Aptiv (APTV) 2 May 242024 Q1 Earnings call transcript

Good day, and welcome to the Aptiv Q1 2024 Earnings Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Jane Wu, Vice President of Investor Relations and Corporate Development. Please go ahead.

Thank you, Jess. you Aptiv's thank Earnings Quarter and Call. Conference morning, for First 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

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

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

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

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

you, and Thank joining everyone, us Jane, for morning. this thanks,

Let's begin strong our to headwinds. a to we on Operationally, demonstrating some year, X. execute despite had ability the start Slide

Touching a highlights. on few

almost the our industry-leading New $XX product billion, business continued bookings portfolio. reached reflecting demand for

Europe continued was increased increased under and share by vehicle $X.XX. revenue of slowing year-over-year earnings America production impacted $X and just X%, electric and quarter in growth to First billion, representing labor of adjusted XX% per production inflation North

stock repurchased million of we quarter... the $XXX Lastly, during

have we seem to difficulty. Apologies technical Hello. a had

beginning. the from start I'll okay, it's if So

joining us everyone, again, So morning. this for thanks, and thanks, Jane,

year, our despite to execute some start we to Operationally, Let's begin ability X. on had demonstrating headwinds. the a Slide strong

a few on Starting highlights.

$XX almost demand reflecting reached for our bookings continued industry-leading product portfolio. business the New billion,

$XXX totaled in million, representing representing margin Europe. actions, roughly and income from billion, of and EBITDA XXX revenue basis electrical share And production operating and impacted respectively, more vehicle of slowing and and year-over-year cost $X offset per than which growth vehicle quarter was inflation. points just to $XXX benefits production reflecting earnings North X%, initiatives both America XX% labor by under increased expansion, continued lower XX% $X.XX. adjusted growth million of First productivity increased and

$XXX repurchased the the of efficiencies exceptional million shares total we an million In and solutions of Lastly, bringing team quarters. over structure. at cost the did increasing summary, during to to quarter, last stock the operating repurchased X reducing job time, amount same customers, the while our delivering $XXX our

X. Slide to Turning

our execution, rates. customer and weeks prudent significant encouraged over believe our are we reflect vehicle electric it's the past we exchange impact reductions strong schedule to by weakness of that to quarter the foreign the including first While production, update XXXX continued in negative few current outlook

million, our full revenue we're $XXX high-voltage by result, As XXXX lowering reflecting a revenue growth. a our year principally reduction in guidance for outlook

to While our faster prudent path continue are believe electrification, others, that it than on near-term we so consider to all will move to the reduce expectations. we some revenue full regions

revenue first X,XXX gives launches, acceleration in quarter, including number of flawless program over standard while our of confidence XXXX, in launches our the navigates strengthen structure a cadence headwinds, execution, cost customers almost our high growth. We're our model. program in and XXX we're record of industry business maintaining to current the new continuing the As supporting us our on the which half of reduce the sustainable second

across will additional initiatives 'XX, in operating our executed we kicked overhead initiatives generate reduction to an cost recent vehicle engineering year. we actions that the response salary softness million of balance also cost savings production in incremental all XX% this ASUX to XXXX, of launched in a electric $XX late in through and SPS In both efficiency than additional And We've improve structure. several of our functions, and schedules, we cost lowered proactively more segments. have cost executed that actions targeting the early payroll. And off

a takes $X.X of billion, $XX XX.X% range, under reduction million income. operating operating result puts for income is bottom guidance to in year of in net outlook The full margin growth representing and above our end prior these and the operating XX% our just

needs formal we've Hyundai venture, for to success Group joint later positions into partners. Joe detail venture will pleased addressing Motional go of agreement which more our regarding announce I'm in presentation. that Motional while reached the Motor joint a the ongoing both with the

presents undervalued return opportunity believe to to and Lastly, that stock continue to shareholders. our capital attractive we an is

target we're $XXX such, billion to $X.X XXXX. from As doubling our million repurchase during share

our and summary, to our and position high of of the long-term delivering as strength business shareholders. competitive remain our the ever, we to as value is regarding conviction our In committed value

Moving to Slide X.

and experience safety $XX in sensing the ADAS nearly to full experience driven EV reached system active software Wind bookings and the since the quarter. bookings full including bookings billion XXXX. $XX cumulative segment an bringing billion first our quarter Studio awards and emerging with billion, safety $X.X Gen mentioned, of billion, of Embedded As active first developer of including suite by Advanced in-cabin the player, River totaled and user $X.X X award, safety user

cumulative vehicle totaling bookings segment of including first global bookings hybrids global record Solutions bookings of plug-in a a XXXX. award platform, systems on reflecting the electrical distribution billion electric billion quarter over leading from for bringing an connection electric Power including $XX totaling since high-speed PS the both American North for from to bookings OEM award systems and Japanese and vehicle business and billion $X OEM a battery market record a assemblies a S vehicles for $X.X and electric $XX.X an new cable Signal reached billion, leading

billion. electric to awarded OEMs putting a exceed both China, XXXX. of battery to with architecture With of multinational a achieving low-cost vehicle, awards OEM our in billion on under ability and $X global scale business full Chinese of industry-leading our for In portfolio, a in both our billion track leading were just vehicle remain we business programs, work highly new and during $XX across complex year we our local segments, XXXX including us awards execute our $X from bookings confident local target

to segment's Slide active The is in which review growth, than full first quarter to Wind Turning Safety growth the User safety, in Advanced user in offsetting and experience track quarter. reported highlights. XX% by for X comparables more growth River the Experience X% for segment year revenue our driven XX% challenging on

ongoing global of reuse. levels growth with revenue our productivity Solid improvements, organization, was platform driving the product higher and maturation software of coupled continued including usage

