CECP CEO INVESTOR FORUM Kevin Clark President and Chief Executive - - PowerPoint PPT Presentation

CECP CEO INVESTOR FORUM

February 24, 2020

Kevin Clark

President and Chief Executive Officer

This presentation, as well as other statements made by Aptiv PLC (the “Company”), contain forward-looking statements that reflect, when made, the Company’s current views with respect to current events, certain investments and acquisitions and financial performance. Such forward-looking statements are subject to many risks, uncertainties and factors relating to the Company’s operations and business environment, which may cause the actual results of the Company to be materially different from any future results. All statements that address future operating, financial or business performance or the Company’s strategies or expectations are forward-looking statements. Factors that could cause actual results to differ materially from these forward-looking statements are discussed under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s filings with the Securities and Exchange Commission. New risks and uncertainties arise from time to time, and it is impossible for us to predict these events or how they may affect the Company. It should be remembered that the price of the ordinary shares and any income from them can go down as well as up. The Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events and/or otherwise, except as may be required by law.

Forward Looking Statements

CECP CEO Investor Forum | February 24, 2020 | Aptiv 2

OPERATING CASH FLOW

$1.6

Aptiv Overview

$14.4 REVENUE $4.80

EARNINGS PER SHARE

2019 FINANCIAL PERFORMANCE1

$ billions, except per share amounts

$1.5

OPERATING INCOME

POSITIONED TO WIN

3

• 1. Reflects 2019 actuals communicated on January 30, 2020

EG

We are a global technology company that develops safer, greener and more connected solutions, which enable the future of mobility.

CECP CEO Investor Forum | February 24, 2020 | Aptiv

Compelling Mission

4

CLEAR AND COMPELLING MISSION AT THE HEART OF EVERYTHING WE DO

A society that sees zero fatalities, zero injuries and zero accidents Zero emissions: minimize the vehicle’s total lifecycle environmental impact Seamless integration between the car, its passengers, and the world around it

STRATEGY EXECUTION SUSTAINABLE BY DESIGN MISSION

CECP CEO Investor Forum | February 24, 2020 | Aptiv

Advanced safety technologies can eliminate virtually all driver errors, saving over 1 million lives and 40 million injuries annually Electrification can potentially reduce transportation CO2 by more than 50%; these emissions currently account for ~15% of global totals OTA can quickly and efficiently update vehicle software, saving the industry $35 billion annually by 2022

SAFE

Portfolio Aligned To Safe, Green And Connected

GREEN CONNECTED

5

APTIV TECHNOLOGIES HELPING ADDRESS CUSTOMERS TOUGHEST CHALLENGES

APTIV MISSION

A SOCIETY THAT SEES ZERO FATALITIES, ZERO INJURIES AND ZERO ACCIDENTS

APTIV TECHNOLOGIES

• Perception systems and sensor fusion
• Active Safety software and multidomain controllers
• High fidelity / reliability interconnects and signal distribution
• Gesture and voice recognition for hands free control
• ASIL-D engineering, design and test competencies

ADDRESSABLE CPV

$5,000+

APTIV MISSION

ZERO EMISSIONS: MINIMIZE THE VEHICLE’S TOTAL LIFECYCLE ENVIRONMENTAL IMPACT

APTIV TECHNOLOGIES

• High Voltage wiring and electrical centers
• High Voltage connectors, plug-in chargers and cord sets
• Aluminum wire harnesses for light-weighting
• Architecture optimization for mass and weight reduction
• Driver assistance systems with V2I

ADDRESSABLE CPV

$2,000+

APTIV MISSION

SEAMLESS INTEGRATION BETWEEN THE CAR, ITS PASSENGERS, AND THE WORLD AROUND IT

APTIV TECHNOLOGIES

• Secure connected gateways (Cellular, Satellite, DSRC, GPS)
• V2X Modules: Vehicle To Vehicle / Infrastructure
• Wireless (Wifi, BT), Media Modules and Consumer Ports
• Over-The-Air (OTA) for Software and Firmware
• Edge Processing, cloud analytics and cybersecurity

