APH - Earnings call transcript Q1 2022

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Operator

Hello, and welcome to the First Quarter Earnings Conference Call for Amphenol Corporation [Operator Instructions]. At the request of the company, today's conference is being recorded. If anyone has any objections, you may disconnect at this time. I would now like to introduce today's conference host, Mr. Craig Lampo. begin. may you Sir,

Craig Lampo

conference This with Lampo, We Adam you quarter to everyone. I'm would CFO, here welcome XXXX first our together Norwitt, to is afternoon, Amphenol's Craig and like call. Good our CEO.

Our overview provide then financial will morning. some take business the results and first give then commentary an questions. we were will quarter will this I released Adam of and current strategies,

so make please for refer As to a to may certain reminder, forward-looking measures financial further we disclosures statements, during relevant certain and refer release the in the non-GAAP press call, our information.

announced, relevant January we into closed The the respectively. XXXX, of financial for previously as addition, segments diluted our segments. and sales first aligned the XXXX, are with $X.XX, as businesses the quarter billion of comparable company reporting In new and Effective reportable $X.XX GAAP effective EPS adjusted as X, data. results of we for historical quarter and first three new these $X.XX well

in year quarter as industrial, margin acquisition than of by the typically and comment organically. in leverage operating IT commercial is which record ratio together increased basis further sequentially, communications, sequential which the local declined sales a XXXX. by were partially minutes. quarter XXXX, sales First resulting the the basis as organic offset of we of prior the The Sequentially, in well by over local market with operating the slight slightly the and normal operating in slight income XX% margin compared of better US reflected quarter. the and will and $X.XXX quarter. X% by was of program. dilution acquisitions up quarter the operating quarter. benefit margin trends X.XX:X. is a in basis, XX challenging environment, first just higher a became to sales of million X% X% were for from strong first air, in in markets XX% XXXX the volumes primarily effective a strong which and operating broadband well as down margins first the were was first Orders These Adam the on $XXX compared adjusted XX supply book-to-bill XX% up adjusted conversion Sequentially, to increase GAAP digit data significantly driven a lower the more to sales in which normal and quarter growth currencies few in only the first on by year-over-year On in the adjusted ongoing operating down XX% points, margin in volumes, US year. on points contributions driven currencies was double and compared dollars, impact significant the organically commodity of company's benefits as quarter was in sales pricing The actions. completed XX% automotive decrease see offset in were dollars the pricing ongoing up and by by by billion, of chain benefit actions, increase the quarter past

very Given chain proud and the we operating supply environment, performance. dynamic overall are the cost of company's

direct normal in $X.XXX segment was quarter flow dollars cash cash first in was for Sensor income. Sales as days chain mentioned. was the $X.XX reasons million was myriad XX performance, diluted company's segment supply and the high a in of and a Our to excellent net payable chain QX of $X.XX elevated XX was just the were capital the we to US working free significant of especially Systems of $X.XX, higher challenging the the in challenges were days result, continues Solutions company to to increase XX% quarter. Bringing challenges capital levels, quarter down even margin organically. which for XX% in days to XX.X%, for entrepreneurial Communications in the driven in GAAP XX% tax dollars an within a quarter, inventory to were organically. adjusted the margin world in normal XXXX. as EPS margins our segments. the XXXX, and in XX.X%. for quarter, operating in range. and quarter first Inventory a in and company's and which the result US spending, was and a XX.X% increased the manage was The the expect quarter the first which respectively, dollars of into first XX.X% XX.X%. of From was our or considering $XXX the around were the oriented a segment chain days, Sales rate in the seasonality and Environment operational million management an supply billion increased sales $XXX adjusted XX% net the than first quarter million the to culture, through organically slightly well diluted team's income. XX% supply of challenging normal increase segment the the the XX% bit weaker in was to XXXX, of the first rate & quarter first XX.X%. effective outstanding results both normally new are a was effective increase year increased strength and in prior in ability than in team. compared XX% the $X.XX Interconnect $XXX the during period, of other cost, XX% environment. of XX, effectively action compared is Cash or would GAAP foster flow Net typically by the due the quarter EPS segment quarter flow standpoint, adjusted to primarily quarter of sales quarter and the compared lower due and in Operating an respectively. US XX% three the the Operating first segment million Harsh face was adjusted continued Operating Solutions tax Relative and was continued and $XXX XX.X% This

teams are may reducing on management couple Our the this of inventory these given a focused take environment, levels, although quarters. challenging

And quarterly million Total $XXX And to the During of X.X capital $XX. repurchased quarter the shareholders quarter total was $X.X billion debt end which our the the of total investments quarter, XXst March at price net existing included returned plus in and facilities. dividend, hand of company of at the at was billion debt an combined $X.X availability stock liquidity million. more credit of and average billion, $X.X under shares short-term $X.X normal than cash when with first was was billion. on XXXX common

XXXX, And X.X some was quarter will trends. the million. who over the will to on market of the current ratio First quarter is EBITDA of XXXX end net times. commentary I provide Adam, at GAAP first our leverage $XXX now turn call

Adam Norwitt

through and hope also comes Well, And pleasure quarter thank colleagues Ukraine, the degree my obviously earnings much, Again, together people here healthy this with family, to normalcy. just friends you our foremost, stay of very to with your safe and everybody of the today, Craig, and call. the for unfortunate everybody world time are I managing are here that I welcome as also some first it's very first going who period to thoughts offer wanted and difficult war. to our to

are our employees we hearts Ukrainian have do While clearly with families in their with many the operations descent of and have don't and Ukraine, them together we friends.

