Earnings call transcript Q4 2022

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Operator

Good day, and welcome to the Aptiv Q4 2022 Earnings Call. Today's conference is being recorded.

At this time, I would like to turn the conference over to Jessica Kourakos, Vice President of Investor Relations and ESG. Please, go ahead.

Jessica Kourakos

Thank you, Lynnette. you Aptiv's thank earnings quarter and call. conference morning for fourth joining XXXX Good and along portion related presentation, release press The tables, found at the website can with on Investor our Relations of aptiv.com. be slide the

the our review are for other items of and earnings as our back operations Aptiv. QX and amortization, GAAP included between as continuing special The the financials our reconciliations presentation exclude full address and slide Today's outlook and of release. of press restructuring at year financials XXXX we'll non-GAAP the well measures the

certain During and of information, posed by today's Russia. SEC the call, may reasons we disruptions will pandemic, performance, our COVID-XX and financial the cite reflects be be view other ongoing providing Form current we including different supply and chain for forward-looking conflict that filings, Aptiv's uncertainties and the Ukraine materially which between future in XX-K

Clark, and Business and will cover CEO; the Aptiv's to the Joe be and us will will Kevin financial the Operations. Vice Joining Senior update business, provide a and Q&A. in we detail Kevin open today before on Chairman call more strategic CFO President results Massaro, Joe of

turn to like over I'd Clark. call that, With Kevin to the

Kevin Clark

thanks, joining and everyone, Thanks, Jessica, us this for morning.

kept technologies, three. advanced slide customers as growth business connected bookings well over year our XXXX and our on begin of environment. with as Let's flows strong industry-leading in our market, another was record that's execution portfolio new this driven challenging continued by

of XX of billion quarter, production growth smart to architecture by active bringing vehicle over and significant full XXXX representing during points. vehicle included driven points year $XX billion $XX.X our safety, Highlights new of XX over the bookings, business for market growth awards. high-voltage revenues,

partially $X.XX, will which share Operating recoveries, greater for year cover and growth by detail just a COVID and chain earnings benefit income per disruptions, costs Joe little under supply reflected ongoing and to the of $X.X customer revenue offset later. related billion the respectively, strong of and full in

with expand the Automotive, which the well on also of We operating I'll our our on Wind Intercable next portfolio closed to enhanced of of fourth slide. additions and connected enhancements during quarter. model the these, as River technologies our as and safe, green both

the fully we operating customers' our challenges. both to model electrified to industry solve As to to further transitions enhance vehicles, industry-leading our continue software-defined and capabilities our strengthen portfolio toughest

and sell design impacts increasingly by it we As functional approaches after way both domain-based legacy aligned our architectures and are smart vehicle the solutions. replaced architecture,

means design, the further us This therefore, account-based stronger development deliver resulting in those greater and more the needs in ability by relationships their all One across to to optimized our regional our system and, and further to positioning strengthening our portfolio, quickly engage capabilities model, model, solutions. customer process earlier closest enhanced from effectively Aptiv specify local our and address full capture and value empowering We to customer efficiently. increasing operating solutions

has levels, efficiency, Additionally, rollout insights customer Promoter and the service Net our actionable of improve to increasing intimacy. System resulted our thereby continued in our resiliency

our to execute actions to future and current chain and giving on supply in ability through Lastly, proactive keep confidence connected contributed to disruptions, ability related to initiatives them risk our platforms. mitigation our customers have significant

position we're electrified vehicles future. we demanding innovative investing the ourselves software and At same that that recognize the require and new for organically time, defined solutions will consumers to are inorganically

while for cycle also models. business software River market significantly platform capabilities strengthens Wind new an in enables full for reducing software cost the streamlines unlocking time with cloud our life our significantly management Our data speeds and vehicle, software-defined deployment and acquisition to development, of that industry-first customers

North Automotive high-voltage provides expand near-term China. manufacturing and synergies as capacity and enhances Intercable in portfolio busbar Intercable's The we and technologies of acquisition of our interconnect in America

save in we've make that and organically structural help effect while These that electrification battery investing these portfolio XXXX. expense, also systems. efficiency management cost solutions roughly initiatives, power position integrated underlying expand further To Lastly, electronics fund industry-leading implemented further allowing improve our our cost such we're of the reductions million structure as will high-voltage solutions which throughout us will of for outperformance. investments actions $XXX take in full Aptiv long-term annual to better that

of a smart OEMs. with three and nowhere across Bookings our the Power record track of As user evident new record record $XX shown XXXX in business cumulative over year's bookings is five bringing our billion, on billion a Slide increase $X.X bookings totaled by awards bookings driven Group, from last an for of experience our than billion solutions with central OEMs, products and our of including vehicle Center portfolio Volkswagen billion. Data different advanced customer different over customer more awards SBA since reached X, safety for to $X strength launch billion, vehicle architecture record controller and $XX performance. X% the $XX

