Good morning, ladies and gentlemen, and thank you for waiting. We would like to welcome everyone to Iochpe-Maxion’s fourth quarter 2021 and full-year 2021 earnings conference call . Mr. Marcos Oliveira, Chief Executive Officer, and Mr. Elcio Ito, Chief Financial and Investor Relations Officer are present at the conference today and available for the Q&A session afterwards. We would like to inform that this conference call is being broadcast live online at the company's website www.iochpe-maxion.com.br. Today's presentation is available for download at the investors information section. We also would like to inform that all participants will be in listen-only mode during the company's presentation, and then we will start the Q&A session right after it. During this call, should any participant need assistance, please press asterisk zero to reach the operator.
Before proceeding, we would like to mention that forward-looking statements are based on the beliefs and assumptions of Iochpe-Maxion's management, as well as information currently available to the company. Forward-looking statements are not guarantees of performance. They involve risks, uncertainties, and assumptions because they are related to future events, and therefore depend on circumstances that may or may not occur. Now, I will give the floor to Marcos Oliveira, Iochpe-Maxion's CEO. Marcos Oliveira, you may proceed.
Good morning and welcome to the results teleconference for Maxion's fourth quarter 2021 and 2021 earnings conference call. You have the slide deck available for you to follow. Year 2021 was very challenging with several impacts and uncertainties that the pandemic of COVID-19 has brought and still impacts our business.
Many of the needs have been lacking information and also lacking products because production is lacking manufacturing and due to the different geography and portfolio, we have managed to succeed in several adverse events. Many of our joint effort has helped in the production of vehicles and parts, and the results have shown that we are returning back to the operational margins and financial advantages despite the pandemic. In 2021, we have managed to result with the decrease in reduction due to the crisis in the launching of new products and in the improvement of productivity. We continue with the ramp-up of our aluminum wheels plant in India with a growth in 87% in comparison to last year's production. We have also advanced with our stamping plant in Mexico with an increase in comparison to 2020.
We have also increased our production in China, and we will continue with the ramp-up of operations in China in 2022. I will now follow the slides that are available. We are now at slide number two, and you can see that this is a broad view of the industry in 2019, 2020 and 2021. This is provided by IHS Markit from February 2022 and company estimates. You can see the recovery in production of light vehicles in 2021 and growth of 13% of global production excluding China. Then you see a drop of around 20% in 2020, which has been impacted especially because of the pandemic and the second quarter of that year. Despite the limitations of semiconductor and the crisis in production, you see a global growth of 9% and 3% when we exclude China.
We have reached an industry of 84 million. These are IHS numbers from February 2020, and this was the year that reflected the uncertainty, especially because of the conflict between Ukraine and Russia. We see a growth that is foreseen for 2022 of about 80% in light vehicles, despite some of the limitations of availabilities of semiconductors. The numbers are going to be a little bit lower than last year's, especially with this limitation in regard to commercial vehicles. We do see a growth of around 9% of production in 2021 after a drop of 30% in the global market, excluding China, and a perspective of growth of 13% in 2022. Let's just remember that these numbers do reflect the view for 2022 within the scenario of this conflict between Ukraine and Russia.
The duration of the conflicts may affect the projections for this year. Following slide number 3, we have the main highlights for the 4Q 2021 and 2021 for Iochpe-Maxion. As I've mentioned before, a positive effect in our company has managed to promote a net revenue of BRL 3.8 billion in 4Q 2021 and BRL 13.7 billion in 2021 overall. These were record indicators for the company. They do reflect a 32.9% growth for 2021 and 53.2% as an overall growth for the year. As far as the adjusted EBITDA is concerned, we have BRL 374.3 million growth with 9.9% margin for this quarter and a 13.4% margin in 2021.
As for the gross profit for 4Q 2021, we had BRL 378.1 million, a growth of 107%, BRL 1,704 million for the whole year of 2021. As for the financial leverage by the adjusted EBITDA was 2.34 times, a reduction compared to 4Q 2020 when we had 6.46 times. Our net earnings was BRL 93.9 million in 4Q 2021 and BRL 537.2 million in 2021, with a distribution of BRL 200.9 million in net earnings in 2021. Following slide number four.
