📅 May 08, 2025BNN Bloomberg9 MIN12 SEGMENTS · 3 SPEAKERS
Linda Hasenfratz, executive chair at Linamar, discusses earning results in Q1 and the impact tariffs are having on the ...
Questions asked in this interview
4
0:05I applaud your team for strong execution in a tricky start to the year. Could you explain further?
2:04Are we seeing it impact consumer spending or the economy?
5:06So a month later, is that still the company's view?
7:44As a corporate leader in Canada, what do you, what does your company want to see the federal government of Canada accomplish with respect to our relations with the United States?
Ontario-based auto parts giant Linamar has reported first-quarter results that show its parts are compliant with the Canada-U.S.-Mexico agreement, which is a big topic on investors' minds. Let's discuss the results and the outlook with Linda Hasenfratz, Executive Chair of Linamar, who joins us now. Linda, thanks for joining. There was growth in operating earnings margins, diluted earnings per share, and a modest decline in revenue. I applaud your team for strong execution in a tricky start to the year. Could you explain further?
Absolutely, well, it's obviously been a challenging start to the year with a myriad of different tariffs being announced. I'm pretty thrilled with where we are. As you noted, our parts on the mobility side, our products in our industrial businesses are all USMCA compliant. We're very happy that the USMCA agreement is still being respected and that if you are complying, you can still ship tariff-free. So that's a big advantage for us. At the same time, our global teams are very focused on operational improvements, cost improvements in a tough environment. The markets are soft, markets are down, that's why sales are down a little bit. Happily, market share is growing, so that's despite the soft market. And all that work on the operational side is healthy and drives earnings growth. So I feel very good about it. Okay, Colin Cieszyński will...
Thank you, Linda. These are fantastic numbers. And I think also, given an increased dividend in this environment is great news as well. And we wanted to ask, generally speaking, on a more broad basis, how are you seeing the environment, the demand for automotive and for other products, with it moving through the current tariff struggles with the U.S.? Are we seeing it impact consumer spending or the economy?
Yeah, I mean, there's certainly markets are down in North America and Europe on the automotive side. So markets are down about 6% over last year in North America, 7% down in Europe. So the market has definitely softened off. It is a little better than what we expected. We were expecting the market to be soft in the first quarter, but it was a little better than what we thought it would be. So that's a plus. We're continuing to see very weak volumes at the same time. On the industrial side of the house, again, markets were already down, and then the access market was down quite a bit last year. So if close, well, market and we were expecting the markets to be down this year as they are. So I don't know that I can blame tariffs. I'm sure it's exacerbating the situation, but markets were already anticipated to be down. So, you know, it's playing pretty as expected. As I say, the key to managing that is really growing in market share. So you can't do product in a small market thing, you can offset sales, which is why our sales didn't go down as much as the market.
Just remind our viewers, Linda, what the industrial segment at Linamar is. The company gets considered an interesting shorthand as an auto parts maker, but the company does other things besides that. And those other things are in the section that you call the industrial section, while the mobility segment is the auto parts piece. Just to briefly explain the industrial segment.
6 more exchanges in this transcript
Sign in free to read the rest of this interview. No card required.
