Magna International, Inc.

Greetings and welcome to the Q3 2023 results. During the presentation, all participants will be in a listen-only mode. Afterwards, we will conduct a question and answer session. At that time, if you have a question, please pass the 1 followed by the 4 on your telephone. If any time during the conference you need to reach an operator, you may press the start followed by the 0. As a reminder, this conference is being recorded today, Friday, November 3rd, 2023. I'll now like to turn the call over now to Louis Tonelli, Vice President, Investor Relations. Please go right ahead.

Thanks, Tommy. Hello, everyone, and welcome to our conference call covering our third quarter of 2023. Joining me today are Swampy Karnieri and Pat McCann. Yesterday, our Board of Directors met and approved our financial results for the third quarter of 2023, as well as our updated 2023 outlook. We issued a press release this morning outlining our results. You'll find the press release, today's conference call webcast, the slide presentations go along with the call, and our updated quarterly financial review, all in the investor relations section of our website at magda.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 than those expressed or implied in these statements. Please refer to today's press release for a complete description of our safe harbor disclaimer. Please also refer to the reminder slide included in our presentation that relates to our commentary today. And with that, I'll pass it over to Swami.

Thank you, Louis. Good morning, everyone. I appreciate you all joining our call today as we share our third quarter earnings results. Before I share some of the details, I want to thank my team for the continued progress and solid results. So let's get started. Some key highlights to mention before I dive into the details. Our organic sales grew by 10% year over year, surpassing weighted production by 4%, excluding complete vehicles, and 2% including complete vehicles. Our third quarter showcased strong operating performance with higher organic sales once again contributing to robust earnings that represented a significant improvement year over year. We continue to benefit from our activities in operational excellence and cost containment, leading to improved margins. We have raised our 2023 adjusted EBIT margin, and adjusted net income outlook ranges for 2023, demonstrating solid operating performance even with the negative impact of the UAW strike in the third and fourth quarters. And we recently announced our commitment to achieving net zero across Magna by 2050. Our industry continues to experience incremental improvements including reduced supply constraints, stronger and more stable production schedules and resilient auto sales in a number of markets. However, the global economy continues to face some interlocking challenges, including continuing elevated labor inflation, higher interest rates, geopolitical risks and slowing economic growth. These challenges are impacting our entire industry. In North America, the Detroit Three experienced UAW labor stoppages for about six weeks, which cost the industry approximately 220,000 units. The UAW has now reached tentative agreements with all three OEMs, which need to be ratified. Our outlook reflects the full extent of the strike. We remain highly focused on containing costs and improving our margins. This is being achieved through ongoing operational improvement and cost recovery initiatives, as well as executing flawless launches across Magna. At our virtual investor event in September, we provided an update on the progress of our go-forward strategy. Our ongoing investments in megatrend areas are driving significant growth over the coming years, including 35 plus percent in powertrain electrification, 75 plus percent in battery enclosures, and 45 plus percent in active safety. Most importantly, our portfolio is substantially aligned with the car of the future, which we expect to drive sales growth regardless of the pace of powertrain electrification. Where possible, we are working to mitigate risks including by installing capital in tranches and employing different cost sharing models with our customers. At the same time, we have been accelerating our activities around operational excellence to ensure we remain at the forefront of manufacturing and exceeding our customers' expectations in all areas. We expect about 150 basis points of margin expansion from our collective efforts here. including about half that amount this year. And we are leveraging capabilities that already exist within Magna to unlock opportunities with new models and markets as they develop. It is early days for us in this area, but we have already had some traction. We have experienced 5X growth in battery swaps in our battery as a service venture and are experiencing about 1,000 deliveries a day utilizing Magna produced bots. We expect about 300 million in new mobility sales by 2027 with a significant runway for additional profitable growth beyond that. We expect our strategy to deliver continued growth above market, improved margins and returns, and further shift in our portfolio towards megatrend areas. This should drive increased shareholder value in the years to come. We also took a significant step forward in our commitment to sustainability and environmental stewardship by submitting net zero emission targets for validation by the science-based targets initiative. with a goal to achieve net zero by 2050, together with meeting our near-term scope one, two, and three targets by 2030. Among the steps involved in meeting this target is transitioning to 100% renewable electricity use in our European operations by 2025 and globally by 2030. we have already made progress towards previously established sustainability actions. This year, we are on track to achieve our commitment to reduce global energy intensity by 10% in all manufacturing facilities with a target of 20% reduction by 2027. And more than 30 magna divisions have achieved carbon neutrality over the last two years. With that, I'll pass the call over to Pat.