Iochpe-Maxion - 2Q07 Presentation

Second Quarter 2007Second Quarter 2007

August, 2007

Second Quarter 2007August, 2007

2

DISCLAIMERDISCLAIMER

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.


3

2Q07 HIGHLIGHTS2Q07 HIGHLIGHTS

� Consolidated net operating revenue of R$ 319.0 million, 3.5% decrease over 2Q06.

� EBITDA(*) of R$ 36.4 million, 37.5% decrease over 2Q06.

� Net income of R$ 13.9 million, 49.7% lower than 2Q06.

� Net bank debt of R$ 164.0 million (R$ 180.6 million in 2Q06), or 1.2x LTM EBITDA(*) (0.9x no 2Q06).

Note: Positive non recurring effect of R$ 12.8 million in 2Q06 and 1H06, due to favorable court decision in tax litigation (Confins).

(*) 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

2Q07 – MAIN FACTORS2Q07 – MAIN FACTORS

� Strong reduction of railway freight car demand.

� Reduction of the North-American demand for railway castings.

� Growth of the Brazilian production of trucks and agricultural machinery.

� Impact of the real appreciation (1.9630 – 2Q07 x 2.1847 – 2Q06) on exports (R$ 7.3 million).


5

Railway freight cars: 6%1

50% 100%

Castings 11%1 and wheels 3%1

Frame: 41%1

Wheels: 31%1

Autoparts for passenger cars: 9%1

IochpeIochpe--Maxion S.A.Maxion S.A.

AmstedAmsted--Maxion Fundição e Maxion Fundição e Equipamentos Ferroviários S.A.Equipamentos Ferroviários S.A.

Maxion Sistemas Automotivos Maxion Sistemas Automotivos Ltda.Ltda.

Railway EquipmentRailway Equipment Wheels and Frame DivisionWheels and Frame Division Automotive Component Automotive Component DivisionDivision

CORPORATE STRUCTURECORPORATE STRUCTURE

1 % of consolidated net revenues in the second quarter of 2007

Industry Performance


7

2002 2003 2004 2005 2006 1H06 1H07 2Q06 2Q07

Production ExportSource: Anfavea

CAGR 02 – 06 = 20%

CAGR 02 – 06 = 40%

∆ 06 - 05 = 3%

∆ 06 – 05 = (2%)

∆ 2Q 07 - 06 = 0%

∆ 2Q 07 – 06 = (4%)

∆ 1H 07 – 06 = (2%)

∆ 1H 07 – 06 = (8%)

180

216

318

377366

40

72

114

156 153

188 184

73 68

98 98

39 37

LIGHT COMMERCIALS – BRAZIL (‘000 units)LIGHT COMMERCIALS – BRAZIL (‘000 units)


8

2002 2003 2004 2005 2006 1H06 1H07 2Q06 2Q07

Production Export

TRUCKS – BRAZIL (‘000 units)TRUCKS – BRAZIL (‘000 units)

CAGR 02 – 06 = 11%

CAGR 02 – 06 = 67% ∆ 06 – 05 = (10%)

∆ 06 – 05 = 1%

Source: Anfavea

∆ 2Q 07 – 06 = 28%

∆ 2Q 07 – 06 = (0)%69

79

107 106

117

5

13

25

38 39

27

10

34

10

51

62

18 18

∆ 1H 07 – 06 = 21%

∆ 1H 07 – 06 = 3%


9

2002 2003 2004 2005 2006 1H06 1H07 2Q06 2Q07

Production Export

BUSES – BRAZL (‘000 units)BUSES – BRAZL (‘000 units)

CAGR 02 – 06 = 11%

CAGR 02 – 06 = 25%

∆ 06 – 05 = (15%)

∆ 06 – 05 = (4%)

Source: Anfavea

∆ 2Q07 – 06 = 1%

∆ 2Q07 – 06 = 3%

23

2729

3435

7

9

13

19

16

10

4

11

4

1919

87

∆ 1H07 – 06 = (15%)

∆ 1H07 – 06 = 2%


10

2002 2003 2004 2005 2006 1H06 1H07 2Q06 2Q07

Production Export

CAGR 02 – 06 = (3%)

CAGR 02 – 06 = 21%

∆ 06 – 05 = (27%)

∆ 06 – 05 = (13%)

Source: Anfavea

∆ 2Q 07 – 06 = 12%

∆ 2Q07 – 06 = 32%52

59

69

46

53

10

21

31 31

22

13

6

17

7

∆ 1H07 – 06 = 2%

∆ 1H07 – 06 = 21%

2429

11 12

AGRICULTURAL MACHINERY – BRAZIL (‘000 units)AGRICULTURAL MACHINERY – BRAZIL (‘000 units)


