Sensata Technologies Holding PLC (ST) 2024 Q4 法說會逐字稿

Good afternoon and welcome to the Sensata Technologies fourth quarter and full-year 2024 earnings call. (Operator Instructions)

下午好，歡迎參加 Sensata Technologies 2024 年第四季和全年財報電話會議。（操作員指令）

Please note this event is being recorded and I would like now to turn the conference over to Mr. James Entwistle, Senior Director of Investor Relations. Please go ahead.

請注意，此活動正在被記錄，現在我想將會議交給投資者關係高級總監詹姆斯·恩特維斯爾先生。請繼續。

Thank you, Wyatt, and good afternoon, everyone. I'm James Entwistle, Senior Director of Investor Relations for Sensata, and I would like to welcome you to Sensata's fourth quarter and full-year 2024 earnings conference call. Joining me on today's call are Stephan von Schuckmann, Sensata's Chief Executive Officer; and Brian Roberts, Sensata's Chief Financial Officer.

謝謝你，懷亞特，大家午安。我是 Sensata 投資者關係高級總監 James Entwistle，歡迎您參加 Sensata 2024 年第四季和全年財報電話會議。參加今天電話會議的還有 Sensata 執行長 Stephan von Schuckmann；以及 Sensata 財務長 Brian Roberts。

In addition to the financial results press release we issued earlier today, we will be referencing a slide presentation during today's conference call. The PDF of this presentation can be downloaded from Sensata's Investor Relations website. This conference call is being recorded and we will post a replay on our Investor Relations website shortly after the conclusion of today's call.

除了我們今天早些時候發布的財務業績新聞稿之外，我們還將在今天的電話會議中參考幻燈片演示。此簡報的 PDF 可以從 Sensata 的投資者關係網站下載。本次電話會議正在錄音，我們將在今天的電話會議結束後不久在我們的投資者關係網站上發布重播。

As we begin, I would like to reference Sensata's Safe Harbor statement on Slide 2. During this conference call, we will be making forward-looking statements regarding future events or the financial performance of the company that can involve certain risks and uncertainties. The company's actual results may differ materially from the projections described in such statements. Factors that might cause such differences include, but are not limited to, both discussed in our Forms 10-Q and 10-K as well as other filings with the SEC.

在我們開始之前，我想引用幻燈片 2 上的 Sensata 安全港聲明。在本次電話會議中，我們將就未來事件或公司財務表現做出前瞻性陳述，其中可能涉及一定的風險和不確定性。本公司的實際結果可能與此類聲明中所述的預測有重大差異。可能導致此類差異的因素包括但不限於我們的 10-Q 表和 10-K 表以及向美國證券交易委員會提交的其他文件中討論的因素。

We encourage you to review our GAAP financial statements in addition to today's presentation. Most of the information that we will discuss during today's call will relate to non-GAAP financial measures. Our GAAP and non-GAAP financials, including reconciliations, are included in our earnings release and in the appendices of our presentation materials.

我們鼓勵您除了今天的簡報之外，還要查看我們的 GAAP 財務報表。我們在今天的電話會議上討論的大部分資訊都與非公認會計準則財務指標有關。我們的 GAAP 和非 GAAP 財務資料（包括對帳表）均包含在我們的收益報告和簡報資料的附錄中。

Brian will begin today by covering our detailed results for the fourth quarter and full-year 2024. Next, Stephan will comment on his perspectives from his first 30 days and key priorities moving forward. Stephan will then turn the call back over to Brian to discuss our financial guidance for the first quarter of 2025 and our high level 2025 outlook. We will then take your questions.

Brian 今天將首先介紹我們 2024 年第四季和全年的詳細業績。接下來，史蒂芬將評論他對上任後前 30 天的看法以及未來的主要優先事項。然後，史蒂芬 (Stephan) 會將電話轉回給布萊恩 (Brian)，討論我們 2025 年第一季的財務指導和 2025 年的高水準展望。然後我們將回答您的問題。

Now, I would like to turn the call over to Sensata's Chief Financial Officer, Brian Roberts.

現在，我想將電話轉給 Sensata 的財務長 Brian Roberts。

Thank you, James. Good afternoon, everyone. First, let me welcome Stephan to the team and thank Martha Sullivan for her leadership over the last several months as she steps back into the CEO role on an interim basis. For clarity, unless noted, all amounts are denominated in US dollars.

謝謝你，詹姆斯。大家下午好。首先，我歡迎史蒂芬加入團隊，並感謝瑪莎·沙利文在過去幾個月裡臨時重新擔任執行長職務期間的領導。為清楚起見，除非另有說明，所有金額均以美元計價。

Let me start on Slide 6. We finished 2024 with a strong fourth quarter as revenue of $908 million exceeded the top end of our $870 million to $900 million guidance range. Adjusted operating margins increased sequentially for our fourth consecutive quarter, and we improved full-year free cash flow conversion by 27 percentage points to 76% of adjusted net income as compared to 49% in 2023.

我從第 6 張投影片開始。我們以強勁的第四季度結束了 2024 年，因為 9.08 億美元的收入超過了我們 8.7 億至 9 億美元指導範圍的最高限。調整後營業利潤率連續第四個季度環比增長，全年自由現金流轉換率提高了 27 個百分點，達到調整後淨收入的 76%，而 2023 年為 49%。

With our improved free cash flow generation totaling $393 million for the year, we reduced net leverage to under 3 times as of December 31, 2024, for the first time in three years. Our renewed focus on our core portfolio of highly differentiated sensing and electrical protection products is driving value and improving operational efficiency.

隨著我們全年自由現金流總額達到 3.93 億美元的改善，截至 2024 年 12 月 31 日，我們三年來首次將淨槓桿率降至 3 倍以下。我們重新關注高度差異化的感測和電氣保護產品的核心產品組合，以推動價值並提高營運效率。

Over the last two quarters, we exited through a combination of divestitures and last time buys, approximately $370 million of annual revenue, including both the Insights business and the low margin, low growth product pruning efforts we described last year.

在過去兩個季度中，我們透過資產剝離和上次收購相結合的方式退出了約 3.7 億美元的年收入，其中包括 Insights 業務以及我們去年描述的低利潤、低增長的產品精簡工作。

In connection with these portfolio optimization measures, we implemented restructuring activities to streamline process, reduced overhead expense and consolidated facilities. These actions to strengthen our operational foundation will prove critical as we enter 2025.

結合這些投資組合優化措施，我們實施了重組活動，以簡化流程、降低管理費用並整合設施。當我們進入 2025 年時，這些加強我們營運基礎的行動將至關重要。

As I noted, revenue was $908 million for the fourth quarter of 2024 as compared to $992 million in the fourth quarter of 2023, a decrease of about 8%. We exceeded our guide as our topline benefited from higher-than-expected auto production in both North America and China.

正如我所指出的，2024 年第四季的營收為 9.08 億美元，而 2023 年第四季的營收為 9.92 億美元，下降了約 8%。由於北美和中國的汽車產量高於預期，我們的營收受益，超出了預期。

For the full year, revenue was $3.93 billion, representing approximately a 3% decrease from revenue of $4.05 billion in 2023. Adjusting for the sale of Insights on September 30 and other products exited in the second half of the year, revenue would have decreased approximately 1% from 2023. Adjusted operating income for the quarter was $175 million, representing a margin of 19.3%, an increase of 80 basis points from 18.5% in the fourth quarter of 2023.

全年營收為 39.3 億美元，較 2023 年的 40.5 億美元營收下降約 3%。考慮到 9 月 30 日 Insights 的銷售以及下半年退出的其他產品，收入將比 2023 年下降約 1%。本季調整後的營業收入為 1.75 億美元，利潤率為 19.3%，較 2023 年第四季的 18.5% 增加 80 個基點。

For the full year, adjusted operating income was $749 million or 19%. Adjusted earnings per share in the fourth quarter of 2024 was at the high-end of our guidance range at $0.76 as compared to adjusted earnings per share of $0.81 in the prior year period. For the full-year, we reported adjusted earnings per share of $3.44 as compared to $3.61 in 2023.

