Weir Group Plc · LSE:WEIR
Weir — The Weir Group — FY2006 Earnings Presentation
27 slides from Weir's earnings presentation, Mar 21, 2007
Slide 1: 2006 Full Year Results
The Weir Group PLC Analysts Presentation Excellent Engineering London, 21 March 2007 Solutions 2006 Full Year Results
Slide 2: Agenda
The Weir Group PLC Excellent Engineering Solutions Agenda Introduction & financial highlights Sir Robert Smith Financial review Keith Cochrane Input and operational review Mark Selway Outlook Mark Selway Questions and answers All 2
Slide 3: Financial Highlights 2006
The Weir Group PLC Excellent Engineering Solutions Financial Highlights 2006 2006 Group Results 2006 Variance Continuing Operations % Order Input (1) £1,099.5m Up 23% Revenue £940.9m Up 19% Operating profit (2) £87.7m Up 32% Pre-tax profit (2) £87.1m Up 40% Earnings per share (2) 32.4p Up 38% Cash g
Slide 4: Financial review
The Weir Group PLC Analysts Presentation Excellent Engineering London, 21 March 2007 Solutions 2006 Full Year Results Financial review 4
Slide 5: Consolidated Income Statement
The Weir Group PLC Excellent Engineering Solutions Consolidated Income Statement 2006 2005 £m £m Revenue – Continuing Operations 940.9 789.4 Profit from Continuing Operations 87.7 66.3 Exceptional items 15.7 (24.7) Operating profit from Continuing Operations 103.4 41.6 Net Interest & Other Finance I
Slide 6: Revenue Up £151.5m
The Weir Group PLC Excellent Engineering Solutions Revenue Up £151.5m Continuing Operations 2006 2005 £m £m Engineering Products (1) 608.5 501.4 +21% Engineering Services (1) 225.2 218.8 +3% Defence, Nuclear & Gas (1) 107.2 68.3 +57% 940.9 788.5 +19% Foreign Exchange - 0.9 Group Operations 940.9 789
Slide 7: Operating Profit Up £21.4m
The Weir Group PLC Excellent Engineering Solutions Operating Profit (1) Up £21.4m Continuing Operations 2006 2005 Variance 2006 2005 £m £m £m % % Engineering Products(1) (2) 62.6 41.9 20.7 10.3 8.4 Engineering Services (2) 12.4 13.6 (1.2) 5.5 6.2 Defence, Nuclear & Gas (2) 9.8 6.7 3.1 9.1 9.8 Centra
Slide 8: Exceptional Items – Continuing Operations
The Weir Group PLC Excellent Engineering Solutions Exceptional Items – Continuing Operations 2006 2005 £m £m Profit on sale of Huddersfield Site 6.8 - Fundamental restructuring costs (1.8) (24.7) Pension Scheme benefit amendments 10.7 - Net exceptional items 15.7 (24.7) 8
Slide 9: Net Interest Expense
The Weir Group PLC Excellent Engineering Solutions Net Interest Expense 2006 2005 Variance £m £m £m Interest Costs (10.8) (6.6) 4.2 Interest Income 5.3 2.0 (3.3) Net Interest Costs (5.5) (4.6) 0.9 Other Finance Income – retirement benefits 4.9 0.5 (4.4) (0.6) (4.1) (3.5) 9
Slide 10: Taxation
The Weir Group PLC Excellent Engineering Solutions Taxation Profit Before Tax Tax Rate £m £m % Excluding exceptional items: - before JVs & Associates 76.6 (19.9) 26 - JVs & Associates 14.2 (3.7) 26 90.8 (23.6) Exceptional items 15.7 (2.7) 17 106.5 (26.3) 25 JVs & Associates (3.7) 3.7 Reported in Inc
Slide 11: Cash Flow and Net Debt
The Weir Group PLC Excellent Engineering Solutions Cash Flow and Net Debt 2006 2005 £m £m Operating cash flows – pre working capital and pension contribution 99.6 76.7 Working Capital 34.9 (5.4) Cash generated from operations 134.5 71.3 Special Pension Contribution (7.0) (10.0) Operating cash flows
Slide 12: Working Capital Cash Flow
The Weir Group PLC Excellent Engineering Solutions Working Capital Cash Flow Continuing operations 2006 2006 Closing Balance Cash Closing Sheet Flow Balance As % of revenue £m Sheet £m 2005 2006 Inventories (7.0) 120.9 15.6 12.8 Trade and other receivables (2.9) 203.8 26.3 21.7 Trade and other payab
Slide 13: Pension and other post-employment benefit plans
The Weir Group PLC Excellent Engineering Solutions Pension and other post-employment benefit plans £m £m Net deficit at Dec 2005 (61.6) Service Costs (5.8) Expected return on plan assets 36.2 Interest cost on plan liabilities (31.3) Other finance income 4.9 Exceptional gain – pension benefit amendme
Slide 14: Financial Summary
The Weir Group PLC Excellent Engineering Solutions Financial Summary Operating profit of £87.7m, up £21.4m (32%). Operating cash flow of £134.5m, up £63.2m. EPS - Continuing Operations (excluding exceptionals), 32.4p (up 38%). Dividend 14.5p per ordinary share, up 10%. Net debt and pension
