Q1 2020 Earnings Overview
Forward Looking Statements
A MAGNA
Certain statements in this presentation 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 presentation include, but are not limited to, statements relating to: the expected timing of the
resumption and ramp up of production in various regions; our actions in response to the COVID-19 (Coronavirus) pandemic, including with respect to: resumption of production; employee health and safety; actions to maintain liquidity, including suspension of
share repurchases for cancellation; reductions or freezing of capital and other expenditures; decremental margin expectations for the remainder of the year; Magna's ability to capitalize on growth opportunities in light-weighting, vehicle electrification, smart
mobility solutions, autonomous driving and other automotive trends; the timing and success of program launches; the ability to successfully implement our product group strategic priorities; our ability to successfully implement our financial strategy, including
future returns of capital to our shareholders through dividends and share repurchases; and expected free cash flow generation.
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 Automotive Industry
economic cyclicality;
regional production volume declines, including as a result of the COVID-19 (coronavirus)
pandemic;
intense competition;
potential restrictions on free trade;
trade disputes/tariffs;
Customer and Supplier Related Risks
concentration of sales with six customers;
shifts in market shares among vehicles or vehicle segments;
shifts in consumer "take rates" for products we sell;
quarterly sales fluctuations;
potential loss of any material purchase orders;
a deterioration in the financial condition of our supply base, including as a result of the
COVID-19 (Coronavirus) pandemic;
OEM consolidation;
Manufacturing Operational Risks
product and new facility launch risks;
operational underperformance;
restructuring costs;
impairment charges;
labour disruptions;
COVID-19 (Coronavirus) shutdowns;
supply disruptions, including as a result of the COVID-19 (coronavirus) pandemic;
climate change risks;
attraction/retention of skilled labour;
IT Security/Cybersecurity Risk
IT/Cybersecurity breach;
Product Cybersecurity breach;
Pricing Risks
pricing risks between time of quote and start of production;
price concessions;
commodity costs;
declines in scrap steel prices;
Warranty / Recall Risks
costs related to repair or replacement of defective products,
including due to a recall;
warranty or recall costs that exceed warranty provision or
insurance coverage limits;
product liability claims;
Acquisition Risks
inherent merger and acquisition risks;
acquisition integration risk;
Other Business Risks
risks related to conducting business through joint ventures;
our ability to consistently develop and commercialize innovative products or
processes;
our changing business risk profile as a result of increased investment in
electrification and autonomous driving, including: higher R&D and engineering
costs, and challenges in quoting for profitable returns on products for which we
may not have significant quoting experience;
risks of conducting business in foreign markets;
fluctuations in relative currency values;
tax risks;
reduced financial flexibility as a result of an economic shock;
changes in credit ratings assigned to us;
Legal, Regulatory and Other Risks
antitrust risk;
legal claims and/or regulatory actions against us; and
changes in laws and regulations, including those related to vehicle emissions.
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.
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