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) January 16, 2018 (January 15, 2018)
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”) are expected to make a presentation on January 16, 2018 to investors and security analysts at Deutsche Bank’s Global Auto Industry Conference in Detroit, Michigan, which will include 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 8 – OTHER EVENTS
| Item 8.01. | Other Events. |
On January 15, 2018, the Board of Directors of the Company authorized a share repurchase program of up to $500 million of common stock through December 2020. The press release announcing this repurchase authorization is attached hereto as Exhibit 99.2.
SECTION 9 – FINANCIAL STATEMENTS AND EXHIBITS
| Item 9.01. | Financial Statements and Exhibits. |
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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: January 16, 2018 | By: | /s/ Brett D. Pynnonen | ||||
| Brett D. Pynnonen | ||||||
| Senior Vice President and General Counsel | ||||||
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Deutsche Bank Global Auto Industry Conference January 2018 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 Tier 1 supplier of automotive cockpit electronics and software delivering a rich, connected cockpit experience for all cars from luxury to entry segments ~$3.1B annual sales 10,000 employees 18 countries 22 manufacturing locations 18 technical centers Total shareholder returns of ~160% from 2015 – 2017; Significantly outperformed peer group and S&P 500
Evolution Through Technology Leadership From Digital to Autonomous Cockpit Electronics Pure Play Sum of Parts 2012 2015 2018 Exited non-core business to focus on cockpit electronics Established global leadership in cockpit electronics technologies Introduced market-leading autonomous driving controller
Transformation of Visteon in Cockpit Electronics Products and Technologies From custom products to platforms Innovation and technology leadership Valued technology partner for automotive OEMs Outperforming peers in largest automotive market Disciplined focus on quality and cost efficiencies Company Culture Customer Engagements China Focus Operational Excellence
Approaching Best-in-Class Performance Continued improvement in key financial metrics New Business Wins Adjusted EBITDA Margin China Domestic Sales (Dollars in billions) (Dollars in millions) ~$382 ~11.6% Return on Invested Capital * ROIC based on 9/30/2017 financials. ~17.1% ~$7.0 20% CAGR 28% CAGR
The Next Catalyst From Digital to Autonomous Cockpit Electronics Pure Play Sum of Parts 2012 2015 2018 Exited non-core business to focus on cockpit electronics Established global leadership in cockpit electronics technologies Introduced market-leading autonomous driving controller
Cockpit and ADAS/AD Technology Trends L1-L2 ADAS L3-L4 Autonomous 2010 2005 2015 2020 2025 ECU Consolidation Connected Car HMI for Level 3 Autonomous Digital Cockpit
ECU Consolidation in Automotive Electronics Visteon focused on cockpit and ADAS/AD controller solutions Reduces cost, weight and power consumption ECUs in car 30 - 100+ Consolidation of ECUs into domain controllers Leverages silicon and software innovations Today Tomorrow Cockpit Controller ADAS/AD Controller Visteon’s Focus
Next-Gen Vehicle Cockpit Solution Visteon leads industry in fast-growing cockpit controller solutions Highly Integrated Cockpit Controller Data Source: Strategy Analytics, September 2017. (Units in millions) Market Growth Rate Exponential Growth of Cockpit Controllers Visteon’s Market Leading Position Four customer wins First in the industry Single cockpit computer drives all displays and functions Integration of instrument cluster and infotainment as basic functions Advanced systems integrate HUD, driver monitoring and augmented reality Complex system integration of multiple operating systems on single multicore system-on-chip
