Press Release - Magna Announces Third Quarter 2020 Results
- Sales of
$9.1 billion decreased 2%, compared to 4% lower global light vehicle production - Recorded non-cash impairment charges of
$200 million after income taxes and loss attributable to non-controlling interests related to our investment in an equity accounted transmissions joint venture - Diluted earnings per share of
$1.35 , compared to diluted loss per share of$0.75 in the third quarter of 2019 - Adjusted diluted earnings per share of
$1.95 , 38% higher than the third quarter of 2019 - Cash from operating activities of
$1.6 billion , compared to$750 million in the third quarter of 2019 - 2020 Outlook increased to reflect higher total Sales and Adjusted EBIT margin expectations
Click HERE for a PDF version of the release. (DE)
Click HERE for a PDF version of the release. (FR)
AURORA, Ontario
THREE MONTHS ENDED SEPTEMBER 30, |
NINE MONTHS ENDED SEPTEMBER 30, |
||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||
Reported | |||||||||||||
Sales | $ | 9,129 | $ | 9,319 | $ | 22,079 | $ | 30,036 | |||||
Income (loss) from operations before income taxes | $ | 436 | $ | (319 | ) | $ | 33 | $ | 1,644 | ||||
Net income (loss) attributable to |
$ | 405 | $ | (233 | ) | $ | 19 | $ | 1,325 | ||||
Diluted earnings (loss) per share | $ | 1.35 | $ | (0.75 | ) | $ | 0.06 | $ | 4.15 | ||||
Non-GAAP Financial Measures(1) | |||||||||||||
Adjusted EBIT | $ | 778 | $ | 558 | $ | 581 | $ | 1,955 | |||||
Adjusted diluted earnings per share | $ | 1.95 | $ | 1.41 | $ | 1.12 | $ | 4.63 | |||||
All results are reported in millions of |
|||||||||||||
(1) Adjusted EBIT and Adjusted diluted earnings per share are Non-GAAP financial measures that have no standardized meaning under |
A photo accompanying this announcement is available at https://www.globenewswire.com/NewsRoom/AttachmentNg/36ad46eb-a4be-4ecb-95f2-770391b42d62
THREE MONTHS ENDED SEPTEMBER 30, 2020
Sales and Adjusted EBIT came in above our expectations in the third quarter of 2020, as vehicle production was better than anticipated, and we were able to efficiently ramp up production while benefitting from discretionary and structural cost savings and efficiencies realized across the company. We also benefitted from COVID-19 related government employee support programs which were extended into the third quarter of 2020.
On a consolidated basis, we posted sales of
Adjusted EBIT increased to
Income from operations before income taxes was
Net income attributable to
Diluted earnings per share increased to
In the third quarter of 2020, we generated
NINE MONTHS ENDED SEPTEMBER 30, 2020
We posted sales of
During the nine months ended
During the nine months ended
During the nine months ended
RETURN OF CAPITAL TO SHAREHOLDERS
During the three and nine months ended
Our Board of Directors declared a third quarter dividend of
OTHER MATTERS
Subject to the approval by the
A photo accompanying this announcement is available at https://www.globenewswire.com/NewsRoom/AttachmentNg/c4113a3d-b6c2-4fa4-91a7-55eedb06558c
(2) Free cash flow represents Cash from Operating Activities plus proceeds from normal course dispositions of fixed and other assets minus capital spending minus investments in other assets.
