Iochpe-Maxion - 3Q08 Presentation
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Transcript of Iochpe-Maxion - 3Q08 Presentation
EARNINGS RELEASE – 3Q08EARNINGS RELEASE – 3Q08
October, 2008
2
3Q08October, 2008
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
3Q08October, 2008
50% 100%
IochpeIochpe--Maxion S.A.Maxion S.A.
AmstedAmsted--Maxion Fundição e Maxion Fundição e Equipamentos Ferroviários S.A.Equipamentos Ferroviários S.A.
Railway Freight Cars: R$ 87.6 million1 (17%)
Castings: R$ 33.7 million1 (6%)
Wheels: R$ 9.0 million1 (2%)
Wheels: R$ 152.4 million1 (29%)
Chassis: R$ 205.0 million1 (39%)
R$ 35.3 milhões1 (7%)R$ 130.3 million1 (25%) R$ 357.4 million1 (68%)
100%
Structural Stamped Parts: R$ 6.3 million1 (1%)
Hand Brake Leaver and Pedal Sets: R$ 12.8 million1 (2%)
SIMPLIFIED CORPORATE STRUCTURESIMPLIFIED CORPORATE STRUCTURE
Wheels and Chassis DivisionWheels and Chassis DivisionAutomotive Components Automotive Components
DivisionDivision
1 Consolidated net operating revenue in the
third quarter of 2008
4
3Q08October, 2008
� Consolidated net operating revenue of R$ 523.0 million, an increase of 47.0% over the same period of last year
� EBITDA(*) of R$ 92.2 million, an increase of 60.4% when compared to the same period of last year
� Net income of R$ 130.9 million, an increase of 277.9% over the same period of last year
� Not considering the non-recurring gain of R$ 76 million, net income would be R$ 54.9 million, an increase of 82,4% over the same period of last year
� Net bank debt of R$ 230.6 million (R$ 173.6 million on Sep/07), or 0,9x EBITDA(*) LTM (1.1x on Sep/07).
HIGHLIGHTS – 3Q08HIGHLIGHTS – 3Q08
(*) 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.
5
3Q08October, 2008
� Growth of the Brazilian production of vehicles and agricultural machinery
� Recovery of domestic demand for railway freight cars
� Impact of the real appreciation (1.7051 – 3Q08 x 1.8928 – 3Q07) on net revenue of exports
(reduction of R$ 6.7 million)
� Participation of exports: US$ 39.1 million on 3Q08 x US$ 30.8 million on 3Q07 (13% of net
revenue on 3Q08 x 16% no 3Q07)
� Non-recurring gain of R$ 76 million, related to the merger of Maxion Sistemas Automotivos into
Iochpe-Maxion on July, 2008
3Q08 – MAIN DRIVERS3Q08 – MAIN DRIVERS
Industry Performance
7
3Q08October, 2008
216
318
366379
408
296
355
112130
2003 2004 2005 2006 2007 9M07 9M08 3Q07 3Q08
72
114
156 153144
109
98
4134
2003 2004 2005 2006 2007 9M07 9M08 3Q07 3Q08
Export
� ∆ 3Q08 – 07 = 15.7%
� ∆ 9M08 – 07 = 19.9%
� CAGR 2003 – 07 = 17.2%
� ∆ 3Q08 – 07 = (17.0%)
� ∆ 9M08 – 07 = (10.6%)
� CAGR 2003 – 07 = 18.9%
Production