SmartCore™ Gen 2 Launched at CES 2018 Significant opportunity in 2018 with ~$3.5B in pursuit pipeline Support for QNX® hypervisor in addition to Visteon’s hypervisor Integration of Phoenix™ and Android in addition to instrument cluster and HUD domains Support for Renesas, Nvidia, and now Qualcomm CPUs Excellent feedback from auto makers at CES 2018 Single ECU for digital instrument cluster, HUD, infotainment and optional passenger display Supports Renesas R-CAR, Qualcomm Snapdragon® processors with QNX® hypervisor, and Phoenix™ and Android™ Infotainment systems
Interconnection of Cockpit Electronics and Autonomous Driving Visteon is uniquely positioned to provide cockpit electronics solutions as the industry transitions to autonomous technology Individual hardkeys, buttons, knobs, digital displays Digital clusters Head-up displays 3-D instrument clusters Driver monitoring Augmented reality L1 L2 L3 L4 L5 2005 2010 2015 2020 2025 2030 Cockpit Electronics Technologies Automated Driving Levels 4K ultra HD instrument cluster display with side displays for mirror integration Driver-facing IR camera to monitor and track head/eye movement Digital cluster software supports driver and vehicle handoffs Next-Gen Cluster Concept
ADAS to Autonomous Roadmap Autonomous driving technology requires centralized processing of sensor data L3+ System Requirements Forward Driving Side/Rear Parking Adaptive Cruise Control (ACC) Lane Keeping Assist (LKA) Lane Change Assist Cross Traffic Alert Surround View Advanced Emergency Braking Traffic Jam Assist Parallel Park Highway Pilot Parking Assist City Pilot Valet Parking Auto Pilot L1 L2 L3 L4 L5 Function Environment monitoring increasingly done by system ADAS Autonomous Driving ACC with LKA Highway Pilot Environment monitoring by human System performs environmental monitoring Radar, camera and LiDAR sensors Late fusion of sensor data Scalable centralized computing Machine learning algorithms
Autonomous Driving Market by Features Highway pilot and self-parking are key autonomous features Forward-driving features merge into “highway pilot” for Level 3 Represents largest segment of market by 2025 Combines ACC, lane keep assist, lane change assist and swarm mode using V2X Expect take rates to be similar to L2 ADAS systems Level 3+ Highway Pilot and Parking Assist (Dollars in billions) Data Source: Roland Berger, July 2016. 16% CAGR (2017-25) $10.2 $14.0 $18.4 $24.1 $32.4 Night Vision Driver Monitoring Parking Assist/Self Parking Blind Spot Detection Highway Pilot/ Traffic Jam Pilot/ Adaptive Cruise Control Lane Departure Warning
Rapid Changes in Sensor and Processing Landscape Camera/radar/LiDAR sensors evolving rapidly CPU/GPU capabilities increasing rapidly More data volume forces higher processing power New AI-specific processors expected in near future LiDAR Mechanical to solid state Higher resolution at <$250 Processors CPU to GPU Emerging AI processors Radar 24GHz to 600 GHz 2-D to 3-D Camera Increased resolution up to 12 MP, frame rate up to 60 fps
DriveCore™ Technology Platform Scalable and modular computing hardware Software middleware abstracts hardware for AI algorithms PC-based dev toolchain for third-party algorithm and app development From Level 3 to Level 4 Patented advanced thermal management Level 3 Level 4 Perception Actuation Path Planning CNN Algorithms RL Algorithms Runtime Compute Camera, Radar, Lidar, Ultrasonic Vehicle Integration Simulated environment for algorithm development Simulation of real sensors Enable open collaboration with third-party providers In-Vehicle System Development Tool Chain
L3/L4 Autonomous Driving Ecosystem Visteon’s DriveCore™ fills system integration gap for autonomous driving ecosystem Silicon Sensors HD Map Scalable Computing Hardware and Middleware Car Manufacturers AI Algorithms & Frameworks System Hardware & Software Silicon, Sensors and HD Maps
Leveraging Autonomous Driving Ecosystem Disciplined approach to R&D and strategic investments Customer Partnerships Strategic Investments Strategic cooperation agreement Only Tier 1 founder partner Technology Collaborations Establishing an ecosystem with key partners
