iochpe-maxion - 3q03 presentation

Third Quarter 2003

Iochpe-Maxion at a glance

Holding of autoparts and railroad equipment companies

Domestic leadership in the majority of the line of products

Export capabilityUpdated technologyQualityCompetitive pricing

Operational results within the international benchmarking

Adjusted capital strucuture


3 plantsCruzeiro - SP (2)Contagem - MG

Shared controlCompanhia IochpeBNDESPARBradesco


11

Number of Employees

Total Consolidated 4.140

Bradesco Companhia Iochpe BNDESPAR Outros

Maxion ComponentesEstruturais Ltda.

Amsted -Maxion Fundiçãoe Equip. Ferrov. S.A.

Maxion ComponentesAutomotivos S.A.

50%

Amsted Industries(50%)

11,1% 21,8% 48,2% 18,9%

Iochpe-Maxion S.A.

Tecob

1.0212.216 1.774

23

Iochpe Holdings

Total

18,8% 56,3% 21,8% 3,1%

7,0% 3,8% 62,2% 27,3%

Voting

Preferred

STRATEGIC POSITION

Strategic Position

Constant improvement on operation margins,

Gross Profit

Ebit

Ebitda

% of net sales

6%

9%

14%16%

18% 17%

-1%2%

7% 7%10% 11%11%

13%

19%

21% 22% 22%

1998 1999 2000 2001 2002 3Q03LTM(*)

Net Debt /EBITDA ratio 4,4 3,6 2,2 1,1 1,5 1,1

(*) 3Q03 LTM = last 12 months

Strategic Position

Implementing a growth strategy,

Acquisition of assets related to existent business linesAdditional sales of R$ 8,9 milion - 9M03 vs. 9M02

Securing new supply agreements in the local marketAdditional sales of R$ 92,9 million - 9M03 vs. 9M02

Export GrowthAdditional sales of US$ 4,5 million (R$ 17,5 million) -

9M03 vs 9M02

Strategic Position

Revenue

770,7

615,4 624,0

373,7411,2

604,2

0,0

300,0

600,0

900,0

1998 1999 2000 2001 2002 3Q03 LTM

DisposalI. M. Ohio

50% MaxionMotores

Disposal50% Amsted-Maxion

Disposals+ 50% Maxion

Motores

DisposalMaxion Nacam

AcquisitionBatz

Borlem

R$ million


Strategic Position

combined with the maintenance of a adjusted capital structure.

Net Debt / LTM EBITDA ratio

1,1

5,6

4,43,6

2,2

1,11,5

1997 1998 1999 2000 2001 2002 3Q03LTM(*)


Posicionamento Estratégico

Revenue breakdown by company

Amsted-Maxion

24%

Maxion Comp. Autom.16%

Maxion Comp. Estrut.60%

9M03 - R$ 494,9 MM

(*) Maxion Nacam sold in Sept/02

9M02 - R$ 301,9 MM

Amsted-Maxion

15%

Maxion Nacam

4%

Maxion Comp. Autom.23%


AUTOMOTIVEINDUSTRY

Automotive Industry

Brazilian vehicle output showed the following performance in the first nine months and third quarter.

Source : Anfavea

Brazilian total output – thousand units, unless indicated otherwise

Var%9M03 9M02 Var% 3Q03/3Q02

Cars 1.105,7 1.110,8 (0,5%) (5,2%)

