Slide 1: Second quarter 2015 earnings call
July 30, 2015 Second quarter 2015 earnings call
Slide 2: Forward-looking statements
Forward-looking statements This presentation, as well as other statements made by Delphi Automotive PLC (the “Company”), contain forward-looking statements that reflect, when made, the Company’s current views with respect to current events, certain investments and acquisitions and financial performa
Slide 3: Agenda
Agenda Operations overview Kevin Clark • Q2 2015 in review Chief Executive Officer • Bookings growth • Summary Financial overview Mark Murphy • Q2 2015 results Chief Financial Officer • Update on 2015 guidance Strategic investment overview Kevin Clark Jeff Owens • Value enhancing portfolio modificat
Slide 4: Operations overview
Operations overview Kevin Clark President and Chief Executive Officer
Slide 5: Macro trends
Macro trends • Vehicle production – North America – Europe – China – South America • Other macro trends – Commodity prices and other currency effects – Exchange rates (Euro, GBP, BRL) Stable macro environment 5
Slide 6: Q2 highlights
Q2 highlights • Delivered on our commitments – Revenue growth of 4%, 4 pts above market – Record operating income of $526 million – Operating margin expansion of 80 bps • Portfolio realignment actions – Closed on sale of Thermal – Invested in Tula Technology, Inc. and Quanergy Systems, Inc. – Reache
Slide 7: Bookings growth
Bookings growth Continued bookings growth Q2 2015 YTD bookings by region ($ billions) Asia 30% $24 $24 $22 $20 $18 $15 Americas 50% Europe 20% 2010 2011 2012 2013 2014 Q2 2015 YTD Strong first half with record bookings 1 At constant foreign exchange rates 7 Note: Bookings = lifetime gross program re
Slide 8: Supplier awards
Supplier awards Customer recognition of Delphi’s performance 8
Slide 9: Financial overview
Financial overview Mark Murphy Chief Financial Officer and Executive Vice President
Slide 10: Q2 2015 vs. Q2 2014
Q2 2015 vs. Q2 2014 ($ millions, except per share amounts) Q2 2015 Q2 2014 B/(W) Reported revenue $3,858 $4,062 ($204) Growth % 4.3%1 Operating income2 $526 $520 $6 Operating margin % 13.6% 12.8% 80 bps Net income3 $386 $409 ($23) Growth % (5.6%) Earnings per share3 $1.34 $1.35 $(0.01) Growth % (0.7
Slide 11: Revenue growth
Revenue growth Q2 2015 vs. Q2 2014 ($ millions) Year-over-year growth by region Reported Adjusted1 Q2 2015 Q2 2015 Europe (14.8%) 3.7% N. America 3.6% 4.8% Asia 5.5% 8.2% S. America (38.3%) (14.8%) Total (5.0%) 4.3% $4,062 $248 $3,858 ($378) ($74) Q2 2014 Foreign Price Sales Q2 2015 exchange/ (1.8%)
Slide 12: Operating income growth
Operating income growth Q2 2015 vs. Q2 2014 ($ millions) $520 $83 $526 $55 12.8% ($74) 13.6% ($50) ($8) Q2 2014 Price Foreign D&A Net performance/ Sales Q2 2015 (1.8%) exchange/ other growth commodities Strong margin expansion 12 Note: Operating income adjusted for restructuring and other special it
Slide 13: Segment financials
Segment financials Q2 2015 vs. Q2 2014 ($ millions) Q2 2015 Growth Operating income margin2 Reported Adjusted1 Q2 2014 Q2 2015 E/EA (5.6%) 3.6% E/EA 13.6% 14.3% Powertrain (3.8%) 6.6% Powertrain 11.6% 12.8% E&S (6.2%) 1.7% E&S 11.6% 12.3% $2,165 $2,242 Revenue1 Operating income2 Q2 2014 Q2 2014 $294
Slide 14: Earnings per share
Earnings per share Q2 2015 vs. Q2 2014 $1.35 $0.07 $1.34 $0.02 ($0.10) Q2 20141 Taxes/other Operating1 Share Q2 20151 income repurchases Solid earnings per share results 14 1 Adjusted for restructuring and other special items; see Appendix for detail and reconciliation to US GAAP
Slide 15: 2015 guidance assumptions
2015 guidance assumptions • Global market growth ~1% - 2% – North America ~3% – Europe ~1% - 2% – China ~4% – South America (~15%) • Euro 1.10 Continued industry volume growth Source: July 2015 IHS Automotive and Delphi internal estimates 15 Note: Includes medium/heavy duty trucks
Slide 16: 2015 guidance
2015 guidance (millions, except per share amounts) 2015 Outlook Q3 2015 Outlook Reported revenue $15,200 - $15,600 $3,700 - $3,900 Growth % 6% - 8%1 6% - 12%1 Operating income2 $1,980 - $2,030 $460 - $480 Operating margin 13.0% 12.4% EPS2 $5.30 - $5.40 $1.25 - $1.35 Cash flow before financing ~$1,10
Slide 17: Strategic investment overview
Strategic investment overview Kevin Clark President and Chief Executive Officer
Slide 18: Capital allocation strategy remains unchanged
Capital allocation strategy remains unchanged Capital deployment Acquisition guidelines • Strengthen product portfolio Strategic M&A and • Diversify customer and regional mix share repurchases ~45-55% • Solid operating systems Dividends Operating • Strong management team and cultural fit ~10-15% • H
Slide 19: Value enhancing portfolio modifications
Value enhancing portfolio modifications Acquisition Q3 2015: Investment HellermannTyton Divestiture Q2 2015: Reception Enhances position in Systems divestiture electrical architecture Refocused E&S portfolio Q2 2015: Tula Software for dynamic cylinder deactivation Q3 2014: Antaya/Unwired Expands con
Slide 20: Recent technology investments
Recent technology investments Investment date: Q2 2015 Investment date: Q2 2015 Agreement date: Q2 2015 Closed: July 2015 Terms: Terms: Terms: Minority venture Minority venture Acquisition Competitive offering: Competitive offering: Competitive offering: High value dynamic cylinder Low cost solid Au
