Linamar (LNR) Q2 2024 earnings summary

Executive summary

• Achieved double-digit top and bottom-line growth in Q2 2024, with sales up 11.6% to CAD 2.85 billion and normalized EPS up 17% to CAD 3.06.

• CEO succession completed, with Jim Jarrell appointed CEO and President after a multi-year transition, as the company reached the CAD 10 billion annualized sales milestone.

• Mobility segment earnings grew 59% with margin expansion to 6.4%; Industrial segment sales rose 14.1%.

• Market share gains across all business segments, including strong performance at Skyjack and MacDon.

• Strategic focus remains on operational flexibility, market share growth, and leveraging acquisitions for further expansion.

Financial highlights

• Q2 2024 sales reached CAD 2.85 billion, up 11.6% year-over-year; trailing twelve months sales at CAD 10.46 billion, up 16.2%.

• Normalized net earnings for Q2 2024 were CAD 188.4 million, up 17.2% year-over-year; normalized EPS was CAD 3.06.

• Gross margin increased to CAD 424.8 million (14.9% of sales), up 17.4% year-over-year.

• Free cash flow positive at CAD 67 million for Q2; CapEx at CAD 174 million (6.1% of sales), expected at low end of 6–8% range.

• Cash position at quarter-end was CAD 759.9 million, with liquidity at CAD 1.3 billion.

Outlook and guidance

• Expect continued double-digit consolidated sales and EPS growth for 2024, with record top and bottom-line results on track.

• Mobility segment to achieve high single-digit sales growth in 2024, with launches adding CAD 500–600 million; 2025 launches to add CAD 700–900 million.

• Industrial segment to see double-digit ag growth in 2024, modest access equipment growth, and flat ag sales in 2025.

• CapEx expected at the low end of the 6–8% range; strong free cash flow anticipated for 2024 and 2025.

• Q3 2024: Both segments to see double-digit growth year-over-year, but with seasonal decline from Q2 levels.