Good morning. Welcome to the conference call of WEG. We release the results of the first quarter of 2022. We are transmitting this conference call along with its slides in our investor relations website at the address ri.weg.net. After its completion, the audio will be available for you at our investor relations website. If you need any assistance during this conference call, please request the help of an operator by pressing star zero. Any forecasts in this document or any statements made during this conference call about future events, business prospects, operational and financial projections and goals, and also to the potential of future growth of WEG are mere beliefs and assumptions of WEG's management, and they are based on information currently available. Forward-looking statements involve risks and uncertainties and therefore dependent circumstances that may or may not occur.
Investors should understand that general economic conditions, industry conditions, and other operational factors may affect the future performance of WEG and lead to results that will be materially different from those expressed in such forward-looking statements. As a reminder, this conference call is being conducted in Portuguese, and you are listening to the simultaneous interpretation into English. Today with us in Jaraguá do Sul, we have Mr. André Luís Rodrigues, Administrative and Financial Officer, André Menegueti Salgueiro, CFO and IRO, Wilson Watzko, Controller, and Felipe Scopel Broffman, Investor Relations Manager. Before Mr. André Luís Rodrigues, you may start.
Good morning, everyone. It's a pleasure to be with you once again for the conference call of WEG. I would like to start with the quarter's highlights, where the net operating revenue grew 22% as compared to 4Q 2021. We have maintained a consistent growth in this quarter as a result of positive demand in the main markets where we operate, combined with our strategy of product diversification and global presence. In Brazil, there was good demand for industrial equipment such as electric motors and automation components, as well as in solutions related to generation of renewable energy, especially in the businesses related to wind and solar generation, in addition to the strong performance in transmission and distribution.
In the foreign market, the performance was also positive with the maintenance of sales volume in the area of industrial electro electronic e-equipment and growth in sales in generation, transmission, and distribution of energy as a result of the portfolio that we've built throughout the year, especially in transmission and distribution businesses. Another highlight of the quarter was our EBITDA, which reached BRL 1.8 billion with a growth of 38.6% as compared to the fourth quarter of 2021.
Our EBITDA margin closed the quarter at 19.5%, a growth of 2.3 percentage points as compared to the same period last year. Along the presentation, André Salgueiro is going to give you more details about this performance. The ROIC, as you're going to see on the next slide, has reached 29.4%, a 1.1 percentage point reduction as compared to Q4 2021, especially due to the growth in the capital deployed, mainly explained by investments in fixed and intangible assets in the period.
It's important to highlight the 1.5 percentage points growth in relation to Q3 2022, supported by the growth in revenue and operating margins. I would like to give the floor to André Salgueiro to continue. Thank you, André. On slide number five, you can see the evolution of our business areas in the markets where we operate. In Brazil, we continue to have a good performance in electro electronic and industrial equipment with good demand for short-cycle equipment such as electric engines and reducers with a highlight to segments related to agribusiness and pulp and paper. We also noted good demand in long-cycle equipment such as medium voltage electric motors and automation panels, especially in oil and gas, mining, and pulp and paper. In GTD, we noted a growth in all business lines in Brazil.
In addition to the continuity of the delivery of wind turbines, this shows the performance of distributed solar generation alternators. T&D business had good revenue volumes driven by transformer deliveries to several major segments such as transmission, renewable distribution, and industrial lines. In commercial engines and appliances, despite the good sales volume in some segments, we noted an oscillation in demand from some important customers in the period, such as manufacturers of washing machines and motor pumps. Finally, the demand for paint and varnished products was positive, especially in the segment of metal structures and maintenance. In international markets, we maintained good demand, very pulverized among different industrial segments where we operate, despite the volatility in some regions. The highlight was the good performance in United States and Europe, despite the concern with the political and economic scenario in the region.
We observed better billing and order placement for long cycle equipment, especially for oil and gas, mining, and water and sanitation projects, thereby contributing for the construction of a healthy order portfolio. In GTD, the T&D sales showed a positive quarter, especially in North America, where we continue to take advantage of the opportunities in generation business. We highlight the good performance in our operations in India, with an emphasis with the production of hydro generations. In commercial motors and appliances, we noted the revenue level when compared to the same period in the year before, despite the accommodation in sales volume in some markets such as North America and Argentina. In paints and varnishes, we had a sales progress in our Mexico operation, which contributed to growth as compared to the same period in the year before.
