Aptiv Reports Third Quarter 2021 Financial Results

Strong Demand Across Product Portfolio Continues Despite Challenging Environment

To view the release with all charts, click here

DUBLIN – Aptiv PLC (NYSE: APTV), a global technology company focused on making mobility safer, greener and more connected, today reported third quarter 2021 U.S. GAAP earnings of $0.32 per diluted share. Excluding special items, third quarter earnings totaled $0.38 per diluted share.

Third Quarter Financial Highlights Include:

• U.S. GAAP revenue of $3.7 billion, down 5% adjusted for currency exchange, commodity movements and divestitures
• U.S. GAAP net income of $86 million, diluted earnings per share of $0.32
• Excluding special items, diluted earnings per share of $0.38
• U.S. GAAP operating income margin of 5.9%
• Adjusted Operating Income margin of 6.0%, Adjusted Operating Income of $219 million; Adjusted EBITDA of $412 million

Year-to-Date Financial Highlights Include:

• U.S. GAAP revenue of $11.5 billion, an increase of 30%
• Revenue increased 24% adjusted for currency exchange, commodity movements and divestitures
• U.S. GAAP net income of $512 million, diluted earnings per share of $1.89
• Excluding special items, diluted earnings per share of $2.04
• U.S. GAAP operating income margin of 8.1%
  • Adjusted Operating Income margin of 8.3%, Adjusted Operating Income of $957 million; Adjusted EBITDA of $1,540 million
• Generated $553 million of cash from operations
  

“Our third quarter performance reflects continued robust demand for our safe, green and connected technologies and our relentless focus on serving customers despite the challenging operating environment,” said Kevin Clark, president and chief executive officer. “Persistent and widespread supply chain shortages continue to restrain production capacity for the global automotive market, and we expect that to continue into 2022. However, our automotive customers continue to prioritize their vehicles with higher active safety content, while penetration of high voltage platforms accelerate. These trends, and our unique ability to capitalize on them, are driving record revenue growth over market for Aptiv. We expect our continued investments in high-growth, high-margin technologies, which help our customers transition to the electrified, software-defined vehicle of the future, to result in additional vehicle content and expansive market opportunities for Aptiv.”

Third Quarter 2021 Results

For the three months ended September 30, 2021, the Company reported U.S. GAAP revenue of $3.7 billion, a decrease of less than 1% from the prior year period. Adjusted for currency exchange, commodity movements and divestitures, revenue decreased by 5% in the third quarter. This reflects declines of 9% in Europe and 7% in North America and growth of 1% in Asia, which includes a decline of 3% in China, and growth of 26% in South America, our smallest region.

The Company reported third quarter 2021 U.S. GAAP net income of $86 million and earnings of $0.32 per diluted share, compared to $283 million and $1.05 per diluted share in the prior year period. Third quarter Adjusted Net Income, a non-GAAP financial measure defined below, totaled $108 million, or earnings of $0.38 per diluted share, compared to $320 million, or $1.13 per diluted share, in the prior year period.

Third quarter Adjusted Operating Income, a non-GAAP financial measure defined below, was $219 million, compared to $389 million in the prior year period. Adjusted Operating Income margin was 6.0%, compared to 10.6% in the prior year period, reflecting adverse impacts from lower than expected global vehicle production rates, the continued impacts of the COVID-19 pandemic and the worldwide semiconductor shortage on the global automotive supply chain. Depreciation and amortization expense totaled $193 million, compared to $192 million in the prior year period.

Interest expense for the third quarter totaled $36 million, as compared to $38 million in the prior year period.

Tax expense in the third quarter of 2021 was $25 million, resulting in an effective tax rate of approximately 14%. Tax benefit in the third quarter of 2020 was $2 million, resulting in an effective tax rate of approximately (1)%, as a result of net discrete tax benefits of $38 million, or approximately 12 points, primarily due to the favorable tax impacts of certain intragroup reorganizations during the third quarter of 2020, which were intended to streamline and simplify the Company’s operating and legal structure.

The Company generated net cash flow from operating activities of $4 million in the third quarter, compared to $559 million in the prior year period. 

Year-to-Date 2021 Results

For the nine months ended September 30, 2021, the Company reported U.S. GAAP revenue of $11.5 billion, an increase of 30% from the prior year period. Adjusted for currency exchange, commodity movements and divestitures, revenue increased by 24% during the period. This reflects growth of 24% in Europe, 24% in North America, 22% in Asia, which includes growth of 19% in China, and 65% in South America, our smallest region.

For the 2021 year-to-date period, the Company reported U.S. GAAP net income of $512 million and earnings of $1.89 per diluted share, compared to $1,486 million and $5.63 per diluted share in the prior year period. Year-to-date Adjusted Net Income totaled $579 million, or $2.04 per diluted share, compared to $206 million, or $0.77 per diluted share, in the prior year period.