When you look at the net operating revenue in million reais, we have reached BRL 3,787 million with a growth of 33% in comparison to 4Q 2020 and a growth of 6% in comparison to the third quarter, 2021. The increase in revenue is due to the higher sales, launches of new programs and new products and better product mix for the company. When we look at the revenue per region, you see 31% in Europe, 10% in Asia and other, South America with 29% and North America with 30%. Following now slide number five. When you look at the net operational revenue in millions for the whole year of 2021, we have reached BRL 13,688 million, with an increase that was of around 56%.
It's worth highlighting that there has been a drop in the participation of Europe coming from 39% in 2020 down to 32% in 2021. Our light vehicle clients have been the most affected with availability of semiconductors around that region during that year. We can see an increase in participation of South America coming from 22% up to 29% in 2021, and North America stable, just about stable with 30% last year coming to 29% in 2021. Now talking about the net operating revenue breakdown, we see a growth in participation of structural components for commercial vehicles. In the fourth quarter last year in 2020, we see 60%.
4Q 2021, this went up to 22% for structural components with participations of Brazil and South and North America as a whole. We see the participation of aluminum wheels and steel wheels for light vehicles. We see the limitations of semiconductors, and this has dropped numbers for 4Q 2021. We see a growth for commercial vehicles from 28% for steel wheels to a decrease of 20%– 25% with steel wheels.
We now see the net revenue per segment with commercial vehicles representing 36% in 4Q 2020, and with an increase of 47% for 4Q 2021. Now representing 82% with structural components on wheels and 76% for 4Q 2021. On slide 7, you see the revenue evolution per segment. With the segment of commercial vehicles, they did represent less than 35% in 2016 and 2017. You see that in 2021, the commercial vehicles represent 45.3% of the company's revenue.
On slide number eight, you see the net operating revenue per client, and you see the impact per segment as mentioned before, but it also shows our growth with different clients and different markets with special highlights for the segment of parts which represents 4.5% in 2020, and it's grown to 6.1% in 2021. On the next slide, you see the operational performance per region, starting with South America. It has shown BRL 1.097 million, and it's a phenomenal growth of 65.9% year over year, representing 29% now in South America against 23.2% in 4Q 2020.
We now see specifically in the Brazilian market that we have reached a market performance with light vehicles, with a drop in production down to 14.8% in 2021. Whereas with commercial vehicles, we do see an increase of 19.9%. Now looking at North America, we can see a growth of 44.2% when compared to fourth quarter of 2020. When we look at operational revenues in Europe, we have a growth of 7.7% in the fourth quarter of 2021, with a total of BRL 1.177 billion in 2020. Due to the impact of semiconductors through the years.
Looking at the operational performance of Asia and other markets, we have a revenue of BRL 270 million, with a growth of 22.3% when compared to the same period in the previous year. The growth of sales for the segment of light vehicles in India motivated for the growth of the production of the new factory in the country has impacted that. We also have an increase of growth due to operations in China, which were positive in the fourth quarter of this year. In slide number 13, we see a gross profit of BRL 378 million, with a growth of 44.5% in the fourth quarter of 2021 compared to the previous year.
We have a growth of 10% in 2020 in the fourth quarter of 2021. For the entire year of 2021, we had a profit of BRL 1.704 billion, with a growth of 201.4% and a growth of 6.5% in 2020 going to 12.4% in 2021. In slide 14, our adjusted EBITDA for the fourth quarter of 2021 shows a growth of 57.7% when compared to the BRL 237 million in the fourth quarter of 2020, with now 374 million. Our growth has gone to BRL 1.835 billion in the fourth quarter.
Thanks to the growth of Mexico and aimed at the reclassification of the additional risk and the net gain from the legal proceedings from the exclusion of the ICMS and PIS/COFINS basis that was BRL 20.3 million and which positively impacted these results. Our EBITDA of BRL 316.9 million in the fourth quarter of 2021, with a margin of 8.4%, excluding non-recurring events throughout the entire year of 2021, we had BRL 1,835 million, with a growth of 13.4% when compared to the BRL 544 million of 2020. Our adjusted EBITDA margin grew from 6.2% to 13.4% in 2021.
