AURORA, Ontario, March 3, 2014 /PRNewswire/ --
Magna International Inc. (TSX: MG; NYSE: MGA) today reported financial results for the fourth quarter and year ended December 31, 2013.
THREE MONTHS ENDED YEAR ENDED DECEMBER 31, DECEMBER 31, 2013 2012 2013 2012 Sales $ 9,174 $ 8,033 $ 34,835 $ 30,837 Adjusted EBIT(1) $ 607 $ 387 $ 2,065 $ 1,658 Income from operations before income taxes $ 514 $ 341 $ 1,905 $ 1,750 Net income attributable to Magna International Inc. $ 458 $ 351 $ 1,561 $ 1,433 Diluted earnings per share $ 2.03 $ 1.49 $ 6.76 $ 6.09 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 statements. Adjusted EBIT represents income from operations before income taxes; interest expense (income), net; and other expense (income), net.
THREE MONTHS ENDED DECEMBER 31, 2013
We posted sales of $9.17 billion for the fourth quarter ended December 31, 2013, an increase of 14% over the fourth quarter of 2012. We achieved this sales increase in a period when vehicle production increased 6% in North America and 5% in Europe, both relative to the fourth quarter of 2012. In the fourth quarter of 2013, our North American, European, and Asian production sales, as well as tooling, engineering and other sales and complete vehicle assembly sales all increased while our Rest of World production sales declined relative to the comparable quarter in 2012.
Complete vehicle assembly sales increased 13% to $788 million for the fourth quarter of 2013 compared to $697 million for the fourth quarter of 2012, while complete vehicle assembly volumes increased 17% to approximately 37,000 units.
For the fourth quarter of 2013, adjusted EBIT increased 57% to $607 million compared to $387 million for the fourth quarter of 2012.
For the fourth quarter of 2013, income from operations before income taxes was $514 million, net income attributable to Magna International Inc. was $458 million and diluted earnings per share were $2.03, increases of $173 million, $107 million and $0.54, respectively, each compared to the fourth quarter of 2012.
Excluding other expense (income), net after tax and net loss attributable to non-controlling interests, the income tax valuation allowance releases and the impact of the elimination of the Mexican flat tax recorded in the fourth quarters of 2013 and 2012, income from operations before income taxes, net income attributable to Magna International Inc. and diluted earnings per share increased $218 million, $166 million and $0.79, respectively, each compared to the fourth quarter of 2012.
For the fourth quarter ended December 31, 2013, we generated cash from operations of $809 million before changes in non-cash operating assets and liabilities, and $451 million in non-cash operating assets and liabilities. Total investment activities for the fourth quarter of 2013 were $506 million, including $463 million in fixed asset additions, $34 million in investments and other assets and $9 million to purchase subsidiaries.
YEAR ENDED DECEMBER 31, 2013
We posted sales of $34.84 billion for the year ended December 31, 2013, an increase of 13% over the year ended December 31, 2012. This higher sales level reflected increases in our North American, European, Asian and Rest of World production sales as well as higher tooling, engineering and other sales, and complete vehicle assembly sales.
For the year ended December 31, 2013, vehicle production increased 5% to 16.2 million units in North America and decreased 1% to 19.3 million units in Europe, each compared to 2012.
Complete vehicle assembly sales increased 20% to $3.06 billion for the year ended December 31, 2013 compared to $2.56 billion for the year ended December 31, 2012, while complete vehicle assembly volumes increased 19% to approximately 147,000 units.
For the year ended December 31, 2013, adjusted EBIT increased 25% to $2.07 billion compared to $1.66 billion for the year ended December 31, 2012.
For the year ended December 31, 2013, income from operations before income taxes was $1.91 billion, net income attributable to Magna International Inc. was $1.56 billion and diluted earnings per share were $6.76, increases of $155 million, $128 million and $0.67, respectively, each compared to 2012.
Excluding other expense (income), net after tax and net loss attributable to non-controlling interests, the income tax valuation allowance releases and the impact of the elimination of the Mexican flat tax recorded in 2013 and 2012, income from operations before income taxes, net income attributable to Magna International Inc. and diluted earnings per share increased $407 million, $351 million and $1.62, respectively, each compared to 2012.
For the year ended December 31, 2013, we generated cash from operations before changes in non-cash operating assets and liabilities of $2.69 billion, and invested $127 million in non-cash operating assets and liabilities. Total investment activities for the year of 2013 were $1.37 billion, including $1.17 billion in fixed asset additions, a $192 million increase in investments and other assets and $9 million to purchase subsidiaries.
Don Walker, Magna's Chief Executive Officer commented: "2013 was another strong year for Magna. We maintained our solid performance in North America, and made further progress in improving profitability in Europe. Recent investments in Asia have begun to yield returns, even while we continue to invest in the region. Lastly, our business in South America, while still challenging, is poised to generate some improvement going forward."
A more detailed discussion of our consolidated financial results for the fourth quarter and year ended December 31, 2013 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.
Friday, our Board of Directors declared a quarterly dividend of $0.38 per share with respect to our outstanding Common Shares for the quarter ended December 31, 2013. This dividend is payable on March 28, 2014 to shareholders of record on March 14, 2014.
Vince Galifi, Magna's Chief Financial Officer, stated: "Our quarterly dividend per share of $0.38, an increase of 19%, is a new record for us. In addition, we recently stated our intention to accelerate the utilization of our balance sheet to further invest in our business and return capital to shareholders over the next two years. These actions reflect our ongoing strong results and the confidence our Board has in Magna's future."
UPDATED 2014 OUTLOOK Light Vehicle Production (Units) North America 16.7 million Europe 19.3 million Production Sales North America $16.6 billion - $17.2 billion Europe $9.5 billion - $9.9 billion Asia $1.6 billion - $1.8 billion Rest of World $0.7 billion - $0.8 billion Total Production Sales $28.4 billion - $29.7 billion Complete Vehicle Assembly Sales $2.8 billion - $3.1 billion Total Sales $33.8 billion - $35.5 billion Operating Margin* Mid 6% range Tax Rate* Approximately 24.5% Capital Spending Approximately $1.4 billion * Excluding other expense (income), net
In this 2014 outlook, in addition to 2014 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.
We are a leading global automotive supplier with 316 manufacturing operations and 84 product development, engineering and sales centres in 29 countries. We have over 125,000 employees focused on delivering superior value to our customers through innovative 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 2013 results on Monday, March 3, 2014 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 1-800-381-7839. The number for overseas callers is 1-212-231-2901. 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.
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 and Western Europe; 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 2014; complete vehicle assembly sales; consolidated operating margin, effective income tax rate; fixed asset expenditures; implementation of action plans and operating results improvement in our underperforming operations; expansion of our business in high growth regions, including Asia; and implementation of our balance sheet strategy, including through returns of capital to our shareholders. 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 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; continuing economic uncertainty in various geographic regions, including Western Europe; inability to sustain or grow our business with OEMs; restructuring actions by OEMs, including plant closures; 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; 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, Russia, India, Argentina and Brazil and other non-traditional markets for us; a prolonged disruption in the supply of components to us from our suppliers; scheduled shutdowns of our customers' production facilities (typically in the third and fourth quarters of each calendar year); 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; our inability 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; fluctuations in relative currency values; 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; pension liabilities; legal claims and/or regulatory actions against us, including the ongoing antitrust investigation being conducted by the German Federal Cartel Office; 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; inability to achieve future investment returns that equal or exceed past returns; 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; 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 905-726-7035.
For teleconferencing questions, please contact Nancy Hansford at 905-726-7108.
SOURCE Magna International Inc.