Interim Management Statement
THE WEIR GROUP PLC
7 November 2011
INTERIM MANAGEMENT STATEMENT
The Weir Group PLC today issues its Interim Management Statement for the period
to 4 November 2011. Â Financial information is given for the 39 weeks ended 30
September 2011.
Market conditions across the mining and upstream oil and gas markets remained
strong through the third quarter with the Group continuing to perform well,
achieving a new record in quarterly order input. Â These positive trends
continued through October. Although we remain vigilant given current macro-
economic uncertainty, this performance underpins our confidence in delivering a
strong set of results for 2011, in line with our expectations, and starting
2012 with a record order book.
Revenue strengthened further in the third quarter, ahead of both the first half
run rate and prior year period, as a result of the first half's strong order
input. Â As a result, Group operating profits were also up on the same
comparatives, with Group margins broadly in line with the first half.
Reported order input(1) was up 27% in the quarter despite strengthening prior
year comparatives. As a result, order input for the 39 weeks increased by 37%
(H1(2): 43%) against the prior year period. Original equipment orders for the
39 weeks were up 48% (H1: 67%) and aftermarket orders up 28% (H1: 25%). Â For the
same period, like for like order input was up 28% (H1: 32%) with original
equipment orders up 39% (H1: 57%) and aftermarket orders up 18% (H1: 15%).
MINERALS
Reported order input increased 25% in the quarter against the equivalent prior
year period giving input growth for the 39 weeks of 31% (H1: 34%) against the
same period last year. Original equipment orders for the 39 weeks were up 30%
(H1: 38%) in line with our August expectation of a moderating trend over the
second half of the year due to the phasing of new project awards. Â Aftermarket
input was up 32% (H1: 32%) as strong growth in ancillary products and services,
underpinned by the Linatex acquisition and our strategic growth initiatives, was
maintained supported by a positive market environment.
Order input, for the 39 weeks, on a like for like basis, was up 21% (H1: 23%),
with original equipment orders up 27% (H1: 34%). Aftermarket orders on the same
basis were up 16% (H1: 14%).
We continue to see a good pipeline of future opportunities with no sign of
macro-economic uncertainty impacting customer production levels or new project
developments at this time.
OIL & GAS
Divisional order input in the quarter increased 24% relative to the prior year
period achieving a new record in quarterly order input. Order input for the 39
weeks was up 56% (H1: 82%).
Upstream input in the quarter grew by 39% relative to last year despite the
significant pick up in input that took place in Q3 2010, with input up 84% (H1:
128%) for the 39 week period compared to the prior year period. Â Continued
growth in North American horizontal rig count, a growing installed base and the
conversion of initial customer enquiries into 2012 forward pump orders means
that we now expect upstream input for the full year to exceed US$1 billion,
providing a record year end order book and a strong start to 2012.
Downstream market conditions remain challenging while the Middle East service
markets continue to be positive.
POWER & INDUSTRIAL
Order input for the 39 weeks was up 23% (H1: 23%) on a reported basis and flat
(H1: flat) on a like for like basis. Â Overall market conditions remain mixed
with continuing delays in nuclear projects and largely weak general industrial
markets. Â This performance was offset by opportunities to drive growth through
our strategic initiatives and the impact of the acquisitions made in 2010.
NET DEBT
Net debt at 30 September 2011 was higher than that reported at 1 July 2011 with
further investment in working capital, also anticipated in Q4, supporting
ongoing business growth, and providing the platform for delivery in 2012 of the
expected record year end order book.
Notes:
1. Order input is reported on a constant currency basis.
2. H1 refers to the financial period 26 weeks ended 1st July 2011
3. Where growth is provided on a like for like basis, like for like is defined
as comparison of current year results to the equivalent prior year period
for those businesses that have been part of the Group throughout the current
and prior year reporting period, on a constant currency basis.
A conference call for analysts and investors will be held at 8 a.m. (UK time) on
Monday
7(th) November to discuss this statement.
For dial-in details please see our corporate website www.weir.co.uk
Contact details:
The Weir Group PLC
Vicky Ferrier, Head of IR & Tel. 0141 308 3782 (Mobile:
Communications 07787 105515)
Maitland Tel. 020 7379 5151
Neil Bennett
Rowan Brown
This information includes 'forward-looking statements'. Â All statements other
than statements of historical fact included in this release, including, without
limitation, those regarding the Weir Group's financial position, business
strategy, plans (including development plans and objectives relating to the
Company's products and services) and objectives of management for future
operations, are forward-looking statements. These statements contain the words
"anticipate", "believe", "intend", "estimate", "expect" and words of similar
meaning. Such forward-looking statements involve known and unknown risks,
uncertainties and other important factors that could cause the actual results,
performance or achievements of the Company to be materially different from
future results, performance or achievements expressed or implied by such
forward-looking statements. Such forward-looking statements are based on
numerous assumptions regarding the Company's present and future business
strategies and the environment in which the Company will operate in the future.
These forward-looking statements speak only as at the date of this document. The
Company expressly disclaims any obligation or undertaking to disseminate any
updates or revisions to any forward-looking statements contained herein to
reflect any change in the Company's expectations with regard thereto or any
change in events, conditions or circumstances on which any such statement is
based. Past business and financial performance cannot be relied on as an
indication of future performance.
This announcement is distributed by Thomson Reuters on behalf of
Thomson Reuters clients. The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: The Weir Group PLC via Thomson Reuters ONE
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