Visteon Corporation (VC) Earnings Call Transcript & Summary

Great. All right. We're going to go ahead and get started. Good morning, everyone. Welcome to Visteon's 2026 Investor Day. I'm Ryan Ghazaeri, Vice President of Investor Relations and Corporate Strategy. On behalf of Visteon executive team, the speakers and everyone else here from this down in the room, I want to like to thank you guys for all coming here today. I really appreciate you guys being here in person as well as on the webcast. As a heads up materials for today's presentation will be posted online or actually have been posted online to visteon.com/investors. For the fun stuff now. Before we begin today, I'd like to remind everybody that this presentation contains forward-looking information. Forward-looking statements are not guarantees of future results and conditions, but rather are subject to various risks factors and uncertainties that could cause our results to differ materially from those expressed in these statements. Please refer to the page entitled forward-looking statements here as well as the presentation posted online and in our SEC filings. So as -- to kick off our presentation today, we have Sachin Lawande, our President and Chief Executive Officer, to go through the company overview, the secular trends in our industry and the -- how Visteon is positioned to win in this market going forward. You'll also hear from several of our business leaders to provide a deeper overview of our product technology, customer strategies and the innovation we're bringing to our manufacturing operations. You'll then hear from Jerome Rouquet, our Senior Vice President and Chief Financial Officer, to discuss our financial outlook as well as our capital allocation plans. As you can see, we have 2 Q&A sessions for the day. That's throughout the day. Please submit your questions via the link that was provided to you during the reservation or event registration. We also have QR codes that are scattered around the room on the table so you can use that QR code to get to the link as well. If, for any reason, you have technical issues, you can contact us or e-mail us online at investor.visteon.com. And with that, I'd like to invite Sachin to the stage to go over our company overview and our strategy. Sachin?

Thank you, Ryan, and good morning, everyone. Welcome to Visteon's 2026 Investor Day. You guys are able to hear me okay? Very good. Excellent. Before I start, I would like to thank the Visteon team that has worked very hard to put today's program together. Let me start with a quick introduction to the company. So Visteon is a leading supplier of cockpit electronics and software to the global automotive industry. At our core, we are designing and delivering the integrated hardware and software systems that sit at the center of the vehicle's user experience. The company operates in 17 countries with about 10,000 people allowing us to serve automakers everywhere in the world. Now since 2019, despite COVID, supply chain disruptions and tariffs impacting global vehicle production as well as costs, the company delivered outstanding financial results as you see on this page. Our adjusted EBITDA grew 110%, a margin expansion of over 500 basis points and we generated over $1 billion in cash. However, looking forward, the order industry is going through a significant technology transformation driven by the increasing importance of software. And the work we have done over the last 2 to 3 years really positions the company very well to take advantage of this industry transition. Now what differentiates Visteon from our competitors is that we have the broadest cockpit electronics portfolio in the industry allows us to serve all vehicle segments and markets. We have deep expertise in key hardware and software technologies, including AI that supports the transition of the industry to software-defined vehicles. We also have a very unique platform-based product development approach that enables us to scale while keeping costs and quality in check. And lastly, we have a highly optimized engineering and manufacturing footprint and operational discipline to drive superior financial results. So today, you'll hear a lot about these topics from myself and from my colleagues, along with some proof points that gives us confidence in our long-term future. So a key strategic advantage of Visteon is the breadth of our product portfolio and the multiple avenues that it creates for growth. Automotive, as you know, is a mature industry. And long-term outperformance depends on our ability to either increase content per value or expand our customer portfolio or enter existing markets. Over the last few years, we have actually done all 3. Our product portfolio covers all products that are needed for today's cockpits, allowing us to participate in the growing electronics and software content that's being added to vehicles across passenger cars, commercial vehicles and 2-wheelers. And since our last Investor Day 3 years ago, we have expanded our product portfolio to address the emerging technology trends, connectivity in cars is growing, camera-based features like surround vision is expanding into all vehicle segments and since the last couple of years, we have launched our own connectivity and camera modules. Later on, you'll be able to see them on the left-hand side over there. And instead of buying them from Tier 2s, we are using our own so that we can capture more of the content. We also introduced a high-performance version of SmartCore. As the industry shifts towards more centralized computing, it allows us to support the industry's transition and you will see demos of the product at the back over there. We maintained a presence in the electrification electronics which provides us with exposure to the long-term growth of electric vehicles with onboard chargers, [ DC/DC ] converters and battery management systems. And finally, as software and system complexities increase, carmakers are increasingly looking for expert services. Through the acquisitions that we recently made, Jumper and [ Spiegel ] Institute and more recently, vehicle view. We added expertise in the fast-evolving areas of connectivity, UX and UI and functional safety. In addition to driving services revenues and profits, these acquisitions also helps us deliver more sophisticated systems in the future. So another important element of our strategy has been the deliberate expansion and diversification of our customer base. Now since 2019, we have added 16 passenger car brands spanning both established global carmakers as well as emerging industry leaders. And of the 23 automakers that today make more than 1 million cars each annually, we have 18 as Visteon customers. That gives us a broad exposure to regions, to vehicle segments and technology adoption curves all over the world. Collectively, these 18 account for almost 85% of all cars produced in 2026. The order industry is also going through one of its most significant shifts in recent years in terms of market share of OEMs. And Visteon has done very well in are navigating this change, and many of these emerging leaders are now Visteon customers now we have extended the same strategy beyond passenger cars to commercial vehicles and 2-wheelers. These segments are undergoing many of the same digital transformation challenges and transformation itself that they are making. And it presents opportunities for Visteon as adjacent growth markets. Today, we serve 6 commercial vehicle OEMs, including the leaders -- technology leaders, in particular, [ Scania ] and Volvo and we have engagements with virtually all of the major two-wheeler OEMs, including the largest, which is Honda Motorcycles. Now together, this expansion and diversification of the customer base strengthens our growth profile but also makes our revenue more resilient and more balanced across the OEMs. So let's take a step back and look at what has changed since our last Investor Day in 2023 and more importantly, how do we respond to those changes. The industry was differently than many had expected. EV adoption, in particular, slowed down in U.S. as well as in Europe, and competition shifted quite dramatically towards emerging OEMs, especially in China. Also, software, AI and central compute increasingly became important drivers of vehicle architecture. Now rather than simply reacting to these changes, we repositioned Visteon to align with where the industry was heading, and we focused on 3 priorities. First, we expanded and diversified our customer base, as I just mentioned. Focusing on those OEMs that were underrepresented in our revenues. This included our Toyota, Honda and Mitsubishi Motors in Japan, Chery in China, OEMs such as MS [indiscernible] or [ Maruti ] Suzuki in India and other OEMs. Now we strengthened our position with some of the growing OEMs in the industry and also improved our customer concentration and reduced our dependence in some of our traditional customers and their product cycles. Second, we broadened our product portfolio. I mentioned SmartCore, the high-performance SmartCore earlier as well as connectivity and camera modules. We also expanded into OLED-based displays to complement our growing business with [ TFT-based ] display products. Now these products positions us to participate in the next phase of the software-defined vehicle growth, and we have already won more than $2 billion of business with OLED-based displays and SmartCore HPC. Third, we increased our exposure to high-growth markets. India, rest of Southeast Asia and South America are expected to grow faster than the more mature markets in the next few years. And we have expanded our engagement with the OEMs that are leading in these regions. And we have also invested in engineering and manufacturing to support our growth. Now together, these initiatives has diversified our customer base and strengthened our competitive position, which creates a stronger foundation for growth in the next phase of our company. To better understand our growth opportunity, it's really important to understand how the vehicle electronics architecture is evolving and why that evolution is driving significantly higher content per vehicle. The industry is transitioning from the traditional hardware-defined architectures to software-defined architectures, and ultimately, to AI defined architectures that are built around centralized computing platforms. In traditional architectures, functions such as clusters, infotainment, connectivity are managed by separate ECUs and are sourced from multiple suppliers. It typically creates content opportunity in the range between $125 to $350 per vehicle. This traditional architecture is the dominant architecture in the industry today. About 70% of the cars that are going to be built this year are going to use this type of an approach. Now these vehicles still require more sophisticated digital cockpits with larger displays and richer user experiences. And Visteon remains very competitive in this segment as reflected by our wins with Toyota, with Hyundai and Stellantis and others. The next major step in the evolution of the architecture is the consolidation of ECUs into larger domain controllers. And the cockpit is the first domain that this is happening at scale. Now cockpit domain controllers integrate multiple cockpit functions onto a single computing platform, reducing the number of ECUs and enabling richer software experiences. And as cars transition to CDC, the content opportunity increases between $250 to $500 per vehicle. Now CDC architectures also drive demand for larger and more immersive displays like you see on my left over here. And that creates an additional source of content growth within the cockpit. I'll discuss that a little bit more later in my presentation. Now this transition from traditional architecture to SDV architecture with cockpit domain controllers in more advanced displays is the most important value creation opportunity in the industry over the next few years. Now Visteon has established itself early through our SmartCore technology, which was one of the first CDCs in the market. We now have multiple production programs with about 8 customers for SmartCore and that are more in development. SmartCore is one of the more important drivers of our growth outlook that we will discuss later today. The next phase of evolution is already starting to emerge in China that [ STV ] adoption is already high. I should mention that although we talk about this transition from traditional to STV, it's not happening uniformly across the world. China is leading at about 50% penetration. And this year, about half of the cost produced in China will use [ DCs ], Europe is behind at about 20% to 30%. The rest of the world is just emerging. So they're all operating at different speeds. Now China, leading OEMs are taking the next step forward by moving beyond cockpit consolidation to multi-domain consolidation and bringing AI at the core of these new experiences. And that's where SmartCore HPC comes in. So SmartCore HPC consolidates cockpit functions. It also integrates gateways and integrate other body [ ECUs ] and you will see some examples of that later on. We are already working with the leading Chinese OEMs to introduce this new architecture and bring that into production. And so the key takeaway that you should take from this slide is that this vehicle architecture change from traditional to STV and then to AI DV is what is driving significant content per vehicle uplift in the industry. Now because Visteon plays at each of these phases of the evolution, we are in a very strong position to grow as the industry goes through this transition. So this slide will get a little bit deeper into what is SmartCore HPC and what's the value proposition and what do we see as the opportunity ahead of us. So agentic AI, which is a term by now, I'm assuming everybody is familiar with, has the potential to make the driving experience a lot richer, more personalized and also more productive. However, bringing AI into the car presents some unique challenges. AI models were designed to be run in cloud environment with specialized computing infrastructure that takes a lot of computing power, high bandwidth memory and significant energy consumption, resources, which are fundamentally constrained inside the vehicle. So SmartCore HPC uses latest silicon technology, but very importantly, very advanced power and thermal management techniques to enable OEMs to run AI in the vehicle because we are not talking about running AI models in the cloud. And that enables these OEMs to deliver always on low-latency AI experience right in their vehicles. Now as I mentioned, we're working with 3 leading Chinese OEMs, Geely, Chery and [ Syk ]. They're one of the largest the largest OEMs in China. And we'll be launching SmartCore HPC in their upcoming vehicles with a particular focus on AI-enabled experiences. Now SmartCore HPC beyond bringing AI also enables the next phase of ECU consolidation. In one customer example, we have 13 ECUs being consolidated into SmartCore HPC. And it includes the front and the rare cockpit domain controllers, some body control functions, seed controllers, wipers, lighting, et cetera. This consolidation drives cost reduction of about 30%, it lowers wiring complexity and also weight and fundamentally creates a platform that will enable richer AI-driven experiences in the future. Now this economics works particularly well in China because their premium vehicles today already carry a lot of content. So this consolidation makes sense. In many other regions of the world, that's not the case. Now also in China, as you may know, AI has kind of entered into public consciousness, and it's also a marketplace differentiator for OEMs. Looking ahead, we estimate the China HPC serviceable market to grow to about 2.5 million vehicles by 2029. And our objective, similar to the first generation of SmartCore, is with SmartCore HPC to target a leadership position with about 10% to 20% of the market share. We are seeing interest from OEMs outside of China for AI in the cockpit, but we haven't included any assumptions of any revenue contribution in our plan just considering that many of these OEMs are still in the process of launching their CDCs and the longer development schedules of these OEMs probably means that their launches will happen after 2029. So the previous slide focused on the hardware side of bringing AI experiences in the cockpit. This slide discusses the software capability behind it and how we are taking it into other markets. Now AI has evolved from perception AI, which brought object detection and classification using deep learning models to now generative AI, which brings a higher level of intelligence with reasoning and planning. Now AI brings intelligence, but running AI in edge devices requires additional software often called as an orchestrator that can take complex requests and bring them down into smaller workflows and managed memory and errors as well as interact with systems and services outside of the device. CognitoAI is Visteon's corporator software. And it's the first software in the industry that is designed specifically for the vehicle environment. Now we're also taking company to AI and leveraging it into AI-enabled IoT devices. IoT has been around for some time, but the combination of AI and IoT has the potential to deliver significantly more benefits. Remember that IoT was all about collecting data and pushing it into the cloud, but a lot of data without the intelligence doesn't make a lot of sense. So these products that we call our [indiscernible] Sigma that we recently announced, our targeting surveillance, monitoring and inspection applications, for factory automation, industrial as well as retail markets. And we are working on this in close collaboration with Qualcomm. In fact, the hardware is based on the [ Dragon Wing ] platform of Qualcomm. And besides collaborating on the development, we are also collaborating on the go-to-market of these devices. We expect to start to launch and deploy these devices beginning of next year. Now looking further ahead, the emergence of the so-called physical AI with world models for real-world applications, including self-driving offers an additional very exciting potential for us to expand our AI strategy. Again, so what's the key takeaway? AI at the edge is really driving a significant transformation and adding significant content and value to devices, not just in automotive. And with the investments Visteon is making in software and hardware and AI itself, we are positioning the company to participate in the growth of value creation that's going to happen with AI. So I mentioned earlier that displays are also a beneficiary of this transition to STV. The use of more powerful cockpit domain controllers directly enables the use of larger and more sophisticated displays. However, OEMs are taking different strategies with respect to their displays depending upon the vehicle segmentation regional consumer preferences as well as the cost and the prices. In the mainstream segment for high-volume vehicles, we see that the displays are getting larger and they follow tablet designs with narrow borders and high-quality graphics. The content range here is somewhere between $125 to $200 per vehicle. Now premium vehicles use larger displays, either a single large display or multiple displays that are optically bonded to a larger covered lens. You'll see some of those types of displays on my left here during the break. Now Visteon has developed some technologies, some proprietary technologies to allow us to control and reduce the cost and make our displays more competitive. These types of displays increase the content opportunity between $200 to $350 per vehicle. Now at the upper end of the market, OEMs are introducing pillar to pillar displays that span virtually all of the dashboard. The extreme size of those displays brings a lot of challenges. There's a lot of light leakage which results in driver distraction, and we need to deploy sophisticated technologies to control the light leakage. And the very tight tolerances and high-quality requirements from OEMs makes manufacturing a significant challenge. Content opportunity as a result, grows even higher between $400 to even up to $1,000 per vehicle. Now Visteon, over time, over the last several years, we've been in displays, has built deep expertise in many parts of the display manufacturing process. And as the displays get larger, the panel itself, which is what we buy from display panel suppliers, becomes a smaller portion of the cost. And over the years, we have been vertically integrating, bringing in-house many of the process and components that are outside of the display panel in the display stack, which is one of our key competitive advantages when it comes to displays. And together with SmartCore, displays are the key driver of the next phase of our growth outlook, as you will see later in my presentation. Now as vehicles evolve, and essentially become computing platforms that are connected, they must continuously adapt to changing technologies, standards and customer expectations. OEMs are increasingly confronted with a rapidly changing technology landscape and are looking for partners that can help them navigate these evolving technologies that are especially critical to their future, including connectivity, as I mentioned, user experience, functional safety and now more and more AI. Now the same technologies are also fundamental to the evolution of Visteon's technology platforms. So our M&A strategy has had a dual focus: one, to expand our software and engineering capabilities, but second, to strengthen our role as a strategic development partner to OEMs through services. Now since 2024, we have executed our 4 acquisitions that support both these objectives. [indiscernible] added connectivity and telematics expertise as connectivity has evolved from 4G to 5G and now it's going to go into 6G and satellite communications connectivity has become even more strategic to OEMs. [ Spiegel ] Institute brings UX and UI expertise as displays get larger and as AI becomes more integrated into the cockpit, designing intuitive and differentiated user experiences becomes a competitive advantage for car makers. [ Vehicle ] added deep expertise in an area called functional safety, which is very important when you try to integrate different ECUs into a single ECU. They have one of the deepest capabilities in that area, which will enable us to further consolidate additional ECUs as we move from software-defined to AI defined and then ultimately, a central single compute system for the vehicle. And into finally strengthened our software capabilities because they brought software-defined radio technology into Visteon, helping us, again, go forward on our journey of moving from hardware-centric to software-defined features. Now individually, each one of these acquisitions brought in critical technology, but they're also generating revenue and profits. That's kind of the beauty of the strategy that we have put in place. So I mentioned that the adjacent markets of commercial vehicles and 2-wheelers are interesting growth opportunities to Visteon and what has been happening in the passenger cars is also starting to happen in these 2 markets. Two-wheelers historically have used clusters with either analog gauges or very small displays. However, they're changing rapidly, with riders expecting the same type of digital experience that they get in their cars on their 2-wheelers. Electrification is also increasing the amount of information that has to be presented to the riders. So we are seeing rapid growth of larger display digital clusters with smartphone connectivity and this is also starting to become a competitive differentiation amongst the OEMs. The addressable market is very large. Even if you exclude China, that's about 50 million units every year and the content value opportunity ranges from $40 to $80 per vehicle. Commercial vehicles, similar story, increasing safety regulations lead management needs and also rising driver expectations. Again, the same dynamic they're expecting in their vehicles, what they see in their personal cars. And Europe, in particular, which is ahead of the rest of the industry, we are starting to see commercial vehicle OEMs equip cockpit domain controllers, similar to what we deploy in passenger cars into their heavy-duty commercial vehicles. In U.S. and India, our other 2 serviceable markets, OEMs are modernizing their cockpits. They're not quite at the level that European OEMs are, but they're using digital clusters, infotainment, and surround view systems that add in deployment today. Now what's important is both these adjacent markets are using products and technologies that we have already developed for the passenger car market. And since our last Investor Day, we have secured a significant amount of business both on the 2-wheeler side as well as commercial vehicles. And as a result, the combination of these 2 is a meaningful contributor to our long-term growth. So that brings me to a discussion about why do we win. We believe Visteon is uniquely positioned to win as the industry transitions to software-defined and ultimately, AI defined vehicles. In a long-cycle industry like automotive, success is determined by the ability to consistently deliver innovation, product cost and quality and more recently, speed. Now our advantages today are based on 5 differentiated capabilities. Number one is technical depth. We have developed a very comprehensive cockpit technology platform that covers all functions needed for the cockpit. Second is platform leverage. As our reusable hardware and software platforms get richer, they enable us to deploy design, develop and deploy these cockpit systems faster while maintaining quality and control on cost. Third is timed innovation. We have consistently been able to position Visteon ahead of the major technology transitions that have happened that are related to the cockpit. This AI is just on the proof point with SmartCore HPC. Fourth is localized scale. Our global manufacturing footprint in close proximity to our customers enables us to be more responsive and also have more resilience in the supply chain in all key markets that are of importance to automotive OEMs. And the last one is cost discipline. Our global engineering and manufacturing model is enabling us to scale while maintaining cost control and maintaining competitive cost structures. Now we are continuing to strengthen these advantages, but we are further extending our mode with some selective investments. The first being the investment that we are making into AI that I discussed earlier. We are building deep capabilities in AI and AI DevOps to enable us to deliver the next generation of AI-based products into automotive and other markets. The second is vertical integration by increasing the ownership of key technologies but also components, we are increasing our supply chain resilience, at the same time, we are able to mitigate cost. Third, targeted bolt-on M&A. We continue to pursue targeted acquisitions along the similar lines that I described with the ones that we have executed so far. And it's important to note that we always do this with a lot of capital discipline. And then the last part is software talent development. It's a very important piece as we grow and our engineering platforms and competency centers around the world are doing a lot of work to make sure that we have a scalable and continuous pipeline of talent to meet our needs as we grow. Now together, these 5 differentiated capabilities in the investments, the food investments that we're making, it's going to create a very sustainable advantage for the company for long-term growth. So this slide shows our revenue outlook through 2029. It's important to note that our assumption for customer vehicle production is generally in line with S&P Global. And the main message here is that our portfolio is going through a significant transformation. Traditional products like clusters, infotainment, are important today. But as we go forward into the future, more of the growth will come from the higher-value software-defined vehicle-related products. We expect, as a result, SmartCore [ CDC], SmartCore HPC and advanced displays to make a larger portion of our revenue as we go forward. We also get benefit from the expansion into the adjacent markets. Commercial vehicles in 2-wheelers are going to be a meaningful contributor and with a lower contribution coming from engineering services and the new IoT products that I mentioned earlier. All these growth initiatives are able to offset some of the legacy programs that are rolling off and will help drive sales from approximately $3.8 billion in 2026 to $4.8 billion in 2029. Jerome is going to talk more about this data. So let me conclude by talking about our strategy. Our strategy is actually very simple. It's really lead in expand the platform, grow the market and compound the advantage. First, we are already at the center of the industry transition to software-defined than AI defined vehicles. Our leadership position in centralized computing, advanced displays and AI puts us in a great position to capture more of the content and value as the industry transitions their architectures. Second, we're expanding beyond passenger cars. Our technology platforms are highly transferable from passenger cars to 2-wheelers and commercial vehicles and other mobility applications as we have seen and that expands our addressable market. Third, we are aligned with the industry's fastest-growing categories. That's centralized compute, larger displays, software and lastly, we are compounding the advantage through disciplined investments as well as M&A and continuing to invest and grow in our engineering capabilities. Together, these 4 pillars reinforce each other and grow our market opportunity. Now to execute the strategy requires a leadership team that has experience in handling industry transitions, scaling operations and delivering consistent results. So today, the leaders that are going to present after me have a tremendous amount of experience in product management, in manufacturing operations, customer excellence as well as in financial management. So with that, I'm going to hand it over now to my colleague, Bob Vallance, who will talk about our platform strategy. Bob.

