Q2 2024 Visteon Corp Earnings Call

Good morning. I'm Ryan Wentling, Vice President of Investor Relations and Treasurer. Welcome to our earnings call for the second quarter of 2024. Please note this call is being recorded and all lines have been placed on listen-only mode to prevent background noise.

Ryan Matthew Wentling: Treasurer, welcome to our earnings call for the second quarter of 2024. Please note this call is being recorded, and all lines have been placed on listen only mode to prevent background noise. Before we begin this morning's call, I'd like to remind you that 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 statements. Please refer to the page entitled Forward-Looking Information for additional detail. Presentation materials for today's call were posted on the Investors section of Visteon's website this morning.

Ryan Wentling: Roger, welcome to our earnings call for the second quarter of 2024. Please note this call is being recorded, and all lines have been placed on listen-only mode to prevent background noise.

Ryan Matthew Wentling: Please visit investors.visteon.com to download the materials if you have not already done so. Joining us today are Sachin Lawande, President and Chief Executive Officer, and Jerome Rouquet, Senior Vice President and Chief Financial Officer. We have scheduled the call for one hour, and we'll open the lines for your questions after Sachin and Jerome's remarks.

Ryan Matthew Wentling: Please limit your questions to one and one follow-up. Thank you for joining us. Now, I will turn the call over to Sachin.

Operator: Before we begin this morning's call, I'd like to remind you 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 in 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 statements. Please refer to the page entitled Forward-looking information for additional details.

Before we begin this morning's call, I'd like to remind you 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 statements.

Please refer to the page entitled Forward-Looking Information for additional details.

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

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

Ryan Wentling: Joining us today are Sachin Lawande, President and Chief Executive Officer, and Jerome Rouquet, Senior Vice President and Chief Financial Officer. We have scheduled the call for one hour and will open the lines for your questions after Sachin's and Jerome's remarks.

Speaker Change: Joining us today are Sachin Lawande, President and Chief Executive Officer, and Jerome Rouquet, Senior Vice President and Chief Financial Officer. We have scheduled the call for one hour, and we'll open the lines for your questions after Sachin's and Jerome's remarks.

Ryan Wentling: Please limit your questions to one question and one follow-up.

Sachin Lawande: Thank you for joining us. Now I will turn the call over to Sachin. Thank you, Ryan, and good morning, everyone. Thank you for joining us for the second quarter 2024 earnings call. I would like to start with a summary of our second quarter performance as outlined on page two. Visteon delivered another quarter of strong education with top-line growth, margin expansion, and free cash regeneration. We reported records for both quarterly base sales and suggested a bidda and delivered high-single digit growth over market. This level of growth over market is impressive considering the market headwinds this quarter.

Speaker Change: Please limit your questions to one question and one follow-up.

Speaker Change: Thank you for joining us. Now I will turn the call over to Sachin.

Sachin S. Lawande: Thank you, Ryan, and good morning, everyone. Thank you for joining us on our second quarter 2024 earnings call. I would like to start with a summary of our second quarter performance, as outlined on page 2. Visteon delivered another quarter of strong execution with top line growth, margin expansion, and free cash flow generation. We reported records for both quarterly base sales and adjusted EBITDA and delivered high single-digit growth over market. This level of growth over market is impressive considering the market headwinds this quarter.

Sachin S. Lawande: Thank you, Ryan, and good morning, everyone. Thank you for joining our second quarter 2024 earnings call. I would like to start with a summary of our second quarter performance as outlined on page 2.

Sachin S. Lawande: Sales were slightly over $1 billion, driven by strong demand for both digital cockpit and electrification products. We saw double-digit year-over-year increases for digital clusters and displays, while electrification grew due to the ramp-up of GM's EV production. Adjusted EBITDA increased to $136 million on higher volumes, strong operational execution, and focus on cost. Adjusted EBITDA margin was 13.4%, which is a 270 basis point improvement year-over-year when removing the impact of last year's recall charge. Adjusted free cash flow was $28 million in the quarter.

Sachin S. Lawande: Visteon delivered another quarter of strong execution with top line growth, margin expansion, and free cash flow generation.

Speaker Change: We reported records for both quarterly base sales and adjusted EBITDA and delivered high single-digit growth over market.

This level of growth over market is impressive considering the market headwinds this quarter.

Sachin Lawande: Sales were slightly over $1 billion, driven by strong demand for both digital cockpit and electrification products. We saw double-digit year-over-year increases for digital clusters and displays, while electrification grew due to ramp up of GM's EV production. Adjusted a bidda increased to $136 million on higher volumes, strong operational execution, and focus on cost. Adjusted a bidda margin was 13.4%, which is a 270 basis point improvement year-over-year when removing the impact of last year's recall charge. Adjusted free cash flow was $28 million in the quarter. We also strengthened our foundation for future growth. We launched 15 new products in the quarter and won $1.7 billion of new business.

Speaker Change: Sales were slightly over $1 billion, driven by strong demand for both digital cockpit and electrification products.

Speaker Change: We saw double-digit year-over-year increases for digital clusters and displays, while electrification grew due to ramp-up of GM's EV production.

Speaker Change: Adjusted EBITDA increased to $136 million on higher volumes, strong operational execution, and focus on cost.

Speaker Change: Adjusted EBITDA margin was 13.4%, which is a 270 basis point improvement year-over-year when removing the impact of last year's recall charge.

Speaker Change: Adjusted free cash flow was $28 million in the quarter.

Sachin S. Lawande: We also strengthened our foundation for future growth. We launched 15 new products in the quarter and won $1.7 billion of new business. We continue to diversify our customer base with new product launches and business wins with OEMs in Japan and India. Car makers in Japan and Korea are currently underrepresented in our current customer base, and we believe there are significant opportunities to expand our business with them. Overall, I'm pleased with the second quarter performance, which was in line with our expectations and puts us in a solid position entering the second half of the year. Turning to page three.

Speaker Change: We also strengthened our foundation for future growth. We launched 15 new products in the quarter and won $1.7 billion of new business.

Sachin Lawande: We continued to diversify our customer base with new product launches and business wins with OEMs in Japan and India. Carmakers in Japan and Korea are currently underrepresented in our current customer base, and we believe there are significant opportunities to expand our business with them.

We continue to diversify our customer base with new product launches and business wins with OEMs in Japan and India.

Speaker Change: Car makers in Japan and Korea are currently underrepresented in our current customer base and we believe there are significant opportunities to expand our business with them.

Sachin Lawande: Overall, I'm pleased with the second quarter performance, which was in line with our expectations and puts us in a solid position entering the second half of the year. Turning to page 3. Demand for our digital cockpit and electrification products was strong in the quarter. The powertrain-ignostic nature of our digital cockpit products help drive sales growth as strength and ice in hybrids helped offset slower EV growth. Dysplase were our best performing distal cocktail product, growing high teens year over year. This is a critical inflection after the declines in recent quarters due to the end of the BMW display program that we have mentioned in prior quarters.

Overall, I am pleased with our second quarter performance, which was in line with our expectations and puts us in a solid position entering the second half of the year.

Sachin S. Lawande: Demand for additional cockpit and electrification products was strong in the quarter. The powertrain agnostic nature of our digital cockpit products helped drive sales growth as strength in ICE and hybrids helped offset slower EV growth. Displays were our best performing digital cockpit product, growing in the high teens year over year. This is a critical inflection after the declines in recent quarters due to the end of the BMW display program that we have mentioned in prior quarters.

Speaker Change: Turning to page 3.

Speaker Change: Demand for our digital cockpit and electrification products was strong in the quarter. The powertrain agnostic nature of our digital cockpit products helped drive sales growth as strength in ICE and hybrids helped offset slower EV growth.

Speaker Change: Displays were our best-performing digital cockpit product, growing high teens year over year. This is a critical inflection after the declines in recent quarters due to the end of the BMW display program that we have mentioned in prior quarters.

Sachin Lawande: The growth was driven by programs with Ford, Nissan, and Stellantis, and we anticipate this growth to continue in the coming quarters as these programs ramp up and as we launch additional display products. Car makers continue to prioritize larger and more sophisticated displays in the cockpit, and Visteon is positioned very well to take advantage of this trend. These two clusters grew double digits in the quarter, benefiting from the ramp up of recently launched clusters at multiple customers, including Ford, Volkswagen, and Nissan. We remain the market leader in distal clusters and expect a long runway of growth as distal clusters extend into the mass market and value segments of the automotive market.

Sachin S. Lawande: The growth was driven by programs with Ford, Nissan, and Stellantis, and we anticipate this growth to continue in the coming quarters as these programs ramp up and as we launch additional display products. Car makers continue to prioritize larger and more sophisticated displays in the cockpit, and Visteon is positioned very well to take advantage of this trend.

Speaker Change: The growth was driven by programs with Ford, Nissan, and Stellantis, and we anticipate this growth to continue in the coming quarters as these programs ramp up and as we launch additional display products.

Speaker Change: Car makers continue to prioritize larger and more sophisticated displays in the cockpit and Visteon is positioned very well to take advantage of this trend.

Sachin S. Lawande: Digital clusters grew double digits in the quarter, benefiting from the ramp-up of recently launched clusters at multiple customers, including Ford, Volkswagen, and Nissan. We remain the market leader in digital clusters and expect a long runway of growth as digital clusters extend into the mass market and value segments of the automotive market. Smartcore sales continued to grow in the second quarter with the ramp-up of recently launched products at multiple OEMs, including Harley-Davidson, Mahindra, and Scania. The SmartCore launch with Scania is the first cockpit domain controller introduction in the commercial vehicle market.

Speaker Change: Digital clusters grew double digits in the quarter, benefiting from the ramp-up of recently launched clusters at multiple customers including Ford, Volkswagen, and Nissan.

Speaker Change: We remain the market leader in digital clusters and expect a long runway of growth as digital clusters extend into the mass market and value segments of the automotive market.

Sachin Lawande: Smartcore sales continue to grow in the second quarter with ramp up of recently launched products at multiple OEMs including Harley Davidson, Mahindra, and Scania. The Smartcore launch with Scania is the first cockpit domain controller introduction in the commercial vehicle market, and we see significant opportunity to develop further in the segment. Sales of electrification products was strong in Q2, driven by the ramp up of production of electric vehicle models by GM and the start of BMS production for our second customer. It was a significant contributor of our market art performance, coming in stronger than we originally anticipated in the first half of the year.

Speaker Change: Smartcore sales continued to grow in the second quarter with ramp-up of recently launched products at multiple OEMs including Harley-Davidson, Mahindra, and Scania.

Speaker Change: The SmartCore launch with Scania is the first cockpit domain controller introduction in the commercial vehicle market and we see significant opportunity to develop further in this segment.

Sachin S. Lawande: And we see significant opportunity to develop further in this segment. Sales of electrification products were strong in Q2, driven by the ramp-up of production of electric vehicle models by GM and the start of BMS production for our second customer. It was a significant contributor to our market art performance, coming in stronger than we originally anticipated in the first half of the year. Even with lower market expectations for the growth of electric vehicles. Sales of our electrification products are delivering incremental sales growth for Visteon on a year-over-year basis. From a regional perspective, our market art performance was driven by strength in Americas, Europe, and Asia, excluding China.

Speaker Change: Sales of electrification products was strong in Q2, driven by the ramp-up of production of electric vehicle models by GM and the start of BMS production for our second customer.

Speaker Change: It was a significant contributor of our market art performance, coming in stronger than we originally anticipated in the first half of the year.

Sachin Lawande: Even with the lower market expectations for the growth of electric vehicles, sales of our electrification products are delivering incremental sales growth for this Dion on a year-over-year basis. From a regional perspective, our market art performance was driven by strength in America's, Europe, and Asia excluding China. Our sales in China were weaker than expected due to the ongoing market dynamics in that region, which muted our overall market art performance in the quarter. Our sales in America benefited from the significant growth of electrification sales that I just mentioned. We also saw double-digit growth in digital clusters driven by ongoing ramp-up of programs with Ford, which were partially offset by lower than anticipated sales of cockpit products on electric vehicles.

Speaker Change: Even with the lower market expectations for the growth of electric vehicles, sales of our electrification products are delivering incremental sales growth for Visteon on a year-over-year basis.

Speaker Change: From a regional perspective, our market art performance was driven by strength in Americas, Europe , and Asia, excluding China.

Sachin S. Lawande: Our sales in China were weaker than expected due to the ongoing market dynamics in that region, which muted our overall market performance in the quarter. However, our sales in Americas benefited from the significant growth of electrification sales that I just mentioned. We also saw double-digit growth in digital clusters driven by ongoing programs with Ford, which were partially offset by lower-than-anticipated sales of cockpit products on electric vehicles. In Europe, market outgrowth was driven by digital cluster and display programs with Volkswagen, JLR, and Mercedes.

Speaker Change: Our sales in China were weaker than expected due to the ongoing market dynamics in that region, which muted our overall market-hour performance in the quarter.

Speaker Change: Our sales in Americas benefited from the significant growth of electrification sales that I just mentioned.

Sachin Lawande: In Europe, market outgrowth was driven by digital cluster and display programs with Volkswagen, JLR, and Mercedes. This was primarily due to the ongoing ramp up of new product launches, which more than offset the lower than anticipated sales of products on electric vehicles. As we may recall, Ford delayed several launches in the first quarter to improve launch quality controls. The vehicles have subsequently been launched and were not a headwind to our second quarter results. Our sales in Asia outside of China are performed the market due to the roll-on of smart core programs with Mahindra and ramp up of digital cluster programs with Hyundai and Royal Enfield.

Sachin S. Lawande: This was primarily due to the ongoing ramp-up of new product launches, which more than offset the lower than anticipated sales of products on electric vehicles. As you may recall, Ford delayed several launches in the first quarter to improve launch quality controls.

Speaker Change: As you may recall, Ford delayed several launches in the first quarter to improve launch quality controls. The vehicles have subsequently been launched and were not a headwind to our second quarter results.

Sachin S. Lawande: The vehicles have subsequently been launched and were not a headwind to our second quarter results. Our sales in Asia, outside of China, outperformed the market due to the roll-on of smart core programs with Mahindra and ramp-up of digital cluster programs with Hyundai and Royal Enfield. This region provides significant potential for both passenger vehicles and two-wheelers, providing further customer and end-market diversification. China was a weak spot for us on account of the ongoing decline in market share for global OEMs and the unfavorable vehicle mix with our largest domestic customer, Geely, where we have most of our business on premium, high-value brands but are not doing as well in the market as we had expected. Our sales in China declined compared to the prior year and reduced our overall growth over the market by about three percentage points.

Sachin Lawande: This region provides significant potential for both passenger vehicles and two wheelers, providing further customer and end-market diversification. Chayna was a weak spot for us on account of the ongoing decline of market share for global OEMs and the unfavorable vehicle mix with our largest domestic customer, GLE, where we have most of our business on premium high-value brands that are not doing as well in the market as we expected. Our sales in China declined compared to prior year and reduced our overall growth over market by about 3 percentage points.

Speaker Change: This region provides significant potential for both passenger vehicles and two-wheelers, providing further customer and end-market diversification.

Speaker Change: Our sales in China declined compared to prior year and reduced our overall growth of the market by about 3 percentage points.

Sachin Lawande: Overall, we delivered solid top-line growth and high single-digit growth over market performance in the second quarter, overcoming market headwinds from China and lower EV sales. This performance demonstrates the resiliency of our product portfolio and the benefits of our diversification across customers, geographies, and power trains, as well as our expansion into the two-wheeler and commercial vehicle markets.

Sachin S. Lawande: Overall, we delivered solid top-line growth and high single-digit growth over market performance in the second quarter, overcoming market headwinds from China and lower EV sales. This performance demonstrates the resiliency of our product portfolio and the benefits of our diversification across customers, geographies, and powertrains, as well as our expansion into the two-wheeler and commercial vehicle markets. Turning to page 4.

Speaker Change: This performance demonstrates the resiliency of our product portfolio and the benefits of our diversification across customers, geographies, and powertrains, as well as our expansion into the two-wheeler and commercial vehicle markets.

