Deutsche Bank
GEM Conference
September, 2005




                  DB GEM Conference
2

                      DISCLAIMER: FORWARD-LOOKING STATEMENTS


This presentation contains forward-looking statements. S...
3

                    IOCHPE – MAXION: BASICS


• Plants located in São Paulo and Minas Gerais States




               ...
4

                           SHAREHOLDER COMPOSITION: JUN-05

                Shareholder Agreement


      Iochpe Family...
5

           CORPORATE STRUCTURE: JUN-05


                     Iochpe-Maxion S.A.
                       (14 Employees)
...
6

                               CONSOLIDATED NET SALES BREAKDOWN (%)

             1H05 – R$ 750 MM                     ...
7

                      WHEELS AND CHASSIS DIVISION (*)




    (*) Division of
                                         ...
8

                      WHEELS AND CHASSIS DIVISION : BASICS


• Conformation of flat steel
• Focused on the commercial v...
9

                           WHEELS AND CHASSIS DIVISION

                   Chassis - 55% of the Division’s Net Sales

 ...
10

                  WHEELS AND CHASSIS DIVISION

     Wheels for Vehicles - 45% of the Division’s Net Sales




        ...
11

                  BRAZILIAN AUTOMOTIVE INDUSTRY (THOUSAND UNITS)


                                    Output         ...
12

                                    BRAZILIAN FLEET – 2004


                     Fleet Size                          ...
13

                          WHEELS AND CHASSIS DIVISION (R$ MM)

1000
                 Net Sales
                       ...
14

                        WHEELS AND CHASSIS DIVISION

                              Chassis – 1H05

          Market Sh...
15

                      WHEELS AND CHASSIS DIVISION

                           Wheels – 1H05

      Market Share (%)   ...
16

                              WHEELS AND CHASSIS DIVISION


                Chassis – New Contracts : R$ 73 MM per yea...
17

                          WHEELS AND CHASSIS DIVISION

         Wheels – New Contracts: R$ 29.8 MM per year
          ...
18

     AMSTED MAXION




                     36%




                     DB GEM Conference
19

                             AMSTED MAXION : BASICS


• Integrated freight car operation: castings and car assembly
• ...
20

               AMSTED MAXION : MAIN PRODUCTS



     RAILWAY            RAILWAY
                                      ...
21

                        BRAZILIAN RAIL EQUIPMENT MARKET – SALES



                                2Q05   2Q04    ∆%  ...
22

                  BRAZILIAN RAILWAY TRANSPORTATION
     500
                                 Million of tons

     400...
23

                        BRAZILIAN RAILWAY TRANSPORTATION


             Goods - 2004                            Compan...
24

                           BRAZILIAN RAILWAY TRANSPORTATION


     Cargo Transportation Matrix              % Railway ...
25

                           BRAZILIAN FREIGHT RAILCARS FLEET (units)


                                  Jun/05    Jun/...
26

                               AMSTED MAXION – 1H05


            Market Share (%)                      Customer Base ...
27

                                       AMSTED MAXION (R$ MM)

 1200
                      Net Sales (*)
 1000         ...
28

                                               AMSTED MAXION


                Spot Orders 2005/2006 – Railcars – R$ 1...
29

                                              AMSTED MAXION


                      Recurring Orders : R$ 242.6 MM per...
Consolidated
Second Quarter 2005




                      DB GEM Conference
31

                                                                EXPORTS (%)

   Exports – US$ 46.1MM / R$ 126.2 MM – 1...
32
                                                                   R$ MM


                              NET SALES – CO...
33

                                                                         GROSS PROFIT

              R$ MM            ...
34

                                                                                EBIT

          R$ MM                 ...
35

                            FINANCIAL EXPENSES, NET

     R$ MM                                                       ...
36

                               OPERATIONAL RESULT AFTER FINANCIAL EXPENSES

         R$ MM                            ...
37

                                                                                 EBITDA

         R$ MM               ...
38

                                          NET BANK DEBT

 R$ MM                                                       ...
39

                                     INCOME STATEMENT - CONSOLIDATED (R$ Mil)

                                       ...
40

                                         IOCHPE-MAXION: STOCK PERFORMANCE
     R$ MM
                                 ...
41

          IOCHPE – MAXION: GOVERNANCE AND CAPITAL MARKETS

–   Public company since 1984 / ADR Level I since 1994
–   ...
Additional Information
    Second Quarter 2005




                          DB GEM Conference
43

                 AUTOMOTIVE COMPONENTS DIVISION (*)




