Dana Incorporated (DAN) Business Update Call (Transcript)

Company and Industry Overview * Company: Dana Incorporated (NYSE:DAN) * Industry: Automotive and mobility * Focus: Engineered powertrain, sealing, and thermal management solutions for internal combustion engines (ICE), plug-in hybrids (PHEV), and electric vehicles (EV). Key Financial Highlights * Third Quarter 2024: * Sales: $2.5 billion, down 2.5$232 million, down slightly from last year despite the sales reduction. * Profit Margin: 9.4%, up 30 basis points year-over-year. * Year-to-Date 2024: * Sales: $7.95 billion, down$119 million year-over-year. * Adjusted EBITDA: $699 million, up$10 million year-over-year. * Profit Margin: 8.8%, up 30 basis points year-over-year. Market and Operational Updates * Off-Highway Segment: * Demand: Lower, particularly in Europe, due to softening construction and agriculture equipment markets. * Efficiency: Company achieved company-wide efficiency improvements, resulting in increased profit margin. * EV Segment: * Demand: Declining due to lower end market demand in driveline segments, partially offset by gains in battery cooling sales. * Investment: Company continues to invest in EV technology and capacity, but remains flexible based on market demand. * Overall Strategy: * Maintain Discipline: Achieve balanced growth while navigating market cyclicality and volatility. * Leverage Synergies: Maximize impact through product, system, and technology offerings across all end markets. * Optimize Resources: Maintain agility to meet ICE, PHEV, and EV demand across multiple markets and regions. * Prudent Capital Allocation: Maximize investment in new business growth. Future Outlook * 2024: * Sales: Expected to be about $10.3 billion, down from previous guidance due to lower demand for traditional and electric vehicles. * **Adjusted EBITDA**: Expected to be about$875 million at the midpoint of the updated range. * Free Cash Flow: Expected to be about $100 million. * **2025**: * **Lower Cost Structure**: Expected due to navigating softer end market demand and tempered demand for electric vehicles. * **Investment**: Expected to be about$375 million to support backlog and technology development. Additional Notes * Inflation: Company continues to manage inflationary pressures through cost-saving actions and improved efficiency. * Commodity Prices: Lower commodity prices have positively impacted profitability. * Capital Allocation: Company remains focused on prudent capital allocation to support growth and maximize returns.