Utility vehicles 154,5 136,2 13,4% 27,5%

Trucks 57,5 52,4 9,8% 13,6%

Buses 19,9 18,5 7,7% 25,5%

Agricultural Machinery 44,1 38,8 13,7% 15,1%

Automotive Industry

Total Brazilian Output - Vehicles

THOUSAND UNITSBRAZIL2.070

1.5861.691

1.812 1775 17951800

1.357

1.000

1.250

1.500

1.750

2.000

2.250

1.997 1.998 1.999 2.000 2.001 2.002 3Q03LTM

2003E

Source : Anfavea and Sindipeças

Automotive Industry

Car and utility vehicles output

THOUSAND UNITSBRAZIL1.680

15001.495

1.351

1.50015051.274

1.997 1.998 1.999 2.000 2.001 2002 3Q03LTM

302,5246,4

171,1

235,3 215,8

179,5 180,0199,0

CARS

UTILITY VEHICLES


Automotive Industry

Trucks, buses and agricultural machinery output

THOUSAND UNITSBRAZIL

63,7 63,8

55,1

71,677,3

68,473,5

21,6 21,514,9

22,7 23,4 22,7 24,131,7 33,4

28,235,5

44,352,0

57,3

1.997 1.998 1.999 2.000 2.001 2002 3Q03LTM

TRUCKS

AGRIC. MACHINERY

BUSES


SUBSIDIARIES

AUTOMOTIVEINDUSTRY

MAXION COMPONENTES ESTRUTURAIS

Subsidiaries


Revenue : R$ 295,3 MM – 9M03R$ 174,9 MM – 9M02

Subsidiaries

Maxion Componentes Estruturais - CHASSIS

Products Segments

Completed Chassis

Siderails

Cross members

Trucks

Buses

Utility vehicles

Tractors

Subsidiaries


Market Share

9M03 9M02

DANA / OTHER

25%

MAXION75%

MAXION79%

DANA / OTHER

21%

Subsidiaries


Revenue breakdown by customer

9M03 - R$ 153,0 MM 9M02 - R$ 103,7 MM

OTHER10%

SCANIA5%

DANA5%FORD

5%

EXPORT.9%

GENERAL MOTORS

12%

VOLKSWAGEN

25%

DAIMLERCHRYSLER

29%

OTHER15%

SCANIA3%DANA

4%FORD

5%

EXPORT.9%

GM16%

VOLKSWAGEN

26%

DAIMLERCHRYSLER

22%

Subsidiaries


NEW SUPPLY AGREEMENTS: R$ 9,8 MM/ YEAR

CHASSIS Country Starting Date Annual Sales R$ MM

Siderails - Workhorse EUA Sept.03 5,4

Siderails - John Deere Brazil Jun.03 1,7

Cross members - Iveco Brazil Nov.02 0,9

Stamped parts - Streparava - Tier 2 Iveco Brazil Sept.03 0,9

Siderails - Jacto Brazil Jun.03 0,9

Subsidiaries

Maxion Componentes Estruturais - WHEELS

Products Segments

Trucks

Buses

Agricultural machinery

Off-road vehicles

Road wheels

Off-road wheels

Agricultural wheels

Subsidiaries


Market Share

BORLEM34%MAXION

66%

9M03 9M02

BORLEM44%

MAXION56%

Subsidiaries


Revenue Breakdown by Customer

9M03 - R$ 142,3 MM 9M02 - R$ 81,9 MM

VOLVO4%

OTHER6%

DAIMLERCHRYSLER

5%SCANIA6%

VOLKSWAGEN

12%

AFTERMARKET

12%

TRACTORS27%

EXPORT.28%

EXPORT.37%

TRACTORS22%

AFTERMARKET

16%

VOLKSWAGEN

9%

DAIMLERCHRYSLER

5%SCANIA4% VOLVO

5%OTHER

2%

Subsidiaries


NEW SUPPLY AGREEMENTS: R$ 37,1 MM / yearWHEELS Country Starting date Annual Sales

R$ MMGKN Europe / USA. Sept.03 15,7Insak Singapore Jun.03 1,0Accuride USA Dec.02 9,1Tredcor South Africa Dec.02 2,9AGCO Brazil Jun.03 1,5Dunlop South Africa Jun.04 1,5Henred-Fruehalf South Africa Mar.03 1,3MCI - Motor Canada Apr.03 1,3John Deere Brazil Jul.03 1,1Continental Germany Jun.03 0,7SPHF Morocco Feb.03 0,6Thai Boss Thailand Apr.03 0,4

Subsidiaries

MAXION COMPONENTES AUTOMOTIVOSMaxion Comp. Autom.16%

Revenue : R$ 81,7 MM – 9M03R$ 70,7 MM – 9M02

Subsidiaries

Maxion Componentes Automotivos

Products Segments

Window raiser mechanisms

Latches

Knobs, cylinders and keys

Hand brake levers

Pedal sets

Jacks

Water and oil pumps

Cars

Subsidiaries


Market Share

Main Products

9M03

9M02

Window raiser mechanism

43%

41%

Hand brake levers

46%

42%

Latches

10%

16%

Knobs, Cylinders and Keys

10%

7%

Jacks

15% -

Subsidiaries



9M03 - R$ 81,7 MM 9M02 - R$ 70,7 MM

OTHER4%FORD

7%AFTER

MARKET8%

SAS12%

VW19%

GM23%

FIAT28%

FORD10%

AFTERMARKET

15%

VW18%

GM22%

FIAT35%

Subsidiaries


NEW SUPPLY AGREEMENTS: R$ 11,4 MM / year

Model Product Starting Date

Annual Sales R$ MM

Gol 2002 - VW Knobs, Cylinders and Keys Jan.03 5,0

Acello - DaimlerChrysler Window raiser mechanisms Jun.03 1,4

Ecosport - Ford Window raiser mechanisms Mar.03 3,2

Fox - VW Jacks Oct.03 0,9Celta - GM Window raiser mechanisms Feb.04 0,5

Doblò - Fiat Window raiser mechanisms Mar.03 0,4

RAILROADINDUSTRY

Railroad Industry

The Brazilian market of railroad equipment presented thefollowing pattern,

Sales - Brazilian Market

9M03 9M02 Var%

Railroad freight cars – units 1.339 214 526%

Railroad wheels – units 45.430 39.407 15%

Railroad castings – ton 9.654 4.716 105%

Railroad Industry

as a result of the big supply agreements signed in the last fewmonths.