11

2002 2003 2004 2005 2006 1H06 1H07 2Q06 2Q07

Production Export

CAGR 02 – 06 = 8%

CAGR 02 – 06 = 15%

∆ 06 – 05 = (7%)

∆ 06 – 05 = 4%

Source: Anfavea

∆ 2Q07 – 06 = (15%)

∆ 2Q07 – 06 = 9%

1,521 1,505

1,757

2,0902,009

363440

497

684 637536

167

584

142

1,043 1,117

323 283

∆ 1H07 – 06 = 7%

∆ 1H07 – 06 = (12%)

PASSENGER CARS – BRAZIL (‘000 units)PASSENGER CARS – BRAZIL (‘000 units)


12

2002 2003 2004 2005 2006 1H06 1H07 2Q06 2Q07

Market

Source: Amsted Maxion estimate

CAGR 02 – 06 = 87% ∆ 06 – 05 = (50%)

∆ 2Q 07 – 06 = (92%)

294

2,459

5,642

3,605

7,270

1,254

98

2,563

238

∆ 1H07 – 06 = (91%)

RAILWAY FREIGHT CARS – BRAZIL (units)RAILWAY FREIGHT CARS – BRAZIL (units)


13

MARKET SHARE – BRAZIL (1H07)MARKET SHARE – BRAZIL (1H07)

67%

21%

12%

Maxion

Dana

OEM

62%

34%

5%

Maxion

Borlem

Others

65%

35%

Maxion 80%

20%

Maxion

Cruzaço

ChassisChassis

Commercial Vehicles Commercial Vehicles WheelsWheels

Railway Railway

CastingsCastings

Source: Maxion estimate

MaxionMaxion

1H061H0671%71% 57%57% 82%82% 80%80%

Railway Freight Railway Freight CarsCars

Usimec

Finance and Operating Performance


15

Segment (%) Customer (%)

40%

30%

11%

3%9%

6%

Chassis(2)

Castings(1)

22%

16%6%

6%

7%

4%3%

22%

14%

Others

Volkswagen

General Motors

DaimlerChrysler

Tratctors

Exports

Scania

R$ 605 millionR$ 605 million

Automotive Comp.

Ford

MRS

NET OPERATING REVENUE – 1H07NET OPERATING REVENUE – 1H07

Commercial Vehicle Wheels(2)

FreightRailcars(1)

RailwayWheels(1)

(1) Amsted Maxion

(2) Wheels and Frames Division of Maxion Sistemas Automotivos


16

671605

330 319

1,248

1,099

1,494

411

676

2002 2003 2004 2005 2006 1H06 1H07 2Q06 2Q07

∆ 06-05 = (17%)

CAGR 02 – 06 = 32%

∆ 2Q 07 – 06 = (4%)

∆ 1H 07 – 06 = (10%)

� Net operating revenue in 2Q07

� Decrease of 3.5% over 2Q06

� This performance is due to:

� Reduction of domestic demand for railway freight cars

� Reduction of USA demand for railway castings

� Impact of Real appreciation on exports

� Increase of Brazilian trucks and Agriculture machinery production

NET OPERATING REVENUE – 1H07NET OPERATING REVENUE – 1H07


17

EXPORTS – 1H07EXPORTS – 1H07

Segment (%) Destination (%)

55%

30%

15%

Railway and Industrial Castings

Chassis

Commercial Vehicles Wheels

51% 26%

10%6%

8%Europe

África/Middle EastCanadá/

México

USALatin

America

US$ 64 million*US$ 64 million*

R$ 129 millionR$ 129 million

(*) In 1H06 US$56 million, equivalent to R$ 121 million


18

24

96

119

5664

2634

47

33

2002 2003 2004 2005 2006 1H06 1H07 2Q06 2T07

∆ 06-05 = 24%

CAGR 02 –06 = 49%

∆ 2Q07 – 06 = 28%

∆ 1H07 – 06 = 14%

EXPORTS (US$ million)EXPORTS (US$ million)


19

EXPORTS (US$ million)EXPORTS (US$ million)

Division 2Q07 2Q06 Var. 1H07 1H06 Var.