Sachin Lawande: Turning to page four, our strong award momentum continued in the second quarter with $1.7 billion of new business wins, bringing the first half total to $3.1 billion. We are targeting over $6 billion in new business wins for the third consecutive year, and we are on track to achieve that target based on our first half performance. In the first half, we benefited from the focus we have placed in recent years on diversifying our customer base. Two-thirds of our first half-new business wins were for customers outside our current top 10. In Asia, excluding China, where we have been particularly focused on expanding our presence, we had $1.8 billion of wins with Japanese and Indian OEMs. We believe that there is a significant runway ahead of us to expand our business with these customers and other OEMs based in this region.

Sachin S. Lawande: Our strong award momentum continued in the second quarter with $1.7 billion of new business wins, bringing the first half total to $3.1 billion. We are targeting over $6 billion in new business wins for the third consecutive year, and we are on track to achieve that target based on our first-half performance. In the first half, we benefited from the focus we have placed in recent years on diversifying our customer base. Two-thirds of our first-half new business wins were for customers outside our current top ten.

Speaker Change: Turning to page 4.

Speaker Change: Our strong award momentum continued in the second quarter with $1.7 billion of new business wins, bringing the first half total to $3.1 billion.

Speaker Change: We are targeting over $6 billion in new business wins for the third consecutive year, and we are on track to achieve that target based on our first-half performance.

Speaker Change: In the first half, we benefited from the focus we have placed in recent years on diversifying our customer base.

Speaker Change: Two-thirds of our first-half new business wins were for customers outside our current Top 10.

Sachin S. Lawande: In Asia, excluding China, where we have been particularly focused on expanding our presence, we had $1.8 billion in wins with Japanese and Indian OEMs. We believe there is a significant runway ahead of us to expand our business with these customers and other OEMs based in this region. Several years ago, we began to invest in our design and manufacturing capabilities to capitalize on the growing trend of large, sophisticated displays for automotive cockpits.

Speaker Change: In Asia, excluding China, where we have been particularly focused on expanding our presence, we had 1.8 billion dollars of wins with Japanese and Indian OEMs.

Speaker Change: We believe there is a significant runway ahead of us to expand our business with these customers and other OEMs based in this region.

Sachin Lawande: Displaced represented our largest source of awards in the first half, accounting for just over 50% of our wins. Several years ago, we began to invest in our design and manufacturing capabilities to capitalize on the growing trend of large, sophisticated displays for automotive cockpits. This included higher levels of vertical integration and a regionalized approach to production to help meet customer supply chain sustainability priorities. These investments are now paying off as we ramp up production of current programs and also gain significant traction on new business awards. Looking forward, we expect to invest in further vertical integration in this place; it can help to expand our leadership position in this key product line.

Speaker Change: Displays represented our largest source of awards in the first half, accounting for just over 50% of our wins.

Speaker Change: Several years ago, we began to invest in our design and manufacturing capabilities to capitalize on the growing trend of large, sophisticated displays for automotive cockpits.

Sachin S. Lawande: This included higher levels of vertical integration and a regionalized approach to production to help meet customer supply chain sustainability priorities. Furthermore, these growing product lines are benefiting from the ongoing digitalization trend in the cockpit. On the right side of the page, we highlight a few key wins in the second quarter. The first win is for a large curved OLED display with a Japanese OEM, representing another significant win with this recently added customer. Turning to page 5.

Speaker Change: This included higher levels of vertical integration and a regionalized approach to production to help meet customer supply chain sustainability priorities.

Speaker Change: These investments are now paying off as we ramp up production of current programs and also gain significant traction on new business awards.

Speaker Change: Looking forward, we expect to invest in further vertical integration in displays that can help to expand our leadership position in this key product line.

Sachin Lawande: Our new business wins were also well diversified across our other digital cockpit products, with significant smart core infotainment and digital cluster awards. These growing product lines are benefiting from the ongoing digitalization trend in the cockpit. On the right side of the page, we highlight a few key wins in the second quarter. The first win is for a large curved OLED display with a Japanese OEM representing another significant win with this recently added customer. This display will be offered on the luxury vehicles with initial launch on a new electric vehicle model, with potential for additional launches on other platforms and power trains.

Speaker Change: Our new business wins were also well diversified across our other digital cockpit products with significant smart core infotainment and digital cluster awards.

Speaker Change: These growing product lines are benefiting from the ongoing digitalization trend in the cockpit.

Speaker Change: On the right side of the page, we highlight a few key wins in the second quarter.

Speaker Change: The first win is for a large curved OLED display with a Japanese OEM, representing another significant win with this recently added customer.

Speaker Change: This display will be offered on the luxury vehicles with initial launch on a new electric vehicle model with potential for additional launches on other platforms and powertrains.

Sachin Lawande: The second win is for a dual display product that will be featured on an SUV with ice and hybrid power trains with a different Japanese OEM. I'm really pleased to see the extension into displays with Japanese OEMs following on the recent wins for digital clusters. Lastly, we would like to highlight a win for an infotainment system and multi-display module for an Indian OEM. These products will be utilized on the OEM's next-generation platform and includes a 25-inch multi-display module along with the underlying infotainment system.

Speaker Change: The second win is for a dual display product that will be featured on an SUV with ICE and hybrid powertrains with a different Japanese OEM.

Speaker Change: I'm really pleased to see the extension into displays with Japanese OEMs, following on the recent wins for digital clusters.

Speaker Change: Lastly, we would like to highlight a VIN for an infotainment system and multi-display module for an Indian OEM.

Speaker Change: These products will be utilized on the OEM's next generation platform and includes a 25-inch multi-display module along with the underlying infotainment system.

Sachin Lawande: Turning to page 5. Launches of new products are the primary driver of our sales growth. We had a strong first half with 41 new product launches on vehicles from 17 different OEMs worldwide. Digital cluster and smart core launches represented roughly half of our launches and mostly with OEMs in Asia, supporting our goal of growing our business with this currently underrepresented car makers in our portfolio. Now, I would like to highlight some of our key launches during the quarter. We launched a digital cluster on the Toyota Canary, our first on that vehicle and our second major launch with Toyota after the launch of the digital cluster on the Corolla in China.

Speaker Change: Turning to page 5.

Speaker Change: Launches of new products are the primary driver of our sales growth. We had a strong first half with 41 new product launches on vehicles from 17 different OEMs worldwide.

Speaker Change: Digital Cluster and Smart Core launches represented roughly half of our launches and mostly with OEMs in Asia, supporting our goal of growing our business with this currently underrepresented car makers in our portfolio.

Sachin S. Lawande: Now I would like to highlight some of our key launches during the quarter. The McCann is a high volume module for Porsche, and this cluster will also be launched on some other models with that OEM. I am very pleased with the momentum we are building in Asia and particularly outside China, which is demonstrated by the fact that 60% of our first half launches were in this region. Many Asian OEMs outside of China have historically not been a meaningful part of our customer base, for example, Toyota, Honda, Hyundai, and Suzuki. These OEMs, however, produce a large number of vehicles annually and represent a significant opportunity for Visteon. Turning to page 6.

Speaker Change: Now I would like to highlight some of our key launches during the quarter.

Speaker Change: We launched a digital cluster on the Toyota Camry, our first on that vehicle and our second major launch with Toyota after the launch of the digital cluster on the Corolla in China.

Sachin Lawande: This cluster will be offered on the Canary for all regions globally and on both ice and hybrid power trains. This is our first global launch with Toyota, and I'm pleased that this is also one of the best-selling vehicles in the world. We also launched a high-resolution 10-inch center information display on the Mazda MX-30. This vehicle is a compact SUV and comes with both hybrid and electric power trains, highlighting the power train diagnostic nature of additional cockpit products. The third launch I would like to highlight is the launch of a 12-inch digital cluster with a curved display with Porsche on the electric Macan.

Speaker Change: This cluster will be offered on the CAMRI for all regions globally and on both ICE and hybrid powertrains.

Speaker Change: This is our first global launch with Toyota and I'm pleased that this is also one of the best selling vehicles in the world.

Speaker Change: We also launched a high-resolution 10-inch center information display on the Mazda MX-30.

Speaker Change: This vehicle is a compact SUV and comes with both hybrid and electric powertrains, highlighting the powertrain agnostic nature of our digital cockpit products.

Speaker Change: The third launch I would like to highlight is the launch of 12-inch digital cluster with a curved display with Porsche on the electric Macan.

Sachin Lawande: The McCann is a high-quality module for Porsche, and this cluster will also launch on some other models with that OEM. I'm very pleased with our momentum we are building in Asia and particularly outside China, which is demonstrated by the fact that 60% of our first half launches were in this region. Many Asian OEMs or side of China have historically not been a meaningful part of our customer base; for example, Toyota, Honda, Hyundai, and Suzuki. These OEMs, however, produce a large number of vehicles annually and represent a significant opportunity for the first half of the year.

Speaker Change: The McCann is a high-volume module for Porsche and this cluster will also launch on some other models with that OEM.

Speaker Change: I am very pleased with our momentum we are building in Asia and particularly outside China, which is demonstrated by the fact that 60% of our first half launches were in this region.

Speaker Change: Many Asian OEMs outside of China have historically not been a meaningful part of our customer base, for example Toyota, Honda, Hyundai, and Suzuki.

Speaker Change: These OEMs, however, produce a large number of vehicles annually and represent a significant opportunity for Visteon.

Sachin Lawande: I would now like to share our updated views on the market and Vision sales for the full year. While our first half performance was in line with our expectations, we are seeing some market headwinds in the second half of the year impacting our top-line performance compared to the assumptions within our initial 2024 guidance. First, a customer vehicle production based on S&P Global Foldcast is lower than the January forecast used in our initial guidance. Customer production is now expected to decline by 3% as compared to the original expectation of a 1% decline. While we did see lower customer vehicle production year over year in the first half, the more significant declines are in the second half.

Speaker Change: Turning to page 6.

Speaker Change: I would now like to share our updated views on the market and Visteon sales for the full year.

Sachin S. Lawande: While our first-half performance was in line with our expectations, we are seeing some marked headwinds in the second half of the year impacting our top-line performance compared to the assumptions within our initial 2024 guidance. For example, customer production is now expected to decline by 3% as compared to the original expectation of a 1% decline. Furthermore, new sales incentives that were discussed during Q1 have not boosted demand.

Speaker Change: While our first half performance was in line with our expectations, we are seeing some marked headwinds in the second half of the year impacting our top-line performance compared to the assumptions within our initial 2024 guidance.

Speaker Change: First, a customer vehicle production based on S&P Global Forecasts is lower than the January forecast used in our initial guidance.

Speaker Change: Customer production is now expected to decline by 3% as compared to the original expectation of a 1% decline.

Speaker Change: While we did see lower customer vehicle production year-over-year in the first half, the most significant declines are in the second half.

Sachin Lawande: Second, we expect ourselves in China to be weaker than our original forecasts. The hyper competitive market dynamics and the ongoing price war is driving rapid changes to the automotive market in China. We are seeing unfavorable mix with Geely, our largest domestic customer in China, as they prioritize lower content vehicles in response to the market dynamics. Market share of our global customers in China is also continuing to decline versus domestic OEMs. New sales incentives that were discussed during Q1 have not boosted demand. We are now expecting our second half revenue in China to be roughly flat with the first half, despite higher vehicle production in the second half.

Speaker Change: Second, we expect our sales in China to be weaker than our original forecasts.

Speaker Change: The hyper-competitive market dynamics and the ongoing price war is driving rapid changes to the automotive market in China.

Speaker Change: We are seeing unfavorable mix with Geely, our largest domestic customer in China, as they prioritize lower-content vehicles in response to the market dynamics.

Speaker Change: Market share of our global customers in China is also continuing to decline versus domestic OEMs.

Speaker Change: New sales incentives that were discussed during Q1 have not boosted demand.

Speaker Change: We are now expecting our second half revenue in China to be roughly flat with the first half, despite higher vehicle production in the second half.

Sachin Lawande: Outside of China, there are a couple of factors that are negatively impacting our market or performance. First, we are expecting some mixed impact from lower sales of key electric vehicle models where we have higher than average digital cockpit content. Second, the announced delays in the introduction of some model refreshes at our largest customer fold is delaying the contribution from new product launches at this customer. On a positive note, we expect the ongoing ramp-up of recently launched digital cockpit and electrification products to drive continued market outperformance, continuing the trend from the first half. Demand for digital cockpit products across power trains remains strong, and we expect continued growth in digital clusters and displays.

Speaker Change: Outside of China, there are a couple of factors that are negatively impacting our market outperformance. First, we are expecting some mixed impact from lower sales of key electric vehicle models where we have higher than average digital cockpit content.

Sachin S. Lawande: First, we are expecting some mixed impact from lower sales of key electric vehicle models where we have higher than average digital cockpit content. Second, the announced delays in the introduction of some model refreshes at our largest customer, Ford, are delaying the contribution from new product launches at this customer. Electrification sales should continue to grow year over year as our customers build the pipeline for vehicle launches through the rest of the year. Considering the environment, this is a strong performance. Turning to page 7.

Speaker Change: Second, the announced delays in the introduction of some model refreshes at our largest customer, Ford, is delaying the contribution from new product launches at this customer.

Speaker Change: On a positive note, we expect the ongoing ramp-up of recently-launched digital cockpit and electrification products to drive continued market outperformance, continuing the trend from the first half.

Speaker Change: Demand for digital cockpit products across powertrains remains strong and we expect continued growth in digital clusters and displays.

Sachin Lawande: Electrification sales should continue to grow year over year as our customers build the pipeline for vehicle launches through the rest of the year. Putting all these factors together, we forecast continued market outperformance in the second half, leading to growth over market of approximately 7% for the full year.

Speaker Change: Electrification sales should continue to grow year over year as our customers build the pipeline for vehicle launches through the rest of the year.

Speaker Change: Putting all these factors together, we forecast continued market outperformance in the second half leading to growth of a market of approximately 7% for the full year.

Sachin Lawande: Considering the environment, this is a strong performance.

Sachin Lawande: Turning to page 7. In summary, the company performed very well in the first half of 2024. Our technology portfolio is aligned with key industry trends, including digitalization, connected car, and electrification—mega trends that will drive future growth for years to come. We delivered growth over market of roughly 6% in the first half, with further growth over market expected in the second half. The team continued to execute on our commercial and operational plans, which resulted in a strong adjusted EBITDA margin of 12.2%. We continue to build our foundation for the future by launching 41 new products and winning 3.1 billion dollars in new business.

Speaker Change: Considering the environment, this is a strong performance.

Speaker Change: Turning to page 7.

Speaker Change: In summary, the company performed very well in the first half of 2024.

Sachin S. Lawande: Our technology portfolio is aligned with key industry trends, including digitalization, connected car, and electrification, mega trends that will drive future growth for years to come. We delivered growth over market of roughly 6% in the first half, with further growth over market expected in the second half. The team continued to execute on our commercial and operational plans, which resulted in a strong adjusted EBITDA margin of 12.2%. Now, I will turn the presentation over to Jerome.

Speaker Change: Our technology portfolio is aligned with key industry trends, including digitalization, connected car and electrification, mega-trends that will drive future growth for years to come.

Speaker Change: We delivered growth over market of roughly 6% in the first half, with further growth over market expected in the second half.

Speaker Change: The team continued to execute on our commercial and operational plans, which resulted in a strong adjusted EBITDA margin of 12.2%.

Speaker Change: We continue to build our foundation for the future by launching 41 new products and winning $3.1 billion in new business.

Jerome Rouquet: Now I will turn the presentation over to Jerome. Thank you, Sachin, and good morning, everyone. Vision delivered solid results in the second quarter. We continue to execute well with 15 successful product launches, including on the Toyota Camry, our first global program launch with Toyota. We won 3.1 billion of new business wins in the first half. These wins further diversify our customer base, especially in Rest of Asia, with 1.8 billion of wins with Japanese and Indian OEA. Williams. We also delivered another quarter of excellent operational execution and commercial discipline. We slid to record at just CDB DA and the margin in excess of 13% for the quarter.

Speaker Change: Now I will turn the presentation over to Jerome.

Jerome Rouquet: Thank you Sachin and good morning everyone. Visteon delivered solid results in the second quarter. We continued to execute well with 15 successful product launches, including on the Toyota Camry, our first global program launch with Toyota.

Jerome Rouquet: We won 3.1 billion in new business wins in the first half. We slid to record adjusted EBITDA and a margin in excess of 13% for the quarter. I am very proud of our track record of consistently expanding our margin. Lastly, we continue to focus on cash flow generation and delivering on our capital allocation priorities. Our strong balance sheet with a net cash position will allow us to balance organic investments, selective M&A, and capital returns to shareholders. Turning now to the second quarter's financial results in more detail. Q2 sales were slightly over $1 billion, in line with our expectations, as communicated last quarter.

