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Q1 2014 Investor Presentation

- WEG is one of the highest growth capital goods companies in Latin America and is number one or two in all of its product lines. - It has a unique vertically integrated business model based on production flexibility and technological innovation. - Its diversified product lines allow for strong growth across different market cycles through organic growth and acquisitions.

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Motors | Automation | Transformers | Energy | Paints and Varnishes Investor Relations Presentation
n One of the highest growth capital goods companies; is number one or number two in all product lines in Latin America n Unique business model is based on vertical integration, production flexibility and technological innovation n Diversified product lines allows strong growth across different market cycles n We have a history of achieving CAGR of 18% over past 17 years through organic growth and accretive acquisitions n WEG 2020 Strategic Plan aims for R$ 20 billion / 17% CAGR through international and product line expansion 1 2 3 4 5 1BM&F Bovespa: WEGE3 / OTC: WEGZY Best way to invest in fast growing global energy efficiency and renewable energy generation businesses
WEG business The global solution with electric machines and automation for industry and energy systems 2BM&F Bovespa: WEGE3 / OTC: WEGZY Energy Generation, Transmission and Distribution (GTD) Industrial Electro-Electronic Equipment Paints and Varnishes Paints and Varnishes Motors Motors for domestic use Automation Motors Automation Energy T&D
Typical Applications Ventilation CompressorsPumps Oil & Gas Mining Sugar & Ethanol Ship building Steel Pulp & Paper Cement General Industry Generation plants Substations Segments ValueAdded Generation ConversionComponents and integration 3BM&F Bovespa: WEGE3 / OTC: WEGZY “The final destination” Strategic integration of equipment into complete solutions Generators / alternators Wind Turbines Solar inverter Small Hydro Turbines Automation (low & high voltage switchgear, drives, controls) Critical power Electric motors Transformers Gearboxes
Energy and industrial efficiency Renewable energy Smart grid Electrical mobility Electric motors represent around 25% of world electricity consumption Industrial productivity increases and ISO 50.001 (energy management) drives investments Global need to diversify energy sources and lower GHG emissions Scale and technological development increases viability Increasing urbanization adds to congestions and need of new solutions Electric vehicles, hybrids or alternative fuels will become more common Electricity distribution network has to become ”smarter” More sensors, more automation, more efficient generation and use of electricity 4BM&F Bovespa: WEGE3 / OTC: WEGZY Our industry is undergoing major change Megatrends cause changes in demand and create opportunities
Appliance Industrial High Voltage Generators Biomass Systems Small Hydro Wind Power Dry Distribution Substations Drives Controls Panels Gearboxes Gensets Hydro Turbines Steam Turbines Gas Turbines New BusinessMotorsEnergyT&DAutomation 5BM&F Bovespa: WEGE3 / OTC: WEGZY Strategic Positioning
19,3% 23,1% 9,1% 11,3% 6,3% 5,2% 4,0% 6,6% 4,9% 3,7% 3,0% 1,7% -0,1% -3,0% A WEG B C D E F CAGR 2005-2009 CAGR 2009-2013 6BM&F Bovespa: WEGE3 / OTC: WEGZY Revenues Growth (US$) Profitability (EBITDA Margins) Strategic Positioning WEG’s revenue growth and EBITDA margins are among the highest WEG B F E C A D 8,0% 10,0% 12,0% 14,0% 16,0% 18,0% 20,0% 22,0% 24,0% 2009 2010 2011 2012 2013
