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Iochpe-Maxion - 3Q08 Presentation
 

Iochpe-Maxion - 3Q08 Presentation

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3rd Quarter 2008 Presentation

3rd Quarter 2008 Presentation

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    Iochpe-Maxion - 3Q08 Presentation Iochpe-Maxion - 3Q08 Presentation Presentation Transcript

    • EARNINGS RELEASE – 3Q08 EARNINGS RELEASE – 3Q08 October, 2008
    • 3Q08 October, 2008 DISCLAIMER The material contained in this presentation is general background information about Iochpe-Maxion S.A. (Iochpe) as of the date of the presentation. It is information in summary form and does not purport to be complete. It is not intended to be relied upon as advice to potential investors. No representation or warranty, express or implied, is made concerning, and no reliance should be placed on, the accuracy, fairness, or completeness of the information presented herein. This presentation contains statements that are forward-looking within the meaning of Section 27A of the U.S. Securities Act of 1933 and Section 21E of the U.S. Securities Exchange Act of 1934. Such forward-looking statements are only predictions and are not guarantees of future performance. Investors are cautioned that any such forward-looking statements are and will be, as the case may be, subject to many risks, uncertainties and factors relating to the operations and business environments of Iochpe and its subsidiaries that may cause the actual results of the companies to be materially different from any future results expressed or implied in such forward-looking statements. Although Iochpe believes that the expectations and assumptions reflected in the forward-looking statements are reasonably based on information currently available to Iochpe management, Iochpe cannot guarantee future results or events. Iochpe expressly disclaims a duty to update any of the forward-looking statement. This presentation does not constitute an offer, or invitation, or solicitation of an offer, to subscribe for or purchase any securities. Neither this presentation nor anything contained herein shall form the basis of any contract or commitment whatsoever. 2
    • 3Q08 October, 2008 SIMPLIFIED CORPORATE STRUCTURE Iochpe-Maxion S.A. Iochpe- 50% 100% 100% R$ 130.3 million1 (25%) R$ 357.4 million1 (68%) R$ 35.3 milhões1 (7%) Amsted-Maxion Fundição e Amsted- Automotive Components Wheels and Chassis Division Equipamentos Ferroviários S.A. Division Wheels: R$ 152.4 million1 (29%) Railway Freight Cars: R$ 87.6 million1 (17%) Hand Brake Leaver and Pedal Sets: R$ 12.8 million1 (2%) Structural Stamped Parts: R$ 6.3 million1 (1%) Castings: R$ 33.7 million1 (6%) Chassis: R$ 205.0 million1 (39%) Wheels: R$ 9.0 million1 (2%) 1Consolidated net operating revenue in the third quarter of 2008 3
