Magna update future outlook and continues expansion in south america with acquistion of PABSA.
Mr. Vince Galifi reports
MAGNA ANNOUNCES OUTLOOK AND OTHER MATTERS
Magna International Inc. has issued its financial outlook for 2011. All amounts are in United States dollars.
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, our 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 work force to support our growth initiatives around the world. These factors combined leave us confident about Magna's future."
For the full year 2011, Magna expects consolidated total sales to be between $25.6-billion and $27.1-billion and expects consolidated production sales to be between $21.7-billion and $22.7-billion, based on full year 2011 light vehicle production volumes of approximately 12.9 million units in North America and approximately 13.3 million units in Western Europe. It expects full year 2011 production sales to be between $12.7-billion and $13.2-billion in North America, between $7.8-billion and $8.1-billion in Europe and between $1.2-billion and $1.4-billion in the rest of world. Magna expects full year 2011 complete vehicle assembly sales to be between $2.4-billion and $2.7-billion. It expects its 2011 effective income tax rate to be approximately 20 per cent.
In addition, Magna expects that its full year 2011 spending for fixed assets will be between $900-million and $1.0-billion. This amount reflects continuing investment to support new and replacement business in the company'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, it expects a net increase in total production sales over the two-year period from 2011 to 2013 of approximately $3-billion, based on assumed full year 2013 light vehicle production volumes of approximately 14.8 million units in North America and approximately 14.1 million units in Western Europe. The company expects the net increase in total production sales to be split approximately equally among the its North America, Europe and the rest of world segments.
In this 2011 outlook, in addition to 2011 and 2013 light vehicle production, Magna has assumed no material acquisitions or divestitures. In addition, it has assumed that foreign exchange rates for the most common currencies in which it conducts business relative to its U.S. dollar reporting currency will approximate year-end 2010 rates.
In connection with a continuing review of the company's system of corporate governance following the elimination of its dual-class share structure effective Aug. 31, 2010, the company's board today approved the adoption of a majority voting policy which will take effect commencing in respect of its 2012 annual meeting.
We seek Safe Harbor.