Tear Sheet: Tupy S.A.

. The recovery of the truck market in Brazil was delayed to 2024 from our previous expectation of second-half 2023, mostly due to restricted financing and vehicles with higher average prices. According to ANFAVEA, the Brazilian Association of Automotive Vehicle Manufacturers, during January to October of this year, production of heavy vehicles dropped 34.2% from the same period last year, and sales dropped 11.1%. We think better economic conditions in Brazil, along with decreasing interest rates and inflation, should boost commercial vehicles sales, increasing Tupy?s cash flow. Moreover, the company is continuing to improve working capital management with lower inventory, while absorbing synergies from the consolidation of MWM, an engine manufacturer, which is less capital intensive. These factors support our

...December 12, 2023 We expect truck production and domestic sales to recover by 2024, supporting our forecast cash flow for auto supplier Tupy. The recovery of the truck market in Brazil was delayed to 2024 from our previous expectation of second-half 2023, mostly due to restricted financing and vehicles with higher average prices. According to ANFAVEA, the Brazilian Association of Automotive Vehicle Manufacturers, during January to October of this year, production of heavy vehicles dropped 34.2% from the same period last year, and sales dropped 11.1%. We think better economic conditions in Brazil, along with decreasing interest rates and inflation, should boost commercial vehicles sales, increasing Tupy's cash flow. Moreover, the company is continuing to improve working capital management with lower inventory, while absorbing synergies from the consolidation of MWM, an engine manufacturer, which is less capital intensive. These factors support our expectation of solid free operating cash...

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