Magna Announces Second Quarter 2024 Results
- Sales of $11.0 billion were level with Q2, 2023, compared to a
2% increase in global light vehicle production
- Diluted earnings per share and Adjusted diluted earnings per
share were $1.09 and $1.35, respectively
- Paid dividends of $134 million
- 2024 outlook for Total Sales largely unchanged, Adjusted EBIT
Margin range narrowed to 5.4% to 5.8%
AURORA, Ontario, Aug. 02, 2024 (GLOBE NEWSWIRE)
-- Magna International Inc. (TSX: MG; NYSE: MGA) today reported
financial results for the second quarter ended June 30, 2024.
Please click HERE for full second quarter
MD&A and Financial Statements.
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THREE MONTHS ENDED JUNE 30, |
|
SIX MONTHS ENDED JUNE 30, |
|
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|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
Reported |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales |
|
$ |
10,958 |
|
$ |
10,982 |
|
$ |
21,928 |
|
$ |
21,655 |
|
|
|
|
|
|
|
|
|
|
|
Income from operations before income taxes |
|
$ |
427 |
|
$ |
483 |
|
$ |
461 |
|
$ |
758 |
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to Magna International Inc. |
|
$ |
313 |
|
$ |
339 |
|
$ |
322 |
|
$ |
548 |
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share |
|
$ |
1.09 |
|
$ |
1.18 |
|
$ |
1.12 |
|
$ |
1.91 |
|
|
|
|
|
|
|
|
|
|
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Non-GAAP Financial Measures(1) |
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBIT |
|
$ |
577 |
|
$ |
616 |
|
$ |
1,046 |
|
$ |
1,065 |
|
|
|
|
|
|
|
|
|
|
|
Adjusted diluted earnings per share |
|
$ |
1.35 |
|
$ |
1.54 |
|
$ |
2.44 |
|
$ |
2.69 |
|
|
|
|
|
|
|
|
|
|
| All
results are reported in millions of U.S. dollars, except per share
figures, which are in U.S. dollars |
| |
|
(1) Adjusted EBIT and Adjusted diluted earnings per
share are Non-GAAP financial measures that have no standardized
meaning under U.S. GAAP, and as a result may not be comparable to
the calculation of similar measures by other companies. Effective
July 1, 2023, we revised our calculations of Adjusted EBIT and
Adjusted diluted earnings per share to exclude the amortization of
acquired intangible assets. The historical presentation of these
Non-GAAP measures within this press release has also been updated
to reflect the revised calculations. Further information and a
reconciliation of these Non-GAAP financial measures is included in
the back of this press release. |
 |
“Overall, our second quarter operating performance largely met
our expectations, despite lower than anticipated volumes on certain
key vehicle programs in North America. Our focus remains on factors
we can control, including operational excellence, cost reductions,
and flawless launches. These efforts, together with ongoing
customer commercial discussions are enabling us to substantially
maintain our 2024 Adjusted EBIT margin range.
Our updated 2026 Outlook reflects customer program updates and
a tempered view on mid-term electric vehicle penetration rates,
particularly in North America. While we have reduced our sales
forecast, we are taking a number of concrete actions to mitigate
the sales impacts and continue to expect margin expansion and
strong free cash flow growth.”
- Swamy Kotagiri, Chief Executive Officer |
THREE MONTHS ENDED JUNE 30, 2024
We posted sales of $11.0 billion for the second
quarter of 2024, essentially unchanged from the second quarter of
2023, which compares to a 2% increase in global light vehicle
production, including 6% and 1% higher production in China and
North America, respectively, partially offset by 5% lower
production in Europe. Our sales were negatively impacted by the end
of production of certain programs, lower Complete Vehicle assembly
volumes, including as a result of the end of production of the BMW
5-Series, and the net weakening of foreign currencies against the
U.S. dollar. These were offset by higher global light vehicle
production, the launch of new programs, and acquisitions, net of
divestitures, during or subsequent to the second quarter of
2023.
