Aptiv (APTV) Investor Day 2025 summary

Strategic direction and business transformation

• Announced the spin-off of the Electrical Distribution Systems (EDS) segment, creating two independent public companies, each with tailored strategies and capital allocation priorities.

• New Aptiv will focus on Intelligent Systems and Engineered Components, targeting diversified end markets beyond automotive, including aerospace, telecom, and industrials, leveraging a comprehensive hardware and software portfolio.

• EDS will remain the market leader in automotive electrical architecture, leveraging its design and manufacturing scale to expand into adjacent markets like energy storage, robotics, commercial vehicles, and industrials.

• Both entities are positioned to capitalize on secular trends: Automation, Electrification, and Digitalization, with tailored capital allocation priorities and operational models.

• The separation is expected to unlock shareholder value, drive operational focus, and enable disciplined capital deployment, including dividends and share repurchases.

Financial outlook and guidance

• New Aptiv projects 4%-7% annual revenue growth through 2028, with EBITDA margin expansion of 200 basis points to reach 21%, and mid-teens EPS growth, driven by both automotive and high-growth non-automotive markets.

• Software and services revenue is expected to grow at a mid-teens CAGR, with non-automotive revenue approaching $4 billion by 2028, representing nearly 28% of total revenue.

• EDS forecasts 3%-4% annual revenue growth, low-teens net income growth, and 200 basis points of margin expansion to 12% by 2028, with $1 billion in cumulative free cash flow from 2026-2028.

• 2025E guidance: New Aptiv revenue of $12.4B (24% non-automotive), EBITDA of $2.3B (19% margin), and pro forma EPS of $5.50; EDS revenue of $8.6B, EBITDA margin of 10%, and >$50B cumulative bookings since 2022.

• Both companies will maintain disciplined capital allocation, prioritizing organic growth, targeted M&A, and shareholder returns through dividends and share repurchases.

Segment strategies and market opportunities

• Intelligent Systems: Focused on edge intelligence, software-defined solutions, and expanding into industrial, aerospace, and telecom markets, with a 2025E revenue of $5.8B and ~16.5% EBITDA margin target.

• Engineered Components: Leading in automotive cable management and interconnects, expanding into commercial vehicles, industrial, and telecom, targeting 4-7% revenue growth and ~24% EBITDA margin.

• EDS: Dominant in automotive wiring and harnesses, leveraging full-service capabilities, automation, and global scale to drive growth in commercial vehicles and new markets like energy storage.

• All segments are positioned to benefit from increasing vehicle electrification, software-defined architectures, and growing demand for high-speed data and power connectivity.

• M&A and partnerships are prioritized for diversification, especially for New Aptiv, aiming to increase non-automotive revenue to 40% over time.