Linamar Corporation · TSX:LNR
Linamar — Shareholder Meeting (May 2019)
133 slides from Linamar's shareholder meeting presentation, May 30, 2019
Slide 1: Linamar Corporation
Linamar Corporation A Global Powerhouse in Diversified Advanced Manufacturing May 2019
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 managements assessment of the company’s future plans and operations may constitute forward- looking statements. This information is based on current ex
Slide 3: Developing the Technology of Tomorrow
Developing the Technology of Tomorrow © Linamar Corporation 4
Slide 4: Linamar - A Leading Global Advanced Manufacturing Company
Linamar - A Leading Global Advanced Manufacturing Company Carbon Efficient Transportation Leading Edge AI Enabled Electrified Technology Lightweight SOLUTIONS TO Connected & Autonomous POWER THE FUTURE OF VEHICLES, MOTION, New Mobility WORK, AND LIVES Deep Infrastructure Manufacturing Expe
Slide 5: Market Focus Addresses Key Global Trends
Market Focus Addresses Key Global Trends Transportation Infrastructure Food Power Water Age Urbanization Growing Global Population Aging Global Population Rapid Technology Evolution © Linamar Corporation 6
Slide 6: Core Brands and Diverse Markets
Core Brands and Diverse Markets Diversified Manufactured Products that Power Vehicles, Motion, Work and Lives Infrastructure Transportation Linamar Machining & Assembly Food Linamar Light Metal Casting Linamar Montupet Light Metal Casting | GF Linamar Linamar Seissenschmidt Forging © Linamar Corpora
Slide 7: Linamar's Unique Value Creation Model
Linamar’s Unique Value Creation Model Deeply Interconnected Businesses Driving Value Across Multiple Vectors Global Footprint Machining & Assembly Seissenschmidt Forging Light Metal Casting Independent Businesses Purchasing Value Connected © Linamar Corporation 8
Slide 8: Market Concentration Balanced
Market Concentration Balanced Sales Sales OE Sales OE Industrial Transportation Mobile Industrial Equipment | Fabricated Assemblies 24% 39% Engine | Transmission | Driveline | Body 76% 61% AUTOMOTIVE 69.6% ACCESS 15.8% OFF-HIGHWAY 2.5% AGRICULTURAL 8.2% COMMERCIAL VEHICLE 3.9% Q1 2019 - Industry fig
Slide 9: Diverse Core Capabilities
Diverse Core Capabilities Metal Forming Machining & Assembly Forging Light Metal Casting Robotic Welding Advanced Automation Hatebur High Speed Hot Gravity & Low Pressure Laser cutting & Robotics Horizontal Forging Aluminum Die Casting Metal Forming CNC Expertise Conventional Vertica
Slide 10: Diverse Key Products
Diverse Key Products Industrial Transportation Body & Chassis Driveline New Energy Powertrain Systems Engine Transmission © Linamar Corporation 11
Slide 11: Strong Global Footprint
Strong Global Footprint 24 CANADA 24 UNITED KINGDOM 1 GERMANY 7 HUNGARY 4 CHINA 4 Global Headcount 29,000 USA 6 MEXICO 5 49 Facilities with IATF 16949 13 Facilities with ISO 9001 SPAIN 1 FRANCE 4 BULGARIA 1 INDIA 3 51 Facilities with ISO 14001 41 Facilities with OHSAS 18001 Number of manufacturing f
Slide 12: Culture
Culture
Slide 13: Prosperity Pyramid
Prosperity Pyramid © Linamar Corporation 14
Slide 14: Achieving Prosperity through a Balanced Approach
Achieving Prosperity through a Balanced Approach THE STEPPING STOOL OF SUCCESS CUSTOMER EMPLOYEE FINANCIAL OPPORTUNITY CULTURE COMPETITIVENESS © Linamar Corporation 15
Slide 15: Linamar Vision
LINAMAR VISION CORE PURPOSE: TO DO WHAT WE DO BEST BETTER HE BENEFIT OF ALL STAKEHOLDERS CORE VALUES ntrepreneur STEPPING STOOL soon Compass * Measurement Strategy uble Digit System LEADERSHIP BEHAVIOURS @©Linamar Corporation 16
Slide 16: ESG a Long Held Priority
