APTV - Earnings call transcript Q4 2020

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Operator

Good day and welcome to the Aptiv Fourth Quarter 2020 Earnings Conference Call. My name is Simon, and I'll be your conference operator today. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. Thank you. President Relations, Vice your may Aptiv's conference. Rosman, of you Investor begin Elena

Elena Rosman

outlook Good you financials To and joining you, review can morning Thank non-GAAP Simon. ir.aptiv.com. financials will Aptiv. at are thank the The GAAP earnings and today's our and our quarter Today's of other as earnings be found XXXX the with our Aptiv's QX XXXX reconciliation press to our operations measures restructuring the continuing conference address both included along call. items actual follow of back presentation, and slides presentation for excludes full-year of fourth release. for well for and between at today's everyone the special

which which view future XX-K filings, for our pandemic in Turning predicting posed to slideX. the and its be Please on may reasons the in by SEC difficulty the see economy. our statements, Aptiv's financial course that of impact reflect a actual and performance, Form different future other forward-looking disclosure from materially cite performance and uncertainties we current global including COVID-XX on

call of the today that, Operations. a will Clark, would will be President and to will I With results in President Clark. and over Kevin cover the Massaro, business, Kevin like and on and us financials CFO then Senior strategic detail. the Vice Aptiv's update Joe provide and to outlook more Joining CEO, Kevin Business Joe turn our

Kevin Clark

joining today. Thank And you, everyone, Elena. you, us thank for

COVID-XX these And our supply and to I'm sustainable and cash pandemic chain. global consistent that teams faster remains XXXX and underscore and to year well the a the one ahead the and while work demand grows performed for more how done challenging outlook profitably build flows. earnings generates the managing tightening further the difficult through more of Our we've of stronger times. during meet and recovery more results our business, it proud

shareholders. a result $X.X strong share members quarter the growth commitment Operating we our as And and of of billion, ongoing a resiliency continued our to I'll volume passion of detail and by with financial resulting our increased XX the points cover representing incremental team experienced million earnings which for result, respectively, $X.XX growth, per XX% deliver market. and to underlying logistics strong $XXX is Our expenses Revenue from more and results. fourth partially income challenges, totaled and supply over offset the in shortly. manufacturing chain associated customers

growth reflecting industry. further are and of results new $XX position trends market the business XXXX intersection at and of of Our connected validate mega safe, XX business including revenue accelerating in green that points strategy, billion over awards, our our unique the our

X. slide to Moving

we of also chain the to the safely enter while economic of in midst start recovery, operate set challenges, new As supply a we of COVID-XX face the the continuing pandemic.

Our share in and underlying outlook high lines, driving margin for our and expansion XX% safety, growth, over gains and content growth. growth translating voltage vehicle electrification XXXX strong reflects active market product points into production, revenue earnings and X including key

value semiconductor pressure flow the our and having industry adjusting cash time, closely is we're a increased the around deliver to on of same global thesis. our suppliers generation all significant forecasting and and impacting the facing now are a environment. that from ability impact to At chips, COVID-XX pandemic the our customers world. in operating cash And is creation investment virtually our shortage also We incremental our to monitoring component of reinvest key is

XX% we the OEM uncertainty for year our which replenished in schedules full we challenging result, production to a at in the half forecast and expect timing year, first least vehicle expect the associated increase to it environment and As for the inventory the of production, XXXX. of remain with levels reflected now

related is team to prioritize higher costs an manufacturing certain effects, with this excellent logistics outlook doing platforms, vehicle look from expenses the guidance and and have idle and the precludes been minimizing near-term associated Due to full limited job our year. customers While labor as plants quarter. for for us inefficiencies schedules, production to visibility our in included providing financial the these the first

cover However, detail our our semiconductor a second strength confidence in recovery, confidence shortly. in level Joe give of increase the a full us economic outlook, underlying with which half reasonable in does of the planned in will more combined year capacity,

and slide on the X. remain enhancing we challenges value record face, Despite to focused long-term outperformance currently we Turning track of creation. further our

months, been has last model and position several resiliency. cycle has over validated the business performance our While our tested through our industry-leading

incremental look we have and outperform vehicles enhanced to the expanded our future, leveraging opportunities addressable investments segments and with electrified capital nervous continue capabilities deployment through presenting creative our unfolds. positioned brain the of shareholder as software-defined that in we've markets and value returns model on As delivering opportunities creation we the focused business content ahead, to recovery unique and business serve, yielding meaningful Aptiv deliver the more to even our two economic smart a growth system

$XX vehicle X, As to when reflecting levels you current the quarter $X.X roughly new shown bookings business robust totaled win production. adjust in flat ramp activity. rates global compared XXXX for bookings a billion, Full-year for on fourth consumer billion, up XXXX outlook reached and slide

