WEG (WEGE3) WEG Day 2024 summary

Strategic integration, direction, and business development

• Recent acquisitions, including Marathon, Rotor, and Cemp, have expanded global manufacturing, market share, and product portfolio, especially in industrial motors and alternators, with a focus on energy efficiency and verticalization.

• Integration efforts emphasize retaining talent, leveraging synergies, and aligning commercial strategies, with Marathon integration enhancing operational synergies, competitiveness, and market reach through administrative and IT consolidation.

• Expansion of manufacturing footprint with new and expanded factories in Mexico, Brazil, and India supports growth in gearboxes, wires, and transformers.

• Dual-brand strategies and targeted investments strengthen presence in key markets such as North America, Europe, India, and Asia, leveraging local synergies.

• Continued M&A activity and expansion into BESS, electric mobility, and digitalization position the company as a systems provider and support entry into new business segments.

Financial performance and guidance

• Net operating revenue grew 9.1%, with 54% from external markets, and 59% of 2023 revenue from products launched in the last five years, reflecting strong internationalization and innovation.

• EBITDA and ROIC reached historic highs, with consistent cash generation, a net cash position of R$3.0 billion as of June 2024, and a focus on high-margin, long-cycle products.

• Dividend payout ratio has remained above 50% over the past decade, with a 6% CAGR in dividends per share and stable shareholder returns.

• Investments as a percentage of net revenue have been stable, prioritizing capacity expansion, internationalization, and automation.

• Integration of Marathon is expected to bring its margins closer to group levels over time, with ongoing cost reductions and IT integration initiatives.

Product and technology innovation

• Launch of high-efficiency motors and advanced drives, including W23 Sync+ Ultra and W80 AXgen+ CFW 900, with international releases scheduled for late 2024 and early 2025.

• Investments in new plants, verticalization, and technology (e.g., IE6 motors, Axial Flux technology) are aimed at increasing competitiveness and operational efficiency globally.

• Expansion of BESS and electric mobility portfolios, with new products and partnerships targeting global markets.

• Focus on sustainability, with a carbon neutral program aiming for a 52% reduction in GHG emissions by 2030 and net zero by 2050.

• Recognition for ESG achievements, including a gold Ecovadis rating and low ESG risk score.