LIGHT COMMERCIALS – BRAZIL (‘000 units)LIGHT COMMERCIALS – BRAZIL (‘000 units)
Source: Anfavea
8
3Q08October, 2008
79
107
117
106
137
100
128
38
49
2003 2004 2005 2006 2007 9M07 9M08 3Q07 3Q08
Source: Anfavea
13
25
38 3941
30 30
11 11
2003 2004 2005 2006 2007 9M07 9M08 3Q07 3Q08
Export
� ∆ 3Q08 – 07 = 28.3%
� ∆ 9M08 – 07 = 27.8%
� CAGR 2003 – 07 = 14.8%
� ∆ 3Q08 – 07 = 3.2%
� ∆ 9M08 – 07 = 1.1%
� CAGR 2003 – 07 = 33.3%
Production
TRUCKS – BRAZIL (‘000 units)TRUCKS – BRAZIL (‘000 units)
9
3Q08October, 2008
2729
3534
39
30
36
1112
2003 2004 2005 2006 2007 9M07 9M08 3Q07 3Q08
Source: Anfavea
9
13
19
1615
1112
4 4
2003 2004 2005 2006 2007 9M07 9M08 3Q07 3Q08
Export
� ∆ 3Q08 – 07 = 15.9%
� ∆ 9M08 – 07 = 18.7%
� CAGR 2003 – 07 = 9.6%
� ∆ 3Q08 – 07 = 1.9%
� ∆ 9M08 – 07 = 8.8%
� CAGR 2003 – 07 = 13.6%
Production
BUSES – BRAZIL (‘000 units)BUSES – BRAZIL (‘000 units)
10
3Q08October, 2008
59
69
53
46
65
48
63
19
24
2003 2004 2005 2006 2007 9M07 9M08 3Q07 3Q08
Source: Anfavea
21
31 31
22
27
20
23
8 8
2003 2004 2005 2006 2007 9M07 9M08 3Q07 3Q08
Export
� ∆ 3Q08 – 07 = 23.5%
� ∆ 9M08 – 07 = 32.7%
� CAGR 2003 – 07 = 2.5%
� ∆ 3Q08 – 07 = 2.2%
� ∆ 9M08 – 07 = 16.8%
� CAGR 2003 – 07 = 6.5%
Production
AGRICULTURAL MACHINERY – BRAZIL (‘000 units)AGRICULTURAL MACHINERY – BRAZIL (‘000 units)
11
3Q08October, 2008
1,505
1,757
2,0092,092
2,389
1,756
2,101
637737
2003 2004 2005 2006 2007 9M07 9M08 3Q07 3Q08
Source: Anfavea
440
497
684
635
586
445427
160136
2003 2004 2005 2006 2007 9M07 9M08 3Q07 3Q08
Export
� ∆ 3Q08 – 07 = 15.7%
� ∆ 9M08 – 07 = 19.7%
� CAGR 2003 – 07 = 12.2%
� ∆ 3Q08 – 07 = (15.2%)
� ∆ 9M08 – 07 = (3.9%)
� CAGR 2003 – 07 = 7.4%
Production
PASSENGER CARS – BRAZIL (‘000 units)PASSENGER CARS – BRAZIL (‘000 units)
12
3Q08October, 2008
Source: Amsted Maxion estimate
2,459
5,642
7,270
3,668
1,249
569
3,669
281
1,195
2003 2004 2005 2006 2007 9M07 9M08 3Q07 3Q08
Sales
Sales
� ∆ 3Q08 – 07 = 325.3%
� ∆ 9M08 – 07 = 544.8%
� CAGR 2003 – 07 = (15.6%)
RAILWAY FREIGHT CARS – BRAZIL (units)RAILWAY FREIGHT CARS – BRAZIL (units)
13
3Q08October, 2008
MARKET SHARE – BRAZIL (9M08)MARKET SHARE – BRAZIL (9M08)
Maxion
65%
Dana
20%
Others
15%
ChassisChassis
Source: Maxion estimate
Maxion
63%
Borlem
32%Others
5%
Maxion
97%
Others
3%
Maxion
80%
Cruzaço
20%
� Maxion: 67% on 9M07 � Maxion: 62% on 9M07 � Maxion: 79% on 9M07 � Maxion: 80% on 9M07
Commercial Vehicles Commercial Vehicles WheelsWheels
Railway Freight Railway Freight CarsCars
Railway Railway
CastingsCastings
Financial and Operating Performance
15
3Q08October, 2008
1,2891,248
1,494
1,366
356
523
961
676
1,099
2003 2004 2005 2006 2007 9M07 9M08 3Q07 3Q08
Net Operating Revenue
