Magna International Inc Q4 2020 Earnings Call Transcript

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

Question: Mark Neville - Scotiabank Global Banking and Markets, Research Division - Analyst : Maybe just first on, just to square away the conversation on the margin. So I understand, you're sort of telling us the starting point is, call it, 8.9%, the guide for next year is 7.3%, or sort of a bunch of sort of discrete items that sort of explain away the difference, JVs, mix, stuff like that. Is that sort of what you're doing?

Question: Mark Neville - Scotiabank Global Banking and Markets, Research Division - Analyst : And would you have seen much benefit in the second half of that restructuring?

Question: Mark Neville - Scotiabank Global Banking and Markets, Research Division - Analyst : Okay. On the CapEx discussion and, I guess, the complete vehicle discussion, just to be clear, the guidance for the next few years of $1.6 billion in CapEx roughly, does that sort of contemplate any capacity build for Complete Vehicle?

Question: Mark Neville - Scotiabank Global Banking and Markets, Research Division - Analyst : Okay. Can I just ask one -- just one last question. Just on buyback, I'm just curious when you might get back in the market?

Question: Peter Sklar - BMO Capital Markets Equity Research - Analyst : First, Vince, I just wanted to go back on your comment on the chip shortage and how you incorporated that into the forecast. So I think what you're saying, and correct me if I'm wrong, is that any loss volume that you're seeing globally as a result of the chip shortage, you anticipate it will be made up in the latter part of the year? So net-net, the chip shortage has had no impact on your guidance for full year 2021, although it does move the quarterly timing around, is that the right way to think about it?

Question: Peter Sklar - BMO Capital Markets Equity Research - Analyst : My second question is, like when you look at the segmented reporting, the bodies and Exteriors Group was particularly strong, both in revenue and had like a very unusually high margin. I'm just wondering is there anything in particular you can point to in that segment, GM light-truck volumes were strong? So I think that would be some of it. But is there anything else that you would want to call out in that segment?

Question: Peter Sklar - BMO Capital Markets Equity Research - Analyst : Yes. I know there's the GM strike last year.

Question: Peter Sklar - BMO Capital Markets Equity Research - Analyst : Okay. And then I just had one last question, if I may, for Swamy. Swamy, as you know, with the Ford and GM announcements that we've had over the course of the last week or so, the movement to vehicle electrification appears to gone to a sprint now with everybody trying to outdo themselves for a shorter time frame for the termination of making ice powertrain vehicles. So I'm just wondering if you thought there was any substance to those announcements or is it just more noise and perception on their part? And if this is more accelerated movement to battery electric vehicles, if that has caused you to pause and reassess your strategy at all in the investments you need to make?

Question: James Albert Picariello - KeyBanc Capital Markets Inc., Research Division - Analyst : Can you share the margin profile of the $650 million consolidated get track piece and how much equity income was taken out from that?

Question: James Albert Picariello - KeyBanc Capital Markets Inc., Research Division - Analyst : I could yes. I could just ask my next question if you find it, that's great, but otherwise, all right. Staying in the Power & Vision segment, can you provide any color on what's baked into the JV financials over the next few years, specifically? I mean you have the marker of the 50% revenue CAGR. You're more so interested in the equity income impact and kind of tying it to your total unconsolidated revenue growing more than $2 billion, right, from '21 to '23, curious what's the breakout there?

Question: James Albert Picariello - KeyBanc Capital Markets Inc., Research Division - Analyst : So within the $2 billion in growth for your total unconsolidated revenue, right, just over a 2-year period, I mean is the majority of that driven by HASCO and BJEV or just kind of the breakout of the 3 BJEVs that are growing? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. PRELIMINARY FEBRUARY 19, 2021 / 1:00PM, MG.TO - Q4 2020 Magna International Inc Earnings Call

Question: James Albert Picariello - KeyBanc Capital Markets Inc., Research Division - Analyst : Got it. Okay. And just at a high level, if we just bridge this year's guide to 2023 and you take the midpoint to get a sense for what 2022 looks like, I mean, even after adjusting for GETRAG, the entire implied 2022 framework is almost identical to the 2022 targets you laid out last year. So just curious, at a high level, what are the major driving forces you'd attribute to that storyline in terms of the earnings resilience?