Adjusted EBIT was $577 million in the second
quarter of 2024 compared to $616 million in the second quarter of
2023. The decrease in Adjusted EBIT reflects reduced earnings on
lower assembly volumes in Complete Vehicles, higher net warranty
costs, the unfavourable impact of foreign exchange losses in the
second quarter of 2024 compared to foreign exchange gains in the
second quarter of 2023 related to the re-measurement of net
deferred tax assets that are maintained in a currency other than
their functional currency, lower equity income, and higher
restructuring costs. These were partially offset by commercial
items in the second quarters of 2024 and 2023, which had a net
favourable impact on a year over year basis, productivity and
efficiency improvements, including lower costs at certain
underperforming facilities and lower net engineering costs,
including spending related to our electrification and active safety
businesses.
Income from operations before income taxes was
$427 million for the second quarter of 2024 compared to $483
million in the second quarter of 2023, which includes Other
expense, net(2) and Amortization of acquired intangibles
of $96 million and $99 million in the second quarters of 2024 and
2023, respectively. Excluding Other expense, net and Amortization
of acquired intangibles from both periods, income from operations
before income taxes decreased $59 million in the second quarter of
2024 compared to the second quarter of 2023.
Net income attributable to Magna International
Inc. was $313 million for the second quarter of 2024 compared to
$339 million in the second quarter of 2023, which includes Other
expense, net(2), after tax and Amortization of acquired
intangibles of $76 million and $102 million in the second quarters
of 2024 and 2023, respectively. Excluding Other expense, net, after
tax and Amortization of acquired intangibles from both periods, net
income attributable to Magna International Inc. decreased $52
million in the second quarter of 2024 compared to the second
quarter of 2023.
Diluted earnings per share were $1.09 in the
second quarter of 2024, compared to $1.18 in the second quarter of
2023, and Adjusted diluted earnings per share were $1.35 in the
second quarter of 2024 compared to $1.54 in the second quarter of
2023.
(2) Other expense (income), net is
comprised of restructuring and impairment costs relating to Fisker
Inc. ["Fisker"], net losses on the revaluation of certain public
company warrants and equity investments, gain on business
combination, restructuring activities and transaction costs
relating to the acquisition of Veoneer Active Safety Business
["Veoneer AS"] during the three and six months ended June 30, 2023
& 2024. A reconciliation of these Non-GAAP financial measures
is included in the back of this press release.
In the second quarter of 2024, we generated cash
from operations before changes in operating assets and liabilities
of $681 million and generated $55 million in operating assets and
liabilities. Investment activities for the second quarter of 2024
included $500 million in fixed asset additions, a $170 million
increase in investments, other assets and intangible assets, and
$56 million for acquisitions.
SIX MONTHS ENDED JUNE 30, 2024
We posted sales of $21.9 billion for the six
months ended June 30, 2024, an increase of 1% from the six months
ended June 30, 2023, as global light vehicle production increased
1%, including 7% and 2% higher production in China and North
America, respectively, partially offset by 5% lower production in
Europe.
Adjusted EBIT decreased to $1.05 billion for the
six months ended June 30, 2024, compared to $1.06 billion for the
six months ended June 30, 2023, primarily due to reduced earnings
on lower assembly volumes in Complete Vehicles, the unfavourable
impact of foreign exchange losses in the first six months of 2024
compared to foreign exchange gains in the first six months of 2023
related to the re-measurement of net deferred tax assets that are
maintained in a currency other than their functional currency,
higher production input costs net of customer recoveries, lower
equity income, acquisitions, net of divestitures, during or
subsequent to the second quarter of 2023, and higher restructuring
costs. These were largely offset by productivity and efficiency
improvements, including lower costs at certain underperforming
facilities, commercial items in the first six months of 2024 and
2023, which had a net favourable impact on a year over year basis,
lower net engineering costs, including spending related to our
electrification and active safety businesses and lower launch,
engineering and other costs associated with our assembly
business.
During the six months ended June 30, 2024,
income from operations before income taxes was $461 million, net
income attributable to Magna International Inc. was $322 million
and diluted earnings per share was $1.12, decreases of $297
million, $226 million, and $0.79, respectively, each compared to
the first six months of 2023.
During the first six months ended June 30, 2024,
Adjusted diluted earnings per share were $2.44, compared to $2.69
in the first six months of 2023.
