August 8, 2018 Second Quarter 2018 Results · 2018-08-08 · 8 Q2 2018 vs Q2 2017 $ millions Q2 2018 Financial highlights Q2 2017 (pro forma3) Q2 2017 (reported) Revenue Adjusted

Second Quarter

2018 Results

August 8, 2018

2

Forward-looking statementsThis presentation, as well as other statements made by Delphi Technologies PLC (the “Company”), contains

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 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.

3

1. At constant foreign exchange rates, and excludes impact of certain aftermarket revenue retained by former parent

2. Adjusted for restructuring and other special items; see appendix for detail and reconciliation to US GAAP

3. Versus prior year pro-forma results; see appendix for detail and reconciliation to US GAAP

Solid execution, with strong bookings performance

Q2 2018 highlights

Revenue

$1.2 b(+1.1% YoY1)

Operating income2

$156 m(12.7%, up 10bps YoY3)

Earnings per share2

$1.29

$2.3 b of lifetime bookings

across ICE and Electronics

Full year 2018 outlook

narrowed

Robust growth in

Power Electronics and

Commercial Vehicle

Operating cash flow

$164 m $100m share repurchase

authorization

4

Market update

Balanced portfolio for all propulsion systems

Accelerated demand for electrification

Recent industry topics

Uncertainty in global trade, tariffs and Brexit

WLTP in Europe

Continued regulatory driven demand for advanced propulsion solutions

ElectrificationSoftware and controlsInternal combustion

GDi continues to displace diesel and PFi for passenger car

Higher pressure systems for commercial vehicles

Passenger car diesel mix in Europe

Higher commodity prices

5

Bookings update

Booked program lifetime valueAdjusted bookings1 ($ billions)

1. Bookings represent lifetime gross program revenues awarded, based upon expected volumes and pricing adjusted for FX

2. Bookings for Powertrain Segment (OEM) only

Balancing strong demand with disciplined commercial strategy to drive long-term value

$4.7

$6.1$6.7 $7.1

2014 2015 2016 2017 2018 H1

2

2$5.3

Q2

$2.3

Q1

$3.0

2

2

15%CAGR

Remain on track for another year

of record bookings in 2018

Key technologies

Power Electronics

Commercial Vehicle Diesel

Gasoline Direct Injection

Electronics & Software

6

Accelerating momentum in key technologies

Commercial vehicle diesel systemsGasoline fuel systemsPower Electronics

$4.5bH1 2018 lifetime

bookings

6bH1 2018 lifetime

bookings

>$5 b1

lifetime bookings

through H1 2018

>$9 b1,2

lifetime bookings

through H1 2018

~$3 b1,2

lifetime bookings

through 2014

>$5 b1

lifetime bookings

through H1 2018

~$1 b1

lifetime bookings

through 2014

~$1.5 b1

lifetime bookings

through 2014

Investments aligned with long-term growth opportunities

1. Bookings represent lifetime gross program revenues awarded since 2011, based upon expected volumes and pricing adjusted for FX

2. Bookings for GDi only

FinancialReview

8

Q2 2018 vs Q2 2017

Financial highlights$ millions Q2 2018Q2 2017

(pro forma3)

Q2 2017

(reported)

Revenue

Adjusted growth %1

$1,232

1.1%

$1,166

-

$1,187

-

Operating income2

Operating margin %2

$156

12.7%

$147

12.6%

$164

13.8%

Earnings per share2 $1.29 - -

Operating cash flow $164 - -



3. See appendix for reconciliation

1.1% year-on-year adjusted revenue growth

Double-digit growth in key technologies including Power Electronics and commercial vehicle

Primarily offset by softer China sales and lower Aftermarket revenues consistent with commercial strategy

10bps year-on-year adjusted operating margin expansion

Stringent cost control and benefits from prior restructuring

FX tailwinds

Partially offset by unfavorable product mix

Operating cash flow on track with full year outlook

9

Q2 2018 revenue growth


2. GoM = growth over market


Revenue$ millions

Regional growthAdjusted1 year-on-year growth

Growth in key areas of the portfolio offset by lower revenues in China

(3)% GoM2

4% Adj

5% GoM2

2% Adj

(4)% Adj

(12)% GoM2

6% Adj

(2)% GoM2

1.1%1

$1,166

$1,232$31

$52

$(17)