ESG a Long Held Priority ENVIRONMENT SOCIAL GOVERNANCE • Green technology is a key • Diversity Drives Results Initiative • Detailed review of every growth strategy driving product • 25% female leaders vs 20% female governance policy conducted workforce innovation in all business • Strong ethnic dive
Slide 17: Diversity at Linamar
Diversity at Linamar © Linamar Corporation 18
Slide 18: See It Be It STEM It
More than 60 Role Models Featured on the Website, 12 Highlighted in Inaugural Calendar 2019 The See It Be It STEM It Calendar and Website identify motivational young women who have a STEM education, and highlight their stories to empower both current and future women in STEM. Motivate young women to
Slide 19: Markets and Strategy
Markets and Strategy
Slide 20: Key Market Strategies - Infrastructure
Key Market Strategies - Flexible & Opportunistic Infrastructure $10,000 $11,349 $11,321 $11,177 $12,000 $9,000 $11,001 $11,149 $10,482 $8,000 SEGMENT MARKET SIZE $Millions (USD) - LINES TOTAL MARKET SIZE $Millions (USD) - BARS $10,000 $7,000 $8,639 $7,969 $7,948 $7,553 $8,000 $6,000 $7,120 $6,275 $5
Slide 21: Innovation
Innovation Remove operator from height Next Generation Alternative Power Mobile Apps Digital Products Smart machines Autonomy Secondary Guarding Continuously Variable Transmission © Linamar Corporation 22
Slide 22: Market Share Penetration Access - Key Growth Driver
Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Source: Skyjack Internal, April 2019. Market share is rolling 12 month average. Q1 2018 Telehandler Market Share (NA Only) Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q
Slide 23: Key Market Strategies - Food
Key Market Strategies - Flexible & Opportunistic Food Global Market Combine Heads ($CAD) $3,000 $2,500 $2,000 $1,500 Millions Food $1,000 Build on MacDon acquisition as the foundation from which to expand global ag business $500 overall Regional growth initiatives Advanced and disruptive $0 te
Slide 24: Technology and Innovation Leader
Technology and Innovation Leader Technology supported by over 100 unique patents with an additional 30+ unique patents pending globally, and a permanent technology-focused staff of 110 FlexDrapers® & Rigid Drapers Self-Propelled Windrowers Hay Products Higher cutting speeds Industry leading ro
Slide 25: Market Share Penetration Ag - Key Growth Driver
Market Share Penetration Ag - Key Growth Driver Strong Market Position in Key Product Categories Estimated Combine Drapers Market Share (Global) Market Position Combine Combine FlexDrape FlexDraper® r® Headers #1 Headers Rigid Draper Headers #1 Self- Propelled Self- Windrowe Propelled Windrowers rs
Slide 26: Key Market Strategies - Transportation
Key Market Strategies - Flexible & Opportunistic Transportation 120 Advanced Consensus Projection IHS Forecast 100 Actual Light Vehicles Produced (Millions) Pure Battery EV penetration reaches 80 13% of the market by 2030 60 40 20 0 Transportation $350 20002001200220032004200520062007200820092010201
Slide 27: Fuel Cell Vehicles
Fuel Cell Vehicles © Linamar Corporation 28
Slide 28: Technology Leadership Key to Growth
Technology Leadership Key to Growth Innovation in Design, Development, Lightweighting Solutions Green & Connected Vehicles and Manufacturing Using unique manufacturing processes, Innovative design & engineering solutions to Utilizing Linamar product and engineering materials, and designs to pr
Slide 29: Content Per Vehicle
Content Per Vehicle North America Europe Asia Pacific $175 $80 $12 $165 $70 $10 $155 $60 $145 $8 $50 $135 $125 $40 $6 $115 $30 $4 $105 $20 $95 $2 $10 $85 130.57 150.37 153.82 159.07 163.85 167.37 19.84 39.47 63.60 69.62 78.30 84.62 6.36 6.70 8.32 9.66 9.82 10.29 $75 $0 $0 2014 2015 2016 2017 2018 Q1
