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Iochpe-Maxion - 1Q08 Results Presentation

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1st Quarter 2008 Presentation

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Iochpe-Maxion - 1Q08 Results Presentation

  1. 1. EARNINGS RELEASE – 1Q08 May, 2008
  2. 2. 1Q08 May, 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
  3. 3. 1Q08 May, 2008 SIMPLIFIED CORPORATE STRUCTURE Iochpe-Maxion S.A. Iochpe- 50% 100% Amsted-Maxion Fundição e Amsted- Maxion Sistemas Automotivos Equipamentos Ferroviários S.A. Ltda. R$ 109.7 million1 (27%) R$ 259.6 million1 (65%) Railway Equipments Automotive Components Wheels and Chassis Division Division Railway freight cars: R$ 76.8 million1 (19%) Wheels: R$ 106.4 million1 (27%) Autoparts: R$ 31.4 milhões1 (8%) Castings: R$ 25.3 million1 (6%) and wheels: R$ 7.6 million1 (2%) Chassis: R$ 153.2 million1 (38%) 1 Consolidated net revenue in the first quarter of 2008 3
  4. 4. 1Q08 May, 2008 HIGHLIGHTS – 1Q08 Consolidated net operating revenue of R$ 400.6 million, an increase of 40,0% over the same period of last year EBITDA(*) of R$ 61.3 million, an increase of 70.4% when compared with the same quarter of last year Net income of R$ 34.7 million, an increase of 203.7% over the same period of last year Net debt bank of R$ 161.9 million (R$ 150.1 million in Mar, 07), or 0.9x EBITDA LTM(*) (1.0x in Mar, 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
  5. 5. 1Q08 May, 2008 1Q08 – 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 (1.7309 – 1Q08 x 2.0978 – 1Q07) on net revenue of exports (reduction of R$ 11.3 million) 5
  6. 6. Industry Performance
  7. 7. 1Q08 May, 2008 LIGHT COMMERCIALS – BRAZIL (‘000 units) = 17% 3 – 07 CA GR 0 = 19% 6 = 8% 3 – 07 07 - 0 CA GR 0 07 – 06 = (6% ) 408 379 366 318 – 07 = 21% 216 1Q08 1Q08 – 07 = 156 153 (1%) 144 114 105 87 72 30 30 2003 2004 2005 2006 2007 1Q07 1Q07 Source: Anfavea Production Export 7
  8. 8. 1Q08 May, 2008 TRUCKS – BRAZIL (‘000 units) % 07 = 15 R 03 – CAG % 07 = 33 = 29% R 03 – 07 – 06 CAG = 8% 07 – 06 137 117 107 106 07 = 33% 79 1Q08 – 7=3 % 1Q08 – 0 39 41 38 37 28 25 13 8 8 2003 2004 2005 2006 2007 1Q07 1Q07 Source: Anfavea Production Export 8
  9. 9. 1Q08 May, 2008 BUSES – BRAZL (‘000 units) 0% 7=1 R 03 – 0 CAG = 14% – 07 15% R 03 07 – 06 = CAG 07 – 06 = 6 % 39 35 34 29 27 % 07 = 27 1Q08 – 19 % 07 = 29 16 1Q08 – 15 13 11 9 9 3 3 2003 2004 2005 2006 2007 1Q07 1Q08 Source: Anfavea Production Export 9
  10. 10. 1Q08 May, 2008 AGRICULTURAL MACHINERY – BRAZIL (‘000 units) 3 – 07 = 2% CAGR 0 03 – 07 = 6% = 41% CAGR 07 – 06 = 24% 69 07 – 06 65 59 53 46 6% 7=5 1Q08–0 0% 31 31 – 07 = 4 27 1Q08 21 22 19 12 7 5 2003 2004 2005 2006 2007 1Q07 1Q08 Source: Anfavea Production Export 10
  11. 11. 1Q08 May, 2008 PASSENGER CARS – BRAZIL (‘000 units) 2% 03 – 07 = 1 CAGR % 03 – 07 = 7 CAGR 07 – 06 = 14% 07 – 06 = (8%) 2,389 2,092 2,009 1,757 % 07 = 18 1Q08 – 1,505 1Q08 – 07 = (4 %) 684 635 630 586 534 497 440 141 136 2003 2004 2005 2006 2007 1Q07 1Q08 Source: Anfavea Production Export 11
