* Sales increased 3% to $11.0 billion, compared to a 2% rise in global light
vehicle production
* Diluted earnings per share and Adjusted diluted earnings per share were
$0.03 and $1.08, respectively
* Recorded asset impairments and restructuring totaling $316 million related
to Fisker
* Paid dividends of $134 million
* Maintaining 2024 Adjusted EBIT Margin Outlook range of 5.4%-6.0%
AURORA, Ontario, May 03, 2024 (GLOBE NEWSWIRE) -- Magna International Inc. (TSX:
MG; NYSE: MGA) today reported financial results for the first quarter ended
March 31, 2024.
Please click HERE (http://ml.globenewswire.com/Resource/Download/794e1846-eed4-
4569-9628-c859972cb894) for full first quarter MD&A and Financial Statements.
THREE MONTHS ENDED
------------------------------------------
March
31, 2024 March 31, 2023
-------------- ---------------------------
Reported
Sales $ 10,970 $ 10,673
Income from operations before
income taxes $ 34 $ 275
Net income attributable to Magna
International Inc. $ 9 $ 209
Diluted earnings per share $ 0.03 $ 0.73
Non-GAAP Financial Measures((1))
Adjusted EBIT $ 469 $ 449
Adjusted diluted earnings per
share $ 1.08 $ 1.15
All results are reported in millions of U.S. dollars, except per share
figures, which are in U.S. dollars
((1) )Adjusted EBIT and Adjusted diluted earnings per share are Non-GAAP
financial measures that have no standardized meaning under U.S. GAAP, and as a
result may not be comparable to the calculation of similar measures by other
companies. Effective July 1, 2023, we revised our calculations of Adjusted
EBIT and Adjusted diluted earnings per share to exclude the amortization of
acquired intangible assets. The historical presentation of these Non-GAAP
measures within this press release has also been updated to reflect the
revised calculations. Further information and a reconciliation of these Non-
GAAP financial measures is included in the back of this press release.
A photo of Swamy Kotagiri, Magna's Chief Executive Officer is available
at https://www.globenewswire.com/NewsRoom/AttachmentNg/d7970d44-dd53-4028-a801-
4bb4eed75946
THREE MONTHS ENDED MARCH 31, 2024
We posted Sales of $11.0 billion for the first quarter of 2024, an increase of
3% from the first quarter of 2023, which compares to a 2% increase in global
light vehicle production, including 2% and 11% higher production in North
America and China, respectively, partially offset by 2% lower production in
Europe. In addition to higher global production, our Sales benefitted from the
launch of new programs and the acquisition of Veoneer Active Safety, while Sales
were negatively impacted by lower volumes in our Complete Vehicles segment and
the net weakening of foreign currencies against the U.S. dollar.
Adjusted EBIT increased to $469 million in the first quarter of 2024 compared to
$449 million in the first quarter of 2023. The increase mainly reflected
earnings on higher Sales, including higher margins due to the impact of
operational excellence and cost initiatives, productivity and efficiency
improvements, including lower costs at certain previously underperforming
facilities, higher net transactional foreign exchange gains and lower net
warranty costs. These were partially offset by higher employee profit sharing
and incentive compensation, higher net production input costs and decreased
earnings on lower assembly sales.
We recorded asset impairments and restructuring costs totaling $316 million
related to Fisker. These amounts are included in Other Expense, net. The
impairments exclude the impact of deferred revenue of approximately $195 million
that will be recognized in income as performance obligations are satisfied or
upon termination of the agreement for manufacturing of the Fisker Ocean SUV.
Income from operations before income taxes was $34 million for the first quarter
of 2024 compared to $275 million in the first quarter of 2023, which includes
Other expense, net, and Amortization of acquired intangibles totaling $384
million and $154 million, respectively. Excluding Other expense, net, and
amortization of acquired intangibles from both periods, Income from operations
before income taxes decreased $11 million in the first quarter of 2024 compared
to the first quarter of 2023.
Net income attributable to Magna International Inc. was $9 million for the first
quarter of 2024 compared to $209 million in the first quarter of 2023, which
includes after tax Other expense, net, and Amortization of acquired intangibles
totaling $302 million and $120 million, respectively. Excluding Other expense,
net, after tax and Amortization of acquired intangibles from both periods, Net
income attributable to Magna International Inc. decreased $18 million in the
first quarter of 2024 compared to the first quarter of 2023.
Diluted earnings per share decreased to $0.03 in the first quarter of 2024,
compared to $0.73 in the first quarter of 2023, and Adjusted diluted earnings
per share decreased to $1.08 compared to $1.15.