Slide 21: Content growth driving increased electrical architecture
Content growth driving increased electrical architecture Cable Management Systems Cable/Wiring Connectors Enables Digital Data Electrification content growth 2 2.5 miles 350 Up to 1.5 Up to 600 V 0 2 gigabit/sec 0 2 0 1 1.5 miles 280 65 megabit/sec 12 V 5 +67% +25% +2,200% +50x increase connectors R
Slide 22: Delphi to acquire HellermannTyton
Delphi to acquire Transaction details HellermannTyton at a glance • $1,850M enterprise value • Broad portfolio of highly engineered mission Purchase • £1,074M equity value critical cable management solutions price • Market leader with worldwide brand • Synergy adjusted forward multiples below Multip
Slide 23: HellermannTyton business overview
business overview Financial profile 2014 segment revenue mix (€ millions) 2015 consensus sales €679 % growth ~14% Electrical/ Automotive Datacom Historical EBITDA margins ~20% 50% 50% Employees ~4,000 Manufacturing facilities 12 Track record of growth 2014 regional revenue mix Auto production index
Slide 24: Perfect fit with Delphi's acquisition guidelines
Perfect fit with Delphi’s acquisition guidelines • Expands electrical architecture portfolio with components that support the Strategic growth of connected vehicle • Further diversifies customer base and enhances geographic reach • Solid operating performance with high contribution margins Operating
Slide 25: Key areas of synergies
Key areas of synergies • Sourcing savings Operating • Supply chain savings efficiencies • Elimination of public company costs Revenue • Leverage combined product portfolio synergies • Capitalize on attractive industrial end-markets Full run-rate synergies of ~$50M 25
Slide 26: Acquisition summary
acquisition summary Strengthens leadership position in electrical architecture Accelerates revenue and earnings growth Offers expansion opportunities into attractive industrial end-markets Provides significant operating synergies Immediately accretive to earnings per share Acquisition creates signif
Slide 27: Summary
Summary • Record financial performance – Strong revenue growth in excess of market – Solid operating performance – Continued margin expansion • Portfolio realignment that enhances shareholder value – Closed on sale of Thermal – Invested in Tula Technology, Inc. and Quanergy Systems, Inc. – Reached a
Slide 28: Appendix
Appendix DELPHI
Slide 29: Non-US GAAP financial metrics
Non-US GAAP financial metrics ($ millions) Q2 2015 Q2 2014 Net income attributable to Delphi $645 $382 Interest expense $30 $33 Other expense (income), net $2 ($3) Income tax expense $80 $56 Equity income, net of tax - ($3) Income from discontinued operations, net of tax ($298) ($27) Net income attr
Slide 30: Non-US GAAP financial metrics
Non-US GAAP financial metrics ($ millions) Q2 2015 Q2 2014 Net income attributable to Delphi $645 $382 Income from discontinued operations attributable to Delphi, net of tax ($295) ($22) Income from continuing operations attributable to Delphi $350 $360 Adjusting items: Restructuring $17 $54 Other a
Slide 31: Non-US GAAP financial metrics
Non-US GAAP financial metrics ($ millions) Q2 2015 Q2 2014 Cash flows from operating activities: Income from continuing operations $369 $379 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization $135 $135 Working capital ($22) ($8) Pension co
Slide 32: Shares outstanding
Shares outstanding (millions) Three months ended June 30, 2015 2014 Weighted average ordinary shares outstanding, basic 287.77 302.68 Dilutive shares related to RSUs 1.08 1.06 Weighted average ordinary shares 288.85 303.74 outstanding, including dilutive shares 32
Slide 33: Non-US GAAP financial metrics – 2014 Quarterly Data
Non-US GAAP financial metrics – 2014 Quarterly Data ($ millions) Q1 2014 Q2 2014 Q3 2014 Q4 2014 Net income attributable to Delphi $320 $382 $305 $344 Interest expense $35 $33 $33 $34 Other (income) expense, net $17 ($3) ($5) ($1) Income tax expense $69 $56 $56 $74 Equity income, net of tax ($7) ($3
Slide 34: Non-US GAAP financial metrics – 2014 Quarterly Data
Non-US GAAP financial metrics – 2014 Quarterly Data ($ millions, except per share amounts) Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Net income attributable to Delphi $320 $382 $305 $344 Income from discontinued operations attributable to Delphi, net of tax ($10) ($22) ($6) ($4
Slide 35: Non-US GAAP financial metrics – 2013 Quarterly Data
Non-US GAAP financial metrics – 2013 Quarterly Data ($ millions) Q1 2013 Q2 2013 Q3 2013 Q4 2013 Net income attributable to Delphi $276 $367 $271 $298 Interest expense $36 $36 $34 $37 Other (income) expense, net $34 ($5) ($4) ($7) Income tax expense $32 $71 $68 $69 Equity income, net of tax ($3) ($5
Slide 36: Non-US GAAP financial metrics – 2013 Quarterly Data
Non-US GAAP financial metrics – 2013 Quarterly Data ($ millions, except per share amounts) Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Net income attributable to Delphi $276 $367 $271 $298 Income from discontinued operations attributable to Delphi, net of tax ($12) ($17) ($5) ($8
Slide 37: The future. Now.
sthe future. Now. DELPHI Innovation for the Real World