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Earnings Release – 4Q07 / 2007 Earnings Release – 4Q07 / 2007 February, 2008

Iochpe-Maxion - 4Q07 Presentation

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4th Quarter 2007 Presentation

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Page 1: Iochpe-Maxion - 4Q07 Presentation

Earnings Release – 4Q07 / 2007Earnings Release – 4Q07 / 2007

February, 2008

Page 2: Iochpe-Maxion - 4Q07 Presentation

4Q07/2007February, 2008

2

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.

DISCLAIMERDISCLAIMER

Page 3: Iochpe-Maxion - 4Q07 Presentation

4Q07/2007February, 2008

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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$ 47.0 million1 (14%)

Castings: R$ 27.4 million1 (8%) and wheels: R$ 5.1 million1 (2%)

Wheels and Chassis DivisionWheels and Chassis DivisionAutomotive Components Automotive Components

DivisionDivision

Wheels: R$ 88.8 million1 (27%)

Chassis: R$ 131.5 million1 (40%)

Autoparts: R$ 28.7 milhões1 (9%)

1 Consolidated net revenue in the fourth quarter of 2007

R$ 79.5 million1 (24%)

R$ 220.3 million1 (67%)

SIMPLIFIED CORPORATE STRUCTURESIMPLIFIED CORPORATE STRUCTURE

Page 4: Iochpe-Maxion - 4Q07 Presentation

4Q07/2007February, 2008

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� Consolidated net operating revenue of R$ 328.5 million in 4Q07 and R$ 1,289.2 in 2007, an increase of 23.9% and 3.3% respectively, over the same period of last year

� EBITDA(*) of R$ 35.2 million in 4Q07 and R$ 164.5 million in 2007, an increase of 47.8% and 1.1% respectively, over the same period of last year

� Net income of R$ 17.0 million in 4Q07 and R$ 72.4 in 2007, an increase of 1,129.0% and 25.1% respectively, over the same period of last year

� Net debt bank of R$ 128.3 million (R$ 132.3 million in Dec/06), or 0.8x EBITDA LTM(*)

(0.8x in Dec/06)

HIGHLIGHTSHIGHLIGHTS

(*) 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.

Page 5: Iochpe-Maxion - 4Q07 Presentation

4Q07/2007February, 2008

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4Q07 – MAIN DRIVERS4Q07 – MAIN DRIVERS

� Growth of the Brazilian production of vehicles and agricultural machinery

� Recovery of domestic demand for railway freight cars

� Impact of the real appreciation (1.7665 – 4Q07 x 2.1499 – 4Q06) on net revenue of

exports (reduction R$ 10.0 million)

Page 6: Iochpe-Maxion - 4Q07 Presentation

Industry Performance

Page 7: Iochpe-Maxion - 4Q07 Presentation

4Q07/2007February, 2008

7

180

216

318

366379

408

94112

40

72

114

156 153144

37 35

2002 2003 2004 2005 2006 2007 4Q06 4Q07

Production Export

CAGR 02 – 07 = 18%

CAGR 02 – 07 = 29%∆ 07 - 06 = 8%

∆ 07 – 06 = (6%)

∆ 4Q07 – 06 = 20%

∆ 4Q07 – 06 = (7%)

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

Source: Anfavea

Page 8: Iochpe-Maxion - 4Q07 Presentation

4Q07/2007February, 2008

8

69

79

107

117

106

137

27

37

5

13

25

38 39 41

10 11

2002 2003 2004 2005 2006 2007 4Q06 4Q07

Production Export

CAGR 02 – 07 = 15%

CAGR 02 – 07 = 52%

∆ 07 – 06 = 29%

∆ 07 – 06 = 8%

∆ 4Q07 – 06 = 37%

∆ 4Q07 – 06 = 12%

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

Source: Anfavea

Page 9: Iochpe-Maxion - 4Q07 Presentation

4Q07/2007February, 2008

9

23

27

29

3534

39

6

9

7

9

13

19

1615

45

2002 2003 2004 2005 2006 2007 4Q06 4Q07

Production Export

CAGR 02 – 07 = 11%

CAGR 02 – 07 = 25%

∆ 07 – 06 = 6%

∆ 07 – 06 = 15%

∆ 4Q07 – 06 = 29%

∆ 4Q07 – 06 = 54%

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

Source: Anfavea

Page 10: Iochpe-Maxion - 4Q07 Presentation

4Q07/2007February, 2008

10

52

59

69

53

46

65

11

17

10

21

31 31

22

27

58

2002 2003 2004 2005 2006 2007 4Q06 4Q07

Production Export

CAGR 02 – 07 = 5%

CAGR 02 – 07 = 22%

∆ 07 – 06 = 24%

∆ 07 – 06 = 41%

∆ 4Q07 – 06 = 39%

∆ 4Q07 – 06 = 63%

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

Source: Anfavea

Page 11: Iochpe-Maxion - 4Q07 Presentation

4Q07/2007February, 2008

11

1,521 1,505

1,757

2,0092,092

2,389

513633

363440

497

684 635 586

147 144

2002 2003 2004 2005 2006 2007 4Q06 4Q07

Production Export

CAGR 02 – 07 = 9%

CAGR 02 – 07 = 10%

∆ 07 – 06 = (8%)

