Dana Incorporated (Formerly Dana Holding Corporation) Business Report FY ended Dec. 2018
|(in million USD)|
|FY ended Dec. 31, 2018||FY ended Dec. 31, 2017||Rate of
|Sales by segment|
1) Net Sales
-The Company’s sales in the fiscal year ended December 31, 2018 increased 13.0% from the previous year to USD 8,143 million. Organic sales increased by USD 861 million, primarily due to stronger markets across all truck segments, increased demand for off-highway products and new business. Acquisitions of Brevini and USM in the first quarter of 107 and TM4 in the second quarter of 2018 minus the divestiture of the Company’s Brazil suspension components business added a total of USD 57 million in sales. Foreign currency translation effects increased sales by USD 16 million as well.
2) Light Vehicle segment sales
-Sales in the Company’s Light Vehicle segment in the fiscal year ended December 31, 2018 totaled USD 3,575 million, an increase of 12.7% over the previous year. Excluding currency and acquisition effects, the segment’s sales increased by 12% over the previous year. Contributing factors included increased production of full frame trucks in North America, increased sales volumes from and existing customer in which production of an outgoing model coincided with production of the new model, and increased production levels globally. Customer pricing and cost recovery impacts also increased sales by USD 36 million.
3) Commercial Vehicle segment sales
-In the fiscal year ended December 31, 2018, sales in the Company’s Commercial Vehicle segment increased by 14.2% from the previous year to USD 1,612 million. Sales in the segment increased by 17% excluding currency effects due to increased production globally, specifically in North America, Brazil and Europe. Customer pricing and cost recovery impacts increased sales by USD 20 million.
4) Power Technologies segment sales
-The Company’s Power Technologies segment had sales of USD 1,112 million in the fiscal year ended December 31, 2018, an increase of 0.7% over the previous year.Sales decreased by approximately 1% from the previous year excluding currency effects, due to programs scheduled to begin in 2019 and weakening passenger car demand.
Oerlikon Drive Systems acquisition proceedings
-Oerlikon announced that it has signed a definitive agreement to divest its Drive Systems Segment to the Company for an enterprise value of CHF 600 million. This transaction marks a strategic milestone for Oerlikon as it can fully concentrate on growing its surface solutions and advanced materials businesses, while strengthening its Manmade Fibers Segment. The transaction is expected to close in late 2018 or the first quarter 2019, subject to customary approvals and closing conditions. In 2017, the Drive Systems Segment generated CHF 730 million in revenues and employed over 5,100 employees worldwide. (From a press release on July 30, 2018)
-The Company announced the successful pricing and allocation of senior secured incremental financing in conjunction with its plan to purchase the Drive Systems segment of the Oerlikon Group. "This acquisition will deliver significant long-term value and provide numerous opportunities to drive profitable growth by accelerating our commitment to vehicle electrification and strengthening the technology portfolio for each of our end markets," said Timothy Kraus, Company senior vice president and treasurer. Under the terms of the agreement, the Company will acquire Oerlikon's Drive Systems business for CHF 600 million. The transaction is subject to customary regulatory approvals and is expected to close in the first quarter of 2019. (From a press release on November 19, 2018)
Unsuccessful attempt to acquire GKN Driveline
-The Company signed definitive agreements to combine with the Driveline division of GKN to create a global leader in driveline systems. The total consideration is composed of USD 1.6 billion in cash proceeds to GKN, the assumption of approximately USD 1.0 billion of pension liabilities, and 133 million new Company shares issued to GKN's shareholders, valued at approximately USD 3.5 billion. Under terms of the agreements, Company shareholders will own approximately 52.75% of the new entity with GKN shareholders owning 47.25%. The combined entity will be domiciled in the UK. The transaction is expected to result in USD 235 million of annual cost synergies within three years. (From a press release on March 9, 2018)
-GKN informed that Melrose Industries announced revised terms of its offer to acquire the entire issued and to be issued share capital of GKN, consisting of 1.69 new Melrose shares and 81 pence in cash per GKN share. The Board of GKN has unanimously rejected it, having concluded that the Revised Offer fundamentally undervalues the company and its prospects, as it does not reflect the value of GKN’s world class Aerospace business, and dose not also reflect the benefits of merging GKN Driveline and the Company. (From a press release on March 12, 2018)
-Further to GKN’s announcement about the proposed merger between the Company and GKN Driveline, the Company announced that the new combined business, in addition to being listed on the New York Stock Exchange, will hold a standard listing on the London Stock Exchange. Additionally, the Company confirmed that it expects to continue to pay its current quarterly dividend of USD 0.10 per share to the enlarged shareholder group. The Combined Group brings together two great companies, creating a U.S. and U.K. led global leader in vehicle drive systems and electric propulsion that is well suited to address the long-term demands of global customers and expected to deliver USD 235 million in synergies. (From a press release on March 19, 2018)
