Weir Group Plc · LSE:WEIR

Weir — The Weir Group — H1 2011 Earnings Presentation

32 slides from Weir's earnings presentation, Aug 2, 2011

  1. Slide 1: 2011 Interim results

    The Weir Group PLC 2011 Interim results 2011 Interim results London, 2 August 2011 Excellent Engineering Solutions

  2. Slide 2: Highlights

    The Weir Group PLC 2011 Interim results 2 Highlights Lord Smith of Kelvin Weir Oil & Gas - Weir SPM, Texas, USA Excellent Engineering Solutions

  3. Slide 3: Highlights Continuing operations

    The Weir Group PLC 2011 Interim results 3 Highlights Continuing operations  Strong performance in positive market conditions Order input(1) £1,225m Up 43%  Upstream businesses delivering record results  US $75 million capacity expansion plans announced Profit before tax(2) £178.4m Up 24%  Minera

  4. Slide 4: Financial review

    The Weir Group PLC 2011 Interim results 4 Financial review Jon Stanton Weir Minerals Multiflo, Australia Excellent Engineering Solutions

  5. Slide 5: Results summary

    The Weir Group PLC 2011 Interim results 5 Results summary(1) 2011 2010 +/- £m £m Revenue 1,031 775 +33% Operating profit 186 151 +23% Operating margin 18.1% 19.5% -1.4pts Net finance costs (8) (7) +11% Profit before tax 178 144 +24% Profit for the period 127 102 +24% Effective tax rate 28.7% 28.9% -

  6. Slide 6: Order input

    The Weir Group PLC 2011 Interim results 6 Order input(1) Input OE / Aftermarket 100  Up 43% (32% LFL): driven by Minerals and Oil & Gas 80 42 50 49  OE up 67% (57% LFL): positive customer capex trends (%) 60 40  Aftermarket up 25% (15% LFL): strong production trends 20 58 50 51  Emerging markets

  7. Slide 7: Revenue

    The Weir Group PLC 2011 Interim results 7 Revenue Revenue OE / Aftermarket 100  Up 34% (23% LFL) in constant currency 80 41 42 46 60  Significant increase in Oil & Gas and Minerals output (%) 40  Original equipment mix 46% (H1 2010: 41%) 20 59 58 54  Foreign exchange impact minimal 0 2010 H1 201

  8. Slide 8: Operating profit

    The Weir Group PLC 2011 Interim results 8 Operating profit(1) Operating profit(1) 200 186.2 158.7  Up 23% after adverse FX of £2m 150 151.0  LFL constant currency up 19%; 2010 acquisition contribution of £10m £m 100  One-off costs: £7m in Oil & Gas / Power & Industrial 50  Margins reflect mix, g

  9. Slide 9: Cash flow

    The Weir Group PLC 2011 Interim results 9 Cash flow 2011 2010 Working capital as % of revenue(1) £m £m 14.8 15 13.0 11.6 Operating cash flows - pre working capital 204.7 166.0 10 (%) Working Capital (76.1) (45.4) 5 0 Operating cash flows 128.6 120.6 2010 H1 2010 H2 2011 H1 Interest and tax (49.8) (3

  10. Slide 10: Finance costs & net debt

    The Weir Group PLC 2011 Interim results 10 Finance costs & net debt Finance costs H1 2010 2011 £m £m  Finance costs up £0.8m: 2010 acquisitions Underlying interest 6.2 7.0  Acquisition of South Korean valves business Other finance costs - pensions 0.8 0.8 Total finance costs 7.0 7.8  Pensions def

  11. Slide 11: Summary

    The Weir Group PLC 2011 Interim results 11 Summary  A period of strong input, revenue and profit growth  Margins reflect mix, growth investments and one-off charges  Strengthening returns on capital  Dividend increased by 20%  Strong balance sheet provides capability to pursue growth Weir Miner

  12. Slide 12: Business review & outlook

    The Weir Group PLC 2011 Interim results 12 Business review & outlook Keith Cochrane Weir Oil & Gas Services, Dubai Excellent Engineering Solutions

