weg 3q10 results conference call presentation
TRANSCRIPT
Q3 2010 Conference Call October 28th, 2010
Q3 2010 Results Conference Call
October 28th, 2010
Motors | Automation | Energy | Transmission & Distribution | Paints
Q3 2010 Conference Call October 28th, 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.
Q3 2010 Conference Call October 28th, 2010
General Comments on Q3 2010
Page 3
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 October 28th, 2010
Quarterly Highlights
Page 4
Q3 2010 Q2 2010 Growth % Q3 2009 Growth %Gross Operating Revenue 1.419.161 1.227.421 15,6% 1.282.506 10,7% Domestic Market 906.954 831.210 9,1% 889.302 2,0% External Markets 512.207 396.211 29,3% 393.200 30,3%
External Markets in US$ 298.020 221.100 34,8% 210.840 41,3%Net Operating Revenue 1.188.622 1.013.015 17,3% 1.055.465 12,6%Gross Operating Profit 373.497 309.158 20,8% 402.210 -7,1%Gross Margin 31,4% 30,5% 38,1%Quarterly Net Income 141.952 116.138 22,2% 160.103 -11,3%Net Margin 11,9% 11,5% 15,2%EBITDA 209.196 174.015 20,2% 254.840 -17,9%EBITDA Margin 17,6% 17,2% 24,1%
Figures in R$ Thousands
Q3 2010 Conference Call October 28th, 2010
Evolution of Gross Revenues –
Domestic Market(in R$ million)
Evolution of Gross Revenues –
External Market (in US$ million)
Gross Operating Revenues
Page 5
553
785968 889 907
42%
23%
-8%2%
Q3 2006 Q3 2007 Q3 2008 Q3 2009 Q3 2010
168,6226,4
309,9
210,8
298,0
34%
37% -32% 41%
2,1702 1,9142 1,6819 1,8649 1,7187
Q3 2006 Q3 2007 Q3 2008 Q3 2009 Q3 2010
External Market in US$
Quarterly Average FX
Q3 2010 Conference Call October 28th, 2010
7%
Global Presence
Gross Revenues Breakdown –
Q3 2010
Page 6
64%
Brazil
13%
North America
5%
South & Central America
8%
Europe
4%
Asia & Oceania
6%
Africa
Q3 2010 Conference Call October 28th, 2010
Business Areas
Gross Revenues Breakdown –
Q3 2010
Page 7
1.219
1.489
61%56%
58%
46%
60%
19%
25%
25%
35%
22%
15%
13%
13%
14%
12%
5%
6%
5%
6%7%
918
1.283
1.419
3T06 3T07 3T08 3T09 3T10Industrial Equipment GTD Domestic Use Paints & Varnishes
Q3 2010 Conference Call October 28th, 2010
Cost of Goods Sold
Page 8
Depreciation5%
Other Costs29%
Steel & Coper42%
Other Materials
24%
Q3 09Depreciation5%
Other Costs33%
Steel & Coper44%
Other Materials
18%
Q3 10
Q3 2010 Conference Call October 28th, 2010
Main
changes
on
EBITDA
254,8
180,2 (43,6)
(3,5) (161,4)
(20,6)3,4 (0,1)
209,2
Deduction on Gross
Revenues
Aumento de volumes & preços e mix de produtos
Impacto Cambial sobre receita bruta
CPV (ex
depreciação)General and
Administrative Expenses
EBITDA Q3 09 EBITDA Q3 10
Volumes, Prices &
Product Mix Changes
FX Impact on Gross
Revenues
COGS
Selling Expenses
Deduction on Gross Revenues
Deduction on Gross
Revenues
Profit Sharing Program
Q3 2010 Conference Call October 28th, 2010
Cash
Flows
Accumulated 9 months 2010
420189
273
(336 )
Fluxo Operacional Fluxo deInvestimentos
Fluxo deFinanciamento
Variação do Caixano Período
Q3 2010 Conference Call October 28th, 2010
Financing Policies
Page 12
September 2010 December 2009 September 2009CASH & EQUIVALENT 2.399.773 2.127.117 2.003.241 - Current 2.399.773 2.127.117 2.003.241 - Long Term - - - DEBT 2.345.147 1.872.533 1.932.624 - Current 841.311 895.885 943.532 - Long Term 1.503.836 976.648 989.092 NET CASH (DEBT) 54.626 254.584 70.617
Q3 2010 Conference Call October 28th, 2010
Capacity Expansion Investments
Page 13
71,847,8
19,1 24,3 27,2 30,1 40,7
20,1
15,7
13,7 13,834,2
43,7
91,9
63,5
32,7 38,2
61,473,8
53,7
13,0
Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10
Outside Brazil
Brazil
2009 2010
Q3 2010 Conference Call October 28th, 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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