Core Insights - Aptiv PLC (APTV) reported better-than-expected second-quarter 2025 results with adjusted earnings of $2.12 per share, beating the Zacks Consensus Estimate by 18.4% and increasing 34.2% year over year. Revenues reached $5.21 billion, surpassing the Zacks Consensus Estimate by 3.5% and rising 3.1% year over year [1][9]. Revenue Performance - Adjusted revenues improved 2% year over year, with a 1% decline in Europe, while North America and South America both grew by 3%. Asia saw a 4% increase, despite a 1% decline in China [2]. - The Electrical Distribution Systems and Engineered Components Group reported revenues of $2.21 billion and $1.72 billion, rising 7% and 6% year over year, respectively. However, the Advanced Safety and User Experience segment's revenues declined by 3% to $1.5 billion [3]. Operating Income and Cash Flow - Adjusted operating income was $628 million, up 3.6% from the previous year, with an adjusted operating income margin of 9.3%, an increase of 60 basis points year over year [3]. - The company generated $510 million in cash from operating activities in the quarter, totaling $783 million for the first half of 2025, compared to $887 million in the prior-year period [4]. Future Outlook - For Q3 2025, Aptiv expects revenues between $4.95 billion and $5.10 billion, exceeding the current Zacks Consensus Estimate of $4.91 billion. Adjusted EPS is anticipated to be between $1.6 and $1.8, slightly lower than the current estimate of $1.81 [5]. - For the full year 2025, Aptiv projects revenues between $20 billion and $20.3 billion, above the current Zacks Consensus Estimate of $19.70 billion. Adjusted EPS is expected to range from $7.3 to $7.6 per share, compared to the current estimate of $7.23 [6].

Core Insights - Aptiv PLC reported revenue of $5.21 billion for the quarter ended June 2025, reflecting a year-over-year increase of 3.1% and a surprise of +3.51% over the Zacks Consensus Estimate of $5.03 billion [1] - The earnings per share (EPS) for the quarter was $2.12, compared to $1.58 in the same quarter last year, resulting in an EPS surprise of +18.44% against the consensus estimate of $1.79 [1] Financial Performance Metrics - Net Sales- Eliminations and Other reported at $-228 million, significantly worse than the estimated $-145.91 million, marking a year-over-year change of +1420% [4] - Net Sales- Advanced Safety and User Experience was $1.51 billion, slightly below the average estimate of $1.59 billion, representing a -3% change year over year [4] - Adjusted Operating Income for Advanced Safety and User Experience was $178 million, exceeding the average estimate of $169.47 million [4] Stock Performance - Shares of Aptiv have returned -7.6% over the past month, contrasting with the Zacks S&P 500 composite's +2.7% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

Financial Data and Key Metrics Changes - The company reported record second quarter revenue of $5.2 billion, reflecting a 2% year-over-year growth on an adjusted basis [18] - Operating income totaled $628 million, with a 34% increase in earnings per share to $2.12, driven by higher operating income and share repurchases [9][19] - Operating cash flow was $510 million, contributing to a strong balance sheet with over $1.4 billion in cash [24] Business Line Data and Key Metrics Changes - Advanced Safety and User Experience (ASUX) segment revenues declined by 3% to approximately $1.5 billion, impacted by legacy program roll-offs and production slowdowns in China [20][22] - Engineered Components Group (ECG) revenues increased by 5% to $1.7 billion, driven by growth in Europe and local Chinese OEMs [22] - Electrical Distribution Systems (EDS) segment revenues also grew by 5% to $2.2 billion, with strong volume growth in North America and Asia Pacific [24] Market Data and Key Metrics Changes - In North America, revenue grew by 3% despite a year-over-year decline in vehicle production, driven by active safety and electrified programs [20] - European revenue decreased by 1%, slightly better than vehicle production trends, while revenue in China also declined by 1% due to unfavorable customer mix [20] Company Strategy and Development Direction - The company is focused on maximizing shareholder value through the spin-off of Electrical Distribution Systems, which is on track for completion [8] - The strategic emphasis is on electrification, automation, and digitalization trends across multiple industries, with a resilient business model that allows for efficient operations [6][8] Management's Comments on Operating Environment and Future Outlook - Management expressed caution regarding potential consumer demand weakening in the second half of the year due to evolving trade and regulatory policies [16][29] - The company remains confident in its