Download pdf - Iochpe-Maxion - 2001 Presentation With Photos

February 2002

PROFILE

Profile

Holding of autoparts and railroad equipment manufacturers

Leadership in almost every product line

Export baseUpdated TechnologyQualityCompetitive pricesProduction capacity

Completed restructuring processGrowing operational results in line with global

benchmark Adjusted capital structure

Profile

4 plantsCruzeiro - SP (2)Belo Horizonte - MGContagem - MG

CustomersOEMs in Brazil - 74%

Bus, truck and light commercial – 44%Car – 30%

Brazilian railroad operators - 12%Export - 14%

Shared control Companhia IochpeBNDESPARBradesco

Profile

Financial Highlights - 2001

Net Sales: R$ 373,7 MM

EBIT: R$ 27,1 MM

Net Income: R$ 24,7 MM

EBITDA: R$ 57,9 MM

Net Debt: R$ 65,1 MM

Capital Expenditures: R$ 18,8 MM

Proposed Dividend: R$ 9,8 MM

AUTOMOTIVE INDUSTRY

Automotive Industry - Worldwide Trends

The automotive industry presents an excess production capacity worldwide...

26%31% 30% 29% 30%

26%

1997

1998

1999

2000

2001

2002

-20

06(*

)

Excess CapacityWorldwide

Source: Autopolis , Autofatcs(*) Estimated


compressing OEMs’ operational margins, leading to a consolidation process...

16

108

Actual 2005 2010

Independent OEMs - WorldwideNumber of companies


affecting all levels of the production chain, including autopart companies

Global platforms Higher use of shared components

Global sourcingGlobal standards of costs and quality in choosing

suppliers

Follow SourceAutopart companies follow OEMs around the world,

maximize return on investments

Production chain upward verticalizationSuppliers - ability to invest and innovate Components x Systems / Modules

Automotive Industry - Regional Trends

On the other hand, regionally the industry presents a better growth outlook

Unique growth opportunities (*)

South America : +5% p.a.Nafta / Japan : -0,5% p.a.Western Europe : +0,5% p.a.

OEMs investments in Brazil (**)

1991 - 2000 - US$ 19,7 BillionNewcomers : Renault, Peugeot, Citroen, Honda, Toyota,

Rover, Audi, Iveco, MitsubishiNew projects : Ford, VW, GM, DaimlerChrysler

(*) Source : DRI(**) Source : Anfavea

RAILROADINDUSTRY

Railroad Industry - Regional Trends

The Brazilian railroad industry has gone through a reestructuring phase...

Railroad privatization - 1996/1997

6 groups acquired in fractions all the federal railroad track system - Novoeste, FCA, MRS, FTC, ALL, CFN

Integration - tracks without domain restriction

Additionally, 4 companies operate in the railroad freight business

E.F. Vitória-Minas / E.F. Carajás - CVRDFerronorte - Grupo Ferropasa Ferrovia Norte-Sul - to be privatized


leading to a growth in transported volumes, as well as in the share of railroad in the transportation mix...

20,7% 20,7% 20,0% 19,5%21,2%

1996 1997 1998 1999 2000

Railroad Share of Transportation% of total transported volume

129 139 142 141 149

1996 1997 1998 1999 2000

Transported Volume - BrazilTKU (useful Km-ton)

Source: Geipot, Transportation Ministry Source: Geipot, Transportation Ministry


stimulating investments

Investments are critical to improve performance and reduce operational costs

The trend to diversify the type of product transported demands investments

Railroad operators have aggressive investment plans for the next 5 years

197

415308

477

669

1996 1997 1998 1999 2000

Railroad Operators' Investments R$ million

Source : Transportation Ministry, Revista Ferroviária

STRATEGICVIEW

Strategic View

Iochpe-Maxion has gone through a restructuring process in the last 3 years...

Capitalization - in April and October 98 - in the amount of R$ 163 milion and the entry of Bradesco and BNDESPAR on the Board of Directors

Joint Venture at diesel engines subsidiary with Navistar- with further disposal - in February 99 and January 01, for the total amount of US$ 146,0 million

Disposal of Iochpe-Maxion Ohio, Inc. - in July 99 - for the amount of US$ 36,1 million

Joint Venture at railroad equipment subsidiary with Amsted - in February 00 - for the amount of R$ 60 million

Strategic View

resulting in a new corporate structure,

Bradesco Companhia Iochpe BNDESPAR Other

Number of Employees

Maxion Comp.Estruturais Ltda.

