- Sales of $10.3 billion decreased in-line with the 4% reduction in global light vehicle production
- Diluted earnings per share were $1.68, up $0.31, largely reflecting recognition of Fisker deferred revenue
- Adjusted diluted earnings per share were $1.28, down $0.18, including $0.10 due to a higher income tax rate
- Normal Course Issuer Bid to purchase up to 10% of our public float of Common Shares, with purchases expected to commence in the fourth quarter of 2024
Please click HERE for full third quarter MD&A and Financial Statements.
| THREE MONTHS ENDED SEPTEMBER 30, | NINE MONTHS ENDED SEPTEMBER 30, | |||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||
| Reported | ||||||||||||
| Sales | $ | 10,280 | $ | 10,688 | $ | 32,208 | $ | 32,343 | ||||
| Income from operations before income taxes | $ | 700 | $ | 538 | $ | 1,161 | $ | 1,296 | ||||
| Net income attributable to Magna International Inc. | $ | 484 | $ | 394 | $ | 806 | $ | 942 | ||||
| Diluted earnings per share | $ | 1.68 | $ | 1.37 | $ | 2.81 | $ | 3.29 | ||||
| Non-GAAP Financial Measures(1) | ||||||||||||
| Adjusted EBIT | $ | 594 | $ | 615 | $ | 1,640 | $ | 1,680 | ||||
| Adjusted diluted earnings per share | $ | 1.28 | $ | 1.46 | $ | 3.72 | $ | 4.15 | ||||
| All results are reported in millions of U.S. dollars, except per share figures, which are in U.S. dollars | ||||||||||||
| (1) Adjusted EBIT and Adjusted diluted earnings per share are Non-GAAP financial measures that have no standardized meaning under U.S. GAAP, and as a result may not be comparable to the calculation of similar measures by other companies. Further information and a reconciliation of these Non-GAAP financial measures is included in the back of this press release. | ||||||||||||
| "We continue to mitigate industry headwinds including lower production volumes in each of our core regions. Our ongoing initiatives and results to date reinforce our conviction in our free cashflow outlook this year and beyond. As we continuously seek to optimize value creation, we are resuming share repurchases in the fourth quarter - ahead of our prior plan."
- Swamy Kotagiri, Magna's Chief Executive Officer |
THREE MONTHS ENDED SEPTEMBER 30, 2024
We posted sales of $10.3 billion for the third quarter of 2024, a decrease of 4% from the third quarter of 2023. The lower sales largely reflects a 4% decrease in global light vehicle production, including 6% lower production in each of North America and China and a 2% decline in Europe. In addition, sales were negatively impacted by the end of production of certain programs, and divestitures, net of acquisitions, partially offset by the launch of new programs and customer price increases to recover certain higher production input costs.
Adjusted EBIT decreased to $594 million in the third quarter of 2024 compared to $615 million in the third quarter of 2023. This mainly reflects reduced earnings on lower sales, higher production input costs net of customer recoveries, and lower equity income. These were partially offset by higher net favourable commercial items, continued productivity and efficiency improvements, including lower costs at certain underperforming facilities, lower net engineering costs, including spending related to our electrification and active safety businesses and the negative impact of the UAW labour strike during the third quarter of 2023.
Income from operations before income taxes increased to $700 million for the third quarter of 2024 compared to $538 million in the third quarter of 2023, which includes Other (income) expense, net(2) items and Amortization of acquired intangibles totaling ($160) million and $28 million in the third quarters of 2024 and 2023, respectively. The most significant item in either period was the positive impact of recognizing $196 million of Fisker deferred revenue as the associated agreements were cancelled in the third quarter of 2024. Excluding Other (income) expense, net and Amortization of acquired intangibles from both periods, income from operations before income taxes decreased $26 million in the third quarter of 2024 compared to the third quarter of 2023, largely reflecting the decrease in Adjusted EBIT.
Net income attributable to Magna International Inc. was $484 million for the third quarter of 2024 compared to $394 million in the third quarter of 2023, which includes Other (income) expense, net(2), after tax and Amortization of acquired intangibles totaling $(115) million and $25 million in the third quarters of 2024 and 2023, respectively. Excluding Other (income) expense, net, after tax and Amortization of acquired intangibles from both periods, net income attributable to Magna International Inc. decreased $50 million in the third quarter of 2024 compared to the third quarter of 2023.
Diluted earnings per share were $1.68 in the third quarter of 2024, compared to $1.37 in the comparable period. Adjusted diluted earnings per share were $1.28, down $0.18 from $1.46 for the third quarter of 2023, including $0.10 due to a higher income tax rate.
In the third quarter of 2024, we generated cash from operations before changes in operating assets and liabilities of $785 million and used $58 million in operating assets and liabilities. Investment activities for the third quarter of 2024 included $476 million in fixed asset additions, $115 million in investments, other assets and intangible assets and $1 million in private equity investments.