SEGMENT SUMMARY
($Millions unless otherwise noted) | For the three months ended September 30, | ||||||||||||||||||
Sales | Adjusted EBIT | ||||||||||||||||||
2020 | 2019 | Change | 2020 | 2019 | Change | ||||||||||||||
Body Exteriors & Structures | $ | 3,858 | $ | 3,984 | $ | (126 | ) | $ | 390 | $ | 306 | $ | 84 | ||||||
Power & Vision | 2,722 | 2,696 | 26 | 227 | 167 | 60 | |||||||||||||
Seating Systems | 1,280 | 1,266 | 14 | 66 | 56 | 10 | |||||||||||||
Complete Vehicles | 1,402 | 1,516 | (114 | ) | 70 | 29 | 41 | ||||||||||||
Corporate and Other | (133 | ) | (143 | ) | 10 | 25 | — | 25 | |||||||||||
Total Reportable Segments | $ | 9,129 | $ | 9,319 | $ | (190 | ) | $ | 778 | $ | 558 | $ | 220 |
For the three months ended September 30, | |||||||||||||||||||
Adjusted EBIT as a percentage of sales |
|||||||||||||||||||
2020 | 2019 | Change | |||||||||||||||||
Body Exteriors & Structures | 10.1 | % | 7.7 | % | 2.4 | % | |||||||||||||
Power & Vision | 8.3 | % | 6.2 | % | 2.1 | % | |||||||||||||
Seating Systems | 5.2 | % | 4.4 | % | 0.8 | % | |||||||||||||
Complete Vehicles | 5.0 | % | 1.9 | % | 3.1 | % | |||||||||||||
Consolidated Average | 8.5 | % | 6.0 | % | 2.5 | % | |||||||||||||
($Millions unless otherwise noted) | For the nine months ended September 30, | ||||||||||||||||||
Sales | Adjusted EBIT | ||||||||||||||||||
2020 | 2019 | Change | 2020 | 2019 | Change | ||||||||||||||
Body Exteriors & Structures | $ | 9,157 | $ | 12,535 | $ | (3,378 | ) | $ | 274 | $ | 1,010 | $ | (736 | ) | |||||
Power & Vision | 6,543 | 8,587 | (2,044 | ) | 136 | 584 | (448 | ) | |||||||||||
Seating Systems | 3,065 | 4,151 | (1,086 | ) | 22 | 233 | (211 | ) | |||||||||||
Complete Vehicles | 3,656 | 5,246 | (1,590 | ) | 164 | 100 | 64 | ||||||||||||
Corporate and Other | (342 | ) | (483 | ) | 141 | (15 | ) | 28 | (43 | ) | |||||||||
Total Reportable Segments | $ | 22,079 | $ | 30,036 | $ | (7,957 | ) | $ | 581 | $ | 1,955 | $ | (1,374 | ) |
For the nine months ended September 30, | ||||||||||
Adjusted EBIT as a percentage of sales |
||||||||||
2020 | 2019 | Change | ||||||||
Body Exteriors & Structures | 3.0 | % | 8.1 | % | (5.1 | )% | ||||
Power & Vision | 2.1 | % | 6.8 | % | (4.7 | )% | ||||
Seating Systems | 0.7 | % | 5.6 | % | (4.9 | )% | ||||
Complete Vehicles | 4.5 | % | 1.9 | % | 2.6 | % | ||||
Consolidated Average | 2.6 | % | 6.5 | % | (3.9 | )% | ||||
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.
2020 OUTLOOK
Current(3) | Previous | ||||
Light Vehicle Production (Units) North America Europe |
12.7 million 16.1 million |
12.5 million 15.9 million |
|||
Segment Sales Body Exteriors & Structures Power & Vision Seating Systems Complete Vehicles |
|||||
Total Sales | |||||
Adjusted EBIT Margin(4) | 4.0% - 4.4% | 2.9% - 3.3% | |||
Equity Income (included in EBIT) | |||||
Interest Expense, net | Approximately |
Approximately |
|||
Income Tax Rate(5) | Approximately 28.5% | Approximately 30% | |||
Net Income attributable to Magna (6) | |||||
Capital Spending | Approximately |
Approximately |
|||
(3) Our current outlook includes Segment Sales, Equity Income and Net income attributable to Magna, none of which were provided in our previous outlook dated (4) Adjusted EBIT Margin is the ratio of Adjusted EBIT to Total Sales (5) The Income Tax Rate has been calculated using Adjusted EBIT and is based on current tax legislation (6) Net Income attributable to Magna represents Net Income excluding Other expense (income), net |
In this 2020 outlook, we have assumed:
- 2020 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 0.7421 euro equalsU.S. dollars 1.138
There continues to be uncertainty related to our outlook above as a result of elevated risks associated with consumer demand, as well as continuing COVID-19 risks to various aspects of our business and the automotive industry, as discussed in our MD&A for the third quarter of 2020, our Annual Information Form / Form 40-F dated
NON-GAAP FINANCIAL MEASURES RECONCILIATION
Adjusted EBIT | |||||||
The following table reconciles net income to Adjusted EBIT: | |||||||
For the three months ended September 30, |
