MAHLE Metal Leve (LEVE3) Q4 2024 earnings summary

Executive summary

• Net revenue grew 5.1% year-over-year to R$4,558.0 million (US$4.6 billion), driven by strong domestic OE sales (+21.0%) and Aftermarket (+5.0%), offset by an 8.6% decline in OE exports; three major acquisitions (MAHLE Compressores, MAHLE Aftermarket Thermal, and 33.3% of Arco Climatização) supported diversification and growth.

• Q4 2024 net revenue surged 29.6% over Q4 2023, with significant gains in domestic OE (+89.9%) and Aftermarket (+13.8%).

• Operations span 9 business facilities across South & Central America.

• Released Sustainability Report 2023 and received the Golden Seal from the Brazilian GHG Protocol Program for emissions transparency and carbon neutrality at key sites.

Financial highlights

• Gross margin was 28.5% in 2024, slightly down from 29.3% in 2023; EBIT margin was 19.1%; adjusted EBITDA margin reached 21.7% (R$990.2 million); net margin declined to 12.1% (adjusted).

• Net profit was R$541.3 million, down 27.7% year-over-year; adjusted net profit was R$551.6 million.

• Net finance costs increased to R$171.1 million from net finance income of R$121.8 million in 2023, mainly due to exchange rate effects and higher debt.

• Net debt increased to R$652.9 million (0.66x adjusted EBITDA), up 39.5% from 2023.

• Capital expenditures totaled R$127.0 million, focused on R&D, productivity, and new products.

Outlook and guidance

• Domestic demand and vehicle production in Brazil and Argentina are expected to remain robust, with Brazilian vehicle registrations up 14.1% and global economic growth projected at 3.3% for 2025 and 2026, but with downside risks from inflation and monetary policy.

• SELIC rate expected to rise to 15.00% by end of 2025, potentially impacting financing costs.

• Management remains cautious due to macroeconomic uncertainties and plans to retain reserves for future investments.