Visteon Announces 2023 Financial Results and 2024 Outlook

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VAN BUREN TOWNSHIP, Mich., Feb. 20, 2024 (GLOBE NEWSWIRE) — Visteon Corporation (NASDAQ:VC) today reported fourth quarter and full-year 2023 financial results. Highlights include:

$990 million net sales in Q4 and $3,954 million for the full year
Net income of $366 million including a $313 million non-cash U.S. tax benefit in Q4, and net income of $486 million for the full year
Adjusted EBITDA of $117 million in Q4 and $434 million or 11.0% of sales for the full year
Operating cash flow of $267 million and adjusted free cash flow of $150 million for the full year
Repurchased $106 million of shares in 2023
Launched 129 new products and won $7.2 billion of new business in 2023  

Fourth Quarter Financial Results

Visteon reported net sales of $990 million compared to $1,064 million in the fourth quarter of last year. The decline in net sales was primarily due to lower recoveries resulting from improved semiconductor supply in 2023. When excluding the impact of these recoveries, Visteon’s base sales grew 1% from the prior year. Base sales performance was driven by the ongoing ramp up of our recent product launches, partially offset by production disruptions at our OEM customers, including the UAW strike.

Gross margin in the fourth quarter was $130 million, and net income attributable to Visteon was $366 million, or $12.98 per diluted share. Net income included a non-cash tax benefit of $313 million related to a reduction in the valuation allowance against U.S. deferred tax assets that contributed $11.10 to diluted earnings per share. Adjusted EBITDA, a non-GAAP measure as defined below, was $117 million, an increase of $14 million compared to the prior year. The increase in adjusted EBITDA primarily reflects strong operating performance, the ongoing benefits of cost and commercial discipline, and lower net engineering cost due in part to the timing of project spending. Adjusted EBITDA margin was 11.8% of sales, an increase of 210 basis points compared to the prior year.

Full-Year Financial Results

Visteon reported record net sales of $3,954 million, representing year-over-year growth of 5%. When excluding the impact of pricing from supply chain recoveries, Visteon’s base sales grew 12% from the prior year. Base sales performance was driven by the ongoing ramp up of production of our recent product launches and higher customer vehicle production, partially offset by foreign exchange.

Gross margin was $487 million, and net income attributable to Visteon was $486 million or $17.05 per diluted share, including the non-cash tax benefit noted above. Adjusted EBITDA was a record $434 million, an increase of $86 million compared to the prior year. The increase in adjusted EBITDA primarily reflects the impact of higher sales while leveraging an efficient cost structure with modest increases in engineering and SG&A costs. Adjusted EBITDA margin was 11.0% of sales, an increase of 170 basis points compared to the prior year. 

Cash provided by operations was $267 million and capital expenditures were $125 million. Adjusted free cash flow, a non-GAAP financial measure as defined below, was $150 million, a $49 million improvement compared to the prior year. Adjusted free cash flow benefited from the strong year-over-year improvement in adjusted EBITDA and working capital, partially offset by higher capital expenditures to support our growth.

Visteon repurchased $106 million of shares during 2023 under the $300 million share repurchase authorization announced in March 2023.

New Business Wins and Product Launch Highlights
Visteon won $7.2 billion of new business in 2023, leveraging its strong, diversified product portfolio that addresses key industry trends of digitalization and electrification. Visteon won significant new business throughout the year in all core product lines including our first EV power electronics win with a European OEM luxury brand. Fourth quarter wins included an infotainment system and 10″ display for an SUV platform with a Global OEM and an infotainment system and 10″ display for multiple vehicles with an Indian OEM. Visteon also won a follow-on 12″ digital cluster and 13″ center display for an electric model on an SUV platform with a German luxury OEM.

Visteon launched 129 new products in 2023. These product launches continue to build the foundation for Visteon’s long-term market outperformance. Key fourth quarter product launches included a SmartCore™ cockpit domain controller and 12″ display for the JMC-Ford Ranger in China, a SmartCore™ cockpit domain controller and 10″ display for the Mahindra XUV, and a 12″ digital cluster for the Nissan Rogue for the North American market.

Outlook for 2024

Visteon’s full-year 2024 guidance anticipates sales in the range of $4.0 billion to $4.2 billion, adjusted EBITDA in the range of $470 million to $500 million, and adjusted free cash flow in the range of $155 million to $185 million.