Amsted -Maxion Fundiçãoe Equip. Ferrov. S.A.

Maxion ComponentesAutomotivos S.A.

Maxion NacamLtda.

70%50%

ZFLenksysteme (30%)

Amsted Industries(50%)

11,2% 21,6% 47,3% 19,9%

Iochpe-Maxion S.A.

Tecob

1078131.703 976

6

Iochpe Holdings12

321

Total Consolidated 3.132

Strategic View

improved operational performance and a solid capital structure ...

% net sales

6%

9%

14%16%

-1%2%

7% 7%

11%13%

19%

21%

1998 1999 2000 2001

Gross Profit

Ebit

Ebitda

Net Debt / EBITDA ratio5,6

4,4

3,6

2,2

1,1

1997 1998 1999 2000 2001

Strategic View

creating the basis of a new strategic phase...

New projects : autoparts and railroad equipment segments, maintaining the principles of the turnaround strategy

Continuous improvement of operational performance

Higher production capacity utilization, focusing on exports

Strategic View

that produced the first transaction

Acquisition by the subsidiary Maxion Componentes Estruturais of assets related to the production of steel wheels for agricultural machinery and off-road vehicles from BorlemS.A. Empr. Industriais (Hayes-Lemmerz)

Amount: approx. R$ 12,1 million

Estimated additional sales: R$ 20 million / year

Assets to be transferred to an existent manufacturing unit, allowing great synergy

Transfer conclusion : March 2002

Strategic View

and the second transaction

Acquisition by the subsidiary Maxion Componentes Automotivos of assets related to the production of pedal sets, hand brake levers and jacks to cars from Batz do Brasil Ltda.

Technology agreement with Spanish Batz S. Coop., controlling company of Batz do Brasil Ltda.

Amount: approx. R$ 5,0 million

Estimated additional sales: R$ 10 million / year

Assets to be transferred to an existent manufacturing unit, allowing great synergy

Transfer conclusion: March 2002

Subsidiaries and Joint Ventures

Sales by Subsidiary

JANUARY-DECEMBER 2001R$ 373,7 MM

Amsted-Maxion

14%

Maxion Nacam

5%

Maxion Comp. Autom.25%

Maxion Comp. Estrut.56%


MAXION COMPONENTES ESTRUTURAIS

56%


Maxion Componentes Estruturais - CHASSIS

Products / Technology

Chassis /Maxion & Budd

Siderails/ MaxionCrossmembers/

Maxion

Market Segments

TruckBusPick-up Light commercialTractor


Maxion Componentes Estruturais - CHASSIS

Market Share - 2001 Customers - 2001

GM24%

OTHER13%

VW22%

SCANIA4%

DANA4%

FORD6%

EXPORT10%

DAIMLERCHRYSLER

17%

DANA / OTHER

23%

MAXION77%


Maxion Componentes Estruturais - WHEELS


Road and Off-Road Wheels / Maxion

Market Segments

TruckBusTractor


Maxion Componentes Estruturais - WHEELS

Market Share - 2001

BORLEM48%

MAXION52%

Customers - 2001

EXPORT36%

OTHER10%

SCANIA7%AGCO

8%

VW10%

AFTERMARKET

18%

DAIMLERCHRYSLER

11%


Maxion Componentes EstruturaisChassis and Wheels

NEW CONTRACTS: R$ 22,0 MM / Year

Pick-up - GM China Jun.01 0,3Daily - Iveco Brazil Aug.01 2,2Bus - Volvo Brazil Aug.01 0,5Pick-up - Renault/Nissan Brazil Nov.01 0,2Bus - DaimlerChrysler Brazil Nov.01 / Jan.02 2,4New Corolla - Toyota Brazil Mar.02 1,1Streparava Italy May.02 0,5