Competitive Advantages Large and synergistic portfolio Worldwide presence One-stop shop concept Mass customization Production in low cost emerging markets Low financial leverage Focus on M&A enabling continuous future growth 7BM&F Bovespa: WEGE3 / OTC: WEGZY Clear competitive advantages Unique business model creates important and stable advantages WEG Business Model
30 41 58 98 82 125 176 220 308 403 375 503 575 560 549 519 587 656 84310,9% 12,6% 18,5% 13,1% 15,7% 16,5% 17,2% 18,2% 18,3% 14,9% 16,7% 15,3% 12,4% 13,0% 11,8% 11,3% 10,6% 12,4% 59 67 96 119 133 188 256 293 381 475 462 617 839 1.021 812 789 851 1.017 1.230 18,1% 20,7% 22,5% 21,2% 23,5% 24,1% 22,8% 22,5% 21,5% 18,4% 20,5% 22,4% 22,7% 19,3% 18,0% 16,4% 16,5% 18,0% CAGR 17.9% Revenues (R$ million) 8BM&F Bovespa: WEGE3 / OTC: WEGZY CAGR 18.4% EBITDA and EBITDA Margin (R$ million) CAGR 20.4% Net Income and Net Margin (R$ million) ROIC Solid growth track record Business model allows to find and explore growth opportunities even under unfavorable macroeconomic conditions 353 372 466 527 628 800 1.066 1.282 1.694 2.204 2.515 3.009 3.749 4.502 4.211 4.392 5.189 6.174 6.829 10,4% 13,5% 14,7% 15,9% 12,1% 10,0% 10,3% 11,8% 14,3%
9BM&F Bovespa: WEGE3 / OTC: WEGZY Growth rate 15,0% 3,6% 1,7% 4,1% 7,9% 3,1% 3,4% 3,7% WEG's Revenue GDP Brazil Industrial Production Brazil Capital Goods Industrial Production Brazil CAGR 10 years (2004-2013) CAGR 5 years (2009-2013)
“More and Better” – maintain our competitive position in those markets where we enjoy market leadership and / or strong brand recognition, making sure we are able to keep up with the markets’ organic growth; International Expansion – penetrate new geographic markets and use our strong position / recognized brand in some products to synergistically expand the product line; New Businesses – expand the product line into business / products that complement the offering 10BM&F Bovespa: WEGE3 / OTC: WEGZY 1 2 3 Growth drivers
4.392 5.189 6.174 6.829 20.000 18% 19% 11% 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 11BM&F Bovespa: WEGE3 / OTC: WEGZY 1/3 Non Organic 2/3 Organic WEG Strategic Plan 2020 Corporate aspiration of R$ 20 billion by 2020. Growth comes from diverse base, with a disciplined approach to organic and non-organic expansion
Technology MarketAccess 2010 2010 2010 2010 2011 20112011 2011 2012 2012 2012 12BM&F Bovespa: WEGE3 / OTC: WEGZY Portfolio Strategy Clear vision of attractiveness of opportunities March 2014 February 2014 September 2013
13BM&F Bovespa: WEGE3 / OTC: WEGZY 2008 Revenue profile 2013 61,2% 21,8% 10,6% 6,4% Industrial Equipment GT&D Equipment Domestic Use Paints & Varnishes R$ 6.8 billion 55,3% 27,2% 12,3% 5,2% R$ 4.5 billion
14BM&F Bovespa: WEGE3 / OTC: WEGZY Revenue profile 2013 2008
15BM&F Bovespa: WEGE3 / OTC: WEGZY Produced and sold in Brazil Produced in Brazil and exported Produced and sold abroad CHINA MEXICO PORTUGAL ARGENTINA INDIA AUSTRIA UNITED STATES SOUTH AFRICA BRAZIL Global production platform Production outside Brazil is expanding and will exceed 20% of total over medium term 70% 30% 2000 50% 35% 15% 2013
(% of Net Revenues) 16BM&F Bovespa: WEGE3 / OTC: WEGZY Working capital needs 0,0% 10,0% 20,0% 30,0% 40,0% 50,0% 1Q06 1Q07 1Q08 1Q09 1Q10 1Q11 1Q12 1Q13 1Q14 Working Capital Inventories Clients Suppliers Advances
Capex (R$ million) 17BM&F Bovespa: WEGE3 / OTC: WEGZY Research & Development (R$ million) Net Earnings and Dividends (R$ million) Use of cash 42 38 49 73 83 126 206 146 111 305 457 226 233 188 238 244 8,0% 6,1%6,1% 6,8% 6,5% 7,4% 9,3% 5,8% 3,7% 8,1% 10,2% 5,4% 5,3% 3,6% 3,9% 3,6% % of Net Revenues 16 18 18 21 30 34 63 73 86 89 83 101 131 148 183 2,5% 2,3% 1,7% 1,6% 1,8% 1,5% 2,5% 2,4% 2,3% 2,0% 2,0% 2,3% 2,5% 2,4% 2,7% % of Net Revenues