全年調整後營業收入為 7.49 億美元，增幅 19%。2024 年第四季的調整後每股收益處於我們指引範圍的高位，為 0.76 美元，而去年同期的調整後每股收益為 0.81 美元。我們報告的全年調整後每股收益為 3.44 美元，而 2023 年為 3.61 美元。

Now, let's turn to Slide 7 to discuss our segments. Performance Sensing, which includes our auto and heavy vehicle off road units, reported revenue of $2.74 billion in 2024, roughly flat year over year. This represents approximately 350 basis points of outgrowth against automotive and heavy vehicle end markets, which both contracted over the same time period.

現在，讓我們翻到幻燈片 7 來討論我們的部分。性能感測包括我們的汽車和重型車輛越野部門，報告指出 2024 年收入為 27.4 億美元，與去年基本持平。這意味著，與汽車和重型車輛終端市場相比，成長率約為 350 個基點，而這兩個市場在同一時期內都出現萎縮。

Our strong incumbency and recent share gains on ICE platforms enabled us to drive outgrowth despite the slowdown seen in EV adoption in both North America and Europe. Performance Sensing adjusted operating margin for full-year 2024 was 24.6%, representing an 80 basis point decrease year over year due primarily to regional revenue mix and the impact of foreign currency.

儘管北美和歐洲的電動車普及率放緩，但我們強大的在位地位和近期 ICE 平台的份額增長使我們能夠推動成長。Performance Sensing 2024 年全年調整後營業利潤率為 24.6%，年減 80 個基點，主要原因是區域收入結構和外匯的影響。

For 2024, Sensing Solutions, which is comprised primarily of our Industrial and Aerospace businesses, reported revenue of $1.06 billion which was a decrease of 8% year over year. While we have not yet seen a turn in industrial end market demand, we are encouraged that the business appears to have stabilized as fourth-quarter revenues were down just a couple percentage points as compared to the fourth quarter of 2023.

2024 年，主要由工業和航空航太業務組成的感測解決方案報告的收入為 10.6 億美元，年減 8%。雖然我們尚未看到工業終端市場需求的好轉，但我們很高興看到業務似乎已經穩定下來，因為第四季度的收入與 2023 年第四季相比僅下降了幾個百分點。

Sensing Solutions operating margins for 2024 were 29.5%, representing a 30 basis point increase from 2023. Adjusted operating expenses of $264 million included within our Corporate and Other segment were roughly flat year over year. This includes approximately $62 million of expense related to programs previously referred to as megatrend spend.

感測解決方案 2024 年營業利益率為 29.5%，比 2023 年增加 30 個基點。企業及其他部門的調整後營業費用為 2.64 億美元，與去年同期基本持平。其中包括約 6,200 萬美元與先前稱為「大趨勢支出」的項目相關的費用。

Beginning in the first quarter of 2025, we will reallocate these expenses to the business units with a great majority to be included within our Performance Sensing segment.

從 2025 年第一季開始，我們將把這些費用重新分配給各個業務部門，其中絕大多數將納入我們的績效感測部門。

With that, let me turn the call over to Stephan for his initial thoughts on the business.

說到這裡，我想把電話轉給史蒂芬，了解他對這項業務的初步想法。

Thank you, Brian, and good afternoon, everyone. I'm excited to be here as the CEO of Sensata. Let me take a moment to thank the global Sensata team, our entire Board, as well as Martha Sullivan, who continues to be a valuable advisor to me. I come to Sensata with over 20 years of global automotive, heavy vehicle and industrial experience, most recently with ZF Friedrichshafen as a member of the Management Board and as a leader of the Electric Mobility Division with more than EUR12 billion in revenue.

謝謝你，布萊恩，大家下午好。我很高興能夠以 Sensata 執行長的身份來到這裡。請容許我花點時間感謝 Sensata 全球團隊、我們整個董事會以及 Martha Sullivan，她一直是我寶貴的顧問。在加入森薩塔之前，我已經在全球汽車、重型車輛和工業領域擁有超過 20 年的經驗，最近加入採埃孚 (ZF Friedrichshafen)，擔任管理委員會成員和電動車部門負責人，該部門營收超過 120 億歐元。

The Global Electric Mobility division included all powertrains to ensure that the growing electrification needs of its OEMs customers were met, but also to remain a strong market leader on ICE and hybrid platforms. During my tenure, the division increased revenue by more than EUR2 billion at an average growth rate of 7% per year, improved plant level operational efficiencies and grew operating margins. Our responsibilities also included oversight of the Asia Pacific region and global procurement operations.

全球電動車部門涵蓋所有動力系統，以確保滿足其 OEM 客戶日益增長的電氣化需求，同時也保持在 ICE 和混合動力平台上的強大市場領先地位。在我任職期間，該部門的收入增加了20多億歐元，平均每年的成長率為7%，提高了工廠級營運效率並提高了營業利潤率。我們的職責還包括監督亞太地區和全球採購業務。

Our prior employer and Sensata have a long history of collaborating in both automotive and heavy vehicle markets. With a reputation of being the partner of choice to meet complex sensing needs, Sensata has developed an attractive position of market leadership underpinned by its long lasting and deep customer relationships.

我們之前的雇主和 Sensata 在汽車和重型車輛市場都有長期的合作。森薩塔 (Sensata) 被譽為滿足複雜感測需求的首選合作夥伴，憑藉著長期深厚的客戶關係，形成了頗具吸引力的市場領導地位。

At a time when end markets are undergoing unprecedented transition and uncertainty, Sensata is well-positioned across our business segments with a diverse set of high-value products and differentiated margins. This includes a robust ICE portfolio and opportunity-rich electrification offering for our auto and HVOR customers and a high-value sensing and electrical protection business serving customers in industrials and aerospace.

在終端市場經歷前所未有的轉型和不確定性之際，森薩塔憑藉多樣化的高價值產品和差異化利潤，在各個業務部門中佔據了有利地位。這包括為我們的汽車和 HVOR 客戶提供強大的 ICE 產品組合和機會豐富的電氣化產品，以及為工業和航空航太客戶提供高價值感測和電氣保護業務。

With our strong product suite across end markets, our global footprint allowing us to serve customers in all regions, and our deep embedded relationships, I'm confident that there is a significant opportunity to create shareholder value at Sensata.

憑藉我們遍布終端市場的強大產品套件、使我們能夠為所有地區的客戶提供服務的全球業務足跡以及深厚的關係，我相信 Sensata 有很大機會為股東創造價值。

To unlock this value opportunity, I'm focusing my efforts on three key pillars, which will be critical to our long-term success. First, returning Sensata to growth. Second, improving our operational performance. And third, optimizing capital allocation. While I am only a month into my tenure, let me take a minute to discuss my initial thoughts around each of these three key priorities.

為了發掘這個價值機會，我將專注於三大關鍵支柱，這對我們的長期成功至關重要。首先，讓森薩塔恢復成長。第二，提高經營績效。第三，優化資本配置。雖然我任職才一個月，但請容許我花一點時間來討論我對這三個關鍵優先事項的初步想法。

Over the last few years, Sensata struggled to deliver organic growth against the backdrop of weak end markets. Like many peers, the company responded appropriately by cutting costs. The opportunity for growth, however, is not completely dependent on the market. It's also achieved through innovation and by winning with the right customers on the right platforms. This was paramount to the growth I helped deliver to my previous employer and I will bring similar perspectives to Sensata.

