The Weir Group PLC
March 2011 – US roadshows
2010 US roadshow
March 2011
Excellent
Engineering
Solutions
The Weir Group PLC
March 2011 – US roadshows
2
Group overview
Weir Minerals, Sao Paulo, Brasil
Excellent
Engineering
Solutions
The Weir Group PLC
The Weir Group today
 Established global engineering Group aligned to high growth
markets
 Minerals
 Oil & Gas
 Power
March 2011 – US roadshows
Revenue OE / Aftermarket
100
80
(%)
49
46
42
51
54
58
60
40
20
0
2008
2009
Aftermarket
Revenue by sector %
7
 Product portfolio focused on highly abrasive flow applications
3
2010
OE
5
13
42
 Strong aftermarket opportunities
Minerals
Oil & Gas
Power
Industrial
Other
33
Revenue by geography %
 Philosophy of operational excellence
 37 manufacturing facilities
Emerging
markets
12
34
15
 Over 100 service facilities
 Over 12,000 employees worldwide
Global engineering solutions provider
12
11
16
North America
Europe & FSU
Australia
Asia Pacific
Mid East & Africa
South America
March 2011 – US roadshows
The Weir Group PLC
Group transformation 2006-2010
 High performing, focused Group developed in past 5 years
 Focused on three end-markets with positive fundamentals
 Input from core sectors increased from 69% to 88% of input
 Sales up over 75%
4
Sales and operating margins
18.90%
1,800
1,600
1,400
1,200
1,000
800
600
400
200
0
13.7%
14.7%
11.5%
9.3%
1,354
941
1,390
1,635
1,061
20%
18%
16%
14%
12%
10%
8%
6%
4%
2%
0%
2006
2007
2008
2009
2010
Sales £m (RHS)
EBITA margin (LHS)
 Operating margins doubled
Earnings and dividend per share
120
100.4
100
 Shareholder returns improved materially
 Share price increased five-fold
 Earnings per share trebled
80
64.1
59.3
60
41.4
40
32.4
20
14.5
16.5
18.5
21.0
27.0
0
 Dividend per share up nearly 90%
2006
2007
2008
2009
EPS (p) DPS (p)
2010
Input by sector
 Strong, resilient platform established
 Aftermarket contributed 58% of 2010 revenue
 Sales, EBITA, margins, EPS & DPS all increased >10% 2010
 Highly cash generative
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
2006
2007
2008
Minerals
Oil & Gas
Focused, high performing Group developed over past 5 years
2009
2010
Power
Other
The Weir Group PLC
March 2011 – US roadshows
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 customer partnerships
Leverage skills, knowledge & best
practice across the group
 Expand global capability


Globalise existing products & services
Extend emerging market presence
Minerals
Oil & Gas
Power & Industrial
 Quality acquisitions skillfully integrated
Clear strategy to grow returns over the next five years
5
March 2011 – US roadshows
The Weir Group PLC
The Weir Way
PDP
Weir Group plc
Leadership
Development
Upgrade Action
Plans
Succession
Plans
Leadership competency
Personal Development Process
Guidelines
Weir Oil & Gas Division
1
Destiny Concept
New Product
Innovation
Compliance Scorecard
Risk & Control
Framework
Weir Commercial System
Best Practice
Global Structures
Process, target driven organisation focused on operational excellence
6
The Weir Group PLC
March 2011 – US roadshows
Medium term fundamentals
Total global ore production (million tonnes)
Minerals
5,000
 Ore production growth forecast to continue (c.4% p.a. to 2013)
2,500
 Driver of aftermarket revenues
Source: CRU Strategies
7,500
0
2009
2010
2011f
2012f
2013f
Asia
Australia
EMEA
South America North America
 Substantial increase in miners capex plans (c.50% in 2011)
 South America major beneficiary
Active US rig count (average number of rigs)
2,000
Oil & Gas
 US rig count growth expected to moderate (c.7% p.a. to 2013)
 Oil shales supporting higher horizontal rig count growth
7
Source: Spears and Associates
1,500
1,000
500
0
2009
 Increasing international interest in gas shales
2010
Horizontal
2011f
2012f
2013f
Directional Vertical
Global Power generation (GW)
Power & Industrial
5,500
 Wind generation to grow strongly (c.15% p.a. to 2013)
4,500
 Pre-Japan: Nuclear renaissance spreading to US, India, UK
3,500
 Increased backlog of life extension and refurbishment
2,500
5,000
4,000
3,000
Fossil
Positive outlook underpinned by emerging market demand
Source: ABS Energy Research
2009
2010
