4Q11 Conference Call
February 16th, 2012
Disclaimer
The statements that may eventually be made during this conference call
relating to WEG’s business perspectives, projections and operating and
financial goals and to WEG’s potential future growth are management
beliefs and expectations, as well as information that are currently available.
These statements involve risks, uncertainties and the use of assumptions,
as they relate to future events and, as such, depend on circumstances
that may or may not be present.
Investors should understand that the general economic conditions,
conditions of the industry and other operating factors may affect WEG’s
future performance and lead to results that may differ materially from those
expressed in such future considerations.
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February 16, 2012
Agenda
„
Sérgio Schwartz – Executive Vice President
„ Growth
„ Revenues performance
„ Laurence Beltrão Gomes – Finance and Investor Relations Officer.
„ Costs, Expenses, EBITDA
„ Cash Flow
„ Capex
„ Harry Schmelzer – Chief Executive Officer
„ Strategic Planning WEG 2020
„ Questions and answers
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February 16, 2012
Highlights
Yearly Figures
Gross Operating Revenue
Net Operating Revenue
Domestic Market
External Markets
External Markets in US$
Gross Operating Profit
Gross Margin
Quarterly Net Income
Net Margin
EBITDA
EBITDA Margin
EPS
2011
6,130,291
5,189,409
2,902,958
2,286,451
1,361,689
1,556,051
2010
5,282,737
4,391,973
2,670,443
1,721,530
982,835
1,386,952
30.0%
31.6%
586,936
519,782
11.3%
11.8%
882,340
789,110
17.0%
18.0%
0.9461
0.8371
%
16.0%
18.2%
8.7%
32.8%
38.5%
12.2%
2009
%
5,110,596 3.4%
4,210,620 4.3%
2,526,430 5.7%
1,684,190 2.2%
849,655 15.7%
1,356,401 2.3%
32.2%
12.9%
550,543 -5.6%
13.1%
11.8%
837,424 -5.8%
19.9%
13.0%
0.8914 -6.1%
Figures in R$ Thousands
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February 16, 2012
Net Operating Revenue
Annual Evolution
in R$ million
5,189
3,749
20%
4,502
-6%
4,211
4%
4,392
18%
2,286
1,842
1,684
1,722
2,202
2,660
2,526
2,670
2,903
2007
2008
2009
2010
2011
1,547
Domestic Market
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External Market
February 16, 2012
Highlights
Quarterly Figures
Q4 2011
1,724,834
1,468,551
781,938
686,613
Q3 2011
1,552,044
1,317,483
737,350
580,133
%
11.1%
11.5%
6.0%
380,772
353,520
7.7%
445,686
418,266
6.6%
30.3%
31.7%
Net Income
156,248
154,567
Net Margin
10.6%
11.7%
258,210
243,743
EBITDA Margin
17.6%
18.5%
EPS
0.2518
0.2491
Gross Operating Revenue
Net Operating Revenue
Domestic Market
External Markets
External Markets in US$
Gross Operating Profit
Gross Margin
EBITDA
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18.4%
Q4 2010
%
1,504,610 14.6%
1,258,429 16.7%
736,415 6.2%
522,014 31.5%
304,664 25.0%
391,300 13.9%
31.1%
1.1%
141,509 10.4%
11.2%
5.9%
224,149 15.2%
17.8%
1.1%
0.2279 10.5%
Figures in R$ Thousands
February 16, 2012
Net Operating Revenue
Domestic Market
in R$ million
6%
13%
-4%
8%
627
679
654
Q4 2007
Q4 2008
Q4 2009
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736
782
Q4 2010
Q4 2011
February 16, 2012
Net Operating Revenue
External Market
in US$ million
1,7858
External Market in US$
2,2860
1,7389
Quarterly Average FX
1,7134
1,8032
25%
25%
-10%
22%
381
221
Q4 2007
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270
243
Q4 2008
Q4 2009
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305
Q4 2010
Q4 2011
February 16, 2012
Business Areas
