Linamar's Diversified Businesses Deliver Another Quarter of Outstanding Double-Digit Earnings Growth
GUELPH, ON, May 8, 2024 /CNW/ - (TSX: LNR)
Strong financial performance
- Sales up 18.7% to $2.72 billion in Q1 2024;
- Normalized Operating Earnings1 up 38.7% in Q1 2024; and
- Normalized Diluted Earnings per Share1 up 30.8% in Q1 2024.
Mobility Segment Performing
- Mobility segment finished the quarter strong with normalized operating earnings up 57.9% compared to Q1 2023; and
- Second consecutive quarter of margin expansion with normalized operating earnings margin reaching 6.2%, meaningfully improved from 2023 levels.
Diversified Strategy Success
- Industrial normalized operating earnings up 23.3% over Q1 2023, anchoring solid overall performance further validating diversification strategy;
- Industrial normalized operating earnings representing over 49% of consolidated normalized operating earnings solidly anchoring Linamar as a Diversified Industrial Business; and
- The acquisition of Bourgault Industries Ltd. ("Bourgault") completed, expanding our agricultural profile to include broad acre seeding.
Double-Digit Sales Growth in Both Segments on Strong Market Share Growth
- Sales up 24.5% for Industrial for the quarter, due to exceptional global market share growth for combine drapers combined with our most recent acquisition of Bourgault;
- Sales up 16.7% for Mobility in the quarter, driven by both our Linamar Structures 2023 acquisitions as well as launching programs and increased volumes; and
- Content per vehicle1 ("CPV") up in every region, North American CPV hit a new quarterly record reflective of continued market share growth.
Returning Cash to Shareholders
- Linamar is maintaining its dividend to shareholders at quarterly $0.25 per share.
Three Months Ended | ||||
March 31 | ||||
(in millions of dollars, except per share figures) | 2024 | 2023 | ||
$ | $ | |||
Sales | 2,721.9 | 2,292.7 | ||
Operating Earnings (Loss) | ||||
Industrial | 139.7 | 104.9 | ||
Mobility | 129.5 | 72.0 | ||
Operating Earnings (Loss) | 269.2 | 176.9 | ||
Net Earnings (Loss) | 178.5 | 117.0 | ||
Net Earnings (Loss) per Share – Diluted | 2.90 | 1.90 | ||
Operating Earnings (Loss) – Normalized1 | ||||
Industrial | 120.2 | 97.5 | ||
Mobility | 123.6 | 78.3 | ||
Operating Earnings (Loss) – Normalized | 243.8 | 175.8 | ||
Net Earnings (Loss) – Normalized1 | 159.6 | 121.7 | ||
Net Earnings (Loss) per Share – Diluted – Normalized1 | 2.59 | 1.98 | ||
"Q1 marked an outstanding start to the year for us at Linamar, with excellent double digit growth in both segments setting the baseline for yet another year of double digit earnings growth", said Linamar Executive Chair and CEO Linda Hasenfratz, "With Industrial segment earnings consistently generating half or more of our earnings we can mark a successful transition of Linamar to a Diversified Industrial Business. It is great to see all parts of our business performing, growing market share, sales, and earnings so effectively."
______________________ | |
1 | Operating Earnings (Loss) – Normalized, Net Earnings (Loss) – Normalized, and Net Earnings (Loss) per Share – Diluted – Normalized are non-GAAP financial measures. Content per Vehicle is a Supplementary Financial Measure. Please see "Non-GAAP and Other Financial Measures" section of this press release. |
DIVIDENDS
The Board of Directors today declared an eligible dividend in respect to the quarter ended March 31, 2024, of CDN$0.25 per share on the common shares of the company, payable on or after June 7, 2024, to shareholders of record on May 27, 2024.
NON-GAAP AND OTHER FINANCIAL MEASURES
The Company uses certain non-GAAP and other financial measures to provide useful information to both management, investors, and other stakeholders in assessing the financial performance and financial condition of the Company.
Certain expenses and income that must be recognized under GAAP are not necessarily reflective of the Company's underlying operational performance. For this reason, management uses certain non-GAAP and other financial measures when analyzing operational performance on a consistent basis.
These Non-GAAP and other financial measures do not have a standardized meaning prescribed by GAAP and therefore they are unlikely to be comparable to similarly titled measures presented by other publicly traded companies, and they should not be construed as an alternative to other financial measures determined in accordance with GAAP. Please see the "Non-GAAP and Other Financial Measures" section of the Company's MD&A for further information.
During Q1 2023, a normalizing item related to an "adjustment for contingent consideration on Mills River earn-out" impacted the Mobility segment by $4.9 million. Also, during Q1 2023 a normalizing item impacting the Company's income taxes related to withholding tax on repatriation of cash from China by $6.9 million.
