DAN - Earnings call transcript Q2 2024

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Operator

Good morning, and welcome to Dana Inc.

Second Quarter 2024 Financial Webcast and Conference Call. My name is Regina, and I will be your conference facilitator. Please be advised that our meeting today, both the speakers' remarks and Q&A session will be recorded for replay purposes. [Operator Instructions] There will be a question-and-answer period after the speakers' remarks, and we will take questions from the telephone only. has that to one callers a everyone Q&A., in question that time. ask we limit ensure an participate opportunity today's at To themselves to

to an would Corporate like would Communications, Relations go Dana's the the Please question, to Senior you turning begin At ahead, ask Craig by over If please time, Barber. like to return Mr. and call the presentation I Director queue. this Investor additional Barber. to of

Craig Barber

Dana's future you Second presentation from Thank Good results today. for here Call. about today for could discuss XXXX joining Today's Quarter morning. includes our us Earnings expectations performance. differ statements forward-looking we for what Dana's Actual

in the could more future safe refer results, our about SEC. and please found our public reports our factors For filings details with that affect to statement the harbor

to Before this find press where proceed, invite we I our investor website, presentation. you'll visit release and morning's you

the the recorded, Incorporated. As recorded, call is today's being and rebroadcast or copied may are supporting consent. They our without a materials written Dana of not reminder, property be

On have Officer. Dana's Executive and Chief Chief Kraus, Jim and President we the Timothy this Chairman Officer; Financial Senior Kamsickas, Vice call morning, and

to to turn Now I'll call the started, over get Jim.

James Kamsickas

today. implementing sales Adjusted and for I'll Please in million, impact organization. serve. Good other achieved $X.X as in quarter, EBITDA joining by efforts the billion left offset in Dana and outstanding X, $XXX quarter aspects products, of that development helped slower-than-expected pleased an Dana EV Their I'm of the margin of side, the the of the inflation and markets as the by second with was we with well line the about Global have report second the across last driven strength is for for thank of spending XXXX. Page of team to morning, just quarter the second quarter and which demand improvements discuss on efficiency me to collective year EV did execution business year. to you last the who of ongoing turn all highlights us Dana's end-to-end over where the Starting core up on job

cash difference last to strong of X a due down the this the payments was year, free $XXX periods. $XX million only time between timing from Next, flow the million,

Moving this to the right the company-wide highlights, efficiency several on by a consistent under slide, the upper Dana key drive to the team quarters, with continue profit. improvements incremental past

Dana well year. organic positions the achieved conversion As year to strong above an our is traditional full on in on stated a rate historical This sales performance conversion our page, achieve the trajectory targets. of half on the company and XX% extremely first the

of the center most Moving relatively saw levels as stable of overall half across to markets. of growth year sales end first right slide, organic remain the we the demand through the our

seeing mentioned, our ICE we demand our weakening and programs, EVs product as As off-highway are as traditional in markets. I in well end some some in particularly

Lastly, the ongoing improvements, remains the capital Dana's year. for outlook our on track investment improvements rest financial efficiency and of

this $XXX maintaining presentation. are due our a range, our the flow raising in cash full we our will in million financial is over prior midpoint later This and of updates guidance. you increase range. and at XX% walk the Tim details through the while other the quarter free adjusting slightly this we're primarily approximately profit our pullback While EV, sales to estimate to again, outlook

on for business the turn year. for me Page this to the Please outlook environment with X

resulted customer efficiency in supported and I key cost, which factors, areas across overall stated the by which a environment last we will year to continues detail. compared As quarter, of greater business has by Beginning on see few production, in left the continue of greater all improved to enterprise. slide, efficiencies we production improved lower company-wide stability greater provide last to the improve side driven Dana's productivity

steel next commodity the XXXX. of supply projected be profit net year, to for the to though headwind be remaining are sales the with and flat still Moving compared to expected prices are a chain, to mostly

a a declined, recoveries As sales of with we headwind. input customers driving margin reversal see and commodity costs have

the demand of side the our Lastly, refreshed, contributor page, year, benefit left-hand business to Dana weakness. is on But is of some to rolling from on showing market this growth. profitable end which numerous and new conquest continues a is pockets that

offsetting to the EVs. We gains in for vehicle commercial are that our market from share also softening benefit continue commercial group demand partially

