AURORA, Ontario, November 5, 2015 /PRNewswire/ --
Magna International Inc. (TSX: MG; NYSE: MGA) today
reported financial results for the third quarter ended September 30, 2015.
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
2015 2014 2015 2014
Sales $ 7,661 $ 8,247 $ 23,566 $ 25,613
Adjusted EBIT[1] $ 565 $ 627 $ 1,873 $ 1,967
Income from continuing operations before
income taxes $ 680 $ 611 $ 2,027 $ 1,909
Net income from continuing operations
attributable to
Magna International
Inc. $ 470 $ 487 $ 1,463 $ 1,408
Diluted earnings per share
from continuing
operations $ 1.13 $ 1.14 $ 3.53 $ 3.21
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 (income) expense, net.
BASIS OF PRESENTATION
In the third quarter of 2015, we sold substantially all of our
interiors operations (excluding our seating operations). The assets
and liabilities, and operating results for the previously reported
interiors operations are presented as discontinued operations and
have therefore been excluded from both continuing operations and
segment results for all periods presented in the attached financial
statements. This Press Release reflects the results of continuing
operations, unless otherwise noted.
THREE MONTHS ENDED SEPTEMBER 30,
2015
We posted sales of $7.7 billion
for the third quarter ended September 30,
2015, a decrease of 7% from the third quarter of 2014. The
weakening of certain currencies against our U.S. dollar reporting
currency, in particular the euro and Canadian dollar, had a
significant negative impact on our reported sales for the third
quarter of 2015. Foreign currency translation reduced our sales by
approximately $870 million, as
compared to the third quarter of 2014. Excluding the impact of
foreign currency translation, our sales increased 3% in the third
quarter of 2015, compared to the third quarter of 2014. North
American light vehicle production increased 4% to 4.3 million units
and European light vehicle production increased 4% to 4.7 million
units in the third quarter of 2015, compared to the third quarter
of 2014.
Excluding the impact of foreign currency translation, our
complete vehicle assembly sales decreased 18% in the third quarter
of 2015, compared to the third quarter of 2014. Complete vehicle
assembly volumes decreased 28% to approximately 23,000 units.
During the third quarter of 2015, income from continuing
operations before income taxes was $680
million, an increase of $69
million over the third quarter of 2014. Net income from
continuing operations attributable to Magna International Inc. was
$470 million and diluted earnings per
share from continuing operations were $1.13, decreases of $17
million and $0.01
respectively, both compared to the third quarter of 2014.
For the third quarter of 2015, other (income) expense positively
impacted income from continuing operations before income taxes by
$124 million, net income from
continuing operations attributable to Magna International Inc. by
$68 million, and diluted earnings per
share from continuing operations by $0.16, respectively.
For the third quarter of 2014, other (income) expense negatively
impacted income from continuing operations before income taxes by
$7 million, net income from
continuing operations attributable to Magna International Inc. by
$6 million, and diluted earnings per
share from continuing operations by $0.01, respectively.
During the third quarter ended September
30, 2015, we generated cash from operations of $563 million before changes in operating assets
and liabilities, and $33 million in
operating assets and liabilities. Total investment activities for
the third quarter of 2015 were $434
million, including $360
million in fixed asset additions and $74 million in investments and other assets.
NINE MONTHS ENDED SEPTEMBER 30,
2015
We posted sales of $23.6 billion
for the nine months ended September 30,
2015, a decrease of 8% from the nine months ended
September 30, 2014. The weakening of
certain currencies against our U.S. dollar reporting currency, in
particular the euro and Canadian dollar, had a significant negative
impact on our reported sales for the first nine months of 2015.
Foreign currency translation reduced our sales by approximately
$2.6 billion, as compared to the
first nine months of 2014. Excluding the impact of foreign currency
translation, our sales increased 2% in the first nine months of
2015, compared to the first nine months of 2014.
During the nine months ended September
30, 2015, vehicle production increased 2% to 12.9 million
units in North America and
increased 2% to 15.3 million units in Europe, each compared to the first nine months
of 2014.
Excluding the impact of foreign currency translation, our
complete vehicle assembly sales decreased 12% in the first nine
months of 2015, compared to the first nine months of 2014. Complete
vehicle assembly volumes decreased 23% to approximately 79,000
units.
During the nine months ended September
30, 2015, income from continuing operations before income
taxes was $2.0 billion, net income
from continuing operations attributable to Magna International Inc.
was $1.5 billion and diluted earnings
per share from continuing operations were $3.53, increases of $118
million, $55 million and
$0.32, respectively, each compared to
the first nine months of 2014.
