Magna International Inc 6-K, filed Nov 5, 2021
Magna International Inc (MGA)
About this 6-K
Magna International Inc filed this 6-K on November 5, 2021.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
Report of Foreign Private Issuer Pursuant to Rule 13a-16 or 15d-16 under the Securities Exchange Act of 1934
For the month of November 2021
Commission File Number 001-11444
| MAGNA INTERNATIONAL INC. |
| (Exact Name of Registrant as specified in its Charter) |
| 337 Magna Drive, Aurora, Ontario, Canada L4G 7K1 |
| (Address of principal executive office) |
Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F. Form 20-F [ ] Form 40-F [X] |
| Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): _______ |
| Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders. |
| Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): _______ |
| Note: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submitted to furnish a report or other document that the registrant foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant’s “home country”), or under the rules of the home country exchange on which the registrant’s securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant’s security holders, and, if discussing a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| Date: November 5, 2021 | MAGNA INTERNATIONAL INC. (Registrant) | ||
| By: | /s/ “Bassem Shakeel” | ||
| Bassem A. Shakeel, | |||
| Vice-President and Corporate Secretary | |||
EXHIBITS
| Exhibit 99.1 | Q3 2021 Financial Review | |
| Exhibit 99.2 | Q3 2021 Earnings Presentation slides (November 5, 2021) | |
| Exhibit 99.3 | Q3 2021 Earnings Call Transcript (November 5, 2021) |
Exhibit 99.1
| FINANCIAL REVIEW OF MAGNA INTERNATIONAL INC. | |||||||||||||||||||||||
| (United States dollars in millions, except per share figures) (Unaudited) | |||||||||||||||||||||||
| Prepared in accordance with U.S. GAAP | |||||||||||||||||||||||
| 2019 | 2020 | 2021 | |||||||||||||||||||||
| Note | 1st Q | 2nd Q | 3rd Q | 4th Q | TOTAL | 1st Q | 2nd Q | 3rd Q | 4th Q | TOTAL | 1st Q | 2nd Q | 3rd Q | TOTAL | |||||||||
| VEHICLE VOLUME STATISTICS (in millions) | |||||||||||||||||||||||
| North American vehicle volumes (including Mexico) | 4.227 | 4.249 | 3.909 | 3.912 | 16.297 | 3.777 | 1.241 | 3.945 | 4.040 | 13.003 | 3.758 | 3.221 | 3.183 | 10.162 | |||||||||
| European vehicle volumes: | |||||||||||||||||||||||
| Western Europe | 3.719 | 3.614 | 2.999 | 3.285 | 13.617 | 2.905 | 1.171 | 2.613 | 3.407 | 10.096 | 3.049 | 2.513 | 2.036 | 7.598 | |||||||||
| Eastern Europe | 2.013 | 2.063 | 1.672 | 1.987 | 7.735 | 1.795 | 0.913 | 1.663 | 1.990 | 6.361 | 1.854 | 1.664 | 1.398 | 4.916 | |||||||||
| Total Europe | 5.732 | 5.677 | 4.671 | 5.272 | 21.352 | 4.700 | 2.084 | 4.276 | 5.397 | 16.457 | 4.903 | 4.177 | 3.434 | 12.514 | |||||||||
| Asia volumes | 11.851 | 11.109 | 10.986 | 13.050 | 46.996 | 8.282 | 8.445 | 10.890 | 13.791 | 41.408 | 11.476 | 10.357 | 10.070 | 31.903 | |||||||||
| China volumes | 6.021 | 5.480 | 5.626 | 7.415 | 24.542 | 3.235 | 5.850 | 6.281 | 8.129 | 23.495 | 6.071 | 5.686 | 5.544 | 17.301 | |||||||||
| Magna Steyr vehicle assembly volumes | 0.046 | 0.043 | 0.035 | 0.034 | 0.158 | 0.031 | 0.017 | 0.027 | 0.035 | 0.110 | 0.040 | 0.030 | 0.023 | 0.093 | |||||||||
| AVERAGE FOREIGN EXCHANGE RATES | |||||||||||||||||||||||
| 1 Canadian dollar equals U.S. dollars | 0.752 | 0.748 | 0.757 | 0.758 | 0.754 | 0.745 | 0.722 | 0.751 | 0.767 | 0.746 | 0.790 | 0.814 | 0.794 | 0.799 | |||||||||
| 1 Euro equals U.S. dollars | 1.135 | 1.124 | 1.112 | 1.107 | 1.119 | 1.102 | 1.101 | 1.170 | 1.192 | 1.141 | 1.205 | 1.206 | 1.178 | 1.196 | |||||||||
| 1 Chinese renminbi equals U.S. dollars | 0.148 | 0.147 | 0.142 | 0.142 | 0.145 | 0.143 | 0.141 | 0.145 | 0.151 | 0.145 | 0.154 | 0.155 | 0.155 | 0.155 | |||||||||
| CONSOLIDATED STATEMENTS OF INCOME (LOSS) | |||||||||||||||||||||||
| Sales: | |||||||||||||||||||||||
| Body Exteriors & Structures | 4,308 | 4,243 | 3,984 | 3,923 | 16,458 | 3,676 | 1,623 | 3,858 | 4,393 | 13,550 | 4,025 | 3,647 | 3,185 | 10,857 | |||||||||
| Power & Vision | 3,083 | 2,808 | 2,696 | 2,725 | 11,312 | 2,523 | 1,298 | 2,722 | 3,179 | 9,722 | 3,156 | 2,881 | 2,501 | 8,538 | |||||||||
| Seating Systems | 1,433 | 1,452 | 1,266 | 1,426 | 5,577 | 1,261 | 524 | 1,280 | 1,390 | 4,455 | 1,303 | 1,166 | 1,123 | 3,592 | |||||||||
| Complete Vehicles | 1,928 | 1,802 | 1,516 | 1,461 | 6,707 | 1,321 | 933 | 1,402 | 1,759 | 5,415 | 1,850 | 1,490 | 1,255 | 4,595 | |||||||||
| Corporate & Other | (161) | (179) | (143) | (140) | (623) | (124) | (85) | (133) | (153) | (495) | (155) | (150) | (145) | (450) | |||||||||
| Sales | 10,591 | 10,126 | 9,319 | 9,395 | 39,431 | 8,657 | 4,293 | 9,129 | 10,568 | 32,647 | 10,179 | 9,034 | 7,919 | 27,132 | |||||||||
| Costs and expenses: | |||||||||||||||||||||||
| Cost of goods sold | 9,164 | 8,710 | 8,063 | 8,085 | 34,022 | 7,567 | 4,206 | 7,681 | 8,753 | 28,207 | 8,662 | 7,728 | 6,885 | 23,275 | |||||||||
| Selling, general and administrative | 421 | 453 | 400 | 423 | 1,697 | 381 | 378 | 380 | 448 | 1,587 | 430 | 419 | 454 | 1,303 | |||||||||
| Equity income | (35) | (48) | (37) | (58) | (178) | (30) | (25) | (44) | (90) | (189) | (47) | (44) | (34) | (125) | |||||||||
| EBITDA | 1 | 1,041 | 1,011 | 893 | 945 | 3,890 | 739 | (266) | 1,112 | 1,457 | 3,042 | 1,134 | 931 | 614 | 2,679 | ||||||||
| Depreciation and amortization | 321 | 334 | 335 | 355 | 1,345 | 336 | 334 | 334 | 362 | 1,366 | 364 | 374 | 385 | 1,123 | |||||||||
| EBIT | 2 | 720 | 677 | 558 | 590 | 2,545 | 403 | (600) | 778 | 1,095 | 1,676 | 770 | 557 | 229 | 1,556 | ||||||||
| Interest expense, net | 31 | 14 | 18 | 19 | 82 | 17 | 21 | 26 | 22 | 86 | 23 | 11 | 22 | 56 | |||||||||
| Operating income (loss) | 1 | 689 | 663 | 540 | 571 | 2,463 | 386 | (621) | 752 | 1,073 | 1,590 | 747 | 546 | 207 | 1,500 | ||||||||
| Other expense (income), net | 1 | (679) | 68 | 859 | (8) | 240 | - | 168 | 316 | 100 | 584 | (58) | 6 | 180 | 128 | ||||||||
| Income (loss) from operations before income taxes | 1,368 | 595 | (319) | 579 | 2,223 | 386 | (789) | 436 | 973 | 1,006 | 805 | 540 | 27 | 1,372 | |||||||||
| Income tax expense (benefit) | 267 | 145 | 45 | 134 | 591 | 134 | (137) | 109 | 223 | 329 | 183 | 104 | 10 | 297 | |||||||||
| Net income (loss) | 1,101 | 450 | (364) | 445 | 1,632 | 252 | (652) | 327 | 750 | 677 | 622 | 436 | 17 | 1,075 | |||||||||
| (Income) loss attributable to non-controlling interests | 1 | 5 | 2 | 131 | (5) | 133 | 9 | 5 | 78 | (12) | 80 | (7) | (12) | (6) | (25) | ||||||||
| Net income (loss) attributable to Magna International Inc. | 1,106 | 452 | (233) | 440 | 1,765 | 261 | (647) | 405 | 738 | 757 | 615 | 424 | 11 | 1,050 | |||||||||
| Adjusted net income (loss) attributable to Magna International Inc. | 1 | 531 | 509 | 438 | 433 | 1,911 | 261 | (511) | 585 | 851 | 1,186 | 566 | 426 | 170 | 1,162 | ||||||||
| Diluted earnings (loss) per share: | |||||||||||||||||||||||
| Diluted | $ 3.39 | $ 1.42 | $ | (0.75) | $ 1.43 | $ 5.59 | $ 0.86 | $ (2.17) | $ 1.35 | $ 2.45 | $ 2.52 | $ 2.03 | $ 1.40 | $ 0.04 | $ 3.46 | ||||||||
| Adjusted Diluted | $ 1.63 | $ 1.59 | $ | 1.41 | $ 1.41 | $ 6.05 | $ 0.86 | $ (1.71) | $ 1.95 | $ 2.83 | $ 3.95 | $ 1.86 | $ 1.40 | $ 0.56 | $ 3.83 | ||||||||
| Weighted average number of Common Shares outstanding | |||||||||||||||||||||||
| during the year (in millions): | 326.3 | 319.5 | 310.7 | 306.3 | 315.8 | 302.7 | 298.4 | 299.4 | 300.9 | 300.4 | 303.6 | 303.6 | 302.6 | 303.2 | |||||||||
| PROFITABILITY RATIOS | |||||||||||||||||||||||
| Cost of goods sold / Total sales | 86.5% | 86.0% | 86.5% | 86.1% | 86.3% | 87.4% | 98.0% | 84.1% | 82.8% | 86.4% | 85.1% | 85.5% | 86.9% | 85.8% | |||||||||
| Gross margin (before depreciation) / Total sales | 13.5% | 14.0% | 13.5% | 13.9% | 13.7% | 12.6% | 2.0% | 15.9% | 17.2% | 13.6% | 14.9% | 14.5% | 13.1% | 14.2% | |||||||||
| Selling, general and administrative /Sales | 4.0% | 4.5% | 4.3% | 4.5% | 4.3% | 4.4% | 8.8% | 4.2% | 4.2% | 4.9% | 4.2% | 4.6% | 5.7% | 4.8% | |||||||||
| EBITDA /Sales | 9.8% | 10.0% | 9.6% | 10.1% | 9.9% | 8.5% | -6.2% | 12.2% | 13.8% | 9.3% | 11.1% | 10.3% | 7.8% | 9.9% | |||||||||
| EBIT /Sales | 6.8% | 6.7% | 6.0% | 6.3% | 6.5% | 4.7% | -14.0% | 8.5% | 10.4% | 5.1% | 7.6% | 6.2% | 2.9% | 5.7% | |||||||||
| Operating income(loss) /Sales | 6.5% | 6.5% | 5.8% | 6.1% | 6.2% | 4.5% | -14.5% | 8.2% | 10.2% | 4.9% | 7.3% | 6.0% | 2.6% | 5.5% | |||||||||
| Effective tax rate | |||||||||||||||||||||||
| Reported | 19.5% | 24.4% | -14.1% | 23.1% | 26.6% | 34.7% | 17.4% | 25.0% | 22.9% | 32.7% | 22.7% | 19.3% | 37.0% | 21.6% | |||||||||
| Excluding Other expense (income), net of taxes | 23.7% | 23.5% | 19.6% | 23.3% | 22.7% | 34.7% | 16.9% | 22.6% | 19.6% | 25.7% | 23.3% | 19.8% | 15.0% | 20.9% | |||||||||
| Q3 2021 Financial Review of Magna International Inc. | Page 1 of 6 |
| FINANCIAL REVIEW OF MAGNA INTERNATIONAL INC. | ||||||||||||||||||||||
| CONSOLIDATED BALANCE SHEETS | ||||||||||||||||||||||
| (United States dollars in millions) (Unaudited) | ||||||||||||||||||||||
| 2019 | 2020 | 2021 | ||||||||||||||||||||
| 1st Q | 2nd Q | 3rd Q | 4th Q | 1st Q | 2nd Q | 3rd Q | 4th Q | 1st Q | 2nd Q | 3rd Q | ||||||||||||
| FUNDS EMPLOYED | [Note 1] | |||||||||||||||||||||
| Current assets: | ||||||||||||||||||||||
| Accounts receivable | 7,446 | 7,204 | 7,068 | 5,927 | 5,684 | 5,253 | 6,618 | 6,394 | 7,176 | 6,531 | 6,082 | |||||||||||
| Inventories | 3,501 | 3,521 | 3,457 | 3,304 | 3,531 | 3,503 | 3,509 | 3,444 | 3,645 | 3,999 | 4,150 | |||||||||||
| Prepaid expenses and other | 222 | 244 | 189 | 238 | 234 | 216 | 196 | 260 | 290 | 294 | 247 | |||||||||||
| 11,169 | 10,969 | 10,714 | 9,469 | 9,449 | 8,972 | 10,323 | 10,098 | 11,111 | 10,824 | 10,479 | ||||||||||||
| Current liabilities: | ||||||||||||||||||||||
| Accounts payable | 6,484 | 6,272 | 5,966 | 5,628 | 5,635 | 4,243 | 5,808 | 6,266 | 6,787 | 6,248 | 5,914 | |||||||||||
| Accrued salaries and wages | 860 | 757 | 797 | 753 | 807 | 691 | 851 | 815 | 897 | 912 | 893 | |||||||||||
| Other accrued liabilities | 2,003 | 2,019 | 1,994 | 1,800 | 1,921 | 2,058 | 2,246 | 2,254 | 2,298 | 2,186 | 2,070 | |||||||||||
| Income taxes payable (receivable) | (53) | (34) | (22) | 17 | 18 | (87) | (69) | 38 | 109 | 123 | 125 | |||||||||||
| 9,294 | 9,014 | 8,735 | 8,198 | 8,381 | 6,905 | 8,836 | 9,373 | 10,091 | 9,469 | 9,002 | ||||||||||||
| Working capital | 1,875 | 1,955 | 1,979 | 1,271 | 1,068 | 2,067 | 1,487 | 725 | 1,020 | 1,355 | 1,477 | |||||||||||
| Investments | 2,408 | 2,334 | 1,430 | 1,210 | 1,336 | 1,336 | 1,143 | 947 | 960 | 1,124 | 1,455 | |||||||||||
| Fixed assets, net | 7,958 | 8,109 | 7,943 | 8,260 | 7,948 | 7,860 | 7,898 | 8,475 | 8,305 | 8,297 | 8,166 | |||||||||||
| Goodwill, other assets and intangible assets | 3,487 | 3,593 | 3,461 | 3,456 | 3,340 | 3,362 | 3,423 | 3,539 | 3,614 | 3,632 | 3,530 | |||||||||||
| Operating lease right-of-use assets | 1,716 | 1,744 | 1,702 | 1,811 | 1,788 | 1,777 | 1,787 | 1,906 | 1,869 | 1,854 | 1,731 | |||||||||||
| Funds employed | 17,444 | 17,735 | 16,515 | 16,008 | 15,480 | 16,402 | 15,738 | 15,592 | 15,768 | 16,262 | 16,359 | |||||||||||
| FINANCING | ||||||||||||||||||||||
| Straight debt: | ||||||||||||||||||||||
| Cash and cash equivalents | (925) | (563) | (769) | (1,276) | (1,146) | (533) | (1,498) | (3,268) | (3,464) | (3,426) | (2,748) | |||||||||||
| Short-term borrowings | 335 | 199 | 436 | - | - | 188 | - | - | - | - | - | |||||||||||
| Long-term debt due within one year | 122 | 112 | 104 | 106 | 93 | 150 | 98 | 129 | 137 | 117 | 101 | |||||||||||
| Long-term debt | 3,062 | 3,071 | 3,021 | 3,062 | 3,021 | 3,771 | 3,832 | 3,973 | 3,935 | 3,941 | 3,908 | |||||||||||
| Current portion of operating lease liabilities | 176 | 214 | 218 | 225 | 218 | 221 | 226 | 241 | 244 | 278 | 269 | |||||||||||
| Operating lease liabilities | 1,566 | 1,544 | 1,527 | 1,601 | 1,586 | 1,577 | 1,582 | 1,656 | 1,613 | 1,563 | 1,438 | |||||||||||
| 4,336 | 4,577 | 4,537 | 3,718 | 3,772 | 5,374 | 4,240 | 2,731 | 2,465 | 2,473 | 2,968 | ||||||||||||
| Long-term employee benefit liabilities | 598 | 606 | 584 | 677 | 659 | 675 | 696 | 729 | 733 | 743 | 716 | |||||||||||
| Other long-term liabilities | 396 | 404 | 388 | 371 | 420 | 390 | 305 | 332 | 414 | 482 | 466 | |||||||||||
| Deferred tax liabilities, net | 167 | 196 | 133 | 111 | 87 | 10 | 87 | 80 | 104 | 124 | 40 | |||||||||||
| 1,161 | 1,206 | 1,105 | 1,159 | 1,166 | 1,075 | 1,088 | 1,141 | 1,251 | 1,349 | 1,222 | ||||||||||||