In the first quarter of 2024, we generated Cash from operations before changes
in operating assets and liabilities of $591 million and used $330 million in
Operating assets and liabilities. Investment activities for the first quarter of
2024 included $493 million in Fixed asset additions and a $125 million increase
in Investments, other assets and intangible assets.
RETURN OF CAPITAL
During the three months ended March 31, 2024, we paid dividends of $134 million.
Our Board of Directors declared a first quarter dividend of $0.475 per Common
Share, payable on May 31, 2024 to shareholders of record as of the close of
business on May 17, 2024.
SEGMENT SUMMARY
For the three months ended March 31,
-----------------------------------------------------------------------------------------------------------------
($Millions) Sales Adjusted EBIT
-----------------------------------------------------------------------------------------------------------------------------
2024 2023 Change 2024 2023 Change
-----------------------------------------------------------------------------------------------------------------------------
Body
Exteriors &
Structures $ 4,429 $ 4,439 $ (10 ) $ 298 $ 272 $ 26
Power &
Vision 3,842 3,323 519 98 92 6
Seating
Systems 1,455 1,486 (31 ) 52 37 15
Complete
Vehicles 1,383 1,626 (243 ) 27 52 (25 )
Corporate
and Other (139 ) (201 ) 62 (6 ) (4 ) (2 )
-----------------------------------------------------------------------------------------------------------------------------
Total
Reportable
Segments $ 10,970 $ 10,673 $ 297 $ 469 $ 449 $ 20
-----------------------------------------------------------------------------------------------------------------------------
For the three months ended March 31,
------------------------------------------------
Adjusted EBIT as a
percentage of sales
-------------------------------------------------------------------------------
2024 2023 Change
-------------------------------------------------------------------------------
Body Exteriors &
Structures 6.7 % 6.1 % 0.6 %
Power & Vision 2.6 % 2.8 % (0.2 )%
Seating Systems 3.6 % 2.5 % 1.1 %
Complete Vehicles 2.0 % 3.2 % (1.2 )%
-------------------------------------------------------------------------------
Consolidated Average 4.3 % 4.2 % 0.1 %
For further details on our segment results, please see our Management's
Discussion and Analysis of Results of Operations and Financial Position and our
Interim Financial Statements.
2024 OUTLOOK
We disclose a full-year Outlook annually in February with quarterly updates. The
following Outlook is an update to our previous Outlook in February 2024.
Updated 2024 Outlook Assumptions
Current Previous
Light Vehicle Production (millions of units)
North America 15.7 15.7
Europe 17.4 17.4
China 29.0 28.3
Average Foreign exchange rates:
1 Canadian dollar equals U.S. $0.725 U.S. $0.740
1 euro equals U.S. $1.065 U.S. $1.080
Updated 2024 Outlook
Current(()(2)()) Previous
Segment Sales
Body Exteriors &
Structures $17.3 - $17.9 billion $17.4 - $18.0 billion
Power & Vision $15.4 - $15.8 billion $15.8 - $16.2 billion
Seating Systems $5.4 - $5.7 billion $5.5 - $5.8 billion
Complete Vehicles $5.0 - $5.3 billion $5.6 - $5.9 billion
Total Sales $42.6 - $44.2 billion $43.8 - $45.4 billion
Adjusted EBIT
Margin(()(3)()) 5.4% - 6.0% 5.4% - 6.0%
Equity Income (included
in EBIT) $120 - $150 million $120 - $150 million
Interest Expense, net Approximately $230 Approximately $230
million million
Income Tax Rate(()(4)()) Approximately 22% Approximately 21%
Adjusted Net Income
attributable to
Magna(()(5)()) $1.5 - $1.7 billion $1.6 - $1.8 billion
Capital Spending Approximately $2.5
$2.4 - $2.5 billion billion
Notes:
(()(2)()) Our current Outlook assumes no further production of the Fisker
Ocean
(()(3)()) Adjusted EBIT Margin is the ratio of Adjusted EBIT to Total Sales.
Refer to the reconciliation of Non-GAAP financial measures in the back of this
press release for further information
(()(4)()) The Income Tax Rate has been calculated using Adjusted EBIT and is
based on current tax legislation
(()(5)()) Adjusted Net Income attributable to Magna represents Net Income
excluding Other expense, net and Amortization of acquired intangible assets,
net of tax
Our Outlook is intended to provide information about management's current
expectations and plans and may not be appropriate for other purposes. Although
considered reasonable by Magna as of the date of this document, the 2024 Outlook
above and the underlying assumptions may prove to be inaccurate. Accordingly,
our actual results could differ materially from our expectations as set forth
herein. The risks identified in the "Forward-Looking Statements" section below
represent the primary factors which we believe could cause actual results to
differ materially from our expectations.
