Slide 1: Second quarter 2017 earnings call
August 2, 2017 Second quarter 2017 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 Operational and strategic overview • Strategic update Kevin Clark Chief Executive Officer Financial overview • Q2 2017 results Joe Massaro Chief Financial Officer • Q3 and 2017 guidance Q&A Kevin Clark / Joe Massaro 3
Slide 4: Strategic overview
Strategic overview Kevin Clark President and Chief Executive Officer
Slide 5: Second quarter highlights
Second quarter highlights Revenue Operating income Earnings per share $4.3B $8.6B $0.6B $1.1B $1.71 $3.29 Q2 Up 5% YTD Up 7% Q2 Margins Up 20bps YTD Margins Up 20bps Q2 Up 13% YTD Up 17% • Strong sales, margins and EPS growth continues; raising 2017 outlook • Investments delivering continued growth
Slide 6: Recent headlines
Recent headlines Betting on Electric: Gas, Diesel vehicles banned: “France will stop selling petrol and diesel vehicles “Volvo Cars....became the first mainstream automaker to by 2040, France's new Ecology Minister Nicolas Hulot sound the death knell of the internal combustion engine, said…the measu
Slide 7: Delivering growth today
Delivering growth today RemainCo Powertrain Active Safety Power Electronics • Revenue: 2Q up 65%, FY up 50% • Revenue: 2Q up 25%, FY up 25% • 11 major customers today, ~20 by 2020 • Vehicle electrification accelerating Infotainment & User Experience Gas Direct Injection & Variable Valvetrain • Reven
Slide 8: Bookings growth
Bookings growth RemainCo Booked Program Lifetime Value Powertrain (2011 - H1 17 Cumulative Bookings, $B) (Adjusted bookings1, $B) (2011 - H1 17 Cumulative Bookings, $B) $25 KEY GROWTH $25 $26 $13 KEY GROWTH $21 $21 TECHNOLOGIES $20 TECHNOLOGIES $17 Active Safety Gas Direct Injection (GDi) $14 Infota
Slide 9: Winning on new platforms
Winning on new platforms EEA E&S Powertrain High Voltage Electrification Active Safety & ADAS Power Electronics Global OEM Strong wins in Active Safety and Electrification 9
Slide 10: Electrification update
Electrification update Global Electrified Vehicles Electrification Addressable Content (CPV)1 Production (Millions) • 48V fusing & distribution BEV $900 Source: IHS June 2017 ~33M • High power & voltage connectors Electrical PHEV $900 BEV • Charging inlets and cables 4 Architecture HEV • High voltag
Slide 11: China market update
China market update Hosted six day customer automated rides in China during the Shanghai China Electrification Auto show. Vehicle Production (Millions) Source: IHS June 2017 H1-17 ~16M Delphi 2 BEV 8% 3 Growth Over PHEV Market 1 HEV 10 48V ~4M Favorable content and vehicle mix Government standards b
Slide 12: Automated Mobility on Demand (AMoD) pilots
Automated Mobility on Demand (AMoD) pilots MOBILITY CHALLENGES Trial of an urban, point-to-point, low-speed, • Safe and accessible transport autonomous, mobility-on-demand Singapore (AMoD) service in Singapore's one-north • Traffic / congestion business park • Infrastructure expansion • Equitable ac
Slide 13: Financial overview
Financial overview Joe Massaro Chief Financial Officer and Senior Vice President
Slide 14: Q2 2017 vs. Q2 2016
Q2 2017 vs. Q2 2016 ($ millions, except per share amounts) Q2 2016 Q2 2016 PF3 Q2 2017 B/(W) Reported revenue $190 $4,206 $4,128 $4,318 Adjusted Growth %1 5% EBITDA2 $748 $722 $764 $42 EBITDA margin % 17.8% 17.5% 17.7% 20 bps Operating income2 $580 $555 $587 $32 Operating margin % 13.8% 13.4% 13.6%
Slide 15: Revenue growth
Revenue growth Q2 2017 vs. Q2 2016 Year-over-year growth by region ($ millions) Reported Adjusted1 $4,206 $314 $4,318 Q2 2017 Q2 2017 $4,128 $3 ($78) ($80) ($47) Europe (2%) 3% N. America 0% 0% Asia 13% 16% S. America 22% 15% Total 3% 5% Q2 2016 Mechatronics Q2 20162 Price FX/ Acq/ Sales Q2 2017 Pro
Slide 16: Operating income growth
Operating income growth Q2 2017 vs. Q2 2016 Highlights ($ millions) • Volume flow through $580 $90 $587 $555 ($25) $27 13.6% • 1.9% price downs 13.8% ($80) 13.4% ($4) ($1) • Continued performance benefits • Record launch volumes Q2 20161 Mechatronics Q2 2016 Price FX/ Acq/ Performance/ Sales Q2 2017
Slide 17: Q2 2017 Segment financials
Q2 2017 Segment financials E/EA E&S Powertrain (Revenue, $ millions) Mechatronics revenue $1,187 $2,352 $2,345 $821 $1,146 $748 $670 19% Adjusted 7% Adjusted growth 1 Flat growth1 Growth 20% Growth 8% Growth Over mkt 1% Over mkt Over mkt Q2 2016 Q2 2017 Q2 2016 Q2 2017 Q2 2016 Q2 2017 ($ millions) Q
