Weir Group PLC · LSE:WEIR
Weir — The Weir Group — H1 2008 Earnings Presentation
26 slides from Weir's earnings presentation, Aug 12, 2008
Slide 1: 2008 Interim Results Analysts' Presentation
The Weir Group PLC Excellent Engineering Solutions The Weir Group PLC Analysts’ Presentation 2008 Interim Results London, 12 August 2008
Slide 2: Financial Highlights H1 2008
The Weir Group PLC Excellent Engineering Solutions Financial Highlights H1 2008 (Continuing Operations) Order Input 1 Profit before tax 2 £734.4m Up 32% £81.8m Up 85% Earnings Revenue per share 2 £631.7m Up 46% 27.5p Up 80% Operating Profit 2 Dividend £84.7m Up 97% 4.65p Up 12% Cash generated Operat
Slide 3: Financial Review
The Weir Group PLC Excellent Engineering Solutions The Weir Group PLC Analysts’ Presentation 2008 Interim Results Financial Review Keith Cochrane 3
Slide 4: Consolidated Income Statement
The Weir Group PLC Excellent Engineering Solutions Consolidated Income Statement 2008 2007 £m £m Revenue - Continuing Operations 631.7 433.5 Operating Profit from Continuing Operations (1) 84.7 42.9 Intangibles Amortisation (6.7) (1.1) Operating Profit from Continuing Operations 78.0 41.8 Net Intere
Slide 5: Group revenue £631.7m - up 46%
The Weir Group PLC Excellent Engineering Solutions Group revenue £631.7m - up 46% 2008 - £m Growth Total Acquisitions Like for Like 20071 £m Like for Like Total Minerals 339.6 19.4 2 320.2 263.4 22% 29% Oil & Gas 128.8 70.4 3 58.4 54.8 7% 135% Power & Industrial 99.8 - 99.8 90.7 10% 10% Group Compan
Slide 6: Operating profit £84.7m - up 97%
The Weir Group PLC Excellent Engineering Solutions Operating profit1 £84.7m - up 97% Operating Profit Margin 2008 £m 2008 Total Acquisitions Like for Like 20072 £m Variance Total Like for Like 2007 Minerals 53.4 2.9 50.5 36.8 16.6 15.7% 15.8% 14.0% Oil & Gas 3 27.8 18.9 8.9 7.6 20.2 21.6% 15.2% 13.9
Slide 7: Discontinued Operations Strachan & Henshaw
The Weir Group PLC Excellent Engineering Solutions Discontinued Operations Strachan & Henshaw Before Exceptional Exceptional Items & Items & Intangibles Intangibles Amortisation Amortisation £m £m Total Trading Profits, after Tax 1.2 - 1.2 Intangibles amortisation - (0.1) (0.1) Gain on Sale - 54.2 5
Slide 8: Net Interest Expense
The Weir Group PLC Excellent Engineering Solutions Net Interest Expense 2008 2007 £m £m Variance Interest Costs (7.8) (4.6) (3.2) Interest Income 3.7 4.2 (0.5) Net Interest Costs (4.1) (0.4) (3.7) Other Finance Income - retirement benefits 1.2 1.6 (0.4) (2.9) 1.2 (4.1) Interest rate arbitrage benefi
Slide 9: Taxation
The Weir Group PLC Excellent Engineering Solutions Taxation Profit Before Tax Tax Rate £m £m % Continuing Operations: - Before intangible amortisation 81.8 (24.2) 29.6% - Intangibles amortisation (6.7) 2.3 Reported in Income Statement 75.1 (21.9) 29.2% 9
Slide 10: Cash flow and Net debt
The Weir Group PLC Excellent Engineering Solutions Cash flow and Net debt 2008 2007 £m £m Operating cash flows - pre working capital 95.4 48.1 Working Capital (32.4) 2.0 Operating cash flows 63.0 50.1 Special Pension Contribution (5.0) - Interest and tax (22.5) (12.6) Net Capex (19.4) (10.7) Dividen
Slide 11: Bank Facilities & Headroom
The Weir Group PLC Excellent Engineering Solutions Bank Facilities & Headroom Existing £475m facilities due to expire by July 2009 £550m 3 year committed revolving credit facilities maturing July 2011 8 banks Financial Covenant package remains the same Net debt / Ebitda < 3.5 times Ebi
Slide 12: Pensions
The Weir Group PLC Excellent Engineering Solutions Pensions Period end net deficit £19.2m (December 2007 net surplus: £36.9m) − Actuarial loss of £62.3m − £5m special contribution made to main UK scheme Additional Legal & General insurance policy − c. 1300 deferred members − 17% of scheme total
Slide 13: Financial Summary
The Weir Group PLC Excellent Engineering Solutions Financial Summary 3 Operating profit of £84.7m, up £41.8m (97%) (1) 3 Operating cash flow of £63.0m, up £12.9m (1) 3 EPS – 27.5p (up 80%) (1) 3 Net debt of £261.7m 3 Dividend 4.65p per ordinary share, up 12% (1) From Continuing Operations and before
