Visteon (VC) 27 Oct 222022 Q3 Earnings call transcript

Good morning. I'm Ryan Ghazaeri, Director of Capital Markets and Strategic Planning. Welcome to our earnings call for the third quarter of 2022.

[Operator Instructions]

of morning's forward-looking like of statements Securities Reform this this remind the begin Litigation contains presentation within Act we call, to I'd you Private Before XXXX. the meaning

the on of expressed Forward-looking statements are to Please in to cause these the page to information posted today's additional factors, various call this Presentation differ website results details. download if you could to investors.visteon.com for conditions, and that section actual entitled but statements. subject have done uncertainties future risks materials our Investors morning. are not forward-looking for rather, material visit and Visteon's of already materially guarantees were not results from Please refer those so. the

President Rouquet, and Lawande, Financial Executive Joining and Chief are and Senior President us Jerome Officer. Sachin Officer; Vice Chief today

scheduled the open Jerome's We and for Sachin lines for call have hour, and questions after remarks. X we'll the your

I for turn your Sachin. X us. and questions to the to over joining question Please limit X call Thank will follow-up. you now

despite have Brian. everyone, and quarter. quarter summarizes industry-wide costs. and third for our Page joining call. very earnings that production XXXX results morning, you, performed well company for challenges the our Good The impacted thank third vehicle you Thank the inflated X

company. third Our the year-over-year, sales quarter making of I an increase since $X.XX billion, it joined sales XX% were quarterly the highest

The quarter inflow to customer strong or by partially an prior $XX sales as an growth free million was and performance. sales industry increase million the market of flow Adjusted company of production, third and than million commercial X.X% of XXth vehicle to year global our was $XX to our of due quarter consecutive better capital. of working cash compared sales, of the EBITDA compared another delivered discipline. quarter EBITDA operational Adjusted strong increase and offset strong an $XX was for higher

all of our third driver product in sales growth at double-digit percentage growing is levels sales the with our launch cadence core major robust the of products Our quarter.

new growth. $X which third contribute track achieve business slightly target of XX Year-to-date, year-to-date sales in we our will and won us continued about launched billion our bringing on $X putting future billion. to to to have total quarter, $X products, over billion full of the year new We

We display line the continue the over we made past build to few momentum years. in product our with have investments

at third well the XXXX, Since start have will the the end as displaced as to won of the market. the discuss before provide of quarter near-term billion mostly performance business our outlook financials. to pages our Jerome $X.X on details we it of I on automotive and high more over handing subsequent

and grew Page all with recoveries Turning in growth vehicle the X. year-over-year, of production about Visteon unfavorable product core sales impact exchange, XX% When to foreign favorable growth over from in period. the excluding QX the This same double-digit strong lines. from impact to XX% compares

with products Our of core as strong the industry launched the mix due ramp-up both well recently in largely products as trends automotive. reflect alignment key of to outperformance favorable of which market was vehicle our

company, and particularly ramp-up which clusters, product of with about total globally growth up year. of due Digital in nearly are Ford recent doubled the the Digital North last make launches clusters GM. by line clusters largest well the the and driven shipments. and rapid sales Clusters now half did of primarily America cluster was digital for our from growth our cluster to

recovered our line. Recently nicely which the by panel strong product second in doubling critical display last up higher product drive chips one also fastest-growing from Our was to of the product domain in year, shipments growth ICs our case and This both include shortage with supply of India. the the Display impacted year of benefited XX% controller were in cluster this this as quarter last which line, Tata launched Ongoing year. helped QX launches. the programs system compared cockpit to in new also in than half addition sales business business. infotainment Mahindra to supply SmartCore was year-over-year. more has continue Geely, of SmartCore has China displays launches EV year-over-year, of SmartCore and digital companies resulting in and with

of account new the that to carmakers, I from up with proactive of were Ford in in for Even sales products and however, with the be with earlier. QX the Americas without efforts create most all a mentioned possible The in team. regions growing Our undertaken about compared the headwind dollar currency the quarter year-over-year, did, on GM entire ramp-up X% the as not the company's performance demand year. Visteon by prior us of strong would strong

did market redesigns our suppliers over and The We discussions also XX semiconductor products to more constant well open a alternate to finding of through supply in job from with and maximize customers. have shipments great to progress. chips launched securing team work as are in chip the as around shortages validating

X. Turning to Page

will This for of additional XX product with these performance. key current of QX, the of brings launch And driver strong X/X a were digital continued launches new with we are for Visteon's our launches trends, launch industry continue help for X launches the new launches cadence of vehicles. About were Also in year-to-date of to line for half product which supporting the sales new new the clusters, our quarter. about program growth electric fourth New the for key Visteon. planned the this launches programs.

