UNITED STATES 

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 6-K

Report of Foreign Private Issuer Pursuant to Rule 13a-16 or 15d-16
under the Securities Exchange Act of 1934

For the month of May 2023

Commission File Number    001-11444

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.                                         

Form 20-F ¨                    Form 40-F x

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

EXHIBITS

Exhibit 99.1

PRESS RELEASE

AURORA, Ontario, May 5, 2023 — Magna International Inc. (TSX: MG; NYSE: MGA) today reported financial results for the first quarter ended March 31, 2023.

All results are reported in millions of U.S. dollars, except per share figures, which are in U.S. dollars

“Our strong first quarter operating performance reflects strong earnings on higher organic sales. More importantly, we are taking targeted actions to reduce expenses and optimize our cost structure. Our increased outlook is based on the strength of our first quarter results and the expected benefit of these targeted actions. We are highly focused on executing our strategy and remain confident in our ability to meet our long-term growth and margin outlook.”   - Swamy Kotagiri, Magna’s Chief Executive Officer

THREE MONTHS ENDED MARCH 31, 2023

We posted sales of $10.7 billion for the first quarter of 2023, an increase of 11% from the first quarter of 2022, which compares to a 3% increase in global light vehicle production, including 8% and 7% higher production in our two largest markets, North America and Europe, respectively. In addition to higher global production, our sales benefitted from higher volumes at our complete vehicles assembly segment, and the launch of new programs, while the net weakening of foreign currencies against the U.S. dollar negatively impacted sales.

Adjusted EBIT decreased to $437 million in the first quarter of 2023 compared to $507 million in the first quarter of 2022. The decrease mainly reflected higher net production input costs, operating inefficiencies at a facility in Europe, higher net engineering costs including spending relating to our electrification and ADAS businesses, lower net favourable commercial resolutions and higher net warranty costs. These declines were partially offset by earnings on higher sales and lower employee profit sharing and incentive compensation.

Income from operations before income taxes was $275 million for the first quarter of 2023 compared to $420 million in the first quarter of 2022, which includes Other expense, net⁽²⁾ of $142 million and $61 million, respectively. Excluding Other expense, net from both periods, income from operations before income taxes decreased $64 million in the first quarter of 2023 compared to the first quarter of 2022.   

Net income attributable to Magna International Inc. was $209 million for the first quarter of 2023 compared to $364 million in the first quarter of 2022, which includes after tax Other expense, net⁽²⁾ of $110 million and $48 million, respectively and Adjustments to Deferred Tax Valuation Allowances of $29 million in the first quarter of 2022. Excluding Other expense, net, after tax and Deferred Tax Valuation Allowances from both periods, net income attributable to Magna International Inc. decreased $64 million in the first quarter of 2023 compared to the first quarter of 2022.

Diluted earnings per share decreased to $0.73 in the first quarter of 2023, compared to $1.22 in the first quarter of 2022, and Adjusted diluted earnings per share decreased to $1.11 compared to $1.28.

In the first quarter of 2023, we generated cash from operations before changes in operating assets and liabilities of $568 million and used $341 million in operating assets and liabilities. Investment activities for the first quarter of 2023 included $424 million in fixed asset additions and a $101 million increase in investments, other assets and intangible assets.

RETURN OF CAPITAL TO SHAREHOLDERS

During the three months ended March 31, 2023, we paid dividends of $132 million.

Our Board of Directors declared a first quarter dividend of $0.46 per Common Share, payable on June 2, 2023 to shareholders of record as of the close of business on May 19, 2023.

Magna Announces first quarter 2023 results

CONNECT WITH MAGNA

2

SEGMENT SUMMARY 

For further details on our segment results, please see our Management’s Discussion and Analysis of Results of Operations and Financial Position and our Interim Financial Statements.

2023 OUTLOOK

We disclose a full-year Outlook annually in February with quarterly updates. The following Outlook is an update to our previous Outlook in February 2023.

Updated 2023 Outlook Assumptions 

Updated 2023 Outlook

Notes:  

⁽³⁾ Adjusted EBIT Margin is the ratio of Adjusted EBIT to Total Sales 

⁽⁴⁾ The Income Tax Rate has been calculated using Adjusted EBIT and is based on current tax legislation 

⁽⁵⁾ Net Income attributable to Magna represents Net Income excluding Other expense, net

Our Outlook is intended to provide information about management’s current expectations and plans and may not be appropriate for other purposes. Although considered reasonable by Magna as of the date of this document, the 2023 Outlook above and the underlying assumptions may prove to be inaccurate. Accordingly, our actual results could differ materially from our expectations as set forth herein. The risks identified in the “Forward-Looking Statements” section below represent the primary factors which we believe could cause actual results to differ materially from our expectations. 

