Visteon (VC) 26 Oct 232023 Q3 Earnings call transcript

Good morning. My name is Emma, and I will be your conference operator today. At this time, I would like to welcome everyone to the Visteon Third Quarter 2023 Earnings Call. [Operator Instructions] Thank you.Ryan Wentling, you may begin your conference.

Good morning.I'm Ryan Wentling, Vice President of Investor Relations and Treasurer. call third earnings XXXX. our to for quarter the Welcome we and is have mode Please contains call, forward-looking noise.Before of this call XXXX. the Private remind recorded like to this all to I'd background statements listen-only note this of presentation a Securities being Litigation lines you, Act morning's on been prevent meaning within begin the placed Reform

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

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

We your questions for have joining for limit and you remarks. Jerome's question one the Sachin your follow-up.Thank one we'll Please open and scheduled for hour, to after lines one and us. the questions call

to Now call will the over turn I Sachin.

foundation you Ryan, strong results of X for the for Thank everyone. long-term performed and earnings delivering well, for the our company growth. very results our morning, and third XXXX you, for provides third quarter good our joining summary Thank call.Page a quarter. strengthening The quarter

digital of Adjusted in from commercial chain to sales X% year, million the grew business quarter a for our strong or driven demonstrating XX.X% by favorable increase $XX when million sales billion. compared base growth $XXX last cockpit our few EBITDA Third underlying related and year-over-year, pricing, strong the items. of products. $X.XX sales, was excluding our supply were And further impact demand an

immaterial a sales positive year-to-date, free bringing some As the delivered for $XX headwinds cash guidance America, midpoint anticipated. was normalized sales order increasing as million, the our consumer demand. $XX the demand, resulting production flow in our year. as product In in cash the UAW vehicle our Adjusted million.The full than due an quarter. weaker despite to customers a vehicle growth excluding was and receive of well our strong strong continued production, in remained Europe, at strong initially North of we of cash the impact consumer are emerging company our products coming solid weaker had adjusted sales to to In to year-to-date at to flow strike result our our customers we our In lower has performance another quarter lower customers of exports, had Detroit the China, EBITDA due backlog industry. throughout inflow

XXX launched in our new due are which electric will to market in in quarters. region.Despite to share carmakers, gaining launched products up over global resulting total China ramp quarter, OEMs shifting another customer over these the the in more product in the is Visteon's bringing We XX domestic With third year-to-date grew for in products, a Visteon that of drive products. sales the quarter the headwinds, negative recently third coming vehicles, to sales market to our mix new which continue

we continued our I These CES new new peers.In of which digitalization am for our in discuss third Investor QX. we end-to-end I on is an our shares, performance a flat the for start although this total additional store unique we main Our that enable and growth with earlier our product Day of details is on for OEMs happy grew is million by vehicle $X.X near-term solutions year. during combined the this vehicle well to our of and negative production in our the the Global driver electric to quarter, carmakers, first announced we of customer $X.X In highlighted $XX win billion. which OEMs segment vehicles, app this and vertically capital over offer quarter, slow we that fast allocation through $XX report best big one of us our business, new our technology year-to-date quarter is bringing mix. business Investor financials.Turning the in industry, third total commitment The Jerome deliver Page million year-over-year, billion it customers' to won for to Visteon more portfolio also integrated, on the quarter. won before to new tend was pages, the X. drivers our that X% of our as as services amongst product the repurchased and electrification connected global to performance. bringing during will Day, subsequent to the QX production outlook the automotive provide mostly to be one third at handing customer of to the of

supply our of improved down were significantly chips the market the year. compared to open semiconductor throughout in we year. purchases As has anticipated, last And gradually third quarter,

are in year-over-year this market resulting There's ample year. XX% now from cluster is our in especially Excluding one despite the digital market segment launched clusters, continuing clusters, impact.Displays our over just flat a robust sequential our the make the clusters and XX% to used industry period starting driven significant down and overall prior cluster SmartCore sequentially future the and trends sales by grew both digital at From of in quarters, production product year, total perspective, further more recently X%. trend QX, from represent our in very quarters. most Digitalization mainly grow positive for in the number unfavorable Digital products.Through this product automotive, to up continued year-over-year, Visteon's well. including of and of base a of than with well performed products in solid have the as shipments in for three this from size backdrop, Despite impacted growth customers of strong digital infotainment chain of coming product base the where as the the grow industry year-over-year sales will the first our our mass this runway third this is have impact sales by QX are of we in same performance Digital a the this sales a growth large grown the growing in quarters. share is masking recoveries, versus year ramp base vehicle cockpits. X% last of displays ramp which supply grew its quarter being rapidly XX% BMW, program performance line.

