Weir Group Plc · LSE:WEIR
Weir — The Weir Group — FY2008 Earnings Presentation
26 slides from Weir's earnings presentation, Mar 10, 2009
Slide 1: 2008 Preliminary Results
The Weir Group PLC Excellent Engineering Solutions The Weir Group PLC Analysts’ Presentation 2008 Preliminary Results London, 10 March 2009
Slide 2: Reshaped Group delivering sector best performance
The Weir Group PLC Excellent Engineering Solutions Reshaped Group delivering sector best performance 2002 2008 Improvement Financial Improvements Margins 7.3% 13.3% 82% 1,600 180 159.5 1,353.6 160 1,400 140 1,060.6 114.0 Working capital 18% 12.5% 31% 1,200 940.9 120 1,000 789.4 100 87.1 739.4 £m £m
Slide 3: 2008 Financial Highlights
The Weir Group PLC Excellent Engineering Solutions 2008 Financial Highlights (Continuing Operations) Order Input 1 Profit before tax 2 £1.4b Up 30% £176m Up 53% Earnings Revenue per share 2 £1.35b Up 34% 59.3p Up 49% Operating Profit 2 Dividend £185m Up 58% 18.5p Up 12% Cash generated Operating Marg
Slide 4: Consolidated Income Statement
The Weir Group PLC Excellent Engineering Solutions Consolidated Income Statement 2008 2007 £m £m Revenue - Continuing Operations 1,353.6 1,008.8 Operating Profit from Continuing Operations 1 185.0 116.9 Intangibles Amortisation (16.7) (6.0) Operating Profit from Continuing Operations 168.3 110.9 Net
Slide 5: Group revenue £1,354m - up 34%
The Weir Group PLC Excellent Engineering Solutions Group revenue £1,354m - up 34% Total Like for Like 2 £m 2008 2007 Growth 2008 2007 Growth Minerals 1 742.4 570.1 30% 697.2 570.1 22% Oil & Gas 1 279.9 199.9 40% 122.5 114.7 7% Power & Industrial 1 222.8 201.4 11% 222.8 201.4 11% Group Companies 1 10
Slide 6: Operating profit £185m - up 58%, margins up 1.8%
The Weir Group PLC Excellent Engineering Solutions Operating profit1 £185m - up 58%, margins up 1.8% Total Like for Like 4 2008 2007 2008 2007 Minerals 2 114.5 82.3 107.1 82.3 Oil & Gas 2, 3 61.0 37.6 20.6 17.0 Power & Industrial 2 18.0 13.4 18.0 13.4 Group Companies 2 2.0 5.2 4.6 5.5 Central Costs
Slide 7: Foreign Exchange Sensitivities - 2008
The Weir Group PLC Excellent Engineering Solutions Foreign Exchange Sensitivities - 2008 2008 2008 Operating profit1 £m Operating profit1 sensitivity 1% movement in avg rates £m US $ 90.9 1.0 Australian $ 22.3 0.3 Euro € 38.0 0.4 CAN $ 14.7 0.2 Other 19.1 - 185.0 1 Adjusted to exclude intangibles am
Slide 8: Net Interest Expense
The Weir Group PLC Excellent Engineering Solutions Net Interest Expense 2008 2007 Variance £m £m Interest Costs (17.2) (12.7) (4.5) Interest Income 6.6 7.6 (1.0) Net Interest Costs (10.6) (5.1) (5.5) Other Finance Income - retirement benefits 1.8 3.2 (1.4) (8.8) (1.9) (6.9) Interest rate arbitrage b
Slide 9: Taxation
The Weir Group PLC Excellent Engineering Solutions Taxation Profit before Tax Rate % tax £m £m Continuing Operations: - Before intangibles amortisation 176.2 (51.8) 29.4% - Intangibles amortisation (16.7) 5.3 Reported in Income Statement 159.5 46.5 29.2% 9
Slide 10: Cash flow
The Weir Group PLC Excellent Engineering Solutions Cash flow 2008 2007 £m £m Operating cash flows - pre working capital 223.4 136.8 Working Capital (9.0) 6.7 Operating cash flows 214.4 143.5 Interest and tax (59.1) (37.4) Net Capex (52.1) (39.0) Dividends paid (35.7) (31.1) Other cash flows (6.8) 2.
