APTV - Earnings call 3 2023

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Operator

Good day, and welcome to the Aptiv Q3 2023 Earnings Call. Today's conference is being recorded.

At this time, I'd like to turn the conference over to Jane Wu, Vice President, Investor Relations and Corporate Development. Please go ahead.

Jane Wu

Thank you, Madri. you Aptiv's thank Earnings Quarter and Call. Conference morning, for Third 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

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

call, be different and filings. performance, we and During in reasons forward-looking today's financial current other SEC materially be cite will XX-K for information Aptiv's that Form reflects may future that certain of view we providing our

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

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

Kevin P. Clark

Thanks, Jane. joining Thanks, this everyone, morning. for us

a begin of Let's X. We strong on another exceeding the expectations Slide despite Touching headwinds. highlights. delivered our some quarter, on few

in double-digit $X.X reflecting totaled customer growth New business and as points in with well X mix. North a UAW America X% revenues vehicle total line year-to-date strike to billion, global impact production, of as $XX to ASUX bringing S&PS bookings billion, billion. the record $X.X increased production. growth growth in revenue Revenues over vehicle The and the

related customer the operating initiatives, respectively, reflecting FX, unfavorable $XXX totaling growth partially EBITDA million, offset impact UAW solid $XXX and both by and volume operating records were the strike. and to and income flow-through recoveries of performance on ongoing million timing

recoveries team and laser actions expansion further continuing headwinds focused hold. the The this trend the closed to disruptions chain continue fourth margin to remains quarter dissipate, take continued from beyond. cost XXXX expect related structure into supply in are the sequential customer and We as benefits on and

Touching X. our macro Slide this have and to the on year. impact had on themes operations key that Turning trends an

Our software, vehicle and are than electrification robust stronger ADAS business and smart compute demand by and relationships for high-voltage customer solutions. ever, new bookings driven

in toward OEMs across continue telecom, partner vehicles, full cost. electrified on A&D software-defined the automotive enhanced As transition solutions vehicle, the and the features of opportunities lower path with and all are flexibility, that fully delivering commercial several their greater we We're software-defined provide the other system unique industrial at future markets. benefiting also to from choice, industries

vehicle automotive than enabling we Global production have led to disruptions production. has easing been initially constraints chain fewer stronger as forecasted supply increased

way laid results early year-to-date put well reach in full the year top the out on to of had end guidance strong us we August. Our our

However, the schedules an X the and UAW on both top production impact affected of fourth has American had third results. North our quarter which strike, OEM customers our

up ramp While the to on tentative X during there to schedules with the North as uncertainty OEMs, balance reached fourth remains some the of work finalize production their all have vehicle American quarter. OEMs agreements been build plans

North in any with supply closely accelerate of production ramp-up help America teams operating Our disruptions. partners and chain are our to customers potential and the working minimize

Moving to Slide X.

surpassing the reached record Power $X.X and solutions active already Solutions including year-to-date the target full Advanced during billion. $X.X across over $XX billion, of billion split bookings last and $X Signal safety to billion billion, bookings awards. track the bookings for year. $XX our a total in business new $X.X electrification totaled billion, bringing year-to-date billion, for bookings our of driven record our bringing to by $X.X mentioned, in year's User already high-voltage Safety Experience As total quarter on $X.X were billion $X.X geographies, billion, for

architecture leverage vehicle constant a full is need their will positioned lower around And solutions system electrified be to at deliver platforms Aptiv strategies for perfectly improved our cost. a OEM the evolve, vehicle. performance capabilities that X As enable software-defined fully to

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period, than million, the seasonality a second $XXX X.X% quarter reflecting the due timing over Wind but totaled of margin, prior customer of River income lower increase operating an and recoveries. Operating the the to sequentially revenues

and billion a totaled safety technologies awards, manufacturer, active radar $X.X of high-performance underscoring and our automotive their truck German customer of of with outside New strength a business included industry. large $X.X including the applications billion bookings award major the

Level launched feature unique Gen of road scale As additional memory modularized full value assist that increase to Level parking expertise which we to all for technology features just Aptiv our is automated AI/ML X part to and Aptiv's enhanced auto in address demand solutions, in many scale domain from parking that Aptiv enables more deliver ADAS map scenarios. differentiated ADAS parking to under to a parking Generative relay from Level unique advanced our the continues Automated solution, fully parking To to X X, ADAS automated to XXXX. recently X improved parking our our the have solution safety an will X platform position that end, excited development insights, way have our platform ]. we're [ complex to auto to customers. features

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for reflecting traction customer across demonstrating from portfolios, America system our continued strong including new with European $XXX competition. a a full Intercable commercial high-voltage with automotive connection Another quarter million North award electrical distribution, that products a awards, and system Intercable sets award OEM our apart how systems includes in strong major business Automotive in a the with global and us approach