On slide six, you can see the evolution of the EBITDA, which grew 38.6% compared to Q4 2021. The EBITDA margin ended the quarter at 19.5%, 2.3 percentage points higher than the same period the year before. This result is a reflex of stabilization of cost in recent quarters and the increasing improvement in the performance of our foreign operations. Finally, on slide seven, you can see the evolution of our investments. We have invested BRL 431 million on the quarter modernization expansion of manufacturing capacity, machinery and equipment, and new products. 42% of which were meant for manufacturing units in Brazil, and 48% were meant for industrial complexes and other facilities abroad. Now, I end my part, and I give the floor back to André.
Before we move to our Q&A session, I would like to talk about some of our most recent accomplishments and to talk about our prospects for this year. With regards to achievements, I would like to highlight the following recent events. First, we consolidated the first and largest two units of Gefran's motor control division in Italy and Germany, which were acquired last August. In November, we opened the new WEG engine factory in Algeria, dedicated to manufacturing engines for home appliances, especially washing machines. An outlook for the remainder of the year.
We started the year with a robust order portfolio for long cycle projects, both in manufacturing and in projects in oil and gas, mining, pulp and paper, as well as in GTD, in transmission and distribution generation projects, which should contribute to a growth in revenue in this part of the business, both in Brazil and overseas. The standardization of supply chains associated with stabilization of cost of the main raw materials should contribute to the operational dynamics throughout the year. On the other hand, we must keep an eye on the global macroeconomic scenario and possible related risks and volatilities, both in the domestic and international scenarios. Now I end the presentation. Operator, please, we may move to the Q&A session.
Ladies and gentlemen, we are now going to start our questions and answers session. If you want to ask a question, please press star one. To take your question from the list, please press star two. Our first question comes from Daniel Gasparete from Itaú BBA.
Good morning, everyone. Can you hear me? Thank you. Good morning. I would like to get more details about two things. First, I would like to understand better electro electronic equipment in the foreign market. We have a feeling that the North American market consolidated had the benefit of GTD. When we look the variation of revenues outside the American market, it's flat. What happened in the North America market? The same thing applies to Europe. We understand that it had the benefit of the consolidation of Gefran, there was a very strong growth in Europe, especially related to electro electronic equipment.
I would like to understand more about the short-term dynamics quarter-on-quarter and what you're seeing this year for these two markets, both the North American and Europe. I would like to understand more about market share. In a recent event, we heard about Siemens, your local market. Maybe you should leave just motors and focus more on software. What do you see in terms of your market share, especially in the European market, especially comparing to Siemens. Siemens are carving out their engine or their motor operations, usually focus more on technology and markets that are smaller. Would it make any sense for us to think of a carve-out of the motors operation, globally speaking? That's it. Thank you very much.
Hi, Gasparete. Good morning. Thank you for your questions. This is André Salgueiro. I will answer the first part about revenues from the foreign market, and then he will talk about market share. As to North America, when we look at the region as a whole, we have a positive performance and strong demand. The highlight in the region was T&E, especially because of transformers in Mexico, and the U.S. When we look at other businesses, we are not seeing revenues shrinking except with commercial motors and appliances, where we have seen some accommodation in Q4 as compared to Q3. Overall, the manufacturing dynamics is positive. The only thing that we should look at short cycle, especially comparing Q4 with the Q3, there may be some seasonality towards the end of the year that might impact this dynamic.
On the other hand, when we look at Europe, it had positive performance, and we mentioned this in our releases, slightly above what we expected earlier in the quarter. This is very much related to a project. There is industrial and electro electronic equipment which drives the growth. You mentioned the consolidation of Gefran after November, but also other businesses performing very well in Europe. Projects, as we've been seeing long cycle, both for oil and gas, water and sanitation. We have a significant concentration of OEMs for these types of projects in Europe. We had a very strong quarter because of demand in Europe. Hi, Daniel. Thank you for your question. I will try to answer the second part of your question. As for a market share.