Key Drivers of Our Business

Our operating results are primarily dependent on the levels of North American, European and Chinese car and light truck production by our customers. While we supply systems and components to every major original equipment manufacturer (“OEM”), we do not supply systems and components for every vehicle, nor is the value of our content consistent from one vehicle to the next. As a result, customer and program mix relative to market trends, as well as the value of our content on specific vehicle production programs, are also important drivers of our results.

OEM production volumes are generally aligned with vehicle sales levels and thus affected by changes in such levels. Aside from vehicle sales levels, production volumes are typically impacted by a range of factors, including: general economic and political conditions; labour disruptions; free trade arrangements; tariffs; relative currency values; commodities prices; supply chains and infrastructure; availability and relative cost of skilled labour; regulatory considerations, including those related to environmental emissions and safety standards; and other factors. Additionally, COVID-19 can impact vehicle production volumes, including through: mandatory stay-at-home orders which restrict production; elevated employee absenteeism; and supply chain disruptions.

Overall vehicle sales levels are significantly affected by changes in consumer confidence levels, which may in turn be impacted by consumer perceptions and general trends related to the job, housing and stock markets, as well as other macroeconomic and political factors. Other factors which typically impact vehicle sales levels and thus production volumes include: interest rates and/or availability of credit; fuel and energy prices; relative currency values; regulatory restrictions on use of vehicles in certain megacities; and other factors. Additionally, COVID-19 can impact vehicle sales, including through mandatory stay-at-home orders which restrict operations of car dealerships, as well as through a deterioration in consumer confidence.

NON-GAAP FINANCIAL MEASURES RECONCILIATION

The reconciliation of Non-GAAP financial measures is as follows:  

Adjusted EBIT  

Adjusted EBIT as a percentage of sales (“Adjusted EBIT margin”)       

Adjusted diluted earnings per share    

Certain of the forward-looking financial measures above are provided on a Non-GAAP basis. We do not provide a reconciliation of such forward-looking measures to the most directly comparable financial measures calculated and presented in accordance with U.S. GAAP. To do so would be potentially misleading and not practical given the difficulty of projecting items that are not reflective of on-going operations in any future period. The magnitude of these items, however, may be significant.

This press release together with our Management’s Discussion and Analysis of Results of Operations and Financial Position and our Interim Financial Statements are available in the Investor Relations section of our website at www.magna.com/company/investors and filed electronically through the System for Electronic Document Analysis and Retrieval (SEDAR) which can be accessed at www.sedar.com as well as on the United States Securities and Exchange Commission’s Electronic Data Gathering, Analysis and Retrieval System (EDGAR), which can be accessed at www.sec.gov.

We will hold a conference call for interested analysts and shareholders to discuss our first quarter ended March 31, 2023 results on Friday, May 5, 2023 at 8:00 a.m. ET. The conference call will be chaired by Swamy Kotagiri, Chief Executive Officer. The number to use for this call from North America is 1-800-584-0405. International callers should use 1-416-981-9017. Please call in at least 10 minutes prior to the call start time. We will also webcast the conference call at www.magna.com. The slide presentation accompanying the conference call as well as our financial review summary will be available on our website Friday prior to the call.

TAGS 

Quarterly earnings, financial results, vehicle production

INVESTOR CONTACT 

Louis Tonelli, Vice-President, Investor Relations 

louis.tonelli@magna.com │ 905.726.7035

MEDIA CONTACT 

Tracy Fuerst, Vice-President, Corporate Communications & PR 

tracy.fuerst@magna.com │ 248.761.7004

TELECONFERENCE CONTACT 

Nancy Hansford, Executive Assistant, Investor Relations 

nancy.hansford@magna.com │ 905.726.7108

OUR BUSINESS⁽⁶⁾

Magna is more than one of the world’s largest suppliers in the automotive space. We are a mobility technology company with a global, entrepreneurial-minded team of 171,000⁽⁷⁾ employees and an organizational structure designed to innovate like a startup. With 65+ years of expertise, and a systems approach to design, engineering and manufacturing that touches nearly every aspect of the vehicle, we are positioned to support advancing mobility in a transforming industry. Our global network includes 341 manufacturing operations and 88 product development, engineering and sales centres spanning 29 countries.