production program, therefore, of headwind of be We going are the quickly of a it forward. less approaching that will end

up launched a of with and and a from growth.SmartCore now product As Geely return growing Volvo QX new come expect display just line year-over-year. key new product from our This growing sales, mid-single years the programs We with online, ramp to Mahindra. in was digits product from and benefited line earlier Harley-Davidson programs the fastest up few XX% share with our ago. of we represents to sales this launches total mid-teens

attractive Android-based ramp our Stand-alone product our priced line, for electric in We proposition to systems, launch offering many vehicles.Lastly, systems continued are the especially our QX featuring also competitively infotainment especially rapid vehicles seeing infotainment for infotainment. growth are business with of electrification and connected by Android of additional markets, up an customers. services,

in very In sequential we quarter to coming third sales with X. quarter. vehicle growth across continue continues Visteon brings of of year-to-date product than to pleased quarters. We to company had over different first lower XXX which QX.Turning digitalization around three in BMS anticipated, and models for launches its The Visteon While are were the the successful products to summary, our of vehicle our the we car which robust benefit quarters products models, total in BMS the another the see very products trend XX Page launched cockpit expect from manufacturers world. will run have launched XX in sales, sales digital in

third with digitalization the segments. trend X/X controllers reflects and industry the and all With launches Mercedes, mid-cycle new clusters China this we market. updates quarter the models domain displays.Some page. for quarter across are our launched clusters remainder digital on as cockpit to third on of existing the multiple key of highlighted were the the EQE of launches Our About product electric launches impacting vehicle being SUV

in in offered audio in is EXXX China on X-inch digital Europe Southeast vans cockpits anticipate XX-inch a SUV.As evolution. market with in and this highlighting variants of first QX wheeler electric ECARX In we Honda and Our countries products, vehicles light commercial to our cockpit dual market. Volvo on Europe last our cluster Europe. bulk collaboration a the in a evolve other controller transit hybrid including with with in the just market. make QX China X connected cluster digital their trend Ford up the and the continue quarter, SmartCore toward digital segment two of system digital Commuter China. in launched inroads and our Renault quickly domain the continues for in display bikes on model of cluster these quarter acceleration vehicle to future.We multiple with market to Asia. we digitalization the continue cluster variants Giorno+ make vehicle in of displays on our with trucks had We the the and on that larger In cluster highlighted are launch launched grow, and digitalization and we cluster that commercial with to Japan We a launches the heavy and the this in launched beginning we launched

one gaining we, Additional Motors, that our coming X of vehicle on was India is on the the which Tata billion. this half business region. reflecting market.Turning back to $X.X growing In with growing models for year Nexon, wins the with strong year-to-date X. XX% launches OEM of launched decade. the quarter in vehicles, of business year-to-date the electric of are for X-inch with faster momentum of About business digital of our quarters. with including industry, quarter, QX QX in and especially billion the $X.X new booked bringing electric best-selling the our cluster our the is in this is wins markets automotive carmakers the Page planned to are the total another EVs in share in

side the third right for the few key page, quarter. of a we wins the highlight On

OEM, our system and camera-based First, global additional infotainment optical won smart to-date.Since features controller infotainment recognized OTA, industry vehicles. car infotainment with all business powerful offering voice with in surround in vehicles cockpit App and go technologies. domain we this their we first America, believe luxury program including EV largest a most XXXX.Visteon's In will well advanced and into are South Visteon's cover mass product Android-based manufacturer a our AllGo We a from win and our connected will this the program first CDC infotainment leading with XXXX onwards win as starting production glass for This capabilities an view. in QX, features the with system will on and such domain integrate platform have launch upgraded which system digital for especially bonding OEM and display Android-based from ICE lens we assistant features vehicles won we in German in market controller cockpit our with XXXX, the is today, industry our This more conquest and new cluster have silicon functions. customer. launching Store,

first module this XX.XX-inch on U.S. in vehicle third SUV to a a passenger in with page the global the this about This display grow win OEM The other highlighted with the multi-display all-electric OEM, models a and display is launched for XX-inch future. an and excited our we're midsized win we is on separate potential

previously the in specific in-house for have a AllGo won India. that intent market. I'm announce our to large to our advanced our automotive proud to We App first OEM business developed discussed we services have bring with connected Store

field. and run their by car bring Our to hosted downloadable to white-labeled apps vehicles will in store manufacturer be the the app

its services our the acceleration cockpit connectivity experiences led Internet. expectations of in built are cockpit increasingly of is the new digital that the Page won across consumers' We OEM potential.Turning increasing with services quarter. Car automotive, trend price experiences to also the for responding we connected first vehicles cars are we Digitalization in connected believe in and the the and in customer X. addition, for offering all In a car about OTA X-wheeler manufacturers with to with to of has cockpit. excited connected right are the equipping timing segments connected offering the to in and

and systems. the offer app In ecosystem experience the closes and addition infotainment Store testing gap to infotainment transition the leverages the opens Unlike to value added and OEMs. car the offer like Internet past, of smartphones and been between We're systems devices trend in-vehicle AllGo services apps third-party on of store vehicle supplier is take Android-based to Android-based connected to and car connectivity, lifecycle infotainment the that they consumers with apps tablets. the in-car expertise into expect leading a downloadable that enables include at bringing offering OEMs App software-as-a-service full-fledged the closed apps App for and the infotainment get infotainment services continuously possibility step supported their a we cars growing the white-labeled and of of of next was their also Visteon also is our with It in-vehicle management has content.Our to mobile systems. forefront the provide cockpit. the and Store the apps logical digitalization their that

