Dana Incorporated · NYSE:DAN
Dana — Deutsche Bank Global Auto Industry Conference 2018
26 slides from Dana's conference presentation, Jan 17, 2018
Slide 1: Deutsche Bank Global Auto Industry Conference
J.P. Morgan Auto Conference August 8, 2017 Jonathan Collins Executive Vice President & Chief Financial Officer © Dana 2018 Dana Incorporated Deutsche Bank Global Auto Industry Conference January 17, 2018 Jonathan Collins Executive Vice President and Chief Financial Officer James Kamsickas President
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: Snapshot
© Dana 2018 Snapshot $ 2017 preliminary sales: $7.2 billion Over 100 major facilities 33 countries on 6 continents With customers in 130+ countries 16 Technical Centers ~30,000 people Based in Maumee, Ohio, USA Founded in 1904
Slide 4: Product Overview
Product Overview Engine Transmission Driveshaft Engine Seals & Gaskets Battery Cooling Electronics Cooling Engine Cooling Transmission Sealing & Cooling Active Warm Up Transmissions Hydrostatic Hydrodynamic Hydromechanical Variable Continuously Variable Planetary Aluminum Driveshafts Steel Driveshaf
Slide 5: End Markets and Customers
Light Vehicles End Markets and Customers Brilliance Jinbei Commercial Vehicles Off-Highway 51% 30% 19% 2017 Preliminary sales percentages include sales of non-consolidated DDAC joint venture
Slide 6: Regional Diversity
Regional Diversity North America South America Europe Asia Pacific 2017 Preliminary sales percentages include sales of non-consolidated DDAC joint venture
Slide 7: Overdrive: Strengthen the Core
SI OVERDRIVE ))) S Strengthen Customer the Core » Operational Excellence fanlelenaicesiing » Design & E1 » Manufact >>>) iii: © Dana 2018 7
Slide 8: Enterprise Strategy Execution
Enterprise Strategy Execution Enterprise Strategy Driving Growth: $800M Backlog Through 2020 World Excellence Award Supplier Quality Excellence Supplier Excellence Award Innovation Supplier of the Year Best Supplier Award Excellence in Innovation Toledo Manufacturing Győr Gear Plant Yancheng Manufac
Slide 9: 2018 Market and Business Update
2018 Market and Business Update North America South America Europe Asia Pacific Housing starts continue to drive recovery in construction market Demand for key light vehicle programs remains strong Commercial vehicle production improving Class 8 customer share remains stable Eurozone economic growth
Slide 10: Major Program Launches
Major Program Launches All Wheel Drive Vehicles Wrangler Global program manufactured in China and the U.S. Dana will supply: Disconnecting AWD Rear Drive Unit Active warm up units, thermal heat shields, valve stem seals, and gaskets Launching 2nd half of 2018 Launch on-track Multiple variants, all f
Slide 11: All-New Ford Ranger
> ALL-NEW FORD RANGER - Dana’ AdvanTEK independent front and solid-rear ‘eae Fd Available axles with optional electronic-locking rear axle er case” (4x4 only), y © Dana 2018
Slide 12: Major New Program Wins
Major New Program Wins Commercial Vehicle Off-Highway Light Vehicle TE14 powershift transmission Dana Smart-suite system for monitoring and control Production anticipated 1st half of 2018 2019 Silverado Class 4 medium duty Class 5 medium duty Production anticipated late 2018 Dana will supply: Front
Slide 13: e-Propulsion Systems
e-Propulsion Systems Spicer® Integrated e-Axle For electric transit bus segments Fulfilling the needs of ‘zero emission zones’ Supplements front of vehicle power source with an integrated e-Axle Optimized for weight savings and efficiency Production beginning this year Mini-bus market: Weighing less
Slide 14: e-Thermal Systems
e-Thermal Systems Electronics Cooling Major supplier of Battery and Electronics Cooling Partnering with over 20 customers in North America, Asia, and Europe New program wins across our customer base Battery Cooling Battery Enclosure 13
Slide 15: Digital Services Offerings
Digital Services Offerings Mobile device data collection Measures tire wear trends Delivers predictive analytics Preemptively minimizes downtime Establishes optimal timeframes for scheduled replacement Leverages Dana’s drive system expertise to solve real-world customer problems SaaS Features and Fu
Slide 16: Outlook and Financials
© Dana 2018 Outlook and Financials Jonathan Collins Executive Vice President and Chief Financial Officer 15
Slide 17: 2017 Preliminary Financial Results
2017 Preliminary Financial Results Preliminary results largely in-line with expectations Sales met prior long term financial targets two years earlier than anticipated as market recovery exceeded original expectations Adjusted EBITDA growth largely driven by profit conversion on market recovery and
Slide 18: Delivered $1.4B of sales and $175M of profit growth
Delivered $1.4B of sales and $175M of profit growth See appendix for comments regarding the presentation of non-GAAP measures 11.3% ~11.4% ~11.6% Positive Change Negative Change Adjusted EBITDA Sales Full Year Sales growth of 24% driven by strong end market demand and conversion of backlog Acquisiti
Slide 19: 2018–2020 Sales Backlog: $800 Million
2018 – 2020 Sales Backlog: $800 Million Future growth will outperform market due to booked business Backlog includes booked incremental new business net of any lost replacement business Increased by $50M or 7% over prior three year disclosure Backlog increase due to new business wins as currency and
Slide 20: 2018 Guidance
Significant improvements across all key financial metrics Sales guidance exceeds prior long term financial targets one year early largely due to pace of market recovery Adjusted EBITDA guidance exceeds prior 2019 targets by $15M while margin progresses nicely towards 12.8% target Cash flow guidance
Slide 21: 2018 Sales and Profit Growth
~11.6% ~12.3% ~$100 Market ~$300 Backlog 2018 Sales and Profit Growth ~20% conversion Sales growth of 6% driven by conversion of backlog and stable end market demand Acquisitions that closed in the first quarter of 2017, net of divestiture expected in 2018, will increase sales; while expanding margi
Slide 22: 2019 Revised Outlook
Outlook exceeds prior 2019 $ targets and confirms % targets Sales guidance exceeds prior long term financial targets largely due to pace of market recovery Adjusted EBITDA outlook exceeds prior target while margin reaches 12.8% as originally expected Strong profit conversion and normalized capital e
Slide 23: Financial Trends: Updated
5 Year Financial Trends: Updated Sales Adjusted EBITDA Cash Flow % of Sales Diluted Adjusted EPS 6.6% ~7.5% ~9.0%* $1.94 $ in Millions $ in Billions 6.7% $1.74 $6.1 $5.8 ~$7.2 ~$7.9 A=Actual; P=Preliminary; T=Target ±2% ±3% ±5% ±4% See appendix for comments regarding the presentation of non-GAAP mea
Slide 24: Capital Allocation Priorities
Capital Allocation Priorities Organic Growth Inorganic Growth 1 2 Cash Repatriation 4 Capital Structure 3 Investing to deliver backlog generates attractive returns Targeting consistent capital spend levels at ~4% of sales Selectively expand product technology Enhance geographic presence Reduce debt
Slide 25: Investment Highlights
Investment Highlights Global Presence 1 Cycle Positioning 5 Broad Customer Base 2 Solid Balance Sheet 7 Expanding Margins & Cash Flow 6 Relevant Technology Portfolio 3 Strong Sales Backlog 4 Clear Investment Priorities 8 24
Slide 26: Non-GAAP Financial Measures
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 (gain/loss on debt extinguishment,
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