Iochpe-Maxion Sa S/Adr

Good morning, everyone, and welcome to Yashit Maxon's first quarter 2026 earnings video conference. I'm Rodrigo Carranza, the company's Senior Investor Relations Manager, and we'll be conducting today's video conference. Present today and available for the question and answer session are Mr. Peter Klinker, CEO, and Mr. Renato Salon, CFO. Please be advised that this video conference is being recorded and will be made available in the company's Investor Curriculum website along with the presentation. Mr. Peter will be conducting the presentation in English. For your convenience, simultaneous translation into Portuguese and English are available and can be assessed in the globe-shaped icon called Interpretation in the lower central part of your screen. you have the option of original audio, Portuguese and English. Please select the option that best suits your needs. For the Q&A session, we recommend that you participate via the Q&A icon at the bottom of your screen and by default of the dynamics, your name will be announced so you can ask your question live. At this point, you will receive a notification to activate your microphone and it is important to note that some questions will be answered in English, and for that, we ask you all to use the translation tool if needed. Before proceeding, I would like to clarify that any statements made during this video conference regarding the company's business prospects, projections, and operational and financial targets constitute the beliefs and assumptions of Yashik Maxion's management, as well as information currently available to the company. Forward-looking statements are not a guarantee of performance because they involve risks, uncertainties and assumptions and refer to future events and circumstances that may or may not occur. I would like to pass the floor to Mr. Peter Klinker, COO of Yashet Maxim. You may proceed, sir.

Hello to everybody and thank you, first of all, very much for participating in this call. We've decided to start with an executive summary this time. There's a lot of things going on in the world and we wanted to talk about a few of the highlights on the very first slide. So we believe, given all the dynamics in the world, in the automotive world and in the overall world, we believe Jospe was able to have relatively stable sales in the first quarter of 2026. when we compare it to the same quarter one year earlier. A little bit down, including ethics impact, a little bit up, excluding ethics impact, but those numbers need to be seen in the perspective of the North American and Brazilian CV market being down versus the same quarter last year. And so, even though these markets are now showing signs of recovery, especially in North America. The numbers that we had to deal with in the first quarter of 2026 were significantly below 2025 in North America truck. But as part of that, we had relatively stable sales globally. And with that, we were able to, even being modest, modestly increase our profitability. We will come back to that in next slides. And of course, that has to do with the restructuring measures that we took in North America last year. It also has to do with our resilience that we talked about in prior calls in Europe. And more and more it also has to do with the markets in Asia, particularly India, doing well for us and Maxium doing well in that market. We will come back to that as well. Not all important to mention in today's times is also that our teams are being able to navigate very well through all the supply chain issues that could be there or are there. And so given all the challenges that we see in the world, I think we can be proud in our teams to be able to ensure flawless customer service. We have been able to manage through any supply chain issues flawlessly and we have been able to supply our customers without any interruption and we plan to do so going forward as well. And last but not least on this slide, I think one important highlight also is that we are able to keep our operational discipline. Our plans are performing around the globe. It's not an easy globe sometimes, but our plans are performing in this environment. And also at the same time, we are continuing to win important new business wins and create value to the company as well. We go to the next slide. We look a little bit more on that market and it's really different the way we see it, the way it's being forecasted by the official institutions between light vehicles and commercial vehicles. And let's not forget in our company, Jasper Maxim, commercial vehicles is not unimportant. Today it's about 35% of our total turnover with North America. Hopefully coming back anytime soon in the commercial vehicle segment. That should be rather like 40% of our total turnover. So both pictures are important to look at. If you look at a live vehicle, it's pretty stable. It's not a disaster, but it's also not very exciting. 93 million vehicles last year. This year actually a little bit lower. 