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2010 US roadshow

2010 US roadshow. March 2011. Excellent Engineering Solutions. Group overview. Weir Minerals, Sao Paulo, Brasil. Excellent Engineering Solutions. The Weir Group today. Revenue OE / Aftermarket. 49. 46. 42. Established global engineering Group aligned to high growth markets Minerals

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2010 US roadshow

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  1. 2010 US roadshow March 2011 ExcellentEngineeringSolutions

  2. Group overview Weir Minerals, Sao Paulo, Brasil ExcellentEngineeringSolutions

  3. The Weir Group today Revenue OE / Aftermarket 49 46 42 • Established global engineering Group aligned to high growth markets • Minerals • Oil & Gas • Power • Product portfolio focused on highly abrasive flow applications • Strong aftermarket opportunities • Philosophy of operational excellence • 37 manufacturing facilities • Over 100 service facilities • Over 12,000 employees worldwide (%) 51 54 58 Revenue by sector % Revenue by geography % Emerging markets Global engineering solutions provider

  4. Sales and operating margins 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% • Operating margins doubled • Shareholder returns improved materially • Share price increased five-fold • Earnings per share trebled • Dividend per share up nearly 90% • Strong, resilient platform established • Aftermarket contributed 58% of 2010 revenue • Sales, EBITA, margins, EPS & DPS all increased >10% 2010 • Highly cash generative Earnings and dividend per share Input by sector Focused, high performing Group developed over past 5 years

  5. Minerals Oil & Gas Power & Industrial Driving growth the Weir way • Building on an excellent platform • Customer driven product & service innovation • Collaborative mindset • Expand global capability • Quality acquisitions skillfully integrated • Investment in engineering skills & product development • Broaden and deepen product portfolio • Build customer partnerships • Leverage skills, knowledge & best practice across the group • Globalise existing products & services • Extend emerging market presence Clear strategy to grow returns over the next five years

  6. Weir Group plc Performance Appraisal Objectives Personal Business Upgrade Action Succession Plans Plans High Potential Leadership Assessment Employees PDP Personal Development Process Guidelines Leadership competency Compliance Scorecard Weir Commercial System The Weir Way Leadership Development New Product Innovation Risk & Control Framework Best Practice Global Structures Process, target driven organisation focused on operational excellence

  7. Total global ore production (million tonnes) Medium term fundamentals Source: CRU Strategies Minerals • Ore production growth forecast to continue (c.4% p.a. to 2013) • Driver of aftermarket revenues • Substantial increase in miners capex plans (c.50% in 2011) • South America major beneficiary Oil & Gas • US rig count growth expected to moderate (c.7% p.a. to 2013) • Oil shales supporting higher horizontal rig count growth • Increasing international interest in gas shales Power & Industrial • Wind generation to grow strongly (c.15% p.a. to 2013) • Pre-Japan: Nuclear renaissance spreading to US, India, UK • Increased backlog of life extension and refurbishment Active US rig count (average number of rigs) Source: Spears and Associates Global Power generation (GW) Source: ABS Energy Research Positive outlook underpinned by emerging market demand

  8. Market share of niche Niche as % of total market Market positioning Minerals Power & Industrial Oil & Gas • Addressable mkt - £2.7bn (of which £1.4bn mining) • Market leader • Power gen. valves market - £2.3bn • Growing share • Upstream well services market - £1.1bn • Market leader x14 Mining equipment market £39bn Valve market £22bn Upstream equip. & service market £27bn c.7% c.28% c.10% x9 c.4% x25 c.4% c.20% Strong niche positions; opportunity to expand into aligned markets

  9. 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 Innovation & geographic expansion Mkt growth + operational leverage Positioned to create substantial shareholder value over the long-term

  10. Divisional overview Weir Minerals, Sao Paulo, Brasil ExcellentEngineeringSolutions

  11. DIVISION MARKET FOCUS PRODUCTS % OF SALES 52% 33% 14% Focused on three end markets with positive fundamentals

  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

  13. Minerals divisionEnd markets and key drivers Market by sector • Current addressable market of £2.7bn • 55% OEM, 45% Aftermarket (spares & service) • Emerging markets represent 21% of market • Market leading position • No1 in slurry pumps, No2 in cyclones & mill liners, No3 in valves • 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 Estimated market shares Source: CRU Mining sector capex – 2009-2013 2009 2010 2011 2012 2013 Source: CRU Strong market fundamentals and market leading positions

  14. Minerals divisional performance Input OE / Aftermarket 20081 20091 + / -3 £m 2010 Input OE 420 317 490 +32% Input aftermarket 564 465 470 +21% Input Total 984 782 960 +26% Revenue OE 351 414 430 -15% Revenue aftermarket 550 465 458 +18% Revenue Total 901 879 888 +3% EBITA 175 141 140 +24% Operating margins (2) • Strong aftermarket driven by emerging market demand • Emerging market contribution 51% • Record operating profit & margins Revenue OE / Aftermarket 19.4% 16.0% 15.8% +340bps Input by geography % Emerging markets • (1) 2009 and 2008 restated at 2010 average exchange rates • Adjusted to exclude intangibles amortisation • 2010 v 2009

