WEG Q3 2012 Conference Call

3Q12 C f C ll3Q12 Conference CallOctober 25th, 2012

Disclaimer

The statements that may eventually 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 conditionsInvestors 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

d i h f t id tiexpressed in such future considerations.

3Q12 Conference Call October 25, 2012Page 2

HighlightsQuarterly FiguresQuarterly Figures

Q3 2012 Q2 2012 % Q3 2011 %Net Operating Revenue 1 613 067 1 528 791 5 5% 1 317 483 22 4%Net Operating Revenue 1,613,067 1,528,791 5.5% 1,317,483 22.4% Domestic Market 798,626 729,235 9.5% 737,350 8.3% External Markets 814,441 799,556 1.9% 580,133 40.4%

$ 401 460 406 915 353 520 External Markets in US$ 401,460 406,915 -1.3% 353,520 13.6%Gross Operating Profit 498,587 461,661 8.0% 418,266 19.2%Gross Margin 30.9% 30.2% 31.7%Net Income 184,756 139,819 32.1% 154,567 19.5%Net Margin 11.5% 9.1% 11.7%EBITDA 284,276 260,028 9.3% 243,743 16.6%, , ,EBITDA Margin 17.6% 17.0% 18.5%EPS 0.2978 0.2254 32.1% 0.2491 19.5%

Figures in R$ ThousandFigures in R$ Thousand


Net Operating RevenueDomestic MarketDomestic Marketin R$ million

-6% 2% 7%8%

6% 2%

717 676 690 737 799717 676 690

3Q12 Conference Call October 25, 2012

Q3 2008 Q3 2009 Q3 2010 Q3 2011 Q3 2012Page 4

Net Operating RevenueExternal Market

2 0287 External Market in US$ Quarterly Average FX

External Marketin US$ million

14%

2.02871.64101.71871.86491.6819

14%

22%

42%32%

354401

42%-32%

301204

290354


Q3 2008 Q3 2009 Q3 2010 Q3 2011 Q3 2012

Page 5

Business AreasNet Revenue breakdown

1 317

1,613

2%6%

0.8%

Net Revenue breakdownin R$ million

1,189 1,317

14%7%

10%7%

6%

3%

2%

2%

5%

5%0.1%

0.3%

17%16%

14%4%

7%8%

37%

34%34%

23%28% 27%

3Q 2010 3Q 2011 3Q 2012Industrial Equipment DM Industrial Equipment EMGTD DM GTD EM


Domestic Use DM Domestic Use EMPaints & Varnishes DM Paints & Varnishes EM

Page 6

Cost of Goods Sold

Other CostsOther Costs

Depreciation4%

Other Costs9%

Depreciation4%

O e Cos s9%

Labor23%

3Q12 3Q113Q12

Materials

Labor22%

Materials Materials65%

Materials64%


Main impacts on EBITDA

in R$ million

155.6 208.5

139.9

26.316 1

FX Impact on

Revenues

243.7

16.14.1 284.3

General and Administrative

ExpensesVolumes,

Revenues COGS (ex depreciation) Selling

Expenses Profit Sharing Program

pPrices &

Product Mix Changes


EBITDA Q3 11 EBITDA Q3 12

Sources and Uses of Cash

in R$ million

SourcesDecrease in Cash

Long-term investments1%

New Financing32%

Uses Amortization of Financing54%

Dividends/interest on equity capital

12%

Other / Adjustments

Decrease in Cash25%

32%

Increase in Accounts Receivable

10%

Profit Sharing Paid4%

Increase in Accounts Payable

Other / Adjustments3%

R$ 2,646 million

10%

Increase in Inventories1%

C

R$ 2,646 million

Other accounts payable5%

5% Capex6%

Acquisition8%

Pre-tax income24%

Depreciation and amortization6%

8%

Income Taxes Paid6%


Capex Program

in R$ million

Outside Brazil

Brazil

5 01.041.149.9

63.158.7 55.5 50.4

45.451.953.762.142.638.825 6

5.1 3.7 5.0 1.0 7.3 2.4

8.2

33.841.1

25.6

Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12

2011 2012


Contacts

Laurence Beltrão GomesFinance and Investor Relations Officer [email protected]

Luís Fernando M. OliveiraLuís Fernando M. OliveiraInvestor Relations Manager +55 (47) 3276-6973 l i f d @ [email protected]/weg_ir

www.weg.net/ri