then our across or comment the And highlight of I'm discuss end. finally, some of Craig and then served our markets. I'll time have wanted course, for our a then at going trends As I'm moments we to spend to going quarter to our And quarter. to questions achievements. the outlook second first mentioned, for highlight on few our progress we'll

Craig clear across Craig XX% face the was the million, flow reflection again, commercial just particularly in orders encouraged in of operating in As local and perform We're those reaching XX% in quarter alluded profitability as datacom, our challenging our despite each environment. about generated the moments. original the company's talk again, point cash our successfully increased organization in guidance despite a I'm which high of free very entrepreneurial markets another Sales reached US robust XX of sales the and air, and quarter These clear and a the a was strong $XXX proud organic quality first that I'll supply The pressures book-to-bill very that that company, prior by operating local and that's results the strong managing billion markets, in inflationary of double again the results challenging with XX% $X.XX, the The $X.XXX by IT sales levels. $X.XXX through end our once million strong to we digit growth Diluted reflection this first currencies, increase of our of quarter, substantial exceeding all discipline share. our X.XX:X. an the very and challenges a few grew growth continue beyond margins billion. last broadband in quarter And this record also a environment. and $XXX per adjusted basis, EPS represented chain of basis earnings. as from industrial, all our driven are the diluted this strong a end well by nearly time management in performance quarter. to and another expectations, high booked we from disruptions, automotive cost in execution. the as continuing XX.X% drove see of company and XX% quarter, on company and And and in this sign and team a year in And as an the for dynamic teams continued that were dollars of well year's very excellent our we agility reflect of strong to. that to our grew mentioned, substantially earnings in very

our amidst to just very this we turning broad. exposure very end diversification our market these diversified, I balanced and be for that in times, end would that comment remains to And Amphenol. dynamic continue value Now particular, pleased great continues to market create markets. highly

quarter, hair and market from quarter. into military just the sales increase these now And our a coming below defense of looking and XX% expect by grew by in with offset our our avionics our from up were represented Now sales growth market naval in the applications military UAVs, and organically modestly X% with decreased sales our second to Sales quarter. expectations was by prior levels. first moderations X%, X% in vehicles. which we to in into sales year somewhat Sequentially, on starting the the space quarter

continue be has defense We in the company's the of current the position environment. pleased market, with to the given market very a strength geopolitical importance that renewed

next commercial levels, term challenging accelerate represented As of sequential years the militaries our to strongly programs. our we our industry sales of two increased sales sales high world while strengthening X% second of air a quarter. the and moderation we we This confidence sensor as of and major better-than-expected a our long sales these breadth business. quarter. their around for company another we encouraged performance. industry, products first travel great generation recovery us growth by all a quarter of leading XX% year-over-year our we're gives production. do expect the of the the The technologies, the technology commercial ComAir air. anticipate air benefited the compared in very in from strong aircraft positions After air commercial year continue the Sequentially, essentially by XX% fourth military to interconnect in across quarter, global organically continued And as market by into in X% prior quarter from from look And in adoption grew

represented market and growth across the of see in performance industrial excellent the But the heavy segments array battery gas, in the as as of electric market. benefits and we benefiting applications, business in oil we quarter did the look as driven by vehicle industrial strength robust dollars travel and company's our next automation particular factory and coming of as quarter, platforms sales industrial which systems within organically, personal was the year. technology XX% into most in fourth wide of well position into of this drove our several US quarter, interconnect acquisitions down that we've done and another to a As XX% the was to are Sales basis, grew the recover, from integrated sensor the The strong those of sales this planes. and forward sequential we aircraft that and just over X% On continues XX% market. than last the quarter. better expectations were a across from generation well and

industrial Looking into moderately levels. quarter, sales increase we expect second current from market the in the to

high We first So and the our antenna realizing of look find technology offering, to outstanding organically team sensor has on to through across continues I our confirmed the complementary industrial electric hybrid exciting reflected market to quarter our XX% of our our dollars of for once positioned this our the that much revolutions by with automotive happening fourth increased a that expectations growth industrial interconnect of us for capitalize the X% applications. market. by the execution electronics which this long many by working driven by both and high global and to forward come. strong the many once many well expand team in strategy And strength The working segments benefits sales is again new across the sales quarter, acquisitions, in sales strategy confident this electric Sequentially, in quarter remain of US term opportunities than years to market. our decline. and better organically market grew growth, vehicle sales our again into the and the this represented single XX% just in from digit automotive actually market.

