SEC 8-K — VISTEON CORP (VC) (0000950124-08-000190) · filed 2008-01-17

EX-99.1 2 k23081exv99w1.htm PRESENTATION SLIDES exv99w1 Exhibit 99.1 2008 Business Update and Outlook

Automotive Analysts of New York

January 17, 2008

Applying our automotive intellect to design products that help customers build vehicles that appeal to drivers and passengers around the world Forward Looking Information

This presentation contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not guarantees of future results and conditions but rather are subject to various factors, risks and uncertainties that could cause our actual results to differ materially from those expressed in these forward-looking statements, including general economic conditions, including changes in interest rates and fuel prices; the automotive vehicle production volumes and schedules of our customers, and in particular Ford's vehicle production volumes; work stoppages at our customers; our ability to satisfy our future capital and liquidity requirements and comply with the terms of our existing credit agreements and indentures; the financial distress of our suppliers, and other significant suppliers to our customers, and possible disruptions in the supply of commodities to us or our customers due to financial distress or work stoppages; our ability to timely implement, and realize the anticipated benefits of, restructuring and other cost-reduction initiatives, including our multi-year improvement plan, and our successful execution of internal performance plans and other productivity efforts; the timing and expenses related to restructurings, employee reductions, acquisitions or dispositions; increases in raw material and energy costs and our ability to offset or recover these costs; the effects of reorganizations and/or restructuring plans by our customers; the effect of pension and other post-employment benefit obligations; increases in our warranty, product liability and recall costs; the outcome of legal or regulatory proceedings to which we are or may become a party; as well as those factors identified in our filings with the SEC (including our Annual Report on Form 10-K for the fiscal year ended Dec. 31, 2006). We assume no obligation to update these forward-looking statements. The financial results presented herein are preliminary, unaudited and subject to change; final audited financial results will be included in the company's Annual Report on Form10-K for the fiscal year-ended December 31, 2007 Visteon Overview

Air Induction

HVAC Systems

Powertrain Cooling

Compressors

Climate

Cockpit Modules

Instrument Panels

Consoles

Door Trim Modules

Interiors

Audio

Driver Information

Cockpit Electronics

Front / Rear Lighting

$3.3 billion

$3.1 billion

$3.6 billion

2007E Sales

Mfg Locations:

$0.3 Billion

$1.0 billion

$0.4 billion

2007E Non-Consolidated Sales

#2

#2

#6

Market Position

# - High Cost

6

18

5

# - Low Cost

12

9

9

Primary Product Lines

Electronics

Sales by Product Group include intra-company sales that are eliminated in consolidation Global Market Position

No. 2 - Interiors

No. 2 - Climate Control

No. 3 - OE Audio Head Unit

No. 3 - Driver Information

No. 4 - Center Stack Electronics 2007 Accomplishments

New business wins continue

Completed 7 restructuring actions, including divestitures of non-core operations

Continued shift to lower cost countries

EBIT-R in line with guidance; free cash flow significantly better

Actions to enhance liquidity; YE cash at $1.75 billion

Delivered Commitments

Please see important disclosures regarding "Forward Looking Information" and "Use of Non-GAAP Financial Information". Value Perspective

Asian sales strong today and growing anchored by Halla and Yanfeng

Non-consolidated sales of $3 billion by 2010 mostly in Asia

Diverse customer base - Ford NA decreasing to 6% of total sales by 2010

Value Perspective

Diverse Sales - Customers and Geographies

Key Drivers

Restructuring on track; Escrow Account funding

LCC objective of 75% manufacturing / 50% engineering in 2009

Addressing overhead structure - global product groups further developed - launched "2009 Imperative"

Competitive Cost Structure

Recognized Technology Creating Strong Market Positions

Focused development and commercialization of innovative and cost competitive products

$500 million term loan addition

No significant near term debt maturities combined with covenant light borrowings

Cash actions - Halla transaction / NA and Europe accessibility

Strong Liquidity Supported By Key 2007 Actions

Please see important disclosures regarding "Forward Looking Information". Sales Position - Regional View