(2) Other (income) expense, net is comprised of Fisker Inc. ["Fisker”] related impacts (restructuring and impairment of assembly and production assets, the impairment of Fisker warrants, and the recognition of previously deferred revenue), revaluations of certain public company warrants and equity investments, restructuring activities and gain on business combination, during the three and nine months ended September 30, 2023 & 2024. A reconciliation of these Non-GAAP financial measures is included in the back of this press release.
NINE MONTHS ENDED SEPTEMBER 30, 2024
We posted sales of $32.2 billion for the nine months ended September 30, 2024, compared to $32.3 billion for the nine months ended September 30, 2023, a period in which global light vehicle production decreased 1%.
Adjusted EBIT was $1.64 billion for the nine months ended September 30, 2024 compared to $1.68 billion for the nine months ended September 30, 2023. This reflects reduced earnings on lower sales, higher production input costs net of customer recoveries, reduced earnings on lower assembly volumes, acquisitions, net of divestitures, during or subsequent to the first nine months of 2023, and lower equity income. These were partially offset by continued productivity and efficiency improvements, including lower costs at certain underperforming facilities, higher net favourable commercial items, and lower net engineering costs, including spending related to our electrification and active safety businesses.
During the nine months ended September 30, 2024, income from operations before income taxes was $1.16 billion, net income attributable to Magna International Inc. was $806 million and diluted earnings per share were $2.81, decreases of $135 million, $136 million, and $0.48, respectively, each compared to the first nine months of 2023.
During the nine months ended September 30, 2024, Adjusted diluted earnings per share decreased 10% to $3.72, compared to the first nine months of 2023.
During the nine months ended September 30, 2024, we generated cash from operations before changes in operating assets and liabilities of $2.06 billion and invested $333 million in operating assets and liabilities. Investment activities for the first nine months of 2024 included $1.47 billion in fixed asset additions, a $410 million increase in investments, other assets and intangible assets and $22 million in public and private equity investments.
RETURN OF CAPITAL
During the three months ended September 30, 2024, we paid $138 million in dividends.
Our Board of Directors declared a third quarter dividend of $0.475 per Common Share, payable on November 29, 2024 to shareholders of record as of the close of business on November 15, 2024.
OTHER MATTERS
Subject to the approval by the Toronto Stock Exchange, our Board of Directors approved a new Normal Course Issuer Bid ("NCIB") to purchase up to approximately 28.5 million of our Common Shares, representing approximately 10% of our public float of Common Shares. This NCIB is expected to commence on or about November 7, 2024 and will terminate one year later.
SEGMENT SUMMARY
| ($Millions unless otherwise noted) | For the three months ended September 30, | ||||||||||||||||||
| Sales | Adjusted EBIT | ||||||||||||||||||
| 2024 | 2023 | Change | 2024 | 2023 | Change | ||||||||||||||
| Body Exteriors & Structures | $ | 4,038 | $ | 4,354 | $ | (316 | ) | $ | 273 | $ | 358 | $ | (85 | ) | |||||
| Power & Vision | 3,837 | 3,745 | 92 | 279 | 221 | 58 | |||||||||||||
| Seating Systems | 1,379 | 1,529 | (150 | ) | 51 | 70 | (19 | ) | |||||||||||
| Complete Vehicles | 1,159 | 1,185 | (26 | ) | 27 | (5 | ) | 32 | |||||||||||
| Corporate and Other | (133 | ) | (125 | ) | (8 | ) | (36 | ) | (29 | ) | (7 | ) | |||||||
| Total Reportable Segments | $ | 10,280 | $ | 10,688 | $ | (408 | ) | $ | 594 | $ | 615 | $ | (21 | ) | |||||
| For the three months ended September 30, | |||||||||||||||||||
| Adjusted EBIT as a percentage of sales | |||||||||||||||||||
| 2024 | 2023 | Change | |||||||||||||||||
| Body Exteriors & Structures | 6.8 | % | 8.2 | % | (1.4 | )% | |||||||||||||
| Power & Vision | 7.3 | % | 5.9 | % | 1.4 | % | |||||||||||||
| Seating Systems | 3.7 | % | 4.6 | % | (0.9 | )% | |||||||||||||
| Complete Vehicles | 2.3 | % | (0.4 | )% | 2.7 | % | |||||||||||||
| Consolidated Average | 5.8 | % | 5.8 | % | 0.0 | % | |||||||||||||
| ($Millions unless otherwise noted) | For the nine months ended September 30, | ||||||||||||||||||
| Sales | Adjusted EBIT | ||||||||||||||||||
| 2024 | 2023 | Change | 2024 | 2023 | Change | ||||||||||||||
| Body Exteriors & Structures | $ | 12,932 | $ | 13,333 | $ | (401 | ) | $ | 912 | $ | 1,024 | $ | (112 | ) | |||||
| Power & Vision | 11,605 | 10,530 | 1,075 | 575 |
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