     (*) Division of




                                     ...
44

                     AUTOMOTIVE COMPONENTS DIVISION: BASICS


•   Light stamping
•   Assembly of parts
•   Focused on ...
45

           AUTOMOTIVE COMPONENTS DIVISION: MAIN PRODUCTS


     HANDBRAKE                PEDAL
                       ...
46

                 AUTOMOTIVE INDUSTRY (THOUSAND UNITS)


                              Output                  Exports
...
47

                      AUTOMOTIVE COMPONENTS DIVISION (R$ MM)


     200            Net Sales
                         ...
48

                        AUTOMOTIVE COMPONENTS DIVISION


         Market Share (%)                          Customer B...
49

                    AUTOMOTIVE COMPONENTS DIVISION


                    New Contracts: R$ 9.2 MM per year

Model - Cu...
Benchmark
 2º Tri 2005




               DB GEM Conference
51

                            BENCHMARK – GROSS PROFIT (% NET SALES)

                                                  ...
52

                                     BENCHMARK – EBIT ( % NET SALES )

                                               ...
53

                                 BENCHMARK – EBITDA ( % NET SALES )

                                                 ...
Bank Debt
Second Quarter 2005




                      DB GEM Conference
55

       NET DEBT BREAKDOWN – CONSOLIDATED – JUN05 (R$ MM)


                                          SHORT   LONG
    ...
56

               DEBT INDEXATION – CONSOLIDATED – JUN05 (%)


                                          CDI
            ...
57

            FOREIGN CURRENCY EXPOSURE – JUN05 (US$ MM)


     Balance Sheet

     Assets denominated in foreign curren...
Balance Sheet
Second Quarter 2005




                      DB GEM Conference
59

                                     INCOME STATEMENT – CONSOLIDATED (R$ MM)

                                        ...
60

                            BALANCE SHEET – CONSOLIDATED (R$ THOUSAND)

     ASSET                             Jun/05 ...
Historical Market Data




                     DB GEM Conference
62

                   Automotive Industry – Brazilian Output
     2000
                                                  ...
63

                       Automotive Industry – Brazilian Output
     400
     350                                       ...
64

                  Automotive Industry – Brazilian Output
     160
     140                                           T...
65

                 Automotive Industry – Brazilian Output
     80
                                              Agricult...
66
                                                                     Units


                    Brazilian Railway Equi...
67
                                                                               Units


                           Brazi...
68
                                                                               Tons



                         Brazili...
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Iochpe-Maxion - Deutsche Bank GEMS Conference Presentation

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Iochpe-Maxion - Deutsche Bank GEMS Conference Presentation

