Press Release - Magna Announces Fourth Quarter 2020 Results and Outlook
Fourth Quarter 2020 Highlights
- Sales of
$10.6 billion increased 12%, compared to higher global light vehicle production of 4% - Diluted earnings per share of
$2.45 , compared to$1.43 in the fourth quarter of 2019 - Adjusted diluted earnings per share of
$2.83 , more than double the fourth quarter of 2019 - Cash from operating activities of
$2.3 billion , compared to$1.7 billion in the fourth quarter of 2019 - Raised quarterly cash dividend by 8% to
$0.43 per share
Full Year 2020 Highlights
- Sales of
$32.6 billion decreased 17%, compared to vehicle production declines of 20% and 23% in our most significant production markets ofNorth America andEurope - Returned
$659 million to shareholders primarily through dividends
AURORA, Ontario
THREE MONTHS ENDED |
YEAR ENDED |
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2020 | 2019 | 2020 | 2019 | |||||||||
Reported | ||||||||||||
Sales | $ | 10,568 | $ | 9,395 | $ | 32,647 | $ | 39,431 | ||||
Income from operations before income taxes | $ | 973 | $ | 579 | $ | 1,006 | $ | 2,223 | ||||
Net income attributable to Magna International Inc. |
$ | 738 | $ | 440 | $ | 757 | $ | 1,765 | ||||
Diluted earnings per share | $ | 2.45 | $ | 1.43 | $ | 2.52 | $ | 5.59 | ||||
Non-GAAP Financial Measures(1) | ||||||||||||
Adjusted EBIT | $ | 1,095 | $ | 590 | $ | 1,676 | $ | 2,545 | ||||
Adjusted diluted earnings per share | $ | 2.83 | $ | 1.41 | $ | 3.95 | $ | 6.05 | ||||
All results are reported in millions of |
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(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/f13a4d9c-17ff-4acb-a675-8e472efb9d71
THREE MONTHS ENDED
Sales and Adjusted EBIT came in ahead of our expectations in the fourth quarter of 2020, as vehicle production was better than anticipated and we continued to benefit from strong operating performance. We also benefitted from higher than anticipated equity income.
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 fourth quarter of 2020, we generated
YEAR ENDED
We posted sales of
Adjusted EBIT decreased to
During 2020, income from operations before income taxes was
Diluted earnings per share decreased to
During 2020, we generated cash from operations of
RETURN OF CAPITAL TO SHAREHOLDERS
During the three months and year ended
Our Board of Directors declared a fourth quarter dividend of
A photo accompanying this announcement is available at https://www.globenewswire.com/NewsRoom/AttachmentNg/6c30d392-2723-45de-a89c-6a485ac5b389
2021 AND 2023 OUTLOOK
Our current year Outlook is provided annually and updated quarterly; our 2023 Outlook is provided below, but not updated quarterly.
2021 and 2023 Outlook Assumptions
2021 | 2023 | |||
Light Vehicle Production (millions of units) | ||||
15.9 | 16.3 | |||
18.5 | 20.1 | |||
24.0 | 26.0 | |||
Average Foreign exchange rates: | ||||
2021 and 2023 Outlook
2021 | 2023 | |||
Segment Sales | ||||
Body Exteriors & Structures | ||||
Power & Vision | ||||
Seating Systems | ||||
Complete Vehicles | ||||
Total Sales | ||||
Adjusted EBIT Margin(1) | 7.1% - 7.5% | 8.1% - 8.6% | ||
Equity Income (included in EBIT) | ||||
Interest Expense, net | Approximately |
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Income Tax Rate(2) | Approximately 23% | |||
Net Income attributable to Magna(3) | ||||
Capital Spending | Approximately |
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Notes: (1) Adjusted EBIT Margin is the ratio of Adjusted EBIT to Total Sales (2) The Income Tax Rate has been calculated using Adjusted EBIT and is based on current tax legislation (3) Net Income attributable to Magna represents Net Income excluding Other expense (income), net |
Our Outlook is intended to provide information about management's current expectations and plans and may not be appropriate for other purposes. Although considered reasonable by Magna as of the date of this document, the 2021 and 2023 Outlook above and the underlying assumptions may prove to be inaccurate. Accordingly, our actual results could differ materially from our expectations as set forth herein. The risks identified in the “Forward-Looking Statements” section below represent the primary factors which we believe could cause actual results to differ materially from our expectations.