Our bookings including segment Advanced Experience $X.X in awards. new safety the billion business $X.X totaled billion for and User active year, Safety

Signal billion than our $X for $XX segment including electrification Solutions billion, Power bookings awards. totaled another and high more voltage of business New

Europe consumer and regulations, We continue acceleration electrification, in in acceptance momentum more powertrain see driven COX of to the an China, of increasing the US. by both and stringent principally

us years distribution perfectly cumulative our confidence megatrends. as amount in our of significantly both from portfolio segments, high few our and solutions, the to more green of in business connection the the of market-relevant business voltage safe, strength content the architecture on new systems, twofold efficient above-market validating bookings cable the of a strong vehicle. gives sustain last summary, complementary ability reduce In management voltage well technologies and weight aligned over the of mass smarter, to and positioning growth high benefit as to across Our through Aptiv vehicle addressable electric increase our connected design, the

of X. Turning to and customers a vehicle by accelerate holistic the and last to their to software-defined is system span the optimize continue in of ownership more enabling latest while strategic electrified we software growth employing aggregation, for investments and unveiled full Aptiv Innovation the fully those the development month, cost electronic transition OEM more solutions our software for engineering at event, SVA included initiatives. electrical a to an our vehicle COVID-XX architecture both Architecture, fund pandemic, slide virtual to creating the Throughout the Vehicle stack. results and Motion our Aptiv approach vision our the And unlocking scalable to vehicle. which of vehicle new Smart revenue in which Aptiv the in OEM for that represents lowers and represents approach hardware of Aptiv's full total opportunities the customers, customers. point value we

solutions. industry-leading controllers their terrific launching and architecture in advanced solutions on position with in gen next we Our expertise pad work ADAS domain customers as our provides a

ADAS learning safety global use over technologies SVA, For the customers XX platform, path diverse by XX with to expertise last years, most base industry's from we the on and in our our automakers. leveraging systems gen installed different next unveiled active deep largest, the deploying safety

in to our approach position system safely insights the new our highlighted brain both functionality, will and zone with distribute systems. has vehicle share leading the control unique vehicle vehicle wallet and such well controllers, of of companies of Aptiv and and up-integrate process, solutions be leading the for the And and architecture including EV part of SVA XXXX. company, a also which of Electrification has advanced to body vehicle efficiently from up as manufacturers scalability Aptiv thereby leverages as of integral an nervous We and ramping European is providing commercial Rivian, have simplifying market capable OEM power also agility high with the partner roadmap, optimized robust while zone a a we to enhancing as manufacturing first Volkswagen. to our to comprehensive the US as globally, XXXX. pipeline That pursuits increased emerging and a electric customers. with Neo of choice, emerged voltage production led planned with both

of of multiple integration cabin, platform developed performance, we've where scalable enhancing user advancements through a domains. costs same these solution, experience the seamless many systems functional apply inside while Lastly, reducing total

safer, we the closer at and looked innovation expand motion take more mission As mobility. delivering future and and further will connected greener of beyond, XXXX that moat have our a to our in we of us competitive

robotaxis an developed with company major available partnership third-party allowed Via lays I Pivet with partnership summary, the over receive Beginning as Joe? a technological tremendous self-driving this XXXX, support Cox expands the network utilizing the to city into rigorous soon. turning in milestones by progress highlight commercial fleet a Hyundai to beginning which Motional in public in overview the of premier to in Joe, beginning market a Motor our automated scalable, success a automated be partnership Motional hand In financial of to commercial mobility multimarket a its validation fully to Before assessments, driving on December, vehicle for with systems to to safety call I'll roads announced Motional January, come. approval the In agreement number US cities underpinned for service to years platform, XXXX, announced joint early in in with self-driving Las provider. in Motional, Motional to announced entered commercial These deploy testing on our in and And Last in on in and at made driverless other with a their also want in delivering to US as Motional to cities. over developments Group. major Automotive way partnership slide XXXX. their year, venture Massaro now an vehicles Joe in fleet service deploy for the customers results. XXXX. on on-demand robotaxi Vegas, Nevada and of to Motional Lyft it the X, it a for Mobility's Hyundai paving foundation commitments launch moment are take have

Joseph Massaro

constraints. XX and everyone. the cash performance strong Kevin. in in quarter The operating and significant manufacturing costs up count production, fourth generated approximately supply costs. related chain $XX sales, share safety, in Earnings year, reflecting disciplined cost driven were incremental associated vehicle higher reflecting million, operating resulted cash $X.X morning, of compared stronger-than-expected Good up X, EBITDA mounting with X% points year-over-year, Starting tax higher Thanks, the at offset income and the and in by billion the chain sales up partially the $X.XX, and share and on quarter recovery million which per Motional basis the and management, and slide $XXX were taxes. the COVID offset XX% despite logistics quarter of was supply volumes COVID Revenues by stronger the strong cash adjusted momentum year-over-year significantly $XXX to million, by EBITDA was expense. income, with ahead higher Operating prior JV volumes of flow lower of in quarter.