  1. 1. Deutsche Bank GEM Conference September, 2005 DB GEM Conference
  2. 2. 2 DISCLAIMER: FORWARD-LOOKING STATEMENTS This presentation contains forward-looking statements. Such statements are not statements of historical facts, and reflect the beliefs and expectations of Iochpe-Maxion’s management. The word “anticipates”, “expects”, “estimates”, “intends”, “forecasts”, “plans”, “predicts”, “projects”, “targets” and similar words are intended to identify these statements. Although Iochpe-Maxion believes that expectations and assumptions reflected in the forward-looking statements are reasonable based on information currently available to Iochpe-Maxion’s management, Iochpe- Maxion cannot guarantee future results or events. Iochpe-Maxion undertakes no obligation to update publicly or revise any forward-looking statements because of new information, future events or other facts. DB GEM Conference
  3. 3. 3 IOCHPE – MAXION: BASICS • Plants located in São Paulo and Minas Gerais States DB GEM Conference
  4. 4. 4 SHAREHOLDER COMPOSITION: JUN-05 Shareholder Agreement Iochpe Family BNDES Participações Other Voting 75.6% Voting 21.8% Voting 2.6% Non-voting 0.5% Non-voting 62.2% Non-voting 37.3% Total 26.5% Total 48.2% Total 25.3% Iochpe-Maxion Iochpe-Maxion S.A. Issued Shares after reverse split (*) Common 18,428,597 34.62% Preferred 34,803,707 65.38% Total 53,232,304 100.00% DB GEM Conference
  5. 5. 5 CORPORATE STRUCTURE: JUN-05 Iochpe-Maxion S.A. (14 Employees) Consolidated =6,207 Employees 99.99% Maxion Componentes Estruturais Ltda. 93.7% 50% Maxion Sistemas Amsted Maxion Fund. e 6.2% Automotivos S.A. Equip. Ferroviários S.A. (4,425 Employees) 50% Wheels and Automotive Chassis Division Comp. Division Amsted (3,116 Employees) (864 Employees) Industries DB GEM Conference
  6. 6. 6 CONSOLIDATED NET SALES BREAKDOWN (%) 1H05 – R$ 750 MM 1H04 – R$ 482 MM Autom.Comp. Autom.Comp. Division Division 7% 14% 36% 57% 57% 29% Amsted Maxion (*) Amsted Wheels and Maxion (*) Chassis Division Wheels and Chassis Division (*) Consolidated figures consider 50% of the net sales of Amsted-Maxion DB GEM Conference
  7. 7. 7 WHEELS AND CHASSIS DIVISION (*) (*) Division of 57% DB GEM Conference
  8. 8. 8 WHEELS AND CHASSIS DIVISION : BASICS • Conformation of flat steel • Focused on the commercial vehicles segment (trucks, buses, pickups and agricultural machinery) • Continuous capex resulting in an unique manufacturing facility in the South American market • Local leadership • Export base (13% of sales) DB GEM Conference
  9. 9. 9 WHEELS AND CHASSIS DIVISION Chassis - 55% of the Division’s Net Sales Heavy Medium Light Stamped Parts Structural Siderails Parts Chassis DB GEM Conference
  10. 10. 10 WHEELS AND CHASSIS DIVISION Wheels for Vehicles - 45% of the Division’s Net Sales DB GEM Conference
  11. 11. 11 BRAZILIAN AUTOMOTIVE INDUSTRY (THOUSAND UNITS) Output Exports 1H05 1H04 Var% 1H05 1H04 Var% Pickups 170.5 140.9 21% 67.7 46.8 45% Trucks 58.5 50.2 17% 15.2 11.9 27% Buses 18.3 13.7 33% 8.9 4.8 83% Agricultural Machinery 29.2 33.5 (13%) 17.1 14.8 16% Source: Anfavea DB GEM Conference
  12. 12. 12 BRAZILIAN FLEET – 2004 Fleet Size Average Fleet Age (In thousand units) (In years) Pickups 3,088 Pickups 8.6 Trucks 1,169 Trucks 12.0 Buses 258 Buses 9.9 Source: Sindipeças DB GEM Conference
  13. 13. 13 WHEELS AND CHASSIS DIVISION (R$ MM) 1000 Net Sales . % a.a 785 0 750 R =4 G 626 CA % % = 59 500 ∆ 429 397 % = 49 241 ∆% 270 208 218 250 174 145 0 2000 2001 2002 2003 2004 2Q05 2Q04 2Q05 1H04 1H05 LTM CAGR = Compund Annual Growth Rate / LTM = last 12 months DB GEM Conference