    • 3Q08 October, 2008 HIGHLIGHTS – 3Q08 Consolidated net operating revenue of R$ 523.0 million, an increase of 47.0% over the same period of last year EBITDA(*) of R$ 92.2 million, an increase of 60.4% when compared to the same period of last year Net income of R$ 130.9 million, an increase of 277.9% over the same period of last year Not considering the non-recurring gain of R$ 76 million, net income would be R$ 54.9 million, an increase of 82,4% over the same period of last year Net bank debt of R$ 230.6 million (R$ 173.6 million on Sep/07), or 0,9x EBITDA(*) LTM (1.1x on Sep/07). (*) EBITDA, throughout this presentation means: net income plus income tax and social contribution, plus non-operating result, plus net financial expenses, plus depreciation and amortization, plus goodwill amortization. 4
    • 3Q08 October, 2008 3Q08 – MAIN DRIVERS Growth of the Brazilian production of vehicles and agricultural machinery Recovery of domestic demand for railway freight cars Impact of the real appreciation (1.7051 – 3Q08 x 1.8928 – 3Q07) on net revenue of exports (reduction of R$ 6.7 million) Participation of exports: US$ 39.1 million on 3Q08 x US$ 30.8 million on 3Q07 (13% of net revenue on 3Q08 x 16% no 3Q07) Non-recurring gain of R$ 76 million, related to the merger of Maxion Sistemas Automotivos into Iochpe-Maxion on July, 2008 5
    • Industry Performance
    • 3Q08 October, 2008 LIGHT COMMERCIALS – BRAZIL (‘000 units) Production Export 408 156 153 379 366 144 355 318 296 114 109 98 216 72 130 112 41 34 2003 2004 2005 2006 2007 9M07 9M08 3Q07 3Q08 2003 2004 2005 2006 2007 9M07 9M08 3Q07 3Q08 3Q08 – 07 = 15.7% 3Q08 – 07 = (17.0%) 9M08 – 07 = (10.6%) 9M08 – 07 = 19.9% CAGR 2003 – 07 = 18.9% CAGR 2003 – 07 = 17.2% Source: Anfavea 7
    • 3Q08 October, 2008 TRUCKS – BRAZIL (‘000 units) Production Export 41 137 38 39 128 117 107 106 30 30 100 25 79 49 13 38 11 11 2003 2004 2005 2006 2007 9M07 9M08 3Q07 3Q08 2003 2004 2005 2006 2007 9M07 9M08 3Q07 3Q08 3Q08 – 07 = 28.3% 3Q08 – 07 = 3.2% 9M08 – 07 = 1.1% 9M08 – 07 = 27.8% CAGR 2003 – 07 = 33.3% CAGR 2003 – 07 = 14.8% Source: Anfavea 8
    • 3Q08 October, 2008 BUSES – BRAZIL (‘000 units) Production Export 19 39 35 36 16 34 15 30 13 29 27 12 11 9 12 11 4 4 2003 2004 2005 2006 2007 9M07 9M08 3Q07 3Q08 2003 2004 2005 2006 2007 9M07 9M08 3Q07 3Q08 3Q08 – 07 = 15.9% 3Q08 – 07 = 1.9% 9M08 – 07 = 8.8% 9M08 – 07 = 18.7% CAGR 2003 – 07 = 13.6% CAGR 2003 – 07 = 9.6% Source: Anfavea 9
    • 3Q08 October, 2008 AGRICULTURAL MACHINERY – BRAZIL (‘000 units) Production Export 31 31 69 65 63 27 59 53 23 22 48 21 46 20 24 19 8 8 2003 2004 2005 2006 2007 9M07 9M08 3Q07 3Q08 2003 2004 2005 2006 2007 9M07 9M08 3Q07 3Q08 3Q08 – 07 = 23.5% 3Q08 – 07 = 2.2% 9M08 – 07 = 16.8% 9M08 – 07 = 32.7% CAGR 2003 – 07 = 6.5% CAGR 2003 – 07 = 2.5% Source: Anfavea 10
