Company Announcements

 The Weir Group PLC trading update for the first quarter ended 31 March 2024¹

Order progression in line with expectation and 2024 guidance on track

Jon Stanton, Chief Executive Officer, commented:

"I'm pleased with the strength of our performance in the first quarter. We are delivering the technology to enable our customers to address both the demand for critical metals and the transition to more sustainable mining. Our aftermarket growth algorithm delivered as expected, with our significant installed base and diversification across commodities and geographies resilient against mixed commodity prices and increasing geo-political tensions. With further progress in our Performance Excellence programme, we are on track to deliver our 2024 guidance of growth in revenues, profits and operating margins.  Further ahead the opportunity for Weir to continue to deliver compounding growth and margin expansion is compelling."

First quarter review  

Group

Our performance in 2023 laid solid foundations on which to build toward our 2026 growth and margin commitments.  We ended the year with a strong order book and good operating momentum, a position our teams are now capitalising on to drive aftermarket growth.

During the first quarter of 2024 we made great progress building on these foundations as we grew aftermarket orders and continued to execute on our Performance Excellence agenda. In both Minerals and ESCO, we continue to win in the market through successful competitive conversions underpinned by our differentiated technology and service proposition.

Commodity prices were mixed in the quarter but were very positive in the case of our largest exposures including copper and gold, remaining well above miners' cost to produce, and stimulating demand to accelerate production from existing assets.  The diversification Weir has across commodities and geographies meant that issues such as nickel over supply and the mothballing of the Cobre Panama copper mine were more than offset by positives elsewhere.

This translated into strong overall demand for our mining spares and expendables through the quarter with order growth in our aftermarket business of 4%, again demonstrating our inherent resilience through the mining cycles.

Current trends in original equipment continue to be dominated by high levels of activity in small brownfield projects to drive optimisation and tackle sustainability challenges on existing mines.  As expected, this translated into original equipment orders that were stable sequentially on Q4 2023 and down against a strong prior year comparative (+22%), but at historically high levels on an annualised basis.

Our pipeline of opportunities underpin our guidance of flat OE orders year on year. While there is a clear thrust in certain commodities to try and accelerate new project approvals, this remains as upside when they move ahead. We are supporting this with innovative new flowsheet technologies which will put us in a strong position to capture an historically larger portion of these opportunities once they materialise.

Group orders² in the quarter were +1%, in line with our expectations and seasonal trends.

In the quarter we completed key milestones in our Performance Excellence programme which support future margin expansion and growth in cash conversion. These included the official opening of our new ESCO foundry in Xuzhou, integration of the Weir Integrating Network System (WINS) at several of our manufacturing sites across Minerals and launching Weir Business Services (WBS) across our North American business, with all regions expected to be transitioned by the end of 2024.

Minerals

Demand for AM was driven by growth in mining production and conversion from our growing installed base. Year-on-year growth reflects the impact of price increases and volume growth in hard rock mining, partially offset by mine closures in Panama and Australia. AM orders were sequentially stable reflecting typical seasonal patterns.

In OE, demand was primarily driven by debottlenecking, brownfield expansion and sustainability projects at existing mines. This included a £7m HPGR order in an Australian gold mine as well as three large mill circuit pump wins in the Central African copper belt, a result of our strategic geographic expansion initiatives combined with our market leading products.

ESCO

Demand from our mining customers was strong, with quarterly mining orders ahead of Q4 2023. Demand was high for mining expendables, reflecting ore production trends and recent market share gains including 17 competitive digger net conversions.

In infrastructure, we returned to through cycle order levels as expected.

Net debt

As expected we remain on track to further de-lever the balance sheet over the full year given anticipated strong cash generation.  During the quarter S&P upgraded their outlook on Weir from stable to positive.

Outlook

The business is executing well and conditions in our mining markets are positive. Robust demand for our AM spares and brownfield OE solutions give us confidence in full year trading in line with expectations for growth in constant currency revenue, profit and operating margin. We expect free operating cash conversion of between 90% and 100%.

Phasing of operating profit in 2024 is expected to be in line with typical seasonal patterns and operating margins are expected to increase year on year and sequentially through the year in line with historical norms and as further Performance Excellence benefits are realised.

Further out, the long-term fundamentals for mining and our business are highly attractive, underpinned by decarbonisation and the energy transition, GDP growth, and the transition to sustainable mining. We have a clear strategy to grow ahead of our markets, with specific initiatives underpinning our ambition to deliver through-cycle mid-to-high single digit percentage revenue growth at sustainably higher margins.

Notes:

1.             Financial information is given for the three months ended 31 March 2024.

2.             Orders are reported on a constant currency basis at March 2024 average exchange rates.

Analyst and investor conference call

A conference call for analysts and investors will be held at 0800 BST on Thursday 25 April 2024 to discuss this statement. Participants can join the call by registering in advance by visiting www.global.weir/investors and following the link on the page. A recording of this conference call will be available until Thursday 2 May 2024.

About The Weir Group PLC

Founded in 1871, The Weir Group PLC is one of the world's leading engineering businesses with a purpose to make its mining and infrastructure customers' operations more sustainable and efficient. Weir's highly engineered technology enables critical resources to be produced using less energy, water and waste while reducing customers' total cost of ownership. The Group is ideally positioned to benefit from structural trends that support long-term demand for its technology including the need for more essential metals to support economic development and carbon transition. The Group has c.12,000 employees operating in over 50 countries with a presence in every major mining region of the world. Find out more at www.global.weir.

Weir's ordinary shares trade on the London Stock Exchange (ticker: WEIR LN) and its American Depositary Receipts trade over-the-counter in the USA (ticker: WEGRY).

Appendix 1 - Group quarterly order trends

Appendix 2 - 2024 Q1 order bridges (as reported)