The Weir Group PLC

Good morning everyone and welcome to WEIR's 2025 full year results presentation. Before we start, I would like to draw your attention to the usual cautionary notice on forward-looking statements. We've had a very strong year, so there's a lot to cover today. I'll start with introductory remarks, then Brian Puffer, our CFO, will present the financial review. I'll then return to cover our strategic progress during the year and our outlook for 2026. And after the presentation, both Brian and I look forward to answering your questions. So, beginning with our equity case, WEIR is delivering on the sustainable growth in shareholder returns that we promised. WEIR today is a focused technology partner to the mining industry with market-leading hardware and software solutions both of which leverage our secret source of mission-critical technologies and unmatched customer intimacy to deliver a unique value proposition protected by high barriers to entry. We are poised to benefit from multi-decade favourable market demand tailwinds for critical minerals, while the adoption of new technologies to enable sustainable mining will only boost the potential opportunity set available to WEIR. And as we now pivot our focus to growth, we are driving returns with strong through-cycle organic growth, excellent execution and compounding M&A. With the platform we now have in place, there is significant potential for incremental value creation. Turning to our results in 2025, we delivered a strong financial performance, reflecting WEIR's market-leading technology and deep customer relationships. We successfully navigated the uncertainty arising from tariffs and global supply chain disruptions, leveraging the flexibility created in our operational footprint to provide seamless service to our customers. On revenue, our strong operational performance delivered 6% constant currency growth year on year. This performance reflects a combination of high demand in the aftermarket, flawless execution on our OE order book in the fourth quarter, and contributions from acquisitions completed in the year. We expanded our operating margins by 150 basis points, exceeding our target of 20% a year earlier than expected, reflecting both the success of our performance excellence program and the quality of our new software solutions business. We once again delivered against our free operating cash conversion target of 90 to 100%, supported by a disciplined operational performance and the maturing of our WEIR business services functional capability. We grew our constant currency operating profit by 15%, significantly ahead of last year and underpinning another year of predictable dividend growth. And finally, our absolute scope 1 and 2 emissions are down 31% now against our 2019 baseline, putting us ahead of our original 2030 SBTI target for a 30% reduction. On top of our strong financial performance in 2025, we also made significant strategic progress in advancing our growth strategy with meaningful self-funded acquisitions and partnerships in digital, geographic expansion and product extensions. As we continue to integrate these businesses into our one-way platform, all transactions are performing well and expected to generate returns well above our cost of capital. Together with several new product launches, we've considerably expanded our addressable market of mission-critical solutions and created a unique technology proposition to the mining industry. In summary, 2025 was an exceptional year for WEIR, and our achievements reflect the dedication of my outstanding WEIR colleagues around the world, whose commitment to our customers and passion for our purpose underpins our success to date. and who are more excited than ever about what we can deliver in the future. I now hand you over to Brian to take you through our financial results in more detail.

Thank you, John, and good morning, everyone. As John just mentioned, we are delighted by the operational execution from across the group during 2025, which is evidence in our strong financial results. During the year, orders increased by 7% to £2.6 billion, supported by our high level of demands for our market-leading products and strategic acquisitions. Original equipment orders were unchanged year-on-year, reflecting positive underlying demand for mine site expansions and de-bottlenecking solutions, offset by the phasing of large greenfield projects. Aftermarket orders grew by 8%, supported by high mining activity levels and contributions from acquisitions. Revenue increased in kind by 6% to 2.6 billion pounds, reflecting strong execution of our order book, particularly in the fourth quarter. Original equipment revenue increased by 2% from shipments of medium to large projects and minerals, as well as smaller brownfield optimization and de-bottlenecking projects. Aftermarket revenue grew by 8%, supported by hard rock mining production trends, which drove demand for wear parts and expendables across both divisions. Operating profit increased by 15% year-on-year to 518 million pounds, resulting in operating margins of 20.2%, an increase of 150 basis points. This strong performance reflects both incremental performance excellence savings and contributions from our acquisitions in software solutions, which I will cover in a moment. Profit before tax of £447 million was £19 million ahead of last year, despite a £22 million translational FX headwind. Growth in profit delivered a 3% increase in EPS for the year to 123.8 pence per share. Turning to cash, where free operating cash conversion of 92% was within our target range of 90% to 100%, reflecting an increase in profits offset by higher working capital due to a buildup in inventory prior to the closure of some of our operations as part of performance excellence, as well as the impact of U.S. tariffs on our year-end inventory balances. As expected, following significant acquisition activity in 2025, net debt to EBITDA increased to 1.9 times toward the top end of our range following acquisitions. Return on capital employed likewise decreased by 140 basis points to 17.9%, though still well