AURORA, Ontario, August 11, 2017 /PRNewswire/ --
- All-time quarter record sales, up 3%
to $9.68 billion
- Second quarter record diluted
earnings per share of $1.48,
increased 5%
- Returned $484 million to
shareholders through share repurchases and dividends
Magna International Inc. (TSX: MG; NYSE: MGA) today reported
financial results for the second quarter ended June 30, 2017.
Please click HERE for full second quarter Financial
Statements and MD&A.
THREE MONTHS ENDED
JUNE 30,
2017 2016
Sales $ 9,684 $ 9,443
Income from operations before
income taxes $ 762 $ 767
Net income attributable to
Magna International Inc. $ 561 $ 558
Adjusted EBIT[(1)] $ 776 $ 789
Diluted earnings per share $ 1.48 $ 1.41
SIX MONTHS ENDED
JUNE 30,
2017 2016
Sales $ 19,056 $ 18,343
Income from operations before
income taxes $ 1,568 $ 1,442
Net income attributable to
Magna International Inc. $ 1,147 $ 1,050
Adjusted EBIT[(1)] $ 1,607 $ 1,487
Diluted earnings per share $ 3.01 $ 2.63
All results are reported in millions of U.S. dollars, except per share figures which
are in U.S. dollars.
[(1) ]Adjusted EBIT is a Non-GAAP financial measure that has no standardized meaning
under U.S. GAAP and as a result may not be comparable to the calculation of similar
measures by other companies. Adjusted EBIT represents net income before income taxes;
interest expense, net; and other expense, net. For a reconciliation of this Non-GAAP
financial measure, see our Management's Discussion and Analysis of Results of Operations
and Financial Position for the three and six months ended June 30, 2017 available in the
Investor Relations section of our website at http://www.magna.com/investors.
THREE MONTHS ENDED JUNE 30,
2017
We posted all-time quarter record sales of $9.68 billion for the second quarter ended
June 30, 2017, an increase of 3% over
the second quarter of 2016. The year over year growth was
achieved despite North American and European light vehicle
production declining by 3% and 1%, respectively, both compared to
the second quarter of 2016. Our complete vehicle assembly sales
increased 14% in the second quarter of 2017 largely reflecting the
start of production of the BMW 5-Series at our assembly facility in
Graz, Austria, partially offset by
the end of production of the MINI Countryman and Paceman in
2016.
During the second quarter of 2017, income from operations before
income taxes was $762 million, a
decrease of 1% compared to the second quarter of 2016. Net income
attributable to Magna International Inc. was a second quarter
record $561 million, an increase of
1% compared to the second quarter of 2016. Diluted earnings
per share increased $0.07 in the
second quarter of 2017, which includes the favourable impact of a
reduced share count and the higher net income attributable to Magna
International Inc.
During the second quarter of 2017, Adjusted EBIT decreased 2% to
$776 million, compared to
$789 million for the second quarter
of 2016. Our Asia and Rest of World segments posted higher
Adjusted EBIT and Adjusted EBIT percentage of sales, compared to
the second quarter of 2016.
During the second quarter ended June 30,
2017, we generated cash from operations of $948 million before changes in operating assets
and liabilities, and invested $391
million in operating assets and liabilities. Total
investment activities for the second quarter of 2017 were
$563 million, including
$420 million in fixed asset additions and $143 million in investments, other assets and
intangible assets.
SIX MONTHS ENDED JUNE 30,
2017
We posted sales of $19.06 billion
for the six months ended June 30,
2017, an increase of 4% from the six months ended
June 30, 2016. North American
light vehicle production decreased 1% and European light vehicle
production increased 1%, in the first six months of 2017 compared
to the first six months of 2016.
During the six months ended June 30,
2017, income from operations before income taxes was
$1.57 billion, net income
attributable to Magna International Inc. was $1.15 billion and diluted earnings per share was
$3.01, increases of $126 million, $97
million and $0.38,
respectively, each compared to the first six months of 2016.
During the six months ended June 30,
2017, Adjusted EBIT increased 8% to $1.61 billion, compared to $1.49 billion for the six months ended
June 30, 2016. Our North
America, Asia and Rest of World
segments each posted higher Adjusted EBIT and Adjusted EBIT
percentage of Sales, compared to the first six months of 2016.
During the six months ended June 30,
2017, we generated cash from operations before changes in
operating assets and liabilities of $1.82
billion, and invested $818
million in operating assets and liabilities. Total
investment activities for the first six months of 2017 were
$955 million, including
$729 million in fixed asset additions and $226 million in investments, other assets and
intangible assets.
RETURN OF CAPITAL TO SHAREHOLDERS
During the three months ended June 30,
2017, Magna repurchased 8.5 million shares for $383 million. In addition, we paid dividends
of $101 million in the second quarter
of 2017.
