AURORA, Ontario, May 11, 2017 /PRNewswire/ --
- First quarter record sales, up 5% to $9.37 billion
- Adjusted EBIT and Adjusted EBIT percentage of sales increased
in all reporting segments
- All-time record diluted earnings per share of $1.53, increased 25%
- Cash provided from operating activities of $443 million, up 46%
Magna International Inc. (TSX: MG; NYSE: MGA) today reported
financial results for the first quarter ended March 31, 2017.
THREE MONTHS ENDED
March 31, 2017 March 31, 2016
Sales $9,372 $8,900
Income before income taxes $806 $675
Net income attributable to
Magna International Inc. $586 $492
Adjusted EBIT[1] $831 $698
Diluted earnings per share $1.53 $1.22
All results are reported in millions of U.S. dollars, except per share figures, which
are in U.S. dollars
[1] Adjusted EBIT is a Non-GAAP financial measure that has no standardized meaning
under U.S. GAAP and as a result may not be comparable to the calculation of similar
measures by other companies. Adjusted EBIT represents net income before income taxes;
interest expense, net; and other expense (income), net. For a reconciliation of this
Non-GAAP financial measure, see our Management's Discussion and Analysis of Results of
Operations and Financial Position for the three months ended March 31, 2017 available
in the Investor Relations section of our website at http://www.magna.com/investors.
THREE MONTHS ENDED MARCH 31,
2017
We posted sales of $9.37 billion
for the first quarter ended March 31,
2017, an increase of 5% over the first quarter of 2016. The
strong year over year growth was achieved despite North American
light vehicle production declining by 1% and European light vehicle
production increasing only 2% compared to the first quarter of
2016. Our complete vehicle assembly sales decreased 31% in the
first quarter of 2017 largely reflecting the end of production of
the MINI Countryman and Paceman in 2016, partially offset by the
start of production of the BMW 5-Series at our assembly facility in
Graz Austria.
During the first quarter of 2017, income from operations before
income taxes was $806 million, up 19%
compared to the first quarter of 2016. Net income attributable to
Magna International Inc. was $586
million, 19% higher than the first quarter of
2016. Diluted earnings per share increased 25% to $1.53 in the first quarter of 2017, which
includes the favourable impact of a reduced share count.
During the first quarter of 2017, Adjusted EBIT increased 19% to
$831 million, compared to
$698 million for the first quarter of
2016. Our North America, Europe, Asia
and Rest of World segments all posted higher Adjusted EBIT and
Adjusted EBIT percentage of sales, compared to the first quarter of
2016.
During the first quarter ended March 31,
2017, cash provided from operating activities totaled
$443 million, up 46% from the first
quarter of 2016. This includes cash generated from operations of
$870 million before changes in
operating assets and liabilities, and $427
million invested in operating assets and liabilities. Total
investment activities for the first quarter of 2017 were
$392 million, including
$309 million in fixed asset additions and $83 million in investments, other assets and
intangible assets.
"We delivered another very strong quarter, with
continued production sales growth above vehicle production, all
segments posting higher margins, and all-time record earnings per
share. Overall, the first quarter was a great start to the year for
the company and our shareholders."
- Don Walker, Magna's
Chief Executive Officer
RETURN OF CAPITAL TO SHAREHOLDERS
During the three months ended March 31,
2017, we repurchased 2.3 million shares for $100 million. In addition, we paid dividends of
$105 million in the first quarter of
2017.
Today, our Board of Directors declared a quarterly dividend of
$0.275 with respect to our
outstanding Common Shares for the quarter ended March 31, 2017. This dividend is payable on
June 9, 2017 to shareholders of
record on May 26, 2017.
