Iochpe-Maxion - 3Q07 Presentation

THIRD QUARTER 2007THIRD QUARTER 2007

November, 2007

Third Quarter 2007November, 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

� Net operating revenue of R$ 355.7 million, an increase of 14.1% over the same period of last year

� EBITDA(*) of R$ 57.5 million, an increase of 58.6% over the same period of last year

� Net income of R$ 30.1 million, an increase of 116.6% over the same period of last year

� Net debt bank of R$ 173.6 million (R$ 184.0 million in 3Q06), or 1.1x EBITDA LTM(*)

(1.0x in 3Q06)

3Q07 HIGHLIGHTS3Q07 HIGHLIGHTS

(*) 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

� Growth of the Brazilian production of vehicles and agricultural machinery

� Reduction of domestic demand for railway freight cars

� Impact of the real appreciation (1.8928 – 3Q07 x 2.1631 – 3Q06) on exports (R$ 8.1

million)

3Q07 – MAIN FACTORS3Q07 – MAIN FACTORS


5

50% 100%

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 EquipmentsRailway Equipments

Railway freight cars: R$ 28.7 million1 (8%)

Castings: R$ 35.8 million1 (10%) and wheels: R$ 9.2 million1 (3%)

Wheels and Chassis DivisionWheels and Chassis DivisionAutomotive Components Automotive Components

DivisionDivision

Wheels: R$ 104.0 million1 (29%)

Chassis: R$ 147.0 million1 (41%)

Autoparts: R$ 30.9 milhões1 (9%)

1 Consolidated net revenue in the third quarter of 2007

R$ 73.8 million1 (21%)

R$ 251.0 million1 (71%)

CORPORATE STRUCTURECORPORATE STRUCTURE

Industry Performance


7Source: Anfavea

180

216

318

366379

286295

98112

40

72

114

156 153

115 109

42 41

2002 2003 2004 2005 2006 9M06 9M07 3Q06 3Q07

Production Export

CAGR 02 – 06 = 20%

CAGR 02 – 06 = 40%∆ 06 - 05 = 3%

∆ 06 – 05 = (2%)∆ 9M07 - 06 = 3%

∆ 9M07 – 06 = (5%)

∆ 3Q07 – 06 = 14%

∆ 3Q07 – 06 = (1%)

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


8Source: Anfavea

69

79

107

117

106

79

100

28

38

5

13

25

38 39

28 30

10 11

2002 2003 2004 2005 2006 9M06 9M07 3Q06 3Q07

Production Export

CAGR 02 – 06 = 11%

CAGR 02 – 06 = 67% ∆ 06 – 05 = (10%)

∆ 06 – 05 = 1%

∆ 3Q07 – 06 = 34%

∆ 3Q07 – 06 = 8%

∆ 9M07 – 06 = 26%

∆ 9M07 – 06 = 6%

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


9Source: Anfavea

23

27

29

3534

28

30

9

11

7

9

13

19

16

12

10

54

2002 2003 2004 2005 2006 9M06 9M07 3Q06 3Q07

Production Export

CAGR 02 – 06 = 11%

CAGR 02 – 06 = 25%

∆ 06 – 05 = (15%)

∆ 06 – 05 = (4%)

∆ 3Q07 – 06 = (21%)

∆ 3Q07 – 06 = 16%

∆ 9M07 – 06 = 7%

∆ 9M07 – 06 = (16%)

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


10Source: Anfavea

52

59

69

53

46

36

48

12

19

10

21

31 31

22

1619

68

2002 2003 2004 2005 2006 9M06 9M07 3Q06 3Q07

Production Export

CAGR 02 – 06 = (3%)

CAGR 02 – 06 = 21%

∆ 06 – 05 = (27%)

∆ 06 – 05 = (13%)

∆ 3Q07 – 06 = 40%

∆ 3Q07 – 06 = 64%∆ 9M07 – 06 = 19%

∆ 9M07 – 06 = 35%

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


11

Source: Anfavea

1,521 1,505

1,757

2,0092,092

1,579

1,756

536638

363440

497

684635

489 445

166 161

2002 2003 2004 2005 2006 9M06 9M07 3Q06 3Q07

Production Export

CAGR 02 – 06 = 8%

CAGR 02 – 06 = 15%

∆ 06 – 05 = (7%)

