Weir Group Plc · LSE:WEIR
Weir — The Weir Group — FY2007 Earnings Presentation
27 slides from Weir's earnings presentation, Mar 11, 2008
Slide 1: 2007 Full Year Results
The Weir Group PLC Excellent Engineering Solutions The Weir Group PLC Analysts Presentation 2007 Full Year Results London, 11 March 2008
Slide 2: Our journey to excellence has served us well
The Weir Group PLC Excellent Engineering Solutions Our journey to excellence has served us well 2002 2007 Improvement Sector focused: Margins 7.3% 11.2% 53% 88% of total input: Working capital 18% 10% 44% - Mining - Oil & gas Market cap £430m £1700m 295% - Power & industrial Power generation General
Slide 3: Financial Highlights 2007
The Weir Group PLC Excellent Engineering Solutions Financial Highlights 2007 (Continuing Operations) Order Input (1) £1,095.3m Up 10% Revenue Dividend £1,060.6m Up 22% 16.5p Up 14% Cash generated from Operations Operating Profit (2) £151.8m Up £40.8m £122.1m Up 57% Earnings per share(2) Profit befor
Slide 4: Financial Review
The Weir Group PLC Excellent Engineering Solutions Keith Cochrane - Financial Director Financial Review 4
Slide 5: Consolidated Income Statement
The Weir Group PLC Excellent Engineering Solutions Consolidated Income Statement 2007 2006 £m £m Revenue - Continuing Operations 1060.6 870.4 Operating Profit from Continuing Operations (1) 122.1 77.7 Exceptional Items – 15.7 Intangibles Amortisation (6.2) (2.3) Operating profit from Continuing Oper
Slide 6: Consolidated Income Statement
The Weir Group PLC Excellent Engineering Solutions Consolidated Income Statement 2007 2006 £m £m EPS - Continuing (1) 41.4p 27.8p EPS - Total Operations 83.8p 39.4p Dividend per share 16.5p 14.5p (1) Before exceptional items and intangibles amortisation 6
Slide 7: Revenue Up £190.2m
The Weir Group PLC Excellent Engineering Solutions Revenue Up £190.2m Continuing Operations 2007 2006 £m £m Engineering Products (1) 632.9 525.5 +20% Weir SPM 78.7 - Engineering Products - Total (1) 711.6 525.5 +35% Engineering Services (1) 231.4 221.7 +4% Defence, Nuclear & Gas (1) 117.6 107.3 +10%
Slide 8: Operating Profit Up £44.4m
The Weir Group PLC Excellent Engineering Solutions (1) Operating Profit Up £44.4m Continuing Operations 2007 2006 Variance 2007 2006 £m £m £m % % Engineering Products (2) 79.6 58.1 21.5 12.6 11.1 Weir SPM 19.1 - 19.1 24.3 - Engineering Products - Total (2) 98.7 58.1 40.6 13.9 11.1 Engineering Servic
Slide 9: Discontinued Operations
The Weir Group PLC Excellent Engineering Solutions Discontinued Operations 2007 2006 £m £m Trading Results (After Tax) Weir Pumps 5.2 3.2 DML 3.3 8.1 8.5 11.3 Exceptional Items - Gain on Sale (After Tax) Weir Pumps 26.0 - DML 54.9 - 80.9 - Previous years disposals (After Tax) 3.3 1.4 Profit from dis
Slide 10: Net Interest Expense
The Weir Group PLC Excellent Engineering Solutions Net Interest Expense Continuing Operations 2007 2006 Variance £m £m £m Interest Costs (12.7) (10.8) (1.9) Interest Income 7.6 5.3 2.3 Net Interest Costs (5.1) (5.5) 0.4 Other Finance Income - retirement benefits 3.2 4.9 (1.7) (1.9) (0.6) (1.3) 10
Slide 11: Taxation
The Weir Group PLC Excellent Engineering Solutions Taxation Profit Before Tax Tax Rate £m £m % Continuing Operations: - before intangibles amortisation 120.2 (33.8) 28.1% - intangibles amortisation (6.2) 2.1 Reported in Income Statement 114.0 (31.7) 27.8% 11
Slide 12: Cash Flow and Net Debt - Continuing Operations
The Weir Group PLC Excellent Engineering Solutions Cash Flow and Net Debt - Continuing Operations 2007 2006 £m £m Operating cash flows - pre working capital 141.2 93.1 Working Capital 10.6 17.9 Operating cash flows 151.8 111.0 Special Pension Contribution (6.5) (7.0) Interest and tax (38.2) (21.4) N
Slide 13: Pensions
The Weir Group PLC Excellent Engineering Solutions Pensions Year end net surplus £36.9m (2006 net deficit: £3.9m) − Net actuarial gain £29.5m − Special contribution £6.5m Legal & General insurance policy − 43% of scheme total liabilities − Substantially reduces investment/mortality risk Simila
Slide 14: Financial Summary
The Weir Group PLC Excellent Engineering Solutions Financial Summary 3 Operating profit of £122.1m, up £44.4m (57%). (1) 3 Operating cash flow of £151.8m, up £40.8m. (1) 3 EPS - 41.4p (up 49%). (1) 3 Net debt of £171.3m. 3 Dividend 16.5p per ordinary share, up 14%. (1) From Continuing Operations, be
