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Goldman Sachs Industrials Conference 2014 November 12, 2014

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Page 1: Goldman Sachs Industrials Conference 2014s22.q4cdn.com/999583405/files/doc_presentations/2014/11-12-14... · market by 2020 An extra ½ second ... Connectivity and computing drives

Goldman Sachs Industrials Conference 2014

November 12, 2014

Page 2: Goldman Sachs Industrials Conference 2014s22.q4cdn.com/999583405/files/doc_presentations/2014/11-12-14... · market by 2020 An extra ½ second ... Connectivity and computing drives

Jeff Owens Executive Vice President and Chief Technology Officer

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Forward-looking statements

This presentation, as well as other statements made by Delphi Automotive PLC (the “Company”), contain forward-

looking statements that reflect, when made, the Company’s current views with respect to current events and financial

performance. Such forward-looking statements are subject to many risks, uncertainties and factors relating to the

Company’s operations and business environment, which may cause the actual results of the Company to be materially

different from any future results. All statements that address future operating, financial or business performance or the

Company’s strategies or expectations are forward-looking statements. Factors that could cause actual results to differ

materially from these forward-looking statements are discussed under the captions “Risk Factors” and “Management’s

Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s filings with the Securities

and Exchange Commission. New risks and uncertainties arise from time to time, and it is impossible for us to predict

these events or how they may affect the Company. It should be remembered that the price of the ordinary shares and

any income from them can go down as well as up. The Company disclaims any intention or obligation to update or

revise any forward-looking statements, whether as a result of new information, future events and/or otherwise, except

as may be required by law.

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Delphi at a glance

1. Adjusted for restructuring charges, acquisition-related integration costs and asset impairment costs

Q3 2014 LTM

revenue:

$17.1 billion

Q3 LTM 2014

adj. OI margin1:

11.6%

Q3 LTM 2014

operating

cash flow:

$1.9 billion

Engineers,

scientists and

technicians:

19,000

Annual

investment

in R&D:

$1.7 billion

Q3 2014 LTM

adj. OI1:

$2.0 billion

On time

customer

delivery:

99.5% of

the time

Booked

business

since 2009:

$128 billion

4

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Technology on a global scale

Open and

close 1/2

billion times

Delphi GDi Fuel

Injector

Delphi Diesel

Fuel Injector

2.25 billion

injection events

Reduces

660 pounds of

CO2 emissions

Delphi Brushless

Fuel Pump

1 billion

instructions

per second

Delphi Engine

Controllers

Reduces

accidents

by 30%

Delphi vision

and radar

systems

Scans the

road 3.5 million

times per day

Delphi ESR

Up to 2 billion

lines of code

Delphi Processors

Can operate

in 1,600°F temps

Delphi Exhaust

Sensor

5

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Technology Advisory Council

Leading Delphi toward a Safer, Greener and more Connected future

• Global council helps advance Delphi’s enterprise objectives

– Guide product strategies and investments in technology to create value

for our shareholders

– Focus on advanced technologies to drive growth

• Panel of prominent global technology thought leaders

Mr. Hamid Akhavan Former Chief Executive

Officer of Unify Inc.

Prof. Dr. Jens Hadler General Manager

Automobil-Prüftechnik Landau GmbH

Mr. Magnus Jonsson Former Senior Vice President

Product Development, Volvo Cars

Prof. Dr. Ma Jun Dean of Automotive Marketing &

Management Institute, TongJi University

Mr. Glenn Lurie Chief Executive Officer

AT&T Mobility

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Automotive News PACE award finalists

Delphi holds 17 PACE awards and is the

leading recipient of the recognition

RACam Integrated Radar and Camera System

Multi-Charge Ignition

Integrated Front/Rear HVAC

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Key megatrends

Safe Green Connected

Leading positions in growing markets

Safe

~20% Green

~50%

Connected

~30%

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Why Safe matters…

1. http://www.distractu.com/Parents/About-the-Program.aspx# 2. http://www.textinganddrivingsafety.com/texting-and-driving-stats/

Investing in tomorrow’s technologies to reduce accidents

A text message takes a driver's eyes

from the road for an average of

4.6 seconds, the equivalent

of driving the length of an entire

football field, blind

Delphi’s Safe revenue

20182013

Driving distracted is the

equivalent of driving

with a blood alcohol level

of .081

Text

messaging

makes a

crash up to

23x

more likely2

5X increase

in Active Safety

market by 2020

An extra

½ second of warning can mitigate

60% of crashes

Active Safety

CAGR = ~30%

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$-

$2

$4

$6

$8

$10

$12

$14

$16

$18

Passive Safety

2013 2014 2015 2016 2017 2018 2019 2020

Global safety electronics market ($ billions)