Slide 30: Electrified Vehicles Key Growth Opportunity for Linamar
Electrified Vehicles Key Growth Opportunity for Linamar $90 $80 $70 $60 Expected BEV Global CPV 3 years out same as ICE Global CPV 4 years ago $50 $40 $30 $20 $10 $0 2015 2016 2017 2018 2019 2020 2021 2022 2023 -$10 Electric Hybrid ICE Updated: Q1 2019, estimates based on current projections and EV
Slide 31: Launches
Launches Launching more than $4.3 billion of new work today 4,500.00 4,000.00 3,500.00 3,000.00 2,500.00 2,000.00 1,500.00 1,000.00 500.00 - 2018 2019 2020 2021 2022 2023 Other Driveline Engine Transmission Sales from Launch add: $800 to $900 Million in 2019, >$1.2 Billion in 2020 Updated April 2019
Slide 32: Key Market Strategies - Flexible & Opportunistic
Key Market Strategies - Flexible & Opportunistic Power Water Age Overall Invest lightly in the short term Expand Asian footprint Focus on Advisory Councils, research Focus primarily on Greenfield growth with markets, develop strategy some smaller acquisitions to enhance Target ~5 year inte
Slide 33: Innovation – Driving the Advanced Manufacturing Agenda
Innovation – Driving the Advanced Manufacturing Agenda
Slide 34: Broad Innovation Strategy
Broad Innovation Strategy PRODUCT MANUFACTURING DEVELOPMENT PARTNERSHIPS WITH TECH STARTUPS PROCESS DIGITIZATION DEVELOPMENT THROUGH AI/ML MATERIAL TANGENTIAL DEVELOPMENT INNOVATION LIGHTER, STRONGER © Linamar Corporation 35
Slide 35: AI/ML Driving Innovation & Efficiencies
AI/ML Driving Innovation & Efficiencies VISION SYSTEMS ADVANCED ROBOTICS Evolving vision systems to more Development of advanced accurately gauge & inspect products collaborative robots to drive more for better product integrity efficient and safer automation ADDITIVE MANUFACTURING (3D PRINTING) DAT
Slide 36: Digitization with AI/ML
Digitization with AI/ML 60 Plants 2,230 LMMS Data 2,982 824 Traceability Collection Connections Robots Marking Stations 1,919 x10 2,143 RFID Stations 1024 Connected Machines Vision Systems 1,933 8 Traceability Read Stations AGVs May 2019 © Linamar Corporation 37
Slide 37: Why is Share Price not Reflecting Performance
Why is Share Price not Reflecting Performance
Slide 38: Earnings Per Share Normalized vs Share Price
Earnings Per Share Normalized1 vs Share Price $10.00 $80 $9.00 $72 $8.00 $64 $7.00 $56 $6.00 $48 $5.00 $40 $4.00 $32 $3.00 $24 $2.00 $16 $1.00 $8 $0.00 $0 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 EPS-Normalized¹ Share Price 1 - Earnings per
Slide 39: Key Issues
Key Issues Linamar earnings are 40% industrial where PE multiples are much higher but we are being valued as an auto stock alone Valuations with a “sum of the parts” approach yield much higher target prices All auto stocks are under pressure today: Vehicle volumes have flattened/softened, ma
Slide 40: Trading Comparables
Trading Comparables Industrial / Aerial Lift Auto Part Peers Agriculture Peers Peers (1) American Average Deere & CNH (1) Linamar BorgWarner Exco Magna Tower Martinrea Terex Oshkosh Average Ag Growth Alamo AGCO Average Axle (excl. LNR) Company Industrial Equity Value $3,333 $12,157 $395 $24,444 $2,3
Slide 41: In Line With Powertrain Peers
In Line With Powertrain Peers © Linamar Corporation 42
Slide 42: Market Dynamics are a Key Issue
Market Dynamics are a Key Issue Majority of trades in market today are “Passive” Headline Passive trades follow momentum of other trades Research Based They magnify the trading of active traders 25% of trades today are “Headline Traders” Reactive trades based on headlines not research By
Slide 43: Strategy