“Visteon delivered another strong performance in 2023 with approximately $400 million of growth in our base sales. I am especially proud of our team’s continued focus on execution, cost control, and cash flow generation,” said President and CEO Sachin Lawande. “Our impressive $7.2 billion of new business wins and high number of new product launches in 2023 lay the foundation for continued growth in 2024 and years to come.”

About Visteon

Visteon is advancing mobility through innovative technology solutions that enable a software-defined and electric future. With next-generation digital cockpit and electrification products, Visteon leverages the strength and agility of its global network with a local footprint to deliver a cleaner, safer and more connected vehicle experience. Headquartered in Van Buren Township, Michigan, Visteon operates in 17 countries worldwide, recorded approximately $3.95 billion in annual sales and booked $7.2 billion of new business in 2023. Learn more at investors.visteon.com/.

Conference Call and Presentation
Today, Tuesday, Feb. 20, at 9 a.m. ET, Visteon will host a conference call for the investment community to discuss the quarter’s results and other related items. The conference call is available to the general public via a live audio webcast.

The dial-in numbers to participate in the call are:

U.S./Canada Participants Toll-Free Dial-In Number: 1-888-330-2508
International Participants Toll Dial-In Number: 1-240-789-2735
Conference ID: 8897485

(Dial-in approximately 10 minutes before the start of the conference.)

__
Use of Non-GAAP Financial Information

Because not all companies use identical calculations, adjusted EBITDA, adjusted net income, adjusted EPS, free cash flow and adjusted free cash flow used throughout this press release may not be comparable to other similarly titled measures of other companies.

In order to provide the forward-looking non-GAAP financial measures for full-year 2024, the Company provides reconciliations to the most directly comparable GAAP financial measures on the subsequent slides. 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 press release and the adjustments that management can reasonably predict.

Forward-looking Information

This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. The words “will,” “may,” “designed to,” “outlook,” “believes,” “should,” “anticipates,” “plans,” “expects,” “intends,” “estimates,” “forecasts” and similar expressions identify certain of these forward-looking statements. 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, but not limited to:

continued and future impacts related to the conflict between Russia and the Ukraine including supply chain disruptions, reduction in customer demand, and the imposition of sanctions on Russia;
significant or prolonged shortage of critical components from our suppliers, including but not limited to semiconductors, and particularly those who are our sole or primary sources;
failure of the Company’s joint venture partners to comply with contractual obligations or to exert undue influence in China;
conditions within the automotive industry, including (i) the automotive vehicle production volumes and schedules of our customers, (ii) the financial condition of our customers and the effects of any restructuring or reorganization plans that may be undertaken by our customers, including work stoppages at our customers, and (iii) possible disruptions in the supply of commodities to us or our customers due to financial distress, work stoppages, natural disasters or civil unrest;
our ability to avoid or continue to operate during a strike, or partial work stoppage or slow down at any of our principal customers;
our ability to satisfy future capital and liquidity requirements; including our ability to access the credit and capital markets at the times and in the amounts needed and on terms acceptable to us; our ability to comply with financial and other covenants in our credit agreements; and the continuation of acceptable supplier payment terms; our ability to access funds generated by foreign subsidiaries and joint ventures on a timely and cost-effective basis;
general economic conditions, including changes in interest rates and fuel prices; the timing and expenses related to internal restructurings, employee reductions, acquisitions or dispositions and the effect of pension and other post-employment benefit obligations;
disruptions in information technology systems including, but not limited to, system failure, cyber-attack, malicious computer software (malware including ransomware), unauthorized physical or electronic access, or other natural or man-made incidents or disasters;
increases in raw material and energy costs and our ability to offset or recover these costs; increases in our warranty, product liability and recall costs or the outcome of legal or regulatory proceedings to which we are or may become a party;
changes in laws, regulations, policies or other activities of governments, agencies and similar organizations, domestic and foreign, that may tax or otherwise increase the cost of, or otherwise affect, the manufacture, licensing, distribution, sale, ownership or use of our products or assets; and
those factors identified in our filings with the SEC (including our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, as updated by our subsequent filings with the Securities and Exchange Commission).

