compared flow by guidance a end adjusted income at benefit a cash times. range net to of to $XXX.X the of of X.X%, at the mostly leverage million was

predict lifted, be end market operational and business difficult government slide related it's best imposed ultimate highly recent quarantines end estimate coronavirus On to XXXX, will quickly first guides fully outbreak, demand. impact our be will on restrictions the show includes to of will and our our I the impact travel the plans which changing for XX, Furthermore, is when quarter when of which financial when very the uncertain.

a the profit revenue loss to and That million the million first a event. revenue sudden well reflects and impact, related we profit impact. operating said $XX operating both for and 'XX million drop negative $XX full-year quarter The underutilized normal $XX estimate as stranded costs the unexpected

monitor everything our serve closely employees we possible protect to We our continue and situation doing to and customers. are the

our the between For and the million revenue year-over-year between by $XXX million. guidance, revenues foreign reported X%. our midpoint At we expect of revenues reported a XXXX, currency we will and $X X% million representing approximately first quarter expect decrease of client $XXX

quarter. Excluding foreign the inorganic impact in revenue of of first for to X% we expected currency, the decline X%

approximately revenue demand. sites normal current for in the rate quarter, guidance of first XX% is production reflects China, the Our than manufacturing and of customer flow lower and our midpoint reduced

million report $XXX between expect operating adjusted and We income million $XXX to XXX.

XX%. bottom On decline $XX and adjusted between we million reported of a expect line, which $XXX income to represent the would million, net XX%

to restructuring report midpoint. foreign between we a expect negative implemented XX XXXX, and guidance which actions We to volumes EPS costs Throughout $X.XX better we from to currency our impact experiencing. includes align significant at adjusted $X.XX, are lower

approximately the our million plant announced closing we action further $X optimize and to Northern in recently, annualized Carrickfergus result Ireland footprint. of network our More This manufacturing will savings. in

XXXX to We million fully down this closure. approximately expect and early restructuring this in manufacturing to complete expect XXXX, in plant incur $XX to in be shut costs

Looking forward, R&D expanding Northern Ireland will center remain an Sensata. for important

our for Now, full-year let on to shown XXXX slide me guidance turn XX.

range between For XXXX representing $X.X revenue a full-year billion, billion between in X% decline growth. $X.X X% expect a and we

foreign to million. revenues expect by currency approximately $XX We decrease

currency foreign revenue organic gains between X% a a represents decline growth. X% range Excluding or and

million, range income million We expect decline. adjusting between a $XXX which and between X% would represent and average X% $XXX

$XXX decline between the adjusted X% line, million million, which full-year between and and income the X%. per represents On share expect $X.XX earnings bottom the growth XXXX, $XXX $X.XX to adjusted for of net of we and

currency $X.XX on We a EPS impact expect have negative foreign will XXXX. in

$X.XX, with to reflects which strong EPS occurring overall our growth decline, the revenue Our prepared first we the and end China, that major earlier market in expect all will comments. XXXX quarter. as noted in performance of Currently, uncertainty to growth case our the out reduce of in our EPS in continued significant coronavirus the effects by continued markets,

we smart productivity our most initiatives business actions to connected. growth areas them as as our expand efforts strengthen and our in to core opportunities, electrification the With repositioning and gains fund will that ongoing promising be of megatrend expect said, well for of intersect further net new savings

rate over adjusted XXX and XXXX, increase for that of points X.X% by tax will expect range being adjusted profit tax. a basis We approximately before our

flow million expect guidance expenditures We This $XXX approximately generate million the to $XXX free approximate to million. free $XXX of cash XXXX. for annual $XXX to capital assumes of full-year flow million cash

Since critical accelerating shared a objectives, that year as At we growth our creating capital. financial investors Day a in then, with have three content such we Investor in achieved period over of XXXX, greater number flexibility deploying plan. and

we However, current guidance, the earning flow short our targets. in our with of fall XXXX expect revenue cash

growth significantly First, our have over markets the originally end below result our assumptions embedded than three-year will in weakness year expected. three the revenue weakened in market million projections. This less market end $XXX period nearly

Second, very lower than we critical lower and is contributors but volume main GIGAVAC, in expected fast mostly productivity growth These very business are for targets. small, to a growing slow divested profitable, business a electrification which factors to your in growing two with non-strategic gains, platform. valves, work combined to but expected our the our due shortfall purchased to

XXXX, most in of all end regarding major which markets XX, expectations our perform. continue our slide On to

improvement But in and we from environment We a expect less XXXX to markets HVOR the end our in somewhat expect market global another market. modest difficult weaker offset end due headwind XXXX. markets, a auto industrial end in by overall, of

call Now to to over like back the I'd turn Joshua.

