Visteon Announces 2021 Financial Results and 2022 Outlook
VAN BUREN TOWNSHIP, Mich., Feb. 17, 2022 — Visteon Corporation (NASDAQ: VC) today reported fourth quarter and full-year 2021 financial results that exceed its previous outlook. Highlights include:
- $786 million Q4 net sales; 15% growth-over-market
- Net income of $31 million in Q4 or $1.09 per diluted share
- Adjusted EBITDA of $92 million, 11.7% of sales in Q4
- Third electrification customer added in Q4
- $102 million net cash position at year end
Fourth Quarter Financial Results
For the three months ending December 31, 2021, Visteon reported net sales of $786 million, equal to prior year and representing 15% growth-over-market as Visteon’s top customers' vehicle production decreased 15% year over year. The sales performance was driven by the ramp up of recently launched products and favorable pricing.
Gross margin in the fourth quarter was $99 million, and net income attributable to Visteon was $31 million. Adjusted EBITDA, a non-GAAP measure as defined below, was $92 million for the fourth quarter of 2021 or 11.7% of sales, a very strong performance despite the global semiconductor shortages. Adjusted EBITDA benefited from robust sales, favorable pricing, lower net engineering, and a one-time customer recovery.
Full-Year Financial Results
For the year ending December 31, 2021, Visteon reported net sales of $2,773 million, a 7% increase compared to prior year when excluding the favorable impact of currency. Compared to Visteon's customer production, which decreased 2%, Visteon's sales outperformed its customer production by nine percentage points.
Gross margin in 2021 was $254 million, and net income attributable to Visteon was $41 million. Adjusted EBITDA was $228 million in 2021 or 8.2% of sales, driven by higher sales, favorable pricing, lower net engineering, partially offset by higher costs related to the global semiconductor shortages.
Cash from operations for the twelve months ended December 31, 2021 was $58 million and capital expenditures were $70 million. Adjusted free cash flow, a non-GAAP financial measure as defined below, was $22 million for the full year. Adjusted free cash flow benefited from strong adjusted EBITDA and continued capital discipline, partially offset by an increase in inventory due to uneven customer production schedules.
New Business Wins and Product Launch Highlights
The company won $5.1 billion of new business in 2021. Visteon launched 17 new products in the fourth quarter, 43 in total for 2021, which continues to build the foundation for the company’s sustainable market out-performance.
Visteon demonstrated its leadership in cockpit electronics with wins across its key product categories, including a win for a large and complex curved multi-display for a premium brand with a Global OEM and a follow-on advanced SmartCore™ cockpit domain controller win. Additionally, Visteon is proud to announce its third customer win for electrification that will launch on three premium vehicle brands of a global OEM starting in 2024.
Robust Growth in 2022
"In 2021, the Visteon team continued to build the foundation for sustainable growth driven by the transformation of our product portfolio," said President and CEO Sachin Lawande. "In 2022, we anticipate we will grow sales, expand margins, and increase adjusted free cash flow generation driven by continued market out-performance of our next-generation products.”
Visteon's full-year 2022 guidance anticipates sales in the range of $3.150 – $3.350 billion, Adjusted EBITDA in the range of $295 – $335 million, and Adjusted Free Cash Flow in the range of $85 – $115 million.
Visteon is a global technology company serving the mobility industry, dedicated to creating a more enjoyable, connected and safe driving experience. The company’s platforms leverage proven, scalable hardware and software solutions that enable the digital, electric, and autonomous evolution of our global automotive customers. Visteon products align with key industry trends and include digital instrument clusters, displays, Android-based infotainment systems, domain controllers, advanced driver assistance systems and battery management systems. The company is headquartered in Van Buren Township, Michigan, and has approximately 10,000 employees at more than 40 facilities in 18 countries. Visteon reported sales of approximately $2.8 billion and booked $5.1 billion of new business in 2021. Learn more at https://investors.visteon.com/.
