AURORA, Ontario, February 26, 2016 /PRNewswire/ --
Magna International Inc. (TSX: MG; NYSE: MGA) today
reported financial results for the fourth quarter and year ended
December 31, 2015.
THREE MONTHS ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
2015 2014 2015 2014
Sales $ 8,568 $ 8,790 $ 32,134 $ 34,403
Adjusted EBIT(1) $ 656 $ 714 $ 2,529 $ 2,681
Income from
continuing operations
before income taxes $ 624 $ 696 $ 2,651 $ 2,605
Net income from
continuing operations
attributable to Magna
International Inc. $ 483 $ 516 $ 1,946 $ 1,924
Diluted earnings
per share from
continuing operations $ 1.19 $ 1.23 $ 4.72 $ 4.44
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 DECEMBER 31,
2015
We posted sales of $8.6 billion
for the fourth quarter ended December 31,
2015, a decrease of 3% from the fourth 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 fourth
quarter of 2015. Foreign currency translation reduced our sales by
approximately $770 million, as
compared to the fourth quarter of 2014. Excluding the impact of
foreign currency translation, our sales increased 6% in the fourth
quarter of 2015, compared to the fourth quarter of 2014. North
American light vehicle production increased 4% to 4.5 million units
and European light vehicle production increased 7% to 5.5 million
units in the fourth quarter of 2015, compared to the fourth quarter
of 2014.
Excluding the impact of foreign currency translation, our
complete vehicle assembly sales decreased 3% in the fourth quarter
of 2015, compared to the fourth quarter of 2014. Complete vehicle
assembly volumes decreased 24% to approximately 25,000 units.
During the fourth quarter of 2015, income from continuing
operations before income taxes was $624
million, net income from continuing operations attributable
to Magna International Inc. was $483
million and diluted earnings per share from continuing
operations were $1.19, decreases of
$72 million, $33 million and $0.04 respectively, each compared to the fourth
quarter of 2014.
For the fourth quarter of 2015, other expense (income)
negatively impacted income from continuing operations before income
taxes by $15 million, net income from
continuing operations attributable to Magna International Inc. by
$15 million, and diluted earnings per
share from continuing operations by $0.03, respectively.
During the fourth quarter ended December
31, 2015, we generated cash from operations of $773 million before changes in operating assets
and liabilities and $243 million in
operating assets and liabilities. Total investment activities for
the fourth quarter of 2015 were $894
million, including $604
million in fixed asset additions, $221 million in acquisitions and $69 million in investments and other assets.
YEAR ENDED DECEMBER 31,
2015
We posted sales of $32.1 billion
for the year ended December 31, 2015,
a decrease of 7% from the year ended December 31, 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 in 2015. Foreign currency translation
reduced our sales by approximately $3.35
billion, as compared to 2014. Excluding the impact of
foreign currency translation, our sales increased 3% in 2015,
compared to 2014.
In 2015, vehicle production increased 3% to 17.5 million units
in North America and increased 4%
to 21.0 million units in Europe,
each compared to 2014.
Excluding the impact of foreign currency translation, our
complete vehicle assembly sales decreased 10% in 2015, compared to
2014. Complete vehicle assembly volumes decreased 23% to
approximately 104,000 units.
For the year ended December 31,
2015, income from continuing operations before income taxes
was $2.7 billion, net income from
continuing operations attributable to Magna International Inc. was
$1.9 billion and diluted earnings per
share from continuing operations were $4.72, increases of $46
million, $22 million and
$0.28, respectively, each compared to
2014.
For the year ended December 30,
2015, other expense (income) positively impacted income from
continuing operations before income taxes by $166 million, net income from continuing
operations attributable to Magna International Inc. by $95 million, and diluted earnings per share from
continuing operations by $0.23
respectively.
During 2015, we generated cash from operations before changes in
operating assets and liabilities of $2.7
billion, and invested $344
million in operating assets and liabilities. Total
investment activities for 2015 were $2.0
billion, including $1.6
billion in fixed asset additions, $222 million in acquisitions and $221 million in investments other assets.
Don Walker, Magna's Chief
Executive Officer commented: "Overall, we are satisfied with the
progress we made during 2015. We took important steps to reposition
our product portfolio for the future, in particular entering into a
transaction to acquire Getrag, and disposing of substantially all
of our interiors business.
On the operations front, excluding the negative translation
impact from the strengthening of the U.S. dollar, we reported
strong results. We have experienced some challenges in certain
facilities which we are working to overcome.