above our costs of capital. Taken together, our strong financial performance in 2025 underpins our full-year dividend of 41.7 pence per share, a 4% increase from last year. Turning to results in each of our divisions, starting with another strong performance for minerals, which included the launch of new technologies to expand our addressable market, the completion of the Townley acquisition, and the delivery of several key performance excellent work streams, which supported further margin expansion. Market conditions are positive with gold and copper prices reaching all-time highs and driving strong demand as customers sought to maximize production from existing assets. Mineral orders grew by 5% in the year. Original equipment orders were stable, reflecting a lower level of large orders as expected. Excluding these projects, orders increased by 7%, highlighting the positive underlying growth in small to medium-sized projects. In aftermarket, orders grew by 7%, supported by our expanded installed base, higher demand for pump spares, and ammunition parts. as well as orders from Townley during the four months of our ownership post-completion. Revenue increased by 6%, reflecting original equipment product shipments, positive mining market trends, and a contribution from Townley. Aftermarket revenue grew by 7%, supported by strong performance in North and South America, and underpinned by positive hard rock mining production growth in these regions. Operating profit increased by 11% on a constant currency basis to £406 million, with performance excellence workstreams and operational efficiencies delivering further margin expansion to 21.9%, an increase of 100 basis points. Our ESCO division delivered an excellent performance with growth in core GET products, expansion of the installed base of motion metrics solutions, and further operational improvements in the division's foundry network. Orders grew by 11% with strong demand for our core G.E.T. products in mining and infrastructure markets, partly offset by normalized demand for dredge solutions. Excluding the £44 million contribution from micromine, like-for-like growth was 4%. Revenue was stable on a like-for-like basis, reflecting strong underlying aftermarket growth in core GET markets and motion metric solutions, offset by the phasing of mining bucket deliveries, which impacted original equipment revenue. Total divisional revenue increased by 6%, including £41 million from micromine. Operating profit increased by 22% to 152 million pounds, with margins expanding 260 basis points to 21.4%, reflecting a contribution from Micromine of 120 basis points and incremental performance excellence savings. While the financial performance of Micromine is included within ESCO, we committed to update you on the key business operational metrics which drive value post-acquisition. In Micromine, customer retention increased to 94% with low churn supported by our semi-annual product updates and world-class support. Recurring revenue for the year grew to 88% and as expected, annual recurring revenue grew 24% on an annualized basis. turning to operating margins, which increased 150 basis points year on year to 20.2%, including a 10 basis point headwind from translational FX, primarily reflecting the deflation of the US and Australian dollar. The key driver of margin expansion in the year were a marginal shift in minerals revenue mixed towards aftermarket, resulting in a 10 basis point tailwind. Incremental savings from our performance excellence program 140 basis points highlighting the compounding benefit of the program with cumulative savings now at 59 million pounds. Initial benefits from our acquisitions in the year contributed 30 basis points as expected. And a 30 basis point headwind from increased R&D investment supporting new product launches and material science advancement consistent with our policy of investing 2% of sales in R&D. Taken together, these factors resulted in margins of 20.2%, achieving our goal of 20% margin a year early with more to come. Adjusting items totaled 73 million pounds for the year, with costs relating to exceptional items of 47 million pounds. Costs across the three pillars of Performance Excellence Program were 45 million pounds, bringing the final total program costs to 113 million pounds below our previous guidance. Acquisition and integration costs were £22 million, including £5 million arising from the unwind of the fair value uplift on inventory for Townley. During the year, the U.S. entity which held asbestos-related claims entered Chapter 11 bankruptcy proceedings and has subsequently been deconsolidated. We believe the remaining provision to be sufficient to cover future exposures with no further charges related to this provision expected. Other adjusting items reflect normal amortization of acquisition-related intangibles, which increased as expected in charges associated with asbestos provision to the date of bankruptcy. Turning to returns, we're adjusted operating cash decreased by 25 million pounds to 566 million pounds, reflecting increased working capital outflows due to phasing of safety and inventory supporting our performance excellence activities and large original equipment order deliveries, both of which we expect to unwind as operations rebalance across our platform in the coming year. Working capital is a percentage of sales increased by 170 basis points to 22.4%, though as mentioned, we expect to return towards our 20% target as our operations normalize. CapEx was marginally lower year on year at one times depreciation compared with 1.1 times in the previous year, while free operating cash conversion decreased slightly to 475 million pounds resulting in free operating cash conversion of 92% within our target range for the year. Turning to liquidity, where free cash flow decreased to 267 million pounds, reflecting higher tax payments, increased finance costs, and outflows related to settlement of financial derivatives in relation to our refinancing activities. following the self-funded acquisitions of Micromine, Townley, and FastenMine, and the strategic investment