ability to navigate the dynamic environment and deliver strong financial results [30] Other Important Information - The company received the Volkswagen Group Award for Resilient Supply Chains, highlighting its effective supply chain management [7] - New business bookings totaled $5.4 billion, positioning the company for strong future growth [10] Q&A Session Summary Question: Visibility for Q4 production - Management indicated that they have a fairly firm visibility on schedules through the end of the year, with no significant changes observed recently [36] Question: Content opportunities from shifting vehicle mix - Management noted that they have already seen a shift towards larger vehicles, which has helped offset the slowdown in EV adoption [40] Question: Bookings target visibility - Management expressed high confidence in achieving the $31 billion bookings target, despite some delays in finalizing awards due to the current environment [44] Question: Growth in non-automotive sectors - Management reported strong growth in industrial sectors, expecting solid double-digit growth in the back half of the year [48] Question: Implied growth assumptions for the second half - Management highlighted that growth in the second half is expected to be driven by the ASUX and EDS segments, with multiple program launches contributing to this growth [55] Question: Clarification on pull forward of demand - Management clarified that the pull forward of demand relates to both customer schedules and actual vehicle production [64] Question: Margin expectations for ECG - Management indicated that ECG margins are expected to recover in the second half of the year, despite facing headwinds from FX and commodity prices [82] Question: Impact of copper tariffs - Management stated that the impact of copper tariffs is manageable and that they have been in discussions with customers regarding potential cost pass-throughs [104]

Financial Data and Key Metrics Changes - The company reported record second quarter revenue of $5.2 billion, reflecting a 2% year-over-year growth [18] - Operating income totaled $628 million, with a record earnings per share of $2.12, marking a 34% increase [7][19] - Operating cash flow was $510 million, contributing to a strong balance sheet and capital allocation flexibility [7][24] Business Line Data and Key Metrics Changes - Advanced Safety and User Experience (ASUX) segment revenues declined by 3%, impacted by the roll-off of legacy programs and production slowdowns in China [9][20] - Engineered Components Group (ECG) revenues increased by 5%, driven by growth in Europe and local Chinese OEMs [22] - Electrical Distribution Systems (EDS) segment revenues also grew by 5%, supported by strong volume growth in North America and Asia Pacific [27] Market Data and Key Metrics Changes - In North America, revenue grew by 3% despite a year-on-year decline in vehicle production, driven by active safety and electrified programs [20] - European revenues decreased by 1%, slightly better than vehicle production trends, while revenues in China also declined by 1% due to unfavorable customer mix [20] Company Strategy and Development Direction - The company is focused on maximizing shareholder value, with plans for the spin-off of Electrical Distribution Systems on track [6] - The strategic emphasis is on electrification, automation, and digitalization trends across multiple industries, enhancing competitive positioning [5] - The company aims to optimize operational efficiency and cost structure to remain agile in a dynamic market environment [5] Management's Comments on Operating Environment and Future Outlook - Management expressed caution regarding potential consumer demand weakening in the second half of the year due to evolving trade and regulatory policies [17] - The company remains confident in its ability to navigate the dynamic environment and deliver strong financial results [32] - Future guidance reflects a conservative outlook, anticipating a 3% decline in global vehicle production for the full year 2025 [25] Other Important Information - The company received the Volkswagen Group Award for Resilient Supply Chains, highlighting its effective supply chain management [6] - New business bookings totaled $5.4 billion, positioning the company for strong future growth [8] Q&A Session Summary Question: Visibility for Q4 production - Management indicated that they have reasonable visibility into production schedules, with a conservative outlook for the second half of the year due to market dynamics [35][36] Question: Content opportunities from shifting vehicle mix - Management noted that they have already seen a shift towards larger vehicles, which has provided content opportunities despite a slowdown in EV adoption [38] Question: Bookings