On our last WEG Day, we had a very detailed presentation, talking about the company and opportunities that we are seeing as a result of WEG's internationalization project with solutions and also the fact that we are going into some new segments. I think that this movement is going to continue. Last year was very positive. Most businesses had very good performance. We are going to continue working to keep that. I think that there are many opportunities in the market which are part of the company's internationalization process. This is positive and we hope to continue advancing in the main markets and where we are starting to have our presence. Another thing is that WEG always analyzes.
We don't usually talk about the processes that are in the market or about to go to market, so we can't talk about these things. Thank you for your answers. Have a good day. Our next question comes from Lucas Laghi from XP. Good morning, Rodrigues Salgueiro. Congratulations on the results. There are two things I would like to explore with you. The first one is related to the micro aspects of WEG's performance in the quarter. Could you tell us a bit more about European market towards the end of 22 and the macroeconomic is more challenging in terms of recession and supply chain. How is WEG behaving in this market? Do we have more exposure to exports? You're exposed to problems. Was there any reflex in your strategies in the third quarter, especially with regards to motors?
I would like to understand the company's perspective in European market. The second question that is more specific about taxes. We saw about BRL 40 million in addition to what is most recurrent in terms of tax assets. You reduced three points effective rate. Can you give us more details about that rate? Do you have any updates? In terms of the provisional measure in Brazil in terms of tax rates and its impact on that, anything you may say will help us. These are the two things I would like to ask about European market and the tax rate in Brazil. Hi, Lucas. This is Wilson Watzko answering your question. With regards to Europe as a region, Europe is a very important region for our company. It's the second-biggest region in terms of relevance, in terms of international revenues.
As we said in the past, yes, we do have some significant operations in Europe, especially in Portugal and Austria, and many of the products that we sell in Europe we manufacture especially in Brazil or even in China, especially, the engines, with aluminum casing. Since the beginning of last year in Europe, the situation is very specific and the prospect towards the end of the year in the last quarter was to have a very strong energy crisis because of the conflict and energy and then, maybe a slowdown in economic activity, which somehow, at least in the short term, was not as significant as we thought it would be. This effect and the combination of a less severe winter and as we equalize the energy did not have such an impact on the short-term economic activity.
In any way, this is something that we need to monitor. We can't say that this is completely solved. As we usually say in Europe, there is more concentration of sales of short cycle products, so we don't have such a long portfolio visibility. We need to monitor month-on-month to see the dynamics over the next few quarters. What we can see now in terms of long cycle portfolio, there are some projects and some significant deliveries over the next few months and quarters. In terms of short cycle, we are seeing some oscillation in some countries, but we cannot say that it's a downward trend. It's more towards stability. It's flat, the scenario. We need to monitor the short cycle dynamics from now on. This is André Rodrigues. I would like to highlight two points.
First, the higher volume of sales in the foreign market, which has contributed to a reduction in effective rate, then one-off effect of income tax and social contribution on interest rates and Selic that had an impact. When we go to MP 1152, the Brazilian law is that we are monitoring this, and this law will impose changes on transfer pricing rules in Brazil. What we expect is, first of all, this is just a bill that still needs to be approved in a congress before it becomes a law. It will go to an arm's length concept. The arm's length concept includes five different types of methodology for to define everything. It will depend on all the rules from that are enacted.
I'm trying to be educational, saying that there are still some phases before we know better what is going to happen. If everything happens during the deadline, there might be an effective impact in the income tax as of 2024, if this bill is presented as it is in the provisional measure. The current structure that we have today needs to make sense. The share impacting of our operations is showed in the line of the rate difference. We are publishing that. Right now, because of the uncertainties that I have mentioned step by step, it's difficult for us to have an accurate estimate of that impact. In any way, I would like to say that we believe that there will be a benefit.
It still makes sense even after the bill is approved. Once we see whatever will come with the provisional measure, we're going to give you more information. Thank you very much for your answer. Our next question comes from Igor Araujo from Genial Investimentos. Good morning, everyone. Congratulations on the year and on your performance. I would like to touch a point that earlier last year, I think we mentioned that right after the conference call of Q4 2021. I would like to go back to that point. Back then, we had a concern with a possible slowdown, and we were seeing some effect, especially a slowdown outside Brazil. One of the points that were addressed in one of our conference calls was precisely with regards to your long cycle revenue backlog.
