Financial Performance - Sales increased to 42,797millionin2023,upfrom37,840 million in 2022, representing a 13.1% growth[20] - Net income attributable to Magna International Inc. rose to 1,213millionin2023,comparedto592 million in 2022, a 104.9% increase[20] - Earnings per share (EPS) for 2023 were 4.24(basic)and4.23 (diluted), up from 2.04(basic)and2.03 (diluted) in 2022[20] - Comprehensive income attributable to Magna International Inc. was 1,430millionin2023,upfrom369 million in 2022[21] - Net income for 2023 increased to 1,286million,upfrom641 million in 2022, reflecting a significant growth in profitability[23] - Adjusted EBIT for 2023 rose to 2.238billion,comparedto1.708 billion in 2022, indicating improved profitability[168] - Total sales for 2023 increased to 42.797billion,upfrom37.840 billion in 2022, reflecting growth across all segments[168] - Basic earnings per Common Share in 2023 were 4.24,upfrom2.04 in 2022[83] Assets and Liabilities - Total assets grew to 32,255millionin2023,upfrom27,789 million in 2022, a 16.1% increase[22] - Intangible assets, net increased to 876millionin2023,comparedto452 million in 2022, primarily due to the Veoneer AS acquisition[22] - Goodwill rose to 2,767millionin2023,upfrom2,031 million in 2022, reflecting the Veoneer AS business combination[22] - Long-term debt increased to 4,175millionin2023,upfrom2,847 million in 2022, a 46.6% rise[22] - Retained earnings grew to 9,303millionin2023,comparedto8,639 million in 2022[22] - Total equity increased to 12,277millionin2023from11,335 million in 2022, driven by higher net income and other comprehensive income[24] - Financial assets totaled 9,253millionin2023,withcashandcashequivalentsat1,198 million and accounts receivable at 7,881million[147]−Financialliabilitiesincreasedto13,347 million in 2023 from 10,508millionin2022,primarilyduetoariseinlong−termdebtto4,994 million from 3,501million[147]−Netassetsincreasedto19.007 billion in 2023, up from 16.083billionin2022[170]AcquisitionsandInvestments−VeoneerASacquisitioncontributed41,504 million, a substantial increase from 3millionin2022,highlightingaggressiveexpansionefforts[23]−AcquisitionofVeoneerActiveSafetyBusinessfor1,438 million, with a net cash outflow of 1,475million[88][89]−InvestmentinYuluMobilityandestablishmentofMagnaYumawithacashcontributionof52 million for a 51% controlling interest[91][92] - Transaction costs related to the acquisition of Veoneer Active Safety Business were 23millionin2023[77]CashFlowandOperationalEfficiency−Cashprovidedfromoperatingactivitiesroseto3,149 million in 2023, compared to 2,095millionin2022,indicatingimprovedoperationalefficiency[23]−Fixedassetadditionsin2023totaled2,500 million, up from 1,681millionin2022,reflectingincreasedinvestmentininfrastructure[23]−Dividendspaidin2023were522 million, slightly higher than 514millionin2022,maintainingastablereturntoshareholders[23]−Cashandcashequivalentsdecreasedto1,198 million in 2023 from 1,234millionin2022[85]−Fixedassetsincreasedto22,428 million in 2023 from 20,179millionin2022,withconstructioninprogressexpendituresof2.6 billion[99] - Fixed asset additions totaled 2.500 billion in 2023, with Body Exteriors & Structures accounting for 1.638 billion[168] Segment Performance - Body Exteriors & Structures segment led with 17.511billionintotalsalesand1.304 billion in Adjusted EBIT for 2023[168] - Power & Vision segment reported 14.305billionintotalsalesand668 million in Adjusted EBIT for 2023[168] - General Motors remained the largest customer, contributing 6.162billioninexternalrevenuesfor2023,upfrom5.903 billion in 2022[170] - North America accounted for 20.722billioninexternalsalesin2023,withtheUnitedStatescontributing10.855 billion[171] - Europe's external sales reached 16.217billionin2023,withAustrialeadingat6.926 billion[171] - Asia Pacific external sales grew to 5.316billionin2023,withChinacontributing4.843 billion[171] Taxes and Deferred Tax Assets - Effective income tax rate decreased to 19.9% in 2023 from 27.0% in 2022, primarily due to research and development tax credits and foreign rate differentials[101] - Foreign income before taxes increased significantly to 1,790millionin2023from935 million in 2022[102] - Current income tax provision rose to 581millionin2023,withforeigntaxesaccountingfor557 million of the total[103] - Deferred tax assets increased to 1,265millionin2023,withtaxbenefitoflosscarryforwardscontributing892 million[104] - Unrecognized tax benefits increased to 220millionin2023,with188 million potentially affecting the effective tax rate if recognized[110] Intangible Assets and Goodwill - Intangible assets grew to 1,748millionin2023,withpatentsandtechnologyshowingthelargestincreaseto613 million[111] - Goodwill balance increased to 2,767millionin2023,drivenbyacquisitionsof670 million in the Power & Vision segment[100] Debt and Financing - Long-term debt increased to 4.175billionin2023from2.847 billion in 2022, with significant issuances including 300millionSeniorNotesdue2026at5.980500 million Senior Notes due 2033 at 5.500%[116] - Future principal repayments on long-term