MAHLE Metal Leve S A : Dados Econômico-Financeiros

(A free translation of the original in Portuguese)

MAHLE Metal Leve S.A.

Financial statements at December 31, 2022

1

Mogi Guaçu, São Paulo, March 13, 2023 - MAHLE Metal Leve S.A. (B3: LEVE3), a Brazilian automotive parts supplier

of internal combustion engine components and filtration systems, today announced its financial results for fiscal year 2022. Unless otherwise stated, the financial and operating information contained herein is provided on a consolidated basis and in Brazilian real (BRL), and was prepared in accordance with the Brazilian Corporation Law.

Fourth Quarter and Full Year 2022 Financial Results Video Conference Call

FINANCIAL HIGHLIGHTS

Date: March 14, 2023

Net Sales Revenue: Net sales revenue was R$ 4,224.0 million as of December 31, 2022, an increase of 16.8% year-over-year. In the fourth quarter of 2022 (4Q22), net sales revenue increased by 18.5% compared with the fourth quarter of 2021 (4Q21).

Time 12 noon - Brasilia 3:00 p.m. - London 11:00 a.m. - New York

Company's performance by market:

2022 x 2021

4Q22 x 4Q21

Original Equipment - Domestic market

↑ 22.2%

↑ 21.8%

Original Equipment - Export market

↑ 3.0%

↑ 15.6%

Video Conference Call:

Aftermarket - Domestic market

↑ 31.2%

↑ 30.1%Aftermarket - Export market

↑ 7.1%

↓ 22.1%

Choose the language you wish to hear the call in:  Portuguese or

Total change in revenue:

↑ 16.8%

↑ 18.5%

Further details of changes are provided in items 5.1, 5.2 and 5.3 below.

 simultaneous translation into English.

Mahle's Investor Relations website:https://ri.mahle.com.br

GPTW Ranking: In September 2022, the Company was named by GPTW Brazil as one of the 100 Best Companies to Work for in the state of São Paulo.

Sustainability Report: During fiscal 2022, the Company continued to improve its sustainability efforts and initiatives and published on January 25, 2023 its first Sustainability Report. Further information is provided in item 6 in this report.

Key indicators
(in BRL million)	2022 (a)	2021 (b)	(a/b)	4Q22 (c)	3Q22 (d)	4Q21 (e)	(c/d)	(c/e)
Net sales revenue	4,224.0	3,615.1	16.8%	1,115.8	1,198.8	941.5	-6.9%	18.5%
EBITDA	816.7	823.1	-0.8%	171.7	285.0	164.6	-39.8%	4.3%
Adjusted EBITDA ¹	845.0	726.4	16.3%	202.0	283.0	167.2	-28.6%	20.8%
EBITDA margin	19.3%	22.8%	-3.5 p.p.	15.4%	23.8%	17.5%	-8.4 p.p.	-2.1 p.p.
Adjusted EBITDA margin ¹	20.0%	20.1%	-0.1 p.p.	18.1%	23.6%	17.8%	-5.5 p.p.	0.3 p.p.
Net profit	565.3	566.9	-0.3%	123.1	204.3	130.8	-39.7%	-5.9%
Adjusted net profit ²	582.6	496.3	17.4%	142.9	201.8	131.5	-29.2%	8.7%
Net margin	13.4%	15.7%	-2.3 p.p.	11.0%	17.0%	13.9%	-5.9 p.p.	-2.9 p.p.
Adjusted net margin ²	13.8%	13.7%	0.1 p.p.	12.8%	16.8%	14.0%	-3.9 p.p.	-1.2 p.p.

¹ Adjusted EBITDA: Details of the adjustments are provided in items 5.9 and 5.10 in this report.

² Adjusted net profit: Details of the adjustments are provided in item 5.13 in this report.

Net profit and net margin shown in the above table refers to "Profit attributable to owners of the Company" in item 5 in this report.

