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Dana(DAN) - 2024 Q4 - Annual Results
DANDana(DAN)2025-02-20 12:00

Sales Performance and Guidance - Preliminary sales for 2024 were approximately 10.3billion,inlinewithpriorguidance,comparedto10.3 billion, in line with prior guidance, compared to 10.6 billion in 2023, driven by weakening demand for electric vehicles, commercial trucks, and off-highway equipment[2] - 2025 sales guidance is projected between 9.525billionand9.525 billion and 10.025 billion, with adjusted EBITDA expected to be 925millionto925 million to 1,025 million, implying a margin of approximately 10.0% at the midpoint[8] - Sales for 2025 are projected to be between 6,950Mand6,950M and 7,350M for New Dana and between 2,575Mand2,575M and 2,675M for Off-Highway[33] - Lower end-market demand in Off-Highway and currency translation are expected to negatively impact sales and profit[39] Adjusted EBITDA and Margins - Adjusted EBITDA for 2024 was approximately 885million,or8.6885 million, or 8.6% of sales, compared to 845 million, or 8.0% of sales in 2023, reflecting efficiency improvements and cost-savings actions[3] - Adjusted EBITDA margin is projected to improve to between 9.5% and 10.5% in 2026, driven by cost reduction actions[6] - Adjusted EBITDA for 2025 is expected to range from 565Mto565M to 635M for New Dana and from 360Mto360M to 390M for Off-Highway[33] - Adjusted EBITDA margin for 2025 is projected to be between 8.1% and 8.6% for New Dana and between 14.0% and 14.6% for Off-Highway[33] - Adjusted EBITDA for 2025 is preliminarily estimated at 975M,withamarginof10.0975M, with a margin of 10.0%[38] Free Cash Flow and Capital Expenditures - Free cash flow for 2024 was approximately 70 million, compared to a use of 25millionin2023,impactedbyhigher−than−expectedworkingcapitalrequirementsinQ4[3]−Freecashflowfor2025isexpectedtobebetween25 million in 2023, impacted by higher-than-expected working capital requirements in Q4[3] - Free cash flow for 2025 is expected to be between 175 million and 275million,drivenbyimprovedworkingcapitalefficiencyandreducedcapitalexpenditures[6][8]−FreeCashFlowfor2025isanticipatedtobeapproximately275 million, driven by improved working capital efficiency and reduced capital expenditures[6][8] - Free Cash Flow for 2025 is anticipated to be approximately 225M, driven by higher profit and lower capital spending[41] - 2025 net capital spend is expected to be around 325M[35]−2025FreeCashFlowimprovementisattributedtohigherprofit,improvedworkingcapitalefficiency,andlowercapitalinvestmentrequirements[40]−Danaexpectsfreecashflowtobeapproximately4325M[35] - 2025 Free Cash Flow improvement is attributed to higher profit, improved working capital efficiency, and lower capital investment requirements[40] - Dana expects free cash flow to be approximately 4% of sales over the business cycle, with a target of maintaining net leverage at 1x[6] Cost Reduction and Efficiency Improvements - Dana increased its total cost reduction target to 300 million through 2026, with $175 million in savings expected in 2025[2][6] - Efficiency improvements and cost savings actions are driving higher profit and margins compared to the previous year[35] - Lower commodity costs are expected to result in lower sales recoveries, but the profit benefit of lower input costs is more than offset by cost true-ups with customers[39] Organizational and Strategic Changes - Dana is simplifying its organizational structure into two business segments: Light Vehicle Systems and Commercial Vehicle Systems, effective Q1 2025[5] - The company is pursuing the sale of its Off-Highway business, which is expected to unlock substantial value for shareholders and strengthen the balance sheet[5]