All normalized non-GAAP financial measures areas reconciled as follows:
Three Months Ended | ||||||||
March 31 | ||||||||
(in millions of dollars, except per share figures) | 2024 | 2023 | +/- | +/- | ||||
$ | $ | $ | % | |||||
Operating Earnings (Loss) – Normalized | ||||||||
Operating Earnings (Loss) | 269.2 | 176.9 | 92.3 | 52.2 % | ||||
Foreign exchange (gain) loss | (25.4) | (6.0) | (19.4) | |||||
Other items | - | 4.9 | (4.9) | |||||
Operating Earnings (Loss) – Normalized | 243.8 | 175.8 | 68.0 | 38.7 % | ||||
Net Earnings (Loss) – Normalized | ||||||||
Net Earnings (Loss) | 178.5 | 117.0 | 61.5 | 52.6 % | ||||
Foreign exchange (gain) loss | (25.4) | (6.0) | (19.4) | |||||
Foreign exchange (gain) loss on debt and derivatives | 0.5 | 0.2 | 0.3 | |||||
Other items | - | 4.9 | (4.9) | |||||
Tax impact including Other Items | 6.0 | 5.6 | 0.4 | |||||
Net Earnings (Loss) – Normalized | 159.6 | 121.7 | 37.9 | 31.1 % | ||||
Net Earnings (Loss) per Share – Diluted – Normalized | ||||||||
Net Earnings (Loss) per Share – Diluted | 2.90 | 1.90 | 1.00 | 52.6 % | ||||
Foreign exchange (gain) loss | (0.41) | (0.09) | (0.32) | |||||
Foreign exchange (gain) loss on debt and derivatives | 0.01 | - | 0.01 | |||||
Other items | - | 0.08 | (0.08) | |||||
Tax impact including Other Items | 0.09 | 0.09 | - | |||||
Net Earnings (Loss) per Share – Diluted – Normalized | 2.59 | 1.98 | 0.61 | 30.8 % | ||||
All normalized non-GAAP financial measures areas impacting segments reconciled as follows:
Three Months Ended | ||||||
March 31 | ||||||
2024 | ||||||
Industrial | Mobility | Linamar | ||||
(in millions of dollars) | $ | $ | $ | |||
Operating Earnings (Loss) – Normalized | ||||||
Operating Earnings (Loss) | 139.7 | 129.5 | 269.2 | |||
Foreign exchange (gain) loss | (19.5) | (5.9) | (25.4) | |||
Other items | - | - | - | |||
Operating Earnings (Loss) – Normalized | 120.2 | 123.6 | 243.8 | |||
Three Months Ended | ||||||
March 31 | ||||||
2023 | ||||||
Industrial | Mobility | Linamar | ||||
(in millions of dollars) | $ | $ | $ | |||
Operating Earnings (Loss) – Normalized | ||||||
Operating Earnings (Loss) | 104.9 | 72.0 | 176.9 | |||
Foreign exchange (gain) loss | (7.4) | 1.4 | (6.0) | |||
Other items | - | 4.9 | 4.9 | |||
Operating Earnings (Loss) – Normalized | 97.5 | 78.3 | 175.8 | |||
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
Q1 2024 Release Information
Linamar will hold a webcast call on May 8, 2024, at 5:00 p.m. ET to discuss its first quarter results. The event will be simulcast and can be accessed at the following https://www.linamar.com/event/q1-2024-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 (+1) 888 259-6580 (North America) or (+1) 416 764-8624 (International) Conference ID 90762585, 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 Executive Chair and 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 May 8, 2024, and at www.sedar.com by the start of business on May 9, 2024. The webcast replay will be available at https://www.linamar.com/event/q1-2024-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 May 8, 2024, for seven days. The number for the replay is (+1) (877) 674-7070 or (+1) (416) 764-8692, Passcode: 762585 #. In addition, a recording of the call will be posted at https://www.linamar.com/event/q1-2024-earnings-call/.
Q2 2024 Release Information
Linamar will hold a webcast call on August 8, 2024, at 5:00 p.m. ET to discuss its second-quarter results. The event will be simulcast and can be accessed at the following https://www.linamar.com/event/q2-2024-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 (+1) 888 259-6580 (North America) or (+1) 416 764-8624 (International) Conference ID 60435601, 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 Executive Chair and 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 8, 2024, and at www.sedar.com by the start of business on August 9, 2024. The webcast replay will be available at https://www.linamar.com/event/q2-2024-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 August 8, 2024, for seven days. The number for the replay is (+1) (877) 674-7070 or (+1) (416) 764-8692, Passcode: 435601 #. In addition, a recording of the call will be posted at https://www.linamar.com/event/q2-2024-earnings-call/.
Linamar Corporation (TSX:LNR) is a diversified 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 Mobility segment, both global leaders in manufacturing solutions and world-class developers of highly engineered products. The Industrial segment is comprised of Skyjack and the newly formed Linamar Agriculture operating group which consists of the MacDon, Salford and Bourgault brands. Skyjack manufactures scissors, boom and telehandler lifts for the aerial work platform industry. Within the Agriculture portfolio MacDon manufactures combine draper headers and self-propelled windrowers for harvesting, Salford supplies farm tillage and crop fertilizer application equipment while Bourgault is a leader in air seeding technology. The Mobility segment is focused on propulsion systems, structural and chassis systems, energy storage and power generation for both the global electrified and traditionally powered vehicle markets. Operationally, Mobility is organized into three regional groups North America, Europe, Asia Pacific and the new Linamar Structures product group. The Regional Mobility groups are vertically integrated operations combining expertise in light metal casting, forging, machining and assembly. The Linamar Structures Group offers competitive lightweight innovations for safety-critical components and systems for the global mobility market. Design, development, and testing services for the Mobility segment are provided by McLaren Engineering. Linamar's medical solutions group, Linamar MedTech, focuses on manufacturing solutions for medical devices and precision medical components. Linamar has over 34,000 employees in 75 manufacturing locations, 17 R&D centres and 31 sales offices in 19 countries in North and South America, Europe and Asia, which generated sales of more than $9.7 billion in 2023. For more information about Linamar Corporation and its industry-leading products and services, visit www.linamar.com or follow us on our social media channels.
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Guelph, Ontario
May 8, 2024
SOURCE Linamar Corporation
