Iochpe-Maxion - 1Q04 Presentation

2004 First Quarter Results

First Quarter Performance R$ MM

Net Sales EBIT

1 8 ,7 1 8 ,3
2 1 2 ,9
1 4 8 ,3

Operation
Result
1Q 03 1Q 04
1Q 03 1Q 04 9 ,7
7 ,4

EBITDA Net
Income
2 6 ,8 2 5 ,8 3 ,4
1Q 03 1Q 04 2 ,1

1Q 03 1Q 04
1Q 03 1Q 04

2


First Quarters Review % net sales

Operational Margins 2 4 ,0 %
2 0 ,7 %
1 7 ,2 % 1 8 ,2 %
1 8 ,1 %
1 4 ,4 % 1 5 ,2 %
1 2 ,5 % 1 2 ,6 % 1 2 ,1 %
9 ,5 % 8 ,6 %
6 ,8 %
3 ,4 %
0 ,4 %
5 ,0 % 4 ,5 %

-4 ,7 % -4 ,5 %
G r o s s P r o f it E b i td a E b it O p e r a tio n R e s u lt
-1 0 ,1 %
1Q00 1Q01 1Q02 1Q03 1Q04

3


First Quarters Review R$ MM

Operational Margins
3 8 ,7
3 5 ,7

2 6 ,8 2 5 ,8
2 0 ,1
1 7 ,1 1 8 ,7 1 8 ,3
1 4 ,6
1 4 ,7
1 1 ,3 1 0 ,6 9 ,7
6 ,6
0 ,5 2 ,8
7 ,4

(4 ,6 ) (3 ,8 )
G r o s s P r o f it E b itd a E b it O p e r a tio n R e s u lt
(1 2 ,0 )
1Q00 1Q01 1Q02 1Q03 1Q04

4


Last 5 Quarters Review % Net sales

Operational Margins
2 4 ,0 %
2 1 ,2 %
2 0 ,0 %
1 8 ,2 %
1 8 ,1 % 1 6 ,2 %
1 2 ,6 % 1 3 ,3 % 1 3 ,7 %
1 2 ,1 %
8 ,3 % 9 ,4 % 8 ,6 %
8 ,7 %
4 ,5 %
5 ,0 % 4 ,5 %
3 ,4 % 3 ,9 %

-0 ,5 %

G r o s s P r o fit E b itd a E b it O p e r a tio n R e s u lt

1Q03 2Q03 3Q03 4Q03 1Q04

5


5 Year Review R$ MM

Net Sales
900
7 4 0 ,3
6 7 5 ,7
6 1 5 ,4 6 2 4 ,0

600

4 1 1 ,2
3 7 3 ,7

300

0
1999 2000 2001 2002 2003 1Q04 LTM
LTM = Last 12 months

6


Corporate Structure

Bradesco Companhia Iochpe BNDESPAR Other Mar/03
Total 6,5% 20,8% 48,2% 24,5% 19,9%

Voting 18,8% 56,5% 21,8% 2,9% 3,1%

Non voting 0,0% 1,9% 62,2% 35,9% 28,5%

Iochpe-Maxion S.A.
11
Tecob Iochpe Holdings

3 2

50%
Maxion Componentes Amsted -Maxion Fundição Maxion Componentes
Estruturais Ltda. e Equip. Ferrov. S.A. Automotivos S.A.
2.446 2.741 1.140

Amsted
Industries
(50%)

Employees
Consolidated - 4.973

7


Revenue breakdown by company %

1Q04 - R$ 212,9 MM 1Q03 - R$ 148,3 MM

Maxion Comp. Maxion Comp.
Autom. Autom.

16%
19%

58% 60%
26% Amsted 2 1 %
Amsted Maxion
Maxion
Maxion Maxion
Comp. Comp.
Estruturais Estruturais