� ∆ 3Q08 – 07 = 47.0%
� ∆ 9M08 – 07 = 42.1%
� CAGR 2003 – 07 = 17.5%
NET OPERATING REVENUE (R$ million)NET OPERATING REVENUE (R$ million)
16
3Q08October, 2008
104152
20631
35
74
147
130
3Q07 3Q08
Wheels Chassis Automotive Comp. Amsted Maxion
298
456
67
58
3Q07 3Q08
Domestic Export
356
523356
523
� Domestic: ∆ 3Q08 – 07 = 53.2%
� Export: ∆ 3Q08 – 07 = 15.4%
� Wheels: ∆ 3Q08 – 07 = 44.8%
� Chassis: ∆ 3Q08 – 07 = 39.5%
� Automotive Comp.: ∆ 3Q08 – 07 = 14.0%
� Amsted Maxion: ∆ 3Q08 – 07 = 76.7%
NET OPERATING REVENUE (R$ million)NET OPERATING REVENUE (R$ million)
Revenue by Market Revenue by Division / Business
17
3Q08October, 2008
Fiat
3%Ford
4%GMB
5%
Others
9%
Agricultural
Machinery
6%
Vale
2%
VW
14%
After Market
3%
Scania
4%
MRS
10%
Volvo
2%
Export
22%
Daimler
12%
Caterpillar
2%
ALL
2%Daimler
10%
Export
14%
Fiat
3%Ford
4%
GMB
4%
MRS
10%
Agricultural
Machinery
6%
Vale
14%
Volvo
2%
VW
14%
Others
10%
After Market
2%
Scania
4%
Caterpillar
2%
ALL
1%
NET OPERATING REVENUENET OPERATING REVENUE
Revenue by Customer – 3Q07 Revenue by Customer – 3Q08
18
3Q08October, 2008
39
31
102
94
120119
33
96
47
2003 2004 2005 2006 2007 9M07 9M08 3Q07 3Q08
Exports
� ∆ 3Q08 – 07 = 27.1%
� ∆ 9M08 – 07 = 7.9%
� CAGR 2003 – 07 = 38.1%
EXPORTS (USD million)EXPORTS (USD million)
19
3Q08October, 2008
913
9
0
018
17
4
3Q07 3Q08
Wheels Chassis Automotive Comp. Amsted Maxion
1623
14
0
134
29
8
3Q07 3Q08
Wheels Chassis Automotive Comp. Amsted Maxion
58
67
31
39
Variation 3Q8 - 07 = 15.4%
� Wheels = 30.0%
� Chassis = 84.2%
� Automotive Comp. = 86.7%
� Amsted Maxion: = (13.3%)
Variation 3Q8 - 07 = 27.1%
� Wheels = 44.0%
� Chassis = 106.3%
� Automotive Comp. = 105.8%
� Amsted Maxion: = (5.1%)
EXPORTS BY DIVISION / BUSINESSEXPORTS BY DIVISION / BUSINESS
R$ thousand US$ thousand
20
3Q08October, 2008
137
72
114
228283289
184219
236
22%20%21%
19%19%21%20%
18% 18%
2003 2004 2005 2006 2007 9M07 9M08 3Q07 3Q08
Gross Profit % NOR
Gross Profit
� ∆ 3Q08 – 07 = 57.5%
� ∆ 9M08 – 07 = 53.9%
� CAGR 2003 – 07 = 14.6%
GROSS PROFIT (R$ million)GROSS PROFIT (R$ million)
21
3Q08October, 2008
49
83
135136
107
178
200
58
127
10%11%
9%
12% 12% 11%
15% 14%16%
2003 2004 2005 2006 2007 9M07 9M08 3Q07 3Q08
EBIT % NOR
Operating Income
� ∆ 3Q08 – 07 = 68.6%
� ∆ 9M08 – 07 = 86.2%
� CAGR 2003 – 07 = 23.5%
OPERATING INCOME – EBIT (R$ million)OPERATING INCOME – EBIT (R$ million)
22
3Q08October, 2008
89
57
92
225
165163130
205
156
13%13%13%14% 14% 14%
17% 16%18%
2003 2004 2005 2006 2007 9M07 9M08 3Q07 3Q08
EBITDA % NOR
EBITDA
� ∆ 3Q08 – 07 = 60.4%
� ∆ 9M08 – 07 = 72.9%
� CAGR 2003 – 07 = 16.7%
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.
