Weir Group PLC · LSE:WEIR

Weir — The Weir Group — Non-Deal Roadshow (March 2011)

35 slides from Weir's roadshow presentation, March 2011

  1. Slide 1: 2010 US roadshow

    The Weir Group PLC March 2011 – US roadshows 2010 US roadshow March 2011 Excellent Engineering Solutions

  2. Slide 2: Group overview

    The Weir Group PLC March 2011 – US roadshows 2 Group overview Weir Minerals, Sao Paulo, Brasil Excellent Engineering Solutions

  3. Slide 3: The Weir Group today

    The Weir Group PLC March 2011 – US roadshows 3 The Weir Group today Revenue OE / Aftermarket 100  Established global engineering Group aligned to high growth 80 49 46 42 60 markets (%) 40 51 54 58  Minerals 20 0  Oil & Gas 2008 2009 2010  Power Aftermarket OE Revenue by sector % 7 5 Minerals 13

  4. Slide 4: Group transformation 2006-2010

    The Weir Group PLC March 2011 – US roadshows 4 Group transformation 2006-2010 1,800 Sales and operating margins 18.90% 20% 18%  High performing, focused Group developed in past 5 years 1,600 14.7% 1,400 13.7% 16% 1,200 11.5% 14% 12%  Focused on three end-markets with positive fundamentals 1,000 80

  5. Slide 5: Driving growth the Weir way

    The Weir Group PLC March 2011 – US roadshows 5 Driving growth the Weir way  Building on an excellent platform  Customer driven product & service innovation  Investment in engineering skills & product development  Broaden and deepen product portfolio  Collaborative mindset  Build customer partn

  6. Slide 6: The Weir Way

    The Weir Group PLC March 2011 – US roadshows 6 The Weir Way Weir Group plc PDP ais e Pe bjec pr nc al O rs tiv Ap rma on es al rf o Leadership Bu Pe ins es s Upgrade Action Succession Development Plans Plans Leadership competency Hi Em gh p ss hip t en Po loy se rs m te ees As ade nt Le ial Personal

  7. Slide 7: Medium term fundamentals

    The Weir Group PLC March 2011 – US roadshows 7 Medium term fundamentals Total global ore production (million tonnes) 7,500 Source: CRU Strategies Minerals 5,000  Ore production growth forecast to continue (c.4% p.a. to 2013) 2,500  Driver of aftermarket revenues 0 2009 2010 2011f 2012f 2013f  Sub

  8. Slide 8: Market positioning

    The Weir Group PLC March 2011 – US roadshows 8 Market positioning Market share of niche Niche as % of total market Minerals  Addressable mkt - £2.7bn Mining equipment (of which £1.4bn mining) Weir Other c.28% x14 Weir mkt Total mkt c.7% market £39bn  Market leader  Power Power & gen. valves Indus

  9. Slide 9: Target to double PBTA by 2014

    The Weir Group PLC March 2011 – US roadshows 9 Target to double PBTA by 2014  Based on current end-market forecasts  Assumes constant currency  Size of initiatives are illustrative Using balance sheet capacity Collaboration & range extension Innovation & geographic expansion Mkt growth + operatio

  10. Slide 10: Divisional overview

    The Weir Group PLC March 2011 – US roadshows 10 Divisional overview Weir Minerals, Sao Paulo, Brasil Excellent Engineering Solutions

  11. Slide 11: Focused on three end markets with positive fundamentals

    The Weir Group PLC March 2011 – US roadshows 11 DIVISION MARKET FOCUS PRODUCTS % OF SALES 52% 33% 14% Focused on three end markets with positive fundamentals

  12. Slide 12: Minerals division

    The Weir Group PLC March 2011 – US roadshows 12 Minerals division  Specialises in global delivery & support of equipment for slurry handling and processing in mining & mineral applications  Product applications extend to oil sands & FGD  Key products  Pumps, hydrocyclones, valves, wear resistant

  13. Slide 13: End markets and key drivers

    The Weir Group PLC March 2011 – US roadshows 13 Minerals division End markets and key drivers Market by sector  Current addressable market of £2.7bn 32% Mining Sand & Gravel FGD/Power  55% OEM, 45% Aftermarket (spares & service) 53% Oil Sands 3% Industrial  Emerging markets represent 21% of marke

  14. Slide 14: Minerals divisional performance

    The Weir Group PLC March 2011 – US roadshows 14 Minerals divisional performance Input OE / Aftermarket 100% £m 2010 20091 20081 + / -3 80% 51% 41% 43% 60% Input OE 420 317 490 +32% 40% 59% 57% Input aftermarket 564 465 470 +21% 20% 49% 0% Input Total 984 782 960 +26% 2008 2009 2010 Revenue OE 351 41

  15. Slide 15: Business structure

    The Weir Group PLC March 2011 – US roadshows 15 Minerals division Business structure  20 businesses  21 production sites  55 service centres  180 distributors  Not on map  c.6,300 employees Major customers

  16. Slide 16: Key products

    The Weir Group PLC March 2011 – US roadshows 16 Minerals division Key products

  17. Slide 17: Oil & Gas division

    The Weir Group PLC March 2011 – US roadshows 17 Oil & Gas division  Market leading position in Pressure Pumping and Flow Control  Niche position in centrifugal pumps for refining and petrochem  Respected services positions for repair and upgrades  Resilient business model  Leading margin perfor

  18. Slide 18: End markets & key drivers

    The Weir Group PLC March 2011 – US roadshows 18 Oil & Gas division End markets & key NAM drilling trajectory drivers Niche player in £27bn upstream equipment & Horiztonal + Directional Percent of Total Rigs service market North America International Served market (primarily well services) – £1.1bn

