GUELPH, ON, Nov. 6, 2019 /CNW/ - (TSX: LNR)
- Transportation segment sales up slightly at $1.4 billion but normalized Operating Earnings up
15.1%;
- Free cash flow1,2 of $90
million;
- Strong content per vehicle growth in Europe and Asia as the Company outperforms the
market;
- Continued growth in boom market share in core North American
and European markets;
- Sales decreased 5.3% over the third quarter of 2018 ("Q3 2018")
to $1.7 billion;
- Normalized EBITDA strong at $243.1
million and 14% of sales;
- Continued business wins further strengthens launch book to more
than $4.4 billion;
- Takeover business at $200 million
year to date; and
- Industrial segment sales down 21.5% due to lower agricultural
sales and reduced access equipment volumes in Europe and North
America resulting in Operating Earnings declines.
|
Three Months
Ended
|
Nine Months
Ended
|
September
30
|
September
30
|
(in millions of
dollars, except earnings per share figures)
|
2019
|
2018
|
2019
|
2018
|
$
|
$
|
$
|
$
|
Sales
|
1,740.0
|
1,837.3
|
5,800.6
|
5,888.6
|
Operating Earnings
(Loss)
|
|
|
|
|
Industrial
|
36.9
|
74.8
|
209.7
|
283.1
|
Transportation
|
105.4
|
86.6
|
335.5
|
365.6
|
Operating Earnings
(Loss)3
|
142.3
|
161.4
|
545.2
|
648.7
|
Net Earnings
(Loss)
|
98.2
|
113.2
|
380.7
|
467.0
|
Net Earnings (Loss)
per Share – Diluted
|
1.50
|
1.71
|
5.80
|
7.05
|
Earnings before
interest, taxes and amortization
("EBITDA")3
|
245.7
|
253.7
|
848.9
|
928.0
|
Operating Earnings
(Loss) – Normalized3
|
|
|
|
|
Industrial
|
39.2
|
84.7
|
224.6
|
278.1
|
Transportation
|
100.0
|
86.9
|
337.6
|
370.5
|
Operating Earnings
(Loss) – Normalized
|
139.2
|
171.6
|
562.2
|
648.6
|
Net Earnings
(Loss) – Normalized3
|
96.2
|
121.1
|
393.9
|
468.0
|
Net Earnings
(Loss) per Share – Diluted –
Normalized3
|
1.47
|
1.83
|
6.00
|
7.07
|
EBITDA –
Normalized3
|
243.1
|
263.8
|
866.1
|
929.3
|
Operating Highlights
Sales for the third quarter of 2019 ("Q3 2019") were
$1,740.0 million, down $97.3 million from $1,837.3 million in Q3 2018.
The Industrial segment ("Industrial") product sales decreased
21.5%, or $104.2 million, to
$380.6 million in Q3 2019 from Q3
2018. The sales decrease was due to:
- lower agricultural sales due to poor crop conditions, stagnant
commodity prices and the ongoing trade dispute between the US and
China governments; and
- reduced access equipment volumes in Europe and North
America as certain key customers adjust their 2019 capital
spend in light of uncertainty in the markets.
Sales for the Transportation segment ("Transportation")
increased by $6.9 million, or 0.5% in
Q3 2019 compared with Q3 2018. The sales in Q3 2019 were
impacted by:
- additional sales from programs that are currently launching;
partially offset by
- a reduction of sales related to certain programs that are
naturally ending;
- a reduction in sales as a result of the United Auto Workers
Union strike at General Motor's US locations that began in
September 2019; and
- an unfavourable impact on sales from the changes in foreign
exchange rates from Q3 2018.
1 Free cash flow is defined as cash from operating
activities less payments for purchase of property, plant and
equipment plus proceeds on disposal of property, plant and
equipment less dividends. All figures used in the calculation
are presented in the Company's separately released Consolidated
Interim Statements of Cash Flows.
2 Free cash flow has been adjusted for additions of property, plant
and equipment related to the dissolution of a joint venture.
3 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").
The Company's normalized operating earnings for Q3 2019 were
$139.2 million. This compares
to $171.6 million in Q3 2018, a
decrease of $32.4 million.
Industrial segment normalized operating earnings in Q3 2019
decreased $45.5 million, or 53.7%
from Q3 2018. The Industrial normalized operating earnings results
were predominantly driven by:
- decreased earnings from lower agricultural sales due to poor
crop conditions, stagnant commodity prices and the ongoing trade
dispute between the US and China
governments; and
- reduced access equipment volumes in Europe and North
America as certain key customers adjust their 2019 capital
spend in light of uncertainty in the markets.
Q3 2019 normalized operating earnings for Transportation were
higher by $13.1 million, or 15.1%
compared to Q3 2018. The Transportation segment's earnings were
impacted by the following:
- the impact of additional sales from launching programs;
- decreased management costs; and
- a more favourable impact from the changes in foreign exchange
rates from Q3 2018 on expenses which offsets the sales impact at an
operating earnings level; partially offset by
- a reduction of earnings related to certain programs that are
naturally ending;
- a reduction in sales as a result of the United Auto Workers
Union strike at General Motor's US locations that began in
September 2019; and
- additional amortization from launching programs.
"We are very pleased to report growth in our Transportation
segment earnings despite the impact of the General Motors strike
and challenging markets," said Linamar CEO Linda Hasenfratz. "We continue to focus on
market share growth in all of our businesses to offset weak markets
as well as cost control and cash generation and are delivering on
every front."
Dividends
The Board of Directors today declared an eligible dividend in
respect to the quarter ended September 30,
2019 of CDN$0.12 per share on
the common shares of the company, payable on or after December 6, 2019 to shareholders of record on
November 22, 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
Q3 2019 Conference Call Information
Linamar will hold
a webcast call on November 6, 2019 at
5:00 p.m. EST to discuss its third
quarter results. The numbers for this call are (647) 427-3383
(local/overseas) or (888) 424-9894 (North
America) conference ID 2873879, 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=m09cf9bc3705dfbbb0846d6f299d0a76d.
The password for the meeting is 2019Q3. 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
November 6, 2019 and at www.sedar.com
by the start of business on November
7, 2019. A taped replay of the conference call will
also be made available starting at 8:00
p.m. on November 6, 2019 for
ten days. The number for replay is (855) 859-2056, Conference ID
2873879. In addition a recording of the call will be posted on the
company's website under Investor Relations.
Q4 2019 Release Information
Linamar will release its
Q4 2019 results on March 11,
2020.
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 27,000
employees in 61 manufacturing locations, 10 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.
SOURCE Linamar Corporation