-The Company announced that in support of strong investor interest in its combination with GKN Driveline, it has improved the terms of its agreed combination and will also double the size of its share repurchase program to USD 200 million. The Company has increased the cash element of consideration by USD 140 million. As a result, the total cash consideration is approximately USD 1.77 billion. (From a press release on March 26, 2018)
-GKN announced that Melrose had received valid acceptances in respect of a total of 901,318,533 GKN shares, representing approximately 52.43% of the voting rights of GKN and Melrose’s unsolicited offer has been declared unconditional as to acceptances. Accordingly, the Board of GKN now intends to work with Melrose to ensure the success of the enlarged company, in the interests of all stakeholders, including employees, customers and shareholders. The Company announced that it acknowledges the decision by a majority of the shareholders of GKN to accept the proposal by Melrose Industries to acquire GKN. As a consequence, it appears unlikely that its proposed combination with GKN Driveline will proceed. (From a press release on March 29, 2018)
-The Company and Hydro-Quebec announced a joint-venture partnership in which TM4, a subsidiary of Hydro-Quebec, will become the Company’s source for electric motors, power inverters, and control systems. As part of the agreement, the Company will own a 55% interest in TM4 in exchange for CAD 165 million, while Hydro-Quebec maintains a 45% interest. TM4 designs and manufactures motors, power inverters, and control systems for electric vehicles, offering a complementary portfolio to the Company’s electric gearboxes and thermal-management technologies for batteries, motors, and inverters. The transaction establishes the Company as the only supplier with full e-Drive design, engineering, and manufacturing capabilities. Founded in 1998, TM4 operates a technology and advanced manufacturing facility in Boucherville, Quebec. (From a press release on June 22, 2018)
-The Company and Workhorse Group Inc. announced the design, development, and production of a city delivery vehicle featuring the Company's Spicer Electrified integrated e-Drive axle. Workhorse designs and builds high-performance battery electric vehicles including trucks and aircraft. It also develops cloud-based, real-time telematics performance monitoring systems that are fully integrated within its vehicles. "Workhorse's extensive development background and manufacturing experience in the EV space provide the industry-leading capabilities we sought in a strategic partner," said Mark Wallace, executive vice president of the Company and president of Dana Commercial Driveline Technologies. (From a press release on May 1, 2018)
-The Company launched its new Spicer 175 series single drive axle, offering the industry's lowest numeric gear ratio, 1.95:1, for optimum engine downspeeding. The axle is ideal for European heavy-duty vehicles and is well suited for various global applications, including North American linehaul trucks. The Spicer 175 series is the Company’s most efficient and reliable single heavy-duty drive axle and is supported by a host of performance-optimizing features, including a differential case design with a premium integrated ring gear for reduced weight and oil churning losses, and precision AdvanTEK gearing for improved efficiency. (From a press release on September 19, 2018)
-The Company was selected by Ford Motor Company to supply Spicer SmartConnect disconnecting all-wheel-drive (AWD) systems for the global Ford Edge program. Starting with the 2019 model year, the Company will be the exclusive worldwide supplier of rear drive units for all versions of the Ford Edge in North America, Europe, and the Asia-Pacific region. In conjunction with Spicer AdvanTEK axle technology, the SmartConnect system configures the drivetrain to work in FWD mode for the majority of driving conditions and engages AWD only when needed. The systems are being produced at the Company’s plant in Columbia, Missouri. A new 80,000-square-foot manufacturing facility in Chongqing, China will launch production in late 2018 to serve Ford's operations in the Asia-Pacific region. (From a press release on October 29, 2018)
-The Company has been selected by Daimler AG to supply front and rear propshafts to the all-new Mercedes-Benz X-Class pickup truck and latest generation Sprinter van. The Company was awarded the propshaft business for the Sprinter's all-wheel-drive offerings in North America and Europe, as well as rear-wheel-drive offerings in North America and Argentina. To accommodate the three different wheelbase configurations of the Sprinter, The Company engineered both two- and three-piece rear propshaft assemblies. The Company will supply two-piece propshaft assemblies for the X-Class pickup. (From a press release on August 28, 2018)
-The Company’s Spicer single-drive axles will be standard equipment on International MV Series medium-duty trucks and IC Bus CE Series and RE Series models. The standard-product position is effective immediately and includes Dana Spicer S110, S130, S140, S170, and S190 models, as well as the 060 Series. Spicer single-drive axles offer numerous advanced design features that reduce installation and life cycle costs, including lighter weight over competitive models. The Company also holds standard-product position across all International Truck and IC Bus models with its full line of Spicer driveshafts. (From a press release on July 24, 2018)
