Earnings call transcript Q1 2023

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Operator

Ladies and gentlemen thank you for standing by. My name is Brent and I will be your conference operator today. At this time, I would like to welcome everyone to Visteon's First Quarter 2023 Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. Instructions] [Operator

ahead. is Ryan to Investor Wentling, Treasurer. please It over today's Relations my Sir Mr. to Vice go now you. turn pleasure call and Thank President of

Ryan Wentling

of mode Good lines placed Investor our morning. have call first this been note the to on noise. XXXX. for Wentling, recorded call I'm Vice is earnings Relations Treasurer. being prevent Welcome Ryan background and to Please that listen-only quarter a President and all

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

Forward-looking those various results and factors, expressed Please refer in statements to page cause conditions, to uncertainties of and results subject could these Forward-Looking details. that statements. are are additional not the Information for risks, our to guarantees from but entitled materially future actual rather differ

posted today's done download website visit morning. for Please call materials you Presentation not the if were Visteon's of Investors this material have to section investors.visteon.com on the so. already

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

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

for joining you Thank us.

turn call Now I will Sachin. the over to

Sachin Lawande

Visteon a first the execute the year Ryan call. for starting HX earnings company XXXX Good strong Thank summary you welcome morning our growth note. our The the results its you, quarter first for well continued team. provides to and everyone on joining strategy and thank quarter. of to a

production. outperformance driven currency compared shift to an increase in in million, sales industry connected strength experiences. XX% to and the to global our by from sales portfolio, of the excluding cockpit increase mainly were product which benefit year-over-year quarter $XXX digital First was a X% The continues vehicle of

vehicle XX production Our outperformed consecutive sales for quarters. have industry now

last when $XX was $XX sales an of increase to of EBITDA compared Adjusted XX.X% year. million million or

operational excellent deliver and the environment. demonstrate results despite to industry continues team challenging exceptional and commercial global Our discipline

of Proactive engagement our and with customers was a and suppliers overall impact factor the driving helped critical performance in quarter. mitigate semiconductor shortages the us in

followed patterns a negative in was cash $XX and historical as free quarter. Adjusted flow the million anticipated

the launching XX quarter a On new will busy vehicle which company in sales the had to help continue our products near front models with operational the growth in term. our us

to our company year start achieve the billion wins. business on goal new year us for in $X.X to new first The business in had a quarter. full This of billion also with the wins puts strong track $X

progress existing new for extension strategic support in the vehicle and our business existing technology car continue electric models BMS key with with electrification customers make good quarter We manufacturers. the joint development signing to in to of with our additional business agreements

and a the start we provided summary, year a company to good In year had earlier strong to puts the year. in achieve position targets the have this that full us it guidance

QX China of to in and page due consumer Turning all due of industry in incentives last of production up expiring was year, was the volume to QX weaker down pull demand mix world, in except a vehicle three. which regions to ahead sentiment.

supply Europe order better backlog, X% account fared growing X% with year-over-year with of customers compared customers our at on Visteon top the for the a strong in vehicle of semiconductors. general industry production than industry. to the QX, coupled led improved growth,

gradually. continues in in production compared robust, Asia. recent supply the And production was in demand down improve to double-digit prior driving primary Semiconductor was supply, the was has growth vehicle by to while increases vehicle China, offset also which of rest US Consumer been the in it year. constraint years production

that were compared to production, impacting was prior less and critically the QX, in of supply quarters. In number as chips short

semiconductors that current key supply improved the be demand, number growth to causing there still are with muted. even below However, are of a

the improved however, levels initially pricing at in cars anticipated. Nonetheless, in than elevated was more enabled industry Semiconductor supply. build improvement remained in QX, to QX, the supply despite the

well production from as ramp-up the benefited customer as products. of sales Visteon launched recently higher vehicle

the redesigns to supply, product chip use of supply our mitigated In addition, alternate components. to recent improved shortages chips, critical

supply to semiconductor sales products from quickly chain-related actions terms up and supply. we positive the higher production first Our also had ramp we impact of growth drive have mitigate in The helped recovery costs, semiconductor vehicle taken the supply consumer and to faster us the by have quarter was our customers. improved was quarter. demand to that of first market share sales of with new enabled production, benefited in that Overall, of than