23
3Q08October, 2008
5
13
2
38
33 37
10
21
10
2%
1%0%
1%2%
3%
6%
2%
1%
2003 2004 2005 2006 2007 9M07 9M08 3Q07 3Q08
Financial Exp. % NOR
Net Financial Expenses
� ∆ 3Q08 – 07 = 517.6%
� ∆ 9M08 – 07 = (51.8%)
� CAGR 2003 – 07 = (28.4)%
NET FINANCIAL EXPENSES (R$ million)NET FINANCIAL EXPENSES (R$ million)
24
3Q08October, 2008
IMPACT OF THE FX RATE VARIATIONIMPACT OF THE FX RATE VARIATION
� Impact of the FX rate variation on Finacial Expense (Revenue)
� Impact of the FX rate variation on Temporary Equity Reserve
3Q08
Balance Balance Variation
R$ MM
Foreign Investments 6.6 7.4
NDF (to expire) (8.5) (16.4)
Total Effect on Equity (1.9) (8.9)
3Q08
BalanceValue
US$ Million
FX Rate Var.
R$ million
NDF (expired) 35.8 1.5
ACC 14.6 (4.7)
Loans 30.2 (9.1)
Financial Exp./ Rev. (12.3)
25
3Q08October, 2008
30
131
7258 55
7251
209
-5
6%5%
-1%
5% 5%6%
15%
9%
25%
2003 2004 2005 2006 2007 9M07 9M08 3Q07 3Q08
Net Income % NOR
Net Income
� ∆ 3Q08 – 07 = 335.7%
� ∆ 9M08 – 07 = 277.9%
� CAGR 2003 – 07 * = 196.2%
76
55
Non-recurring gain generated by
the merger of Maxion Sistemas
Automotivos into Iochpe-Maxion
76
133
Net Income w/ Non-
recurring Effect
� ∆ 3Q08 – 07 = 82.4%
� ∆ 9M08 – 07 = 140.5%
NET INCOME (R$ million)NET INCOME (R$ million)
* Consider the absolute variation in the period
Non-recurring gain generated by
the merger of Maxion Sistemas
Automotivos into Iochpe-Maxion
26
3Q08October, 2008
115128
231
102125
132
1740.6
1.3
1.1
0.80.8
0.6
0.9
2003 2004 2005 2006 2007 9M07 9M08
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
EBITDA LTM
27
3Q08October, 2008
TJLP
62%
YUAN
6%
CDI
5%
Dollar
27%
178
- -
121
68
231
299
Short Term Long Term Total Debt Cash Net Debt
Working
Capital
6%
Import
16%
ACC
9%
Others
8%
BNDES-EXIM
61%
INDEBTEDNESS – SEP/08 (R$ million)INDEBTEDNESS – SEP/08 (R$ million)
Debt Indexation
Indexation Average Cost
Indexed in R$ 79% CDI
Indexed in US$ 5,5% per year
Debt by Lines
28
3Q08October, 2008
OPERATIONS RELATED TO FIXING THE FUTURE VALUE OF THE DOLLAR (NDFs)OPERATIONS RELATED TO FIXING THE FUTURE VALUE OF THE DOLLAR (NDFs)
� At the end of Sep/08, the company had contracted US$ 82.1 million in operations related to selling future dollar at R$
1.8701 per USD FX rate, for the period of Oct/08 to Sep/09
� At the end of Sep/08, the company had contracted US$ 5.2 million in operations related to buying future dollar at R$
1.6630 per USD FX rate, for the period of Oct/08 to Jan/09
� If the operations would expire on 09/30/2008, it would represented a negative result of R$ 8.5 million, which was
