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Linamar Corporation

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Another Quarter of Double Digit Growth Drives Linamar Toward Another Record Year
Another Quarter of Double Digit Growth Drives Linamar Toward Another Record Year

Canada NewsWire

(TSX: LNR)

GUELPH, ON, Nov. 7, 2018 /CNW/ -

  • Sales increased 18.6% over the third quarter of  2017 ("Q3 2017") to reach $1.8 billion;
  • Operating Earnings increased 13.7% over Q3 2017 to reach $161.4 million;
  • Net Earnings up 5.5% and earnings per share, on a diluted basis, up 5.6% over Q3 2017 reaching $113.2 million and $1.71 respectively;
  • Free cash flow continues to bring net debt levels down;
  • Business wins tracking significantly over prior year period, strengthening launch book to over $4.5 billion;
  • Strong content per vehicle growth in North America and Europe;
  • Industrial segment sales up 86.2% and operating earnings up 121.3% thanks to the acquisition of MacDon, market share gains and strong volumes for access equipment at Skyjack;
  • Industrial segment represents nearly 50% of overall earnings thanks to continued strong performance; and
  • Transportation segment sales up 4.9% thanks to increased volumes and launches despite key customer production cuts.


Three Months Ended

Nine Months Ended

September 30

September 30

(in millions of dollars, except earnings per share figures)

2018

2017

2018

2017

$

$

$

$

Sales

1,837.3

1,549.7

5,888.6

4,971.9

Operating Earnings (Loss)





Transportation

86.6

108.1

365.6

416.0

Industrial

74.8

33.8

283.1

133.6

Operating Earnings (Loss)1

161.4

141.9

648.7

549.6

Net Earnings (Loss)

113.2

107.3

467.0

414.3

Net Earnings (Loss) per Share – Diluted

1.71

1.62

7.05

6.27

Earnings before interest, taxes and amortization ("EBITDA")1

253.7

221.9

928.0

798.6

Operating Earnings (Loss) – Adjusted1

161.4

141.9

653.0

549.6

Net Earnings (Loss) – Adjusted1

113.2

107.3

470.2

414.3

Net Earnings (Loss) per Share – Diluted – Adjusted1

1.71

1.62

7.09

6.27

EBITDA – Adjusted1

253.7

221.9

932.3

798.6

 

Operating Highlights

Sales for the third quarter of 2018 ("Q3 2018") were $1,837.3 million, up $287.6 million from $1,549.7 million in Q3 2017.

Sales for the Transportation segment ("Transportation") increased by $63.1 million, or 4.9% in Q3 2018 compared with Q3 2017.  The sales in Q3 2018 were impacted by:

  • increased volumes from our light vehicle automotive customers in North America and Asia;
  • a favourable  impact on sales from the changes in foreign exchange rates from Q3 2017; and
  • additional sales from launching programs in North America; partially offset by
  • sales declines on mature programs primarily in Europe largely due to the new Worldwide Harmonized Light Vehicles Test Procedure ("WLTP").

The Industrial segment ("Industrial") product sales increased 86.2%, or $224.5 million, to $484.8 million in Q3 2018 from Q3 2017.  The sales increase was due to:

  • increased sales related to the acquisition of MacDon;
  • strong market share gains and increased volumes for booms in Europe and North America;
  • strong market share gains and increased volumes for telehandlers in North America;
  • strong market share gains for scissors in Europe and increased volumes in North America; and
  • a favourable  impact on sales from the changes in foreign exchange rates from Q3 2017.

The Company's operating earnings for Q3 2018 were $161.4 million.  This compares to $141.9 million in Q3 2017, an increase of $19.5 million.

___________________________

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 2018 operating earnings for Transportation were lower by $21.5 million, or 19.9% over Q3 2017.  The Transportation segment's earnings were impacted by the following:

  • sales declines on mature higher margin programs primarily in Europe largely due to WLTP, partly offset by programs in the early stages of launch with lower margins;
  • additional costs related to heavy launch activity globally; and
  • increased management, R&D, and sales costs supporting growth; partially offset by
  • increased volumes from our light vehicle automotive customers in North America and Asia;
  • a favourable impact on sales and expenses from the changes in foreign exchange rates from Q3 2017; and
  • a minimal foreign exchange impact from the revaluation of the operating balances on the balance sheet in Q3 2018 in comparison to a more significant unfavorable impact in Q3 2017.

Industrial segment operating earnings in Q3 2018 increased $41.0 million, or 121.3% from Q3 2017.  The Industrial operating earnings results were predominantly driven by:

  • increased earnings related to the acquisition of MacDon;
  • net increase in access equipment volumes; and
  • a favourable impact on sales and expenses from the changes in foreign exchange rates from Q3 2017; partially offset by
  • increased material costs as a result of rising commodity prices;
  • lower margins as a result of changes in customer and product mix favouring new launching products with lower margins;
  • an unfavourable foreign exchange impact from the revaluation of the operating balances on the balance sheet in Q3 2018; and
  • increased management and sales costs supporting growth.

"We are delighted to announce another quarter of double digit sales and earnings growth." said Linamar CEO Linda Hasenfratz.  "With USMCA terms agreed to we can continue to focus on growth opportunities in all of our business segments with certainty.  We continue to see record levels of opportunity and market share growth in our automotive business thanks to evolving technologies so well aligned to our capabilities, Skyjack continues to grow at double digit rates through product and geographic expansion, and MacDon is performing better than expected as well.  We are confident in our ability to continue to drive growth at Linamar as we have so consistently done over the past 10 years."

Dividends

The Board of Directors today declared an eligible dividend in respect to the quarter ended September 30, 2018 of CDN$0.12 per share on the common shares of the company, payable on or after December 7, 2018 to shareholders of record on November 23, 2018.

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; 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 forwarding 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 2018 Conference Call Information

Linamar will hold a webcast call on November 7, 2018 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 8482418, 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=m2798bf9d65197118 e31eb78b239e0e8c.  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 7, 2018 and at www.sedar.com by the start of business on November 8, 2018.  A taped replay of the conference call will also be made available starting at 8:00 p.m. on November 7, 2018 for ten days.  The number for replay is (855) 859-2056, Conference ID 8482418.

Linamar Corporation (TSX:LNR) is a diversified global manufacturing company of highly engineered products powering vehicles, motion, work and lives. The Company is made up of 2 operating segments – the Transportation segment and the Industrial segment, which are further divided into 5 operating groups – Machining & Assembly, Light Metal Casting, Forging, Skyjack and Agriculture, all world leaders in the design, development and production of highly engineered products. 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. 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. Linamar has more than 29,000 employees in 60 manufacturing locations, 8 R&D centers and 25 sales offices in 17 countries in North and South America, Europe and Asia which generated sales of $6.5 billion in 2017. 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

View original content: http://www.newswire.ca/en/releases/archive/November2018/07/c4716.html

regarding this release please contact Linda Hasenfratz at (519) 836-7550.Copyright CNW Group 2018

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