Okay. Thank you, Sachin, and good morning. I'm Bob Valence, and I lead the product lines at Visteon. As an introduction, I've been in the automotive electronics business, let me go one slide forward. All right. There we go. I've been in the automotive electronics business for over 3 decades, and I was part of the Visteon spin-off from Ford in the year 2000. Over the years, I've worked in product and customer roles, spent time in engineering and operations and worked in every region of the world, including 6 years building our business in China. While in China, I left Visteon in 2008 during the global financial crisis and went to Johnson Controls, where I ended up running the electronics business within their automotive group. I came back full circle in 2014 when Visteon acquired the [ JCI Electronics ] business. What's more interesting to talk about today, however, is what we've done since that time. Under Sachin's leadership, we embarked on a journey over a decade ago to transform the company from a traditional Tier 1 supplier that focused on customer projects to a product-led technology company serving the cockpit, the automotive cockpit market. We've made significant progress in this transformation and installing the right product leadership was a key part. Today, I'd like to introduce 3 of those leaders who are with us at this event and we are playing key roles in driving this transformation. First, I would like to introduce Siva Kumar Yaddanapudi, who goes by [ Y Siva ], thankfully, is the Vice President of our cockpit electronics product line with more than 24 years of experience. He began his career at Visteon as a software architect, working on in-vehicle networking technologies and later on connected cockpit technologies. [ Y Siva ] went on to build and scale our Android-based infotainment platform, and later led the development of our SmartCore cockpit domain controller platform. Today, he's also leading our high-performance compute initiatives, focused on enabling AI powered and cockpit experiences for AI defined vehicles. Next, I'll introduce Harsha Padmanabha. Harsha is with us today, Vice President of AI, Product and Technology Development with more than 23 years of experience across multiple industries. During his 8 years at Visteon, Harsha has played a pivotal role in building several of our core software platforms, which are now deployed with multiple OEMs globally. In 2024, he helped initiate Visteon's AI journey, spanning both edge AI and hybrid cloud developments, which led to the formation of our AI organization in our leads. Prior to Visteon hardship built products and businesses across graphics, software and AI, including entrepreneurial ventures with successful exits. Finally, I'll introduce Freddie Matsumoto. Freddie is with us today, Vice President of our display product line. Freddie brings 28 years of experience in the display industry with 20 years in automotive. During his 9 years at Visteon, he has led display product strategy, product management and engineering across a rapidly evolving display portfolio. Freddie has also led the advancement of technologies from conventional TFT LCDs, to many LEDs and OLED solutions, serving a broad range of vehicle applications. He's also been a driving force behind Visteon's vertical integration strategy, which you've heard about, which is a key theme for displays, and I'll talk more about that later. So these 3 leaders and their teams will be doing the product demos after our presentation this morning. So let me now draw your attention to what we have accomplished as a product-led organization over the last few years. Sachin has outlined the journey in the industry from the traditional hardware approach that has existed for decades to software-defined vehicles and more recently, to AI defined vehicles. As Sachin mentioned, the markets have not evolved uniformly. Today, we are dealing with very different markets and segments within those markets around the world. And while the markets have become increasingly complex, it's important to point out that through it all, we have developed a solid track record of anticipating these market trends and correctly timing innovation to meet the market demands, resulting in what we believe to be a product portfolio that has the best product market fit in the industry. But equally as important, we have developed key capabilities and reusable platform assets, which have had a compounding effect of allowing us to do all of this while reducing our overall engineering cost and time to market. Let's go one level deeper into this for both cockpit electronics and displays on the following slides where I will share more detail and some examples. This slide describes our journey from traditional hardware-defined products to products that enable software-defined vehicles and, ultimately, AI defined vehicles. This time line shows how Visteon has built a broad product portfolio in the cockpit space along the way. I'd like to highlight 3 key takeaways that have set Visteon apart during this time and have underpinned our success. Number one, our ability to anticipate technology shifts and bring timely innovation; two, our ability to execute efficiently and three, our ability to move quickly. We started with digital instrument clusters and audio systems. As infotainment moved to the Android operating system, we spotted this early and quickly brought in Android expertise and developed an Android-based infotainment platform. And we were first to market with SmartCore cockpit domain controller or software-defined vehicles. We later added cameras and connectivity solutions. And today, we are extending these platforms into high-performance compute for AI cockpits with our Cognito AI. Successfully doing this requires more than product development and requires building entirely new capabilities. In addition to Android expertise, we also developed expertise in virtualization and hypervisors advanced compute architectures and now AI. Each new capability we built in or we built up or brought in became foundational for the next stage of growth. The second takeaway is that we have achieved this while maintaining strong engineering discipline. In many companies expanding into new technologies means continually increasing engineering spend. Our experience has been different. Through our platform strategy, we have actually reduced engineering spending from earlier peak levels, and we are now holding engineering spending relatively flat while developing more customer programs in parallel than ever before. This leads to the third takeaway, speed. The automotive industry is changing faster than ever. Automakers need partners who can respond quickly to new market requirements. Because we develop reusable assets rather than one-off solutions, we can significantly compress development time lines and bring products to market faster. Let's look at the platform strategy that makes all of this possible. To set the context for our platform strategy, it will be helpful to take a closer look at the hardware defined world we lived in for decades. In this world, there are no platforms. no significant standardization of any type. Automakers define each product based on what they need. There is an attempt for reuse within some automakers, but very little to show for it at the end of the day and virtually no reuse possible across automakers. What this means to the suppliers is that each project stands alone and must be engineered from scratch. Many automakers and suppliers are still operating in this mode today. It is a cycle that is extremely hard to break and takes years to do so. Yet in this environment, we found a way step-by-step to develop platforms with the product-led organization Sachin put in place. First for instrument clusters and later for infotainment, as I mentioned earlier. If we had not done this, we would not have been in a position to take advantage of the breakthrough opportunity the software-defined vehicle opened up for us. This big breakthrough came when we were first to spot the potential as part of the software-defined vehicle trend to combine the instrument cluster and infotainment functions into 1 ECU and driven by a single SoC. We were able to bring our cluster and infotainment platforms together and build on top of them to create the SmartCore CDC. And we just did it again. As we anticipated the AI defined vehicle trend, we were able to take our SmartCore CDC platform and build on top of this to create what we call smart core high-performance computer, HPC, which also includes our AI framework. We were able to do this quickly and position ourselves as the best partner for 3 of the leading Chinese automakers who will be the first to bring the AI cockpit to the market later this year. I'd like to punctuate this success story with a recent example that clearly drives home the point about the power of our platforms. We recently won a CDC program with a European automaker driven by an urgent market need, this program had to be done in 12 months from a warrant to production. As illustrated on the right side of the slide, our CDC platform has over 1,800 software blocks of code representing more than 25 million lines of code. We were able to completely reuse over 1,400 of the 1,800 blocks, which is more than 75%. With this approach, we were able to dramatically reduce the development effort and cost while delivering this complex product in 12 months. This is the power of our platform. Let me summarize the platform benefits more broadly on the next slide. To summarize how the platform benefits have benefited us -- the platform approach has benefited us. I will look at what we accomplished in the last 3 years since we were here in New York. In total, we have on more than 100 customer projects in cockpit electronics in the last 3 years. While we develop these projects in parallel, we are dealing with increasing complexity at the same time. If you consider that an infotainment system is 2 to 3x as much engineering as an instrument cluster, you can get a sense of the magnitude of the work. Where things get even more interesting is with the smart core cockpit domain controller. We have won more than 25 customer projects since we started this product line prior to 2020. And 15 of those wins have come in the last 3 years. When you consider that the engineering effort is more than the combined effort of an instrument cluster and an infotainment system. This will give you an idea of how much work it is to do 15 new programs in parallel. This is truly unique in the industry. And the final proof point for the power of our platforms is our move into HPC with 3 Chinese automakers in parallel. The amount of work involved and the necessity of closely collaborating with each automaker would make doing one of these projects at a time, a real challenge for most suppliers. Our ability to do 3 at a time with a time to market of about a year is perhaps the strongest testament to the power of the platform approach. And then when you step back and realize that we're actually doing all of these things at the same time, this will give you a complete picture of how we are scaling our products in markets around the world that continue to demand this entire range of products from entry-level instrument clusters to AI cockpits. Now let's turn our attention to displays. Story for our display platform approach it first appears to be different than cockpit electronics. Displays are highly customized products, which have become the primary interface in the immersive cockpit experience that Sachin talked about earlier. This creates a unique set of challenges from the cockpit electronics challenges, which are more about software. But there are some parallels we can draw and what is the same is our reusable platform thinking. I would like to explain how we have approached displays to position ourselves as a leader in this space. It starts with the work we did pre-2020, as Sachin mentioned. We brought in display expertise originally for digital instrument clusters and stand-alone center displays. We also anticipated where the market was going and made the decision to go deep into the design of the display components working closely with panel makers, cover lens suppliers and various other suppliers across the display system value chain. This early work we did for single displays, such as developing thin display form factors narrow border design, enhanced optical performance, in-house optical bonding of cover lenses, mechanical design, thermal management and other key elements could then be scaled when the time came to move to dual displays and eventually pillar-to-pillar displays, using both TFT LCD and OLED technologies. What we've built in the last several years is a platform driven by vertical integration. This has strengthened our technical capabilities, improved our cost competitiveness and development efficiency. So let's go deeper into the platform approach for displays. This slide shows the breakdown of a TFT LCD display system and it gets to the point that Sachin had made earlier as well. You can see where the value resides on this slide. At the center of the exploded view on the left is the display panel itself. Above the panel, you have the cover lens and optical bonding and below the panel, you have the backlight, metal carrier, et cetera. There are 3 key takeaways I want you to get from this slide. Number one, 5% of the value of a display system is not with the panel makers. Number two, typical Tier 1s buy from the panel makers and other suppliers and do some level of assembly. Number three, Visteon is different. We are deeply vertically integrated from top to bottom in the display system, and I'll go into some of that. It should be clear from this slide why vertical integration is so important. Visteon built a dedicated display organization a decade ago and established a technical center in Taiwan, bringing in deep Tier 2s level expertise, including engineers specializing in TFT LCD panels, OLED backlighting, cover lenses and optical surface treatments. And I think it's important to point out that these engineers, many of them worked for Apple and -- worked on Apple and Samsung and other projects like that. These are not all automotive engineers. This is a mix that we brought in. As a result, we developed internal capabilities in key areas such as in a narrow border designs, advanced optical performance, large-format displays and curve displays. We also have developed a strong portfolio of proprietary IP along the way. But there's another important part to the story I want to make sure to get to. What we integrate, we standardize. Although customers want custom solutions for their unique vehicle designs, there is still much that can be done to standardize key elements in the display system to create reusable platforms. For example, customer requirements for sunlight readability can vary widely. We built libraries of optical configurations that can meet each requirement quickly. For the display panel, we develop and procure at the base panel level, which allows for much greater standardization. For a 12.3-inch and 10.25-inch displays as an example, which will still account for approximately 40% of the market by 2030. We are driving standardization, enabling us to source panels with consistent specifications for multiple suppliers. Finally, it's important to emphasize that this level of vertical integration is also a key enabler for localization, which is important both to customers and in our manufacturing process, as Joao Paulo will talk about later. So let's summarize the platform benefits of displays on the next slide. Similar to the cockpit electronics summary slide, this slide gives you a perspective on what we have done with our platform approach for displays in the last 3 years since we were here. Let me walk you across the page. In total, we have on more than 80 customer projects in the display product line in the last 3 years. Every one of these display projects is considered a custom application by our customers and requires close collaboration with our customers throughout the development period, and we are executing these programs in parallel. In the same period, the complexity of display systems has continued to increase. When you consider that a growing portion of our business wins are in the more complex display systems, the amount of work to develop these systems in parallel is also increasing. But every project benefits from our platform approach as well with standardization of key elements of the display system, which allows us to reduce the engineering cost and development time to meet the increasingly demanding requirements of our customers. Now let's transition to how we are managing our platform strategy as we move into the future. Until now, I have primarily covered what we have done to leverage our product-led organization and platforms over the last decade to get to where we are today. I would now like to turn our attention to how we are managing our platforms going forward as the changes in the business come at us faster and faster. We must continue our track record of anticipating these changes acting quickly and leveraging our platforms. And what better way to talk about this tend to use AI as an example. We certainly have a good starting point here with our HPC and Cognito AI platforms and our position with 3 of the leading Chinese automakers to launch AI cockpit systems this year. But let's talk about some of the challenges that come with implementing AI in automotive and the work we are doing to lead and find solutions in this space. As we compare the AI and automotive worlds, we can see in the left chart the AI world is putting out new models at a faster and faster pace and with increasing complexity. The pace is relentless. It's not slowing down. Now look at the right chart, Automotive is the opposite. Once a car is designed, it's locked in for 3 to 7 years, fixed compute, fixed memory, hard limits on heat and power and a long qualification cycle before anything ships. The cloud changes weekly, the changes to a car can be measured in years. This is the tension on this slide. deploying AI in the cloud is easy you just add more servers. -- deploying AI in the car is hard. You have to fit fast-moving intelligence into hardware that is frozen in time by comparison. And that is exactly where Visteon sits. We are helping to bridge this gap. We partner with the automakers, taking the latest models running on the cloud and customize and optimize them to run on the automakers specific hardware within their limits. We turn what's possible in the cloud into something that actually ships in the car. And being that bridge isn't just a one-trick solution. It takes a full platform approach. Let's take a closer look at that. Being the bridge means owning the whole stack and building key capabilities, as Sachin mentioned earlier, we split this into 2 parts. On the left side is AI engineering, the work of shrinking and shaping models so they run on a car distilling big models down, designing them around the actual chip blending on device and private cloud and squeezing the most out of limited memory. On the right is AI infrastructure, everything that keeps it running and trustworthy, the data pipelines, simulation and validation the GPU compute to train on, the safety and benchmarking and the ability to monitor and update the car over the air after it ships. While many companies are involved in this space, very few are capable of taking this on end-to-end. This comprehensive end-to-end approach to bridge the gap between the AI and automotive worlds is what makes our approach unique. And as we collaborate with leading automakers, our position gets stronger, and that is why we believe this approach scales from one program to many. So I'll wrap up my presentation now on this slide. As I close, let me leave you with 3 reasons why we believe Visteon is well positioned to continue to lead as a technology company and capitalize on the foundation we have built over the last decade. First, we are a product-led organization with the right leadership team in place. We have transformed the way we operate from a traditional supplier focused on customer projects to a technology company that owns its product and technology road map, correctly calling market transitions, bringing timely innovation and building platforms that scale. Second, we have built what we believe is the industry's broadest and most comprehensive cockpit product portfolio, and we are uniquely positioned to address the evolving needs of automakers across vehicle segments, regions and architectures, giving us multiple avenues for growth. Third, we have consistently demonstrated the ability to identify important technology shifts early and move decisively. And as the industry transitions towards AI defined vehicles, we believe our platform approach and our close collaboration with leading customers will continue to position us to capture the opportunities ahead. Thanks for your time today, and we'll turn it over to Ryan for Q&A.