2011f
Nuclear Hydro Wind
2012f
2013f
Other renewables
March 2011 – US roadshows
The Weir Group PLC
Market share
of niche
Market positioning
8
Niche as % of
total market
Minerals


Addressable mkt - £2.7bn
(of which £1.4bn mining)
Weir
Other
c.28%
x14
Weir mkt
Total mkt
c.7%
Mining equipment
market £39bn
Weir
Other
c.4%
x9
Weir mkt
Total mkt
c.10%
Valve market
£22bn
c.4%
Upstream equip. &
service market
£27bn
Market leader
Power & Industrial

Power gen. valves
market - £2.3bn

Growing share
Oil & Gas

Upstream well services
market - £1.1bn

Market leader
Weir
Other
c.20%
x25
Weir mkt
Total mkt
Strong niche positions; opportunity to expand into aligned markets
March 2011 – US roadshows
The Weir Group PLC
Target to double PBTA by 2014



Based on current end-market forecasts
Assumes constant currency
Size of initiatives are illustrative
Using balance
sheet capacity
Collaboration &
range extension
Mkt growth +
operational
leverage
Actual 2009
PBTA
Organic growth
Innovation &
geographic
expansion
Market share
gain
Market
extension
Acquisitions
Target 2014
PBTA
Positioned to create substantial shareholder value over the long-term
9
The Weir Group PLC
March 2011 – US roadshows
10
Divisional overview
Weir Minerals, Sao Paulo, Brasil
Excellent
Engineering
Solutions
March 2011 – US roadshows
The Weir Group PLC
DIVISION
MARKET FOCUS
PRODUCTS
% OF SALES
52%
33%
Focused on three end markets with positive fundamentals
14%
11
The Weir Group PLC
March 2011 – US roadshows
12
Minerals division
 Specialises in global delivery & support of
equipment for slurry handling and
processing in mining & mineral applications
 Product applications extend to oil sands &
FGD
 Key products
 Pumps, hydrocyclones, valves, wear
resistant linings
 Key strategic highlights of past 3-years
 2008: £113m CH Warman acquisition
 2010: US$200m acquisition of Linatex
 Invested over £85m capex, including new
state of the art foundry and production
facilities in Brazil.
Weir Minerals Multiflo, Australia
The Weir Group PLC
March 2011 – US roadshows
13
Minerals division
End markets and key drivers
 Current addressable market of £2.7bn
Market by sector
32%
 55% OEM, 45% Aftermarket (spares & service)
 Emerging markets represent 21% of market
53%
3%
Mining
Sand & Gravel
FGD/Power
Oil Sands
Industrial
8%
4%
Source: CRU
 Market leading position
Estimated market shares
 No1 in slurry pumps, No2 in cyclones & mill liners, No3 in valves
Weir
FL Smidth
Metso
ITT
Others
 Fragmented market; opportunities to expand share
 Key drivers
 Original equipment; Mining capital expenditure
 Miners are increasing capital expenditure budgets
 Aftermarket; Global ore production
 Strong growth predicted as markets continue to recover
Source: CRU
Mining sector capex – 2009-2013
60000
50000
40000
30000
20000
10000
0
2009
2010
2011
2012
Source: CRU
Strong market fundamentals and market leading positions
2013
March 2011 – US roadshows
The Weir Group PLC
Minerals divisional performance
14
Input OE / Aftermarket
100%
2010
20091
20081
+ / -3
Input OE
420
317
490
+32%
Input aftermarket
564
465
470
+21%
20%
Input Total
984
782
960
+26%
0%
£m
80%
51%
41%
43%
49%
59%
57%
2008
2009
2010
60%
40%
Revenue OE / Aftermarket
Revenue OE
351
414
430
-15%
Revenue aftermarket
550
465
458
+18%
Revenue Total
901
879
888
+3%
EBITA
175
141
140
+24%
20%
19.4%
16.0%
+340bps
0%
100%
80%
48%
47%
39%
52%
53%
61%
60%
40%
Operating margins (2)
15.8%
2008
2009
Aftermarket OE
 Strong aftermarket driven by emerging market demand
Input by geography %
Emerging
markets
 Emerging market contribution 51%
 Record operating profit & margins
21
(2)
(3)
2009 and 2008 restated at 2010 average exchange rates
Adjusted to exclude intangibles amortisation
2010 v 2009
21
9
15
15
(1)
2010
19
North America
Europe & FSU
Australia
Asia Pacific
Mid East & Africa
South America
The Weir Group PLC
Minerals division
Business structure
 20 businesses
 21 production sites
 55 service centres
 180 distributors
 Not on map
 c.6,300 employees
Major customers
March 2011 – US roadshows
15
The Weir Group PLC
Minerals division
Key products
March 2011 – US roadshows
16
The Weir Group PLC
