Aptiv (APTV) 3 Nov 222022 Q3 Earnings call transcript

Good day, and welcome to the Aptiv Q3 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.

Thank you, Bettina. 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 www.aptiv.com. be slide the review other items and operations Aptiv. and amortization, continuing special the our exclude address Today's of of restructuring financials will earnings at well full year the XXXX reconciliation and measures release. non-GAAP presentation our The press of for our slide are as included the between GAAP QX back the financials as outlook and

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

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

highlights. morning. the thanks, for and a let so Jessica, a you, Thank strong quarter, of Slide joining Beginning us everyone, X. this on third had on We me few touch

driven X already strength $X outpacing totaled points representing in underlying bookings cementing amount of and over XX% Revenue year bringing safe, to $XX and billion, record the production, last product $XX green over growth year's $X.X connected XXXX. our the to full billion, portfolio. record business vehicle another New billion, total of by of year-to-date over billion, increased year

cost recoveries million remain disruptions. inflation despite year's related well cost reach $X.XX, on macro constrained growth and invest offset share reductions, supply resiliency business this execute as in cost target respectively, $XXX Solutions totaled headwinds. chain by million We EBITDA to acquire and material to to Automotive $XXX to strengthens and the profitability of model. to agreement and our portfolio. of we flow-through material reflecting our our further material and increasing $XXX our of high-voltage And partially continue volume Intercable lastly, growth costs earnings opportunities per which and on continue million by reflected enhancing recoveries environment track product We and of the

will strength to fully can combined we Intercable design allow scale, portfolios, combined and global welcoming year China, America strengthen to accelerate enhance the and and of to company the of Slide synergies solutions Intercable architecture manufacturing positions X. uniquely to vehicle The electrical high-voltage products optimized look industry-leading Intercable optimize growth us an product full Turning Aptiv's Automotive that and earnings and and businesses. of reduce Aptiv system-level Automotive has leveraged especially leverage systems. an product the and outstanding vehicle team. the architecture portfolio busbars The has our this interconnect between manufacture and leverage management with architecture weight, breadth North footprint, closing including our several design to and these leader their very in to capabilities solutions. high-voltage is and seventh deliver further industry in busbar strong our they've capabilities, developed and Intercable innovative of Aptiv costs, a automotive mass of solutions, power later transaction forward into to partnership this relationships We revenue generation team Aptiv's leading European that portfolio OEMs. high-voltage that

Slide highlights. to our X review Turning to segment

electrified major Safety Our future. local vehicle for a including helping representing customer. active from our is portfolio a ADAS advanced our software-defined seventh of solutions segment, of next-generation In full third active platform Brain business penetration development Experience the the of Chinese major to Advanced User the technologies solutions, across the accelerating safety and OEM system both safety our are the System and the award increase of platform, Nervous quarter

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uniquely drive In has as leader a full our high-voltage our system in to revenue leverage growth industry-leading markets, to our as architecture. diversification vehicle solutions which battery with and XX% vehicle and expand quarter. systems, vehicle electronics our position capabilities addition, electronic during vehicle in the power successfully into and we positioned and architecture, management And provider further the position strong combined continue commercial increased capabilities lastly, broadening architecture our of industry nonautomotive portfolio the to offerings software and our us systems strengthening in solution

how Moving to Slide motion. in put X, innovation we

PACE central is to vehicle, enabling physical element This This flow and scheduled Chinese XXXX During software-defined XXXX is the with a is OEM. our platform was a and key and controlling and the vehicle smart compute software that of quarter, Controller begin solution vehicle the critical body high-performing managing and essential the winner action, is Aptiv in into by Vehicle and efficiently to first-to-market current vehicle. off high-speed named data of code communication for piece the emerging securely translates architecture protocols for Award which Central of a production functions. complexity reducing controller architecture major a critical a on particular up-integrating our

the Conference reduce Blume our in here. hardware through Increasingly complexity XXXX as software-defined both system-level This increasing of complexity VW team tools our Aptiv's applications in as they OEMs, automation, full our quality cloud XXXX assembly software to is With important his enabling next-generation collaborating develop Oliver is solutions IZB Wolfsburg, enables the architectures, innovative while overwhelmingly optimization, software, right full technology positive, providing these and positioned that at evidenced IZB solutions, important bring at showcased are by of opportunity to further was we native system they in of hardware. Feedback from Aptiv which also to software will and where tools, automotive to development in to end-to-end OEM investing OEM previewed unveil increasingly participation CEO, And our with and cost. recent capable we while as reducing migrate an level Germany, trusted We support. customers partner. for design System of customers IZB the have of solutions and our with Aptiv uniquely to increase architecture portfolio supporting breakthrough and from management a why Nervous validating customers abstraction capabilities and to to capabilities, pictured software Brain CES levels the collaboration it's we're market

