Iochpe-Maxion - 2005 Results Conference Call Presentation

Conference Call2005 ResultsFebruary 17, 2006

2

DISCLAIMER

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 becomplete. 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, orcompleteness 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-lookingstatements 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 orpurchase any securities. Neither this presentation nor anything contained herein shall form the basis of anycontract or commitment whatsoever.

3

2005 HIGHLIGHTS

Net income of R$72 million, a growth of 42% over the previous year;

Consolidated net operating revenue of R$1,494 million, a growth of 36% over theprevious year;

EBITDA(*) of R$205 million, a growth of 32% over the previous year;

Net bank debt of R$125 million (R$102 million in 2004), or 0.6x EBITDA(*) (0.6x in2004)

(*) 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.

M a r k e t2 0 0 5

5

216180

216

318366

93 9656 40

72114

156

5037

2001

2002

2003

2004

2005

4Q04

4Q05

Production

Export

LIGHT COMMERCIAL – BRAZIL (‘000 units)

CAGR 01 – 05 = 14%

CAGR 01 – 05 = 29%

∆ 4Q 05 – 04 = 3%

∆ 4Q05 – 04 = 33%

Source: Anfavea

6

TRUCKS – BRAZIL (‘000 units)

77 69 79

107 116

28 27253713

57 126

2001

2002

2003

2004

2005

4Q04

4Q05

Production

Export

CAGR 01 – 05 = 11%

CAGR 01 – 05 = 54%

∆ 4Q 05 – 04 = (1%)

∆ 4Q05 – 04 = 86%

Source: Anfavea

7

BUSES – BRAZIL (‘000 units)

24 2327 29

35

7 77 7 913

19

45

2001

2002

2003

2004

2005

4Q04

4Q05

Production

ExportCAGR 01 – 05 = 11%

CAGR 01 – 05 = 29%

∆ 4Q 05 – 04 = (2%)∆ 4Q05 – 04 = (8%)

Source: Anfavea

8

AGRICULTURAL MACHINERY – BRAZIL (‘000 units)

4452

5969

53

1698 10

2131 31

68

2001

2002

2003

2004

2005

4Q04

4Q05

Production


CAGR 01 – 05 = 39%

∆ 4Q 05 – 04 = (42%)∆ 4Q05 – 04 = (22%)

Source: Anfavea

9

PASSENGER CARS – BRAZIL (‘000 units)

1,496 1,521 1,5051,757

1,931

453 482319 363 440 497 606 149134

2001

2002

2003

2004

2005

4Q04

4Q05

Production


CAGR 01 – 05 = 17%

∆ 4Q 05 – 04 = 6%

∆ 4Q05 – 04 = 11%

Source: Anfavea

10Units

748

2,459

5,642

7,270

1,447 1,775294

2001

2002

2003

2004

2005

4Q04

4Q05

Sales

RAILWAY FREIGHT CARS – BRAZIL (units)

Source: Amsted Maxion estimate

CAGR 01 – 05 = 77%

∆ 4Q 05 – 04 = 23%

11Tons

3,500

2,288

3,386

5,100

686 800

2,230

2001

2002

2003

2004

2005

4Q04

4Q05

Sales

RAILWAY CASTINGS – BRAZIL (tons)

Do not includecastings used in theassembly of our ownfreight cars


CAGR 01 – 05 = 10%

∆ 4T 05 – 04 = 17%

12Units

RAILWAY WHEELS – BRAZIL ( ‘000 units)

4250

4248

11 7

50

2001

2002

2003

2004

2005

4Q04

4Q05

Sales


CAGR 01 – 05 = 4%

∆ 4Q 05 – 04 = (36%)

Do not includecastings used in theassembly of our ownfreight cars

13

MARKET SHARE – BRAZIL (2005)

71%

26%3%

Maxion

Dana

Chassis

60%

34%

6%

Maxion

Borlem

Commercial VehicleWheels

84%

16%

Maxion

Railway FreightCars

80%

20%

Maxion

RailwayCastings

OEM OtherOther CruzaçoMaxion

2004

69% 57% 74% 80%

Source: Maxion estimate

C o n s o l i d a t e dR e s u l t s

2 0 0 5

15

NET OPERATING REVENUE - 2005

Segment (%) Customer (%)

40%

6%

54%

Amsted Maxion (*)

Wheels and Chassis Division

Automotive Comp.Division

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

R$1,494 million

22%

15%10%

5%5%4%

4%3%

19%

13%

Other

DaimlerChrysler

Volks-wagen

GeneralMotors

Export

FordCVRD

MRS

Tractors

Scania

16

EXPORTS - 2005

Segment (%) Destination (%)

53%

37%

10%

RailwayEquip.

