GlobeNewswire Inc | Nov 6, 2020 05:00AM EST

November 06, 2020

-- Sales of $9.1 billion decreased 2%, compared to 4% lower global light vehicle production -- Recorded non-cash impairment charges of $200 million after income taxes and loss attributable to non-controlling interests related to our investment in an equity accounted transmissions joint venture -- Diluted earnings per share of $1.35, compared to diluted loss per share of $0.75 in the third quarter of 2019 -- Adjusted diluted earnings per share of $1.95, 38% higher than the third quarter of 2019 -- Cash from operating activities of $1.6 billion, compared to $750 million in the third quarter of 2019 -- 2020 Outlook increased to reflect higher total Sales and Adjusted EBIT margin expectations

AURORA, Ontario, Nov. 06, 2020 (GLOBE NEWSWIRE) -- Magna International Inc. (TSX: MG; NYSE: MGA) today reported financial results for the third quarter ended September 30, 2020. Please click HEREfor full third quarter Financial Statements and MD&A.

THREE MONTHS ENDED NINE MONTHS ENDED SEPTEMBER 30, SEPTEMBER 30, 2020 2019 2020 2019Reported Sales $ 9,129 $ 9,319 $ 22,079 $ 30,036 Income (loss)fromoperations $ 436 $ (319 ) $ 33 $ 1,644before incometaxes Net income(loss)attributableto $ 405 $ (233 ) $ 19 $ 1,325MagnaInternationalInc. Dilutedearnings $ 1.35 $ (0.75 ) $ 0.06 $ 4.15(loss) pershare Non-GAAPFinancial Measures^(1) Adjusted EBIT $ 778 $ 558 $ 581 $ 1,955 Adjusteddiluted $ 1.95 $ 1.41 $ 1.12 $ 4.63earnings pershare All results are reported in millions of U.S. dollars, except per share figures,which are in U.S. dollars. ^(1)Adjusted EBIT and Adjusted diluted earnings per share are Non-GAAPfinancial measures that have no standardized meaning under U.S. GAAP, and as aresult may not be comparable to the calculation of similar measures by othercompanies. A reconciliation of these Non-GAAP financial measures is included inthe back of this press release.

A photo accompanying this announcement is available at https://www.globenewswire.com/NewsRoom/AttachmentNg/36ad46eb-a4be-4ecb-95f2-770391b42d62

THREE MONTHS ENDED SEPTEMBER 30, 2020

Sales and Adjusted EBIT came in above our expectations in the third quarter of 2020, as vehicle production was better than anticipated, and we were able to efficiently ramp up production while benefitting from discretionary and structural cost savings and efficiencies realized across the company. We also benefitted from COVID-19 related government employeesupport programs which were extended into the third quarter of 2020.

On a consolidated basis, we posted sales of $9.1 billion for the third quarter of 2020, a decrease of 2% from the third quarter of 2019, compared to global light vehicle production that decreased 4%, reflecting a decline of 5% in Europe and essentially level production in North America.

Adjusted EBIT increased to $778 million in the third quarter of 2020 compared to $558 million in the third quarter of 2019. The increase mainly reflected higher margin earned on sales, the benefit of COVID-19 related government employee support programs, and the negative impact of the labour strike at General Motors that was reflected in our results in the third quarter of 2019.

Income from operations before income taxes was $436 million for the third quarter of 2020 compared to a loss of $319 million in the third quarter of 2019. Included in income from operations before income taxes in the third quarter of 2020 were Other expense, net items totaling $316 million mainly comprised of a non-cash impairment of assets, partially offset by net gains on the revaluation of certain private equity investments, compared to $859 million in the third quarter of 2019, substantially comprised of non-cash impairment of assets and net losses on the revaluation of our investments. Excluding Other expense, net from both periods, income from operations before income taxes increased $212 million in the third quarter of 2020 compared to the third quarter of 2019.

