REG - Weir Group PLC - Final Results
28/02/2025 07:15
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RNS Number : 7991Y Weir Group PLC 28 February 2025
The Weir Group PLC reports its Full Year results for the year ended
31 December 2024.
AM demand acceleration and strong execution through second half of 2024
2026 targets for Performance Excellence savings and operating margins upgraded
Project pipeline continuing to strengthen and beginning to convert
• £67m of orders received for Reko Diq and OCP expansion
projects
• Overall OE orders(1) slightly down YoY; strong demand in
brownfield with Q4 delays in project awards
Installed base expansion and improving H2 activity levels driving strong
aftermarket demand growth
• Q4 AM orders(1) +10% YoY (+7% excluding £14m from re-phasing
of multi-year contract)
• Full year AM orders(1) +4% reflecting acceleration of demand
through second half
Performance Excellence benefits and adjusted operating margins ahead of prior
expectation
• Cumulative Performance Excellence savings of £29m to date
• Adjusted operating profit(1,2) of £472m, +9%
• Adjusted operating margin(1,2) of 18.8%; significantly ahead
of prior year +170bps
Cash conversion above target range and returns improving further
• Free operating cash conversion of 102% (guidance 90-100%)
• Net debt to EBITDA 0.7x
• Return on capital employed of 19.3%, +130bps
2025 Outlook: Growth in constant currency revenue, operating profit and
operating margins
• Strong opening order book and positive activity levels in AM
• Performance Excellence savings of £20m expected in 2025
• Free operating cash conversion of 90-100%
• 2026 Performance Excellence savings target increased to £80m
and operating margins expected to be above 20%
2024 2023 As Constant currency(1) +/-
reported +/-
Continuing Operations(3)
Orders(1) £2,523m £2,475m n/a +2%
Revenue £2,506m £2,636m -5% -1%
Adjusted operating profit(2) £472m £459m +3% +9%
Adjusted operating margin(2) 18.8% 17.4% +140bps +170bps
Adjusted profit before tax(2) £428m £411m +4% n/a
Statutory profit before tax £347m £321m +8% n/a
Adjusted earnings per share(2) 120.0p 115.9p +4% n/a
Return on capital employed 19.3% 18.0% +130bps n/a
Total Group
Statutory profit after tax £313m £229m +37% n/a
Statutory earnings per share 121.1p 88.2p +37% n/a
Free operating cash conversion 102% 85% +17pp n/a
Dividend per share 40.0p 38.6p +4% n/a
Net debt(4) £535m £690m +£155m n/a
(See footnotes on page 5)
Jon Stanton, Chief Executive Officer said:
"Weir is delivering on its mission to provide mining technology for a
sustainable future and executing well against the commitments set out in our
equity case. We are shaping innovation that will enable the mining industry to
scale up and clean up and delivering strong outcomes for customers. At the
same time our Performance Excellence programme has created the efficient
scalable platform that positions Weir for compounding growth in the years
ahead.
The power of our transformed platform was evident in our strong execution in
2024 with operating margins and cash conversion significantly ahead of
expectation, supported by strengthening demand conditions in the second half.
As we go into 2025, we have a growing pipeline of project bids, a strong order
book, and see positive aftermarket demand drivers in mining. For the full
year, we expect to deliver growth in revenue, operating profit and margins. We
expect our Performance Excellence programme will deliver incremental savings
of £20m in 2025, and cumulative savings of £80m through 2026, moving our
operating margins sustainably beyond 20%."
A webcast of the management presentation will begin at 07:30 (GMT) on 28
February 2025 at www.investors.weir (http://www.investors.weir/) . A
recording of the webcast will also be available at www.investors.weir
(http://www.investors.weir/) .
CHIEF EXECUTIVE OFFICER'S REVIEW
Introduction
In 2024, we performed strongly against a backdrop of macroeconomic and
geopolitical uncertainty. We grew our pipeline of market-leading sustainable
original equipment (OE) solutions and delivered growth in our aftermarket (AM)
business as customers maximised production at their existing assets. We
transformed the way we operate across our businesses and maintained our focus
on our customers. We executed well against our commitments to our stakeholders
delivering significant growth in operating profit, operating margins and cash
generation.
Throughout the year, activity levels in mining markets remained high as
customers position to address the long-term structural demand for critical
minerals. While permitting remains a challenge in certain geographies,
governments around the world have signalled their support for accelerating
long delayed applications and bright spots are emerging as customers renew
investment in future growth through new greenfield projects. In June we
launched our refreshed brand - mining technology for a sustainable future -
positioning Weir as a market-leading strategic partner for our customers as
they scale up and clean up to deliver the metals and minerals required for the
energy transition. This is reflected in our strengthening pipeline of projects
that is beginning to convert, while our resilient aftermarket biased business
model continues to deliver growth across our businesses.
We made significant progress in our Performance Excellence programme in 2024,
delivering cumulative savings of £29m, ahead of expectations. Our achievement
reflects our progress in optimising capacity, implementing lean processes and
functional transformation across Weir, all while maintaining our commitment to
be there for our customers.
Our refreshed sustainability strategy now sits at the core of our We are Weir
strategic framework - focusing on what we do internally to deliver sustainable
Weir and externally to accelerate sustainable mining. The health, safety and
wellbeing of colleagues remains our top priority, and we have taken steps to
reinforce and reinvigorate a zero harm culture. Partnering with customers, our
engineers are developing innovative new technologies to move less rock, use
less energy, use water wisely and create less waste, enabled by intelligent
automation. In 2024 we launched ESCO(®) Nexsys(TM), the next generation of
our market-leading core GET and lip system. We also continued to expand our
digital offering with the launch of NEXT intelligent solutions and new MOTION
METRICS(TM) ShovelMetrics(TM) technology to support our customers in making
real-time decisions that help them to run their operations more efficiently
and safely.
Our performance in 2024 is a testament to the hard work and dedication of Weir
colleagues across the globe. We recognise that the tough choices we have had
made as we optimise our business has impacted some of our people. I would like
to thank all our employees for their commitment and contribution to our
success.
Going into 2025, we have strong operational momentum and supportive mining
markets, underpinning our expectations for further revenue growth and margin
expansion. We anticipate greater capital expenditure in mining markets will
drive heightened demand for our market-leading sustainable solutions,
particularly for larger flowsheet solutions. Given the strong delivery of our
Performance Excellence programme, we are upgrading the absolute savings target
to £80m in 2026 and, as a result, expect to achieve operating margins
sustainably beyond 20% in 2026.
Further out, we are well positioned to deliver compelling value creation to
our stakeholders. We are a focused mining technology leader with
differentiated capabilities and high barriers to entry. Our markets are primed
for a multi-decade growth opportunity driven by demand for critical minerals
to support the energy transition, as well as the adoption of artificial
intelligence (AI). Together with our strong operating platform, we are well
positioned to deliver compounding financial benefits, while remaining
resilient and doing the right thing for our people and the planet.
OE growth: Demand for critical minerals driving order pipeline conversion
The structural demand drivers for critical metals enabling electrification
remain robust, supplemented by growing investment in AI. Despite short-term
uncertainty in commodities, constructive changes in mine permitting and
greenfield capital expenditure globally drove demand for our larger OE
solutions through the second half of the year.
We secured a £53m order to supply an industry-leading fine grinding solution
to Barrick Gold's Reko Diq copper-gold project in Pakistan, capitalising on
growing industry acceptance of our Redefined Mill Circuit and supporting our
customer's need to use less energy and water at this remote mine site. We also
secured a £25m order to supply an energy efficient separation solution to
OCP's Benguerir and Louta phosphate projects in Morocco, leveraging the
market-leading WARMAN(®) slurry pump and CAVEX(®) hydrocyclone brands.
Demand for OE in smaller brownfield and debottlenecking projects at existing
mines remained stable.
Full year constant currency OE orders decreased 4% reflecting delays in timing
of project awards in Q4 following a strong Q3, with several medium size orders
being received in January. In our core Minerals business, we converted 92% of
our completed mill circuit pump trials and in ESCO we won 118 net major
diggers as we continue to drive strategic growth initiatives.
Encouragingly, several Tier 1 miners announced plans for additional capex
throughout the globe and we continue to position ourselves as an essential
partner for our customers in key growth markets. For example, in order to
participate in the mining and metals growth strategy of Saudi Arabia, we
agreed a head of terms to form a joint venture with Olayan Saudi Holding
Company (Olayan), which will extend our extensive expertise in sales and
sustainable mining technology solutions to the region. Under the terms of the
joint venture, Weir will take the lead on sales, technical and product
responsibilities, while Olayan will focus on new business development,
capitalising on its strong presence and knowledge of the regional market.
AM growth: Installed base expansion and improving activity levels
Overall, we saw good levels of activity across the global mining sector.
Market prices for our main commodity exposures of copper, gold and iron ore
were well above customers' cost to produce, while nickel and lithium producers
remain under pressure from lower commodity prices.
Across the Group, demand was particularly strong in the Middle East and Africa
where we continue to grow market share. Both Minerals and ESCO saw an elevated
level of mine-specific headwinds in the first half, such as shutdowns in
Panama and Australia, but these trends were more than offset in the second
half as the commissioning of new installed base accelerated. From a commodity
perspective, order growth was strongest in future facing minerals such as
copper and phosphate, while year-on-year demand decreased in both coal and the
oil sands.
Infrastructure markets were largely stable through the year. Orders from
infrastructure customers grew 2%, though absolute orders remain below peak
levels seen in previous years.
Full year constant currency AM orders increased by 4% driven by hard rock
mining production trends, installed base expansion and a modest contribution
from pricing.
As previously indicated, the large annual recurring order usually received in
Minerals during the second quarter has been split this year between the second
and fourth quarter due to the timing of the contract renewal - the net effect
being that c.£14m of aftermarket orders have shifted to the second half. In
2025, the full annual order of around £31m is expected to be received in the
second quarter.
Revenue and margins: Performance Excellence ahead of plan
Despite strong execution in the fourth quarter, revenue for the Group declined
1% for the full year on a constant currency basis with aftermarket growth of
2% offset by the phasing of two large OE project deliveries into 2025. The
Group's book-to-bill was 1.01.
The operating environment in 2024 was stable. Our leading market positions and
strong brands enabled us to achieve sufficient price increases during the year
to protect our gross margins from any inflationary effects across our cost
base.
Progress within our Performance Excellence programme continues at pace and is
ahead of our targets for cumulative absolute savings. During the year, we
recognised the benefits of projects launched at the start of the programme,
including the consolidation of several Minerals manufacturing facilities in
the US and APAC, as well as optimisation of our Australian service centre and
Latin American distribution footprints. Adoption of our refreshed lean
programme, Weir Integrating Network System (WINS) in Minerals, contributed to
the largest savings during the year, driving a reduction in overall material
cost as well as quality improvements.
We opened our new ESCO foundry in Xuzhou, China, the most efficient in our
network, ensuring that we remain highly responsive to demands from within our
own supply chain. We also established Weir Business Services (WBS) and are
embedding new ways of working through transformation across our Finance, HR
and IS&T functions, the benefits of which will be reflected in years to
come.
On a constant currency basis, adjusted operating profit grew 9% year-on-year,
and adjusted operating margins were 18.8%, up 170bps on the prior year.
Expansion in operating margin arose from very strong execution within
Performance Excellence workstreams and movement in Minerals revenue mix
towards aftermarket.
Returns: Growth in returns and strong balance sheet
Free operating cash conversion for the year increased to 102%, above our 2024
target range of 90% to 100%, benefiting from a strong reduction in working
capital driven by lean projects within Performance Excellence. Our strong cash
generation continued through the second half of the year and overall
represents a significant 17 percentage point improvement on the prior year.
Working capital as a percentage of sales reduced to 20.7% (2023: 21.3%).
As a result, net debt to EBITDA at the end of December was 0.7x, giving the
Group considerable optionality and flexibility to deploy capital to grow total
shareholder returns.
Reflecting our focus on execution together with continuing deleveraging of our
balance sheet, return on capital employed (ROCE) was 19.3%, an increase of
130bps versus the prior year.
The Board is recommending a final dividend of 22.1 pence per share. This
equates to a total full year dividend of 40.0 pence per share, in line with
our policy to pay out 33% of adjusted earnings per share (EPS), and represents
an increase of 4% on the prior year. The final dividend will be paid on 30 May
2025 to shareholders on the register on 22 April 2025.
Safety and sustainability: Affirming our vision for a zero harm workplace
Our goal is a zero harm workplace where everyone goes home safe and healthy.
In April, tragically one of our colleagues suffered a fatal accident while at
work. Since then, we have held safety stand downs to discuss the learnings and
re-emphasise that safety must always come first. Overall, in 2024, lost time
accident numbers were flat year-on-year and our total incident rate(5) (TIR)
was unchanged at 0.42 (2023: 0.42).
Within our businesses we continue to talk openly about mental health and
prioritise wellbeing. We were once again recognised by CCLA as a 'top
improver' for mental health in an assessment of the UK's largest companies.
We created a new inclusion, diversity and equity (ID&E) Steering Committee
of representatives from our senior leadership team as part of our efforts to
accelerate the benefits that come with having a vibrant purpose-driven
culture.
We invested in our people, supporting a focus on talent and succession
planning through learning and personal growth. Our new global mentoring
programme will provide additional opportunities to connect our employees and
develop mutually rewarding relationships across our workforce. We contributed
to science, technology, engineering and maths (STEM) initiatives across the
globe, building talent and capabilities for the future.
Our employee net promoter score (eNPS) of 47 remains in the top quartile of
manufacturing companies as benchmarked by Peakon. We maintain high levels of
participation across our employees, with 88% responding to this year's survey.
We have continued to embed our refreshed sustainability strategy to deliver
sustainable Weir and work in partnership with customers to accelerate
sustainable mining. We have made great progress against our 2030 scope 1&2
Science Based Targets initiative (SBTi) targets and are well on track to
deliver our target to reduce these emissions by 30% versus a 2019 baseline.
Outlook: Growth in revenue, operating profit and margins in 2025
Activity levels in our mining markets are positive as customers look to invest
in projects that address structural critical metal demand. Supported by
favourable commodity prices, customers continue to prioritise maximising ore
production and improving the efficiency of existing mine sites which, together
with ongoing installed base expansion, provides a strong underpin for demand
for our aftermarket solutions.
We have upgraded our total Performance Excellence savings target to £80m in
2026, with £20m of incremental savings expected in 2025. This is supported by
additional capacity optimisation and lean process opportunities that have been
identified as we progress with the programme. We anticipate additional
exceptional costs of £30m to complete these projects, taking the total
expected programme cost to £120m.
