Visteon Corporation · NASDAQ:VC
Visteon — Baird 2015 Industrial Conference
42 slides from Visteon's conference presentation, Nov 10, 2015
Slide 1: Baird 2015 Industrial Conference
Visteon Visteon Corporation Baird 2015 Industrial Conference November 2015
Slide 2: Summary Snapshot
Summary Snapshot Visteon Visteon has transitioned from a multi-product, Ford spinoff to a focused electronics supplier with a diverse customer base Today, Visteon has a solid financial profile with strong momentum and significant opportunity for further improvement 2015 is a transition year for Vist
Slide 3: Review of 2012 Plan: Structural Building Blocks
Review of 2012 Plan: Structural Building Blocks Visteon 2012 Strategic Plan (September 19, 2012) 70% HCC 100% Visteon Climate Contribute Visteon Climate to HCC for cash Establishes “New Halla-Visteon Climate Group” (HVCG) as single consolidated Climate entity with leadership of all global Climate op
Slide 4: Electronics Business Has Developed Well
Electronics Business Has Developed Well Visteon (Dollars in Millions) Visteon Adjusted EBITDA (Electronics and Corporate Only) $71 $40 $58 $106 $275 Synergies SG&A Reductions Manufacturing Efficiencies Growth 2013 Electronics and Corp w/o YFVE and JCI YFVE EBITDA at Acquisition JCI Audited 2013 EBIT
Slide 5: Company Now Singularly Focused on Cockpit Electronics
Company Now Singularly Focused on Cockpit Electronics Visteon Visteon Audio Information Displays Instrument Clusters + Johnson Controls Electronics Cockpit Domain Controllers Head-Up Displays Infotainment Telematics = Broadest Portfolio in the Industry Instrument Clusters Head-Up Displays Telematics
Slide 6: Our Vision and Mission
Visteon Our Vision: A top-three cockpit electronics player delivering a rich, connected cockpit experience for every car from luxury to entry Our Mission: To be the foremost leader in driver information and connected infotainment solutions that enables a rich driving experience in a safe and conveni
Slide 7: Automotive Electronics Satisfaction Drivers
Automotive Electronics Satisfaction Drivers Visteon Impact on Satisfaction from In-Vehicle Technology Aligns with Key Visteon Products Comfort and Convenience Climate Controls Customization / Personalization Touch Screen Display Navigation Factory Installed Navigation Smartphone Navigation Vehicle I
Slide 8: Cockpit Electronics Market by Product Segment
Cockpit Electronics Market by Product Segment Visteon (Dollars in Billions) 2015 and 2020 Revenue 2015 2020 $7.0 $9.5 $2.5 $3.8 $6.6 $8.4 $11.5 $16.0 $3.5 $6.1 $0.4 $1.2 Instrument Clusters Displays Audio Infotainment Connectivity / Telematics HUD 2015 Visteon Market Share >15% >25% <10% <5% <5% <10
Slide 9: Cockpit Electronics Competitive Landscape
Cockpit Electronics Competitive Landscape Visteon Instrument Clusters Visteon Cockpit Domain Controllers Visteon Head-Up Displays Visteon Audio Visteon Information Displays Visteon Infotainment Visteon Telematics Visteon Offerings Across All Products Visteon: One of Two Suppliers with Offerings Acro
Slide 10: Introduction of Plan Part II: Cockpit Electronics
Introduction of Plan Part II: Cockpit Electronics Visteon Long-Term Growth Opportunity Product Focus & Growth Customer & Geographic Extension Strengthen the Core Continue to lead market in next generation cluster, head-up display (“HUD”), connected audio, and display development Enhance infotainment
Slide 11: Strategic Imperatives
Strategic Imperatives Visteon Strengthen the Core Move Selectively to Adjacent Products Deliver Cost Efficiencies Audio Head-Up Displays Information Displays Infotainment Instrument Clusters Telematics Cockpit Domain Controllers (SmartCore) Next Generation Safety Applications (e.g. V2X / V2V) Vehicl
Slide 12: Core Business is Strong But Has Opportunities
Core Business is Strong But Has Opportunities Visteon Visteon Backlog with Top Customers Audio Head-up Displays Information Displays Infotainment Instrument Clusters Telematics SmartCore Opportunity Immediate Opportunity to Introduce SmartCore with Some of Our Largest Customers Page 12 Note: Custome
Slide 13: Next Generation Infotainment
Next Generation Infotainment Visteon Key Features 1 HTML5 with Javascript API 2 Advanced smartphone integration 3 New “personal assistant” capability 4 Over-the-air software upgradable 5 Advanced cyber-security Androidauto Apple CarPlay Baidu CarLife Architecture HTML5 HMI HTML5 Apps Javascript API
