Dana Incorporated · NYSE:DAN
Dana — Merger or Acquisition (July 2018)
23 slides from Dana's merger presentation, Jul 30, 2018
Slide 1: Acquisition of Oerlikon Drive Systems
J.Acquisition P. Morgan of Auto Oerlikon Conference Drive Systems August 8, 2017 Jonathan Collins Executive Vice President & Chief Financial Officer July 30, 2018 © Dana 2018 1
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 Transaction Overview Craig Barber Senior Director, Investor Relations and Strategic Planning Business Overview / James Kamsickas Strategic Rationale President and Chief Executive Officer Acquisition Benefits Jonathan Collins Executive Vice President and Chief Financial Officer © Dana 2018 3
Slide 4: Transaction Summary
Transaction Summary Dana to acquire Oerlikon’s Drive Systems segment: ï,§ CHF 600 million in cash ï,§ Assumption of certain net liabilities Transaction Transaction Value Terms ï,§ Implied ~6x NTM adjusted EBITDA ï,§ ~4x NTM adjusted EBITDA (pro forma for expected cost synergies) Includes a controlli
Slide 5: Business Overview / Strategic Rationale
J. Business P. Morgan Overview / Auto Strategic Conference Rationale August 8, 2017 Jonathan Collins Executive Vice President & Chief Financial Officer © Dana 2018 5
Slide 6: Oerlikon Drive Systems Snapshot
Oerlikon Drive Systems Snapshot 2018T Revenue: End Markets Sales by End Market Sales by Region ~$800M Commercial $ Vehicle Asia-Pacific Construction 18% 25% Americas Off Highway 27% 62% Diverse Product Portfolio Agriculture Light Vehicle 20% Mining Europe Advanced Gears Planetary drives 48% Light Ve
Slide 7: Acquisition Benefits
Acquisition Benefits Enhances Propulsion Increases Emerging Technology Portfolio Market Capabilities Extends Off-Highway Delivers Significant Market Presence Long-Term Value © Dana 2018 7
Slide 8: Product Portfolio Overview
Product Portfolio Overview Markets Products Description and Applications LV CV OH Advanced Broad range of high-precision helical gear solutions Gearing Shifting Wide range of synchronisers, clutches and clutch packs solutions Planetary Electric and hydraulic planetary drives for off-highway applicat
Slide 9: Advanced Electrification Engineering
Advanced Electrification Engineering Core Competencies 20+ years of expertise in electric driveline design and engineering 30+ years driveline control software engineering Electronic hardware and actuation controls Integrated software and hardware design Vehicle application, calibration, and testing
Slide 10: Strategic Fit
Strategic Fit Multiple market focus Wheel and track drives Proximity to customers “Build where we sell” Adding key OEM Transmissions customers Controls and Software Expanded product offering Leveraging position India expansion in e-Drives Core electrification China expansion technology applicable to
Slide 11: Strategic Inorganic Growth
Strategic Inorganic Growth Q1 2016 Q4 2016 Q1 2017 Q1 2017 Q2 2018 Q4 2018 2018 11
Slide 12: Acquisition Benefits
Acquisition J.P. Morgan Benefits Auto Conference August 8, 2017 Jonathan Collins Executive Vice President & Chief Financial Officer © Dana 2018 12
Slide 13: Acquisition Benefits
Acquisition Benefits Enhances Propulsion Increases Emerging Technology Portfolio Market Capabilities Extends Off-Highway Delivers Significant Market Presence Long-Term Value © Dana 2018 13
Slide 14: Core Planetary Hub Drive Technology
Core Planetary Hub Drive Technology Product Expansion Wheel Drives Track Drives Slew Drives Mobile Gearboxes Electric Drives Vehicle Weight (tons) <1 2 10 18 28 35 50 80 100 120 Compact Small Medium Large © Dana 2018 14
Slide 15: e-Drive Expansion
e-Drive Expansion Oerlikon Electric Drive Capabilities Dana Electric Drive Capabilities Single-speed e-Axles Multi-speed e-Axles e-Drive Integrated e-Axles e-Drive Motors & Inverters Cooling Systems Select Vehicles Passanger Recreational Utility City Delivery Light Trucks Freight Truck Transit Bus M
Slide 16: Manufacturing Footprint Focus
Manufacturing Footprint Focus India China Selected Customers Selected Customers Includes facilities currently under construction © Dana 2018 16
Slide 17: Optimizes Geographic Footprint
Optimizes Geographic Footprint Dana1 Oerlikon DS Pro Forma1 Asia-Pacific Asia-Pacific Asia-Pacific 21% 25% 22% Americas Americas 52% Americas 27% = 49% Europe Europe 27% 29% Europe 48% Oerlikon DS Footprint Manufacturing sites (12) R&D test centers (5) Includes Includes facilities 100% of current
Slide 18: Penetration in Off-Highway
Penetration in Off-Highway Pro Forma Segment Revenue Mix Dana1 Oerlikon Drive Systems Pro Forma1 Light Off Highway Vehicle Off Highway 19% Light 20% 23% Light Vehicle Vehicle 51% = 49% Off Highway Commercial Commercial Commercial 62% Vehicle Vehicle Vehicle 28% 18% 30% 1 Includes 100% of DDAC JV
Slide 19: Synergies and Value Creation
Synergies and Value Creation Purchasing efficiencies Near Term (Cost) Lean implementation and increased productivity $40 Million Over 24 Months Fixed cost rationalization Manufacturing footprint optimization Medium to Long Cross-selling of products across both companies customer bases Term Opportuni
Slide 20: Strong Balance Sheet
Strong Balance Sheet Pro Forma Capitalization ($ in millions) Dana Transaction Pro forma 12/31/2018 Adjustments Dana Cash and Marketable Securities $600 $100 $700 Revolver $575 $(40) $535 Liquidity $1,175 $60 $1,235 New Financing $600 $600 Term Loan A $265 $265 Senior Notes 1,500 $1,500 Other Debt $
Slide 21: Acquisition Benefits
Acquisition Benefits Enhances Propulsion Increases Emerging Technology Portfolio Market Capabilities Extends Off-Highway Delivers Significant Market Presence Long-Term Value © Dana 2018 21
Slide 22: Accelerating Electrified Mobility
Accelerating Growing Through Executing Enterprise Increasing Electrified Transformation Strategy Shareholder Value Mobility
Slide 23: Non-GAAP Financial Information
Non-GAAP Financial Information The preceding slides refer to Adjusted EBITDA, a non-GAAP financial measure which we have defined as net income before interest, taxes, depreciation, amortization, equity grant expense, restructuring expense, non-service cost components of pension and other postretirem