∆ 06 – 05 = 4%

∆ 3Q07 – 06 = 19%

∆ 3Q07 – 06 = (3%)

∆ 9M07 – 06 = 11%

∆ 9M07 – 06 = (9%)

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


12Source: Amsted Maxion estimate

294

2,459

5,642

7,270

3,6053,291

656 728

282

2002 2003 2004 2005 2006 9M06 9M07 3Q06 3Q07

Production

CAGR 02 – 06 = 87% ∆ 06 – 05 = (50%)

∆ 9M07 – 06 = (80%)∆ 3Q07 – 06 = (61%)

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


13

MARKET SHARE – BRAZIL (9M07)MARKET SHARE – BRAZIL (9M07)

67%

21%

12%

Maxion

Dana

OEM

62%

33%

5%

Maxion

Borlem

Others

Maxion

Others

80%

20%

Maxion

Cruzaço

ChassisChassis

Source: Maxion Estimate

MaxionMaxion

9M069M0665%65% 55%55% 81%81% 80%80%

79%

21%

Commercial Vehicles Commercial Vehicles WheelsWheels

Railway Freight Railway Freight CarsCars

Railway Railway

CastingsCastings

Financial and Operating Performance


15

1,099

1,494

1,248

961

312 356

982

411

676

2002 2003 2004 2005 2006 9M06 9M07 3Q06 3Q07

∆ 06-05 = (17%)

NET OPERATING REVENUE (R$ million)NET OPERATING REVENUE (R$ million)

CAGR 02 – 06 = 32%

∆ 3Q07 – 06 = 14%

∆ 9M07 – 06 = (2%)


16

NET OPERATING REVENUE – 9M07NET OPERATING REVENUE – 9M07

24,9% 29,7%

31,8%

40,6%

6,6%

8,9%22,7%

7,1%

11,7% 10,8%

2,9%2,3%

9M06 9M07

Wheels Chassis Automotive Comp.

Freight Cars Castings Railway Wheels

Customer - 9M07 (%) Segment - 9M07 (%)

� Net Operating Revenue 9M07 – R$ 960.8 million

� Net Operating Revenue 3T07 – R$ 355.7 million

Daimler – 14.1%

Scania – 5.9%

Volvo – 2.1%

Volkswagen – 16.1%

GMB – 5.6%

Ford – 4.1%Fiat – 4.2%

Export – 19.5%

Tractors – 7.0%

CVRD – 1.7%

MRS – 3.9%

ALL – 0.8%

Caterpillar – 1.6%

Others – 13.3%


17

24

96

119

8794

31 31

47

33

2002 2003 2004 2005 2006 9M06 9M07 3Q06 3Q07

∆ 06-05 = 24%

EXPORTS (USD million)EXPORTS (USD million)

CAGR 02 –06 = 49%

∆ 3Q07 – 06 = (2)%

∆ 9M07 – 06 = 9%


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Destination - 9M07 (%)

Segment - 9M07 (%)

� Exports 9M07 – R$ 187.0 million (US$ 94.3 million)

� Exports 3T07 – R$ 58.4 million (US$ 30,8 million)

USA – 53.4%

Latin America – 17.5%

Africa & Middle East – 16.2%

Canada / Mexico – 4.7%

EXPORTS – 9M07EXPORTS – 9M07

37,80%29,50%

14,2%

56,1% 55,9%

5,7%0,4%0,4%

9M06 9M07

Wheels Chassis

Automotive Comp. Amsted-Maxion

Europe – 8.1%


19

32.8 27.7

0.4

48.652.8

13.45.0

0.4

9M06 9M07

Wheels Chassis

Automotive Comp, Amsted Maxion

EXPORTS (USD million)EXPORTS (USD million)

94.386.7

13.48.6

16.217.9

4.1

1.60.2

0.1

3Q06 3Q07

Wheels Chassis

Automotive Comp. Amsted-Maxion

30.831.3

Variance 9M07 - 06 (%) Variance 3T07 - 06 (%)

