Iochpe-Maxion - 1Q04 Presentation

2004 First Quarter

Results

2004 First Quarter Results

2

First Quarter Performance R$ MM

1 4 8 , 32 1 2 , 9

1 Q 0 3 1 Q 0 4

EBITNet Sales

1 8 , 7 1 8 , 3

1 Q 0 3 1 Q 0 47 , 4

9 , 7

1 Q 0 3 1 Q 0 4

OperationResult

2 6 , 8 2 5 , 8

1 Q 0 3 1 Q 0 4

EBITDA

3 , 42 , 1

1 Q 0 3 1 Q 0 4

NetIncome


3

First Quarters Review % net sales

1 4 , 4 %1 7 , 2 %

2 4 , 0 %

1 8 , 2 %

0 , 4 %

- 1 0 , 1 %

- 4 , 7 % - 4 , 5 %

5 , 0 %

2 0 , 7 %

1 5 , 2 %1 2 , 5 %

9 , 5 %

1 8 , 1 %

1 2 , 1 %

6 , 8 %3 , 4 %

1 2 , 6 %8 , 6 %

4 , 5 %

G r o s s P r o f i t E b i td a E b i t O p e r a t i o n R e s u lt

1Q00 1Q01 1Q02 1Q03 1Q04

Operational Margins


4

First Quarters Review R$ MM

1 7 , 1 1 4 , 6

3 5 , 73 8 , 7

0 , 5

( 1 2 , 0 )

( 4 , 6 ) ( 3 , 8 )

7 , 4

2 0 , 1

1 4 , 71 0 , 61 1 , 3

2 6 , 8 2 5 , 8

6 , 62 , 8

1 8 , 7 1 8 , 3

9 , 7


1Q00 1Q01 1Q02 1Q03 1Q04

Operational Margins


5

% Net salesLast 5 Quarters Review

2 4 , 0 %2 1 , 2 %

1 6 , 2 %1 8 , 2 %

1 2 , 6 %

5 , 0 %3 , 4 % 3 , 9 %

- 0 , 5 %

2 0 , 0 %

1 3 , 3 % 1 3 , 7 %

1 8 , 1 %

8 , 7 %

1 2 , 1 %8 , 3 % 9 , 4 %

4 , 5 %

8 , 6 %

4 , 5 %


1Q03 2Q03 3Q03 4Q03 1Q04

Operational Margins


6

5 Year Review R$ MM

LTM = Last 12 months

1999 2000 2001 2002 2003 1Q04 LTM

6 1 5 , 4 6 2 4 , 0

3 7 3 , 74 1 1 , 2

6 7 5 , 77 4 0 , 3

0

3 0 0

6 0 0

9 0 0Net Sales


7

Corporate Structure

11

Bradesco Companhia Iochpe BNDESPAR Other

Maxion ComponentesEstruturais Ltda.

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

Maxion ComponentesAutomotivos S.A.

50%

6,5% 20,8% 48,2% 24,5%

Iochpe-Maxion S.A.

Tecob

Employees

Consolidated - 4.973

Amsted Industries(50%)

1.1402.446 2.741

23

Iochpe Holdings

18,8% 56,5% 21,8% 2,9%

0,0% 1,9% 62,2% 35,9%

19,9%

3,1%

28,5%

Mar/03

Total

Voting

Non voting


8

Revenue breakdown by company %

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

2 6 %

1 6 %

5 8 %

Maxion Comp.

Estruturais

Amsted Maxion

Maxion Comp.Autom.

2 1 %

1 9 %

6 0 %

Maxion Comp.

Estruturais

Amsted Maxion

Maxion Comp.Autom.


