Good day and welcome to the Aptiv First Quarter 2021 Earnings Conference Call. My name is Anna, and I will be your conference operator today. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. Thank you. Elena Rosman, Aptiv's Vice President of Investor Relations, you may begin your conference.

Thank you, Anna. Good morning and thank you to everyone for joining Aptiv's first quarter 2021 earnings conference call. The press release and related table along with this live presentation can be found on the investor relations portion of our website at ir.aptiv.com. Today's review of our financials excludes restructuring and other special items and will address the continuing operations of Aptiv. The reconciliation between GAAP and non-GAAP measures for both our Q1 financials as well our full-year 2021 outlook are included at the back of today's presentation and the earnings press release. During today’s call we will be providing certain forward-looking statements, which reflect Aptiv's current view of future financial performance and maybe materially different from our actual performance for reasons that we cite in our Form 10-K and other SEC filings, including uncertainties posed by the COVID-19 pandemic and the difficulty in predicting its future course and impact on the global economy. Joining us today will be Kevin Clark, Aptiv's President and CEO, and Joe Massaro, CFO and Senior Vice President of Business Operations. Kevin will provide a strategic update on the business, and then Joe will cover the financials results in more detail before we open the call to Q&A. With that, I would like to turn the call over to Kevin Clark.

Thank you Elena and thank you everyone for joining us this morning. Beginning with slide 3, we had a strong start to the year reflecting our ability to outperform in a challenging environment. Our focus on execution translated into stronger revenues and earnings in the quarter. Revenues totaled $4 billion that's up 20% from the prior year, driven by our industry leading portfolio safe green and connected technologies. Operating income reached $437 million, reflecting margins of 10.9% an increase the 370 basis points from the prior year, and earnings per share totaled $1.06 an increase of 56%. The results of strong revenue growth, partially offset by labor inefficiencies, and increased premium freight costs associated with a growing number of supply chain disruptions. The 5% growth in global vehicle production was principally driven by a 72% increase in China, lapping the impact of last year's pandemic related shutdowns partially offset by a decline in vehicle production of 4% in North America, and 1% in Europe as OEM customers idle plants in response to the tightening of the global supply chain. For the balance of the year, we expect the supply chain to remain stressed in the near term volatility and production schedules to actually increase. However, the Aptiv team is doing an excellent job executing in this very fluid environment, minimizing the effects of the supply chain disruptions, and keeping our employees safe while delivering for our OEM customers. Turning to slide 4, this year supply chain disruptions have been further exacerbated by severe weather in the South-western United States, and a facility fire at one of the industry's major chip suppliers in Japan. As a result, we continue to experience volatility and production schedules, elevated freight and logistics expenses and higher raw material input prices, as the industry struggles to…

Thanks, Kevin. And good morning, everyone. Starting with slide 9, the recovering momentum in the first quarter generating strong sales, income and cash performance despite the supply chain constraints Kevin referenced earlier. Revenues of $4 billion were up 20% 15% ahead of vehicle reduction which was up 5% on our weighted market basis. Adjusted EBITDA and operating income were $630 million and $437 million respectively, reflecting stronger volumes and discipline cost management, partially offset by approximately $70 million of COVID and supply chain related costs. Earnings per share in the quarter were $1.06, reflecting higher operating income, offset by the Motional JV results and higher share count and tax expense. Operating cash flow is strong at $252 million driven by higher EBITDA while CapEx was $134 million. Looking at first quarter revenue in more detail on slide 10, broad demand recovery in some inventory, restocking and our engineered components businesses contributed to strong growth over market and every region. We also had favorable FX in commodities partially offset by price down to approximately 1% a quarter. From a regional perspective, North America revenues were up 5% representing nine points of growth over market driven by new launch volume, and favorable truck and SUV platform mix. In Europe, the trend of strong double digit market outgrowth continued with further adoption of our high voltage electrification and active safety solutions. Lastly, in China, revenues grew by 94%, reflecting 22 points of growth over market, as the volume recovery led to production upside and inventory replenishment with our major customers. As a reminder, China operations were shut down between late January and March of last year. Moving to the segments on the next slide. Advanced Safety & User Experience revenues increased 11% in the quarter, reflecting six points of growth over underlying vehicle…