X. Turning to Page

Our QX, quarters. When the continuing impact excluding unfavorable XX% net from strong impact digital foreign prior sales grew products exchange, pricing year-over-year cockpit favorable Visteon in and year-over-year. performance did from the the QX well from in

their several driven the due was with on growth was of sales cluster ramp-up of GM, it the in high-volume a digital in by growth. high Despite lines. microcontroller still supply cluster cluster products. vehicle Nissan key Our the some recent constraint Volkswagen and muted used to digital launches of

mitigate We forward. on impact redesign are a working that the will help going

the runway continues towards business penetration of all is clusters first clusters time. much growth. about XX%, digital future systems. cluster digital for of shift at And that substantial hybrid exceeded provides QX, of shipment to digital Overall, which clusters more Our in lower for industry

in to well growing vehicles. particularly in products recent launches vehicle and systems SmartCore new Geely with mid-segment The QX, in models. of high-performance due success Mahindra, did on with with also India good cockpit sales of a growing at ramp-up customers Mahindra, of is SmartCore for the and Our interest all indication

manufacturers, our displays the have the displays business is with in by of BMW, term new XXXX. first our business roll-off car launched impacted was several multiple in recently near we While which with launched

revenue from factored starting result, before of again onwards, year be a grow display full guidance. expect As into to all this which down we business to our XXXX year, was our

gap us also improved systems and in Overall, demand well business in Stellantis. cockpit did in for our for helped our narrowing the semiconductor company. of recent and improved the product account a with strong on VW the sales helped first our audio in redesigns, supply of quarter digital Lastly, products that quarter. QX, infotainment sales semiconductor resulting product supply supply strong was in of the The and

to focus year and all strong first started Page Turning $X.X business combination achieve train note in We to the our positions quarter the pipeline new cockpit. electrification experience of of the robust full on billion digital billion core industry, the of The with wins. us total the in start, the composition connected $X first in in of quarter. wins, a X. reflects opportunities The target year in of of on the new current power and the strong wins products, the well across a business

of the on have a We wins the page. highlighted few right

electric We level competitiveness important launched our becoming for added for and business especially models of is for Chinese a within These months, with in ambitious to systems more vehicle increasingly SmartCore OEM. complexity. were market High-performance systems XX two of cockpit is this the vehicles. computing very which

We our infotainment stand-alone also customer for new India. a added Android-based business in

of addition segment infotainment we Store product the discrete in market very markets. in especially mass competitive the are With capabilities, for OTA emerging vehicles, App and

go launch an with brands electric extends more program win several product to in for and on the and full-sized are Lastly, scheduled our multiple flagship global of XXXX. and versions America. North production OEM's line vehicle we existing additional North brands customer's XXXX, trucks. in into This models, vehicles SUVs new These BMS wireless to added American in electric including vehicles, later XXXX in across the

product are the OEMs approach taking increasingly to systems wins we electronic example to time introduction their it sourcing good develop that increased the models. of work make The across vehicle shorter have more platform that a systems. can lines, The highlighted multiple in are for attractive complexity

minutes the our would progress electrification momentum we On a spend in and this we few area. the are following business have in discussing to slide, building the I like made

seen electric Visteon's in superior all through new in electric made and in of help a is vehicle automotive in responding Turning the battery the growth vehicle models. that years first performance, by time. cars power first past range to this trend this to innovation Car electric of carmakers for manufacturers rapid electrification six. page BMS about rapidly year, vehicles the are strategy sales in electronics. offer The electric battery charging passenger launching build in to up of vehicles XX% industry sales and three quarter has

over This models team business measurement won in cell couple In slide the that BMS company over These first our and we portfolio the makers rest added the this battery summarizes the business safety, industry upcoming years. wins busy have progress decade. have and the accuracy for latest introduced total, We XX to customer in just configurations. the new we and launches across keep improve have electrification significant vehicle to past for and our in in three and to the first system, building starting car advanced with billion while of for continued made system revenue features BMS will $X momentum have in chemistries to launch. generation of develop are wireless supporting XXXX, will of wireless generate the our

systems, use systems other first-generation the voltage vehicles has volt battery electric of XXX seen While past are higher for in using the benefits. to interest and charge battery time the reduce increased an two years

power bidirectional added In charging focusing we addition grid conversion volt our support on products also electronics to batteries, upgrading to high-voltage cell to power systems. technology for have our and BMS XXX portfolio, to

shift year, the and Vegas, electronics support the industry with systems, power XXX Show to and XXX system consumers. to at will the latest which technologies vehicles set for this new of facilitate showcased electric the Our goal Las configurations. and shift in volt Electronics battery XXX our of believe is both Earlier BMS Consumer we higher with broader accelerate help to volt we a

joint a to next-generation Since co-develop launch development have their Asia then, solution for a with we targeted in car that's in XXXX. agreement maker BMS signed high-volume

their Visteon's in electrification programs a We of maker to DC-to-DC converters development future on-board charger have vehicles. power an multiple technology a and well electric highly of prototype capabilities develop agreement with positions and luxury These car to and signed business. next integrated generation validate the joint win to also a Europe company

able technology these to in expect business In additional come. develop to frame. by multiple to systems XXXX-'XX initiatives, to the electrification, team the BMS version introduction we accomplish rest and for in in the has I'm the to in for time been company with of through I very is advanced volt year. what I'm the electrification, pleased discussions for of excited are car makers what XXX customers announce addition development market

