MTSA4

Metisa, originally founded on January 8, 1942 under the name Metalúrgica Timboense Ltda., has its origins in the metallurgical sector and in the production of tools for agriculture. Created by Mr. Richard Paul Junior, it began operations producing shovels and other hand tools for agricultural use, reflecting the industrial vocation of the region of Timbó, in Santa Catarina. In 1948, the company was converted into a corporation, an important step in its corporate evolution. In 1953, the installation of the first hot rolling mill for steel plates marked a turning point in the company’s trajectory by providing autonomy in a critical input for its operations. From that moment on, Metisa began to control a relevant stage of its production chain, reducing external dependence on semi-finished raw materials.

In the following decades, Metisa expanded its product portfolio and diversified its activities. In 1966, it entered a new market by starting to manufacture parts for tractors, in a context in which a large portion of these components was imported. The company began producing blades for motor graders and track shoes for tractors, items that achieved good commercial acceptance. In 1985, management and the last pieces of equipment from the old plant were transferred to the new unit, consolidating the entire industrial park in the industrial area of Timbó (SC). In 1987, changes in the shareholder base, with the entry of new partners, contributed to the professionalization of management at multiple levels. In 2001, the installation of an open rolling mill with four three-high stands increased rolling capacity, strengthening the company’s industrial infrastructure. Along this journey, the company also advanced in quality certifications, being certified under NBR ISO 9001 since 1997 and, more recently, under NBR ISO 14001:2015 in 2022.

Metisa’s shares, traded on B3 under the tickers MTSA3 and MTSA4, represent a company characteristically focused on metallurgy, whose core business is the production of steel products for various uses. The company states that it operates in a single operating segment, given the high versatility of its facilities, which allow the same set of equipment to manufacture products destined for different end markets. The portfolio includes ground-engaging tools used by earthmoving machines, such as blades for tractors, motor graders, wheel loaders, teeth for excavators and backhoe loaders, track shoes and grousers for recovering track shoes. Metisa also produces discs for plows, harrows and other agricultural implements, stone-cutting blades, hand tools such as shovels and post-hole diggers, railway accessories such as fishplates for rails, components for road implements, such as axles for semi-trailers and trailers, as well as high-carbon steel washers.

From an industrial standpoint, Metisa’s production process is based on hot steel transformation, including rolling, forging and stamping operations, with possible application of heat treatment and subsequent finishing by machining. The production technology used is described as public domain, with no material dependence on external proprietary know-how. Installed capacity varies according to the mix of products manufactured, since the same production line can serve different end-use lines. The company adopts a preventive maintenance program that includes scheduled downtime at the end and beginning of each year, with collective vacations, focused especially on maintaining equipment that requires prolonged shutdowns, such as heating furnaces for hot processes. In terms of raw materials, steel is the central input, purchased mainly in the form of continuously cast billets and hot-rolled coils, in high-carbon, microalloyed and low-carbon steel grades suitable for mechanical construction.

Metisa operates commercially in two major markets: direct supply to industries and the replacement (aftermarket) segment. In the first, it serves manufacturers of machinery and equipment that use its products as components incorporated into the final product, with sales made directly to these industries. In the replacement market, distribution takes place through distributors, supported by a network of sales representatives. This distribution structure makes it possible to cover different segments such as construction, agribusiness, road and rail infrastructure, as well as mining and stone extraction, indirectly, insofar as stone-cutting blades are used. The company’s sales are spread across a large number of customers, with no significant concentration, since no individual customer accounts for more than 10% of net revenue. Competition, according to the issuer itself, is based on product quality and price, in markets where there are no records of monopolies or oligopolies.

Metisa’s geographic revenue exposure combines domestic market and exports. Between 2022 and 2024, most of net operating revenue was generated in Brazil, with a share between 77.3% and 79.8%. Revenue from abroad ranged from 20.2% to 22.7% in the same period, with sales distributed across several regions. Europe (including Turkey), North America (including Mexico) and South America account for significant portions of exports, but there is also presence in Africa, the Middle East/North Africa, Asia, Oceania and Central America and the Caribbean. According to the issuer, there are no known restrictions on exports by destination countries. In terms of financial performance, the issuer’s net operating revenue was R$ 798.3 million in 2022, R$ 572.8 million in 2023 and R$ 505.1 million in 2024, with net income of R$ 91.8 million, R$ 87.3 million and R$ 30.5 million, respectively, always fully attributable to the issuer.

Seasonality in sales is a relevant element for investors to consider when monitoring MTSA3 and MTSA4 shares. The company reports that sales behavior varies by product line. Ground-engaging tools have higher demand between March and September in the domestic market and between May and August in exports. Parts for agricultural machinery and implements show peak sales between April and October in Brazil and from October to February abroad. Stone-cutting blades have higher domestic sales volume between August and December, while hand tools see higher turnover between March and September in the domestic market and in specific periods in exports. Other lines do not show relevant seasonality. This dynamic helps explain revenue fluctuations throughout the year and is linked to the agricultural calendar and to investment cycles in construction and machinery maintenance.

In its relationship with suppliers, Metisa highlights Grupo Gerdau as its main partner in steel supply, with deliveries scheduled based on the company’s production plan. There are, however, other relevant steel suppliers in Brazil, such as ArcelorMittal, Usiminas and CSN, which reduces absolute dependence on a single group. Raw material prices are described as volatile, without stability for periods longer than six months, impacting production costs as a function of steel price swings. In the field of intellectual property, industrial processes and product designs are mostly in the public domain, with the exception of the stone-cutting blade design, which is patented and owned by Metisa itself, reducing the need to pay royalties or external licenses.

From an environmental, social and governance standpoint, Metisa reports a commitment to environmental preservation and compliance with official standards. Its industrial facilities, located on a 242,000 m² site on the banks of the Benedito Novo River, have a program to restore riparian forest through the planting of native species. The company has implemented an industrial water recirculation system for the cooling of furnaces, rolling mills and heat treatment facilities, with decanting, filtration and subsequent cooling in a 30,000 m² pond, controlling quality and avoiding effluent discharge, limiting river water intake to replenishing evaporation losses. Solid waste, mainly mill scale generated in hot transformation, is sent to a duly authorized landfill. In line with sustainability practices, Metisa has adapted its management system to ISO 9001:2015, obtained ISO 14001:2015 certification in 2022 and is developing methodologies for sustainability performance reporting, including an ESG practices adherence assessment, definition of a materiality matrix, key indicators, correlation with SDGs, greenhouse gas emissions inventory and preparation of a specific report.

In addition to its core industrial operation, the company has a subsidiary, Metisa Florestal e Energética S.A., dedicated to reforestation activities and commercial exploitation of forest products, complementing its supply structure and initiatives related to the use of natural resources. For investors tracking MTSA3 and MTSA4 shares on B3, these elements help to compose a broader picture of the business model, supply chain, exposure to domestic and foreign markets, revenue seasonality, environmental practices and management certifications, within the profile of a metallurgical company serving several industrial segments, especially heavy construction, agriculture, transportation and infrastructure.