Weir Group Plc · LSE:WEIR
Weir — The Weir Group — H1 2012 Earnings Presentation
31 slides from Weir's earnings presentation, Jul 31, 2012
Slide 1: 2012 Interim results
The Weir Group PLC 2012 Interim results 2012 Interim results London, 31 July 2012 Weir Minerals - Brasil Excellent Engineering Solutions
Slide 2: Highlights
The Weir Group PLC 2012 Interim results 2 Highlights Lord Smith of Kelvin Weir Advanced Research Centre, University of Strathclyde, Glasgow Excellent Engineering Solutions
Slide 3: Highlights
The Weir Group PLC 2012 Interim results 3 Highlights Continuing operations Continued strong Minerals performance Order input(1) £1,312m Up 8% Positive organic growth in Power and Industrial Profit before tax(2) £226m Up 27% Challenging pressure pumping market conditions Cash generated from operation
Slide 4: Financial review
The Weir Group PLC 2012 Interim results 4 Financial review Jon Stanton Weir Oil & Gas – Weir SPM Excellent Engineering Solutions
Slide 5: Results summary
The Weir Group PLC 2012 Interim results 5 Results summary(1) 2012 2011 +/- £m £m Revenue 1,325 1,031 +29% Operating profit 248 186 +33% Operating margin 18.7% 18.0% +70bps Net finance costs (22) (8) +176% Profit before tax 226 178 +27% Profit for the period 161 127 +27% Effective tax rate 28.8% 28.7
Slide 6: Order input
The Weir Group PLC 2012 Interim results 6 Order input(1) Input OE / Aftermarket 100 Up 8% (down 1% LfL): Minerals and P&I strong 80 49 48 45 60 OE down 2% (down 13% LfL): Upstream O&G market challenges (%) 40 51 52 55 Strengthening aftermarket trends: up 17% (up 11% LfL) 20 0 Emerging markets input
Slide 7: Revenue
The Weir Group PLC 2012 Interim results 7 Revenue Revenue OE / Aftermarket 100 Up 29% (20% LfL constant currency) 80 46 49 46 Significant increase from Minerals and Oil & Gas (%) 60 40 Opening order book supporting Oil & Gas revenues 54 51 54 20 Foreign exchange impact minimal 0 2011 H1 2011 H2 2012
Slide 8: Operating profit
The Weir Group PLC 2012 Interim results 8 Operating profit(1) Operating profit(1) 248 250 227 Up 33% after favourable FX of £1m; LfL constant currency up 21% 200 186 One-off costs: £3m re Oil & Gas acquisition integration (2011: £7m) £m Margin improvement reflects mix and reduced one-off costs 150 I
Slide 9: Acquisition performance
The Weir Group PLC 2012 Interim results 9 Acquisition performance(1) H1 2012 H1 2011(2) Proforma £m +/- annualised(3) £m 2011 £m Revenue 93 77 +20% 172 EBITA 22 17 +31% 43 Integration costs (3) Net EBITA 19 EBITA margin 24% 22% 25% H1 2012 includes 27 weeks for Weir Seaboard and 18 weeks for Weir No
Slide 10: Exceptional items and intangibles amortisation
The Weir Group PLC 2012 Interim results 10 Exceptional items and intangibles amortisation Continuing operations impacted by: Intangibles amortisation up £6.7m reflecting acquisitions Fair values provisional for Weir Seaboard and Weir Novatech Weir International fair values finalised during period Ch
Slide 11: Cash flow
The Weir Group PLC 2012 Interim results 11 Cash flow Working capital as % of revenue(1) 20 19.5 2012 2011 £m £m 15 13.2 13.2 (%) 10 Operating cash flows - pre working capital 268 205 5 Working capital (127) (76) 0 2011 H1 2011 H2 2012 H1 Operating cash flows 141 129 Debtor days(1) Interest and tax (
Slide 12: Finance costs & net debt
The Weir Group PLC 2012 Interim results 12 Finance costs & net debt Finance costs up £14m Finance costs H1 2011 2012 Recent acquisitions funded through long term fixed rate debt £m £m Private Placement notes issued of US$ 1bn Underlying interest 7 21 Other finance costs - pensions 1 1 Weighted avera
Slide 13: Summary
The Weir Group PLC 2012 Interim results 13 Summary Strong revenue growth translates to increased profit Acquisitions performing in line with expectations Margin improvement reflects mix factors and one-off charges Strengthening like for like returns on capital Significant reduction in working capita
Slide 14: Business review & outlook
The Weir Group PLC 2012 Interim results 14 Business review & outlook Keith Cochrane Weir Minerals - Brasil Excellent Engineering Solutions
Slide 15: Overview
The Weir Group PLC 2012 Interim results 15 Overview Strength of broad portfolio supporting results Continued good progress at Minerals Strong organic growth at Power & Industrial Pressure pumping market conditions challenging 2011/12 acquisitions: integration on track Accelerating new product launch
Slide 16: Minerals Division
The Weir Group PLC 2012 Interim results 16 Minerals Division Input OE / Aftermarket 100 £m 2011 H1(1) 2011 H2(1) 2012 H1 + / - (3) 80 44 39 43 60 Input OE 285 234 311 +9% (%) 40 56 61 57 Input aftermarket 367 363 415 +13% 20 Input total 652 597 726 +11% 0 2011 H1 2011 H2 2012 H1 Revenue OE 209 290 2
