The development of our businesses and the opportunities looking forward. This edition is a very special edition of the WEG Day because on September 16, we celebrated our 65th anniversary. Thus we have put together a very special agenda. The first presentation will be delivered by Mr. Silva and will be on the history and culture of WEG, two key pillars for our journey so far. After Décio's presentation, we will have a financial update delivered by André Luís Rodrigues, our Administrative and Financial Vice President. After André's presentation, we will have a coffee break, and when we return, we will have a presentation on WEG's portfolio for data centers that will be delivered by Manfred, Automation VP, Carlos Diether Prinz, Distribution and Transmission VP, João Paulo, Power VP, and Rodrigo Fumo Fernandes, Vice President for Industrial Motors. After this presentation, Alberto Kuba will give you an update on WEG strategy.
After Kuba's presentation, we will have a Q&A session where you will have the opportunity to ask all the questions you have regarding the subjects discussed this morning. Two important announcements before we start. Presentations that will be delivered here are already available on our website, including the English version, and for those who are here, access to the Wi-Fi network is available on the tables you can see there. I wish you all a great meeting, and I would like to call Kuba to announce the first presentation. Thank you all very much.
Good morning, everyone. Welcome to WEG Day 2026. It's always a big event. This is undoubtedly one of the most important events WEG has.
In this edition where we are celebrating our 65th anniversary, we thought what we could possibly bring to you to show what has brought us so far, and what will be the things that will make us go on growing continuously and sustainably in the future. This year, I have been working here for 25 years since I stepped here in the city as an intern. The first year I joined this company as an intern, it reached the first BRL 1 billion, and last year we reached BRL 40.8 billion. In 25 years, I could see over 40x growth. During this period, right in the beginning of my career, I used to be sales supervisor back then. The big pleasure when we had managerial meetings where Décio would, on a quarterly basis, present the results of the company.
As a way of bringing you a little bit of this history, this culture that was forged starting 65 years ago by three people, three friends from the city, Dr. Werner, Eggon, and Geraldo, who with the decision of starting a company in this city, they changed the city, they changed the state, they changed the country as a technology country. Today it's impacting over 50,000 employees all over the world. It's really great to have Décio here to tell us a little bit about this history, talking about everything that has been forging the culture of our company throughout the years.
It has been three years since I was announced here as Harry's successor, and over these three years, I have had a chance of visiting many companies that belong to WEG in different parts of the world, different business units that I did not know or had not been to before. What impresses us the most is not how big the buildings, the facilities are, all the automation work we have been doing in several sites. What really impressed me the most over the past three years was to see that the culture that Eggon, Geraldo, and Werner created back then when they first started. This culture, which I think will, WEG's forwards in the next few years. I would like to invite Décio Silva now to give us his talk. Décio Silva, the Chairman of the Board. Thank you, Décio.
Good morning, everyone.
I would like to thank and greet Kuba and thank you for being so kind, for his kind introduction. I will be talking a little bit about the history and culture of WEG, because behind the WEG, you will see the principles and the values that have brought us to here. Just as Kuba has said, and I am convinced and I am absolutely sure that this is so well-structured that this will take WEG further in the future. This is Jaraguá do Sul before 1961. They have a picture from the 1930s. It was basically farming colony or settlement. In 1961, when the three decided to start WEG, and this is the building where we have a museum now. It was a leased building at that time, and WEG bought it when I was the CEO, and we decided to buy that building to install the company's museum there.
Eggon was the son of a teacher. He did not have formal education. He was arrested because he used to teach German during the Second World War, and my grandmother was Madalena, and she was a second-generation Hungarian. She spoke German and my grandfather was a local and who, in spite of not having education, learned how to speak German and taught German later. Werner was born in Jaraguá do Sul, my father. Werner was also a local. All of them descendants from German settlers, and he was an enterpriser. He was the city's electrician who would repair small motors and pumps. Geraldo, his father, was German. He was the first generation, so a son of Germans, and he had a tooling shop in the city of Joinville. The three.
My father started working very young in a lottery, and then he started working in a financial institution. Nobody here will know that he went to work at INCO Bank. It was a state bank, which in 1968, around 10 years later, was acquired by Bradesco, which is a major Brazilian bank. He was working in this bank for around seven years, and then he was invited by small business. Jaraguá had no industrial tradition back then. There were very few businesses here back then, and he was invited to work in a family metalworking company. It was a family business. They had 25 employees, and he worked there for five years, and when he left, they had already 150 employees. That was really key to establish WEG's culture.
Having worked in a family business, he would take a bus, go to São Paulo to buy steel or maybe find a customer there. Then he would return, and then the cash was not enough. Then they bought a car for his son, and he had 5% interest in the business, which they gave him. Maybe that was very relevant for him, which is family business, using the strengths of a family business. This is what he learned back then, but trying to avoid its weaknesses and its pitfalls. My father was kind of unmotivated and discouraged. Then on a Friday, he went to a bar, to a pub to have some beer at the end of the day with his friends. Then the owner of the pub said, "There's no cold beer today. The refrigerator, the motor broke.
We need a part from São Paulo." Dr. Eggon said, "Well, I know the mechanics who work at this metal company that provided services to his business," Mr. Geraldo. "I know also Werner, who was the city electrician. I know a mechanic. I know the electrician. I can repair this motor and all other motors as well if you need to." Okay, let's start a motor business. BRL 11,000. That was the capital. Dr. Eggon had some money, and the other two joined with equipment and machinery, and this is how WEG started. They were people with different profiles. Werner was an introvert, very quiet. He was very curious. Well, none of them had formal education. Very little education, actually. They were all self-taught. Werner would assemble radios in the Brazilian universal studio. So it's like he would assemble radios himself, self-taught.
Geraldo learned mechanics from his father, a great mechanic. Geraldo spoke a lot. He was very talkative. He was an action guy. Eggon was the person who would strike a balance. So they were all different and would complement each other. Werner was the engineering leader, was the leader of product development. Geraldo was the shop floor guy. He was the shop floor leader, and this one was the engineering leader. My father was the administrator, the sales strategist. This is how it all started. He didn't notice something. It was a company of owners but of partners, and they decided something very important. They made one-third for each, 33.33% for each. This will really have a great impact on WEG's corporate culture later on and how they managed this company later on. This quotation by Eggon. More than having on the walls and manuals being.
The full statement is: If you have no machines, we can buy. If you have no money, we can take a loan. We just need credit. Well, Eggon back then didn't know that interest rates would be so high later on in this country. Anyway. Motivated people. People motivated by an idea are the foundation of success. That's something you cannot buy. You cannot loan people, motivated people. You have to build that motivation. They were all visionaries, and they were really ahead of their time. Strategic planning, WEG strategic planning. I did some math. We have been doing this for 40 years. Back then, I wasn't a director when they had the first strategic planning meeting. WEG used to be small here, and some major companies in São Paulo probably did that already. Strategic planning by Nicaragua.
That was a very small company that was also trying to do things in the long term. Strategic planning, mission, vision, and so on and so forth. This is WEG's mission. We have had it for around 10 years. Things change, but the main thing always stays. The mission says that we want to have continuous and sustainable growth while maintaining simplicity. Every single word has something really relevant that is really key to our culture. Why do we want to grow continuously? Do we recall what Eggon said, "Motivated people are the foundation of success." Can we really have a company that is highly motivated when people who are below have to wait for their boss or have maybe to leave the company or be dismissed or retire? We started to understand what he says about motivated people. Of course.
In order to have a highly motivated company, you naturally have to have fair compensation, fair wages, and variable compensation. You have to have a good working atmosphere. But the most relevant thing are actually the opportunities. Young people who come here, who apply for a job here, they know that if they are competent, if they study hard, work hard, in three or four years, they may be in Colombia, India, Germany, U.S., or maybe in China. Trying to have an international career. So we want to continuously grow, and this is a strong motivating factor. People want to have opportunities. We want to grow. Why do we want to grow? This has to do with the economics. You grow to dilute fixed costs, overheads, to have a more robust company, to have financial and political capacity.
But sometimes we have to ask ourselves, is it really worth to grow, to have all the advantages big companies have if this will lead you to lose the advantages of small companies? I do not know if it is worth it. What do small companies have? They have agility, speed. They are faster. Smaller companies have more simplicity and more flexibility. Why does the word-- What is behind the word simplicity? What is behind simplicity? Well, to begin with, the market is very complex. So you have to try to look at things in a clear, more objective manner, looking at the key points, and you can only do that with simplicity. Of course, we want to grow. We wanted to grow. We are kind of big today. The big ones run a great risk, namely being arrogant, haughty.
Well, thinking that they know it all, that they do not have to learn anymore. If they are arrogant, that will not be good for employees and customers. So growing continuously and being simple, having simplicity is precisely that. If you look at different companies, you can separate them into different types. Roughly speaking, those companies that grow, that provide opportunities, motivating their people, becoming more competitive, growing more, motivating more, is the virtual cycle. Here at WEG, we struggle all the time so that our company is closer to this type of company. At the other end of the spectrum, we have those companies that will not grow. Then what do they have to do? They have to start to cut things, maybe cut costs in technology, in branding.
They have to cut costs for training their people, which in the end, are the most important things in an organization. These are the things that actually are the foundation. Then they cut costs, invest less, become less competitive, grow less, become smaller, then we have this process going on. Most of them are in the middle of this spectrum. But most want to be a dynamic company, be part of the cycle of growth. How did we organize our growth? WEG started with electric motors, then we included other equipment, a rotating equipment, which is the generator, a transformer, which is electric equipment, which is static. Then it started building around that. Products to control these machines. Then it started putting together systems with these components, with inverters, contactors, then power systems, hydraulic system, biomass, wind, solar power systems, and so on.
Now we are working in the digital world, and we will have to connect that all. This is our portfolio strategy. So our growth strategy is the following. More product for the same market, which is the portfolio strategy, and the other one, more markets for the same product. Then the same market back then was Brazil. We started here. Now WEG, we thought back then, maybe we will be different. Maybe we will start with global products from day one. But in the beginning, this is how things worked. This strategy of more market with the same product, this was our first internationalization strategy. They started early in 1970. They started exporting, and that was really relevant. They exported in the first year, of course, to neighboring countries, to Paraguay, Uruguay. But in the same year, they already started exporting to Germany and the U.S.A.
That was really key so that we could become competitive. We started working abroad, providing products or supplying products to customers who were more demanding. We had to face certification agencies, product certification agencies. Germanischer Lloyd in Germany and the CSA in Canada. Because in order to protect their markets, to have quality products and so on, and also they did that to protect their domestic manufacturers. But WEG used that as a leverage to further develop technology. Whenever they sent a motor to a CSA in Canada, and when it returned, saying that we have to do something about this insulation, that was a lesson we learned, and then we started further developing our product lines. When I started working at WEG in this first phase, I started working in 1989.