Slide 18: Earnings per share
Earnings per share Q2 2017 vs. Q2 2016 Highlights $0.04 $1.71 • Strong operating income $0.13 $0.03 $1.59 $1.52 growth ($0.07) ($0.01) • Favorable interest expense from prior year refinancing • Lower share count Q2 20161 Mechatronics Q2 20161 FX/ Operating2 Share Taxes/ Q2 20171 Pro-forma commoditie
Slide 19: Macro update
Macro update TAILWINDS HEADWINDS Key Growth Technologies Slowing NA Vehicle Production Launch Volume / Ramps Light Duty Diesel Market £ FX / Commodities Relevant technology portfolio offsetting N. American production declines 19
Slide 20: 2017 guidance
2017 guidance ($ millions, except per share amounts) Q3 2016 pro forma1 Q3 20174 20174 Reported revenue $4,022 $4,000 - $4,100 $16,850 - $17,050 Adjusted growth2 ~3% 4% - 5% Operating income3 $515 $520 - $540 $2,240 - $2,300 Operating margin 12.8% ~13.1% ~13.4% - 13.5% EPS3 $1.44 $1.52 - $1.58 $6.55
Slide 21: Powertrain Spin-off update
Powertrain Spin-off update Update Investor Day preview • Filed initial Form 10 in June 10AM September Boston Progress • Completed rating agency reviews 3PM 27 • Estimated cash separation costs $300-350M* Wednesday • RemainCo and Powertrain strategic overview • Continued Form 10 progress • Technology
Slide 22: Wrap Up
Wrap Up • Positive trends, strong new business wins continue across all business segments Delivering • Relevant technology portfolio offsetting N. American production declines raised outlook strong 2017 • Expanding on industry leading margins while continuing investments for growth • Flexible busi
Slide 23: Making it possible.
Making it possible. Innovation for the Real World
Slide 24: Appendix
Appendix DELPHI
Slide 25: Non-US GAAP financial metrics
Non-US GAAP financial metrics ($ millions) Q2 2017 Q2 2016 Net income attributable to Delphi $369 $258 Interest expense $35 $41 Other (income) expense, net ($8) $5 Income tax expense $62 $84 Equity income, net of tax ($7) ($7) Net income attributable to noncontrolling interest $17 $13 Operating inco
Slide 26: Non-US GAAP financial metrics
Non-US GAAP financial metrics ($ millions) Q2 2017 Q2 2016 Net income attributable to Delphi $369 $258 Interest expense $35 $41 Other (income) expense, net ($8) $5 Income tax expense $62 $84 Equity income, net of tax ($7) ($7) Net income attributable to noncontrolling interest $17 $13 Operating inco
Slide 27: Non-US GAAP financial metrics
Non-US GAAP financial metrics ($ millions, except per share amounts) Q2 2017 Q2 2016 Net income attributable to Delphi $369 $258 Income from discontinued operations attributable to Delphi, net of tax - - Income from continuing operations attributable to Delphi $369 $258 Adjusting items: Restructurin
Slide 28: Shares outstanding
Shares outstanding (millions) Q2 2017 Q2 2016 Weighted average ordinary shares outstanding, basic 267.41 272.92 Dilutive shares related to RSUs 0.62 0.45 Weighted average ordinary shares outstanding, including dilutive shares 268.03 273.37 28
Slide 29: Financial guidance metrics
Financial guidance metrics ($ millions) Q3 20171 20171 Net income attributable to Delphi $351 $1,480 Interest expense $34 $138 Other expense, net - $17 Income tax expense $62 $267 Equity income, net of tax ($6) ($30) Net income attributable to noncontrolling interest $15 $69 Operating income $456 $1
Slide 30: Financial guidance metrics
Financial guidance metrics ($ millions, except per share amounts) Q3 20171 20171 Net income attributable to Delphi $351 $1,480 Restructuring $47 $242 Separation costs $22 $61 Other acquisition and portfolio project costs $5 $17 Asset impairments - $9 Reserve for Unsecured Creditors litigation - $10
Slide 31: Pension expense reclassification detail
Pension expense reclassification detail ($ millions) Q1 2016 Q2 2016 Q3 2016 Q4 2016 2016 Adjusted net income attributable to Delphi $377 $435 $409 $498 $1,719 Pension expense reclassification impact on operating income $3 $3 $3 $10 $19 Pension expense reclassification impact on other income ($3) ($
Slide 32: Mechatronics financial detail
Mechatronics financial detail ($ millions, except per share amounts) Delphi – Reported Q1 2016 Q2 2016 Q3 2016 Q4 2016 2016 Revenue $4,051 $4,206 $4,091 $4,313 $16,661 Adjusted EBITDA1 $674 $748 $707 $787 $2,916 Adjusted operating income1,2 $512 $580 $534 $616 $2,242 Adjusted operating margin1,2 12.
Slide 33: DELPHI
DELPHI Innovation for the Real World