Magna International (MG) investor relations material

Tariffs and trade impacts

• Direct tariff exposure reduced from $250M to $200M annually, with $55M expensed year-to-date.

• Focus on USMCA compliance and North American sourcing to mitigate tariffs.

• Indirect impacts on demand are uncertain; 2025 volume assumptions exclude OEM tariff pass-through.

• USMCA renewal in 2026 introduces uncertainty, but the interconnected industry makes drastic changes difficult.

• Tariff environment disproportionately affects Detroit-based customers, but mitigation efforts are ongoing.

Electrification and product strategy

• EV market weakness is mainly a North American issue; China remains strong, Europe slightly down.

• Most products are powertrain-agnostic, providing a natural hedge between ICE and EV.

• Capital spend for battery trays is largely complete; future benefits expected as EV volumes rise.

• Driveline business uses a platform strategy to support ICE, hybrid, and EV customers.

• Recent awards in hybrid and e-drive programs demonstrate adaptability to electrification trends.

Operational excellence and margin improvement

• Stability in production enables focus on automation and continuous improvement (CI) initiatives.

• Targeting 75 basis points of margin improvement between 2025 and 2026.

• Automation, such as AMRs and digital twins, is being scaled across global facilities.

• Execution on cost drivers and restructuring has supported EBIT margin growth despite lower sales.

• Innovation and operational improvements are increasingly driven by China-based facilities.