Iochpe-Maxion - Santander Annual Conference Presentation

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Santander Annual Conference Presentation

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Iochpe-Maxion - Santander Annual Conference Presentation

  1. 1. Brazil Annual Conference Santander June, 2005 Santander | June 2005
  2. 2. 2 IOCHPE – MAXION: BASICS • Two major operations: - Wheels and chassis for trucks, buses, pickups and agricultural machinery - Equipments for the railway industry • Third operation: - Autoparts for passenger cars • Plants located in the São Paulo and Minas Gerais States in Brazil Santander | June 2005
  3. 3. 3 SHAREHOLDER COMPOSITION: MAR-05 Shareholder Agreement Iochpe Family BNDES Participações Other Common 75.6% Common 21.8% Common 2.6% Preferred 0.5% Preferred 62.2% Preferred 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% Santander | June 2005
  4. 4. 4 CORPORATE STRUCTURE: MAR-05 Iochpe-Maxion S.A. (14 Employees) Consolidado =5,929 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. (4,082 Employees) 50% Wheels and Automotive Chassis Division Comp. Division Amsted (3,004 Employees) (870 Employees) Industries Santander | June 2005
  5. 5. 5 CONSOLIDATED NET SALES BREAKDOWN (%) 1Q05 - R$ 352.6 MM 1Q04 – R$ 212.9 MM Automotive Comp. Division Automotive Comp. Division 7% 16% 60% 58% 33% 26% Amsted Maxion (*) Amsted Wheels and Maxion (*) Wheels and Chassis Division Chassis Division (*) Consolidated figures consider 50% of the net sales of Amsted Maxion Santander | June 2005
  6. 6. 6 WHEELS AND CHASSIS DIVISION (*) (*) Division of 60% Santander | June 2005
  7. 7. 7 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 (16% of sales) Santander | June 2005
  8. 8. 8 WHEELS AND CHASSIS DIVISION Chassis - 54% of the Division’s Net Sales Heavy Medium Light Stamped Parts Structural Siderails Parts Chassis Santander | June 2005
  9. 9. 9 WHEELS AND CHASSIS DIVISION Wheels for Vehicles - 46% of the Division’s Net Sales Santander | June 2005
  10. 10. 10 AUTOMOTIVE INDUSTRY – BRAZILIAN OUTPUT (THOUS. UNITS) 1Q05 1Q04 Var% Pickups 78.4 68.2 14.9% Trucks 27.3 23.0 18.8% Buses 8.2 6.0 37.1% Agricultural Machinery 13.8 15.6 (11.6%) Santander | June 2005
  11. 11. 11 AUTOMOTIVE INDUSTRY – EXPORT (THOUS. UNITS) 1Q05 1Q04 Var% Pickups 30.1 21.4 40.6% Trucks 6.5 5.1 27.9% Buses 3.9 2.0 92.6% Agricultural Machinery 8.4 7.0 20.8% Santander | June 2005
  12. 12. 12 WHEELS AND CHASSIS DIVISION (R$ MM) 1.000 Net Sales . % p.a 713 750 3 = 39. 626 G R CA % 500 397 6 9,5 = ∆% 208 241 211 250 174 124 0 2000 2001 2002 2003 2004 1Q05 LTM 1Q04 1Q05 CAGR = Compounded Annual Growth Rate / LTM = Last Twelve Months Santander | June 2005
  13. 13. 13 WHEELS AND CHASSIS DIVISION Chassis – 1Q05 Market Share (%) Customer Base (%) Volks- wagen General Maxion 21% 69% Motors 11% 9% Ford 30% 7% 26% Export 5% Dana 6% 3% Scania Daimler 13% Chrysler Dana OEM Other Santander | June 2005