The continued favourable backdrop in mining, combined with execution of
Performance Excellence, underpins our confidence in delivering 2025 operating
profits in line with current market expectations, driven by mid single digit
revenue growth and around 50bps of operating margin expansion. We expect free
operating cash conversion of between 90% and 100%, in line with our
medium-term guidance as capex settles in line with depreciation and our lean
operating model continues to deliver working capital efficiency.
Further out, the long-term value creation opportunity for Weir is compelling.
The fundamentals for our business are highly attractive, underpinned by
long-term structural growth trends in our mining markets, and our technology
strategy to accelerate sustainable mining. In addition, we expect the benefits
of Performance Excellence will drive further margin expansion and move our
operating margins sustainably beyond 20%, while our strong cash generation and
balance sheet give us optionality to allocate capital, compounding total
shareholder returns.
We are Weir strategic framework: 2024 performance
Each year the Group sets strategic and ESG measures aligned to the 'We are
Weir' framework of People, Customer, Technology and Performance. The table
below summarises our 2024 performance and rating against each of these
measures, with full details outlined in our 2024 Annual Report.
Strategic initiatives 2024 Measures 2024 Performance and rating
People Deliver on zero harm for our people and the environment • Retain our talent • Voluntary attrition <11% G
Accelerate our purpose-driven culture and lead in inclusion, diversity and
equity
Create talent and capabilities for the future
• Improve our succession planning • >8% improvement in roles with approved succession plans G
• Maintain top quartile engagement scores • Engagement score in top 10% of benchmark G
• Improve our safety TIR(5) to 0.385* • TIR(5) of 0.42 (2023: 0.42) G
• Improve our gender diversity* • % of female in bands 3-5 improved by 2.5% G
• No change in % of female in bands 1-2
G
• Maintain our mental health benchmark score* • Maintained Tier 2 ranking in CCLA benchmark score G
Customer Execute our strategic growth initiatives • Execute our strategic growth initiatives in each division • Minerals: executed its key strategic initiatives; orders achieved of G
£155m vs target of £144m
• ESCO: achieved capital orders of $38.5m vs target of $45.3m
Capture value from new strategic alliances
• ESCO: booked 8 conversions / upgrades to mining lip and adapter system G
vs target of 5
Position Weir as a mining technology solutions partner
G
• Capture value from strategic alliances • 7 orders originating from new strategic alliances G
• Position Weir as a mining technology solutions partner • Refreshed brand marketing strategy, deployed internally across group G
and divisions.
• Customer Avoided Emissions* • GEHO joined HPGR in Avoided Emissions product range G
• Customer water optimisation and waste impact* • Developed KPIs to report water optimisation and waste impact outcomes G
Technology Revenue from new products • Increase revenue from new products • >£75m of Minerals revenue from new products G
• >$22m of ESCO revenue from new products
G
Digitise our current business model
Execute our Enterprise Technology Roadmap to plan
• Digitise our current business model • Minerals: >75 NEXT connected sites / new installs G
• ESCO: >75 Motion Metrics(TM) connected sites / new installs
G
• Enterprise Technology Roadmap execution progress • Improved our Weir Technology Readiness Levels ahead of our progress G
target
• Progress our priority R&D projects* • Targets for priority R&D projects achieved G
Performance Improve our lean processes • Lean Process • Minerals: achieved target to improve process management scores G
• ESCO: achieved target labour hours/ton for US foundry network
Optimise our capacity G
Functional transformation, including Weir Business Services
• Capacity Optimisation • Minerals: achieved target savings G
• ESCO: achieved Xuzhou 2 progress target G
• Functional Transformation • Savings achieved relative to value case and key TEA projects delivered G
• Reduce scope 1&2 CO(2)e vs 2019 base aligned with SBTi* • 27% absolute CO(2)e reduction(6) achieved and verified G
• ESG data assurance roadmap* • Assurance roadmap reviewed with Audit Committee and 2024 assurance G
process underway
• Further integrate climate risk and opportunity into strategic • Activity to identify customer physical risk parameters well progressed G
planning*
*ESG measures
Notes:
The Group Financial Highlights and Divisional Financial Reviews include a
mixture of GAAP measures and those which have been derived from our reported
results in order to provide a useful basis for measuring our operational
performance. Adjusted results are for continuing operations before adjusting
items as presented in the Consolidated Income Statement. Details of other
alternative performance measures are provided in note 2 of the Audited Results
contained in this press release.
1. 2023 restated at 2024 average exchange rates.
2. Profit figures before adjusting items. Continuing operations
statutory operating profit was £391m (2023: £368m). Total operations
adjusted operating cash flow excludes additional pension contributions,
exceptional and other adjusting cash items, and income tax paid. Total
operations net cash generated from operating activities was £450m (2023:
£394m).
3. Continuing operations excludes the Oil & Gas Division, which
was sold to Caterpillar Inc. in February 2021 and the Saudi Arabian joint
venture, which was sold to Olayan Financing Company in June 2021.
4. Refer to note 2 of the Audited Results contained in this press
release for further details of alternative performance measures.
5. Total incident rate is an industry standard indicator that measures
lost time and medical treatment injuries per 200,000 hours worked.
6. Market-based absolute CO(2) emissions. 2019 is the baseline year
for our SBTi-aligned scope 1&2 target of 30% reduction in absolute
emissions by 2030.
DIVISIONAL REVIEW
Minerals
Minerals is a global leader in products and integrated solutions for smart,
efficient and sustainable processing in mining and infrastructure markets.
2024 Summary
• AM orders(1) +5%; demand growth driven by ore production and
installed base expansion
• Revenue(1) -2%; AM +3% from volume and price; OE -14% due to
orderbook phasing
• Performance Excellence benefits delivering: operating
profit(1,2) +9%; operating margin(1,2) +200bps
2024 Strategic review
We delivered a year of good strategic progress, including the award of two
large orders featuring our redefined mill circuit technologies, launching our
new digital brand and delivering margin progression supported by Performance
Excellence workstreams. Progress across all four pillars of the We are Weir
strategic framework is outlined below.
People
On safety, TIR for Minerals was 0.34 (2023: 0.34). We are continuing to
implement the lessons learned as a result of the fatal incident suffered by
one of our colleagues in the year and are strengthening our commitment to
achieve zero harm.
Customers
We are generating high levels of customer interest with our portfolio of
sustainable solutions across comminution, separation and tailings. Market
acceptance of our redefined mill circuit continues to grow, offering customers
reduced CO(2) output, energy demand and operational costs. In 2024, OE orders
for comminution doubled year-on-year. Our market-leading WARMAN(®) slurry
pump and CAVEX(®) hydrocyclone separation technologies were selected by OCP
Group for their greenfield phosphate projects in Morocco, a £25m order.
While investing in new growth opportunities, we continue to gain market share
in large mill circuit pumps, converting over 90% of our competitive field
trials in the year. In 2024, we were selected to provide the largest mill
circuit pump in North America to the Highland Valley Copper project in Canada,
highlighting our dedication to innovation and quality.
Technology
In September, we launched our new digital brand NEXT intelligent solutions,
integrating our existing digital offerings such as Synertrex(®) and SentianAI
to offer customers an integrated platform to help their operations run safer
and more efficiently. We now have over 100 sites utilising our digital
platform.
We invested in development of our redefined mill circuit products, taking
lessons from the Iron Bridge project to extend our strong position in large
format HPGRs. In addition, we launched our new ENDURON(®) Elite screen at
MINExpo in September, which is one of the largest screens in the market for
hard rock mining, delivering efficiency and energy savings.
Performance
The Division continues to progress key capacity optimisation workstreams,
aligning the operational footprint to be closer to customers, and programmes
delivering savings across the supply chain.
Within the Performance Excellence programme, the Division has rolled out its
bespoke approach to lean manufacturing, Weir Integrating Network System
(WINS), across several of our operational sites which has resulted in a
significant reduction in the cost of poor quality, while also improving
inventory turns.
On sustainability, in our continued drive to reduce our environmental
footprint, the Division met its target emissions savings in the year and
launched an internal ESG dashboard for several key product lines, which will
allow improved ESG data monitoring and reporting across the Division's
operations.
2024 Financial review
Constant currency £m H1(1) H2 2024 2023(1) Growth(1)
Orders OE 223 257 480 493 -3%
Orders AM 674 706 1,380 1,311 5%
Orders Total 897 963 1,860 1,804 3%
Revenue OE 216 237 453 528 -14%
Revenue AM 643 722 1,365 1,320 3%
Revenue Total 859 959 1,818 1,848 -2%
Adjusted operating profit(2) 168 215 383 353 9%
Adjusted operating margin(2) 19.5% 22.5% 21.1% 19.1% +200bps
Adjusted operating cash flow(2) 151 304 455 418 9%
Book-to-bill 1.04 1.00 1.02 0.98
1. 2023 and 2024 H1 restated at 2024 average exchange rates except for
operating cash flow.
2. Profit figures before adjusting items. Adjusted operating cash flow
excludes additional pension contributions, exceptional and other adjusting
cash items, and income tax paid. Refer to note 2 of the Audited Results
contained in this press release for further details of alternative performance
measures.
Orders increased by 3% on a constant currency basis at £1,860m (2023:
£1,804m), with book-to-bill at 1.02 reflecting installed base expansion and
strength in mining markets. OE orders decreased 3% year-on-year, driven by the
phasing of large orders and market conditions in certain commodity markets
such as nickel and lithium. We received two large orders for the Reko Diq and
OCP projects with £42m and £25m recognised in the year, respectively. AM
orders increased 5% year-on-year, reflecting installed base expansion, growth
in comminution and a minor contribution from price. As expected, H2 included
the remaining value of the multi-period order historically recognised fully in
H1. Excluding the impact of this order, AM grew 5% sequentially in H2. For the
full year, AM orders represented 74% of total orders (2023: 73%), and mining
end-markets accounted for 80% of total orders (2023: 84%).
Revenue decreased 2% on a constant currency basis to £1,818m (2023:
£1,848m), reflecting the expected reduction in revenue from customers in the
Canadian oil sands, the absence of revenue from Russia, and OE order book
phasing. Despite these headwinds, AM revenues grew by 3%, reflecting a strong
performance in both South America and Australasia benefiting from growth in
hard rock mining volumes and contribution from price realisation. Full year
revenue mix moved towards aftermarket, which accounted for 75% of revenue, up
from 71% in the prior year.
Adjusted operating profit increased 9% on a constant currency basis to £383m
(2023: £353m) as the Division benefited from incremental Performance
Excellence savings and strong operational execution.
Adjusted operating margin on a constant currency basis was 21.1% (2023:
19.1%). The year-on-year improvement of 200bps reflects strong business
execution, incremental savings from Performance Excellence, and the benefit
from revenue mix shifting towards aftermarket.
Adjusted operating cash flow increased by 9% to £455m (2023: £418m)
reflecting growth in operating profit and a decrease in the working capital
outflow to £4m (2023: £26m). Working capital movements include an increase
in creditors reflecting phasing of purchases offset by an increase in
inventory and debtors impacted by order book phasing.
ESCO
ESCO is a global leader in ground engaging tools (GET), attachments, and
artificial intelligence and machine vision technologies that optimise
productivity for customers in global mining and infrastructure markets.
2024 Summary
• Orders(1) -1%, growth in core GET and dredge solutions offset
by mining attachments
• Revenue(1) +1%, growth in key mining products and dredge
solutions
• Strong operational execution: operating profit(1,2) +9%;
operating margin(1,2) expansion +140bps
2024 Strategic review
We made strong strategic progress in the year, further improving safety
performance, launching our next generation lip and GET system Nexsys™ and
opening our new foundry in Xuzhou. Progress across all four pillars of the We
are Weir strategic framework is outlined below.
People
Safety performance in ESCO was a highlight, with a reduction in TIR to 0.74
(2023: 0.81). This reflects strong focus across the Division and is an
important step forward on our journey to delivering our ambition of zero harm.
Customers
Throughout the year, the Division grew market share in our core GET markets,
winning net 118 major digger conversions, as our best-in-class wear life and
total cost of ownership model continues to add value to our customers'
operations. We also grew orders in the Middle East and Africa, reflecting the
momentum in these regions for our market-leading product offerings.
We gained further traction with our MOTION METRICS(TM) digital solutions,
growing our installed base and rolling out our subscription-based offering to
customers.
Technology
The commercial launch of our next generation GET technology Nexsys™ was a
major highlight in 2024 and we secured several orders in Q4. The technological
benefits of improved wear life and reduced adapter change time follow
thousands of hours of field trials, with the step change in technology
resonating with customers.
We also launched our latest MOTION METRICS(TM) ShovelMetrics™ payload
monitoring solution, which provides optimised truck loading and improved
haulage efficiency for customers.
In addition, we received the first order for our next generation hydraulic
excavator bucket following extensive field trials. Its lightweight design and
high performance improves payload performance and dig efficiency for
customers, combined with reduced energy usage and emissions, and it is an
important element of the Division's sustainability offerings.
Performance
The Division made strong strides in optimising the performance in its foundry
network. The new Xuzhou foundry opened in the year ahead of schedule, with
production continuing to ramp up and is increasing the Division's low cost
manufacturing capacity.
Progress in improving the efficiencies in our North American foundries
continued in the year with improvements in both operational and quality
metrics being ahead of plan.
The Division also launched its proprietary continuous improvement programme,
APEX, in the year, setting core principles to drive improvements in safety,
quality and efficiencies supporting several of our Performance Excellence
workstreams.
2024 Financial review
Constant currency £m H1(1) H2 2024 2023(1) Growth(1)
Orders OE 27 25 52 60 -13%
Orders AM 316 295 611 611 -%
Orders Total 343 320 663 671 -1%
Revenue OE 26 35 61 55 9%
Revenue AM 308 319 627 625 1%
Revenue Total 334 354 688 680 1%
Adjusted operating profit(2) 64 65 129 118 9%
Adjusted operating margin(2) 19.3% 18.3% 18.8% 17.4% +140bps
Adjusted operating cash flow(2) 70 87 157 137 15%
Book-to-bill 1.02 0.91 0.96 0.99
1. 2023 and 2024 H1 restated at 2024 average exchange rates except for
operating cash flow.
2. Profit figures before adjusting items. Adjusted operating cash flow
excludes additional pension contributions, exceptional and other adjusting
cash items, and income tax paid. Refer to note 2 of the Audited Results
contained in this press release for further details of alternative performance
measures.
Orders decreased 1% on a constant currency basis to £663m (2023: £671m),
with book-to-bill at 0.96. This reflects strong demand for our core GET
products and dredging solutions offset by normalised demand from the Canadian
oil sands and a reduction in mining attachment orders. Aftermarket continues
to be the largest part of ESCO accounting for 92% of total orders in the year
(2023: 91%). In total, mining end-markets accounted for 70% of orders (2023:
72%) and infrastructure accounted for 26% (2023: 25%).