Net income attributable to Magna International Inc. was $405 million for the third quarter of 2020 compared to a loss of $233 million in the third quarter of 2019. Included in net income attributable to Magna International Inc. in the third quarter of 2020 were Other expense, net items totaling $180 million after tax and loss attributable to non-controlling interests, compared to $671 million after tax and loss attributable to non-controlling interests in the third quarter of 2019. Excluding Other expense, net from both periods, net income attributable to Magna International Inc. increased $147 million in the third quarter of 2020 compared to the third quarter of 2019.

Diluted earnings per share increased to $1.35 in the third quarter of 2020, compared to a loss of $0.75 in the comparable period. Adjusted diluted earnings per share increased 38% to $1.95 compared to $1.41 for the third quarter of 2019.

In the third quarter of 2020, we generated $1.6 billion in cash from operating activities, including $518 million from operating assets and liabilities. Investment activities for the third quarter of 2020 included $213 million in fixed asset additions, $68 million in investments, other assets and intangible assets and $12 million in private equity investments.

NINE MONTHS ENDED SEPTEMBER 30, 2020

We posted sales of $22.1 billion for the nine months ended September 30, 2020, a decrease of 26% from the nine months ended September 30, 2019. This is compared to global light vehicle production which decreased 25% in the first nine months of 2020 compared to the first nine months of 2019, largely due to the COVID-19 pandemic and related restrictions that resulted in the temporary suspension of production at substantially all OEM and supplier production facilities in the first half of 2020. Vehicle production declined 28% and 31% in our most significant production markets of North America and Europe, respectively, and declined 11% in China.

During the nine months ended September 30, 2020, income from operations before income taxes was $33 million, net income attributable to Magna International Inc. was $19 million and diluted earnings per share was $0.06, down $1.6 billion, $1.3 billion and $4.09, respectively, each compared to the first nine months of 2019.

During the nine months ended September 30, 2020, Adjusted EBIT decreased to $581 million, and adjusted diluted earnings per share decreased to $1.12. During the nine months ended September 30, 2020, we generated cash from operations before changes in operating assets and liabilities of $1.4 billion and invested $392 million in operating assets and liabilities. Investment activities for the first nine months of 2020 included $585million in fixed asset additions, $233 million in investments, other assets and intangible assets, and $114 million in private equity investments, primarily related to Waymo.

RETURN OF CAPITAL TO SHAREHOLDERS

During the three and nine months ended September 30, 2020, we paid dividends of $115 million and $352 million, respectively. In addition, we repurchased 4.8 million shares for cancellation for $192 million in the first quarter of 2020.

Our Board of Directors declared a third quarter dividend of $0.40 per Common Share, payable on December 4, 2020 to shareholders of record as of the close of business on November 20, 2020.

OTHER MATTERS

Subject to the approval by the Toronto Stock Exchange and New York Stock Exchange, our Board of Directors approved a new Normal Course Issuer Bid (NCIB) to purchase up to 29.6 million of our Common Shares, representing approximately 10% of our public float of Common Shares. This NCIB is expected to commence on or about November 15, 2020 and will terminate one year later.

A photo accompanying this announcement is available at https://www.globenewswire.com/NewsRoom/AttachmentNg/c4113a3d-b6c2-4fa4-91a7-55eedb06558c

(2) Free cash flow represents Cash from Operating Activities plus proceeds from normal course dispositions of fixed and other assets minus capital spending minus investments in other assets.

SEGMENT SUMMARY

($Millions For the three months ended September 30,unlessotherwise Sales Adjusted EBITnoted) 2020 2019 Change 2020 2019 ChangeBodyExteriors $ 3,858 $ 3,984 $ ( ) $ 390 $ 306 $ 84 & 126StructuresPower & 2,722 2,696 26 227 167 60 VisionSeating 1,280 1,266 14 66 56 10 SystemsComplete 1,402 1,516 ( ) 70 29 41 Vehicles 114Corporate (133 ) (143 ) 10 25 ? 25 and OtherTotal (Reportable $ 9,129 $ 9,319 $ 190 ) $ 778 $ 558 $ 220 Segments

