Magna International Inc. Business Report FY2011
Business Highlights
Financial Overview |
(in million dollars) |
| FY2011 | FY2010 | Rate of change (%) |
Factors | |
| Overall | ||||
| Sales | 28,748 | 23,465 | 22.5 | -Increased sales in all region. |
| Adjusted EBIT | 1,367 | 1,211 | 12.9 | - |
| Sales by region | ||||
| North America | 14,764 | 12,314 | 19.9 | -The launch of new programs. 1) -Higher production volumes on certain existing programs. -Content growth on certain programs. -Strengthening of the Canadian dollar against US dollar. -Improved pricing on certain programs. |
| Europe | 12,429 | 10,168 | 22.2 |
-The launch of new programs. 2) |
| Rest of World | 1,506 | 930 | 61.9 |
-Acquisitions positively impacted sales by 321 million dollar, including Resil Minas and Pabsa S.A. |
Factors
1) The launch of new programs in North America
-BMW "X3"
-Chevrolet "Cruze", "Equinox"
-Dodge "Durango", "Charger"
-Jeep "Grand Cherokee"
-Ford "Explorer"
-Chrysler "300", "300C"
-Volkswagen "Passat"
2) The launch of new programs in Europe
-MINI "Countryman"
-Porsche "Cayenne"
-Volkswagen "Touareg"
-Audi "A1", "A6"
-Mercedes-Benz "SLK", "C-Class Coupe"
-Range Rover "Evoque"
Acquisition
<Cosma International>-The Company announced that its Cosma International operating unit has closed a transaction with ThyssenKrupp Automotive Systems GmbH to acquire ThyssenKrupp Automotive Systems Industrial do Brasil Ltda. (TKASB) of Brazil. TKASB produces and assembles chassis structural components and modules, and had sales of approximately 250 million dollars for its fiscal year ended September 30, 2011. TKASB employs approximately 770 employees at the four plants, located in Sao Bernardo do Campo, Ibirite, Camacari and Sao Jose dos Pinhais in Brazil. Current production customers include Ford, Fiat, Renault-Nissan, Honda and PSA. Magna currently has nine manufacturing facilities and two R&D facilities in South America. (From a press release on December 6, 2011)
-Cosma International, an operating unit of the Company, announced that it has signed an agreement with the shareholders of the BDW technologies group. BDW is a Germany-based manufacturer of vacuum high-pressure aluminum die casting and expects full-year 2011 total sales of approximately 160 million euros. BDW's current production customers include Volkswagen, Audi, Porsche, Mercedes-Benz, Ferrari, ZF and others. On completion of the transaction, Cosma will acquire two operations in Germany, one in Poland and one in Hungary. This acquisition expands Cosma's ability to deliver lightweight solutions for complex body-in-white structural and chassis components in steel, aluminum or aluminum-steel hybrid to customers. Closing of the transaction is expected to occur in the first quarter of 2012. (From a press release on November 17, 2011)
-Cosma International, an automotive metalforming supplier and an operating unit of the Company, announced the acquisition of Grenville Castings Limited. Grenville Castings, headquartered in Perth, Ontario, Canada, is an aluminum casting supplier for the automotive and heavy truck markets. The acquisition will also support Cosma's launch of an automotive chassis program which is scheduled to start production in 2014. (From a press release on August 31, 2011)
-Cosma International, an operating unit of the Company and an automotive body and chassis system supplier, announced the acquisition of the Durbheim manufacturing facility of Acument GmbH & Co. OHG of Germany. Durbheim facility manufactures stamped extrusions for automotive customers including Daimler, BMW, General Motors, Ford and Renault. (From a press release on February 4, 2011)
<Magna Seating>
-Magna Seating, an operating unit of the Company, announced its acquisition of automotive seat supplier Pabsa S.A., based in Buenos Aires, Argentina. Pabsa, previously part of the L'Equipe Monteur Group manufactures complete seats, foam products, trim covers and seat structures. In 2010, they recorded sales of approximately 110 million dollars. The acquisition includes two production facilities in Buenos Aires and one in Cordoba, Argentina, and has approximately 960 employees. The new entity will operate as Magna Seating Argentina. (From a press release on January 12, 2011)
Divestitures