Revenue on a constant currency basis increased by 1% to £688m (2023: £680m)
driven by growth in mining GET and dredge solutions within the Middle East and
Asia Pacific. Additionally, growth in mining attachment revenues drove an
increase of 9% in original equipment revenue.
Adjusted operating profit increased by 9% to £129m (2023: £118m) on a
constant currency basis, as the Division benefited from Performance Excellence
savings and operational efficiencies.
Adjusted operating margin on a constant currency basis was 18.8% (2023:
17.4%), with the year-on-year improvement of 140bps reflecting incremental
Performance Excellence savings and operational efficiencies, despite a
headwind from increased R&D spend.
Adjusted operating cash flow increased by 15% to £157m (2023: £137m)
reflecting growth in operating profit and a working capital inflow of £3m
(2023: outflow of £4m). Working capital movements include a reduction in
inventory and increase in payables offset by an increase in receivables.
GROUP FINANCIAL REVIEW
Constant currency(1) As reported
Continuing Operations(3) £m 2024 2023 Growth 2023 Growth
Orders OE 532 553 -4% n/a n/a
Orders AM 1,991 1,922 4% n/a n/a
Orders Total 2,523 2,475 2% n/a n/a
Revenue OE 514 583 -12% 607 -15%
Revenue AM 1,992 1,945 2% 2,029 -2%
Revenue Total 2,506 2,528 -1% 2,636 -5%
Adjusted operating profit(2) 472 433 9% 459 3%
Adjusted operating margin(2) 18.8% 17.1% +170bps 17.4% +140bps
Book-to-bill 1.01 0.98 n/a 0.98 n/a
Total Group £m
Adjusted operating cash flow(2) 591 n/a n/a 526 12%
Free operating cash conversion 102% n/a n/a 85% +17 pp
Net debt(4) 535 n/a n/a 690 +155
1. 2023 restated at 2024 average exchange rates.
2. Profit figures before adjusting items. Adjusted operating cash flow
excludes additional pension contributions, exceptional and other adjusting
cash items, and income tax paid.
3. Continuing operations excludes the Oil & Gas Division, which was sold
to Caterpillar Inc. in February 2021 and the Saudi Arabian joint venture,
which was sold to Olayan Financing Company in June 2021.
4. Refer to note 2 of the Audited Results contained in this press release for
further details of alternative performance measures.
Continuing operations orders increased 2% on a constant currency basis,
reflecting continued strength in demand for our solutions. Demand for AM
increased 4%, with growth in hard rock mining and a contribution from pricing.
Towards the end of the year, we saw strengthening in AM orders with Q4 up 10%
year-on-year and 11% sequentially. In OE, we saw an overall 4% contraction in
orders. Demand for OE was driven by greenfield capital expenditure with
momentum building during the second half of the year, while activity in
smaller brownfield and debottlenecking projects at existing mines remain
stable.
Continuing operations revenue decreased 1% on a constant currency basis,
reflecting phasing of large OE shipments partially offset by AM revenues,
which increased 2% on a constant currency basis. On a reported basis, revenues
decreased 5%, impacted by a foreign exchange translation headwind of £108m.
Overall book-to-bill was 1.01.
Continuing operations adjusted operating profit increased by £13m, 3%, to
£472m on a reported basis (2023: £459m). Excluding a £26m foreign currency
translation headwind, the constant currency increase is £39m, 9%. As
explained further in the Divisional reviews, Minerals adjusted operating
profit increased £30m on a constant currency basis to £383m (2023: £353m)
as the Division benefited from incremental Performance Excellence savings and
strong operational execution. ESCO adjusted operating profit increased by
£11m on a constant currency basis to £129m (2023: £118m), as the Division
benefited from Performance Excellence savings and operational efficiencies.
Unallocated costs at £40m have increased by £2m on a constant currency basis
(2023: £38m).
Continuing operations adjusted operating margin of 18.8% is up 170bps versus
last year on a constant currency basis and up 140bps as reported, reflecting
the incremental benefits of Performance Excellence, as well as Minerals
revenue mix moving towards aftermarket.
Continuing operations adjusting items recognised in arriving at operating
profit decreased by £9m to £81m (2023: £90m). Intangibles amortisation
decreased to £21m (2023: £25m). Exceptional items increased by £33m to
£55m (2023: £22m). Within exceptional items, costs of £36m (2023: £29m)
were recognised relating to initiatives across all three pillars of our
Performance Excellence programme - lean processes, capacity optimisation and
functional transformation. Exceptional items in the year also included the
£19m impairment of our Trio brand name following a decision to rebrand
certain products within the Minerals Division and smaller amounts relating to
legacy legal claims and integration costs, offset by the reversal of
previously impaired receivables balances resulting from the Russia operations
wind down (of which £8m was reversed in the prior year). Other adjusting
items of £6m (2023: £43m) are primarily related to movements in the legacy
US asbestos-related provision and associated insurance asset.
Continuing operations statutory operating profit of £391m was £23m
favourable to the prior year due to the increase in reported adjusted
operating profit of £13m as well as a reduction in adjusting items.
Continuing operations net finance costs were £44m (2023: £48m) with a
decrease in finance costs of £1m after a foreign currency translation
tailwind of £1m on US$ denominated debt. The decrease in net costs was
largely due to higher finance income, driven by higher interest rates on
increased cash balances in the year.
Continuing operations adjusted profit before tax was £428m (2023: £411m),
after a foreign currency translation headwind of £25m. The statutory profit
before tax from continuing operations of £347m compares to £321m in 2023
with the increase primarily due to higher adjusted operating profit and a
decrease in adjusting items.
Continuing operations adjusted tax charge for the year of £119m (2023:
£111m) on adjusted profit before tax from continuing operations of £428m
(2023: £411m) represents an adjusted effective tax rate (ETR) of 27.7% (2023:
27.0%). Our ETR is principally driven by the geographical mix of profits
arising in our business and, to a lesser extent, the impact of Group financing
and transfer pricing arrangements.
Continuing operations adjusting items tax credit represents a tax credit of
£87m (2023: £20m) which has been recognised in relation to continuing
operations adjusting items and includes an exceptional tax credit of £69m in
relation to the recognition of a deferred tax asset for net operating losses
in the US, which arose on the disposal of Seaboard International LLC as part
of the Group's divestiture of its Oil & Gas Division in 2021.
Continuing operations profit after tax before adjusting items is £310m (2023:
£300m). The statutory profit after tax for the year from continuing
operations is £315m (2023: £230m).
Discontinued operations statutory loss after tax for the year of £3m (2023:
£1m) related to the finalisation of certain tax indemnities under the sale
and purchase agreement for the Oil & Gas Division, which was disposed of
in 2021.
Statutory profit for the year after tax from total operations is £313m (2023:
£229m), with the increase primarily driven by the exceptional tax credit of
£87m mentioned above.
Adjusted earnings per share from continuing operations increased by 4% to
120.0p (2023: 115.9p) reflecting the increased adjusted profit in the year.
Statutory reported earnings per share from total operations is 121.1p (2023:
88.2p), with the increase driven by improved operating profit and the
adjusting item deferred tax credit. The weighted average number of shares in
issue was 257.8m (2023: 258.4m).
Cash flow and net debt
Adjusted operating cash flow increased by £65m to £591m (2023: £526m)
primarily driven by the increase in adjusted operating profit, coupled with an
improvement in working capital of £36m (2024: inflow of £8m vs 2023: outflow
of £28m). The net working capital inflow reflects an improvement in payables,
including an increase in advance payments of £29m, and inventory, partially
offset by higher receivables. Working capital as a percentage of sales reduced
to 20.7% (2023: 21.3%). Non-recourse invoice discounting facilities, primarily
customers supply chain financing facilities, of £35m (2023: £33m) were
utilised and suppliers chose to utilise supply chain financing facilities of
£34m (2023: £32m). Higher cash outflows from exceptional and other adjusting
items and income tax paid, partially offset by lower additional pension
contributions, resulted in net cash generated from operating activities of
£450m (2023: £394m).
Net capital expenditure decreased by £14m to £69m (2023: £83m) primarily as
a result of completing construction of our new ESCO foundry in China in early
2024. Lease payments decreased by £6m to £25m (2023: £31m) driven by lease
incentive income received in the year.
Free operating cash flow increased by £92m to £484m (2023: £392m) resulting
in free operating cash conversion of 102% (2023: 85%) (refer to note 2 of the
Audited Results contained in this press release). This exceeded our 2024
target of between 90% and 100% and reflected the previously noted improvement
in cash generation, reduced capital expenditure and lower purchases of shares
for employees. We continue to target free operating cash conversion for 2025
of between 90% and 100%.
Free cash flow from total operations was an inflow of £328m (2023: £238m).
In addition to the movements noted above, this was primarily impacted by an
increase in tax payments of £7m and higher net finance costs of £3m,
partially offset by a reduction in additional pension contributions of £9m
primarily due to the strength of the funding position of the UK Main Plan.
Net debt decreased by £155m to £535m (2023: £690m) and includes £127m
(2023: £117m) in respect of IFRS 16 'Leases'. The movement primarily reflects
free cash inflow of £328m, offset by dividends of £100m, exceptional cash
flows of £31m, an increase in lease liabilities of £14m and unfavourable
foreign exchange on translation of £24m. Net debt to EBITDA on a lender
covenant basis reduced to 0.7 times(4) (2023: 1.1 times) compared to a
covenant level of 3.5 times.
As a result of strong cash generation in 2023, the Group reduced its
multi-currency revolving credit facility (RCF) by US$200m to US$600m in
February 2024. In March 2024, the Group exercised the option to extend its RCF
by one year, which will now mature in April 2029. This extended the average
tenor of the Group's debt financing and, coupled with a further year of strong
cash generation, there remains in place more than £1bn of immediately
available liquidity.
Pensions
The total movement in surplus across all the Group's schemes was an increase
of £7m (2023: decrease of £13m), comprising a £3m surplus increase in the
UK Main Scheme and a £4m deficit reduction in all other schemes. The key
drivers of the £7m increase were Company contributions totalling c.£3m
(2023: £13m) plus net actuarial gains of c.£5m (2023: net actuarial losses
of £28m), offset by pension expenses of c.£1m (2023: £nil). For 2024, the
net actuarial gain was driven by a number of factors including movements in
market conditions and experience and demographic assumption updates from the
latest triennial valuation of the UK Main Scheme. The net actuarial gain in
the year resulted in a credit of £5m (2023: charge of £28m) being recognised
in the Consolidated Statement of Comprehensive Income.
Insurance policy assets held for the UK scheme cover c.60% (2023: 60%) of the
UK's total funded obligation, reducing the Group's exposure to actuarial
movements. The latest actuarial funding valuation of the UK Main Plan was
completed in 2024. As the valuation reported a funding surplus, no recovery
plan was required and therefore no future deficit reduction contributions are
currently payable. In addition, the strength of the funding position of the
ESCO defined benefit plans resulted in the Group making no additional pension
cash contributions in 2024 (2023: £9m).
Enquiries:
Investors: Phil Carlisle +44(0)141 308 3617
Media: Sally Jones +44(0)141 308 3666
CDR: Kevin Smith +44 (0)7710 815924
weir@cdrconsultancy.com
Appendix 1 - 2024 continuing operations(3) quarterly order trends
Reported organic growth
Division 2023 Q1 2023 Q2 2023 Q3 2023 Q4 2023 FY 2024 Q1 2024 Q2 2024 Q3 2024 Q4 2024 FY
Original Equipment 20% -12% -10% -15% -6% -9% -15% 19% -7% -3%
Aftermarket 5% 5% 1% 2% 3% 4% -1% 3% 15% 5%
Minerals 9% 0% -2% -3% 0% 0% -5% 8% 9% 3%
Original Equipment 39% 40% 21% 69% 41% -16% -23% -18% 10% -13%
Aftermarket -9% -4% -5% -2% -5% 5% -1% -2% -2% 0%
ESCO -6% 0% -3% 2% -2% 3% -4% -3% -1% -1%
Original Equipment 22% -8% -8% -10% -3% -9% -16% 15% -5% -4%
Aftermarket 0% 2% -1% 1% 0% 4% -1% 2% 10% 4%
Continuing Ops(3) 4% 0% -2% -2% 0% 1% -4% 5% 7% 2%
Book-to-bill 1.04 1.01 0.94 0.94 0.98 1.11 0.97 1.01 0.95 1.01
Quarterly orders(1) £m
Division 2023 Q1 2023 Q2 2023 Q3 2023 Q4 2023 FY 2024 Q1 2024 Q2 2024 Q3 2024 Q4 2024 FY
Original Equipment 127 125 124 117 493 117 106 148 109 480
Aftermarket 313 353 318 327 1,311 325 349 329 377 1,380
Minerals 440 478 442 444 1,804 442 455 477 486 1,860
Original Equipment 14 20 13 13 60 12 15 10 15 52
Aftermarket 157 152 150 152 611 166 150 146 149 611
ESCO 171 172 163 165 671 178 165 156 164 663
Original Equipment 141 145 137 130 553 129 121 158 124 532
Aftermarket 470 505 468 479 1,922 491 499 475 526 1,991
Continuing Ops(3) 611 650 605 609 2,475 620 620 633 650 2,523
Appendix 2 - 2024 order bridges (as reported)
H1 H2 Full Year
Group orders OE AM Total OE AM Total OE AM Total
(£m)
2023 - as reported 301 1,035 1,336 275 974 1,249 576 2,009 2,585
Organic -13% 2% -2% 5% 6% 6% -4% 4% 2%
Structure 0% 0% 0% 0% 0% 0% 0% 0% 0%
Currency -3% -5% -4% -4% -4% -4% -4% -4% -4%
Total -16% -3% -6% 1% 2% 2% -8% 0% -2%
2024 - as reported 253 1,000 1,253 279 991 1,270 532 1,991 2,523
H1 H2 Full Year
Minerals orders (£m) OE AM Total OE AM Total OE AM Total
2023 - as reported 266 714 980 248 667 915 514 1,381 1,895
Organic -12% 1% -2% 6% 9% 9% -3% 5% 3%
Structure 0% 0% 0% 0% 0% 0% 0% 0% 0%
Currency -3% -5% -5% -4% -5% -4% -4% -5% -5%
Total -15% -4% -7% 2% 4% 5% -7% 0% -2%
2024 - as reported 225 682 907 255 698 953 480 1,380 1,860
H1 H2 Full Year
ESCO orders OE AM Total OE AM Total OE AM Total
(£m)
2023 - as reported 35 321 356 27 307 334 62 628 690
Organic -20% 2% 0% -3% -2% -2% -13% 0% -1%
Structure 0% 0% 0% 0% 0% 0% 0% 0% 0%
Currency -2% -3% -3% -3% -3% -3% -3% -3% -3%
Total -22% -1% -3% -6% -5% -5% -16% -3% -4%
2024 - as reported 28 318 346 24 293 317 52 611 663
Appendix 3 - Foreign exchange (FX) rates and continuing operations(3) profit
exposure
2024 average FX rates 2023 average FX rates Percentage of FY 2024 operating profits(2)
US Dollar 1.28 1.24 44%
Australian Dollar 1.94 1.87 23%
Euro 1.18 1.15 7%
Canadian Dollar 1.75 1.68 15%
Chilean Peso 1,205.92 1,044.69 15%
South African Rand 23.42 22.94 4%
Brazilian Real 6.89 6.21 3%
Chinese Yuan 9.20 8.81 1%
Indian Rupee 106.94 102.66 2%
1. 2023 restated at 2024 average exchange rates.