  14. 14. 14 WHEELS AND CHASSIS DIVISION Chassis – 1H05 Market Share (%) Customer Base (%) Volks- wagen General Maxion 24% Motors 69% 11% 9% Ford 30% 6% 26% Scania 6% 5% Dana Daimler Chrysler 11% 3% Exports OEM Dana Other DB GEM Conference
  15. 15. 15 WHEELS AND CHASSIS DIVISION Wheels – 1H05 Market Share (%) Customer Base (%) Volks- wagen Tractors 13% Maxion 63% 21% After- 10% Market 7% Other 9% Scania 23% 30% 8% Exports 5% Volvo Hayes 11% Daimler Other Chrysler DB GEM Conference
  16. 16. 16 WHEELS AND CHASSIS DIVISION Chassis – New Contracts : R$ 73 MM per year Product / Customer Country Starting Date Saler per year R$ MM Light/Medium Stamped Parts - DaimlerChrysler Brazil Sept.05 21.6 Chassis - Volkswagen Brazil Oct.05 17.8 Siderails and Stamped Parts - AM General U.S.A. Jan.06 12.0 Stamped Parts - ArvinMeritor Brazil May.05 9.6 Siderails - DaimlerChrysler Brazil Dec.05 7.0 Medium Stamped Parts - DaimlerChrysler Brazil Aug.04 3.1 Chassis - Scania Brazil Feb.05 0.7 Medium Stamped Parts - Peugeot Citroen Brazil Oct.04 0.4 Stamped Parts - DaimlerChrysler Germany May.05 0.4 Medium Stamped Parts - Volkswagen Brazil May.05 0.4 DB GEM Conference
  17. 17. 17 WHEELS AND CHASSIS DIVISION Wheels – New Contracts: R$ 29.8 MM per year Customer Country Starting Date Saler per year R$ MM Nyanza / Sarl El Jaouda / Africa Nov.04 / Apr.05 15.7 ECTC / Region 4 / Somaa / Oumnia / Cacomiaf / Maxprest / Royal Vulcanising / Barakat / MIS-Salhya Radial LLantas / Sultana / Mexico May.05 / Jul.05 3.7 Servillantas / Ruedas y Ejes / Dina Camiones John Deere Brazil Mar.06 3.2 GKN / Accuride U.S.A. Jan.05 2.8 Petromaster / Skuba Russia / Lithuania Jan.05 1.4 Al Khateb / Ahmed Khalfan / Middle East Jan.05 / 1.3 Alkha Teeb& Sons May.05 Continental Germany / Morroco Jun.05 0.9 Nordex / Wilar Technic Uruguay / Peru Jan.05 0.8 DB GEM Conference
  18. 18. 18 AMSTED MAXION 36% DB GEM Conference
  19. 19. 19 AMSTED MAXION : BASICS • Integrated freight car operation: castings and car assembly • Capex + technology resulting in an unique manufacturing facility and design capabilities • Steel castings - Transformation of steel scrap - Focused on the railway equipment and industrial businesses - Local leadership - Export base • Freight car assembly - Assembly of components and castings 30% - Local leadership DB GEM Conference
  20. 20. 20 AMSTED MAXION : MAIN PRODUCTS RAILWAY RAILWAY BOOGIES WHEELS FREIGHT CARS 30% DB GEM Conference
  21. 21. 21 BRAZILIAN RAIL EQUIPMENT MARKET – SALES 2Q05 2Q04 ∆% 1H05 1H04 ∆% Freight Railcars (units) 1,897 1,563 21% 3,272 2,616 25% Railway Wheels (thousand units) 14.1 10.3 37% 23.1 16.8 38% Railway Castings 30% (thousand tons) 1.6 1.2 37% 2.7 2.0 34% Source: Amsted-Maxion DB GEM Conference
  22. 22. 22 BRAZILIAN RAILWAY TRANSPORTATION 500 Million of tons 400 =4 .7% C AGR% 331 351 302 301 289 300 254 260 260 200 .2% ∆% = 6 30% 100 58 55 0 Jan - Feb 97 98 99 00 01 02 03 04 04 05 Source: ANTF / Revista Ferroviária CAGR = Compound Annual Growth Rate DB GEM Conference
  23. 23. 23 BRAZILIAN RAILWAY TRANSPORTATION Goods - 2004 Company - 2004 Brasil Other Other Ferrov. 2% 15% ALL 4% 6% Grain 8% MRS Steel CVRD 28% 8% 60% Ore 30% 69% Source: ANTF DB GEM Conference
  24. 24. 24 BRAZILIAN RAILWAY TRANSPORTATION Cargo Transportation Matrix % Railway Cargo Transportation % by type - 2003 30% 24% Railway Road Waterway 21% Russia 81% 08% 11% 20% India 50% 50% 00% Canada 46% 43% 11% Australia 43% 53% 04% 10% USA 43% 32% 25% Brazil 24% 62% 14% 0% 1997 2003 Source: ANTF DB GEM Conference