Issuer Ticker Number of Shares Share price Market value WEG S.A. WEGE3 (BM&Fbovespa) / WEGZY (OTC – ADR Level 1). Listing Segment Novo Mercado (since 2007) Issued: 807,176,538 In treasury: 615,564 Ex-treasury: 806,560,974 On Dec 30, 2013: R$ 23.97 On Apr 23, 2014 : R$ 26.54 On Dec 30, 2013: R$ 19,347 million On Apr 23, 2014 : R$ 21,422 million Liquidity (average daily volume) In 2013: R$ 15,193 thousand / day In 2014: R$ 15,465 thousand / day Composition of Free Float 56% - Foreign institutions 03% - Brazilian institutions 41% - Others (individuals, etc.) 18BM&F Bovespa: WEGE3 / OTC: WEGZY Key information Capital market
35%50%14% WEG S.A.WEG S.A. Voigt 33.3% Voigt 33.3% Silva 33.3% Silva 33.3% Werninghaus 33.3% Werninghaus 33.3% Treasury Shares and Management Treasury Shares and Management WPA Participações e Serviços S/A WPA Participações e Serviços S/A Founders’ Families (directly) Founders’ Families (directly) Free FloatFree Float 1% 19BM&F Bovespa: WEGE3 / OTC: WEGZY Shareholding structure
6,00 8,00 10,00 12,00 14,00 16,00 18,00 20,00 22,00 24,00 26,00 28,00 WEGE3shareprices(R$) 2020BM&F Bovespa: WEGE3 / OTC: WEGZY Inclusion MSCI Brazil Inclusion Ibrx-100 Selected for ISE 2013 Selected for ISE 2014 WEGE3 performance WEG’s shares achieved important indexes
Average Daily Traded Volume (R$ th) Average Daily Trades 2121BM&F Bovespa: WEGE3 / OTC: WEGZY Liquidity – WEGE3 9.833 7.697 6.062 6.750 7.442 10.343 15.193 15.465 373 452 465 599 796 1.076 2.165 2.100
22BM&F Bovespa: WEGE3 / OTC: WEGZY Highlights Yearly Figures 2013 2012 % 2011 % Net Operating Revenue 6.828.896 6.173.878 10,6% 5.189.409 19,0% Domestic Market 3.432.040 3.016.662 13,8% 2.902.958 3,9% External Markets 3.396.856 3.157.216 7,6% 2.286.451 38,1% External Markets in US$ 1.569.891 1.610.330 -2,5% 1.361.689 18,3% Gross Operating Profit 2.236.766 1.880.856 18,9% 1.556.051 20,9% Gross Margin 32,8% 30,5% 30,0% Quarterly Net Income 843.467 655.979 28,6% 586.936 11,8% Net Margin 12,4% 10,6% 11,3% EBITDA 1.230.032 1.016.748 21,0% 851.155 19,5% EBITDA Margin 18,0% 16,5% 16,4% EPS 1,35950 1,05730 28,6% 0,94605 11,8% Figures in R$ Thousands
23BM&F Bovespa: WEGE3 / OTC: WEGZY Highlights Quarterly Figures Q1 2014 Q4 2013 % Q1 2013 % Net Operating Revenue 1.783.543 1.893.299 -5,8% 1.477.577 20,7% Domestic Market 895.446 913.388 -2,0% 772.935 15,9% External Markets 888.097 979.911 -9,4% 704.642 26,0% External Markets in US$ 375.677 428.229 -12,3% 353.077 6,4% Gross Operating Profit 570.421 615.847 -7,4% 463.604 23,0% Gross Margin 32,0% 32,5% 31,4% Net Income 204.887 237.439 -13,7% 172.299 18,9% Net Margin 11,5% 12,5% 11,7% EBITDA 299.643 341.653 -12,3% 248.898 20,4% EBITDA Margin 16,8% 18,0% 16,8% EPS 0,33023 0,38270 -13,7% 0,27772 18,9% Figures in R$ Thousand
24BM&F Bovespa: WEGE3 / OTC: WEGZY Highlights Balance sheet – Assets (R$ thousands) R$ % R$ % R$ % CURRENT ASSETS 6.851.787 68% 5.710.017 64% 5.867.061 64% Cash & cash equivalents 3.373.799 33% 2.563.500 29% 2.931.615 32% Receivables 1.658.806 16% 1.472.839 17% 1.307.692 14% Inventories 1.445.927 14% 1.306.273 15% 1.362.314 15% Other current assets 373.255 4% 367.405 4% 265.440 3% LONG TERM ASSETS 123.866 1% 88.833 1% 432.469 5% Long term securities 2.230 0% 2.032 0% 280.635 3% Deferred taxes 60.376 1% 36.891 0% 111.488 1% Other non-current assets 61.260 1% 49.910 1% 40.346 0% FIXED ASSETS 3.165.640 31% 3.074.700 35% 2.806.331 31% Investment in Subs 7.264 0% 7.622 0% 349 0% Property, Plant & Equipment 2.614.556 26% 2.537.094 29% 2.445.760 27% Intangibles 543.820 5% 529.984 6% 360.222 4% TOTAL ASSETS 10.141.293 100% 8.873.550 100% 9.105.861 100% December 2011 (C) December 2013 (A) December 2012 (B)
