AURORA, Ontario, August 5, 2016 /PRNewswire/ --
Magna International Inc. (TSX: MG; NYSE: MGA) today reported financial results for the second quarter ended June
30, 2016.
THREE MONTHS ENDED SIX MONTHS ENDED JUNE 30, JUNE 30, 2016 2015 2016 2015 Sales $ 9,443 $ 8,133 $ 18,343 $ 15,905 Adjusted EBIT(1) $ 789 $ 677 $ 1,487 $ 1,308 Income from continuing operations before $ 767 $ 726 $ 1,442 $ 1,347 income taxes Net income from continuing operations $ 558 $ 538 $ 1,050 $ 993 attributable to Magna International Inc. Diluted earnings per share $ 1.41 $ 1.29 $ 2.63 $ 2.39 from continuing operations
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, net.
Don Walker, Magna's Chief Executive Officer commented: "We had a record second quarter in
sales, adjusted EBITDA, and adjusted EBIT. Contributing to our results has been the organization's continuing focus on
manufacturing excellence and operational improvements. Going forward, we plan to remain highly focused on innovation to
strengthen our competitive positioning for the Car of the Future."
THREE MONTHS ENDED JUNE 30, 2016
We posted sales of $9.4 billion for the second quarter ended June 30,
2016, an increase of 16% over the second quarter of 2015. North American and European light vehicle production increased
2% and 6%, respectively, in the second quarter of 2016 compared to the second quarter of 2015.
Our complete vehicle assembly sales increased 7% in the second quarter of 2016, compared to the second quarter of 2015, while
our complete vehicle assembly volumes decreased 9% from the comparable quarter to approximately 26,000 units.
During the second quarter of 2016, income from continuing operations before income taxes was $767
million and net income from continuing operations attributable to Magna International Inc. was $558
million, increases of 6% and 4% respectively, both compared to the second quarter of 2015. Diluted earnings per
share from continuing operations increased 9% in the second quarter of 2016, which includes the favourable impact of a reduced
share count.
During the second quarter ended June 30, 2016, we generated cash from operations of $864 million before changes in operating assets and liabilities, and invested $151
million in operating assets and liabilities. Total investment activities for the second quarter of 2016 were $543 million, including $409 million in fixed asset additions, $103 million
in investments and other assets and $31 million to purchase subsidiaries.
SIX MONTHS ENDED JUNE 30, 2016
We posted sales of $18.3 billion for the six months ended June 30,
2016, an increase of 15% from the six months ended June 30, 2015. Excluding the impact
of foreign currency translation, our sales increased 18% in the first six months of 2016, compared to the first six months of
2015. North American and European light vehicle production increased 6% and 7%, respectively, in the first six months of
2016 compared to the first six months of 2015.
Our complete vehicle assembly sales increased 3% in the first six months of 2016, compared to the first six months of
2015. Complete vehicle assembly volumes decreased 13% to approximately 49,000 units.
During the six months ended June 30, 2016, income from continuing operations before income taxes
was $1.4 billion, net income from continuing operations attributable to Magna International Inc.
was $1.1 billion and diluted earnings per share from continuing operations were $2.63, increases of $95 million, $57 million and
$0.24, respectively, each compared to the first six months of 2015.
During the six months ended June 30, 2016, we generated cash from operations before changes in
operating assets and liabilities of $1.6 billion, and invested $620
million in operating assets and liabilities. Total investment activities for the first six months of 2016 were
$2.7 billion, including $1.8 billion to purchase subsidiaries,
$755 million in fixed asset additions and $157 million in investments and other
assets.
A more detailed discussion of our consolidated financial results for the second quarter and six months ended June 30, 2016 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.
RETURN OF CAPITAL TO SHAREHOLDERS
During the six months ended June 30, 2016, Magna repurchased 15.1 million shares for
$608 million pursuant to our Normal Course Issuer Bid ("NCIB") which expires in November
2016. We have 22.3 million shares remaining and available for purchase under the NCIB.
Yesterday, our Board of Directors declared a quarterly dividend of $0.25 with respect to our
outstanding Common Shares for the quarter ended June 30, 2016. This dividend is payable on
September 9, 2016 to shareholders of record on August 26, 2016.
UPDATED 2016 OUTLOOK
Light Vehicle Production (Units) North America 18.0 million Europe 21.4 million Production Sales North America $19.4 - $20.0 billion Europe $8.8 - $9.2 billion Asia $2.1 - $2.3 billion Rest of World $0.3 - $0.4 billion Total Production Sales $30.6 - $31.9 billion Complete Vehicle Assembly Sales $2.0 - $2.3 billion Total Sales $35.5 - $37.2 billion EBIT Margin(2) Approximately 8% Interest Expense, net Approximately $90 million Tax Rate(2) Approximately 26% Capital Spending $1.8 - $2.0 billion
(2) Excluding other expense, net
In this 2016 outlook, in addition to 2016 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 309 manufacturing operations(3) and 99 product development,
engineering and sales centres(3) in 29 countries. We have over 152,000 employees(3) 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, active driver assistance, 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/.
(3) These figures include manufacturing operations, product
development, engineering and sales centres and employees in
certain equity-accounted operations.
We will hold a conference call for interested analysts and shareholders to discuss our second quarter results on
Friday, August 5, 2016 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 1-800-272-6255.
The number for overseas callers is 1-303-223-2686. Please call in at least 10 minutes prior to the call. We will also webcast the
conference call at 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
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; consolidated EBIT margin, net interest expense; effective
income tax rate; fixed asset expenditures; 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; fluctuations in relative currency values; continuing global or
regional economic uncertainty; the potential impact of the United Kingdom's anticipated exit
from the European union; restructuring, downsizing and/or other significant non-recurring costs; underperformance of one or more
of our operating divisions; ongoing pricing pressures, including our ability to offset price concessions demanded by our
customers; our ability to successfully launch material new or takeover business; our ability to successfully identify, complete
and integrate acquisitions or achieve anticipated synergies; our ability to conduct appropriate due diligence on acquisition
targets; an increase in our risk profile as a result of completed acquisitions; 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; inability to sustain or grow our business; risks of conducting business in foreign markets, including China, India, Eastern Europe, Brazil and other non-traditional markets for us; a prolonged disruption in the supply of components to us
from our suppliers; work stoppages and labour relations disputes; 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; exposure to, and ability to offset, volatile commodities prices; warranty and recall costs; restructuring
actions by OEMs, including plant closures; shutdown of our or our customers' or sub-suppliers' production facilities due to a
labour disruption; risk of production disruptions due to natural disasters or catastrophic event; the security and reliability of
our information technology systems; 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; impairment charges related to goodwill, long-lived assets and deferred tax assets; 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; inability 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/.
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