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Magna Announces Third Quarter ResultsAURORA, Ontario, November 9, 2017 /PRNewswire/ --
Magna International Inc. (TSX: MG) (NYSE: MGA) today reported financial results for the third quarter ended September 30, 2017. Please click HERE for full third quarter Financial Statements and MD&A. THREE MONTHS ENDED NINE MONTHS ENDED SEPTEMBER 30, SEPTEMBER 30, 2017 2016 2017 2016 Sales $9,499 $8,849 $28,555 $27,192 Income from operations before income taxes $ 670 $ 692 $ 2,238 $ 2,134 Net income attributable to Magna International Inc. $ 503 $ 503 $ 1,650 $ 1,553 Adjusted EBIT[(1)] $ 692 $ 715 $ 2,299 $ 2,202 Diluted earnings per share $ 1.36 $ 1.29 $ 4.37 $ 3.92 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, 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 and nine months ended September 30, 2017 available in the Investor Relations section of our website at http://www.magna.com/investors. "I'm pleased with our overall performance as we posted record third quarter results. Magna remains well-positioned to benefit from the shift toward electrification, autonomy, and vehicle light-weighting. In China, our recently announced joint-venture with HASCO was awarded a highly integrated e-drive system for a German OEM. At the Frankfurt Auto Show, we unveiled our MAX4 autonomous driving platform, which enables up to Level 4 autonomous driving capabilities. Our product breadth combined with complete vehicle design and engineering capabilities uniquely positions Magna to be a supplier of solutions." THREE MONTHS ENDED SEPTEMBER 30, 2017 We posted third quarter record sales of $9.50 billion for the quarter ended September 30, 2017, an increase of 7% over the third quarter of 2016. The sales increase was achieved in a period in which European light vehicle production increased 8% and North American light vehicle production decreased 7%, each relative to the third quarter of 2016. Our complete vehicle assembly sales increased 55% in the third quarter of 2017 largely reflecting the launch of the BMW 5-Series at our assembly facility in Graz, Austria, following the end of production of the MINI Countryman and Paceman in 2016. During the third quarter of 2017, income from operations before income taxes was $670 million, compared to $692 million in the third quarter of 2016. Net income attributable to Magna International Inc. was $503 million for the third quarters of both 2017 and 2016. Diluted earnings per share were $1.36 in the third quarter of 2017 compared to $1.29 in the third quarter of 2016, reflecting the favourable impact of a reduced share count. During the third quarter of 2017, Adjusted EBIT decreased 3% to $692 million, compared to $715 million for the third quarter of 2016. Our Asia and Rest of World segments posted higher Adjusted EBIT and Adjusted EBIT percentage of sales, compared to the third quarter of 2016. During the third quarter ended September 30, 2017, we generated cash from operations of $859 million before changes in operating assets and liabilities, and $22 million in operating assets and liabilities. Investment activities for the third quarter of 2017 were $537 million, including $379 million in fixed asset additions and $158 million in investments, other assets and intangible assets. NINE MONTHS ENDED SEPTEMBER 30, 2017 We posted sales of $28.56 billion for the nine months ended September 30, 2017, an increase of 5% from the nine months ended September 30, 2016. North American light vehicle production decreased 3% and European light vehicle production increased 3% in the first nine months of 2017 compared to the first nine months of 2016. During the nine months ended September 30, 2017, income from operations before income taxes was $2.24 billion, net income attributable to Magna International Inc. was $1.65 billion and diluted earnings per share were $4.37, increases of $104 million, $97 million and $0.45, respectively, each compared to the first nine months of 2016. During the nine months ended September 30, 2017, Adjusted EBIT increased 4% to $2.30 billion, compared to $2.20 billion for the nine months ended September 30, 2016. Our Asia and Rest of World segments each posted higher Adjusted EBIT and Adjusted EBIT percentage of sales, compared to the first nine months of 2016. During the nine months ended September 30, 2017, we generated cash from operations before changes in operating assets and liabilities of $2.68 billion, and invested $796 million in operating assets and liabilities. Investment activities for the first nine months of 2017 were $1.49 billion, including $1.11 billion in fixed asset additions and $384 million in investments, other assets and intangible assets. RETURN OF CAPITAL TO SHAREHOLDERS During the three months ended September 30, 2017, Magna repurchased 8.7 million shares for $422 million. In addition, we paid dividends of $99 million n the third quarter of 2017. Our Board of Directors declared a quarterly dividend of $0.275 with respect to our outstanding Common Shares for the quarter ended September 30, 2017. This dividend is payable on December 8, 2017 to shareholders of record on November 24, 2017. "We continue to return capital to our shareholders while maintaining a strong balance sheet. With the expiration of our current Normal Course Issuer Bid ("NCIB"), we have returned over $900 million through share repurchases and more than $300 million in dividends as of the end of the third quarter. Since 2012, we have returned approximately $6.7 billion to our shareholders, $5.1 billion through the repurchase of more than 20% of our outstanding shares and $1.6 billion in dividends. Our new NCIB provides flexibility to continue repurchasing up to 10% of our shares over the next year." OTHER MATTERS Subject to the approval by the Toronto Stock Exchange and the New York Stock Exchange, our Board of Directors approved a new Normal Course Issuer Bid ("NCIB") to purchase up to 35.8 million of our Common Shares, representing approximately 10% of our public float of Common Shares. This NCIB is expected to commence on or about November 15, 2017 and will terminate one year later. UPDATED 2017 OUTLOOK Light Vehicle Production (Units) North America 17.2 million Europe 22.2 million Production Sales North America $19.2 - $19.6 billion Europe $9.9 - $10.2 billion Asia $2.3 - $2.4 billion Rest of World $0.5 - $0.6 billion Total Production Sales $31.9 - $32.8 billion Complete Vehicle Assembly Sales $ 3.0 - $3.2 billion Total Sales $38.3 - $39.5 billion Adjusted EBIT Margin[(2)] 8.0% - 8.1% Interest Expense, net Approximately $70 million Income Tax Rate[(3)] Approximately 25% Capital Spending Approximately $1.9 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:
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 third quarter ended September 30, 2017 results on Thursday, November 9, 2017 at 8:00 a.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 1-877-256-5083. International callers should use 1-303-223-4388. 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 as well as our financial review summary will be available on our website on the morning of the call. TAGS Quarterly earnings, record quarter, financial results, sales growth OUR BUSINESS [(4)] We are a leading global automotive supplier with 328 manufacturing operations and 99 product development, engineering and sales centres in 29 countries. We have over 163,000 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 INVESTOR CONTACT: |