Lastly, we're Reserve a power that recognized variety reliable, proud been has source technology to announce once Power significantly in highly A groundbreaking Aptiv's of Rapid a continuous PACE and critical functions, again Award is provides redundant eliminating an that as finalist. a as vehicle Aptiv the for automotive reducing solution mass and costs. the value our technology the provides a our low-voltage well recognition customers. battery validates innovation, impact weight, for industry-leading need as This

to excited our Consumer Show of at Turning in showcase to many Electronics new Las Vegas in Slide the year. We're innovations next early X. January

along deep and that lower smart for costs. electrical optimized of and live including be We running Wind nervous from we're system the with vehicles with proven OEM edge in-cabin and Aptiv solutions develop vehicle, demonstrations ADAS the requirements power needs Wind our vehicle River's our for supporting and to vehicle applications architecture, demanding solutions leveraging We'll how platforms, with to Aptiv. technology future into brain River's reality, software insights user performance, and of safe, scalable green next-generation latest Vehicles portfolio purpose-built optimized of flexibility and meet experience. are providing vision complete the cloud the connected of applications for

helping our and carbon take so, footprint. enterprise-wide our communities goals At operational world. Moving our and solutions America's provide as enable to with and ensuring In goals. business proud safer, to In of Slide our us sustainability, our that innovation, of company, recently X our quality, achieve is named commitment, that of our manufactured sustainability more and greener continue Aptiv, We of commitment Sustainability people our planet the Newsweek strong to companies. our while care Aptiv and Greenest team developed X. recognition our connected to is excellence was entire aligned customers I'm strategy an highest designed, thrive. directly and of doing we and minimizing a responsibly by our for

XX. to Moving Slide

over foundation headwinds. the continued established XXXX, the expansion margin despite to touch and we're I to revenue current strong for XXXX. turn positioned well view walk of financials, Joe I we've macro the Before on growth Building in our solid the to call through wanted on

Our as well product vehicles feature-rich and portfolio the as connected the demand green is electric software-defined of safe, for perfectly future the aligned markets. acceleration to adjacent in

will Our continue capabilities drive advanced industries. technologies and multiple across performance to strong

dynamic a uncertainties confident execute in While our remain, environment. policy some macro ability in to we're

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

Joseph Massaro

morning, good Slide and Starting everyone. Kevin, XX. on Thanks,

or X% North the As our $X.X the expectations underlying Kevin another was production, UAW vehicle up exceeding billion to acquisitions. strong of financial reported Aptiv the impact of impact despite X% of in quarter America. Revenue highlighted, strike excluding above results,

North negative shortly, the discuss as well negatively UAW high-voltage growth XX%, reported $XX the Europe our respectively, approximately impacted in on had growth and market strike by As and in double-digit customer and impact over XX% the electrification in safety was America will timing mix program Active and I million. of strong quarter and China. as UAW revenue strike a of

and strong million that impact flow-through higher UAW $XXX reductions costs. progress in had negative The versus operating foreign initiatives was more reflecting headwind volumes, performance chain offset a disruption million, on and our approximately income than ongoing exchange and costs million last $XX respectively, on EBITDA Adjusted supply increased $XXX were of including labor continued a year. strike

higher $XXX in at of prior Earnings and offset operating capital from were by a by was year, flat working earnings $X.XX expenditures the higher the million, interest driven to improved income, an significant Capital per by prior increase quarter prior levels. $X.XX, Operating increase primarily million. expense. cash higher $XXX over share year driven year, the were partially primarily

Looking add a was adjusted at growth of Revenue representing volumes revenues X%. sales million, The production North strike Intercable was the million relative $XXX billion, negatively the reflecting as as UAW in the foreign net the revenue of regional commodities vehicle exchange American quarter in to overall America reflecting North over and at market of $X.X From X up XX. River and DX detail positive on XX%, well at in growth third the slightly perspective, The in of Slide customer revenue growth price impacted acquisitions Wind $XXX were in quarter. quarter. points more

by offset underlying strong XX% grew above slowing Europe, BEV platforms. safety, in program points production, driven partially In revenue timing by growth certain growth for X and vehicle active or

line vehicle and to due In growth. production slowing BEV mix our China, revenue customer was in underlying with

and lower growth program experienced have were in said timing. mix expectations. impact lower over XXXX. with in consistent the our growth adjusted despite lumpy strike over we given market the be is earlier, QX will with noted the market, America we over market in As past, as in North line The our growth And and revenue growth customer

reflecting the quarter Moving up timing to on or the XX% year-over-year Experience points in safety, rose down the was comparison. certain where X% customer driven over X quarter strength than difficult were XX%. active was was vehicle a the less more User programs the segment in ASUX X%. quarter, downs in outperformance and the slide. next Price revenue in by The of Revenue production.