For the nine months ended September 30,
2015, other (income) expense positively impacted income from
continuing operations before income taxes by $181 million, net income from continuing
operations attributable to Magna International Inc. by $110 million, and diluted earnings per share from
continuing operations by $0.26
respectively.
For the nine months ended September 30,
2014, other (income) expense negatively impacted income from
continuing operations before income taxes by $40 million. In addition, for the nine months
ended September 30, 2014, other
(income) expense and the impact of the Austrian tax reform together
negatively impacted net income from continuing operations
attributable to Magna International Inc. by $68 million, and diluted earnings per share from
continuing operations by $0.16,
respectively.
During the nine months ended September
30, 2015, we generated cash from operations before changes
in operating assets and liabilities of $1.9
billion, and invested $587
million in operating assets and liabilities. Total
investment activities for the first nine months of 2015 were
$1.1 billion, including $987 million in fixed asset additions,
$152 million in investments and other
assets and $1 million to purchase
subsidiaries.
A more detailed discussion of our consolidated financial results
for the third quarter and nine months ended September 30, 2015 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 $0.22 with respect to our
outstanding Common Shares for the quarter ended September 30, 2015. This dividend is payable on
December 11, 2015 to shareholders of
record on November 27, 2015.
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 40 million of our Common
Shares, representing approximately 9.9% of our public float of
Common Shares. This normal course issuer bid is expected to
commence on or about November 13,
2015 and will terminate one year later.
UPDATED 2015 OUTLOOK
The table below reflects our 2015 outlook and 2014 actual
results, both from continuing operations:
2014
2015 Outlook Actual
Light Vehicle Production
(Units)
17.0
North America 17.4 million million
20.1
Europe 20.5 million million
Production Sales
$17.4 - $17.8 $17.4
North America billion billion
$7.0 - $7.3 $8.8
Europe billion billion
$1.5 - $1.6 $1.6
Asia billion billion
$0.4 - $0.5 $0.7
Rest of World billion billion
Total
Production $26.3 - $27.2 $28.5
Sales billion billion
Complete Vehicle Assembly $2.3 - $2.5 $3.2
Sales billion billion
$31.3 - $32.6 $34.4
Total Sales billion billion
Approximately
Operating Margin[1] 7.7% 7.7%
Approximately
Tax Rate[1] 26% 25.0%
Approximately $1.5
Capital Spending $1.5 billion billion
[1] Excluding other (income) expense, net
In this 2015 outlook, in addition to 2015 light vehicle
production, we have assumed no material acquisitions or
divestitures other than the divestiture of substantially all of our
interior operations as discussed above. 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 285
manufacturing operations and 83 product development, engineering
and sales centres in 29 countries. We have over 125,000 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, 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 Thursday, November 5, 2015 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 is
1-800-616-7436. The number for overseas callers is 1-303-223-4365.
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 Thursday morning prior to the
call.
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 2015; complete vehicle assembly
sales; consolidated operating margin, effective income tax rate;
fixed asset expenditures; and future purchases of Common Shares
under our NCIB. 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; fluctuations in relative currency values;
restructuring, downsizing and/or other significant non-recurring
costs; continued underperformance of one or more of our operating
Divisions; our ability to successfully launch material new or
takeover business; shifts in market share away from our top
customers; our inability to grow our business with OEMs; shifts in
market shares among vehicles or vehicle segments, or shifts away
from vehicles on which we have significant content; 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); our ability to successfully
compete with other automotive suppliers; 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; impairment charges related to
goodwill and long-lived assets; exposure to, and ability to offset,
volatile commodities prices; risk of production disruptions due to
natural disasters or other catastrophic events; the security and
reliability of our IT systems; legal claims and/or regulatory
actions against us, including the ongoing antitrust investigations
being conducted by German and Brazilian authorities and any
proceedings that may arise out of the internal global review
initiated by us focused on anti-trust risk; 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; our ability to successfully identify, complete and
integrate acquisitions or achieve anticipated synergies; our
ability to conduct appropriate due diligence on acquisition
targets; the consummation of the acquisition of the Getrag group of
companies (the "Getrag Transaction"); the satisfaction or waiver of
conditions to complete the Getrag Transaction, including obtaining
required regulatory approvals; warranty or indemnity obligations in
relation to pre-closing liabilities in connection with the sale of
substantially all of our interiors operations; an increase in our
risk profile as a result of completed acquisitions; risks of
conducting business in foreign markets, including China, India,
Russia, Eastern Europe, Thailand, Brazil, Argentina and other non-traditional markets
for us; ongoing pricing pressures, including our ability to offset
price concessions demanded by our customers; our ability to
consistently develop innovative products or processes; warranty and
recall costs; pension liabilities; 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, please contact 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)