Visteon Corp (VC) June 2026 Capital Markets Day Transcript

Good morning, everyone. Welcome to Vistion's 2026 Investor Day. I'm Ryan Gazzari, Vice President of Investor Relations and Corporate Strategy. On behalf of the Vistion executive team, the speakers, and everyone else here from Vistion in the room, I would 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 vistion.com slash 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 to kick off our presentation today, we have Sasha Lawande, our president and chief executive officer, to go through the company overview, the secular trends in our industry, and how Vestian 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 Rucquet, 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 two 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 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. So if for any reason you have technical issues, you can contact us or email us online at investor at Vistion.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 Vistion's 2026 Investor Day. You guys are able to hear me okay? Very good. Excellent. Before I start, I would like to thank the Vistion team that has worked very hard to put today's program together. Let me start with a quick introduction to the company. So Vistion 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 percent a margin expansion of over 500 basis points and we generated over a billion dollars 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 two to three 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 adjacent markets. Over the last few years, we've actually done all three. 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 two-wheelers. And since our last Investor Day, three 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 industries transition and you will see demos of the product at the back over there. We maintain a presence in electrification electronics, which provides us with exposure to the long-term growth of electric vehicles with on-board chargers, DC to DC converges, and battery management systems. And finally, as software and system complexities increase, car makers are increasingly looking for expert services. Through the acquisitions that we recently made, Gember and Spiegel Institute and more recently Vehicle VO, 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've added 16 passenger car brands spanning both established global car makers 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 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 two-wheelers. These segments are undergoing many of the same digital transformation challenges and transformation itself that they are making, and it presents opportunities for Vestion as adjacent growth markets. Today, we serve six 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 did we respond to those changes? The industry evolved differently than many had expected. EV adoption in particular slowed down in US 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 three 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, Cherry in China, OEMs such as MSIL 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 and 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 this software-defined vehicle growth and we have already won more than two billion dollars of business with OLED-based displays and smart core 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 this 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 where 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 from between 250 to 500 dollars 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 and 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 smart core technology which was one of the first CDCs in the market. We now have multiple production programs with about eight customers for smart core and there are more in development. Smart core 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, where SDV adoption is already high. I should mention that although we talk about this transition from traditional to SDV, it's not happening uniformly across the world. China is leading at about 50% penetration, and this year about half of the cars produced in China will use CDCs. 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 integrates other body ECUs. And you'll see some examples of that later on. We're 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 SDV and then to AIDV 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 smart core HPC and what's the value proposition and what we see as the opportunity ahead of us. So agentic AI, which is a term by now, I'm assuming everybody's 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 the latest silicon technology, but very importantly, very advanced power and thermal management techniques to enable OEMs to run AI in the vehicle. 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 three leading Chinese OEMs, Jili, Cherry, and Psyc. They're one of the largest or three 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 smart core HPC and it includes the front and the rear cockpit domain controllers, some body control functions, seat controllers, wipers, lighting, etc. This consolidation drives cost reduction of about 30 percent, 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 our 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 break them down into smaller workflows and manage memory and errors as well as interact with systems and services outside of the device. Cognito AI is Vistion's orchestrator software and it's the first software in the industry that is designed specifically for the vehicle environment. Now we're also taking Cognito 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 as our D6 Sigma that we recently announced are 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're 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 SDV. 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 costs and the 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 cover lens. You'll see some of those types of displays on my left here during the break. Now, Bestion 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 destruction 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've 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 smart core 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, and user experience, functional safety, and now more and more AI. Now the same technologies are also fundamental to the evolution of Viztion'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 four acquisitions that support both these objectives. Jember 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 VO 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 a software-defined to AI-defined and then ultimately a central single compute system for the vehicle. And Intot 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 two-wheelers are interesting growth opportunities to Visteon, and what has been happening in the passenger cars is also starting to happen in these two 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 two-wheelers. Electrification is also increasing the amount of information that has to be presented to the riders. So we're 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, there'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, fleet 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 are other two serviceable markets. OEMs are modernizing the cockpits. They're not quite at the level that European OEMs are, but they're using digital clusters, infotainment, and surround-view systems that are 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 date, we have secured a significant amount of business, both on the two-wheeler side as well as commercial vehicles. And as a result, the combination of these two 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, but at cost and quality, and more recently, at speed. Now, our advantages today are based on five 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 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 another proof point with smart core HPC. Ford 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 edge AI that I discussed earlier. We're 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 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, this five differentiated capabilities and the investments, the food investments that we're making, is 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, SmartCode CDC, SmartCode 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 and two-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 dollars in 2026 to $4.8 billion in 2029. Jerome is going to talk more about this later. So let me conclude by talking about a strategy. A strategy is actually very simple. It's really lead in SDB, expand the platform, grow the market and compound the advantage. First, we are already at the center of the industry transition to software-defined and then 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 two-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 AI. 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 four pillars, reinforce each other, and grow our market opportunity. Now to execute this 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 Valance, who will talk about our platform strategy. Bob?