I would like to understand what it is like comparing it to last year and now at the beginning of this year in percentage. If you could show that to us, I can do lots of calculations, and it will be very helpful. Thank you. Hi, Igor. This is André Rodrigues. I'll tell you more about the backlog. First of all, when we talk about industrial electro-electronic equipment, we are seeing a good continuity in orders being placed along the quarters, both in Brazil and in the international market. In this business line, especially with oil and gas, mining and pulp and paper. There is a good performance, and they continue. Industrial electro-electronic equipment. We have a healthy portfolio. When we go to GTD, we start with a robust portfolio in the year when we talk about Brazil.
We can talk about transmission and distribution auctions. Last year, we had two auctions totaling close to BRL 19 billion in June and December. Very positive. This year's is for that number to go twofold. BRL 50 billion . There will be auctions, if I'm not mistaken, in July and December. It's not a good portfolio and positive outlook for this year. Still in GTD, if we look at wind, so we have a portfolio with schedules until the middle of 2024. This hasn't changed. In solar, sale of equipment for solar plants, we have good prospects this year and also a good portfolio for electrical generators, especially from hydro and thermal source. This is positive in Brazil.
If you look at the international market, nothing has changed in terms of what we are always telling you. In North America, still have a long, strong demand from generation and transmission with aerogenerators. South Africa also with good prospects for transmission and distribution. In this manner, we have started this year as we started 2022, with a very positive portfolio for the company's long cycle portfolio. Thank you very much, and congratulations on your performance once again. Our next question comes from Marcelo Gumiero from Credit Suisse. Good morning, everyone. Thank you for taking my questions, and congratulations for your performance in 2022. I have a specific question about margin. Your margins compared to a very strong level that you had in the last quarter.
What do you see in 2023 in terms of profitability? We see a slowdown in the prices of commodities globally, and how is this translated into opportunities for 2023 as compared to a more competitive pricing dynamics? If you compare to your peers in terms of diversification, pricing, and everything. Another question, a follow-up. Globally, we are seeing many incentive programs for the energy transition. In U.S. and Europe, very significant projects in face value. It's billions and billions of dollars. In the end, are you seeing that this type of initiative has contributed to warming up demand? What do you see in terms of projects? Are there any differences? Do you see an impact? Those were my two questions. Thank you very much for taking them. Hi, Marcelo. This is André Rodrigues answering.
I'll talk about margins, and then Salgueiro will answer your second question. First of all, we should remember that even though our company does not provide any guidance of projected margins, our margins should consider longer periods. We are in the beginning of the year. Today, considering our current visibility, our margins probably we will be able to deliver margins that are similar to what we had in other years. Sometimes we focus on FX variations. We've been seeing some volatility in the last few weeks, and this is likely to continue. Some volatility in the slowdown in the global macroeconomic scenario. I think that Salgueiro talked about that. Variations in the cost of commodities for long periods.
The main message is that we'll continue working to deliver margins above those of the market. Marcelo, as to the energy transition and all actions that have been going on both in the United States and in Europe, they're all very positive. It's important to point out that most of our businesses are exposed to this new trend and the most recent trend. We go from the manufacturing, when we talk about motors with more energy efficiency, automation solutions that may help to reduce consumption of energy, and also electric mobility, electric, and sometimes especially focusing on heavier automobiles such as trucks and buses. It's intrinsic to a good portion of our businesses as we've been doing. We see this as a very interesting opportunity.
It's difficult to measure right now how much this is already happening, concretely speaking. I think that in the mid and long term, it sounds like this is a very positive opportunity to say that this has already moved the needle for us right now. It's very difficult for us to have that perception because as I said, this permeates most of the company's businesses. Thank you very much. Our next question comes from André Mazini from Citibank. Good morning, Rodrigues, Salgueiro, Felipe, and the team. Thank you for taking my question. Thank you for the call. I would like to ask about supply chain and pricing. With an improvement of the supply chain, how do you see the pricing dynamics?
