Martinrea International Inc Q4 2018 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 : First, maybe just -- you took an impairment charge in the quarter, closing a facility in Ontario. I'm just curious, just with known announcements, is there any further actions or restructuring that you'll need to do?

Question: Mark Neville - Scotiabank Global Banking and Markets, Research Division - Analyst : Okay. And maybe on the $4 billion revenue, it's about 9% growth, I think, versus '18. I guess, I just have a bit of a challenge getting in there, just given some of the volume headwinds in the industry. So just curious, again, you touched on it earlier, but just a visibility, your assumptions around industry volumes? Yes.

Question: Mark Neville - Scotiabank Global Banking and Markets, Research Division - Analyst : Okay. And on the margin, the 8% to 9%, again, you sort of touched on it earlier, but, I mean, at this point, should we expect most of the improvement to come outside of North America?

Question: Mark Neville - Scotiabank Global Banking and Markets, Research Division - Analyst : Okay. And then you mentioned second half '19 sort of being when the free cash sort of ramps. So does that just telling us basically the CapEx is sort of tilted towards the first half of '19 and is it still $300 million?

Question: Mark Neville - Scotiabank Global Banking and Markets, Research Division - Analyst : It's still $300 million?

Question: Mark Neville - Scotiabank Global Banking and Markets, Research Division - Analyst : Okay. Maybe just one last one. I believe Rob said that you guys would be close to, sort of, maxing out the current NCIB very shortly, if I heard that correctly. And I'm just curious if there's any thoughts around -- again, you mentioned renewing it, but any thoughts around sort of increasing the size of that?

Question: Peter Sklar - BMO Capital Markets Equity Research - Analyst : You mentioned during the discussion that there was weakness. You did see some weakness in terms of your platforms and volumes in Europe. Was that WLTP-related or just specific to the programs you're exposed to?

Question: Peter Sklar - BMO Capital Markets Equity Research - Analyst : Okay. And then while you are on China, this issue with Ford on the Mondeo, could you please explain what's going on there, why the volumes are down? Is it a ramp issue or a demand issue or what is it?

Question: Peter Sklar - BMO Capital Markets Equity Research - Analyst : Okay. And is this all fluids work for you, Pat?

Question: Peter Sklar - BMO Capital Markets Equity Research - Analyst : Right, okay. And then lastly, Pat, could you just run through on the Escape launch? What you have on the new Escape versus what you had on the old Escape?

Question: Peter Sklar - BMO Capital Markets Equity Research - Analyst : Okay. And the Escape is a big platform for you. So I'm just wondering, like, can you just go through the timing of when the wind down is of the old program and when the wind up is for the new one?

Question: Peter Sklar - BMO Capital Markets Equity Research - Analyst : And how do you read through a lot for the new one? Do you build an inventory bank?

Question: Michael W. Glen - Macquarie Research - Analyst : Can you guys just circle back on Europe? There's obviously a lot of moving parts, there's some regulatory changes happening in that market. You're giving a fairly strong view in terms of what you see happening over there. So in terms of your main buckets of business in Europe, you don't think any of the ongoing changes in that market might have led to some headwinds on those businesses that you're involved in?

Question: Michael W. Glen - Macquarie Research - Analyst : Okay. And can you remind us, like, your main product buckets, you mentioned the engine blocks in Europe, but are there some other big product buckets over there? That's typical?

Question: Michael W. Glen - Macquarie Research - Analyst : Okay. And then for the CapEx number, both 2018 and 2019, can you -- are you able to specifically identify some of the bigger buckets that might have been embedded in that CapEx?

Question: Michael W. Glen - Macquarie Research - Analyst : Okay. And the $800 million 2018 business, what was that number in 2017, do you have that handy?

Question: Michael W. Glen - Macquarie Research - Analyst : $400 million? without the prior written consent of Thomson Reuters. 'Thomson Reuters' and the Thomson Reuters logo are registered trademarks of Thomson Reuters and its affiliated companies. MARCH 01, 2019 / 1:00PM, MRE.TO - Q4 2018 Martinrea International Inc Earnings Call

Question: Michael W. Glen - Macquarie Research - Analyst : Okay. And Fred, did you mention the 2019 operating margin number?

Question: Michael W. Glen - Macquarie Research - Analyst : Yes.