Magna Announces Third Quarter 2024 Results
- Sales of $10.3 billion decreased
in-line with the 4% reduction in global light vehicle
production
- Diluted earnings per share were
$1.68, up $0.31, largely reflecting recognition of Fisker deferred
revenue
- Adjusted diluted earnings per share
were $1.28, down $0.18, including $0.10 due to a higher income tax
rate
- Normal Course Issuer Bid to
purchase up to 10% of our public float of Common Shares, with
purchases expected to commence in the fourth quarter of 2024
AURORA, Ontario, Nov. 01, 2024 (GLOBE NEWSWIRE)
-- Magna International Inc. (TSX: MG; NYSE: MGA) today reported
financial results for the third quarter ended September 30,
2024.
Please click HERE for full third quarter
MD&A and Financial Statements.
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|
THREE MONTHS ENDED SEPTEMBER 30, |
|
NINE MONTHS ENDED SEPTEMBER 30, |
|
|
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
| Reported |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales |
|
$ |
10,280 |
|
$ |
10,688 |
|
$ |
32,208 |
|
$ |
32,343 |
|
|
|
|
|
|
|
|
|
|
|
Income from operations before income taxes |
|
$ |
700 |
|
$ |
538 |
|
$ |
1,161 |
|
$ |
1,296 |
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to Magna International Inc. |
|
$ |
484 |
|
$ |
394 |
|
$ |
806 |
|
$ |
942 |
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share |
|
$ |
1.68 |
|
$ |
1.37 |
|
$ |
2.81 |
|
$ |
3.29 |
|
|
|
|
|
|
|
|
|
|
| Non-GAAP Financial
Measures(1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBIT |
|
$ |
594 |
|
$ |
615 |
|
$ |
1,640 |
|
$ |
1,680 |
|
|
|
|
|
|
|
|
|
|
|
Adjusted diluted earnings per share |
|
$ |
1.28 |
|
$ |
1.46 |
|
$ |
3.72 |
|
$ |
4.15 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 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. Further information and a
reconciliation of these Non-GAAP financial measures is included in
the back of this press release. |
|
“We continue to mitigate industry headwinds including lower
production volumes in each of our core regions. Our ongoing
initiatives and results to date reinforce our conviction in our
free cashflow outlook this year and beyond. As we continuously seek
to optimize value creation, we are resuming share repurchases in
the fourth quarter - ahead of our prior plan."
- Swamy Kotagiri, Magna’s Chief Executive Officer
|
THREE MONTHS ENDED SEPTEMBER 30, 2024
We posted sales of $10.3 billion for the third
quarter of 2024, a decrease of 4% from the third quarter of 2023.
The lower sales largely reflects a 4% decrease in global light
vehicle production, including 6% lower production in each of North
America and China and a 2% decline in Europe. In addition, sales
were negatively impacted by the end of production of certain
programs, and divestitures, net of acquisitions, partially offset
by the launch of new programs and customer price increases to
recover certain higher production input costs.
Adjusted EBIT decreased to $594 million in the
third quarter of 2024 compared to $615 million in the third quarter
of 2023. This mainly reflects reduced earnings on lower sales,
higher production input costs net of customer recoveries, and lower
equity income. These were partially offset by higher net favourable
commercial items, continued productivity and efficiency
improvements, including lower costs at certain underperforming
facilities, lower net engineering costs, including spending related
to our electrification and active safety businesses and the
negative impact of the UAW labour strike during the third quarter
of 2023.
Income from operations before income taxes
increased to $700 million for the third quarter of 2024 compared to
$538 million in the third quarter of 2023, which includes Other
(income) expense, net(2) items and Amortization of
acquired intangibles totaling ($160) million and $28 million in the
third quarters of 2024 and 2023, respectively. The most significant
item in either period was the positive impact of recognizing $196
million of Fisker deferred revenue as the associated agreements
were cancelled in the third quarter of 2024. Excluding Other
(income) expense, net and Amortization of acquired intangibles from
both periods, income from operations before income taxes decreased
$26 million in the third quarter of 2024 compared to the third
quarter of 2023, largely reflecting the decrease in Adjusted
EBIT.
Net income attributable to Magna International
Inc. was $484 million for the third quarter of 2024 compared to
$394 million in the third quarter of 2023, which includes Other
(income) expense, net(2), after tax and Amortization of
acquired intangibles totaling $(115) million and $25 million in the
third quarters of 2024 and 2023, respectively. Excluding Other
(income) expense, net, after tax and Amortization of acquired
intangibles from both periods, net income attributable to Magna
International Inc. decreased $50 million in the third quarter of
2024 compared to the third quarter of 2023.
Diluted earnings per share were $1.68 in the
third quarter of 2024, compared to $1.37 in the comparable period.
