AURORA, Ontario, August 8, 2014 /PRNewswire/ --
Magna International Inc. (TSX: MG; NYSE: MGA) today
reported financial results for the second quarter ended
June 30, 2014.
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
2014 2013 2014 2013
Sales $ 9,464 $ 8,962 $ 18,425 $ 17,323
Adjusted EBIT(1) $ 710 $ 547 $ 1,315 $ 1,014
Income from operations
before income taxes $ 692 $ 543 $ 1,273 $ 1,000
Net income attributable to
Magna International Inc. $ 510 $ 415 $ 903 $ 784
Diluted earnings per share $ 2.32 $ 1.78 $ 4.08 $ 3.35
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 expense, net.
THREE MONTHS ENDED JUNE 30,
2014
We posted record sales of $9.46
billion for the second quarter ended June 30, 2014, an increase of 6% over the second
quarter of 2013. We achieved this sales increase in a period when
vehicle production increased 3% in North
America and 2% in Europe,
both relative to the second quarter of 2013. In the second quarter
of 2014, our North American, European and Asian production sales
increased, while Rest of World production sales, complete vehicle
assembly sales and tooling, engineering and other sales decreased,
in each case relative to the comparable quarter in 2013.
Complete vehicle assembly sales decreased to $793 million for the second quarter of 2014
compared to $796 million for the
second quarter of 2013, while complete vehicle assembly volumes
decreased 11% to approximately 34,000 units.
During the second quarter of 2014, income from operations before
income taxes was $692 million, net
income attributable to Magna International Inc. was $510 million and diluted earnings per share were
$2.32, increases of $149 million, $95
million and $0.54
respectively, each compared to the second quarter of 2013.
During the second quarter ended June 30,
2014, we generated cash from operations of $748 million before changes in operating assets
and liabilities, and invested $148
million in operating assets and liabilities. Total
investment activities for the second quarter of 2014 were
$432 million, including $384 million in fixed asset additions and
$48 million in investments and other
assets.
Financing activities during the second quarter ended
June 30, 2014 included the issuance
of $750 million of 3.625% fixed rate
Senior Notes which mature on June 15,
2024, as well as the repurchase of $575 million of our Common Shares.
SIX MONTHS ENDED JUNE 30,
2014
We posted record sales of $18.43
billion for the six months ended June
30, 2014, an increase of 6% from the six months ended
June 30, 2013. This higher sales
level reflected increases in our North American, European and Asian
production sales, as well as complete vehicle assembly sales,
partially offset by decreases in Rest of World production sales and
tooling, engineering and other sales, in each case relative to the
first six months of 2013.
During the six months ended June 30,
2014, vehicle production increased 4% to 8.6 million units
in North America and 6% to 10.5
million units in Europe, each
compared to the first six months of 2013.
Complete vehicle assembly sales increased 1% to $1.61 billion for the six months ended
June 30, 2014 compared to the six
months ended June 30, 2013, while
complete vehicle assembly volumes decreased 8% to approximately
70,000 units.
During the six months ended June 30,
2014, income from operations before income taxes was
$1.27 billion, net income
attributable to Magna International Inc. was $903 million and diluted earnings per share were
$4.08, increases of $273 million, $119
million and $0.73,
respectively, each compared to the first six months of 2013.
During the six months ended June 30,
2014, we generated cash from operations before changes in
operating assets and liabilities of $1.42
billion, and invested $345
million in operating assets and liabilities. Total
investment activities for the first six months of 2014 were
$703 million, including $601 million in fixed asset additions and a
$102 million increase in investments
and other assets.
Financing activities during the six months ended June 30, 2014 included the issuance of
$750 million of 3.625% fixed rate
Senior Notes which mature on June 15,
2024, as well as the repurchase of $815 million of our Common Shares.
A more detailed discussion of our consolidated financial results
for the second quarter and six months ended June 30, 2014 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.
DIVIDENDS
Yesterday, our Board of Directors declared a quarterly dividend
of $0.38 with respect to our
outstanding Common Shares for the quarter ended June 30, 2014. This dividend is payable on
September 12, 2014 to shareholders of
record on August 29, 2014.
UPDATED 2014 OUTLOOK
Light Vehicle Production (Units) 16.9 million
North America 19.8 million
Europe
Production Sales
North America $17.6 - $18.2 billion
Europe $9.9 - $10.3 billion
Asia $1.6 - $1.8 billion
Rest of World $0.7 - $0.8 billion
Total Production Sales $29.8 - $31.1 billion
Complete Vehicle Assembly Sales $3.0 - $3.3 billion
Total Sales $35.6 - $37.3 billion
Operating Margin(1) High 6% range
Tax Rate(1) Approximately 24.5%
Capital Spending Approximately $1.4 billion
(1) Excluding other expense, net
In this 2014 outlook, in addition to 2014 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 a leading global automotive supplier with 317
manufacturing operations and 83 product development, engineering
and sales centres in 29 countries. We have over 130,000 employees
focused on delivering superior value to our customers through
innovative products and processes, and World Class Manufacturing.
Our product capabilities include producing body, chassis, interior,
exterior, seating, powertrain, electronic, vision, closure and roof
systems and modules, as well as complete vehicle engineering and
contract manufacturing. 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.
We will hold a conference call for interested analysts and
shareholders to discuss our second quarter results on Friday, August 8, 2014 at 8:00 a.m. EDT. The conference call will be
chaired by Don Walker, Chief
Executive Officer. The number to use for this call is
1-800-404-8174. The number for overseas callers is 1-416-981-9093.
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 Friday morning prior to the call.
FORWARD-LOOKING STATEMENTS
The previous discussion contains statements that constitute
"forward-looking information" or "forward-looking statements"
within the meaning of applicable securities legislation, including,
but not limited to, statements relating to: Magna's expected
production sales, based on expected light vehicle production in
North America and Europe; Magna's expected production sales in
the North America, Europe, Asia
and Rest of World segments; total sales; complete vehicle assembly
sales; consolidated operating margin; effective income tax rate;
fixed asset expenditures; future purchases of our Common Shares
under our Normal Course Issuer Bid; and future issuances of debt
securities. The forward-looking information in this document 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 impact of economic or political conditions on
consumer confidence, consumer demand for vehicles and vehicle
production; our ability to successfully launch material new or
takeover business; continued underperformance of one or more of our
operating Divisions; restructuring, downsizing or other significant
non-recurring costs, including in our European business; ongoing
pricing pressures, including our ability to offset price
concessions demanded by our customers; warranty and recall costs;
fines or penalties imposed by antitrust and regulatory authorities,
including the German Cartel Office; our ability to grow our
business with Asian-based customers; 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; risks of conducting business in foreign
markets, including China,
India, Russia, Brazil, Argentina, Eastern
Europe and other nontraditional markets for us; 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 work stoppage or labour dispute; 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;
impairment charges related to goodwill and long-lived assets;
exposure to, and ability to offset, volatile commodities prices;
fluctuations in relative currency values; our ability to
successfully identify, complete and integrate acquisitions or
achieve anticipated synergies; our ability to conduct sufficient
due diligence on acquisition targets; risk of production
disruptions due to natural disasters; pension liabilities; legal
claims and/or regulatory actions against us; 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; changes in credit ratings
assigned to us; changes in laws and governmental regulations; costs
associated with compliance with environmental laws and regulations;
liquidity risks as a result of an unanticipated deterioration of
economic conditions; our ability 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, 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:
Louis Tonelli, Vice-President,
Investor Relations at +1-905-726-7035.
For teleconferencing questions, please contact Nancy Hansford at +1-905-726-7108.
(MG. MGA)