TUPY3

Tupy, whose common shares are traded on B3 under the ticker TUPY3, traces its origins to 1938, when it was founded by Albano Schmidt, Hermann Metz and Arno Schwarz. In its early years and for the following two decades, the company focused on manufacturing malleable iron fittings, a segment in which it developed strong technical expertise. With the advance of the automotive industry in Brazil, the business went through a gradual transformation, becoming a supplier of automotive components, an activity that was consolidated as its core business between the 1980s and 1990s. This shift required significant investments in workforce qualification and technology, including the creation in 1959 of the Tupy Technical School, dedicated to training specialized labor in casting and metallurgy.

Throughout its history, Tupy has deepened the technological and engineering base that underpins its industrial operations. In 1970, it entered into a partnership with the University of São Paulo, creating a Research Center that operated until 1997, when its researchers and engineers were incorporated into the company’s engineering department. In 1975, after building its third manufacturing unit in the Joinville industrial park, the company began producing structural components in cast iron, a segment that would gain increasing importance in the following years. From the 1990s onward, after some unsuccessful diversification efforts, the company returned to focusing its strategy on its metallurgical core, strengthening its operations in high‑complexity cast and machined products for the automotive and capital goods supply chains.

Tupy has also undergone significant changes in its ownership and capital structure, with repercussions for its position in the Brazilian capital markets. In 1966, it obtained registration with the Brazilian Securities and Exchange Commission (CVM), formalizing its status as a publicly held company. In 1995, control was transferred to institutional investors such as pension funds and domestic banks. The company expanded its industrial base through acquisitions, such as the purchase in 1998 of COFAP’s foundry unit in Mauá (SP), focused on producing structural cast‑iron components for light and heavy trucks and off‑road machinery. In 2013, it completed its migration to B3’s Novo Mercado, adopting higher corporate governance standards, including the conversion of preferred shares into common shares, bylaw provisions for independent board members and 100% tag along rights.

Tupy’s current business model is structured into three major operating segments: Structural Components & Manufacturing Contracts, Distribution and Energy & Decarbonization. The first, which represents the core of the company’s activity, comprises the made‑to‑order manufacture of cast, machined and assembled products with high technological content, intended mainly for global manufacturers of engines used in commercial vehicles, construction machinery, tractors, agricultural equipment, capital goods in general and passenger cars, in addition to engine assembly for third parties. In 2024, this group of activities accounted for R$ 9,190.9 million in consolidated revenue, equivalent to 86.2% of the company’s total revenue, highlighting the relevance of this segment in cash and earnings generation.

The Distribution segment complements the core business with a focus on replacement parts and hydraulic products. It mainly consists of the distribution of replacement parts for MWM brand diesel engines and other manufacturers, malleable iron fittings for the construction industry, and cast‑iron profiles for various applications, especially in fire networks, pneumatic systems and industrial fluid handling. In 2024, this segment generated R$ 799.8 million in revenue, or 7.5% of the consolidated total. Tupy supports this business through a network of more than 1,300 sales points worldwide and 518 authorized service centers for MWM products, in addition to dedicated distribution centers in Joinville (fittings and profiles) and Jundiaí (SP), focused on MWM replacement parts, serving the vehicle, marine, agricultural, energy and infrastructure segments.

The Energy & Decarbonization segment reflects diversification into energy applications and solutions related to emissions reduction, frequently using the same industrial base of structural components. This business arm includes generator sets, in‑house manufactured engines, marine applications, lighting towers, vehicle conversions, irrigation and fertigation motor pumps, bioplants and products and services related to decarbonization. In 2024, consolidated revenue from this segment totaled R$ 674.4 million, corresponding to 6.3% of total revenue. Operations share assets and processes with the Structural Components segment, especially in the assembly, testing and validation stages, adding greater value through more complete solutions tailored to the specific needs of end customers.

From a production standpoint, Tupy operates highly complex metallurgical processes, integrating melting, molding, core making, pouring, finishing, machining and, more recently, assembly stages. The company produces cast‑iron alloys from steel scrap, pig iron and metal alloys, using coke‑fired furnaces and electric induction furnaces. The molds are made from mixtures of sand, clays and additives, and combined with sand and resin cores that define the internal geometry of blocks and cylinder heads. After pouring and cooling, the parts undergo finishing with shot blasting and grinding, followed by rigorous quality control through leak tests, dimensional inspection, X‑ray, ultrasound, acoustic resonance and hardness tests. Machining gives the parts their final dimensions, allowing the supply of raw castings as well as fully machined or assembled parts for automakers’ assembly lines (OEMs).

The company has a strong export profile. In 2024, 60.9% of revenue came from foreign markets, with 41.0% from North America, 14.9% from Europe, 2.8% from Asia, Africa and Oceania, and 2.2% from South and Central America. The Brazilian domestic market accounted for 39.1% of net revenue, or R$ 4,165.7 million. Tupy operates through direct and indirect subsidiaries in countries such as Germany, the United States, Mexico, the Netherlands, Portugal and Italy, which enables direct distribution to customers, mainly automakers, without intermediaries. The Mexican operations, for example, serve exclusively products geared toward transportation, infrastructure and agriculture, with sales made directly to manufacturers, reinforcing the company’s positioning as an independent global supplier of cast‑iron engine blocks and cylinder heads.

In regulatory and sustainability terms, Tupy is subject to a broad set of environmental permits and licenses in Brazil and abroad, covering operating licenses, the use of controlled chemical products, water withdrawal rights, effluent disposal and waste management. The company holds ISO 14001:2015 certification and adopts a Quality, Environment, Health and Safety Policy that emphasizes compliance with legislation, risk prevention and optimization of natural resource use. In 2024, it invested R$ 27.8 million in environmental control and monitoring systems at its plants. The company discloses ESG information through a Sustainability Report based on the GRI 2021 standards, ISSB principles, SASB metrics for Metals & Mining and Machinery & Industrial Goods, and TCFD recommendations, incorporating the concept of double materiality in identifying issues relevant to the business and its stakeholders.

For investors analyzing TUPY3 shares on B3, the company presents itself as an industrial player with strong exposure to the transportation, infrastructure and agriculture sectors, which in 2024 accounted for 86.2% of its revenue. The business is capital‑ and technology‑intensive, with long investment and maturation cycles and long‑term supply relationships with major automakers and engine manufacturers. The combination of a global production base, relevance in critical components such as cast‑iron engine blocks and cylinder heads, and a growing portfolio in energy and decarbonization makes up the context in which Tupy operates and generates its revenue, within a regulatory and sustainability environment that is constantly evolving.