March 2011 – US roadshows
17
Oil & Gas division
 Market leading position in Pressure Pumping
and Flow Control
 Niche position in centrifugal pumps for refining
and petrochem
 Respected services positions for repair and
upgrades
 Resilient business model
 Leading margin performance versus peers
 Key developments over the past 3-years:
 Acquisitions strengthening market position
(Mesa, SOS, PCS)
 30% capacity expansion at SPM
 New service centers in the US/Canada/Mexico
and Brazil
Weir Oil & Gas Services, Dubai
Growing focus on unconventional oil and gas
March 2011 – US roadshows
The Weir Group PLC
18
Oil & Gas division
End markets & key drivers
NAM drilling trajectory
Niche player in £27bn upstream equipment &
service market
Served market (primarily well services) – £1.1bn
~50% based in North America; 36% emerging
markets
~68% capex; 32% aftermarket
9.1% CAGR expected 2010 – 2013
Horiztonal + Directional
Percent of Total Rigs
North America
International
100%
80%
60%
40%
20%
0%
2005
2007
2009
2011
~20% market share of upstream served market
Strong position in aftermarket & spares
Unconventional trend provides long-term growth


Growing development of oil and liquid rich shale
formations
2015
Source: Spears & Associates
Rig count growth by region
Upstream key driver; unconventional drilling
activity
Strong rebound in rig count since 2009
2013
Europe
Latin America
Middle East
Asia-Pacific
Africa
1,500
1,000
500
70% of world’s unconventional reserves outside US
Downstream operation Gabbioneta
Centrifugal API pumps for refining & petrochemical
industries
0
2006
Niche position in market with positive long-term fundamentals
2008
2010E
2012E
Source: Baker Hughes; Morgan Stanley
March 2011 – US roadshows
The Weir Group PLC
Oil & Gas divisional performance
£m
2010
20091
Input OE / Aftermarket
100%
+ / -3
20081
80%
289
124
157
+133%
Input aftermarket
337
194
176
+74%
20%
Input Total
626
318
333
+97%
0%
46%
53%
61%
54%
2008
2009
2010
40%
194
119
140
+63%
Revenue OE / Aftermarket
Revenue aftermarket
268
189
185
+41%
100%
Revenue Total
462
308
326
+50%
EBITA
117
53
74
+122%
22.8%
+820bps
25.4%
17.2%
80%
20%
42%
57%
61%
58%
0%
2008
2009
Aftermarket OE
2010
Input by geography %
Emerging
markets
 Challenging downstream conditions
12
2009 and 2008 restated at 2010 average exchange rates
Adjusted to exclude intangibles amortisation
2010 versus 2010
39%
40%
1
 Recovery in Middle East Services input, driven by Iraq
43%
60%
 Aggressive replacement cycle in harsher shales
(2)
(3)
39%
Revenue OE
 US horizontal rig count increase, supported by oil and liquid
rich plays
(1)
47%
60%
Input OE
Operating margins (2)
19
12
1
74
North America
Europe & FSU
Asia Pacific
Mid East & Africa
South America
March 2011 – US roadshows
The Weir Group PLC
Oil & Gas division
SPM
Business structure
• Forth Worth, Texas
• 832 employees
 12 businesses
• Products: well
service pumps, flow
control heads
• Markets: Drilling and
well completion
 5 production sites
20
 33 service centres
 Joint Ventures (Abu Dhabi,
Saudi Arabia and China)
 c.1,900 employees
Major customers
Joint Ventures
March 2011 – US roadshows
The Weir Group PLC
Oil & Gas division
Products
API 610 pumps
Weir SPM field restraint system
Weir SPM manifold trailer
Weir SPM frac pump
Flow control products
Simplified upstream oil & gas
well lifecycle diagram
Decommissioning
Drilling & well
construction
Cementing pumps and iron, safety
restraint systems, pressure control
(BOP) repairs & recertification,
inspect & refurbish drill pipe,
premium threading
Well service (acidizing, gravel
packing) pumps and iron, Intervention
safety restraint systems
Rotating equipment asset
management (UK, Caspian), rotating
equipment & valve repair and services
Production
Frac pumps and flow control iron,
Well
safety iron manifold trailers,
completion safety
restraint systems, fluid end
repairs, spare parts
21
The Weir Group PLC
Shale fracking process
March 2011 – US roadshows
22
March 2011 – US roadshows
The Weir Group PLC
Frac Site Evolution
Service intensity refers to the
number of units required (hhp),
pressure requirements, number
of stages required and
proppant.
