WEG S.A. (B3: WEGE3, OTC: WEGZY), one of the world's largest manufacturers of electronic equipment, today announced its results for the fourth quarter of 2020 (4Q20).
Highlights
Net Operating Revenue (NOR) was R$ 4,889.9 million in 4Q20, 29.4% higher than 4Q19 and 1.8% higher than 3Q20.
EBITDA(1) reached R$ 981.0 million, 47.2% higher than 4Q19 and 4.9% higher than 3Q20, while EBITDA margin was 20.1%, 2.5 p.p. higher than 4Q19 and 0.6 p.p. higher than the previous quarter.
Return on Invested Capital (ROIC) reached 25.5% in 4Q20, up 5.3 p.p. from 4Q19 and up 2.2 p.p. from 3Q20.
This quarter we continued to observe the improvement in economic activity, especially in Brazil, where the recovery observed since 3Q20, drove the demand for our products and solutions. This recovery, combined with our efforts to control costs and operational efficiency, were determining factors for the good results presented in this quarter.
The performance in the domestic market was positive, reinforcing the improvement observed in important business areas, such as Commercial and Appliance Motors and Paints and Varnishes, areas with a predominance of short-cycle goods. The Industrial Electro-Electronic Equipment and Energy Generation, Transmission and Distribution (GTD) areas also showed positive growth compared to the previous quarter, specifically on the long-cycle businesses linked to important segments such as pulp & paper, mining, oil & gas and power generation and transmission.
In the external market, we continue to see a gradual recovery in short-cycle businesses, although slower, remains constant since the end of the second quarter of 2020, which were the worst months of the pandemic and its impact on our business. The activity related to long-cycle projects, mainly in the Industrial Electro-Electronic Equipment, showed signs of volatility, as already anticipated, reducing the growth rate, resulting in a decrease of consolidated revenue in local currencies in the external market.
Despite the positive business dynamics this quarter, we consider that the crisis caused by COVID-19 is yet to be overcome. Uncertainties regarding the global economic recovery exist and future impacts in several industry segments may reflect on our business, whether in the demand for short-cycle goods or projects related to long-cycle goods.
In the video, WEG's Investor Relations Manager, André Menegueti Salgueiro, presents the main highlights of this quarter
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