ADDRESSABLE CPV

$3,000+

CECP CEO Investor Forum | February 24, 2020 | Aptiv

Right Strategy, Rigorously Executed

6

DRIVING OUTPERFORMANCE TODAY, AND IN THE FUTURE

Connected Services Automated Driving Smart Vehicle Architecture Adjacent Markets Active Safety High Voltage Electrification Quality & Delivery Human Capital Customer & Regional Mix Footprint & Efficiency

BUSINESS FOUNDATION

Optimizing global execution capabilities, which give Aptiv the right to play across current and future platforms

CURRENT PLATFORMS

Leveraging pan-Aptiv capabilities to increase scale and relevance in fast-growing product areas

FUTURE PLATFORMS

Seeding the next wave of growth, while diversifying business models and end markets

• Built top-tier automated mobility technology capabilities
• Established data monetization platform
• Expanded into non-auto markets
• $5.6B High Voltage bookings since 2016
• $13.2B Active Safety bookings since 2016
• Divested businesses that did not fit our strategy
• Drove $250M in overhead cost savings 2014 - 2019
• No single customer more than 10% of sales
• Balanced Regional Mix1: North America (38%),

Europe (33%), APAC (27%) CECP CEO Investor Forum | February 24, 2020 | Aptiv

STRATEGY EXECUTION SUSTAINABLE BY DESIGN MISSION

1. Regional revenue calculated as a percent of 2019 total revenue as communicated on January 30, 2020

Proactively Addressing the Changing Environment

7

SMART EXECUTION OF OUR BUSINESS MODEL AND TIMELY CAPITAL DEPLOYMENT HAS ENABLED APTIV TO ADAPT AND THRIVE IN A DYNAMIC MARKET

2014 2020

Jun 2015 Thermal Jul 2015 Reception Systems Dec 2016 Mechatronics EXITED HARD-PARTS businesses, where limited opportunity for differentiation was increasingly driving price pressure INVESTED IN AUTOMATED DRIVING & DATA CAPABILITIES at attractive valuations, while helping accelerate Active Safety and central compute product lines Dec 2017 Powertrain Spin-off POWERTRAIN SPIN-OFF created two independent public companies, better positioned to pursue independent strategic priorities Jul 2015

• ttomatika

Dec 2017 nuTonomy ACQUISITIONS increasing our scale and leverage in electrical architecture, while expanding in adjacent markets Jun 2018 KUM Oct 2018 Winchester Dec 2015 HellermannTyton Nov 2015 Control-Tec Nov 2019 gabocom Q1 2020 50/50 automated driving JV expected to close with Hyundai CECP CEO Investor Forum | February 24, 2020 | Aptiv

Aptiv Perfectly Positioned Today

8

PROVIDING END-TO-END SOLUTIONS THAT ENABLE THE COMMERCIALIZATION OF NEW MOBILITY

POWER Energize sensors and components DATA Transmission and processing throughout the vehicle COMPUTE Collect and process the information SOFTWARE Act on the information to enable functionality

+

ACTIVE SAFETY Increasing levels of safety automation

• n the path to automated driving

CONNECTIVITY Improved in cabin experiences for greater comfort and productivity HIGH VOLTAGE ELECTRIFICATION Greater vehicle electrification for propulsion and performance

Aptiv’s advanced technologies and deep systems knowledge across the brain and nervous system of the vehicle… …allows us to conceive, specify and deliver solutions for our customers’ toughest challenges

Foundational elements for every vehicle solution CECP CEO Investor Forum | February 24, 2020 | Aptiv

AS&UX S&PS

Funding Investments for Growth

9

IMPROVEMENTS IN BUSINESS FOUNDATION ALLOWING US TO REINVEST FOR ACCELERATED GROWTH AND MARGIN EXPANSION THROUGH THE CYCLE

