# MESSAGE TO OUR STAKEHOLDERS

_Source: `DeepSeekOCR_Ardian_pruned_1k/consumer-cyclical-auto-parts/NYSE_APTV_2020/NYSE_APTV_2020.mmd` · pages 2-8_

---

MESSAGE TO OUR STAKEHOLDERS

This past year was like no other. The COVID-19 pandemic reminded us of the things that really matter — the safety of those we care about, the criticality of sustaining our environment, and the importance of staying connected even as we are socially distanced.

In these unprecedented times, I am extremely proud of our 180,000 employees, who responded by tirelessly supporting the needs of our customers and of one another, allowing Aptiv to deliver strong overall performance in an otherwise very challenging year.

At Aptiv, we have been focused on building a more sustainable business while we accelerate the development and introduction of products that help promote a more sustainable future for the planet. Our strong track record of revenue growth and new business awards reflects our industry-leading portfolio of advanced technologies that enable the safer, greener and more connected future of mobility. The democratization of active safety, high-voltage electrification and vehicle connectivity will reduce traffic accidents, save lives, reduce carbon emissions and save the industry billions in development costs and expensive vehicle repairs. Never has Aptiv's mission had more meaning than it does today.

Safety has always been at the forefront for Aptiv, not just with regard to our vehicle technologies, but also with how we conduct ourselves in our workplaces and in the communities where we operate. At the start of the COVID-19 pandemic, we immediately implemented world-class safety measures to protect our people. We quickly developed and shared our Safe Operations Protocols with customers, suppliers and government agencies across the globe to help ensure that we could all safely and efficiently restart operations. Our efforts were recognized by customers, suppliers and multiple governments as a best-in-class approach.

The safety protocols enabled our employees to return safely to the workplace as we ramped up global production to meet the rebound of customer schedules. The incremental safety measures ensured that Aptiv had no customer disruptions, even as we managed through challenges related to labor availability and a tightening of the global supply chain due to the pandemic. Through the experience, we gained meaningful insights that have enhanced our ongoing safety programs. At the same time, Aptiv took actions to help prevent the spread of COVID-19 in the communities where we operate, and contributed to the GlobalGiving Coronavirus Relief Fund, which supports the heroes treating COVID-19 patients around the world.

## DEMONSTRATED RESILIENCY

Despite the uncertainty unleashed by the COVID-19 pandemic, Aptiv's portfolio of advanced technologies that provide both the brain and nervous system of the vehicle enabled us to continue to solve our customers' toughest challenges and remain their partner of choice. This resulted in revenue growth that was 10 points over underlying vehicle production and $18 billion of new-business bookings, roughly flat with 2019 levels when adjusted for the current outlook for global vehicle production.

In addition, our industry-leading cost structure allowed us to withstand more than a 40 percent year-over-year reduction in second-quarter revenues and remain EBITDA-breakeven. To further enhance our financial flexibility, we initiated $150 million of austerity measures, including executive pay reductions, delayed merit increases, the suspension of discretionary retirement plan contributions, and a global hiring freeze, while continuing to ensure we invested in key growth areas, including high-voltage electrification, advanced driver-assistance systems (ADAS) solutions and Smart Vehicle Architecture \( ^{™} \) .

As the recovery took hold in the second half of 2020, we ended these austerity measures and implemented a cash recognition award program for employees in response to their commitment and sacrifices during this challenging time.

## FINANCIAL STRENGTH AND FLEXIBILITY FOR VALUE CREATION

Aptiv has long benefited from a strong balance sheet, which has enabled us to strategically position our portfolio and align our technologies to high-growth safe, green and connected megatrends. As COVID-19 posed significant uncertainties, we took decisive actions early in 2020 to further enhance our liquidity, including suspending our dividend, ceasing the repurchase of our shares and reducing capital spending.

With liquidity and capital preservation in place, our next goal was to ensure that Aptiv emerged from the COVID-related economic challenges in a position of strength, able to continue to execute on our strategy of outgrowth in key technologies. To that end, we raised equity in June, which provided us with the flexibility to achieve those goals while reducing outstanding debt balances.

