Fourth Quarter & Year End 2008 Conference Call

Transcription

1 1 Fourth Quarter & Year End 2008 Conference Call February 24, Agenda 2008 & Current Environment Q Financial Highlights Q&A Don Walker Vince Galifi Don Walker Vince Galifi Louis Tonelli ALL AMOUNTS ARE PRESENTED IN IN U.S. DOLLARS 1

2 3 Forward looking statements This presentation may contain statements that, to the extent that they are not recitations of historical fact, constitute "forward-looking statements" within the meaning of applicable securities legislation. Forward-looking statements may include financial and other projections, as well as statements regarding our future plans, objectives or economic performance, or the assumptions underlying any of the foregoing. We use words such as "may", "would", "could", "will", "likely", "expect", "anticipate", "believe", "intend", "plan", "forecast", "project", "estimate" and similar expressions to identify forward-looking statements. Any such forward-looking statements are based on assumptions and analyses made by us in light of our experience and our perception of historical trends, current conditions and expected future developments, as well as other factors we believe are appropriate in the circumstances. However, whether actual results and developments will conform with our expectations and predictions is subject to a number of risks, assumptions and uncertainties, including, without limitation: the potential for an extended global recession, including its impact on our liquidity; declining production volumes and sales levels; the impact of government financial intervention in the automotive industry; restructuring of the global automotive industry and the risk of the bankruptcy of one of our customers; the financial distress of some of our suppliers and the risk of their insolvency, bankruptcy or financial restructuring; restructuring and/or downsizing costs related to the rationalization of some of our operations; impairment charges; shifts in technology; our ability to successfully grow our sales to non-traditional customers; a reduction in the production volumes of certain vehicles, such as certain light trucks; our dependence on outsourcing by our customers; risks of conducting business in foreign countries, including Russia, India and China; our ability to quickly shift our manufacturing footprint to take advantage of lower cost manufacturing opportunities; the termination or non-renewal by our customers of any material contracts; disruptions in the capital and credit markets; fluctuations in relative currency values; our ability to successfully identify, complete and integrate acquisitions; our ability to offset price concessions demanded by our customers; the continued exertion of pricing pressures by our customers; warranty and recall costs; product liability claims in excess of our insurance coverage; changes in our mix of earnings between jurisdictions with lower tax rates and those with higher tax rates, as well as our ability to fully benefit tax losses; other potential tax exposures; legal claims against us; work stoppages and labour relations disputes; changes in laws and governmental regulations; costs associated with compliance with environmental laws and regulations; potential conflicts of interest involving our indirect controlling shareholder, the Stronach Trust; and other factors set out in our Annual Information Form filed with securities commissions in Canada and our annual report on Form 40-F filed with the United States Securities and Exchange Commission, and subsequent filings. In evaluating forward-looking statements, readers should specifically consider the various factors which could cause actual events or results to differ materially from those indicated by such forward-looking statements. Unless otherwise required by applicable securities laws, we do not intend, nor do we undertake any obligation, to update or revise any forward-looking statements to reflect subsequent information, events, results or circumstances or otherwise & Current environment 2008: Difficult Year for Global Auto Industry Weakening economies Severe credit crisis Contraction of Auto Sales and Production Negative impact on financial results and condition of essentially all industry participants Government assistance for industry 2

3 & Current environment (cont.) NA Light Vehicle Production 12.6M Units H2 down 22% YOY Detroit 3 trucks ex CUVs down 44% YOY NA Sales Decline Deteriorating US economy Low consumer confidence Limited availability of financing & Current environment (cont.) Similar Conditions Impacted Other Auto Markets WE 2008 vehicle sales 16% vehicle production 8% Q4 08 production 26% Industry Observers Expect 2009 To Be Worse Considerably weaker LV sales & production H1 particularly challenging 3

4 & Current environment (cont.) Magna Financial Results Negatively Impacted by Declines in Vehicle Production in NA & WE Shift away from certain light trucks OEM capacity adjustments Magna Actions To Offset: Reduce capacity Consolidate, close or sell facilities Reduce discretionary spending Reduce or defer capital spending & Current environment (cont.) Magna Restructuring Charges in 2008 Magna Additional Charges in Industry Restructuring for Both OEMs & Suppliers Solid financial condition/cash flow to benefit us in the medium term Takeover work Acquisitions Cadence 4

5 9 Unusual items Unusual Items in Q and Q THE FOLLOWING SLIDES EXCLUDE UNUSUAL ITEMS* * Reconciliation of Reported Results & Results Excluding Unusual Items Included in Appendix A 10 Q Consolidated sales ($Billions) -29%

6 11 Q N.A. content per vehicle -4% Production Sales 28% N.A. Vehicle Production 25% 12 Q N.A. content per vehicle (cont.) 874-4% 906 Key Programs ( ) GMs Full Size Pickups and SUVs Chevrolet Equinox Chryslers Minivans Chrysler LX Platform Ford Explorer and Edge Jeep Liberty and Wrangler Hummer H3 Weakening CDN Dollar ( ) Programs Ending Production ( ) Chrysler Pacifica Price Concessions ( ) 6