-The Company introduced of a new line of axles with AdvanTEK technology that will be featured on every Jeep Wrangler JL. AdvanTEK technology provides greater torque capacity and fuel efficiency than similar offerings, while reducing driveline weight with lighter, higher-strength materials and advanced Spicer AdvanTEK gearing. The Company also introduced a new line of aftermarket axles and Spicer drivetrain components for the Jeep Wrangler JL. (From a press release on June 7, 2018)
-The 2018 Isuzu FTR from Isuzu Commercial Truck of America exclusively features the Company’s Spicer driveline technologies, including Spicer E-Series steer axles, Spicer Life Series driveshafts, and Spicer single-reduction single drive axles. Engineered for medium-duty trucks, Spicer single-reduction single drive axles support vehicles with a gross axle weight rating (GAWR) of 19,000 pounds. Spicer E-Series steer axles feature a steel-forged beam design that reduces axle weight by up to 69 pounds compared with competitive offerings. Spicer Life Series medium-duty driveshafts are precision balanced for reduced noise, vibration, and harshness performance. (From a press release on May 2, 2018)
-The Company will be the exclusive driveline supplier for the Hino XL7 and XL8 Class 7 and 8 commercial vehicles. The trucks feature Spicer D- and E-Series steer axles, SPL 140 and 170 driveshafts, and several models of Spicer single and tandem drive axles, including the AdvanTEK 40, newly released S172 heavy-duty single drive axle, and D46-172 heavy-duty tandem axles. Hino will begin production of the trucks in early 2019 at its facility in Mineral Wells, West Virginia. (From a press release on April 25, 2018)
-The Company has been selected as the driveline supplier for the all-new 2019 Chevrolet Silverado 4500HD, 5500HD, and 6500HD chassis cab trucks. The conventional-cab trucks will be available in both two-wheel-drive and four-wheel-drive configurations and will feature Spicer S-Series drive axles, Spicer D-Series steer axles, Spicer front drive steer axles, and Spicer Life Series driveshafts. Production of the Silverado Class 4, 5, and 6 trucks is slated to begin in late 2018. (From a press release on March 22, 2018)
-The Company has announced new contracts to supply front and rear axles for the next generation of iconic Jaguar and Land Rover luxury vehicles. The total estimated value for these programs is greater than GBP 300 million. The Company’s latest Spicer AdvanTEK axles will deliver greater power density in a compact package, achieving improved fuel efficiency, enhanced performance, and maximum durability. The Company’s total investment for the Jaguar Land Rover programs is expected to be approximately GBP 21 million. The axles are produced at Birmingham, England. (From a press release on March 22, 2018)
-The Company supplies its Spicer AdvanTEK M180 all-wheel-drive axle for the new Volkswagen Crafter 4 Motion panel van, and its Spicer AdvanTEK M250 rear axle for rear-wheel-drive versions of the VW Crafter. Both axles are manufactured in Birmingham, England. A key feature of the M180 all-wheel-drive axle is its advanced electronic-locking differential. (From a press release on March 5, 2018)
-The Company was named a 2019 Automotive News PACE Award finalist for its Spicer AdvanTEK axle system. The Spicer AdvanTEK system reaches 30% greater efficiency than previous best-in-class technology. The solution specifically addresses the energy losses related to oil churning and gear and bearing friction to increase efficiency, while maintaining durability and noise, vibration, and harshness performance. This is the eighth consecutive year that the Company has been named a finalist for the PACE award. (From a press release on October 15, 2018)
-The Company has earned a Diamond Award from Spartan Motors for its staunch commitment to quality, on-time delivery, total cost control, and excellent customer support. The Company supplies Spartan Motors with Spicer axles, driveshafts, and steering shafts for commercial vehicles from facilities in Henderson, Kentucky; Lima, Ohio; and Sterling, Illinois. (From a press release on April 26, 2018)
-The Company was named a GM Supplier of the Year by General Motors for Powertrain Cooling during its 26th annual Supplier of the Year awards ceremony. The award covers many of the power cooling technologies that the Company supplies to GM. Those technologies include auxiliary transmission oil coolers for Chevrolet Silverado and GMC Sierra pickups; diesel fuel coolers for heavy-duty pickups; and long internal battery cell coolers for the Chevrolet Volt, which the Company has supplied GM since the first-generation of the Volt launched in 2011. The battery coolers enable efficient heat transfer between the battery's cells, improving battery life and performance. (From a press release on April 24, 2018)
-The Company was recognized with the Superior Award for achievement in value analysis from Toyota Motor North America (TMNA) at its Annual Supplier Business Meeting. The Company also received awards for Best Localization and Value Analysis from Toyota South Africa. The Company engineers in North America worked closely with Toyota to optimize the rear propshafts in the Toyota Tacoma, Sequoia, and Tundra vehicles. The team implemented innovative design changes to the product, helping to achieve cost savings and improving the customer experience. In addition, the Company team in South Africa was recognized for its Value Analysis work in refining the propshaft and rear axle drivehead for Toyota's IMV platform, while ensuring quality and delivery by optimizing production in the local market. (From a press release on March 29, 2018)
-Based on the assumption that the Oerlikon Drive Systems acquisition concludes during the first quarter of 2019, the Company expects that its sales for the fiscal year ending December 31, 2019 will be between USD 8,950 million and 9,350 million.
