Ms. Linda Hasenfratz reports

EARNINGS NEARLY DOUBLE AT LINAMAR IN FIRST QUARTER 2023 ON RECOVERING MARKETS, SUPPLY CHAINS AND LAUNCHING BUSINESS, NEW GIGA STRUCTURAL FACILITY ANNOUNCED

Linamar Corp. has released its Q1 2023 results.

Highlights:

• Normalized earnings per share up 83.3 per cent;
• Sales up 28.9 per cent to $2.29-billion, a new record for a quarter;
• Diversified strategy validated with strong industrial performance leading the way on strong earnings performance;
• Normalized net earnings up 71.7 per cent;
• New Giga structural component facility for electric vehicles announced for Ontario;
• New business wins take launch book to nearly $4.2-billion;
• Nearly 80 per cent of wins for propulsion agnostic/electrified vehicles;
• Sales up 58.9 per cent for industrial due to strong markets and solid market share growth notably in the company's agricultural products;
• Sales up 21.1 per cent for mobility driven largely by launching programs;
• Another new record in content per vehicle (CPV) achieved in North America; and
• Strong liquidity, measured as cash and cash equivalents, and available credit as at March 31, 2023, of $1.3-billion.

Giga structural component facility

Linamar is launching a new, state-of-the-art Giga casting facility which will be built in Welland, Ont. The facility will be producing very large structural parts for electric vehicles and will start production in February of 2025. The equipment for the facility will be very large, 6,100-ton high-pressure die-cast machines which are critical to efficiently lightweighting and simplifying complex assemblies for electrified vehicles. Linamar will be the first Tier 1 supplier outside of Asia to invest in this technology of the future.

"We are excited about the investment in Welland for this state-of-the-art facility critical to the future of electrified vehicles," said Linda Hasenfratz, Linamar chief executive officer. "As the first supplier to invest in this equipment in North America, Linamar will naturally take a market leadership position in this technology."

Frank Campion, Welland's mayor, adds: "We are thrilled to have attracted this significant new investment to Welland. Linamar's presence in our community signals the next wave of investment in our local economy and is a testament to the progressive steps Welland is taking. As a globally recognized automotive supplier and proud Canadian employer, Linamar's Welland-based employees will supply advanced components for the zero-emissions vehicles of the future from this new state-of-the-art facility. We are excited to welcome Linamar to Welland."

"Giga castings are the next step in the evolution of our high-pressure die-casting strategy," said Jim Jarrell, Linamar's president and chief operating officer. "The Welland Giga casting facility will have capabilities few companies in the world possess. There is an increasing trend of cast aluminum being used in vehicle architectures, particularly BEVs [battery electric vehicles]. Structural aluminum castings offer an alternative to traditional steel stamping and weldments, creating a less complex and more lightweight solution for OEMs [original equipment manufacturers]."

Operating highlights

Sales for the first quarter of 2023 (Q1 2023) were $2,292.7-million, up $514.6-million from $1,778.1-million in the first quarter of 2022 (Q1 2022).

The industrial segment product sales increased 58.9 per cent, or $216.8-million, to $585-million in Q1 2023 from Q1 2022. The sales increase was due to:

• An increase in agricultural sales from market growth, further improved by global market share growth in all core products;
• Increased sales related to the acquisition of the Salford Group of Companies;
• Additional access equipment sales primarily due to increased market volumes, in addition to market share growth for certain targeted products and regions;
• Increased pricing to help relieve increased supply chain costs; and
• A favourable impact on sales from the changes in foreign exchange rates from Q1 2022.

Sales for the mobility segment increased by $297.8-million, or 21.1 per cent in, Q1 2023 compared with Q1 2022. The sales in Q1 2023 were impacted by:

• Increased sales related to launching programs and increased volumes for certain programs that the company has significant business with;
• Increased pricing related to cost recovery, partially offsetting the associated labour, utilities, materials and freight;
• A favourable impact on sales from the changes in foreign exchange rates from Q1 2022;
• Increased sales related to the acquisition of the remaining 50-per-cent interest of GF Linamar LLC, now known as Linamar Light Metals Mills River (LLM Mills River);
• Partially offset by a sales decline in Asia, primarily attributed to lower production as a result of additional COVID-19 outbreaks.

The company's normalized operating earnings for Q1 2023 were $175.8-million. This compares with normalized operating earnings of $106.5-million in Q1 2022, an increase of $69.3-million.

Industrial segment normalized operating earnings in Q1 2023 increased $84.1-million from Q1 2022. The industrial normalized operating earnings results were predominantly driven by:

• An increase in agricultural sales volumes and pricing;
• An increase in access equipment sales volumes and pricing;
• Increased sales related to the acquisition of Salford;
• A favourable impact from the changes in foreign exchange rates from Q1 2022;
• Partially offset by an increase in selling, general and administrative (SG&A) costs supporting growth.

