Motors | Automation | Energy | Transmission & Distribution | Paints
Q3 2010 Results Conference Call
October 28th, 2010
Q3 2010 Conference Call
October 28th, 2010
Disclaimer
The statements that may 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.
Q3 2010 Conference Call
Page 2
October 28th, 2010
General Comments on Q3 2010
„
„
Important aspects:
„
Consolidation of acquisitions (ZEST, South Africa, and Voltran, Mexico)
„
Growth in foreign markets, despite the appreciation of the Real.
Late cycle business
„
Investment in capacity expansion occurs after the resumption of
consumption
„
More evident in areas such as GTD.
„
Recent renewable energies auction has left us optimistic with wind energy in
Brazil
„
Long-term attractiveness:
„
Emerging markets growth, with specific demands;
„
Energy efficiency regulation, increasing the market for high-performance
products;
„
New, more intelligent and efficient forms to produce, process and use
energy ("smart grid“)
„
Brazil specific events, such as FIFA World Cup and Olympic Games
Q3 2010 Conference Call
Page 3
October 28th, 2010
Quarterly Highlights
Gross Operating Revenue
Domestic Market
External Markets
External Markets in US$
Net Operating Revenue
Gross Operating Profit
Gross Margin
Quarterly Net Income
Net Margin
EBITDA
EBITDA Margin
Q3 2010
1.419.161
Q2 2010
1.227.421
Growth %
15,6%
906.954
512.207
298.020
831.210
396.211
221.100
9,1%
29,3%
34,8%
889.302
393.200
210.840
2,0%
30,3%
41,3%
1.188.622
373.497
31,4%
141.952
11,9%
209.196
17,6%
1.013.015
309.158
30,5%
116.138
11,5%
174.015
17,2%
17,3%
20,8%
1.055.465
402.210
38,1%
160.103
15,2%
254.840
24,1%
12,6%
-7,1%
22,2%
20,2%
Q3 2009 Growth %
1.282.506
10,7%
-11,3%
-17,9%
Figures in R$ Thousands
Q3 2010 Conference Call
Page 4
October 28th, 2010
Gross Operating Revenues
Evolution of Gross Revenues – Domestic Market
(in R$ million)
Evolution of Gross Revenues – External Market
(in US$ million)
External Market in US$
-8%
Quarterly Average FX
2%
23%
2,1702
1,9142
1,6819
1,8649
1,7187
42%
37%
968
785
889
-32%
34%
907
309,9
226,4
553
Q3 2007
Q3 2010 Conference Call
Q3 2008
Q3 2009
Q3 2010
Q3 2006
Page 5
Q3 2007
298,0
210,8
168,6
Q3 2006
41%
Q3 2008
Q3 2009
Q3 2010
October 28th, 2010
Global Presence
Gross Revenues Breakdown – Q3 2010
8%
13%
Europe
North America
4%
Asia & Oceania
7%
64%
6%
5%
South & Central America
Q3 2010 Conference Call
Africa
Brazil
Page 6
October 28th, 2010
Business Areas
Gross Revenues Breakdown – Q3 2010
918
5%
15%
19%
1.489
5%
13%
1.219
6%
13%
1.419
1.283
7%
12%
6%
14%
25%
25%
22%
35%
58%
56%
60%
61%
46%
3T06
3T07
Industrial Equipment
Q3 2010 Conference Call
3T08
GTD
3T09
Domestic Use
Page 7
3T10
Paints & Varnishes
October 28th, 2010
Cost of Goods Sold
Other Costs
33%
Depreciation
5%
Other
Materials
18%
Q3 2010 Conference Call
Other Costs
29%
Q3 10
Depreciation
5%
Steel &
Coper
44%
Page 8
Other
Materials
24%
Q3 09
Steel &
Coper
42%
October 28th, 2010
Main changes on EBITDA
180,2
(43,6)
(3,5)
FXImpacto Impact on
Cambial sobre Gross
Revenues
receita bruta
(161,4)
Deduction
Deductionon
on
Deduction
on
Gross
Gross
Gross
Revenues
Revenues
Revenues
254,8
Volumes,
Aumento de Prices &
volumes & Product
Mix
preços e mix Changes
de produtos EBITDA Q3 09
Q3 2010 Conference Call
(20,6)
3,4
COGS
CPV (ex depreciação)
Selling
Expenses
General and
Administrative
Expenses
(0,1)
209,2
Profit Sharing
Program
EBITDA Q3 10
October 28th, 2010
Cash Flows
Accumulated 9 months 2010
(336 )
420
189
273
Fluxo Operacional
Q3 2010 Conference Call
Fluxo de
Investimentos
Fluxo de
Financiamento
Variação do Caixa
no Período
October 28th, 2010
Financing Policies
CASH & EQUIVALENT
- Current
- Long Term
DEBT
- Current
- Long Term
NET CASH (DEBT)
Q3 2010 Conference Call
September 2010
2.399.773
2.399.773
2.345.147
841.311
1.503.836
54.626
December 2009
2.127.117
2.127.117
1.872.533
895.885
976.648
254.584
Page 12
September 2009
2.003.241
2.003.241
1.932.624
943.532
989.092
70.617
October 28th, 2010
Capacity Expansion Investments
Outside Brazil
Brazil
91,9
73,8
20,1
63,5
61,4
15,7
71,8
47,8
32,7
38,2
13,7
13,8
19,1
Q1 09
Q2 09 Q3 09
2009
Q3 2010 Conference Call
34,2
24,3
27,2
Q4 09
Q1 10
Page 13
53,7
43,7
13,0
30,1
40,7
Q2 10 Q3 10
2010
October 28th, 2010
Contacts
www.weg.net/ir
ƒLaurence Beltrão Gomes
IRO
laurence@weg.net
ƒ Luís Fernando M. Oliveira
Investor Relations Manager
+55 (47) 3276-6973
luisfernando@weg.net
MSN Messenger
luisfernando@weg.com.br
ƒDaniel Segalin
Investor Relations Analyst
+55 (47) 3276-6106
ri@weg.net
Q3 2010 Conference Call
twitter.com/weg_ir
Page 14
October 28th, 2010