Q2 2024 WEG SA Earnings Call Transcript
Key Points
- Net operating revenue grew by 13.5% compared to Q2 2023, driven by strong performance in power generation, transmission, and distribution.
- EBITDA reached BRL 2.1 billion, up 15.7% from Q2 2023, with an EBITDA margin of 22.9%, reflecting improved operating margins.
- ROIC increased to 37.4%, up 3 percentage points from Q2 2023, indicating efficient capital utilization.
- Positive demand for long-cycle equipment, especially in electrification and electrical infrastructure projects, is expected to support future growth.
- Successful integration of acquired businesses (Marathon, ROTOR, and Cemp) is contributing positively to revenue and operational efficiency.
- Revenue from distributed solar generation was below the same period last year due to lower prices of solar panels.
- Flat sales volume in commercial motors and appliances in the foreign market, particularly in South America.
- Challenges in maintaining margins due to fluctuations in FX rates, commodity costs, and macroeconomic conditions.
- The wind power segment in Brazil is expected to see a decline in revenue in the second half of 2024 as current projects are completed.
- Integration of Regal Rexnord's businesses may bring short-term margin fluctuations and requires significant time and investment to fully realize synergies.
(interpreted) Good morning. Welcome to WEG's conference call to announce the results of the second quarter of 2024. (Operator Instructions)
Any forecasts herein or any statements made during the conference call about future events, business prospects, operational and financial projections and goals and WEG's future growth potential are mere beliefs and assumptions of WEG's management because they are based on information currently available.
Forward-looking statements involve risks and uncertainties and therefore depend on circumstances that may or may not occur. Investors should understand that general economic conditions, industry-specific conditions and other operational factors may affect the future performance of WEG and may lead to results that will be materially different from those expressed in forward-looking statements.
Today with us in Jaragua do Sul we have Andre Luis Rodrigues, Financial Administrative Superintendent, Director; and then Menegueti Salgueiro, CFO and IRO; Wilson Watzko, Controller; Felipe Scopel Hoffmann, Investor Relations Manager. Mr. Rodrigues,
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