Turning update to an Slide X awards. to on business provide new

of a during billion, our our next-gen deliver for OEM of Chinese safety Solutions I local billion reached of surpassing scalable Advanced major to range segment quarter Driven billion. our a wide offerings, bringing the of record, to our and year-to-date awards, our features. totaled validation We've billion. billion, a the leverage the adoption year will our ADAS and award our business bringing for bringing mentioned, strength record including the of to safety portfolio totaled previous billion our exceptional electrification high-voltage quarter, technologies $X.X a across support new third mentioned advanced for customers. the from Experience platform total total As and bookings balanced Bookings value technologies. active roughly $X.X ability further previously underscoring very Signal $XX continued our I our industry-leading which product advanced year-to-date business strong solutions, of advanced high-voltage for we during the full new $XX.X $X.X portfolio User year-to-date Safety of bookings total of profile advanced seen bookings strong solution, to by the strength Power the ADAS $X.X including quarter quarter another

new our our cost the validation Another customer material of business portfolio, relationships awards at while negotiating same with uniqueness successfully strong and customers the our of of further time of strength is recoveries OEM execution. quarter our the operating flawless

environment position intelligently value these the vehicles content and addressable less cost confident will vehicle in markets. us to to our electrified input our enhancing needs an capabilities to on in recovering strengthen material electrified margin With new diversifying be further capital structure, financial increased to as to headwinds, and continue Turning more I'll macro increase create to continue we our constrained the meaningful of the of the transitions and call turn system value model We're nonautomotive take into actions creation to over strong market, full to Despite our strong smartly the go software-defined generation. will to reflected revenue meet and flow deliver highlights business our of of X. bookings, the solutions deploying evolving over our that the to software-defined base portfolio customers acceleration cyclical industry actions continued Slide cash costs expansion to detail. through and that, underlying revenue resiliency growth sustainable the by the optimizing and business in increase our Joe future,

on financials Starting X. everyone. with Kevin, Slide a recap Thanks, of morning, third quarter and the good

grew As income XXX% on production. basis from in in both above opening million, of vehicle $X.XX, the million, prior sequentially, as increased XXX offset of was billion price continued increases. expanded prior margins environment return commodities and normalized million his were sequentially, recoveries X increase XX% XXX over and quarter of customer approximately $XXX reflecting EBITDA versus savings more respectively. underlying up EBITDA a FX, quarters. noted well performance points year, and points improvement third year and totaled significant cost on other Kevin impact Adjusted and nonmaterial progress earnings. down actions, were last flow inflation, material $XXX reflecting as $X.X to partially and of And and the of revenues quarter net year-over-year from basis by of $XXX and year comments, EPS cost a growth cash with points higher flow-through operating XX%, operating an the sequential direct a volumes

flow for cash our year moment, we expected for were inventories constraints Capital guidance prepare expenditures I As investment launch certain higher discuss to in the $XXX and navigate activities. will in supply updating better quarter to reflect help be XXXX the will chain full key a million.

safety Looking XX. revenue the the rebound quarter growth both growth on Adjusted active across of in by led in as revenues heavily reflect well in production was over high and market impacted conditions. which was shortages. some our more third XX% including improvement year, key from our semiconductor chain the prior lines, by at Growth as and reflected supply vehicle Slide detail all product ahead voltage regions global

despite of above and $XXX high FX supply of launch totaling on North by in chain $XXX million, saw our weaker continue direct in activity to both $XX up inflation with in continued market this indirect environment customers customers outgrowth recoveries and American and we and over were impact Europe, active significant Regionally, by and market voltage a points driven million, constraints. segment. approximately were operations. at XX% downs X%, and significant, or However, production our operate primarily in was relative to part and as by a RMB. totaled North In were Direct related And ASUX commodity several X% constrained revenues Signal in impacts American growth. material revenues China, larger we impacted up or price improvement, driven X.X%. The were Euro XX% our increase million, the XX Power safety

slide. Moving segments the in User rose market. Advanced on revenues X% to over period the or and Experience the next XX% Safety

customers over several As ASUX vehicle supply impacted constraints that experienced their chain American lower production in previously growth experienced noted, North quarter. market the as

recoveries, line reflecting or improved customers, Power Excluding operating revenues engineering strong revenue XX% high volumes on the or partially The incremental of volumes, and over was Signal market. growth performance of on or and adjusted rose material EBITDA commodities. driven discussed XX.X% benefit and million market in include $XXX these the Segment incremental by recoveries, credits. outperformance the flow-through million $XXX previously offset expectations and including strong Segment in with was ASUX cost incremental EBITDA of Solutions of was prior impact strength period of revenues in FX product XX.X% lines, material and the above voltage. flow-through cost by XX% periods. several

outlook our to Slide Moving year full on XX.