Performance Investments For Growth*

$2.7B

PERFORMANCE AND INVESTMENTS

2015 - 2020E

Engineering Manufacturing Mobility

EXPANDING EARNINGS

Performance more than offsetting price and incremental investments for growth

FUNDING MOBILITY

Mobility funding decreases in 2020 due to Aptiv-Hyundai JV closing in Q1

ACCELERATING GROWTH

Supporting record customer awards in products such as Active Safety and Electrification Material

OPTIMIZING COST STRUCTURE

Relentless focus on driving operational efficiencies and improving flexibility Price

* Incremental Investments: 2020E vs. 2015

$2.2B D&A CECP CEO Investor Forum | February 24, 2020 | Aptiv People Sustainable Growth Portfolio

COMPETITIVE MOAT EXPANDING

Reinvestment in the business improving competitive positioning on current and future platforms Best talent, organized the right way, with the right tools Improving portfolio of differentiated solutions focused on customers’ toughest challenges Outsized customer awards in next generation solutions Mobility

STRATEGY EXECUTION SUSTAINABLE BY DESIGN MISSION

Fast Growing Business Gaining Scale

HIGH VOLTAGE ELECTRIFICATION

$ Billions, % Adj Growth1

10

LEVERAGING FULL APTIV CAPABILITIES TO INCREASE SCALE AND RELEVANCE IN FAST-GROWING PRODUCT AREAS

CECP CEO Investor Forum | February 24, 2020 | Aptiv

1. Revenue growth excludes impact of foreign exchange, commodities and divestures.

ACTIVE SAFETY

$ Billions, % Adj Growth1

$0.9 $1.3

2018 2019 2020E 2022T

30%

$2.5+ ~$1.7 $0.26 $0.34

2018 2019 2020E 2022T

$1.0+

50%

~$0.5

ENGINEERED COMPONENTS

$ Billions, % Adj Growth1

$4.7 $4.8

2018 2019 2020E 2022T

$5.5+

6%

~$5.0

Balanced Capital Deployment

11 CAPITAL EXPENDITURES

35%-40%

DIVIDENDS

10%-15%

M&A AND SHARE REPURCHASES

45%-55%

DRIVING GROWTH

• Organic reinvestment to support active safety,

infotainment and engineered components growth

• Adding accretive acquisitions and technology

enablers; M&A pipeline remains full RETURNING CASH TO SHAREHOLDERS

• Opportunistic share buybacks take advantage of

market dislocations

• Maintaining a competitive dividend

FOCUSED ON VALUE ENHANCING ORGANIC AND INORGANIC INVESTMENT OPPORTUNITIES

Long Term Capital Allocation Priorities4

1. FCF Conversion: (Operating Cash Flow – CAPEX + Spin Related Cash Payments) / Net Income; Spin Related Cash Payments of $38M in 2017 and $167M in 2018 2. CAGR represents growth of operational cash flow only 3. 2017 excludes the $310M payment for unsecured creditors settlement in 2017 4. Net of cash required to support business operations

OPERATING CASH FLOW

$ Billions, Free Cash Flow Conversion1

2017 2018 2019 2022T $1.4 $2.2-2.4

~10%

CAGR2

85 - 90% 90% $1.6 $1.6 73%

3

85% CECP CEO Investor Forum | February 24, 2020 | Aptiv

Strategy Has Delivered Strong Results

GROWTH

Revenue, IHS Production

INCOME

Operating Income1

12

EXECUTION TOWARDS LONG TERM FINANCIAL FRAMEWORK CREATING VALUE FOR SHAREHOLDERS

1. Adjusted for restructuring, stranded and other costs related to accounting treatment for Discontinued Operations (DO) and other special items 2. Peer group includes: CON, DENSO, LEA, MGA, VALEO, VC 3. Growth, Income, and Total Shareholder Return data sourced from Capital IQ

2015 2016 2017 2018 2019

Aptiv | 132 Peers2 | 115 Production | 101

2015 2016 2017 2018 2019

Aptiv | 124 Peers2 | 86

TSR

2015 – 20193

56% 12% 29% APTV Peers S&P 500

2

75% 10% 44% APTV Peers S&P 500

2

67% 15% 57% APTV Peers S&P 500

2

1-Year (2019) 3-Year (2017-19) 5-Year (2015-19) CECP CEO Investor Forum | February 24, 2020 | Aptiv