25BM&F Bovespa: WEGE3 / OTC: WEGZY Highlights Balance sheet – Liabilities (R$ thousands) R$ % R$ % R$ % CURRENT LIABILITIES 2.578.048 25% 3.012.824 34% 2.752.960 30% Social and Labor Liabilities 216.553 2% 168.831 2% 161.436 2% Suppliers 420.250 4% 331.037 4% 298.195 3% Fiscal and Tax Liabilities 139.570 1% 126.655 1% 88.473 1% Short Term Debt 912.796 9% 1.645.772 19% 1.701.435 19% Dividends Payable 87.723 1% 79.381 1% 2.804 0% Advances from Clients 459.130 5% 358.124 4% 285.843 3% Profit Sharring 34.191 0% 33.559 0% 26.314 0% Other Short Term Liabilities 307.835 3% 269.465 3% 188.459 2% LONG TERM LIABILITIES 2.920.978 29% 1.709.100 19% 2.446.312 27% Long Term Debt 2.296.208 23% 1.044.068 12% 1.756.293 19% Other Long Term Liabilities 95.031 1% 137.916 2% 122.485 1% Deferred Taxes 294.405 3% 320.503 4% 421.918 5% Contingencies Provisions 235.334 2% 206.613 2% 145.616 2% MINORITIES 84.495 1% 91.277 1% 106.477 1% STOCKHOLDERS' EQUITY 4.557.772 45% 4.060.349 46% 3.800.112 42% TOTAL LIABILITIES 10.141.293 100% 8.873.550 100% 9.105.861 100% December 2011 (C) December 2013 (A) December 2012 (B)
26BM&F Bovespa: WEGE3 / OTC: WEGZY Highlights Balance sheet – Cash flow (R$ thousands) 3 Months 3 Months 2014 2013 Operating Activities Net Earnings before Taxes 269.317 221.413 Depreciation and Amortization 58.805 52.136 Provisions: 88.495 67.655 Changes in Assets & Liabilities (12.641) (6.294) (Increase) / Reduction of Accounts Receivable 118.511 91.360 Increase / (Reduction) of Accounts Payable 50.259 46.754 (Increase) / Reduction of Investories (10.915) (10.480) Income Tax and Social Contribution on Net Earnings (81.448) (71.190) Profit Sharing Paid (89.048) (62.738) Cash Flow from Operating Activities 403.976 334.910 Investment Activities Fixed Assets (64.284) (56.759) Intagible Assets (3.208) (811) Results of sales of fixed assets 490 903 Accumulated Conversion Adjustment (53.618) (25.135) Long term securities bought 132 (4.497) Goodwill in Capital Transactions (2.699) (5.169) Acquisition of Stakes of non-controlling shareholders (5.947) (6.268) Aquisition of Subsidiaries (13.229) - Cash Flow From Investment Activities (142.363) (97.736) Financing Activities Working Capital Financing 16.382 827.186 Long Term Financing (112.601) (136.811) Interest paid on loans and financing (43.588) (11.277) Treasury Shares - - Dividends & Intesrest on Stockholders Equity Paid (248.230) (204.724) Cash Flow From Financing Activities (388.037) 474.374 Change in Cash Position (126.424) 711.548 Cash & Cash Equivalents Beginning of Period 3.373.799 2.302.256 End of Period 3.247.375 3.013.804
27BM&F Bovespa: WEGE3 / OTC: WEGZY Highlights Balance sheet – Debt and cash position (R$ thousands) Cash & Financial instruments 3.376.029 2.565.532 3.212.250 - Current 3.373.799 2.563.500 2.931.615 - Long Term 2.230 2.032 280.635 Debt 3.209.004 100% 2.689.840 100% 3.457.728 100% - Current 912.796 28% 1.645.772 61% 1.701.435 49% - In Brazilian Reais 462.336 14% 1.067.683 40% 585.687 17% - In other currencies 450.460 14% 578.089 21% 1.115.748 32% - Long Term 2.296.208 72% 1.044.068 39% 1.756.293 51% - In Brazilian Reais 2.048.766 64% 824.910 31% 1.560.712 45% - In other currencies 247.442 8% 219.158 8% 195.581 6% Net Cash (Debt) 167.025 (124.308) (245.478) December 2013 December 2012 December 2011

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Q1 2014 Investor Presentation

  • 1.