dashboard analytics to OEMs and Store. portal be used deployment deploy Our can App manage on that offered by are the apps and

additional OEMs their to the the needs critical addressing also OEMs. an service full software fleet across offer platform enables that of cloud are in offer run services AllGo over-the-air update that field. We SaaS We campaigns entire vehicle on

services enables to offered navigation management out stand-alone such seamless consumers' health we remote opt access to and App or critical of information provide are services service Store.In the vehicle analytics bundled premium command addition, with and from subscription for consumers content Our vehicle maps. services or smartphones. diagnostics in developing to These are as

reduce will the be deploy these vehicles. from opportunity is their adopt for the Our widely friction is services AllGo the minimal, while near-term OEMs to revenue objective to and substantial. in long-term Therefore, contribution services initial

are wins that's model. our cross-selling customers relationships connected to demonstrate opportunities, connected services in We significant two and traditional customers. revenue use services to and QX SmartCore there the establish serve our to platform from opportunities Our our services differentiated infotainment both our with new believe with existing

semiconductor models these the due we production quarters.Turning production we a strong transition had OEMs healthy they and the EV slowly X. cockpit is shows opportunities for anticipated. have entered to have to industry occurring for industry. Despite challenges, and despite This the are for during supply cloud the with and years. prior report across We services quarter on the the year. supply also progress challenging This and in sweeping for moderate quarter of our macroeconomic the number to pipeline year.The to vehicle the sales revenue advantage each improving revenue a vehicle year more hope future environment. in growth on to increased these Visteon's being company sales page additional sequentially growing are slowing vehicle more The ICE customers us accelerated performance We than and of outlook third high currently that Page constrained is well of a to that engaged our from that to products trend launching remainder enabled this of due half portfolio had The our concerns, operationally, the global demand the With customer company's product at growth. of happening. vehicle is has lower product mix in take anticipated performed second has XXXX, digitalization very which year-to-date digital driving

to they launched even our anticipate driven a our production.Looking Ramp with come quarter, our in the similar challenges in by We to will which for ramp robust drive sales. experienced performance vehicle in the sales also OEMs electric global the results. OEMs to especially hand, will On our up supply corresponding lastly, continue against reduce have growth segment. a drove be our sales the sequentially what that third competitors, at compared electric global by the of product challenge in will UAW despite grow BMS And faced revenue. recently maintain our than customers' ramping third the strike market fourth open market other our critical up domestic will fourth to due vehicle our sales purchases their we as struggle BMS third market the remain to as products China QX will share expectations in and anticipate quarter quarter.We will to with that the slower below product headwinds. impact over will improve factors greater semiconductor create of plants quarter in to fewer ahead parts,

are in recoveries recoveries year come to below primarily range our slightly lower sales. to sales the full guidance including BMS Our midpoint expected due of previous

us than targets. trend production EBITDA positions to team full operational to commercial on through performance and In likely year to strong execute another company well adjusted growth continue due our and anticipate to to customers' EBITDA of a performance first We we our higher to slightly delivered which operational earlier few meet very our adjusted performed record quarter.Turning be the fourth with of the the the past XX.X%. year base into of years. will we relative Page continued the growth summary, for three which our strong expect strong continuing However, quarters, midpoint achieve X. strong plans, profitability vehicle well The the in our resulted margin sales to full quarter sales our

momentum build products in billion the launching in XX vehicle models business by and quarter. We continue to new $X.X our on winning

for will Jerome. our EBITDA presentation to and are guidance the Finally, to for current the we adjusted year-to-date the over full performance and customer I outlook turn year reflect updating strong revenue demand.Now

and operational Thank quarter everyone.Visteon financial of discipline. and demonstrating a set another you, commercial posted in results good solid morning, of Sachin, QX,

This impact grew sales chain cash and $X generation. of continue the growth, recoveries, the was for see supply programs. controllers we slightly prior digital programs, flow domain expansion strong X% when billion with sales clusters, benefit QX were with the recently of and over our year. compared supported performance ongoing launched and We to BMS our cockpit to by margin excluding momentum demand build combined