X. Page Turning to

support vehicle The the from team. first achievement the quarter is which new was its launched incredible operational for world an quarter an for in across XX first models in company the products to busy unique Visteon product viewpoint. sufficient The plans. the semiconductors launch supply market of new customers' each to critical production addition to Every vehicle dynamic ensuring requirements requires of end fit components of customization the in like

is launch instead all models As just multiple contribution correlation platform-based of decided of in across number the our vehicle more becoming to launches which operational of products. business revenue the the of execution initial program models and our highlight vehicle across we demonstrates a to provides the and more complete the from delivery product have

highlighted trucks XX-inch versions digital clusters launches the growth that of a that previously. other These demonstrate the have and with trucks the have to Silverado We follow launched of already SUVs product our in to XX-inch vehicles in heavy-duty and extension Chevy few our We contribute of cluster sales. GMC key we Sierra GM. programs our launched

XXXX. will region. rapidly and business continue Ranger is years Latin launches Our system the grown Ford the launched over two that's our a We past digital popular the digital in cluster for audio these mid-size XXXX for truck has which in GM America with this performance cluster and

the also in Geely launched electric reflecting Zeekr EV the our In new electric SmartCore digital and on increased vehicle ECARX on in China, were controller electric About a focus partnership from on XX% we at Honda launches eNPX cluster model vehicle. launches on cockpit a makers. the with car of vehicles domain

X. Page to Turning

our vehicle Our outlook full growing for level. at year at single-digit unchanged remains volumes customers production low with production

will chips will supply year. continue throughout semiconductor to some tight the although expect remain improve We

term. thus is where in in necessary the to As of our chip demand our is we U.S. that supply the near use second Europe far has objective goal chips to encouraging and and will in the expect by strong and remain not mentioned this and half be year. limited Consumer demand been redesign alternate previously,

With China the the also we consumer to in improve economy region. expect demand in improving

higher time At risk we arising high coupled to financing vehicle demand remains. with XXXX consumer our incorporated potential the the guidance same from that prices rates in

our the are full rest Our year are of robust demand in QX and year solid gives results the for us customers the near-term our outlook seeing we we XXXX and reaffirming confidence from guidance.

company first sales Turning XXth X. quarter to faster In consecutive well our vehicle the deliver Page executed production. summary, than growing of to the in quarter

adjusted operational and of of disciplined margin of execution excluding plans growth XX.X%. XX% sales the resulted in Our company's commercial and EBITDA currency strong

wins for first lastly, engaging the New puts we product first our quarter in business us to launches our and progress future track to in line quarter on our new goals existing by business vehicle with expectations were models full the business. for good the customers made programs achieve more in and year. in And new adding and with electrification

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

Jerome Rouquet

continuing and everyone. results operational and on commercial financial strong, quarter came Sachin morning, drive with first Thank our Visteon's good you, discipline in focus to results.

and higher year from prior recoveries. an exchange, customer sales a outperformance double-digit volumes, in increase XX% Excluding market customer grew benefiting QX versus

XXth market to our Semiconductor net quarter fourth pricing supply decreasing year. the the quarter, was in our improve customer Compared representing of a of parts number in volumes, growth of vehicle significantly of of XX% quarter continued with from a to critical last consecutive of growth production shortage markets.

As a and of through distributor broker the amount purchased result, decreased. sport channels semiconductors market the

sharing prices see reducing increased more EBITDA. we However, our QX this X which impact year, prior we customers. while are Compared elevated were able which to year, Tier our from finalize in adjusted the with we continue to to negotiations to sales customer suppliers

million, quarter leakage few Although, net sales EBITDA timing this was margin. large was customer favorable of adjusted improvement, prior and our a negatively representing in a a in dollars. the impacted Adjusted year-over-year supporting EBITDA in and net offset QX, growth. year, from the XX.X% the benefited partially recoveries secured $XX million by increases higher SG&A to engineering EBITDA expenses by still Compared

flow paid cash well increased million, that as compensation in negative the by QX, as partially in out of line incentive the cash the last in outflow year, settled free QX was experienced Adjusted customer late the with of $XX cash driven XXXX negotiations quarter. timing in recoveries we've

leverage QX, with million strong a our a million, ended sales the total, $XXX provide year, QX year for $XXX foundation of total of rest growth, us X.X results of representing negative expansion on and achieve ratio cash flow the net and full cash a of We guidance position track In of keep net margin tmes. our and generation. to cash

million. sales $XXX recoveries, the sales QX XX year-over-year. Page expansion increase more base sales margin provides just the When on an for XX. million, excluding Page customer under impact came million detail to and our quarter. Turning were representing from $XXX $XXX of increase