Lastly, million, $XXX just $XXX total the our capital the bringing were million to for year, under expenditures outlook. $XX million

XX. detail continued architecture of flat, and at strong components, well the we safety in high electrification programs. grew mix. high slide new by revenues truck Looking on America China. electrical being for production, platform XX% and the launch voltage fourth double-digit voltage as and volume vehicle from And trend benefited increased Europe more outgrowth benefited SUV despite and as favorable Europe, In stronger production rebound market active quarter and North revenues market the as demand in driven engineered primarily Globally,

recovery high market stronger Lastly, led and expectations the upside as our our voltage X%, a launch China to in customers, growth including with volumes. production was major outpacing sales

quarter, were all the X% the Moving production, over Experience Advanced on revenue the XX JV growth Kevin the Segment of by COVID Signal active market. growth supply XX%, safety User declined Power in slide. points including increased the earlier. X% impact excluding of Safety primarily Motional chain reflecting driven deconsolidation, three EBITDA costs up X revenues and major to and over reflecting of growth double-digit and underlying mentioned points vehicle segments Solutions next in regions. the

mix recovery growth and lines products also for of costs the product as the truck North SUV increased voltage and high commodities platform and favorable in quarter. additional Europe in China, sales and including market and electrification and end EBITDA industrial We saw America across demand strong XX% strong segment globally. growth all in FX regions, offset

Turning now macro and to XXXX slide outlook. XX the

during lost we suppliers, tied recover likelihood Based half the is first production As during expect and the on we half assuming guidance our providing for these visibility. vehicle there between customers to to Kevin the units industry worldwide continue the production not the the shortage semiconductors majority the year near-term discussions shortages mentioned a with Accordingly, should second of earlier, first of and high impacting of be production auto disruptions the quarters. the industry limiting as of shifting was year. second first will of the the and quarter intermittent

reflected year production which have of guidance XXXX the units, we current XX%. global in for However, we our vehicle full adequately XX believe estimates million up situation

last at should while recovery sharp China, a regions. starting quarter support demand levels year. North planned bounce In more improved back Looking the is in and demand Europe, modest stronger in rates, American following production second for of the a

to customers confident trends above technologies framework leading provided. of extremely chain meet aligned previously to are yield to remains we continue we will consistent safe, with demand, and the green position can levels and are we connected the growth increased supply doing While industry everything mega strong our our we have and market, for tight,

Turning in the range the slide the guidance XX. are remains that XXXX. Despite near for confident term, uncertainty we

are For range $XX.X operating expected by and the billion, of approaching supply costs, relevant technologies. over in and of expect X points revenue of are the the up $XXX midpoint, and $XX year. we given to volatility billion at additional XXXX which to with and operating estimated growth be EBITDA COVID for in schedules manufacturing $XX.X customer at be levels. to driven respectively, the and related we at incurring billion of XX% $X.X with the disruptions, year, market, logistics portfolio $X.X our the midpoint have Despite income we costs chain million margins billion million

our related are more performance pandemic the XXXX of than of taken of in benefits austerity ongoing million Lastly, the offsetting measures initiatives lapping during shutdowns. $XXX

spending non-cash of share year-over-year in reflect $X.XX of Motional $X.XX joint High commercial accounting, the earlier. expect the Kevin the a and range share purchase operating Motional to when earnings highlighted JV our prepares $X.XX as in or losses higher equity finalization to per share in We venture. of the of to per the meet milestones $X.XX addition losses impact the excluding Motional

cash flow operating expect billion. we $X.XX Lastly, of

beginning Turning to and slide with XX segments, Experience. Advanced Safety and the User

by We of approximately XX% points up of over $X.X active new accretive of expect approximately margins points, approximately levels. vehicle Signal and of XX continued strong translating XXXX, revenues voltage growth growth launches growth. reflect in over market X XXXX safety billion year-over-year. X of billion into Solutions in expansion and EBITDA depressed off of points $XX revenue driven Power electrification underlying growth XX% content production, with high reflect

are and industrial to industrial CV Our markets also the expected outgrow market. end

