MAHLE Metal Leve (LEVE3) Q2 2024 earnings summary

Executive summary

• Net sales revenue for H1 2024 was BRL 2,089.6 million, down 2.5% year-over-year, with Q2 2024 revenue at BRL 1,068.9 million, down 4.6% year-over-year; operational performance and margins remained stable despite the decline.

• Strategic acquisition of a 33.3% stake in Arco Climatização Ltda. aims to strengthen the thermal management and bus air-conditioning segment, pending antitrust approval.

• The company is actively participating in and qualified for the MOVER program, supporting R&D and sustainable mobility initiatives.

• Recognized for ESG initiatives, including the Gold Seal from the Brazilian GHG Protocol Program, an honorable mention at the AEA ESG Awards 2024, and achieving carbon neutrality at key facilities.

• Maintains a strong R&D focus with about 150 employees and BRL 29.4 million in R&D expenses for H1 2024.

Financial highlights

• Gross margin remained stable at 30.8% for H1 2024, with EBITDA margin at 24.5% and net margin at 13.8%.

• Q2 2024 EBITDA was BRL 224.0 million (-11.9% YoY); H1 2024 EBITDA was BRL 512.1 million (-0.4% YoY).

• Q2 2024 net profit was BRL 88.6 million (-54.1% YoY); H1 2024 net profit was BRL 288.9 million (-23.8% YoY); adjusted net profit for H1 2024 was BRL 283.7 million (-25.2% YoY).

• Net finance costs increased significantly, with a negative result of BRL 50.4 million in Q2 2024 versus a positive BRL 29.4 million in Q2 2023.

• Cash and equivalents at June 30, 2024, were BRL 427.0 million, up from BRL 383 million at end-2023.

Outlook and guidance

• Positioned to benefit from the MOVER program, with R&D and product portfolio aligned to new regulatory and sustainability requirements.

• Management anticipates stable or slightly improving margins, barring major macroeconomic shocks, with continued focus on operational efficiency, innovation, and R&D.

• Expectation for vehicle sales growth in Brazil and Argentina combined is 4%-6% for 2024, with heavy vehicles projected to grow 5%-7%.