For the three months ended September 30, Adjusted EBIT as a percentage of sales 2020 2019 ChangeBodyExteriors & 10.1 % 7.7 % 2.4 %StructuresPower & 8.3 % 6.2 % 2.1 %VisionSeating 5.2 % 4.4 % 0.8 %SystemsComplete 5.0 % 1.9 % 3.1 %VehiclesConsolidated 8.5 % 6.0 % 2.5 %Average ($Millions For the nine months ended September 30,unlessotherwise Sales Adjusted EBITnoted) 2020 2019 Change 2020 2019 ChangeBody (3, (Exteriors & $ 9,157 $ 12,535 $ 378 ) $ 274 $ 1,010 $ 736 )StructuresPower & 6,543 8,587 ( ) 136 584 ( )Vision 2,044 448Seating 3,065 4,151 (1, ) 22 233 (21 )Systems 086 1Complete 3,656 5,246 (1, ) 164 100 64 Vehicles 590Corporate (342 ) (483 ) 141 (15 ) 28 (43 )and OtherTotal (7, (1,Reportable $ 22,079 $ 30,036 $ 957 ) $ 581 $ 1,955 $ 374 )Segments

For the nine months ended September 30, Adjusted EBIT as a percentage of sales 2020 2019 ChangeBody Exteriors & 3.0 % 8.1 % (5.1 )%StructuresPower & 2.1 % 6.8 % )%Vision (4.7Seating 0.7 % 5.6 % )%Systems (4.9Complete 4.5 % 1.9 % 2.6 %Vehicles Consolidated 2.6 % 6.5 % )%Average (3.9

For further details on our segment results, please see our Managements Discussion and Analysis of Results of Operations and Financial Position and our Interim Financial Statements.

2020 OUTLOOK

Current^(3^) PreviousLight Vehicle Production(Units) 12.7 million 12.5 millionNorth America 16.1 million 15.9 millionEurope Segment SalesBody Exteriors $13.0 - $13.4& Structures billionPower & Vision $9.2 - $9.5 billion Seating Systems $4.3 - $4.5 billionComplete $5.4 - $5.6 billionVehicles Total Sales $31.5 - $32.5 $30.0 - $32.0 billion billion Adjusted EBIT Margin^(4^) 4.0% - 4.4% 2.9% - 3.3% Equity Income (included in $120 - $150 million EBIT) Interest Expense, net Approximately $90 Approximately $90 million million Income Tax Rate^(5^) Approximately 28.5% Approximately 30% Net Income attributable to $850 - $975 million Magna ^(6^) Capital Spending Approximately $1.3 Approximately $1.4 billion billion ^(3)Our current outlook includes Segment Sales, Equity Income and Netincome attributable to Magna, none of which were provided in our previousoutlook dated August 7, 2020^(4)Adjusted EBIT Margin is the ratio of Adjusted EBIT to Total Sales^(5)The Income Tax Rate has been calculated using Adjusted EBIT and isbased on current tax legislation^(6) Net Income attributable to Magna represents Net Income excluding Otherexpense (income), net

In this 2020 outlook, we have assumed:

-- 2020 light vehicle production volumes (as set out above); -- no material unannounced acquisitions or divestitures; and -- foreign exchange rates for the most common currencies in which we conduct business relative to our U.S. dollar reporting currency as follows: 1 Canadian dollar equals U.S. dollars 0.7421 euro equals U.S. dollars 1.138

There continues to be uncertainty related to our outlook above as a result of elevated risks associated with consumer demand, as well as continuing COVID-19 risks to various aspects of our business and the automotive industry, as discussed in our MD&A for the third quarter of 2020, our Annual Information Form / Form 40-F dated March 27, 2020 and subsequent filings.