過去幾年，森薩塔在終端市場疲軟的背景下努力實現有機成長。與許多同行一樣，該公司透過削減成本做出了適當的反應。然而，成長機會並不完全依賴市場。這也是透過創新以及在正確的平台上贏得正確的客戶而實現的。這對我幫助前雇主實現的成長至關重要，我也將為 Sensata 帶來類似的觀點。

Returning to growth will take some time as this is a long cycle business and our key end markets are expected to remain weak over the next several quarters. As such, our revenue expectation for 2025 is to be organically flat with 2024. Longer term, it will be my priority to deliver topline growth and I'm confident that Sensata is well-positioned with the right product portfolio to do so.

恢復成長將需要一些時間，因為這是一個長週期業務，而我們的主要終端市場預計在未來幾季仍將保持疲軟。因此，我們對 2025 年的營收預期將與 2024 年基本持平。從長遠來看，實現營收成長將是我的首要任務，我相信，森薩塔擁有合適的產品組合，能夠實現這一目標。

For example, our Industrials business recently launched its A2L leak protection sensor for HVAC units and we have established a market leadership position. As production of new-generation HVAC systems increases, we expect this product to be a meaningful growth driver for our Industrial business.

例如，我們的工業業務最近推出了用於 HVAC 裝置的 A2L 洩漏保護感測器，並且我們已經確立了市場領導地位。隨著新一代 HVAC 系統產量的增加，我們預計該產品將成為我們工業業務的強大成長動力。

Additionally, we have a strong value proposition across powertrains within auto and HVOR as we demonstrated in 2024 with approximately 350 basis points of outgrowth across these end markets. Our ICE business is strong as demonstrated by recent significant wins, including exhaust pressure sensing with Toyota, new emission sensing applications in North America and additional sockets across various platforms in Europe.

此外，我們在汽車和 HVOR 動力系統方面擁有強大的價值主張，正如我們在 2024 年所展示的那樣，這些終端市場的成長約為 350 個基點。我們的 ICE 業務表現強勁，最近的重大勝利證明了這一點，包括與豐田合作的排氣壓力感測、北美新的排放感測應用以及歐洲各個平台的額外插座。

We also continue to win in electrification where we are focused on growing with leading EV players in North America and Europe and expanding share with local players in China. Finally, our Aerospace business continues to see modest growth at operating margins well above our portfolio average.

我們也將繼續在電氣化領域取得勝利，專注於與北美和歐洲領先的電動車企業共同成長，並擴大與中國本土企業的份額。最後，我們的航空航太業務持續保持溫和成長，營業利潤率遠高於我們投資組合的平均水準。

In the near term, we are focused on operational excellence and continuous improvement as a growth enabler. I want to be clear on this point. Operational excellence is not just about cost productivity and margin percentage. It means delivering a high-quality product to our customers on time at the lowest possible cost, while we efficiently manage production capacity and optimize inventory levels. Being operationally excellent means doing all at well and that ensures we remain the supplier of choice for our customers, affording us the opportunity to win business and gain share.

短期內，我們將專注於卓越營運和持續改進，以此作為成長的推動力。我想明確這一點。卓越營運不僅涉及成本生產率和利潤百分比。這意味著我們以盡可能低的成本準時為客戶提供高品質的產品，同時有效地管理生產能力並優化庫存水準。卓越營運意味著把所有事情都做好，這確保我們仍然是客戶的首選供應商，並為我們贏得業務和增加市場份額提供機會。

Recently, I visited our plant in Aguascalientes in Mexico. I was impressed by how many product lines across our business units and the highly capable team at that site. That said, it was also clear that we have opportunities to advance towards operational excellence. Continuing our lean manufacturing efforts, accelerating our work to identify incremental design-driven cost reductions and demanding more of our supply chain are all areas where we expect to deliver meaningful improvements.

最近，我參觀了我們位於墨西哥阿瓜斯卡連特斯的工廠。我對我們的業務部門的眾多產品線以及該站點的高素質團隊印象深刻。儘管如此，我們顯然也有機會實現卓越營運。繼續我們的精益製造努力，加快我們的工作以確定增量設計驅動的成本降低，並要求我們的供應鏈更加嚴格，這些都是我們期望實現有意義改進的領域。

Overall, I'm encouraged by the progress the Sensata team has made in this past year as they improve quality and customer scorecards, achieved quarterly our operating margin targets and refined the product portfolio. In the coming months, I will travel to many of our locations including Bulgaria, Malaysia and China to meet our customer-facing teams and review our operational performance. Ahead of these visits, I've challenged our teams to accelerate their operational excellence initiatives. And I look forward to seeing that progress with an emphasis on value creation.

總的來說，我對森薩塔團隊在過去一年的進步感到鼓舞，他們提高了品質和客戶記分卡，實現了季度營業利潤率目標，並完善了產品組合。在接下來的幾個月裡，我將前往我們的許多地方，包括保加利亞、馬來西亞和中國，與我們的客戶服務團隊會面並審查我們的營運績效。在這些訪問之前，我已經要求我們的團隊加快他們的卓越營運計劃。我期待看到這一進展，並強調價值創造。

Finally, let me speak to cash flow generation and capital allocation. I'm pleased with the team's accomplishments in growing free cash flow in 2024. Incremental free cash flow is key to unlocking significant shareholder value as we find efficient ways to generate and deploy cash. Sensata's Board and I will continue to prioritize reducing net leverage, repurchasing shares opportunistically and maintaining our dividend.

最後，讓我談談現金流產生和資本配置。我對團隊在 2024 年增加自由現金流方面所取得的成就感到滿意。當我們找到產生和部署現金的有效方法時，增量自由現金流是釋放重要股東價值的關鍵。森薩塔董事會和我將繼續優先考慮降低淨槓桿率、適時回購股票以及維持股利。

While there are currently no plans for greater portfolio management beyond what was achieved in 2024, product lifecycle management is good business practice and I expect to continually ensure that each of our products and businesses earns their place within our portfolio.

雖然目前還沒有計劃在 2024 年的基礎上進一步完善產品組合管理，但產品生命週期管理是一種良好的商業實踐，我希望不斷確保我們的每款產品和業務都能在我們的產品組合中佔有一席之地。

With that, let me turn the call back over to, Brian. Thank you.

說完這些，讓我把電話轉回給布萊恩。謝謝。

Thank you, Stephan. On Slide 8, I want to highlight our cash deployment efforts for the fourth quarter and full-year 2024. As mentioned earlier, we are pleased with our improvement in free cash flow conversion as a percentage of adjusted net income. We exceeded our target of 67% conversion, ending the year at 76%. We generated $393 million of free cash flow, which was a year-over-year increase of 44%. As you can see from the chart, we've returned to pre-COVID levels of conversion as we improved working capital by reducing inventory levels and controlling capital expenditures.

謝謝你，史蒂芬。在第 8 張投影片上，我想重點介紹我們 2024 年第四季和全年的現金部署工作。如前所述，我們對自由現金流轉換佔調整後淨收入的百分比的提高感到滿意。我們超越了 67% 的轉換率目標，年底轉換率達到了 76%。我們產生了 3.93 億美元的自由現金流，年增 44%。從圖表中可以看出，透過降低庫存水準和控制資本支出，我們改善了營運資金，轉換率已恢復到疫情之前的水準。

Turning to Slide 9. We also delivered on our commitment to reduce net leverage to below 3 times trailing 12-month EBITDA as of December 31, 2024. We retired $700 million of bonds a year early through a combination of $200 million in corporate cash and proceeds from a $500 million bond offering maturing in 2032. With these actions, we have improved the maturity profile of our debt stack with the next tranche not due until 2029.

翻到幻燈片 9。我們也履行了承諾，將截至 2024 年 12 月 31 日的淨槓桿率降低至過去 12 個月 EBITDA 的 3 倍以下。我們透過 2 億美元的公司現金和 2032 年到期的 5 億美元債券發行收益，提前一年償還了 7 億美元的債券。透過這些行動，我們改善了債務的到期狀況，下一筆債務要到 2029 年才到期。

Additionally, we returned $72 million of capital to shareholders through our dividend, and we repurchased nearly 2 million shares in 2024 using approximately $69 million of cash. These capital deployment actions yielded an improvement in our return on invested capital, which increased to 10.2% for 2024 as compared to 9.7% in the prior year. Finally, we announced last month our Q1 2025 quarterly dividend of $0.12 per share, payable on February 26 to shareholders of record as of February 12.

