Dana (DAN) UBS Global Industrials and Transportation Conference summary

Strategic announcements and rationale

• Announced intention to divest the off-highway business and a CEO leadership change, aiming to complete the transaction within 4–6 months.

• $200 million in operating cost reductions targeted, with a run rate by 2026, to maintain or improve EBITDA margins post-divestiture.

• Divestiture driven by undervaluation of off-highway business and shifting EV growth prospects.

• High strategic buyer interest at attractive valuations; process advanced due to market rumors and customer inquiries.

• Off-highway segment is highly separable, with minimal shared facilities and integration limited to corporate overhead.

Cost reduction and operational focus

• Significant portion of cost savings comes from reduced EV spending as technology development is largely complete.

• Cost reductions already underway, with benefits ramping through 2025 and full $200 million savings expected in 2026.

• Future strategy focuses on core programs and incumbent positions, with selective investment in new opportunities.

• Proceeds from the sale will be used to de-lever and return capital to shareholders, not to fund new program pursuits.

• Free cash flow conversion expected to improve significantly post-transaction, targeting $200–$300 million annually.

Market outlook and segment performance

• Light and commercial vehicle markets expected to remain soft, with a challenging operating backdrop.

• Electrification adoption is slower than anticipated, with customers focusing on real demand rather than incentives.

• Off-highway electrification remains limited due to operational environments, with some urban applications progressing.

• R&D and CapEx for remaining business will be lower but still above pre-electrification levels, managed more efficiently.

• Labor issues have eased, with improved plant efficiency and reduced reliance on temporary workers.