Our operating results are primarily dependent on the levels of North American, European and Chinese car and light truck production by our customers. While we supply systems and components to every major original equipment manufacturer ["OEM"], we do not supply systems and components for every vehicle, nor is the value of our content consistent from one vehicle to the next. As a result, customer and program mix relative to market trends, as well as the value of our content on specific vehicle production programs, are also important drivers of our results.
OEM production volumes are generally aligned with vehicle sales levels and thus affected by changes in such levels. Aside from vehicle sales levels, production volumes are typically impacted by a range of factors, including: general economic and political conditions; labour disruptions; free trade arrangements; tariffs; relative currency values; commodities prices; supply chains and infrastructure; availability and relative cost of skilled labour; regulatory considerations, including those related to environmental emissions and safety standards; and other factors. Additionally, COVID-19 can impact vehicle production volumes, including through: mandatory stay-at-home orders which restrict production; elevated employee absenteeism; and supply chain disruptions, such as the semiconductor chip shortage currently impacting global vehicle production volumes.
Overall vehicle sales levels are significantly affected by changes in consumer confidence levels, which may in turn be impacted by consumer perceptions and general trends related to the job, housing and stock markets, as well as other macroeconomic and political factors. Other factors which typically impact vehicle sales levels and thus production volumes include: interest rates and/or availability of credit; fuel and energy prices; relative currency values; regulatory restrictions on use of vehicles in certain megacities; and other factors. Additionally, COVID-19 can impact vehicle sales, including through: mandatory stay-at-home orders which restrict operations of car dealerships; and lower consumer confidence due to deterioration in household income.
Segment Analysis
[All amounts in
Body Exteriors & Structures | ||||||||||||
For the three months | ||||||||||||
ended |
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2020 | 2019 | Change | ||||||||||
Sales | $ | 4,393 | $ | 3,923 | $ | 470 | + 12% | |||||
Adjusted EBIT | $ | 543 | $ | 289 | $ | 254 | + 88% | |||||
Adjusted EBIT as a percentage of sales (i) | 12.4% | 7.4% | + 5.0% | |||||||||
(i) Adjusted EBIT as a percentage of sales is calculated as Adjusted EBIT divided by Sales. | ||||||||||||
Sales for Body Exteriors & Structures increased 12% or $470 million to $4.39 billion for the fourth quarter of 2020 compared to $3.92 billion in 2019. The increase in sales was primarily due to the negative impact of the labour strike at
Adjusted EBIT for Body Exteriors & Structures increased $254 million to $543 million for the fourth quarter of 2020 compared to $289 million for the fourth quarter of 2019 and Adjusted EBIT as a percentage of sales increased 5.0% to 12.4% for the fourth quarter of 2020 compared to 7.4% for the fourth quarter of 2019. The increases reflect improved productivity, cost savings and efficiencies realized, including as a result of restructuring actions, the negative impact of the labour strike at
Power & Vision | |||||||||||
For the three months | |||||||||||
ended |
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2020 | 2019 | Change | |||||||||
Sales | $ | 3,179 | $ | 2,725 | $ | 454 | + 17% | ||||
Adjusted EBIT | $ | 359 | $ | 163 | $ | 196 | + 120% | ||||
