Visteon Corporation Business Report FY2011

Business Highlights

Financial Overview

(in million dollars)
  FY2011 FY2010 Rate of change
Sales 8,047 7,323 9.9 1)
Adjusted EBITDA 685 614 11.6 -
Sales 4,053 3,614 12.1 2)
Sales 1,367 1,261 8.4 3)
Sales 2,285 2,195 4.1 4)
Sales 531 456 16.4 5)

1) Overall
-Product sales increased by 9.9% during 2011 year-on-year, including production volume and product mix of 672 million dollars and currency of 383 million dollars primarily attributable to the Korean Won, partially offset by divestitures and closures of 166 million dollars and other reductions of 82 million dollars associated with price productivity net of design actions and commercial agreements. Additionally, the deconsolidation of Duckyang resulted in a further decrease in sales of 83 million dollars.

2) Climate
-Climate product sales increased by 12.1% during the year ended December 31, 2011 year-on-year, by 322 million dollars associated with higher production volumes in all regions. Favorable currency, primarily related to the Korean Won and Euro, resulted in an increase of 161 million dollars, partially offset by reductions of 44 million dollars associated with price productivity.

3) Electronics
-Electronics product sales increased by 8.4% during the year ended December 31, 2011 year-on-year, by 82 million dollars associated with higher production volumes. Favorable currency, primarily related to the Euro and the Japanese Yen, further increased product sales by 58 million dollars. The 2010 closure of the Company's Lansdale, Pennsylvania facility ("North Penn") resulted in a 15 million dollars reduction in sales and customer sourcing actions resulting in the closure of the Company's El Puerto de Santa Maria, Cadiz, Spain ("Cadiz") facility further reduced sales 6 million dollars, and other reductions of 13 million dollars associated with price productivity reduced sales.

4) Interiors
-Interiors product sales increased by 4.1% during the year ended December 31, 2011 year-on-year, by 178 million dollars associated with higher production volumes. Favorable currency related to the Euro, Korean Won, and Brazilian Real increased sales 139 million dollars. Divestitures and closures reduced sales by 145 million dollars including the 2010 exit of the Company's North America Interiors operations, which decreased sales 75 million dollars, and the divestiture of the Interiors operation in La Touche-Tizon, Rennes, France in December 2010, which further reduced sales by 70 million dollars. Sales decreased 83 million dollars due to the deconsolidation of Duckyang, which resulted from the Company's sale of a one percent controlling interest on October 31, 2011.

5) Lightings
-Lighting product sales increased by 16.4% during the year ended December 31, 2011 year-on-year, by 51 million dollars associated with higher production volumes. Favorable currency related to the Euro further increased sales by 25 million dollars.

Outlook for 2012

-The Company expect 2012 sales to be in the range of 7.1 billion- to 7.5 billion dollars, as well as Adjusted EBITDA to be in the range of 650 million- to 690 million dollars.


-The Company and Huayu Automotive Systems Co., Ltd. (HASCO) announced that the companies' existing China joint venture, Yanfeng Visteon Automotive Trim Systems, Co. Ltd. (YFV) and Visteon have signed a non-binding memorandum of understanding (MOU) with respect to a potential transaction that would combine the majority of Visteon's interiors business with YFV. Definitive agreements for the proposed sale are targeted to be signed in early 2012. The transaction, once completed, would result in a global interiors company with estimated annual revenue of approximately 4 billion USD. (From a press release on November 30, 2011)


-On October 31, 2011, the Company sold a 1% interest in Duckyang Industry Co., Ltd. ("Duckyang") and conveyed a board seat to the other partner (the "Transaction") . Prior to the Transaction, the Company held approximately 51% of Duckyang's total shares outstanding and maintained board control. As a result of the Transaction, Visteon no longer controls the business and therefore, total assets were deconsolidated from the Company's balance sheet.

Joint Venture
The Company and PT Astra Otoparts, Tbk, an Indonesian automotive component manufacturer, announced plans to form a new joint venture that will supply electronic instrument clusters to automotive and motorcycle manufacturers in Indonesian market. The new joint venture, PT Astra Visteon Indonesia, will be based in Citeureup, Bogor, and is scheduled to start production in the first quarter of 2012. The joint venture is a 50-50 partnership between the two companies. (From a press release on April 19, 2011)

Business Partnership

-The Company announced its intention to invest in Wuhu Bonaire Auto Electrical Systems Co., Ltd. (Bonaire), a subsidiary of Wuhu Chery Technology. The investment will enhance the Comapny's climate product capabilities while strengthening its business relationship with Chery. Founded in 2003, Bonaire is an automotive climate supplier that develops and manufactures heating, ventilation and air conditioning (HVAC) systems and engine cooling systems. Located in Wuhu, Anhui province, Bonaire has more than 700 employees including nearly 200 engineers. (From a press release on August 22, 2011)