Slide 14: China Market Opportunities
China Market Opportunities Visteon Big 4 Visteon SAIC 5.4M JV OEMs FAW 2.7 JV OEMs DONGFENG 3.3M JV OEMs CHANGAN 2.4M JV OEMs Tier 2 BAIC Group 1.7M JV OEMs BRILLIANCE 0.6M JV OEMs GAC MOTOR 1.2M JV OEMs CHERY 0.5M JV OEMs Other C-OEMs 2.6M Visteon China Sales by Product (2016E Domestic Sales) (1) O
Slide 15: Technology Trends Driving Opportunity in Adjacent Products
Technology Trends Driving Opportunity in Adjacent Products Visteon 1) Increased Focus on User Experience Curved Displays, Gesture Support 2) High Interest in Cyber Security HACKED AIRBAGS HACKED CONTROLS/STEERING HACKED ENTERTAINMENT SYSTEM HACKED BRAKES Vehicle Network Architecture 3) Trend in Sili
Slide 16: Displays and Cyber Security
Displays and Cyber Security Visteon Displays 3-D Lenses LCD OLED OLED Displays Normal LCD Optical Bonding LCD Optical Bonding Visteon is the global leader in displays - 26% global market share - Established leader in differentiating display technologies, including 3-D, OLED and Optical Bonding Indus
Slide 17: Cockpit Domain Controller - SmartCore
Cockpit Domain Controller - SmartCoreTM Visteon Visteon SmartCoreTM Technology Four Separate Systems 1 Head-Up Display (HUD) 2 Telematics Control Unit (TCU) 3 Infotainment 4 Instrument Cluster One Integrated System (SmartCoreTM) Industry-first automotive grade cockpit domain controller solution In-h
Slide 18: Vehicle-to-Vehicle / Infrastructure (V2X) Technology
Vehicle-to-Vehicle / Infrastructure (“V2X”) Technology Visteon V2X Technology Overview V2X includes Vehicle-to-Vehicle (V2V) and Vehicle-to-Infrastructure (V2I) radio communication Frequency chosen specifically to limit the range to approximately 300 - 500 meters - Effectively limits the number of v
Slide 19: Strategy Recap
Strategy Recap Visteon Strengthen the Core Move Selectively to Adjacent Products Drive to 12% Adjusted EBITDA Margins Sales Progression (Dollars in Billions) 7% CAGR (2015-2020) 9% CAGR (2018-2020) $3.1 $3.2 $3.6 $4.3 2015E 2016E 2018E 2020E Drive to 12% EBITDA Margin Page 19 Please see appendix for
Slide 20: Short-Term Value Creation Opportunity
Visteon Short-Term Value Creation Opportunity November 2015
Slide 21: Remaining Margin Opportunity
Remaining Margin Opportunity Visteon Visteon Adjusted EBITDA Margin (Electronics and Corporate Only) Historical 6.3% 7.5% 9.0% 2nd Half 2014 2015 Initial Guidance 2018 Initial Guidance Sales $1,504 $3,200 $3,700 EBITDA $95 $240 $335 2015 - 2017 8.9% ~ 10.0% 2015 Updated Guidance SG&A Opp Engineering
Slide 22: Adjusted SG&A Progress and Opportunity
Adjusted SG&A Progress and Opportunity Visteon Visteon Adjusted SG&A as % of Sales (Electronics and Corporate Only) Peer supplier median = 6.4% 8.5% 7.1% 6.3% 5.9% 5.2% Global top quartile = 5.2% FY 2014 PF 2015E 2016E 2018E Long-term Target Progress and Opportunity In 2015, we have trimmed cost str
Slide 23: Cash Flow Opportunity
Cash Flow Opportunity Visteon (Dollars in Millions) Visteon Adjusted Free Cash Flow (Electronics and Corporate Only) Historical Presented in Jan 2015 at Deutsche Bank Conference $15 $20 $105 $150 $40M One-Time FY 2014 2015 Initial Guidance (Midpoint) 2018 Initial Guidance (Midpoint) 2015 Current Gui
Slide 24: Capital Return Update
Capital Return Update Visteon Existing $500 Million Accelerated Share Repurchase (ASR) In progress and to be completed prior to year end Cash funded during Q2 2015 Section 382 Analysis Refinement of calculation, including investor interviews, indicates approximately $500 million - $700 million of ad
Slide 25: Capital Structure
Capital Structure Visteon Even after a $2.5 billion capital return and spending another ~$275 million in 2015 and 2016 on legacy disposals and structure clean up, Visteon retains a substantial net cash position versus our peer group Net Debt / EBITDA (Dollars in Millions) Net Debt / EBITDA (Net Cash
Slide 26: M&A Focus
M&A Focus Visteon Primary Focus - Financially disciplined deals that fulfill critical technology gaps Credibility - Purchased JCI Electronics at attractive multiple plus more than doubled EBITDA through successful synergy implementation less than 18 months after acquisition Key Criteria Enabling tec
