MAHLE Metal Leve (LEVE3) Q2 2024 earnings summary

Executive summary

• Revenues and net sales declined in Q2 and H1 2024, with BRL 2.1 billion reported in Q2 and €6,011 million in H1, mainly due to lower volumes, negative currency effects, and divestitures.

• Operating and gross profit margins remained stable or improved, with EBITDA margin rising to 8.1% and gross margin at 16.4% in H1 2024, despite revenue declines.

• Strategic investments included a minority acquisition in Arco Climatização and divestitures such as the BHTC joint venture and thermostat business.

• The company advanced ESG initiatives, achieving carbon neutrality at key sites and receiving recognition for sustainability efforts.

• Active participation and qualification in Brazil's MOVER program supports R&D and sustainable mobility initiatives.

Financial highlights

• Net revenues dropped 2.5%-4.6% in H1 and Q2 2024, with Q2 net sales at BRL 1,068.9 million and H1 at BRL 2,089.6 million.

• EBITDA rose to €489 million (margin 8.1%) and Q2 2024 EBITDA was BRL 224.0 million, with adjusted EBITDA margin at 20.2%.

• Net income reached €16 million, reversing a prior loss, while Q2 2024 net profit was BRL 88.6 million.

• Net debt decreased by €73 million to €1,278 million in one case, while another reported net debt at BRL 573.5 million, up 22.6% from December 2023.

• Cash and equivalents increased to BRL 427 million by June 30, 2024.

Outlook and guidance

• Vehicle sales in Brazil and Argentina are expected to grow 4%-6% in 2024, with heavy vehicles projected to grow 5%-7%.

• The company is positioned to benefit from MOVER program incentives, focusing on sustainable growth and innovation.

• Moody’s upgraded the credit outlook to stable, and S&P assigned a BB rating with stable outlook.

• Margins are expected to remain stable, with macroeconomic and exchange rate factors as key variables.