has the execute for revenue, remain year in outlook are exchange, remain supply quarter concerns margins China despite the well Our increased our ongoing guidance disruptions of and full to guide. the positioned which that COVID despite we foreign last operating continue impacts confident constraints, EPS to since on We significantly provided negative in provided unchanged and chain impact from we Europe.

income the in the range and billion, communicated over of range billion year operating to revenue within to be expect a to $XX $XX.X per X% and a at an of growth $X.X market year, We respectively, last previously billion EBITDA meaningful $X.X XX%. drag of commodities. and over increase our for midpoint, from of earnings the despite billion $X.XX, of FX share and X%

We updating year of the now at we versus and billion to cash the our are prior flow guidance, $X.XX $X.X guidance finish expect billion.

number as early begin a key new our carry components in noted, flow help guidance As decision of of of chain we certain impact constraints the to updated cash XXXX. the prepare launches reflects to inventory previously I for mitigate to customer increased supply

the XXXX as next briefly year. to have the back planning turning phases I Before Kevin, started of on to touch we early call wanted for

it ongoing specific early provide Although guidance. given the macro too is to challenges, any

headwinds expect negatively on active XXXX However, chain back vehicle smoothness as making overall we continued benefit architecture, technologies Intercable our schedules, it transition will the vehicle the potentially have strategy levels although Europe, the continue recapture vehicles. we remains unchanged, impact FX headwinds material to would the expect more of deterioration contented voltage to production and in we in recoveries commodity and acquisitions, production particularly safety, With remain challenging to more believe key from And to supply well lingering And vehicle conditions, persist of as economic leverage. of operating software-enabled the the into for hand the made the and impacts until XXXX lead in progress inclusion cautious operational River be year. Wind high overall Kevin and second performance of to like smart and to the tightness changes higher that, of and euro we positioned demand well this like for half and meaningful I'd not to we remarks. the his to call the did occur and as closing RMB cost

Slide wrap questions. call I'll Joe. up the before up XX to Thanks, on opening

close and on business and foundation we Joe despite gain built Our constrained continues touched strong is headwinds a to macro environment momentum XXXX that out the just as on.

market reflected in has continued growth our with really never bookings. better been Our and of our business strong strategic customers alignment revenue OEM new our as over the pace

smartly increases We point actions strengthen our to results competitive by XXXX. continue evidenced quarter's inorganically material strong in optimizing and this the into capital to make structure, translated also momentum entry both and costs are progress further input in further and position. a providing significant improvement cost while recovering as our deploy we These and continue for organically a to margins have our

continued on challenging release revenue open update strong light we to in environment, expect fourth With we expansion XXXX macro mentioned, a the a on provide just quarter environment. Joe market and delivering up us line in that, the but outlook questions. focus for margin when can can over you As of current detailed we'll earnings, our growth

Our from comes Instructions] Research. Lache of question [Operator first Rod today Wolfe

everybody. hoping just morning, maybe better you the quarter. I bridge to understand this was year-over-year Good that earnings had first

So million you on this an EBIT XXX year. getting adjusted you're did basis, $XXX to and of

benefits commodities. Could volume, more out-of-period netting the on be And number? $XXX what billion was You were you That impact net than accounting out? any that of for net growth. tailwind, that conversion mentioned the XX% which in to talk that the obviously there will $X million just effect of

me Rod, start. Yes, let Joe, it's

year-over-year. about So on is the million $XXX mentioned FX, we revenue the number

flow million and FX is commodity. through On on numbers about the that $XX OI,

the up in freight RMB of at inflation, -- for, a euro quarter start fourth that an picks everything customer in then material we're just weakening and pick lot although but really perspective. end quarter some on the a a overly third the the the recoveries, the from lower fourth again, reimbursed quarter. Really as for and of of there's well So premium nothing going obviously, the that next net picking lot from Listen, obviously out-of-period quarter, up up in based seeing. puts the with and on takes quarter, we'll get will perspective,

got few different there. and the flow FX through things a net the if the really into you directions. volume you go So But of you've got got impact, sort

Okay.

like sounds FX recovery it higher number mostly So in and that that costs, understand was by if offset I mostly correctly? that

in only a normalized my a prepared we're seeing Yes. I'd The to I return mentioned - other say and down price environment. more thing remarks,

the been all So we've to downs got had recovery. price got until off price on been down through customer we've That -- X.X%. we holding

communicated to more normal last operating we return customers. to of we a as cadence quarter, So of with expected our sort

got So that well. price down as you at X.X%

you give yet. on seems of you're be adjusted detail And door in that. of XXXX. And you that tracking Okay. a you thinking the mentioned really can't to should I margins it seasonally kind the last opened quarter, to like back half. XX% are But lot around And we know a that basis,

of run You're $XX at an rate billion revenue.

