WEG (WEGE3) Q4 2024 earnings summary

Executive summary

• Net operating revenue reached R$10,822.3 million in 4Q24, up 26.4% year-over-year and 9.8% sequentially, driven by strong performance in Brazil, international markets, and recent acquisitions such as Marathon, Cemp, Rotor, and Volt Electric Motors.

• EBITDA rose 30.5% year-over-year to R$2,387.7 million, with a margin of 22.1%, a 0.7 percentage point increase.

• Return on invested capital was 34.2%, down 500 bps year-over-year due to non-recurring effects and increased invested capital.

• Net income was R$1,694.3 million, down 2.9% year-over-year due to a non-recurring tax credit in 4Q23, but up 7.3% sequentially.

• Net operating profit after taxes increased 6.4% over the last 12 months.

Financial highlights

• Strong demand in Brazil for both short-cycle (low-voltage motors, automation) and long-cycle equipment (high-voltage motors, T&D projects), with international markets, especially North America and Europe, showing positive demand.

• Solar generation saw a significant rebound, with centralized projects contributing to growth.

• Commercial motors and appliances performed well in China and Mexico, offsetting slowdowns in North America and Argentina.

• Paints and varnishes segment showed strong sales, particularly in Mexico, with overall segment growth of 65.7% year-over-year.

• Invested capital grew 22.1% year-over-year.

Outlook and guidance

• Healthy operational dynamics and strong margins expected to continue, with a solid order book for long-cycle projects, especially in T&D and centralized solar generation.

• Growth expectations remain positive, supported by ongoing international diversification and new business opportunities.

• Vigilance maintained regarding global macroeconomic risks and volatility.

• Management emphasizes operational efficiency and portfolio diversification.