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Iochpe-Maxion - 2Q08 Presentation

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2nd Quarter 2008 Presentation

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Iochpe-Maxion - 2Q08 Presentation

  1. 1. EARNINGS RELEASE – 2Q08 EARNINGS RELEASE – 2Q08 July, 2008
  2. 2. 2Q08 July, 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. 2Q08 July, 2008 SIMPLIFIED CORPORATE STRUCTURE* Iochpe-Maxion S.A. Iochpe- 50% 100% 100% R$ 131.7 million1 (30%) R$ 277.5 million1 (63%) R$ 32.9 million1 (7%) Amsted-Maxion Fundição e Amsted- Automotive Components Wheels and Chassis Division Equipamentos Ferroviários S.A. Division Wheels: R$ 114.4 million1 (26%) Railway Freight Cars: R$ 95.9 million1 (22%) Hand Brake Leaver and Pedal Sets: R$ 12.1 million1 (3%) Structural Stamped Parts: R$ 6,6 million1 (2%) Castings: R$ 30.1 million1 (7%) Chassis: R$ 163.1 million1 (37%) Wheels: R$ 5.7 million1 (1%) 1 Consolidated net revenue in the * Consider the grouping of Maxion Sistemas Automotivos by Iochpe-Maxion, approved in a Extraordinary Shareholders Meeting on 01/07/2008 second quarter of 2008 3
  4. 4. 2Q08 July, 2008 HIGHLIGHTS – 2Q08 Consolidated net operating revenue of R$ 442.1 million, an increase of 38.6% over the same period of last year EBITDA(*) of R$ 71.9 million, an increase of 97.3% when compared with the same period of last year Net income of R$ 44.1 million, an increase of 217.5% over the same period of last year Net debt bank of R$ 198.9 million (R$ 164.0 million on Jun/07), or 0.9x EBITDA LTM(*) (1.2x on Jun/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. 2Q08 July, 2008 2Q08 – 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 (1.6362 – 2Q08 x 1.9630 – 2Q07) on net revenue of exports (reduction of R$ 10.2 million) Reduction of exports: US$ 31.2 million on 2Q08 x US$ 33.8 million on 2Q07 (12% of net revenue on 2Q08 x 21% on 2Q07) 5
  6. 6. 2Q08 July, 2008 AWARD Abrasca (Brazilian Association of Public Companies) Award for Value Creation Iochpe-Maxion was awarded for the outstanding performance in Value Creation in 2007 among the companies in the Machinery and Equipments sector, according to the Public Companies Statistics Yearbook - 2008 1st place in value creation among public companies in 60 months, according to the Public Companies Statistics Yearbook - 2008 6
  7. 7. Industry Performance
  8. 8. 2Q08 July, 2008 LIGHT COMMERCIALS – BRAZIL (‘000 units) 408 379 Production 366 2Q08 – 07 = 21.8% 318 1H08 – 07 = 22.5% CAGR 2003 – 07 = 17.2% 225 216 184 156 153 144 Export 114 119 2Q08 – 07 = (10.6%) 97 1H08 – 07 = (6.2%) 72 68 64 CAGR 2003 – 07 = 18.9% 38 34 2003 2004 2005 2006 2007 1H07 1H08 2Q07 2Q08 Production Export Source: Anfavea 8
  9. 9. 2Q08 July, 2008 TRUCKS – BRAZIL (‘000 units) 137 Production 117 2Q08 – 07 = 22.2% 107 106 1H08 – 07 = 27.4% CAGR 2003 – 07 = 14.8% 79 79 62 Export 39 41 42 2Q08 – 07 = (4.7%) 38 34 1H08 – 07 = 0.1% 25 19 19 CAGR 2003 – 07 = 33.3% 13 11 10 2003 2004 2005 2006 2007 1H07 1H08 2Q07 2Q08 Production Export Source: Anfavea 9
  10. 10. 2Q08 July, 2008 BUSES – BRAZIL (‘000 units) 39 Production 35 2Q08 – 07 = 16.6% 34 1H08 – 07 = 20.3% 29 27 CAGR 2003 – 07 = 9.6% 23 19 19 16 15 Export 13 13 2Q08 – 07 = 6.3% 11 9 1H08 – 07 = 13.3% 8 7 CAGR 2003 – 07 = 13.6% 4 4 2003 2004 2005 2006 2007 1H07 1H08 2Q07 2Q08 Production Export Source: Anfavea 10