13

Sustainable by Design

FINANCIAL FRAMEWORK ALIGNED WITH STRATEGY AND VISION

MORE SUSTAINABLE BUSINESS REVENUE DIVERSIFICATION

Disciplined revenue growth with balanced customer, region and end market mix

IMPROVED COST STRUCTURE

Relentless focus on reducing cost and improving our flexible business model

BALANCED CAPITAL DEPLOYMENT

Balanced capital deployment drives upside

ABILITY TO OUTPERFORM IN ANY ENVIRONMENT INVESTMENTS FOR GROWTH

Investment in the business to improve competitive positioning

INDUSTRY LEADING PORTFOLIO OF TECHNOLOGIES

Continued validation of our relevant portfolio of advanced technologies

CECP CEO Investor Forum | February 24, 2020 | Aptiv

STRATEGY EXECUTION SUSTAINABLE BY DESIGN MISSION

PROCESSES

We’re improving the resiliency and efficiency of our supply chain, while enhancing our ability to commercialize new solutions

PEOPLE

Our people play the key role in executing our vision and strategy - in good times and bad - so

• ur culture of execution helps ensure we have the

right people organized the right way

More Sustainable through “The How”

14

CULTURE OF CONTINUOUS IMPROVEMENT AROUND OUR PEOPLE, PROCESSES AND PORTFOLIO MAKES APTIV A MORE SUSTAINABLE BUSINESS PORTFOLIO

Our innovative portfolio of technologies and robust global engineering and development capabilities have positioned us to meet the increasingly stringent manufacturing demands and consumer preferences for high technology content CECP CEO Investor Forum | February 24, 2020 | Aptiv

Winning Culture

SUSTAINABLE CULTURES DELIVER BEST-IN-CLASS PERFORMANCE FOR ALL STAKEHOLDERS RESULTS COMPOUND WELL ABOVE PEERS

CORE VALUES AT THE HEART OF APTIV

Principles for how we work 15

ALWAYS DO THE RIGHT THING, THE RIGHT WAY

PLAY TO WIN ONE TEAM THINK & ACT LIKE OWNERS ACT WITH URGENCY PASSION FOR RESULTS OPERATE WITH RESPECT

ESG TAKING HOLD

CECP CEO Investor Forum | February 24, 2020 | Aptiv

World’s Most Ethical Companies for the eighth year in a row Ranked #4 in Autos & Parts industry category and included in JUST U.S. Large Cap Equity ETF

Sustainability Journey

CELEBRATING INTERNATIONAL WOMEN’S DAY

CECP CEO Investor Forum | February 24, 2020 | Aptiv 16

OPERATIONALLY FOCUSED ON MAKING APTIV A MORE DIVERSE COMPANY RIGHT STRUCTURE

Beyond the right culture and portfolio of products, we believe it is essential to have the right people, in the right frame of mind,

• rganized in the right way

47% Women Management Positions 27% Revenue-Generating Functions 21% PERCENTAGE OF FEMALE REPRESENTATION IN APTIV’S WORKFORCE

Events to strengthen the link between women and technology leadership Industry and educational forums to engage and inspire women Heavily involved in campus activities targeted at developing female technical leaders

EMPLOYEE ENGAGEMENT

Aptiv is constantly interacting with our workforce to ensure that they are heard and provide the feedback and support they need to develop their careers

DIVERSITY EQUALS INNOVATION

Diversity of thought and experiences are critical to delivering on our mission In addition to talent and skill, we believe race, culture, ethnicity, gender, and age diversity are vital to our success

PERFORMANCE BASED

Named Executive Officer Pay Mix

LONG-TERM VALUE FOCUSED ACHIEVED THE RIGHT WAY

Strategic Results Modifier (SRM) Component of AIP

17

1. Segment performance metrics based on Operating Income and Simplified Operating Cash Flow 2. TSR performance relative to Russel 3000 Auto Index peers 3. For Executive Officers