2007E Non-Consolidated Sales - $1.7 Billion

2007E Consolidated Sales - $10.7 Billion

2010E Consolidated Sales - $9.8 Billion

2010E Non-Consolidated Sales - $3.2 Billion

Asia Sales Strong Today and Growing - Anchored by Halla and YanFeng

Please see important disclosures regarding "Forward Looking Information". Asia Operations

Philippines

United Aluminum Radiator

(Changchun)

Jiangxi Fuchang

(Nanchang)

Halla Climate Control

(Rayong)

Halla Climate Control

(Pyongtaek, Taejon, Ulsan)

Japan Climate Systems

(Hiroshima)

Dongfeng Visteon

(Wuhan, Shiyan)

Yanfeng Visteon

Automotive Trim Systems

(Beijing)

Halla Climate Control

(Dalian)

YanFeng Visteon

Automotive Trim Systems

(Chongqing)

Visteon Automotive Systems India

Visteon TYC Autolamps

(Changzhou)

Visteon Climate Control

(Chongqing)

Non-Consolidated

Consolidated

Interiors

Climate Control

Electronics

TACO Visteon Automotive

(Pune)

Visteon Thailand

(Rayong)

(Chennai)

Visteon Automotive Systems India

(Chennai)

Visteon Japan

(Hiroshima)

Yanfeng Visteon Electronics

(Shanghai)

Yanfeng Visteon

Automotive Trim Systems

(Shanghai)

Yanfeng Key Safety Systems

(Shanghai)

Yanfeng Visteon Betung

Automotive Instrumentation

(Shaoxing)

China

Thailand

Japan

Korea

India

Climate Systems India

Bhiwadi

Visteon Climate Control

(Beijing)

Jiangsu Toppower Automotive

(Xuzhou, Chongqing,Changhun, Shenzen)

Visteon Changan Engine

Control Systems

(Chongqing)

(Pune)

Visteon Interiors Korea)

(Ulsan, Yesan, Asan, Busan)

Visteon Philippines

(Santa Rosa)

(1) - VC Share calculated on proportional share basis

Non-Consolidated Asian Sales of $2.8 Billion by 2010

Please see important disclosures regarding "Forward Looking Information".

Duck Yang - Korea Sales Position - Customer View

2010E Customer Distribution - Consolidated Sales

Hyundai / Kia largest customer in 2010

Total Ford sales decline to 24% in 2010

GM / Chrysler growth driven by Interiors and Lighting content

2007E Customer Distribution - Consolidated Sales

Customer Diversification - Ford North America at 6% of Sales in 2010

Please see important disclosures regarding "Forward Looking Information". "2009 Imperative" - actions to reduce overhead structure

Reductions in Administrative and Engineering structure through rightsizing, organizational model restructuring, outsourcing opportunities and other actions

Objective linked to compensation

$215M by end of 2010

30 facility actions

Low cost region shift - manufacturing and engineering

Headcount reductions

U.K. facilities largely addressed in 2008

$210M through 2007

$420M by end of 2010

Selected Actions

Gross Savings

Restructuring Actions

3 Year Restructuring Plan

Overhead Reduction

Cumulative Savings $635 million

Restructuring On Track - Funding From Escrow Account

Please see important disclosures regarding "Forward Looking Information". Progression to Profitability

Delivered

Commitments

2007

2008

2009

2010

Significant Restructuring

Free Cash Flow Positive

Profitable

Please see important disclosures regarding "Forward Looking Information".

Our diverse customer base, combined with our innovation and market leading technology and...

Cost competitive footprint will drive achievement of these objectives Continued Progress in 2007

7 actions completed in 2007

Connersville successfully completed in December

Progressing Bedford closure and disposition of Swansea operation

Cumulative savings from actions on track - $420M

Escrow funds of $143M available at 2007 YE for future actions (50/50 sharing)

Manufacturing and engineering footprints - Q3 % in lower cost countries:

57% of Mfg employees

34% of Eng. employees

Q3 YTD operating metrics vs. 2006 results:

Health / safety 25% better

Quality 32% better

Lower capital investment

Product groups more autonomous

Premium costs challenging results

Continue to win new business with customers around the world and across all product lines