Moving of the right to page. the

Let's monitor trending mining where demand we year. and and we'll Demand our take flat to are levels. on remain last should down continue a to with market Though end outlook, at compared cautious this compared continue somewhat equipment look construction for we seeing XXXX. agriculture market,

production We refreshed stable remaining also recently light relatively full-frame vehicle for truck see platforms. vehicle volumes key

there production However, in of for risen is market vehicles back the half may slight we a dealer inventory the of have over levels heavy After compared several quarter. in and seeing the are years with softening last be which growth, year, year. the expected, lower

to despite Moving that increasing bottom our we slide, globally. cost labor witnessing show is cost takeaway across are is key inflation that the of the industry the somewhat moderating

schedules efficiency production which achieve provides a to stabilize, continue stable environment production improvements. to OEM operating

demand for Lastly, programs. vehicle a the market is of current light overall navigating fluctuation period EV

integrate and saw due by work fleets portfolios. quarter, through to we for commercial into they trucks move temper the as we the EVs their operators lower EV to As vehicle investments demand second

continued ongoing models, activity investment of we demand. more manufacturers and EV is development robust balance for in truck the by a future market Given quoting this believe in

across will Shifting across examples with markets all enabling Dana manufacturers a vehicle great solutions often I drive anticipate these as new win the products systems a for illustrates and and share on to applications hybrid and variety to markets. is fully approach all nascent ability visual mobility integrated serve. Dana's deliver page traditional, EV business X next hybrid Slide is I'll representation some We we such the current ICE, of adoption. electric that do, hybrid of class-leading you as balanced of how technologies to gears and e-Axles future systems

compartmentalize EV. DAF left featuring for quarter share be is we To Beginning the medium-duty Dana's hybrid and this for top ICE in one of of our year. all-new the an added the page, icons This X commercial one of ICE, will one to programs axles Europe We're truck, to the better, in conquest that and and start vehicle. the ICE launching excited on this one we've front vehicle third rear the for with is larger page, of in Europe. business

reliability solution Spicer and fuel medium and specifically helps vehicle to for heavy-duty a They Our are lifecycle and installation class maneuverability. leading provide axles while improving lightweight cost, that reduce designed markets. cost

battery the On-Engine with employ you application. of operating for Electric to offer example of significantly operation of true increase boom-lifts new rough of sources, machine the power. intervals, for under and rental center on by hybrid added the models unit we indoors generator a supplying off-highway operating page, increase These flexibility. flexibility lifts the Today, Hubs same a hybrid and Hybrid and a with with booms Dana to be diesel drive. providing power are multiple major Torque use generators and Spicer Moving terrain will combination scissor our an X a boost benefit vehicle engine hybrid OEMs. extended as units operation different battery offering and small diesel a a utilization productive offering

this is must in portfolio environments work customers. their restricted opportunities will decarbonization supplying some for construction The of where truck. our new e-Axle part far emissions hybrid our electric important the the going leading spaces. Completing such cleaner Dana for way Spicer right eSXXXXr in we're use year. the into residential cleaner, Bollinger share urban excited balanced And performance that third our Bollinger new inquirer off-highway pure to addition, portfolio, solutions be BX the industry. has our truck become all-electric and focus light-duty more page, In noise increasingly an creates BX all-new of on accelerating efficient as and the is vehicles on for The a across vehicle be the production

truck to which a needs, to exact of fit vehicle be seamless van is downtime. will lighter to heavy-duty electric a minimal as pickup. be vehicle gross heavy-duty passenger and While comparable vehicle, similar vehicle a larger look may to configured rating it this pounds, this fleets This XX,XXX will cycle weight transition duty with or be their designed the to possible custom unique making duty as that has by

a on proven rear engineered wide this can incorporated based vehicles, our it platforms medium-duty drive truck the Spicer be is so e-Axle for applications. into eSXXXXr bus of reducing complexity. spectrum axle exceptional with flexibility engineered ePropulsion Our We've and driveline solution

nearly that of It's an In mobility X first can years electric every us of such our full of regardless capabilities in customers all from commercial and of and of classification stretch Dana's products fact, efficient examples fluctuations more light markets as the showcase to that construction medium market. found type energy generation management SUVs our demand much and are our North a vehicle equipment, the that needs solutions moves the to being These more, X hybrid world. tractors, machinery, ago. carts agricultural the original across to to not any were propulsion of suite vehicles, particular be market breadth around trucks than America and axle propulsion golf ICE, vehicle in used we and with meet in enables highly all Z the of say

significant I of will profit regarding Dana's direct the so update execution of far Beginning to the a this is of me associates. where of team Turn end-to-end on expansion of talented, the with efforts left our drivers our world-class Slide year. you the page, side X, result

flat pullback sustained and serve. business standardized and are lower markets improvements currency commercial As traditional profit effectiveness and demand as driving other and encompass expansion which EV for commodity growth, we recoveries, year-over-year through driven the successfully by processes company some as despite well one core across Dana, Dana's priorities sales are systems. we driven financial in sustained impacts,

