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Magna International Meeting of Shareholders

Magna International Meeting of Shareholders. Vincent J. Galifi Executive Vice-President and Chief Financial Officer. May 2, 2006. Overview. 2005 highlights 2005 financial results Current environment First quarter results – March 31, 2006 2006 outlook. 2005 Highlights.

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Magna International Meeting of Shareholders

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  1. Magna International Meeting of Shareholders Vincent J. GalifiExecutive Vice-President and Chief Financial Officer May 2, 2006

  2. Overview • 2005 highlights • 2005 financial results • Current environment • First quarter results – March 31, 2006 • 2006 outlook

  3. 2005 Highlights • Solid financial results • Record sales of $22.8 billion • Modest decline in earnings per share

  4. 2005 Highlights • Solid financial results • Completed Privatizations • Improve strategic positioning • Better exploit competencies • Re-align product portfolio • Avoid duplication of investment

  5. 2005 Highlights • Solid financial results • Completed Privatizations • Rationalization strategy implemented • New facility/program launches • Mexico supplying stampings for Ford Fusion • Kentucky supplying frames for Explorer and F-Series Superduty • Georgia supplying fascias for Mercedes M and R class • Metz, France supplying stampings for Peugeot

  6. 2005 Highlights • Solid financial results • Completed Privatizations • Rationalization strategy implemented • New facility/program launches • Progress in diversifying customer base • Asian and French-based OEMs • Acquisition of Car Top Systems (CTS)

  7. Magna S&P S&P Auto Parts Index Solid Stock Performance Total Shareholder Return December 31, 2005 (%) Source: BMO Nesbitt Burns

  8. 28% 18% 15% Magna S&P S&P Auto Parts Index Solid Stock Performance Total Shareholder Return (%) AGM 2005 to AGM 2006 Source: BMO Nesbitt Burns

  9. 2005 Financial ResultsDecember 31, 2005

  10. 21% compound sales growth over the last 10 years 10% Sales Up 10% in 2005 $ Billions

  11. Vehicle Production Millions of units (4%) Sales higher than production growth North America Europe

  12. Growth in Content Per Vehicle 2005 $731 • New Venture Gear Acquisition • Strong Canadian Dollar +17% North America

  13. Growth in Content Per Vehicle 2005 $731 $317 • New Venture Gear Acquisition +17% +11% North America Europe

  14. Unusual Items Diluted Earnings Per Share $ • Higher commodity costs • Investment in new programs and facilities • Lower productionon key platforms • Customer pricing pressures 8.00 7.23* 6.95* 7.00 6.00 5.00 4.00 3.00 2.00 1.00 00 * Excluding unusual items

  15. Strong Operating Cash Flow* $1.5 Billion $ Millions Capitalize on Opportunities * Before changes in non-cash working capital

  16. Investment Spending • Capital investments – key drivers for growth • Disciplined investment process • Best process in industry • Realistic assumptions Driving Strong Returns

  17. Current Environment • Higher commodity costs

  18. Steel Polypropylene Indexed Commodity Prices 1994 = 100 March 2006 July 2000 Sources: CRU, CDI

  19. Current Environment • Higher commodity costs • Declining share for key customers

  20. U.S. Sales Market Share 1996 - 2005 74% 58% North AmericanOEMs Asian OEMs European OEMs Source: Merrill Lynch

  21. Current Environment • Higher commodity costs • Declining share for key customers • Ongoing OEM pricing pressures

  22. Current Environment • Higher commodity costs • Declining share for key customers • Ongoing OEM pricing pressures • Financial health of competitors • Grow business by targeting winning platforms • Vehicle segment shifts

  23. Small Cars CUVs Pickups SUV's Vans Mid-Size Cars Vehicle Segment Shifts Share of North American Production 30% 25% 20% 15% 10% 5% 0% 2003 2004 2005 2006 2007 2008 2009 2010 2011 Source: CSM Worldwide

  24. Current Environment • Higher commodity costs • Declining share for key customers • Ongoing OEM pricing pressures • Financial health of competitors • Grow business by targeting winning platforms • Vehicle segment shifts Well Positioned inChanging Marketplace

  25. First Quarter ResultsMarch 31, 2006

  26. 5% Record Consolidated Sales $ Billions

  27. Vehicle Production Millions of units (3%) +4% North America Europe

  28. $759 6% North America Growth in Content Per Vehicle First Quarter 2006

  29. $343 8% Europe Growth in Content Per Vehicle First Quarter 2006 $759 6% North America

  30. 8% Unusual Items Diluted EPS $ 1.99* 1.85* * Excluding unusual items

  31. Strong Balance Sheet Debt to Capitalization Well Positioned for Profitable Growth

  32. 2006 Outlook

  33. New Launches - North America

  34. New Launches - Europe

  35. Magna Well Positioned • Solid presence in a competitive industry • Strong balance sheet and cash flow • Strong returns from investment spending Enhance Shareholder Value

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