Orders of Companhia Vale do Rio Doce

First Agreement

1.886 railroad freight cars (1.326 delivered - dec/2002 and sept/2003)Delivery schedule : Dec/2002 to Dec/2003Net revenue: R$ 207,2 million

Second Agreement

1.667 railroad freight cars Delivery schedule : Jan/2004 to Jun/2004Net revenue: aprox. R$ 200 million

SUBSIDIARIES

RAILROADINDUSTRY

Subsidiaries

AMSTED-MAXIONAmsted-Maxion

24%

Revenue : R$ 118,0 MM – 9M03 (*)R$ 44,1 MM – 9M02 (*)

(*) refers to 50% of the total revenue of the company of R$ 235,9 MM in 2003 and R$ 88,2 MM in 2002

Subsidiaries

Amsted-Maxion

Products Segments

Railroad Equipment

Trucks

Off-road Vehicles

Mining equipment

Railroad Wheels

Railroad Freight Cars

Railroad Castings

Road Castings

Industrial Castings

Subsidiaries

Amsted-Maxion

Market Share

Main Products 9M03 9M02

Railroad Freight Cars 100% 96%

Railroad Wheels 60% 60%

Railroad Castings 80% 80%

Industrial Castings 60% 60%

Subsidiaries

Amsted-Maxion


9M03 - R$ 118,0 MM (*) 9M02 - R$ 44,1 MM (*)

CAT10%

FCA6%

MRS3% OTHER

22%

CVRD24%

EXPORT.35%

FCA3%

MRS2%

CAT5%

EXPORT.22%

CVRD68%

(*) refers to 50% of the total revenue of the company of R$ 235,9 MM in 2003 and R$ 88,2 MM in 2002

Empresas Controladas

Amsted-Maxion

ORDERS

New agreements spot - R$ 200,0 millionCVRD - 1.667 railroad freight cars

Previous agreements spot - R$ 67,8 million

CVRD - 560 railroad freight cars - R$ 59,7 MM

Mineração Serra do Sossego (CVRD) – 22 railroad freight cars – R$ 2,5 MM

ALL/Coinbra – 10 railroad freight cars - R$ 1,5 MM

CVRD / FCA / ALL - 4.164 railroad wheels - R$ 4,1 MM

Empresas Controladas

Amsted-Maxion

AGREEMENTS

Long term recurring agreements - R$ 48,2 million / yearASF-Amsted (USA) – railroad castings - R$ 17,0MM

ConMet-Amsted (USA) - fifth wheel - R$ 5,6MM

Caterpillar (Brazil) - tractor parts - R$ 14,6MM

Caterpillar (USA) - tractor parts - R$ 5,1MM

Metso (France) - mining equipment parts - R$ 1,8MM

Komatsu / Meritor / CNH (USA and Italy) - industrial castings - R$ 2,7MM

Other (Canada) - mining equipment parts - R$ 1,4 MM

CONSOLIDATED

Iochpe-Maxion - Consolidated


9M03 - R$ 494,9 MM 9M02 - R$ 301,9 MM

Other9%

SAS2%

Ford3%

Scania3%

Fiat5%

AfterMarket

5%

Tractors8%

GM8%

DaimlerChrysler

10%Volkswagen

15%

Export.16%

CVRD16%

CVRD4%

Other19%Ford

5%Scania

2%Aftermarket

7%Export.12%

Volkswagen15%

DaimlerChrysler

8%

GM14%

Tractors2%

Fiat12%


Revenue breakdown by segment

Customers 9M03 9M02

OEMs installed in the country

- Buses, trucks and utility vehicles- Passenger cars

65%

49%16%

73%

46%27%

Brazilian railroad operators 19% 10%

Exports 16% 17%


Export breakdown by product

9M03US$ 25,0 MM / R$ 80,4 MM

9M02US$ 18,2 MM / R$ 52,6 MM

AUTOM. COMP.

2%

RAILROAD EQUIP.

28%

CHASSIS18%

ROAD WHEELS

52%

AUTOM. COMP.