<Magna Electronics>-Continental AG announced that it has acquired the Radar Engineering Unit located in Ottobrunn, Germany of Magna Electronics, an operating unit of Magna International Inc., anticipated to be effective July 1, 2011. Under this agreement eleven engineers will be transferred to Continental. The sale of the Radar Engineering Unit will allow Magna Electronics to concentrate on the development of camera-based technologies and systems. Both companies agreed not to comment on the purchasing price. (From a press release on June 20, 2011)
Joint-ventures
<Magna Exteriors and Interiors>-Magna Exteriors and Interiors, an operating unit of the Company, announced that it has expanded its footprint in China by forming a joint venture to purchase an existing injection molding and painting facility located in Wuhu, a city in the Anhui province, China. The three-party joint venture, called MCC Wuhu Exteriors, consists of Magna Exteriors and Interiors (51%), CAIP (Changshu Automotive Trim Co., 34%) and Chery Tech (15%). The 300,000-square-foot manufacturing plant, which recorded revenue of approximately 43 million dollars in 2010, employs about 600 people and supplies its primary customer Chery Auto with front and rear fascias. (From a press release on August 5, 2011)
<Cosma International>
-Cosma International, an operating unit of the Company and an automotive body and chassis system supplier, announced that it has established a joint venture in China with Guangzhou Automobile Group Component Co., Ltd. The new joint venture, which will be named Changsha Cosma Automotive, will be located in Changsha City, Hunan Province, China. The JV partners plan to establish a manufacturing facility there that will employ 500 to 600 people at full capacity and will produce major body and chassis components and structural assemblies. Construction of the facility will begin in 2011 with start of production targeted for 2012. The first products to be manufactured at the facility will be for a GAC-Fiat vehicle program. (From a press release on May 10, 2011)
Recent Development Outside Canada
<Japan>-Donald Walker, CEO of the Company, said in an interview with the Daily Automotive News of Japan, "We are interested in collaboration with Japanese parts makers that are willing to expand their overseas operations." Leveraging its global supply network, the Company expressed its intention to form cooperative relationships with Japanese parts suppliers, who are aiming to make inroads into new emerging countries. Given an increasing number of Japanese automakers entering into Mexico and Brazil hereafter, the Company is exploring business opportunities with Japanese partners that are aiming at these markets in terms of developing complementation scheme like sharing production. (From an article in the Nikkan Jidosha Shimbun on October 26, 2011)
Contracts
<Magna Steyr>-Magna Steyr, an operating unit of the Company, announced that its roof systems group has started production of the textile folding roof for the 2012 Fiat "500 Cabrio" being sold in North America. The vehicle is built at Chrysler Group's Toluca assembly plant in Mexico. Magna Steyr manufactures the folding roof at its plant in Tychy, Poland, where the convertible roof for the European Fiat "500c" is also produced. Magna Steyr's roof systems facility in Mexico then performs final assembly checks. (From a press release on June 28, 2011)
-Magna Steyr, which develops and produces roof systems for convertible vehicles, as well as manufactures vehicles on contract as a group company of Canadian-based Magna International Inc., announced on May 18 it has received orders for the soft-top convertible system for the Nissan "Murano CrossCabriolet" to be released shortly in North America. It represents the third roof Magna Steyr is supplying to Nissan, contributing to increasing production for Nissan by 50 percent. (From an article in the Nikkan Jidosha Shimbun on May 19, 2011)
Awards
-The Company announced that it has received a 2011 Supplier Award from Chrysler Group LLC. In addition to the 2011 Supplier Award presented to Magna overall, eight of the Company's manufacturing divisions were also recognized with certificates of achievement from Chrysler Group for quality in 2010 and 2011. The Company's divisions included:- Victor Manufacturing – Cosma International – Victor, Iowa, U.S.
- Modatek Systems – Cosma International – Milton, Ontario, Canada
- Presstran Industries – Cosma International – St. Thomas, Ontario, Canada
- Decoplas – Magna Exteriors and Interiors – Cuautitlan Izcalli, Mexico
- Intier Auto Closures – Magna Closures – Shelby Township, Michigan, U.S.