Strategy Reiterate independence of 3 key businesses with the benefit of deep interconnection and value creation to encourage sum of parts valuation Can’t control auto industry headline but we can correct the perception of Linamar Reiterate significant growth potential and booked business in hy
Slide 44: Track Record of Growth Regardless of Auto Cycle
Track Record of Growth Regardless of Auto Cycle 20 20.00 CAGR -3.3% CAGR 5.7% 15 15.00 US Vehicle Units (Millions) 10 2000-2018 10.00 EPS Normalized CAGR -- 16.1% US Vehicle Sales CAGR -- 0% CAGR 97.0% 5 5.00 CAGR 10.9% 0 - 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2
Slide 45: 2019 Expected to Drive Solid Free Cash Flow
2019 Expected to Drive Solid Free Cash Flow Min Target 500 450 2019 expected to generate between $500 and $700 million through 400 Higher earnings over 2018; 350 Lower Capex than 2018; Focused NCWC Improvements; and 300 Long Term AR (“LTAR”) Improvements NCWC Improvements focused on Mill
Slide 46: Key Investment Themes
Key Investment Themes Massive Market Focus on our Consistent Strong Free Cash Flow 2019 Earnings Growth Opportunity in All Shareholders Performance Expected in 2019 Leads Many Peers Businesses History of growth MacDon growth Earnings up, capex Consensus earnings NCIB returning cash to desp
Slide 47: Developing the Technology of Tomorrow
Developing the Technology of Tomorrow © Linamar Corporation 48
Slide 48: Annual General Meeting
Annual General Meeting Jim Jarrell President & COO May 30th, 2019
Slide 49: Linamar Week & Tech Days
Linamar Week & Tech Days Tuesday, May 28, 2019 Wednesday, May 29, 2019 Thursday, May 30, 2019 Theme: Focus on Youth Theme: Focus on Investors 10-4pm Leadership AIM team offsite 8:30-10:30 Co-op Team Building 10-11:30am AGM Presentation 8:00-3:00pm Stepping Stool Workshops 11:00-11:50am Pre
Slide 50: © Linamar Corporation
© Linamar Corporation 51
Slide 51: Technology of Tomorrow through our Products, Plants & People
Technology of tomorrow | through our Products, Plants & People ! Alt | \\, t ih \ 1| HOLY ert Perfo ; (lp Sh, II! * al i) a i) | H) m\ | HI Wh. STN IN
Slide 52: Technology of Tomorrow
Creating & Launching Technologies of Tomorrow that Profitably Grow Linamar Technology of Tomorrow © Linamar Corporation 53
Slide 53: Technology of Tomorrow through our Products, Plants & People
Technology of tomorrow | through our Products, Plants & People ! Alt | \\, t ih \ 1| HOLY ert Perfo ; (lp Sh, II! * al i) a i)
Slide 54: Linamar Transportation | Core Capabilities
Linamar Transportation | Core Capabilities Machining & Assembly Forging Light Metal Casting Advanced Automation Hatebur High Speed Hot Gravity & Low Pressure & Robotics Horizontal Forging Aluminum Die Casting CNC Expertise Conventional Vertical Forging High Pressure Aluminum & Complex
Slide 55: Grow Content and Market Share
Grow Content and Market Share 120 100 Light Vehicles Produced (Millions) 80 60 40 20 0 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 EV HEV ICE Source: IHS, February 2019 © Linamar Corporation 56
Slide 56: Conventional ICE Vehicle
Conventional ICE Vehicle Transmission Rear Drive Module Engine © Linamar Corporation 57
Slide 57: Hybrid Vehicle
Hybrid Vehicle Small Battery Hybrid Transmission Engine Rear Drive Module Belt Driven Starter Generator © Linamar Corporation 58
Slide 58: Battery Electric Vehicle
Battery Electric Vehicle Battery Tray Rear Dual Motor eAxle Front Single Motor eAxle © Linamar Corporation 59
Slide 59: Fuel Cell
Fuel Cell FlexForm Rear Dual Hydrogen Tanks Motor eAxle Front Single Motor eAxle © Linamar Corporation 60
Slide 60: Structural – Any & All Vehicles
Structural – Any & All Vehicles Roof Door Brackets Frames Shock Structural Towers Body Centre Consoles © Linamar Corporation 61
Slide 61: Today & Tomorrow: Linamar has the Products!!