CONTENTS

• 1. Management Commentary ....................................................................................................................................... 3

• 2. Macroeconomic Conditions and Outlook ............................................................................................................... 4

• 3. About MAHLE Metal Leve ........................................................................................................................................ 4

• 4. Development of the Automotive Industry .............................................................................................................. 5

  • 4.1 Development of the Brazilian and Argentine markets ......................................................................................... 5

  • 4.2 Vehicle production in the major export markets .................................................................................................. 5

• 5. Company's Financial and Economic Performance ............................................................................................... 6

  • 5.1 Net sales revenue by market .......................................................................................................................... 7

  • 5.2 Original equipment sales ................................................................................................................................ 7

  • 5.3 Aftermarket sales ............................................................................................................................................. 8

  • 5.4 Consolidated export by geographical market ............................................................................................... 9

  • 5.5 Net sales by segment and by product ........................................................................................................... 9

  • 5.6 Gross margin ................................................................................................................................................... 9

  • 5.7 Selling, general and administrative expenses ............................................................................................ 10

  • 5.8 Research and development (R&D) expenses .............................................................................................. 10

  • 5.9 Other operating income (expenses), net ..................................................................................................... 11

  • 5.10 Operating result measured by EBITDA ........................................................................................................ 11

  • 5.11 Net finance income (costs) ........................................................................................................................... 12

  • 5.12 Income tax and social contribution .............................................................................................................. 12

  • 5.13 Net profit and adjusted net profit ................................................................................................................. 13

  • 5.14 Capital expenditures ..................................................................................................................................... 13

  • 5.15 Net cash position ........................................................................................................................................... 13

  • 5.16 Distribution of dividends and interest on capital to shareholders ............................................................ 14

• 6. Sustainability (ESG) ............................................................................................................................................... 14

  • 6.1 Environmental ................................................................................................................................................ 15

  • 6.2 Social .............................................................................................................................................................. 15

  • 6.3 Corporate Governance .................................................................................................................................. 16

  • 6.4 Sustainable innovations ............................................................................................................................... 17

• 7. Investor Relations and Capital Market .................................................................................................................. 17

  • 7.1. Stock performance and free float ..................................................................................................................... 17

  • 7.2. Shareholder structure ......................................................................................................................................... 18

• 8. Independent Auditors ............................................................................................................................................ 19

• 9. Executive Board's Declaration .............................................................................................................................. 19

• 10. Acknowledgments ............................................................................................................................................. 19

DEAR SHAREHOLDERS,

In compliance with applicable laws and regulations, the Company Management Board hereby submits to you the Management Report and the Financial Statements with the Independent Auditor's Report and the Report of the Supervisory Board for the fiscal year ended December 31, 2022.

1. Management Commentary

2022 was an incredibly accelerated year. Global crisis, Brazil's elections, World Cup, and the lockdown in some Chinese cities, have affected the business environment directly, and issues like protectionist policies in several countries, shortage of materials, high inflation, and economic volatility, have been the hot topic around the world. In 2022 we continued to navigate global supply chain logistics challenges, with rising commodities prices, materials shortages and increasing freight rates.

These developments have affected the entire world, with global GDP growth slowing.

We strive to achieve a balance between the Original Equipment and Aftermarket business segments in both domestic and export markets, so as to offset oscillations across the segments and stabilize our profit margins over time.

The Company's full year 2022 net revenue grew by 16.8% compared with the full year 2021, driven by an increase in sales in the Aftermarket business segment (+25.8%), in the domestic OE market (+22.2%), and in the export OE market (+3.0%). Net revenue for the fourth quarter of 2022 increased 18.5% compared with the fourth quarter of 2021, driven by an increase in sales in the Aftermarket (+18.8%), in the domestic OE market (+21.8%), and in the export OE market (+15.6%).

The chart below shows the Company's revenue by business segment in 2022 and 2021:

Adjusted EBITDA margin for the full year 2022 was 20.0% (R$ 845.0 million) versus 20.1% (R$ 726.4 million with adjustment) for the full year 2021. Adjusted EBITDA margin for 4Q22 was 18.1% (R$ 202.0 million) versus 17.8% (R$ 167.2 with adjustment) for 4Q21. More information about changes in EBITDA and adjusted EBITDA is provided in item 5.10 below.