Key Drivers of Our Business
Our operating results are primarily dependent on the levels of North American,
European, and Chinese car and light truck production by our customers. While we
supply systems and components to every major original equipment manufacturer
("OEM"), we do not supply systems and components for every vehicle, nor is the
value of our content consistent from one vehicle to the next. As a result,
customer and program mix relative to market trends, as well as the value of our
content on specific vehicle production programs, are also important drivers of
our results.
OEM production volumes are generally aligned with vehicle sales levels and thus
affected by changes in such levels. Aside from vehicle sales levels, production
volumes are typically impacted by a range of factors, including: labour
disruptions; free trade arrangements and tariffs; relative currency values;
commodities prices; supply chains and infrastructure; availability and relative
cost of skilled labour; regulatory frameworks; and other factors.
Overall vehicle sales levels are significantly affected by changes in consumer
confidence levels, which may in turn be impacted by consumer perceptions and
general trends related to the job, housing, and stock markets, as well as other
macroeconomic and political factors. Other factors which typically impact
vehicle sales levels and thus production volumes include: vehicle affordability;
interest rates and/or availability of credit; fuel and energy prices; relative
currency values; uncertainty as to consumer acceptance of EVs; government
subsidies to consumers for the purchase of low- and zero-emission vehicles; and
other factors.
NON-GAAP FINANCIAL MEASURES RECONCILIATION
Effective July 1, 2023, we revised our calculations of Adjusted EBIT and
Adjusted diluted earnings per share to exclude the amortization of acquired
intangible assets. Revenue generated from acquired intangible assets is included
within revenue in determining net income attributable to Magna. We believe that
excluding the amortization of acquired intangible assets from these Non-GAAP
measures helps management and investors in understanding our underlying
performance and improves comparability between our segmented results of
operations and our peers.
The historical presentation of these Non-GAAP measures within this press release
has also been updated to reflect the revised calculations.
The reconciliation of Non-GAAP financial measures is as follows:
Adjusted EBIT
For the three months ended March 31,
----------------------------------------
2024 2023
-------------------------------------------------------------------------------
Net Income $ 26 $ 217
Add:
Amortization of acquired
intangible assets 28 12
Interest expense, net 51 20
Other expense, net 356 142
Income taxes 8 58
-------------------------------------------------------------------------------
Adjusted EBIT $ 469 $ 449
-------------------------------------------------------------------------------
Adjusted EBIT as a percentage of sales
("Adjusted EBIT margin")
For the three months ended March 31,
----------------------------------------
2024 2023
-------------------------------------------------------------------------------
Sales $ 10,970 $ 10,673
-------------------------------------------------------------------------------
Adjusted EBIT $ 469 $ 449
-------------------------------------------------------------------------------
Adjusted EBIT as a percentage of sales 4.3 % 4.2 %
-------------------------------------------------------------------------------
Adjusted diluted earnings per share
For the three months ended March 31,
----------------------------------------
2024 2023
-------------------------------------------------------------------------------
Net income attributable to Magna
International Inc. $ 9 $ 209
Add (deduct):
Amortization of acquired intangible
assets 28 12
Other expense, net 356 142
Tax effect on Amortization of acquired
intangible assets
and Other (income) expense, net (82 ) (34 )
-------------------------------------------------------------------------------
Adjusted net income attributable to
Magna International Inc. $ 311 $ 329
Diluted weighted average number of
Common Shares outstanding during the
period (millions): 287.1 286.6
-------------------------------------------------------------------------------
Adjusted diluted earnings per share $ 1.08 $ 1.15
-------------------------------------------------------------------------------
Certain of the forward-looking financial measures above are provided on a Non-
GAAP basis. We do not provide a reconciliation of such forward-looking measures
to the most directly comparable financial measures calculated and presented in
accordance with U.S. GAAP. To do so would be potentially misleading and not
practical given the difficulty of projecting items that are not reflective of
on-going operations in any future period. The magnitude of these items, however,
may be significant.
