Weir Group Plc · LSE:WEIR

Weir — The Weir Group — FY2010 Earnings Presentation

39 slides from Weir's earnings presentation, Mar 8, 2011

1. Slide 1: 2010 Preliminary Results

   The Weir Group PLC 2010 Preliminary Results London, 8 March 2011 Excellent Engineering Solutions

2. Slide 2: Highlights

   The Weir Group PLC 2010 Preliminary Results Presentation 2 Highlights Chairman, Lord Smith of Kelvin Weir Valves & Controls UK Excellent Engineering Solutions

3. Slide 3: Highlights

   The Weir Group PLC 2010 Preliminary Results Presentation 3 Highlights Continuing operations  Original equipment input up 54% like for like Order input (1) £1.9bn Up 39%  Strong aftermarket contributed 58% of revenues Profit before tax (2) £294.7m Up 58%  Operating profit up 51%  Record operating

4. Slide 4: Financial Review

   The Weir Group PLC 2010 Preliminary Results Presentation 4 Financial Review Finance Director, Jon Stanton Weir Oil & Gas Services, Abu Dhabi Excellent Engineering Solutions

5. Slide 5: Results summary

   The Weir Group PLC 2010 Preliminary Results Presentation 5 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 2

6. Slide 6: Order input

   The Weir Group PLC 2010 Preliminary Results Presentation 6 Order input (1) Input OE / Aftermarket  Up 39% (36% like for like) – Upstream Oil & Gas and Minerals recovery 100 80  Contribution from acquisitions of £48m 51 41 46 (%) 60  OE up 58% (54% like for like) aftermarket up 27% (24% like for l

7. Slide 7: Revenue

   The Weir Group PLC 2010 Preliminary Results Presentation 7 Revenue Revenue OE / Aftermarket  Up 12% (10% like for like) in constant currency 100 80 49 46 42  Upstream Oil & Gas revenue more than doubled 60  Minerals returned to growth in H2 (%) 40 51 54 58  Aftermarket content increases from 54%

8. Slide 8: Operating profit

   The Weir Group PLC 2010 Preliminary Results Presentation 8 Operating profit (1) Operating profit (1)  Up 51% due to Upstream Oil & Gas and Minerals aftermarket mix 350 309.7 300  Contribution from favourable exchange £8.6m (£m) 250 185.0 204.7 200  Like for like constant currency up 49% 150 100 

9. Slide 9: Acquisitions

   The Weir Group PLC 2010 Preliminary Results Presentation 9 Acquisitions 2010 acquisitions £m O&G - PCS Opening balance sheet Minerals - Linatex Tangible net assets(1) 23.7 P&I - BDK, American Hydro, YES Intangible assets 107.2 Actual contribution (£m) Goodwill 86.6 Minerals O&G P&I Total Considerati

10. Slide 10: Cash flow

    The Weir Group PLC 2010 Preliminary Results Presentation 10 Cash flow Working capital as % of revenue (1) 15.0 13.8 12.6 12.5 10.3 2010 2009 10.0 £m £m (%) 7.5 5.0 Operating cash flows - pre working capital 342.3 236.1 2.5 0.0 Working capital (67.4) 66.2 2008 2009 2010 Debtors days (1) Operating cas

11. Slide 11: Finance costs & net debt

    The Weir Group PLC 2010 Preliminary Results Presentation 11 Finance costs & net debt  Finance costs lower due to: Finance costs 2010 £m 2009 £m  Increased interest cost on higher net debt offset by reduced Underlying interest 13.5 13.4 losses from derivatives Interest differential (0.1) (0.9) Inte

12. Slide 12: Balance sheet

    The Weir Group PLC 2010 Preliminary Results Presentation 12 Balance sheet Committed Facilities 1000 800 155 600 157 (£m) 400 695 625  Good mix of funding sources and maturities 200 515 0 2008 2009 2010  $250m fixed rate notes issued 2010 maturing 2015 & 2018 Bank Facilities Private Placement Commi