    • 3Q08 October, 2008 PASSENGER CARS – BRAZIL (‘000 units) Production Export 684 2,389 635 586 2,092 2,101 2,009 497 1,757 1,756 440 445 427 1,505 737 637 160 136 2003 2004 2005 2006 2007 9M07 9M08 3Q07 3Q08 2003 2004 2005 2006 2007 9M07 9M08 3Q07 3Q08 3Q08 – 07 = 15.7% 3Q08 – 07 = (15.2%) 9M08 – 07 = (3.9%) 9M08 – 07 = 19.7% CAGR 2003 – 07 = 7.4% CAGR 2003 – 07 = 12.2% Source: Anfavea 11
    • 3Q08 October, 2008 RAILWAY FREIGHT CARS – BRAZIL (units) 7,270 Sales 3Q08 – 07 = 325.3% 5,642 9M08 – 07 = 544.8% CAGR 2003 – 07 = (15.6%) 3,668 3,669 2,459 1,249 1,195 569 281 2003 2004 2005 2006 2007 9M07 9M08 3Q07 3Q08 Sales Source: Amsted Maxion estimate 12
    • 3Q08 October, 2008 MARKET SHARE – BRAZIL (9M08) Commercial Vehicles Railway Freight Railway Chassis Wheels Cars Castings Maxion Maxion Maxion Maxion 97% 80% 65% 63% Dana 20% Borlem 32% Others Others Others Cruzaço 15% 5% 3% 20% Maxion: 67% on 9M07 Maxion: 62% on 9M07 Maxion: 79% on 9M07 Maxion: 80% on 9M07 Source: Maxion estimate 13
    • Financial and Operating Performance
    • 3Q08 October, 2008 NET OPERATING REVENUE (R$ million) 1,494 Net Operating Revenue 1,366 1,289 3Q08 – 07 = 47.0% 1,248 9M08 – 07 = 42.1% 1,099 CAGR 2003 – 07 = 17.5% 961 676 523 356 2003 2004 2005 2006 2007 9M07 9M08 3Q07 3Q08 15
    • 3Q08 October, 2008 NET OPERATING REVENUE (R$ million) Revenue by Market Revenue by Division / Business 523 523 130 356 35 67 74 356 31 206 58 456 147 298 152 104 3Q07 3Q08 3Q07 3Q08 Domestic Export Wheels Chassis Automotive Comp. Amsted Maxion Domestic: 3Q08 – 07 = 53.2% Wheels: 3Q08 – 07 = 44.8% Chassis: 3Q08 – 07 = 39.5% Export: 3Q08 – 07 = 15.4% Automotive Comp.: 3Q08 – 07 = 14.0% Amsted Maxion: 3Q08 – 07 = 76.7% 16
    • 3Q08 October, 2008 NET OPERATING REVENUE Revenue by Customer – 3Q07 Revenue by Customer – 3Q08 Caterpillar Caterpillar 2% 2% VW ALL VW Daim ler ALL Daim ler 14% 2% 14% 12% 1% 10% Volvo 2% Volvo Vale 2% 2% Agricultural Export Machinery 14% 6% Vale 14% Scania Export 4% 22% Fiat After Market 3% 3% Agricultural Ford Machinery 4% Others 9% 6% Scania GMB Fiat 4% 4% Ford 3% MRS MRS GMB 4% After Market 10% 10% 5% 2% Others 10% 17
    • 3Q08 October, 2008 EXPORTS (USD million) 119 120 Exports 3Q08 – 07 = 27.1% 102 96 94 9M08 – 07 = 7.9% CAGR 2003 – 07 = 38.1% 47 39 33 31 2003 2004 2005 2006 2007 9M07 9M08 3Q07 3Q08 18
    • 3Q08 October, 2008 EXPORTS BY DIVISION / BUSINESS R$ thousand US$ thousand 67 58 39 29 31 17 34 1 14 18 0 0 9 8 0 4 23 13 16 9 3Q07 3Q08 3Q07 3Q08 Wheels Chassis Automotive Comp. Amsted Maxion Wheels Chassis Automotive Comp. Amsted Maxion Variation 3Q8 - 07 = 15.4% Variation 3Q8 - 07 = 27.1% Wheels = 30.0% Wheels = 44.0% Chassis = 84.2% Chassis = 106.3% Automotive Comp. = 86.7% Automotive Comp. = 105.8% Amsted Maxion: = (13.3%) Amsted Maxion: = (5.1%) 19
    • 3Q08 October, 2008 GROSS PROFIT (R$ million) Gross Profit 3Q08 – 07 = 57.5% 9M08 – 07 = 53.9% CAGR 2003 – 07 = 14.6% 21% 21% 22% 20% 20% 19% 18% 19% 18% 289 283 228 236 219 184 137 114 72 2003 2004 2005 2006 2007 9M07 9M08 3Q07 3Q08 Gross Profit % NOR 20
