News Release
WEG announces new structure for
business segments disclosure
Jaraguá do Sul, March 29, 2006 - WEG S.A. (Bovespa: WEGE3, WEGE4), one of the largest
manufacturers of electric motors and related electrical equipment in the world, informs its shareholders
and the general investing public that, aiming at improving communications with investors and facilitate
the understanding of its operations, adopted a new revenues disclosure structure, that from now on will
be disclosed according to business segments. These segments are:
•
Electro-Electronic Industrial Equipments – Includes both low and medium tension electric
motors, drivers, industry automation equipments and services, components and maintenance
services. The consumer markets for theses products are diversified, the main clients being capital
goods Original Equipment Manufacturers (OEM) and large industrial corporations. In this segment
WEG has global presence, with large growth potential. Performance for this segment is basically
dependent on industrial production growth and investments in capacity expansion, both in Brazil and
in the rest of the world.
•
Energy Generation, Transmission and Distribution – Includes electric generators for hydraulic,
thermal (several fuels) and wind power plants, transformers, distribution substations, control panels
and energy automation services. The main consumers are concessionaries of generation,
transmission and distribution of electric energy, small hydraulic power plants (PCH), energy cogenerators and large industrial corporations. In this segment, one of the fastest growing segments in
the recent past and one also with large growth potential, WEG focus is to have presence in all the
Americas. The segment performance is dependent on growth of the diversified investment in energy.
•
Electric Motors for Domestic Use – includes all the single-phase motors. The consumer market is
diversified, with some concentration in large appliance (“white line”) OEMs (washing and drying
machines, heating, ventilation and air conditioning), general use water pumps, exercise machines
and lawn mowers, among others. In this segment WEG focus its operations in Latin America and
segment performance is basically dependent on consumer disposable income level, credit
availability and interest rate levels.
•
Paints and Varnishes – Includes liquid and powder paints and electro-isolating varnishes, with
clear focus on industrial applications, shipbuilders and paints for aggressive environments.
Consumers are normally the same clients that WEG already serves in other segments, allowing for
great marketing synergies. WEG’s focus in this segment is the Brazilian market and segment
performance depends on industrial production and overall GDP growth.
The table presents WEG’s Gross Revenues breakdown into the four segments over the past two years,
including quarterly data:
1Q04 2Q04
Electro-electronic Industrial Equipments
63.8% 63.7%
Energy Generation, Transmission and Distribution 8.3% 9.4%
Electric Motors for Domestic Use
21.3% 20.9%
Paints and Varnishes
6.6% 5.9%
3Q04
61.3%
10.5%
22.2%
6.1%
###
4Q04
63.0%
11.2%
19.5%
6.3%
2004
62.8%
10.0%
21.0%
6.2%
1Q05
65.1%
11.6%
17.3%
6.0%
2Q05
61.3%
15.3%
17.3%
6.2%
3Q05
62.1%
13.6%
17.7%
6.6%
4Q05
60.3%
14.8%
18.0%
6.9%
2005
62.2%
13.8%
17.6%
6.4%