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Visteon Transformation and Development


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Visteon presented at the 2017 China Autopart Development Summit in Shanghai November 2017.

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Visteon Transformation and Development

  1. 1. Visteon Confidential Visteon Transformation and Development November 2017 Luke Lu Managing Director Visteon China
  2. 2. 2 1 2 3 History Today Tomorrow Agenda
  3. 3. 3 1 2 3 History Today Tomorrow Agenda
  4. 4. Visteon History: 2000 - 2014 Significant Transformative Actions Completed; Focus on Growth Spun off from Ford Transferred 23 U.S. plants to Ford Implemented three-year restructuring plan Filed for Chapter 11 2000 2005 2006 2009 2010 2011 Emerged successfully Feb 2013 Dec 2013 Jan 2014 Integrated global climate business; created HVCC Nov 2013 Consolidated Yanfeng electronics operations Substantially completed sale of YFV interiors JV Announced acquisition of JCI Electronics Signed agreements to exit majority of remaining Interiors Nov 2012 Announced value- creation plan May 2014 July 2014 Completed acquisition of JCI Electronics Aug 2014 Closed acquisition of Thermal & Emissions product line of Cooper Standard Completed divestiture of majority of Interiors Nov 2014 Dec 2014 Signed agreement to sell 70% stake in HVCC for $3.6 billion
  5. 5. Visteon Transformation We have successfully addressed each component of the transformation plan  Contribute Climate business to Halla, create HVCC  Increased value of HVCC ownership  Sell Interiors business  Address Electronics’ strategy and market position  Monetize YFV, over time….and at right value  Rightsize corporate functions in response to actions above  Contributed $800 million toward share repurchases ($375 million of additional authorization remains)  Strengthen balance sheet – Pension actions – Debt refinancing 2012 Plan The New Visteon • Ranked a top-five Tier One connected car supplier by ABI research (2016) • The largest Tier One automotive supplier focused exclusively on the fast-growing cockpit electronics segment • Developing breakthrough approach to autonomous driving, applying artificial intelligence for object detection and classification  Integrate JCI Electronics  Finalize sale of majority of Interiors  Continue to diversify HVCC customer base  Continue to decentralize admin functions 2014
  6. 6. 6 1 2 3 History Today Tomorrow Agenda • Company • Technology ( Trend + Product) • Cluster+ Infotainment+ SmartCore + Autonomous Driving • Finance Performance
  7. 7. Visteon Today and Shareholder Value Creation A global leader in automotive cockpit electronics and software 7 (1) Peer group includes average returns of Autoliv, Continental, Delphi and Gentex. Manufacturing locations22 10,000 Employees 18 Countries Technical centers18 $3.1B Annual sales (Electronics) Company headquarters Van Buren Township, Michigan, United States December 2013 May 2015 July 2016 October 2017 Visteon 160% S&P 500 51% Peer Group (1) 47% Long-Term Total Shareholder Return (12/31/13 – 10/30/17)
  8. 8. New Visteon Mission and Mission 8 Today, we are focused on the new Visteon Our Mission We aim to be the foremost leader in driver information and connected infotainment solutions that enables a rich driving experience in a safe and convenient manner. We will achieve this through relentless pursuit of excellence in electronics and software technology as well as global execution. Our Vision A top-three cockpit electronics player delivering a rich, connected cockpit experience for every car from luxury to entry.
  9. 9. New Visteon Cultural Principles 9 Today, we are focused on the new Visteon
  10. 10. A broad and diversified customer base 10 Global automotive technology company with more than 25 customers worldwide
  11. 11. Industry-Leading Cockpit Electronics Product Portfolio 11 Only pure-play in automotive cockpit electronics Source: Rankings from 2016 ABI Research and IHS Markit. Instrument clusters Head-up displays Displays InfotainmentAudio ConnectivityCockpit domain controllers Visteon Market Position Top 5 Connected car Tier 1 supplier #2 Rank Instrument cluster displays #3 Rank Head-up displays #2 Rank Automotive display systems Center stack displays
  12. 12. Industry in Transformation Cockpit electronics growing faster than underlying vehicle production 12 2017 2018 2019 2020 2021 2022 Cockpit Electronics vs. Global Vehicle Production Cockpit Electronics Global Vehicle Production 9.1% CAGR 2.1% CAGR Projections based on latest IHS Markit data. ~$32B in 2017 Instrument Clusters 22% Audio and Infotainment 51% Displays 19% HUD 2% Telematics 6% 2017 Market Segmentation Connected car ADAS/AD Electrification Key Drivers Cockpit Electronics
  13. 13. Key Trends in Instrument Clusters 13 Visteon leading industry transition toward digital clusters 40% 21% 56% 66% 4% 13% 2017 2022 CAGR 20222017 27% 6% -10% Hybrid Analog All Digital 95.1M Units 105.7M Units • All-digital is fastest-growing segment of clusters • All-digital clusters expanding from luxury to mass market vehicles • Visteon awarded $2.6 billion in YTD new business wins • Improved global market share to #2 position from #3 in 2015 All-Digital Cluster Hybrid Cluster Analog Cluster
  14. 14. Key Trends in Audio/Infotainment 14 Display Audio and Embedded Infotainment offer significant growth opportunity for Visteon • Market trending toward Display Audio systems from traditional audio • Visteon’s capabilities in Display Audio strengthened by AllGo acquisition • Embedded infotainment transforming into “mobile app platform” • Visteon awarded $1.5 billion in YTD new business wins; including first Phoenix™ win Embedded Infotainment Display Audio AM/FM/BT Audio 55% 30% 15% 35% 30% 35% 20222017 5% 22% -10% 95.1M Units Display Audio Audio Embedded Infotainment 105.7M Units CAGR