launched on the in XX-inch one Serena a Japan, model in and for core on market. This cluster QX Minivan in domestic this key digital are vehicle that will Some our also vehicles be of the Nissan. in a launched highlighted Serena The family the first Korean We Nissan most is in page. Japan popular the sold region. programs of

infotainment user experience over-the-air drive and cockpit. and information the modes multiple supports system cluster from phone improved software of display digital for updates in This the multimedia

a an display This to is trend early segment mass in Kia affordable expect are cross launched from gain and system Australia segments, top also X seeing momentum Multi was in cluster SUV. launched XX-inch as also similar is to displays X-wheeler the trim of to and U.S. starting follow year. We we go next The Seltos, Korea with with systems market to midsized on which for over trend this luxury multi-display infotainment and we a of product cockpit digitization. forward.

gauge, be a equipment of on launched platform, cluster Honda's XXX and all-new digital above. of as higher-trim X motorcycles gear iOS cluster drive on data. CBF are is This and offers as a Android user works that platform. with In new a different and system choice both offered The with this cc QX, as bike-related Bluetooth standard headsets we and models Honda other well indicator modes and a phones. X-inch helmet-mounted via of digital launching will series on selectable cluster connects motorcycle our fuel

launched new in Mercedes launched programs, BMS in cluster these that quarters, to wireless products our in follow-on sedan the system SUV several earlier of the were page. prior on which launch launched addition on on QX digital launches we following EQS our the a our this this electric We previously great where In are a of China, Cadillac this In of year. electric highlighted the vehicle go are vehicle is multiple first delivering in cross-platform launch better return of part which on a Lyriq, from U.S. investment. all-electric business GM, of quarter follow-on on our models the products the becoming which on crossover the examples launches in year. These follows of that and the bigger couple

quarter our for good to nearly emerging areas Turning $X with to $X about wins most year-to-date strong Page across were of new brings This billion another which of electronics. business with was in total a X. core all products. wins, billion our automotive distribution QX wins in

which We the new also $X the put achieve on pipeline in full to of a track quarter, our of opportunities target for us should billion see good year. fourth

wins were and large system a quarter management announced win battery wins. on Our incremental the in business wireless led previously besides by cluster digital display third

several in the quarter. wins key we the the side On of right highlight page,

win extension the models and incremental booking. previous both to our wireless announced The system. for represents This business win previously highlighted is of battery management volume compared incremental vehicle an through first the for win business

this to manage system configuration pack of and new greater increasing module OEM's our in a of vehicle. greater requires content introduces for addition, battery number BMS the change a cells the win power pack, In per density. thereby battery This the

in meet changes the of to such highlights of to evolving the configuration wireless also OEMs. battery support award This pack BMS our design flexibility needs

of production line XXXX. and digital highlighted XX-inch display XX-inch with North in American second separate a a first a The center win a is starting information OEM's electric vehicle combination for the cluster

side page. This system advanced last feature offers our and win to OEM. vehicles. multi-display the a cockpit Multi-display systems the relatively German driver. for center with the The active in a about with the to infotainment a display of with content luxury but future, for multi-display business of of the first highlighted third display OEM. next-generation end new emerging different key quickly earlier German display content key the discuss display privacy the the will systems module luxury second differentiating follows next weaving of Multi-display industry, as multi-displays is with the passenger luxury with is and our more starting on cockpits German are distracting and designs this the luxury for a becoming multi-display are are win features with of without QX large luxury OEM information the passenger and I a win part year center information market. This

digital single opportunity clusters. total percentage grow Turning or another our sales with relatively cars us fastest-growing X segment segment. cover to displays car The a mostly automotive segment lens Currently, to glass Page incorporate our luxury vehicle multi-display systems more value-added sales, small under share expected for cockpit features X. be that a of of make to The luxury to in luxury gives emergence the is of electronics.

leader cockpit. capabilities to $X.X trusted the OEMs development wins majority has emerged large the as systems. billion in past of about from years, resulted winning partner in us More our the recently, multi-display Visteon with displays of Over new and for few investment display the and a coming a business, display-related of technology has new for

just displays industry. starting vehicles of displays in cockpits are cockpit. trend gain center offer a information behind The from car offering to their momentum displays to to that looking the large differentiate pillar is single OEMs the mass Luxury pillar multiple increasingly in are lens to cover market using

to In new addition display, vehicles. that the of the luxury differentiate in their interested capabilities can car OEMs are large size further

to new narrow gap and and bezels makes them. driver feel area without shows of while technologies side causing the the page the display for entire Ultra-thin easier passenger passenger it that the the is content the multi-display driver. view display. like between some seamless entire weaving make This feature displays system distraction wins for Curve the enables recent a to active incorporated single of privacy displays large in key display the by