Adjusted diluted earnings per share were $1.28, down $0.18
from $1.46 for the third quarter of 2023, including $0.10 due to a
higher income tax rate.
In the third quarter of 2024, we generated cash
from operations before changes in operating assets and liabilities
of $785 million and used $58 million in operating assets and
liabilities. Investment activities for the third quarter of 2024
included $476 million in fixed asset additions, $115 million in
investments, other assets and intangible assets and $1 million in
private equity investments.
(2) Other (income) expense, net
is comprised of Fisker Inc. [“Fisker”] related impacts
(restructuring and impairment of assembly and production assets,
the impairment of Fisker warrants, and the recognition of
previously deferred revenue), revaluations of certain public
company warrants and equity investments, restructuring activities
and gain on business combination, during the three and nine months
ended September 30, 2023 & 2024. A reconciliation of these
Non-GAAP financial measures is included in the back of this press
release.
NINE MONTHS ENDED SEPTEMBER 30,
2024
We posted sales of $32.2 billion for the nine
months ended September 30, 2024, compared to $32.3 billion for the
nine months ended September 30, 2023, a period in which global
light vehicle production decreased 1%.
Adjusted EBIT was $1.64 billion for the nine
months ended September 30, 2024 compared to $1.68 billion for the
nine months ended September 30, 2023. This reflects reduced
earnings on lower sales, higher production input costs net of
customer recoveries, reduced earnings on lower assembly volumes,
acquisitions, net of divestitures, during or subsequent to the
first nine months of 2023, and lower equity income. These were
partially offset by continued productivity and efficiency
improvements, including lower costs at certain underperforming
facilities, higher net favourable commercial items, and lower net
engineering costs, including spending related to our
electrification and active safety businesses.
During the nine months ended September 30, 2024,
income from operations before income taxes was $1.16 billion, net
income attributable to Magna International Inc. was $806 million
and diluted earnings per share were $2.81, decreases of $135
million, $136 million, and $0.48, respectively, each compared to
the first nine months of 2023.
During the nine months ended September 30, 2024,
Adjusted diluted earnings per share decreased 10% to $3.72,
compared to the first nine months of 2023.
During the nine months ended September 30, 2024,
we generated cash from operations before changes in operating
assets and liabilities of $2.06 billion and invested $333 million
in operating assets and liabilities. Investment activities for the
first nine months of 2024 included $1.47 billion in fixed
asset additions, a $410 million increase in investments, other
assets and intangible assets and $22 million in public and private
equity investments.
RETURN OF CAPITAL
During the three months ended September 30,
2024, we paid $138 million in dividends.
Our Board of Directors declared a third quarter
dividend of $0.475 per Common Share, payable on November 29, 2024
to shareholders of record as of the close of business on November
15, 2024.
OTHER MATTERS
Subject to the approval by the Toronto Stock
Exchange, our Board of Directors approved a new Normal Course
Issuer Bid ("NCIB") to purchase up to approximately 28.5 million of
our Common Shares, representing approximately 10% of our public
float of Common Shares. This NCIB is expected to commence on or
about November 7, 2024 and will terminate one year later.
SEGMENT SUMMARY
($Millions
unless otherwise noted)
|
For the three months ended September 30, |
|
Sales |
|
Adjusted EBIT |
|
|
|
2024 |
|
|
2023 |
|
Change |
|
|
2024 |
|
|
2023 |
|
Change |
