Magna International, Inc.

Greetings and welcome to the Magna International Q4 and year-end 2023 results and 2024 outlook conference call. 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 press the 1 followed by the 4 on your telephone. Should you require operator assistance at any time, please press star 0. As a reminder, this conference is being recorded today, Friday, February 9, 2024. I would now like to turn the call over to Louis Tonelli, Vice President, Investor Relations.

Thanks. Hello, everyone, and welcome to our conference call covering our 2023 results and our 2024 outlooks. Joining me today are Swami Kodagiri and Pat McCann. Yesterday, our Board of Directors met and approved our financial results for the fourth quarter of 2023, as well as our 2024 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 magnum.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 disclaimer. please also refer to the reminder slide included in our presentation that relates to our commentary today. This morning, we will cover our 2023 highlights as well as our Q4 results. We will then provide our 24 outlook and lastly run through our financial strategy. And with that, I'll pass it over to Swami.

Thank you, Louis. Good morning, everyone. I appreciate you joining our call today and let's jump right in. Overall, I was pleased with our 2023 operating performance, including good launch execution that helped us to continue to drive organic sales growth over market and record sales of 42.8 billion. Great efforts at all levels to offset inflationary pressures and significant traction in removing costs and improving efficiencies across the company. We ended the year with solid Q4 results, considering we were slightly hampered by a couple of discrete items relative to our expectations. Pat will cover those. Our sales of $10.5 billion in the fourth quarter of 2023 were up 9% year over year, despite the UAW strikes that reduced sales by $275 million in the quarter and contributed to negative vehicle production mix for us relative to the comparable period in 2022. Adjusted EBIT increased 52% to $558 million in Q4, and EBIT margin increased 150 basis points to 5.3%. Adjusted EBIT margin ended the year at 5.2%, up 70 basis points year-over-year and in the middle of the 5.1 to 5.4% range we guided to in November of last year. Our adjusted EPS for the quarter was up 41% to $1.33 and ended the year at 5.49. And free cash flow in Q4 was $472 million, up 132 million relative to Q4 last year. Turning to key accomplishments in 2023, we executed on a number of short and midterm operational excellence activities which contributed about 75 basis points to margin expansion this past year and is expected to contribute a further 75 basis points combined over the next two years. Our customers continue to recognize our efforts in operational excellence and innovation. Last year, we received 107 customer awards in recognition of quality and operational performance, one reason we continue to win business. And in 2023, we committed to achieve net zero emissions by 2050. Operational excellence is enabled by our ongoing focus on people development. This past year, we launched our operational management accelerator program aimed at identifying and cultivating individuals within Magna to become future leaders in our divisions. For the second year in a row, Magna has been named one of the world's most ethical companies. And I'm proud that Magna received 16 leading employer recognitions this past year, including Fortune's world's most admired companies and Forbes' best employers, both for the seventh consecutive year. With respect to sales growth, We once again outgrew our markets in 2023. We were awarded about $12 billion in new business, which will contribute to further sales growth above market as these programs launch in the future. And we are on track with integration and synergies for the V&E acquisition. Lastly, our commitment to innovation has helped us win business, in core areas, including advanced high-volume front camera modules with a European-based global OEM, battery enclosures with four global OEMs, and eDrive systems with a European-based and North American-based global OEM. With that, I will pass it over to Pat to cover our financials in more detail.