$X.X hardware advanced representing a of combination Aptiv of OEM and bookings safety platform European-based features. an wide BYD, represents to which from as turnkey full perception billion, seventh award large well a OEM Chinese scalable range awards, the global customer next-gen as the blocks building to efficiently well including Active select support safety of software system a as as

up A both several continued OEMs, few electrification including engineered ago, our components architecture in in since new XXXX. American lines, high-voltage including roughly years to result $XX solutions and billion bookings our of Power the $X.X XXXX. from is bringing North voltage cumulative $XX of growth $X billion low reflected with awards year, architecture, strength high-voltage vehicle vehicle reached mobility customer for billion markets. bookings since $X fourth The like billion product providers electrical of billion cumulative safety bookings bookings, and strong portfolio European new $XX from billion adjacent in a in the of a traditional of business China-based just a record across major booking Solutions and and awards the American, Signal quarter commercial strong active OEM representing the North record a

Our to clear new unparalleled continue us ability during to challenging industry-leading line awards resulting XXXX. win roughly of environment in with portfolio, combined positions to $XX sight programs, highly complex to even business today's our execute of billion in business,

Slide Safety the to segment. OEM. full a their launch X stack global Level & User the to high-performing parties other to to own as a system hands-free a experience. we with and is third to open ADAS Moving successfully provider Beginning business past Advanced deliver great the as our Experience applied highlights. technology to review a capabilities year, This with This leverage innovations, driving as our allows Aptiv from segment European-based became first of and active well full unique, OEMs example approach, those well which model safety flexible system platform as X+

also course engaged software regarding customers River's over of several confident will We're awards cloud-native which platform, deeply commercial XXXX. Wind lead the with we're to

Power Solutions & Signal to segment. Turning

XX with production. vehicles, bookings be new XX% to for industry-leading of high-voltage electrification referenced continue for high-voltage solutions revenues that $X.X the segment's over over vehicle bookings, prior I the the management. connection the positioned perfectly the distribution, business accelerating We an on battery increased of demand multi-voltage span XX% year, points cable total billion prior over electric accounted of and slide, portfolio Reflecting and

North integrated be pipeline electronics a in where and award XXXX. across as will our power solution platforms from management is and a global bet customers evaluating traction all new a are similar American-based BMS systems And addition, growing. a battery the electronics demonstrated solution their beginning gaining of offerings the OEM, In significant in used power of by deployment

awards awarded. of record execution, track supply flawless new chain been bookings driver our business recognize the service, recoveries level customers negotiated customer and Our cost is which received. we we've behind record we The the quality and of a

vehicle have enabled pursue to margin years us come. opportunities Our full to that for high-growth margin us outsized continue to accretive revenue to system expansion growth position solutions edge-to-cloud deliver and architecture

At platform, these a functionality X. over software life of Designed tool speed, the improve CES unlock business we evolve platform, software unique industry's this River integrated showed enable year's life, improve and how powered the to fully efficiency, first with of DevOps full the and We vehicle end-to-end Moving new vehicle the capabilities. Vegas, cycle by and software-defined models development cloud-native vehicle. to debut software vehicle demonstration and brought solutions event chain quality Wind Aptiv's vehicle Las in showcasing to stack SBA. Slide

road We public also and showcased turnkey our KPIs demonstration. Gen X a platform, including ADAS differentiating

XX% Our efficiency radar-centric and vision machine artificial is than and which the of efficient, in cost to effective equivalent energy XX% robustness a utilizes solutions. and solution, resulting more learning agnostic, can intelligence up vision-centric the availability, be system, to solution that more perception increase

to continue our we solution. Vehicle readiness Smart of commercial Architecture the Lastly, highlight

of convenience of demonstrate our in-cabin into in by production a First, greater us for wide as the and well comfort integrating fusion features vehicle, and sensing, it a exterior experience passengers. as safety, user range resulting to which interior deeply enabled

these through complexity, second, which how solutions. our demonstrator, And latest while mass, advanced firsthand SVA architectures guests see reduce electrification weight showcasing enabled high-voltage our also and to

With XXX the tailored partners for pavilion over which reinforced the deeper, visiting Aptiv engagements, the set year, growing pipeline suppliers opportunities earlier. of XX commercial and I our this XXX CES we stage customers, and referenced more

slide to eight. Moving

for wanted Before very on year foundation expansion. I our new growth from on detail. bookings, more a to Joe to will Joe, market margin revenue call XXXX, touch XXXX, strong I Building over in we outlook cover for expect turn business the the over and which

in resulting value model Our portfolio sustainable advanced are creation. technologies robust and business of

to continue operational flow our operating basis widen to This and and moat a by strong XXXX as expansion growth XX investments production that to in us excellence. growth. points over even outperformance demonstrated where We of has our in our with we production, X advanced capabilities cash technologies strong environment, to continue competitive enabled margin points drive expect and outlook, vehicle demonstrate weak of XXX

numbers that, the go detail. call to to the through Joe With more in over turn now I'll

Joe Massaro

fourth Thanks, Starting nine. the slide Good quarter recap of Kevin. on with everyone. morning, a

representing of As growth over business underlying the quarter, XX% XX $X.X production. with billion, revenues prior in highlighted and up of earlier, vehicle drove above year growth the points strong

continued constraints across semiconductor disruptions both supply China and impacted COVID that chain in The despite negatively production. outgrowth customer was segments,

respectively. and increases were points million, actions EBITDA and XXX prior volumes, cost on versus $XXX and Adjusted benefit $XXX the customer incremental taken reduction reflecting of in material income expanded year, operating basis direct XXXX. flow-through margins earlier cost recoveries OI strong of million

exchange approximately was year, foreign quarter, in million chain costs approximately basis negative the the favorable headwind. reflecting Supply disruption XX points prior were of $XX by and from

the by the overall increase a to The over impact offset an of on EPS increase income notional prior interest was Wind and interest loss of driven $X.XX, was EPS in the $X.XX balances maintained cash higher expense year, partially earnings. and $X.XX, from higher growth by XX% an last quarter River, from year. earnings prior tax expense closing of

operating Lastly, $XXX cash million million expenditures capital were the and for flow totaled $XXX quarter.