At that time, WEG was already selling products to 50 different countries, and 20% of our sales were export sales. Then we started the second phase. I started working in the company. At that time, the founders started then working on the board. Together with the board members, we started discussing what would be the next steps. We started understanding that the representation model was very good. It was important. It is still important in smaller markets. But these guys thought that they were the owners of the market. Well, those who sell are the owners. Those who manufacture, well. Where will the results be? This is important.
Then we thought, okay, let's start be there in the market with distribution companies and sales companies of our products, which our teams have our own teams there to have our inventory there and our pre-sales and after-sales services went to U.S.A., first to Florida, which was easy for us. Florida first. Then we took two people there. We rented two desks. It was not a room. We rent two desks in an office. That was step number two, Europe. Let's decide what we're going to do in Europe. The common European market was just starting. There were many countries there. Belgium, the headquarters of the common European market. Very soon we found that the biggest markets were France, England, and Germany. As you can see, in the first few years, we opened many branches there. This was the phase where we started our sales offices.
The next step in the years 2000. This is like a curve. Then it flattens. The growth curve flattens, as it usually happens. Then we thought, "Well, maybe it's time to have our own manufacturing site there." In 2000, we had an opportunity of acquiring or purchasing a factory in Argentina. They had more manufacturers of electric motors there. Argentina had always been more fragmented. They had more companies making that type of product. We had six motor manufacturers here, and Argentina had 10 motor manufacturers. Then we purchased the last one in 2000. The last plant. Then we acquired that Argentinian plant. In the same year, an international competitor put one plant for sale in Mexico. We purchased it because this was the logic of geopolitics. Mercosur started, so we were in Argentina.
If Mercosur common market didn't work, anyway, we would have a position in Argentina, and Mexico was close to the U.S.A. That thing of NAFTA, ALCA. In 2012, we thought, "We have to go to Europe as well." Then we acquired a company in Portugal. I think that the big decision, an important decision made by WEG at that time was in 2004, starting in China. Someone asked me yesterday, "What would you do new if you start-- Would you have started earlier?" I would acquire a plant in China a little earlier than that. Do you have any regrets of having acquired such a small plant in China that year? This is my regret. We went to Asia anyway. We went to Asia relatively early, and that was really important. These were the three phases. We started exporting early and developing products.
Then slowly we learned how to work with our customers abroad, with the branches. Then we started manufacturing our products in these different countries. People would joke I would buy a plant for BRL 10 million, just the minimum, and then we were concerned. Well, we have to be concerned not only with the price paid, but with the risk. You have to take the risk. You have only to take the risk you can do something about. This was something that has always been key in our history. Then I started working as an executive. You know very well our merger and acquisition strategy abroad, always with a very clear focus, either having market access or access to technology, having a balance between both. Sometimes you can do both together, market and technology. We made all those mergers and acquisitions, and then I joined the board.
Harry comes and replaces me, and he had a bright career, and he sped up M&As in our company, and he went on acquiring these new plants and so on. This is the WEG, as you know today. 69 manufacturing sites in 18 different countries, and sales operations and technical support in 44 different countries to provide services to our customers in these different countries. This is our strategy. Expand our product portfolio and expand the markets. We do that continuously. Now I'll talk about WEG's management culture. This is our strategy. Yesterday, someone asked me, "Well, soon transformer, this big growth in transformer will soon be over." We've been through many ups. When we had a blackout with simple generators, then sugar and cane cogeneration. We had even a shipping industry when Petrobras started with the supply boats.
We have been through different growth cycles. What we need to pay attention to, and always be looking at, is where the market is heading and where you have ability, knowledge, and know-how to look for the markets and target the markets that are more dynamic. I told you all that to tell you that WEG's management culture has some aspects, and I'll make some comments. Long-term vision, customer focus, people development, participatory management, operational efficiency, productivity, efficient capital allocation, ESG, health and safety, principles, and ethics. Long-term vision. Founders were always ahead of their times. We started doing strategic planning like 40 years ago. In the long-term vision, you have to look at a set of different things. We talked a lot about markets. We had a long-term vision for that, and then we have execution. Then there's something really important.
Who contributes the most to results? Is it the strategy or the execution? In the past, maybe the strategy, that information, before the internet, were really hard to get. We used to say something when I started working here, "Those who hold information hold the power." This is what people used to say back then. Have you ever heard that? Who doesn't have information today? Those who do it earlier with lower costs, those who better meet their customers' needs, execution, those surely have a greater chance of winning. This is every day's struggle to do it earlier, at a lower cost, and really try to meet customer needs, having a global vision. I talk a lot about markets, how we built our markets. Operations/technology. We talked a lot about building our portfolio.
When Harry became the CEO 18 years after me, he became the leader, did we know data centers would exist? If someone told us back then, the biggest power users will be computers, I would say, "What do you mean computer? I have one at home. I don't even have a transformer there, and it works." Back then, nobody was aware of that. Technology is developing very fast. We have to be fast too, in order to be able to adapt to these changing needs. So that was operation. This is the plant in China. We bought the first little plant there, and then this plot of land, and we started this long-term project. Each empty plot now has a building and know what are the probable facilities that are going to be found there.
The large WEG plants in Jaraguá were the very foundation of it all, like in Linhares as well. We know, and we had a vision to build it all, and every little place, every little facility has its own place. We have to build three things. We have to build product and technology and to train people. This is a process. Today, we have 2,600 leaders, and 500 more leaders will be needed in the near future by 2030. This has to be planned, developed, upskilled. This is what we are all about. Client focus. This is the organizational chart of WEG. The CEO and its VPs.
Two things I would like to say. Why have I shown you this organizational chart, and how does it connect with client focus? Everyone has the client, the customer at the heart of it. The CEO has to be the most important seller of the team. I myself was one. Harry and Kuba is one now. Everything starts in the market, and then we start building everything else. You can see 12 people here. It is nine -to -three split. It is product, technology, operations, and market is the person who is in charge. The other three guys, who usually would be staff, are also gearing towards the market. Rodrigo, who deals with industrial motors, Vice President of Sustainability, has to travel often to Brasília and sell one generator to the Navy and so on and so forth. We are salespeople after all.
Juliano, who is VP of HR has to be in touch with universities and sell equipment to the technical schools, the vocational education institutions, and WEG has to be in their top minds. André helps in coatings and varnishing. Rafael also helps that in coatings and varnishes and he is the one in charge of that. I skipped coatings and varnishes. Why are we showing coatings and varnishes? It is a supplier of WEG, and 50, 40% of the WEG coatings and varnishes revenues, Heresite Protective Coatings, that was the company's name there, was in a bad phase. He provided the coatings, and the varnishes were insulators as well. That is how things played out with coatings and varnishing. The other thing about having client focus is that the company has to think with the customer's mind. We have to manufacture things that the clients want, that the customer wants.
I recently read a book. I bought it off Amazon, and it is about the Amazon culture. Number one item is obsession for customers and to have the outwards, inwards vision. This is what WEG does very well. People development. Sometimes strategies derive from needs. Jaraguá didn't have vocational education institution, nor universities. The three founders traveled in 1970 to Germany to seek technology, and they developed a strategy. They were ahead of their times. They went after technology. The standards back in 1970s were inches, feet, and stuff, and the standards were all U.S.-based. In Germany, they bought the technology for the motors, IEC motors. Moving away from the inch system and adopting the metric system. We have to influence, right? They did it, and this was crucial, very crucial in our development.
The vocational education institution started in 1980. I was just playing soccer. I never thought about becoming an engineer. My father went to Charqueada schools, and he promised to support some schools financially. I had to enter this group, WEG School. We have already trained 2,661 students. This is our number of alumni. 2,600 of them are in WEG, working at a company. I was a student there. You will find there many managers and division managers. It is a big factory of people. In the trip to Germany to seek technology, they visited schools, vocational schools there. That is why they returned and put together this vocational institution here in town. Again, in those days, it was for teaching coiling and machining for training people, basically. Little by little, over time, the backbone of culture, of WEG culture, was there.
In the school, they stayed three years studying about WEG culture and products and hands-on exercises. More than just learning about technology, they know it, and they know WEG culture. There is a very strong relationship with this company. The leaders that you see on screen, all of them have different characteristics and similarities, like the founding fathers, which is good. It is diverse. Three of them are engineers. Three of them, the first job they got was at WEG. They knew 72 hours before taking office that they would become CEOs. They had just three days to decide if they were going to accept the challenge. The three of them are engineers, as I said, differently from the founders. They do not speak German. That is the only difference from the founders, okay? What is in common? What is shared? The VPs, what do they have in common?
Two of them came from the market, from other companies. André and Virginio, and other directors, 80% of them came from the market, which is also good. It is in people management that lies the secret. We make mistakes, of course, but to make the most relevant thing for the organization, meritocracy, to make an effort to pick the person who is the best for the company for that particular moment, that job. That particular moment the company is going through. Others are also good, but maybe at a precise moment, that person is ready for this. When I was picked to become the CEO, my father kind of did not like the idea. Mr. Eggon had a quote, would go, "The person who is prepared to be promoted if there is someone better than you in the team." This was the challenge.
The other one, "I work with people who are more competent than myself." Do you know how much it costs for a company to pick a manager, a director? The wrong one, I mean. Considering the internal team, do you know what it means in terms of demotivation if the choice is wrong? Participative management. This is extremely important. Having started with a tripartite strategy for collective decision-making, people who work with many committees represent an advantage to develop people, to have a holistic team. A team which has a holistic vision of the company. The company as a whole is crucial because a group discussion, teamwork, cannot have winners or losers.
So at the end of the day, the best decision has to be made, but people involved have to have the opportunity to voice their concerns, their ideas, which is really helpful. And we develop people. Operational and efficiency and productivity. I will get back to the execution thing. It is no use making sophisticated execution plans if there is no competitivity and competence. We have been working since the very beginning with AI and robotics, but training people to make more and better every day. Efficient capital allotments or allocation. I will tell you two brief stories, okay? Investment allied to the strategy. So where are we going to place our capital? Financial discipline is something really relevant as well. And in terms of financial discipline, throughout my career, before becoming a CEO, I worked with product in the shop floor.
I developed technology for contactors and so on and so forth, and relays and so on and so forth. That was a challenge, technical challenge I had. Then I moved to the commercial department, and in my career, I had not had financial and administrative experience as a director. There was the market guys, and they would ask me, "What about this cash flow here?" But I developed something like, "Let's hold a financial conversation here." Well, I can learn the scissors effect and so on and so forth, but we are in Brazil. We have to fund ourselves. If we do not have a good debt, your cash flow has to be the one that is most opportune and return on invested capital. I started out in WEG working with quality as well.
In quality, my boss said, he was an engineer, and he handed me a questionnaire, a form. Remember, three copies. Well, this is the most important thing is return on investment. If you need a perimeter that would cost BRL 700 or a clock or a meter, you have to fill out this return on investment, BRL 1,000 investment. The founders left this as a heritage, as a legacy, as a culture. Return on Invested Capital is the most important metrics for short- and long-term investment. More than, there is just three such indicators, but return on invested capital is the most important one because it has to do with growth. And if return on invested capital does not deliver what we expect, everything goes down the drain. Everything goes down the drain in the company. There is no metrics other than this. It is return on invested capital. That is it. ESG.