For the six months ended June 30, 2023, we
generated cash from operations before changes in operating assets
and liabilities of $1.3 billion and used $275 million in operating
assets and liabilities. Investment activities for the six months
ended June 30, 2024 included $993 million in fixed asset additions,
a $295 million increase in investments, other assets and intangible
assets, $86 million for acquisitions, and $21 million in public and
private equity investments.
RETURN OF CAPITAL TO SHAREHOLDERS
During the three months ended June 30, 2024, we
paid $134 million in dividends.
Our Board of Directors declared a second quarter
dividend of $0.475 per Common Share, payable on August 30, 2024 to
shareholders of record as of the close of business on August 16,
2024.
SEGMENT SUMMARY
($Millions
unless otherwise noted)
|
For the three months ended June 30, |
|
Sales |
|
Adjusted EBIT |
|
|
|
2024 |
|
|
2023 |
|
Change |
|
|
2024 |
|
|
2023 |
|
Change |
|
Body Exteriors & Structures |
$ |
4,465 |
|
$ |
4,540 |
|
$ |
(75 |
) |
|
$ |
341 |
|
$ |
394 |
|
$ |
(53 |
) |
| Power & Vision |
|
3,926 |
|
|
3,462 |
|
|
464 |
|
|
|
198 |
|
|
124 |
|
|
74 |
|
| Seating Systems |
|
1,455 |
|
|
1,603 |
|
|
(148 |
) |
|
|
53 |
|
|
67 |
|
|
(14 |
) |
| Complete Vehicles |
|
1,242 |
|
|
1,526 |
|
|
(284 |
) |
|
|
20 |
|
|
34 |
|
|
(14 |
) |
|
Corporate and Other |
|
(130 |
) |
|
(149 |
) |
|
19 |
|
|
|
(35 |
) |
|
(3 |
) |
|
(32 |
) |
|
Total Reportable Segments |
$ |
10,958 |
|
$ |
10,982 |
|
$ |
(24 |
) |
|
$ |
577 |
|
$ |
616 |
|
$ |
(39 |
) |
| |
For the three months ended June 30, |
|
|
|
Adjusted EBIT as a
percentage of sales |
|
|
|
|
|
|
|
2024 |
|
|
2023 |
|
Change |
|
Body Exteriors & Structures |
|
|
|
|
|
7.6 |
% |
|
8.7 |
% |
|
(1.1 |
)% |
| Power & Vision |
|
|
|
|
|
5.0 |
% |
|
3.6 |
% |
|
1.4 |
% |
| Seating Systems |
|
|
|
|
|
3.6 |
% |
|
4.2 |
% |
|
(0.6 |
)% |
|
Complete Vehicles |
|
|
|
|
|
1.6 |
% |
|
2.2 |
% |
|
(0.6 |
)% |
|
Consolidated Average |
|
|
|
|
|
5.3 |
% |
|
5.6 |
% |
|
(0.3 |
)% |
|
|
|
($Millions
unless otherwise noted)
|
For the six months ended June 30, |
|
Sales |
|
Adjusted EBIT |
|
|
|
2024 |
|
|
2023 |
|
Change |
|
|
2024 |
|
|
2023 |
|
Change |
|
Body Exteriors & Structures |
$ |
8,894 |
|
$ |
8,979 |
|
$ |
(85 |
) |
|
$ |
639 |
|
$ |
666 |
|
$ |
(27 |
) |
| Power & Vision |
|
7,768 |
|
|
6,785 |
|
|
983 |
|
|
|
296 |
|
|
216 |
|
|
80 |
|
| Seating Systems |
|
2,910 |
|
|
3,089 |
|
|
(179 |
) |
|
|
105 |
|
|
104 |
|
|
1 |
|
| Complete Vehicles |
|
2,625 |
|
|
3,152 |
|
|
(527 |
) |
|
|
47 |
|
|
86 |
|
|
(39 |
) |
|
Corporate and Other |
|
(269 |
) |
|
(350 |
) |
|
81 |
|
|
|
(41 |
) |
|
(7 |
) |
|
(34 |
) |
|
Total Reportable Segments |
$ |
21,928 |
|
$ |
21,655 |
|
$ |
273 |
|
|
$ |
1,046 |
|
$ |
1,065 |
|
$ |
(19 |
) |
| |
For the six months ended June 30, |
|
|
|
Adjusted EBIT as a
percentage of sales |
|
|
|
|
|
|
2024 |
|
2023 |
|
Change |
|
Body Exteriors & Structures |
|
|
|
|
7.2 |
% |
7.4 |
% |
(0.2 |
)% |
| Power & Vision |
|
|
|
|
3.8 |
% |
3.2 |
% |
0.6 |
% |
| Seating Systems |
|
|
|
|
3.6 |
% |
3.4 |
% |
0.2 |
% |
| Complete Vehicles |
|
|
|
|
1.8 |
% |
2.7 |
% |
(0.9 |
)% |
|
Consolidated Average |
|
|
|
|
4.8 |
% |
4.9 |
% |
(0.1 |
)% |
|
|
For further details on our segment results,
please see our Management’s Discussion and Analysis of Results of
Operations and Financial Position and our Interim Financial
Statements.