Today & Tomorrow: Linamar has the Products!!
Slide 62: McLaren Engineering
McLaren Engineering 5 Engineering Locations Hydrogen Fuel Tanks Engineering Products to Global Design and Development Capabilities Exceed Customer Demands Electric Truck Complex Gear Axles Technology Electrically Controlled Torque Vehicle Level Development Capabilities Management Driveline Disconnec
Slide 63: Innovation Hub (iHub)
Innovation Hub (iHub)
Slide 64: Samples of Innovation
Samples of Innovation Conformable Carbon Fibre Hydrogen Tank Robotic Random Bin Picking
Slide 65: Samples of Innovation
Samples of Innovation What if you could replace your furnace, air conditioner, and your hot water heater with 1 appliance? …And a claimed 40% to 50% reduction in utility costs © Linamar Corporation 66
Slide 66: Mission Statement
Mission Statement Skyjack proudly provides companies globally with quality engineered, simple and reliable access and telehandler equipment so that they maximize utilization and their return on investment. © Linamar Corporation 67
Slide 67: QR Activity
QR Activity © Linamar Corporation 69
Slide 68: © Linamar Corporation
© usrcHarce A> 0.17 Apr. 23, 2019 V)- 229 For: 15h 36min 7 eno: 05:08 AM Pp 2c = MODEL: $J4740, DC SCISSOR ott SERIAL: 70206831 Oo Gu Re QUICKSTART PRE-USE MANUALS CONTACT ORDER GUIDE CHECKLIST SUPPORT PARTS @ .inamar © Linamar Corporation 70
Slide 69: Elevate = Telematics
Elevate = Telematics • Elevate has revenues by $700 per machine • 2018 – 16% • 2019 – 50% • 2023 – Autonomous tasks © Linamar Corporation 71
Slide 70: Skyjack Scissor Portfolio Expands
Skyjack Scissor Portfolio Expands © Linamar Corporation 72
Slide 71: Skyjack Boom Portfolio Expands
Skyjack Boom Portfolio Expands © Linamar Corporation 73
Slide 72: Skyjack Telehandler Portfolio Expands
Skyjack Telehandler Portfolio Expands © Linamar Corporation 74
Slide 73: MacDon: Harvesting Specialist
MacDon: Harvesting Specialist Mower Conditioners FlexDraperTM Headers C Series Corn Headers M Series Windrowers Rigid Draper Headers PW8 Pickup Headers © Linamar Corporation 75
Slide 74: The FD1 FlexDraper
The FD1 FlexDraper® Active Crop Flow: Crop is gently cut and placed on the side drapers belts Crop is then fed smoothly and evenly into the combine promoting peak combine efficiency This system works in less than ideal conditions (eg. damp crop, flat laying crop, dirty crop (weeds)), allowing
Slide 75: FD1 FlexDraper
FD1 FlexDraper® True Ground Following: Header is suspended independently from the combine and flexes in three sections The entire frame, cutterbar, and reel follow ground contours as a unit Maximize crop recovery and ease of operation © Linamar Corporation 78
Slide 76: The MacDon Brand
The MacDon Brand The People | The Passion | The Product: Long history of building best-in-class harvesting equipment A customer focused organization World-class aftersales Parts & Product Support Delivering on time Through an extensive wholesale distribution network Our Dealers and Farmers
Slide 77: Technology of Tomorrow through our Products, Plants & People
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Slide 78: Customer Performance
Customer Performance DELIVERY © Linamar Corporation 83
Slide 79: Intensity of Stepping Stool – 2018 Winners
Intensity of Stepping Stool – 2018 Winners: PowerCor | LDS | Corvex © Linamar Corporation 84
Slide 80: Supplier Collaboration
. SUPPLIER COLLABORATION =" ! mitts aa , Oi t¥ © SUPPORT TEAMWORK COMMUNICATION TRUST MOTIVATION : 6 INSPIRATION SUCCESS © inamar Cornoration 85
Slide 81: Supplier Partnerships Work!!