9

Automobile Industry – Brazilian Output units

Source : Anfavea

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%

AgriculturalMachinery 15.037 11.141 35,0%


10

Automobile Industry - Export units

Source : Anfavea

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%

AgriculturalMachinery 6.976 3.782 84,5%

Subsidiaries : MAXION COMPONENTES ESTRUTURAIS

58%


12

Maxion Componentes Estruturais

Chassis e Siderails - 52% of net sales

SiderailsStamped Parts

Chassis

Structural Parts

Heavy Medium Light


13

Maxion Componentes Estruturais

Wheels for Vehicles - 48% of net sales


14

Maxion Componentes Estruturais R$ MM

1 1 2 , 1

1 7 4 , 12 0 7 , 5

2 4 0 , 7

3 9 7 , 34 3 3 , 4

8 8 ,31 2 4 , 4

0

1 0 0

2 0 0

3 0 0

4 0 0

5 0 0

Net Sales

CAGR = 37,5% p.a.

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

Var% = 40,9%

1Q03 1Q04


15

Maxion Componentes Estruturais - Chassis

Market Share %1Q04 1Q03

1 7 %

1 3 % 7 0 %

Maxion

Dana

OEM

1 6 %

1 1 %7 3 %

Maxion

Dana

OEM


16

Maxion Componentes Estruturais - Chassis R$ MM

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

2 4 %

2 4 %

1 3 %

6 %5 %

1 4 %

1 4 %

Volks-wagen

DaimlerChrysler

Other

Scania

Ford

Export

GeneralMotors

2 7 %

2 2 %

1 0 %

8 %5 %

1 5 %

1 3 %

OtherDaimlerChrysler

Volks-wagen General

Motors

Export

Ford

Scania


17

Maxion Componentes Estruturais - Chassis R$ MM

New Agreements: R$ 18,5 MM per year

C H A S S I S C o u n t r y S t a r t i n g D a t e A n n u a l S a l e s R $ M M

S id e r a i l s - W o r k h o r s e U S A S e p - 0 3 5 , 4S 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 i l A u g - 0 4 3 , 1C 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 i l M a r - 0 4 2 , 3C h a s s is - V o lk s w a g e n B r a z i l A p r - 0 4 2 , 2S id e r a i l s - J o h n D e e r e B r a z i l J u n - 0 3 1 , 7S 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 i l J u n - 0 4 1 , 3S t a m p e d P a r t s - S t r e p a r a v a - I v e c o B r a z i l S e p - 0 4 0 , 9S id e r a i l s - J a c t o B r a z i l J u n - 0 3 0 , 9S t a m p e d P a r t s - P e u g e o t C i t r o e n B r a z i l O c t - 0 4 0 , 4S id e r a i l s R e in f o r c . - D a im le r C h r y s le r B r a z i l M a y - 0 4 0 , 3


18

Maxion Componentes Estruturais - Wheels

Market Share %

1Q04 1Q03

3 4 %

1 4 %

5 2 %

MaxionBorlem

Other

3 7

Borlem

%

1 3 %

5 0 %

Maxion

Other


19

Maxion Componentes Estruturais - Wheels


2 8 %2 3 %

1 1 % 7 %7 %

8 %1 6 % Other

ExportTractors

AfterMarket

Volks-wagen Scania

Volvo

3 1 %2 1 %

1 1 % 7 %3 %

1 2 %1 5 %

AfterMarket

Volks-wagen Scania

Volvo

Other

ExportTractors

AGCO - 7%CNH – 4%Valtra – 5%John Deere – 3%Caterpillar – 3%Other – 1%

AGCO - 8%CNH – 6%Valtra – 5%John Deere – 2%


20

Maxion Componentes Estruturais - Wheels R$ MM

NEW AGREEMENTS: R$ 27,7 MM per year

W H E E L C o u n t r y S t a r t i n g D a t e A n n u a l S a l e s R $ M M

G K N E u r o p e / U S A S e p - 0 3 1 5 , 7S t ip T u n is M a y - 0 4 2 , 3A G C O B r a z i l J u n - 0 3 1 , 5D u n lo p S o u t h A f r ic a J u n - 0 4 1 , 5K u r t L e y s e r C o r p . S o u t h A f r ic a A p r - 0 4 1 , 5J o h n D e e r e B r a z i l J u l - 0 3 1 , 1I n s a k S in g a p o r e J u n - 0 3 1 , 0M A A P M o r o c c o M a y - 0 4 1 , 0B r id g e s t o n e S p a in F e b - 0 4 0 , 8C o n t in e n t a l G e r m a n y J u n - 0 3 0 , 7K r is t a n a s S p i r o s G r e e c e J u l - 0 4 0 , 6