    • 3Q08 October, 2008 OPERATING INCOME – EBIT (R$ million) Operating Income 3Q08 – 07 = 68.6% 9M08 – 07 = 86.2% CAGR 2003 – 07 = 23.5% 200 178 136 127 135 107 16% 15% 14% 12% 12% 11% 11% 10% 83 9% 49 58 2003 2004 2005 2006 2007 9M07 9M08 3Q07 3Q08 EBIT % NOR 21
    • 3Q08 October, 2008 EBITDA* (R$ million) EBITDA 3Q08 – 07 = 60.4% 9M08 – 07 = 72.9% CAGR 2003 – 07 = 16.7% 225 205 156 163 165 17% 18% 130 16% 14% 14% 14% 13% 13% 13% 89 92 57 2003 2004 2005 2006 2007 9M07 9M08 3Q07 3Q08 EBITDA % NOR (*) EBITDA, throughout this presentation means: net income plus income tax and social contribution, plus non-operating result, plus net financial expenses, plus depreciation and amortization, plus goodwill amortization. 22
    • 3Q08 October, 2008 NET FINANCIAL EXPENSES (R$ million) Net Financial Expenses 3Q08 – 07 = 517.6% 9M08 – 07 = (51.8%) CAGR 2003 – 07 = (28.4)% 6% 3% 2% 2% 2% 38 1% 1% 1% 37 0% 33 21 13 10 10 5 2 2003 2004 2005 2006 2007 9M07 9M08 3Q07 3Q08 Financial Exp. % NOR 23
    • 3Q08 October, 2008 IMPACT OF THE FX RATE VARIATION Impact of the FX rate variation on Finacial Expense (Revenue) 3Q08 Value FX Rate Var. Balance US$ Million R$ million NDF (expired) 35.8 1.5 ACC 14.6 (4.7) Loans 30.2 (9.1) Financial Exp./ Rev. (12.3) Impact of the FX rate variation on Temporary Equity Reserve 3Q08 Balance Balance Variation R$ MM Foreign Investments 6.6 7.4 NDF (to expire) (8.5) (16.4) Total Effect on Equity (1.9) (8.9) 24
    • 3Q08 October, 2008 NET INCOME (R$ million) Net Income 3Q08 – 07 = 335.7% Non-recurring gain generated by 209 25% 9M08 – 07 = 277.9% the merger of Maxion Sistemas Automotivos into Iochpe-Maxion CAGR 2003 – 07 * = 196.2% 76 15% 131 Non-recurring gain generated by 76 the merger of Maxion Sistemas Automotivos into Iochpe-Maxion 6% 6% 133 9% 5% 5% 5% 72 72 51 58 55 55 -1% 30 Net Income w/ Non- -5 recurring Effect 2003 2004 2005 2006 2007 9M07 9M08 3Q07 3Q08 3Q08 – 07 = 82.4% 9M08 – 07 = 140.5% Net Income % NOR * Consider the absolute variation in the period 25
    • 3Q08 October, 2008 NET BANK DEBT (R$ million) 1.3 1.1 0.9 0.8 0.8 174 231 0.6 0.6 132 128 115 125 102 2003 2004 2005 2006 2007 9M07 9M08 Net Debt x EBITDA* (*) EBITDA, throughout this presentation means: net income plus income tax and social contribution, plus non-operating result, plus net financial expenses, plus depreciation and amortization, plus goodwill amortization EBITDA LTM 26
    • 3Q08 October, 2008 INDEBTEDNESS – SEP/08 (R$ million) Debt by Lines 68 121 BNDES-EXIM 299 61% 231 Import 16% 178 ACC 9% - - Working Capital Short Term Long Term Total Debt Cash Net Debt 6% Others 8% Debt Indexation TJLP 62% Indexation Average Cost Indexed in R$ 79% CDI Dollar Indexed in US$ 5,5% per year 27% CDI YUAN 5% 6% 27
