Nemak (NEMAKA) Q4 2024 earnings summary

Executive summary

• 2024 EBITDA grew 9% to $633M despite a 6% volume decline, driven by cost reductions, commercial negotiations, and operational adjustments.

• Net income for 2024 was $25M, up from $4M in 2023, though 4Q24 saw a net loss of $51M due to asset write-offs and higher financial expenses.

• Free cash flow was $27M, with net debt reduced to $1.53B and net leverage improved to 2.4x.

• Commercial wins totaled $460M, with 80% in ICE/hybrid and 20% in e-mobility/EV/SC, reflecting market trends.

• Achieved ESG milestones, including Dow Jones Sustainability Indices inclusion and Aluminum Stewardship Initiative certifications.

Financial highlights

• 2024 revenue was $4.9B, down 2% year-over-year; Q4 revenue rose 6% to $1.2B despite lower volumes.

• EBITDA for Q4 and full year rose 21% and 9% year-over-year, respectively, to $156M and $633M.

• Operating income for 2024 was $145M, with a Q4 operating loss of $39M due to an $80M asset write-off.

• Net debt ended at $1.53B, net debt/EBITDA at 2.4x, and interest coverage ratio at 4.9x.

• Capital expenditures were $389M for 2024, a 28% reduction year-over-year.

Outlook and guidance

• 2025 guidance: volume of 37–38M units, revenue of $4.6–$4.8B, EBITDA of $580–$600M, CapEx of $285–$295M.

• Margins expected to return to pre-pandemic levels, but volume faces downside risk from market volatility and potential tariffs.

• Free cash flow generation projected to exceed $100M, with continued focus on debt reduction and leverage target below 2.0x.

• Management to maintain agility between ICE and EV/SC projects, focusing on sustainable margins and growth.