Dana (DAN) investor relations material

Strategic transformation and cost reduction

• Executed sale of off-highway business to unlock value and simplify structure, leading to a significant stock price increase and a more focused business model.

• Implemented a $300 million cost reduction program, with one-third from reduced electrification investment and two-thirds from structural simplification and overhead cuts.

• Streamlined operations by consolidating business segments, reducing international corporate expenses, and cutting senior management layers.

• Shifted electrification investment model to require customer co-investment, reducing risk and improving capital efficiency.

• Targeted further automation and activity-based costing to identify additional $100 million+ in cost opportunities.

Financial outlook and capital allocation

• Post-transaction, expects to reduce net debt to 0.7x EBITDA and return $600 million to shareholders via buybacks by year-end.

• Guided to 10–10.5% margins and 4% free cash flow for next year, with most improvements driven by internal actions rather than market growth.

• Buyback preferred over special dividend due to perceived undervaluation, with all near-term free cash flow allocated to shareholder returns.

• Margin expansion expected from annualized cost savings, removal of stranded costs, and new business backlog, including Super Duty volume uplift.

• Electrification business expected to turn accretive as investment levels drop and backlog remains in the hundreds of millions.

Market positioning and industry trends

• North American focus strengthened, with most light vehicle programs and facilities already US-based, limiting direct benefit from onshoring trends.

• Relaxation of federal fuel economy standards could benefit key programs like Super Duty, as electrification will be driven more by regulatory credits than economics.

• Commercial vehicle business in North America, Europe, and South America remains stable, with some softness in North America but resilience elsewhere.

• Competitive position in commercial vehicle driveline improved by new cost-advantaged facility in Mexico, supporting potential share gains.

• Strategic debate ongoing about global expansion versus concentration, especially in commercial vehicles and electrification in China.