  14. 14. 14 WHEELS AND CHASSIS DIVISION Wheels – 1Q05 Market Share (%) Customer Base (%) Volks- Export wagen Maxion 65% 23% 12% Trailer 7% 12% OEMs Other 7% Scania 24% 28% 6% Borlem Tractors 4% Volvo 12% Daimler Other Chrysler Santander | June 2005
  15. 15. 15 AUTOMOTIVE COMPONENTS DIVISION (*) (*) Division of 7% Santander | June 2005
  16. 16. 16 AUTOMOTIVE COMPONENTS DIVISION: BASICS • Light stamping • Assembly of parts • Focused on passenger cars • Local leadership in main products • Strong trend for globalization Santander | June 2005
  17. 17. 17 AUTOMOTIVE COMPONENTS DIVISION: MAIN PRODUCTS HANDBRAKE PEDAL JACKS LEVERS SETS Santander | June 2005
  18. 18. 18 AUTOMOTIVE INDUSTRY (THOUS. UNITS) 1Q05 1Q04 Var% Cars Output 451.4 405.4 11.4% Export 131.2 96.3 36.2% Santander | June 2005
  19. 19. 19 AUTOMOTIVE COMPONENTS DIVISION (R$ MM) 200 Net Sales .a. R=8.4 % p CA G 150 140 150 114 99 94 98 100 ∆% = (2 9.2%) 50 34 24 0 2000 2001 2002 2003 2004 1Q05LTM 1Q04 1Q05 CAGR = Compounded Annual Growth Rate / LTM = Last Twelve Months Santander | June 2005
  20. 20. 20 AUTOMOTIVE COMPONENTS DIVISION – 1Q05 Market Share (%) Customer Base (%) H and B reak Lever 43% Fiat Volks- 23% wagen P edal S et 25% 20% Jack 21% 13% Latch 9% 25% Brose 8% K nob / K ey / C ylinder 8% General 11% Motors Ford Other Santander | June 2005
  21. 21. 21 AMSTED MAXION 33% Santander | June 2005
  22. 22. 22 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 Santander | June 2005
  23. 23. 23 AMSTED MAXION : MAIN PRODUCTS RAILWAY RAILWAY BOOGIES WHEELS FREIGHT CARS 30% Santander | June 2005
  24. 24. 24 BRAZILIAN RAILWAY EQUIPMENT MARKET Sales 1Q05 1Q04 Var% Freight cars – units 1,375 1,053 31% Railway wheels – units 9,009 6,535 38% Railway castings – tons 1,046 768 36% 30% Figures do not include wheels and castings used in the assembly of new freight cars Santander | June 2005
  25. 25. 25 AMSTED MAXION – 1Q05 Market Share (%) Customer Base (%) F reig h t C ars 80% Export CVRD 25% R ailw ay W h eels 33% R ailw ay C astin g s 80% 45% In d u strial C astin g s 50% 19% 30% ALL 11% Other Santander | June 2005
  26. 26. 26 AMSTED MAXION (R$ MM) 1.000 Net Sales (*) .a. 772 800 p % 4.5 646 5 600 G R= % CA 5.5 = 11 400 328 ∆% 236 200 122 110 120 109 0 2000 2001 2002 2003 2004 1Q05LTM 1Q04 1Q05 CAGR = Compounded Annual Growth Rate / LTM = Last Twelve Months (*) Amsted Maxion’s net sales. Consolidated figures consider 50% of Amsted Maxion’s sales Santander | June 2005
  27. 27. 27 AMSTED MAXION Spot Orders 2005/2006 – Freight Cars – R$ 1.15 Billion (*) CVRD / FCA – 5,758 Brasil Ferrovias – 500 Deliveries (cars) MRC (Mitsui / Bunge / ALL) – 350 CVG Ferrominera Orinoco – 225 Delivered jan-mar 2005 1,212 Comilog – 76 To deliver apr-sept 2005 4,781 Total 2005 5,993 CBG Compagnie des Bauxites de Guinee – 24 Total 2006 30% 1.376 MRS – 436 Total – 7,369 cars (*) Amsted Maxion’s sales. Consolidated figures consider 50% of Amsted Maxion’s sales Santander | June 2005