Conference Call and Presentation
Today, Thursday, Feb. 17, at 9 a.m. ET, the company will host a conference call for the investment community to discuss the quarter’s results and other related items. The conference call is available to the general public via a live audio webcast.
The dial-in numbers to participate in the call are:
Outside U.S./Canada: 720-405-0988
Conference ID: 4635519
(Call approximately 15 minutes before the start of the conference.)
The conference call and live audio webcast, related presentation materials and other supplemental information will be accessible in the Investors section of Visteon’s website.
A replay of the conference call will be available through the company’s website or by dialing 855-859-2056 or 800-585-8367 (toll-free from the U.S. and Canada) or 404-537-3406 (outside U.S. and Canada). The conference ID for the phone replay is 4635519. The phone replay will be available soon after the completion of the call and until 11:59 p.m. ET on Thursday, March 3.
Use of Non-GAAP Financial Information
Because not all companies use identical calculations, adjusted gross margin, adjusted SG&A, adjusted EBITDA, adjusted net income, adjusted EPS, free cash flow and adjusted free cash flow used throughout this press release may not be comparable to other similarly titled measures of other companies.
In order to provide the forward-looking non-GAAP financial measures for full-year 2021, the company is providing reconciliations to the most directly comparable GAAP financial measures on the subsequent slides. The provision of these comparable GAAP financial measures is not intended to indicate that the company is explicitly or implicitly providing projections on those GAAP financial measures, and actual results for such measures are likely to vary from those presented. The reconciliations include all information reasonably available to the company at the date of this press release and the adjustments that management can reasonably predict.
This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. The words "will," "may," "designed to," "outlook," "believes," "should," "anticipates," "plans," "expects," "intends," "estimates," "forecasts" and similar expressions identify certain of these forward-looking statements. Forward-looking statements are not guarantees of future results and conditions but rather are subject to various factors, risks and uncertainties that could cause our actual results to differ materially from those expressed in these forward-looking statements, including, but not limited to:
- continued and future impacts of the coronavirus (COVID-19) pandemic on our financial condition and business operations including global supply chain disruptions, market downturns, reduced consumer demand and new government actions or restrictions;
- significant or prolonged shortage of critical components from our suppliers, including but not limited to semiconductors, and particularly those who are our sole or primary sources;
- conditions within the automotive industry, including (i) the automotive vehicle production volumes and schedules of our customers, (ii) the financial condition of our customers and the effects of any restructuring or reorganization plans that may be undertaken by our customers, including work stoppages at our customers, and (iii) possible disruptions in the supply of commodities to us or our customers due to financial distress, work stoppages, natural disasters or civil unrest;
- our ability to execute on our transformational plans and cost-reduction initiatives in the amounts and on the timing contemplated;
- our ability to satisfy future capital and liquidity requirements; including our ability to access the credit and capital markets at the times and in the amounts needed and on terms acceptable to us; our ability to comply with financial and other covenants in our credit agreements; and the continuation of acceptable supplier payment terms;
- our ability to access funds generated by foreign subsidiaries and joint ventures on a timely and cost-effective basis;
- general economic conditions, including changes in interest rates and fuel prices; the timing and expenses related to internal restructurings, employee reductions, acquisitions or dispositions and the effect of pension and other post-employment benefit obligations;
- increases in raw material and energy costs and our ability to offset or recover these costs; increases in our warranty, product liability and recall costs or the outcome of legal or regulatory proceedings to which we are or may become a party;
- changes in laws, regulations, policies or other activities of governments, agencies and similar organizations, domestic and foreign, that may tax or otherwise increase the cost of, or otherwise affect, the manufacture, licensing, distribution, sale, ownership or use of our products or assets; and
- those factors identified in our filings with the SEC (including our Annual Report on Form 10-K for the fiscal year ended December 31, 2021, as updated by our subsequent filings with the Securities and Exchange Commission).