requirements very Visteon lifespan. All product and we are the these developed implement new of was able on and these the challenging have especially to of programs features address manufacturing account quality, safety considering technology win capabilities challenges. strict to automotive to these

significant are German presents the automotive the business days leading In cockpits, and systems have are emergence cockpit opportunity growing we I'm led in this market we by pleased bring new on in made summary, more won industry, continuing that the and the believe for and focused early of we Today, trend. and lead we Visteon. in inroads multi-display quick innovations maintaining with in position OEMs to to of our Japanese a the and displays. luxury

the them. affordable, in market expect become As vehicles segment more to incorporate I of mass the also these displays market

keep Turning to the to the remain to enable will and environment Due We to modest driven suppliers strong shortages to suppliers, expectations. chips well as saw the Page which the from be redesigns the expect X. in for compared vehicle semiconductors, of to consumer lower QX. as in to Semiconductor that close primary industry open trends QX. products Demand purchases levels market anticipated the by will QX industry, of alternate open we use constraint we and us the to from supply automakers product sales industry market. as likely from to both improvement production QX availability our respond from similar QX. in remain be Visteon anticipate will be chip for as OEMs

due quarter. chips to disruption of critical the than in Any remains supply supply in production increased Europe vehicle with semiconductor logistics in buffer quality more Nonetheless, inherently concerns many or the our energy sales to unpredictable it disruption to situation, issue to easily This combined having difficult can result no forecast supply supply. the with usual chain. in makes

We have sales in will guidance range more later. for opted Jerome a wider-than-normal that to therefore discuss maintain detail

these We situation beyond fluid will the of continue expect many which to keep into challenging XXXX, dynamics and QX.

result past be we'll our a with guidance in consistent providing on As February. QX earnings our practice, and XXXX call

that on smooth QX extent things address and on mitigating production of to ensuring focus we in while remains the ramping launches customers. more are these our Our products new to in from the headwinds includes possible. This are seeing of greatest the demand impact control

a strong Our ongoing And put QX base critical that maintain for will so position in of well will will options solid XXXX. has the believe we in served actions us set give and us these future. commercial a in to redesigns and operational deliver far. product us more good results course, the to chips discipline We

to semiconductor to We adjusted delivered quarters. with operational which strong on the recent margin EBITDA well sales In summary, company X. the the resulted solid continued vehicle trend production, shortages. team Turning a of relative growth X.X%. commercial plans, performed of and very Page to record ongoing in our execute The accelerating despite customers'

to needs business of portfolio the launch our of XX well product new $X emerging support and industry. billion year-to-date, to our products the positioned build with and foundation momentum in new is We continue in wins

results. review will presentation turn I to Now the the Jerome over to financial

Thank reflect performance. morning, Visteon's you, everyone. third Sachin, results quarter quarter of and strong financial another good

side a and of the business. representing remarkable Visteon. the another record were commercial both on Our on sales QX operational teams billion, continue the quarter for $X.XX do to job,

sales strong performance launches product continues driven ongoing to high-quality Our be quarters. recent by from

still engineering open on we constant purchases. customers interactions While customer through shortages and demand the supply through improving redesigns with focusing as remains elevated, are suppliers navigating as through and semiconductor market well

discipline. benefited higher million, chain shortages costs supply elevated $XX volumes X.X% this from margin sales remained constraints the well was commercial cost quarter. Incremental EBITDA for EBITDA as from ongoing semiconductor Adjusted as a of representing Adjusted and quarter. and

track. We and on negotiations our continue to mitigate actively remain inflation, customers with

were $XX higher for of result quarter, as free of was points. million, supply ongoing from inflow XX and basis to Customer margins cash optimize capital open levels our continued the chain recoveries approximately the market disruptions. expenditures. purchases by driven by activities Adjusted the quarter a million $XX an approximately EBITDA diluting in Inventory flow increased primarily

position million $XXX with of of quarter in a the $XX ended million. cash We a of total debt. resulting million and cash net $XXX

Turning to Page XX.

to represents and quarter sales favorable to Third level product of and highest offset of $X.XX billion rates. increase customer million of year-over-year an driven unfavorable our exchange of XXXX compared growth sales market strong by launches volumes, primarily recent increase the year. higher production partially This due $XXX last pricing, is since by

unusual a which sales pricing, approximately Excluding million, excluding the levels, positive this from $XXX sales been year-over-year impact the million, would $XXX providing was have pricing for proxy year. dynamics

and sales cadence customer year our compared outperformance XX% digital launch Pricing products. recent for increased cockpit robust QX by market was prior to by approximately quarter by of XXth the driven recoveries. demand mostly consecutive our the driven cost customer