the rotation in of resources adoption which processes. India, in Wind resulting cost to and Studio, driving and located scanning building centers which XX%. engineering software performance in center in ongoing of our engineering best is tech the to of The continued consolidation is over in The percentage workflow roughly Bangalore, River a XX% our countries improvement

lastly, local for we've made flexibility supply sources the supply and And provide demand global continued and of increased costs. Chinese progress local with to Chinese OEMs suppliers semiconductor significantly OEMs at validating increasing meet lower localized from the resiliency chain

local global award in awarded the quarter, a in in radar by Japanese applications commercial American, platforms a markets. costs and development, efficiency of to OEM associated ADAS the intelligent and Pacific vehicle River X Asia Gen Chinese to systems. operations help OEM Wind servicing highlights multiple mentioned we're deployment, for reduce across was a the Studio I North and European terms the the earlier, with addition program major And increase In by edge developer of selected

Moving to Slide X.

models ADAS Gen and full an vehicle award, modular proven wide driver has in and urban our vehicle This X to are which earlier, production. tightly platform ADAS to the automation, Aptiv solutions, highway coupled system with production Aptiv's integrated hands-free selected scalable the will is OEM mentioned sensors, platforms open highway enable ADAS of building system region-specific features, already and I ADAS productized X fully advanced and across with in cloud first a Aptiv's including compute edge of full framework. start electric on emerging Gen platform safety hands-free enable turnkey As XXXX. platform range This

Edge a of a entry-level AI/ML the operate scalability compliance Aptiv's staff very over including award the Gen of Level machine customers value ability full to ADAS program. the is life A offerings which Studio to This platform, and our testament components industry solutions, a develop, enhanced And Wind software extensive cost. while learning of needs, includes flexibility River River solution radar lead River's VxWorks Wind and software containerized validating our system, our our and up and productized X enabled at Wind to such the X with as vehicle ML-based feature performance to from of hardware stack the behavior. customers' deploy key by layers to and deliver competitive across meet

Solutions. Power and Signal to Turning

on highlights quarter first First, Slide X.

developing benefit to solutions combustion portfolio, our vehicles. designing battery global optimized industry-leading engine architecture and internal electric powertrain continue the of across entire experience the range We vehicle to platforms scale from from and

quarter and decline mentioned increased First by that schedule of for electric vehicle high growth X%, earlier. voltage in offset a in partly softening Europe by platforms North revenues the the in driven production revenues, result China, both strong America I

over business totaled New bookings during quarter $XX the billion.

in OEMs to with traction continue gain China. We top

its local received electrical next-gen a with for integrated platform. vehicle X Electronics across top DC-to-DC from award awards During our bookings major OEMs. high-voltage converters than And reached of China EV first quarter, billion, each manufacturer we OEMs including architecture local more the for global the Power $X a

labor As Central with more the modifying our initiated operating and footprint of hours standard consolidation Power including segment increased of labor and our target increase team Solutions the discussed while To of previously, of processes to the impact, a Signal to XX% architecture increased inflation. select XX% mitigate continues to by XXXX. to by rotating several America to automation actions the by XXXX impacted design automation North our Africa and footprint, be manufacturing enable over further vehicle and has manufacturing

the to adapt that Moving emission our our capacity OEM electric solutions deliver and and X, needs high-performance, shifting Slide partners consumer our requirements. customers. to of pace adapt is powertrain cost-effective the and align of spectrum demand to positioned span the Aptiv vehicle with to

of left the on the Starting slide.

approximately content existing opportunity discussed significant many battery and in we're previously, larger electric approximately content platform vehicle. full incremental capabilities XXX from a content In to apply we've architecture increasing much per a electrical to from for X,XXX addressable this market. addressable an benefiting an combustion represents to As cases, for engine internal vehicle

to a upside. sentiment, will opportunity with market our future approach continue penetration outlook the for we global the tailwind continues macro down vehicles the electric electrification. fluctuate said, battery as That industry the that conservative attractive firmly significant meaningful to pace And we've long-term broader represents of remains more the full be hybrids conservative more electrification. a believe rates than may in near-term, while to Although taken market and we path still

the point, of on side were all overall powertrains across to vehicle the platforms, Finally, decline including platforms the regions, rate X which any we that assume vehicle single industry growth electric current portfolio of if was have slide, electrified low-voltage by from vehicles, to substitution with and ICE the X points. on our illustrate XXXX, zero right from significantly no of battery headwind. platforms insulates solutions on strength in business this To we to reduced content would our growth

As a powertrain our across innovative positioned to to we result, value we're that to and our platforms. customers believe uniquely shareholders solutions deliver all

Moving XX. Slide to

Aptiv through leveraged wide Before and O-RAN events. customers customers teams I with the and V-RAN our In our wanted and to to on showcased giving team to walk telco reduce to at Joe new to models. World improve business by deployments and at late Mobile over collaborate call touch while support ability customer a The for scale of I reliability, Congress highlighting financials, partners. recent operations exhibited opportunity being February, and turn solutions Wind XG the costs X unlock range us in the Barcelona, River the performance to

China took new in Among to enhanced of the convergence during solutions, for discuss system XXXX our and support update partnerships to much local our the customers was software-defined Led further hardware and faster to opportunity enabling China trends, unique many the unique to deployment Auto telco our while of technology full of more China the much services efficiently. management demanding experience. of our we market. strategic interest OEMs accelerating by engaged performance Local consumer of we expectations that a years the both levels strengthen week, is to a are are and and team, vehicle, interest Last with cost consumer spanning software, user key requirements and Beijing and wide higher telco range ability customers with ADAS Show. infrastructure the