Gross Revenue breakdown
in R$ million
1.242
6%
16%
1.552
5%
11%
21%
24%
25%
31%
7%
56%
52%
4Q 2007
4Q 2008
Industrial Equipment
4Q11 Conference Call
1.505
7%
14%
1.307
6%
15%
32%
1.725
6%
10%
GTD
47%
54%
60%
4Q 2009
4Q 2010
4Q 2011
Domestic Use
Page 9
Paints & Varnishes
February 16, 2012
Cost of Goods Sold
Other Costs
10%
Depreciation
5%
Other Costs
9%
Depreciation
4%
Materials
63%
Labor
21%
2010
2011
Labor
22%
Materials
66%
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February 16, 2012
Main effects on EBITDA
in R$ million
35,4
10,1
184,8
FX Impact on
Gross
Revenues
151,2
Deductions on
Gross Revenues
21,2
COGS (ex
depreciation)
224,1
Volumes, Prices
& Product Mix
Changes
EBITDA Q4 10
4Q11 Conference Call
Selling
Expenses
5,7
2,0
258,2
General and
Administrative
Expenses
Profit Sharing
Program
EBITDA Q4 11
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February 16, 2012
Sources and Uses of Cash
in R$ million
Sources
Increase in Cash
-27%
Pre-tax income
32%
Increase in Debt
43%
R$ 2.406
million
Acquisition
-10%
Depreciation and
amortization
8%
Other accounts
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Dividends/interest
on equity capital
-13%
Treasury stock
-0%
R$ 2.406
million
Other / Adjustments
Decrease in Working
2%
Capital
11%
Uses
payable
4%
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Capex
-8%
Increase in Working
Capital
-42%
February 16, 2012
Capex Program
Outside Brazil
Brazil
73,8
61,4
34,2
63,1
53,7
44,1
13,0
2,0
43,7
27,2
30,1
40,7
42,1
Q1
Q2
Q3
Q4
41,1
33,8
Q1
2010
1,0
7,3
2,4
8,2
25,6
49,9
38,8
42,6
Q2
Q3
62,1
Q4
2011
in R$ million
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February 16, 2012
Strategic Planning WEG 2020
Corporate aspirations for 2020
„
„
Search for continuous growth with:
„ Defense of leadership positions in several markets and
segments;
„ Introduction of new products and technologies;
„ Introduction of products and solutions in new geographies
dominated.
Reach annual revenues of R$ 20 billion in 2020
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February 16, 2012
Strategic Planning WEG 2020
Aspirations and strategic direction
20,00
0,73
2,60
2,40
3,60
5,48
17.0% a.a.
5,19
WEG
2011
WMO
15.3%
15.5%
WEN
21.3%
11.2%
WTD
15.2%
17.4%
WAU
WTI
19.5%
83.9%
16.0%
58.9%
WEG
2020
CAGR 2011‐2020*
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February 16, 2012
Strategic Planning WEG 2020
Major trends and opportunities
„
Energy Efficiency:
„
Electric motors;
„ Gearboxes and gearmotors;
„ Frequency converter, motor starters and switching devices, control and protection of
electrical circuits and industrial automation;
„ Electro-electronic industrial systems;
„
Renewable Energy
„
Generators and transformers;
„ Solutions for renewable and distributed energy, exploring all opportunities in small
hydropower plants, biomass, wind and solar;
„
Mobility
„
„
Electric traction solutions for urban transportation and maritime vehicles
Smart Grid
„
Devices for control, maneuver and protection of electrical circuits and automation;
„ Critical power, UPS (uninterruptable power supply), alternators for gensets;
„ Power substations;
„ Smart meters
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February 16, 2012
Contacts
ƒLaurence Beltrão Gomes
Investor Relations Officer
laurence@weg.net
ƒ Luís Fernando M. Oliveira
Investor Relations Manager
+55 (47) 3276-6973
luisfernando@weg.net
twitter.com/weg_ir
www.weg.net/ri
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February 16, 2012