Joshua Young

please the you. Andrew, roster. Thank assemble Q&A

Operator

go first Chatterjee comes question of from Instructions] [Operator Please ahead. The JPMorgan. Sameet

Sameet Chatterjee

my taking for Thanks question. morning. good Hi,

you in the with towards mix towards? guiding looks China similar vehicle help gains and to change both the wanted even can higher, content to of will if congratulations in Martha content content XXXX? are related the on the levels that how XXXX, one think be I just me you're Jeff. off XXXX gains the the with X drivers about content like to I gains modestly you about you side, start heavy and Before Regulation of investing to of then the or gain in thinking It megatrends are to start,

Jeff Cote

Great question, a opportunities, business. our the the look at of we tend very to of nature long period NBO our time, look gains at content given long much like so, we cycle Yes. over

so, we so, on average in about points, that experienced range, content XXX basis that prepared years, in gains HVOR automotive in midpoint have mentioned to would about couple the in our XXXX last similar comments, an beyond XXX-XXX and and expect and we As over of XXX. XXX we that's

our In also, are the regulatory seeing trend have megatrend-related we of time in terms and opportunities more third the was seven in will that will into their customers are customers period megatrend-related of around and seeing the of over past growth, very the and objectives. seeing activity three, years, similar activity, NBO the of achieve of of in impact megatrends shift related a content our to we so, we helping all XXXX see eventually to long opportunities so, much five, that we content requirements aiming of that about been turn terms the world, to in business toward our achieve

Sameet Chatterjee

X% in the some That's now China automotive production XQ given Got down more so it, guide the XXXX. of clarify that's helpful. you is to that is assuming I'm that related a And impact, if I can just third-party impact are being part one flat, more there. forecast which thing, big to events

think you production, in Sensata automotive average me XQ content is per me and help can are you China the for how -- what just about can remind China about of you if if that right how thinking he vehicle So, now? much

Jeff Cote

Sure.

it. forecast of So, in yes, expectation China, a little fluid to component the a on a for there decline providing related terms very color of more large the big think in decline impact very of situation, I that quarter, that back the although but portion X% virus; come our of slight to will is first the is to is the in bit we related

So, that's the trend that we see there.

Operator

Please ahead. next go of Daryanani question from Amit The Evercore. comes

Amit Daryanani

best role. the Jeff Connected on to are show these there in those or to up is investments [ph] my do start to revenues you, growth [Indiscernible] pleasure think and with been your the dollar investments? taking that terms questions. [making] P&L initiatives electrification, & congrats been you off, way you working of how think and Yes, have Thanks from guys much Smart a start Martha, for the from maybe about, accrue, I when and will luck about XXXX it's for guess, talking a new two on initiatives,

Paul Vasington

Yes.

investment So 'XX, about 'XX a incremental when to is you $XX there compare & Connected. million Smart in

incremental within Some associated there of $XX reallocation million XXXX, investment, to opportunities that as $XX spend well. that's million is R&D reallocation is but but some other baked net with into growth

So, we there our associated year-over-year, million -- investments is investments shifting long-term on with $XX time been that. and about growth spend our megatrend, have to incremental a over

will we see terms see in we start impact when So, of to some impact, already.

but of that revenue large our well. future portion So as apply areas, we the I XXXX, will megatrend-related a today the have to in the it's in experiencing revenue note are important some we that think also

completely So, from forward shift as another. implemented a we it's will more those not that in platform to continue of one even have end product broadly going are the role our categories megatrends elements get markets that to There serve. a

Amit Daryanani

ship terms million beyond meet impact your little I and on just If more it. am bit issue in what the it's a on can supply products heard that just point, you guys an chain have, concerns, having hoping $XX see I your health ability demand Got trends you do of just on to the which could you QX, $XX in revenue, numbers in follow-up I is with income China, impact China? to million a this globally in talk at being operating

Jeff Cote

I the appreciate Yes. comment.

