UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) November 7, 2017
VISTEON CORPORATION
(Exact name of registrant as specified in its charter)
| Delaware | 1-15827 | 38-3519512 | ||
| (State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) | ||
| One Village Center Drive, Van Buren Township, Michigan | 48111 | |||
| (Address of principal executive offices) | (Zip Code) | |||
Registrant’s telephone number, including area code (800)-VISTEON
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communication pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
SECTION 2 – FINANCIAL INFORMATION
| Item 2.02. | Results of Operations and Financial Condition. |
Senior executives of Visteon Corporation (the “Company”) made a presentation on November 7, 2017 to investors and security analysts at the Baird Global Industrial Conference in Chicago, Illinois, which included a discussion of the Company’s strategy, financial profile and related matters, including certain financial information. In connection with such presentation, the Company is making available the presentation slides attached hereto as Exhibit 99.1, which are incorporated herein by reference.
The information contained in Exhibit 99.1 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
SECTION 7 – REGULATION FD
| Item 7.01. | Regulation FD Disclosure. |
See “Item 2.02. Results of Operations and Financial Condition” above.
SECTION 9 – FINANCIAL STATEMENTS AND EXHIBITS
| Item 9.01. | Financial Statements and Exhibits. |
| Exhibit No. |
Description | |
| 99.1 | Presentation slides from the Company’s presentation at the Baird Global Industrial Conference on November 7, 2017 | |
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| VISTEON CORPORATION | ||||||
| Date: November 7, 2017 | By: | /s/ Brett D. Pynnonen | ||||
| Brett D. Pynnonen | ||||||
| Senior Vice President and General Counsel | ||||||
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Visteon Baird Global Industrial Conference November 2017 Sachin Lawande President and CEO Exhibit 99.1
Forward-looking Information This presentation contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not guarantees of future results and conditions but rather are subject to various factors, risks and uncertainties that could cause our actual results to differ materially from those expressed in these forward-looking statements, including, but not limited to: conditions within the automotive industry, including (i) the automotive vehicle production volumes and schedules of our customers, (ii) the financial condition of our customers and the effects of any restructuring or reorganization plans that may be undertaken by our customers, including work stoppages at our customers, and (iii) possible disruptions in the supply of commodities to us or our customers due to financial distress, work stoppages, natural disasters or civil unrest; our ability to execute on our transformational plans and cost-reduction initiatives in the amounts and on the timing contemplated; our ability to satisfy future capital and liquidity requirements; including our ability to access the credit and capital markets at the times and in the amounts needed and on terms acceptable to us; our ability to comply with financial and other covenants in our credit agreements; and the continuation of acceptable supplier payment terms; our ability to satisfy pension and other post-employment benefit obligations; our ability to access funds generated by foreign subsidiaries and joint ventures on a timely and cost effective basis; general economic conditions, including changes in interest rates and fuel prices; the timing and expenses related to internal restructurings, employee reductions, acquisitions or dispositions and the effect of pension and other post-employment benefit obligations; increases in raw material and energy costs and our ability to offset or recover these costs, increases in our warranty, product liability and recall costs or the outcome of legal or regulatory proceedings to which we are or may become a party; and those factors identified in our filings with the SEC (including our Annual Report on Form 10-K for the fiscal year ended December 31, 2016). Caution should be taken not to place undue reliance on our forward-looking statements, which represent our view only as of the date of this presentation, and which we assume no obligation to update. New business wins, re-wins and backlog do not represent firm orders or firm commitments from customers, but are based on various assumptions, including the timing and duration of product launches, vehicle productions levels, customer price reductions and currency exchange rates.