Caution should be taken not to place undue reliance on our forward-looking statements, which represent our view only as of the date of this release, and which we assume no obligation to update. The financial results presented herein are preliminary and unaudited; final financial results will be included in the Company’s Annual Report on Form 10-K for the fiscal quarter ended December 31, 2023. New business wins and re-wins do not represent firm orders or firm commitments from customers, but are based on various assumptions, including the timing and duration of product launches, vehicle production levels, customer price reductions and currency exchange rates.

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VISTEON CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(In millions except per share amounts)

 
 
 
 
 
 

 
(Unaudited)
 
 
 
 

 
Three Months Ended
 
Twelve Months Ended

 
December 31,
 
December 31,

 
 
2023
 
 
 
2022
 
 
 
2023
 
 
 
2022
 

 
 
 
 
 
 
 
 

Net sales
$
            990
 
 
$
         1,064
 
 
$
         3,954
 
 
$
         3,756
 

Cost of sales
 
             (860
)
 
 
             (950
)
 
 
         (3,467
)
 
 
         (3,388
)

Gross margin
 
               130
 
 
 
               114
 
 
 
               487
 
 
 
               368
 

Selling, general and administrative expenses
 
               (51
)
 
 
               (54
)
 
 
             (207
)
 
 
             (188
)

Restructuring and impairment
 
                 (3
)
 
 
                 (2
)
 
 
                 (5
)
 
 
               (14
)

Interest expense
 
                 (4
)
 
 
                 (4
)
 
 
               (17
)
 
 
               (14
)

Interest income
 
                   4
 
 
 
                   1
 
 
 
                 10
 
 
 
                   4
 

 Equity in net (loss) income of non-consolidated affiliates
 
                 (2
)
 
 
                 (4
)
 
 
               (10
)
 
 
                 (1
)

 Other income (expense), net
 
                   3
 
 
 
                   5
 
 
 
                 (1
)
 
 
                 20
 

Income (loss) before income taxes
 
                 77
 
 
 
                 56
 
 
 
               257
 
 
 
               175
 

Benefit from (provision for) income taxes
 
               296
 
 
 
               (21
)
 
 
               248
 
 
 
               (45
)

Net income (loss)
 
               373
 
 
 
                 35
 
 
 
               505
 
 
 
               130
 

Less: Net (income) loss attributable to non-controlling interests
 
                 (7
)
 
 
                 (1
)
 
 
               (19
)
 
 
                 (6
)

 Net income (loss) attributable to Visteon Corporation
$
            366
 
 
$
               34
 
 
$
            486
 
 
$
            124
 

 
 
 
 
 
 
 
 

Comprehensive income (loss)
$
            347
 
 
$
            120
 
 
$
            461
 
 
$
            141
 

Less: Comprehensive income (loss) attributable to non-controlling interests
 
                 10
 
 
 
                   5
 
 
 
                 16
 
 
 
                   1
 

Comprehensive income (loss) attributable to Visteon Corporation
 
               337
 
 
 
               115
 
 
 
               445
 
 
 
               140
 

 
 
 
 
 
 
 
 

Earnings per share data:
 
 
 
 
 
 
 

Basic earnings (loss) per share attributable to Visteon Corporation
$
         13.17
 
 
$
           1.21
 
 
$
         17.30
 
 
$
           4.41
 

 
 
 
 
 
 
 
 

Diluted earnings (loss) per share attributable to Visteon Corporation
$
         12.98
 
 
$
           1.18
 
 
$
         17.05
 
 
$
           4.35
 

 
 
 
 
 
 
 
 

Average shares outstanding (in millions)
 
 
 
 
 
 
 

Basic
 
              27.8
 
 
 
              28.2
 
 
 
              28.1
 
 
 
              28.1
 

Diluted
 
              28.2
 
 
 
              28.7
 
 
 
              28.5
 
 
 
              28.5
 

2023 includes a non-cash tax benefit of $313 million, or $11.10 per diluted share in the fourth quarter, and $10.98 per diluted share for the full year, related to a reduction in the valuation allowance against the U.S. deferred tax assets.

VISTEON CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In millions)

 
 
 
 

 
December 31,
 
December 31,

 
 
2023
 
 
 
2022
 

ASSETS
 
 
 

Cash and equivalents
$
                     515
 
 
$
                     520
 

Restricted cash
 
                            3
 
 
 
                            3
 

Accounts receivable, net
 
                        666
 
 
 


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