Iochpe-Maxion - 4Q07 Presentation

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4th Quarter 2007 Presentation

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Iochpe-Maxion - 4Q07 Presentation

  1. 1. Earnings Release – 4Q07 / 2007 February, 2008
  2. 2. 4Q07/2007 February, 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. 4Q07/2007 February, 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$ 79.5 million1 (24%) R$ 220.3 million1 (67%) Railway Equipments Automotive Components Wheels and Chassis Division Division Railway freight cars: R$ 47.0 million1 (14%) Wheels: R$ 88.8 million1 (27%) Autoparts: R$ 28.7 milhões1 (9%) Castings: R$ 27.4 million1 (8%) and wheels: R$ 5.1 million1 (2%) Chassis: R$ 131.5 million1 (40%) 1 Consolidated net revenue in the fourth quarter of 2007 3
  4. 4. 4Q07/2007 February, 2008 HIGHLIGHTS Consolidated net operating revenue of R$ 328.5 million in 4Q07 and R$ 1,289.2 in 2007, an increase of 23.9% and 3.3% respectively, over the same period of last year EBITDA(*) of R$ 35.2 million in 4Q07 and R$ 164.5 million in 2007, an increase of 47.8% and 1.1% respectively, over the same period of last year Net income of R$ 17.0 million in 4Q07 and R$ 72.4 in 2007, an increase of 1,129.0% and 25.1% respectively, over the same period of last year Net debt bank of R$ 128.3 million (R$ 132.3 million in Dec/06), or 0.8x EBITDA LTM(*) (0.8x in Dec/06) (*) 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. 4Q07/2007 February, 2008 4Q07 – 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 (1.7665 – 4Q07 x 2.1499 – 4Q06) on net revenue of exports (reduction R$ 10.0 million) 5
  6. 6. Industry Performance
  7. 7. 4Q07/2007 February, 2008 LIGHT COMMERCIALS – BRAZIL (‘000 units) = 18% 2 – 07 CA GR 0 = 29% 6 = 8% 2 – 07 07 - 0 CA GR 0 07 – 06 = (6% ) 408 379 366 318 4Q07 – 06 = 20% 216 180 4Q07 – 0 6 = (7 %) 156 153 144 114 112 94 72 40 37 35 2002 2003 2004 2005 2006 2007 4Q06 4Q07 Source: Anfavea Production Export 7
  8. 8. 4Q07/2007 February, 2008 TRUCKS – BRAZIL (‘000 units) % 07 = 15 R 02 – CAG % 07 = 52 = 29% R 02 – 07 – 06 CAG = 8% 07 – 06 137 117 107 106 06 = 37% 4Q07 – 79 6 = 12% 69 4Q07 – 0 39 41 38 37 25 27 13 11 10 5 2002 2003 2004 2005 2006 2007 4Q06 4Q07 Source: Anfavea Production Export 8
  9. 9. 4Q07/2007 February, 2008 BUSES – BRAZL (‘000 units) % = 11 – 07 R 02 CAG = 25% – 07 07 – 06 = 15% R 02 CAG 07 – 06 = 6 % 39 35 34 29 27 % 06 = 54 4Q07 – 23 19 % 06 = 29 16 4Q07 – 15 13 9 9 7 6 5 4 2002 2003 2004 2005 2006 2007 4Q06 4Q07 Source: Anfavea Production Export 9
  10. 10. 4Q07/2007 February, 2008 AGRICULTURAL MACHINERY – BRAZIL (‘000 units) 2 – 07 = 5% CAGR 0 % = 41% 07 = 22 07 – 06 CAGR 02 – = 24% 69 07 – 06 65 59 52 53 46 3% 6=6 4Q07–0 9% 31 31 – 06 = 3 27 4Q07 21 22 17 10 11 8 5 2002 2003 2004 2005 2006 2007 4Q06 4Q07 Source: Anfavea Production Export 10
  11. 11. 4Q07/2007 February, 2008 PASSENGER CARS – BRAZIL (‘000 units) % 02 – 07 = 9 CAGR 0% 02 – 07 = 1 CAGR 07 – 06 = 14% 07 – 06 = (8%) 2,389 2,092 2,009 1,757 % 06 = 24 4Q07 – 1,521 1,505 4Q07 – 06 = (2 %) 684 635 633 586 497 513 440 363 147 144 2002 2003 2004 2005 2006 2007 4Q06 4Q07 Source: Anfavea Production Export 11