Jerome Rouquet: We won 3.1 billion of new business wins in the first half. These wins further diversify our customer base, especially in the rest of Asia, with 1.8 billion of wins with Japanese and Indian OEMs.

Jerome Rouquet: We also delivered another quarter of excellent operational execution and commercial discipline. This led to record adjusted EBITDA and a margin in excess of 13% for the quarter. I am very proud of our track record of consistently expanding our margins.

Jerome Rouquet: I am very proud of our track record of consistently expanding our margins. Lastly, we continue to focus on cashflow generation and delivering on our capital allocation priorities. Our strong balance sheet with a net cash position will allow us to balance organic investments, selective M&A, and capital returns to shareholders.

Jerome Rouquet: Lastly, we continue to focus on cash flow generation and delivering on our capital allocation priorities.

Jerome Rouquet: Our strong balance sheet, with a net cash position, will allow us to balance organic investments, selective M&A, and capital returns to shareholders.

Jerome Rouquet: Turning now to the second quarter's financial results in more detail, Q2 sales were slightly over 1 billion, in line with our expectations as communicated last quarter. Sales benefit is from our market outperformance generated from new product launches, partially offset by lower customer volumes and lower recoveries. Our market outperformance was the strongest in the Americas, with growth of a market in excess of 20%, solid outperformance in Europe and the rest of Asia, excluding China, while China significantly underperformed the market. We saw your value of growth in sales across digital clusters, smart core, displays, and electrification products.

Jerome Rouquet: Turning now to the second quarter's financial results in more detail.

Jerome Rouquet: Q2 sales were slightly over $1 billion, in line with our expectations, as communicated last quarter. Sales benefited from our market outperformance, generated from new product launches, partially offset by lower customer volumes and lower recoveries.

Jerome Rouquet: Sales benefit from our market outperformance, generated from new product launches, partially offset by lower customer volumes and lower recovery. Our market outperformance was the strongest in the Americas, with growth of the market in excess of 20%. Solid art performance in Europe and rest of Asia, excluding China, while China significantly underperformed the market.

Jerome Rouquet: Our market outperformance was the strongest in the Americas, with growth of the market in excess of 20%, solid outperformance in Europe and rest of Asia excluding China, while China significantly underperformed the market.

Jerome Rouquet: We saw year-over-year growth in sales across digital clusters, smart core, displays, and electrification. It is worth noting that after several quarters of declining display sales as a result of the BMW display roll-off, our displays business delivered 17% growth year-over-year in the second quarter. We expect the Displays product line to continue to deliver growth in the coming quarter. However, customer recoveries declined year over year as a result of the improved semiconductor supply but were stable sequentially as we're still recovering elevated supply. But Justin Bieber made a record $136 million for the quarter, or $13.4 billion.

Jerome Rouquet: We saw year-over-year growth in sales across digital clusters, smart core, displays, and electrification products.

Jerome Rouquet: It is worth noting that after several quarters of declining display sales as a result of the BMW display roll-off, our displays business delivered 17% growth year over year in the second quarter. We expect the display's product line to continue to deliver growth in the coming quarters. Customer recoveries declined year over year as a result of the improved semiconductor supply but were stable sequentially as we are still recovering elevated supply costs. The adjusted EBDA was a record 136 million for the quarter, or 13.4%. Our strong EBDA performance vis-quarter is the result of sales exceeding 1 billion, strong operational performance, as well as combined net engineering and adjusted SDNAC costs of 9.1% of sales, down approximately 100 basis points from the level we are guiding for the full year.

Jerome Rouquet: It is worth noting that after several quarters of declining display sales as a result of the BMW display roll-off, our displays business delivered 17% growth year-over-year in the second quarter.

Jerome Rouquet: We expect the displaced product line to continue to deliver growth in the coming quarters.

Jerome Rouquet: Customer recoveries declined year over year as a result of the improved semiconductor supply, but were stable sequentially as we're still recovering elevated supply costs.

Jerome Rouquet: But Jussie Libida was a record 136 million for the quarter, or 13.4%.

Jerome Rouquet: Our strong EBITDA performance this quarter is the result of sales exceeding $1 billion, strong operational performance, as well as combined net engineering and adjusted SG&A costs of 9.1% of sales, down approximately 100 basis points from the level we are guiding for the full year. We also benefited from several million of one-time commercial items in the second quarter of each year. Adjusting for a more normalized level of engineering and SG&S spend, reflecting our full year run rate guide, and removing the Q2 2024 commercial one-timers, we estimate our EBITDA run rate to be closer to 12,000.

Jerome Rouquet: Our strong EBITDA performance this quarter is the result of sales exceeding $1 billion

Jerome Rouquet: strong operational performance, as well as combined net engineering and adjusted SG&A costs of 9.1% of sales, down approximately 100 basis points from the level we are guiding for the full year.

Jerome Rouquet: We also benefited from several million of one-time commercial items in the second quarter of each year. Adjusting for a more normalized level of engineering and SDNAC spend, reflecting our full year run rate guide and removing the Q2 2024 commercial one-timers, we estimate our EBDA run rate to be closer to 12%. Adjusted for cash flow was 28 million in the quarter as a result of our focus on cash and our stronger just CDBDA performance. Overall, our second quarter was another step in the right direction with continued revenue growth, margin expansion, and cash flow generation.

Jerome Rouquet: We also benefited from several million of one-time commercial items in the second quarter of this year.

Jerome Rouquet: Adjusting for a more normalized level of engineering and SG&S spend, reflecting our full year run rate guide, and removing the Q2 2024 commercial one-timers, we estimate our EBITDA run rate to be closer to 12%.

Jerome Rouquet: Adjusted free cash flow was $28 million in the quarter as a result of our focus on cash and our strong Adjusted EBITDA performance.

Jerome Rouquet: Overall, our second quarter was another step in the right direction, with continued revenue growth, margin expansion, and cash flow generation. We are successfully navigating a changing environment as a result of our strong focus on operational performance, commercial excellence, and cost efficiency.

Jerome Rouquet: Overall, our second quarter was another step in the right direction, with continued revenue growth, margin expansion, and cash flow generation. We are successfully navigating a changing environment as a result of our strong focus on operational performance, commercial excellence, and cost discipline.

Jerome Rouquet: We are successfully navigating a changing environment as a result of our strong focus on operational performance, commercial excellence, and cost turning to page 10. Sales were 1 billion and 14 million in the quarter that increase of 31 million compared to the prior year. This increasing sales was primarily driven by our market outperformance generated by recent product launch. Changes, partially offset by lower customer production and reduced customer recoveries related to semiconductor costs. Our growth of a market was 9% in line with our expectation of high single digits. Ajustity BDA was 136 million in a second quarter.

Jerome Rouquet: Sales were $1,014,000,000.25, an increase of $31,000,000 compared to the price. This increase in sales was primarily driven by our market outperformance generated by recent product launches. Partially offset by lower customer production and reduced customer recoveries related to semiconductors. Our growth in the market was 9% in line with our expectations of high single-digit growth. Adjusted EBITDA was $136 million in the second quarter. This was a $46 million increase from the price. Excluding the $15 million recall charge shown in the dotted box that we incurred last year, the Euroville Euribida improvement was primarily driven by three factors, volume, strong operational performance, and lower cost for net engineering and This exchange negatively impacted EuroVera EBITDA by approximately 4 million while the favorable commercial items that we benefited from in Q2 2024 were neutral on EuroVera E Our net engineering cost as a percentage of revenue was $4.9 billion. Below is the expected full-year average of mid-5.

Speaker Change: Turing to page 10.

Jerome Rouquet: Sales were $1,014,000,000 in the quarter, an increase of $31,000,000 compared to the prior year.

Jerome Rouquet: This increase in sales was primarily driven by our market outperformance generated by recent product launches, partially offset by lower customer production, and reduced customer recoveries related to semiconductor costs.

Jerome Rouquet: Our growth over market was 9%, in line with our expectations of high single digits.

Jerome Rouquet: This was a 46 million increase from the prior. Excluding the 15 million recall charge shown in the dotted box that we incurred last year, the Euroveyor BDA improvement was primarily driven by three factors: volume, strong operational performance, and lower cost for net engineering and SDNA. Exchange negatively impacted Euroveyor BDA by approximately 4 million, while the favorable commercial items that we benefited from in Q22024 were neutral on a Euroveyor basis. Net engineering was 12 million lower than the prior due to the timing of project expand. Our net engineering cost as a percentage of revenue was 4.9% below our expected full-year average of mid-five percent.

Jerome Rouquet: Adjusted EBITDA was $136 million in the second quarter. This was a $46 million increase from the prior year.

Jerome Rouquet: Excluding the 15 million recall charge shown in the dotted box that we incurred last year, the Eurovilleur EBITDA improvement was primarily driven by three factors, volume, strong operational performance, and lower cost for net engineering and SG&A.

Jerome Rouquet: Exchange negatively impacted EYB by approximately 4 million, while the favorable commercial items that we benefited from in Q2 2024 were neutral on a year-over-year basis.

Jerome Rouquet: Net engineering was $12 million lower than the prior year due to the timing of project spans.

Jerome Rouquet: Our net engineering cost as a percentage of revenue was 4.9%, below our expected full year average of mid 5%.

Jerome Rouquet: As GNA was 2 million lower than the prior, as we maintain a strict cost focus while continuing to invest in specific areas to support our growth. Ajustity as GNA was 4.1% of revenue, which is slightly below our full-year expectation of mid-four percent. Our continued success on delivering growth while managing our fixed cost base will continue to provide significant leverage as we scale up. Overall, we delivered solid financial results in a second quarter in line with our expectations.

Jerome Rouquet: SG&A was $2 million lower than the prior year as we maintain a strict cost focus while continuing to invest in specific areas to support our Adjacidas' GNA was 4.1% of revenue, which is slightly below our food-year expectation of mid-2020. Overall, we delivered solid financial results in the second quarter, in line with our expectations. We continue to demonstrate our ability to overcome challenges while preparing for future growth by delivering on a high number of program launches and substantial new business. We generated $28 million of adjusted free cash flow in the second quarter, bringing our first half total to $62 million.

Jerome Rouquet: SG&A was $2 million lower than the prior year as we maintained a strict cost focus while continuing to invest in specific areas to support our growth.

Jerome Rouquet: Adjacidas' GNA was 4.1% of revenue, which is slightly below our food-year expectation of mid-4%.

Jerome Rouquet: Our continued success on delivering growth while managing our fixed cost base will continue to provide significant leverage as we scale up.

Jerome Rouquet: Overall, we delivered solid financial results in the second quarter, in line with our expectations.

Jerome Rouquet: We continue to demonstrate our ability to overcome challenges while preparing for future growth by delivering on a high number of program launches and substantial new business wins, turning to page 11. We generated 28 million of adjusted free cash flow in the second quarter, bringing our first half total to 62 million. This is a 67 million improvement, compared to the first half of last year, primarily due to the higher adjusted EBITDA. Trade working capital was an outflow for the first half as we built additional working capital to support our growth. Cash taxes were modestly lower than prior due to the timing of tax payments in the first quarter of last year.

Jerome Rouquet: We continue to demonstrate our ability to overcome challenges while preparing for future growth by delivering on a high number of program launches and substantial new business wins.

Jerome Rouquet: Turning to page 11.

Jerome Rouquet: We generated $28 million of adjusted free cash flow in the second quarter, bringing our first half total to $62 million.

Jerome Rouquet: This is a $67 million improvement compared to the first half of last year, primarily due to the higher adjusted. Trade working capital was an outflow for the first half as we built additional working capital to support our growth, but this was more than offset by interest income on our investment. CAPEX was $68 million in the first half and remains on track for $145 million for the year. We're investing in projects that are critical to deliver on our future growth and profitability. We ended the quarter with a total cash of $508 million and a net cash position of $181 million.

Jerome Rouquet: This is a 67 million improvement compared to the first half of last year, primarily due to the higher adjusted EBITDA.

Jerome Rouquet: Trade working capital was an outflow for the first half as we built additional working capital to support our growth.

Jerome Rouquet: Cash taxes were modestly lower than prior year due to the timing of tax payments in the first quarter of last year.

Jerome Rouquet: Interest payments remained low and primarily relayed to our term loan. These were more than offset by interest income on our invested cash. CapEx was 68 million in the first half and remains on track for 145 million for the fourth year. We are investing in projects that are critical to deliver on our future growth and margin expansion. We ended the quarter with a total cash of 5.08 million and a net cash position of 181 million. Our balance sheet provides the flexibility to pursue our balance capital allocation framework. We are highlighting on the right hand side of the slide the amount of adjusted free cash flow before CapEx that we have generated over the last 12 months: 359 million and how it was allocated.

Jerome Rouquet: Interest payments remained low and primarily relayed to our term loan, which were more than offset by interest income on our invested cash.

Jerome Rouquet: CAPEX was $68 million in the first half and remains on track for $145 million for the full year. We are investing in projects that are critical to deliver on our future growth and margin expansion.

Jerome Rouquet: Our balance sheet provides the flexibility to pursue our balanced capital allocation framework.

Jerome Rouquet: We're highlighting on the right-hand side of the slide the amount of adjusted free cash flow before CapEx that we have generated over the last 12 months. Our largest expenditure has been CapEx, which is critical for our future growth and margin expansion and represents approximately 40% of our total revenue. We will continue to look for ways to deploy capital to support organic growth initiatives at attractive returns, well in excess of our cost of capital.

Jerome Rouquet: We're highlighting on the right-hand side of the slide the amount of adjusted free cash flow before CapEx that we have generated over the last 12 months, $359 million, and how it was allocated.

Jerome Rouquet: Our larger spent has been CapEx, which is critical for our future growth and margin expansion and represents approximately 40 million. We will continue to look for ways to deploy capital to support organic growth initiatives at attractive returns when in excess of our cost of capital. Success in allocating capital to high return projects is illustrated by our strong return on invested capital. Bybacks have also been a significant source of capital deployment, with 96 million spent in the last 12 months or 27%. Lastly, as I mentioned last quarter, we're looking to expand and improve our business via bolt-on M&A, primarily in further expansion of engineering services or additional vertical integration into our manufacturing processes.

Jerome Rouquet: Our largest spent has been CapEx, which is critical for our future growth and margin expansion, and represents approximately 40%.

Jerome Rouquet: We will continue to look for ways to deploy capital to support organic growth initiatives at attractive returns, well in excess of our cost of capital.

Jerome Rouquet: Success in allocating capital to high-return projects is illustrated by our strong return on investment. Buybacks have also been a significant source of capital deployment, with $96 million spent in the last 12 months, or $27 million.

Jerome Rouquet: Our success in allocating capital to high-return projects is illustrated by our strong return on invested capital.

Jerome Rouquet: Buybacks have also been a significant source of capital deployment, with 96 million spent in the last 12 months, or 27%.

Jerome Rouquet: Lastly, as I mentioned last quarter, we're looking to expand and improve our business via bolt-on M&A, primarily in the further expansion of engineering services or additional vertical integration into our manufacturing. We have earmarked 28% for potential M&A opportunities in the coming quarter. Turing Two-Page Transcript Following some of the market dynamics highlighted by Sachin, we are updating our guidance for the food industry to $3.85 to $3.95 billion, a $200 million reduction in the middle. This is in line with SMP Global.

Jerome Rouquet: Lastly, as I mentioned last quarter, we're looking to expand and improve our business via bolt-on M&A, primarily in further expansion of engineering services or additional vertical integration into our manufacturing processes.

Jerome Rouquet: We have earmarked 28% for potential MNA opportunities in the coming quarters, turning to page 12. Following some of the market dynamics highlighted by Tachin, we are updating our guidance for the foodier. For sales, we are revising our guidance range to 3.85 to 3.95 billion, a 200 million reduction at the midpoint. The change versus our original assumption is driven by lower customer vehicle production and several factors affecting our growth over market. For customer vehicle production, we are forecasting a decline of approximately 3%, which is a 2% reduction from our initial forecast. This is in line with SMP Global forecast.

Jerome Rouquet: We have earmarked 28% for potential M&A opportunities in the coming quarters.

