DISCLAIMER. Important Information

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2 Important Information DISCLAIMER By THIS INSTRUMENT, we make statements about future events that are subject to risks and uncertainties. Such statements are based on the beliefs and assumptions of our Management and on information that the Company has currently access to. Statements about future events include information about our intentions, beliefs or current expectations, as well as those of the members of the Board of Directors and Administrators of the Company. The statements and information about the future also include information about possible or presumed operating results, as well as statements preceded by, followed by or that include the words "believes", "may", "will", "continues", "expects", "anticipates", "intends", "plans", "estimates" or similar expressions. The statements and information about the future are not guarantees of performance. They involve risks, uncertainties and assumptions because they relate to future events, depending, therefore, on circumstances that may either occur or not. The future results and the creation of shareholder value may differ significantly from those expressed or suggested by statements regarding the future. Many of the factors that will determine these results and figures are beyond our ability to control or predict. 2

3 Main Figures of Q Δ % 4Q17 4Q16 Δ % Gross Revenue * 1, , % % Net Revenue % % Domestic Market % % Foreign Market % % Foreign Market US$ MM % % Exports - Brazil US$ MM % % Gross Profit % % Gross Margin 26.1% 28.5% -2.4 pp 27.2% 25.7% 0.1 pp Operating Profit % % Operating Margin 7.8% 10.3% -2.5 pp 7.1% 2.3% 2.2 pp EBITDA % % EBITDA Margin 12.8% 15.2% -2.4 pp 13.1% 7.3% 0.8 pp Net Profit % % Net Margin 7.7% 7.9% -0.2 pp 4.7% 5.7% -1.0 pp Adjusted EBITDA Adjusted EBITDA Margin 15.3% 17.2% Values in R$ million (except for exports, profit per share and percentage). (*) Includes intercompany sales. (*) Includes intercompany sales. 3

4 Consolidated Net Revenue Q17 R$ million The best quarter of the year (4Q17); Sales volume higher than that in 4Q16 (+ 20.2%) in brake Linings for heavy vehicles and +14.3% in brake pads); Domestic Aftermarket with heated demand; Vehicle production picking up, generating future vehicle fleets; Average dollar rate 8.5% lower than that in the previous year; Impact of hedge accounting operations on the year-to-date revenues (-R$9.1 MM); Economic issues influencing the performance of sales in some regions (Latin America, Europe and Africa). 4

5 Growth in the domestic market Net Revenue in Domestic Market R$ million Domestic Market Aftermarket 42.8% OEM 7.4% Pick-up in demand for brake linings for commercial vehicles; Production and sales of vehicles picking up, helping future vehicle fleets to grow; Aftermarket with full demand over the last year; 5

6 Foreign Market Net Revenue in the Foreign Market R$ million Foreign Market Aftermarket 44.7% Improved American market (OEM and Aftermarket) and evolution of sales to Mexico; New commercial partners and projects are reflecting positively in the American market; OEM 5.1% Improvement in sales performance for Argentina in 4Q17; Growing volumes, although impacting revenues due to exchange rate (Real - stronger); Performance in Africa affected by short-term problems; Customers with high inventory stocks in Europe; Foreign exchange and hedge accounting impacts 6

7 Consolidated EBITDA R$ million Main impacts in 2017 Hedge accounting (- 9.1 MM); Impairment (- 8.8 MM) in Fras-le subsidiary in North America; Adherence to the Tax Regularization Program (- 7.2 MM). Main impacts in 4Q17 Impairment (- 4,8 MM) in Fras-le subsidiary in North America; Adherence to the Tax Regularization Program (-2.1 MM). 7

8 Adjusted EBITDA R$ million Adjusted EBITDA in 4Q17 (17.1%) was the best quarterly performance of the year. Impairment by Fras-le subsidiary in North America - Brake Linings Unit for heavy vehicles. 8

9 Net Income R$ million and % Tax relief with interest on net equity reflecting positively; Positive financial result (financial investment income). Non-recurring operating expenses (Armetal, Farloc and Fanacif acquisitions); Tax rate reduction in the USA (negative impact on deferred assets of controlled company FNAI); 9

10 One-off factors that impacted the Need for Working Capital and Cash Generation: Consolidation of Armetal, Farloc and Fanacif raise in customers` balances, stocks, suppliers and in other sources of funds); New Warehouse in Colombia (formation of initial stock); Increase in inventories due to purchase of steel in advance (to mitigate future price increase). Note: the year 2016 includes R$ million for capital stock payment - Public Offering of Shares. Result from variations in Need for Working Capital; Higher level of disbursements for investments; Higher level of disbursement for payment of interest on net equity. 10

11 Recent Expansion Actions LATIN AMERICA ARMETAL FARLOC FANACIF JURID DO BRASIL FRAS-LE PANAME RICANA ASIA FRAS-LE CHINA ASK FRAS-LE (India) Map by Ssolbergj Aquarius.geomar.de Industrial Park Warehouse 11

