Linamar Corporation · TSX:LNR
Linamar — Q3 2024 Earnings Presentation
33 slides from Linamar's earnings presentation, Nov 12, 2024
Slide 1: Q3 2024 Earnings Call
Q3 2024 Earnings Call November 12, 2024 Linda Hasenfratz EXECUTIVE CHAIR Jim Jarrell CEO & PRESIDENT Dale Schneider CFO For Audio Only Dial In North America: (888) 259-6580 International: (416) 764-8624 Conference ID: 71153445 © Linamar Corporation
Slide 2: Forward-looking Information, Risk, and Uncertainties
Forward-looking Information, Risk, and Uncertainties Certain information regarding Linamar set forth in this presentation and oral summary, including management’s assessment of the Company’s future plans and operations may constitute forward-looking statements. This information is based on current e
Slide 3: Agenda
Agenda Q3 2024 Highlights & Strategic Updates Linda Hasenfratz EXECUTIVE CHAIR Industry & Operations Update Jim Jarrell PRESIDENT & CEO Financial Review & Outlook Dale Schneider CHIEF FINANCIAL OFFICER Q&A All © Linamar Corporation 3
Slide 4: Q3 Highlights & Strategic Updates
Q3 Highlights & Strategic Updates Linda Hasenfratz EXECUTIVE CHAIR © Linamar Corporation 4
Slide 5: Consistent, Long-term Performance
Linamar Value Creation Drivers Consistent, Long-term Performance Consistent, Sustainable Flexibility to Growth Driving from Mitigate Risk Capital Asset Profile enables us Diversity to redeploy under-utilized equipment Diversified revenue streams, to changing market needs, broad product synergistic b
Slide 6: Q3 2024 Executive Summary
Q3 2024 Executive Summary Delivering Growth, Strong Financial performance with Sales, Normalized Net Earnings and Normalized EPS all up over Q3 ‘23 Free Cash Flow, Significant Free Cash Flow generation and Returning Cash to Shareholders Market Share Growth in both segments Renewed Capital Allocation
Slide 7: Q3 2024 Financial Highlights
Q3 2024 — Financial Highlights Driving Growth and Strong Free Cash Flow Net Earnings & EPS Sales Margin1 Free Cash Flow1 (Normalized) 1 (Normalized) $2.64B $144.6M $2.35 $269.6M 5.5% 8.3% 6.1% 6.3% $393.5M vs. Q3 ‘23 vs. Q3 ‘23 vs. Q3 ‘23 vs. Q3 ‘23 1- Net Earnings (NE) – Normalized, Net Earnings (L
Slide 8: Capital Allocation Strategy Framework
Capital Allocation Strategy Framework Balancing Growth & Returning Cash to Shareholders Free Cash Flow Priorities 1 Ensure Balance Sheet is at an optimal level 3 Beyond first two priorities, use Excess Liquidity towards: • NCIB to Buyback Shares, particularly when share price undervaluation is evide
Slide 9: New NCIB Announced
Normal Course Issuer Bid • Timing and conditions are currently aligned • Approved by TSX and commencing on November 15, 2024 • To remain in place for next 12 months Buyback Program New NCIB • Able to repurchase up to a maximum of 4,021,282 shares Announced • Representing up to a maximum of 10% of th
Slide 10: Industry & Operations Updates
Industry & Operations Updates Jim Jarrell CEO & PRESIDENT © Linamar Corporation 10
Slide 11: Skyjack Outperforming in a Declining Market
Capital Allocation Industrial Plans Segment / / Industry & Market Share Skyjack Outperforming in a Declining Market Industry Access Volumes Skyjack Global YTD Unit Performance FY2024 FY2025 Expectation Expectation Skyjack total Global market North unit YTD YTD -5.8% +2.7% VS America -5.9% -12.0% Eur
Slide 12: Global Expansion Positions Skyjack for Future Growth
Industrial Segment / / Key Business Updates Global Expansion Positions Skyjack for Future Growth Skyjack Improving Operations Key Product Introductions New facility in Mexico achieving better production The new Micro Scissor line offers expanded schedule adherence as ramp-up inefficiencies decrease
Slide 13: Navigating the Agriculture Business Cycle
Capital Allocation Industrial Plans Segment / / Industry & Market Share Navigating the Agriculture Business Cycle Industry Large Ag Volumes Linamar Agriculture Global YTD Unit Performance FY2024 Expectation North America -15.0% +6.1% Europe -15.0% Rest of World -20.0% Global Total -17.0% Source: Ind
Slide 14: Technology is Key in a Challenging Market
Capital Allocation Industrial Plans Segment / / Key Business Updates Technology is Key in a Challenging Market Ag Operating Performance M&A Integration Innovations Order book carrying sales despite Linamar Agriculture integration steep industry downturn across 3 core brands – On Track Short-line nic
Slide 15: Increasing Global CPV in Flat Markets
Capital Allocation Mobility Segment Plans / Industry & Market Share Increasing Global CPV in Flat Markets Industry LV Volumes Linamar’s Q3 Global CPV FY2024 FY2025 Expectation Expectation $79.98 North America -1.4% -1.1% $75.59 +5.8% Global Content Per Europe -5.0% -0.4% Vehicle increase Asia -1.5%
Slide 16: Positioned for a Changing Market