Jerome Rouquet: Following some of the market dynamics highlighted by Sachin, we are updating our guidance for the full year.

Sachin S. Lawande: For sales, we are revising our guidance range to $3.85 to $3.95 billion, a $200 million reduction at the midpoint.

Sachin S. Lawande: The change versus our original assumption is driven by lower customer vehicle production and several factors affecting our growth of a market.

Sachin S. Lawande: For customer vehicle production, we are forecasting a decline of approximately 3%, which is a 2% reduction from our initial forecast.

Jerome Rouquet: For growth over market, the most significant Edwin versus our prior forecast is the lowering of our expectations for China, both due to unfavorable mix with our largest domestic customer, Julie, and continued market share losses by the international OEs. Outside of China, we also expect some mixed impact from the slower than anticipated ramp-up of EVs, where we have higher than average digital cockpit content and from delays in the introduction of some model refreshes at Ford. As a result of the change in revenue, we are slightly lowering our range for just CDBDA to 455 to 475 million, a reduction of 20 million at the midpoint, reflecting the commentals of 10% as we continue to execute well.

Jerome Rouquet: For Growth of a Market, the most significant Edwin versus our prior four is the lowering of our expectations for growth, both due to unfavorable mix with our largest domestic customer, Geely, and continued market share losses by the international OECD. Outside of China, we also expect some mixed impact from the slower-than-anticipated ramp-up of Ebola, where we have a higher-than-average digital cockpit, and from As a result of the change in revenue, we're slightly lowering our range for adjusted EBITDA to $455 to $475 million, a reduction of $20 million at the median. Reflecting Decrementals of Temperance, as we continue to execute.

Sachin S. Lawande: This is In Line with S&P Global Forecasts.

Sachin S. Lawande: For growth of a market, the most significant headwind versus our prior forecast is the lowering of our expectations for China.

Sachin S. Lawande: both due to unfavorable mix with our largest domestic customer, Geely, and continued market share losses by the international OEs.

Sachin S. Lawande: Outside of China, we also expect some mixed impact from the slower-than-anticipated ramp-up of EVs, where we have higher-than-average digital cockpit content, and from delays in the introduction of some model refreshes at Ford.

Sachin S. Lawande: As a result of the change in revenue, we are slightly lowering our range for adjusted EBITDA to $455 to $475 million, a reduction of $20 million at the midpoint, reflecting decrementals of 10% as we continue to execute well.

Jerome Rouquet: On a margin basis, the 11.9% midpoint is slightly higher than our prior guidance, with our first task performance coming in ahead of our original expectations. We expect from year-of-year and commentals for the full year as we continue to find efficiencies in the business, control costs, and leverage our fixed cost base. Lastly, we are maintaining our adjusted free cash flow guidance, as our first half cash flow was strong. This range considers our assumptions of the current a just CDBDA range, the use of working capital for the year, and capacity spending of 145 million for the year.

Jerome Rouquet: On a margin basis, the 11.9% midpoint is slightly higher than our prior guidance, with our first half performance coming in ahead of our original. We expect stronger year-over-year incrementals for the full year as we continue to find efficiencies in the business, control costs, and leverage our fixed costs. Lastly, we are maintaining our adjusted free cash flow guidance as our first half cash flow was... This range considers our assumptions of the current adjusted EBITDA, the use of working capital for the year, and CapEx Spending of $145 Million. Our conversion ratio increased slightly from our prior guidance and remains within our targeted range of 35%. Turning to page 30.

Sachin S. Lawande: On a margin basis, the 11.9% midpoint is slightly higher than our prior guidance, with our first half performance coming in ahead of our original expectations.

Sachin S. Lawande: We expect strong year-over-year incrementals for the full year as we continue to find efficiencies in the business, control costs, and leverage our fixed cost base.

Sachin S. Lawande: Lastly, we are maintaining our adjusted free cash flow guidance, as our first half cash flow was strong.

Sachin S. Lawande: This range considers our assumptions of the current adjusted EBITDA range, the use of working capital for the year, and capex spending of $145 million for the year. Our conversion ratio increased slightly from our prior guidance and remains within our targeted range of 35 to 40%.

Jerome Rouquet: Our conversion ratio increased slightly from our prior guidance and remains within our targeted range of 35 to 40%.

Sachin Lawande: Turning to page 13. Vistion remains a compelling long-term investment opportunity. We expect to benefit from higher demand for more digital content in the cockpit, regardless of pow train and the growth of electric and hybrid vehicles. Visteon is uniquely positioned for multi-year top line growth, margin expansion, and free cash flow generation, while our strong balance sheet provides us with significant flexibility. Thank you for your time today.

Speaker Change: Turning to page 13.

Jerome Rouquet: Visteon remains a compelling long-term investment. We expect to benefit from higher demand for more digital content in the cockpit, regardless of powertrain and the growth of electric and hybrid vehicles. Visteon is uniquely positioned for multi-year top-line growth, margin expansion, and free cash flow generation, while our strong balance sheet provides us with significant flexibility. Thank you for your time today. I'd like now to open the call for you.

Speaker Change: Visteon remains a compelling long-term investment opportunity. We expect to benefit from higher demand for more digital content in the cockpit, regardless of powertrain, and the growth of electric and hybrid vehicles.

Speaker Change: Visteon is uniquely positioned for multi-year top-line growth, margin expansion and free cash flow generation, while our strong balance sheet provides us with significant flexibility. Thank you for your time today. I'd like now to open the call for your questions.

Ryan Wentling: I'd like now to open the call for your questions. At this time, if you would like to ask an audio question, please press star, then the number one on your telephone keypad. Again, that is star and the number one. We will pause for just a moment to compile the Q&A roster.

Operator: At this time, if you would like to ask an audio question, please press star, then the number one on your telephone keypad. Again, that is star and the number one. We will pause for just a moment to compile the Q&A roster. Our first call comes from Luke Junk with Baird. Good morning.

Speaker Change: At this time, if you would like to ask an audio question, please press star, then the number one on your telephone keypad. Again, that is star and the number one. We will pause for just a moment to compile the Q&A roster.

Luke Junk: Our first call comes from Luke Junk with Ferd. Good morning. Thanks for taking the questions. For my first question, I’m just hoping you could disengage a cluster growth in the second quarter and your expectations for the back half of the year. Just a lot going on here of digital cluster growth versus analog and hybrid. I think there's some product sunsets that we're seeing in the numbers and launch delays or slower ramps. Can you just kind of square what we saw in the second quarter and then how that steps up in the back half. Thank you.

Sachin S. Lawande: Thanks for taking the questions. For my first question, I'm just hoping you could desegregate cluster growth in the second quarter and your expectations for the back half of the year. Just a lot going on here of digital cluster growth versus analog and hybrid. I think there are some product sunsets that we're seeing in the numbers and launch delays or slower ramps. Can you just kind of explain what we saw in the second quarter and then how that steps up in the back half? Thank you. Absolutely, Luke.

Speaker Change: Our first call comes from Luke Junk with Baird.

Luke L. Junk: Good morning, thanks for taking the questions. For my first question, I'm just hoping you could desegregate cluster growth in the second quarter and your expectations for the back half of the year. Just a lot going on here of, you know, digital cluster growth versus analog and hybrid. I think there's some product sunsets that we're seeing in the numbers and launch.

Speaker Change: delays or slower ramps can you just kind of square what we saw in the second quarter and then how that steps up in the back half thank you

Sachin S. Lawande: So, first of all, as you know, digital clusters have been a very strong product for the company now for the last several quarters. And even in Q2, we saw our sales of digital clusters grow double digits year over year in a lower vehicle production environment. And it was one of the main drivers of our market art performance. Today, clusters overall make up about 40 percent of our sales. And of that, digital clusters make up about 80 percent.

Sachin Lawande: Absolutely look. So yes, first of all, as you know, digital clusters have been a very strong product for the company now for the last several quarters. And even in Q2, we saw sales of digital clusters grow good double-digit year over year in a lower vehicle production environment. And it was one of the main drivers of our market art performance. Today clusters overall make up about 40% of our sales, and off that digital clusters is about 80%. So the majority of what we do today in clusters are digital, and we are the clear market share leaders in that product category.

Luke: Absolutely, Luke. So, yes.

Speaker Change: First of all, as you know, digital clusters have been a very strong product for the company now for the last several quarters.

Luke: And even in Q2, we saw our sales of digital clusters grow a good double-digit year-over-year in a lower vehicle production environment. And it was one of the main drivers of our market outperformance.

Luke: Today, clusters overall make up about 40% of our sales, and of that, digital clusters is about 80%, so the majority of what we do today in clusters are digital, and we are the clear market share leaders in that product category.

Sachin S. Lawande: So the majority of what we do today in clusters is digital, and we are the clear market share leaders in that product category. And we expect this performance to continue, but I would also like to mention that what we are seeing in the industry is that in the mid to upper end of the market, we are seeing more of a transition towards cockpit domain controllers and displays. And as a result of that, digital clusters start to migrate more and more into mass market vehicles.

Sachin Lawande: And we expect this performance to continue, but I would like to also mention that what we are seeing in the industry is that, in the mid to upper end of the market, we are seeing more transition towards copy domain controllers and displays. And we are seeing also as a result of that digital clusters start to migrate more and more into mass market vehicles. And we expect that transition to continue as we go forward from here. So this is why, as we have seen, our displays' performance has been very strong this year, the first half. And if you go back last year, our smart core, copy domain controller wins were also very strong.

Luke: And we expect this performance to continue, but I would like to also mention that what we are seeing in the industry is that

Luke: In the mid to upper end of the market, we're seeing more a transition towards cockpit domain controllers and displays.

Luke: And we are seeing also, as a result of that, digital clusters start to migrate more and more into mass market vehicles. And we expect that transition to continue as we go forward from here.

Sachin S. Lawande: And we expect that transition to continue as we go forward from here. So, this is why, as we have seen, our display's performance has been very strong this year, in the first half. And if you go back.

Luke: So this is why, as we have seen, our display's performance has been very strong this year, the first half.

Sachin S. Lawande: Last year, our SmartCore Cockpit Domain Controller wins were also very strong. In fact, I believe that was the largest portion of our seven plus billion dollars in new business wins. And so, with Displays being a product that requires a shorter time to launch following the Cockpit Domain Controllers, which take longer to implement and launch, you see the sequence of CDCs followed by Displays in the mid to upper end of the market and the migration of digital clusters into more and more mass market vehicles.

Luke: And if you go back...

Luke: Last year

Sachin Lawande: In fact, I believe that was the largest portion of our seventh-plus billion dollars in new business wins. And so, with this place being a product that requires shorter time to launch following the copy domain controllers, which take longer to implement and launch. You see the sequence of CDC is followed by displays in the way to upper end of the market and the migration of digital clusters into more and more mass market vehicles. We still feel that there's a lot of runway ahead for this product for the foreseeable future, and we expect that to continue to be a leading product for us.

Luke: Our SmartCore Cockpit Domain Controller wins were also very strong. In fact, I believe that was the largest portion of our 7 plus billion dollars in new business wins.

Luke: And so, with this place...

Luke: being a product that requires shorter time to launch.

Luke: following, you know, the cockpit domain controllers, which take longer to...

Luke: implement and launch, you see the sequence of...

Sachin S. Lawande: We still feel that there's a lot of runway ahead for this product for the foreseeable future, and we expect that to continue to be a leading product for us. Thanks for that session; especially the mix of digital customers is helpful. For my follow-up, maybe you or Jerome, I was just hoping for some high-level thoughts on following the updated 2024 expectations through to your 2026 midterm targets. Thank you. Yeah, let me talk about that, Luke, and I'll be happy for Jerome to also add any more color.

Luke: and the migration of digital clusters into more and more mass market vehicles. We still feel that there's a lot of runway ahead for this product for the foreseeable future and we expect that to continue to be a leading product for us.

Luke Junk: Thanks for that session, especially the mix of digital custodies is helpful.

Sachin Lawande: For my follow-up, maybe you or Jerome just hoping for some high-level thoughts on flowing updated 2024 accentuations through to your 2026 midterm targets. Thank you. Yeah, let me talk about that look, and I'll be happy for Jerome to also add any more color. But first of all, I would say that it is a little early for us to talk about 2026. However, I want to share some of the things that we are looking at here as we look at the midterm. First of all, I would say that if you look at the last few years, we have demonstrated that we can grow our sales even in a flat LVP environment.

Sachin S. Lawande: But first of all, I would say that it is a little early for us to talk about 2026, but I want to share some of the things that we are looking at here as we look at the midterm. First of all, I would say that if you look at the last few years, we have demonstrated that we can grow our sales even in a flat LVP environment. If you go back to 2019-2023, LVP was essentially flat at roughly 89 million units globally. And our revenues over that period of time grew 30% to almost $4 billion, and our EBITDA improved 300 basis points to about 11%. Now, this year, we were expecting their performance to continue.

Speaker Change: Looking at here as we look at the midterm first of all I would say that if you look at the last few years, we have demonstrated that we can grow our sales even in a.

Speaker Change: <unk> L V P environment.

Sachin Lawande: If you go back to say 2019 to 2023, LVP was essentially flat at roughly 89 million units globally, and our revenues over that period of time grew 30% to almost $4 billion, and our EBITDA improved 300 basis points to about 11%. Now this year, we were expecting their performance to continue, but as we have discussed in our prepared remarks, the reduction in the outlook for customer vehicle production, as well as the dynamics in China, has meant that despite those things, we will be in a position to deliver a flat, flatish performance 2023 to 2024, still representing a growth of a market on the count of the lowered production expectations.

Speaker Change: Right. If you go back to say 2019 to 2023.

Speaker Change: <unk> was essentially flat at roughly 89 million units globally.

Speaker Change: And our revenues over that period of time grew 30% to almost $4 billion.

Speaker Change: And our EBITDA improved 300 basis points drove about 11%.

Speaker Change: Now this year, we were expecting that performance to continue but as we have discussed in our prepared remarks.

Sachin S. Lawande: But as we've discussed in our prepared remarks, the reduction in the outlook for customer vehicle production, as well as the dynamics in China, has meant that despite those things, we will be in a position to deliver a flat, flattish performance from 2023 to 2024, still representing growth in the market on account of the lowered production expectations. Now, what I would also mention is that we are adapting to these market changes. We are first expanding our customer base in the passenger car market to OEMs that historically have not been a big part of our revenue, for example, OEMs in Japan and India. Today, those sets of OEMs make up about 5% of our revenue. And if you look at the production side of things, they make up almost 25% of global passenger car production.

Speaker Change: The reduction in the outlook for customer vehicle production as well as the dynamics in China.

Speaker Change: Has meant that despite those things we will be in a position to deliver a flat flattish performance 'twenty to 'twenty three 'twenty to 'twenty four still representing a growth of a market on account of the.

Speaker Change: Lowered production expectations.

Sachin Lawande: Now, what I would also mention is that we are adapting to these market changes. We are first expanding our customer base in the passenger car market to OEMs that historically have not been a big part of our revenue, for example, OEMs in Japan and India. Today, those set of OEMs make up about 5% of our revenue. If you look at the production side of things, they make up almost 25% of the global passenger car production. We see a lot of opportunity there. They are also focusing on two-wheelers and commercial vehicle segments. And in both the Asian OEMs, as well as in two-wheelers and commercial vehicle segments, we have made a lot of progress.

Speaker Change: Now what I would also mention is that we are adapting to these market changes.

Speaker Change: We had first expanding our customer base and.

Speaker Change: Passenger car market the Oems that historically have not been a big part of our revenue.

Speaker Change: For example, Oems in Japan and India.

Speaker Change: They.

Speaker Change: Those set of Oems make up about 5% of our revenue.

Speaker Change: And if you look at the production side of things they make up almost 25% of the global passenger car production. So we see a lot of opportunity there, but also focusing on two wheelers and commercial vehicle segments.

Sachin S. Lawande: So we see a lot of opportunity there. They're also focusing on the two-wheeler and commercial vehicle segments. And in both the Asian OEMs as well as in the two-wheeler and commercial vehicle segments, we've made a lot of progress. We have talked about our progress with Toyota. We also have a business with Honda and Hyundai that make up that group of OEMs. And when it comes to two-wheelers and commercial vehicles, I'm very happy that we have business with all of the top four or five leaders in each of those two segments.

Speaker Change: And in both the.