Adjusted EBIT as a percentage of sales | 11.3% | 6.0% | + 5.3% | ||||||||
Sales for Power & Vision increased 17% or $454 million to $3.18 billion for the fourth quarter of 2020 compared to $2.73 billion for the fourth quarter of 2019. The increase in sales was primarily due to the negative impact of the labour strike at
Adjusted EBIT for Power & Vision increased
Seating Systems | ||||||||||||
For the three months | ||||||||||||
ended |
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2020 | 2019 | Change | ||||||||||
Sales | $ | 1,390 | $ | 1,426 | $ | (36) | - 3% | |||||
Adjusted EBIT | $ | 85 | $ | 79 | $ | 6 | + 8% | |||||
Adjusted EBIT as a percentage of sales | 6.1% | 5.5% | + 0.6% | |||||||||
Sales for Seating Systems declined 3% or $36 million to $1.39 billion for the fourth quarter of 2020 compared to $1.43 billion for the fourth quarter of 2019. This decrease was primarily due to lower production on certain key programs, in particular the Chrysler Minivan, the end of production of certain programs, a
Adjusted EBIT for Seating Systems increased $6 million to $85 million for the fourth quarter of 2020 compared to $79 million for the fourth quarter of 2019 and Adjusted EBIT as a percentage of sales increased 0.6% to 6.1% for the fourth quarter of 2020 compared to 5.5% for the fourth quarter of 2019. The increases were primarily due to cost savings and efficiencies realized, including as a result of restructuring actions, the negative impact of the labour strike at
Complete Vehicles | |||||||||||
For the three months | |||||||||||
ended |
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2020 | 2019 | Change | |||||||||
Complete Vehicle Assembly Volumes (thousands of units) | 34.5 | 33.9 | + 2% | ||||||||
Sales | $ | 1,759 | $ | 1,461 | $ | 298 | + 20% | ||||
Adjusted EBIT | $ | 110 | $ | 44 | $ | 66 | + 150% | ||||
Adjusted EBIT as a percentage of sales | 6.3% | 3.0% | + 3.3% | ||||||||
Sales for Complete Vehicles increased 20% or $298 million to $1.76 billion for the fourth quarter of 2020 compared to $1.46 billion for the fourth quarter of 2019, and assembly volumes increased 2% or 600 units. This sales increase was primarily due to higher volumes on the Jaguar I-Pace, BMW 5 Series and Mercedes Benz G-Class and a
Adjusted EBIT for Complete Vehicles increased $66 million to $110 million in the fourth quarter of 2020, and Adjusted EBIT as a percentage of sales improved to 6.3% in the fourth quarter of 2020 compared to 3.0% in the fourth quarter of 2019. The increases were primarily due to higher earnings on engineering sales, favourable program mix, the benefit of a cost cutting initiative, and restructuring and downsizing costs incurred during the fourth quarter of 2019.
CONSOLIDATED STATEMENTS OF INCOME | ||||||||||||
[Unaudited] | ||||||||||||
[ |
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Three months ended | Year ended | |||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||
Sales | $ | 10,568 | $ | 9,395 | $ | 32,647 | $ | 39,431 | ||||
Costs and expenses | ||||||||||||
Cost of goods sold | 8,753 | 8,085 | 28,207 | 34,022 | ||||||||
Depreciation and amortization | 362 | 355 | 1,366 | 1,345 | ||||||||
Selling, general and administrative | 448 | 423 | 1,587 | 1,697 | ||||||||
Interest expense, net | 22 | 19 | 86 | 82 | ||||||||
Equity income | (90) | (58) | (189) | (178) | ||||||||
Other expense (income), net [i] | 100 | (8) | 584 | 240 | ||||||||
Income from operations before income taxes | 973 | 579 | 1,006 | 2,223 | ||||||||
Income taxes | 223 | 134 | 329 | 591 | ||||||||
Net income | 750 | 445 | 677 | 1,632 | ||||||||