N. America

S. America

Europe

China

3

10

Q2 2018 operating income growth

Operating income1

Financial highlights$ millions



Year-on-year growth driven by continued improvements in operating performance and FX

+10 bps

12.6%12.7%

$147

$14

$9 $3

$156

$(17)

Performance driven by:

Healthy incremental margin performance driven by disciplined cost control

Partially offset by price downs (1.4%), unfavorable mix and higher commodity prices

FX tailwinds primarily due to:

Q2 2018 EUR/USD rate of 1.19 vs 1.10 in Q2 2017

2

11

Powertrain segment highlights

Revenue Operating income2

Financial highlights$ millions $ millions

1. At constant foreign exchange rates



Strong revenue growth in key areas offset by lower light duty diesel and China sales

12.3%12.5%

0%1 (20) bpsRevenue:

Strong year-on-year revenue growth in

>45% growth for Power Electronics

>20% growth for Commercial Vehicle

Passenger car diesel decline of ~15%

GDi decline of ~10% due to lower sales in China

Operating margin:

20 bps year-on-year decline driven by:

Unfavorable mix

Partially offset by operational performance and

FX tailwinds

$1,035 $1,086

Q2 2017 (pro forma ) Q2 20183

$129 $134

Q2 2017 (pro forma ) Q2 20183

12

$18

$22

Q2 2017 (pro forma ) Q2 2018

Aftermarket segment results

Revenue Operating income2

Financial highlights$ millions $ millions




Continued margin expansion, consistent with focused strategy

8.5%

10.2%

(1.0)%1 +170 bpsRevenue:

1% year-on-year adjusted decline

Consistent with strategy to focus on higher

margin products and channels

Lower OES channel offset growth in IAM

channel

Operating margin:

170 bps year-on-year margin expansion driven by commercial strategy and operating performance

Remain on track to deliver full year margin expansion

$212 $215

Q2 2017 (pro forma ) Q2 20183 3

13

Updated 2018 outlook



3. Adjusted for restructuring and other special items


$ millions2018 outlook

except per share amounts 2017 Pro forma4 Updated Prior outlook

Revenue $4,773 $5,000 - $5,100 $5,000 - $5,200

Adjusted growth1 8.5% 2% - 4% 2% - 6%

Operating income2 $569

Operating income margin 11.9% 12.1% - 12.3% 12.3% - 12.5%

Earnings per share3 $4.65 - $4.85 $4.65 - $4.95

Operating cash flow $440 - $480 $440 - $480

Other outlook metrics

Restructuring charges $80-$85m(prior $95-$100m)

One-time separation costs $90-$95m(prior $75-$80m)

Capital expenditures $290-$310m(prior $280-$300m)

EUR/USD $1.18 (prior $1.20)

Adjusted tax rate 16-17% unchanged

Narrowed revenue and EPS ranges, operating cash flow unchanged

Q&A

Appendix

16

Non-GAAP reconciliation: Net income to Adj. op. income

($ millions)

1. Prior to December 4, 2017 separation costs include one-time expenses related to the separation from the Company’s former parent. For periods subsequent to December 4, 2017, these costs include one-time incremental expenses associated with becoming a stand-alone publicly-

traded company.

Adjusted Operating Income is presented as a supplemental measure of the Company's financial performance which management believes is useful to investors in assessing the Company’s ongoing financial performance that, when reconciled to the corresponding U.S. GAAP measure,

provides improved comparability between periods through the exclusion of certain items that management believes are not indicative of the Company’s core operating performance and which may obscure underlying business results and trends. Our management utilizes Adjusted

Operating Income in its financial decision making process to evaluate performance of the Company and for internal reporting, planning and forecasting purposes. Management also utilizes Adjusted Operating Income as the key performance measure of segment income or loss and for

planning and forecasting purposes to allocate resources to our segments, as management also believes this measure is most reflective of the operational profitability or loss of our operating segments. Adjusted Operating Income is defined as net income before interest expense, other

income (expense), net, income tax expense, equity income (loss), net of tax, restructuring, separation costs and asset impairments. Not all companies use identical calculations of Adjusted Operating Income, therefore this presentation may not be comparable to other similarly titled

measures of other companies. The Company's 2018 guidance was determined using a consistent manner and methodology.

