Magna International Inc. on Jan. 16 disclosed its financial outlook for 2020 and 2022 and said it is ending its partnership with ride-hailing company Lyft Inc. on self-driving technology.
The Canadian parts maker expects attributable net income for fiscal 2020 to come in between $1.8 billion and $2 billion and full-year sales to range between $38 billion and $40 billion. The company said it expects sales for 2020 to be negatively affected by foreign currency translation due to stronger U.S. dollar, the disposition of its fluid pressure and controls business, net of acquisitions, and lower-than-expected light-vehicle production in Europe.
For 2022, Magna expects total sales to come in between $40.5 billion and $43.5 billion and equity income to be between $175 million and $230 million.
Magna CFO Vince Galifi said that in the 2020-2022 time frame, the company expects to generate free cash flow of about $5.5 billion, which is more than 30% of its current market capitalization. He said Magna's capital allocation will remain focused on maintaining a strong balance sheet, investing to grow the businesses, and returning capital to shareholders.
Meanwhile, the company said it is terminating its agreement with Lyft to co-develop self-driving technologies but noted that they will continue to work together on autonomous developments, including hardware development and potential joint opportunities in software and hardware manufacturing.
Magna also said it appointed Swamy Kotagiri as president of the company. Kotagiri will report to CEO Don Walker and work with him to execute the company's overall strategy, which includes strengthening the alignment between its customer strategy, research and development initiatives, and new mobility activities.
Kotagiri will continue to oversee Magna's power and vision segment, as well as its corporate research and development programs and related investments, the company said.