(TSX: LNR)
GUELPH, ON, Aug. 6, 2020 /CNW/ -
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- During the second quarter of 2020 ("Q2 2020"), the Company
experienced lower sales and operating earnings in both segments
which was primarily attributed to the adverse conditions associated
with the global COVID-19 pandemic;
- Free cash flow1 was
$170.5 million for Q2 2020 and when
combined with the $147.1 million for
Q1 2020 is $317.6 million for the
first half of 2020;
- Capex was cut by 81% to $24.0
million from $126.4 million in
the second quarter of 2019 ("Q2 2019");
- Liquidity, measured as cash and cash equivalents and available
credit at June 30, 2020, is at
$1.1 billion, unchanged from
December 31, 2019;
- Cost reduction and cash conservation efforts continue to be at
the highest levels given continued uncertainties;
- As part of these cash conservation efforts the board has
approved to continue with a reduced dividend of CAD$0.06 per share for Q2 2020;
- Strong new business wins pushed the launch book to more than
$4.3 billion;
- Solid Transportation market share gains with Content per
Vehicle growth in every region globally and market share growth in
Europe for both Skyjack and
MacDon; and
- The Company repaid its United States Dollar $130 million Private Placement Notes in Q2 2020
to mitigate risk in an uncertain environment.
|
Three Months
Ended
|
Six Months
Ended
|
June 30
|
June 30
|
(in millions of
dollars, except per share figures)
|
2020
|
2019
|
2020
|
2019
|
$
|
$
|
$
|
$
|
Sales
|
923.6
|
2,086.1
|
2,473.3
|
4,060.6
|
Operating Earnings
(Loss)
|
|
|
|
|
Industrial
|
24.5
|
99.6
|
67.4
|
172.8
|
Transportation
|
(49.8)
|
115.5
|
25.3
|
230.1
|
Operating Earnings
(Loss)1
|
(25.3)
|
215.1
|
92.7
|
402.9
|
Net Earnings
(Loss)
|
(37.9)
|
150.2
|
40.6
|
282.5
|
Net Earnings (Loss)
per Share – Diluted
|
(0.58)
|
2.28
|
0.62
|
4.28
|
Earnings before
interest, taxes and amortization ("EBITDA")1
|
81.1
|
315.5
|
309.0
|
603.1
|
Operating Earnings
(Loss) – Normalized1
|
|
|
|
|
Industrial
|
36.5
|
107.5
|
67.9
|
185.4
|
Transportation
|
(55.9)
|
117.8
|
16.2
|
237.6
|
Operating Earnings
(Loss) – Normalized
|
(19.4)
|
225.3
|
84.1
|
423.0
|
Net Earnings
(Loss) – Normalized1
|
(22.0)
|
158.3
|
45.0
|
297.7
|
Net Earnings
(Loss) per Share – Diluted –
Normalized1
|
(0.34)
|
2.40
|
0.69
|
4.51
|
EBITDA –
Normalized1
|
92.1
|
326.2
|
306.0
|
623.0
|
1 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").
|
Operating Highlights
Sales for Q2 2020 were $923.6
million, down $1,162.5 million
from $2,086.1 million in Q2 2019.
The Industrial segment ("Industrial") product sales decreased
56.7%, or $339.9 million, to
$259.2 million in Q2 2020 from Q2
2019. The sales decrease was due to:
- sales declines primarily attributed to adverse conditions
associated with the global COVID-19 pandemic; and
- lower agricultural sales as expected due to poor crop
conditions, stagnant commodity prices, and the ongoing trade
dispute between the United States
("US") and China governments.
Sales for the Transportation segment ("Transportation")
decreased by $822.6 million, or 55.3%
in Q2 2020 compared with Q2 2019. The sales in Q2 2020 were
impacted by:
- sales declines primarily attributed to customer shutdowns
associated with the global COVID-19 pandemic; partially offset
by
- a favourable impact on sales from the changes in foreign
exchange rates from Q2 2019.
The Company's normalized operating loss for Q2 2020 was
$19.4 million. This compares to
normalized operating earnings of $225.3
million in Q2 2019, a decrease of $244.7 million.
Industrial segment normalized operating earnings in Q2 2020
decreased $71.0 million, or 66.0%
from Q2 2019. The Industrial normalized operating earnings results
were predominantly driven by:
- the lower sales volumes which is primarily attributed to the
adverse conditions associated with the global COVID-19 pandemic;
and
- lower agricultural sales as expected due to poor crop
conditions, stagnant commodity prices, and the ongoing trade war
between the US and China
governments; partially offset by
- the utilization of various government support programs related
to the global COVID-19 pandemic.
