Mahle : Still a complicated story

Mahle continues to underperform the automotive industry due to its exposure to non-light vehicles and a less agnostic product mix, in addition to a heavy cost base (R&D, restructuring). The coming quarters (Q2 2025 results to be released on 9 September) are expected to continue to show a decline in EBITDA, negative FCF and slight re-leveraging, which should lead to a downgrade by Moody's to Ba3. We will probably have to wait for the effects of savings/synergies and greater visibility on volumes, likely not before 2027, to see better results. Mahle's story therefore remains complicated and tortuous in the long term. Fortunately, leverage remains moderate and liquidity comfortable, recently supported by the new private issue.