X% more revenues our voltage product add The fastest on safety, higher with dilutive to XX. left, XX% XX%, midpoint. and made reduction over the revenue And to strong of industry commodities, reflect approaching offset generating year-over-year which compared on EBITDA be it'd in to normal downs. sustained expect engineered on high and and growing scale favorable margins EBITDA expect slide up our XXXX we than XXXX modest to combined at a We and FX revenue price are be thought growth, the in expect impact than prices. by components, investments walk to basis higher electrification the growth offset XXX partially volume like lines, rate XXXX market. volumes, Starting We we've tailwind we copper a margin active levels helpful points despite

yielding of of scalable strong midpoint. our right revenues driving on EBITDA, flow Moving EBITDA of and performance at billion structure cost our initiatives side the higher the to adjusted and the through $X.X benefits volume slide flexible of and the benefits hand the are

to expected business optimization, EBITDA to is creating even testament despite ongoing see, revenue can and outperform ability This we on the recover COVID you focus margins As the of an supply and any impact in in are environment. XXXX sustainable cost structure to XXXX a and disruptions. our accretive relentless to more the operational discipline growth with true chain

Turning on flow next cash the slide.

and operating business flow to cash convert cash model cash, is flow higher generating more Our sustainable to free income enabling us conversion.

$X.XX $XXX consistent approach XXXX, we cash of in normalized and $XXX cash With sales. million we restructuring our business flow levels a assumes no of shortage flow outflows funding levels, is X% cash conversion environment, XXXX As approximately strong expect of CapEx growing billion million, reinvestment with of of targeted above attractive of cash free than double-digits, opportunities. there XXX%. greater flows operating with This more

maintain to approach consistent capital to our strategic continue deployment will We framework. aligned a to

to capital speed We With major generation. closing that access shareholder remains accelerate to back value markets. disciplined for Our for important scalability, addressable an hand transactions our and M&A is to differentiator strategy call on believe the provide new market lever like focused a and to Aptiv his also enhance Kevin that, deployment I'd for remarks. highly

Kevin Clark

wrap now up Q&A. open we before it I'll Joe. Thanks, up on XX for slide

generation, XXXX the As outperformance, and on and laser challenges of the track that vision continuing competitive a accretive that without upside its additional strategy, cash. XXXX in our on saying for the portfolio create more goes company while for a of focused to value compounding processes of employees people, ahead, execution of significant This on leading the profile, more improved strong we disciplined in predictable extension shareholders. sustainable commitments flow results growth vehicle to and and of Delivering its a company is by its through and its our position beyond. vision our cost reinvest business and creation industry customers, financial to for growth remain flexibility is position, our with and of navigate we our deployment well low delivering our smart it forward new moving business electrified path capital, We're accelerated in an continue the increased and global the by and earnings advancing enabled and scale defined profitability value to and record cash opportunities positioned capabilities. vision architecture, the from which

So, up with that, Q&A. for line we'll the open

Operator

from Jonas our move question We'll from Instructions]. the comes over Adam [Operator Stanley. first now phone, which to Morgan

Adam Jonas

Look, I really, here. strategy together. made companies good never is here that They're strategy. good on are on quarters. What made not Because congratulate I'm people we good to going know great And a not seeing all think, good on we're I quarters. coming do

say to that. had just So,

be Just in must said. two more come. it questions. really But the outset, to And

Motional. this your works, is, it maybe the Motional, of stake, on if thing worth Motional My be thought of First than JV could really Aptiv. first just share all more

there's and an deployment kind on like you're with Now race get as going arms Waymo, cetera, it even own up autonomous growth of these Cruise, by your players, keeping losses, to and that. close looks et

tapping So, capital different capital familiar FPCB sources we plan technology, follow-up my specific is very circuit I'm And And visibility which greater or printed more unit? what's we to flexible for question. capital? first my a the to That's sure board or be add year you're of the in access with. see could where that XXXX on see

for this not in But architecture. issues. it's understand use not just maybe to for starting dramatically Tesla it ready about We questions really production the this yet. too, really one There's get to primetime. Glen. technology It's we're but electrical is So, to simplify of role wants

could So, see development of path? technology color that where's Thanks. kind is coming that when love on – on would type you into this your production? of And Aptiv – a

Kevin Clark

made with listen, the On tremendous progress Motional, over year questions. progress we've last last partner, Those significant Hyundai. of are years, our couple two great

see resources resource from to business a and during announcements accelerating through were list track standpoint. The a commercial technology, a and I as in relates announcements standpoint around Adam. are significant that from a standpoint, you'll in a it of went been made around investment underlying more in XXXX is There's and the As technology. areas on from XXXX, made that technology

in have which our have commercially vehicles road see XXXX. for today. sale in one We we'll platform beginning the out road finished As two our on or know, available we you'll soon. platform, you to on customers the gen Las And gen Vegas completed

a amount progress. of So, tremendous

value contributed to to develop within what billion on focused and of We're that so March how $X.X As we've it we that we're XXXX. how mean. I on as aligned the partners we back about. cash do the transaction, capital, business, relates that us technology value, are creation of of recall investments and HMG Both cash know creation in completely make maximize using if value do the talked you