The Company reported Adjusted Operating Income of $957 million for the nine months ended September 30, 2021, compared to $391 million in the prior year period. Adjusted Operating Income margin was 8.3% for the nine months ended September 30, 2021, compared to 4.4% in the prior year period. Depreciation and amortization expense totaled $583 million, an increase from $556 million in the prior year period.

Interest expense for the nine months ended September 30, 2021 totaled $114 million, as compared to $125 million in the prior year period.

Tax expense for the nine months ended September 30, 2021 was $101 million, resulting in an effective tax rate of approximately 12%. Tax benefit in the prior year period was $6 million, resulting in an effective tax rate of nil.

The Company generated net cash flow from operating activities of $553 million in the nine months ended September 30, 2021, compared to $614 million in the prior year period. As of September 30, 2021, the Company had cash and cash equivalents of $2.7 billion and total available liquidity of $5.3 billion.

Reconciliations of Adjusted Revenue Growth, Adjusted Net Income, Adjusted Net Income Per Share, Adjusted Operating Income, Adjusted EBITDA and Cash Flow Before Financing, which are non-GAAP measures, to the most directly comparable financial measures, respectively, calculated and presented in accordance with accounting principles generally accepted in the United States (“GAAP”) are provided in the attached supplemental schedules.

Full Year 2021 Outlook

The Company’s full year 2021 financial guidance is as follows:

(1) The Company’s full year 2021 financial guidance includes approximately $0.80 per diluted share for the anticipated equity losses to be recognized by Aptiv from the performance of the Motional autonomous driving joint venture.

Conference Call and Webcast

The Company will host a conference call to discuss these results at 8:00 a.m. (ET) today, which is accessible by dialing +1.866.548.4713 (U.S.) or +1.323.794.2093 (international) or through a webcast at ir.aptiv.com. The conference ID number is 7839365. A slide presentation will accompany the prepared remarks and has been posted on the investor relations section of the Company’s website. A replay will be available two hours following the conference call.

Use of Non-GAAP Financial Information

This press release contains information about Aptiv’s financial results which are not presented in accordance with GAAP. Specifically, Adjusted Revenue Growth, Adjusted Operating Income, Adjusted EBITDA, Adjusted Net Income, Adjusted Net Income Per Share and Cash Flow Before Financing are non-GAAP financial measures. Adjusted Revenue Growth represents the year-over-year change in reported net sales relative to the comparable period, excluding the impact on net sales from currency exchange, commodity movements and divestitures. Adjusted Operating Income represents net income before interest expense, other income (expense), net, income tax (expense) benefit, equity income (loss), net of tax, restructuring, other acquisition and portfolio project costs, asset impairments, gains (losses) on business divestitures and other transactions and deferred compensation related to acquisitions. Other acquisition and portfolio project costs include costs incurred to integrate acquired businesses and to plan and execute product portfolio transformation actions, including business and product acquisitions and divestitures. Adjusted Operating Income margin is defined as Adjusted Operating Income as a percentage of net sales. Adjusted EBITDA represents net income before depreciation and amortization (including asset impairments), interest expense, income tax (expense) benefit, other income (expense), net, equity income (loss), net of tax, restructuring and other special items.

Adjusted Net Income represents net income attributable to Aptiv before restructuring and other special items, including the tax impact thereon. Adjusted Net Income Per Share represents Adjusted Net Income divided by the Adjusted Weighted Average Number of Diluted Shares Outstanding for the period. The Adjusted Weighted Average Number of Diluted Shares Outstanding assumes the application of the if-converted method of share dilution, if not already applied for GAAP purposes of calculating the weighted average number of diluted shares outstanding. Cash Flow Before Financing represents cash provided by operating activities plus cash provided by (used in) investing activities, adjusted for the purchase price of business acquisitions and net proceeds from the divestiture of other significant businesses.

Management believes the non-GAAP financial measures used in this press release are useful to both management and investors in their analysis of the Company’s financial position, results of operations and liquidity. In particular, management believes Adjusted Revenue Growth, Adjusted Operating Income, Adjusted EBITDA, Adjusted Net Income, Adjusted Net Income Per Share and Cash Flow Before Financing are useful measures in assessing the Company’s ongoing financial performance that, when reconciled to the corresponding GAAP measure, provide improved comparability between periods through the exclusion of certain items that management believes are not indicative of the Company’s core operating performance and that may obscure underlying business results and trends. Management also uses these non-GAAP financial measures for internal planning and forecasting purposes.

Such non-GAAP financial measures are reconciled to the most directly comparable GAAP financial measures in the attached supplemental schedules at the end of this press release. Non-GAAP measures should not be considered in isolation or as a substitute for our reported results prepared in accordance with GAAP and, as calculated, may not be comparable to other similarly titled measures of other companies.

About Aptiv

Aptiv is a global technology company that develops safer, greener and more connected solutions enabling a more sustainable future of mobility. Visit aptiv.com.