Thanks, Bob. At this time, we're going to keep Bob here and we're going to have Sachin come on for our first Q&A session. This Q&A session will be followed by a break that we'll have for about 15 minutes. Much to my surprise, Sachin spoke less than I expected. So we're actually running ahead of time. But we've got a few questions that have rolled in the QR codes that you guys have on the tables, maybe not everybody has the right in front of you. So please share we'll allow you to ask questions as you'd like, but we have received a couple of questions both online and in person. So just to start -- I'll start with one question that was submitted online. You talked about China HPC through 2029. Have you made any inroads with European OEMs? I guess any OEMs for that matter, outside of China? And when do you expect these non-China business to come through?

Yes. I think I alluded to that in my presentation. The answer is yes. We have a lot of engagement with virtually all of the leading OEMs that you can imagine in Europe as well as in Asia, including Japan, the challenge isn't that they do not understand the value proposition and that this is the future. They all do. They have a few challenges that I mentioned. They're still in the process of launching their next-generation cockpit domain controllers. And they are also looking at some of the costs associated with it, which -- as you saw from the presentation, in China with their integration approach, they're able to offset. This takes a lot of heavy engineering. This is going to take a little longer for the rest of the world to be able to catch up to China. However, as you can also imagine, it's a competitive dynamic that they will not be able to avoid. So we fully expect them as the AI technology matures and the silicon options also broaden that the rest will follow. From our viewpoint, we really take this first engagement that we have with the different OEMs as a learning opportunity. We have to solve some really hard problems. We shouldn't be under the impression that going from a CDC to an HPC with all of that integration and AI is just a run-of-the-mill activity. It takes a significant amount of lift Bob mentioned the capabilities that we have to develop, and we have to scale. We have a lot on our hands with 3 OEMs, and we would like to see some progress and some capabilities develop before we aggressively push it with other customers.

We've got a couple of questions on HPC consolidation. So I'm going to try to combine these a bit, but we received a question from Rajat Gupta from JPMorgan. Thank you for -- and investors. So how does SmartCore [ HBC ] strengthened Visteon's position with future vehicle architectures and then the combination, what is the urgency being shown by OEMs to move to more zonal and central compute that might require a quicker need for Visteon to add [ ADAS ] capabilities?

Yes. So that's the second part is an interesting question because it's just a logical expansion of this integration of gateway body to now ADAS. However, there's a big, big difference. When you move into ADAS as versus everything else that has been discussed previously, you bring into a safety-critical applications. So we are now combining your normal nonsafety critical, right, which is referred to as QM with safety critical functions and that raises the bar in terms of the complexity, significantly higher. Now the silicon to support that is starting to emerge. We always think first in terms of is the silicon capable of doing it. If the underlying the very bottom most layer isn't capable of supporting it, software cannot do all of the magic on its own. So the initial silicon that we have for the domain consolidation for HPC does not yet have that level of sophistication where you can also bring ADAS, but that's coming very soon. So as the silicon emerges -- and that's the reason why we do acquisitions like [ vehicle VO ] so that we have the capability, that's exactly the capability that you need, what is referred to as functional safety, which is how do you partition the whole system to ensure that ADAS gets the resources that it needs that whatever else is running, which is more and more as we integrate more does not somehow impact the mission-critical ADAS capability. And that's where we see the industry go into the future. Now to answer the first part of the question, the driver here is consolidation, right? So if the OEMs need to bring AI, there's a certain level of cost involved in bringing AI that simply comes from the higher compute and memory needs. So that has to be offset by something, and that something tends to be the integration. So as I mentioned, with vehicles in China, particularly in the premium segment, already having a lot of technology content consolidation, obviously makes more sense to happen there first. Now when you move to outside of China, we still have those types of vehicles, maybe not as many in terms of the percent of the total market as compared to China, but we have all of the premium vehicles that have significant content. So we expect that premium luxury side of the market to follow for no other reason than to be able to compete with the Chinese vehicles that will eventually come into the markets that are today served by the global OEMs.

All right. We'll try to converge again with some of the questions. I'm going to paraphrase here, but Dan Levy asked a question related to vertical integration displays. So I'm going to just ask the question with the investor's question as well. There are a few of your Tier 1 competitors that have been exiting the display market. Do you have a sense for the margin differences or the cost advantages that are between you and the other display Tier 1 and then what about the panel manufacturers as well?

That's a very good question as well. And I think Bob gave a great perspective on how to think about the different cost elements that cost drivers of display, especially as they get bigger. If you think about the smaller displays, there are typical 8, 10, 12-inch size displays, that's pretty much a commodity. There's not a lot of value add that happens there. And for that reason, if for anything, we use that, it is for integrated products for the traditional architecture vehicles. But the bulk of our displays opportunities are coming from the larger displays, like the ones that you see here as OEMs tend to go into STV, right? SDV require separation of displays from the compute and the displays also tend to get larger. There, the value that is assigned to the panel itself is actually only a smaller portion of the overall. At the same time, however, if you do not have the vertical integration capabilities that we have that took us about 7, 8 years to put into place, it's not a very attractive business because you then have to get all of that from somebody else, someone else takes the bulk of that value. So I wouldn't want to comment on what the other Tier 1s are doing. We used to be one of those before as well. right, buying these display panels. And we had a choice to make, either we get out of the business, like many of them did or we go into it. What was the reason why we decided to go in. As we saw the industry shift over to STV, it became abundantly clear that displays would be a major portion of the value. Why would we get out of a big portion of what was happening in the cockpit, right? And we could see the 2 go hand in hand. The more electronics you do, the more displays you need. So we chose a different path. And that was though in 2018. Now whoever would like to come into this space will need some time to get all of the capabilities in place, including the panel suppliers who may have the 25% that we showed, but they still need the rest of the capabilities.