此外，我們透過股利向股東返還了 7,200 萬美元的資本，並在 2024 年使用約 6,900 萬美元現金回購了近 200 萬股。這些資本配置行動提高了我們的投資資本報酬率，從前一年的 9.7% 上升至 2024 年的 10.2%。最後，我們上個月宣布了 2025 年第一季的季度股息為每股 0.12 美元，將於 2 月 26 日支付給截至 2 月 12 日登記在冊的股東。

Let me now turn to Slide 10, where I'll discuss our guidance for the first quarter of 2025 and provide some thoughts for the full year. Revenue is expected to be in the range of $870 million to $890 million with a decrease from the fourth quarter primarily due to a return of normal seasonality as well as foreign currency headwinds.

現在讓我翻到第 10 張投影片，在這裡我將討論我們對 2025 年第一季的指導並對全年提出一些想法。預計營收在 8.7 億美元至 8.9 億美元之間，較第四季有所下降，主要原因是季節性回歸以及外匯逆風。

For the full year, we are expecting the business to be organically flat year over year at approximately $3.6 billion of revenue. As a reminder, approximately $300 million of 2024 revenue will not repeat in 2025. This amount is comprised of the sale of Insights, divested products and more meaningful currency headwinds.

我們預計全年業務收入將與去年同期相比保持有機持平，約 36 億美元。需要提醒的是，2024 年約 3 億美元的收入將不會在 2025 年重複。該金額包括 Insights 的出售、剝離的產品和更有意義的貨幣逆風。

As we've discussed over the last couple of quarters, adjusted operating margins will decrease sequentially in Q1 to a more historical pattern of margins related to the timing of pricing and productivity. Currently, we expect adjusted operating margins of 18.2% to 18.4% for the first quarter, representing a sequential decrease of about a percentage point from Q4 2024.

正如我們在過去幾季所討論的那樣，調整後的營業利潤率將在第一季環比下降，以達到與定價和生產力時機相關的更符合歷史的利潤率模式。目前，我們預期第一季調整後的營業利潤率為 18.2% 至 18.4%，較上季 2024 年第四季下降約一個百分點。

In comparison, the average Q4 to Q1 sequential drop in the pre-COVID period of 2015 to 2019 was 200 basis points. Our better performance compared to historical norms is a testament to the operational initiatives undertaken over the last six months to optimize our portfolio.

相較之下，2015 年至 2019 年新冠疫情之前的時期內，第四季與第一季的平均連續降幅為 200 個基點。我們比歷史標準表現得更好，證明了我們過去六個月為優化投資組合所採取的營運措施。

Importantly and consistent with historical patterns, we expect adjusted operating margins to return to 19% or better in the second quarter, driven by ramping productivity and a seasonally stronger topline. We then expect to deliver incremental adjusted operating margin improvement in the second half of 2025.

重要的是，與歷史模式一致的是，我們預計調整後的營業利潤率將在第二季回升至 19％或更高，這得益於生產力的提高和季節性強勁的營收。我們預計 2025 年下半年調整後的營業利潤率將逐步提高。

For the full-year 2025, adjusted operating margins are expected to be equivalent or slightly better than 2024. Our Q1 2025 guidance and full-year 2025 outlook excludes any potential impacts from recently announced tariffs on imports into the United States.

就 2025 年全年而言，調整後的營業利潤率預計將與 2024 年持平或略好。我們對 2025 年第一季的預期和 2025 年全年的展望不包括最近宣布的對美國進口商品徵收關稅的任何潛在影響。

With that, I'd like to turn the call back over to, James.

說完這些，我想把電話轉回給詹姆斯。

Thank you, Stephan and Brian. We will now move on to Q&A. To allow all of those who wish to ask a question the opportunity to do so, we will limit each participant to one question at a time. Wyatt, please introduce the first question.

謝謝你，史蒂芬和布萊恩。我們現在進入問答環節。為了讓所有想要提問的人都有機會提問，我們將限制每位參與者每次只能提出一個問題。懷亞特，請介紹第一個問題。

Joe Giordano, TD Cowen.

喬·吉奧達諾（Joe Giordano），TD Cowen。

Hey, I wanted to touch on the outperformance in auto. That was interesting to see 300 basis points. Can you talk about what drove that and how we should think about that in the future? Because like I know you've made a lot of strides on US EV and that's largely been pushed out. So how should we think about the driver of outperformance versus production for the portfolio for the near-term?

嘿，我想談談汽車領域的優異表現。看到300個基點真是有趣。您能談談是什麼推動了這一現像以及我們將來應該如何看待這一現象嗎？因為我知道你在美國電動車方面取得了很大進展，而且這在很大程度上已經被推廣了。那麼，我們該如何看待短期內投資組合優異表現與產量的驅動因素呢？

Sure. Absolutely. As we think about 2024, obviously, first half of the year benefited a little bit from stronger ICE, especially in the European market as we've talked about. As we've gone through the full year, if anything, it should give confidence that our ICE portfolio is very strong. And so, kind of regardless of how ICE and EV penetration continue to take shape that we can do well in both.

當然。絕對地。當我們展望 2024 年時，顯然，上半年受益於 ICE 的強勁成長，尤其是正如我們所討論的歐洲市場。隨著我們度過這一整年，如果有的話，它應該會讓我們確信我們的 ICE 投資組合非常強大。因此，無論 ICE 和 EV 的普及情況如何，我們都能在這兩者上做得很好。

China is obviously still the more challenging market for us and from a local versus multinational perspective. And we've talked about last quarter that once we get into the second half of the year in 2025, we would expect see more normal outgrowth patterns return in China as we would lap those comps.

顯然，無論從本土企業或跨國企業的角度來看，中國市場對我們來說仍然是更具挑戰性的市場。我們在上個季度討論過，一旦進入 2025 年下半年，我們預計中國將恢復更正常的成長模式，因為我們將超越這些競爭對手。

But for the full-year '25, I think our expectations are that you would see us somewhere kind of in our normal range, maybe a little bit on the lower end given where IHS is, but we should see some modest outgrowth in the full year.

但對於 25 年全年而言，我認為我們的預期是，您會看到我們處於正常範圍內，考慮到 IHS 的情況，可能稍微偏低一點，但我們應該會看到全年出現適度的增長。

And then just a follow on, if I think about Europe specifically, right, that was a market where you have great customer relationships historically, but we're not on like this generation of EVs because you didn't have the portfolio to do so back when they were being bid. Now that you've had the contact to portfolio for several years, when should we expect you guys to kind of get your fair share of that EV business in Europe?

然後繼續說，如果我具體考慮歐洲，那是一個歷史上擁有良好客戶關係的市場，但我們並不像這一代電動車那樣，因為在競標時你沒有這樣做的投資組合。現在你們已經與投資組合公司聯繫了好幾年，我們什麼時候可以期待你們在歐洲的電動車業務中獲得公平的份額？

Yes. No, good news there. Many of those wins, we've been designed into that next generation set of wins. And so, really we're awaiting those launches. And I think we all understand that the timing of those launches and then the volume of those launches may be mitigated a little bit to what initially was thought.

是的。不，那是好消息。其中的許多勝利，我們都已被設計到下一代勝利之中。所以，我們確實在等待這些發射。我想我們都明白，這些發射的時間和發射量可能會比最初預想的稍微減少一些。

But we're well-positioned for those and that ultimately will drive our content per value to a more equivalent range between ICE and EVs in Europe. We'd expect that it's probably more of a '26, '27 thing than a '25 thing, but we're looking forward to those launches.

