MAHLE Metal Leve (LEVE3) Q4 2024 earnings summary

Executive summary

• Net sales revenue reached $4.6 billion (BRL 4.6 billion) in 2024, up from $3.3 billion in 2023, with acquisitions contributing $200 million in the last quarter.

• Three acquisitions completed in 2024: Compressores, Aftermarket Thermal, and Arco Climatização, expanding product and market reach.

• EBIT margin was 19.1% in 2024, up from 18.8% in 2023; adjusted EBIT reached 21.7% due to hyperinflation effects in Argentina.

• Operations span 9 business facilities across South & Central America.

Financial highlights

• Gross margin, excluding a $32 million guarantee provision, would have been 25% in Q4, though still lower than the prior year.

• Operating cash flow was $708 million; cash and equivalents at year-end were $383 million (BRL 382.2 million).

• Leverage ratio improved to 0.66, below the pre-acquisition projection of 0.79; net debt/EBITDA ratio increased, with net financial position at BRL (652.9) million.

• Net financial expenses increased due to higher indebtedness and interest rates, with $23 million in net interest expenses in 2024 versus $75 million income in 2023; net finance costs were BRL (171.1) million.

• Adjusted net profit for 2024 was BRL 551.6 million, and adjusted EBITDA was BRL 990.2 million.

Outlook and guidance

• Market expects 8% growth in light vehicle sales and production in Brazil and Argentina for 2025.

• Heavy-duty vehicle sales and production are forecasted to grow by 1% in 2025.

• Management is cautious about macroeconomic volatility and interest rates, with a focus on maintaining reserves and prudent capital allocation.

• Market production in Brazil and Argentina showed growth in both light and heavy-duty vehicles, while Europe and North America experienced declines.