target visibility - Management expressed confidence in achieving the $31 billion bookings target, despite a challenging macro backdrop [41][42] Question: Growth in non-automotive sectors - Management reported strong growth in industrial, aerospace, and defense sectors, with expectations for solid double-digit growth in the back half of the year [45][46] Question: Assumptions for second half growth - Management highlighted that growth in the second half will be driven by ongoing ADAS program launches and strong performance in the EDS business [52][53] Question: Capital allocation post-EDS spin - Management clarified that they will focus on M&A opportunities in engineered components and ASUX sectors while maintaining manageable leverage [56][57]

Group 1 - APTIV PLC reported quarterly earnings of $2.12 per share, exceeding the Zacks Consensus Estimate of $1.79 per share, and up from $1.58 per share a year ago, representing an earnings surprise of +18.44% [1] - The company achieved revenues of $5.21 billion for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 3.51%, compared to revenues of $5.05 billion in the same quarter last year [2] - APTIV HLDS LTD has outperformed the S&P 500, with shares increasing about 10.3% since the beginning of the year, compared to the S&P 500's gain of 8.2% [3] Group 2 - The current consensus EPS estimate for the upcoming quarter is $1.81 on revenues of $4.91 billion, and for the current fiscal year, it is $7.23 on revenues of $19.7 billion [7] - The Zacks Industry Rank for Automotive - Original Equipment is in the top 33% of over 250 Zacks industries, indicating a favorable outlook for the industry [8]

Financial Performance - Revenue reached $5.2 billion, with an adjusted growth of 2% year-over-year, driven by strong volumes in North America and Asia-Pacific[4] - Operating income increased by 4% year-over-year to $628 million, attributed to volume flow and operating performance offsetting foreign exchange and commodities headwinds[4] - Adjusted EPS rose by 34% year-over-year to $2.12, due to higher operating income and proactive capital allocation actions[4] - Operating cash flow amounted to $510 million, bolstering the balance sheet and providing flexibility for capital allocation[4] New Business and Market Trends - The company secured $5.4 billion in new business awards, leveraging trends in electrification, automation, and digitalization[3] - Bookings showed quarter-over-quarter growth despite heightened macro uncertainty, with awards across a diversified mix of customers and end markets[12] - 85% of year-to-date China bookings are with local Original Equipment Manufacturers (OEMs)[12] Segment Performance - Electrical Distribution Systems (EDS) revenue grew by 5% adjusted, with strong volume growth in North America and Asia-Pacific[30, 31] - Engineered Components Group (ECG) revenue increased by 5% adjusted, driven by growth in Asia-Pacific and Europe[30] - Advanced Safety & User Experience (AS&UX) revenue decreased by 3% adjusted, due to the roll-off of legacy UX platforms and lower volumes with local China OEMs[30] Full Year 2025 Outlook - The company anticipates full year 2025 adjusted revenue growth of 2%[37] - Full year 2025 operating cash flow is expected to be approximately $2 billion[37]

[Financial Performance Summary](index=1&type=section&id=Financial%20Performance%20Summary) [Second Quarter 2025 Highlights](index=1&type=section&id=Second%20Quarter%202025%20Highlights) The company achieved record Q2 2025 revenue, adjusted operating earnings, and adjusted earnings per share Q2 2025 Financial Highlights | Metric | Value | Notes | | :--- | :--- | :--- | | U.S. GAAP Revenue | $5.2 billion | 3% increase YoY | | Adjusted Revenue Growth | 2% | Adjusted for currency and commodities | | U.S. GAAP Net Income | $393 million | Margin of 7.5% | | U.S. GAAP Diluted EPS | $1.80 | - | | Adjusted Diluted EPS | $2.12 | - | | Adjusted Operating Income | $628 million | Margin of 12.1% | | Adjusted EBITDA | $821 million | Margin of 15.8% | | Cash from Operations | $510 million | - | [Year-to-Date 2025 Highlights](index=1&type=section&id=Year-to-Date%202025%20Highlights) Year-to-date revenue grew 1% to $10.0 billion, with adjusted EPS reaching $3.80 and strong cash from operations Year-to-Date 2025 Financial Highlights | Metric | Value | Notes | | :--- | :--- | :--- | | U.S. GAAP Revenue | $10.0 billion | 1% increase YoY | | Adjusted Revenue Growth | 1% | Adjusted for currency and commodities | | U.S. GAAP Net Income | $382 million | Margin of 3.8% | | U.S. GAAP Diluted EPS | $1.70 | - | | Adjusted Diluted EPS | $3.80 | - | | Adjusted Operating Income | $1,200 million | Margin of 12.0% | | Adjusted EBITDA | $1,579 million | Margin of 15.7% | | Cash from Operations | $783 million | - | [CEO