visteon transformation and development

Visteon Confidential

Visteon Transformation and DevelopmentNovember 2017

Luke Lu

Managing Director

Visteon China

2

1 2 3History Today Tomorrow

Agenda

3


Agenda

Visteon History: 2000 - 2014

Significant Transformative Actions Completed; Focus on Growth

Spun off

from Ford

Transferred 23

U.S. plants to Ford

Implemented three-year restructuring

plan

Filed for

Chapter 11

2000 2005 2006 2009 2010 2011

Emerged successfully

Feb2013

Dec2013

Jan2014

Integrated global climate

business; created HVCC

Nov2013

Consolidated Yanfeng

electronics operations

Substantially completed sale

of YFV interiors JV

Announced acquisition of JCI

Electronics

Signed agreements to exit majority of

remaining Interiors

Nov2012

Announced value-

creation plan

May2014

July2014

Completed acquisition of JCI

Electronics

Aug2014

Closed acquisition of Thermal &

Emissions product line of Cooper

Standard

Completed divestiture of

majority of Interiors

Nov2014

Dec2014

Signed agreement to sell 70%

stake in HVCC for $3.6 billion

Visteon Transformation

We have successfully addressed each component of the transformation plan

Contribute Climate business to Halla,

create HVCC

Increased value of HVCC ownership

Sell Interiors business

Address Electronics’ strategy and

market position

Monetize YFV, over time….and at

right value

Rightsize corporate functions in

response to actions above

Contributed $800 million toward share

repurchases ($375 million of

additional authorization remains)

Strengthen balance sheet

– Pension actions

– Debt refinancing

2012 Plan The New Visteon

• Ranked a top-five Tier One connected car

supplier by ABI research (2016)

• The largest Tier One automotive supplier

focused exclusively on the fast-growing

cockpit electronics segment

• Developing breakthrough approach to

autonomous driving, applying artificial

intelligence for object detection and

classification

Integrate JCI Electronics

Finalize sale of majority of

Interiors

Continue to diversify HVCC

customer base

Continue to decentralize

admin functions

2014

6


Agenda

• Company

• Technology ( Trend + Product)

• Cluster+ Infotainment+ SmartCore +

Autonomous Driving

• Finance Performance

Visteon Today and Shareholder Value Creation

A global leader in automotive cockpit electronics and software7

(1) Peer group includes average returns of Autoliv, Continental, Delphi and Gentex.

Manufacturing locations22

10,000 Employees

18 Countries

Technical centers18

$3.1B Annual sales (Electronics)

Company headquartersVan Buren Township,

Michigan, United

States

December

2013May

2015

July

2016

October

2017

Visteon

160%

S&P 500

51%

Peer

Group (1)

47%

Long-Term Total Shareholder Return (12/31/13 – 10/30/17)

New Visteon Mission and Mission

8

Today, we are focused on the new Visteon

Our Mission

We aim to be the foremost leader in driver

information and connected infotainment

solutions that enables a rich driving experience

in a safe and convenient manner.

We will achieve this through relentless pursuit

of excellence in electronics and software

technology as well as global execution.

Our Vision

A top-three cockpit electronics player delivering

a rich, connected cockpit experience for every

car from luxury to entry.

New Visteon Cultural Principles

9

Today, we are focused on the new Visteon

A broad and diversified customer base

10

Global automotive technology company with more than 25 customers worldwide

Industry-Leading Cockpit Electronics Product Portfolio

11

Only pure-play in automotive cockpit electronics

Source: Rankings from 2016 ABI Research and IHS Markit.

Instrument

clusters

Head-up

displays

Displays InfotainmentAudio ConnectivityCockpit domain

controllers

Visteon Market Position

Top 5 Connected car

Tier 1 supplier

#2Rank

Instrument cluster displays

#3Rank

Head-up displays

#2Rank

Automotive display systems

Center stack displays

Industry in Transformation

Cockpit electronics growing faster than underlying vehicle production

12

2017 2018 2019 2020 2021 2022

Cockpit Electronics vs.

