iochpe-maxion - 3q03 presentation
DESCRIPTION
3rd Quarter 2003 PresentationTRANSCRIPT
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
Iochpe-Maxion at a glance
3 plantsCruzeiro - SP (2)Contagem - MG
Shared controlCompanhia IochpeBNDESPARBradesco
Iochpe-Maxion at a glance
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
(*) 3Q03 LTM = last 12 months
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(*)
(*) 3Q03 LTM = last 12 months
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%
Maxion Comp. Estrut.58%
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
Source : Anfavea and Sindipeças
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
Source : Anfavea and Sindipeças
SUBSIDIARIES
AUTOMOTIVEINDUSTRY
MAXION COMPONENTES ESTRUTURAIS
Subsidiaries
Maxion Comp. Estrut.60%
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
Maxion Componentes Estruturais - CHASSIS
Market Share
9M03 9M02
DANA / OTHER
25%
MAXION75%
MAXION79%
DANA / OTHER
21%
Subsidiaries
Maxion Componentes Estruturais - CHASSIS
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
Maxion Componentes Estruturais - CHASSIS
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
Maxion Componentes Estruturais - WHEELS
Market Share
BORLEM34%MAXION
66%
9M03 9M02
BORLEM44%
MAXION56%
Subsidiaries
Maxion Componentes Estruturais - WHEELS
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
Maxion Componentes Estruturais - WHEELS
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
Maxion Componentes Automotivos
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
Maxion Componentes Automotivos
Revenue breakdown by customer
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
Maxion Componentes Automotivos
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
Revenue breakdown by customer
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
Revenue breakdown by customer
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%
Iochpe-Maxion - Consolidated
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%
Iochpe-Maxion - Consolidated
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
Iochpe-Maxion - Consolidated
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%
Iochpe-Maxion - Consolidated
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
Iochpe-Maxion - Consolidated
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
Iochpe-Maxion - Consolidated
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
Iochpe-Maxion - Consolidated
Debt breakdown by denomination
Sept 2003 - R$ 136,4 MM - % Total
Other4%TJLP
8%
Dollar19%
CDI29%
IGPM7%
INPC33%
Iochpe-Maxion - Consolidated
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%
Source : Companies releases
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%
Source : Companies releases
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