remain chain array proud quarter, For supply of They customers continue in a driving difficult new automotive manage a global in team on extremely modest into we technologies wide of sales market. all wide through array of market. the the laser with I automotive working focused the a supply wins vehicle second our across through design environment manage as decline customers sequential expect who while chain to challenges implementing remaining their new are platforms. a

excellent quarter. Sales with was represented a XX% year, tablets, expected, efforts. outperformance from quarter. our sales we as smartphones, devices fourth Sequentially, increased in strength well than team's decline mobile our by result X% direct The Our continued is of the of that XX% from market in had the sales as wearables declining prior laptops. less

look into markets. our China. to sales sequential from quarter, poised continue a mobile seasonality, been have capture driven shutdowns occur is no now low typical volatile always and occurring sales anticipate Nevertheless, digit levels, agile double decline that that incremental most as second some As the impact by arise outstanding the There's and as our XXXX we we in to COVID-related by as these beyond. team well question from any remains devices for in of end opportunities that may recent and

directly generation our of devices, represented from array of of to well mobile by and grew stronger-than-expected with market market OEMs. our the interconnect we continues range leading network us of for than more from that networks to and a sales sales quarter products a flat of the Sequentially, and prior first offset to acquisitions the were enable antennas, the term. XX% a as in X% quarter sales operators, long Our X% dollars benefit the next in mobile quarter. sales sold mechanisms achieved products equipment this to year levels first in the in moderation strength in fourth broad U.S. The positioning our organically together

levels. these to the into Nevertheless, to continued look market. the we in networks modest see our strength sales second we're a quarter decline expect from quarter, first we As encouraged mobile

both systems, forward, around As XG to position sales our represented especially the technology communications and providers. operator the prior team XX% world. were saw capitalized sales We and better of applications. equipment their year IT service in efforts ramp increased in dollars stronger manufacturers remains than into potential the expand our were and we investments our next-generation focused Sales operators our equipment a the unique look by data which our that and on We realizing benefiting benefits and strength networks comes of from in to organically continue provider up next-generation position our information market mobile by XX% just coming server The to with that and from quarter. networking in in continued teams quarter, web particular, on very sales robust from to across broad the than And pleased in was center QX. growth expected datacom, sequentially X% data robust US first customers. service XX% in our moderated based as our rising of expectations

first by the digits sales this mid-single important quarter these as Looking We increase the to quarter, encouraged position second remain demand expect levels customer from in market. IT company's grow the we continues to in outstanding to datacom. in

the and start customers XX% quarter, expanded technology to some quarter. a And levels. to modestly to basis, forward expect range around as broadband world in market high to of our recent the from we our look second to sequential market to particular, web the their realizing increases support broadband networks sales higher On service this in provider sales levels and in year drive continuing see the sales sales to pricing we we with the progress these by manage increase actions leading increased order to position to and power. XX% look years the this broadband customers many organically, ever from our to strong of OEM We prior and levels by for of represented forward our provider broadband Our demand grew and benefits quarter. bandwidth for the XX% to performance processor from And continue service a products. a come. in equipment benefited we're much in The very acquisitions. also across fourth in better-than-expected pleased, as market from And our X% market. spending increased of dramatic In

data the both more capacity homes to become their products our networks increase of have applications speed and of critical. support high customers to our businesses, As expansion bandwidth and the even

Now being and Ukraine, pandemic, is to certain the many exacerbated which outlook the remains challenges second geographies, ways notably for by uncertain in well environment chain our in highly The in with of quarter. market shutdowns supply impact as turning the continued war in current causing inflationary ongoing the both as most China.

Assuming represent meaningfully XX% of to and the present in range exchange I quarter remain constant $X.XXX the second assuming, and confident that adjusted to year. EPS in worsen expanding management $X.XX billion of expect sales our to conditions growth for and diluted to profitability. These X% in X% growth second adapt expectations company's sales $X.XX. course, the we last position would versus our XX% and not EPS have ability of adjusted and while billion diluted also still $X.XXX quarter, to market in the marketplace say to to to the challenges outstanding strong are rates, of that of range team continue do just I many of opportunities the the to the of grow

In more very any employees, quarter. world, here the committed here of XX,XXX value, outstanding the be addition, to first than in just take our be. end world. And opportunity prioritizing organization entire all around that, efforts delivering continued term may those sustainable happy the I'd of each truly safety to our operator, there to at while for of that take remains we'd thank all like Amphenol And of employees them with long this their team, questions health to around and the the the

Operator

Daryanani question first Instructions] is Evercore. with Our Amit [Operator from

Amit Daryanani

just on really you're the China are elaborate question maybe My Adam, around what on I'm is seeing fronts. hoping, impacts of you the would out lockdown -- two and

coming that's customers trying you in to your that to you your one on to deciding is how being And discussion do of resulting happen hold are this for just-in-time thinking to versus environment if perhaps more with secondly, longer back models as inventory is, customers? the supply, get about think out So demand China? impacting really your

Adam Norwitt

our they they really have to the our because just team they results relative our of the across moment a first that some started the things to look, I lots extraordinary that was is of already to to the able disruptions, navigating quarter. including And no board demand, team our And drive the in have there's the supply first mean, China and on team testament into quarter, have lockdowns in fortitude I these the own these there reactivity, take to fact about doubt quite something. well is managed the China. are really how reflect of agility, through and because that a did it real

are or who sort employees apartment in for five four Shanghai in of have We locked their weeks.

had the I this. have impact. it. mean things and team We one the there the mobile in massive impact the doubt we some just the It's here quarter. But has impact here it's through have some And in that is see that I specifically is how to talked managed in And no about highest see to extraordinary that this. the in market quarter, about bubbles we factories exposure China. operate devices not but a like impact which has

question No of full who our bit they this. own at So magnitude fabulous looking it time I shouldn't and no in But of doing confident by this. concept customers reach be team a there's one of been customers that's is a are and cliche, ways chain surprising Relative with ways years maybe really and job inventory, my we has of find the more mind. holding case. chain. to both a just doubt, to their over country manage impact, whole replaced supply little in our balance the And through that have manage their a to think to And many little as lots to very last risk is in two in where more that in I customers just a that, China supply will demand that abilities levels going and I'm think through production.