I will not refer to E, to the environment. We take good care of our community. We are in the manufacturing business, and it goes without saying. But S, I will refer two things about the social element here. One of the things that makes us proud at WEG, Jaraguá had 23,000 inhabitants when we started. Today, we have 200,000 inhabitants, and their standard of living is among the best in the country, and safety as well. Linhares, when I visited the purchase of the plot of land, I thought, "My gosh, today we visit Linhares and it is a town, a very well-developed town." It has like 3,000 employees in Linhares. In China
I told some here last night, we did not transform China. China has helped transform ourselves. It was a small business back then. We do not have islands of excellence here. The whole ecosystem here has to have the same standard. This is the main thing, what I was going to be talking about, G for governance. What do you consider to be governance? Well, there are all those rules which we try to understand. We are no market, we work. Governance is really important. There are three main powers. We have the assembly, the shareholders meeting. The controller will decide, and we will talk during this meeting. They will choose the board members. The board will then take on all their responsibilities, all responsibilities, not less or more. Someone do more than they had to.
The board has to do everything they must do, but not less or more. It is common, WPA Participações e Serviços is an investor too, and I am there as well. We have to look at all that. There are many companies where the CEOs take the place of the board and take them together, and in other companies, the board will take responsibilities of the directors. This is the most important thing in governance, not doing less or more. You have to take care of our employees' health and safety. Two quick things. At the time of the founders and when I joined, we back then had 6,000 employees, 40 physicians, and I do not know, 30 dentists. At that time, it was about improving the quality of people's health. This is what it was all about. Today, things are different.
When I started working and our directors, they are invited for regular medical checkups. We do that every single year. They stand in line to have their annual medical checkup. Safety, of course, we have to take care of people's safety. Our principles and ethics are not only values, but they are a non-negotiable commitment. This is something we take very seriously. Just a little about that. That was a little bit of WEG's history and culture. I close by quoting Kuba's words, and as he is, I am very confident, too, that these principles and values and that this backbone that has brought us so far will take us forward. Okay? Thank you all very much for your attention. Thank you very much for your presentation. Always very inspiring words.
Now I would like to invite André Luís Rodrigues, our Administrative Financial, our CFO, who will give us a financial update. André, the floor is yours.
That is a very big challenge coming up the stage after an inspiring presentation. I think this is the differentiation of WEG. We drink out of this culture every single day, and these are the motivators to make this company always a better and better company. I will be talking a little bit about our performance. My presentation is broken down into three parts. First, I will be talking about first half performance, and then an update of our main investments. In the end, capital allocation, showing that the financial discipline that has brought us so far is still intact. First half revenue performance. We had a drop in our revenue, 3.3%. Revenue was distributed in 61% the international market, mostly in six months, 39% domestic market.
I think that an important highlight was revenue in the foreign market. We had a 54% growth in the foreign market, showing that industrial investment and our internationalization strategy is working very well. When we look at this performance, for a company that is trying to continuously and sustainably grow, this is not a very usual performance, but in a way, we were already waiting that for two different things that have impacted our performance in the first half. First, exchange rate conversion of our revenues abroad, and secondly, the performance of the centralized solar power generation, very strong in the first half 2025 compared to the first half this year. When we compare our four business units, again, we can see that the diversity of our products and participation in different segments, different markets, in a way, helps us offset this impact.
Starting with industrial equipment, which accounts for half of our revenue. Here we have investments related to industry, industrial automation, with a portfolio of electric motors, gearboxes, automation, electric mobility. Growth both in the foreign and domestic market. Domestic market was the highlight, as I mentioned, in the company as a whole, but it shows that industrial performance outside Brazil or our internationalization strategy is going very well. If we consider a growth in US dollars in the foreign market in the first half, we would have a 15.9% growth driven by performance in many different areas where we operate, particularly in the U.S. and Europe. Segments such as oil and gas and data centers, ventilation and air conditioning for data centers. Then performance in electric motors and gearboxes scattered in many different segments. Positive highlights for electric mobility, and also industrial automation business.
Now for GTD G eneration, Transmission, and Distribution, which used to be a highlight due to our exposure of products and energy transition driven now by AI solutions, but is demanding a lot from our products. Here we are talking about transformers, substations, wind power generation, solar power generation, hydropower, and thermal power, in addition to our generators. The domestic market, as I said, was impacted by the centralized solar power generation. Actually, in the first half of last year, we had the best historical performance of this business in our company. But on the other hand, we have substations and foreign markets. Nothing new, T&D, good portfolio. Together with that, business performance in generators in North America, still very positive. We will have the opportunity to talk about that during this presentation. Commercial appliance motors, MCA.
In Brazil, we had an impact of the interest rate cycle and drop in demand for durable goods in the foreign market. Positive performance, particularly in the U.S. If you consider the effect of exchange rate in US dollars, we would have grown 5.4% over this period. Coatings and varnishes growth both in the domestic and foreign market in this six months. Consistent performance in both markets. Talking now a little bit about revenue and our results. In spite of a drop in our first quarter, when we look at the big picture, the revenue in this historical series has multiplied fourfold. We ended 2025 with a revenue of BRL 40.8 billion. A highlight here is in the lighter blue here. 2016, we had roughly BRL 2.7 billion produced and sold abroad.
In 10 years, we multiplied that by virtually six times, sixfold, going to BRL 15.4 billion, accounting for 38% of our revenue. That was the result of a strategy to expand our product portfolio internationally. At the last WEG Day, Kuba talked a lot about that. This is very positive because it makes us a bit closer to our customers, mitigating risks related to tariffs, exchange rate volatility, and supply chain. It also helps us take market opportunities where these markets are being established. During this period, we had a growth of 17.8% on average, thanks to the way we manage our main three ways of growing. First, which is called more and better, which is to continue creating and finding solutions or alternatives to grow with our mature products. The second is internationalization. Finally, capacity WEG has to be constantly developing new businesses.
I think that the other important message here is to show you the progression of our operating results when we start expanding internationally, facing crisis, geopolitical conflicts. If we do that, if we are able to do that in the past three and a half years, we maintain operating margins at a level above our historical averages. Now investing to growth. The company is going through its largest investment cycle in history. A cycle that is providing or bringing growth to our company. When we look at what we invested in the first six months of this year, BRL 1.4 billion, 6% above what we invested in the previous year. For a budget of CapEx of BRL 3.6 billion, we are below the half of the six months. Historically, we would invest between 3%- 5% of our company's revenue last year. This year, we are beyond that.
We are above that to take the market opportunities that are there. For instance, in transformers. I will give you more details regarding these investments in the next few slides and to continue with our international expansion. Our investment focus is still internationalization, expanding capacity, and modernization and automation of our manufacturing units. Let us talk about the main investments of our company. First, an update of an investment, and we showed this last year. We have been advancing faster now in the internationalization of coatings and varnishes. In the middle of this year, we finished this investment of BRL 100 million in our new plot of land, which we bought around three years ago. Atotonilco de Tula in Mexico, built area 5,300 square meters . We finished that this year. In Mexico, we already had a powder paint. Now we have liquid paints.
Complementing the acquisition we did in the U.S.A., Heresite Protective Coatings, which is a specialty business in terms of coatings. Low layer, high resistance, high strength, and they make markets HVAC and have another vendor for data centers. Now transformers that go through a greater investment cycle in our history. Investments of six sites at the same time, simultaneously. This is a new plot of land. On the right side, we have the paint, the one I showed you before. A built area of 33,000 square meters, BRL 765 million investments to be completed in the first quarter 2027. Here we will make large transformers for the U.S. demand, where there is the greatest unbalance between supply and demand. Also, in transformer outside Brazil, the new plant or site in Colombia, 23,000 square meters, BRL 109 million, first quarter 2027.
Another site in Brazil and a strategic area of Colombia, and the focus here is to have middle-sized transformers also for the Mexico market and the Central American market. Last year, we announced a new expansion in one of our sites in the U.S. This is the special transformers plant, which makes the equipment for BESS and renewable energy. In addition to an increase of 50% in capacity, this investment will also bring modernization and automation for this site, for this plant. BRL 430 million, first quarter 2028. This is when this will probably be completed. Now, Brazil. Strategic investments in Brazil as well. When we look at the different colors in the roof, this is expansion of the Betim site in 2026. Total built area is 75,000 square meters. This unit will become the largest T&D site WEG in the world.
It will produce equipment the size of the ones we have in Mexico. Very big transformers for the Brazilian market, South American market, and African market. Itajubá plant, doubling this plant. Current transformers and other transformers. This is a strategic investment because of this expansion. As a result of this expansion, we will have greater capacity to internationalize this equipment that are made, these transformers that are made in Itajubá. Last one in transformers, the investment in Gravataí, completion for quarter 2027. Built area is 7,300 square meters, BRL 128 million invested. Here we are going to be making transformers the same size as the ones made in Blumenau. Medium power for big utility companies in Brazil and Africa. There she talked about Linhares. This is just part of the Linhares plant. Investment is more related to verticalization that will bring WEG more competitiveness, reducing risks of the logistics chain.
The new wire site, second quarter 2027. BRL 160 million investment and a built area of 14,000 square meters. I do not have to say how strategic this investment is. Last Friday, we announced increase in capacity and investment. Originally, we wanted to produce 2 GWh . We have increased, expanded to 4 GWh investment, BRL 330 million. Completion third quarter 2027. We already feel an increase of order intakes for microgrid projects, utility scales, and industrial applications. We are getting more and more orders. We have a significant expansion of our capacity, dedicated, automated, that will have Brazilian-made products, decreasing risks connected to imports, and also very important, bring competitiveness for the Brazilian industry in this particular segment. An investment that has been recently announced. We acquired an area of 734,000 square meters to build a manufacturing site dedicated to big rotating electrical equipment.
The first phase of this investment is a built area of 58,500 square meters, BRL 900 million invested, and third quarter 2028 is the planned completion. This investment will allow WEG to expand the supply of big equipment, will also provide more technology. Here we are talking about more added value. This is what we are talking about here. We are talking about synchronous motors and high voltage equipment, et cetera, in addition to services related to wind turbines. So this will bring us scale, gains in operational efficiency, and as a consequence, greater productivity.
The other strategic investment in China, we are moving towards the high voltage business. In the upper part of the picture, you can see our low voltage unit. This, under construction, is a new medium voltage, 30,000 square meter, BRL 360 million investment. On the second quarter, we are about to finish it. Generators. On Monday, we have announced a very important investment in North America, BRL 840 million in two steps for generators. A lot more information will be provided about this, so I will not dwell on it. The allocation of efficient capital. We have two pieces of information, how much we are going to invest and where. Now, are we investing well? I will try and answer this to you. First off, our managerial model allows us to generate cash to invest our own business. 78% of our EBITDA was converted into operational cash.
