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 technology platform, emphasizing automation, electrification, and digitalization across automotive and non-automotive sectors.

• Non-automotive now represents about 24-25% of the portfolio, with commercial vehicles at 10% and the rest in A&D, telecom, and datacom, growing at high single digits.

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

• Strategic partnerships, such as with NVIDIA, focus on Edge AI and industrial applications, aiming for joint commercialization and revenue generation.

• The business is positioned to benefit from secular trends and is investing in both organic growth and targeted M&A, especially in non-automotive interconnects.

Financial outlook and growth drivers

• Guidance remains on track despite macro uncertainties, with expected 1% growth in H1 and 6-7% in H2, driven by vehicle production, customer friction resolution, and program launches.

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

• Non-auto revenue is targeted to grow 8-10% annually through 2028, with recent quarters already showing 9% growth.

• Margin profile in non-auto is slightly better, with ongoing investments in engineering and go-to-market capabilities.

• Supply chain resiliency and inventory management, especially for semiconductors and memory, are prioritized, with supply secured through 2027 but at higher prices.

Market positioning and competitive landscape

• Strong competitive position in China, especially in connectors and ADAS, with deep local partnerships and supply chain localization.

• Active safety and user experience are increasingly integrated, with a shift toward intelligent systems and in-cabin sensing for both safety and user interface.

• Robotics and drone sectors are moving from proof-of-concept to commercial awards, with revenue expected late this year or early next.

• Data center opportunities are focused on power distribution, leveraging automotive expertise, especially as the market transitions to 800-volt platforms.

• The company is well-positioned to scale and deliver quality across global markets, leveraging its auto heritage for supply chain and manufacturing excellence.