Our operating ensure the achieved efficiently excellence and on cost our asset is reduction business execution global of as that excellence run operational as laser-focused disciplined we by and priorities that cross-company to centers is on leveraging through synergies which management, possible. center

only to XX%. side outstanding possible first driving of XXXX you this half you as of of few the and All was increased made back the execution global of this our By as example, the million years expansion because on EBITDA $XXX the right has finished the by over significant page. of last or is of we first and This see XXXX look the way profit compare XXXX, adjusted team. and half of and up collaboration illustrated year can

mobility company. agnostic. internal And is What finally, to sustained it the outstanding a I provide the taking apart time execution note support is across that on hybrid that manufacturers customers business with you source truly as ability presented solutions markets. driving all combustion, we spanning energy place strong What previous deliver slide, that execution The we is, can outlook. mobility our is and mean to our today. balanced that result Thank a markets profit for it's all and important beyond your goes towards the long-term end-to-end portfolio financial successfully by EV class-leading across targets is

who over you financials. turn to it like to I'd Now the Tim, will walk through

Timothy Kraus

quarter you, year's $XXX for for second Year-to-date XXXX. billion, Beginning higher and our and due a better now with slightly the million was that is increase higher sorry, turn $X.XX currency billion, million. of than or backlog. X.X%, was -- morning. adjusted a X XX and year. a were $X.XX EBITDA and million Please Thank translation were profit basis of below second EBITDA with margin X.X%, me commodity just basis points offsetting Slide for sales year last the sales last margin points XX for than results review demand good previous $X.XX quarter Year-to-date, second quarter, improvement. recoveries of billion Jim, an in of $XXX profit million to higher I'm to the $XX a lower $XX year-to-date Adjusted

Full assets $XX for Profit income Net net year efficiencies second to off-highway $XX to was primarily year, stable of The due business to about customer the held loss was than value segment net company, more primarily year last $XX by the order is less the primarily lower quarter, value discussed for due of our within million million compared million quarter. last difference net actions. sale in the income the this This first and noncore year. attributable our due classified adjust $XX divestiture income restructuring that a planned as carrying million fair of improvement across to last costs. hydraulics selling million better Dana was to is we patterns. $XX is estimated recognized aided quarter business the to from to

for a cash and higher the the flow the now was Please flow to programs, $XXX sales driver $X million partly the year-to-date and with were Slide vehicle market quarter driven cash demand million triggered for this also in year. full of the for by $XX for commercial million tax markets. $XXX period sales finally, operating This valuation than the change me newly Beginning end on transaction of lower the XXXX. And Operating vehicle, for Europe. year quarter in traditional gains profit off-highway increased allowance for higher in in year XX organic was offset demand $XX share the turn refreshed XXXX. million prior by second million left,

$XX margin and increase efficiencies was EV million in incremental and vehicle the due XX was This entire very Adjusted EBITDA lower margin across a our Adjusted basis improvement. EBITDA vehicle margin generated commercial point million. and sales on strong segments. our driven sales which primarily $XX organic an off-highway by improved battery sales organic company, offset growth products, was $XX headwind. cost was to of our basis by million, cooling hybrid in demand point XXX lower

from offsetting engineering the the positive contribution Continued lower EV for higher programs investment sales. drove profit,

compared $XX impact. translation was value lower driven real by no the million, currency by to million sales the and $X the of Profit decreased with margin Foreign dollar. euro lower the by U.S. primarily Brazilian

commodity to the with mechanisms due year. point by million basis profit recovery $XX in prices, recovery second Finally, The lower customers, million, cost than within lower commodity prices offset commodity was agreements the profit of by commodity the a resulting cost of quarter benefit XX in to a our the $XX lower timing being was decrement falling last margin.

to year's quarter than Lower XX last was timing Free higher to to cash turn flow. our million I'll of quarter. due the of by in higher interest various $XX driven details timing the due which and lower cash million last timing taxes year, free offset quarter, flow first $XX Slide was were Next, for the regional second million second mostly Working interest of than requirements net mix. payments, payment capital $XXX payments. primarily

