July 31, 2018 APTIV Second Quarter 2018 Earnings Call
Forward Looking Statements This presentation, as well as other statements made by Aptiv PLC (the “Company”), contain forward -looking statements that reflect, 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 results of the Company to be materially different from any future results. All statements that address future operating, financial or business performance or the Company’s strategies or expectations are forward -looking statements. Factors that could cause actual results to differ materially from these forward- looking statements are discussed under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s filings with the Securities and Exchange 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 2018 Earnings | July 31, 2018 | Aptiv
Winning Across the Portfolio NEW BUSINESS AWARDS ALIGNED TO SAFE, GREEN AND CONNECTED MEGATRENDS BOOKINGS $7.0 Lifetime gross program revenues, $ Billions $6.1 $5.8 $5.6 ADVANCED $5.1 $5.1 SAFETY & USER $4.6 EXPERIENCE $3.8 $3.4 $3.0 SIGNAL & POWER SOLUTIONS 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 4 2Q 2018 Earnings | July 31, 2018 | Aptiv
Advanced Safety & User Experience WINNING TODAY WITH DIFFERENTIATED SOLUTIONS, WHILE INVESTING TO FURTHER EXTEND TECHNOLOGY LEADERSHIP 2Q 2018 HIGHLIGHTS • 20% growth over market, with improved outlook for 2H 2018 • 3 high performance L2+ Active Safety awards • Integrated Cockpit Controller award leveraging central compute expertise SALES GROWTH DRIVERS 2Q 2018 FY 2018 48% 60%+ ACTIVE SAFETY INFOTAINMENT & 24% 15%+ USER EXPERIENCE Note: Revenue growth excludes impact of foreign exchange, commodities, acquisitions and divestitures 5 2Q 2018 Earnings | July 31, 2018 | Aptiv
Continued Awards Reinforce Active Safety Outlook APTIV SCALABLE AND FLEXIBLE APPROACH AND COMPREHENSIVE TECHNOLOGY PORTFOLIO LEADING TO AWARDS WITH BOTH PREMIUM AND HIGH VOLUME OEMS BOOKINGS REVENUE Lifetime gross program revenues, $ Billions $ Billions 2022 $2B+ 2018 ~$1B $3.7 $3+ $1.9 2Q YTD 2014 $0.2B $1.4 $1.2 $1.2 2014 2015 2016 2017 2018 6 2Q 2018 Earnings | July 31, 2018 | Aptiv
Signal & Power Solutions GROWTH OVER MARKET OF 5% DRIVEN BY STRONG GROWTH ACROSS ALL PRODUCT LINES 2Q 2018 HIGHLIGHTS • New Launches accelerate growth: EDS +5%, ECG +12% • Adding accretive bolt-ons: KUM closing, Winchester announcement • Continued penetration of advanced features and functionality driving growth SALES GROWTH DRIVERS 2Q 2018 FY 2018 HIGH VOLTAGE 63% 60%+ ELECTRIFICATION 12% ~10% ENGINEERED COMPONENTS Note: Revenue growth excludes impact of foreign exchange, commodities, acquisitions and divestitures 8 2Q 2018 Earnings | July 31, 2018 | Aptiv
2Q 2018 vs. 2Q 2017 ($ millions, except per share amounts) COMMENTS 2Q 2018 Fav / (Unfav) • Vehicle production up 2.4% $531 REPORTED REVENUE $3,684 • AS&UX 20% GoM, S&PS 5% GoM 12% | 9% Adjusted Growth % 1 | Growth Over Market $629 19% EBITDA 2 • Conversion on strong sales growth 17.1% 40 bps EBITDA Margin $474 19% OPERATING INCOME 2 • Operations funding investments for growth 12.9% 30 bps Operating Margin • 265.5M weighted average shares outstanding $0.27 EARNINGS PER SHARE 2 $1.40 • 15.9% tax rate in line with guidance; (180 bps) unfav YoY 24% • Higher earnings and favorable working OPERATING CASH FLOW $566 $152 capital performance 1. Revenue growth excludes impact of foreign exchange, commodities, acquisitions and divestitures 2. Adjusted for restructuring and other special items; see appendix for detail and reconciliation to US GAAP 10 2Q 2018 Earnings | July 31, 2018 | Aptiv
2Q 2018 Revenue Growth RECORD REVENUE GROWTH REVENUE $ Millions 12% Adj 1 9% GoM $154 ($59) $436 $3,684 $3,153 Q2 2017 Vol Price FX / Comm Q2 2018 1 Revenue growth excludes impact of foreign exchange, commodities, acquisitions and divestitures 11 2Q 2018 Earnings | July 31, 2018 | Aptiv