For further information about Magna (NYSE:MGA; TSX:MG), please visit www.magna.com or follow us on Twitter @MagnaInt. 

⁽⁶⁾ Manufacturing operations, product development, engineering and sales centres include certain operations accounted for under the equity method. 

⁽⁷⁾ Number of employees includes over 160,000 employees at our wholly owned or controlled entities and over 11,000 employees at certain operations accounted for under the equity method.

FORWARD-LOOKING STATEMENTS

Certain statements in this press release 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. The following table identifies the material forward-looking statements contained in this document, together with the material potential risks that we currently believe could cause actual results to differ materially from such forward-looking statements. Readers should also consider all of the risk factors which follow below the table:

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. In addition to the factors in the table above, 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:

In evaluating forward-looking statements or forward-looking information, we caution readers not to place undue reliance on any forward-looking statement. Additionally, 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:

Readers should also consider discussion of our risk mitigation activities with respect to certain risk factors, which can be also found in our Annual Information Form.

Exhibit 99.2

Magna International Inc.

First Quarter Report

2023

MAGNA INTERNATIONAL INC.

Management’s Discussion and Analysis of Results of Operations and Financial Position

Unless otherwise noted, all amounts in this Management’s Discussion and Analysis of Results of Operations and Financial Position [“MD&A”] are in U.S. dollars and all tabular amounts are in millions of U.S. dollars, except per share figures, which are in U.S. dollars. When we use the terms “we”, “us”, “our” or “Magna”, we are referring to Magna International Inc. and its subsidiaries and jointly controlled entities, unless the context otherwise requires.

This MD&A should be read in conjunction with the unaudited interim consolidated financial statements for the three months ended March 31, 2023 included in this Quarterly Report, and the audited consolidated financial statements and MD&A for the year ended December 31, 2022 included in our 2022 Annual Report to Shareholders.

This MD&A may contain statements that are forward looking. Refer to the “Forward-Looking Statements” section in this MD&A for a more detailed discussion of our use of forward-looking statements.

This MD&A has been prepared as at May 4, 2023.

USE OF NON-GAAP FINANCIAL MEASURES

In addition to results presented in accordance with accounting principles generally accepted in the United States of America [“U.S. GAAP”], this report includes the use of Adjusted earnings before interest and taxes [“Adjusted EBIT”], Adjusted EBIT as a percentage of sales, Adjusted diluted earnings per share, Return on Invested Capital and Adjusted Return on Invested Capital [collectively, the “Non-GAAP Measures”]. We believe these non-GAAP financial measures provide additional information that is useful to investors in understanding our underlying performance and trends through the same financial measures employed by our management for this purpose. Readers should be aware that Non-GAAP Measures have no standardized meaning under U.S. GAAP and accordingly may not be comparable to the calculation of similar measures by other companies. We believe that Return on Invested Capital is useful to both management and investors in their analysis of our results of operations and reflect our ability to generate returns. Similarly, we believe that Adjusted EBIT, Adjusted EBIT as a percentage of sales, Adjusted diluted earnings per share and Adjusted Return on Invested Capital provide useful information to our investors for measuring our operational performance as they exclude certain items that are not reflective of ongoing operating profit or loss and facilitate a comparison with prior periods. The presentation of any Non-GAAP Measures should not be considered in isolation or as a substitute for our related financial results prepared in accordance with U.S. GAAP. Non-GAAP financial measures are presented together with the most directly comparable U.S. GAAP financial measure, and a reconciliation to the most directly comparable U.S. GAAP financial measure, can be found in the “Non-GAAP Financial Measures Reconciliation” section of this MD&A.

HIGHLIGHTS 

Comparing the first quarter of 2023 to the first quarter of 2022:

In addition, in the first quarter of 2023:

Magna International Inc. First Quarter Report 2023 1

OVERVIEW 

OUR BUSINESS⁽¹⁾

Magna is more than one of the world’s largest suppliers in the automotive space. We are a mobility technology company with a global, entrepreneurial-minded team of over 171,000⁽²⁾ employees and an organizational structure designed to innovate like a startup. With 65+ years of expertise, and a systems approach to design, engineering and manufacturing that touches nearly every aspect of the vehicle, we are positioned to support advancing mobility in a transforming industry. Our global network includes 341 manufacturing operations and 88 product development, engineering and sales centres spanning 29 countries. Our common shares trade on the Toronto Stock Exchange (MG) and the New York Stock Exchange (MGA).

