Sensata Technologies Holding PLC (ST) 2025 Q2 法說會逐字稿

Good afternoon, everyone, and welcome to the Sensata Technologies Q2 2025 earnings call. Please also note, today's event is being recorded.

大家下午好，歡迎參加 Sensata Technologies 2025 年第二季財報電話會議。另請注意，今天的活動正在被記錄下來。

At this time, I'd like to turn the floor over to Mr. James Entwistle, Senior Director of Investor Relations. Sir, please go ahead.

現在，我想把發言權交給投資人關係資深總監詹姆斯‧恩特維斯爾先生。先生，請繼續。

Thank you, Jamie, 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 second-quarter 2025 earnings conference call. Joining me on today's call are Stephan Von Schuckmann, Sensata's Chief Executive Officer; and Andrew Lynch, Sensata's Chief Financial Officer.

謝謝你，傑米，大家下午好。我是 Sensata 投資者關係資深總監 James Entwistle，歡迎您參加 Sensata 2025 年第二季財報電話會議。參加今天電話會議的還有 Sensata 執行長 Stephan Von Schuckmann 和 Sensata 財務長 Andrew Lynch。

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外，我們還將在今天的電話會議中引用幻燈片演示。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 make forward-looking statements regarding future events or the future financial performance of the company that 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, those discussed in our Forms 10-Q and 10-K as well as other filings with the SEC. We encourage you to review our GAAP financial statements in addition to today's presentation.

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，我們將對未來事件或公司未來財務表現做出前瞻性陳述，其中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在 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。除了今天的簡報之外，我們還鼓勵您查看我們的 GAAP 財務報表。

Much 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 in the appendices of our presentation materials and in our SEC filings.

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）包含在我們的簡報資料附錄中的收益報告和 SEC 文件中。

Stephan will begin the call today with comments on the overall business. Andrew will cover our detailed results for the second quarter of 2025 and our financial outlook for the third quarter of 2025. Stephan will then return for closing remarks. We will then take your questions.

史蒂芬將在今天的電話會議上首先對整體業務發表評論。安德魯將介紹我們 2025 年第二季的詳細表現以及 2025 年第三季的財務展望。隨後，史蒂芬將回來致閉幕詞。然後我們將回答您的問題。

Now I would like to turn the call over to Sensata's Chief Executive Officer, Stephan von Schuckmann.

現在我想將電話轉給 Sensata 的執行長 Stephan von Schuckmann。

Thank you, James, and good afternoon, everyone. Before I begin discussing our results for the second quarter, I'd like to take a moment to congratulate Andrew Lynch, who was named our Chief Financial Officer last week.

謝謝你，詹姆斯，大家下午好。在我開始討論第二季度的業績之前，我想花點時間祝賀上週被任命為財務長的安德魯林奇。

Andrew has been a valuable partner to me since I joined Sensata, and the Board and I have full confidence in him. Andrew's extensive financial and operational experience at Sensata have prepared well for this role. I'm excited to have him as a partner on Sensata's transformation journey.

自從我加入 Sensata 以來，Andrew 一直是我寶貴的合作夥伴，董事會和我都對他充滿信心。Andrew 在 Sensata 累積的豐富財務和營運經驗為擔任此職位做好了充分的準備。我很高興他能成為 Sensata 轉型之旅的合作夥伴。

Now let's begin on slide 3. We delivered a strong quarter of 2025 with revenue, adjusted operating income and adjusted earnings per share all exceeding the high end of our guidance for the second consecutive quarter. This is an important proof point for the resilience of our business and our team's determination to execute in the face of challenges, such as volatile end markets, geopolitical uncertainty, and the cybersecurity incident that we disclosed in April.

現在我們從投影片 3 開始。我們 2025 年第一季表現強勁，營收、調整後營業收入和調整後每股盈餘連續第二季超過我們預期的高端。這是我們業務的韌性以及我們團隊在面對動盪的終端市場、地緣政治不確定性以及我們在四月份披露的網路安全事件等挑戰時執行的決心的重要證明。

When I first spoke to you in February, I introduced three key pillars, which would serve as my initial focal points for shareholder value creation. Improving operational performance, optimizing capital allocation and returning to growth.

當我在二月第一次與你們交談時，我介紹了三大關鍵支柱，它們將成為我為股東創造價值的最初重點。提高營運績效，優化資本配置，恢復成長。

At our May call, I provided an update on some of the specific work we are doing on each of these pillars and much of the focus of the update was operational excellence. Today, I'll go a bit deeper on capital allocation and growth drivers.

在五月的電話會議上，我介紹了我們針對每個支柱所做的一些具體工作，更新的重點主要集中在卓越營運上。今天，我將更深入地探討資本配置和成長動力。

Before we get to capital allocation and growth, I'll share a brief update on operational excellence. We rolled out a number of initiatives over the last six months, and I'm pleased with our recent accomplishment on this journey. Our cash conversion rate in the second quarter was 91%, a significant step-up from our first quarter 2025 conversion rate of 74%. This improvement reflects our focus on [unlocking] cash to execute our capital allocation strategy. With operational excellence initiatives, we are optimizing our working capital and creating margin resilience in our business, enabling us to deliver on our earnings commitments.

在我們討論資本配置和成長之前，我將簡要介紹卓越營運的最新情況。我們在過去六個月中推出了多項舉措，我對我們最近在這過程中取得的成就感到非常高興。我們第二季的現金轉換率為 91%，較 2025 年第一季的 74% 有顯著提高。這項改善反映了我們專注於釋放現金以執行我們的資本配置策略。透過卓越營運計劃，我們正在優化營運資本，並創造業務利潤彈性，使我們能夠兌現獲利承諾。

Now I'd like to go deeper on our next pillar, optimizing our capital allocation. Simply put, we will deploy capital in a manner designed to maximize shareholder returns. In the first quarter, we seized the opportunity to repurchase $100 million of shares.

現在我想更深入地探討我們的下一個支柱，即優化我們的資本配置。簡而言之，我們將以最大化股東回報的方式部署資本。第一季度，我們抓住機會回購了1億美元的股票。

In the second quarter, we repurchased another $20 million of shares and funded our dividend while also accumulating an additional $74 million of incremental cash. In turn, we reduced our net leverage ratio from 3.1 times traveling 12-month adjusted EBITDA at the end of the first quarter to 3.0 times at the end of the second quarter. This further strengthened our already strong balance sheet.

在第二季度，我們又回購了價值 2000 萬美元的股票並為我們的股息提供資金，同時也累積了額外的 7,400 萬美元增量現金。反過來，我們將淨槓桿率從第一季末的 12 個月調整後 EBITDA 的 3.1 倍降低到第二季末的 3.0 倍。這進一步增強了我們本已強勁的資產負債表。

In the past, you've heard me talk a lot about benchmarking as we look to drive operational excellence. We are using external benchmarks for each of our key pillars. As we look at comparable companies across the market, our differentiated margins stand out and our cash conversion is improving. However, our capital structure and net leverage is a bit of an outlier. For the balance of this year and into 2026, you can expect us to continue to prioritize deleveraging.

過去，您聽過我多次談論基準測試，因為我們尋求推動卓越營運。我們對每個關鍵支柱都採用外部基準。當我們觀察市場上可比較公司時，我們發現我們的差異化利潤率脫穎而出，而且我們的現金轉換率正在提高。然而，我們的資本結構和淨槓桿有點異常。從今年餘下的時間到 2026 年，你可以預期我們將繼續優先考慮去槓桿。

Now I'm excited to share our progress on our growth pillar. Just like capital allocation, growth is enabled by operational excellence. Over my decades of experience in industry, I have learned that the right to win is earned by consistently serving customers on time at the lowest possible cost with high-quality products. Operational initiatives will ensure that we do exactly that. It's equally important that we're disciplined about the new business we pursue. We need to win with the right technologies on the right platforms with the right customers.

現在我很高興與大家分享我們在成長支柱方面取得的進展。就像資本配置一樣，卓越的營運也促進了成長。在我數十年的行業經驗中，我了解到，只有始終如一地以盡可能低的成本和高品質的產品為客戶提供服務，才能贏得勝利。營運舉措將確保我們做到這一點。同樣重要的是，我們要對自己所進行的新業務保持紀律。我們需要在正確的平台上採用正確的技術來贏得正確的客戶。

Over the last several months, I've worked with the inside team to study our past business wins a bit deeper and to identify the characteristics of our most successful programs. We're using those learnings to be more selective about how and where we invest and what business opportunities we pursue. For us, it means the following: first, stick to our core product technologies, pressure, temperature and electrical protection and certain specialty sensing such as force, position, flow and leak.

在過去的幾個月裡，我與內部團隊合作，更深入地研究了我們過去的業務成功案例，並確定了我們最成功的專案的特點。我們正在利用這些經驗教訓來更有選擇性地決定如何、在何處投資以及追求哪些商業機會。對我們來說，這意味著：首先，堅持我們的核心產品技術，壓力、溫度和電氣保護以及某些特殊感測，例如力、位置、流量和洩漏。

Next, prioritized platform-driven applications where high switching costs favor incumbency with an emphasis on regulated or mission-critical sockets. And finally, focus on the right end markets with exposure to key secular tailwinds and appropriate diversification. As we apply these criteria, our priorities become clear.

接下來，優先考慮平台驅動的應用程序，其中高轉換成本有利於現任者，重點是受監管或關鍵任務插座。最後，專注於正確的終端市場，把握關鍵的長期順風機會並進行適當的多元化。當我們應用這些標準時，我們的優先事項變得清晰起來。

In our Sensing Solutions segment, (inaudible) gas leak detection is a recent example of a business opportunity that checked all the boxes for us. We were able to leverage our core sensing capabilities to win the regulated sensor socket by air conditioning system platforms. We established a market leadership position in the US, which we are continuing to grow.

在我們的感測解決方案部門中，（聽不清楚）氣體洩漏檢測就是一個最近的商業機會的例子，它為我們檢查了所有的箱子。我們能夠利用我們的核心感測能力來贏得空調系統平台調節感測器插座。我們在美國建立了市場領導地位，並且正在繼續發展。

In 2025, this business is on track to deliver approximately $70 million of revenue and we continue to increase our market share with a goal of well over $100 million of revenue next year. We look forward to leveraging our incumbency with key OEMs to win globally with similar regulatory requirements on the horizon in both Europe and Asia.

到 2025 年，該業務預計將實現約 7,000 萬美元的收入，我們將繼續增加市場份額，目標是明年的收入遠超過 1 億美元。我們期待利用我們與主要 OEM 的合作關係，在歐洲和亞洲即將出台類似的監管要求的情況下在全球範圍內取得勝利。

In our Performance Sensing segment, we've spoken a lot about the content opportunities on both ICE and EV platforms as well as the rapidly evolving new energy vehicle or NEV market in China. It is clear and we need to win in China to maintain and grow our global market share. The China market is opportunity-rich with a rapid adoption of NEVs and growth of local OEMs. The high-voltage applications on NAVs offer incremental content opportunities for us compared to the traditional ICE business.

