Weir Group Plc · LSE:WEIR
Weir — The Weir Group — H1 2004 Earnings Presentation
28 slides from Weir's earnings presentation, Aug 25, 2004
Slide 1: 2004 Interim Results
Excellent The Weir Group PLC Analysts Presentation Engineering London, 25 August 2004 Solutions 2004 Interim Results
Slide 2: Agenda
The Weir Group PLC Excellent Engineering Solutions Agenda Introduction & Financial Highlights Sir Robert Smith Financial review Chris Rickard Input and Operational review Mark Selway Outlook Mark Selway Questions and Answers All 2
Slide 3: Interim Financial Highlights 2004
City Presentation 2001 The Weir Group PLC Excellent Engineering Solutions Interim Financial Highlights 2004 Group Results 2004 Consolidated 2004 Variance £m % Order Input (2) 451.6m Up 25.4% Turnover 392.4m Down 0.3% Pre-tax profit (1) 24.6m Up 4.2% Earnings per share (1) 9.1p Up 2.2% Dividend 3.45p
Slide 4: Consolidated Profit and Loss
The Weir Group PLC Excellent Engineering Solutions Consolidated Profit and Loss First Half 2004 First Half 2003 £m £m Turnover Group Operations 338.4 342.9 JVs / Associates 54.0 50.8 392.4 393.7 Operating Profit Group Operations 21.1 21.4 JVs / Associates 4.4 5.3 Operating Profit 25.5 26.7 Net Inter
Slide 5: Turnover
The Weir Group PLC Excellent Engineering Solutions Turnover £m Turnover from Group Operations 2003 As Reported 342.9 Translation effect (8.4) 2003 Turnover at 2004 Rates 334.5 Increase from trading 3.9 2004 Turnover from Group Operations 338.4 JV’s and Associates 54.0 2004 Group Turnover 392.4 5
Slide 6: Consolidated Profit and Loss
The Weir Group PLC Excellent Engineering Solutions Consolidated Profit and Loss First Half 2004 First Half 2003 £m £m Turnover Group Operations 338.4 342.9 JVs / Associates 54.0 50.8 392.4 393.7 Operating Profit Group Operations 21.1 21.4 JVs / Associates 4.4 5.3 Operating Profit 25.5 26.7 Net Inter
Slide 7: Operating Profit - Bridge
The Weir Group PLC Excellent Engineering Solutions Operating Profit - Bridge £m £m JV & Associates To 27.06.2003 5.3 Reduction in 2004 (0.9) 4.4 Group Operations To 27.06.2003 21.4 Increase due to Trading 1.0 LTIP Charge (0.4) Foreign Exchange Translation (0.6) FRS 17 Curtailment (0.3) 21.1 25.5 7
Slide 8: Consolidated Profit and Loss
The Weir Group PLC Excellent Engineering Solutions Consolidated Profit and Loss First Half 2004 First Half 2003 £m £m Turnover Group Operations 338.4 342.9 JVs / Associates 54.0 50.8 392.4 393.7 Operating Profit Group Operations 21.1 21.4 JVs / Associates 4.4 5.3 Operating Profit 25.5 26.7 Net Inter
Slide 9: Divisional Split – H1 Turnover
The Weir Group PLC Excellent Engineering Solutions DIVISIONAL SPLIT – H1 Turnover Turnover Operating Profit (1) Margin % H1 H1 (2) H1 H1(2) H1 H1 2004 2003 2004 2003 2004 2003 £m £m £m £m Engineering Products 204.5 211.0 13.6 16.4 6.6% 7.8% Engineering Services 93.5 87.5 9.5 7.4 10.2% 8.5% Techna 40
Slide 10: Cash Flow – H1 2004
The Weir Group PLC Excellent Engineering Solutions Cash Flow – H1 2004 H1 2004 H1 2003 £m £m Operating Profit 21.1 21.4 Depreciation 7.4 7.9 Working Capital (12.5) (22.1) Other 0.9 1.3 Funds generated by Operations 16.9 8.5 Capital Expenditure (10.0) (7.8) Net Cash Inflow from Operations 6.9 0.7 10
Slide 11: Cash Flow – H1 2004
The Weir Group PLC Excellent Engineering Solutions Cash Flow – H1 2004 H1 2004 H1 2003 £m £m Net Cash Inflow from Operations 6.9 0.7 Net Interest (1.9) (1.8) Tax (4.5) (3.4) Net Dividends (paid) / received (17.3) (17.5) Funding of pension & post retirement costs (12.2) (10.6) Acquisitions / Disposal
Slide 12: Balance Sheet – H1 2004
The Weir Group PLC Excellent Engineering Solutions Balance Sheet – H1 2004 H1 2004 Dec 2003 £m £m Net Tangible Assets 218.6 192.5 Goodwill 103.6 113.9 Net Pension Deficit (63.5) (72.7) Net (Debt) / Funds (23.2) 0.5 Net Assets 235.5 234.2 Share Capital & Reserves 235.5 234.2 12
Slide 13: Exchange rates – H1 2004
The Weir Group PLC Excellent Engineering Solutions Exchange rates – H1 2004 H1 2004 H1 2003 Movement average rate average rate Currency USD 1.82 1.61 -11.5% AUD 2.48 2.59 4.4% EUR 1.49 1.45 -2.7% 13
Slide 14: IFRS
The Weir Group PLC Excellent Engineering Solutions IFRS Transitional arrangements on course Accounting policy changes Hedge accounting Development costs Borrowing costs Deferred taxation Acquisitions – non amortisation of goodwill; amortisation of acquired intangibles 14
Slide 15: 2004 Interim Results