∆ 07 – 06 = 14%

∆ 4Q07 – 06 = 24%

∆ 4Q07 – 06 = (2%)

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

Source: Anfavea

Page 12: Iochpe-Maxion - 4Q07 Presentation

4Q07/2007February, 2008

12

294

2,459

5,642

7,270

3,668

1,249

314

729

2002 2003 2004 2005 2006 2007 4Q06 4Q07

Production

CAGR 02 – 07 = 34%

∆ 07 – 06 = (66%)

∆ 4Q07 – 06 = 132%

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

Source: Amsted Maxion estimate

Page 13: Iochpe-Maxion - 4Q07 Presentation

4Q07/2007February, 2008

13

MARKET SHARE – BRAZIL (2007)MARKET SHARE – BRAZIL (2007)

67%

21%

12%

Maxion

Dana

OEM

61%

33%

6%

Maxion

Borlem

Others

Maxion

Others

80%

20%

Maxion

Cruzaço

ChassisChassis

MaxionMaxion

2006200666%66% 57%57% 81%81% 80%80%

89%

11%

Commercial Vehicles Commercial Vehicles WheelsWheels

Railway Freight Railway Freight CarsCars

Railway Railway

CastingsCastings

Source: Maxion Estimate

Page 14: Iochpe-Maxion - 4Q07 Presentation

Financial and Operating Performance

Page 15: Iochpe-Maxion - 4Q07 Presentation

4Q07/2007February, 2008

15

1,099

1,494

1,248

265329

1,289

411

676

2002 2003 2004 2005 2006 2007 4Q06 4Q07

CAGR 02 – 07 = 26%

∆ 4Q07 – 06 = 24%

∆ 07 – 06 = 3%

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

Page 16: Iochpe-Maxion - 4Q07 Presentation

4Q07/2007February, 2008

16

991 1,056

233257

2006 2007

Domestic Export

1,248 1,289

427279

896

90 115

730

2006 2007

Railway Wheels and Chassis Automotive Comp.

Customer - 2007 (%)

Daimler – 13.6%

Scania – 5.7%

Volvo – 2.0%

Volkswagen – 16.8%

GMB – 5.8%

Ford – 3.9%Fiat – 4.5%

Export – 18.1%

Tractors – 6.9%

CVRD – 3.0%

MRS – 4.4%

ALL – 0,7%

Caterpillar – 1.5%

Others – 13.1%

1,248 1,289

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

Page 17: Iochpe-Maxion - 4Q07 Presentation

4Q07/2007February, 2008

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24

96

119 120

3226

47

33

2002 2003 2004 2005 2006 2007 4Q06 4Q07

CAGR 02 –07 = 38%

∆ 4Q07 – 06 = (19)%

∆ 07 – 06 = 1%

EXPORTS (USD million)EXPORTS (USD million)

Page 18: Iochpe-Maxion - 4Q07 Presentation

4Q07/2007February, 2008

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Segment

63 64

56

0 1

56

2006 2007

Railway Wheels and Chassis Automotive Comp.

1411

14

0

0

18

4Q06 4Q07

Railway Wheels and Chassis Automotive Comp.

119 120

32

26

Destination - 2007 (%)

USA – 49.7%

Latin America – 23.1%

Africa & Middle East – 16.2%

Canada / Mexico – 4.7%

Europe – 9.4%

� Exports 2007 – R$ 232.8 million (US$ 120.2 million)

� Exports 4Q07 – R$ 45.8 million (US$ 26.0 million)

EXPORTS (USD million)EXPORTS (USD million)

Page 19: Iochpe-Maxion - 4Q07 Presentation

4Q07/2007February, 2008

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87

137

228

3452

236289

219

16%

13%

18%21%20%21%

19%18%

2002 2003 2004 2005 2006 2007 4Q06 4Q07

Gross Profit % Net Sales

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

Page 20: Iochpe-Maxion - 4Q07 Presentation

4Q07/2007February, 2008

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36

58

127

178

136 135

1727

6%

8%

10%11%

12%12%

9%9%

2002 2003 2004 2005 2006 2007 4Q06 4Q07

EBIT % Net Sales

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

Page 21: Iochpe-Maxion - 4Q07 Presentation

4Q07/2007February, 2008

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6989

156

205

163 165

2435

17%

13%

9%

11%

13%13%14%14%

2002 2003 2004 2005 2006 2007 4Q06 4Q07

EBITDA % Net Sales

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

(*) 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.

