Linamar Corporation · TSX:LNR

Linamar — Q4 2016 Earnings Presentation

44 slides from Linamar's earnings presentation, March 2017

  1. Slide 1: Q4 2016 Investor Presentation

    Q4 2016 Investor Presentation Linamar Corporation March 2017

  2. 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 exp

  3. Slide 3: Company Overview

    Company Overview

  4. Slide 4: Linamar – A Global Powerhouse in Diversified Manufacturing

    Linamar – A Global Powerhouse in Diversified Manufacturing 2015 SALES: $5,162.4M ↑ 23.8% 2016 SALES: $6,005.6M ↑ 16.3% NE: $436.7M (8.5%) ↑ 36.2% NE - ATS: $522.1M (8.7%) ↑ 19.6% Diversified Manufactured Products that Power Vehicles, Motion, Work and Lives 24,500 EMPLOYEES 57 MANUFACTURING FACILITIE

  5. Slide 5: Core Capabilities

    Core Capabilities MACHINING & LIGHT METAL FORGING METAL FORMING ASSEMBLY CASTING • CNC Expertise • Hatebur High Speed Hot • Gravity & Low Pressure • Metal Forming • Complex Assemblies Horizontal Forging Aluminum Die Casting • Stamping • Advanced Automation • Conventional Vertical Forging • High Pres

  6. Slide 6: Key Products

    Key Products © Linamar Corporation 6

  7. Slide 7: Scope of Operations & Market Concentration

    Scope of Operations & Market Concentration Q4 2016 YTD SECTOR PRODUCTS MARKETS TOTAL PRECISION PRODUCTS 85.0% Precision Metallic Components, Modules & Systems Engine 76.2% Automotive Transmission 2.7% Off Road Vehicles Hybrid Electric Systems 3.9% Commercial Truck Driveline 0.7% Recreational Axle Tr

  8. Slide 8: Global Presence

    Global Presence UNITED KINGDOM FRANCE GERMANY HUNGARY BULGARIA CANADA Manufacturing Manufacturing Manufacturing Manufacturing Manufacturing Manufacturing Facilities (1) Facilities (4) Facilities (7) Facilities (4) Facilities (1) Facilities (23) SPAIN 49 Facilities with TS16949 Manufacturing 13 Facil

  9. Slide 9: Key Investment Themes

    Key Investment Themes

  10. Slide 10: Key Investment Themes

    Key Investment Themes Consistent Performance • Sales & earnings growth consistent & well above market • Q4 2016 our 22nd consecutive quarter of double digit operating earnings growth Market Share Growth Key Growth Driver • We will continue to grow through “Peak Auto” Double Digit Growth in Sight Thr

  11. Slide 11: Consistent Performance

    Consistent Performance

  12. Slide 12: Performance Highlights

    Performance Highlights Q4 2016  Competitiveness  NBW and quote level continues to build  Launch book at nearly $4.8 Billion  2016 NBW 26% higher than 2015 – great market momentum  Hit rate trending up  Significant wins this quarter in 9 and 10 speed transmission components ($250 million), tran

  13. Slide 13: Yearly Sales Growth 2012 - 2016

    Yearly Sales Growth 2012 - 2016 6,500 6,005.6 6,000 5,500 5,162.4 5,000 4,500 4,000 $ Millions 3,500 3,000 2,500 2,000 1,500 1,000 500 3,221.9 3,595.5 4,171.6 5,162.4 6,005.6 1,243.0 1,374.8 0 2012 2013 2014 2015 2016 Q4 YTD Q4 YTD 2015 2016 Annual Results Current Quarter © Linamar Corporation 13

  14. Slide 14: Net Earnings Attributable to Shareholders 2012 - 2016

    Net Earnings Attributable to Shareholders 2012 - 2016 600 30.0% 522.1 500 25.0% 436.7 400 20.0% $ Millions 300 15.0% 200 8.5% 8.7% 8.5% 8.7% 10.0% 7.7% 6.4% 4.5% 100 5.0% 146.1 229.8 320.6 436.7 522.1 95.3 116.1 0 0.0% 2012 2013 2014 2015 2016 Q4 YTD Q4 YTD 2015 2016 Annual Results Current Quarter N

  15. Slide 15: Market Share Growth

    Market Share Growth

  16. Slide 16: New Business Driving Strong Market Share Growth Globally

    New Business Driving Strong Market Share Growth Globally Content per Vehicle 2012 – 2016 Europe $70 $60 $50 $40 $30 $20 North America $10 $165 12.24 14.45 19.84 39.47 63.60 $0 $155 2012 2013 2014 2015 2016 $145 $135 $125 Asia $115 $9.00 $105 $8.00 $95 $7.00 $85 121.35 125.15 130.57 150.37 153.82 $6.