NON-GAAP FINANCIAL MEASURES RECONCILIATION

Adjusted EBIT

The following table reconciles net income to Adjusted EBIT: For the three months ended September 30, 2020 2019 Net income (loss) $ 327 $ (364 )Add: Interest expense, 26 18 netOther expense, 316 859 netIncome taxes 109 45 Adjusted EBIT $ 778 $ 558 Adjusted EBIT as apercentage of sales (?Adjusted EBIT margin?) Adjusted EBIT as a percentage of sales is calculated in the table below: For the three months ended September 30, 2020 2019 Sales $ 9,129 $ 9,319 Adjusted EBIT $ 778 $ 558 Adjusted EBIT as a 8.5 % 6.0 %percentage of sales Adjusted diluted earnings per share The following table reconciles net income attributable to Magna InternationalInc. to Adjusted diluted earnings per share: For the three months ended September 30, 2020 2019 Net income (loss)attributable to Magna $ 405 $ (233 )International Inc.Add (deduct): Other expense, 316 859 netTax effect on (61 ) (61 )Other expense, netLoss attributableto non-controlling interests relatedto Other expense, (75 ) (127 )netAdjusted net incomeattributable to Magna $ 585 $ 438 International Inc.Diluted weighted averagenumber of Common Shares 299.4 310.7 outstanding during theperiod (millions):Adjusted diluted earnings $ 1.95 $ 1.41 per share

NON-GAAP FINANCIAL MEASURES RECONCILIATION

Adjusted EBIT

The following table reconciles net income to Adjusted EBIT: For the nine months ended September 30, 2020 2019 Net (loss) income $ (73 ) $ 1,187 Add (deduct): Interest 64 63 expense, netOther expense, 484 248 netIncome taxes 106 457 Adjusted EBIT $ 581 $ 1,955 Adjusted EBIT as apercentage of sales (?Adjusted EBITmargin?) Adjusted EBIT as a percentage of sales is calculated in the table below: For the nine months ended September 30, 2020 2019 Sales $ 22,079 $ 30,036 Adjusted EBIT $ 581 $ 1,955 Adjusted EBIT as a 2.6 % 6.5 %percentage of sales Adjusted diluted earnings per share The following table reconciles net income attributable to Magna InternationalInc. to Adjusted diluted earnings per share: For the nine months ended September 30, 2020 2019 Net income attributableto Magna International $ 19 $ 1,325 Inc.Add (deduct): Other expense, 484 248 netTax effect on (93 ) 32 Other expense, netLossattributable to non-controllinginterests relatedto Other (75 ) (127 )expense, netAdjusted net incomeattributable to Magna $ 335 $ 1,478 International Inc.Diluted weightedaverage number ofCommon Shares 300.2 319.1 outstanding during theperiod (millions):Adjusted diluted $ 1.12 $ 4.63 earnings per share

Certain of the forward-looking financial measures above are provided on a Non-GAAP basis. We do not provide a reconciliation of such forward-looking measures to the most directly comparable financial measures calculated and presented in accordance with U.S. GAAP. To do so would be potentially misleading and not practical given the difficulty of projecting items that are not reflective of on-going operations in any future period. The magnitude of these items, however, may be significant.

This press release together with our Managements Discussion and Analysis of Results of Operations and Financial Position and our Interim Financial Statements are available in the Investor Relations section of our website at www.magna.com/company/investors and filed electronically through the System for Electronic Document Analysis and Retrieval (SEDAR) which can be accessed at www.sedar.com as well as on the United States Securities and Exchange Commissions Electronic Data Gathering, Analysis and Retrieval System (EDGAR), which can be accessed at www.sec.gov.

We will hold a conference call for interested analysts and shareholders to discuss our third quarter ended September 30, 2020 results on Friday, November 6, 2020 at 8:00 a.m. ET. The conference call will be chaired by Don Walker, Chief Executive Officer. The number to use for this call from North America is 1-800-908-8370. International callers should use 1-416-981-9035. Please call in at least 10 minutes prior to the call start time. We will also webcast the conference call at www.magna.com. The slide presentation accompanying the conference call as well as our financial review summary will be available on our website Friday prior to the call.