Recent Development Outside USA

-The Company announced that, over the five past years, it has increased by 30 percent its production in Brazil of radios with connectivity-related features such as USB, Bluetooth wireless technology, iPod devices and voice command. This year, connectivity-equipped radios will account for approximately 40 percent of the Company's radio production in Brazil. By 2015, the Company expects that all radios it produces in Brazil will be equipped with technologies capable of keeping drivers connected. The Company began manufacturing radios equipped with Bluetooth wireless technology in 2005. Today, they represent nearly half of the approximately 500,000 radio sets that the Company assembles each year at its plant in Manaus, Brazil. (From a press release on November 23, 2011)

-The Company announced that its manufacturing plant in Manaus, Brazil, set a monthly production record in August 2011, making 100,000 electronic components for the first time. The plant, which has more than 400 employees, manufactures radios, instrument clusters and climate controls for vehicle manufacturers in South America and also exports products. The Manaus plant, which began manufacturing instrument clusters and climate controls in January, is on pace to produce 1 million units for the first time ever in 2011. The Manaus facility is one of the three Visteon's manufacturing operations in Brazil. The others are in Guarulhos (interior and climate control systems) and Camacari, Bahia (interior components). In Argentina, the Company assembles interior and climate control systems at plants in Buenos Aires, Quilmes and Rio Grande. (From a press release on October 25, 2011)

-The Company is supplying the heating, ventilation and air conditioning (HVAC) system for the Volkswagen up!. The Company developed this compact HVAC system at its technical center in Kerpen, Germany, and manufactures the product in Ilava, Slovakia. (From a press release on November 15, 2011)

-The Company has started producing lighting and electronic products for the Fisker Karma, the electric vehicle with extended range (EVer). The Karma incorporates the Company's infotainment platform. The system provides onboard navigation, AM/FM/satellite radio, USB/iPod connectivity, and Bluetooth wireless technology audio streaming and hands-free phone functionality. Additionally, the Company supplies an audio system with multiple amplifiers and speakers. The Karma's exterior is fitted with the Company's bi-functional high-intensity discharge (HID) projector headlamp for high and low beam applications. The Company produces headlamps for the Karma in North America, and manufactures the electronic components in Europe. (From a press release on November 7, 2011)


-The Company received the "Technology & Development Award" from Toyota. The award recognizes noise-reduction technology as applied to a low-cost fuel pump controller (FPC), which was co-developed with Toyota. The FPC has been launched on Toyota's multiple vehicle models in the Japan and U.S. markets. The core technology can be applied to virtually all types of motor control systems, including those in electric/hybrid vehicles. (From a press release on May 17, 2011)

-The Company earned World Excellence Award from Ford Motor Company. The Company's manufacturing facility in Hluk, Czech Republic, received a Silver Award for demonstrating superior quality, delivery and cost performance in supplying radiator assemblies to Ford. The Company, with 2010 product sales of 7.32 billion dollars, supplied more than 1.8 billion dollars in components and systems to Ford in 2010, including climate, electronics, interior and lighting products. (From a press release on March 18, 2011)


R&D Expenditure

(in million dollars)
  FY2011 FY2010 FY2009
Overall 326 353 328

R&D Facilities

-The Company is expanding automotive component testing capabilities at its engineering test center in Brazil. The Visteon Tech Center, located at the company's Arbor manufacturing facility in Sao Paulo, will now start performing thermal cycle tests on internal and external components for vehicles. With the expansion, vehicle manufacturers will be able to perform thermal tests locally, reducing the cost and time of performing certain tests outside of Brazil. In addition to performing technical measurements for electronic, climate and audio systems, the Tech Center features a laboratory with an engine dynamometer. This lab carries out tests for performance (torque/power), fuel economy and mapping of the injection/ignition system. (From a press release on May 26, 2011)

-In March 2009, Halla Climate Control (HCC) of Korea, a subsidiary of the Company, opened a testing laboratory in Shanghai, China. The laboratory develops air conditioning systems. (From a press release on Mar 2)

Technical Alliance

-The Company has signed a memorandum of understanding with BAE Systems, a UK-based defense and security business, to develop in-vehicle electronics technology for the automotive market. The technology cooperation combines BAE Systems' scientific and engineering know-how with the Company's automotive electronics solutions and system integration knowledge. (From a press release on November 10, 2011)

Product Development

-The Company will present a joint paper with Ford Motor Company on a 25w HID (High-Intensity Discharge) xenon lighting system at the SAE 2011 World Congress in Detroit, U.S. It is the first 25w HID xenon lighting system to be used in a series production hybrid vehicle. A key benefit for hybrid and electric vehicle applications is the lighting system's lower power requirement compared with existing 35w alternatives, helping prolong each battery charge cycle. The Visteon 25w HID system's design incorporates all requisite electronics into a single unit, reducing package size. With its reduced packaging and cost, the system is viable for small-vehicle applications in emerging countries. (From a press release on April 11, 2011)

Investment Activities

Capital Expenditure

(in million dollars)
  FY2011 FY2010 FY2009
Climate 168 116 74
Electronics 26 23 19
Interiors 38 34 34
Lightings 18 24 16
Corporate 8 12 8
Total 258 209 151