Kepler Weber (KEPL3) Q1 2025 earnings summary

Executive summary

• Net revenue for Q1 2025 was R$357.2 million, down 6.1% year-over-year, with EBITDA of R$52.9 million (14.8% margin) and net income of R$25.6 million (7.2% margin), reflecting a challenging macroeconomic environment.

• Despite revenue decline, the company maintained strong cash generation, disciplined expense management, and expanded its customer base, especially in Agro-industries (+93%), International Markets (+37%), Parts & Services (+35%), and Farms (+18%).

• Diversification and innovation, including new product launches and 27 registered patents, supported leadership, with 46% of revenues from new products and their versions.

• Maintained solid margins and strong order intake, supported by demand for storage and business diversification.

• Gross margin improved by 11.2 p.p. year-over-year, but EBITDA margin fell 9 p.p. due to pricing pressures.

Financial highlights

• Farm segment revenue: R$131.7 million (stable, -0.2% year-over-year); Agribusiness: R$100.8 million (-4.9%); International: R$40.9 million (+5.3%); Ports/Terminals: R$10.6 million (-77.2%); Replacement/Services: R$73.2 million (+28.6%).

• EBITDA reached R$52.9 million, a 41.5% decrease year-over-year; net income dropped 51% compared to 1Q24.

• ROIC was 28.8%, down from 43% in 1Q24 and 34.2% in 4Q24.

• Cash and cash equivalents at quarter-end were R$356.8 million; net cash was R$54.6 million.

• Investments (Capex) totaled R$17.2 million, focused on production capacity, sustaining capex, IT, and new products.

Outlook and guidance

• Order backlog aligns with 2024, with expectations for higher backlog by December 2025 and positive demand forecast for agribusiness, ports & terminals, and services.

• Management anticipates continued margin pressure in 2Q25 but expects gradual profitability recovery in the second half, supported by a record harvest and improved producer income.

• Anticipates continued strong dividend payouts, with R$70 million distributed in April 2025.

• Focus on executing the KW2030 plan, driving efficiency, market expansion, and strategic data use.

• Strategy centers on diversification, innovation, and efficiency to navigate cyclical agribusiness trends.