So that's around Is million you're that next for additional of EBIT. of unrecovered to still go it year? costs billion after you that need kind -- there's about correct $X.X of $XXX that

XX% I'm XX.X% not we off to talked a point. jumping sure about

that's say we're as these My There of year. expected. hold impact. X.X there should sort if But we're or FX tracking of that. I'd had evaluate going to the going seeing. point to be from FX think into evaluate headwind of I happening things We're operationally, only we generally rates holding next about to I think everything to could would that range are caution sort one operationally have be,

excellent POs price customers. translating our to recoveries. increases on recapturing The and OEM cost now as can Rod into with maybe if done in team an relates material that I it chime job just has

respect from Obviously, if into with about XXXX inflation into incremental we need partly standpoint, is some what go material to by feel that XXXX. there's good particular So what to see heading influenced next we after a category. we going increases year

the we're material increased year aware inflation, year. a we'll to comments in Joe in on then well just RMB, what this month as I you relates next When the FX, it go are two. secondly, look to last we've think recent on So heading translated Euro seen his Joe's times. the positioned The movement that. highlighted into at And over a of of customers and OEM we've couple POs more it it into or prices. OEM If point significant there's with back change the to customers

So I it relates what there trend we the as sort see. think there's what's a and question do currencies of to heading movements into in XXXX

Great. updated Ford investment elsewhere in and we've the And Kevin, thoughts in from heard what just Motional on of market? just lastly, any in light just

Motional to Uber in terms motional or solution to Listen, the the advancing technology the I'm very map. be relates saw Uber as sure successful in Motional Yes. vehicles States. network of United the the integrate to plan in announcement it and continues you road the

portion which into our what we take utilized technology is portion how do today, it a doing active there's the our -- relates or announcement, out different platform. we how ADAS it of a nuTonomy which our nuTonomy, of that on pull to that When perspective our been that we're of with in Argo, element technology, Ford do strategy is has an big those for I in OEMs as forward current technologies piece is solutions, Automatica made of we vehicle and there. probably most than to are those respect autonomy generation safety to originally listen, relates embedded As a know-how was investments are and that think that a bit

In addition, a customer of is Motional Aptiv.

about think and perception customer. systems actually a So they're when other items, you

viewed, it it as far to viewed always the So think as the active past, kind the of we've I right? talked safety. of in in always autonomy we've about we've spectrum relates

fairly So operationally well from we're a strategic doing it's standpoint, what a standpoint, today. into business integrated

you. Thank Okay.

of Our go Citi. ahead. Please from Michaeli next question comes Itay

morning, Good thank Great, everybody. you.

ones. quick two Just

the QX on First guide.

going confirmed for next how hoping end Just year. the thoughts or on LVP the should And early year? back LVP of XXXX?\ range the then for Joe, thinking for views of bias maybe to your XXXX, and global we high any particular how you share about latest be any can low -- thinking maybe you're

working XXXX. seen let the with of amount Itay, There's me It's schedule. there. tremendous Yes. at puts customer start We're that. just a haven't through takes levels and still we

it's really to for numbers too the on a view early have direction. the or So us

we're As it to guide. holding QX, basically relates the

particularly I think with certainly if were production. some upside, to at it, look there's we potential for China

in build in range. we're increases. the I there recently, more more that extent to seen at production vehicles. to pullbacks the view bias certainly the to top in desire understand a way the China end we've more market is The Although But versus moment, schedules confident midpoint I probably of the guide there's the some

I between offsets going China, be big of sort and as and on steady it's line. an just production think to Europe how FX then holding increases vehicle trade-off a impact the top

on really the we're driver up which upside revenue to that's at see we'd and you schedules, there holding in China, understand customers. the So of really possible. from but of don't some is extent the in what guide admit We yet it bias quite the sort looking pick is

the from We revenue perspective. just FX are mindful impact on the the of --

reiterate I point. want I qualitatively, just Itay, can to Joe's just

The is more recently, see in the QX. production reality schedules, customer more right, chains in volatility supply on the downside improving. be China not volatility did seem which seeing we continued we're And to schedules, maybe to Although week-to-week.