  28. 28. 28 AMSTED MAXION Recurring Orders : R$ 271.7 MM per year (*) ASF-Amsted (USA) – railway castings – R$ 162.4 MM Caterpillar (Brazil / USA) – tractor parts – R$ 83.5 MM Holland Group (USA) – fifth-wheel components – R$ 12.8 MM Metso (France) – industrial castings – R$ 4.1 MM Truck OEMs (Brazil) – fifth-wheel – R$ 4.0 MM Komatsu / CNH (USA / Italy) – industrial castings – R$ 4.9 MM (*) Amsted Maxion’s net sales. Consolidated figures consider 50% of Amsted Maxion’s sales Santander | June 2005
  29. 29. Consolidated Figures 1st Quarter 2005 Santander | June 2005
  30. 30. 30 CONSOLIDATED FIGURES Net Sales Breakdown – 1Q05 By Customer (%) By Segment (%) Volks- Daimler wagen Chrysler OEMs producing in Brazil 58% 12% 11% Tractors - Buses, trucks and pickups 51% 7% CVRD - Passenger cars 15% 6% ALL 7% 5% General Motors Brazilian railway operators 25% 4% 3% Scania 17% Ford Export Exports 17% 20% Other Santander | June 2005
  31. 31. 31 CONSOLIDATED FIGURES Exports – US$ 22.7MM / R$ 62.4 MM – 1Q05 Product Segment (%) Destination (%) Chassis Canada 15% 20% Mexico 4% 18% South 37% 36% America USA 48% Railway 1% Wheels Asia/ Equipment 10% for Vehicles 11% Oceania Europe Import 1Q05 - US$ 5.3MM / R$ 14.0MM (*) Africa / Middle East (*) includes US$ 1.6MM / R$ 4.2MM of machinery and equipment Santander | June 2005
  32. 32. 32 NET SALES - CONSOLIDATED (R$ MM) 1.600 1.238 Acquisition 1.099 1.200 Batz Borlem 800 676 624 374 411 400 0 2000 2001 2002 2003 2004 1Q05LTM Divestiture Divestiture Divestiture Divestiture 50% Amsted-Maxion 50% Maxion Maxion Nacam Window Motores Raiser Santander | June 2005
  33. 33. 33 FIRST QUARTERS COMPARISON - CONSOLIDATED Operational Margins - % Net Sales 24% 21% 20% 18% 17% 18% 15% 14% 13% 13% 12% 12% 9% 7% 9% 3% 5% 5% -5% -5% Gross Profit Ebitda Ebit Operation's Res. 1Q01 1Q02 1Q03 1Q04 1Q05 Santander | June 2005
  34. 34. 34 INCOME STATEMENT - CONSOLIDATED (R$ MM) January to March % Net % Net Var 05/04 2,005 Sales 2,004 Sales % Net sales 352,579 100.0% 212,872 100.0% 66% Gross profit 71,497 20.3% 38,677 20.3% 85% Operating Expenses (30,247) -8.6% (20,427) -8.6% 48% Earnings before interest and taxes - EBIT 41,250 11.7% 18,250 11.7% 126% Net financial expenses (8,700) -2.5% (8,597) -2.5% 1% Earnings after financial result 32,550 9.2% 9,653 9.2% 237% Non-operating result (5,284) -1.5% (1,634) -1.5% 223% Earnings before incom e taxes 27,266 7.7% 8,019 7.7% 240% Incom e taxes expense (12,151) -3.4% (5,925) -3.4% 105% Net incom e of the period 15,115 4.3% 2,094 4.3% 622% Earnings before interest, taxes, depreciation and am ortization - EBITDA 47,660 13.5% 25,832 13.5% 84% Santander | June 2005