(Income) loss attributable to non-controlling interests | (12) | (5) | 80 | 133 | ||||||||
Net income attributable to |
$ | 738 | $ | 440 | $ | 757 | $ | 1,765 | ||||
Earnings per Common Share: | ||||||||||||
Basic | $ | 2.46 | $ | 1.44 | $ | 2.52 | $ | 5.61 | ||||
Diluted | $ | 2.45 | $ | 1.43 | $ | 2.52 | $ | 5.59 | ||||
Cash dividends paid per Common Share | $ | 0.400 | $ | 0.365 | $ | 1.60 | $ | 1.46 | ||||
Weighted average number of Common Shares outstanding during the period [in millions]: | ||||||||||||
Basic | 299.6 | 305.0 | 299.7 | 314.7 | ||||||||
Diluted | 300.9 | 306.3 | 300.4 | 315.8 | ||||||||
[i] See "Other expense (income), net" information included in this Press Release. | ||||||||||||
CONSOLIDATED BALANCE SHEETS | ||||||
[Unaudited] | ||||||
[ |
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As at | As at | |||||
2020 | 2019 | |||||
ASSETS | ||||||
Current assets | ||||||
Cash and cash equivalents | $ | 3,268 | $ | 1,276 | ||
Accounts receivable | 6,394 | 5,927 | ||||
Inventories | 3,444 | 3,304 | ||||
Prepaid expenses and other | 260 | 238 | ||||
13,366 | 10,745 | |||||
Investments | 947 | 1,210 | ||||
Fixed assets, net | 8,475 | 8,260 | ||||
Operating lease right-of-use assets | 1,906 | 1,811 | ||||
Intangible assets, net | 481 | 484 | ||||
2,095 | 1,976 | |||||
Deferred tax assets | 372 | 308 | ||||
Other assets | 963 | 996 | ||||
$ | 28,605 | $ | 25,790 | |||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||
Current liabilities | ||||||
Accounts payable | $ | 6,266 | $ | 5,628 | ||
Other accrued liabilities | 2,254 | 1,800 | ||||
Accrued salaries and wages | 815 | 753 | ||||
Income taxes payable | 38 | 17 | ||||
Long‑term debt due within one year | 129 | 106 | ||||
Current portion of operating lease liabilities | 241 | 225 | ||||
9,743 | 8,529 | |||||
Long‑term debt | 3,973 | 3,062 | ||||
Operating lease liabilities | 1,656 | 1,601 | ||||
Long-term employee benefit liabilities | 729 | 677 | ||||
Other long‑term liabilities | 332 | 371 | ||||
Deferred tax liabilities | 452 | 419 | ||||
16,885 | 14,659 | |||||
Shareholders' equity | ||||||
Capital stock | ||||||
Common Shares | ||||||
[issued: 300,527,416; |
3,271 | 3,198 | ||||
Contributed surplus | 128 | 127 | ||||
Retained earnings | 8,704 | 8,596 | ||||
Accumulated other comprehensive loss | (733) | (1,090) | ||||
11,370 | 10,831 | |||||
Non-controlling interests | 350 | 300 | ||||
11,720 | 11,131 | |||||
$ | 28,605 | $ | 25,790 | |||
CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||||||
[Unaudited] | ||||||||||||
[ |
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Three months ended | Year ended | |||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||
Cash provided from (used for): | ||||||||||||
OPERATING ACTIVITIES | ||||||||||||
Net income | $ | 750 | $ | 445 | $ | 677 | $ | 1,632 | ||||
Items not involving current cash flows | 581 | 509 | 2,065 | 1,976 | ||||||||
1,331 | 954 | 2,742 | 3,608 | |||||||||
Changes in operating assets and liabilities | 928 | 742 | 536 | 352 | ||||||||
Cash provided from operating activities | 2,259 | 1,696 | 3,278 | 3,960 | ||||||||
INVESTING ACTIVITIES | ||||||||||||
Fixed asset additions | (560) | (513) | (1,145) | (1,441) | ||||||||
Increase in investments, other assets and intangible assets | (98) | (122) | (331) | (384) | ||||||||
Increase in private equity investments | (18) | — | (132) | (10) | ||||||||
Proceeds from dispositions | 69 | 16 | 117 | 185 | ||||||||
Business combinations | 98 | 5 | 91 | (147) | ||||||||
Proceeds from sale of Lyft, Inc. | — | 221 | — | 231 | ||||||||
Proceeds on sale of business | — | — | — | 1,132 | ||||||||
Cash used for investing activities | (509) | (393) | (1,400) | (434) | ||||||||