operating in on ASUX margins the margins the due the of noted QX on XXXX ASUX adjusted approximately incremental Wind relatively QX were customers, Segment a of performance. million in on million, UAW of the to were income revenue the XX% and by flow-through $XX start last impacted ASUX seasonality compared had same Also, and We up year. to QX offset lower improved The this impact sequential when from Year-over-year partially material timing million strike inflation income. natively was $XXX the of of period operating River's reflecting $X recoveries expected certain quarter the volumes minimal, versus at was which results. seasonality year. basis

quarters. in of negative slowdown High-voltage strike rate a Turning Performance reflecting line vehicle Revenue production quarter of Slide an in environment. the $X.X growth was with approximately of despite quarter a grew electrification million, Power points X or XX% the from despite Signal was growth. increase and of in on impact in quarter, the revenue to a operating prior strong in $XX million XX. X%, challenging

slowing Despite the production, expect to we double-digit business in to have a of our EV continue strong high-voltage growth XXXX.

less $XX including prior than negative operating were in $XXX was downs a from in quarter the the quarter, X% adjusted income million Segment million strike year, up X%. impact. Price

on Customer commodity exchange, costs chain negative of quarter the and and performance, supply the labor impact positive the lower costs. foreign peso and negative RMB disruption Operating headwind material offset in in basis. inflation primarily impact to including a the a year-over-year offset were continue quarter, higher recoveries present while the

line in the is updated August. with However, FX in guidance the impact we provided

XX.X% of and Power adjusted were Adjusting margins in quarter. for and Signal strike, for Solutions FX the impact the the EBIT

sheet XX. strength and Aptiv's Moving on balance to cash of the generation Slide

chain have operational challenges conversion on the quarter we focus an North the operating able by The disciplined ending million results maintained during the in a supply billion. cash discussed in as improve America, Despite of we our improvement our capital saw $XXX flow to and past, As is of $X.X reduce that the efforts. past the recent of flow clear balance of cash in cash resulting cash in conversion example and quarter we cash year the were over prior generation working versus was levels operating as disruptions. higher flow as our efforts XXX% to we

to borrowing, $XXX average XX years. down paid expensive Given performance increasing this Aptiv's million term strong our opportunistically October, from loan, most we XX tenor in our

have us to attractive business is is accelerate ] no continue leverage in business more as portfolio current relevant it shareholders. support to to deployment by we strategy executing policy profile scalability, and including to believe capital [ cash in maintaining well-balanced the M&A business opportunities our and our our and financial to our new discussed past, focusing and income on maintain access allocation, enhance relates that with technologies of markets, returning we our enabling prioritizing advanced market transactions the to technologies speed a opportunistically recording our model as to investment awards, approach our shortage organic we convert cash, As sustainable there of to

I will on our wrap Slide full up outlook year XX. with

and strike. the Key production, we year of our a full our outlook now performance maintaining strong are North XXXX assumptions for higher global Given the continued for vehicle our underpinning outlook impact China, driven levels include American a for X% production X% in significant up October higher XXXX. of expected beyond outlook buyer and strike versus the global vehicle no impact year estimate plus production despite by Europe

negative of $XXX million strike $XX we October, revenue in a million experienced month the and During impact operating income. in of

a pre-strike to outlook Our over return and production a customer no of of disruptions. meaningful restart further and couple coming levels assumes weeks production the

total million. Accordingly, in growth our are the be EBITDA forecast earnings of adjusted range billion. cash billion strike at QX strike of note including given per the the our the $XX.XX impact, $X impact operating of we range loss and $XX.XX billion, our be market loss XX%. respectively, long-term X% billion for the $XXX expected and revenue would including and adjusted are rate million. of to income $X.XX to revenue that share we growth forecasting expect I and approximately strike of $X.X below unchanged, revenue of flow to while still of remain over to midpoint to No approximately midpoint, $X.X operating billion $XX change total at XXXX earnings

improving of operating headwinds, focus the performance on a operating further discuss foreign deliver remarks, has relentless macro As environment. strike significant cash challenges flow continue to the generation and allowed Kevin in exchange to will in his difficult North us the our despite closing American and

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

Kevin P. Clark

questions. open line Thanks, Slide up wrap Joe. XX I'll we on the before for

UAW As strike business and Joe I unfavorable America. third FX in we in and underlying offset strong material and partially quarter, constraints, to performance by related discussed, rates which chain further labor leering experienced easing the have headwinds of driven inflation, supply North the

awards way to and our to are We in target of well roughly tremendous continue billion bookings new reaching year-end. see by our momentum $XX business on

UAW strike American our impact cost North on including we're teams our America, operational mitigate of the resiliency. work actions further tirelessly in ramp-up the executing to production, to While enhance structure to continue North the of

gives deliver operating our our strong position in further to strengthen execution and our confidence us value technologies advanced and creation of for sustainable ability portfolio shareholders. competitive Our

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

Operator

from we take that our Spak queue, question Instructions]While build we'll first [Operator Joe from UBS.

