Linamar Corporation Business Report FY ended Dec. 2019

Financial Overview

(in million CAD)

	FY ended Dec. 31, 2019	FY ended Dec. 31, 2018	Rate of change (%)	Factors
Overall
-Net Sales	7,416.6	7,620.6	(2.7)	-
-Operating Income	624.5	819.9	(23.8)	-
Transportation Segment
-Net Sales	5,636.0	5,734.3	(1.7)	1)
-Operating Income	388.2	473.7	(18.0)	-

Factors
1) Transportation segment sales
-In the fiscal year ended December 31, 2019, sales in the Company’s Transportation segment decreased by 1.7% compared to the previous year to CAD 5,636.0 million. The factors are as follows;

A reduction in sales as a result of the United Auto Workers Union strike at General Motor's US locations that continued into Q4 2019;
A reduction of sales related to certain programs that are naturally ending;
An overall reduction in passenger vehicle volumes in three key markets and in medium-duty and heavy-duty trucks in North America;
An unfavorable impact on sales from the changes in foreign exchange rates from Q4 2018 (there was a favorable impact on sales from the changes in foreign exchange rates for the first nine months of the year).

-Additional sales from programs that are currently launching partially offset the above effects.

R&D Activity

-Key technologies related to lightweight solutions, innovation in design, development and manufacturing, and green and connected vehicles are as follows:

Lightweight Solutions
-The Company produces the following lightweight solutions that achieve increased fuel efficiency and CO2 reduction;

High pressure die-casting for structural components (weight reduction of 45 percent compared to conventional sheet metal solutions);
Adapting forged gear designs and processes to achieve near net shape

Innovation in design, development and manufacturing
-The Company provides the following cost-effective solutions to OEMs:

Fully integrated eAxle systems for hybrid and electric vehicles
Integrated hydroformed assembled camshaft within one-piece cast aluminum carrier housing with unique-to-Linamar manufacturing process

Green and connected vehicles
-The Company is developing the following solutions;

Vehicle to vehicle communication for smart all wheel drive capabilities delivering information over dedicated short-range communication
Engineering & manufacturing next-generation hydrogen storage tank for alternative fuel solutions