Chassis

CommercialVehicleWheels

46%

11%

11%7%1%

25%

Europe

Africa/Middle EastAsia/

Pacific

Canada/ Mexico

USA SouthAmerica

US$96.0 million

R$231.4 million

17R$ MM

374

676

1,099

1,494

312 358411

2001

2002

2003

2004

2005

4Q04

4Q05

NET OPERATING REVENUE (R$ million)

CAGR 01 – 05 = 41%

∆ 4Q 05 – 04 = 15%

∆ 05-04 = 36%

18R$ MM

∆ 05-04 = 61%

EXPORTS (R$ million)

48

101

144

231

45 5475

2001

2002

2003

2004

2005

4Q04

4Q05

CAGR 01 – 05 = 48%

∆ 4Q 05 – 04 = 20%

19

GROSS PROFIT

80 87137

228

53 65

28921% 21% 20% 21%19%

17% 18%

0

50

100

150

200

250

300

350

2001

2002

2003

2004

2005

4Q04

4Q05

0%

10%

20%

30%

40%

50%R$ MM % net sales

20

EBIT

27 3658

127

178

2340

7%

9% 9%

12% 12%

7%

11%

0

50

100

150

200

2001

2002

2003

2004

2005

4Q04

4Q05

0%

5%

10%

15%


21

NET FINANCIAL EXPENSES

41

54

38 37

7 8

33

11%

13%

6%

3%2% 2% 2%

0

25

50

75

2001

2002

2003

2004

2005

4Q04

4Q05

0%

5%

10%


22

EARNINGS AFTER FINANCIAL EXPENSES

(14) (18)

19

141

1633

94

3%

9% 9%

5%

9%

-4%-4%

(50)

(25)

0

25

50

75

100

125

150

2001

2002

2003

2004

2005

4Q04

4Q05

-10%

-5%

0%

5%

10%


23

EBITDA (*)

58 6989

156

205

3048

16%17%

13%14% 14%

9%

13%

0

50

100

150

200

250

2001

2002

2003

2004

2005

4Q04

4Q05

0%

5%

10%

15%



24

NET EARNINGS

25

72

189

51

(5)(24)

7%

-6%

-1%

5% 5%3%

5%

(40)

(20)

0

20

40

60

80

2001

2002

2003

2004

2005

4Q04

4Q05

-10%

-5%

0%

5%

10%

15%


25

NET BANK DEBT

R$ MM x EBITDA (*)

65

125102115106

1.1

1.5

1.3

0.6 0.6

0

30

60

90

120

150

2001

2002

2003

2004

2005

0.0

0.5

1.0

1.5

2.0


26

INCOME STATEMENT (R$ thousand) – YEAR


27

STOCK PERFORMANCE

(*) after reverse split

A d d i t i o n a lI n f o r m a t i o n

29

INCOME STATEMENT (R$ thousand) – 4th QUARTER


30

CASH FLOW STATEMENT (R$ thousand)

31

NET DEBT BREAKDOWN – DEC ‘05 (R$ million)

LINES SHORT TERM

LONG TERM TOTAL

Trade Finance / Export 33.9 25.4 59.3Equipment financing 45.3 72.3 117.6

79.2 97.7 176.9

(-) Cash and cash equivalents 52.0 52.0

Net debt 27.2 97.7 124.9

32

DEBT INDEXATION – DEC ‘05 (%)

IGPM(whosale inflation

index)

64%

33%3% Dollar

TJLP(BNDES

rate) AVERAGE COST (DEC ‘05)

In R$ - 72% CDI

In US$ - 6,8% p.a.

33

FREIGHT CARS – FIRM ORDERS FOR DELIVERY IN 2006

CVRD / FCA – 1,276 units

Brasil Ferrovias – 1,150 units

MRC (Mitsui / Bunge / ALL) – 300 units

MRS – 280 units

CVG Ferrominera Orinoco – 75 units

Total – 3,081 unitsRevenue approx.

R$600 million

Conference Call2005 ResultsFebruary 17, 2006

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Iochpe-Maxion - 2005 Results Conference Call Presentation