Aptiv market, is lower perfectly at solutions a higher positioned to cost. in performance this faster all market increased with much flexibility, and to deliver speed

edge-to-cloud capitalize end moves it's is multiple applications. on only with And the to important the we The the support unique all customers same our all engineering the convergence profitable automotive to active not edge. that long-term industries to positions portfolio as growth. the markets, and across to but Aptiv transition intelligence thing: regions software for note and and software-defined also essentially While industries, tool mission-critical hardware, as leveraging have chain proven these right engagements for vehicles, result, software-defined of the on across sustained to a increasingly digital asking right transformation are and By functionality Aptiv solutions positioned for right industry's

With that, turn the I'll now over to Joe. call

where results on XX. the first billion, both electrical which improvement and X% and the impacted $X.X continued and segments year. our the with was over America battery quarter, actions, X% financial Starting the Aptiv by cost in of reflecting across quarter, everyone. in X% down above margin on execution improvement and saw platforms was operating savings revenue of robust morning, our underlying production, respectively. margin Europe, vehicle strong good the Growth particularly the and continued or in quarter. XXX in resulting high-voltage prior in negatively were X%, points North global Kevin, quarter up down slowing X% basis delivered we Thanks, Slide progress Revenues

hybrids and XX%, X% were Revenues high-voltage and respectively. on ICE on platforms solutions up

we continued and million, XXXX for vehicle million $XXX including electric year. production, the Operating weakness weeks, Adjusted outlook margin and revising the respectively. income reductions of operating year, in well recovery operating schedule footprint commodity basis As including in discuss given over driven performance programs customer The few significant shortly, are I downward past $XXX expanded in income as EBITDA our versus to will were XXX as our negligible. cost cost put best our part engineering achievement by and the continued FX year-over-year in reduction points XXXX, prior place of initiatives, locations. and were continued impacts rotation the

by including were totaling $XXX million. share repurchases per and of first $X.XX partially the EPS was were approximately share and the quarter. increased in prior Earnings Capital expense. in million. the $X.XX $XXX repurchases in million, offset XXXX quarter higher flow of in $XXX earnings added XX%, completed from share year-over-year growth to strong, XX% quarter the tax year, Operating XXXX totaled expenditures cash And

at Looking first Slide on quarter XX. revenues

growth revenue by the Revenue noted, active was As of foreign $X.X X%. billion safety partially revenue. growth driven and and growth was partially up commodities high-voltage offset positive strong lower price top by vehicle in Net well components offset to exchange. were as as commercial by engineered line,

production vehicle driven safety engineered growth production revenues in X safety. the region, X% offset with by North in American offset to down active production or double-digit above partially In were by in vehicle and Revenues Moving or components, right. lower lower active market, X% the all X% above outgrew increases were points high in Europe, year-over-year partially regions. up voltage. revenues EV by

with over China, by in local driven revenues key market And grew several points X OEMs. growth

the earnings across China roll-off the and discussed strong ASUX X% launches Moving Revenue as demand continued JV in was all the growth vehicle in regions. X% year-end driven in program or of on America as call. in safety to from the benefiting User slide. segment program volumes lower experience during quarter, X% as production. North was quarter, new was the Active well above primarily up next down legacy our XX% global multinational by the

in Wind decreased River XX% strong year-over-year comparison. to due a quarter the revenue

are River lumpy revenues Wind discussed, have basis. quarterly on we As

year, River. revenue the at mid-teens expect growth we For full Wind

was operating the by the of continued income driven as Segment half initiatives, in well margin quarter performance footprint. taken cost quarter XX.X%. income up of million, as adjusted over our in reductions including was in $XXX significantly prior rotation XXXX Operating second year the ongoing

hybrids, engineered and Turning driven on of first X%, or was of declines the $X.X approximately components revenue quarter billion, X% Power increase growth Revenue which production XX. were XX% above SPS revenues on approximately our XX% And in were in of to high-voltage make growth up revenues. up OEMs, in growth partially local Signal saw by of approximately offset with China growth of BEVs saw by an XX% vehicle as Slide X% in line high-voltage while we product with foreign OEMs. we X%

year a positive. of were million $XXX and points Segment reduced OI the costs. labor on our basis XX operating And Net as over XX.X%, cost the foreign exchange and or savings income year-over-year was impact of commodities minimal. impact adjusted price prior operating initiatives was higher performance up basis, significantly

Slide Moving XX and our outlook. to updated macro

several primarily mentioned, and have legacy -- well are Europe. OEMs lower Kevin platforms, These America over past partially we particularly ICE select as global in as the over by in As America. EV increase years both weeks, the OEMs, in offset seen several past North reductions schedules North production

result, production X% we forecast for estimate from flat. the of a global be prior vehicle As down to a year

now Our revenue of prior for market year over is for X% outlook X%, the versus reflecting of growth our growth outlook X%.

at for year, key the commodity our remainder dollar at of Mexican X.XX. to FX the peso the we and are assuming for MXN copper rates XX As $X.XX, at and now Chinese the RMB

