In This Article:
Release Date: March 05, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
-
Linamar Corp (LIMAF) achieved nearly $800 million in free cash flow for the year, marking an outstanding financial performance.
-
The company delivered another year of double-digit earnings growth and margin expansion despite a down market across all three business segments.
-
Linamar Corp (LIMAF) secured significant new business wins in its mobility segment, boosting its launch book to nearly $3.5 billion.
-
The company maintained a strong balance sheet with a net debt to EBITDA ratio of 0.79%, positioning it well for future opportunities.
-
Linamar Corp (LIMAF) actively returned cash to shareholders through its dividend program and share repurchases, buying back 1.4 million shares under its NCIB program.
Negative Points
-
Sales in the mobility segment decreased by 6% year-over-year, with significant market declines in Europe and North America.
-
The company faced a significant impairment related to a goodwill write-down in Europe due to market deterioration.
-
Tariffs imposed by the US on Canadian and Mexican imports pose a potential risk to Linamar Corp (LIMAF)'s operations and strategic planning.
-
The agriculture industry saw a 17% decline in global volumes, impacting Linamar Corp (LIMAF)'s performance in this segment.
-
The company anticipates continued market softness in 2025, with expected declines in both the industrial and mobility segments.
Q & A Highlights
Q: What are the potential impacts of the recent tariffs on Linamar's operations, and how are OEMs responding to the situation? A: Unidentified_2 (Executive): The automotive industry is highly integrated, and shifting production outside of Canada and Mexico within 30 days is unrealistic due to the complexity and investment required. OEMs are likely to focus on illustrating the impact of tariffs and advocating for the benefits of the current integrated supply chain. Unidentified_3 (CEO): OEMs are not considering moving production at this point. They are gathering information and lobbying the government to maintain the current trade setup.
Q: How is Linamar managing inventory and competitiveness in light of the tariffs, particularly for the industrial segment? A: Unidentified_3 (CEO): Linamar has built up 6 to 9 weeks of inventory in the US to maintain market share. The company is exploring tools and techniques to manage costs and continue sales. Unidentified_2 (Executive): Linamar's industrial businesses have strong markets in Canada and internationally, and the company is pushing for increased market share in Canada to offset potential softness in the US.