但我們為此做好了準備，這最終將使我們的每單位價值內容達到歐洲內燃機車和電動車之間更加均衡的範圍。我們預計這可能更像是 26、27 年的事情而不是 25 年的事情，但我們期待這些發布。

Amit Daryanani, Evercore.

阿米特·達裡亞納尼 (Amit Daryanani)，Evercore。

Good afternoon, everyone. I'll have two as well. I guess maybe just to start with, as I think about the operating margin expansion ramping from like 18% in Q1 to 19%-plus in the back half of the year, can you just talk about how much of that is operational improvement driven versus expected revenue leverage? I'm just trying to understand how much of this expansion do you think is controllable versus perhaps a bit more revenue driven over here?

大家下午好。我也要兩個。我想也許只是開始，當我想到營業利潤率擴張從第一季的 18％ 左右上升到今年下半年的 19％以上時，您能否談談其中有多少是由運營改進驅動的，有多少是由預期的收入槓桿驅動的？我只是想了解，您認為這種擴張在多大程度上是可控的，還是可能更多地以收入為導向？

Sure, Amit. Thanks for the question. I think obviously, we're going to be organically flat is kind of the thinking for 2025 and we're obviously on a little bit of a lower revenue base than where we were in 2024. So that's what's driving the margin expectation for the full-year to be, I call it, 19% to slightly better than that. So think 19% to 19.3% kind of a range.

當然，阿米特。謝謝你的提問。我認為，顯然，我們將實現有機持平，這是我們對 2025 年的一種想法，而且我們的收入基礎顯然會比 2024 年略低。所以這就是推動全年利潤率預期達到（我稱之為）19%或略高於這一水平的原因。所以認為範圍是 19% 到 19.3%。

Obviously, the volume is important for us, but we think we've taken an appropriate, I'd say, kind of level of balance around the plan, such that with ebbs and flows of revenue we're able to continue to generate operational productivity. And as Stephan pointed out, certainly, we believe there's different opportunities for improvement as we continue throughout '25, which hopefully benefit the second half of this year as well as start to tee up 2026.

顯然，數量對我們來說很重要，但我們認為我們已經採取了適當的平衡計劃，這樣隨著收入的起伏，我們能夠繼續產生營運生產力。正如斯蒂芬 (Stephan) 指出的那樣，我們當然相信，隨著 2025 年的到來，我們還將擁有不同的改進機會，希望這對今年下半年以及 2026 年都有好處。

Got it. And then Brian, you folks had very impressive free cash flow conversion in the December quarter, specifically, certainly the whole year, the December really stood out. Can you touch on what enabled outside conversion in the December quarter? And then, how do we think about free cash flow conversion in calendar '25 at a high-level? Thank you.

知道了。布萊恩，你們 12 月季度的自由現金流轉換表現非常出色，具體來說，當然是全年而言，12 月的表現確實非常突出。您能否談談 12 月季度實現外部轉換的因素是什麼？那麼，我們如何從高層次考慮 25 年的自由現金流轉換呢？謝謝。

You bet. So, a lot of credit to the team, especially the operational team here, because they drove a lot of improvements within inventory. And when you have a chance to start looking at the balance sheet, you'll see that our inventory balance is down about $100 million year over year. We still think there's more to do and continue to kind of push in our days on hand. But we made a significant amount of progress in '24 compared to where we were probably in '22 and '23 to right-size those balances.

當然。因此，團隊，特別是這裡的營運團隊，獲得了很大的讚譽，因為他們在庫存方面推動了許多改進。當您有機會開始查看資產負債表時，您會發現我們的庫存餘額比去年同期下降了約 1 億美元。我們仍然認為還有很多事情要做，並將在現有的日子裡繼續努力。但與2022年和2023年相比，我們在2024年取得了顯著的進展，以正確調整這些平衡。

Again, a lot of this is really, just I'd say kind of as we've talked about all year, a refocus on the balance sheet, a refocus on conversion, making sure we're collecting our receivables on time, doing all of that blocking and tackling that's needed to be able to generate conversion.

再說一遍，我想說，正如我們全年都在談論的那樣，重新關注資產負債表，重新關注轉換，確保我們按時收取應收帳款，並進行所有必要的阻止和處理，以實現轉換。

I think for '25, we're looking for conversion levels to be again at least where we are here and hopefully getting into the high 70s towards 80%.

我認為，對於 25 年，我們希望轉換率至少能恢復到目前的水平，並希望達到 70% 左右至 80% 左右。

Mark Delaney, Goldman Sachs.

高盛的馬克·德萊尼。

Stephan, congratulations on the new role. You mentioned Stephan that growth and capital allocation are two of your key priorities. As you think about those two areas, do you have any early thoughts about whether the growth that you're expecting and looking to drive will be more organic driven by R&D and better focusing on customers as you mentioned? Or do you think M&A is going to be an important component of that growth?

史蒂芬，祝賀你擔任新職務。您提到史蒂芬 (Stephan)，成長和資本配置是您的兩個主要優先事項。當您考慮這兩個領域時，您是否有過初步想法，即您所期望和希望推動的增長是否會像您提到的那樣，更加有機地由研發推動，並且更好地關注客戶？或者您認為併購將成為這一成長的重要組成部分？

So, thanks for your question. First of all, everything around growth that I also mentioned is of course organically at this point of time. It's been 30-plus days, so it's still early. But if I look at the opportunities that I see at this point of time, especially around the experience that I've gained at my prior employer ZF, I would see opportunities in Asia Pacific and especially around China.

感謝您的提問。首先，我提到的有關成長的一切當然在目前都是有機的。已經過去 30 多年了，所以還很早。但如果我看看目前看到的機會，尤其是圍繞著我在之前的雇主 ZF 所獲得的經驗，我會看到亞太地區、尤其是在中國的機會。

If I go a little bit deeper into that, what I've done in the past is I've always looked at individual OEMs and I've tried to understand which of these OEMs will be the winners of the future and they will always need to be somewhat cautious.

如果我更深入地探討這個問題，我過去所做的就是始終關注個別 OEM，並試圖了解哪些 OEM 將成為未來的贏家，並且他們始終需要保持一定謹慎。

And what I've developed around that with my team that time at ZF is kind of an intelligence to define which customers will be growing. And I'd like to transfer this knowledge and try to implement that here at Sensata and find opportunities to grow within that region.

我和我的團隊在 ZF 期間圍繞這一點開發了一種智慧技術，可以確定哪些客戶將會成長。我希望傳授這些知識並嘗試在森薩塔加以運用，並尋找在該地區發展的機會。

Very helpful. One other one for me. Just as you think about the company's exposure to tariffs, you're recognizing the guidance doesn't incorporate tariffs going into effect. But as you think about your footprint in Mexico and other regions, can you help us understand exposure and what that may look like if tariffs do go into effect on Mexico and Canada? And any steps you might be able to take to mitigate that if it does happen? Thank you.

非常有幫助。對我來說還有一個。正如您考慮公司面臨的關稅風險一樣，您會發現該指引並未將生效的關稅納入其中。但是，當您考慮到您在墨西哥和其他地區的足跡時，您能否幫助我們了解風險敞口以及如果關稅對墨西哥和加拿大生效，風險敞口會是什麼樣子？如果真的發生這種情況，您可以採取什麼措施來緩解影響？謝謝。

Sure, Mark. Happy to try to help here. So to date, the China tariffs that President Trump has announced, we don't view those to date to have any form of material impact. On the business, it's probably roughly about $1 million worth of exposure per quarter, so relatively small.

當然，馬克。很高興能在這裡提供協助。因此，到目前為止，我們認為川普總統宣布的對華關稅尚未產生任何實質影響。就業務而言，每季的風險敞口價值約為 100 萬美元，因此相對較小。

When we think about Mexico specifically, it's probably important to note that roughly is 70%, give or take a point or two, either way, of our manufacturing for North America is done in Mexico. So that would be kind of the overall scope of the exposure there. Keep in mind that the tariff itself would be more on the cost side of what we produce as compared to the sales side of what we produce.

