(TSX: LNR)
GUELPH, ON, May 2, 2019 /CNW/ -
- Sales increased 4.3% over the first quarter of 2018 ("Q1
2018") to reach $2.0 billion;
- Normalized EBITDA flat to last year at $297 million;
- Free cash flow continues to bring net debt levels
down1;
- Continued business wins maintains strong launch book at over
$4.3 billion;
- Industrial segment sales up 17.0% and normalized operating
earnings up 24.2%;
- Transportation segment sales up on strong launch activity
despite key customer production cuts in Europe and Asia;
- Strong content per vehicle growth in North America and Europe; and
- NCWC as a % of sales down from Q4, poised to start generating
cash flow this year.
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Three Months
Ended
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|
March 31
|
(in millions of
dollars, except earnings per share figures)
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|
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2019
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2018
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$
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$
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Sales
|
|
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1,974.5
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1,893.9
|
Operating Earnings
(Loss)
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|
|
|
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Industrial
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73.1
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74.7
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Transportation
|
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114.6
|
140.2
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Operating Earnings
(Loss)2
|
|
|
187.7
|
214.9
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Net Earnings
(Loss)
|
|
|
132.3
|
156.6
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Net Earnings (Loss)
per Share – Diluted
|
|
|
2.00
|
2.37
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Earnings before
interest, taxes and amortization
("EBITDA") 2
|
|
|
287.7
|
306.1
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Operating Earnings
(Loss) – Normalized2
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|
|
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Industrial
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77.9
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62.7
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Transportation
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119.8
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146.8
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Operating Earnings
(Loss) – Normalized2
|
|
|
197.7
|
209.5
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Net Earnings
(Loss) – Normalized2
|
|
|
139.4
|
153.4
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Net Earnings
(Loss) per Share – Diluted –
Normalized2
|
|
|
2.11
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2.32
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EBITDA –
Normalized2
|
|
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296.8
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301.9
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Operating Highlights
Sales for the first quarter of 2019 ("Q1 2019") were
$1,974.5 million, up $80.6 million from $1,893.9 million in Q1 2018.
The Industrial segment ("Industrial") product sales increased
17.0%, or $67.6 million, to
$465.1 million in Q1 2019 from Q1
2018. The sales increase was due to:
- increased sales related to the acquisition of MacDon;
- a favourable impact on sales from the changes in foreign
exchange rates from Q1 2018; and
- increased volumes for scissors in Europe and Asia; partially offset by
- lower aerial platform sales in North
America due to certain customers deferring purchases to
later in the year.
Sales for the Transportation segment ("Transportation")
increased by $13.0 million, or 0.9%
in Q1 2019 compared with Q1 2018. The sales in Q1 2019 were
impacted by:
- additional sales from programs that are currently
launching;
- a favourable impact on sales from the changes in foreign
exchange rates from Q1 2018; partially offset by
- market declines in Europe
related to the Worldwide Harmonized Light Vehicles Test Procedure
("WLTP") issues in addition to the impact of consumer sentiment for
diesel engines which is impacting volumes with key customers;
and
- lower volumes related to market declines in Asia.
The Company's operating earnings for Q1 2019 were $187.7 million. This compares to
$214.9 million in Q1 2018, a decrease
of $27.2 million.
Industrial segment operating earnings in Q1 2019 decreased
$1.6 million, or 2.1% from Q1
2018. The Industrial operating earnings results were
predominantly driven by:
- an unfavourable foreign exchange impact from the revaluation of
the operating balances on the balance sheet from Q4 2018;
- increased material costs as a result of rising commodity
prices; and
- lower aerial platform sales in North
America due to certain customers deferring purchases to
later in the year; partially offset by
- increased earnings from the inclusion of full quarter results
related to the acquisition of MacDon;
- a favourable impact on sales and expenses from the changes in
foreign exchange rates from Q1 2018; and
- increased volumes for scissors in Europe and Asia.
Q1 2019 operating earnings for Transportation were lower by
$25.6 million, or 18.3% compared
to Q1 2018. The Transportation segment's earnings were
impacted by the following:
- lower volumes on programs with mature margins related to market
declines in Europe and
Asia;
- the margin impact from the transition of mature platforms
ramping down and being replaced by launching programs that have not
yet reached mature margins;
- additional costs related to heavy launch activity globally;
and
- restructuring costs incurred in Q1 2019; partially offset
by
- the impact of additional sales from launching programs;
- a favourable foreign exchange impact from the revaluation of
the operating balances on the balance sheet from Q4 2018; and
- a favourable impact on sales and expenses from the changes in
foreign exchange rates from Q1 2018.
"We are happy with our first quarter results in a tough market
environment," said Linamar CEO Linda
Hasenfratz. "Sales and market share are up despite
market slowdowns in a few areas and EBITDA consistent to last year,
not an easy accomplishment. We are laser focused on
continuing to grow top and bottom line this year and expect to see
significant free cash flow as evidenced already by our first
quarter results."