Slide 15: Input & Operational review
The Weir Group PLC Analysts Presentation Excellent Engineering London, 21 March 2007 Solutions 2006 Full Year Results Input & Operational review
Slide 16: Order Input by Division
The Weir Group PLC Excellent Engineering Solutions Order Input by Division1 2006 2005 Variance Continuing Operations £m £m % Engineering Products 683.8 555.0 +23% Engineering Services 236.6 225.5 +5% Defence, Nuclear & Gas 179.1 112.0 +60% Total 1099.5 892.5 +23% Engineering Products: Minerals 390.5
Slide 17: Order input by geographic location
The Weir Group PLC Excellent Engineering Solutions Order input by geographic location1 2006 2005 Variance Continuing Operations £m £m % Americas 380.0 328.2 +15.8% Indo Pacific 203.4 156.5 +30.0% Europe & FSU 163.0 81.7 +99.5% Middle East / Africa 132.8 111.9 +18.7% United Kingdom 129.3 127.5 +1.4%
Slide 18: Order input by sector
The Weir Group PLC Excellent Engineering Solutions Order input by sector1 2006 Input Continuing operations 2006 2005 Variance Water & waste General industrial £m £m % water 14% 5% >80% of input Minerals processing 308.7 261.0 +18% Naval & marine Oil & gas 225.8 168.4 +34% 16% Minerals processing Pow
Slide 19: Engineering Products Division
The Weir Group PLC Excellent Engineering Solutions Engineering Products Division Sector Summary ORDER INPUT Up 23% Power Oil Minerals Processing £683.8m General Industrial Water Other Financial summary 0% 20% 40% 60% 80% 100% 2006 2005 Var Geographic Summary £m £m % Order input 683.8 555.0 +23% Amer
Slide 20: Minerals – 2006 performance
The Weir Group PLC Excellent Engineering Solutions Weir Engineering Products Division Minerals – 2006 performance 250 Sector Summary MINERALS Up 19% 200 150 ORDER INPUT £m 100 50 £390.5m 0 Minerals Power Gen Ind Oil Other 2006 2005 265.6 228.7 47.2 36.8 45.4 44.5 26.0 11.3 6.3 6.8 Input history % Va
Slide 21: Clear Liquid – 2006 performance
The Weir Group PLC Excellent Engineering Solutions Weir Engineering Products Division Clear Liquid – 2006 performance 100 80 >75% of input Sector Summary CLEAR LIQUID Up 32% 60 ORDER INPUT £m 40 20 £222.7m 0 Oil Gen Ind Power Water Minerals 2006 2005 97.6 62.3 41.0 30.0 34.3 29.7 31.8 33.0 18.1 13.1
Slide 22: Valves & Controls – 2006 performance
The Weir Group PLC Excellent Engineering Solutions Weir Engineering Products Division Valves & Controls – 2006 performance 40 >80% of input Sector Summary VALVES & CONTROLS Up 20% 30 ORDER INPUT £m 20 10 £70.6m 0 Power Oil & Gas Gen Ind Other 2006 39.5 18 12.4 0.6 2005 35.5 12.2 10.6 0.3 Input histo
Slide 23: Weir Engineering Services Division 2006 performance
The Weir Group PLC Excellent Engineering Solutions Weir Engineering Services Division 2006 performance 80 Sector Summary SERVICES Up 5% 60 ORDER INPUT £m 40 20 0 General £236.6m Oil Power Minerals Water Naval Industrial 2006 84.2 53.2 42.6 24.6 17.8 14.1 2005 62.5 80.2 31.5 19.1 18.8 13.4 Financial
Slide 24: Weir Defence, Nuclear & Gas Division 2006 performance
The Weir Group PLC Excellent Engineering Solutions Weir Defence, Nuclear & Gas Division 2006 performance Sector Summary DEFENCE, NUCLEAR 150 & GAS Up 60% 100 £m ORDER INPUT 50 0 Naval & marine Power General Oil £179.1m 2006 164.2 9.8 5.1 0.0 2005 77.0 14.0 0.8 20.3 Financial summary % Var 113% -30%
Slide 25: “Journey to Excellence” scorecard
The Weir Group PLC Excellent Engineering Solutions “Journey to Excellence” scorecard Disposal and closure of 13 9 non core businesses “Best ever results” 9 Focus on power, oil, mining 2002* 2006** Variance and naval & defence 9 Restructured under-performers Input £650.9m £1,099.5m Up 69% Revenue £84
Slide 26: Outlook
The Weir Group PLC Excellent Engineering Solutions Outlook Engineering Products Engineering Services Defence, Nuclear & Division Division Gas Division Expected to deliver Expected to grow Like for like performance growth in revenue, margins and profits is anticipated in 2007. margins and profit when
Slide 27: 2006 Full Year Results
The Weir Group PLC Analysts Presentation Excellent Engineering London, 21 March 2007 Solutions 2006 Full Year Results 27