INDUSTRY TRENDS & RISKS

Our operating results are primarily dependent on the levels of North American, European and Chinese car and light truck production by our customers. While we supply systems and components to every major original equipment manufacturer [“OEM”], we do not supply systems and components for every vehicle, nor is the value of our content consistent from one vehicle to the next. As a result, customer and program mix relative to market trends, as well as the value of our content on specific vehicle production programs, are also important drivers of our results.

Ordinarily, OEM production volumes are aligned with vehicle sales levels and thus affected by changes in such levels. Aside from vehicle sales levels, production volumes are typically impacted by a range of factors, including: general economic and political conditions; labour disruptions; free trade arrangements; tariffs; relative currency values; commodities prices; supply chains and infrastructure; availability and relative cost of skilled labour; regulatory considerations, including those related to environmental emissions and safety standards; and other factors.

Overall vehicle sales levels are significantly affected by changes in consumer confidence levels, which may in turn be impacted by consumer perceptions and general trends related to the job, housing and stock markets, as well as other macroeconomic and political factors. Other factors which typically impact vehicle sales levels and thus production volumes include: interest rates and/or availability of credit; fuel and energy prices; relative currency values; regulatory restrictions on use of vehicles in certain megacities; and other factors.

While the foregoing economic, political and other factors are part of the general context in which the global automotive industry operates, there have been a number of significant industry trends that are shaping the future of the industry and creating opportunities and risks for automotive suppliers. We continue to implement a business strategy which is rooted in our best assessment as to the rate and direction of change in the automotive industry, including with respect to trends related to vehicle electrification and advanced driver assistance systems, as well as new mobility business models/“mobility-as-a-service” [“MaaS”]. Our short- and medium-term operational success, as well as our ability to create long-term value through our business strategy, are subject to a number of risks and uncertainties. Significant industry trends, our business strategy and the major risks we face, are discussed in our revised Annual Information Form [“AIF”] and Annual Report on Form 40-F / 40-F/A [“Form 40-F”] in respect of the year ended December 31, 2022, together with subsequent filings. Those industry trends and risk factors remain substantially unchanged in respect of the first quarter ended March 31, 2023.

¹ Manufacturing operations, product development, engineering and sales centres include certain operations accounted for under the equity method. 

² Number of employees includes over 160,000 employees at our wholly owned or controlled entities and approximately 11,000 employees at certain operations accounted for under the equity method.

2 Magna International Inc. First Quarter Report 2023

RESULTS OF OPERATIONS

AVERAGE FOREIGN EXCHANGE

The preceding table reflects the average foreign exchange rates between the most common currencies in which we conduct business and our U.S. dollar reporting currency.

The results of operations for which the functional currency is not the U.S. dollar are translated into U.S. dollars using the average exchange rates for the relevant period. Throughout this MD&A, reference is made to the impact of translation of foreign operations on reported U.S. dollar amounts where relevant.

Our results can also be affected by the impact of movements in exchange rates on foreign currency transactions (such as raw material purchases or sales denominated in foreign currencies). However, as a result of hedging programs employed by us, foreign currency transactions in the current period have not been fully impacted by movements in exchange rates. We record foreign currency transactions at the hedged rate where applicable.

Finally, foreign exchange gains and losses on revaluation and/or settlement of monetary items denominated in a currency other than an operation’s functional currency impact reported results. These gains and losses are recorded in selling, general and administrative expense.

LIGHT VEHICLE PRODUCTION VOLUMES

Our operating results are mostly dependent on light vehicle production in the regions reflected in the table below:

Light Vehicle Production Volumes (thousands of units)

Overall, global light vehicle production increased 3% over the first quarter of 2022, largely reflecting the significant industry production disruptions during the first quarter of 2022 caused by global semiconductor chip shortages and the Russian invasion of Ukraine. The industry disruption caused by global semiconductor chip shortages continued in the first quarter of 2023, but to a lesser extent than we experienced in the first quarter of 2022.

