WEG 1Q09 Earnings Conference Call

Conference Call Results 1Q09April 28th, 2009

2 April 28th, 20091Q09 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 1Q09

1T09 was one of the toughest quarters in many yearsGrowth was possible because:

Favorable average exchange rate;

Diversification of clients, products and market segments;

Gross margin impacted by:Cost increases from 2S08 not passed-through into prices;

Lower demand increasing manufacturing costs

Economic conditions at the beginning of 2009 are different from what we considered for the budget

We continue to believe in top line growth but we may not reach our targets

Competitive position remains strong, establishing the basis for future performance recovery


Quarterly Highlights

1Q09 4Q08 Growth % 1Q08 Growth %Gross Operating Revenue 1.270.984 1.551.639 -18,1% 1.099.871 15,6% Domestic Market 802.351 917.041 -12,5% 760.882 5,5% External Markets 468.632 634.598 -26,2% 338.989 38,2%

External Markets in US$ 202.726 277.605 -27,0% 195.337 3,8%

Net Operating Revenue 1.048.241 1.295.630 -19,1% 887.324 18,1%Gross Operating Profit 311.954 420.669 -25,8% 319.747 -2,4%Gross Margin 29,8% 32,5% 36,0%Quarterly Net Income 122.193 97.658 25,1% 125.758 -2,8%Net Margin 11,7% 7,5% 14,2%EBITDA 181.112 268.974 -32,7% 203.241 -10,9%EBITDA Margin 17,3% 20,8% 22,9%

Figures in R$ Thousands


430 507623

761 802

261277

348

339

469

691784

971

1.100

1.271

1Q05 1Q06 1Q07 1Q08 1Q09

External Market Domestic Market

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

17,9%

Gross Revenues growth of 16% and Net Revenues growth of 18%;

FX and 1T08 comparison basis are favorable;

Competitive position continues strong, but…

… Markets are the toughest in several years;

Good comparative conditions to withstand global financial crises

Consolidated Gross Revenues Growth


Evolution of Gross Revenues –

Domestic Market(in R$ million)

Domestic Market maintained growth with order backlog

Industrial Production continues weak (Capital Goods slows down faster)

GTD, a long term business, continues to grow

Evolution of Gross Revenues –

External Market (in US$ million)

Diversification across markets / segments / clients protects but does not completely shields from slow down

Global crises impacts across all markets

FX favors R$ denominated growth comparisons

Gross Revenues Growth

429,7623,1

760,9 802,4

506,9

23%

22%

18%

5%

1Q05 1Q06 1Q07 1Q08 1Q09

97,9 126,6165,2 195,3 202,7

4%18%30%

29%

2,6674 2,1875 2,1066 1,73542,3117

1Q05 1Q06 1Q07 1Q08 1Q09

External Market in US$

Quarterly Average FX


7%

WEG’s Global Presence

Gross Revenues Breakdown –

1Q09

Domestic / External markets breakdown near standard (strong R$ distorted ratio)

Rest of the World grows faster than North America and Europe

GTD continues strong with order backlog. Industrial equipment already impacted

Domestic use to benefit from IPI tax rebates

63%

Brazil

10%

North America

6%

South & Central America

11%

Europe

5%

Asia & Oceania

5%

Africa

553691

784

1.100

52%54%59%65%

59%

33%

25%21%

18%12%

9%

14%17%

17%21%

6%

6%7%

6%7%

971

1Q05 1Q06 1Q07 1Q08 1Q09Industrial Equipment GTD Domestic Use Paints & Varnishes


Cost of Goods Sold

Steel, copper and Other Materials have US$ denominated prices

Cost increases not passed-through into domestic market prices

Lower capacity occupancy at some lines decreases productivity

Depreciation5%

Other Costs29%

Steel & Coper46%

Other Materials

20%

1Q09

Other Materials

17%

Steel & Coper44%

Other Costs32%

Depreciation7%

1Q08


Gross Margin suffers with impacts from exchange rate and low occupancy

Same impacts are reflected into EBITDA margin

Net income benefits from net financial result (lower FX changes during the quarter)

Profitability

214 238293 320 312

37% 36% 37% 36%30%

1Q05 1Q06 1Q07 1Q08 1Q09

Gross Profit Gross Margin

132149

193 203181

23% 22% 24% 23%17%

1Q05 1Q06 1Q07 1Q08 1Q09EBITDA EBITDA Margin

99118

129 126 122

17% 18% 16% 14% 12%

1Q05 1Q06 1Q07 1Q08 1Q09

Net Income Net Margin


Working capital shows improving trend and operating cash flows used to:

Capacity expansion program

Pay down short term debt

FX Exposure continues below maximum limits of 3 months of exports equivalent

Financing Policies

March 2009 December 2008CASH & EQUIVALENT 1.815.164 1.849.477 DEBT 2.099.941 2.161.216 - Current 1.171.587 1.314.098 - Long Term 928.354 847.118 NET CASH (DEBT) (284.777) (311.739)


78,066,0

96,8109,9 103,4

71,8

11,8

24,0

20,5

87,677,8

120,8130,4 128,2

91,9

20,1

24,8

9,6

4Q07 1Q08 2Q08 3Q08 4Q08 1Q09

Outside Brazil

Brazil

Total of R$ 92M during the quarter

Flexibility is the key word

Capacity increases is a reflection of observed 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