Q3 YTD new business wins of ~ $750 million

Q3 YTD new business wins of ~ $200 million in non- consolidated affiliates

Ford sourcing actions

Program cancellations

Restructuring

Operations

Customer

Restructuring on Track

Continuing Improvement

Value Recognition

Please see important disclosures regarding "Forward Looking Information". 2008 and Forward

Dynamic OE production environment

N. America - negative

W. Europe - slightly negative

Asia (China, Korea) - positive

Execution of our restructuring plan

Substantial completion of actions in 2009

Escrow Account matching in effect

Swansea sale expected to be completed in Q1 2008

Actions to further reduce overhead structure

"2009 Imperative" - Incremental actions to further rightsize

More autonomous Product Groups

Continued cash flow focus - alignment of compensation to Product Group level performance

Please see important disclosures regarding "Forward Looking Information". Net New Business - 2008 - 2010

Wins

Losses

Climate

$ 400

Interiors

$ 650

Electronics

$ (370)

2008 - 2010 Net New Business - $730 Million

Other

$ 50

Steady growth in Climate and Interiors - $1.050 billion cumulative

Ford resourcing actions adversely impacting Electronics

($ in millions)

Lower by $600 million:

Program volume / cancellations 50%

Ford resourcing 33%

Pass through content 13%

Current - 2008 - 2010

Change From Prior - 2008 - 2009

Please see important disclosures regarding "Forward Looking Information". Restructuring Actions

11

7

18

8

4

30

Restructuring Timing - 30 Facilities Actions

Restructuring Savings Summary

($ in millions)

2007 Actions

Cumulative Gross Savings of $420M

Please see important disclosures regarding "Forward Looking Information" and "Use of Non-GAAP Financial Information". Overhead Cost Actions

Targeting further reductions in Administrative and Engineering cost structure - "2009 Imperative"

Streamlined operating model key to achieving savings / efficiency gains

Over 50+ actions identified to deliver savings - working with third party consultant to ensure successful implementation

Overview

Administrative Costs As a Percent of Sales

Savings Summary

($ in millions)

Please see important disclosures regarding "Forward Looking Information" and "Use of Non-GAAP Financial Information". Visteon at the 2008 NAIAS

2008 Cadillac CTS Lighting

2009 Dodge Ram

Interiors, Climate

2008 Chevrolet Tahoe Lighting

2009 Ford F-150

Climate, Electronics

2008 Buick Enclave

Lighting

2009 Hyundai Genesis

Climate

2008 Chevrolet Malibu - 2008 Car of the Year

Lighting

2008 Mazda CX-9 - 2008 Truck of the Year

Climate, Electronics Outlook Assumptions

Still finalizing 2007 year-end results

Our restructuring actions have a significant impact in our Outlook

Production volumes generated at platform level from industry sources (e.g. CSM) and customer estimates

Foreign exchange based on 3Q 2007 rates

Impact of anticipated divestitures reflected in Outlook

Please see important disclosures regarding "Forward Looking Information" and "Use of Non-GAAP Financial Information". 2007 Preliminary Estimates Prior Current

Product Sales $10.6 B $10.7 B

EBIT-R $(65) M (+/- $15 M) $(60) M (+/- $5 M) Free Cash Flow Change in Securitization Guidance Free Cash Flow* $(290) M $ (60) M $(230) M +/- $30 M $(95) M $(70) M $(25) M (+/- $10 M)

* Prior 2007 estimate for Free Cash Flow based on receivables sales equal to the December 31, 2006 level of $157 million.

Please see important disclosures regarding "Forward Looking Information" and "Use of Non-GAAP Financial Information". Outlook - Forward Years 2008E 2009E

Product Sales $9.7 B +/- $100 M $9.4 B +/- $100 M EBIT-R Breakeven +/- $25 M $200 M +/- $50 M Free Cash Flow $(300) M +/- $50 M $10 M +/- $100 M

* Full year estimates for Free Cash Flow are based on receivables sales equal to the December 31, 2007 level of $99 million.

