AURORA, Canada, February 23, 2011 /PRNewswire/ -- Magna
International Inc. (TSX: MG; NYSE: MGA) today reported financial
results for the fourth quarter and year ended December 31, 2010.
Three Months Ended Year Ended December
December 31, 31,
2010 2009 2010 2009
Sales $ 6,598 $ 5,419 $ 24,102 $ 17,367
Operating income (loss) $ 222 $ (125) $ 1,197 $ (511)
Net income (loss) $ 216 $ (139) $ 973 $ (493)
Diluted earnings (loss)
per share $ 0.88 $ (0.62) $ 4.18 $ (2.21)
All results are reported in millions of U.S. dollars, except per
share figures, which are in U.S. dollars.
Three Months Ended December 31,
2010
We posted sales of $6.6 billion
for the fourth quarter ended December 31,
2010, an increase of 22% from the fourth quarter of 2009.
This higher sales level was a result of increases in our North
American, European and Rest of World production sales, complete
vehicle assembly sales and tooling, engineering and other
sales.
During the fourth quarter of 2010, North American and European
average dollar content per vehicle increased by 17% and 6%,
respectively, each compared to the fourth quarter of 2009. In
addition, North American and European vehicle production both
increased 7%, compared to the fourth quarter of 2009.
Complete vehicle assembly sales increased 19% to $608 million for the fourth quarter of 2010
compared to $512 million for the
fourth quarter of 2009, while complete vehicle assembly volumes
increased 59% to approximately 25,000 units.
During the fourth quarter of 2010, operating income was
$222 million, net income was
$216 million and diluted earnings per
share were $0.88, increases of
$347 million, $355 million and $1.50, respectively, each compared to the fourth
quarter of 2009.
During the fourth quarter ended December
31, 2010, we generated cash from operations of $415 million before changes in non-cash operating
assets and liabilities, and generated $499
million from non-cash operating assets and liabilities.
Total investment activities for the fourth quarter of 2010 were
$445 million, including $305 million in fixed asset additions,
$98 million to purchase subsidiaries,
and $42 million in investments and
other assets.
Year Ended Decemer 31, 2010
We posted sales of $24.1 billion
for the year ended December 31, 2010,
an increase of 39% from the year ended December 31, 2009. This higher sales level was a
result of increases in our North American, European and Rest of
World production sales, complete vehicle assembly sales and
tooling, engineering and other sales.
During the year ended December 31,
2010, vehicle production increased 39% to 12.0 million units
in North America and 12% to 13.3
million units in Europe, each
compared to 2009.
Also during 2010, our North American and European average dollar
content per vehicle increased 13% and 8% respectively, each
compared to 2009.
Complete vehicle assembly sales increased 23% to $2.2 billion for the year ended December 31, 2010 compared to $1.8 billion for the year ended December 31, 2009, while complete vehicle
assembly volumes increased 52% to approximately 86,000 units.
During the year ended December 31,
2010, operating income was $1.2
billion, net income was $973
million and diluted earnings per share were $4.18, increases of $1.7
billion, $1.5 billion and
$6.39, respectively, each compared to
2009.
During the year ended December 31,
2010, we generated cash from operations before changes in
non-cash operating assets and liabilities of $1.7 billion, and generated $177 million from non-cash operating assets and
liabilities. Total investment activities for 2010 were $1.0 billion, including $784 million in fixed asset additions,
$141 million in investments and other
assets and $106 million to purchase
subsidiaries.
Don Walker, Magna's Chief
Executive Officer commented: "In 2010, Magna benefitted from a
strong recovery in vehicle production, both in our primary markets
of North America and Western Europe as well as globally. We are
positioned to capitalize on continued growth in global vehicle
production in 2011 and beyond, as we further expand our
manufacturing footprint in a number of growing regions of the
world."
A more detailed discussion of our consolidated financial results
for the fourth quarter and year ended December 31, 2010 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.
Increased Quarterly Cash Dividend
Our Board of Directors also declared a quarterly dividend with
respect to our outstanding Common Shares for the quarter ended
December 31, 2010. In light of
Magna's performance, the Board decided to increase the dividend by
39% to U.S. $0.25 per share. This
dividend is payable on March 23, 2011
to shareholders of record on March 11,
2011.
"Our strong earnings and cash flow generation over the past year
has enabled our Board to increase our dividend for the third time
since we re-established our quarterly dividend last May", stated
Vince Galifi, Magna's Executive Vice
President and Chief Financial Officer.
2011 Outlook
For the full year 2011, we expect consolidated total sales to be
between $25.6 billion and $27.1
billion, and expect consolidated production sales to be
between $21.7 billion and $22.7
billion, based on full year 2011 light vehicle production
volumes of approximately 12.9 million units in North America and approximately 13.3 million
units in Western Europe. We expect
full year 2011 production sales to be between $12.7 billion and $13.2 billion in North America, between $7.8 billion and $8.1 billion in Europe and between $1.2
billion and $1.4 billion in Rest of World. We expect full
year 2011 complete vehicle assembly sales to be between
$2.4 billion and $2.7 billion. We
expect our 2011 effective income tax rate to be approximately
20%.