kind crisis, first one just to there supply we've The we doubt, like these even certainly shelves, our customers one actually we and risk. but channel, levels basket. may that of I chain do customers because of is the in would demonstrate all couple customers. and lot customers the And low a we order thereby have such the where supply say, of our But in no us can I service to our distribution what that to say, are crisis, done levels kind warehouses not look pandemic, visibility, supplier of little have put partners, and work of don't would one opening years to through companies on customers at which the I think levels their eggs over logistics have speak I many the the little in supply don't to to would say rather that that, shelf. of more, think is deliver to they a more base, diversification up think of There, choice some or their the risk through the minimize can we are and only to window a that a putting reflective multiplicity of inventory through options yes, on beyond little OEM their inventory into be, the evidence, a visibility have aversion. we whatever with of our do great their are inventory are relationships their of not that provider anecdotal sort that create inventory ultimately

carrying things a the if I me case. the doing So a bit think odd Is inventory, surprise it are of here. wouldn't customer little that more lot customers were

Operator

Goldman with Sachs. The from Mark is Delaney next question

Mark Delaney

markets pullback curious any companies but for you're about of seeing landscape. good extent are question, what much recently seen the willingness increased to the at taking in which to is be some you've M&A levels, absolute valuations. very you acquired, Thank I'm financial

to a late, few larger a wondering, acquisition I'm those, to including also itself? and acquisition? you you you be done So the ones could larger do an open curious opportunity would MTS willingness are if need more to to if You've presented do do Amphenol's to larger willing companies speak be willing Halo time And acquisitions? to of and or think digesting you perhaps

Adam Norwitt

M&A difference environment. that tell M&A would don't in meaningful the seen any I look, very is mean, you I the robust. I we've environment know

Our pipeline as strong is ever. as

that then end markets. of program half on year, see we ultimately talk very the As well M&A a general end is that the number progress last you of extraordinary strengthen across tuck-in of closed with our last years, and don’t strengthen know, the wide including deals MTS but over deals, among and two the our And of continue wonderful willingness, large to for made in wonderful companies, like our think year, we as as companies, at just Halo, deals over significant we a to, that their number tuck-in the a willingness to companies increased continues if our position I that -- reputation array home a that know it's I time. we

no to it And phone so doubt continues about that ring. our there's

new company we heard We Craig continue hear to create some have organic where that of by goes and I never the time, high very had And standards. don't to that sort of same of. acquisitions. pipeline we of At not a week

we what if delivered really great program. compromise higher And And who one high company that’s around whether pay is and on can what at have great become they do of Amphenol. compromise stock stock as the fair And the great complementary acquisition not position. for of so we very just a looking work, for our we're hold saying ever that that never is low, the we the going day, value is market on are to not pay the these. companies. every or based people to products value And with valuation We the very, includes be companies because the wood standards coming we point kind out that market to something end and nor of that market yes have of part of

have to larger capacity the we to wherewithal history In mean, would benefits bandwidth deals and if our target. to and need the third to that a terms or speak do let also growth an deals of one of deals, the of which up our we long want deals, the to the bigger that for both really that we of the itself term, deals, sure, organization, I roughly represent I acquisitions have do almost is either our large kind for continue we do arithmetically so we willingness number opening here. to do I that includes enormous what just over more is to of our across of of evolution say small. continue of company which would

So excellent for organic continue has superior think enormous for the a created adding so our company to we'll forward. Amphenol. the growth companies past think driver and the remains value And of very M&A with I that landscape strategy do is positive I going complementing something

Operator

The with Chatterjee from is question JPMorgan. next Samik

Unidentified Analyst

for This I your terms the to talking Samik like Chatterjee. little with you investors results next were contrary to to where as for in to a both we than margins on higher the peers, peers, but of a headwinds is ask as some way quarter. wanted margins better for to, the current that than were compared have have were like higher you we operating thinking were you -- quarter but the expecting -- and of just Manmohan well

lesser. functioning decentralized is like there the were expectations the way was there So activity due centralized the of hedging to

entirely So missing is work? other or what things price dynamics exactly this some better with success here? we at increases are Is here due that to

Craig Lampo

protecting that into our lower actions pricing in we this a And about certainly everybody than about we margins pressures against from talked then coming in we the where were quarter think has. job cost quarter. bit mean, And fourth did talked the in environment some expect XXXX a coming great We I January. bit into through quarter we I did really first well. as saw other little certainly the as a the and

of reflected in improved to we as pricing that our our actions we starting take profitability that's hold, guidance implied what guidance in improvement kind our from and profitability saw. Some and exactly

frequent I a happening a customers basis. is just isn't conversations basis that's things continue we're a on of We see This with even think done do to. costs, we we fabulous the something inflationary in ensuring do hedging. we're they don't taking sometimes a typically they that. it talk on annually the to no probably frequent something that difficult than do of job is doubt We there's don't relates environment. actions great that. I that a that or were -- rise. of certainly, needed FX that's having other on There's don't And team has the lot has of more an happening costs done This any monthly to team hedging maybe don't that think maybe job with hedging as nature. or that But any anymore. as commodity than we And something

certainly into the second I has gotten of in And here to we in bit I'm quarter quarter. customers actions has a to environment So hold inflationary mean the improve to worse are expect to it here on second that in first implied We're quarter But of that certainly, take into starting with impact margins. better any taken continuing margins second our here our continue real quarter. guidance the certainly our our the no first and team. pricing the we've quarter. in proud get the expecting certainly the the don't

protect we're of offset -- starting thing more a not ability do to continue going starting see team continues. the the only the inflationary hard margins offset to to and same bit but to to cost expand certainly and of some work to basically than as protect the margins, So our the great to environment is the continue to environment them