Slide XX has outlook. year our full updated

expectations, substantially As were our line our including with benefit discussed, the actions. savings performance results cost our of in QX operating and

do lower full balance us see revised and The headwinds look we billion, outlook revenues and our year, HX revise conditions. market as several persistent we growth billion, as includes derisk reductions of based at well of the running X%. previously as outlook. caused mentioned from likely adjusted revenue reduction down to on However, year current an to the revenues $XX.X the have The of from that revenue schedule $XX.XX additional resulted our midpoint the prior customer of growth

a to of our million been is X%. now prior of X% or outlook result, revenue As from and X% from XX.X% $X.X billion has $XX X%, first midpoint. growth half half Operating down down from growth the revenues, income lower of second prior over

to I'll We benefit share at negative are offset is reduction as of well as of our increasing in a our the activity the Motional a in more transactions, $X.XX mentioned impact than by which moment. in as the repurchase EPS earnings of the previously midpoint cover more share benefit the estimate detail

our And we reflecting flow, billion have targeting now $X.X for capital. $XXX are primarily repurchases up improved We XXXX, outlook guidance operating our working in of cash million. increased share of prior from

by to revenue, Moving X%, North on well to schedules, growth lower we that changes voltage decrease production commodities, ICE well down in previous the outlook is primarily of from outlook. revenues. as full our The next year our by and America peso net out impact X%, reduction high slide, global the in reflecting the decreasing in revenue as flow-through primarily decrease RMB. impact high-voltage to partially offset XX% from to higher revenues flat offset lay exchange, foreign the price significant increases vehicle to as operating the foreign production and exchange increases of the respect With as in now driven prices more is in income copper a of the negative

also represents expect and foreign XX% mitigating year, over the headwinds, our more at updated exchange peso As stronger an MXN macro of This fully our And to XXXX than has the approximately course the to is exchange we reflect our level line despite actions rate the the volume performance the it guidance peso, have savings we the to many peso first peso our forecasts remained to finally, the which Accordingly, initial cost in of and of have to partially the weaken the with Mexican expect dollar. delivered exposure. XX of hedged the the in expectations. we continue, quarter benefits impact. spot although relates level we and

walk expected the our Turning in to would it revenues half half slide. helpful next versus second to We first thought XXXX. be

the in OEM. the new million. of Approximately The expected that regions. OEMs revenue program to global combustion half largest revenue all America programs additional approximately the represent approximately over are both XX% launches Europe key expected already launch of North our is active platforms increases internal launch half the including coming safety in platforms Second OEMs, segments platforms. a of with increase These increase commenced. and with local with customers and best-selling vehicles launches from of one for of several $XXX Chinese in driven to across increase half-over-half ASUX is volume additional is $XXX have several are by million

$XXX The sales The new large for platform, partially across growth deliver over will increase and XX%, internal in flow-through a peso. due includes combustion SUV the North volume $XXX a OEMs X headwind launches in over approximately and increase additional primarily in and totaling volume of foreign OEMs million in Signal second $XXX and North internal million of launches market $XX truck the Power million. million approximately of America Chinese offset local both American by for combustion launch $XXX of an to FX with half incremental higher in margins million

Moving to slide. next the

are needs Motional Hyundai of while the for we have future of excited success definitive partners. meeting noted, a agreement Kevin with the the joint that announce that reached provides to we venture As

with sale Hyundai occur of will of to by equity Hyundai the Hyundai. our As to and $XXX our funding acquisition we is equity agreement, Aptiv common XX% a regulatory the common will customary will the to acquire preferred of of Motional's will funding stock by The close shares, review interest conversion Hyundai's third Motional to preferred which provide of and quarter held quarter. for Aptiv second subject coincide stockholding. in additional expect the convert the Aptiv approximately will million. XX% of common to part equity Motional million, $XXX

forma in On share will benefit in of includes $X.XX approximately incremental a Our the dilution basis, EPS the of pro Motional guidance additional the of holdings reflecting beginning per beginning approximately year fourth updated the common in XXXX. result lower EPS, year. equity for this lower $X.XX full of quarter Motional

and the was included in our $X.XX detail. I'd and high original call XX% improvement share the balance guidance. In off with measures for the summary, to capital levels driven despite the is are our flow slowdown of benefit quarter like The well that as return growth, expectations sustainable operating quarter, in capital earnings Aptiv's the and increase our and Kevin, confident lower balanced to deployment, earnings we walk are than the updated opportunity through equity continue our the higher handing more Hyundai Motional first track which from as year-over-year Motional, EPS to by of cash vehicle taken transaction, Building year. performance the including record from proceeds to strong shareholders. to first to in resulting combined improve the share transaction Before in reduce with the the XXXX production long of us back growth a of earnings income per the voltage, Aptiv's of the the in holdings repurchases tax provide in offsetting cash in common more of rate, the flow

our When $X XXXX over the our billion years, share of capital increasing outlook capital the returned to in total results combined $X in almost repurchases, past for X shareholders billion returned with XXXX IPO. since to

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

focused enable value customers provide to and the customers to high-performance, Joe. opening the margins industry solutions and headwinds. optimizing shareholders. which deliver on electrified navigates the Overall, the We line We'll our to on cost us to wrap unchanged, enables transition operational the Thanks, vehicle. expand thought Slide while excellence, our our up cost-effective remain while to that our our continue up for delight to remains flexible, XX execution near-term software-defined I'll structure before strategy questions.

first to well well will which the the executed remainder focus execute, on laser We year. position in quarter of are us and the for continuing

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

take we America. from our And first Bank Instructions] question John will of with Murphy [Operator

the then Just wanted ask automation. to second side first customer on on and

a you Japanese I the curious understand, with side, comment you and book and customer sounds in high the of as if because the right radar on OEMs was the stand Japanese first wins just the business they about growing? the very the positive. hybrid I the where like voltage Just side, to can on Kevin, are now, small but with they're real

looking And Chinese kind they of of, Chinese nervous for just OEMs, it mentioned that locally they just to be semiconductors, sense. kind on the people I then maybe Japanese I for they you Aptiv, also you, think, sourced locally just But guess supplied supplier makes supplier which more makes kind curious looking might or of that I'm a everything. as a sort a of local And being U.S. view as potentials? a how and were

of guess we I half John, had your second question. the

respect half, up bit electrification with to, you it a little I broke first was The think, a of mix revenues. bookings or

No.