Looking forward, we are excited about Magna's future. We are
confident that our ability to integrate our vast capabilities, a
competitive advantage compared to our peers, together with our
accelerated innovation activities, leave us well positioned to
remain a key supplier partner to automotive manufacturers. We
believe this strong positioning will enable us to drive continued
growth."
A more detailed discussion of our consolidated financial results
for the fourth quarter and year ended December 31, 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.
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, 2015. The Board
increased the dividend by 14% to $0.25 per share. This dividend is payable on
March 24, 2016 to shareholders of
record on March 11, 2016.
Vince Galifi, Magna's Chief
Financial Officer, stated: "Our quarterly dividend of $0.25, an increase of 14%, represents a record
dividend rate for Magna. This is the sixth straight year of
dividend increase in the fourth quarter, reflecting our commitment
to returning capital to shareholders and the ongoing confidence our
Board has in Magna's future."
UPDATED 2016 OUTLOOK
Light Vehicle Production (Units)
North America 18.0 million
Europe 21.0 million
Production Sales
North America $19.2 billion - $19.8 billion
Europe $8.6 billion - $9.0 billion
Asia $2.1 billion - $2.3 billion
Rest of World $0.4 billion - $0.5 billion
Total Production Sales $30.3 billion - $31.6 billion
Complete Vehicle Assembly Sales $1.7 billion - $2.0 billion
Total Sales $34.6 billion - $36.3 billion
Adjusted EBIT(1) High 7% range
Interest Expense, net Approximately $80 million
Tax Rate(2) 25% - 26%
Capital Spending $1.8 billion - $2.0 billion
(1) We believe Adjusted EBIT is the most appropriate measure of operational
profitability or loss for our reporting segments.
Adjusted EBIT represents income from operations before income taxes; interest
expense, net; and other expense (income), net.
(2) Excluding other expense (income), net
In this outlook, in addition to 2016 light vehicle production,
we have assumed no material unannounced 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 305
manufacturing operations and 93 product development, engineering
and sales centres in 29 countries. We have over 139,000 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
fourth quarter and year end 2015 results on Friday, February 26, 2016 at 8:00 a.m.
EST. The conference call will be chaired by Donald J. Walker, Chief Executive Officer.
The number to use for this call is 1-800-682-8921. The number for overseas callers is
1-303-223-4361. 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 Monday 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 2016; complete vehicle assembly
sales; Adjusted EBIT; net interest expense; effective income tax
rate; fixed asset expenditures; implementation of improvement plans
in our underperforming divisions and/or restructuring actions;
implementation of our business strategy including repositioning of
our product portfolio and our accelerated innovation activities;
growth prospects for our business; and future returns of capital to
our shareholders, including through dividends or share repurchases.
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 potential for a
deterioration of economic conditions or an extended period of
economic uncertainty; declines in consumer confidence and the
impact on production volume levels; continuing global or regional
economic uncertainty; underperformance of one or more of our
operating divisions; our ability to successfully launch material
new or takeover business; risks of conducting business in foreign
markets, including China,
Russia, India, Argentina and Brazil and other non-traditional markets for
us; legal claims and/or regulatory actions against us; 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 appropriate due diligence on
acquisition targets; ongoing pricing pressures, including our
ability to offset price concessions demanded by our customers;
warranty and recall costs; inability to sustain or grow our
business; our ability to successfully compete with other automotive
suppliers; 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; a
shift away from technologies in which we are investing; 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;
restructuring actions by OEMs, including plant closures;
restructuring, downsizing and/or other significant non-recurring
costs; scheduled shutdowns of our customers' production facilities
(typically in the third and fourth quarters of each calendar year);
shutdown of our or our customers' or sub-suppliers' production
facilities due to a labour disruption; a prolonged disruption in
the supply of components to us from our suppliers; impairment
charges related to goodwill, long-lived assets and deferred tax
assets; risk of production disruptions due to natural disasters;
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; other potential
tax exposures; inability to achieve future investment returns that
equal or exceed past returns; risks arising due to the failure of a
major financial institution; liquidity risks; bankruptcy or
insolvency of a major customer or supplier; the unpredictability
of, and fluctuation in, the trading price of our Common Shares;
work stoppages and labour relations disputes; changes in credit
ratings assigned to us; changes in laws and governmental
regulations; costs associated with compliance with environmental
laws and regulations; 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.