AURORA, Ontario, February 25, 2015 /PRNewswire/ --
Magna International Inc. (TSX: MG; NYSE: MGA) today
reported financial results for the fourth quarter and year ended
December 31, 2014.
THREE MONTHS ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
2014 2013 2014 2013
Sales $ 9,396 $ 9,174 $ 36,641 $ 34,835
Adjusted
EBIT(1) $ 712 $ 607 $ 2,632 $ 2,065
Income from
operations
before income
taxes $ 677 $ 514 $ 2,539 $ 1,905
Net income
attributable
to Magna
International
Inc. $ 509 $ 458 $ 1,882 $ 1,561
Diluted
earnings per
share $ 2.44 $ 2.03 $ 8.69 $ 6.76
All results are reported in millions of U.S. dollars, except per share figures, which
are in U.S. dollars.
(1) We believe Adjusted EBIT is the most appropriate measure of operational
profitability or loss of our reporting segments.
Adjusted EBIT represents income from operations before taxes; interest expense, net;
and other expense, net.
THREE MONTHS ENDED DECEMBER 31,
2014
We posted sales of $9.40 billion
for the fourth quarter ended December 31,
2014, an increase of 2% over the fourth quarter of 2013. We
achieved this sales increase in a period when vehicle production
increased 5% in North America and
3% in Europe, both relative to the
fourth quarter of 2013.
Complete vehicle assembly sales decreased 9% to $721 million for the fourth quarter of 2014
compared to $788 million for the
fourth quarter of 2013, while complete vehicle assembly volumes
decreased 10% to approximately 33,000 units.
For the fourth quarter of 2014, adjusted EBIT increased 17% to
$712 million compared to $607 million for the fourth quarter of 2013.
For the fourth quarter of 2014, income from operations before
income taxes was $677 million, net
income attributable to Magna International Inc. was $509 million and diluted earnings per share were
$2.44, increases of $163 million, $51
million and $0.41,
respectively, each compared to the fourth quarter of 2013.
Excluding other expense, net after tax and net loss attributable
to non-controlling interests, and excluding certain tax items
recorded in the fourth quarter of 2013, income from operations
before income taxes, net income attributable to Magna International
Inc. and diluted earnings per share increased $97 million, $57
million and $0.44,
respectively, in the fourth quarter of 2014 compared to the fourth
quarter of 2013.
For the fourth quarter ended December 31,
2014, we generated cash from operations of $881 million before changes in operating assets
and liabilities, and $118 million in
operating assets and liabilities. Total investment activities for
the fourth quarter of 2014 were $716
million, including $670
million in fixed asset additions, $23
million in investments and other assets and $23 million to purchase subsidiaries.
YEAR ENDED DECEMBER 31,
2014
We posted sales of $36.64 billion
for the year ended December 31, 2014,
an increase of 5% over the year ended December 31, 2013. This higher sales level
reflected increases in our North
America, Europe and
Asia production sales as well as
higher tooling, engineering and other sales and complete vehicle
assembly sales, partially offset by lower Rest of World production
sales.
For the year ended December 31,
2014, vehicle production increased 5% to 17.0 million units
in North America and increased 4%
to 20.1 million units in Europe,
each compared to 2013.
Complete vehicle assembly sales increased modestly to
$3.07 billion for the year ended
December 31, 2014 compared to
$3.06 billion for the year ended
December 31, 2013, while complete
vehicle assembly volumes decreased 8% to approximately 135,000
units.
For the year ended December 31,
2014, adjusted EBIT increased 27% to $2.63 billion compared to $2.07 billion for the year ended December 31, 2013.
For the year ended December 31,
2014, income from operations before income taxes was
$2.54 billion, net income
attributable to Magna International Inc. was $1.88 billion and diluted earnings per share were
$8.69, increases of $634 million, $321
million and $1.93,
respectively, each compared to 2013.
Excluding other expense, net after tax and net loss attributable
to non-controlling interests and excluding certain income tax items
recorded in 2014 and 2013, income from operations before income
taxes, net income attributable to Magna International Inc. and
diluted earnings per share increased $554
million, $356 million and
$2.10, respectively, in 2014 compared
to 2013.
For the year ended December 31,
2014, we generated cash from operations before changes in
operating assets and liabilities of $3.04
billion, and used $245 million
in operating assets and liabilities. Total investment activities
for 2014 were $1.78 billion,
including $1.59 billion in fixed
asset additions, a $175 million
increase in investments and other assets and $23 million to purchase subsidiaries.
Don Walker, Magna's Chief
Executive Officer stated: "We are pleased with last year's strong
financial performance, which was the direct result of improved
operating earnings in every reporting segment compared to 2013.
While the recent strengthening of the U.S. dollar has impacted our
reported results, we remain optimistic about Magna's future and
continue to invest heavily in capital and innovation to support our
future growth in North America,
Europe and Asia. This growth reinforces the trust our
customers place in Magna to be one of their key supplier partners
as they expand around the world."
A more detailed discussion of our consolidated financial results
for the fourth quarter and year ended December 31, 2014 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.
STOCK SPLIT BY DIVIDEND AND DUE BILL TRADING
Our Board of Directors has approved a two-for-one stock split of
the Company's outstanding Common Shares. The two-for-one stock
split will be implemented by way of a stock dividend. Subject to
regulatory approval, shareholders will receive one additional
Common Share of the Company for each Common Share held. The stock
dividend will be payable on March 25,
2015, to shareholders of record at the close of business on
March 11, 2015.
The Company's Common Shares will commence trading on a "due
bill" basis, at the opening of business on Monday, March 9, 2015 until Wednesday, March 25, 2015, inclusively.
