Visteon Corporation · NASDAQ:VC
Visteon — Automotive Analysts of New York (January 2007)
36 slides from Visteon's conference presentation, Jan 11, 2007
Slide 1: Business Update and Outlook
Business Update and Outlook Automotive Analysts of New York January 11, 2007
Slide 2: Our Plan
Action underperforming and non-strategic facilities Achieve competitive cost sourcing and footprint for manufacturing, engineering and SG&A Increase quality and on-time delivery Optimize supplier partnerships Identify / implement operating efficiencies Reduce premium costs Deliver financial results:
Slide 3: Restructure
Restructure Completed 11 actions in 2006 Fixed 3 facilities Closed 6 facilities Sold 2 operations Other actions announced Salaried census reduction Closure of Chicago $318 million cash available in escrow account end of 2006 Restructure Control our destiny Please see appendix for important disclosur
Slide 4: Shift to More Competitive Cost Countries
Shift to More Competitive Cost Countries Manufacturing Engineering High Cost Low Cost 2005 Actual 3423 903 2006 Actual 3074 1249 Significant Progress 10% Reduction Growth in China, Czech Republic, and India High Cost Low Cost 2005 Actual 21081 19399 2006 Actual 19405 20422 8% Reduction Growth in Chi
Slide 5: Improve Base Operations
Improve Base Operations Improving key operating metrics Quality, safety, investment and efficiencies Near-term performance impacted by: Lower volumes, unfavorable customer / product mix Commodity costs and supplier financial condition Headwinds from European labor disruptions Improve Base Operations
Slide 6: 2006 Production - Key Visteon Platforms
2006 Production - Key Visteon Platforms Ford North America Ford Europe/PAG Nissan North America PSA Renault Hyundai / Kia Y/Y Units 10% 15% 14% 16% Significant Volume Declines at Top Customers 10% 10% Page 6
Slide 7: Key Operating Metrics
2005 2006 2006 Adj PPM 36.8 36.64 26.9 Key Operating Metrics 2004 2005 2006 LTC 0.44 0.4 0.22 Safety 2004 2005 2006 PPM 277 218 77 Quality - PPM's 2005 2006 Plan 2006 E Sev. Rate 586 450 375 Premium Costs Cap-Ex Spending 45% 65% 27% 36% Please see appendix for important disclosures regarding "Forwar
Slide 8: Grow the Business
Grow the Business Significant new business wins in 2006 - - diverse products and customers Majority of new wins will be manufactured in lower cost facilities; business losses weighted towards high cost, legacy facilities Significant investment required in near term - engineering and capital investme
Slide 9: New Business Backlog
New Business Backlog Backlog is: Net awarded business Launched over next 3 years Excludes high confidence wins 80% of new wins will be manufactured in lower cost facilities $1.0 Billion Backlog 2007 2008 2009 Backlog 0.106 0.493 0.427 Please see appendix for important disclosures regarding "Forward
Slide 10: NA International Auto Show
NA International Auto Show NA International Auto Show NA International Auto Show NA International Auto Show Hyundai Veracruz Visteon content: HVAC system and cockpit module BMW 3-Series Convertible Visteon content: Factory installed HD Radio(tm) technology Ford F-250/350 pickup Visteon content: Inte
Slide 11: Outlook
Outlook
Slide 12: Outlook Overview
2007 will be challenging for the industry and Visteon North America production and vehicle mix UAW negotiations Continued supply base stress Forecast improvement in 2008 Focus on restructuring execution and cash flow management May take opportunistic actions to further enhance liquidity Overview * P
Slide 13: 2007 Production - Key Visteon Platforms
2007 Production - Key Visteon Platforms Ford North America Ford Europe / PAG Nissan North America PSA Renault Hyundai / Kia Please see appendix for important disclosures regarding "Forward Looking Information". 2006E 2007P Y/Y Units 10% 15% 14% 16% 10% 10% Page 14
Slide 14: Product Sales - 2007 vs. 2006
Product Sales - 2007 vs. 2006 2006E Product Sales $10.9 Billion 2007E Product Sales $11.1 Billion Drivers Impact of Plant Closure Volume, Mix and Pricing New Business Directed Source / Exchange * Please see slide titled "Forward Looking Information" in the appendix to this presentation for further i
Slide 15: Restructuring Update
Restructuring Update 30 facilities identified for restructuring: 11 completed in 2006 19 facilities to be addressed over the next three years Incremental actions driven by: Volume reductions Capacity rationalization Make / Buy opportunities Facilities Requiring Action * Please see slide titled '"For
Slide 16: Restructuring Spending & Savings
Restructuring Spending & Savings 2006 LTD 2007 2008 2009 Escrow 141 121 60 24 Visteon 12 60 23 Accomplished 2006 actions with lower escrow utilization Cumulative savings greater than prior estimates - incremental actions End of 2009 - Remaining escrow funds, excluding interest earned, of approx. $50
Slide 17: 2006 and 2007 Outlook - Summary