2024 OUTLOOK
We first disclose a full-year Outlook annually
in February, with quarterly updates. The following 2024 Outlook is
an update to our previous Outlook in May 2024.
Updated 2024 Outlook
Assumptions
| |
2024 |
|
|
Current |
|
Previous |
Light Vehicle Production
(millions of units)
North America
Europe
China |
15.7
17.1
29.0 |
|
15.7
17.4
29.0 |
| |
|
|
|
Average Foreign exchange
rates:
1 Canadian dollar equals
1 euro equals |
U.S. $0.733
U.S. $1.080 |
|
U.S. $0.725
U.S. $1.065 |
2024 Outlook
| |
2024 |
|
|
Current |
|
Previous |
Segment Sales
Body Exteriors
& Structures
Power &
Vision
Seating Systems
Complete
Vehicles |
$17.3 - $17.9 billion
$15.3 - $15.7 billion
$5.5 - $5.8 billion
$4.9 - $5.2 billion |
|
$17.3 - $17.9 billion
$15.4 - $15.8 billion
$5.4 - $5.7 billion
$5.0 - $5.3 billion |
| Total Sales |
$42.5 - $44.1 billion |
|
$42.6 - $44.2 billion |
| |
|
|
|
| Adjusted EBIT
Margin(3) |
5.4% - 5.8% |
|
5.4% - 6.0% |
| |
|
|
|
| Equity Income (included in
EBIT) |
$100 - $130 million |
|
$120 - $150 million |
| |
|
|
|
| Interest Expense, net |
Approx. $220 million |
|
Approx. $230 million |
| |
|
|
|
| Income Tax
Rate(4) |
Approx. 22% |
|
Approx. 22% |
| |
|
|
|
| Adjusted Net Income
attributable to Magna(5) |
$1.5 - $1.7 billion |
|
$1.5 - $1.7 billion |
| |
|
|
|
| Capital Spending |
$2.3 - $2.4 billion |
|
$2.4 - $2.5 billion |
| |
|
|
|
Notes:
(3) Adjusted EBIT Margin is the ratio of Adjusted EBIT
to Total Sales. Refer to the reconciliation of Non-GAAP financial
measures in the back of this press release for further
information
(4) The Income Tax Rate has been calculated using
Adjusted EBIT and is based on current tax legislation
(5) Adjusted Net Income attributable to Magna represents
Net Income excluding Other expense, net and amortization of
acquired intangible assets, net of tax |
2026 OUTLOOK
In the normal course, we do not update the third
year of the Outlook we provide in February of each year. However,
given the magnitude of the changes that are taking place in the
automotive industry and the potential impacts on our business,
management prepared a top-level analysis to update our 2026 Outlook
provided in February 2024 for projected Sales, Adjusted EBIT
Margin, Equity Income, and Capital Spending.