  35. 35. 35 NET DEBT - CONSOLIDATED R$ MM x EBITDA 1 8 0 .0 5 .0 1 5 6 .8 1 6 0 .0 4 .0 1 4 0 .0 1 2 0 .0 1 1 5 .0 1 0 5 .7 1 0 1 .9 3 .0 1 0 0 .0 8 0 .0 6 5 .1 2 .0 6 0 .0 1 .5 1 .3 4 0 .0 1 .1 1 .0 0 .9 2 0 .0 0 .6 0 .0 0 .0 2001 2002 2003 2004 1Q05 Santander | June 2005
  36. 36. 36 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 Santander | June 2005
  37. 37. 37 IOCHPE – MAXION: FUNDAMENTALS Strong organic revenue growth Steady operating margins Growing cash generation Solid capital structure – net debt / EBITDA ratio Focus on businesses related to the transportation industry Local market leadership Capex aiming at a strong competitive position – barriers to entry Growing exports Capacity expansion in line with demand growth Santander | June 2005
  38. 38. 38 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 22.3 14.1 15.0 12.4 20 VOLUME PRICE 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 6.7 5.0 3.9 6.3 6.2 5.8 5 4.2 4.2 3.2 4.1 3.8 2.8 3.2 2.7 0.9 - - Dec- Jan- Feb- Mar- Apr- May- Jun- Jul-04 Aug- Sep- Oct- Nov- Dec- Jan- Feb- Mar- Apr- 03 04 04 04 04 04 04 04 04 04 04 04 05 05 05 05 (*) after reverse split Santander | June 2005
  39. 39. A d d i t i o n al I n f o r m a t i o n 1st Quarter 2005 Santander | June 2005
  40. 40. Benchmark 1st Quarter 2005 Santander | June 2005
  41. 41. 41 BENCHMARK – GROSS PROFIT (% NET SALES) Frasle Gentex Randon Stoneridge Eaton Strattec Borg Warner Iochpe-Maxion Nippon Denso Titan Cummins Federal Mogul Marcopolo Autoliv Tenneco Johson Controls Magna TRW Dura American Axle Valeo Dana Superior 1Q05 1Q04 ArvinMeritor Lear Visteon 0% 10% 20% 30% 40% Average = 15.5% Source: Companies releases 2005 First Quarter Results of each company, except for Nippon Denso with 12 months result, Strattec with 9 Santander | June 2005 months result and ArvinMeritor and Johnson Controls with 6 months results.
  42. 42. 42 BENCHMARK – EBIT ( % NET SALES ) Gentex Randon Frasle Strattec Iochpe-Maxion Titan Eaton Autoliv Nippon Denso Borg Warner Stoneridge Cummins Marcopolo TRW Superior Magna Tenneco Dura American Axle Johson Controls Dana Federal Mogul Valeo Lear 1Q05 1Q04 ArvinMeritor Visteon -10% 0% 10% 20% 30% 40% Average = 6.5% Source: Companies releases 2005 First Quarter Results of each company, except for Nippon Denso with 12 months result, Strattec with 9 Santander | June 2005 months result and ArvinMeritor and Johnson Controls with 6 months results.
  43. 43. 43 BENCHMARK – EBITDA ( % NET SALES ) Gentex Randon Strattec Frasle Titan Borg Warner Iochpe-Maxion Autoliv Nippon Denso TRW Cummins Tenneco American Axle Marcopolo Magna Federal Mogul Dana Dura Johson Controls Lear ArvinMeritor 1Q05 1Q04 Visteon 0% 10% 20% 30% 40% 50% Average - 10% Source: Companies releases 2005 First Quarter Results of each company, except for Nippon Denso with 12 months result, Strattec with 9 Santander | June 2005 months result and ArvinMeritor and Johnson Controls with 6 months results.