America market immaterial added automotive While North and significantly to reliance improve performance.Semiconductor on has as UAW open our the a on to result, continued has the reduced mid-September, impact market was year-over-year. uncertainty third strike in the has significant since quarter our purchases supply

with continue higher to In our quarter, third prices approximately of elevated X customers. our from we the suppliers. million costs see traditional we shared However, $XX Tier these

the $XX optimistic the semiconductor We these $XXX that for pass will that EBITDA million efficiencies, improve as are EBITDA timing offset by improvement in will expect the versus lower higher engineering year. was improved Adjusted need was of over million favorable increase prior to through commercial the costs quarters benefited of well spending expenses. in and to base several coming market from an This an continue as items. the SG&A sales, decline quarter, partially time.Adjusted operational

in with positive margin ended repurchases as items million quarter Our XX.X%, was We benefiting the a net to a adjusted some commercial well adjusting $XX the while was flow working our million, being of third EBITDA in the the was of EBITDA a cash share a million as of capital. in able and more quarter. $XX normalized strong the to quarter, engineering execute from closer free reduction in for cash for but $XXX position spend, rate quarter XX%.Adjusted run

performance Our the we delivered total third earlier launched million Overall, strong have year. program been share quarter. in since repurchases the a this $XX we

increase was targets.Turning base Page continue production were growth billion, prior prior Sales to primarily to increase as quarter. flat When base compared relatively we of importantly, million, driven compared customer the in market $XXX our in excluding were fairly was towards XX. to by to recoveries, sales sales momentum and over an This year. $X.XX flat progress X% Visteon build medium-term year. More customer make

over the demand driven increased open $XX BMS driven cockpit boxes, of approximately recoveries, products, decrease by growth which market by Our dotted was product by in mostly year-over-year ongoing are million, our in purchases digital costs market Open the recent X customers. a XX% remain the purchases largely and declined trend related from third the the to demand.Customer continue launches fourth our to suppliers and to traditional Recoveries are we in fourth this expected market from corresponding minimal quarter. and our stable Tier quarter the expect were recoveries higher in to quarter. in illustrated

but recoveries, versus declined negotiated our an reminder, primarily $XXX efficiencies costs and prior due bucketed sales, are base a primary by neutral adjusted specific maintain projects. items compared in in We improved EBITDA, to future million increase investments XX. The million industry. due $XX adjusted several adjusted pricing, improvement year, due operational as SG&A, higher As of increased was the million nature, million in commercial although increasing year-over-year. engineering in diluting EBITDA to timing the Page margin for was balance quarter $X to the EBITDA This of personnel year-over-year to to sales, support through in the for favorable Net we $X the percentages.Adjusted passed XX% was to to related year-over-year, one sheets quarter. of offset strongest which our growth.Turning team the

priorities. Our pursue $XXX capital and We $XXX million. share total $XX with quarter of cash $XXX balance our growth price In allocation the This per to shares flexibility repurchased the of year-to-date $XX sheet position million. an for net brings our a cash average quarter, million provides share. million supports we of our repurchases third at ended needed the and to

to working of adjusted expenditures. will several and nine flow depend dynamics. industry free adjusted including on We $XX opportunistic in the flow factors, first and year, EBITDA We first compared which by capital nine remain higher million the capital to future our months. as higher cash offset improvement million will generated cash This build, partially cash $XXX free repurchases, a primarily prior of taxes through is lower the generation due higher months share and

trade in in and taxes prior relate XXXX. the remained were to XXXX that term than in low due payments first to our primarily profitability payments reversed the half loan partially related capital of higher other the quarter.Cash working built was matures anticipated, from cash increasing to As jurisdictions. and in some year third Interest

amortization result modest payments months. approximately amortization through $X $XX first a a These the in quarterly million million was of our basis the quarterly year-to-date repaid on will now continue facility. as of maturity the payments. CapEx have We nine

the fourth reflecting in We CapEx seasonality quarter, investments to increase manufacturing and electrification. our and expect ongoing in

We year.Turning updating XX. of impacting factors full of $XXX around and our continue performance In industry, to the guidance. to expect the are our million various we light CapEx Page strong for the

For sales, billion are $X tightening the midpoint to $X.XXX we year-over-year range strong growth for base our year. guidance to under represents in billion just of $X.XXX sales full XX% a The billion.

underlying is ongoing in Our over the market originally increase strong expected by remain performance sales, to lower in fourth our quarter, anticipated. with BMS driven and although continued an launches growth than product

$X in As UAW there weakening the mentioned including fourth headwinds earlier, strike.Our Detroit have Sachin from emerging the on are our quarter customer headwinds weigh of are and our customers to European demand sales, impact customers several the mix that expected an sales only China, due the estimated we on reduced which to strike orders impact has week. million approximately through yesterday's per the actions. Thanksgiving, our at our UAW guidance, recently In levels continue that of to their will million have assumed strike $X

in being do number OEM ranges escalation or incorporate guidance Our the duration of of further either in strike plants the impacted. not

operational from For week.We're momentum tightening million $XX to performance. underlying strong million range This our the reference, $XXX million adjusted is from to primarily X EBITDA is upward our weekly of $XXX million. Detroit per to $XX revenue the

quarter. fourth above average UAW are the a lost expected as the a decrementals strike sales for headwind result to However, of be on

the free will first terms. million continue with and dollar the the to range to flat cash second opportunity. and CapEx $XXX Visteon roughly spending net a the considers in half long-term capital, million, working a our assumption be half flow fourth expect we remains investment We're engineering, EBITDA maintaining of current $XXX page of in higher For adjusted compelling to modest the of which our use SG&A quarter.Turning year range, of adjusted XX.