當我們具體考慮墨西哥時，可能需要注意的是，我們在北美的製造業務大約有 70%（加減一兩個百分點）是在墨西哥完成的。這就是那裡曝光的整體範圍。請記住，關稅本身更多是我們生產產品的成本方面，而不是我們生產的銷售方面。

And obviously we're watching that pretty closely. As you know a global company, we have redundant manufacturing throughout the world. It's one of our strengths of how we can be region for region for our customers. And certainly, if tariffs came into play, then we would certainly do our best to be able to leverage our global footprint to minimize the exposure as much as possible.

顯然我們正在密切關注這一點。你知道，作為一家全球性公司，我們在世界各地都有冗餘製造。這是我們的優勢之一，我們可以為各個地區的客戶提供服務。當然，如果關稅開始發揮作用，那麼我們肯定會盡最大努力利用我們的全球影響力，盡可能地減少影響。

And candidly, I'm sure we, as well as every other supplier out there, will be working with our customers. And unfortunately most of that cost likely winds up being passed on to a consumer.

坦白說，我相信我們以及其他所有供應商都會與我們的客戶合作。不幸的是，大部分成本可能最終會轉嫁給消費者。

Christopher Glynn, Oppenheimer.

奧本海默的克里斯托弗·格林。

Hi, thanks and good to hear you, Stephan. On the pitch on the operating excellence initiative, you highlighted I think meaningful improvement for supply chain is targeted. I'm just wondering what you see there in a little bit more depth. Is there sort of low hanging fruit or how you see that those efficiencies progressing?

嗨，謝謝，很高興收到你的來信，史蒂芬。在推廣卓越營運計畫時，您強調，我認為供應鏈的有意義的改進是有針對性的。我只是想知道您在那裡看到了什麼更深入的東西。是否存在一些容易實現的成果，或者您如何看待這些效率的提升？

So coming from the automotive Tier 1 world, everything revolves around operation, at least a portion of performance revolves around operating excellence. I think part of my comment was based on my visit in Mexico, in Aguascalientes where I was roughly two weeks ago. And I met an excellent team, a very strong team down there, I met a team that has a lot of ideas around operational excellence.

因此，從汽車一級供應商的角度來看，一切都圍繞著營運而展開，至少有一部分績效圍繞著卓越營運。我認為我的部分評論是基於我大約兩週前對墨西哥阿瓜斯卡連特斯州的訪問。我遇到了一支優秀的團隊，一支非常強大的團隊，我遇到了一支對卓越營運有很多想法的團隊。

But where I see opportunities, if you scale that up. And if you concentrate more on costs, especially around quality, improving quality numbers, delivery performance, lowering inventories and developing that in a more systematic way over every single plant around Sensata, so I used Aguascalientes as an example, but doing that in a very strong systematic stringent way so that you have a continuous year-over-year productivity improvement. That's what I see at this point of time. Of course, it's still early days, but this is one of the areas I'll be focusing on.

但如果你擴大規模，我就會看到機會。如果您更專注於成本，尤其是質量，提高品質數字、交付性能、降低庫存，並在 Sensata 周圍的每個工廠以更系統的方式開發這些內容，那麼我以阿瓜斯卡連特斯為例，但以非常強大的系統嚴格的方式來進行，這樣您就可以逐年持續提高生產力。這就是我目前看到的情況。當然，現在還為時過早，但這是我將重點關注的領域之一。

Okay. Great. And then just on the ICE share gain that's been part of the story in '24, is that something that you've kind of hit on and you've gotten that lever pulled, or is that an ongoing thing?

好的。偉大的。那麼就 ICE 股票上漲而言，這是 24 年故事的一部分，這是您已經觸及並已經開始採取行動的事情嗎，還是這是一個持續發生的事情？

I would say that is an ongoing thing. I would explain it like this. Take for example, the region in Europe, what we see at this point of time, especially with more conservative governments being elected, is that most probably we would see a lift of the combustion engine ban specifically around Europe. So what does that mean? That would mean that in the end there'll be a stronger, let's call it, a refocus on ICE and also predominantly on hybrid systems. And the idea around that is to focus or refocus more on these technologies and try to gain opportunities around there.

我想說這是一個持續進行的事情。我會這樣解釋。以歐洲地區為例，我們目前看到的情況是，特別是隨著更多保守派政府的當選，我們很可能會看到內燃機禁令被解除，特別是在歐洲地區。那麼這意味著什麼？這意味著，最終我們將更加重視 ICE 以及混合動力系統。這樣做的想法是更多地關注或重新關注這些技術，並嘗試在那裡獲得機會。

Great.

偉大的。

Chris, obviously we saw some of that here in '24. I mean, with the stronger ICE business and just the amount of new opportunities coming through have been substantial and the team has done a great job of taking advantage of that.

克里斯，顯然我們在 24 年就看到了一些這樣的情況。我的意思是，隨著 ICE 業務的增強和大量新機會的出現，團隊已經很好地利用了這些機會。

Luke Junk, Baird.

盧克瓊克，貝爾德。

To start with Stephan, good to have this call with you. Just given your history at the China market and your time at your previous employer, I'd be just interested in your first impressions of Sensata's automotive business in China. Maybe just some high-level strengths and weakness in areas that you can lean into in the near-term beyond what you've already mentioned in terms of focus on the top growing customers and platforms there? Thank you.

首先，史蒂芬，很高興與您進行這次通話。鑑於您在中國市場的歷史以及您在前一家雇主那裡工作的經歷，我只是想知道您對森薩塔在中國的汽車業務的第一印象。除了您之前提到的專注於成長最快的客戶和平台之外，也許您近期可以依賴的一些高層次優勢和劣勢是什麼？謝謝。

So I think from what I've seen so far, and again, I would just like to say it's early days, 30 plus days. But I think, since I've been very active in China, undergone extensive activities to win new business within China, if I look at it from the experience that I bring within the past, China, especially China plus Asia Pacific, one needs to look at the complete region, is somewhat a different animal.

所以我認為，從我目前所看到的情況來看，我再說一遍，現在還為時過早，大概需要 30 多天。但我認為，由於我在中國非常活躍，進行了廣泛的活動來在中國贏得新業務，如果從我過去的經驗來看，中國，特別是中國加上亞太地區，人們需要從整個地區來看，是一個有點不同的動物。

So I think it's important that you're very selective within the market and the OEMs that you want to win within that market. I think that is one key aspect that one needs to consider. So that's the one side of it. So you would have Chinese OEMs that are for example very successful in technologies around hybrids, around range extended, but they've launched EV models and you would expect them to be successful as well, but they haven't been.

因此，我認為，你必須在市場中精挑細選，選擇你希望在該市場中贏得的 OEM。我認為這是需要考慮的關鍵方面。這就是事情的一個面向。因此，你會發現中國原始設備製造商在混合動力、增程式技術等方面非常成功，但他們已經推出了電動車車型，你會期望他們也會取得成功，但事實並非如此。

And that's just one example that you need to be very, very selective and that's something that I would try and bring into Sensata to understand or to let the team understand which OEMs to win with. That's basically for the region itself. And there's another aspect I'd like to add to that. So it's not just Chinese OEMs winning within China. There's also obviously a lot of Chinese OEMs that are hungry for growth outside of China.

這只是一個例子，你需要非常非常有選擇性，這也是我會試著帶給 Sensata 去理解或讓團隊去理解哪些 OEM 能夠獲勝的東西。這基本上是針對該地區本身而言的。我還想補充一點。因此，在中國，獲勝的不僅是中國的原始設備製造商。顯然，許多中國原始設備製造商也渴望在中國以外成長。

So they want to expand especially into Southeast Asia. So we're speaking about Malaysia, Thailand and all the countries around there, but also wanting to grow in Europe. So there's a lot of efforts to grow there as well. So when selecting these platforms that we would like to win with, one also needs to consider that because it gives you tremendous growth opportunity beyond just the Chinese market if these OEMs ought to be successful in European and Southeast Asian markets.

