Bank of America Merrill Lynch Auto Summit Conference April 16, 2014
Jessica Holscott Vice President, Investor Relations
Forward-looking statements This presentation, as well as other statements made by Delphi Automotive PLC (the “Company”), contain forwardlooking statements that reflect, when made, the Company’s current views with respect to current events 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.
3
2013 highlights • Further rotated Western European footprint • MVL integration running ahead of schedule • Expanded margins and increased earnings • Returned significant cash to shareholders • Upgraded to investment grade by S&P and Fitch Increased shareholder value 4
2013 highlights New business bookings $ billions
2013 bookings by region
$26.3
$26.6
$23.5
North America 34%
$19.9
Europe 33%
$13.6
South America 4%
2009
2010
2011
2012
Asia 29%
2013
Continued Further increase strong bookings shareholder momentum value 5
Note: Bookings = lifetime gross program revenues awarded, based upon expected volumes and pricing
2013 highlights Financial results $ billions
Revenue $15.5
2012
Operating income1
$ billions
$16.5
2013
$1.8 $1.7
2012
Operating income margin1
EPS1 $4.40
11.2% 10.8%
2012
$3.84
2013
2012
Delivering solid financial results 6
2013
1. Adjusted for restructuring and acquisition-related integration costs
2013
2013 highlights Financial metrics comparison EBITDA margin 16.5%
EBIT margin 14.5%
16.4% 11.2%
9.9%
7.8%
6.8% 1.8% Peer range
Peer average
Delphi
Peer range
Peer average
Delphi
ROIC
34%
FCF % to EBIT 78%
22%
18%
58% 35% 12%
7% Peer range
Peer average
Delphi
Peer range
Peer average
Industry-leading financial metrics 7
Note: Range and averages are for a peer group consisting of: ALV, BWA, HAR, JCI, LEA, TEN and TRW with outliers removed (excludes Delphi); data represents Capital IQ actuals / J.P. Morgan North America Equity Research
Delphi
Jeff Owens Executive Vice President and Chief Technology Officer
2014 priorities • Disciplined above market revenue growth • Further optimize operating footprint
• Accelerate introduction of advanced technologies • Further expand margins and increase earnings • Disciplined capital allocation Further increase shareholder value 9
Accelerate introduction of advanced technologies Significant investment in technology development with more than…
Heated Tip Cold Start System
Ammonia (NH3) Sensor
Aluminum Cable
Friction Stir Weld
• $1.7B gross invested annually in research, development & engineering
• 19,000 scientists, engineers and technicians worldwide
RACam Airbag Squib AK2 Connection System
• 15 major technical centers • 8,000 patents
Wireless Consumer Device Charging System
• 60 major awards ErgoMate™ Connection System
Heavy Duty Diesel Common Rail Systems
Gasoline Direct injection (GDi)
Introduction of advanced technologies driving revenue growth 10
Disciplined capital allocation • Increase annual dividend payout from $0.68 to $1.00 per share Increase of approximately 50%
Total spend of ~$300M • Board authorized a new $1.0 billion share repurchase program ~$200M remaining on current $750M program Continue to opportunistically repurchase stock
Drives additional shareholder value 11
Success factors – Active Safety and Infotainment Future Key Success Factors
Delphi is well-positioned
•
Strong development partner network
•
Active presence/partnerships in Silicon Valley
•
Adaptable in-vehicle infotainment computing platform
•
Scalable, powerful computing platforms leveraging leading SoC suppliers
•
Ability to manage high complexity global development, integration, validation (i.e., automotive electronics)
•
Experience executing high end, complex systems development and 3rd party software integration
•
Multi-domain capability
•
•
Capability to provide full range of onboard and off-board services
Complete portfolio: Infotainment, Driver Interface, Cloud, ADAS/Active Safety
•
Cloud connectivity/security solutions to complement on-board content/services
Well-positioned to benefit from secular growth trends 12
Safe
Active Safety market drivers/trends Customers
• Consumers demanding increased content from OEMs • Premium OEMs currently develop feature algorithms; Volume OEMs to develop automated features
Competitors
• Major players: Autoliv, Bosch, Continental, Delphi • Multiple niche competitors with single offerings • Expect consolidation as market matures
Technology
• Computing platforms integrated with satellite sensors • Software defined features/value proposition • Multiple sensors for higher-level automated features
Regulatory
• European NCAP rewards Active Safety technologies • Car-to-car/infrastructure • Evolving China, Korea and US legislation
Active Safety has become strategic for OEMs and their brands 14
Active Safety past the tipping point Global safety electronics market ($ billions)
14 12 10 8 6 4
Active Safety 2 0 2013
2014
2015
2016
2017
2018
Active Safety segment driving growth 15
2019
2020
Active Safety past the tipping point Global safety electronics market ($ billions)
14 12 10
Regulated & Regulated & Incentivized Incentivized
8
Active Safety
6 4
Active Safety Active Safety
2 0 2013
Passive Safety 2014
2015
2016
2017
2018
2019
Active Safety segment growing at 35% CAGR to ~$14B 16