FINANCING ACTIVITIES | ||||||||||||
Issues of debt | (2) | 11 | 854 | 47 | ||||||||
Decrease in short-term borrowings | (13) | (436) | (31) | (1,124) | ||||||||
Repayments of debt | (12) | (10) | (140) | (149) | ||||||||
Issue of Common Shares on exercise of stock options | 64 | 11 | 81 | 44 | ||||||||
Tax withholdings on vesting of equity awards | (3) | (4) | (13) | (9) | ||||||||
Repurchase of Common Shares | — | (254) | (203) | (1,289) | ||||||||
Contributions to subsidiaries by non-controlling interests | 18 | — | 18 | 4 | ||||||||
Dividends paid to non-controlling interests | (12) | (9) | (18) | (22) | ||||||||
Dividends paid | (115) | (111) | (467) | (449) | ||||||||
Cash (used for) provided from financing activities | (75) | (802) | 81 | (2,947) | ||||||||
Effect of exchange rate changes on cash, cash equivalents and restricted cash equivalents |
81 | 10 | 23 | 11 | ||||||||
Net increase in cash, cash equivalents and restricted cash equivalents during the period |
1,756 | 511 | 1,982 | 590 | ||||||||
Cash, cash equivalents and restricted cash equivalents, beginning of period |
1,618 | 881 | 1,392 | 802 | ||||||||
Cash, cash equivalents and restricted cash equivalents, end of period |
$ | 3,374 | $ | 1,392 | $ | 3,374 | $ | 1,392 | ||||
SUPPLEMENTAL DATA | ||||||||||||
[Unaudited] | ||||||||||||
[All amounts in |
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OTHER EXPENSE (INCOME), NET | ||||||||||||
During the three months and year ended |
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Three months ended | Year ended | |||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||
Impairments and loss on sale of equity-accounted investments [a] | $ | 10 | $ | — | $ | 347 | $ | 700 | ||||
Restructuring and impairments [b] | 101 | 3 | 269 | 58 | ||||||||
Net (gains) losses on investments [c] | (11) | (11) | (32) | 6 | ||||||||
Gain on sale of business [d] | — | — | — | (524) | ||||||||
Other expense (income), net | $ | 100 | $ | (8) | $ | 584 | $ | 240 |
[a] | Impairments and loss on sale of equity-accounted investments |
The following table summarizes the impairment charges and loss on sale recorded for certain investments in the Company's Power & Vision segment: | |
Three months ended | Year ended | |||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||
$ | — | $ | — | $ | 337 | $ | 511 | |||||
— | — | — | 150 | |||||||||
10 | — | 10 | 39 | |||||||||
Total impairments and loss on sale of equity-accounted investments |
10 | — | 347 | 700 | ||||||||
Tax effect on Other expense, net | 9 | — | (53) | (36) | ||||||||
Loss attributable to non-controlling interests | — | — | (75) | (127) | ||||||||
Non-cash impairment charge included in Net income attributable to |
$ | 19 | $ | — | $ | 219 | $ | 537 | ||||
[i] |
During 2019, the Company recorded an impairment charge related to its equity-accounted investment in GJT. The impairment was based on the in-sourcing of transmissions by certain Chinese OEMs, lower than expected sales, pricing pressure in the |
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During 2020, an impairment for GJT was recorded based on pricing pressure in the |
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[ii] |
On |
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[iii] |
During 2020, the Company recorded a |
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SUPPLEMENTAL DATA | |||||||||||||||||
[Unaudited] | |||||||||||||||||
[All amounts in |
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OTHER EXPENSE (INCOME), NET (CONTINUED) | |||||||||||||||||
[b] | Restructuring and impairments | ||||||||||||||||