Subsidiaries : MAXION COMPONENTES AUTOMOTIVOS

16%


22

Maxion Componentes Automotivos


23

Maxion Componentes Automotivos R$ MM

9 1 , 59 9 , 0

9 3 , 6 9 8 , 1

1 1 4 , 31 1 8 , 9

2 9 , 33 3 , 9

0

5 0

1 0 0

1 5 0 Net Sales

CAGR = 6,4% p.a.

1999 2000 2001 2002 2003 1Q04 LTM

Var % = 15,7%

1Q03 1Q04LTM = Last 12 months / CAGR = Compounded Annually Growth Rate


24


Market Share % 1Q04 1Q03

Window Raiser 43%

42%

Hand Brake Lever

44%

44%

Lock

10%

13%

Knob/Key/Cylinder (KKC)

10%

9%

Jack

17%

14%


25



3 1 %

2 7 %

1 4 %7 %6 %

1 5 %

Fiat

Volks-wagen

GeneralMotors

SAS

FordAfterMarket

3 1 %

2 1 %

9 %

7 %8 %5 %

1 9 %

SAS

GeneralMotors

Fiat

AfterMarket

Ford

Volks-wagen

Other


26

Maxion Componentes Automotivos R$ MM

New Agreements: R$ 10,7 MM per year

M o d e l P r o d u c t S t a r t i n g D a t e

A n n u a l S a l e s R $ M M

T r u c k - V W W in d o w R a is e r / K K C / L a t c h e s J u n . 0 5 7 , 3

A c e l lo - D a im le r C h r y s le r W in d o w R a is e r / S t a m p e d P a r t s J u n . 0 3 1 , 4

F o x - V W J a c k s O u t . 0 3 0 , 9C e l t a - G M W in d o w R a is e r M a i . 0 4 0 , 8P ic k - u p M o n t a n a L a t c h N o v . 0 3 0 , 3


27

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

AMSTED MAXION FUNDIÇÃO E EQUIPAMENTOS FERROVIÁRIOS

26%

Joint venture:


29

Amsted Maxion


30

Amsted Maxion R$ MM

9 4 , 51 2 1 , 6 1 0 9 , 5 1 2 0 , 4

3 2 8 , 1

3 7 6

6 1 , 4

1 0 9 , 4

0

1 0 0

2 0 0

3 0 0

4 0 0Net Sales

CAGR = 38,4% p.a.

1999 2000 2001 2002 2003 1Q04 LTM

Var % = 78,2%

1Q03 1Q04LTM = Last 12 months / CAGR = Compounded Annually Growth Rate


31

Amsted Maxion

Market Share % 1Q04 1Q03

Railroad Cars 80%

83%

Railroad Wheels

40%

40%

Railroad Castings

80%

80%

Industrial Castings

50%

60%


32

Amsted Maxion

Revenue breakdown by customer %1Q04 – R$ 54,7MM(*) 1Q03 – R$ 30,7 MM(*)

