GUELPH, ON, March 4, 2015 /CNW/ - (TSX: LNR)
- Sales increase 16.0% over 2013 to reach $4.2 billion;
- Adjusted operating earnings up 47% over 2013 to reach
$447.4 million;
- Adjusted net earnings and earnings per share up 48% over 2013
reaching record levels of $320.6
million and $4.95
respectively;
- Net margins reach 7.7%;
- Excellent level of new business wins in 2014, launch book at
more than $3.4 billion;
- Industrial segment delivers excellent growth and significant
margin improvements from 2013 with operating earnings up 111.0% to
$109.7 million on a sales increase of
23.3%;
- Powertrain/Driveline delivers excellent growth and strong
margin improvements with adjusted operating earnings up 33.5% to
$337.7 million from 2013 on a sales
increase of 14.7%;
- Return on Capital Employed reaches 23.4% continuing our trend
of solid improvements for the last 14 quarters;
- Return on Equity improves 11.0% from 2013 to reach 21.2%;
and
- Positive cash flow reduces Net Debt by $170.6 million from 2013 to $243.1 million and total debt to capital
continues to improve reaching 21.5%.
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Three Months
Ended
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|
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Twelve Months
Ended
|
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December
31
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December
31
|
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2014
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2013
|
|
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2014
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2013
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(in millions of
dollars, except earnings per share
figures)
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$
|
$
|
|
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$
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$
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Sales
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1,003.0
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926.1
|
|
|
4,171.6
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3,595.5
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Operating Earnings
(Loss)
|
|
|
|
|
|
|
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Powertrain/Driveline
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87.1
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79.6
|
|
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337.7
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268.1
|
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Industrial
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14.0
|
5.2
|
|
|
109.7
|
52.0
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Operating Earnings
(Loss)
|
101.1
|
84.8
|
|
|
447.4
|
320.1
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Net Earnings
(Loss)
|
71.8
|
68.7
|
|
|
320.6
|
229.8
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Net Earnings
(Loss) per Share
|
1.11
|
1.06
|
|
|
4.95
|
3.55
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Unusual
items
|
-
|
(13.7)
|
|
|
-
|
(13.7)
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Operating Earnings
(Loss) - Adjusted
|
101.1
|
69.7
|
|
|
447.4
|
305.0
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Net Earnings
(Loss) - Adjusted
|
71.8
|
55.0
|
|
|
320.6
|
216.1
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Net Earnings
(Loss) per Share - Adjusted
|
1.11
|
0.85
|
|
|
4.95
|
3.34
|
|
|
|
|
|
|
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Unusual
items
|
|
|
|
|
|
|
Taxable items before
tax
|
|
|
|
|
|
|
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1) Customer program
cancellation
|
-
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(6.3)
|
|
|
-
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(6.3)
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Tax impact
|
-
|
1.4
|
|
|
-
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1.4
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Non-Taxable
Items
|
|
|
|
|
|
|
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2) Bargain purchase
gain on acquisition of MMKG's business
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-
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(8.8)
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|
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-
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(8.8)
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Total unusual
items
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-
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(13.7)
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|
|
-
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(13.7)
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1)
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In 2013, a customer
program ended prematurely and an appropriate settlement for the
sale of certain capital assets back to the customer and recovery of
certain start-up costs previously incurred was negotiated. As a
result, the company recorded a recovery of $6.3 million related to
start-up costs previously incurred on the program.
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2)
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During the fourth
quarter of 2013 ("Q4 2013"), Linamar acquired certain assets from
Muhr und Bender KG ("MKG") and Mubea Motorkomponenten GmbH ("MMKG")
for MMKG's business of manufacturing and distributing assembled
camshafts, in Germany, which resulted in a bargain purchase gain
that was recognized during the quarter. The purchase price
allocation method used for accounting determined that the fair
value of assets were in excess of the purchase price. This
difference is considered to be a bargain purchase gain which is
required to be reported in the income statement under IFRS.
See the "Current and Proposed Transactions" section of this
document for additional information.
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Operating Highlights
Sales for the fourth quarter of
2014 ("Q4 2014") were $1,003.0
million, up $76.9 million from
$926.1 million in Q4 2013.