1%RAILROAD

EQUIP.27%

CHASSIS16%

ROAD WHEELS

56%

Import 9M03US$ 6,5 MM / R$ 20,9 MM

Import - 9M2002US$ 8,4 MM / R$ 24,3 MM


Export breakdown by destination

9M03US$ 25,0 MM / R$ 80,4 MM

9M02US$ 18,2 MM / R$ 52,6 MM

AFRICA / MIDLE EAST18%

EUROPE8%

ASIA / OCEANIA

3%SOUTH

AMERICA15%

MEXICO2%

CANADA17%

USA37%

AFRICA / MIDLE EAST15%

EUROPE7%

ASIA / OCEANIA

5%

SOUTH AMERICA

12%

MEXICO4%

CANADA17%

USA40%

Nafta : 56% / Alca : 71% Nafta : 61% / Alca : 73%


Income Statement 9 Months2003 2002

Net Revenue 494.905 301.925 (-) Cost of Products Sold (387.632) (239.316)

Gross Profit 107.273 62.609

Operational Expenses Sales (32.625) (21.845) General and Administrative (24.077) (21.432) Other (1.226) 1.352

(57.928) (41.925)

EBIT 49.345 20.684

Net Financial Expenses (29.160) (35.481)

Operational Result 20.185 (14.797)

Non-operational Result (2.499) 6.577

Earnings before taxes and minority interest 17.686 (8.220)

Taxes and minority interest (14.886) (4.672)

Net Income 2.800 (12.892)

EBITDA 73.722 45.121


Net Debt - R$ million

307 313

217 208 195

65,1

105,7130,3

115,1

0

50

100

150

200

250

300

350

1996 1997 1998 1999 2000 2001 2002 2Q03 3Q03


Debt breakdown by type of loan - Sept 2003 - R$ MM

TYPE OF LOAN SHORT TERM

LONG TERM TOTAL

Local Bonds 20,1 24,5 44,6Trade Finance / ACC / Res. 2770 55,4 4,0 59,4

Finame / BNDES / BDMG / EXIM 14,2 9,7 23,9Local Currency Loans 8,5 8,5

98,2 38,2 136,4

(-) Cash 16,8 4,5 21,3

Net Debt 81,4 33,7 115,1


Debt breakdown by denomination

Sept 2003 - R$ 136,4 MM - % Total

Other4%TJLP

8%

Dollar19%

CDI29%

IGPM7%

INPC33%


Foreign currency exposure - Sept/03 - US$ MM

Balance Sheet

Assets denominated in foreign currency. Marketable securities / Investments 3,1. Receivables 4,2

7,3

Liabilities in foreign currency. Bank debt (ACC / Res. 2770) (8,0). Payables (3,7)

(11,7)

Net position (4,4)

Iochpe-Maxion - Consolidado

Stock Performance

85 131 35 115 104 50 50 125 177 312 136

3.050

51,9

27,626,426,825,124,224,725,2

26,8

23,522,520,9

-

750

1.500

2.250

3.000

3.750

4.500

oct/0

2no

v/02

dec/0

2jan

/03feb

/03mar/

03ap

r/03

may/03

jun/03 jul/03

aug/0

3se

pt/03

-

15,0

30,0

45,0

60,0VOLUME / PRICE IOCHPE-MAXION PN (MYPK4)

THOUSAND R$ R$ / 1000 shares

PRICE

VOLUME

BENCHMARK

Benchmark

Gross Profit % sales

VisteonDelphi

LearTowerIntermet

DanaDura

AutolivJohson ControlsSuperior

TennecoValeo

Borg WarnerFederal Mogul

StrattecEaton

Gentex

Iochpe-Maxion

0% 10% 20% 30% 40%

Source : Companies releases

Benchmark

EBIT % Sales

TowerVisteon

DelphiFederal MogulIntermet

DanaValeoLearTennecoJohson Controls

DuraEaton

AutolivBorg Warner

SuperiorStrattec

Gentex

Iochpe-Maxion

-10% 0% 10% 20% 30% 40%


Benchmark

EBITDA %Sales

Tower

Delphi

Lear

Dana

Federal Mogul

Johson Controls

Dura

Tenneco

Intermet

Autoliv

Borg Warner

Iochpe-Maxion

Strattec

Visteon

0% 5% 10% 15% 20% 25%


OUTLOOK

Outlook

Outlook

Revenue trend:(+) new supply agreements

(+) growth of the local market of agricultural machinery, trucks, buses and railroad equipment

(-) stability in the local market of passenger cars

(-) export revenue reduction due to Brazilian Real appreciation

Maintenance of the operational performance

(+) scale gains

(+) on-going cost reduction programs

(-) increase of non negotiable costs (energy, wages, raw material)

Adjusted capital structure

iochpe-maxion - 3q03 presentation

Investor Relations

maxion maxion nacammotores

borlem maxion

maxion motores

mm9m02 r

customer 9m03 r

company 9m03 r

strategic positionrevenue

date annual sales r