  13. Slide 13: Overview

    The Weir Group PLC 2011 Interim results 13 Overview  Accelerated execution of Oil & Gas growth plans  Growing original equipment installed base  Product and service innovation driving growth  2010 acquisitions: integration progressing  Downstream restructuring underway; Libya withdrawal  Drivi

  14. Slide 14: Minerals Division

    The Weir Group PLC 2011 Interim results 14 Minerals Division Input OE / Aftermarket £m 2010 H1(1) 2010 H2 (1) 2011 H1 + / - (3) 100 80 43 43 44 47 Input OE 211 215 291 +38% 60 (%) 40 Input aftermarket 282 291 371 +32% 53 20 57 57 56 Input total 493 506 662 +34% 0 2010 2010 2011 2011 Revenue OE 172 1

  15. Slide 15: Oil & Gas Division

    The Weir Group PLC 2011 Interim results 15 Oil & Gas Division Input OE / Aftermarket £m 2010 H1(1) 2010 H2 (1) 2011 H1 + / - (3) 100 36 80 52 55 Input OE 78 201 218 +180% (%) 60 Input aftermarket 139 187 176 +27% 40 64 48 45 Input total 217 388 394 +82% 20 Revenue OE 91 99 167 +84% 0 2010 H1 2010 H2

  16. Slide 16: Power & Industrial Division

    The Weir Group PLC 2011 Interim results 16 Power & Industrial Division Input OE / Aftermarket £m 2010 H1(1) 2010 H2 (1) 2011 H1 + / - (3) 100 Input OE 55 91 87 +58% 80 41 53 69 (%) 60 Input aftermarket 78 40 76 -3% 40 59 Input Total 133 131 163 +23% 20 31 47 Revenue OE 43 67 81 +88% 0 2010 H1 2010 H

  17. Slide 17: Driving growth the Weir Way

    The Weir Group PLC 2011 Interim results 17 Driving growth the Weir Way  Innovative action  Collaborative mindset  Global capability  Operational excellence  Quality acquisitions Weir Oil & Gas, Weir SPM Texas Good strategic progress driving growth

  18. Slide 18: 2011 divisional priorities: progress update

    The Weir Group PLC 2011 Interim results 18 2011 divisional priorities: progress update 2011 divisional priorities Progress update Minerals  Product innovation and development  Accelerating new product development  Drive complimentary product sales  80% growth in ancillary product input  Extend

  19. Slide 19: 2011 group priorities: progress update

    The Weir Group PLC 2011 Interim results 19 2011 group priorities: progress update 2011 Group priorities Progress update Product and service innovation  Increase engineering resources  Investment in R&D: +45%  Collaboration with research institutions  Weir Advanced Research Centre established  G

  20. Slide 20: Medium term fundamentals

    The Weir Group PLC 2011 Interim results 20 Total global ore production (million tonnes) Medium term fundamentals Source: CRU Strategies 7,500 7,500 4% CAGR Minerals 5,000  5,000 Ore production growth forecast to continue (c.4% p.a. to 2014)  Declining ore grades increase processing demands 2,500 2

  21. Slide 21: 2011 outlook

    The Weir Group PLC 2011 Interim results 21 2011 outlook Minerals  Market conditions to remain positive  Input growth to moderate  Higher OE proportion impacting margins  Operating profits in line with expectations Oil & Gas  Strong current market conditions  Bullish outlook from oil service ma

  22. Slide 22: Q&As

    The Weir Group PLC 2011 Interim results 22 Q&As Weir Oil & Gas, Weir SPM Pumps Excellent Engineering Solutions

  23. Slide 23: Appendices

    The Weir Group PLC 2011 Interim results 23 Appendices Weir Minerals, Sao Paulo, Brasil Excellent Engineering Solutions