13. Slide 13: Summary

    The Weir Group PLC 2010 Preliminary Results Presentation 13 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

14. Slide 14: Business review & priorities

    The Weir Group PLC 2010 Preliminary Results Presentation 14 Business review & priorities CEO, Keith Cochrane Weir Oil & Gas Services, Dubai Excellent Engineering Solutions

15. Slide 15: Overview

    The Weir Group PLC 2010 Preliminary Results Presentation 15 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 margi

16. Slide 16: Minerals divisional highlights

    The Weir Group PLC 2010 Preliminary Results Presentation 16 Minerals divisional highlights Input OE / Aftermarket 100% £m H1(1) H2 2010 2009(1) +/- 80% 51% 41% 43% 60% Input OE 209 211 420 317 +32% 40% 59% 57% Input aftermarket 277 287 564 465 +21% 20% 49% Input Total 486 498 984 782 +26% 0% 2008 20

17. Slide 17: Oil & Gas divisional highlights

    The Weir Group PLC 2010 Preliminary Results Presentation 17 Oil & Gas divisional highlights Input OE / Aftermarket 100% £m H1(1) H2 2010 2009(1) +/- 80% 47% 39% 46% 60% Input OE 80 209 289 124 +133% 40% 53% 61% 54% Input aftermarket 143 194 337 194 +74% 20% Input Total 223 403 626 318 +97% 0% 2008 2

18. Slide 18: Power & Industrial divisional highlights

    The Weir Group PLC 2010 Preliminary Results Presentation 18 Power & Industrial divisional highlights Input OE / Aftermarket 100% £m H1(1) H2 2010 2009(1) +/- 80% 45% 42% 55% Input OE 56 93 149 107 +39% 60% 40% Input aftermarket 78 41 119 147 -19% 55% 58% 20% 45% Input Total 134 134 268 254 +6% 0% 20

19. Slide 19: Driving growth the Weir Way

    The Weir Group PLC 2010 Preliminary Results Presentation 19 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

20. Slide 20: Innovative action

    The Weir Group PLC 2010 Preliminary Results Presentation 20 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 de

21. Slide 21: Collaborative mindset

    The Weir Group PLC 2010 Preliminary Results Presentation 21 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 integrat

22. Slide 22: Global capability

    The Weir Group PLC 2010 Preliminary Results Presentation 22 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

23. Slide 23: Operational excellence

    The Weir Group PLC 2010 Preliminary Results Presentation 23 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 i

24. Slide 24: Quality acquisitions

    The Weir Group PLC 2010 Preliminary Results Presentation 24 Quality acquisitions Linatex  Market leading natural rubber products BDK  Indian low-cost manufacturing base American Hydro  Value-add hydro services offering Ynfiniti Engineering Services (YES)  Renewable power maintenance provider PCS

25. Slide 25: Medium term fundamentals

    The Weir Group PLC 2010 Preliminary Results Presentation 25 Total global ore production (million tonnes) Medium term fundamentals 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 2012

26. Slide 26: 2011 Divisional priorities

    The Weir Group PLC 2010 Preliminary Results Presentation 26 2011 Divisional priorities Minerals  Product innovation and development  Drive complementary product sales  Extend service coverage Oil & Gas  SPM capacity expansion  Enhance wear technology  Expand international presence Power & Indu

27. Slide 27: 2011 Group priorities

    The Weir Group PLC 2010 Preliminary Results Presentation 27 2011 Group priorities Product and service innovation  Increase engineering resources  Collaboration with research institutions  Group-wide engineering initiatives Expanding global capability  Drive China & India growth  Continue to see

28. Slide 28: 2011 Outlook

    The Weir Group PLC 2010 Preliminary Results Presentation 28 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 gro

29. Slide 29: Q&As

    The Weir Group PLC 2010 Preliminary Results Presentation 29 Q&As Weir Minerals Multiflo, Australia Excellent Engineering Solutions

30. Slide 30: Appendices

    The Weir Group PLC 2010 Preliminary Results Presentation 30 Appendices Weir Minerals Multiflo, Australia Excellent Engineering Solutions