Joseph Spak

UAW driven Joe, strike. growth the by for guess, just on the part I was the said over quarter, outlook. you in Kevin, it I know first the market

your I market. that the X%. year-over-year. -- And just over think like million is point, X is of $XXX of not X% I But it just to from sort that's growth obviously industry, think, that part went

So of market can of growth other of and you in lower for the the some are over detail driving the year fourth quarter? some that factors the sort

Joseph Massaro

Yes. that's Yes, question. Joe, good a

right. you're So

is of You're of The manufacturers the we DX business, on do like effect comes numerator don't the we're folks sort have Japanese lot XX% right? you have up that is bigger have of denominator, significantly. There That's sort a of about doing. the a American right. our of North North in America that going but content we what [indiscernible] impact where calculation in

numerator going of denominator you get the compounding effect down the coming So and up.

the Japanese That a had X.X, very that -- OEMs the cap. instance, market against For points X our strong about growth over growth was just growth in QX. impact

we to is stand-alone, of things DX up where check this look to how XX% at do One of sort against their the math double the about DX we production. did relative with we were the

market America, feel more did sort unwinds. quickly on got like, how of we see mix the at to particularly because moment. caution definitely in North year a that So it's I full

The but at, slowly. bit still just then Europe, worth in is and about other places looked market timing. a particularly growth a And -- still us a was that's program less quarters on over some by than quarter, Europe some X to it's contributing high the the mentioned is look in mix, market, growth program voltage I point to infotainment more at over just about probably point. prior to growing basis. growth of We're China, That you if down

to We year expect mid-single-digit growth. finish the infotainment

growth market relative So well. component of market was more But are that again, the of you impact. as that drives calculation right, it over quarterly a

Joseph Spak

targets about pointed know this to out Does conservative right we penetration more third term. and view up, parties has slowing the that penetration, at been as follow think BEV you've in and the well midterm taken some of documented of that over Europe, -- I think mid- long a now. your to Okay. pretty you And of and U.S. just some some the then I I all than maybe guess

-- the in out compare recent guess, versus the So laid is Analyst February more what trends, back of this how Day? does sort you I

Kevin P. Clark

market. look the over Kevin. growth years, relates our on think, of a And how more walk see the need highlighted it's on it lot perspective through a as QX as in growth we market unique has Joe, in and it Listen, Yes, perspective as Joe over to I numbers. precise circumstances at we QX settles. providing to out

will that, and still strongly well believe said Having given growth growth, operate. Certainly, growth to this understand QX high-voltage very future we continue around positioned electrification Electrification growth ADAS relative and which was and X market, be to of down QX where high we're we in questions over solutions are it areas, higher as our and rates. relates to believe QX we year. the

largely we say that or impact and other of the think some significant is items that talked would I a that is issue about. of the related Joe strike portion

And the we as reminder, much developed market very conservative and we our much the of had a a pace customers a on of more strategy, electrification penetration. electrification then select highlighted, and as of view just you overall group on focused

question sit over of from answer where we early say standpoint. to way we it's feel but market certainly your a very, growth long-winded good more about So very precisely, saying to too

Operator

Rod with Next, we'll Lache Research. Wolfe to go

Rod Lache

conservative a Just question. everybody on high market. and BEVs the more voltage just lot I about following you've than been up know in on Joe's

a was maybe like had color bit you additional down annual that just you mix dispersed us customer get by your to -- sense more of are looks But You that give a that you what the slowing amongst are the XX% Or exposed growth growers? -- just backlog the little more sort on of a propelling are XX% bit? of within is it companies to a faster can XXXX. penetration

Kevin P. Clark

Yes.

Rod can in So I'll Joe blanks. start, fill any and

has platforms, where look we're our When where with That's platforms pretty is. very it's OEM exception quarter we where as by is, a with OEMs. our When next we nearer look majority of that at are on stable kind you BEV and and their term bulk year, the are exposure production. There's and at BEV large when battery electric have those Chinese the relates we of platforms. plan early who out been their exposure electrification. of the and exposures, public the dedicated vehicle North European it seeing X American into the look about to for I fourth into schedules think So

nearer we're of in But on. have BEV that will that So launching of are midst some term. are programs the offsetting OEMs number a who that impact

Rod Lache

at? is kind level, change Kevin, like in this you guess not So XX% were looking the to it there's -- viewing at but original how its I material totality. you you expectation? that are when specific, look our a Do you of that is that feel question Or

Kevin P. Clark

Yes, a listen, it. about Yes. it's Yes, good we great. No, really feel

an element there's ever of think I forever. -- think I guided we don't XX%

numbers, revenues a billion that We'll think we or electrification billion. lot billion high-voltage large keep $X.X of to there's need in I right, under do year, just So this of $X.X mind. $X

that significantly. year obviously early referenced will impacted see OEM a schedules. some that grown of the impact has reducing So business to I talked about. that dynamics related was and some in we the next Joe is QX doubt by Without QX

that, continue side, don't that they bulk that have XXXX. in in we launch of number schedules, how any X we China for BEV place regulations where at on where to is look we really emission we COX QX and easing platforms. early On what And remain a and Europe, do a And are in view OEMs customers focused they then flip in new coming online during is the have on next areas activity the where of addition current of and schedules programs to those number year strong. have production

Rod Lache

right lot And crews slowing autonomous of just a obviously, with down. controversy around Okay. lastly, now

XXXX with give if Motional, business And plans can you you this whether originally Joe and supply your if XXXX hoping thinking $X.X lower element year? could a at on performance are any How then just that investment that's like that your you Just us, of updated there disruption kind all? bridge. your us thoughts to had billion much a seeing of to influencing on update

Kevin P. Clark

Yes.