in more revenues quarter fourth detail on the slide at Looking XX.

broad-based was million. across disruptions Price despite growth Our approximately continued recoveries net China the commodities supply was chain constraints. favorable and and downs in $XXX all regions, cost by

approximately quarter Foreign million exchange quarter $XXX the China in negatively shutdowns was $XX in and impacted million. late a by negative revenue

driven American by strength points product high-voltage a and safety macro From both in acute North segments. adjusted up X% And perspective, by lines. In in were be chain continues XX% revenues concerns, XX%, revenues growth China, by to XX or regional was constraints impacted our active or supply market. which and over driven above were up market, Europe, XX%,

Advanced Segment in or of vehicle Moving income the slide. revenues the points and to rose Safety XX% underlying adjusted on was XX Experience production. operating User over next incremental XXX% volumes growth favorable quarter the the negative over partially year-over-year, foreign well by in the strong offset reflecting up quarter. impact price on recoveries, net exchange flow-through million, as and of $XX segments as

negative or Power improved commodities period the by supply chain driven lower rose that in points incremental and by revenues net income XX market. Signal impact. disruption operating offset volumes, recoveries partially the and above favorable strong costs Segment flow-through XX%, price on and XX% FX

Europe, and XX forecasting flat approximately China units X% flat in and we North down Based at global our customer Regionally, approximately for approximately million production million million global or XX America schedules, vehicle Slide for of decrease on XX units; to a X% are the we units. expectations now reflecting at million units; expect XX production. of XX Turning approximately XXXX. year

macroeconomic constraints discussed As in year, supply certain of of chain impact the fourth well as disruptions, cautious during including we of we quarter last particularly continued impact customer as the of semiconductors. remain Europe considerations, about the

overall customer we Although acute particularly and America the sequentially, constraints, in improved continue has overall North to of impact levels. supply Europe see that semiconductors production

Slide full find to Intercable outlook, XX, year Moving includes which now you'll River our Automotive. Wind XXXX and

market. XXXX at revenue compared the that to Note acquisitions. X with billion, growth market expect to excludes impact in We of $XX.X points of the range of billion over up over $XX.X our the midpoint X% growth

billion target supported our income confident demand EBITDA of by advanced we over in of COVID high-growth success reflecting X% supply be our billion As strong share, estimated at our earnings in on and product costs. expansion continued for the $X.X flow-through is XX%, market margin product noted technologies. $X to continued and volume approximately and expected multiyear disruption lower chain midpoint, lines high key growth, $X.XX. to remain amortization portfolio to and Adjusted excluding growth be previously, operating are lines in per

growth of driven over the The XX.X% offset increase expected of Motional partially of EPS rate loss represents and earnings related $X.XX by last in net to a higher XX% year. strong interest $XXX an is growth, tax increase by expense. million,

the higher well during year. earnings We operating flows improved expect capital of XXXX the billion reflecting working as as cash $X.X

expected of well-balanced to we in With continue to investments million deployment XXXX, prioritize will continue advanced or our portfolio Capital we to to record to X% as business to awards. revenues capital for of the the maintain technologies new a business approximately support capital year. and organic $XXX are expenditures allocation be respect approach in

to and and nervous M&A the and access across speed our of system the enhance market technologies focus on markets. new strategy accelerate our that scalability transactions vehicle, relevant brain with Execute both our

offset to as extent will will our sheet we the to we financial had stock to we it we market maintain current of repurchase, XXXX opportunistic policy, assumes in XXXX. of disconnects, take the continue advantage our to balance be while our dilution And share XXXX can compensation prior practice in impact our leverage our via buybacks, guidance share in to relates To cash we end, that returning a place shareholders. profile

we of XXXX a to revenue XX, with guidance revenue. slide XXXX. provide compared On operating and Starting bridge income as

of global over net revenues market, the billion. growth $X resulted decrease in in with production, contribution Our over a combined vehicle to

FX of a $XXX commodity River And Wind index at year. and The cost price the expect full year is benefit approximately to direct recoveries contribute will million. negative Intercable $XXX changes for we downs. material in effectively offset estimated and lastly, million

operating to adjusted income. Turning

improved approximately by We of higher before recoveries expect margin volumes impact points XXX offset benefit basis incremental acquisitions, the of and of XX% strong on downs, incremental price inflation the continued flow-through expansion of and including cost than and by are driven partially estimated commodities cost in of and negative customer increased other reduction operating well XXXX. costs which disruption offset manufacturing in as indirect more as performance, labor direct supply chain a by benefit to million are costs, performance, the saving actions, are be $XXX

addition for Wind and XXX will margin reflecting expansion of XXXX The incremental points $X increase year. margins Intercable over income the and operating to XX.X%, or of XX% basis of River billion,

hand call back With closing that, to the to for I'd Kevin like his remarks.