Supplier Partnerships Work!! Opportunities to Supplier Supplier Supplier Reduce Waste Launches Quality Waste Reduction Together $267 Million $81 Million Over Last 5 Years
Slide 82: Linamar Waste Reduction Works!!
Linamar Waste Reduction Works!! CAT’s | PAT’s $ 165 Million x 3 years = Approx. ½27,616 Billion in Waste Reduction
Slide 83: Linamar Manufacturing Monitoring System
Linamar Manufacturing Monitoring System An example of Linamar’s Artificial Intelligence (AI) “Cheap Prediction adding Customer, Employee & Shareholder Value” © Linamar Corporation 88
Slide 84: Case Study WITHOUT LMMS Traceability
Case Study WITHOUT LMMS Traceability © Linamar Corporation 89
Slide 85: Customer Problem Description
Customer Problem Description Two Transmissions failed to shift gears in desired time on functional test © Linamar Corporation 90
Slide 86: Root Cause of Non-Conforming Linamar Part
Root Cause of Non-Conforming Linamar Part Parts were assembled in such a way that oil flow was restricted causing a delay in shift times © Linamar Corporation 91
Slide 87: Sort Criteria
Sort Criteria Parts could be visually inspected for assembly defect Each part must be removed from Finished Goods Dunnage, Inspected and Re-packed © Linamar Corporation 92
Slide 88: Suspect Time Period and Location
Suspect Time Period and Location Unknown Suspect Window – No Process Data Must Assume all Pipeline Product is Suspect Exposure Customer: 7,000pcs or 175 skids In Transit: 3,200pcs or 2 full trucks Internal: 18,000pcs or 450 skids © Linamar Corporation 93
Slide 89: Case Study WITHOUT LMMS Traceability – Cost Summary
Case Study WITHOUT LMMS Traceability – Cost Summary External Sorting Costs: $8,851 In Transit Sorting Costs: $4,800 Oh $72,592 Internal Sorting Costs: yeah….. Reputation. What’s that worth?? Total Cost of Poor Quality: $86,243 Time Elapsed for Certification: 6 days © Linamar Corporation 94
Slide 90: Case Study WITH LMMS Traceability
Case Study WITH LMMS Traceability © Linamar Corporation 95
Slide 91: Customer Problem Description
Customer Problem Description Two Transmissions failed to shift gears in desired time on functional test © Linamar Corporation 96
Slide 92: Root Cause of Non-Conforming Linamar Part
Root Cause of Non-Conforming Linamar Part Parts were assembled in such a way that oil flow was restricted causing a delay in shift times © Linamar Corporation 97
Slide 93: Sort Criteria
Sort Criteria According to LMMS traceability data, both failed parts found at the customer show plug install force at the top limit, all other production parts are much closer to nominal or even low limit © Linamar Corporation 98
Slide 94: Suspect Time Period and Location
Suspect Time Period and Location Four weeks of production data(100,000 parts) were analyzed from LMMS database Only 9 parts show the same top limit for plug install force Exposure Customer: 4pcs – two already found on final test as rejects In Transit: 0pcs Internal: 5pcs in 3 different s
Slide 95: Case Study WITH LMMS Traceability – Cost Summary
Case Study WITH LMMS Traceability – Cost Summary External Sorting Costs: $1,140 In Transit Sorting Costs: $0 Internal Sorting Costs: $1,980 Oh yeah….. Customer Satisfied!! Total Cost: $3,120 Time Elapsed for Certification: 4 Hours © Linamar Corporation 100
Slide 96: Technology of Tomorrow through our Products, Plants & People
Technology of tomorrow | through our Products, Plants & People ll My Ml | by \ Att NS aa at THU LITT || (\ "| Wh ® dT I) Lin rom ih.