在我們的性能感測領域，我們談論了很多關於 ICE 和 EV 平台上的內容機會以及中國快速發展的新能源汽車或 NEV 市場。顯然，我們需要在中國取得勝利才能維持和擴大我們的全球市場份額。隨著新能源汽車的快速普及和本土汽車製造商的蓬勃發展，中國市場充滿機會。與傳統的 ICE 業務相比，NAV 上的高壓應用為我們提供了增量內容機會。

Our China team is actively driving business development with local OEMs in China to support their growth ambitions, both in China and beyond. We have significantly increased our pace of new business wins in China, primarily on NEVs. Our customers are placing value on our product performance, proven field quality in the local market, cost competitiveness and well-established production scale. More than 90% of these wins are with top local OEMs and leading an EV players.

我們的中國團隊正積極推動與中國本地原始設備製造商的業務發展，以支持他們在中國及其他地區的成長目標。我們在中國的新業務拓展步伐顯著加快，主要集中在新能源汽車領域。我們的客戶重視我們的產品性能、在當地市場經過驗證的現場品質、成本競爭力和完善的生產規模。其中 90% 以上的勝利來自當地頂級原始設備製造商和領先的電動車廠商。

Due to shorter design cycles in the China market, we expect many of these business wins to materialize into revenue later this year and serve as the foundation for a return to more consistent market outgrowth in 2026. The content wins we are securing include NEV specific electrical protection as well as powertrain agnostic content such as tire pressure monitoring systems or TPMS.

由於中國市場的設計週期較短，我們預計許多此類業務勝利將在今年稍後轉化為收入，並為 2026 年恢復更穩定的市場成長奠定基礎。我們獲得的內容包括 NEV 特定的電氣保護以及與動力系統無關的內容，例如輪胎壓力監測系統或 TPMS。

One of these recent TPMS wins featured new tire birth detection technology, and we are excited to share that we were the first to bring this technology to market for an active safety application. [Tire birth] detection enables the vehicle to activate its stability control features at the first sign of a tire rupture event, dramatically improving occupant safety. This is exactly the type of technological differentiation that gives us an edge in the market.

近期TPMS的一項成功案例體現了全新的輪胎爆胎檢測技術。我們很高興地宣布，我們是第一個將這項技術推向主動安全應用市場的公司。輪胎爆胎偵測技術使車輛能夠在輪胎爆胎跡像出現後立即啟動穩定控制系統，從而顯著提高乘員安全。這正是讓我們在市場上佔優勢的技術差異化。

Now that we've spoken about our key pillars, I'd like to talk a little bit more about what we are seeing in our end markets today. Let's turn to slide 4. I will start with tariffs and trade policy. Through a combination of reimbursement agreements with our customers and modifications to our supply chain, we have now successfully mitigated all of our tariff costs in the second quarter. Compared to approximately 95% when we spoke to you in May.

既然我們已經討論了我們的關鍵支柱，我想再多談談我們今天在終端市場看到的情況。讓我們翻到第 4 張投影片。我先從關稅和貿易政策開始。透過與客戶達成補償協議以及對供應鏈進行修改，我們現在已經成功降低了第二季的所有關稅成本。相比之下，我們五月與您交談時的比例約為 95%。

Since our last update, we've also seen a reduction to our exposures in connection with the deescalation of tariff rates between the United States and China. Additionally, we are pleased to report that we have not seen significant impact from recent tariff escalations on commodities go from export controls on reverse materials. More broadly, in our end markets, we're seeing a mix of volatility, resilience and growth. I'll see a few highlights now, and then Andrew will provide more specifics as he walks you through our results and guidance.

自上次更新以來，我們還發現，由於美國和中國之間的關稅稅率降低，我們的風險敞口有所減少。此外，我們很高興地報告，我們並未看到近期大宗商品關稅升級對逆向材料出口管制產生重大影響。更廣泛地說，在我們的終端市場，我們看到了波動性、彈性和成長的混合。我現在將介紹一些亮點，然後安德魯將向您介紹我們的結果和指導，提供更多細節。

On the performance sensing side, we are pleased with automotive production holding up stronger than initially expected when trade tensions escalated. (inaudible) production has grown in the first half as the market in China has been very strong. HVOR markets have been soft, particularly with on-road trucks, and we're starting to see off-road production slowdown as well. As a result, we're managing our costs accordingly.

在性能感知方面，我們很高興看到，在貿易緊張局勢升級時，汽車產量比最初預期的要強勁。 （聽不清楚）由於中國市場非常強勁，上半年產量有所成長。HVOR 市場一直疲軟，尤其是公路卡車，我們也開始看到非公路卡車的生產放緩。因此，我們正在相應地管理成本。

In our Sensing Solutions segment, we're seeing more growth which highlights the advantages of our end market diversification. Our industrials business grew over 9% in the second quarter as markets have stabilized and our new leak detection product is delivering meaningful outgrowth.

在我們的感測解決方案領域，我們看到了更多的成長，這凸顯了我們終端市場多元化的優勢。隨著市場穩定以及我們的新洩漏檢測產品取得顯著成長，我們的工業業務在第二季成長了 9% 以上。

In Aerospace, we saw over 5% revenue growth in the second quarter against the market that grew roughly 3%. Our market outlook for both industrial and aerospace in the second half is largely consistent with what we saw in the second quarter.

在航空航太領域，我們第二季的營收成長超過 5%，而同期市場營收成長率約為 3%。我們對下半年工業和航空航天市場的展望與第二季度的情況基本一致。

In summary, I am happy with what we have achieved so far this year. and our Q2 results demonstrate the progress we are making on our transformation plan built upon the three pillars. As we progress through the balance of 2025 and into the new year, we will maintain our focus and rigor on these initiatives to drive shareholder value.

總而言之，我對我們今年迄今為止的成就感到滿意。我們的第二季業績證明了我們在三大支柱基礎上的轉型計劃正在取得進展。隨著我們度過 2025 年餘下的時間並進入新的一年，我們將繼續關注並嚴格執行這些舉措，以推動股東價值。

With that, I will turn the call over to Andrew to provide greater detail on Q2 financial results and our guidance for the third quarter.

接下來，我將把電話轉給安德魯，讓他提供有關第二季度財務業績和第三季度指引的更多詳細資訊。

Thank you, Stephan, and good afternoon, everyone. I want to begin today by extending my gratitude to Stephan and our Board of Directors for placing their confidence in me as Sensata's Chief Financial Officer. I would also like to thank the Sensata team and our finance organization for their support over the last several months.

謝謝你，史蒂芬，大家下午好。今天，首先我要向史蒂芬和董事會表達感謝，感謝他們對我擔任森薩塔財務長的信任。我還要感謝 Sensata 團隊和我們的金融機構在過去幾個月給予的支持。

Let me start on slide 6. We delivered another strong quarter in Q2 with results above our expectations across all of our key metrics. We reported revenue of approximately $943 million for the second quarter of 2025 as compared to revenue of $1.36 billion in the second quarter of 2024. While revenues were lower year over year primarily due to the previously discussed divestitures, we saw $32 million of top line growth sequentially from the first quarter of 2025 and exceeded the top end of our guidance range, reflecting our rapid recovery from the cybersecurity incident in April, and general resilience in our end markets.

我從第 6 張投影片開始。我們在第二季再次表現強勁，所有關鍵指標的結果都超出我們的預期。我們報告 2025 年第二季的營收約為 9.43 億美元，而 2024 年第二季的營收為 13.6 億美元。雖然收入同比下降主要是由於之前討論過的資產剝離，但我們從 2025 年第一季度起環比增長了 3200 萬美元，超過了我們預期範圍的最高值，這反映了我們從 4 月份網絡安全事件中迅速恢復，以及我們終端市場的普遍韌性。

Adjusted operating income was approximately $179 million or a margin of 19.0%, and included approximately $12 million of 0 margin pass-through revenues related to tariff recovery, which were 20 basis points dilutive to our adjusted operating margins. Adjusted operating margins improved 70 basis points sequentially from 18.3% in the first quarter of 2025. Adjusted operating margins were consistent with prior year quarter at 19.6% and increased 20 basis points year over year, excluding the dilutive impact of tariff pass-through.

調整後的營業收入約為 1.79 億美元，利潤率為 19.0%，其中包括與關稅恢復相關的約 1200 萬美元的 0 利潤轉嫁收入，這對我們的調整後營業利潤率造成了 20 個基點的稀釋。調整後的營業利潤率較 2025 年第一季的 18.3% 較上季提高了 70 個基點。調整後的營業利潤率與去年同期持平，為 19.6%，扣除關稅轉嫁的稀釋影響後，較去年同期成長 20 個基點。

Adjusted earnings per share of $0.87 in the second quarter of 2025 represents an increase of $0.09 sequentially from the first quarter of 2025 and as we delivered on our margin expansion plans and a decrease of $0.05 as compared to the second quarter of 2024 due to divestitures. We achieved robust free cash flow of $116 million in the second quarter, an increase of 17% year-over-year. This represents a conversion rate of 91% of adjusted net income an increase of 17 percentage points compared to the first quarter of 2025 and 20 percentage points compared to the second quarter of 2024.

2025 年第二季調整後每股收益為 0.87 美元，比 2025 年第一季環比增加 0.09 美元，因為我們實現了利潤率擴張計劃；由於資產剝離，與 2024 年第二季度相比，每股收益減少 0.05 美元。我們在第二季度實現了 1.16 億美元的強勁自由現金流，年增 17%。這意味著調整後淨收入的轉換率為 91%，與 2025 年第一季相比增加了 17 個百分點，與 2024 年第二季相比增加了 20 個百分點。

As Stephan mentioned, free cash flow is a key focus for us, and our improvements accelerate our ability to execute our capital allocation strategy.

正如史蒂芬所提到的，自由現金流是我們關注的重點，我們的改進加速了我們執行資本配置策略的能力。

Now let's turn to slide 7, and I will discuss capital deployment. In the second quarter, we executed share repurchases totaling $20 million and returned $18 million to shareholders through our regular quarterly dividend. We reduced our net leverage to 3.0 times trailing 12 months adjusted EBITDA compared to 3.1x at the end of March. With our capital allocation strategy, we delivered ROIC of 10.1%, and up 30 basis points compared to the second quarter of 2024.

現在我們翻到第 7 張投影片，我將討論資本部署。第二季度，我們執行了總額為 2000 萬美元的股票回購，並透過定期季度股息向股東返還了 1800 萬美元。我們將淨槓桿率從 3 月底的 3.1 倍降至過去 12 個月調整後 EBITDA 的 3.0 倍。憑藉我們的資本配置策略，我們實現了 10.1% 的 ROIC，與 2024 年第二季相比上升了 30 個基點。

Looking ahead, you can expect us to continue to deploy capital in a manner designed to maximize shareholder returns with an emphasis on deleveraging in the near term.

展望未來，您可以期待我們繼續以最大化股東回報的方式部署資本，並在短期內專注於槓桿。

Turning to slide 8. I'll talk through the results for our segments as well as provide more color on what we are seeing in our end markets. Let's start with the segment results. Performance Sensing revenue in the second quarter of 2025 was approximately $652 million, a decrease of approximately 10% year over year primarily due to product divestitures and lower on-road truck production in North America and Europe.

翻到幻燈片 8。我將討論我們各部門的業績，並提供更多關於我們在終端市場看到的情況的資訊。讓我們從細分結果開始。2025 年第二季性能感測收入約為 6.52 億美元，年減約 10%，主要原因是產品剝離以及北美和歐洲公路卡車產量下降。

Performance Sensing adjusted operating income was approximately $147 million or 22.5% of performance sensing revenue, representing year-over-year margin expansion of 20 basis points, inclusive of any dilutive impact from tariffs.

