AURORA, Ontario, November 3, 2016 /PRNewswire/ --
- Third quarter record sales up 16%, well above 3% growth in
global light vehicle production
- Third quarter record diluted earnings per share from
continuing operations increased 14%
- $288 million returned to
shareholders through share repurchases and dividends
Magna International Inc. (TSX: MG; NYSE: MGA) today reported
financial results for the third quarter ended September 30, 2016.
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
2016 2015 2016 2015
Sales $ 8,849 $ 7,661 $ 27,192 $ 23,566
Adjusted EBIT(1) $ 715 $ 565 $ 2,202 $ 1,873
Income from
continuing
operations
before
income taxes $ 692 $ 680 $ 2,134 $ 2,027
Net income from
continuing
operations
attributable
to Magna
Internationa
l Inc. $ 503 $ 470 $ 1,553 $ 1,463
Diluted earnings
per share
from
continuing
operations $ 1.29 $ 1.13 $ 3.92 $ 3.53
All results are reported in millions of U.S. dollars, except per share figures,
which are in U.S. dollars.
(1) Adjusted EBIT is the measure of segment profit or loss as reported in the
Company's attached unaudited interim consolidated financial
statements. Adjusted EBIT represents income from operations before income taxes;
interest expense, net; and other income, net.
THREE MONTHS ENDED SEPTEMBER 30,
2016
We posted sales of $8.8 billion
for the third quarter ended September 30,
2016, an increase of 16% over the third quarter of
2015. This strong year over year growth was achieved despite
North American light vehicle production increasing only 1% and
European light vehicle production declining 2%, compared to the
third quarter of 2015.
Our complete vehicle assembly sales decreased 4% in the third
quarter of 2016, compared to the third quarter of 2015, while our
complete vehicle assembly volumes decreased 19% from the comparable
quarter to approximately 19,000 units. The decreases largely
reflect that we were nearing end of production of the MINI
Countryman and Paceman.
During the third quarter of 2016, income from continuing
operations before income taxes was $692
million and net income from continuing operations
attributable to Magna International Inc. was $503 million, increases of 2% and 7%
respectively, both compared to the third quarter of 2015.
Diluted earnings per share from continuing operations increased
$0.16 or 14% in the third quarter of
2016, which includes the favourable impact of a reduced share
count.
During the third quarter ended September
30, 2016, we generated cash from operations of $796 million before changes in operating assets
and liabilities, and invested $139
million in operating assets and liabilities. Total
investment activities for the third quarter of 2016 were
$556 million, including
$390 million in fixed asset additions and $166 million in investments and other
assets.
NINE MONTHS ENDED SEPTEMBER 30,
2016
We posted sales of $27.2 billion
for the nine months ended September 30,
2016, an increase of 15% from the nine months ended
September 30, 2015. Excluding
the impact of foreign currency translation, our sales increased 17%
in the first nine months of 2016, compared to the first nine months
of 2015. In comparison, North American and European light
vehicle production increased 4% and 5%, respectively, in the first
nine months of 2016 compared to the first nine months of 2015.
Our complete vehicle assembly sales increased 1% in the first
nine months of 2016, compared to the first nine months of
2015. Complete vehicle assembly volumes decreased 14% to
approximately 68,000 units. The volume decrease largely
reflects that we were nearing end of production of the MINI
Countryman and Paceman.
During the nine months ended September
30, 2016, income from continuing operations before income
taxes was $2.1 billion and net income
from continuing operations attributable to Magna International Inc.
was $1.6 billion, increases of
$107 million and $90 million, respectively, both compared to the
first nine months of 2015. Diluted earnings per share from
continuing operations increased $0.39
or 11% for the nine months ended September
30, 2016, which includes the favourable impact of a reduced
share count.
During the nine months ended September
30, 2016, we generated cash from operations before changes
in operating assets and liabilities of $2.4
billion, and invested $759
million in operating assets and liabilities. Total
investment activities for the first nine months of 2016 were
$3.3 billion, including $1.8 billion to purchase subsidiaries,
$1.1 billion in fixed asset
additions and $323 million in
investments and other assets.