X%, the Compared customer to increased well offset prior driven year start both production which strong of supply in by improved customer Europe, America and year as more vehicle China. the semiconductor North than in as slow volumes demand

modest to was headwind a sales exchange X%. of Foreign

our driven The by remainder in sales, of growth was for products. the demand high digital base cockpit

across on production model additional new and will follow-on brought years, typically launches, continue sales, launches strong programs vehicles OEM to and grow convert Our the These wins drive increased platforms, sales. few our are are which business launched as into vehicle into on multiple product new past markets. in continue in continue to lines to

Despite are year-over-year on Customer costs which supply increased our with purchases. semiconductor we're non-semiconductor dotted from improving by recoveries, a the illustrated Tier still the X boxes and confronted impacting suppliers, dynamic, increased basis.

basis. year-over-year our on We higher to continue leading share to work these customers costs, a are which higher with recoveries to actively

to year close In year. we earlier addition, timing, were as out the also negotiations favorable in we from benefited this customer able more

to from essentially million, Finally, basis the a QX purchase our improving decreased XX% but spot sequential year-over-year at were recoveries flat supply approximately on $XX due suppliers.

sales decreased million, net to timing the and in engineering by primarily the Net by inflationary higher $XX elevated by year cost was costs. from of recoveries. other favorable the and semiconductor on compared engineering which prior timing recoveries base increased the XXXX, impact EBITDA of customer higher $X Adjusted driven flow-through driven million,

a percentage expectations. X.X% full the was net of with in year sales, tracking engineering our line As and in quarter

primarily and due million, up by partially debt offset personnel in was investment SG&A exchange. costs, Adjusted $X foreign bad to IT

a prior adjusted QX to SG&A X.X% year. in As at compared of sales, came percentage flat

to and leverage fixed allow Our increasing the while us cost, investing to our in cost continue business. scale discipline

came to production higher similar production anticipate finalize our In currently expectations, compared of anticipated, volumes and slightly when expect to than timing fairly due the QX, therefore, we to will QX, be customer negotiations. flat that financial primarily QX. favorable Compared better to QX in and we were to look volumes we industry to up modestly able to results QX

the business of maintained flexibility times. ratio balance ended net of a with on page of quarter We net opportunities. million XX. cash We which representing X.X the position our us $XXX a leverage sheets grow Turning in to provide the to total positions capital the well million, cash and one strongest of allocation negative $XXX industry, with

program XXXX. a repurchases the At several generation, announced will we adjusted to $XXX $XX well was including our other year The million Investor In in that to of million as with of for flow share QX, outflow industry Day, recent repurchase factors our quarter. of cash outflow expectations runs end as similar had cash depend line on flow we free an of the last amount in and dynamics. QX the

timing AP the we outflow, the customer late the an the driven was in balances, many negotiations. finalized between remainder of negotiations capital saw throughout were which quarter, by imbalance anticipate an Since of recovery we year. AR of and will Working the primarily normalize

our A related in in outflow in which the XXXX. flow million matures $XXX to cash a million. versus in guidance. payments Inventory Loan contemplated Cash cash countries, was elevated due the to and Interest was of year remained that were original to profitability primarily payments some our $X quarter slight prior taxes relate Term low increasing

in was driven was $XX partially primarily in in the favorable March. occurred million The CapEx timing VAT the This was outflow quarter. taxes offset incentive changes the and annual by changes payout, and other by company's which assets liabilities. in other in

We line the year with increase electrification. our full investments our expect this ongoing year in reflects which throughout number in manufacturing to guidance, and

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

company positioned for and continues strong have cash We flow sheet line free provide expansion flexibility. to the while margin growth, significant our generation, top balance

Sachin us track guidance of are those our and achieve year to targets. confidence the solid in mentioned, gives on we our As start XXXX

you to Thank like now questions. your the today. I call would for for your time open

Operator

line of is Instructions] the Your from RBC. with [Operator first Tom Narayan question

is line Your open.