Of course, in some moments, we faced a situation where we had to be resilient, like in the end of 2021, early 2022 with the pandemic. We had to beef up our stocks to continue developing the market, but very fast, we got back to this average again. This is an example that shows that the company's management is very close to its financial performance. The most important thing is highlighted here. In June 2026, we had our net cash of BRL 3.7 billion. The company is able to finance its own investment by preserving its balance sheet. Dividends to the stockholders, of course. The most important performance indicator, return on invested capital. We continue to invest with discipline.
Over the last 10 years, we are generating return on invested capital and increasing the capital, which is proof that the company is making good decisions and investing on the right sector. We are having an exceptional ROIC performance, and our goal is to continue delivering healthy return on investment above the market averages. Two take-home messages here. The continuity of investment, as I said. We are having the best cycle in our history here. WEG has been able to anticipate its own investment cycles. The example of transformers, for example, we started investing a little earlier than this cycle picked up, but also the generators business, João Paulo will talk some more about it. This holds true for BESS as well, new businesses. This increase in investment will allow us to meet our customers' demand.
Thanks to this investment, also, we are going to unlock what is preventing us to grow, which is productive capacity from 2026 onwards. But generators, be manufacturing more units, new facilities, and we are going to get back to our growth by the second semester this year. To conclude, we are doing it all with very healthy operating margins and return on investment. Company has been able to do that, making good choices, and this is thanks to our competitive edges, verticalization, scaling up, very solid industrial strategy, and our ability to develop programs that grow our productivity by reducing costs and expenditure. Our goal is to deliver ever more Return on Investment Capital and to have a performance that is high above the market average. Thank you so much.
Thank you, André. Now we are breaking for coffee.
Those of you who are following us online, we'll resume our activity at 10:30 on the dot. Thank you so much.
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Welcome back. I now invite to come upstage our VP for WEG Automation and System to talk to us about the portfolio for data centers.
Hello, good morning. Good morning for those I haven't greeted yet. As this introductory video showed, I will talk about WEG data center portfolio. Okay. Why is this market booming? We live in a totally connected world. New 5G networks bring more speed and expand the volume of data. IoT devices and sensors continuously generate information. Processes and services rapidly migrate to the digital world. Modern applications require stable infrastructure. AI increases demand for capacity and performance. The very heart of it all is the data center. When we look at the typical structure of a data center, where do we start? We start with the infrastructure proper, the substation.
The data center is a large consumer of power, therefore, needs a substation. Then we come to the electrical room, the E-house, where we have the medium voltage transformers and the switchboards and the bars. We use shielded bars and buses, excuse me, shielded buses. Then we have the technical corridor, the generator room. Tony will explore some more about the generators, groups, and here there must always be a redundancy, therefore, many, many generators involved. Then the monitoring room and the data hole where the servers are. Also we have shielded buses there. Then we have the chill water plant and the firefighting house. So this is the very basic elements of a data center. Types of data center. So there are numerous types of data center. Depending on the type, it will depend on the power, density required per rack.
Starting by the edge computing ones. These are the ones installed close to users to reduce latency. A good example of this type of data center is B3's, which must be close to users to reduce latencies. Then we have on-premise enterprise data centers, which are installed within the company premises and under its full control, like WEG's. Also colocation so that information is contained there. Then we have the colocation retail data centers or wholesale and retail colocation. These are companies that construct data centers and rent out a full data center or part of it to a certain company. These are examples of companies that build this type of data centers. All of them mentioned here are customers of ours. Then we have the hyperscale AI inference data centers and training data center.
The difference is that the inference are those who execute AI-trained model. Already AI-trained models, AI models, that is. They have huge consumption of energy. This is just power density, the average power per rack in each one of the different types of data centers. As you can see on screen, power varies per rack from 10 kW per rack to above 200 kW per rack today. Hyperscale AI training will be a lot more than that, and this has been increasing a lot, more than 500 kW per rack . The trend of this higher power per rack will require new technologies. For example, 800 VDC, volts of direct current, power supply that has been mentioned in some publications. This application is nonexistent as of yet, but is a trend that may occur in the near future.
Just for you to have a comparison, in Brazil we have 215 data centers, whereas in the U.S., almost 4,800 data centers, which shows there is a huge potential in Brazil for building data centers. Especially because around 64%, approximately, of the information in our country are processed overseas because of lack of processing capacity. The good piece of news is that REDATA has been approved in September this year, which undoubtedly will encourage new investment in digital infrastructure in Brazil. Therefore, it will bring tax benefits on the purchase of equipment, components, and services for data centers. These components, servers, which are mostly all imported, will pay no import tax. Energy, 100% of electricity demand from renewable or low-emission sources. This is a major opportunity that will speed up data center business in Brazil undoubtedly.
Many projects that were awaiting this context will now start being implemented. Who are the market players involved in the data center business? The construction of a data center start with EPC, Engineering Procurement, and Construction firms. Excuse me, the design firms, and then the EPCs, those who build the data center proper. Some of them also operate the data centers or parts of it, as I showed you on the previous slide. Then we have the vendors or OEM, Original Equipment Manufacturers, which are around the data center ecosystem, like the chill water providers, the generators, also the data center operators and the end customers. This is basically all the ecosystem that revolves around the construction and operation of a data center. We are operating in all these fronts to provide our products and solutions. The screen has changed but not over there. What happened? Oh, yeah.
Let you know. Okay. This is another important piece of information. The Phase 1 in the construction of a data center that involves us is electrification of high voltage. The first contact we have is with those who buy or construct the substation. This is Phase 1. We are negotiating with the end customer. Then we provide the substations, the transformers, the electric switches and rectifiers and all the other components and protective equipment. This allows us to participate in Phase 2. By working on Phase 1, we know who the players are, who will be acquiring the pieces of equipment for Phase 2. In Phase 2, we have medium and low voltage. Here we have also electrification and critical power, the shielded buses, E-houses or critical power, which are the modular UPSs, PDUs, RPPs, which are the remote ones. Then we have shielded bus.
The first phase of Phase 2, electrification and critical power, we also sell it directly to our end customer. The cooling part, which is the chilled water, all the cooling processes, our contact with the vendors of machinery. So our supply is of motors, drives and controls and paints. All the ancillary services like generators, motors, drives, controls, paints, varnishes, and so on and so forth. This will be tackled by Fumo and João Paulo. This is the roadmap of WEG products and automation. Further details will be provided by my colleagues. The important thing to mention here is that we have products and solutions in components, LV panels, and medium-voltage panels, busways, rectifiers, UPS. We have a portfolio to meet the demand of this data center segment. We have a very consistent portfolio and roadmap. Do we have it all today?
No. But we are getting ready to have an extremely robust portfolio by 2030. Some technologies that are not available in the market as yet, like SST, Solid-State Transformers, which is in our radar. This is just a breakdown of what I have just told you, what we have today in this automation portfolio. It does not mean that this is all going to be available by 2030. We have products and services available already to meet and supply all the demands in the data center, of a data center. Now, I am going to call Carlos Prinz, who will talk to us about transformers. Then I will get back at the end.
Okay, good morning. Well, I will talk something about the portfolio of transformers and substations for data centers. But before that, I would like to tell you that all electric circuitry, complex ones, necessarily need substations and transformers.
It can be a simpler electrical system, low voltage one, or medium voltage, or even high voltage, 69 kV and 139 kV, or extra high voltage, 230 kV, 345 kV, 440 kV, up to 550 kV. The easier example for us to understand the need for transformer is that any energy grid from generation and distribution, transformers are required, necessary, to deliver the power to the end consumer. WEG, as you know, has a full solutions and products portfolio for the energy grid. In data centers, it is not different. We also have a full portfolio of products for data centers in all sizes and for all types of data centers. I will briefly show you this product line and also share with you how we are prepared for this new investment wave to meet the demands of this market.
Basically, these are the products that we have to offer data centers. Pad-mounted transformers, dry-type transformers that are in the E-house. The investment we have been making over the last years meets perfectly these needs, not only in our utilities business, which is important in transformer business, but also for data centers. Like pad-mounted transformers, they are in the scope of our special transformers plant in the U.S. that we are starting investing to enhancing 50% the production capacity over there in the U.S., in addition to automating this production line. This is the most automated transformer line, production line we will have in the world, and getting ready for data centers. We have dry-type transformers, which are also used in E-houses. These transformers are produced for South American market, Brazil especially.
Investment on a new transformer plant in Colombia also has a full range of dry-type transformers to be manufactured in South American market, but also aiming at data centers in the U.S.
We have bigger transformers, up to 500 MVA, and substations with power coming from any grid in expansion in Betim, and also the new plant in Mexico, Atotonilco de Tula. They are being prepared to, in addition to presenting solutions for the grid, also to provide equipment to major substations supplying to data centers. Substations in Brazil, we have our business center for that, where we have full solutions for the grid and also for data centers up to 550 kV. In Mexico, we also have our substation business center considering this data center business. As you can see, this data center wave that is coming, and it is already a reality for us. I am going to show you that in the next slide. It is being followed by all required investments so that we can really meet this growing demand.
Just to give you an idea how we are advancing in this transformer business, going to the U.S.A., our order intake in general in the transformer business in North America, 18.5% of these orders first half of this year will be used in data centers. This is, for us, already an important and key business. Now with increase in the capacity, we are delivering, as André showed, with the new investments in most of them now in the end of 2026, and the other part of the investments during 2027, they will be made so that we can really face this growing demand. Next, I will show you that we are not strong only in the U.S.A. in data centers. We have important businesses in South America, Uruguay, for example, in Mexico, in Colombia as well.
For us, data centers within WEG T&D business scope is extremely important, and it has been growing. Now I am going to show you a few cases. We have already supplied transformers and data center solutions. The first one in the state of Ceará in Brazil. This is in the Brazilian Northeast. This is a data center where we had an opportunity to deliver all transformers and supply all transformers for the control rooms and power, and for the dry-type transformer. We are talking about machines of 3.75 MVA. A robust transformer. It is a lot of accumulated power. We also provide the 124 transformers for the electrical room. I cannot give you more details because we have a non-disclosure agreement with them. A second example of transformers for power rooms. This is a data center located in São Paulo. Dry-type transformers as well, 26 of them.
If you look at WEG Transformer Fleet Management, you have on both cases, WEG Transformer Fleet Management means that these transformers are smart transformers already. They have all digital solutions embedded, so they are monitored online by the customers of the health and the service life of these transformers. This is all being monitored and followed 24 by seven. Going to other countries, we brought you two examples here, important projects in the U.S. This is for very big data centers in the U.S. The first project, I cannot give you more details, but anyway, the project one, this is a data center and now 138 kV. Entry of power supply. 23 transformers of 70 MVA each. The second example, even larger transformers, eight transformers of 250 MVA each. Complex type of machines for really big data centers. Two additional examples, this time in Mexico.