Let me add one point, if I may. And this Joao Paulo will talk about later. With the panel makers being all in Asia and most of them being in China and a lot of the other suppliers that go into the display value chain also residing in Asia. You can imagine there's a lot of discussions these days about supply resiliency and things like that. Visteon is uniquely positioned to localize, as I mentioned before. So we didn't just vertically integrate in one location. We did it everywhere around the world. And we can bring the value much more of the value of the overall display system closer to the customer in region closer to the customer. That is huge when it comes to supply resiliency. And so that's another benefit that came as a result of us being vertically integrated.

Good segue with China. So Winnie Dong asking the question, what kind of from Deutsche Bank. What kind of competition are you looking at in China? Are there any specific segments you're looking at for the growth, whether it's more exports or more domestic?

China certainly has a set of competitors that we are watching very closely. These is somebody that we respect quite a bit. And we learned from them as well. So there is no harm in being smart about learning from what you see has done well. However, let me just paint the broader picture for you. If you think about what has happened in the China market, the domestic demand is kind of now getting restructured with the changes in the incentive model that is now in place. And the competition is intense. So for most suppliers, including the domestic suppliers, making profits in the bulk of that supply chain is extremely hard. That has limited the scaling up can't live in this industry, if you're not profitable over a lengthy cycle because it's very hard to change the economics of a business if you do not really have the profitability built into the foundation of what you do, right? So we don't really see the scaling up of many of those competitors that have been around. It has been very few. This is probably the only name that I can point to that has achieved a certain scale you would have expected with 30% of the market being in China that you should see more suppliers emerge. That has not been the case. That's point number one. The second point is with the focus on exports, and with the focus on AI, AI tends to be a regulated technology. Chinese AI is not going to be allowed in the U.S. or in Europe and vice versa. So OEMs need global partners that have capabilities but are able to operate at China speed. This very simple message internally that we have for Visteon, right? You're a global technology player, but you need China speed. Both have to be true, not just one. And that's the differentiation that we are trying to put in place. Everything that you saw us talk about today so far has been with that in mind. Now having said that, I would never count the competitors from Asia out. And we also, therefore, pay a lot of attention to our cost structure, so there are 2 things that we have to always watch for besides our technology, right, speed and cost. And a lot of our discussions today are really about that. And so we today, from a cost structure perspective, we believe we are competitive with anybody, including the suppliers in China, our fixed cost, right? And then with the speed, the platform approach, I think we are actually ahead of many of these guys, it brute force, putting a lot of people, which is largely what's happening in many parts of the world cannot last for too long. And to build a sustainable business, we need a different approach. Now one thing that we didn't mention, and this is the last thing I'll stop here. AI, we are not stopping at just AI into our products, AI is coming into our engineering capabilities in terms of how we build the products, which is the next level of optimization that will happen in terms of capabilities.

Well, Joe Spak just asked a question that is a perfect segue because he asked from UBS. How do you expect the split between hardware-defined software-defined and AI defined vehicles 5 years from now? And who do you believe are the main competitors on the AI defined side?

So if you look at our plan here, our traditional business will probably come down to maybe 1/3 of the overall. As I said, vehicles by 2029 will be STV vehicles. Not AI defined necessarily [ SDV], right? And so that means the rest 50% are still traditional, but the value is definitely higher on the STV side. So we expect maybe 25% to 30% of our revenues to be our traditional. The bulk of the other revenue is [ STV/AIDV ] and the AI piece for the rest of the decade is largely China. That's the way we should think about it.

Great. Another great segue. Colin Langan from Wells Fargo said slides flagged that there's a decline in sales to the traditional autos. Why not continue to support these programs? Are they not profitable?

It's not that we don't want to support these programs. And we are, like we talk about Toyota all the time, and we'll talk more about Toyota later today. And that's your classic traditional architecture OEM as a customer to us for the next few years. And we're very happy to serve that market, right? But the bulk of our customers are actually going into SDV, and we see greater content opportunity, greater technology play and that means obviously, better margin structure. So our interest is in accelerating the trend. I should mention one more thing, which may not be obvious from a distance, what's happening with the memory dynamics. I'm pretty sure you are all aware of what's going on there, that will also push the industry to adopt consolidated architectures sooner. This traditional architectures require traditional technology, holders, SoCs, older memories. And if all things were equal, that's fine. You can continue to work on that for a long time. But what have we learned in the last few months that those traditional technologies are not going to be in the level of supply that we would all like. So the industry is going to shift. There will be a bigger consolidation even from OEMs that were not prepared for it. And that's our opportunity.

I'll add one more point as well on that. When we talk about the whole -- the transition from hardware to software to -- as we talked about, Visteon has the entire portfolio that covers that. And what we can do, no matter which OEM, every OEM, it's only a discussion about the steps and the timing. There's no debate about the direction anymore as it was true some years ago. So we can help every OEM take the next step. And those are the kinds of conversations that we have with the OEMs is how do you take the next step along that path with the next vehicle opportunity.

Switching gears a little bit. So Tom, from RBC asked, you have $1 billion in revenue uplift from nonautomotive. You mentioned 2-wheelers, CVs and now IoT. What about leveraging BMS for energy storage?

Good question. And energy storage, we looked at that actually a few years ago, maybe 2 or 3 years ago, even before this AI hype investment into data centers and so on, hit the media. And we arrived at a conclusion that the value that is a strive to what we do compared to the value about -- that goes into the battery technology itself that it didn't really make sense for us to go into it unless we wanted to get into the battery technologies. So that's one thing. The second thing is that's an entirely different market. It's different buying patterns, different ecosystems, get into a space that is a little further away than where we stand today. So if you think about the adjacencies that we have stepped into -- they are very near adjacencies, very comfortable in terms of the risk and our ability to be able to mitigate them. Now you might question is IoT a similar situation. And in many ways, from a product viewpoint, IoT is very similar to what we're doing in automotive. So at least one part of the equation, the product side of it, we have a lot of control and understanding about that. And on the other side, in terms of the go-to-market and the market development, that's an area where we will need to learn and develop our capabilities. But the value proposition in terms of what we bring versus in the energy storage entirely different. What we can bring in terms of the uplift to IoT, a typical IoT product with an AI doubles or triples in value. right? And that's the AI that we bring. That is not the case with an energy storage where we bring BMS and the bulk of the values in batteries that we do not supply.

Following up on that question. Just related to electrification products in general -- you're clearly downplaying electrification products, electrification seems to be out of focus, what is to play with this product line?

Yes. So we are essentially taking a wait-and-see approach with electrification, right? So what we see, we see that demand in the U.S. is weak at best. And Europe, although there has been of late, a lot of demand increase in electric vehicles, driven by what's happening to energy prices there. We'll need to see whether this is sustainable. If things change and if it goes backwards, like what we saw here in the U.S., we don't want to be in the same situation that we were in just a few quarters ago and get [indiscernible] from one position to the other. So in the meantime, though, we continue to serve our customers. We have 2 here, 2 in Europe. We are paying close attention to what's happening there. And we have some modest investments in other areas. As I mentioned, broadening our product portfolio, power conversion in particular. So we'll continue to do that and watch. I do believe long term, EVs will grow. Is that the best investment for us to do now questionable, given where the market stands? And with the overcapacity that we see in China, I'm hesitant to follow something where the markets themselves fundamentally are in growing and there's a lot of capacity.

All right. I'm going to try to squeeze in a few more questions. We got about 5 minutes Dan asked 2 questions, but they're kind of related. So I'm going to try to combine them, Dan from Barclays. [ VW, Rivian ] JV is providing a model for OEMs to more directly own architecture and underlying ECUs. To what extent HPC enables OEMs to have sufficient ownership over ECUs/complexity reduction? And then I guess to follow on that, what is the competitive set on HPC?

So when you go from a stand-alone product or even the CDC to HPC, the level of collaboration between the OEM and the supplier has to go up by definition because it's integrating a lot of the ECUs that doesn't come from the supplier. The 13th [ is use ] that I talked about, getting integrated into our HPC. Most of these are not done by us. So clearly, the OEM has a big role to play as the person that is bringing all of that technology in, working with whoever the suppliers are and integrating it onto the HPC. So what we see as a business model change, especially when you go from a CDC to an HPC and also on account of this AI life cycle, how tight it is compared to the automotive life cycle that Bob discussed that the model changes from a typical supplier where the relationship in terms of engineering ends when the vehicle ships and then you still stay ongoing supply to a much longer core development activity because of the constant refreshes of models that are required. So we are setting ourselves up and we were doing this even anticipating this in the past, that the product line architecture is critical to do this. Now if you were not to have a product line which meant we only had project teams. The project teams end and the product ships, that's the model that the whole industry has been using and which, by the way, most of the OEMs are using. They are financial systems, their internal teams are not set up for a continued engagement over multiple models on the same technology. That was the big difference between this tech companies coming into automotive who built a tech platform and they released vehicles versus OEMs that build technology forecasts and change technologies with every car launch. So that change is what we have also implemented with our product lines. And that's very fundamental to how the future of the industry will look like in terms of collaboration. Now you asked about the competitive set. So one thing that as you can think about it, you can be an HPC supplier, if you're not a CDC supplier today. There's no room for you to be a cluster supplier and an IVI only supplier and leapfrog to an HPC supplier. So that tells you who that set is. It's a fairly narrow set, and they have to then have AI capability on top of that to aspire to be an HPC supplier. So that set is also narrowing.

Okay. I'm going to try to squeeze in 2 more questions. Two of them are actually combined. So can you talk about the regulatory situation in Europe that might help penetrate the Chinese OEMs as they produce in Europe for your products? And what is our strategy to help serve the Chinese OEM?

One of the biggest regulatory reasons is AI actually. If you look at the discussions that we have with our OEMs in China that have export ambitions A lot of it is on account of the fact that they are seeing regulations increase and are also anticipating additional regulations to come on the horizon. AI is a big piece of that. They recognize that anything that touches AI and connectivity will be heavily regulated by all jurisdictions, right? So Chinese technology, AI technology, connected cars are going to be a difficult proposition and therefore, they need partners like us. So that's the main one. And then there are others that are, I would say, is more secondary.

Great. All right. Last question for this session. What are the gaps that Visteon needs to fill given Qualcomm and NVIDIA, both now have full stack L2 ADAS solutions, and they're also your partners?

What's interesting is when you look at the ADAS stack right? The [ L2 ] stack in that configuration, especially when you go to end-to-end AI, it just becomes a safety stack. That's from the primary stack. You always run 2 stacks. You run the stack and you run a stack et stack is essentially there to ensure things don't go off the rails. So what we expect is that all silicon vendors will just supply you and help to stack, it's a cost of doing business for them. Nobody is going to engineer safety stack that really just doesn't get used. The real value is in the end to end. Now end-to-end AI for ADAS, that is truly capable of reaching at some point in the future the level of capability of Tesla, there are not too many options. However, this [indiscernible] NVIDIA with the Cosmos world model is a very promising step in that direction, and they are our close partners, and we are developing a lot of capability in the whole end-to-end chain that Bob showed on his presentation slide. So that capability is key. It's not a trivial task to take that on, but we see that as an opportunity in the future.

Perfect. All right. You made up time. We're [ 37 ] minutes or [indiscernible] seconds over now. So we're going to take a 14-minute break instead of a 15-minute break. We'll be back here at 10:45. [Break]

Thank you. Thanks. All right. We're going to go ahead and get started back up here again, but people get situated. So we've got 3 more speakers and then a Q&A session. We'll have Francis Kim start, followed by Joao Paulo, focused on manufacturing operations and then finish up with Jerome Q&A. And then we also have lunch that I'll let you guys check out after the Q&A. So I'd like to introduce Francis Kim to the stage.