Slide 14: Operational Review
The Weir Group PLC Excellent Engineering Solutions The Weir Group PLC Analysts’ Presentation 2008 Interim Results Operational Review Mark Selway 14
Slide 15: Order Input by Division - Continuing Operations
The Weir Group PLC Excellent Engineering Solutions Order Input by Division - Continuing Operations Consolidated H1 2008 H1 20071 Variance £m £m % Minerals 403.4 348.5 +16% Oil & Gas 141.1 62.8 +125% Power & Industrial 158.0 104.1 +52% Group companies 31.9 39.7 -20% Total 734.4 555.1 +32% 1 2007 rest
Slide 16: Order input by sector - Continuing Operations
The Weir Group PLC Excellent Engineering Solutions Order input by sector - Continuing Operations 1 H1 2008 Input H1 2008 H1 2007 Variance £m £m % Power 18% Industrial Minerals 291.9 237.4 +23% 9% Oil & gas 204.4 130.1 +57% Water Oil & Gas 3% 28% Naval Power 135.5 90.8 +49% 2% General industrial 67.2
Slide 17: Order input by geography - Continuing Operations
The Weir Group PLC Excellent Engineering Solutions Order input by geography - Continuing Operations 1 H1 2008 Input H1 2008 H1 2007 Variance £m £m % North America 214.2 154.0 +39% Emerging Established markets markets Europe & FSU 153.6 121.6 +26% 41% 59% Indo Pacific 110.9 52.4 +116% Middle East & A
Slide 18: Minerals Division
The Weir Group PLC Excellent Excellent Minerals Engineering Solutions Solutions Minerals Division Financial Highlights H1 2008 H1 2008 279.9 Input by sector Revenue by sector 234.1 300 H1 2008 H1 2007 1 227.5 Var 250 250 Consolidated £m £m % H1 2008 163.1 200 H1 2007 200 £m Order input 403.4 348.5 +
Slide 19: Oil & Gas Division
The Weir Group PLC Excellent Excellent Oil & Gas Engineering Solutions Solutions Oil & Gas Division Financial Highlights H1 2008 H1 2008 H1 2008 H1 20071 Var 150 133.9 Input by sector 150 Revenue by sector 121.0 Consolidated £m £m % H1 2008 100 H1 2007 100 Order input 141.1 62.8 +125% 56.8 £m 48.4 5
Slide 20: Power & Industrial Division
The Weir Group PLC Excellent Excellent Power & Industrial Engineering Solutions Solutions Power & Industrial Division Financial Highlights 45.2 H1 2008 H1 2008 94.1 50 100 H1 2008 H1 20071 Var Input by sector 40 Revenue by sector 32.1 Consolidated 27.7 £m £m % 75 H1 2008 30 21.1 H1 2007 43.4 50 £m 1
Slide 21: Group Businesses
The Weir Group PLC Excellent Engineering Solutions Group Businesses Financial Highlights 30.0 H1 2008 H1 2008 40.1 45. 0 40. 0 25.0 H1 2008 H1 20071 Var Input by sector 35. 0 Revenue by sector 20.0 Consolidated £m £m % 30. 0 24.7 25. 0 15.0 Order input 31.9 39.7 -20% 20. 0 13.1 12.0 10.0 15. 0 8.2 1
Slide 22: Scorecard: H1 2008 achievements
The Weir Group PLC Excellent Engineering Solutions Scorecard : H1 2008 achievements Financial Highlights Reorganised to sector focused structure H1 2008 H1 2007 Var Consolidated £m £m % Order input1 734.4 555.1 +32% Revenue 631.7 433.5 +46% Operating profit 84.7 42.9 +97% Margin 13.4% 9.9% +35% Cash
Slide 23: Outlook
The Weir Group PLC Excellent Engineering Solutions Outlook In the second half of 2008, the Group expects to deliver growth in revenue and profit when compared to same period in 2007. Minerals Division will benefit Oil & Gas Division is Power & Industrial Division is from: positioned to deliver stron
Slide 24: Appendices
The Weir Group PLC Excellent Engineering Solutions The Weir Group PLC Analysts’ Presentation 2008 Interim Results Appendices 24
Slide 25: Foreign Exchange
The Weir Group PLC Excellent Engineering Solutions Foreign Exchange 2007 Revenue 2007 Operating Profit Published FX Restated Published FX Restated Minerals 244.2 19.2 263.4 33.6 3.2 36.8 Oil & Gas 50.5 4.3 54.8 7.0 0.6 7.6 Power & Industrial 87.3 3.4 90.7 4.1 0.3 4.4 Group Companies 51.5 1.5 53.0 2.
Slide 26: Foreign Exchange
The Weir Group PLC Excellent Engineering Solutions Foreign Exchange 2007 Revenue 2007 Operating Profit At 2007 FX At 2008 At 2007 FX At 2008 Rates Rates Rates Rates US $ 89.8 (0.5) 89.3 14.2 (0.1) 14.1 Australian $ 50.7 7.4 58.1 8.5 1.2 9.7 Euro € 63.9 9.6 73.5 10.3 1.6 11.9 GBP £ 111.3 - 111.3 (3.4