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Magna Announces Outlook

Stocks in this article: MG MGA

AURORA, ON, Jan. 11, 2012 /PRNewswire/ - Magna International Inc. (TSX: MG) (NYSE: MGA) today announced its financial outlook for 2012.  All amounts are in U.S. dollars.

Don Walker, Magna's Chief Executive Officer commented: "Our outlook demonstrates the traction we are gaining in executing our plan to expand our business outside of our traditional markets.  We are taking advantage of the growth opportunities in new markets and positioning Magna to further serve our customers on global platforms.  The combination of our strong position in North America, action plans that are improving results in Europe, and our considerable growth in other regions leaves us confident about Magna's future."

For the full year 2012, we expect consolidated total sales to be between $27.8 billion and $29.3 billion, and expect consolidated production sales to be between $23.6 billion and $24.7 billion, based on full year 2012 light vehicle production volumes of approximately 13.6 million units in North America and approximately 13.0 million units in Western Europe.  We expect full year 2012 production sales to be between $13.2 billion and $13.7 billion in North America, between $8.4 billion and $8.7 billion in Europe and between $2.0 billion and $2.3 billion in Rest of World.  We expect full year 2012 complete vehicle assembly sales to be between $2.3 billion and $2.6 billion. We expect our 2012 operating margins to be approximately 5% and our effective income tax rate to be approximately 26%, in both cases, excluding other expense/income (unusual items).

In addition, we expect that our full year 2012 spending for fixed assets will be between $1.3 billion and $1.5 billion.  This amount reflects investment to expand in a number of high-growth markets as well as continuing investment to support new and replacement business in our traditional markets.

Finally, in addition to our 2012 sales outlook above, we expect a net increase in total production sales over the two-year period from 2012 to 2014 of approximately $3.2 billion, based on assumed full year 2014 light vehicle production volumes of approximately 15.4 million units in North America and approximately 14.2 million units in Western Europe.  We expect the net increase in total production sales to be split approximately as follows by segment: 50% in North America, 15% in Europe and 35% in Rest of World.  

In this outlook we have assumed no material acquisitions or divestitures.  In addition, we have assumed that foreign exchange rates for the most common currencies in which we conduct business relative to our U.S. dollar reporting currency will approximate year end 2011 rates.

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