2Q 2011 Results Conference Call

2Q11 Results Conference Call July 22, 2011

2Q11 Results Conference Call

July 22, 2011

Motors | Energy | Transmission & Distribution | Automation | Caotings


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.

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Highlights Second Quarter, 2011

Q2 2011 Q1 2010 Growth % Q2 2010 Growth %

Gross Operating Revenue 1,510,276 1,343,137 12.4% 1,227,421 23.0%

Domestic Market 936,061 862,863 8.5% 831,210 12.6%

External Markets 574,215 480,274 19.6% 396,211 44.9%

External Markets in US$ 360,639 288,211 25.1% 221,100 63.1%

Net Operating Revenue 1,277,258 1,126,117 13.4% 1,013,015 26.1%

Gross Operating Profit 381,437 310,662 22.8% 309,812 23.1%

Gross Margin 29.9% 27.6% 30.6%Quarterly Net Income 154,557 121,564 27.1% 116,522 32.6%

Net Margin 12.1% 10.8% 11.5%EBITDA 215,579 164,808 30.8% 174,015 23.9%

EBITDA Margin 16.9% 14.6% 17.2%

Figures in R$ Thousands

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Highlights First semester of 2011

06M11 06M10 Growth %

Gross Operating Revenue 2,853,413 2,358,967 21.0%

Domestic Market 1,798,924 1,632,509 10.2%

External Markets 1,054,489 726,458 45.2%

External Markets in US$ 648,850 402,270 61.3%

Net Operating Revenue 2,403,375 1,944,922 23.6%

Gross Operating Profit 692,099 618,425 11.9%

Gross Margin 28.8% 31.8%Quarterly Net Income 276,121 236,167 16.9%

Net Margin 11.5% 12.1%EBITDA 380,387 355,765 6.9%

EBITDA Margin 15.8% 18.3%

Figures in R$ Thousands

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Gross Operating Revenues Domestic Market

in R$million

701

925808 831

936

32%-13% 3%

13%

2T07 2T08 2T09 2T10 2T11

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Gross Operating Revenues External Market

In US$ million

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211246 213 221

361

17% -13% 4%

63%

1,9807 1,65292,0705 1,7920 1,5922

Q2 2007 Q2 2008 Q2 2009 Q2 2010 Q2 2011

External Market in US$ Quarterly Average FX


Business Areas Gross Revenues Breakdown

7%

in R$ million

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58%57%

48% 51%

60%

24%

26%

35% 25%

23%12%

12%11%

17%

11%

5%

5%6% 7%

6%

1.119

1.331 1.250 1.227

1.510

2Q 2007 2Q 2008 2Q 2009 2Q 2010 2Q 2011

Industrial Equipment GTD Domestic Use Paints & Varnishes


Cost of Goods Sold 2nd

quarter of 2011

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Depreciation5%

Other Costs31%

Steel & Coper43%

Other Materials

21%

2Q11Depreciation

6%

Other Costs34%

Steel & Coper43%

Other Materials

17%

2Q10


Main impacts on EBITDA

in R$ million

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174,0

326,1 43,3

18,6190,3

21,7

1,49,3 215,6

Deduction on Gross Revenues

General and Administrative

Expenses

EBITDA Q2 10 EBITDA Q2 11

Volumes, Prices &

Product Mix Changes

FX Impact on Gross Revenues

COGS

Selling Expenses

Profit Sharing Program


Cash Flows

In R$ million

(*) R$ 226,1 million in long term securities that are considered at the cash flow from investing activities

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2.553,0356,6

325,3 90,3 2.674,6

Investing

Cash 4Q10 Cash 2Q11

Operating Financing


Capacity Expansion Program

in R$ million

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27,2 30,1 40,7 42,125,6

38,8

34,2 43,7 13,0 2,0

8,2 2,4

61,4 73,8

53,7 44,1 33,8

41,1

Q1 Q2 Q3 Q4 Q1 Q2

Outside Brazil

Brazil

2010 2011


Contacts

Laurence Beltrão Gomes

Investor Relations Officer

[email protected]

Luís Fernando M. Oliveira

Investor Relations Manager

+55 (47) 3276-6973

[email protected]

twitter.com/weg_ir

www.weg.net/ri

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