Aptiv(US:APTV)2022-05-05 20:01Financial Data and Key Metrics Changes - Revenues totaled $4.2 billion, up 4% from the prior year, despite a 7% decline in vehicle production [7][19] - Operating income was $324 million, with earnings per share at $0.63 [7][19] - Adjusted EBITDA was $478 million, reflecting strong flow through and higher volumes [19] Business Line Data and Key Metrics Changes - Advanced Safety and User Experience (ASUX) revenues increased 7%, reflecting 14 points of growth over underlying vehicle production [15][21] - Signal and Power Solutions revenues rose 2%, reflecting 9 points of growth over market [24] - High voltage revenues increased 10%, driven by electric vehicle program launches [10] Market Data and Key Metrics Changes - North America revenue was up 7%, 8% above vehicle production [20] - European revenue growth was 13%, despite an 18% contraction in vehicle production [20] - In China, revenues increased 14% over a flat market [20] Company Strategy and Development Direction - The company is focused on expanding its portfolio of safe, green, and connected technologies, including software solutions [18] - The acquisition of Wind River is expected to enhance competitive positioning and drive new business opportunities [11][48] - The company aims to strengthen its business model's resiliency and capitalize on the trend towards electrified software-defined vehicles [18][30] Management's Comments on Operating Environment and Future Outlook - Management acknowledged ongoing supply chain disruptions and material inflation as significant challenges but expressed confidence in the full-year outlook [8][25] - The company expects to recover lost vehicle production in China in the second half of the year [25] - Management remains optimistic about achieving revenue growth and margin expansion despite current macroeconomic challenges [18][30] Other Important Information - New business bookings reached $6.1 billion, the highest first-quarter level in several years [12] - The company is actively pursuing multiple paths to mitigate material inflation costs, including product redesign and supplier negotiations [22][36] Q&A Session Summary Question: Material pressure in the quarter - The material pressure was around $80 million for the entire business on a year-over-year basis, with ongoing efforts to offset these costs [31][32] Question: Process for clawing back margin pressure - The company is engaged in commercial discussions with customers and suppliers to recover costs, focusing on redesign efforts and sourcing alternatives [35][36] Question: Incremental margins as the world normalizes - Management indicated that while material inflation will persist, costs related to COVID and supply chain disruptions are expected to abate, providing a positive margin outlook [41][42] Question: Business bookings and competitive set with Wind River - The company is experiencing strong commercial momentum due to its unique product portfolio and the increasing demand for software-defined vehicles [47][48] Question: Second half margin expectations - The second half is expected to see improved margins due to volume growth and price recoveries, with a significant difference from the first half [50][51] Question: Semiconductor supplier redesign efforts - The redesign efforts are well underway, with approximately 100 engineers focused on hardware redesign and software changes, expected to take six months to a year [67][68]