  12. 12. 4Q07/2007 February, 2008 RAILWAY FREIGHT CARS – BRAZIL (units) % = 34 – 07 R 02 7,270 CAG 5,642 07 – 0 6 = (66 %) 3,668 = 132% 2,459 – 06 4Q07 1,249 729 294 314 2002 2003 2004 2005 2006 2007 4Q06 4Q07 Production Source: Amsted Maxion estimate 12
  13. 13. 4Q07/2007 February, 2008 MARKET SHARE – BRAZIL (2007) Commercial Vehicles Railway Freight Railway Chassis Wheels Cars Castings Maxion Maxion Maxion 89% 80% 67% Maxion 61% 21% 33% Dana 12% 6% Borlem 20% 11% OEM Others Others Cruzaço Maxion 66% 57% 81% 80% 2006 Source: Maxion Estimate 13
  14. 14. Financial and Operating Performance
  15. 15. 4Q07/2007 February, 2008 NET OPERATING REVENUE (R$ million) 6% 7=2 2–0 CA GR 0 07 – 06 = 3% 1,494 1,248 1,289 4 % 1,099 – 06 = 2 4Q07 676 411 329 265 2002 2003 2004 2005 2006 2007 4Q06 4Q07 15
  16. 16. 4Q07/2007 February, 2008 NET OPERATING REVENUE (R$ million) 1,248 1,289 233 Customer - 2007 (%) 257 Others – 13.1% 1,056 Daimler – 13.6% 991 Caterpillar – 1.5% ALL – 0,7% Scania – 5.7% 2006 2007 MRS – 4.4% CVRD – 3.0% Domestic Export Volvo – 2.0% Tractors – 6.9% 1,248 1,289 90 115 Volkswagen – 16.8% 730 896 Export – 18.1% GMB – 5.8% 427 279 Ford – 3.9% Fiat – 4.5% 2006 2007 16 Railway Wheels and Chassis Automotive Comp.
  17. 17. 4Q07/2007 February, 2008 EXPORTS (USD million) 1% 07 – 06 = = 38% 07 2– GR0 CA 4Q07 – 119 120 06 = (1 9)% 96 47 33 32 24 26 2002 2003 2004 2005 2006 2007 4Q06 4Q07 17
  18. 18. 4Q07/2007 February, 2008 EXPORTS (USD million) Segment Exports 2007 – R$ 232.8 million (US$ 120.2 million) 119 120 0 1 Exports 4Q07 – R$ 45.8 million (US$ 26.0 million) 56 56 Destination - 2007 (%) Canada / Mexico – 4.7% 63 64 Africa & Middle East – 16.2% 2006 2007 Railway Wheels and Chassis Automotive Comp. 32 0 26 Europe – 9.4% 0 18 14 14 11 Latin America – 23.1% 4Q06 4Q07 USA – 49.7% Railway Wheels and Chassis Automotive Comp. 18
  19. 19. 4Q07/2007 February, 2008 GROSS PROFIT (R$ million) 21% 20% 21% 19% 18% 18% 16% 228 289 13% 236 219 137 87 52 34 2002 2003 2004 2005 2006 2007 4Q06 4Q07 Gross Profit % Net Sales 19
  20. 20. 4Q07/2007 February, 2008 OPERATING INCOME – EBIT (R$ million) 12% 12% 11% 10% 9% 9% 178 8% 127 136 135 6% 58 36 27 17 2002 2003 2004 2005 2006 2007 4Q06 4Q07 EBIT % Net Sales 20
  21. 21. 4Q07/2007 February, 2008 EBITDA* (R$ million) 17% 14% 14% 13% 13% 13% 11% 205 9% 156 163 165 89 69 35 24 2002 2003 2004 2005 2006 2007 4Q06 4Q07 EBITDA % Net Sales (*) 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. 21
  22. 22. 4Q07/2007 February, 2008 NET FINANCIAL EXPENSES (R$ million) 13% 54 6% 38 37 33 21 2% 2% 3% 10 2% 5 0% 1% -1 2002 2003 2004 2005 2006 2007 4Q06 4Q07 Financial Exp. % Net Sales 22
  23. 23. 4Q07/2007 February, 2008 NET INCOME (R$ million) 72 72 58 51 5% 5% 6% 5% 5% 1 17 -1% 1% (5) -6% (24) 2002 2003 2004 2005 2006 2007 4Q06 4Q07 Net Income % Net Sales 23
  24. 24. 4Q07/2007 February, 2008 NET BANK DEBT (R$ million) 1.5 1.3 0.8 0.8 0.6 0.6 115 132 128 106 102 125 2002 2003 2004 2005 2006 2007 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. 24