| Shareholders' equity | 11,947 | 11,952 | 10,873 | 11,131 | 10,542 | 9,953 | 10,410 | 11,720 | 12,052 | 12,440 | 12,169 | |||||||||||
| 17,444 | 17,735 | 16,515 | 16,008 | 15,480 | 16,402 | 15,738 | 15,592 | 15,768 | 16,262 | 16,359 | ||||||||||||
| ASSET UTILIZATION RATIOS | ||||||||||||||||||||||
| Days in accounts receivable | 63.3 | 64.0 | 68.3 | 56.8 | 59.1 | 110.1 | 65.2 | 54.5 | 63.4 | 65.1 | 69.1 | |||||||||||
| Days in accounts payable | 63.7 | 64.8 | 66.6 | 62.6 | 67.0 | 90.8 | 68.1 | 64.4 | 70.5 | 72.8 | 77.3 | |||||||||||
| Inventory turnover - cost of sales | 10.5 | 9.9 | 9.3 | 9.8 | 8.6 | 4.8 | 8.8 | 10.2 | 9.5 | 7.7 | 6.6 | |||||||||||
| Working capital turnover | 22.6 | 20.7 | 18.8 | 29.6 | 32.4 | 8.3 | 24.6 | 58.3 | 39.9 | 26.7 | 21.4 | |||||||||||
| Total asset turnover | 2.4 | 2.3 | 2.3 | 2.3 | 2.2 | 1.0 | 2.3 | 2.7 | 2.6 | 2.2 | 1.9 | |||||||||||
| CAPITAL STRUCTURE | ||||||||||||||||||||||
| Straight debt | 24.9% | 25.8% | 27.5% | 23.2% | 24.4% | 32.8% | 26.9% | 17.5% | 15.6% | 15.2% | 18.1% | |||||||||||
| Long-term employee benefit liabilities, other long-term | ||||||||||||||||||||||
| liabilities & deferred tax liabilities, net | 6.6% | 6.8% | 6.7% | 7.2% | 7.5% | 6.6% | 6.9% | 7.3% | 7.9% | 8.3% | 7.5% | |||||||||||
| Shareholders' equity | 68.5% | 67.4% | 65.8% | 69.5% | 68.1% | 60.7% | 66.1% | 75.2% | 76.4% | 76.5% | 74.4% | |||||||||||
| 100.0% | 100.0% | 100.0% | 100.0% | 100.1% | 100.0% | 100.0% | 100.0% | 100.0% | 100.0% | 100.0% | ||||||||||||
| Debt to total capitalization | 30.6% | 30.1% | 32.8% | 31.0% | 31.8% | 37.2% | 35.5% | 33.9% | 33.0% | 32.2% | 32.0% | |||||||||||
| ANNUALIZED RETURNS | ||||||||||||||||||||||
| Return on assets (EBIT/assets employed) | 16.5% | 15.3% | 13.5% | 14.7% | 10.4% | -14.6% | 19.8% | 28.1% | 19.5% | 13.7% | 5.6% | |||||||||||
| Return on equity (Net income attributable to Magna | ||||||||||||||||||||||
| International Inc. / Average shareholders' equity) | 38.3% | 15.1% | -8.2% | 16.0% | 9.6% | -25.3% | 15.9% | 26.7% | 20.7% | 13.8% | 0.4% | |||||||||||
| Adjusted Return on equity (Adjusted Net income attributable | ||||||||||||||||||||||
| to Magna International Inc. / Average shareholders' equity) | 18.4% | 17.0% | 15.4% | 15.7% | 9.6% | -19.9% | 23.0% | 30.8% | 19.0% | 13.9% | 5.5% | |||||||||||
| Q3 2021 Financial Review of Magna International Inc. | Page 2 of 6 |
| FINANCIAL REVIEW OF MAGNA INTERNATIONAL INC. | ||||||||||||||||||||||
| CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||||||||||||||||
| (United States dollars in millions) (Unaudited) | ||||||||||||||||||||||
| 2019 | 2020 | 2021 | ||||||||||||||||||||
| Cash provided from (used for): | Note | 1st Q | 2nd Q | 3rd Q | 4th Q | TOTAL | 1st Q | 2nd Q | 3rd Q | 4th Q | TOTAL | 1st Q | 2nd Q | 3rd Q | TOTAL | |||||||
| Operating activities | ||||||||||||||||||||||
| Net income (loss) | 1,101 | 450 | (364) | 445 | 1,632 | 252 | (652) | 327 | 750 | 677 | 622 | 436 | 17 | 1,075 | ||||||||
| Items not involving current cash flows | (i) | (235) | 431 | 1,188 | 486 | 1,870 | 344 | 335 | 749 | 548 | 1,976 | 349 | 341 | 515 | 1,205 | |||||||
| (i) | 866 | 881 | 824 | 931 | 3,502 | 596 | (317) | 1,076 | 1,298 | 2,653 | 971 | 777 | 532 | 2,280 | ||||||||
| Changes in operating assets and liabilities | (i) | (272) | 39 | (74) | 765 | 458 | 43 | (915) | 536 | 961 | 625 | (310) | (249) | (132) | (691) | |||||||
| Cash provided from (used for) operating activities | 594 | 920 | 750 | 1,696 | 3,960 | 639 | (1,232) | 1,612 | 2,259 | 3,278 | 661 | 528 | 400 | 1,589 | ||||||||
| Investment activities | ||||||||||||||||||||||
| Fixed asset additions | (251) | (328) | (349) | (513) | (1,441) | (203) | (169) | (213) | (560) | (1,145) | (212) | (277) | (334) | (823) | ||||||||
| Increase in equity method investment | - | - | - | - | - | - | - | - | - | - | - | - | (454) | (454) | ||||||||
| Increase in investments, other assets and intangible assets | (77) | (102) | (83) | (122) | (384) | (93) | (72) | (68) | (98) | (331) | (104) | (93) | (101) | (298) | ||||||||
| Funding provided on sale of business | 1 (e) | - | - | - | - | - | - | - | - | - | - | - | - | (41) | (41) | |||||||
| Increase in public and private equity investments | (5) | (5) | - | - | (10) | (100) | (2) | (12) | (18) | (132) | (3) | (17) | (3) | (23) | ||||||||
| Settlement of long-term receivable from non-consolidated joint venture | - | - | - | - | - | - | - | - | - | - | 50 | - | - | 50 | ||||||||
| Proceeds from disposition | 86 | 26 | 57 | 16 | 185 | 23 | 11 | 14 | 69 | 117 | 19 | 20 | 10 | 49 | ||||||||
| Business combinations | - | (152) | - | 5 | (147) | (7) | - | - | 98 | 91 | 39 | (21) | - | 18 | ||||||||
| Proceeds from sale of (Investment in) Lyft, Inc. | - | - | 10 | 221 | 231 | - | - | - | - | - | - | - | - | - | ||||||||
| Sale of Fluid Pressure & Controls Business ["FP&C"] | 1,129 | - | 3 | - | 1,132 | - | - | - | - | - | - | - | - | - | ||||||||
| Cash (used for) provided from investment activities | 882 | (561) | (362) | (393) | (434) | (380) | (232) | (279) | (509) | (1,400) | (211) | (388) | (923) | (1,522) | ||||||||
| Financing activities | ||||||||||||||||||||||
| Net issues (repayments) of debt | (855) | (187) | 251 | (435) | (1,226) | (6) | 962 | (246) | (27) | 683 | (126) | (33) | (13) | (172) | ||||||||
| Common Shares issued on exercise of stock options | 8 | 6 | 19 | 11 | 44 | 1 | 1 | 15 | 64 | 81 | 83 | 50 | 3 | 136 | ||||||||
| Repurchase of Common Shares | (284) | (409) | (342) | (254) | (1,289) | (201) | - | (2) | - | (203) | (162) | (99) | (5) | (266) | ||||||||
| Tax withholdings on vesting of equity awards | (3) | (2) | - | (4) | (9) | (10) | - | - | (3) | (13) | (12) | - | - | (12) | ||||||||
| Contributions to subsidiaries by non-controlling interests | 2 | - | 2 | - | 4 | - | - | - | 18 | 18 | - | - | - | - | ||||||||
| Dividends paid to non-controlling interests | - | (13) | - | (9) | (22) | (3) | (3) | - | (12) | (18) | - | (8) | (2) | (10) | ||||||||
| Dividends paid | (119) | (110) | (109) | (111) | (449) | (121) | (116) | (115) | (115) | (467) | (130) | (127) | (130) | (387) | ||||||||
| Cash provided from (used for) financing activities | (1,251) | (715) | (179) | (802) | (2,947) | (340) | 844 | (348) | (75) | 81 | (347) | (217) | (147) | (711) | ||||||||
| Effect of exchange rate changes on cash, cash equivalents | ||||||||||||||||||||||
| and restricted cash equivalents | 14 | (4) | (9) | 10 | 11 | (52) | 9 | (15) | 81 | 23 | (13) | 39 | (8) | 18 | ||||||||
| Net increase (decrease) in cash, cash equivalents | ||||||||||||||||||||||
| and restricted cash equivalents during the period | 239 | (360) | 200 | 511 | 590 | (133) | (611) | 970 | 1,756 | 1,982 | 90 | (38) | (678) | (626) | ||||||||
| Cash, cash equivalents and restricted cash equivalents, | ||||||||||||||||||||||
| beginning of period | 3 | 802 | 1,041 | 681 | 881 | 802 | 1,392 | 1,259 | 648 | 1,618 | 1,392 | 3,374 | 3,464 | 3,426 | 3,374 | |||||||
| Cash, cash equivalents and restricted cash equivalents, | ||||||||||||||||||||||
| end of period | 1,041 | 681 | 881 | 1,392 | 1,392 | 1,259 | 648 | 1,618 | 3,374 | 3,374 | 3,464 | 3,426 | 2,748 | 2,748 | ||||||||
| (i) Certain amounts in prior periods have been reclassified to conform with current period presentation. | ||||||||||||||||||||||
| Q3 2021 Financial Review of Magna International Inc. | Page 3 of 6 |
| FINANCIAL REVIEW OF MAGNA INTERNATIONAL INC. | ||||||||||||||||||||||
| (United States dollars in millions, except per share figures) (Unaudited) | ||||||||||||||||||||||
| This Analyst should be read in conjunction with the audited consolidated financial statements for the year ended December 31, 2020. | ||||||||||||||||||||||
| Note 1: | NON-GAAP MEASURES | |||||||||||||||||||||
| The Company presents Operating income,
EBIT (Earnings before interest and taxes) and EBITDA (Earnings before interest, taxes and depreciation and amortization) before Other
expense (income),net. The Company also presents Adjusted Net Income (Net Income before Other expense (income),net , net
of tax and excluding significant income tax valuation allowance adjustments), Adjusted Diluted Earnings per Share, Adjusted EBIT
and Adjusted EBIT as a percentage of sales, Return on Invested Capital and Return on Equity. The Company calculates Adjusted Debt
as total debt adjusted to include pension and lease liabilities and Adjusted EBITDA as earnings before, interest, net, taxes, depreciation
and amortization adjusted to add back interest income, certain pension costs and operating lease expense. The Company presents these
financial figures because such measures are widely used by analysts and investors in evaluating the operating performance of the
Company. However, such measures do not have any standardized meaning under U.S. generally accepted accounting principles
and may not be comparable to the calculation of similar measures by other companies. Other expense (income), net consists of: | ||||||||||||||||||||||
| 2019 | 2020 | 2021 | ||||||||||||||||||||
| 1st Q | 2nd Q | 3rd Q | 4th Q | TOTAL | 1st Q | 2nd Q | 3rd Q | 4th Q | TOTAL | 1st Q | 2nd Q | 3rd Q | TOTAL | |||||||||
| Impairments and loss on sale of equity-accounted investments | [a] | - | - | 700 | - | 700 | - | - | 337 | 10 | 347 | - | - | - | - | |||||||
| Restructuring and impairments | [b] | 14 | 7 | 34 | 3 | 58 | - | 168 | - | 101 | 269 | 15 | 44 | 24 | 83 | |||||||
| Net (gains) losses on investments | [c] | (177) | 67 | 127 | (11) | 6 | - | - | (21) | (11) | (32) | (33) | (38) | 81 | 10 | |||||||
| Gain on business combinations | [d] | - | - | - | - | - | - | - | - | - | - | (40) | - | - | (40) | |||||||
| Net (gains) losses on the sale of business | [e] | (516) | (6) | (2) | - | (524) | - | - | - | - | - | - | - | 75 | 75 | |||||||
| (679) | 68 | 859 | (8) | 240 | - | 168 | 316 | 100 | 584 | (58) | 6 | 180 | 128 | |||||||||
| [a] | Impairments and loss on sale of equity-accounted investments | |||||||||||||||||||||
| In the fourth quarter of 2020, the Company
recorded a $10 million loss in Power & Vision on the sale of its 50% interest in Dongfeng Getrag Transmission Co. Ltd. In Power & Vision, during the third quarters of 2020 and 2019, the Company recorded impairment charges of $337 million and $700 million, respectively on equity accounted investments. | ||||||||||||||||||||||
| [b] | Restructuring and impairments | |||||||||||||||||||||
| COVID-19 Restructuring and Impairments: | ||||||||||||||||||||||
| In response to the impact that COVID-19 was expected to have on vehicle production volumes over the short to medium term, the Company initiated and/or accelerated the timing of restructuring plans to right-size its business. These restructuring actions included plant closures and workforce reductions. As a result, in the second quarter of 2020, the Company recorded COVID-19 related restructuring and impairment charges of $115 million in Power & Vision, $37 million in Body Exteriors & Structures, and $16 million in Seating, respectively. | ||||||||||||||||||||||
| Impairments: | ||||||||||||||||||||||
| The Company recorded impairments in the
fourth quarter of 2020 in the amount of $57 million in Body Exteriors & Structures as well as the second quarter of 2019 in the
amount of $27 million in Power & Vision. | ||||||||||||||||||||||
| Brazil Closures: | ||||||||||||||||||||||
| In the fourth quarter of 2020, in connection
with the announced plant closures by Ford Motor Co. in Brazil, the Company made the decision to accelerate the closure and/or restructuring
of two facilities in Brazil that supply these plants by recording restructuring and impairments in the amount of $8 million in Body
Exteriors & Structures, and $15 million in Seating, respectively. | ||||||||||||||||||||||
| India Closures: | ||||||||||||||||||||||
| In the third quarter of 2021,the Company
recorded restructuring and impairment charges of $8 million in our Body Exteriors & Structures segment, and $4 million in our
Seating Systems segment, primarily related to Ford Motor Company's recently announced plan to exit India. | ||||||||||||||||||||||
| Other Restructuring: | 2019 | 2020 | 2021 | |||||||||||||||||||
| 1st Q | 2nd Q | 3rd Q | 4th Q | TOTAL | 1st Q | 2nd Q | 3rd Q | 4th Q | TOTAL | 1st Q | 2nd Q | 3rd Q | TOTAL | |||||||||
| Power & Vision | - | - | - | - | - | - | - | - | - | - | 15 | 44 | 4 | 63 | ||||||||
| Body Exteriors & Structures | 14 | 7 | 7 | 3 | 31 | - | - | - | 21 | 21 | - | - | 8 | 8 | ||||||||
| 14 | 7 | 7 | 3 | 31 | - | - | - | 21 | 21 | 15 | 44 | 12 | 71 | |||||||||