79%

Aptiv Performance Based

BASE PAY | 21%

Incentives Aligned To Creating

SHAREHOLDER VALUE 10% SRM

STRATEGIC RESULTS MODIFIER

+ - 2020 SRM GOALS

TALENT & DIVERSITY Attract and retain the best CULTURE Reinforce values and behaviors of a winning team QUALITY Drive flawless launch and delivery AIP

• 50% | NET INC1
• 10% | BOOKINGS
• 40% | CASH (CFBF) 1

ANNUAL INCENTIVE PLAN (AIP) | 19%

LTIP

• 25% | NET INC
• 25% | TSR2
• 50% | RONA

75% Performance3 25% Time Based3 SRM Goals drive strategic factors

52%

Russell 3000 Average

LONG-TERM INCENTIVE PLAN (LTIP) | 60%

Performance Based LTIP linked to business plan; strongly incentivizing commitment to outperformance

Incentives Aligned to Long-Term Value

PAY-FOR-PERFORMANCE CULTURE WITH METRICS TIGHTLY LINKED TO LONG-TERM VALUE CREATION

CECP CEO Investor Forum | February 24, 2020 | Aptiv Stock Ownership Guidelines: CEO = 6x of base salary Executive Officers = 3x of base salary

SUSTAINABILITY

Board Of Directors Engagement

STRONG PARTNERSHIP BETWEEN BOARD OF DIRECTORS AND MANAGEMENT ON STRATEGY AND RISK MANAGEMENT

GOVERNANCE ETHICS & COMPLIANCE STRATEGY FINANCE INVESTOR SENTIMENT

• Product portfolio review
• Operational planning
• Long-term enterprise risks and opportunities
• Strategic investments
• Financial performance and disclosures
• Annual budget and long-term business plan
• Capital deployment
• Market and industry insight and assessment
• Investor and analyst feedback / perception
• Communication strategy
• ESG priorities
• Long-term environmental goals and commitments
• Safety and compliance
• Community involvement
• Selection and evaluation of Board members
• Corporate governance guidelines
• Compensation planning
• Enterprise risk
• Company culture
• DRIVE Line cases
• Diversity and inclusion
• Human capital management

18 CECP CEO Investor Forum | February 24, 2020 | Aptiv

Aptiv 2025 Vision

19

… LOGICAL EXTENSION OF OUR STRATEGY

2025 REVENUE

~$22B

CAPITAL DEPLOYMENT UPSIDE

IMPROVED GROWTH PROFILE

Less cyclical, more predictable and more diversified revenue growth

IMPROVED PROFITABILITY

Continuous improvement mindset increases leverage in operating model

WINNING CULTURE

Winning teams deliver best-in-class customer and shareholder value

SIGNAL & POWER SOLUTIONS ADVANCED SAFETY & USER EXPERIENCE FUTURE PLATFORMS EMERGE

Investments result in accretive solutions

CURRENT PLATFORMS SCALE

Driving scale in fast growing product lines

FOUNDATION OF EXECUTION

Continued focus on flexible and efficient cost structure

Active Safety High Voltage

CECP CEO Investor Forum | February 24, 2020 | Aptiv

Summary

20

STRATEGY, PORTFOLIO AND RIGOROUS FOCUS ON EXECUTION MAKE APTIV A MORE SUSTAINABLE BUSINESS

Accelerating growth in current and future platforms, while optimizing global execution capabilities drives increasing value for stakeholders Full system solutions aligned to the safe, green and connected megatrends, provide a tailwind for content growth Deliver safe, green and connected technologies that enable the future of mobility Success emanates from a strong, sustainable business that makes the world a better place, a business that is Sustainable by Design

A P T V

CECP CEO Investor Forum | February 24, 2020 | Aptiv

STRATEGY EXECUTION SUSTAINABLE BY DESIGN MISSION