31. Slide 31: Appendix 1 - Order input by division

    The Weir Group PLC 2010 Preliminary Results Presentation 31 Appendix 1 - Order input by division Total Like for Like (2) 2010 2009 (1) Variance 2010 2009 (1) Variance £m £m +/- £m £m +/- Minerals 984.1 781.9 +26% 956.0 781.9 +22% Oil & Gas 625.5 318.3 +97% 623.5 318.3 +96% Power & Industrial 267.7 2

32. Slide 32: Appendix 2 – 2010 order input by end market

    The Weir Group PLC 2010 Preliminary Results Presentation 32 Appendix 2 – 2010 order input by end market Minerals Oil & Gas Power & Total Industrial Minerals 74% - - 38% Oil & Gas 8% 99% 11% 38% Power 7% 1% 61% 12% General Industrial 9% - 11% 7% Other 2% - 17% 5% Total 100% 100% 100% 100%

33. Slide 33: Appendix 3 - Revenue by division

    The Weir Group PLC 2010 Preliminary Results Presentation 33 Appendix 3 - Revenue by division 2009 £m Total Like for Like (2) 2010 2009 (1) Variance 2010 2009 (1) Variance £m £m +/- £m £m +/- Minerals 901.4 878.5 +3% 874.2 878.5 - Oil & Gas 461.7 308.4 +50% 459.6 308.4 +49% Power & Industrial 246.0 2

34. Slide 34: Appendix 4 - Operating profit by division

    The Weir Group PLC 2010 Preliminary Results Presentation 34 Appendix 4 - Operating profit(1) by division Total Like for Like (4) 2010 2009 (2) 2010 2009 (2) £m £m £m £m Minerals 174.5 140.5 180.9 140.5 Oil & Gas (3) 117.4 53.0 117.0 53.0 Power & Industrial 26.3 23.7 27.9 23.7 Group companies 3.5 6.8

35. Slide 35: Appendix 5 - Foreign exchange by division

    The Weir Group PLC 2010 Preliminary Results Presentation 35 Appendix 5 - Foreign exchange by division 2009 Revenue 2009 Operating Profit (1) Published(2) FX Restated Published(2) FX Restated £m £m £m £m £m £m Minerals 818.6 59.9 878.5 132.5 8.0 140.5 Oil & Gas 307.2 1.2 308.4 52.7 0.3 53.0 Power & I

36. Slide 36: Appendix 6 - Foreign exchange by currency

    The Weir Group PLC 2010 Preliminary Results Presentation 36 Appendix 6 - Foreign exchange by currency 2009 Revenue 2009 Operating Profit (1) At 2009 At 2010 At 2009 At 2010 FX FX rates rates rates rates £m £m £m £m £m £m US $ 430.7 5.5 436.2 88.7 1.1 89.8 Canadian $ 102.1 12.0 114.1 8.6 1.0 9.6 Aust

37. Slide 37: Appendix 7 – Canada restatement by division

    The Weir Group PLC 2010 Preliminary Results Presentation 37 Appendix 7 – Canada restatement by division 2009 Revenue 2009 Operating Profit (1) Published Canada Restated Published Canada Restated £m £m £m £m £m £m Minerals 813.3 5.3 818.6 133.6 (1.1) 132.5 Oil & Gas 299.0 8.2 307.2 52.0 0.7 52.7 Powe

38. Slide 38: Appendix 8 – Canada restatement by division

    The Weir Group PLC 2010 Preliminary Results Presentation 38 Appendix 8 – Canada restatement by division 2009 Input Published Canada Restated FX Restated £m £m £m £m £m Minerals 718.5 4.7 723.2 58.7 781.9 Oil & Gas 305.2 11.8 317.0 1.3 318.3 Power & Industrial 266.3 (16.5) 249.8 3.8 253.6 Group Compa

39. Slide 39: 2010 Preliminary Results

    The Weir Group PLC 2010 Preliminary Results London, 8 March 2011 This Preliminary Results Announcement 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, all statement

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