A more detailed discussion of our consolidated financial results
for the third quarter and nine months ended September 30, 2016 is contained in the
Management's Discussion and Analysis of Results of Operations and
Financial Position and the unaudited interim consolidated financial
statements and notes thereto, which are attached to this Press
Release.
RETURN OF CAPITAL TO SHAREHOLDERS
During the three and nine months ended September 30, 2016, Magna repurchased 4.7 million
shares for $191 million and 19.8
million shares for $799 million,
respectively, pursuant to our existing Normal Course Issuer Bid
which expires in November 2016.
Today, our Board of Directors declared a quarterly dividend of
$0.25 with respect to our outstanding
Common Shares for the quarter ended September 30, 2016. This dividend is payable on
December 9, 2016 to shareholders of
record on November 25, 2016.
OTHER MATTERS
Subject to the approval by the Toronto Stock Exchange and the
New York Stock Exchange, our Board of Directors approved a Normal
Course Issuer Bid ("NCIB") to purchase up to 38 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 14, 2016 and will
terminate one year later.
UPDATED 2016 OUTLOOK
Light Vehicle Production (Units)
North America 17.8 million
Europe 21.5 million
Production Sales
North America $19.2 - $19.6 billion
Europe $9.0 - $9.3 billion
Asia $2.1 - $2.2 billion
Rest of World $0.4 - $0.5 billion
Total Production Sales $30.7 - $31.6 billion
Complete Vehicle Assembly Sales $2.0 - $2.2 billion
Total Sales $35.8 - $37.0 billion
EBIT Margin(2) Approximately 8%
Interest Expense, net Approximately $90 million
Tax Rate(2) Approximately 26%
Capital Spending $1.8 - $1.9 billion
(2) Excluding other expense, net
In this 2016 outlook, in addition to 2016 light vehicle
production, we have assumed no material acquisitions or
divestitures. In addition, we have assumed that foreign exchange
rates for the most common currencies in which we conduct business
relative to our U.S. dollar reporting currency will approximate
current rates.
We will hold a conference call for interested analysts and
shareholders to discuss our third quarter results on Thursday, November 3, 2016 at 8:30 a.m. EDT. The conference call will be
chaired by Don Walker, Chief
Executive Officer. The number to use for this call is
1-800-926-6571. The number for overseas callers is 1-416-981-9025.
Please call in at least 10 minutes prior to the call. We will also
webcast the conference call at http://www.magna.com. The slide
presentation accompanying the conference call will be available on
our website Thursday morning prior to the call.
TAGS
Quarterly earnings, record quarter, financial results, sales
growth
ABOUT MAGNA INTERNATIONAL
We are a leading global automotive supplier with 312 manufacturing
operations(3) and 98 product development, engineering
and sales centres(3) in 29 countries. We have over
155,000 employees(3) focused on delivering superior
value to our customers through innovative products and processes,
and world class manufacturing. We have complete vehicle
engineering and contract manufacturing expertise, as well as
product capabilities which include body, chassis, exterior,
seating, powertrain, electronic, active driver assistance, vision,
closure and roof systems. Our common shares trade on the
Toronto Stock Exchange (MG) and the New York Stock Exchange (MGA).
For further information about Magna, visit our website at
http://www.magna.com.