So start. I'll

point So to nothing tech funding they're past, of Motional, we we're we'll terms well future it We're our this would of discussions engaged are as we're to track we're report actively the if about market. on of and with fund consider partner, were time, half that seeing said a cash we make certainly standpoint to a certainly as what needs. reading as things in commercial the from we we Hyundai standpoint. aware at out. Those new and in their our engaged in relates ultimate decision. Again, fund, in But in

plan We when point our haven't at of plan in February earnings finalized our report in time. we We'll out year. that announce a be determined next position this to in or

Joseph Massaro

Joe. it's Rod,

Just answer your tracking well. question, think to I we're

recall, walk. you we If had that on that

price of going thing. as tracking on year. sort that $XXX that a recovery 'XX I 'XX. labor of to of going years. We think inflation. had fairly the talked the performance, X I'd that $X.X ratable from the to were side. make well Investor of We XXXX much about offset to cost as through sort performance side is you're being approach ratable Day very the wasn't over billion say in end referring that the on to both a to million progress the was work the 'XX We That of to

well. sit helping those right. obviously, the But we're the offset stated, that planned, labor higher the particularly initiatives We and made, of we as here and for impact. seeing strike comments it's within sort do So tracking I most are volumes expense. coming things today, the have of are as performance through on offset part, the Obviously, some

Operator

with John go Murphy Bank Next, of America. we'll to

John Murphy

we're have look interim, penetration earnings be [indiscernible], another might able you're the our generate they being a down right our an Is optimist EVs flow could as programs making and and on look a and market these I cash than do run capital reasonably that mean to expected. bit robustly, as as are toggle over Kevin, ability little future EVs to people you be longer, as I and at had the margins at but this, And the hey, on kind little follow-up you bit get true now, fund a a listen, returns exist in slower and better programs, taking the little this going quickly. these say, cash rate gross toggle potentially more you make more bit, better. of commitments here? to have to might maybe

that wouldn't role? it So dent of a maybe and slower returns you your get benefit

Kevin P. Clark

Yes. quarter. basis, growth quarter, on think a And And want year-over-year John, go-forward believers the a are the we still It's we basis our was normalized question, high-voltage everybody this Listen, and I'll revenue start. remind where was a great it XX%. of XX%. electrification. just third year, quarter this in to in And second it on more relative to we in were

that, platforms. another region areas, those an objectives, Asia focuses reality have are up in to our strategy that putting revenue. sure having of BEV that, as platforms our the us which so I Pacific, region capital in mean that China, from scale. focused is principally get Those we in and X who to very on stated, X principally built was make to Having extent said and that been investment on OEMs significant we're we allows EV it focusing scales we've to OEMs global taking that Europe John,

On the volume. those price we to scaling have bulk of relative programs

targets have the to prices their the to achieve OEM and adjust that's contractual. ability not particular does extent an So we

ourselves that we've So protected way.

then a outlook. had XXXX much were to you And baseline We the of outlook made, point vehicles lower going be to has manufactured battery our never in electric been the that XX% vehicles.

balanced. So as But it impact of an there X the and things we rate. we'll quarters original couple the still opportunity who optimistic mentioned backing normalize, margin presents. think OEM Listen, our where on a schedules opportunity competitive growth we their growth where have about may here and it see is ring-fenced we're I and off our there's be position

Joseph Massaro

while, a existing chain, voltage, facilities, add right, business. we've engineers, able The Joe. low very I'd only voltage, were existing different, with are existing leverage it's John, products they're talked equipment, the particularly complementary. Electrical to, to existing the and for supply this We but Architecture thing about high

we've a very and large got us, for So obviously architecture business.

I segment lot that get But also because right, held plant helped of in perspective, equipment So that line a capital we the it's had very that margins and think from a leveraging quickly. return has the accretive couple years product ground. to last of over

John Murphy

Super helpful.

model Could did our estimates. missed for River talked follow-up how on if earlier X to to in can about we I you year, it River. Wind may you -- this just think it have the seem just but you the remind Just we just Joe, Wind in seasonality and -- us? about in because know through quarter our seasonality run the the

Joseph Massaro

Yes. We guide. passing in are mentioned and their They the on business. it it's -- I in --

software quarter a of software It's very [ slow like margin a somewhat it's new think I highest. a gross software to for QX them. instances just an phenomenon. licenses, right? highly business the be drop, be, XX% ] So QX, model would renewals, tend business tend QX to is a it's leveraged business.

high to incremental at rates. tend So drop pretty they

not February in we're this this. So cautioned we We've had and years. prior this. surprised -- seen in by That's we why the seen don't

just I this of this see couple recurring. So as talk will progression something over next I that we look at about you and think be we as think quarterly the the years,

