WEG 4Q08 Earnings Conference Call

Conference Call Results 4Q08February 18th, 2009

2 October 28th, 20083Q08 Conference Call

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.


General Comments on 4Q08

2008 was a challenging year but with good resultsExpectations for the year were met:

Gross Revenues growth of 20% over 2007;

Both on the domestic and external markets;

Margins suffering from specific factors:Cost increases (steel) and devaluation not passed-through;

Lower copper prices still not reflected into costs

Logistic problems with November strong rains

Financial expenses with additional FX depreciation impact

Change of accounting procedures makes net income comparisons difficult

Fundamentals continue strong, but in 2009 we must go after: New markets

New clients

New products


Quarterly Highlights

4Q08 4Q07 Growth %Gross Operating Revenue 1.551.639 1.242.204 24,9% Domestic Market 917.041 831.899 10,2% External Markets 634.598 410.305 54,7%

External Markets in US$ 277.605 229.760 20,8%

Net Operating Revenue 1.295.630 1.021.831 26,8%Gross Operating Profit 420.669 359.357 17,1%Gross Margin 32,5% 35,2%Quarterly Net Income 97.658 138.105 -29,3%Net Margin 7,5% 13,5%EBITDA 268.974 231.879 16,0%EBITDA Margin 20,8% 22,7%

Figures in R$ Thousands


429 460558

832 917

292 299

404

410

635

721 759

962

1.242

1.552

4Q04 4Q05 4Q06 4Q07 4Q08

External Market Domestic Market

Evolution of Gross Revenues per Market (in R$ million)

17,9%

Growth rate accelerating to 25% over 4Q07

Reached 20% growth rate in 2008, as expected

Strong competitive position in terms of:

Operational Flexibility

Revenues diversification

Costs advantage

Capital Structure

Good comparative conditions to withstand lower growth environment

Consolidated Gross Revenues Growth


Evolution of Gross Revenues –

Domestic Market(in R$ million)

Domestic Market continued growing, but a slower pace

Strong slowdown in Industrial Production (Capital Goods +3% during 4Q08 - IBGE)

Growth in all business areas but motors for domestic use

Evolution of Gross Revenues –

External Market (in US$ million)

Diversification across markets / segments / clients is beneficial

FX starts to help growth rate measured in $

Infrastructure maintains good perspectives

Gross Revenues Growth

429,1557,6

831,9917,0

459,8

7% 21%

10%

49%

4Q04 4Q05 4Q06 4Q07 4Q08

104,9 133,0187,9

229,8277,6

21%22%

41%27%

2,78422,2518 2,1524 1,7858 2,2860

4Q04 4Q05 4Q06 4Q07 4Q08

External Market in US$Quarterly Average FX


7%

WEG’s Global Presence

Gross Revenues Breakdown –

3Q08

FX increases importance of external market to 41%

Revenues spread across markets, with no particular exposures

GTD continues strong and QoQchanges are characteristics

59%

Brazil

12%

North America

7%

South & Central America

12%

Europe

6%

Asia & Oceania

4%

Africa

721 759

962

1.552

60%63%62% 56%

52%11% 15%

16%21%

32%

20% 18%

16%

16%

11%

6% 7%

6%

6%

5%

1.242

4Q04 4Q05 4Q06 4Q07 4Q08Industrial Equipment GTD Domestic Use Paints & Varnishes


Other Materials

24%

Steel & Coper43%

Other Costs28%

Depreciation5%

Cost of Goods Sold

Steel prices increased towards year-end and lower cooper prices still not reflected into lower costs

No pass-through of FX devaluation into domestic market prices

These effects are expected to be temporary

4Q08 4Q07Depreciation

4%

Other Costs27%

Steel & Coper43%

Other Materials26%


Gross Margin shows impacts from exchange rate and commodities

Same impacts affecting EBITDA margin

Net income impacted by FX variations (financial expenditures) and new accounting of foreign subs.

Profitability

182 199 210

298

421359

39%32% 33%

36% 35% 32%

4Q03 4Q04 4Q05 4Q06 4Q07 4Q08

Gross Profit Gross Margin

99 104122

191

269

232

21%17% 19%

23% 23% 21%

4Q03 4Q04 4Q05 4Q06 4Q07 4Q08EBITDA EBITDA Margin

86 96 97

133

98

138

18% 16% 15% 16% 14%8%

4Q03 4Q04 4Q05 4Q06 4Q07 4Q08

Net Income Net Margin


Changes on net cash position explained by

Capacity expansion program

Increases of working capital

Impact of devaluation over FX denominated debt

Maximum FX Exposure continues in place: equivalent to 3 months of exports

Financing Policies

December 2008 December 2007CASH & EQUIVALENT 1,849,477 2,174,972 DEBT 2,161,216 1,731,740 - Current 1,314,098 1,077,487 - Long Term 847,118 654,253 NET CASH (DEBT) (311,739) 443,232


61,178,0

66,0

96,8109,9 103,4

9,6

11,8

24,0

70,3

87,677,8

120,8130,4 128,2

24,820,5

9,2

3Q07 4Q07 1Q08 2Q08 3Q08 4Q08

Outside Brazil

Brazil

R$ 457,2M capex for the year

Capex program was practically accomplished at lower than expected costs (FX outlays)

Expectation for 2009: R$ 375 M

Flexibility to adjust capacity increases to demand

Capacity Expansion Program


www.weg.net/riAlidor Lueders

CFO and Investor

Relations

Officer

[email protected]

Luís Fernando M. Oliveira

Investor

Relations

Manager

+55 (47) 3276-6973

[email protected]

Investor Relations

Business

WEG 4Q08 Earnings Conference Call