Thanks, Joe. Let's wrap up on slide 14 before opening it up for questions. As we navigate the road ahead, and we're closely monitoring the current environment, including the pace of economic recovery and the on-going disruptions in the supply chain. That said, our portfolio of advanced technologies continues to outgrow the market, while world class talent leading class structure and strong track record of execution positions us to lead the industry forward in this recovery. Our performance is a direct result of our strong cultural foundation built on the values of thinking and acting like owners. And we remain laser focused on delivering on our commitments to our customers, to our shareholders and to our employees, while advancing our mission to create a more sustainable business and environment. Aptiv’s industry leading portfolio is enabling a more efficient and accelerated path to the electrified software defined vehicle now demanded by consumers and required by our customers and we're helping to create a safer, greener and more connected world as we advance our path to carbon neutral operations and products by 2040. At Aptiv, we're moving forward with purpose as a company with a strong financial position, and the flexibility to reinvest in our people, and our technology portfolio, to create significant value for all of our stakeholders. Thank you again for your time. Let's open up the line for questions.

Thank you.[Operator Instructions]. We will take our first question from Joseph Spak of RBC Capital Markets. Please go ahead.

Thank you. Good morning, everyone. Kevin and Joe, I know you weren't sort of, giving quarterly guidance because of all the uncertainty. But it does sound like maybe the first quarter came in stronger than you had planned. And obviously some strong performance in the growth drivers of high voltage and active safety and related margin performance. I guess what I'm what I'm trying to better understand in the context of your reiterating guidance’s, is this sort of a cadence issue? And you were sort of unclear about how things will or when things will come in? Or is there also a little bit more level of caution, given some of the volatile uncertain schedules he talked about, and maybe some higher costs on [Indiscernible] raid that you pointed to.

Yes, maybe Joe I’ll start and Joe can walk you through more of the details. Q1 was a strong quarter, without a doubt, you know, very, very volatile environment. And based on what we have visibility to today, Q2 will be even more volatile than Q1. And operating in that environment, presents challenges. Now, we're confident from an operational standpoint, we're buttoned down and we're operating well over confident that we'll continue to operate at a high level as we head into Q2. But again, it'll be choppy as we look at some of the challenges and disruptions in the supply chain. Our focus is on ensuring that our customers get the parts they need to produce the vehicles that they're trying to produce the consumers want. And based on our forward visibility as we look into Q3 and Q4, all of our customers are very committed to producing the vehicles that they were unable to produce in Q1 and Q2 and Q3 and Q4. And we're all working very actively across the supply chain from the semiconductor providers to the resin providers all the way through the supply chain. To the customers and in a tough environment we're operating reasonably well. But again, it's challenging. It's requiring incremental resources, incremental costs, from a day-to-day management standpoint, in our factories, as well as from, from a transportation and logistics standpoint, incremental engineering resources to make sure that we provide our customers with options or incremental flexibility to the extent we see parts shortages that we provide, provide them with additional opportunities. And, Q1 when you really look at Q1, a big portion of the outgrowth and Joe talk about it is some element of restocking of the overall supply chain in areas like cable management products, as well as connectors, which certainly drive some benefit in the first half of the year. But that would be my voiceover in terms of how we view the environment as well as how we perform, Joe, you can provide more, more visibility.

Yes, no, obviously, I agree with everything Kevin said. I did mention Joe, a couple of times in my prepared comments around, just the replenishment within the connector side of the business and Hellermanntyton we were expecting that over the course of the year. I think as we look at it right now, it's to your cadence comment coming, certainly looks like it's coming in the first half of the year. That's going to be worth a few points of growth in the first half of the year versus, versus the back half. Again, it's good business, it's the tears replenishing, it's the distribution channels replenishing and we had expected it in the year. So it's more of a sort of when it when it's happening. And then also, as Kevin mentioned, we're seeing increased volatility in Q2, the original chip disruption or supply chain constraints that were sort of what I'll call sort of COVID demand related, those are starting to ebb down in Q2, as we expected, but the impact of the Naka Fire and the Texas weather on Q2 unit production will, at least based on what we're seeing right now, could certainly be as big from a number of units perspective for the industry as the original disruption. And obviously, all of that's coming in Q2. So we're just mindful of how much production the industry can get through and keep tuned, still confidence be made up in the back half of the year, but obviously have a fair amount of volatility we're managing through here over the next three to four months.