Operator

with We'll Jonas next to Stanley. Adam go Morgan

Adam Jonas

an and OEMs reasonable Joe's and This to that. I'm path that think to you anything capital, far. generate it. return well. so disaster legacy for and and with respect -- has to [indiscernible] unmitigated this to a been Rod on question, team a Bostonians hit up as through to look to EV journey close see just I don't the be going follow don't on So need see I to pragmatic to like to see inability just

So yet. for lot. exact if lot. suppose just a guys, Germans the EV you're this pulled in lot a a going but not me, not surprise speaking it on I impact and -- here, myself GM wouldn't to you're answer their and back position the And I of Ford to spending people a call, know I mean

target, how target over If did, realize Tesla even EV others of operating in dialing tell won't can't way conservatively they a margins the because -- and February targets way. the XXX% and those you if much this profitable back a outlined just path and follow to sell world pace there XX% or really is forever. negative margin straight -- how and there, adoption but those So us longer-term the in they on you barely the I'll the phrase the where depend mid-decade XX? reset themselves undisputed be outlined, I continue your really Can of XX.X% much question leader,

Kevin P. Clark

we'll Yes. $X.X I'll take the back. Adam. we've year, or scenario revenues. This in voltage take high -- of in do I'll $XX kind billion can start, look I Listen, average like growth we And peeling it billion attached out roughly EV just a rate. -- revenues the high-voltage at growth higher clearly, of our rate electrification is our that to than overall that,

impact have there. some would So certainly, it

lot content. internal of combustion of architecture which a most said, with I most vehicle have engines, think these actually -- those where we OEMs vehicles EVs of we are the as replacing

margin dollar. trade-off standpoint. from is a it's high-voltage isn't base the margins of or The by content related margins But a the rate it's Xx. not matter dollar couple for points S&PS a where So to accretive

up are their prices these our payments to produce going extent to us targets, they're There OEM So a like, again, it think it what relates manage a it's impact the don't profit something reducing would we as would the if the and an given are think onetime would the I standpoint, I be product. from would impact just capacity It that their through. huge reducing. have OEMs margins achieving to from we look significantly aren't have going

about So it. that's I how think

Joseph Massaro

agree that, content unit we'd work out right? It content continues to platforms, vehicles low-voltage Yes. on be have X I there of on total be assuming the stays are to total unit might number. And Kevin's through. production, But production voltage to with -- accretive got that back of looking dollars you're the to in assuming that, we'd we've be every sort point, point at swapping replace manufactured. world X build X X.X line, would that going to or high the of

Kevin P. Clark

industry technology EVs on with out an and U.S. going throw have, COX going the Europe, industrial can that but that out standpoint, fair for environmental for wherever that it's of scenario to governments It's to I policies secondarily are the continue national those OEMs so tied question the national support to that different push China, governments the OEMs can from security the they Because or ultimately, is maybe targets impact change investment can where from I if and beyond of the not I they required they are wrestle I emission standpoint, to there's industrial a think the question, support a principally this particular be one. from semiconductor standpoint, the the aside, are Adam, too do which to OEM And security. achieve they one. for roll all in is profitability and policies Europe. the right? I would absorb they're would kind your that ask U.S. a -- uncomfortable I going some of be can and good understand And a and Yes. and for profitable, if or change. a always look

Adam Jonas

Appreciate and that, Joe. Kevin

quick X if follow-up, may. I Just

$X.X of that billion of portion Just the was -- the or billion that voltage almost it confirm of want high Sorry, out you noted. billion? electric the to number billion $X sorry, of $X -- $X

Kevin P. Clark

billion. $X.X

round So Adam, numbers. $X.X use billion. I

Adam Jonas

in how that. inflation us time? you're the Tesla that. seeing that? you. want much confirm rate your labor, I And what single to component I confirm real of just is is to want sales labor largest of then Thank of and remind

Kevin P. Clark

Yes.

we piece, about -- customer the customers. talk speak about specific listen, can't On

going respond So question not that's a we're to. to

I would business. I within As think it focus the labor, on labor overall relates Joe? to

Joseph Massaro

talked we increase of in increase, years, We've about $XXX we're the between what split million dollar Day the X to Investor that's and seeing. XX% Adam, over Yes. about evenly XX% that was had --

Operator

Chris Next, McNally from Evercore. we'll to go

Chris McNally

we voltage, think billion high some $X.X something, I 'XX? and in missing Joe, but the you could Maybe but -- 'XX slides. update had If old $X.X I 'XX? Could restated, using been housekeeping. it's in maybe billion maybe for you your just of those just I'm little maybe and a Kevin do what's the you're number

Kevin P. Clark

obviously. that's Yes,

Chris McNally

Okay.

maybe that -- previous so is guided a an because mean to increase? I I the on XX% actually increase. number that's And QX was think

XX% increase like for high this voltage So more it looks for year? a

Joseph Massaro

depends last doing on what Chris, Intercable end with you're year. it Intercable, right? We of closed

of last in that wasn't a north revenue. it year, So $XXX of little million call

thought if forma got but to So you for if it's pro that yes, [indiscernible]. you growing, it, just -- didn't, you

Chris McNally

exactly. That's

was exactly on Okay. And follow-up I asking Thank was just the second one, you, for. Intercable what Joe. Adam's. a

that large Is low You million the voltage, forget only be the even in about if it not an low EV would voltage is player did though there goes was customer. about a talking correct? high that for you $X.X But the that mostly EV right? revenue, $X.X voltage So to billion.