TAGSQuarterly earnings, financial results, vehicle production

INVESTOR CONTACTLouis Tonelli, Vice-President, Investor Relations louis.tonelli@magna.com 905.726.7035

MEDIA CONTACT Tracy Fuerst, Vice-President, Corporate Communications & PR tracy.fuerst@magna.com 248.631.5396

OUR BUSINESS (7)We are a mobility technology company. We have over 157,000 entrepreneurial-minded employees, 344 manufacturing operations and 93 product development, engineering and sales centres in 27 countries. We have complete vehicle engineering and contract manufacturing expertise, as well as product capabilities that include body, chassis, exteriors, seating, powertrain, active driver assistance, electronics, mechatronics, mirrors, lighting and roof systems. Our common shares trade on the Toronto Stock Exchange (MG) and the New York Stock Exchange (MGA).

(7)Manufacturing operations, product development, engineering and sales centres and employee figures include certain equity-accounted operations.

FORWARD-LOOKING STATEMENTSCertain statements in this press release 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. Forward-looking statements in this press release include, but are not limited to, statements relating to: the expected impact of our cost structure and spending reductions on our financial results; forecasts of light vehicle production in North America and Europe, including expected split by reporting segment; expected Total sales, based on such light vehicle production; EBIT margin; Equity Income; Net interest expense; Tax rate; Net Income; and Capital spending.

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. 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 AutomotiveIndustry

* economic cyclicality; * regional production volume declines, including as a result of the COVID-19 Pricing Risks (Coronavirus) pandemic; * intense competition; * potential restrictions on * pricing risks between time of quote and free trade; start of production; * trade disputes/tariffs; * price concessions, including as a result of the COVID-19 (Coronavirus) pandemic; * commodity costs; * declines in scrap steel prices;Customer and Supplier RelatedRisks

Warranty / Recall Risks * concentration of sales with six customers; * OEM consolidation and * costs related to repair or replacement of cooperation; defective products, including due to a * shifts in market shares recall; among vehicles or vehicle * warranty or recall costs that exceed segments; warranty provision or insurance coverage * shifts in consumer "take limits; rates" for products we * product liability claims; sell; * quarterly sales fluctuations; * potential loss of any Acquisition Risks material purchase orders; * a deterioration in the financial condition of our * inherent merger and acquisition risks; supply base, including as a * acquisition integration risk; result of the COVID-19 (Coronavirus) pandemic; * increased financial pressure, including as a Other Business Risks result of COVID-19 caused OEM bankruptcies; * risks related to conducting business through joint ventures; * our ability to consistently develop andManufacturing Operational Risks commercialize innovative products or processes; * our changing business risk profile as a * product and new facility result of increased investment in launch risks; electrification and autonomous driving, * operational including: higher R&D and engineering underperformance; costs, and challenges in quoting for * restructuring costs; profitable returns on products for which we * impairment charges; may not have significant quoting * labour disruptions; experience; * labour shortage in our * risks of conducting business in foreign facilities, or those of our markets; customers and suppliers, as * fluctuations in relative currency values; a result of the COVID-19 * tax risks; (Coronavirus) pandemic; * reduced financial flexibility as a result * COVID-19 (Coronavirus) of an economic shock; shutdowns; * changes in credit ratings assigned to us; * supply disruptions and applicable costs related to supply disruption mitigation initiatives, Legal, Regulatory and Other Risks including as a result of the COVID-19 (Coronavirus) * antitrust risk; pandemic; * legal claims and/or regulatory actions * climate change risks; against us; and * attraction/retention of * changes in laws and regulations, including skilled labour; those related to vehicle emissions or made as a result of the COVID-19 (Coronavirus) pandemic.

IT Security/Cybersecurity Risk

* IT/Cybersecurity breach; * Product Cybersecurity breach;

In evaluating forward-looking statements or forward-looking information, we caution readers not to place undue reliance on any forward-looking statement, and readers should specifically consider the various factors which could cause actual events or results to differ materially from those indicated by such forward-looking statements, including the risks, assumptions and uncertainties above which are discussed in greater detail in this document under the section titled "Industry Trends and Risks" and 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.