性能感測調整後的營業收入約為 1.47 億美元，佔性能感測收入的 22.5%，相當於利潤率較去年同期擴大 20 個基點，其中包括關稅帶來的稀釋影響。

Sensing Solutions revenue in the second quarter of 2025 was approximately $291 million, an increase of approximately 9% year over year. This marks our second straight quarter of year-over-year growth driven by new content in our Industrials business and market outgrowth in our aerospace business. Sensing Solutions adjusted operating income was approximately $88 million or 30.2% of Sensing Solutions revenue, representing year-over-year margin expansion of 50 basis points, again, inclusive of any dilutive impact from tariffs.

2025年第二季感測解決方案營收約2.91億美元，較去年同期成長約9%。這是我們連續第二季實現年成長，這得益於我們工業業務的新內容和航空航太業務的市場成長。感測解決方案調整後的營業收入約為 8,800 萬美元，佔感測解決方案收入的 30.2%，這意味著利潤率比去年同期擴大 50 個基點，同樣包括關稅帶來的稀釋影響。

As a reminder, corporate and other costs have been recast to exclude certain costs previously referred to as megatrend spend, which are now presented within the two reporting segments. Corporate and other adjusted operating expenses were up $4 million versus the second quarter of 2024, primarily driven by higher variable compensation due to better underlying performance.

需要提醒的是，公司成本和其他成本已重新計算，以排除先前稱為大趨勢支出的某些成本，這些成本現在列示在兩個報告分部中。公司及其他調整後的營運費用較 2024 年第二季增加了 400 萬美元，主要原因是由於基礎業績改善導致浮動薪酬增加。

Now I'll provide color on what we are seeing in our end markets. In our automotive business, production estimates have been volatile and trade policy has evolved throughout the year. We have seen double-digit market growth in China in the first half, partially offset by market weakness in North America and Europe. Looking ahead to Q3, we see auto production moderating to roughly flat year over year and down about 1 million vehicle units sequentially from the second quarter on typical seasonality.

現在我將介紹我們在終端市場看到的情況。在我們的汽車業務中，產量估計一直不穩定，貿易政策也全年都在改變。我們看到上半年中國市場實現了兩位數成長，但北美和歐洲市場的疲軟部分抵消了這一成長。展望第三季度，我們預計汽車產量將同比基本持平，且由於典型的季節性因素，環比第二季度減少約 100 萬輛。

In our heavy vehicle and off-road business, we have seen softness throughout the year with on-road truck production down more than 20% in the first half across North America and Europe, and we expect this softness to persist in the second half of the year. Global off-road markets have seen modest growth in the first half, but we are now experiencing a significant slowdown in Q3.

在我們的重型車輛和非公路車輛業務中，我們看到全年都表現疲軟，上半年北美和歐洲的公路卡車產量下降了 20% 以上，我們預計這種疲軟態勢將持續到下半年。全球越野市場在上半年實現了溫和成長，但第三季卻出現了大幅放緩。

In our Sensing Solutions segment, we are seeing market strength. Both Industrials and aerospace are seeing low single-digit market growth, and we are seeing high single-digit outgrowth in industrial as our gas leak detection business has ramped nicely. The market outlook I just discussed is reflected in our guidance, which I will take you through in a moment.

在我們的感測解決方案領域，我們看到了市場實力。工業和航空航太市場均呈現低個位數成長，而由於我們的氣體洩漏檢測業務發展良好，工業市場呈現高個位數成長。我剛才討論的市場前景反映在我們的指導中，稍後我將向您介紹。

Looking a bit further ahead to Q4, we are monitoring third-party forecasts and customer demand signals and we expect more clarity as trade policy develops in the days and weeks ahead. Lastly, before we get to our guidance, I'd like to give just a brief update on tariffs.

展望第四季度，我們正在監測第三方預測和客戶需求訊號，我們預計隨著未來幾天和幾週貿易政策的發展，情況會更加明朗。最後，在我們得到指導之前，我想先簡單介紹一下關稅的最新情況。

Let's turn to slide 9. When we guided the second quarter, we estimated that we would incur $20 million of tariff costs, which we expected to fully recover on a dollar basis based on reimbursement agreements, we were able to secure in partnership with our customers. At this level of cost and pass-through revenue, we expected 40 basis points of adjusted operating margin dilution. Subsequent to our second quarter guide, we saw a de-escalation of tariff rates between the United States and China.

讓我們翻到第 9 張投影片。當我們指導第二季度時，我們估計我們將產生 2000 萬美元的關稅成本，我們預計根據與客戶合作達成的補償協議，這些成本將以美元為單位完全收回。在這種成本和轉嫁收入水準下，我們預期調整後的營業利潤率將稀釋 40 個基點。在我們的第二季指南之後，我們看到美國和中國之間的關稅稅率有所下降。

Additionally, we continue to work on our supply chain to manage our exposures. The net result of this was that we incurred approximately $12 million of tariff costs in the quarter and recorded $12 million of pass-through revenues. Accordingly, tariff pass-throughs were approximately 20 basis points dilutive to our adjusted operating margins.

此外，我們將繼續致力於改善供應鏈以管理風險敞口。最終結果是，我們在本季產生了約 1,200 萬美元的關稅成本，並記錄了 1,200 萬美元的轉嫁收入。因此，關稅轉嫁對我們的調整後營業利潤率造成了約 20 個基點的稀釋。

With that, let's turn to slide 10, and I will walk through our expectations for the third quarter of 2025. We expect third quarter revenue of $900 million to $930 million, adjusted operating income of $171 million to $179 million, adjusted operating margins of 19.0% to 19.2% and adjusted earnings per share of $0.81 to $0.87. At the midpoint of our guidance range, we see approximately 10 basis points of sequential margin expansion. However, we have assumed $15 million of tariff costs and associated pass-through revenues in our third quarter guide slightly higher than the $12 million we reported in the second quarter due to business mix.

接下來，讓我們翻到第 10 張投影片，我將介紹我們對 2025 年第三季的期望。我們預計第三季營收為9億至9.3億美元，調整後營業利潤為1.71億至1.79億美元，調整後營業利潤率為19.0%至19.2%，調整後每股收益為0.81美元至0.87美元。在我們預期區間的中位數，我們預期利潤率將較上季成長約10個基點。然而，由於業務組合的原因，我們在第三季指南中假設關稅成本和相關的轉嫁收入為 1500 萬美元，略高於我們在第二季報告的 1200 萬美元。

On a pre-tariff basis, we expect approximately 20 basis points of sequential adjusted operating margin expansion compared to the second quarter in line with the margin expansion targets we talked about last quarter. As noted in our press release and earnings materials, our guidance and tariff assumptions are based on trade policies and tariff rates in effect as of July 28.

在關稅前的基礎上，我們預計與第二季度相比，調整後的營業利潤率將環比擴大約 20 個基點，與我們上個季度討論的利潤率擴大目標一致。正如我們的新聞稿和收益資料中所述，我們的指導和關稅假設是基於截至 7 月 28 日有效的貿易政策和關稅稅率。

Earlier this month, we announced our third quarter dividend of $0.12 per share payable on August 27 to shareholders of record as of August 13.

本月初，我們宣布第三季股利為每股 0.12 美元，將於 8 月 27 日支付給 8 月 13 日登記在冊的股東。

Finally, before I turn the call back to Stephan, just a brief update on the cybersecurity incident that we disclosed in April. In connection with this incident, we experienced an approximately two-week disruption in our business. Thanks to our team's preparation and resiliency, our business has fully recovered. We are grateful to have this incident behind us without any significant disruption to our customers and without material financial impact.

最後，在我將電話轉回給史蒂芬之前，我先簡單介紹一下我們在四月披露的網路安全事件。由於這一事件，我們的業務中斷了大約兩週。由於我們團隊的準備和韌性，我們的業務已經完全恢復。我們很慶幸這件事已經過去，沒有為我們的客戶帶來任何重大干擾，也沒有造成重大的財務影響。

With that, I will now turn the call back to Stephane.

說完這些，我現在將電話轉回給史蒂芬。

Thank you, Andrew. I said this last quarter, but it warrants repeating, there is a significant transformation underway at Sensata. The foundation of this transformation is the key pillars that I've discussed on each of our earnings calls since I joined Sensata at the beginning of the year.

謝謝你，安德魯。我上個季度說過，但值得重複一遍，Sensata 正在進行重大轉型。這次轉型的基礎是我自今年年初加入 Sensata 以來在每次財報電話會議上討論的關鍵支柱。

I would like to conclude today's remarks by sharing a bit more why these are key to our vision and what you can continue to expect from us. Operational excellence is about stabilizing our core business to serve as an enabler to both our capital allocation and growth pillars. Our capital allocation strategy is to utilize our cash flow improvements to deploy capital in a manner designed to create shareholder value in the short term and long term with an emphasis on deleveraging.

在今天的演講結束時，我想進一步說明為什麼這些對於我們的願景至關重要，以及您可以繼續對我們抱有怎樣的期望。卓越營運就是要穩定我們的核心業務，以促進我們的資本配置和成長支柱。我們的資本配置策略是利用現金流改善來部署資本，以在短期和長期創造股東價值的方式，重點是去槓桿。

And finally, our return to growth will be supported by a focused product strategy and a clear evaluation criteria for growth opportunities. Success on our key pillars will be apparent in phases. Today, consistent execution with adjusted operating margins at or above 19% and free cash flow conversion at or above 80%. The next several quarters, net leverage continues to improve and in the years ahead, a return to more consistent growth. I'm excited about what the future holds, and I look forward to continuing to update you on our progress moving forward.

最後，我們透過有針對性的產品策略和明確的成長機會評估標準來支持我們恢復成長。我們的關鍵支柱的成功將分階段顯現。目前，調整後的營業利潤率達到或超過 19%，自由現金流轉換率達到或超過 80%，執行情況持續良好。未來幾個季度，淨槓桿率將繼續改善，並在未來幾年恢復更穩定的成長。我對未來充滿期待，並期待繼續向大家通報我們未來的進展。

I will now turn the call back to James for Q&A.

現在我將把電話轉回給詹姆斯進行問答。

Thank you, Stephan and Andrew. We will now move to Q&A. Jamie, please introduce the first question.

謝謝你，史蒂芬和安德魯。我們現在進入問答環節。Jamie，請介紹第一個問題。

(Operator Instructions) Mark Delaney, Goldman Sachs.

（操作員指示）高盛的馬克·德萊尼。

Nice to see the free cash flow conversion pick up. And Andrew, congratulations on the expanded role.

很高興看到自由現金流轉換率上升。安德魯，祝賀你擔任了更重要的職位。

Thank you.

謝謝。

I wanted to start with EBIT margins. They expanded 20 bps year-over-year, excluding tariffs, as organic revenue was down, I think, about 2%, and you expect sequential margin improvement again in 3Q. Can you go into more detail on what's driving that margin improvement both in 2Q and 3Q? And I guess as you look longer term, do you see a path to 20%-plus EBIT margins?

