weg 2q10 results conference call presentation
TRANSCRIPT
Q2 2010 Conference Call July 29th, 2010
Q2 2010 Results Conference Call
July 29th, 2010
Motors | Automation | Energy | Transmission & Distribution | Paints
Q2 2010 Conference Call July 29th, 2010Page 2
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.
Q2 2010 Conference Call July 29th, 2010
General Comments on Q2 2010
Quarter market by new events on innternationalization strategy:
Aditional stake in Voltran (Mexico)
Acquisition of control of ZEST (South Africa)
Acquisition of Instrutech (Brazil)
Energy efficency and renewable and distributed energy generation continue to be the main growth opportnities
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Q2 2010 Conference Call July 29th, 2010
Quarterly Highlights
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Q2 2010 Q1 2010 Growth % Q2 2009 Growth %Gross Operating Revenue 1.227.421 1.131.546 8,5% 1.250.193 -1,8% Domestic Market 831.200 801.299 3,7% 808.355 2,8% External Markets 396.200 330.247 20,0% 441.838 -10,3%
External Markets in US$ 221.100 181.170 22,0% 213.396 3,6%Net Operating Revenue 1.013.015 931.907 8,7% 1.029.945 -1,6%Gross Operating Profit 309.158 307.454 0,6% 294.175 5,1%Gross Margin 30,5% 33,0% 28,6%Quarterly Net Income 116.138 119.074 -2,5% 129.670 -10,4%Net Margin 11,5% 12,8% 12,6%EBITDA 174.015 181.750 -4,3% 172.925 0,6%EBITDA Margin 17,2% 19,5% 16,8%
Figures in R$ Thousands
Q2 2010 Conference Call July 29th, 2010
Evolution of Gross Revenues –
Domestic Market(in R$ million)
Evolution of Gross Revenues –
External Market (in US$ million)
Gross Operating Revenues
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154,2210,8
245,8 213,4 221,1
37%
17% -13% 4%
2,1902 1,9807 1,6529 2,0705 1,7919
Q2 2006 Q2 2007 Q2 2008 Q2 2009 Q2 2010
External Market in US$Quarterly Average FX
525701
925808 831
34%
32%-13%
3%
Q2 2006 Q2 2007 Q2 2008 Q2 2009 Q2 2010
Q2 2010 Conference Call July 29th, 2010
7%
Global Presence
Gross Revenues Breakdown –
2Q10
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68%
Brazil
13%
North America
6%
South & Central America
8%
Europe
3%
Asia & Oceania
3%
Africa
Q2 2010 Conference Call July 29th, 2010
Business Areas
Gross Revenues Breakdown –
2Q10
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1.119
1.331
62%58%
57%
48%51%
19%
24%26%
35% 25%13%
12%
12% 11% 17%
6%
5%
5%6%
7%
863
1.2501.307
Q2 06 Q2 07 Q2 08 Q2 09 Q2 10
Industrial Equipment GTD Domestic Use Paints & Varnishes
Q2 2010 Conference Call July 29th, 2010
Cost of Goods Sold
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Depreciation6%
Other Costs34%
Steel & Coper43%
Other Materials
17%
Q2 10 Depreciation5%
Other Costs29%
Steel & Coper46%
Other Materials
20%
Q2 09
Q2 2010 Conference Call July 29th, 2010
Main changes on EBITDA
172,9 38,8
- 61,6
5,8 29,9
1,2 -18,2 5,1 174,0
EBITDA 2T09 EBITDA 2T10
Volumes, Prices &
Product Mix changes
COGS (1)
Salling Expoenses
(1) General & Administr.
Expenses (1)
Profit Sharing ProgramFX impact on
Gross Revenues
Deduction on Gross
Revenues
(1) Ex depreciation
Q2 2010 Conference Call July 29th, 2010
Cash Flows
432152
336
- 248
Cash Flow fromOperatingActivities
Cash Flow FromInvestmentActivities
Cash Flow FromFinancingActivities
Change in CashPosition
Accumulated 6 months 2010
Q2 2010 Conference Call July 29th, 2010
Financing Policies
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June 2010 December 2009 June 2009CASH & EQUIVALENT 2.463.531 2.127.117 1.806.997 DEBT 2.187.124 1.872.533 1.811.906 - Current 741.233 895.885 1.044.633 - Long Term 1.445.891 976.648 767.273 NET CASH (DEBT) 276.407 254.584 (4.909)
Q2 2010 Conference Call July 29th, 2010
Capacity Expansion Investments
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71,847,8
19,1 24,3 27,2 30,1
20,1
15,7
13,7 13,834,2
43,7
91,9
63,5
32,7 38,2
61,473,8
Q1 Q2 Q3 Q4 Q1 Q2
Outside BrazilBrazil
2009 2010
Q2 2010 Conference Call July 29th, 2010
Laurence Beltrão [email protected]
Luís Fernando M. OliveiraInvestor Relations Manager+55 (47) [email protected] [email protected]
Daniel SegalinInvestor Relations Analyst+55 (47) 3276-6106 [email protected]
www.weg.net/ir
Contacts
twitter.com/weg_ir
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