MAHLE Metal Leve (LEVE3) Q1 2025 earnings summary

Executive summary

• Net operating revenue reached R$1,266.6 million in Q1 2025, up 24.1% year-over-year, driven by acquisitions and strong domestic market performance, especially in light vehicle components.

• Gross margin was 27.8%, net margin 12.5%, EBIT 16%, and EBITDA 18.7%, with margins pressured by hyperinflation in Argentina, cost increases, and product mix from new acquisitions.

• Profit for the period was R$158.8 million, a 20.7% decrease year-over-year, reflecting higher SG&A and acquisition integration.

• Dividends of R$258.5 million were approved, representing a 66% payout for 2024, with BRL 62 million to be paid in May.

• Net indebtedness stands at R$640.1 million, with leverage at 0.69x, and cash generation in Q1 was R$62.6 million.

Financial highlights

• Domestic original equipment sales surged 84.9% year-over-year to R$511.3 million, while export sales declined 7.0%.

• Aftermarket domestic sales grew 10.0%, and export aftermarket sales fell 5.2%.

• Acquisitions contributed R$190 million (Compressores) and R$203 million (air valves) to revenue.

• Total net sales increased 24.1% with acquisitions, or 5.5% excluding them.

• Net finance income was R$12.1 million, similar to last year.

Outlook and guidance

• Management expects continued market share gains in light vehicles, ongoing recovery in Argentina, and participation in the MOVER Program for innovation and localization.

• New product launches in electric/hybrid bus systems and agricultural equipment support strategic growth.

• Aftermarket export results are expected to recover over the year.

• U.S. tariffs on vehicles and auto parts (25% from May) present a challenge for export markets.

• Capital expenditures are projected to increase in coming quarters to meet annual budget targets.