The following table summarizes the restructuring and fixed asset impairment charges recorded by segment for the three months and year ended |
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Three months ended |
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Body Exteriors | Power | Seating | Net of | ||||||||||||||
& Structures | & Vision | Systems | Total | Tax | |||||||||||||
Restructuring | $ | 21 | $ | — | $ | — | $ | 21 | $ | 21 | |||||||
Fixed Asset Impairments | 57 | — | — | 57 | 57 | ||||||||||||
Brazil Closures [ii] | 8 | — | 15 | 23 | 23 | ||||||||||||
$ | 86 | $ | — | $ | 15 | $ | 101 | $ | 101 | ||||||||
Year ended |
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Body Exteriors | Power | Seating | Net of | ||||||||||||||
& Structures | & Vision | Systems | Total | Tax | |||||||||||||
COVID-19 Restructuring and Impairments [i] | $ | 37 | $ | 115 | $ | 16 | $ | 168 | $ | 136 | |||||||
Restructuring | 21 | — | — | 21 | 21 | ||||||||||||
Fixed Asset Impairments | 57 | — | — | 57 | 57 | ||||||||||||
Brazil Closures [ii] | 8 | — | 15 | 23 | 23 | ||||||||||||
$ | 123 | $ | 115 | $ | 31 | $ | 269 | $ | 237 |
[i] |
In response to the impact that COVID-19 was expected to have on vehicle production volumes over the short to medium term, the Company initiated and/or accelerated the timing of restructuring plans to right-size its business. These restructuring actions include plant closures and workforce reductions. | |
[ii] | In connection with the recently announced plant closures by Ford in |
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For the year ended |
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SUPPLEMENTAL DATA | ||
[Unaudited] | ||
[All amounts in |
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OTHER EXPENSE (INCOME), NET (CONTINUED) | ||
[c] | Net (gains) losses on investments | |
During 2020, the Company recorded unrealized gains of |
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During 2019, the Company recorded net losses on investments of |
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During 2019, the Company sold 5.4 million shares of its publicly traded equity securities in Lyft for proceeds of |
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[d] | Gain on sale of business | |
During 2019, the Company completed the sale of its global Fluid Pressure & Controls business which was included in the Power & Vision segment. Total consideration was |
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SUPPLEMENTAL DATA
[Unaudited]
[All amounts in
SEGMENTED INFORMATION
Magna is a global automotive supplier which has complete vehicle engineering and contract manufacturing expertise, as well as product capabilities which include body, chassis, exterior, seating, powertrain, active driver assistance, electronics, mirrors & lighting, mechatronics and roof systems. Magna also has electronic and software capabilities across many of these areas.
The Company is organized under four operating segments: Body Exteriors & Structures, Power & Vision, Seating Systems and Complete Vehicles. These segments have been determined on the basis of technological opportunities, product similarities, and market and operating factors, and are also the Company's reportable segments.
The Company's chief operating decision maker uses Adjusted Earnings before Interest and Income Taxes ["Adjusted EBIT"] as the measure of segment profit or loss, since management believes Adjusted EBIT is the most appropriate measure of operational profitability or loss for its reporting segments. Adjusted EBIT is calculated by taking Net income and adding back Income taxes, Interest expense, net, and Other expense (income), net.