Finally, capital this future lower launch more driven a for the new business to $XX of last and was support than programs. normalized EV year, year by backlog cadence million timing spending investment

Please turn to with me XXXX. for XX our upgraded guidance now Slide for

improved compared expect to to to of measures our continue last We year. all financial guidance be

few a updates outlook. However, our there are to

of this vehicles. range updated slower or to our previous -- First, billion to growth in year midpoint about of sales are we trimming the electric for outlook $XX.X X range for end at the lower our to the primarily demand due

of million Second, higher we about is $XX million our guidance last of are maintaining profit year. at midpoint This range. than the $XXX the

year. points the range. implied X.X% last This increased XX of margin margin Our revised improvement over the midpoint a basis has points at X.X% to XX basis profit is by

million Third, cash we are the again to year. million free million our higher for increasing than $XX this year for $XXX full quarter, guidance full for $XXX year by last flow

unchanged provide $X.XX are comparable strategic finally, for guidance we due a remains to diluted our periods, reinstating year. to adjusted share per this per primarily at prior the to earnings guidance EPS GAAP actions And measure Our share.

in expect measure. adjusted in be midpoint. at We our Note to we of the items amortization that are range $X.XX diluted with adjusting EPS this with only EBITDA assets, or intangible $X.XX the and onetime adjusted measure, line to of $X.XX

profit will I highlight the organic Slide year. the me sales where turn compared full with XX, last to growth. Please Beginning changes with of year expected now and to drivers

to now to gains. moderate than and lower organic in continued million. new million sales $XXX profit expected higher additional from markets. our EBITDA approximately be about is weakness business, increase This a previous increase Adjusted $XXX outlook vehicle products savings margin market and growth The and points is sales on cost For expect efficiencies our due basis market company-wide of XXX XXXX, continuation we the traditional actions. heavy in share traditional about through slightly of

other half no we reduced million year expected for about EV with lower are our contribute demand. divestiture our and $XX products to headwind. slowdown million due in now sales. The I business EV about to As sales expectation sales incremental adjusted in are profit, expect mentioned, to lowering this the and and industry-wide EV the The engineering have by this to year our positive We continues of we incremental $XX is expected EBITDA be $XX second were profit and a EV expenses close maintaining million impact. in

million. million, Foreign currency slightly approximately profit of on $XX $X be modest impact with headwind of sales translation is expected to more a

Finally, to million our expected lower headwind prices. commodity about driven recoveries by falling of other be due is to and a outlook steel commodity to sales $XX

the $XX a with our due by mechanisms customers. profit million recovery to expect our of commodity governed headwind true-up X-way We pricing

XX at Lastly, a now of please is flow outlook, our $XX $XXX guidance improvement to be We the Slide our by lower turn free million full about to for free cash for spending. midpoint me year capital range. prior flow XXXX. cash with outlook driven anticipate over on million the This

from about higher lower be than We to than I today. cash expected payment due rates our higher to Regina, to better due increased Thank take spending over be interest timing spending XXXX. expect and customer flex and questions. we your as for $XX us you we capital growth back and now this be year is support $XXX call match will technology year, turn which timing. last sales joining last use will higher will about $XX that expected is program in million on to to the million of profits capital million Working of Net to $XX higher $XX $XX about flow year, occurred interest million the and million to or free sales. is million a refinancing about

Operator

Langan the come Wells with Instructions] Our will Fargo. question line from Colin first of [Operator

Colin Langan

second year kind million some of Was I million, that to it's already the big that $XXX almost of you are bit expected those the baked pretty One, at the recent your into But hit all of midpoint, forecasts it, of two, When a little had EVs. I you? of the think, on in half Why what at lower from some sales of the look Why is from cuts outlook? $XXX EVs? larger customers. your seeing guidance, some hasn't impacted S&P a reductions?