North America and Europe light vehicle production volumes benefited from improved semiconductor chip availability. However, Europe light vehicle production volumes were unfavourably impacted by lost production due to the Russian invasion of Ukraine while China volumes were unfavourably impacted by cautious consumer confidence levels.

Magna International Inc. First Quarter Report 2023 3

RESULTS OF OPERATIONS – FOR THE THREE MONTHS ENDED MARCH 31, 2023

SALES

Sales increased 11% or $1.03 billion to $10.67 billion for the first quarter of 2023 compared to $9.64 billion for the first quarter of 2022 primarily due to:

These factors were partially offset by:

COST OF GOODS SOLD

Cost of goods sold increased $1.02 billion to $9.42 billion for the first quarter of 2023 compared to $8.40 billion for the first quarter of 2022, primarily due to:

These factors were partially offset by:

DEPRECIATION AND AMORTIZATION

Depreciation and amortization decreased $4 million to $365 million for the first quarter of 2023 compared to $369 million for the first quarter of 2022 primarily due to the net weakening of foreign currencies against the U.S. dollar, which decreased reported U.S. dollar depreciation and amortization by $13 million partially offset by increased capital deployed at new and existing facilities to support the launch of programs subsequent to the first quarter of 2022.

4 Magna International Inc. First Quarter Report 2023

SELLING, GENERAL AND ADMINISTRATIVE [“SG&A”]

SG&A expense increased $102 million to $488 million for the first quarter of 2023 compared to $386 million for the first quarter of 2022, primarily as a result of:

These factors were partially offset by the net weakening of foreign currencies against the U.S. dollar, which decreased reported U.S. dollar SG&A expense by $16 million.

INTEREST EXPENSE, NET

During the first quarter of 2023, we recorded net interest expense of $20 million compared to $26 million for the first quarter of 2022. The $6 million decrease is primarily a result of a $4 million make-whole payment in February 2022, and higher interest income earned on cash and investments due to higher interest rates. These were partially offset by higher interest expense due to an increase in borrowings and higher interest rates.

EQUITY INCOME

Equity income increased $13 million to $33 million for the first quarter of 2023 compared to $20 million for the first quarter of 2022, primarily as a result of earnings on higher sales at certain equity-accounted entities and acquisitions subsequent to the first quarter of 2022 partially offset by the net weakening of foreign currencies against the U.S. dollar, which decreased reported U.S. dollar equity income by $2 million.

OTHER EXPENSE, NET

During the first quarter of 2023, we initiated restructuring plans to right-size our business in an effort to optimize our footprint. These restructuring plans include plant closures and workforce reductions in the amount of $118 million [$92 million after tax]. Of the total charges, $105 million [$82 million after tax] was recorded in our Power & Vision segment, and $13 million [$10 million after tax] in our Body Exteriors & Structures segment.

Magna International Inc. First Quarter Report 2023 5

INCOME FROM OPERATIONS BEFORE INCOME TAXES

Income from operations before income taxes was $275 million for the first quarter of 2023 compared to a $420 million for the first quarter of 2022. This $145 million decrease is a result of the following changes, each as discussed above:

INCOME TAXES

During the first quarter of 2022 we recorded a partial release of valuation allowances against certain deferred tax assets as a result of a tax reorganization [“Adjustments to Deferred Tax Valuation Allowances”].

Excluding the tax effect on Other expense, net, and the Adjustments to Deferred Tax Valuation Allowances our effective income tax rate increased to 21.6% for the first quarter of 2023 compared to 17.3% for the first quarter of 2022 primarily due to higher losses not benefited in Europe and lower net favourable adjustments related to changes in tax laws. These factors were partially offset by a lower accrued tax on undistributed foreign earnings.

6 Magna International Inc. First Quarter Report 2023

INCOME ATTRIBUTABLE TO NON-CONTROLLING INTERESTS

Income attributable to non-controlling interests was $8 million for the first quarter of 2023 compared to $15 million for the first quarter of 2022. This $7 million change was primarily due to lower net income at our non-wholly owned operations in China.

NET INCOME ATTRIBUTABLE TO MAGNA INTERNATIONAL INC.

Net income attributable to Magna International Inc. was $209 million for the first quarter of 2023 compared to $364 million for the first quarter of 2022. This $155 million decrease was as a result of: a decrease in income from operations before income taxes of $145 million; and a $17 million increase in income taxes; partially offset by a $7 million decrease in income attributable to non-controlling interests.