Pump life expectancy shorter: more repair and replacement of spares
23
The Weir Group PLC
March 2011 – US roadshows
24
Power & Industrial Division
 Activities
 Design and production of severe service and critical safety
valves
 Specialist pumps for municipal and industrial applications
 Engineered service solutions
 Strong organic growth in power, offset by weaker
industrial markets
 Margin improvement from lean manufacturing & low cost
sourcing
 New valves facility opened in Ipswich, Massachusetts,
USA
 Acquisitions:
 BDK, leading Indian valve manufacturer
 Ynfiniti Engineering Services, renewable power maintenance
provider
 American Hydro, value added hydro services offering
Weir Valves & Controls UK
Increasing focus on renewable energy
March 2011 – US roadshows
The Weir Group PLC
Power & Industrial divisional performance
Input OE / Aftermarket
100%
2010
£m
80%
20081
2010
2009
Input OE
149
107
131
+39%
Input aftermarket
119
147
163
-19%
Input Total
268
254
294
+6%
Revenue OE
112
94
96
+19%
Revenue aftermarket
134
137
147
-2%
Revenue Total
246
231
243
+6%
EBITA
Operating margins (2)
1
+/-
3
26
24
20
+11%
10.7%
10.3%
8.1%
+40bps
 AM impacted by postponed outages and subdued industrial
markets
 Positive contribution from new acquisitions in 2010
45%
42%
55%
58%
2008
2009
40%
20%
2009 and H1 restated at 2010 average exchange rates
Adjusted to exclude intangibles amortisation
2010 versus 2009
45%
0%
2010
Revenue OE / Aftermarket
100%
80%
39%
40%
45%
61%
60%
55%
60%
40%
20%
0%
2008
2009
Aftermarket OE
2010
Input by geography %
Emerging
markets
8
18
42
32
(2)
(3)
55%
60%
 Focus on margin progression
(1)
25
North America
Europe & FSU
Asia Pacific
Mid East & Africa
March 2011 – US roadshows
The Weir Group PLC
Power & Industrial Division
Business structure
 10 businesses
 11 production sites
 13 service centres
 c.2,650 employees
Major customers
LISCO - LIBYA
26
The Weir Group PLC
March 2011 – US roadshows
27
Driving growth the Weir Way
 Innovative action
 Collaborative mindset
 Global capability
 Operational excellence
 Quality acquisitions
Weir Oil & Gas Services, Baku
Good strategic progress driving growth
The Weir Group PLC
March 2011 – US roadshows
28
Innovative action
Minerals
 Launched next generation Warman WBH pump
 Developed molten salt pump for solar market
 Developed large dewatering barge systems
Oil & Gas
 Launched new Destiny frac pump
 Significant investment in product development
 Broadened range of flow control products
Power & Industrial
 Launched enhanced range of speciality pumps
 Safety valves for first 4th generation reactor
 Developed wind farm maintenance offering
Weir Minerals Multiflo, Australia
Developing new products and services to drive growth
The Weir Group PLC
March 2011 – US roadshows
29
Collaborative mindset
Collaborating with customers
 On-site Total Care service centres
 High pressure flow iron
 Nuclear valve certifications
Collaborating internally
 Cross-selling to existing customers
 Internal supply chain integration
 Cross-divisional oil & gas forum
Collaborating externally
 KHD alliance
 Shengli Highland joint venture
 MHI UK nuclear alliance
Weir Valves & Controls UK
Working collaboratively to leverage existing products & services
The Weir Group PLC
March 2011 – US roadshows
30
Global capability
Minerals
 Launched state-of-art facility in Brasil
 Opened GEHO facility in Taicang, China
 New service centres in Indonesia, Russia, Africa
Oil & Gas
 Increased low cost sourcing
 Opened SPM service centre in Brasil
 Expanded service operations in Iraq and Caspian