primarily semiconductors due open X.X%. purchases expansion For customer representing million the in increase XXX $XX to and $XX to Adjusted increased Adjusted year basis to included an quarter, recoveries approximately to is of EBITDA of EBITDA sales. margin market a points $XX related prior compared was higher million of pricing. million, of

impact adjusted semiconductor an continued discipline cost, to us prior from Our year. the quarter is from commercial to allowed material minimize which and high improvement this EBITDA

net adjusted associated purchase modestly the remain elevated However, EBITDA engineering and approximately points. SG&A market basis prior the were recoveries and Compared higher. by by year, diluted XX margins costs to open

as a the also the year-over-year of dollar. headwind of Finally, foreign exchange a strength result was

costs recoveries purchases when constraints would been million, and for customer more EBITDA reflecting $XX Excluding market XX.X% normalized a to open associated margins of from the rate to abate. begin have closer semiconductor run

$XXX and million, Page $XX the net XX. to debt million. of Turning a total with position of a $XXX ended million of position We cash resulting cash in quarter

more the to in sheets debt. one the balance We continue of cash industry have strongest than with

credit a agreement and now credit undrawn on of and both As call, with million million a rate we loan have current an our X.X% July facility, in refinanced we our maturing XXXX. in interest discussed term $XXX last $XXX

inflow timing as from higher between expenditures. the shortages through in and the quarter flow year-to-date million free $XX the an million the reducing capital quarter levels Adjusted continued payments supply to the cash increased remains. while first continued net EBITDA focus was in of quarters. on the cash in $XX collections free optimizing customer Adjusted and supply Inventory benefited quarter, outflow X mismatch flow chain

current decline than to capital extent full will QX than we in a We resulting for levels anticipate anticipated working inventory the of lesser in initially year. the but a outflow forecasted, to compared levels, previously higher

XX. Page to Turning

result of our full are the and year we first months EBITDA. a As guidance throughout strong of performance X the adjusted year, for increasing sales our

We are cash reflect lowering recoveries open as $X.X $X.X We're prior that a purchases slide. on I increasing flow semiconductors customer free elevated. the to to our and remain full sales billion full reflect outflow market of to higher higher mentioned market capital working the our billion adjusted year to growth year of approximately of range

we sequentially. will sales and essentially Visteon's flat production Compared underlying that customer be to QX, volumes anticipate

reduction of However, the the open of semiconductors we're associated factoring guidance, at of midpoint market currently a and recoveries. purchases

in range open level difficulty our to required reflects mentioned, support the particularly in production for in of be customers our in pricing volumes QX. also that and Europe, in forecasting it Sachin the the may uncertainty purchases QX accounts As but market

underlying Adjusted which million. EBITDA is material in are QX be to for $XXX adjusted will We while engineering our will on impact have to net a year higher a offsetting expense. EBITDA anticipate benefit year expectations our full largely to of increase recoveries, increases $XXX cost higher minimal from is in the raising modestly sales, do EBITDA. line million with We net customer QX, which adjusted will full compared range engineering

We anticipate million million strong capital. adjusted year. inflow free expenditure now and $XX $XX anticipate free full cash a from discipline will will for adjusted cash $XXX ongoing the capital EBITDA, reflecting be million and we be between an to million, working In QX, $XX flow flow approximately

dynamic. QX the updated environment our summary, months acknowledging strong In first remains X still of very our reflects range in that while guidance is a the year,

Turning to compelling opportunity. long-term Page Visteon remains XX. investment a

well and free growth provide We for generation flow sheet your have call I for your positioned to significant you strong cash line margin top expansion today. company our for balance the continues flexibility. and time questions. will open now the Thank

Instructions] [Operator

comes of with Wolfe the question Patil first Your from Shreyas line Research.

Maybe to I start just wanted with SmartCore.

mentioned see how high to quarter. are new a been wins I've curious software. So with at the you business I didn't working when it But in it level, OEMs in comes embedded the

you talked these -- You've in talked about a high quite previously products. about degree lot of about code Visteon a

it's I to domain know then look further cockpit automakers a think seeing the million also, systems, But multi-domain out, and the of controller. operating you X looking involved lines look XX get are as some OEMs we integrate the cockpit so in code quite more across complex. to we are into

into Visteon that an as curious might about just to area So if well. is where get look

question, that's Thank by the way. a great Shreyas. you, And

more definitely all, to cockpit domain been these years, stride. OEMs hit interested first for integrated in towards products. is And So and now of we seeing trend we of more starting a get saying as this controllers couple have now are

Now these I advanced the of silicon mentioned the and are from you products, and using technology latest are chips some systems have operating that multiple complex, fairly reiterated issue providers. as is

applications the that similar. many and in OEMs chips the are these of Now software the comprised different across at silicon very and the

at of we allows that underlying to to top have SmartCore we developed an the be that attraction those on of this so And platform then of capabilities call able provide is that Visteon, devices applications built it.