我想從息稅前利潤率開始。扣除關稅後，利潤率年增 20 個基點，因為有機收入下降了，我認為大約 2%，預計第三季利潤率將再次環比提高。您能否更詳細地介紹一下推動第二季和第三季利潤率提高的因素？我想，從長遠來看，您是否看到了實現 20% 以上 EBIT 利潤率的途徑？

Look, Mark, thanks for the question. So first of all, as mentioned in the call, we're undergoing quite a significant transformation at Sensata. And we've basically designed a number of initiatives that we're focusing on. So we didn't start a huge amount of initiatives. It's basically six initiatives that we're focusing on.

瞧，馬克，謝謝你的提問。首先，正如電話中所提到的，Sensata 正在經歷相當重大的轉型。我們基本上已經設計了一些我們重點關注的措施。因此我們並沒有啟動大量的措施。我們主要關註六項措施。

And just to mention a few, some of these initiatives are focused on pure operational excellence, something I've been speaking about frequently now in the quarter in the past. So that's improving plant performance. And what we're doing is we're benchmarking our plants against each other, where we have so-called similar products.

僅舉幾例，其中一些舉措專注於純粹的卓越運營，這是我在過去的一個季度中經常談論的事情。這樣就提高了工廠的性能。我們正在進行的是對我們的工廠進行相互對比，看看我們所謂的類似產品。

So for example, TPMS. And we try to improve the plants that are weaker than the best benchmark within Sensata as one example. Another example is we're working on commercial excellence. So we have a much stronger rigor around that. And like I said, there are other examples of we're working, for example, on improving our procurement and gaining effects from that.

例如 TPMS。例如，我們嘗試改進那些比 Sensata 內部最佳基準更弱的工廠。另一個例子是我們正在致力於商業卓越。所以我們對此有更嚴格的要求。正如我所說的，我們正在努力實現其他目標，例如改進採購並從中取得成效。

And that's basically the effect that you see with other initiatives that you could see the margin improvement. But for more details, let me pass on to Andrew.

這基本上就是您透過其他舉措所看到的效果，即利潤率的提高。但欲了解更多詳情，請容許我轉達給安德魯。

Thanks, Stephan. Mark, I think to summarize, so it's primarily operational productivity that's driving the sequential margin expansion. And we feel pretty good about our margin levels in the 19% range in the near term here. In terms of longer-term margin expansion opportunity, we've not established any targets at this time. We're really focused on short-term and margin resilience.

謝謝，史蒂芬。馬克，我認為總結一下，主要是營運生產力推動了利潤率的連續擴張。我們對近期 19% 左右的利潤率水準感到非常滿意。就長期利潤擴張機會而言，我們目前尚未設定任何目標。我們真正關注的是短期和利潤彈性。

We'll provide more clarity on sort of what the longer-term outlook looks like as we get into sort of the 26% guide period. But for now, we're focused on just margin resilience at the current level and sequential margin expansion quarter on quarter.

當我們進入 26% 的指導期時，我們將更清楚地了解長期前景。但目前，我們只關注當前水準的利潤率彈性以及逐季度的連續利潤率擴張。

That's helpful. My follow-up is also around EBIT margins and how mix may or may not that, you talked about diverging trends you're seeing in some of these end markets, industrial picking up. You said HVOR seen times of weakness. And you see those sorts of divergent trends by end markets, what might that mean, if anything, for EBIT margin? Is that a potential headwind or a tailwind from mix that investors should potentially expect?

這很有幫助。我的後續問題還涉及息稅前利潤率以及混合情況，您談到了在某些終端市場看到的不同趨勢，即工業回溫。您說 HVOR 也經歷過疲軟時期。您看到終端市場呈現這些不同的趨勢，這對息稅前利潤率意味著什麼？這是投資人應該期待的潛在逆風還是順風？

Yes. Good question, Mark. So mix definitely matters in our business. I think as we've highlighted before, our lowest margin business is our automotive business, our highest margin is our aerospace business, HVOR and Industrial are kind of in between. And as we look at the -- what we're seeing in the current quarter and Q3, we've seen softness in the HVOR business and strength in industrial.

是的。問得好，馬克。因此，混合對於我們的業務絕對很重要。我認為，正如我們之前強調的那樣，我們利潤率最低的業務是汽車業務，利潤率最高的是航空航天業務，HVOR 和工業業務介於兩者之間。當我們回顧本季和第三季的情況時，我們發現 HVOR 業務表現疲軟，而工業業務表現強勁。

And so we've basically been able to offset any mix headwind from the view or softness with the outgrowth that we're driving in industrial. And we feel good that the business mix kind of moving forward throughout the balance of the year will support the margin expansion that we've committed to.

因此，我們基本上能夠透過推動工業成長來抵消視野或疲軟帶來的任何混合逆風。我們很高興看到，全年業務組合的不斷發展將支持我們承諾的利潤率擴張。

Joe Giordano, TD Cowen.

喬·喬達諾（Joe Giordano），TD Cowen。

Stephan, as you've kind of gone through the portfolio now for a little bit longer, where do you think you stand on more product rationalization, SKU reduction that you need to do, scrubbing of backlog that you'd won kind of a long time ago that's been pushed out? Like where do you think you stand on those things?

史蒂芬，你現在已經對產品組合進行了一段時間的研究，你認為在產品合理化、SKU 減少以及清理很久以前贏得但被推遲的積壓訂單方面，你的立場是什麼？您認為您對這些事情持什麼立場？

Sorry, can you just repeat the question on the last one?

抱歉，您能重複最後一個問題嗎？

So I'm just curious on where you stand as you like evaluate the portfolio now that you've been here a little while, like how much more SKU reduction is necessary or small divestments and things like scrubbing of the backlog to see like how realistic delivery is on things that were won maybe a long time ago and when markets were different?

所以我只是好奇，既然您已經在這裡待了一段時間，那麼您現在對投資組合的評估立場是什麼，例如需要減少多少 SKU 或進行小規模的資產剝離，以及清理積壓訂單等，看看在很久以前和市場不同的時候，交付產品的現實情況如何？

Well, look, I think a lot of the SKU reduction or let's call it, portfolio cleansing has been done in the last year. So there's been significant work done by the team and around the interim CEO matter. And look, it's a continuous process. So I'm looking at all types of SKUs being in automotive, be it an HVOR but also industrial. And anything that we don't feel that doesn't fit to our portfolio at this point in time.

嗯，看，我認為很多 SKU 的減少，或者我們稱之為產品組合清理，已經在去年完成了。因此，團隊已經圍繞臨時執行長事宜做了大量工作。瞧，這是一個連續的過程。因此，我正在研究汽車領域的所有類型的 SKU，無論是 HVOR 還是工業。目前，我們認為任何不適合我們投資組合的東西。

We will cleanse of our overall SKUs. So it's a continuous process. It's not something that is finished after we've gone through all of them. It's something that we follow through month-for-month actually, yes. So nothing significant at this point in time, but something I'll keep a focus on it.

我們將清理我們的全部SKU。所以這是一個連續的過程。這並不是說我們完成所有事情之後就完成了。是的，這實際上是我們逐月進行的事情。所以目前還沒有什麼重大的事情，但我會繼續關注它。

And on the backlog, like the recoverability of stuff that you won a while ago?

關於積壓訂單，例如您之前贏得的東西的可恢復性？

Joe, so yes, I think you're probably referring to some of the EV wins and program wins from years back. mean as the market shifts on that, we work with our customers to make sure that we're securing offsets, whether it's new opportunity to quote on new business, whether it's kind of commercial recovery pricing discussions.

喬，是的，我想你可能指的是幾年前的一些電動車勝利和專案勝利。意思是，隨著市場的變化，我們與客戶合作，確保我們獲得補償，無論是新業務的報價機會，還是某種商業恢復定價討論。

So we factor all that in as we negotiate with our customers moving forward. But I think the driver there is pretty clear. It's at the time horizon of certain EV programs has moved to the right, and we're just focused on supporting the market as it is today.

因此，我們在與客戶談判時會考慮到所有這些因素。但我認為那裡的司機很清楚。某些電動車專案的時間範圍已經向右移動，我們只專注於支持當前的市場。

And then the follow-up, I know it's still early, but just anything incremental. Stephan, you can give us on the China positioning. I know this is a big priority of yours to evolve how Sensata is positioned in China with the local OEMs. So maybe any updates there?

然後是後續行動，我知道現在還為時過早，但只是一些漸進的事情。Stephan，您可以為我們介紹一下中國的定位嗎？我知道這是您的首要任務，即如何發展 Sensata 與中國本地 OEM 的定位。那麼那裡可能有什麼更新嗎？

Yes. Of course, I can. So look, I think generally, we need to say there's been quite an extreme shift from multinational to local OEMs. We see that the market is roughly at 70% local now. And -- we see that government incentives benefited 2024, and they basically continue to drive 2025. On the other hand, it's still encouraging, obviously, to see that multinational OEMs are continuing to make meaningful investments in China.

是的。當然可以。所以，我認為總體而言，我們需要說從跨國公司到本地 OEM 的轉變相當極端。我們發現，目前市場約有 70% 是本地市場。我們看到政府激勵措施使 2024 年受益，並且基本上將繼續推動 2025 年的發展。另一方面，看到跨國原始設備製造商繼續在中國進行有意義的投資，顯然仍然令人鼓舞。

So what does that mean for Sensata? I would say it's a return to outgrowth. So 90% of all the business of the year-to-date new business wins are now with top -- basically with the top five local OEMs and with leading so-called new energy vehicle players. And around that, if I break that down to more products to more product focus, a high concentration on high-voltage and powertrain-agnostic content.

那麼這對森薩塔來說意味著什麼？我想說，這是一種回歸成長。因此，今年迄今為止的所有新業務中 90% 都來自頂級企業——基本上是前五名本地原始設備製造商和領先的所謂新能源汽車企業。圍繞這一點，如果我將其分解為更多產品，並更多地關注產品，那麼高度集中於高壓和動力系統無關的內容。

So look, we basically expect modest outgrowth in the back half based on third-party forecasted production mix. And we're also pretty confident that it's going to be more consistent outgrowth in the beginning of 2026.

因此，根據第三方預測的生產組合，我們基本上預計下半年會出現適度成長。我們也非常有信心，到 2026 年初，它將實現更持續的成長。

Wamsi Mohan, Bank of America.

美國銀行的 Wamsi Mohan。

This is [Ashley] on the call for Wamsi. Just one question for me. We were wondering if you saw any pull forward of demand that impacted the 2Q time period, specifically in autos? Just any color you could give us here.

我是 [Ashley]，正在為 Wamsi 打電話。我只有一個問題。我們想知道您是否看到任何影響第二季的需求提前，特別是在汽車領域？只要您提供給我們任何顏色即可。

Sure. Happy to answer that. So the short answer is no. I think a few dynamics at play here. So in the second quarter, the early part of the quarter, the supply chain was coming up the curve on USMCA compliance, particularly in April. And so I think what we saw there was the OEMs consuming inventory earlier in the quarter and then replenishing it in the back half of the quarter.

當然。很高興回答這個問題。所以簡短的回答是「不」。我認為這裡有一些動態因素在起作用。因此，在第二季度，即本季初期，供應鏈在 USMCA 合規性方面呈現上升趨勢，尤其是在 4 月。因此我認為我們看到的是 OEM 在本季度早些時候消耗庫存，然後在本季後半段補充庫存。

But effectively, Q2 was basically normal. And then looking ahead to the third quarter, our order book is pretty solid and filled to where we would expect it to be relative to where we guided the quarter. And certainly, as we talk to our channel partners on the industrial business and other end markets, we're not seeing any pull ahead in our business.