Excluding the non-recurring effects, we would have reached throughout the entire year of 2021 a margin of 11.4%. In slide number 15, we see our net income for the fourth quarter of 2021 of BRL 94 million, compared to a loss of BRL 130 million in the fourth quarter of 2020. Throughout the entire year of 2021, we had a profit of BRL 537 million compared to the loss of BRL 492 million in 2020. We had a distribution of BRL 200.9 million in dividends for the year 2021. Of those, BRL 140.4 million in interest on net equity and BRL 60.6 million in dividends.
In slide 16, we see the investments of the company of BRL 232 million in the fourth quarter of 2021 compared to BRL 104 million in the fourth quarter of 2020. Investments committed to safety, health, maintenance, and launching of new products and improving ramp-up of the factories we mentioned previously. Throughout the entire year of 2021, we had investments of BRL 485 million, an increase of 31.3% when compared to the BRL 369 million of 2020. Reminding you that our investments in 2021, when compared to the EBITDA of the company, presented about 26%, considering that in 2018, 2019, our investments represented about 40% of the EBITDA of the company, which is a reduction relative to the cash flow generated by the EBITDA.
Now we can see in slide 17, we see the financial leverage of the company, where we see a net debt over adjusted EBITDA that was reduced in 2021 to 2.34 in the fourth quarter. The liquidity ratio in the short term is 0.73 in the fourth quarter of 2021. In slide 18, we see the composition of the gross debt of the company. That represents 42.2% in BRL, 40% in EUR, 12.6% in USD, and 5.2% in other currencies. We had a net debt of BRL 4.299 billion at the end of the fourth quarter of 2021.
When you look at the breakdown of our debt, we see that 36.4% of 2021 when compared to the fourth quarter of 2020, with an average term of 2.2 years in 2020 and 4.2 years in 2021. In slide 19, we see the focus the company has placed in our efforts in ESG. Some of the highlights of 2021, we had our first issuance of sustainability-linked bonds with ambitious target to reduce CO2 emissions in 2021. We also launched our global diversity and inclusion program and the entry into the B3 Sustainability Index in the ISE now in 2021. Our roadmap for carbon reduction shows our target for 2025 and carbon neutrality in 2040.
In slide 20, we have some recognitions and new projects in 2021. We received 22 awards throughout the year of 2021 from our customers with increased competitiveness. We had an investment of BRL 5.5 million in Autotech Ventures LLC, focused on developing sustainable urban mobility solutions. We had a completion of the construction of aluminum wheel plant in partnership with Dongfeng in China. We had a ramp-up of the new stamping plant in Mexico and also the ramp up of the new aluminum wheels plant in India with a growth of 87.5% in the production of wheels in 2021. We also had the entry in the portfolio of the dividend index IDIV in B3.
2021 was a very challenging year, but our team maintained great focus on agility and flexibility in terms of implementing solutions to adjust to the market conditions, and we had a positive year. Now we would like to open for questions and answers.
We'll now start the question and answer session. To ask a question, please type star one. To remove your question from the queue, please press star two. Our first question comes from Luiz Capistrano, Itaú BBA.
Good morning. Thank you for the answers, and congratulations on the results. We have two questions. The first is: what do you see in terms of revenues for 2020, in terms of mix of light and commercial vehicles from what you showed in terms of IHS and LMC?
What 2021 growth in heavy vehicles, and they seems to be gaining more representative. The second questions refers to the same data. I wanted to know if you already considers the data for January and February, since these were months representative in terms of volume. In the U.S. and Europe, the preliminary data already showed some weaknesses. If you could give us some more information about these two topics, we would thank you. We'd appreciate them.
Luiz, good morning. With regards to the mix of light and commercial vehicles, when we observe these forecasts for IHS and LMC, the trends for the beginning of the year 2022 show still a more rich mix in commercial vehicles in our products.
