The Weir Group (WEIR) H1 2024 earnings summary

Executive summary

• Delivered resilient H1 2024 performance amid macroeconomic and geopolitical uncertainty, with 8% growth in operating profit to £215m and margin expansion to 17.8%, supported by strong aftermarket demand and Performance Excellence initiatives.

• Free operating cash conversion improved to 68%, up 17 percentage points year-on-year, with operating cash flow up 14% to £198m.

• Interim dividend increased 1% to 17.9p per share.

• Aftermarket business model proved highly resilient, offsetting declines in original equipment orders and revenue.

• On track to achieve full-year guidance for operating profit and cash conversion, with Performance Excellence programme driving efficiency gains.

Financial highlights

• Revenue was £1.2bn, down 3% year-on-year, mainly due to phasing of original equipment deliveries and normalization in Canadian oil sands.

• Adjusted operating profit rose 8% to £215m; operating margin up 180bps to 17.8%.

• Profit before tax and adjusting items was £193m, up 3% year-on-year, despite a £13m FX headwind.

• Free operating cash flow of £146m, up from £108m; net debt to EBITDA at 1.2x.

• EPS stable at 53.6p before adjusting items; ROCE up 160bps to 17.9%.

Outlook and guidance

• Full-year operating profit and cash conversion guidance reiterated; revenue expected at the lower end of analyst expectations.

• Operating margin for FY 2024 expected around 18%, progressing toward 20% target by 2026.

• Free operating cash conversion guidance maintained at 90–100%.

• Anticipates acceleration in greenfield project approvals, especially in Africa and Asia, with new large contracts underpinning future growth.

• CapEx and lease spend expected at £120m for the year; exceptional cash outflow of £40m to support transformation programme.