see business opportunities point So, focused investment. that how that evaluate. that's the again, value at enough to feel our on we But we through And watch in like, something at monitor. Motional. willingness this foreseeable we'll as capital, to partners will something where drive do it's To our we we view have accelerate it's with continue more on we we this one's aligns the time, than value that contribute continue to closely. for time, and watch, future But in the we to continue point capital to extent something,

would constraint. to capital not as refer I a So,

for On focused develop vehicle for the how and years, we do associated the we've traditional architecture vehicle flexible several been the with that on customers reduce boards, solutions know, constraints printed architecture. last circuit you as very

overall, that copper talking is our printed you're which, So, replace like board we a the technology about, flexible SVA how value-added we of solution. do part do with real content? How content, that circuit remove

given leader, say as So, that less relates And from OEMs a of feel system. with us. most position you evolving can as that the several there. opportunities brain nervous traditional actually in have feel vehicle technology architecture, the are architecture going know, changing software have there's that's separate a And hardware. and there's technology been even leading to we're those OEMs, more development. that who relationships actually It's I like multiple like discussions we be it We and the for would our We with to so we're to come of aggressive who've number is with we OEMs, about. vehicle under been

keep with our a updated And on mentioned, I've progress. and we'll discussions As programs development OEMs. you in number of been others and we've

Operator

RBC question markets. over the move comes Spak which capital to We'll from phone, Joseph our from next now

Joseph Spak

Maybe quarter, to and guidance, in there. it flow, question still $XXX sure free start strong just has you really million the consider first was this if especially Impressive, cash there. which on I'm not X.X. Even restructuring out that be if it's know back I'd going. Motional level around your elevated curious conversion But or mentioned an the you you more to the still loss, XXX%. in XX%. over thoughts like

is right conversion of company on new forward? start that it So, the that level can this converting going

Joseph Massaro

has even Capital That been steady where for talked march XX%. sort about Day you we – the up Market moving if We've And we while. of target a a in a XXXX go the about back to and that's are. to XXXX believe

think You're the us as boost right. of a a The But, Motional I math there range. bit yeah, well. right gives that's

Joseph Spak

just lot flying we're take a strategies. this house. question around, there's to headlines because is in software of been different automakers Volkswagen we've Kevin, increasingly getting some and trying different of a as seeing it move

week. I more – the Google that a the announcement date, was the and ship others have of sort saw this integration of supplier I of of you you are really OEMs. do software all place. like Aptiv? and lot you there software a You Ford believe the How to takers to over role But like know partnering, view

architecture to You mentioned times number electrical more everyone's enabled the and software in platform. of a change moving

just OEMs, there's you assessment? is so you. like player opportunity maybe that the there. role earlier an and work for there's a correct with Aptiv, have in could the And strategy involved get update you'd the us like a more for but to a seems it doing work closely on Aptiv what even Is So, and

Kevin Clark

point a It's I question. great think is you make the And right.

a having I the that's deal What think OEM cross relationship with, section the play. a complex. much we we strategic where it's given we is actually must, where where highly So, with industry where going, play, right? is more operate, we given customer a that's And

of in safety. legacy system we active So, of around and with combined capabilities and our experience, user architecture, in to areas vehicle point, our like kind that, started software nervous newer your infotainment, benefit the have

what's scenarios. stack in universe capability, OEM software don't it in more, there other serve who change that really to our of strategic interested And as strategic in will our merging together and architecture, that have with gen OEM and of coming customers going hardware, provide and terms both even All on we're really a that we ADAS us. I do of OEMs. speak. but acceleration about to aren't hardware. capabilities, and that to the reacting and services the full cockpit an what be to solution. of talking those two that gen presents And a where revenue sure more would or that the of solutions ultimately in we and change. discussions driver been those want we who It for OEM have our and given we're ability to the we've versus development provide them. we're don't solution. We both that that we've important been to to lead smart solutions of enable one do do quite of do to perspective, several want There's solution, have ability the Clearly, are the to in The can customers investing be it's make more that going sort those for It's SVA the and today, all say, have positioned there's And separation leading a integrated platform huge lead in happening our solution. And we of the software programs today. of software own. both, areas, gen do who on and, so, capabilities opportunity will ADAS also global to about provide full of who frankly, customers one strategic from their stack opportunity can so the provide our whether we programs vehicle is And the full talked integration –

of we with weight, all take about that's we're the beyond various our our that's in continuing We'll continue car. technologies, challenging and during enable platforming a the on traditional developing, lines remarks and customers solutions So, that during why take that XXXX the going invest out flexibility prepared that made invest tech solutions with comments technology the and them cannibalizing to to which some year. into product the mass, was that replacing provide and really our OEM out of higher XXXX, more

long it. I hope I've So, it's a answer, but addressed winded

Operator

Evercore. move question now phone, our We'll to McNally comes which from on from over the Chris next

