The information that will be shared with you today consists of “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. 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 the automotive vehicle production volumes and schedules of our customers, developments arising from discussions with Ford Motor Company and the related strategic cost structure review, the effect of pension and other post-employment benefit obligations, our ability to recover material surcharges from our customers, the need to recognize restructuring, impairment and other special items, our ability to reduce costs in accordance with the Company’s plans, as well as those factors identified in our filings with the SEC (including our Annual Report on Form 10-K for the year-ended December 31, 2003). We assume no obligation to update these forward-looking statements. Paris Auto Show Investor Conference – September 23, 2004
“Visteon“Visteon onon thethe Move”Move”
BusinessBusiness UpdateUpdate EuropeEurope && SouthSouth AmericaAmerica
DrDr HeinzHeinz PfannschmidtPfannschmidt ExecutiveExecutive ViceVice PresidentPresident PresidentPresident EuropeEurope && SouthSouth AmericaAmerica ContentsContents
• Overview • Visteon on the Move – Customers – Products – Region • Summary
Page 2 Europe,Europe, SouthSouth AmericaAmerica && AfricaAfrica
• $4 billion manufacturer of automotive components and systems • 49 manufacturing facilities − 35 manufacturing plants − 14 focused factories • 15 countries • 23,000 employees • 15 customer service centers • 5 major ‘Centers of Excellence’ • Business with all major OEMs
Page 3 ParisParis 20022002 –– Objectives Objectives
1. Diversify revenue and profitably grow business with non-Ford customers 2. Manage and further strengthen the relationship with Ford of Europe to ensure a mutually profitable relationship 3. Develop innovative technology solutions and rapidly bring them to market 4. Agree and implement ‘Plan for Growth’ restructuring to reduce operational costs by $100 million, in our eight former Ford plants by the end of 2004 5. Strengthen the regional management team
Page 4 ParisParis 20042004 –– Accomplished Accomplished
1. Year-over-year improvement in revenue a. Winning significant and profitable new business with non- Ford customers b. Expect about 50% of new business to be with non-Ford customers (Ford & PAG included together) in 2005 2. Ford business is stable, relationship strong 3. Successfully launching new products with new customers 4. ‘Plan for Growth,’ phase I is complete 5. Strong leadership team is in place, and delivering
Page 5 VisteonVisteon CorporateCorporate FocusFocus
Customer Facing Asia Electronics Climate Europe Interiors Lighting South America Powertrain
Product Chassis Regional North America Lines Execution
Page 6 VisteonVisteon onon thethe MoveMove
• Customers - Profitably diversifying our business
• Products - Focusing on innovative products
• Region - Improving our competitiveness
Page 7 CustomerCustomer FacingFacing OrganisationOrganisation
• Formed Customer Business Groups (CBGs) to present a consistent face to customers • Opened customer service offices across Europe (e.g. Paris, Barcelona, Wolfsburg, Stuttgart, Munich, Ingolstadt, Turin, Swindon, Binley, Gothenburg, Prague etc) to support our customers • Successful in winning $1 billion of new, non-ford business globally, over the past three years
Page 8 MajorMajor LaunchesLaunches inin 20042004
Ford Focus AFS Aston Martin DB9 • AFS (Industry first) • Air Induction • PCM • Starter Driver • IP and centre console • PCM, FDM, ETC • Cooling Module • Carbon Canisters • Visteon/Sony Audio • Coil on plug • A/C Lines
Renault Modus Peugeot 407 • Negative Vacuum Formed IP & Door • HVAC • Door Panels Panel • Climate Controls • Trim Lines • A/C Lines Page 9 Renault-NissanRenault-Nissan andand PSAPSA
• Interiors: console, instrument panels, Peugeot 407 HVAC door panels, trim parts • Climate: HVAC (air-handling system), A/C controls, accumulator, A/C lines • Electronics: clusters, multimedia systems • Lighting: headlamps, rearlamps, 3rd stop lamps • Chassis: halfshafts • Powertrain cooling: EGR cooler
Renault Modus Instrument & Door Panel Citroen C4 (5 doors) Rear lamps Page 10 FordFord ofof EuropeEurope
• Interiors: console, IP, door panels Ford C-MAX Interior • Climate: HVAC, compressor and powertrain cooling module • Chassis: front corner module, halfshafts, brake discs • Powertrain: FDM, electronic throttle body, PCM, AIS
• Lighting: Front and rear lamps, AFS Halogen, HID with cornering light • Electronics: audio, multimedia, passive entry, clusters, FES