但實際上，第二季基本上正常。展望第三季度，我們的訂單量相當穩健，並且達到了我們預期的水平（相對於我們對本季度的預測）。當然，當我們與工業業務和其他終端市場的通路合作夥伴交談時，我們並沒有看到我們的業務有任何成長。

I mean, that may be more of a dynamic further down the supply chain, but where we said, it's pretty much business as usual in terms of order book correlation to production.

我的意思是，這可能更像是供應鏈下游的一個動態，但正如我們所說，就訂單與生產的相關性而言，這基本上一切如常。

Kosta Tasoulis, Wells Fargo.

富國銀行的科斯塔‧塔蘇利斯 (Kosta Tasoulis)。

Andrew, congratulations. My first question is for you. So you've been at (inaudible), think, for a majority of all your professional career. You've been there a while you've probably seen a lot of the maybe archaic processes that have been in place as you move up the ranks. But now you're literally a chief decision maker. So I just want to see like what are your -- what are some of the things you're looking to improve within Sensata?

安德魯，恭喜你。我的第一個問題是問你的。所以，想想看，在你的職業生涯的大部分時間裡，你都處於（聽不清楚）狀態。您在那裡待了一段時間，隨著職位的提升，您可能已經看到許多可能已經存在的過時流程。但現在你其實是一位首席決策者。所以我只是想看看您希望在 Sensata 內部改進哪些方面？

Thanks, Kosta, and thanks for the question. My primary focus here is on enabling the transformation that Stephan has outlined here in his key pillars. I think we've got the right priorities to drive performance. There's a lot of work behind the scenes that goes into enabling these key pillars. As Stephan mentioned, there's a bunch of initiatives that underpin the operational excellence pillar.

謝謝，科斯塔，謝謝你的提問。我在這裡的主要關注點是實現史蒂芬在他的關鍵支柱中概述的轉變。我認為我們已經確定了正確的優先事項來提高績效。為了實現這些關鍵支柱，幕後需要做大量工作。正如史蒂芬所提到的，有許多舉措支撐著卓越營運支柱。

And a lot of that comes down to making sure that we've got the right analytics and the right data to drive the right decision making. And so that's part of the role of the finance org from a tactical standpoint. And so certainly focused on enabling that. And then the other piece around capital allocation and growth, ensuring that we're applying the right rigor to our growth investments. and ensuring that we're allocating capital in a way that creates shareholder returns.

其中很大一部分歸結為確保我們擁有正確的分析和正確的數據來推動正確的決策。從戰術角度來看，這是財務組織的角色的一部分。因此我們當然致力於實現這一點。然後另一部分是關於資本配置和成長，確保我們對成長投資採取正確的嚴謹態度，並確保我們以創造股東回報的方式分配資本。

So I think I'd just reiterate the pillars that Stephan has outlined, and I'm fully on board with enabling those.

所以我想我只是重申一下史蒂芬所概述的支柱，我完全同意實現這些支柱。

Great. I'll dig in on free cash flow a bit. How should we think about like cost optimistic cost optimization efforts impacting your inventories, right? So it sounds like part of the strategy is like standardization, right? So are you bringing in like a single component across your products that reduce cost and ability and therefore, you got to keep a high stock of that component and that kind of reduces the working capital tailwind?

偉大的。我將深入研究自由現金流。我們應該如何看待成本樂觀的成本優化工作對您的庫存的影響，對嗎？所以聽起來戰略的一部分就像是標準化，對嗎？那麼，您是否會在產品中引入單一組件來降低成本和能力，因此，您必須保持該組件的高庫存，從而減少營運資金的順風？

I think as we think about inventory, it's two levers. So certainly, focusing on productivity and working unit cost reduction to drive inventory costs down and drive product cost down, ultimately frees up more working capital. The other piece is just the amount of inventory that we carry.

我認為當我們考慮庫存時，它有兩個槓桿。因此，當然，專注於提高生產力和降低工作單位成本以降低庫存成本和產品成本，最終可以釋放更多的營運資金。另一部分是我們持有的庫存數量。

And one of the things we talked about on past calls about a potential driver for that is better integration of our supply chain planning and demand planning and making sure that we're using our systems and the data that's available in the end market to optimize our lead times, optimize our demand signal and optimize our production planning, all of that culminates in an inventory reduction opportunity. And that I would categorize as sort of a go-forward lever to continue to drive higher levels of free cash flow conversion.

我們在過去的電話會議上談到的一個潛在驅動因素是更好地整合我們的供應鏈計劃和需求計劃，並確保我們使用我們的系統和終端市場可用的數據來優化我們的交貨時間，優化我們的需求信號和優化我們的生產計劃，所有這些最終都會帶來減少庫存的機會。我將其歸類為前進的槓桿，以繼續推動更高水準的自由現金流轉換。

And if I may add, Andrew, what we still -- what we do is something I mentioned initially is that we're benchmarking our inventory levels planned for plant on the one hand, benchmarking plants amongst each other with similar products to try and figure out who is the best inventory level and what can other plants strive for. But then on the other hand, is also looking outside of Sensata and looking at who is the best in class in inventory levels and measuring ourselves against them and redefining our measures and to drive inventory levels down.

安德魯，如果我可以補充一點，我們仍然在做的事情是我最初提到的，一方面，我們正在對工廠計劃的庫存水平進行基準測試，另一方面，對具有類似產品的工廠進行基準測試，以試圖找出誰的庫存水平最好，以及其他工廠可以努力實現的目標。但另一方面，我們也在關注森薩塔之外，看看誰的庫存水準是同類中最好的，並與他們進行衡量，重新定義我們的措施，降低庫存水準。

Joe Spak, UBS.

瑞銀的喬·斯帕克。

I actually want to pick up on the free cash flow theme and how you're thinking about it for the second half. I think I heard a 80% sort of conversion, I'm not sure if that's a long-term target midterm target. And then also just on CapEx and maybe this is obviously part of free cash flow. It looks like you're at 3% of sales in the first half. I think that's below historical, but maybe this is sort of the new normal for Sensata. So maybe just some help there on how you're thinking about that.

我實際上想談談自由現金流主題以及您對下半年的看法。我想我聽到的是 80% 左右的轉換率，我不確定這是否是長期目標或中期目標。然後也僅就資本支出而言，這顯然是自由現金流的一部分。看起來你們上半年的銷售額達到 3%了。我認為這低於歷史水平，但也許這對 Sensata 來說是一種新常態。所以也許這只是對您如何思考這個問題的一些幫助。

Thanks for the question. Look, generally, we've set ourselves an ambition to strive for a cash conversion rate at 80% or more.

謝謝你的提問。總的來說，我們的目標是爭取現金轉換率達到 80% 或更高。

Yes. And I would just add to that. So a good point on the lower level of CapEx in the second quarter. Some of the dynamic there was candidly just as we were looking at uncertainty in the end markets, and we saw production forecasts dropped dramatically early in Q2 following the trade policy tariff rate escalations. We throttled back some of our CapEx to respond to potentially lower revenue levels. Obviously, that didn't materialize. We saw that demand get restored.

是的。我只想補充一點。因此，第二季的資本支出處於較低水平，這是一個好兆頭。坦白說，就在我們看到終端市場的不確定性時，我們看到貿易政策關稅稅率上調後，第二季初產量預測急劇下降。我們削減了部分資本支出，以應對可能下降的收入水準。顯然，這並沒有實現。我們看到需求已經恢復。

And so we'd expect an uptick in CapEx in the back half of the year. That said, I expect to be able to maintain pretty high levels of free cash flow conversion going forward and 80% really is the floor. We have plenty of levers available to us to maintain reasonably solid cash flow conversion here moving forward. Inventory hasn't come down dramatically yet. There's still opportunity there.

因此，我們預計今年下半年資本支出將會上升。話雖如此，我預計未來能夠保持相當高的自由現金流轉換水平，而 80% 確實是最低水平。我們擁有足夠的槓桿來維持未來相當穩健的現金流轉換。庫存尚未大幅下降。那裡仍有機會。

While it may not be as low as it was in the second quarter, we still have the opportunity to underspend or spend at a level consistent with depreciation. And so I don't see that as a meaningful headwind.

雖然它可能不像第二季那麼低，但我們仍然有機會減少支出或以與貶值一致的水平進行支出。因此，我並不認為這是一個重大的不利因素。

Okay. So even with depreciation it is a good guide. Is that -- and I guess, like versus I think in the past, it's sort of been like a 4% level, do you think going forward, it can be a little bit below that?

好的。因此，即使存在折舊，它也是一個很好的指導。這是 — — 我想，與過去相比，它有點像 4% 的水平，您認為未來它會略低於這個水平嗎？

I think 4% is probably a good proxy for what sort of normalized run rate CapEx looks like. It can vary in any given quarter. And certainly, we adjust it up or down based on kind of our view on market certainty. The investment opportunities ahead of us, whether those are sort of near-term automation opportunities to drive productivity or longer-term opportunities around growth investment. We try to keep that all in balance.

我認為 4% 可能是衡量正常化運作率資本支出的一個很好的指標。它可以在任意一個季度內發生變化。當然，我們會根據對市場確定性的看法來調高或調低它。我們面前的投資機會，無論是推動生產力發展的短期自動化機會，或是圍繞成長投資的長期機會。我們盡力保持一切平衡。

Okay. And then just on the deleveraging comment. I guess I want to confirm how you're really thinking about this because you mentioned sort of net leverage going high, which, to me, sort of implies like the EBIT that's really coming from higher EBITDA? Or are you also planning to say sort of gross debt down? And are there any sort of leverage targets? Or how should we think about minimum cash just so we understand how investors can think about what's available for dividend, share repurchase or debt repayment?

好的。然後是關於去槓桿的評論。我想確認一下您對此的真實想法，因為您提到了淨槓桿率上升，對我來說，這是否意味著 EBIT 實際上來自於更高的 EBITDA？或者您還計劃降低總債務？是否存在某種槓桿目標？或者我們應該如何考慮最低現金，以便我們了解投資者如何考慮可用於股利、股票回購或債務償還的資金？

Yes. In the short term, we'll look to reduce net leverage by accumulating cash on the balance sheet. That's just a function of where our debt maturities sit and what the current interest rate environment looks like. We don't have any debt maturities until 2029. That doesn't mean that we're going to wait until 2029 to address gross debt. There will be opportunities here in the coming quarters to potentially take some action there.

是的。短期內，我們將尋求透過在資產負債表上累積現金來降低淨槓桿率。這只是取決於我們的債務到期情況以及當前利率環境。直到 2029 年我們才有債務到期。這並不意味著我們要等到 2029 年才解決總債務問題。未來幾個季度，這裡將有機會採取一些行動。

But in the immediate term, our focus is going to be on accumulating cash on the balance sheet. And then, of course, we still have a share repurchase program. We didn't execute Q2 at the same level we did in Q1, but we'll still maintain the flexibility to opportunistically repurchase shares as we see fit and keep that in balance with our net leverage targets. Certainly, we'd like to be below 3 times levered in the near term and moving towards 2.5 times relatively soon.