Got It. That’s helpful.

ahead. of Our Capital next Markets. question RBC from go Please comes Spak Joe

had sort Joe, of bit get pretty Good this It want to about little they some morning. just a of inventory launch built customer down competitor they're we connector on because much. of supply saw maybe they leading feel the so a sounds on or little just it's inventory more I chain. on their and build bit least specific? to the because better go more your Thanks understanding a thinking inventory. sort decision at prior like side, just now

down a to your expect the cautious should So, so? or we course is you that normal? is just this building And over new a terms come year in that of stock? extra of Or own being

think I it is a year next is Listen, Yeah. obviously space, that. wanting we the say big specific first There's adequate sure an seeing supply, sort of make comments availability. getting so launch to heavy semiconductor we impacted speaking, of of growth element supply around to ASUX electronics, also around pass are activity the broadly expect can. over my Joe, we've by it and of in is I'd customers the got in half we electronic to when it, still speak some lack part market

So electronics broadly I to TEL, we some of an don't because were impacts understand the just that referring customers, comments chain, I supply you're this from active (inaudible). but we're not think on speaking, is across the seeing issue

You're passive some on still and semis seeing constraints electronics.

new sure and multiple as making -- as hold very moment. call the to think much we're don't what the an we to be running take basically Could would sure from I down at decision normal higher not in to to hard And originally we bulk was it's unwind, is it's So year. have, at protected levels running of order on the into I years. a the inventory XXXX. for say of quarter make fourth to this planned next sort we're we continuing

possible, depending we on that's improve. see think I things how

think add, really should we clear. If I can I really, be

the it's and we their during not the we're who've overall increases, the specific an standpoint. relates in Sorry, their Joe. normal relates XXXX that capabilities have to from capacity been ability to Joe's to And new to challenged vendors programs point, or supply XXXX. extent to ratchet orders down specific launching It chain

protect doing from we're can customers So our we ourselves and, supply frankly, protect standpoint. what a quite chain to

of the One, previously mentioned. in XX.X% weigh question, sort of if that of Okay. you would mentioned I -- a cost prior the just But in sort of like maybe you that in response about I probing sort most quarter little. XX% period weighed by point to to recoveries seem bps. on this that it were XX talked a understand just you could question third alone I 'XX jumping guess on

continue mean, of a know understand I offset? next recoveries sort starting assumption an I that's really want don't to guess, drag point? the continue that just recoveries guess I maybe sort going XX% or be to on what of is So we that year. I to XX.X% and like like in was to

then billion it that and was recoveries into round and covered we'd roll year. it $X.X and million of Yes, inflation $X.X that's -- the piece billion of was next numbers, price $X.X basically sort that and getting with happening

to to going to be spot key there. significant were of And in if in is So That's is versus the FX be that look end ever hitting the to half Like is think FX were the those not it's we QX. XX.X% track. impact where some rates we're to at if the going I significant QX operationally, sort connected number of a an -- XX% you I at I on again, we XXXX to just first in really or the need caution, said, just do. discussion. of current things levels, there

one. one Okay. Maybe just quick

You River mentioned Wind for 'XX.

I XX made since months think been that you update. announcement, it's any

the at - regulatory process this just continue time. We're we through Yes. in point

stand. we where that's So

Okay, thank you.

Adam Our of next question today go Please Morgan Stanley. ahead. Jonas comes from

everybody. Thanks,

on is question of ADAS. commoditization First

Tier infotainment. pretty become XX CarPlay. dominant system of and this monster auto X path a chip optical that's Tier on a camera out Qualcomm You Apple of looking integrating a to backlog this expanding ADAS speccing system announced have is supplier ADAS X. reportedly into

opinion? this in the is fast your becoming business? mean does ADAS commoditized what how And ASUX for So

Adam, - becoming commoditized. don't as don't that. take it I Listen, view Yes. we I'll

you a to in we with whether from to perception referencing, capability each ability ability to the experience the of the have you do aware It's And that earlier European a hardware. large have this to standpoint the of full across and platform you're domain or across -- alluded have systems, a have in that had those any respect you're important another fusion, X have X you mentioned, Tier to as ability to won them system you that that program have areas. multiple addition integration year. China build the supplier, Tier and sensor one not we program were do awarded you players the controllers We I'm the of the the I perception ability that as

it. So in that we past. as We an as talked important we've as the it area. area view ADAS about our It's will an become important a a sell don't for that And an feature And make commoditized helps be view lot obviously cars. positioned well It's on. of that very we to customers. a money feature they obviously continue in it's feature them

invest space. our position and further in the continue to to We enhance strengthen

Kevin.

