Weir Group PLC · LSE:WEIR

Weir — The Weir Group — H1 2010 Earnings Presentation

27 slides from Weir's earnings presentation, Aug 3, 2010

  1. Slide 1: 2010 Interim Results

    The Weir Group PLC 2010 Interim results 2010 Interim Results London, 3 August 2010 Excellent Engineering Solutions

  2. Slide 2: Highlights

    The Weir Group PLC 2010 Interim results 2 Highlights Lord Smith of Kelvin Weir Power & Industrial - Suzhou, China Excellent Engineering Solutions

  3. Slide 3: Highlights Continuing operations

    The Weir Group PLC 2010 Interim results 3 Highlights Continuing operations Order input (1) £863m Up 24%  Record profit in improving market conditions  Positive signs of recovery from three core end markets Profit before tax (2) £144m Up 58%  Robust aftermarket input trends Cash generated from ope

  4. Slide 4: Financial Review

    The Weir Group PLC 2010 Interim results 4 Financial Review Jon Stanton Weir SPM, Texas, USA Excellent Engineering Solutions

  5. Slide 5: Results summary

    The Weir Group PLC 2010 Interim results 5 Results summary (1) 2010 2009 +/- £m £m Revenue 775 710 +9% Operating profit 151 99 +52% Operating margin 19.5% 14.0% +5.5pts Net finance costs (7) (8) -10% Profit before tax 144 91 +58% Profit for the period 102 66 +56% Effective tax rate 28.9% 28.2% +0.7pt

  6. Slide 6: Order input

    The Weir Group PLC 2010 Interim results 6 Order input (1) Input OE / Aftermarket 100  24% higher - driven by Minerals and Oil & Gas 80 41 41 42 60  OE 28% higher - positive emerging trends (%) 40 59 59 58 20  Aftermarket 22% higher - 58% of total input 0  Emerging markets input increased by 29%

  7. Slide 7: Revenue

    The Weir Group PLC 2010 Interim results 7 Revenue Revenue OE / Aftermarket 100  4% higher in constant currency 80 46 45 42 60  Significant increase in Oil & Gas partly offset by Minerals (%) 40  Aftermarket content increased from 54% to 58% 20 54 55 58  40% of revenue directly from emerging mark

  8. Slide 8: Operating profit

    The Weir Group PLC 2010 Interim results 8 Operating profit (1)  52% higher on reporting basis helped by favourable FX Operating profit (1)  Constant currency 47% higher mainly due to SPM 200  All divisions showing increased operating profits 150 151.0  Margins improved to 19.5% due to stronger a

  9. Slide 9: Cash flow

    The Weir Group PLC 2010 Interim results 9 Cash flow Working capital as % of revenue (1) 16 14 13.0 12.7 12 10.2 2010 2009 10 (%) 8 £m £m 6 4 Operating cash flows - pre working capital 166.0 111.3 2 0 Working Capital (45.4) 12.6 2009 H1 2009 H2 2010 H1 Debtors days (1) Operating cash flows 120.6 123.

  10. Slide 10: Finance costs & net debt

    The Weir Group PLC 2010 Interim results 10 Finance costs & net debt Finance Costs 2009 2010 £m £m Underlying interest 7.6 6.2  Finance costs £0.8m lower due to reduced net debt levels Interest differential (0.7) - Other finance costs - pensions 0.9 0.8  Net debt / EBITDA ratio of 0.3 times (pre Li

  11. Slide 11: Summary

    The Weir Group PLC 2010 Interim results 11 Summary 2008 £m  Another period of revenue, margins and profit growth  Mix of revenue towards aftermarket and SPM drives margin improvement  Further strong free cashflow  Dividend increased by 25%  Strong balance sheet provides significant financial he

  12. Slide 12: Business Review & Priorities

    The Weir Group PLC 2010 Interim results 12 Business Review & Priorities Keith Cochrane Weir Minerals Brasil – Sao Paulo Excellent Engineering Solutions

  13. Slide 13: Driving growth the Weir way

    The Weir Group PLC 2010 Interim results 13 Driving growth the Weir way  Customer driven product & service innovation  Investment in engineering skills & product development  Broaden and deepen product portfolio  Collaborative mindset  Build customer partnerships  Leverage skills, knowledge & b

  14. Slide 14: Minerals Division Business review

    The Weir Group PLC 2010 Interim results 14 Minerals Division Input OE / Aftermarket 100 Business review 80 41 41 43 (%) 60 £m 2009 H1(1) 2009 H2 (1) 2010 H1 + / - (3) 40 59 59 57 20 Input OE 163 155 210 +29% 0 Input aftermarket 235 223 273 +16% 2009 H1 2009 H2 2010 H1 Input Total 398 378 483 +21% Af

  15. Slide 15: Minerals Division 2010 Priorities - Progress update

    The Weir Group PLC 2010 Interim results 15 Minerals Division 2010 Priorities - Progress update  Product innovation and development  22 customer trials of new pump range  Chilean spools expansion  Canadian barge contracts  Facility investment  New service centres in Indonesia & Russia  Multifl