Excellent The Weir Group PLC Analysts Presentation Engineering London, 25 August 2004 Solutions 2004 Interim Results
Slide 16: Order Input by Division - Continuing Operations
The Weir Group PLC Excellent Engineering Solutions Order Input by Division - Continuing Operations (1) Consolidated 2004 2003 Variance £m £m % Minerals 125.8 108.9 +15.6% Clear Liquid 82.8 65.8 +25.8% Services 103.2 101.6 +1.5% Valves 32.7 28.2 +16.2% Techna 107.1 55.5 +92.9% Total 451.6 360.0 +25.4
Slide 17: Order Input by Division - Continuing Operations
The Weir Group PLC Excellent Engineering Solutions Order Input by Division - Continuing Operations (1) Non Techna 2004 2003 Variance £m £m % Minerals 125.8 108.9 +15.6% Clear Liquid 82.8 65.8 +25.8% Services 103.2 101.6 +1.5% Valves 32.7 28.2 +16.2% Sub Total 344.5 304.5 +13.1% Techna 107.1 55.5 +92
Slide 18: Order input by geographic location
The Weir Group PLC Excellent Engineering Solutions Order input by geographic location (1) (Continuing Operations) 2004 2003 Variance £m £m % Americas 138.4 111.5 +24.1% United Kingdom 82.5 84.4 -2.3% Middle East / Africa 71.8 58.9 +21.9% Europe & FSU 45.2 42.4 +6.4% Australia 34.8 28.8 +21.1% Indo P
Slide 19: Order input by sector
The Weir Group PLC Excellent Engineering Solutions Order input by sector (1) (Continuing operations) 2004 2003 Variance 2004 Total £m £m % Input General industrial 76.5 62.2 +22.9% Naval & marine General 9% industrial Minerals processing 113.3 91.5 +23.8% Water & 17% waste water Oil & gas 97.1 57.9
Slide 20: Operational Review
The Weir Group PLC Analysts Presentation Excellent Engineering London, 25 August 2004 Solutions Operational Review
Slide 21: Weir Minerals Division H1 2004 performance £126m
The Weir Group PLC Excellent ORDER INPUT Engineering Solutions Weir Minerals Division £126m H1 2004 performance Up 15.6% Sector Summary Improving Operational Performance 100 80 On-time delivery Lost Time 94% Accidents 60 Down 68% £m 40 20 0 June 04 June 04 General Minerals Oil & Water Power Industri
Slide 22: Weir Clear Liquid Division H1 2004 performance £82.8m
The Weir Group PLC Excellent ORDER INPUT Engineering Solutions Weir Clear Liquid Division £82.8m H1 2004 performance Up 25.8% Sector Summary New Products/ Best Practice Benchmarking 25 Lean Manufacturing 20 before 15 £m 10 5 0 General Minerals Oil Power Water Industrial H1 2004 7.4 13.3 24.3 16.8 19
Slide 23: Weir Valves & Controls Division H1 2004 performance £32.7m
The Weir Group PLC Excellent ORDER INPUT Engineering Solutions Weir Valves & Controls Division £32.7m H1 2004 performance Up 16.2% 20 Sector Summary Improving Operational Performance 15 On-time delivery Lost Time 63% Accidents £m 10 Down 95% 5 0 Power General Industrial Oil & Water H1 2004 19.4 6.6
Slide 24: Weir Services Division H1 2004 performance £103.2m
The Weir Group PLC Excellent ORDER INPUT Engineering Solutions Weir Services Division £103.2m H1 2004 performance Up 1.5% Sector Summary Market Expansion continues 30 Malaysia 25 20 £m 15 10 5 MALAYSIA 0 General Minerals Oil Naval Power Water Industrial H1 2004 8.1 25.3 25.5 5.3 19.5 19.3 H1 2003 8
Slide 25: Weir Techna Division H1 2004 performance £107.1m
The Weir Group PLC Excellent ORDER INPUT Engineering Solutions Weir Techna Division £107.1m H1 2004 performance Up 92.9% Sector Summary Key Projects Progressing 40.0 35.0 30.0 25.0 £m 20.0 15.0 10.0 5.0 0.0 Marine Water Power Oil H1 2004 34.1 5.6 9.0 36.0 H1 2003 22.6 16.9 10.8 1.7 % Var 50.7% -66.5
Slide 26: H1 2004 Weir Group Scorecard
The Weir Group PLC Excellent Engineering Solutions H1 2004 Weir Group Scorecard 9 Excellent level of order input On-time delivery at 63% 9 Operational improvements in most divisions June 04 9 New products launched Lost Time X Valves Division performed below expectations Accidents 9 Solid balance she
Slide 27: Outlook
The Weir Group PLC Excellent Engineering Solutions Outlook Minerals has strong momentum and should deliver further improvements in the balance of 2004 Clear Liquid is expected to deliver stronger second half performance due to strengthened order book Valves is expected to make progress against
Slide 28: No change in our journey to excellence
The Weir Group PLC Excellent Engineering Solutions No change in our journey to excellence 2001 2002 2003 2004 2005 2006 A watershed year A programme of transition Building on Potential Positioned for growth • Market review • Structure and competency • Performance benefits • Improved competitive Sect