Thank you, Ryan. Before the numbers, a word on the lens I bring to this have spent close to 20 years in electronics. It came up through consumer electronics into automotive at LG and move to Visteon while I was in Germany. And I have led Visteon's business there with some of the most demanding customer OEMs in the world. I've also seen this [ carpet ] business from both sides, competing against Visteon and now competing for Visteon. Today, I lead our global sales organization, and I also run our rest of Asia business. That gives me a view across the customers, regions and awarded business behind our strategy. So as I go region by region today, my message stays the same. We do not chase volumes, we place our content where the value is moving. Let me start with a shift behind all of it. This is the single most important frame for everything that follows. These are the 12th largest automotive manufacturers globally and how their production has changed since 2019. Rather than focusing on any single company, focus on the overall shift. Domestic Chinese OEMs have taken global share. And China is now the world's largest car exporter. And that has reshaped this complete list. Three of these 12 are now Chinese BYD, Cherry and Geely. They are up triple digits. Several long established names here are down 20, 30, even close to 40%. Our response has been deliberate, with global vehicle production expected to stay broadly flat. We are focused on our technology and content where value is accelerating. That strategy is clear in our customer portfolio. Toyota, the world's largest automaker is becoming our top 3 customer and expect it to be up to 8% and of company sales by 2029. We're gaining real momentum at Hyundai and [indiscernible]. And in China, we identified the software-defined vehicle transition early and positioned ourselves as the AI cockpit and SmartCore high-performance compute development partner for 3 leading domestic players, Geely, Chery, and SAIC on their premium brands. The key point is simple. We are not relying on industry volume growth. We're increasing content with the customers and platforms where technology adoption is highest, which supports both growth and a higher quality revenue mix. Before the regional tour, one frame that ties the rest of my section together. Our revenue is well diversified across all 4 regions and each is adapting to its own market dynamics. In the Americas, software-defined adoption is still early, which gives us runway to refresh existing architectures with modern cockpit content. In Europe, it's the opposite, fast software-defined vehicle adoption, tightening regulation and Chinese competition are all pushing content up. In rest of Asia, digitalization and India's two-wheeler boom create new upside as our legacy Japanese programs roll off on cycle. And in China, the era of incentive-driven volume is actually over. The next leg is tech premium and high-performance compute led. Four different drivers, one shared conclusion. In every region, the cockpit is where value is concentrating. Let me show you how we win in each, starting with the one region that needs the most explaining. Let me begin with the Americas, where we are managing through a near-term transition. According to S&P light vehicle production forecast, the market is expected to grow about 8% between 2026 and 2029. Our revenue, however, declined from roughly $1.2 billion to approximately $1 billion. The reason is straightforward. Our 2 significant legacy programs are rolling off, Ford's legacy cluster programs, and GM's reconfigurable clusters for full-size trucks and SUVs. But those headline numbers do not fully reflect what is happening underneath the business. As legacy programs roll off, our display and copy domain controller business are growing. Exactly the softer defined vehicle-driven shift we have been building towards. Revenue from our growth customers increases from approximately $400 million to more than $600 million by 2029, surpassing our Ford and GM revenue. Importantly, this growth is concentrated in higher value content aligned with the softer defined vehicle transition. Our recent wins include display programs at [ Scout], SmartCore programs at [ Triton], a new commercial vehicle business with international and Oshkosh. Customers that were not part of our portfolio only a few years ago. So while the revenue base changes, the quality of the business improves, we're expanding our customer base, increasing content per vehicle and strengthening our position in next-generation cockpit architectures. That positions the region for a healthier and more diversified growth profile over time. Now in Europe, the headline here is simple. It grows even while absorbing the roll-off of several sizable legacy programs, long-life clusters and displays. For context, vehicle production according to S&P LVP is expected to grow about 4.6% between 2026 and 2029. Our sales grow faster from about $1.4 billion to $1.7 billion, just over 20%. We're beating the market. And here is why. This is not a volume recovery. It is content expansion and regulation is actually driving it. The EU new general safety regulation, now mandates, driver monitoring and the displays to support it. Vehicles are now required to be cybersecure and to support over-the-air software updates. and the 2026 update to Europe's NCAP crashes ratings makes advanced in-cabin technology, essential just to earn pipe stars. Some of this is now law. The rest isn't. But no carmaker can sell competitive vehicle without it. Either way, value shifts from stand-alone clusters to integrated copy domain controllers and advanced displays. So yes, Europe steps down briefly around 2027 as legacy programs roll off ahead of new launches ramping. But underneath the business is rotating into exactly the right content. By 2029, new CDC and display awards leave us with a stronger, more SDV aligned revenue base. We have won and launched the premium end of it. the Audi panoramic display, the Mercedes [ MBUX], Superscreen, and the same [ SMICore ] platform is scaling into trucks at [ Scania]. Part of the trading group and Volvo Trucks and Volvo Construction Equipment. That is the trade-up captured in one region. We're no longer selling a cluster. We are delivering the displays across the cockpit and the computer that runs them more content per vehicle and better quality revenue. Now the region where I see the strongest growth ahead rest of Asia. Our sales grew to $1.43 billion by 2029, and close to 70% and more than 10x the pace of the market itself. And within that, our 2-wheeler revenue more than triples -- the chart here tells the rest in 2 lines. Our legacy Japanese business, Nissan and Mazda rolls off as those programs age out. But everything else, India, ASEAN and the new platforms more than doubles. The new business doesn't just replace that decline. It overwhelms it and the wins behind that are concrete, not hopeful, [ Mahindra's ] flagship SUV running a centralized computer with 3 12-inch displays and platform expansion at Toyota the CMR cluster and the Lexus ES display. Toyota deserves its own slide, but first on India. India is the engine inside that engine. So let me stay on it for a moment. Look at the trajectory from under $100 million of cockpit sales in 2019 and to about $900 million by 2029. And this is not a forecast we are reaching for. It is built on a steady cadence of wins from our first SmartCore in 2021 to a wave of new awards ever since. Three forces line up here at once, which is rare. India's vehicle production is growing faster than any major market on earth. The mass market is moving to advanced displays, not just premium exactly what we built and 2-wheelers are digitizing on top of all of it. And here is what makes it real. Both of those $900 million is already booked. Nearly $2 billion in signed business across passenger cars and 2-wheelers in just 3 years. Toyota represents one of the best examples of our customer expansion strategy. Our first Toyota award came in 2021. Since then, the relationship has expanded rapidly with approximately $2 million of new business booked between 2023 and '25 and '22 product launches forecasted from 2026 through 2029. As a result, Toyota revenue is expected to increase more than fivefold to approximately $390 million by 2029, making to 1 of our top 3 customers. Our technology will be on 6 of Toro's 10 best-selling vehicles and 7 of top 10 best-selling Lexus vehicles by 2029. Toyota for us is more than a single account. It shows how our growth model works. We typically begin with a focused technology win. We then execute, build credibility and expand across additional vehicle lines and platforms. Once they established, these relationships tend to be highly durable and create opportunities for long-term, profitable content expansion as well. And Toyota is the clearest proof of it. Two-wheelers may be the most underappreciated part of our story. It's a large market, about 51 million units a year addressable outside of China, across India, Southeast Asia and the rest of the world. And it's going through exactly what cars went through a decade ago, digitalization. We've seen this move before, and we know how it ends. Here's why it's ours to win. In cars, we compete against every global supplier in two-wheelers, the field is regional. Capable players but each strong in one or a few markets with no global cockpit platform behind them. Our edge is a proven automotive cockpit platform we can put on a motorcycle faster and at competitive cost. And the economics are what make this attractive, not just the wins, we are not engineering a 2-wheeler cockpit from a blank sheet. We are adapting a platform we already built for cars. The hardest, most expensive engineering is largely done through our platform strategy. 2-wheelers are early on that curve on that same curve. That's why the market leaders are already with us, Honda, the largest 2-wheeler maker on the planet, plus Hero, TVS and [ Royal Enfield ] and the premium microns, one in Europe and Harley-Davidson. From mass market commuters to premium motorcycles, we are on both ends of the curve. And our 2-wheeler revenue is compounding at over 38% a year. Commercial vehicles are a genuinely new growth engine for us. And here, the driver is regulation and productivity, not relying solely on vehicle volume. In Europe, 3 forces converged at once, safety regulation, fleet operators demanding connected and managed cockpits and driver comfort as fleets compete to attract and retain scarce drivers. Together, they force truck makers to consolidate the cockpit which proved real OEM demand for integrated driver-facing compute. Exactly what we built. So we built one viable platform, and we are rolling it out in waves. Europe proved it, regulation forced the conversion. The Americas are expanding it we see growing demand towards more content per vehicle. And India and the rest of the world are our next target, the next wave, where most of the growth still sits ahead of us. The customer list is already blue chip, [ Daine, Scania], MAN, Renault Trucks, Volvo Trucks and Volvo Construction Equipment, Oshkosh and international. And the business here is compounding at over 43% a year. Across all 3 regions, by 2029, we see up to 3 million trucks a year at $200 to $400 of cockpit content each. At $600 million to $1.2 billion market opportunity, we have proven the platform and won anchor customers which positions us well to compete for a meaningful share as it develops. We've now seen our growth engines, the regions, Toyota, 2-wheelers, commercial vehicles. And one thread runs through all of them. Our growth comes from content, not unit volume. China is where the threat was tightest. And it's transforming fast enough that I've given its own section. At the start, I told you China's incentive-driven volume era is over. And the next leg is tech and premium. This is what that looks like. China's car volume is essentially flat, but that flatline masks a structural shift. Around 2025, the incentive policy changed and the market we set. It stopped running on subsidies for entry-level vehicle volume and started running on demand for technology and premium content. You can see the shift in 2 moves. First is share. Auto production is flat. But underneath Chinese OEMs are taking it and global OEMs are giving it up. And the inflection is right at the 2025 policy change. Second, value. The growth that's left is moving upmarket into premium segments built on intelligence, luxury and lifestyle. The domestic leaders winning this aren't competing on price anymore. They're competing on technology. For us, that played out in 2 phases. As the model unwound, our China sales dipped. Then came back stronger to a new high of $693 million by 2029. The chart shows why the mix completely flipped our sales to domestic Chinese OEMs more than doubled, while our sales to the global OEMs more than half. We did not just write the recovery. We changed who we write with. That reversal is the whole point. The OEMs winning in China are the ones treating technology leadership as the battleground, which is exactly where we compete. The domestic leaders driving it, Geely, Cherry, SAIC, are the customers we partner with on AI-driven eCOS. China did not get smaller. It got stronger and then it got better. And it rewarded the suppliers position for what comes after the reset. We are one of them. As said, the value is moving upmarket. So let me show you exactly where it's going. China's market stacks into 4 tiers. At the base entry and mainstream, the mass market, biggest by volume. Above them is premium. We established luxury names now joined by domestic premium brands like [ Zika, Freelander and Voya], And at the top, the tech-first brands, Xiaomi, Li Auto, [ Xiaopeng]. Who built cars around software and intelligence. Until 2025, almost all the growth came from the bottom. Entry and mainstream selling volume at competitive prices. That engine is now under pressure and the growth has moved up. You can see it on the chart the premium and [indiscernible] first brands expanding while the mass-based flattens. And the top is exactly where we are focusing on: premium tech first and the mainstream leaders climbing into them. These are not customers who want a part suppliers simply. The tech first brands are racing on cockpit technology and the ambitious mainstream players. Chery, Geely are pushing just as hard. They need advanced compute AI carpet and they need a partner who can build it with him, which is exactly the role we have built ourselves for, not a supplier, but a co-developer. Let me show you then how that's playing out for us. So why us? Why the 3 of the leading Chinese OEMs choose us as the codeveloper of their AI cockpit, not a simple supplier? It comes down to what AI has changed. With AI in the cockpit, 2 things got hard. Hard enough that these OEMs needed a true partner who could build with them, not just sell to them. First is speed. AI-based cockpits move at China's pace, and China's pace is relentless. Not every suppliers can keep that up. We can because we spent years building the platform that lets us. China speed is not something we improvised, it is something we engineered. Second, the life cycle never ends. AI models refresh far faster than the hardware they run on. So this is never a onetime sales. It is continuous co-development release after release, and the proof is on the board that you see on the right. Over $1 billion in lifetime high-performance compute program wins. We are the only Tier 1 chosen by 3 of the leading Chinese OEMs for the AI-powered compute, GD, Cherry and SAIC's IM brand. And with SmartCore high-performance compute on Qualcomm's Snapdragon [ carpet light ]. We are among the first to bring a mature production-ready AI coped to scale. Now here's why this is bigger than China. AI itself is regulated. Today, these cockpits are built for the domestic market. But these OEMs are not staying home. Terry is already one of the China's largest exporters. Geely's brands span the group. And as their cars cross borders, their cockpit also will need to cross with them. That's the shift. AI did not just win us programs in China. It turned us from a supplier into a technology partner, positioned to grow with the most ambitious carmakers in the world, in China and well beyond it. I opened up by telling you that growth has been positioned across this industry. You've now seen it market by market, and you have seen that we were positioned with it. So let me leave you with the one idea underneath all of it. We do not grow because the world build more cars. We grew because the world builds smarter ones. Growth itself is moving across regions, customers and segments and our footprint is moving with it. Technology is raising the content in every cockpit, and our global scale is what lets us capture it faster. And more broadly, than most. The industry is changing. We are not chasing that change. We are built for it. Thank you. Next, I'll turn it over to my colleague, Joao Paulo. Thank you.