Of course, this mix will vary a lot depending on the availability of semiconductors, as we previously mentioned, and obviously of the impacts we might have as a result of the conflict between Russia and Ukraine. These variations may affect the composition of this mix between light and commercial vehicles, but the signs are that the commercial vehicles will continue to be more expressive in the revenues of the company for 2021. With regards to the IHS and LMC, these are projections in the month of February, still not considering the consolidated results of February in the various markets. We'll be publishing updates in the next few weeks, and we can observe the effects in the month of February and the impact of the conflict between Russia and Ukraine, which is very uncertain at the time.
It's almost important to make a forecast of what the representativity will be of this issue in the demand for vehicles, especially in the European market. I hope to be updating in that. When you look at February and when we look at our business all over the world and the mix of products, and we look at the revenue and the volume of all of the business in January and February, they have been very much aligned with the plan that we have for 2022. Despite these variations you've mentioned, which have been observed in many countries, when we compare to what we have planned for 2022, January and February have been very consistent with our expectations for the year. Let's see the unfolding of all events in March.
As of the predictability of the situation in Europe, we will have to wait to make new assumptions and review all of the projections that we have for the rest of the year. I can say that the beginning of the year or the year has started very much aligned with what we had predicted.
Nice. Thank you very much for the insights.
Our next question is from Victor Mizusaki, Bradesco BBI.
Hi, good morning. Thank you very much for the results. I have a few questions. First, we have seen an increase in the price of the aluminum, all very much related to the price of energy. My first question is: given the scenario, do you envision any change in regard to OEMs, and do you see any problem with the aluminum prices and-
The second question for 2022, if you could give some more detail for the forthcoming months. Thank you.
Victor, good morning. Yes. The price of aluminum, especially in view of the increasing price of energy, especially in Europe, they have increased prominently in the last few weeks, especially all related to the conflict between Ukraine and Russia. This adds the uncertainty layer in regard to all pricing. We believe it's a little early to understand that this will be a changing mix of aluminum and steel because these are very uncertain and floating elements. The aluminum has increased in price from February on and then dropped at the beginning of March. We can say that this instability in price of the aluminum needs is going to be taken into account by our clients.
It's very premature to run any review in the mix of aluminum and steel. We will keep on verifying and we'll keep on analyzing whether this is going to have an impact along the year.
In regard to your second question. Good morning, this is Elcio. I thank you very much for your question. In 2021 we had a total investment of BRL 475 million with 26% of EBITDA versus 2018 and 2019, with a difference of increase in 40%. This discipline of capital as a whole and CapEx, we look at it with a very important magnification because these are factors that are going to help us with leveraging. We have been working this leveraging and it's been working well for 2021 with a growth of our EBITDA despite our net debt.
We have managed to increase the debt with operational performance and with the gradual resuming of the CapEx. It's very important because it's the focus of company with the CapEx. I understand you have a very specific question. We are following everything and it's important that Marcos has mentioned we do not have a very much certain unfolding, especially because of the conflict that is happening in Europe. The percentages have been constant until now and we don't envision large variations. We are going to very little variation for 2021, for 2022. It's important to look at this leveraging, but at the same time we are working with new projects and new programs, things that we are carrying out with our clients and we do have some investments in greenfield.
This is a very substantial investment we are working with. Of course, there are some blockage here and there with commercial vehicles, but this is going to promote the maintenance and growth that we have been observing with the commercial vehicles.
Great. Thank you. Thank you.
Our next question is from Andressa Varotto, UBS BB.
Hi, good morning. Thank you very much for this opportunity. I have two questions only. The first one is in regard to margin because we see that if you compare this quarter with the three periods, you had a little drop despite the very good mix of commercial vehicles and light vehicles you have. I envision a pressure with manufacturing and raw material. I'd like to hear more details in regard to the new programs that you have with other clients as well. Thank you.
Andressa, this is Elcio.