models longer, SPS And to do from base I low mean the there's negative against EVs flat margin the you thinking, Just at growth that affordable legacy positive, accessible, or the geopolitics OEMs agree a I'm we EV seeing affordability you many struggling the affordability, we're sell flatten could at architectures that is slower, follow-up can penetration and risk of margin? risk us, inflation EV decelerating that penetration. adoption of to of still least and or get margin pace if curve. EV EVs, in at a that cost work for your but have and out. a a neutral battery more ICE on the argument to growth we're decelerating of remind going still is

it. of a it's question. yes, things great I'd say on Well, X kind

EV you what adoption, to a think risk referenced is potential that I adoption. EV possibility it as slows it a

the a EV provide to the automotive, content finding full we're flatline the cable effectively harness, coming doesn't the the to it architecture management, to wire customers respect player that standpoint, vehicle is within view and solution. cable more overall more and from now the position we're the only that our is as us well. busbar With content provide can connector take electrification Our to of What more adoption. our high-voltage

opportunity in to and We're is capabilities management as for then speak. addition, around as mentioned we a And customer my us in there we see power comments, to products as in we're think customers well we electronics investing relates battery both it be slowing, systems. huge more expect we'd in to if content. regardless And forthcoming. as capture discussions as with awards I So in

alluding look at a content part your in will frankly, feel and to question, When believe to space. we closer we for engine So has a high-voltage battery it vehicle vehicle, move of significant. architecture per of content the last When wallet, combustion quite what Adam, positioned, that's to Internal $XXX fully content battery about well high-growth though differential vehicles, $X,XXX. you vehicle. electric to content as to you're we're electrification, get especially of that to, is our electric expand opportunity area, Aptiv the be share you continued probably typically

content it's the opportunity. So meaningful uptick a in

Kevin. Thank\,

comes Our Evercore. question ahead. of go from next Chris Please McNally

comments range Joe sort maybe appreciate Thanks of unclear. of of rates. on went obviously, upper terms FX, volatility added China as so of schedules. team, in can some a on a quarter drain And your of the much the dive to in the sort and bit bit middle production But more a to the little bias still we around the the some of little end or with spot the I color the

or now X% It I the seems the think was is for that what for people up China one of China X%. maybe the range X%. is comment. some up of baseline QX minus volatility is guess to the obvious I your question outlook questions

better last what it better, So questions obviously some X And than lot -- means more previously the and months growth? the to 'XX/ had around then to you a adding is it's maybe the that what to fair organic is of think

obviously Chris, guide down you're think Yeah, full original right. strengthened. I year was That X%. It's

what of as point us, guide, just then higher sucked was back to that FX. make China That's be trying is achieve, tough I it I'd could would within the but production. to for that guide now, how exactly think we're something X%, right least bias is the related much from upside customers that's relates think I in no, much our again, to it to and relative seeing fair. to -- the at be to of gets say how north I by --

Okay. January be payments but VAT you Super clear. get the the now X, out history is base years. customers you the Joe, and not sort tax right think typically until for we here assuming that like is that China, status, are how 'XX typical ordering won't renewed of is And 'XX the find X do will

on China have in you have happens view rates And see next QX. order the in do once we'll pickup a stimulus we a year? that So into whether could renewed the

there's lot would we're I market. say what think a noise in seeing, of that I

out over There's sort couple but the hearing, that. to certainly concern and takes, about Party think, we the market out of we're coming and coming in heightened pull concern around there and around saw incentives market at is They're renewed how sort hard extent the moment. I think QX, gets obviously, friendly some of puts quarters. it's There that lockdown not that COVID the I some to of Congress. the heads discussions pull of so

at So of I pull you particular I think that to moment, X out it's don't have... of the if know sort hard Chris, Kevin, facet

it... covered you've think I No,

That's this, outgrowth, use -- perfect. to we of just if Is it being? And for one you X% ends if in XX% I'm up base a whatever the sure mentioned should sort the I as the also not could sneak of production XXXX.

yes, Yes, that's fair.

Deutsche a take Bank. go ahead. Emmanuel now Rosner will We from of question Please

you of Thank you expressing much. were understandable. guess caution piece in I XXXX, headwinds, is is FX is of very one the clearly words some that for there which the earlier

The chain supply margins sort which that is result you it make into lower other this said thinking that recapture challenging seems you to the operating more to be Are think incremental volatility of could would than tightness, I usual? leverage. piece

obviously, from you're I sort ability just years, Yes. production. set about our it's not the if us a of there, lower a referring What it's sure I'm to to supply to these ourselves, talked and stop at the was number, customers, regions perspective, smoothness of without Even run and for really chain to first half of up customers not one benefits different we've mean couple big the chain, to of QX in we the but in supply And year-over-year, year, these see from better supply efficiency. related we cautioning just impacted. disruptions, mean, think for in just again, we'll particularly North starts the America, our the some disruptions disruptions, I industry, extent continue make the as an greater our that of to were past of I it be Emmanuel the and were I for right? saw

speaking operating It the perspective. of shutdowns So does and from it's just to leverage restarts. hurt an abruptness

trajectory normalized price like next it obviously, cost like like And be year? need are found down, to about to of that of then into would how stable you curious, interesting sort back Okay. sort this. exiting base continue more to a you year thinking and more I also able the you're cost

trajectory So forward, how additional should of we think be would about cost terms going it and that actions any needed? in additional

Is downs your costs? question price Emmanuel or input around

that costs input mostly like saying not. stabilizing The cost, to if but are wondering you're normal price or back was I question going downs, suggests is around

Yes.

