TUPY3 Tupy

Tupy, whose common shares trade on B3 under the ticker TUPY3, traces its origins back 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. As the automotive industry advanced in Brazil, the business underwent a gradual transformation, becoming a supplier of automotive components, an activity that 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 foundry and metallurgy.

Throughout its history, Tupy has deepened the technological and engineering base that underpins its industrial operations. In 1970, it began 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 subsequent years. From the 1990s onward, after some less successful diversification efforts, the company once again focused its strategy on its metallurgical core, strengthening its role in high-complexity cast and machined products for the automotive and capital goods supply chain.

Tupy has also undergone relevant changes in its ownership and capital structure, with effects on its position in the Brazilian capital market. In 1966, it obtained registration with the Brazilian Securities and Exchange Commission (CVM), formalizing its status as a publicly traded company. In 1995, controlling interest 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 a COFAP foundry unit in Mauá (SP), dedicated to producing structural cast iron components for light and heavy trucks and off-road machines. In 2013, it completed its migration to the Novo Mercado segment of B3, 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, covers the made-to-order production 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 set 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 generation and results.

The Distribution segment complements the core business with a focus on spare parts and hydraulic products. It is composed mainly of the distribution of spare 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 global points of sale and 518 authorized service providers for MWM products, as well as dedicated distribution centers in Joinville (fittings and profiles) and Jundiaí (SP), focused on MWM spare parts, serving the vehicle, marine, agricultural, energy and infrastructure segments.

The Energy & Decarbonization segment reflects diversification into energy applications and solutions associated with emissions reduction, often using the same industrial base of structural components. This business arm includes generator sets, proprietary engines, marine applications, lighting towers, vehicle conversion, 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 assembly, testing and validation stages, adding more value by means of more complete solutions tailored to specific end-customer needs.

From a production standpoint, Tupy operates highly complex metallurgical processes, integrating melting, molding, core making, pouring, finishing, machining and, more recently, assembly. The company produces cast iron alloys from steel scrap, pig iron and metal alloys, using coke-fired and electric induction furnaces. Molds are made from mixtures of sand, clays and additives, combined with sand and resin cores that define the internal geometry of engine 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 testing. Machining provides final dimensions, enabling the supply of either raw castings or fully machined or assembled parts for OEM assembly lines.

The company has a strongly export-oriented profile. In 2024, 60.9% of revenue came from foreign markets, with 41.0% originating in North America, 14.9% in Europe, 2.8% in Asia, Africa and Oceania, and 2.2% in 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 allows direct distribution to customers, mainly automakers, without intermediaries. The Mexican operations, for example, serve exclusively products for transport, 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 licenses and permits, both in Brazil and abroad, covering operating licenses, use of controlled chemical products, water abstraction rights, effluent discharge 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 GRI 2021 standards, ISSB principles, SASB metrics for Metals & Mining and Machinery & Industrial Goods, as well as TCFD recommendations, incorporating the concept of double materiality in identifying topics 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 transport, 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 shapes the context in which Tupy operates and generates its revenue, within a regulatory and sustainability environment that is constantly evolving.