accounted as a negative temporary equity reserve
* Amount accounted as a negative temporary equity reserve
Period OperationsContracted Value
US$
Average FX
Rate
Gain/Loss*
R$ thousand
NDFs (Buying) 82,100 1.8701 (9,817)
NDFs (Selling) 5,212 1.6630 1,335
Total NDFs (8,482)
At the end
of 3Q08
29
3Q08October, 2008
54
84
6868
47
67
20 20
73
2003 2004 2005 2006 2007 9M07 9M08 3Q07 3Q08
CAPEX (R$ million)CAPEX (R$ million)
Capital Market
31
3Q08October, 2008
-58.18%
-39.62%
-39.47%
-60.00%
-50.00%
-40.00%
-30.00%
-20.00%
-10.00%
0.00%
10.00%
20.00%
Nov-07 Dec-07 Jan-08 Feb-08 Mar-08 Apr-08 May-08 Jun-08 Jul-08 Aug-08 Sep-08 Oct-08
MYPK3 IBOV IBX-100
SHARES PERFORMANCE - LTMSHARES PERFORMANCE - LTM
� Oct/08 – closing price of the 20th (R$ 14.95)
� Due to the low liquidity of MYPK3 before the conversion of the shares, was considered the price of MYPK4 before the conversion (02/26/08)
32
3Q08October, 2008
Average Daily Trade Volume LTM - R$ thousand
2,2942,598
2,952
1,413
1,747 1,6711,377
3,3702,978
1,164
1,9871,793
86
77
38
75
56 55
3743
3743
74
81
Nov-07 Dec-07 Jan-08 Feb-08 Mar-08 Apr-08 May-08 Jun-08 Jul-08 Aug-08 Sep-08 Oct-08
Volume Trades
AVERAGE DAILY TRADE VOLUME – R$ thousandAVERAGE DAILY TRADE VOLUME – R$ thousand
� Oct/08 – volume and trades until the 20th
� Due to the low liquidity of MYPK3 before the conversion of the shares, was considered the volume and trade of
MYPK4 before the conversion (02/26/08)
33
3Q08October, 2008
� Extension of the impacts of the financial crisis still to be seen
OUTLOOKOUTLOOK
34
3Q08October, 2008
RESTRUCTURINGRESTRUCTURING
� An Extraordinary Shareholders Meeting held on July 1, 2008, approved the merger of the subsidiary Maxion
Sistemas Automotivos into Iochpe-Maxion, based on its book value
� This restructuring aimed to simplify the company’s operational and corporate structure, by concentrating all
its main Brazilian operations, except for the subsidiary Amsted Maxion Equipamentos Ferroviarios S.A., in a
single company
Additional Information
36
3Q08October, 2008
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$
thousand3Q08 N.O.R 3Q07 N.O.R 9M08 N.O.R 9M07 N.O.R
Net Operating Revenue 522,983 100.0% 355,705 100.0% 1,365,713 100.0% 960,822 100.0%
Cost of Goods Sold
Raw Material (261,560) 50.0% (164,250) 46.2% (664,569) 48.7% (445,223) 46.3%
Labor / Others (147,529) 28.2% (119,154) 33.5% (417,744) 30.6% (331,489) 34.5%
(409,089) 78.2% (283,404) 79.7% (1,082,313) 79.2% (776,711) 80.8%
Gross Profit 113,894 21.8% 72,301 20.3% 283,400 20.8% 184,111 19.2%