in Sidra, net debt to EBITDA was 1.9 times on a lender-covenant basis within our target range following acquisitions. John will provide more detail on our 2026 outlook later in the presentation, though this slide sets out some key modeling considerations for the year ahead, including... First, we expect net interest costs to be 90 million pounds, reflecting our acquisition and refinancing activities in 2025. We expect CapEx and lease spend of around 1.3 times depreciation as we look into making investments in our foundries as well as the start of a company-wide SAP S4 implementation. We remain on track to de-lever at pace and expect to return towards our normal operating range of 0.5 to 1.5 times by the end of 2026, supported by a free operating cash conversion of 90 to 100%. We anticipate exceptional cash costs of around 25 to 30 million pounds, primarily relating to acquisition and integration costs from our M&A activity in 2025 and from the completion of final performance excellence related projects. And finally, we expect our effective tax rate to be 28% in line with the current year. As we look ahead, we have taken decisive actions to address legacy balance sheet exposures positioning weir with a stronger and cleaner balance sheet as we pivot our focus to delivering growth. As mentioned earlier, we have deconsolidated the U.S. entity containing asbestos provision and expect the existing provision to be sufficient to cover any future exposure. In addition, our defined benefit pension schemes have gone from a circa 100 million pound deficit to a funded surplus making the need for any future special cash contributions unlikely. And finally, as we enter the final year of our performance excellence program, we have increased our total savings target to 90 million pounds. By the end of 2025, we have expensed all program related costs totaling 113 million pounds below our previous guidance. Going forward, we will continue to incur acquisition and integration costs as we convert our M&A pipeline, which will drive amortization from related intangibles. In future, this means we will have a simplified exceptional items, improving the quality of our earnings and the consistency of our cash generation. To summarize, mining markets remain supportive with high levels of activity in our core mining markets as our customers deliver on the growing demand for critical metals. With ongoing expansion of our installed base, combined, and contributions from acquisitions, we see a strong underpin for future demand for our aftermarket products. In 2025, we executed strongly, delivering revenue and margin growth while executing on our performance excellence program ahead of schedule and under budget. Cash conversion remained within our target range, and we delivered another increase to our full-year dividend. We completed the acquisitions of Micromine Townley and Vastamine, and while we expect some additional costs arising from refinancing of this acquisition activity, these investments will be accretive both to growth and margins. Our strong cash conversion will support deleveraging at pace, and our strong clean balance sheet is positioned for growth. Overall, we delivered a strong financial performance in the year, and as we move through 2026, we have strong momentum across the group and are confident in delivering another year of growth. Thank you, and I will now hand back to John.

Thank you for that, Brian. Now, turning to our business review, I'll share more details on our strategic progress in the year and set out our view of market conditions and the outlook for 2026. Starting with our We are Weir strategy where our pillars of people, customer, technology and performance are fully embedded throughout the organisation with top to bottom alignment on our priorities across our global team. At our Capital Markets Day in December, I presented our refreshed framework, acknowledging the opportunities and challenges which come as Weir continues to evolve. Going forward, our strategy specifically reflects the adoption and utilization of AI, the opportunity we create through mining industry thought leadership, our capability to deliver transformational solutions to our customers, and our capacity to leverage lean operations and high quality and efficient global business services. As I mentioned in my introductory remarks in 2025, we made significant progress on advancing our growth strategy in digital, geographic expansion and product extensions, evolving our business in line with our clear capital allocation policy. So taking each in turn. On digital, we accelerated our strategy by embarking on our mission to create a global leader in mining software solutions. With Micromine, Fast2Mine and MotionMetrics, we've created a market-leading end-to-end offering, and 2026 is the year of bringing it all together. Progress-wise, the integration of Micromine is complete. Fast2Mine has started very strongly in pursuit of the one-year earn-out, and MotionMetrics has officially now moved into the software segment within ESCO. With this platform, we will connect domain knowledge in extraction and processing with upstream data to drive unique customer insights and drive productivity at a time when the industry needs it the most. Our cross-selling pipeline continues to build and I'm really encouraged by the great collaboration going on between our hardware and software businesses as we leverage their collective strengths to grow faster. Turning to our geographic presence, we made several investments enhancing our footprint in some of the world's fastest growing mining regions. The acquisition of Townley strengthened minerals presence in North America, adding more phosphate exposure and completing our global foundry capacity plans for the division. Sales and marketing integration is now well underway and we're focused on incorporating the Florida foundry into our zero harm safety culture with investments already made in upgrading the physical environment. Earlier this week we announced the completion of our acquisition of the remaining share in ESCO's Chilean joint venture ESL, strengthening