|
Body Exteriors & Structures |
$ |
4,038 |
|
$ |
4,354 |
|
$ |
(316 |
) |
|
$ |
273 |
|
$ |
358 |
|
$ |
(85 |
) |
| Power & Vision |
|
3,837 |
|
|
3,745 |
|
|
92 |
|
|
|
279 |
|
|
221 |
|
|
58 |
|
| Seating Systems |
|
1,379 |
|
|
1,529 |
|
|
(150 |
) |
|
|
51 |
|
|
70 |
|
|
(19 |
) |
| Complete Vehicles |
|
1,159 |
|
|
1,185 |
|
|
(26 |
) |
|
|
27 |
|
|
(5 |
) |
|
32 |
|
|
Corporate and Other |
|
(133 |
) |
|
(125 |
) |
|
(8 |
) |
|
|
(36 |
) |
|
(29 |
) |
|
(7 |
) |
|
Total Reportable Segments |
$ |
10,280 |
|
$ |
10,688 |
|
$ |
(408 |
) |
|
$ |
594 |
|
$ |
615 |
|
$ |
(21 |
) |
| |
For the three months ended September 30, |
|
|
|
Adjusted EBIT as a
percentage of sales |
|
|
|
|
|
|
|
2024 |
|
|
2023 |
|
Change |
|
Body Exteriors & Structures |
|
|
|
|
|
6.8 |
% |
|
8.2 |
% |
|
(1.4 |
)% |
| Power & Vision |
|
|
|
|
|
7.3 |
% |
|
5.9 |
% |
|
1.4 |
% |
| Seating Systems |
|
|
|
|
|
3.7 |
% |
|
4.6 |
% |
|
(0.9 |
)% |
|
Complete Vehicles |
|
|
|
|
|
2.3 |
% |
|
(0.4 |
)% |
|
2.7 |
% |
|
Consolidated Average |
|
|
|
|
|
5.8 |
% |
|
5.8 |
% |
|
0.0 |
% |
|
|
|
($Millions
unless otherwise noted)
|
For the nine months ended September 30, |
|
Sales |
|
Adjusted EBIT |
|
|
|
2024 |
|
|
2023 |
|
Change |
|
|
2024 |
|
|
2023 |
|
Change |
|
Body Exteriors & Structures |
$ |
12,932 |
|
$ |
13,333 |
|
$ |
(401 |
) |
|
$ |
912 |
|
$ |
1,024 |
|
$ |
(112 |
) |
| Power & Vision |
|
11,605 |
|
|
10,530 |
|
|
1,075 |
|
|
|
575 |
|
|
437 |
|
|
138 |
|
| Seating Systems |
|
4,289 |
|
|
4,618 |
|
|
(329 |
) |
|
|
156 |
|
|
174 |
|
|
(18 |
) |
| Complete Vehicles |
|
3,784 |
|
|
4,337 |
|
|
(553 |
) |
|
|
74 |
|
|
81 |
|
|
(7 |
) |
|
Corporate and Other |
|
(402 |
) |
|
(475 |
) |
|
73 |
|
|
|
(77 |
) |
|
(36 |
) |
|
(41 |
) |
|
Total Reportable Segments |
$ |
32,208 |
|
$ |
32,343 |
|
$ |
(135 |
) |
|
$ |
1,640 |
|
$ |
1,680 |
|
$ |
(40 |
) |
| |
For the nine months ended September 30, |
|
|
|
Adjusted EBIT as a
percentage of sales |
|
|
|
|
|
|
2024 |
|
2023 |
|
Change |
|
Body Exteriors & Structures |
|
|
|
|
7.1 |
% |
7.7 |
% |
(0.6 |
)% |
| Power & Vision |
|
|
|
|
5.0 |
% |
4.2 |
% |
0.8 |
% |
| Seating Systems |
|
|
|
|
3.6 |
% |
3.8 |
% |
(0.2 |
)% |
|
Complete Vehicles |
|
|
|
|
2.0 |
% |
1.9 |
% |
0.1 |
% |
|
Consolidated Average |
|
|
|
|
5.1 |
% |
5.2 |
% |
(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 Outlook is an
update to our previous Outlook in August 2024.
Updated 2024 Outlook
Assumptions
|
|
Current |
|
Previous |
Light Vehicle Production
(millions of units)
|
|
|
|
|
North America |
15.4 |
|
15.7 |
|
Europe |
16.9 |
|
17.1 |
|
China |
28.9 |
|
29.0 |
| |
|
|
|
Average Foreign exchange
rates:
1 Canadian dollar equals
1 euro equals |
U.S. $0.736
U.S. $1.088 |
|
U.S. $0.733
U.S. $1.080 |
Updated 2024 Outlook
|
|
Current |
|
Previous |
Segment Sales
|
|
|
|
|
Body Exteriors & Structures |
$16.8 - $17.2 billion |
|
$17.3 - $17.9 billion |
|
Power & Vision |
$15.1 - $15.4 billion |
|
$15.3 - $15.7 billion |
|
Seating Systems |
$5.6 - $5.8 billion |
|
$5.5 - $5.8 billion |
|
Complete Vehicles |
$5.2 - $5.4 billion |
|
$4.9 - $5.2 billion |
| Total Sales |
$42.2 - $43.2 billion |
|
$42.5 - $44.1 billion |
| |
|
|
|
| Adjusted EBIT
Margin(3) |
5.4% - 5.5% |
|
5.4% - 5.8% |
| |
|
|
|
| Equity Income (included in
EBIT) |
$80 - $105 million |
|
$100 - $130 million |
| |
|
|
|
| Interest Expense, net |
Approximately $220 million |
|
Approximately $220 million |
| |
|
|
|
| Income Tax
Rate(4) |
Approximately 23% |
|
Approximately 22% |
| |
|
|
|
| Adjusted Net Income
attributable to Magna(5) |
$1.45 - $1.55 billion |
|
$1.5 - $1.7 billion |
| |
|
|
|
| Capital Spending |
$2.2 - $2.3 billion |
|
$2.3 - $2.4 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. |
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 Outlook 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.