Slide 17: Oil & Gas Division
The Weir Group PLC 2012 Interim results 17 Oil & Gas Division Input OE / Aftermarket 100 £m 2011 H1(1) 2011 H2(1) 2012 H1 + / - (3) 80 37 55 55 42 (%) 60 Input OE 222 260 158 -29% 40 63 58 20 45 45 Input aftermarket 179 214 215 +20% 0 Input total 401 474 373 -7% 2011 2011 2012 2012 H1 H2 H1 H1 LfL R
Slide 18: Oil & Gas Division Managing conditions in upstream markets
The Weir Group PLC 2012 Interim results 18 Oil & Gas Division US horizontal rig count, 2012 YTD Managing conditions in upstream markets 1,200 1,100 Flat total horizontal rig count 1,000 Rapid switch from gas to oil, total horizontal rig count stable 900 29% increase in oil rig count Gas rig count at
Slide 19: Power & Industrial Division
The Weir Group PLC 2012 Interim results 19 Power & Industrial Division Input OE / Aftermarket 100 £m 2011 H1(1) 2011 H2(1) 2012 H1 + / - (3) 80 53 52 51 48 60 Input OE 85 77 99 +17% (%) 40 Input aftermarket 76 70 97 +28% 20 47 48 49 52 0 Input Total 161 147 196 +22% 2011 2011 2012 2012 H1 H2 H1 H1 L
Slide 20: 2012 divisional priorities: progress update
The Weir Group PLC 2012 Interim results 20 2012 divisional priorities: progress update Progress update 2012 Divisional priorities Progress Update Minerals Expanding foundry capacity Plans underway in Europe, N.America and Asia Ancillary products & service growth 25% ancillary product revenue growth
Slide 21: 2012 group priorities: progress update
The Weir Group PLC 2012 Interim results 21 2012 group priorities: progress update Progress update 2012 Group priorities Progress Update Investment in R&D: +89% Building on new products momentum New product launches across all divisions Encouraging results from Centres of Excellence Enhancing supply
Slide 22: 2012 outlook
The Weir Group PLC 2012 Interim results 22 2012 outlook Minerals Market conditions to remain generally positive Further input growth Increase in full year revenue expectations Full year margins in line with first half Oil & Gas Challenging pressure pumping market outlook Frac pump OE market unlikely
Slide 23: Q&As
The Weir Group PLC 2012 Interim results 23 Q&As Weir Minerals, Multiflo Excellent Engineering Solutions
Slide 24: Appendices
The Weir Group PLC 2012 Interim results 24 Appendices Excellent Engineering Solutions
Slide 25: Appendix 1 - Order input by division
The Weir Group PLC 2012 Interim results 25 Appendix 1 - Order input by division Total Like for Like(2) 2012 2011(1) Variance 2012 2011(1) Variance £m £m +/- £m £m +/- Minerals 725.9 652.0 +11% 725.9 652.0 +11% Oil & Gas 373.2 401.3 -7% 283.5 401.3 -29% Power & Industrial 196.2 161.0 +22% 184.7 161.0
Slide 26: Appendix 2 – H1 2012 order input by end market
The Weir Group PLC 2012 Interim results 26 Appendix 2 – H1 2012 order input by end market Power & 2012 2011(1) Minerals Oil & Gas Industrial Total Total Minerals 78% - 2% 43% 40% Oil & Gas 7% 99% 11% 34% 39% Power 4% - 59% 11% 10% General Industrial 10% 1% 13% 8% 8% Other 1% - 15% 4% 3% Total 100% 1
Slide 27: Appendix 3 - Revenue by division
The Weir Group PLC 2012 Interim results 27 Appendix 3 - Revenue by division Total Like for Like(2) 2012 2011(1) Variance 2012 2011 Variance £m £m +/- £m £m +/- Minerals 664.9 543.8 +22% 664.9 543.8 +22% Oil & Gas 492.3 329.4 +49% 399.8 329.4 +21% Power & Industrial 154.5 139.1 +11% 151.3 139.1 +9% G
Slide 28: Appendix 4 - Operating profit by division
The Weir Group PLC 2012 Interim results 28 Appendix 4 - Operating profit(1) by division Total Like for Like(4) 2012 2011(2) 2012 2011(2) £m £m £m £m Minerals 119.9 100.2 119.9 100.2 Oil & Gas(3) 123.0 84.1 103.5 84.1 Power & Industrial 11.7 8.4 10.8 9.3 Group companies 1.3 0.6 1.3 0.6 Central costs
Slide 29: Appendix 5 - Foreign exchange by division
The Weir Group PLC 2012 Interim results 29 Appendix 5 - Foreign exchange by division 2011 H1 Revenue 2011 H1 Operating Profit(1) Published FX Restated Published FX Restated £m £m £m £m £m £m Minerals 550.8 (7.0) 543.8 101.0 (0.8) 100.2 Oil & Gas 324.1 5.3 329.4 82.2 1.9 84.1 Power & Industrial 140.9
Slide 30: Appendix 6 - Foreign exchange by currency
The Weir Group PLC 2012 Interim results 30 Appendix 6 - Foreign exchange by currency 2011 H1 Revenue 2011 H1 Operating Profit(1) At 2011 H1 At 2012 H1 At 2011 H1 At 2012 H1 FX FX rates rates rates rates £m £m £m £m £m £m US $ 430.7 10.6 441.3 116.0 2.8 118.8 Canadian $ 70.8 (0.3) 70.5 12.7 - 12.7 Au
Slide 31: 2011 Interim Results
The Weir Group PLC 2012 Interim results 2011 Interim Results London, 31 July 2012 This presentation 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, all statements t