Delphi Technologies Q2 2018 Q2 2017

Net income attributable to Delphi Technologies $86 $48

Net income attributable to noncontrolling interest 4 8

Net income $90 $56

Equity (income) loss, net of tax (3) 1

Income tax expense 20 22

Other (income) expense, net (4) -

Interest expense 19 -

Operating income $122 $79

Restructuring 12 66

Separation costs1 21 15

Asset impairments 1 4

Adjusted operating income $156 $164

17

Non-GAAP reconciliation: Segment Adj. operating income

($ millions)


traded company.

Adjusted Operating Income is presented as a supplemental measure of the Company's financial performance which management believes is useful to investors in assessing the Company’s ongoing financial performance that, when reconciled to the corresponding U.S. GAAP measure,

provides improved comparability between periods through the exclusion of certain items that management believes are not indicative of the Company’s core operating performance and which may obscure underlying business results and trends. Our management utilizes Adjusted

Operating Income in its financial decision making process to evaluate performance of the Company and for internal reporting, planning and forecasting purposes. Management also utilizes Adjusted Operating Income as the key performance measure of segment income or loss and for

planning and forecasting purposes to allocate resources to our segments, as management also believes this measure is most reflective of the operational profitability or loss of our operating segments. Adjusted Operating Income is defined as net income before interest expense, other

income (expense), net, income tax expense, equity income (loss), net of tax, restructuring, separation costs and asset impairments. Not all companies use identical calculations of Adjusted Operating Income, therefore this presentation may not be comparable to other similarly titled

measures of other companies. The Company's 2018 guidance was determined using a consistent manner and methodology.

Aftermarket Segment Q2 2018 Q2 2017


Restructuring 1 2



Powertrain Segment Q2 2018 Q2 2017


Restructuring 11 64




18

Non-GAAP reconciliation: Adjusted net income

($ millions, except per share amounts)


traded company.

2. Represents the income tax impacts of the adjustments made for restructuring and other special items by calculating the income tax impact of these items using the appropriate tax rate for the jurisdiction where the charges were incurred.

Adjusted Net Income and Adjusted Net Income Per Share, which are non-GAAP measures, are presented as supplemental measures of the Company's financial performance which management believes are useful to investors in assessing the Company’s ongoing financial performance

that, when reconciled to the corresponding U.S. 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 which may obscure underlying

business results and trends. Management utilizes Adjusted Net Income and Adjusted Net Income Per Share in its financial decision making process to evaluate performance of the Company and for internal reporting, planning and forecasting purposes. Adjusted Net Income is defined as

net income attributable to Delphi Technologies before restructuring and other special items, including the tax impact thereon. Adjusted Net Income Per Share is defined as Adjusted Net Income divided by the weighted average number of diluted shares outstanding for the period. Not all

companies use identical calculations of Adjusted Net Income and Adjusted Net Income Per Share, therefore this presentation may not be comparable to other similarly titled measures of other companies. The Company's 2018 guidance was determined using a consistent manner and

methodology.

Delphi Technologies Q2 2018 Q2 2017

Net income attributable to Delphi Technologies $86 $48

Adjusting items:

Restructuring 12 66



Tax impact of adjusting items2 (5) (13)

Adjusted net income attributable to Delphi Technologies $115 $120

Weighted average number of diluted shares outstanding 89.05 88.61

Diluted net income per share attributable to Delphi Technologies $0.97 $0.54

Adjusted net income per share $1.29 $1.35

19

Pro forma financial schedules($ millions)

1. Results for periods prior to December 4, 2017 prepared on a stand-alone combined basis derived from the former parent’s accounting records and results for periods subsequent to December 4, 2017 are presented on a consolidated basis.