Our Board of Directors declared a quarterly dividend of
$0.275 with respect to our
outstanding Common Shares for the quarter ended June 30, 2017. This dividend is payable on
September 15, 2017 to shareholders of
record on September 1, 2017.
OTHER MATTERS
Our Board of Directors today appointed Mary Chan to serve as an independent director of
Magna and a member of the Board's Enterprise Risk Oversight
Committee. Ms. Chan brings to the Board extensive experience in
connected cars, autonomous and semi-autonomous vehicles, as well as
mobility communications infrastructure, products and services.
Since 2015, Ms. Chan has been a managing partner of VectoIQ LLP,
prior to which she served as: President, Global Connected Consumer
& OnStar Service of General Motors Company (2012-2015); Senior
VP & General Manager, Enterprise Mobility Solutions &
Services, Dell Inc. (2009-2012); and progressive executive roles,
including Executive Vice-President and President of 4G/LTE Wireless
Networks, at Alcatel-Lucent Inc. (1996-2009). Ms. Chan, who holds
B.Sc. and M.Sc. degrees in Electrical Engineering (Columbia), also
serves on the boards of Dialog Semiconductor PLC, SBA
Communications Corporation and Microelectronics Technology Inc.
UPDATED 2017 OUTLOOK
Light Vehicle Production (Units)
North America 17.4 million
Europe 22.1 million
Production Sales
North America $19.2 - $19.8 billion
Europe $9.7 - $10.1 billion
Asia $2.2 - $2.4 billion
Rest of World $0.4 - $0.5 billion
Total Production Sales $31.5 - $32.8 billion
Complete Vehicle Assembly Sales $2.8 - $3.1 billion
Total Sales $37.7 - $39.4 billion
Adjusted EBIT Margin[(2)] 8.0% - 8.2%
Interest Expense, net Approximately $75 million
Income Tax Rate[(3)] Approximately 25%
Capital Spending $1.9 - $2.0 billion
[(2)] Adjusted EBIT Margin is the ratio of Adjusted EBIT to Total Sales.
[(3)] The Income Tax Rate has been calculated using adjusted EBIT and is
based on current tax legislation.
In this 2017 outlook, we have assumed:
- 2017 light vehicle production volumes (as set out above);
- no material unannounced acquisitions or divestitures; and
- 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.
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/investors and filed electronically through the
System for Electronic Document Analysis and Retrieval (SEDAR) which
can be accessed at www.sedar.com 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, 2017 results on Friday, August 11, 2017 at 8:00 a.m. EST. The conference call will be
chaired by Don Walker, Chief
Executive Officer. The number to use for this call from
North America is +1-800-698-5833.
International callers should use +1-416-981-9091. 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 will be available on our website
Friday prior to the call.
TAGS
Quarterly earnings, record quarter, financial results, sales
growth
OUR BUSINESS [(4)]
We are a leading global automotive supplier with 327 manufacturing
operations and 100 product development, engineering and sales
centres in 29 countries. We have over 161,000 employees 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, active driver assistance, vision,
closure and roof systems and have electronic and software
capabilities across many of these areas. 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
www.magna.com .
(4) Manufacturing operations, product development, engineering and sales centres and
employee figures include certain equity-accounted operations.
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 2017; 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
typically result in lower production volume levels; the growth of
protectionism and the implementation of measures that impede the
free movement of goods, services, people and capital; planning
risks created by rapidly changing economic or political conditions;
fluctuations in relative currency values; legal claims and/or
regulatory actions against us; our ability to successfully launch
material new or takeover business; underperformance of one or more
of our operating divisions; ongoing pricing pressures, including
our ability to offset price concessions demanded by our customers;
warranty and recall 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; our ability to successfully compete with other automotive
suppliers, including disruptive technology innovators which are
entering or expanding in the automotive industry; our ability to
consistently develop innovative products or processes; our changing
risk profile due to the increasing importance to us of product
areas such as powertrain and electronics; restructuring, downsizing
and/or other significant non-recurring costs; a reduction in
outsourcing by our customers or the loss of a material production
or assembly program; a prolonged disruption in the supply of
components to us from our suppliers; shutdown of our or our
customers' or sub-suppliers' production facilities due to a labour
disruption; scheduled shutdowns of our customers' production
facilities (typically in the third and fourth quarters of each
calendar year); the termination or non-renewal by our customers of
any material production purchase order; exposure to, and ability to
offset, commodities price increases; restructuring actions by OEMs,
including plant closures; work stoppages and labour relations
disputes; 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, including tax and transfer
pricing laws; 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.
INVESTOR CONTACT:
Louis Tonelli
Vice-President, Investor Relations
louis.tonelli@magna.com
905-726-7035
MEDIA CONTACT:
Tracy
Fuerst
Director of Corporate Communications & PR
tracy.fuerst@magna.com
248-631-5396