Ford Focus AFS
Page 11 PremierPremier AutomotiveAutomotive GroupGroup
Aston Martin PCM Volvo S40
• Interiors: cockpit, console, IP, load space • Chassis: Axle, PTU, halfshafts, brakes • Lighting: AFS Halogen, HID with cornering light, 3rd stop lamps • Powertrain: FDM, electronic throttle body, PCM, manifold • Climate: HVAC, A/C lines, compressor, powertrain cooling Jaguar S-TYPE • Electronics: SDARS, RF keys, clusters, FES Page 12 BMW,BMW, DaimlerChryslerDaimlerChrysler andand VWVW GroupGroup BMW Group • Electronics: digital audio, Mach Voice Link • Chassis: halfshafts
Mach Voice Link DaimlerChrysler • Interiors: instrument panel Actros, Instrument Panel • Climate: A/C-lines VW Group • Chassis: halfshafts • Lighting: front and rear Lighting, CHMSL • Interiors: console, IP • Electronics: audio, cluster, family entertainment • Powertrain: fuel tank VW Golf V Headlamp • Climate: HVAC, controls, fluid transport Page 13 GMGM andand FiatFiat
• Electronics: clusters, radios, rear seat audio • Interiors: instrument panel, console Opel Meriva Rear Seat Audio
• Powertrain: cooling • Chassis: linkshafts, halfshafts Fiat Stilo Cluster
Page 14 AftermarketAftermarket
• Distribution channels: Independent Aftermarket and OE Service • Main products: Replacement Parts (A/C, radiators, lighting) and Mobile Electronics (Rear Seat Entertainment, radios) • Significant opportunity for growth provided by changing market regulations
Page 15 VisteonVisteon onon thethe MoveMove
• Customers - Profitably diversifying our business
• Products - Focusing on innovative products
• Region - Improving our competitiveness
Page 16 ProductProduct LineLine TeamsTeams
• Formed six Product Line Teams (PLTs) • As substantial automotive innovation is led from Europe, three of the PLTs have their ‘center of gravity’ in Europe: – Electronics – Interiors – Lighting • Expanding the capabilities of the other three product lines in Europe • Focused R&D spending on growth product areas
Page 17 ElectronicsElectronics
• Leadership in digital, wireless, display technology Cluster • Integration expertise in HMI, miniaturisation, networks • Global platform strategies, engineering, manufacturing • # 2 in OE Audio (6m radios/amps) • # 2 in Instrument Clusters (6.5m) • Key Products − Audio: radio, amplifiers, digital audio − Infotainment: navigation, voice recognition, Bluetooth − Driver information: clusters, displays, HMI − Integrated Electronics: Rear Seat MP3 Entertainment, integrated center
panel, HMI products Page 18 Basildon,Basildon, U.K.U.K. TechnicalTechnical CenterCenter ofof ExcellenceExcellence –– Electronics Electronics • Customer and Technology Centre • Design leverages the flow of key business processes – Innovation and Commercialization – Award to Launch – Delivery and Service • Also a centre of excellence for Electronics systems • Focuses on product development and advanced engineering
Page 19 ClimateClimate && PowertrainPowertrain Cooling Cooling SystemsSystems
• Expertise in airflow management • Component excellence • System knowledge • AHS 2002: 11% (EU), 26% (NA)
• Key Products Compressor − Air handling and engine cooling modules − Controls: manual & automatic − A/C compressors − Evaporator & heater cores − Heat exchangers − Fluid transport Temperature Controls
Page 20 Kerpen,Kerpen, GermanyGermany TechnicalTechnical CenterCenter ofof ExcellenceExcellence –– Climate Climate ControlControl • New European Corporate Office • Incorporates key operational and business functions for region • Base for many of Visteon’s European leadership team • Also operates as Visteon's centre of excellence for Climate Control Systems • Focuses on product development and advanced engineering NovyNovy Jicin, Jicin, CzechCzech RepublicRepublic TechnicalTechnical CenterCenter ofof ExcellenceExcellence –– Climate Climate ControlControl • Opened new technical center for climate control development • Adjacent to our Autopal production plant • Over 100 engineers and technicians • Expands development and engineering capacities • Serving customers across Europe
Page 22 InteriorsInteriors
• Leader in TPO material technology, providing green solution with advanced haptic (feel) • Seamless integration of all key cockpit technologies providing style, safety and comfort to consumers, and partnership Negative Vac.Form IP (VW Caddy) and service to OEMs • Leader in the integration of electronics within vehicle interiors • Comprehensive design, testing and global engineering capabilities • # 2 in cockpit, instrument panels & doors • Key Products − Cockpit modules − IPs: slush moulding, vac-form, Slush Moulded Cockpit (Lancia) leather wrap − Centre consoles and door modules Page 23 LightingLighting