Workhorse U.S.A. Nov.01 8,6Caterpillar Brasil Jan.02 6,2

CHASSIS / COMPONENTS

WHEELS


Maxion Componentes EstruturaisChassis and Wheels

207,5

112,1

174,1

2001

2000

1999Net SalesR$ million

EBITR$ million

31,5

11,5

34,92001

2000

1999

41,6

22,5

49,62001

2000

1999EBITDAR$ million


MAXION COMPONENTES AUTOMOTIVOS

25%


Maxion Componentes Automotivos


Window Raisers / Maxion, Lames and Brose

Latches - Door Locks - KKC /Maxion e KiekertPedal Sets and Hinges / Maxion

and GammastampWater and Oil Pumps /

Maxion

Market Segments

Cars




Products

Window Raisers 41%

Latches 20%

Knobs / Keys /Cylinders (KKC) 8%

FORD11%

AFTER MARKET13%

GM16% VW

22%

FIAT38%


Maxion Componentes Aumotivos

NEW CONTRATCS: R$ 16,2 MM / YearModel Product Start of

ProductionAnnual Sales

R$ MMDucato - Fiat Window Raisers Feb.02 0,6

Daily - Iveco Pedal Sets Feb.02 0,2S4300 / S4316 - GM Doorlocks Feb.02 1,3

S10 - GM Doorlocks Mar.02 0,2

206 - Peugeot Water Pumps Mar.02 0,5

New Palio - Fiat Pedal Sets Apr.02 1,4Celta - GM Window Raisers Apr.02 1,2Amazon - Ford Window Raisers / Doorlocks May.02 3,4

LTC - DaimlerChrysler Window Raisers / Stamped Parts Jun.02 2,6

Doblò - Fiat Window Raisers Jul.02 0,6

Gol 2002 - VW Knobs, Keys and Cylinders Aug.02 4,2



Net SalesR$ million

99,0

91,5

93,62001

2000

1999

EBITR$ million

(0,6)

(8,8)

2,92001

2000

1999

7,3

(0,7)

9,32001

2000



MAXION NACAM

5%


Maxion Nacam


Steering Columns / ZF Lenksysteme

Market Segments

Cars


Maxion Nacam


OTHER3%

EXPORT2%

VW7%

GM33%

FIAT55%

OTHER63%

MAXION37%


Maxion Nacam

NEW CONTRACTS - R$ 9,7 MM / Year

Model Start of Production Annual Sales R$ MM

Corsa export - GM Aug.01 3,8

Kangoo - Renault Dec.01 1,1

Doblò - Fiat Mar.02 1,7

Ducato - Iveco May.02 0,4

Astra/Zafira - GM May.02 1,8

Marea - Fiat Aug.02 0,9


Maxion Nacam

Net SalesR$ million

20,5

15,9

17,92001

2000

1999

EBITR$ million

0,8

(1,4)

(0,4)(2,0) (1,5) (1,0) (0,5) 0,0 0,5 1,0 1,5 2,0

2001

2000

1999

1,5

(0,7)

0,32001

2000



AMSTED-MAXION

14%


Amsted-Maxion


Railroad Wheels / Maxion& Amsted

Railroad Freight Cars / Maxion & Johnstown

Castings / Maxion , Miner& Amsted

Market Segments

Railroad EquipmentIndustrial Castings


Amsted-Maxion

Market Share - 2001

Products

Railroad Freight Cars 96%

Railroad Wheels 60%

Railroad Castings 80%

Industrial Castings 60%

Customers - 2001

OTHER14%EXPORT

17%

FCA6%

FERROBAN3%

CVRD27%

CATERPILLAR

6%

MRS27%


Amsted-Maxion

NEW CONTRACTS Orders - R$ 32 million

CVRD – 144 cars

Ferronorte – 16 cars

MRS – refurbishing of 105 cars

MRS / FCA / CVRD – 8000 railroad wheels

MRS / FCA / CVRD / Ferronorte – 800 ton castings

ExportsAmsted (USA) - railroad castings - US$ 2,0MM / year

Amsted (USA) - Fifth Wheel - US$ 1,5MM / year

Metso (France) - Industrial castings - US$ 1,1MM / year

SNIM (Mauritânia) – 800 trucks - US$ 4,6MM


Amsted-Maxion

Net SalesR$ million

121,6

94,5

109,52001

2000

1999

EBITR$ million

12,6

9,8

4,82001

2000

1999

16,5

13,1

8,82001

2000


IOCHPE-MAXION S.A.

