The Weir Group (WEIR) Q3 2024 TU earnings summary

Executive summary

• Strong order momentum in Q3, highlighted by major greenfield wins at Reko Diq (£26m) and OCP (£25m), reflecting leadership in mining technology and sustainable solutions.

• Performance Excellence Program delivered GBP 19 million in cumulative savings, progressing toward a GBP 60 million target by 2026.

• Aftermarket demand remained positive, especially in hard rock mining, with mine-specific headwinds moderating.

• High activity at brownfield sites as customers focus on maximizing production and efficiency.

• Q3 saw strong order pipeline conversion, with full-year 2024 guidance reiterated.

Financial highlights

• Group original equipment orders up 15% year-on-year; aftermarket orders up 2% year-on-year on a constant currency basis.

• Group orders increased 5% year-on-year in Q3 and were stable for the nine months to 30 September 2024.

• Minerals division original equipment orders grew 19% in Q3 versus prior year, including GBP 51 million from Reko Diq and OCP.

• Book-to-bill ratio improved to 1.03 year-to-date.

• Positive free operating cash flow contributed to deleveraging; net debt to EBITDA expected around 0.8 at year-end.

Outlook and guidance

• Expectation for continued positive order development into Q4 and 2025, with strong pipeline and several sizable orders anticipated.

• 2024 guidance reiterated: growth in constant currency revenue, operating profit, margin, and free operating cash conversion of 90%-100%.

• Targeting operating margin of approximately 18% for FY 2024 and 20% by 2026.

• Longer-term guidance to outgrow markets, expand margins, and maintain strong cash conversion.