Yahoo Finance Visteon Corp (VC) Q1 2024 Earnings Call Transcript Highlights: Strong Performance Amidst Market ...
Sales: $933 million, driven by strong demand for digital clusters and cockpit domain controllers.
Adjusted EBITDA: Increased to $102 million, margin of 10.9%.
Adjusted Free Cash Flow: $34 million, conversion ratio of 33%.
Share Repurchases: $20 million deployed towards share repurchases.
New Business Wins: $1.4 billion across 14 OEMs.
Product Launches: 26 new products launched.
Growth Over Market: Returned to positive at 2%.
Release Date: April 25, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q & A Highlights
Q: Hi, good morning. The growth over market in the first quarter, I think you touched on it. You know, there were some issues with PROGRAM roll off? And then maybe any more color on sort of the growth of a market that we saw in 1Q? And what is the line of sight and that you have to the growth of market ramp that you're expecting in the remainder of the year. Are there key launches that you would flag key regions that you expect to reverse? A: Thanks, Dan. It's Oklahoma. I'll take that question. So we had signaled at the end of the year that we would be seeing a progressive ramp-up of growth of the market during 2024, and we returned to a positive growth market in Q1, as expected, still low 2%. And there are a few reasons for that. We still have got some remains of the air pocket that we talked about in Q4.
Q: And just to clarify that you're reiterating your sales guidance, the production assumption is slightly weaker. So I assume that the low double digit, the 10 to 12 points of growth over market guidance that's still intact. A: That is correct. As I said, Q1 really developed pretty much as expected. We had highlighted that sales would be lower sequentially as well, slightly year-over-year. We do see we did see a slight deterioration in customer production, 1% versus prior guide, largely coming from China. And at the same time, we've heard there's a lot of comments in the press around China incentives that could potentially help the second half of the year. So at this stage, it's absolutely in line with what we had talked about two months ago.
Q: As a follow-up I wanted to ask about China, and I think we're all well aware of negative mix issue that has really been an issue for the entire supply base. Maybe you can you talked about increasing your mix with the domestic. Maybe you can give us any further color on the line of sight that you have and overcoming the mix issues competitively. Are you well positioned. Is it the right domestics that you have in China? So just any more voiceover on China that can give us some confidence and on the nerve issues being overcomes Yes, A: Dan, this is Sachin. I'll take that one. So maybe a little bit of context would be helpful. So if you go back a couple of years, the global OEMs operating in China had a larger market share. But since 2022, that share has been shifting in favor of domestic OEMs and it really accelerated in 2023 so when you look at Q1 on the share mix was 60% and 40% in favor of the domestic OEMs in China as compared to 55% for domestic OEMs in on a full year 2023.
Q: Good morning. Okay, confirm here with the lower production than sort of what you thought does that are you implying you're sort of more comfortable at the lower end of your of your guidance range? Or or is there some growth over market offsets that keeps you comfortable with either the mid or the high end potentially? A: Thanks, Joe. At this stage, we're not changing our guidance for 2024. We're still giving the range. As I mentioned, there's a slight deterioration we are watching and looking at how the markets are going to develop. It's very early two to to change anything I would say. So pretty happy with the way things developed in Q1. We've got high expectations for Q2 with sales slightly over 1 billion, and then I will take it one quarter at a time.
Q: And I guess just to quickly follow up on that, given given some of these some customer changes and sort of share shifts, like I think when you guided last quarter, you also sort of gave a like 8% base sales growth. And I'm wondering if you actually feel maybe more comfortable with that target than with the growth over market target, just considering some of the customer shifts, particularly in China, is that is it fair? A: You are that's a good point. And, you know, when we talk about growth in the market. It also brings into question a lot of the production dynamics that are hard to necessarily predict. But what's really more important for us has been our absolute best sales growth, which are for our 2026 target, we needed to hit 8% kegger and sales.
Q: Okay. And maybe one quick one on just BMS., it sounds like that was helpful this quarter. Does that and just shipping of IBMS. as system sort of differ maybe from some of the other products, like is that shipped more more in advance just given some of the work that needs to be done on the pack. And I think you also mentioned started the SOP for the second VMS customer was this quarter. So how do you expect that to ramp? And is the third still on track for later this year as well yet, but you're absolutely correct. A: So the battery manufacturing challenges that Williams has faced some that have been well-publicized as caused the shipping pattern to be pulled up a bit ahead of the launches. So we typically supply to the battery pack of plants, which it takes a few, maybe even sometimes months ahead of the vehicle launch. So that's there's definitely one of the dynamics.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