    Motors | Automation| Transformers | Energy | Paints and Varnishes Investor Relations Presentation
  • 2.
    n One ofthe highest growth capital goods companies; is number one or number two in all product lines in Latin America n Unique business model is based on vertical integration, production flexibility and technological innovation n Diversified product lines allows strong growth across different market cycles n We have a history of achieving CAGR of 18% over past 17 years through organic growth and accretive acquisitions n WEG 2020 Strategic Plan aims for R$ 20 billion / 17% CAGR through international and product line expansion 1 2 3 4 5 1BM&F Bovespa: WEGE3 / OTC: WEGZY Best way to invest in fast growing global energy efficiency and renewable energy generation businesses
  • 3.
    WEG business The globalsolution with electric machines and automation for industry and energy systems 2BM&F Bovespa: WEGE3 / OTC: WEGZY Energy Generation, Transmission and Distribution (GTD) Industrial Electro-Electronic Equipment Paints and Varnishes Paints and Varnishes Motors Motors for domestic use Automation Motors Automation Energy T&D
  • 4.
    Typical Applications Ventilation CompressorsPumps Oil& Gas Mining Sugar & Ethanol Ship building Steel Pulp & Paper Cement General Industry Generation plants Substations Segments ValueAdded Generation ConversionComponents and integration 3BM&F Bovespa: WEGE3 / OTC: WEGZY “The final destination” Strategic integration of equipment into complete solutions Generators / alternators Wind Turbines Solar inverter Small Hydro Turbines Automation (low & high voltage switchgear, drives, controls) Critical power Electric motors Transformers Gearboxes
  • 5.
    Energy and industrialefficiency Renewable energy Smart grid Electrical mobility Electric motors represent around 25% of world electricity consumption Industrial productivity increases and ISO 50.001 (energy management) drives investments Global need to diversify energy sources and lower GHG emissions Scale and technological development increases viability Increasing urbanization adds to congestions and need of new solutions Electric vehicles, hybrids or alternative fuels will become more common Electricity distribution network has to become ”smarter” More sensors, more automation, more efficient generation and use of electricity 4BM&F Bovespa: WEGE3 / OTC: WEGZY Our industry is undergoing major change Megatrends cause changes in demand and create opportunities
  • 6.
  • 7.
    19,3% 23,1% 9,1% 11,3% 6,3% 5,2% 4,0% 6,6% 4,9% 3,7% 3,0% 1,7% -0,1% -3,0% A WEGB C D E F CAGR 2005-2009 CAGR 2009-2013 6BM&F Bovespa: WEGE3 / OTC: WEGZY Revenues Growth (US$) Profitability (EBITDA Margins) Strategic Positioning WEG’s revenue growth and EBITDA margins are among the highest WEG B F E C A D 8,0% 10,0% 12,0% 14,0% 16,0% 18,0% 20,0% 22,0% 24,0% 2009 2010 2011 2012 2013
  • 8.
    Competitive Advantages Large andsynergistic portfolio Worldwide presence One-stop shop concept Mass customization Production in low cost emerging markets Low financial leverage Focus on M&A enabling continuous future growth 7BM&F Bovespa: WEGE3 / OTC: WEGZY Clear competitive advantages Unique business model creates important and stable advantages WEG Business Model
  • 9.
    30 41 58 98 82 125 176 220 308 403 375 503 575 560 549 519 587 656 84310,9% 12,6% 18,5% 13,1% 15,7% 16,5% 17,2% 18,2% 18,3% 14,9% 16,7% 15,3% 12,4% 13,0% 11,8%11,3% 10,6% 12,4% 59 67 96 119 133 188 256 293 381 475 462 617 839 1.021 812 789 851 1.017 1.230 18,1% 20,7% 22,5% 21,2% 23,5% 24,1% 22,8% 22,5% 21,5% 18,4% 20,5% 22,4% 22,7% 19,3% 18,0% 16,4% 16,5% 18,0% CAGR 17.9% Revenues (R$ million) 8BM&F Bovespa: WEGE3 / OTC: WEGZY CAGR 18.4% EBITDA and EBITDA Margin (R$ million) CAGR 20.4% Net Income and Net Margin (R$ million) ROIC Solid growth track record Business model allows to find and explore growth opportunities even under unfavorable macroeconomic conditions 353 372 466 527 628 800 1.066 1.282 1.694 2.204 2.515 3.009 3.749 4.502 4.211 4.392 5.189 6.174 6.829 10,4% 13,5% 14,7% 15,9% 12,1% 10,0% 10,3% 11,8% 14,3%
  • 10.