| Q3 2021 Financial Review of Magna International Inc. | Page 4 of 6 |
| [c] | Net (gains) losses on investments | |||||||||||||||||||||
| In Corporate, during the first, second,
and third quarters of 2021, the Company recorded gains and losses related to the revaluation of its public and private equity investments
and certain public company warrants. In Corporate, during the third and fourth quarters of 2020, the Company recorded gains related to the revaluation of its private equity investments. In addition, the Company recorded a non-cash impairment charge of $2 million on its private equity investment in Corporate. In Corporate, during the first, second, third and fourth quarters of 2019, the Company recorded gains and losses related substantially to the revaluation of its investment in Lyft, Inc. | ||||||||||||||||||||||
| [d] | Gain on business combinations | |||||||||||||||||||||
| In Seating Systems, during the first quarter of 2021, the Company recognized a $22 million gain on the on the change in basis of accounting for its previously held equity method investments. In Power & Vision, substantially all of the assets of the Company's European joint venture with Ford Motor Company, Getrag Ford Transmission GmbH, were distributed to either Ford or the Company, which resulted in the Company recording a gain of $18 million. | ||||||||||||||||||||||
| [e] | Net (gains) losses on the sale of business | |||||||||||||||||||||
| During the third quarter of 2021,
the Company sold three Body Exteriors & Structures operations in Germany. Under the terms of the arrangement, the
Company provided the buyer with $41 million of funding, subject to working capital adjustments, resulting in a loss on disposal of
$75 million [$75 million after tax]. In Power & Vision, during the first quarter of 2019, the Company recorded a gain on the sale of its FP&C business of $516 million. In the second and third quarters of 2019, the Company recorded an increase in the gain on sale of $6 million and $2 million, respectively, as a result of finalizing the proceeds relating to working capital. | ||||||||||||||||||||||
| The following table reconciles Net (loss) income attributable to Magna International Inc. to Adjusted net income attributable to Magna International Inc.: | ||||||||||||||||||||||
| 2019 | 2020 | 2021 | ||||||||||||||||||||
| 1st Q | 2nd Q | 3rd Q | 4th Q | TOTAL | 1st Q | 2nd Q | 3rd Q | 4th Q | TOTAL | 1st Q | 2nd Q | 3rd Q | TOTAL | |||||||||
| Net income (loss) attributable to Magna International Inc. | 1,106 | 452 | (233) | 440 | 1,765 | 261 | (647) | 405 | 738 | 757 | 615 | 424 | 11 | 1,050 | ||||||||
| Exclude: | ||||||||||||||||||||||
| Impairments and loss on sale of equity-accounted investments | [i] | - | - | 537 | - | 537 | - | - | 200 | 19 | 219 | - | - | - | - | |||||||
| Restructuring and impairments | 14 | 7 | 27 | 3 | 51 | - | 136 | - | 101 | 237 | 15 | 31 | 20 | 66 | ||||||||
| Net (gains) losses on investments | (151) | 57 | 109 | (10) | 5 | - | - | (20) | (7) | (27) | (24) | (29) | 64 | 11 | ||||||||
| Gain on business combinations | - | - | - | - | - | - | - | - | - | - | (40) | - | - | (40) | ||||||||
| Net (gains) losses on the sale of business | (438) | (7) | (2) | - | (447) | - | - | - | - | - | - | - | 75 | 75 | ||||||||
| Adjusted net income (loss) attributable to Magna International Inc. | 531 | 509 | 438 | 433 | 1,911 | 261 | (511) | 585 | 851 | 1,186 | 566 | 426 | 170 | 1,162 | ||||||||
| Diluted earnings (loss) per share | $ 3.39 | $ 1.42 | $ (0.75) | $ 1.43 | $ 5.59 | $ 0.86 | $ (2.17) | $ 1.35 | $ 2.45 | $ 2.52 | $ 2.03 | 1.40 | 0.04 | $ 3.46 | ||||||||
| Exclude: | ||||||||||||||||||||||
| Impairments and loss on sale of equity-accounted investments | [i] | - | - | 1.74 | - | 1.70 | - | - | 0.67 | 0.06 | 0.73 | - | - | - | - | |||||||
| Restructuring and impairments | 0.04 | 0.02 | 0.08 | 0.01 | 0.16 | - | 0.46 | - | 0.34 | 0.79 | 0.05 | 0.10 | 0.06 | 0.21 | ||||||||
| Net (gains) losses on investments | (0.46) | 0.17 | 0.35 | (0.03) | 0.02 | - | - | (0.07) | (0.02) | (0.09) | (0.08) | (0.10) | 0.21 | 0.04 | ||||||||
| Gain on business combinations | - | - | - | - | - | - | - | - | - | - | (0.14) | - | - | (0.13) | ||||||||
| Net (gains) losses on the sale of business | (1.34) | (0.02) | (0.01) | - | (1.42) | - | - | - | - | - | - | - | 0.25 | 0.25 | ||||||||
| Adjusted diluted earnings (loss) per share | $ 1.63 | $ 1.59 | $ 1.41 | $ 1.41 | $ 6.05 | $ 0.86 | $ (1.71) | $ 1.95 | $ 2.83 | $ 3.95 | $ 1.86 | $ 1.40 | $ 0.56 | $ 3.83 | ||||||||
| [i] Impairment charges | ||||||||||||||||||||||
| Impairment charges relating to the Company's
equity accounted investment for 2019 and 2020, include $127 million and $ 75 million, respectively, attributable to non-controlling
interest. | ||||||||||||||||||||||
| Q3 2021 Financial Review of Magna International Inc. | Page 5 of 6 |
| Note 2: | SEGMENTED INFORMATION | |||||||||||||||||||||
| 2019 | 2020 | 2021 | ||||||||||||||||||||
| 1st Q | 2nd Q | 3rd Q | 4th Q | TOTAL | 1st Q | 2nd Q | 3rd Q | 4th Q | TOTAL | 1st Q | 2nd Q | 3rd Q | TOTAL | |||||||||
| Body Exteriors & Structures | ||||||||||||||||||||||
| Sales | 4,308 | 4,243 | 3,984 | 3,923 | 16,458 | 3,676 | 1,623 | 3,858 | 4,393 | 13,550 | 4,025 | 3,647 | 3,185 | 10,857 | ||||||||
| Adjusted EBIT | 363 | 341 | 306 | 289 | 1,299 | 199 | (315) | 390 | 543 | 817 | 327 | 227 | 98 | 652 | ||||||||
| Adjusted EBIT as a percentage of sales | 8.4% | 8.0% | 7.7% | 7.4% | 7.9% | 5.4% | -19.4% | 10.1% | 12.4% | 6.0% | 8.1% | 6.2% | 3.1% | 6.0% | ||||||||
| Power & Vision | ||||||||||||||||||||||
| Sales | 3,083 | 2,808 | 2,696 | 2,725 | 11,312 | 2,523 | 1,298 | 2,722 | 3,179 | 9,722 | 3,156 | 2,881 | 2,501 | 8,538 | ||||||||
| Adjusted EBIT | 216 | 201 | 167 | 163 | 747 | 135 | (226) | 227 | 359 | 495 | 297 | 203 | 67 | 567 | ||||||||
| Adjusted EBIT as a percentage of sales | 7.0% | 7.2% | 6.2% | 6.0% | 6.6% | 5.4% | -17.4% | 8.3% | 11.3% | 5.1% | 9.4% | 7.0% | 2.7% | 6.6% | ||||||||
| Seating Systems | ||||||||||||||||||||||
| Sales | 1,433 | 1,452 | 1,266 | 1,426 | 5,577 | 1,261 | 524 | 1,280 | 1,390 | 4,455 | 1,303 | 1,166 | 1,123 | 3,592 | ||||||||
| Adjusted EBIT | 94 | 83 | 56 | 79 | 312 | 40 | (84) | 66 | 85 | 107 | 55 | 26 | 22 | 103 | ||||||||
| Adjusted EBIT as a percentage of sales | 6.6% | 5.7% | 4.4% | 5.5% | 5.6% | 3.2% | -16.0% | 5.2% | 6.1% | 2.4% | 4.2% | 2.2% | 2.0% | 2.9% | ||||||||
| Complete Vehicles | ||||||||||||||||||||||
| Sales | 1,928 | 1,802 | 1,516 | 1,461 | 6,707 | 1,321 | 933 | 1,402 | 1,759 | 5,415 | 1,850 | 1,490 | 1,255 | 4,595 | ||||||||
| Adjusted EBIT | 28 | 43 | 29 | 44 | 144 | 50 | 44 | 70 | 110 | 274 | 80 | 79 | 30 | 189 | ||||||||
| Adjusted EBIT as a percentage of sales | 1.5% | 2.4% | 1.9% | 3.0% | 2.1% | 3.8% | 4.7% | 5.0% | 6.3% | 5.1% | 4.3% | 5.3% | 2.4% | 4.1% | ||||||||
| Corporate and other | ||||||||||||||||||||||
| Intercompany fees | (161) | (179) | (143) | (140) | (623) | (124) | (85) | (133) | (153) | (495) | (155) | (150) | (145) | (450) | ||||||||
| Adjusted EBIT | 19 | 9 | 0 | 15 | 43 | (21) | (19) | 25 | (2) | (17) | 11 | 22 | 12 | 45 | ||||||||
| Total | ||||||||||||||||||||||
| Sales | 10,591 | 10,126 | 9,319 | 9,395 | 39,431 | 8,657 | 4,293 | 9,129 | 10,568 | 32,647 | 10,179 | 9,034 | 7,919 | 27,132 | ||||||||
| Adjusted EBIT | 720 | 677 | 558 | 590 | 2,545 | 403 | (600) | 778 | 1,095 | 1,676 | 770 | 557 | 229 | 1,556 | ||||||||
| Adjusted EBIT as a percentage of sales | 6.8% | 6.7% | 6.0% | 6.3% | 6.5% | 4.7% | -14.0% | 8.5% | 10.4% | 5.1% | 7.6% | 6.2% | 2.9% | 5.7% | ||||||||
| Note 3: | CASH, CASH EQUIVALENTS AND RESTRICTED CASH EQUIVALENTS | |||||||||||||||||||||
| A reconciliation of Cash and cash equivalents and Restricted cash equivalents (included in prepaid expenses) to Total cash, cash equivalents and restricted cash equivalents is as follows: | ||||||||||||||||||||||
| 2019 | 2020 | 2021 | ||||||||||||||||||||
| 1st Q | 2nd Q | 3rd Q | 4th Q | 1st Q | 2nd Q | 3rd Q | 4th Q | 1st Q | 2nd Q | 3rd Q | ||||||||||||
| Cash and cash equivalents | (925) | (563) | (769) | (1,276) | (1,146) | (533) | (1,498) | (3,268) | (3,464) | (3,426) | (2,748) | |||||||||||
| Restricted cash equivalents included in prepaid expenses | (116) | (118) | (112) | (116) | (113) | (115) | (120) | (106) | - | - | - | |||||||||||
| Total cash, cash equivalents and restricted cash equivalents | (1,041) | (681) | (881) | (1,392) | (1,259) | (648) | (1,618) | (3,374) | (3,464) | (3,426) | (2,748) | |||||||||||
| Q3 2021 Financial Review of Magna International Inc. | Page 6 of 6 |
Exhibit 99.2
Q3 2021 Earnings Presentation November 5, 2021
Forward Looking Statements Q3 - 2021 EARNINGS - 05NOV21 2 Certain statements in this presentation constitute "forward - looking information" or "forward - looking statements" (collectively, "forward - looking statements") . Any such forward - looking statements are intended to provide information about management's current expectations and plans and may not be appropriate for other purposes . Forward - looking statements may include financial and other projections, as well as statements regarding our future plans, strategic 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", "aim", "forecast", "outlook", "project", "estimate", "target" and similar expressions suggesting future outcomes or events to identify forward - looking statements . The following table identifies the material forward - looking statements contained in this document, together with the material potential risks that we currently believe could cause actual results to differ materially from such forward - looking statements . Readers should also consider all of the risk factors which follow below the table : Material Forward - Looking Statement Material Potential Risks Related to Applicable Forward - Looking Statement Impact of the global semiconductor shortage Risks related to OEM actions in response to the semiconductor chip shortage such as unplanned shutdowns of production lines and/or plants ; reductions in OEM vehicle production plans ; and changes to OEM product mix . These risks include : lower sales ; production inefficiencies due to production lines being stopped/restarted unexpectedly based on OEMs' production schedules ; premium freight costs to expedite shipments ; and/or other unrecoverable costs ; skilled labour attraction/retention ; price increases from sub - suppliers that have been negatively impacted by production inefficiencies, premium freight costs and/or other costs related to the semiconductor chip shortage Impact of energy shortages Risks related to production shutdowns due to energy shortages/rationing . These risks include : lower sales ; higher energy costs ; premium freight costs to expedite shipments ; and/or other unrecoverable costs ; price increases from sub - suppliers that have been negatively impacted by production inefficiencies, premium freight costs and/or other costs related to production shutdowns resulting from energy rationing Impact of supply chain disruptions Risks related to supply chain disruptions, such as magnesium and silicon shortages, include : lower sales ; higher commodity costs ; production inefficiencies due to production lines being stopped/restarted unexpectedly ; premium freight costs to expedite shipments ; and/or other unrecoverable costs ; price increases from sub - suppliers that have been negatively impacted by production inefficiencies, premium freight costs and/or other costs related to the supply chain shortages Inflationary price increases Commodity cost volatility Increase in our cost structure as a result of our inability to offset inflationary price increases through continuous improvement actions, price increases, adjustments to our own operations or otherwise Price increases or surcharges from sub - suppliers in connection with inflationary pressures they face Skilled labour attraction/retention Light Vehicle Production Light vehicle sales levels Supply disruptions, including as a result of the current semiconductor chip shortage Production allocation decisions by OEMs Total Sales Segment Sales Economic impact of COVID - 19 on consumer confidence Supply disruptions, including as a result of a semiconductor chip shortage currently being experienced in the industry Global energy shortages Elevated level of inflation Concentration of sales with six customers Shifts in market shares among vehicles or vehicle segments Shifts in consumer "take rates" for products we sell Adjusted EBIT Margin Segment Adjusted EBIT Margin Net Income Attributable to Magna Same risks as for Total Sales and Segment Sales above Operational underperformance Higher costs incurred to mitigate the risk of supply disruptions, including : materials price increases ; higher - priced substitute supplies ; premium freight costs to expedite shipments ; production inefficiencies due to production lines being stopped/restarted unexpectedly based on customers' production schedules ; other unrecoverable costs ; and price increases from sub - suppliers that have been negatively impacted by production inefficiencies Price concessions Commodity cost volatility Higher labour costs Tax risks Equity Income Same risks as Adjusted EBIT Margin/Segment Adjusted EBIT Margin/Net Income Attributable to Magna above Risks related to conducting business through joint ventures Free Cash Flow Same risks as for Total Sales/Segment Sales, and Adjusted EBIT Margin/Segment Adjusted EBIT Margin/Net Income Attributable to Magna above