Tom Narayan

Hi. Thanks guidance. a give range There's the just you question. of could Curious a for there. us if sense maybe taking the

wondering performance potentially consider should we the -- Given in slight as Thanks. what of your consider QX just that range would of we you as expectations if maybe slightly signaling remainder looking perhaps interpret in year? the or results, the the upper downshift -- the for, kind could end of you're for

Jerome Rouquet

Thanks It's It's good a question. Tom. Jerome.

take developed forecast close volumes slightly were I pleased that me that are let with with would start $XXX quarter the EBITDA indeed than Industry way better -- So million. forecasted. one. saying originally by the very we very to original

anticipated But early these to that the and had a we deals to that able the fact case. of more originally and of that customers close the the anticipated deals. were I that more was We close helped is that QX in recoveries were originally lot this we process with important into a and on We lot quarter think drag would deals these not able much had quarter.

year. for important fundamentally So changed nothing that the has it's state full to

originally with still of $XX year. leakage planned the million recoveries going the we that a full amount We about for to are had have of

quarters. So just between timing that's unchanged. It's

On production in a bit the QX. production side, better little yes,

second third, the terms half And we tracking at of midpoint guidance to this say the our still I Costs costs. of And about of the point. are are then We change our therefore, would in close demand. guidance. year wouldn't the cautious,

at again, as the now. it would So the I reconfirm midpoint is for guidance

Tom Narayan

Thank And what's of morning Chinese supplier the could you from on a on you're Okay. kind China? this tone some market. going of heard you. We earlier maybe seeing in what give us sense cautious in a

Sachin Lawande

Yeah.

Let me This Sachin. take this. is Hi.

of slow the that QX in about a why QX, on in than some So that towards lower the vehicle was And was about case. of talked sales started China There of expire. year. January end with account we to prior of production ahead pull incentives the coming were

the still January China. in result since and and did was of recover production sales overall, lower year-over-year. production February March But a as that, and But

We in also mix negative customer had QX. a

you the vehicle of despite as customers' look the And exclude But essentially believe in environment the to our despite flat. the overall our effects are us. still that, be from sales currency rest for of ahead negative our will sales QX at we production that year, if we grow

introduced We last from launches of new the continue rest that year. of through market will over the of have the benefiting in couple the we product ramp-up quarters that and are dynamic

a in production So overall not for us still we expect the growth positive. China experience to despite being environment

Tom Narayan

back I just if lot sneak the a on autos least there's And coming OEM in at year one, last of of normalizing. pricing about down in commentary half Okay. may certainly the the or

Given your guys is happen? that your have with read-through you kind contracts the of should negative dynamics there customers, of any if that

fixed of perhaps volumes. mean kind already because contracts could those it are a it's right positive such that higher Or --

Just auto on business? a weaker pricing curious OEM how as it affects your to thoughts environment your Thanks. retail

Sachin Lawande

the to know happening be our in long-term. has Sure. automotive This you And as way contracts this by Yeah. is first not tend happened for the something before. that And is time.

to the a expect turns So to same when the when we positive out it pricing. and experience do pricing not negative. And OEMs it around necessarily the more benefit we turns of remain be

So competitive. the is industry very

that that in either. if more to happen. volumes or good down, And change pressures if But if that to benefit a the expect same were that said, the have a as we you prices to continue I from would environment. come We positive benefit time challenging don't the see a from this

Tom Narayan

Thank over. it turn you. I’ll

Operator

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

line Your is open.

Mark Delaney

questions. you morning. Yes, taking very the for Thank good

is The discussion. the follow-up a pricing first one on

inflationary the guidance? need just the getting mentioned year to some to you costs in on your still quarter. the recoveries success first asset passing have good Maybe to fixed better of understand, meet balance in order with much You for how

Jerome Rouquet

few that nothing the deals as Yes. are just a It's but open I on indicated major. slide, a few We've customers. got

again spot are in pretty QX, our versus $XX to million we much million. in you'll we've down. essentially forward recoveries, recovered So versus already line than the dynamic with that outlook, in billion million year $XXX QX QX close it was some – see going full which QX. is buys had $XX going will buys more lower of be a $X amount in We spot And

you're increase recoveries So seeing will further decline recoveries offset cost it and partially or be customers. that from by surcharge

So collect. different are of tracking little fact overall it's bit no in we the to mention QX, as well from we to some other incurred seen pretty QX well. There what is as that quarters we've well. still in more had to but catch-up like a I'd level in costs related

that's that call can forward. as kind a like effect, it go I of sharing if we So

Mark Delaney

electronics? today, highlighting if was power you That’s you like good the see are electronics your again step-up us sell the that sell At when does and set products guys just comments newer on electronics and content – that power CES power Maybe selling helpful. of potentially in could the also there that power to other look broader Thanks. quarter. relative conversion. first strong question And What BMS? remind the to we and momentum in bookings

of now now see longer-term you you're response you give Can that a with evolving And about customers us could there? proof-of-concept believe speak seeing? moving been with sense about spoke you opportunity to And customer. you've you what speaking sampling kind and I Thanks. the that just one set of that products, forward,

Sachin Lawande

Sure.

