Q2 2024 Linamar Corp Earnings Call Transcript
Key Points
- Linamar Corp (LIMAF) achieved its long-term goal of reaching $10 billion in annualized sales, marking a significant milestone for the company.
- The company reported double-digit top and bottom line growth for Q2 2024, with sales reaching $2.85 billion, up 12% from the prior year.
- Linamar's mobility segment showed strong performance with earnings growth of 59% and margins improving to 6.4% from 4.5% last year.
- The company has a strong balance sheet with leverage improving and free cash flow moving back to positive, generating $67 million in cash this quarter.
- Linamar's strategic leadership changes, including the promotion of Jim Jarrell to CEO, are expected to bolster future growth and value creation.
- The global market for battery electric vehicles is experiencing a dial back, impacting Linamar's EV-related business and necessitating capital reallocation.
- The access equipment market is facing declining demand globally, with mid-single digit declines in North America and Europe, and more significant declines in Asia.
- The agricultural market is predicted to decline this year, with combines and related equipment seeing reduced demand, affecting Linamar's agricultural segment.
- Linamar's mobility segment is experiencing delays in new program launches, particularly in EV programs, impacting expected incremental sales growth.
- The company is facing pricing pressures in the access equipment market, particularly in Europe, due to increased competition from Chinese imports.
Good afternoon, ladies and gentlemen, and welcome to the Linamar Q2 2024 earnings call. (Operator Instructions) This call is being recorded on Thursday, August 8, 2024.
I would now like to turn the conference over to Ms. Linda Hasenfratz, Executive Chair of Linamar. Please go ahead.
Thanks so much. Good afternoon, everyone, and welcome to our second quarter conference call. Joining me this afternoon are members of our senior team, Jim Jarrell, Mark Stoddart, Dale Schneider, Elliot Burger and Kevin Hallahan, and some members of our corporate IR, marketing, finance and legal team.
Before I begin, I will draw your attention to the disclaimer currently being broadcast. So I'll start off with the most exciting news of the quarter, and that is the promotion of Jim Jarrell, our longtime President to the additional title of CEO, a much deserved recognition of his fantastic dedication and exceptional skill as a business leader.
Having achieved our long-term goal of reaching $10
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