it mean question more voltage past headway the the making in is I hybrid the the high radar on just you're with the right? you the there part side. potential sounds Japanese, then of have like first than On the the on and

beginning there's to sounds a real grow. like it So there that's opportunity

back question, or the I'll the part come Listen, let me second to question of first. start second the and with the

the to And sources. they to it's it is Chinese of chain. especially Chinese one for local reality OEMs, localize the relates looking OEMs, the local As the their are objectives supply

As this the in serve close China operated you We've market. China been and to know, XX years China for in conversation. we've had have to

that I think possible capability for us fully market. So we as local fact that a given as view it's supplier localized you the have particular that best

with we us Tier make provide to developing to have it, the, to call that chain solutions. on come us X, sure customers Our asking supply focus them Tier X

of imagine, semiconductor some focused space. the can given are on As geopolitics, the they you especially

of over especially area an is in XXXX So down historical crisis X that and just our in capabilities XXXX. our on the given We capabilities doubled semiconductor presence the particular last again, the market some in had our we strength supply enhancing the chain post that and years market.

to I And in previously, the peripheral chips, China SoC solutions to focus. partnering a deliver of area automotive semiconductor dozen semiconductor with down the manufacturers in we're their China. that's think over that' I've of so market to sort an mentioned from

who of in these Alternatively, reduction We're are savings. commercial a interested [indiscernible]. cost have we them we very number focused presenting options, OEMs OEMs of are material to several have actually opportunity on the non-Chinese report we'll out when and and

to relates hybrid especially market. side been on awards, over years, plug-in OEMs Japanese on and we've ADAS it Japanese Japanese Japanese couple as listen, the OEMs, the the of BEV recent well and last Japanese on As as increasingly the the side, focused especially --

So momentum I And the make progress several And the think starting players now we've Nissan. frankly, largest we're of it's the progress made. the with the Honda, net to built result OEM. quite we've with Japanese like of like

So...

or percent as labor to trying as sales? one this far automation follow-up I cost mean savings program, now? understand you're XXXX. to mean on what's the the a is by XX% cost XX% I of we're that just forward? And program starting as by what going what comment. said a just total if mean And that would mitigation just XXXX, to I'm from quick baseline you do going have

really it's all above. It's -- of the

vehicle complexity quite are problem related problem in of vehicle past to to as architecture percent of more labor architecture. it the of to of smart and It a relates solves labor. availability it savings software-defined labor vehicle solves a hours. a it problem frankly, of of So the solves cost as overall Those a

it's off labor XX% a wire number hand hours reduction in on the an So harness, average I of but hours. labor average don't have those

So savings, you can as it significant imagine. a cost would be

right should now think on And that baseline about? we automation

roughly XX%. Baseline right now, at we're running

comes Our next Itay with question from Citi. Michaeli

Just X on end. questions my

the like? pipeline kind second, sticking about on X-point the even Gen of with bit award you're rest just accelerate award, GOM like now range? to the framework. Could of share lower talk on is, this a more could And looks award what X the towards looks wins. Maybe the next year? end long-term additional the now a CPV X- you that catalyze maybe -- of the maybe can it Or bias maybe First, maybe what Is GOM potentially little there that?

Joe answer second. I'll first maybe can answer question, the the

program content from imagine, as the LX solutions. specifics in-cabin our give this from, full sensing and the commercially and a talked both platform ADS ADAS relates per it in LX+ I can has We've about solution sort Gen as suite As somewhat -- competitively. Wind embedded as the well standpoint to past pricing sensitive addition and of to want vehicle X of in don't award, studio because particular our River to you

XX% So with as about, given being talked from our you about solution, think AI/ML about that, to standpoint we're you platform. savings it sensor overall can given to to in our our what depending radar GenX an guess of range fusion. configuration anywhere in approach that our doing the talked past, should we've traditional ADAS the XX% between overall I the upon think that customers, roughly platform deliver we've

So a solution. competitive very it's

prepared would over X% yes, the think month. to range just past up point. based dynamics think we've -- I X% at with But growth the really, that XXXX, too the we certainly on to I over the X% some of above today. since it's range. Joe this that of that the market, it's go on rack Itay, up how within with customer And remarks, in XXXX over wouldn't Obviously, closer we're past seen I schedules particularly early see to

question with UBS. next Joe Our comes from Spak

maybe about? should think should the the in how strong, start, about quarter, think AS really margins going versus And large in quarter Joe, of the margins UX expectations. we the and surprise just Street business on balance year? Anything there I in the that a think, over to specifically we

those of of side nothing as hard then I period out business. supplier in one-off long a cost working things the out say of sort would and perspective, with both you know, taking nothing the Joe, a material. we've of Yes, say would certainly been on margins a time, the stands very for from quarter I

put We cost rotation engineering we been in last actions have place some time. that going year. This on for period of a has

this I it's XX.X% is -- But out sort of think a little high you'll call be that's margin come lumpy. to business the certainly talking little mid-XX%. So that seeing maintained us the where and XX%, year, the lower to it, should -- It's call QX obviously we're for XX% year. think at starting I in in times. the see a being full going of about business it, to you're for

new there's the conversation obviously, back want lot And China here a I couple go because, Okay. to of of just things players. volatility. of a Kevin, and to lot There's a

like and Huawei. Xiaomi You emerging players see

sort does in question And chain. how emerging could desire but guess, you forward architecture. China maybe is the a in players? on John's of about us of new with a your give also sense positioning even for to about vehicles you of What for news I the competitiveness, saw one prospects China, your Chinese supply So of think some electrical we the going that back and all VW Xpeng mean

you joint OEMs. Listen, the as time a market Chinese the rotated by know, said, and ventures Yes. the period for clearly, a much -- only multinational has in market from to localized Chinese been we've stronger I long as China dominance local of

talked locals. of Over the the significantly our past the from our and the to rotation bookings we've X bookings X rotating about mix the of or years, multinationals

this the couple of think is multinational of bit I the We're behind it's OEMs. bookings portion year, last that over bookings little matched, and dollar Chinese year the years the standpoint, between is and now -- locals. from last with revenue local over the or of JVs. lawfully a but locals with bookings the our we'll significant our a value XX% mix Chinese well be Chinese change still our so, A that