� Wheels – (15.5%)

� Chassis – 170.7%

� Automotive Comp. – 8.2%

� Amsted-Maxion – 8.7%

� Wheels – (35.8%)

� Chassis – 159.7%

� Automotive Comp. – 26.1%

� Amsted-Maxion – 10.5%


20

GROSS PROFIT (R$ million)GROSS PROFIT (R$ million)

87

137

228

185 184

5672

289

219

20%18%

19%19%21%20%21%

19% 18%

2002 2003 2004 2005 2006 9M06 9M07 3Q06 3Q07

Gross Profit % Net Sales


21

OPERATING INCOME – EBIT (R$ million)OPERATING INCOME – EBIT (R$ million)

36

58

127

178

136119

107

3049

11%

14%

10%

12%11%

12%12%

9%9%

2002 2003 2004 2005 2006 9M06 9M07 3Q06 3Q07

EBIT % Net Sales


22

EBITDA* (R$ million) EBITDA* (R$ million)

6989

156

205

163139 130

3657

17%

13%14%

13%

14%14%

12%

16%

14%

2002 2003 2004 2005 2006 9M06 9M07 3Q06 3Q07

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.


23

NET FINANCIAL EXPENSES (R$ million)NET FINANCIAL EXPENSES (R$ million)

54

38

261621

33

10

37 1%

2%

1%

2%2%2%

3%

6%

13%

2002 2003 2004 2005 2006 9M06 9M07 3Q06 3Q07

Financial Exp. % Net Sales


24

NET INCOME (R$ million)NET INCOME (R$ million)

14

30

(24)

5558 56

72

51

(5)-6%

-1%

5% 5% 5%6% 6%

5%

9%

2002 2003 2004 2005 2006 9M06 9M07 3Q06 3Q07

Net Income % Net Sales


25

NET BANK DEBT (R$ million)NET BANK DEBT (R$ million)

106132

174

115102 125

184

1.3

1.5

1.0

0.8

0.60.6

1.1

2002 2003 2004 2005 2006 9M06 9M07

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.


26

INDEBTEDNESS – sep 07 (R$ million)INDEBTEDNESS – sep 07 (R$ million)

Debt Indexation

76%

2% 22%

TJLP Dólar IGP-M

Average Cost (Sep 07)Average Cost (Sep 07)

8.1% per year8.1% per year

78% CDI78% CDI

� At the end of Sep 07, the company had contracted US$ 62.8 million of non-deliverable forward contracts at R$ 2.0113 average FX rate, for the period of Oct 07 to Sep 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

LINESSHORT

TERM

LONG

TERMTOTAL

Trade Finance / Export 24.2 35.7 59.9

Equipment Finance / EXIM 76.3 83.1 159.4

100.5 118.8 219.3

(-) Cash & Marketable Securities 45.7 45.7

Net Debt 54.8 118.8 173.6

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

in R$in R$

Index by DollarIndex by Dollar

in US$in US$


27

41

73

84

68

46 47

10

20

54

2002 2003 2004 2005 2006 9M06 9M07 3Q06 3Q07

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


28

OUTLOOK 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

Additional Information


30

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

(*) 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.

Income Statement - R$ thousand 3Q07 R.O.L 3Q06 R.O.L 9M07 R.O.L 9M06 R.O.L

Net Operating Revenue 355,705 100.0% 311,739 100.0% 960,822 100.0% 982,486 100.0%

Cost of Goods Sold (283,403) 79.7% (255,828) 82.1% (776,711) 80.8% (797,066) 81.1%

Gross Profit 72,301 20.3% 55,911 17.9% 184,111 19.2% 185,420 18.9%

Operating Expenses

General and Administrative (11,678) 3.3% (12,487) 4.0% (34,934) 3.6% (34,448) 3.5%