2Q 2018 Operating Income Growth DOUBLE DIGIT OPERATING INCOME GROWTH DRIVES MARGIN EXPANSION OPERATING INCOME 1 PERFORMANCE HIGHLIGHTS $ Millions, % of Sales 19% • Conversion on strong sales ($18) $22 • ($59) (1.9%) price downs ($31) $28 $134 • $474 30 bps margin expansion • Operations funding investments $398 for growth 12.9% 13.7% 12.6% Q2 2017 Sales Growth Price FX / Comm Performance D&A Q2 2018 ex Mobility Q2 2018 & Other Mobility Inv Investments 1 Adjusted for restructuring and other special items; see appendix for detail and reconciliation to US GAAP 12 2Q 2018 Earnings | July 31, 2018 | Aptiv
2Q 2018 EPS Growth OPERATING INCOME TRANSLATES INTO ROBUST EPS GROWTH EPS 1 PERFORMANCE HIGHLIGHTS Earnings Per Share 24% • $0.05 above guidance midpoint • 15.9% tax rate in line with guidance ($0.01) $0.28 $1.40 $1.13 2Q 2017 Operating Income Tax, Share Count & 2Q 2018 Other 1 Adjusted for restructuring and other special items; see appendix for detail and reconciliation to US GAAP 13 2Q 2018 Earnings | July 31, 2018 | Aptiv
Advanced Safety & User Experience Highlights CONTINUED DOUBLE DIGIT GROWTH; SUPPORTING MOBILITY INVESTMENTS REVENUE OPERATING INCOME 2 PERFORMANCE HIGHLIGHTS $ Millions $ Millions, % of Sales • 2Q revenue growth Up 23% • Active Safety Up 48% 80 23% 1 bps • Infotainment & UX Up 24% Ex Mobility 12.3% Investments • Mobility investments: $160M in 2018 Mobility $40 11.5% Investments • Op Margins up 80 bps ex Mobility $9 8.4% 10.4% $1,044 $823 $88 $86 2Q 2017 2Q 2018 2Q 2017 2Q 2018 1 Revenue growth excludes impact of foreign exchange, commodities, acquisitions and divestitures 2 Adjusted for restructuring and other special items; see appendix for detail and reconciliation to US GAAP 14 2Q 2018 Earnings | July 31, 2018 | Aptiv
Signal & Power Solutions MID SINGLE DIGIT GROWTH IN 2018; SOLID GROWTH OVER MARKET REVENUE OPERATING INCOME 2 PERFORMANCE HIGHLIGHTS $ Millions $ Millions, % of Sales • 4Q 2Q revenue growth Up 8% 8% 1 • Program launches support accelerated 130 growth bps • Strong North America growth despite 14.6% continued passenger car headwinds 13.3% $2,650 • Operating Margins up 130 bps $2,346 $386 $312 • Recent acquisitions aligned to strategy 2Q 2017 2Q 2018 2Q 2017 2Q 2018 1 Revenue growth excludes impact of foreign exchange, commodities, acquisitions and divestitures 2 Adjusted for restructuring and other special items; see appendix for detail and reconciliation to US GAAP 15 2Q 2018 Earnings | July 31, 2018 | Aptiv
2018 Guidance RAISING FULL YEAR OUTLOOK ($ millions, except per share amounts) 3Q 2018 3 FY 2018 3 FULL YEAR COMMENTS • Market Up ~1% $3,425 - 3,525 $14,350 - 14,550 REPORTED REVENUE • AS&UX: Up Double Digits, S&PS: Up Mid Single Digit Adjusted Growth % 1 | Growth Over Market 10% | 7% 8 - 9% | 7 - 8% • Up 14 - 16% YoY $580 - $600 $2,440 - 2,470 EBITDA 2 • Driven by volume conversion, operational performance 16.9 – 17.0% ~17.0% EBITDA Margin • Up 12-14% YoY $410 - $430 $1,790 - 1,820 OPERATING INCOME 2 • Operations funding investments for growth 12.0 – 12.2% ~12.5% Operating Margin • Sustainable 15-16% tax rate $1.21 - $1.26 $5.30 - 5.40 EARNINGS PER SHARE 2 • Reflects $153M share buy-back during 1H18 5 - 10% 14 - 16% Growth % $1,550 OPERATING CASH FLOW - • Capex $750 / 5%+ of sales 1 Revenue growth excludes impact of foreign exchange, commodities, acquisitions and divestitures 2 Adjusted for restructuring and other special items; see appendix for detail and reconciliation to US GAAP 3 Refer to appendix for guidance reconciliation 16 2Q 2018 Earnings | July 31, 2018 | Aptiv
2018 Performance Drivers RAISING FULL YEAR OPERATING INCOME TO REFLECT HIGHER REVENUE OUTLOOK OPERATING INCOME 1 PERFORMANCE HIGHLIGHTS $ Millions, % of Sales ~13% • Double Digit Op Income growth • Conversion on strong sales (50) bps $1,890 – • (2%) price downs 1,920M 110 bps (70) bps $1,790 – (160) bps (10) bps 1,820M • Operations funding investments ~13.2% $1,594 190 bps ~12.5% for growth 12.4% 2017 Sales Growth Price FX / Comm Performance D&A 2018 Ex Mobility 2018 Mobility Inv Investments Guidance 1 Adjusted for restructuring and other special items; see appendix for detail and reconciliation to US GAAP 17 2Q 2018 Earnings | July 31, 2018 | Aptiv
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