I'll maybe back to answer So take Joe's and a last going shot question. to your

into of continue to have it element to a our us. volatility it we improved higher in you're what which freight That so see outbound hearing from into in to think our cost schedules, to a continue chain volatility the a in see to And All rate our view as relates flexibility as goods, we facilities in management supply transporting relates QX results, an I production. run although continue aren't our load built behind to improving. inflation, us team general is customers. challenges extent, manning current is we and inbound translates that as support that, translates is so obviously certain into

through cost aggressively those our are customers -- increases our customers pushing to and customers. been -- going Now to price that we've our

of Our point the precise of doesn't in are margin that first items relates supportive given XXXX. that the in away. we of other going it and headwinds, We're in early the that your expect time, predictions that can, overall some but would much to -- into XXXX. to customers at part least the as year. the be that. of it's an on volatility we're have in at of We the you what element of that, through as this be just pushing in macro planning it there's And go as continues been Certainly difficult expansion think half to

you Thank color. for Okay. the

We Please Kelley will go ahead. question now from our David take of Jefferies.

thanks Good to within on a $X,XXX to potential And platform? your Maybe leverage how morning. contribution want taking and opportunity bit think you BEV their I hoping earlier? product that talk I And your their content should portfolio opportunity up follow to for their my we was you more referenced Intercable. about expertise about could questions. then

electrification. mentioned their Yes. busbar on my I position, generation in Intercable technology. obviously, strong they're in high-voltage comments, seventh

strong position industry than what a So as to they Aptiv it do. stronger interconnect leader interconnect, position at standpoint. products what as overall technology has. look fit relates clearly, very When with centers. as you well, from solutions nice well -- electrical busbars, currently It's high-voltage have other an the we as a A

market. we to the to So when solution bring at portfolio, certainly you additive product that look that overall can

I the when today. busbar $X over think billion overall little market, look you at it's a

XXXX, by XX% expected about it's a think at compounded I rate. grow to

XXXX, billion. gets So it XXXX, of $X north

of So it, it's revenue the the opportunity. end, vehicle, vehicle and vehicle, call nature low content. of $XXX between significant Content on the to solution high $XXX of close per end, busbar depending nature anywhere the to

we to They given Asia, their in strong in America European meaningful. OEMs, them footprint manufacturing in introduce given customers. expand position think a Europe footprint footprint our in with very certainly strong manufacturing and additional in footprint manufacturing have very it's our China, So North a to Europe, position there's a an opportunity

Joe, I So opportunity significant generate we great view miss anything? it to synergies. as really did a And

I think No, it. covers that

just still feels color. given And Really what a more can talk realizing here. but your to is pending, Wind Okay. about macro helpful XXXX acquisitions approach Got it. River like you shifting broadly, in

wanted Yes, Listen, think inorganically. David, start obviously it's portfolio, organically we grow Joe. continue one. that I'll both I to to the and

for from potentially a as of public side, it takes other of to sort challenging to are up private to usually as businesses. challenging catch value And think the I obviously, M&A got perspective, forecast. you've to valuations the to Obviously, few an market. be valuations quarters macros on for us mindful

Intercable SPS opportunities proceed that and the accelerate around we'll cautiously, the software software-defined very plan still transactions, transactions key around help like that sort of organic portfolio in transactions strengthen bolt-on growth of can mindful strengthened but So then vehicle. SBA areas. interested we're bolt-on the that types the much of And larger

added capabilities valuations, product hit or our As with continue the strategy. we're added we've organic But market, that an execute more but that careful we to M&A, though, building to lines sure strategy always to little M&A bit perspective. our careful that in be addition on obviously would to come that. be in a around we're make plan need to And and very said, from building