UPDATED 2017 OUTLOOK
Light Vehicle Production (Units)
North America 17.5 million
Europe 21.9 million
Production Sales
North America $19.0 - $19.6 billion
Europe $9.2 - $9.6 billion
Asia $2.2 - $2.4 billion
Rest of World $0.4 - $0.5 billion
Total Production Sales $30.8 - $32.1 billion
Complete Vehicle Assembly Sales $ 2.7- $3.0 billion
Total Sales $36.6 - $38.3 billion
Adjusted EBIT Margin[2] 8.0% - 8.2%
Interest Expense, net Approximately $85 million
Income Tax Rate[3] 25% - 26%
Capital Spending Approximately $2.0 billion
[2] Adjusted EBIT Margin is the ratio of Adjusted EBIT to Total Sales.
[3] The Income Tax Rate has been calculated using adjusted EBIT and is based on
current tax legislation.
In this 2017 outlook, we have assumed:
- 2017 light vehicle production volumes (as set out above);
- No material unannounced acquisitions or divestitures; and
- 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.
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 http://www.magna.com/investors and filed
electronically through the System for Electronic Document Analysis
and Retrieval (SEDAR) which can be accessed
at 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 http://www.sec.gov.
We will hold a conference call for interested analysts and
shareholders to discuss our first quarter ended March 31, 2017 results on Thursday, May 11, 2017 at 2:30 p.m. EST. The conference call will be
chaired by Don Walker, Chief
Executive Officer. The number to use for this call from
North America is +1-800-905-9496.
International callers should use +1-416-641-6700. Please call in at
least 10 minutes prior to the call start time. 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 prior to the call.
TAGS
Quarterly earnings, record quarter, financial results, sales
growth
OUR
BUSINESS [4]
We are a leading global automotive supplier with 321 manufacturing
operations and 102 product development, engineering and sales
centres in 29 countries. We have over 159,000 employees focused on
delivering superior value to our customers through innovative
products and processes, and world class manufacturing. We have
complete vehicle engineering and contract manufacturing expertise,
as well as product capabilities which include body, chassis,
exterior, seating, powertrain, active driver assistance, vision,
closure and roof systems and have electronic and software
capabilities across many of these areas. 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.
_________________________________
[4] Manufacturing operations, product development, engineering and sales centres and
employee figures include certain equity-accounted operations.
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 2017; 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 statements or forward-looking
information in this press release 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 or forward-looking information
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 or
forward-looking information. Any such forward-looking statements or
forward-looking information 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; a decline in consumer confidence, which would
typically result in lower production volume levels; the growth of
protectionism and the implementation of measures that impede the
free movement of goods, services, people and capital; planning
risks created by rapidly changing economic or political conditions;
fluctuations in relative currency values; legal claims and/or
regulatory actions against us, including without limitation any
proceedings that may arise out of our global review focused on
anti-trust risk; our ability to successfully launch material new or
takeover business; underperformance of one or more of our operating
divisions; ongoing pricing pressures, including our ability to
offset price concessions demanded by our customers; warranty and
recall costs; 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; our ability to successfully compete with other automotive
suppliers, including disruptive technology innovators which are
entering or expanding in the automotive industry; our ability to
consistently develop innovative products or processes; our changing
risk profile due to the increasing importance to us of product
areas such as powertrain and electronics; restructuring, downsizing
and/or other significant non-recurring costs; a reduction in
outsourcing by our customers or the loss of a material production
or assembly program; 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); the termination or non-renewal by our customers of
any material production purchase order; exposure to, and ability to
offset, commodities price increases; restructuring actions by OEMs,
including plant closures; work stoppages and labour relations
disputes; risk of production disruptions due to natural disasters
or catastrophic event; the security and reliability of our
information technology systems; 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; 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, including tax and transfer
pricing laws; 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 or
forward-looking information, we caution readers not to place undue
reliance on any forward-looking statements or forward-looking
information, 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
or forward-looking information. 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
or forward-looking information to reflect subsequent information,
events, results or circumstances or otherwise.
Investor Contact:
Louis Tonelli
Vice-President - Investor Relations,
louis.tonelli@magna.com
+1-905-726-7035
Media Contact:
Tracy Fuerst,
Director of Corporate Communications & PR,
tracy.fuerst@magna.com
+1-248-631-5396