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Magna announces First Quarter results

Magna International Inc. (TSX: MG; NYSE: MGA) today reported financial results for the first quarter ended March 31, 2015.   THREE MONTHS ENDED March 31, 2015 March 31, 2014 Sales $  8,330 $  8,961 Adjusted EBIT(1) $ 642 $ 605 Income from operations before income taxes $  631 $  581 Net income attributable to Magna International Inc.  $  465 $ … Continued

Magna International Inc. (TSX: MG; NYSE: MGA) today reported financial results for the first quarter ended March 31, 2015.

  THREE MONTHS ENDED
March 31, 2015 March 31, 2014
Sales $  8,330 $  8,961
Adjusted EBIT(1) $ 642 $ 605
Income from operations before income taxes $  631 $  581
Net income attributable to Magna International Inc.  $  465 $  393
Diluted earnings per share $  1.12 $  0.88
All results are reported in millions of U.S. dollars, except per share figures, which are in U.S. dollars.

(1)  Adjusted EBIT is the measure of segment profit or loss as reported in the Company’s attached unaudited
interim consolidated financial statement. Adjusted EBIT represents income from operations before income taxes;
interest expense, net; and other expense, net.

THREE MONTHS ENDED MARCH 31, 2015

We posted sales of $8.33 billion for the first quarter ended March 31, 2015, a decrease of $631 million or 7% from the first quarter of 2014.  The weakening of certain currencies against our U.S. dollar reporting currency, in particular the euro and Canadian dollar, had a significant negative impact on our reported sales for the first quarter of 2015.  Foreign currency translation reduced our sales by approximately $880 million, as compared to the first quarter of 2014.  Excluding the impact of foreign currency translation, our sales increased 3% in the first quarter of 2015, compared to the first quarter of 2014.  North American and European light vehicle production each declined marginally in the first quarter of 2015, compared to the first quarter of 2014.

Complete vehicle assembly sales decreased 28% to $584 million for the first quarter of 2015 compared to $813 million for the first quarter of 2014, of which foreign currency translation accounted for $127 million of the decrease. Complete vehicle assembly volumes decreased 23% to approximately 27,000 units in the first quarter of 2015 compared to the first quarter of 2014.

During the first quarter of 2015, income from operations before income taxes was $631 million, net income attributable to Magna International Inc. was $465 million and diluted earnings per share were $1.12, increases of $50 million, $72 million and $0.24, respectively, each compared to the first quarter of 2014.

Excluding other expense, after tax and the impact of the Austrian tax reform, each in the first quarter of 2014, income from operations before income taxes, net income attributable to Magna International Inc. and diluted earnings per share for the first quarter of 2015 increased $28 million, $20 million and $0.12 respectively, each compared to the first quarter of 2014.

During the first quarter ended March 31, 2015, we generated cash from operations of $652 million before changes in non-cash operating assets and liabilities, and invested $358 million in operating assets and liabilities. Total investment activities for the first quarter of 2015 were $323 million, including $280 million in fixed asset additions, $42 million in investments and other assets and $1 million to purchase subsidiaries.

Don Walker, Magna’s Chief Executive Officer commented: “We posted improved earnings and return on funds employed, as well as excellent cash flow generation.  While the strengthened U.S. dollar negatively impacted our reported sales and earnings, our underlying operations performed well in the quarter.

We have been refining our product portfolio to focus on certain key areas of the vehicle, reflected in our agreements this year to sell substantially all of our interiors operations, our battery pack business, as well as our sale last year of certain non-core composites operations.  At the same time, we have been taking steps to expand in other areas such as metalforming, where we recently announced a joint venture in China.”

A more detailed discussion of our consolidated financial results for the first quarter ended March 31, 2015 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.

DIVIDENDS

Yesterday, our Board of Directors declared a quarterly dividend of $0.22 with respect to our outstanding Common Shares for the quarter ended March 31, 2015. This dividend is payable on June 12, 2015 to shareholders of record on May 29, 2015.

UPDATED 2015 OUTLOOK

Our updated 2015 outlook below excludes full year 2015 financial information for the interiors operations we intend to sell, pursuant to our agreement with Grupo Antolin announced on April 16, 2015.  This will be consistent with disclosure of the business as discontinued operations beginning with the reporting of our financial results for the second quarter ended June 30, 2015.

Light Vehicle Production (Units)
North America
Europe
17.4 million
20.2 million
Production Sales
North America
Europe
Asia
Rest of World
$17.2 billion – $17.8 billion
$6.9 billion – $7.3 billion
$1.7 billion – $1.9 billion
$0.6 billion – $0.7 billion
      Total Production Sales $26.4 billion – $27.7 billion
Complete Vehicle Assembly Sales $2.1 billion – $2.4 billion
Total Sales $30.8 billion – $32.5 billion
Operating Margin(1) High 7% range
Tax Rate(1) Approximately 26%
Capital Spending $1.3 billion – $1.5 billion
(1)  Excluding other expense, net 

In this 2015 outlook, in addition to 2015 light vehicle production, we have assumed no material acquisitions or divestitures other than the interiors divestiture noted above. 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.

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