Commercial (1,333) 0.4% (1,719) 0.6% (4,209) 0.4% (4,359) 0.4%

Others (9,807) 2.8% (11,946) 3.8% (37,567) 3.9% (27,274) 2.8%

(22,817) 6.4% (26,152) 8.4% (76,709) 8.0% (66,081) 6.7%

Operating Income (EBIT) 49,484 13.9% 29,759 9.5% 107,402 11.2% 119,339 12.1%

Financial Results

Financial Revenue 832 0.2% 1,017 0.3% 4,548 0.5% 3,825 0.4%

Financial Expenses (2,896) 0.8% (7,149) 2.3% (14,873) 1.5% (19,738) 2.0%

(2,064) 0.6% (6,132) 2.0% (10,325) 1.1% (15,913) 1.6%

Earnings After Fiancial Income 47,420 13.3% 23,627 7.6% 97,077 10.1% 103,426 10.5%

Non Operating Results (830) 0.2% (4,826) 1.5% (7,703) 0.8% (17,196) 1.8%

Earnings Before Taxes 46,590 13.1% 18,801 6.0% 89,374 9.3% 86,230 8.8%

Income Taxes (16,530) 4.6% (4,924) 1.6% (34,013) 3.5% (29,835) 3.0%

Net Income 30,060 8.5% 13,877 4.5% 55,361 5.8% 56,395 5.7%

EBITDA 57,455 16.2% 36,366 11.7% 130,262 13.6% 139,318 14.2%


31

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

ASSETS LIABILITIES

Sep-07 Sep-06 Sep-07 Sep-06

CURRENT CURRENT

Cash 45,663 26,913 Loans 100,528 180,965

Receivables 176,473 202,321 Payables 75,160 45,867

Inventory 162,080 144,727 Customers Advance 11,323 22,743

Recoverable Taxes 22,937 18,009 Wage and Charges 45,301 41,079

Others 15,089 12,765 Taxes 8,757 7,286

422,242 404,735 Provisions - 9,273

Others 21,536 10,481

262,605 317,694

LONG TERM LONG TERM

Receivable 926 1,524 Loans 118,786 29,928

Deferred Income Taxes 23,197 34,785 Provisions 56,249 64,246

Others 23,623 16,544 Others 9,808 16,738

47,746 52,853 184,843 110,912

MINORITY - 216

PERMANENT EQUITY

Investiments 359 359 Capital 161,463 161,463

Plants, Property and Equipment 296,717 255,085 Capital Reserves 103,472 68,468

Deferred Items 680 2,116 Retained Earnings 55,361 56,395

297,756 257,560 320,296 286,326

TOTAL ASSETS 767,744 715,148 TOTAL LIABILITIES 767,744 715,148


32

SHARES PERFORMANCESHARES PERFORMANCE

Shares Price - LTM*

16.1120.80

29.8930.85

29.0030.10

24.80

22.3021.9117.0017.6916.19

14.75

15.1313.1813.18

23.99 22.7024.00

26.49

30.00

33.01 32.9935.00

Oct-06 Nov-06 Dec-06 Jan-07 Feb-07 Mar-07 Apr-07 May-07 Jun-07 Jul-07 Aug-07 Sep-07

MYPK4 MYPK3

Average Daily Trade Volume - R$ mil

7,0484,227 4,547 4,344 2,857 8,354 2,747 3,466 2,948 7,738 3,723 4,114

899186

70

171 175

119

86

182

84

99

69


Volume Trade

Variance - LTM*

93.59%

41.90%

14.57%

99.81%

49.23%

25.67%22.01%

65.89%

47.67%

25.98%22.98%

67.83%

-10.00%

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

70.00%

80.00%

90.00%

100.00%


MYPK4 IBOV IBX-100

* Closing price of the last business day of each month


33

SHAREHOLDERS COMPOSITION: Sep 07SHAREHOLDERS COMPOSITION: Sep 07

IochpeIochpe FamilyFamily BNDES ParticipaBNDES Participaçõçõeses

IssuedIssued SharesShares (*)(*)

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%

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%

Voting

Non-Voting

VotingNon-Voting

VotingNon-Voting

VotingNon-Voting

Other

THIRD QUARTER 2007THIRD QUARTER 2007

November, 2007

Investor Relations

Iochpe-Maxion - 3Q07 Presentation