Kevin P. Clark
Chairman And Chief Executive Officer at Aptiv
Thank you, Jessica, and thanks, everyone for joining us this morning. Beginning on slide three. Through the first half of the year, two things stand out; the first is strong broad-based demand across our portfolio of product offerings, reflected in over $20 billion in bookings during the first half of 2022, including a record $14 billion in the second quarter alone, almost double where we were at this time last year. The growth in bookings showcases our strong portfolio of technologies and the increasing strategic value we're providing our customers as they transform to meet the consumer demand for the electrified software-defined vehicle. The second theme relates to the persistent COVID and supply chain issues that continue to constrain automotive production, impacting our first half revenue growth and our profitability.
Looking ahead, we believe that these constraints on production and the record levels of inflation will continue for several more quarters and will be addressed with actions that we already have in place. Newer challenges in Europe are being addressed with incremental measures, including another round of customer price increases and increased number of product redesigns, further consolidation of our supplier base and additional structural cost reductions, all of which will significantly improve our profitability in the short and long term. Setting aside the near-term constraints, I can confidently say that our competitive positioning, reflected in our bookings momentum, has never been stronger and will drive the acceleration of our revenue and earnings growth as vehicle production stabilizes. So, we're balancing improving our profitability and cash flow over the short term, while continuing to invest in those growth initiatives that will drive more meaningful margin expansion in the years ahead.
We'll talk more about these at our upcoming Investor Day in Boston on February 14. By then, our 2022 results and 2023 guidance will be out, and we can update investors on our strategy to enable the fully electrified software-defined vehicle of the future and how that will accelerate profitable growth and improve through cycle resiliency in years ahead. Lets now turn to our second quarter result. Revenue totaled 4.1 billion up 9% from the prior year, driven by strong demand across our portfolio of safe, green and connected technologies. Operating income and earnings per share totaled $213 million and $0.22, respectively, reflecting strong revenue growth, more than offset by material inflation, incremental costs related to supply chain disruptions, shutdowns in China and some softening in vehicle production schedules in Europe.
Turning to slide four. Revenue grew eight points over underlying vehicle production, which increased 1% in the quarter. North America production remained strong, while Europe experienced significant weakness from a combination of semiconductor chip supply and macroeconomic factors. China had a very strong finish to the second quarter, despite a slow start due to COVID-related production disruptions. While our team is doing an excellent job keeping production going in this very volatile environment, the challenges we're facing continue to have a meaningful impact on our business. With supply chain disruptions and persistent inflation continuing to translate into incremental costs, and the increased likelihood of disruption of the gas supply into Europe, we've accelerated several initiatives to increase our agility and resiliency and improve our profitability in the near term.
Moving to slide five. The tremendous customer pull for our products has positioned us well in our pricing discussions for both new program awards, as well as cost recoveries. The pricing on new business bookings support our long-term margin framework and as these bookings move into production, they will naturally improve our margin profile. Over the near term, cost recoveries we've already negotiated with customers and are coming in above plan, will have a more significant impact on second half profitability. For context, the timing of cost recoveries for semiconductor broker buys negatively impacted ASUX margins by 300 basis points in the second quarter, but will benefit our results in the second half of the year and going -- second half of the year. Going forward, all future premiums will be passed on to customers at the time of the transaction. We continue to validate more second sources on key components and are passing through increased input costs to improve profitability.
In addition, we're implementing additional overhead cost reductions and further rationalizing our footprint, which we expect to yield $100 million in savings in 2023. We've also been working on several product redesign initiatives to both increase our sourcing flexibility and mitigate the impact of inflation. The benefits from these redesign initiatives will accelerate during late 2022 and into 2023. We believe the current macro headwinds will elongate the automotive growth cycle. So we're further optimizing our cost structure to position us for success in both the short and the long term, that means executing these cost reduction actions, while still preserving investments in our highest growth opportunities, including high-voltage electrification, active safety and smart vehicle architecture, as well as our product redesign and validation initiatives that are important for increased resiliency and improve profitability.
Lastly, we're also excited about our software strategy and the many opportunities we see with the acquisition of Wind River. In summary, the resiliency of our business model has put us in a strong competitive position to capitalize on the mega trends of safe, green and connected. Turning to slide six. As reflected in the momentum of our new business bookings, Aptiv is clearly gaining a lot of traction. Our unique position as the only provider of both the brain and nervous system of the vehicle has translated into significant -- to a significant competitive mode, allowing Aptiv to provide full system-level end-to-end solutions that enable an efficient path to the fully electrified software-defined vehicle. Our full vehicle -- our full system level solutions and capabilities are optimizing vehicle architecture and allow for reduced vehicle complexity, flexible and scalable platforms, improve quality, reliability and performance and translates into significant weight, mass and cost savings.