2020
Leverages transition from passive to Active Safety Cumulative launches 74
For 16 customers
Asia Europe N. America
2016
RACam
Short Range Radar
Mid Range Radar
Camera Systems
16 5 2012
2013
…
$0.2B incremental revenue 17
Connected
Infotainment market drivers/trends • Innovating close to consumers and trend-makers
Customers
• Promoting infotainment for brand differentiation • Expanding “brought-in” and “embedded” functionality
Competitors
• Integration and software execution are differentiators • New entrants competing for pieces of infotainment • Fragmented market fosters industry consolidation
Technology
• Powerful and scalable computing platforms • Updatable, cloud-connected platforms • Infotainment and Active Safety convergence
Regulatory
• Additional distraction regulations may emerge • e-Call driver assistance to be in place in EU by 2015 • Car-to-car/infrastructure – Intelligent Transportation
Infotainment has become strategic for OEMs and their brands 19
Connectivity and computing drives Infotainment
Annual revenue ($billions)
16 14 12 Next Gen Connected Computing Platform
10 In-vehicle Wireless Network
8 6
Reconfigurable Cluster & Displays
4 2 0 2012
Connected Infotainment
1st Gen Connected Navigation
2013
2014
2015
2016
2017
2018
$14B market growing at ~25% CAGR 20
2019
2020
Leverages transition from entertainment to Connected Infotainment Cumulative launches 22
For 10 customers
Asia Europe N. America S. America
3 1 2012
2013
…
2016
Connected Infotainment Head Unit
$0.4B incremental revenue 21
Infotainment and active safety are converging •
Infotainment and safety feature sets are merging Providing ADAS data from navigation to active safety components 360 camera integration (ADAS functionality) into infotainment computing platform Similar base technologies for vision-based algorithms and video handling ‒ Object/pedestrian/sign detection ‒ Driver monitoring, eye tracking, gesture recognition V2X functionality relevant in safety and infotainment worlds Increasingly common computing platforms and operating systems
•
Only a few have the combined infotainment and active safety expertise Delphi, Conti, Bosch and Denso
Substantial market opportunity 22
In the future, we expect higher levels of integration Cluster
Integrated Center Panel
Cloud
Multi Domain Controller V2X V2X Module ADAS Module
+ SW Domain Modules
Solutions that leverage synergies to improve cost and performance 23
OEM Multi Domain Controller – illustrative example
SoC
TBD
OS integration/BSP Aurix
FPGA
SoC
TBD
Thermal Design Schematics Blockdiagramm Technical Safety Concept
HW
Mechanical Design/PCB Layout
Design Validation
Design Verification
Vehicle Bench Functional Test
FPGA
System Integration: High Level ECU Functional/Vehicle
Aurix
Built HW & Flash Image File
Framework/Services Development
DFMEA/ Product Design Simulation
Change Management
RTE generation
Requirements Management
Functional Safety Requirements
Application SW design
SW
Application SW verification
SW Integration&Validation
Program Management
OEM S/W Integrator SoC Supplier Delphi 3rd party/OEM SW
Delphi manages the overall system integration and program execution 24
Convergence provides opportunities 2010 Assisted automation
2015
2020
Conditional automation
Safety eco-system
2025 Fully autonomous
Increasing power, data, and computing architectures
Increasing personalization
Smartphone integration
Full cloud connectivity
Increasing vehicle content 25
Internet of things
2014 priorities • Disciplined above market revenue growth • Further optimize operating footprint
• Accelerate introduction of advanced technologies • Further expand margins and increase earnings • Disciplined capital allocation Further increase shareholder value 26
Appendix
Non-US GAAP financial metrics ($ millions)
2012
2013
$1,077
$1,212
Income tax expense
$212
$256
Interest expense
$136
$143
Other income, net
($5)
$18
Noncontrolling interest
$83
$89
Equity income, net of tax
($27)
($34)
Restructuring
$171
$1,684
Asset impairments
$15
$145
Other acquisition-related costs
$9
$15
Adjusted operating income
$1,671
$1,844
Revenue
$15,519
$16,463
10.8%
11.2%
Net income attributable to Delphi
Adjusted operating income margin
28
Non-US GAAP financial metrics ($ millions, except per share amounts)
2012
2013
$1,077
$1,212
$171
$145
Acquisition-related integration costs
$9
$15
Acquisition-related advisory and transaction costs
$13
-
Asset impairments
$15
-
Debt extinguishment costs
$1
$39
($45)
($40)
Adjusted net income attributable to Delphi
$1,241
$1,371
Weighted average number of diluted shares outstanding
323.29
311.80
Diluted net income per share attributable to Delphi
$3.33
$3.89
Adjusted net income per share
$3.84
$4.40
Net income attributable to Delphi Adjusting items Restructuring charges
Tax impact of adjusting items (a)
(a) Represents the income tax impacts of the adjustments made for restructuring charges, acquisition-related integration costs, acquisition-related advisory and transaction costs, asset impairments and debt extinguishment costs, by calculating the income tax impact of these items using the appropriate tax rate for the jurisdiction where the charges were incurred
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