But I think it's fair to say one thing, I think if Joe and I were to bat, we would say Q2 disruption is bigger than Q1 disruption based on availability of semiconductor parts associated with that. The web, the challenges with the weather down in South West U.S. as well as that Naka Fire.

Thanks for -- thanks for all that. The second question, I guess it just dawned on the cash here and the 2.8 billion, you're effectively pointing to another billion in free cash over the next few quarters. I know, back when you raised some capital a year ago, you wanted a little bit of a war chest to speak. And you can time the M&A but it appears that war chest is going to get quite large. So any updated thoughts that are on either buybacks or other uses of that cash?

Our primary focus remains deployment for M&A, Joe. We're working at it, that pipeline's coming back strong. Obviously, there's, some, some challenges from a travel perspective and meeting perspective around remaining COVID restrictions, particularly outside of the U.S., but continue to believe over the course of the course of the year, that that's where that cash gets utilized.

Joe, it's important to note that, post COVID the reality all the trends that we've talked about safe green connected, have actually accelerated. Demand for high voltage solutions, we talked in our prior call about high voltage pursuits increasing over the last couple of years from, 10 to 15 to in the range of 50. We're up north of 100 now, so there's tremendous opportunity for us to invest organically or via acquisition. And there are a number of areas that Joe and the M&A team are focused or focused on in and around advancing technologies to support the growth in high voltage electrification as well as to support increased, increased needs for software in areas like a ADAS, user experience, and smart vehicle architecture. So there are a number of opportunities to deploy that capital in a real smart way.

Okay, thanks for all that color.

Thank you. Our next question comes from Rod Lache of Wolfe Research. Please go ahead.

Good morning, everybody. Well, I understand the there's a lot of volatility here replenishment in the first quarter volatility in the second quarter was hoping you might be able to just take us out a little bit, maybe into the back half or into next year. And speak to whether there are any kind of long term consequences from what you're seeing right now, either in terms of growth over market, or cost for Aptiv’s people or your customers. Do you think shifting towards a higher mix of vehicles, delaying launches or doing anything that would affect you longer term?

Yes, Rod. It's Kevin, I'll start, we have a, we'll start with a view that that, over the medium term, you're going to continue to see supply change, tightness. Certainly, from a semiconductor standpoint, as well as in others, like resin that will continue through 2022 that will continue. From an overall demand standpoint, consumer demand as you know is very, very strong, which certainly creates significant amount of customer demand or customer pull for Aptiv. That demand is in around the areas where we play, right. It's about accelerated electrification, increased demand for products, like ADAS or ADAS solutions, more demand for connectivity solutions, all of which are places that we play. A much significant driver increase from our customers and software defined vehicle solutions. So pull for smart vehicle architecture. So as we take a step back, and we look at consumer demands, positive customer polls, strong supply chain challenge, but we'll work through that. And, today we're operating, I think we have 16 product redesign programs that we're going through providing our customers with either alternative choices, from a, from a product availability standpoint, or cost reduction opportunities that we review with the team on a daily basis. So we think that's something that we'll manage through reasonably well. From a customer standpoint, on top of the strong consumer poll, all of our customers are focused on building their most profitable, most highly contented vehicles. So a portion of the benefit that we saw in Q1 and I'd expect we'd see in Q2 is is pulled for, more advanced ADAS solutions, more high voltage, electrification, all those things that consumers want, which is a very strong tailwind. So, as we sit here today, like everyone, we, we struggle day to day to deal with the supply chain challenges. We're operating extremely well. We're dealing with some very well. We're putting in the processes or, or have the processes in place to offset that. But the underlying trend or demand for the areas that we play, we'd actually say has accelerated post COVID. And this whole semiconductor issue probably further accelerates the fact or the demand for the areas that we play.

Thanks for that. And just secondly, we're seeing so many automakers now, talking actively about the things that you guys have been talking about for 10 years with respect to software defined capability and in architectures. But they're also increasingly talking about taking control of software competency and house, you're hearing that from Ford with the FNV for GM is hiring 5000 engineers, Volkswagens head of software said that they're going to go from 10% of the software value adding a car to theirs aspiring to 60%. Are you from where you sit, seeing the same thing? And do you do you think that has any implications for you in terms of the software value add that you're delivering?