EARNINGS PER SHARE

Diluted earnings per share was $0.73 for the first quarter of 2023 compared to diluted earnings per share of $1.22 for the first quarter of 2022. The $0.49 decrease was as a result of lower net income attributable to Magna International Inc., as discussed above, partially offset by a decrease in the weighted average number of diluted shares outstanding during the first quarter of 2023. The decrease in the weighted average number of diluted shares outstanding was primarily due to the purchase and cancellation of Common Shares, during or subsequent to the first quarter of 2022, pursuant to our normal course issuer bids and a decrease in diluted shares relating to outstanding stock options as a result of the decrease in our share price.

Other expense, net, after tax, and Adjustments to Deferred Tax Valuation Allowances negatively impacted diluted earnings per share by $0.38 in the first quarter of 2023 and $0.06 in the first quarter of 2022, respectively, as discussed in the “Other expense, net” and “Income Taxes” sections above.

Adjusted diluted earnings per share, as reconciled in the “Non-GAAP Financial Measures Reconciliation” section, was $1.11 for the first quarter of 2023 compared to $1.28 in the first quarter of 2022.

Magna International Inc. First Quarter Report 2023 7

NON-GAAP PERFORMANCE MEASURES – FOR THE THREE MONTHS ENDED MARCH 31, 2023

ADJUSTED EBIT AS A PERCENTAGE OF SALES

The table below shows the change in Magna’s Sales and Adjusted EBIT by segment and the impact each segment’s changes had on Magna’s Adjusted EBIT as a percentage of sales for the first quarter of 2023 compared to the first quarter of 2022:

Adjusted EBIT as a percentage of sales decreased to 4.1% for the first quarter of 2023 compared to 5.3% for the first quarter of 2022 primarily due to:

These factors were partially offset by:

8 Magna International Inc. First Quarter Report 2023

ADJUSTED RETURN ON INVESTED CAPITAL AND RETURN ON INVESTED CAPITAL

Adjusted Return on Invested Capital decreased to 8.4% for the first quarter of 2023 compared to 10.4% for the first quarter of 2022 as a result of a decrease in Adjusted After-tax operating profits and higher Average Invested Capital. Other expense, net, after tax and Adjustments to Deferred Tax Valuation Allowances negatively impacted Return on Invested Capital by 2.7% in the first quarter of 2023 and by 0.5% in the first quarter of 2022.

Average Invested Capital increased $133 million to $16.32 billion for the first quarter of 2023 compared to $16.19 billion for the first quarter of 2022, primarily due to:

These factors were partially offset by:

Magna International Inc. First Quarter Report 2023 9

SEGMENT ANALYSIS

We are a global automotive supplier that has complete vehicle engineering and contract manufacturing expertise, as well as product capabilities which include body, chassis, exterior, seating, powertrain, active driver assistance, electronics, mechatronics, mirrors, lighting and roof systems. We also have electronic and software capabilities across many of these areas.

Our reporting segments are: Body Exteriors & Structures; Power & Vision; Seating Systems; and Complete Vehicles.

BODY EXTERIORS & STRUCTURES

Sales – Body Exteriors & Structures

Sales increased 9% or $362 million to $4.44 billion for the first quarter of 2023 compared to $4.08 billion for the first quarter of 2022 primarily due to:

These factors were partially offset by:

10 Magna International Inc. First Quarter Report 2023

Adjusted EBIT and Adjusted EBIT as a percentage of sales – Body Exteriors & Structures

Adjusted EBIT increased $41 million to $270 million for the first quarter of 2023 compared to $229 million for the first quarter of 2022 and Adjusted EBIT as a percentage of sales increased to 6.1% from 5.6%. These increases were primarily due to:

These factors were partially offset by:

POWER & VISION

Sales – Power & Vision

Sales increased 9% or $277 million to $3.32 billion for the first quarter of 2023 compared to $3.05 billion for the first quarter of 2022 primarily due to:

These factors were partially offset by:

Magna International Inc. First Quarter Report 2023 11

Adjusted EBIT and Adjusted EBIT as a percentage of sales – Power & Vision

Adjusted EBIT decreased $70 million to $84 million for the first quarter of 2023 compared to $154 million for the first quarter of 2022 and Adjusted EBIT as a percentage of sales decreased to 2.5% from 5.1%. These decreases were primarily due to:

These factors were partially offset by:

SEATING SYSTEMS

Sales – Seating Systems

Sales increased 8% or $110 million to $1.49 billion for the first quarter of 2023 compared to $1.38 billion for the first quarter of 2022 primarily due to:

These factors were partially offset by the net weakening of foreign currencies against the U.S. dollar, which decreased reported U.S. dollar sales by $42 million and net customer price concessions subsequent to the first quarter of 2022.