Please see important disclosures regarding "Forward Looking Information" and "Use of Non-GAAP Financial Information". 2008E Production - Key Platforms

Hyundai / Kia $ 2.3 $ 740

Ford Europe $ 1.7 $ 800

Ford N. America $ 1.1 $ 420

Nissan NA (truck) $ 0.7 $2,100

PSA - Citroen $ 0.5 $ 250

Y/Y Units

5%

Flat

6%

CPV (2)

Sales (1)

4%

Flat

(1) - Total 2008E sales - in billions

(2) - Content Per Vehicle - 2008E average

Customer production assumptions consistent with unit production of:

N. America ~ 14.5 million units

W. Europe ~ 15.6 million units

Ford includes total car and truck production

Nissan, PSA and Hyundai / Kia only for vehicles with meaningful content

Please see important disclosures regarding "Forward Looking Information". Product Sales - 2007 to 2009 Key Drivers

Volume / Mix / New Business

All Other

2007E to 2008E

$10.6

to

$9.6 - $9.8

($ in billions)

Divestitures

Closures

$(0.6)

$(0.4)

$0.1

$ -

$9.6 - $9.8

to

$9.3 - $9.5

2008E to 2009E

$(0.3)

$0.1

$(0.1)

Sales Decline by $900 Million

Sales Decline by $300 Million

Please see important disclosures regarding "Forward Looking Information". EBIT-R - 2007 to 2009 Key Drivers

$(60)

to

$(25) - $25

$(25) - $25

to

$150 - $250

($ in millions)

Overhead

Cost Actions

Divestitures /

Closures

Net Cost

Performance

2007E to 2008E

2008E to 2009E

Volume / Mix /

New Business

Net Plant

Restructuring

$(95)

$(75)

$80

$70

$80

$(70)

$ 15

$145

$80

$ 30

EBIT-R Improves by $35 - $85

EBIT-R Improves by $175 - $275

Please see important disclosures regarding "Forward Looking Information" and "Use of Non-GAAP Financial Information". Free Cash Flow

($ in millions)

Please see important disclosures regarding "Forward Looking Information" and "Use of Non-GAAP Financial Information". 2007E to 2009E - Free Cash Flow

($ in millions)

Please see important disclosures regarding "Forward Looking Information" and "Use of Non-GAAP Financial Information".

* Midpoint of Guidance Range Cash and Debt

Term Loan

7.00%

Sr. Notes

8.25%

Sr. Notes

Significant Debt Maturities

Runway to execute plan

No significant maturities until 2010

Continue to monitor capital structure opportunities, markets permitting

YE 2007 debt of $2.8 billion

$1,422

$1,750

Cash balance increase of about $330M

Includes Halla financing of $142M

Positive free cash flow in Q4 2007

North America and Europe cash of $1.5B

Ability to move cash between regions

Sufficient regional and total liquidity

Cash Balances

Please see important disclosures regarding "Forward Looking Information".

($ in millions)

($ in millions) Well Positioned for the Future

Liquidity

$1.75B in cash - $1.5B in NA and Europe; no significant maturities until 2010

Value Perspective

Visteon Position

Diverse Sales - Customers and Geographies

By 2010, total sales to Ford accounts for 24% of sales;

Ford NA at 6%

North America accounts for 31% of sales now; Asia becomes largest region in 2009 on a consolidated basis

Competitive Cost Structure

No UAW Master Agreement employees

Moving to low cost locations - 57% of manufacturing and 34% of engineering personnel

"2009 Imperative" - $215M cost reduction through 2010

Track Record

Innovative technologies - continued new business wins

Improved quality and safety performance

Restructuring on track - successfully completed 17 as planned

Delivered 2007 results

Please see important disclosures regarding "Forward Looking Information".

Continue to Deliver Commitments 2008 Business Update and Outlook

Automotive Analysts of New York

January 17, 2008

Appendix 2008 Business Update and Outlook

Automotive Analysts of New York

January 17, 2008

Product Group Highlights Product Group Sales

2007E

2008E

2010E

Total = $10.7 Billion

Total = $9.7 Billion

Total = $9.8 Billion

Consolidated Sales

Non-Consolidated Sales

Total = $1.7 billion

Total = $2.1 Billion

Total = $3.2 Billion

Please see important disclosures regarding "Forward Looking Information". Climate

Sales by Region ($ in billions)

Position

No. 2 in growing global climate segment

Technology leader in key segments - compressors and alternate refrigerants

Balanced global mix with significant presence in Asia

Please see important disclosures regarding "Forward Looking Information".