more and what Let me context we virus with the are bit seeing. a little provide associated

and also China. two China, a in Engineering that knows based have have I So, think we Center based manufacturing business plants everyone we in

the upon firsthand we're that our everything So that that recurs, sure examining the ground, our customers sure that we in the on ready make and as to constant can -- having Based we're we're supply. of our we're the complying put possibly we chain chain in serve as supply dialog suppliers up regarding place. [ph] with as we and both we're this local to need respond make have governments to can have we our to inventory going we're we sure have, with we have to make getting [continuity] and sure levels the estimate. well supply doing we make in those, the that's protect how our sure make that and speaking to customers, also suppliers they people, our deep with came doing that more to what's We're are information with what that with mandates

we're that, our very is all chain, it's the that has and day to watching fluid it it impact day unfolds, active on and an dialog. overall also how but said situation, a demand supply Having

point because Our holidays. drop through revenue profit than government implemented million best that of would extend is at the expect, more estimate this is the $XX the is way you quarantines profit, to million significant the the of $XX largely and

given to portion So, employees, which pay is we'll in, there the to for closely. the very and thing color the and during do our right have, to time of was continue we continue the that's that an more to obligation that also that situation them, some so, they're situation monitor

Operator

of comes Please David question Jefferies. next Kelley from go The ahead.

David Kelley

morning, and I'd and convey my congrats as Hey, good to Martha also like to well. Jeff

mostly end impacts, you automotive, I market well? Just color as that the guess, is some where flow-through see think and actual commentary, it individual we do could coronavirus you provide on following-up the about else should how on

Paul Vasington

Yes, have in we pretty China terms the a widespread markets obviously end business, all pretty, impact of so and in automotive, outside across it's that of of broader serve. we those

we're So, and same candidly of industrial, markets, that of end across region about about because QX, the on this, going impacted X.X% the represents watch think those decline be we've which will each recovery the we'll pretty will when all HVOR, revenue serve in on a rebound we markets in will that outcome to, I in are $XX automotive, of think across we million that have loss, when side but our a the not end in that million different because side, we overall guided see customers $XX question impact it's of this forward, in recovery update the decline a be the there data closely you you interesting might consistent The that market of more way. on. expecting

Martha Sullivan

auto if about One in at to end China two-thirds here in impact you or our other business of markets. aligned those exposure truck-related, is of our and comment, roughly the just, our in look is exposures XX% China,

David Kelley

how with you, you heard others timing are you from through customers production, the about guess and a thinking, this headlines around and in trying timeframe, million, this I is to sort and some of take your know, hard or and to line more is pinpoint at again, cautious very that to Thank certainly follow-up, a fluid returning and we've recognizing great. Okay, $XX approach, that of mid-February how your flows seen you're thinking situation the a point?

Paul Vasington

Yes.

that we So, really facts circumstances-specific. It's to in plants, understand I way hard in speak very a how chain manufacturing would to sign can In different specifics restart impact we've the given it's see. different of a provinces. both others the clear government is our to supply and been quarantines lifting because that across the production.

on a so, area, of then that challenge but when plant asked not that with province, might period, Monday, the in outside asked virus for to our Ying, day. some outside to instances there be our also the the of to there rest virus when instance is us China through in they a we Wao an the of postpone area, area need where if government the the Now, are are was our quarantine and put instance, that there of indications in restarted in instances of location, and in from workers plant, go a in that the halt, we come the

plan full to end to get back our the of So, close by to production the XXth. is

here. monitor bit again closely So of to and situation will that very a gives us little the leeway, continue

Operator

ahead. from Bank comes next Lynch. Merrill of America question go The Please Wamsi of Mohan

Wamsi Mohan

you're Can flat you. impact still at you roughly well. address coronavirus, from $XX out sub-seasonal the thank the that maybe and Martha Congrats million versus Yes, you guiding somewhat XQ to as fact up. Jeff if take

obviously after on rate of there through you the the projections forward from course across we think and think let's or seasonality you the how starting So, to as you as should how the full that some driving XXth if level? we that can you're you XQ get about talk about should of production, sequential say factors go year the back so, the are about Jeff, said,