8


Automobile Industry – Brazilian Output units

1Q04 1Q03 Var%

Cars 403.593 370.144 13,7%

Utility Vehicles 67.617 44.287 52,7%

Trucks 22.926 20.079 14,2%

Buses 5.958 6.271 -5,0%

Total Vehicles 500.094 440.781 13,5%

Agricultural
Machinery 15.037 11.141 35,0%

Source : Anfavea

9


Automobile Industry - Export units

1Q04 1Q03 Var%

Cars 94.991 92.046 3,2%

Utility Vehicles 20.236 11.842 70,9%

Trucks 4.896 1.903 157,3%

Buses 2.019 1.936 4,3%

Total Vehicles 122.142 107.727 13,4%

Agricultural
Machinery 6.976 3.782 84,5%

Source : Anfavea

10

Subsidiaries : MAXION COMPONENTES ESTRUTURAIS

58%


Maxion Componentes Estruturais

Chassis e Siderails - 52% of net sales

Heavy Medium Light
Stamped Parts Structural
Siderails Parts

Chassis

12


Maxion Componentes Estruturais

Wheels for Vehicles - 48% of net sales

13


Maxion Componentes Estruturais R$ MM

Net Sales
500
4 3 3 ,4
.
400 % p.a 3 9 7 ,3

3 7,5
R =
300 C AG
2 4 0 ,7
9%
1 7 4 ,1
2 0 7 ,5
= 40,
%
Var
200
1 2 4 ,4
1 1 2 ,1
8 8 ,3
100

0
1999 2000 2001 2002 2003 1Q04 LTM 1Q03 1Q04
LTM = Last 12 months / CAGR = Compounded Annually Growth Rate

14


Maxion Componentes Estruturais - Chassis

Market Share %
1Q04 1Q03

OEM
OEM 73%
13% 70%
11%

17% Dana 16%
Dana
Maxion Maxion

15


Maxion Componentes Estruturais - Chassis R$ MM

Revenue breakdown by customer %
1Q04 – R$ 65,3MM 1Q03 – R$ 46,4 MM

Volks- General Volks- General
wagen Motors wagen Motors
22% 24%
13% 14%

10% Export Export
13%

27% 8% 24%
Ford 6% Ford
5% 5%
15% Scania Daimler 14% Scania
Daimler Chrysler
Chrysler Other Other

16


Maxion Componentes Estruturais - Chassis R$ MM

New Agreements: R$ 18,5 MM per year

C H A S S IS C o u n tr y S ta r tin g D a te A n n u a l S a le s
R$ M M
S id e r a ils - W o r k h o r s e USA S e p -0 3 5 ,4
S t a m p e d P a r t s - D a im le r C h r y s le r B r a z il A u g -0 4 3 ,1
C h a s s is ( C K D - M é x ic o ) - V o lk s w a g e n B r a z il M a r-0 4 2 ,3
C h a s s is - V o lk s w a g e n B r a z il A p r-0 4 2 ,2
S id e r a ils - J o h n D e e r e B r a z il J u n -0 3 1 ,7
S t a m p e d P a r t s - D a im le r C h r y s le r B r a z il J u n -0 4 1 ,3
S ta m p e d P a rts - S tre p a ra v a - I v e c o B r a z il S e p -0 4 0 ,9
S id e r a ils - J a c t o B r a z il J u n -0 3 0 ,9
S t a m p e d P a r t s - P e u g e o t C it r o e n B r a z il O c t-0 4 0 ,4
S id e r a ils R e in f o r c . - D a im le r C h r y s le r B r a z il M a y -0 4 0 ,3

17


Maxion Componentes Estruturais - Wheels

Market Share %
1Q04 1Q03

Other Other

14% 13%

34% 37%
52% 50%

Borlem Borlem
Maxion Maxion

18


Maxion Componentes Estruturais - Wheels

1Q04 – R$ 59,1MM 1Q03 – R$ 41,9 MM
Volks- Volks-
wagen Scania wagen Scania
After 11% 11% Volvo
Market 7% Volvo After 7%
7% Market 3%
16% 15% Other
Other 12%
8%

23% 21%
28% Tractors 31%
Tractors Export Export
AGCO - 7% AGCO - 8%
CNH – 4% CNH – 6%
Valtra – 5% Valtra – 5%
John Deere – 3% John Deere – 2%
Caterpillar – 3%
Other – 1%
19


Maxion Componentes Estruturais - Wheels R$ MM

NEW AGREEMENTS: R$ 27,7 MM per year
W HEEL C o u n tr y S t a r t in g D a t e A n n u a l S a le s
R$ M M
GKN E u ro p e / U S A S e p -0 3 1 5 ,7
S tip T u n is M a y -0 4 2 ,3
AGCO B r a z il J u n -0 3 1 ,5
D u n lo p S o u th A f r ic a J u n -0 4 1 ,5
K u rt L e y s e r C o rp . S o u th A f r ic a A p r-0 4 1 ,5
J o h n D e e re B r a z il J u l- 0 3 1 ,1
Ins ak S in g a p o r e J u n -0 3 1 ,0
MAAP M o ro c c o M a y -0 4 1 ,0
B r id g e s to n e S p a in F e b -0 4 0 ,8
C o n tin e n ta l G e rm a n y J u n -0 3 0 ,7
K r is ta n a s S p ir o s G re e c e J u l- 0 4 0 ,6