91 million is the projection. And next year back to 93, 94, and 2028. It's pretty stable, and it doesn't matter really if you look at those numbers including or excluding China. So a stable market, let's say, on the passcode side. On the commercial vehicle side, though, the picture looks different, especially when you look at it excluding China, which is for us a more relevant trend to look at than including China, even though we are present in China with truck wheels as well. It's relatively small to what we do in the rest of the world. And so you see some more meaningful growth there already in 2026, continuing in 2027 and accelerating in 2028. We will come back to that in some of the next slides. So a different picture between NASCAR and truck. We go to the next slide. You come back to the highlights for Maxim of the first quarter of 2026. How do we do? How did we do in this market? So from a revenue point of view, roughly 3.8 billion reais, we would say. It grew slightly, excluding ethics effects, but the ethics effects were meaningful. And so including those effects, it was a minus 3.3%. mainly again due to the fact that in North America, even though we see some signs of recovery, the truck market was very, very much down versus 2025 first quarter. And now in 2026, as a contrast to 2025 when South America was able to mitigate some of that effect in North America in the first quarter of 2016, Also, South America was down. Now, we have been able to mitigate that through better numbers around the world. And some highlights there, I would say, are South America light vehicles and Asia light vehicles. And so, overall, we would say a pretty stable revenue despite those impacts in truck and north and south Americans. We look at cross-profits, the absolute number is pretty much the same as what we generated last year, but our margin did increase slightly to 11.6%. So I think, again, this shows our resilience to global uncertainty and some markets being meaningfully down. Same is true for EBITDA, 357 million in the first quarter with a margin of 9.4%, 9.5%. excluding restructuring, and so that's an increase of 0.4%. It's not huge, but it's meaningful, we believe, especially given the market dynamics that we are dealing with. And then from a leverage point of view, we'll come back to that as well. Of course, here Aptics plays a positive role, but a meaningful reduction quarter over quarter with or without ethics. If you compare the first quarter, 2026 was the last quarter of 2025. We look at the next slide. you see a revenue by product. This is pretty much the same as what we showed in the last two earnings calls. Since the North American truck market was declining so much, you know, structural components, especially the heavy vehicle sales that we have in that unit, is down as a percentage of our overall turnover. And so, normally I would say it should be 75% wheels and 25% components. And today, It's more like 20% components and 80% wheels. And basically, aluminum wheels for light vehicles is making up what we're losing in components in the heavy truck market in North and South America. We go to the next slide. We can look at how it looks by customer. And, of course, what you see here is you look at the left there, a customer like Daimler that is very important for us in North America for components. It's down quarter over quarter compared to last year. But then you see several of the past car accounts being up, and so that is mitigating, offsetting. that impact that we see in the Americas truck markets. And so overall, I would say, you know, pretty stable picture with light vehicle outperforming and therefore mitigating what has been happening the last couple of quarters in North America and now also in South America truck. We go to the next slide. You can look a little bit more on the different regions South America, very important for our company, of course. You know, I would say stable revenue, despite that Brazilian truck market construction that we clearly saw in the first quarter of 2000 and 26 versus prior year. And I would say we were able to offset that somehow within the commercial vehicle segment, a little bit better mix than what the overall market was showing. And then we are performing well with the market doing well. on the light vehicle segment. And so overall, for our company, that meant stable revenue in Brazil, in South America, versus the first quarter of 2025. We go to the next slide, we go to North America. And so here you see a clear reduction in turnover in the first quarter of 26 versus the first quarter of 25. And that has all to do with commercial vehicles. The official numbers, when you look at overall commercial vehicles, down 19.2% in the first quarter of this year versus last year. But as we talked about in the last Ernst Call already, we need to look a little bit more specifically on the heavy trucks, the Class 7 and Class 8, that's called. And there, what you see is more like 25%, 26% reduction. And we are in line with that reduction. We were able also here to make it up Partially, of course, that drop is too much to make up completely, but partially we made it up in light vehicle because that market also was a little bit down in North America, but we were having a slightly higher turnover in light vehicle. So, you know, a partial mitigation, I would say, in light vehicle compared to what was happening on the heavy vehicles, heavy truck vehicles in North America. Now, one important picture here on this slide is in the middle bottom corner. part of the slide, and you see some pretty big increases there year over year when you look at North American commercial vehicles. And so already this year, plus 7%, and next year, plus 9%, the year after, plus 17%. These are big, big increases. And so I would say we are very ready to support that kind of market. We could do even a little bit more than that. But I would say even if we do only half of that, even if the market only grows half of that, our company – That would be very good for our company, and we would be in a very good position with those kinds of increases. We go to the next slide, looking at Europe, EMEA, Europe and Africa. We see a slight reduction in turnover this quarter versus last year, first quarter. And so I would say in the light vehicle, we did some portfolio cleanup. We've been gaining considerable market share the last, 12 to 18 months and so that gives you the chance to do some cleaning up of your portfolio but we were able to very much mitigate that by strong correct performance the market is doing well in euro from a commercial view point of view in the first quarter and maximum was able to do even though even a little bit better and so overall i would say pretty resilient in in