Q1 2023 normalized operating earnings for mobility were lower by $14.8-million, or 15.9 per cent, compared with Q1 2022. The mobility segment's earnings were impacted by the following:

• Increased sales related to launching programs and increased volumes for certain programs that the company has significant business with;
• A favourable impact from the changes in foreign exchange rates from Q1 2022;
• Offset by a sales decline in Asia, primarily attributed to lower production as a result of additional COVID-19 outbreaks;
• Reduction in earnings related to the acquisition of LLM Mills River;
• Increased costs related to labour, utilities, materials and freight, partially offset by customer cost recovered in sales; and
• An increase in SG&A costs supporting growth.

"Q1 was an exceptional quarter of excellent earnings growth, sales growth and market share growth. Our industrial business had a particularly strong quarter on improving supply chains and continued strong market demand -- evidence our diversified growth strategy is producing the consistent sustainable earnings we target," said Ms. Hasenfratz, Linamar executive chair and CEO. "Our newly announced Giga casting facility is the latest technology add to our portfolio of products for electrified vehicles, which is rapidly changing the landscape of our mobility business. Booked propulsion agnostic/electrified sales are now representing the majority of booked business in 2027. With an eye to continued improvements in terms of supply chain and cost issues as we move through the year, we are looking forward to another year of growth in earnings in both the mobility and industrial segments, and significant double digit growth overall for 2023."

Dividend

The board of directors today declared an eligible dividend in respect to the quarter ended March 31, 2023, of 22 cents per share on the common shares of the company, payable on or after June 7, 2023, to shareholders of record on May 26, 2023.

Conference call information

Q1 2023 release information

Linamar will hold a webcast call on May 10, 2023, at 5 p.m. ET to discuss its first quarter results. The event will be simulcast and can be accessed at the company's website. For those who wish to listen to an audio-only call-in option, the numbers for this call are: 1-888-396-8049 (North America) or 1-416-764-8646 (international), using conference ID 04628605, with a call-in required 15 minutes prior to the start of the webcast. The conference call will be chaired by Ms. Hasenfratz, Linamar's executive chair and chief executive officer. A copy of the company's quarterly financial statements, including the management's discussion and analysis, will be available on the company's website after 4 p.m. ET on May 10, 2023, and at SEDAR by the start of business on May 11, 2023. The webcast replay will be available at the company's website after the call. A taped replay of the conference call will also be made available starting at 8 p.m. ET on May 10, 2023, for seven days. The number for the replay is 1-877-674-7070 or 1-416-764-8692, passcode: 628605 followed by the pound key. In addition, a recording of the call will be posted at the company's website.

Q2 2023 release information

Linamar will hold a webcast call on Aug. 9, 2023, at 5 p.m. ET to discuss its second quarter results. The event will be simulcast and can be accessed at the company's website. For those who wish to listen to an audio-only call-in option, the numbers for this call are: 1-888-396-8049 (North America) or 1-416-764-8646 (international), using conference ID 73928638, with a call-in required 15 minutes prior to the start of the webcast. The conference call will be chaired by Ms. Hasenfratz, Linamar's executive chair and chief executive officer. A copy of the company's quarterly financial statements, including the management's discussion and analysis, will be available on the company's website after 4 p.m. ET on Aug. 9, 2023, and at SEDAR by the start of business on Aug. 10, 2023. The webcast replay will be available at the company's website after the call. A taped replay of the conference call will also be made available starting at 8 p.m. ET on Aug. 9, 2023, for seven days. The number for the replay is 1-877-674-7070 or 1-416-764-8692, passcode: 928638 followed by the pound key. In addition, a recording of the call will be posted at the company's website.

About Linamar Corp.

Linamar is an advanced manufacturing company where the intersection of leading-edge technology and deep manufacturing expertise is creating solutions that power vehicles, motion, work and lives for the future. The company is made up of two operating segments -- the industrial segment and the mobility segment, both global leaders in manufacturing solutions and world-class developers of highly engineered products. The industrial segment comprises Skyjack, MacDon and Salford. Skyjack manufactures scissor, boom and telehandler lifts for the aerial work platform industry. MacDon manufactures combine draper headers and self-propelled windrowers for the agricultural harvesting industry. Salford also supplies the agriculture market with farm tillage and crop fertilizer applicator equipment. The mobility segment is subdivided into three regional groups: North America, Europe and Asia Pacific. Within the mobility segment, the regional groups are vertically integrated operations combining expertise in light metal casting, forging, machining and assembly for both the global electrified and traditionally powered vehicle markets. The mobility segment products are focused on both components and systems for new energy powertrains, body and chassis, driveline, engine, and transmission systems of these vehicles. In addition to the recently formed eLIN Product Solutions Group that focuses on electrification, McLaren Engineering provides design, development and testing services for the mobility segment. Linamar's recently announced medical solutions group, Linamar MedTech, focuses on manufacturing solutions for medical devices and precision medical components. Linamar has over 28,000 employees in 66 manufacturing locations, 14 research and development centres, and 28 sales offices in 17 countries in North and South America, Europe, and Asia, which generated sales of more than $7.9-billion in 2022.

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