    9BM&F Bovespa: WEGE3/ OTC: WEGZY Growth rate 15,0% 3,6% 1,7% 4,1% 7,9% 3,1% 3,4% 3,7% WEG's Revenue GDP Brazil Industrial Production Brazil Capital Goods Industrial Production Brazil CAGR 10 years (2004-2013) CAGR 5 years (2009-2013)
  • 11.
    “More and Better”– maintain our competitive position in those markets where we enjoy market leadership and / or strong brand recognition, making sure we are able to keep up with the markets’ organic growth; International Expansion – penetrate new geographic markets and use our strong position / recognized brand in some products to synergistically expand the product line; New Businesses – expand the product line into business / products that complement the offering 10BM&F Bovespa: WEGE3 / OTC: WEGZY 1 2 3 Growth drivers
  • 12.
    4.392 5.189 6.174 6.829 20.000 18% 19% 11% 2010 2011 20122013 2014 2015 2016 2017 2018 2019 2020 11BM&F Bovespa: WEGE3 / OTC: WEGZY 1/3 Non Organic 2/3 Organic WEG Strategic Plan 2020 Corporate aspiration of R$ 20 billion by 2020. Growth comes from diverse base, with a disciplined approach to organic and non-organic expansion
  • 13.
    Technology MarketAccess 2010 2010 2010 2010 2011 20112011 2011 2012 2012 2012 12BM&F Bovespa:WEGE3 / OTC: WEGZY Portfolio Strategy Clear vision of attractiveness of opportunities March 2014 February 2014 September 2013
  • 14.
    13BM&F Bovespa: WEGE3/ OTC: WEGZY 2008 Revenue profile 2013 61,2% 21,8% 10,6% 6,4% Industrial Equipment GT&D Equipment Domestic Use Paints & Varnishes R$ 6.8 billion 55,3% 27,2% 12,3% 5,2% R$ 4.5 billion
  • 15.
    14BM&F Bovespa: WEGE3/ OTC: WEGZY Revenue profile 2013 2008
  • 16.
    15BM&F Bovespa: WEGE3/ OTC: WEGZY Produced and sold in Brazil Produced in Brazil and exported Produced and sold abroad CHINA MEXICO PORTUGAL ARGENTINA INDIA AUSTRIA UNITED STATES SOUTH AFRICA BRAZIL Global production platform Production outside Brazil is expanding and will exceed 20% of total over medium term 70% 30% 2000 50% 35% 15% 2013
  • 17.
    (% of NetRevenues) 16BM&F Bovespa: WEGE3 / OTC: WEGZY Working capital needs 0,0% 10,0% 20,0% 30,0% 40,0% 50,0% 1Q06 1Q07 1Q08 1Q09 1Q10 1Q11 1Q12 1Q13 1Q14 Working Capital Inventories Clients Suppliers Advances
  • 18.
    Capex (R$ million) 17BM&FBovespa: WEGE3 / OTC: WEGZY Research & Development (R$ million) Net Earnings and Dividends (R$ million) Use of cash 42 38 49 73 83 126 206 146 111 305 457 226 233 188 238 244 8,0% 6,1%6,1% 6,8% 6,5% 7,4% 9,3% 5,8% 3,7% 8,1% 10,2% 5,4% 5,3% 3,6% 3,9% 3,6% % of Net Revenues 16 18 18 21 30 34 63 73 86 89 83 101 131 148 183 2,5% 2,3% 1,7% 1,6% 1,8% 1,5% 2,5% 2,4% 2,3% 2,0% 2,0% 2,3% 2,5% 2,4% 2,7% % of Net Revenues
  • 19.
    Issuer Ticker Number of Shares Shareprice Market value WEG S.A. WEGE3 (BM&Fbovespa) / WEGZY (OTC – ADR Level 1). Listing Segment Novo Mercado (since 2007) Issued: 807,176,538 In treasury: 615,564 Ex-treasury: 806,560,974 On Dec 30, 2013: R$ 23.97 On Apr 23, 2014 : R$ 26.54 On Dec 30, 2013: R$ 19,347 million On Apr 23, 2014 : R$ 21,422 million Liquidity (average daily volume) In 2013: R$ 15,193 thousand / day In 2014: R$ 15,465 thousand / day Composition of Free Float 56% - Foreign institutions 03% - Brazilian institutions 41% - Others (individuals, etc.) 18BM&F Bovespa: WEGE3 / OTC: WEGZY Key information Capital market
  • 20.