ESCO's ability to serve customers across South America and bringing more foundry capacity in-house. Between signing and completion, the ESCO team has worked tirelessly with great support from ELECMETAL to prepare customers for the transition and set up our own sales and logistics capability in Chile, which leverages the existing minerals footprint. This means we're ready to hit the ground running on completion this week. And at the Future Minerals Forum in January, we signed a joint venture agreement with Olean, a powerful partner in Saudi Arabia, marking a significant step forward, which positions WEIR for growth in this rapidly expanding mining and metals market. We're delighted to have Olean as our partner again, following our previous successes in oil and gas. And finally, we invested in filling product gaps in our future-facing mill circuit solution. Just as we did with Enduron Elite screens, we have in-house developed the Enduron Vertical Stirred Mill with novel proprietary features offering coarse, fine and regrind capabilities with dramatically lower energy costs than ball mills. We've already received our first VSM order, generating an important reference for the new technology. In addition, we signed a global collaboration agreement with Sidra commercialize their new P29 separation technology, which offers improvement in throughput of over 40% compared to traditional grinding circuits. Like our other flowsheet solutions, P29 is modular, meaning it can be retrofitted onto existing sites to improve productivity as well as form the core technology to future greenfield flowsheets. Now moving back to progress on our organic strategy where in 2025 we're leaving with real purpose in promoting the sustainable and efficient delivery of critical resources. For example, in November we launched our newest industry report, Untapped, which is driving new conversations about water in mining. With our leading thinking, technological expertise and broadened flowsheet offering, we're strongly positioned to support the industry in a shift to more strategic water management. While delivering technology for our customers to meet their sustainability challenges, we're also delivering a more sustainable weir. Inclusive of recent changes to our foundry footprint and expected market growth, we still expect to meet or exceed our scope 1 and 2 emissions reduction target of 30% as a group by 2030. Externally, we have retained our A score for climate transparency from CDP for the fourth consecutive year, and along with our updated climate transition plan, we continue to advocate for the right frameworks to drive progress in the hard-to-abate mining industry. Turning to our people pillar, we continue to create a safe and purpose-driven workplace for all colleagues. On safety, our ambition is zero harm, but in 2025, we fell short. as our total incident rate increased over the prior year. Encouragingly, through focus on leadership and best practice, there has been a reduction in the number of recordable incidents in the second half of the year, and we're committed to maintaining this momentum through a broader strategy refresh in 2026. We continue to invest in creating an inclusive environment where people can do the best work of their lives. Employee engagement remains high, with our net promoter score of 49 in the top 10% of manufacturing companies globally, as benchmarked by PECON. Within software solutions, our full-year employee retention rate of 87% reflects the success of the integration program at Micromine. External recognition continues, with Weir ranked in the top 10 of Britain's most admired companies and achieving Tier 1 status in CCLA's mental health benchmark for the first time alongside only nine other companies. For me, the real highlight of the year that demonstrates the strength of Weir's culture has been the collaboration on cross-selling software solutions through our global footprint. Early signs have been very encouraging, with warm introductions to several Tier 1 miners leading to many new opportunities, our first licence sales, and a strong pipeline of additional opportunities developed for 2026. Turning to our customer pillar, where our £40 million order to provide tailing solutions to Codelco in Salabre, Chile, illustrates both our proven experience on large-scale sustainable tailings operations, as well as the importance of local presence delivering the world-class service WEAR is known for. We are delivering on our digital vision. Our commitment to annual upgrades in software features, such as fully integrated scope optimization within advance, underpins Micromine's market-leading recurring revenue growth and customer satisfaction. Motion Metrics had a great year in 2025 and is now transitioning to the full annual subscription-based service model, which has been so powerful for Micromine. Underpinned by our long-standing relationships with customers and our technological leadership, Minerals continues to gain market share in large mill circuit pumps, converting over 90% of competitive field trials during the year, consistent with our historical success rates. Likewise, ESCO grew its market share in core mining markets, completing 159 net major digger conversions, an increase in successful conversions of 18% versus the prior year. While ESCO continues to be the clear market leader in the mining GET market globally, we have the opportunity to leverage the brand to access new opportunities through our attachment strategy. Working directly with our customers, we designed the Production Master, a new highly engineered hydraulic shovel bucket that is more robust in key areas of wear, allowing longer cycles between maintenance. Our direct-to-customer approach has led to exceptional growth in Australia. In the past three years, ESCO has increased bucket sales in this key market by 700% with more to come. Turning to the technology pillar where we continue to invest in our core hardware solutions as part of our growth strategy. Maintaining our market leadership across the mill circuit, minerals release new Enduron crushers and next generation mill circuit