Forward Looking Statements (cont.) Q3 - 2021 EARNINGS - 05NOV21 3 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 . While we believe we have a reasonable basis for making any such forward - looking statements, they are not a guarantee of future performance or outcomes . In addition to the factors in the table above, whether actual results and developments 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, including, without limitation : Risks Related to the Automotive Industry economic cyclicality; regional production volume declines, including as a result of the COVID - 19 pandemic, semiconductor shortage and energy shortages, including in China; intense competition; potential restrictions on free trade; trade disputes/tariffs; Customer and Supplier Related Risks concentration of sales with six customers; emergence of potentially disruptive EV OEMs, including risks related to limited revenues/operating history of new OEM entrants; OEM consolidation and cooperation; shifts in market shares among vehicles or vehicle segments; shifts in consumer "take rates" for products we sell; quarterly sales fluctuations; potential loss of any material purchase orders; a deterioration in the financial condition of our supply base, including as a result of the COVID - 19 pandemic; Manufacturing Operational Risks product and new facility launch risks; operational underperformance; restructuring costs; impairment charges; labour disruptions; COVID - 19 shutdowns; supply disruptions, including with respect to semiconductor chips; higher costs to mitigate supply disruptions; climate change risks; attraction/retention of skilled labour and leadership succession; IT Security/Cybersecurity Risk IT/Cybersecurity breach; Product Cybersecurity breach; Pricing Risks pricing risk following time of quote; price concessions; commodity cost volatility; declines in scrap steel/aluminum prices; Warranty / Recall Risks costs related to repair or replacement of defective products, including due to a recall; warranty or recall costs that exceed warranty provision or insurance coverage limits; product liability claims; Acquisition Risks competition for strategic acquisition targets; inherent merger and acquisition risks; acquisition integration risk; Other Business Risks risks related to conducting business through joint ventures; our ability to consistently develop and commercialize innovative products or processes; our changing business risk profile as a result of increased investment in electrification and autonomous driving, including: higher R&D and engineering costs, and challenges in quoting for profitable returns on products for which we may not have significant quoting experience; risks of conducting business in foreign markets; fluctuations in relative currency values; tax risks; reduced financial flexibility as a result of an economic shock; changes in credit ratings assigned to us; Legal, Regulatory and Other Risks antitrust risk; legal claims and/or regulatory actions against us; and changes in laws and regulations, including those related to vehicle emissions or made as a result of the COVID - 19 pandemic. In evaluating forward - looking statements or forward - looking information, we caution readers not to place undue reliance on any forward - looking statement . Additionally, 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, including the risks, assumptions and uncertainties above which are : discussed under the "Industry Trends and Risks" heading of our Management's Discussion and Analysis ; and set out in our Annual Information Form filed with securities commissions in Canada, our annual report on Form 40 - F filed with the United States Securities and Exchange Commission, and subsequent filings . Readers should also consider discussion of our risk mitigation activities with respect to certain risk factors, which can be also found in our Annual Information Form .
Q3 - 2021 EARNINGS - 05NOV21 4 Reminders All amounts are in U.S. Dollars Today's discussion excludes the impact of other expense (income), net ("Unusual Items") "Organic", in the context of sales movements, means "excluding the impact of foreign exchange, acquisitions and divestitures"
5 Key Messages Q3 - 2021 EARNINGS - 05NOV21 Solid Q3 performance in an increasingly challenged industry environment 1 Challenges expected to continue to a lesser degree in Q4 2 Strategic portfolio positions us for sales growth over market and strong free cash flow 3 Well - positioned to capture growing market opportunities with systems approach and unique complete vehicle capabilities 4
Current Market Dynamics Q3 - 2021 EARNINGS - 05NOV21 6 Auto Demand Environment Remains Strong HEADWINDS TAILWINDS Low Dealer Inventory Levels OEMs Indications Point to Strong Future Production Continued Semiconductor Chip Supply Constraints Unpredictable OEM Production Schedules Causing Operational Inefficiencies Inflationary Input Cost Pressures
CONSOLIDATED SALES $7.9B Q3 2021 Performance Highlights Q3 - 2021 EARNINGS - 05NOV21 7 ADJUSTED EBIT MARGIN % 2.9% ADJUSTED DILUTED EPS $0.56 FREE CASH FLOW 1 ($25M) 1 Free Cash Flow (FCF) is Cash from Operating Activities plus proceeds from normal course dispositions of fixed and other asset s p lus settlement of long - term receivable from a non - consolidated joint venture minus capital spending minus investment in other assets Managing Through a Challenging Operating Environment
8 Q3 - 2021 EARNINGS - 05NOV21 Customer and Industry Recognition
FreeForm Q3 - 2021 EARNINGS - 05NOV21 9 Provides Endless Design Possibilities • Currently launching technology on complete seat program for global OEM • Three other programs also awarded, including from new entrant OEM, that launch in 2022 • Significant additional customer interest Program Award
MEZZO Panel Q3 - 2021 EARNINGS - 05NOV21 10 Changing the Face of Electric Vehicles • First - to - market, large - format decorated front integration panel • Integrates ADAS sensors and lighting • Features hidden - until - lit functionality • Awarded program using this core technology • Enables design distinction for EV front ends Program Award
Q3 - 2021 EARNINGS - 05NOV21 11 Program Award Bolsters Magna's Leading Camera Position Supports Magna's Growth in Electrification Advanced Front Cameras • Awarded new business with European - based global OEM • Will utilize latest generation camera technology • Based on platform that already has applications in production Program Award NEW PIC? Dual - Clutch Transmissions • Awarded family of transmissions from Daimler, including traditional (DCT) and hybrid (HDT) launching in 2025 • Represents third high - volume HDT program award • Beginning to launch HDTs this quarter for two additional global customers Program Awards
12 Management Updates Q3 - 2021 EARNINGS - 05NOV21 Vince Galifi appointed as President Pat McCann promoted to EVP & CFO Anton Mayer promoted to EVP & CTO
Q3 2021 Financial Results Q3 - 2021 EARNINGS - 05NOV21 13 Reflects Current Industry Environment Adjusted EBIT ($Millions) $778 $229 $0 $100 $200 $300 $400 $500 $600 $700 $800 Q3'20 Q3'21 Consolidated Sales ($Billions) $9.1 $7.9 0.0 0.1 0.1 0.1 0.1 0.1 0.1 0.1 $0.0 $1.0 $2.0 $3.0 $4.0 $5.0 $6.0 $7.0 $8.0 $9.0 $10.0 Q3'20 Q3'21 Adjusted EPS ($) $1.95 $0.56 0.0 0.1 0.1 0.1 0.1 0.1 0.1 0.1 $0.00 $0.50 $1.00 $1.50 $2.00 Q3'20 Q3'21
14 Q3 2021 vs Q2 2021 (Sequential) Financial Results Q3 - 2021 EARNINGS - 05NOV21 Key Factors • Lower global light vehicle production, substantially due to semiconductor chip shortage ( - ) • Negative program mix ( - ) • Foreign currency translation: $90M ( - ) • Sale of three loss - making Exteriors facilities ( - ) Q3'21 vs Q2'21 Production Global - 6% North America - 1% Europe - 18% China - 2% Magna Weighted - 6% Consolidated Sales ($Billions) - 12% $9.0 $7.9 0.0 0.1 0.1 0.1 0.1 0.1 0.1 0.1 $0.0 $1.0 $2.0 $3.0 $4.0 $5.0 $6.0 $7.0 $8.0 $9.0 $10.0 Q2'21 Q3'21
15 Q3 2021 vs Q2 2021 (Sequential) Financial Results Q3 - 2021 EARNINGS - 05NOV21 Key Factors • Lower earnings on $1.1B decline in sales ( - ) • Production inefficiencies driven by unpredictable OEM production schedules ( - ) • Increased production costs, including freight and commodities ( - ) • $45 million provision on engineering service contracts with automotive unit of Evergrande ( - ) • Favourable value - added tax settlement in Brazil in Q2 ( - ) • Lower profit sharing and incentive comp (+) • Lower launch costs (+) • Sale of three loss - making Exteriors facilities (+) Adjusted EBIT & Margin ($Millions) - 59% $557 $229 6.2% 2.9% 0.0 0.0 0.1 0.1 0.2 $0 $100 $200 $300 $400 $500 $600 $700 $800 Q2'21 Q3'21
16 Q3 2021 Cash Flow and Investment Activities Q3 - 2021 EARNINGS - 05NOV21 Free Cash Flow 1 ($Millions) $1,345 $178 - $25 0.0 0.1 0.1 0.1 0.1 0.1 0.1 0.1 -$250 -$50 $150 $350 $550 $750 $950 $1,150 $1,350 Q3'20 Q2'21 Q3'21 OTHER USES OF CASH Acquisition of 49% interest in LG - Magna JV $454M Public and Private Equity Investments $3M Funding Provided on Sale of Exter . Facilities $41M Dividends ($0.43/share) $130M Cash from Operations Before Changes in Operating Assets & Liabilities $532M Changes in Operating Assets & Liabilities ($132M) Cash from Operations $400M Fixed Asset Additions ($334M) Increase in Investments, Other Assets and Intangible Assets ($101M) Proceeds from Dispositions $10M Free Cash Flow 1 ($25M) 1 Free Cash Flow (FCF) is Cash from Operating Activities plus proceeds from normal course dispositions of fixed and other asset s p lus settlement of long - term receivable from a non - consolidated joint venture minus capital spending minus investment in other assets
Continued Financial Flexibility Q3 - 2021 EARNINGS - 05NOV21 17 ($Billions, unless otherwise noted) Estimated Future LTD Principal Repayments (12/31/20) ($Millions) $129 $365 $722 $760 $647 $1,479 2021 2022 2023 2024 2025 Thereafter LEVERAGE RATIO (LTM, 9/30/21) Adjusted Debt $5.9 Adjusted EBITDA $4.3 Adjusted Debt / Adjusted EBITDA (Q3 2021) 1.38x TOTAL LIQUIDITY (9/30/21) Cash $2.7 Available Term & Operating Lines of Credit $3.5 Total Liquidity $6.2 Investment - grade ratings from Moody's, S&P, DBRS Board Approved New Normal Course Issuer Bid
2021 Outlook Assumptions Q3 - 2021 EARNINGS - 05NOV21 18 2020 AUGUST NOVEMBER Light Vehicle Production (millions of units) • North America 13.0 14.4 13.4 • Europe 16.5 18.1 16.5 • China 23.5 24.7 23.0 Foreign Exchange Rates • 1 CDN dollar equals USD 0.746 0.801 0.800 • 1 EURO equals USD 1.141 1.193 1.187 • 1 RMB equals USD 0.145 0.155 0.155 Changed from previous Outlook
2021 Outlook Q3 - 2021 EARNINGS - 05NOV21 19 2020 AUGUST NOVEMBER Sales: • Body Exteriors & Structures $15.3 – $15.9 $14.1 – $14.5 • Power & Vision $11.8 – $12.2 $11.2 – $11.5 • Seating Systems $5.1 – $5.4 $4.6 – $4.8 • Complete Vehicles $6.3 – $6.6 $6.0 – $6.2 Total Sales $32.6 $38.0 – $39.5 $35.4 – $36.4 Adjusted EBIT Margin % 1 5.1% 7.0% – 7.4% 5.1% – 5.4% Equity Income $189M $115M – $145M $120M – $145M Interest Expense $86M ~80M ~80M Income Tax Rate 2 25.7% ~23% ~21% Net Income Attributable to Magna 3 $1.186 $2.0 – $2.2 $1.35 – $1.45 Capital Spending $1.145 ~$1.6 ~$1.5 1 Adjusted EBIT Margin is the ratio of Adjusted EBIT to Total Sales 2 The Income Tax Rate has been calculated using Adjusted EBIT and is based on current tax legislation 3 Net Income Attributable to Magna represents Net Income excluding Other expense (income), net Changed from previous Outlook ($Billions, unless otherwise noted)
