Visteon (VC) Q4 2023 earnings summary

Executive summary

• FY23 record sales were $3.954B, up 5% YoY; base sales grew 12% excluding supply-chain recovery pricing.

• Record FY23 adjusted EBITDA was $434M, up $86M YoY, with an 11.0% margin; adjusted free cash flow was $150M.

• Secured $7.2B in 2023 new business and launched 129 products, supporting the growth pipeline.

Financial highlights

• Q4 sales were $990M, down from $1.064B YoY; base sales grew 1% as lower supply-chain recovery pricing weighed on reported sales.

• Q4 adjusted EBITDA was $117M, up $14M YoY, at an 11.8% margin, up 210 bps; gross margin was $130M.

• FY23 GAAP net income was $486M, including a $313M non-cash tax benefit; adjusted diluted EPS was $17.68.

• FY23 operating cash flow was $267M, capital expenditures were $125M, and adjusted free cash flow rose $49M YoY to $150M.

Outlook and guidance

• FY24 guidance: sales of $4.0B–$4.2B, adjusted EBITDA of $470M–$500M, and adjusted free cash flow of $155M–$185M; midpoint reconciliations are $485M and $170M, respectively.

• FY24 base sales growth is guided at 8%; expected growth over market is 10%–12%, with a sequential Q1 rebound and acceleration through the year.

• FY24 adjusted EBITDA margin midpoint is 11.8%; adjusted free cash flow conversion is expected at 35% at midpoint, with planned capex of $145M.

• 2026 targets include $5B sales, 8% 2023–2026 CAGR, low-double-digit annual growth over market, and $675M adjusted EBITDA at a 13.5% margin.

• 2026 adjusted free cash flow conversion target is 35%–40%.