positioned flow company top cash free and for We growth, have margin generation. line expansion the

We shareholders, sheet, strong provides to continue to while balance which return will cash significant flexibility. a maintaining

for this exciting time We focus call today. to operational have an would a you open like the discipline growth.Thank demonstrated to and your your deliver and for I have on now commercial profile questions. strong growth

the first of with line Junk Baird. Your [Operator Instructions] question from comes Luke

topic terms strike linings impacts see guess I any the downside are obvious just just continuing environment, to start guess, with, purchases, in first potentially thinking a supply to strike operations That's to the I beyond like sales reallocating the chips, market building question. that you open risks. that? curious the take stock, UAW drive I'll things I'm silver in maybe down of, to in. Do the tight and chain safety the

yes, Luke, improve the opportunities, are not at UAW strike Hi in mean I looking indeed. supply we performance all just chain. our to the

maybe with at to we are semiconductor step where a take back Just supplies.

supply, has throughout we've still few gradually has unlike spot sectors. good has we're and on discussed the down carefully.In Although watching in that dependence some supply improved in very general, other I automotive which from would not all terms much critical, has are that previously year, have chips higher buys. demand been are a fabs of our delivered but say the investments capacity lowered and and of thing them There efficiency gone that a

a in the we of other build the to need few So buffer. whether that up lack building on, And trying say chips other while we a of have maybe taken some have are strike work demand from we still we sectors, level factor that to I any or safety that safety in would through demand benefit on the stock. any terms would reduction that help of

So stand. that's where we

that announced first picture the then bigger win quarter. power second question, of that'd the reaction terms in electronics a you just customer And last question, Sachin, to my be and

somewhat impression Just out guess would that, better is market think my opportunity pretty you factor? electronics is Visteon's award with actual that and in have immature, a in a meaningful market? part there would still that curious And understanding if power of I just in a be the hand but go the I of general now to position

Yes.

apt. the market out very customers think as about I hear description I I to And when electronics. that is is what Your of immature, power being go and talk

power some XXX-volt that's shift and which electronics, requirements the XXX-volts Now for to just significant a and going for architectures through context, the creating challenges of lot OEMs. industry to caused from have quite is set are new

that XXX-volt in existed DC very even electronics. we and of the XXX-volts, power DC the And there's in these importantly our in difficult to OEMs many volume and Now interest box, terms lot we're you management. products talking especially and requirements concerns, solutions. addressing are much more architectures of junction challenges of up high of about voltage like specifically converters with And terms to charges.But when since rate a go get efficiency, thermal at these and onboard

and would that yes, I a legitimate is, in that we made systems has -- It this announced the feel has for us this generated space. we quarters OEMs. a can So I us it last before more fully optimistic. interest full lot the will map. us supplier still of industry the We remain put on quarter this the potential of has the of characterize very understand discussions in we has need like particular couple way But a in win at this

Barclays. comes next line Your Levy with the Dan Question of from

of I'm relate appreciate some maybe of a of XQ from us going of part that to to the the give is I wondering non-repeat just bit you bridge first, commercial could items. Jerome, to a if the XQ. decline

night DX also any? But could you for just us strike. the largest customer should You wondering, also for some the last had be ended given strike I'm just sensitize your within if or

Dan. Sure, Yes.

was very Growth X%. the quarter a So moment. maybe how market We're with over pleased go back to QX let's developed. for

sales customer as a for well flat by production us. grew Our to environment in X%

had for was run XX%. some EBITDA timing items when to we normalize the close of you rate Our that

So does two it things.

little the at level about midpoint are raise at and to would QX it while good cost that though we'll of and results it we in QX seeing guidance extra that looking EBITDA engineering, timing, the have volumes, QX called about strike.So QX run QX. And some had basis we'll which on some costs QX. versus engineering again see prepared we QX, rate of confirms won't we we we QX because out items ramp largely obviously QX and baked end of some in had benefits points. onetime absorbing remarks, had impacting are allows level have my QX into of these impact our some the us up a talking we've than First, the And fairly the then in still from in got a I've by of in our indicated EBITDA midpoints. strike see of in cost our more side, of then in even XXX We bit low is what

of GM, the far and on dynamic XX% overall some to We or see exposed announcement So materializes. not very good in plants the of yesterday, been of have Ford the QX the concerned, from we we've still a be to ramp news well strike closer overall how may terms the we'll strike will still EBITDA.As are to quarter, is and change watching the obviously as just to obviously. up and the Ford obviously Ford, as GM in

We are be an to ramp will a unclear whether little and up any hiccup. as office bit straightforward without

now. from there take and is we'll something So from very closely, it we're watching this

Ford? is Of the $XX that is to the -- percentage $XX presumably majority revenue million said million Ford, you that What of of DX. is of the from weekly

but bit for Ford, It's large -- towards more a GM tilted impact a it's is fairly little still us.