2021 Segment Adjusted EBIT Margin Q3 - 2021 EARNINGS - 05NOV21 20 2020 August 2021 Outlook November 2021 Outlook BODY EXTERIORS & STRUCTURES 6.0% 8.0 - 8.5% 5.4 - 5.7% SEATING SYSTEMS 2.4% 4.5 - 5.0% 2.0 - 2.3% POWER & VISION 5.1% 7.3 - 7.8% 6.1 - 6.4% COMPLETE VEHICLES 5.1% 4.5 - 5.0% 4.1 - 4.4%
21 Free Cash Flow 1 Expectations Q3 - 2021 EARNINGS - 05NOV21 2021 ($Billions) $0.00 $0.20 $0.40 $0.60 $0.80 $1.00 $1.20 $1.40 $1.60 $1.80 $2.00 $1.6 - $1.8 ~$1 August 2021 Outlook November 2021 Outlook 1 Free Cash Flow (FCF) is Cash from Operating Activities plus proceeds from normal course dispositions of fixed and other asset s p lus settlement of long - term receivable from a non - consolidated joint venture minus capital spending minus investment in other assets • Significant reduction in light vehicle production assumptions • Lower earnings on decline in sales • Production inefficiencies • Increased production costs • Higher working capital levels
22 IN SUMMARY Solid Q3 Performance in an Increasingly Challenged Industry Environment Q3 - 2021 EARNINGS - 05NOV21 Managing through volatile production environment and inflationary pressures Continuing to win business with our technology portfolio Positioned to support anticipated strong recovery of vehicle production Investing for further future growth
Q3 - 2021 EARNINGS - 05NOV21 23 Appendix
Q3 2021 Reconciliation of Reported Results Q3 - 2021 EARNINGS - 05NOV21 24 REPORTED OTHER EXPENSE, NET EXCL. OTHER EXPENSE, NET Income Before Income Taxes $ 27 $ 180 $ 207 % of Sales 0.3% 2.6% Income Tax Expense $ 10 $ 21 $ 31 % of Pretax 37.0% 15.0% Income Attributable to Non - Controlling Interests $ (6) $ - $ (6) Net Income Attributable to Magna $ 11 $ 159 $ 170 Earnings Per Share $ 0.04 $ 0.52 $ 0.56 Excluding Other Expense (Income), Net $Millions – except for share figures
Q3 2020 Reconciliation of Reported Results Q3 - 2021 EARNINGS - 05NOV21 25 REPORTED OTHER EXPENSE, NET EXCL. OTHER EXPENSE, NET Income Before Income Taxes $ 436 $ 316 $ 752 % of Sales 4.8% 8.2% Income Tax Expense $ 109 $ 61 $ 170 % of Pretax 25.0% 22.6% Loss Attributable to Non - Controlling Interests $ 78 $ (75) $ 3 Net Income Attributable to Magna $ 405 $ 180 $ 585 Earnings Per Share $ 1.35 $ 0.60 $ 1.95 Excluding Other Expense (Income), Net $Millions – except for share figures
Sales Performance vs Market 26 REPORTED ORGANIC 1 PERFORMANCE VS WEIGHTED GLOBAL PRODUCTION (Weighted GoM) Body Exteriors & Structures (17%) (16%) 2% Power & Vision (8%) (17%) 1% Seating Systems (12%) (21%) (3%) Complete Vehicles (10%) (11%) 7% TOTAL SALES (13%) (17%) 1% Unweighted Production Growth (12%) Weighted Production Growth 2 (18%) 1 Organic Sales represents sales excluding acquisitions net of divestitures and FX movements 2 Calculated by applying Magna geographic sales weighting, excluding Complete Vehicles, to regional production Q3 - 2021 EARNINGS - 05NOV21 Q3 2021 vs Q3 2020
Sales Performance vs Market 27 REPORTED ORGANIC 1 PERFORMANCE VS WEIGHTED GLOBAL PRODUCTION (Weighted GoM) Body Exteriors & Structures 19% 16% 2% Power & Vision 30% 17% 3% Seating Systems 17% 6% (8%) Complete Vehicles 26% 18% 4% TOTAL SALES 23% 15% 1% Unweighted Production Growth 16% Weighted Production Growth 2 14% 1 Organic Sales represents sales excluding acquisitions net of divestitures and FX movements 2 Calculated by applying Magna geographic sales weighting, excluding Complete Vehicles, to regional production Q3 - 2021 EARNINGS - 05NOV21 2021 YTD vs 2020
Geographic Sales 28 Q3 2020 Q3 2021 NORTH AMERICA $4.7B $3.9B PRODUCTION (19%) EUROPE $3.8B $3.1B PRODUCTION (20%) ASIA $592M $927M PRODUCTION (8%) (China (12%)) REST OF WORLD $100M $96M S.A. PRODUCTION (11%) Q3 2021 vs Q3 2020 Q3 - 2021 EARNINGS - 05NOV21
2023 Financial Outlook 1 Q3 - 2021 EARNINGS - 05NOV21 29 1 We have not updated 2023 Outlook ranges from our February 19 th , 2021 press release. 2 Adjusted EBIT Margin is the ratio of Adjusted EBIT to Total Sales Assumptions Light Vehicle Production (millions of units) • North America 16.3 • Europe 20.1 • China 26.0 Foreign Exchange Rates • 1 CDN dollar equals USD 0.770 • 1 EURO equals USD 1.210 • 1 RMB equals USD 0.153 $Billions, Unless Otherwise Noted Sales • Body Exteriors & Structures $18.0 – $19.0 • Power & Vision $13.0 – $13.6 • Seating Systems $6.1 – $6.5 • Complete Vehicles $6.3 – $6.8 Total Sales $43.0 – $45.5 • Adjusted EBIT Margin % 2 8.1% – 8.6% • Equity Income $155M – $200M
Capital Allocation Principles Q3 - 2021 EARNINGS - 05NOV21 30 Disciplined, Profitable Approach to Growth Remains a Foundational Principle Q3 2021 Maintain Strong Balance Sheet • Preserve liquidity and high investment grade credit ratings - Adj. debt / Adj. EBITDA ratio between 1.0 - 1.5x LTM 09/30/21 1.38x • Maintain flexibility to invest for growth Invest for Growth • Organic and inorganic opportunities Fixed asset additions Other investments Acquisition of JV interest Public + Private Equity Inv. $334M $101M $454M $3M • Innovation Return Capital to Shareholders • Continued dividend growth over time $130M • Repurchase shares with excess liquidity
($Millions) Leverage Ratio Q3 - 2021 EARNINGS - 05NOV21 31 LTM EBITDA $ 4,136 Lease Adjustment $ 320 Other $ (163) Adjusted EBITDA $ 4,293 Debt per Balance Sheet $ 4,009 Lease Liability per Balance Sheet $ 1,707 Other $ 218 Adjusted Debt $ 5,934 Adjusted Debt / Adjusted EBITDA (Q3 2021) 1.38x
BODY EXTERIORS & STRUCTURES Segment Financial Performance Q3 - 2021 EARNINGS - 05NOV21 32 • Reduced earnings on lower sales ( - ) • Negative impact of production disruptions ( - ) • Higher production costs, including freight ( - ) • Benefit of COVID - 19 related government employee support programs in 2020 ( - ) • Higher new facility costs ( - ) • Net customer price concessions ( - ) • Lower employee profit sharing and incentive comp (+) • Transactional FX gains in 2021 compared to losses in 2020 (+) • Sale of three loss - making Exteriors facilities (+) • Lower global light vehicle production, including impact of semiconductor chip shortage ( - ) • Sale of three loss - making Exteriors facilities: $99M ( - ) • End of production of certain programs ( - ) • Net customer price concessions ( - ) • Launch of new programs (+) • Foreign currency translation: $52M (+) $3.9 $3.2 Q3'20 Q3'21 Sales ($Billions) - 17% Adjusted EBIT ($Millions) $390 $98 0.0 0.1 0.1 0.1 0.1 0.1 0.1 0.1 $0 $50 $100 $150 $200 $250 $300 $350 $400 $450 Q3'20 Q3'21
• Lower global light vehicle production, including impact of semiconductor chip shortage ( - ) • Net customer price concessions ( - ) • Business combinations during 2021: $189M (+) • Foreign currency translation: $44M (+) • Launch of new programs (+) POWER & VISION Segment Financial Performance Q3 - 2021 EARNINGS - 05NOV21 33 • Reduced earnings on lower sales ( - ) • Negative impact of production disruptions ( - ) • Higher production costs, including freight and commodities ( - ) • Higher electrification spending ( - ) • Benefit of COVID - 19 related government employee support programs in 2020 ( - ) • Net customer price concessions ( - ) • Lower net warranty costs: $34M (+) • Lower net application engineering costs in ADAS (+) $2.7 $2.5 Q3'20 Q3'21 $227 $67 0.0 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 $0 $50 $100 $150 $200 $250 Q3'20 Q3'21 Sales ($Billions) - 8% Adjusted EBIT ($Millions)
• Lower global light vehicle production, including impact of semiconductor chip shortage ( - ) • Net customer price concessions ( - ) • Launch of new programs (+) • Acquisition of Hongli in China: $102M (+) • Foreign currency translation: $8M (+) SEATING SYSTEMS Segment Financial Performance Q3 - 2021 EARNINGS - 05NOV21 34 • Reduced earnings on lower sales ( - ) • Negative impact of production disruptions ( - ) • Higher production costs, including freight ( - ) • Benefit of COVID - 19 related government employee support programs in 2020 ( - ) • Net customer price concessions ( - ) • Cost savings and operational efficiencies including as a result of implemented restructuring actions (+) • Productivity and efficiency improvements at certain underperforming facilities (+) $1.3 $1.1 Q3'20 Q3'21 $66 $22 0.0 0.0 0.0 0.0 0.0 0.1 0.1 0.1 Q3'20 Q3'21 Sales ($Billions) - 12% Adjusted EBIT ($Millions)
• Lower vehicle assembly volumes, including impact of semiconductor chip shortage ( - 4K units) • Higher euro: $13M (+) COMPLETE VEHICLES Segment Financial Performance Q3 - 2021 EARNINGS - 05NOV21 35 • $45M provision on engineering service contracts with the automotive unit of Evergrande ( - ) • Lower earnings due to lower assembly volumes, net of contractual fixed cost recoveries on certain programs ( - ) • Net customer price concessions ( - ) • Higher margins on engineering programs (+) $1.4 $1.3 Q3'20 Q3'21 $70 $30 $0 $10 $20 $30 $40 $50 $60 $70 $80 $90 Q3'20 Q3'21 Sales ($Billions) - 10% Adjusted EBIT ($Millions)
Q3 - 2021 EARNINGS - 05NOV21 36 END
Exhibit 99.3
REFINITIV STREETEVENTS EDITED TRANSCRIPT MG.TO - Q3 2021 Magna International Inc Earnings Call EVENT DATE/TIME: NOVEMBER 05, 2021 / 12:00PM GMT REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us ©2021 Refinitiv. All rights reserved. Republication or redistribution of Refinitiv content, including by framing or similar means, is prohibited without the prior written consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies.
NOVEMBER 05, 2021 / 12:00PM, MG.TO - Q3 2021 Magna International Inc Earnings Call CORPORATE PARTICIPANTS Louis Tonelli Magna International Inc. - VP of IR Seetarama Swamy Kotagiri Magna International Inc. - CEO, President & Director Vincent Joseph Galifi Magna International Inc. - Executive VP & CFO CONFERENCE CALL PARTICIPANTS Dan Meir Levy Crédit Suisse AG, Research Division - Director & Senior Equity Research Analyst Jason Flynn Stuhldreher Barclays Bank PLC, Research Division - Research Analyst John Joseph Murphy BofA Securities, Research Division - MD and Lead United States Auto Analyst Kevin Chiang CIBC Capital Markets, Research Division - Executive Director of Institutional Equity Research & Analyst Mark Neville Scotiabank Global Banking and Markets, Research Division - Analyst Mark Trevor Delaney Goldman Sachs Group, Inc., Research Division - Equity Analyst Peter Sklar BMO Capital Markets Equity Research - Analyst Shreyas Patil Wolfe Research, LLC - Research Analyst PRESENTATION Operator Greetings, and welcome to the Third Quarter 2021 Results . (Operator Instructions) As a reminder, this conference will be recorded today, Friday, November 5 , 2021 . Now I would like to turn the conference over to Louis Tonelli, VP, Investor Relations. Please go right ahead. Louis Tonelli - Magna International Inc . - VP of IR Thanks, Tommy . Hello, everyone, and welcome to our third quarter ' 21 results conference call . Joining me today are Swamy Kotagiri and Vince Galifi . Yesterday, our Board of Directors met and approved our results for the third quarter . We issued a press release this morning outlining our results . You'll find the press release, today's conference call webcast, the slide presentation to go along with the call and our updated quarterly financial review all in the Investor Relations section of our website at magna . com . Before we get started, just as a reminder, the discussion today may contain forward - looking information or forward - looking statements within the meaning of applicable securities legislation . Such statements involve certain risks, assumptions and uncertainties, which may cause the company's actual or future results and performance to be materially different from those expressed or implied in these statements . Please refer to today's press release for a complete description of our safe harbor disclaimer . As we review financial information today, please note that all figures are discussed are in U . S . dollars . We've included in the appendix a reconciliation of certain key financial statement lines for Q 3 ' 21 and Q 3 2020 between reported results and results excluding unusual items . The quarterly earnings discussion today excludes the impact of the unusual items . Please note that when we use the term organic in the context of sales movements, we mean excluding the impact of foreign exchange, acquisitions and divestitures . And with that, I'll pass it over to Swamy . 2 REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us ©2021 Refinitiv. All rights reserved. Republication or redistribution of Refinitiv content, including by framing or similar means, is prohibited without the prior written consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies.
