Fras-le (FRAS3) Institutional Presentation summary

Market position and business overview

• Holds #1 market leadership in main product categories, serving over 125 countries with more than 5,700 employees and a robust global footprint of 10 industrial plants, 9 warehouses, 5 commercial offices, and 2 technology centers.

• Achieved R$1,821.5M net revenue and R$316.5M adjusted EBITDA in 1H24, with a 17.4% EBITDA margin and approximately 35% of operations outsourced.

• Portfolio includes iconic brands and a comprehensive range of auto parts, with over 21,400 SKUs covering friction, brake, suspension, and engine components.

• Strong aftermarket presence, with 88% of 1H24 sales in the aftermarket and 59.7% of revenue from domestic markets.

• Part of a larger corporate group, enabling synergies, expanded market reach, and enhanced value for stakeholders.

Financial performance and guidance

• Net revenue grew to R$1,821.5M in 1H24, up 3.6% from 1H23, with foreign market sales at US$144.2M, up 2.5%.

• Gross margin for 1H24 was 33.2%, EBITDA margin 14.6%, and net profit margin 8.3%.

• Free cash flow for 1H24 was R$10.1M, with investments (CAPEX) at R$41.7M, down 26.4% from 1H23.

• Net debt remains stable, with working capital at R$1,054.6M and cash equivalents at R$1,392.4M as of June 2024.

• 2024 guidance targets R$3.7–4.0B net revenue, US$250–290M foreign sales, 17–21% EBITDA margin, and R$130–170M in investments.

Market share and competitive strengths

• Maintains leading market shares in Brazil's aftermarket: 59% brake linings for automobiles, 53% for heavy vehicles, 41% pads for automobiles, and 42% shoes for automobiles.

• Defensive, non-elective portfolio with high recurrence and replacement rates, especially in friction and brake products.

• Recognized with multiple industry awards for product quality, brand trust, and technical support.

• Value creation driven by inorganic expansion, with share price appreciating 5.5x since 2016 and significant revenue growth from acquisitions.

• ROE and ROIC remain strong, with adjusted EBITDA and margins consistently improving over recent years.