Paul Vasington

end the the course Wamsi, Hey, kicks quarter. accelerate would that, our year, and QX it's Paul. always lot It's of initiatives mean A a productivity first couple of know, the of be as over is the of at lowest new comments, you the year. what margin our in pricing I

still still trend So million, somewhat we're even this we exclude normal that is normal, down. see a but if year, every $XX

of So we're the bit little leverage. lower terms still struggling with productivity a in volume and operating

compensation. expenses to have We around some timing related

quarter. productivity over So, will course all improve. in continue of think grow year consistent what to you see with solid I past, all, a in our to the the It's it's

it's trends what historically. been patterns our and similar think I So to have

Wamsi Mohan

how cash we And Paul. flow what you for how impact XXXX Thanks, is have might the can talk about XXXX? in I expectation much just also you in expect thinking about and restructuring, address through flow maybe you're restructuring cash but your free can that should missed

Paul Vasington

share less we million higher given in to profit happy slightly share of we of million levels somewhat saw million versus range $XXX in $XXX of Restructuring level in CapEx payments what $XXX year, lower so got this with midpoint it's that, with line. largely delivered we We're be a line XXXX. a than XXXX with million, XXXX, is which $XXX will in to is

this one-time don't does next that expenditures that year. a year we some repeat bit, help So, had and

operating generating. I line, in level consistent we're it's the with profits that think So of

Operator

Galves Research. from Dan [Operator Instructions] Wolfe comes question of The go next Please ahead.

Dan Galves

Thanks my taking good question. Hey, for morning.

terms aren't partially automotive you due the having the that to optimized some business? have late is last content environment year this not sense of batch In that current EV the the of supply are EVs launching grade our chain. of in Is optimized of EVs year as and kind terms is from opportunity, sourcing pipeline that the currently Do your kind very of parts new of launching of now impression fully on well? what

Jeff Cote

on you launched that supply that as I of agree ironed would evolving give is think we the that as would typically and chain more the roadmaps on were that accurate. the And mentioned the what I yes, chain with vary vehicles challenges what I really new the and we market look product standards. it today. they the than bringing served manufacturing in that their that largely content example do terms are and quality will supply product they R&D architecture automotive and acquisition the we're the you use have like, GIGAVAC in primarily is sometimes So, upon yes, out experience face then they yes, customers you had industrial that levels, that to good pulling being technology, The based vehicle suppliers

what absolutely say your experiencing. I we're are with accurate think and observations consistent I So would we're

Dan Galves

related of this And $X.XX Thanks. non-recur that happening benefited more is year some top to just that that's the of the one it. line that negative hedging FX that impact is got housekeeping the a or XXXX? Okay, of of impact

Jeff Cote

It hedges with has to do off. that of are the some coming

the be XX Our hedging Peso about currencies, we same, program the Pound. had the months, to could we is consistent on about which XX% XX had hedged major and the Euro, the

we've reflection spot end a December, rates what have. that and of were so and the the where it's And hedged we at exposure of

Operator

RBC Capital Markets. Joe The question go from of comes Spak next Please ahead.

Joe Spak

some Thank about you. Good HVOR. the little to of on morning. comments I talk a bit wanted

be some I that out programs potential pushed think, bit. the again, a could you little mentioned

guiding does outperformance. further in the of you're programs? does the from push of than sort Even of, segment at better really last sort does mentioned the think as cadence a a bit with our became dovetail that that it impact and perspective virus growth, quarter quarter, with some outperformance expected, impact that some that not the about and can that I guess organic out well. though to, virus growth the how XXX basis this be all you performance like out also I little looks of I the guess, potential potential points but

Jeff Cote

Yes.

we broadly architecture talked the and fact customers pushed to we've business, HVOR XXXX out they're readiness partly market some our launches due end to although the at of some of within the the quarter circumstances, more content on see that terms two quite that landed on we over the about also during nicely. quite due we day, partly systems by So, also of last saw but And landed the in we and nicely HVOR, implementing. years, lumpiness

have readiness on overall growth. content customer impacts And supplier readiness, to launch so, although market platforms quarter-to-quarter circumstances, other could

content growth. long-term the in confidence high very have to continue We

expect the that launches. impact think a when of terms have but that customers we there's impact. In demand, content virus clearly, lasting new and it's broader a demand impact, of in It's product there's a lower about don't how lower would terms

Joe Spak

appreciate then, sort of just And impact China. I comments within your and Okay. the migration

I I could guess, startup still to and any this, like bit as employees been you're to reported. potential Are but some hesitancy you new come little up hiring? as of some maybe to early you're disruption too or under of there back starting be you as for think do back. come ramp workers have a little a a might that's for to see bit it's noticing starting also