Speaker Change: Asian Oems as well as in tubular and commercial vehicle segments. There made a lot of progress.

Sachin Lawande: We have talked about our progress with Toyota. We also have one business with Honda and Hyundai that make up that group of OEMs. And when it comes to two-wheelers and commercial vehicles, I'm very happy that we have business with all of the top 405 leaders in each of those two segments. So, as we go forward, some of these will start to contribute revenue, even in 2026. And then lastly, as Jerome mentioned in his prepared remarks, we are also looking at some M&A to help build our engineering services business that we see a good opportunity for.

Speaker Change: I've talked about our progress with Toyota.

Speaker Change: We also have won business with a Honda and Hyundai.

Speaker Change: Makeup that that group of Oems and when it comes to two wheelers and commercial vehicles I'm very happy that we have business with all of the top four or five leaders in each of those two segments.

Sachin S. Lawande: So as we go forward, some of these will start to contribute revenue even in 2026. And then lastly, as Jerome mentioned in his prepared remarks, we are also looking at some M&A to help build our engineering services business, which we see a good opportunity for. As we all know, OEMs are going to do more and more software as the cards are going to attract a lot of software content. And we have the technology capability and scale to help them.

Speaker Change: So as we go forward some of these will start to contribute revenue even in 'twenty to 'twenty six.

Speaker Change: And then lastly, as Jerome mentioned in his prepared remarks, we're also looking at.

Jerome Rouquet: Some M&A to help build our engineering services business that we see a good opportunity for as we all know Oems are going to do more and more software as the cards are going to be attracting a lot of software content and.

Luke Junk: As we all know, OEMs are going to do more and more software as the cars are going to be attracting a lot of software content. And we have the technology capability and scale to help them. So, as I said, some of these will have an impact on 2026, but the full impact will be probably felt more in outer years. So, we'll take all of that into consideration, and as we make up our midterm plan, including 2026, we will probably update you sometime this year at the date as we have to be determined. I understand, thank you for that, and we will stay tuned.

Speaker Change: And we have the technology capability and scale to help them. So as I said some of this will have an impact on trended rents six but the full impact will be probably felt more in outer years.

Sachin S. Lawande: So, as I said, some of these will have an impact on 2026, but the full impact will probably be felt more in the later years. So we'll take all of that into consideration. And as we make up our midterm plan, including 2026, we will probably update you sometime this year at a date as yet to be determined. Understandable. Thank you for that, and we will stay tuned. Thanks, Sachin.

Jerome Rouquet: All of that into consideration and as we make up our midterm plan, including clinical into six we'll probably update you sometime this year at the data as you know yet to be determined.

Speaker Change: Understood. Thank you for that and we will stay tuned thank session.

Luke Junk: Thanks, session. Thank you, Luke.

Luke L. Junk: Thank you Luke.

Mark Delaney: Our next call comes from Goldman Sachs. Yes, I'm Mark Delaney. Thanks so much for taking my question.

Operator: Thank you, Luke. Our next call comes from Goldman Sachs. Yes, this is Mark Delaney.

Speaker Change: Our next call comes from Goldman Sachs.

Jerome Rouquet: Thanks so much for taking my question. I guess to start, hoping to better understand the second half EBITDA outlook. Jerome, if I heard correctly, you talked about a normalized EBITDA margin. If you adjusted for some of the one-time factors, it would have been more like 12%. I think second half revenue is pretty similar to first half, and yet the EBITDA margin looks like it's implied to be in the mid-11% range. So maybe we could talk about some of the factors impacting EBITDA in the second half of this year versus the first half and actually think about the second half of EBITDA as a potential starting point to think about modeling 2025. Absolutely, yes, good morning, Mark.

Speaker Change: I guess.

Speaker Change: <unk>. Thanks, so much for taking my question I guess to start off.

Jerome Rouquet: I guess to start, hoping to better understand the second half, EBITDA outlook Jerome, if I heard correctly, you talked about a normalized EBITDA margin. If you adjusted for some of the one-time factors, would have been more like 12%. I think second half revenue is pretty similar to first half, and yet the EBITDA margin looks like it's implied to be in the middle 11% range.

Speaker Change: And to better understand the second half EBITDA outlook Jerome if I heard correctly, you talked about a normalized EBITDA margin. If you adjusted for some of the onetime factors would've been more like 12% I think second half revenue is pretty similar to first half and yet the EBITDA margin looks like it's implied to be in the mid 11% range.

Jerome Rouquet: So maybe talk about some of the factors impacting EBITDA and the second half of this year versus the first half. And I actually think about the second half, EBITDA, as the potential starting point to think about modeling in 2025. Thanks. Absolutely, yes.

Jerome Rouquet: Maybe talk about some of the factors impacting EBITDA in the second half of this year versus the first half and.

Speaker Change: How should we think about the second half EBITDA as a potential starting point to think about modeling in our 2025.

Jerome Rouquet: Absolutely, yes, so good morning Mark.

Jerome Rouquet: Good morning, Mark. So let me maybe start by saying that we are very pleased with the way Q2 performance shaped out. We perform better than anticipated. And if you step back and look at essentially H1, we've been performing better than what we had anticipated, even after normalizing for some of the commercial one-timers that I highlighted in my prepared remarks, which represented about 50 basis points of benefit to EBITDA margin in the quarter. So to put things in perspective, we were planning to be slightly below our EBITDA margin midpoint of 11.8% for H1. And we've ended the first half with 12.2% at face value.

Jerome Rouquet: So let me maybe start by saying that we are very pleased with the way Q2 performance shaped out. We've performed better than anticipated. And if you step back and look at essentially H1, we've been performing better than we had anticipated, even after normalizing for some of the commercial one-timers that I highlighted in my prepared remarks, which represented about 50 basis points of benefit to EBITDA margin in a quarter. So to put things in perspective, we were planning to be slightly below our EBITDA margin midpoint of 11.8% for H1. And we've ended the first half with 12.2% at face value.

Jerome Rouquet: Let me maybe start by saying that we are very pleased with the way our COO.

Speaker Change: Q2 performance shaped out with performed better than anticipated and if you step back and look at essentially H, one we've been performing better than what we had anticipated.

Jerome Rouquet: And if you normalize that with the one-timers, closer to 11.9%, so close to the 12% that you were referring to. As we go into H2, we're expecting this level of performance to continue on flat sales, as you said, per our revised sales guidance. So what will be happening is a slightly increasing of our engineering and SG&S spending in H2 versus H1, but a little bit less than what we had originally anticipated. And this good performance, combined with the good control of our SG&A and engineering, will allow us to raise our EBITDA percentage to 11.9% for the full year from that 11.8% that we had previously guided towards.

Speaker Change: Even after normalizing for some of the commercial one timers that I highlighted in my prepared remarks, which represented about 50 basis points of benefit to EBITDA margin in the quarter. So to put things in perspective, we were planning to be slightly below our EBITDA margin midpoint.

Speaker Change: At 11, 8% for H, one and we've ended the first half with 12, 2% at face value and if you normalize that with a one time there is a closer to 11, 9% so closer to 12% that you were referring to.

Jerome Rouquet: And if you normalize that with the one-timers, closer to 11.9%, so closer to 12% that you were referring to. As we go into H2, we're expecting this level of performance to continue on flat sales, as you said, per our revised sales guidance. So what will be happening will be slightly increasing our engineering and SDNS spending in H2 versus H1, but a little bit less than what we had originally anticipated. And this good performance will combine with as well the good-cause control of our HGNA and engineering will allow us to raise our EBITDA percentage to 11.9% for the foodier from the 11.8% that we had previously guided towards.

Speaker Change: As we go into <unk>, we were expecting this level of performance to continue on flash sales as you said for our revised sales guidance. So.

Speaker Change: What will be happening will be slightly increasing our engineering and SG&A spending in H two versus H, one, but little bit less than what we had originally anticipated and this good performance will combined with as well the good cost control of our SG&A.

Speaker Change: SG&A and engineering will allow us to raise our EBITDA percentage to 11, 9% for the full year from the 11, 8% that we had previously.

Mark Delaney: So 465 million for the foodier. When you look at it versus prior guidance, it's essentially a set of the commentals that are close to 10%, which we believe is a pretty good performance given the challenging environment we're in. Thanks for all that color.

Speaker Change: Guided towards so a 465 million for the full year when you look at it.

Jerome Rouquet: So $465 million for the full year. When you look at it versus prior guidance, it's essentially a set of decrements that are close to 10%, which we believe is a pretty good performance, given the challenging environment we're in. Thanks for all that color.

Speaker Change: Prior guidance, it's essentially a set of decrementals that are close to 10%.

Speaker Change: We believe is a pretty good performance.

Speaker Change: Given the challenging environment we're in.

Sachin S. Lawande: Maybe a strategic question, you know, there's been a lot of news out there, OEMs looking to partner on electronic architecture, some of the big tech giants looking to maybe do more with software, and maybe we could talk a little bit more about some of those things. I guess the one I wanted to better understand specifically as you think about the digital electronics in the car, you have Apple with the next version of CarPlay, you're looking to have more influence over the broader set of digital controls in the vehicle, and I'm hoping to understand how that's maybe impacting how OEMs want to work with Visteon, maybe there are some opportunities for you, maybe some incremental challenges, if you could maybe talk about what you' Thanks.

Speaker Change: Thanks for all that color.

Sachin Lawande: Maybe a strategic question. There's been a lot of news out there. OEM's looking to partner on electronic architecture, some of the big tech giants looking to maybe more with software. And maybe we could talk specifically as you think about the digital electronics in the car. You would Apple with the next version of CarPlay. You're looking to have more influence over the broader set of digital controls in the vehicle. And I'm hoping to understand how that's maybe impacting how OEMs want to work with this. Yeah, maybe there's some opportunities for you. Maybe some incremental challenges. If you could maybe talk about what you're seeing in regard as the digital electronics in this software ecosystem continues to evolve.

Speaker Change: Maybe a strategic question and you know there's been a lot of news out there.

Speaker Change: I am looking to partner on electronic architecture, or some of the Big Tech Giants looking into maybe more of a software and.

Speaker Change: Maybe we could talk a little bit more on some of those things I I guess, what I wanted to better understand was specifically as you think about the digital electronics in the car you had apple with the next version of <unk>.

Speaker Change: We are working to have more influence over the broader set of digital controls in the vehicle and I'm, hoping to understand how that maybe impacting how Oems wanted to work with 50 or maybe there are some opportunities for you maybe some incremental challenges and if you could maybe talk about what what youre seeing in regard as are the digital electronics and our software ecosystem continues to evolve.

Sachin Lawande: Thanks. Sure, sure. So first of all, I would say that all these new features and capabilities that CarPlay and other technologies bring actually drive more content into the car. Robert. And that's great for us because the requires the OEMs to often redesign and re-implement some of these capabilities because they were not conceived of at the time that they built their earlier generation systems. And more often than not, we see more of these technologies demand higher computing resources and power. You've mentioned CarPlay, but one of the big topics that we see that's going to impact the industry is AI and generative AI, in particular, coming into the cockpit of the future.

Sachin S. Lawande: Sure, sure. First of all, I would say that all these new features and capabilities that CarPlay and other technologies bring are actually driving more content into the car. And that's great for us because that requires OEMs to often redesign and re-implement some of these capabilities because they were not conceived of at the time that they built their earlier generation systems. And more often than not, we see more of these technologies demand higher computing resources and power.

Speaker Change: Sure sure. So first of all I would say that all of these are new.

Speaker Change: Some capabilities that all play in other technologies bring regular driving more content into the cockpit.

Speaker Change: And that's great for us because that requires the Oems too often the redesign and re implement some of these capabilities because they were not consumed off at the time that they build their earlier generation systems and more often than not we will see more of these technologies demand higher computing resources and power.

Sachin S. Lawande: You mentioned CarPlay, but one of the big topics that we see that's going to impact the industry is AI, and generative AI in particular coming into the cockpits of the future. Now, that requires a significant level of uplift in terms of compute resources and, therefore, the content and value that we can bring. But that's also going to be the first entry into the space at a particular point in the market in terms of segmentation and probably not necessarily go across all of the vehicles on account of cost, at least initially.

Speaker Change: You've mentioned card player, but one of the big all the topics that we see that's going to impact the industry is AI and generally they are in particular coming into the cockpit of the future now that requires a significant level of uplift in terms of compute resources and therefore the.

Sachin Lawande: Now, that requires a significant level of uplift in terms of compute resources and therefore the content and value that we can bring. But that's also going to be first entering into the space at a particular point in the market in terms of segmentation and probably not necessarily go across all of the vehicles on account of cost, at least initially. So, those things that are coming in for we look at them as a net positive for us. You also ask the question about this licensing of vehicle platforms. They're probably referring to the Rivian VW deal. We look at those as essentially OEMs trying to figure out for the immediate term how they can catch up to the state of the art in terms of the vehicle electrical architecture.

Speaker Change: Content and value that we can bring but that's also going to be first entering into the space at a particular point in the market in front in terms of segmentation and probably not necessarily go across all of the vehicles on a kind of cost at least initially.

Sachin S. Lawande: So all those things that are coming in, we look at them as a net positive for us. You also asked the question about this licensing of vehicle platforms. You probably are referring to the Rivian VW deal. We look at those as essentially OEMs trying to figure out for the immediate term how they can catch up to the state of the art in terms of vehicle electrical architecture. It does not have as much to do with what I would call the top hat, which is where we play.

Speaker Change: So that all those those things that are coming in for re look at them as a net positive for US you also asked a question about this licensing of vehicle platforms you.

Speaker Change: Probably you're referring to the Libyan VW deal.

Speaker Change: We look at those as essentially Oem's trying to figure it out for the immediate term.

Speaker Change: They can catch up to the state of the art in terms of the vehicle electrical architecture.

Sachin Lawande: It does not have as much to do with what I would call the top hat, which is where we play. Now, if you look at VW as an example, they're 15 plus brands in their portfolio. They cannot take an electrical vehicle architecture from anybody and just spread it across all 15 brands without any differentiation. Where does the differentiation come from? It comes from the kind of stuff that we provide what the user sees inside the cockpit. So, that top hat will be different by brand, and that's where we can help them build that differentiation.

Speaker Change: It does not have as much to do with what I would call the top hat, which is where we play.

Sachin S. Lawande: Now, if you look at VW as an example, there are 15 plus brands in their portfolio. They cannot take an electrical vehicle architecture from anybody and just spread it across all 15 brands without any differentiation. Where does the differentiation come from?

Speaker Change: Look at VW as an example, they're 15 plus brands in their portfolio. They cannot take a electrical vehicle architecture from anybody and just spread it across all 15 brands without any differentiation where does the differentiation come from it comes from the kind of stuff that we provide what the use of <unk>.

Sachin S. Lawande: It comes from the kind of stuff that we provide, what the user sees inside the cockpit. So the top hat will be different by brand. And that's where we can help them build that differentiation. Now, with all of the technologies that we talked about coming in, it's not conceivable that any one OEM or even a Tier 1 like us could do all of those technologies themselves as a single company. Almost all of these in the future will require a collection of companies to come together to build these complex systems.

Speaker Change: Inside the cockpit, so the top pad will be different by brand.

Speaker Change: And that's where we can help them build their differentiation now with all of the technologies that we talked about coming in it's not conceivable that any one OEM or even a tier one like us can do all of those technologies themselves as a single company almost all of these in the future will require a collection of <unk>.

Sachin Lawande: Now, with all of the technologies that we talked about coming in, it's not conceivable that any one OEM or even a Tier 1 like us can do all of those technologies themselves as a single company. Almost all of these in the future will require a collection of companies to come in to build this complex systems. OEMs will have to do their part, but so will Tier 1s and other partners are to step up and provide capabilities. And when you look at the Tier 1 space, I do not believe today there is anybody that's better positioned than Vistion in terms of all of the products and technologies that are required for the copies of today, but also investing in the capabilities, especially things like AI and augmented reality, that we think will be very key in copies of the future.

Speaker Change: <unk> to come in to build these complex systems.

Sachin S. Lawande: OEMs will have to do their part, but so will Tier 1s and other partners have to step up and provide capabilities. And when you look at the Tier 1 space, I do not believe today there is anybody that's better positioned than Visteon in terms of all of the products and technologies that are required for the cockpits of today, but also investing in the capabilities, especially things like AI and augmented reality, that we think will be very key in the cockpits of the future.

