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