Iochpe-Maxion - Conference Call 1Q06 Results Presentation

1

ResultsFirst Quarter 2006

May 5, 2006

ResultsFirst Quarter 2006ResultsFirst Quarter 2006

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.

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1Q06 HIGHLIGHTS1Q06 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.

Net income of R$14.9 million, 1.4% less than 1Q05;

Consolidated net operating revenue of R$340.3 million, 3.5% decrease over 1Q05;

EBITDA(*) reached R$44.7 million, 6.4% decrease over 1Q05;

Net bank debt of R$150.8 million (R$157.8 million in 1Q05), or 0.7x LTM EBITDA(*) (0.9x in 1Q05)

Industry Performance

5


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

Source: Anfavea

216180

216

318366

80 9056 40

72114

156

32 35

2001

2002

2003

2004

2005

1Q05

1Q06

Production

ExportCAGR 01 – 05 = 14%

∆ 1Q06 - 05 = 13%

∆ 1Q06 – 05 = 8%

CAGR 01 – 05 = 29%

6


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

Source: Anfavea

77 6979

107 116

28 242537

7 7,47 513

2001

2002

2003

2004

2005

1Q05

1Q06

Production

Export

CAGR 01 – 05 = 11%

CAGR 01 – 05 = 54%

∆ 1Q06 – 05 = (12%)

∆ 1Q06 – 05 = 5%

7


BUSES – BRAZIL (‘000 units)BUSES – BRAZIL (‘000 units)

Source: Anfavea

24 2327 29

35

8.2 8.67 7 913

19

3.64

2001

2002

2003

2004

2005

1Q05

1Q06

Production


CAGR 01 – 05 = 29%

∆ 1Q06 – 05 = (8%)

∆ 1Q06 – 05 = 6%

8


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

Source: Anfavea

4452

5969

53

14 118 1021

31 315

8

2001

2002

2003

2004

2005

1Q05

1Q06

Production


CAGR 01 – 05 = 39%

∆ 1Q06 – 05 = (35%)

∆ 1Q06 – 05 = (18%)

9


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

Source: Anfavea

1,496 1,521 1,5051,757

1,931

470 509319 363 440 497 606 155148

2001

2002

2003

2004

2005

1Q05

1Q06

Production


CAGR 01 – 05 = 17%

∆ 1Q06 – 05 = 5%∆ 1Q06 – 05 = 8%

10


Source: Amsted Maxion estimate

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

748

2,459

5,642

7,270

1,375 1,309294

2001

2002

2003

2004

2005

1Q05

1Q06

Sale

CAGR 01 – 05 = 77%

∆1Q06 – 05 = (5%)

11



RAILWAY CASTINGS – BRAZIL (metric tons)RAILWAY CASTINGS – BRAZIL (metric tons)

3.500

2.288

3.386

5.100

1.046 733

2.230

2001

2002

2003

2004

2005

1Q05

1Q06

Sale

CAGR 01 – 05 = 10%

∆ 1Q06 – 05 = (30%)

Does not include castings used in the assembly of railway freight cars

12



RAILWAY WHEELS – BRAZIL ( ‘000 units)RAILWAY WHEELS – BRAZIL ( ‘000 units)

4250

4248

9 11

50

2001

2002

2003

2004

2005

1Q05

1Q06

Sale

CAGR 01 – 05 = 4%

∆ 1Q06 – 05 = 19%

Does not include wheels used in the assembly of railway freight cars

13


MARKET SHARE – BRAZIL (1Q06)MARKET SHARE – BRAZIL (1Q06)

ChassisChassisCommercialCommercial VehicleVehicle

WheelsWheelsRailway Railway FreightFreight

CarsCars

RailwayRailwayCastingsCastings

Source: Maxion estimate

71%

28%1%

Maxion

Dana

OEM

58%

39%

3%

Maxion

Borlem

Others

85%

15%

Maxion

Others

80%

20%

Maxion

Cruzaço

MaxionMaxion

1Q051Q0569%69% 65%65% 80%80% 80%80%

Consolidated Results

15


Amsted Maxion (*) Wheels and

Chassis Division

Automotive Comp.Division

Segment (%) Customer (%)

(*) Consolidation considers 50% of Amsted Maxion’s net operating revenue

R$ 340 R$ 340 millionmillion

NET OPERATING REVENUE – 1Q06NET OPERATING REVENUE – 1Q06

41%

6%

53%

19%

12%

11%

10%

6%4%

4%3%

19%

12%

Other

DaimlerChryslerVolks-

wagen

GeneralMotors

CVRD/FCA

Ford

BrasilFerrovias

Tractors

Scania

Exports

16


50%

8%

10%6%

26%

USA

Africa/Middle EastEuropeChassis

CommercialVehicleWheels

RailwayEquip.