Speaker Change: Yes, we'll have to do their part, but we will have tier ones and other partners are to step up and provide capabilities and when you look at the tier one space I do not believe today. There is anybody that's better positioned in Visteon in terms of all of the products and technologies that are required for the loss of other cockpits of today.

Speaker Change: But also investing in the capabilities, especially things like AI and augmented reality that we think will be very key in cockpit of the future.

Sachin Lawande: So, I think all of these things mark as is a very good thing. It underlines all the important software and electronics that is going to be for the industry. Yeah, thanks so much for all those thoughts. I'll pass it on. Thank you.

Sachin S. Lawande: So I think all of these things, Mark, are a very good thing. It underlines how important software and electronics are going to be for the industry. Thanks so much for all those thoughts. I'll pass them along.

Speaker Change: I think all of these things Mark is a very good thing it underlines how important software and electronics is going to be for the industry.

Mark: Thanks, so much rather his thoughts I'll pass it on thank.

Mark: Thank you.

Ronnie Epsko: Our next call comes from Goodenheim, South. Yeah, good morning. It's Ronnie Epsko, Goodenheim.

Operator: Thank you. Our next call comes from Guttenheim South. Yeah, good morning. It's Ronnie Epscoke, Guggenheim.

Speaker Change: Our next call comes from Guggenheim.

Sachin S. Lawande: Sachin, Jerome, you highlight the $1.8 billion in year-to-date wins with Japanese and Indian OEMs, I guess, particularly focused on the Japanese part, but any color or even firm numbers on how that $1.8 billion compares to prior years? I guess, how big of an opportunity do you think this could be because, traditionally, it's a pretty high bar to win business versus the current two suppliers? Yeah, no, that's a

Ronnie Epsco: Yes, good morning, Ronnie Epsco Guggenheim option Jerome you highlight.

Sachin Lawande: Sachin Jerome, you highlight the $1.8 billion in year-to-date wins with Japanese and Indian OEMs. I guess we're particularly focused on the Japanese part, but any color or even firm numbers on how that $1.8 billion compares to prior years. and I guess how big of an opportunity you think this could be because traditionally it's a pretty high bar winning business versus the crypto suppliers? Yeah, no, that's that's a great question. So if you look at, I will particularly focus on Toyota because of that group of OEMs; they represent the biggest opportunity. Now, as you know, Toyota has some very high-profile, high-volume vehicle brands: you know, the RAV4, Camry, Corolla, represent the smart key brands that have very high volume.

Speaker Change: The $1 8 billion and year to date wins with Japanese and Indian Oems I guess, we're particularly focused on the Japanese part, but any color or even firm numbers on how that $1 8 billion in comparison to prior years and I.

Speaker Change: I guess, how big of an opportunity you think this could be because traditionally it's a pretty high bar winning business versus the crypto suppliers.

Sachin S. Lawande: So, if you look at, I would particularly focus on Toyota because of that group of OEMs, they represent the biggest opportunity. Now, as you know, Toyota has some very high profile, high volume vehicle brands. The RAV4, Camry, and Corolla represent the marquee brands that have very high volumes. And until I would say about three years ago, we had roughly maybe a very small, I would say single digit million dollars of revenue with Toyota on some ancillary products, but nothing in the cockpit. And our first launch with them was the Corolla in China. And that was a regional product, in limited volume. They were essentially testing our capabilities.

Speaker Change: No. That's a great question. So if you look at I would.

Speaker Change: Particularly focus on period because of that group of Oems. They represent the biggest opportunity now as you know a theater has some very high.

Sachin S. Lawande: The success of that launch allowed us to participate in the bidding for the bigger Camry clusters. And then there are two clusters that these products typically offer. They have an upper end and the mass market.

Ronnie Epsco: Profile of volume or.

Speaker Change: Vehicle brands.

Ronnie Epsco: If the Rab for Camry corolla represent this marquee brands that have very high volume and.

Sachin Lawande: And until I would say about three years ago, we had roughly maybe very small, I would say single-digit million dollars of revenue with Toyota on some ancillary products, but nothing in the cockpit. And our first launch with them was for the Corolla in China. And that was a regional product limited volume. They were essentially testing our capabilities. The success of that launch allowed us to participate in the bidding for the bigger Camry clusters. And then there are two clusters that these products typically offer. They have a upper end and the mass market. And we were very pleased that we won the mass market, a higher volume cluster product that we launched in the quarter that we talked about.

Speaker Change: Until I would say about three years ago, where roughly maybe some very small I would say single digit million dollars of revenue with Toyota on some ancillary products, but nothing in the cockpit and the first launch with them was for the corolla in China and that was a regional product limited volume.

Speaker Change: We're essentially testing our capabilities.

Speaker Change: Success of that launch allowed us to participate in the bidding for the bigger country clusters.

Speaker Change: Clusters, and then the two clusters that these products typically offer they have a of upper end and the mass market.

Sachin S. Lawande: And we were very pleased that we won the mass market higher volume cluster product that we launched in the quarter that we talked about. So following that, there are multiple regional launches as well as further more global program opportunities for Toyota, right? And Toyota represents over 10% of the overall production of vehicles. So, and yet today, that hardly even factors into our revenue list. So, huge opportunity. And we see the same thing with the other guys that we talked about, right?

Speaker Change: And we were very pleased that we won the mass market a higher volume cluster product that we launched in the quarter that we talked about.

Sachin Lawande: So, following that, there are multiple regional launches, as well as further, more global program opportunities with Toyota, right. And Toyota represents over 10% of the overall production of vehicles. And our energies are better focused and served on these OEMs. And our products and technologies also fit where they see their vehicles go. So pretty happy with how it has turned out.

Speaker Change: So following that there are multiple regional launches as well as further more global program opportunities for Toyota.

Speaker Change: And thirdly represent over 10% of the overall production of vehicles, so and yet today, that's hardly even affect us into our.

Speaker Change: Revenue list, so a huge opportunity and we see the same thing with the other guys that we're talking about bright Honda Hyundai Maruti Suzuki so.

Sachin S. Lawande: Honda, Hyundai, Maruti Suzuki. So that's where we are really putting a lot of our energies. We were anticipating that the market in China was going to be a lot tougher, given what's happening there. And our energies are better focused and served on these OEMs. And our products and technologies also fit where they see their vehicles going. So pretty happy with how it has turned out.

Speaker Change: So that's what we are really putting a lot of our energies on we were anticipating that the market in China is going to be a lot tougher given what's happening there.

Speaker Change: Our energies are better focused and so on these Oems and our products and technology is also fit well.

Speaker Change: They see their vehicles go so pretty happy with how it has turned out and I should also mentioned.

Sachin S. Lawande: And I should also mention, I mean, the Japanese OEMs and passenger car markets are obviously our biggest chunk of revenue. But two-wheelers represent a huge opportunity as well. It has not been a focus so far because, mainly, the nature of that product did not really allow for electronics with a lot of power consumption that came along with it. Now, with that segment also turning to electrification, that's no longer the barrier, and we can do a lot more with electronics and software than ever before. Thanks for that; it's a really helpful color.

Sachin Lawande: And I should also mention, I mean, the Japanese OEMs and passenger car markets obviously is our biggest chunk of revenue. But two dealers represent a huge opportunity as well. It has not been a focus so far because mainly of the nature of that product did not really allow for electronics with a lot of power consumption that came along with it. Now, with that segment also, are turning to electrification. That's no longer the barrier. And we can do a lot more with electronics and software than ever before. Thanks for that. It's really helpful color.

Speaker Change: The Japanese Oems and passenger car markets, obviously is a biggest chunk of our revenue, but two wheelers represent a huge opportunity as well it has not been the focus so far because of mainly of the nature of that product did not really allow for electronics with a lot of power.

Speaker Change: Consumption.

Speaker Change: It came along with it now with that segment also turning to electrification that's no longer the barrier and we can't do a lot more with electronics and software than ever before.

Speaker Change: Thanks for that that's really helpful color and then a follow up question on the Chinese market broadly.

Sachin S. Lawande: And then a follow-up question on the Chinese market broadly, certainly the local versus global mix issues in China are not a Visteon exclusive issue to navigate, but I guess from our vantage point, it's pretty clear the global OEMs have a product issue in that market competing with, I would say, the more tech-forward Chinese local OEMs on things like displays and software. I guess my question is, these are things that I think Visteon can clearly help with, but what are your discussions with the global OEMs about their plans in China to maybe drive more tech forward? No, that's a great question.

Ronnie Epsko: And then a follow-up question on the Chinese market broadly. Certainly, the local versus global mix issues in China are not a bishion exclusive issue to navigate. But I guess from our vantage point, it's pretty clear the global OEMs have a product issue in that market competing with, I would say, the more tech-forward Chinese local OEMs on things like displays and software. I guess my question is these are things that I think Bishion can clearly help with. But what are your discussions like with the global OEMs about their plans in China to maybe drive more tech?

Speaker Change: The local versus global mix issues in China are not of Visteon exclusive.

Speaker Change: Issued to navigate but I guess from our vantage point, it's pretty clear the global Oems have a product issue in that market competing with I would say the more tech forward Chinese local Oems.

Speaker Change: On things like displays in software I guess my question is these are things that I think visteon can clearly help with but what are your discussions like with the global Oems about their plans in China to maybe drive more tech forward offerings. No. That's that's a great question and let me try to explain what we see happening today in the market.

Sachin Lawande: forward offering. No, that's that's a great question. And let me try to explain in what we see happening today in the market in China. So it's clearly an earlier adopter market in terms of tech, and they are very keen on bringing the latest and greatest technologies into their vehicles at cost points that were considered prohibitively high by the global OEMs. The global OEMs, by definition, are set on the broader markets, and some of the tech doesn't necessarily carry the same appeal in those regions as it does in China, which, even from a consumer perspective, is a lot more accepting of new tech than many parts of the world.

Sachin S. Lawande: And let me try to explain what we see happening today in the market in China. So it's clearly an earlier adopter market in terms of tech. And they are very keen on bringing the latest and greatest technologies into their vehicles at cost points that are considered prohibitively high by the global OEMs. The global OEMs, by definition, have their sights set on the broader markets. And some of the tech doesn't necessarily carry the same appeal in those regions as it does in China, which, even from a consumer perspective, is a lot more accepting of new tech than many other parts of the world.

Speaker Change: And China. So it's clearly a earlier adopter market in terms of tech and there.

Speaker Change: Very keen on bringing latest and greatest technologies into their vehicles at cost points that were considered prohibitively high by the global Oems the global Oems by definition have their sights set on the broader markets and some of the tech doesn't necessarily carry the same appeal.

Speaker Change: In those regions as it does in China, which even from a consumer perspective as a lot more accepting of new tech than many other parts of the world. So the problem that everyone faces is how do we differentiate and bring the right amount of tech for the greatest markets that is appropriate for the different regions.

Sachin S. Lawande: So the problem that everyone faces is how do you differentiate and bring the right amount of tech for the various markets that is appropriate for those different regions? And that has been the challenge that they have faced. And therefore, they were a little late.

Sachin Lawande: So the problem that everyone faces is how do you differentiate and bring the right amount of tech for the greatest markets that is appropriate for those different regions. And that has been the challenge that they faced, and therefore they were a little late. But the global OEMs recognized this just like we do, and they also recognized that they need help because their approach of building a vehicle for the globe doesn't really work in this kind of a market environment.

Speaker Change: And that has been the challenge that they faced and therefore, they were a little late but the global Oems recognize there's just like we do.

Sachin S. Lawande: But the global OEMs recognize this, just like we do, and they also recognize that they need help because their approach to building a vehicle for the world doesn't really work in this kind of market environment. So that's the first thing.

Speaker Change: And they also recognize that they need help because their approach of building a vehicle for the globe doesn't really work in this kind of a market environment. So that's the first thing now what we see is that in the long run, it's very likely that the German and Japanese Oems will figure out a way to get to that point it might be.

Sachin Lawande: So that's the first thing. Now what we see is that in the long run it's very likely that the German and Japanese OEMs will figure out a way to get to that point. It might take them a little bit longer than we would all like, but they will get there, and our objective is to work very closely with them, to work side by side and bring those types of solutions in China and different solutions for the rest of the world. Now, within China, with the domestic OEMs, we have been gradually increasing our portfolio of domestic OEM customers, and we've been very selective and careful about it.

Sachin S. Lawande: Now, what we see is that, in the long run, it's very likely that the German and Japanese OEMs will figure out a way to get to that point. It might take them a little bit longer than we would all like, but they will get there. And our objective is to work very closely with them to work side by side and bring those types of solutions to China and different solutions for the rest of the world.

Speaker Change: Them, a little bit longer than we would all like but they will get there.

Speaker Change: <unk> has to work very closely with them to work side by side and bring those types of solutions in China and different solutions for rest of the world now within China with the domestic Oems we have been gradually.

Sachin S. Lawande: Now, within China, with the domestic OEMs, we have been gradually increasing our portfolio of domestic OEM customers, and we've been very selective and careful about it. There are a lot of OEMs. We do not expect that most of them will actually be able to sustain their businesses through this very challenging time, but there will be some that have sort of achieved that escape velocity. Geely clearly is one of them.

Speaker Change: Our portfolio of domestic OEM customers and.

Speaker Change: We've been very selective and careful about it but a lot of Oems, we do not expect that most of them will actually.

Sachin Lawande: There are a lot of OEMs we do not expect that most of them will actually be able to sustain their businesses through this very challenging time. But there will be some that have that sort of achieve that escape velocity. Geely clearly is one of them. The issue we're facing with Geely I think is more of it a temporary thing that is particular to the time that we are in with the domestic or demand being a little soft, but we're also trying to expand to other OEMs domestic OEMs in the top five list in China leveraging our technology capability.

Speaker Change: Ill be able to sustain their businesses through this very challenging time, but there will be some that have debt or sort of achieved that escape velocity daily clearly is one of them.

Sachin S. Lawande: The issue we're facing with Geely, I think is more of a temporary thing that is particular to the time that we are in with domestic demand being a little soft, but we're also trying to expand to other OEMs, domestic OEMs in the top five lists in China, leveraging our technology capability. What we have to offer with respect to high-performance compute, the AR, and the AI that I talked about, is probably going to be deployed in the market first in China before it gets deployed anywhere else. And that's where we are investing, and that's where we think we will be able to make some breakthroughs in the coming quarters. Thanks. I appreciate it, Colin. I'll hop back in the queue.

Speaker Change: The issue we are facing with Julia I think is more of it.

Speaker Change:

Speaker Change: Temporary thing that is.

Speaker Change: Particular to the time that we are in with the domestic demand being a little soft, but we're also trying to expand to other Oems domestic Oems in the top five list in China.

Speaker Change: Leveraging our technology capability.

Sachin Lawande: What we have to offer with respect to high performance compute. The AI that I talked about is probably going to be deployed in the market first in China before it gets deployed anywhere else, and that's where we are investing, and that's where we think we will be able to make some breakthroughs in the coming quarters. Thanks; I appreciate the color. I'll hop back in the queue. Thank you.

Speaker Change: We have to offer with respect to high performance compute the a or the AI that I talked about.

Speaker Change: Is probably going to be.

Speaker Change: <unk> deployed in the market first in China before it gets deployed anywhere else and that's where we're investing and that's where we think we will be able to make some breakthroughs in the coming quarters.

Speaker Change: Okay.

Speaker Change: Thanks, I appreciate the color I'll hop back in the queue.

Speaker Change: Thank you.

John Babcock: Our next caller is Bank of America. Hey, this is John Babcock. Just wanted to ask, I guess, quickly. I mean one of the things we're hearing, obviously, from EV OEMs is that they won't kind of keep costs under control. I mean, Ford has talked about this other OEMs. I've talked about it. At a curiosity, I mean, are you getting the sense that OEMs are starting to target allocation products as an opportunity to lower costs, or what are you kind of experiencing on that front? Yeah, great question, and what we see is that the first generation of EVs, they've all realized that they're not competitive to some of the Chinese competitors in terms of the cost, and a lot of it is actually cost that is coming through. And so what we see is a lot more willingness on part of these OEMs to engage in discussions about how to lower the cost.

Operator: Thank you. Our next caller is Bank of America. Hey, this is John Babcock.

Speaker Change: Our next caller is bank of America.

Speaker Change: Okay.