In the worst months of the dynamic, the supply chain was really broken, and you were saying that customers were less price sensitive. In the past, the most important was to have the right product at the right time. Though not many people were doing that. Now, once we are back to normal, do you think they are again price sensitive and there is more competition based on pricing? Hi, Mazini. Can you hear us? There is a little bit of echo, but we can hear you. Well, as to the global supply chain, we went through a period, especially after the pandemic, when we had a major impact of many segments in terms of what was current supply of some components that started in the beginning of the pandemic. We are reporting a normalization in this process.
What I would like to say to you is that today, most of the impact we have seen has been normalized. Most of the parts that we used in our process. Freight costs, availability of ships, all of this has gone back to normal along the last few quarters. There is still something missing in terms of electronic parts, which still affects our automation products. Somehow the situation, especially if we compare to what it was during the Pandemic, today it's much better than it was a few quarters ago. Once as we've gone back to normal, we'll be able to see some impacts in operational terms.
We are going to see operational improvement, and we have noted part of that in the fourth quarter with a more positive cash generation because of our inventory levels are going back to normal. We have started this normalization process, and this was only possible because we are in the process of improving that environment as a whole. As to competition, as we said in other calls, we have used the opportunities as we have a vertical model, and as we were very proactive in terms of that problem, and we met the needs of our customers very well along the period. I think that there should be some pressure from some competitors, but we don't see that as a risk. Most of what we built along the last few years, we're going to continue supplying from now on.
Thank you, Salgueiro. Our next question comes from Alberto Valerio from UBS. Good morning, Salgueiro and Rodrigues. Once again, congratulations on the surprisingly very good result that you are reporting. Could you give us some color on whether there was an influence in some specific area or geography in terms of long cycles in Brazil or in the United States or Europe because of a stronger margin than usual? Well, you have given some of the guidance for 2023. Another point I would like to know, what is your inventory management like? So do you do FIFO, inventory average? What should expect in the future because there was very strong volatility in the commodities market recently. Hi, Alberto. As to margin, we have improved our margins in practically all operations. This is more or less in line.
There was no significant evolution. When we compare it to last year as compared to the fourth quarter of 2021, there has been an evolution. Most of the businesses, I said, is natural, and we have that dynamics of short cycle and long cycle. We have seen that effect, especially based on the fourth quarter. It continued, and as time went by, we saw a normalization in long cycle. No major business line or no product line was an outlier. This is a usual process in terms of the recomposition of prices and the cost structure, which was stable along the last few quarters. We saw this effect in almost every product line. Alberto, this is André Rodrigues talking about the supply chain.
What I can say is that we didn't have any shortage in raw materials or generalized shortage. This is a result of our verticalization, our conservative inventory strategy that we have adopted over the past few quarters as we have updated you on that. This has helped and the situation is getting better quarter after quarter. However, it still has some impact in some industries, especially in terms of electroelectronic equipment. In this manner, what you can see is that the more we go back to normal, we can reduce inventory levels. We can compare the volume of inventory that we had in September. We had an improvement in December, and we'll try to find something better and better quarter after quarter as things go back to normal.
With regards to pricing, what I can tell you is that we are also seeing smaller pressure in the cost structure coming from raw materials. This is something that happened along the second half of 2022. Some raw materials showed an accommodation of prices, and here we can mention copper and steel. Others, such as electronic parts, are still at high levels of price. We said a shortage in terms of commodities. This is all back to normal. When we talk about electronic parts, it's not right to say that the same thing happened. When we answered about that, in the beginning of 2022, we had an expectation that the components chain would go back to normal after 2023.
This is not happening, what we are expecting is for it to go back to normal after 2024. As I said, if on one hand there is a normalization in terms of commodities, what we have seen recently was a reversal of trends in commodity prices. I talked about steel and copper, they are in a track of accommodation. Recently, we saw some pressure on those prices, maybe because of the opening of China. Today, now, focusing on inventory, we hope it will get better along future quarters. Perfect. Thank you very much. Our next question comes from Marcelo Motta from JPMorgan. Good morning. I have two questions. First of all, could you give us more details about the CapEx for 2023? Some expansion in Jaraguá.