Thank you, Francis. Good morning, everyone. My name is Joao Paulo Ribeiro. I'm the Senior Vice President for manufacturing operations, supply chain and it's a pleasure to be here today to discuss how we think about manufacturing operations at Visteon and how manufacturing operations became a strategic differentiator that supports growth, profitability and capital efficiency. As you've heard throughout today's presentations, vehicle architectures are becoming more digital and software defined, driving more content and greater manufacturing complexity. At the same time, much of the industry's growth is coming from regions such as India, South America and Southeast Asia, where success requires localized manufacturing, resilient supply chains and disciplined capital deployment. Our strategy is built in 3 pillars: first, a globally optimized manufacturing footprint, located close to customers and concentrated in best cost countries. Second, vision manufacturing technologies, automation and AI that improve productivity, quality and scalability. Third, selective vertical integration that lowers cost and improves supply chain resilience. Together, these capabilities support growth, expand margins, improve returns on invested capital and create a more resilient business. Let me start with our manufacturing footprint and why it provides structural advantage. Our manufacturing footprint has been intentionally designed to balance cost competitiveness, customer proximity and operational resilience. Today, we operate 14 strategically located manufacturing facilities supporting customers globally. Each week, we shipped more than 1 million products and support a highly complex launch environment with 86 new model product launches in 2025. Importantly, 97% of our manufacturing head count is located in best-cost countries, creating a structural cost advantage while maintaining proximity tocustomers. Another differentiator is our ability to internally develop and deploy innovative manufacturing solutions and technologies across our global network. Most importantly, this footprint provides the capacity and flexibility required to support future growth without significant infrastructure investments. Having the right footprint is absolutely essential. But the next step is ensuring that we continue investing in the right locations and with the right technologies and capabilities as customer demand evolves. Our investments are focused on supporting growth while maintaining strong capital discipline. Examples include our new facility in India. We'll go into production in 2027 to support local growth -- local OEM growth and 2-wheeler programs. In addition, we are expanding our plant in Thailand to support Japanese OEMs across the broader Asia region. At the same time, we are also expanding our manufacturing capabilities through targeted investments in technologies such as display bonding and magnesium injection molding. Our advantage is not simply investing in capacity. It's investing smarter. But by leveraging internal developed equipment and the very effective equipment reuse program that we've just implemented, we can scale faster capabilities and support customer growth while deploying substantially less capital. Having the right footprint, again, is important but not enough. The real differentiator is what we can do inside those facilities. This is where our innovative manufacturing technologies become a significant competitive advantage. As automotive electronics become increasingly sophisticated, manufacturing complexity continues to increase. displays inside our cars are becoming larger, thinner and more complex while quality standards continue to rise. [indiscernible] products such as cockpit and controllers and high-performance computing platforms, contain an order of magnitude, much more components than the traditional instrument clusters and infotainment systems with the heavy software complexity nowadays. But at the same time, manufacturing cycle times must continue to decrease. Our response has been to develop specific manufacturing technologies that directly address these challenges. The next 4 examples I will show you are not technology demonstrations. Those highlight a capability that differentiates Visteon. We have the ability to internally develop and globally deploy manufacturing technologies that drive productivity, reduce costs, improve quality and support margin expansion. The first example I'm going to show us on automation for one of the most complex displays in the industry, which is actually on the display over there. The process that you can see in this video was developed entirely in-house by Visteon to manufacture a highly complex curve display for a premium OEM. These products are among the most challenging displays in the industry to manufacture at to motivate quality and scale, given the tight tolerances the radios that we have to perform in the glasses and the optical quality that we have to obtain. The ability to manufacture curve displays at high volume with competitive yields represent a significant technical and manufacturing advantage that fuel suppliers can achieve. A key takeaway is not automation, but it's the business outcome. This in-house developed manufacturing process delivers approximately 30% faster production speed. We are around 40% lower cost than external suppliers and a 70% reduction in direct labor requirements, which is a meaningful competitive advantage as cockpit systems continue to evolve. This is a clear example of our manufacturing innovation creates barriers to entry. We support growth, improve profitability with these type of solutions and definitely solidifies our position with leading OEMs. Let me walk you through the next example to illustrate how we are redesigning manufacturing processes to improve speed, cost and scalability. This video showcases the third generation of our Visteon display bonding technology in a high-volume 2-wheeler program, developed and industrialized entirely in-house. This process fundamentally simplifies display bonding by eliminating the need for a perimeter than reducing material consumption, process complexity and equipment requirements. As a result, production cycle time reduced by 75%, while material cost decreased by more than 10%. The simplified process and significantly higher throughput allow us to produce substantially more with less equipment, while improving productivity, profitability when compared to the previous generation of bonding solutions. Most important, this is not a off-the-shelf technology. This Visteon technology delivers lower costs, higher productivity, lower capital requirements and the capability that is very difficult to replicate. The next example we'll show you how we are applying artificial intelligence to improve operational performance across our factories. This internally developed AI platform continuously monitor production activity in real time, identifying conditions that can lead to downtime productivity losses or even safety risks. This system identifies situations where machines or operators require support, enabling faster intervention before issues impact operations. The result is approximately a 10% productivity improvement through reduced downtime and faster response to operational issues. Developed in-house, it can be deployed globally without recurring software licensing costs, typical associated with these third-party platforms. The concepts and capabilities developed to improve our factories performance also contributed to the development of [ Dx Sigma], Visteon's new industrial edge AI product line developed in collaboration with Qualcomm Technologies. This demonstrates our innovation originally created to solve operational challenges within our factories can evolve into scalable technology solutions with broader applications in the industry. The same AI capabilities that improve in this case, productivity can also be applied on quality management. Let me show you. Our AI-enabled quality monitoring solution improves inspection accuracy and has reduced false rejection rates by approximately 75%. Because it was developed internally, deployment is straightforward and can be rapidly scaled across our global manufacturing network without with program -- minimum programming needs. More importantly, this solution can be deployed across more than 3,000 existing vision systems worldwide with minimal additional capital investment. This allow us to improve quality performance at scale while maintaining a strong capital discipline. To summarize, the common theme across these examples is our ability to create operational advantages through in-house developed technologies. But let me walk you through another area where we are creating structural advantage that has been repeated before from -- with my colleagues. Beyond automation and AI, we continue to expand our vertical integration strategy to reduce costs, improve competitiveness and supply chain resilience. Displays are becoming larger and more sophisticated, and they required increasing complex structural frames to integrate them into the vehicle cockpit. Visteon is uniquely positioned with in-house lightweight magnesium injection molding capability producing these critical components internally and enabling a superior combination of weight, cost, quality and design flexibility at a much lower cost than buying these parts in the market. We are complementing this capability now with an in-house premium cosmetic powered coating on injecting magnesium parts, eliminating the additional need for plastic components to trim the parts and further reducing costs and manufacturing complexity. These capabilities are already generating strong customer interest with business awards on passenger vehicles and wheelers, demonstrating our selective vertical integration supports long-term margin expansion and supply chain resilience. Needless to say, these capabilities are extremely difficult to replicate because they combine deep process know-how, manufacturing expertise and vertical integration experience. So let me finish with these slides. Looking forward, our priorities remain very clear. Support increasing complex displays, cockpit and high-performance computing products through the next generation of advanced manufacturing technologies, continue expanding in the fastest-growing markets and scale, AI-enabled systems and vertical integration initiatives across our operations. We want to also to execute this while maintaining disciplined capital allocation and attractive returns on invested capital. And if I have you to leave with one message today, it is this one. Manufacturing operations is not simply a cost center. It is a competitive advantage. Our footprint supports growth, our proprietary technologies improve productivity and quality. Our vertical integration strategy lowers cost and enhance its resilience. And together, these capabilities enable profitable growth, margin expansion and stronger returns on invested capital, creating long-term value for our customers and shareholders. Thank you. And let me introduce now Jerome to take us through the next presentation.

Thank you, Joao Paulo. Good morning, everyone. Capitalizing on the key themes that have been highlighted today, I will start with our performance over the past several years showcasing solid execution in a very dynamic setup. I will then provide an update on our 2026 outlook, highlighting that we are currently trending towards the high end of the range for sales and towards the midpoint of the range for EBITDA. After that, I will introduce our midterm financial targets, outlining key building blocks that will drive meaningful growth over the next few years. And then finally, I will walk through our capital allocation framework and how we plan to deploy capital to support growth while increasing returns to shareholders. So let me first step back and look at our performance over time. We start in 2019, which provides a clean baseline before COVID. Since then, the operating environment has been highly dynamic. We have navigated the impact of the pandemic, multiple semiconductor supply disruptions shift in customer mix, especially in China and an ever-evolving powertrain landscape, all this while going through a structural transition towards SDV. Against that backdrop, our performance has been resilient. Looking at sales, customer production over this period declined by approximately 14%, while our sales have increased by 28% and 23% if you exclude customer recoveries. Looking at sales, this reflects a constant outgrowth driven by content expansion and [ HDV ] alignment. Over the last 3 years, growth has been more moderate, reflecting China market shifts between domestic and international OEMs and a slower [ EV ] adoption, especially in the U.S. Both dynamics have been headwinds to Visteon's growth in the last few years. However, the underlying drivers of the business remain solid with all regions outside of China, growing revenue over the last few years on average, mid-single digits. During this period, we also laid the foundation for our next phase of growth, led by the STV transformation, adding new products, new customers, new nameplates and new nonautomotive segments. Adjusted EBITDA margin has improved by more than 500 basis points since 2019, reaching over 13% in 2025 driven by scale, a favorable mix shift towards higher value [ SDV ] products with strong cost focus and operational efficiency. Adjusted free cash flow has increased fivefold with conversion rates recently above our 40% objective. This reflects both increased earnings and disciplined working capital and CapEx management. Finally, our ratings with S&P and Moody's have improved 3 notches since 2018, now just below investment grade. Moving to our outlook. We're not changing our guidance, but I would like to highlight that our sales are currently trending towards the high end of the range. Our EBITDA is tracking towards the midpoint of our range and adjusted free cash flow is tracking towards the low end of the range. Starting with sales, we continue to see stable overall demand based on current customer schedules. The continuation of the strong sales trajectory we showed in Q1, boosted by high-profile launches as well as memory recoveries is expected to support revenues trending towards the high end of the range. On profitability, EBITDA performance remains solid, supported by operational execution and the progress on customer negotiations for memory recoveries. However, further cost pressures initially seen in memory are now extending to other purchase components, making it difficult to fully offset inflation in 2026. For this reason, despite sales tracking towards the high end of the range, we believe that our EBITDA will be tracking towards the midpoint of the range or $475 million. On the free cash flow side, as indicated in our Q1 earnings call, we're tracking towards the low end of the range. This reflects a deliberate increase in inventory targeted at derisking supply continuity in key components such as semiconductors and displays. This will impact 2026 cash flow and continue into 2027, but this does not change underlying cash generation of the business. As you know, the semiconductor memory industry is going through a significant structural change with suppliers putting priority on higher growth technologies, leading to tighter capacity and cost pressure as well as accelerated end-of-life activities in automotive. To mitigate this, we have implemented a proactive strategy focused on long-term supplier engagement, capacity agreements, diversification and commercial recoveries. A key milestone in this effort has been the execution of a multiyear capacity agreement with our largest memory supplier, strengthening visibility and supply continuity for the next few years. In parallel, we continue to develop strategic partnerships with other key suppliers to further improve supply flexibility and support future technology road maps. In addition to strengthening strategic supplier relationship, we are actively diversifying our supply base by evaluating alternative sources, including nontraditional automotive suppliers where technically appropriate. From a costing standpoint, we believe our 2026 exposure is now largely contained, although slightly higher than the original guidance assumption we had at the beginning of the year. We now expect memory-related cost inflation to represent about 2.5% of sales for 2026. With regards to recoveries, we're progressing well, and we remain on track to recover most of these costs for the full year. These recoveries represent approximately 50 basis points of margin impact, dilution and leakage to our 2026 EBITDA. Looking ahead, pricing will depend on supply-demand dynamics and additional capacity coming online at some point will help ease some of the price pressure. So for planning purposes, we have assumed an incremental cost headwind of approximately 4% of sales in 2027. This is based on what we know today, and we're assuming that the majority is expected to be recovered from customers. The total impact from memory inflation is anticipated to have a further incremental margin impact in 2027 of approximately 100 basis points. To be clear, though, I would like to stress that this is a planning assumption, and we will continue to actively manage both sourcing and commercial discussions as conditions evolve. Before going into our midterm targets, let me break down our performance versus what we laid out at our 2023 Investor Day. Beginning with sales. As previously mentioned, the industry at the time looked very different, stronger international OE momentum in China, accelerating EV adoption, especially in the U.S. and a strong global pipeline of new product launches. Our growth expectations at the time reflected those dynamics. But over the last 3 years, these dynamics have evolved significantly. In China, market share shifts have impacted international OEs very negatively. In the U.S., U.S. adoption has been significantly slower than anticipated. And more broadly, we have seen a higher level of program cancellations across the industry. As a result, our sales trajectory has been below our 2023 expectations. However, recognizing this, we have taken decisive actions to reposition the business, and we have built a more diversified growth algorithm going forward with tangible proof points. On the profitability side, despite lower volume, we are still within reach of our 2023 target for margins, which was 13.5%. Importantly, if you were to adjust for the impact of lower sales, our underlying margin performance would be well ahead of our 2023 plan, highlighting the potential margin expansion that we have as we grow sales. This reflects constant execution across multiple levers, including disciplined commercial actions, product cost optimization, improved engineering productivity and increased vertical integration. On the cash flow side, from 2023 to 2026, we're on track to generate approximately $900 million of adjusted free cash flow, exceeding our original target of $800 million. This performance has been supported by strong earnings, disciplined working capital management and a focused approach to capital expenditures while continuing to invest in the business. So overall, while the top line came in below our original expectations, the quality of our earnings and cash generation has improved. We have also built a more resilient and diversified foundation for the next phase of our growth. Let me now move to our outlook and walk you through the key sales metric assumptions that we have supporting our midterm targets. So to put things in perspective, we are not only showing on the right-hand side of the slide, key sales metrics embedded in our outlook, we are also comparing these with the key assumptions from our last Investor Day as well as how they developed to date. Our planning is broadly aligned with the latest June S&P forecast, which is expected to be flat for Visteon's customers from '26 to '29. This reflects ongoing mix as well as regional dynamics. It is important to mention that our growth is not dependent on underlying production growth. It is more and more driven by content expansion, new customer wins and growth in nonautomotive markets, reducing our reliance on overall industry volumes. By the same token, reliance on new customer car and cockpit launches on which Visteon will have content going forward has been much derisked compared to the high number of new launches that were anticipated in 2023. A few other data points highlight as well that our outlook is balanced and taking advantage of multiple growth drivers. First, customer concentration is decreasing meaningfully with no single customer expected to represent more than 15% of our sales by 2029. Therefore, our top three customers in 2029, Ford, VW and now Toyota will represent no more than 1/3 of our business. Second, we are positioning ourselves mostly as a cockpit supplier and no more than 2% of sales will be generated from battery management systems in 2029. Third, our exposure to international OEs in China continues to decline as we reposition the business towards domestic players. And fourth, nonautomotive markets, 2-wheelers, CV, but as well IoT are becoming a more meaningful contributor of our sales, reaching 13% in 2029 versus 5% today. These businesses tend to be countercyclical to the automotive business. Finally, recoveries will continue to be part of our sales for some time given the impact that we currently see on semiconductor cost increases, especially on the memory side. Overall, while production remains flat over the period, our growth is becoming more diversified and resilient, reflecting the progress we have made in strengthening our growth model. Building on these assumptions, we expect to deliver consistent growth over the period, reaching approximately $4.8 billion of sales by 2029, an 8% CAGR. Moreover, this is driven by a diversified set of growth drivers, not a single factor. Starting with targeted growth customers, our expansion with Toyota and Lexus will contribute more than $300 million of incremental revenue by 2029, supported by 12 cluster and display programs launching between '26 and '29 across 22 car lines. Toyota is expected to reach 8% of sales by 2029. Additional targeted Asian OEs, Qatar, Mahindra, Maruti Suzuki in India, Hyundai and Kia in Korea as well as Honda in Japan are expected to contribute approximately $170 million. Combined, all these targeted Asian customers, including Toyota, will represent close to 50% of our growth going forward. In China, we are repositioning towards domestic OEs and next-generation cockpit platforms, and these are expected to contribute around $400 million of incremental revenue. Non-automotive sales will expand significantly over the next 3 years, driven mostly by 2-wheelers and commercial vehicles. On the 2-wheeler front, sizable wins in India and more specifically with Honda launching in 2027 will add to this diversification outside of automotive. Launches on commercial vehicles with Scania and Volvo Truck will also contribute to this diversification. We're also assuming a modest level of sales from IoT in this nonautomotive bucket, leading to further diversification. By 2029, these three markets are expected to represent close to 13% of our sales. Finally, some of our traditional customers, mostly Ford, GM, Nissan and Mazda are expected to decline over the period. Combined with some specific product roll-offs, we're expecting North America customers to be a headwind to our 2029 outlook, partially offset by key European customers like Volkswagen and Mercedes and Engineering Services. In summary, our growth is expected to be supported by a broad set of drivers, reducing reliance on any single customer, region or product line. Our strategic initiatives are reshaping our portfolio across regions, customers and products. So looking at the regions, our portfolio continues to get indexed towards high-growth markets and a larger share of our business will be shifting towards Asia over time. This reflects strong underlying market growth in the region and increased exposure to new customers, including targeted Asia growth customers as well as growth in the 2-wheeler market. We expect China and India Visteon's sales to double in size, supported by our increased presence with the domestic OEs in China and multiple growth initiatives in India. By 2029, Asia is expected to represent approximately 44% of our sales, up from 32% today. Europe continues to grow steadily, supported by SDV-related programs and new product launches aligned with next-generation platforms. In the Americas, we expect a gradual decline with the D3s, primarily due to product roll-offs, partially offset by diversification with Japanese OEs and commercial vehicle customers like TRATON and Volvo Truck. Overall, the shift in regional mix reflects a more balanced and growth-oriented portfolio. Turning now to our product portfolio. Our growth is mostly driven by cockpit domain controllers and displays and reflects the shift towards digital and centralized architectures. Equally, we should not forget that our traditional products are still representing 45% of our business in 2029. Cockpit domain controllers are expected to grow significantly as OEMs adopt more centralized computing platforms, both in China with domestic OEs and globally with standard domain controllers. This includes high-performance compute platforms in China with Geely, Chery and SAIC as well as more standard domain controllers in India with Mahindra and Renault and BMW in Europe. Consistent with what we have seen in recent years, displays also remain a key growth driver, supported by a strong pipeline of launches across both automotive and nonautomotive customers like Toyota, Mercedes and Volvo Truck. Finally, on clusters and infotainment, we -- while we expect some decline in stand-alone clusters and infotainment products over time, it is important to note that this is more than offset by the incremental content that we are capturing in new SDV architectures. So in summary, by 2029, we expect three product lines, CDC, display and cluster to exceed $1 billion in sales, reflecting both growth and mix shift towards higher-value content. Turning now to profitability. We're targeting an EBITDA margin of 14.1% by 2029 with steady expansion over the period. This improvement is driven by a combination of scale, product cost optimization and continued efficiencies in engineering productivity and SG&A. In addition, we are progressively leveraging AI-driven tools to improve productivity and enable growth without a proportional increase in resources. At the same time, we will continue to reinvest in the business, especially in capabilities and technology platforms such as cognitoAI to support long-term growth. We expect incremental margins to be around 20% with contributions from volume leverage and cost initiatives. From a phasing standpoint, 2027 includes an incremental headwind from memory inflation of approximately 100 basis points of margin. This is compounded by the roll-off of legacy recoveries and the nonrecurrence of certain 2026 onetime items. Margin expands more meaningfully in 2028 and 2029, supported by volume growth, easing inflation and operational efficiencies. Overall, this reflects a consistent path to margin expansion while continuing to invest in the business. Turning now to cash flow. We expect to generate approximately $1 billion over the period, progressively increasing our conversion target from the mid-30% range in 2026 to 60% in 2029. This improvement is driven by EBITDA growth, operating leverage and disciplined capital management. From a phasing standpoint, working capital is expected to be a headwind in the near term, mostly due to higher inventory levels before normalizing over the period at structurally higher levels. Capital expenditures are expected to be at approximately 3.5% of sales over the period, supporting growth and vertical integration. Overall, this reflects a highly cash-generative and capital-efficient model. Turning to capital allocation. Our priorities are maintaining a strong balance sheet, investing for growth and returning capital to shareholders. Our emphasis will be on returning a more meaningful amount of cash to shareholders. We believe that this will continue to drive long-term shareholder value. Maintaining financial flexibility remains critical for us given the cyclical nature of the industry. At the same time, as the business has become more resilient and diversified, we are focused on managing our balance sheet efficiently. We do not intend to exceed our targeted net cash levels, which we have set at $150 million with our debt remaining unchanged at $300 million. Second, we will continue to invest in the business to support future growth. This includes disciplined capital expenditures to fund new programs, vertical integration and technology platforms as well as selective bolt-on M&A, strengthening our capabilities and expanding our offering. And third, we're increasing our focus on returning meaningful capital to shareholders. This will be driven primarily through share repurchases, complemented by a dividend that we expect to grow modestly over time. Overall, our framework is designed to balance financial discipline, continued investment in growth and increasing returns to shareholders while maintaining flexibility through the cycle. Between 2026 and 2029, we expect approximately $1.25 billion of cash available for deployment, combining free cash flow generation of approximately $1 billion and existing cash on the balance sheet of approximately $250 million. Our priority is to return a significant portion of this to shareholders. We're targeting approximately 85% of this available cash, around $1 billion to be returned to shareholders through a combination of share repurchases and a modestly growing dividend. Share repurchases will be the primary mechanism, providing flexibility and allowing us to adjust for market conditions, while the dividend provides a consistent and growing component of total returns. The remaining 15% of cash will be used for debt service, restructuring-related outflows and other obligations, including dividends to JV partners, ensuring we continue to manage the business efficiently. At the same time, we will remain selective with bolt-on acquisitions. We want to keep a disciplined approach, focusing on opportunities that are strategic and financially accretive. Some of the M&A opportunities that we evaluated earlier this year did not meet our disciplined criteria, and therefore, we did not proceed. We will remain selective and pursue M&A only when it creates clear value, adjusting our capital structure if needed. Overall, this framework allows us to continue investing for growth while returning significant capital to shareholders. As part of this allocation strategy, we're announcing today a new $800 million share repurchase authorization through the end of 2029. This represents a significant commitment to return capital to shareholders and reflects our confidence in the cash generation profile of the business. Over the period, this program is expected to result in significant reduction in shares outstanding. Combined with our dividend, this effectively translates into returning approximately 100% of free cash flow to shareholders over the period. Overall, this reinforces our commitment to deliver consistent and meaningful shareholder returns alongside continued investment in the business. So in closing, we are confident in the path for Visteon. Over the past several years, we have fundamentally strengthened the business. We have expanded and diversified our growth drivers. We have improved our margins and built a more resilient operating model. Looking ahead, we see a clear and balanced value creation framework. We're targeting high single-digit sales growth, continued margin expansion to over 14% and cumulative free cash flow generation of approximately $1 billion over the period. At the same time, we expect to return approximately $1 billion of capital to shareholders, primarily through share repurchases, complemented by a growing dividend. Overall, this is a model that combines growth, profitability, strong cash flow generation and meaningful shareholder returns. We believe that this positions Visteon to deliver more predictable performance and sustainable value creation over the cycle. With this, let me invite the team back on stage, and I will open it up for Q&A. Thank you.