Listen, in some areas, we are in some areas, we're not in. And -- our we're focused on developing solutions that ultimately integrate in that full SVA concept that you said we've been talking about for a number of years, which provides us with software content opportunities, integration, content, opportunities and hardware content opportunities, and I will focus is on ensuring we provide our customers with whatever they want, all of it or part of it. And we know there are a lot of OEM customers, we're talking about increasing their investment in software, for a number of them that will make sense. For a lot of them, they will have challenges executing on that. And, we're really focused on ensuring that we're there to help. And there are others who have, frankly, don't view it as a core competency and will and will outsource it. So it doesn't our view on our strategy. We think it validates what we've been talking about and the need for the competencies that a company like our ours has, and it's an area that we'll continue to aggressively invest in. And you've seen, the poll as it relates to bookings in areas like advanced ADAS solutions, user experience, high voltage electrification. So we continue to view it as an opportunity. It's reflected in the six to eight points of, outgrowth that Joe's been talking about.

Yes, that's a good point that we're seeing it in the bookings. Thanks for that.

Thank you. Our next question comes from Chris McNally of Evercore. Please go ahead.

Thanks so much, Team. I want to ask two questions specifically about just the high voltage and EV business. So the first one is around some market share math, and I know he won't be able to 100% confirmed. So maybe just more. Tell me if I'm crazy about the math, but I'm just going to lay out. So you won about 900 million in awards Q1. We don't know where that will end the full year, but maybe that's 3 billion plus you've been running this 2 billion plus range. And I calculated on 2025. Maybe the industry is something like 8 billion to 9 billion awards. Currently looking at 2025, EV number is 500 to 600 hours of content per vehicle. That would mean that you could have a share in the 40% range, which would be sort of above your traditional electrical architecture, but not sort of out of the realm of possibility. So does that math is anything wildly off in sort of the calculations?

Yes, I'm not sure if we've looked at it that way. Joe, can comment on it? I think working backward at a high level, right? The industry is committed to spend about $300 billion investing in creating or developing high voltage electrification platforms or vehicles. Correct. I mean, you've seen the announcements from GM $20 billion to deliver 30 new EVs. There was a recent BCG study that talks about 50% of vehicle production will be high voltage by 2026, which is a significant, significantly, higher percentage than what was predicted just a year ago. Certainly, there's a tremendous tailwind for high voltage electrification. OEMs have reached the point where they've, they've made the choice between internal combustion engine and high voltage, your battery electric vehicles, and they've chosen the ladder, and there's a significant investment in that area. And it's a huge opportunity for us. I mentioned, just a few years ago, we're pursuing 10 to 15 programs per year. This year we'll be pursuing, somewhere between 75 and 100 programs. And when you look at our historic win rate, which is north of kind of 60%, 65%, and you look at our core capabilities, and what we're able to bring in terms of a full system solution, the opportunity is significant.

Yes, Chris, I mean -- like Kevin said, we haven't put it back into the math the way you just did, but qualitatively, we've got that business has one out of three and a half, content on one of -- one out of three and a half vehicles manufactured today on the low voltage side, right. So we do play at very high level from a, capability and customer share perspective. And then when you add on top of that, I think one of the advantages we have for customers in high voltage, is we're able to meet very high volume requirements very quickly, just given the scale of, of signal and power solutions, so we can get off, get out of the dates get out of the gates very quickly, you're seeing volumes ramp. I mean, we had our high voltage business with some of the launches, it grew 125% in Q1. Now, obviously, that's a very strong quarter. But, you're really looking at the quality of the launches in Europe and China, the quantity and quality of the launches. And I think the other thing that's, one of the one of the read throughs here is that will always have to make decisions around which vehicles to build given the supply chain constraints. They're focusing in North America on truck and SUVs, but certainly in Europe, they're continuing to focus on EVs. So, again, we're at a, we've got a very strong market position and low voltage space would expect that certainly at least be the starting point for our highest high voltage business over time and to be able to grow from there.