Commercial Vehicles Wheels 9.9 10.8 -8.0% 19.1 19.6 -2.4%

Chassis 5.2 1.4 271.0% 9.3 3.4 174.2%

Automotive Components 0.1 0.1 27.6% 0.2 0.2 8.7%

Amsted-Maxion 37.0 28.2 31.2% 69.8 64.8 7.7%

Consolidation Adjustment (50%) (18.5) (14.1) (34.9) (32.4)

33.8 26.4 27.9% 63.6 55.6 14.3%


20

GROSS PROFITGROSS PROFIT

87

137

228

130112

66 58

289

219

18%20%

19%19%21%20%21%

19%18%

0

50

100

150

200

250

300

350

2002 2003 2004 2005 2006 1H06 1H07 2Q06 2Q07

0%

10%

20%

30%

40%

50%

R$ MM % Net Sales


21

36

58

127

178

136

90

58 52

29

10%9%

16%

13%

11%

12%12%

9%9%

0

50

100

150

200

2002 2003 2004 2005 2006 1H06* 1H07 2Q06* 2Q07

0%

5%

10%

15%

20%

R$ MM % Net Sales

EARNINGS BEFORE INTEREST AND TAXES - EBITEARNINGS BEFORE INTEREST AND TAXES - EBIT

(*) 2Q06 and 1H06 include R$12.8 million of non recurrent results, or 320 basis points of EBIT margin on 2Q06 and 160 basis points on1H06


22

EBITDA (*)EBITDA (*)

6989

156

205

163

103

7358

36

17%

13%

14% 14%

13%

15%

12%

18%

11%

0

50

100

150

200

250

2002 2003 2004 2005 2006 1H06** 1H07 2Q06** 2Q07

0%

5%

10%

15%

20%R$ MM % Net Sales


(**) 2Q06 and 1H06 include R$12.8 million of non recurrent results, or 320 basis points of EBIT margin on 2Q06 and 160 basis points on1H06


23

54

38

441021

33

837

1%1%1%2%

2%2%

3%

6%

13%

0

25

50

75

2002 2003 2004 2005 2006 1H06 1H07 2Q06 2Q07

0%

5%

10%

15%

R$ MM % Net Sales

NET FINANCIAL EXPENSESNET FINANCIAL EXPENSES


24

(24)

28

1425

5843

72

51

(5)

-6%

-1%

5% 5% 5%

6%

4%

8%

4%

(40)

(20)

0

20

40

60

80

2002 2003 2004 2005 2006 1H06* 1H07 2Q06* 2Q07

-10%

-5%

0%

5%

10%

15%

20%

R$ MM % Net Sales.

(*) 2Q06 and 1H06 include R$12.8 million of non recurrent results

NET INCOMENET INCOME


25

R$ MM x EBITDA (*)

106132

164

115102 125

181

1.5

1.3

0.9

0.8

0.60.6

1.2

0

25

50

75

100

125

150

175

200

2002 2003 2004 2005 2006 1H06 1H07

0.0

0.5

1.0

1.5

2.0

(*) 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

NET BANK DEBTNET BANK DEBT


26

INDEBTEDNESS – jun/07 (R$ million)INDEBTEDNESS – jun/07 (R$ million)

Debt Indexation

86%

13%1%

TJLP Dólar IGP-M

Average Cost (Average Cost (junjun/07)/07)

Index byIndex by DDóólarlar

in US$in US$

Index byIndex by TJLP, CDI e IGPM TJLP, CDI e IGPM

in R$in R$

8,6% a.a.8,6% a.a.

78% CDI78% CDI

LINESSHORT

TERM

LONG

TERMTOTAL

Trade Finance / Export 10.0 29.4 39.4

Equipment Finance / EXIM 73.4 97.7 171.1

83.4 127.1 210.5

(-) Cash and Marketable Securities 46.5 46.5

Net Debt 37.0 127.1 164.1


27

41

73

84

68

3528

22

12

54

2002 2003 2004 2005 2006 1H06 1H07 2Q06 2Q07

CAPEX (R$ million)CAPEX (R$ million)


28

2007 / 2008 OUTLOOK2007 / 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


29

Speech in the ceremony of the new Maxion plant in China (Nantong) Speech in the ceremony of the new Maxion plant in China (Nantong)

Additional Information


31

INCOME STATEMENT (R$ thousand)INCOME STATEMENT (R$ thousand)


Income Statement - R$ thousand 2Q07 N.O.R 1H07 N.O.R 2Q06 N.O.R 1H06 R.O.L

Net Revenue 318,963 100.0% 605,117 100.0% 330,426 100.0% 670,747 100.0%

Cost of Goods Sold (261,247) 81.9% (493,307) 81.5% (264,755) 80.1% (541,238) 80.7%

Gross Profit 57,716 18.1% 111,810 18.5% 65,671 19.9% 129,509 19.3%

Operating Expenses

General and Administrative (10,831) 3.4% (23,256) 3.8% (10,459) 3.2% (21,964) 3.3%

