Dana (DAN) Q4 2023 earnings summary

Executive summary

• FY23 sales reached $10.555B, up 4% YoY; adjusted EBITDA rose 21% to $845M, with margin up 110 bps to 8.0%.

• Three-year net new-business backlog reached a record $950M, up $50M, with 74% EV-related; it marked a seventh consecutive annual increase.

• More than 100 programs launched in 2023, representing over $2.5B in annualized sales.

Financial highlights

• Q4 sales were $2.494B vs. $2.555B; adjusted EBITDA was $156M vs. $176M, and margin was 6.3% vs. 6.9%.

• FY23 EBIT was $316M vs. $86M; net income attributable to the parent was $38M vs. a $242M loss.

• FY23 operating cash flow was $476M; free cash flow was $(25)M vs. $209M in FY22, on $501M of capital spending.

• Q4 net loss was $39M, or $0.27/share, vs. $179M, or $1.25/share; adjusted net loss was $11M vs. $15M.

Outlook and guidance

• FY24 guidance: sales $10.65B–$11.15B, adjusted EBITDA $875M–$975M, free cash flow $25M–$75M, and diluted EPS $0.35–$0.85; midpoint margin is ~8.5%.

• Growth is expected from backlog conversion, end-market demand, refreshed programs, pricing and share gains; efficiency and cost savings are expected to lift margins.

• Free cash flow improvement reflects higher profit, more efficient working capital and $450M in planned capital spending, while retaining investment in ICE and EV growth.

• Outlook includes lower Commercial Vehicle and Off-Highway volumes; stronger demand and an improved operating environment are expected to support results.