Release 2Q23

Strong operating cash generation.
Price recovery and cost and inventory reduction

Revenues of R$3.0 billion in 2Q23 (+17% vs. 2Q22), including the result of MWM Tupy do Brasil (“MWM”), of approximately R$577 million.The impact from the change in the engine emission technology (Proconve P8/Euro 6) and the performance of economic indicators led to lower sales than those reported in 2Q22 (-7% in the physical volume of structural components). Initiatives to recompose and realize prices mitigated the effect of the drop in volumes.

Operating Cash Flow: generation of R$159 million in 2Q23 vs. consumption of R$10 million in 2Q22 and R$132 million in 1Q23. This result was due to initiatives to manage working capital.

Adjusted EBITDA: R$332 million (-4% vs. 2Q22), impacted by the 15% reduction in volumes, due to the performance of the domestic market and initiatives to reduce inventory and (ii) the appreciation of the Mexican Peso (12% average exchange rate vs 2Q22), with effect on costs. Factors mitigated by synergies, cost reduction and freight expenses, as well as price re-composition and realization.

Adjusted EBITDA margins: 11.2%, similar to the previous quarter (1Q23), which already included the MWM result, despite the factors mentioned and the appreciation of the Real against the Dollar (5% average exchange rate vs 1Q23).

Net Income: R$62 million in 2Q23, affected, among other factors, by the FX variation in the financial result (a R$40 million expense vs. a R$36 million revenue in 2Q22) and the restatement of the tax contingency, with a non-recurring effect of R$66 million. Excluding this effect, net income would be R$128 million.

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