  11. 11. 2Q08 July, 2008 AGRICULTURAL MACHINERY – BRAZIL (‘000 units) 69 65 Production 59 2Q08 – 07 = 25.9% 53 1H08 – 07 = 38.8% CAGR 2003 – 07 = 2.5% 46 40 31 31 29 27 Export 21 22 21 2Q08 – 07 = 16.6% 17 1H08 – 07 = 26.5% 15 12 8 CAGR 2003 – 07 = 6.5% 7 2003 2004 2005 2006 2007 1H07 1H08 2Q07 2Q08 Production Export Source: Anfavea 11
  12. 12. 2Q08 July, 2008 PASSENGER CARS – BRAZIL (‘000 units) Production 2,389 2Q08 – 07 = 23.1% 2,092 1H08 – 07 = 20.9% 2,009 1,757 CAGR 2003 – 07 = 12.2% 1,505 1,353 1,119 Export 2Q08 – 07 = (3.1%) 684 721 635 586 585 1H08 – 07 = (2.6%) 497 440 CAGR 2003 – 07 = 7.4% 284 277 143 139 2003 2004 2005 2006 2007 1H07 1H08 2Q07 2Q08 Production Export Source: Anfavea 12
  13. 13. 2Q08 July, 2008 RAILWAY FREIGHT CARS – BRAZIL (units) 7,270 Production 2Q08 – 07 = 1,368.4% 5,642 1H08 – 07 = 1,031.1% CAGR 2003 – 07 = (15.6%) 3,668 2,692 2,459 1,439 1,249 238 98 2003 2004 2005 2006 2007 1H07 1H08 2Q07 2Q08 Sales Source: Amsted Maxion estimate 13
  14. 14. 2Q08 July, 2008 MARKET SHARE – BRAZIL (1H08) Commercial Vehicles Railway Freight Railway Chassis Wheels Cars Castings Maxion Maxion Maxion 80% 68% 97% 62% Maxion 20% 33% Dana Borlem 12% 5% 3% 20% OEM Others Cruzaço Others Maxion 67% 62% 65% 80% 1H07 Source: Maxion Estimate 14
  15. 15. Financial and Operating Performance
  16. 16. 2Q08 July, 2008 NET OPERATING REVENUE (R$ million) 1,494 Net Operating Revenue 1,289 2Q08 – 07 = 38.6% 1,248 1H08 – 07 = 39.3% 1,099 CAGR 2003 – 07 = 17.5% 843 676 605 442 319 2003 2004 2005 2006 2007 1H07 1H08 2Q07 2Q08 16
  17. 17. 2Q08 July, 2008 NET OPERATING REVENUE (R$ million) Revenue by Market Revenue by Division / Business 442 442 132 51 319 319 62 33 66 27 163 391 132 253 97 114 2Q07 2Q08 2Q07 2Q08 Domestic Export Wheels Chassis Automotive Comp. Amsted Maxion Domestic: 2Q08 – 07 = 54.8% Wheels: 2Q08 – 07 = 17.4% Chassis: 2T08 – 07 = 23.4% Export: 2T08 – 07 = (23.0%) Automotive Comp.: 2Q08 – 07 = 20.7% Amsted Maxion: 2Q08 – 07 = 112.1% 17
  18. 18. 2Q08 July, 2008 NET OPERATING REVENUE Revenue by Customer – 2Q07 Revenue by Customer – 2Q08 Ford Others Fiat 4% Others Fiat 4% GMB Agricultural 5% Ford 11% 7% Agricultural 6% Mach. 4% GMB Mach. 7% 5% 7% After Market 3% After Market Daim ler Daim ler 4% 14% 12% Export 12% Scania Caterpillar Scania 5% Export 1% Volvo 6% 20% 3% Volvo 2% Vale Caterpillar 11% 1% VW VW 14% MRS MRS 16% ALL 2% 10% 1% Vale ALL 2% 1% 18
  19. 19. 2Q08 July, 2008 EXPORTS (USD million) 119 120 Exports 2Q08 – 07 = (7.5%) 96 1H08 – 07 = (1.4%) CAGR 2003 – 07 = 38.1% 64 63 47 33 34 31 2003 2004 2005 2006 2007 1H07 1H08 2Q07 2Q08 19
  20. 20. 2Q08 July, 2008 EXPORTS BY DIVISION / BUSINESS R$ thousand US$ thousand 66 51 34 36 31 22 18 13 0 0 10 10 0 0 6 5 20 19 11 10 2Q07 2Q08 2Q07 2Q08 Wheels Chassis Automotive Comp. Amsted Maxion Whees Chassis Automotive Comp. Amsted Maxion Variation 2Q8 - 07 = (23%) Variation 2Q8 - 07 = (8%) Wheels = (4.8%) Wheels = 14.3% Chassis = 3.0% Chassis = 23.0% Automotive Comp. = (13.8%) Automotive Comp. = 4.3% Amsted Maxion: = (40.0%) Amsted Maxion: = (27,8%) 20
