Dauch (DCH) Jefferies Global Industrials Conference 2026 summary

Integration progress and synergy roadmap

• Dowlais acquisition integration is progressing well, with $70 million in synergies achieved so far and a target of $300 million by the end of year three, focusing on SG&A, purchasing, and operations.

• SG&A and product engineering synergies are on track, while indirect purchasing savings are progressing and direct purchasing savings are expected to be realized by 2027–2028.

• Operational synergies involve implementing a unified operating system and restructuring for efficiency, with no significant negative surprises or cultural issues reported.

• Vertical integration and leveraging manufacturing strengths are key to capturing additional margin and supporting synergy goals.

• Integration learnings from past acquisitions have led to early focus on program readiness and management.

Market environment and business performance

• Volumes and macro environment have been steady, with some softness in heavy-duty platforms and elevated launch costs due to supplier challenges.

• Increased European exposure has introduced more seasonality, particularly in August, but this is being managed through planning and cost structure adjustments.

• Customer feedback on the merger has been positive, with expanded product offerings and global reach enhancing competitiveness, especially amid new tariff regimes.

• The order book is robust, with over $2 billion in quoting opportunities, nearly double previous levels, and a balanced mix across ICE, hybrid, and EV platforms.

• Regional strategies include growing electrified axle business in China and supporting Chinese OEMs' global expansion, while maintaining cost competitiveness in Europe and flexibility in North America.

Portfolio management and growth opportunities

• The Metal Forming group, including GKN Powder Metallurgy, has shown strong performance, benefiting from operational improvements and competitor exits.

• Growth vectors in powder metallurgy include additive materials and magnets, with some opportunities extending beyond automotive.

• R&D spend is measured and focused on core strengths, with ongoing optimization as part of the synergy plan.

• Industrial exposure remains at about 20% of the powder metallurgy business, with openness to organic growth in non-auto sectors.

• Portfolio overlap from the merger is minimal, with ongoing evaluation of small divestments for non-core assets.