- Ilz – Magna Powertrain – Ilz, Austria
- Unimotion Gear – Magna Powertrain – Aurora, Ontario, Canada
- Innovative Cooling Dynamics – Magna Powertrain – Mississauga, Ontario, Canada
<Magna Seating>
-Magna Seating, an operating unit of the Company, announced that its Excelsior Springs facility in Missouri, U.S. has won a Silver World Excellence Award from Ford Motor Company for demonstrating superior quality, delivery and cost performance in 2010. The facility supplies seats for the Ford Escape. (From a press release on April 8, 2011)
<Cosma International>
-Cosma International, an operating unit of the Company and an automotive body and chassis systems supplier, announced that it has received the General Motors 2010 Supplier of the Year award, its fifth in a row and 12th overall. (From a press release on March 29, 2011)
R&D
R&D Facilities
<Magna Steyr>-Magna Steyr, an operating unit of the Company, announced that it has opened its new Shanghai Engineering Center located in the Jiading district, Shanghai, China. At full capacity, the new engineering center can hold approximately 500 employees and can build up to eight prototype vehicles per week. Magna Steyr began its operations in China in 2004. Since then Magna Steyr has grown to four engineering centers located throughout China and will open its first manufacturing facility with a fuel systems plant in Changchun, Jilin province later this year. (From a press release on September 8, 2011)
<Magna E-Car Systems>
-In 2010, Magna E-Car Systems, a joint venture with Stronach Trust announced the grand opening of its latest facility, a new hybrid- and electric-vehicle system development center and battery/materials testing facility in Auburn Hills, Michigan, USA. Including Auburn Hills, Magna E-Car Systems has four facilities throughout North America and three facilities in Europe working on several programs, including the Ford Focus Battery Electric Vehicle, a Volvo hybrid program and powertrain controllers for General Motors. (From a press release on September 20, 2010)
R&D Activities
<Magna E-Car Systems>-Magna E-Car Systems announced that it has developed a demonstration fleet of nine electric vehicles based on the Chevrolet Equinox crossover. The Equinox EV fleet is propelled by Magna E-Car Systems' electric drive system, which features an electric motor that generates maximum power of 105 kW with energy supplied from a 33kWh battery pack. The demonstration project is undertaken jointly with GM and with assistance to Magna E-Car Systems from an Ontario government grant. A joint GM-Magna E-Car Systems team has designed and built the Chevrolet Equinox Electric Vehicle (EV) demonstration units, working collaboratively from GM's Canadian Engineering Centre in Oshawa, Ontario, and Magna E-Car System's facility in Aurora, Ontario. Magna E-Car Systems led the design and vehicle integration of the propulsion and energy storage systems, with GM Canada providing engineering assistance in designing and validating the solution. (From a press release on November 17, 2011)
Product development
<Driver assistance system>-The Company announced that its Magna Electronics operating unit, in conjunction with Mobileye of Netherlands, its partner for image processing, has developed a driver assistance system that uses a single, forward-looking video camera to provide safety features such as forward collision and lane departure warnings. The Magna system has recently launched on General Motors vehicles in the North American market, available as an option on the 2012 Chevrolet Equinox and GMC Terrain. Magna Electronics has partnered on advanced driver assistance systems with Mobileye since 2005. The first product to be introduced was the Lane Departure Warning system based on the EyeQ1, Mobileye's System-on-Chip, launching also with General Motors on the Cadillac STS and DTS and Buick Lucerne. (From a press release on December 1, 2011)
Investment Activities
Capital Expenditure |
(in million dollars) |
| FY2011 | FY2010 | FY2009 | |
| Overall | 1,236 | 746 | 616 |
Investment Outside Canada
<E-Car Systems>-Magna E-Car Systems announced the opening of its new facility, a plant in Grand Blanc Township, Michigan, the U.S., that manufactures components for hybrid and electric vehicles. The 66,000-square-foot facility, which houses approximately 95 employees, makes electric motors, inverters and electronic powertrain controllers for the Ford Focus Electric, as well as inverters for the Fisker Karma. Including Grand Blanc Township, Magna E-Car Systems now has four facilities in North America and two in Europe. (From a press release on April 16, 2012)
<Magna Powertrain>
-Magna Powertrain, an operating unit of the Company, announced the construction of a new manufacturing facility in the Tianjin Airport Economic Area, China. The new facility will be approximately 13,500 square meters and could employ as many as 400 people at full production. Assembly of the first units is anticipated to commence in 2012. Magna Powertrain awarded a contract from Volkswagen to supply rear axle drives and power take-off units locally assembled Volkswagen and Audi models in China marks the starting point of this approximate 68 million dollars investment. Magna Powertrain has grown to three locations in China, including sales and engineering centers in Shanghai and Changzhou, Jiangsu province and a manufacturing facility in Changzhou. (From a press release on October 24, 2011)
<Cosma International>
-The Company announced the development of a new facility in San Luis Potosi, Mexico. This facility will be a division of Cosma International, an operating unit of the Company and an automotive body and chassis system supplier. The new facility is expected to be approximately 300,000 square feet with the ability to expand up to 450,000 square feet. It will employ approximately 700 people at full capacity and will produce stamped and welded assemblies. With the support of federal, state and municipal authorities from Mexico, the company plans to invest more than 100 million dollars to build the new facility. The launch of the plant is scheduled for June 2012. (From a press release on January 27, 2011)