BMS our about So and start – with yes, to so there then respect electronics. I'll talk

I ranges the We we to $XXX density the power manage well But between for enabling it electronics, higher that that have cells to should comes upon efficiency. the battery, $XXX XXX-volt requires to then mention battery. again that previously on size as which have the when the focus as obviously said content is really which focus shift number impacts power to depending of to of our the architectures

box. high-voltage converters; And DC-to-DC and areas that: junction three we charger; are the on the product on-board within focusing

typically Now of the vehicle. in range they $XXXX come that depending content about contain, per required in together are to three upon amount But they features terms $XXX of to all would prices. to the

So of how comparison would to that look it gives you a little versus bit BMS. a

an is on-board agreement we require with joint one to The we And in provide because power development this have systems. converters charger that DC-to-DC will safety ADAS need customer about in this product DC-to-DC ASIL particular converters and level earlier of multiple Europe. also talked to and that addition have will to will

So our it's a area, believe order very to system high that's charging solutions consider support to focus that area the new has understanding and as can solutions capacity complex it I especially volts, we we the charge semiconductor the industry out to in the XXX density higher that to And very electronic this more this in achieve products. shifting bring requirements for lot creates time. what There's with bring and power commodity would and there. But reduce design want specific with we power to that respect to opportunities us batteries product, to some leveraging innovations electronics. a power of of technology

exciting us. area a So for very

in the mention area been BMS be for can as that expect when as also XXXX so terms see us a should contribution has revenue likely it's be to that or to shaping to I is business decade. from it second the this post us. big that believe be we up But for And of half going we of is

about excited very it overall. So

Mark Delaney

Thank you.

Operator

the question of Barclays. Dan next from is Your Levy with line

open. is line Your

Dan Levy

about your to the environment I your you. and -- purchases Thank chip morning. ask Good about Hi. specifically. wanted

On if correctly. microcontrollers this I year issue think, the that on last on in you I and recall the is call, XXXX analog a noted the and bit issue power was more more

constraints So And impacting case just and if constrained recoveries? it's broadly that wondering that is power of than how more that's the your shift analog? MCs in still those are the pace

Sachin Lawande

Yes.

indication to I would volatility not year semiconductor supply. comes and say supply. exists of specific The enough mentioned last great that was a microcontroller it that when I the it's So there still was an issue

essentially is up supplier also our that demand we with here. is to that have keep the able and what was Now not with increasing the issue demand

action our terms supplier, use supply is impact that to availability. mentioned that from micro is has I that higher alternative redesign but of an mitigating As the same option to in also

appreciate help going ability on And that costs their us the not any that mitigate, supply. from especially, of the in to the alternatives and nimble that's recover understand customers. extraordinary come up that impact impact minimize being They to do the material reduction our to a going impact any second production. the in with to I vehicle and half situation of is have believe us

going be we more it's have have think that already to well launched. I done in redesigns with as normal So we the XXXX like business

Dan Levy

Great. Okay.

doesn't mix the the recovery. really So of Thank you. pace impact

Second, SKUs within of And the simplification of clusters have other fewer proliferation for generally you. number you I'm just or their reduce Thank and one speaking just Can configurations you, sort generally speaking neutral? screen you just on to the their about SKUs number that is by infotainment the wide And how good the digital wondering on GM of is displays? noted XX%. a it simplification? and day call plans talk of

Sachin Lawande

supply now SKUs. these little of a displays bit that industry great of jumped how the I of to is that And experiencing and has configurations think fragmentation in question. reflection helping various management the not various effect on it and are That's Yes. is a the a

So it beneficial us. clearly is to is something that

number to been of on and of higher have SKUs. standardization try fewer the bring drive a to benefit displays We volume within trying the

for we believe this the volume down can to different or that approach maybe standardization with across up so the approach. that has the more greater as been benefit and from customers. of our high platform also number of that three share these refer will that products of configurations would we the then solution come that a more following four can be a what can to we to fundamentally And So components settle on industry

the reduce So helpful your variations that to we the answer is and us SKUs. it industry very to short in the today would of have question number be to

Dan Levy

out a number there's limited be little still if they're the more there? even limiting you. you it's mean if still design SKUs there's impact would responsible on input I For fully design for SKUs, of number probably of even to

Sachin Lawande

is correct. That

other variants. So -- changes makes management simplifies it the just nothing the of various than or

Dan Levy

Thank you. Great.