Let me start replying to your first question. Thank you very much for this. Q4 seasonally is the quarter with the lower volume in the industry because everyone has breaks for the end of the year. We do decrease in volume. We have a little loss of leverage operationally speaking. It is expected that we have a retraction of margins. This is seasonal for Q4 and we do have a continuous pressure that has been happening since the beginning of 2021 with increase in commodity prices as a whole with metals and inflation. This is a year in which we saw an increase in raw material pricing. We had a procedure of passing on costs to clients along 2021 reflecting market prices.
In one month or another, we may see some delays, and we have mentioned that some of the contracts do have these dynamics. When we observe the margins for the whole year, not only for 4Q, but when we look at the year as a whole, up until last year, we mentioned that the main object of the company would be to return to the great margins we had in the past, especially for 2019 numbers. Of course, excluding the non-recurring events. What we have been following what we had pursued, and you see that these margins reflect the objectives that they had. Of course, we do have problems with overall prices globally, but we have been very consistent along the year, except for Q4, but all four trimesters. We have a new table of prices.
We have passed on costs to clients, and this has been occurring very naturally. Of course, there is a pressure that is coming from inflation, and especially in 2022, we do have negotiation with clients for more productivity and to work with our operational efficiency.
Andressa, this is Marcos. In regard to your second question, in terms of mix of products and companies, we have a combination that is very extensive with several variations. I would first of all divide it into product and program costs and derivation from other investments on aluminum steel. We have aluminum wheels in India, which have generated new products, some of them with new clients and some of them with existing clients in India, and I think this is the first factor.
The second factor would be the growth in our capacity of stamped products, which have brought a new set of part numbers for stamped products in Mexico within the product mix. The first part, of course, is the first part that shows the benefits of our investments in capacity, in providing products to new countries and new clients. The second part would be coming from new products in partnership with clients. Some traditional clients and some new clients in the segments of electric vehicles. Not only with wheels, but also with structural components. Although we have growing numbers in both segments, we have been gaining new programs to fulfill the demands of clients, traditional clients and new clients, specifically with electric vehicles, especially in Europe and North America.
These are very positive factors that are now bringing more business and more revenue to us. The third element that we see is our growth in the segment of replacement parts. We see, according to the numbers that we have, we have some growth with some of our clients. One of the clients is public with sales to Techmaster is one client in the USA. In the replacement part segment, they have brought some new business to us. This is a composition that is a result from our new investment in capacity, investment in technology and products, especially to meet the demand of the new tendencies of mobility globally and in the search and penetration of new segments. Due to new priorities and new situations and all, we haven't focused in those in the past, but now we are.
I believe this responds to your questioning.
Okay, great. Thank you very much.
Our next question comes from Renata Cabral, Citi.
Hi, everyone. Good morning. Congratulations on your results. I only have one question. I would like to know how you see the evolution of demand, especially here in South America and in Brazil. You had very good performance in this region, in this trimester, especially with the heavy vehicles. In 2022, we have a dynamic of a potential demand growing demand, especially with the problems you had with semiconductors. But at the same time, we do have interest rate that is increasing. I'd like to know what you see about the demands in Brazil.
Renata, good morning. Obviously, the macroeconomic variables always impact the demand in the several areas of the market. We have seen that obviously in Brazil with increase of interest and everything that happened throughout the year 2021 as a result of the increase in raw materials that have finally been passed on to the consumer, and these have important effects. What we have been observing is that traditionally, the two first months of the year as a result of expenses for the consumers, other taxes and other priorities, the industry operates more slowly, I'd say.
It gains traction throughout the year, and this is what we'll be observing to understand what's the real impact of interest rates and financing of vehicles and the actual impact on demand and supply of vehicles, what we call direct sales, be it for leasing companies or direct clients, and how this is going to affect in the mix. We are observing this, but considering that we come still from a year where demand was not fully met by because of the semiconductor crisis. You go to a vehicle seller today, they have several vehicles, but there are several models where you still have a waiting period for the delivery of this other car model.
With a combination of the demand that was not met in 2021 and better availability of semiconductors in 2022, we expect an effect that will balance, at least in part, the macroeconomic effects of the interest rates, lack of employment and all that. We'll keep observing this closely. There is a greater impact on light vehicles. In the case of commercial vehicles, the dynamics is a bit different. The factories are trying to produce as fast as possible during the months of January, February and March because they have several orders that have to be met throughout the year of 2022, and they are trying to produce them the faster they can, as much as the raw materials allow to meet this demand that already exists in their pipeline.