  17. Slide 17: Skyjack Market Share Penetration – A Case Study

    Skyjack Market Share Penetration – A Case Study Telehandler NA Market Share Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Tele (NA only) © Linamar Corporation 17

  18. Slide 18: Significant Business Launching

    Significant Business Launching Securing Continued Growth

  19. Slide 19: Launch Review – Q4 2016

    Launch Review – Q4 2016 Launching nearly $4.8 billion of new work today Sales in Millions Sales in Millions Transmission Engine Driveline Other - 500 1,000 1,500 2,000 2,500 3,000 2015 2016 2017 Mature © Linamar Corporation 19

  20. Slide 20: Launch Review – Q4 2016

    Launch Review – Q4 2016 Launching nearly $4.8 billion of new work today Sales in Millions North America Europe Asia Pacific - 500 1,000 1,500 2,000 2,500 3,000 3,500 2015 2016 2017 Mature © Linamar Corporation 20

  21. Slide 21: Launch Review – Q4 2016

    Launch Review – Q4 2016 Sales in Millions 4,000.00 3,500.00 3,000.00 2,500.00 2,000.00 1,500.00 1,000.00 500.00 - 2015 2016 2017 2018 2019 2020 2021 Driveline Other Engine Transmission Launches will add $600 to $700 Million in 2017 • Offsetting launching sales is business leaving each year of 5-10%

  22. Slide 22: Outlook Strong for the Future

    Outlook Strong for the Future Q4 2016 Sales by Region 10,000 9,000 Target 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 - 2011 2016 2021 Actual Actual Estimate North America Europe Asia Target - Business to be Booked © Linamar Corporation 22

  23. Slide 23: Massive Opportunity in Outsourcing in all Propulsion Types

    Massive Opportunity in Outsourcing in all Propulsion Types

  24. Slide 24: Massive Opportunity in Outsourcing in all Propulsion Types

    Massive Opportunity in Outsourcing in all Propulsion Types  Significant content potential in both EV and ICE  70% of content of powertrain captive but slowly being outsourced  $500 Billion global market, addressable portion growing each year  Linamar technology leader in light weighting, noise r

  25. Slide 25: Powertrain Target Markets Significant and Growing

    Powertrain | Target Markets Significant and Growing TOTAL GLOBAL POWERTRAIN & DRIVETRAIN MARKET MARKET 2013 2016 2019 AUTOMOTIVE $319B $373B $407B ICE $142B $170B $201B TOTAL GLOBAL MARKET $461B $543B $608B Segmentation by System Assumptions: Drivers of Outsourcing: 36% 43% - Includes total system v

  26. Slide 26: Outsourcing Evolution – A Case Study

    Outsourcing Evolution – A Case Study 4 Speed 6 Speed 9 & 10 Speed  Linamar produced single, build-to-  Initial outsourcing to Linamar of  Complex Rear Drive Clutch print, transmission shafts which the Full Clutch Module Assembly by an Module Assembly OEM assembled into a module OEM  Outsourced b

  27. Slide 27: Industry Imperative

    INDUSTRY IMPERATIVE Reduce Emissions Improve Fuel Economy Short Term Medium Term Long Term Improve ICE Hybrid Battery Electric Vehicle (BEV) 30x less emissions in ICE today vs. 30 Good utilization of balance of power on Challenge today re energy years ago board means best overall infrastructure mean

  28. Slide 28: Primarily ICE, Growing Hybrid

    NA Vehicle Propulsion Through 2023 Primarily ICE, Growing Hybrid 20,000,000 18,000,000 16,000,000 14,000,000 12,000,000 10,000,000 8,000,000 6,000,000 4,000,000 2,000,000 0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Hybrid Electric ICE Source: IHS, February 2017 © Linamar

  29. Slide 29: Content Today on Electrified Vehicles Growing Quickly

    Content Today on Electrified Vehicles Growing Quickly NA CPV By Propulsion Type – Q4 2016 $180.00 $160.00 $140.00 $120.00 $100.00 Hybrid $80.00 ICE $60.00 $40.00 $20.00 $0.00 2015 2016 2017 2018 2019 © Linamar Corporation 29