Operator

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

line Your open. is

James Picariello

Hi, everyone.

Just on year. full the to you million the $XXX recoveries guided the for

heard came realized in with this certain expected than to if with I progress I quarter, in million customers, correctly. You that better believe negotiations $XX your which respect

rate? So apologies a any I smooth million expecting should if recovery quarter? market type we this relatively quarter missed that. My open per $XX be spot purchases place And take had did

Jerome Rouquet

Absolutely no problem. yes. James. Good Yes morning,

were We the incur can to be some seeing the bit think point, $XX with was end We it little year. per over recovered $XX which line than we year. QX quarter. this last spot we last much $XXX of in seen last lumpy, of in million at QX. have at towards the buys in was year I something of but a of million tune did -- lower what are but QX million

closed and of And we've -- a So, fairly surcharge are said, coming I it's as -- QX. number deals the we of in down. recovered -- negotiated number large buys spot are we've large a then

few going So still expect declining forward. that be a we but it there's by spot will will offset buys be open

James Picariello

recovery at recoveries? the year view terms happening and material alter better way rate full surcharge faster in then of a the that if But is in any doesn't

Jerome Rouquet

At yes. to year million. So essentially better still change the impact. EBITDA It's faster, for it the doesn't a rate, $XX close full

QX We some deals last I So it's were and QX. even year again, would had that QX. in just say, closed timing between

It of big little XXXX variables a QX probably XXXX. two we will which I for So in recoveries bit indicated will function kind of our are had be in profit. to earnings our had be of a flatter, would that sales engineering similar be a and and the function what more in profile more seen

James Picariello

latest target just way? the relative And and on award any $XXX BMS add-on in revenue XXXX, view by to this electrification your of latest it. award alter that Got million does

Sachin Lawande

OEM. on award more Not anticipate extensions couple We with and We really. this follow. them vehicle initial models we were did had that see would the to a No. particular with of

patience of the in sort the our of with win. this of validation terms BMS growth on a OEM more is this So

James Picariello

we And of or expect beyond dynamic? more. is of this buybacks squeeze authorization Share if I could any just XXXX that execution that should a one year, and more

Jerome Rouquet

in authorization We've announced the March.

on and will to of intent active our it in factors. a market the So depend variety definitely be is

expect we to share repurchases some will So year. this see

James Picariello

it. you. Got Thank

Jerome Rouquet

you. Thank

Operator

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

open. Your line is

Luke Junk

Good morning. Thanks for taking the questions.

background Thank follow-on with can that on standards And some For if part quickly the where clearly seems customers outside I'm wondering US. the give the basis reading any a other more I BMS? based impact there's in now customer On you're similar for Asking EV, in just proposed there us is this like the on BMS -- start and how engaged it wondering, wireless award I am right business that if at that OEMs am scale in more there? CAFE quarter? your the session is a you. right? -- in you is look just in I looking this pressure given helping you're might if to

Sachin Lawande

Yes.

has I So strong prepared some a with -- this America. higher-end mentioned remarks of for OEM North a large this presence trucks. for quarter is we extension about win earlier, talked that global fairly And as their in the SUVs really that it's and on

this look first multiple great at occurs OEM. the awards of I product platform of the discussed we say development would across previously that have So, the of models vehicle strategy the a example where is,

of terms of were grow anticipating to we OEM. we the So, with have number vehicles would in this

some the see more to the that vehicle follow. with win also But which have GM, to it's we It's models our is pleased that talked OEM. see of number it hopeful are We we has with second how And dynamic very seen have will extensions. with about and same this developing we're good them.

the launches we the in electric like about a it if for is train. product brains, is task, which us of challenging have. in power had anticipated. over we integration is of talk number platform busy will, it that couple something we BMS, when fairly the though a keep terms new that Even of you any say the of It as as would I will approach, the years vehicle of next progressing a So fairly always especially

be I help that these mid-term scheduled think future growth with continue would these OEMs of we achieve they So will us think, launch. vehicle in well. in their targets for to position the near-term have a very terms as And I to number for position models well of and strong that OEMs

Luke Junk

the to that. Thank follow-up, to you get my just then going zoom relative where your thinking you. demand book ability two the on out XX,XXX Really second, that reporting And of feet business real your business? what think revenue for perspective you're you're time you your is primary about your in that for that love in ex-pricing? today Thank is lenses: here. that level the electronics trend you and I'm seeing lens; backlog I'd the to in to supply underlying being demand or when cockpit then volumes just in to versus one in are execution

