weg q2 2012 conference call

2Q12 C f C ll2Q12 Conference CallJuly 26th, 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 conditionsInvestors 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

d i h f t id tiexpressed in such future considerations.

2Q12 Conference Call July 26, 2012

HighlightsQuarterly FiguresQuarterly Figures

Q2 2012 Q1 2012 % Q2 2011 %Net Operating Revenue 1 528 791 1 369 762 11 6% 1 277 258 19 7%Net Operating Revenue 1.528.791 1.369.762 11,6% 1.277.258 19,7% Domestic Market 729.235 714.268 2,1% 723.348 0,8% External Markets 799.556 655.494 22,0% 553.910 44,3%

$ 406 915 370 825 347 886 External Markets in US$ 406.915 370.825 9,7% 347.886 17,0%Gross Operating Profit 461.661 391.967 17,8% 381.437 21,0%Gross Margin 30,2% 28,6% 29,9%Net Income 139.819 148.247 -5,7% 154.557 -9,5%Net Margin 9,1% 10,8% 12,1%EBITDA 260.028 208.638 24,6% 215.579 20,6%EBITDA Margin 17,0% 15,2% 16,9%EPS 0,2254 0,2390 -5,7% 0,2491 -9,5%

Figures in R$ ThousandFigures in R$ Thousand


Net Operating RevenueDomestic MarketDomestic Market

in R$ million

14% 15%1%

-14% 5%15%

702 601 629 723 729601 629


Q2 2008 Q2 2009 Q2 2010 Q2 2011 Q2 2012

Net Operating RevenueExternal MarketExternal Market

in US$ million

1 65292,0705 1 7920 1 5922 1,9649

External Market in US$ Quarterly Average FX

17%

1,6529 1,7920 1,5922 ,

13% 3%

62%

348407

-13% 3%

238 207 214

Q2 2008 Q2 2009 Q2 2010 Q2 2011 Q2 2012


Q2 2008 Q2 2009 Q2 2010 Q2 2011 Q2 2012

Business AreasNet Revenue breakdownNet Revenue breakdownin R$ million

1.5290 6%

1 011

1.2778%

7%

5%

2,4%

2,4%

5%

5%

0,2%

0,6%

1.011

15%

13%

6%

7%

10%

7%

2,8%6%

0,2%

7%

41%

29%

34%19%

25%27% 29%

2Q 2010 2Q 2011 2Q 2012Industrial Equipment DM Industrial Equipment EMGTD DM GTD EM


Domestic Use DM Domestic Use EMPaints & Varnishes DM Paints & Varnishes EM

Cost of Goods Sold

Depreciation4%

Other Costs9% Materials

64%Depreciation

5%

Other Costs9%

Labor23%

Q2Q12 2Q11

Materials64%

Labor22%


Main effects on EBITDA$in R$ million

79,4 165,8

172,2

FX Impact

32,0

11,3 2,0 260,0

on Revenues

COGS (ex depreciation)

215,6

, 260,0

General and Administrative

ExpensesVolumes, Prices &

depreciation)Selling

Expenses Profit Sharing Program

Prices & Product Mix

Changes


EBITDA Q2 11 EBITDA Q2 12

Sources and Uses of Cash

in R$ million

SourcesDecrease in Cash

Long-term investments2%

New Financing34%

Uses Amortization of Financing46%

Dividends/interest on equity capital

10%

Other / Adjustments4%

Decrease in Cash18%

34%

Increase in Accounts Receivable

10%

46%Profit Sharing Paid

4%

Increase in Accounts Payable9%

R$ 1,694 million

10%

Increase in Inventories6%

R$ 1,694 million

Other accounts payable5%

Capex7%

Pre-tax income23%

Depreciation and amortization6%

Acquisition12%

Income Taxes Paid6%


Capex Program

Outside BrazilBrazil

1 049 963,1

58,7 55,5

25 6 38 8 42,662,1 53,7 51,98,2

2,4 7,31,0 5,0 3,7

33,841,1

49,9

25,6 38,8 ,6

Q1 Q2 Q3 Q4 Q1 Q2

in R$ million

Q Q Q Q Q Q2011 2012


Contacts

Laurence Beltrão GomesFinance and Investor Relations Officer [email protected]

Luís Fernando M. OliveiraLuís Fernando M. OliveiraInvestor Relations Manager +55 (47) 3276-6973 l i f d @ [email protected]/weg_ir

www.weg.net/ri