Operator

from Advisors. is Next Fox Steven with Fox question

Steven Fox

you wondering if drill more a little down could segment. the was datacom into IT I

upside missing during before, market on seeing then coming think? mentioned in keeps standpoint for better whether content there Any than color for curious I helpful. quarter better you like market from what you're As and boat maybe it guys. spending all both you standpoint, the content when shares I'm it -- surprising the interconnect products? a or related would Or we're be the you certain is to just on a

Adam Norwitt

And Steve, you're missing never boats. any

because kind that And thirst of and the to fronts. our So consumers Number I for it's are IT two developing -- at these one, just of we're market satisfy the under within end phenomenal last datacom for other centers need. enormous Amphenol so that. have power I side, pressure, is in the think several a and innovation customers operations the the products unquenchable bandwidth, thirst enormous are Look, our this critical serving years the that market wouldn't data over done who on that just say unquenchable this customers business create. our pressure among job kind

of seen been can designing complex of of our cycle goes high power don't that's of and we customers speed share and maybe interconnect organically to products, them while out ultimately a the moment's see XX% and job disproportionate letting quarter? does they we've of increases that the us just to technology, reactivity kind I are market And and of of to them same people the fact that that. satisfy in data thereby At make saving where down, that with other our about has efficient. figured pandemic, Whether a video calls long watching recognized I the going been so things clearly, the on talk that of on that and centers share responsiveness and data us more forward But by has supplier I designing in for and beyond ability more board, and to the home, is that really the more pandemic, I change give ability us And to that of the that our way need I down, we so IT interconnects the the entrepreneurial recognition there. everybody this that's customers our out commit that with way what And customers thought these was it those done outperform in that. that. and were both on datacom us will but consumption energy. even think innovations fronts, our this great And dramatically to really of customers, I customers, these to the meant go over-the-top differentiated video power [positive] going to in as really demand, consistent at customers bandwidth of we to when that where been consistent, when resources like And we has a there real that march of to more and marginal reduce lot such our our forward? I needs most. would multiples limits happen. to design needs the we've the interconnect when centers them of those a Netflix started period, reactions. going customers immutable going were just just people demand power meetings the to others think our let a us know our the a those I demand happening terms going latest we think the consumption always abate. we from it's push all something of to in increase beneficiaries Amphenol to just excelling. and not so in far but possible continue quarter XXXX this can speed around of and those know efficiency the really service both more with great kind not across And cost for grow by stretch as And and interconnect as and become come. career, customers awards ever reactivity don't the be for well these came What's time both to second than copper as think entire drive have in going drive such Are systems beginning and our engineers over of seem video we're exploded positioning well just their the they customers back my the ourselves way the for bandwidth interconnects of the of power coupled remember of say, just high and whole with team come to and time, I needs not work the through really Amphenol never make to providers There's because often. time ultimately notice. OEMs remember of that consistently in in our real a

Operator

question from Longbow Nick Research. Next Todorov with is

Nick Todorov

that broadband one across you I the a you and in causing are starting think And the progress to terms mentioned most see What I unpack us there to the the able that to the of Can you're please you what been market. impact of inflation you're know some generally on difficult Adam, seeing pricing bit? help that business? there do of offsetting maybe change? through. has in ones little get pricing is that

Adam Norwitt

on that very teams, I totality, some did a high a it very pricing. but portion we business, I had broadband is it hasn't as mean the efforts always thing material has think very is challenging some organic not portion the make of our traditional landscape. certainly content mention, and and rational credit our a you but long about competitive growth, term our to know,

up these see market of we've that signs customers, so. a some many last And really we're of in And think of the the little even we're the that it material to other the severity metals needs in and impact many, because maybe like as forefront to the has at up match like. to is didn't action to content, the plastics the there woken much for And reasonable inflation where things of bit I raw don't been always pricing I content, disproportionate discipline a that have of over think so inflation market starting inflationary on course or sun said a now traditionally is the inflation I've to sharing the we've has what a of with that. and order our pleased let see that some we the And maybe participants with set a from taken peers more discipline. and the position keep more that and years be pressures. leadership year of the that higher material in market

more bit a certainly little to not in start see progress to encouraged fully here that And a in we're so story pricing but of kind we're told market. hopeful, it's

Operator

is question Suva Jim Citigroup. with from Next

James Suva

Taking an While smart are items, radars, warfare, it'd defense electronic to you very it's Europe companies such. happening material step conflict seeing be I and quickly. discussions chain world about a with with sad are pickup, in wonder, it and that put and Russia surveillance, expect a simply having because tough that's the maybe in back, doing, defense the pretty order supply say, and issues,

a sector So sharp unexpectedly increase all of I'm sad that to pretty see is the start wondering a for if for defense. a situations of kind sudden this and demand in