  12. 12. 1Q08 May, 2008 RAILWAY FREIGHT CARS – BRAZIL (units) CAGR 0 3 – 07 = ( 1 6%) 7,270 5,642 07 – 0 6 = (66 %) 3,668 795% 07 = 2,459 1Q08 – 1,249 1,253 140 2003 2004 2005 2006 2007 1Q07 1Q08 Source: Amsted Maxion estimate Sales 12
  13. 13. 1Q08 May, 2008 MARKET SHARE – BRAZIL (1Q08) Commercial Vehicles Railway Freight Railway Chassis Wheels Cars Castings Maxion Maxion Maxion 86% 80% 67% 63% Maxion 26% 32% Dana 7% 5% Borlem 20% 14% OEM Others Others Cruzaço Maxion 68% 62% 100% 80% 1Q07 Source: Maxion Estimate 13
  14. 14. Financial and Operating Performance
  15. 15. 1Q08 May, 2008 NET OPERATING REVENUE (R$ million) 8% 7=1 3–0 CA GR 0 3% 07 – 06 = 1,099 1,494 1,248 1,289 =4 0% – 07 1Q08 676 401 286 2003 2004 2005 2006 2007 1Q07 1Q08 15
  16. 16. 1Q08 May, 2008 NET OPERATING REVENUE (R$ million) Revenue by Market Revenue by Division / Business 401 401 55 72% 110 286 286 (12%) 13% 31 64 62 28 39% 153 346 55% 111 224 27% 84 106 1Q07 1Q08 1Q07 1Q08 Domestic Export Wheels Chassis Automotive Comp. Amsted Maxion 16
  17. 17. 1Q08 May, 2008 NET OPERATING REVENUE Revenue by Customer 22% 15% 16% 13% 13% 14% 13% 9% 9% 9% 6% 7% 7% 6% 5% 5% 4% 4% 4% 4% 3% 2% 2% 1% 2% 2% 2% 1% Daimler Scania Volvo VW GM Ford Fiat Vale ALL MRS Caterpillar Export Agricultural Others Mach. 1Q07 1Q08 17
  18. 18. 1Q08 May, 2008 EXPORTS (USD million) 1% 07 – 06 = 8% 07 =3 3– G R0 CA 96 119 120 07 = 5% 1Q08 – 47 33 30 31 2003 2004 2005 2006 2007 1Q07 1Q08 18
  19. 19. 1Q08 May, 2008 EXPORTS BY DIVISION / BUSINESS R$ thousand US$ thousand 62 (12)% 55 5% 31 30 34 18 0 10 16 0 0 16 9 9 0 4 19 20 12 9 1Q07 1Q08 1Q07 1Q08 Wheels Chassis Automotive Comp. Amsted Maxion Wheels Chassis Automotive Comp. Amsted Maxion 19
  20. 20. 1Q08 May, 2008 EXPORTS BY DESTINATION 54% 44% 24% 22% 15% 9% 8% 6% 5% 5% 4% 3% 2% 0% Africa / Midle East Latin America Asia / Oceanic Canada United States Europe Mexico 1Q07 1Q08 20
  21. 21. 1Q08 May, 2008 GROSS PROFIT (R$ million) 20% 21% 20% 19% 18% 19% 18% 228 289 236 219 137 80 50 2003 2004 2005 2006 2007 1Q07 1Q08 Gross Profit % NOR 21
  22. 22. 1Q08 May, 2008 OPERATING INCOME – EBIT (R$ million) 12% 12% 11% 13% 10% 10% 9% 178 127 136 135 58 53 29 2003 2004 2005 2006 2007 1Q07 1Q08 EBIT % NOR 22
  23. 23. 1Q08 May, 2008 EBITDA* (R$ million) 14% 13% 13% 15% 13% 14% 13% 205 156 163 165 89 61 36 2003 2004 2005 2006 2007 1Q07 1Q08 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. 23
  24. 24. 1Q08 May, 2008 NET FINANCIAL EXPENSES (R$ million) 6% 3% 2% 2% 2% 1% 38 33 37 21 -1% 10 5 -2 2003 2004 2005 2006 2007 1Q07 1Q08 Financial Exp. % NOR 24
  25. 25. 1Q08 May, 2008 NET INCOME (R$ million) 72 9% 72 58 51 6% 5% 5% 5% 4% 35 -1% 11 (5) 2003 2004 2005 2006 2007 1Q07 1Q08 Net Income % NOR 25