20

Subsidiaries : MAXION COMPONENTES AUTOMOTIVOS

16%


Maxion Componentes Automotivos

22


Maxion Componentes Automotivos R$ MM

150
Net Sales
.
CA G R = 6,4% p.a 1 1 8 ,9
1 1 4 ,3
9 9 ,0 9 8 ,1
9 1 ,5 9 3 ,6
100

5,7%
Var % = 1
50 3 3 ,9
2 9 ,3

0
1999 2000 2001 2002 2003 1Q04 LTM 1Q03 1Q04

23



Market Share % 1Q04 1Q03

W indow Raiser 43% 42%

Hand Brake Lever 44% 44%

Lock 10% 13%

Knob/Key/Cylinder (KKC) 10% 9%

Jack 17% 14%
24



1Q04 – R$ 33,9MM 1Q03 – R$ 29,3 MM

General General
Motors Motors
27% 21%
Volks-
Volks- 19% wagen
wagen
15%

31% 31%
9%
14% Fiat SAS
SAS 7%
Fiat 6% 7% 5% 8% Ford
After Ford Other After
Market Market

25


Maxion Componentes Automotivos R$ MM

New Agreements: R$ 10,7 MM per year

M odel P ro d u c t S t a r t in g A n n u a l S a le s
D a te R$ M M
T ru c k - V W W in d o w R a is e r / K K C / L a tc h e s J u n .0 5 7 ,3
A c e llo - D a im le r C h r y s le r W in d o w R a is e r /S ta m p e d P a r ts J u n .0 3 1 ,4
Fox - VW J ac ks O u t.0 3 0 ,9
C e lta - G M W in d o w R a is e r M a i.0 4 0 ,8
P ic k - u p M o n ta n a L a tc h N o v .0 3 0 ,3

26


Brazilian market of railroad equipment

Sales 1Q04 1Q03 Var%

Railroad Cars – units 1.053 405 160%

Railroad Wheels – units 6.535 14.167 (54%)

Railroad Castings – ton 768 316 143%

Do not include railroad wheels and castings used to assemble the railroad cars

27

Joint venture:
AMSTED MAXION FUNDIÇÃO E EQUIPAMENTOS FERROVIÁRIOS

26%


Amsted Maxion

29


Amsted Maxion R$ MM

Net Sales 376
400
.
p.a 3 2 8 ,1
%
8,4
300
R =3
C AG
%
200 7 8,2
=
%
1 2 1 ,6
1 0 9 ,5
1 2 0 ,4 Var 1 0 9 ,4
9 4 ,5
100 6 1 ,4

0
1999 2000 2001 2002 2003 1Q04 LTM 1Q03 1Q04

30


Amsted Maxion

Market Share % 1Q04 1Q03

Railroad Cars 80% 83%

Railroad W heels 40% 40%

Railroad Castings 80% 80%

Industrial Castings 50% 60%

31


Amsted Maxion

1Q04 – R$ 54,7MM(*) 1Q03 – R$ 30,7 MM(*)

CVRD CVRD
78%
67%

16%
9% 1% Export
5 % 4 %4 % 9% 7%
Export
MRS
Other MRS
Caterpillar Other Caterpillar
(*) represents 50% of the total sales of Amsted Maxion

32


Amsted Maxion R$ MM

Spot Orders : R$ 490,0 MM

CVRD / FCA – 2.878 cars

MRS - 630 cars Deliveries

ADM - 140 cars Up to March 31 – 842 cars

Mineração Serra To be done in 2004 – 2.848
do Sossego - 42 cars cars and 50 boxes

MRS / ALL - 50 boxes

Total = 3.690 cars e 50 boxes

33


Amsted Maxion R$ MM

Recurring Orders : R$ 91,1 MM Annual

ASF-Amsted (USA) – railroad castings - R$ 34,2MM

ConMet-Amsted (USA) – fifth-wheels component - R$ 11,0MM

Caterpillar (Brazil) – tractor parts - R$ 15,5MM

Caterpillar (USA) – tractors parts - R$ 25,9MM

Metso (France) – industrial castings - R$ 3,0MM

Komatsu / CNH (USA and Italy) – industrial castings - R$ 1,5MM

34


Consolidated

1Q04 – R$ 212,9 MM 1Q03 – R$ 148,3 MMM
Volks- Daimler Volks- Daimler
wagen Chrysler wagen Chrysler
Export 12% 9% General 15% 9% General
Motors Export Motors
8% 8%
13% Tractors Tractors
7% 6%
16%
5 % After 6% After
Market Market
5% 6%
20% Fiat Fiat
14%
CVRD 21% CVRD 20%