Passive Safety

Active Safety

Active Safety past the tipping point

Active Safety market grows to $14B at ~35% CAGR

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Why Connected matters…

1. Harvard Health Watch: http://blog.tempoplugin.com/2013/7-time-consuming-things-an-average-joe-spends-in-a-lifetime/ 2. Excludes Mechatronics and Reception Systems

Investing in tomorrow’s technologies for seamless connectivity

In a lifetime, the average

person spends over

37,000 hours

in a car1

Delphi’s Connected revenue2

1 in 5 of Delphi’s engineers are

software focused 20182013

Today’s typical

vehicle has over

50 computers

and 1 mile of Wiring Cable

~$½ billion of software revenue

today growing 3x over

the next 7-8 years

1 in 4 vehicles built today

contain Delphi

Wiring or Connectors

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$0

$2

$4

$6

$8

$10

$12

$14

$16

2012 2013 2014 2015 2016 2017 2018 2019 2020

Connected Infotainment

Connectivity market grows to $14B at ~25% CAGR

Connectivity and computing drives Infotainment growth

Next Gen Connected

Computing Platform

In-vehicle

Wireless Network

Reconfigurable

Cluster & Displays

1st Gen Connected

Navigation

Global Connectivity and Infotainment market ($ billions)

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Convergence provides opportunities

Increasing power, data, and computing architectures

2015 2020 2025 2010

Full cloud connectivity

Safety eco-system

Smartphone integration

Assisted automation

Conditional automation

Fully autonomous

Internet of things

Increasing personalization

Increasing vehicle electrification

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Why Green matters…

Investing in tomorrow’s technologies to double fuel economy

50% more vehicles on

the planet in 10 years

Delphi’s Green revenue

20182013

Delphi’s products are 25x better at reducing

emissions than technologies

of the 1990s

A GDi Fuel System can

complete an injection

300x faster than the

blink of an eye

Delphi Brushless Fuel

Pumps can save

660 pounds

of CO2

from being emitted over the

vehicle’s lifetime

Exhaust from today’s

gas engines is cleaner than the ambient air in

some parts of the world

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Passenger car market rotates to Gas Direct injection

-

20

40

60

80

100

120

2010 2013 2016 2019 2022 2025

GDi market grows to $5B at ~17% CAGR

Worldwide passenger car vehicles (millions)

Diesel

PFI gasoline

GDi gasoline

Alternative fuels Fuel cell & electric

GDi

hybrid

PFI

hybrid

Diesel

hybrid

Source: IHS Jan 2014 and McKinsey estimates 15

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12%

54%

Industrial peer range Industrial peer average Delphi

28%

(3%) (1%)

4%

6%

Industrial peer range Industrial peer average Delphi

10%

Financial metrics comparison

2010- 2013 EPS CAGR2 Revenue Growth1

2014 P/E Ratio 2013 ROIC3

Industry-leading financial metrics

10%

16%

34%

Industrial peer range Industrial peer average Delphi

25%

15.1x

18.5x

13.4x

Industrial peer range Industrial peer average Delphi

21.6x

Note: Range and averages are for a peer group consisting of: 3M Company, Danaher Corp., Emerson Electric Co., Honeywell International Inc., Ingersoll-Rand PLC, ITT Corporation, Rexnord Corporation, SPX Corporation, W.W. Grainger, Inc., WESCO International Inc. (Excludes outliers; Data represents Capital IQ estimates)

1. Last twelve months total revenues, one year growth rate 2. Adjusted for restructuring, integration, asset impairment and debt extinguishment costs 3. Adjusted for restructuring, integration and asset impairment costs

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Why invest in Delphi

• Well positioned in a transformed and growing industry

• Significant global scale

• Industry-leading cost structure

• Significant margin expansion and cash flow generation

• Balanced and disciplined capital allocation

Industry-leading shareholder returns

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Page 19: Goldman Sachs Industrials Conference 2014s22.q4cdn.com/999583405/files/doc_presentations/2014/11-12-14... · market by 2020 An extra ½ second ... Connectivity and computing drives

Net income attributable to Delphi $298 $320 $382 $305 $1,305

Income tax expense $74 $75 $62 $63 $274

Interest expense $37 $35 $33 $33 $138

Other (income) expense, net ($7) $16 ($3) ($5) $1

Noncontrolling interest $23 $21 $24 $20 $88

Equity income, net of tax ($8) ($8) ($10) ($2) ($28)

Operating income $417 $459 $488 $414 $1,778

Restructuring $50 $22 $55 $47 $174

Other acquisition-related costs $5 $2 $1 $3 $11

Asset Impairments - - $3 $4 $7

Adjusted operating income $472 $483 $547 $468 $1,970

Non-US GAAP financial metrics ($ millions)

Q2 2014 Q3 2014 Q4 2013 Q1 2014 Q3 2014

LTM

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