  15. 15. Visteon’s Infotainment Platform for Connected Car 15 Seamless upgrade path from Display Audio to Embedded Infotainment App developer friendly Highly secure Fully upgradeable Automotive Base Components Cyber Security Web Runtime Projection Mode Common API and JavaScript Navi Engine Complete “out-of-the-box” solution to OEMs for Display Audio Extend with pre-integrated third-party software to mid/high infotainment Offers “write once, run on many” for infotainment apps First purpose-built infotainment OS and tools
  16. 16. ECU Consolidation in Automotive Electronics 16 Visteon offers industry-first cockpit domain controller; will launch AD controller Today Tomorrow Reduces cost, weight, and power consumption ECUs in car 30 - 100+ Consolidation of ECUs into domain controllers Leverages silicon and software innovations
  17. 17. Visteon’s Cockpit Domain Controller 17 Market introduction of first SmartCore™ system in early 2018 with European OEM Cluster HUD Infotainment SmartCore™ Cockpit Domain Controller *Source: Roland Berger study, July 2015. 4 SmartCore™ business wins to date $175 Expected per vehicle savings* Integration of instrument cluster, infotainment, HUD and driver monitoring First cockpit domain controller in the industry 1 awar Recognized with Innovation Award by German Center of Automotive Management
  18. 18. Key Trends in Autonomous Driving 18 PerceptionSensors ActuationPath Planning HD maps, real-time middleware for algorithms Scalable high performance compute system Vehicle Integration CNN algorithms RL algorithms Radar 24GHz to 76-81GHz 2-D to 3-D Technology Landscape Autonomous Driving Controller Processors CPU to GPU Emerging AI processors LiDAR Mechanical to solid state Higher resolution at <$250 Software Conventional to machine learning High safety relevance (ASIL) Neural network object detection Reinforcement learning Camera, Radar, LiDAR, Ultrasonic CAN, Ethernet Centralized processing of sensor data Key Requirements of Autonomous Driving Controller Scalable and CPU agnostic hardware High-performance middleware Advanced software tools for algorithm development
  19. 19. Visteon’s DriveCore™ Technology Platform 19 StudioRuntimeCompute Communication s Framework APIs Complete technology platform Middleware and tools for rapid algorithm development Faster time to market with third-party algorithms From 500 GFLOPS to 20 TFLOPS Advanced thermal management PerceptionSensors ActuationPath Planning Vehicle Integration CNN algorithms RL algorithms Autonomous Driving Controller Camera, Radar, Lidar, Ultrasonic CAN, Ethernet Runtime Compute
  20. 20. Record YTD New Business Wins and Backlog 20 Business accelerating in faster-growing product segments across all regions BacklogNew Business Wins Note: New business wins represent booked lifetime revenue. $4.6B Instrument Clusters 58% Infotainment 22% Audio 11% Displays 4% HUD 2% Telematics 1% Other 2% $4.6B Europe 20% China 27% Other Asia 22% North America 29% South America 2% Highlights Phoenix™ First win for Display Audio system in North America Backlog growing faster than cockpit electronics market 11% Y/Y growth in backlog Audio/Infotainment NBWs of $1.5B, more than 2x prior year 12% Y/Y growth in NBWs FY 2015 FY 2016 YTD 2017 $16.5B $14.9B $18.0B
  21. 21. Visteon China Domestic Sales Exceptional Performance in China Benefiting from sales and new business wins in China Industry-leading footprint to support automaker localization Visteon China Domestic New Business Wins China* Manufacturing Changchun x2, Chongquing x3, Shaoxing x2, Shanghai x2, Xuzhou Engineering Shanghai x3, Nanjing * Operations either Visteon wholly owned or through joint ventures $273 $315 $370 $420 $388 $373 $692 $704 $743 FY 2015 FY 2016 FY 2017 FCST $0.9 $1.8 $1.2 $0.2 $0.2 $0.8 $1.1 $2.0 $2.0 FY 2015 FY 2016 FY 2017 FCST 21 USD ($M) USD ($B)
  22. 22. Strong Performance in China • Visteon full-year China domestic sales expected to grow double digits • Continue to outpace industry growth in world’s largest automotive market • Winning new business with global and domestic Chinese automakers 22
  23. 23. 23 1 2 3 History Today Tomorrow Agenda
  24. 24. Visteon Future Direction Visteon Corporation proprietary – Citi 2017 Global Technology Conference24 Leader in centralized computing technology Autonomous Driving ComputerCockpit Domain Controller Sensors Sensors Sensors Cloud DriveCore™ Autonomous Driving Computer Artificial Intelligence SmartCore™ Cockpit Domain Controller Augmented Reality V2X Head-Up Displays Instrument Clusters Displays Phoenix™ Infotainment Visteon Technologies Visteon Products Computer Vision Cyber Security Driver Monitoring
  25. 25. Our Technology Roadmap Visteon Corporation proprietary – Citi 2017 Global Technology Conference25 2015 Launched domain controller for cockpit 2017 Launch next- generation infotainment 2018 Launch autonomous driving domain controller platform 2019 Launch next gen for cockpit and autonomous driving
  26. 26. Strategic Imperatives 26 Strengthen Core Business Develop Level 3/4 Autonomous Driving Platform Accelerate China Business • Deliver higher sales and improve margins to ~11.5% • Drive new business wins to achieve combined ~$12 billion target for 2017/2018 • Continued focus on operational excellence • Achieve double-digit China sales growth in 2017 • Introduce SmartCoreTM and PhoenixTM technologies in China • Leverage joint venture relationships to drive adoption of new offerings • Leverage SmartCoreTM technology platform for sensor fusion • Early engagement with selected customers • Launch technology platform at CES 2018