Sachin S. Lawande: Um, just want to ask, I guess, quickly, um, yeah. One of the things we're hearing, obviously, from EV OEMs is that they want to kind of keep costs under control. I mean, Ford has talked about this, and other OEMs have talked about it. Out of curiosity, I mean, are you getting the sense that OEMs are starting to target electrification products as an opportunity to lower costs? Or, you know, what are you kind of experiencing on that front? Yeah, a great question.

Speaker Change: Okay.

John Babcock: John Babcock.

John Babcock: Wanted to ask I guess quickly, yes, I mean, one of the things. We're hearing obviously from EV Oems is that they they want to kind of keep costs under control.

Speaker Change: Florida has talked about this other Oems have talked about it.

Speaker Change: I mean are you getting a sense that that Oems are starting to target electrification products as an opportunity.

Speaker Change: Our costs are.

Speaker Change: What are you kind of experience and on that front.

Sachin S. Lawande: And what we see is that the first generation of EVs have all realized that they're not competitive with some of the Chinese competitors in terms of cost, and a lot of it is actually cost that is coming through design. And so what we see is a lot more willingness on the part of these OEMs to engage in discussions about how to lower the cost. Now, there are certain requirements, I would say, that would necessitate a higher level of cost in, say, the US and Europe versus some of the Chinese vehicles.

Speaker Change: Yeah.

Speaker Change: Great question and.

Speaker Change: You know what what we see is.

Speaker Change: The first generation of Evs.

Speaker Change: Okay. They all realize that they're not competitive to some of the Chinese competitors in terms of.

Speaker Change: The cost and a lot of it is actually a cost that is coming through design.

Speaker Change: And so what we see is a lot more willingness on part of these Oems to engage in discussions about how to lower the cost.

Sachin Lawande: Now, there are certain requirements, I would say, that would necessitate a higher level of cost in, say, in the US and Europe versus some of the Chinese vehicles, but the fact does remain that there is a cost disparity and that they will require updated designs with more modern technology, more integration, to be able to achieve some sort of a parity with China. That's precisely what we see as our differentiation, and we don't want to be just one of the 10 suppliers that can do an OVC, an onboard charger, or a DC to DC converter. We want to be one of the few that can do a three-in-one or a four-in-one or a five-in-one type of a system.

Speaker Change: Now there are certain sort of a requirement I would say that would necessitate a higher level of cost and.

Speaker Change: In the U S and Europe versus some of the Chinese vehicles, but the fact it doesn't mean that there is a cost disparity and that they will acquire updated designs with more modern technology more integration to be able to achieve some sort of a parity with China.

Sachin S. Lawande: But the fact does remain that there is a cost disparity and that they will require updated designs with more modern technology and more integration to be able to achieve some sort of parity with China. That's precisely what we see as our differentiation. We don't want to be just one of the 10 suppliers that can do an OBC, an on-board charger, or a DC to DC converter. We want to be one of the few that can do a three-in-one or a four-in-one or a five-in-one type of system. We started with BMS because that was kind of the most natural stepping stone for us, given the sort of similarity with what we did here to clusters, mainly with ASIL-B.

Speaker Change: That is precisely what we see is as our differentiation and we don't want to be just one of the 10 suppliers that can do in RBC and onboard charger rod's introducing converter. We wanted to be one of the few that can do a three in one not afford and one five in one type of a system, we started with BMS because therefore.

Sachin Lawande: We started with BMS because that was kind of the most natural stepping stone for us given the sort of similarity with what we did here, clusters mainly with ASLB, but clearly where it needs to go to is more integrated solutions, more silicon-driven solutions. Now, the hype has kind of cooled a little bit in terms of the growth expectations, but we all expect we used to grow more steadily, and it will be one of the power trains of choice besides others, and we hope to have our fair share of that business as we go forward.

Speaker Change: What's kind of the most natural stepping stone photos Yolanda.

Sachin S. Lawande: But clearly, where it needs to go is more integrated solutions, more silicon-driven solutions. Now, the hype has kind of cooled a little bit in terms of growth expectations, but we all expect EVs to grow more steadily, and they will be one of the powertrains of choice besides others. And we hope to have our fair share of that business as we go forward. I'm actually not too displeased with the fact that the industry is taking a little bit of time because we would not have been ready.

Speaker Change: Similarity with what we did get clusters, mainly with B.

Speaker Change: B.

Speaker Change: But clearly where it needs to go to is more integrated solutions more silicon driven solutions now the hype is kind of cooled a little bit in terms of the growth expectations, but we all expected to grow more steadily and it will be one of the powertrain of choice Besides others.

Speaker Change: And we hope to have our fair share of that business as we go forward I am actually not too.

Sachin Lawande: I'm actually not too displeased with the fact that the industry is taking a little bit of time because we would not have been ready, and this time really gives us the chance to take a step back and come up to speed on some of the tech. Through the activities that we have, including the joint venture that we have with Shindri.

Speaker Change: As pleased with the fact that the industry is taking a little bit of time, because it wouldn't be a reward.

Sachin S. Lawande: And this time really gives us the chance to take a step back and come up to speed on some of the tech through the activities that we have, including the joint venture that we have with Shindri. Okay, thanks for that.

Speaker Change: <unk> been ready.

Speaker Change: And this time really gives us the chance to take a step back and they will come up to speed on some of the tech.

Speaker Change: The activities that we have including the joint venture that we have at chenier.

Speaker Change: Okay.

Sachin Lawande: Okay, thanks for that. And then also, I mean, one of the things I have noticed, at least, going to car shows and kind of seeing what's out there in the market, it seems like there are several OEMs that are perhaps lagging a little bit in terms of putting in larger displays and also even putting in more advanced technology. And I just want to get your view on what it's going to take to get some of these OEMs to adopt some of the larger, more complex displays and technology. I think it's just a matter of time.

Sachin S. Lawande: And then also, I mean, one of the things I have noticed, at least when I go to car shows and kind of see what's out there in the market, it seems like there are several OEMs that are perhaps lagging a little bit in terms of, you know, putting in, you know, larger displays and also, you know, even putting in more advanced technology. And I just want to get your view on what it's going to take to get some of these OEMs to adopt some of the larger, more complex displays and technology. I think it's just a matter of time. I don't think it's a lack of desire.

Speaker Change: Okay. Thanks for that.

Speaker Change: And then also I mean, one of the things I have noticed that way, it's not going to car shows and kind of seeing what's out there in the market. It seems like there are several Oems that are perhaps lagging a little bit in terms of print and larger displays and also even putting add more beds.

Speaker Change: Technology and I just wanted to get your view on what it's going to take to get some of these Oems to adopt.

Speaker Change: On the larger more complex display is on technology.

Speaker Change: I think it's just a matter of time I don't think it's because of the lack of desire. It's just the execution.

Sachin Lawande: I don't think it's the lack of desire. It's just the execution pace at some of these OEMs is much different than what we would like, for sure, but we see it is going in that direction gradually. It is a matter of cost for some of them. They play in segments that, in some cases, cannot absorb fully the increased cost. And for those reasons, we have also been very focused on driving greater vertical integration of those products. This plays today are very high priced on account of the cost that they take. And our approach is being to try to bring more of that content under Western control.

Sachin S. Lawande: It's just the execution pace at some of these OEMs is much different than what we would like for sure, but we see it is going in that direction gradually. It is a matter of cost for some of them.

Speaker Change: Execution phase at some of these Oems is much different than what we would like for sure, but we see it is going in that direction gradually it is a matter of cost for some of them. They play in segments that in some cases cannot absorb fully the.

Sachin S. Lawande: They play in segments that, in some cases, cannot fully absorb the increased cost. And for those reasons, we have also been very focused on driving greater vertical integration of those products. Displays today are very high priced on account of the cost that they take.

Speaker Change: Least cost.

Speaker Change: For those reasons, we have also been very focused on.

Speaker Change: Driving greater vertical integration of those products displays today are very high priced on account of.

Speaker Change: The cost that they take and our approach has been to try to bring more of that.

Speaker Change: And under Visteon control. So we can take some of the other tiers, two three or four suppliers out of the picture and thereby lowered the total cost to the OEM represents today a very.

Sachin Lawande: So we can take some of their other tier 2, 3, 4 suppliers out of the picture. And thereby, over the total cost to the OEM, represents still a very good opportunity for us. So we often talk about vertical integration as the term for many of these things. Whether there are modules with semiconductors or displays, the idea is to take more of that cost into Vistions control and thereby drive more affordability of those types of technologies. Without that, we'll just remain at the upper layers of this vehicle market, but we believe that the bigger opportunities are in the mass market segment.

Sachin S. Lawande: And our approach has been to try to bring more of that content under Visteon control so we can take some of the other tier 2, 3, 4 suppliers out of the picture and thereby lower the total cost to the OEM is still a very good opportunity for us. So we often talk about vertical integration as the term for many of those things, whether these are modules with semiconductors or displays. The idea is to take more of that cost into Visteon's control and thereby drive more affordability of those types of technologies. Without that, we'll just remain in the upper layers of the vehicle market. But we believe that the bigger opportunities are in the mass market segment. Thanks for that.

Speaker Change: A very good opportunity for us so we often talk about vertical integration as the term for many of these things whether there's a modules that semiconductors are displays the idea is to take more of their cost into visteon, a control and thereby drive more affordability of those.

Speaker Change: The types of technologies without that they'll just remain at the upper layers of the vehicle market, but we believe that the bigger opportunities are in the mass market segments.

Speaker Change: Okay. Thanks, a lot.

John Babcock: Thank you.

Speaker Change: Thank you.

Dan Levy: The next question comes from Dan Levy with Barclays. Hi, good morning. Thank you for taking questions.

Operator: Thank you. The next question comes from Dan Levy with Barker. Hi, good morning.

Speaker Change: The next question comes from Dan Levy with Barclays.

Jerome Rouquet: Thank you for taking questions. Apologize if this has been asked already; I joined late. But maybe you can just talk about the impact of China, not just beyond 2Q, where we know it's a drag there, but how much the weaker Chinese outlook is being factored into the outlook for the remainder of the year. And then maybe we could just talk about, you know, you still expect, or you gave an update earlier in the year on low double-digit growth over the market through 2026.

Dan Levy: Hi, good morning.

Dan Levy: Thank you for taking the questions.

Dan Levy: Apologize if this has been asked, maybe you can just talk to the impact of China, not just beyond 2Q where we know is a drag there, but how much the weaker China outlook is being factored into the outlook for the remainder of the year. And then maybe you can just talk about, you know, you still expect you gave an update earlier in the year on low double-digit growth over market through 2026. Given how we've seen China evolve and the continued pressures, maybe you can talk about what offsets you have there on the China front and the customer mix.

Speaker Change: <unk>.

Speaker Change: <unk> been asked already.

Speaker Change: Joining late.

Speaker Change: But maybe you can just talk to the impact of China, not just beyond <unk>.

Speaker Change: <unk>, where we know it.

Speaker Change: Rag, there, but how much are the weaker China outlook is being factored into.

Speaker Change: The outlook for the remainder of the year and then maybe you can just talk about.

Speaker Change #111: Do you still expect you gave an update earlier in the year on low double digit growth over market through 2026, just given how we've seen China evolve in light of continued pressures maybe you can talk about what offsets you have that are on the on the China front.

Jerome Rouquet: Just given how we've seen China evolve and, you know, the continued pressures, maybe you can talk about, you know, what offsets you have there on the Chinese front and the customer side. Yes, but let me maybe size first the adjustment to the guidance on the sales side. So we've downgraded our sales guidance by about $200 million. About a third of that is coming from volume. We think that a little bit more than another third is coming from China, and then a little bit less than the remaining would be a little bit less than a third comes from the EV mix that we see as well as the program delays that we've got with one customer. So that gives you an idea of the size of China, about a little bit more than a third of our guidance revision on the sales side. Yeah,

Speaker Change: Were mixed.

Jerome Rouquet: Yeah, why don't you start your room and another one? Yes, let me maybe size first the adjustment to the items on the sales side. So we've upgraded, downgraded, sorry, our sales guidance by about 200 million dollars; about a third of that is coming from volume. We think that a little bit more than another third is coming from China, and then a little bit less than the remaining would be less than a third comes from the EV mix that we see as well as the program delays that we've got with one customer. So that gives you an idea of the size of China, but a little bit more than a third of our guidance revision on the sales side.

Speaker Change: Yeah, why don't you start Jerome in Danone. So let me maybe size first D adjustment to that guidance on our sales side. So are.

Speaker Change: We have a great deal.

Speaker Change: Downgraded sorry, our sales guidance by about $200 million about a third of that is coming from volume.

Speaker Change: We think that a little bit more than another third is coming from China, and then a little bit less than the remaining would be a little less than a third comes from.

Speaker Change: Heavy mix that we see as well as the program delays that we've got with one customer. So that that gives you an idea of the size of China about a little bit more than a third of our our guidance revision on the sell side, yes, So and then to the question about.

Jerome Rouquet: Yeah, so and to the question about, you know, if you look beyond 2024, what is the impact of China and the offsets? China, if you look at last year, domestic China was about 15% of our revenue, which has come down this year to, I would say, 11, 12% of our revenue. So we have a couple of points of impact that we have to make up for. And yes, there are offsets, especially on electrification, BMS as well as our cockpit products on EVs that we will have to get into more detail in terms of the vehicle build plans for 2025 and 2026.

Sachin S. Lawande: So and to the question about, you know, if you look beyond 2024, what is the impact of China and the offsets? China, if you look at last year, domestic Chinese was about 15% of our revenue, which has come down this year to, I would say, 11% or 12% of our revenue. So we have a couple of points of impact that we have to make up for. And yes, there are offsets, especially on electrification, BMS, as well as our cockpit products on EVs, that we will have to get into more detail in terms of the vehicle build plans for 2025 and 2026.

Speaker Change: If you look beyond 2024.

Speaker Change: What is the impact of China and the offsets.

Speaker Change: China.

Speaker Change: If you look at last year, our domestic China was about 15% of our revenue which has come down this year.

Speaker Change: 11, and 12% of our revenue.

Speaker Change: So we have a couple of points of impact that we have to make up for.

Speaker Change: And yes, there are offsets, especially on electrification BMS as well as our.

Speaker Change: Cockpit products on Evs that we will have to.

Speaker Change: Get into more detail in terms of the vehicle build plans for 'twenty for about 25 and 26 as you know, even though that has been a lowered expectation of growth of production of those vehicles for regulatory reasons.

Jerome Rouquet: As you know, even though there has been a lowered expectation of growth of production of those vehicles for regulatory reasons, OEMs have to continue to build EVs. Without that, they will be facing very significant penalties, which are going up with each passing here. So we do expect growth. We will have to figure out, you know, exactly what that represents. That will offset some of the negative impact that we see in China.

Sachin S. Lawande: As you know, even though there has been a lowered expectation of growth in production, OEMs have to continue to build EVs, okay? Without that, they will be facing very significant penalties, which are going up with each passing year. So we do expect growth. We'll have to figure out, you know, exactly what that represents that will offset some of the negative impact that we see in China. And then I mentioned two-wheelers and commercial vehicles, perhaps, Dan, before you joined.

Speaker Change: Oems have to continue to build.

Speaker Change: Evs.

Speaker Change: Without that they've developed.

Speaker Change: We are facing very significant penalties, which are going up.

Speaker Change: With each passing year. So we do expect growth will lead to figure it out.

Speaker Change: Exactly what that represents that will offset some of the negative impact that we see in China, and then I mentioned, our two wheelers and commercial vehicles.

Jerome Rouquet: And then I mentioned our two-wheelers and commercial vehicles, perhaps then before we joined. So we have been really focused on it the last couple of years. We have made good progress in winning business and launching products. And that will also be a net positive.

Speaker Change: Perhaps even before you joined so we've been really focused on it. The last couple of years, we have made good progress in winning business and launching products and that will also be a net.

Sachin S. Lawande: So we have been really focused on it the last couple of years; we have made good progress in winning business and launching products, and that will also be a net positive. And then, perhaps for 2026, we are also looking at building our engineering services business. We have a very strong capability in software, and in automotive technologies, both for the cockpit as well as for BMS and electrification.

Speaker Change: Positive.