Dividends
The Board of Directors today declared an eligible dividend in
respect to the quarter ended March 31,
2019 of CDN$0.12 per share on
the common shares of the company, payable on or after June 7, 2019 to shareholders of record on
May 28, 2019.
Forward Looking Information, Risk and Uncertainties
Certain information provided by Linamar in this press release,
MD&A, the consolidated financial statements and other documents
published throughout the year which are not recitation of
historical facts may constitute forward-looking statements. The
words "may", "would", "could", "will", "likely", "estimate",
"believe", "expect", "plan", "forecast" and similar expressions are
intended to identify forward-looking statements. Readers 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 of the factors and
risks and uncertainties that cause results to differ from current
expectations include, but are not limited to, changes in the
competitive environment in which Linamar operates, OEM outsourcing
and insourcing; sources and availability of raw materials; labour
markets and dependence on key personnel; dependence on certain
customers and product programs; technological change in the sectors
in which the Company operates and by Linamar's competitors; delays
in or operational issues with product launches; foreign currency
risk; long-term contracts that are not guaranteed; acquisition and
expansion risk; foreign business risk; cyclicality and seasonality;
weather; capital and liquidity risk; legal proceedings and
insurance coverage; credit risk; emission standards; tax laws;
securities laws compliance and corporate governance standards;
fluctuations in interest rates; environmental emissions and safety
regulations; trade and labour disruptions; world political events;
pricing concessions to customers; and governmental, environmental
and regulatory policies.
The foregoing is not an exhaustive list of the factors that may
affect Linamar's forward-looking statements. These and other
factors should be considered carefully and readers should not place
undue reliance on Linamar's forward-looking statements.
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
Q1 2019 Conference Call Information
Linamar will hold
a webcast call on May 2, 2019 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) conference ID
5899778, with a call-in required 10 minutes prior to the start of
the conference call.
The URL for the webcast is
https://linamar2020.webex.com/linamar2020/j.php?MTID=m62ef8f5182ae716aa60ea993a1371526.
The password for the meeting is 2019Q1. 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 2, 2019 and at www.sedar.com by
the start of business on May 3,
2019. A taped replay of the conference call will also be made
available starting at 8:00 p.m. on
May 2, 2019 for ten days. The
number for replay is (855) 859-2056, Conference ID 5899778.
In addition a recording of the call will be posted on the company's
website under Investor Relations.
Q2 2019 Conference Call Information
Linamar will hold
a webcast call on August 8, 2019 at
5:00 p.m. EST to discuss its second
quarter results. The numbers for this call are (647) 427-3383
(local/overseas) or (888) 424-9894 (North
America) conference ID 9388922, with a call-in required 10
minutes prior to the start of the conference call.
The URL for the webcast is
https://linamar2020.webex.com/linamar2020/j.php?MTID=macbd5a9aca0784ee88a658819c7eed89.
The password for the meeting is 2019Q2. 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
August 8, 2019 and at www.sedar.com
by the start of business on August 9,
2019. A taped replay of the conference call will also be made
available starting at 8:00 p.m. on
August 8, 2019 for ten days.
The number for replay is (855) 859-2056, Conference ID
9388922. In addition a recording of the call will be posted
on the company's website under Investor Relations.
Linamar Corporation (TSX:LNR) is an advanced manufacturing
company where the intersection of leading edge technology and deep
manufacturing expertise is creating solutions that power vehicles,
motion, work and lives for the future. The Company is made up of 2
operating segments – the Industrial segment and the Transportation
segment, which are further divided into 5 operating groups –
Skyjack, Agriculture, Machining & Assembly, Light Metal Casting
and Forging, all world leaders in the design, development and
production of highly engineered products. The Company's Skyjack and
MacDon companies are noted for their innovative, high quality
mobile industrial and harvesting equipment, notably class-leading
aerial work platforms, telehandlers, draper headers and
self-propelled windrowers. The Company's Machining & Assembly,
Light Metal Casting and Forging operating groups focus on precision
metallic components, modules and systems for powertrain, driveline
and body systems designed for global electrified and traditionally
powered vehicle and industrial markets. Linamar has more than
29,000 employees in 60 manufacturing locations, 8 R&D centres
and 25 sales offices in 17 countries in North and South America, Europe and Asia which generated sales of $7.6 billion in 2018. For more information about
Linamar Corporation and its industry leading products and services,
visit www.linamar.com or follow us on Twitter at
@LinamarCorp.
___________________________
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1
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Net debt excluding
the impacts to debt as a result of the adoption of IFRS
16.
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2
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Management uses
certain non-GAAP financial measures including normalized earnings
which exclude foreign exchange impacts and the impact of unusual
items when analyzing consolidated and segment underlying
operational performance. For more information refer to the section
entitled "Non-GAAP and Additional GAAP Measures" in the Company's
separately released Management's Discussion and Analysis
("MD&A").
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SOURCE Linamar Corporation