AURORA, Ontario, November 9, 2017 /PRNewswire/ --
- Third quarter record sales, up 7% to $9.50 billion
- Third quarter diluted earnings per share of $1.36, increased 5%
- Returned $521 million 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, 2017.
Please click HERE for full third quarter Financial
Statements and MD&A.
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
2017 2016 2017 2016
Sales $9,499 $8,849 $28,555 $27,192
Income from operations before
income taxes $ 670 $ 692 $ 2,238 $ 2,134
Net income attributable to
Magna International Inc. $ 503 $ 503 $ 1,650 $ 1,553
Adjusted EBIT[(1)] $ 692 $ 715 $ 2,299 $ 2,202
Diluted earnings per share $ 1.36 $ 1.29 $ 4.37 $ 3.92
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 nine months ended September 30, 2017 available in
the Investor Relations section of our website at http://www.magna.com/investors.
"I'm pleased with our overall performance as we posted record
third quarter results. Magna remains well-positioned to benefit
from the shift toward electrification, autonomy, and vehicle
light-weighting. In China, our
recently announced joint-venture with HASCO was awarded a highly
integrated e-drive system for a German OEM. At the Frankfurt Auto
Show, we unveiled our MAX4 autonomous driving platform, which
enables up to Level 4 autonomous driving capabilities. Our product
breadth combined with complete vehicle design and engineering
capabilities uniquely positions Magna to be a supplier of
solutions."
- Don Walker, Magna's Chief
Executive Officer
THREE MONTHS ENDED SEPTEMBER 30,
2017
We posted third quarter record sales of $9.50 billion for the quarter ended September 30, 2017, an increase of 7% over the
third quarter of 2016. The sales increase was achieved in a
period in which European light vehicle production increased 8% and
North American light vehicle production decreased 7%, each relative
to the third quarter of 2016. Our complete vehicle assembly sales
increased 55% in the third quarter of 2017 largely reflecting the
launch of the BMW 5-Series at our assembly facility in Graz, Austria, following the end of
production of the MINI Countryman and Paceman in 2016.
During the third quarter of 2017, income from operations before
income taxes was $670 million,
compared to $692 million in the third
quarter of 2016. Net income attributable to Magna International
Inc. was $503 million for the third
quarters of both 2017 and 2016. Diluted earnings per share were
$1.36 in the third quarter of 2017
compared to $1.29 in the third
quarter of 2016, reflecting the favourable impact of a reduced
share count.
During the third quarter of 2017, Adjusted EBIT decreased 3% to
$692 million, compared to
$715 million for the third quarter of
2016. Our Asia and Rest of World
segments posted higher Adjusted EBIT and Adjusted EBIT percentage
of sales, compared to the third quarter of 2016.
During the third quarter ended September
30, 2017, we generated cash from operations of $859 million before changes in operating assets
and liabilities, and $22 million in
operating assets and liabilities. Investment activities for the
third quarter of 2017 were $537
million, including $379 million in fixed asset
additions and $158 million in
investments, other assets and intangible assets.
NINE MONTHS ENDED SEPTEMBER 30,
2017
We posted sales of $28.56 billion
for the nine months ended September 30,
2017, an increase of 5% from the nine months ended
September 30, 2016. North American
light vehicle production decreased 3% and European light vehicle
production increased 3% in the first nine months of 2017 compared
to the first nine months of 2016.
During the nine months ended September
30, 2017, income from operations before income taxes was
$2.24 billion, net income
attributable to Magna International Inc. was $1.65 billion and diluted earnings per share were
$4.37, increases of $104 million, $97
million and $0.45,
respectively, each compared to the first nine months of 2016.
During the nine months ended September
30, 2017, Adjusted EBIT increased 4% to $2.30 billion, compared to $2.20 billion for the nine months ended
September 30, 2016. Our Asia and Rest of World segments each posted
higher Adjusted EBIT and Adjusted EBIT percentage of sales,
compared to the first nine months of 2016.
During the nine months ended September
30, 2017, we generated cash from operations before changes
in operating assets and liabilities of $2.68
billion, and invested $796
million in operating assets and liabilities. Investment
activities for the first nine months of 2017 were $1.49 billion, including $1.11 billion in fixed asset additions and
$384 million in investments, other
assets and intangible assets.
RETURN OF CAPITAL TO SHAREHOLDERS
During the three months ended September
30, 2017, Magna repurchased 8.7 million shares for
$422 million. In addition, we paid
dividends of $99 million in the third
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 September 30, 2017. This dividend is payable on
December 8, 2017 to shareholders of
record on November 24, 2017.
"We continue to return capital to our shareholders while
maintaining a strong balance sheet. With the expiration
of our current Normal Course Issuer Bid ("NCIB"), we have returned
over $900 million through share
repurchases and more than $300
million in dividends as of the end of the third quarter.
Since 2012, we have returned approximately $6.7 billion to our shareholders, $5.1 billion through the repurchase of more than
20% of our outstanding shares and $1.6
billion in dividends. Our new NCIB provides flexibility to
continue repurchasing up to 10% of our shares over the next
year."
- Vince Galifi, Magna's Chief
Financial Officer
OTHER MATTERS
Subject to the approval by the Toronto Stock Exchange and the
New York Stock Exchange, our Board of Directors approved a new
Normal Course Issuer Bid ("NCIB") to purchase up to 35.8 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 15, 2017 and will
terminate one year later.
UPDATED 2017 OUTLOOK
Light Vehicle Production (Units)
North America 17.2 million
Europe 22.2 million
Production Sales
North America $19.2 - $19.6 billion
Europe $9.9 - $10.2 billion
Asia $2.3 - $2.4 billion
Rest of World $0.5 - $0.6 billion
Total Production Sales $31.9 - $32.8 billion
Complete Vehicle Assembly Sales $ 3.0 - $3.2 billion
Total Sales $38.3 - $39.5 billion
Adjusted EBIT Margin[(2)] 8.0% - 8.1%
Interest Expense, net Approximately $70 million
Income Tax Rate[(3)] Approximately 25%
Capital Spending Approximately $1.9 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 http://www.magna.com/investors and filed
electronically through the System for Electronic Document Analysis
and Retrieval (SEDAR) which can be accessed
at http://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 http://www.sec.gov.
We will hold a conference call for interested analysts and
shareholders to discuss our third quarter ended September 30, 2017 results on Thursday, November 9, 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 1-877-256-5083.
International callers should use 1-303-223-4388. Please call in at
least 10 minutes prior to the call start time. We will also webcast
the conference call at http://www.magna.com . The slide
presentation accompanying the conference call as well as
our financial review summary will be available on our
website on the morning of the call.
TAGS
Quarterly earnings, record quarter, financial results, sales
growth
OUR BUSINESS [(4)]
We are a leading global automotive supplier with 328
manufacturing operations and 99 product development, engineering
and sales centres in 29 countries. We have over 163,000 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 http://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; Magna's ability to
capitalize on the growth in vehicle electrification, autonomous
driving and vehicle light-weighting; 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.
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