  25. 25. 25 BRAZILIAN FREIGHT RAILCARS FLEET (units) Jun/05 Jun/04 ∆ units ∆% CVRD / FCA 37,843 32,372 5,471 17% MRS 13,441 12,490 951 8% ALL 12,730 11,805 925 8% Brasil Ferrovias 10,506 10,162 344 3% Other 2,292 2,266 26 1% 76,812 69,095 7,717 11% Source: Revista Ferroviária DB GEM Conference
  26. 26. 26 AMSTED MAXION – 1H05 Market Share (%) Customer Base (%) Freight Railcars 80% CVRD Exports Railway Wheels 20% 54% 24% Railway Castings 80% Industrial Castings 45% 30% 14% 8% ALL Other Source: Amsted-Maxion DB GEM Conference
  27. 27. 27 AMSTED MAXION (R$ MM) 1200 Net Sales (*) 1000 915 . a.a % % 98 800 = 57 646 = GR ∆% 544 CA 600 % = 87 400 328 ∆% 308 274 165 200 122 110 120 0 2000 2001 2002 2003 2004 2Q05 2Q04 2Q05 1H04 1H05 LTM CAGR = Compound Annual Growth Rate / LTM = last 12 months (*) Amsted-Maxion’s net sales. Consolidated figures consider 50% of Amsted-Maxion’s sales DB GEM Conference
  28. 28. 28 AMSTED MAXION Spot Orders 2005/2006 – Railcars – R$ 1.28 Billion (*) CVRD / FCA – 6,032 Brasil Ferrovias – 247 Deliveries (units) MRC (Mitsui / Bunge / ALL) – 350 CVG Ferrominera Orinoco – 225 Delivered jan-jun 2005 2,909 Comilog – 126 To deliver jul-dec 2005 3,508 Total 2005 6,417 CBG Compagnie des Bauxites de Guinee – 22 Total 2006 30% 1,301 MRS – 716 Total – 7,718 units (*) Amsted-Maxion’s net sales. Consolidated figures consider 50% of Amsted-Maxion’s sales DB GEM Conference
  29. 29. 29 AMSTED MAXION Recurring Orders : R$ 242.6 MM per year (*) ASF-Amsted (USA) – railway castings – R$ 145.3 MM Caterpillar (Brazil and USA) – tractor parts – R$ 81.4 MM Metso (France) – industrial castings – R$ 4.8 MM Truck OEMs (Brazil) – fifth-wheel – R$ 4.8 MM Komatsu / CNH (USA and Italy) – industrial castings – R$ 6.3 MM (*) Amsted-Maxion’s net sales. Consolidated figures consider 50% of Amsted-Maxion’s sales DB GEM Conference
  30. 30. Consolidated Second Quarter 2005 DB GEM Conference
  31. 31. 31 EXPORTS (%) Exports – US$ 46.1MM / R$ 126.2 MM – 1H05 (US$ 19.6MM / R$ 58.8MM – 1H04) Segment (%) Destination (%) Chassis Canada Mexico 12% 10% 2% South USA 42% 26% America 37% 51% Wheels Railway 12% 1% Equipment 7% Africa/ Asia/ M. East Imports 1H05 - US$ 6.3MM / R$ 17.4MM (*) Oceania Europe (*) Includes US$ 1.6MM / R$ 4.2MM of machinery and equipment DB GEM Conference
  32. 32. 32 R$ MM NET SALES – CONSOLIDATED (R$ MM) 1750 Net Sales 1500 1,365 . End of a.a % 1250 Divestiture = 45 1,099 R % 1000 Phase AG = 56 C 676 ∆% 750 750 624 482 500 374 411 250 0 2000 2001 2002 2003 2004 2Q05 1H04 1H05 LTM CAGR = Compound Annual Growth Rate / LTM = last 12 months DB GEM Conference
  33. 33. 33 GROSS PROFIT R$ MM % sales 300 50% 273 250 228 40% 200 145 150 137 30% 116 100 100 80 87 21% 21% 21% 21% 20% 20% 20% 19% 19% 50 0 10% 2000 2001 2002 2003 2004 2Q05 1H04 1H05 LTM (*) 2002 results includes change in accounting for profit sharing, amounting to R$ 3.8 MM DB GEM Conference
  34. 34. 34 EBIT R$ MM % sales 160 155 50% 127 40% 120 30% 84 80 58 56 20% 46 36 40 27 12% 11% 12% 11%10% 9% 9% 7% 7% 0 0% 2000 2001 2002 2003 2004 2Q05 1H04 1H05 LTM (*) 2002 results includes change in accounting for profit sharing, amounting to R$ 3.8 MM DB GEM Conference
  35. 35. 35 FINANCIAL EXPENSES, NET R$ MM % sales 80 40% 35% 60 56 54 30% 25% 41 40 38 20% 33 27 15% 13% 23 20 11% 18 10% 9% 6% 5% 5% 3% 2% 2% 0 0% 2000 2001 2002 2003 2004 2Q05 1H04 1H05 LTM DB GEM Conference