Commentary](index=1&type=section&id=CEO%20Commentary) The CEO attributed record Q2 results to a resilient business model and expressed confidence in long-term growth - The CEO highlighted the company's **resilient business model and operational execution** as key drivers for the record financial results[6](index=6&type=chunk) - Continued customer demand for solutions in **electrification, automation, and digitalization** is expected to fuel long-term growth[6](index=6&type=chunk) [Detailed Financial Results](index=2&type=section&id=Detailed%20Financial%20Results) [Second Quarter 2025 Results](index=2&type=section&id=Second%20Quarter%202025%20Results) Q2 2025 revenue grew 3% to $5.2 billion, driven by Asia and North America, with an improved adjusted operating income margin of 12.1% - Revenue growth was geographically diverse, with a **4% increase in Asia** and **3% in North America**, partially offset by a 1% decline in Europe[6](index=6&type=chunk) - **Interest expense rose to $91 million** from $64 million YoY, mainly due to debt transactions to finance the share repurchase program[9](index=9&type=chunk) Q2 2025 vs Q2 2024 Performance | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | U.S. GAAP Revenue | $5.2B | $5.05B | | U.S. GAAP Net Income | $393M | $938M | | Adjusted Net Income | $463M | $428M | | Adjusted EPS | $2.12 | $1.58 | | Adjusted Operating Income | $628M | $606M | | Adjusted Op. Income Margin | 12.1% | 12.0% | [Year-to-Date 2025 Results](index=2&type=section&id=Year-to-Date%202025%20Results) For the first half of 2025, revenue increased 1% to $10.0 billion, with adjusted operating income margin improving to 12.0% - Tax expense for the first half of 2025 was $401 million, which includes a **valuation allowance increase of approximately $300 million** on deferred tax assets[15](index=15&type=chunk) - As of June 30, 2025, the company maintained a strong liquidity position with **$1.4 billion in cash** and **$4.0 billion in total available liquidity**[16](index=16&type=chunk) YTD 2025 vs YTD 2024 Performance | Metric | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | | U.S. GAAP Revenue | $10.0B | $9.95B | | U.S. GAAP Net Income | $382M | $1,156M | | Adjusted Net Income | $853M | $746M | | Adjusted EPS | $3.80 | $2.73 | | Adjusted Operating Income | $1,200M | $1,150M | | Adjusted Op. Income Margin | 12.0% | 11.6% | [Capital Allocation](index=3&type=section&id=Capital%20Allocation) [Share Repurchase Program](index=3&type=section&id=Share%20Repurchase%20Program) The company completed its Accelerated Share Repurchase program in Q2, buying back 48.5 million shares in total - The **Accelerated Share Repurchase (ASR) program was completed** in Q2 2025[18](index=18&type=chunk) ASR Program Summary | Metric | Value | | :--- | :--- | | Total Shares Received | 48.5 million | | Average Price Per Share | $61.84 | | Remaining Authorization | $2.52 billion | [Business Outlook](index=3&type=section&id=Business%20Outlook) [Q3 and Full Year 2025 Outlook](index=3&type=section&id=Q3%20and%20Full%20Year%202025%20Outlook) Aptiv forecasts full-year 2025 net sales between $20.0 billion and $20.3 billion and adjusted EPS of $7.30 to $7.60 - The financial guidance includes **potential impacts from recently imposed U.S. government tariffs** but not potential retaliatory actions[19](index=19&type=chunk) - The full-year 2025 guidance includes an anticipated **negative impact of approximately $0.20 per diluted share** from equity losses related to the Motional joint venture[20](index=20&type=chunk) Full Year 2025 Financial Guidance | Metric | Full Year 2025 Range | | :--- | :--- | | Net Sales | $20,000M - $20,300M | | Adjusted Operating Income | $2,370M - $2,470M | | Adjusted Operating Income Margin | 11.9% - 12.2% | | Adjusted EBITDA | $3,135M - $3,235M | | Adjusted Net Income Per Share | $7.30 - $7.60 | | Cash Flow from Operations | ~$2,000M | [Consolidated Financial Statements](index=7&type=section&id=Consolidated%20Financial%20Statements) [Consolidated Statements of Operations](index=7&type=section&id=Consolidated%20Statements%20of%20Operations) Q2 2025 net income decreased significantly year-over-year due to a large prior-year gain on equity method transactions Key Income Statement Data (in millions) | Line Item | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | Net sales | $5,208 | $5,051 | $10,033 | $9,952 | | Operating income | $486 | $441 | $934 | $860 | | Net gain on equity method transactions | $46 | $641 | $46 | $641 | | Net income attributable to Aptiv | $393 | $938 | $382 | $1,156 | [Condensed Consolidated Balance Sheets](index=8&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets increased to $23.9 billion while total liabilities decreased, strengthening the company's equity position Key Balance Sheet Data (in millions) | Line