Segment (%) Destination (%)

Canada/ Mexico

SouthAmerica

EXPORTS – 1Q06EXPORTS – 1Q06

US$29 US$29 millionmillion

R$63 R$63 millionmillion

63%

30%

7%

17


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

374

676

1,099

1,494

353 340411

2001

2002

2003

2004

2005

1Q05

1Q06

∆ 05-04 = 36%

CAGR 01 – 05 = 41%

∆ 1Q06 – 05 = (4%)

18


EXPORTS (USD million)EXPORTS (USD million)

24

47

96

232933

24

2001

2002

2003

2004

2005

1Q05

1Q06

∆ 05-04 = 61%

CAGR 01 – 05 = 48%

∆ 1Q06 – 05 = 29%

19


GROSS PROFITGROSS PROFIT

80 87

137

228

72 64

28921% 21% 20% 20% 19%19%21%

0

50

100

150

200

250

300

350

2001

2002

2003

2004

2005

1Q05

1Q06

0%

10%

20%

30%

40%

50%R$ MM % net sales

20


EARNING BEFORE INTEREST AND TAXES - EBITEARNING BEFORE INTEREST AND TAXES - EBIT

27 3658

127

178

41 38

7%

9% 9%

12% 12% 12%11%

0

50

100

150

200

2001

2002

2003

2004

2005

1Q05

1Q06

0%

5%

10%

15%


21


NET FINANCIAL EXPENSESNET FINANCIAL EXPENSES

41

54

38 37

9 6

33

11%

13%

6%

3%

2%

3%

2%

0

25

50

75

2001

2002

2003

2004

2005

1Q05

1Q06

0%

5%

10%


22



EBITDA (*)EBITDA (*)

58 6989

156

205

48 45

16%17%

13%14% 14% 14%

13%

0

50

100

150

200

250

2001

2002

2003

2004

2005

1Q05

1Q06

0%

5%

10%

15%


23


NET EARNINGSNET EARNINGS

25

72

1515

51

(5)(24)

7%

-6%

-1%

5% 5%4% 4%

(40)

(20)

0

20

40

60

80

2001

2002

2003

2004

2005

1Q05

1Q06

-10%

-5%

0%

5%

10%

15%


24



R$ MM x EBITDA (*)

NET BANK DEBTNET BANK DEBT

65

125

151158

102

115106

1.1

1.5

1.3

0.6 0.6

0.9

0.7

0

25

50

75

100

125

150

175

200

2001

2002

2003

2004

2005

1Q05

1Q06

0.0

0.5

1.0

1.5

2.0

25


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

41

7384 80

13 14

54

2002

2003

2004

2005

2006

E1Q

051Q

06

26


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


2,006 % N.O.R. 2,005 % N.O.R. Var%Net operating revenue 340,321 100.0% 352,579 100.0% -3.5%

(-) Cost of goods sold (276,483) -81.2% (281,082) -79.7% -1.6%

Gross profit 63,838 18.8% 71,497 20.3% -10.7%

Operating expensesSales (14,708) -4.3% (17,238) -4.9% -14.7%General and Administrative (11,505) -3.4% (12,202) -3.5% -5.7%Other operating expenses 58 0.0% (807) -0.2% -107.2%

(26,155) -7.7% (30,247) -8.6% -13.5%

Earnings before interest and taxes - EBIT 37,683 11.1% 41,250 11.7% -8.6%

Net financial expenses (6,162) -1.8% (8,700) -2.5% -29.2%

Earnings after financial expenses 31,521 9.3% 32,550 9.2% -3.2%

Non-operating result (5,106) -1.5% (5,284) -1.5% -3.4%

Earnings before taxes 26,415 7.8% 27,266 7.7% -3.1%

Income taxes (11,511) -3.4% (12,151) -3.4% -5.3%

Net income 14,904 4.4% 15,115 4.3% -1.4%

EBITDA (*) 44,666 13.1% 47,724 13.5% -6.4%

First Quarter

Additional Information

28


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

ASSETS Mar ´06 Mar ´05 LIABILITES AND EQUITY Mar ´06 Mar ´05

CURRENT CURRENT Cash and marketable securities 22,639 30,287 Loans 113,814 144,965 Receivables 186,422 180,713 Payables 64,501 73,969 Inventories 131,822 160,479 Costumers advances 51,984 69,558 Recoverable taxes 18,895 26,648 Wages and charges 29,507 25,403 Other 28,077 18,833 Taxes 9,360 23,601