We supplied to this data center all transformers for the electrical rooms, 14 in total. Big 3.3 dry-type supplied from Colombia to Mexico using our Colombia hub to supply to North America. The last example, project number three, high voltage transformers, 75 MVA, 250 kV. This is pad-mounted transformer, so the full range of transformers for this data center in Uruguay. This is basically what I had to show you. Now I would like to call João Paulo Gualberto da Silva, who will be talking about power generation for data centers.
Good morning. I will be talking a little bit about power generation for data centers. Historically, servers need emergency generation, backup power. Imagine the data center here with this whole infrastructure, but the only thing it does not have is this here, transmission line. Usually, data center is supplied by the grid, by the power grid.
The problem we have today is that there is not enough grid. There is no power coming to the data centers to supply the data center. That is a serious problem. I am talking about U.S. They have over 4,700 data centers, and many have been announced. One of 4 GW, another one 5 GW of power. Without the possibility of connecting to the grid, because the grid is not able to supply all this load, hyperscalers and developers are trying to find They are using on-premise power generation, either by the data center, close to it, or in the data center. This is where we have very important opportunities for the power generation business. Today we have, or so far, we have the primary power being supplied by the power grid, and now we will have to have power generation mainly through two different types.
That is why Texas today has been attracting many data centers because they have the natural gas there. Today we set alternators or generators for backup power, and these are usually diesel. They are not good for the main power because we would have to operate 24/7, and there is an environmental issue. We have the generators that are the same, but instead of being supplied by diesel, they use natural gas. Then they can run 24/7. There is another solution, which is through airplane turbines. This is engines, actually. This is traditional one, diesel or gas. Then we have two main family of products. WEG product, and we have been developing a new line starting in 2022 with lower power, then we would migrate to bigger powers. Then we had the opportunity to acquire Marathon.
Some of you might ask, "Well, you have acquired Marathon because you knew we would have a huge need of data centers coming." The answer is, of course, we did not know that. When we acquired Marathon, and we visited them back in 2023, myself, Kuba, and who else was there? André Rodrigues, to visit the U.S.A. plant. They were old-fashioned with old equipment because the previous owner, that was not their business, actually. Then they decided to disinvest, and the plants were in poor shape. When we could have access after the closing, which was in May 2024, we started having contact with the sales people there, and then we realized there were some needs, and then we said, "Okay, let's make an investment of $4 million." We purchased some machines, and the customer said, "You don't get it.
We need much more than that." Then we better understood what the demands were, and then we made many investments. We have made many investments since then. We made a very important announcement recently, which I am going to be talking about later on. If you have an airplane engine, it is for airplanes, and then it is derived for power generation using 30 MW-36 MW. It is like a Boeing 727, A321 Airbus, the GE, Pratt & Whitney, and other types of engines. This is a business that has been growing in the past 12 months with important orders coming to WEG and some indications of volumes that maybe WEG even is going to be able to deliver, because it will require even more major investments.
Anyway, during the break, someone asked me, whenever we have a WEG Day, what comes to my mind is the following, hunger. Because we cannot eat. Everybody is just chatting, but that is what we are here for. Not to eat. We can eat later. Anyway, I need to lose some weight. Anyway, important businesses then. Early this week, we announced an important investment in Mexico. Phase 1, as we call it, BRL 122 million. This is a building. If you look at it, this is the current campus of Atotonilco de Tula, and this building that doesn't belong to WEG, it is for sale. We were even thinking about renting it, leasing it. But then when we checked if it was for sale, and we had a quick negotiation with them because we wanted speed.
We want to produce 10 a day already next year. Production will start in April next year, and we'll ramp up until the end of 2027 to 10 generators of 3.5 MW , depending on the customer, by the end of 2027. Big implementation speed, but it will be an assembly site. We will buy internal and external components from other suppliers, other vendors, and just assemble them. It'll be assembling, testing, painting, coating, and shipment. This is what we are going to be doing there. We announced the second investment, BRL 718 million , to produce or manufacture 20 per day, with starting of production in the third quarter 2028. But why 10 a day, to a 20 a day , a bigger investment, BRL 700 million? Because the second investment will be a verticalized plant. WEG will produce the core.
Blades or plates and low and medium voltage coils and some other parts. But the core products we want to manufacture ourselves, and then we're going to be making 20 a day in total. By 2029 or until the end of 2029, we will probably be reaching 50 generators per day total. That's a very significant amount, but that's important. When we reach 50 per day for the biggest customer of the world, we would represent 30% of their demands. Today it's five, we will reach 30%. It could be much more investment. But I think that's enough for now. A few examples. Here we have a contract for a project in a American state, 4GW . This will require 2,200 generators of 2.5 MW each, 13.8 kV. Maybe this is one of the largest data center projects in the U.S.
Well, my time is almost done. This one is an example. This is a WEG generator. This is a WEG generator coupled to a gearbox in a Boeing 777 turbine. What happens to an airplane turbine after 46,000 hours? It can be recovered many times, but after 46,000 hours, the agency says that it can no longer be used in a airplane, and this overhauled turbine can be used in this application. This is nothing new. For over two decades, we have been selling generators for this type of application, offshore applications where you take the gas from well and passes through this to generate energy. At each oil rig Petrobras has offshore, it uses four engines. This is the power they have there. This is nothing new, actually.
What is new is that is now being used for stationary systems to generate power for data centers that are placed in a trailer, two trailers, one with the electrical part and the other trailer, and then you drive this to the data center, you park it there, connect both, then you have gas supply and so on and so forth. This is how it works.
Thank you. Good morning, everyone. I'll try and stick to the time that was assigned to me. I'll try and share with you here what electric motor solutions WEG has. Manfred, in the beginning of his presentation, mentioned how data centers are organized, where the equipment is located, the areas, and this is an example of the application of electric motors in a data center. In the technical aisle, through ventilation system and air conditioning. We have in the firefighting house, we have specific motors, which are fire pump, chilled water central, a data hall where the pieces of equipment that are processing are, and within the data hall, for instance, and today during the coffee break, we ask: What sorts of equipment do we have in data hall? We have the equipment that is conveying chilled water for cooling. We have CRAH and CRAC.
CRAH being Computer Room Air Handler for cooling the equipment and cooling distribution units, which in the hyper-scale type data centers and high-density power, need to chill the chip of the processes directly. What I want to show you here is that regardless of the type of equipment within the data center, WEG has a solution for each one of them. A very wide range portfolio. In addition, this slide shows where we stand today in the world, especially where the largest data center markets are, how we are positioned to supply dedicated products that I've just shown you in the first slide, as well as traditional conventional pieces of equipment that are also applied. We have four hubs. Brazil is one of them.
Manfred showed you the number of data centers we have in Brazil that we can supply in our manufacturing plant, the Mexican hub, and in Portugal, and China, likewise, to meet the needs of neighboring markets. Basically, within this universe, we have many plants, six plants in 14 different countries, which allows us to cover the globe more effectively. Working with technology, global presence, and with a wide range portfolio of products and portfolios, and solutions, excuse me. This is the first example. This is an extremely disruptive product for application in data centers. It's a lot more compact because it has the solution of having a motor or electronic end control single solution. What is a data center at the end of the temperature control and energy efficient that is being generated for the data center?
The more efficient the solutions we embed in the data center, the better the financial performance of the business as a whole. So it has permanent magnet motor with integrated electronics drive built into the motor. I referred to CRAH, which is a computer room air handler, and chilled water for the data center or within the air conditioning system. Okay. In the cooling walls. And it's extremely compact, so none of our competitors have these products in their portfolio. So this is a competitive edge we have over them. Second example, W23 Sync+ is a WEG solution that we're providing not only with the electric motor, but the drive as well. We bring the motion solution geared towards saving energy. So this is the most efficient electric motor in the world in terms of efficiency, IE5 and IE6.
Number four is the most efficient one in Europe today, and WEG has this offer of 0.75 kW- 1,250 kW. Wide power range, therefore. High technology to solve issues within data center compaction and energy consumption. These are some examples of what I have just told you. They are circulating the cooling fluid within the premises. The losses are much fewer or smaller, and this allows us to adjust energy consumption in the data center. The third example is even more disruptive. This is the picture of a conventional electric motor, W22 vs. W80. This is the conventional WEG electric motor, and this is the W81. Both deliver the same thing. The difference is that this is extremely compact. Now, we are both building the drive and the motor as an integrated or single solution geared towards data centers, and it is a lot more compact. Also, here.
And cooling by any cooling fluid or water. The advantage is the compaction level or compactness, reduced noise of this piece of equipment. Otherwise, we need a lot of mufflers and other equipment. And energy efficiency. It consumes much less energy relative to conventional electric motors. For hyperscale, it is an excellent solution. It is a market solution. Our conventional competitors do not have this competitive edge we have. These are some solutions. We are cutting edge in the market. More conventional-type markets. Conventional technology continues working in the high-technology market. How can we help data center use and maximize their physical space? Through the compactness and control that we provide. We have electronics embedded in the motor and so on and so forth, for the U.S. market. And low voltage and medium voltage with W50 and W60 power.
How do we compare to our competitors? Technology, global presence, and positioning. IE5, highly efficient motors. Two ranges of power, or up to 4.5 kW and 75 kW, which meet the demands of a data center. Colocation data center or high-scale data centers require that. If we observe who the conventional players in the market are, we are in the lead. We are ahead of them all. By 2030, we hope to provide and supply the market, in addition to these induction motors. Not as efficient as the PM, permanent magnet ones, but much higher performance. Permanent magnet motors. We have two ranges, and we are ahead of our competitors. And ECM, which is electronically commutated motors, which also complement the strategy that we have for data centers and solutions for data centers. Some examples. Contracts with pump manufacturers.
We have W21 and W22 motors, 15 HP- 20 HP, 2,000 units in the U.S. Similarly, W30, Slim Smart EC, 5 HP, 9,000 units. We are manufacturing them in the U.S. Also in the U.S., a ventilation system manufacturer contract for the thermal exchange of the cooling system. 1,379 units, one single customer. And finally, 1,300 HP, 128 units. W60 motors. We have the most complete portfolio of products for data centers. I return the floor to Manfred for him to resume the presentation. Thank you.
Thank you. Very well. Resuming the product portfolio for data centers. This is the first illustration I showed you in the beginning of my presentation. Now I get back to this image, showing you the range of products that WEG has available to each one of the data center areas.
Starting with the substation, HV disconnectors, PC, and TPs, the electrical room, the E-house, the secondary panels, medium-term dry transformers, busbars, low-voltage switchgear, modular UPS, battery bank, and so on and so forth. Also used in data centers, this is nothing new, and so on and so forth. We listed here all products that may be applied in each one of the areas comprising the data centers. Last night I was asked, "Yeah, but what's the market that is interested for WEG addressable market?" It is not easy to answer that because it varies greatly depending on the type of data center, if it is a colocation data center, a hyperscale, and so on and so forth.
