Linamar Corporation (LNR) Q1 2026 Earnings Call

Investor webinar replay

Replay transcript excerpt

start is always a key reminder of the value drivers that make Linnemar such a great investment and how they played out this past year. First, Linnemar has a long track record of consistent, sustainable results that drive out of our diverse business. And Q1 is just another great example of that, with exceptional earnings growth in our mobility business, more than offsetting soft markets across the board, as well as other dynamics like tariffs in our industrial business. Being invested in both businesses helps trim those big swings up and down in individual markets and leaves us with a more consistent, sustainable level of performance. The second key point is our flexibility to mitigate risk. As you all know, our equipment is programmable. It's flexible. It can be used on a large variety of types of equipment across different vehicle platforms. It takes propulsion in the mobility side, for instance. So this flexibility allows us to reallocate equipment from programs running under capacity to new launches, which, again, is a big part of helping to keep our capital bills billed down, as you saw, again, this quarter. Third, we've always run a prudent conservative balance sheet. We target keeping net debt to EBITDA under 1.5 times. And in Q1, you certainly saw that. Net debt to EBITDA is 0.6, despite some significant investments. CapEx for new programs and acquisitions over the last year. Our peers were definitely much more heavily indebted with Netcat to EBITDA more than two and a half times. I think this really creates financial stress for them and risk in terms of soft markets and limits their flexibility to chase new business, which of course we are not restricted in the same way. And I think that gives us a big advantage. Lastly, returning cash to shareholders is a ke...