Press Release – Magna Announces Second Quarter Results
Please click HERE for a PDF version of the release. (English)
Please click HERE for a PDF version of the release. (French)
Please click HERE for a PDF version of the release. (German)
- Sales of
$10.1 billion decreased 1%, compared to global light vehicle production down 6% - Excluding foreign currency translation and divestitures net of acquisitions, sales up 5% with each segment outpacing global light vehicle production
- Cash provided from operating activities of
$920 million - Returned
$519 million to shareholders through share repurchases and dividends - Outlook largely unchanged
THREE MONTHS ENDED |
SIX MONTHS ENDED |
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2019 | 2018 | 2019 | 2018 | |||||||||
Reported | ||||||||||||
Sales | $ | 10,126 | $ | 10,280 | $ | 20,717 | $ | 21,072 | ||||
Income from operations before income taxes | $ | 595 | $ | 819 | $ | 1,963 | $ | 1,670 | ||||
Net income attributable to |
$ | 452 | $ | 626 | $ | 1,558 | $ | 1,286 | ||||
Diluted earnings per share | $ | 1.42 | $ | 1.77 | $ | 4.83 | $ | 3.60 | ||||
Non-GAAP Financial Measures(1) | ||||||||||||
Adjusted EBIT | $ | 677 | $ | 803 | $ | 1,397 | $ | 1,678 | ||||
Adjusted diluted earnings per share | $ | 1.59 | $ | 1.67 | $ | 3.22 | $ | 3.51 | ||||
All results are reported in millions of (1) Adjusted EBIT, Adjusted diluted earnings per share and Adjusted EBIT as a percentage of sales are Non-GAAP financial measures that have no standardized meaning under |
THREE MONTHS ENDED
Overall, our results came in slightly ahead of our expectations in the second quarter of 2019, driven by our Body Exteriors & Structures, Power & Vision and Complete Vehicles segments. Our Seating segment was below our expectations mainly due to continued launch costs and inefficiencies at a new facility.
On a consolidated basis, we posted sales of
Adjusted EBIT decreased 16% to
- Power & Vision segment, largely driven by higher engineering and other costs in our ADAS business, and lower equity income;
- Seating segment primarily as a result of higher launch costs and inefficiencies at a new facility, lower equity income, and higher commodity costs; and
- Body Exteriors & Structures segment primarily as a result of reduced earnings due to lower sales.
Income from operations before income taxes was
Net income attributable to
Diluted earnings per share decreased to
In the second quarter of 2019, we generated cash from operations of
A photo accompanying this announcement is available at https://www.globenewswire.com/NewsRoom/AttachmentNg/58bfcd6f-4356-4ce7-8e9c-8550b448769d
SIX MONTHS ENDED
We posted sales of
During the six months ended
During the six months ended
During the six months ended
RETURN OF CAPITAL TO SHAREHOLDERS
During the three and six months ended
Our Board of Directors declared a quarterly dividend of
SEGMENT SUMMARY
($Millions unless otherwise noted) | For the three months ended |
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Sales | Adjusted EBIT | ||||||||||||||||||
2019 | 2018 | Change | 2019 | 2018 | Change | ||||||||||||||
Body Exteriors & Structures | $ | 4,243 | $ | 4,551 | $ | (308 | ) | $ | 341 | $ | 388 | $ | (47 | ) | |||||
Power & Vision | 2,808 | 3,197 | (389 | ) | 201 | 299 | (98 | ) | |||||||||||
Seating Systems | 1,452 | 1,424 | 28 | 83 | 117 | (34 | ) | ||||||||||||
Complete Vehicles | 1,802 | 1,280 | 522 | 43 | 1 | 42 | |||||||||||||
Corporate and Other | (179 | ) | (172 | ) | (7 | ) | 9 | (2 | ) | 11 | |||||||||
Total Reportable Segments | $ | 10,126 | $ | 10,280 | $ | (154 | ) | $ | 677 | $ | 803 | $ | (126 | ) |
For the three months ended |
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Adjusted EBIT as a | |||||||||||||||||||
percentage of sales | |||||||||||||||||||
2019 | 2018 | Change | |||||||||||||||||
Body Exteriors & Structures | 8.0 | % | 8.5 | % | (0.5 | )% | |||||||||||||
Power & Vision | 7.2 | % | 9.4 | % | (2.2 | )% | |||||||||||||
Seating Systems | 5.7 | % | 8.2 | % | (2.5 | )% | |||||||||||||
Complete Vehicles | 2.4 | % | 0.1 | % | 2.3 | % | |||||||||||||