They also accelerate the vehicle development efforts of our customers, positioning us to launch the first-to-market zone controller with Volvo early next year. Our Smart Vehicle Architecture solution not only creates accretive value for Aptiv, but also lowers total systems cost for our customers, enabling more vehicle automation and the seamless integration of new features and functionality. The recognition of the need for smart vehicle architecture is accelerating and is reflected in the 20 engagements with 10 customers and almost 5 billion of new business booking today, demonstrating how Aptiv is uniquely positioned to the fully electrified software-defined vehicle. Moving to slide seven. The momentum of our new business bookings during the first half of the year gives us confidence in our ability to sustain strong above-market growth at or above our long-term margin framework across both of our business segments. Second quarter bookings totaled $14.2 billion, a record for any quarter in the company's history.
Advanced Safety and User Experience bookings totaled a record $8.8 billion during the quarter, bringing the year-to-date total to $9.6 billion, also a record for the full year, even though we're just halfway through 2022. As we discussed on the previous slide, we continue to make significant commercial progress on our smart vehicle architecture solution. The advanced development programs we've been involved in are translating into new business awards as evidenced by the large advanced zone controller booking during the quarter from a leading German OEM. In addition to the central vehicle control award, we received in the first quarter from the same customer. We're extremely excited about our continued deep strategic partnership with this customer as we redefine vehicle architecture with the full adoption of our SVA solution.
Bookings for our Signal and Power Solutions segment reached $5.4 billion during the quarter, including another strong quarter for a high-voltage product line with $1 billion in customer awards, bringing the year-to-date total to over $2 billion. Our bookings momentum validates the value we bring with our system-level approach to optimizing vehicle architecture, which reduces vehicle weight and mass, thereby reducing costs for OEM customers. It is also a testament to our strong customer relationships, our One Aptiv approach and our portfolio of advanced technologies which is perfectly aligned to the safe, green and connected megatrends. I'm truly proud of the work the team has done to continue to build strong relationships with our customers as a partner of choice for both the brain and the nervous system of the vehicle.
Turning to slide eight in our Advanced Safety and User Experience segment. Active Safety revenue growth remained strong, up 21% during the quarter, driven by the continued penetration of advanced ADAS systems partially offset by semiconductor shortages impacting production in Europe and North America, and user experience revenues were down 6% in the quarter, primarily the result of continued chip supply constraints in Europe and the impact of China shutdowns on volume, but we expect to finish the year with approximately 10% revenue growth. As mentioned, we continue to experience increased demand for smart vehicle architecture and see a very strong pipeline of customer activity for the remainder of this year and into 2023. We've leveraged our competitive position to enter into strategic dialogues with several OEMs on redesigning their software architecture in addition to optimizing their vehicle architecture.
We offer unique capabilities to modernize software development and deployment to help our customers migrate to the software-defined vehicles of the future, which unlocks additional opportunities to further enhance the value of Aptiv's and our customers' software solutions. Active Safety also continues to show strong momentum with more than $4 billion of awards in the quarter, including just under a $3 billion award with a global OEM for their next-gen Level two, Level 3 ADAS system, reinforcing our leading position as the ADAS supplier of choice for this customer. Moving to slide nine. Second quarter revenues in our Signal and Power Solutions segment rose 10%, 9 points better than global vehicle production, reflecting high-voltage revenues that increased 22% during the quarter, driven by the launch of new electric vehicle programs, particularly in Asia and North America. And revenues in nonautomotive markets that increased 14%, the result of strong growth in general industrial, semiconductor, datacom and commercial space markets.
Our industry-leading portfolio of power and data distribution, connectors, electrical centers and cable management solutions, combined with our global scale uniquely positions Aptiv to both design and manufacture optimized vehicle architecture systems for customers located anywhere in the world. In the quarter, we were awarded a high-voltage architecture award with a major European OEM, positioning us for substantial growth for this customer as they increase their electrification offerings over the next several years. The strength of our competitive position and the size of our funnel for new programs gives us confidence in reaching over $4 billion of high-voltage electrification new business bookings during 2022. Moving to Slide 10. We continue to execute on our plan to build a business that delivers outsized results in any market. We have the right safe, green and connected product portfolio, the right regional and customer mix, the right cost structure and track record of execution and the financial flexibility that translates into a more resilient business model.
We'd hope COVID, its associated supply chain constraints and production disruptions would be in the rearview mirror by now, and that we'd be experiencing steady economic growth, but macro headwinds and other challenges do remain. While these may persist for several more quarters, we expect to end the year with strong growth while also expanding margins. And I'm confident we've taken appropriate actions that will allow us to finish the year on a strong footing with an even more resilient business model. Any improvement in the macros or the supply chain will present potential upside from here.
With that, I'll turn the call over to Joe to go through the financial highlights in more detail.
