(TSX: LNR)
GUELPH, ON, March 11, 2020 /CNW/ -
- 2019 free cash flow1,2 more than $670 million and more than $380 million in the fourth quarter of 2019 ("Q4
2019");
- Net debt to EBITDA reaches 1.5x;
- Continued Q4 2019 Transportation market share growth from
strong content per vehicle performance in Europe and Asia, and market share growth in key markets
and products within the Industrial businesses as well;
- Sales decreased 6.7% over the fourth quarter of 2018 ("Q4
2018") to $1.6 billion but on average
outperformed soft markets;
-
- Transportation segment sales down 7% in a significant part due
to the United Auto Workers Union strike at General Motor's US
locations; and
- Industrial segment sales down 5% due to significantly reduced
access equipment volumes in Europe
and North America.
- Normalized EBITDA strong at $222.4
million and 14% of sales;
- Outstanding level of business wins take launch book to more
than $4.2 billion; and
- In accordance with the Board's approval, the Company intends to
seek TSX approval to renew its NCIB program for an additional year
with the intention of making purchases under the program to
strategically support the Company's share price.
|
Three Months
Ended
|
Twelve Months
Ended
|
December
31
|
December
31
|
(in millions of
dollars, except per share figures)
|
2019
|
2018
|
2019
|
2018
|
$
|
$
|
$
|
$
|
Sales
|
1,616.1
|
1,732.0
|
7,416.6
|
7,620.6
|
Operating Earnings
(Loss)
|
|
|
|
|
Industrial
|
26.6
|
63.1
|
236.3
|
346.2
|
Transportation
|
52.7
|
108.0
|
388.2
|
473.7
|
Operating Earnings
(Loss)3
|
79.3
|
171.1
|
624.5
|
819.9
|
Net Earnings
(Loss)
|
49.7
|
124.5
|
430.4
|
591.5
|
Net Earnings (Loss)
per Share – Diluted
|
0.76
|
1.88
|
6.56
|
8.94
|
Earnings before
interest, taxes and amortization
("EBITDA")3
|
189.1
|
258.9
|
1,038.0
|
1,186.9
|
Operating Earnings
(Loss) – Normalized3
|
|
|
|
|
Industrial
|
39.4
|
45.4
|
257.8
|
323.5
|
Transportation
|
73.2
|
113.5
|
410.8
|
484.1
|
Operating Earnings
(Loss) – Normalized
|
112.6
|
158.9
|
668.6
|
807.6
|
Net Earnings
(Loss) – Normalized3
|
75.4
|
115.4
|
464.4
|
583.8
|
Net Earnings
(Loss) per Share – Diluted –
Normalized3
|
1.15
|
1.75
|
7.08
|
8.82
|
EBITDA –
Normalized3
|
222.4
|
247.6
|
1,082.3
|
1,176.9
|
Operating Highlights
Sales for Q4 2019 were $1,616.1
million, down $115.9 million
from $1,732.0 million in Q4 2018.
The Industrial segment ("Industrial") product sales decreased
5.0%, or $17.5 million, to
$335.9 million in Q4 2019 from Q4
2018. The sales decrease was due to:
- reduced access equipment volumes in Europe and North
America as certain key customers adjusted their Q4 2019
capital spend in light of uncertainty in the markets; partially
offset by
- additional agricultural sales related to timing of the 2020 new
product launch and a later harvest providing additional parts sales
compared to Q4 2018.
Sales for the Transportation segment ("Transportation")
decreased by $98.4 million, or 7.1%
in Q4 2019 compared with Q4 2018. The sales in Q4 2019 were
impacted by:
- a reduction in sales as a result of the United Auto Workers
Union strike at General Motor's US locations that continued into Q4
2019;
- a reduction of sales related to certain programs that are
naturally ending;
- an overall reduction in passenger vehicle volumes in our three
key markets and in medium duty and heavy duty trucks in
North America; and
- an unfavourable impact on sales from the changes in foreign
exchange rates from Q4 2018; partially offset by
- additional sales from programs that are currently
launching.
|
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.
|
2 Free cash flow for 2019 has been
adjusted for additions of property, plant and equipment related to
the dissolution of a joint venture in Q3 2019.
|
|
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 Q4 2019 were
$112.6 million. This compares
to $158.9 million in Q4 2018, a
decrease of $46.3 million.
Industrial segment normalized operating earnings in Q4 2019
decreased $6.0 million, or 13.2% from
Q4 2018. The Industrial normalized operating earnings results were
predominantly driven by:
- reduced access equipment volumes in Europe and North
America as certain key customers adjusted their 2019 capital
spend in light of uncertainty in the markets;
- impact of absorption costs as a result of Skyjack and MacDon
reducing production and selling from inventory in Q4 2019;
partially offset by
- additional agricultural earnings related to timing of the 2020
new product launch and a later harvest when compared to Q4
2018.
Q4 2019 normalized operating earnings for Transportation were
lower by $40.3 million, or 35.5%
compared to Q4 2018. The Transportation segment's earnings were
impacted by the following:
- a reduction in sales as a result of the United Auto Workers
Union strike at General Motor's US locations that continued into Q4
2019; and
- a reduction of earnings related to volume declines.
"We are thrilled to have delivered on our cash generation target
for 2019 despite challenging markets," said Linamar CEO
Linda Hasenfratz. "Q4 was also
a significant quarter for us in new business wins, notably in the
driveline and electrified vehicle areas we have been targeting, and
on key boom, telehandler and draper header products which is key to
growth in soft markets. We are also seeing results from cost
cutting efforts to mitigate demand reductions. Win new
business to grow market share, cost control to offset soft markets
and cash generation are our key areas of focus and we are
delivering on every front."
Dividends
The Board of Directors today declared an eligible dividend in
respect to the quarter ended December 31,
2019 of CDN$0.12 per share on
the common shares of the company, payable on or after April 17, 2020 to shareholders of record on
April 3, 2020.
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;
legal proceedings and insurance coverage; credit risk; weather;
emission standards; capital and liquidity risk; 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
Q4 2019 Conference Call Information
Linamar will hold a webcast call on March
11, 2020 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) conference ID
7182436, with a call-in required 10 minutes prior to the start of
the conference call. The URL for the webcast is
https://www.linamar.com/news-event/q4-earnings-call. The password
for the meeting is Linamar1. 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 11, 2020 and at www.sedar.com by the start
of business on March 12, 2020. A
taped replay of the conference call will also be made available
starting at 8:00 p.m. on March 11, 2020 for ten days. The number for
replay is (855) 859-2056, Conference ID 7182436. In addition a
recording of the call will be posted on the company's website under
Investor Relations.
Q1 2020 Release Information
Linamar will hold a webcast call on May 13,
2020, at 5:00 p.m. EST to
discuss its first-quarter results. The numbers for this call are
(877) 668-0168 (North America) or
(825) 312-2386 (International) conference ID 8792067, with a
call-in required 10 minutes prior to the start of the webcast. The
URL for the webcast is
https://www.linamar.com/news-event/q1-2020-earnings-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
May 13, 2020, and at www.sedar.com by
the start of business on May 14,
2020. The webcast replay will be available at
https://www.linamar.com/news-event/q1-2020-earnings-call after the
call. A taped replay of the conference call will also be made
available starting at 8:00 p.m. on
May 13, 2020, for seven days. The
number for the replay is (800) 585-8367, Passcode: 8792067.
In addition, a recording of the call will be posted on
https://www.linamar.com/news-event/q1-2020-earnings-call.
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 driveline, body and
powertrain 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 $7.4 billion in 2019. 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