MAHLE Metal Leve (LEVE3) Q2 2024 earnings summary

Executive summary

• Net sales revenue fell 4.6% in Q2 2024 and 2.5% in H1 2024 year-over-year, mainly due to declines in heavy-duty vehicle exports and domestic light vehicle production, but operational performance and margins remained stable.

• Strategic minority acquisition of one-third of Arco Climatização aims to strengthen presence in thermal management and bus air conditioning, pending antitrust approval.

• The company is actively participating in and qualified for the MOVER program, supporting R&D, sustainable mobility, and innovation, with confirmed enrollment and compliance with R&D investment requirements.

• 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.

Financial highlights

• Q2 2024 net sales revenue: BRL 1,068.9 million (-4.6% YoY); H1 2024: BRL 2,089.6 million (-2.5% YoY).

• Q2 2024 EBITDA: BRL 224.0 million (-11.9% YoY); H1 2024: BRL 512.1 million (-0.4% YoY); Adjusted net profit for H1 2024: BRL 283.7 million (-25.2% YoY).

• Gross margin in H1 2024: 30.8% (vs. 30.7% in H1 2023); EBITDA margin: 24.5% in H1 2024 (vs. 24.0% in H1 2023).

• Net margin in H1 2024: 13.8% (vs. 17.7% in H1 2023); Q2 2024 net profit: BRL 88.6 million (-54.1% YoY).

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

Outlook and guidance

• Positioned to benefit from Brazil's MOVER program, with R&D capabilities aligned to new energy efficiency and emissions reduction demands.

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

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

• Production in Brazil is forecasted to grow 3.4% for the year, while Argentina is expected to remain flat or slightly negative.