Slide 97: Global Team Members & Numbers
Global Team Members & Numbers Global Workforce Status Global Headcount by Year 32, 0.1% 588, 2.1% 29,060 27,616 30,000 26,065 24,852 25,000 19,641 20,000 18,351 18,064 26,996, 97.8% 16,722 Active Temp Layoff Total Inactive 15,682 15,000 12,503 14,000 11,017 Global Headcount by Country 9,409 12,000 1
Slide 98: Apprentices Slide
Apprentices Slide © Linamar Corporation 103
Slide 99: E1T1 Slide
E1T1 Slide © Linamar Corporation 104
Slide 100: Training & Development
Training & Development © Linamar Corporation 105
Slide 101: Diversity Drives Results
Diversity Drives Results We want a leadership team at Linamar that reflects the communities we work in and that maximizes our access to the whole talent pool. Talent drives results and diversity maximizes talent! q $ i | | a ¢ & { Operational Launching This Year See it Be it» STEM Initiative De-bias
Slide 102: Preparing for Linamar Teammates of Tomorrow
Preparing for Linamar Teammates of Tomorrow © Linamar Corporation 108
Slide 103: One Team
One Team © Linamar Corporation 109
Slide 104: Technology of Tomorrow
Technology of Tomorrow © Linamar Corporation 110
Slide 105: A WINNING TEAM!!
A WINNING TEAM!! © Linamar Corporation 111
Slide 106: Welcome to GF Linamar
GF Linamar Welcome to GF Linamar A Joint-Venture between GF Casting Solutions & Linamar
Slide 107: Facts and Figures
+GF+ <LINAMAR Facts and Figures
Slide 108: GF Linamar Facts & Figures
GF Linamar LLC Facts & Figures Jul 2015 Aug 2016 Oct 2017 Jun 2018 Jul 2020 GF Casting Solutions & Linamar announce Official Ribbon SOP Aluminum Start Magnesium Start of the foundation of the Cutting Ceremony Lightweighting Lightweighting 50/50 joint venture Construction in Mills River Production Pr
Slide 109: GF Linamar
GF Linamar LLC GF Linamar 490 Ferncliff Park Drive Mills River, NC 28732, USA 4 GF Linamar LLC
Slide 110: Global Alliance
GF Linamar LLC Global Alliance Our world is becoming a smaller place Linamar GF Casting Solutions GF Linamar LLC 5 GF Linamar LLC
Slide 111: What is our Mission?
+GF+ <LINAMAR What is our Mission?
Slide 112: Challenges of the Automotive Industry
GF Linamar LLC Challenges of the Automotive Industry CO2 Reduction Alternative Powertrain & Sustainability Lightweight Materials Lightweight Design 7 GF Linamar LLC
Slide 113: Sustainability
GF Linamar LLC Sustainability 100% recyclability of our Aluminum and Magnesium die-casting products Latest technologies and leading expertise Continuous contribution to light-weighting LEED certification for our new facility in Mills River, NC 8 GF Linamar LLC
Slide 114: We provide ready-to-mount solutions
GF Linamar LLC We provide ready-to-mount solutions Casting CNC machining Heat treatment Neues Bild E-coating & Passivation Assembly 9 GF Linamar LLC
Slide 115: Product Scope
GF Linamar LLC Product Scope Powertrain Large housings like transmission cases, converter housings, e-motor housings & engine blocks Structural Parts Structural parts: Shock towers, CCBs, hang-on parts like door frames, battery housings, center consoles 10 GF Linamar LLC
Slide 116: Future Outlook
GF Linamar LLC Future Outlook PHASE 2 PHASE 1 Extension PHASE 1B 11 GF Linamar LLC
Slide 117: Phase 1B: Mach.& Assembly Ext.
GF Linamar LLC Phase 1B: Mach.& Assembly Ext. 12 GF Linamar LLC
Slide 118: Thank you!