2006 and 2007 Outlook - Summary Elimination of one-time items from 2006 Achievement of restructuring savings, headcount reduction and movement to LCC Margin reduction for lost business/reduced volume - fixed cost absorption Start up expense related to LCC transition 2006E 2007E Product Sales $10.9 B
Slide 18: EBIT-R - 2007 vs. 2006
EBIT-R - 2007 vs. 2006 2006E EBIT-R ~$20M 2007E EBIT-R ~$(50)M Drivers "Business Equation" Plant Closures Nonrecurrence - 2006 Items Sales - Volume / Mix / NB Restructuring Savings Business Equation = Cost performance net of customer productivity * Please see slides titled 'Use of Non-GAAP Financial
Slide 19: Cash Flow, Debt and Liquidity
Cash Flow, Debt and Liquidity Expect free cash flow use in 2007 and 2008 with 2009 positive No significant debt maturities until 2010 Cash balance of $1.0 billion end of 2006 (70% in US and Europe) About $270 million availability on ABL facilities May pursue opportunistic capital market transactions
Slide 20: Potential Actions to Accelerate Plan
Potential Actions to Accelerate Plan Execute divestiture opportunities Climate business synergies Outsourcing alternatives - lower cost and investment Tax structuring Optimize each product group Driving for Shareholder Value Creation * Please see slide titled "Forward Looking Information" in the app
Slide 21: Visteon Transformation
Visteon Transformation
Slide 22: Diversifying Customer Base
Hyundai/Kia Ford ROW Nissan Ford NA DCX 2006E 1.7 2.6 1 2.3 0.2 2009E 2.9 2.4 1.1 1 0.5 Diversifying Customer Base Hyundia/Kia growth offsets Ford decrease 2006 vs 2009 Product Sales 26% 22% 10% 9% 4% * Please see slide titled "Forward Looking Information" in the appendix to this presentation for fu
Slide 23: Balanced Global Sales
Balanced Global Sales 2006 E - $12.8 Billion Sales include consolidated net sales of $10.9 billion and non-consolidated net sales of $1.9 billion in 2006. Sales include consolidated net sales of $11.0 billion and non-consolidated net sales of $3.09 billion in 2009. Please see slide titled "Forward L
Slide 24: Halla Climate Control
Halla Climate Control Established 1986 Visteon became largest shareholder in 1999 $1.4 billion market capitalization end of 2006 Visteon ownership 70% Public ownership 30% 12 facilities 3,700 employees Further integration opportunity with Visteon Climate operations
Slide 25: Halla Footprint
Halla Footprint Est. Canada 1989 Portugal 1996 Thailand 1996 India 1997 China - Beijing 2002 U.S. (Alabama) 2003 China - Dalian 2004 Slovakia 2004 Turkey 2005 Korea Footprint Overseas Operations
Slide 26: Halla Sales Growth
2001 2002 2003 2004 2005 2006 Est Total 820 930 1130 1440 1705 2160 Halla Sales Growth 21% 5-Year CAGR ($ in millions)
Slide 27: Yanfeng Visteon
Yanfeng Visteon Established in 1994 Non-consolidated affiliate Visteon ownership - 50% SAIC ownership - 50% 26 facilities 11,000 employees Opportunity to further leverage
Slide 28: Yanfeng Visteon Footprint
Chongqing Liuzhou Shanghai Beijing Shenyang Yantai Yizheng Wuhu Guangzhou Yancheng Changchun Xuzhou Shaoxing Shenzen Wuhan Shiyan Yanfeng Visteon: Interiors/Exteriors - Shanghai, Pudong, Beijing, Yantai Shenyang, Wuhu, Yizheng, Liuzhou Chongqing Yanfeng JCI: Seating - Shanghai, Pudong, Chongqing Yan
Slide 29: Yanfeng Visteon Sales Growth
2001 2002 2003 2004 2005 2006 Est Total 314 497 846 843 949 1315 Yanfeng Visteon Sales Growth ($ in millions) 33% 5-Year CAGR
Slide 30: Yanfeng Visteon - China Market Share
Seats Door Panels Clusters IP / Cockpit Audio Bumpers Market Share % 0.27 0.22 0.18 0.18 0.11 0.07 Yanfeng Visteon - China Market Share Source: Industry Reports, Company Estimates - 2005 Data Market Share % # 1 # 1 # 1 # 3 # 3 # 1
Slide 31: Visteon's Path to Profitability
2007 - 2008 Achieving significant improvement 2009 + Attaining sustained profitability Visteon's Path to Profitability 2006 Setting the foundation Free cash flow positive Lower debt levels Growth of business - full impact of new programs Majority of restructuring completed Headwinds from production
Slide 32: Summary
Summary Near-term industry dynamics challenging Restructuring actions and sales growth will aid results over the longer term Sufficient liquidity and escrow account to fund restructuring Working on the right operational items - will optimize each product group to create value for shareholders Drivin
Slide 33: 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 a
Slide 34: Use of Non-GAAP Financial Information
Use of Non-GAAP Financial Information Throughout this presentation, the Company has provided information regarding certain non-GAAP financial measures. These measures include "free cash flow," and "EBIT-R." Free cash flow represents cash flow from operating activities less capital expenditures. EBIT
Slide 35: EBIT-R Reconciliation to Net Loss
EBIT-R Reconciliation to Net Loss (in millions) Note to Reconciliation: Full year 2006 results are preliminary, unaudited and subject to change
Slide 36: Free Cash Flow
Free Cash Flow (in millions) Note to Reconciliation: Full year 2006 results are preliminary, unaudited and subject to change
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