7 8 %

9 %4 %5 % 4 %

OtherCaterpillar

CVRD

ExportMRS

6 7 %

1 6 %

7 %9 %1 %

Other Caterpillar

CVRD

Export

MRS

(*) represents 50% of the total sales of Amsted Maxion


33

Amsted Maxion R$ MM

Spot Orders : R$ 490,0 MM

CVRD / FCA – 2.878 cars

MRS - 630 cars

ADM - 140 cars

Mineração Serra do Sossego - 42 cars

MRS / ALL - 50 boxes

Total = 3.690 cars e 50 boxes

Deliveries

Up to March 31 – 842 cars

To be done in 2004 – 2.848cars and 50 boxes


34

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

CONSOLIDATED


36

Consolidated

Revenue breakdown by customer %1Q04 – R$ 212,9 MM 1Q03 – R$ 148,3 MMM

2 0 %

1 3 %

9 %8 %

7 %

5 %5 %

2 1 %

1 2 %

CVRD

Volks-wagen Daimler

Chrysler

Fiat

Other

Export GeneralMotors

Tractors

AfterMarket

1 4 %

%

9 %8 %

6 %6 %

6 %

2 0 %

1 5 %

Volks-wagen Daimler

Chrysler

Fiat

Other

GeneralMotors

Tractors

AfterMarket

1 6

CVRD

Export


37

Revenue Breakdown by segment %

Customers 1Q04 1Q03

OEMs installed in the country

- Bus, truck and utility vehicle - Car

64%

48% 16%

67%

47% 20%

Brazilian Railroad Operators 23% 17%

Export 13% 16%


38

Export Breakdown by Segment %

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

5 9 %

2 2 %

1 % 1 8 %

5 4

Wheels

Chassis

RailroadEquipment

Wheels

Autom.Comp.

%2 5 %

1 % 2 0 %

Chassis

RailroadEquipmentAutom.

Comp.


39

Export Breakdown by Region %

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

3 6 %

2 0 %

1 8 %

1 %1 0 %

1 1 %

4 %

2 8 %

2 5 %

1 8 %

6 %

1 3 %8 %

2 %Mexico

USA

Canada

SouthAmerica

Asia /Oceania

Europe

Africa / Midlle East

Mexico

USA

Canada

SouthAmerica

Asia /Oceania

EuropeAfrica /

Midlle EastImport 1Q04

US$ 2,0MM/R$ 5,9MMImport 1Q03

US$ 1,9MM/R$ 6,6MM


40

Income Statement R$ MM

1 Q 0 4 % V . L . 1 Q 0 3 % V . L . V a r . %N e t S a l e 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 l d ( 1 7 4 . 1 9 5 ) - 8 1 , 8 % ( 1 1 2 . 6 4 2 ) - 7 6 , 0 % 5 4 , 6 %

G r o s s P r o f i t 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 l e s ( 1 1 . 5 7 5 ) - 5 , 4 % ( 9 . 1 9 2 ) - 6 , 2 % 2 5 , 9 % G e n e r a l ( 9 . 7 7 0 ) - 4 , 6 % ( 7 . 3 7 3 ) - 5 , 0 % 3 2 , 5 % O t h e r 9 1 8 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 s u l t b e f o r e f i n a n c i a l e x p e n s e s 1 8 . 2 5 0 8 , 6 % 1 8 . 6 7 7 1 2 , 6 % - 2 , 3 %

N e t F i n a n c i a 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 t i o n R e s u 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 t i o n a l R e s u l t ( 1 . 6 3 4 ) - 0 , 8 % ( 2 8 6 ) - 0 , 2 % 4 7 1 , 3 %

R e s u l t b e f o r e i n c o m e t a x a n d p r o f i t s h 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 I n c o m e 2 . 0 9 4 1 , 0 % 3 . 3 6 4 2 , 3 % - 3 7 , 8 %

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


41

Bank Debt Breakdown by Facility Type – Mar04 R$ MM

T Y P E S H O R T T E R M

L O N G T E R M T O T A L

L o c a l B o n d s 2 3 , 1 2 5 , 4 4 8 , 5T r a d e F i n a n c e / A C C / R e s . 2 7 7 0 5 2 , 6 1 6 , 0 6 8 , 6

F i n a m e / B N D E S / B D M G / E X I M 1 2 , 0 4 1 , 9 5 3 , 9O t h e r L o a n s i n l o 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 l e s e c u r i t i e s 2 6 , 6 3 , 0 2 9 , 6

