AURORA, Ontario, November 5, 2014 /PRNewswire/ --
Magna International Inc. (TSX: MG; NYSE: MGA) today
reported financial results for the third quarter ended September 30, 2014.
THREE MONTHS NINE MONTHS
ENDED ENDED
SEPTEMBER 30, SEPTEMBER 30,
2014 2013 2014 2013
Sales $ 8,820 $ 8,338 $ 27,245 $ 25,661
Adjusted EBIT(1) $ 605 $ 444 $ 1,920 $ 1,458
Income from operations before income taxes $ 589 $ 391 $ 1,862 $ 1,391
Net income attributable to Magna International
Inc. $ 470 $ 319 $ 1,373 $ 1,103
Diluted earnings per share $ 2.19 $ 1.39 $ 6.26 $ 4.74
All results are reported in millions of U.S. dollars, except per share figures, which are in U.S. dollars.
(1) We believe Adjusted EBIT is the most appropriate measure of
operational profitability or loss of our reporting segments.
Adjusted EBIT represents income from operations before taxes;
interest expense, net; and other expense, net.
THREE MONTHS ENDED SEPTEMBER 30,
2014
We posted sales of $8.82 billion
for the third quarter ended September 30,
2014, an increase of 6% from the third quarter of 2013. We
achieved this sales increase in a period when vehicle production
increased 8% in North America and
4% in Europe, both relative to the
third quarter of 2013. In the third quarter of 2014, our North
American and Asian production sales, complete vehicle assembly
sales and tooling, engineering and other sales increased, while our
European and Rest of World production sales decreased, in each case
relative to the comparable quarter in 2013.
Complete vehicle assembly sales increased 9% to $740 million for the third quarter of 2014
compared to $680 million for the
third quarter of 2013, while complete vehicle assembly volumes
decreased 5% to approximately 32,000 units.
During the third quarter of 2014, income from operations before
income taxes was $589 million, net
income attributable to Magna International Inc. was $470 million and diluted earnings per share were
$2.19, increases of $198 million, $151
million and $0.80
respectively, each compared to the third quarter of 2013.
Excluding other expense, after tax for the third quarters of
2014 and 2013, income from operations before income taxes, net
income attributable to Magna International Inc. and diluted
earnings per share increased $157
million, $124 million and
$0.69 respectively, each compared to
the third quarter of 2013.During the third quarter ended
September 30, 2014, we generated cash
from operations of $737 million
before changes in operating assets and liabilities, and invested
$18 million in operating assets and
liabilities. Total investment activities for the third quarter of
2014 were $365 million, including
$315 million in fixed asset additions
and a $50 million increase in
investments and other assets.
NINE MONTHS ENDED SEPTEMBER 30,
2014
We posted sales of $27.25 billion
for the nine months ended September 30,
2014, an increase of 6% from the nine months ended
September 30, 2013. This higher sales
level reflected increases in our North American, European and Asian
production sales, complete vehicle assembly sales and tooling,
engineering and other sales partially offset by a decrease in Rest
of World production sales, in each case relative to the first nine
months of 2013.
During the nine months ended September
30, 2014, vehicle production increased 5% to 12.8 million
units in North America and
increased 6% to 15.2 million units in Europe, each compared to the first nine months
of 2013.
Complete vehicle assembly sales increased 3% to $2.35 billion for the nine months ended
September 30, 2014 compared to
$2.27 billion for the nine months
ended September 30, 2013, while
complete vehicle assembly volumes decreased 7% to approximately
102,000 units.
During the nine months ended September
30, 2014, income from operations before income taxes was
$1.86 billion, net income
attributable to Magna International Inc. was $1.37 billion and diluted earnings per share were
$6.26, increases of $471 million, $270
million and $1.52,
respectively, each compared to the first nine months of 2013.
Excluding other expense, after tax for the nine months ended
September 30, 2014 and 2013, and the
impact of the Austrian tax reform for the nine months ended
September 30, 2014, income from
operations before income taxes, net income attributable to Magna
International Inc. and diluted earnings per share increased
$457 million, $299 million and $1.67 respectively, each compared to the nine
months ended September 30, 2013.
During the nine months ended September
30, 2014, we generated cash from operations before changes
in operating assets and liabilities of $2.16
billion, and invested $363
million in operating assets and liabilities. Total
investment activities for the first nine months of 2014 were
$1.07 billion, including $916 million in fixed asset additions and a
$152 million increase in investments
and other assets.
A more detailed discussion of our consolidated financial results
for the third quarter and nine months ended September 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
Today, our Board of Directors declared a quarterly dividend of
$0.38 with respect to our outstanding
Common Shares for the quarter ended September 30, 2014. This dividend is payable on
December 12, 2014 to shareholders of
record on November 28, 2014.
OTHER MATTERS
Subject to approval by the Toronto Stock Exchange and the New
York Stock Exchange, our Board of Directors approved a normal
course issuer bid to purchase up to 20 million of our Common
Shares, representing approximately 9.8% of our public float of
Common Shares. This new normal course issuer bid is expected to
commence on or about November 13,
2014 and will terminate one year later.
UPDATED 2014 OUTLOOK
Light Vehicle Production (Units)
North America 17.0 million
Europe 20.2 million
Production Sales
North America $17.9 - $18.3 billion
Europe $9.7 - $10.0 billion
Asia $1.6 - $1.7 billion
Rest of World $0.6 - $0.7 billion
Total Production Sales $29.8 - $30.7 billion
Complete Vehicle Assembly Sales $3.1 - $3.3 billion
Total Sales $35.8 - $37.0 billion
Operating Margin(1) Approximately 6.9%
Tax Rate(1,2) Approximately 24.5%
Capital Spending Approximately $1.4 billion
(1) Excluding other expense, net
(2) Excluding the impact of the Austrian tax reform
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 312
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 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 third quarter results on Wednesday, November 5, 2014 at 8:30 a.m. EST. The conference call will be
chaired by Don Walker, Chief
Executive Officer. The number to use for this call is
1-800-381-7839. The number for overseas callers is +1-212-231-2913.
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 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: forecast light vehicle
production volumes in North
America and Europe; Magna's
expected production sales in its North
America, Europe and Rest of
World segments; total sales; complete vehicle assembly sales;
consolidated operating margin; average effective income tax rate;
capital spending; future repurchases of Common Shares under our
Normal Course Issuer Bid; and other matters. 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 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 or CADE,
Brazil's competition authority;
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 non-traditional 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)