  26. 26. 1Q08 May, 2008 NET BANK DEBT (R$ million) 1.3 1.0 0.9 0.8 0.8 162 0.6 0.6 150 132 128 115 125 102 2003 2004 2005 2006 2007 1Q07 1Q08 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. 26
  27. 27. 1Q08 May, 2008 INDEBTEDNESS – MAR/08 (R$ million) SHORT LONG LINES TOTAL TERM TERM Debt Indexation Trade Finance / Export 37.2 37.7 74.9 Equipment Finance / EXIM 147.2 41.3 188.5 184.4 79.0 263.4 (-) Cash & Marketable Securities 101.5 - 101.5 Net Debt 82.9 79.0 161.9 81% Indexation Average Cost Index by TJLP, CDI and IGP-M in 16% 85% CDI R$ Index by Dólar in US$ 7.2% per year 2% 1% TJLP Dollar IGP-M YUAN At the end of Mar 08, the company had consolidated contracts for US$ 64.2 million of non-deliverable forward operations at R$ 1.8809 per USD average FX rate, for the period of Apr 08 to Mar 09 Forward positive operations to expire is not accounted, only the positive operations expired According to Brazilian GAAP, if at any end of a month a negative future result is foreseen on the operations, the full negative future result must be provisioned at that time, using the average month value of the operations to expire 27
  28. 28. 1Q08 May, 2008 CAPEX (R$ million) 84 73 68 68 54 20 16 2003 2004 2005 2006 2007 1Q07 1Q08 28
  29. 29. Capital Market
  30. 30. 1Q08 May, 2008 SHARES PERFORMANCE - LTM 90.00% 80.00% 70.00% 60.00% 50.00% 48.88% 42.20% 40.00% 38.63% 30.00% 20.00% 10.00% 0.00% May-07 Jun-07 Jul-07 Aug-07 Sep-07 Oct-07 Nov-07 Dec-07 Jan-08 Feb-08 Mar-08 Apr-08 MYPK3 IBOV IBX-100 Closing price of the last day of the month Apr/08 – closing price of Apr, 30 (R$ 35.73) 30
  31. 31. 1Q08 May, 2008 AVERAGE DAILY TRADE VOLUME – R$ thousand 110 91 89 86 70 69 56 55 43 7,738 7,048 5,577 43 37 37 3,723 4,114 2,948 2,952 2,598 1,413 1,747 1,671 1,377 May-07 Jun-07 Jul-07 Aug-07 Sep-07 Oct-07 Nov-07 Dec-07 Jan-08 Feb-08 Mar-08 Apr-08 Volume Negócios Apr 08 – volume and trades until the 30th 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) 31
  32. 32. 1Q08 May, 2008 PERSPECTIVAS Strong domestic demand for vehicles and agriculture machinery Recovery of domestic demand for railway freight cars Start up of commercial vehicle wheels plant in China in the second quarter 32
  33. 33. 1Q08 May, 2008 Corporate Governance A Special Meeting of the Iochpe-Maxion’s preferred shareholders held on Jan 17, 2008 approved the conversion of the preferred shares to common shares in the proportion of 1.2 preferred shares for 1.0 common share On the same date an Extraordinary Shareholders Meeting approved the conversion and also approved the proposed amendment to the Company’s Bylaws to align them with the Novo Mercado trading segment of Bovespa The period during which dissenting shareholders could exercise their right to withdraw terminated on Feb 20, 2008 and no right to withdraw was exercised Iochpe-Maxion was listed on the Novo Mercado on Mar 24, 2008 Restructuring Iochpe-Maxion intend to carry out, over the next few months, the grouping of its subsidiary Maxion Sistemas Automotivos