387,855 416,960 Provisions 7,869 15,067 Other 12,648 36,820

289,683 389,383

LONG TERM LONG TERM Receivables 2,832 4,533 Loans 59,625 42,148 Deferred income taxes 28,945 40,090 Provisions 62,601 36,918 Other 13,762 29,872 Other 14,865 4,246

45,539 74,495 137,091 83,312

MINORITY INTEREST 195 176

PERMANENT EQUITY Investments 369 265 Paid-up capital 161,463 161,463 Plant, property and equipment 235,540 178,763 Profit reserves 68,468 24,770 Deferred items 2,501 3,736 Retained earnings 14,904 15,115

238,410 182,764 244,835 201,348

671,804 674,219 671,804 674,219

29


NET DEBT BREAKDOWN – MAR ‘06 (R$ million)NET DEBT BREAKDOWN – MAR ‘06 (R$ million)

TotalTotal

127.2127.2

42.942.9

3.33.3

22.622.6

150.8150.8

LongLong TermTerm

44.644.6

15.015.0

59.659.6

Short Short TermTerm

82.682.6

27.927.9

3.33.3

22.622.6

91.291.2

LinesLines

EquipmentEquipment financingfinancing

TradeTrade FinanceFinance / / ExportExport

((--) ) CashCash andand CashCash equivalentsequivalents

Net Net DebtDebt

Other lines Other lines in R$in R$

173.4173.459.659.6113.8113.8

30


71%

25%2%2% Dollar

IGPM(whosale inflation

index)

TJLP(BNDESrate)

DEBT INDEXATION – MAR ‘06 (%)DEBT INDEXATION – MAR ‘06 (%)

AverageAverage CostCost (1Q06)(1Q06)

In US$In US$

In R$In R$

7.8% p.a.7.8% p.a.

71% CDI71% CDI

Interbank rate

31


FREIGHT CARS – FIRM ORDERS FOR DELIVERY IN 2006 FREIGHT CARS – FIRM ORDERS FOR DELIVERY IN 2006

Brasil FerroviasBrasil Ferrovias

CVRD / FCACVRD / FCA

720 720 unitsunits

1,276 1,276 unitsunits

MRSMRS

MRC (MRC (MitsuiMitsui / / BungeBunge / ALL)/ ALL)

280 280 unitsunits

300 300 unitsunits

TotalTotal

CVG CVG FerromineraFerrominera OrinocoOrinoco

2,695 2,695 unitsunits

50 50 unitsunits

RevenueRevenue ApproxApprox..R$510 R$510 millionmillion

ItaItaúú Leasing (Leasing (Inlogs Inlogs / ALL)/ ALL) 69 69 unitsunits

32


SHAREHOLDER COMPOSITION : MAR ´06 SHAREHOLDER COMPOSITION : MAR ´06

Iochpe Iochpe 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%

33


(*) after reverse split

STOCK PERFORMANCESTOCK PERFORMANCE

43

1,385

171 123 139253 205 183

1,366

381

849

262144 156

296 289556

333

1,004

303 384

966

3,225

2,388

354401190151

16.3

14.214.1

12.4

9.6

8.58.7

6.85.5

4.13.94.04.04.74.9

4.0

16.0 15.915.5

13.614.2

16.2 16.2

14.4

16.8

21.1

18.818.0

-

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

Dec-0

3Ja

n-04

Feb-

04Mar

-04

Apr-

04May

-04

Jun-

04Ju

l-04

Aug-

04Se

p-04

Oct-0

4Nov

-04

Dec-0

4Ja

n-05

Feb-

05Mar

-05

Apr-

05May

-05

Jun-

05Ju

l-05

Aug-

05Se

p-05

Oct-0

5No

v-05

Dec-0

5Ja

n-06

Feb-

06Mar

-06

-

4.0

8.0

12.0

16.0

20.0

24.0DAILY VOLUME / MONTHLY AVERAGE PRICE

IOCHPE-MAXION PN (MYPK4)

R$ THOUS. R$ / SHARE (*)

PRICE

VOLUME

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Iochpe-Maxion - Conference Call 1Q06 Results Presentation