Okay, thank you, Sachin, and good morning. I'm Bob Valance, and I lead the product lines at Vistion. 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 three decades and I was part of the Vistion spinoff from Ford in the year 2000. Over the years I worked in product and customer roles, spent time in engineering and operations, and worked in every region of the world, including six years building our business in China. While in China, I left Vistion 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 Vistion acquired the JCI electronics business. What's more interesting to talk about today, however, is what we've done since that time. Under Satchin'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 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 three of those leaders who are with us at this event and and who are playing key roles in driving this transformation. First I would like to introduce Sivakumar Yadhanapudi, who goes by YSIVA, thankfully. He 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. Wyseva 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 cockpit experiences for AI-defined vehicles. Next I'll introduce Harsha Padmanaba, Harsha's with us today, Vice President of AI Product and technology development, with more than 23 years of experience across multiple industries. During his eight 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 he now leads. Prior to Visteon, Harsha built products and businesses across graphics, software, and AI, including entrepreneurial ventures with successful exits. Finally, I'll introduce Freddy Matsumoto. Freddy's with us today, vice president of our display product line. Freddy brings 28 years of experience in the display industry with 20 years in automotive. During his nine 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 mini 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 three 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 in 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 timeline shows how Vistion has built a broad product portfolio in the cockpit space along the way. I'd like to highlight three key takeaways that have set Vistion apart during this time and that underpin 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 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 for software-defined 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. It 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 timelines 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 the 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 one 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 smart core 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 SmartCore 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 three 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 award 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 three years since we were here in New York. In total, we have won more than 100 customer projects in cockpit electronics in the last three 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 two to three times 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 three 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 three 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 three 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 at 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 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 points 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 three key takeaways I want you to get from this slide. Number one, 75% of the value of a display system is not with the panel makers. Number two, typical tier ones buy from the panel makers and other suppliers and do some level of assembly. Number three, Vistion 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. Bistion built a dedicated display organization a decade ago and established a technical center in Taiwan, bringing in deep tier two plus 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 on Apple and Samsung and other projects like that, these are not all automotive engineers. It's a mix that we brought in. As a result, we developed internal capabilities in key areas such as thin and narrow border designs, advanced optical performance, large format displays, and curved 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've 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 12.3 inch and 10.25 inch displays as an example which will still account for approximately 40 percent 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 electronic summary slide, this slide gives you a perspective on what we have done with our platform approach for displays in the last three years since we were here. Let me walk you across the page. In total, we have won more than 80 customer projects in the display product line in the last three 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 than 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 three 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 three to seven 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 Vistion 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 automaker's 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've split this into two 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 three reasons why we believe Vistion 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 roadmap 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 toward 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.

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 them 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 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?

Yeah I think I alluded to that in my 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 in Europe as well as in Asia and 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've mentioned. They're still in the process of launching their next generation cockpit domain controllers, and they're 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 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 three 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 questions on HBC consolidation. So I'm going to try to combine these a bit. but we received a question from Rajat Gupta from JV Morgan, thank you, Rajat, and an investor. So how does SmartCore HBC strengthen Vistion'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 Vistion to add ADAS capabilities?

Yeah, so the second part is an interesting question because it's just a logical extension 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 it safety-critical applications. So we are now combining your normal non-safety-critical, 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 you 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 display, so I'm going to just ask the question with the investor's question as well. There are a few of your tier one 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 one? 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 displays, especially as they get bigger. If you think about the smaller displays, the 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 SDV, right? SDV requires 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, what, seven, eight 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 ones 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 SDV, 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? And we could see the two 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 that 25% that we showed, but they still need the rest of the capabilities.

Let me add one point, if I may, and this Jao Paula 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. Vistion 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.