Thank you. it. Got

to Murphy America. ahead. We will Please now John move Bank of of go

guys. morning, Good

Just here. two ones quick

it's what and echo the control. understand seems now stability say looking like day-to-day to this up smoothing that you seeing the just the start Kevin. -- the popping that like schedules. of and you're swings purview. signs actually are it's volatility very to honest of almost hearing schedules is not, What what it keep for we sounds you. but we certainly out. now. get that in incremental depressing like going A It's Listen, But difficult it just be mean, and then Yes. week-to-week it's start that's I some are I'll start. the are understand can on - of and It's Kevin kind X seems Clark years better, John, on for I your And I'd it's signs obviously it's the been what getting will because, for outside that's just this, and it and when are does margins. potential week-to-week First, something it it are we're with month-to-month, smaller. not

much a valley, So with seeing respect tighter you're to peak curve. to

level sorts incur of We're with think close it, -- say that there you manufacturing run is higher about element our manning rate. But we semiconductor freight, from certainly better. of we're suppliers. expenses, So sort inbound, very than customers. closely strategic when at with aspect connected our connected continuing think to like very normal you I'd a feel about those outbound of standpoint, when a an you're still is

a talking on and to and are are day-to-day them Our integrating, chain them with manufacturing teams basis. integrating supply

was QX than So QX. are And and able swings, to our chain around we it faster better occurring. have we see still but supply when arms they're react

ultimately guys tightness. just trying not expect production. us. We again, make given And we that the stay to that a during that vehicle terms or want seem wish week doing to over comment It's to a still just in the And but completely there's we're supply were, not. behind you chain through. boomerang close going effect And QX of best to it's our something we're event we're on if to day, seeing of to to. trying improve QX, understand occurs through And It's sort And month, have it's sure but any overall we're something we on. manage you still manage it. it's it

give if I'm year, on Okay. you might about question, $XX.X and the in curious but safety, rolling on, Slide And billion higher $XX high-voltage those this bookings think returns. are on at and at sort color SVA, leading-edge us And can then margins we your just technologies. as some there's you're about technology, come roll just higher maybe a almost those. second faster less those active Obviously, we X that's and X. they as pretty of look of in remarkable faster billion hiding what they're they outside on because

$XX around any almost those three. is of color billion outside that So

mentioned Yes. body They experience, our I like user it sensing. traditional user infotainment Systems, areas connector security and solutions, in solutions. architecture for voltage on traditional management systems low-voltage vehicle Well, yes, traditional like or go our vehicles experience, so cabin solutions. cable and ranges systems.

of that So there's there's number lines -- fill a different whole balance of different the a product a number products, bookings. those of

returns at on Kevin, fair to in near those higher it come say, Is though potentially. the and term that margins

So for? are watch important those to

Yes.

lines. depends in is it line across basically our line I'd all say product traditional product what are most on what I with is. think margin of our the structure

Some those be little a it may higher. are higher bit that volume, of

very Okay. you much, Thank guys.

Delaney comes Our Sachs. ahead. from Goldman final Please go today of question Mark

morning. you Yes, for good my Thank very taking questions. much

how of the FX it's at as what's the we assume you then on XQ, Could sequentially XQ opposed guidance, year outlook. on I is with to think much third end bridge factors? the revenue XQ going to coming revenue implied company down is compared the to maybe quarter? First in even revenue other relative help the And us if high full

at FX you The and to additional bit still Year-over-year, flows question, to X%. China some Chris' volumes Year-over-year, Yes. obviously, here little balancing it potentially as just about and think launch are that. Listen, ebb well, year-over-year there's is a we're looking down sequentially, I activity impact the right? Mark, answer in as think we the in and up QX.

year QX -- year, bit last of If was last QX you it rebounding was had from which a some recall, very depressed.

offset what from the a you've ins bit is comes the little outs, is it with upside FX. the much to China but So and back got how of really and

line sort think if revenue of you're that I looking top at number.

OEM forecast, some you quarter, relative Last of Okay. a company spoke to seen at XX relative their ago, you've you And in Europe. last of Europe on some in magnitude schedule weakness what to with days specifically and elaborate gave OEMs on Europe more in the reductions changed to as the of reductions the Europe the scheduled or little update breadth could all? then bit transpire

think -- of No, sort lot lower other folks Yes. what were we've seen. the good most part, question. we realized we've there. the a Europe, listen, out No, I for than of It's sort I has of helped schedules.

sort necessarily to a I right think lot but Not some come than to in have of those maybe where they come forecasts where we of closer us have started. were, other in.

we're tracking. customer So again, I'd European schedules, say

environment would a I are they we remains be on concerned my say XXXX, when more although mentioned were comments in everything impacted around they going the obviously, in spoke think than from foreseeable a there. in little remains future, QX for Europe. disruptions as potential impact there's bit think shortages, that given Europe no, But August. challenging in just I in I I the economic And won't there's confident energy customers

Thank you.

would to closing for to today's back I session. or additional like call That remarks. Thanks. Kevin Clark concludes now question-and-answer turn the any

Thanks, us operator. for care. Thank time. We the really taking everyone, joining Take appreciate Great. you, today. you

today's participation. conclude you for will your call. Thank That

may disconnect. You now