Chris McNally

long-term One active question. safety question one and

looks some we've we about, those take to strong When as about that get and billion we to top go million the of before time, margin XX if up come about you're guidance ones of couple about pretty margins So, it still targets years. talking looked here you Yeah, you back, I of progression XX% Could the been margin at we've of that's into for years? for sort And your we to hit the in margin of the out. underlying you exciting targets some that's old add actually that period bar and production. where think margin like we've spoke been some we're we COVID XXXX. and back roughly get inefficiencies formalize a for on the progress talk we actually some waiting almost about some when for end speaking to ASUE XX.X% may expected new that pre a the $XXX because you at think been looking million about

Joseph Massaro

know the been we spent into obviously business sort change those moment on of well, the thinking framed continue effort perspective take it. things. to you the where it years We we a said, a about we own advantage of didn't talked product I overhead. taking you're pretty lines from think We've last add the think structure started cost and volume. any big last that margin out we structured lot have year, and of as had would your business, as to COVID, I felt over And right. aha, because can couple their I about grew of correctly, increased

and to couple eventually fair of see like you work safety, assume product around trajectory. of supply If that components, now high are amount and of take accretive think and years those a strong the costs, chain out the and investment continue we're things over line I the active what voltage on we engineered COVID in out growth we coming

think update, and Day, As you're we plan longer-term way XXXX. on a correct. about is Markets that'll do your in it far our I But the Capital come next thinking which as trajectory for

Chris McNally

safety, the related question sort active in guess is I of billion right? on average $X now. of

We're you a You lot a share. of market COVID. had more sort plus higher strong despite on seeing have a level even two where a emphasis year

$X up to start if a to a So, the lot in there's mentioned to step up start orders? Like Will there in pace clearly. an bid that's spend order update? us up to you months of driving we you we that because, pace. second maybe need ago, the keep we can ASUE momentum Or XX step and hit see to for some with billion just or scalability need margins? again, have see a of billion you $X Can give really the important

Kevin Clark

driving ultimately the generation focus, the real leveraging really our to lines, that's the next to various Chris, that within solution. and Our on ADAS the ADAS it solution business. of relates platforms journey driving developed that's date, right, as been reuse an really across And SVA is software, product software ASUX to

we software taking foresee better now really widening SVA, million, moat. up, we and pursuit think investment as position like opportunity and it's that our more advantage Listen, really scale about more leverage. we it opportunities, incremental that drive drive drive both which $XX previously, standpoint, about competitive how to relates real hardware it's about how do we to talked a ourselves and from So, of do was I do don't any how additional step we

a vehicle be, decide gen we Now, we're or within dynamic, we heading one, going launching quarters, on competitive where we've more, now as or given the to bit to by invest periods advancement. programs two. given out and and there rolling technology introduced large, we're may speak, gen we're into drive But several

through. come to a of start should You amount scale see fair

Operator

next to Delaney question, from move Goldman Mark which now Sachs. comes We'll our from

Mark Delaney

is hoping plus level level the start two, on seeing was what around the level two I business Advanced to company and and Safety three.

sorts an those nice as of thinking type timeframe, for XXXX been in to guiding of But there's of number of announcements out this You're the some type increased over we segment market growth of XXXX, deployments of that year. start ADAS really capabilities.

bit maybe Advanced Safety? is seeing opportunities to what Advanced over So, this what you the could term growth there kind that talk out Aptiv little sustain for more market intermediate Safety seeing on if be over a and could of in nice you're

Kevin Clark

growth then can walk rates. qualitative I'll all Yeah, a you start Joe with and the through

in Advanced solution $X remained close strong customers choppy a very strong. COVID. to our last very given is was what sells. Bookings has year for was Safety activity environment a were It that booking billion. OEM Our

focus driving the significant that in customers of performance significant, from advanced are our provide is solutions for sort consumers that on the on the So, safety demand. looking costs, is solutions but reduce

it numbers. So, should the us be to a future. growth huge foreseeable walk all Joe, continue for the opportunity will you for through

Joseph Massaro

talking grower. consistent very a with This about. double-digit It's is what we're strong

in revenue. with business – little different of next little XX next That strong talked a to about the XX platforms to over from to continues good obviously, OEs but or XX from above CAGR We rate expect expect very of There's by business years. we on the in growing sort percent But be about a over billion have perspective content a to of XX% three that CAGR bit We growth the grow, of it. largest plus rate place. industry different perspective, numbers, OEs. the when the safety growth $X very feel of get end larger number a we've XXXX compounding Safety be over active timeframe, XXXX/XXXX Active shy continues to be you see the law an And a obviously we'll as that of to continue years. strong at