industry be it the and user multimedia, to OEM. referred navigation, Android And of of things some would also as would that Auto, Whether to very in this to very sometimes common, be is OEM. like be HMI going very interface But unique specific are CarPlay, course, et the that applications Now some cetera. to specific right?

of our scale a would they're starting the And that want be if on all own So point we system, underlying in to try to is were value silicon their proposition with to change, in that [indiscernible], their better they do own. build OEMs able matters. whether software, to or the that provide than pace

We are for this going to multiple OEMs. do

been developing. these We more that rewritten code, multiple need of to have have programs be assets And these lines to before, we than that this. that have by already doesn't OEMs, build XX multiple that we want million explained have OEMs we

So that's one point.

what predominantly more domain about that controllers. currently. You that the we the in industry, I activity still would asked multi-domain are say today a seeing cockpit is we question see are so controllers

of we more However, it with available, from from functionality this in ] go higher investing integrated developing that get into as emerging safety silicon been that the why that forward the becoming cockpit of performance which business, envision a clearly side or controller. be software. more with is product we software ADAS along whether area even in clear have [ to the can multi-domain we We domains, other want is layer

are to the controller digital address now ADAS that a industry allow us we one coming. merging the we that and of clusters, business this are infotainment be software to see So to in have really will in few multi-domain able

I've will where the with months. something industry is as the maybe mentioned not beyond that this improvements in even this happen It's we But next that do expect, XX see that, is maybe that silicon we headed. XX to

guidance for guidance, -- provide But gave think the volume come margin. you That's XXXX. seen of Great. we've that down about the end XX% I the and $X at then, Jerome And Okay. XXXX, billion market an beginning Obviously, appreciate we next I you'll guidance since helpful. update EBITDA that to think as prior year. expectations really

that still of year target, an So you can actions maybe that And volumes least kind of are if additional cost high even to at market there the into could towards pull could lower, levers EBITDA a support at talk are some level? level, just get end that next you still that take expansion. you you about can on

Sure.

said, you color play that see today, we watching. the and that's QX call. we're and our would final very remains will developing as I still supply-based guidance give the much way So what in we more But a say XXXX

that we challenges especially think semiconductor So next still year. year, continue next the first year see we that will this half of the into

We to therefore, because to like as remain are seeing before, than still parts our general that preventing per these and of the -- to we inability mentioned supply are but got constrained have but close from our are improvements, supplying us critical that orders our would the quarter $X level to product products. of supply we lower billion, XXX% we sales sales

that's I watch to growth would QX. beginning I It's year. area of the carefully. that been the market very has our have been So the think strong in we'll in say fact, of X since strong,

We'll to going of into refine year. We this And go obviously, as expect we have year. far into we'll obviously headwind XXXX. growth that market next year. into It's we the watch, next a been go mid-teens so still as currency

the as 'XX be important. So have assumptions make we'll for well will to

to then area that final we've the look at. pricing And is got maybe

have QX levels in We very spot and QX elevated fact, as had buy well. in in

will a have our supply into will margin. won't effect going recoveries, impact on will positive dollars. year to this It expect as improve. our obviously on somehow that reduce We next have EBITDA And EBITDA reduce an

into as year. consideration go to next that into account So we'll take have we that's another

earnings. there's and a various moving So we'll at these areas QX as point firm up of into lot we go pieces this

Your the next comes Delaney Goldman Mark question of from line Sachs. with

you trends the to it's how how your types on understand be opportunities of of and demand how impacting you're a hoping the order you pretty impacted in levels the macroeconomic generally but from customers, of and program Visteon more is seeing qualitatively bit being that content trends by also terms some both have? the perhaps are some strong. been what has Can contextualize better seen first evolving The may see of

that I Yes, X because very we still take as continues at Demand into quarter we saying to last like is been those to that's first. sure. supply to if for would limited. And if you add have we thing Jerome, look well. here customers strong, main as I'll have, would and strong free. that And that extremely are reiterate it, the our you The that the the quarters, are robust. feel like is look that orders anything very

we factor, this And rest going feel more year, constraints year like we demand. got limiting of so will supply still the face the into the and not probably next as

