Magna International Inc Q2 2019 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Aileen Elizabeth Smith - BofA Merrill Lynch, Research Division - Analyst : This is Aileen Smith on for John. First question, if I look at your full year margin outlook of 6.6% to 6.9% and what you put up in the first half, it looks like your margins are going to be roughly flattish in the back half of the year versus what's been a typical sequential step down from 1H to 2H. Is this just a function of easier year-over-year comps from a tough first half? Or does this bake in meaningful progress and traction on some of the operational inefficiencies and excess costs that you've outlined so far this year?

Question: Aileen Elizabeth Smith - BofA Merrill Lynch, Research Division - Analyst : Great. That's very helpful. Second question, one of the hot topics of discussion among suppliers this quarter has been pricing dynamics. And you said in the press release a few times normal customer price concessions. But then in one segment you noted favorable customer price resolutions and commercial settlements. Can you characterize the pricing environment broadly with your customers? Are they pushing back on price in any significant way? Or has your ability to push this down to your supply chain proven more difficult in recent quarters? And does the pricing dynamics differ across your segments and products in any way?

Question: Aileen Elizabeth Smith - BofA Merrill Lynch, Research Division - Analyst : Okay, and one last question if I may. A bit of a longer term but you mentioned some of the work that you're doing on Power & Vision in the second quarter. Is there any reason that Power & Vision can't return to an 8% to 10% margin business over the long term after some of the higher engineering costs for electrification and autonomy are worked through and your joint ventures and equity income potentially recover?

Question: James Albert Picariello - KeyBanc Capital Markets Inc., Research Division - Analyst : Can you just quantify the ADAS spending in the quarter? I mean it sounds like your full year outlook related to these costs is unchanged. But just curious if you could provide some color on the quarter. And then is there any change to the separate bucket of that incremental autonomous and electrification spend? I believe that was on track for an incremental $70 million this year, if that's right?

Question: James Albert Picariello - KeyBanc Capital Markets Inc., Research Division - Analyst : Okay, that's helpful. And on Seating, can you talk about the launch costs and the new facility inefficiencies that affected the quarter? You obviously lowered your margin guidance for the full year. So just curious what the trajectory is for these headwinds through the back half? And I also saw without the prior written consent of Thomson Reuters. 'Thomson Reuters' and the Thomson Reuters logo are registered trademarks of Thomson Reuters and its affiliated companies. AUGUST 08, 2019 / 12:00PM, MG.TO - Q2 2019 Magna International Inc Earnings Call that Magna's opening up its first seat structures plant in the U.S. I believe it's an initial award for a plug-in model early next year. So are you seeing any additional opportunity more broadly within the structures portion of the business given some of the known competitor dynamics out there within that business?

Question: James Albert Picariello - KeyBanc Capital Markets Inc., Research Division - Analyst : Got it. And then the seat structures plant.