Visteon Corporation (NASDAQ:VC) Q3 2023 Earnings Call Transcript

Emmanuel Rosner: When are the next launches?

Sachin Lawande: Early next year.

Operator: Your next question comes from the line of Jim Picariello with BNP Paribas.

James Picariello: Just on the favorable timing of recoveries in the third quarter, totaling $15 million, was this entirely attributable to a pull forward from the fourth quarter or was there any unexpected retroactive recovery achieved in the quarter?

Jerome Rouquet: Yes. So there are two items. In this 150 basis points, you have about 100 basis points, which is related to commercial items, which are essentially commercial items that were settled in Q3 when costs were incurred in prior periods. So it’s really neutral on a year-to-date basis and as you do a walk from Q3 to Q4, we’ll kind of reverse out. And then the 50 basis points remaining relates to the fact that our engineering spend was lower in Q3, largely because of project cost that had a different timing and that’s going to impact Q4. So that’s one of the reasons why we have increased our engineering spend in Q4, because there’s a move of expenses between Q3 and Q4.

James Picariello: And then just to confirm, the strike affected volume and your guidance implies a near 30% decremental margin. Is that right, just given the weekly ranges for revenue and EBITDA that were provided? And then I apologize if I missed this, but based on the $20 million to $25 million per week strike impact embedded in the guide, what would Ford represent within that weekly revenue range? Thanks.

Jerome Rouquet: Yes. So maybe first on the decrementals. We think they’ll be a little bit higher than our average decrementals. One of the reason is that there may be some stop-and-go freight expenses as everybody ramps up when the strike ends. So that’s one of the reasons why decrementals will be higher. And then Ford is a little bit more heavy than GM, but GM is still a fairly large portion of our business here in the U.S.

James Picariello: Just within the weekly range or was that your answer or was the heavier weighting to Ford on the decrementals?

Jerome Rouquet: Yes, heavier to Ford indeed.

Ryan Wentling: This concludes our earnings call for the third quarter 2023 results. Thank you everyone for participating in today’s call and your ongoing interest in Visteon. Thank you.

Operator: Thank you for attending. You may now disconnect.