July 30, 2020 DRAFT v10 APTIV Second Quarter 2020 Earnings Call
Forward Looking Statements This presentation, as well as other statements made by Aptiv PLC (the “Company”), contain forward -looking statements that reflec t, when made, the Company’s current views with respect to current events, certain investments and acquisitions and financial performance. Such forward-looking statements are subject to many risks, uncertainties and factors relating to the Company’s operations and business environment, which may cause the actual re sults of the Company to be materially different from any future results. All statements that address future operating, financial or business performance o r the Company’s strategies or expectations are forward-looking statements. Factors that could cause actual results to differ materially from these forward-looking statements include, but are not limited to, the following: global and regional economic conditions, including conditions affecting the credit market; uncertainties posed by the novel coronavirus (COVID- 19) pandemic and the difficulty in predicting its future course and its impact on the global economy and the Company’s fu ture operations; fluctuations in interest rates and foreign currency exchange rates; the cyclical nature of global automotive sales and production; the potential disruptions in the supply of and changes in the competitive environment for raw material integral to the Company’s products; the Company’s ability to maintain contracts that are critical to its operations; potential changes to beneficial free trade laws and regulations such as the United States-Mexico-Canada Agreement; the ability of the Company to integrate and realize the expected benefits of recent transactions; the ability of the Company to attract, motivate and/or retain key executives; the ability of the Company to avoid or continue to operate during a strike, or partial work stoppage or slow down by any of its unionized employees or those of its principal customers; and the ability of the Company to attract and retain customers. Additional factors are discussed under the caption s “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s filings with the Securities and Ex change Commission. New risks and uncertainties arise from time to time, and it is impossible for us to predict these events or how they may affect the Company. It should be remembered that the price of the ordinary shares and any income from them can go down as well as up. The Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events and/or otherwise, except as may be required by law. 2 2Q 2020 Earnings | July 30, 2020 | Aptiv
OUR PEOPLE OUR COMMUNITIES OUR CUSTOMERS By operating as One Aptiv, we are committed The Aptiv Foundation has donated to the Our effective and rapid deployment of Aptiv to living our values and protecting the health GlobalGiving COVID-19 Relief Fund, which is Safety Protocols resulted in successful and well-being of our employees, families and helping some of the most vulnerable communities production restarts in every region, enabling the communities in which we live. around the world deal with the pandemic. us to deliver for our customers. 3 2Q 2020 Earnings | July 30, 2020 | Aptiv
Navigated Through The Crisis STRONGER THAN EXPECTED SECOND QUARTER PERFORMANCE; 11 PTS OF GROWTH OVER MARKET 2Q 2020 FINANCIALS 2Q 2020 PRODUCTION 2H 2020 OUTLOOK $2.0B REVENUE (54%) (10-15%) GLOBAL GLOBAL VEHICLE VEHICLE PRODUCTION 1 DOWN 43% PRODUCTION 1 $49M EBITDA LOSS CONTINUED MACRO +6% CHINA VEHICLE AND OPERATIONAL PRODUCTION CHALLENGES $229M OPERATING (68%) LOSS NORTH AMERICA STRENGTHENING OUR VEHICLE PRODUCTION FLEXIBLE BUSINESS MODEL $1.10 LOSS PER (62%) EUROPE VEHICLE SHARE PRODUCTION Note: Revenue growth excludes impact of foreign exchange, commodities and divestitures; see appendix for organic growth rates EBITDA, Operating Loss and EPS adjusted for restructuring and other special items; see appendix for detail and reconciliation to US GAAP. 1. Aptiv weighted global vehicle production 4 2Q 2020 Earnings | July 30, 2020 | Aptiv
Executing On Our Strategy DESPITE CONTINUED CHALLENGING MACRO ENVIRONMENT, PROVING THROUGH-CYCLE RESILIENCY OPERATING SAFELY RELENTLESSLY FOCUSED LESSONS LEARNED WITH COVID ON EXECUTION DURING THE PANDEMIC ~ 15 % STRONG COLLABORATION ONE 100 % OF SITES OPERATING HIGHER LAUNCH VOLUME ACROSS APTIV UNLOCKING WITH APTIV’S SAFETY VERSUS PRIOR YEAR APTIV ADDITIONAL VALUE FOR PROTOCOLS CUSTOMERS LEVERAGING TECHNOLOGY > 85 % SUCCESSFUL RESTARTS AND AVERAGE CAPACITY AT AND BUILDING A DIGITALLY STABILIZED OPERATIONS MANUFACTURING SITES INTEGRATED BUSINESS LONG-TERM PLANNING 0 DISCIPLINED INVESTMENTS CUSTOMER PRODUCTION FOR INVESTMENTS FOR GROWTH DISRUPTIONS DURING RESTART AND INFRASTRUCTURE 5 2Q 2020 Earnings | July 30, 2020 | Aptiv