Operating Expenses
General and Administrative (14,178) 2.7% (11,678) 3.3% (38,080) 2.8% (34,934) 3.6%
Commercial (19,666) 3.8% (13,815) 3.9% (50,077) 3.7% (42,914) 4.5%
Others 3,380 0.6% 2,676 0.8% 4,759 0.3% 1,139 0.1%
(30,464) 5.8% (22,817) 6.4% (83,398) 6.1% (76,709) 8.0%
Operating Income (EBIT) 83,430 16.0% 49,484 13.9% 200,002 14.6% 107,402 11.2%
Financial Results
Financial Revenue (25) 0.0% 5,272 1.5% 31,412 2.3% 17,286 1.8%
Financial Expenses (12,724) 2.4% (7,336) 2.1% (36,392) 2.7% (27,611) 2.9%
(12,749) 2.4% (2,064) 0.6% (4,983) 0.4% (10,325) 1.1%
Earnings After Financial Income 70,681 13.5% 47,420 13.3% 195,019 14.3% 97,077 10.1%
Non Operating Results (1,199) 0.2% (830) 0.2% (3,229) 0.2% (7,703) 0.8%
Earnings Before Taxes 69,482 13.3% 46,590 13.1% 191,790 14.0% 89,374 9.3%
Income Taxes 61,501 11.8% (16,530) -4.6% 17,416 1.3% (34,013) -3.5%
Net Income 130,983 25.0% 30,060 8.5% 209,206 15.3% 55,361 5.8%
EBITDA 92,157 17.6% 57,455 16.2% 225,266 16.5% 130,262 13.6%
37
3Q08October, 2008
ASSETS LIABILITIES
Sep-08 Sep-07 Sep-08 Sep-07
CURRENT CURRENT
Cash 28,177 25,821 Loans 177,715 100,528
Financial Investments 40,076 19,842 Payables 101,750 75,160
Receivables 291,554 176,473 Customers Advance 12,061 11,323
Inventory 237,566 162,080 Taxes 15,020 8,757
Supliers Advanced 5,481 9,271 Wage, Charges and
others 60,542 45,301
Recoverable Taxes 13,548 22,937 Others Provision 14,952 6,823
Deferred Taxes 23,376 - Others 20,145 14,713
Others 1,140 5,818 402,185 262,605
640,918 422,242
LONG TERM LONG TERM
Receivable 609 1,524 Loans 121,171 118,786
Obligatory deposits and
judicial 12,695 9,186
Provisions 55,854 56,814
Recoverable Taxes 11,010 7,761 Others 6,481 9,243
Deferred Taxes 76,100 34,785 183,506 184,843
Others 1,718 (5,510)
102,132 47,746
MINORITY - -
PERMANENT EQUITY
Investments 441 125 Capital 261,463 161,463
Plants, Property and
Equipment 350,533 296,952
Temporaty Equity
Reserve (1,891) -
Intangible 4,894 - Capital Reserves 49,078 103,472
Deferred Items 4,629 679 Retained Earnings 209,206 55,361
360,497 297,756 517,856 320,296
TOTAL ASSETS 1,103,547 767,744 TOTAL LIABILITIES 1,103,547 767,744
BALANCE SHEET (R$ thousand)BALANCE SHEET (R$ thousand)
38
3Q08October, 2008
SHAREHOLDERS STRUCTURESHAREHOLDERS STRUCTURE
Shareholders Structure on 9/30/2008
Shareholders Shares %
Ioschpe Family 13,534,057 28.53%
BNDESPAR 11,593,401 24.44%
Controlling Shareholders 25,127,458 52.98%
Others 22,304,228 47.02%
Total Iochpe-Maxion 47,431,686 100.00%
EARNINGS RELEASE – 3Q08EARNINGS RELEASE – 3Q08
October, 2008