    35%50%14% WEG S.A.WEG S.A. Voigt 33.3% Voigt 33.3% Silva 33.3% Silva 33.3% Werninghaus 33.3% Werninghaus 33.3% TreasuryShares and Management Treasury Shares and Management WPA Participações e Serviços S/A WPA Participações e Serviços S/A Founders’ Families (directly) Founders’ Families (directly) Free FloatFree Float 1% 19BM&F Bovespa: WEGE3 / OTC: WEGZY Shareholding structure
  • 21.
    6,00 8,00 10,00 12,00 14,00 16,00 18,00 20,00 22,00 24,00 26,00 28,00 WEGE3shareprices(R$) 2020BM&F Bovespa: WEGE3/ OTC: WEGZY Inclusion MSCI Brazil Inclusion Ibrx-100 Selected for ISE 2013 Selected for ISE 2014 WEGE3 performance WEG’s shares achieved important indexes
  • 22.
    Average Daily TradedVolume (R$ th) Average Daily Trades 2121BM&F Bovespa: WEGE3 / OTC: WEGZY Liquidity – WEGE3 9.833 7.697 6.062 6.750 7.442 10.343 15.193 15.465 373 452 465 599 796 1.076 2.165 2.100
  • 23.
    22BM&F Bovespa: WEGE3/ OTC: WEGZY Highlights Yearly Figures 2013 2012 % 2011 % Net Operating Revenue 6.828.896 6.173.878 10,6% 5.189.409 19,0% Domestic Market 3.432.040 3.016.662 13,8% 2.902.958 3,9% External Markets 3.396.856 3.157.216 7,6% 2.286.451 38,1% External Markets in US$ 1.569.891 1.610.330 -2,5% 1.361.689 18,3% Gross Operating Profit 2.236.766 1.880.856 18,9% 1.556.051 20,9% Gross Margin 32,8% 30,5% 30,0% Quarterly Net Income 843.467 655.979 28,6% 586.936 11,8% Net Margin 12,4% 10,6% 11,3% EBITDA 1.230.032 1.016.748 21,0% 851.155 19,5% EBITDA Margin 18,0% 16,5% 16,4% EPS 1,35950 1,05730 28,6% 0,94605 11,8% Figures in R$ Thousands
  • 24.
    23BM&F Bovespa: WEGE3/ OTC: WEGZY Highlights Quarterly Figures Q1 2014 Q4 2013 % Q1 2013 % Net Operating Revenue 1.783.543 1.893.299 -5,8% 1.477.577 20,7% Domestic Market 895.446 913.388 -2,0% 772.935 15,9% External Markets 888.097 979.911 -9,4% 704.642 26,0% External Markets in US$ 375.677 428.229 -12,3% 353.077 6,4% Gross Operating Profit 570.421 615.847 -7,4% 463.604 23,0% Gross Margin 32,0% 32,5% 31,4% Net Income 204.887 237.439 -13,7% 172.299 18,9% Net Margin 11,5% 12,5% 11,7% EBITDA 299.643 341.653 -12,3% 248.898 20,4% EBITDA Margin 16,8% 18,0% 16,8% EPS 0,33023 0,38270 -13,7% 0,27772 18,9% Figures in R$ Thousand
  • 25.
    24BM&F Bovespa: WEGE3/ OTC: WEGZY Highlights Balance sheet – Assets (R$ thousands) R$ % R$ % R$ % CURRENT ASSETS 6.851.787 68% 5.710.017 64% 5.867.061 64% Cash & cash equivalents 3.373.799 33% 2.563.500 29% 2.931.615 32% Receivables 1.658.806 16% 1.472.839 17% 1.307.692 14% Inventories 1.445.927 14% 1.306.273 15% 1.362.314 15% Other current assets 373.255 4% 367.405 4% 265.440 3% LONG TERM ASSETS 123.866 1% 88.833 1% 432.469 5% Long term securities 2.230 0% 2.032 0% 280.635 3% Deferred taxes 60.376 1% 36.891 0% 111.488 1% Other non-current assets 61.260 1% 49.910 1% 40.346 0% FIXED ASSETS 3.165.640 31% 3.074.700 35% 2.806.331 31% Investment in Subs 7.264 0% 7.622 0% 349 0% Property, Plant & Equipment 2.614.556 26% 2.537.094 29% 2.445.760 27% Intangibles 543.820 5% 529.984 6% 360.222 4% TOTAL ASSETS 10.141.293 100% 8.873.550 100% 9.105.861 100% December 2011 (C) December 2013 (A) December 2012 (B)
  • 26.