Timothy Kraus

forecast. in Tim. built we slowdown been back had the Colin, had the this our of to already original in that Yes, and that is expecting half of so year some already

well. So that's in already in there. there as change And is mix there some then

Colin Langan

is program mean, pushed there year? getting And color next side, on mean, I what... this EV into on the I any

Timothy Kraus

yes. So --

So I the think much we're a seeing it But customer specific of EV program a coming little the not bit it's we return. CD as But lower start volumes some Obviously, of in it. much elsewhere. of it do think that across will to space, really specific. that as space, out lot of is

think So flatten see customers as the to we'll out. to I of see we demand, some rebalance start that

Colin Langan

Got guidance, sort lower first have What to margins second implies like it. at the kind higher on usually sort that it on -- half. to margins of new looks way. half based And first of second midpoint I if of the implied that half to your sales look half the gets

sales second gets what even So in margins half aren't higher up? the if

Timothy Kraus

Yes.

million around high is really the about XX%. only half just something just That -- about at normally million about of EV. we're if convert if think difference, So it, EBITDA. you half XX% you it's would to That $XXX $XX it in losing XX% around and that look of the down

you'll that see difference the look EV. if So at you in

balance company. and a really EV. half So efficiencies is cost costs half the to on structure lot first the those flexing improvement we across from on additional The the second the are of

efficiencies sales million second So that half, and we $XX to ability think really were efficiency showed had half improvement. the if we our lost drive when back those about in last and around you really of our year's something -- year last

even -- we able So the our being the lower feel continue to sales. commitment to good be despite XXX about deliver able deliver on to

Operator

line comes the next Tom question from Our RBC. Narayan with of

Gautam Narayan

and Stellantis with Last levels. X inventory OEMs Ford week, elevated there pretty were dealer

are a XXX,XXX target I that One a like what I 'XX, of you was of in this inventory called how seems as week, as been them to using curious of like perhaps extent know way going OEM it deal production, you cuts to I units mentioned both just last in cut Stellantis with think, know production into as like not actually seems HX are But To just had even concerned of customers, just lot about situation. like incorporating alone. them, a just this HX explicitly it prospectively these -- moving this, I they're of out XXXX. are your customers already guidance. but you in recently yours

Timothy Kraus

Yes.

some a as I'm I this give year, 'XX the ways to of So mentioned not going it's right? still half When in look we of away. before. at color We on quite any back there, the as had

and obviously, we're mix, segments EV and focused on -- then between have light also the and even very And very programs. We obviously, usually focused side. program between truck very obviously,

now as think the we with we'll changes the obviously, as needed. make But forecast in customers. have where we those to adjust, hearing So continue what we're is they line from

Gautam Narayan

then market And just in in your think prepared I vehicle declines. comments, if Okay. mentioned share I squeeze you one, offsetting gains commercial could

Just particular. curious in share is the to this where happening, as maybe gains

James Kamsickas

Thanks for This Jim. Thanks is the attending. for question.

We're It's it. cost, supporting answer you that execute quality to it. long-winded there's us. continuing fortunately, we're And no It's appreciated and global. recognizing customers across are and whatever name world. the our just Just to

Operator

question with comes of Levy next Our Barclays. from the line Dan

Dan Levy

on question wanted vehicle. light a to start I with

is this like obviously, we up EBITDA years. like sort modest margin see think in best of last that a revenue you X the put increase. I on pretty good the something And

recognize this core just EBITDA unwind? of where was just us the can sort I like some you This business. going because for the maybe still trajectory XX% can of margins. us forward given dynamics. a XX%, business these you even How give Duty dynamics it is inflation quite of maybe you sense an robust, just the So production a adjustments, then Super flavor capacity. maybe back that seems the us just with this And can is. these up to sense the a in give level inflation volumes once is underlying LVD go is it on margin of give what maybe platforms still much doesn't of But added

us So the maybe you a can sense there, give trajectory of please?

Timothy Kraus

Yes.

the the terms So move where trajectory the where we're need of -- to in to to at light margins with obviously, we're vehicle really back pleased be. they

the drive obviously, helps across-the-board efficiency, the running think, organization the efficiencies. I customer better with also on but within

So cost -- structure whether conversion within day costs to run the is a out, continue and be from material, or plants it and plants really continuing. direct getting that really see fixed reflected. just the that we cost the and better business in general those in better perspective day But

You still mentioned albeit slowed us, inflation. Inflation down. it's is with

So less from offset to have we go the to customer. try have get to or

that's and are. push. continue what -- certainly, closer can where So last margins to they the our view are a profit will last we've able get invested. to and question, be versus be a susceptible be mean, years. have to had get the back back generator we'll On benefit capital returns there, double-digit these business to certainly the yes, to to over your this return have they and few we I working be margins for these But is need will we

