Magna International Inc.

Presenters: Remaining Group Members:

Arora, MilenQureshy, SherryVardar, EzgiWilson, David

Lee, SaulengSadeddin, KhaledSorbara, Domenico

Agenda

Company History Key Strategic Issues Resourced Based Company SWOT

Analysis Company Performance Alternatives Decision Criteria Recommended Course of Action Implementation and Contingency

Plan

Company History

1957: Frank Stronach opened a one-man tool and die shop called Multimatic1960: Received its first auto parts contract with General Motors to produce metal-stamped sun visor brackets1962: Magna Electronics Corporation Limited became a public company on the Toronto Stock Exchange under the symbol MG1969: Multimatic merged with Magna Electronics Corporation Limited, a publicly traded aerospace, defence and industrial components manufacturer1970: Automotive operations expanded to include a greater number of stamped and electro-mechanical components

1973: Magna Electronics Corporation Limited changed its name to Magna International Inc.1976: Magna implemented a major product diversification strategy and divisions were organized into main product groups

1960 1970 1980

1957 19601962 1973 19761969 1970

Continued

1979: Magna enters the automotive plastics business1981: Magna sells its aerospace and defence operations

1984: Magna formally adopts a Corporate Constitution, entrenching its previous long-standing commitment guaranteeing the rights of employees, shareholders and management to share in the profits they help produce1987: Magna organizes its manufacturing divisions into Automotive Systems Operating Groups to become full-service suppliers for many key systems of the automobile

1989: Magna co-designs and co-develops the integrated child safety seat, recognized by the Smithsonian Institute as one of the great innovations of the 1980s1990: Ford Motor Company awards Magna the first major program to supply “bolt-in” door modules incorporating all interior door hardware

1992: Magna obtains a listing on the New York Stock Exchange

1980 1990 2000

1984 1989 19921979 1981 1987 1990

Continued

1996: Magna undergoes a major European expansion, acquiring a number of European-based automotive systems suppliers1998: Magna acquires Steyr-Daimler-Puch, one of the world’s leading automotive technology and engineering companies with complete vehicle assembly capabilities

1999: Magna is named the world’s top auto parts company in Forbes Magazine2000: Magna spun off MEC, one of its business operations, as a separate public company2001: Magna announces the formation of the Magna Steyr group

2005: Magna improves strategic positioning by privatizing three public subsidiaries (allows it to better exploit competencies)

1980 1990 2000

20051996 19991998 20002001

Key Strategic Issues

Resource Based Company SWOT Analysis

Company Performance

Share Price 2004-2009

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Mergers and Acquisitions 2004

Takes minority stake in I&T GmbH (electrical) Completed the acquisition of the worldwide operations

of DaimlerChrysler Corporation's wholly-owned subsidiary, New Venture Gear, Inc (automotive transmissions and a all-wheel drive transfer cases)

Acquires facility in Mexico from Wagon PLC (engineered metal)

2005 Acquires Tesma International Inc (powertrain) Decoma (exterior), Inteir (interior), TS Fahrzeug-

Dachsysteme GmbH (roofing systems)

Continued

2006 Acquires Porsche Engineering Services NA from

Porsche AG (automotive engineering services)

2007 Minority stake 20% ($1.54 billion USD) stake given to

Russian industrial conglomerates – Russian Machines

2008 Acquires Technoplast – Russian auto parts

manufacturer (plastic interior/exterior) Creditors force Russian stakeholder to give up 20%

stake in Magna

Continued

Since the 1990s, Magna has made 24 acquisitions while taking stakes in 9 companies

Year Acquisitions Stakes

2009 0 0

2008 1 0

2007 0 0

2006 3 0

2005 3 0

2004 3 1

Income Statement

2004 2005 2006 2007 20080

10

20

Revenue (in billions of USD)

MARGIN ANALYSIS

Gross Margin 10.30%

Net Profit Margin -1.63%

Operating Margin -0.91%

2004 2005 2006 2007 20080

250

500

Net Income (in millions of USD)

PROFITABILITY

Return on Assets -2.45%

Return on Equity -4.26%

Return on Investment -3.86%

Continued

Year on year, Magna’s revenues fell 9.07% from $26.07 billion USD to $23.70 billion USD

This along with an increase in the cost of goods sold expense has contributed to a reduction in net income from $663.00 million USD to $71.00 million USD – a 89.29% decrease

Cash Flow

2004 2005 2006 2007 2008-5000

5001000

Cash Flow (in millions of USD) Cash Flow per Share

5.02

Price/Cash Flow per Share 9.83

2004 2005 2006 2007 20080

1

2

Cash (in billions of USD)Book Value per Share 72.67

Tangible Book Value per Share 60.91

Continued

In 2008, cash reserves at Magna fell by $197.00 million USD

However, the company earned $1.05 billion USD from its operations for a cash flow margin of 4.45%

In addition, the company generated $89.00 million USD in cash from financing while $1.06 billion USD was spent on investing

Balance Sheet

2004 2005 2006 2007 20080

10

Total Assets (in billions of USD) CREDIT RATIOS

Current Ratio 1.50

Quick Ratio 1.11

2004 2005 2006 2007 20080

5001000

Total Debt (in millions of USD)

LONG-TERM SOLVENCY

Total Debt/Total Equity 0.0582

Total Debt/Total Capital 0.055

Continued

Magna has a debt to total capital ratio of 0.05%, little changed from the previous year's 0.00%

Alternatives

Decision Criteria

Recommended Course of Action

Implementation and Contingency Plan