Q2 2020 normalized operating earnings for Transportation were
lower by $173.7 million, or 147.5%
compared to Q2 2019. The Transportation segment's earnings were
impacted by the following:
- sales declines primarily attributed to customer shutdowns
associated with the global COVID-19 pandemic; partially offset
by
- targeted cost reductions to match lower demand;
- utilization of various government support programs related to
the global COVID-19 pandemic; and
- a favourable impact on sales and expenses from the changes in
foreign exchange rates from Q2 2019.
"Q2 2020 was certainly a difficult quarter for us and so many
other companies around the world. I am so proud of the efforts of
our team to manage through such a tough quarter, maintain employee
spirits, execute so strongly on cost reductions and cash
conservation initiatives and then so capably ramp operations back
up safely and efficiently. We are through the toughest part and now
laser focused on restarting, rejuvenating and recovering." said
Linamar CEO Linda Hasenfratz.
Dividends
The Board of Directors today declared an eligible dividend in
respect to the quarter ended June 30,
2020 of CDN$0.06 per share on
the common shares of the company, payable on or after September 11, 2020 to shareholders of record on
August 21, 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; public health threats;
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
Q2 2020 Release Information
Linamar will hold a
webcast call on August 6, 2020, at
5:00 p.m. ET to discuss its
second-quarter results. The event will be simulcast and can be
accessed at the following URL
https://www.linamar.com/news-event/q2-2020-earnings-call and
can also be navigated to on the company's website. For those
who wish to listen to an audio only call-in option, the numbers for
this call are (877) 668-0168 (North
America) or (825) 312-2386 (International) Conference ID
4440626, with a call-in required 15 minutes prior to the start of
the webcast. 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 4:00 p.m. ET on August 6,
2020, and at www.sedar.com by the start of business on
August 7, 2020. The webcast replay
will be available at
https://www.linamar.com/news-event/q2-2020-earnings-call after the
call. A taped replay of the conference call will also be made
available starting at 8:00 p.m. on
August 6, 2020, for seven days. The
number for the replay is (800) 585-8367, Passcode: 4440626. In
addition, a recording of the call will be posted at
https://www.linamar.com/news-event/q2-2020-earnings-call.
Q3 2020 Release Information
Linamar will hold a
webcast call on November 10, 2020, at
5:00 p.m. ET to discuss its
third-quarter results. The event will be simulcast and can be
accessed at the following URL
https://www.linamar.com/news-event/q3-2020-earnings-call and can
also be navigated to on the company's website. For those who wish
to listen to an audio only call-in option, the numbers for this
call are (877) 668-0168 (North
America) or (825) 312-2386 (International) Conference ID
6475831, with a call-in required 15 minutes prior to the start of
the webcast. 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 4:00 p.m. ET on November
10, 2020, and at www.sedar.com by the start of business on
November 11, 2020. The webcast replay
will be available at
https://www.linamar.com/news-event/q3-2020-earnings-call after the
call. A taped replay of the conference call will also be made
available starting at 8:00 p.m. ET on
November 10, 2020, for seven days.
The number for the replay is (800) 585-8367, Passcode:
6475831. In addition, a recording of the call will be posted
at https://www.linamar.com/news-event/q3-2020-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
two operating segments – the Industrial segment and the
Transportation segment, both global leaders in manufacturing
solutions and world-class developers of highly engineered products.
The Industrial segment is comprised of Skyjack and MacDon. Skyjack
manufactures scissor, boom and telehandler lifts for the aerial
work platform industry. MacDon manufactures combine draper headers
and self-propelled windrowers for the agricultural harvesting
industry. The Transportation segment is subdivided into three
regional groups; North America,
Europe and Asia Pacific. Within the Transportation
segment, the regional groups are vertically integrated operations
combining expertise in light metal casting, forging, machining and
assembly for both the global electrified and traditionally powered
vehicle markets. The Transportation segment products are focused on
both components and systems for new energy powertrains, body and
chassis, driveline, engine and transmission systems of these
vehicles. McLaren Engineering provides design, development, and
testing services for the Transportation segment. Linamar has 26,000
employees in 61 manufacturing locations, 11 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