XX over standpoint. where months an close continue gap next to a we from XX think to that's revenue we'll So area the that

Europe who requirements those with would working to There and looking North to we of the little are to are meet say entertaining are markets, the of of who OEMs supply and possibly virtually in from all solutions America. different and North are Chinese what's be as bit for Europe leading U.S. are which America those that manufacturing the who the focused as European I a very now on tend the market. that China several export well local in

positioned or to export feel decide positioned either well well as for well both like China, in as Joe. very they we China as growth So we're move production of outside

what Maybe the But a I Okay. just what percent overall China we if bookings, China? now mentioned of within sort about that XX-XX. that is think follow-up. like mix know your is about like domestic moving, it of one have just of sounds like quick sense? you over Do it's and you business

or exact the -- well close over Yes. In local multinational versus the bookings XX%. China, JVs. running Last to up probably number we're XX% year, were over we

been a direction. X in it's So And that certainly it should years. to year I moving guess

Chinese or the is billion $XX of $XX like Sorry, players? is that much of like how China local whatever, billion,

billion. of $X XX% Take

So...

go Evercore. next McNally to Chris We'll with

Two one pretty simple. questions,

of like [ Joe, Just you of pace the margin imply the you end XX%. to mentioned new where probably XX.X%. is of XX% Does we SPS ] of for have at on That's lower AS something more think that sort more probably exposure.

second. X Chris. Yes,

Let me the, XX.X% the right you in to would sure number. I for of I say make you're year. out the QX, SPS coming give XX.X% call it, in yes, XX%

X% then And growth the the over that SPS X%. because on single same, Is to at high X% high X%? probably ASUX or growth What's market voltage now over closer the the market... and split, split digit of to

digits on SPS, I'd yes. say low mid-single to

buyback of in billion your a But sort multiple. flow Perfect. something the cash a for been year a large that bigger $X.X I sort of about this words to of lot this anywhere acquisitive next think the years, second from acquisitions. basis? the buyback next this for stock years, like of Traditionally, question. $X.X Obviously, capital or opportunistic. more use couple And obviously, free low at generation priority multiyear you've billion when very allocation, the When bolt-on stays $X I is the billion new at a year, could or level over this be of couple look then the question

higher that's until basis, curious a for more buyback just I'm So if multiyear stock rerates. the something least level at sustainable this could be

revenues at what fair capabilities assume to buy we'd as think price fairly as healthy current it's about, in Obviously, important and build do levels, and to further I the around quite the we well. to of software in and we've to talked we're at stock stack The levels. industrial like continue our appreciation frankly, is markets part view trying back stock is to diversify Chris, our our reality we out stock undervalued. Yes, is see

fair So that activity amount of we would XXXX, like happens during and there's acquisition XXXX to beyond. assume that a

to We'll Shreyas Wolfe Research. move Patil with next

is about growth just today. the underlying thinking Maybe the for where business rate

you over So also of were like for it price that in I a to mix about in sounds recoveries, are maybe it mitigating X tailwinds last you're market for provided takes, of semiconductor I points China, tied quarter, from inflation year. lot new year. that you're But points puts this to with last and X bridge are headwinds there had implied pointing growth example, there think but of where know the launches.

of trying just growth get to a as of see So underlying today you it. sense the is where rate

rate. to in get Yes, comment. that adjusted sure. listen, long-term right? the comment market market, is our I'm I consistent not flat the or recovery is growth the over with a growth view, X% But pricing the generally sure So X% framework I think

voltage a prepared in growth. internal down. We're as move seeing combustion come the we're we I We've vehicle schedules seen at talked come Obviously, my working high hybrid headwind bit up. seeing But with remarks, back volumes the production. obviously about moment. through those We're the good

from from capable talked we about, a lack perspective, all There's servicing and that no or fully of sort really perspective. Kevin that product capability So -- of powertrains. portfolio line

I year, you're thinking actions are tied talking this Okay. the you're more to like the in SPS? about? automation then guess Or performance is about that savings initiatives the from of those incremental that expecting footprint

business longer and right, of really year, be bit. end half -- at term, -- started has changed We've last second the again, of talked will about. last a focus the year, to Automation as Kevin on

looked that. structure. So if We a had shouldn't always out do it at the salaried folks. cost reduction, surprise overhead We've We've some overhead. took

cost XX on about track, are our the the about you're what And past vigilant as well Day mean, as over other I benefits of things managing We've is structure. that of lot now pretty right? that Investor Investor revenues been at least But at really, a appreciate talked we Day. at high-voltage years come off. seeing what we I talked of the

million of boxes the getting 'XX. We about year talked seeing of dollars 'XX, you'll And rotation. We that's as those, as on about, engineering and performance about a and bucket a down every few talked that improvement. margin that between with engineering you're are talked 'XX We initiatives recall, performance ticking that sales. we hundred percent where

one then quick Okay. is on just last just a FX. maybe And

You opposite in when year, see in it strengthening of was quarter, the of of QX. going didn't the rest but saw we it effect mean the last the an the to for impact headwind's I impacting the where largely much year. kind you be looks like was peso

trying get peso Just trying that. think about much is RMB? of sense of maybe So a just to impact versus FX how that to

in distinguish significant. guide, there. I The the you is of XX in the to Listen, unfortunately, QX between The the in and and peso between think got more where is -- consistent RMB's year last it the QX the peso, was low pretty actuals year-over-year XXs. right? with actual

prior to significant there's on year So a basis, comparing that's actuals. impact not actuals year-over-year why a

said remarks, our abating, not I is expect to that's in we XX.XX, guide strengthen I think as and put peso over had guide view, that we we macro cost what The at into It prepared MXN is obviously happening. offset And as effectively And to time. once the it's clear, we most with we've it it. done. do we headwinds, out take not my they're

a below have put said, a in exposure place is pegged why MXN of I benefit XX rate. peso MXN as XX% which where to is we also, we XX, the our We of hedge protected

