Jan 11, 2012
AURORA, ON, Jan. 11, 2012/PRNewswire/ - Magna International Inc. (TSX: MG) (NYSE: MGA) today announced its financial outlook for 2012. All amounts are in U.S. dollars.
Don Walker, Magna's Chief Executive Officer commented: "Our outlook demonstrates the traction we are gaining in executing our plan to expand our business outside of our traditional markets. We are taking advantage of the growth opportunities in new markets and positioning Magna to further serve our customers on global platforms. The combination of our strong position in North America, action plans that are improving results in Europe, and our considerable growth in other regions leaves us confident about Magna's future."
For the full year 2012, we expect consolidated total sales to be between $27.8 billion and $29.3 billion, and expect consolidated production sales to be between $23.6 billion and $24.7 billion, based on full year 2012 light vehicle production volumes of approximately 13.6 million units in North Americaand approximately 13.0 million units in Western Europe. We expect full year 2012 production sales to be between $13.2 billion and $13.7 billionin North America, between $8.4 billion and $8.7 billionin Europeand between $2.0 billion and $2.3 billionin Rest of World. We expect full year 2012 complete vehicle assembly sales to be between $2.3 billion and $2.6 billion. We expect our 2012 operating margins to be approximately 5% and our effective income tax rate to be approximately 26%, in both cases, excluding other expense/income (unusual items).
In addition, we expect that our full year 2012 spending for fixed assets will be between $1.3 billion and $1.5 billion. This amount reflects investment to expand in a number of high-growth markets as well as continuing investment to support new and replacement business in our traditional markets.
Finally, in addition to our 2012 sales outlook above, we expect a net increase in total production sales over the two-year period from 2012 to 2014 of approximately $3.2 billion, based on assumed full year 2014 light vehicle production volumes of approximately 15.4 million units in North Americaand approximately 14.2 million units in Western Europe. We expect the net increase in total production sales to be split approximately as follows by segment: 50% in North America, 15% in Europeand 35% in Rest of World.
In this outlook 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 year end 2011 rates.
ABOUT MAGNA
We are the most diversified automotive supplier in the
world. We design, develop and manufacture automotive
systems, assemblies, modules and components, and engineer
and assemble complete vehicles, primarily for sale to
original equipment manufacturers 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.
Magna has over 107,000 employees in 286 manufacturing operations and 88 product development, engineering and sales centres in 25 countries.
FORWARD LOOKING STATEMENTS
This press release may contain statements that, to the
extent that they are not recitations of historical fact,
constitute "forward-looking statements" within
the meaning of applicable securities legislation,
including, but not limited to, Magna's: forecasts of
light vehicle production in North Americaand
Western Europe; expected consolidated sales,
based on such light vehicle production volumes;
production sales in its North America,
Europeand Rest of World segments; complete
vehicle assembly sales; consolidated operating margins;
effective income tax rate; fixed asset expenditures;
implementation of action plans and operating results
improvement in Europe; and future expansion
in high-growth regions . 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. 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 to 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. These risks, assumptions and
uncertainties include, without limitation, the impact of:
the potential for a slower than anticipated economic
growth or a deterioration of economic conditions;
potential disruptions in the capital and credit markets;
uncertainty with respect to the financial condition of a
number of governments, particularly in
Europe; production volume levels; the impact
of the insolvency or bankruptcy of a critical supplier;
the highly competitive nature of the automotive parts
supply business; 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; the
inability of sub-suppliers to timely accommodate demand
for their parts; a shift away from technologies in which
we are investing; restructuring, downsizing and/or other
significant non-recurring costs; impairment charges
related to goodwill, long-lived assets and deferred tax
assets; our ability to diversify our sales; shifts in
market shares among vehicles or vehicle segments, or
shifts away from vehicles on which we have significant
content; our ability to shift our manufacturing footprint
to take advantage of opportunities in growing markets;
risks of conducting business in foreign countries,
including China, India,
Brazil, Russiaand other growing
markets; exposure to elevated commodities prices;
fluctuations in relative currency values; our ability to
successfully identify, complete and integrate
acquisitions; pricing pressures, including our ability to
offset price concessions demanded by our customers;
warranty and recall costs; our ability to compete
successfully in non-automotive businesses in which we
pursue opportunities; 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; 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; the potential
bankruptcy of a major automotive customer; 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
Canadaand 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.
SOURCE Magna International Inc.
Vince Galifi, Executive Vice-President and Chief Financial Officer at 905-726-7100 or Louis Tonelli, Vice-President, Investor Relations at 905-726-7035.
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