Aptiv(US:APTV)2023-02-07 16:00Financial Performance - Aptiv reported net sales of $17,489 million for the year ended December 31, 2022, an increase of 12% from $15,618 million in 2021[235]. - The company's operating income for 2022 was $1,263 million, compared to $1,189 million in 2021, reflecting a growth of 6%[235]. - Net income attributable to Aptiv for 2022 was $594 million, slightly up from $590 million in 2021[235]. - Basic net income per share attributable to ordinary shareholders was $1.96 for 2022, compared to $1.95 in the previous year[235]. - The total operating expenses for 2022 were $16,226 million, an increase from $14,429 million in 2021[235]. - The company incurred interest expenses of $219 million in 2022, up from $150 million in 2021[235]. - Comprehensive income attributable to Aptiv for 2022 was $475 million, compared to $463 million in 2021[238]. - Currency translation adjustments resulted in a loss of $198 million in 2022, compared to a loss of $143 million in 2021[238]. Market and Growth Strategy - In 2022, Aptiv's net sales from the Asia Pacific region accounted for 30% of total sales, indicating a key market for long-term growth[15]. - The automotive technology industry is expected to grow, driven by increasing consumer demand for electrified and software-defined vehicles[18]. - The company aims to address the "Safe," "Green," and "Connected" mega-trends, which are shaping the future of the automotive industry[19]. - The company has identified the Asia Pacific region, particularly China, as a key market for growth, focusing on intelligent systems software, advanced driver assistance systems, and autonomous driving technologies[63]. Acquisitions and Investments - The company completed the acquisition of Wind River Systems, Inc. in December 2022 to strengthen its capabilities in software-defined mobility[20]. - Aptiv acquired 85% of Intercable Automotive Solutions in 2022, with an agreement to purchase the remaining 15% starting in 2026[252]. - The acquisition of Wind River Systems, Inc. was completed on December 23, 2022, for total consideration of approximately $3.5 billion, with technology-related and customer-based intangible assets valued at $750 million and $630 million, respectively[220]. Workforce and Talent Development - The company employed approximately 160,000 people as of December 31, 2022, with 53% in North America and 31% in Europe, Middle East, and Africa[37]. - In 2022, over 43,000 hours of leadership and management training were completed by employees, emphasizing talent development[38]. - The percentage of the global workforce represented by women was approximately 50%, with women in management at 24% as of December 31, 2022[41]. Environmental and Sustainability Goals - The company aims to reduce Scope 1 and 2 absolute CO2e emissions by 25% from the baseline year 2019 by 2025[44]. - The company is committed to becoming carbon-neutral in its global operations by 2030 and achieving net carbon neutrality by 2040[44]. - The company targets a 2% annual reduction in water consumption in high-risk (water-scarce) locations[46]. - The company has set a waste recycling target of 80% for the volume of recycled waste divided by total waste volume[46]. - The company plans to source 100% of electricity for operations from renewable sources by 2030[44]. - The company is committed to delivering only carbon-neutral products by 2039, from sourcing to disposal[44]. Supply Chain and Production Challenges - The global semiconductor supply shortage is impacting production in the automotive industry, with supply chain disruptions expected to persist in 2023[55]. - The organization has seen a substantial increase in raw material inventories due to production volatility and semiconductor shortages[33]. - Supply chain disruptions could potentially cause complete shutdowns of customer assembly lines, exposing the company to material claims for compensation[55]. - The company is actively monitoring and managing inventory levels to maximize supply continuity and efficient use of working capital[55]. Financial Position and Liabilities - As of December 31, 2022, the company's non-U.S. defined benefit pension plans were underfunded by $73 million, with total obligations related to these plans amounting to $344 million[73]. - The total liabilities increased to $12,790 million in 2022 from $9,446 million in 2021, a rise of 35%[240]. - Long-term debt increased significantly to $6,460 million in 2022 from $4,059 million in 2021, a rise of 59%[240]. - The company recorded approximately $224 million related to uncertain tax positions as of December 31, 2022[213]. Risks and Market Conditions - The automotive technology and components industry remains highly competitive, with ongoing industry consolidation affecting the number of top competitors[28]. - The automotive industry is experiencing significant volatility, which may lead to further adverse impacts on operating earnings and cash flows[57]. - The company is subject to ongoing pricing pressures from OEMs, with customer agreements typically requiring annual price reductions of 1% to 3%[67]. - A prolonged economic downturn could require the company to seek additional financing, which may not be available on acceptable terms[60]. Research and Development - Total research and development expenses were approximately $1,120 million, $1,030 million, and $1,024 million for the years ended December 31, 2022, 2021, and 2020, respectively[256]. - The company is focused on developing advanced driver assistance technologies and responding to evolving consumer preferences for mobility on demand services[61].