Seetarama Swamy Kotagiri - Magna International Inc. - CEO, President & Director Thanks, Louis, and good morning, everyone. We are happy to be here to provide you with a general update on Magna and also our Q3 results. The industry pressures we have been experiencing through 2021 intensified in Q 3 , leading to a very volatile operating environment . All things considered ; we had a solid operating performance in the quarter . Production for the quarter was much lower than we had anticipated back in August, particularly in Europe . As a result, our sales came in well below our expectations . And this, together with a number of additional factors, negatively impacted our Q 3 earnings . The industry challenges are expected to continue this quarter, although to a lesser degree . We remain focused on managing our costs through this volatile production period . This includes ongoing activities to enhance operational excellence as well as fully realizing savings from restructuring initiatives announced last year . We are also not losing sight of investing for our future . Longer term, our portfolio positions us to continue driving sales growth over market as well as strong free cash flow generation . I will highlight a few awards in key technologies that will contribute to future growth, and we remain excited about Magna's future, particularly given our systems and complete vehicle know - how and approach . The key market dynamics that are affecting our industry currently are relatively well known . The ongoing global semiconductor chip shortage remains the most significant headwind to global industry production . There have been some signs of improvement recently . However, it remains to be seen when the industry will return to a more stable rate of production . As a result of the chip shortages, our customers' production schedules are unpredictable, causing labor and other operational inefficiencies at our facilities . On top of these factors, we have experienced inflationary cost increases in production inputs, including freight, commodities and, to a lesser degree, labor and energy costs . Market tailwinds are largely unchanged from last quarter . The industry continues to experience strong order demand that exceeds available supply . This has led to historically low dealer inventory levels in certain markets . These 2 factors, together with indications from OEMs that they intend to run strong production once additional semi chips are available, continues to point to a positive and sustained midterm production environment for auto suppliers assuming other factors don't hamper supply or demand . Despite our strong efforts to manage day - to - day, the challenging operating environment took its toll on our quarter . Consolidated sales were $ 7 . 9 billion, down 13 % year - over - year . EBIT margin declined to 2 . 9 % . Our adjusted EPS was $ 0 . 56 for the quarter . And free cash flow was slightly negative in Q 3 . Regardless of the short - term challenges, we remain confident in our underlying earnings power and cash flow generation capability that will create value over the longer term . Before I move on to talk about a few of our technologies and recent program awards, I would like to point out 2 recognitions received by Magna that we are very proud of . Magna was recently recognized as a top - performing global supplier at the 23 rd Annual Ford World Excellence Awards . This award is a testament to our team's commitment to foster trusted relationships with our customers . Strong relationships like this are fundamental to our mutual success in this transformative times . We were also just named to the Ford's world's best employers list for 2021 . This marks the fifth straight year of making this list a great accomplishment . In the past, we have highlighted the development of our FREEFORM seating technology, which provides OEMs with a wide variety of seat design possibilities . We are currently launching this technology on a complete seat program for a global OEM customer . We have also been awarded FREEFORM on 3 other programs including for a new entrant that are launching in 2022 . And the pipeline of interest remains strong in the technology from various customers . Recently, we have been showcasing our MezzoPanel technology a first - to - market, large - format, decorated front integration panel that we believe will change the face of electric vehicles . The front panel enables integrated ADAS and lighting and features hidden until late functionality . It's a good example of Magna's integration capabilities that enable us to provide unique products to our customers . We have been awarded a program from a European OEM using this core technology . Our MezzoPanel technology provides design distinction possibilities to OEMs for their front ends, something that is getting good traction with our customers . NOVEMBER 05, 2021 / 12:00PM, MG.TO - Q3 2021 Magna International Inc Earnings Call 3 REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us ©2021 Refinitiv. All rights reserved. Republication or redistribution of Refinitiv content, including by framing or similar means, is prohibited without the prior written consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies.
Lastly, we were awarded new business recently in a couple of important technology areas . We won business with Daimler on a family of transmissions for their next - generation compact and midsized vehicles launching in 2025 . This includes our traditional DCTs, which we have been producing for Daimler since 2018 as well as hybrid DCTs . It represents the third high - volume hybrid DCT program we have been awarded . We begin launching the other 2 programs this quarter . The shift to hybrid electric DCTs for such high - volume platforms provides long - term stability in our transmission business . It also allows us to continue to utilize our asset base while the transition to full EVs continues . This award supports our booked business and growth in powertrain electrification . You may recall that we are targeting over $ 2 billion in managed powertrain electrification sales by 2023 and over $ 4 billion by 2027 . We also won new front camera business with a European - based global OEM . The program will include our latest advanced camera technology . This award is based on a core platform of ours that has applications already in production, which allows us to leverage the technology investments we have been making in this area . The award further bolsters Magna's leading ADAS position in cameras and supports our above market expected sales growth in this emerging area . By now, many of you know that Qualcomm made a higher bid for Veoneer than the one we announced back in July . And as a result, Veoneer's Board agreed to move forward with Qualcomm . Although, this transaction was expected to accelerate our position in ADAS and provide for the scale, we remained disciplined on price based on our valuation . We have been investing in ADAS over the last number of years, and we have the building blocks in place to address the requirements for ADAS, namely sensor suite, compute and software capabilities . We will continue to invest internally as we have been . As always, we will consider external investments that would add to or complement our ADAS portfolio . We continue to expect a sales CAGR in our ADAS business of around 20 % from 2020 to 2023 and 15 % to 20 % out to 2027 . Lastly, as we work through our succession planning process, I'm pleased to announce that our Board of Directors have approved a few management changes that are effective January 1 , 2022 . Vince Galifi, our current CFO, has been appointed as President for Magna International . In this role, Vince will continue to support me on corporate strategy, capital markets, stakeholder relations and other matters . Pat McCann has been promoted to Executive Vice President and Chief Financial Officer, reporting to me . In his 22 - plus - year carrier at Magna, Pat has served in a variety of senior finance roles at Magna's corporate head office, including most recently as Senior Vice President, Finance . Pat also served as Vice President, Finance for Cosma, our largest operating unit between 2016 and 2019 . And Anton Mayer has been promoted to Executive Vice President and Chief Technology Officer, having most recently served as Executive Vice President, R&D . Anton has held various other roles in his 35 - plus years career at Magna . I'm very confident in each of these role changes together with the strength of Magna's overall management team . With that, I will hand it over to Vince to take you through the third quarter financials in more detail . Vince? Vincent Joseph Galifi - Magna International Inc . - Executive VP & CFO Thank you, Swamy, and good morning, everyone . I'll start with a detailed review of the quarter . As Swamy indicated earlier, the third quarter was a very challenging one for Magna's operations . However, I would echo Swamy's sentiment that we are proud of how our business managed in the face of such adversity in the quarter . Global light vehicle production declined 12 % in the third quarter, driven by year - over - year reductions of 19 % , 20 % and 12 % in North America, Europe and China, respectively . On a Magna - weighted basis, production declined 18 % in the third quarter of 2021 . Our consolidated sales were $ 7 . 9 billion compared to $ 9 . 1 billion in the third quarter of 2020 . Organic sales slightly outperformed weighted production in the quarter . As a result of the lower year - over - year sales, adjusted EBIT and EPS each declined from the third quarter of 2020 . NOVEMBER 05, 2021 / 12:00PM, MG.TO - Q3 2021 Magna International Inc Earnings Call 4 REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us ©2021 Refinitiv. All rights reserved. Republication or redistribution of Refinitiv content, including by framing or similar means, is prohibited without the prior written consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies.
As of last quarter, a more informative comparison is reviewing sequential results . Comparing Q 3 ' 21 to the second quarter of this year, global light vehicle production was down 6 % , driven principally by Europe and substantially due to the semiconductor shortage . This, together with negative program mix in North America and Europe, foreign currency translation and the disposition of 3 loss - making exteriors facilities, led to our sales being down 12 % sequentially . Each of our segments experienced sequential declines in sales with some segments impacted more than others . Our adjusted EBIT declined from $ 557 million in the second quarter of ' 21 to $ 229 million in Q 3 , and EBIT margin fell from 6 . 2 % in Q 2 to 2 . 9 % in Q 3 of 2021 , reflecting a higher - than - typical decremental margin . The adjusted EBIT decline reflected a number of factors : reduced earnings on the $ 1 . 1 billion in lower sales ; production inefficiencies, driven by the unpredictable production schedules of our customers ; increased inflationary costs for production inputs, including freight and commodities ; a $ 45 million provision on engineering service contracts with the automotive unit of Evergrande ; and a favorable value - added tax settlement in Brazil from the second quarter . These were partially offset by lower profit sharing and incentive compensation, lower launch costs and the positive impact of the sale of 3 loss - making exteriors facilities early in the quarter . I'm going to review our cash flows and investment activities at this point . During the third quarter of 2021 , we generated $ 532 million in cash from operations before changes in working capital and invested $ 132 million in working capital . Some of the working capital investment relates to higher - than - typical inventory on hand as a result of ongoing supply chain and customer disruptions . Investment activities in the quarter included $ 454 million to acquire our interest in the LG - Magna joint venture, $ 334 million in fixed assets, a $ 101 million increase in investments other assets and intangibles and $ 3 million in private equity investments . Under the terms of the sale of our 3 loss - making exteriors facilities, we provided the buyer with $ 41 million of funding which was an additional use of cash in the quarter . Free cash flow was negative $ 25 million in the third quarter . We also paid $ 130 million in dividends . Our adjusted debt to adjusted EBITDA stands at 1 . 38 x, and our liquidity remains strong at $ 6 . 2 billion at the end of the third quarter . We announced today that our Board approved, subject to approval by the Toronto and New York Stock Exchanges, a new normal course issuer bid to purchase up to $ 29 . 9 million of our common shares . This new bid will expire in November of ' 22 . Turning to our outlook . My comments will be consistent with the press release we issued last month . We have reduced our light vehicle production expectations in North America, Europe and China by 7 % , 9 % and 7 % , respectively . Note that there are some differences between our year - to - date actual light vehicle production numbers and those provided by IHS . However, our Q 4 volume estimates are aligned with the IHS mid - October update . We made some minor changes to our expectations for the Canadian dollar and euro in each case relative to the U . S . dollar . These currency changes have a negligible impact on sales and margin in our outlook . Based substantially on lower volume assumptions, we now expect our total sales to be in the range of $ 35 . 4 billion to $ 36 . 4 billion for 2021 , down from a range of $ 38 billion to $ 39 . 5 billion previously . We now expect our EBIT margin to be in the range of 5 . 1 % to 5 . 4 % for 2021 compared to 7 % to 7 . 4 % range previously . This is largely as a result of the decline in expected sales, the operating inefficiencies driven by unpredictable OEM production schedules, higher inflationary production input costs and the provision on engineering services with the automotive unit of Evergrande . We narrowed equity income range slightly and maintained our interest expense expectations . We reduced our expected -- our expectation for net income attributable to Magna reflecting the lower sales and margin . We also lowered our tax rate expectations, largely reflecting a change in the mix of earnings . And our capital spending was reduced slightly from our last outlook . In terms of segment margins, all segments were significantly impacted by the decline in sales and production inefficiencies driven by unpredictable OEM production schedules . In addition, the provision associated with Evergrande represented an additional significant item negatively impacting EBIT margin in our complete vehicle segment . We also reduced free cash flow expectations versus our August outlook, mainly as a result of our lower volume sales and earnings expectations . Keep in mind that compared to our initial outlook for 2021 , our sales expectations have declined almost $ 5 billion at the midpoint, reflecting reductions in vehicle productions exceptions of 16 % and 11 % in North America and Europe, respectively . NOVEMBER 05, 2021 / 12:00PM, MG.TO - Q3 2021 Magna International Inc Earnings Call 5 REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us ©2021 Refinitiv. All rights reserved. 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In addition, production inefficiencies, driven by unpredictable OEM schedules and inflationary cost pressures, have together resulted in a higher - than - typical decremental margin on the lower sales . Despite all this, we still expect to generate about $ 1 billion in free cash flow in 2021 . In summary, we had solid performance for Q 3 and an increasingly challenged industry environment . We managed through lower - than - expected volumes and unpredictable OEM production schedules, both due to the semi chip shortage as well as inflationary input cost pressures . We continue to win business with our portfolio of innovative technologies . We are investing for future further growth and we remain positioned to support the anticipated strong recovery of vehicle production once the industry disruptions subside . Thank you for your attention this morning . We would like -- we would be happy to answer your questions at this time . QUESTIONS AND ANSWERS Operator (Operator Instructions) And we'll proceed with our first question on the line, John Murphy of Bank of America Securities . John Joseph Murphy - BofA Securities, Research Division - MD and Lead United States Auto Analyst First off, congratulations to Vince, Pat and Anton on the promotions . We're looking forward to continuing to work with you guys . So congrats on that . Maybe just a first question here, Vince, as we think about 2022 , I know it's very early days to gauge what's going on . But you made one interesting comment about the sequential deterioration in mix for you from second quarter to third quarter . And there's sort of positives and negatives to thinking about mix going forward . But as you think forward to like the next 12 months as production ramps up, maybe a little bit next year, how do you think about sort of the major factors outside of volume including mix, raws and other input costs that hopefully become more normal? Vincent Joseph Galifi - Magna International Inc . - Executive VP & CFO Yes, John, thanks for your comments . As we think about what's happened in Q 2 and Q 3 and even in Q 4 , it's been -- it has been challenging . We expect it to continue to be a little bit rough in Q 4 . My own view is that, I think, we're kind of at the bottom in Q 3 and things should start to stabilize and get a little better as we move into ' 22 . And as we get to the end of ' 22 -- mid - to end of ' 22 , I think we should get back to kind of a normal type production environment . So as I look at our overall cost structure, I think some of the inefficiencies that we've been having with the start, stop of production, some of the inventory buildup that should all normalize, that should all go away . In terms of some of the inflationary impact on our -- some of our production costs, if you look at materials or you look at labor, in particular, energy, I got to believe that labor is going to be there . We'll deal with that going forward . I don't see that being a significant issue for us and commodity costs have bounced around . And with some of our resale programs, we should be able to manage through that . And energy just be an additional cost, which will have to again, deal with through some of our productivity improvements . But I'm confident that as we're moving forward, we should continue on the track of expanding margins . On the mix side, John, it's hard to tell . I mean it's -- we've had some positive mix I say earlier in the year . It's a little bit negative this year . We have experienced some growth over market . We did expect going into ' 21 that growth over market there was going to be some, but it wasn't going to be significant . But as we move on into ' 22 and ' 23 , we expect to accelerate our growth over market . Mix will have a positive or negative impact . It's NOVEMBER 05, 2021 / 12:00PM, MG.TO - Q3 2021 Magna International Inc Earnings Call 6 REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us ©2021 Refinitiv. All rights reserved. Republication or redistribution of Refinitiv content, including by framing or similar means, is prohibited without the prior written consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies.
too early to tell, John, right now, given our previous expectations, we haven't actually talked about ' 22 in the past . But then whether we're plus or minus, but certainly, I think things are going to get better compared to where they were in Q 3 this year . Seetarama Swamy Kotagiri - Magna International Inc . - CEO, President & Director Yes . If we just looking at mix and sequentially, GM had a tough quarter compared to what we -- where we were in Q 2 and the Germans and Europe, which make up a good chunk of our business underperformed the overall change . So that's kind of what we're talking about when we talk about mix there . John Joseph Murphy - BofA Securities, Research Division - MD and Lead United States Auto Analyst Got it . Okay . That's very helpful . Then just a second question around acquisitions, divestitures and the portfolio rebalance . I mean Veoneer has gone, but you stepped up on the LG JV and took them out . I'm just curious, Vince, as you look at the opportunity set, and this is for Swamy too as well, you're going to have some room to make acquisitions over time, whether it'd be small or larger . What is the continued focus there? What are the -- what should we think about it as targets as far as size, region, customer or product sets? Vincent Joseph Galifi - Magna International Inc . - Executive VP & CFO John, this is Vince . I'm going to turn it over to Swamy afterwards . Just -- I just wanted to kind of point out that our overall strategy on capital allocation has been consistent and it continues to be intact . And that is, obviously, we want to generate good profits and the most amount of cash that we can from our operations . And what we want to do with that is the # 1 priority, invest in the business organically and inorganically, pay dividend that grows over time . And to the extent that we're in our target leverage range is -- and we have excess capital, return that to shareholders . So that's kind of completely intact . And from an investment standpoint inorganically, we've always talked about transactions that at or complement to our technology base, whether that's in one region of the world or another region of the world, one customer or another customer, I think we're not really worried about where it is as long as it advances our overall positioning . Swamy, if you wanted to add something to that . Seetarama Swamy Kotagiri - Magna International Inc . - CEO, President & Director No, I think you covered it well, Vince . I think we are not focused on the size . We are just strategically looking at augmenting either our footprint or supporting our customer base or augmenting our product portfolio . That is -- has always been the rationale for looking at investments either internal or external, John . And I think that will continue as a normal process of business for us . John Joseph Murphy - BofA Securities, Research Division - MD and Lead United States Auto Analyst Okay . And then just lastly, real quick on Fisker and the contract manufacturing . Just curious from your side, how is that progressing? How much more is this becoming more of a Magna car over time as you get closer to SOP and at the end of next year? Are you winning content there? And what does that program mean maybe financially or also sort of from a banner of you can actually do this and help other startups? Are you getting other interest coming in from startups or even developed or existing customers? Seetarama Swamy Kotagiri - Magna International Inc . - CEO, President & Director So John, I think the program is progressing well as we see it from our side . Obviously, the details have to be left out for Fisker to comment on just like any other customer . I would say, definitely, it would be an example to show both from a component and a system perspective as well as full vehicle engineering and manufacturing . But just like we have said in the past, there is continuing discussion with various customers, whether it be NOVEMBER 05, 2021 / 12:00PM, MG.TO - Q3 2021 Magna International Inc Earnings Call 7 REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us ©2021 Refinitiv. All rights reserved. Republication or redistribution of Refinitiv content, including by framing or similar means, is prohibited without the prior written consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies.
