Mr. Don Walker reports

MAGNA ANNOUNCES THIRD QUARTER RESULTS

Magna International Inc. has released its financial results for the third quarter ended Sept. 30, 2017.

                                      Three months ended Sept. 30,       Nine months ended Sept. 30,
                                             2017             2016             2017             2016

Sales                                      $9,499           $8,849          $28,555          $27,192
Income from operations before
income taxes                                  670              692            2,238            2,134
Net income attributable to
Magna International                           503              503            1,650            1,553
Adjusted EBIT                                 692              715            2,299            2,202
Diluted earnings per share                   1.36             1.29             4.37             3.92
                                                                                                          
All results are reported in millions of U.S. dollars, except per-share figures, 
which are in U.S. dollars.
 

"I'm pleased with our overall performance as we posted record third quarter results. Magna remains well positioned to benefit from the shift toward electrification, autonomy and vehicle light-weighting. In China, our recently announced joint venture with HASCO was awarded a highly integrated e-drive system for a German OEM [original equipment manufacturer]. At the Frankfurt Auto Show, we unveiled our MAX4 autonomous driving platform, which enables up to Level 4 autonomous driving capabilities. Our product breadth combined with complete vehicle design and engineering capabilities uniquely positions Magna to be a supplier of solutions," said Don Walker, Magna's chief executive officer.

Three months ended Sept. 30, 2017

Magna posted third quarter record sales of $9.5-billion for the quarter ended Sept. 30, 2017, an increase of 7 per cent over the third quarter of 2016. The sales increase was achieved in a period in which European light vehicle production increased 8 per cent and North American light vehicle production decreased 7 per cent, each relative to the third quarter of 2016. Magna's complete vehicle assembly sales increased 55 per cent in the third quarter of 2017 largely reflecting the launch of the BMW 5-Series at Magna's assembly facility in Graz, Austria, following the end of production of the MINI Countryman and Paceman in 2016.

During the third quarter of 2017, income from operations before income taxes was $670-million, compared with $692-million in the third quarter of 2016. Net income attributable to Magna International was $503-million for the third quarters of both 2017 and 2016. Diluted earnings per share were $1.36 in the third quarter of 2017 compared with $1.29 in the third quarter of 2016, reflecting the favourable impact of a reduced share count.

During the third quarter of 2017, adjusted EBIT (earnings before interest and tax) decreased 3 per cent to $692-million, compared with $715-million for the third quarter of 2016. Magna's Asia and rest of world segments posted higher adjusted EBIT and adjusted EBIT percentage of sales, compared with the third quarter of 2016.

During the third quarter ended Sept. 30, 2017, Magna generated cash from operations of $859-million before changes in operating assets and liabilities, and $22-million in operating assets and liabilities. Investment activities for the third quarter of 2017 were $537-million, including $379-million in fixed asset additions and $158-million in investments, other assets and intangible assets.

Nine months ended Sept. 30, 2017

Magna posted sales of $28.56-billion for the nine months ended Sept. 30, 2017, an increase of 5 per cent from the nine months ended Sept. 30, 2016. North American light vehicle production decreased 3 per cent and European light vehicle production increased 3 per cent in the first nine months of 2017 compared with the first nine months of 2016.

During the nine months ended Sept. 30, 2017, income from operations before income taxes was $2.24-billion, net income attributable to Magna International was $1.65-billion and diluted earnings per share were $4.37, increases of $104-million, $97-million and 45 cents, respectively, each compared with the first nine months of 2016.

During the nine months ended Sept. 30, 2017, adjusted EBIT increased 4 per cent to $2.30-billion, compared with $2.20-billion for the nine months ended Sept. 30, 2016. Magna's Asia and rest of world segments each posted higher adjusted EBIT and adjusted EBIT percentage of sales, compared with the first nine months of 2016.

During the nine months ended Sept. 30, 2017, Magna generated cash from operations before changes in operating assets and liabilities of $2.68-billion, and invested $796-million in operating assets and liabilities. Investment activities for the first nine months of 2017 were $1.49-billion, including $1.11-billion in fixed asset additions and $384-million in investments, other assets and intangible assets.

Return of capital to shareholders

During the three months ended Sept. 30, 2017, Magna repurchased 8.7 million shares for $422-million. In addition, Magna paid dividends of $99-million in the third quarter of 2017.

Magna's board of directors declared a quarterly dividend of 27.5 cents with respect to its outstanding common shares for the quarter ended Sept. 30, 2017. This dividend is payable on Dec. 8, 2017, to shareholders of record on Nov. 24, 2017.

"We continue to return capital to our shareholders while maintaining a strong balance sheet. With the expiration of our current normal course issuer bid (NCIB), we have returned over $900-million through share repurchases and more than $300-million in dividends as of the end of the third quarter. Since 2012, we have returned approximately $6.7-billion to our shareholders, $5.1-billion through the repurchase of more than 20 per cent of our outstanding shares and $1.6-billion in dividends. Our new NCIB provides flexibility to continue repurchasing up to 10 per cent of our shares over the next year," said Vince Galifi, Magna's chief financial officer.

Other matters

Subject to the approval by the Toronto Stock Exchange and the New York Stock Exchange, Magna's board of directors approved a new normal course issuer bid (NCIB) to purchase up to 35.8 million of its common shares, representing approximately 10 per cent of its public float of common shares. This NCIB is expected to commence on or about Nov. 15, 2017, and will terminate one year later.

                            UPDATED 2017 OUTLOOK

Light vehicle production (units)
North America                                                 17.2 million
Europe                                                        22.2 million
Production sales
North America                               $19.2-billion -- $19.6-billion
Europe                                       $9.9-billion -- $10.2-billion
Asia                                          $2.3-billion -- $2.4-billion
Rest of world                                 $500-million -- $600-million
Total production sales                      $31.9-billion -- $32.8-billion
Complete vehicle assembly sales              $ 3.0-billion -- $3.2-billion
Total sales                                 $38.3-billion -- $39.5-billion
Adjusted EBIT margin                          8.0 per cent -- 8.1 per cent
Interest expense, net                            approximately $70-million
Income tax rate                                  approximately 25 per cent
Capital spending                                approximately $1.9-billion

In this 2017 outlook, the company has assumed:

• 2017 light vehicle production volumes;
• No material unannounced acquisitions or divestitures;
• Foreign exchange rates for the most common currencies in which the company conducts business relative to its U.S.-dollar reporting currency will approximate current rates.

The company will hold a conference call for interested analysts and shareholders to discuss its third quarter ended Sept. 30, 2017, results on Thursday, Nov. 9, 2017, at 8 a.m. Eastern Standard Time. The conference call will be chaired by Don Walker, chief executive officer. The number to use for this call from North America is 1-877-256-5083. International callers should use 1-303-223-4388. Please call in at least 10 minutes prior to the call start time. The company will also webcast the conference call at its website. The slide presentation accompanying the conference call as well as the company's financial review summary will be available on the company's website on the morning of the call.

About Magna International Inc.

The company is a leading global automotive supplier with 327 manufacturing operations and 100 product development, engineering and sales centres in 29 countries. Magna has over 161,000 employees focused on delivering superior value to the company's customers through innovative products and processes and world-class manufacturing.

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