Martinrea International Inc Q1 2019 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Mark Neville - Scotiabank Global Banking and Markets, Research Division - Analyst : I just want to clarify a couple of things that Pat said about the Rest of World. So you have made the decision to restructure in Brazil and sort of studying China or sort of just waiting a little bit, is that what you said, sir?

Question: Mark Neville - Scotiabank Global Banking and Markets, Research Division - Analyst : Okay. So by end of quarter, okay, before you make the decision. Okay. That makes sense. Just if you do the restructuring, if it's necessary, I'm just curious how quickly you think the Rest of World could get back to, call it, breakeven results.

Question: Mark Neville - Scotiabank Global Banking and Markets, Research Division - Analyst : Okay. And on the 2019 sales guidance, just to be clear, you said up. Is that production sales or the tooling sales?

Question: Mark Neville - Scotiabank Global Banking and Markets, Research Division - Analyst : I guess to that point, there was a tougher Q1 macro. You had a good quarter. The Q2 guidance looks pretty good. The '19 margin guidance, I mean, you're basically there. But when I look to 2020, you're still down 100 basis points, I guess, in the guidance to bridge. If we're talking about a 4% or 5% volume decline in '19 and '20, I'm just curious as to how much risk you see to that margin guide for next year, again, assuming we see similar sort of declines through the next 1.5 years, call it.

Question: Mark Neville - Scotiabank Global Banking and Markets, Research Division - Analyst : Yes. No. Okay. Agreed. And maybe just one last one for Fred. On IFRS, a lot of numbers, I just want to make sure I got them. EBITDA, up about $8

Question: Peter Sklar - BMO Capital Markets Equity Research - Analyst : Pat, like you -- when you look at your segmented businesses, the North American operations are just doing particularly well. From a very high level, like what is your sense that's been going on there? Is it the ongoing lean programs that have been implemented over the last number of years? Or is it the favorable platform exposure or smooth launch? Like, what are kind of the key factors that are behind that strong performance?

Question: Peter Sklar - BMO Capital Markets Equity Research - Analyst : Okay. And then my next question is -- just wondering if you have any views. North American sales production are tailing off a little bit. Inventories -- dealership inventories were at record highs. And what's interesting though is that the OEMs are really not incentivizing the vehicles. If you look, your average incentive per vehicle is still in decline. So just wondering if you have any thoughts of how that's going to play out. Are they going to cut production? Or are they going to increase the incentives to clean up some of this imbalance? I'm just wondering, in your discussions with the OEMs, if that kind of issue has ever come up and if you have any views.