Item | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $1,448 | $1,573 | | Total current assets | $8,373 | $7,826 | | Total assets | $23,942 | $23,458 | | Total current liabilities | $4,751 | $5,131 | | Long-term debt | $7,758 | $7,843 | | Total liabilities | $13,967 | $14,373 | | Total shareholders' equity | $9,872 | $8,993 | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) The company generated $783 million in cash from operations in the first half of 2025, down from the prior year Key Cash Flow Data - Six Months Ended June 30 (in millions) | Line Item | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $783 | $887 | | Capital expenditures | ($346) | ($491) | | Net cash used in investing activities | ($212) | ($829) | | Net cash used in financing activities | ($732) | ($264) | | Decrease in cash, cash equivalents and restricted cash | ($125) | ($231) | [Supplemental Information](index=10&type=section&id=Supplemental%20Information) [Segment Summary](index=10&type=section&id=Segment%20Summary) In Q2 2025, revenue growth was led by the Electrical Distribution Systems and Engineered Components Group segments Q2 2025 Segment Performance (in millions) | Segment | Net Sales | % Change | Adj. Operating Income | % Change | | :--- | :--- | :--- | :--- | :--- | | Electrical Distribution Systems | $2,206 | 7% | $163 | 18% | | Engineered Components Group | $1,723 | 6% | $287 | (4)% | | Advanced Safety and User Experience | $1,507 | (3)% | $178 | 5% | [Reconciliation of Non-GAAP Measures](index=11&type=section&id=Reconciliation%20of%20Non-GAAP%20Measures) This section details adjustments from GAAP to non-GAAP measures to enhance comparability of core operating performance - Management believes non-GAAP measures provide **improved comparability between periods** by excluding items not indicative of core operating performance[24](index=24&type=chunk)[42](index=42&type=chunk) Q2 2025 Reconciliation of Operating Income to Adjusted Operating Income (in millions) | Description | Amount | | :--- | :--- | | **Operating income (GAAP)** | **$486** | | Amortization | $53 | | Restructuring | $52 | | Separation costs | $28 | | Other acquisition and portfolio project costs | $6 | | Asset impairments | $4 | | Compensation expense related to acquisitions | $4 | | Gain on asset sale | ($5) | | **Adjusted operating income (Non-GAAP)** | **$628** | Q2 2025 Reconciliation of Net Income to Adjusted Net Income (in millions) | Description | Amount | | :--- | :--- | | **Net income attributable to Aptiv (GAAP)** | **$393** | | Amortization, Restructuring & other special items | $94 | | Net gain on equity method transactions | ($46) | | Tax impact of adjusting items | ($23) | | **Adjusted net income attributable to Aptiv (Non-GAAP)** | **$463** | [Forward-Looking Statements](index=5&type=section&id=Forward-Looking%20Statements) The company's future projections are subject to significant risks including economic conditions and supply chain disruptions - The company **disclaims any obligation to update** forward-looking statements[28](index=28&type=chunk) - Identified risk factors include: **global economic conditions, supply chain disruptions, and changes in trade laws**[27](index=27&type=chunk)[28](index=28&type=chunk)

Core Insights - Aptiv PLC (APTV) is expected to report second-quarter 2025 results on July 31, with earnings estimated at $1.79 per share, reflecting a 13.3% year-over-year growth, while revenues are projected at $5.03 billion, indicating a 0.4% decrease from the previous year [1][8] Financial Performance Expectations - For Q2 2025, Aptiv anticipates revenues between $4.92 billion and $5.12 billion, with adjusted EPS expected in the range of $1.7 to $1.9. The adjusted operating income margin is forecasted between 11.1% and 11.8%, and the adjusted EBITDA margin is projected to be between 14.9% and 15.5% [3][8] - For the full year 2025, Aptiv expects revenues between $19.6 billion and $20.4 billion, with adjusted EPS in the $7 to $7.6 range. The adjusted operating income margin is anticipated between 11.9% and 12.3%, with capital expenditure expected to be $880 million [4] Strategic Initiatives - Aptiv's partnership with ServiceNow aims to enhance intelligent automation and operational efficiency across various sectors by integrating Aptiv's edge intelligence with ServiceNow's AI-powered workflows. This collaboration is expected to streamline operations, support real-time decision-making, and improve productivity, ultimately driving top-line growth and earnings [5][8] Earnings Surprise History - Aptiv has a positive earnings surprise history, having surpassed the Zacks Consensus Estimate in each of the last four quarters, with an average beat of 9.5% [2][6]