Jeff Cote

providing are flat forth. No, to things testing temperatures, precautions the so on necessary surfaces have back come and other doing we're associated feel that mass that taking to comfortable we employee to on they at our a sure environment. activities desire wiping a work with of part make we to logistics associated Obviously, other the to them gather with with situation, to staff and plants that the eat make where working doctors we're down monitoring sure and these variety make

come working feel environment they with the back to to. make comfortable our doing that employees everything back, sure that So coming they're we're as

Operator

of next go question comes Harrison Longbow from Research. ahead. Please Shawn The

Shawn Harrison

Hi, good morning.

to a up regions the localized seeing not auto region, for able is Europe of Just potential the get the to and of first-half the either potentially risk either following automotive any into China topic, virus most or you I integrator you being of but on the chain to or in know kind year? are quarter of maybe other demand OEM the product supplier, that first the another and supply themselves, impacting

Jeff Cote

-- minimize we is to the would also we've in that Europe North not in that have others impact right, we we on have to that supply there chain, our absolutely monitoring. any could sub is the suppliers impact million right as do that the that over worked years, complex sure potential company we impact you're quoted mention as and America, make customers an have now. regionalized chain, but are deeper impact, very manufacturing a examine and supply $XX and we've last it specific to that that the I see region So China several we're that a

our the and feel impact any as don't more question view, we'll incremental now. chain broadly, The very one, to well supply good closely. right continue of that up there's again a which in suppliers we're that seeing But monitor terms is, is bringing you're In impact. not though other we that it

Shawn Harrison

two it follow-up, saw bit? that, out years. Jeff, the then, you in terms maybe the mentioned the again relative wins What I And were push doesn't as average the of and that And program past to average, brief in maybe you think confidence Okay. down over million XXX gives XXXX? XXXX in that pushed get some little accelerates you a it

Jeff Cote

so things. Yes, two

The $XXX first would at million. be last if it's years, you look five average over when the the new business

to cycle and terms might see pipeline. and think choose customers the the opportunities individual in what timing business long that it's wins of a items, long-term to amounts when average, I is but new meaningful also we of higher although should just number the more in So watch, due given launch of we years,

NBO that award things in in did we give those of see higher personal the sure we we beginning XXXX, look understand will replaces and pipeline, the make XXXX. in with So we all have comfort the what when decision-making of of a they and that bigger opportunities where versus are us process, now XXXX to at nothing it's we had their fact we contact in pipeline that customers a the in

Operator

next Brian comes Johnson ahead. question Please of go The from Barclays.

Brian Johnson

you. Thank

margin Just XXXX. about guide want for to the bit a talk

the slightly us margin? growing impact, flattish looks puts top directionally give kind takes around A Can and is If that puts out on but the margins. and takes some of right the B like you the of and strip virus kind line you color

Paul Vasington

a million, earnings we're $XX you level. in at and organic if Sure, back growth out were profit the operating X%-X.X% grow similar a

net in P&L. productivity core are investment And have we So from the mentioned, a things gains costs, Those somewhat funded actions to the there, we productivity look growth. continued increase investing we the long-term that two Jeff Those gains, compensation repositioning as what's at we significant in offsetting. then, being around megatrend. But took. were business benefit continue in by happening for sustainable

little back we net about the it's growth a is on organic net headwind flat growth in about of It's a revenue $X.XX. bit basis. and earnings. with So like out line virus an noted you impact, Currency earnings

Brian Johnson

Okay.

So, any those margin expansion not really with puts takes? and

Paul Vasington

about back down No, margin. to when and flattish out you -- just slightly operating

Brian Johnson

to Jeff, strategic seeing like miss in you Martha look I've Florida We'll you of those we but got bunch questions. congrats. get will forward

cut? but, just track quick so, give of I $X.X quarter, this production in we production China virus a hate sort of and can in virus to your fives Just about the us you in the week every embedded can or just feeding with sense expected at assumption five, mid so million want keep

Jeff Cote

Yes.

we of to there's XXX,XXX believe production. units about XXX,XXX week per So

So, that three, we're it call fact given three down the weeks.

to You estimate. is, million that it translate roundly math X.X can -- would units, be a

Brian Johnson

Okay.

the HVOR is there then incremental that. rather on industrial Just impact business, but after

Jeff Cote

Okay.