Sachin Lawande

demand the say, situation, I as follows. So is would

backlog later. as they Europe, placing So know, you their a happening with people there deliveries have real orders ahead order and

So although we all backlog entered with demand very our Europe. And supply with most customers supply able the order of been with meet not year more in to it. strong of improving, and most the a the of we've

the and et order of filling as in also far some inventories, backlog still is side be is that terms concerned. some dealer there to So cetera to pipeline needs the of as European done catch-up be fulfilled

we least QX, we optimistic demand term in to strong pretty So that there. will the near continue remain see at

more with there the we we is that launches and also that from the In strong pretty that customers. we are our America, supporting. are do would North launches demand say to vehicle It has have

should so pretty with have robust term. And that us in production different of the dynamic revenue near mentioned we our mix our customer But we helping that terms been the a nonetheless have is China, there not that favorable. in launches new growth. remain

at shared how will -- this discussion in it would the indication consistent now. full which provided last watchful concern does we terms to point have We we and see is tried continue what this with guidance should we in weaken this we stay that demand no we half. the earlier see now, year are long continue So if to this just the for whether the is demand and of in it any, to therefore, have that also think but second and have of

Luke Junk

Thanks. there. I’ll leave it

Operator

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

open. Your line is

Emmanuel Rosner

good morning. and Thanks

So on of follow remind you wins of thanks for the accomplished. win. announcements all of win BMS X the us start us or the at some Can expected and Can on color when good look production -- the milestones Slide -- far? maybe I remind and wireless just you various these sequence so the

Sachin Lawande

Sure.

year. we production about already have with public some and them also the will the GM GM, in expectations has continue been their they on And of they discussed last have this this to been that their respect have with scheduled call. that since launches year with of So volume

to about And those them we'll talked probably a extension, the OEM in vehicle it early are you'll of second With launches supporting the about volumes XXXX. and So -- those directly near models talked have that's of we the from and XXXX call, middle be that couple previously. respect term. in on this this we happening

win this vehicle is four more adds models. What

our to XXXX, addition an launches. be to going there's So XXXX

And so with that it's to anticipating were business launch always and this -- again, booking We we'll this, up that be I would plan. new. want a but to something follow good was this suggest

So is like. that's schedule how this looking near-term XXXX-XXXX launch

in XX of before BMS be that with mentioned, will we launching this models which all these to take probably the vehicle we we most are will the frame As us way have XXXX on about middle launched. time of

Emmanuel Rosner

And premium brands of of timing? terms in the the OEM German

Sachin Lawande

That's also XXXX.

Emmanuel Rosner

of And to takes? of with of a and the think out performance Could you high-level as guess the I similar puts think Understood. suggested I could a the in be sort I help quarter. bridge just us follow-up, the Okay. like part a second the early you first presentation that -- quarter

Jerome Rouquet

Yes. that's good question. No, a

factors three are QX. there impacting So

we First, in being QX. versus up IHS slightly and saw -- you QX

dramatic. So nothing IHS X.X% that we be up is but by volumes so think higher, could I slightly think

billion still QX. So we expect sales for $X to slightly be our

is all second in some In to Jan. level of deals what terms which deals similar that we've recovery, do expect -- the see with driver deals leakage the of a in seen quarter as QX the of second versus of retro Xst you said essentially customer as I are see profitability, earlier, we but

much. dynamic so the So really change it doesn't

a we've go gross fact in the our some QX. is quarters, last engineering throughout item that seeing costs third been on the then uptake bit little you And engineering. see the will as And up few

we'll be slight We still the on are offset negative. a some recovery but side, level expecting as of well engineering

So neutral flat bit and cost quarter-over-quarter. EBITDA then by bit more or standpoint from a little a an in summary, maybe leakage recoveries volumes higher engineering offset little

us EBITDA seen So what an XX% give third quarter. to that should similar the we've in mark in the

Emmanuel Rosner

the the overall in That’s any guess cadence, super year-over-year basis? see cadence of specific year guess growth for And for helpful. do the a terms just pronounced I I you of market on

Jerome Rouquet

of year-over-year vehicle right obviously prior year's We calculation. of our expect production which be being the slightly dependent on compared the that year-over-year a that or by in in So it's terms maybe comparison second of experienced should down to or do in we of what similar our performance QX. half in is on terms account the of slightly way positive higher market the the growth growth market

Emmanuel Rosner

Thank much. you so

Ryan Wentling

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

contact you have If follow-up any me directly. please Thank you. questions

Operator

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

now disconnect. You may

Visteon (VC) 27 Apr 232023 Q1 Earnings call transcript