pumps, delivering higher productivity, reduced downtime and lower carbon emissions for our customers. Our next intelligent solutions are transforming how WIR creates and captures value as customers focus on increasing throughput and minimizing unplanned downtime. We have onboarded over 110 customer sites over the last three years and in September we announced a new strategic partnership with Viking Analytics to enhance our digital wear monitoring solution with AI enabled early predictive wear detection. In ESCO, we recently launched Vertisys, our next generation GE system for infrastructure markets, which provides an increase in wear life and reduced adapt to change time, which, building on nexus in mining, reduces operational downtime and total cost of ownership for our customers. By continuing to innovate, we're further pushing the boundaries of slurry pumping. At Tech Highland Valley Copper, we built our relationship on the existing concentrator line around other installed products. The customer wanted higher output and less downtime, initially relying on Next Intelligence solutions and support from our nearby Kamloops Service Centre. As a result of our demonstrated service and technology leadership, we were invited to trial our MCR-760, which is now the largest slurry pump working in North America. ultimately dislodging a long-established competitor on site. Turning to the performance pillar, where we've upgraded our final cumulative performance excellence savings target by £10 million, taking us to £90 million overall. With final total cost for the programme of £113 million, £7 million less than our prior estimate, the programme has delivered an excellent return on investment and built continuous improvement capability that will keep delivering efficiencies going forward. Each area, capacity optimisation, lean process and GBS has overachieved repeatedly, with minerals, ESCO and corporate teams working together seamlessly. As we enter the final year of delivery, we can reflect on a highly successful program, which has not only underpinned our operating margin expansion, but also created the scalable platform that will enable future growth for many years to come. So now looking ahead, activity levels in our core mining markets remain strong, with customers increasingly investing in expansion and de-bottlenecking capex as supply deficits in critical minerals emerge. This shift is driving positive policy developments in key jurisdictions such as the United States and Chile, where permit and licensing regulatory frameworks are being reconsidered to allow new projects to develop faster. Meanwhile, engagement among our mining customers and EPCMs on technology and innovation is encouraging, as the need for new and better solutions to the challenges of significantly increasing capacity in the near term become ever more apparent. Additional demand drivers such as AI, defence, manufacturing and reshoring will further underpin growth in ore production. Faced with declining ore grades and growing geological complexity as the best resources of mind, customers are putting more stress on their existing equipment, leading to more maintenance events. Together with our growing installed base, current market conditions are supportive of increasing need for our spares, expendables and services. So turning to our outlook for the year ahead, we enter 2026 with a strong opening order book and expect to see increasing capex, which will support OE growth. In the short term, we see a continued bias to brownfield projects, with the potential for larger expansion projects to accelerate, although as ever, the timing is difficult to predict. Demand for our aftermarket spares and expendables is strong. Coupled with modest price increases, we have a solid foundation to deliver another year of mid-single-digit growth in aftermarket revenue, while our software businesses remain on track to deliver further strong growth in line with our acquisition expectations. So overall, we expect another year of growth in revenue and operating profit, with 50 basis points of operating margin expansion. While we've upgraded our final performance excellence savings target, we expect some portion of the benefits to be reinvested in R&D and IT systems, specifically a final investment in a single instance global ERP, key to unlocking another level of future operational efficiencies and margin expansion. Finally, we expect improvements in working capital and resulting free operating cash conversion of between 90% and 100%, consistent with our medium-term guidance. So, pulling together today's key messages. We delivered a strong operational performance in 2025, reflecting flawless execution of our order book, robust aftermarket growth and contributions from acquisitions completed in the year. We made significant progress in advancing our growth strategy with meaningful self-funded acquisitions and partnerships in digital, geographic expansion and product extensions. We continue to deliver our performance excellence programme at pace, delivering savings to date of £59 million and upgrading our final target to £90 million in total cumulative savings. In 26, we expect to deliver another year of growth and margin expansion supported by a positive market outlook. And finally, we're delivering all the above in the right way, providing our people with purposeful work and personal growth, and customers with innovative technology solutions that accelerate sustainability in mining. Looking forward, the long-term value creation opportunity for WEIR is even more compelling. We've created a global leader in engineered hardware and software for the mining industry. Demand for critical metals continues to build and customers are increasingly recognising the need for new, more efficient solutions to unlock future supply. And finally, we're providing a clear pathway to sustain growth in total shareholder returns through a clear capital allocation strategy, sector-leading operating margins and consistently high cash generation. Thank you for listening, and Brian and I will now be pleased to take any questions that you have.