12 Magna International Inc. First Quarter Report 2023

Adjusted EBIT and Adjusted EBIT as a percentage of sales – Seating Systems

Adjusted EBIT decreased $13 million to $36 million for the first quarter of 2023 compared to $49 million for the first quarter of 2022 and Adjusted EBIT as a percentage of sales decreased to 2.4% from 3.6%. These decreases were primarily due to:

These factors were partially offset by earnings on higher sales.

COMPLETE VEHICLES

(i)       Vehicles produced at our Complete Vehicle operations are included in Europe Light Vehicle Production volumes.

Sales – Complete Vehicles

Sales increased 28% or $351 million to $1.63 billion for the first quarter of 2023 compared to $1.28 billion for the first quarter of 2022 and assembly volumes increased 38%. The increase in sales is primarily a result of higher assembly volumes partially offset by a $75 million decrease in reported U.S. dollar sales as a result of the weakening of the euro against the U.S. dollar.

Magna International Inc. First Quarter Report 2023 13

Adjusted EBIT and Adjusted EBIT as a percentage of sales – Complete Vehicles

Adjusted EBIT increased $2 million to $52 million for the first quarter of 2023 compared to $50 million for the first quarter of 2022 while Adjusted EBIT as a percentage of sales decreased to 3.2% from 3.9%. Adjusted EBIT was higher primarily as a result of higher earnings due to higher assembly volumes, net of contractual fixed cost recoveries on certain programs. Excluding this factor, Adjusted EBIT and Adjusted EBIT as a percentage of sales were lower primarily due to:

These factors were partially offset by lower employee profit sharing.

CORPORATE AND OTHER

Adjusted EBIT was a loss of $5 million for the first quarter of 2023 compared to earnings of $25 million for the first quarter of 2022. The $30 million decrease was primarily the result of:

These factors were partially offset by an increase in fees received from our divisions.

14 Magna International Inc. First Quarter Report 2023

FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES

OPERATING ACTIVITIES

Cash provided from operating activities

Comparing the first quarter of 2023 to 2022, cash generated from operating activities increased $47 million primarily as a result of a $607 million increase in cash received from customers.

This factor was partially offset by:

Changes in operating assets and liabilities

Consistent with the seasonality of our business, we invested in operating assets and liabilities during the first quarter of 2023. During the first quarter of 2023, we used $341 million for operating assets and liabilities primarily as a result of higher operating activity in the month of March 2023 compared to the month of December 2022. Specifically, we used cash for operating assets and liabilities for:

These uses of cash were partially offset by an increase in accounts payable.

Magna International Inc. First Quarter Report 2023 15

INVESTING ACTIVITIES

Cash used for investing activities in the first quarter of 2023 was $256 million higher compared to the first quarter of 2022. The change between the first quarter of 2023 and the first quarter of 2022 was primarily due to a $223 million increase of cash used for fixed assets, investments, other assets, and intangible assets.

In addition, during the fourth quarter of 2022, we entered into an agreement to sell a European Power & Vision operation in early 2023. Under the terms of the arrangement, we are contractually obligated to provide the buyer with up to $42 million of funding, resulting in a loss of $58 million [$57 million after tax] recognized in 2022. During the first quarter of 2023, we completed the sale of this operation which resulted in a net cash outflow of $25 million.

FINANCING ACTIVITIES

During the first quarter of 2023, we issued the following Senior Notes [the “Senior Notes”]:

The total cash proceeds received from the Senior Note issuances was $1,637 million, which consists of $1,649 million of Senior Notes less debt issuance costs of $12 million.

The Senior Notes are unsecured obligations and do not include any financial covenants. We may redeem the Senior Notes in whole or in part at any time, and from time to time, at specified redemption prices determined in accordance with the terms of the indenture governing the Senior Notes. Refer to Note 9, “Debt” of our unaudited interim consolidated financial statements for the three months ended March 31, 2023.