So Winnie Dong asked a question 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. just say is somebody that we respect quite a bit, and we learn from them as well. So there is no harm in being smart about learning from what you see is 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. You 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. So we don't really see the scaling up of many of those competitors that have been around. It has been very few. Desai 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 two 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, right? 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, and 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 Speck 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 five 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 a third of the overall. As I said, 50% of the vehicles by 2029 will be SDV 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 SDV side. So we expect maybe 25% to 30% of our revenues to be traditional. The bulk of the other revenue is SDV slash 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. way, Colin Langland from Wells Fargo said, your slides flag 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 that trend. I should mention one more thing, which may not be obvious, you know, from a distance. What's happening with the memory dynamics, I'm pretty sure you're all aware of what's going on there, that will also push the industry to adopt consolidated architectures sooner. These traditional architectures require traditional technology, older 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 transition from hardware to software to AI, as we talked about Vistion 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 it's there's no there's no debate about the direction anymore so 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 non-automotive. You mentioned two-wheelers, CVs, and now IoT. What about leveraging BMS for energy storage? Good question.

And, you know, energy storage, we looked at that actually a few years ago, maybe two or three years ago, even before this AI hype and investment into data centers and so on, hit the media. And we arrived at a conclusion that the value that is ascribed to what we do compared to the value 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. Different buying patterns, different ecosystems, you'll get into a space that is a little farther 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 and our ability to able 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 value is 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 the play with this product line?

Yeah, 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 US, we don't want to be in the same situation that we were in just a few quarters ago and get whipsawed from one position to the other. So in the meantime, though, we continue to serve our customers. We have two here, two 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. You know, 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 over capacity that we see in China I'm hesitant to follow something where the markets themselves fundamentally aren't growing and there's a lot of capacity all right I'm gonna try to squeeze in a few more questions we get about five minutes Dan asked two questions but they're kind of related so I'm gonna 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 slash complexity reduction? And I guess to follow on that, what is the competitive set on HPC?

So when you go from a standalone product or even a 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 13 ECUs 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 it's just an ongoing supply to a much longer co-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 we were not to have a product line, which meant we only had project teams, the project teams end when 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. Their 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 these tech companies coming into automotive who built a tech platform and they release vehicles versus OEMs that build technology for cars 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't be a 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 a HPC supplier. So that set is also narrowing.

I'm going to try to squeeze in two more questions. Two of them are actually combined. 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 OEMs outside of China?

One of the biggest regulatory reasons is AI, actually. If you look at the discussions that we have with OEMs in China that have expert 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, more secondary.

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

You know what's interesting is, when you look at the ADAS stack, the L2 stack in that configuration, especially when you go to end-to-end AI, it just becomes a safety stack. That's not the primary stack. You always run two stacks. You run the AI stack and you run an L2 stack. L2 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 an L2 stack. It's the cost of doing business for them. Nobody's going to engineer a safety stack that really just doesn't get used. The real value is in the end-to-end AI. 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 Alpamayo from 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 this 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 seconds over now so we're gonna take a 14 minute break instead of 15 minute break we'll be back here at 10 45.