Given the higher-level nature and timing of this
analysis, management is not currently able to provide 2026
forecasts with the same granularity as that provided in February
2024, particularly: Sales and Adjusted EBIT margin ranges by
Segment for 2026; Megatrend Sales and Adjusted EBIT for the years
2024 to 2026; and 2027 Sales for Battery Enclosures, Powertrain
Electrification and ADAS. Accordingly, investors should not rely on
the forecasts for these measures provided in our February 2024
Outlook or other Investor presentations.
2026 Outlook Assumptions
| |
2026 |
|
|
Current |
|
Previous |
Light Vehicle Production
(millions of units)
North America
Europe
China |
16.1
17.3
30.6 |
|
16.1
17.3
30.6 |
| |
|
|
|
Average Foreign exchange
rates:
1 Canadian dollar equals
1 euro equals |
U.S. $0.74
U.S. $1.08 |
|
U.S. $0.74
U.S. $1.08 |
2026 Outlook
| |
2026 |
|
|
Current |
|
Previous |
| |
|
|
|
| Total Sales |
$44.0 - $46.5 billion |
|
$48.8 - $51.2 billion |
| |
|
|
|
| Adjusted EBIT
Margin(6) |
6.7% - 7.4% |
|
7.0% - 7.7% |
| |
|
|
|
| Equity Income (included in
EBIT) |
$125 - $170 million |
|
$165 - $210 million |
| |
|
|
|
| Capital Spending |
$1.6 - $1.8 billion |
|
|
| |
|
|
|
Notes:
(6) Adjusted EBIT Margin is the ratio of Adjusted EBIT
to Total Sales. Refer to the reconciliation of Non-GAAP financial
measures in the back of this press release for further
information |
|
|
Our Outlook is intended to provide information
about management's current expectations and plans and may not be
appropriate for other purposes. Although considered reasonable by
Magna as of the date of this document, the 2024 and 2026 Outlooks
above and the underlying assumptions may prove to be inaccurate.
Accordingly, our actual results could differ materially from our
expectations as set forth herein. The risks identified in the
“Forward-Looking Statements” section below represent the primary
factors which we believe could cause actual results to differ
materially from our expectations.
Key Drivers of Our Business
Our operating results are primarily dependent on
the levels of North American, European, and Chinese car and light
truck production by our customers. While we supply systems and
components to every major original equipment manufacturer ("OEM"),
we do not supply systems and components for every vehicle, nor is
the value of our content consistent from one vehicle to the next.
As a result, customer and program mix relative to market trends, as
well as the value of our content on specific vehicle production
programs, are also important drivers of our results.
OEM production volumes are generally aligned
with vehicle sales levels and thus affected by changes in such
levels. Aside from vehicle sales levels, production volumes are
typically impacted by a range of factors, including: labour
disruptions; free trade arrangements and tariffs; relative currency
values; commodities prices; supply chains and infrastructure;
availability and relative cost of skilled labour; regulatory
frameworks; and other factors.
Overall vehicle sales levels are significantly
affected by changes in consumer confidence levels, which may in
turn be impacted by consumer perceptions and general trends related
to the job, housing, and stock markets, as well as other
macroeconomic and political factors. Other factors which typically
impact vehicle sales levels and thus production volumes include:
vehicle affordability; interest rates and/or availability of
credit; fuel and energy prices; relative currency values;
uncertainty as to consumer acceptance of EVs; government subsidies
to consumers for the purchase of low- and zero-emission vehicles;
and other factors.
NON-GAAP FINANCIAL MEASURES RECONCILIATION
Effective July 1, 2023, we revised our
calculations of Adjusted EBIT and Adjusted diluted earnings per
share to exclude the amortization of acquired intangible assets.
Revenue generated from acquired intangible assets is included
within revenue in determining net income attributable to Magna. We
believe that excluding the amortization of acquired intangible
assets from these Non-GAAP measures helps management and investors
in understanding our underlying performance and improves
comparability between our segmented results of operations and our
peers.
The historical presentation of these Non-GAAP
measures within this press release has also been updated to reflect
the revised calculations.