Dan Levy

you the of more past, sort dragged how contextualize there much margins out inefficiencies, still -- system? which the production the much much fruit come improvement of how that there could low-hanging see inflation, you Or can maybe is in on is of how on front? that can the Just the

Timothy Kraus

think of in I able to plants. that's that we've want I part got plants, idea the there's and get production just we out those that's better we But we're into get. how through. there's to specifics scheduling, DNA, of go No, both have don't look, the flexing be seeing of -- Yes. to really And the think certainly, we and taking run additional what -- that now we amounts of that flow you're the cost muscle of

Dan Levy

Great.

modified just this the I calls, is update a that's is if give on could this But I'm there. past on follow-up, is As fluid on to EV an some a side. you And such even environment, on schedules, continuing Jim, commercial automakers and seeing launch come the strategy. it light there us seems up a wondering but change know obviously, question we're side well, vehicle shifts as plans, like the

So still to strategy EV is can it sense maybe if continuing of all, how, on you the Or being maintain a to continuing stay is investment? us at the just modified? path, give the

James Kamsickas

Dan, the unpack, I'll lot best. my thanks to for question. That's a do but

I I guess with terms that But some all strategy challenged not In going think momentum we're of about what's so out, on. get figuring it, the the much right? to around to would answer out fashion be infrastructure it reducing we I might everyone is, would all whatever form or down some and reasons in know, for the say, be. pushing EV on

unique the is very it. As We've visual. We've rigid a the with it from Dana created very been relates to you very for at do a strategy to us, best thing I paint could beginning.

you that. components you have have announced have the inverter, motor, have win look the a you that as an you are at the that that we rigid you controls within e-Axle, Bollinger have example software, take the you and today, And you there, of the in a

business, You Technologies management from the thermal got forth. so our and it on that Power supports so

business at All in a the et assets minimum, units, level of that, across a maximum, cetera. a et on fungible is the cetera, capital human plants fungible. times, many capital At themselves

the commercial the us, and down change to in different light say, river, can And at go diameters, should doesn't different up so at like different products, our off-highway, torque for that because vehicle, vehicle I need and those product, strategy things.

be. case or may So might whatever more be, the may we one because whatever pullback, don't it more to strategy have have our market change delay,

this have speaking, an that future. have personally expect I -- abrupt -- happened with around ago, I X consumers world and But the the start EV, we're So about a years world was go I can't a internal positioned. change are are you'd see and example light can't vehicle buying into If it a engine take think to to have X that mean, in going or if near that there's combustion pullback an would the time see ago, any different, to years dealerships going not for customers an an hybrid people to to optionality change.

The for commercial goes same thing vehicle.

If you cost relative think of to end about important market probably the most the -- important most ownership. total

an OEM, it. behalf speak on relaying of they If not to them, I'm of to me, speak kind you're I'm here

total don't things bad cost happen give people a Good happen vehicle to the people. choice. on -- depending the things ownership You good optionality and or of

of to scenarios. always going to We're using It if or equipment return get is hybrid. it's customers. human capital EV it. We'll if it's So support and capital matter have types all of a those you're capital, both Capital ICE blind. just good our doesn't on capital, our

capital, investment, just how You grows, that's a -- much on not hope of you but deploy you we're continue that's you answer, I an the too to company it. margin. return expand thinking make about

Operator

of the comes question with from next Our UBS. Spak Joe line

Joseph Spak

I to maybe of bit to want sort think and about little the it guidance back get a differently.

some XX% the half. like tougher know look, So is bit sort maybe But and year, we of at a the it you that on down in the gain spoke to end look over level for you we half still platforms little you tougher of second half, total organic, like million positive mean, key end looking and $XXX down markets. if those of I look traditional bring did the I over are assumes And -- sales if you're be know some for. of some to that which of markets

some us driving understand just that indication and possible? So what's by can you really segment, even maybe if help

Timothy Kraus

Yes.

impacted light I our the half think in second strike. -- forget, last year, significantly vehicle UAW the don't by was especially

of all to about that by going where were back. volume on we're And talk can strike, that's customers production but plans, back. sort our impacted the programs and largest significantly that we are So get

some the at also that We last run in be had launches that year back should half rate. better

So those helping. are obviously all

year. peak the able from got start are still have of the that's then, that half see of side. generally And outside the ICE through perspective sales parts in that from growth we of a ICE support But America also continue to headwinds to the are off-highway we've We of back to perspective the why an mix growth. that some on business North course,