Customer Distribution - 2007E

$3.3

$3.3

$3.6

$3.9

55%

22%

23%

61%

19%

20%

Initiatives

Savings from restructuring actions

Continued integration of HCC and VC climate operations

Further diversify customer base

Leverage Asian base

Capitalize on technology leadership

Included in Sales by Customer - All Other are intra-company sales that are eliminated in consolidation Electronics

Position

NA reduction driven by declining share at Ford, particularly powertrain electronics

Significant growth in non-consolidated sales in China/India JVs - market growth and migration of NA/EU production to China for improved margins

$500M increase 2007 - 2010

Please see important disclosures regarding "Forward Looking Information".

$3.6

$3.2

$2.9

$2.6

60%

34%

67%

26%

Initiatives

Complete NA manufacturing restructuring actions - production transfer to third party and footprint rationalization

Increased utilization of low cost China footprint

Strengthen global product platform approach to support incremental sales opportunities in 2011-2012 timeframe

Included in Sales by Customer - All Other are intra-company sales that are eliminated in consolidation

Sales by Region ($ in billions)

Customer Distribution - 2007E Interiors

Position

Strong market position - #2 globally in cockpits, instrument panels and consoles

Market leader in China - No. 1 position via YanFeng Visteon

Unique footprint and full systems capabilities

Please see important disclosures regarding "Forward Looking Information".

$3.1

$3.2

$3.2

$3.5

26%

51%

23%

34%

39%

27%

Initiatives

Significant new launch activity in North America

Chrysler grows to 13% of sales in 2010

New business providing margin expansion

Continued shift of engineering to lower cost countries

Included in Sales by Customer - All Other are intra-company sales that are eliminated in consolidation

Customer Distribution - 2007E

Sales by Region ($ in billions) 2008 Business Update and Outlook

Automotive Analysts of New York

January 17, 2008

Financial Disclosures Use of Non-GAAP Financial Information

Throughout this presentation, the Company has provided information regarding certain non-GAAP financial measures. These measures include "free cash flow," and "EBIT-R." Free cash flow represents cash flow from operating activities less capital expenditures. EBIT-R represents net income (loss) before net interest expense and debt extinguishment cost and the provision for income taxes, excluding impairment, extraordinary items and net unreimbursed restructuring expenses and other reimbursable costs as well as the one-time gain on the ACH Transactions.

Management believes that free cash flow is useful in analyzing the Company's ability to service and repay its debt, and it uses the measure for planning and forecasting in future periods, as well as in management compensation decisions. Free cash flow is not a recognized term under accounting principles generally accepted in the United States ("GAAP") and does not reflect cash used to service debt and does not reflect funds available for investment or other discretionary uses.

Management believes EBIT-R is useful to investors because it provides meaningful supplemental information regarding the Company's operating results because the excluded items may vary significantly in timing or amounts and/or may obscure trends useful in evaluating and comparing the Company's continuing operating activities. Management uses this measure for planning and forecasting in future periods. EBIT-R is not a recognized term under GAAP and does not purport to be an alternative to net earnings (losses) as an indicator of operating performance or to cash flows from operating activities as a measure of liquidity. Because not all companies use identical calculations, this presentation of EBIT-R may not be comparable to other similarly titled measures of other companies. Additionally, EBIT-R is not intended to be a measure of free cash flow for management's discretionary use, as it does not consider certain cash requirements such as interest payments, tax payments and debt service requirements.

In order to provide the forward-looking non-GAAP financial measures for 2007, 2008 and 2009, the Company is providing reconciliations to the most directly comparable GAAP financial measures on the following slide. The provision of these comparable GAAP financial measures is not intended to indicate that the Company is explicitly or implicitly providing projections on those GAAP financial measures, and actual results for such measures are likely to vary from those presented. The reconciliations include all information reasonably available to the Company at the date of this presentation and the adjustments that management can reasonably predict. EBIT-R and Free Cash Flow Reconciliation

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