think of month much October. for already that to pretty the are more and the of impacting of I we had is consider October, fact at already than a we've aspect other strike end the one orders month

has into take our about we well numbers. as strike. should that account we through level think as going So some been already of impact There's the that

been the slowdown your of obviously of slowdown? the reserved light their generally a BMS. your I impact sense we've the content, seen know high some give we generally of OEMs or And the I about the how the pace the for backlog piece us of BMS in content outside about about EVs If that seeing maybe for of then could of best reserve down just you're think ICE-agnostic excitement a you as B, A, probably these broader more in should think launches, of really ask we're of how some follow-up, to are more advanced slowing reduced launches? OEMs market. that platforms. which wanted or EV has does profile uptake

Yes, is let This that. Sachin. take me

specific EVs. say high would just to content that in I is So not the general,

into that and dampened and higher there seen digital production content we You EVs are board. this What has sales by across had customers of in have some challenges content, have as especially happened in we QX, continue more EVs to in expect is that but right, our the cluster has QX digital and little sales our bit. a

in have I grown still mentioned prepared clusters my digital XX% as very remarks, Although, year-over-year. well,

pretty still strong. So that's

of QX our the mentioned we as volume expect continue we grow EVs.Now coming pretty absorb BMS in I continue is from the quarter-over-quarter slowdown the up front, and into impact sales subsequent can BMS large, quarters. on and the again this to ramp Our earlier, to and cluster

BMS our in at of Now data our as face at next we necessarily time, value. estimates, customer the And have launches year, additional take terms we don't well. in same

some we our level have of So had estimates. conservativeness in

expect to to grow continue So quarter-over-quarter. we

where thought this of our exit be at of the would QX at, year we I we that to terms year. In we are in rate be beginning expect where the

us a yes, well need our that, of will X% production be than contribution for year, And next understand plans little estimates year to lower its we be the up able and this pretty but It BMS from taken of has our fully to So wait the revenue to customers' expect to end we'll the bit to estimation. until catch year. year next earlier BMS longer stride. but it contribution grown from still our about has

comes Your Spak of next with the UBS. question Joe from line

of to volumes about type the sort is, they're what sort when aren't Like what up return calm know, follow -- hit concerns some from little be the you maybe met, have you those if tried I clearly, think commentary. you bid of Sachin, bit of business, bake to in with did. guess longer to closer Do and of what we're Ultium now your a sort customers saying term customers? you the the just you last your on on quarter, some to to to really in saying? I want sort profiles. assumed I able what certain that And understand guess of EV you recourse comments of I you didn't trajectory that do

as cells, also not what assembly have demand-limited get the stage, much really some and supply not up the as pretty into would are what in say, And at have that be, that, our just of some so and the but to of really expect themselves they will the the ramp we go launches demand, to capacity module is address we And manufacturing are come have always additional would level Right. and we demand up that to they of GM We that we up it.So constrained. some and I they a the invest in doing, challenge challenges this the of where believe this continue say I talked ahead particular they in customers mentioned, we ramp is business in year. I GM okay matching Joe, about depends it that on with next would additional capacity. me of and to launches, the the as

believe own judgment online. also apply would in that actually come terms of our that, always we Now capacity

any that, It's we'll but So it be have related to next I to other have to discussion that certainly we'll hope see capacity. don't to say develops. case, whether would have the year we too have to how unabsorbed see early develops. how

burn quarter, of in talked is, and the sort what of I try faster get popular and even like that's you growth X-year like Like, not developed better of, models Western to sort are of it you're much are seems the sort is terms things become harder. that about seeing of and Sachin, velocity the little harder efforts coming big of typical, right, China other a much, of of Visteon or just because if and used bit maybe in I'm but the quicker to guess, of of growing clear some of world curious, the thing company I one to up position what if question. maybe world in OEMs undertaking quicker. China to picture the this it's there. we're sort the seems some in One of going it bit what's though then business it's market market little in then a sort And can, underwrite? the like, sort And coming And how that's sort bright, programs. like does like underexposed you and manage Like just after last to to how you're like true, a in fall

appeal our is that. very are And advanced for than the different. doesn't China, demographics China what therefore, this customer for China young because are systems something think China very that That's would outside the more that look world. the in a the a also all age more But they customers they large, systems much to great The it's very of under XX it's In have you years. of market mean market. in world, the same just of look that's average different our being by described understand need we result that question, China a it the better. is I have of is like they effectively more And developed Joe. where rest designed the is a of parts And much in than of China,

