Magna Announces First Quarter Results

AURORA, Ontario, May 10, 2012 /PRNewswire/ --

Magna International Inc. (TSX: MG; NYSE: MGA) today reported financial results for the first quarter ended March 31, 2012.

 
                                                            THREE MONTHS ENDED
                                                   March 31, 2012        March 31, 2011

    Sales                                          $        7,666        $        7,189
 
    Income from operations before income taxes     $          439        $          400
 
    Net income attributable to Magna 
    International Inc.                             $          343        $          322
 
    Diluted earnings per share                     $         1.46        $         1.30

    All results are reported in millions of U.S. dollars, except per share figures, which
                                    are in U.S. dollars.

THREE MONTHS ENDED MARCH 31, 2012

We posted sales of $7.7 billion for the first quarter ended March 31, 2012, an increase of 7% from the first quarter of 2011. We achieved this sales increase in a period when vehicle production increased 17% in North America and decreased 7% in Western Europe, each relative to the first quarter of 2011.  Our North American, European and Rest of World production sales all increased in the first quarter of 2012 relative to the comparable quarter in 2011.

Complete vehicle assembly sales decreased 11% to $599 million for the first quarter of 2012 compared to $674 million for the first quarter of 2011, while complete vehicle assembly volumes decreased 10% to approximately 30,000 units.

During the first quarter of 2012, income from operations before income taxes was $439 million, net income attributable to Magna International Inc. was $343 million and diluted earnings per share were $1.46, increases of $39 million, $21 million and $0.16, respectively, each compared to the first quarter of 2011.

During the first quarter ended March 31, 2012, we generated cash from operations of $531 million before changes in non-cash operating assets and liabilities, and invested $302 million in non-cash operating assets and liabilities. Total investment activities for the first quarter of 2012 were $326 million, including $250 million in fixed asset additions, $42 million to purchase subsidiaries, and $34 million in investments and other assets.

A more detailed discussion of our consolidated financial results for the first quarter ended March 31, 2012 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 $0.275 with respect to our outstanding Common Shares for the quarter ended March 31, 2012. This dividend is payable on June 15, 2012 to shareholders of record on May 31, 2012.

UPDATED 2012 OUTLOOK

 
    Light Vehicle Production (Units)

    North America                                         14.4 million
    Western Europe                                        12.7 million

    Production Sales
      North America                              $14.1 - $14.6 billion
      Europe                                       $8.6 - $8.9 billion
      Rest of World                                $1.8 - $2.1 billion
      Total Production Sales                     $24.5 - $25.6 billion

    Complete Vehicle Assembly Sales                $2.4 - $2.7 billion

    Total Sales                                  $29.0 - $30.5 billion

    Operating Margin*                                     Low 5% range

    Income Tax Rate*                                 Approximately 25%

    Capital Spending                        Approximately $1.5 billion

    * Excluding other expense, net (unusual items)

In this 2012 outlook, in addition to 2012 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 the most diversified global automotive supplier. We design, develop and manufacture technologically advanced automotive systems, assemblies, modules and components, and engineer and assemble complete vehicles, primarily for sale to original equipment manufacturers ("OEMs") of cars and light trucks. Our capabilities include the design, engineering, testing and manufacture of automotive interior systems; seating systems; closure systems; body and chassis systems; vision systems; electronic systems; exterior systems; powertrain systems; roof systems; hybrid and electric vehicles/systems; as well as complete vehicle engineering and assembly.

We have over 111,000 employees in 294 manufacturing operations and 87 product development, engineering and sales centres in 26 countries.

We will hold a conference call for interested analysts and shareholders to discuss our first quarter results on Thursday, May 10, 2012 at 2:00 p.m. EDT. The conference call will be chaired by Don Walker, Chief Executive Officer. The number to use for this call is 1-800-755-1805. The number for overseas callers is 1-212-231-2912. 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 Thursday afternoon prior to the call.

FORWARD-LOOKING STATEMENTS

The previous discussion contains statements that constitute "forward-looking statements" within the meaning of applicable securities legislation, including, but not limited to, statements relating to: Magna's expected production sales, based on expected light vehicle production in North America and Western Europe; Magna's expected production sales in the North America, Europe and Rest of World segments; total sales; complete vehicle assembly sales; consolidated operating margin; effective income tax rate; and fixed asset expenditures. The forward-looking information in this MD&A 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 potential for a deterioration of economic conditions or an extended period of economic uncertainty; declines in consumer confidence and the impact on production volume levels; risks arising from uncertain economic conditions in Europe; restructuring, downsizing and/or other significant non-recurring costs; continued underperformance of one or more of our operating divisions; our ability to successfully launch material new or takeover business; liquidity risks; risks arising due to the failure of a major financial institution; bankruptcy or insolvency of a major customer or supplier; 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; our ability to successfully compete with other automotive suppliers; a 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; a shift away from technologies in which we are investing; impairment charges related to goodwill, long-lived assets and deferred tax assets; shifts in market share away from our top customers; 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, Brazil, Russia and other non-traditional markets for us; exposure to, and ability to offset, volatile commodities prices; fluctuations in relative currency values; our ability to successfully identify, complete and integrate acquisitions or achieve anticipated synergies; ongoing pricing pressures, including our ability to offset price concessions demanded by our customers; warranty and recall costs; our ability to understand and compete successfully in non-automotive businesses in which we pursue opportunities; risks related to natural disasters and potential production disruptions; factors that could cause an increase in our pension funding obligations; 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; legal claims and/or regulatory actions against us; the unpredictability of, and fluctuation in, the trading price of our Common Shares; work stoppages and labour relations disputes; changes in credit ratings assigned to us; changes in laws and governmental regulations; costs associated with compliance with environmental laws and regulations; our non-controlling interest in Magna E-Car Systems; our ability to recover our initial or any potential subsequent investment(s) in Magna E-Car Systems; risks related to the electric vehicle industry itself; 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.comand 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, please contact Louis Tonelli, Vice-President, Investor Relations at +1-905-726-7035.

For teleconferencing questions, please contact Karin Kaminski at +1-905-726-7103.