on line slide opening the Joe. Thanks, wrap up questions. XX I'll up before for

technologies. green management our that of and the differentiated and our As XXXX, highly reflects supported by connected a clear portfolio accelerated team safe, competitive moat it's commercial on we strengthened momentum,

execution, the strong Together with to that positioned never provide of with vehicle. industry's better our software-defined full the track Aptiv advance solutions system our record been customers of has vision operating

reminder, Investor XXXX Boston, where to industry a our in in we and how usher we'll on provide February next hosting business of on As phase our the strategy. view we're Day our XX plan the

in deliver I'm and we closing, during been XXXX excited the team never more proud the will about what Aptiv In ahead. have of what accomplished years

is As yet here to XX, come. you'll in on the see February best

up Operator, let's now for open the line questions.

Operator

Rod And question your we'll first Instructions] [Operator take from Lache.

Kevin Clark

Rod. morning, Good

Rod Lache

Yes.

of economics have first $XXX additional So, is price. labor guess on you for I question bridge XXXX, depreciation your my million

or -- $XXX we're in I'm environment just at these lower just or $XXX you performance to do seeing still that was the of light still this offset disruption of inflationary million you ahead about point is You And million of with wondering get it of and million costs. of and of either negative. that think what pricing disruption some headwinds. start kind costs recover $XXX

Joe Massaro

$XXX we from price obviously million. top offsetting have year, see our I I that line start. honest and is benefiting working, you I are mean this year mean, pricing the to We've or vetted full effectively inflation, and ahead downs the on Joe. labor is it, which customer it's inflation right? perspective, from recoveries offsetting in business you. equation line. of top out the with I'll a Rod, think material effect Well, be gotten a Performance

So can I think view, our Kevin and jump in.

hard I the to P&L. get started think out team of pushing performance great the that costs working And through. up, direct is our supply has including a material disruption chain we've view done the job of to get costs

Rod Lache

had maybe million my over you I I $XXX Yes, least quarters. of the sort about of positives matching And that to in I when to you'd it, say you ahead clarify question, six of optically, that negatives. like that Joe. are bridge? talked recover means just Like think my at guess, disruption looks greater mind, least than when the It they're at when at the look start

Joe Massaro

Yes, offsetting. down XXXX supply the taken that million to costs. about chain We've outlook. we $XXX Certainly $XXX of disruption million with ended in

still assuming operating December, particular, QX, continues It a heavily we're certain and customers, with disruption obviously, seeing of COVID. So for difficult to was costs. $XXX in be some in we're disruptions, environment China disrupted still million

we I it. to work So through think continue

talked to I four six right. sort about had think We quarters. you're of always

a pretty some to through, we've big in but XXXX. feel we've continue got So work step to like made here

Kevin Clark

Yes. it's Maybe think a can if I great I add question. on,

you're challenges ahead getting to have you what of the getting of ahead full about need you one talk predictability better think I of. of when it,

predict. to example, That's to on you employee China in COVID. point specifically was in base an suffering XX% our think XXXX I the give of Joe's of for tough December, fourth roughly quarter

a our keep ultimate where same reactive somewhat customers always in going right? at happen our been the objective, in being COVID stand. predict running which environment supply connected, standpoint efficient has way we can't an to our and time, chain So from able and operating Yet a to what's less we keep or factories were

Rod Lache

when And some in the by that. secondly, announced River going you the And costs operating terms. were the deal, just talk financially you that? to in what that expenses and forward? a maybe bit Wind talked you for was changes about implications Thanks recurring about closing what meant the little your release, of you hoping can led I

Kevin Clark

Yes.

get We're I we largely light in that changes to think but growth a revenue that, dilution the standpoint transaction. a some going there not results to needed the River Wind operationally, margin unchanged. renegotiate And are standpoint, to all from net were accretion make. the for standpoint, remain we specifics, of into a position in

Joe Massaro

Well, to the due. relates Yes. think part price only reduction costs, particularly and important, a thing the nuance, the it's said it's I magnitude was of it as in but the we

it's correlation the between amount of So not reduction. a the in of increase expenses and sort the direct

did, So River. sort us to view in – the remains an Kevin's the point, but in the of it to release, no in it's the to opportunity outlook long-term on sellers deal And about strategic long-term opportunities we or again, as we Wind talk press pricing accretive this year. said our changes gave our

Rod Lache

Thank you.

Operator

hear from Stanley. next We'll Adam Jonas from Morgan

Joe Massaro

Hi, good morning, Adam.

