Aptiv Plc · NYSE:APTV
Aptiv — Delphi Automotive — Deutsche Bank Global Auto Industry Conference 2017
33 slides from Aptiv's conference presentation, Jan 11, 2017
Slide 1: Deutsche Bank Global Auto Industry Conference
January 11, 2017 Deutsche Bank Global Auto Industry Conference Kevin Clark President and Chief Executive Officer
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: Strategic priorities
Strategic priorities Disciplined revenue growth • Enhance portfolio of market relevant products • Balanced regional growth • Further diversify customer base and platform mix Cost structure optimization • On-going footprint rotation to best cost countries • Continuous improvement of Delphi Enterprise
Slide 4: Safe, green and connected technology trends
Safe, green and connected technology trends China Emissions: 117 CO2 g/km – 2020 EU Emissions: 95 CO2 g/km – 2021 US Fuel economy: 54.5 mpg – 2025 2010 2015 2020 2025 Assisted ADAS Semi Fully automation expansion automated automated Increasing levels of electrification Electrical architecture is an
Slide 5: CES highlights
CES highlights Automated driving Electrification Connected car/Infotainment • Demonstrated Delphi and • 48V mild hybrids deliver ~70% • Connected car and V2X Mobileye’s CSLP automated CO2 emissions reductions of full functionality penetration presents driving platform hybrids at ~30% cost growth opp
Slide 6: Active safety evolving to include more automation
Active safety evolving to include more automation 100% 10x 80% Safety benefit Cost 20% Safety benefit Cost 1x Level 0 Level 1 Level 2 Level 3 Level 4 Level 5 Function-specific Combined function Limited self-driving High self-driving Full self-driving No automation automation automation automation au
Slide 7: Select Active Safety launches
Select Active Safety launches Volvo XC90 Porsche Cayenne Audi A8 RACam Multi-Domain Controller Multi-Domain Controller ~$400 ~$400 ~$400 Active Active Active Safety Safety Safety CPV CPV CPV Launched 2016 Launching 2017 Launching 2017 Providing integrated intelligent solutions for our customers 7 No
Slide 8: Delphi enables industry technology trends
Delphi enables industry technology trends Advanced computing platforms Active Safety & Infotainment functionality Multi-Domain Controller (MDC) Integrated Cockpit Controller (ICC) Centralized sensor fusion and user experience control V2X Cluster Connectivity Gesture Controller Head Unit Controller C
Slide 9: Electrification dominates the headlines
Electrification dominates the headlines “Mercedes’ EQ brand plans to build a new electric car model every year, funneling $7.3bn to fund EV research “Volkswagen announces strategy shift to and development over next decade.” – Car and Driver build battery packs, EVs and hybrids in Germany.” – Fortune
Slide 10: Electrification expected to grow
Electrification expected to grow Electrification increases in the next 10 years: ~27M by 2025 30 Battery Electric BEVs 25 20 Vehicles (millions) Plugin Hybrids PHEVs 15 10 Full Hybrids HEVs 5 48 Volt - 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Mild Hybrids 48V Mild Full PHEV BEV Delphi’
Slide 11: Electrification increases Delphi content per vehicle (CPV)
Electrification increases Delphi content per vehicle (CPV) Delphi technologies Electrification CPV1 2020+ opportunities Powertrain Management ~$2,400 ~$2,400 • Supervisory controller • Combined inverter/converter • Supervisory software • 48V Driver module • Inverter • DC/DC converter ~$1,600 5.0x 5.
Slide 12: Select electrification launches
Select electrification launches Tesla Model X Chevrolet Bolt Volvo XC90 Electrical Systems Electrical Systems Battery Management ~1.5x ~1.5x ~4.0x average average average CPV CPV CPV Launched 2015 Launched 2016 Launched 2015 Increased electrification delivers more content for Delphi 12 Note: Content
Slide 13: Portfolio evolution continues
Portfolio evolution continues Acquisition Divestiture Investment 2017 2016 2015 Over-The-Air update technology 2015 Multi-layer 3D 2015 display technology Software-as-a-service for 2015 data management Reception Enhanced position in 2014 electrical architecture Systems Software for dynamic divestitu
Slide 14: Broadening business model
Broadening business model Recent announcements Future opportunities • Broadens our “Big Data” capabilities • Scalable vehicle software, programming and OTA updates enhances Services business revenues • Leverages real-time data and the cloud to • Expanding usage with global OEMs via integration ident
Slide 15: Returning value to shareholders
Returning value to shareholders Share repurchase history TSR since IPO ($ billions) (Total shareholder return) $1.2 235% ~$5.0B cash $1.0 returned to shareholders 180% 2011 – 2016 ~$0.6 $0.5 $0.4 2012 2013 2014 2015 2016E Auto peers DLPH Significant return to shareholders Total shareholder return (T
Slide 16: Key takeaways
Key takeaways • Advanced technology driving above market growth – Product portfolio uniquely aligned to safe, green and connected megatrends – Automation and electrification create additional growth opportunities • Strategic partnerships and accelerating product innovation – Aligning with industry l