FORWARD-LOOKING STATEMENTS
This press release contains statements that constitute
"forward-looking statements" or "forward-looking information"
within the meaning of applicable securities legislation, including,
but not limited to, statements relating to: Magna's forecasts of
light vehicle production in North
America and Europe;
expected consolidated sales, based on such light vehicle production
volumes; production sales, including expected split by segment, in
its North America, Europe, Asia
and Rest of World segments for 2016; complete vehicle assembly
sales; consolidated EBIT margin, net interest expense; effective
income tax rate; fixed asset expenditures; and future returns of
capital to our shareholders, including through dividends or share
repurchases. The forward-looking statements or forward-looking
information in this press release is presented for the purpose of
providing information about management's current expectations and
plans and such information may not be appropriate for other
purposes. Forward-looking statements or forward-looking information
may include financial and other projections, as well as statements
regarding our future plans, 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", "believe", "intend", "plan", "forecast",
"outlook", "project", "estimate" and similar expressions suggesting
future outcomes or events to identify forward-looking statements or
forward-looking information. Any such forward-looking statements or
forward-looking information 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. However, whether actual results and developments
will conform with 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: the potential for a
deterioration of economic conditions or an extended period of
economic uncertainty; a decline in consumer confidence, which would
be expected to result in lower production volume levels; economic
or political uncertainty, including as a result of the U.K.'s
potential exit from the European Union and/or the outcome of the
2016 U.S. Presidential election; legal claims and/or regulatory
actions against us, including without limitation any proceedings
that may arise out of our global review focused on anti-trust risk;
underperformance of one or more of our operating divisions; ongoing
pricing pressures, including our ability to offset price
concessions demanded by our customers; our ability to successfully
launch material new or takeover business; restructuring, downsizing
and/or other significant non-recurring costs; our ability to
successfully identify, complete and integrate acquisitions or
achieve anticipated synergies; our ability to conduct appropriate
due diligence on acquisition targets; an increase in our risk
profile as a result of completed acquisitions; shifts in
market share away from our top customers; shifts in market shares
among vehicles or vehicle segments, or shifts away from vehicles on
which we have significant content; inability to sustain or grow our
business; risks of conducting business in foreign markets,
including China, India, Eastern
Europe, Brazil and other
non-traditional markets for us; fluctuations in relative currency
values; a prolonged disruption in the supply of components to us
from our suppliers; work stoppages and labour relations disputes;
scheduled shutdowns of our customers' production facilities
(typically in the third and fourth quarters of each calendar year);
our ability to successfully compete with other automotive
suppliers; a reduction in outsourcing by our customers or the loss
of a material production or assembly program; the termination or
non-renewal by our customers of any material production purchase
order; our ability to consistently develop innovative products or
processes; exposure to, and ability to offset, volatile commodities
prices; warranty and recall costs; restructuring actions by OEMs,
including plant closures; shutdown of our or our customers' or
sub-suppliers' production facilities due to a labour disruption;
risk of production disruptions due to natural disasters or
catastrophic event; the security and reliability of our information
technology systems; pension liabilities; changes in our mix of
earnings between jurisdictions with lower tax rates and those with
higher tax rates, as well as our ability to fully benefit tax
losses; impairment charges related to goodwill, long-lived assets
and deferred tax assets; other potential tax exposures; changes in
credit ratings assigned to us; changes in laws and governmental
regulations; costs associated with compliance with environmental
laws and regulations; liquidity risks; inability to achieve future
investment returns that equal or exceed past returns; the
unpredictability of, and fluctuation in, the trading price of our
Common Shares; and other factors set out in our Annual Information
Form filed with securities commissions in Canada and our annual report on Form 40-F
filed with the United States Securities and Exchange Commission,
and subsequent filings. In evaluating forward-looking statements or
forward-looking information, we caution readers not to place undue
reliance on any forward-looking statements or forward-looking
information, and 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
or forward-looking information. Unless otherwise required by
applicable securities laws, we do not intend, nor do we undertake
any obligation, to update or revise any forward-looking statements
or forward-looking information to reflect subsequent information,
events, results or circumstances or otherwise.
(3) These figures include manufacturing operations,
product development, engineering and sales centres and employees in
certain equity-accounted operations
INVESTOR CONTACT: Louis Tonelli,
Vice-President, Investor Relations, louis.tonelli@magna.com,
+1-905-726-7035; MEDIA CONTACT: Tracy
Fuerst, Director of Corporate Communications & PR,
tracy.fuerst@magna.com , +1-248-631-5396