The reconciliation
of Non-GAAP financial measures is as follows:
|
|
|
THREE MONTHS ENDED JUNE 30, |
|
SIX MONTHS ENDED JUNE 30, |
|
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBIT |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net
Income |
$ |
328 |
|
|
$ |
354 |
|
|
$ |
354 |
|
|
$ |
571 |
|
|
Add: |
|
|
|
|
|
|
|
|
Amortization of acquired intangible assets |
|
28 |
|
|
|
13 |
|
|
|
56 |
|
|
|
25 |
|
|
Interest expense, net |
|
54 |
|
|
|
34 |
|
|
|
105 |
|
|
|
54 |
|
|
Other expense, net |
|
68 |
|
|
|
86 |
|
|
|
424 |
|
|
|
228 |
|
|
Income taxes |
|
99 |
|
|
|
129 |
|
|
|
107 |
|
|
|
187 |
|
|
Adjusted EBIT |
$ |
577 |
|
|
$ |
616 |
|
|
$ |
1,046 |
|
|
$ |
1,065 |
|
|
|
|
Adjusted EBIT as a percentage of sales (“Adjusted EBIT
margin”) |
|
|
|
|
|
|
|
|
|
|
Sales |
$ |
10,958 |
|
|
$ |
10,982 |
|
|
$ |
21,928 |
|
|
$ |
21,655 |
|
|
Adjusted EBIT |
$ |
577 |
|
|
$ |
616 |
|
|
$ |
1,046 |
|
|
$ |
1,065 |
|
|
Adjusted EBIT as a percentage of sales |
|
5.3 |
% |
|
|
5.6 |
% |
|
|
4.8 |
% |
|
|
4.9 |
% |
|
|
|
|
|
|
|
|
|
| |
|
Adjusted diluted earnings per share |
|
|
|
|
|
|
|
|
|
| Net
income attributable to Magna International Inc. |
$ |
313 |
|
|
$ |
339 |
|
|
$ |
322 |
|
|
$ |
548 |
|
| Add
(deduct): |
|
|
|
|
|
|
|
|
Amortization of acquired intangible assets |
|
28 |
|
|
|
13 |
|
|
|
56 |
|
|
|
25 |
|
|
Other expense, net |
|
68 |
|
|
|
86 |
|
|
|
424 |
|
|
|
228 |
|
|
Tax effect on Amortization of acquired intangible assets and Other
expense, net |
|
(20 |
) |
|
|
3 |
|
|
|
(102 |
) |
|
|
(31 |
) |
|
Adjusted net income attributable to Magna International Inc. |
$ |
389 |
|
|
$ |
441 |
|
|
$ |
700 |
|
|
$ |
770 |
|
|
Diluted weighted average number of Common Shares outstanding
during the period (millions): |
|
287.3 |
|
|
|
286.3 |
|
|
|
287.2 |
|
|
|
286.4 |
|
|
Adjusted diluted earnings per shares |
$ |
1.35 |
|
|
$ |
1.54 |
|
|
$ |
2.44 |
|
|
$ |
2.69 |
|
Certain of the forward-looking financial
measures above are provided on a Non-GAAP basis. We do not provide
a reconciliation of such forward-looking measures to the most
directly comparable financial measures calculated and presented in
accordance with U.S. GAAP. To do so would be potentially misleading
and not practical given the difficulty of projecting items that are
not reflective of on-going operations in any future period. The
magnitude of these items, however, may be significant.
This press release together with our
Management’s Discussion and Analysis of Results of Operations and
Financial Position and our Interim Financial Statements are
available in the Investor Relations section of our website at
www.magna.com/company/investors and filed electronically through
the System for Electronic Document Analysis and Retrieval +
(SEDAR+) which can be accessed at http://www.sedarplus.ca as well
as on the United States Securities and Exchange Commission’s
Electronic Data Gathering, Analysis and Retrieval System (EDGAR),
which can be accessed at www.sec.gov.
We will hold a conference call for interested
analysts and shareholders to discuss our second quarter ended June
30, 2024 results on Friday, August 2, 2024, at 8:00 a.m. ET. The
conference call will be chaired by Swamy Kotagiri, Chief Executive
Officer. Please register for the webcast here or through our
website www.magna.com. If unable to join the webcast, North
American callers can dial 1-800-715-9871 and International callers
can dial 1-646-307-1963, conference ID 9829976. The slide
presentation accompanying the conference call as well as our
financial review summary will be available on our website Friday
prior to the call.
