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Bright Outlook For Magna

Published: January 14, 2011; 00:01 · (Vindobona)

The Canadian/Austrian automotive component supplier today announced its financial outlook and expects a significant increase in sales as well as profits.

Bright Outlook For Magna / Picture: © Magna

Don Walker, Magna's Chief Executive Officer commented: "As 2011 begins, vehicle production is poised for future growth in a number of important markets for us, including North America.  Accordingly, the outlook reflects significant sales growth, including expansion in high-growth markets in the next few years.  We also have the balance sheet, cash flow generation, engineering and manufacturing footprints, technologies and motivated workforce to support our growth initiatives around the world.  These factors combined leave us confident about Magna's future.”

For the full year 2011, Magna estimates consolidated total sales to be between $ 25.6bn and $ 27.1bn, and expects consolidated production sales to be between $ 21.7bn and $ 22.7bn, based on full year 2011 light vehicle production volumes of approximately 12.9m units in North America and approximately 13.3m units in Western Europe.  The company expects full year 2011 production sales to be between $ 12.7bn and $ 13.2bn in North America, between $ 7.8bn and $ 8.1bn in Europe and between $ 1.2bn and $ 1.4bn in Rest of World.  Magna forecasts full year 2011 complete vehicle assembly sales to be between $ 2.4bn and $ 2.7bn. The 2011 effective income tax rate is estimated to amount to 20%.

In addition, Magna expects that its full year 2011 spending for fixed assets will be between $ 900m and $ 1.0bn.  This amount reflects continuing investment to support new and replacement business in Magna´s traditional markets as well as investment to expand in a number of high-growth markets.

Finally, in addition to the company´s 2011 sales outlook above, the Magna expects a net increase in total production sales over the two-year period from 2011 to 2013 of approximately $ 3bn, based on assumed full year 2013 light vehicle production volumes of approximately 14.8m units in North America and approximately 14.1m units in Western Europe.  Magna expects the net increase in total production sales to be split approximately equally among the company´s North America, Europe and Rest of World segments.

Furthermore, Magna Seating, an operating unit of Magna International which develops and manufactures complete seating solutions and mechanisms, continues its growth in South America with the acquisition of automotive seat supplier Pabsa S.A.  The new entity will operate as Magna Seating Argentina. Pabsa, previously part of the L’Equipe Monteur Group, is based in Buenos Aires, Argentina, and is a vertically integrated supplier of complete seats, foam products, trim covers and seat structures.  In 2010, they recorded sales of approximately $ 110m.

The acquisition -- which includes two production facilities in Buenos Aires and one in Cordoba, Argentina, and has approximately 960 employees -- increases Magna Seating’s global footprint and further positions the company as a leading supplier of automotive seating solutions in South America.

“We continue to make a significant commitment to the South American automotive market and our global OEM customers,” said Joe Pittel, President of Magna Seating. “Through recent acquisitions and investment we have strengthened our position to immediately support the global platforms of our customers.” Magna Seating recently announced the acquisition of automotive seating supplier Resil Minas and the establishment of a manufacturing facility in the São Paulo area to produce complete seats for General Motors and Volkswagen.

Magna Seating is an operator in the development and manufacture of high-quality complete seat solutions and seat mechanisms for the global automotive industry. Their capabilities range from consumer and market research, full concept development, design and engineering, testing and validation to world-class manufacturing of seating components and complete seat assemblies.

Magna regards itself as the most diversified global automotive supplier. The company designs, develops and manufactures technologically advanced systems, assemblies, modules and components, and engineer and assemble complete vehicles, primarily for sale to original equipment manufacturers ("OEMs") of cars and light trucks. The capabilities of Magna include the design, engineering, testing and manufacture of automotive interior systems; seating systems; closure systems; body and chassis systems; vision systems; electronic systems; exterior systems; powertrain systems; roof systems; hybrid and electric vehicles/systems as well as complete vehicle engineering and assembly. Magna has over 92,000 employees in 248 manufacturing operations and 81 product development, engineering and sales centres in 25 countries.