Delphi Automotive 4Q15 Earnings Call Notes

Delphi Automotive Plc (DLPH) Q4 2015 Results
Kevin P. Clark – President, CEO, Chief Operating Officer & Director

Chinese volumes whipsawed

“However, operating margins lagged the prior year, primarily the result of the sequential whipsaw in China volumes. You probably recall that in response to the third quarter slowdown in China, we actually reduced head count by about 4,000 employees. And then had to add back over 6,000 employees to meet the 40% sequential increase in volumes that we experienced in the fourth quarter.”

Continue to expect solid growth in global vehicle production

“We continue to expect solid growth in global vehicle production, primarily driven by strong growth in China, North America, and Western Europe.”

The pool of opportunities is higher in 2016

“the pool of opportunities is actually higher. So the amount of activity that remains out there is actually higher than what it was in 2015, which is certainly a positive sign. So we would expect from a booking standpoint to come in roughly in line with what we booked in 2015 from a total new business bookings standpoint.”

Opportunities are in active safety, electrification

“The big opportunities tend to be around, as you can guess, active safety. We’re seeing a big ramp-up in demand – off of a small number obviously – on vehicle electrification, including things like 48-volt, as well as a fair amount of activity on our traditional powertrain products like GDi, Gas Direct Injection. So very good. Great deal of opportunity out there.”

4-5x content on a 48 volt hybrid than on a traditional car

“We’re starting to see more demand, more of a ramp-up in vehicle electrification, including things like 48-volt. Those are very good for us. So 48-volt hybrid content is four times to five times the content that we have on a traditional car. Full EV is seven times the content. 48-volt is an area that – quite frankly a product that we’ll be talking more with folks like yourself about at our investor conference in April.”

We see no change in production schedules from OEMs

“listen we’ve – again we understand the concern that people in the investment community have with respect to where we are in the cycle and what production schedules look like. We see none. I mean we’ve seen absolutely no change in production schedules from when we gave guidance originally a month ago, as well as what our outlook was in the fourth quarter of last year as it relates to 2016. So we’ve seen no change.”

Watching non-traditional competitors closely

“Yeah. No, it’s – listen, it’s something that we always think about. To date it’s not as direct a competition in terms of space or places that we compete. So it hasn’t had an effect. And it’s something we watch closely. I mean the Chevy Volt is a great example. I mean that’s a car where we have close to $400 of content. So we have a pretty good position from a vehicle standpoint. But it’s something we monitor very closely.”