Best-selling digital cluster platform First open app platform for infotainment First cockpit domain controller First autonomous driving controller Evolving Cockpit Experience from Digital to Autonomous Most advanced technology solutions for cockpit and autonomous driving
Capital Deployment Strategy and Financial Guidance Deutsche Bank Global Auto Industry Conference
Capital Return Program (Dollars in millions) Commitment to Capital Returns 2017 Authorization $400 million Executed $200M in 2017 Intend to enter into OMR/ASR for remainder after year-end filing 2018 Authorization New share repurchase authorization for $500 million to be executed through 2020 Plan to complete $200M by the first quarter of 2019 $3.7B returned from 2012 - 2016 Share Repurchase 54% Special Distribution 46%
Reaffirming long-term targets of $4.7B for Sales and 14% Adjusted EBITDA margin New Business Wins 2017 Deutsche Bank Global Auto Conference On Track to Achieve Long-Term Targets (Dollars in billions) 2018 Update Increased confidence in achieving sales of $4.7B with 14% Adjusted EBITDA margin in 2021 due to strong 2017 NBWs Approximately 63% of 2021 targeted revenues is sourced ~10% of revenues in 2021 will come from SmartCore™, Phoenix™ and DriveCore™
Full-Year 2017 and 2018 Guidance FY 2017 Updated Guidance FY 2018 Guidance Sales $3,140 - $3,150 $3,175 - $3,275 Adjusted EBITDA $365 - $370 ~11.6% (~11.9% excl. Autonomous R&D) $370 - $380 ~11.7% (~12.1% excl. Autonomous R&D) Adjusted Free Cash Flow $145 - $150 $160 - $180 (Dollars in millions)
Delivering Shareholder Value Technology transformation from digital to autonomous Long-term growth and margin expansion Return enhancement through capital deployment
Appendix Deutsche Bank Global Auto Industry 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 2017 and 2018, 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.
2018 Exchange Rates 2018 full-year impact of movements in FX rates Key exchange rate assumptions
2017 and 2018 Guidance Reconciliation Adjusted EBITDA (Electronics Product Group)
2017 and 2018 Guidance Reconciliation (cont’d) Free Cash Flow and Adjusted Free Cash Flow (Electronics Product Group)
Instrument Cluster Market Overview Digital Cluster is the fastest growing segment Market Analysis Market Share (By Revenue) Significant increase on “ALL digital” design solutions Architectural changes to function oriented “Domain Controller” Sourcing models separating HW from SW providers Higher display performance (optical, resolution, size), linkage to Advanced Driver Assistance System and Autonomous Driving Electrification driving power efficiency 2017 Market $7.0B 2022 Market $10.9B 9% -10% CAGR 6% -10% $7.0B $7.7B $8.5B $9.3B $10.1B $10.9B Revenue ($B) Market Size Volume (M) 26% 27% 9% Rank # 2 Rank # 2
Center Information Display Market Overview Early engagement and technology solution are differentiation of our “added value” Market Analysis Market Size Market Share (By Revenue) Consumer electronics experience drives demand in automotive (pleasure and aesthetics – OEM design studio/marketing key initiators for early engagement). Increase in Display functions (size, sensing, gesture, haptic feedback, functional safety, biometric) Advancement in SOC technology and price reduction are driving multi Displays use, separation of silver box, and replacing traditional devices (buttons, mirrors) Improved optical quality (resolution, brightness, viewing angle, local diming, HDR) Seamless integration and functional surfaces extend outside the “traditional display” area (secret till lit, light effects, touch) $6.2B $7.1B $8.1B $9.1B $9.9B $10.4B Revenue ($B) Volume (M) 11% -16% CAGR 27% 11% 24% 3% 9% -18% 26% 23% -1% 2017 Market $6.1B 2022 Market $10.4B Rank # 2 Rank # 3
Head-Up Display Market Overview After creating the CHUD market, we must win WHUD business to become a market leader Market Analysis Market Size Market Share (By Revenue) Strong market trend for wider HUD image Strong demand for Augmented Reality HUD from Premium pulled by Autonomous Driving WHUD maintains higher market shares but balanced by CHUD introductions for lower car segments Market will more than triple in volume and revenue within the plan period (2017 -2022) as Market changes from niche to mainstream 22% 39% CAGR 11% 39% $0.7B $0.9B $1.3B $1.6B $2.0B $2.4B Revenue ($B) Volume (M) 27% 2017 Market $0.7B 2022 Market $2.4B Rank # 8 Rank # 5