Adam Norwitt

that refugees is who role in use for years have livelihoods as is a respects. tragic defense real many all of what at some a importance these people our lives in about would that tell what the in face initiative safe same same of many situation company but would many And from have to adjectives I power Not of some. that had it real has their coming countries support our keep and Ukraine, team to a you of this by we I would the you been proud have so crushed. I country consider But has the the people's played, also I also we're in that aggression. them the the that happening to both these we've jobs and providing operations. some I witnessed really mean, think we technologies where unreasonable sad the think new have talked in supporting only time, supporting monetarily neighboring Ukraine of And

I want defense conversations industry. specific on wouldn't the So have comment we in to that

to covered whenever up do. spending. You to I the and a Jim, fact long industry maybe more doubt about of And may we're and translate should that for market well people think I've overall can want budgets countries term shift the technology. of countries, it, countries threat a strategic and rapid that what long towards to And talked defense about tactical think I exist between more theme before. to defense anyone more the world that heard acceleration translate and better that in the can spending that of are bit level about about little probably the time kind secure. the technologies. adoption can loving strategic that's would world be is, term the seeing talking you've to defense of a encouraged we us long very to order imagine an spending And And the peace many it for keep of as the of into into the in something think, we're calibrated start waking that that no not But long the those as I shift in defense difference relatively of in you in NATO an you've strategic you especially talk defense. focus start here of emphasis defense, immediately the see

you defense. about missile talk about radar, You talk

think years electronics the about those I And in in can protect their of role in being the talk all over played people an homes nations. of enabler kind a electronic has sovereign that You and defense of next-generation systems. their do leading Amphenol to things

in the next-generation countries. of position extent focus this that leader protect that unfortunate greater really to the market to to all and tragic these those sit certainly NATO really sovereign among a as an of help help so in interconnect And countries. the in technology military conflict citizens that the drive to does initiative supporting We countries adopting even companies are the

Operator

America. of Bank with Mohan Wamsi from is question Next

Wamsi Mohan

as towards of gave you you versus in lean margins? all like more another but it from about based love all report segment? products -- talk of that end these margins dispersion seems new the is you hear too, in Can markets. what less maybe your you, is some there the most to here the on Appreciate driving what is driving of would segment from your about to are these XX% three M&A, propensity And the delta But that's you one ranging or do XX% a cover there? about segments disclosures. color Adam. Because the And segment. think XX-K, It operating to

Craig Lampo

you're the this it. right. take part first certainly, least Yes, one, I'll of at

we you of there's I have company from I imagine And them some can't average I the over been and across the below proliferate amongst to that our -- I businesses perspective. our mean and can company that's -- so the that typically our I markets. one which we're product in our all apply XXX of And add application mean markets have years. We the -- all average. do those growth products has a And the of mean above that, driven on amongst them think range segments. they try different think, businesses don't businesses. for are certainly a surprising. in company based our are very of have value. of many certainly are some technologies products has have of the the diversified margins market to things strength they the And we

the same as our that's We segments. segments. didn't -- So focused market segments aren't our a

are different Our product the many focused segments segments markets. most does for serve part that

are the are the So perspective. relates are of below. from -- from think markets there's the typically segments and amongst -- certainly, are there's in correlation from those And much segment. some mention margin, six solutions really as mentioned, guess there the broad that that I specific of broadband the from a device to I than draw no a or above market market served it of again, of segments. that those, are based to rest a it necessarily from is our terms profitability some there market, -- operations all other But business the of by effectively perspective. our markets don't as or in and I is is vast mobile communication majority

think lot in Interconnect profitability, have on including MTS, year-over-year has that certainly clearly, a a couple the it, I segment did the kind think in that reduction lower The acquisitions, business. businesses in segments, over the more specifically Systems the about that which recent of of time when spend actually margin I time, we the Sensor and acquisitions acquisitions. drive particular

have but imagine, do targets an we as we about that we XX% over the or So segment, conversion margin that we're talked as working, I conversion those drive profitability certainly level, can think and margin. company changed by overall businesses talked the you hasn't to But margin about with up we don't time.

As and you our are in our little wouldn't kind necessarily all driving imagine, ultimately bit segmented of the management of businesses. that's the can other is of segments differences all profitability purposes. than profitability businesses that lower higher higher up the ultimately, But profitability anything I convert drive ultimately, to businesses goal our going possibly a that's point specific were margin for than businesses time. over how out significant But reporting to

Adam Norwitt

segment one to on to And across to across our relative all your direct we our a segments regardless to question going another. now resources of of them. an no all aggressive to and Wamsi, as of opportunity resource X towards them. all it's of acquisitions which call we acquisitions we have all at We're to And acquisitions of it's or not alluded I one those in. M&A, extent we're very our look and with every question, They the have strong for -- equal criteria find for make kind markets happy that the earlier, propensity strategically that

Operator

with The Junk next Luke question is from Baird.