This press release together with our Management's Discussion and Analysis of
Results of Operations and Financial Position and our Interim Financial
Statements are available in the Investor Relations section of our website at
www.magna.com/company/investors (http://www.magna.com/company/investors) and
filed electronically through the System for Electronic Document Analysis and
Retrieval (SEDAR) which can be accessed at www.sedar.com (http://www.sedar.com)
as well as on the United States Securities and Exchange Commission's Electronic
Data Gathering, Analysis and Retrieval System (EDGAR), which can be accessed at
www.sec.gov (http://www.sec.gov).
We will hold a conference call webcast for interested analysts and shareholders
to discuss our first quarter ended March 31, 2024 results on Friday, May
3, 2024 at 8:00 a.m. ET. The conference call will be chaired by Swamy Kotagiri,
Chief Executive Officer. Please register for the webcast here
(https://events.q4inc.com/attendee/510210737) or through our website
www.magna.com (https://www.magna.com/stories/news-press-release/2024/magna-
announces-date-for-q1-2024-results-call). If unable to join the webcast, North
American callers can dial 1-800-715-9871 and International callers can dial
1-646-307-1963, conference ID 9829976. The slide presentation accompanying the
conference call as well as our financial review
(https://www.magna.com/company/investors/financial-reports-public-
filings/financial-review) summary will be available on our website Friday prior
to the call.
TAGS
Quarterly earnings, financial results, vehicle production
INVESTOR CONTACT
Louis Tonelli, Vice-President, Investor Relations
louis.tonelli@magna.com (mailto:louis.tonelli@magna.com) ? 905.726.7035
MEDIA CONTACT
Tracy Fuerst, Vice-President, Corporate Communications & PR
tracy.fuerst@magna.com (mailto:tracy.fuerst@magna.com) ? 248.761.7004
TELECONFERENCE CONTACT
Nancy Hansford, Executive Assistant, Investor Relations
nancy.hansford@magna.com (mailto:nancy.hansford@magna.com) ? 905.726.7108
OUR BUSINESS(()(6)())
Magna is more than one of the world's largest suppliers in the automotive space.
We are a mobility technology company built to innovate, with a global,
entrepreneurial-minded team of over 179,000(()(7)()) employees across 343
manufacturing operations and 105 product development, engineering and sales
centres spanning 28 countries. With 65+ years of expertise, our ecosystem of
interconnected products combined with our complete vehicle expertise uniquely
positions us to advance mobility in an expanded transportation landscape.
For further information about Magna (NYSE:MGA; TSX:MG), please
visit www.magna.com
(https://www.globenewswire.com/Tracker?data=TEC1Z8Xl8W72ZcnozI-Mo-
Pu67sXKHu_8R9W0_2gRcAiCrTcc7Mt7zwr1pwhtugu71d-wodAEIdPLEcDGSRqoA==) or follow us
on social.
(()(6)()) Manufacturing operations, product development, engineering and sales
centres include certain operations accounted for under the equity method.
(()(7)()) Number of employees includes over 168,000 employees at our wholly
owned or controlled entities and over 11,000 employees at certain operations
accounted for under the equity method.
FORWARD-LOOKING STATEMENTS
Certain statements in this press release constitute "forward-looking
information" or "forward-looking statements" (collectively, "forward-looking
statements"). Any such forward-looking statements are intended to provide
information about management's current expectations and plans and may not be
appropriate for other purposes. Forward-looking statements may include financial
and other projections, as well as statements regarding our future plans,
strategic 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", "assume", "believe", "intend", "plan", "aim",
"forecast", "outlook", "project", "potential", "cyclicality", "estimate",
"target" and similar expressions suggesting future outcomes or events to
identify forward-looking statements. The following table identifies the material
forward-looking statements contained in this document, together with the
material potential risks that we currently believe could cause actual results to
differ materially from such forward-looking statements. Readers should also
consider all of the risk factors which follow below the table:
Material Forward-Looking Statement|Material Potential Risks Related to
|Applicable Forward-Looking Statement
-----------------------------------+-------------------------------------------
Light Vehicle Production | * Light vehicle sales levels
| * Production disruptions, including as a
| result of labour strikes
| * Supply disruptions
| * Production allocation decisions by OEMs
| * Free trade arrangements and tariffs
| * Relative currency values
| * Commodities prices
| * Availability and relative cost of
| skilled labour
-----------------------------------+-------------------------------------------
| * Same risks as for Light Vehicle
| Production above
| * The impact of elevated interest rates
| and availability of credit on consumer
| confidence and in turn vehicle sales
| and production
| * The impact of deteriorating vehicle
| affordability on consumer demand, and
| in turn vehicle sales and production