但就短期而言，我們的重點是累積資產負債表上的現金。當然，我們仍然有股票回購計畫。我們第二季度的執行水平不如第一季度，但我們仍將保持靈活性，在我們認為合適的情況下適時回購股票，並與我們的淨槓桿目標保持平衡。當然，我們希望短期內槓桿率低於 3 倍，並相對快速地達到 2.5 倍。

Shreyas Patil, Wolfe Research.

Shreyas Patil，沃爾夫研究公司。

Maybe just coming back to the China auto piece. Can you just help level set how big this is for you today? And just to clarify, how much of an uplift could we see from the new launches that you mentioned, Stephan, that are starting later this year. And then just to put a finer point on it, how do you see the competitive landscape in China, specifically on the auto business?

也許只是回到中國汽車這個話題。您能否幫助確定這對您來說今天有多大？只是為了澄清一下，史蒂芬，您提到的今年稍後推出的新產品能為我們帶來多大的提升？然後更詳細地講，您如何看待中國的競爭格局，特別是汽車產業的競爭格局？

In the past, the sense was that the mid- to low end of the China market was very difficult to penetrate either given vertical integration or price competition among some of the local suppliers. I'm just curious if that is still how you see it? Or have there been changes in the market.

過去，人們認為，由於垂直整合或一些本地供應商之間的價格競爭，中國中低端市場很難滲透。我只是好奇您是否仍然這麼認為？或者市場發生了變化。

Look, it's pretty much the same. It's obviously a very competitive region, a very competitive country. As you know, there is -- amongst the OEMs, there's price was going on. Which obviously trickles as an effect down to the Tier 1 level. And that leads us to, obviously, us being extremely focused on cost. That's something that we have reinitiated sites a strong history of being very cost focused is something that we've been focusing even more in China.

看，幾乎一模一樣。顯然這是一個競爭非常激烈的地區，一個競爭非常激烈的國家。如您所知，在 OEM 中，價格正在改變。這顯然會對其產生影響，直至達到第 1 層水平。顯然，這導致我們極度關注成本。這是我們重新啟動的一個項目，我們在中國更加重視成本，這是我們長期以來非常注重的事情。

And following through on that in a very stringent way to stay competitive within the market. So what we do is we take our products, we go back into the design and we take out as much cost as we can in order to be competitive. And on the other hand, some of the products, as I mentioned in my earnings in my script, just early on, come with certain level of technical differentiation, take the divest systematic, and that allows us to enter the market first and gain market share in comparison to others that do not have these functionalities yet. So that's how we tackle the competitiveness in the market.

並以非常嚴格的方式執行這項規定，以保持市場競爭力。因此，我們所做的就是拿出我們的產品，重新進行設計，並盡可能地降低成本，以保持競爭力。另一方面，正如我在腳本收益中提到的那樣，一些產品在早期就具有一定程度的技術差異化，採用系統性剝離，這使我們能夠首先進入市場並獲得市場份額，而其他尚未具備這些功能的產品則沒有。這就是我們應對市場競爭的方法。

Again, it's a very important market for us as you can imagine that some of the Chinese OEMs that are hungry for market growth are stepping outside of the country and trying to gain market share in Europe, in Southeast Asia, [Vietnam], Thailand in Malaysia and so on. So a high dynamic there, and that makes it interesting for us as a growth opportunity because if we went with the with the right players like we have.

再說一次，這對我們來說是一個非常重要的市場，正如你可以想像的那樣，一些渴望市場成長的中國原始設備製造商正在走出國門，試圖在歐洲、東南亞、[越南]、泰國、馬來西亞等地獲得市場份額。因此，那裡的動態很高，這對我們來說是一個有趣的成長機會，因為如果我們與像我們這樣的合適的球員一起去的話。

I mentioned that we won or 90% of our year-to-date new business with the top five local OEMs. So it's really with leading so-called new energy vehicle players. And why do I state that because those are the players that will most probably also show growth outside of China, and that what gives us other the opportunity to benefit from that additional growth in, for example, Southeast Asia or in Europe or wherever else they're growing.

我提到，今年迄今為止，我們與前五名本地原始設備製造商達成的新業務佔 90%。因此，這確實與所謂的領先新能源汽車廠商有關。我為什麼這麼說呢？因為這些參與者很可能也會在中國以外地區成長，這也讓我們有機會從東南亞、歐洲或其他地區的額外成長中獲益。

And, just to give you clarity on the numbers. So the China market is about 1/4 of our automotive business, so about 12% or so of overall Sensata's revenue, obviously varying depending on business mix within any given quarter. The growth opportunities that we've highlighted would be sufficient to return us to kind of the low to mid-single digits outgrowth that we've targeted in our auto business. So that will give you a little bit of context on the size. We're not talking about specific platforms or programs yet, but that's sort of the magnitude.

只是為了讓您清楚地了解這些數字。因此，中國市場約占我們汽車業務的四分之一，也就是佔 Sensata 整體收入的 12% 左右，顯然會根據特定季度內的業務組合而有所不同。我們所強調的成長機會足以讓我們的汽車業務恢復到我們所設定的低至中等個位數的成長目標。這樣您就可以對尺寸有一點了解。我們還沒有談論具體的平台或程序，但這就是規模。

Okay. That's helpful. And then maybe pivoting to HBO you talked about meaningful weakness in the end market there. Curious how you're thinking about outgrowth in that business, both near term and long term. In the past, you've talked about 3 to 6 points of outgrowth as a target for auto. I'm wondering if there's a similar target for HVOR?

好的。這很有幫助。然後也許轉向 HBO，您談到了那裡的終端市場的明顯疲軟。好奇您如何看待該業務的短期和長期成長。過去，您曾談到 3 到 6 個點的成長是汽車的目標。我想知道 HVOR 是否有類似的目標？

Well, Shreya. Let me expand it. Let me first start with the end market with the end markets, and let me give you our perspective, and then I'll give you an outlook on how business is developing for Sensata. So on the end markets, for on-road trucks, we see that obviously for the entire year of 2025, production is down. And you need to look at that from a regional perspective.

好吧，Shreya。讓我來擴充一下。首先，讓我從終端市場開始，先介紹我們的觀點，然後我會向大家介紹 Sensata 的業務發展。因此，在終端市場，對於公路卡車，我們明顯看到 2025 年全年的產量下降。你需要從區域角度來看這個問題。

So taking North America, onroad trucks we projected really quite a strong downturn of roughly 24% year over year for this financial year of 25%. And in Europe, on-road trucks were soft in the first half, which is roughly 6% down, but projected to be up in the second half of this year. And looking at agriculture and construction, so it's expected to be down in a high single-digit percentage.

因此，就北美而言，我們預計公路卡車本財年的銷量將比去年同期大幅下降約 24%，至 25%。在歐洲，今年上半年公路卡車銷量疲軟，下降了約 6%，但預計下半年將回升。再看看農業和建築業，預計降幅將達到高個位數百分比。

And then the second half more positive than the first half. And then if you look at what are the actual slowdown drivers that are pushing that. So for On-Road, we're saying in North America, there's been no buyer on P27 and general macro uncertainty, and operators are not renewing their fleets, and that's what we're seeing in our numbers.

下半場比上半場更積極。然後，如果你看看導致這現象的實際放緩因素是什麼。因此，對於公路車輛，我們認為在北美，P27 沒有買家，而且整體宏觀存在不確定性，營運商也沒有更新他們的車隊，這就是我們在數據中看到的情況。

In Europe, we saw a soft quarter two on macro uncertainty, but we see that Q3 is pretty much normalizing on a year-over-year basis.

在歐洲，由於宏觀不確定性，我們看到第二季經濟表現疲軟，但我們看到第三季經濟年比基本恢復正常。

Now what does that mean for Sensata's business or from a business perspective? We undergrew the market in the first half -- and the reason for that is as Western production was down, while tile production was up -- our content is generally higher on Western OEMs. But we expect -- and we actually expect this to continue in our HR segment through the balance of the year given the softness that we've seen in this Western production forecast.

那麼這對 Sensata 的業務或從商業角度來說意味著什麼？我們在上半年的市場成長不足——原因是西方產量下降，而瓷磚產量上升——我們對西方原始設備製造商的內容通常較高。但我們預計——考慮到我們在西方生產預測中看到的疲軟態勢，我們實際上預計這種情況將在今年餘下時間裡在我們的人力資源部門持續下去。

Christopher Glynn, Oppenheimer.

克里斯托弗·格林，奧本海默。

Just give a little orienting question to start on the guide. Third quarter is down about $30 million sequentially at the midpoint. Is that vast majority impact that performance sensing?

只需提出一個小的定向問題即可開始指南。第三季中期季減約 3,000 萬美元。這是否對性能感知產生了絕大多數影響？

Yes, that's right. We see auto production down about 1 million units sequentially. And then we see some softness in the off-road space accelerating in the third quarter, so all performance sensing.

是的，沒錯。我們發現汽車產量較上季下降約 100 萬輛。然後，我們看到越野領域的一些疲軟在第三季加速，因此所有的性能感知都在增強。

Okay. Great. And then just a couple content and outgrowth dynamics that might be in play. Curious how you see Europe phasing with some of the relaxation of the mandates for EVs, if that's a CPV mix shift that progresses as well in European auto through the back half of the year?

好的。偉大的。然後只是一些可能發揮作用的內容和結果動態。您是否好奇，歐洲將如何逐步放寬對電動車的限制，這是否意味著今年下半年歐洲汽車市場的 CPV 組合也將轉變？

And then you've talked a lot about the gains with local OEMs in China and starting to lap somewhat the share loss from multinationals. Have you indicated a time frame when our growth crossover might be expected for China?

然後您又談了很多關於中國本土原始設備製造商的收益以及開始彌補跨國公司份額損失的事情。您是否曾指出我們在中國的成長預期交叉的時間範圍？

Sure. Let me start with Europe. So the relaxation of the mandates may ultimately lead to a slowdown in EV production in Europe. If it does, that would be a content tailwind for us. We haven't seen that yet. We've seen EV production continue to grow in the first half of the year in Europe, but that is -- that was a dynamic that played out last year for us.

當然。我先從歐洲說起。因此，放寬強制規定最終可能會導致歐洲電動車生產放緩。如果確實如此，那對我們來說將是一個內容順風。我們還沒有看到這一點。我們看到歐洲上半年的電動車產量持續成長，但這是去年我們遇到的動態。

And so if you see that mix shift again, that would be a potential outgrowth driver, just a reminder there, we're about half the content per vehicle on an EV in Europe compared to as we move to next gens, we get above parity there. But on the current gen, that's where the content mix sits. And then on the China question.

因此，如果您再次看到這種混合變化，那將成為潛在的成長動力，需要提醒的是，我們在歐洲的電動車上每輛車的內容大約只有後者的一半，而當我們轉向下一代時，我們就會超過這一水平。但在當前這一代，內容組合就處於這一狀態。然後是關於中國問題。

Okay. Let me ask something about EV, so basically to add that, Christopher, on the content side, even if growth is not as strong as predicted due to softening regulations. As we know, for example, in Europe, the combustion in Japan might be softened.

好的。讓我問一些關於 EV 的問題，基本上就是補充一點，克里斯托弗，在內容方面，即使由於監管放鬆，增長並不像預期的那麼強勁。例如，我們知道，在歐洲，日本的燃燒可能會變得軟化。

Then we'd have probably a shift towards hybrids and mainly plug-in hybrids in the market. And Sensata has a broad portfolio mix, which we could serve as well as we can also obviously serve the EV market. So it's not a down for us. It's actually as beneficial for us.