Great, and it's super helpful. And then the second quick question, just on the growth rate for this year. Correct me if I'm wrong, maybe I just set up an old projection, but I think you were targeting roughly 55% or 60%, high voltage growth for the year, until you mentioned the 125% in Q1, typically, the seasonality isn't weighted too much. If, if anything, we're going to get a second half push from both Europe and production looking at some of the major EV platforms. Is there some upward pressure to that, to that 55% to 60% for the full year, assuming even, a chip shortages continue.

Listen, I think we're going to stay away from sort of the details on the back half, just until when, as we mentioned, the volatility settles down. We're obviously remain confident in the full year outlook, including the 55% to 60% growth from on high voltage and that certainly acknowledged Q1 is a good start in that direction. But we're going to stay away until we get the dust settles here, but hopefully over the coming out over the coming quarter.

Okay, great, thank you.

Our next question comes from Mark Delaney of Goldman Sachs. Please go ahead.

Yes, good morning, and thanks very much for taking the questions. There's been an increase in auto OEM announcements recently about plans to bring new ADAS platforms to market. And I think after this ADAS business, if I'm remembering correctly, is north of a billion dollars of revenue already and has been growing quickly. But maybe you could elaborate on what the company's seen in terms of the design and pipeline opportunity with ADAS and what you're expecting for future growth in that business?

Yes, demand for ADAS continues, right? You're going to see, just a few years ago, 50% of global vehicle production had an ADAS, ADAS system on it. I think today we're at about 35%. We're at about 65% deal I'm sorry. And then in a few years, it'll be 75% or more regulations driving other requirement for ADAS especially in places like Europe, endcaps driving the demand for ADAS Solutions in North America, Europe, as well as China. It's a, whether it's an option, or it's a standard, it's a product or a solution, which helps OEM sell cars one, and two, it's typically a pretty profitable option. So they get, they get price and margin for it. Consumers demanded, if you're in a car with an Advanced ADAS Solution, there's no way you're going backwards. So rebuy rates, I think are up north of 95% and ADAS demand continues to be strong. I think our outlook this year is ADAS will grow roughly 35% on a year-over-year basis, market growth is about half of that. But market growth will continue to be extremely strong. And we're well positioned, based on our history and market position in ADAS to continue to grow well over market in the space.

That's helpful. Thanks. And then my follow up question was about the company's commitment, so that it made today to CO2 reduction. And thank you for what the company is doing on that front. I recognize the cost of clean energy is falling, and you can actually be cheaper than traditional fuel sources. But you think about meeting these objectives that you articulated today, is there any change we should be expecting in terms of the financial model and what sort of margins the company may be able to operate at? Thanks.

Well Mark, it’s Joe. I mean we're obviously feel comfortable achieving these targets within the existing framework. I mean, we really, taking, taking these targets in the process to achieve them and really internalize them. We treat them very much like any other sort of performance target that we have in the business and if added it to, really the list of things that needs to be balanced to hit the financial framework and we feel comfortable, we'll be able to do that.

Thank you.

Thank you. Next question comes from Emmanuel Rosner of Deutsche Bank. Please go ahead.

Hi, good morning, everyone.

Good morning.

I was hoping to put a finer point around your growth over market outlook. So I think maintain that six points for the full year obviously you had an extremely strong start with some things like, refilling of stocks and all this, but just generally feels like, as you said, throughout this call, a lot of automakers are prioritizing a lot of the vehicles that have more content. And so can you just talk about the puts and take around the growth of our markets for the full year still at six points, that's still towards the lower end of your normal framework? And why, if there's any upside risk to this?