  36. 36. 36 OPERATIONAL RESULT AFTER FINANCIAL EXPENSES R$ MM % sales 140 15% 128 120 100 94 10% 9% 9% 9% 80 7% 66 5% 60 3% 40 33 0% 19 20 0 -4% -4% -2% -5% -20 -10 -14 -18 -40 -10% 2000 2001 2002 2003 2004 2Q05 1H04 1H05 LTM (*) 2002 results includes change in accounting for profit sharing, amounting to R$ 3.8 MM DB GEM Conference
  37. 37. 37 EBITDA R$ MM % sales 200 50% 182 180 160 156 40% 140 120 30% 97 100 89 89 80 69 71 20% 58 17% 60 16% 15% 14% 13% 14% 13% 13% 40 10% 20 0 0% 2000 2001 2002 2003 2004 2Q05 1H04 1H05 LTM (*) 2002 results includes change in accounting for profit sharing, amounting to R$ 3.8 MM DB GEM Conference
  38. 38. 38 NET BANK DEBT R$ MM x EBITDA 250 5 195 200 4 176 150 150 3 115 106 102 2,2 100 2 65 1,5 1,3 1,3 50 1,1 1,0 1 0,6 0 0 2000 2001 2002 2003 2004 2Q04 2Q05 LTM LTM LTM = last 12 months DB GEM Conference
  39. 39. 39 INCOME STATEMENT - CONSOLIDATED (R$ Mil) First Half 2,005 % net sales 2,004 % net sales Var 05/04 % Net Sales 749,759 100.0% 482,094 100.0% 55.5% Gross profit 145,095 19.4% 100,160 20.8% 44.9% Operating expenses (61,401) -8.2% (44,402) -9.2% 38.3% Earnings before interest and taxes 83,694 11.2% 55,758 11.6% 50.1% Net financial expenses (17,666) -2.4% (23,247) -4.8% -24.0% Earnings after net financial expenses 66,028 8.8% 32,511 6.7% 103.1% Non-operational result (10,047) -1.3% (4,312) -0.9% 133.0% Earnings befores income taxes and minority interest 55,981 7.5% 28,199 5.8% 98.5% Income taxes and minority interest (24,084) -3.2% (13,881) -2.9% 73.5% Net income 31,897 4.3% 14,318 3.0% 122.8% EBITDA 96,691 12.9% 70,962 14.7% 36.3% DB GEM Conference
  40. 40. 40 IOCHPE-MAXION: STOCK PERFORMANCE R$ MM R$ / SHARE 30 20.0 VOLUME / MONTHLY AVERAGE PRICE IOCHPE-MAXION PN (MYPK4) 16.3 25 23.9 14.2 16.0 15.9 22.3 14.1 15.5 15.0 PRICE VOLUME 12.4 13.6 20 9.6 15.2 15 8.7 8.5 10.0 6.8 5.5 10.0 10 4.9 4.7 4.0 4.0 4.0 4.1 7.0 3.9 6.3 6.7 6.7 5.0 6.2 5.8 5 4.2 4.2 3.2 4.1 3.2 3.3 3.8 2.7 2.8 0.9 - - Dec- Jan- Feb- Mar- Apr- May- Jun- Jul- Aug- Sep- Oct- Nov- Dec- Jan- Feb- Mar- Apr- May- Jun- Jul- 03 04 04 04 04 04 04 04 04 04 04 04 04 05 05 05 05 05 05 05 (*) adjusted for reverse split DB GEM Conference
  41. 41. 41 IOCHPE – MAXION: GOVERNANCE AND CAPITAL MARKETS – Public company since 1984 / ADR Level I since 1994 – Board with 2 independent members and no executive officer member – Audit Board (“Conselho Fiscal”) with 1 representative of the non- controlling shareholders – Dividend payout – 37% of net income and an additional 10% for non- voting shares 2004 Result / Paid in April 2005 : R$ 16.1 MM / Yield – 2.3% (12.31.2004) – Reverse Split Approved at a Shareholder Meeting of March 21, 2005 Proportion - 50:1 Price quote by unit and standard quantity of one hundred shares since April 25, 2005 DB GEM Conference
  42. 42. Additional Information Second Quarter 2005 DB GEM Conference
  43. 43. 43 AUTOMOTIVE COMPONENTS DIVISION (*) (*) Division of 7% DB GEM Conference
  44. 44. 44 AUTOMOTIVE COMPONENTS DIVISION: BASICS • Light stamping • Assembly of parts • Focused on passenger cars • Local leadership in main products • Strong trend for globalization DB GEM Conference
  45. 45. 45 AUTOMOTIVE COMPONENTS DIVISION: MAIN PRODUCTS HANDBRAKE PEDAL JACKS LEVERS SETS DB GEM Conference
  46. 46. 46 AUTOMOTIVE INDUSTRY (THOUSAND UNITS) Output Exports 2Q05 2Q04 Var% 2Q05 2Q04 Var% 503.4 428.6 17% 171.9 118.9 45% Passenger Cars 1H05 1H04 Var% 1H05 1H04 Var% 954.8 834.0 15% 303.1 215.2 41% DB GEM Conference