variants or new models and so on based on Magna's portfolio and capability, and we continue to have that conversation as we had in the past . I think from our perspective, it's progressing pretty well . Operator We'll get to our next question on the line from the line of Peter Sklar with BMO Capital Markets . Peter Sklar - BMO Capital Markets Equity Research - Analyst First, I wanted to ask you about -- just to go back and review your comments about vehicle electrification and the anticipated revenue stream for Magna . I think you said $ 2 billion of revenues by 2023 and $ 4 billion by 2027 . I just wanted to ask if you could review the major product areas that are going to comprise that revenue? Seetarama Swamy Kotagiri - Magna International Inc . - CEO, President & Director Peter, I think as we have said in the past, the -- when we talk about electrification, we are talking about the e - drive systems, obviously, but we also look at some of the products that are helping the transition . So our hybrid DCTs and products related to hybridization are part of it . And I think you got the numbers right ; we are looking towards a $ 2 billion mark by 2023 and getting to a $ 4 billion mark in 2027 . And as you've heard today, the HDT portfolio continues to gain traction . And we have talked about e - drive systems going into production in the past . We continue to have traction and interesting discussions on e - beam as well as more e - drive programs . Vincent Joseph Galifi - Magna International Inc . - Executive VP & CFO And Peter, I would just add, that's on a managed basis . So it's going to include items that we equity account for like LG, for instance, and it will also include HASCO . Peter Sklar - BMO Capital Markets Equity Research - Analyst Okay . And I'm trying to recall how many e - drive awards have you announced so far? I think -- is it 3 programs you've announced so far? Vincent Joseph Galifi - Magna International Inc . - Executive VP & CFO We've talked about the VW business that we have in HASCO . We have another global OEM that launches in a couple of years, also in HASCO . We haven't disclosed additional business that we have -- we do have additional programs, primary and secondary, but we haven't named a customer on that yet . Peter Sklar - BMO Capital Markets Equity Research - Analyst Okay . And then just a couple of other detailed questions . On the $ 45 million reserve for Evergrande, is that -- is that mean the receivable is fully reserved? Or is it possible that there could be further reserves down the road? Vincent Joseph Galifi - Magna International Inc . - Executive VP & CFO Yes, Peter, we've fully provided for our exposure . So there shouldn't be anything down the road . NOVEMBER 05, 2021 / 12:00PM, MG.TO - Q3 2021 Magna International Inc Earnings Call 8 REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us ©2021 Refinitiv. All rights reserved. Republication or redistribution of Refinitiv content, including by framing or similar means, is prohibited without the prior written consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies.
Peter Sklar - BMO Capital Markets Equity Research - Analyst Okay . And then lastly, the $ 41 million of funding that you provided to the to the purchaser of the exterior plants . Is that -- like is that a loan? Like does Magna anticipate recovery of that $ 41 million . Vincent Joseph Galifi - Magna International Inc . - Executive VP & CFO Peter, the $ 41 million, as you look at the cash outflows in that business is part of the, I guess, assets that we contributed into the 3 facilities before they were sold . So that money has been written off and forms part of the $ 75 million charge we took on the disposal of these operations . We consider that an unusual item . Just when you start -- Peter, just one thing as you get through the MD&A at some point, you'll find out that there's another funding obligation of $ 6 million down the road . And we actually did provide for that already in the $ 75 million charge . But obviously, we haven't funded that, so it hasn't hit cash flow yet . Peter Sklar - BMO Capital Markets Equity Research - Analyst Okay . And if I may just ask one more question . You've highlighted the -- on the seating, the FREEFORM technology . I'm not quite familiar with that technology . I'm wondering if you could just elaborate a little bit what the technology is? Seetarama Swamy Kotagiri - Magna International Inc . - CEO, President & Director I think, Peter, FREEFORM gives the selling flexibility . If you just look at the seat with the FREEFORM, the way you have it, it doesn't have what I would call the seams that you would normally see in a seat with the complexity that just gives you -- gives the OEMs the ability to get the form and the design aspects they need in there . And it just helps from even the consumer maintenance perspective, how easily they can, I guess, keep it clean and be able to work through it . That's fundamentally at a very base level . Obviously, there's a lot that goes into the process of making it and there seems to be a lot of interest given the design flexibility it's providing . Operator We'll go to our next question on the line from Mark Neville with Scotia Capital . Mark Neville - Scotiabank Global Banking and Markets, Research Division - Analyst First off, congratulations, Vince, Pat and, congrats as well . Maybe just first on inflationary pressures . I am thinking correct that you're covered on your materials, ex - resins, maybe just curious on freight? Vincent Joseph Galifi - Magna International Inc . - Executive VP & CFO Mark, can you just repeat that? I didn't hear all that . Mark Neville - Scotiabank Global Banking and Markets, Research Division - Analyst Sure . Just on like the inflationary pressures . Is my thinking correct you're largely covered on your materials ex - resin? And then I'm just curious with freight costs, if you need to absorb that if there's recourse? NOVEMBER 05, 2021 / 12:00PM, MG.TO - Q3 2021 Magna International Inc Earnings Call 9 REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us ©2021 Refinitiv. All rights reserved. Republication or redistribution of Refinitiv content, including by framing or similar means, is prohibited without the prior written consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies.
Vincent Joseph Galifi - Magna International Inc . - Executive VP & CFO Yes . Just in terms of kind of input costs, as you look at steel, we're in customer resale programs, that covers probably about 75 % of our overall buy . So that's essentially a flow through, but we do have some commodity exposure on the balance . On the resin side, which is probably our second largest commodity that we purchased, we're probably about 30 % , 25 % to 30 % on resale and we're seeing more resin going on resale . With some of the other commodities like aluminum, for example, there's pricing mechanism in there where we have periodic adjustments to price . But remember, as we're looking at some of these inflationary pressures and we have discussions with our customers on price reductions each and every year, some of that's taking into account . So you might not see a kind of a direct offset, but indirectly, it does impact -- indirectly, it's a way to engage some of the commodity cost pressure we're feeling . The other area that we're seeing some increases in Q 3 is on the semiconductor side . The shortage is there, and we're doing everything we can to make sure that we keep our customers up and running . But we're looking at ways to recover some or all of that through our customers . And with the supply disruptions is generally across the industry, we're seeing some temporary surcharges in some of the components we're buying . I expect that's going to go away as things start to normalize, but that certainly is impacting us in Q 3 and expect there will be some impact as well in Q 4 . Mark Neville - Scotiabank Global Banking and Markets, Research Division - Analyst Okay . Just in terms of labor, just curious how you're managing it now? I presume there's not a lot of flex you can do . And then in terms of these inefficiency costs of that caused by the change in the production schedules, is there any recourse there that you could take for your customers? Seetarama Swamy Kotagiri - Magna International Inc . - CEO, President & Director Mark, obviously, like you said, the inefficiencies and the unpredictable changes are causing us to not be able to flex in a planned way . That is the reason for it . We'll continue to have discussions with the customers, and we are having those conversations on some of the material costs and the inefficiencies cost because of the start stop, but that's part of the normal commercial discussions that we would have . Mark Neville - Scotiabank Global Banking and Markets, Research Division - Analyst Great . Maybe just one last question . Just on the NCIB, since you renewed it . I presume in the near term, don't plan to be too active, but maybe I'm wrong, but just thoughts on the NCIB sort of in this environment? Vincent Joseph Galifi - Magna International Inc . - Executive VP & CFO Yes, Mark, I guess the old density is expiring in November the 14 and we are generating cash . We expect to continue to generate cash and to the extent that, in our view, we have excess liquidity and within our leverage ratios, we'll be active in the market . When and how and how much, we'll move on, and you'll see our actions . I don't want to commit to something . But certainly, you've seen our strategy over the last 10 years and it's pretty consistent with what we want to do in ' 22 . Operator We get our next question on the line from Dan Levy with Credit Suisse . NOVEMBER 05, 2021 / 12:00PM, MG.TO - Q3 2021 Magna International Inc Earnings Call 10 REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us ©2021 Refinitiv. All rights reserved. Republication or redistribution of Refinitiv content, including by framing or similar means, is prohibited without the prior written consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies.
Dan Meir Levy - Crédit Suisse AG, Research Division - Director & Senior Equity Research Analyst And congratulations to Cynthia, Vince and Pat and Anton on the new responsibilities . Wanted to start just on incremental margins . And I know there's some moving pieces on cost and mix, but maybe you can just remind us more simply, just on a volume piece alone, what type of contribution margin or incremental margin should we expect on higher sales next year? Because I think we're really wondering how to sensitize your earnings if we get any form of production recovery next year? Vincent Joseph Galifi - Magna International Inc . - Executive VP & CFO Dan, thanks for your comments . Let me just start with kind of kind of where we were this year . And maybe I'll reference some of the comments that we made during COVID, where we did talk about kind of what we would typically expect during that period . Decrementals, you could back up some unusual items that are impacting us were high in Q 3 , higher than Q 2 . We expect some improvement as we move into Q 4 . But certainly, when we look at the start and stops, that's been the biggest impact to larger decrementals than we are accustomed to . What we talked about last year in Q 2 during the COVID shutdown and probably a good sort of benchmark thinking about our organization . What we said was our BES segment that you should be thinking about decrementals -- we talked about decrementals at that time of about -- or greater than 20 % for our BES group as well as our Power & Vision group, Seating around 20 % and Contract Vehicle Manufacturing less than 10 % . And when you kind of combined it back in Q 2 , that was about 22 % for Magna . There's just a lot of moving things though in Q 2 , a lot of moving things in Q 3 . I think mentioned earlier in our comments and Swamy's comments as well, Q 4 should get better, but it's not going to be where we want it to be . I think you got to move into ' 22 when you start to see normal decremental and incremental margins in our business . Dan Meir Levy - Crédit Suisse AG, Research Division - Director & Senior Equity Research Analyst And just to be clear, those figures are -- that's an all - in number that's just purely on volume and price? Vincent Joseph Galifi - Magna International Inc . - Executive VP & CFO It's all, it's volume and price that deals with back then in Q 2 would have dealt with whatever they would have been from an inflationary standpoint . And it would have excluded if we would have had a onetime warranty charge or a recovery or a value - added tax recovery that would have been excluded . So this is operational decrementals that I'm referring to backing us some of them all . Dan Meir Levy - Crédit Suisse AG, Research Division - Director & Senior Equity Research Analyst Got it . My second question is on what was your bid for Veoneer? So first, I think we know some of the normal hardware components are going to be put up for sale . Could those assets be even used to you? And then maybe we could just revisit the initial Veoneer rationale . What exactly was it that you were seeking? Was it just the core radar? Or was it really the software capability? And I guess what I'm getting at is what are the things that you still try to seek now to make the business better? Would you say that the current active safety business is subscale? Or was this acquisition really something that was meant to enhance it, but without it, it's still a fine business? Seetarama Swamy Kotagiri - Magna International Inc . - CEO, President & Director Dan, maybe I'll start off by saying the ADAS business that we have is really a good business, and we continue to win business, like I talked about today in one of the programs, and we see a good pipeline and traction in other -- with various customers and other programs . NOVEMBER 05, 2021 / 12:00PM, MG.TO - Q3 2021 Magna International Inc Earnings Call 11 REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us ©2021 Refinitiv. All rights reserved. Republication or redistribution of Refinitiv content, including by framing or similar means, is prohibited without the prior written consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies.
Now getting to the first part of your question, I think the rationale when we looked at it was a couple of things . One, from a augmenting some capability, we have a digital radar in place . We have won a program that would have -- we said like can't we get scale just generally across different areas . And when you look at the talent, as you know, not just in our industry but across augmenting talent along with experience always is a plus . That we continue to do that on an everyday basis, and we will continue doing going forward . We have, as I said, all the building blocks that are necessary in a sensor suite, whether it's front camera, rear cameras, surround view, the digital radar that I just talked about . We launched the LiDAR with a partner . We have the ability to do the fusion and the features . So this was really augmenting what we had even further . And like I said, we will continue to invest, and we are starting to see the result of our investment in core platform technologies as we win programs . And we'll continue to do that both internally as well as anything that might -- that we fully believe will add the right value to what we have . But again, to reassert that we have really good business and will continue progressing . Dan Meir Levy - Crédit Suisse AG, Research Division - Director & Senior Equity Research Analyst Do you think you have ample software capabilities? Seetarama Swamy Kotagiri - Magna International Inc . - CEO, President & Director That's a relative question, Dan . It's -- the software is such a important asset going forward . When we look at software, it is not only restricted to ADAS . We are looking at it from powertrain, from mechatronics and various other aspects that have software implications . So we have about 3 , 000 software engineers roughly, and that kind of flexes back and forth, and we continue to add in different areas of Magna . Operator We'll get our next question on the line from the line of Mark Delaney with Goldman Sachs . Mark Trevor Delaney - Goldman Sachs Group, Inc . , Research Division - Equity Analyst And also, let me add my congratulations for everyone on their new responsibilities . I was hoping to start on the JV with LG . Can you talk a bit more now that, that has been completed around the improved capabilities it's going to give Magna and what kind of feedback you're hearing from your customers? Seetarama Swamy Kotagiri - Magna International Inc . - CEO, President & Director I think the feedback from the customers has been very positive . Like we have said, the important rationale was to do vertical integration and have the manufacturing capabilities for the e - motors and the inverters in addition to what we had . We have the system knowledge and the integration and the software -- feature software capabilities . Adding this will further augment at a system level what we needed to have in this business . But not only that as some of the OEMs consider manufacturing and doing systems on their own, there is the e - motors, inverters or subsets of various things that we can participate in . It might start that way today . As this market evolves and get to system outsourcing on a -- when it gets to a larger take rates, we would already be at the table . And we are seeing those discussions happening . So it's very positive and we are excited about it . NOVEMBER 05, 2021 / 12:00PM, MG.TO - Q3 2021 Magna International Inc Earnings Call 12 REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us ©2021 Refinitiv. All rights reserved. Republication or redistribution of Refinitiv content, including by framing or similar means, is prohibited without the prior written consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies.
