MAHLE Metal Leve (LEVE3) Q3 2024 earnings summary

Executive summary

• Net sales revenue for the first nine months of 2024 was R$3,240.2 million, down 2.5% year-over-year, mainly due to weaker exports and the Argentine aftermarket.

• EBITDA margin improved to 23.1% in Q3 2024 from 20.9% in Q3 2023, driven by cost control and operational efficiency.

• Net profit for Q3 2024 fell 34.1% year-over-year to R$141.8 million; 9M 2024 net profit dropped 27.5% to R$430.7 million.

• Strategic acquisitions included 100% of MAHLE Compressores, MAHLE Aftermarket Thermal, and a 33.3% stake in Arco Climatização, expanding thermal management and air conditioning for buses.

• Sustainability initiatives and social responsibility projects continued, with the release of the 2023 Sustainability Report and ongoing ESG-aligned community programs.

Financial highlights

• Q3 2024 net sales revenue: R$1,150.6 million (-2.4% YoY); 9M 2024: R$3,240.2 million (-2.5% YoY).

• Q3 2024 EBITDA: R$266.2 million (+8.0% YoY); 9M 2024: R$778.4 million (+2.3% YoY); margin: 23.1% (+2.2 p.p. YoY).

• Q3 2024 net profit: R$141.8 million (-34.1% YoY); 9M 2024: R$430.7 million (-27.5% YoY).

• Gross margin in Q3 2024 rose to 30.9% from 29.5% in Q3 2023; 9M 2024 gross margin stable at 30.8%.

• Net finance costs of R$19.3 million in Q3 2024 vs. net finance income of R$49.6 million in Q3 2023, mainly due to exchange rate effects and higher debt.

Outlook and guidance

• Management expects continued focus on innovation and sustainable mobility, leveraging new funding and acquisitions.

• Strategic investments in thermal management and air conditioning, especially for electric and hybrid vehicles, are expected to drive growth.

• Brazilian and Argentine automotive markets showed recovery, with Brazil's light vehicle sales up 14.2% and heavy vehicles up 12.7% year-over-year.

• Outlook for 2024 is positive, with projected sales growth of 6%-8% in Brazil and a less severe decline in Argentina (-5% to -10%).

• Heavy-duty vehicle production in Brazil and Argentina is expected to close the year with over 30% growth.