Accordingly, ex-dividend (post-split) trading in the Common Shares
will commence on the Toronto Stock Exchange ("TSX") at the opening
of business on Thursday, March 26,
2015.
The TSX has been advised that trading in the Common Shares on
the New York Stock Exchange ("NYSE") from March 9, 2015 until March
25, 2015, inclusively, will also be on a "due bill" basis
and that ex-distribution (post-split) trading in the Common Shares
will commence on the NYSE on March 26,
2015.
The Company is ascribing no monetary value to the stock
dividend. All equity-based compensation plans or arrangements and
our normal course issuer bid will be adjusted to reflect the stock
split. Shareholders should retain their existing share certificates
and not return their share certificates to the Company or its
transfer agent.
INCREASED QUARTERLY CASH DIVIDEND
Our Board of Directors also declared a quarterly dividend with
respect to our outstanding Common Shares for the quarter ended
December 31, 2014. The Board
increased the dividend by 16% to $0.44 per share ($0.22 per share after giving effect to the
two-for-one stock split referred to above). This dividend is
payable on March 27, 2015 to
shareholders of record on March 13,
2015.
Vince Galifi, Magna's Chief
Financial Officer, commented: "Our quarterly dividend of
$0.44, an increase of 16%, represents
a record dividend rate for Magna. Our ongoing actions to utilize
our balance sheet to both grow our business and return capital to
shareholders reflect not only our significant cash flow generation
but the confidence our Board has in Magna's future."
UPDATED 2015 OUTLOOK
Light Vehicle Production (Units)
North America 17.4 million
Europe 20.4 million
Production Sales
North America $17.4 billion - $18.0 billion
Europe $8.3 billion - $8.7 billion
Asia $1.9 billion - $2.1 billion
Rest of World $0.6 billion - $0.7 billion
Total Production Sales $28.2 billion - $29.5 billion
Complete Vehicle Assembly Sales $2.2 billion - $2.5 billion
Total Sales $33.1 billion - $34.8 billion
Operating Margin* Low to mid 7% range
Tax Rate* 25% - 26%
Capital Spending $1.4 billion - $1.6 billion
* Excluding other expense (income), net
In this outlook, in addition to 2015 light vehicle production,
we have assumed no material 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.
ABOUT MAGNA
We are a leading global automotive supplier with 313
manufacturing operations and 84 product development, engineering
and sales centres in 28 countries. We have approximately 131,000
employees focused on delivering superior value to our customers
through innovative products, processes and World Class
Manufacturing. Our product capabilities include producing body,
chassis, interior, exterior, seating, powertrain, electronic,
vision, closure and roof systems and modules, as well as complete
vehicle engineering and contract manufacturing. 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.
We will hold a conference call for interested analysts and shareholders to discuss our
fourth quarter and year end 2014 results on Wednesday, February 25, 2015 at 8:00 a.m.
EST. The conference call will be chaired by Donald J. Walker, Chief Executive Officer.
The number to use for this call is 1-800-658-7107. The number for overseas callers is
1-416-981-9095. Please call in at least 10 minutes prior to the call. We will also webcast the conference call at http://www.magna.com
. The slide presentation
accompanying the conference call will be available on our website Monday morning prior
to the call.
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, Europe and
China; 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 2015; complete vehicle assembly
sales; consolidated operating margin, effective income tax rate;
and fixed asset expenditures. The forward-looking information in
this document 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 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. Any such 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. 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 impact of economic or political
conditions on consumer confidence, consumer demand for vehicles and
vehicle production; fluctuations in relative currency values;
restructuring, downsizing and/or other significant non-recurring
costs; continued underperformance of one or more of our operating
Divisions; ongoing pricing pressures, including our ability to
offset price concessions demanded by our customers; our ability to
successfully launch material new or takeover business; shifts in
market share away from our top customers; inability to grow our
business with OEMs; shifts in market shares among vehicles or
vehicle segments, or shifts away from vehicles on which we have
significant content; risks of conducting business in foreign
markets, including China,
India, Russia, Eastern
Europe, Thailand,
Brazil, Argentina and other non-traditional markets
for us; 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);
our ability to successfully compete with other automotive
suppliers; reduction in outsourcing by our customers or the loss of
a material production or assembly program; the termination or
non-renewal by our customers of any material production purchase
order; our ability to consistently develop innovative products or
processes; impairment charges related to goodwill and long-lived
assets; exposure to, and ability to offset, volatile commodities
prices; our ability to successfully identify, complete and
integrate acquisitions or achieve anticipated synergies; our
ability to conduct appropriate due diligence on acquisition
targets; warranty and recall costs; risk of production disruptions
due to natural disasters or other catastrophic events; the security
and reliability of our IT systems; pension liabilities; legal
claims and/or regulatory actions against us, including the ongoing
antitrust investigations being conducted by German and Brazilian
authorities; 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; other potential tax
exposures; changes in credit ratings assigned to us; changes in
laws and governmental regulations; costs associated with compliance
with environmental laws and regulations; liquidity risks as a
result of an unanticipated deterioration of economic conditions;
our ability 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, we caution readers not to place undue reliance on any
forward-looking statements 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. 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 to reflect
subsequent information, events, results or circumstances or
otherwise.
For further information about Magna, please see our website at http://www.magna.com.
Copies of financial data and other publicly filed documents are available through the
internet on the Canadian Securities Administrators' System for Electronic Document
Analysis and Retrieval (SEDAR) which can be accessed at http://www.sedar.com and 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
.
For further information:
Louis Tonelli, Vice-President,
Investor Relations at +1-905-726-7035.
For teleconferencing questions, please contact Nancy Hansford at +1-905-726-7108.
(MG. MGA)