Page 22: Iochpe-Maxion - 4Q07 Presentation

4Q07/2007February, 2008

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38

54

-1

10

21

33

5

37

0%

2%

1%2%

2%3%

6%

13%

2002 2003 2004 2005 2006 2007 4Q06 4Q07

Financial Exp. % Net Sales

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

Page 23: Iochpe-Maxion - 4Q07 Presentation

4Q07/2007February, 2008

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17

(24)

1

58

7272

51

(5)-6%

-1%

5%

1%

6%5%5%5%

2002 2003 2004 2005 2006 2007 4Q06 4Q07

Net Income % Net Sales

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

Page 24: Iochpe-Maxion - 4Q07 Presentation

4Q07/2007February, 2008

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106132115

102 125128

1.3

1.5

0.80.8

0.60.6

2002 2003 2004 2005 2006 2007

Net Debt x EBITDA

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

(*) 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.

Page 25: Iochpe-Maxion - 4Q07 Presentation

4Q07/2007February, 2008

25

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

Debt Indexation

79%

18%3%

TJLP Dollar IGP-M

Average Cost (Dec/07)Average Cost (Dec/07)

8.1% per year8.1% per year

80% CDI80% CDIIndex by TJLP, CDI e IGPM Index by TJLP, CDI e IGPM

in R$in R$

Index by DollarIndex by Dollar

in US$in US$

� At the end of Dec 07, the company had contracted US$ 45.8 million of non-deliverable forward contracts at R$ 1.9852 average FX rate, for the period of Jan to Dec 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 31.2 32.9 64.0

Equipment Finance / EXIM 100.6 115.2 215.8

131.8 148.0 279.9

(-) Cash & Marketable Securities 151.5 0.0 151.5

Net Debt (19.7) 148.0 128.3

Page 26: Iochpe-Maxion - 4Q07 Presentation

4Q07/2007February, 2008

26

41

73

84

6868

22 20

54

2002 2003 2004 2005 2006 2007 4Q06 4Q07

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

Page 27: Iochpe-Maxion - 4Q07 Presentation

Capital Market

Page 28: Iochpe-Maxion - 4Q07 Presentation

4Q07/2007February, 2008

28

� Capital structure composed by common shares only

� Board of Directors composed by at least 20% of independent members

� 100% Tag Along in case of transfer of control

� A special shareholders meeting for holders of the Company`s preferred shares held on January 17, 2008 approved the conversion of

Iochpe-Maxion's preferred shares into common shares at a conversion rate of 1.2 preferred shares for each common share

� An extraordinary general meeting of shareholders held on the same day approved the share conversion; it also approved a proposed

amendment to the Company’s bylaws, as well as the Company’s migration to the Novo Mercado listings and the election of new

members to the Company’s board of directors

� After the deadline of the shareholder´s right of withdrawal (02/20/08), will begin the process of the conversion of the preferred shares

into common shares

New Iochpe-Maxion

STOCKHOLDING RESTRUCTURING - SUBSEQUENT FACTSTOCKHOLDING RESTRUCTURING - SUBSEQUENT FACT

Page 29: Iochpe-Maxion - 4Q07 Presentation

4Q07/2007February, 2008

29

Iochpe-Maxion – Shareholders Structure on 12/31/2007

Iochpe-Maxion – Expected Shareholders Structure After the Conversion

SHAREHOLDERS STRUCTURESHAREHOLDERS STRUCTURE

Shareholder Common % % of Total Preferred % % of Total Total %

Ioschpe Family 13,924,267 75.56% 26.16% 143,942 0.41% 0.27% 14,068,209 26.43%

BNDESPAR 4,012,050 21.77% 7.54% 9,612,777 27.62% 18.06% 13,624,827 25.60%

Controlling Shareholders 17,936,317 97.33% 33.69% 9,756,719 28.03% 18.33% 27,693,036 52.02%

Other 492,280 2.67% 0.92% 25,046,988 71.97% 47.05% 25,539,268 47.98%

Total 18,428,597 100.00% 34.62% 34,803,707 100.00% 65.38% 53,232,304 100.00%

Shareholder Common % % of Total Preferred % % of Total Total %

Ioschpe Family 14,044,219 29.61% 29.61% - 0.00% 0.00% 14,044,219 29.61%

BNDESPAR 12,022,698 25.35% 25.35% - 0.00% 0.00% 12,022,698 25.35%

Controlling Shareholders 26,066,917 54.96% 54.96% - 0.00% 0.00% 26,066,917 54.96%

