Dana Incorporated · NYSE:DAN
Dana — Merger or Acquisition (March 2018)
37 slides from Dana's merger presentation, Mar 9, 2018
Slide 1: Combination with GKN Driveline Creating a Global Leader in Electrified Drive Systems
Combination with GKN Driveline Creating a Global Leader in Electrified Drive Systems March 9, 2018
Slide 2: Safe Harbor Statement
Safe Harbor Statement Important Information for Investors and Stockholders This presentation does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval. In connection with the proposed transaction between Dana and GKN, an enti
Slide 3: Agenda
Agenda Introduction Craig Barber – Transaction Summary Senior Director, Investor Relations and Strategic Planning Strategic Rationale Jim Kamsickas and Overview President and – History Chief Executive Officer – Strategy and Execution – GKN Driveline Highlights Transaction Overview Jonathan Collins E
Slide 4: Transaction Summary
Transaction Summary Dana to combine with GKN Driveline for consideration of: $3.5 billion in Dana plc stock (133 million newly issued shares) $1.6 billion in cash Transaction Assumption of certain pension liabilities (approximately $1.0 billion, net) Terms Transaction Value Implied 8.1x 2017 adjuste
Slide 5: History and Overview
History and Overview © Dana 2018
Slide 6: Dana & GKN: A Journey of Long-term Partnership
Dana & GKN: A Journey of Long-term Partnership Dowlais Ironworks Global Transaction History 1759 GUEST, 7 Joint Ventures KEEN & 3 Acquisitions by Dana NETTLEFOLDS 4 Acquisitions by GKN 1902 1954 1983 1904 1946 1995 1966 1999 2018 2002 Discussions Begin 2011 2017 plc Strong cultural fit and long hist
Slide 7: Snapshot
Snapshot Founded in 1966 61 Manufacturing Locations 2017 sales: in $ $7.0 billion1 23 countries 5 22 R&D Customer Centers ~35,000 1,680 Recognitions people Patents & in 2017 Applications 1Inclusive of pro rata share of joint ventures. © Dana 2018 7
Slide 8: Complete Driveline Systems Offering
Complete Driveline Systems Offering Electro-Magnetic Electronic Control Device Open Differential Torque Manager Electronic Differential Lock Front Sideshaft Limited Slip Differentials Power Transfer Unit Disconnect CountertrackTM Jointed Propshaft CrosstrackTM Propshaft Joint CountertrackTM ECO Twin
Slide 9: Strategy and Execution
Strategy and Execution © Dana 2018 9
Slide 10: Compelling Strategic Combination
Compelling Strategic Combination Scaling Completing the Portfolio the Platform Leading Delivering Electrification Value © Dana 2018 10
Slide 11: Strategic Fit
Strategic Fit Complementary core processes and capabilities Increasing content with Dana existing Adding world-class customers engineering capabilities Adding key light-Adding all-wheel-drive vehicle customers capabilities Increasing platforms served Increased penetration Leveraging GKN high-growth
Slide 12: Proven Acquisition Capability
Proven Acquisition Capability 2015 2016 2017 2018 Proven record of accretive acquisitions and successful integrations © Dana 2018 12
Slide 13: Leadership Driving Transformation
Leadership Driving Transformation ($ in millions) ~12.8% Sales EBITDA Margin ~ 12.3% CEO Kamsickas CFO Collins Join Dana 11.6% ~$7,900 ~$7,600 11.3% 11.3% $7,209 $6,617 10.8% $6,060 $5,826 2014 2015 2016 2017 2018E 2019E © Dana 2018 13
Slide 14: GKN Driveline Highlights
GKN Driveline Highlights © Dana 2018 14
Slide 15: A Leading Provider of eDrive Systems...
A Leading Provider of eDrive Systems... Pioneer in Electric Driveline Systems With 9 programs in production and >700,000 electric axle drives produced to date, GKN Driveline’s experience is unmatched 8 programs to launch, including 4 in China eDrive Offerings Illustrative Automotive Platforms Recent
Slide 16: ... With Growing Content per Vehicle...
… With Growing Content per Vehicle… Front-Wheel-Drive (FWD) All-Wheel-Drive (AWD) FWD – AWD Internal Combustion Engine Internal Combustion Engine Battery Electric Gearbox Motor Inverter Software / Controls © Dana 2018 16
Slide 17: ... Poised for Exponential Growth...
… Poised for Exponential Growth… The Right Product for Every Vehicle Architecture (units in millions) 110 101 88 Optimized AWD drivetrains ICE Hybrid transmissions PHEV BEV eAxles HEV BEV Integrated eDrive modules 2015 2020 2025 ICE PHEV / HEV – Plug In / Hybrid Electric Vehicles BEV – Battery Elect
Slide 18: ...With an Exceptional Presence in China
…With an Exceptional Presence in China Electric Vehicle Market in China Joint Venture Overview (units in millions) 37.0 30 years of experience and growth in China 2017-2025 CAGR: >40% 1st western Tier 1 automotive components supplier in China Shanghai Driveline Systems joint 16.0 venture, establishe
Slide 19: Combination Rationale
Combination Rationale © Dana 2018 19
Slide 20: Unique Strategic Combination
Unique Strategic Combination Scaling the Portfolio • Combined sales of $14.2 billion • Leadership positions across all three mobility markets • World-class management team with deep industry expertise Completing the Platform Enhanced customer coverage Comprehensive product offering Broad end market
Slide 21: Scaling Up to be a Global Leader
Scaling Up to be a Global Leader A Global Leader in Drive Systems(1) ($ in billions) $14.2 Leading provider of $0.8 drive systems across $13.4 all 3 major mobility markets $7.2 $7.0 Creates the largest $0.8 $6.2 driveline supplier in the world + Powertrain Car Powertrain Driveline Powertrain Powertr
Slide 22: Most Comprehensive eDrive Offering...