  15. Minerals divisionBusiness structure • 20 businesses • 21 production sites • 55 service centres • 180 distributors • Not on map • c.6,300 employees Major customers

  16. Minerals divisionKey products

  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

  18. Oil & Gas divisionEnd 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 • ~20% market share of upstream served market • Strong position in aftermarket & spares • Upstream key driver; unconventional drilling activity • Strong rebound in rig count since 2009 • Unconventional trend provides long-term growth • Growing development of oil and liquid rich shale formations • 70% of world’s unconventional reserves outside US • Downstream operation Gabbioneta • Centrifugal API pumps for refining & petrochemical industries Source: Spears & Associates Rig count growth by region Source: Baker Hughes; Morgan Stanley Niche position in market with positive long-term fundamentals

  19. Oil & Gasdivisional performance Input OE / Aftermarket 20091 20081 + / -3 £m 2010 Input OE 289 124 157 +133% Input aftermarket 337 194 176 +74% Input Total 626 318 333 +97% Revenue OE 194 119 140 +63% Revenue aftermarket 268 189 185 +41% Revenue Total 462 308 326 +50% EBITA 117 53 74 +122% Operating margins (2) • US horizontal rig count increase, supported by oil and liquid rich plays • Aggressive replacement cycle in harsher shales • Challenging downstream conditions • Recovery in Middle East Services input, driven by Iraq Revenue OE / Aftermarket 25.4% 17.2% 22.8% +820bps Input by geography % Emerging markets • (1) 2009 and 2008 restated at 2010 average exchange rates • Adjusted to exclude intangibles amortisation • 2010 versus 2010

  20. Major customers SPM Oil & Gas divisionBusiness structure • Forth Worth, Texas • 832 employees • Products: well service pumps, flow control heads • Markets: Drilling and well completion • 12 businesses • 5 production sites • 33 service centres • Joint Ventures (Abu Dhabi, Saudi Arabia and China) • c.1,900 employees Joint Ventures

  21. Oil & Gas divisionProducts 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 Cementing pumps and iron, safety restraint systems, pressure control (BOP) repairs & recertification, inspect & refurbish drill pipe, premium threading Decommissioning Drilling & well construction Well service (acidizing, gravel packing) pumps and iron, safety restraint systems Intervention Frac pumps and flow control iron, safety iron manifold trailers, safety restraint systems, fluid end repairs, spare parts Well completion Rotating equipment asset management (UK, Caspian), rotating equipment & valve repair and services Production

  22. Shale fracking process

  23. 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

  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

  25. Power & Industrialdivisional performance Input OE / Aftermarket £m 2010 20091 20081 + / -3 2010 • AM impacted by postponed outages and subdued industrial markets • Positive contribution from new acquisitions in 2010 • Focus on margin progression 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 26 24 20 +11% Operating margins (2) Revenue OE / Aftermarket 10.7% 10.3% 8.1% +40bps Input by geography % Emerging markets • (1) 2009 and H1 restated at 2010 average exchange rates • Adjusted to exclude intangibles amortisation • 2010 versus 2009

  26. Major customers Power & Industrial DivisionBusiness structure • 10 businesses • 11 production sites • 13 service centres • c.2,650 employees LISCO - LIBYA

  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

  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

  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

  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

  31. n/a Operational excellence LTAs(1) (2) 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 Taking action to realign underperforming operations • Canadian restructure completed • Downstream oil & gas restructuring Group Lean Score (2) Weir Commercial System (2) (1)An accident resulting in lost time of more than 4 hours (2) Excluding acquisitions Extending and sustaining focus on operational excellence

  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

  33. 2010 £m 2009 £m Variance +/- 2010 results summary (1) Operating profit 309.7 204.7 +51% 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% EPS 100.4p 64.1p +57% Dividend per share 27.0p 21.0p +29% Revenue 1,635 1,390 +18% Operating margins 18.9% 14.7% +420bps Effective tax rate 28.1% 27.9% +20bps ROCE(2) 32.4% 24.4% +800bps 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

  34. Input growth £m (1) (2) (Cumulative versus 2005 base of £1,058m) Overview • Upstream O&G market share gains • Product and service innovation driving growth • Broadening service and product capabilities • Sustained commitment to operational excellence • Underperforming operations realigned • Value enhancing acquisitions strengthening the platform Operating margin improvement (bps) (1) (Cumulative versus 2005 base of 8.6%) EPS growth (pence) (1) (Cumulative versus 2005 base of 23.9p) 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

  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

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