Visteon Corporation · NASDAQ:VC
Visteon — Merger or Acquisition (May 2005)
26 slides from Visteon's merger presentation, May 25, 2005
Slide 1: Analyst Presentation Visteon: Ford MOU Update
May 25, 2005 Analyst Presentation Visteon: Ford MOU Update
Slide 2: Forward-Looking Statements
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 3: Guiding Principles - Visteon Goals
Gain ability to run our company and control our destiny Achieve long-term financial viability and improve short term liquidity Focus on core products that can deliver technical and product advantages for our customers Ensure seamless support for our customers Provide an environment for growth and de
Slide 4: MOU Overview
MOU Overview Transfer all Master Agreement UAW plants and related Mexican plants, technical centers and warehouses Ford to forgive remaining UAW and certain salaried OPEB liability Ford to reimburse up to $550 million of future Visteon restructuring Ford to pay for current inventory at closing of ap
Slide 5: Benefits of the new Ford-Visteon Agreement
Benefits of the new Ford-Visteon Agreement Allows Visteon to focus on its 3 core businesses Climate, Interiors & Electronics Streamlines and improves cost structure of North American operations Balances sales by customer and region Reduces reliance on Ford North America Provides additional near-term
Slide 6: The New Visteon
The New Visteon
Slide 7: Context: Before and After the Agreement
Ford Business Number of Businesses Number of Plants (North America) Average Wages and Benefits (North America) 64% 7 58 $38/hr 50% 3 36 $17/hr At Spin 2005* Before 2005* After Revenue $18.9B $11.4B 84% 9 63 $39/hr $19.5B Context * 2005 revenue estimated
Slide 8: Focus on Core Products
Pro Forma 2005 Revenue ($11.4 B Estimated) Global Market Share Climate HVAC # 5 Powertrain Cooling # 4 Electronics Audio (OEM) # 2 Driver Information # 2 Powertrain Electronics # 5 Lighting # 7 Interiors Instrument Panels # 2 Series 1 Climate 4 Electroics 3 Interiors 2.8 Other 1.9 Other 16% Climate
Slide 9: Winning in the Market
Series 1 Other 0.11 Climate 0.32 Electronics 0.29 Interior 0.28 Cumulative 2002-2004 Non-Ford New Business Wins (Total $2.3B) Electronics 29% Climate 32% Interiors 28% Other 11% Winning in the Market Series 1 Asia 0.22 North America 0.41 Europe & SA 0.37 Cumulative 2002-2004 All New Business Wins (T
Slide 10: Strong Position Across Global OEMs
Strong Position Across Global OEMs Strong Position Across Global OEMs Strong Position Across Global OEMs 1. Ford Motor Company 2. Renault / Nissan 3. Hyundai / KIA 4. PSA / Peugeot 5. General Motors 6. Volkswagen 7. DaimlerChrysler Non-Ford Customers will account for half of global sales
Slide 11: Extremely Dependent on Ford's N.A. Production
Series 1 Asia 3 North America 53 Europe &S.A. 44 Asia 3% North America 53% Europe & S.A. 44% 2005 Pro Forma ($5.7B Estimated) Series 1 Asia 2 North America 77 Europe &S.A. 21 Asia 2% North America 77% Europe & S.A. 21% 2005 Before ($12+B Estimated) Extremely Dependent on Ford's N.A. Production Ford
Slide 12: Improved Regional Diversification
Total Estimated Revenue by Region Excludes unconsolidated JV revenue 2005 Pro Forma 2005 Total NA 63 EU & SA 26 AP 11 2005 Post Agreement NA 39 EU & SA 43 AP 18 2005 Before Improved Regional Diversification Asia 18% North America 39% Europe & S.A. 43% Asia 11% North America 63% Europe & S.A. 26%
Slide 13: North America Manufacturing Footprint
Series 1 Climate 28 Electronics 34 Interiors 28 Other 10 By Product By Customer Manufacturing Footprint United States Mexico Canada Country # of Plants 22 13 1 Technical Centers Country Products United States Mexico Climate, Interiors, Electronics Electronics Climate 28% Electronics 34% Interiors 28
Slide 14: More Competitive North American Footprint