    • 3Q08 October, 2008 OPERATIONS RELATED TO FIXING THE FUTURE VALUE OF THE DOLLAR (NDFs) At the end of Sep/08, the company had contracted US$ 82.1 million in operations related to selling future dollar at R$ 1.8701 per USD FX rate, for the period of Oct/08 to Sep/09 At the end of Sep/08, the company had contracted US$ 5.2 million in operations related to buying future dollar at R$ 1.6630 per USD FX rate, for the period of Oct/08 to Jan/09 If the operations would expire on 09/30/2008, it would represented a negative result of R$ 8.5 million, which was accounted as a negative temporary equity reserve Contracted Value Average FX Gain/Loss* Period Operations US$ Rate R$ thousand NDFs (Buying) 82,100 1.8701 (9,817) At the end NDFs (Selling) 5,212 1.6630 1,335 of 3Q08 Total NDFs (8,482) * Amount accounted as a negative temporary equity reserve 28
    • 3Q08 October, 2008 CAPEX (R$ million) 84 73 68 67 68 54 47 20 20 2003 2004 2005 2006 2007 9M07 9M08 3Q07 3Q08 29
    • Capital Market
    • 3Q08 October, 2008 SHARES PERFORMANCE - LTM 20.00% 10.00% 0.00% Nov-07 Dec-07 Jan-08 Feb-08 Mar-08 Apr-08 May-08 Jun-08 Jul-08 Aug-08 Sep-08 Oct-08 -10.00% -20.00% -30.00% -40.00% -39.47% -39.62% -50.00% -60.00% -58.18% MYPK3 IBOV IBX-100 Oct/08 – closing price of the 20th (R$ 14.95) Due to the low liquidity of MYPK3 before the conversion of the shares, was considered the price of MYPK4 before the conversion (02/26/08) 31
    • 3Q08 October, 2008 AVERAGE DAILY TRADE VOLUME – R$ thousand Average Daily Trade Volume LTM - R$ thousand 86 81 74 75 77 56 55 43 43 37 37 3,370 2,952 2,978 2,598 38 2,294 1,747 1,987 1,671 1,793 1,413 1,377 1,164 Nov-07 Dec-07 Jan-08 Feb-08 Mar-08 Apr-08 May-08 Jun-08 Jul-08 Aug-08 Sep-08 Oct-08 Volume Trades Oct/08 – volume and trades until the 20th Due to the low liquidity of MYPK3 before the conversion of the shares, was considered the volume and trade of MYPK4 before the conversion (02/26/08) 32
    • 3Q08 October, 2008 OUTLOOK Extension of the impacts of the financial crisis still to be seen 33
    • 3Q08 October, 2008 RESTRUCTURING An Extraordinary Shareholders Meeting held on July 1, 2008, approved the merger of the subsidiary Maxion Sistemas Automotivos into Iochpe-Maxion, based on its book value This restructuring aimed to simplify the company’s operational and corporate structure, by concentrating all its main Brazilian operations, except for the subsidiary Amsted Maxion Equipamentos Ferroviarios S.A., in a single company 34
    • Additional Information