Joseph Massaro

We right. we to on and a talked that. started guidance that's We that's when years Yes, wanted focus line, that about the high-voltage back. just product providing really few

So that's just high voltage.

a -- So difference. either big voltages right? going in you the So it's see vehicle, in the really don't low

Chris McNally

rough pushed from like because, think to some for talked currents the obviously, last in about year. the QX there's And On I commentary, to you margins It QX ASUX, X X% sounds from of were X% for the lot the then of moving absolutely. Yes, recoveries QX. a QX.

X% The towards end been that to I even pickup margins. we've of that's it because And large goals. good, if to in for first, a the still ASUE a sort the is XXXX it's the that low looking drive because material portion pretty of points X% nice think

Joseph Massaro

the Yes. X ASUX and have Full current S&PS at would at guide year, XXX.

Operator

go Citi. we'll Itay Next, to Michaeli from

Itay Michaeli

me. couple of follow-ups a for Just

ex I going of hoping exiting you kind could be dimension seasonality First, the It margin the factors outlook. back you'll to looks like there. XX% QX strike. was just in closer to

think then just hoping bridge about curious QX, for the in discussions ADAS as any baseline second we per updated X? more to with look into XXXX? And had wins Gen about you question, talk to vehicle? of also how content customers maybe kind to Just the And

Joseph Massaro

think away can because I'd you I from XXXX give at focus our QX versus we'll I look with cautions, this at at as HX engineering point. of think QX more and heavy Itay, looked if standard be But versus on sort -- recovery. things -- like Yes. you I right? stay obviously

adjusted in. more the -- But And some I the $XXX benefit I guide, to total margin the HX of total I mentioned have as got we here, model. as clearly Investor So original and falling for at as the our just But segments $X.X strike. the as to mentioned that's labor tracking of you Rod, think volume rates increases progression to Rod, as well or of performance, billion and the to I go it's coal strike. through listen, company tracking that as million are Day are offsetting

go So we're if I think on you track. -- so

I If than you're at going have proxy would think you the back and is QX to obviously start HX I for a to then -- strike. half, adjust look just better to

Kevin P. Clark

in would dialogue European On dozen with platform, a conversation roughly active X customers ADAS Asian, about I American. say and with North Gen we're

very going So very well. very, strategic strong, and dialogue interaction there is

As radar in with were that around it into and being existing plugged and we're be of ADAS solutions OEMs relates will to bookings in the QX Europe that bookings, the platforms -- in bulk those China.

Operator

to Emmanuel Next, Rosner. go we'll

Emmanuel Rosner

but EV very new few generally have voltage selling the EV of speaking, electric terms a you're not the of you to in voltage, point, backlog, components years obviously, which I within and probably been programs help to your because current to earlier hoping over frame a of of in of more actually, platform. new future on was quantify importantly, percentage vehicles, low or exposure terms like and growth either can a the high just lot manufacturer market us revenue large or next

you this platform? to sort few way much years, maybe that next like quantify have on at when of outgrowth look any would EV expected the over of So landed how

Joseph Massaro

were sort think we're be We think how Yes. down didn't follow in I frame term, of sort we path XX% Joe. that long couple the to right? Kevin the of going Listen, years. conservative I is next everybody about Emmanuel, it's thinking of

law numbers, what from $X billion now, do we remain just expect outlook. -- a get So in to business. larger growth We We of you see almost get confident to slow. that the

time. over rates slow growth You're see to going

so numbers, X-plus call But business if of the up voltage this certain over little earlier, point provided And growth OEMs. on of a over then market, market. with at has the Chinese point, of quarters, you is of provided mentioned growth European over look X%. in just I high it certainly As not quarter, quarters, revenue -- average, the XX% X.X%, and meaningful, but this past, X to bookings higher it, not points the to bit all including round and typically a it.

the think, path of American were the vehicles. So we North right? more of gone down as type unique were the of SUVs, historically They high-end nichey, sort very the not initial the had least I products, products, at

the were some no content but the of by have on business. means bulk they them, We

I frame should from So think -- I help at this that think it point.

Emmanuel Rosner

either EV I outside asking product be of large would there's powertrain appreciate high most voltage, it. being exposure on ideally for That because new seating these the reason at possibly lower I'm backlog out supplier. EV slashing XX% [indiscernible] going basically, Joe, sort sell, the you are a could go platforms, by all to which of or seats their like are volume. new pushed

Joseph Massaro

European business. not speak like. Obviously, and you're I or what portfolio seating can't to Chinese sure XX% who like I'm concentration. looks their said, the about I Yes. talking we're

Emmanuel Rosner

No, no. EV comment high and way any voltage was of to frame outside exposure My that?

