LEVE3 Metal Leve

MAHLE Metal Leve S.A., historically known as Metal Leve, is a Brazilian auto parts company founded in 1951 by Ernst Mahle and the Mindlin, Gleich, Lafer and Klabin families. The company began as Brazil’s first piston manufacturer, under the name “Metal Leve S.A. Indústria e Comércio,” with strong technological and machinery support from the MAHLE Group from the start of its operations. In 1971, it listed its shares on the then São Paulo Stock Exchange (BOVESPA), now B3 S.A. – Brasil, Bolsa, Balcão, and its common shares are still traded under the ticker LEVE3. From the 1990s onward, the company’s trajectory was marked by increasing integration into the MAHLE Group, culminating in the name change to MAHLE Metal Leve S.A. in 1998, after a series of mergers and corporate restructurings in Brazil.

Control of Metal Leve by the MAHLE Group was acquired in 1996, and since then several businesses and assets that had been conducted separately by the group began to be incorporated into the company in Brazil. Milestones in this integration include the incorporation of piston units in Mogi Guaçu (SP), filtration systems created by the MAHLE Group in the late 1990s, as well as the merger of companies such as MAHLE Sistemas de Filtração Ltda., MAHLE MMG Indústria e Comércio Ltda. and MAHLE Participações Ltda. Throughout the 2000s and 2010s, the company also carried out significant acquisitions and joint ventures, such as the joint venture with Austrian company Miba for the production of sintered components and the formation of MAHLE Hirshvogel Forjas S.A., in addition to acquisitions of bearing shell assets in Brazil and valve and distribution operations in Argentina. In 2011, the company converted all preferred shares into common shares, became listed on B3’s Novo Mercado segment and strengthened its commitment to more advanced corporate governance practices.

MAHLE Metal Leve positions itself as an auto parts manufacturer focused on components for internal combustion engines and filtration, thermal management and fluid management systems. The company is part of the MAHLE Group, one of the major global auto parts suppliers, which operates as a top-tier 1 supplier, i.e., directly to vehicle manufacturers. As of December 31, 2024, the company reported operations in two main operating segments: “Powertrain and Charging” (formerly called Engine Components) and “Thermal and Fluid Systems” (formerly Filters). The first segment concentrates products such as pistons, piston rings, piston pins, camshafts, bearing shells, bushings, connecting rods, ring carriers, thrust washers, fire rings, cylinder liners, radiators, condensers and mechanical compressors, generally used in internal combustion engines and motor vehicles. The second segment groups fuel, air and oil filters, cabin filters, activated carbon filters, intake manifolds and oil separators, as well as a range of industrial filters and related equipment.

From a business model standpoint, MAHLE Metal Leve operates both in the original equipment (OEM) market and in the replacement (Aftermarket) market. In OEM, the company supplies directly to vehicle manufacturers, developing components and systems jointly with automakers to meet technical and quality specifications. Its customer base is diversified, with no individual customer accounting for more than 10% of net operating revenue, which reduces dependence on large standalone contracts. In the Aftermarket, the company sells auto parts to maintenance and repair shops, distributors and engine rebuilders, offering engine components, air-conditioning systems, air management, electrical systems, diagnostic equipment and tools, as well as mechanical services. Approximately 71% of the Aftermarket product catalog sold in South America is produced by MAHLE Metal Leve itself in the region, underscoring a significant local production base.

The company’s geographic presence is concentrated in South America, with six industrial plants, five in Brazil and one in Argentina. In Brazil, the factories are located in Mogi Guaçu (two units), São Bernardo do Campo, Jaguariúna and Itajubá, while in Argentina the production plant is located in Rafaela. The company also operates two proprietary distribution centers, in Limeira (SP) and Buenos Aires, in addition to a sales office in Panama City, which contributes to commercial coverage in Central America. Sales reach more than 20 countries, including the United States, Germany, Mexico, Portugal and Spain. In 2024, total consolidated net operating revenue was relevantly distributed among South America (including Brazil and Argentina as domestic markets), Europe, Central and North America, and other regions such as Africa, Asia, Oceania and the Middle East, reflecting MAHLE Metal Leve’s export profile.

Within the MAHLE Group structure, the company has the technological support of a global network of industrial plants and research and development centers, in addition to a strategic asset of its own: the Technology Center located in Jundiaí (SP). This center is described as one of the largest and best equipped in South America for engine research and development, leading within the group the development and application of biofuels and biomaterials technologies. This activity is aligned with the MAHLE 2030+ global strategy, which is based on three pillars: cost leadership in internal combustion engines (ICE), with a focus on reducing CO2 emissions in the production chain; systems solutions, especially in thermal management; and a focus on ePowertrain. Within this strategy, MAHLE Metal Leve contributes with research and development aimed at energy efficiency and large-scale decarbonization, especially in emerging markets.

Diversification of channels and markets is a central component of MAHLE Metal Leve’s competitive positioning. The company has a balanced mix between OEM and Aftermarket, as well as broad geographic and customer base diversification. In OEM, its net operating revenue between 2020 and 2023 grew significantly, driven by market share gains, pricing management and acquisitions of operations. In Aftermarket, the company highlights the more resilient nature of this market in scenarios of weaker demand for new vehicles, since maintenance of the existing fleet tends to sustain demand for replacement parts. The Aftermarket marketing strategy is structured around an ecosystem of sales, marketing and technical support, in which the “Juntos para Valer!” program seeks to strengthen the brand’s presence among distributors, repair shops and other professional customers through campaigns and engagement initiatives.

In terms of the regulatory environment and governance practices, MAHLE Metal Leve is a publicly traded company listed on B3’s Novo Mercado, a segment that requires higher levels of transparency and protection for minority shareholders. From a regulatory standpoint, the company highlights the need to comply with Brazil’s General Data Protection Law (LGPD), which sets out principles and obligations for the processing of personal data. The company reports being at an advanced stage of alignment with LGPD requirements, with the appointment of a data protection officer, creation of a working group, review of policies and processes, adoption of technical and administrative measures, as well as internal training and awareness initiatives. In the environmental field, the company acknowledges the Brazilian legal framework for administrative, civil and criminal liability for environmental damage, which requires ongoing attention to current environmental protection regulations. These elements, combined with its integration into the MAHLE Group and its operations in global markets, shape the context of risks, opportunities and governance under which LEVE3 shares are traded on B3.