Now that a these the their offer we technologies the very need continue. look trend is that to continue driven product Digital Larger are going like the if the to strong for lines at displays for the able you few of to are the at reason and the lines, is that will these meet that large are be products customers' clusters also expectations. the carmakers competitive next trend success years in a extent ADAS. the by

as X the And XX look it if quarters the path, have do product So we the we on be that to a will I have we into with which, for QX, that had demand long continue of over as to by at necessarily way, last and launches see had, launches. we've that the reduce. I coming not lot expect

in we Depending have we watching in watching Europe as and It environment, well. looks OEMs yes, We'll Europe for seen that develops. demand. our be QX. very what demand as now, QX and carefully. considerations was impact here, will haven't strong any Europe upon we to we does have see orders happens on the in energy the all extremely And strong we softness here, to watch are how macro Now demand. are on what over other But might this. know in the to what inflation place

kind global billion needed maybe to for needed XXXX. you're comments what And point, help talked one at you roughly do not at of $X of and But LVP helpful. in $XX of being also understand please that That's understand about around being next revenue level point to be be supply at realizing may Visteon level better kind guiding million you production this could revenue us of constraint. the global year,

than You LVP annualized with pass-through know million vehicle time, thought just something or quarter between hit this ago. seems so annualized. growing maybe it $XX a sustainable. like content your to I million is But And year and $X at not same billion $XX was probably per at quarter faster the of revenue the this some you

make around billion will own assumptions So that dynamics. equate LVP of $X where LVP to in these XXXX we sort can think necessary be macroeconomic and chain any inputs be some of about range to our of revenue may supply we given of then and

Yes, couple under revenue the sure. organic the I look One, effectively, of when of is at just would the maybe call $X would quarter, things this pass-through, if revenue, is top yes, it you I billion. at some $XXX shade it the mention. a that. it over But line, million A as

we So that comfortable better even that at of supply or production improves. if this we feel slightly levels could achieve maybe

sight we rate to at be So we run within a need are level. of where

as next still perhaps that that be production target. year the units billion. a at experienced $X achieve lower back understand We growth important time that vehicle that we So for by production, we what's we achieve improve to production, to market need about of level that our which need is that more we that some than of could talked will us vehicles are clearly, billion all our able a to $X think of we but critical million thought holding when not with with the XX now, semiconductors we vehicle have

the fraction golden total are to screws, parts. are the we a These our still parts all at but us only of that portfolio, the hold semiconductor small back. look buy these are can you not of those when Now speak. These so buy

So uplift the we we plus get modest the production to need or an done. in and improvement of combination of that redesigns that a those a have

think XX%, so production reflect of So and from million, obviously vehicle are the about that XX% side I improvement will coming would where if the we that. at say $XXX most supply of and just shy overall, you it

the past and in what of think, X less thought anywhere good thereabouts, be So say should percentage needed I between I enough. be we points will would improvements it or than we

BNP line the Picariello from comes Exane. question of James next Your with

Can pass-through What's million in is updated the on based almost baked-in third the strong quarter here? another assumed can kind you within just you -- what for of the for your recovery, assumption guidance, fourth confirm quarter. revenue the $XXX maybe very

Yes.

assumed be essentially that sales to this level, approximately what QX So product major we've by we've is fact that $XX $XX I spot is difference sales be say, assuming it a similar had level sales what QX. The lower will in QX to by in assumption we've base would that and will baked our be the million. lower million, point we're sales, at

guidance. So that now that's QX of the we in our assumption have for kind

-- with And it I respect from situation kind have to if recovery a this surprise? and go what though purchase you is like that weekly stock what's mean No, in But just is chip how better how from realize guys it there anticipated, you're do the of short wrong. you to that as is to is of how had or I need a Or sounds market. you to or visibility kind it? correct you to dynamic that's third perspective, -- maybe have me -- dynamic turnaround is mean, and the a came in the the helpful. the this I'm I came supply quarter than curious think, heavier

Yes. That's a question. great

week yes, to that by It so And answer week. directly. is

across But And in constrained. But set have with extremely It's is are very day, be semiconductors. earlier, constraint -- the there So it's that the as issue sometimes which have chain. of semiconductors, the mentioned that by supply is not it a the right? dynamic. we every and no concerns all the smaller been week, would buffers of by day I whole

So the production. by be logistics we could just issues affected somewhere. It's some not

to are largely the there impact, we you no be of deal buffers, when and and that can environment what in had are same QX, QX. expect in So things that's know, have as host that a there to we with

softening same were in of cetera. when had industries, even the that expect demand industrial, we at than of our had other happen we a look the with better et imagined Now anticipated in what you to was improvements time, sales at the at why the QX, quarter. those also and supply reason we even better than especially QX, beginning came in consumer,

used industries. use we parts Some those other in are of also the that

from open So would on bit are very you demand than these we is there, the otherwise things which given. expect but dynamic some improvement little a reduce which purchases should to predict, market and wider range hard why have is the

the as going [ you be see extremely is forecasting need about think the off ]. reasons But Sachin what challenging add for if it, of to buy kind first well are short spot parts that's said. to that you I would

would have level. You need kind OEM week, for they're And every the what finally change then of understand day, availability willingness these elevated you and prices very the pay every to to at from be brokers massively. prices. broker's

of us So and And little to parameters it's in that what this daily it forecast varies price hard just basis. makes put a lot recoveries. by a a be have spot got for on therefore, all and bit

Understood. Super helpful.

