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 higher growth, margin expansion, and diversification into non-automotive markets, leveraging a comprehensive hardware and software portfolio.

• EDS will remain a leader in automotive electrical architectures, power, signal, and data distribution, expanding into commercial vehicles, industrials, and energy storage.

• Both entities are positioned to capitalize on secular trends: Automation, Electrification, and Digitalization, with tailored capital allocation 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 guidance and outlook

• New Aptiv targets 4%-7% annual revenue growth and mid-teens EPS growth through 2028, with EBITDA margin expansion to approximately 21% and cumulative free cash flow of ~$4B (2026-2028E).

• Non-automotive revenue is expected to reach nearly $4 billion by 2028, representing about 27% of total revenue, with software and services growing at a mid-teens CAGR.

• EDS targets 3%-4% annual revenue growth, low-teens net income growth, and cumulative free cash flow of ~$1B (2026-2028E), with EBITDA margin expansion to 12%.

• 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 emphasize disciplined capital allocation, maintaining investment-grade balance sheets, and returning excess cash to shareholders through dividends and buybacks.

Market trends and growth drivers

• Slower-than-expected EV adoption and delayed software-defined vehicle architectures have moderated growth rates, but secular tailwinds remain strong.

• Automation, Electrification, and Digitalization are driving increased content per device and expanding addressable markets in automotive, aerospace, telecom, and industrials.

• New Aptiv’s Intelligent Systems leverages a modular tech stack, enabling expansion into adjacent markets such as robotics, aerospace, and telecom.

• Engineered Components is growing its non-automotive business to over 25% of segment revenue, with strong positions in commercial vehicles, aerospace, and telecom.

• M&A and partnerships are key to accelerating diversification, especially for New Aptiv in non-automotive sectors.