Making systems efficient Sensata Technologies

MAKING SYSTEMS EFFICIENT

Sensata Technologies is a world leader and early innovator in mission-critical sensors and controls, which help to improve the safety and comfort for millions of people every in a wide range of applications. Julia Snow reports on the most recent acquisition and the company’s positive 2011 results.

Sensata Technologies Holding N.V. is one of the world’s leading suppliers of sensing, electrical protection, control and power management solutions with operations and business centers in eleven countries. On average, Sensata manufactures 20,000 different products and ships over 1 billion units a year under the brand names Klixon®, Airpax® , Dimensions™, Qinex™ and – the most recent addition to the brand family Sensor-NITE.

Sensata’s products optimize the customers’ own leading-edge technologies and thereby play a vital part in maintaining efficiency and safety in nearly every field of daily life, from automotive, aircraft, industrial or military applications to heavy vehicles, heating, air-conditioning and ventilation technology right through to data and telecommunications and recreational vehicles.

Over 100 years of ongoing growth

The corporate roots go back well over a century, when the General Plate Company was founded in Massachusetts in 1916 to provide gold plate to the Rhode Island jewelry industry. As the company grew a number of mergers and acquisitions took place, and in 2010 it was floated on the New York Stock Exchange. Today a total of 12,500 employees are employed in the two main business segments of Controls and Sensors.

Sensata’s European head offices are located in Almelo in the Netherlands, and in addition there are Business Centers and manufacturing sites in Belgium, the Netherlands, Brazil, Bulgaria, China, the Dominican Republic, Japan, Korea, Malaysia, Mexico and the United States.

A worldwide network of Sales & Marketing offices is looking after the customers in their home markets, generating 25 per cent of business in Europe, 33 per cent in Asia and 42 per cent in the Americas.

Positive end of year results

In their recently published Fourth Quarter and Full Year results the company was able to report a net revenue of just over $1.8 billion in 2011, which represents an increase of $286.9 million, or 18.6 per cent, from the previous year. Tom Wroe, Chairman and Chief

Executive Officer, said, “The fourth quarter was a challenging quarter given the continued volatility and uncertainty in the macro-economic environment. However, we are pleased that we were able to close the quarter slightly ahead of our revised estimate and today, are reporting net revenues for the full-year up 19 percent over 2010. While certainly not immune from macro-economic forces, we continue to be confident in our growth strategy and the pillars of our long-term financial model.”

While Sensata’s ‘Controls’ business segment is a major player in worldwide electrical and power protection industries, the company’s activities in the ‘Sensors’ segment have established market leadership in markets as diverse as automotive, heating, ventilation, air conditioning and industrial fields.

Market leader in industrial sensors

A sensor measures stimuli and converts them into a signal, which can then be read by an observer or an instrument. Sensata is the number one supplier when it comes to pressure sensing for HVAC/R, automotive, and industrial markets, making pressure sensors with ceramic capacitive and hermetic technologies for a full range of automotive and heavy vehicle off-road systems — from improving safety and performance to helping the environment by reducing vehicle emissions and improving gas mileage.

The range of industrial sensors includes Airflow Sensors, Analytical Sensors (Spreeta), Automotive Sensors & Switches, as well as Termperature and Pressure Sensors. Sensata’s high-added-value electronic and electromechanical sensor systems and subsystems are in demand in the fields of Aircraft & Military, Automotive, HVAC/R, Industrial, Motors & Rotating Equipment and Transportation.

Although Sensata Technologies is headquartered in Attleboro, Massachusetts, European customers are supported by an application and quality engineering, sales and customer support team out of Sensata’s European business and technology development centre located in the Netherlands. Supply flexibility within Europe is ensured by delivering all products from a central warehouse: the logistics center in the Netherlands.

Important acquisition

In the third quarter of 2011 Sensata Technologies completed the acquisition of Sensor-NITE, from the Elex Group for €225 million. With recorded revenues of approximately $135 million in 2010 Sensor-NITE is a leading manufacturer of high temperature sensors used in the exhaust after-treatment systems of diesel and leading-edge gasoline engines. The business is headquartered in Belgium and owns manufacturing sites in Sofia and Botevgrad, Bulgaria.

Sensor-NITE’s leading market position and differentiated technology is considered an ideal fit with Sensata’s core Sensors business, and is expected to provide a new technology platform and strong growth opportunities, particularly in powertrain systems. By leveraging both Sensata’s global footprint and the worldwide customer base the new joint offering will expand its reach to address the increasing demand for cleaner emissions around the world.

Sensata expects that the acquisition will contribute to current and future net revenue and Adjusted Net Income growth. The acquisition is in line with the company’s previously announced objective to make acquisitions that are close to the core and accretive to Sensata’s business. The long-term potential for Sensor-NITE’s technology is considered substantial, and plays an important part in accelerating Sensata’s long term organic growth - given the expansion of emissions regulations to the commercial diesel market and the stricter emission requirements on a worldwide basis. n