Other Other

36


Revenue Breakdown by segment %

Customers 1Q04 1Q03

OEMs installed in the country 64% 67%

- Bus, truck and utility vehicle 48% 47%
- Car 16% 20%

Brazilian Railroad Operators 23% 17%

Export 13% 16%

37


Export Breakdown by Segment %

1Q04 – US$ 9,7MM / R$ 28,1MM 1Q03 – US$ 6,9MM / R$ 24,2MM

Wheels Wheels

Chassis
59%
54%
25%
22% Chassis

1% 18% 1% 20%
Railroad
Autom. Railroad Autom. Equipment
Comp. Equipment Comp.

38


Export Breakdown by Region %

1Q04 – US$ 9,7MM / R$ 28,1MM 1Q03 – US$ 6,9MM / R$ 24,2MM

Canada
Canada
Mexico
20% Mexico 25%
2%
4% South
South 1 8 % America
18% America
USA 3 6 %
28% 6%
1% USA Asia /
10% Asia / Oceania
Oceania 13%
11% 8%
Europe
Europe
Africa / Africa /
Midlle East Midlle East
Import 1Q04 Import 1Q03
US$ 2,0MM/R$ 5,9MM US$ 1,9MM/R$ 6,6MM
39


Income Statement R$ MM

1Q 04 % V .L . 1Q 03 % V .L . V a r. %
N e t S a le s 2 1 2 .8 7 2 1 0 0 ,0 % 1 4 8 .2 9 9 1 0 0 ,0 % 4 3 ,5 %
C o s t o f G o o d s S o ld (1 7 4 . 1 9 5 ) -8 1 ,8 % (1 1 2 . 6 4 2 ) -7 6 ,0 % 5 4 ,6 %

G r o ss P r o fit 3 8 .6 7 7 1 8 ,2 % 3 5 .6 5 7 2 4 ,0 % 8 ,5 %

O P E R A T IO N A L E X P E N S E S
S a le s (1 1 . 5 7 5 ) -5 , 4 % (9 .1 9 2 ) -6 , 2 % 2 5 ,9 %
G e n e ra l (9 .7 7 0 ) -4 , 6 % (7 .3 7 3 ) -5 , 0 % 3 2 ,5 %
O th e r 918 0 ,4 % (4 1 5 ) -0 , 3 % -3 2 1 , 2 %
(2 0 . 4 2 7 ) -9 , 6 % (1 6 . 9 8 0 ) -1 1 ,4 % 2 0 ,3 %

R e su l t b e fo r e fi n a n c i a l e x p e n se s 1 8 .2 5 0 8 ,6 % 1 8 .6 7 7 1 2 ,6 % -2 , 3 %

N e t F in a n c ia l E x p e n s e s (8 .5 9 7 ) -4 , 0 % (1 1 . 3 1 2 ) -7 , 6 % -2 4 ,0 %

O p e r a ti o n R e su l t 9 .6 5 3 4 ,5 % 7 .3 6 5 5 ,0 % 3 1 ,1 %

N o n -o p e r a ti o n a l R e su l t (1 .6 3 4 ) -0 , 8 % (2 8 6 ) -0 , 2 % 4 7 1 ,3 %

R e su l t b e fo r e i n c o m e ta x a n d p r o fi t sh a r i n g 8 .0 1 9 3 ,8 % 7 .0 7 9 4 ,8 % 1 3 ,3 %

In c o m e T a x a n d P r o fi t S h a r i n g (5 .9 2 5 ) -2 , 8 % (3 .7 1 5 ) -2 , 5 % 5 9 ,5 %

N e t In c o m e 2 .0 9 4 1 ,0 % 3 .3 6 4 2 ,3 % -3 7 ,8 %

E B IT D A 2 5 .8 3 2 1 2 ,1 % 2 6 .8 0 0 1 8 ,1 % -3 , 6 %

40


Bank Debt Breakdown by Facility Type – Mar04 R$ MM

SHORT LONG
TYPE TERM TERM
TOTAL

Local Bonds 2 3 ,1 2 5 ,4 4 8 ,5
T r a d e F in a n c e / A C C / R e s . 2 7 7 0 5 2 ,6 1 6 ,0 6 8 ,6
F in a m e / B N D E S / B D M G / E X IM 1 2 ,0 4 1 ,9 5 3 ,9
O t h e r L o a n s in lo c a l c u r r e n c y 1 ,4 1 ,4
8 9 ,1 8 3 ,3 1 7 2 ,4