Audio/Infotainment Market Overview Visteon offering a differentiated platform and business approach to become a competitive player in the largest market segment Market Analysis Market Size Market Share (By Revenue) Largest revenue product line Audio market declines, but remains relevant in emerging markets Display Audio growing the fastest within the segment Large number of suppliers with 18 players controlling 90% of the market Key drivers are smartphone integration, apps, FOTA, open source standards, cyber security Revenue ($B) Volume (M) 5% 22% CAGR -10% 5% 22% -10% $16.1B $17.1B $18.3B $19.4B $20.3B $21.0B 5% 2017 Market $16.1B 2022 Market $20.9B Rank # 8 Rank # 5
Telematics Market Overview High growth as more vehicles are connected globally; creating complexity and security concerns Market Analysis Market Size Market Share (By Revenue) Increasing wireless complexity Multiple access and security needs Connected services (FOTA / Vehicle data services) High-speed vehicle networking (Ethernet) Increasing data volume and speeds European eCall regulation Revenue ($B) Volume (M) 21% CAGR $1.9B $2.4B $3.1B $3.8B $4.3B $4.6B 19% 10% 19% 8% 2017 Market $1.9B 2022 Market $4.6B Rank # 5 Rank # 9
Exhibit 99.2
|
NEWS RELEASE |
Visteon Announces New $500 Million Share Repurchase Authorization
VAN BUREN TOWNSHIP, Mich., Jan. 16, 2018 – Visteon Corporation (Nasdaq: VC) today announced that its board of directors has authorized an additional share repurchase program of up to $500 million of common stock to be executed through 2020, reflecting the company’s strong balance sheet and free cash flow generation. Visteon expects to fund the repurchases through free cash flow generation. This authorization is in addition to the $400 million authorized by the board of directors in January 2017, of which $200 million has been completed by Dec. 31, 2017, and the remainder is expected to be executed by the end of March 2018.
“We are pleased to continue to drive shareholder value through additional share repurchases,” said Sachin Lawande, Visteon president and CEO. “This new authorization increases the total return to shareholders through share buybacks and special distributions to over $4 billion since 2012. We are confident in Visteon’s ability to generate value as we transform the company to be the technology leader in cockpit electronics while capitalizing on the potential of autonomous driving.”
Shares may be repurchased from time to time in open market transactions or in privately negotiated transactions depending on market and economic conditions, share price, trading volume, alternative uses of capital and other factors. Such purchases will be made in accordance with applicable U.S. securities laws and regulations.
About Visteon
Visteon is a global technology company that designs, engineers and manufactures innovative cockpit electronics products and connected car solutions for most of the world’s major vehicle manufacturers. Visteon is a leading provider of instrument clusters, head-up displays, information displays, infotainment, audio systems, SmartCore™ cockpit domain controllers, and vehicle connectivity. Visteon also supplies embedded multimedia and smartphone connectivity software solutions to the global automotive industry. Headquartered in Van Buren Township, Michigan, Visteon has approximately 10,000 employees at more than 40 facilities in 18 countries. Visteon had sales of $3.16 billion in 2016. Learn more at www.visteon.com.
Follow Visteon:
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Contacts:
Media:
Jim Fisher
734-710-5557
734-417-6184 – mobile
jfishe89@visteon.com
Investors:
Bill Robertson
734-710-8349
william.robertson@visteon.com
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