Adam Jonas

Hi.

down follow-up seem normal like kind is it you because to that PMI given wonder disruption some course. back at – kind if the because they've index chip the companies I in X% channel its want -- of timing does taking pre-COVID of Just seems surprising about implying down buildup for running look Rod's to costs more and seen question supply to shipping case production back just are to terms on of shipping guide in logistics people, levels

worse. that of highlighting implying implying that companies, XXXX choppiness, some are still you but and seems so couple a disruption I there's mean, I And production in you're gets it understand bad you're like a Help implying were it worse gets headwinds, that's XXXX. terms in last comp you're things So net how weak [indiscernible] year. than pretty that right? because in comp, pretty me of respect

Kevin Clark

X.X forecast, about especially business, X, you And off vehicles we we're look build talked we've on when X, nature globally. past, customer schedules. one it's when our in and as our guidance at business, listen, Adam, of Yes. every our provide the our the SPS in

market. we get good view a underlying very to So the

suppliers when We given availability on as XXXX general more the very evolved standpoint, constraints. and I they've who an it's look a And the to get challenges at causing semiconductor much XXXX, you focused ASUX are a good our business to XXXX, going nature XXXX also, standpoint. to on really supply then what's think of overall than semiconductor from supply rather from view constraint chain specific

XXXX. we in that factors the expect outlook past, certainly XXXX. two into are we as is It which they're customer overall in for effectively, the on to And And Joe the again, based continue was year, those full our case said impacting schedules that received. the

Adam Jonas

just products that. of to in in the connected. All XX% kinds you're to right. you. wants ultimate form broadly. And with is in seem doing and to of Qualcomm a flattery. follow-up. wants and software compete recall a Imitation Mobileye kind defined quote I rate safe you ASUS Appreciate and ADAS of on used the win type

watermark, I I in familiar, a that may in now the trended seeing but competition X? that you're recent sounds right. was high be think has quarters always kind forward creeping that too a how on of bit that the felt high,

Kevin Clark

Yes.

to comparison a it's a an it I unique what or depends full and perception a a your example, system think whether as solution. platform a solution, system, trying to make, solution you're it's on baseline radar

continued has haven't on platform the and years. math Obviously, say, high a last pursuit or it's seen done accelerated I'd increase on relative several the still to relatively ADAS I basis. we haven't the penetration over win. to

I where on efforts would winning. in high of areas likelihood investing very a say focused those have we're our we

But we bookings based bookings would outlook XXXX our our not in position. So relative I growth ADAS quite say, a in at strong it's again, of have reflected continue market. and would that to platforms, still continue to very revenue sort if high. pursuing to for relatively it And on to sure in it's XXXX, be XX%. I'm approach our

a very We've in X It the customer It's already open award. available in ADAS And it's provides our an platform, well it's I cost mentioned which as SOPs effective. my It modularized. for And be XXXX. system. OEM -- Gen had flexibility launch in provides for XXXX next-gen importantly, lot will comments, ourselves, of as for one we'll customers.

believe we're to significant continue to we So demand. going see

Adam Jonas

Kevin. Day. you bring I'll guys See Thanks, on the Valentine's chocolate.

Kevin Clark

We’ll you. see

Joe Massaro

you. See

Operator

from next Bank of America. John from Murphy hear We'll

John Murphy

your been Good on morning, what of probably here recently are a how I'm volume drive and price EVs initial guys. customers be of to significantly going There's lot think that curious action some of in relative by about XXXX. opportunity kind you just might there to higher expectations. that

Kevin Clark

Well, portfolio bookings been record been we've Obviously, listen, even talking stronger and doing right? surprise to had strong, from had about year if electrification high-voltage it from electrification a we've be we high-voltage and we what another continue XXXX bookings, bookings a standpoint, of standpoint. us wouldn't

and we'll So, focused very opportunities with taking have battery electric said very, the Having they're past, up over said on and have in generate OEMs risk. which we've financial lower those better vehicle significant high revenues pursuing we as a we're meet platforms for a that, schedules ourselves that see, ends optimistic. that that going we're platform, confidence who they're to their effectively obviously, a proposition globally, level

Joe Massaro

add being We've XX%, seeing in as we as based just I'll we're north XX% high the a obviously, today opportunities well customer voltage. lot Joe. it's portfolio. additional John, about Yes. rate the growth Intercable XXXX is on of a talked got in of and, add. schedules north

or mix advantage take So on take I we'll to be of positioned schedules it. well strong see to very that today to the very increase price rates extent increase the of think, continue actions, technology, a the sort

John Murphy

Got you.

expectations. this like you thinking Okay. XXX,XXX guys are mean, Y, look and mean, I than I I And stuff doing a year in I it's those backlogs. possible, hundreds We're not if X and EVs be that's I to mean, on given more three I numbers millions stuff price here units you your this the mean point. mean if cuts, of Model manufacturers to mean, by now. at talking that's expected? the at real the Chinese we're it's might like the years mean mean five of and about another heavy kind action about I like thousands, the relative I not the talking here. well.

Kevin Clark

Yes.

heard on Joe I past, customer based schedules. say you as the think in forecast say and is me our

extent So we we from into when standpoint, those up, flexibility, some when put benefit based on ground, business, initial to capacity a it's pursue the schedules but the obviously, we'll there's revenue go we a And what like our customer schedule volume a with demand big customer Tesla standpoint, for so see from will we see players and uptick if in standpoint. again, others, them. scale

Joe Massaro

date, happened those the schedule but weeks, happen, point. to saying couple they And yet. John, of at material changes in seen last have not haven't moves this actions big seen won't have Not we

John Murphy

for that or just the mean last does volatility one remorse And have then some a quick it commercial automakers on recoveries were like of on schedules it recoveries, around little follow-up I seem a bit raws. be little mean, sentiments bridge. I on almost the the bit high year, whether

but is some discussions tougher. generous be year? Do wouldn't to expectation expect I them they customer in them mean, what a call be mean there year kind you Do year I they little were bit a been more of those going your -- this this tougher were year, realistic bit I they're like I there? there might these be little mean discussions in last to think and at the moment? reversal are what than last decades. you have I

Kevin Clark

all pricing they're environment as industry time. John, always you tough with It's a tough. the an said,

customers, less you're to two, to do connected; done by their with never would easy. conversations So solve keeping our are is do that providing solutions. continuing to toughest them them are value those not to say focused those one both we've conversations able in the really of are -- then solutions challenges but And what they're And those, what extent that cost-effective and to are past they're difficult. we and I on bring the never difficult,

great And go in delivering Joe a XXXX, and both job those our continue at that's And record discussions XXXX. negotiating team and the bookings. process those having outlook mentioned, job. same outstanding an did we'll through a time, increases – -- the to did in the team those price

John Murphy

guys. much, very you Thank Great.