    25BM&F Bovespa: WEGE3/ OTC: WEGZY Highlights Balance sheet – Liabilities (R$ thousands) R$ % R$ % R$ % CURRENT LIABILITIES 2.578.048 25% 3.012.824 34% 2.752.960 30% Social and Labor Liabilities 216.553 2% 168.831 2% 161.436 2% Suppliers 420.250 4% 331.037 4% 298.195 3% Fiscal and Tax Liabilities 139.570 1% 126.655 1% 88.473 1% Short Term Debt 912.796 9% 1.645.772 19% 1.701.435 19% Dividends Payable 87.723 1% 79.381 1% 2.804 0% Advances from Clients 459.130 5% 358.124 4% 285.843 3% Profit Sharring 34.191 0% 33.559 0% 26.314 0% Other Short Term Liabilities 307.835 3% 269.465 3% 188.459 2% LONG TERM LIABILITIES 2.920.978 29% 1.709.100 19% 2.446.312 27% Long Term Debt 2.296.208 23% 1.044.068 12% 1.756.293 19% Other Long Term Liabilities 95.031 1% 137.916 2% 122.485 1% Deferred Taxes 294.405 3% 320.503 4% 421.918 5% Contingencies Provisions 235.334 2% 206.613 2% 145.616 2% MINORITIES 84.495 1% 91.277 1% 106.477 1% STOCKHOLDERS' EQUITY 4.557.772 45% 4.060.349 46% 3.800.112 42% TOTAL LIABILITIES 10.141.293 100% 8.873.550 100% 9.105.861 100% December 2011 (C) December 2013 (A) December 2012 (B)
  • 27.
    26BM&F Bovespa: WEGE3/ OTC: WEGZY Highlights Balance sheet – Cash flow (R$ thousands) 3 Months 3 Months 2014 2013 Operating Activities Net Earnings before Taxes 269.317 221.413 Depreciation and Amortization 58.805 52.136 Provisions: 88.495 67.655 Changes in Assets & Liabilities (12.641) (6.294) (Increase) / Reduction of Accounts Receivable 118.511 91.360 Increase / (Reduction) of Accounts Payable 50.259 46.754 (Increase) / Reduction of Investories (10.915) (10.480) Income Tax and Social Contribution on Net Earnings (81.448) (71.190) Profit Sharing Paid (89.048) (62.738) Cash Flow from Operating Activities 403.976 334.910 Investment Activities Fixed Assets (64.284) (56.759) Intagible Assets (3.208) (811) Results of sales of fixed assets 490 903 Accumulated Conversion Adjustment (53.618) (25.135) Long term securities bought 132 (4.497) Goodwill in Capital Transactions (2.699) (5.169) Acquisition of Stakes of non-controlling shareholders (5.947) (6.268) Aquisition of Subsidiaries (13.229) - Cash Flow From Investment Activities (142.363) (97.736) Financing Activities Working Capital Financing 16.382 827.186 Long Term Financing (112.601) (136.811) Interest paid on loans and financing (43.588) (11.277) Treasury Shares - - Dividends & Intesrest on Stockholders Equity Paid (248.230) (204.724) Cash Flow From Financing Activities (388.037) 474.374 Change in Cash Position (126.424) 711.548 Cash & Cash Equivalents Beginning of Period 3.373.799 2.302.256 End of Period 3.247.375 3.013.804
  • 28.
    27BM&F Bovespa: WEGE3/ OTC: WEGZY Highlights Balance sheet – Debt and cash position (R$ thousands) Cash & Financial instruments 3.376.029 2.565.532 3.212.250 - Current 3.373.799 2.563.500 2.931.615 - Long Term 2.230 2.032 280.635 Debt 3.209.004 100% 2.689.840 100% 3.457.728 100% - Current 912.796 28% 1.645.772 61% 1.701.435 49% - In Brazilian Reais 462.336 14% 1.067.683 40% 585.687 17% - In other currencies 450.460 14% 578.089 21% 1.115.748 32% - Long Term 2.296.208 72% 1.044.068 39% 1.756.293 51% - In Brazilian Reais 2.048.766 64% 824.910 31% 1.560.712 45% - In other currencies 247.442 8% 219.158 8% 195.581 6% Net Cash (Debt) 167.025 (124.308) (245.478) December 2013 December 2012 December 2011