Strong Bookings and Record Revenue
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Aptiv PLC (NYSE: APTV), a global technology company focused on making mobility safer, greener and more connected, today reported first quarter 2023 U.S. GAAP earnings of $0.54 per diluted share. Excluding special items, first quarter earnings totaled $0.91 per diluted share.
First Quarter Financial Highlights Include :
- U.S. GAAP revenue of $4.8 billion, an increase of 15%
- Revenue increased 15% adjusted for currency exchange, commodity movements and acquisitions; growth over market of 6% based on AWM1 of 9%
- U.S. GAAP net income of $146 million, diluted earnings per share of $0.54
- Excluding special items, diluted earnings per share of $0.91
- U.S. GAAP operating income margin of 7.2%
- Adjusted Operating Income margin of 9.1%, Adjusted Operating Income of $437 million; Adjusted EBITDA margin of 12.3%; Adjusted EBITDA of $594 million
- Returned $70 million to shareholders through share repurchases
"We had a strong start to the year with record revenue and near-record bookings in the first quarter, underscoring Aptiv's increasing competitive differentiation and strategic value to our customers as the industry transitions further towards the fully-electrified, software-defined vehicle," said Kevin Clark, chairman and chief executive officer. "Bolstered by our recent acquisitions of Wind River and Intercable Automotive, we continue to gain commercial traction across our portfolio, particularly in our Smart Vehicle ArchitectureTM and high voltage platforms. Combined with our relentless focus on execution and operational excellence, we remain confident in our ability to deliver on our outlook for 2023."
1 Represents global vehicle production weighted to the geographic regions in which the Company generates its revenue ("AWM").
First Quarter 2023 Results
For the three months ended March 31, 2023, the Company reported U.S. GAAP revenue of $4.8 billion, an increase of 15% from the prior year period. Adjusted for currency exchange, commodity movements and acquisitions, revenue increased by 15% in the first quarter. This reflects growth of 24% in Europe, 14% in North America, 7% in Asia, which includes an increase of 2% in China, and 11% in South America, our smallest region.
The Company reported first quarter 2023 U.S. GAAP net income of $146 million and earnings of $0.54 per diluted share, compared to $73 million and $0.27 per diluted share in the prior year period. First quarter Adjusted Net Income, a non-GAAP financial measure defined below, totaled $258 million, or earnings of $0.91 per diluted share, compared to $180 million, or $0.63 per diluted share, in the prior year period.
First quarter Adjusted Operating Income, a non-GAAP financial measure defined below, was $437 million, compared to $324 million in the prior year period. Adjusted Operating Income margin was 9.1%, compared to 7.8% in the prior year period, reflecting our revenue growth over market of 6%, increased global vehicle production, pricing and the results from our recent acquisitions. Depreciation and amortization expense totaled $216 million, an increase from $191 million in the prior year period.
Interest expense for the first quarter totaled $67 million, an increase from $43 million in the prior year period, which primarily reflects impacts from our $2.5 billion debt issuance in the middle of the first quarter of 2022 in anticipation of the Wind River Systems, Inc. acquisition.
Tax expense in the first quarter of 2023 was $34 million, resulting in an effective tax rate of approximately 12%. Tax expense in the first quarter of 2022 was $21 million, resulting in an effective tax rate of approximately 12%.
Net cash flow used in operating activities totaled $9 million in the first quarter, compared to $202 million in the prior year period. As of March 31, 2023, the Company had cash and cash equivalents of $1.1 billion and total available liquidity of $3.6 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.
Share Repurchase Program
During the first quarter of 2023, the Company repurchased 0.6 million shares for approximately $70 million, leaving approximately $1.9 billion available for future share repurchases. All repurchased shares were retired.
Full Year 2023 Outlook
The Company's full year 2023 financial guidance is as follows:
(in millions, except per share amounts) | Full Year 2023 |
Net sales | $18,700 - $19,300 |
Adjusted EBITDA | $2,585 - $2,745 |
Adjusted EBITDA margin | 13.8% - 14.2% |
Adjusted operating income | $1,920 - $2,080 |
Adjusted operating income margin | 10.3% - 10.8% |
Adjusted net income per share (1) | $4.00 - $4.50 |
Cash flow from operations | $1,900 |
Capital expenditures | $950 |
Adjusted effective tax rate | ~14.5% |
(1) The Company's full year 2023 financial guidance includes approximately $1.10 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 +1.800.239.9838 (U.S.) or +1.323.794.2577 (international) or through a webcast at ir.aptiv.com. The conference ID number is 1161786. 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, acquisitions, divestitures and other transactions. Adjusted Operating Income represents net income before interest expense, other income (expense), net, income tax (expense) benefit, equity income (loss), net of tax, amortization, restructuring, other acquisition and portfolio project costs (which includes costs incurred to integrate acquired businesses and to plan and execute product portfolio transformation actions, including business and product acquisitions and divestitures), asset impairments and other related charges, compensation expense related to acquisitions and gains (losses) on business divestitures and other transactions. 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 amortization, 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 (used in) operating activities plus cash provided by (used in) investing activities, adjusted for the purchase price of business acquisitions and other transactions, the cost of significant technology investments and net proceeds from the divestiture of discontinued operations and 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.
Forward-Looking Statements
This press release, as well as other statements made by Aptiv PLC (the "Company"), contain forward-looking statements that reflect, when made, the Company's current views with respect to current events, certain investments and acquisitions and financial performance. Such forward-looking statements are subject to many risks, uncertainties and factors relating to the Company's operations and business environment, which may cause the actual results of the Company to be materially different from any future results. All statements that address future operating, financial or business performance or the Company's strategies or expectations are forward-looking statements. Factors that could cause actual results to differ materially from these forward-looking statements include, but are not limited to, the following: global and regional economic conditions, including conditions affecting the credit market; global inflationary pressures; uncertainties posed by the COVID-19 pandemic and the difficulty in predicting its future course and its impact on the global economy and the Company's future operations; uncertainties created by the conflict between Ukraine and Russia, and its impacts to the European and global economies and our operations in each country; fluctuations in interest rates and foreign currency exchange rates; the cyclical nature of global automotive sales and production; the potential disruptions in the supply of and changes in the competitive environment for raw material and other components integral to the Company's products, including the ongoing semiconductor supply shortage; the Company's ability to maintain contracts that are critical to its operations; potential changes to beneficial free trade laws and regulations such as the United States-Mexico-Canada Agreement; changes to tax laws; the ability of the Company to integrate and realize the expected benefits of recent transactions; the ability of the Company to attract, motivate and/or retain key executives; the ability of the Company to avoid or continue to operate during a strike, or partial work stoppage or slow down by any of its unionized employees or those of its principal customers; and the ability of the Company to attract and retain customers. Additional factors are discussed under the captions "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the Company's filings with the Securities and Exchange Commission. New risks and uncertainties arise from time to time, and it is impossible for us to predict these events or how they may affect the Company. It should be remembered that the price of the ordinary shares and any income from them can go down as well as up. The Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events and/or otherwise, except as may be required by law.