Thank you. We're going to go ahead and get started back up here again. Let people get situated. So we've got three more speakers and then a Q&A session. We'll have Francis Kim start followed by Joe Paulo focus on manufacturing operations and then finish up with Jerome Q&A. And then we also have lunch that I'll let you guys go 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. I've spent close to 20 years in electronics. I came up through consumer electronics into automotive at LG and moved 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 cockpit 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 12 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 to 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 have 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 three customer and expected to be up to 8% of company sales by 2029. We're gaining real momentum at Hyundai and Maruti Suzuki. And in China, we identified the software-defined vehicle transition early and positioned ourselves as the AI cockpit and smart core high-performance compute development partner for three leading domestic players, Gili, Cherry, and SAIC, on their premium brands. The key point is simple. We're 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 four regions and each is adapting to its own market dynamics. In the Americas, softer 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 snp light vehicle production forecast the market is expected to grow about eight percent between 2026 and 2029 our revenue however declines from roughly 1.2 billion dollars to approximately 1 billion dollars The reason is straightforward. Our two 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 software-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 software-defined vehicle transition. Our recent wins include display programs at Scout, smart core programs at Trayton, 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's new general safety regulation now mandates driver monitoring and the displays to support it vehicles are now required to be cyber secure and to support over-the-air software updates. And the 2026 update to Europe's NCAP crash test ratings makes advanced in-cabin technology essential just to earn five stars. Some of this is now law, the rest isn't. But no car maker can sell competitive vehicle without it. Either way, value shifts from standalone clusters to integrated cockpit 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 super screen, and the same smart core 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 grow to 1.43 billion dollars by 2029 close to 70 percent and more than 10 times the pace of the market itself and within that our two-wheeler revenue more than triples the chart here tells the rest in two 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 three 12-inch displays, and platform expansion at Toyota, the Camry 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 dollars of cockpit sales in 2019 to about 900 million dollars by 2029. And this is not a forecast we are reaching for. It is built on a steady cadence of winds from our first smart core 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 advance this place not just premium, exactly what we built and two wheelers are digitizing on top of all of it and here is what makes it real most of those 900 million dollars is already booked nearly $2 billion in signed business across passenger cars and two-wheelers in just three 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 billion of new business booked between 2023 and 2025. And 22 product launches forecasted from 2026 through 2029. As a result, Toyota revenue is expected to increase more than five-fold to approximately $390 million by 2029, making Toyota one of our top three customers. Our technology will be on 6 of Toyota'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 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 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're not engineering a two-wheeler cockpit from a blank sheet we're adapting a platform we already built for cars. The hardest, most expensive engineering is largely done through our platform strategy. Two-wheelers are early on that curve, on that same curve. That's why the market leaders are already with us. Honda, the largest two-wheeler maker on the planet, plus Hero, TVS, and Royal Enfield and the premium icons one in Europe and Harley-Davidson. From mass market commuters to premium motorcycles we are on both ends of the curve and our two-wheeler revenue is compounding at over 38 percent 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, three 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 forced truck makers to consolidate the cockpit, which proved real OEM demand for integrated driver-facing compute. Exactly what we built. So we built one reusable 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. Daimler, 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 three regions by 2029, we see up to 3 million trucks a year at $200 to $400 of cockpit content each. A $600 million to $1.2 billion market opportunity. We have proven the platform and won anchor customers, which positions as well to compete for a meaningful share as it develops. You've now seen our growth engines, the regions, Toyota, two-wheelers, commercial vehicles, and one thread runs through all of them. Our growth comes from content, not unit volume. China is where the threat pulls 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 flat line masks a structural shift around 2025 the incentive policy changed and the market reset it stopped running on subsidies for entry-level vehicle volume and started running on demands for technology and premium content you can see the shift in two moves first is share total 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 this moving up market 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 two phases as the model unwound our china sales dipped then came back stronger to a new high of 693 million dollars 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 supplier's position for what comes after the reset. We are one of them. They said the value is moving up market, so let me show you exactly where it's going. China's market stacks into four tiers. At the base, entry, and mainstream, the mass market, biggest by volume. Above them is premium. the established luxury names now joined by domestic premium brands like Zeeker, Freelander, and Voya. And at the top, the tech-first brands, Xiaomi, Nio, LiAuto, Xiaopang, who built cars around softer 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 tech-first brands expanding while the mass base flattens. And that 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 parts supplier simply. The tech-first brands are racing on cockpit technology, and the ambitious mainstream players, Cherry, Geely, are pushing just as hard. They need advanced compute and AI cockpit, and they need a partner who can build it with them, 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 did three of the leading Chinese OEMs choose us as the co-developer of their AI carpet not a simple supplier? It comes down to what AI has changed. With AI in the carpet two 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's 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 one-time sales. It is continuous co-development, release after release. And the proof is on the board that you see on the right. Over a billion dollars in lifetime high-performance compute program wins. We are the only Tier 1 chosen by three of the leading Chinese OEMs for the AI-powered compute, Geely, Cherry, and SAIC's IM brand. And with SmartCore high-performance compute on Qualcomm's Snapdragon copied eLite, We are among the first to bring a mature, production-ready AI cockpit to scale. Now, here's why this is bigger than China. AI itself is regulated. Today, these carpets are built for the domestic market. But these OEMs are not staying home. Cherry is already one of China's largest exporters. Gili's brands span the group. And as their cars cross borders, their carpet 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 car makers in the world, in China and well beyond it. I opened up by telling you that growth has repositioned across this industry. You've now seen it market by market, and you have seen that we repositioned with it. So let me leave you with the one idea underneath all of it. We do not grow because the world builds more cars. We grow 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 carpet 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 Jean Thank you, Francis.