Slide 17: Deutsche Bank Global Auto Industry Conference
Deutsche Bank Global Auto Industry Conference Joe Massaro Chief Financial Officer and Senior Vice President
Slide 18: Performance highlights 2010-2016
Performance highlights 2010-2016 Revenue Operating income2 EPS3 ($ billions) ($ billions) ~$16.5 ~$2.2 ~$6.05 $12.3 13.2% $1.1 8.8% $0.84 2010 2016E 2010 2016E 2010 2016E Track record of strong financial performance 1 Adjusted for FX, commodities and significant acquisitions and divestitures 2. Oper
Slide 19: 2016 revenue bridge
2016 revenue bridge 2016E vs. 2015 ($ billions) $1.0 ~$16.5 ~$16.2 ($0.3) $0.7 $15.2 ($0.4) 2015 FX/ M&A Organic 2016 Planned 2016 commodities growth guidance divestiture baseline Organic growth more than offsets macro headwinds 19 19
Slide 20: Bookings growth
Bookings growth Continued bookings growth 2011 – 2016 key technologies ($ billions) Infotainment & Active Safety User Experience $26 ~$26 $25 $24 $24 $22 ~40% ~15% $21 $21 $20 $20 CAGR2 CAGR2 $17 ~$5B ~$13B 48V / EV / HEV GDi & Valve Train ~35% ~15% CAGR2 CAGR2 2011 2012 2013 2014 2015 2016 1 ~$5B ~
Slide 21: Further improving cost structure
Further improving cost structure Manufacturing expense % of revenue Net engineering spend1 ($ billions) 17.6% ~$1.3 ~17.3% <17% ~$1.2 $1.2 2015 2016E 2017E Material cost % of revenue 49.1% ~48.0% <48% 2015 2016E 2017E % advanced engineering ~18% ~20% 2015 2016E 2017E Lean cost structure allows for i
Slide 22: Breakeven analysis
Breakeven analysis 2017E cash flow breakeven summary Management priorities Actual Breakeven • Manufacturing footprint rotation • Strategic portfolio realignment 35% • Enhanced sourcing activities 90% • Maintain flexible workforce • Corporate overhead reductions 1 Revenue Operating Income Constant fo
Slide 23: Capital structure
Capital structure WeightedDec ($ millions) average 31, 2015 maturity Dec 31, 2016E Weighted average maturity Free cash flow4 (years) ($ millions) Cash1 $536 ~$800 ~3 year 9.4 increase 6.6 Debt $4,008 ~$4,000 ~$1,100 Net debt $3,472 ~$3,200 Before refinancing After refinancing $963 Debt-to- 2.1x 2.0x
Slide 24: Capital allocation track record
Capital allocation track record 2011-2016E capital allocation Capital deployment ($ billions) • Advanced engineering, including automated driving, ~$2.3B Growth R&D ~$4.4 net M&A faster computing platforms, infotainment and electrification ~$5.0B outflow cash 2011 – 2016 returned to shareholders • S
Slide 25: Portfolio realignment
Portfolio realignment Acquisition/ 2015-2018 2015-2018 Synergy Explanation divestiture date revenue CAGR EBITDA Margins achievement EBITDA margins over plan Q4 2012 ~5% ~30% 1.5x Synergies in excess of plan Bookings ahead of plan Q4 2014 ~30% ~20% 1.5x Revenue growth well over plan Synergies in exce
Slide 26: 2017 business outlook
2017 business outlook Tailwinds Neutral Headwinds Consumer & Global vehicle Diesel market regulatory demands production High-growth products: ADAS, GDi, Electrification and Pricing Exchange rates Infotainment (EUR, GBP and CNY) Cost structure Portfolio modifications Cu Commodities optimization Mecha
Slide 27: Exchange rate sensitivity
Exchange rate sensitivity Key exchange rate index Absolute rate changes Revenue 1% ∆ sensitivity 105 1.40 1.30 100 1.20 ~$50mn 1.10 95 1.00 Jan-14 Jan-15 Jan-16 Jan-17 90 1.80 85 1.60 ~$5mn 1.40 80 1.20 75 Jan-14 Jan-15 Jan-16 Jan-17 7.00 70 6.75 6.50 ~$30mn 6.25 6.00 EUR GBP CNY Jan-14 Jan-15 Jan-1
Slide 28: Delphi investment thesis
Delphi investment thesis Portfolio Organic growth Margin Capital management acceleration expansion allocation • Portfolio aligned to • Targeted market • Optimized cost structure • Balanced, predictable megatrends penetration cash deployment • Enterprise operating • Increasing exposure to • Well posi
Slide 29: Making it possible.
Making it possible. 01110110 01100001 91113010 * ; DELPHI Innovation for the Real World
Slide 30: Appendix
Appendix DELPHI
Slide 31: Non-US GAAP financial metrics
Non-US GAAP financial metrics ($ millions) 2015 2010 Net income attributable to Delphi $1,450 $631 Income tax expense $263 $226 Interest expense $127 $30 Other (income) expense, net $88 ($35) Noncontrolling interest $85 $72 Equity income, net of tax ($16) ($6) Income from discontinued operations, ne
Slide 32: Non-US GAAP financial metrics
Non-US GAAP financial metrics ($ millions) 2015 Net income attributable to Delphi $1,450 Income from discontinued operations attributable to Delphi, net of tax ($262) Income from continuing operations attributable to Delphi $1,188 Adjusting items: Restructuring $177 Other acquisition and portfolio p
Slide 33: Non-US GAAP financial metrics
Non-US GAAP financial metrics (millions) 2015 Net cash provided by operating activities from continuing operations $1,667 Capital expenditures ($704) Free cash flow $963 The company’s guidance was determined using a consistent manner and methodology 33
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