Yes, well, Emmanuel, we're going to stay away until till really dust settles in a year from, refining the full year outlook, and, obviously remain very comfortable hitting, hitting that original guidance from January. As I mentioned, we are seeing some channel replenishment within the engineering components, businesses, both tiers on the auto side, as well as on the industrial side of the businesses, the channel, the channel partners. I think first half versus second half, I'd call that probably, call that three to four points of growth moving from, in the first half that won't repeat. I you know, to us, it's really we expected it to happen in the full year, we'd sort of assume maybe back half, but as all things sort of bounce back related, they seem to be happening faster than faster than original expectations. There's a bit of a couple points in the first half that are from what I'll call the mix, the heavy content mix, as customers have to make choices around with vehicles to manufacture, they're leaning towards the trucks and SUV, the EVs, as I mentioned. Right now, the assumption is, and again, we just don't have the updated schedules to revive these, we're still I think as you work back to the, to the full year 6%, you'd think through, maybe there was down, the mix, goes back to a bit more of a normalized mix in the back half of the year. So there's a couple things like that. It was an overall, I mean, remember that 6% to 8% for us as a long term outlook or committed to that for the next number of years. And, obviously feel very confident with it both within from a 2021 context as well as well as an audio perspective.

Okay, that's helpful color. Second question is about promotional and in particular, your partnership with Lyft. Can you update us on the status, sort of the next milestones, obviously over the last few weeks or so there was also this announcement of Lyft selling there in a separate autonomous operations to Toyota, but with also the potential some partnership and the robotaxi there as well. So any, any impact on your relationship or these things just to two separate contracts?

Yes, there. It's Kevin. They're two separate activities, our relation most of the emotional team is, is doing a fantastic job. I think you saw the announcement in February of this year, the first driverless testing you're doing in Las Vegas, the selection of the HMG ionic Q5 platform as the next platform that they're going to put their Gen two automated driving platform on. So a battery electric vehicle, a really attractive vehicle from Hyundai. The team could use to march forward. Lyft is a strong partner, we have an agreement with Lyft, where, where they're going to be purchasing vehicles promotional and launching in a second city in the United States in 2023. So, so more to come and it’s a relationship that we really value and we're looking to expand.

Thank you very much.

Thank you.

Our next question comes from David Katz of Jeffries. Please go ahead.

Good morning, everyone. A couple of questions on Signal and Power, first was hoping you could provide some more color on the commodity headwinds in the quarter itself, and maybe how you're thinking about the impact for the balance of the year.

That's Joe, let me I'll certainly start. So yes, listen, I think that, the obviously the, the one of the top of the list is copper. Copper is the prices is up there. We haven't seen these levels from 2011 since 2011. I do think it's important to know we have been here before with copper, right. So there is precedent for how our how it flows through the P&L and how our sort of offset mechanisms work. We're about 80% pass through on copper. So copper increases changes in copper prices, both positive negative pass through to customers. The remaining 20% we had so we're fairly well insulated from copper. We talked about this before, there will be a margin rate impact, as higher copper prices flow through, right, because they flow through the past throw they flow through as revenue on sort of a pass through basis. So you tend to get some margin rate impact. But again, as we as we get through the back half or into the back half of the year and schedule start to start to straight now we'll obviously be updating for macros as well. But that's more margin rate than dollars. Seeing some inflation around things like resin, obviously, we expect some introductory [ph] prices will go up over the course of the back half of the year into next year. Semiconductor probably being more ASUX, I know, your question was SPS. But, at this point, the inflation that we're seeing and expecting I would put into the context of, manageable relative to our sort of broader commercial discussions with customers over the coming year, as well as just our, mechanisms that we have in place to offset costs and find additional efficiencies. So copper, by far the largest, but structurally we're very well positioned to, to mitigate or pass through those increases.

Okay, got it. That's helpful. Thanks, Joe. And then one more follow up on the restocking discussion. I guess, could you just remind us of your distribution exposure, and then I was hoping you could talk about your expectations for kind of underlying CV and industrial market growth. From our vantage point it seems like industry wide connect order books or record levels right now. And understanding the visibility is a bit lower there. But we're just trying to get a sense for kind of the end demand expectations versus the channel fill that's clearly taken place.

Sure, I'll let me start with let me start with CV we're obviously we've got strong growth as a contributor in that, both our industrial and in markets are our contributors to that space. So we're seeing only and if you have the growth rates right there just the CV growth rates continue to be our growth above market continues to be very strong in CV.

Yes, but we were in CV just over 25% in the quarter.