We'll Delaney with Goldman go next to Mark Sachs.

view for You to high-voltage XX%. for revenue your X% 'XX took from

does year, BEVs revenue at does in you XX% still as high longer-term the voltage have all a about think between this outlook? high-voltage Beyond PHEVs to CAGR composition achievable? And and think changed the

and vehicles. forward our electric are our pushing battery customers, with of with the customers with customers start introduction our I'll still Yes, knowledge

So still you standing direction. they're their public hear pushing in that certainly behind statements and can from them that

incremental well to as programs hybrid about talking or launching product hybrid In that, addition their portfolio. overall to augment plug-in they're

So likely near-term.

view richer we've plug-in what you'll general see had a Our historically. of mix to is relative hybrid

to go-forward been we'll of growth. revenue it's as a it electrification, quarters a growth of overall Obviously, basis, an relates rate from challenging our couple see. On high-voltage

back stabilized. have I mentioned, of seem end and saw Joe April, significant to have we over a in and schedules. As reduction in They the quarter

get think to middle to we'll of the you're give closer electric be relative fair going to that mix. looks it's think mix vehicle But more to year, battery we growth I But see assume plug-in to we rate what as visibility as able more the like. maybe hybrid

Second question I had was margins. on

specifically, think, your on best the had the EBIT strength a talk contributed? actions I little you XQ since in how margin to XXXX. may Can led margin, of And You bit more quarter? first the what have much footprint

year, point with seasonal year may And XQ normal low the seasonality Is but margin from XXXX? EBIT can or XQ is it typical more compare for about to the you the typically, talk how XQ something unusual of a is? more in

went and you through Listen, XXXX, challenges. XXXX, we start. through XXXX, to go back I'll I COVID semiconductor went Maybe think we then Yes.

were extremely there operational from X that years had we and choppy an So standpoint. margin standpoint overall

macro We products of an full. stabilized is supply least environment chain feel availability the keep to from largely the at like

operate suppliers. So effectively are to and are as our much we're our efficiently as able more customers,

us to gives So ability it greater plan.

as well engineering structure year spend our mentioned of really we initiatives hyper-focused connected. on or to a reduce did Joe as focused focused reducing our operational initiatives overhead. cost always our our reduce his do on And walls through that we've overall on as keeping XXXX, well four As really, significantly stabilize, how customers comments, costs, within the prepared in but we our continuing so we're really as factory things plants been since when in

out. we year than organization from delayering, something the by that's back than half mentioned, last XX% operate see where see consolidating, margin We'll the is business a we'll Typically, over have back salary you the think year to making half more payroll to this efficiently, do. plays more half expansion I -- half to does. by production first reduced I half tends by payroll So continue this how because first first

what improvements, last really operating to on as structure. of now across right but aspects cost over clarity continued improvement all we'd seen less based little see a we month, our expect sit performance we've here There's the including continued

everything. really It's everything. it's So

to next Dan Barclays. go We'll Levy with

just up couple on the or in solid you safety. if Any address it results XX% on voice over points quarter, think of I could active was the Wondering a so?

And ADAS expectation launches growth then you XX% content is the year? the still for in see seeing growth intact? to still plus Are

Yes. Yes.

So across significant for It's broader as There well safety both looking consumer active OEMs. are as that Joe clearly customers increasing across new be our as continues to something launching models mentioned, for. programs -- we're set solutions. we're demand programs of launching within existing a launching

be growth. to an So that area believe revenue we see we'll it strong continues

XX% the it's we're -- bit Dan, We'll Joe. little over for a be plus year. forecasting XX%

go into a It have very and like said the launch my way just -- launches show we half every as some as run won't is -- quarter, then but straight things back old go activity, historically in the in business we run. a we'll I to So of the the heavy prepared back up remarks perfectly year ebb bit.

is see business that that continuing. no, we But strong, and

mentioned, Kevin As of billion $X this quarter bookings active safety. had close to we on in alone

continue safety. strong see on active very to traction So we

talked that coming provide incremental year. and Great. some in And you versus just then dynamics. coming comments as Inflation, inflation as a into the cost you Is planned? wondering on this the to some inflation if structure price follow-up, could

your offset for outlook of Is any back And we much there year? sort that then to in the typical price what's X% discussion? how you're X.X%, pricing in did down? you get pricing Are And commercial getting the XQ?

much from Dan, around But we're the obviously inflation. I dynamics labor Yes. material very would around labor with customers inflation. direct discussions inflation issues, say in move to

that's of recovery. Some

is to expensive, that that, going mentioned, Kevin's be as Mexico of Kevin point reducing and places those too leaving automation. to are becoming Some on places in like labor

of like take pull I we about, of on cost slowdown discussion with those sort started passed customers, and you labor -- there's say actions it's in we that and around of it, and of deal And material talked number to would an costs more seen significant inflation we've through a to those. be those levers things have with couple that be I think we've needed to to see. So there'll a direct

for that all to material the right return net a inflation. we'll this said we've and long-term, price around X.X% think while, before was I

level have the the of get countries serviced plants. I'd to outlook. that will customer at And or in want other long-term. labor something the out don't with continue expect inflation I We that extent cases, But to increases. will in have customers both we the relocate facilities think other is move deal to we'll

the Got I it. price one the what within was quarter, Because And just then was commodities said pricing? bucket.

