Aptiv (APTV) 16th Annual Wells Fargo Industrials & Materials Conference summary

Strategic focus and portfolio transformation

• Post-spin, the business is now a focused connector and active safety/user experience play, targeting secular growth areas like automation, electrification, and digitalization.

• About 24-25% of the portfolio is non-automotive, with 10% in commercial vehicles and the rest in A&D, telecom, and datacom, which are growing at high single digits.

• The company leverages its product portfolio and supply chain strengths to expand in high-growth, high-margin sectors such as drones, robotics, and industrial applications.

• Non-auto sectors are expected to grow 8-10% annually through 2028, with aerospace, defense, and robotics showing the highest growth rates.

• The business model emphasizes scalability, supply chain resiliency, and minimal incremental investment for new market penetration.

Financial outlook and operational performance

• Guidance remains unchanged despite macro risks, with close monitoring of customer mix and global events.

• Second-half growth is expected to accelerate to 6-7%, driven by global vehicle production, customer-supplier friction resolution, and program launches, especially in China.

• Incremental margins post-spin are around 26-27%, supported by revenue flow-through, structural cost improvements, and easing FX/commodity impacts.

• Non-auto revenue posted 9% growth in Q1, with commercial vehicles and diversified industrials contributing.

• Investments continue in supply chain resiliency, with $200 million spent on semiconductors and memory to secure supply through 2027, though higher prices are expected.

Technology partnerships and innovation

• A new partnership with NVIDIA focuses on Edge AI, leveraging both Aptiv and Wind River software stacks for joint commercialization across multiple markets.

• The collaboration is expected to generate revenue, with applications in vision, perception, and industrial AI.

• Robotics partnerships are advancing, with commercial awards anticipated in the second half of the year, translating to revenue late this year or early next.

• The company is well-positioned for the transition to 800-volt data centers, leveraging automotive power distribution expertise.

• Supply chain mapping and resiliency are key differentiators, especially in high-growth sectors like drones and robotics.