2. Profit figures before adjusting items. Refer to note 2 of the Audited
Results contained in this press release for further details of alternative
performance measures.
3. Continuing operations excludes the Oil & Gas Division, which was sold
to Caterpillar Inc. in February 2021 and the Saudi Arabian joint venture,
which was sold to Olayan Financing Company in June 2021.
This information includes 'forward-looking statements'. All statements other
than statements of historical fact included in this presentation, including,
without limitation, those regarding The Weir Group PLC's ("the Group")
financial position, business strategy, plans (including development plans and
objectives relating to the Group'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 Group 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 Group's present and
future business strategies and the environment in which the Group will operate
in the future. These forward-looking statements speak only as at the date of
this document. The Group 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 Group'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.
AUDITED RESULTS
CONSOLIDATED INCOME STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2024
Year ended 31 December 2024 Year ended 31 December 2023
Adjusted results Adjusting items (note 5) Statutory results Adjusted results Adjusting items Statutory results
(note 5)
Note £m £m £m £m £m £m
Continuing operations
Revenue 3 2,505.6 - 2,505.6 2,636.0 - 2,636.0
Continuing operations
Operating profit before share of results of joint ventures 470.2 (81.1) 389.1 456.3 (90.4) 365.9
Share of results of joint ventures 1.9 - 1.9 2.5 - 2.5
Operating profit 472.1 (81.1) 391.0 458.8 (90.4) 368.4
Finance costs (65.9) - (65.9) (66.4) - (66.4)
Finance income 22.0 - 22.0 18.7 - 18.7
Profit before tax from continuing operations 428.2 (81.1) 347.1 411.1 (90.4) 320.7
Tax (expense) credit 6 (118.6) 86.9 (31.7) (110.9) 20.1 (90.8)
Profit for the year from continuing operations 309.6 5.8 315.4 300.2 (70.3) 229.9
Loss for the year from discontinued operations 7 - (2.9) (2.9) - (1.3) (1.3)
Profit (loss) for the year 309.6 2.9 312.5 300.2 (71.6) 228.6
Attributable to:
Equity holders of the Company 309.3 2.9 312.2 299.5 (71.6) 227.9
Non-controlling interests 0.3 - 0.3 0.7 - 0.7
309.6 2.9 312.5 300.2 (71.6) 228.6
Earnings per share 8
Basic - total operations 121.1p 88.2p
Basic - continuing operations 120.0p 122.2p 115.9p 88.7p
Diluted - total operations 120.3p 87.7p
Diluted - continuing operations 119.2p 121.4p 115.3p 88.2p
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2024
Year ended Year ended
31 December 2024 31 December 2023
£m £m
Profit for the year 312.5 228.6
Other comprehensive income (expense)
Gains (losses) taken to equity on cash flow hedges 0.8 (0.4)
Gain (cost) of hedging taken to equity on fair value hedges 0.5 (0.8)
Exchange losses on translation of foreign operations (48.7) (159.1)
Exchange (losses) gains on net investment hedges (12.2) 27.6
Reclassification adjustments on cash flow hedges (0.1) 0.5
Reclassification adjustments on fair value hedges 0.3 0.1
Tax (charge) credit relating to above items (0.4) 0.1
Items that are or may be reclassified to profit or loss in subsequent periods (59.8) (132.0)
Other comprehensive income (expense) not to be reclassified to profit or loss
in subsequent periods
Remeasurements on defined benefit plans 4.9 (28.2)
Tax (charge) credit relating to above item (1.1) 7.1
Items that will not be reclassified to profit or loss in subsequent periods 3.8 (21.1)
Net other comprehensive expense (56.0) (153.1)
Total net comprehensive income for the year 256.5 75.5
Attributable to:
Equity holders of the Company 256.4 76.1
Non-controlling interests 0.1 (0.6)
256.5 75.5
Total net comprehensive income (expense) for the year attributable to equity
holders of the Company
Continuing operations 259.3 77.4
Discontinued operations (2.9) (1.3)
256.4 76.1
CONSOLIDATED BALANCE SHEET
AT 31 DECEMBER 2024
31 December 2024 31 December 2023
Notes £m £m
ASSETS
Non-current assets
Property, plant & equipment 498.5 490.5
Intangible assets 1,270.3 1,316.0
Investments in joint ventures 12.8 12.2
Deferred tax assets 192.7 111.3
Other receivables 44.3 53.8
Retirement benefit plan assets 14 32.6 30.1
Total non-current assets 2,051.2 2,013.9
Current assets
Inventories 580.1 608.1
Trade & other receivables 546.7 526.2
Derivative financial instruments 15 10.7 7.9
Income tax receivable 39.9 29.4
Cash & short-term deposits 556.4 707.2
Total current assets 1,733.8 1,878.8
Total assets 3,785.0 3,892.7
LIABILITIES
Current liabilities
Interest-bearing loans & borrowings 55.2 286.2
Trade & other payables 618.7 581.3
Derivative financial instruments 15 10.1 6.4
Income tax payable 14.5 1.9
Provisions 12 48.3 47.6
Total current liabilities 746.8 923.4
Non-current liabilities
Interest-bearing loans & borrowings 1,035.8 1,111.1
Other payables - 0.6
Derivative financial instruments 15 - 2.3
Provisions 12 77.7 80.7
Deferred tax liabilities 47.8 46.9
Retirement benefit plan deficits 14 23.3 28.0
Total non-current liabilities 1,184.6 1,269.6
Total liabilities 1,931.4 2,193.0
NET ASSETS 1,853.6 1,699.7
CAPITAL & RESERVES
Share capital 32.5 32.5
Share premium 582.3 582.3
Merger reserve 332.6 332.6
Treasury shares (37.3) (29.0)
Capital redemption reserve 0.5 0.5
Foreign currency translation reserve (299.4) (238.7)
Hedge accounting reserve 2.5 1.4
Retained earnings 1,230.7 1,008.2
Equity attributable to owners of the Company 1,844.4 1,689.8
Non-controlling interests 9.2 9.9
TOTAL EQUITY 1,853.6 1,699.7
The financial statements were approved by the Board of Directors and
authorised for issue on 27 February 2025.
JON STANTON BRIAN PUFFER
Director Director
CONSOLIDATED CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2024
Year ended Year ended
31 December 2024 31 December 2023
Notes £m £m
Total operations
Cash flows from operating activities 16
Adjusted operating cash flow 591.1 525.5
Additional pension contributions paid - (9.3)
Exceptional and other adjusting cash items (30.7) (18.0)
Income tax paid (110.5) (103.9)
Net cash generated from operating activities 449.9 394.3
Cash flows from investing activities
Acquisitions of subsidiaries, net of cash acquired 16 (1.0) (6.9)
Purchases of property, plant & equipment (67.4) (79.1)
Purchases of intangible assets (5.1) (7.6)
Other proceeds from sale of property, plant & equipment and intangible 3.2 4.2
assets
Disposals of discontinued operations, net of cash disposed and disposal costs 7,16 (1.8) (0.4)
Interest received 19.3 15.1
Dividends received from joint ventures - 4.1
Net cash used in investing activities (52.8) (70.6)
Cash flows from financing activities
Proceeds from borrowings 55.6 512.6
Repayments of borrowings (155.3) (627.6)
Lease payments (24.8) (31.0)
Settlement of external debt of subsidiary on acquisition - (0.2)
Settlement of derivative financial instruments (1.7) (0.5)
Interest paid (61.9) (55.0)
Dividends paid to equity holders of the Company 9 (99.8) (95.9)
Dividends paid to non-controlling interests (0.8) (0.9)
Purchase of shares for employee share plans (13.2) (24.0)
Net cash used in financing activities (301.9) (322.5)
Net increase in cash & cash equivalents 95.2 1.2
Cash & cash equivalents at the beginning of the year 447.4 477.5
Foreign currency translation differences (15.7) (31.3)
Cash & cash equivalents at the end of the year 16 526.9 447.4
The cash flows from discontinued operations included above are disclosed
separately in note 7.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2024
Share capital Share premium Merger reserve Treasury shares Capital redemption reserve Foreign currency translation reserve Hedge accounting reserve Retained earnings Attributable to equity holders of the Company Non- controlling interests Total equity
£m £m £m £m £m £m £m £m £m £m £m
At 1 January 2023 32.5 582.3 332.6 (14.3) 0.5 (108.5) 1.9 899.5 1,726.5 11.4 1,737.9
Profit for the year - - - - - - - 227.9 227.9 0.7 228.6
Losses taken to equity on cash flow hedges - - - - - - (0.4) - (0.4) - (0.4)
Cost of hedging taken to equity on fair value hedges - - - - - - (0.8) - (0.8) - (0.8)
Exchange losses on translation of foreign operations - - - - - (157.8) - - (157.8) (1.3) (159.1)
Exchange gains on net investment hedges - - - - - 27.6 - - 27.6 - 27.6
Reclassification adjustments on cash flow hedges - - - - - - 0.5 - 0.5 - 0.5
Reclassification adjustments on fair value hedges - - - - - - 0.1 - 0.1 - 0.1
Remeasurements on defined benefit plans - - - - - - - (28.2) (28.2) - (28.2)
Tax credit relating to above items - - - - - - 0.1 7.1 7.2 - 7.2
Total net comprehensive (expense) income for the year - - - - - (130.2) (0.5) 206.8 76.1 (0.6) 75.5
Cost of share-based payments inclusive of tax credit - - - - - - - 7.1 7.1 - 7.1
Dividends - - - - - - - (95.9) (95.9) - (95.9)
Purchase of shares for employee share plans - - - (24.0) - - - - (24.0) - (24.0)
Dividends paid to non-controlling interests - - - - - - - - - (0.9) (0.9)
Exercise of share-based payments - - - 9.3 - - - (9.3) - - -
At 31 December 2023 32.5 582.3 332.6 (29.0) 0.5 (238.7) 1.4 1,008.2 1,689.8 9.9 1,699.7
Share capital Share premium Merger reserve Treasury shares Capital redemption reserve Foreign currency translation reserve Hedge accounting reserve Retained earnings Attributable to equity holders of the Company Non- controlling interests Total equity
£m £m £m £m £m £m £m £m £m £m £m
At 1 January 2024 32.5 582.3 332.6 (29.0) 0.5 (238.7) 1.4 1,008.2 1,689.8 9.9 1,699.7
Profit for the year - - - - - - - 312.2 312.2 0.3 312.5
Gains taken to equity on cash flow hedges - - - - - - 0.8 - 0.8 - 0.8
Gain of hedging taken to equity on fair value hedges - - - - - - 0.5 - 0.5 - 0.5
Exchange losses on translation of foreign operations - - - - - (48.5) - - (48.5) (0.2) (48.7)
Exchange losses on net investment hedges - - - - - (12.2) - - (12.2) - (12.2)
Reclassification adjustments on cash flow hedges - - - - - - (0.1) - (0.1) - (0.1)
Reclassification adjustments on fair value hedges - - - - - - 0.3 - 0.3 - 0.3
Remeasurements on defined benefit plans - - - - - - - 4.9 4.9 - 4.9
Tax charge relating to above items - - - - - - (0.4) (1.1) (1.5) - (1.5)
Total net comprehensive (expense) income for the year - - - - - (60.7) 1.1 316.0 256.4 0.1 256.5
Cost of share-based payments inclusive of tax credit - - - - - - - 11.2 11.2 - 11.2
Dividends - - - - - - - (99.8) (99.8) - (99.8)
Purchase of shares for employee share plans - - - (13.2) - - - - (13.2) - (13.2)
Dividends paid to non-controlling interests - - - - - - - - - (0.8) (0.8)
Exercise of share-based payments - - - 4.9 - - - (4.9) - - -
At 31 December 2024 32.5 582.3 332.6 (37.3) 0.5 (299.4) 2.5 1,230.7 1,844.4 9.2 1,853.6
1. Accounting policies
Basis of preparation
The audited results for the year ended 31 December 2024 ("2024") have been
prepared in accordance with UK-adopted International Accounting Standards and
with the requirements of the Companies Act 2006 as applicable to those
companies reporting under those standards.
The financial information set out in the audited results does not constitute
the Group's statutory financial statements for the year ended 31 December
2024 within the meaning of section 434 of the Companies Act 2006 and has been
extracted from the full financial statements for the year ended 31 December
2024.
Statutory financial statements for the year ended 31 December 2023 ("2023"),
which received an unqualified audit report, have been delivered to the
Registrar of Companies. The reports of the auditors on the financial
statements for the year ended 31 December 2023 and for the year ended
31 December 2024 were unqualified and did not contain a statement under
either section 498(2) or section 498(3) of the Companies Act 2006. The
financial statements for the period ended 31 December 2024 will be delivered
to the Registrar of Companies and made available to all shareholders in due
course.
These financial statements are presented in Sterling. All values are rounded
to the nearest 0.1 million pounds (£m) except where otherwise indicated.
The financial statements are also prepared on a historic cost basis except
where measured at fair value as outlined in the accounting policies.
Going concern
The Directors have a reasonable expectation that the Group has adequate
resources to continue to operate for a period of at least 12 months from the
date of approval of the financial statements. For this reason, they continue
to adopt the going concern basis of preparing the financial statements. In
forming this view the Directors have reviewed the Group's budget and
sensitivity analysis.
Basis of consolidation
The Consolidated Financial Statements include the results, cash flows and
assets and liabilities of The Weir Group PLC and its subsidiaries, and the
Group's share of results of its joint venture. For consolidation purposes,
subsidiaries and joint ventures prepare financial information for the same
reporting period as the Company using consistent accounting policies.