Just quickly. real very

that BMS wireless product the you BMS? supplying customer, other are besides a second cluster your wireless customer For with any or digital

We are of portfolio vehicles. across their bigger

We clusters of have virtually more that we our a supplier displays part portfolio than you look few customers clusters. of supplying So portfolio are to at are OEMs be mostly for not, digital only are we them, of clusters, a of would right? and for all not if likely our

So yes.

Luke question Junk the next Baird. comes from of with Your line

want differently. better a how that sort $XXX of XXXX has what are activity on progressed redesign this redesigns for. amount the if to also of as close maybe think just billion talking asking it you basis that, of -- is million understand want been, you quarter I course, $X to animate demand the with to you've expand chain has being little but much how ask question, base supply your kind actually to what And I on versus about over can Sachin, evolved. that control level Another so And versus just of customers gap we customers? could the a quarterly from

I extent, that. same target. The a Yes. has set is been sort the in of I'll shifting quantify won't would exactly it great lower. have little bit But that But been constraints a control Good of say the of attributable without a question, have the that, a And not we chips. how much meaningfully to to Luke. of can, remained we revenue And redesigns.

we have chase had to the So constraints a little bit.

we shape in we've be soon development have that a are some redesigns, about multiple progress launched in launched. talked So numbers terms in have will and we of of of that the

even the note redesigns, the to actually as design important we when well. do maintain that we original It's

So chips to that switch to gives the to other. than us that just broader access one rather from

own respect By the of if I So half position about we to should to the in a next think be think execute with supply. way have year, our That's the slate. second we the we it. ones destiny on to control

be relative then value help wireless there's Okay. if of across That is scope terms, this follow-up either helpful. either that your understand to add-on even the to platform would with just a work share quarter great. question, BMS scope customer anything you to And us award or better can the relative initial

BMS step have because Yes. No, about We have for take we if solution. right? back X that that interesting to customers is talked we very a here, our topic a were

towards XXXX systems the industry first packs also One a go But fast battery work BMS to in now in, timeframe. others and started seeing think, charging. production of is between enable to the that through more we them will on what's are is I production enter when voltage and transition higher happening we

really a been is as that has what this see actually accelerating. change we So

BMS, than wireless has all, and what of that of win. and gone about, had see up updated just our have magnitude to also the so are been volumes support X higher this this, the very is And in in vehicles nicely, to kind has designed reflected in you or X think, one, scope And includes the I that, doubled first which then this we the initial more configuration. it board of

are you to as well. anytime BMS. way, that XXX, a more that is voltage by above But greater volts go the only up And have increase, enable battery means to you XXX there need higher for the there's not as ones content cells we voltage, intermediate and

content range BMS about have the earlier to XXX talked we in being terms of around So XXX.

actually of the of But With as closer a would be it might range. end exceeding between price. range will depending voltage XXX say still upon as upper the vehicles, these an that the mix to mix. maybe battery that push that I somewhere XXX end higher OEM that and packs, to average it's of upper average overall, their selling

of the Rosner comes question with Your Emmanuel Bank. from Deutsche next line

Maybe up again. just wireless on following BMS the

they've quoting devices. win there? the these announced BMS all that recently. I initial for another into advanced think with still think something I wireless your X wins Tier this become partner we're And Is

that choice. the wouldn't is announcement. So is silicon specific particular choice the general, it I works mention But of way anything to supplier made in that Tier the X ahead

And partner you at. a can therefore, where multiple we And to we'll would and And bringing about so be closely it engaged you said, particular leave we that's when it. imagine, you get And you are have to long with this as as like with time. OEMs with them. working, to it made, talking certainly for I together been very and decisions these

adjust come to we more and the those requirements. here. we will change as that expect to because newer win remarks these be beginning mentioned earlier discussions, to delayed about conclusion would I have in is thing change some year, of awards be I of has lot to the designs is meet able and voltage hopefully should caused that I say this But to higher since One would a what fairly my a of we had to the these just soon, to this discussions see talk

get working to about in [ and what I to Then Could you sort early go back color. over of guide. free will timing the helpful drivers sort guidance That's the back resolved again. Okay. the the or on of done this cash capital XXXX on flow ask you wanted extent of ] please