N e t B a n k D e b t 6 2 , 5 8 0 , 3 1 4 2 , 8


42

Bank Debt Breakdown by Denomination – Mar04 %

3 1 %

2 9 %

9 %3 %

2 8 %Dollar

TJLP

INPC

CDIIGPM


43

US$ MMConsolidated Exposure to Foreign Currency – Mar04

B a l a n c e S h e e t

A s s e t s d e n o m i n a t e d i n f o r e i g n c u r r e n c y. M a r k e t a b l e S e c u r i t 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 i a b i l i t i e s d e n o m i n a t e d i n f o r e i g n c u r r e 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 t s P a y a b l e ( 3 , 5 )

( 2 0 , 5 )

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


44

Stock Performance

3 5 1 1 5 1 0 4 5 0 5 0 1 2 5 1 7 7 3 1 2 1 3 61 . 3 9 8

3 . 6 8 9

7 5 8 8 9 5

2 3 . 8 8 1

3 . 1 9 74 . 0 9 4

2 3 , 52 6 , 8 2 5 , 2

2 4 , 72 4 , 2 2 5 , 1 2 6 , 8 2 6 , 4

2 7 , 6

5 1 , 9

8 0 , 98 4 , 3

9 7 , 9 89 4 , 1 8

7 9 , 6 3

8 0 , 4

-

4 . 0 0 0

8 . 0 0 0

1 2 . 0 0 0

1 6 . 0 0 0

2 0 . 0 0 0

2 4 . 0 0 0

d e c -02

ja n -03

fe b - 03

m a r - 03

a p r - 03

m a y - 03

ju n -03

ju l- 03

a u g - 03

s e p -03

o c t -03

n o v -03

d e c -03

ja n -04

fe b - 04

m a r - 04

-

1 5 , 0

3 0 , 0

4 5 , 0

6 0 , 0

7 5 , 0

9 0 , 0

1 0 5 , 0

1 2 0 , 0V O L U M E / M O N T H L Y A V G . P R I C E

I O C H P E - M A X I O N P N ( M Y P K 4 )

R $ T H O U . R $ / T H O U . A

A V G . P R IC E V O L U M E

BENCHMARK


46

Benchmark – Gross Profit % net sales

G e n te x

J o h n s o n C o n t r o ls

T e n n e c o

V a le oIo c h p e - M a x i o n

F e d e r a l M o g u l

S t r a t te cE a to n

T i ta n

A m e r i c a n A x leA u to li v

D u r aS u p e r i o r

A r v i n M e r i to r

L e a r

V i s te o nD e lp h i

In te r m e t

B o r g W a r n e r

D a n a

T o w e r

C u m m i n s

0 % 1 0 % 2 0 % 3 0 % 4 0 %

1 Q 0 4 1 Q 0 3 A v e r a g e = 1 5 %

Source: Companies releases2004 first 3 months results of each company, except fot Strattec with 9 months result, ArvinMeritor andJohnson Controls with 6 months.


47

Benchmark – EBIT % net sales

V i s te o n

A u to li v

G e n te x

B o r g W a r n e rE a to n

Io c h p e - M a x i o n

J o h n s o n C o n t r o ls

C u m m i n s

A r v i n M e r i to rT e n n e c o

S t r a t te c

S u p e r i o rT i ta n

D u r a

L e a r

D e lp h iIn te r m e t

A m e r i c a n A x le

T o w e r

F e d e r a l M o g u l

D a n a

- 5 % 5 % 1 5 % 2 5 % 3 5 %

1 Q 0 4 1 Q 0 3 A v e r a g e = 7 %



48

Benchmark – EBITDA % net sales

L e a r

B o r g W a r n e r

T e n n e c o

S t r a t te c

Io c h p e - M a x i o n

A u to li v

A m e r i c a n A x le

T i ta n

F e d e r a l M o g u lD u r a

T o w e rD a n a

A r v i n M e r i to rD e lp h i

V i s te o n

J o h n s o n C o n t r o lsC u m m i n s

In te r m e t

0 % 5 % 1 0 % 1 5 % 2 0 % 2 5 %

1 Q 0 4 1 Q 0 3A v e r a g e = 1 0 %


OUTLOOK


50

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


51

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Iochpe-Maxion - 1Q04 Presentation