Operator

go of The next ahead. question comes from Christopher Glynn Oppenheimer. Please

Christopher Glynn

it's Good you. years. couple the HVOR, on about and of on the and more Network that, Martha transitions. a something or morning, that vehicle targets had two Thank middle Area on you'd topics this sustaining the Is down you've right I last at question to Jeff year improving congrats growth or the content on see your a been, out?

Paul Vasington

a So will we're on that an improve. be others market in caught have and interesting And that shorter think terms it's, periods pipeline. you might serving Yes, have to end NBO shorter would I it the the have aftermarket, different the it's periods of which right? segment, or goal part have is

you some markets So us you the opportunity ASPs pursuing. that and you very our when growth naturally investments, be know, be content center will on of of think create things more incremental, company megatrend in of and addressable will larger would we're for are, large component, if terms as we have broadly, they're it these a that as the

Christopher Glynn

your being for business like business my is still for EV to is or instance? wins vehicle single in great Thanks a variations follow-up and pertained particular China particular this with new And is content off, any EVs primarily that. on China source as taking

Jeff Cote

the customers are our us how fact with on of those they to requires need The critical do hard engineering customers it so to sourcing we that strategies. them can for a selecting their applications to we about lot on need of mission is and when that the make dynamics terms effort them part in critically changes for important major our of and in their terms sure that thinking no suppliers. the focus associated deliver of Yes,

Operator

Raghavan The ahead. comes Deepa next Please question from go Wells of Fargo.

Deepa Raghavan

all. morning Good

Martha my Let congratulations echo me both and to Jeff. also questions A from couple me.

given between First QX? you organic one, Sensing Solutions the on how you guided about are Sensing organic that a that full-year and thinking positive Performance Solutions, in growth decline you Sensing exited splits

Jeff Cote

So, business look largely We automotive on will would the business HVOR essentially the you business was we're full-year, driven year, if it at guide Performance performance expect down our be market, the revenue. by to better be the our expecting Sensing for to than flat and slightly is be Sensing up. last

the of impact the virus virus improvement. some the obviously, So is year-over-year impact really terms that in from versus business aside HVOR of decline the

Paul Vasington

Yes.

So, aerospace Solutions content Sensing show me -- continues stronger growth that business to and Sensing Solutions -- let 'XX. strong really into give,

Deepa Raghavan

Performance that's Got organic gently… it, Sensing positive, Sensing the impacted is by is growth the why Solutions virus but and in

Jeff Cote

That's right.

Deepa Raghavan

how virus I from case is My from scenario? the lot mean, demand questions, is know to if about but be on side, the production may why why demand, were flip [ph], it. on follow-up your the do you there? you are getting that Yes, we is the what or of virus, the [recouped] got not factors I sorry some capacity lost think situated perspective, Just so curious that revenues think and a are a lost of this you're worst governing utilization come that, back.

Jeff Cote

Yes.

right. worst wouldn't case continued case it's that our worst is scenario say scenario. I there's disruption here, So The

in by So the experienced quickly could outcome, incentives government demand, things. this on can whether certainly driven great around snap in in bringing sentiment, I a incentives my very other is great may think right that depend and down Consumer option China in so be a in really and it's or the up the one. that the exist and terms of capacity to create does which other you're a it impact. an of that couple of that's implement change will back, may that road the of not government around the terms It's middle we've the past incremental it question view

are supply able up. us customers of We and that which the can to so capacity being make think sure running for to to them areas that a capacity capacity business catch within also always deeper but with chain and And way are with our we much we to full in incremental of terms there within we X% find so. close at deliver demand, can in or our pretty where like

And could but materializes impact, goal there demand if so, we it. be to our on be can deliver would make sure that minimal

Operator

ahead. The of Giordano Joe Cowen. from comes Please next question go

Joe Giordano

for question. guys, my taking Hey, thanks

players other given fourth the ahead about industrial quarter Just stocking timing of kind starting pull demand of New on Sensing have like China a that. forward of the Solutions, talked some Year into and in

as than it that industrials you see know thought Solutions Sensing -- that with anything said do did you has I better on did to wondering there? So you if

Jeff Cote

down the we peel of In be back to when believe market quarter fourth was what some have does the X%. - the it the about in the impact It impact you industrial business.