debt are estimated to be 819millionin2024,693 million in 2025, and 2.125billionthereafter[117]−Interestexpense,netincreasedto156 million in 2023 from 81millionin2022,withinterestpaidincashrisingto242 million from 128million[118]−Thecompanyhasa800 million syndicated revolving credit facility extended to June 24, 2024, with no borrowings as of December 31, 2023[114] - Commercial paper programs outstanding totaled 509millionin2023,withweightedaverageinterestratesof5.57591 million in 2023 from 548millionin2022,drivenbyterminationandlong−termservicearrangements[122]−Definedbenefitpensionplansshowedanetliabilityof84 million in 2023, with a projected benefit obligation of 511millionandplanassetsatfairvalueof427 million[125] - The asset allocation for defined benefit pension plans in 2023 was 67% fixed income securities, 28% equity securities, and 5% cash and cash equivalents[126] - Termination and long-term service arrangements resulted in a net liability of 445millionin2023,withaprojectedbenefitobligationof445 million[131] - Retirement medical benefit obligations decreased to 4.8% in 2023 from 5.1% in 2022, with net periodic benefit cost increasing to 5.1% from 3.1%[133] - Projected benefit obligation for retirement medical benefits plans remained stable at 21millioninboth2023and2022[133]−Expectedemployercontributionsfor2024total31 million, with 13millionfordefinedbenefitpensionplans,17 million for long service arrangements, and 1millionforretirementmedicalbenefitsplans[134]−Totalexpectedbenefitpaymentsfrom2024to2028amountto259 million, with 45millionin2024,46 million in 2025, 50millionin2026,55 million in 2027, and 63millionin2028[134]RisksandContingencies−Thecompany′sglobaloperationsexposeittoforeignexchangerisks,withassetsandliabilitiestranslatedatyear−endexchangerates[31]−Magna′sinvestmentsinprivateandpubliclytradedcompaniesaresubjecttoimpairmentreviews,withfairvaluedeterminedusingobservablepricechanges[38]−Creditriskexposurefromnewerelectricvehicle−focusedcustomersduetotheirshortoperatinghistoriesandlimitedfinancialresources[157]−Foreignexchangeriskmanagedthroughhedgingprogramsusingforeignexchangeforwardcontracts[158]−InterestrateriskexposureonTermLoanduetovariableinterestrates,butnotonSeniorNoteswithfixedrates[160]−Potentialliabilityforproductrecalls:upto352 million, with customer discretion to debit up to 50% of costs[167] Other Financial Metrics - Total tooling and engineering sales for the year ended December 31, 2023 were 785million,comparedto731 million in 2022[64] - Research and development costs charged to expense, net of reimbursements, were 862millionin2023,upfrom649 million in 2022[69] - Unbilled accounts receivable balance as of December 31, 2023 was 765million,comparedto571 million in 2022[66] - Contract liability balance as of December 31, 2023 was 570million,upfrom347 million in 2022[67] - The Company recognized 87millionofpreviouslyrecordedcontractliabilitiesintorevenueduring2023,comparedto130 million in 2022[67] - Other expense, net for 2023 was 388million,including201 million in investment-related expenses and 148millioninrestructuringcosts[74]−ImpairmentsandlossonsaleofoperationsinRussiaamountedto16 million in 2023, compared to 376millionin2022[74]−NetlossattributabletoMagnain2023was173 million, compared to 168millionin2022[75]−Restructuringchargesin2023were117 million in the Power & Vision segment and 31 million in the Body Exteriors & Structures segment[76] - Loss on sale of operations in Russia in 2023 was 16 million, with a net cash outflow of 23million[78]−Inventoriesincreasedto4,606 million in 2023 from 4,180millionin2022[94]−Warrantyaccrualsincreasedto270 million in 2023, with 85millioninnewexpensesand91 million in settlements[113] - Long-term liabilities increased to 475millionin2023from461 million in 2022, driven by a rise in long-term income taxes payable to 167millionfrom136 million[135] - The company authorized a Normal Course Issuer Bid to repurchase up to 0.3 million common shares, representing approximately 0.11% of the public float[138] - Accumulated other comprehensive loss improved to 898millionin2023from1,114 million in 2022, with a net unrealized gain of 183millionontranslationofnetinvestmentinforeignoperations[142]−Foreignexchangeforwardcontractsfor2024includecommitmentstobuy18 million in Canadian dollars and sell 397millioninU.S.dollars,withweightedaverageratesof1.313and0.779,respectively[144]−Derivativeforeigncurrencycontractsatgrossfairvalue:Assets82 million, Liabilities (20)millionasofDecember31,2023[148]−Supplierfinancingprogramoutstandingamount:132 million as of December 31, 2023[150] - Senior Notes net book value: 4.5billion,estimatedfairvalue:4.4 billion as of December 31, 2023[154] - Sales to the six largest customers represented 76% of total sales in 2023, down from 79% in 2022[157] - Balance sheet exposure related to newer electric vehicle-focused customers: approximately $600 million, majority related to Fisker[157] - Adjusted EBIT calculation revised to exclude amortization of acquired intangible assets for better comparability[166]
Magna(MGA)2024-02-23 12:41