Dana Incorporated Q3 FY2025 earnings call

• Improving business performance with restructuring initiatives turning from headwinds to tailwinds. • Volume comps are getting better despite year-over-year decline. • Tariff impact is less of a headwind, with USMCA compliance reducing headwinds. • Cost savings are on track to deliver $310 million, realized quicker. • Off-Highway divestiture remains on track to close later in Q4 with almost all regulatory approvals secured. • Capital returns: bought nearly 30 million shares or just over 20% of shares outstanding and expect to complete repurchase over next month. • Light-truck demand relatively stable; Commercial Vehicle sees deterioration in North America and Brazil but outlook improved with tariff and cost recovery factors.

Sales for the quarter were $1.917 billion, up $20 million compared to Q3 of last year. Adjusted EBITDA came in at $162 million, an improvement of $51 million year-over-year. Our margin expanded by 260 basis points to 8.5%. EBIT improved significantly to $53 million from a loss of $8 million in the prior period. Net income attributable to Dana was $13 million compared with a loss of $21 million in Q3 of last year. Sales for continuing operations are expected to be approximately $7.4 billion at the midpoint of the tightened range. Adjusted EBITDA from continuing operations is now expected to be about $590 million at the midpoint of the narrower range, approximately $15 million higher than previously anticipated. Full year adjusted free cash flow is anticipated at $275 million at the midpoint of the tighter range for the year.

• Sales from continuing operations expected at midpoint of $7.4 billion. • Adjusted EBITDA from continuing operations midpoint at $590 million, $15 million higher than prior. • Full year adjusted free cash flow midpoint at $275 million. • Volume and mix expected to lower sales by ~$600 million. • Performance expected to increase EBITDA by ~$110 million. • Cost savings to add $235 million in profit. • Tariff impact expected to lower profit by ~$20 million but majority recovered next year. • Foreign currency translation expected to increase sales by $25 million. • Commodity cost recovery expected to drive ~$15 million higher sales and ~$5 million headwind to profit.

• Volume softness, particularly in CV North America and Brazil. • JLR down for about 5 weeks in Q3. • Some supplier or EV program cancellations with associated charges in Q3 but expected to recover in Q4. • Uncertainty in Commercial Vehicle market with depressed levels and no immediate signs of turnaround.

Q: How are the tariff policy changes affecting different OEMs?

A: The rebate is based on vehicles assembled in the U.S., so U.S. OEMs like the Detroit 3 benefit more as they make more in the U.S. than European or other transplants. The risk of customers passing higher prices to end customers has diminished with new guidelines.

Q: What's the outlook for Commercial Vehicle market?

A: It's deteriorating in North America and to a lesser extent Brazil. Running at ~200,000 unit annualized run rate, backlogs run down, and no signs of pre-buy for emissions legislation changes in 2026, expected to be soft into mid-2026.

Q: What are the cost savings opportunities beyond the $310 million program?

A: Still have ~$50 million to $75 million over next few years from standardization and systems work. Footprint opportunities, product line rationalization, and improving EV cost base from drag to accretive. Automation in plants below other suppliers, with opportunities there.

Q: When will the EV charges recovered in Q3 be seen?

A: The $10 million or so of EV charges in Q3 are expected to be recovered in Q4.