This has been shown in the sale of vehicles in the first two months. Despite the drop in the sale of light vehicles, in terms of trucks and commercial vehicles, it has really increased and is still limited due to stocks in the companies and restrictions they are still subject to due to the lack of some raw materials. The next month should give us a better view of what the year 2021 will be like, especially in Brazil, in terms of demand for both, for light vehicles and of course, the impact that might come from external factors in terms of the semiconductor supply will now have to be factored in in terms of production. January and February, light vehicles was not positive in Brazil. That's clear.
It could have been better if we had products. We expect that March and April will give us a better view of the forecast and the trends in terms of demand and consequently production, both for light and commercial vehicles for the entire year of 2022. An important comment we should make. Reminding you that the production is also a result of local demand and exports. Exports of vehicles in the first quarter has grown both for light vehicles and commercial vehicles, which is something very positive, and also can help balance and neutralize in terms of production, some limitations in terms of demands in internal market.
Perfect. Marcos, thank you for your answer.
Our next question comes from Marcelo Motta, JP Morgan.
Good morning. It's a quick question. If you could comment a little bit on the supply chain on your side. We have that semiconductor crisis that impacts, but regarding delivery of material, that has been problematic in several areas around the world. Do you notice any lead time, especially when you think of Europe? And we notice that you have some changes there. I would like you to comment on that. In the beginning of March, we have kind of slowed down a little bit, so if you could comment on that. Thank you.
Marcelo, good morning. From a point of view of supply of our main raw materials, we have not seen any limitation in terms of production capacity due to steel, aluminum and other materials in South America and Europe, North America.
Already in the second week of March, we have not seen any impact of that. Of course, we are obviously monitoring constantly the supply chain all around the globe, not only from a perspective of production of materials, but delivery and shipping problems we might have. So far, we have not seen any direct impact on our operations. Our greatest concern regards our clients, the factories, especially with regard to semiconductors and eventually regarding other inputs, not as necessarily raw materials, but other inputs that might limit or affect their production. We are all monitoring the situation in Russia, in Ukraine. Ukraine is a producer of electric components and factories in Europe. Some of them have been looking for production alternatives due to the concerns regarding supply, for example, of these components and eventually other components.
Again, these are secondary effects that we have directly daily been monitoring with all our clients globally due to the production schedule they might have. On our side, so far, we have been operating normally from a perspective of supply. Of course, any variations in costs and price up or down, depending on the market and the input, are monitored continuously, and our team works closely with our suppliers to adjust our planning based on that. Despite this not having caused any impact for us, I think the supply chain, in fact, may experience some tension in terms of supply. With regards to raw materials, we usually have multiple sources that allow us at a moment of problems in supply from specific regions or countries. We seek supply from other sources that cater to our needs.
I think the scenario from our perspective is normal so far, and we'll keep on monitoring this.
Perfect. Thank you.
We are now concluding the Q&A session. I would like to invite Mr. Oliveira to proceed with his closing statements. Please go ahead.
Thank you everyone for your participation. As I mentioned, the year 2021 was a challenging year for the automotive industry. At the same time, the demand we observed during the entire year was positive and allowed us, thanks to production operational improvements we implemented during 2020 and the beginning of 2021, allowed us to achieve good results for the year 2021. Our investments have been very focused on things that generate quick value for the company, and we have maintained this as a priority.
We have maintained the focus in our balance in reducing our financial leverage without missing any opportunities that come up in segments, markets or regions that allow us to grow in the long term. Of course, we're not talking about short-term business opportunities, but we have focused on the long-term growth. This adjustment of cost is done very thoughtfully. We prioritize what we have new in added markets, but always considering the strengthening of our balance throughout the year 2022 and 2023. Thank you all very much. Have a very good day and end of the first trimester, first quarter.
The Iochpe-Maxion conference call is concluded. We thank you all very much for your participation. Have a very good day, and thank you for using Chorus.