A subsidiary is an entity controlled, either directly or indirectly, by the
Company, where control is achieved when the Group is exposed, or has rights,
to variable returns from its involvement with the investee and has the ability
to affect those returns through its power over the investee. The results of a
subsidiary acquired during the period are included in the Group's results from
the effective date on which control is transferred to the Group. The results
of a subsidiary sold during the period are included in the Group's results up
to the effective date on which control is transferred out of the Group. All
intra-group transactions, balances, income and expenses are eliminated on
consolidation.
Non-controlling interests represent the portion of profit or loss and net
assets in subsidiaries that are not held by the Group and are presented within
equity in the Consolidated Balance Sheet, separately from the equity
attributable to owners of the Company.
New accounting standards, amendments and interpretations
The accounting policies that follow are consistent with those of the previous
period, with the exception of the following standards, amendments and
interpretations which are effective for the year ended 31 December 2024:
• Classification of Liabilities as Current or Non-current
liabilities with covenants - Amendments to IAS 1;
• Lease Liability in Sale and Leaseback - Amendments to IFRS 16;
and
• Supplier Finance Arrangements - Amendments to IAS 7 and IFRS
7.
The amendments listed above are not considered to have a material impact on
the Consolidated Financial Statements of the Group.
The following new accounting standards and interpretations have been published
but are not mandatory for 31 December 2024:
• IFRS18 Presentation and disclosure in the financial
statements;
• Amendments to IAS 21 - Lack of exchangeability;
• Amendments to IFRS 9 and IFRS 7 - Amendments to the
classification and measurement of financial instruments.
These amendments have not been early adopted by the Group. The impact
assessment is ongoing, however it is expected that IFRS 18 will have a
significant impact on the presentation of the financial statements. The new
accounting standard does not impact the recognition and measurement of the
financial statements, however, it will significantly alter the income
statement and related disclosures. The Group is currently considering the
requirements of the new standard and the implications for the financial
statements. The initial view is that the following areas may be impacted.
• The line items presented in the income statement may change as a
result of revised aggregation and disaggregation of information. This will
also impact the disclosures in related notes.
• The presentation of the income statement including the
allocation of results from our joint venture.
• There will also be significant new disclosures for Management
Performance Measures (MPM) and a breakdown of the nature of expenses for line
items presented in the income statement. This disclosure will be dependent on
the method of disclosure in the income statement.
• For the first annual period of application of IFRS 18 a
reconciliation will be provided between the amounts previously presented under
IAS 1 and the revised presentation under IFRS 18.
• Goodwill will be disaggregated from intangible assets on the
face of the Balance Sheet.
From initial review, the amendments to IAS 21, IFRS 9 and IFRS 7 are not
expected to have a material impact on the Group in the current or future
reporting periods.
Climate change
Climate change is considered to be a key element of our overall sustainability
strategy. As well as considering the impact of climate change across our
business model, the Directors have considered the impact on the financial
statements in accordance with the Task Force on Climate-related Financial
Disclosures (TCFD) recommendations. Climate change is not considered to have a
material impact on the financial reporting judgements and estimates arising
from our considerations. Overall, sustainability is recognised in the market
as a growth driver for Weir and a key part of our investment case. This is
consistent with our assessment that climate change is not expected to have a
detrimental impact on the viability of the Group in the medium-term.
Specifically we note the following:
• The impact of climate change has been included in the
modelling to assess the viability and going concern status of the Group, both
in terms of the preparation of our Strategic Plan, which underpins our
viability statement modelling, and the modelling of our severe, but plausible
downside scenarios;
• Our assessment of the carrying value of goodwill and intangible
assets included consideration of scenario analysis of potential climate change
on our end markets and this did not introduce a set of circumstances that were
considered could reasonably lead to an impairment;
• The impact on the carrying value and useful lives of tangible
assets has been considered and while we continue to invest in projects to
reduce our carbon impact, the impact is not considered to be material on our
existing asset base;
• In May 2021, the Group successfully completed the issuance of
five-year US$800m Sustainability-Linked Notes. The cost of meeting our linked
targets in 2024 has been considered within the above modelling and the impact
is not material; and
• In June 2023, the Group successfully completed the issuance of
five-year £300m Sustainability-Linked Notes. The cost of meeting our linked
targets in 2026 has been considered within the above modelling and the impact
is not material.
Further detail on our science-based targets and performance against them is
included in the Emissions Strategy in the Strategic report section of the
Annual Report.
Prior year restatement
Following the acquisition of Sentiantechnologies AB (SentianAI) during the
year ended 31 December 2023, the Group has completed the review of the opening
balance sheet position acquired. As part of this process, the Group has
identified that a £0.1m reduction is required to purchased software within
intangible assets on the opening balance sheet which was reported in the 2023
Annual Report with a corresponding increase of £0.1m to goodwill.
Use of estimates and judgements
The Group's material accounting policy information is set out below. The
preparation of the Consolidated Financial Statements, in conformity with IFRS,
requires management to make judgements that affect the application of
accounting policies and estimates that impact the reported amounts of assets,
liabilities, income and expense.
Management bases these judgements on a combination of past experience,
professional expert advice and other evidence that is relevant to each
individual circumstance. Actual results may differ from these judgements and
the resulting estimates, which are reviewed on an ongoing basis. Revisions to
accounting estimates are recognised in the year in which the estimate is
revised.
Areas requiring significant judgement in the current year and on a recurring
basis are presented to the Audit Committee.
Critical judgements and estimates
The areas where management considers critical judgements and estimates to be
required, which are areas more likely to be materially adjusted within the
next 12 months due to inherent uncertainty regarding estimates and
assumptions, are those in respect of the following:
Retirement benefits (estimate)
The assumptions underlying the valuation of retirement benefit assets and
liabilities include discount rates, inflation rates and mortality assumptions,
which are based on actuarial advice. Changes in these assumptions could have a
material impact on the measurement of the Group's retirement benefit
obligations.
Provisions (judgement/estimate)
Management judgement is used to determine when a provision is recognised,
taking into account the commercial drivers that gave rise to it, the Group's
previous experience of similar obligations and the progress of any associated
legal proceedings. The calculation of provisions typically involves management
estimates of associated cash flows and discount rates. The key provision,
which currently requires a greater degree of management judgement and estimate
is the US asbestos provision and associated insurance asset, details of which
are included in note 12.
Deferred taxation (judgement/estimate)
The level of current and deferred tax recognised in the financial statements
is dependent on subjective judgements as to the interpretation of complex
international tax regulations and, in some cases, the outcome of decisions by
tax authorities in various jurisdictions around the world, together with the
ability of the Group to utilise tax attributes within the time limits imposed
by the relevant tax legislation. The value of the recognised US deferred tax
asset in relation to US tax attributes is based on expected future US taxable
profits with reference to the Group's ten-year forecast period and assumptions
over the intended use of these tax attributes during this period. The
application of this model and its underlying assumptions may result in future
changes to the deferred tax asset recognised.
Other estimates
Taxation (estimate)
The Group faces a variety of tax risks, which result from operating in a
complex global environment, including the ongoing reform of both international
and domestic tax rules in some of the Group's larger markets and the challenge
to fulfil ongoing tax compliance filing and transfer pricing obligations given
the scale and diversity of the Group's global operations.
The Group makes provision for open tax issues where it is probable that an
exposure will arise including, in a number of jurisdictions transfer pricing
positions which are by nature complex and can take a number of years to
resolve. In all cases, provisions are based on management's interpretation of
tax law in each country, as supported where appropriate by discussion and
analysis undertaken by the Group's external advisers, and reflect the single
best estimate of the likely outcome or the expected value for each liability.
Provisions for uncertain tax positions are included in current tax liabilities
and total £5.1m at 31 December 2024 (2023: £5.4m).
The Group believes it has made adequate provision for such matters, although
it is possible that amounts ultimately paid will be different from the amounts
provided, but not materially within the next 12 months.
Tax disclosures are provided in note 6.
Adjusting items
In order to provide the users of the Consolidated Financial Statements with a
more relevant presentation of the Group's performance, statutory results for
each year have been analysed between:
• adjusted results; and
• the effect of adjusting items.
The principal adjusting items are summarised below. These specific items are
presented on the face of the Consolidated Income Statement, along with the
related adjusting items' taxation, to provide greater clarity and a better
understanding of the impact of these items on the Group's financial
performance. In doing so, it also facilitates greater comparison of the
Group's underlying results with prior years and assessment of trends in
financial performance. This split is consistent with how business performance
is measured internally. Adjusted results and adjusting items are discussed in
more detail in note 2.
Intangibles amortisation
Intangibles amortisation is expensed in line with the other intangible assets
policy, with separate disclosure provided to allow visibility of the impact of
intangible assets recognised via acquisition, which primarily relate to items
that would not normally be capitalised unless identified as part of an
acquisition opening balance sheet. The ongoing costs associated with these
assets are expensed.
Exceptional items
Exceptional items are items of income and expense which, because of the
nature, size and/or infrequency of the events giving rise to them, merit
separate presentation. Exceptional items may include, but are not restricted
to: profits or losses arising on disposal or closure of businesses; the cost
of significant business restructuring; significant impairments of intangible
or tangible assets; adjustments to the fair value of acquisition-related items
such as contingent consideration and inventory; and acquisitions and other
items deemed exceptional due to their significance, size or nature.
Other adjusting items
Other adjusting items are those that do not relate to the Group's current
ongoing trading and, due to their nature, are treated as adjusting items. For
example, these may include, but are not restricted to, movements in the
provision for asbestos-related claims or the associated insurance assets,
which relate to the Flow Control Division that was sold in 2019, but the
provision remains with the Group and is in run-off, or past service costs
related to pension liabilities.
Further analysis of the items included in the column 'Adjusting items' in the
Consolidated Income Statement is provided in note 5.
2. Alternative performance measures
The Consolidated Financial Statements of The Weir Group PLC have been prepared
in accordance with UK-adopted International Accounting Standards and with the
requirements of the Companies Act 2006 as applicable to those companies
reporting under those standards. In measuring our performance, the financial
measures that we use include those that have been derived from our reported
results in order to eliminate factors which we believe distort
period-on-period comparisons. These are considered alternative performance
measures. This information, along with comparable GAAP measurements, is useful
to investors in providing a basis for measuring our operational performance.
Our management uses these financial measures, along with the most directly
comparable GAAP financial measures, in evaluating our performance and value
creation. Alternative performance measures should not be considered in
isolation from, or as a substitute for, financial information in compliance
with GAAP. Alternative performance measures as reported by the Group may not
be comparable with similarly titled amounts reported by other companies.
Below we set out our definitions of alternative performance measures and
provide reconciliations to relevant GAAP measures.
Adjusted results and adjusting items
The Consolidated Income Statement presents Statutory results, which are
provided on a GAAP basis, and Adjusted results (non-GAAP), which are
management's primary area of focus when reviewing the performance of the
business. Adjusting items represent the difference between Statutory results
and Adjusted results and are defined within the accounting policies section
above. The accounting policy for Adjusting items should be read in conjunction
with this note. Details of each adjusting item are provided in note 5. We
consider this presentation to be helpful as it allows greater comparability of
the underlying performance of the business from year to year.
Adjusted EBITDA
EBITDA is operating profit from continuing operations, before exceptional
items, other adjusting items, intangibles amortisation, and excluding
depreciation of owned assets and right-of-use assets. EBITDA is a widely used
measure of a company's profitability of its operations before any effects of
indebtedness, taxes or costs required to maintain its asset base. EBITDA is
used in conjunction with other GAAP and non-GAAP financial measures to assess
our operational performance. A reconciliation of EBITDA to the closest
equivalent GAAP measure, operating profit, is provided.
2024 2023
£m £m
Continuing operations
Operating profit 391.0 368.4
Adjusted for:
Exceptional and other adjusting items (note 5) 60.4 64.9
Adjusting amortisation (note 5) 20.7 25.5
Adjusted operating profit 472.1 458.8
Non-adjusting amortisation 12.0 12.2
Adjusted earnings before interest, tax and amortisation (EBITA) 484.1 471.0
Depreciation of owned property, plant & equipment 45.9 39.9
Depreciation of right-of-use property, plant & equipment 31.9 31.6
Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) 561.9 542.5
Adjusted operating cash flow
Adjusted operating cash flow is the equivalent of net cash generated from
operations before additional pension contributions, exceptional and other
adjusting cash items and income tax paid as shown in the cash flow statement
and associated notes to the financial statements. This is a useful measure to
view or assess the underlying cash generation of the business from its
operating activities. A reconciliation to the GAAP measure 'Net cash generated
from operating activities' is provided in the Consolidated Cash Flow
Statement.
Free operating cash flow and free cash flow
Free operating cash flow (FOCF) is defined as adjusted operating cash flow
amended for net capital expenditure, lease payments, dividends received from
joint ventures and purchase of shares for employee share plans. FOCF provides
a useful measure of the cash flows generated directly from the operational
activities after taking into account other cash flows closely associated with
maintaining daily operations.
Free cash flow (FCF) is defined as FOCF further adjusted for net interest,
income taxes, settlement of derivative financial instruments, additional
pension contributions and non-controlling interest dividends. FCF reflects an
additional way of viewing our available funds that we believe is useful to
investors as it represents cash flows that could be used for repayment of
debt, dividends, exceptional and other adjusting items, or to fund our
strategic initiatives, including acquisitions, if any.
The reconciliation of adjusted operating cash flows to FOCF and subsequently
FCF is as follows.
2024 2023
£m £m
Adjusted operating cash flow 591.1 525.5
Net capital expenditure from purchase & disposal of property, plant & (69.3) (82.5)
equipment and intangibles
Lease payments (24.8) (31.0)
Dividends received from joint ventures - 4.1
Purchase of shares for employee share plans (13.2) (24.0)
Free operating cash flow (FOCF) 483.8 392.1
Net interest paid (42.6) (39.9)
Income tax paid (110.5) (103.9)
Settlement of derivative financial instruments (1.7) (0.5)
Additional pension contributions paid - (9.3)
Dividends paid to non-controlling interests (0.8) (0.9)
Free cash flow (FCF) 328.2 237.6
Free operating cash conversion
Free operating cash conversion is a non-GAAP key performance measure defined
as free operating cash flow divided by adjusted operating profit on a total
Group basis. The measure is used by management to monitor the Group's ability
to generate cash relative to operating profits.
2024 2023
£m £m
Adjusted operating profit 472.1 458.8
Free operating cash flow 483.8 392.1
Free operating cash conversion % 102% 85%
Working capital as a percentage of sales
Working capital as a percentage of sales is calculated based on working
capital as reflected below, divided by revenue, as included in the
Consolidated Income Statement. It is a measure used by management to monitor
how efficiently the Group is managing its investment in working capital
relative to revenue growth.