Adjusted
EBIT
The following table reconciles net income to Adjusted EBIT:
|
| |
THREE MONTHS ENDED
SEPTEMBER 30, |
|
NINE MONTHS ENDED
SEPTEMBER 30, |
|
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
|
|
|
|
|
|
|
|
|
| Net Income |
$ |
508 |
|
|
$ |
417 |
|
|
$ |
862 |
|
|
$ |
988 |
|
| Add: |
|
|
|
|
|
|
|
|
Amortization of acquired intangible assets |
|
28 |
|
|
|
32 |
|
|
|
84 |
|
|
|
57 |
|
|
Interest expense, net |
|
54 |
|
|
|
49 |
|
|
|
159 |
|
|
|
103 |
|
|
Other (income) expense, net |
|
(188 |
) |
|
|
(4 |
) |
|
|
236 |
|
|
|
224 |
|
|
Income taxes |
|
192 |
|
|
|
121 |
|
|
|
299 |
|
|
|
308 |
|
|
Adjusted EBIT |
$ |
594 |
|
|
$ |
615 |
|
|
$ |
1,640 |
|
|
$ |
1,680 |
|
|
|
Adjusted EBIT as a percentage of sales (“Adjusted EBIT
margin”)
Adjusted EBIT as a percentage of sales is calculated in the table
below: |
| |
|
|
|
|
|
|
|
|
Sales |
$ |
10,280 |
|
|
$ |
10,688 |
|
|
$ |
32,208 |
|
|
$ |
32,343 |
|
|
Adjusted EBIT |
$ |
594 |
|
|
$ |
615 |
|
|
$ |
1,640 |
|
|
$ |
1,680 |
|
|
Adjusted EBIT as a percentage of sales |
|
5.8 |
% |
|
|
5.8 |
% |
|
|
5.1 |
% |
|
|
5.2 |
% |
|
|
|
|
|
|
|
|
|
| |
Adjusted diluted earnings per share
The following table reconciles net income attributable to Magna
International Inc. to Adjusted diluted earnings per share: |
| |
|
|
|
|
|
|
|
| Net income attributable to
Magna International Inc. |
$ |
484 |
|
|
$ |
394 |
|
|
$ |
806 |
|
|
$ |
942 |
|
| Add (deduct): |
|
|
|
|
|
|
|
|
Amortization of acquired intangible assets |
|
28 |
|
|
|
32 |
|
|
|
84 |
|
|
|
57 |
|
|
Other (income) expense, net |
|
(188 |
) |
|
|
(4 |
) |
|
|
236 |
|
|
|
224 |
|
|
Tax effect on Amortization of acquired intangible assets and
Other (income) expense, net |
|
45 |
|
|
|
(3 |
) |
|
|
(57 |
) |
|
|
(34 |
) |
|
Adjusted net income attributable to Magna International Inc. |
$ |
369 |
|
|
$ |
419 |
|
|
$ |
1,069 |
|
|
$ |
1,189 |
|
| Diluted
weighted average number of Common Shares outstanding during the
period (millions): |
|
287.3 |
|
|
|
286.8 |
|
|
|
287.2 |
|
|
|
286.6 |
|
|
Adjusted diluted earnings per shares |
$ |
1.28 |
|
|
$ |
1.46 |
|
|
$ |
3.72 |
|
|
$ |
4.15 |
|
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 third quarter ended
September 30, 2024 results on Friday, November 1, 2024 at 8:00 a.m.
ET. The conference call will be chaired by Swamy Kotagiri, Chief
Executive Officer. The number to use for this call from North
America is 1-800-715-9871. International callers should use
1-646-307-1963. Please call in at least 10 minutes prior to the
call start time. We will also webcast the conference call at
www.magna.com. 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
(6)
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
175,000(7) employees across 343
manufacturing operations and 107 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.
(6) Manufacturing
operations, product development, engineering and sales centres
include certain operations accounted for under the equity
method.
(7) Number of employees
includes over 162,000 employees at our wholly
owned or controlled entities and over 13,000
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, Net Income Attributable to
Magna, and Ability to Repurchase Shares |
- 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
- Acquisition integration and
synergies
|
|
Equity Income |
- Same risks as Adjusted EBIT Margin,
Free Cash Flow, Net Income Attributable to Magna, and Ability to
Repurchase Shares above
- Risks related to conducting
business above through joint ventures
- Risks of doing business in foreign
markets
- Legal and regulatory
proceedings
- Changes in laws
|
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;
- 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;
- claims arising from Fisker bankruptcy;
- changes in laws;
- trade agreements;
- trade disputes/tariffs;
- increasing trade protectionism; 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/a3c24fc7-ed94-4873-98d6-72f35aea9f9f
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