  44. 44. New Contracts 1st Quarter 2005 Santander | June 2005
  45. 45. 45 WHEELS AND CHASSIS DIVISION Chassis – New Contratcs: R$ 35.2 MM per year Product / Customer Country Starting Date Saler per year R$ MM Siderails and Stamped Parts - AM General E.U.A. Jan.06 19.8 Stamped Parts - ArvinMeritor Brasil May.05 9.6 Stamped Parts - DaimlerChrysler Brasil Aug.04 3.1 Stamped Parts - DaimlerChrysler Brasil Jun.04 1.3 Chassis - Scania Brasil Feb.05 0.7 Stamped Parts - Peugeot Citroen Brasil Oct.04 0.4 Siderails Reinforcements - DaimlerChrysler Brasil May.04 0.3 Santander | June 2005
  46. 46. 46 WHEELS AND CHASSIS DIVISION Wheels – New Contracts: R$ 16.7 MM per year Customer Country Starting Date Saler per year R$ MM Workhorse U.S.A. Jun.05 6.5 John Deere Brazil Nov.04 3.2 Barakat Egypt May.05 1.7 Dunlop South Africa Jun.04 1.5 Petromaster Russia Jan.05 1.2 Maxprest / Bridgestone South Africa Apr.05 0.7 Jarl El Jaouda Algeria Nov.04 0.8 Kristanas Spiros Greece Jul.04 0.6 International Trade Morocco Jan.05 0.5 Santander | June 2005
  47. 47. 47 AUTOMOTIVE COMPONENTS DIVISION New Contracts: R$ 3.1 MM per year Model - Customer Product Starting Sales per year Date R$ MM New truck - VW Knobs Nov.05 1.6 Fox Euro - VW Jacks / Door Locks Jun.05 1.1 Idea - Fiat Latches Aug.05 0.4 Santander | June 2005
  48. 48. Debt Profile 1st Quarter 2005 Santander | June 2005
  49. 49. 49 NET DEBT BREAKDOWN – MAR05 - (R$ MM) Lines SHORT TERM TOTAL Trade Finance / Export 25.5 27.9 53.4 Equipment Financing 26.8 14.2 41.0 Buyers - Local 82.4 82.4 Other Local 10.3 10.3 145.0 42.1 187.1 (-) Cash and Marketable Securities 30.3 30.3 Net Debt 114.7 42.1 156.8 Santander | June 2005
  50. 50. 50 DEBT INDEXATION – MAR05 (%) CDI (interbank) 50% 28% Dollar 3% 19% TJLP IGPM (BNDES (inflation rate) rate) Santander | June 2005
  51. 51. 51 FOREIGN CURRENCY EXPOSURE – MAR05 (US$ MM) Balance Sheet Assets denominated in foreign currency . Marketable Securities / Investments 2.4 . Accounts Receivable 10.9 13.3 Liabilities denominated in foreign currency . Bank Debt (Export lines / other) (20.1) . Accounts Payable (4.1) (24.2) Net Position (10.9) Santander | June 2005
  52. 52. Balance Sheet 1st Quarter 2005 Santander | June 2005
  53. 53. 53 BALANCE SHEET – MAR05 (R$ THOOUS.) Assets Mar/05 Mar/04 LIABILITY Mar/05 Mar/04 Cash and marketable securities 30,287 26,572 Loans and bonds 144,965 89,110 Accounts receivable 180,713 94,539 Accounts payable 73,969 56,329 Inventories 160,479 103,006 Customers' advances 69,558 8,303 Long Term Long Term Marketable securities 3,029 Loans and bonds 42,148 83,276 Accounts receivable 4,533 4,833 Miscelaneous provisions 36,918 31,804 Deferred income taxes 40,090 42,959 Other 4,246 16,563 Other 29,872 17,879 83,312 131,643 74,495 68,700 Minority Interest 176 141 Permanent Net Worth Investments 265 7,740 Paid-in capital 161,463 161,463 Plant, property and equipment 178,763 142,466 Profit reserve 24,770 Deferred 3,736 14,201 Accumulated results 15,115 (7,834) 182,764 164,407 201,348 153,629 TOTAL ASSET 674,219 489,537 TOTAL LIABILITY 674,219 489,537 Santander | June 2005
  54. 54. Conferência Anual Brasil Santander Junho de 2005 Santander | June 2005

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