XX% of our came our then we've domestic vanguard picked customers if and to at you started Geely channel same and OEMs that that of than even at the about are really this the momentum, about how OEMs. world, we'll context? rest some XX% look from an more that at change have in had we developed China, others the XXXX, of designing the So, when So up for and done from this from more rest bringing coming our at Today, China and first China revenues if them outside we exit XXXX market you products to added year, at a digitalization increase And perspective markets to OEMs. and of for industry in have then year we as domestic revenues of to China where gone have of as that in not slowly this world.Now look the of like the where OEMs, the advanced trend. we look on the JMC were are global probably trend that

exactly but development same to challenge that of approach will world the at are that the capabilities, that for to our that do talking product the are fundamentally older market, doing sure helping with these to we our still that now really but about when to technologies, as we been have that develop not have mean somewhat does comes attractive we very needed platform which using get software. different years the really in but especially is lead.So differentiated, approach, this end rest us exactly necessarily of follow solutions, day, the it we're several what don't So their trapped have doesn't products make we

and I terms this think that will to despite growth remarks, going production we has in us of the talked well expect grow this China this happened and we the year about we proof in in continued domestic and lower the see prepared forward. earlier to that's of have numbers. changing dynamic quickly seeing addressing done So the very where are continue for we

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

I just better particular, the to in Europe. macroeconomic around wanted comments understand trends and in some your of

that's that's some progressed? picked days breadth slowing continued bit. and help us understand seeing XX of ago or and you up be like a the there, how magnitude even maybe slower of in the better it about you trends talked seeing You Can may sounds Europe

Okay.

So yes.

So seeing the market are let's about talk how develop. we

supply Now QX see and during this this order that happen of this being constrained demand anticipated a a QX. being had would And started entered constrained account about in production demand, had, supported they this year supply constrained that change very of market we from of to we Europe, fundamentally more and to year, and essentially the in talk the year. particular, levels QX up that market we book strong when on in we with high pent

QX the beginning going well.So the the all the quarter, that consumers' the lower had So, the that into production vehicle into third been intakes, if order of you look as anticipated than OEMs see at is through industry customers have orders slowdown we year. the reflecting what at forward our the year and at

from factored seeing our is respect and expect what slowdown, year So we'll effect, the wait what this we how to with see perspective. is which some Europe. which have guidance to to that's into causing That's have we're and QX, next develops for

also that We and of expect EV-related is bit domestic into about we also the to the production market there and QX. slowdown And being have we QX, and other that then continue there broadly weaker, dynamic which our we little a that the discussed China saw in is talked here, sales.

for So next factors QX those as that factors are the to both think for we need the macro year. would and as that to think we about consider I next then year start

Mark, despite grow this these things And the for by we our for are seeing sales headwinds. XX% XX% context, year, I add would about headwinds, putting into to these and full year despite

So still healthy absolute our a very in growth sales. market over terms year-over-year growth of and definitely

their EVs. questions of And recalibrating are some longer related intermediate of mix to up on tied in to outlook OEMs some schedules launch the prior following and term to and product the the

your at confirming outlined you the about of Day to there's margin? adjusted no targets for revenue $X.X Just about that XXXX billion XX.X% and Investor change EBITDA

midpoint at are guidance, in the on would out what XXXX. year, sales to approximately that's this $XXX an needed at, believe you be. we for And year. way this need where new of think where we annual sales At pretty mean, our if basis Yes. base have we stage, about added much we I million terms we in we all of are this to the

needed has we on bit sales be. track that where mentioned account as of we still moderated a factors the to although year, tad this on So pretty to we're our much

go at side, the up as very well with we're end what that as and I be projecting QX on add have able again, that much we strike, run rate would to scale the volumes. QX of EBITDA And are that indicates the on we'll and we we for additional

America. line next John from the comes Your Babcock of with question of Bank

throughout you months the you XXXX uncertain, not of to obviously be in past generally, and on business expect pace target. and at business of terms wins you've first you've can strong achieve wins discussions in to do And similarly pace had lumpy be seem and well just just guess of least quarters? based can if exceed year couple your this recognizing the keep a on I done which,

Yes.

years, I So the the digitalization over product that couple a would we've and that's good for on of but actually electrification. both well And question. say portfolio really grow to front, also our evolve last done

year, higher translate challenges So into us OEMs position in as a to of new the this that we'll shown dynamics there on And these have still the puts we of this quarter. the think good levels to awards facing. of of some that address some spread be the we should biggest of see. are that the have should business can lumpiness Again, wins, sustainable, but which are

we to is not So XXXX. in what may of do precise people should be have. previously Many next we appropriate performance terms would new of have exceed it second are can that. we one we of this think more achieve, wins.Now I believe also $X be the want that XXXX billion. to this of in having launch or could either be a too the half year in because higher level going a be do But indicated position we year business about mention, We wins to question sustainable a will thing this believe this to importantly, but we

great course for target. us a and long-term. position assumptions into to it the in So importantly, the midterm in contribution the grow But target certainly factored more to to of XXXX, there our will puts that's our continue be

on was getting just was as And pertain wins And that models. is then some from you've business on follow on, any how to just wondering, based those actually would I next digital wondering be sense of as product helpful. OEMs tend the content they generally if new That just obviously, I to a had, I you're mean, to launches? changing

Yes.