    • 3Q08 October, 2008 INCOME STATEMENT (R$ thousand) Consolidated Income Statement R$ 3Q08 N.O.R 3Q07 N.O.R 9M08 N.O.R 9M07 N.O.R thousand Net Operating Revenue 522,983 100.0% 355,705 100.0% 1,365,713 100.0% 960,822 100.0% Cost of Goods Sold Raw Material (261,560) 50.0% (164,250) 46.2% (664,569) 48.7% (445,223) 46.3% Labor / Others (147,529) 28.2% (119,154) 33.5% (417,744) 30.6% (331,489) 34.5% (409,089) 78.2% (283,404) 79.7% (1,082,313) 79.2% (776,711) 80.8% Gross Profit 113,894 21.8% 72,301 20.3% 283,400 20.8% 184,111 19.2% Operating Expenses General and Administrative (14,178) 2.7% (11,678) 3.3% (38,080) 2.8% (34,934) 3.6% Commercial (19,666) 3.8% (13,815) 3.9% (50,077) 3.7% (42,914) 4.5% Others 3,380 0.6% 2,676 0.8% 4,759 0.3% 1,139 0.1% (30,464) 5.8% (22,817) 6.4% (83,398) 6.1% (76,709) 8.0% Operating Income (EBIT) 83,430 16.0% 49,484 13.9% 200,002 14.6% 107,402 11.2% Financial Results Financial Revenue (25) 0.0% 5,272 1.5% 31,412 2.3% 17,286 1.8% Financial Expenses (12,724) 2.4% (7,336) 2.1% (36,392) 2.7% (27,611) 2.9% (12,749) 2.4% (2,064) 0.6% (4,983) 0.4% (10,325) 1.1% Earnings After Financial Income 70,681 13.5% 47,420 13.3% 195,019 14.3% 97,077 10.1% Non Operating Results (1,199) 0.2% (830) 0.2% (3,229) 0.2% (7,703) 0.8% Earnings Before Taxes 69,482 13.3% 46,590 13.1% 191,790 14.0% 89,374 9.3% Income Taxes 61,501 11.8% (16,530) -4.6% 17,416 1.3% (34,013) -3.5% Net Income 130,983 25.0% 30,060 8.5% 209,206 15.3% 55,361 5.8% EBITDA 92,157 17.6% 57,455 16.2% 225,266 16.5% 130,262 13.6% (*) EBITDA, throughout this presentation means: net income plus income tax and social contribution, plus non-operating result, plus net financial expenses, plus depreciation and amortization, plus goodwill amortization. 36
    • 3Q08 October, 2008 BALANCE SHEET (R$ thousand) ASSETS LIABILITIES Sep-08 Sep-07 Sep-08 Sep-07 CURRENT CURRENT Cash 28,177 25,821 Loans 177,715 100,528 Financial Investments 40,076 19,842 Payables 101,750 75,160 Receivables 291,554 176,473 Customers Advance 12,061 11,323 Inventory 237,566 162,080 Taxes 15,020 8,757 Wage, Charges and Supliers Advanced 5,481 9,271 60,542 45,301 others Recoverable Taxes 13,548 22,937 Others Provision 14,952 6,823 Deferred Taxes 23,376 - Others 20,145 14,713 Others 1,140 5,818 402,185 262,605 640,918 422,242 LONG TERM LONG TERM Receivable 609 1,524 Loans 121,171 118,786 Obligatory deposits and 12,695 9,186 judicial Provisions 55,854 56,814 Recoverable Taxes 11,010 7,761 Others 6,481 9,243 Deferred Taxes 76,100 34,785 183,506 184,843 Others 1,718 (5,510) 102,132 47,746 MINORITY - - PERMANENT EQUITY Investments 441 125 Capital 261,463 161,463 Plants, Property and Temporaty Equity 350,533 296,952 (1,891) - Equipment Reserve Intangible 4,894 - Capital Reserves 49,078 103,472 Deferred Items 4,629 679 Retained Earnings 209,206 55,361 360,497 297,756 517,856 320,296 37 TOTAL ASSETS 1,103,547 767,744 TOTAL LIABILITIES 1,103,547 767,744
    • 3Q08 October, 2008 SHAREHOLDERS STRUCTURE Shareholders Structure on 9/30/2008 Shareholders Shares % Ioschpe Family 13,534,057 28.53% BNDESPAR 11,593,401 24.44% Controlling Shareholders 25,127,458 52.98% Others 22,304,228 47.02% Total Iochpe-Maxion 47,431,686 100.00% 38
    • EARNINGS RELEASE – 3Q08 EARNINGS RELEASE – 3Q08 October, 2008