complicated We chain on a we supply the demand are a industrial the the into decline inventory ultimately improve expecting market which fair is side, it's yes, impacted That our takeout products. and and the combination for also XXXX. But saw amount our inventory channel takeout very inventory supply chain. fragmented in that of takeout, of to it's

customers. separate demand from that from So raw

that inventory more because of saw demand in reduction an we pure So of channel impact take out. XXXX, then

Joe Giordano

New referring that Year, talking guess - general some that a happened the so to I XXXX? of fourth of we're a from Yes, kind just there impact so head from little in was of a ahead outside I'm specifically, about like surge I of demand throughout was in all like, stocking destocking of a quarter China, bit positive

Jeff Cote

we the Yes, think businesses. would cycle that normal market be what I normally quarterly in mean, don't would I our anything than us. for that in of see trend I we that saw different think was terms

Joe Giordano

what on. going is that's Okay,

you Paul, on most tax Okay, about see the probably year. next a the perfect. that years? quicker little guess do guidance How is kind I then this know And bit rate like, than progression the XX ramp XXX. generally we just a talked over next of couple I year bits anticipated. and now, for

And quickly of that have an you we about? that increase next few? do should we kind like think kind over the endgame number see of should So how

Paul Vasington

So about around go talk back basis Investor for years, few to done XXXX Day, we've did we XX that. a than better - points year

different are mix the around where tax and profits those that's of in jurisdictions. So generated rates the the

we we are expired 'XX. naturally bit we're XXXX won't where So some to little a that in thought benefits going benefit be. ahead We've tax of that had

period year a be. So some thought in than bit the about giving are of We did first that's now increase, driving that little XXXX. where we we over but the the better back we're three we would two and

Operator

Please Cross Fox Steven Research. from go comes ahead. question next of The

Steven Fox

Thanks. Good morning.

at decline, us over would you I you. in marketing are And that year markets sort I Ag look just are cycle. of given I cyclical was obviously, growth two think mentioned. of your wondering where secondly, Thank if in you you it those substantially the out attribute that cyclical sense average. HVOR you can was commercial at pressures Just when markets, markets the those what this on was above was that point in end versus to that the construction give vehicles a versus of wondering

Paul Vasington

the really it down XX%. as end got on stats truck decline XX, well in second end the start America, latter Ag we we in as to the that of see road of we the XX% North And of overall so started of to fourth those We come end markets. bit those the starting the market a almost of saw the and in Yes, XX, quarter part a earlier of that a seeing cross down down of so the decline quoted decline. forecasted market some markets. XXXX on tail in We in and Europe so really accelerated little year, started XXXX. We some we quarter with in had down XXXX

less forward, fourth more than than it going X% are quarter, some So similar we're the be about so expecting to but overall trends, market, in but full-year XXXX.

think In view months to cycles. is year a terms XX on it's that of the I timing our that, that

come to that see we'll this year. the So terms XXXX, in at but market there's more end forecasting of balance that of we're not any during uptick big

Operator

The next Sachs. question go of Mark ahead. comes Goldman Delaney Please from

Mark Delaney

by to the markets you CEO potential M&A, XXXX? like Are I end for larger on Martha, you markets? for your your in the prepared aerospace your questions something Yes, about in one all to comment well of of good over which thanks Jeff diversification and Are question. noted organic taking mostly even and remarks size that you luck in just growth and to your help potentially years as the best made the alluding or CST new time company thanks The pretty objective? referring role. order morning, for about of maybe end goals achieve

Jeff Cote

front targets it's an end is, would that's growing continue to or some that over so on long-term. will to are the rate the business potential seeing to the our business it down nice to decline, at diversify aerospace identify that also be but have well, of help markets M&A it the Both,

Mark Delaney

my typically half there it's be job, but the And expense, especially managing good first up quarter, SG&A but in in a sense Thank you. first dollars a thinking follow-up get quarter, no very the quarter? stuff around and are to it. always Got the for in better about SG&A just XX been some where to questions of second SG&A first trying

Paul Vasington

there's timing costs, First from we also timing just employee up of the probably quarter fourth bit around investment a expect to exited then would and the just little move XXXX, we where that's normal quarter, costs. it

Operator

comes question go Stein The William ahead. Please of from next SunTrust.