Sales for the Powertrain/Driveline segment
("Powertrain/Driveline") increased by $67.4
million, or 8.3% in Q4 2014 compared with Q4 2013. The
sales increase in Q4 2014 was impacted by:
- higher sales resulting from favourable changes in foreign
exchange rates;
- the significant levels of newly launched programs in
North America;
- the acquisition of our new forging business in North Carolina acquired in Q4 2014;
- the ramp up of launching programs in Europe;
- the ramp up of launching programs and volume increases on
mature programs in Asia; and
- increased volumes from the Company's commercial vehicle and
power generation business in Europe.
The Industrial segment ("Industrial") product sales increased
8.4% or $9.5 million to $123.1 million in Q4 2014 from Q4 2013. The
sales increase was due to:
- higher sales resulting from favourable changes in foreign
exchange rates;
- increased North American, Asian and European sales from higher
market demand for access equipment;
- market share growth for booms in Europe; and
- market share growth for scissor lifts in Asia; partially offset by
- lower demand for agricultural equipment in Europe.
The company's adjusted earnings for Q4 2014 were $101.1 million. This compares to
$69.7 million in Q4 2013, an increase
of $31.4 million.
Q4 2014 adjusted operating earnings for Powertrain/Driveline
were higher by $22.6 million or 35.0%
over Q4 2013. The Powertrain/Driveline segment experienced
the following in Q4 2014:
- improved margins as production volumes increased on launching
and mature programs;
- higher margins as a result of a favourable sales mix to highly
capital intensive programs, which inherently have higher margins to
meet return expectations; and
- better margins as a result of productivity and efficiency
improvements; partially offset by
- increased management and sales costs supporting growth.
The changes in foreign exchange rates increased both sales and
costs, which when combined, had an immaterial impact to operating
earnings.
Industrial segment operating earnings in Q4 2014 increased
$8.8 million or 169.2% over Q4 2013.
The increase in Industrial operating earnings was predominantly
driven by:
- higher margins resulting from favourable changes in foreign
exchange rates;
- increased demand and market share growth in the access
equipment markets; and
- favourable product mix to higher margin products; partially
offset by
- increased management and sales costs supporting growth.
"We are thrilled to register a fantastic fourth quarter to close
out another record year in sales and earnings for Linamar," said
Linamar CEO Linda Hasenfratz.
"Financially we saw double digit sales and earnings growth, driven
by market share growth in both our vehicle and access markets,
taking margins to record levels, all of which drove great cash
generation to allow us to significantly reduce debt levels.
Strategically, we executed on a global forging expansion poised to
add significantly to our growth and at the same time saw tremendous
levels of new business wins in our core business. We have an
outstanding team at Linamar which is performing at optimum levels,
with an excellent outlook for continued growth over the next
several years."
Dividends
The Board of Directors today declared an
eligible dividend in respect to the quarter ended December 31, 2014 of CDN$0.10 per share on the common shares of the
company, payable on or after April 16,
2015 to shareholders of record on April 2, 2015.
Risk and Uncertainties (forward looking statements)
Linamar no longer provides a financial outlook.
Certain information provided by Linamar in these unaudited
interim financial statements, MD&A and other documents
published throughout the year that are not recitation of historical
facts may constitute forward-looking statements. The words
"estimate", "believe", "expect" and similar expressions are
intended to identify forward-looking statements. Persons reading
this report are cautioned that such statements are only predictions
and the actual events or results may differ materially. In
evaluating such forward-looking statements, readers should
specifically consider the various factors that could cause actual
events or results to differ materially from those indicated by such
forward-looking statements.
Such forward-looking information may involve important risks and
uncertainties that could materially alter results in the future
from those expressed or implied in any forward-looking statements
made by, or on behalf of, Linamar. Some risks and
uncertainties may cause results to differ from current
expectations. The factors which are expected to have the greatest
impact on Linamar include but are not limited to (in the various
economies in which Linamar operates): the extent of OEM
outsourcing, industry cyclicality, trade and labour disruptions,
pricing concessions and cost absorptions, delays in program
launches, the Company's dependence on certain engine and
transmission programs and major OEM customers, currency exposure,
and technological developments by Linamar's competitors.