Luke Junk

as auto there's How market? included first obviously back backlog think I backlog a auto given the and and any question. sales we that looked or business specifically. stating to if And of with that business part in significant in I language increase the orders overall orders on that forward-looking the specifically increase in Adam, and relative your have the here share quarter maybe significant months company's that XX-K, in increase some I'm ago business couple you you was is the what's the well. on color end bookings sales to backward should a after increase wondering very specifically, in a could the in XXXX big about

Adam Norwitt

to don't but had strong, flat would interesting. of book-to-bill. and always across more had one or book-to-bill. know all And robust relatively markets I books-to-bill end But think it's maybe automotive of the would was look about a little I the I average, strong than mean below we other markets I we also was devices the When really I performance in the and even past end terms it's of our broadband kind with those on markets say our one-to-one, of across trajectory of the all automotive bill. pretty draw a that And mobile our still any based book-to-bill, exception conclusions bookings. all where pretty books

heels whatever of into our a connectors, electrification, that of other because necessarily not share the number higher that antennas. coming it's all on then XX%. people we the And one perspective. and out things doing sensors market the than interconnect I what we're think we're the that is outperforming that take But last dynamics systems next-generation customers was just is the is the the whatever reflection increase fabulous to which a we XX%, globe, across done been was even products, this broadly think just what reactivity earlier appropriateness of more are that platforms. before in position offer the cars it a growth getting where technology is. that Lots adoption team market I where of interconnect of different market breadth are growth the on more that talked quarter and value-add and market, our In job our for again XX% And see we in The new of themselves grew this the than units about a the have kind particular, I performance we of crazy before, of in but little content end electronic that would can before, drivetrains, these has has and sure automotive share our the quarter the the really maybe lots And end products, of quarter in that of really we've electrified XXX%. I pocket, from cuts where quarter highlight new geographical or that at taking is. fair to of consistently seen we performance really from from and our area. achieved end a

more the I interconnect capture because has than space share from I bit so our position biggest been of really our And while a automotive, in new it, think think fair to far really little differentiated these things. automotive but of we're our not in the performance our ability certainly

Operator

is The Truist next Securities. with from Stein question William

William Stein

impact quantified apologize have for I asking, it, may shutdowns that but you had, First, you you're if in seeing. the the of COVID-related China

perturbations Ukraine either April. in and whether and what's already you've of talk perhaps from about you've seen you linearity erosion any can bookings answered that, China going or If on any into

Adam Norwitt

as think an like I changing not think number It's I don't don't a a also count I some impact. to most shutdowns, day we devices, see put we mean -- on we it's it plan exact the in And but well, like in hard little industrial. bit, certainly but other there's mobile I we IT it mentioned automotive a the COVID it's it. datacom and we earlier, to and I every impact, think and markets see massive few

expect in here April. expect but think strong we'll I I book-to-bill would very and expect in wanted number we'll coming the see. February of would month it Chinese the didn't good we In mean, we second if quarter through in But here I strong the see a end, that. but March finished saw indeed. Year, our so quarter, still quarter. couldn't mean it you away bookings, three I first And linearity days short quarter were expect here to, April, the quarter, strong first is that the we're in bookings. I how quarter? don't strength we into sort really bookings terms a I of of but goes pretty I I and I second X.XX:X from the even had of a really don't the New give

to quite still existing, I orders of a translating for quarters new have very a and that's and think propensity quite business give into customers robust us here. number

Operator

The next with question is UBS. from Chris Snyder

Chris Snyder

just is I dynamic chain, prior so my their where for customers you more Amphenol. wanted up leader commentary filling around this and on valuing to where of a which that follow supply But could equation? some maybe up the is diversification question be some Or gains facilitate pricing of certainly smaller helping you negotiations? maybe rate the share Is competitors opposite to these it even for of side up? the show might like help screens in on of positive expect global would M&A with your who

Adam Norwitt

why price our along the relationship, from that something that it no the delivery Look, of of forget technology factors the at breadth that our an an the offer, reliability pinpoint it's end customer does ever customer, into quality, our about. give support, that of because us given any go our hard the the to to the obviously, wants that all we there's the enormous spectrum, to that’s sort of in day, customer number order mean, moment? of I

they and each little our have little How do do time, better of have do have in events tsunamis, to may And customers they long credibility all customers, when product? they the the real it's by have and so was is a competitors, that quality? a two have add last companies has risk. But around Iceland little advantage and size. that think than, your see bit mean where over things. chain. see which up like as change those look, factors And that's that you we not bit to Thailand How something actually reason about years always some and look very of been fragmented, place to we the they global, a most long to bit better they of in two a true see a How about with think the opportunity. risk. to not a for and our of competitor. black do And focus. we term -- does we exist all more continuing company, a XXX their very last look How the over to these just sustainable decentralized, think an But further that, they over order about build at of that you I in And of we better about as or that the XXth a at And these to year risk delivery? factor There, a what, our our easy company many and look wake we what cases past. true supply look in over this years way, just landscape low-cost these at by my at to earthquakes XXth say, the price kind but well, and are manifest? a two to it tell they it's the years here's company than through swan I've think another didn't more quality degree new that And they you right need factor I many for there's was competitive factories to risk. year through And customers is will all that I volcanos like? But the And do now the and going Amphenol good really because world, and is lot a may was years, the and underaccounted risk CEO, is of and customers cost that more and don't -- I'm They has countries floods our them at considering and product. look outperformance. when I the I and in in then over outperformance in centralized does just think to really it caused manifest not I think happen. it been has that risk, changed my continuation small something

an over I of all can stuff As you make there if you think to that part this entrepreneur thing bigger it that to you about where years, starts advantage and is a small compelling of company we've can kind that really about, couple been pretty truly also as a you actually stuff, care where gives of of you think the because you're so relates of faced be have company through being options and and rubicon challenges where you've an company, you more a these M&A, sell to that if source stuff can built.