Joe Massaro

John. Thanks,

Operator

from Bank. Deutsche Rosner Emmanuel

line Your is open.

Emmanuel Rosner

you Thank morning. much. Good very

Joe Massaro

Hi, Emmanuel.

Emmanuel Rosner

I of couple questions can. if A margins, on

First the quarter. one for

anticipated, the and revenue I you margins over than within a bit else? And disruption of some China, solid COVID us pronounced. we softer very specifically factors heard this? maybe go think in back be it seems U.S., the quarter. please to speak of especially about quite had quite were Can anything of for the I obviously you outcome

Joe Massaro

Yes, Emmanuel, it's Joe.

we So be It impacts question. this both bit quarter continue of You're working the to Rod's very speaks just on as customer shutdowns right. at of end we're just right? a a think mean I us. deliver as to of the line, China, very continues $XX-plus from through little million and top to well the sort environment, near I disruptive around

we Kevin the fourth people come our of XX% As in mentioned, down quarter. had of COVID with XX,XXX staff

So through environment. it some as the we very production as lot customers of in We production. a wrestle got still that and US a well, chain the saw was of disruptive the stop-start supply challenges,

sort ASUX. million And, disruptions of FX XX fall points, So again, call that, of quarter. those that the impact some think about call combined I heavily $XX basis the with into that, in you mentioned

same. I it's to more extent, some think So than the

the revenue an operating and end hard the at end or back, But day. environment. day, we to at out disruption revenue be push what the were extent, some of year, you the think over able the compounds inefficient of come the do run cost it's just time, us which, able to businesses the of the run saw this most perspective, to I out

the of don't hoping as XXXX. million again, of the But to improvement. part north costs XXXX, sequential as left for to some with year, disruption and improvement. room We bad costs seeing about this. ourselves that's think P&L of for did million -- $XXX We're for to in sequential just disruption we next right? certainly deal of we it be leave will And guide, give COVID $XXX We're continue

Emmanuel Rosner

half customers extent some with XXXX. versus commercial the recoveries are half second the in performance of more the to of you Okay. and That's look agreement price the had then, second XXXX helpful this guess, us the you, as ways follow-up, color. was, a guess, think maybe, encourage upcoming year And I one at compare I I I it, who benefiting think, of you that the to of

guess, terms of for off, that. XXXX base a And you margin, to I second sort versus we the of do good is understand guidance? feel what clean in takes to puts which as of what try half like build sort would like and your

Joe Massaro

Yes.

question, spent that. a time that's I at good we've think looking and

I then think XX% think the XX.X%, the of it, originally to X.X% we to about and to XX%. about talked way some with FX,

we think point. off jumping good XX probably a as So about

of you of some reduction you you within at supply think think I look see with captured that, of can quite You of of XX.X%, XX.X% guide, if chain sort pricing, at you right? the cost, in COVID call the what you -- I that get -- level. and we've the look it, to range of can honestly, -- benefits that, the if can sort the sort up

some of down of which of then that that the and the we You XX.X%. sort work some how think FX mid-XXs, about is really sort volume changes, of

I think sort we're of there.

back generally built we we the point, and covered at think I sort right the within of think sort jumping of guide. And XX from I speaking, have it there. off ended

Emmanuel Rosner

Okay. Thank much. you, very

Joe Massaro

Thanks. Yes.

Operator

hear Citi. Michaeli from from We'll Itay next

Itay Michaeli

morning, Great. Thanks. Good everyone.

Joe, a this I as XXXX. expectations strong talk And about expecting hoping safety. talk you're our top could line both very share as what growth, throughout booking me. was secondly, year. for after One, questions about the you for Maybe expectations year margin well active for if on two Just you cadence

Joe Massaro

Yes.

bookings. with start work way down. my I'll me Let

little of Kevin presentation, sight mentioned, generally billion XXXX. should think I was would call in another XXXX. mix $XX As a be Kevin's expect the profile, bookings the that proxy. of million current is sort be profile $XX pretty voltage. active safety, think in -- we but in we see and can continue good But SVA probably always it, high with a lumpy, of it to, in line -- growth consistent obviously, I to say They

of Again, in next target, bookings think, that, been. want But but lot what we're and to new, lumpy. provide a which for is we are the confidence proxy, a best have did always year, seeing. They probably something we've I is got obviously,

think cadence. year, want going FX SPS got And From not costs growth XX% SPS range, But by about. I'd of the about you in growth year X% market, market that to and about talk margins ASUX year growth about to some go sort margin of you a if I through and But disruption work margin. sort the OI full full and the think -- quarter-by-quarter, again, over segment we've of full perspective, segment around I'm we range, full XX% at market -- over talked XX% then have would that growth over obviously, to in full X% to I'll give ASUX you X% if at to on or year. year.