Power & Industrial
 Expanded low cost manufacturing
 Chinese control valve JV
 Singapore trading hub opened
Weir Minerals Multiflo, Australia
Extending presence and global reach
The Weir Group PLC
Operational excellence
March 2011 – US roadshows
LTAs
100
31
(1) (2)
83
80
Further developing manufacturing excellence
 Rapid response to upturn in selected markets
 Focus on inventory turns and on time delivery
 Continued reduction in lost time accidents
 Leaning up of acquisitions
Increasing customer focus
 Roll out of Net Promoter Score
 Embedded Weir Commercial System
 53% increase in customer focused R&D
60
40
40
26
20
0
2008
2009
2010
Group Lean Score (2)
72%
70%
68%
66%
64%
62%
60%
58%
70%
65%
62%
2008
2009
2010
Weir Commercial System (2)
75%
72%
70%
Taking action to realign underperforming operations
 Canadian restructure completed
 Downstream oil & gas restructuring
65%
60%
60%
55%
n/a
50%
2008
2009
2010
(1) An accident resulting in lost time of more than 4 hours
(2) Excluding acquisitions
Extending and sustaining focus on operational excellence
The Weir Group PLC
March 2011 – US roadshows
32
2010 summary
 A record year of input, revenue, margins
and profit growth
 Powerful recovery in OE orders in the
second half
 Continuing strength of aftermarket revenues
 Significant financial headroom remains
 Dividend increased by 29%
Weir Oil & Gas Services, Abu Dhabi
March 2011 – US roadshows
The Weir Group PLC
2010 results summary (1)
2010
£m
2009
£m
Variance
+/-
Revenue
1,635
1,390
+18%
Operating profit
309.7
204.7
+51%
Operating margins
18.9%
14.7%
+420bps
Net finance costs
(15.0)
(17.7)
-15%
Profit before tax
294.7
187.0
+58%
Profit for the period
211.9
134.8
+57%
Effective tax rate
27.9%
+20bps
100.4p
64.1p
+57%
Dividend per share
27.0p
21.0p
+29%
ROCE(2)
32.4%
24.4%
+800bps
EPS
28.1%
Strong market positions contribute to excellent results
(1) Continuing operations adjusted to exclude intangibles amortisation
(2) Continuing operations EBIT divided by average net assets excluding pension deficit
33
The Weir Group PLC
March 2011 – US roadshows
Overview
Input growth £m (1) (2)
(Cumulative versus 2005 base of £1,058m)
34
1,000
846
800
 Upstream O&G market share gains
608
600
400
240
308
307
200
0
 Product and service innovation driving growth
 Broadening service and product capabilities
2006
2007
2008
1,000
510
600
200
616
295
400
102
0
2006
 Underperforming operations realigned
2010
Operating margin improvement (bps) (1)
(Cumulative versus 2005 base of 8.6%)
1,200
1,038
800
 Sustained commitment to operational excellence
2009
2007
2008
2009
2010
EPS growth (pence) (1)
(Cumulative versus 2005 base of 23.9p)
100
76.5
80
60
 Value enhancing acquisitions strengthening the platform
40
20
9.4
35.4
40.2
2008
2009
17.5
0
2006
Growing input and profits faster than the market
(1) Continuing operations at the published dates adjusted to exclude exceptional items and intangibles amortisation
(2) Prior years restated at 2010 average exchange rates
2007
2010
The Weir Group PLC
March 2011 – US roadshows
35
2011 Outlook
Minerals
 Positive market conditions to continue
 Aftermarket growth to moderate
 Higher proportion of OE revenues
Oil & Gas
 Strong order book providing increased
upstream visibility
 Horizontal rig count continues to grow
 Challenging downstream conditions
Power & Industrial
 Improved financial performance expected
 Substantial nuclear valve workload
 Full year contribution from acquisitions
Weir Minerals, Australia
Confident the Group will deliver good progress in 2011