|(in million USD)|
|FY ended Dec. 31, 2018||FY ended Dec. 31, 2017||FY ended Dec. 31, 2016|
|% of Sales||3.1||3.1||3.4|
-As of December 31, 2018, the Company has seven standalone technical and engineering centers. In addition, the Company has twelve additional sites that conduct research and development activities.
-The Company recently showcased its advanced driveline solutions to global automotive manufacturers during its Winter Test events in Arjeplog, Sweden, and Michigan’s Upper Peninsula. The tests demonstrated the high-performance capabilities of the AdvanTEK torque-vectoring all-wheel drive system, Spicer Electrified e-drive gearbox, Spicer OpTiMa central tire inflation system (CTIS), and Spicer SmartConnect disconnecting all-wheel-drive technology. Driving over snow, ice, and rugged terrain, the Company’s technologies were showcased under the testing grounds' harsh conditions. (From a press release on April 12, 2018)
IAA Commercial Vehicles 2018 exhibition
-At the IAA Commercial Vehicles 2018 trade show, the Company revealed its comprehensive Spicer Electrified with TM4 portfolio, including fully integrated electro-mechanical propulsion systems featuring gearboxes, electric motors, inverters, and thermal-management technologies. With the recent acquisition of TM4, the Company’s electrification capabilities now include in-house design and manufacturing for electric motors, power inverters, and control systems. Ranging from complete systems and modular solutions to individual sub-system components, the Company is able to support customers in the light vehicle, commercial-vehicle, and off-highway markets, in developing series and parallel hybrid configurations up to full battery-electric vehicles. (From a press release on September 19, 2018)
Hannover Messe 2018 exhibition
-The Company will display its latest fuel-cell technologies at Hannover Messe 2018, in Germany. The Company will showcase its e-mobility products, including battery and electronics cooling solutions and fuel-cell components. Among the fuel-cell components exhibited will be bipolar plates made from stainless steel or graphite composite. Other fuel-cell component products showcased include charge air coolers, a range of gas-to-liquid cooling solutions, and valves. In addition, the Company will display its thermal management subsystems, which are critical in advanced fuel-cell engine performance. With state-of-the-art designs, they provide enhanced performance with reduced parasitic energy losses to help customers meet fuel efficiency and durability targets. (From a press release on April 24, 2018)
|(in million USD)|
|FY ended Dec. 31, 2018||FY ended Dec. 31, 2017||FY ended Dec. 31, 2016|
|Eliminations and other||31||19||27|
-The Company expects to have capital expenditures of approximately USD 350 million, or 4% of its net sales, in the fiscal year ending December 31, 2019.
Investments outside U.S.
-The Company inaugurated a facility in Yancheng, China, that will manufacture thermal-management products for conventional and green vehicles. The Company repurposed an 8,000-square-meter plant with a CNY 105 million investment, making it the Company's 16th facility in China and the second in Yancheng. The new Yancheng facility will manufacture thermal-acoustical protective shielding, including direct-insulation heat shields, and battery cold plates used in plug-in hybrid electric vehicles. The Company expects production to reach approximately eight million units at the facility once peak output is achieved. The Company’s customers in China include BMW, Daimler, Ford, VW Group, Nissan, Great Wall, Geely, Volvo, SAIC, SAIC-GM, FAW, Chery, and Foton. (From a press release on May 23, 2018)
-The Company’s Dana Canada operations is investing CAD 7.3 million to expand production of heat shields in Chatham, Ontario. The Company’s direct investment of CAD 6,662,596 will be supported by an additional CAD 662,229 from the Southwestern Ontario Development Fund. The project is expected to be completed by December 2020. The Company also has facilities in Cambridge and Mt. Forest, and two facilities in Oakville. (From Ontario Provincial Government release on March 15, 2018)