Weg S.a.

WEG said net operating revenue declined 0.6% versus 2Q25, while EBITDA fell 2.1% year over year to BRL 2.2 billion and EBITDA margin was 21.8%. ROIC improved 0.7 percentage points to 33.6%. CapEx in the quarter totaled BRL 795 million, with 45% in Brazil and 55% abroad. Management did not provide full-year revenue or EPS guidance on the call, but said it expects a more favorable scenario for revenue growth in the remainder of the year as the 2025 comparison base normalizes. They also said the 2026 capital budget of BRL 3.6 billion remains valid, with BRL 1.4 billion already completed by midyear.

André Rodrigues framed the quarter as a period of resilience despite two main headwinds: the missing solar deliveries in Brazil and FX conversion pressure. He emphasized that continued growth abroad, strong orders in long-cycle equipment, and a healthier comparison base should support revenue growth in the second half. His tone was confident and constructive, repeatedly stressing that WEG is investing ahead of demand and is well positioned across regions and product lines.

André Salgueiro said revenue by business reflected strong Brazilian industrial activity, continued T&D deliveries, and solid external-market demand, especially in Europe and the U.S. He noted that EBITDA margin stayed at 21.8% despite higher raw material costs, U.S. import tariffs, and personnel expense tied to capacity expansion, and he said CapEx reached BRL 795 million in the quarter. He also reaffirmed the BRL 3.6 billion full-year CapEx plan, with BRL 1.4 billion already invested, and said the T&D expansion should leave WEG with 25% of the originally announced added capacity available by midyear and the remaining 75% coming on at the start of next year.

Analysts focused heavily on U.S. tariffs, pricing pass-through, and the timing/margin impact of new transformer and T&D plants. Management said the tariff situation is still fluid, with potential U.S. tariff exposure depending on product, origin, and whether measures become cumulative; they stressed they are mitigating through global footprint shifts and customer-by-customer pricing. On ramp-up, management said Mexico and Colombia factories should start contributing around 2027 and especially 2028 at more optimized profitability, while some personnel and start-up costs will pressure margins during maturation.