CONSOLIDATED

Iochpe-Maxion - Consolidated

Shareholder Composition

Shareholders % Capital

Voting Pref. TotalCompanhia Iochpe 55,9% 3,9% 21,6%Bradesco 18,8% 7,3% 11,2%Bndespar 21,8% 60,5% 47,3%Other 3,5% 28,3% 19,9%


Customers

JANUARY-DECEMBER 2001R$ 373,7 MM

General Motors

14%Export14%

Fiat12%

Other20%Scania

3%MRS4%

CVRD4%

Ford5%

Volkswagen

16%

DaimlerChrysler

8%


Sales by Subsidiary

JANUARY - DECEMBER 2001R$ 373,7 MM

Amsted-Maxion

14%

Maxion Nacam

5%

Maxion Comp. Autom.25%

Maxion Comp. Estrut.56%


Income Statement

R$ MM 1999 2000 Actual

2000 Pro forma

2001

Net Sales 615,4 624,0 353,7 373,7 Gross Profit 81,0 115,7 71,5 80,1 % 13% 19% 20% 21%

Operational Expenses (69,2) (69,4) (47,6) (53,0) % -10% -11% -13% -14%

EBIT 11,8 46,3 23,9 27,1 % 2% 7% 7% 7%Net financial expenses (63,6) (46,7) (29,4) Devaluation Effect (56,8) (9,5) (11,8)

Income before Non-operational (108,6) (9,9) (14,1) Previous year result (6,6) Non-operational Income 36,0 35,0 67,6 Non-recurring result - refis 7,1 Income before taxes and profit sharing (72,6) 25,6 53,5 Taxes / Profit Sharing 21,2 (12,0) (28,8) Net Income (51,4) 13,6 24,7 EBITDA (1) 57,2 88,7 53,0 57,9 % 9% 14% 15% 16%

Net Debt (2) 208,4 194,8 65,1 Ratio (2) / (1) 3,6 2,2 1,1

(*) Pro forma - results from recurring businesses



Gross Profit% net sales

13,2%

20,2%

18,5%

21,4%2001

2000

2000

1999

Pro-forma

EBIT% net sales

1,9%

6,8%

7,4%

7,3%2001

2000

2000

1999

Pro-forma

9,3%

15,0%

14,2%

15,5%2001

2000

2000

1999

Pro-forma

EBITDA% net sales


Net Debt - R$ million

307 313

217 208 195

65,1

0

50

100

150

200

250

300

350

1996 1997 1998 1999 2000 2001

Debt / Equity 1,3 1,5 1,0 1,2 1,2 0,4Debt / EBITDA n/m 5,6 4,4 3,6 2,2 1,1Debt / Sales 64% 44% 28% 34% 31% 17%

BENCHMARK

Benchmark

Gross Profit % sales

0% 5% 10% 15% 20% 25% 30% 35% 40% 45%Source: Market Guide from Multex.comResults for the nine months ended September 2001

GentexIochpe-MaxionBorg WarnerEatonTennecoMagnaStrattecCumminsSuperiorJohnson ControlsAmerican AxleDanaCollins & AikmanAccurideTowerDelphiArvin MeritorLearTitanVisteon

Benchmark

EBIT % sales

-5% 0% 5% 10% 15% 20% 25% 30%

GentexSuperiorMagnaIochpe-MaxionAmerican AxleStrattecBorg WarnerEatonJohnson ControlsTowerDanaCollins & AikmanTennecoLearArvin MeritorDelphiTitanAccurideVisteonCummins

Source: Market Guide from Multex.comResults for the nine months ended September 2001

Benchmark

EBITDA % sales

0% 5% 10% 15% 20% 25% 30% 35%Source: Market Guide from Multex.comResults for the nine months ended September 2001

GentexIochpe-MaxionBorg WarnerStrattecMagnaAmerican AxleEatonTowerDanaCollins & AikmanAccurideJohnson ControlsTennecoTitanArvin MeritorDelphiVisteonLearCummins

OUTLOOK

Outlook

Automotive Production

THOUSAND UNITSBRASIL2.070

1.5861.670

1.7871890

1.351

1.000

1.250

1.500

1.750

2.000

2.250

1.997 1.998 1.999 2.000 2.001 2002 E

Outlook

Outlook

Sales growtha) New contracts / Exports

b) Innovation Strategy - acquisition and/or partnerships

Improvement of operational performance

Adjusted capital structure

Mercosul focusa) Export base + local market

b) Additional strategic partnerships with global leaders