Consolidated Average | 6.7 | % | 7.8 | % | (1.1 | )% | |||||||||||||
($Millions unless otherwise noted) | For the six months ended |
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Sales | Adjusted EBIT | ||||||||||||||||||
2019 | 2018 | Change | 2019 | 2018 | Change | ||||||||||||||
Body Exteriors & Structures | $ | 8,551 | $ | 9,170 | $ | (619 | ) | $ | 704 | $ | 731 | $ | (27 | ) | |||||
Power & Vision | 5,891 | 6,387 | (496 | ) | 417 | 658 | (241 | ) | |||||||||||
Seating Systems | 2,885 | 2,894 | (9 | ) | 177 | 247 | (70 | ) | |||||||||||
Complete Vehicles | 3,730 | 2,940 | 790 | 71 | 20 | 51 | |||||||||||||
Corporate and Other | (340 | ) | (319 | ) | (21 | ) | 28 | 22 | 6 | ||||||||||
Total Reportable Segments | $ | 20,717 | $ | 21,072 | $ | (355 | ) | $ | 1,397 | $ | 1,678 | $ | (281 | ) |
For the six months ended |
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Adjusted EBIT as a percentage of sales |
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2019 | 2018 | Change | ||||||||
Body Exteriors & Structures | 8.2 | % | 8.0 | % | 0.2 | % | ||||
Power & Vision | 7.1 | % | 10.3 | % | (3.2 | )% | ||||
Seating Systems | 6.1 | % | 8.5 | % | (2.4 | )% | ||||
Complete Vehicles | 1.9 | % | 0.7 | % | 1.2 | % | ||||
Consolidated Average | 6.7 | % | 8.0 | % | (1.3 | )% | ||||
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.
UPDATED 2019 OUTLOOK
Current | Previous | |||
Light Vehicle Production (Units) |
16.6 million 21.4 million |
16.7 million 21.5 million |
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Segment Sales Body Exteriors & Structures Power & Vision Seating Systems Complete Vehicles |
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Total Sales | ||||
Adjusted EBIT Margin(2) | 6.6% - 6.9% | 6.7% - 7.0% | ||
Equity Income (included in EBIT) | ||||
Interest Expense, net | Approximately |
Approximately |
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Income Tax Rate(3) | Approximately 24% | Approximately 24% | ||
Net Income attributable to Magna | ||||
Capital Spending | Approximately |
Approximately |
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(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 2019 outlook, we have assumed:
- 2019 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 as follows:1 Canadian dollar equalsU.S. dollars 0.7451 euro equalsU.S. dollars 1.125
NON-GAAP FINANCIAL MEASURES RECONCILIATION
Adjusted EBIT | |||||||
The following table reconciles net income to Adjusted EBIT: | |||||||
For the three months ended |
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2019 | 2018 | ||||||
Net Income | $ | 450 | $ | 636 | |||
Add: | |||||||
Interest expense, net | 14 | 23 | |||||
Other expense (income), net | 68 | (39 | ) | ||||
Income taxes | 145 | 183 | |||||
Adjusted EBIT | $ | 677 | $ | 803 | |||
Adjusted EBIT as a percentage of sales (“Adjusted EBIT margin”) | |||||||
Adjusted EBIT as a percentage of sales is calculated in the table below: | |||||||
For the three months ended |
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2019 | 2018 | ||||||
Sales | $ | 10,126 | $ | 10,280 | |||
Adjusted EBIT | $ | 677 | $ | 803 | |||
Adjusted EBIT as a percentage of sales | 6.7 | % | 7.8 | % | |||
Adjusted diluted earnings per share | |||||||
The following table reconciles net income attributable to |
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For the three months ended |
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2019 | 2018 | ||||||
Net income attributable to |
$ | 452 | $ | 626 | |||
Add: | |||||||
Other expense (income), net | 68 | (39 | ) | ||||
Tax effect on Other expense (income), net | (11 | ) | 3 | ||||
Adjusted net income attributable to |
$ | 509 | $ | 590 | |||
Diluted weighted average number of Common Shares outstanding during the year (millions): | 319.5 | 354.1 | |||||
Adjusted diluted earnings per share | $ | 1.59 | $ | 1.67 |
NON-GAAP FINANCIAL MEASURES RECONCILIATION
Adjusted EBIT | |||||||
The following table reconciles net income to Adjusted EBIT: | |||||||
For the six months ended |
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2019 | 2018 | ||||||
