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2001 Presentation With Photos
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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
Automotive Industry - Worldwide Trends
compressing OEMs’ operational margins, leading to a consolidation process...
16
108
Actual 2005 2010
Independent OEMs - WorldwideNumber of companies
Automotive Industry - Worldwide Trends
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
Railroad Industry - Regional Trends
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
Railroad Industry - Regional Trends
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%
Subsidiaries and Joint Ventures
MAXION COMPONENTES ESTRUTURAIS
56%
Subsidiaries and Joint Ventures
Maxion Componentes Estruturais - CHASSIS
Products / Technology
Chassis /Maxion & Budd
Siderails/ MaxionCrossmembers/
Maxion
Market Segments
TruckBusPick-up Light commercialTractor
Subsidiaries and Joint Ventures
Maxion Componentes Estruturais - CHASSIS
Market Share - 2001 Customers - 2001
GM24%
OTHER13%
VW22%
SCANIA4%
DANA4%
FORD6%
EXPORT10%
DAIMLERCHRYSLER
17%
DANA / OTHER
23%
MAXION77%
Subsidiaries and Joint Ventures
Maxion Componentes Estruturais - WHEELS
Products / Technology
Road and Off-Road Wheels / Maxion
Market Segments
TruckBusTractor
Subsidiaries and Joint Ventures
Maxion Componentes Estruturais - WHEELS
Market Share - 2001
BORLEM48%
MAXION52%
Customers - 2001
EXPORT36%
OTHER10%
SCANIA7%AGCO
8%
VW10%
AFTERMARKET
18%
DAIMLERCHRYSLER
11%
Subsidiaries and Joint Ventures
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
Subsidiaries and Joint Ventures
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
Subsidiaries and Joint Ventures
MAXION COMPONENTES AUTOMOTIVOS
25%
Subsidiaries and Joint Ventures
Maxion Componentes Automotivos
Products / Technology
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
Subsidiaries and Joint Ventures
Maxion Componentes Automotivos
Market Share - 2001 Customers - 2001
Products
Window Raisers 41%
Latches 20%
Knobs / Keys /Cylinders (KKC) 8%
FORD11%
AFTER MARKET13%
GM16% VW
22%
FIAT38%
Subsidiaries and Joint Ventures
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
Subsidiaries and Joint Ventures
Maxion Componentes Automotivos
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
1999EBITDAR$ million
Subsidiaries and Joint Ventures
MAXION NACAM
5%
Subsidiaries and Joint Ventures
Maxion Nacam
Products / Technology
Steering Columns / ZF Lenksysteme
Market Segments
Cars
Subsidiaries and Joint Ventures
Maxion Nacam
Market Share - 2001 Customers - 2001
OTHER3%
EXPORT2%
VW7%
GM33%
FIAT55%
OTHER63%
MAXION37%
Subsidiaries and Joint Ventures
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
Subsidiaries and Joint Ventures
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
1999EBITDAR$ million
Subsidiaries and Joint Ventures
AMSTED-MAXION
14%
Subsidiaries and Joint Ventures
Amsted-Maxion
Products / Technology
Railroad Wheels / Maxion& Amsted
Railroad Freight Cars / Maxion & Johnstown
Castings / Maxion , Miner& Amsted
Market Segments
Railroad EquipmentIndustrial Castings
Subsidiaries and Joint Ventures
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%
Subsidiaries and Joint Ventures
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
Subsidiaries and Joint Ventures
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
1999EBITDAR$ million
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%
Iochpe-Maxion - Consolidated
Customers
JANUARY-DECEMBER 2001R$ 373,7 MM
General Motors
14%Export14%
Fiat12%
Other20%Scania
3%MRS4%
CVRD4%
Ford5%
Volkswagen
16%
DaimlerChrysler
8%
Iochpe-Maxion - Consolidated
Sales by Subsidiary
JANUARY - DECEMBER 2001R$ 373,7 MM
Amsted-Maxion
14%
Maxion Nacam
5%
Maxion Comp. Autom.25%
Maxion Comp. Estrut.56%
Iochpe-Maxion - Consolidated
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
Iochpe-Maxion - Consolidated
Iochpe-Maxion - Consolidated
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
Iochpe-Maxion - Consolidated
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