Mark Trevor Delaney - Goldman Sachs Group, Inc . , Research Division - Equity Analyst That's helpful . And my second question was on supply chain, and you gave some comments already around your expectations there and called out semiconductors, but we're hearing more on aluminum, in particular, in Europe, and it was mentioned in your press release as well . So maybe you could talk a bit more in detail around your expectations for supply chain going into next year? If you could touch specifically on aluminum in Europe and what you're seeing with that material, that would be helpful? Seetarama Swamy Kotagiri - Magna International Inc . - CEO, President & Director Yes . So I think the semis, we talked about the flexibility of the supply chain, and we are seeing a little bit of improvement as we believe, by the mid - next year . I think the grind of managing and going through will continue through the next year . But I would see a sense of normality towards the mid next year . But again, reaffirming that we have to continue to monitor and manage this . Now in the aluminum, it's really driven by the magnesium discussion that is happening around the industry, which becomes an important variable for aluminum supply . We are aware of it, clearly monitoring it . But at this point of time, we really don't see a short - term impact, creating any stoppages or so on, but definitely it's on our radar to monitor and manage . Operator We'll proceed to our next question on the line from the line of Kevin Chiang with CIBC Capital Markets . Kevin Chiang - CIBC Capital Markets, Research Division - Executive Director of Institutional Equity Research & Analyst I know there's been a lot of questions on the decremental margins, and we can see provided great color there . But if I can maybe ask it in a different way, like if you look at the high level of decrementals you saw, is there a way to kind of bucket it between the production inefficiencies you saw versus just a broad - based inflation in terms of the contribution to the, let's say, the excess decrementals you printed in the third quarter? Vincent Joseph Galifi - Magna International Inc . - Executive VP & CFO Kevin, so I guess if I maybe start by looking at decrementals sequentially probably -- or do you want to do sequentially or you want to do year - over - year because they are a little bit different? Maybe from a sequential standpoint, when I look through kind of the decrementals or look at just a role on EBIT and margin percent . There are some items that are impacting as we've talked about them, there was the the Evergrande provision that we took for $ 45 million . There was in Q 2 of this year, value - added tax settlement . We called it out last quarter was about $ 20 million . So that's quarter - over - quarter, that's going to have a negative impact on our margins . Then there's kind of launch costs, employee profit sharing and incentive comp, there's commercial settlements, just higher commodity costs, but that all kind of really, from my perspective, is a wash when you exclude the provision and that value - added tax settlement . And the rest is just what we're seeing operationally from a decremental standpoint . And so we backed up commodity costs when I look at decrementals, and I'm looking at some of our groups like BES, for example, decrementals once you back out some of the noise, 45 % sequentially ; current vision about 40 % and seats about 17 % . So again, significantly higher . And I attribute that really to start and stop inefficiencies, even just moving inventory around once, twice and 3 x that all adds to the cost . On a year - over - year basis, just couple of things I would point out . We did have the benefit last year in Q 3 of some COVID - 19 employee support programs . We called that out last year . We said that, that was a positive to margin of about 70 basis points . And I guess from -- again, from last year, back of the year - over - year, the Evergrande provision, you back up this employee support programs . Again, there's a lot of pluses and minuses of launch costs, new facility costs . They are kind of net to 0 . But decrementals, again, are 40 - ish percent for BES in Power & Vision, about 18 % for Seating . Again, I get to the start and stops that's impacting our operations . NOVEMBER 05, 2021 / 12:00PM, MG.TO - Q3 2021 Magna International Inc Earnings Call 13 REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us ©2021 Refinitiv. All rights reserved. Republication or redistribution of Refinitiv content, including by framing or similar means, is prohibited without the prior written consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies.
Kevin Chiang - CIBC Capital Markets, Research Division - Executive Director of Institutional Equity Research & Analyst That's helpful color . A second question here . I appreciate the unpredictability of the current environment . And I guess you mentioned, Vince, I think in your prepared remarks, maybe a line of sight to some normalization in the back half of next year . I did notice you have your 2023 financial outlook in your appendix . Just I guess just at a high level, is that still an achievable target for you? I guess just maybe based on some of your macro assumptions around the normalization of production . Is that still in your line of sight or maybe not? Vincent Joseph Galifi - Magna International Inc . - Executive VP & CFO Yes, Kevin, I think if you look at when we started the year and gave our outlook for ' 23 , it was based on a certain set of volume assumptions . And I think when you look at the more recent IHS volume assumptions, I think they're down from there . So that's going to -- that on its own is going to have an impact on revenue subject to new business coming on and mix and so on and exchange rates . Obviously, that's going to have an impact . When I look at that, we don't have a lot of control on volumes, unfortunately, we just got to go after the right programs where we think the programs are going to be successful . Where we have more control on directly is what we do from an operational standpoint . And I look at some of the actions we took in 2020 to right size the organization and the cost structure . And we still -- we still see the benefits of that in Q 3 this year, even though we got lower volumes . Again, I don't think any reason Swamy why as we get out to ' 23 that even a little over volume is that there's not a big uptick in operating margins as we talked about in ' 23 . I mean it may be a little different . We haven't gone through our business plan yet . I don't see any reason why we can't continue to see improvements in margins . Kevin Chiang - CIBC Capital Markets, Research Division - Executive Director of Institutional Equity Research & Analyst Okay . That's a great color . And again, congratulations to you Vince, Patrick and Anton and I'll leave it there . Operator We'll get to our next question on the line from the line of Rod Lache from Wolfe Research . Shreyas Patil - Wolfe Research, LLC - Research Analyst This is Shreyas Patil on for Rod . Just a couple of questions . I recall last quarter, focusing on the Seating business . I think initially, there was an expectation that outgrowth and then margins would improve with favorable mix . Obviously, the mix environment has not been as strong . But just as -- can you maybe talk a little bit about what are going to be some of the puts and takes to supporting more meaningful margin improvement and even outgrowth in that business? And are you still -- is that business even into Q 3 and Q 4 ? Are there still some launch costs that are kind of weighing it down? Seetarama Swamy Kotagiri - Magna International Inc . - CEO, President & Director Yes . I wouldn't -- I would say really mix has continued to be negative in Seating . We were expecting a little bit of improvement, and we haven't seen that, and we only start to see it in Q 4 . I think the business is still performing well . It's really the programs that they're on currently and how they're performing in the current environment . We're not going to get into next year, how that might look . But it's just certainly been a tough year for the top platforms, both in North America and in Europe for the Seating group . NOVEMBER 05, 2021 / 12:00PM, MG.TO - Q3 2021 Magna International Inc Earnings Call 14 REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us ©2021 Refinitiv. All rights reserved. Republication or redistribution of Refinitiv content, including by framing or similar means, is prohibited without the prior written consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies.
Vincent Joseph Galifi - Magna International Inc . - Executive VP & CFO And also, just keep in mind, I made some comments about sort of Magna consolidated in this Brazilian value - added tax settlement that we had in Q 2 last year -- or sorry, last quarter . Seating did benefit from part of that last quarter . So again when you look at the number sequentially, I'd say that Q 2 was higher than normal as a result of that settlement . Seetarama Swamy Kotagiri - Magna International Inc . - CEO, President & Director Yes . Seating historically has been a good performer in terms of outgrowth . It's just -- right now, it's just a function of just the negative mix that hurt them . Shreyas Patil - Wolfe Research, LLC - Research Analyst Okay . And then I'd imagine most folks were not aware that you had an arrangement with Evergrande . And I just think at a high level, I mean, there are a number of startup EV manufacturers in markets like China . How do you guys go about kind of assessing who to work with and who to allocate resources towards as you kind of -- as that HASCO business start -- expands? Seetarama Swamy Kotagiri - Magna International Inc . - CEO, President & Director Yes . I think as we look at any of the programs, there is a bunch of variables, obviously, when we make our decision . Our presence, our asset base, the product line that we are going to look at and to supply to -- obviously, there is no perfect answer to everything, but we have gone through that and we continue to do that . And depending upon the profile of the program, of the customer, of the region, we look at the risk associated with it, along with all the other variables . I think it's a very exhaustive process, but you can never guarantee up to a 100 % all the time . One of the miss here is there were grant, but that couldn't have been predicted at the time we started . So a very elaborate process to sum it up in terms of everything we look from a market, from customer, from their product road map and so on and we continue to do that on every program as a normal course of business . Vincent Joseph Galifi - Magna International Inc . - Executive VP & CFO Swamy, I just wanted to also add when you look at the risk with some of the new entrants compared to our traditional customers . And when we look at contractual arrangements and payment terms, they are different to take into account risk profile, we do get paid earlier, we do get paid in advance . In the case of Evergrande, we've done actually quite a bit of work -- quite a lot of work for them, and we have received quite a bit of money for it . This is what we believe at this point in time needs to be reserved from an accounting perspective . Obviously, we're hopeful that we'll work through all this . And at some point, we have to report that we could reverse ideally, all of this back into income . But at this point in time, the assessment is we should be providing for it from a financial standpoint . Shreyas Patil - Wolfe Research, LLC - Research Analyst Okay . And that approach, Vince, around different payment terms and asking for payment in advance . That's something that you do with startups, not just in China, but in other -- if you were to expand this -- as you expand this into other markets, that philosophy would still be in place? Vincent Joseph Galifi - Magna International Inc . - Executive VP & CFO Yes . I hope Pat carries on with my disciplined way of looking . I think I'm sure he will . I've taught them while I hope . NOVEMBER 05, 2021 / 12:00PM, MG.TO - Q3 2021 Magna International Inc Earnings Call 15 REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us ©2021 Refinitiv. All rights reserved. Republication or redistribution of Refinitiv content, including by framing or similar means, is prohibited without the prior written consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies.
Shreyas Patil - Wolfe Research, LLC - Research Analyst Okay. Seetarama Swamy Kotagiri - Magna International Inc. - CEO, President & Director It's not expand to a region, right? I mean, that applies to every program, every region. So it's not only to a particular region. Operator We have another question on the line from the line of Brian Johnson from Barclays. Jason Flynn Stuhldreher - Barclays Bank PLC, Research Division - Research Analyst This is Jason Stuhldreher on for Brian . I suppose I'll try to come back to the cost -- to a cost question, even though I know it's been sort of attacked in many different ways . But kind of -- I guess, more simply, Vince, I understand your comments about sort of higher decrementals in the third quarter sequentially . But then as I -- and if my math is right, as I look at the fourth quarter, implied guide, the step - up -- you're planning for a step up in revenue, but then the step - up in margin sort of only implies like a low double digit's margin like a 10 % or 12 % incremental margin . So I mean not much -- not a lot changes sequentially . And as we see like these pretty high decrementals from 2 Q to 3 Q, why shouldn't they be equally as high as we move as sort of we're assuming a revenue step - up in 4 Q? Vincent Joseph Galifi - Magna International Inc . - Executive VP & CFO So I guess when I look at kind of Q 3 and Q 4 imply -- or Q 3 actual decrementals in Q 4 implied decrementals and overall Magna, I'm backing out -- when I look at decrementals, I'm backing out for Q 3 COVID business combinations and acquisitions Evergrande, obviously, and other warranty, for example, or the pluses or minuses . And my calculation would show Magna overall decremental is about 35 % , 36 % . Our -- if you look at our implied guidance at midpoint, we're about 30 % , 32 % . And I would attribute the improvement -- continued benefits of some of the initiatives we took in 2020 to take our cost down . And some, I think, better visibility to an improved sales situation in Q 4 . That should help reduce the decrementals that we record in Q 4 . Again, I'm not -- we're not happy with the decrementals in Q 4 . That's not what we should be doing . We need to get to a more normal level type of production environment with our customers . Some of these supply disruptions need to go away . And as I talked about in my comments, I think we should be able to get there by -- kind of in the second half of ' 22 . But we should -- I'd expect to see some improvements as we move past Q 4 into Q 1 of Q 2 next year . But again, that's going to be subject to what happens on the chip side, in particular . Jason Flynn Stuhldreher - Barclays Bank PLC, Research Division - Research Analyst Okay . Understood . And just to confirm, Vince, that your comments there were around the year - over - year decrementals in 4 Q? I was sort of thinking the sequential from 3 Q to 4 Q? Vincent Joseph Galifi - Magna International Inc . - Executive VP & CFO No, I think I was looking at like Q3 was sequential and Q4 was sequential. Sorry. Actually, year - over - year. NOVEMBER 05, 2021 / 12:00PM, MG.TO - Q3 2021 Magna International Inc Earnings Call 16 REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us ©2021 Refinitiv. All rights reserved. Republication or redistribution of Refinitiv content, including by framing or similar means, is prohibited without the prior written consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies.
Seetarama Swamy Kotagiri - Magna International Inc. - CEO, President & Director Year - over - year. Vincent Joseph Galifi - Magna International Inc. - Executive VP & CFO You're right. Sorry. I think correctly, year - over - year. Jason Flynn Stuhldreher - Barclays Bank PLC, Research Division - Research Analyst Just from a high level, I guess, we look Q 3 to Q 4 , you're expecting a step - up in revenue, but it doesn't seem like there's only -- like the incremental margin on that step - up is meaningful . I would assume it'd be kind of similar to what we saw in terms of decrementals in Q 3 . And I don't want to take up too much, so I apologize, or we can follow up offline, but just something I noticed . Vincent Joseph Galifi - Magna International Inc . - Executive VP & CFO I guess even when you look at year - over - year, I do expect some improvement, but it's never enough for my opinion . I did refer to some improvement . It's a modest improvement, but I think the bigger step - up in decrementals or incrementals is going to be in the second half of ' 22 . Operator Thank you very much. And Mr. Kotagiri, we have no further questions on the line. I'll turn it back to you for any closing remarks. Vincent Joseph Galifi - Magna International Inc . - Executive VP & CFO Swamy, we can't hear you . Seetarama Swamy Kotagiri - Magna International Inc . - CEO, President & Director Thanks, Tommy, and thanks, everyone, for listening in . A tough quarter from a financial results point of view . However, we continue to managed through the adversity, focus on execution and cost containment, continue to win new business, prepare for the industry production recovery once the supply disruptions subside and plan the right strategy to position Magna for the future . Thanks, everyone . Enjoy the rest of the day . Operator Thank you very much . Thank you, everyone . That does conclude the conference call for today . We thank you for your participation as you disconnect your lines . Have a good day, everyone . NOVEMBER 05, 2021 / 12:00PM, MG.TO - Q3 2021 Magna International Inc Earnings Call 17 REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us ©2021 Refinitiv. All rights reserved. Republication or redistribution of Refinitiv content, including by framing or similar means, is prohibited without the prior written consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies.
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