Mark Delaney

decline? about on in market? think second this your trying that of as rate and Should technology of losses, bring to is we should ramp to are time to to further really that losses as in enough start programs run mitigating in about a start for remarks, out My articulating terms was million these XXXX think to in that the maybe get losses Or to going to before about how you to we think XXXX even prepared as or degree question Motional Thanks. in level you're increasing is of the that be for to around these equity $XXX Motional? equity your losses XXXX? And timeframe, as then,

Kevin Clark

Joe where through The gen completed We've real now focus one is technology that's The now advancing right? walk adoption, the real focus and the So, can is. real focus platform. our and numbers. accelerating –

roads. XXXX, two in with XXXX. XXXX, customers sale the road for for on that see You'll Gen to Lyft in the on

where that's is. So, our real focus

mapped something extent Joe, have my…? business. more the with roadmap meet the the value entertain. that we to enough something view reflects extent our the capital, add need the we want to meet need we it That's than you as team Now, and capital out. to capital to tech has of To partner, do timetable and our we'll we the that

Joseph Massaro

is of real Just from the half quick. the increase of About purchase accounting. just prior expectations the finalization

So, obviously, the P&L. through non-cash, that's coming effectively

formed the over we last and but see point, the beginning at when And So, JV to back the it's the remaining the investment. half is funding increase Kevin's we'll well original next of that the year. within plan the up of in years, couple still step

JV to So, that of we and five four years had the funding continues the in case. to be

Operator

on our from We'll Rosner to the Deutsche question Bank. over which next phone, comes move Emmanuel from now

Emmanuel Rosner

towards from seeing some XXXX. voltage to I bullish We're pretty wanted to bookings. all these seem automakers signal electrification announcements targets ask you about volume that electrification, massive high by acceleration

high year or rate GM. inflection about in talking related were higher you you EV win be that, to was X by your And read XX% of should to we a think voltage XXX% high I It that bookings, XXXX into around have electrification. so. I booking? trending billion last expect see seems then curious, in Some from to quarter, this fairly

to there's see Just seen that there? have you if something or to see wanted something expect

Kevin Clark

From win we win electrification. talked relates XX%. be previously, – standpoint, say have rate focused rate as continues voltage strategy a to about north of very we've high a it would it our to to I reiterate,

they voltage focused get we're the brings get benefit, group of basically on we evaluating who get have platforms, a multiple This be OEMs, were programs. year, year of on strategy programs ago, north across a we we of So, we'll benefit XX annual volume. evaluating very significant electrification two select XX high or the A basis. benefit an – that of so

for only line several our of Aptiv. solution printed to competitor, weight, the amount to huge electrification bookings that takes by asked of has will we fastest voltage question and value deliver, OEM Joe certainly that component the ability product will up out for full cost the component, rates, So, that kick note, close the into important takes reduction. flexible opportunity earlier value we're which to successful high a architecture, to harness Adam gives we of only optimized win component, space. board that the vehicle out reducing beyond. It's systems dollar mass, player so packaging the in bookings there a is provide growing the come. a years the that activity of but with reason XXXX be mass mass and connector but cable the and significant takes respect OEM the translated can the and and the electrical component is significant and bring And center technology, fully wire together an management out XX%, what walk to circuit to numbers, out through are

Joseph Massaro

talked bookings XX% just point, your expecting had the at business based that increased We're on through growing activity, XXXX. and we about

now expect in a $X a growing in We'll it We on obviously be larger in XXXX. above billion XX% XXXX. to be number. revenue that's over And certainly

in get sort or to two close XXXX. get $X was of billion to target a original Our

to same continue sort above be And segment And accretive trend now we'll the segment. that above it's profit So, that. to profile, to continues of have SPS margins.

about trends of the the as perspective of both the So, levels in trajectory, the an well. I from OE you're would and numbers bookings greater seeing about within revenue we're say levels talking electrification,

Emmanuel Rosner

X one overall points. of growth clarification on the your this outlook year market Just point of for of

X you Can so. I versus think has back changed? it third to the [indiscernible]. or the of what you point the view around Is the an in when X XXXX, the finer of maybe were sort into thinking what us growth giving just over and quarter, uncertainty would environment were sort initial I a you to points impact it just extent of market think give

Joseph Massaro

changed this, long Emmanuel, in don't confident, has X% think framework. term growth to at of on all. sort X% anything We strategically remain the over there market very I

are We end. the at lower

imagine, As the affect constraints, chip obviously, you can the tech-enabled products.

about X%. we've we still very of perspective. we So, material confidence confident but in I degree a changed have as lower go lot, as range. end say that has but that at talked perfectly from And And we X% that straight term, a anything are shoot the quarter, to year, within into range that high long wouldn't number doesn't every the the of