  21. 21. 2Q08 July, 2008 GROSS PROFIT (R$ million) Gross Profit 2Q08 – 07 = 55.8% 1H08 – 07 = 51.6% CAGR 2003 – 07 = 14.6% 20% 21% 20% 20% 19% 18% 19% 18% 18% 228 289 236 219 112 170 137 90 58 2003 2004 2005 2006 2007 1H07 1H08 2Q07 2Q08 Gross Profit %NOR 21
  22. 22. 2Q08 July, 2008 OPERATING INCOME – EBIT (R$ million) Operating Income 2Q08 – 07 = 119.9% 1H08 – 07 = 101.3% CAGR 2003 – 07 = 23.5% 178 136 127 135 14% 14% 12% 12% 11% 10% 10% 9% 9% 117 63 58 58 29 2003 2004 2005 2006 2007 1H07 1H08 2Q07 2Q08 EBIT % NOR 22
  23. 23. 2Q08 July, 2008 EBITDA* (R$ million) EBITDA 2Q08 – 07 = 97.3% 1H08 – 07 = 82.8% CAGR 2003 – 07 = 16.7% 205 156 163 165 16% 16% 14% 14% 13% 13% 13% 12% 11% 89 133 73 72 36 2003 2004 2005 2006 2007 1H07 1H08 2Q07 2Q08 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. 2Q08 July, 2008 NET FINANCIAL EXPENSES (R$ million) Net Financial Expenses 2Q08 – 07 = (260.6)% 1H08 – 07 = (194.0%) CAGR 2003 – 07 = (28.4)% 6% 38 3% 37 2% 2% 33 1% 1% 1% 21 10 -1% 8 -1% 4 -8 -6 2003 2004 2005 2006 2007 1H07 1H08 2Q07 2Q08 Financial Exp. % NOR 24
  25. 25. 2Q08 July, 2008 NET INCOME (R$ million) Net Income 2Q08 – 07 = 217.5% 1H08 – 07 = 209.2% CAGR 2003 – 07 * = 196.2% 78 10% 9% 72 72 6% 5% 5% 5% 58 44 4% 4% 51 25 -1% 14 -5 2003 2004 2005 2006 2007 1S07 1S08 2T07 2T08 Lucro Líquido % ROL * Consider the absolute variation in the period 25
  26. 26. 2Q08 July, 2008 NET BANK DEBT (R$ million) 1.3 1.2 199 0.9 0.8 0.8 164 0.6 0.6 132 128 115 125 102 2003 2004 2005 2006 2007 1H07 1H08 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 EBITDA LTM
  27. 27. 2Q08 July, 2008 INDEBTEDNESS – JUN/08 (R$ million) LONG LINES SHORT TERM TOTAL TERM Debt Indexation Trade Finance / Export 28.3 48.2 76.5 Equipment Finance / EXIM 140.0 30.1 170.1 Local Currency 6.7 - 6.7 175.1 78.2 253.3 (-) Cash & Marketable Securities 54.4 - 54.4 77.2% Net Debt 120.7 78.2 198.9 Indexation Average Cost 18.6% Index in Reais 83% CDI 2.3% 1.8% Index by Dollar in US$ 6,3% per year TJLP Dollar CDI YUAN At the end of Jun/08, the company had consolidated contracts for US$ 53.7 million of Non Deliverable Forwards (NDFs) at R$ 1,8078 per USD average FX rate, for the period of Jul 08 to Jun 09 If the such NDFs were expired on June 30, 2008, the company would have posted a gain of R$ 8.3 million, which was accounted as a temporary Equity Reserve, according to the recent Brazilian law 11,638/07 27
  28. 28. 2Q08 July, 2008 CAPEX (R$ million) 84 73 68 68 54 44 35 28 12 2003 2004 2005 2006 2007 1H07 1H08 2Q07 2Q08 28
  29. 29. Capital Market
  30. 30. 2Q08 July, 2008 SHARES PERFORMANCE - LTM 40.00% 30.00% 20.00% 14.98% 10.45% 10.00% 10.73% 0.00% Aug-07 Sep-07 Oct-07 Nov-07 Dec-07 Jan-08 Feb-08 Mar-08 Apr-08 May-08 Jun-08 Jul-08 -10.00% MYPK3 IBOV IBX-100 Closing price of the last day of the month Jul/08 – closing price of 30 (R$ 34.00) 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) 30
  31. 31. 2Q08 July, 2008 AVERAGE DAILY TRADE VOLUME – R$ thousand 110 91 89 74 81 56 55 65 5,577 4,114 37 3,723 43 43 2,952 37 3,370 2,598 2,978 1,747 1,924 1,413 1,671 1,377 Aug-07 Sep-07 Oct-07 Nov-07 Dec-07 Jan-08 Feb-08 Mar-08 Apr-08 May-08 Jun-08 Jul-08 Volume Trades Jul/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. 2Q08 July, 2008 OUTLOOK Continued upside on domestic demand for vehicles and agriculture machinery Continued upside on domestic demand for railway freight cars Increase of production of commercial vehicle wheels plant in China in the third quarter of 2008 32