Good morning, everyone. My name is João 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 Vistian 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 three 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 cheap more than a million products and support a highly complex launch environment with 86 new model product launches in 2025. Importantly, 97 percent of our manufacturing ad count is located in best-cost countries, creating a structural cost advantage while maintaining proximity to customers. 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 will go into production in 2027 to support local OEM growth and to heal their 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, expand 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. SDV products such as cockpit domain 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 four examples I will show you are not technology demonstrations. Those highlight a capability that differentiates Vistion. We have the ability to internally develop and globally deploy manufacturing technologies that drive productivity, reduce cost, improve quality, and support margin expansion. The first example I'm going to show focus 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 Vistion to manufacture a highly complex curved display for a premium OEM. These products are among the most challenging displays in the industry to manufacture at automotive grade quality and scale, given the tight tolerances, the radius that we have to perform in the glasses, and the optical quality that we have to obtain. The ability to manufacture curved displays at high volume with competitive yields represent a significant technical and manufacturing advantage that few 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, with 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 how manufacturing innovation creates barriers to entry. We support growth, improves profitability with this 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 Vistion display bonding technology in a high-volume two-wheeler program. Developed and industrialized entirely in-house, this process fundamentally simplifies display bonding by eliminating the need for a perimeter dam, reducing material consumption, process complexity, and equipment requirements. As a result, production cycle time reduced by 75% while material costs 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 an off-the-shelf technology. This vision technology delivers lower costs, higher productivity, lower capital requirements, and a capability that is very difficult to replicate. The next example will show you how we are applying artificial intelligence to improve operational performance across our factories. This internally developed AI platform continuously monitors 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 typically associated with these third-party platforms. The concepts and capabilities developed to improve our factory's performance also contributed to the development of D6 Sigma, Vistion's new industrial edge AI product line developed in collaboration with Qualcomm Technologies. This demonstrates how 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 with minimum programming needs. More importantly, this solution can be deployed across more than 3,000 existing vision systems worldwide with minimal additional of capital investment. These 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 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 cockpits. Vistion 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 injected 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 how 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 enhances 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, Giaopolo. 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 mid-term 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 and disruptions, shifts 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%, 23% if you exclude customer recoveries. Looking at sales, this reflects a constant outgrowth driven by content expansion and SDV alignment. Over the last three 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 name plates, and new non-automotive segments. Adjusted EBITDA margin has improved by more than 500 basis points since 2019, reaching over 13% in 2025, driven by scale, a favorable mixed shift towards higher value SDV products with strong cost focus and operational efficiency. Adjusted free cash flow has increased five-fold, 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 three notches since 2019, 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 EBDA 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. A 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 trackings 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 de-risking 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. The key milestone in this effort has been the execution of a multi-year 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 roadmaps. In addition to strengthening strategic supplier relationship, we are actively diversifying our supply base by evaluating alternative sources, including non-traditional 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 regard 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 mid-term targets, let me break down our performance versus what we laid out at our 2023 investor day. Being 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 three years, these dynamics have evolved significantly. In China, market share shifts have impacted international OEs very negatively. In the US, US adoption has been significantly slower than anticipated. And more broadly, we have seen higher level of program consolations 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 mid-term targets. 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 non-automotive 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 de-risked 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 a third 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, non-automotive markets, two-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 counter-cyclical 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, a 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, Tata, 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 three years, driven mostly by two-wheelers and commercial vehicles. On the two-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 non-automotive 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 Volkswagens 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, an increased exposure to new customers, including targeted Asia growth customers, as well as growth in the two-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 Trayton 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 Jili, Cherry, and Syke, 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 non-automotive customers like Toyota, Mercedes, and Volvo Truck. Finally, on clusters and infotainment, while we expect some decline in standalone 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 mixed 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 Cognito AI, 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 non-recurrence of certain 2026 one-time 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 50% 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 when 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 these 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 discipline 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 need be 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.

Can you guys hear me? We had a question from the prior session that I moved over, just felt as more appropriate. This is from Shreys Patel from Wolf Research. With growing CDC and HPC revenue, more engineering services, and a high degree of vertical integration displays, should that support an increase of incremental margins overall versus your baseline of low 20%?

Yeah, let me take that one, Ryan. So overall, the shift that we are seeing towards high-value products, SDV, 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 will be helping our margin quite substantially. I would say that about two-thirds of our margin expansion in our three-year horizon is coming from increased scale, and these products are definitely contributing.

Can you walk through? This is from Joe Spack from UBS. Can you walk through your memory assumptions in the mid-term 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 from mixed shift? And how much is... Let's just stop at memory first and focus on how much...

Let me call that memory. That's a very important point.

And this is 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. 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 have from customers will 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 the 100 basis point that we are seeing incrementally in 2027 will stay all the way to 2029 so without large memory cost impacts in 2029 our EBITDA would have been closer to 15% so So that gives you the size of the impact of memory.

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

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 2029, 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 USMCA compliant, how might increased U.S. content requirements impact your North America footprint and sourcing strategy from Dan at Barclays.

Yeah, 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. 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. And 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.