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During the first quarter of 2023 we repurchased 0.1 million Common Shares under normal course issuer bids for aggregate cash consideration of $9 million.

Cash dividends paid per Common Share were $0.46 for the first quarter of 2023 compared to $0.45 for the first quarter of 2022.

FINANCING RESOURCES

Financial liabilities increased $1.70 billion to $6.78 billion as at March 31, 2023 primarily as a result the issuance of the Senior Notes during the first quarter of 2023.

CASH RESOURCES

In the first quarter of 2023, our cash resources increased by $1.2 billion to $2.4 billion, primarily as a result of cash provided from financing and operating activities partially offset by cash used for investing activities, as discussed above. In addition to our cash resources at March 31, 2023, we had term and operating lines of credit totaling $5.1 billion, of which $4.9 billion was unused and available.

On March 6, 2023, we entered into a syndicated, unsecured, delayed draw term loan (the “Term Loan”) with a 3-year tranche of $800 million and a 5-year tranche of $600 million. The purpose of the Term Loan was to back stop our access to Debt Capital Markets in the event of disruptions that could restrict access to markets and to finance a portion of the pending acquisition of the Veoneer Active Safety Business and pay related fees and expenses. On April 21, 2023, we reduced the 3-year tranche amount to $300 million and the 5-year tranche amount to $400 million. Refer to the “Subsequent Events” section in this MD&A.

MAXIMUM NUMBER OF SHARES ISSUABLE

The following table presents the maximum number of shares that would be outstanding if all of the outstanding options at May 4, 2023 were exercised:

CONTRACTUAL OBLIGATIONS

There have been no material changes with respect to the contractual obligations requiring annual payments during the first quarter of 2023 that are outside the ordinary course of our business. Refer to our MD&A included in our 2022 Annual Report.

SUBSEQUENT EVENTS

Reduction of term loan facility

Refer to the “Cash Resources” section in this MD&A.

AMENDMENT TO CREDIT FACILITY

On April 27, 2023 we amended our $2.7 billion syndicated revolving credit facility, including to: (i) extend the maturity date from June 24, 2027 to June 24, 2028, and (ii) cancel the $150 million Asian tranche and allocate the equivalent amount to the Canadian dollar tranche.

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COMMITMENTS AND CONTINGENCIES

From time to time, we may be contingently liable for litigation, legal and/or regulatory actions and proceedings and other claims. Refer to Note 13, “Contingencies” of our unaudited interim consolidated financial statements for the three months ended March 31, 2023, which describes these claims.

For a discussion of risk factors relating to legal and other claims/actions against us, refer to “Item 5. Risk Factors” in our AIF and Form 40-F, each in respect of the year ended December 31, 2022.

CONTROLS AND PROCEDURES

There have been no changes in our internal controls over financial reporting that occurred during the three months ended March 31, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

NON-GAAP FINANCIAL MEASURES RECONCILIATION

The reconciliation of Non-GAAP financial measures is as follows:

ADJUSTED EBIT

ADJUSTED EBIT AS A PERCENTAGE OF SALES

ADJUSTED DILUTED EARNINGS PER SHARE

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RETURN ON INVESTED CAPITAL AND ADJUSTED RETURN ON INVESTED CAPITAL

Return on Invested Capital is calculated as After-tax operating profits divided by Average Invested Capital for the period. Adjusted Return on Invested Capital is calculated as Adjusted After-tax operating profits divided by Average Invested Capital for the period. Average Invested Capital for the three month period is averaged on a two-fiscal quarter basis.

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FORWARD-LOOKING STATEMENTS

Certain statements in this MD&A may 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 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:

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In evaluating forward-looking statements, we caution readers not to place undue reliance on any forward-looking statement. Additionally, 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:

Readers should also consider discussion of our risk mitigation activities with respect to certain risk factors, which can also be found in our Annual Information Form.

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MAGNA INTERNATIONAL INC. 

CONSOLIDATED STATEMENTS OF INCOME 

[Unaudited] 

[U.S. dollars in millions, except per share figures]

See accompanying notes

22 Magna International Inc. First Quarter Report 2023

MAGNA INTERNATIONAL INC. 

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME 

[Unaudited] 

[U.S. dollars in millions]

See accompanying notes

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MAGNA INTERNATIONAL INC. 

CONSOLIDATED BALANCE SHEETS 

[Unaudited] 

[U.S. dollars in millions]