Commercial (15,669) 4.9% (29,099) 4.8% (13,591) 4.1% (28,299) 4.2%

Others (2,400) 0.8% (1,536) 0.3% 10,276 -3.1% 10,334 1.5%

(28,900) 9.1% (53,892) 8.9% (13,774) 4.2% (39,929) 6.0%

Earnings Before Interest and Taxes (EBIT) 28,816 9.0% 57,918 9.6% 51,897 15.7% 89,580 13.4%

Financial Result

Financial Revenue 3,497 1.1% 8,241 1.4% 5,615 1.7% 8,384 1.2%

Financial Expenses (7,128) 2.2% (16,502) 2.7% (9,234) 2.8% (18,165) 2.7%

(3,631) 1.1% (8,261) 1.4% (3,619) 1.1% (9,781) 1.5%

Earnings After Financial Income 25,185 7.9% 49,657 8.2% 48,278 14.6% 79,799 11.9%

Non Operating Result (2,605) 0.8% (6,873) 1.1% (7,264) 2.2% (12,370) 1.8%

Earning Before Taxes 22,580 7.1% 42,784 7.1% 41,014 12.4% 67,429 10.1%

Income Taxes (8,693) 2.7% (17,483) 2.9% (13,400) 4.1% (24,911) 3.7%

Net Income 13,887 4.4% 25,301 4.2% 27,614 8.4% 42,518 6.3%

EBITDA 36,417 11.4% 72,807 12.0% 58,281 17.6% 102,952 15.3%


32

BALANCE SHEET (R$ thousand)BALANCE SHEET (R$ thousand)

ASSET LIABILITIES

Jun-07 Jun-06 Jun-07 Jun-06

CURRENT CURRENT

Cash and Marketable Securities 46,457 52,666 Loans 83,451 193,297

Receivables 156,345 222,179 Payables 72,322 62,057

Inventory 146,990 150,149 Customers Advance 15,885 50,611

Recoverable Taxes 33,557 20,399 Wages and Charges 39,093 38,526

Others 18,240 17,089 Taxes 5,663 5,609

401,589 462,482 Provisions - 1,521

Others 21,970 19,131

238,384 370,752

LONG TERM LONG TERM

Receivable 932 2,128 Loans 127,062 39,946

Deferred Income Taxes 24,958 27,702 Provisions 58,226 61,620

Others 12,406 14,893 Others 12,226 16,035

38,296 44,723 197,514 117,601

MINORITY - 212

PERMANENT EQUITY

Investments 359 369 Capital 161,463 161,463

Plants, Property and Equipment 284,842 251,161 Capital Reserves 103,472 68,468

Deferred Itens 1,048 2,279 Retained Earnings 25,301 42,518

286,249 253,809 290,236 272,449

TOTAL ASSET 726,134 761,014 TOTAL LIABILITIES 726,134 761,014


33

Shares Price - 2007

14.00

16.00

18.00

20.00

22.00

24.00

26.00

28.00

30.00

32.00

1/2/2007 1/18/2007 2/3/2007 2/19/2007 3/7/2007 3/23/2007 4/8/2007 4/24/2007 5/10/2007 5/26/2007 6/11/2007 6/27/2007

MYPK4 MYPK3

SHARES PERFORMANCESHARES PERFORMANCE

29.8929.89

30.0030.00

Shares Performance - 2007

64.68%

24.00% 20.08% 22.69%15.91%

1MYPK4 Ibovespa ISEIGCIBX-100

Average Daily Trade Volume - R$

3,097,132

4,324,368

3,122,009

4,437,517

1H06 1H07 2Q06 2Q07

39,6% 42,1%


34

SHAREHOLDERS COMPOSITION: jun-07SHAREHOLDERS COMPOSITION: jun-07

IochpeIochpe FamilyFamily BNDES ParticipaBNDES Participaçõçõeses OtherOther

IssuedIssued SharesShares (*)(*)

CommonCommon

PreferredPreferred

TotalTotal

18,428,59718,428,597

34,803,70734,803,707

53,232,30453,232,304

34.62%34.62%

65.38%65.38%

100.00%100.00%

VotingVotingNonNon--VotingVoting

TotalTotal

74.6%74.6%0.4%0.4%

26.1%26.1%


TotalTotal

21.8%21.8%27.6%27.6%

25.6%25.6%


TotalTotal

3.6%3.6%72,0%72,0%

48.3%48.3%

Second Quarter 2007Second Quarter 2007

August, 2007

Investor Relations

Iochpe-Maxion - 2Q07 Presentation