William Stein

electrification Great. a Thanks for taking follow-up my question. I wanted about the question a to ask megatrend. and

of few how internal the us have electric customer's help plans the quarters, vehicle? Over regarding versus understand might last I'm end hybrid you can anticipated OEM mix your changed hoping versus combustion

Jeff Cote

Yes.

our pretty shift. electrified any don't seen major product associated strategy we've I a but development seeing Every think any customers has I So, with platforms, of major don't one robust we're shift. think

been product we're more mature of new in on historically is, with path with the more electrified that be think customers things. alluded lumpy, the tend would I the to as opportunities of the that as a always tend size be terms they customers observed opportunities a fact the implement bit more little for what I technologies, follow in new expected and that technologies, platforms category be same given a to the pursuing. has the engaging us of be we've more concentrated what product it development couple second lifecycle little will doesn't we've as environment, lumpy this is emerging as to

William Stein

of another And between surprise speaking, mentioned significant helpful. combustion maybe that the categories, of internal thing that you that to to is? EV relate using Can within and sensors That's the you the a details remarks were combustion helpful? was was on as what are that Thank internal you. would your type. That elaborate the to then, be types thought any two prepared overlap portfolio. What a products in overlap power me. most broadly I --

Jeff Cote

Yes, absolutely.

with control type, applications, thermal redundancy apply electrified platform it for we associated type still management So, the vehicle, electronic in stability pressure cabin tire breaking applications, management type monitoring.

the would better are of a over serve transmission applicable, going of being today platform. forward, an portfolio are and into there the number you those half that that outside engine of So, designed we vehicles or total applications ports and know, be electrified right to

Operator

question Citi. Please go comes next The ahead. of Jim from Suva

Jim Suva

We mentioned the to I and fair same So, very you to closures. that? expect that do about all or on Thank with come so one that that the back vehicle, far. be far you and adjustment into XXth, to side of lot your of expect the to back should shortage talked that, just kind think lot production you'd to a making the kind we plant or so challenges and also you commentary associated of for a the heavy was automotive sales construction you're assume have and how magnitude, the regarding, automotive. plants, similar question, a it you the mentioned Is February that is much. about

Jeff Cote

Yes.

We end in impact to would markets is those have also as that markets of given similar well. just in the automotive, the it two-thirds end expect but markets but HVOR, generally would be not that occurred. three industrial shutdowns presence so, China impacted impact, would proportionate So, that proportionately, we don't have the China, business an be we a aerospace serve, other and the

Operator

Hettenbach from question ahead. The Morgan comes of Please go Stanley. next Craig

Craig Hettenbach

anything on North question on is just that strong Yes, region you in in Europe positioned some a the versus you're terms outgrowth visibility and sustaining, the there how the you're your had seeing in competitive front China kind things of in and America? on I thank then of that the just side, you. automotive know, into of

Jeff Cote

into Yes, provides the the and that the other into great serve, customers of and growth broadly the and more wins we visibility China with visibility nature NBO content engagement and in the in markets end markets business sustaining level automotive the other future. long-term market the of that

Craig Hettenbach

And Got it. just company are of that growth that just business of kind and applications of versus on with kind EV the then, GIGAVAC, quick you that process? commentary in can the about the the growth in that kind then overall of you the maybe some you're industrial frame follow-up just a helped where seeing just

Jeff Cote

headwinds Yes, growth so facing. that in market we're double-digit business despite seeing the strong GIGAVAC the we're

the investment laid So number there that to able unfolds. development. case other other on, market areas we're in five pressure year at the out as we're motor this beyond we terms that look working that the the beyond of to as will a different years monitoring, position, allow we this applications of GIGAVAC battery comments, where some we're playing electrification expect, us my prepared to of that we underwrote sensors enable we continue next out into of platform I mentioned looking had that and organic acquisition exploring to would the battery that serve as be are is in

in that that really we've both good the we're on -- acquired, we'll continue and feel about working on those organically. initiatives, ones the ones investing So

Operator

That the remarks. closing I'd for we back allotted to is call. to Young Joshua turn have like time over call the today's all for

Joshua Young

Research following the The Wolfe Conference, everybody to for Barclays quarter: I'd Industrial in the first conferences Citi us Industrial Goldman Sachs thank The morning. the Conference, Investor Sensata this Conference, Conference. The like attending joining Technology will be and

this the may Massachusetts. headquarters for you interest We also for call. Sensata. Andrew, end at visit us in your Attleboro, you joining Thank you and our invite to us now morning in

Operator

concluded. has you conference for The now Thank attending today's presentation.

now may disconnect. You