MAHLE Metal Leve (LEVE3) Q3 2024 earnings summary

Executive summary

• Net sales revenue for the first nine months of 2024 reached BRL 3.24 billion, down about 20% year-over-year, mainly due to export declines, but operational performance (EBIT) remained consistent.

• EBITDA margin improved to 23.8% for 9M 2024, with Q3 peaking at 23.1%, reflecting strong cost control and R&D efficiency.

• Net profit margin stood at 12.3% in Q3 2024, with net profit dropping 34.1% year-over-year, reflecting higher financial expenses and increased indebtedness.

• Strategic acquisitions included MAHLE Compressores, MAHLE Aftermarket Thermal, and a 33.3% stake in Arco Climatização, expanding presence in thermal management and air conditioning for buses.

• Sustainability initiatives and social responsibility projects continued, with the release of the 2023 Sustainability Report and ongoing ESG-aligned community programs.

Financial highlights

• Q3 2024 net sales revenue: BRL 1,150.6 million (-2.4% YoY); 9M 2024: BRL 3,240.2 million (-2.5% YoY).

• Q3 2024 EBITDA: BRL 266.2 million (+8.0% YoY); 9M 2024: BRL 778.4 million (+2.3% YoY).

• Gross profit margin averaged 30.8% for 9M 2024, with Q3 at 30.9% due to favorable raw material pricing and backdated credits.

• Net finance costs of BRL 19.3 million in Q3 2024, compared to net finance income of BRL 49.6 million in Q3 2023, mainly due to exchange rate effects and higher debt.

• Cash and equivalents at September 30, 2024: BRL 509.2 million; net cash from operating activities in 9M 2024: BRL 408.9 million.

Outlook and guidance

• Brazilian and Argentine automotive markets are recovering, with projected 6%-8% growth in vehicle sales for 2024.

• Heavy-duty vehicle production in Brazil and Argentina is expected to close the year with over 30% growth.

• Management expects continued focus on balancing OE and Aftermarket segments to offset market fluctuations and maintain margins.

• Strategic investments in innovation and sustainable mobility, including a BRL 110 million agreement with FINEP for new propulsion and decarbonization technologies.

• Acquisitions are expected to drive growth in thermal management and air conditioning, especially for electric and hybrid vehicles.