Before After Average Plant Size (ft2) 600k ft2 300k ft2 Plants more than 1M ft2 14 1 500k to 1M ft2 2 2 Less than 500k ft2 42 33 Before After Average People per Plant 680 500 Greater than 1500 People 6 0 750 to 1500 People 11 6 Less than 750 People 41 30 Smaller plants... .... with lower headcount S
Slide 15: Europe/South America Manufacturing Footprint
Europe/South America Manufacturing Footprint Germany UK France Other Europe Brazil Argentina Country # of Plants 5 7 9 17 3 3 Technical Centers Country Products Germany Czech Republic France UK Brazil Climate, Electronics, Interiors Electronics, Climate Interiors Electronics Electronics, Interiors S
Slide 16: Asia Manufacturing Footprint
Asia Manufacturing Footprint Technical Centers Country Products China South Korea India Electronics, Interiors Climate Electronics Series 1 Climate 71 Electronics 14 Interiors 10 Other 5 By Product Series 1 Non- Ford 91 Ford 9 By Customer Climate 71% Electronics 14% Interiors 10% Other 5% Ford 9% No
Slide 17: MOU Details, Next Steps & Near Term Results
Jim Palmer Executive Vice President and CFO MOU Details Next Steps & Near Term Results
Slide 18: Perspective on the MOU
MOU is comprehensive - addressing legacy costs Visteon has faced Although significant losses are eliminated, additional restructuring actions required to improve our operations in both North America and in Europe Lower revenue base will make it necessary to reduce our fixed costs and overhead struct
Slide 19: Near to Medium Term Actions
Step 1: Finalize the Definitive Agreement Reach Definitive Agreement Maintain Sufficient Liquidity Step 2: Restructure the New Visteon Right Size Fixed Costs Globally Engineering/ R&D S G & A Manufacturing Plant Restructuring US Mexico UK Continue to Grow Asia Profitably Infrastructure Alignment and
Slide 20: Agreement Highlights
Element Detail Plants and Facilities All 14 UAW Master Agreement Plants All UAW Master Agreement employees and OPEB liability Related Mexican Plants, technical centers and warehouses Cash and Debt $550 million for restructuring Short-term secured loan of $250 million available after definitive agree
Slide 21: Agreement Highlights
Element Detail Services and Employees Visteon to provide business services (IT, HR, Accounting, etc.) at cost for 39 months Managed entity to lease certain salaried and hourly employees from Visteon at cost Other Plants Incremental revenue to offset, in part, losses on select fuel tank programs Inte
Slide 22: Warrants
At closing, Ford to be granted warrants to purchase 25 million shares of Visteon stock Term of 8 years Exercisable after 12 months, or on change of control Exercise price of $6.90 Fair value of warrants to be recorded as expense when granted Maximum dilution of about 16% if settled completely in new
Slide 23: Short-Term Liquidity
Cash of $809 million as of March 31, 2005 Improvement in payment terms for Ford US receivables will generate additional cash Under the MOU, Visteon to receive $250 million short-term secured loan from Ford for August bond maturity Reimbursement of $550 million for restructuring charges $300 million
Slide 24: Restructuring Funding Arrangement
Restructuring Funding Arrangement Cash Available $400 Million $150 Million Form of Funding Escrow account Ford reimbursed Use of Funds VC restructuring "Leased" employees Term 2012 2009 Residual Interest Visteon Visteon Funding 100% at inception As incurred Payments: 100% funding Up to $250 Up to $5
Slide 25: Why This Makes Sense for Visteon
Why This Makes Sense for Visteon Focuses on core businesses Improves cost structure and manufacturing footprint Enhances regional and customer diversity Provides additional liquidity Provides funding for necessary restructuring actions
Slide 26: Visteon