• Advanced front lighting systems with electronic controlled swivelling of the low beam • Innovative styling and electronic control management design solutions • Advanced LED solutions for headlamps Headlamp (VW Golf A5) • First to market with halogen AFS in 2004 • 2m sets of headlamps per year / 3m sets of rear lamps per year • Key Products − Wide range of halogen headlamps and conventional rear lamps − Advanced HID and LED front lighting Rearlamp (Visteon prototype)
Page 24 VisteonVisteon onon thethe MoveMove
• Customers - Profitably diversifying our business
• Products - Focusing on innovative products
• Region - Improving our competitiveness
Page 25 PlanPlan forfor GrowthGrowth
• 2002: Target was to achieve $100 million in cost reductions across the eight, former Ford factories • 2003: $50 million saved including headcount reduction of 1,000 (despite original planning assumptions changing – Ford volumes declined, adverse mix and pricing deterioration) • 2004: On track to realize further $50 million of savings by the end of this year – By year end 2004, the total hourly headcount in Germany & UK will have been reduced by nearly 30%
Page 26 ImprovingImproving OperatingOperating ResultsResults
• Engineering / Development – Focusing on core products with disciplined gateway process for innovation – Global implementation of Program Management (VPDS) – Focusing on re-use to facilitate commodity strategy and utilization of manufacturing capital • Material Cost Reductions – Global commodity strategies and low-cost sourcing – Collaborative partnerships with suppliers ($AV€) • Reduce complexity • Design-to-target • Supplier consolidation Page 27 ImprovingImproving OperatingOperating ResultsResults
• Manufacturing Efficiencies – Year-over-year efficiency improvements are on track in 2004 – Introduced standardized lean work practices (VMOS) – Purchasing smaller, flexible, multi-use machinery – Actively pursuing re-use or sale of idle or underutilized equipment – Restructuring high-cost manufacturing footprint and expanding our presence in Eastern Europe / low-cost countries
Page 28 InvestingInvesting inin thethe RegionRegion
• Invested approximately $1 billion in the region over the last 5 years in technology centers and new plants • Expanding our presence in Eastern Europe / low-cost countries • Continuing to invest in focused factories to support our customers: − Rennes, France (PSA) − Almussafes, Spain (Ford & Mazda) − Halewood, UK (PAG) − Emden, Germany (VW) − Poznan, Poland (VW) − Born, Netherlands (Aftermarket) − Glauchau, Germany (VW) − Barcelona, Spain, 2006 (Nissan)
Page 29 20052005 –– New New WindWind TunnelTunnel
• Constructing new, state-of-the-art wind tunnel in Kerpen, Germany, for testing automotive climate control applications: – Temperatures from - 40°C (-40°F) to +55°C (131°F) – Humidity from 10% to 95% – Velocities up to 200 km/h (125 mph) – Full spectrum of solar simulation capabilities • Control room will measure more than 300 channels of data • Sophisticated test facility, not readily available in Germany • Operational in May 2005 followed by four-month testing period; from October 2005, test customer vehicles in three-shifts
Page 30 RevenueRevenue$5 GrowthGrowth EuropeEurope && SouthSouth AmericaAmerica $4 $4.0 $3.6 $3 $3.3 $1.7 $1.0 $1.3 $2
Revenue ($ billions) $1 $2.3 $2.3 $2.3
$0 2002 2003 2004 Budget
Non-Ford Ford (incl. PAG) Page 31 CustomerCustomer DiversificationDiversification EuropeEurope && SouthSouth AmericaAmerica
30% 36% 42% 47% % of Revenue of % 70% 64% 58% 53%
2002 2003 2004 2005
% non-Ford % Ford (incl. PAG) Page 32 RegionalRegional BusinessBusiness PrioritiesPriorities
• Beat the 2004 budget targets • Deliver the savings committed in our 2004 budget • Win new business with Ford, and non-Ford customers, according to plan • Build upon the successful implementation of “Plan for Growth” • Improve the launch performance of major programs • Instill a highly competitive, performance-driven culture
Page 33 SummarySummary
• Ford business is stable; our agreement with Ford is ensuring that future business is becoming more profitable • Winning significant, new, non-Ford business • Focusing efforts on Electronics, Interiors, Climate and Lighting in Europe • Improving our cost position through Plan for Growth and other, ongoing restructuring actions • Transforming culture to that of a competitive, performance-driven organization
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