|||||||
2020 | 2019 | ||||||
Net income (loss) | $ | 327 | $ | (364 | ) | ||
Add: | |||||||
Interest expense, net | 26 | 18 | |||||
Other expense, net | 316 | 859 | |||||
Income taxes | 109 | 45 | |||||
Adjusted EBIT | $ | 778 | $ | 558 | |||
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 September 30, |
|||||||
2020 | 2019 | ||||||
Sales | $ | 9,129 | $ | 9,319 | |||
Adjusted EBIT | $ | 778 | $ | 558 | |||
Adjusted EBIT as a percentage of sales | 8.5 | % | 6.0 | % | |||
Adjusted diluted earnings per share | |||||||
The following table reconciles net income attributable to |
|||||||
For the three months ended September 30, |
|||||||
2020 | 2019 | ||||||
Net income (loss) attributable to |
$ | 405 | $ | (233 | ) | ||
Add (deduct): | |||||||
Other expense, net | 316 | 859 | |||||
Tax effect on Other expense, net | (61 | ) | (61 | ) | |||
Loss attributable to non-controlling interests related | |||||||
to Other expense, net | (75 | ) | (127 | ) | |||
Adjusted net income attributable to |
$ | 585 | $ | 438 | |||
Diluted weighted average number of Common Shares outstanding during the period (millions): | 299.4 | 310.7 | |||||
Adjusted diluted earnings per share | $ | 1.95 | $ | 1.41 |
NON-GAAP FINANCIAL MEASURES RECONCILIATION
Adjusted EBIT | |||||||
The following table reconciles net income to Adjusted EBIT: | |||||||
For the nine months ended September 30, |
|||||||
2020 | 2019 | ||||||
Net (loss) income | $ | (73 | ) | $ | 1,187 | ||
Add (deduct): | |||||||
Interest expense, net | 64 | 63 | |||||
Other expense, net | 484 | 248 | |||||
Income taxes | 106 | 457 | |||||
Adjusted EBIT | $ | 581 | $ | 1,955 | |||
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 nine months ended September 30, |
|||||||
2020 | 2019 | ||||||
Sales | $ | 22,079 | $ | 30,036 | |||
Adjusted EBIT | $ | 581 | $ | 1,955 | |||
Adjusted EBIT as a percentage of sales | 2.6 | % | 6.5 | % | |||
Adjusted diluted earnings per share | |||||||
The following table reconciles net income attributable to |
|||||||
For the nine months ended September 30, |
|||||||
2020 | 2019 | ||||||
Net income attributable to |
$ | 19 | $ | 1,325 | |||
Add (deduct): | |||||||
Other expense, net | 484 | 248 | |||||
Tax effect on Other expense, net | (93 | ) | 32 | ||||
Loss attributable to non-controlling interests related | |||||||
to Other expense, net | (75 | ) | (127 | ) | |||
Adjusted net income attributable to |
$ | 335 | $ | 1,478 | |||
Diluted weighted average number of Common Shares outstanding during the period (millions): | 300.2 | 319.1 | |||||
Adjusted diluted earnings per share | $ | 1.12 | $ | 4.63 |
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 third quarter ended
TAGS
Quarterly earnings, financial results, vehicle production
INVESTOR CONTACT
louis.tonelli@magna.com │ 905.726.7035
MEDIA CONTACT
tracy.fuerst@magna.com │ 248.631.5396
OUR BUSINESS (7)
We are a mobility technology company. We have over 157,000 entrepreneurial-minded employees, 344 manufacturing operations and 93 product development, engineering and sales centres in 27 countries. We have complete vehicle engineering and contract manufacturing expertise, as well as product capabilities that include body, chassis, exteriors, seating, powertrain, active driver assistance, electronics, mechatronics, mirrors, lighting and roof systems. Our common shares trade on the
(7) 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"). Any such forward-looking statements are intended to provide information about management's current expectations and plans and 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: the expected impact of our cost structure and spending reductions on our financial results; forecasts of light vehicle production in
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 any 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
Customer and Supplier Related Risks
Manufacturing Operational Risks
IT Security/Cybersecurity Risk
|
Pricing Risks
Warranty / Recall Risks
Acquisition Risks
Other Business Risks
Legal, Regulatory and Other Risks
|
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.