Core Viewpoint - Aptiv PLC is set to report its earnings on July 31, 2025, with expectations of an EPS of $1.77, reflecting a 12.03% increase year-over-year, while revenue is anticipated to decline by 1.29% to $4.99 billion [2][3]. Group 1: Earnings and Revenue Estimates - For the fiscal year, earnings are projected at $7.18 per share, indicating a 14.7% increase from the previous year, while revenue is expected to be $19.6 billion, showing a slight decrease of 0.55% [3]. - Recent analyst estimate revisions for Aptiv PLC suggest a positive outlook for the business, as these changes often correlate with stock price performance [4]. Group 2: Stock Performance and Valuation - Aptiv PLC's stock closed at $68.20, down 2.95% from the previous day, underperforming the S&P 500, which had a minimal loss of 0.01% [1]. - The stock has increased by 3.86% over the past month, slightly outperforming the Auto-Tires-Trucks sector's gain of 3.5% but lagging behind the S&P 500's 5.37% increase [1]. - The company currently has a Zacks Rank of 3 (Hold) and is trading at a Forward P/E ratio of 9.79, which is below the industry average of 12.69 [5]. Group 3: Industry Context - The Automotive - Original Equipment industry, part of the Auto-Tires-Trucks sector, ranks in the bottom 29% of all industries according to the Zacks Industry Rank [7]. - The average PEG ratio for the Automotive - Original Equipment industry is 1.1, while Aptiv PLC's PEG ratio stands at 0.78, indicating a potentially undervalued position relative to its growth expectations [6].

Summary of Aptiv (APTV) 2025 Conference Call Company Overview - **Company**: Aptiv, a global industrial technology leader providing advanced electrical safety, connectivity, and software solutions for light vehicles, commercial vehicles, and other industrial markets [1][4] Key Points on EDS Spin-Off - **Spin-Off Importance**: The spin-off of the EDS (Electrical Distribution Systems) business is crucial for optimizing growth and capital allocation, allowing it to operate independently with a focused strategy [3][8] - **EDS Business Performance**: EDS generates over $8 billion in revenue and holds a leading position in vehicle architecture and wire harness technology, with over 50% of its business being full-service solutions [4][5] - **Margin Comparison**: EDS has mid to high single-digit operating margins, while the ECG (Connectivity and Advanced Safety) business has close to 20% operating margins [7][9] - **Market Position**: EDS is well-positioned for consolidation within the automotive industry and has potential for expansion into other markets such as drones and robotics [6][9] RemainCo Business Profile - **RemainCo Composition**: The remaining company will include the ASUX (Active Safety User Experience) business and engineered components, which are expected to grow in both automotive and non-automotive sectors [11][14] - **M&A Strategy**: Aptiv has completed 21 M&A transactions over the last decade, with plans for continued bolt-on acquisitions to enhance growth [15][16] Industry Outlook - **Global Vehicle Production**: The overall outlook for global vehicle production is down 3% for the year, with Q1 showing a 2% decline and Q2 expected to decline by approximately 4% [28][30] - **Regional Performance**: North America is experiencing some weakness, while China shows strength in vehicle production. Europe is stable but facing some slowdown in EVs [33][34] - **China Market Growth**: Aptiv expects to reach market parity in China by 2025, with domestic revenues projected to be around 70% [37][39] Tariffs and Supply Chain Management - **Tariff Exposure**: Aptiv's direct tariff exposure is minimal due to USMCA compliance, with 95% of trade flows into the U.S. coming from Mexico [61][62] - **Supply Chain Strategy**: The company is focused on mitigating costs and maintaining competitiveness through strategic sourcing and supply chain management [63][66] Future Growth and Strategic Focus - **Growth Strategy**: Aptiv aims for revenue growth above market levels, focusing on high-quality revenue and margin expansion [68][72] - **SVA (Scalable Vehicle Architecture)**: The company remains committed to SVA, with a mix of internal and external development strategies among OEMs [47][50] Additional Insights - **Autonomous Vehicle Development**: Aptiv is actively involved in the development of autonomous vehicle technology through its joint venture with Hyundai, with a focus on long-term profitability [58][60] - **Customer Relationships**: The company emphasizes strong relationships with top OEMs and is cautious about entering lower-tier markets where it cannot add significant value [41][43] This summary encapsulates the key insights and strategic directions discussed during the Aptiv conference call, highlighting the company's focus on growth, market positioning, and operational strategies.