7 13 Q N.A. content per vehicle (cont.) 874-4% 906 Launches (+) Key Programs (+) Chevrolet HHR, Impala, and Cobalt Pontiac G5 Ford Fusion Acquisitions (+) Ogihara Plastech 14 Q N.A. content per vehicle (cont.) 874-4% 906 Launches (+) Chevrolet Traverse and Malibu Dodge Journey, Ram, Challenger Volkswagen Routan Mazda 6 Ford Flex Key Programs (+) Acquisitions (+) 7

8 15 Q EUR content per vehicle -9% Production Sales 32% EUR Vehicle Production 26% 16 Q EUR content per vehicle (cont.) 436-9% 478 Weakening and ( ) Key Programs ( ) BMW X3 Renault Trafic, Opel Vivaro, Nissan Primastar Ford Transit Porsche 911 Sale of Facilities ( ) Programs Ending Production ( ) Chrysler Voyager Prices Concessions ( ) 8

9 17 Q EUR content per vehicle (cont.) 436-9% 478 Launches (+) Volkswagen Tiguan Audi Q5 Mercedes-Benz GLK Key Programs (+) Volkswagen Transporter smart fortwo 18 Rest of world production sales ($Millions) -17% 124 Weakening of the Korean, Brazilian and South African Currencies ( ) 103 Decreased Production and/or Content on Certain Programs in Korea and Brazil ( ) Strengthening of Chinese Renminbi (+) 9

10 19 Q Complete vehicle assy volumes (Thousands of Units) 60% 41.9 Complete Vehicle Assembly Sales 51% 16.9 Weakening Value Added Full Cost 20 Q Financial highlights** ($Millions unless otherwise noted) Q4 08 Q4 07 Change Production & CVA* Sales $ 4,247 $ 6,300 $(2,053) Tooling & Other Sales $ 589 $ 536 $ 53 Gross Margin % 9.6% 12.7% (3.1)% SG&A % 7.0% 6.2% 0.8% Operating Margin % (1.4)% 3.4% (4.8)% Effective Tax Rate % (10.1)% 27.2% (37.3)% Net (Loss) Income $ (76) $ 172 $ (248) Diluted EPS $ (0.68) $ 1.45 $(2.13) * Complete Vehicle Assembly ** Excluding Unusual Items 10

11 21 Q Cash flow ($Millions) Cash from Operations Net Income + Non-Cash Items 119 Non-Cash Operating Assets & Liabilities Investment Activities Fixed Assets 274 Purchase of Subsidiaries 49 Investments and Other Assets Appendix A February 24,

12 23 Reconciliation of reported results (Excluding unusual items) Q ($Millions except per share figures) Excluding Reported Restructuring Impairments Unusuals Sales 4, ,836 Gross Margin % of Sales 8.0% 9.6% SG&A 343 (5) % of Sales 7.1% 7.0% Depreciation Operating Income/Pretax (165) (69) % of Sales (3.4)% (1.4)% Income Taxes (17) 24-7 % of Pretax (1) 10.3% (10.1)% Net Income (148) (76) EPS (1.33) (0.68) (1) Excluding equity income 24 Reconciliation of reported results (Excluding unusual items) Q ($Millions except per share figures) Excluding Reported Restructuring Impairments Other Unusuals Sales 6, ,836 Gross Margin % of Sales 12.5% 12.7% SG&A % of Sales 5.9% 6.2% Depreciation 239 (3) Operating Income/Pretax (19) 235 % of Sales 3.0% 3.4% Income Taxes (125) 63 % of Pretax (1) 87.5% 27.2% Net Income EPS (1) Excluding equity income 12

13 25 Reconciliation of reported results (Excluding unusual items) 2008 ($Millions except per share figures) Excluding Reported Restructuring Impairments Other Unusuals Sales 23, ,704 Gross Margin 2, ,801 % of Sales 11.5% 11.8% SG&A 1,319 (5) ,430 % of Sales 5.6% 6.0% Depreciation Operating Income/Pretax (116) 579 % of Sales 1.4% 2.4% Income Taxes (123) 195 % of Pretax (1) 83.2% 34.8% Net Income EPS (1) Excluding equity income 26 Reconciliation of reported results (Excluding unusual items) 2007 ($Millions except per share figures) Excluding Reported Restructuring Impairments Other Unusuals Sales 26, ,067 Gross Margin 3, ,498 % of Sales 13.3% 13.4% SG&A 1,461 (4) ,508 % of Sales 5.6% 5.8% Depreciation 872 (6) Operating Income/Pretax 1, (50) 1,197 % of Sales 4.4% 4.6% Income Taxes (166) 351 % of Pretax (1) 42.9% 29.6% Net Income EPS (1) Excluding equity income 13