Visteon Today and Shareholder Value Creation A global leader in automotive cockpit electronics and software (1) Peer group includes average returns of Autoliv, Continental, Delphi and Gentex. Manufacturing locations 22 10,000 Employees 18 Countries Technical centers 18 $3.1B Annual sales (Electronics) Company headquarters Van Buren Township, Michigan, United States December 2013 May 2015 July 2016 October 2017 Visteon 160% S&P 500 51% Peer Group (1) 47% Long-Term Total Shareholder Return (12/31/13 – 10/30/17)
A Broad and Diversified Customer Base Global automotive technology company with more than 25 customers worldwide
Industry-Leading Cockpit Electronics Product Portfolio Only pure-play in automotive cockpit electronics Source: Rankings from 2016 ABI Research and IHS Markit. Instrument clusters Head-up displays Displays Infotainment Audio Connectivity Cockpit domain controllers Visteon Market Position Top 5 Connected car Tier 1 supplier #2 Rank Instrument cluster displays #3 Rank Head-up displays #2 Rank Automotive display systems Center stack displays
Industry in Transformation Cockpit electronics growing faster than underlying vehicle production Cockpit Electronics vs. Global Vehicle Production Cockpit Electronics Global Vehicle Production 9.1% CAGR 2.1% CAGR Projections based on latest IHS Markit data. ~$32B in 2017 Instrument Clusters 22% Audio and Infotainment 51% Displays 19% HUD 2% Telematics 6% 2017 Market Segmentation Connected car ADAS/AD Electrification Key Drivers Cockpit Electronics
Key Trends in Instrument Clusters Visteon leading industry transition toward digital clusters CAGR 2022 2017 27% 6% -10% Hybrid Analog All Digital 95.1M Units 105.7M Units All-digital is fastest-growing segment of clusters All-digital clusters expanding from luxury to mass market vehicles Visteon awarded $2.6 billion in YTD new business wins Improved global market share to #2 position from #3 in 2015 All-Digital Cluster Hybrid Cluster Analog Cluster
Key Trends in Audio/Infotainment Display Audio and Embedded Infotainment offer significant growth opportunity for Visteon 2022 2017 5% 22% -10% 95.1M Units Display Audio Audio Embedded Infotainment 105.7M Units Market trending toward Display Audio systems from traditional audio Visteon’s capabilities in Display Audio strengthened by AllGo acquisition Embedded infotainment transforming into “mobile app platform” Visteon awarded $1.5 billion in YTD new business wins; including first Phoenix™ win Embedded Infotainment Display Audio AM/FM/BT Audio CAGR
Visteon’s Infotainment Platform for Connected Car Seamless upgrade path from Display Audio to Embedded Infotainment App developer friendly Highly secure Fully upgradeable Automotive Base Components Cyber Security Web Runtime Projection Mode Common API and JavaScript Navi Engine Complete “out-of-the-box” solution to OEMs for Display Audio Extend with pre-integrated third-party software to mid/high infotainment Offers “write once, run on many” for infotainment apps First purpose-built infotainment OS and tools
ECU Consolidation in Automotive Electronics Visteon offers industry-first cockpit domain controller; will launch AD controller Today Tomorrow Reduces cost, weight, and power consumption ECUs in car 30 - 100+ Consolidation of ECUs into domain controllers Leverages silicon and software innovations
Visteon’s Cockpit Domain Controller Market introduction of first SmartCore™ system in early 2018 with European OEM Cluster HUD Infotainment SmartCore™ Cockpit Domain Controller *Source: Roland Berger study, July 2015. 4 SmartCore™ business wins to date $175 Expected per vehicle savings* Integration of instrument cluster, infotainment, HUD and driver monitoring First cockpit domain controller in the industry 1 awar Recognized with Innovation Award by German Center of Automotive Management