Price commodities, it in million line. there -- inflation well positive was copper the as got because you was the about $XX revenue on

We'll go next with our question Stanley. Adam from Jonas Morgan

active and Joe, vehicle I mean electrical Kevin better you. safety, So and combined, knows nobody. nobody than architecture

So system experience and of vehicle Level a system? vehicle opinion, see and an versus user advantage systems an perspective, your capability software-defined nonsoftware-defined curious, attached of the to fitted a I'd a do same from be X+ you from capability experience combustion in the to internal electric

vehicle BEV architecture architecture the versus -- a would be an an better that's Yes, an ultimately this and not internal interesting I'm experience around electric question. combustion if with sure vehicle consumer on engine.

think architecture, hardware would ultimately architecture. an what would optimized and and say an from for we enable be and both optimized vehicle as is much I BEV from ADAS ultimately allow more standpoint a would would well standpoint, right, architecture more the software savings architecture system architecture

So I cost would it like it would maybe is to translate would relates more the make things way flexibility easier provide enhancements, into that, more as upgrades, easier. it effective. And it

but perfectly step the timing can't down of there's it of we vehicle electrification, towards smart So element towards our software-defined that's a there's of kind performance the And one there. and of predict towards vehicle. believe of momentum all as comes to back, take we we significant the gravity an still all aspects views architecture, future, cost, and a a

robotics that -- I'm a as be to based visual models much language people as the and flywheel in seems the and of rules of with last also large the good of couple systems are ago And the robotics old a to to kind describing as community and revolution without of models really years into Kevin. just to autonomous AI. faster learn follow-up, better that, now help attach years appreciate with GenAI models rolled in the I X and days learning multimodal there

about. the in think in I'm if what exactly that have I'm that deployed? talking robots on and here, capital you I you if, factor, speaking is sorry something you how is be a, I'd be that agree and you role I'm curious your been AI's some which changing car decisions make might changes in there of but know platitudes form a enable, profound how

a It's that's number a I any Yes. and agree a And -- is approach complex question that changing. right, like perception AI/ML a actually Listen, develop changed things. right, a great it the question. you're changed we how number products great radar of example, solutions. that we solutions, of is it's

that. we've So platform And to benefiting that tools this about I move benefits from much the lower a talked ADAS we're argument like X big that's make think one it's to cost. the about. at allows advancement pretty today seeing that AI/ML of the much and that a And easy faster we're utilization of Gen

of this reduce reduce allows cost compute down us AI/ML the perception cost. actually which us Use allows platform the the particular on and of drive to to system,

the items so we're using that -- of AI/ML. one think I

we that automotive of a in introduce things think relative to and One one safety more AI/ML necessary debate I or of the guess traceability not, the concept like of the and bit that industry, the that items of complexity lack makes calculus whether unique can complex. that and to terms but is it's traceability, could somewhat

with determine integrated things fail. down things operate, can things our today how systems and they fail to sit how want we or why when about And know or talk that they customers are how

a the at full it But changes between rules AI that an in traditional be balance if see based. we'll now future. AI/ML time of some -- element needs based to Now generative point in a and the

take And with Narayan we final question from RBC. will our Tom

ICE. seems powertrains, quick. SPS, hybrid be growing plug-in a more be is maybe talked more plug-in growth. is of U.S. to try hybrid, about say, let's to more hybrid. ICE, real I'll you the hybrid, China X Europe On lot

curious, dynamics retooling try and to Just kind just guys of impact involved there these to it different Or of kind as easy change that these powertrains? business? just does straightforward? to really is S your PS change, it pivot? how Is Is

different It's line. product a

So it's pure BEV product.

well it's for low harness, or as a to set a A with equipment connector whether tools. or specific bus as facilities lot bar existing So a battery electric voltage had to high-voltage specific it both vehicle that those solutions. have products we produce for a it's are tends within a of of

there. to some pivot ability So there's

hybrid, you hybrid When a portfolio or plug-in also think between that on goes hybrid BEV and vehicle. there's plug-in overlap a product go hybrid would some on vehicle that that

there's be some and one specific to needs but shift So to the it's from situation to not oftentimes, significant done, depends work on it that the other. real

Yes, up like something. pop CapEx or in Tom, it's see something you'd not outsized, that

could think within managed business existing I the financial be it and framework.

Yes.

come I'm production up, do just global We seeing overall some you're efforts levels. mean some general impact to I which who there's just if legacy to on big week, any just big all that's this all going The saying saw pretty inventory would big curious reported they're past other thing dealer cuts powertrains? downside production, OEMs quarter. overall hearing results they're the But their reduce HXs. in or commenting high-level to like their

production that's as There down. Yes, increase related, outlook and in that engines, internal I talked net-net, production have products but our OEMs that we that Joe production seen is combustion some point. is schedules an brought we've is BEV of -- for are piece biggest vehicle a down BEV The have that for about.

Yes.

driving down a a prepared are coming As that But would legacy some in comments, both April of schedules I -- come schedules platforms popped line. Tom, X I down past with what takedown in we is EV-only ICE global the saw that's global There really month OEMs and my say the weeks top and OEMs, that's up. few X or exceptions. the what said was in

turn for That Kevin I'd comments. Q&A conference session. like conclude to the any Clark will the back additional or to closing

Take a problem apologize day. I everyone, Thank time our you, the for the and start. technical listen care to call. earnings at the to have good for today taking

Ladies today's We call. conclude thank that for you participation. and gentlemen, will your you. Thank

at You time. may this disconnect