Slide 11: Net debt
The Weir Group PLC Excellent Engineering Solutions Net debt 2008 £m Net debt at 28 December 2007 (171.3) Free cash flow 60.7 Acquisitions and disposals (60.3) Discontinued Operations (2.5) Net Cash movements (2.1) Non Cash movements (66.5) Net debt at 26 December 2008 (239.9) Net debt before non-cas
Slide 12: Funding and Liquidity
The Weir Group PLC Excellent Engineering Solutions Funding and Liquidity Net debt £240m - Gross debt £294m denominated in US$, CAN $, GBP - Working capital net cash balances £54m - Net debt / ebitda 1.1x , interest cover 17x Current bank facilities - £625m bilaterals, expiring July 2011 - CAN $9
Slide 13: Pensions
The Weir Group PLC Excellent Engineering Solutions Pensions Period end net deficit £14.7m (December 2007 net surplus £36.9m) - Main UK plan remains in surplus (£4m) Substantial investment / mortality risk reduction - 2 Legal & General policies in place - Canada scheme closure underway - Group ex
Slide 14: Financial Summary
The Weir Group PLC Excellent Engineering Solutions Financial Summary 3 Operating profit of £185.0m, up £68.1m (58%) 1 3 Operating cash flow of £214.4m, up £70.9m 3 EPS - 59.3p (up 49%) 1 3 Effective exposure to pension liabilities reduced by £291m 3 Net debt of £239.9m 3 Dividend 18.5p per ordinary
Slide 15: Operational Review
The Weir Group PLC Excellent Engineering Solutions The Weir Group PLC Analysts’ Presentation 2008 Preliminary Results Operational Review Mark Selway 15
Slide 16: Order Input by Division - Continuing Operations
The Weir Group PLC Excellent Engineering Solutions Order Input by Division - Continuing Operations Consolidated 2008 20071 1 Variance £m £m % Minerals 804.5 656.0 +23% Oil & Gas 289.0 178.6 +62% Power & Industrial 270.9 210.7 +29% Group companies 74.7 64.4 +16% Total 1,439.1 1,109.7 +30% 1 2007 rest
Slide 17: Order input by sector - Continuing Operations
The Weir Group PLC Excellent Engineering Solutions Order input by sector - Continuing Operations 2008 20071 Variance 2008 £m £m % Input Power 16% Industrial Minerals 576.4 440.9 +31% 9% Water Oil & gas 395.8 308.1 +29% Oil & 3% Gas Naval Power 235.4 180.7 +30% 28% 4% General industrial 131.7 100.9 +
Slide 18: Order input by geography - Continuing Operations
The Weir Group PLC Excellent Engineering Solutions Order input by geography - Continuing Operations 2008 20071 Variance 2008 £m £m % Input North America 442.3 356.2 +24% Emerging Established markets markets Europe & FSU 283.3 239.1 +19% 40% 60% Indo Pacific 216.7 94.9 +128% Middle East & Africa 189.
Slide 19: Minerals Division
The Weir Group PLC Core Markets Excellent Minerals Engineering Solutions Minerals Division Mining FGD Oil Sands Financial Highlights 2008 Revenue 2008 Input Original 508.6 1 2008 2007 Var 600 Equipment 2008 Consolidated 355.8 £m £m % 500 52% 2007 400 £m 159.6 145.1 Order input 804.5 656.0 +23% 300 5
Slide 20: Oil & Gas Division
The Weir Group PLC Core Markets Excellent Engineering Oil & Gas Solutions Oil & Gas Division Upstream Downstream Services - extraction - refining Financial Highlights 2008 Revenue 2008 Input 150 Upstream Dow nstream 2008 20071 Var Original Spares Consolidated £m £m % 100 3 6 .4 Equipment 23% 4 4 .4
Slide 21: Power & Industrial Division
The Weir Group PLC Core Markets Excellent Excellent Power & Industrial Engineering Solutions Solutions Power & Industrial Division Power Industrial Services Global Energy 150.3 Financial Highlights 175 2008 Input Services Spares 150 46% 2008 20071 Var 2008 10% 125 Consolidated 85.6 £m £m % 100 2007
Slide 22: Weir LGE
The Weir Group PLC Excellent Engineering Solutions Weir LGE Financial Highlights 2008 Input 2008 20071 Var 100 Onshore Consolidated £m £m % 30% 75 Order input 44.1 11.8 +274% 50 Revenue 74.4 65.8 +13% 25 Operating profit 4.6 5.5 -16% 0 Shipping Margin 6.2% 8.4% -26% 2005 2006 2007 2008 70% Input 80.
Slide 23: Scorecard: 2008 achievements
The Weir Group PLC Excellent Engineering Solutions Scorecard : 2008 achievements Financial Highlights Reorganised to sector focused structure 2008 2007 Var Consolidated £m £m % Order input1 1,439.1 1,109.7 +30% Revenue 1,353.6 1,008.8 +34% Operating profit 185.0 116.9 +58% Margin 13.7% 11.6% +18% Ca
Slide 24: Outlook
The Weir Group PLC Excellent Engineering Solutions Outlook The Group enters 2009 with a strong order book, two comparatively solid months of performance and well developed plans to respond to the potential impact of slowing market demand. Minerals Division: Oil & Gas Division: Power & Industrial Div
Slide 25: Foreign Exchange
The Weir Group PLC Excellent Engineering Solutions Foreign Exchange 2007 Revenue 2007 Operating Profit Published FX Restated Published FX Restated Minerals 522.8 47.3 570.1 74.3 8.0 82.3 Oil & Gas 181.7 18.2 199.9 33.8 3.8 37.6 Power & Industrial 190.7 10.7 201.4 12.5 0.9 13.4 Group Companies 113.6
Slide 26: Foreign Exchange
The Weir Group PLC Excellent Engineering Solutions Foreign Exchange 2007 Revenue 2007 Operating Profit At 2007 FX At 2008 At 2007 FX At 2008 rates rates rates rates US $ 258.5 21.5 280.0 47.4 3.9 51.3 Canadian $ 101.2 9.4 110.6 7.6 0.7 8.3 Australian $ 107.6 10.7 118.3 15.8 1.6 17.4 Euro € 148.0 24.