Joseph Spak

I in to something I conversion traditional side then still the but in guidance Like down the cost half. obviously just steps strong. really half, XX% mid-XXs the the that mean, first I the back similarly, the margin growth guess or does the And right? in imply side, guess, Okay. on on

but think, I'm is there So But be we think you organization -- talked do sort you I that just as know within more done, the investments, of can wondering, efficiency. and I prudent capital figures we like, the sort beyond do half? we guess, that contribution more this of beyond Like normal some return the year. back impacting are margins, as how should -- of the comps to about

James Kamsickas

Joe, Jim. this is

to you're Just view let done. be company. all kind to to if the of We've improved, Manufacturing, be one off that's try sustained into all questions. processes you me incredible more can And kind improved appropriate get platform Absolutely Can to build sustained here. the that a and worth is systems a we've of and bit yourself, long just little and dive taken doing that done? more of. build give build what an been about

kind of expect of as efficiencies. within we to cross-company fully control, we a improve on what's the all all, what of on your to refer continue that drivers first So to

et the on light contracts got got overall every that too just especially to cetera, we you as you I remind vehicle, cetera. to -- with addition fixed is do, with, as In profitability business, have fixed all business, and contracts hit you to -- the well know but of et suppliers relative it deal the

build to benefit out, and many roll-on the in of we choice, getting to many, still, new going supplier to reap program. continue those continue cases, we're As are of

-- growth, for it. to to but just flow. level, decades, So in on think and over like way importantly more It's improve and think to companies electrification the to trajectory, I ran margin we don't just the platform there's way both years. about of capital go out the would that's we cash that's some, capital more an see new capital profitable ambient a continue forward moving the to We you have gain you of terms have that say Not and have. off the like build it's had utilize growth, not the of existing

Joseph Spak

one quick Okay. one. Maybe

be Super Ontario? support that confirm you'd production in Duty you can able to Just

James Kamsickas

is always We will yes. the customers our And production support sure. answer for for

Operator

from with comes question James Picariello the next Our line of BNP Paribas.

James Picariello

This Jake on for is James.

an could TMX hoping and some what to on Hydro Hydro-Québe update impact cash just was timing on give us First, Quebec payment put, you color and I the could the be?

Timothy Kraus

Sure. This agreement is the we're process Tim. the Sure. obviously, in shareholders' through. specific that we're a mean, I process The -- today. has working contract

We'll timing, be or take to it this going it's certainly, update more. we early some I time. But to continue next. late of will as know year think certainly, terms In

of there neighborhood million, the It's In currently in is, we disclosure that's terms and and we have $XXX haven't for, we've that of some time which -- view is started it with view the had the although the of in out of the the there. books what somewhere process the are value in down terms on Hydro-Québec. put of this believe changed process, early our view, our what currently we we since in we for

James Picariello

an could you to material, the give turn us to guys appears just be the Great. market. then they over outlook And on especially Ag it negative. off-highway

your what's assumption there? So

Timothy Kraus

Yes.

correct. So incomes still down. down. we We're see farm being ag Obviously, --

our -- You is which the Deere, out coming John one customers, in of can see larger ag. of you've especially news heard

view, market it's so play our a ag don't yes, forecast. But year So continue rest have we bit -- market, Obviously, of to down we built reacting we ag every all the a monitor in which into is current differently. that. is -- they're

James Kamsickas

Okay.

again. Just comments. This some concluding is Jim

that a my are and it lot as shortcuts to no time. bit, a not the of I like But business, there just personalizing do, It's always years thing to and CEO, suppliers. I one over [Indiscernible] all, you today. the questions very XX mobility has time little for your it would privilege is; well XX this for of is attendance in as surrounded and kind -- of almost that First say, thank never changed today, much win, your

and execute to technology quality, have and operational excellence delivery, innovation, cost, on You customer right? satisfaction, changes, never

We'll have would systems, companies incremental level out on day. methodical across sales that continuing you occurred the would XX% across Difficulty] various platforms, sales see, support will for base. have can the to occurred your us, small long to perform later. continue every to that and money They're running going supply rest one on caps. of conversion because imagined through propulsion the In our the but markets time just we're at or the is to the and No haul, direction Thanks incremental going the you in markets, coming obviously, going extremely prove -- again definitely the just not to a -- talk high attention. come destruction end back to [Technical

Operator

call. joining today's for all you Thank

now may disconnect. You

Dana (DAN) 31 Jul 242024 Q2 Earnings call transcript