And then and again, that's really driven in part by the SPS business. Obviously, the connection systems business is developing a strong, a strong CV business, as well as some things like infotainment in the ASUX business. As it relates to the distribution channel, a smaller part of our business, it's in the hundreds of millions of dollars, obviously more of an impact in a particular quarter when we restock. That's within SPS. So the Hellermanntyton business as well as our connection systems business does push through those push through distribution. But again, it's framed in the hundreds of millions of dollars type volume, but impactful in the first half of the year, just given the level of given the level of replenishment distribution. And also when we talk about restock, we are seeing increased levels go into the tier ones on the auto side, David so that comment is broadly restocked with the both the tier ones as well as the distribution channels.

Okay, got it. That's helpful. Thank you.

Thank you. Our next question comes from Dan Levy of Credit Suisse. Please go ahead.

Hi, good morning. Thank you. I wanted to say sorry, sorry, if you had mentioned this earlier, but I want to go into the growth of the market in the first quarter, the 15 points. If you could just provide any color by the drivers by region, I assume that I know that there was obviously some lumpiness there but pretty big growth of market in the other regions as well and then give me a sense how much of the benefit you got from partially built vehicles. And then how much of the benefit was mixed in the quarter?

Yes, let me the growth over market we've got we've got laid out in the in the deck, really strong, strong growth over market in and obviously China as we talked about. But you know, all regions showing positive growth 9%, 10% across North America and Europe helped obviously, by the high voltage business held by the engineered components, not just the restock, but also just the strain underlying strength in that business. And again, I would expect, I think as you get to the back half of the year, particularly in China, we'd expect some of that to some of that growth, a remarkable slowdown, as we just start to emerge. China was out very, sort of as the market that first took off post COVID. So had a very strong back half of back half the year last year. As it relates to partial vehicle builds, that's obviously we know they're happening. That's, we have very little to know, to really know, visibility to that. And in most cases, it because we're shipping and they're building and, to the extent that's, a part that we're contributing, obviously that remains and an order for us, but really don't have any type of visibility into sort of, broadly speaking, what that means for the industry realize that, people will comment that there's a lot of, there's a lot of yard holes, yard hole vehicles at this point out there, but really don't necessarily doesn't necessarily flow through to what we're saying.

Okay, great. And then my second question, I just want to follow up on Rob's question earlier in specific to active safety. And I know about it was a month ago or so we saw a headline, Volvo is expanding its collaboration with Nvidia, and I think that's more on the compute side. But clearly, it seems like you have more, automakers trying to do a little more on the active safety side. And I recognize there's multiple ways you can work with customer and, bigger pie rolls may change, but maybe you could just give us a sense of how that dynamic is working out with automakers. And are they taking on the Aptiv face side? Are they taking more of an active role in forming their functionality versus relying on suppliers? And what's the piece that's always going to be with you regardless of whether the automakers themselves want to bring in more functionality and help?

Yes, Dan it’s Kevin. I, listen again, it's all over the place. So it depends on the OEM. And I think you have to start with the first point in terms of the overall market, and penetration rates of active safety is, is increasing significantly, in the fastest growing areas really in and around that L2, L2+. Right, so you have unit growth. And then you also have significant content growth. There are OEMs, who historically have, and some who it's an increased focus now want to be more involved in that, that overall development of the active safety solution, it tends to be today in and around feature development. So how does the vehicle respond to certain particular driving incidents so that they give it a feel of a particular brand, whether it be more aggressive, or less aggressive, aggressive, so most of what we've seen, is in and around the feature side. We have some customers that were doing soup to nuts, the full platform for. We have other customers who were doing the platform, and we're integrating some of the features that they would like to develop. And our Gen two ADAS platform, which is under developed now is going to give OEM customers the ability to do more or less of that, and provide them with tools necessary to actually develop features, if that's if that's something that that we'd like to do and make it easy for us to integrate those into the overall into the overall platform. Is there, the areas that I think it would be more challenging for OEMs to take responsibility for is to your point on the controller side, one, two on the perception system side, whether that be the radar solution, the vision solution, the LIDAR solution. On the sensor fusion side, so taking all those inputs and fusing them and developing the software necessary to how does the vehicle perform and react to those various inputs? I think those would likely be the most challenging areas. But we'll see. I mean, some OEM customers may decide that something that that they want to try. I think there's, as a company that's been in been in this particular area for a very long period of time. It's complex, as you know, it's a safety feature. So it needs to perform 100% of the time. And the benefit of history and experience, I think creates a bit of a headwind as relates to insourcing all that activity,

Great.

