Finning 2016 Q2 Results
Aug 3, 2016
Q2 2016 HIGHLIGHTS
- Canada reported improved profitability. EBIT(1) margin of 4.4% included the unavoidable costs incurred during the shutdown caused by the Alberta wildfires; Adjusted EBIT margin(2)(3) of 6.3% was in line with Q2 2015 and above the previous two quarters.
- South America delivered strong EBIT margin of 8.8% in a difficult market environment; Adjusted EBIT margin was 9.1%.
- UK & Ireland is executing its plan to transform its business model, improve operational performance, and lower its cost structure. While Q2 2016 results were negatively impacted by significant severance and restructuring costs related to workforce reductions and steps to optimize the facility footprint, the UK & Ireland operations are expected to return to historic profitability levels by the end of 2016.
- SG&A(1) costs decreased by 13% from Q2 2015, excluding significant items and the Saskatchewan operation acquired effective July 1, 2015. As a result of decisive actions taken in all regions since 2014, SG&A costs in 2016 are expected to be 20% below 2014 levels, excluding the impact of foreign exchange.
- Free cash flow(3) was strong at $64 million, bringing year-to-date free cash flow to $94 million, which is a substantial improvement from ($162) million use of cash in the first two quarters of 2015. Management continues to expect free cash flow to be modestly over $300 million in 2016.
- Reported EPS was $0.03 per share. Adjusted EPS of $0.20 per share excluded severance and restructuring costs of $0.07 per share, primarily in the UK; charges resulting from the strategic repositioning of the UK's power systems business totaling $0.05 per share; and the unavoidable costs related to the Alberta wildfires of $0.05 per share.
For the complete results: View Q2 Results