  24. Slide 24: Appendix 1 - Order input by division

    The Weir Group PLC 2011 Interim results 24 Appendix 1 - Order input by division Total Like for Like (2) 2011 2010 (1) Variance 2011 2010 (1) Variance £m £m +/- £m £m +/- Minerals 661.6 492.5 +34% 604.8 492.5 +23% Oil & Gas 394.2 216.7 +82% 394.2 216.7 +82% Power & Industrial 163.4 132.8 +23% 132.5 1

  25. Slide 25: Appendix 2 - H1 2011 order input by end market

    The Weir Group PLC 2011 Interim results 25 Appendix 2 – H1 2011 order input by end market Minerals Oil & Gas Power & 2011 2010 (1) Industrial Total Total Minerals 74% - 3% 41% 41% Oil & Gas 8% 99% 14% 38% 33% Power 6% - 54% 10% 13% General Industrial 10% 1% 14% 8% 7% Other 2% - 15% 3% 6% Total 100%

  26. Slide 26: Appendix 3 - Revenue by division

    The Weir Group PLC 2011 Interim results 26 Appendix 3 - Revenue by division Total Like for Like (2) 2011 2010 (1) Variance 2011 2010 Variance £m £m +/- £m £m +/- Minerals 550.8 430.6 +28% 498.8 430.6 +16% Oil & Gas 324.1 217.9 +49% 324.1 217.9 +49% Power & Industrial 140.9 109.3 +29% 109.6 109.3 - G

  27. Slide 27: Appendix 4 - Operating profit by division

    The Weir Group PLC 2011 Interim results 27 Appendix 4 - Operating profit(1) by division Total Like for Like (4) 2011 2010 (2) 2011 2010 (2) £m £m £m £m Minerals 101.3 84.9 94.0 84.9 Oil & Gas (3) 82.2 58.2 82.2 58.2 Power & Industrial 8.6 9.9 6.8 9.9 Group companies 0.6 1.7 0.6 1.7 Central costs (6.

  28. Slide 28: Appendix 5 - Foreign exchange by division

    The Weir Group PLC 2011 Interim results 28 Appendix 5 - Foreign exchange by division 2010 H1 Revenue 2010 H1 Operating Profit (1) Published FX Restated Published FX Restated £m £m £m £m £m £m Minerals 423.9 6.7 430.6 84.2 0.7 84.9 Oil & Gas 226.3 (8.4) 217.9 60.7 (2.5) 58.2 Power & Industrial 111.2

  29. Slide 29: Appendix 6 - Foreign exchange by currency

    The Weir Group PLC 2011 Interim results 29 Appendix 6 - Foreign exchange by currency 2010 H1 Revenue 2010 H1 Operating Profit (1) At 2010 H1 At 2011 H1 At 2010 H1 At 2011 H1 FX FX rates rates rates rates £m £m £m £m £m £m US $ 275.0 (15.0) 260.0 75.4 (4.1) 71.3 Canadian $ 55.9 0.1 56.0 5.2 - 5.2 Aus

  30. Slide 30: Appendix 7 - Canada restatement by division

    The Weir Group PLC 2011 Interim results 30 Appendix 7 – Canada restatement by division H1 2010 Revenue H1 2010 Operating Profit (1) Published Canada Restated Published Canada Restated £m £m £m £m £m £m Minerals 421.8 2.1 423.9 84.3 (0.1) 84.2 Oil & Gas 223.8 2.5 226.3 60.9 (0.2) 60.7 Power & Industr

  31. Slide 31: Appendix 8 - Canada restatement by division

    The Weir Group PLC 2011 Interim results 31 Appendix 8 – Canada restatement by division H1 2010 Input Published Canada Restated FX Restated £m £m £m £m £m Minerals 483.2 2.2 485.4 7.1 492.5 Oil & Gas 224.3 1.8 226.1 (9.4) 216.7 Power & Industrial 138.9 (4.0) 134.9 (2.1) 132.8 Group Companies 16.7 - 1

  32. Slide 32: 2011 Interim Results

    The Weir Group PLC 2011 Interim results 2011 Interim Results London, 2 August 2011 This 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, all statements

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