europe and also here If you look on the middle section on the bottom, you see that production forecast for commercial vehicles. That's pretty significant. And so, again, if this happens, we are very well positioned. We are very ready to support us. But even if only half of that happens, that would be very beneficial for our company. We don't need to do any investments to supply these kind of volumes. We go to the next slide. We look at Asia, and you may remember in some of the prior calls, I said Asia will be there, and we see that happening. Our turnover increased by roughly 10% in the first quarter of 2026 versus the same period in the prior year. And that's very helpful to mitigate some of the impacts that we talked about regarding North America and also a little bit South America. And so, you know, our focus in Asia is mostly on India. That market is doing well. And I would say Maxion is doing well in that market. And so we are completely, you know, enjoying the momentum in the business in Asia, particularly in India. We go to the next slide. We look at our gross profit and our gross margin. I would say absolute number, pretty much the same quarter over quarter compared to last year, first quarter. And then from a margin point of view, 0.3% up. I would say, you know, good job on repricing, as we usually do, favorable sales mix, and some good operational efficiency, as we talked about before. So a positive number here. Next slide. Same thing. It's true for EBITDA, an EBITDA margin, slight increase in the overall number, but pretty stable, I would say. And then from a margin point of view, 0.4% or excluding restructuring, 0.5% increase, which is, you know, again, not huge, modest, but meaningful, especially when you take into consideration that the North America truck market is still very much down, was still very much down in the first quarter of 2026 versus the same quarter last year. Go to the next slide. Look at net income, not a lot of net income last year in the first quarter, also not a lot of net income in the first quarter of this year. Losing my screen, okay. But we are confident that we will be okay for the whole year. We had some positive impact from Mover in the first quarter of last year, and so our numbers are pretty much in line year over year, if you take that out. We go to the next slide. Looking at investments, a little bit more in the first quarter of this year compared to last year, but mainly because of good news. We have been winning new business. We are investing in that new business to make it work, to supply the products that the customers nominated us for. And we believe we can be confident that we will manage the yearly numbers as we target for 2026. when we talked to you guys at the end of last year. So on track here, I would say. If you go to the next slide, our leverage, as we saw in the second slide already, a meaningful reduction year over year, and I would say a quarter of a quarter. And I would say even if you exclude ethics, there would still be a meaningful reduction quarter of a quarter. So we are pretty happy with that reduction. in depth that we saw there. And, you know, with the markets hopefully coming back as the official institutions are forecasting, you know, the long-term multiples could be a little bit more rough without depth, of course, not increasing. That's not our target. And so I would say on track with the targets that we put ourselves and that we talked to you about in the recent calls. We go to the next slide. I'll grab that. Not a lot of change in the composition there. I think it's a fair mix. If you want, from a short-term, long-term perspective, even a little bit less, shorten that. And then, of course, we have this bar in 2028 where our bonds will expire, and that's something that we will work on in the near future. If you go to the next slide. Going from numbers to people, one of the reasons why we are able to continue to show modest margin improvement even if there is not a lot of traction in the market or there are some challenges in the market is because we have A lot of people around the world working on smaller and bigger projects to get better every day. And it's not meaningful. We have an event that we call Maxime Team Awards. And last year, there was more than 1,700 projects, more than 10,000 people working on this. Wheels, people from the wheels unit, people from the components unit, 34 plans in the world. And we just congratulated the 19 team winners. This is super important in this competitive world, in this dynamic world, to have all these people so engaged and coming up with so many small and big ideas for improving our business. And that makes us feel confident to be competitive also going forward. You go to the next slide. And, of course, the reward for that is we cannot talk about too many new business wins that we have. Many customers don't allow to talk too early too much about what they do with their suppliers. But I can tell you that we feel very proud about our teams receiving important new business wins with global OEMs, with local OEMs across the regions, in the Americas, in Europe, and in Asia, of course. But we're also being recognized by our customers very, very much for the good quality, for the good service, for the good partnership that we have with them. And so all of that hard work that the people are doing in the plants with the support of management, I think it's paying off when you see how many awards, how many recognition we get from our customers. And with that, I would open it for questions and answers.

Now we are going to start the Q&A session. We ask you to ask all your questions at once and wait for the answer from the company. Please place your questions using the Q&A icon. We will then call your name, ask you to open your mic, And our first question comes from Andressa Varoto from UBS. Andressa, you can proceed.