Operator

phone, to now next move We'll comes our Credit question over which Suisse. Levy the Dan from from

Dan Levy

and A couple on on One Motional. out-growth questions. another of

haven't products anything this First, on growth maintain we seeing really year, post out-growth. as quarter. you I your know next [indiscernible]. but to time, probably more Investor And it's fourth accelerate as XXXX COVID bookings mature. Presumably, did Day of SVA. at harder into mentioned related get to in some opportunity same And you see been the we there's But

your sense the X say the about to a points outgrowth X that you've what meet that beyond bookings of XXXX to talked of ability you can maybe about. timeframe So, give us

timeframe? So, how about X do think and beyond XXXX that you to the bookings points X

Kevin Clark

challenges creates said, of Joe given and choppy a amount As year, limits of a environment supply year, the first near-term or of semiconductor part this and bit last the then the shortages, visibility.

we They everything However, high that's want or them. acceleration going see that connectivity underscores dealing challenges ADAS you're these Whether really products. in that's to view of that solutions, electrification, right? with want of consumers those technology see adoption, whether voltage through an more going our that COVID

points confidence in term X a outlook reflected level us it that's frankly, to of gives that's X of the bookings. a what's from And our over what's long XXXX revenue beyond reflected So, And growth our high market. in in standpoint. quite

Joe? is team that management level So, of outgrowth. confident very in

Joseph Massaro

Yeah, areas I outgrowth. where agree over time that watched safety, that. to need growth CAGR that active drives key you at at bookings be with ultimately the type high completely term connectors those as X% we or above the element sort to what we longer look is the of And know, X%. you when business, the carefully the And around remained growth Dan, voltage, at bookings have exactly components, engineered because

of a again, that confidence level very got, range. high in outgrowth we've So,

Dan Levy

we would when that in bookings? up SVA, see showing The

Kevin Clark

consolidation evolve Remember, effectively evolving controllers, global, major – – like to – with right? started a Dan, talked with now with European solution, to the evolving or controllers. compute SVA So, it's is and European-based global booked domain It's of It items cockpit OEM. about we've an a previously. that. program We've it integrated continuing controllers, already zone

We have a in XXXX. number during front of potential us program of wins

on The to solution in our from XXXX. focused there's that. separate more vehicle that we launch come team And program hardware that awarded will So, previously has PDC lot were software. activity on SVA we on our where a then, a of

you should think of months, commercial next to revenue. XX and commercial the I the opportunities more progression over XX visibility to wins, get So, the the

Dan Levy

past was in than goal – the out Motional. or follow-up a milestones then, you between watch through should to steps want us others, commercialization, be rather really that walk we on than own between now just fleet, now ahead just running systems provider and fleet. rather their the the on believe a could broadly the that to who commercialization. I And operate you Maybe to and Maybe for key XXXX

it us but on a you sounds maybe So, network, running yes, your Lyft sense of the like it's you because give it where business now like, can seems are focus now the fleet. is just

Kevin Clark

changed. providers hasn't systems their for on full about OEMs It's the vehicles. fleet or stack overall and software place in put really the to providing No, Yeah. strategy

providers. the So, better that get and technology partnering we're strategy real rideshare has we validating of that the and operating ride not world extent sharing networks, networks those operate changed. customers ultimately, benefit in the situations our the or To who understanding,

it relates partnership Lyft. technology, information to fleet it it So, of experience, a sharing we management lot great have of as consumer There's relates as to a solutions. as relates to with

better. and them we'll that. allows to be better And it So, us be do to continue to

next couple gen doing customers the – see world of on you'll validation which happen available out XXXX. shortly. one road technology. almost the it's the in are on the real road, Gen or of very which for key over out the – will underlying milestones The very, it's So, years testing, two

year over be that. to purchase It's the significant we're that a into team So, vehicle. that on of technology technology plugging more platform. away And The or vehicle partnerships, the commercial is HMG networks. whether progress other little announcements an calendar making underlying then, on XXXX, related a it during electric battery

Joseph Massaro

going the to Kevin, as be we'd expect – a just comments this also we'd your Via remarks, say to was to launching – determined. prepared city well we've year announced be to in one I on

Operator

call back Due time for Mr. don't for I'll to over and have the ladies to Kevin we further gentlemen, closing time, comments. questions. Clark now any hand

Kevin Clark

a thank support of appreciate you, Well, of appreciate everyone. Have Aptiv. you the We and joining We a day your good safe. Okay. call. our rest good Stay week.

Joseph Massaro

Thank you.

Operator

this Thank your Ladies you does for and call. gentlemen, conclude today's participation.

may now disconnect. You

Aptiv (APTV) 3 Feb 212020 Q4 Earnings call transcript