| * Alignment with "Car of the Future"
| * Evolving business risk profile
| * Customer concentration
| * Shifts in market shares among vehicles
| or vehicle segments
Total Sales | * Shifts in consumer "take rates" for
Segment Sales | products we sell
-----------------------------------+-------------------------------------------
| * Same risks as for Total Sales and
| Segment Sales above
| * Successful execution of critical
| program launches
| * Operational underperformance
| * Product warranty/recall risks
| * Production inefficiencies in our
| operations
| * Higher costs incurred to mitigate the
| risk of supply disruptions
| * Restructuring costs
| * Impairments
| * Inflationary pressures
| * Our ability to secure cost recoveries
| from customers and/or otherwise offset
| higher input costs
| * Price concessions
| * Risks of conducting business with newer
| EV-focused OEMs
| * Commodity cost volatility
| * Scrap steel price volatility
Adjusted EBIT Margin | * Higher labour costs
Net Income Attributable to Magna | * Tax risks
-----------------------------------+-------------------------------------------
| * Same risks as Adjusted EBIT Margin and
| Net Income Attributable to Magna
| * Risks related to conducting business
| through joint ventures
| * Risks of doing business in foreign
Equity Income | markets
-----------------------------------+-------------------------------------------
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. While we believe we have a reasonable basis for making any such
forward-looking statements, they are not a guarantee of future performance or
outcomes. In addition to the factors in the table above, whether actual results
and developments conform to 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:
Macroeconomic, Geopolitical and Other
Risks
* inflationary pressures;
* interest rates;
* geopolitical risks;
Risks Related to the Automotive
Industry Pricing Risks
* economic cyclicality; * quote/pricing assumptions;
* regional production volume * customer pricing
declines; pressure/contractual arrangements;
* deteriorating vehicle * commodity cost volatility;
affordability; * scrap steel/aluminum price
* misalignment between EV production volatility;
and sales;
* intense competition; Warranty/Recall Risks
Strategic Risks * repair/replace costs;
* warranty provisions;
* alignment with "Car of the Future"; * product liability;
* evolving business risk profile;
* technology and innovation; Climate Change Risks
* investments in mobility and
technology companies; * transition risks and physical
risks;
Customer-Related Risks * strategic and other risks;
* customer concentration; IT Security/Cybersecurity Risks
* growth with Asian OEMs;
* growth of EV-focused OEMs; * IT/cybersecurity breach;
* risks of conducting business with * product cybersecurity;
newer EV-focused OEMs;
* Fisker's ability to continue as a Acquisition Risks
going concern;
* dependence on outsourcing; * acquisition of strategic targets;
* customer cooperation and * inherent merger and acquisition
consolidation; risks;
* EV program deferrals; * acquisition integration and
*market shifts; synergies;
* consumer take rate shifts;
* quarterly sales fluctuations; Other Business Risks
* customer purchase orders;
* potential OEM production-related * joint ventures;
disruptions; * intellectual property;
* risks of doing business in foreign
Supply Chain Risks markets;
* relative foreign exchange rates;
* semiconductor chip supply * currency devaluation in Argentina;
disruptions and price increases; * pension risks;
* supply chain disruptions; * tax risks;
* regional energy supply and pricing; * returns on capital investments;
* supply base condition; * financial flexibility;
* credit ratings changes;
Manufacturing/Operational Risks * stock price fluctuation;
* dividends;
* product launch;
* operational underperformance; Legal, Regulatory and Other Risks
* restructuring costs;
* impairments; * antitrust proceedings;
* labour disruptions; * legal and regulatory proceedings;
* skilled labour * changes in laws;
attraction/retention; * trade agreements;
* leadership expertise and * trade disputes/tariffs; and
succession; * environmental compliance.
In evaluating forward-looking statements or forward-looking information, we
caution readers not to place undue reliance on any forward-looking statement.
Additionally, 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, including the risks, assumptions and
uncertainties above which are:
* discussed under the "Industry Trends and Risks" heading of our Management's
Discussion and Analysis; and
* set out in our Annual Information Form filed with securities commissions in
Canada, our annual report on Form 40-F with the United States Securities and
Exchange commission, and subsequent filings.
Readers should also consider discussion of our risk mitigation activities with
respect to certain risk factors, which can be also found in our Annual
Information Form. Additional information about Magna, including our Annual
Information Form, is available through the System for Electronic Data Analysis
and Retrieval + (SEDAR+) at www.sedarplus.ca (http://www.sedarplus.ca).
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