Right. Can you guys hear me? We had a question from the prior session that I moved over, just thought it was more appropriate. This is from [ Terese Patel ] from Wolfe Research. With growing CVC and HPC revenue, more engineering services and a high degree of vertical integration in displays, should that support an increase of incremental margins overall versus your baseline of low 20%?

Yes. Let me take that one, Ryan. So overall, the shift that we are seeing towards high-value products, SDV, yes, mostly the SDV transformation is leading to higher content and therefore, higher volume. We get a lot of leverage through more sales related to these products increasing and therefore, that has -- that will be helping our margin quite substantially. I would say that about 2/3 of our margin expansion in our 3-year horizon is coming from increased scale, and these products are definitely contributing to this.

Can you walk through -- this is from Joe Spak from UBS. Can you walk through your memory assumptions in the midterm outlook? What type of pricing and pass-through and/or recovery from prior are you assuming over the period? How does that impact the margin trajectory? And if we were to break down the 8% CAGR, how much of that is related to CPV growth for mix shift? And how much is -- let's just stop with memory first and focus on.

Memory. That's a very important point.

Beyond 2027.

Yes, especially as we go not only into '27, but as well beyond. So as I've mentioned, memory cost increases have been quite substantial already in '26, and that's related to the tight supply that we're seeing. We think that as we go forward, especially in '27, before additional capacity comes on board, we think that supply will be probably even tighter in 2027. And therefore, prices will probably go up even more substantially than what we've seen in 2026. So -- and you've seen just this morning, in fact, the Apple releasing some news about their increase in memory prices and therefore, passing that on to customers. So as far as we're concerned, we have about a 50 basis point impact to our margins in 2026 related to memory cost. And we're assuming -- and it's at this point, an assumption. We're assuming that we'll have a 100 basis point incremental impact in 2027. We will continue to monitor the situation, especially on cost, but as well, obviously, on supply. And we are assuming that most of that will be recovered from suppliers, but will still -- from customers. We'll still have a pretty significant negative net impact going into '27. As we are going into '28 and '29, we've assumed some slight relief, but the reality is that these memory costs will still remain quite elevated in '28 and '29. Overall, just to step back, the 100 basis points that we are seeing incrementally in 2027 will stay all the way to 2029. So without memory cost impacts in 2029, our EBITDA would have been closer to 15%. So that gives you the size of the impact of memory.

As a follow-up to that, Winnie Dong, I wanted to understand if you can talk about the drivers for the step-up in the latter part of the forecast in 2021.

Yes. So memory cost, as I said, remains fairly stable from '27 to '29. We've assumed just a little bit of easing, but nothing major. Most of the improvement that we see in the margins going forward for '28 and '29 are coming from, obviously, volume and scale as well as an improvement in AI-driven initiatives impacting mostly favorably engineering and SG&A as well as the improved benefits that we have on vertical integrations. So I would say that we're still using many, many bullets, if I can use that word, to be able to improve our margins in '20 and '29, not just one single driver that will help us.

I'll give you a break here, Jerome. Media reports have indicated that USMCA require increased U.S. content requirements. While we know that you are MCA compliant -- USMCA compliant, how might increased U.S. content requirements impact your North American footprint and sourcing strategy from Dan at Barclays

Yes. Maybe I'll take that one. So content increase requirements are fundamentally problematic for the whole industry because when it comes to electronics, there isn't a lot of U.S. content that we can switch to, right? So we believe it's going to be a broad-based impact if that were to happen. in our assumptions here, we have assumed that there are no changes to USMCA that continues. However, I do want to leave you with another point that's important to understand. When we talk about USMCA and increase of duties, et cetera, the devil is in the details. There's a lot that has to be understood about exactly which product, which category, how is it defined that is only really clear when all of the rules are established, making a broad-based statement about that is generally a bad idea. This has been our experience over the last few years. So I would suggest one more thing and then we can move on. With the footprint that we have that Joao [indiscernible] talked about, we are in a better position than most suppliers to be able to move the production to whichever place has a favorable cost structure, including duties. And one of the benefits we have is because of the deliberate approach that we've had to have all of the capabilities in all regions, we are able to move that production relatively easily. And we've had to do that in the shortage era where we had to change a lot of things dynamically. So I think we have developed some capabilities that allows us some flexibility

Okay. We have a number of questions related to Ford and GM from a number of coverage analysts. I'll just pick up one of them. What's taking place with the North America customers, Ford and GM out to 2029. Revenue gets cut in half over the next 3 years. Is this a function of cluster and infotainment business going to a competitor for their next-gen domain centralized architectures? Or is it something else? Does it also hit on the industry shifting to the competitive landscape to active safety and infotainment converging?

So as you probably know, most of our business with Ford and GM in electronics has been clusters. And it is true that some of our large cluster programs have been ramping down. And it's also public. So I don't think I'm sharing anything new that these OEMs are also looking at in-sourcing some of their next-generation [ Cs ], if you will. So we are in the process of transitioning to displays as an alternative product. We don't have the CDC business with them, but we hope to get some share of the displays. We have made some progress already, which is offsetting some of the ramp down. And our opinion is that OEMs as large as they are, generally will continue to need help even if they make this one step with our CDCs. We have never seen this work out where we have many, many examples, whether it's VW, Renault and other companies that have tried to in-source, but then had to still go back to the supply base for help. We do believe something like this is possible, and we continue to stay engaged and hope to get some portion of the electronics business in the future with them. Anything you would like to add, Francis?

I think you answered it well. We're staying relevant with both customers pretty proactively. So we will continue inquiring for further opportunities related to the specialties we have and especially with our experience that we are building in those highlighted programs in China that we explained to you today, the AI-based high-performance compute systems. I'm pretty confident that in the near-term future, we'll be getting opportunities or getting a lot of inquiries, what kind of products and technologies we actually have in-house that can aid their necessary areas of support as well.

You're rolling out AI globally in your own facilities. What's the time line and how much annual savings? Is this a product that would be part of your IoT business?

Yes, I can take that one. So AOI, so over time, for the past few years, we have been implementing several strategies and techniques with a full deployment of lean manufacturing in our facilities. AI, what it brings now, it brings an additional dimension of improvement that we can obtain by deploying it globally. In Visteon, we -- I mean, a couple of years ago, we've created globally a lean academy to train people to develop ideas and strategies. And late last year, we've developed -- expanded it to AI academy. So now we have pretty much a global strategy and mechanism to generate ideas, which will continue for the future to come. In terms of timing plan, we will have the first five big strategies of AI implemented towards the end of this year in all plants. And we are expanding fully with more AI technologies and mechanisms and tools throughout 2027.

And maybe if I can comment a little bit on the cost savings. So there are substantial, and they are embedded in our forecast, obviously, we need these kind of cost savings to be able to offset not only pricing we give to customers, but also some of the inflation that we have. If you step back and look at our incrementals that we have for the next 3 years, 20%, yet with pretty significant memory cost increases, some of it being obviously recovered from customers, but we still need a lot of actions from manufacturing, from vertical integration, from engineering as well to be able to offset some of these costs, and that's where AI helps us. So it's embedded in our plan. And again, it is a great help to offset some of these costs and be still at 14% by 2029.