  47. 47. 47 AUTOMOTIVE COMPONENTS DIVISION (R$ MM) 200 Net Sales a. = 6% a. CAGR 150 150 131 114 99 94 98 100 ∆ % = (2 8% ) 68 ∆ % = (2 6% ) 50 50 34 26 0 2000 2001 2002 2003 2004 2Q05 2Q04 2Q05 1H04 1H05 LTM CAGR = Compund Annual Growth Rate / LTM = last 12 months DB GEM Conference
  48. 48. 48 AUTOMOTIVE COMPONENTS DIVISION Market Share (%) Customer Base (%) Hand break lever 43% Fiat Volks- 24% wagen Pedal set 25% 20% Jack 21% Latch 9% 13% 24% Brose knob / Key / Cylinder 8% 8% 11% General Ford Motors Other DB GEM Conference
  49. 49. 49 AUTOMOTIVE COMPONENTS DIVISION New Contracts: R$ 9.2 MM per year Model - Customer Product Starting Sales per year Date R$ MM FLP - Fiat Lock / Reinforcement Jun.06 4.4 New Cabin - VW Knobs set Nov.05 1.6 310 - Fiat Hinges Dec.06 1.2 Fox Euro - VW Jacks / Door Locks Jun.05 1.1 Idea - Fiat Hinges Aug.05 0.4 Uno - Fiat Bracket Jan.06 0.3 Pickup FLP - Fiat Hinges Jun.06 0.2 DB GEM Conference
  50. 50. Benchmark 2º Tri 2005 DB GEM Conference
  51. 51. 51 BENCHMARK – GROSS PROFIT (% NET SALES) Gentex Eaton Stoneridge Strattec Borg Warner Cummins Iochpe-Maxion Nippon Denso Accuride Federal Mogul Titan Autoliv Tenneco Marcopolo Johnson Controls Dura TRW Auto Valeo American Axle Dana ArvinMeritor 2Q04 2Q05 Faurecia Superior Lear 0% 10% 20% 30% 40% Average = 14.8% Source: Companies releases 2005 First Half of each company, except for Nippon Denso with first quarter results, Strattec with 12 months DB GEM Conference result and ArvinMeritor / Johnson Controls with 9 months results.
  52. 52. 52 BENCHMARK – EBIT ( % NET SALES ) Gentex Accuride Strattec Iochpe-Maxion Titan Eaton Nippon Denso Autoliv Cummins Stoneridge Borg Warner Tenneco TRW Auto Dura American Axle Faurecia Marcopolo Superior Johnson Controls Dana Federal Mogul Valeo 2Q04 2Q05 ArvinMeritor Lear 0% 10% 20% 30% Average= 6.7% Source: Companies releases 2005 First Half of each company, except for Nippon Denso with first quarter results, Strattec with 12 months DB GEM Conference result and ArvinMeritor / Johnson Controls with 9 months results.
  53. 53. 53 BENCHMARK – EBITDA ( % NET SALES ) Accuride Strattec Titan Autoliv Iochpe-Maxion Borg Warner Tenneco Cummins TRW Auto American Axle Federal Mogul Valeo Faurecia Dura Dana Marcopolo Johnson Controls ArvinMeritor 2Q04 2Q05 Lear 0% 10% 20% 30% Average - 9.2% Source: Companies releases 2005 First Half of each company, except for Nippon Denso with first quarter results, Strattec with 12 months DB GEM Conference result and ArvinMeritor / Johnson Controls with 9 months results.
  54. 54. Bank Debt Second Quarter 2005 DB GEM Conference
  55. 55. 55 NET DEBT BREAKDOWN – CONSOLIDATED – JUN05 (R$ MM) SHORT LONG LINES TOTAL TERM TERM Trade Finance / Export 23.4 18.2 41.6 Equipment Financing 23.6 67.5 91.1 Buyers - Local 73.4 73.4 120.4 85.7 206.1 (-) Cash and Marketable Securities 30.5 30.5 Net Debt 89.9 85.7 175.6 DB GEM Conference
  56. 56. 56 DEBT INDEXATION – CONSOLIDATED – JUN05 (%) CDI (interbank) AVERAGE COST (1H05) 36% TJLP 42% In R$ - 84% CDI (BNDES rate) In US$ - 5.6% a.a. 2% 20% Dollar IGPM (inflation rate) DB GEM Conference
  57. 57. 57 FOREIGN CURRENCY EXPOSURE – JUN05 (US$ MM) Balance Sheet Assets denominated in foreign currency . Marketable Securities / Investments 3.9 . Accounts Receivable 19.7 23.6 Liabilities denominated in foreign currency . Bank debt (19.2) . Accounts Payable (7.6) (26.8) Net Position (3.2) DB GEM Conference
  58. 58. Balance Sheet Second Quarter 2005 DB GEM Conference