那麼我們可能會轉向混合動力汽車，主要是插電式混合動力汽車。Sensata 擁有廣泛的產品組合，我們可以為其提供服務，顯然也可以為電動車市場提供服務。所以這對我們來說不算什麼損失。這實際上對我們來說同樣有益。

And then Chris, I think your question on China is when the wins start to show up in outgrowth. So there's really two dynamics here around outgrowth in China. The first is the rapid share shift that we saw last year were multinationals lost share to locals, largely played out in the back half of last year. So we'll start to lap those comps into the third quarter.

然後克里斯，我認為你關於中國的問題是勝利何時開始在成長中顯現出來。因此，中國經濟成長實際上存在兩種動力。首先，我們看到去年市佔率的快速轉移，跨國公司的市佔率被本土公司搶佔，這主要發生在去年下半年。因此，我們將在第三季開始將這些比較結果納入考量。

And so that outgrowth headwind starts to go away here in the back half of '25, and we'd expect to perform more or less in line with market. in China in the back half. And then as these new businesses launch, which have design cycles and lead times that are less than a year that will start to show up in revenue late in '25 and early into '26 and set the foundation for outgrowth in China in 2026.

因此，2025 年下半年，這種成長逆風將開始消退，我們預計下半年的表現將與中國市場基本一致。隨著這些新業務的推出，其設計週期和交付週期不到一年，將在 2025 年末和 2026 年初開始體現在收入中，並為 2026 年在中國的成長奠定基礎。

Samik Chatterjee, JPMorgan.

摩根大通的 Samik Chatterjee。

Andrew, congrats on the new role as well. Maybe if I can sort of go back to the China renewed pace of wins that you're discussing here. And thanks for all the color till now, but maybe if you can sort of discuss how you're thinking about content per vehicle where in the -- as you mentioned, the content per vehicle there can sometimes be lower than the Western OEMs.

安德魯，也祝賀你獲得新的角色。也許我可以回到您在這裡討論的中國重新取得勝利的步伐。感謝您到目前為止提供的所有信息，但也許您可以討論一下您對每輛車的內容的看法——正如您所提到的，那裡每輛車的內容有時會低於西方的原始設備製造商。

But in the new sort of win activity that you're seeing on that front? What are you finding out in relation to content per vehicle opportunity? And do you see a road map here as you continue to drive those wins? Is there a sort of more compression between the difference between the content on Western OEMs versus Chinese local OEMs on that front? And I have a quick follow-up for that.

但是您在這方面看到了新的勝利活動嗎？您對每輛車的內容機會有何發現？在您繼續推動這些勝利的過程中，您是否看到了路線圖？在這方面，西方 OEM 和中國本土 OEM 之間的內容差異是否會進一步縮小？我對此有一個快速的跟進。

(inaudible), you are setting to the point. So basically, as I mentioned in one of the previous calls, we've shifted our focus in China. So it's very important -- of course, we want to win with the winners in China, and we want to win with the right new energy vehicle producers in China. And that's what we've been doing these last couple of months. And that has enabled us to win significant new business in the Chinese market. From a content point of view, yes.

（聽不清楚），您說的很對。所以基本上，正如我在之前的一次電話會議中提到的那樣，我們已將重點轉移到中國。所以這非常重要——當然，我們希望與中國的贏家一起獲勝，我們希望與中國合適的新能源汽車生產商一起獲勝。這就是我們過去幾個月一直在做的事情。這使我們在中國市場贏得了重要的新業務。從內容角度來看，是的。

For content in China, what really matters for us is you can look at it, whether it's EV versus ICE or you can look at it from a perspective of locals versus multinationals. Either way, it's about the same, which is that our content historically on EVs or on multinationals was much lower -- sorry, EVs or locals was much lower than with multinationals. And that's what we're starting to change.

對於中國的內容，對我們來說真正重要的是，你可以從電動車與內燃機的角度來看待它，或者你可以從當地公司與跨國公司的角度來看待它。無論如何，情況都差不多，也就是說，我們歷史上關於電動車或跨國公司的內容要低得多——抱歉，電動車或本地汽車的內容比跨國公司的內容要低得多。這就是我們開始改變的事情。

So these new wins will bring that content imbalance up to parity such that we don't have a headwind from the shift to local players as they continue to grow in the market.

因此，這些新的勝利將使內容不平衡達到平衡，這樣我們就不會因為轉向本地參與者而在市場上繼續增長而受到阻力。

Okay. Helpful. And just in terms of -- Stephan, your earlier comments about the portfolio, more curious about how you're thinking about where the incremental R&D dollars go, particularly if we do see a shift in the automotive industry towards more hybrids relative to EVs, that is beneficial for your content overall. How you're thinking about where the incremental R&D dollars are being dedicated in terms of platform strategy from your end?

好的。很有幫助。就斯蒂芬 (Stephan) 而言，您之前對投資組合的評論，我更好奇您如何看待增量研發資金的流向，特別是如果我們確實看到汽車行業轉向混合動力汽車而非電動汽車，這對您的整體內容是有利的。從您的角度來看，您如何考慮將增量研發資金用於平台策略的哪些方面？

Yes. So we're obviously being very selective on where we put our dollars in R&D. And one good example is to your question -- to your earlier question, that's basically placing the dollars into applications for Chinese new energy vehicles. So that's the one side of it. That's what we're focusing on. On the other hand, we're putting more and more of our R&D dollars in the industrial area.

是的。因此，我們在選擇研發資金投入方向時顯然非常謹慎。一個很好的例子就是針對您先前的問題，基本上就是把資金投入中國新能源汽車的應用。這就是它的一個面向。這就是我們所關注的。另一方面，我們正將越來越多的研發資金投入工業領域。

We've got our gas leak detection products. and A3. We're just ramping up. Some of them are still in the development phase, and we're really thinking about certain follow-up versions, so improvements on these products. So we put a certain level of R&D in these products. And then on the Aerospace side, there's also significant growth opportunities there. And selectively, we've been putting more and more R&D dollars in that area as well, so that we can tap that growth in the market that we see at least for the future.

我們有氣體洩漏檢測產品。和 A3。我們正在加速發展。其中一些仍處於開發階段，我們正在考慮某些後續版本，從而對這些產品進行改進。因此我們在這些產品上投入了一定程度的研發。在航空航天方面，也存在著巨大的成長機會。並且，我們也選擇性地在該領域投入了越來越多的研發資金，以便我們能夠至少在未來挖掘我們所看到的市場成長。

William Stein, Truist Securities.

威廉·斯坦（William Stein），Truist Securities。

First, Andrew, congrats on the promotion. Stephan, I think -- and Stephan, I think analysts and investors have sort of been waiting for a new mantra to understand the long-term growth potential either for free cash flow per share or earnings per share. And I think what you're communicating, I just -- it's sort of a clarifying question is that your priorities are to maintain the 19% operating margin sort of bogey stabilize it but not necessarily have such a hard focus on expanding it.

首先，安德魯，恭喜你升職。史蒂芬，我認為——史蒂芬，我認為分析師和投資者一直在等待一種新的口號來了解每股自由現金流或每股收益的長期成長潛力。我認為您所傳達的訊息只是——這是一個需要澄清的問題是，您的首要任務是保持 19% 的營業利潤率，穩定它，但不一定如此專注於擴大它。

Second is to improve free cash flow conversion and third, to decrease leverage. Do we have that right? And is there -- and maybe the connection to this is, I've heard a couple of analysts refer to outgrowth, but I think those are targets that were set by prior managers of this business, do you have an outgrowth target or mantra that you want to guide us towards for the long term?

第二是提高自由現金流轉換率，第三是降低槓桿。我們有這個權利嗎？是否存在——也許與此相關的是，我聽到一些分析師提到了增長，但我認為這些是該業務的前任經理設定的目標，您是否有一個想要指導我們長期實現的增長目標或口號？

So thanks for the question, and let me reiterate and bring some charges more clarity into that. So first of all, again, we're going through an entire transformation. And by the way, this transformation is working for us. And we've also implemented a lot more focus and rigor in our organization. And like I've said now, we're (inaudible) benchmarking, we're working on consistency and we're working on topics like standardization. And we consistently and proactively improving our operations.

感謝您的提問，讓我重申一下，並更清楚地解釋一些指控。首先，我們再次經歷一場徹底的轉型。順便說一句，這種轉變對我們很有幫助。我們的組織也變得更加專注和嚴謹。就像我現在所說的那樣，我們正在（聽不清楚）進行基準測試，我們正在致力於一致性，我們正在研究標準化等主題。我們不斷積極改進我們的營運。

So we're working on an icing free cash flow -- and then we're setting ourselves up like the discussion around China for growth in the future. And let me not be more specific. What does that mean in numbers? So to be precise, what we said is -- and Andrew actually mentioned it's the floor of 80% cash conversion rate or more. So that is basically the bottom end of it. the floor of 19% margin or more.

因此，我們正在努力實現自由現金流——然後，我們正在為未來的中國成長做好準備。我不必說得更具體。從數字上看，這意味著什麼？所以準確地說，我們說的是——安德魯實際上提到了現金轉換率的底線是 80% 或更高。所以這基本上就是它的底線，即利潤率的下限為 19% 或更高。

So as you can see in Q3 and in Q4 of this year, we're looking at expanding margins by 20 basis points. And then we also said -- so there is a margin expansion included in that -- to be precise on your question. And then we also said, it's important that Sensata gets back to an organic growth rate by winning business in the market by winning business in automotive with the right players that we're back on track in HVOR that we're making progress in industrial and in the aerospace area.

因此，正如您在今年第三季和第四季所看到的，我們預計利潤率將擴大 20 個基點。然後我們還說 - 因此其中包括利潤擴張 - 準確地回答您的問題。然後我們還說，重要的是，Sensata 透過在市場上贏得業務，透過與合適的參與者一起贏得汽車業務，恢復有機成長率，使我們在 HVOR 上重回正軌，並在工業和航空航天領域取得進展。

And overall, we said, okay, let's target a growth rate, an organic growth rate of somewhere between to 4%. And that's sort of the kind of the frame that I've given the company that we're focusing on now. And that is the partner for the next 12 to 18 months, and that's what we're focusing on, and we'll see where that takes us.

總的來說，我們說，好吧，讓我們將成長率作為目標，有機成長率在 4% 左右。這就是我為公司提供的我們現在關注的框架。這就是未來 12 到 18 個月的合作夥伴，也是我們關注的重點，我們將拭目以待這將帶給我們什麼。

Robert Jamieson, Vertical Research.

羅伯特·傑米森（Robert Jamieson），垂直研究。

Stephan, I appreciate your color that you've provided over the last few conference calls on your strategic initiatives. But I want to ask about the global sales team. Having spent some time with them, have you seen anything in their process that needed to be changed to enable them to more effectively target the right types of customers in the right regions that you've spoken about? I'm just curious if anything has been implemented there that's driven the year-to-date wins you mentioned in China with the locals and then also in Japan year to date.