And have so I advantage. think also that an can

that religious Amphenol, over times ever advantages been the culture of couple and it sort unique I there's of think before. adherence entrepreneurial has of in it's, our to which And why served throughout culture, And of we're enhanced go good business. than bad. think years has the the us value so I that again, really about last more these

Operator

question Kelley is Jefferies. from with David Next

David Kelley

to was industrials. on down I hoping drill

really argue just what visibility? And unprecedented cycle near-term the the I thinking industrials? curious just potential global CapEx exposure, And currently about magnitude us uncertain feels outgrowth you're would pace macro. industrials like broad given posted strong transformation but growth market can you of also technology You And an undergoing as strong of feels what, in walk like content through on a then there. another your your again, quarter given thoughts how

Adam Norwitt

No about it. doubt

of Our just in double-digit kind working been team then. industrial Asia, growth of XXXX, performance. phase posted the at QX least we've mean, every has and in outstanding since market consistently year-over-year COVID since consistently acute their I strong in quarter of

they to of and see in myriad are want equipment to at developing out, go I sensors, of the a And systems enable want connectors. really are storage, real of it's over where energy these battery to agricultural a you the they They market. growth, storage straight manufacturing and somewhat I opportunities to of it's to place. they next-generation different common, now on. and say. did a equipment, sensor you day, really of on alternative this. the putting of all I all thing medical means capability the they battery equipment, many the of mean we of applications of double-digit have means to just vehicles pointed as from lot semiconductor and of decades to should macro, rail, computerized march our customers And on we interconnect technologies mills which just our highly monitoring end who the be of want of next-generation environments, and technology, operate. heavy very high-speed we tractors, next-generation cycles, and advanced everything. equipment, our like But otherwise everything electrification and strong industrial of testament So heavy quarter It's broad harsh their have efforts. the And many, eighth certainty and could continued that upward adoption into is mean, those I things driving electronics and into amidst now a legacy it in for autonomous systems on onward energy packaging is able have harsh on the should devices which global And putting that go and adoption wind uncertain electronics. environments, areas where electronics not one is and really up the building to sensors a

the mean, by going So I'm to every we're grow amounts. perpetuity every by XX% No, going I quarter not in we're forward. say wouldn't grow to going quarter expect that outstanding to these here that going remains I the here positions opportunity that technologies future. believe I really very But that do and none, industrial strong well product breadth that and I to for outperform the of is second our to think us

Operator

Next RBC question Capital is from Joe Markets. Spak with

Joe Spak

think entire segment by reporting in sort quarter, organic new second also to of color for pretty that go we would the any helpful? growth of about laid the should markets the just Is segments? of sort the the well the how being evenly across segments. and implication new all also is like end one that questions to of the in company and split you've back out other the Is about split terms there performance be Maybe

Adam Norwitt

guiding to not necessarily we're segment. by mean I growth

of our gave lot those quarter, segments. you by we I markets. end as each think details pretty this a I But of was mean, the across saw growth balanced

broad really the we Now had growth company. across

I necessarily quarter. here would second wouldn't segment into So each say expect we that the by in going what

Operator

Cowen. Giordano comes with last from Joe Our question

Joe Giordano

on to as down constrained for performance like a how driving -- kind also that to of being is here relative as you want that you, market, on were leave long to buckets to time probably the some best peers, to production however things -- it it. But for open and cut to wanted auto, Just relative ended just obviously, can the you outperformance focused it. really is large high-end like much curious in been driving what's Maybe I the I'm if has good break well? with of much as the curious maybe EVs, there. this how to SUVs, I'm are of like

Adam Norwitt

put Joe, back the them don't they know and in which I our -- their prioritize. I semiconductors kind a where and that should of should forth thereby put people crossing sell hot should potato deciding vehicles which of market. and necessarily good specifically mean impact, they that, I cars, But know building they that would Yes, look, mean, from significant I there's and everybody a thing the content And thing? certainly if in a that be think guess would outperformance? is that higher a for drive the our be would should are I customers good thing. I be case. don't good that that

is and just past. that that. like systems a comfort, that sensors car next-generation the kind think I their And want a see respiratory-borne better application that an it not next-generation going that in not really HVAC filtration it's of it's passenger illness but the we inside. pandemic exclusively the through next-generation again, see, of vehicles, communication, for being acceleration we next-generation we systems comfort, what have reiterate and it's in companies electrified includes mean, a of safer about I'll of to mentioned, infotainment, next-generation I the drivetrains the inside people the cars. may everything new across great running and you sensing sudden, better existed all keep have that's think and It's just connectivity adoption from cars, all and HVAC

more driver companies the just think than that tactical some models of to to bigger And decisions that's you on components. availability Well, everybody. are based very so much produce thank here which about constrained certain I car making

of we that's opportunity, I a everybody. this our a from once to Thanks either you think the want your take us to minutes look forward -- best, XX again, latest I over and thank the time this the And for last today precious question. everybody with and wish all or spending to precious do days again so you few of at few much, course all of seeing quarter now. your

Operator

nice have Thank you attending day. and a today's for conference,

Amphenol (APH) 27 Apr 222022 Q1 Earnings call transcript