Global Vehicle Production

Cockpit Electronics

Global Vehicle Production

9.1% CAGR

2.1% CAGR

Projections based on latest IHS Markit data.

~$32B

in 2017Instrument

Clusters

22%

Audio and

Infotainment

51%

Displays

19%

HUD

2%Telematics

6%

2017 Market Segmentation

Connected

car

ADAS/AD Electrification

Key Drivers

Cockpit Electronics

Key Trends in Instrument Clusters

13

Visteon leading industry transition toward digital clusters

40%

21%

56%

66%

4%13%

2017 2022

CAGR

20222017

27%

6%

-10%

Hybrid

Analog

All

Digital

95.1M Units

105.7M

Units

• All-digital is fastest-growing segment of clusters

• All-digital clusters expanding from luxury to mass market vehicles

• Visteon awarded $2.6 billion in YTD new business wins

• Improved global market share to #2 position from #3 in 2015

All-Digital Cluster

Hybrid Cluster

Analog Cluster

Key Trends in Audio/Infotainment

14

Display Audio and Embedded Infotainment

offer significant growth opportunity for Visteon

• Market trending toward Display Audio systems from traditional audio

• Visteon’s capabilities in Display Audio strengthened by AllGo acquisition

• Embedded infotainment transforming into “mobile app platform”

• Visteon awarded $1.5 billion in YTD new business wins; including first

Phoenix™ win

Embedded

Infotainment

Display Audio

AM/FM/BT

Audio

55%

30%

15%

35%

30%35%

20222017

5%

22%

-10%

95.1M

Units

Display

Audio

Audio

Embedded

Infotainment

105.7M

UnitsCAGR

Visteon’s Infotainment Platform for Connected Car

15

Seamless upgrade path from Display Audio to Embedded Infotainment

App developer

friendly

Highly

secure

Fully

upgradeable

Automotive Base Components

Cyber

Security

Web

RuntimeProjection

Mode

Common API and JavaScript

Navi

Engine

Complete “out-of-the-box”

solution to OEMs for Display Audio

Extend with pre-integrated third-party

software to mid/high infotainment

Offers “write once, run on many” for

infotainment apps

First purpose-built infotainment

OS and tools

ECU Consolidation in Automotive Electronics

16

Visteon offers industry-first cockpit domain controller; will launch AD controller

Today Tomorrow

Reduces cost, weight, and power consumption

ECUs in car

30 - 100+ Consolidation of ECUs into domain controllers

Leverages silicon and software innovations

Visteon’s Cockpit Domain Controller

17

Market introduction of first SmartCore™ system in early 2018 with European OEM

Cluster HUD Infotainment

SmartCore™

Cockpit Domain Controller

*Source: Roland Berger study, July 2015.

4 SmartCore™ business wins to date

$175 Expected per vehicle savings*

Integration of instrument cluster, infotainment, HUD

and driver monitoring

First cockpit domain controller in the industry

1 awar

Recognized with Innovation Award by

German Center of Automotive Management

Key Trends in Autonomous Driving

18

PerceptionSensors ActuationPath Planning

HD maps, real-time middleware for

algorithms

Scalable high performance compute system

Vehicle Integration

CNN

algorithms RL algorithms

Radar 24GHz to 76-81GHz

2-D to 3-D

Technology Landscape Autonomous Driving Controller

ProcessorsCPU to GPU

Emerging AI processors

LiDARMechanical to solid state

Higher resolution at <$250

SoftwareConventional to machine learning

High safety relevance (ASIL)