Key Trends in Autonomous Driving Perception Sensors Actuation Path Planning HD maps, real-time middleware for algorithms Scalable high performance compute system Vehicle Integration CNN algorithms RL algorithms Radar 24GHz to 76-81GHz 2-D to 3-D Technology Landscape Autonomous Driving Controller Processors CPU to GPU Emerging AI processors Lidar Mechanical to solid state Higher resolution at <$250 Software Conventional to machine learning High safety relevance (ASIL) Neural network object detection Reinforcement learning Camera, Radar, Lidar, Ultrasonic CAN, Ethernet Centralized processing of sensor data Key Requirements of Autonomous Driving Controller Scalable and CPU agnostic hardware High-performance middleware Advanced software tools for algorithm development
Visteon’s DriveCore™ Technology Platform Studio Runtime Compute Communications Framework APIs Complete technology platform Middleware and tools for rapid algorithm development Faster time to market with third-party algorithms From 500 GFLOPS to 20 TFLOPS Advanced thermal management Perception Sensors Actuation Path Planning Vehicle Integration CNN algorithms RL algorithms Autonomous Driving Controller Camera, Radar, Lidar, Ultrasonic CAN, Ethernet Runtime Compute
Continuing Momentum Toward Best-In-Class Profitability (Dollars in Millions) 12.5% 11.9% 10.8% 10.4% 7.7% 8.7% 10.0% 10.7% 12.2% Adjusted EBITDA increased Y/Y every quarter for 11 straight quarters… …guiding to long-term margins reaching 14% while investing in new technologies. Annual Adjusted EBITDA Margins Quarterly Adjusted EBITDA and Margins 10.9% 9.5% 11.1% ~11.5% 14.0% 10.8%
Record YTD New Business Wins and Backlog Business accelerating in faster-growing product segments across all regions $18.0B Backlog New Business Wins Note: New business wins represent booked lifetime revenue. $16.5B $14.9B Data source: ‘17 data source: Q3 2017 Earnings deck + C Brown outlook estimate ‘16 data source: Q4 16 earnings deck ‘15 data source: Q4 15 (NBWs only) ‘15 data source: backlog from Q4 16 earnings deck $4.6B Instrument Clusters 58% Infotainment 22% Audio 11% Displays 4% HUD 2% Telematics 1% Other 2% $4.6B Europe 20% China 27% Other Asia 22% North America 29% South America 2% Highlights Phoenix™ First win for Display Audio system in North America Backlog growing faster than cockpit electronics market 11% Y/Y growth in backlog Audio/Infotainment NBWs of $1.5B, more than 2x prior year 12% Y/Y growth in NBWs
2017 Strategic Imperatives Strengthen Core Business Develop Level 3/4 Autonomous Driving Platform Accelerate China Business Deliver higher sales and improve margins to ~11.5% Drive new business wins to achieve combined ~$12 billion target for 2017/2018 Continued focus on operational excellence Achieve double-digit China sales growth in 2017 Introduce SmartCoreTM and PhoenixTM technologies in China Leverage joint venture relationships to drive adoption of new offerings Leverage SmartCoreTM technology platform for sensor fusion Early engagement with selected customers Launch technology platform at CES 2018
Appendix Baird Global Industrial Conference
Use of Non-GAAP Financial Information Because not all companies use identical calculations, adjusted EBITDA, free cash flow and adjusted free cash flow used throughout this presentation may not be comparable to other similarly titled measures of other companies. In order to provide the forward-looking non-GAAP financial measures for full-year 2016 and 2017, the Company is providing reconciliations to the most directly comparable GAAP financial measures on the subsequent slides. The provision of these comparable GAAP financial measures is not intended to indicate that the Company is explicitly or implicitly providing projections on those GAAP financial measures, and actual results for such measures are likely to vary from those presented. The reconciliations include all information reasonably available to the Company at the date of this presentation and the adjustments that management can reasonably predict.
Full-Year 2017 Guidance (Electronics Product Group) FY 2016 Actual Updated FY 2017 Guidance Sales $3.107B $3.12 - $3.16B Adjusted EBITDA $346M 11.1% $360 - $370M ~11.5% Adjusted Free Cash Flow $167M $170 - $180M
2017 Guidance Reconciliation Adjusted EBITDA (Electronics Product Group)
2017 Guidance Reconciliation (cont’d) Free Cash Flow and Adjusted Free Cash Flow (Electronics Product Group) (1) Excludes $82 million of legacy-related cash outflows. (1)
