MAHLE Metal Leve (LEVE3) Q3 2024 earnings summary

Executive summary

• Net sales revenue for Q3 2024 was R$1,150.6 million, down 2.4% year-over-year; 9M 2024 net sales reached R$3,240.2 million, a 2.5% decrease from 9M 2023, mainly due to weaker exports and the Argentine aftermarket.

• EBITDA margin improved to 23.1% in Q3 2024 from 20.9% in Q3 2023, with adjusted EBITDA for 9M 2024 at 23.8%, 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, reflecting higher financial expenses and export market weakness.

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

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

Financial highlights

• Q3 2024 EBITDA was R$266.2 million (+8.0% YoY); 9M 2024 adjusted EBITDA reached R$770.5 million (+1.3% YoY).

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

• Net margin for Q3 2024 was 12.3% (-5.9 p.p. YoY); 9M 2024: 13.3% (-4.6 p.p. YoY).

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

• Cash and equivalents at September 30, 2024: R$509.2 million, up from R$383.3 million at December 2023.

Outlook and guidance

• Management expects continued focus on innovation, sustainable mobility, and balancing OE and Aftermarket segments to maintain margins.

• Strategic investments include a R$110 million agreement with FINEP for R&D in propulsion and decarbonization technologies.

• South & Central America vehicle fleet is projected to grow at a CAGR of 1.6% to 2.3% through 2029, with increasing hybrid and electric vehicle penetration.

• Aftermarket segment is focusing on digitization, channel expansion, and new product launches to drive growth.

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