2. Adjustments to present results for the year ended December 31, 2017 on a comparable basis to historical periods, as though the separation did not occur during 2017. Adjustments include: (1) impact of the original equipment services business that remained with the former parent, (2)

incremental costs and inefficiencies associated with being a stand-alone publicly-traded company for periods subsequent to December 4, 2017, and (3) costs associated with the Transition Services Agreement and Contract Manufacturing Services Agreement entered with our former

parent in connection with the separation.

3. Represents results for the year ended December 31, 2017 on a comparable basis to historical periods, as though the separation did not occur during 2017.

4. Adjustments to present results for the year ended December 31, 2017 on a comparable basis to expected future period results. Financial information for periods prior to December 4, 2017 was prepared on a stand-alone combined basis derived from the former parent’s accounting

records and is not necessarily indicative of results that will be achieved as a stand-alone publicly-traded company. Adjustments include: (1) impact of the original equipment services business that remained with the former parent, (2) incremental costs and inefficiencies associated with

being a stand-alone publicly-traded company for periods subsequent to December 4, 2017, and (3) costs associated with the Transition Services Agreement and Contract Manufacturing Services Agreement entered with our former parent in connection with the separation.

Delphi Technologies - Revenue Q1 2017 Q2 2017 Q3 2017 Q4 2017 2017

Revenue Reported1 $1,168 $1,187 $1,205 $1,289 $4,849

Spin-Related Adjustments2 N/A N/A N/A $5 $5

Historical Comparable3 $1,168 $1,187 $1,205 $1,294 $4,854

Pro forma Adjustments4 ($20) ($21) ($20) ($20) ($81)

Revenue Pro forma $1,148 $1,166 $1,185 $1,274 $4,773

Delphi Technologies - Adjusted Operating Income Q1 2017 Q2 2017 Q3 2017 Q4 2017 2017

Adjusted Operating Income1 $162 $164 $147 $164 $637

% to sales 13.9% 13.8% 12.2% 12.7% 13.1%


Historical Comparable3 $162 $164 $147 $168 $641

% to sales 13.9% 13.8% 12.2% 13.0% 13.2%

Pro forma Adjustments4 ($13) ($17) N/A N/A ($72)

Adjusted Operating Income Pro forma $149 $147 N/A N/A $569

% to sales 13.0% 12.6% N/A N/A 11.9%

20










Powertrain Segment - Revenue Q1 2017 Q2 2017 Q3 2017 Q4 2017 2017

Revenue Reported1 $1,023 $1,035 $1,049 $1,115 $4,222

Spin-Related Adjustments2 N/A N/A N/A N/A N/A

Historical Comparable3 $1,023 $1,035 $1,049 $1,115 $4,222

Pro forma Adjustments4 N/A N/A N/A N/A N/A

Revenue Pro forma $1,023 $1,035 $1,049 $1,115 $4,222

Powertrain Segment - Adjusted Operating Income Q1 2017 Q2 2017 Q3 2017 Q4 2017 2017


% to sales 14.7% 13.6% 12.2% 12.8% 13.3%



% to sales 14.7% 13.6% 12.2% 13.1% 13.4%



% to sales 13.8% 12.5% N/A N/A 12.1%

21










Aftermarket Segment - Revenue Q1 2017 Q2 2017 Q3 2017 Q4 2017 2017

Revenue Reported1 $222 $232 $243 $250 $947



Pro forma Adjustments4 ($20) ($21) ($20) ($20) ($81)

Revenue Pro forma $202 $212 $224 $235 $871

Aftermarket Segment - Adjusted Operating Income Q1 2017 Q2 2017 Q3 2017 Q4 2017 2017


% to sales 5.4% 9.9% 7.8% 8.4% 7.9%



% to sales 5.4% 9.9% 7.8% 8.6% 8.0%



% to sales 4.0% 8.5% N/A N/A 6.5%

Documents

August 8, 2018 Second Quarter 2018 Results · 2018-08-08 · 8 Q2 2018 vs Q2 2017 $ millions Q2 2018 Financial highlights Q2 2017 (pro forma3) Q2 2017 (reported) Revenue Adjusted