Dana Incorporated · NYSE:DAN
Dana — Q3 2020 Earnings Presentation
26 slides from Dana's earnings presentation, Oct 28, 2020
Slide 1: 2020 Third-Quarter Earnings Conference Call
2020 Third-Quarter Earnings Conference Call October 28, 2020
Slide 2: 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 about our industry and
Slide 3: Agenda
IntroductionCraig Barber Senior Director, Investor Relations and Strategic Planning Business ReviewJames Kamsickas Chairman and Chief Executive Officer Financial ReviewJonathan Collins Executive Vice President and Chief Financial Officer Agenda
Slide 4: Business Overview: Third Quarter Results Key Highlights
Business Overview Market rebound continues New EV business win Market expansion in EV’s EV software investment Sustainability focus $2.0 billion Third Quarter Results Key Highlights sales adjusted free cash flow $261 million adjusted EBITDA $201 margin 10.1 diluted adjusted EPS $0.37 million % 1 2 3
Slide 5: End-Market Conditions
End-Market Conditions Light Vehicle Off-Highway Commercial Vehicle Heavy-Duty Markets 50% of Sales* * 2019 Dana sales including 100% of DDAC Joint Venture 50% of Sales* Light-Duty Market Light-truck demand stronger than expected Key vehicle inventories remain low N.A. and China have recovered fastes
Slide 6: Off-Highway Electrification Integration
Off-Highway Electrification Integration Program win driven by integration of acquired technology New program win – launching 2021 New electric wheel drive design Combines technology from acquisitions Enables zero-emission vehicle Increased Dana content on vehicle by 4x 2
Slide 7: EV Customer Spotlight
EV Customer Spotlight ZERO-EMISSION Class 8 Urban Delivery Truck ZERO-EMISSION School Bus ZERO-EMISSION Waste-Disposal Truck 3
Slide 8: Software Engineering Investment
Software Engineering Investment Leader in operating software for medium- and heavy-vehicle markets Located in North America CAPABILITIES Electric control units Vehicle software Platform design Application engineering services All Mobility Markets ISO 26262 TS 16949 ISO 14001 Dedicated Software Engin
Slide 9: Sustainability Goal
Sustainability Goal: Energy Efficiency Renewable Energy Waste Elimination Water Conservation Dana to reduce total annual GHG emissions by >50% by 2035 Reduction of 300,000+ metric tons of GHG, annually 5
Slide 10: Financial Review
<u> Financial Review
Slide 11: 2020 Q3 Financial Results
2020 Q3 Financial Results See appendix for comments regarding the presentation of non-GAAP measures ($ in millions except EPS) 85% sequential sales growth driven by the economic recovery following production shutdowns as the result of the global pandemic Lower diluted adjusted EPS primarily due to l
Slide 12: 2020 Q3 Sales and Profit Changes
See appendix for comments regarding the presentation of non-GAAP measures Organic decline driven by global production shutdowns due to the COVID-19 pandemic Rapid increase in demand for light trucks drove higher premium costs and inefficiencies driving higher decremental margin Currency translation
Slide 13: 2020 Q3 and YTD Free Cash Flow
2020 Q3 and YTD Free Cash Flow Q3 adj. FCF generation driven primarily by earnings and working capital improvements Year-over-year improvement in adj. FCF attributable to working capital improvement and lower capital spending Q3 2020 also benefited from lower one-time costs, interest and taxes 1 Inc
Slide 14: 2020 FY Financial Guidance
2020 FY Financial Guidance Providing guidance for key financial metrics as end-market dynamics have stabilized Sales guidance implies lower sequential sales in Q4, which is in line with a normal seasonal cadence Anticipate higher than normal YoY decremental margins in Q4 as a result of Brazilian ind
Slide 15: 2020 FY Sales and Profit Changes
11.8% ~8% 2020 FY Sales and Profit Changes ~20 bps ~(400) bps ~20 bps Impact of global COVID-19 pandemic driving lower sales and profit Continued cost management yielding mid-20s% decremental margins Graziano & Fairfield acquired in March 2019; sales shown through February, profit includes full-year
Slide 16: 2020 FY Adjusted Free Cash Flow
2020 FY Adjusted Free Cash Flow Modest source of cash from working capital on a FY basis as sales increase in H2 driving rebuild of net trade balances Aggressive management of capital spend driving free cash flow benefit while continuing to support new business launches 1 Includes costs associated w
Slide 17: End-Market Outlook
End-Market Outlook Light-truck demand expected to remain strong for our key platforms New product launches for Bronco and Bronco Sport will drive growth Class 8 and medium-duty demand expected to strengthen New business from EV programs beginning middle of next year Expect continued improvement in a
Slide 18: leeghe Finding ff Otter Way?
leeghe Finding ff Otter Way?
Slide 19: Appendix
Appendix
Slide 20: 2020 Q3 Sales and Profit Change by Segment
2020 Q3 Sales and Profit Change by Segment See appendix for comments regarding the presentation of non-GAAP measures 12.2% 9.7% Positive Change Negative Change Segment EBITDA Sales Quarter Light Vehicle Drive Systems Commercial Vehicle Drive and Motion Systems Off-Highway Drive and Motion Systems Po
Slide 21: Segment Profiles
* Includes sales to system integrators for driveline products that support FCA vehicles Segment Profiles Performance Customer Sales Regional Sales $ Millions $ Millions $ Millions Light Vehicle Drive Systems Year to Date 9/30/2020 Commercial Vehicle Drive and Motion Systems Year to Date 9/30/2020 Of
Slide 22: Diluted Adjusted EPS
Diluted Adjusted EPS S DANA INCORPORATED Diluted Adjusted EPS (Unaudited) For the Three Months Ended September 30, 2020 and 2019 DANA INCORPORATED Diluted Adjusted EPS (Unaudited) For the Nine Months Ended September 30, 2020 and 2019 (in millions, except per share amounts) (In millions, except per s
Slide 23: Segment Data
Segment Data ~~ DANA INCORPORATED DANA INCORPORATED Segment Sales and Segment EBITDA (Unaudited) Segment Sales and Segment EBITDA (Unaudited) For the Three Months Ended September 30, 2020 and 2019 For the Nine Months Ended September 30, 2020 and 2019 Three Months Ended Nine Months Ended (In millions
Slide 24: Segment Data Continued
segment Data Continued DANA. DANA INCORPORATED Net Income (Unaudited) For the Three Months Ended September 30, 2020 and 2019 ‘Three Months Ended (in millions) September 30, 2020 2019 ‘Segment EBITDA S204 $ 253 Corporate expense and other items, net @) @) Adjusted EBITDA 201 250 Depreciation (88) (82
Slide 25: Cash Flow Reconciliation
Cash Flow QS DANA INCORPORATED Reconciliation of Net Cash Provided By (Used In) Operating Activities to Free Cash Flow and Adjusted Free Cash Flow (Unaudited) Three Months Ended (In millions) September 30, 2020 019 Net cash $ 321 Purchase of 1 d (60) Free cash flow 261 Discretionary pension contribu
Slide 26: Non-GAAP Measures Definitions
Adjusted EBITDA is a non-GAAP financial measure which we have defined as net income before interest, income taxes, depreciation, amortization, equity grant expense, restructuring expense, non-service cost components of pension and other postretirement benefit costs and other adjustments not related