A large proportion of the Company's cash flows are denominated
in foreign currencies. The movement of foreign currency exchange
rates against the Canadian dollar has the potential to have a
negative impact on financial results. The Company has employed a
hedging strategy as appropriate to attempt to mitigate the impact
but cannot be completely assured that the entire exchange effect
has been offset.
Other factors and risks and uncertainties that could cause
results to differ from current expectations are discussed in the
MD&A and include, but are not limited to: fluctuations in
interest rates, environmental emission and safety regulations,
governmental, environmental and regulatory policies, and changes in
the competitive environment in which Linamar operates. Linamar
assumes no obligation to update the forward-looking statements, or
to update the reasons why actual results could differ from those
reflected in the forward-looking statements.
Conference Call Information
Q4 2014 Conference Call Information
Linamar will hold
a conference call on March 4th, 2015
at 5:00 p.m. EST to discuss its
fourth quarter/year end results. The numbers for this call
are (647) 427-3383 (local/overseas) or (888) 424-9894 (North America) confirmation number 12315094,
with a call-in required 10 minutes prior to the start of the
conference call. The conference call will be chaired by
Linda Hasenfratz, Linamar's Chief
Executive Officer. A copy of the company's quarterly/year end
financial statements, including the Management's Discussion &
Analysis will be available on the company's website after
4 p.m. EST on March 4th, 2015 and at www.sedar.com by the start
of business on March 5th, 2015.
A taped replay of the conference call will also be made available
starting at 7:45 p.m. on March 4th, 2015 for ten days. The number
for replay is (855) 859-2056, Conference ID 12315094. The
conference call can also be accessed by web cast at
www.linamar.com, by accessing the investor relations/events
menu.
Audio only streaming of the conference call available at
http://www.media-server.com/m/p/tfvcrbw3
Q1 2015 Conference Call Information
Linamar will hold
a conference call on May 6, 2015 at
5:00 p.m. EST to discuss its first
quarter results. The numbers for this call are (647) 427-3383
(local/overseas) or (888) 424-9894 (North
America) confirmation number 12319956, with a call-in
required 10 minutes prior to the start of the conference
call. The conference call will be chaired by Linda Hasenfratz, Linamar's Chief Executive
Officer. A copy of the company's quarterly financial
statements, including the Management's Discussion & Analysis
will be available on the company's website after 4 p.m. EST on May 6,
2015 and at www.sedar.com by the start of business on
May 7, 2015. A taped replay of
the conference call will also be made available starting at
7:45 p.m. on May 6, 2015 for ten days. The number for
replay is (855) 859-2056, Conference ID 12319956. The
conference call can also be accessed by web cast at
www.linamar.com, by accessing the investor relations/events
menu.
Audio only streaming of the conference call available at
http://www.media-server.com/m/p/g3vqizmu
Linamar Corporation (TSX:LNR) is a diversified global
manufacturing Company of highly engineered products powering
vehicles, motion, work and lives. The Company is made up of 2
operating segments – the Powertrain/Driveline segment and the
Industrial segment, which are further divided into 3 operating
groups – Machining & Assembly, Forging, and Skyjack, all world
leaders in the design, development and production of highly
engineered products. The Company's Machining and Assembly and
Forging operating groups focus on precision metallic components,
modules and systems for engine, transmission and driveline systems
designed for global vehicle and industrial markets. The
Company's Skyjack operating group is noted for its innovative, high
quality mobile industrial equipment, notably its class-leading
aerial work platforms and telehandlers. With more than 19,500
employees in 48 manufacturing locations, 5 R&D centers and 15
sales offices in 14 countries in North and South America, Europe and Asia, Linamar generated sales of $4.2 billion in 2014. For more information about
Linamar Corporation and its industry leading products and services,
visit www.linamar.com.
(signed)
|
(signed)
|
Frank
Hasenfratz
|
Linda
Hasenfratz
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Chairman of the
Board
|
Chief Executive
Officer
|
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Guelph,
Ontario
|
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March 4,
2015
|
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SOURCE Linamar Corporation