Winning Across the Portfolio YEAR-TO-DATE BOOKINGS REFLECT NEAR-TERM GLOBAL IMPACT OF COVID-19 BOOKINGS Lifetime gross program revenues, $ Billions ADVANCED SAFETY SIGNAL & POWER & USER EXPERIENCE SOLUTIONS $22.1B $22.0B ENCOMPASSES OUR DEEP LEVERAGES OUR HERITAGE AS A $19.3B $18.9B EXPERTISE IN CENTRALIZED GLOBAL ARCHITECTURE & COMPUTING PLATFORMS, $17.6B COMPONENTS PROVIDER AND ADVANCED SAFETY SYSTEMS SYSTEMS INTEGRATOR TO DELIVER AND THE IN-VEHICLE HIGH-SPEED DATA AND HIGH-POWER EXPERIENCE. ELECTRICAL SYSTEMS. BOOKINGS BOOKINGS $5.9B ~$ 5 B ~$ 1 B YTD 2020 YTD 2020 YTD $73.4B SINCE 2015 1 $32.4B SINCE 2015 1 2015 2016 2017 2018 2019 2020 1. Cumulative value of bookings 6 2Q 2020 Earnings | July 30, 2020 | Aptiv
Safe, Green & Connected Megatrends Remain Intact NEAR DOUBLING OF ADDRESSABLE MARKET OPPORTUNITIES IN THE NEXT 5 YEARS TOTAL ADDRESSABLE MARKET ($ Billions) $170 PORTFOLIO ALIGNED TO GROWTH ADDRESSABLE Strong underlying market growth in our core MARKET businesses driven by Safe, Green and Connected megatrends ~ 50% OF GROWTH IN CORE MARKETS CORE MARKETS FROM ACTIVE SAFETY & HIGH VOLTAGE • Electrical Distribution Systems TODAY • Engineered Components ~ $90 • Info & User Experience • Connectivity & Security ADDRESSABLE • MARKET Active Safety • High Voltage NEW & ADJACENT MARKETS Seeding next wave of growth while diversifying NEW & ADJACENT MARKETS business models and end markets • CV & Diversified Markets • Connected Services & Data Source: Management estimates • Automated Driving 7 2Q 2020 Earnings | July 30, 2020 | Aptiv
Strengthening Leadership Positions COMPETITIVE MOAT CONTINUES TO EXPAND CONNECTIVITY ACTIVE SAFETY ELECTRIFICATION CAPITALIZING ON $17B+ MARKET IN 2025, 20%+ HIGH VOLTAGE 75% CONNECTED VEHICLE SAFE, GREEN AND GROWING FROM $9B TODAY PENETRATION BY 2025 PENETRATION BY 2025 • • • Clear leader in Global leader in high and low CONNECTED Unlocking new value creation exterior/interior sensing voltage systems for content- opportunities as vehicle solutions and central accretive electrified vehicles becomes a software-defined MEGATRENDS compute platforms platform • Packaging our optimized WHICH ENABLE THE • Scalable solutions help vehicle architecture solutions • Increased demand for more customers democratize saves weight and cost integrated, connected FUTURE OF active safety systems solutions • Won several high volume, • Launching award-winning high voltage platforms with • Solutions identify and enable MOBILITY satellite architecture with 5 emerging and global OEMs root cause of SW-related major OEMS 2020-2021 launching in 2021/2022 warranty issues 8 2Q 2020 Earnings | July 30, 2020 | Aptiv
Leveraging Aptiv’s Full-Stack Capabilities SOFTWARE- DEFINED VEHICLE REALIZED AND ENABLED BY APTIV’S SMART VEHICLE ARCHITECTURE (SVA™) VEHICLE IS BECOMING A APTIV EMPOWERING CUSTOMERS TO ENABLING VALUE CAPTURE ACROSS SOFTWARE-DEFINED PLATFORM DELIVER SCALABLE, FLEXIBLE SOLUTIONS THE ENTIRE TECHNOLOGY STACK New safe, green and connected SMART VEHICLE ARCHITECTURE (SVA™) Software that is modular and features increasingly enabled through differentiated for re-use across OEMs advanced software demand more advanced architectures to run it Software services for feature development, integration, maintenance, and data/analytics Central compute with multiple domains • ADAS + Infotainment • Body + Security Full vehicle-level integration, test, and validation services Full system insights allow for more optimized vehicle architectures High performance hardware • Power / data distribution & networking products such as domain controllers, • Software and I/O abstraction radars, and cameras 9 2Q 2020 Earnings | July 30, 2020 | Aptiv
Sustainable by Design FLEXIBLE AND SUSTAINABLE BUSINESS DRIVING CONTINUED OUTPERFORMANCE AND LONG-TERM VALUE CREATION RIGOROUS FOCUS REVENUE DIVERSIFICATION ON EXECUTION Disciplined revenue growth with balanced customer, region, platform and end market mix INDUSTRY LEADING GROWTH PORTFOLIO Robust new business wins validating our relevant portfolio of advanced technologies COST STRUCTURE OPTIMIZATION Relentless focus on reducing cost and improving our flexible business model DISCIPLINED CAPITAL DEPLOYMENT Continued organic and inorganic investment in the CREATING A MORE business – improving competitive positioning and delivering enhanced shareholder returns SUSTAINABLE BUSINESS 10 2Q 2020 Earnings | July 30, 2020 | Aptiv
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