Dauch (DCH) UBS Global Industrials and Transportation Conference summary

Operational performance and improvements

• Focused on operational improvements, leading to sequential margin gains and supply chain stabilization, especially in metal-forming sites.

• Workforce and labor availability issues have stabilized, supporting margin improvement.

• Ongoing optimization and efficiency initiatives are expected to continue driving productivity.

• Emphasis on plant loading and production optimization among facilities.

• Agility and adaptability to short-notice plant downtime are key priorities to minimize decrementals.

Market outlook and industry trends

• Interest rates and consumer affordability are top concerns for 2025 planning.

• Policy changes, especially post-election, could significantly impact business direction and industry dynamics.

• ICE (internal combustion engine) programs are expected to have a longer tail, with EV adoption slower than forecasted.

• Hybrids and ICE vehicles will coexist with EVs, supporting volume and cash generation.

• Uncertainty is causing delays in long-term customer decisions and quoting activity.

Capital expenditure and investment strategy

• CapEx is targeted at 5% or below of sales, with episodic increases tied to major program launches.

• Historical CapEx has trended down due to focus on reusing and refurbishing equipment.

• Extending ICE programs reduces CapEx needs, shifting focus to retooling rather than new equipment.

• Electrification investments continue but can be regulated and paced based on policy clarity.

• Automation is being evaluated, especially for quality control, but must be justified by cost and labor availability.