Emmanuel. sure, Yes,

midpoint revised at be of our for full level at the to So the cash we've flow guidance XX. year the

guidance of You we may which at was remember XX%. be indicated we the that the have towards already previous would the that time low QX, in range, end

to relates X the it. to of the, and of all change there capital, not working most elements if are So

is The we've one inventory, inventory in QX. first increased

We are QX. a modest reduction have in planning to

the the timing and collection slip quarter the are late And quarter. collection have the second of into makes deals, some recoveries, to the which we item it relates of following fairly therefore, in

we we some, better is leakage differences. with But customers. our So timing would that get are call, improving cadence or I there still on as a

range on XX in we've why as we items. our from as that some kept it improving originally large that's anticipated, lowered not sensitivity reason are to So of guidance. these the be had a of We've and good fairly equally we will the QX, given but XX,

versus you of XXXX, should some further tailwind free year? next Into Like become a expect cash flow items profile normalized these your there? would improvement

give to we will adjusted have would are is towards cash to at obviously more I that capital. increased we clearly But what normalized at dynamic have time. that over the think look about time, expecting the free the I maybe but Yes, protected And I guidance itself, be generate more of say variability. to our in But we'll levels inventory more flow just to 'XX. inventory side, just collection think probably will get on safety working

to why increased. as reason inventory one have that's So

that fact are our higher. volumes have We also the integrated

below expect volumes the a up as more month. inventories bit go than slightly slightly are the below XX We normalized XX would as little slightly inventory. so Today, well days. to higher you days, would them our probably to So have expect be

understanding going we be are So work next that that's year. volumes will higher that to again opportunity the with,

-- And you've Could you puts development for on year. just in good more. And of next squeeze be headwinds into could be potential what of could your as we into takes think do lot year? can The terms if would revenue terms I like one and margin towards What in so constitute margin. what next the given of you'd same you the a watching sort target? of get color things

Sure.

for gives versus And scale. the us in where much So It's no volumes critical. major what very changes volume us, is, we've so what one seen lower. much past. that quarter to last we've said ago, this were Obviously, year the

us So achieve to critical, for obviously, is our targets. volume

stop going well as seen some freight, on [ of the that around about about the thinking inefficiencies side this ] we've are and positive year We plants. of

the somehow are look inflation We to we'll year. reverse -- X have to The at expect the X associated next pricing. obviously out areas and these

So have the that's look the these X -- to at. we'll areas are

I levels as but is that's bit ultimately margin would we the good reduce. for all will improving, this on, earlier buy, be And percentages. subside mentioned Spot supply that good a and little because news will is means think news

of if kind on So EBITDA side, these the moving the pieces are it helps.

question Your with Jefferies. next line of David comes from the Kelley

talk you that's some question Europe give kind in can high-level you region? And and Europe color outlook? product us Can the factoring you're a about on into mix tracking and how your Maybe exposure. of demand on seeing how customer in schedule visibility year-end

Yes, sure.

of usually in strong was been Europe. it I would production in has any softer quarter pretty all, softening tends to first haven't Europe QX. pretty and in So a we for But say I QX be demand was hot. The demand -- seen mean

haven't So expect any change I of into the placements, seen to their terms in QX. contrary. order we would And to continue that

are similar everything displays, what clusters be what the Largely primarily domain much have that very quarter. us, had means third also seems controllers. we for So The in is elsewhere. to mix we to cockpit digital have like

yet. Europe of the about with So challenges that all It still the are in from seems that as we talk that customers faces, our orders we seeing see strong. not pretty

helpful. one then Okay. Great. maybe And follow-up. That's quick

ICE think XX% a we business today would apples-to-apples, wins EVs. in kind you're new color wins, of but you XXXX opportunity talk of can the seeing about far sort for back, of the business at were multiplier a that content great. in take wins any exactly be per looking wins not understanding bit step so it's Just If on slide, versus I EV vehicle

Yes.

have we talk There we these [indiscernible]. when that vehicles is So of ICE content out and have, EVs, of billion, all, right? cut EV be some of that just means to them on what this clear, first that David, about, $X are XX%, across XX% the wins the

So they're represented also here.

more said and as EVs typically, content. net because they are displays for positive have generally larger I've so us, positive, before, And software electronics and

addition to domain BMS; in controllers. more we're in is CDC, cockpit the opportunities EVs near seeing term, for display what So and

that I highlight. are those X the would So

seeing are higher performance are average up and about the of as we what in prices going both these more And cockpit that multi-display that as earlier sales also domain controllers this systems systems. talked displays SmartCore we cases well with

it's as market of area, So lift our dynamics. win on these also share positive our in our of hopefully, our growth And to a -- we continue that's development. account market going to help the that of

your everyone, of the in everyone. Thanks, conclude David, participating and ongoing in you, for Thank quarter for does third our call interest and earnings thanks, today's This call XXXX. Visteon.

follow-up Thank Ghazaeri please Kris any you. Ryan Doyle have contact you me, questions, If directly. or

Third This Quarter Results Visteon's Call. concludes XXXX Earnings

now may You disconnect.