In general terms, the exercises we carried out allow us to estimate the addressable market is currently and approximately of 15% of the cost of data center facility, which means that the overall cost excluding servers. Servers is not WEG business, but everything revolving around the data center, electrification to make it run is WEG's business. This is an estimate. The key messages to conclude this presentation is that as said here, we have the developments of new products and solutions dedicated to data centers in constant evolution, a very consistent roadmap, a broad portfolio to serve the market, and this undoubtedly is an opportunity for accelerated growth.
Thank you so much. Thank you, Manfred, Carlos, João Paulo, for the excellent presentation. Now, I pass the floor back to Alberto Kuba, our CEO.
What did you think? We try to make it as simple as possible, sharing to you what WEG has to offer the data center portfolio. My mission here now is to be able to structure WEG's mission and how we are packaging and envisioning our business strategy, not only considering data centers, but WEG as a whole. I would like to start by the question that I am asked the most during the meetings. What geopolitical uncertainties, exchange rate volatility, supply chain uncertainty will impact it? How will they impact the quarter bottom line? What I say is that these issues that are occurring here, that were even more impacting last year when there were more uncertainties. Now, on the second semesters, we are going to have another material fact, which is the elections in Brazil. But I would like to show you how we think about our strategy.
When we take a look at the strategy, we never consider it short-term. Décio showed us in the beginning of his presentation, the long-term vision we have. Every time we are going to elaborate a business plan, we look into the future, a three-to- five years' time from now. A plan like the one presented by André took two to three years to be built. It is no use shifting the direction of the company all the time. When we see the three macro trends, sustainability becomes an ever more axis. You who monitor many companies, there is a push towards sustainability, right? Secondly is Energy Transition. Yesterday we were reading a report, and Brazil has a fleet of more than 1 million EVs. More than 700,000 Tupinambá active users, a company we built a partnership with last year. Energy transition is nobody is taken for granted.
We have to find alternatives to reduce greenhouse gas effects in their operations. So energy transition is part of the crucial strategy of WEG. The last one, I would say that from 2022 onwards until 2023, when investment became ever more clearer after the acquisition of Marathon, our business was greatly transformed, so much so that Marathon became one of the most important growth drivers for us. WEG strategies are based on macroeconomic long-term visions, trends that do not change in the short run, and that will also, on the contrary, become growth avenues, and this is brought into the company. One point that was clear to you here, I imagine, is how was the handover from Harry to me. What points we discussed that would be one of the missions I would have was internationalization. I spent 10 years overseas in China, in the U.S.
All the VP team had and acquired international experience. So the foreign market is part and parcel of our growth strategy because Brazil accounts for just 3% of what we envision. If we take into account what are the factors that may promote a major growth or transformation, we get to the point that Décio also underscored, people. A company today with more than 50,000 workers, 52,000 employees in fact. We are talking here about 30,000 in Brazil, around 20,000 in other countries, and in a few years, WEG outside Brazil will be much bigger than here in Brazil. Then it may be a small shop with a little branch or a big company that will have branches all over the world, and the most important thing is to have people we can trust.
The big difference WEG today has compared to WEG 20 years ago when we started going international, is that today we have big leaders, people we trust everywhere in the world where we have operations. We are working very strongly with the human resources department to take care of that, and then technology, which is key. Mr. Werner used to say that technology is the foundation of what we deliver. If we're going to manufacture any product here or sell any product, WEG has to know the technology, and it's not easy. You could see a number of products we showed you today. WEG today has 43 business initiatives today. 43 initiatives for different products that require different skill sets, that require diversified backgrounds, and that's why we have built in technology. By the way, now we have a strategic position at WEG, which is vice president of technology.
We have this position now. So these technologies we presented to you, some of them were part or were not part of our portfolios, or they accounted for a very small revenue, and soon they will lead to significant growth. So we have to be faster in order to bridge technology gaps. I'm going to show you how we are going to do it. Something else Décio mentioned, and we talk a lot about that in our company, particularly after we had this experience in China, is speed of execution. You may say that you're going to invest BRL 1 billion, BRL 2 billion, but will you really be able to deliver? If you look at what we did this year, we focused much more on delivering what we promised in terms of plans than acquisitions.
This is a strategic focus because there are many operations coming on board at the same time, many new plans starting operations at the same time, and we have to make sure that they can start up operationally sound. Another important aspect is competitiveness. WEG is one of the best Brazilian world cases. We have been attending many international meetings, and we present our case, a case of a company that did internationalization in a different way. Many companies became global or sell globally with plants in two or three countries. WEG has 69 plants, and out of the 69 facilities, 50 are in other countries. We have plants, manufacturing sites very close to our customers because we always try to place our customers at the center of our strategy. It's easy to sell, bringing from lower cost countries.
We have inventory, very low commitment to local customers, just taking opportunities. But when there's a change in the market, you may end up losing the business. Someone asked me yesterday, why in a market that is so heated up right now in Brazil, for example, why didn't WEG export the T&D capacity to the U.S.A., considering that the average export ticket is much bigger than the price of sale here in Brazil, as many WEG competitors did? Well, precisely because we always place our customers at the center of our strategies. We have a number of customers. We sell to all main utility players in Brazil. Imagine if one day,
Right, Carlos? All of a sudden, we just told them that we can no longer deliver because we no longer have capacity. If they realize that we don't, that because we exported 80% of our products to other countries, well, maybe this is not the best situation to make money. We could make more money right now, but I'm sure that when things settle down and when we go back to normal in the market, WEG undoubtedly will be the company they will recall and know that they were there by their side in good and bad times. We want to sell to a customer today, but we want to have repeat sales in the future. To close, global presence and brand. WEG is already a global company. We have manufacturing sites outside Brazil. We purchase materials outside Brazil.
We manufacture, we make, we sell to local customers, and we have profit outside Brazil. Our journey now and our marketing team is very much engaged to build a relevant brand outside Brazil. During this journey, we have been building an increasingly stronger brand. We are in the B2C market increasingly stronger, and we have a greater exposure of our brand, but we still have a long way to go outside Brazil, which is the vision of my team. I'd like to show you this map here, showing commitment and sustainability. The first thing, I think that when we look at the portfolio, when you look at our portfolio and to know if the company has a future, we have to look at the risks. When you look at this map here, I think this shows the top commitment of any company to local success.
As I told you, WEG in the 1990s, which Décio showed you, was a company where we started with first distributors. Then we got to know the customers better with the distribution better. Then we had to install plants. This is a very high commitment level for any company. For every plant to get profits, we had to invest many years in processes and people, and people to learn, and teams to learn the different markets and the different countries. Out of the five strategic hubs, namely Brazil, Mexico, China, India, and now Turkey, these are five different hubs, whether domestic market is very big, five hubs in different economic blocks, five hubs where WEG has been investing, not only in manufacturing, but also R&D, advanced application engineering. These hubs will help WEG further grow to meet the needs in different areas of the world.
Locally, many of these other plants we have make niche products. For instance, our Italy plant provides the highest technology drives we have. Our Germany plant produces motors with the highest high-speed technology there is in the world. We have niches of knowledge, of specialty production scattered throughout the world, but the main power our company has is this footprint. Five strategic hubs with strong domestic markets, but the domestic block where these companies operate make a lot of sense. I think they show the whole commitment we have to the present, but above all, it's preparing for the future we're going to build, and we can become increasingly more relevant at the local level. This is a view of the foreign market. As I told you, our main growth driver so that we continue with this continuous and sustainable journey is the foreign market.
WEG, in the past 10 years, managed to reach a CAGR in USD of 12.3%. How many companies grow 12.3% in Brazil every year? I'm showing you a company, a global company based in Brazil that grows at a rate of 12.3% in the past 10 years, which above the COVID-19 pandemic, took a big internationalization leap. Growing in USD, and this growth is of mature businesses. This shows that products are very well-positioned in terms of pricing, technology, that our sales teams can increasingly expand their range of operations, reaching new customers, and that WEG is gaining market share. You can look at any market survey of the mature products we sell, you will never see that 12.3%. Mature markets for some products we have will grow like 3% or 4%, in the best years will grow 5%, and we have been growing really fast.
This year, we are having some issues in top line because of the exchange rate. Anyway, we are growing in USD, but more than we grew in past years, 15.4% growth in USD. First half was great growth, as we announced in WEG Day in all areas of the world, very consistent growth in mature businesses, and that's why we managed not only to grow in terms of revenues in the foreign market. Then we have something that is really key. We grew all these years, and we kept a very healthy EBITDA. I think that growing in sales is pretty easy. You just have to lower prices.
Having results or earnings may be for short term, but now having growth in sales year after year, keeping healthy margins and manufacturing outside Brazil, I think this has to do with a strategic effort, this is something we have been building over all these years. I am really happy with this performance. This is a great graph. I would say that this shows what I said right in the beginning, the culture WEG managed to take with it outside Brazil. Because we travel, we know the executives, they are locals with the same level of knowledge and commitment we have always had here in our headquarters. Now I would like to show you our strategy in mature businesses. It is pretty straightforward, but it is important to stress it. The first three products here, motor, gearbox, and drive. They are our motion drive strategy. You have heard about it many times.
We are doing really well in this strategy. I think that motion drives, which is the main growth focus. We are small with gearboxes and drives. We have been growing consistently. This is where we can take advantage of the synergy we already have, namely selling motors. Here we have a picture of a medium voltage motor and drive. This is really important. We already had a share in medium voltage motor, a very relevant participation or share. We still have a long way to go to reach a medium voltage motor market share. But we have been growing every year, and we did not have a very relevant share in medium voltage drives. We had a type of product that would be for a specific market niche, and in the past years, while automation has a new line, which is much more competitive and broader in its portfolio.
They scaled up our businesses, right, Manfred. Today we sell with the same team, take advantage of the sales synergy we have in the main markets of the world. I can tell you that our market share in medium voltage drives today is the same as low voltage drives or even bigger, considering all the synergy we got with motors. The medium voltage motor, it is easier to sell when you also have a drive. I think this is a great coupling. Then we have transformers and coatings. We have been through many investment cycles, CapEx. First cycle was in WEG Motors back in 2020, 2023, with many CapEx happening. In 2023, our CapEx had an increasing focus on transformers. As we said, we started with increase, and we had significant investments to double capacity to 2028. In the meantime, we are finishing CapEx from PD.
We have very strong capital. Paints, we also changed the level. Coatings or paints used to be very focused on domestic markets. Now we see vertical growth, which is great. Starting in North America, we had a powder plant that was very successful, powder paints. Then we decided to make an acquisition. Last year, we acquired in order to strengthen our participation in coatings, protection paints. This is a company with a tradition and a very strong international penetration. Then a very strategic step, which is building the liquid paint plant in Mexico. This plant will totally change our vision, our focus to supply to the North American market, where we started having warehouses now to store these paints in the U.S. Now our strategy is to internationalize paintings, and we will drive that first. So we went through all this journey, paints and coasters.
