(TSX: LNR)
GUELPH, ON, Nov. 10, 2020 /CNW/ -
- During the third quarter of 2020 ("Q3 2020"), the Company
experienced strong sales and operating earnings in both
segments;
- Free cash flow1 was $445.1 million for Q3 2020 and when combined with
previous quarters is now $762.7
million for 2020;
- Strong continued free cash flow spurs restoration of dividend
to full CAD $0.12 per share;
- Capex has been cut by 53% to $73.9
million from $158.5 million in
the third quarter of 2019 ("Q3 2019");
- Liquidity, measured as cash and cash equivalents and available
credit at September 30, 2020, is at
$1.3 billion an increase from
$1.1 billion at
December 31, 2019;
- Today, the Board of Directors has authorized the entering into
of a note purchase agreement with certain institutional investors
for a private placement of €320 million aggregate principal amount
of its 1.37% Senior Unsecured Notes, due January 31, 2031 (see below);
- Cost reduction and cash conservation efforts continue to be at
the highest levels given continued uncertainties;
- New business wins maintain strong launch book of more than
$4.1 billion;
- Strong Transportation market share gains with Content per
Vehicle growth in North America
and Asia Pacific partially
offsetting adverse conditions associated with the global COVID-19
pandemic; and
- Increased agricultural earnings offsetting access equipment
declines attributable to adverse conditions associated with the
pandemic.
|
Three Months
Ended
|
Nine Months
Ended
|
September
30
|
September
30
|
(in millions of
dollars, except per share figures)
|
2020
|
2019
|
2020
|
2019
|
$
|
$
|
$
|
$
|
Sales
|
1,637.4
|
1,740.0
|
4,110.7
|
5,800.6
|
Operating Earnings
(Loss)
|
|
|
|
|
Industrial
|
41.2
|
36.9
|
108.6
|
209.7
|
Transportation
|
134.9
|
105.4
|
160.2
|
335.5
|
Operating Earnings
(Loss)1
|
176.1
|
142.3
|
268.8
|
545.2
|
Net Earnings
(Loss)
|
125.5
|
98.2
|
166.1
|
380.7
|
Net Earnings (Loss)
per Share – Diluted
|
1.92
|
1.50
|
2.54
|
5.80
|
Earnings before
interest, taxes and amortization ("EBITDA")1
|
300.6
|
245.7
|
609.6
|
848.9
|
Operating Earnings
(Loss) – Normalized1
|
|
|
|
|
Industrial
|
48.7
|
39.2
|
116.6
|
224.6
|
Transportation
|
148.7
|
100.0
|
165.0
|
337.6
|
Operating Earnings
(Loss) – Normalized
|
197.4
|
139.2
|
281.6
|
562.2
|
Net Earnings
(Loss) – Normalized1
|
140.5
|
96.2
|
185.6
|
393.9
|
Net Earnings
(Loss) per Share – Diluted –
Normalized1
|
2.15
|
1.47
|
2.84
|
6.00
|
EBITDA –
Normalized1
|
309.3
|
243.1
|
615.4
|
866.1
|
Operating Highlights
Sales for Q3 2020 were $1,637.4
million, down $102.6 million
from $1,740.0 million in Q3 2019.
The Industrial segment ("Industrial") product sales decreased
21.6%, or $82.2 million, to
$298.4 million in Q3 2020 from Q3
2019. The sales decrease was due to:
- access equipment sales declines attributed to adverse
conditions associated with the global COVID-19 pandemic; partially
offset by
- increased agricultural revenues from stronger in-season
equipment and parts sales.
Sales for the Transportation segment ("Transportation")
decreased by $20.4 million, or 1.5%
in Q3 2020 compared with Q3 2019. The sales in Q3 2020 were
impacted by:
- sales declines primarily attributed to adverse conditions
associated with the global COVID-19 pandemic; partially offset
by
- a favourable impact on sales from the changes in foreign
exchange rates from Q3 2019.
The Company's normalized operating earnings for Q3 2020 was
$197.4 million. This compares to
normalized operating earnings of $139.2
million in Q3 2019, an increase of $58.2 million.
Industrial segment normalized operating earnings in Q3 2020
increased $9.5 million, or 24.2% from
Q3 2019. The Industrial normalized operating earnings results were
predominantly driven by:
- the utilization of support programs related to the global
COVID-19 pandemic; and
- increased agricultural sales from stronger in-season equipment
and parts sales; partially offset by
- access equipment sales declines attributed to adverse
conditions associated with the global COVID-19 pandemic.
_____________________________________
|
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").
|
Q3 2020 normalized operating earnings for Transportation were
higher by $48.7 million, or 48.7%
compared to Q3 2019. The Transportation segment's earnings were
impacted by the following:
- the utilization of support programs related to the global
COVID-19 pandemic;
- the margin improvement from launching programs that continue to
build in volume;
- targeted cost reductions to match lower demand; and
- a favourable impact on sales and expenses from the changes in
foreign exchange rates from Q3 2019; partially offset by
- sales declines primarily attributed to adverse conditions
associated with the global COVID-19 pandemic.
"It feels great to be profitable again, with earnings actually
up from last year, and to see such an outstanding quarter for free
cash flow despite the challenges we are facing." said Linamar CEO
Linda Hasenfratz, "We continue to be
vigilant around costs and cash, risk mitigation and driving market
share growth as our recovery continues."
Private Placement of Senior Unsecured Notes
Today, the Board of Directors has authorized the entering into
of a note purchase agreement with certain institutional investors
for a private placement of €320 million aggregate principal amount
of its 1.37% Senior Unsecured Notes, due January 31, 2031. Linamar will apply the proceeds
of the sale of the Notes toward repayment of a term loan maturing
on January 21, 2021 under its bank
credit facilities. The remaining balance of that term loan
will be repaid with a drawdown on the Company's revolving credit
facility. The execution of the note purchase agreement is expected
to occur within a week and the funding is expected to occur in
January 2021. Closing and funding of
the issuance of the Notes is subject to customary closing
conditions including there being no material adverse change in the
Company's business.
Dividends
The Board of Directors today declared an eligible dividend in
respect to the quarter ended September 30,
2020 of CDN$0.12 per share on
the common shares of the company, payable on or after December 4, 2020 to shareholders of record on
November 20, 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
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.
Q4 2020 Release Information
Linamar will hold a webcast call on March
10, 2021, at 5:00 p.m. ET to
discuss its fourth-quarter results. The event will be simulcast and
can be accessed at the following URL
https://www.linamar.com/news-event/q4-2021-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
8860535, 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 March 10,
2021, and at www.sedar.com by the start of business on
March 11, 2021. The webcast replay
will be available at
https://www.linamar.com/news-event/q4-2021-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
March 10, 2021, for seven days. The
number for the replay is (800) 585-8367, Passcode: 8860535.
In addition, a recording of the call will be posted at
https://www.linamar.com/news-event/q4-2021-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, 12 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