Capital Allocation Mobility Segment Plans / Key Business Updates Positioned for a Changing Market Operations & Integration Updates Market Challenges & Opportunities 2023 Acquisition Integrations into core Mobility Transitional period of ICE to Segment will be fully complete by year end EV technologi
Slide 17: Financial Update & Outlook
Financial Update & Outlook Dale Schneider CFO © Linamar Corporation 17
Slide 18: Growing Sales in Challenging Markets
Industrial Segment / Q3 Financial Performance Growing Sales in Challenging Markets Key Factors: Industrial Revenue +24.3% vs Q3 ‘23 • Revenue Normalized Operating Earnings 1 • (in Millions CAD) (in Millions CAD) • +24.3% +15.0% Normalized OE $841.3 $140.2 $121.9 +15.0% vs Q3 ‘23 $676.6 • • • Normali
Slide 19: Double Digit Earnings Growth
Mobility Segment / Q3 Financial Performance Key Factors: Mobility Double Digit Earnings Growth Revenue +2.1% vs Q3 ‘23 • Addition of Linamar Structures Revenue Normalized Operating Earnings 1 acquisitions (in Millions CAD) (in Millions CAD) • Increasing volumes on launching programs • Partially offs
Slide 20: Maintaining Linamar's Strong Balance Sheet
Capital Allocation Leverage Plans / Consolidated and Liquidity Maintaining Linamar’s Strong Balance Sheet Net Debt to EBITDA 1 Total Liquidity 2 Current Positioning (in Millions CAD) • Net Debt to EBITDA was 1.07x Cash Position at the end of Q3 Available cash on credit facilities • Cash Position at
Slide 21: Outlook Q4 '24 Outlook FY
Outlook Q4 '24 Outlook FY Industrial vs. Q4 ‘23 FY2023 Actuals FY2024 Expectations FY2025 Expectations Sales Growth Decline Sales Growth Double Digit Growth Modest Decline Normalized OE Growth Double Digit Decline Normalized OE Growth (%) 144.9% Growth Decline 1 Normalized OE Margin % Contraction No
Slide 22: © Linamar Corporation
© Linamar Corporation 22
Slide 23: Q3 2024 Executive Summary
Q3 2024 Executive Summary Delivering Growth, Strong Financial performance with Sales, Normalized Net Earnings and Normalized EPS all up over Q3 ‘23 Free Cash Flow, Significant Free Cash Flow generation and Returning Cash to Shareholders Market Share Growth in both segments Renewed Capital Allocation
Slide 24: Kevin Hallahan
Kevin Hallahan VP, Investor Relations & Marketing Linamar Corporation kevin.hallahan@linamar.com 519-836-7550 https://www.linamar.com/investors/ © Linamar Corporation
Slide 25: Appendix
Appendix © Linamar Corporation
Slide 26: Non-GAAP Financial Measures
Appendix Non-GAAP 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
Slide 27: Industrial Sales, Earnings, and Margins (in Millions CAD)
Appendix Industrial Sales, Earnings, and Margins (in Millions CAD) Q3 2024 Q3 2023 +/- +/- $ $ $ % Sales 841.3 676.6 164.7 24.3% Operating Earnings 141.8 130.4 11.4 8.7% Foreign Exchange1 (Gain)/Loss (1.6) (8.5) 6.9 Other Items - - - Operating Earnings – Normalized2 140.2 121.9 18.3 15.0% Operating
Slide 28: Mobility Sales, Earnings, and Margins (in Millions CAD)
Appendix Mobility Sales, Earnings, and Margins (in Millions CAD) Q3 2024 Q3 2023 +/- +/- $ $ $ % Sales 1,794.4 1,757.6 36.8 2.1% Operating Earnings 78.3 83.9 (5.6) (6.7%) Foreign Exchange1 (Gain)/Loss 10.1 (5.4) 15.5 Other Items - - - Operating Earnings – Normalized2 88.4 78.5 9.9 12.6% Operating Ea
Slide 29: Net Earnings (Loss) – Normalized (in Millions CAD)
Appendix Net Earnings (Loss) – Normalized1 (in Millions CAD) Q3 2024 Q3 2023 +/- +/- $ $ $ % Net Earnings (Loss) 138.0 146.7 (8.7) (5.9%) Foreign Exchange (Gain)/Loss2 8.5 (13.9) 22.4 Foreign Exchange (Gain)/Loss on 0.4 (0.1) 0.5 Debt and Derivatives Other Items - - - Tax Impact including Other Item
Slide 30: Net Earnings (Loss) per Share – Diluted – Normalized
Appendix Net Earnings (Loss) per Share – Diluted – Normalized1 Q3 2024 Q3 2023 +/- +/- $ $ $ % Net Earnings (Loss) per Share - 2.24 2.38 (0.14) (5.9%) Diluted Foreign Exchange2 (Gain)/Loss 0.14 (0.22) 0.36 Foreign Exchange (Gain)/Loss on 0.01 - 0.01 Debt and Derivatives Other Items - - - Tax Impact
Slide 31: Free Cash Flow & Capital Investment (in Millions CAD)
Appendix Free Cash Flow1 & Capital Investment (in Millions CAD) Q3 2024 Q3 2023 (in millions of dollars) $ $ Free Cash Flow Cash generated from (used in) operating activities 370.4 74.6 Payments for purchases of property, plant and equipment (102.5) (199.9) Proceeds on disposal of property, plant an
Slide 32: Linamar's Powerful Balanced & Diversified Business Model
Appendix Linamar’s Powerful Balanced & Diversified Business Model INDUSTRIAL SEGMENT focused on North America, Cash for Continued Brand generates cash and shares brand Investment Management management knowledge. Strong Profit Consistent Free Strong, Stable Sustainable MOBILITY SEGMENT Margins Cash F
Slide 33: Kevin Hallahan
Kevin Hallahan VP, Investor Relations & Marketing Linamar Corporation kevin.hallahan@linamar.com 519-836-7550 https://www.linamar.com/investors/ © Linamar Corporation