Dana Incorporated · NYSE:DAN
Dana — Q4 2023 Earnings Presentation
30 slides from Dana's earnings presentation, Feb 20, 2024
Slide 1: 2023 Fourth-quarter & Full-year Earnings Conference Call
February 20, 2024 2023 Fourth-quarter & Full-year Earnings Conference Call
Slide 2: Safe Harbor Statement
Safe Harbor Statement Certain statements and projections contained in this presentation are, by their nature, forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on our current expectations, estimates and projections
Slide 3: Agenda
Agenda Craig Barber Senior Director, Investor Relations and Corporate Communications Introduction James Kamsickas Chairman and Chief Executive Officer Business Review Timothy Kraus Senior Vice President and Chief Financial Officer Financial Review
Slide 4: Business Results and Outlook
Business Results and Outlook Successful Execution of Company-wide Transformation Leading to Profitable Growth 2023 Highlights 2023 Results 2024 Outlook sales $10.6 billion $399M from prior year adjusted EBITDA $845 million $145M from prior year free cash flow $(25) million $234M from prior year Sale
Slide 5: 2024 Operating Environment
2024 Operating Environment Cost inflation moderating Labor costs increasing Monitoring ocean freight Pricing and cost-reduction actions muting inflation impact Net commodities expected to be sales and profit headwind Steel prices expected to be mostly flat in 2024 with lower volatility Commodity rec
Slide 6: 2024 Market Outlook
2024 Market Outlook North America South America Impact +$135M Asia Pacific Europe Off-Highway Light Vehicle Commercial Vehicle >+2% Primary Third-Party Sources >-5% >-5% >-5% >+2% <-2% >+5% <-2% Full-frame Truck Medium Duty Heavy Duty Agriculture Construction & Material Handling Mining Above-market
Slide 7: 2023 Launch Performance
2023 Launch Performance >100 Program Launches Record number of launches fully industrialized Outstanding customer satisfaction >$2.5B Includes many of our largest programs Successful Execution Company-wide One Dana Collaboration: a Key Enabler of Differentiated New Program Launch Execution Annualize
Slide 8: 2024-2026 Sales Backlog: $950 Million
2024-2026 Sales Backlog: $950 Million MOBILITY MARKET Note: $ in millions. Backlog includes booked incremental new business net of any lost replacement business = EV Program Record Three-year Backlog. Seventh Consecutive Year of Increased Sales Backlog Achieved Through Exceptional Customer Satisfact
Slide 9: Off-Highway: Hyster-Yale Warehousing Equipment
Off-Highway: Hyster-Yale Warehousing Equipment New Market Expansion Utilizing Proven Dana Electric Propulsion Technology Electric Vertical Motor Drive Unit (MDU)
Slide 10: Commercial & Construction Equipment: Volvo EV Platforms
Commercial & Construction Equipment: Volvo EV Platforms Electric Motors
Slide 11: Commercial Vehicle: PACCAR, Traton, Volvo Market Share Gains
Commercial Vehicle: PACCAR, Traton, Volvo Market Share Gains Customer Satisfaction and Across Dana Execution Leading to Incremental Growth Market Share Gains Gaining and balancing market share across customers Achieved highest sales since 2011, or ~70% increase since 2016 Positioned for increased sa
Slide 12: Light Vehicle: Electrification New Business Win
Light Vehicle: Electrification New Business Win EXPANDED! Dana vertically integrated complete e-Propulsion system Leveraging Mechanical, Electric, and Thermal Scale Across Platforms and End Markets 4x content-per-vehicle compared to ICE NEW Electric SUV Added!