MAHLE believes that the link between environmental protection, good corporate governance and the economy has become a success factor. Just as we at MAHLE put a higher focus on the entire value chain of sustainable mobility, our business partners increasingly take an interest in our sustainability management and request insights on how we consider environmental and social aspects in our activities.

In our Sustainability Report we inform you about all the efforts and activities we have made around sustainability in 2022 to integrate Environmental, Social and Governance (ESG) criteria into our day-to-day company operations (Item 6 in this document). Click here to get access to our Sustainability Report.

From a technology perspective, we continue to assume a leading role in the ongoing development of the sustainable combustion engine. We believe that employing biofuels, synthetic fuels and green hydrogen presents an even greater opportunity to cut carbon emissions. We are primarily concentrating on exploiting further emission savings potential with technologies designed to increase energy efficiency.

We are offering our customers solutions that are consistent with both current and future legislation and making a significant contribution to reducing emissions.

Our research and development center provided technical advice on the development of ROTA2030, a program created by the Brazilian government to foster the development of the Brazilian automotive industry through the active participation of the industry players, like the Brazilian Association of Auto Parts Manufacturers (SINDIPEÇAS).

MAHLE was named by ¹GPTW Brazil as one of the 100 Best Companies to Work for in the state of São Paulo. In its first year of entering the process, MAHLE Metal Leve S.A. (and the MAHLE Group Brazil) earned this certification based on a survey of employee satisfaction and an analysis of organizational culture that reflects strategic values such as leadership, innovation, trust and development of people inside an organization. We celebrate this award as a tribute to our employees who make MAHLE a great place to work.

¹ Great Place To Work (GPTW) is a global consulting firm that recognizes the Best Workplaces in 109 countries around the world, based on an organizational climate survey where employees provide feedback on their workplace, leadership, relationships and company culture.

2. Macroeconomic Conditions and Outlook

The global economic outlook has deteriorated throughout 2022 in the face of rising interest rates and activity slowdown while persistently high inflation triggered monetary tightening cycles in the USA and Europe with the governors of the central banks talking tough and saying that they are ready to keep raising rates more. Added to this are the prolonged Russia-Ukraine war and its economic consequences; China's zero-Covid lockdowns and the severe real estate crisis; and the end of expansionary fiscal policies as the pandemic shows signs of easing and amid the need to tame inflation.

In Brazil, 2022 was marked by presidential elections, the impact of the tight monetary policy, the pace of economic activity, which has improved in the services and manufacturing sectors. In the credit market, while there were concerns about default and the high percentage of income committed to loan repayments, the volume of loans granted remained stable after increasing at the beginning of the year. Brazil's benchmark interest rate SELIC was 9.25% p.a. at the beginning of 2022 and 13.75% p.a. at the end of 2022.

In a forecast released at the time of publication of this report, the Central Bank of Brazil expects SELIC rate of 12.50% p.a. at the end of 2023.

According to the minutes of its 252nd meeting issued on February 7, 2023, Brazil's Monetary Policy Committee (Copom) forecasts low global growth in 2023. China's relaxation of Covid restrictions and the warmer winter weather in Europe have helped temper the intensity of the expected global economic slowdown for the next quarters due to tighter financial conditions in the major economies.

Consumer price inflation rate, which includes principally volatile items and those affected by tax changes, has dropped recently but remains high. The various measures of underlying inflation are above the target inflation range.

The GDP released reflects moderation in domestic economic activity, which was less than 1.0% according to the Central of Brazil. The most recent indicators are in line with the slowdown anticipated by the Copom.

3. About MAHLE Metal Leve

We are a Brazilian automotive parts company that manufactures and sells components for internal combustion engines and automotive filters. We manufacture reliable, high-quality products with cutting-edge technology, and are continuously investing in the research and development of new products and production processes.

We have been operating in Brazil since the 1950's and have a large portfolio of products and integrated solutions, including customized products developed in close collaboration with our principal customers. In the original equipment industry, MAHLE supplies automotive manufacturers and our Aftermarket business unit supplies large auto parts distributors and engine repair partners.

Our products are manufactured and sold in Brazil and Argentina and exported to more than 60 countries, to a diversified customer portfolio, including all car manufacturers in Brazil.