Weir Group PLC · LSE:WEIR
Weir — The Weir Group — Investor Presentation (June 2008)
24 slides from Weir's investor presentation, Jun 23, 2008
Slide 1: Australia House
The Weir Group PLC Excellent Engineering Solutions Australia House Monday 23 June 2008
Slide 2: 2002 – a new strategy and structure
The Weir Group PLC Excellent Engineering Solutions Our journey to sector best performance 2002 – a new strategy and structure CORE VALUES ORGANISATION STRUCTURE Mark Selway (CEO) Defence, Valves & Nuclear Minerals Clear Liquid Controls Services & Gas Scot Smith Stephen Bird Phil Clifton Steve Simone
Slide 3: Focusing on attractive core markets
The Weir Group PLC Excellent Engineering Solutions Our journey to sector best performance Focusing on attractive core markets REALIGNING TO MOST ATTRACTIVE MARKETS - 2001 ACTIVE MANAGEMENT Division TECHNA OF PORTFOLIO MINERALS CLEAR VALVES SERVICES Desalination/ Naval/ Facts Water Nuclear Treatment
Slide 4: Improving our Performance – The Weir Production System
The Weir Group PLC Excellent Engineering Solutions Our journey to sector best performance Improving our Performance LEAN “The Weir Production System (WPS)” Before After INVESTMENTS LOST TIME ACCIDENTS BEST PRACTICE 350 300 250 200 150 100 50 0 New equipment at SPM 2001 2002 2003 2004 2005 2006 2007
Slide 5: Acquiring & integrating aligned businesses
The Weir Group PLC Excellent Engineering Solutions Our journey to sector best performance Acquiring & integrating aligned businesses GABBIONETA SPM CH WARMAN MULTIFLO Recycling non core, low margin GREENFIELDS activities into high growth Weir Services: markets • Western Australia • Saudi Arabia •
Slide 6: How a sector focus will help us grow
The Weir Group PLC Excellent Engineering Solutions How a sector focus will help us grow A global view of sector opportunities Mining Oil & Gas Power & Industrial Extend product offerings Direct relationship including aftermarket services between sector outlook and Weir share price 6
Slide 7: 2007 Revenue and profit comparisons
The Weir Group PLC Excellent Engineering Solutions 2007 Revenue and profit comparisons Revenue Operating Profit 2007 2006 Growth 2007 2006 Growth Minerals 522.8 444.5 18% 74.3 58.7 27% Oil & Gas (excl SPM) 103.0 88.3 17% 14.8 7.9 87% SPM 78.7 - - 19.0 - - Oil & Gas total 181.7 88.3 106% 33.8 7.9 328
Slide 8: Minerals Division
The Weir Group PLC Excellent Engineering Minerals Solutions Minerals Division Financial Highlights Re-alignment 2007 2006 Var Previously in Clear Division: Consolidated £m £m % Â Weir Floway Order input 600.0 480.7 +25% Â Weir Lewis Revenue 522.8 444.5 +18% Previously in Services Division: Operating
Slide 9: Oil & Gas Division
Excellent The Weir Group PLC Oil & Gas Solutions Oil & Gas Division Financial Highlights Re-alignment 2007 2006 Var Previously in Clear Division: Consolidated £m £m % Â Weir SPM Order input 162.1 106.5 +52% Â Weir Gabbioneta Revenue 181.7 88.3 +106% Previously in Services Division: Operating profit
Slide 10: Power & Industrial Division
The Weir Group PLC Excellent Power & Industrial Solutions Power & Industrial Division Financial Highlights Re-alignment 2007 2006 Var Previously in Valves Division: Consolidated £m £m % Â All existing companies Previously in Clear Division: Order input 199.1 182.3 +9% Â Weir Specialty Pumps Revenue
Slide 11: Group Businesses
The Weir Group PLC Excellent Power & Industrial Solutions Group Businesses Financial Highlights Weir LGE 2007 2006 Var Consolidated £m £m % Order input 61.8 147.4 -58% Revenue 113.6 103.6 +10% Operating profit 5.2 2.7 +93% Weir Distribution Canada Margin 4.6% 2.6% +2.0% 2007 Input Water Weir Materia
Slide 12: Reorganisation summary
The Weir Group PLC Excellent Engineering Solutions Reorganisation summary 3 sector-focused divisions: Estimated global mining Capex Forward oil curve Installed capacity reaching 40 years to 2012 – by region Source: CRU Source: Bloomberg Source: Alstom, UDI Aggregate mining capex is forecast to grow