2024 2023
£m £m
Working capital as included in the Consolidated Balance Sheet
Other receivables 44.3 53.8
Inventories 580.1 608.1
Trade & other receivables 546.7 526.2
Derivative financial instruments (note 15) 0.6 (0.8)
Trade & other payables (618.7) (581.3)
Other payables - (0.6)
553.0 605.4
Adjusted for:
Insurance contract assets (46.8) (57.5)
Interest accruals 12.6 12.3
Deferred consideration 0.6 1.6
(33.6) (43.6)
Working capital 519.4 561.8
Revenue 2,505.6 2,636.0
Working capital as a percentage of sales 20.7% 21.3%
Net debt
Net debt is a widely used liquidity metric calculated by taking cash and cash
equivalents less total current and non-current debt. A reconciliation of net
debt to cash and short-term deposits and interest-bearing loans and borrowings
is provided in note 16. It is a useful measure used by management and
investors when monitoring the capital management of the Group. Net debt,
excluding lease liabilities and converted at the exchange rates used in the
preparation of the Consolidated Income Statement, is also the basis for
covenant reporting.
Return on Capital Employed (ROCE)
ROCE is a key metric which is used to analyse the Group's profitability and
capital efficiency. ROCE is calculated as Adjusted Earnings Before Interest
& Tax (Adjusted EBIT) from continuing operations divided by the average
capital employed. Adjusted EBIT represents the Group's statutory operating
profit adjusted for exceptional and other adjusting items. Capital employed
represents the Group's net assets adjusted for third party net debt, Trust
Owned Life Insurance policy investments and the IAS 19 pension asset net of
deferred tax.
2024 2023
£m £m
Continuing operations
Operating profit 391.0 368.4
Adjusted for:
Exceptional and other adjusting items (note 5) 60.4 64.9
Adjusted earnings before interest and tax (Adjusted EBIT) 451.4 433.3
Net assets 1,853.6 1,699.7
Adjusted for:
Third party net debt (note 16) 534.6 690.1
Trust Owned Life Insurance policy investments (42.7) (42.6)
IAS 19 Pension asset (note 14) (9.3) (2.1)
Deferred tax on pension assets 2.6 0.9
Capital employed 2,338.8 2,346.0
Average capital employed 2,342.4 2,412.1
ROCE 19.3% 18.0%
3. Segment information
Continuing operations includes two operating Divisions: Minerals and ESCO.
These two Divisions are organised and managed separately based on the key
markets served and each is treated as an operating segment and a reportable
segment under IFRS 8 'Operating segments'. The operating and reportable
segments were determined based on the reports reviewed by the Chief Executive
Officer, which are used to make operational decisions.
The Minerals segment is a global leader in engineering, manufacturing and
service processing technology used in abrasive, high-wear mining applications.
Its differentiated technology is also used in infrastructure and general
industrial markets. The ESCO segment is a global leader in the provision of
Ground Engaging Tools (GET) for large mining machines. It operates
predominantly in mining and infrastructure markets where its highly engineered
technology improves productivity through extended wear life, increased safety
and reduced energy consumption.
Following the acquisition of Sentiantechnologies AB (SentianAI) on 21 November
2023, this entity has been included in the Minerals segment. SentianAI is a
developer of innovative cloud-based Artificial Intelligence solutions to the
mining industry.
The Chief Executive Officer assesses the performance of the operating segments
based on operating profit from continuing operations before exceptional and
other adjusting items ('segment result'). Finance income and expenditure and
associated interest-bearing liabilities and financing derivative financial
instruments are not allocated to segments as all treasury activity is managed
centrally by the Group Treasury function. The amounts provided to the Chief
Executive Officer with respect to assets and liabilities are measured in a
manner consistent with that of the financial statements. The assets are
allocated based on the operations of the segment and the physical location of
the asset. The liabilities are allocated based on the operations of the
segment.
Transfer prices between business segments are set on an arm's length basis, in
a manner similar to transactions with third parties.
The segment information for the reportable segments for 2024 and 2023 is
disclosed below. Information related to discontinued operations is included in
note 7.
Minerals ESCO Total continuing operations
2024 2023 2024 2023 2024 2023
£m £m £m £m £m £m
Revenue
Sales to external customers 1,817.5 1,937.4 688.1 698.6 2,505.6 2,636.0
Inter-segment sales 0.1 0.1 1.5 2.5 1.6 2.6
Segment revenue 1,817.6 1,937.5 689.6 701.1 2,507.2 2,638.6
Eliminations (1.6) (2.6)
2,505.6 2,636.0
Sales to external customers - 2023 at 2024 average exchange rates
Sales to external customers 1,817.5 1,848.1 688.1 679.5 2,505.6 2,527.6
Segment result
Segment result before share of results of joint ventures 382.8 375.7 127.4 119.4 510.2 495.1
Share of results of joint ventures - - 1.9 2.5 1.9 2.5
Segment result 382.8 375.7 129.3 121.9 512.1 497.6
Corporate expenses (40.0) (38.8)
Adjusted operating profit 472.1 458.8
Adjusting items (81.1) (90.4)
Net finance costs (43.9) (47.7)
Profit before tax from continuing operations 347.1 320.7
Segment result - 2023 at 2024 average exchange rates
Segment result before share of results of joint ventures 382.8 352.5 127.4 115.9 510.2 468.4
Share of results of joint ventures - - 1.9 2.5 1.9 2.5
Segment result 382.8 352.5 129.3 118.4 512.1 470.9
Corporate expenses (40.0) (37.9)
Adjusted operating profit 472.1 433.0
Revenues from any single external customer do not exceed 10% of Group revenue.
Minerals ESCO Total continuing operations
2024 2023 2024 2023 2024 2023
£m £m £m £m £m £m
Timing of revenue recognition
At a point in time 1,724.1 1,825.2 669.0 685.3 2,393.1 2,510.5
Over time 93.5 112.3 20.6 15.8 114.1 128.1
Segment revenue 1,817.6 1,937.5 689.6 701.1 2,507.2 2,638.6
Eliminations (1.6) (2.6)
2,505.6 2,636.0
Geographical information
Geographical information in respect of revenue for 2024 and 2023 is disclosed
below. Revenues are allocated based on the location to which the product is
shipped.
2024 2023
£m £m
Revenue by geography
UK 17.7 23.9
US 402.5 412.4
Canada 386.5 420.8
Asia Pacific 306.3 347.4
Australasia 437.5 412.4
South America 535.1 576.3
Middle East & Africa 312.8 317.4
Europe 107.2 125.4
Revenue 2,505.6 2,636.0
2024 2023
£m £m
An analysis of the Group's revenue is as follows:
Original equipment 492.3 552.3
Aftermarket parts 1,797.7 1,864.3
Sales of goods 2,290.0 2,416.6
Provision of services - aftermarket 190.6 160.7
Construction contracts - original equipment 21.1 54.3
Subscription services 3.9 4.4
Revenue 2,505.6 2,636.0
Minerals ESCO Total Group
2024 2023 2024 2023 2024 2023
£m £m £m £m £m £m
Assets & liabilities
Intangible assets 532.6 567.9 737.7 748.0 1,270.3 1,315.9
Property, plant & equipment 309.8 312.3 179.9 168.4 489.7 480.7
Working capital assets 854.0 844.9 273.6 288.1 1,127.6 1,133.0
1,696.4 1,725.1 1,191.2 1,204.5 2,887.6 2,929.6
Investments in joint ventures - - 12.8 12.2 12.8 12.2
Segment assets 1,696.4 1,725.1 1,204.0 1,216.7 2,900.4 2,941.8
Corporate assets 884.6 950.9
Total assets 3,785.0 3,892.7
Working capital liabilities 507.0 476.6 126.8 129.9 633.8 606.5
Segment liabilities 507.0 476.6 126.8 129.9 633.8 606.5
Corporate liabilities 1,297.6 1,586.5
Total liabilities 1,931.4 2,193.0
Other segment information - total Group
Segment additions to non-current assets 78.5 79.7 33.1 46.6 111.6 126.3
Corporate additions to non-current assets 0.2 1.3
Total additions to non-current assets 111.8 127.6
Other segment information - total Group
Segment depreciation & amortisation 69.9 65.0 39.1 42.2 109.0 107.2
Segment impairment of property, plant & equipment 7.2 1.4 - - 7.2 1.4
Segment impairment of intangible assets 18.6 - - - 18.6 -
Corporate depreciation & amortisation 1.5 2.0
Total depreciation, amortisation & impairment 136.3 110.6
Corporate assets primarily comprise cash and short-term deposits,
asbestos-related insurance asset, Trust Owned Life Insurance policy
investments, derivative financial instruments, income tax receivable, deferred
tax assets and elimination of intercompany assets as well as those assets
which are used for general head office purposes. Corporate liabilities
primarily comprise interest-bearing loans and borrowings, and related interest
accruals, derivative financial instruments, income tax payable, provisions,
deferred tax liabilities, elimination of intercompany liabilities and
retirement benefit deficits as well as liabilities relating to general head
office activities. Segment additions to non-current assets include
right-of-use assets.
Geographical information
Geographical information in respect of non-current assets for 2024 and 2023 is
disclosed below. Assets are allocated based on the location of the assets and
operations. Non-current assets consist of property, plant & equipment,
intangible assets and investments in joint ventures.
2024 2023
£m £m
Non-current assets by geography
UK 299.4 308.8
US 697.9 707.6
Canada 155.5 168.8
Asia Pacific 204.2 195.1
Australasia 198.2 201.8
South America 69.5 81.4
Middle East & Africa 103.5 97.6
Europe 53.4 57.6
Non-current assets 1,781.6 1,818.7
4. Revenue & expenses
The following disclosures are given in relation to continuing operations.
Year ended 31 December 2024 Year ended 31 December 2023
Adjusted results Adjusting items Statutory results Adjusted results Adjusting items Statutory results
£m £m £m £m £m £m
A reconciliation of revenue to operating profit is as follows:
Revenue 2,505.6 - 2,505.6 2,636.0 - 2,636.0
Cost of sales (1,485.2) (12.4) (1,497.6) (1,641.1) (1.6) (1,642.7)
Gross profit 1,020.4 (12.4) 1,008.0 994.9 (1.6) 993.3
Other operating income 7.4 - 7.4 5.9 - 5.9
Selling & distribution costs (292.5) (1.0) (293.5) (291.4) (2.4) (293.8)
Administrative expenses (265.1) (67.7) (332.8) (253.1) (86.4) (339.5)
Share of results of joint ventures 1.9 - 1.9 2.5 - 2.5
Operating profit 472.1 (81.1) 391.0 458.8 (90.4) 368.4
Details of adjusting items are included in note 5.
5. Adjusting items
2024 2023
£m £m
Recognised in arriving at operating profit from continuing operations
Intangibles amortisation (20.7) (25.5)
Exceptional items
Acquisition and integration related costs (0.1) (0.7)
Russian operations wind down 0.3 7.7
Performance Excellence programme (35.7) (28.8)
Impairment of intangibles (18.6) -
Legal claims (0.5) -
Other restructuring and rationalisation activities - 0.1
(54.6) (21.7)
Other adjusting items
Asbestos-related provision (5.8) (43.2)
Total adjusting items (81.1) (90.4)
Recognised in arriving at operating loss from discontinued operations
Exceptional items
Finalisation of Oil & Gas related tax assessment (2.9) (1.3)
Total adjusting items (note 7) (2.9) (1.3)
Continuing operations
Intangibles amortisation
Intangibles amortisation of £20.7m (2023: £25.5m) relates to acquisition
related assets.
Exceptional items
Exceptional items in the year include £0.1m of acquisition and integration
related costs (2023: £0.7m). These costs were cash settled during the year.
Exceptional items in the year include a charge of £35.7m (2023: £28.8m) in
relation to the Group's ongoing Performance Excellence programme. This
three-year programme aims to transform the way we work with more agile and
efficient business processes, focused on customer and service-delivery. The
programme, as outlined in the Chief Executive Officer's Strategic report,
includes capacity optimisation, lean processes and functional transformation
pillars. Costs of £20.5m have been recognised under the functional
transformation pillar as costs associated with establishing Weir Business
Services. Also within Performance Excellence, £15.2m has been recognised
under the capacity optimisation and lean processes pillars for costs
associated with the consolidation and optimisation of Minerals manufacturing
facilities, service centres and distribution footprints together with
simplification and automation of our product design and configuration. This
has resulted in an exceptional cash outflow in the year, in respect of the
Performance Excellence programme, of £27.9m.
During the year, an exceptional credit of £0.3m (2023: £7.7m) has been
recognised in relation to previously impaired receivables balances relating to
the wind down of Russia operations in 2022. The prior year exceptional credit
related to previously impaired receivables and inventory balances from the
wind down of Russia operations.
A decision was taken in the year to rebrand certain products within the
Minerals Division and this has resulted in the write down of the Trio brand
name to nil. An exceptional impairment loss of £18.6m has been recognised in
the year .
Also included within exceptional items is £0.5m relating to legacy legal
claims (2023: £nil).
Other adjusting items
A charge of £5.8m (2023: £43.2m) has been recorded primarily in respect of
movements in the US asbestos-related liability and associated insurance asset
that relate to legacy products sold by a US-based subsidiary of the Group.
Further details of this are included in note 12.
Adjusting items tax credit
The adjusting items tax credit of £86.9m (2023: £20.1m) is explained in note
6.
Discontinued operations
Exceptional items
A charge of £2.9m has been recognised in the year in relation to the
finalisation of certain tax indemnities under the sale and purchase agreement
for the Oil & Gas Division, which was disposed of in 2021 (note 7).
6. Income tax expense
2024 2023
£m £m
Continuing Group - UK 1.6 (4.5)
Continuing Group - Overseas (33.3) (86.3)
Income tax expense in the Consolidated Income Statement for continuing (31.7) (90.8)
operations
The total income tax expense is disclosed in the Consolidated Income Statement
as follows.
2024 2023
£m £m
Tax (expense) credit - adjusted results (118.6) (110.9)
- adjusting items 86.9 20.1
Total income tax expense in the Consolidated Income Statement (31.7) (90.8)
The tax credit of £86.9m (2023: £20.1m) which has been recognised in
adjusting items includes £4.2m (2023: £5.6m) in respect of adjusting
intangibles amortisation and impairment, and a credit of £1.3m (2023:
£10.1m) which primarily relates to the US asbestos-related provision. The
remaining £81.4m (2023: £4.4m) relates to exceptional and other adjusting
items and includes a credit of £68.5m relating to the recognition of US
deferred tax assets that were previously unrecognised and which relate to the
disposal of Seaboard International LLC as part of the Group's divestiture of
its Oil & Gas Division in 2021.