  30. Slide 30: BEV – Why Not Faster?

    BEV – Why Not Faster? Technical & Infrastructure Challenges Energy Infrastructure Must Change for EV to Make Meaningful Environmental Improvement Projected 2030 Vehicle WtW GHG Emissions and Petroleum Fuel Consumption Over Combined, Adjusted HWFET/FTP Drive Cycle 300 10.00 Gap Diesel ICE to Battery

  31. Slide 31: Still Primarily ICE, BEV Becoming More Prevalent

    Vehicle Propulsion 2050 Still Primarily ICE, BEV Becoming More Prevalent Source: Bloomberg New Energy Finance - February 25, 2016 © Linamar Corporation 31

  32. Slide 32: Addressable Market -- Gradual EV Growth

    Addressable Market -- Gradual EV Growth Total Addressable Market -- Gradual EV Growth $400,000,000,000 $350,000,000,000 $300,000,000,000 $250,000,000,000 $200,000,000,000 $150,000,000,000 $100,000,000,000 $50,000,000,000 Key driver of growing addressable market is increase in % outsourced $- * Based

  33. Slide 33: Addressable Market – Hypothetical Accelerated EV Growth Model

    Addressable Market – Hypothetical Accelerated EV Growth Model Propulsion Type 120,000,000 100,000,000 80,000,000 Units of Vehicles 60,000,000 40,000,000 20,000,000 - CY CY CY CY CY CY CY CY CY CY CY CY CY CY CY CY CY CY CY CY CY CY CY CY CY CY CY CY 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

  34. Slide 34: Addressable Market – Hypothetical Accelerated EV Growth Model

    Addressable Market – Hypothetical Accelerated EV Growth Model Total Addressable Market -- Hypothetical Accelerated EV Growth $350,000,000,000 $300,000,000,000 $250,000,000,000 $200,000,000,000 $150,000,000,000 $100,000,000,000 Faster EV growth overtakes ICE potential while outsourcing % still low fo

  35. Slide 35: Linamar Positioned for Superior Growth

    Linamar Positioned for Superior Growth Technical Leadership & Vertically Integrated Global Footprint Scale & Financial Capacity to Invest © Linamar Corporation 35

  36. Slide 36: Vertical Integration Strategy – Key To Innovation Agenda & Competitiveness

    Vertical Integration Strategy – Key To Innovation Agenda & Competitiveness Optimize light weight solutions for customers through collaborative design Offer one stop shopping for customers to optimize cost, quality and technology Create additional revenue streams and open doors to new customers Grow

  37. Slide 37: Technical Leadership

    Technical Leadership  Product Innovation  Leader in AWD systems  Leader in Vehicle Electrification with E-Axle product  Motorless PTU Disconnect System PTU  V2V AWD Communication  Process Innovation Asphalt  Hydroformed camshafts, reduce weight 60%  Material Development RDU  Cast aluminum s

  38. Slide 38: Massive Growth Outsourcing at Skyjack

    Massive Growth Outsourcing at Skyjack

  39. Slide 39: Access – Target Markets Large with Limited Competition

    Access – Target Markets Large with Limited Competition Skyjack Target US $1Billion by 2020 2016 Global Market Est $7.5 Billion MANITOU Haulotte JLG SKYJACK GENIE Skyjack Internal Estimates © Linamar Corporation 39

  40. Slide 40: Skyjack Growth Strategy

    Skyjack Growth Strategy Overview  Maintain and Defend Scissor Share….  98% coverage by product type by 2020  Grow Boom Products…  95% coverage by product type by 2020  Competitive Telehandler Offering…  94% coverage in NA by 2020 © Linamar Corporation 40

  41. Slide 41: Innovation Priorities: Safe, Simple, Reliable

    Innovation Priorities Safe Simple Reliable © Linamar Corporation 41

  42. Slide 42: Key Themes for Long Term Growth

    Key Themes for Long Term Growth Diversified Manufactured Products that Power Vehicles, Motion, Work and Lives Manufacturing and Materials (Supporting Power Transportation Food Theme for all Trends) Global Addressable Markets: Global Addressable Markets: Global Addressable Market: Electrical products

  43. Slide 43: Innovative Thinking Driving Performance Today and Tomorrow

    Innovative Thinking Driving Performance Today and Tomorrow A Global Manufacturing Powerhouse:  Forging, casting, machining, fabrication & assembly expertise  Strong R&D capabilities  Diversified markets with global footprint  Solid markets with limited competition Sound Strategy:  Leverage exis

  44. Slide 44: Thank You

    Thank You @linamarcorp @linamarcorp Linamar Corporation www.linamar.com Linamar Corporation

Linamar — Q4 2016 Earnings Presentation on 6ix