Weir Group PLC · LSE:WEIR
Weir — The Weir Group — FY2009 Earnings Presentation
31 slides from Weir's earnings presentation, Mar 9, 2010
Slide 1: 2009 Preliminary Results
The Weir Group PLC Analysts’ presentation 2009 Preliminary Results London, 9 March 2010 Excellent Engineering Solutions
Slide 2: Highlights
The Weir Group PLC 2009 Preliminary Results Presentation 2 Highlights Chairman, Lord Smith of Kelvin Weir Power & Industrial - Suzhou, China Excellent Engineering Solutions
Slide 3: Highlights Continuing operations
The Weir Group PLC 2009 Preliminary Results Presentation 3 Highlights Continuing operations Order input (1) £1.3b 18% lower Record profit in a difficult global environment Profit before tax (2) Exceptional cash performance £187.0m Up 6% Strength of business model reinforced Cash generated from
Slide 4: Financial Review
The Weir Group PLC 2009 Preliminary Results Presentation 4 Financial Review John Heasley Weir Minerals, Sao Paulo, Brasil Excellent Engineering Solutions
Slide 5: Results summary
The Weir Group PLC 2009 Preliminary Results Presentation 5 Results summary (1) 2009 2008 £m £m Revenue 1390.2 1353.6 Operating profit 204.7 185.0 Operating margins 14.7% 13.7% Net finance costs (17.7) (8.8) Profit before tax 187.0 176.2 Profit for the period 134.8 124.4 Effective tax rate 27.9% 29.4
Slide 6: Order input
The Weir Group PLC 2009 Preliminary Results Presentation 6 Order input (1) Input OE / Aftermarket 100 18% lower (total and like for like) - mainly lower mining capex 80 53 52 42 OE 34% lower - resilient aftermarket 2% lower (%) 60 40 Emerging markets input represents 41% of total 20 47 48 58 0
Slide 7: Revenue
The Weir Group PLC 2009 Preliminary Results Presentation 7 Revenue Revenue OE / Aftermarket 100 7% lower (total and like for like) in constant currency 80 55 50 46 60 Mainly due to SPM, non-core LGE and prior year disposals (%) 40 45 50 54 Aftermarket content increases from 50% to 54% 20 0 200
Slide 8: Operating profit
The Weir Group PLC 2009 Preliminary Results Presentation 8 Operating profit (1) Operating profit (1) 250 11% higher helped by favourable exchange (£29.4m) and prior year 200 185.0 204.7 (£m) acquisition / disposals (£10.7m) 150 116.9 Like for like constant currency 10% lower mainly due to SPM 10
Slide 9: Cash flow
The Weir Group PLC 2009 Preliminary Results Presentation 9 Cash flow Working capital as % of revenue (1) 16 14.7 14 13.0 12 10.0 2009 2008 (%) 10 8 £m £m 6 4 Operating cash flows - pre working capital 236.1 223.4 2 0 Working Capital 66.2 (9.0) 2007 2008 2009 Debtors days (1) Operating cash flows 302
Slide 10: Finance costs & net debt
The Weir Group PLC 2009 Preliminary Results Presentation 10 Finance costs & net debt Finance Costs 2009 2008 £m £m Underlying interest 13.4 16.0 Finance costs higher due to: Interest differential Interest rate swap cancellations (0.9) 3.7 (5.4) - reduced interest rate differential on balance she
Slide 11: Strong balance sheet
The Weir Group PLC 2009 Preliminary Results Presentation 11 Strong balance sheet Funding sources post private placement 2007Private Good mix of funding sources and maturities placement £m£155m £625m bank facilities committed to Q3 2011 Bank $250m fixed rate notes issued in January 2010 - matur
Slide 12: Summary
The Weir Group PLC 2009 Preliminary Results Presentation 12 Summary 2008 £m Another year of revenue, margins and profit growth Driven by aftermarket resilience and cost base management Excellent cash generation Dividend increased by 14% Strong balance sheet provides significant financial h
Slide 13: Business Review & Priorities
The Weir Group PLC 2009 Preliminary Results Presentation 13 Business Review & Priorities CEO, Keith Cochrane Weir SPM, Texas, USA Excellent Engineering Solutions
Slide 14: Key achievements
The Weir Group PLC 2009 Preliminary Results Presentation 14 LTAs Key achievements 83 90 78 80 70 Drive for operational excellence and customer focus 60 50 40 40 On time delivery improvement 30 20 Roll out of Weir Commercial System 10 0 Working capital management 2007 2008 2009 EPS (1) 70 64.