12 Expansion Strategy Jurid do Brasil JURID DO BRASIL CONTROL: JV WITH FEDERAL MOGUL MANUFACTURING OF BRAKE PADS FOR LIGHT VEHICLES AND STRENGHTENING OF THE OEM MARKET; SHAREHOLDING STRUCTURE: 80.1%: FRAS-LE; 19.9%: FEDERAL MOGUL REVENUES IN 2017: R$ 42,2 MILLION (FULL YEAR) TURN AROUND OPERATION GOALS ADVANTAGES Strengthen Fras-le`s OEM market for light vehicles; Participar de cotações e projetos globais com Federal Mogul Ampliação de canais de distribuição com as marcas da Jurid (Jurid, Ferodo e Stop); FM global platform and formulations; Projects/designs are already in place / access to OEM; Global partner; 12

13 Expansion Strategy Armetal/Farloc/Fanacif Revenues 2017: US$ 43.9 million; EBITDA Margin in 2017: 16.0%; Foto Armetal One of the largest distributors of auto parts in Argentina; 28% market share in heavy brake linings under the brands Raybestos and Plasbestos; Designs, produces, distributes and sells auto parts for light and heavy vehicles, focusing mostly on brake parts and suspension systems; Located in Pacheco (Buenos Aires). Production of brake fluids, coolants, antifreeze and anticorrosive (bottling and packaging); Leader in brake fluids with 55% market share; Approximately 4,000 m ² in its own building; Located in San Martin (Buenos Aires); JV with Federal Mogul; Manufactures brake linings and pads; Brazil and Argentina account for approximately 84% of Net Revenue (65% intercompany); Approximately 9,000 m ² of industrial plant, in its own building; Located in Montevideo, Uruguay. 13

14 Expansion Strategy ASK Fras-le (India) SET UP OF A JV IN INDIA JAN 25, 2018 NAME: ASK FRAS-LE FRICTION PRIVATE LIMITED. MANUFACTURES BRAKE PADS AND BRAKE BLOCKS FOR COMMERCIAL VEHICLES SHAREHOLDING STRUCTURE: FRAS-LE: 51%; ASK: 49% INITIAL SALES PROJECTED: US$ 12 MILLION (FULL YEAR) FRAS-LE PRODUCTION BASE AND ACCESS TO EXPORT MARKETS VIA INDIA; GOALS ADVANTAGES Participate in a huge market with incredible growth potential Low cost of manufacture; allows us to compete in exports with lower prices Increased leverage in purchasing raw material Speed- Ready and operational operation, including certifications. There is already an initial sales volume Capable and agressive partner - Knows the business dynamics in the country. 14

15 Awards and Highlights Exame Magazine The Best & the Largest Companies st in AutoIndustry ADVB-RS ¹ Export Award RS Winner in the Market Diversification category Magazines ""O Carreteiro" and "Transporte Mundial" - Best Truck 2017 Winner in the Brake Systems category. Parker Hannifin customer - Supplier Excellence Award Excellence in customer service/support, delivery time, and continuous improvement OTM Editora The Best & the Largest Companies 2017 Award in the Parts for Trucks and Buses category (¹) Association of Sales and Marketing Managers of Brazil. 15

16 Expectations Drivers Total Gross Revenue 1 Consolidated Net Revenue Foreign Revenue 2 Imports Investments Guidance (Without exclusions Intercompany 2 (Exports out of Brazil + Operations abroad) Forecast R$ 1.6 billion R$ 1.1 bilion US$ million US$ 20.0 million R$ 42.0 million 16

17 Expectations In the short term: 2018 with increasing demand and progress inexpansion projects; Sales in foreign market showing signs of growth; Investments and expansion in production capacity; Optimism and growth in global economy leading to inflationary pressures. In the medium term, progress in strategic initiatives: Continued expansion; Broader and diversified product portfolio; Increased sales through foreign operations; Gains in synergies, especially in recent acquisitions; 17

18 Possible Questions Turnaround in the acquired companies; Synergy gains in the short term; Pipeline after Mergers & Acquisitions; 18

19 Raul Anselmo Randon RAUL RANDON A history of professionalism, simplicity and hard work. Business success, prosperity and solidity have not changed the way Mr. Raul Anselmo Randon used to relate to everyone, both inside and outside the Company. He was, above all, a simple man who built his life through hard work, dedication to his family and to the community. From his parents he inherited the value of hard work, which dignifies people, produces wealth and consequently, makes life better and more fulfilling, and this is legacy he leaves to the world. 06/08/ /03/

20 Thank You! Investor Relations Area Site: Phone: +55 (54)

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22 Net Income Comparison R$ million 22

23 Comparison of Physical Volumes Sold R$ million Sales by Product Line - Consolidated Product Lines Δ % 4Q17 4Q16 Δ % Brake Linings for Heavy Vehicles % % Brake Pads % % Other Friction Materials % % Total Friction Materials (Fras-le) % % Cylinders and Other Brake Products % % Polymer Solution % % Total Brakes and Cylinders (Controil) % % 23

24 Cost of Products Sold (COGS) Composition 24

25 Debt Profile and Amortization Schedule 25

26 Net Debt/EBITDA Note: In the periods ended December/2016 and December/2017, there was financial surplus in the Net Debt indicator, due to funds raised through Stock Offering in Disbursements on account of acquisitions in 1Q18. 26

27 Capex and ROE 27

28 Turnover and Market Value Market Cap R$ 1.2 billion 28

29 Shareholding Structure and Shareholders Remuneration 29

30 Investor Relations Area Site: Phone: +55 (54)