In addition, we expect that our full year 2011 spending for
fixed assets will be between $1.0 billion
and $1.1 billion. This amount reflects continuing investment
to support new and replacement business in our traditional markets
as well as investment to expand in a number of high-growth markets.
Finally, we expect our full year 2011 consolidated operating margin
percentage, excluding unusual items, to be approximately 5%.
In this 2011 outlook, in addition to 2011 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.
About Magna
We are the most diversified global automotive supplier. We
design, develop and manufacture technologically advanced automotive
systems, assemblies, modules and components, and engineer and
assemble complete vehicles, primarily for sale to original
equipment manufacturers ("OEMs") of cars and light trucks. Our
capabilities include the design, engineering, testing and
manufacture of automotive interior systems; seating systems;
closure systems; body and chassis systems; vision systems;
electronic systems; exterior systems; powertrain systems; roof
systems; hybrid and electric vehicles/systems; as well as complete
vehicle engineering and assembly.
We have over 96,000 employees in 256 manufacturing operations
and 82 product development, engineering and sales centres in 26
countries.
We will hold a conference call for interested analysts and
shareholders to discuss our fourth quarter results on Wednesday, February 23, 2011 at 6:00 p.m. EST. The conference call will be
chaired by Donald J. Walker, Chief
Executive Officer. The number to use for this call is
1-800-913-1647. The number for overseas callers is 1-212-231-2902.
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 Wednesday afternoon prior to the call.
Forward-Looking Statements
The previous discussion contains statements that constitute
"forward-looking statements" within the meaning of applicable
securities legislation, including, but not limited to, statements
relating to: Magna's expected consolidated sales, based on expected
light vehicle production in North
America and Europe; Magna's
expected production sales in the North
America, Europe and Rest of
World segments; complete vehicle assembly sales; effective income
tax rate; fixed asset expenditures; expansion in high-growth
markets; and consolidated operating margin. The 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 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. Any such
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. 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 slower
than anticipated economic recovery or a deterioration of economic
conditions; a significant decline in production volumes from
current levels; the inability of suppliers to timely accommodate
significant, rapid increases in production volumes; our dependence
on outsourcing by our customers; the termination or non renewal by
our customers of any material contracts; our ability to identify
and successfully exploit shifts in technology; restructuring,
downsizing and/or other significant non-recurring costs; impairment
charges; our ability to successfully grow our sales to
non-traditional customers; unfavourable product or customer mix;
risks of conducting business in foreign countries, including
China, India, Brazil, Russia and other developing markets; our
ability to quickly shift our manufacturing footprint to take
advantage of lower cost manufacturing opportunities; our ability to
secure sufficient amounts of capital to meet our liquidity
requirements on favourable terms; disruptions in the capital and
credit markets; the deteriorating economic condition of several
European governments and the potential adverse effect on the global
economy; fluctuations in relative currency values; exposure to
escalating commodities prices; our ability to successfully
identify, complete and integrate acquisitions; pricing pressures,
including our ability to offset price concessions demanded by our
customers; warranty and recall costs; the financial condition and
credit worthiness of some of our OEM customers, including the
potential that such customers may not make, or may seek to delay or
reduce, payments owed to us; the financial condition of some of our
suppliers and the risk of their insolvency, bankruptcy or financial
restructuring; the highly competitive nature of the automotive
parts supply business; product liability claims in excess of our
insurance coverage; 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; other potential
tax exposures; legal claims against us; work stoppages and labour
relations disputes; changes in laws and governmental regulations;
costs associated with compliance with environmental laws and
regulations; risks associated with our pursuit of opportunities in
complementary "non-automotive" businesses; risks associated with
our partnership, Magna E-Car Systems, with the Stronach group to
continue to pursue opportunities in the vehicle electrification
business; 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, including, without limitation, factors set
out in our Management Information Circular/Proxy Statement, dated
May 31, 2010 under the heading "Risks
Relating to the Vehicle Electrification Joint Venture" and "Risks
to Magna of the E-Car Business". In evaluating forward-looking
statements, we caution readers not to place undue reliance on any
forward-looking statements 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. 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 to reflect
subsequent information, events, results or circumstances or
otherwise.
For further information about Magna, please see our website at
http://www.magna.com. Copies of financial data and other publicly
filed documents are available through the internet on the Canadian
Securities Administrators' System for Electronic Document Analysis
and Retrieval (SEDAR) which can be accessed at http://www.sedar.com
and 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
For further information, please contact Louis Tonelli, Vice-President, Investor
Relations at +1-905-726-7035.
For teleconferencing questions, please contact Karin Kaminski at +1-905-726-7103.