  19. Slide 19: Oil & Gas divisional performance

    The Weir Group PLC March 2011 – US roadshows 19 Oil & Gas divisional performance Input OE / Aftermarket 100% £m 2010 2009 1 2008 1 +/- 3 80% 47% 39% 46% 60% Input OE 289 124 157 +133% 40% 53% 61% 54% Input aftermarket 337 194 176 +74% 20% Input Total 626 318 333 +97% 0% 2008 2009 2010 Revenue OE 194

  20. Slide 20: Business structure

    The Weir Group PLC March 2011 – US roadshows 20 Oil & Gas division SPM Business structure • Forth Worth, Texas • 832 employees  12 businesses • Products: well service pumps, flow control heads • Markets: Drilling and well completion  5 production sites  33 service centres  Joint Ventures (Abu Dh

  21. Slide 21: Products

    The Weir Group PLC March 2011 – US roadshows 21 Oil & Gas division Products API 610 pumps Weir SPM field restraint system Weir SPM frac pump Weir SPM manifold trailer Flow control products Simplified upstream oil & gas Cementing pumps and iron, safety well lifecycle diagram Decommissioning restraint

  22. Slide 22: Shale fracking process

    The Weir Group PLC March 2011 – US roadshows 22 Shale fracking process

  23. Slide 23: Frac Site Evolution

    The Weir Group PLC March 2011 – US roadshows 23 Frac Site Evolution Service intensity refers to the number of units required (hhp), pressure requirements, number of stages required and proppant. Pump life expectancy shorter: more repair and replacement of spares

  24. Slide 24: Power & Industrial Division

    The Weir Group PLC March 2011 – US roadshows 24 Power & Industrial Division  Activities  Design and production of severe service and critical safety valves  Specialist pumps for municipal and industrial applications  Engineered service solutions  Strong organic growth in power, offset by weaker

  25. Slide 25: Power & Industrial divisional performance

    The Weir Group PLC March 2011 – US roadshows 25 Power & Industrial divisional performance Input OE / Aftermarket 100% £m 2010 80% 45% 42% 55% 2010 2009 1 2008 1 +/- 3 60% 40% Input OE 149 107 131 +39% 55% 58% 45% 20% Input aftermarket 119 147 163 -19% 0% 2008 2009 2010 Input Total 268 254 294 +6% Re

  26. Slide 26: Business structure

    The Weir Group PLC March 2011 – US roadshows 26 Power & Industrial Division Business structure  10 businesses  11 production sites  13 service centres  c.2,650 employees Major customers LISCO - LIBYA

  27. Slide 27: Driving growth the Weir Way

    The Weir Group PLC March 2011 – US roadshows 27 Driving growth the Weir Way  Innovative action  Collaborative mindset  Global capability  Operational excellence  Quality acquisitions Weir Oil & Gas Services, Baku Good strategic progress driving growth

  28. Slide 28: Innovative action

    The Weir Group PLC March 2011 – US roadshows 28 Innovative action Minerals  Launched next generation Warman WBH pump  Developed molten salt pump for solar market  Developed large dewatering barge systems Oil & Gas  Launched new Destiny frac pump  Significant investment in product development 

  29. Slide 29: Collaborative mindset

    The Weir Group PLC March 2011 – US roadshows 29 Collaborative mindset Collaborating with customers  On-site Total Care service centres  High pressure flow iron  Nuclear valve certifications Collaborating internally  Cross-selling to existing customers  Internal supply chain integration  Cross-

  30. Slide 30: Global capability

    The Weir Group PLC March 2011 – US roadshows 30 Global capability Minerals  Launched state-of-art facility in Brasil  Opened GEHO facility in Taicang, China  New service centres in Indonesia, Russia, Africa Oil & Gas  Increased low cost sourcing  Opened SPM service centre in Brasil  Expanded s

  31. Slide 31: Operational excellence

    The Weir Group PLC March 2011 – US roadshows 31 Operational excellence LTAs (1) (2) 100 83 80 Further developing manufacturing excellence 60 40  Rapid response to upturn in selected markets 40 26 20  Focus on inventory turns and on time delivery 0 2008 2009 2010  Continued reduction in lost time

  32. Slide 32: 2010 summary

    The Weir Group PLC March 2011 – US roadshows 32 2010 summary  A record year of input, revenue, margins and profit growth  Powerful recovery in OE orders in the second half  Continuing strength of aftermarket revenues  Significant financial headroom remains  Dividend increased by 29% Weir Oil &

  33. Slide 33: 2010 results summary

    The Weir Group PLC March 2011 – US roadshows 33 2010 results summary (1) 2010 2009 Variance £m £m +/- Revenue 1,635 1,390 +18% Operating profit 309.7 204.7 +51% Operating margins 18.9% 14.7% +420bps Net finance costs (15.0) (17.7) -15% Profit before tax 294.7 187.0 +58% Profit for the period 211.9 1

  34. Slide 34: Overview

    The Weir Group PLC March 2011 – US roadshows 34 Overview Input growth £m (1) (2) (Cumulative versus 2005 base of £1,058m) 1,000 846 800 608  Upstream O&G market share gains 600 400 307 308 240 200 0  Product and service innovation driving growth 2006 2007 2008 2009 2010 Operating margin improvemen

  35. Slide 35: 2011 Outlook

    The Weir Group PLC March 2011 – US roadshows 35 2011 Outlook Minerals  Positive market conditions to continue  Aftermarket growth to moderate  Higher proportion of OE revenues Oil & Gas  Strong order book providing increased upstream visibility  Horizontal rig count continues to grow  Challeng

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