史蒂芬，我很欣賞你在過去幾次電話會議中就你的策略舉措所提供的見解。但我想問一下全球銷售團隊的狀況。與他們合作了一段時間後，您是否發現他們的流程中需要進行任何改變，以便他們能夠更有效地瞄準您提到的正確地區的正確類型的客戶？我只是好奇那裡是否已經實施了什麼措施，推動了您提到的今年迄今為止在中國當地取得的成功，以及今年迄今為止在日本的成功。

Can you just repeat the first sentence of your question? I didn't hear it. It was a bit not clear for me.

你能重複問題的第一句話嗎？我沒聽見。對我來說這有點不清楚。

It's just about the global sales team and just having in like has anything been implemented to make them more effective in terms of targeting the key regions that you mentioned, like winning with the right customers, et cetera.

這只是關於全球銷售團隊的問題，就像已經實施了任何措施來使他們更有效地瞄準您提到的關鍵區域，例如贏得合適的客戶等等。

Yes, we have -- look, we've entirely changed the focus. So take the electrification market and the opportunities that are emerging within this market, and they differ very much per region. So I think it's very important to be extremely selective when choosing who you want to grow with. This is really important because as we know, unfortunately, not everybody is growing in the market.

是的，我們已經——你看，我們已經完全改變了焦點。因此，就電氣化市場及其中出現的機會而言，每個地區的差異很大。因此，我認為在選擇與你一起成長的人時，極度謹慎地選擇是十分重要的。這確實很重要，因為不幸的是，我們知道，並不是每個人都在市場上成長。

And with some of them actually you could face a potential risk, especially in China, we know that there is a consolidation going on in the market or an accelerated consolidation amongst. So yes, the team in China is very much focused, not -- if I may say, the more blunt way, we're not running after every business. but trying to choose very selectively the right customers that we believe are going to be future strong outgrowers in the Chinese market.

實際上，其中一些可能會面臨潛在風險，尤其是在中國，我們知道市場正在進行整合或加速整合。所以是的，我們的中國團隊非常專注，更直白地說，我們並不是追逐每一項業務，而是試圖精心挑選那些我們認為未來將成為中國市場強勁成長者的正確客戶。

And that's been challenging. And it's difficult to obviously choose the right customers, but we have a good level, we've built up, and that's also a change of good level of intelligence around that and again, being very selective. And obviously, let me explain a bit more on China is not just predicting the -- or trying to predict the consolidation game in China, but it's also trying to understand who which of these future customers are going to grow outside of China.

這很有挑戰性。顯然，選擇合適的客戶很困難，但我們已經達到了良好的水平，這也是圍繞這一點的良好情報水平的變化，而且我們非常有選擇性。顯然，讓我進一步解釋中國的情況，這不僅僅是預測——或者試圖預測中國的整合遊戲，而且還試圖了解哪些未來客戶將在中國以外成長。

And as you probably know, there's a huge dynamic out there. So a lot of the big customers are entering European countries, they're entering Southeast Asia and they're hungry for growth. And so for us, as a team, as a sales team, it's very important that we try and determine who are going to be the winners outside of China so that we can grow with them when we win business with them. So it's a different type of type of focus.

您可能已經知道，那裡存在著巨大的動態。因此，許多大客戶正在進入歐洲國家，進入東南亞，他們渴望成長。因此，對我們來說，作為一個團隊，作為一個銷售團隊，嘗試確定誰將成為中國以外的贏家非常重要，這樣當我們贏得他們的業務時，我們就可以與他們一起成長。所以這是一種不同類型的焦點。

And then again, in the mix of the applications, so around hybrid applications around combustion engine applications. I think we've basically broadened the scope a bit more. So we said, look, there's also very good opportunities around the combustion engine applications that we still go for. We have the assets, we have the products, and we'll also try and win in that sector.

然後再次，在混合應用中，圍繞內燃機應用的混合應用。我認為我們基本上已經將範圍擴大了一些。所以我們說，看，內燃機應用領域也存在著非常好的機會，我們仍在努力。我們有資產，有產品，我們也會努力在這個領域取得勝利。

Why do we do that? Why does the sales team graft that because that somewhat balances off the risk that you might have on the EV side trying to predict who are going to be the winner. So yes, it's a total -- it's a different focus. And I feel we have a lot more clarity around that.

我們為什麼要這麼做？為什麼銷售團隊要這麼做，因為這在某種程度上平衡了你在電動車方面可能面臨的試圖預測誰會成為贏家的風險。所以是的，總的來說——這是一個不同的焦點。我覺得我們對此有了更清晰的認識。

That's very helpful. I appreciate that. And then just pivoting to the leak detection business. Just curious if you could elaborate on the total addressable market there, what's that size -- and then what's the margin profile versus the legacy industrial sensors business? I'm also curious what's embedded in your guidance for this business for -- is it still high single-digit outgrowth versus the market, just given some of the things that we've heard about the resi demand environment from some of the pure-play HVAC names today?

這非常有幫助。我很感激。然後轉向洩漏檢測業務。我只是好奇，您是否可以詳細說明那裡的整體可尋址市場，規模是多少？與傳統工業感測器業務相比，利潤率如何？我也很好奇您對這項業務的指導中包含了什麼內容——考慮到我們今天從一些純 HVAC 公司那裡聽到的有關住宅需求環境的一些消息，與市場相比，它是否仍然保持高個位數增長？

So on the gas in context, the overall market size in North America is roughly $150 million. And as I just mentioned in the call, we won a significant market share in this market. And if you then convert that to Europe, where we're now going to attack that market with our so-called product range. That overall, Europe is a similar sized market as what we have in North America with roughly $50 million in market size.

因此，就天然氣而言，北美的整體市場規模約為 1.5 億美元。正如我剛才在電話會議中提到的，我們在這個市場贏得了相當大的市場份額。如果你將其轉向歐洲，我們現在將利用所謂的產品系列來進入該市場。整體而言，歐洲市場與北美市場規模相似，市場規模約 5,000 萬美元。

And there's more markets beyond that, that are actually emerging, and this is the interesting thing. The as soon as stronger or tighter regulations come out in South Korea, for example, or in Japan, we'll be ready with our product. We're busy scaling up ATL, and hopefully, we'll be ready by then with A3. And then we'll selectively tackle those markets, and that's an additional opportunity where we can gain market share and gain additional revenues. Around the margin of the product, I'm going to pass over to Andrew he'll explain that to you.

除此之外，還有更多的市場正在興起，這是一件有趣的事。例如，一旦韓國或日本推出更嚴格或更嚴格的法規，我們就會準備好我們的產品。我們正忙於擴大 ATL 的規模，希望到那時我們能夠為 A3 做好準備。然後我們會有選擇地進軍這些市場，這是我們獲得市場份額和額外收入的額外機會。關於產品的利潤，我將交給安德魯，他會向你解釋。

Yes. We've been coming up the curve on margin, but at the level that we're at today, sort of $70 million or so of annualized revenue, we're basically at or very close to normalized industrial margins. So scale has certainly helped there, but I think we're over the hump on where we need to be on margin scale.

是的。我們的利潤率一直在上升，但就我們今天的水平而言，年化收入約為 7,000 萬美元，我們基本上達到或非常接近正常的工業利潤率。因此規模肯定起到了幫助作用，但我認為我們已經克服了利潤規模所需的困難。

And then in terms of our growth in the third quarter, so you're right, the resi dynamic has changed a bit. We're still expecting outgrowth in the third quarter. We were high single digits in Q2, probably low to mid-single digits in the third quarter and then similar kind of for the balance of the year.

就我們第三季的成長而言，您說得對，住宅動態發生了一些變化。我們仍然預計第三季會出現成長。我們在第二季的銷售額達到了高個位數，在第三季的銷售額可能達到了低到中等個位數，而全年銷售額的銷售額也與此類似。

Luke Junk, Baird.

盧克·簡克，貝爾德。

Maybe just one for me, Stephan, and really tapping into what you're just talking about leak detection, but maybe broadening that out in Sensing Solutions. It seems like tapping into non-auto markets could be a pretty interesting opportunity here. Just hoping to get your sense of urgency prioritizing that, including the message pretty loud and clear around China on the Performance Sensing side of the portfolio, but how should we think bigger sure about reinvigorating growth in Sensing Solutions, maybe even beyond the leak detection product and potentially even offsetting some of the cyclicality and performance sensing?

對我來說可能只是一個，史蒂芬，真正利用你剛才談論的洩漏檢測，但也許在感測解決方案中擴大這一範圍。看來，進軍非汽車市場可能是個相當有趣的機會。只是希望您能有緊迫感，優先考慮這一點，包括在中國就產品組合中的性能感測方面發出非常響亮和清晰的信息，但我們應該如何更確定地重振感測解決方案的增長，甚至超越洩漏檢測產品，甚至可能抵消一些週期性和性能感測？

Luke, thanks for the question. Yes, certainly, part of our strategy is looking at opportunities to diversify our end market exposure, and we're weighing that in as we evaluate the new business opportunities for investment. Beyond ATL and Industrial, certainly, we're looking thematically at things like broader demand for electrification and the electrical protection opportunities that come with that.

盧克，謝謝你的提問。是的，當然，我們的策略的一部分是尋找機會來分散我們的終端市場風險，我們在評估新的投資商業機會時也會考慮到這一點。當然，除了 ATL 和工業之外，我們還在主題上關注諸如對電氣化的更廣泛需求以及隨之而來的電氣保護機會等問題。

We're looking at grid hardening and grid opportunities and the electrical protection opportunities that come with that. But I think those are all sort of longer-term secular opportunities. The clear near-term winner is the ATL product at various derivatives of that for other end markets. And so while we'll continue to look at secular opportunities longer term, the focus in the short term is on taking the business that we've already won, expanding margin share and bringing it to other end markets.

我們正在研究電網強化和電網機會以及隨之而來的電力保護機會。但我認為這些都是長期的長期機會。明顯的近期贏家是 ATL 產品及其針對其他終端市場的各種衍生產品。因此，雖然我們將繼續尋找長期機會，但短期重點是掌握我們已經贏得的業務，擴大利潤份額並將其帶入其他終端市場。

And ladies and gentlemen, with that, we'll conclude today's question-and-answer session. I'd like to turn the floor back over to Andrew Lynch for any closing remarks.

女士們、先生們，今天的問答環節就到此結束。我想將發言權交還給安德魯·林奇，請他做最後發言。

Thank you all for joining today's presentation. We look forward to seeing you at various investor events later this quarter. We currently expect to participate in the following events: Evercore ISI Semiconductor IT Hardware and Networking Conference in Chicago on August 26; Jefferies Industrial Conference in New York on September 3; and Goldman Sachs Technology Investors Conference in San Francisco on September 9. That concludes our second quarter earnings conference call.

感謝大家參加今天的演講。我們期待在本季稍後的各種投資者活動中見到您。我們目前預計將參加以下活動：8 月 26 日在芝加哥舉行的 Evercore ISI 半導體 IT 硬體和網路會議；9 月 3 日在紐約舉行的 Jefferies 工業會議；以及 9 月 9 日在舊金山舉行的高盛技術投資者會議。我們的第二季財報電話會議到此結束。

Operator, you may now end the call.

接線員，您現在可以結束通話了。

Ladies and gentlemen, we do thank you for joining today's conference call and presentation has now concluded. You may now disconnect your lines.

女士們、先生們，非常感謝你們參加今天的電話會議，演講現已結束。現在您可以斷開線路了。