Visteon Corporation announced full-year 2017 results, reporting net income attributable to Visteon of US$176m (compares with US$75m in 2016), or $5.47 per diluted share, including $14m of restructuring expenses and $31m of other net expenses, partially offset by $17m of net income associated with discontinued operations.

Full-year sales were $3,146m, a decrease of $15m compared with 2016, primarily attributable to the exit of Other operations, partially offset by an increase in Electronics Product Group sales. Net cash provided from operating activities was $217m for full year 2017.

In 2017, global vehicle manufacturers awarded Visteon new business of $7.0bn in lifetime revenue, with a record $2.4bn in the fourth quarter. Fourth-quarter wins included all-digital instrument cluster wins with three global automakers – including the company's first all-digital cluster win in Japan – as well as a software-only Phoenix win in Europe. The ongoing backlog, defined as cumulative remaining life-of-program booked sales, was $19.4bn as of 31 December 2017, up from $16.5bn at the end of 2016, an increase of 18%.

"We finished the year strong, delivering our 12th consecutive quarter of year-over-year improvement in adjusted EBITDA margin," said president and CEO Sachin Lawande. "We accomplished our key strategic priorities for 2017, including strengthening the core business, achieving double-digit sales growth in China, and developing the DriveCore Level 3-plus autonomous driving platform. By winning a record $7bn in new business, we made excellent progress toward our 2017-18 target of $12bn in new business. Our 2017 performance keeps us on track to meet our long-term growth targets."

Q4 performance
Fourth-quarter sales were $797m, compared with $816m for the same period in 2016. The $19m decrease is primarily related to the exit of Other operations and customer pricing, partially offset by Electronics product launches and favourable currency.

Gross margin was $140m, compared with $129m a year earlier. The $11m increase reflected higher gross margin related to the Electronics Product Group. Selling, general and administrative expenses were $64m for the fourth quarter of 2017, compared with $57m for the fourth quarter of 2016, driven primarily by higher information technology investments.

Net income attributable to Visteon was $25m or $0.79 per diluted share, compared with $2m or $0.06 per diluted share for the same period in 2016. 2017 fourth-quarter net income included $4m of restructuring and $34m of other expense primarily related to the divestiture of certain European assets, partially offset by $9m in income associated with discontinued operations including a non-income tax settlement.

Electronics Product Group
Sales for the Electronics Product Group totalled $797m, a decrease of $6m from the fourth quarter of 2016. The year-over-year decrease was primarily related to customer pricing reductions, partially offset by new product launches and favourable currency impacts. On a regional basis, Asia accounted for 43% of sales, Europe 31%, North America 23%, and South America 3%.

Gross margin for the fourth quarter of 2017 was $140m, compared with $129m a year earlier. The $11m increase reflected the impact of improved engineering and material efficiencies, partially offset by customer pricing and unfavourable currency impacts.

Adjusted EBITDA, as defined below, for the Electronics Product Group was $102m for the fourth quarter of 2017, compared with $98m for the same quarter last year. The improvement was primarily driven by favourable cost performance including material and engineering cost efficiencies, partially offset by customer pricing and unfavourable product mix. Adjusted EBITDA margin was 12.8% for the fourth quarter of 2017, 60 basis points higher than the prior-year.

For the fourth quarter of 2017, net income was $16m or $0.51 per diluted share, compared with net income of $20m or $0.60 per diluted share for the same period in 2016. The decrease in net income included the 2017 loss on divestiture of certain assets in Europe, partially offset by a decrease in restructuring expenses year over year. Adjusted net income (as defined below), which excludes these items, was $52m or $1.64 per diluted share for the fourth quarter of 2017, compared with $52m or $1.55 per diluted share for the same period in 2016.

Other Operations
By the end of 2016, Visteon exited its Other operations, consisting of climate operations in South America and South Africa. The company did not have sales or adjusted EBITDA related to the Other operations in 2017. The fourth quarter of 2016 included sales of $13m and net income of $7m. Going forward, the company does not expect sales or adjusted EBITDA for the Other operations.

Cash and Debt Balances
As of 31 December 2017, Visteon had cash and equivalents totalling $709m. Total debt as of 31 December was $393m.

For the fourth quarter of 2017, cash from operations was $86m and capital expenditures were $30m. Total Visteon adjusted free cash flow, as defined below, for the fourth quarter of 2017 was $58m, compared with $82m during the fourth quarter of 2016. Year-to-date, adjusted free cash flow was $148m.

Share Repurchases
On 9 January 2017, Visteon's board of directors authorised the purchase of up to $400m of the company's shares outstanding. During 2017, the company completed $200m of the authorised repurchases by acquiring 1,978,144 shares at an average price of $101.10. As of 31 December 2017, the company had 31.5m diluted shares of common stock outstanding.

On 15 January 2018, the company's board of directors authorised an additional $500m, for a total of $700m of share repurchases to be completed over a period expiring on 31 December 2020.