This article first appeared on GuruFocus .
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EBITDA Margin:21.8%, slight adjustment compared to the same period last year.
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EBITDA:BRL2.2 billion, a decrease of 2.1% compared to the second quarter of 2025.
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ROIC:Increased by 0.7 percentage points to 3.6%.
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Investments:Totaled BRL795 million, with 45% in Brazil and 55% abroad.
Release Date: July 23, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Weg SA ( WEGZY ) reported continued growth in revenues abroad, particularly in North America and Europe, driven by strong demand in the oil and gas, ventilation, and refrigeration systems segments.
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The company's EBITDA margin remained healthy at 21.8%, supported by a favorable product mix despite challenges such as rising raw material costs and import tariffs.
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Investments in expanding production capacity are ongoing, with significant progress in transformer factories in Colombia and the United States, as well as in China.
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The company's ROIC showed growth of 0.7 percentage points, ending the quarter at 3.6%, indicating effective capital allocation and investment quality.
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Positive industrial activity in Brazil contributed to growth in demand for short-cycle equipment, such as low-voltage electric motors and gearbox reducers, across various sectors.
Negative Points
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Revenue in the domestic market was negatively impacted by the absence of centralized solar generation deliveries, which were significant in the previous year.
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Exchange rate fluctuations reduced the growth of BRL, affecting the conversion of revenues despite good growth in local currencies.
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The solar generation business in the GTD area saw a decline due to the lack of centralized generation projects in 2026.
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The company faced challenges from rising costs of raw materials and import tariffs in the United States, impacting profitability.
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There was a decrease in EBITDA by 2.1% compared to the second quarter of 2025, reflecting some operational challenges.
Q & A Highlights
Q: Can you explain the impact of tariffs on WEG's financials and how you plan to mitigate these effects? A: Andre Rodrigues, CEO, explained that the tariffs, particularly Section 301 at 25%, have impacted WEG's products, especially those with high copper content. The company has adopted several mitigation measures, including diversifying its production footprint globally and reevaluating its commercial strategy to maintain competitiveness. The impact of tariffs is complex and varies by product and region, but WEG is actively working to mitigate these effects.
Q: How is the ramp-up of new plants progressing, and what is the expected impact on profitability? A: Andre Salgueiro, CFO, stated that the expansion of production capacity is underway, with 25% of the new capacity expected to be operational by mid-year. The remaining 75% will be operational by early next year. The ramp-up process will vary by plant, with new factories in Mexico and Colombia expected to take longer to reach full capacity. Profitability may be impacted during the ramp-up due to increased personnel expenses, but the company expects optimized capacity and profitability by 2028.
Q: How are you managing pricing adjustments with clients in light of tariff changes? A: Andre Rodrigues explained that pricing adjustments are complex and depend on various factors, including commodity price fluctuations and client-specific agreements. WEG evaluates each case individually and adjusts its strategy accordingly. Despite tariff changes, the company has maintained a positive demand environment and continues to negotiate pricing adjustments as needed.
Q: What are the growth expectations for WEG in the international and domestic markets? A: Andre Rodrigues highlighted that WEG continues to grow in both international and domestic markets, with international growth in local currencies aligning with initial expectations. The company anticipates a more favorable comparison base for the second half of the year, despite FX fluctuations. WEG remains confident in its growth potential, supported by strong order intake and strategic investments.
Q: Can you provide insights into the competitive environment and WEG's capacity to gain market share? A: Andre Salgueiro noted that WEG is well-prepared to grow in any environment, leveraging its competitive advantages and diversified portfolio. The company sees strong demand for its products, particularly in the industrial and GTD segments, and is investing in capacity expansion to capitalize on growth opportunities. WEG's strategic positioning and investments in new technologies, such as electric mobility and energy storage, are expected to drive future growth.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
