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 America and approximately 13.0 million units in Western Europe. We expect full year 2012 production sales to be between $13.2 billion and $13.7 billion in North America, between $8.4 billion and $8.7 billion in Europe and between $2.0 billion and $2.3 billion in 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 America and 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 Europe and 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 America and Western Europe; expected consolidated
sales, based on such light vehicle production volumes; production sales
in its North America, Europe and 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, Russia and 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 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.
SOURCE Magna International Inc.