( - ) C a s h a n d m a r k e t a b le s e c u r it ie s 2 6 ,6 3 ,0 2 9 ,6

Net Bank Debt 6 2 ,5 8 0 ,3 1 4 2 ,8

41


Bank Debt Breakdown by Denomination – Mar04 %

TJLP
29%

Dollar INPC
31% 28%

3% 9%

IGPM CDI

42


Consolidated Exposure to Foreign Currency – Mar04 US$ MM

B a la n c e S h e e t

A s s e ts d e n o m in a te d in fo re ig n c u rre n c y
. M a r k e t a b l e S e c u r it ie s / In v e s t m e n t s 3 ,2
. A c c o u n t s R e c e iv a b l e 4 ,2
7 ,4

L ia b ilitie s d e n o m in a te d in fo re ig n c u rre n c y
. B a n k D e b t (A C C / R e s . 2 7 7 0 ) (1 7 ,0 )
. A c c o u n ts P a y a b le (3 ,5 )
(2 0 ,5 )

N e t P o s itio n (1 3 ,1 )

43


Stock Performance

R$ T HO U.
R$ / T HO U. A
2 3 .8 8 1 1 2 0 ,0
2 4 .0 0 0 V O L U M E / M O N T H L Y A V G . P R IC E
1 0 5 ,0
IO C H P E - M A X IO N P N (M Y P K 4 ) 9 7 ,9 8
2 0 .0 0 0 9 4 ,1 8 9 0 ,0
8 0 ,9 8 0 ,4
1 6 .0 0 0 8 4 ,3 7 5 ,0
7 9 ,6 3
A V G . P R IC E 6 0 ,0
5 1 ,9 V O LUME
1 2 .0 0 0
4 5 ,0
8 .0 0 0
2 4 ,7 2 7 ,6 4 .0 9 4 3 0 ,0
2 6 ,8 2 5 ,2 2 6 ,8 2 6 ,4 3 .6 8 9 3 .1 9 7
4 .0 0 0 2 3 ,5 2 4 ,2 2 5 ,1
1 .3 9 8 758 895 1 5 ,0
35 115 104 50 50 125 177 312 136
- -
3
03

03

04
3
03
03

3

04

4
l- 0
3
02

03

03

03

03
t -0
-0

-0
-0
n-

n-

n-
r-
b-

b-
c-

g-

p-

v-

c-
ju
ar

ar
ay

oc
ap
ja

ju

ja
fe

fe
de

au

se

no

de
m

m
m

44


Benchmark – Gross Profit % net sales

G e n te x
E a to n
S tr a tte c
B o rg W a rn e r
F e d e ra l M o g u l
Io c h p e - M a x i o n
V a le o
C u m m in s
T i ta n
Te nne co
A m e r i c a n A x le
A u t o li v
J o h n s o n C o n t r o ls
D u ra
S u p e rio r
A r v i n M e r i to r
D a na
Lear
Tower
V i s te o n
D e lp h i
In t e r m e t

0% 10% 20% 30% 40%

1Q 04 1Q 03 A v e ra g e = 1 5 %

Source: Companies releases
2004 first 3 months results of each company, except fot Strattec with 9 months result, ArvinMeritor and
Johnson Controls with 6 months.

46


Benchmark – EBIT % net sales

G e n te x
S tr a tte c
B o rg W a rn e r
E a to n
A u to li v
S u p e rio r
T i ta n
D u ra
J o h n s o n C o n tr o ls
D a na
C u m m in s
Lear
Tow er
Te nne co
D e lp h i
In te r m e t
V i s te o n
-5 % 5% 15% 25% 35%

A ve ra g e = 7 %
1Q04 1Q 03


47


Benchmark – EBITDA % net sales

S tr a tte c
A u t o li v
B o rg W a rn e r
T i ta n
D u ra
Tow er
D a na
Te nne co
In t e r m e t
C u m m in s
J o h n s o n C o n t r o ls
Lear
V i s te o n
D e lp h i
0% 5% 10% 15% 20% 25%

1Q 04 1Q 03
A ve ra g e = 1 0 %


48


Outlook

Revenue trend:
(+) new supply agreements
(+) local market growth at agricultural machinery, truck, bus and railroad
equipment
(+) export growth
(=) stability at local market of passenger cars
Operational performance maintenance
(+) scale gains
(+) on-going cost reduction programs
(-) cost increase in non-negotiable costs (energy, wages, raw material)
Capital structure maintenance

50


www.iochpe-maxion.com.br/rao

51

Iochpe-Maxion - 1Q04 Presentation

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