DCH

• Integration and Synergy Progress

• 5 months post-transaction, the combined company has achieved $70 million in annual run rate synergies, remaining on track to hit $100 million+ in run rate savings by the end of 2026, $180 million by end of year two, and $300 million by end of year three. To date, most realized synergies have come from SG&A and corporate cost elimination, with early progress already seen in procurement and operational efficiency initiatives. The synergy split target is 30% SG&A, 50% procurement, 20% operations.

• Operational and Customer Highlights

• Dauch received the Ford Supplier of the Year award in the quality category for FY2025, and won multiple new program awards across European, Asian, and North American customers covering mainstream, high-end performance, and off-road vehicle segments. The company currently has more than $2 billion in active new and incremental business quoting, including capacity expansions for high-demand programs and next-generation platform pursuits. 85% of this current quoting activity is for ICE and hybrid vehicles, aligned with Dauch's core portfolio strength. Cross-selling opportunities between Legacy Dauch (strong Detroit Three relationships) and Legacy DALE (strong European/Asian OEM relationships) have increased the company's total addressable opportunity pipeline.
• Metal forming margins have improved steadily over recent quarters, driven by combination with DALE's higher-margin powdered metal business and operational improvements in core Legacy Dauch metal forming operations. Management sees further upside from higher capacity utilization, insourcing opportunities, and growing reshoring demand from global OEMs.
• DALE's business is broadly aligned with original acquisition expectations, with prior restructuring efforts already largely completed. Remaining optimization work focuses on facility upgrades, full capacity utilization, and rolling out the Dauch operating system to improve productivity over the next two years.

• Financial and Balance Sheet Progress

• Q2 2026 adjusted free cash flow was $148.4 million, up from $48.7 million in the prior year quarter. Net debt totaled approximately $4.1 billion as of June 30, 2026, for a net leverage ratio of 2.6x. Dauch has redeemed $250 million of 2028 maturity notes, eliminating all major debt maturities before 2029 and ending the quarter with $2.5 billion in total available liquidity. The near-term priority is deleveraging to a target of 2.5x net leverage or lower before expanding shareholder return programs.

• Dauch has tightened and lifted the low end of its full-year 2026 guidance, driven by stronger-than-expected first half performance. Full-year 2026 guidance is now:

• Sales: $10.6 to $10.8 billion, up from the prior range of $10.3 to $10.8 billion
• Adjusted EBITDA: $1.36 to $1.425 billion, up from the prior range of $1.3 to $1.425 billion
• Adjusted free cash flow: $260 to $325 million, up from the prior range of $235 to $325 million
• China SDS joint venture income (included in adjusted EBITDA): $70 to $80 million, up from the prior range of $65 to $75 million
• Capital expenditure: unchanged at 4.5% to 5% of annual sales

• Full-year 2026 guidance assumes global production of 91.1 million units, with 15.1 million units in North America, 16.9 million units in Europe, and 31.6 million units in China. Sequentially, North American production is expected to decline 4% and European production 8% in the second half of 2026 due to normal seasonality.

• The GM next-generation full-size truck program launch is expected to begin in September 2026, with temporary customer production downtime and volume impacts during the transition period that are already incorporated into current guidance. Content per vehicle for Dauch is broadly similar to the outgoing generation of the program.

• Cash restructuring costs are expected to decline meaningfully in 2027 after substantial completion of DALE legacy restructuring projects by the end of 2026.

Dauch Corporation operates as a combined entity following the acquisition of DALE. Legacy Dauch reported lower adjusted EBITDA in Q2 2026, impacted by lower volume/mix, the divestiture of the India commercial vehicle axle business, and an $8 million hit from a UAW work stoppage at the Three Rivers, Michigan facility. These headwinds were partially offset by $8 million in improvements from legacy metal forming performance and cost management. DALE contributed $1.45 billion in gross sales (49% of total Q2 2026 sales of $2.96 billion) and $180 million in adjusted EBITDA, representing a 12.4% margin. Overall company adjusted EBITDA for Q2 2026 was $389.6 million, with a consolidated margin of 13.2% matching the prior year's margin. Regionally, approximately 60% of revenue comes from North America, 25% from Europe, with the remainder from other global regions including the China joint venture SDS.

• Ongoing renegotiation of USMCA trade rules creates uncertainty around regional content requirements. While Dauch's "buy and build local" strategy and combined regional footprint provide flexibility to adjust operations if rules change, the ultimate impact cannot be estimated until negotiations are finalized. Changes to content requirements could require operational rebalancing across North America, though reshoring trends may also create incremental business opportunities.

• Elevated energy prices created incremental Q2 2026 costs, and continued high energy prices could pressure second half results. Unlike commodity input costs, energy cost increases do not have automatic pass-through to most customers, with only limited automatic recovery in Europe.

• Labor inflation from ongoing UAW facility negotiations is a potential headwind, though management notes current guidance already incorporates its best estimate of updated labor contract costs. New higher labor cost agreements will increase operating expenses if ratified at remaining facilities.

• While commodity input price increases are generally contractually passed through to customers with 30-90 day lags, sustained macro inflation for materials like steel and freight could pressure margins if pass-through is delayed.

• The GM full-size truck transition, while already incorporated into guidance, creates temporary volume and production volatility in the second half of 2026.

• Synergy realization for procurement and operational initiatives is back-loaded, with full benefits not expected until year three, creating execution risk around hitting long-term synergy targets.

Q: What does the 2027 cash restructuring cost outlook look like after the decline in H2 2026 spending, and what drives the expected change? / A: Most 2026 restructuring spending supports legacy DALE facility restructuring that began prior to the Dauch acquisition. This work is substantially complete by the end of 2026, so cash restructuring costs will drop meaningfully in 2027 from current 2026 run rates. No specific 2027 number has been provided.

Q: What is driving the guidance upward adjustment despite modestly lower global production assumptions, and what is the outlook for growth next year? / A: The upward guidance revision reflects stronger-than-expected Q2 sales and operating performance that drove the better first half result. For 2027, core growth will come from newly launched large programs like GM's next-generation full-size truck, which typically sees strong early market demand and share capture for key suppliers like Dauch, providing upside to overall results.

Q: Given the $2 billion active quoting pipeline, how is it split between legacy Dauch and DALE, and what is the EV/ICE mix? / A: The pipeline is evenly balanced between the two legacy businesses, demonstrating the strength of the combined comprehensive portfolio. 85% of the current pipeline is ICE and hybrid vehicle programs, which aligns exactly with Dauch's core product sweet spot. The $2 billion figure only includes new incremental business and capacity uplifts, excluding existing platform replacement and extension programs.

Q: What is the expected path for shareholder returns after debt paydown, and when can shareholders expect increased capital return? / A: Dauch's stated capital allocation framework prioritizes deleveraging to a net leverage ratio of 2.5x or lower first, following the acquisition-related debt issuance. Only after reaching this stable leverage threshold will the company expand capital allocation to include increased shareholder-friendly activities such as buybacks or dividends. The company is currently on track to hit this deleveraging target through continued debt reduction.