Joseph Massaro

No, provided what we're I provide, Emmanuel. think to we've going

Kevin P. Clark

perspective, combustion vehicle architecture, we're BEV, we're globally, if that of building with internal likely they're vehicle. vehicles a building fact than X on they're a X our vehicle from an more Yes. given engine that, that every not in just Emmanuel, the and

So with architecture. low voltage that

I virtually impact. us, for there's So would no say

Emmanuel Rosner

mix just region? headwind a you Was in impact, specifically strike, it a and follow-up on I of bit more you were North the America. Can elaborate quarter other That's on -- mix, region? of the My just mean, obviously, I your which of customer little the like bit little of outside sort mentioning is helpful. there's a in like, sort think

Kevin P. Clark

examples across the like customer some of was well in or growth Eastern China places products Europe in Europe either growth OEMs as in all are America, mix really of Eastern outsized regions manufactured and It that of significant kind North Yes. across as that Japanese exported. some parts where across Europe are

we less exposure. areas customer have where So

other of potentially for availability America of OEMs opportunity that, OEMs So and is related to impact a select select North we in for semiconductor strike the as or it relates rebound gain lot piece to UAW the is chips to the -- share. of think, the and

Operator

And we'll Levy to Dan go our from Barclays. from question last

Dan Levy

bit. just it with maybe in your of start is unpack the XX, a recovery inflationary a that's that How bottom you're seeing schedules What continued on inflationary just And on environment, half comment factor you could to uncertainty. the just you the in? Wanted Slide slide if perspectives the says about XXXX here. talk geopolitical to in And stability incrementally could production cost the tailwind be potential worse? does next potential semiconductor year? potential for Maybe better

Kevin P. Clark

Yes.

element a seeing but relates disruption I to XXXX. improvement that production seen we've schedules, now. in availability year, continue, into would some it's the mean, obviously, stability in Kevin. COVID remains, to Listen, we're significant as expect So there's it that throughout of

some there. Material was XXXX. see should benefit So in significant inflation

from We semis. address semis, in categories that will some to really core SoCs, peripheral semiconductors We're of doing power, to all including the One, number things analog changing across expect in XXXX. significant partners that. a semiconductor remain like PMICs, semi of areas

advantage of some semiconductor So to very, are aggressively. going a Chinese well the sourcing very and that with and the being space, partnership done engineering lot capabilities China X commercial of work which into by that the serve as these is opportunity, teams into establishing market agreements our China or And ramping bring deep both up market. of to we're as to take

will ourselves our and alternatives customers. lower-cost for So free up that

those customer a Again, where we with are passing As challenging given recoveries, on an always not it financial It's where standpoint, discussions. But simple to that's not the cost for those of those we the how now, customer. from state. put we some there's of an alternatives, to a contracts, team as extent, discussion. continue. that that's are of relates lower And in are team we'll easy operating. XXX% given the costs listen, something discussion. to that's But is operating have But interested of commercial us kind them. will these or benefit, they're and jointly To of the the opportunity it's in front

is inflation we're places high. And very focused Africa. in on So relatively labor inflation the material Eastern then Mexico, Europe, North like

So areas very, closely. those watching very we're that are

last to to cost additional related then And the it's specific labor. on direct margin. should to or room very not I material on and provide inflation our focused additional ultimately, continuing item, We're say, prune structure

Dan Levy

you the quick know follow-up just if you BYD. that to uptake, just X think on the about on from see ones outsized European seen Great. confirm as agnostic? your that, should -- said exposure obviously of is that and Can then a side, we mix there. we How China, a confirm overweight Chinese. I And just then we've the lot can you powertrain especially EV SCA And impact the from just Chinese?

Kevin P. Clark

that is overall is SCA an train agnostic. powertrain implement agnostic. and rethinking sense moving But and change. OEM that architecture makes it's platform time make easier would Yes, to powertrain BEV to if is It to more power the it a really -- an be time

partners mix tend margins China relates might bit OEM relatively it As do on our think higher to wash, more system BEV solutions of be it's a we given to a there. little customers, I

portion a broader kind So portfolio, connect wouldn't are significantly of to of our but overall able be it different.

Joseph Massaro

revenue the time been gotten perspective of today, a OEs -- running in frame. about We're changed current the years. XX-XX. few are versus back revenues, global in just Bookings last have from would Dan, XX% it's local north XXXX, global and it's XXXX Yes. over XX-XX that

favor there, what's over locals. made So given the EV. we'd being just that a increase in to lot obviously, And that expect of of

Kevin P. Clark

Yes.

at almost a mix, I it's look multinatational. actually, revenue XXXX, you XX-XX from if our think I think local

Operator

turn any Clark Mr. like for remarks. the call to to back I'd final

Kevin P. Clark

you, Okay. have time questions. us further Please operator. any taking morning. this you everyone. you. let your Thank appreciate you We know Thank Thank if you,

Operator

ladies Thank We wonderful conference. day. you, Have appreciate and your today's does conclude a participation. gentlemen. That

Aptiv (APTV) 2 Nov 232023 Q3 Earnings call transcript