Most Comprehensive eDrive Offering… GKN Electric Driveline Capabilities Dana Electric Driveline Capabilities Mining Single-speed eAxles Multi-speed eAxles Co-axial eAxles Medium-duty EP 8 Transit Bus Axle Transmissions Multimode eTransmissions Integrated eDrive Systems Select Vehicles Sports Cars CU
Slide 23: ...With Significant CPV Increase
…With Significant CPV Increase Internal Combustion Engine Electric Trucks ~2x Buses ~2x Construction ~1x © Dana 2018 23
Slide 24: Diversified Business Mix...
Diversified Business Mix… Dana GKN Driveline Dana / GKN Driveline Off-Highway Off-Highway 15% 21% SUV / Truck Off-Highway SUV / Truck 59% 8% 30% Commercial Vehicle Balanced End- 10% Market Mix = Commercial Vehicle CUV / Car CUV / Car 20% 92% 45% FCA Ford Ford All other 14% 16% All other 22% 28% 44%
Slide 25: With a More Complete Product Offering
With a More Complete Product Offering Light Vehicle Commercial Vehicle Off-Highway FWD AWD RWD 4WD Commercial Mass transit Agriculture Construction Competitor A Competitor B Competitor C © Dana 2018 25
Slide 26: Balanced Geographic Presence ...
Balanced Geographic Presence … Dana GKN Driveline Dana / GKN Driveline Americas EMEA Americas EMEA 35% EMEA 34% 51% 30% Americas 39% 43% RoW 23% RoW RoW 27% 19% Total pro forma combined sales in China of $2.6B1 Combination brings together two of the largest driveline joint ventures in China Legend D
Slide 27: ...With Industry Leading Joint Ventures in China
…With Industry Leading Joint Ventures in China Top Chinese Light Vehicle OEMs Top Chinese Commercial Vehicle OEMs OEM Supplier Joint Venture OEM Supplier Joint Venture #1 #2 #3 #4 #5 Dana and GKN have joint ventures with the largest Chinese OEMs Source: IHS. © Dana 2018 27
Slide 28: Significant Synergies
Significant Synergies ~$235 Million Procurement $120 Purchasing scale benefits Align commercial terms Synergies equal to ~1.7% of Strategic supply partnerships combined sales Operating Efficiencies Synergies to be implemented Integrate global footprint within first three years $70 Lean manufacturing
Slide 29: Value Creation
Value Creation © Dana 2018 29
Slide 30: Significant Shareholder Value Creation
Significant Shareholder Value Creation Illustrative Pro Forma Equity Value $ in billions 25% Increase $9.1 $0.6 $7.3 $1.2 Global Leader $3.5 GKN Driveline eDrive Offer Opportunity Scale and $3.8 Diversity Current Dana(1) Combined Equity Value Synergies, net Tax Benefits Illustrative PF Equity Value
Slide 31: Attractive Financial Profile
Attractive Financial Profile 2017 Sales 2017 Adjusted EBITDA / Margin1 $ in billions $14.2 $0.8 $1.8 $13.4 $0.2 $0.2 $1.4 $7.2 $7.0 $0.8 $0.8 $0.8 $6.2 $0.2 + = + $0.6 = 11.6% 10.8% Proportional Unconsolidated JV Sales Run-Rate Synergies Source: Dana financials based on reported financials. GKN Driv
Slide 32: Strong Balance Sheet
Strong Balance Sheet Pro Forma Capitalization Dana Transaction Pro Forma Committed debt financing in place ($ in millions) 12/31/2017 Adjustments 12/31/2017 No maturities until 2023 Cash and Marketable Securities 643 – 643 Undrawn Revolver 578 625 1,203 Liquidity $1,221 $625 $1,846 Robust liquidity
Slide 33: A Winning Proposition for All Stakeholders
A Winning Proposition for All Stakeholders Stakeholders Customers Employees plc Substantial synergies and significant OEMs prefer working with suppliers Dana’s exceptional people culture value creation potential they trust and have developed focused on employee engagement partnerships with over many
Slide 34: Unique Strategic Combination
Unique Strategic Combination Scaling Completing the Portfolio the Platform Leading Delivering Electrification Value © Dana 2018 34
Slide 35: Accelerating Transformation, Growing Through Electrified Mobility
Accelerating Growing Through Executing Enterprise Increasing Electrified Transformation Strategy Shareholder Value Mobility
Slide 36: 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 and other adjustments not related to our core operations (gai
Slide 37: Synergy Information
Synergy Information The information regarding synergies and similar information elsewhere in this presentation relate to the synergies being targeted by Dana following the consummation of the transactions. The estimates and forward-looking statements are necessarily speculative in nature and it can