Ltda. This restructuring aims 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, which could generate a non-recurring gain of approximately R$76 million, upon the conclusion of such restructuring The grouping of Maxion Sistemas Automotivos Ltda. into Iochpe-Maxion will be implemented based on its book value On March 24, 2008, an Extraordinary Shareholder’s meeting approved the transfer of the company’s main address from the city of São Paulo to the municipality of Cruzeiro, state of São Paulo, where the headquarter of its subsidiary Maxion Sistemas Automotivos is located 33
  34. 34. Additional Information
  35. 35. 1Q08 May, 2008 INCOME STATEMENT (R$ thousand) Consolidated Income Statement R$ 2007 N.O.R 2006 N.O.R thousand Net Operating Revenue 400,610 100.0% 286,154 100.0% Cost of Goods Sold (321,030) 80.1% (232,060) 81.1% Gross Profit 79,580 19.9% 54,094 18.9% Operating Expenses General and Administrative (11,792) 2.9% (12,425) 4.3% Commercial (15,152) 3.8% (13,430) 4.7% Others 576 -0.1% 863 -0.3% (26,368) 6.6% (24,992) 8.7% Operating Income (EBIT) 53,212 13.3% 29,103 10.2% Financial Results Financial Revenue 9,809 2.4% 4,744 1.7% Financial Expenses (7,344) 1.8% (9,374) 3.3% 2,465 -0.6% (4,630) 1.6% Earnings After Financial Income 55,677 13.9% 24,472 8.6% Non Operating Results (1,269) 0.3% (4,268) 1.5% Earnings Before Taxes 54,408 13.6% 20,204 7.1% Income Taxes (19,745) 4.9% (8,790) 3.1% Net Income 34,663 8.7% 11,414 4.0% EBITDA 61,261 15.3% 35,947 12.6% (*) 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. 35
  36. 36. 1Q08 May, 2008 BALANCE SHEET (R$ thousand) ASSETS LIABILITIES Mar-08 Mar-07 Mar-08 Mar-07 CURRENT CURRENT Cash 101,461 84,222 Loans 184,367 89,194 Receivables 198,930 145,213 Payables 77,669 64,344 Inventory 183,241 129,257 Customers Advance 27,708 18,177 Recoverable Taxes 32,645 19,295 Wage and Charges 39,456 29,397 Others 5,977 16,782 Taxes 12,798 7,511 522,254 394,769 Dividends 21,253 4,410 Others 26,785 18,272 390,036 231,305 LONG TERM LONG TERM Receivable 792 1,026 Loans 78,996 145,160 Deferred Income Taxes 19,268 18,899 Provisions 56,853 59,025 Others 11,975 28,697 Others 6,341 13,754 32,035 48,622 142,190 217,939 MINORITY - 14 PERMANENT EQUITY Investments 359 359 Capital 261,463 161,463 Plants, Property and Equipment 320,926 280,405 Capital Reserves 49,078 103,472 Deferred Items 1,856 1,452 Retained Earnings 34,663 11,414 323,141 282,216 345,204 276,349 TOTAL ASSETS 877,430 725,607 TOTAL LIABILITIES 877,430 725,607 36
  37. 37. 1Q08 May, 2008 SHAREHOLDERS STRUCTURE Shareholders Structure on 3/31/2008 Shareholder Common % TOTAL % IOSCHPE FAMILY 14,046,813 29.6% 14,046,813 29.6% BNDESPAR 11,593,401 24.4% 11,593,401 24.4% CONTROLLING SHAREHOLDERS 25,640,214 54.1% 25,640,214 54.1% OTHER 21,791,472 45.9% 21,791,472 45.9% TOTAL 47,431,686 100.0% 47,431,686 100.0% 37
  38. 38. EARNINGS RELEASE – 1Q08 May, 2008

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