Jerome Rouquet: And then more perhaps for 2026, we are also looking at building our engineering services business. We have a very strong capability and software automotive technologies both for the cockpit as well as for BMS and electrification. And we are able to now contemplate offering engineering services to support some of the software development plans of OEMs. So those are some of the things that we see as positive that we will have to factor into what we will ultimately then come up for our midterm guidance.

Speaker Change: And then.

Speaker Change: But perhaps for 2026 of the we are also looking at building our engineering services.

Speaker Change: We have a very strong capability in software.

Speaker Change: And automotive pathologists, both for the corporate as well as for BMS and electrification and we are able to now contemplate offering engineering services to support some of the software development plans of Oems. So those are some of the.

Sachin S. Lawande: And we are able to now contemplate offering engineering services to support some of the software development plans of OEMs. So those are some of the things that we see as positives that we will have to factor into what we will ultimately come up with for our midterm guidance. Great, thank you.

Speaker Change: Things that we see as positives that we will have to factor into what we will ultimately then come apart our midterm guidance.

Dan Levy: Great, thank you. I'll just follow up, and again I apologize if I missed this earlier.

Speaker Change: Great. Thank you.

Jerome Rouquet: As a follow-up, and again, I apologize if I missed this earlier, the head of one of your customers just gave some comments on a podcast about, you know, some of the challenges of transitioning to the software-defined vehicle because of these widespread ECUs. And really, the fact that, you know, there's just a proliferation of suppliers that each own their own ECUs and the challenge of getting through OTAs.

Speaker Change: As a follow up and again I apologize if I missed this earlier.

Dan Levy: You know, the head of one of your customers, you know, just gave some comments on a podcast about, you know, some of the challenges of transitioning to the software defined vehicle because of sort of these widespread issues and really the fact that, you know, there's just a proliferation of suppliers that each own their own ECU and the challenge of getting through OTAs. You know, I think this gets to some of the other challenges we've seen for some of the other automakers in making this transition. What is the tone or tenor of the dialogue that you've had with customers on making this transition, knowing that, you know, there's this desire for the OEMs to own this but obviously, then recognizing that they've had some of their own challenges in making the transition and owning their own.

Speaker Change: Yeah.

Speaker Change: One of your customers just give some comments on AR.

Speaker Change: Podcast about some of the challenges.

Speaker Change: Transitioning to the software defined vehicle because it's sort of this is widespread season really the fact that.

Speaker Change: Theres, just a proliferation of suppliers that each own their own unique challenges.

Speaker Change: Getting through OTT.

Speaker Change: <unk>.

Sachin S. Lawande: You know, and I think this relates to some of the other challenges we've seen for some of the other automakers in making this transition. What is the tone or tenor of the dialogue that you've had with customers on making this transition, knowing that there's this desire for the OEMs to own this, but obviously, them recognizing that they've had some of their own challenges in making the transition and owning it on their own? I apologize again if you've already talked to this. No, it's a great question.

Speaker Change: And I think this gets to some of the other challenges we've seen for some of the other automakers in making this transition.

Speaker Change: What is the tone or tenor.

Speaker Change: The dialogue that you've had with customers on making this transition knowing that.

Speaker Change: Yes, there is this desire for the Oems Q1, this but obviously then recognizing that they've had some of their own challenges in making the transition on earnings.

Sachin Lawande: Yeah, I think I've already talked to this. No, it's a great question, and I would say that if you were to go back two years, three years ago, there was a lot of talk about how OEMs would hire these mythical thousands of engineers to do their software themselves and build all of those technologies on their own. That tone has changed dramatically. Now there is a sense of realism in that outlook. They understand that the problem is only getting bigger by every passing quarter. It's not getting smaller, and their capabilities are far from being able to deal with it.

Speaker Change: I apologize if you've already talked to there's no. It's a great question and I would say that if you were to go back two years three years ago. There was a lot of talk about how Oems would hire these mythical thousands of engineers to do their software themselves and build all of those technologies on their own.

Sachin S. Lawande: And I would say that if you were to go back two years, three years ago, there was a lot of talk about how OEMs would hire these mythical thousands of engineers to do their software themselves and build all of those technologies on their own. But that tone has changed dramatically. Now there is a sense of realism in that outlook. They understand that the problem is only getting bigger with every passing quarter. It's not getting smaller, and their capabilities are far from being able to deal with it.

Speaker Change: That bonus changed dramatically now there is a sense of realism in that outlook.

Speaker Change: Understand that the problem is only getting bigger by every passing quarter.

Speaker Change: It's not getting smaller and their capabilities are far from being able to deal with it so.

Sachin Lawande: So what is clear from even some of the things that you have witnessed in terms of OEMs trying to license vehicle platforms from startup OEMs, there's a clear indication that they cannot do it themselves. There's no reason to do it otherwise. Right. And yet those things are only a half step because even if you license, you're getting a snapshot of point in time while the industry keeps evolving. So we think that this problem cannot be easily resolved, especially for legacy traditional OEMs that have many brands, different segments that they cover. It's not a simple thing as to say, let's build one software that will cover everybody, because that's not realistic.

Sachin S. Lawande: So what is clear from even some of the things that you have witnessed in terms of OEMs trying to license vehicle platforms from startup OEMs, that's a clear indication that they cannot do it themselves. There's no reason to do it otherwise, right?

Speaker Change: So what what is clear from even some of the things that you have witnessed in terms of Oems trying to license vehicle platforms from startup Oems, that's a clear indication that they cannot do it themselves.

Speaker Change: There's no reason to do it otherwise right and yet those things are only a half step because even if you license you're getting a snapshot point in time, while the industry keeps evolving.

Sachin S. Lawande: And yet, those things are only a half step because even if you license, you're getting a snapshot, a point in time, while the industry keeps evolving. So we think that this problem cannot be easily resolved, especially for legacy traditional OEMs that have many brands, different segments that they cover. It's not a simple thing as to say, let's build one software platform that will cover everybody, because that's not realistic.

Speaker Change: So we think that this problem cannot be easily resolved, especially for legacy traditional Oems that have many brands different segments that they cover.

Speaker Change: Not a simple thing is to say, let's build one software doesn't recover everybody because thats more realistic.

Sachin Lawande: So the problem isn't becoming smaller; it's growing, and that's what we see as our opportunity.

Sachin S. Lawande: So the problem isn't becoming smaller; it's growing, and that's what we see as our opportunity. Great, thank you. The last question comes from Wolf Riesling.

Speaker Change: So the problem isn't becoming smaller is growing and thats, what we see as our opportunity.

Sachin Lawande: Great.

Operator: Thank you. The last question comes from Wolf Research. Oh, great.

Speaker Change: Great. Thank you.

Speaker Change: And the last question comes from Wolfe Research.

Operator: Oh, great. Thanks so much for taking my question. This is Shreyas Patil.

Speaker Change #103: Oh, great. Thanks, so much.

Operator: Thanks so much for taking my questions, Mr. Rice Patel. Maybe just one first of all, when I look at your bookings overall, 3.1 billion so far for this year, on track to be over 6 billion for the full year. I looked back over the last several years, even going back to 2017, 2018. You've been booking at around $5 to $7 billion a year. You know, we tend to think about, tend to think that if you're consistently booking at that level, you should eventually get to that level of revenue. I understand volume has been less than expected in recent years; obviously, we had COVID.

Speaker Change: My question is with <unk>.

Sachin S. Lawande: Maybe just one, first of all, when I look at your bookings overall, $3.1 billion so far for this year, on track to be over $6 billion for the full year. I look back over the last several years, even going back to 2017, 2018, you've been booking at around $5 to $7 billion a year. We tend to think that if you're consistently booking at that level, you should eventually get to that level of revenue.

Speaker Change: Sure.

Speaker Change #108: Maybe just just one first of all when I when I look at.

Speaker Change #104: Your bookings overall $3 1 billion so far for this year on track to be over $6 billion.

Speaker Change: Full year.

Speaker Change #101: Look back over the last several years going back to 2017 2018, you've been booking at around 5% to $7 billion a year.

Speaker Change: We tend to think about tend to think that if you are consistently booking at that level you should eventually get to that level of revenue I understand volume has been less than expected in recent years, obviously, we had COVID-19, but how do we interpret these bookings and what they mean for where where revenue will go for visteon in the coming years.

Sachin S. Lawande: I understand volume has been less than expected in recent years, obviously we had COVID, but how do we interpret these bookings and what do they mean for where revenue will go for Visteon in the coming year? Yeah, Shreyas, I would say that, in general, there are lots of details, but in general, that is the right way to think of it, right?

Sachin Lawande: But how do we interpret these bookings and what they mean for where revenue will go for this beyond in the coming years? I would say that in general, again, there are lots of details, but in general, that is the right way to think of it. But, as you know, there have been a lot of changes somewhat disruptive, including the latest, what we are seeing in China, that does affect that linear sort of thinking about how the revenue should rise up to the booking level. The biggest impact, if you go back, actually has been the volume expectation.

Chris: Yes, Chris.

Chris: Say that in general again, there are lots of details, but in general that is the right way to think of it.

Sachin S. Lawande: But as you know, there have been a lot of changes, somewhat disruptive, including the latest what we're seeing in China, that does affect that linear sort of thinking about how revenue should rise up to the booking level. The biggest impact, if you go back, actually has been the volume expectation. Okay, so if you think about even 2019 to 2023, our customers' vehicle production, and I'm not talking about outlook here; I'm talking about actuals. It went down by 10%.

Speaker Change: But as you know there have been a lot of changes.

Speaker Change: Somewhat.

Speaker Change: Disruptive, including the latest what we're seeing in China that does affect that linear sort of thinking about how that revenue should rise up to the booking level. The biggest impact. If you go back actually has been the volume expectations.

Sachin Lawande: Junk. So if you think about even 2019 to 2023, our customers' vehicle production, and I'm not talking about outlook here, I'm talking about actuals, went down by 10%. So the 10% drop, we have to know the makeup for, and our revenues increase 30% over that period. So if you were to have even a flat line, and mind you, we were actually in the bookings, because that's what the customers gave us, the expectation was that there would be a steady 2 to 3% production growth, right. So if you really look at where we should have been versus where we were at over that four-year period, it's a swing of almost 17, 18% in terms of production alone.

Speaker Change: So if you think about even 2019 to 2023 or.

Speaker Change: Our customers' vehicle production and I'm not talking about outlook here I am talking about actuals.

Speaker Change: Went down by 10%.

Sachin S. Lawande: So the 10% drop we had to more than make up for, and our revenues increased 30% over that period. So if you were to have even a flat line, and mind you, we were actually in the bookings because that's what the customers gave us, the expectation was that there would be a steady 2-3% production growth. Right, so if you really look at where we should have been versus where we were over that four-year period, it's a swing of almost 17, 18% in terms of production alone.

Speaker Change: So the 10% drop we had been more than make up for and our revenues increased 30% over that period.

Speaker Change: So if you were to have even a flat line and mind you we were actually in the bookings because that's what the customers gave us the expectation was that there would be a steady 3% production growth.

Speaker Change: Right. So if you really look at where we should have been versus where we were at over that four year period.

Speaker Change: It's a swing of almost 17, 18% in terms of production alone.

Sachin Lawande: Now, if you were to add that to our 2023 revenue, you would have closer to where we would have been if you were just to assume that lineage of revenue growth. So the biggest impact of the LVT, and then there have been some other smaller impacts that have created a little bit of headwind. Now what's really good here at Visteon is that we have been adapting to this market dynamics and finding opportunities for growth, whether it is looking at OEMs that have not been part of our top 10 list, or the 2-wheeler market, or the commercial vehicle market, and engineering services.

Sachin S. Lawande: Now if you were to add that to our 2023 revenue, we would have been closer to where we would have been if you were just to assume linear revenue growth. So the biggest impact has been LVP, and then there have been some other smaller impacts that have created a little bit of a headwind.

Speaker Change: If you were to add that to our 2023 revenue.

Speaker Change: Would have been closer to where we were.

Speaker Change: It would've been if you were just to assume that linear.

Speaker Change: Our revenue growth so the biggest impact of millions VP and then there have been some other smaller impacts that have a career.

Speaker Change: Got it.

Speaker Change #100: A bit of headwind now.

Speaker Change #100: Really good here at Visteon is that we have been adapting.

Sachin S. Lawande: Now, what's really good here at Visteon is that we've been adapting to this market dynamics and finding opportunities for growth, whether it is looking at OEMs that have not been part of our top 10 list, or the two-wheeler market, or the commercial vehicle market, and engineering services. So we see plenty of opportunities where we can grow profitably in this time period, and to me, that's part of what we do. The market is the only place where you can find them.

Speaker Change: Through this market dynamics and finding opportunities for growth whether it is looking at Oems that have not been part of our top 10 list.

Speaker Change: The tubular market or the commercial vehicle market and engineering services. So we see plenty of pools that we can grow profitably in this time period that to me.

Sachin Lawande: So we see plenty of pools where we can grow profitably in this time period. That, to me, that's part of what we do. The market is the market; we have to react to it, and I think we have done a pretty good job of positioning the company for growth, even with all of the things that I mentioned.

Speaker Change: Out of what we do.

Sachin S. Lawande: We have to react to it, and I think we have done a pretty good job of positioning the company for growth even with all of the things that I mentioned. Okay, that's helpful. And then maybe just, Jerome, just a quick question on: I believe you mentioned that the decrementals on the lower revenue are about 10%, which sounds quite low, but just maybe if you could help explain what some of the offsets are on that. Yes, absolutely. So we've been performing better than anticipated in the first half, and Q2 was a demonstration of that.

Speaker Change: The market is the market, we have to react to it and I think we've done a pretty good job of positioning the company for growth, even with all of the things that I mentioned.

Jerome Rouquet: Okay, that's helpful. And then maybe just a quick question on, I believe you mentioned that the decrementals on the lower revenue is about 10%, which sounds quite low, but just maybe if you can explain what some of the assets are on that. Yes, absolutely. So we've been performing better than anticipated in the first half. Q2 was a demonstration of that. So we expect this performance to continue; that will obviously help the decrementals as we reduce our sales for the guidance. We also are helped by these commercial one-timers that were presented about 50 basis points for Q2.

Speaker Change #106: Okay. That's helpful. And then maybe just around just a quick question on I believe you mentioned that the decrementals on the lower revenue is about 10%.

Speaker Change #110: Sounds quite low, but just maybe if you could help us explain what some of the offsets are on that yes.

Speaker Change #113: Yes, absolutely yeah, so we've been performing better than anticipated in the first half Q2 was a demonstration of that so we expect this performance to continue.

Jerome Rouquet: So we expect this performance to continue. That will obviously help the decrementals as we reduce our sales for the guidance. We are also helped by these commercial one-timers that represented about 50 basis points for Q2. So the two combined, as well as a little bit of revision of our spending on SGN and engineering as we go forward, will help us to get to 10% as opposed to having the 20% that we normally have.

Speaker Change #107: That will obviously help the decrementals as we reduce our sales for the guidance. We also are helped by this commercial one timers that represented about 50 basis points for Q2, so the two combined as well as a little bit of a revision of our spending on SDN.

Jerome Rouquet: So the two combined, as well as a little bit of revision of our spending on SGNN engineering as we go forward, will help us to get to 10% as opposed to have the 20% that we normally have.

Speaker Change #112: <unk> engineering as we go forward will help us to get to 10% as opposed to have the 20% that we normally have.

Operator: Okay, great, thanks. Thank you.

Jerome Rouquet: Okay, great, thanks. Thank you. This concludes our earnings call for the second quarter 2024. Thank you everyone for participating in today's call and your ongoing interest in Visteo. Thank you. This concludes Visteon's earnings call for the second quarter 2024 results. You may now disconnect. Please wait, the conference will begin shortly.

Speaker Change #102: Okay, great. Thanks.

Speaker Change #109: Thank you.

Speaker Change #102: Okay.

Operator: This concludes our earnings call for the second quarter, 2024. Thank you everyone for participating in today's call, and your ongoing interest in this year. Thank you.

Speaker Change #105: This concludes our earnings call for the second quarter 2024. Thank you everyone for participating in today's call and your ongoing interest in Visteon.

Speaker Change: Thanks.

Operator: This concludes this year on second quarter, 2024 results earning call. You may now disconnect.

Speaker Change: This concludes <unk> second quarter 2024 results earnings call you may now disconnect.

Operator: Please wait; the conference will begin shortly.

Speaker Change: Please wait the conference will begin shortly.

Speaker Change: [music].