TAGS
Quarterly earnings, financial results, vehicle production
INVESTOR CONTACT
Louis Tonelli, Vice-President, Investor Relations
louis.tonelli@magna.com │ 905.726.7035
MEDIA CONTACT
Tracy Fuerst, Vice-President, Corporate Communications & PR
tracy.fuerst@magna.com │ 248.761.7004
TELECONFERENCE CONTACT
Nancy Hansford, Executive Assistant, Investor Relations
nancy.hansford@magna.com │ 905.726.7108
OUR BUSINESS (7)
Magna is more than one of the world’s largest suppliers in the
automotive space. We are a mobility technology company built to
innovate, with a global, entrepreneurial-minded team of over
177,000(8) employees across 345 manufacturing operations
and 105 product development, engineering and sales centres spanning
28 countries. With 65+ years of expertise, our ecosystem of
interconnected products combined with our complete vehicle
expertise uniquely positions us to advance mobility in an expanded
transportation landscape.
For further information about Magna (NYSE:MGA; TSX:MG), please
visit www.magna.com or follow us on social.
(7)
Manufacturing operations, product development, engineering and
sales centres include certain operations accounted for under the
equity method.
(8) Number of employees
includes over 165,000 employees
at our wholly owned or controlled entities and over
12,000 employees at certain
operations accounted for under the equity method.
FORWARD-LOOKING STATEMENTS
Certain statements in this press release
constitute "forward-looking information" or "forward-looking
statements" (collectively, "forward-looking statements"). Any such
forward-looking statements are intended to provide information
about management's current expectations and plans and may not be
appropriate for other purposes. Forward-looking statements may
include financial and other projections, as well as statements
regarding our future plans, strategic objectives or economic
performance, or the assumptions underlying any of the foregoing,
and other statements that are not recitations of historical fact.
We use words such as "may", "would", "could", "should", "will",
"likely", "expect", "anticipate", “assume”, "believe", "intend",
"plan", "aim", "forecast", "outlook", "project", “potential”,
"estimate", "target" and similar expressions suggesting future
outcomes or events to identify forward-looking statements. The
following table identifies the material forward-looking statements
contained in this document, together with the material potential
risks that we currently believe could cause actual results to
differ materially from such forward-looking statements. Readers
should also consider all of the risk factors which follow below the
table:
|
Material Forward-Looking Statement |
Material Potential Risks Related to Applicable
Forward-Looking Statement |
Light Vehicle Production
|
- Light vehicle sales levels
- Production disruptions, including
as a result of labour disruptions
- Supply disruptions
- Production allocation decisions by
OEMs
- Free trade arrangements and
tariffs
- Relative currency values
- Commodities prices
- Availability and relative cost of
skilled labour
|
Total Sales
Segment Sales |
- Same risks as for Light Vehicle
Production above
- The impact of elevated interest
rates and availability of credit on consumer confidence and in turn
vehicle sales and production
- The impact of deteriorating vehicle
affordability on consumer demand, and in turn vehicle sales and
production
- Alignment of our product mix with
production demand
- Customer Concentration
- Shifts in market shares among
vehicles or vehicle segments
- Shifts in consumer “take rates” for
products we sell
|
|
Adjusted EBIT Margin, Free Cash Flow, and Net Income Attributable
to Magna |
- Same risks as for Total Sales and
Segment Sales above
- Successful execution of critical
program launches
- Operational underperformance
- Product warranty/recall risk
- Restructuring costs
- Impairments
- Inflationary pressures
- Our ability to secure cost
recoveries from customers and/or otherwise offset higher input
costs
- Price concessions
- Risks of conducting business with
newer EV-focused OEMs
- Commodity cost volatility
- Scrap steel price volatility
- Higher labour costs
- Tax risks
|
|
Equity Income |
- Same risks as Adjusted EBIT Margin,
Free Cash Flow, and Net Income Attributable to Magna
- Risks related to conducting
business through joint ventures
- Risks of doing business in foreign
markets
|
Forward-looking statements are based on
information currently available to us and are based on assumptions
and analyses made by us in light of our experience and our
