• Revenue: $3.87 billion for the full year 2024.
• Adjusted EBITDA: Record $474 million for 2024, with a margin of 12.3%.
• Adjusted Free Cash Flow: Record $300 million for 2024.
• New Business Wins: $6.1 billion in 2024.
• Adjusted EBITDA Margin Improvement: 130 basis points increase compared to last year.
• Q4 Sales: $939 million.
• Q4 Adjusted EBITDA: $117 million, with a margin of 12.5%.
• 2025 Sales Guidance: $3.65 billion to $3.85 billion.
• 2025 Adjusted EBITDA Guidance: $450 million to $480 million, with a margin of 12.4% at the midpoint.
• 2025 Adjusted Free Cash Flow Guidance: $175 million to $205 million.
• 2027 Sales Target: $4.15 billion.
• 2027 Adjusted EBITDA Margin Target: 13.3%.
• 2027 Adjusted Free Cash Flow Target: $230 million.

• Warning! GuruFocus has detected 5 Warning Signs with VC.

Release Date: February 18, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Visteon Corp (NASDAQ:VC) delivered strong financial performance in 2024 with robust sales of $3.87 billion, record adjusted EBITDA of $474 million, and record adjusted free cash flow of $300 million.
• The company secured $6.1 billion in new business wins in 2024, driven by strong demand for large displays, SmartCore, and digital cluster products.
• Visteon outperformed the market in the Americas by double digits and in Europe by mid-single digits, driven by digital cluster and electrification product launches.
• The company achieved significant progress in diversifying its customer base, with notable wins from OEMs in Japan, Korea, and India, including Toyota and Maruti Suzuki.
• Visteon introduced innovative products like the high-performance SmartCore HPC and onboard charger and DC-DC converter, expanding its product portfolio into fast-growing market segments.

Negative Points

• Visteon faces headwinds in China, with sales underperformance due to market share shifts towards domestic OEMs and challenges faced by global OEMs.
• The company anticipates a mid-single-digit decline in customer vehicle production in 2025, impacting sales growth.
• Visteon expects electric vehicle sales in the US to remain flat in 2025 due to tariffs and incentive uncertainties, affecting BMS sales.
• The company experienced a lower level of customer quoting activity in 2024, particularly in Europe and North America, impacting new business wins.
• Visteon's sales outlook for 2025 is flat year-over-year, with headwinds from lower customer vehicle production, recoveries, and foreign exchange.

Q & A Highlights

Q: Can you discuss the growth opportunity with Asian OEMs like Toyota and how significant it is for driving growth through 2027? A: Mark Delaney, Goldman Sachs - Analyst: Asian OEMs have been underrepresented in our revenue, primarily in Japan and India. Historically, our focus was on China. As the market shifted, we made it a strategic initiative to grow business with these OEMs outside China. Currently, they represent mid- to high single-digit levels of our revenue, and by 2027, we expect this to almost double, representing a significant growth opportunity.

Q: What are the expectations for customer mix and performance in China for 2025 and beyond? A: Mark Delaney, Goldman Sachs - Analyst: In 2025, the negative customer mix is driven by large customers like Ford, GM, and Mercedes reducing production. In China, global OEMs have lost market share, but we are developing business with domestic OEMs like Zeekr and Dongfeng. We expect our sales in China to be at a low point in 2025, with improvement starting in 2026.

Q: How are SmartCore bookings tracking, and what is the outlook for multi-domain controllers? A: Sachin Lawande, President, Chief Executive Officer, Director: SmartCore bookings are inherently lumpy due to their complexity. In 2024, we saw lower customer quoting activity, but expect it to pick up in 2025. Multi-domain controllers are integrating more functions, but full integration with ADAS will take longer. We expect SmartCore to continue growing, driven by demand for integrated cockpit domain controllers.

Q: What are the main drivers for the revised 2027 sales target, which is over $1 billion lower than previously expected? A: Sachin Lawande, President, Chief Executive Officer, Director: The main drivers are the market changes in China, reduced expectations for electrification, particularly BMS, and lower production expectations from our customers. These factors account for about 70-80% of the revised target.

Q: Can you elaborate on the free cash flow outlook for 2025 and the impact of working capital benefits from Q4 2024? A: Jerome Rouquet, Chief Financial Officer, Senior Vice President: The strong cash flow in Q4 2024 was driven by good collections, timing of engineering recoveries, and inventory reductions. These are not expected to recur in 2025. We anticipate a 40% conversion of EBITDA to free cash flow in 2025, consistent with recent quarters.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.