But again, our focus is on providing our customers with what it is that they're looking for in driving profitable revenue growth in doing that.

That's helpful. Thank you.

Thank you. Our final question comes from Brian Johnson of Barclays. Please go ahead.

Yes. Good morning, or good afternoon. If you're in Dublin. A different spin on a couple of questions that come up around OEMs more active in technology. This one, though, is about the impact of the chip shortage and what it means for call it a high performance procurement organization. At the OEMs, we had a consultant on a webinar talking about how his firm would be encouraging OEMs to look deep into the supply chain to understand where the chips are coming from that was clearly best practice after Fukushima, but also to begin directed by many more chips. So it raises the question of if one is a built to print, electronic black box manufacturer directed by would be detrimental, to margin? So really two questions one, do you see that trend as well as something you would encourage and being, kind of as you think about your product lines, and especially how you've evolved them towards higher margin software? How would Aptiv fare in that kind of environment?

Yes, that's a great question, Brian. Now, obviously, there's more, there's more semiconductor content going into the car, as you know, and having a good sense for the supply chain and, and capacity within various aspects of the semiconductor supply chain is extremely important. What you're referring to is, you can see a scenario where that works for, things like microcontrollers, where it's a more commodity like, semiconductor product, there's very little customization. It's a fairly standard solution that goes across, multiple areas within the car. When you think about the higher performing areas, like active safety, like radar, like vision systems, obviously, you're talking about a very different map -- better because the engineering activity and the relationship. So obviously, you need to know what capacity in the supply chain looks like architecture that, that we're headed down today. The reality is, as we as we see upward integration is we see domain consolidation. The reality is the number of those microcontrollers that go into the car actually are significantly reduced. Right? You go basically cut out that number in half. So I think there's an element of this activities. I do believe in very supportive, that the OEMs will come with a much more focus on the supply chain, to understand what is supply chain resilience look like? Where is there not only dual validation, but dual capacity available? And how do we continue to minimize risk?

And just as a quick follow on. Is that suppliers, some suppliers in Europe have been blamed by their customers for not handling the chip shortage, would you say Aptiv for an OEM who wants to look further up his or her supply chain? Is that the kind of, service visibility, transparency that you add? And does it actually help your OEM relationships?

Yes, I think it helps our OEM relationships. I think we've fared very well through this challenging environment. I think in reality, unless you were sitting on a year's worth of, of chips, I think it would be hard for anyone in this space not to be impacted by or impact a potential customer. I think that is the reality when you look at the effects of COVID. And you look at demand spikes outside of automotive as well as inside of an automotive. There's an element of the perfect storm, but I think it's important we as an industry, learn from it and make whatever adjustments calibrations that need to be made. And, we certainly have and, we'll continue to improve in areas that we identify whether that's redundancy or different ways of doing business.

Okay, thank you.

Thank you.

Thank you. That concludes today's question-and-answer session. I would now like to turn the call back to Mr. Kevin Clark for any additional or closing remarks.

Great. Thank you very much. Thanks everyone for your time. Just a few closing comments. Just to highlight as it relates to Q1 results and as we talk about the full year. Obviously the business is performing well. Supply chain is obviously and it will continue to be choppy as we head into Q2 and improve as we move in Q3 and Q4. If the cost are increasing in light of the supply chain tightness or they will continue to have, so it will continue through some cost pressure, but we have several initiatives underway to engineer out these engineer out these cost pressure and actually maintain and improve margins. Tailwinds are accelerating in around safe green and connected post COVID, the demand for the solutions that we provide whether it’s high voltage electrification, ADAS connectivity it’s actually accelerating. So that’s certainly a positive. As Joe mentioned, we are highly confident our full year outlook. Again, near term it’s going to be a bit choppy. As we look out here in 2021, we think we are past the multi-year growth which is going to be multi-unit pace as well as content growth based as we see more demand for high voltage electrification, practise safety solutions and vehicle connectivity. So, although challenging environment right now we are extremely excited about the balance of the year as well as the future. So thank you everyone for your time. Have a great day.

Ladies and gentlemen, this concludes today’s conference call. Thank you for your participation. You may now disconnect.