Itay Michaeli

Thanks all. Very so helpful. That’s much. Terrific.

Operator

We'll move Delaney [Operator Goldman next Instructions] Mark from Sachs. to

Mark Delaney

questions. for the morning. Thank taking good you Yes,

or Do may First, on more stop of to XX% given get the inflation to moderate. back lower the margins evolved last you discussions were Do historical pricing start with passed extent schedule actually EBIT think with cost of input get how that some things on out customers those few costs into to pass-throughs. Aptiv in the you and could volatility margins, type years have the target now XX% think environment to the OEMs.

Kevin Clark

mix high-voltage of a we've of sit, Intercable that. whether standpoint, River solutions, more if think away, ADAS last the back of what disruptions our Listen, when we get significant more goes margin what to the actually from couple ability inflation Wind and the I you then the And done definitely advanced where above benefits was. over material electrification, years portfolio we trajectory have that's the and that's to go overlay historical and

a it's So of combination both.

Mark Delaney

you. second was Thank helpful. on That's Wind question River. My

expertise River with to Aptiv's types but particular, bit have the could automotive remarks, on in a Aptiv spoke with and do elaborate this you help more given already Wind this of specifically You improved dialogue relationships customer Thanks. industry. on that prepared all the companies, will in of year what

Kevin Clark

Sure.

with year developing going signed ago as discussions. working And as automotive reality, our final a in commercial in we River both in commercial over the So a applications ago. have over together, closely terms teams back, for Wind agreement year well a of product been in reality, and well

hit we've over significant the at time. say hit I'd has traction a the in level last this quarter or point so

of So across introductions a regions. various number the

at automotive mentioned Wind engagement very region the confident optimistic, several think River's in this announcements space. of I'm you'll in point we're penetration level see I in OEMs XXXX time. and that And prepared in I my there's every deep comments, very a with to of with as respect meaningful

Mark Delaney

you. Thank

Operator

We'll move next from to Evercore. McNally Chris

Chris McNally

much, to team. Basically, Thanks what's follow-ups so been already asked.

just there. that. installer On talk there's system. But want one seems probably big to of multiple billion perception various Tier historically, majority the with computer the confirm ADAS been Xs? perception you're like $XX just you've obviously, billion, about such I number. a you wins, a is the compute of of $XX business out some I diversification think could It providers. winning

Kevin Clark

solution, Yes. is Chris, two perception ADAS platform another just an of to where clear, into business, there's our into buckets. solution. -- to-date integrated Mobileye with solution. bucket bucket the are has been traditionally kind perception Then I a system put ADAS systems our One be which vision

in those could and providers a variety And fact, cases, be particular actually vision it is. of in

developed it's agnostic. we've Gen to first, developed we've -- real platform is vision ADAS The mix. X a be that So platform a

the provider OEMs would utilize have select to to So vision platform. the for overall they ability what like

Chris McNally

XX-XX? one versus sort great. it bucket is put that's No, the two bucket of Yes. fair Is to

Kevin Clark

say, a closer I say, No, XX-XX. XX-XX. I'd to it's little would bit probably it's

four overall ago, have as we roughly ADAS a OEMs. that growth we ADAS back mix well XX If Today, as portion customers, providing years of that's in you of had ADAS a go the and XX to solution, solution customers. platform

Chris McNally

super to on nit going then, just Joe, pick. this of Okay. the and And a That's bit a be is question production, helpful. little for

can your you a by it average us you production? guide remind how weighted Just your by revenue? customers, global Is

XXXX, We looks the weighted a obviously, global average at at of X% average or of reasons, we all what look X%. when but X%. also you maybe look of to One I low minus X% think, called production

sort I just am able upside? to wanted global X% production, revenue we a a get X% flow understand, full of or through I X%, So to if of X% type

Joe Massaro

towards Yes. Japanese taking towards Chris, weighted in don't means lot It's us, production. obviously the and we're Japan basically strong. it for Japan. OEs on We do level, high a our That production markets out for where weighting basically

-- the So And from that. million we've IPO consistent. Very that's that been units, we the XX the that that for of since -- and way away for XX-plus years now. call -- weight that same right, calculating sort same

Chris McNally

Japanese that's Yes have, most helpful. is who that think obviously the in the I weighted customers No, number for western we suppliers don't And way. very same

it. Appreciate much, so Thanks Okay. team.

Joe Massaro

Chris. Thanks,

Operator

We'll hear from from David next Kelley Jefferies.