Net Income | $ | 1,551 | $ | 1,305 | |||
Add: | |||||||
Interest expense, net | 45 | 44 | |||||
Other income, net | (611 | ) | (36 | ) | |||
Income taxes | 412 | 365 | |||||
Adjusted EBIT | $ | 1,397 | $ | 1,678 | |||
Adjusted EBIT as a percentage of sales (“Adjusted EBIT margin”) | |||||||
Adjusted EBIT as a percentage of sales is calculated in the table below: | |||||||
For the six months ended |
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2019 | 2018 | ||||||
Sales | $ | 20,717 | $ | 21,072 | |||
Adjusted EBIT | $ | 1,397 | $ | 1,678 | |||
Adjusted EBIT as a percentage of sales | 6.7 | % | 8.0 | % | |||
Adjusted diluted earnings per share | |||||||
The following table reconciles net income attributable to |
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For the six months ended |
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2019 | 2018 | ||||||
Net income attributable to |
$ | 1,558 | $ | 1,286 | |||
Add: | |||||||
Other income, net | (611 | ) | (36 | ) | |||
Tax effect on Other income, net | 93 | 3 | |||||
Adjusted net income attributable to |
$ | 1,040 | $ | 1,253 | |||
Diluted weighted average number of Common Shares outstanding during the year (millions): | 322.9 | 357.0 | |||||
Adjusted diluted earnings per share | $ | 3.22 | $ | 3.51 |
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
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 and filed electronically through the System for Electronic Document Analysis and Retrieval (SEDAR) which can be accessed at www.sedar.com as well as on the
We will hold a conference call for interested analysts and shareholders to discuss our second quarter ended
TAGS
Quarterly earnings, record quarter, financial results, sales growth
INVESTOR CONTACT
louis.tonelli@magna.com │ 905.726.7035
MEDIA CONTACT
tracy.fuerst@magna.com │ 248.631.5396
OUR BUSINESS (4)
We are a mobility technology company. We have over 168,000 entrepreneurial-minded employees and 347 manufacturing operations and 92 product development, engineering and sales centres in 28 countries. We have complete vehicle engineering and contract manufacturing expertise, as well as product capabilities which include body, chassis, exterior, seating, powertrain, active driver assistance, electronics, mechatronics, mirrors, lighting and roof systems. Magna also has electronic and software capabilities across many of these areas. Our common shares trade on the
(4) Manufacturing operations, product development, engineering and sales centres and employee figures include certain equity-accounted operations.
FORWARD-LOOKING STATEMENTS
Certain statements in this press release constitute "forward-looking information" or "forward-looking statements" (collectively, "forward-looking statements") and are intended to provide information about management's current expectations and plans. Such forward-looking statements 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", "believe", "intend", "plan", "aim", "forecast", "outlook", "project", "estimate", "target" and similar expressions suggesting future outcomes or events to identify forward-looking statements. Forward-looking statements in this press release include, but are not limited to, statements relating to:
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Our 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 such forward-looking statements, they are not a guarantee of future performance or outcomes. 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:
Risks Related to the Automotive Industry
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Warranty / Recall Risks
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In evaluating forward-looking statements or forward-looking information, we caution readers not to place undue reliance on any forward-looking statement, 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, including the risks, assumptions and uncertainties above which are discussed in greater detail in this document under the section titled "Industry Trends and Risks" and set out in our Annual Information Form filed with securities commissions in
Source: Magna International Inc.