perception of historical trends, current conditions and expected
future developments, as well as other factors we believe are
appropriate in the circumstances. While we believe we have a
reasonable basis for making any such forward-looking statements,
they are not a guarantee of future performance or outcomes. In
addition to the factors in the table above, whether actual results
and developments conform to our expectations and predictions is
subject to a number of risks, assumptions and uncertainties, many
of which are beyond our control, and the effects of which can be
difficult to predict, including, without limitation:
Macroeconomic, Geopolitical and Other Risks
- inflationary pressures;
- interest rates;
- geopolitical risks;
Risks Related to the Automotive Industry
- economic cyclicality;
- regional production volume declines;
- deteriorating vehicle affordability;
- misalignment between EV production and sales;
- intense competition;
Strategic Risks
- alignment with "Car of the Future";
- evolving business risk profile;
- technology and innovation;
- investments in mobility and technology companies;
Customer-Related Risks
- customer concentration;
- growth with Asian OEMs;
- growth of EV-focused OEMs;
- risks of conducting business with newer EV-focused OEMs;
- Fisker bankruptcy;
- dependence on outsourcing;
- customer cooperation and consolidation;
- Program cancellations, deferrals and reductions in production
volumes;
- Complete vehicle assembly business;
- market shifts;
- consumer take rate shifts;
- quarterly sales fluctuations;
- customer purchase orders;
- potential OEM production-related disruptions;
Supply Chain Risks
- semiconductor chip supply disruptions and price increases;
- supply chain disruptions;
- regional energy supply and pricing;
- supply base condition;
Manufacturing/Operational Risks
- product launch;
- operational underperformance;
- restructuring costs;
- impairments;
- labour disruptions;
- skilled labour
attraction/retention;
- leadership expertise and
succession;
|
Pricing Risks
- quote/pricing assumptions;
- customer pricing pressure/contractual
arrangements;
- commodity cost volatility;
- scrap steel/aluminum price
volatility;
Warranty/Recall Risks
- repair/replace costs;
- warranty provisions;
- product liability;
Climate Change Risks
- transition risks and physical risks;
- strategic and other risks;
IT Security/Cybersecurity Risks
- IT/cybersecurity breach;
- product cybersecurity;
Acquisition Risks
- acquisition of strategic targets;
- inherent merger and acquisition risks;
- acquisition integration and synergies;
Other Business Risks
- joint ventures;
- intellectual property;
- risks of doing business in foreign markets;
- relative foreign exchange rates;
- currency devaluation in Argentina;
- pension risks;
- tax risks;
- returns on capital investments;
- financial flexibility;
- credit ratings changes;
- stock price fluctuation;
- dividends;
Legal, Regulatory and Other Risks
- antitrust proceedings;
- legal and regulatory proceedings;
- changes in laws;
- trade agreements;
- trade disputes/tariffs; and
- environmental compliance.
|
In evaluating forward-looking statements or forward-looking
information, we caution readers not to place undue reliance on any
forward-looking statement. Additionally, readers should
specifically consider the various factors which could cause actual
events or results to differ materially from those indicated by such
forward-looking statements, including the risks, assumptions and
uncertainties above which are:
- discussed under the “Industry
Trends and Risks” heading of our Management’s Discussion and
Analysis; and
- set out in our Annual Information
Form filed with securities commissions in Canada, our annual report
on Form 40-F filed with the United States Securities and Exchange
commission, and subsequent filings.
Readers should also consider discussion of our
risk mitigation activities with respect to certain risk factors,
which can be also found in our Annual Information Form. Additional
information about Magna, including our Annual Information Form, is
available through the System for Electronic Data Analysis and
Retrieval + (SEDAR+) at www.sedarplus.ca, as well as on the United
States Securities and Exchange Commission’s Electronic Data
Gathering, Analysis and Retrieval System (EDGAR), which can be
accessed at www.sec.gov.
A photo accompanying this announcement is available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/9b3e4579-1ecc-4bb5-b770-e53f2a426a7c
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