Neural network

object detection

Reinforcement

learning

Camera, Radar,

LiDAR,

Ultrasonic

CAN, Ethernet

Centralized processing of sensor data

Key Requirements of Autonomous Driving Controller

Scalable and CPU agnostic hardware

High-performance middlewareAdvanced software tools for algorithm

development

Visteon’s DriveCore™ Technology Platform

19

StudioRuntimeCompute

Communication

s

Framework

APIs

Complete technology platform

Middleware and tools for rapid algorithm

developmentFaster time to market with third-party algorithms

From 500 GFLOPS to

20 TFLOPSAdvanced thermal management

PerceptionSensors ActuationPath Planning Vehicle Integration

CNN

algorithms RL algorithms

Autonomous Driving Controller

Camera, Radar,

Lidar, Ultrasonic

CAN, Ethernet

Runtime

Compute

Record YTD New Business Wins and Backlog

20

Business accelerating in faster-growing product segments across all regions

BacklogNew Business Wins

Note: New business wins represent booked lifetime revenue.

$4.6BInstrument

Clusters

58%

Infotainment

22%

Audio

11%

Displays

4%

HUD 2%

Telematics 1%Other 2%

$4.6B

Europe

20%China

27%

Other

Asia

22%North

America

29%

South

America

2%

Highlights

Phoenix™First win for Display Audio

system in North America

Backlog growing faster than

cockpit electronics market

11% Y/Y

growth in

backlog

Audio/Infotainment NBWs of

$1.5B, more than 2x prior year

12% Y/Y

growth in

NBWs

FY 2015 FY 2016 YTD2017

$16.5B

$14.9B

$18.0B

Visteon China

Domestic Sales

Exceptional Performance in China

Benefiting from sales and new business wins in China

Industry-leading footprint to

support automaker localizationVisteon China Domestic

New Business Wins

China*

Manufacturing Changchun x2,

Chongquing x3,

Shaoxing x2,

Shanghai x2, Xuzhou

Engineering Shanghai x3, Nanjing

* Operations either Visteon wholly owned or through joint ventures

$273 $315 $370

$420 $388

$373

$692 $704

$743

FY2015

FY2016

FY2017FCST

$0.9

$1.8

$1.2

$0.2

$0.2

$0.8

$1.1

$2.0 $2.0

FY2015

FY2016

FY2017FCST

21

USD ($M) USD ($B)

Strong Performance in China

• Visteon full-year China domestic sales expected to grow double digits

• Continue to outpace industry growth in world’s largest automotive market

• Winning new business with global and domestic Chinese automakers

22

23


Agenda

Visteon Future Direction

Visteon Corporation proprietary – Citi 2017 Global Technology Conference 24

Leader in centralized computing technology

Autonomous Driving ComputerCockpit Domain Controller

Sensors Sensors

Sensors

Cloud

DriveCore™

Autonomous Driving

Computer

Artificial

Intelligence

SmartCore™

Cockpit Domain

Controller

Augmented

Reality V2X

Head-Up

Displays

Instrument

Clusters Displays

Phoenix™

Infotainment

Visteon

Technologies

Visteon

Products

Computer

Vision

Cyber

Security

Driver

Monitoring

Our Technology Roadmap

Visteon Corporation proprietary – Citi 2017 Global Technology Conference 25

2015

Launched domain

controller for

cockpit

2017

Launch next-

generation

infotainment

2018

Launch autonomous

driving domain

controller platform

2019

Launch next gen

for cockpit and

autonomous driving

Strategic Imperatives

26

Strengthen Core

Business

Develop Level 3/4

Autonomous Driving Platform

Accelerate China

Business

• Deliver higher sales and improve margins to ~11.5%

• Drive new business wins to achieve combined ~$12 billion target for 2017/2018

• Continued focus on operational excellence

• Achieve double-digit China sales growth in 2017

• Introduce SmartCoreTM and PhoenixTM technologies in China

• Leverage joint venture relationships to drive adoption of new offerings

• Leverage SmartCoreTM

technology platform for sensor fusion

• Early engagement with selected customers

• Launch technology platform at CES 2018