Other 21,364,770 45.04% 45.04% - 0.00% 0.00% 21,364,770 45.04%

Total 47,431,687 100.00% 100.00% - 0.00% 0.00% 47,431,687 100.00%

Page 30: Iochpe-Maxion - 4Q07 Presentation

4Q07/2007February, 2008

30

Price - LTM*

24.80

30.85

37.4035.5036.40

29.0030.1029.89

22.3021.9120.80

17.00

24.0022.70

23.99

16.11

26.49

30.00

33.01 32.9935.00

37.00 37.00

43.00

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

MYPK4 MYPK3

Average Daily Trade Volume - R$ mil

4,114

2,857

8,354

2,7473,466

2,948

7,048 7,738

3,723 5,577

2,598 2,952

5556

110

89

86

182

84

99

69

70

86 91

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

Volume Trades

Shares Performance - 2007

111.42%

43.65% 47.83%

31.55%40.33%

MYPK4 Ibovespa IBX-100 IGC ISE

MYPK4 Ibovespa IBX-100 IGC ISE

* Closing price of the last business day of each month

SHARES PERFORMANCESHARES PERFORMANCE

Page 31: Iochpe-Maxion - 4Q07 Presentation

4Q07/2007February, 2008

31

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

Page 32: Iochpe-Maxion - 4Q07 Presentation

Additional Information

Page 33: Iochpe-Maxion - 4Q07 Presentation

4Q07/2007February, 2008

33

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.

Consolidated Income Statement R$

thousand2007 N.O.R 2006 N.O.R 4Q07 N.O.R 4Q06 N.O.R

Net Operating Revenue 1,289,282 100.0% 1,247,574 100.0% 328,459 100.0% 265,088 100.0%

Cost of Goods Sold (1,053,576) 81.7% (1,028,339) 82.4% (276,866) 84.3% (231,273) 87.2%

Gross Profit 235,706 18.3% 219,235 17.6% 51,593 15.7% 33,815 12.8%

Operating Expenses

General and Administrative (47,041) 3.6% (41,755) 3.3% (12,108) 3.7% (7,307) 2.8%

Commercial (5,805) 0.5% (5,733) 0.5% (1,597) 0.5% (1,374) 0.5%

Others (48,210) 3.7% (35,352) 2.8% (10,644) 3.2% (8,078) 3.0%

(101,057) 7.8% (82,840) 6.6% (24,348) 7.4% (16,759) 6.3%

Operating Income (EBIT) 134,649 10.4% 136,396 10.9% 27,245 8.3% 17,057 6.4%

Financial Results

Financial Revenue 6,233 0.5% 5,402 0.4% 1,685 0.5% 1,577 0.6%

Financial Expenses (15,839) 1.2% (26,794) 2.1% (966) 0.3% (7,056) 2.7%

(9,606) 0.7% (21,392) 1.7% 719 -0.2% (5,479) 2.1%

Earnings After Financial Income 125,043 9.7% 115,003 9.2% 27,964 8.5% 11,577 4.4%

Non Operating Results (8,628) 0.7% (22,158) 1.8% (925) 0.3% (4,963) 1.9%

Earnings Before Taxes 116,415 9.0% 92,845 7.4% 27,039 8.2% 6,615 2.5%

Income Taxes (44,024) 3.4% (35,001) 2.8% (10,010) 3.0% (5,229) 2.0%

Net Income 72,391 5.6% 57,844 4.6% 17,029 5.2% 1,386 0.5%

EBITDA 164,527 12.8% 162,688 13.0% 35,200 10.7% 23,817 9.0%

Page 34: Iochpe-Maxion - 4Q07 Presentation

4Q07/2007February, 2008

34

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

ASSETS LIABILITIES

Dec-07 Dec-06 Dec-07 Dec-06

CURRENT CURRENT

Cash 151,519 88,197 Loans 131,820 125,455

Receivables 144,051 221,763 Payables 62,093 46,600

Inventory 167,806 116,346 Customers Advance 50,033 13,339

Recoverable Taxes 18,911 22,609 Wage and Charges 35,543 22,907

Others 13,030 (79,488) Taxes 3,063 537

495,317 369,428 Provisions 6,250 3,581

Others 20,177 46,052

308,979 258,471

LONG TERM LONG TERM

Receivable 1,694 7,980 Loans 148,045 95,060

Deferred Income Taxes 28,881 39,067 Provisions 65,099 67,027

Others 31,052 10,960 Others 7,578 15,360

61,627 58,008 220,722 177,447

MINORITY - 34

PERMANENT EQUITY

Investments 125 125 Capital 161,463 161,463

Plants, Property and Equipment 309,614 271,445 Capital Reserves 103,472 103,471

Deferred Items 345 1,879 Retained Earnings 72,391 -

310,083 273,449 337,326 264,934

TOTAL ASSETS 867,027 700,886 TOTAL LIABILITIES 867,027 700,886

Page 35: Iochpe-Maxion - 4Q07 Presentation

Earnings Release – 4Q07 / 2007Earnings Release – 4Q07 / 2007

February, 2008