Thank you! A Joint-Venture between GF Casting Solutions & Linamar
Slide 119: Disclaimer
Disclaimer This document is for presentation The management of GF Linamar does purposes only and should not be not accept any liability whatsoever with construed as an offer, invitation or respect to the use of this presentation. solicitation to subscribe for, purchase or sell any investment. Neithe
Slide 120: Financial Update
Financial Update Dale Schneider CFO
Slide 121: Strong, Consistent Track Record
Strong, Consistent Track Record Sales Growth Normalized OE¹ Growth³ 20.0% 20.0% 18.0% 18.0% 16.0% 16.0% 14.0% 14.0% 12.0% 12.0% 10.0% 10.0% 8.0% 8.0% 6.0% 4.0% 6.0% 2.0% 33.0% 28.4% 12.6% 11.6% 16.0% 23.8% 16.3% 9.0% 16.4% 4.0% 0.0% 2.0% 789.8% 20.0% 39.5% 39.1% 45.3% 31.6% 15.5% 7.6% 10.8% 2010 201
Slide 122: Consistent Sales Growth
Consistent Sales Growth 8,000 2018 Sales ↑ 16.4% CAGR (2012 to 2018) ↑ 15.4% 7,000 25-YR CAGR ↑ 14.0% 6,000 5,000 $ Millions 4,000 3,000 2,000 1,000 0 Annual Results © Linamar Corporation 114
Slide 123: Consistent Normalized Operating Earnings Growth
Consistent Normalized Operating Earnings Growth¹ 900 2018 OE Norm¹ ↑ 10.8% 18.0% 800 CAGR (2012 to 2018) ↑ 24.2% 16.0% 25-YR CAGR ↑ 15.5% 700 14.0% 600 12.0% $ Millions 500 10.0% 400 8.0% 300 6.0% 200 4.0% 100 2.0% 0 0.0% Annual Results Norm OE as a % of Sales 1Operating Earnings Normalized for unus
Slide 124: Investing in the Future
Investing in the Future Operational Capital Expenditures 600 18.0% 500 15.0% 400 12.0% $ Millions 300 9.0% 200 6.0% 100 3.0% 0 0.0% Annual Results Capex as a % of Sales Capex as % of Sales – Normal Zone to Drive Double Digit Growth 6-8% of Sales © Linamar Corporation 116
Slide 125: Consistently Strong Balance Sheet
Consistently Strong Balance Sheet Net Debt to Proforma EBITDA 1 3.0x 2.5x 2.0x 1.5x 1.0x 0.5x 0.0x Net Debt x Proforma EBITDA¹ Target ¹Proforma EBITDA includes last 12 months rolling EBITDA on acquisitions after 2015. © Linamar Corporation 117
Slide 126: Solid Return Performance
Solid Return Performance Return on Equity 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% Annual Results Target © Linamar Corporation 118
Slide 127: Excellent Performance Consistently
Excellent Performance Consistently Sales Normalized Operating Earnings¹ CAGR (2012 to 2018) ↑ 15.4% CAGR (2012 to 2018) ↑ 24.2% Net Debt to Proforma EBITDA² Return on Equity 1Operating Earnings Normalized for unusual items and foreign exchange impacts from revaluation of the balance sheet ²Proforma
Slide 128: Linamar 2019 Consensus Growth Expectation Coupled with Low Valuation
Linamar 2019 Consensus Growth Expectation Coupled with Low Valuation Major Buy Opportunity Net Earnings Adjusted¹ Margin % 2X PE Multiple < 5% Growth in 2019 With Low PE AA Multiple 5% to 7.4% 4X >7.5% 6X Linamar Martinrea '18 Actuals to Consensus '19 Earnings Growth Nemak Meritor Dana -25% -20% -15
Slide 129: Conclusion
Conclusion Linda Hasenfratz © Linamar Corporation 121
Slide 130: Key Investment Themes
Key Investment Themes Massive Market Focus on our Consistent Strong Free Cash Flow 2019 Earnings Growth Opportunity in All Shareholders Performance Expected in 2019 Leads Many Peers Businesses History of growth MacDon growth Earnings up, capex Consensus earnings NCIB returning cash to desp
Slide 131: Q&A
Q&A
Slide 132: Tour Groups
Tour Groups INVESTORS SUPPLIERS EMPLOYEES Front The Centre Tech. Hall You are here Rear © Linamar Corporation 124
Slide 133: Thank You
Thank You @linamarcorp @linamarcorp Linamar Corporation www.linamar.com Linamar Corporation