因此他們想要特別向東南亞擴張。因此，我們談論的是馬來西亞、泰國以及週邊的所有國家，同時也希望在歐洲發展。因此，我們也付出了很多努力來發展那裡的業務。因此，在選擇我們想要成功的平台時，我們還需要考慮這一點，因為如果這些 OEM 能夠在歐洲和東南亞市場取得成功，那麼它將為您帶來中國市場以外的巨大成長機會。

Got it. Thank you for that. And then for my follow-up, Brian, maybe just any segment-level margin comments at a high level would be helpful, especially relative to your comment that you're going to be allocating the former megatrend to the segments. It sounds like that's going to impact Performance Sensing more than anything. Is that right?

知道了。謝謝你。然後，對於我的後續問題，布萊恩，也許任何高層次的細分級別邊際評論都會有所幫助，尤其是相對於您將要將前一個大趨勢分配給細分的評論。聽起來這會對性能感知產生最大的影響。是嗎？

Yes. I mean, a lot of the megatrend spending, or what had been called megatrend spending, was really engineering expense at this point that was working on new business initiatives within the Performance Sensing business unit. So I would expect the great majority of it, probably 90% plus or minus or so, of that expense will wind up in Performance Sensing.

是的。我的意思是，很多大趨勢支出，或者所謂的大趨勢支出，實際上是此時的工程費用，用於性能感測業務部門內的新業務計劃。因此我預計其中絕大部分（大概 90% 左右）的費用將用於性能感知。

On an overall basis, I think our expectation is that we probably continue to see strength in the Sensing Solutions margin, potentially see that number continuing to increase a little bit as hopefully we see that bottoming out of industrials such that stabilized revenue, they start to grow there at back of HVAC, that allows some growth in the Sensing Solutions gross margins. Performance Sensing was probably going to be somewhere where it is, right in that same range and just have to adjust for the pricing.

總體而言，我認為我們的預期是，我們可能繼續看到感測解決方案利潤率的強勁增長，有可能看到這個數字繼續小幅增長，因為我們希望看到工業觸底，從而穩定收入，它們開始在暖通空調方面增長，這使得感測解決方案的毛利率有所增長。性能感知可能會處於某個位置，就在同一範圍內，只是需要調整價格。

(Operator Instructions) Guy Hardwick, Freedom Capital Markets.

（操作員指示）蓋伊·哈德威克（Guy Hardwick），自由資本市場（Freedom Capital Markets）。

Hi, good evening. Stephan, I wonder if you could give us your impressions on the Industrial and Aero businesses, potential opportunities there, given that historically there have been higher margin than the auto businesses?

嗨，晚上好。史蒂芬，我想知道您能否給我們介紹工業和航空業務的印像以及這些業務的潛在機會，因為從歷史上看，它們的利潤率高於汽車業務？

Yes, I can. Hi, Guy. Thanks for your question. Of course, I can. So again, these are just like early impressions that I have within two areas. So two areas of focus around thermal management and electrical protection, especially in the Industrial Solutions, certain opportunities, take for example opportunities around the heat pump.

是的，我可以。嗨，蓋伊。感謝您的提問。當然可以。所以再說一次，這些只是我對兩個領域的早期印象。因此，重點關注兩個領域，即熱管理和電氣保護，特別是在工業解決方案領域，存在某些機會，例如圍繞熱泵的機會。

We're developing markets within that area. My home market where I come from, Germany for example, very bullish on heat pumps, and I think that is one area of opportunity that we would have. And everything around leak detection for example, so we're launching the A2L product and this product is going to show quite some growth in the upcoming months and years.

我們正在開發該地區的市場。我的家鄉市場，例如德國，對熱泵非常看好，我認為這是我們擁有的機會領域之一。以洩漏檢測為例，我們推出了 A2L 產品，該產品將在未來幾個月和幾年內顯示出相當大的成長。

So those are like two opportunities that I would see. I'm sure there are a lot more that I haven't seen yet and I'll dive into the industrials area step by step and get to know it a lot better. One area maybe that has been touched, but where we don't have any significant business as of today is, for example, everything around data centers. That's something I'm getting my head around. I want to understand somewhat deeper and that could also be a future opportunity looking forward.

所以，這就是我看到的兩個機會。我確信還有很多我還沒看到，我會一步一步深入工業領域，並且更了解它。一個領域可能已經被觸及，但截至目前為止我們還沒有任何重要的業務，例如圍繞資料中心的一切。我正在思考這個問題。我希望能夠更深入地了解，這也可能是未來的機會。

Thank you. And just a follow-up for Brian. Congrats on the excellent performance and free cash flow. And obviously, you gave encouraging guidance for this year. But is there any reason why eventually Sensata couldn't be 100% free cash flow conversion company similar to public peers?

謝謝。這只是對 Brian 的後續採訪。恭喜您取得的優異業績和自由現金流。顯然，您為今年給出了令人鼓舞的指導。但有什麼理由導致森薩塔最終無法成為像上市公司一樣的 100% 自由現金流轉換公司？

I'd rather walk before I run, I guess, to say. There are some limitations. I mean, one of the strengths, as I mentioned earlier, is that we have redundant manufacturing in multiple areas of the world. And so, that's certainly a benefit when we think about how to best use our footprint to be able to certainly meet customer needs.

我想說，我寧願先走路，而不是跑步。有一些限制。我的意思是，正如我之前提到的，我們的優勢之一是我們在世界多個地區擁有冗餘製造。因此，當我們考慮如何最好地利用我們的足跡來滿足客戶需求時，這無疑是一個好處。

The downside of that is it allows you to not necessarily use inventory as efficiently as you could if you were manufacturing it all in one location. So we'll have to continue to see and evaluate that. If you look historically in this business, it's really been around an 80% little bit better kind of a cap on cash flow conversion.

這樣做的缺點是，如果你在一個地方生產所有產品，你就不能像以前那樣有效率地利用庫存。因此我們必須繼續觀察並評估這一點。如果你回顧這個行業的歷史，你會發現現金流轉換的上限確實在 80% 左右，稍微好一點。

But as many of you know kind of cash flow is near and dear to my heart and we will continue to do everything we can to drive that number higher. But for now in '25, I'm certainly going to try to push this to get us to that 80% mark.

但正如你們許多人所知，現金流是我最關心的問題，我們將繼續竭盡全力提高這個數字。但就現在而言，在 25 年裡，我肯定會努力推動我們達到 80% 的目標。

Samik Chatterjee, JPMorgan.

摩根大通的 Samik Chatterjee。

Hi. Thanks for taking my question and Stephan congrats on the role. I just wanted to understand from you, I know it's early days, but relative to the outperformance rate of automotive production, do you have any thoughts yet in terms of what is sort of the optimal level that Sensata should target? And particularly, how would you think about balancing related to growth versus margins and pursuing to that target, including like have you taken another look at the portfolio rationalization or the lifecycle management that the team has previously done? And do you see other opportunities on that front as well to sort of have a more focused portfolio around outgrowth to automotive production?

你好。感謝您回答我的問題，並祝賀史蒂芬獲得這一職位。我只是想從您那裡了解一下，我知道現在還為時過早，但相對於汽車生產的優異率，您是否認為 Sensata 應該瞄準的最佳水平是什麼樣的？具體來說，您如何考慮在成長與利潤之間取得平衡並追求這一目標，包括您是否重新審視了團隊先前所做的投資組合合理化或生命週期管理？您是否也看到這方面有其他機會，以便更集中地將投資組合集中在汽車生產的成長上？

And a quick follow-up just for Brian. Brian, I know on the tariff question, you mentioned 70% of the North America production being in Mexico. Does all of that get carried over the border to the customer? Or does some of that get sort of overall shipped to the customer in Mexico? So I just wanted to clarify that. But thank you for taking my question.

