AURORA, Ontario, February 24, 2017 /PRNewswire/ --
- Record 2016 sales up 13%, well above
4% growth in global light vehicle production
- Record 2016 diluted earnings per share from continuing operations
increased 9%
- Record 2016 cash generated from operating activities of
$3.4 billion, up 45%
- Returned $1.3 billion to
shareholders in 2016
Magna International Inc. (TSX: MG; NYSE: MGA) today reported
financial results for the fourth quarter and year ended
December 31, 2016.
THREE MONTHS ENDED
DECEMBER 31,
2016 2015
Sales $ 9,253 $ 8,568
Income from continuing operations before income taxes $ 646 $ 624
Net income from continuing operations attributable $ 478 $ 483
to Magna International Inc.
Adjusted EBIT(1) $ 696 $ 656
Diluted earnings per share from continuing operations $ 1.24 $ 1.19
(Table continued)
YEAR ENDED
DECEMBER 31,
2016 2015
Sales $ 36,445 $ 32,134
Income from continuing operations before income taxes $ 2,780 $ 2,651
Net income from continuing operations attributable $ 2,031 $ 1,946
to Magna International Inc.
Adjusted EBIT(1) $ 2,898 $ 2,529
Diluted earnings per share from continuing operations $ 5.16 $ 4.72
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.
THREE MONTHS ENDED DECEMBER 31,
2016
We posted sales of $9.25 billion
for the fourth quarter ended December 31,
2016, an increase of 8% over the fourth quarter of 2015.
This strong year over year growth was achieved despite both North
American and European light vehicle production decreasing 4%
compared to the fourth quarter of 2015. Our complete vehicle
assembly volumes decreased 70%, largely reflecting the end of
production of the MINI Countryman and Paceman in the fourth quarter
of 2016.
During the fourth quarter of 2016, income from continuing
operations before income taxes was $646
million, an increase of 4% compared to the fourth quarter of
2015. Net income from continuing operations attributable to Magna
International Inc. was $478 million,
a decrease of 1% compared to the fourth quarter of
2015. Diluted earnings per share from continuing operations
increased $0.05 in the fourth quarter
of 2016, which includes the favourable impact of a reduced share
count. Excluding unusual items, income from continuing
operations before income taxes, net income from continuing
operations attributable to Magna International Inc., and diluted
earnings per share from continuing operations increased 6%, 1%, and
7%, respectively, in the fourth quarter of 2016 compared to the
fourth quarter of 2015.
During the fourth quarter ended December
31, 2016, we generated cash from operations of $878 million before changes in operating assets
and liabilities, and $840 million in
operating assets and liabilities. Total investment activities for
the fourth quarter of 2016 were $934
million, including $662 million in fixed asset
additions, $155 million in
investments and other assets and $117
million to purchase subsidiaries.
YEAR ENDED DECEMBER 31,
2016
We posted record sales of $36.45
billion for the year ended December
31, 2016, an increase of 13% from the year ended
December 31, 2015. In
comparison, both North American and European light vehicle
production increased 2%, in 2016 compared to 2015. Our
complete vehicle assembly volumes decreased 28%, largely reflecting
the end of production of the MINI Countryman and Paceman in the
fourth quarter of 2016.
During 2016, income from continuing operations before income
taxes was $2.78 billion and net
income from continuing operations attributable to Magna
International Inc. was $2.03 billion,
increases of $129 million and
$85 million, respectively, both
compared to 2015. Diluted earnings per share from continuing
operations increased $0.44 or 9% in
2016, which includes the favourable impact of a reduced share
count. Excluding unusual items, income from continuing
operations before income taxes, net income from continuing
operations attributable to Magna International Inc., and diluted
earnings per share from continuing operations increased 13%, 11%,
and 16%, respectively, in 2016 compared to 2015.
During December 31, 2016, we
generated cash from operations before changes in operating assets
and liabilities of $3.31 billion, and
$81 million in operating assets and
liabilities. Total investment activities for 2016 were $4.22 billion, including $1.93 billion to purchase subsidiaries,
$1.81 billion in fixed asset
additions and $478 million in
investments and other assets.
A more detailed discussion of our consolidated financial results
for the fourth quarter and year ended December 31, 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.
"2016 was another great year for Magna, with sales growth
well above the market, record earnings and strong operating cash
flow. We expect 2017 to be a strong year for Magna as
well. We also completed the acquisition of Getrag
early last year, and began its integration into Magna.
We are pleased with our progress to date, and are excited about
the strategic value Getrag brings to us.
Looking forward, as the industry undergoes significant
changes over the next number of years, we believe our capabilities,
innovations and deep vehicle knowledge will be instrumental in
enabling the 'Car of the Future'. This should drive
significant shareholder value."
- Don Walker, Magna's
Chief Executive Officer
RETURN OF CAPITAL TO SHAREHOLDERS
During the three months and year ended December 31, 2016, Magna repurchased 2.7 million
shares for $114 million and 22.6
million shares for $913 million,
respectively.
Yesterday, our Board of Directors declared a quarterly dividend
of $0.275 with respect to our
outstanding Common Shares for the quarter ended December 31, 2016. This dividend is payable on
March 24, 2017 to shareholders of
record on March 10, 2017.
"This 10% dividend increase, the eighth consecutive year of
increases, reflects the confidence that both management and our
Board currently have in Magna's future."
- Vince Galifi, Magna's Chief
Financial Officer
2017 OUTLOOK
Light Vehicle Production (Units)
North America 17.7 million
Europe 21.7 million
Production Sales
North America $19.2 - $19.8 billion
Europe $8.7 - $9.1 billion
Asia $2.2 - $2.4 billion
Rest of World $0.3 - $0.4 billion
Total Production Sales $30.4 - $31.7 billion
Complete Vehicle
Assembly Sales $2.7 - $3.0 billion
Total Sales $36.0 - $37.7 billion
EBIT Margin(2) Approximately 8%
Interest Expense, net Approximately $90 million
Tax Rate 25% - 26%
Capital Spending Approximately $2.0 billion
(2) Earnings Before Interest and Taxes ("EBIT") represents
net income before income taxes and interest expense, net. EBIT
Margin is the ratio of EBIT to Total Sales.
In this 2017 outlook, in addition to 2017 light vehicle
production, we have assumed no material unannounced 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.
We will hold a conference call for interested analysts and
shareholders to discuss our fourth quarter and year ended
December 31, 2016 results on
Friday, February 24, 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 is
1-800-954-0695. The number for overseas callers is 1-416-981-9009.
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.
TAGS
Quarterly earnings, record quarter, financial results, sales
growth
OUR BUSINESS(3)
We are a leading global automotive supplier with 317 manufacturing
operations and 102 product development, engineering and sales
centres in 29 countries. We have over 155,000 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 www.magna.com.
(3) 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
905-726-7035
MEDIA CONTACT:
Tracy Fuerst
Director of Corporate Communications & PR
tracy.fuerst@magna.com
248-631-5396