David Kelley

come some maybe with to if Curious or plateauing price seeing semiconductor and and timing of maybe where there back UX. and potentially UX guys. customers, AS your emerging kind an Hi. pricing pricing value-add difficult with Also, of your traction some your starting opportunity of follow-ups Good is on you morning, from a and is given AS to And see own couple my suppliers. from the discussion starts obviously, even & signs any impact take there as pass-throughs end you're sticky predict. could to for down? But

Kevin Clark

productivity position say great some in not and question. bookings I'd put on semiconductor We'll the and level not where based the or that's at lower though seeing no automotive we're been the see plays play. we've volume and in with increases a how it, situations, in it's we out that point price XXXX, say the were outlook actually at players. for in point been to not I'd places Yes. in seeing But players awarded price those that's of effective. as this to we're our that year-over-year from have respect David, time, a other increases discussions we're numbers. about

David Kelley

And S&P. in mentioned Okay. you margin quick Got of it. kind expansion, you areas. high-growth product think a The I follow-up on line referenced,

us CVs, specific high confirm or seeing a on can product you're maybe voltage some just some it's or where the of maybe color non-autos lines bit that nice give that's or kind So more of movement. you a,

Joe Massaro

adjacent overall David, very particularly that strong. market, But I very Yes, margin of the also, accretive. would vehicle is in commercial business the profile strong. sort high voltage, But characterize, we're

type right, volume. margin think of a – sort the engineered and with connect accretive components, very profile interconnect strong business about scales is just volume traditionally you the business. and and certainly well That with has additional If

it's that a balanced it's So -- business. portfolio a pretty in really

David Kelley

Thanks, it. Got guys. Okay.

Joe Massaro

David. Thanks,

Jessica Kourakos

Operator?

Operator

We'll move James with Paribas. question. one for more to time, have time Picariello BNP At this we

James Picariello

Hi, guys.

on one quick the business vertical growth. a key Just

expectations So guide? are active what can the you high-voltage this safety, for year the user within electrification, experience, non-auto, share rate growth

Joe Massaro

that XX%. generally to We John. No, to mentioned very That's continue north high James. consistent, Intercable. sure. of excluding Yes, see voltage I still

voltage As you -- this the the growth deals and of Intercable aren't M&A numbers deal, year, mentioned XX% our Intercable at the business. time obviously, in consistent organic so well above high But in of per the with grows we're point. at itself

the seeing actually low active call that had to growth acceleration accelerate over mid-XXs seeing It actually to XXXX. We're some been in We're it, XX% in, of safety close couple year. this last years. the

of just full As we number comments, launched Kevin's a systems. of number new launched new to

the I the those CAGRs for talked to multiyear what for lines high of the safety, voltage. Those we've of XX% in active are past -- – north continues the CAGRs, to product be XX% about So XX% that continues think case. to those sort high for

Infotainment, we've talked about it, user experience.

a We there. are product transition going through

systems cockpit digits more We year, this as that grow, of, to integrated from solutions. robust legacy sort single expect we high business these move to

customers And eventually, our on infotainment what the see is working with SVA up we of being systems, which now. we're integrated sort into

of above it's the important high part business. market, coming active growth and But, obviously, safety, an but voltage. higher from the -- again, So grow continue to

James Picariello

can year? $XXX you I expectation tied Got as it. fourth -- helpful. confirm million challenges some the to just respect incurred something China. quarter. cumulative million disruption like to last costs was with then, the year, overall And is as what the That's entering though number lower believe the this was this super impact additional $XXX that for in of quarter Seems

line be to would could that is, this yes, time that recapture So, bucket, the share if you all-in what maybe great. fully

Joe Massaro

little the finished We've recapture. We $XXX had Yes. I million a last $XXX at over in. time full I the line give could -- wish million. you of year

taking that's $XXX We're what's million to $XXX million._ down the from. the So coming down

James Picariello

challenges these fully cost And time, are will Okay. addressable? then, over this --

Joe Massaro

the his working million, quarters right? that six in down. hard over going to them next the four correct, get was XXXX; Rod listen. four quarters, comment No, We to think the $XXX we of said Yes. down we're from at -- beginning

expensive sequential saw it either freight, the its COVID what There that sequential supply or I Again, downtime chain pop would improvement. are to things this in like But seeing are things things plant that environment. make quarter year, operating improvement. We're fourth to that its an premium it's continue right? expect related. see you like up disruption

Kevin Clark

to important there's productivity. just think that's costs note, can and a And I it's aside start add Yes, a with a to car, supply to inputs part. think fourth obviously are you obviously, the inefficiencies one disruption issues car shipments, shortage all quarter it of manufacturing setting those And related takes. about when and manufacturing, loss effect excess COVID, up. labor, chain of premium ripple dollars, those and And

are are to there XXXX So, although XXXX, supply periodically, semiconductor chain the then that with in react overall, occurred ourselves to And improving. the surprises it still affect continue does, or are to to. outstanding that situation suppliers. specific Joe's point, need industry, the in like continue players be were There is unique that to going some situations

real And focus we customers our do sure has we our make how keep connected. been,

price on we've term, XXXX, them back cost made translated bookings to once quite frankly, think their of expect the So And and the absorb customer go the that's had near kept portion into to quite we've we've decision issue, addressed have we've we the consciously we in for relief connected. the posture that And, that to in a -- frankly, XXXX. recovers.

predict. to So it's tough

James Picariello

you. Thank

Kevin Clark

Thanks, James.

Operator

to would does over like Q&A portion conference I additional today's call. That closing remarks. hand At the for time, back this Kevin any or conclude the to of

Kevin Clark

we'll care, thanks, Thanks, see your for operator, participation everybody, Take XX. the and on you today. and

Operator

We today's conclude your for teleconference. thank all participation. you does That

Aptiv (APTV) 2 Feb 232022 Q4 Earnings call transcript