  59. 59. 59 INCOME STATEMENT – CONSOLIDATED (R$ MM) Second Quarter 2,005 % net sales 2,004 % net sales Var 05/04 % Net Sales 397,180 100.0% 269,222 100.0% 47.5% Gross profit 73,598 18.5% 61,483 22.8% 19.7% Operating expenses (31,154) -7.8% (23,975) -8.9% 29.9% Earnings before interest and taxes 42,444 10.7% 37,508 13.9% 13.2% Net financial expenses (8,966) -2.3% (14,650) -5.4% -38.8% Earnings after net financial expenses 33,478 8.4% 22,858 8.5% 46.5% Non-operational result (4,763) -1.2% (2,678) -1.0% 77.9% Earnings befores income taxes and minority interest 28,715 7.2% 20,180 7.5% 42.3% Income taxes and minority interest (11,933) -3.0% (7,956) -3.0% 50.0% Net income 16,782 4.2% 12,224 4.5% 37.3% EBITDA 49,031 12.3% 45,130 16.8% 8.6% DB GEM Conference
  60. 60. 60 BALANCE SHEET – CONSOLIDATED (R$ THOUSAND) ASSET Jun/05 Jun/04 LIABILITY AND STOCKHOLDERS' EQUITY Jun/05 Jun/04 CURRENT CURRENT Cash and marketable securities 30,567 29,266 Loans and local bonds 120,427 111,256 Account receivables 193,015 103,006 Account payables 92,676 52,263 Inventory 182,150 120,839 Prepayment 67,478 11,635 Recoverable taxes 30,754 21,566 Wages, labor charges and other 32,054 24,698 Other 17,754 15,813 Taxes payable 25,624 11,799 454,240 290,490 Accruals, miscelaneous 15,676 15,355 Other 29,198 14,299 383,133 241,305 LONG TERM LONG TERM Account receivables 4,021 4,458 Loans and local bonds 85,713 67,580 Deferred taxes 40,090 42,959 Accruals, miscelaneous 39,082 28,186 Other 36,192 13,934 Other 18,608 16,227 80,303 61,351 143,403 111,993 MINORITY INTEREST 191 117 PERMANENT STOCKHOLDERS' EQUITY Investments 210 6,806 Paid in capital 161,463 161,463 Property, plant and equipment 206,675 147,066 Profit reserve 24,770 Deferred 3,429 13,555 Retained profit 31,897 4,390 210,314 167,427 218,130 165,853 TOTAL ASSET 744,857 519,268 TOTAL LIABILITY AND STOCKHOLDERS' EQUITY 744,857 519,268 DB GEM Conference
  61. 61. Historical Market Data DB GEM Conference
  62. 62. 62 Automotive Industry – Brazilian Output 2000 Cars 1500 1000 500 0 94 95 96 97 98 99 00 01 02 03 04 M LT 19 19 19 19 19 19 20 20 20 20 20 05 2Q LTM = last 12 months DB GEM Conference
  63. 63. 63 Automotive Industry – Brazilian Output 400 350 Pickups 300 250 200 150 100 50 0 9 4 9 5 9 6 9 7 9 8 9 9 0 0 0 1 0 2 0 3 0 4 M T 19 19 19 19 19 19 20 20 20 20 20 5L 0 2Q LTM = last 12 months DB GEM Conference
  64. 64. 64 Automotive Industry – Brazilian Output 160 140 Trucks Buses 120 100 80 60 40 20 0 94 95 96 97 98 99 00 01 02 03 04 M LT 19 19 19 19 19 19 20 20 20 20 20 05 2Q LTM = last 12 months DB GEM Conference
  65. 65. 65 Automotive Industry – Brazilian Output 80 Agricultural Machinery 70 60 50 40 30 20 10 0 94 95 96 97 98 99 00 01 02 03 04 M LT 19 19 19 19 19 19 20 20 20 20 20 05 2Q LTM = last 12 months DB GEM Conference
  66. 66. 66 Units Brazilian Railway Equipment Industry 7000 Freight Cars 6000 5000 4000 3000 2000 1000 0 94 95 96 97 98 99 00 01 02 03 2 Q 04 M LT 19 19 19 19 19 19 20 20 20 20 20 05 LTM = last 12 months DB GEM Conference
  67. 67. 67 Units Brazilian Railway Equipment Industry 60000 Railroad Wheels 50000 40000 30000 20000 10000 0 94 95 96 97 98 99 00 01 02 03 2Q 04 M LT 19 19 19 19 19 19 20 20 20 20 20 05 Does not include wheels used in the assembly of new freight cars DB GEM Conference LTM = last 12 months
  68. 68. 68 Tons Brazilian Railway Equipment Industry 4500 4000 Railroad Castings 3500 3000 2500 2000 1500 1000 500 0 94 95 96 97 98 99 00 01 02 03 2Q 04 M LT 19 19 19 19 19 19 20 20 20 20 20 05 Does not include wheels used in the assembly of new freight cars DB GEM Conference LTM = last 12 months
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