Slide 27: Closing Thoughts
Visteon Closing Thoughts November 2015
Slide 28: Closing Thoughts
Closing Thoughts Visteon 2015 Accomplishments for Continuing Operations - Significant year-over-year profit improvement despite unfavorable currency - Achieved upper range of targeted synergies related to JCI acquisition - Returned $500 million of capital to shareholders and committed to additional
Slide 29: Appendix
Visteon Appendix November 2015
Slide 30: Forward-Looking Information
Forward-Looking Information Visteon 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
Slide 31: Use of Non-GAAP Financial Information
Use of Non-GAAP Financial Information Visteon Because not all companies use identical calculations, Adjusted SG&A, 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 pr
Slide 32: Automotive Instrument Cluster Market
Automotive Instrument Cluster Market Visteon Key Criteria High Full reconfigurable TFT Rich 3D graphics Hybrid gauges + 7”/8” TFT 2.5D or 3D graphics Mid Hybrid gauges + 4” TFT 2D or 2.5D graphics Low Hybrid cluster 2-6 gauges Dot matrix or mono TFT 1-4 gauges Small, segmented LCD Global Market Reve
Slide 33: Automotive Information Display Market
Automotive Information Display Market Visteon Key Criteria High Display behind flat/curved lens Touch screen Optical bonding New display technologies (e.g. OLED) Haptics Entry Poke-through display with or without touch No cover lens Graphics processing optional Global Market Revenue Total market: 20
Slide 34: Automotive Head-Up Display Market
Automotive Head-Up Display Market Visteon Key Criteria Augmented Reality W-HUD TFT, laser, or DLP 10°-12°x 3°-5° FOV Luminance 15kcd/m2 Electrical tilt W-HUD 4°-10°x 1.5°-3° FOV Luminance 10-15kcd/m2 Electrical tilt C-HUD Full color 1.2”, 1.8”, 3.1” TFT 3°-8° x 1.5°-2° FOV Luminance 6-12kcd/m2 Kinem
Slide 35: Automotive Audio Market
Automotive Audio Market Visteon Key Criteria Display Audio 8” color TFT Capacitive touch 2D graphics CarPlay, Android Auto, CarLife Bluetooth, WiFi, USB Audio Low LCD or silver box AM/FM/digital radio USB, Bluetooth Class AB amp Global Market Revenue Total market: 2015 $6.6B / 2020 $8.4B / CAGR 5% 2
Slide 36: Automotive Infotainment Market
Automotive Infotainment Market Visteon Key Criteria High 10”-12” color LCD with touch 3D graphic OpenGL Multiple user / multiple HMI High-end embedded navigation USB/Bluetooth/WiFi multimedia Cloud apps Mid 8”-10” color LCD with touch 3D graphics OpenGL Embedded navigation USB/Bluetooth multimedia C
Slide 37: Automotive Telematics Market
Automotive Telematics Market Visteon Key Criteria Wireless Gateway Multiple access and wireless connections Data caching/Adv FOTA Adv. Security and Smart IP Routing TCU Cellular / Bluetooth / Wi-Fi Remote vehicle functions FOTA node / remote diagnostics Internet connectivity / IP router eCall Emerge
Slide 38: Advanced Driver Assistance Systems (ADAS) and HMI
Advanced Driver Assistance Systems (“ADAS”) and HMI Visteon Integrated Vision ADAS Focus on integrating camera-based safety features in IC and infotainment Rear camera, surround view, forward collision warning and lane departure warning New “driver monitoring” feature for drowsiness detection Integr
Slide 39: 2015 Guidance Reconciliation
2015 Guidance Reconciliation Visteon Adjusted EBITDA (Electronics & Corporate Only) (Dollars in Millions) Electronics & Corporate Only 2014 2015 2015 FY Guidance 3rd Qtr YTD 3rd Qtr YTD Low-end High-end Adjusted EBITDA - Electronics & Corp Only $37 $113 $67 $211 $265 $285 Interest expense, net 4 15
Slide 40: 2015 Guidance Reconciliation (cont'd)
2015 Guidance Reconciliation (cont’d) Visteon Free Cash Flow and Adjusted Free Cash Flow (Electronics / Corporate Only) Electronics/ Corp Only Electronics / Corp Only 2014 2015 2015 FY Guidance (Dollars in Millions) 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Full Year 1st Qtr 2nd Qtr 3rd Qtr YTD Low-end High-e
Slide 41: Restructuring / Integration Update
Restructuring / Integration Update Visteon We expect to incur restructuring / integration cash outflows for Electronics and Corporate of $80 million in 2015 and $55 million in 2016 - All cash payments relate to expenses that are excluded from adjusted EBITDA We also expect to incur $364 million in c
Slide 42: www.visteon.com
Visteon www.visteon.com Page 42