We finished a CapEx cycle, increasing capacity in Brazil with new plant of liquid paint in Mexico and this new Heresite Protective Coatings plant in the U.S. Then we have the question, I have heard that a lot, Kuba, where will the next growth evidence coming from? Because if we grow in historical animals, the 2025 revenue was BRL 40.8 billion. If you want to keep two digits, we are talking BRL 4 billion, BRL 5 billion a year. Where will all this come from? It is always a big challenge. Here is to the electrification and energy transition, which I mentioned in the beginning, BESS. We will have a BESS auction in the end of this year. WEG has a good CapEx on that. This BESS plant, we started with BRL 280 million CapEx. Now we decided to expand to BRL 330 million, and that is not only because of the Brazilian market.
We are looking at many other opportunities also in foreign markets. The auction is about to happen next December. Many ask me whether it is going to happen. Will it happen? We think that regardless of an auction or not, BESS is something that is really key to our grid in Brazil and other places in the world. It is important that we go on with that. When you look at it, there are some areas we have been growing a lot. For instance, services, grid stability with synchronous stabilizers, that will be big growth drivers with interesting margins for our future. Another very interesting point, and we are going really well this year. Electric mobility, what is embedded in buses and also charging infrastructure. WEG literally became the main player today in the recharging infrastructure.
In the corner, we have the product which I would say is the segment that is really driving the growth of our company as a whole. As you could see today, data center, all the opportunities we have in all different business areas. What is interesting about the data center business, when we look here, transformer, motor, and drives, they will really benefit a lot from this data center business. Generator, and Paulo talks about generators for data centers. This will really boost our potential revenue. WEG will go on growing as it has historically because our whole strategic planning is properly designed for that. A company such as WEG will never grow 50% or 60% a year. Why is that so? Capacity. You agree? You cannot make a plant with 50% or 60% availability every year.
They start up, we have CapEx, then we have capacity, we open a new line, we expand, and this is how we think is the right way of doing it, doing so responsibly to keep high return levels. Someone asked me yesterday, "Well, if you have more market, why are you going to go on investing in T&D?" We could do that, but as we all here are capital allocators, as you also suggest, we would rather allocate capital to things where we also have opportunities, and we have not invested a lot. As for example, in the generator business now, okay? Now I would like to give you a view of how important technology is for a company such as WEG, a company that innovates every year. We have a few situations today that has led us to create the technology VP. Number 1, integrating products and technologies, technology convergence.
Fumo presented a W30 motor that has an embedded drive. Motors. WEG Automation makes drives. WEG Motors doesn't have that, but this is the only product that has both motor and drive. Carlos talked about the transformer. All transformers for data centers were sold already with a control monitoring system, a digital monitoring system. WEG Transformer wouldn't make digital products. It's really important when we talk about technology convergence, it is important to have someone orchestrating this whole thing. We have another very important point that should touch on that. We now are in a phase. In the past, we would launch in Brazil, and we scale up in the world. Now it's different because there are some markets that haven't reached Brazil yet. We manufacture for the foreign market, then bring to Brazil. W30 Motors is a greater example of that.
Many things we're launching for data centers are launched first overseas, and then it's important to have someone like Carlos to do that. Our technology centers are spread around the world, and we have this global management. The other point I told you, digital platforms have to be ever more structured to converse with the same system. A transformer that is hung on the system, a panel, and so on and so forth, everything has to converse. We've launched this program, that digital insight to monitor the grid. Finally, one of the most important points, which is accelerating AI in products. With technical information, more than 420 MBA course hours. We trained more than 50 students per year. There's a large group of alumni. More than 300 AI projects are underway, focusing on operational or operating gains.
Over the last years, we've been deploying this under the coordination of Danilo. We're talking about some machines we're selling, where the worker can interact directly with the machine, which is the trend that we manufacture and create to be able to collect data for diagnosis and to ease interaction with the workers, the operator. Just to show you our footprint. WEG, we have more than 1,000 workers in partnership, more than 30 global universities. Our teams in each one of the countries are part of this initiative. This is a very nice work. It's no use imagining that a company that WEG in Brazil will develop technology. We are developing, we are creating research and development in each of the countries that sets a country apart.
When we're talking about blades for wind turbines in Germany or in India, when we talk about drives in Singapore, and so on and so forth. We have research and development going on worldwide. Just to conclude my presentation. I'd like to show you our leadership. As I told you, the first challenge is to go global and to take WEG ever farther in the world. Last year, 90 executives, ours, were sent overseas. This was the team of foreigners also who came with us during three days. We spent the whole day discussing about culture. We have to have all these people to understand our culture and to take the WEG way of being overseas. That was an excellent activity, really rewarding activity. Still talking about people, recently, we announced a succession plan.
I would like Carlos to come upstage for me to express my appreciation to him. Our WEG Transformer business started in 1981 by acquiring this company in 1981. Carlos has been with us for 41 years, since 2081. Carlos was the first engineer hired that was a transfer from other operations. 41 years at WEG. Carlos built Transmission and Distribution to become one of the largest powerhouses in the Americas. A big hand to my friend, Carlos. Thank you. For you to see how WEG's succession plan is taken seriously. In the first visit to Transmission and Distribution in 2024, I took my briefcase and Carlos told me, "Kuba, I will retire. I will show you my succession plan." Sergio, Alessandro right now, explained his vision and over the two years I have been acting as a CEO, we held this meeting at the board in Mexico.
Last year, Mexico. The whole board had the opportunity to see what the Mexican team has built. I spent a few more days to stay there with Sergio to understand what his vision is, what we are building in Mexico, and WEG always picks the best executive at a given time. Sergio has 22 years of company. He entered WEG 22 years ago. He worked in Blumenau. He was essential, crucial after the Gravataí acquisition for more than 10 years. He runs the show in Mexico, performing this spectacular work. Now that we have the challenge to operate, undoubtedly, this is the best-prepared person, and WEG takes a strategic VP will no longer be in Brazil. This has been moved to Mexico because North America will be our most important market for Transmission and Distribution there. Now we appointed Alessandro, if you are so kind to stand up.
Alessandro is another person developed at WEG. He has been with us for 26 years, our sales director for a long time, and now he will take the job of general PD manager. Alessandro has a wonderful experience acquired in Brazil, South America, and Africa, and now the challenge of operating will be run by Alessandro. I think this organization is now operating differently. Thank you, Alessandro.
We are going to have this passing ball. Well, just very quickly to explain. That is to talk about sustainability, and we have a responsibility to show what we do already. We, last year, approved our decarbonization targets with SBTi. We had officialized Scope 1 and Scope 2, and we took this opportunity together with SBTi to approve Scope 3 and also the Scope 1 and 2 targets or goals. We are doing pretty well until 2025. From the 52% target, we reached 32%, virtually 32%. We will definitely reach 52%, and we have 53.9% reduction value-added emissions, and we have been making comparison. That is based on 2021. Sustainability, WEG has been doing it with a lot of responsibility. Well, some people just talk about it. We do not walk the talk, but we are very careful.
I think that every year we are taking consistent steps. We managed to achieve very nice international recognition, as you can see. To close, my key messages. I think that WEG has always had customers at the center of our strategy. This is key. Décio talked about Amazon. I think that when we put our customers at the center of our strategy, we can never be wrong. I think this is a key part of our culture. Expansion in the international market is our main growth driver and major capacity increase projects in the second, third, fourth quarter next year that will also help us with revenues. Finally, I think André mentioned that in his presentation, portfolio and geography diversification is key and is a strength we have in order to mitigate risks.
I'd like to close with a quotation mentioned by Décio and tell you of a very quick experience I had in India. I have been traveling to many different markets after I became a CEO. Marathon was the last company. When I used to work in the motors division, Paulo and I had a chance of negotiating Marathon. Today, the biggest challenge in the acquisition of Marathon was Kolkata. Marathon operations in India, which it existed since 1938. Kolkata, if you know India, this is a very hard place to operate. Kolkata, many more unions, four different unions in that operation, very old plant, over 80 years, older people, some people retiring, and that was the main concern. I was there one month ago, Kolkata. It's impressive what I saw there. Over these almost 89 years, they were acquired by four different companies. We are the fifth company.
The whole WEG is there. Panels. I saw pictures of the founders, our culture, our code of ethics. Everything is there, and they are all passionate about the company. Marathon in Kolkata didn't hire new engineers for over 15 years. As soon as we acquired them, they started a trainee program or intern program. They hired eight last year and additional seven this year, so 15 total new engineers. Our trainees or interns, all very motivated. We have appointed many managers and trainees because people retired. We've picked the best in operations, and now they are managers. So the level of passion is already there. So a company, in order to succeed, it has to have people who are passionate, people who are motivated, and people who are committed, regardless of the culture, and it doesn't depend on the nationality.
That's why we think we have reached a global pattern or standard of culture that will make us go on growing sustainably over the years. This is the key message we want to convey to you. We are really comfortable with what we have been building, and we are very confident that we have the right teams and the right place to build the WEG we want for the future. Thank you.
Thank you, Kuba, for the great presentation. We will need a few minutes to prepare for the Q&A session. I'll call now Alberto Kuba, André Rodrigues, Rodrigo Fumo, Manfred, João Paulo, and Carlos Prinz for our Q&A session. I'll make you a special request. If you want to ask a question, please raise your hand, say your name. We have two mics in this room.
And when you ask a question, please stand up, say your name, and where you work. We will try to answer as many questions as possible, but we have to follow our schedule regarding the time, because we will have other activities after lunch.
Thank you for the opportunity. Alberto Valerio from [UBS]. Great presentation. A remarkable history. Thank you so much for this presentation. I have two points. You talked about the grid reaching the data center. Do you see that opportunity as well? Would there be another opportunity for WEG, Mexico, Brazil, and U.S.A.? And also regarding what Décio talked about. Do you go to sleep seeing an opportunity, M&A, maybe not, but maybe launching a new product, WEG entering into VDC, the transformer or a different product. You think that there could be an opportunity now that would not be an opportunity later? Thank you again.
Regarding your question regarding the grid- Power going to data center and charging centers in general. WEG has the solution. We have transformers, big transformers, up to 550 kV. We have the substations and these investments we will be completing until the end of 2027. This is actually the goal, to reinforce the grid, both in Brazil and North America. We also know the status of the service life of big transformers in Brazil. All of them are over 40 years old. In the U.S., some are even older than that, almost 50 years of service. So yes, we are getting ready and preparing. Well, data centers, if you asked me back in 2023 when we first started this cycle, was it part of the program? It was not. Well, the grid was because we knew how old the equipment were, but that is the focus.
Regarding acquisitions or M&As, right now the market is really valued, but we are keeping an eye on that. We are looking at it. We are constantly checking the market, and if we have opportunities that make sense, we will be looking into it. Regarding the 800 VDC. Regarding 800 VDC, as I said, this is an application that does not exist as yet, but it may become a trend. So when you have this type of trend going on, what do we do? We do not necessarily first invest or have CapEx for that, for something we do not know exactly how the trend will look like. But anyway, we look for corporations to do that. As I mentioned in that roadmap, this is a product that is already addressable. Talking specific about SST, Solid-State Transformer. The name is kind of wrong because that is not a transformer, actually. That is a converter.
