Iochpe-Maxion Sa S/Adr

In our call today for the Q&A, we have Mr. Peter Klinker, CEO, and Mr. Renato Salum, CFO. We would like to inform that this video conference is being recorded and is going to be made available in our Relations with Investors website with the company, along with the presentation. We would like to highlight that Mr. Peter is going to make this presentation in English, and we have simultaneous translation for Portuguese and English. They can be accessed in the small globe at the bottom of your page that you can see interpretation at the lower part of your screen. By clicking on that icon, you will see three options, original audio, Portuguese and English. Please select the one that best suits your needs. For the Q&A, the Q&A session, we would like to ask you to use the Q&A button on the lower part of your screen and we are going to ask you to make your questions to ask your questions so if you can activate your microphone you will see that on screen and remember that part of these questions will be answered in english so we kindly ask you to use the translation tool in case you need it we would like to make sure that apart from declarations that can be made during the conferences regarding the perspectives of business in the company projects and operational goals they are Assumptions and premises as well as information that are available for the company. Future considerations are not guarantees for performance. They involve risks, performance and assumptions because they were talking about different cultures and circumstances that may come to happen or not. I would like to call Mr. Peter Klinkers. Mr. Peter, if you will. Go ahead, sir.

Hello, good morning to everybody. Good afternoon to everybody here in Belgium, where we're meeting with the global team to talk about the future. But we're taking a break here to do this conference and talk a little bit about the recent past, the second quarter for Jospeh Maxion. But also at the end of the presentation, as you will see in a few moments, we will try to take you with us a little bit into the future. Let's talk about what has been happening in the second quarter. We go to the next slide. First of all, the executive overview. I think from what you could see maybe already from our numbers, again, we believe that we have been able to show a pretty resilient performance. We were disciplined on some of the cost savings that we were targeting. We realized them and I think it will come back more often in this presentation and maybe in other presentations as well, but North America clearly is recovering, that is supporting Our CV performance there and at the same time we are seeing some strong aluminum wheel performance in North America that has been helping our performance that was as we call resilient. Financial discipline, shareholder focus, you know, I think you will see from the numbers, we believe we have a solid liquidity and on top of that, we are showing a lower net debt, which should reinforce our financial flexibility and the outlook for the mid and the long term for our shareholders. and you know last but not least we do have not only resilience we also see some gross drivers and we will talk about it a little bit more at the end of this presentation but for us clearly Asia is outperforming we've talked about that a little bit also in prior presentations but we start to see it more and more now and within Asia of course for us India is a gross engine in all the segments that were president there and so I'm happy to talk about that a little bit more at the end of the presentation. It's not only Asia or India, also Brazil LV is strong and very strong for Maxion and as I said, North American truck trending upwards is very helpful as well. We go to the next slide. Look a little bit more in detail on the market. It's really different between LV and CV, not only right now, but also if we look at the immediate future, let's say the rest of this year or next year or even the year after that, it's very little growth on the LV side. And on top of that, Augusto Ribeiro Junior, Bruno Zarella, Renato Jorge Salum In the next one, two, three years. Same time, commercial vehicles is a positive market. We see North America coming back. We believe Europe will be stronger the next two years than what we've seen this year or the last two years. India will be will be growing and we believe Brazil is not so favorable right now but should be stabilizing second half of this year next year and so overall the truck market for us we believe is showing a very positive outlook we go to the next slide Talk a little bit, coming back to the second quarter, talk a little bit about the highlights from a financial KPIs point of view. How are we doing in that market? And so our net revenue around 4 billion in the second quarter, and that's a little bit lower than what we saw last year, but we all know FX, the REI has been appreciating to many other www.patreon.com.br Gross profit, not a bad number, 12.1%, but still having some impact from lower fixed cost absorption in markets that are recovering like North America. Also suffering a little bit still from the temporary raw material pass-through timing effects. And so we believe whatever is a negative for us there in the first half of the year, which it clearly is, that should be a positive in the second half of the year for our company. We look at EBITDA, you can see negative, it's not as good as it was last year, the second quarter, but keep in mind North America was a lot better at that time and it's coming back. You can see positive, it's a percent better than in the first quarter. Overall, we believe this is a very decent number and a good base for us to build on for the next coming quarters and years. You look at the leverage, we have been able to reduce net debt and that's a very positive one for our company in the second quarter of 2026. Our long-term multiple on the EBITDA side is still not there where we We go to the next slide. We look at our revenue by product. It's a little bit still the same number as what you guys saw in prior presentations where still our components unit is lagging behind the past performance that I had from a percentage