Slide 15: Input & Operational Review
The Weir Group PLC Excellent Engineering Solutions Mark Selway - CEO Input & Operational Review 15
Slide 16: Order Input by Division - Continuing Operations
The Weir Group PLC Excellent Engineering Solutions Order Input 1 by Division - Continuing Operations Consolidated 2007 2006 Variance £m £m % Engineering Products 760.7 585.2 +30% Engineering Services 250.6 232.9 +8% Defence, Nuclear & Gas 84.0 179.3 -53% Total 1,095.3 997.4 +10% Engineering Products
Slide 17: Order input by sector - Continuing Operations
The Weir Group PLC Excellent Engineering Solutions Order input 1 by sector - Continuing Operations 2007 2006 Variance £m £m % Mining 398.5 309.7 +29% 2007 Input Oil & gas 277.5 194.3 +43% General industrial Power generation 10% 17% Water & waste Power generation 181.7 135.9 +34% water 4% General ind
Slide 18: Order input by geography - Continuing Operations
The Weir Group PLC Excellent Engineering Solutions Order input 1 by geography - Continuing Operations 2007 2006 Variance £m £m % 2007 Input North America 339.5 259.4 +31% South America UK, Europe & FSU 13% 26% UK, Europe and FSU 282.8 264.1 +7% Middle East & Africa 144.6 113.2 +28% North America Mid
Slide 19: Weir Engineering Products Division 2007 performance
The Weir Group PLC Excellent Engineering Solutions Weir Engineering Products Division 2007 performance Input by industry Financial Highlights Power generation General 15% 2007 2006 Var industrial Consolidated £m £m % 11% Oil & gas Water 22% 95% Order input 760.7 585.2 +30% 5% In core markets Revenue
Slide 20: Minerals – 2007 performance
The Weir Group PLC Excellent ORDER INPUT: £491.2m Up 28% Engineering Solutions Weir Engineering Products Division Minerals – 2007 performance South American pipeline Cyclone products Flue Gas Desulphurisation Acquisition: Multiflo Assembly Weir Minerals NL Expansion in West Australia Acquisition: Wa
Slide 21: Clear Liquid – 2007 performance
The Weir Group PLC Excellent ORDER INPUT: £191.9m Up 43% Engineering Solutions Weir Engineering Products Division Clear Liquid – 2007 performance Gabbioneta product Acquisition: SPM Weir SPM: Lean scores Weir SPM results BEFORE AFTER Gabbioneta lean initiatives Weir Production System Weir SPM: new i
Slide 22: Valves & Controls – 2007 performance
The Weir Group PLC Excellent ORDER INPUT: £77.6m Up 13% Engineering Solutions Weir Engineering Products Division Valves & Controls – 2007 performance China facility Gas well valves, Mid East New facility opens in USA Nuclear valve expansion Steam manifold, China Chinese petrochemical Blakeborough va
Slide 23: Weir Engineering Services Division 2007 performance
The Weir Group PLC Excellent ORDER INPUT: £250.6m Up 8% Engineering Solutions Weir Engineering Services Division 2007 performance SAG mill refurbishment Oil sands Financial Highlights Consolidated 2007 2006 Var £m £m % Order input 250.6 232.9 +8% Revenue 231.4 221.7 +4% Operating profit 18.5 13.1 +4
Slide 24: Weir Defence, Nuclear & Gas Division 2007 performance
The Weir Group PLC Excellent ORDER INPUT: £84.0m Down 53% Engineering Solutions Weir Defence, Nuclear & Gas Division 2007 performance Weir LGE Liquid Gas Applications Financial Highlights Consolidated 2007 2006 Var £m £m % Order input 84.0 179.3 -53% Revenue 117.6 107.3 +10% Operating profit 10.4 10
Slide 25: 2007 Scorecard
The Weir Group PLC Excellent Engineering Solutions 2007 Scorecard 9 Market focused Power General Financial scorecard 88% in generation industrial 17% 10% core Consolidated 2007 2006 Var markets Other 12% % Oil & gas 25% Order input £1,095.3 £997.4 Up 10% Mining 36% Revenue £1,060.6m £870.4m Up 22% O
Slide 26: 2008 Outlook
The Weir Group PLC Excellent Engineering Solutions 2008 Outlook Engineering Products Division Minerals - buoyant markets Clear Liquid -addition of SPM - addition of Warman - operational initiatives Valves & Controls - power generation market - sales and margins will grow Engineering Services Divisio
Slide 27: Thank you
The Weir Group PLC Excellent Engineering Solutions The Weir Group PLC Analysts Presentation Thank you