SUPPLEMENTAL DATA | ||||||||||||||||||
[Unaudited] | ||||||||||||||||||
[All amounts in |
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SEGMENTED INFORMATION (CONTINUED) | ||||||||||||||||||
The following tables show segment information for the Company's reporting segments and a reconciliation of Adjusted EBIT to the Company's consolidated income from operations before income taxes: | ||||||||||||||||||
Three months ended |
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Depreciation | Fixed | |||||||||||||||||
Total | External | Adjusted | and | Equity | asset | |||||||||||||
sales | sales | EBIT [ii] | amortization | income | additions | |||||||||||||
Body Exteriors & Structures | $ | 4,393 | $ | 4,314 | $ | 543 | $ | 190 | $ | (1) | $ | 296 | ||||||
Power & Vision | 3,179 | 3,126 | 359 | 124 | (80) | 198 | ||||||||||||
Seating Systems | 1,390 | 1,383 | 85 | 20 | (5) | 38 | ||||||||||||
Complete Vehicles | 1,759 | 1,743 | 110 | 23 | (3) | 15 | ||||||||||||
Corporate & Other [i] | (153) | 2 | (2) | 5 | (1) | 13 | ||||||||||||
Total Reportable Segments | $ | 10,568 | $ | 10,568 | $ | 1,095 | $ | 362 | $ | (90) | $ | 560 | ||||||
Three months ended |
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Depreciation | Equity | Fixed | ||||||||||||||||
Total | External | Adjusted | and | (income) | asset | |||||||||||||
sales | sales | EBIT [ii] | amortization | loss | additions | |||||||||||||
Body Exteriors & Structures | $ | 3,923 | $ | 3,849 | $ | 289 | $ | 180 | $ | (1) | $ | 263 | ||||||
Power & Vision | 2,725 | 2,678 | 163 | 128 | (55) | 203 | ||||||||||||
Seating Systems | 1,426 | 1,420 | 79 | 18 | (5) | 31 | ||||||||||||
Complete Vehicles | 1,461 | 1,444 | 44 | 24 | (1) | 15 | ||||||||||||
Corporate & Other [i] | (140) | 4 | 15 | 5 | 4 | 1 | ||||||||||||
Total Reportable Segments | $ | 9,395 | $ | 9,395 | $ | 590 | $ | 355 | $ | (58) | $ | 513 | ||||||
Year ended |
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Depreciation | Fixed | |||||||||||||||||
Total | External | Adjusted | and | Equity | asset | |||||||||||||
sales | sales | EBIT [ii] | amortization | income | additions | |||||||||||||
Body Exteriors & Structures | $ | 13,550 | $ | 13,292 | $ | 817 | $ | 727 | $ | — | $ | 581 | ||||||
Power & Vision | 9,722 | 9,553 | 495 | 464 | (179) | 440 | ||||||||||||
Seating Systems | 4,455 | 4,433 | 107 | 73 | (6) | 70 | ||||||||||||
Complete Vehicles | 5,415 | 5,363 | 274 | 84 | (3) | 34 | ||||||||||||
Corporate & Other [i] | (495) | 6 | (17) | 18 | (1) | 20 | ||||||||||||
Total Reportable Segments | $ | 32,647 | $ | 32,647 | $ | 1,676 | $ | 1,366 | $ | (189) | $ | 1,145 | ||||||
Year ended |
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Depreciation | Equity | Fixed | ||||||||||||||||
Total | External | Adjusted | and | (income) | asset | |||||||||||||
sales | sales | EBIT [ii] | amortization | loss | additions | |||||||||||||
Body Exteriors & Structures | $ | 16,458 | $ | 16,110 | $ | 1,299 | $ | 710 | $ | (3) | $ | 713 | ||||||
Power & Vision | 11,312 | 11,103 | 747 | 464 | (174) | 577 | ||||||||||||
Seating Systems | 5,577 | 5,548 | 312 | 66 | (4) | 76 | ||||||||||||
Complete Vehicles | 6,707 | 6,661 | 144 | 84 | (1) | 69 | ||||||||||||
Corporate & Other [i] | (623) | 9 | 43 | 21 | 4 | 6 | ||||||||||||
Total Reportable Segments | $ | 39,431 | $ | 39,431 | $ | 2,545 | $ | 1,345 | $ | (178) | $ | 1,441 |
[i] | Included in Corporate and Other Adjusted EBIT are intercompany fees charged to the automotive segments. |
[ii] | For a definition and reconciliation of Adjusted EBIT, refer to our Non-GAAP financial measures reconciliation included in the “Supplemental Data” section of this Press Release. |
SUPPLEMENTAL DATA |
[Unaudited] |
[All amounts in |
Non-GAAP Financial Measures
In addition to the financial results reported in accordance with
The following table reconciles Net income to Adjusted EBIT: | ||||||||||||
Three months ended | Year ended | |||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||
Net income | $ | 750 | $ | 445 | $ | 677 | $ | 1,632 | ||||
Add: | ||||||||||||
Interest expense, net | 22 | 19 | 86 | 82 | ||||||||
Other expense (income), net | 100 | (8) | 584 | 240 | ||||||||
Income taxes | 223 | 134 | 329 | 591 | ||||||||