revenue within the company. We believe this will come back to prior numbers pretty quickly now, but you can still see in the first half Even in the second quarter, lagging a little bit behind the normal 22-23%, maybe even getting up to 24-25% that components has in the total of Jospeh Maxion. That lagging behind has then been made up by wheels, especially aluminum wheels was strong again and has been offsetting the revenue drop that we saw year over year in components. You go to the next slide. We look at that in a little bit more detail by customer and even though the numbers are getting closer than what we saw in prior presentations where we saw truck going down and Pascal going up, still some truck being down quarter, this year quarter versus last year quarter. I would say not so much anymore. We still see past car revenues. Some of the big customers that we have, they are still increasing revenue this year quarter two versus last year quarter two. You look at a company like Stellantis or you look at Toyota, it's clear that we're gaining some momentum there. And so if you combine that with the truck Coming back, which is what we see happening, and what we also foresee for the next coming two years, that could be a good story. We go to the next slide. We look a little bit more in the regions in the next four slides. We look at South America. I would say it's a very different picture between LV and CV. In CV, the market clearly is down, and so are numbers. It's not huge numbers for us if we compare to the rest of the world, but still, this is not helpful. And so when the Brazilian market comes back and stabilizes, We really have some momentum on the light vehicle market where the market is strong and we see momentum with customers, both traditional customers as well as new customers that are coming into the market. We go to North America on the next slide. Our revenue is still slightly down, but it's coming back. That's what we say. And so this is a combination of our aluminum wheels doing very well in North America. We have some new business winds. We're doing good with margin there as well. But also we see this truck market clearly coming back more in June than we had in April. But during the quarter we saw improvements there and that is also our expectation for the rest of this year. We go to the next region, EMEA. We see a contraction of our revenue. And so Europe, I think, is a more complicated story, especially from an LLV point of view. Now, the good thing is for Maxion, we are strong in Europe. We are a very competitive company. We have had some market share gains in the past and we're still profiting from that, but we cannot have market shares every quarter. but we're okay in our plans but Europe is a little bit tougher environment from an LV point of view. Truck also was not great but here we continue to profit from our more recent market share gains and we also believe that will be the case during the rest of the year and then in the out years, 2027, 2028, let's see how the market develops but there is more positive A more positive tone that we hear in the market than what we've been hearing during the last two years. And so if that happens, when that happens, Maxion will be ready to fully profit from that increasing trend in the market. We go to Asia on the next slide. Really, this is a gross area for Maxion. And of course, as you know, a major region where we are within Asia for us is India, where we are making passenger cars, steel wheels, passenger car, aluminum wheels, and track wheels. and so what we see is the market is doing well and Maxion is actually doing a little bit better than the market and again i've been talking about we've been talking about it in the prior calls and i look forward to talk about this in not only on the next slides but also on some of the next uh next calls because we believe this can really be a very good story for uh for our operations in india and for our company overall let's go to uh next slide Gross profit, gross margin, we talked about it. It's down, but if you look at the first half of the year here now, we're very close to where we were last year. Keep in mind, last year we had that North American track market that was very significantly better overall in the first half than what it was this year. So keeping this margin close to where we were last year in the first half for us is a good outcome. And again, good basis for the rest of the year. You look at the next slide. We talk about EBITDA. It's pretty much the same story. As I said in the beginning, we are lower in the second quarter than where we were last year, but we believe that 10.4% is a good outcome for us in this quarter. If you look at the first half of the year, similar story than what I said on the gross profit. We're very close to last year with the expectation and the hope that the second half of the year for us will be better. Go to the next slide. Net income, not a bad story at all. I think the number is still too low, but we're happy with the outcome of 87 million in the second quarter and the 90 million as a base for the first half going into the second half of the year. And so this is a good base for us to have a decent year from a net income point of view. Go to the next slide, Ina. Looking at our investments now, these are meaningfully lower than what we were doing in the first half of last year, but this is mainly timing. We have been trying to manage timing for investments over the whole year since we believe our earnings will be a little bit better in the second half of the year than the first half of the year. We've also been trying to move We believe overall we will be in line with our yearly targets from a capital expenditures point of view, but with a managed timing between the first half of the year and the second half of the year. Leverage pretty stable I would say quarter over quarter and again we are decreasing our net debt and we are looking for the long-term multiple on the EBITDA side to pick up In the coming months, in the coming years, of course, and that combination should drive our leverage down to be meaningfully lower than what we're looking at right now, step by step.

We go to the next slide.