  25. 25. 4Q07/2007 February, 2008 INDEBTEDNESS – Dec/07 (R$ million) SHORT LONG LINES TOTAL TERM TERM Trade Finance / Export 31.2 32.9 64.0 Equipment Finance / EXIM 100.6 115.2 215.8 131.8 148.0 279.9 (-) Cash & Marketable Securities 151.5 0.0 151.5 Net Debt (19.7) 148.0 128.3 Debt Indexation 79% Average Cost (Dec/07) Index by TJLP, CDI e IGPM in R$ 80% CDI 3% 18% Index by Dollar in US$ 8.1% per year TJLP Dollar IGP-M At the end of Dec 07, the company had contracted US$ 45.8 million of non-deliverable forward contracts at R$ 1.9852 average FX rate, for the period of Jan to Dec 08 Forward positive impact to expire is not accounted, only the positive impact expired According to Brazilian GAAP, if at any end of a month a negative future impact is foreseen on the contracts, the full negative impact must be provisioned 25
  26. 26. 4Q07/2007 February, 2008 CAPEX (R$ million) 84 73 68 68 54 41 22 20 2002 2003 2004 2005 2006 2007 4Q06 4Q07 26
  27. 27. Capital Market
  28. 28. 4Q07/2007 February, 2008 STOCKHOLDING RESTRUCTURING - SUBSEQUENT FACT A special shareholders meeting for holders of the Company`s preferred shares held on January 17, 2008 approved the conversion of Iochpe-Maxion's preferred shares into common shares at a conversion rate of 1.2 preferred shares for each common share An extraordinary general meeting of shareholders held on the same day approved the share conversion; it also approved a proposed amendment to the Company’s bylaws, as well as the Company’s migration to the Novo Mercado listings and the election of new members to the Company’s board of directors After the deadline of the shareholder´s right of withdrawal (02/20/08), will begin the process of the conversion of the preferred shares into common shares New Iochpe-Maxion Capital structure composed by common shares only Board of Directors composed by at least 20% of independent members 100% Tag Along in case of transfer of control 28
  29. 29. 4Q07/2007 February, 2008 SHAREHOLDERS STRUCTURE Iochpe-Maxion – Shareholders Structure on 12/31/2007 Shareholder Com m on % % of Total Preferred % % of Total Total % Ioschpe Family 13,924,267 75.56% 26.16% 143,942 0.41% 0.27% 14,068,209 26.43% BNDESPAR 4,012,050 21.77% 7.54% 9,612,777 27.62% 18.06% 13,624,827 25.60% Controlling Shareholders 17,936,317 97.33% 33.69% 9,756,719 28.03% 18.33% 27,693,036 52.02% Other 492,280 2.67% 0.92% 25,046,988 71.97% 47.05% 25,539,268 47.98% Total 18,428,597 100.00% 34.62% 34,803,707 100.00% 65.38% 53,232,304 100.00% Iochpe-Maxion – Expected Shareholders Structure After the Conversion Shareholder Com m on % % of Total Preferred % % of Total Total % Ioschpe Family 14,044,219 29.61% 29.61% - 0.00% 0.00% 14,044,219 29.61% BNDESPAR 12,022,698 25.35% 25.35% - 0.00% 0.00% 12,022,698 25.35% Controlling Shareholders 26,066,917 54.96% 54.96% - 0.00% 0.00% 26,066,917 54.96% Other 21,364,770 45.04% 45.04% - 0.00% 0.00% 21,364,770 45.04% Total 47,431,687 100.00% 100.00% - 0.00% 0.00% 47,431,687 100.00% 29