Slide 15: Driving growth the Weir way
The Weir Group PLC 2009 Preliminary Results Presentation 15 Driving growth the Weir way Building on an excellent platform Customer driven product & service innovation Investment in engineering skills & product development Broaden and deepen product portfolio Collaborative mindset Build c
Slide 16: Minerals Division Business review
The Weir Group PLC 2009 Preliminary Results Presentation 16 Minerals Division Input by sector % Business review 9 3 9 Minerals £m H1 H2 2009 2008 (1) +/-% Oil & Gas 9 Power Input OE 152 146 298 466 -36% Industrial 70 Other Input aftermarket 211 209 420 431 -3% Input Total 363 355 718 897 -20% Input
Slide 17: Minerals Division 2010 Priorities
The Weir Group PLC 2009 Preliminary Results Presentation 17 Minerals Division 2010 Priorities Product innovation and development Roll out pump enhancements Improved product wear life Oil sands / FGD opportunities Facility Investment China South America Australia Drive complementary
Slide 18: Oil & Gas Division Business review
The Weir Group PLC 2009 Preliminary Results Presentation 18 Oil & Gas Division Input by sector % Business review Minerals £m H1 H2 2009 2008 (1) +/-% Oil & Gas Power Input OE 68 58 126 158 -20% Industrial Input aftermarket 87 92 179 174 +3% 97 Input Total 155 150 305 332 -8% Input by geography % Rev
Slide 19: Oil & Gas Division 2010 Priorities
The Weir Group PLC 2009 Preliminary Results Presentation 19 Oil & Gas Division 2010 Priorities Extend SPM Emerging markets Australia - PCS acquisition Continued product innovation and development SPM product enhancement Gabbioneta pump development Services Leveraging our key accounts
Slide 20: Power & Industrial Division Business review
The Weir Group PLC 2009 Preliminary Results Presentation 20 Power & Industrial Division Business review Input by sector % 4 11 11 Oil & Gas £m H1 H2 2009 2008 (1) +/-% Power 18 Industrial Input OE 53 55 108 132 -18% Water Others 56 Input aftermarket 86 72 158 157 +1% Input Total 139 127 266 289 -8%
Slide 21: Power & Industrial Division 2010 Priorities
The Weir Group PLC 2009 Preliminary Results Presentation 21 Power & Industrial Division 2010 Priorities Product innovation and development Nuclear valve approval Next generation products Expand low cost supply chain China / India sourcing Extend product offering and sales route to market
Slide 22: 2010 Group priorities
The Weir Group PLC 2009 Preliminary Results Presentation 22 2010 Group priorities Extend operational excellence beyond factory floor Customer focus - Net Promoter Score Procurement and low cost sourcing Best practice sharing Build organisational capability to support growth Product and s
Slide 23: Medium term fundamentals
The Weir Group PLC 2009 Preliminary Results Presentation 23 Medium term fundamentals Total global ore production Million tonnes of ore Minerals 6000 5000 4000 Forecast global ore production growth 3000 2000 1000 0 Driver of aftermarket growth 2009 2010f 2011f Underpinned by emerging market dem
Slide 24: 2010 Outlook
The Weir Group PLC 2009 Preliminary Results Presentation 24 2010 Outlook Stabilisation of Minerals order input OE enquiry levels up, timing of order conversion uncertain Lower OE revenues in first part of 2010 Stronger current trading, driving a more positive outlook for SPM Anticipate mor
Slide 25: Q&As
The Weir Group PLC 2009 Preliminary Results Presentation 25 Q&As Weir Power & Industrial - Suzhou, China Excellent Engineering Solutions
Slide 26: Appendix 1 - Order input by division
The Weir Group PLC 2009 Preliminary Results Presentation 26 Appendix 1 - Order input by division 2009 2008 (1) Variance £m £m +/-% Minerals 718.5 897.1 -20% Oil & Gas 305.2 331.9 -8% Power & Industrial 266.3 289.4 -8% Group Companies 11.9 76.4 -84% Order input 1,301.9 1,594.8 -18% (1) 2008 restated
Slide 27: Appendix 2 - Revenue by division
The Weir Group PLC 2009 Preliminary Results Presentation 27 Appendix 2 - Revenue by division 2009 £m Total Like for Like (2) 2009 2008 (1) Variance 2009 2008 (1) Variance £m £m +/-% £m £m +/-% Minerals 813.3 825.4 -1% 734.5 772.8 -5% Oil & Gas 299.0 322.8 -7% 287.1 313.1 -8% Power & Industrial 242.0
Slide 28: Appendix 3 - Operating profit by division
The Weir Group PLC 2009 Preliminary Results Presentation 28 Appendix 3 - Operating profit (1) by division Total Like for Like (4) 2009 2008 (2) 2009 2008 (2) £m £m £m £m Minerals 133.6 130.4 118.6 121.0 Oil & Gas (3) 52.0 72.8 49.4 70.8 Power & Industrial 23.0 19.9 23.0 19.9 Group companies 6.8 2.0
Slide 29: Appendix 4 - Foreign exchange by division
The Weir Group PLC 2009 Preliminary Results Presentation 29 Appendix 4 - Foreign exchange by division 2008 Revenue 2008 Operating Profit (1) Published FX Restated Published FX Restated £m £m £m £m £m £m Minerals 742.4 83.0 825.4 114.5 15.9 130.4 Oil & Gas 279.9 42.9 322.8 61.0 11.8 72.8 Power & Indu
Slide 30: Appendix 5 - Foreign exchange by currency
The Weir Group PLC 2009 Preliminary Results Presentation 30 Appendix 5 - Foreign exchange by currency 2008 Revenue 2008 Operating Profit (1) At 2008 At 2009 At 2008 At 2009 FX FX rates rates rates rates £m £m £m £m £m £m US $ 402.5 73.4 475.9 90.9 17.2 108.1 Canadian $ 112.5 11.0 123.5 14.7 1.3 16.0
Slide 31: 2009 Preliminary Results
The Weir Group PLC Analysts’ presentation 2009 Preliminary Results London, 9 March 2010 This 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, al