Magna International Inc. (MGA) Q4 2022 Earnings Call Transcript

For the period ending December 31, 2022

February 10, 2023 8:00 a.m. ET

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks:

Operator

Greetings, and welcome to the Q4 and year-end 2022 results and 2023 Outlook Conference Call. [Operator Instructions] As a reminder, this conference is being recorded, Friday, February 10, 2023.

I would now like to turn the conference over to Louis Tonelli, Vice President of Investor Relations. Please go ahead.

Louis Tonelli

Thanks, Chris. Hello, everyone, and welcome to our conference call covering our '22 results and our 2023 outlook. Joining me today are Swamy Kotagiri, Vince Galifi and Pat McCann. Yesterday, our Board of Directors met and approved our financial results for 2022 as well as our financial outlook. We issued a press release this morning outlining both of these. You'll find the press release, today's conference call webcast, the slide presentation to go along with the call and our updated quarterly financial review all in the Investor Relations section of our website at magna.com.

Before we get started, just as a reminder, the discussion today may contain forward-looking information or forward-looking statements within the meaning of applicable securities legislation. Such statements involve certain risks, assumptions and uncertainties, which may cause the company's actual or future results and performance to be materially different from those expressed or implied in these statements.

Please refer to today's press release for a complete description of our safe harbor claimer. Please also refer to the reminder slide today included in our presentation that relates to our commentary.

This morning, we'll cover our 2022 highlights as well as our Q4 results. We'll then provide our 2023 outlook and lastly, run through our financial strategy.

And with that, I'll pass it over to Swamy.

Swamy Kotagiri

Thank you, Louis. Good morning, everyone. Today, I'll recap 2022, comment on our results and address our outlook. 2022 was another difficult year for the automotive industry and for Magna. The year started with continued supply chain disruptions, most notably the lack of semiconductor chips, which was expected to improve considerably during '22, but instead remain an issue throughout the year.

Although vehicle built recovered from the 2021 levels, OEM production schedules remained volatile throughout 2022, which drove significant inefficiencies in our operations, including tapped labor, overtime and staffing availability issues to name a few. It also had an adverse impact on our ability to achieve our continuous improvement plans and optimize our cost structure across the company. We also started 2022 expecting net input cost inflation of about $275 million year-over-year.