Slide 13: Drivers of Continued Profit Expansion
Drivers of Continued Profit Expansion Fixed-cost savings and asset utilization Reduced customer schedule volatility Highest relevance to profit expansion Profit Drivers Inflation recovery Supply chain and product- design savings +$145M +21% Adjusted EBITDA Impact ~+$80M ~+10% Company-wide Transforma
Slide 14: Financial Review
@ DAN LISTED NYSE Financial Review
Slide 15: Fourth-quarter and Full-year Financial Results
See appendix for comments regarding the presentation of non-GAAP measures Lower sales in the fourth quarter driven by impact of UAW strike Full-year sales growth primarily due to increased demand in all our end-markets and recovery of cost inflation, partially offset by UAW strike Increased producti
Slide 16: 2023 Q4 Sales and Profit Changes
Lower organic growth driven by UAW strike at key customers Company-wide efficiencies mostly offset strike profit impact Cost inflation offset by customer recoveries Translation of foreign currencies, primarily the strengthening euro, to U.S. dollar was a modest benefit to sales and profit Lower comm
Slide 17: 2023 FY Sales and Profit Changes
Organic growth driven by strong sales and pricing actions, partially offset by UAW strike impact Cost savings actions, improved efficiency, and customer recoveries more than offset cost inflation EV growth remains strong in core heavy-vehicle markets Lower spending on EV engineering and related prog
Slide 18: 2023 FY Free Cash Flow
2023 FY Free Cash Flow Higher profit offset by increased working capital requirements and higher capital spending Increased working capital requirements due to increased sales and higher launch cadence, and UAW strike Higher capital spending to support new business backlog, replacement business, and
Slide 19: 2024 FY Financial Guide
Sales Adjusted EBITDA Implied Profit Margin Free Cash Flow Diluted EPS 2024 FY Financial Guide Sales growth driven by new business backlog, improved end-market demand, new/refreshed programs, and market share gains Company-wide efficiency improvements drive higher margins Free cash flow improvement
Slide 20: 2024 FY Sales and Profit Changes
Organic growth driven by strong sales, pricing, and market share gains Strong conversion on organic growth due to improved efficiencies and cost savings actions Cost recovery actions expected to mostly offset inflation Continued investment in EV business offsetting profit contribution Translation of
Slide 21: 2024 FY Free Cash Flow
2024 FY Free Cash Flow Higher profit and lower capital investment requirements Increase in net interest payments due to higher rates and payment timing due to refinancing More efficient use of working capital 1 Includes costs associated with business acquisitions and divestitures and restructuring.
Slide 22: Appendix
Appendix
Slide 23: 2023 FY Sales and Profit Change by Segment
2023 FY Sales and Profit Change by Segment See appendix for comments regarding the presentation of non-GAAP measures 10.3% 10.1% 6.3% 13.5% 11.9% Light Vehicle Drive Systems Commercial Vehicle Drive and Motion Systems Off-Highway Drive and Motion Systems Power Technologies Sales Adjusted EBITDA 10.3
Slide 24: Segment Profiles
Segment Profiles CUSTOMER SALES REGIONAL SALES Light Vehicle Drive Systems Commercial Vehicle Drive and Motion Systems Off Highway Drive and Motion Systems Power Technologies Year to Date 12/31/2023 Year to Date 12/31/2023 Year to Date 12/31/2023 Year to Date 12/31/2023 * Includes sales to systems i
Slide 25: Diluted Adjusted EPS
Diluted Adjusted EPS DANA‘ CORPORATES Reconeil Net Loss Attributable to the Parent Company to i ibutable to the Diluted Adjusted EPS (Unaudited) For the Three Months Ended December 31, 2023 and 2022 (tn millions, except per share amounts) ‘Three Months Ended December 31, 2023 2022 Net loss attributa
Slide 26: Segment Data
Segment Data DANA INCORPORATED ‘Segment Sales and Segment EBITDA (Unaudited) For the Three Months Ended December 31, 2023 and 2022 Three Months Ended (in millions) Sales ight Vehicle ‘Commercial Vehicle Off-Highway Power Technologies Total Sales ‘Segment EBITDA Light Vehicie ‘Commercial Vehicle Off
Slide 27: Segment Data Continued
Segment Data Continued DANA INCORPORATED DANA INCORPORATED For the Three Months Ended December 31, 2023 and 2022 (in millions) ‘Segment EBITDA Corporate expense and other items, net Distressed supplier costs ‘Amounts attibutable to previously divestediciosed operations Other items Earnings before in
Slide 28: Cash Flow
Cash Flow DANA INCORPORATED Reconciliation of Net Cash Provided By Operating Ac! Free Cash Flow (Unaudited) ies to Three Months Ended (in millions) December 31, 2023 2022 Net cash provided by operating activities $ 278 $ 342 Purchases of property, plant and equipment (142) (140) Free cash flow $136
Slide 29: DANA
DANA
Slide 30: Non-GAAP Financial Information
Non-GAAP Financial Information Adjusted EBITDA is a non-GAAP financial measure which we have defined as net income (loss) before interest, income taxes, depreciation, amortization, equity grant expense, restructuring expense, non-service cost components of pension and other postretirement benefit co