  16. Slide 16: Oil & Gas Division Business review

    The Weir Group PLC 2010 Interim results 16 Oil & Gas Division Input OE / Aftermarket Business review 100 80 44 38 36 2009 H2 (1) 2010 H1 + / - (3) 60 £m 2009 H1(1) (%) 40 56 62 64 20 Input OE 66 59 81 +23% 0 Input aftermarket 86 98 143 +66% 2009 H1 2009 H2 2010 H1 Input Total 152 157 224 +47% Afterm

  17. Slide 17: Oil & Gas Division 2010 Priorities - Progress update

    The Weir Group PLC 2010 Interim results 17 Oil & Gas Division 2010 Priorities - Progress update  Extend upstream  Growing market share  Capacity expansion at SPM & Mesa  PCS acquisition & new service centres  Product innovation and development  Successful trial of new frac pump  Expanded engi

  18. Slide 18: Power & Industrial Division Business review

    The Weir Group PLC 2010 Interim results 18 Power & Industrial Division Input OE / Aftermarket Business review 100 80 37 42 41 £m 2009 H1(1) 2009 H2 (1) 2010 H1 + / - (3) (%) 60 40 63 58 59 Input OE 52 56 57 +9% 20 Input aftermarket 88 78 82 -6% 0 2009 H1 2009 H2 2010 H1 Input Total 140 134 139 -1% A

  19. Slide 19: Power & Industrial Division 2010 Priorities - Progress update

    The Weir Group PLC 2010 Interim results 19 Power & Industrial Division 2010 Priorities - Progress update  Product innovation and development  Extended nuclear approvals  UK nuclear alliance with MHI  Expand low cost supply chain  Transferred valve production to India & China  Extend product of

  20. Slide 20: 2010 Group priorities - Progress update

    The Weir Group PLC 2010 Interim results 20 2010 Group priorities - Progress update  Extend operational excellence beyond factory floor  Rollout of Net Promoter Score  Embedded Weir Commercial System  Build organisational capability to support growth  Increasing investment in people development

  21. Slide 21: H2 2010 Outlook

    The Weir Group PLC 2010 Interim results 21 H2 2010 Outlook  Minerals  Positive market conditions expected to continue  Emerging positive OE trend  Reduced restocking impact  Oil & Gas  Rig count projected to remain around current levels  Increased SPM revenue expectations  Challenging downst

  22. Slide 22: Q&A / Appendices

    The Weir Group PLC 2010 Interim results 22 Q&A / Appendices Weir Minerals, Sao Paulo, Brasil Excellent Engineering Solutions

  23. Slide 23: Appendix 1 - Order input by division

    The Weir Group PLC 2010 Interim results 23 Appendix 1 - Order input(1) by division 2010 H1 2009 H1 Variance £m £m +/- Minerals 483 398 +21% Oil & Gas 224 152 +47% Power & Industrial 139 140 -1% Group Companies 17 4 +325% Order input 863 694 +24% (1) 2009 restated at 2010 average exchange rates

  24. Slide 24: Appendix 2 - Revenue & operating profit by division

    The Weir Group PLC 2010 Interim results 24 Appendix 2 - Revenue & operating profit (1) by division Revenue Operating Profit (1) 2010 H1 2009 H1(2) Variance 2010 H1 2009 H1 (2) Variance £m £m +/- £m £m +/- Minerals 421.8 457.6 -8% 84.3 72.9 +16% Oil & Gas(3) 223.8 147.1 +52% 60.9 25.4 +140% Power & I

  25. Slide 25: Appendix 3 - Foreign exchange by division

    The Weir Group PLC 2010 Interim results 25 Appendix 3 - Foreign exchange by division 2009 H1 Revenue 2009 H1 Operating Profit (1) Published FX Restated Published FX Restated £m £m £m £m £m £m Minerals 422.5 35.1 457.6 68.3 4.6 72.9 Oil & Gas 149.7 (2.6) 147.1 26.1 (0.7) 25.4 Power & Industrial 117.4

  26. Slide 26: Appendix 4 - Foreign exchange by currency

    The Weir Group PLC 2010 Interim results 26 Appendix 4 - Foreign exchange by currency 2009 H1 Revenue 2009 H1 Operating Profit (1) At 2009 H1 At 2010 H1 At 2009 H1 At 2010 H1 FX FX rates rates rates rates £m £m £m £m £m £m US $ 211.0 (5.1) 205.9 41.5 (1.0) 40.5 Canadian $ 47.3 6.5 53.8 4.2 0.6 4.8 Au

  27. Slide 27: 2010 Interim Results disclaimer

    The Weir Group PLC 2010 Interim results 2010 Interim Results London, 3 August 2010 This Interim Results presentation contains certain forward-looking statements. These forward-looking statements can be identified by the fact that they do not relate only to historical or current facts. In particular,

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