  30. 30. 4Q07/2007 February, 2008 SHARES PERFORMANCE Average Daily Trade Volume - R$ mil Shares Performance - 2007 111.42% 182 7,048 7,738 110 8,354 43.65% 47.83% 99 40.33% 86 91 89 31.55% 86 69 55 84 56 70 3,723 4,114 5,577 3,466 2,857 2,747 2,948 2,598 2,952 MYPK4 Ibovespa IBX-100 IGC ISE MYPK4 Ibovespa IBX-100 IGC ISE Jan-07 Feb-07 Mar-07 Apr-07 May-07 Jun-07 Jul-07 Aug-07 Sep-07 Oct-07 Nov-07 Dec-07 Volume Trades Price - LTM* 43.00 * Closing price of the last business day of each month 37.00 37.00 35.00 33.01 32.99 37.40 30.00 36.40 35.50 26.49 23.99 24.00 29.89 30.10 30.85 22.70 29.00 24.80 17.00 22.30 21.91 20.80 16.11 Jan-07 Feb-07 Mar-07 Apr-07 May-07 Jun-07 Jul-07 Aug-07 Sep-07 Oct-07 Nov-07 Dec-07 MYPK4 MYPK3 30
  31. 31. 4Q07/2007 February, 2008 OUTLOOK Strong domestic demand for trucks and agriculture machinery Recovery of domestic railway freight car market from the end of 2007, onwards Implementation of commercial vehicle wheels plant in China 31
  32. 32. Additional Information
  33. 33. 4Q07/2007 February, 2008 INCOME STATEMENT (R$ thousand) Consolidated Income Statement R$ 2007 N.O.R 2006 N.O.R 4Q07 N.O.R 4Q06 N.O.R thousand Net Operating Revenue 1,289,282 100.0% 1,247,574 100.0% 328,459 100.0% 265,088 100.0% Cost of Goods Sold (1,053,576) 81.7% (1,028,339) 82.4% (276,866) 84.3% (231,273) 87.2% Gross Profit 235,706 18.3% 219,235 17.6% 51,593 15.7% 33,815 12.8% Operating Expenses General and Administrative (47,041) 3.6% (41,755) 3.3% (12,108) 3.7% (7,307) 2.8% Commercial (5,805) 0.5% (5,733) 0.5% (1,597) 0.5% (1,374) 0.5% Others (48,210) 3.7% (35,352) 2.8% (10,644) 3.2% (8,078) 3.0% (101,057) 7.8% (82,840) 6.6% (24,348) 7.4% (16,759) 6.3% Operating Income (EBIT) 134,649 10.4% 136,396 10.9% 27,245 8.3% 17,057 6.4% Financial Results Financial Revenue 6,233 0.5% 5,402 0.4% 1,685 0.5% 1,577 0.6% Financial Expenses (15,839) 1.2% (26,794) 2.1% (966) 0.3% (7,056) 2.7% (9,606) 0.7% (21,392) 1.7% 719 -0.2% (5,479) 2.1% Earnings After Financial Income 125,043 9.7% 115,003 9.2% 27,964 8.5% 11,577 4.4% Non Operating Results (8,628) 0.7% (22,158) 1.8% (925) 0.3% (4,963) 1.9% Earnings Before Taxes 116,415 9.0% 92,845 7.4% 27,039 8.2% 6,615 2.5% Income Taxes (44,024) 3.4% (35,001) 2.8% (10,010) 3.0% (5,229) 2.0% Net Income 72,391 5.6% 57,844 4.6% 17,029 5.2% 1,386 0.5% EBITDA 164,527 12.8% 162,688 13.0% 35,200 10.7% 23,817 9.0% (*) 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. 33
  34. 34. 4Q07/2007 February, 2008 BALANCE SHEET (R$ thousand) ASSETS LIABILITIES Dec-07 Dec-06 Dec-07 Dec-06 CURRENT CURRENT Cash 151,519 88,197 Loans 131,820 125,455 Receivables 144,051 221,763 Payables 62,093 46,600 Inventory 167,806 116,346 Customers Advance 50,033 13,339 Recoverable Taxes 18,911 22,609 Wage and Charges 35,543 22,907 Others 13,030 (79,488) Taxes 3,063 537 495,317 369,428 Provisions 6,250 3,581 Others 20,177 46,052 308,979 258,471 LONG TERM LONG TERM Receivable 1,694 7,980 Loans 148,045 95,060 Deferred Income Taxes 28,881 39,067 Provisions 65,099 67,027 Others 31,052 10,960 Others 7,578 15,360 61,627 58,008 220,722 177,447 MINORITY - 34 PERMANENT EQUITY Investments 125 125 Capital 161,463 161,463 Plants, Property and Equipment 309,614 271,445 Capital Reserves 103,472 103,471 Deferred Items 345 1,879 Retained Earnings 72,391 - 310,083 273,449 337,326 264,934 TOTAL ASSETS 867,027 700,886 TOTAL LIABILITIES 867,027 700,886 34
  35. 35. Earnings Release – 4Q07 / 2007 February, 2008

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