The income tax expense included in the Continuing Group's share of results of
joint ventures is as follows.
2024 2023
£m £m
Joint ventures (0.5) (0.6)
7. Discontinued operations
In the year ended 31 December 2024, a charge of £2.9m (2023: £1.3m) has been
recognised in relation to the finalisation of certain tax indemnities under
the sale and purchase agreement for the Oil & Gas Division, which was
disposed of in 2021. Total current year investing cash outflows from
discontinued operations related to the charge in the period are £1.8m (2023:
£0.4m).
For full disclosure of the disposal of the Oil & Gas Division refer to
note 8 of the Group's 2021 Annual Report and Financial Statements.
Loss per share
Loss per share from discontinued operations were as follows.
2024 2023
pence pence
Basic (1.1) (0.5)
Diluted (1.1) (0.5)
The loss per share figures were derived by dividing the net loss attributable
to equity holders of the Company from discontinued operations by the weighted
average number of ordinary shares, for both basic and diluted amounts, shown
in note 8.
8. Earnings per share
Basic earnings per share amounts are calculated by dividing net profit for the
year attributable to equity holders of the Company by the weighted average
number of ordinary shares in issue after deducting the own shares held by
employee share ownership trusts and treasury shares. Diluted earnings per
share is calculated by dividing the net profit attributable to equity holders
of the Company by the weighted average number of ordinary shares outstanding
during the year, adjusted for the effect of dilutive share awards.
The following reflects the earnings used in the calculation of earnings per
share.
2024 2023
£m £m
Profit attributable to equity holders of the Company
Total operations(1) 312.2 227.9
Continuing operations(1) 315.1 229.2
Continuing operations before adjusting items(1) 309.3 299.5
( )
The following reflects the share numbers used in the calculation of earnings
per share, and the difference between the weighted average share capital for
the purposes of the basic and the diluted earnings per share calculations.
( )
2024 2023
Shares Shares
million million
Weighted average number of ordinary shares for basic earnings per share 257.8 258.4
Effect of dilution: employee share awards 1.7 1.4
Adjusted weighted average number of ordinary shares for diluted earnings per 259.5 259.8
share
The profit attributable to equity holders of the Company used in the
calculation of both basic and diluted earnings per share from continuing
operations before adjusting items is calculated as follows.
2024 2023
£m £m
Net profit attributable to equity holders from continuing operations(1) 315.1 229.2
Adjusting items net of tax (5.8) 70.3
Net profit attributable to equity holders from continuing operations before 309.3 299.5
adjusting items
2024 2023
pence pence
Basic earnings per share
Total operations(1) 121.1 88.2
Continuing operations(1) 122.2 88.7
Continuing operations before adjusting items(1) 120.0 115.9
Diluted earnings per share
Total operations(1) 120.3 87.7
Continuing operations(1) 121.4 88.2
Continuing operations before adjusting items(1) 119.2 115.3
(1. Adjusted for a profit of £0.3m (2023: £0.7m) in respect of
non-controlling interests for total operations.)
There have been 20,768 share awards (2023: nil) vested between the reporting
date and the date of signing of these financial statements. They were settled
out of existing shares held in trust.
Loss per share from discontinued operations is disclosed in note 7.
9. Dividends paid & proposed
2024 2023
£m £m
Declared & paid during the year
Equity dividends on ordinary shares
Final dividend for 2023: 20.8p (2022: 19.3p) 53.7 49.9
Interim dividend for 2024: 17.9p (2023: 17.8p) 46.1 46.0
99.8 95.9
Proposed for approval by Shareholders at the Annual General Meeting
Final dividend for 2024: 22.1p (2023: 20.8p) 56.9 53.6
The current year dividend is in line with the capital allocation policy
announced in our 2020 Annual Report and Financial Statements, under which the
Group intends to distribute 33% of adjusted earnings by way of dividend. As a
result, dividend cover in 2024 is 3.0 times.
The proposed dividend is based on the number of shares in issue, excluding
treasury shares held, at the date that the financial statements were approved
and authorised for issue. The final dividend may differ due to increases or
decreases in the number of shares in issue between the date of approval of the
Annual Report and Financial Statements and the record date for the final
dividend.
10. Property, plant & equipment and intangible assets
2024 2023
£m £m
Additions of property, plant & equipment and intangible assets
- owned land & buildings 5.1 3.1
- owned plant & equipment 66.9 83.6
- right-of-use land & buildings 28.8 25.8
- right-of-use plant & equipment 5.9 7.5
- intangible assets 5.1 7.6
111.8 127.6
The above additions relate to the normal course of business and do not include
any additions made by way of business combinations.
11. Business combinations
Prior year business combinations
Sentiantechnologies AB
On 21 November 2023, the Group completed the acquisition of 100% of the voting
rights of Sentiantechnologies AB (SentianAI) for an enterprise value of
SEK87.3m (£6.7m). SentianAI is a Swedish-based developer of innovative
cloud-based Artificial Intelligence (AI) solutions for the mining industry.
The acquisition has joined the Minerals Division and SentianAI's technology
will integrate with Minerals' existing product lines, and expand the
Division's digital capabilities. Initial consideration of £6.1m was paid on
completion, with a further deferred consideration of £0.6m recognised,
payable 15 months after the date of acquisition.
The provisional fair values of the opening balance sheet acquired were
finalised in November 2024, following a review over a 12 month period since
the date of acquisition as permitted by IFRS 3 'Business combinations'. A
£0.1m adjustment was made to intangible assets with a reallocation between
purchased software and goodwill. The final acquisition balance sheet consisted
of intangible assets £0.7m, trade & other receivables £0.2m, cash &
cash equivalents £0.2m, trade & other payables £0.2m and external debt
£0.2m, with resulting goodwill arising on consolidation of £6.0m.
Carriere Industrial Supply Limited
On 8 April 2022, the Group completed the acquisition of 100% of the voting
rights of Carriere Industrial Supply Limited (CIS) for an enterprise value of
CAD$32.5m (£20.2m). Initial consideration of £16.2m was paid on completion,
with a further deferred consideration of £2.5m recognised reflecting
indemnification and working capital hold backs to be paid in instalments. The
Group settled the final tranche of this deferred consideration during 2024.
Contingent consideration
SentianAI
Included in the sale and purchase agreement of SentianAI, a maximum of an
additional SEK23.7m (£1.7m) is payable by the Group contingent on SentianAI
exceeding specific revenue and EBITDA margin targets over the next two years
and meeting non-financial targets by the end of 2026. The entry point for any
contingent payment would require significant growth in terms of revenue and
EBITDA margin by 2026. While the Group expects SentianAI to grow as it
leverages the benefits of being partnered with Minerals, and the opportunities
within ESCO, the entry targets are considered challenging. At present, the
probability of SentianAI exceeding the revenue and EBITDA margin targets in
order to trigger a contingent payment is considered uncertain, in part due to
the relative infancy of the business. As a result, no contingent consideration
has been recorded at the balance sheet date in both the current and prior
periods. This will be reassessed in future periods as the business develops.
Motion Metrics
The Group completed the acquisition of 100% of the voting rights of Motion
Metrics on 30 November 2021. As part of the purchase agreement a maximum of an
additional CAD$100.0m (£55.5m) was payable by the Group contingent on Motion
Metrics exceeding specific revenue and EBITDA targets over the first three
years following acquisition. The required targets were not met and, as a
result, no additional consideration has been paid.
12. Provisions
Warranties & contract claims Asbestos-related Employee-related Exceptional items Other Total
£m £m £m £m £m £m
At 1 January 2024 9.6 78.7 12.1 15.7 12.2 128.3
Additions 8.2 4.1 18.0 30.6 2.8 63.7
Utilised (4.9) (11.2) (13.7) (28.4) (3.2) (61.4)
Unutilised (1.2) (1.3) - (1.4) - (3.9)
Exchange adjustment (0.4) 1.3 (1.1) (0.5) - (0.7)
At 31 December 2024 11.3 71.6 15.3 16.0 11.8 126.0
Current 2024 11.3 9.8 9.4 16.0 1.8 48.3
Non-current 2024 - 61.8 5.9 - 10.0 77.7
At 31 December 2024 11.3 71.6 15.3 16.0 11.8 126.0
Current 2023 9.6 11.2 8.4 15.7 2.7 47.6
Non-current 2023 - 67.5 3.7 - 9.5 80.7
At 31 December 2023 9.6 78.7 12.1 15.7 12.2 128.3
The impact of discounting is only material for the asbestos-related category
of provision, with higher discount rates at 31 December 2024, resulting in a
£1.0m reduction in the provision, which is reflected as unutilised above.
Warranties & contract claims
Provision has been made in respect of actual warranty claims on goods sold and
services provided, and allowance has been made for potential warranty claims
based on past experience for goods and services sold with a warranty
guarantee. At 31 December 2024, the warranties portion of the provision
totalled £8.6m (2023: £7.2m). At 31 December 2024, all of these costs relate
to claims that fall due within one year of the balance sheet date.
Provision has been made in respect of sales contracts entered into for the
sale of goods in the normal course of business where the unavoidable costs of
meeting the obligations under the contracts exceed the economic benefits
expected to be received from the contracts and before allowing for future
expected aftermarket revenue streams. Provision is made immediately when it
becomes apparent that expected costs will exceed the expected benefits of the
contract. At 31 December 2024, the contract claims element, which includes
onerous provision, was £2.7m (2023: £2.4m), all of which is expected to be
incurred within one year of the balance sheet date.
Asbestos-related claims
2024 2023
£m £m
US asbestos-related provision - pre-1981 date of first exposure 61.3 67.4
US asbestos-related provision - post-1981 date of first exposure 8.6 8.8
US asbestos-related provision - total 69.9 76.2
UK asbestos-related provision 1.7 2.5
Total asbestos-related provision 71.6 78.7
US asbestos-related provision
A US-based subsidiary of the Group is co-defendant in lawsuits pending in the
US in which plaintiffs are claiming damages arising from alleged exposure to
products previously manufactured that contained asbestos. The dates of alleged
exposure currently range from the 1950s to the 1990s.
The Group has historically held comprehensive insurance cover for cases of
this nature and its subsidiary continues to do so for claims with a date of
first exposure (dofe) pre-1981. The expiration of one of the Group's insurance
policies in 2019 resulted in no further insurance cover for claims with a
post-1981 dofe. All claims are directly administered by National Coordinating
Counsel on behalf of the insurers who also meet associated defence costs. The
insurers, their legal advisers and in-house counsel agree and execute the
defence strategy between them.
A summary of the US subsidiary's asbestos-related claim activity is shown in
the table below.
2024 2023
Number of open claims Number Number
Opening 1,788 1,716
New 828 664
Dismissed (335) (362)
Settled (228) (230)
Closing 2,053 1,788
A review of the US subsidiary's expected liability for US asbestos-related
diseases and the adequacy of the insurance policies to meet future settlement
and defence costs was completed in conjunction with external advisers in 2023
as part of a planned triennial actuarial review. This review was based on an
industry standard epidemiological decay model, and the subsidiary's claims
settlement history. Consistent with recent claims experience, the 2023 review
reflected a higher level of claims, particularly relating to the 1970s and
1980s.
The actuarial model incorporates claims, with a dofe pre- and post-1981,
primarily relating to Lung Cancer and Mesothelioma and includes estimates
relating to:
• the number of future claims received through to 2064;
• settlement rates by disease type;
• mean settlement values by disease type;
• ratio of defence costs to indemnity value; and
• the profile of associated cash flows through to 2068.
The actuarial model in 2023 provided a range of potential liability based on
levels of probability from 10% to 90%, which, on an undiscounted basis,
equates to £89m-£195m. The mean actuarial estimate of £142m represents the
expected undiscounted value over the range of reasonably possible outcomes.
The provision in the financial statements is based on the mean actuarial
estimate, which is then adjusted each year to reflect expected settlements in
the model, discounting and restricting the timescale over which a liability
can be reliably measured to ten years plus cash flows over a further six
years.
2024 2023
Period of future claims provided 10 Years 10 Years
Discount rate 5.3% 4.7%
The period over which the provision can be reliably estimated is judged to be
ten years, plus cash flows for a further six years, due to the inherent
uncertainty, resulting from the changing nature of the US litigation
environment detailed below, and cognisant of the broad range of probability
levels included within the actuarial model. While claims may extend past ten
years and may result in a further outflow of economic benefits, the Directors
do not believe any obligation that may arise beyond ten years can be reliably
measured at this time. The effect of extending the claims period by a further
ten years is included in the sensitivities below. The discount rate is set
based on the corporate bond yield available at the balance sheet date
denominated in the same currency, and with a term broadly consistent to that
of the liabilities being provided for, with sensitivities to the discount rate
also included below.
In 2023, confirmation was also received from external advisers of the
insurance asset available, which includes the estimated defence costs that
would be met by the insurer. An update to the insurance asset is obtained
annually and totals £4.1m at 31 December 2024 (2023: £14.9m). Based on the
profile of the claims in the actuarial model, external advisers expect the
insurance cover and associated limits currently in place to become fully
exhausted in the first half of 2025. No cash flows to or from the US
subsidiary, related to claims with an exposure date pre-1981, are expected
until the exhaustion of the insurance asset. Claims with an exposure date
post-1981 are estimated to incur cash outflows of less than £0.8m per annum
and are not insured currently or in the future.
The table below represents the Directors' best estimate of the future
liability and corresponding insurance asset.
2024 2023
US asbestos-related provision £m £m
Gross provision 96.8 101.5
Effect of discounting (26.9) (25.3)
Discounted US asbestos-related provision 69.9 76.2
Insurance asset 4.1 14.9
Net US asbestos-related liability 65.8 61.3
( )
The net provision and insurance asset are presented in the financial
statements as follows.
( )
2024 2023
£m £m
Provisions - current 9.3 10.3
Provisions - non-current 60.6 65.9
Trade & other receivables 4.1 9.5
Non-current other receivables - 5.4
There remains inherent uncertainty associated with estimating future costs in
respect of asbestos-related diseases. Actuarial estimates of future indemnity
and defence costs associated with asbestos-related diseases are subject to
significantly greater uncertainty than actuarial estimates for other types of
exposures. This uncertainty results from factors that are unique to the
asbestos claims litigation and settlement process including but not limited
to:
• the possibility of future state or federal legislation
applying to claims for asbestos-related diseases;
• the ability of the plaintiff's bar to develop and sustain new
legal theory and/or develop new populations of claimants;
• changes in focus of the plaintiff's bar;
• changes in defence strategy; and
• changes in the financial condition of other co-defendants in
suits naming the US subsidiary.
As a result, there can be no guarantee that the assumptions used to estimate
the provision will result in an accurate prediction of the actual costs that
may be incurred.
