Aptiv PLC (NYSE:APTV) Q4 2022 Earnings Call Transcript

And, again, some of those disruptions fall heavily into ASUX. So I think to some extent, it’s more than the same. I think what you saw us be able to do this year, which, to some extent, compounds the disruption cost perspective, we were able to come back, run over time, run the businesses hard and push the revenue out at the end of the day, or most of the revenue out at the end of the day. But it’s just an inefficient operating environment. And that’s as part of the guide, again, north of $300 million of disruption costs for 2022. We left about — we certainly don’t think it will be as bad next year, right? We’re hoping for sequential improvement. We’re seeing sequential improvement. But we did leave $180 million of COVID and disruption costs in the P&L for 2023, just to give ourselves some room to continue to deal with this.

Emmanuel Rosner: Okay. That’s helpful color. And then, I guess, as a follow-up, I think one of the ways you, I think, encourage us to look at it, I guess, this upcoming year was, maybe, compare the performance versus the second half of 2022 to the extent that some of the price recoveries and commercial agreement you had with customers who are benefiting you more in the second half of 2022. I guess, what do you feel is sort of like a good clean base in terms of second half margin, for which to build off, as we try to understand your 2023 guidance? And what would sort of like the puts and takes versus that.

Joe Massaro: Yes. I think that’s a good question, and we’ve spent time looking at that. I think the way to think about it, we talked about originally 10% to 10.5%, and then with some of the FX, 9.5% to 10%. So we think about probably 10 as a good jumping off point. I think what you see with — you can — and I think we’ve sort of captured it, quite honestly, within the range of the guide, right? You can sort of — if you look at some of the benefits of pricing, if you look at the reduction in the COVID supply chain cost, you can get up to sort of that, call that, that 10.7%, 10.8% level. You then work down some of the FX and some of the volume changes, which is really how we sort of think about that sort of mid-10s, that 10.5%. I think we’re sort of there. I think 10 sort of ended at the right jumping off point, and we sort of built back from there. And I think we have it covered generally speaking, within the guide.

Emmanuel Rosner: Okay. Thank you, very much.

Joe Massaro: Yes. Thanks.

Operator: We’ll hear next from Itay Michaeli from Citi.

Itay Michaeli: Great. Thanks. Good morning, everyone. Just two questions for me. One, Joe, I was hoping you could share our expectations for margin cadence throughout the year. And secondly, on active safety. Maybe talk about what you’re expecting this year for both top line growth, as well as if you talk about booking expectations after a very strong 2022.