Adjusted EBIT | $ | 1,095 | $ | 590 | $ | 1,676 | $ | 2,545 | ||||
The following table reconciles Net income attributable to |
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Three months ended | Year ended | |||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||
Net income attributable to |
$ | 738 | $ | 440 | $ | 757 | $ | 1,765 | ||||
Add: | ||||||||||||
Other expense (income), net | 100 | (8) | 584 | 240 | ||||||||
Tax effect on Other expense (income), net | 13 | 1 | (80) | 33 | ||||||||
Loss attributable to non-controlling interests related to Other expense (income), net |
— | — | (75) | (127) | ||||||||
Adjusted net income attributable to |
$ | 851 | $ | 433 | $ | 1,186 | $ | 1,911 | ||||
Diluted weighted average number of Common Shares outstanding during the period (millions): |
300.9 | 306.3 | 300.4 | 315.8 | ||||||||
Adjusted diluted earnings per share | $ | 2.83 | $ | 1.41 | $ | 3.95 | $ | 6.05 | ||||
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 fourth quarter and year 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
WEBCAST CONTACT
nancy.hansford@magna.com │ 905.726.7108
OUR BUSINESS (1)
We are a mobility technology company. We have over 158,000 entrepreneurial-minded employees, 342 manufacturing operations and 91 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
(1) 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. The following table identifies the material forward-looking statements contained in this document, together with the material potential risks that we currently believe could cause actual results to differ materially from such forward-looking statements. Readers should also consider all of the risk factors which follow below the table:
Material Forward-Looking Statement |
Material Potential Risks Related to Applicable Forward-Looking Statement |
Total Sales Segment Sales |
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Adjusted EBIT Margin Net Income Attributable to Magna |
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Equity Income |
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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. In addition to the factors in the table above, 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. Additionally, 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 under the “Industry Trends and Risks” heading of our Management’s Discussion and Analysis; and
- set out in our Annual Information Form filed with securities commissions in
Canada , our annual report on Form 40-F filed with theUnited States Securities and Exchange Commission , and subsequent filings.
Readers should also consider discussion of our risk mitigation activities with respect to certain risk factors, which can be also found in our Annual Information Form.
Swamy Kotagiri , Magna’s Chief Executive Officer
“Magna navigated a challenging year from a position of strength attributable to our entrepreneurial spirit, market leading portfolio and healthy balance sheet. From the time COVID-19 first struck, our primary focus was on protecting the health, safety and economic well-being of our employees. Overall, I believe our second-half results demonstrate Magna’s resilience – we are emerging even stronger from the challenges we faced in 2020. Our outlook reflects a product strategy aligned with sustainability objectives, further growth driven by technologies that support the car of the future, margin expansion and continued strong free cash flow generation.” - Swamy Kotagiri , Magna's Chief Executive Officer
Vince Galifi , Magna’s Chief Financial Officer
“In 2020, despite the severe decline in global vehicle production, Magna demonstrated the strength of its operating model. We took steps to conserve cash and reduce costs, while continuing to invest for the future. As vehicle production recovered in the second half of the year, we proved our ability to generate strong cash flow that, together with our balance sheet, position us to capitalize on future opportunities in mobility. Our dividend increase, the eleventh consecutive annual increase, reflects the ongoing confidence that management and our Board have in Magna’s future.” - Vince Galifi , Magna's Chief Financial Officer
Source: Magna International Inc.