Since the previous triennial update completed in 2023, the US subsidiary has
experienced a higher number of claims received than modelled across both
disease types. Historic settlement rates are lower than modelled. Settlements
largely occur within four years of a claim being received. Average settlement
values have been lower than modelled in 2024 for both Mesothelioma and Lung
Cancer cases. .
As noted above, there are a number of uncertain factors involved in the
estimation of the provision and variations in case numbers and settlements are
to be expected from period-to-period. The trends witnessed in our recent
claims experience have been reflected in the 2023 triennial actuarial review
and provided the basis for the provision recognised at 31 December 2024.
Uncertainty regarding the timing and extent of variations year to year and
whether they are short or long-term in nature, mean it is not considered
possible to provide reasonably probable scenarios. The impact on the provision
of incremental changes in key assumptions is provided below for guidance.
2024
Estimated impact on the discounted US asbestos-related provision of: £m
Increasing the number of projected future settled claims by 20% 13.1
Increasing the estimated settlement value by 10% 6.6
Increasing the basis of provision by ten years 8.3
Decreasing the discount rate by 50bps 2.0
Application of these sensitivities, on an individual basis, would not lead to
a material change in the provision.
The Group's US subsidiary has been effective in managing the asbestos
litigation, in part, because it has access to historical project documents and
other business records going back more than 50 years, allowing it to defend
itself by determining if legacy products were present at the location of the
alleged asbestos exposure and, if so, the timing and extent of their presence.
In addition, the US subsidiary has consistently and vigorously defended claims
that are without merit.
UK asbestos-related provision
In the UK, there are outstanding asbestos-related claims that are not the
subject of insurance cover. The extent of the UK asbestos exposure involves a
series of legacy employer's liability claims that all relate to former UK
operations and employment periods in the 1950s to 1970s. In 1989, the Group's
employer's liability insurer (Chester Street Employers Association Ltd) was
placed into run-off, which effectively generated an uninsured liability
exposure for all future long-tail disease claims with an exposure period
pre-dating 1 January 1972. All claims with a disease exposure post 1 January
1972 are fully compensated via the government-established Financial Services
Compensation Scheme. Any settlement to a former employee whose service period
straddles 1972 is calculated on a pro rata basis. The Group provides for these
claims based on management's best estimate of the likely costs given past
experience of the volume and cost of similar claims brought against
the Group.
The UK provision was reviewed and adjusted accordingly for claims experience
in the year, resulting in a provision of £1.7m (2023: £2.5m).
Employee-related
Employee-related provisions arise from legal obligations in a number of
territories in which the Group operates, the majority of which relate to
compensation associated with periods of service. A large proportion of the
provision is for long service leave. The outflow is generally dependent upon
the timing of employees' period of leave with the calculation of the majority
of the provision being based on criteria determined by the various
jurisdictions.
Exceptional items
The exceptional items provision relates to certain exceptional charges
included within note 5 where the cost is based on a reliable estimate of the
obligation.
The opening balance of £15.7m includes £1.3m related to Russia, and £14.2m
in relation to the Performance Excellence programme, of which £7.1m relates
to capacity optimisation costs and £7.1m relates to functional
transformation. Also included in the opening balance are smaller balances of
£0.2m.
Additions in the year of £30.6m includes £30.0m in relation to the
Performance Excellence programme. The remaining additions of £0.6m include
amounts relating to legacy legal costs and acquisition and integration costs.
Performance Excellence costs of £27.9m have been settled in the year.
The closing balance of £16.0m includes £14.4m in relation to the Performance
Excellence programme, of which £8.3m relates to capacity optimisation and
lean processes costs and £6.1m to functional transformation. Also included in
the closing balance are £1.1m relating to Russia and £0.5m of smaller
balances mainly relating to legacy legal claims.
Other
Other provisions include environmental obligations, penalties, duties due,
legal claims and other exposures across the Group. These balances typically
include estimates based on multiple sources of information and reports from
third-party advisers. The timing of outflows is difficult to predict as many
of them will ultimately rely on legal resolutions and the expected conclusion
is based on information currently available. Where certain outcomes are
unknown, a range of possible scenarios is calculated, with the most likely
being reflected in the provision.
13. Interest-bearing loans & borrowings
In June 2023, the Group completed the issue of £300m five-year
Sustainability-Linked Notes due to mature in June 2028. The notes include a
Sustainability Performance Target (SPT) to reduce scope 1&2 CO(2)
emissions by 19.1% in absolute terms by 2026 from a 2019 baseline, consistent
with the Group's SBTi approved target of 30% reduction by the end of 2030. The
notes will initially bear interest at a rate of 6.875% per annum to be paid
annually in June. The interest on the notes will be linked to achievement of
the SPT with an interest rate increase of 0.75% to 7.625% per annum for the
last interest payment due on 14 June 2028 if the Group does not attain its
SPT. These notes are in addition to the US$800m Sustainability-Linked Notes
drawn in May 2021, due to mature in May 2026, which bear interest at a rate of
2.20% per annum.
In February 2024, the Group chose to reduce its US$800m multi-currency
revolving credit facility (RCF) by US$200m.
Subsequently, in March 2024, the Group exercised the option to extend its
US$600m multi-currency RCF by one year which will now mature in April 2029.
In June 2023, the Group reduced its US$1bn commercial paper programme to
US$800m and subsequently in November 2024, the Group chose to withdraw from
the programme.
At 31 December 2024, £nil (2023: £97.7m) was drawn under the US$600m
multi-currency RCF, which is disclosed net of unamortised issue costs of
£2.1m (2023: £2.3m).
At 31 December 2024, a total of £936.0m (2023: £922.3m) was outstanding
under Sustainability-Linked Notes, which is disclosed net of unamortised issue
costs of £3.0m (2023: £4.5m).
14. Pensions & other post-employment benefit plans
2024 2023
£m £m
Net asset 9.3 2.1
The defined benefit pension schemes across the Group's legacy UK and North
American schemes improved to a net surplus of £9.3m (2023: £2.1m) primarily
due to changes in financial assumptions mainly due to a rise in discount rates
over the period.
15. Derivative financial instruments
The Group enters into derivative financial instruments in the normal course of
business in order to hedge its exposure to foreign exchange risk. Derivatives
are only used for economic hedging purposes and no speculative positions are
taken. Derivatives are recognised as held for trading and at fair value
through profit and loss unless they are designated in IFRS 9 'Financial
Instruments' compliant hedge relationships.
The following table below summarises the types of derivative financial
instrument included within each balance sheet category.
2024 2023
£m £m
Included in current assets
Forward foreign currency contracts designated as cash flow hedges 1.1 0.6
Forward foreign currency contracts designated as fair value hedges 1.7 -
Other forward foreign currency contracts 7.9 7.3
10.7 7.9
Included in current liabilities
Forward foreign currency contracts designated as cash flow hedges (0.3) (0.5)
Forward foreign currency contracts designated as fair value hedges (0.4) -
Other forward foreign currency contracts (9.4) (5.9)
(10.1) (6.4)
Included in non-current liabilities
Forward foreign currency contracts designated as fair value hedges - (2.3)
- (2.3)
Net derivative financial assets (liabilities) 0.6 (0.8)
16. Additional cash flow information
2024 2023
Notes £m £m
Total operations
Net cash generated from operating activities
Operating profit - continuing operations 391.0 368.4
Operating loss - discontinued operations 7 (2.9) (1.3)
Operating profit - total operations 388.1 367.1
Exceptional and other adjusting items 5 63.3 66.2
Amortisation of intangible assets 32.7 37.7
Share of results of joint ventures (1.9) (2.5)
Depreciation of property, plant & equipment 45.9 39.9
Depreciation of right-of-use assets 31.9 31.6
Impairment of property, plant & equipment 0.1 0.9
Capital grants received (0.4) (0.5)
Loss (gain) on disposal of property, plant & equipment 0.9 (0.4)
Funding of pension & post-retirement costs (0.4) (1.1)
Employee share schemes 10.4 7.0
Transactional foreign exchange 7.5 9.2
Increase (decrease) in provisions 5.1 (1.5)
Cash generated from operations before working capital cash flows 583.2 553.6
Decrease in inventories 2.0 42.0
(Increase) decrease in trade & other receivables & construction (19.3) 15.2
contracts
Increase (decrease) in trade & other payables & construction contracts 25.2 (85.3)
Adjusted operating cash flow 591.1 525.5
Additional pension contributions paid - (9.3)
Exceptional and other adjusting cash items (30.7) (18.0)
Income tax paid (110.5) (103.9)
Net cash generated from operating activities 449.9 394.3
Cash flows from discontinued operations included above are disclosed
separately in note 7.
The following tables summarise the cash flows arising on acquisitions (note
11) and disposals (notes 5 and 7).
2024 2023
£m £m
Acquisitions of subsidiaries
Acquisition of subsidiaries - cash consideration paid - 6.1
Cash & cash equivalents acquired - (0.2)
Acquisition of subsidiaries - current period acquisitions - 5.9
Prior period acquisitions - deferred consideration paid 1.0 1.0
Total cash outflow relating to acquisitions 1.0 6.9
Net cash outflow arising on disposals
Prior period disposals 1.8 0.4
Total cash outflow relating to disposals 1.8 0.4
2024 2023
£m £m
Cash & cash equivalents comprise the following
Cash & short-term deposits 556.4 707.2
Bank overdrafts (29.5) (259.8)
526.9 447.4
2024 2023
£m £m
Net debt comprises the following
Cash & short-term deposits 556.4 707.2
Current interest-bearing loans & borrowings (55.2) (286.2)
Non-current interest-bearing loans & borrowings (1,035.8) (1,111.1)
(534.6) (690.1)
Reconciliation of financing cash flows to movement in net debt
Opening balance at 1 January 2024 Cash movements Additions/ acquisitions FX Non-cash movements Closing balance at 31 December 2024
£m £m £m £m £m £m
Cash & cash equivalents 447.4 95.2 - (15.7) - 526.9
Third-party loans (1,026.8) 99.4 - (12.2) - (939.6)
Leases (117.5) 24.8 (38.4) 4.1 - (127.0)
Unamortised issue costs 6.8 0.3 - - (2.0) 5.1
Amounts included in gross debt (1,137.5) 124.5 (38.4) (8.1) (2.0) (1,061.5)
Amounts included in net debt (690.1) 219.7 (38.4) (23.8) (2.0) (534.6)
Financing derivatives (2.3) 1.7 - - 2.9 2.3
Total financing liabilities(1) (1,139.8) 126.2 (38.4) (8.1) 0.9 (1,059.2)
1. Total financing liabilities comprise gross debt plus other liabilities
relating to financing activities.
( )
Opening balance at 1 January 2023 Cash movements Additions/acquisitions FX Non-cash movements Closing balance at 31 December 2023
£m £m £m £m £m £m
Cash & cash equivalents 477.5 1.0 0.2 (31.3) - 447.4
Third-party loans (1,165.5) 111.2 (0.2) 27.7 - (1,026.8)
Leases (115.1) 31.0 (38.4) 5.3 (0.3) (117.5)
Unamortised issue costs 5.9 4.0 - - (3.1) 6.8
Amounts included in gross debt (1,274.7) 146.2 (38.6) 33.0 (3.4) (1,137.5)
Amounts included in net debt (797.2) 147.2 (38.4) 1.7 (3.4) (690.1)
Financing derivatives (0.1) 0.5 - - (2.7) (2.3)
Total financing liabilities(1) (1,274.8) 146.7 (38.6) 33.0 (6.1) (1,139.8)
1. Total financing liabilities comprise gross debt plus other liabilities
relating to financing activities.
17. Related party disclosure
The following table provides the total amount of significant transactions that
have been entered into by the Group with related parties for the relevant
financial year and outstanding balances at the year end.
Sales to related parties - goods Sales to related parties - services Purchases from related parties - goods Amounts owed to related parties Amounts owed by related parties
Related party £m £m £m £m £m
Joint ventures 2024 1.0 0.1 17.3 4.8 0.3
2023 0.9 0.1 19.2 3.8 0.4
Group pension plans 2024 - - - 2.8 -
2023 - - - 1.6 -
18. Legal claims
The Company and certain subsidiaries are, from time-to-time, party to legal
proceedings and claims that arise in the normal course of business. Provisions
have been made where the Directors have assessed that a cash outflow is
probable. All other claims are believed to be remote or are not yet ripe.
19. Exchange rates
The principal exchange rates applied in the preparation of these financial
statements were as follows.
Average rate (per £) 2024 2023
US Dollar 1.28 1.24
Australian Dollar 1.94 1.87
Euro 1.18 1.15
Canadian Dollar 1.75 1.68
Chilean Peso 1,205.92 1,044.69
South African Rand 23.42 22.94
Brazilian Real 6.89 6.21
Chinese Yuan 9.20 8.81
Indian Rupee 106.94 102.66
Closing rate (per £)
US Dollar 1.25 1.28
Australian Dollar 2.02 1.87
Euro 1.21 1.15
Canadian Dollar 1.80 1.69
Chilean Peso 1,247.41 1,124.43
South African Rand 23.65 23.30
Brazilian Real 7.72 6.19
Chinese Yuan 9.14 9.06
Indian Rupee 107.17 105.96
The Group's operating profit before adjusting items was denominated in the
following currencies.
2024 2023
£m £m
US Dollar 206.8 165.6
Australian Dollar 106.3 79.7
Chilean Peso 72.5 69.0
Canadian Dollar 71.8 78.8
Euro 33.0 34.6
South African Rand 16.6 24.8
Brazilian Real 14.9 18.8
Indian Rupee 8.1 6.8
Chinese Yuan 5.6 11.0
UK Sterling (65.3) (34.4)
Other 1.8 4.1
Adjusted operating profit 472.1 458.8
20. Events after the balance sheet date
On 23 January 2025, the Group announced plans to optimise capacity across its
Minerals Division's Europe, Middle East, and Africa (EMEA) region, with the
objective of bringing the business closer to its key customers and enhancing
efficiency. As part of this, a consultation process has been initiated with
employees on a proposal regarding the closure of its manufacturing site in
Todmorden, UK. The consultation process is ongoing and is expected to complete
around the end of March 2025. If the proposal is implemented, this would
result in the closure of the Todmorden plant by the end of 2025 with
production being relocated to other facilities in the EMEA region. The
associated financial impact cannot be fully determined until the outcome of
the consultation and other aspects of the proposed restructuring plan are
known.
Financial Calendar
Q1 2025 Interim Management Statement
24 April 2025
Annual General Meeting
24 April 2025
Ex-dividend date for final dividend
17 April 2025
Record date for final dividend
22 April 2025
Shareholders on the register at this date will receive the dividend
Final dividend paid
30 May 2025
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