Slide 13: Trading update
The Weir Group PLC Excellent Engineering Solutions Trading update In the first half of 2008, the Group expects to deliver growth in revenue and profit when compared to same period in 2007. Expected to deliver stronger Expected to deliver better Expected to deliver better first half result, due to:
Slide 14: Australia House
The Excellent The Weir Weir Group Group PLC PLC Excellent Engineering Engineering Solutions Solutions Australia House Monday 23 June 2008 Keith Cochrane 14
Slide 15: Revenue, operating profit and margin
The Weir Group PLC Excellent Engineering Solutions Revenue (1), operating profit (2) and margin 2007 2006 Revenue Operating Margin % Revenue Operating Margin % £m Profit £m £m profit £m Minerals 522.8 74.3 14.2% 444.5 58.7 13.2% Power & Industrial 190.7 12.4 6.5% 168.9 8.5 5.0% Oil & Gas (3) 181.7 3
Slide 16: 2007 Revenues and Operating Profit by Division – Core markets
The Weir Group PLC Excellent Engineering Solutions 2007 Revenues(1) and Operating Profit(1)(2) by Division – Core markets 2007 Revenue(1) by Division £895.2m 2007 operating profit(1) by Division £120.5m £190.7m, £12.4m, 21% 10% £522.8m, £181.7m, 59% £33.8m, 20% 28% £74.3m, 62% Minerals Oil & Gas Pow
Slide 17: 2007 Revenue by geography – Core markets
The Weir Group PLC Excellent Engineering Solutions 2007 Revenue(1) by geography £895.2m Core markets £29.6m, 3% £41.7m, 5% £70.3m, 8% £289.0m, 32% £117.0m, 13% £170.4m, 19% £177.2m, 20% North America EU Asia South America Middle East Africa Others (1) Revenues for core markets only 17
Slide 18: Minerals revenue and margin
The Weir Group PLC Excellent Engineering Solutions Minerals revenue(1) and margin (2) £300.0m £276.6m 15.0% £237.9m £246.3m £250.0m 14.5% £206.7m 14.5% £200.0m 14.0% 13.9% £150.0m 13.5% 13.4% £100.0m 13.0% 12.9% £50.0m 12.5% £.0m 12.0% 2006 H1 2006 H2 2007 H1 2007 H2 Revenue Margin (1) 2006 restated
Slide 19: Power & Industrial revenue and margin
The Weir Group PLC Excellent Engineering Solutions Power & Industrial revenue(1) and margin(2) £120.0m 15.0% £102.8m 13.0% £100.0m £93.1m £87.9m 11.0% £80.0m £75.8m 9.0% £60.0m 8.2% 7.0% 6.5% 5.0% £40.0m 4.5% 3.0% 3.2% £20.0m 1.0% £.0m -1.0% 2006 H1 2006 H2 2007 H1 2007 H2 Revenue Margin (1) 2006 re
Slide 20: Oil & Gas revenue and margin
The Weir Group PLC Excellent Engineering Solutions Oil & Gas revenue(1) and margin(2) 30.0% £140.0m £130.8m 25.0% £120.0m £100.0m 20.0% 19.1% £80.0m 15.0% £60.0m £50.6m £50.9m 10.0% £37.7m £40.0m 10.7% 7.7% 5.0% £20.0m 4.6% £.0m 0.0% 2006 H1 2006 H2 2007 H1 2007 H2 Revenue Margin (1) 2006 restated a
Slide 21: Pro forma 2007 revenue by division and geography – core markets
The Weir Group PLC Excellent Engineering Solutions Pro forma(1) 2007 revenue(2) by division and geography – core markets Pro forma 2007 revenue(2) of £1,039.4m Revenue by Division Revenue by Geography £31.9m, 3% £80.3m, 8% £280.7m, 27% £70.3m, 7% £375.9m, 36% £117.0m, 11% £179.9m, 17% £190.7m, 18% £
Slide 22: Pro forma net debt
The Weir Group PLC Excellent Engineering Solutions Pro forma net debt £300m £114m £(65)m £225m £220m £150m £171m £75m 28 Dec CHW 28 Dec S&H 2007 acquisition(1) 2007 disposal(2) Actual Pro forma (1) As disclosed in company announcement dated 4 December 2007 (2) As disclosed in company announcement da
Slide 23: Acquisition strategy
The Weir Group PLC Excellent Engineering Solutions Acquisition strategy Targeting acquisitions that fit − Focus on higher margin products in higher growth end markets − Mechanical engineering products and services − Margin in mid-teens or capable of getting there − Good market position − Significa
Slide 24: Questions
The Excellent The Weir Weir Group Group PLC PLC Excellent Engineering Engineering Solutions Solutions Questions 24