I would like to understand more, maybe depending on the segment. Where you are expecting more investments. The second, in the North American market, there are some companies, especially thinking in terms of inflation, in terms of labor. Can it pressure margins this year or not? Hi, Martha. I will talk about CapEx in 2023. The first thing is that we have approved our capital budget for 2023, a number that is bigger than what we had in previous years. Last year it was BRL 1.2 billion. Part of what I am going to say is something that we've been announcing and things that started in 2023, and are going to continue in 2023. Basically, those investments are to support the current growth of the company.
In recent years, our total CapEx, most of it, a little bit more than half, was for the foreign market. This year, 55% is allocated to Brazil and 45% to international. Here the focus in Jaraguá do Sul, increasing our manufacturing capacity, a new motor factory, especially for electric motors. Because of the good performance of T&D in Brazil, the team where we have our transformers plant. We have new investments to expand our factory there, in terms of service provision for transformers. Itajubá, recent acquisition, Balteau that manufactures transformers. More focused on measurement equipment. There is this co-dynamic that we are seeing in the T&D market, as said before. In the international market, in Mexico, the highlight is the increase of capacity.
The new plant for transformers is supplying the United States included. In India last year, we reviewed our investment, so we opened a new low voltage electrical engines in India, and now we have mid and high voltage to use the space to manufacture aero generators 4.2, that we have the intention of starting selling in the market. Portugal too, we have an opportunity with industrial engines. This is the focus, and this is where we are making the investments. United States, after we open our third transformers manufacturing plant, at the same time, we announced expansion in one of the existing factories, and this expansion will be complete in 2023. In China, we are going to increase capacity for industrial engines and to increase automation in that country.
Part of the investment will also be focusing on a constant automation and modernization and robotization of our operations. It's important to say that this capital budget, I don't know, maybe, we will execute 100% of that amount in the year as we did in last year's. This is just a snapshot and an overview of how we are going to allocate investments in 2023. Hi, Martha, thank you for your question. As to inflation in the United States, we can talk more broadly. Inflation today is a reality in most of the world, not just in the United States and in Europe too. This was something very strong last year. It has some impacts for the cost structure.
I would tell you, as it is a Brazilian company, we are very familiar with that dynamic in Brazil, we know a lot about it, about that matter, we are going to make all the necessary adjustments. We don't see that as a significant risk that would have any significant impact on our margins or the dynamics of our businesses. Thank you very much. Our next question comes from Rogério Araújo from the Bank of America. Good morning, Salgueiro. Congratulations on your results. I have two follow-ups. The first is about transfer prices. There is a line showing the gain and the difference from rates, international rates.
Can you give us a breakdown of how much of that comes from exports and how much of that comes from manufacturing outside Brazil with a lower rate, so that we know more what is related to transfer pricing? My second question regards solar power. Can you tell us about the market after January 6th, which was the deadline. What are you seeing in terms of GTD? Any lags in terms of the placement of orders and how is that related to deliveries? Thank you. Hi, Rogério. Thank you for your questions. Let's do the breakdown. Of explanatory notes on line 27, we cannot report the breakdown specifically. All I can tell you is that most of the effect on that line is related to the trading, the structure of the trading.
Obviously, there are different rates in other operations with lower rates than Brazil, and then this difference goes through that. Mainly the effect that you can see that is the effect related to trading. As to solar, there was a change in regulations now on January 7th, and everyone knows that this was something that was being discussed for a few years. This new regulation has an impact on distributed solar generation. It still includes a transition period for the projects that were filed until January 7th. We still have a transition period, depending on how big the project was. That can range from 120 days to almost 20 years.
The bigger projects in power plants from 1 to 5 MW, those projects from January 7th will have one year time for implementation. Considering the transition that will still take place along 2023, we are not imagining any significant impact in solar generation. On the other hand, we can say that this is business that is not likely to continue growing at the same pace as it grew in recent years. When we look at solar as a whole, and it's been getting better and better, and André said there is a construction of solar generation that is centralized in the last few quarters. When we look at solar as a whole, we can imagine that solar businesses will continue to grow.