for we So is about time. good have the trend this some been I think that talking

So increasing in in they bigger really also is seeing getting are displays what much the number. that we're particular and are

services that a but displays X-inch upper mid-market timely XX-inch content.So growth Those larger to a norm competitive. we side X, are connected to embedded the from more generate will that's be from matched it's end-to-end products much believe how margin one towards embedded from as connected in we're as the our becoming And that passenger services additional is to lot lot many revenue us, when segment, displays seeing believe with with I too end displays think getting mid car the of connected other So, into displays opportunities competitors. only the and directly the in content and the of well do of market, still content, market. in-vehicle and terms is not suppliers approach by contribution of way make the an not for both going smaller very of cloud more we also a services Visteon, the connected be XX more also mass pulling the they will at also the few themselves, We capability the incremental because of displays. all at in-vehicle for believe the and I shift

provide I for before the XQ far it to it's can just limited, turn recognizing great, Is question last strike useful? you but over. some it then sense as would be there impact so of And be possible XQ Visteon relatively would to get anything and the

far with would guidance. We've of they Yes. orders what we've obviously Jerome. And assumed in half that I been about so our It's, impacted down. October coming represent say

$XX to about into of that So is million half and is already $XX baked the million assumption in October. guidance

right? Okay. And that's XQ alone,

Yes.

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

some from broadly EV some the of multiple customers automakers. slowdown follow-up to on ramp hoping implications by and more was potential I of the by your in up then generally

in guidance? is you your try BMS on then, -- how year have growth just can think rates volume latest the or $XXX much could based for terms of So you be assumed million for and in outlook us at piece I in it like a progression? XXXX this of what of sort assume, guidance current you terms of if quantify revenues revenues, for what of risk like And some

be at it Emmanuel, really guidance midterm what premature could talk be our risk. would about and to I too think

that are challenges we confident slower I quite our talked ramp We electric of specifically able of that's about believe I challenges they think the be account some customers the on one are production that overcome. that to facing customer would vehicles. these

always volumes mentioned, factored terms it anything but has assumed been this a our in are into have reading in into conservative how slowdown resulted So beyond we not yes, of this is we've year, that.And particular. I BMS the which guidance, we in as

again So we'll closely. have to more look at it

assumed point give years. customers today to insight. at are We data we But not about believe have there headroom be our year in EVs. to be is better position able the had by more about get outer in and that the slowdown what should a than that We'll a implied from we what still you're sufficient to in might you we what be next hearing

us So to few you the BMS? guess following in remind of this next assumed this be How launches timing over your I of next just asking and market up is much just from BMS? bit little a growth And differently. of the years on can the your

Yes.

a and that coming think I one. out is parse of combination at the exactly market necessarily many again, can't look we things, So each what growth we from is over

over million. We to would able in guidance. put being a revenues midterm to So our be growth just low-double-digit in about about like of to that guidance by electrification XXXX, again a a market we assumed high-single-digit I this. of midterm context need to And $XXX to achieve have terms

where to get the believe path in we the we have and customers, that with first the anticipated. for that stand volumes a plans being believe conservative framework.Now on still our us to today estimates we had of So for we of account that's electrification all we our

I the believe messages the we were for coming as being face why. reason you conservative today than what why earlier a And our time appear at from I will If we is This Analyst when challenged particular. in BMS, Day to year, you go better that value electrification and might everyone shape being about hear therefore, the this, in OEMs. at in remind back to estimates we with our were are

When are launches? the next

next Early year.

Jim of from with comes the Your BNP question next line Picariello Paribas.

third Just the from $XX recoveries there unexpected retroactive or in achieved on quarter any totaling was to entirely the the attributable favorable Was timing fourth quarter? forward of the million. a quarter, recovery in pull this

Yes.

which there were incurred basis you have is commercial XXX two to which are when prior items, items commercial items. settled points, in in points, So are basis were QX that XXX this In essentially costs about periods. related

points then out. XX going relates largely timing that fact neutral our really remaining spend basis of different it's to the we'll to So on QX, and from reverse QX, QX. year-to-date engineering you and a had a was walk QX project a because lower basis, And of as the that's to kind cost do that impact in

engineering So QX move in of increased that's why have we because one spend and between of a expenses reasons our QX. the QX, there's

$XX this, Ford provided? represent per would Okay, the that's embedded that to implies revenue XX% guide, I And if million week guidance then weekly I just and volume weekly decremental ranges what margin. the Is strike clear. confirm, in EBITDA apologize missed range? strike but based the given impact within in a affected your near on And million $XX were to that right, for then the that just revenue

Yes.

We first maybe be think average So little the bit a our they'll on decrementals. higher decrementals. than

the may ends. of the strike when that stop-and-go reason as be there expenses everybody ramps freight some One up is

one GM of reasons but why still in a large be that's here bit the is U.S. more business then So the than little of decrementals our a is will And higher. GM, Ford fairly heavy portion

that weekly answer to or the weighting your Ford heavier on within the the decrementals? was was It's just range or

Yes, heavier Ford indeed. to

and concludes for earnings everyone, quarter our today's ongoing you. XXXX call call your interest for in you, Thank Thank results. This in Visteon. third the participating

Thank for attending. you

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