Magna International (MG) investor relations material

Strategic positioning and market outlook

• Broad product portfolio enables integration across vehicle systems and early OEM partnerships, supporting both ICE, hybrid, and EV platforms globally.

• Over 80% of offerings are powertrain-agnostic, allowing flexibility amid shifts in electrification and regional demand trends.

• Adjustments to EV investments in North America led to customer recoveries and lower CapEx in 2025 and 2026, with continued strong positioning in China and Europe.

• 2026 production outlook expects slight declines in North America and China, offset by growth in Europe; overall business projected down about 1%.

• Operational flexibility and cost management have enabled resilience through recent industry disruptions.

Financial performance and capital allocation

• EBIT margin expansion of 40-100 basis points expected in 2026, driven by operational excellence and higher revenue pull-through.

• Growth over market guidance for 2026 is 0%-3% (1%-4% excluding complete vehicles), supported by global program launches and strong content on new vehicles.

• Free cash flow forecasted at $1.6-$1.8 billion for 2026, with high conversion rates and disciplined CapEx management.

• Capital allocation priorities include maintaining strong investment-grade ratings, share buybacks, continued dividend growth, and selective reinvestment in the business.

Segment performance and operational initiatives

• Body Exteriors & Structures segment expects margin expansion to 8.2%-8.8% in 2026, driven by revenue pull-through and operational excellence.

• Power & Vision segment projects 5%-7% growth over market and margin improvement to 6%-6.6%, aided by launches, mix, and equity income.

• Seating segment faces mid-single digit sales decline due to program roll-offs but aims to hold margins through operational initiatives and new launches in 2027.

• Complete Vehicles segment sees sales decline from program roll-offs but stable margins, with new business from Chinese OEMs supporting future growth.

• Operational excellence includes thousands of plant-level initiatives and large-scale automation projects, contributing to sustained margin gains.