Especially in 2023, we don't have any major concern in terms of shrink in revenues. In 2023, we still need to see. We have a short cycle in this area, but as we get towards the end of the year, we can update the dynamics of that business, especially the outlook for next year. It's very clear. Thank you very much. Our next question comes from Josh Milberg, from Morgan Stanley. Good morning, everyone. Congratulations on your results. I have questions about the evolution of your business in Asia-Pacific, where you grew below average in 2022. Can you give us an updated perspective about the factors underlying this underperformance, discussing the effect of lockdown in China, in India, and how you receive the challenges in that market as compared to players from Mexico?
A change to a more state-controlled economy in more recent years. As the end of the COVID-Zero policy especially, are we going to see a significant improvement in growth rates in that region in 2023? In our understanding, we know that Asia is not representative in your mix, but I ask because you have identified in WEG as part of the world where you have major ambitions for future years. Thank you very much. Did you understand my question? Hi, Josh. Yes, this is Rodrigues talking. Thank you very much for your question. I'll talk about Asia-Pacific for sure. The lockdown in China. Along the pandemic, ever since the beginning, yes, it had an impact in our businesses and in other companies, too.
Unfortunately, we are talking all the time to the people in our China plants, and overnight, everything that was implemented in terms of prevention and control was lifted and disappeared as they were very quick in implementing it. Overnight, they just lifted all the rules in terms of limitation of circulation. It had an impact on the impact of WEG in the country. Now we are expecting a reversal because of this opening and this general release in all operations that are taking place since last December. I think that the first point is that we are beginning the year with good prospects for that region. As the Chinese economy improves, we are expecting growth in China and also good prospects in India too. When we talk about Asia Pacific, it's not just about China, we are talking about.
Apart from China, India is also a country that WEG really believes in. We are leaders in mid and high voltage motors in Brazil. We are delivering relevant projects, and the long cycle portfolio is positive for this year. In combination with long cycle businesses, we have opened an unit for low voltage for the manufacturing of low voltage engines. There is our aerogenerator, and we want to start producing the 4.2 MW aerogenerators in that country. When we talk about Asia Pacific, we have had a good performance in mining in Australia, and WEG has a significant presence. WEG is a well-known brand. Here we combine good prospects that we're seeing both from China, India in 2023. Our next question comes from Lucas Esteves, from Santander.
Good morning, André Rodrigues and Salgueiro and Felipe. In terms of working capital, you said that one of the focus was to regularize operational improvements and cash generation in terms of working capital. You showed that with the reduction of inventory. Which other initiatives do you intend to implement? Thank you. Hi, Lucas. I think that the main action where we're going to focus is to improve inventory turnover in the company. The median time for us to receive payment days, it's different from companies than we see. Average payable days is smaller than compared to the rest of the country. It's related. It's better, and we use this flexibility with components and raw materials. In terms of the cost of products sold.
The main focus of the company is for sure to improve inventory turnover. We have had better inventory turnover than what we had in 2022. We need to pay attention at the change in the business profiles. As we have businesses of solar that have become more relevant in recent years. We have a significant performance in solar plates or solar panels, and the company is very much mobilized in all levels, in all countries, for us to seek improvements along this year. You mentioned solar panels in inventory. There was 20% reduction in the price of solar panels because of reduction in prices of raw materials, and you're working with a high inventory in solar panels. Is this going to impact your profitability, Lucas?
Well, all this work of reducing inventory in solar panels, this is something that happened along the second quarter. We had an atypical situation along the first quarter with all delays in terms of boarding because of the global supply chain problems that had a negative impact in our inventory levels for panels. We want to bring it closer to normal in the second quarter. Our levels today are okay, which makes it possible for us to conduct our businesses without any major risks. Thank you very much. We now close our questions and answer session. I would like to give the floor to Mr. André Rodrigues for his closing remarks. Mr. Rodrigues, please. Thank you very much for your attendance.
Have a very good day, and see you on our next conference call once we announce the results of the first quarter of 2023. Thank you. WEG's conference call has now ended. We thank you very much for your participation, and we wish you a very good day. Thank you.