The right name should be Solid-State Converter, maybe. And by the way, this is nothing really new. This already exists, but not for this specific application. So this is something that has already been addressed. It is part of the roadmap, but we are looking for corporations, as we did in other businesses in the past. Just ad ding to what Carlos mentioned regarding M&As or acquisitions. This is something that is always part of our strategy, regardless when. If good opportunities emerge as part of the business initiatives, we are scaling up, both in Brazil and abroad. It is always under our radar.
Good morning. Gabriel Tinem from Santander. My first question is more focused to data center market. You mentioned that this is an addressable market that would maybe generate 15%. I would like to understand more about the product range. You said you want to expand the portfolio by 2030.
Does that include this expansion and the portfolio? If it doesn't, what can we think considering you reach this target by 2030? The second question, you mentioned that maybe you can take some of the BESS business with the auctions and stuff. If this auction doesn't happen, if it's postponed, how will you then postpone this addressing of capacity? I think these were the two questions.
The first question is about the 15% of the BESS addressable market. There we are considering the whole portfolio. The whole portfolio isn't complete today or ready today for all the different data center areas, but it will be until 2030. So 15% is the total addressable market. Of course, a great volume or amount of that, as Carlos and João Paulo presented, is to be found in the infrastructure that is not inside the data center, that is around it.
This is a portfolio that is already full portfolio, and this is where major resources are being allocated to right now. The second question is about the BESS auction. BESS, again, WEG never thinks short-term. We always think in the medium and long term. So regardless of this auction, if it happens now or if it doesn't, we will anyway be ready to meet that demand, because this demand is a real demand. It is there because the grid, our grid, needs that. So we are looking at other areas where BESS is also generating demand together with distributed generation, by the way, C&I applications and so on.
Thank you. Rogério Araújo from Bank of America. Thank you for the presentation. Not only we and the people we have been talking with since yesterday, I think everyone is really impressed with the number of opportunities.
There are many different fronts. BESS synchronous condensers, alternator, data centers, transformers. My question is, for those who have been working in the company for over 40 years, we have been covering it for 10 years. There were other times where you saw so many opportunities together, as we are seeing now, and it seems that there's only good things. Could you also talk about the main risks, the things that may go wrong? I think this is for the oldest one here. 40 years, I think there's just one here that could possibly answer this question.
Thank you for the question. Undoubtedly, the moment we are in right now, where there's three different fronts, sustainability, energy transition, and internalization. This shows this is something really unique for us right now, and this is a possible avenue for growth, which is very good. I think that's it.
I think we could highlight, Carlos, the fact that sometimes opportunities emerge and you are not 100% prepared to go for it. Now, as you could see regarding the mature portfolio, WEG has everything for data centers, transformer, all transformers, including dry type transformers, which many manufacturers make only in a few places in the world. Actually, dry type transformer is one of the highlights of WEG in Brazil that makes us stand up. So in mature business, we took significant steps. What is the good thing about everything that is going on here? I think that maybe never before in the WEG's history, factors aligned at the same time, because energy transition and AI have tied up many things we have. Energy transition had nothing to do with AI before, and transformers and renewable energy was causing problems to the public grid.
All this was already going to happen. AI, with all this big growth, this is bringing WEG energy to this context with the generators. A few things that happened in the past, which WEG could see, and João Paulo was one of those who led or headed, decided to buy Northern Power Systems back in 2018 because they made BESS. That was a vision. We have to start playing this game, but now things happen all at once. 2018, this is when we started manufacturing BESS or working with BESS, and eight years later, we will have the first significant auction in Brazil. It happened already. Many businesses happened at the same time, all of them working with grids, synchronous transformers, and so on and so forth. This led to a complex need as the new plants in Guaratinguetá.
Together with that, electro mobility, we have never been so well. We planted seeds, and Walter , electrified many cars. Land Rover in Africa, because we were learning, today WEG became a main player in powertrain for buses, so motor and battery packs. I think we are living or seeing a unique moment, and it is up to our team now to go on addressing this assertively to take advantage of all these opportunities.
Good morning. Fernando Bueno from XP. Thank you for this meeting. During the presentations, I think it became very clear the opportunity you have to participate in a data center infrastructure, different steps of the project. I understand also that products will go to the project through different chains, different OEMs.
I would like to understand both internally and from the sales point of view, how have you leveraged the different visions in the company? I understand that the technology management or team would be very important for that, but I would like to understand where do you still see more opportunity of greater cross-sell in the company for a same data center project?
In this type of business, not only for data centers, but also in other areas as well, we have been implementing at WEG for many years now, an area which we call business center. We have the business center for power, and when you have a hydraulic plant, they are going to sell WEG energy, but we have transformers, panels from different areas. We have a multidisciplinary team that will work with that synergistically. This applies to power, the power business center.
We have the substation business center, because the substation, in addition to transformers, we have rectifiers that are made by WEG Automation panels and other products. We did the same thing for data centers. We have a business center that is specific for data center to deal with that synergistically, bringing together all the different sales teams. This addresses what Manfred talked about, which are sales that we do directly to customers and through OEMs, which is what Rodrigo mentioned. We have partnership with many OEMs, pump ventilation OEMs, for example, and another team works with them, which has nothing to do with this team that will sell the whole package. We could address all the different channels
All those five channels Manfred mentioned in his presentation.
Good morning, Marcelo Motta from JPMorgan. Could you talk about the margin trends you see in the short and medium term? On the one hand, you have BAS, where we have a smaller margin, but you have more trans. Then you have transformers with a better margin. You have tariffs, you have exchange rate, you have the generator business that is going to grow. What about its margin? How do you see this whole dynamic? Because since the pandemic, you have had bigger margins. Now we will have less exports from Brazil abroad. What about all these drivers when we think about short and medium-term margin trends?
This is a difficult exercise for the company because we are exposed to the foreign market, and there are product cycles. I think the most important message here is that in the last three and a half years, we have been delivering margins above our historical average. All management has a commitment to deliver that. Maybe a quarter, the thing fluctuates, ups and down, but what do we do? Within the company, we try and seek productivity, reduce costs and expenditures to keep our average above the market's average. Let's see. WEG, when it started its internationalization process, lost money everywhere. In Portugal, in Asia, Europe, we were losing money everywhere. But over time, we learned how to play the game to be profitable in those countries. Today, we do it consistently in Mexico, in Chile, in India, in Portugal, and in all the countries we operate.
So we have excellent margins now. What happens? All WEG plants that we call production hubs, Brazil, Mexico, China, India, and Turkey, are hubs in which we have a production cost that is more competitive for that economic block. So what is the most competitive place to produce something? China, Turkey, in its corresponding block, India. So anyhow, our production hubs are located in place where the domestic market is huge because the first thing we have to do is to meet the local demand, thus mitigate the risk of someone dropping the exports, for example. So the first thing that each WEG operation has to do is to be able to play the game of the domestic market, to buy materials, to outsource, to manufacture. And we have been doing this so well in all markets like that. We can compete domestically.
We can export from that country to any other country and to make any manufacturing adjustments. Of the five manufacturing hubs, we can service and provide the whole world. Maybe in Europe, some Chinese or Asian product is selling cheaper in Germany than what we are manufacturing. But in our condition, we are able to evolve cost-wise constantly. Décio talked about competitiveness. In my presentation, I referred to competitiveness that is always at the very core of our company's discussion every day. It is a paranoia, so to speak, right? An obsession in processes, in administrative processes, in manufacturing processes. I think we are very well structured for that. This is a major project for us. Kuba, just to add a few things on this investment package. There is the verticalization of processes, so we have the same competitive structure.
What we have in Brazil, we also have it in Mexico, in China. Transmission and Distribution is taking overseas what we have in Brazil. If we are able to compete domestically, being competitive, even in future scenarios where sales may drop a little bit, we can continue growing the market.
BTG Pactual. My question has to do with the roadmap for the new data center architecture. This portfolio expansion will require incremental investment over the years, or will you do it based on the industrial footprint we have?
We can do it using the current footprint. As I said before, some products are totally new. So we consolidate cooperation as we did with other products in the past. I will give an example to try and be clear. The busway, for example. To manufacture busway in direct current is similar to do it with AC.
The footprint is the same. What changes is the technology, the engineering underlying it. But the footprint that is required to produce things is basically the same.
Good morning. Good morning, everyone. Thank you for the opportunity. Are two questions about data center markets. Potential market share. What are your competitive edges to deal with that foreign data center market and domestic data center market by selling motors, drives, whatever? The second question, how is market share growth? How do you see that in general? And Marathon, what role will it play in that?
I think the first part of the question I can answer. How will we tackle the data center market? This is always done in phases. The first phase or Phase 1 is substation.
Since we have the opportunity of being in Phase 1, this takes us naturally to Phase 2, because not all competitors who are on Phase 2 participated in Phase 1, and this sets us apart from competitors. This is the strategy that we pursue, which is to consolidate our position by doing a good job in Phase 1 to be able to capture Phase 2, because not all competitors are in Phase 1. I should also reiterate that most of the revenues that we are talking about here is infrastructure, electrical infrastructure. So the market share will basically be the same or better. The cooling part, WEG Motors also deals with that. So the market share of mature products will follow along the same lines of the mature products we have.
So what will happen in this, as automation brings more products and broadens the portfolio, the portfolio will have ever more WEG products. This is going to evolve as any other product or solution that WEG develops. One last question .
Yes, on Marathon Motors, how have things worked? Clearly, most part of WEG Motors is outside Brazil. Basically, all opportunities in Brazil will be captured, but our most important thing is to expand overseas. This has been happening also in Marathon to position ourselves better, both in Europe or from Turkey, where we're fairing well. There we're fighting against local manufacturers. When we position ourselves, we aim at both the domestic market and think about exporting. Champion in Italy, we have a very important partner, and in Portugal, delivering explosion-proof products, Europe and the Middle East.
In Asia, this strategy has been quite peculiar, and we define different strategy. In India is one thing. In China, we continue with separate strategy, but having one single Mind, and have been able to capture good business opportunities both in India and China. We've been growing in terms of market share year after year. The head-to-head growth is taking us this year-on-year growth. We are going to expand our participation. Trying to get the best technology to set us apart from competitors, of course.
Yes. As I showed you our CapEx revenues recently this year, we have announced investments and presented again today, it's natural to imagine that we are operating above this range to take advantage of the growth opportunities that are coming up.
But I think it's natural also that after this investment cycle in transformers and some generator parts that João Paulo presented, the company growth revenues is to get back to the 3%-5% range.
Now we are closing the Q&A session. Thank you so much for your participation once again. Thank you, Mr. Décio da Silva, Kuba, and the VPs for the presentation made here today. Thank you also the investor relations team, the marketing team, the IT team for having provided the support. All our suppliers, providers who made this possible. Those of you who are online, you're going to have the survey. Please answer them. Those of you who are here at the auditorium, you'll get them also online later on for us to keep on evolving. Thank you so much. See you next WEG Day.