Weir has reported its results for the 26 week period ended 3 July 2015.

Highlights

First half results in-line with June trading update expectations
Strong cash generation in challenging markets; 124% EBITDA cash conversion ratio
Oil & Gas: North American rig count down 55%; order input down 39%
Minerals: a resilient performance with aftermarket revenues increasing
Power & Industrial: operational efficiencies improving margins

R&D spend prioritised – up 38%; new products delivering growth:

New continuous duty frac pump and high-yield hydro-cyclone launched
Acquisition of Delta expands valves product range and extends presence in mining and oil sands markets
Aggressive focus on cost competitiveness:

32% reduction in North American Oil & Gas workforce since November 2014
Further measures taken across all divisions and Group functions in June/July
Exceptional restructuring costs of £47m recognised, including £33m of asset impairments
In total actions taken expected to deliver annualised savings of £85m by the end of 2015

Board and management changes announced

Continuing Operations	H1 2015	H1 2014	Reported Growth	Constant Currency¹
Order input¹	£1,039m	£1,267m	n/a	-18%
Revenue	£1,000m	£1,144m	-13%	-14%
Operating profit²	£129m	£201m	-36%	-38%
Operating margin²	12.9%	17.6%	-470bps	-500bps
Profit before tax²	£108m	£182m	-40%	-43%
Cash from operations	£202m	£150m	35%	n/a
Earnings per share²	38.7p	61.4p	-37%	n/a
Dividend per share	15.0p	15.0p	0%	n/a
Return on Capital Employed³	14.4%	17.3%	n/a	-290bps
Net debt	£817m	£861m4	£44m	n/a

Keith Cochrane, Chief Executive, commented: “This is the most severe downturn in oil and gas markets for nearly thirty years, and as a result North American upstream activity has reduced substantially. As we indicated through the first half, this has had a significant impact on the Group’s interim financial performance. During this period, we have remained focused on responding to these conditions, executing effectively and generating cash. Reflecting our ongoing confidence in the long term structural growth prospects of our markets, we continue to invest in our strategy and extend our global leadership positions.

"Looking ahead, oil and gas will continue to be tough, with industry expectations of a modest improvement at best in North American activity levels towards the end of the year. However, with the normal seasonal bias of the Minerals and Power & Industrial divisions, increased restructuring benefits, further cost savings and a good contribution from recent acquisitions, we expect a meaningful sequential improvement in our financial performance in the second half of 2015, alongside continued strong cash generation.”

Read the full announcement

Webcast

A live webcast of the management presentation to the investment community will begin at 8:30am (BST) on 30 July 2015 at weir.co.uk.

Enquiries

Investors: Stephen Christie +44 (0) 7795 110456
Media: Raymond Buchanan / Ross Easton +44 (0) 7713 261447 / +44 (0) 7920 190994
Brunswick: Patrick Handley / Nina Coad +44 (0) 20 7404 5959

Notes

2014 restated at 2015 average exchange rates.
Adjusted to exclude exceptional items and intangibles amortisation. Reported operating profit and profit before tax were £61m (2014: £178m) and £39m (2014: £158m) respectively. Reported earnings per share were 17.5p (2014: 53.8p).
Continuing operations EBIT before exceptional items on a constant currency basis (excluding Trio EBIT) divided by average net assets (excluding Trio net assets) excluding net debt and pension deficit (net of deferred tax asset).
Net Debt at 2 January 2015