Value creation has always been a top priority for our management team, and we continue to fully invest in strategic growth initiatives, including high-voltage

<--- Page Split --->

electrification, active safety, vehicle connectivity, and Smart Vehicle Architecture. In early 2021 we unveiled the latest results of those investments in our Innovation in Motion virtual event, spotlighting advances that have further expanded our competitive moat of leading mobility solutions.

Our investments support the pipeline of new business pursuits and new product launches planned for 2021 and beyond that will position us to continue our track record of outperformance.

## CORPORATE SOCIAL RESPONSIBILITY

To deliver on our mission, we fully embrace our corporate social responsibility. We recognize that diversity and inclusion in our workforce strengthens our management team and results in improved performance. At Aptiv, diversity starts at the top. More than 40 percent of our board of director nominees are diverse in gender, race or ethnicity. Half of our workforce consists of women, and women hold almost one-quarter of our management roles, higher than the average among most tech and industrial companies. Our operating presence in 44 countries translates into a global mindset and a culture of diversity across the company that serves us well.

In 2019, we began a multiyear, enterprise-wide cultural transformation initiative to further increase diversity across the organization. In 2020, those efforts expanded to organizational surveys, leadership training, employee workshops, mentorship programs and new compensation structures that align with our diversity goals.

Cultural transformation is one piece of our broader commitment around corporate social responsibility and is detailed in our 2020 Sustainability Report, published in September. In that report, we establish our commitments for 2025 across four foundational pillars — People, Product, Planet and Platform — based on our sustainability strategy that is aligned with the reporting frameworks of the Global Reporting Initiative and the Sustainability Accounting Standards Board, along with a materiality analysis that identifies what is most important to our company and our stakeholders.

Aptiv is taking on some of society's most difficult challenges with innovations that dramatically reduce or eliminate  \( CO_{2} \)  emissions in our products and across our global operations. We have set and exceeded prior environmental targets, reducing our  \( CO_{2} \)  emissions by 41 percent through the end of 2020. Going forward we have aggressively established new emission-reduction targets aligned with the Paris Agreement, and committed to the Science Based Targets initiative (SBTi). The world needs them, and we know the employees at Aptiv can deliver them.

## WELL-POSITIONED FOR CONTINUED
OUTPERFORMANCE

We believe that our long-term success as a business and our ability to create value for all stakeholders are strongly linked to the positive impact we have on our people, our portfolio and our planet. That is why we continue to reinforce our strong cultural foundation, which is underpinned by thinking and acting like owners — and always doing the right thing, the right way.

Even as our employees helped to keep each other safe in 2020, they never stopped innovating, and they never stopped delivering for our customers. As a result, our portfolio of safe, green and connected technologies continues to address our customers' greatest challenges.

We continue to build a more resilient business model, one that yields increased revenue growth and more sustainable earnings and cash flows, positioning Aptiv to outperform in any environment. Our stock performance underscores the significant progress we have made. After a strong recovery from the marketplace sell-off in March, Aptiv closed 2020 up 37.5 percent year-over-year – compared to our auto peers up 28 percent, industrial peers up 21 percent, and the S&P 500 up 16 percent.

In 2021, the world faces a new set of challenges. We are closely monitoring the rollout of new COVID-19 vaccines and treatments, as well as the potential for a resurgence of infections and ongoing disruptions in the supply chain. Whatever the year brings, we are confident that Aptiv can navigate the road ahead. With our world-class talent, diversified revenue stream, leading cost structure, strong balance sheet and track record of smart capital allocation, we are well positioned to move the industry forward. With a portfolio of technologies that includes both the brain and the nervous system of the vehicle, Aptiv has a unique opportunity to bring to life the electrified and software-defined vehicles of the future.

Thank you for your continued trust and confidence in Aptiv.

![](images/3_0.jpg)

Kevin P. Clark
President and Chief Executive Officer

Kris T. Clark