  33. 33. 2Q08 July, 2008 RESTRUCTURING An Extraordinary Shareholders Meeting held on July 1, 2008, approved the grouping of the subsidiary Maxion Sistemas Automotivos by Iochpe-Maxion, based on its book value 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 will generate a non-recurring gain of approximately R$76 million, upon the conclusion of such restructuring, foreseen for the third quarter 33
  34. 34. Additional Information
  35. 35. 2Q08 July, 2008 INCOME STATEMENT (R$ thousand) Consolidated Income Statement R$ 2Q08 N.O.R 2Q07 N.O.R 1H08 N.O.R 1H07 N.O.R thousand Net Operating Revenue 442,120 100.0% 318,963 100.0% 842,730 100.0% 605,117 100.0% Cost of Goods Sold (352,194) 79.7% (261,247) 81.9% (673,224) 79.9% (493,307) 81.5% Gross Profit 89,926 20.3% 57,716 18.1% 169,506 20.1% 111,810 18.5% Operating Expenses General and Administrative (12,110) 2.7% (10,831) 3.4% (23,902) 2.8% (23,256) 3.8% Commercial (15,259) 3.5% (15,669) 4.9% (30,411) 3.6% (29,099) 4.8% Others 803 -0.2% (2,400) 0.8% 1,379 -0.2% (1,537) 0.3% (26,566) 6.0% (28,900) 9.1% (52,934) 6.3% (53,892) 8.9% Operating Income (EBIT) 63,360 14.3% 28,816 9.0% 116,572 13.8% 57,919 9.6% Financial Results Financial Revenue 17,233 3.9% 9,034 2.8% 26,512 3.1% 13,778 2.3% Financial Expenses (11,402) 2.6% (12,665) 4.0% (18,746) 2.2% (22,039) 3.6% 5,831 -1.3% (3,631) 1.1% 7,766 -0.9% (8,261) 1.4% Earnings After Financial Income 69,191 15.6% 25,185 7.9% 124,338 14.8% 49,657 8.2% Non Operating Results (761) 0.2% (2,605) 0.8% (2,030) 0.2% (6,873) 1.1% Earnings Before Taxes 68,430 15.5% 22,580 7.1% 122,308 14.5% 42,784 7.1% Income Taxes (24,340) 5.5% (8,693) 2.7% (44,085) 5.2% (17,483) 2.9% Net Income 44,090 10.0% 13,887 4.4% 78,223 9.3% 25,301 4.2% EBITDA* 71,848 16.3% 36,417 11.4% 133,110 15.8% 72,807 12.0% (*) 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. 2Q08 July, 2008 BALANCE SHEET (R$ thousand) ASSETS LIABILITIES Jun-08 Jun-07 Jun-08 Jun-07 CURRENT CURRENT Cash 54,378 46,457 Loans 175,060 83,451 Receivables 227,558 156,345 Payables 98,206 72,322 Inventory 220,105 146,990 Customers Advance 18,691 15,885 Recoverable Taxes 18,599 21,685 Wage and Charges 53,312 39,093 Others 19,149 18,240 Taxes 12,853 5,663 539,789 389,717 Dividends 172 153 Others 21,954 21,817 380,248 238,384 LONG TERM LONG TERM Receivable 690 932 Loans 78,243 127,062 Deferred Income Taxes 19,367 24,958 Provisions 58,426 58,226 Others 21,935 24,278 Others 6,199 12,226 41,992 50,168 142,868 197,514 MINORITY - - PERMANENT EQUITY Intangible 4,090 Investments 359 359 Capital 261,463 161,463 Plants, Property and Equipment 329,418 284,842 Capital Reserves 56,156 103,472 Deferred Items 3,310 1,048 Retained Earnings 78,223 25,301 337,177 286,249 395,842 290,236 TOTAL ASSETS 918,958 726,134 TOTAL LIABILITIES 918,958 726,134 36
  37. 37. 2Q08 July, 2008 SHAREHOLDERS STRUCTURE Shareholders Structure on 6/30/2008 Shareholder Shares % IOSCHPE FAMILY 13,942,006 29.4% BNDESPAR 11,593,401 24.4% CONTROLLING SHAREHOLDERS 25,535,407 53.8% OTHER 21,896,279 46.2% TOTAL 47,431,686 100.0% 37
  38. 38. EARNINGS RELEASE – 2Q08 EARNINGS RELEASE – 2Q08 July, 2008

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