對 Brian 進行快速跟進。布萊恩，我知道在關稅問題上，你提到北美 70% 的生產在墨西哥。所有這些都能跨國運送到客戶手中嗎？或者其中一部分會整體運送給墨西哥的客戶嗎？所以我只是想澄清這一點。但感謝您回答我的問題。

Sure. There was a lot there, Samik. So let me start on a couple of pieces and then let Stephan kind of jump in with his thoughts in his first 30 days or so here.

當然。那裡有很多東西，薩米克。所以讓我先講幾個部分，然後讓史蒂芬談談他在這裡的頭 30 天左右的想法。

So around the tariff question to start, we do use and leverage a maquila structure. So the majority of what is imported in the US is us effectively carrying it over the border and then effectively then dispersing it to customers. There is some that we do within Mexico and there's a potential that we could do more if we had to, depending on exactly what happens with the all these potential for tariffs.

因此，圍繞關稅問題，我們確實使用並利用了加工廠結構。因此，美國進口的大部分商品都是我們有效地將其運送過邊境，然後有效地分散給客戶。我們在墨西哥境內做了一些工作，如果有必要，我們可能會做更多，這取決於所有這些關稅潛力的具體情況。

And so, it's one of the things that we will certainly look at with customers to see if there's a more efficient way for us to be able to deliver goods to them. I think and there's a lot there. I would comment a couple of things around outgrowth, margin profile portfolio. And again, it's early days for Stephan, let him jump in here.

因此，這是我們肯定會與客戶一起研究的事情之一，看看是否有更有效的方式讓我們能夠向他們運送貨物。我認為那裡有很多東西。我想就成長、利潤概況和投資組合等一些事情發表一些評論。再說一次，對史蒂芬來說現在還為時過早，讓他加入吧。

But I do think this business historically, and there's really no reason to think it's different, has driven outgrowth somewhere in that average of, call it, 3 to 6 percentage points per year, very kind of tried and true. I would think that there's no reason to think that's different regardless of the powertrains. And if anything, with ICE being -- showing good strength in ICE kind of reaffirms that range.

但我確實認為，從歷史上看，這項業務已經推動了平均每年 3 到 6 個百分點的成長，這是經過實踐檢驗的，而且沒有理由認為它有所不同。我認為，無論動力系統如何，沒有理由認為這會有所不同。如果有的話，ICE 表現出的良好實力可以重申這一範圍。

On the operating margin front, I would say that we're still taking this in chunks and we certainly want to be better in '25 than where we were in '24. Again, I have a lot of confidence that in Q2, we will see that snap back to the margins that we want to be at. And the drop in margin really is just the Q1 effect. And then, we will recover pretty quickly on that. And so, those are the big drivers. And again, I think as Stephan mentioned on portfolio, just early days to determine if any other changes will happen next time.

在營業利益率方面，我想說我們仍在逐步實現這個目標，我們當然希望25年的表現比24年的表現更好。我再次強調，我非常有信心，在第二季度，我們將看到利潤率迅速回升至我們想要的水平。利潤率的下降其實只是第一季的影響。然後，我們就會很快恢復。所以，這些都是主要的驅動因素。而且，我認為正如史蒂芬在投資組合中提到的那樣，現在還只是早期階段，無法確定下次是否會發生任何其他變化。

I think I could add somewhat, but I think you've answered the question, Brian. But you're asking what is the right level of market outgrowth for Sensata. It may be a bit early for me to give any number there. But from my experience, I look at the technological mix of Sensata, I would say from low to mid-single-digits, I would say, is the right outgrowth that we should focus on.

我想我可以補充一些，但我想你已經回答了這個問題，布萊恩。但您問的是 Sensata 的正確市場成長水準是多少。現在給出任何數字對我來說可能有點早。但根據我的經驗，我看一下 Sensata 的技術組合，我會說從低到中等個位數，我想說，這是我們應該關注的正確結果。

Joseph Zach, UBS.

瑞銀的約瑟夫·扎克。

Hi, it's actually Zach Walljasper on for Joseph Spak today. So thanks for the question. I appreciate the color around like the margin seasonality, but when we think about the second half of the year, how should we think about drivers margin expansion coming from, one, the volume leverage and, two, just natural cost as the company resets for the lower like sales base? And can we expect megatrend spend to also kind of be rebased?

大家好，今天其實是 Zach Walljasper 取代 Joseph Spak 上台。感謝您的提問。我欣賞利潤率季節性的影響，但是當我們考慮下半年時，我們應該如何看待利潤率擴張的驅動因素，一是銷售槓桿，二是公司為較低的銷售基數重置時的自然成本？我們是否可以預期大趨勢支出也會被重新調整？

And then I guess, probably second quick question is, with free cash flow conversion improving, what are kind of early thoughts around capital allocation for the year, whether it's in buybacks or M&A potentially? Thank you.

然後我想，可能的第二個快速問題是，隨著自由現金流轉換的改善，對於今年的資本配置，您有什麼樣的初步想法，無論是回購還是潛在的併購？謝謝。

So let me start with capital allocation. I think our view has obviously been to kind of look at both net leverage, continuing to reduce leverage and opportunistic share repurchases kind of 1A and 1B, and you can continue to kind of alternate the order of those.

因此，讓我先從資本配置開始。我認為我們的觀點顯然是同時關注淨槓桿率、繼續降低槓桿率和機會性股票回購（1A 和 1B），並且可以繼續交替調整這些順序。

I think that's probably the approach at the present time for us to be able to deploy cash. It's obviously a conversation that happens with the Board every quarter. We do have our dividend as well, which we think is at an appropriate level. So I think you'll continue to see us doing those things here in the near-term.

我認為這可能是我們目前部署現金的方法。這顯然是董事會每季都會進行的對話。我們也有股息，我們認為股息處於適當的水平。所以我認為你會在短期內繼續看到我們在這裡做這些事情。

Around margin, Zach, if I heard your question right, sorry, it came through a little bit kind of garbled. In the second half of the year, certainly based off of just incremental revenue that we would typically see as we go through the year, getting kind of the full effect of all of the cost initiative work that we did, certainly our expectations are in the productivity improvements, which compound over time that we continue to see the margin lift in both Q3 and Q4.

在邊緣處，扎克，如果我聽錯了你的問題，抱歉，它聽起來有點混亂。在下半年，當然基於我們全年通常會看到的增量收入，獲得我們所做的所有成本計劃工作的全部效果，當然我們的預期是生產率的提高，隨著時間的推移，我們將繼續看到第三季度和第四季度的利潤率提升。

If I had to hazard a guess, it's probably similar levels of increase as you saw here in 2024 in the back half, but obviously we're trying to make sure we're as aggressive as we can there, so that we can ensure that we will be at or up for the full-year '25 as compared to '24.

如果我必須猜測的話，它的成長水準可能與 2024 年下半年類似，但顯然我們正試圖確保我們盡可能積極進取，這樣我們就可以確保 2025 年全年的業績與 2024 年持平或有所上升。

(Operator Instructions) With no further questions, this concludes our question-and-answer session. I would like to turn the conference back over to Brian Roberts for any closing remarks.

（操作員指示）如果沒有其他問題，我們的問答環節就結束了。我想將會議交還給 Brian Roberts 做最後發言。

So everybody, thank you for joining today. Certainly appreciate all of your questions and your continued interest in Sensata. We look forward to speaking with you again next quarter. And operator, you can disconnect the line. That concludes the call.

所以，感謝大家今天的參加。非常感謝你們提出的所有問題以及你們對 Sensata 的持續關注。我們期待下個季度再次與您交談。接線員，您可以斷開線路了。通話到此結束。

Thank you. The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.

謝謝。會議現已結束。感謝您參加今天的演講。您現在可以斷開連線。