Linamar eyes growth outside of North America, posts 21 percent rise in sales
By The Canadian Press
By The Canadian Press
Linamar Corp. said it is turning a greater focus to markets outside of North America as the Ontario-based auto parts manufacturer posted stronger fourth-quarter results.
Contracts are picking up in Europe and Asia, although the big three Detroit automakers continue to be important customers, CEO Linda Hasenfratz told a conference call to discuss the company’s latest financial results.
During the fourth quarter, Linamar’s net income rose to $27 million, or 42 cents per share, on $718 million of sales.
During the same period a year earlier, net income was $21.4 million, or 33 cents per share, on sales of $593.7 million.
It said the automotive segment’s sales increased by $88.1 million, or 15.8 percent, to $647 million, as a result of new manufacturing programs and higher volumes.
Sales at its industrial equipment segment more than doubled to $71 million, with an increase of $36.2 million.
Growth outside of North America is a priority as emerging markets post strong economic growth, ushering in a new middle class that is eager to buy vehicles, Hasenfratz said.
“To that end, almost 30 percent of new business wins in 2011 were outside of North America, with two-thirds of that being Asia,” she said.
“Asia is by far the dominant market for vehicle production, meaning we will continue to prioritize growth in this region.”
Business in hand will triple Linamar’s presence in Europe over the next five years — “an important element in offsetting any market weakness given uncertainty in that region,” she added.
Guelph, Ont.-based Linamar, which ranks second to Magna International among Canadian auto parts makers, manufactures highly engineered modules and systems for engines, transmissions and driveline systems in cars and trucks. The company also makes components for other industrial customers, including the wind energy industry.
“We continue to strategize toward diversifying our business and tapping into exciting markets outside of the automotive sector,” Hasenfratz said.
Linamar has more than 15,200 employees in 39 manufacturing plants and other centres around the world, and generated sales of more than $2.2 billion last year.