And is this the product that you guys have in your own manufacturing facilities that are actually going to be what you're selling externally? I guess.

Yes, maybe I can take that. So the inspiration was certainly what we were doing within our own plants, right? You don't want to offer a product to customers that hasn't really been proven. So the asset that we found ourselves with when we started to think about where do we take the AI competence and the IP that we were developing for automotive, where do we deploy that, right? It became pretty evident that the best opportunity for us was kind of eat our own dog food first and then build a product based off of that, right? And so this dog [ fooding ] concept is very popular in other parts, automotive doesn't necessarily use it. But always when you think about AI, think about the data. Without data, AI has its limits. It's general purpose, yes, it's intelligence. But for business applications, you need data. And we have 14 plants that are collecting data every day. And that's the asset that we have that we can tune and optimize those AI models to make sure that they deliver value and then we can offer it to the rest of the world. So absolutely, yes.

A number of questions, not just on GM and Ford, but also some of the other OEMs that we highlighted. But I guess I'll just talk about the question related to your growth coming from China and India primarily. Are those coming in at lower margins? And what is the margin profile of the let's there. Are these coming at lower margins? And what is the margin profile on a customer type basis?

Yes. I'll take that. Generally, our margin tends to be pretty uniform across the board. They vary a little bit by customer from time to time. China is pretty much in the ballpark, I would say, in terms of margins. We are not -- think about it this way. We're not competing with the -- in the low end of the market where you have 10%, 20% price reduction that is requested every year. We are competing at the high end of the market. We are -- as it's been said today, we are a partner in the development of a product. So definitely, in this case, we have, I would say, better prices than what we would have at the low end of the market. So the answer is no, we are getting this business at very decent margins. And what we always do anyhow, not just for China, but as well for all our businesses is that we keep on looking at how we can improve profitability either through vertical integration, VAD and other mechanisms. So it's a constant evolution, and that's how we've been able to improve margins substantially over the last few years. So it's -- it's just the process we go through.

And is there anything that we see in the nonautomotive customers, be it 2-wheelers, CVs and even now IoT that might differ from that story?

From a margin standpoint?

That's right.

Yes, these businesses tend to be a little bit more margin accretive than your automotive. So we like them because they are, as we said, countercyclical to the automotive business, and they tend to be a little bit more margin accretive. We see that definitely in 2-wheelers and CV. IoT, we expect as well better margins, although it's quite new. So we've been, I would say, conservative in our margin profile.

Okay. I wanted to give you a break, but the next question would be, how do you plan to take that $250 million of cash off the balance sheet in the near term? Can the $850 million, I guess, $800 million share authorization that what we have left over from our existing share authorization, can that cadence be more balanced? Or is it more weighted towards the near term or the full forecast period?

Yes, definitely. So we'll -- so our goal is ultimately to be much closer to our targeted net cash level that we've established at $150 million. So with this $250 million kind of excess cash that we have on the balance sheet, we'll be able to deploy that reasonably fast. I won't give any specifics, but it's true that it will probably help us doing a little bit more in 2026 and 2027. And then as we generate more cash, as you saw in '28 and '29, then we'll use that generation of cash to be able to do share repurchases. So it's really going to be first deploying the $250 million and then in the second stage, the cash flow that we're generating. Timing is this year and maybe the first part of next year.

And then just to follow up on that, how much of your cash balance goes to M&A? And how much do you need to hold on your balance sheet?

Yes. So in the slide that I presented, there was nothing that was related to M&A. And maybe let me step back a little bit on the original $300 million that we had earmarked for M&A at the beginning of the year. We were working on very specific targets, and some of them did not come through. One came through the vehicle VO that Sachin talked about earlier on this morning but that is a pretty small acquisition from a size standpoint. So the other ones which were larger didn't come through. We went through a lengthy process, which I won't go into the detail and decided that it was not the right move for us. So therefore, we -- our strategy is now to deploy the cash that we have on the balance sheet on a go-forward basis. We'll still continue to be selective and look at bolt-on M&A, small acquisitions. And if one comes along the way, we'll definitely address it from a financing standpoint. Depending on the size, we may lever a little bit the balance sheet. It will -- again, it will depend on the dynamics. So at this point, the cash flow that we're generating goes to -- mostly to shareholders. and we'll be addressing M&A as we go.

Mark Delaney from Goldman is asking, how booked is Visteon for its 2029 outlook? And how does that compare to what was booked on the 2026 target given at 2023 Investor Day?

Yes. It has improved. We are -- if I remember well, I think in 2027, we are at 95% fully booked. I think it goes down to 85% for '28, and it's in the 75% plus for '29, which is better than what we had at the time in 2023. I think the most important point is the diversification of our growth drivers compared to what we had before. We've got a lot of growth drivers being, again, Toyota, some of the other targeted Asian OEs being HPC, obviously, in China, being 2-wheelers being CV business. So there's a lot of being IoT as well. So there's a lot of resilience in our growth model as we go forward, and we feel quite comfortable with it.

I think we're talking about very different environments as well, right? So if you go back to '23, when we talked about our outlook, I'll remind everyone that our leading customer for BMS at the time had a 1 million unit target for 2025, right? We're talking about 2 years from 2023. That million units turned out to be less than 200,000. We all know the reasons why, but that's one of the big reasons why in hindsight, it looked like, right, what were we missing. And by the way, we had been more conservative in our estimate than what we were being given by the customer by quite a bit, right? And it still came much lower than that. Now when you reflect that experience on to this outlook that we shared today, fundamentally, we don't have those types of dynamics in this outlook in terms of the risk profile that we carried back then just because it was very new. So I would say that in 2026, as we stand here, the new elements, if you will, obviously, you recognize HPC, but we have a different dynamic there in terms of AI, the importance of AI and more importantly, importance of AI to the Chinese OEMs for them to be able to compete. So we believe that it's a much, I would say, robust estimate as compared to perhaps.

And just using that as an example, so BMS at the time, we were planning on a $600 million growth over 3 years. HPC, we're talking about $400 million split between three customers. BMS was just one customer at the time. So it's a much more diversified business model. I think another important point as well, there was a frenzy of new car launches back in 2023. And the number of programs that were out there was very high compared to what we see today. And therefore, a lot of these were canceled and that's one of the reasons why a lot of suppliers like us have been able to get some recoveries from customers. But at the core, it's because a lot of the programs that were out there at some point were canceled. So we have a much more normalized level of programs as we go forward. And we feel that the industry has kind of rightsized these number of programs, which feels much better.

What would you define as the two to three areas of biggest risks and conservatism in the guidance? Could AI HPC surprise from broader adoption? Or is it just a share -- higher share in China?

So if you look at HPC, I think that's probably the one area that has the biggest upside. What we have assumed in our outlook is just the vehicles that we have been sourced on and on the customers that we are on. We haven't assumed anything in terms of winning a fourth customer. Obviously, it's not something that we wouldn't want. We are pursuing that as we speak. But we haven't made any of those assumptions in our outlook. The second thing is additional vehicles coming online with the customers that we already have. So those two dynamics are probably things that could drive a higher value for HPC beyond what we have assumed. Again, going back to what we just discussed, we didn't want to put a very high number and repeat the experience that we had with EVs. We would rather take it a little more conservatively and see how it develops and then update you as we go along.

Most of your peers carry a modest amount of net leverage in excess of cash. What is the rationale for continuing to operate with a positive net cash balance?

Yes. So we've got a leverage today, which is 0.6 in terms of gross leverage. And we've been operating like that for some time. We are maybe one of the smaller supplier in the industry. It has given us -- this level of leverage has given us a lot of flexibility in the past, especially during COVID, during the supply chain challenges that we've seen, and we would like to keep it this way. So our goal is to keep on generating cash and returning cash through share repurchase and dividends to shareholders. That's really the objective that we have. that's it in summary.

Okay. Visteon targets about $400 million in growth from domestic Chinese OEMs like Geely, Chery and SAIC by 2029. Given that these specific OEMs are aggressively shifting their premium high-tech vehicle lines and SDV architectures to the European market, how much of this $400 million expansion is expected to be captured via their international or European export platforms?

Yes. So I would say that what we have in the outlook is all primarily market in China. It is not -- just to be clear, not the potential of -- or hasn't been included in our outlook, the potential for exports to Europe. Having said that, we all know, as Francis mentioned, these are all companies that have strong export ambitions and they're on their flagship vehicles. The flagship vehicles are extremely important for these OEMs because that sets the brand image in their markets, right? So you fully expect that to also be exported. We haven't included anything because they haven't provided us with any specific data that we can use in our financials. As and when they do so, we will update it.

I think also just to add a bit more, our experience interacting with our customers in China is they do not do long-term planning like 3, 5 years ahead. They claim that the market itself is changing so dynamic. So the planning is more fourth 1, 2 years looking ahead. So when it comes to export, it does not mean that they do not aspire to export more premium cars. I think they will test the product and the car itself in China to meet the customers' demands. They talk to us a lot about the European customers' demands and also the expectations. So I do believe -- if you look at Chery, for instance, they export 50% of their global sales to outside of the market, Middle East, Europe, Southeast South America and so on. So -- and Europe, as we all know, which is public investing in Barcelona in Spain, have approximately about 140,000 cars production capacity this year, which means that they will have that aspire to be more aggressive in export markets. I do see -- and I do expect that we will be obtaining further opportunities.

Within each of your growth drivers, Toyota, China and non-autos, can you talk about the cadence of when you expect these to roll on in your outlook?

Toyota, who else?

It was Toyota, China and non-autos, but just growth drivers in general.

Yes. So in terms of the cadence, that's right. So I think you showed the cadence for Toyota on the slide, so you will be able to refer to the ramp-up of the '22 specific models that we have from here?

So we have 2 models -- 22 launches that we have kind of projected and presented to you today through 2026 to 2029 in kind of like, let's say, well balanced throughout the years ahead. I think if we can put it in this way, Toyota has around -- Toyota Group, let's say, Toyota and Lexus has more than 110 car models that they have. So if you frame that 110 models, so out of that, we're launching approximately 22 launches throughout the next 3 years. 7, 8 and 9, so 4 years. That's our launch cadence.

And on HPC, just to maybe answer that part of the question, our launches are happening by middle of next year, right? So between now through middle of next year, all of the vehicles that we will be on are going to be launched.

And I'll complement maybe the answer with 2-wheelers. So stepping back, China, India 2-wheelers tend to be pretty fast in terms of the way they operate. And therefore, launches are going to be essentially, as Sachin said, between this year and next year. The more traditional products that we have with Toyota being clusters and display will kind of launch over time. So think about it this way, India, China, 2-wheelers fairly fast and short cycles, whereas the more traditional, including the Europeans, in fact, will launch essentially over time.

Just back on the China piece. So what is the probability of additional HPC wins this year? And if they can come from Chinese OEMs that would begin impacting revenues in 2027? And then what is defensible about your HPC business that won't be disintermediated or vertically integrated?

Yes. So let me start, and Francis feel free to add more. So if you look at the dynamic that got us in the situation where we now have three customers, we started with one win, right? And that one win, nothing in China state secret, as you know, that quickly deferred through the industry and the other two OEMs that were in sort of strong pursuit of the first OEMs market position on board. Now with the three that we have puts us in a very strong position because most of the work is mostly done. It is now derisked to a large extent. So as Francis mentioned, our opportunity is with the large OEMs that are moving up the value chain in that market in pursuing the so-called tech-first OEMs, right? So the tech-first OEMs, you know who these guys are, they are being now -- the competition is now emerging from these larger OEMs, Geely, Zeekr and others with their own premium brands. And that model is now being applied across the industry by the larger carmakers. So we expect certainly more opportunities as their plans firm up and as they see and understand what this product and capabilities can do. Not all of these OEMs, by the way, are the same level of their own maturity in terms of AI. That's the other piece. But it's not lost on any one of them that AI is a key differentiator. When I go to China and meet with these OEMs, there are really just two things that I hear every time that I go. AI in the cockpit and self-driving, autonomous driving, also AI-based. And that's where all their investments are going. So now the interesting thing is, as you may have tried Tesla self-driving, once you have it, the focus then returns back to what can you do in the cockpit. That's where the differentiation will be, and that's where the velocity of new innovations will be. Once the self-driving is there, it is there. You only notice it when it doesn't work, right? But in the cockpit, it's something that you experience every day. So we really think we are in a really strong position with these OEMs, especially with what we are working on. And once it launches, the momentum will only, I think, accelerate from there.

On one of the slides, we emphasized proactive cost offsets to mitigate EBITDA impact under current headwinds. We've also seen some volatility in China sales with it dropping from initial targets that we had back in a few years ago. Structurally speaking, is Visteon cutting or freezing its commercial headcount globally across the board? Or are we actively reallocating investment globally?

Yes. Maybe I'll start and Jerome, feel free to add. So you saw our business going through a portfolio change, right? The older products are ramping down and the newer products are ramping up. As you go through that, you don't necessarily need the same type of people in the same numbers as we go forward. So we are certainly going through a human resources portfolio change as well along with our business portfolio change and more investments going into AI and AI-based products and less into the traditional products. So that's an active work that is happening. We are also investing where the markets are growing. As we discussed quite a bit today, not all markets have the same velocity of growth, right? We have pockets of growth where the underlying vehicle production is itself going to grow. But then we have opportunities in non-auto like commercial vehicles in Europe, 2-wheelers in other parts of the world, where we're actively investing in terms of our go-to-market and being able to reach more customers. And when it comes to North America, we see opportunities in IoT and also beyond the traditional customers in Detroit, the emerging customers, right, the EV start-ups, okay? And I wouldn't go into any specifics because we are at sensitive stages in many discussions with those OEMs. But we do believe that as our capabilities grow and those OEMs also become larger players with higher volumes, we will have opportunities to work with them in North America as well.

Exact perfect timing, actually, just as we finish that. So that will conclude our Investor Day for 2026. I'd like to thank everybody for joining us today. I'd like to thank the executive team for speaking today. I'd also like to thank my team who can finally sleep after a long few weeks finalizing all the preparation. We have lunch off to the left here, box lunch, and then we also have all of our demos that we encourage you to walk around, see the product, feel the product, see some of the new things that we're introducing and then meet with some of the members of the team. So thank you all.