Weir : Presentation - Proposed sale of Oil & Gas Division to Caterpillar Inc and becoming a mining pure play

PROPOSED SALE OF OIL & GAS DIVISION

Delivering transformation of Weir into a premium mining technology pure play

TRANSFORMING WEIR INTO A PREMIUM MINING TECHNOLOGY BUSINESS

1. Oil & Gas sale delivers a strong outcome for all stakeholders
2. Delivering transformation of Weir into a premium mining technology business
3. Maximising long-term structural growth opportunities

4 Engineering smarter, more efficient and sustainable mining solutions

5 Winning through 'We are Weir'

2

TRANSACTION HIGHLIGHTS

A STRONG OUTCOME FOR ALL STAKEHOLDERS

Agreed cash sale of the Weir Oil & Gas division to Caterpillar Inc. for an Enterprise Value of US$405m

• Comprises entire Oil & Gas division, both North America and International
• Cash proceeds subject to transaction costs and customary working capital and Net Debt adjustments

Net proceeds to be used to reduce leverage

• Weir pro forma Net Debt / EBITDA at 30 June 2020 of 1.9x
• Transaction facilitates $70m US cash tax benefit to be realised over the medium term

Weir shareholder approval required, with completion expected to occur by the end of 2020

• Circular containing further details of the Transaction will be sent to shareholders in due course

3

CREATING A PREMIUM MINING TECHNOLOGY BUSINESS

O&G SALE A MAJOR MILESTONE IN STRATEGIC TRANSFORMATION

2017	2019
2018	2020
2016	2020
c.£1bn mining technology	A £2bn+ mining technology
business. Exposed to multiple	pure play
cyclical end markets.

Agreed sale

of O&G

Sale of Flow Division

Control

ESCO

Division

Primary focus

on mining

announced

acquisition completed

4

A PREMIUM MINING TECHNOLOGY BUSINESS

LEADING MISSION-CRITICAL POSITIONS IN MINING SUPPLY CHAIN

EXTRACTION		COMMINUTION		MILL CIRCUIT		TAILINGS MANAGEMENT
ESCO®		Enduron®		Warman®		GEHO®
#1 in Ground Engaging Tools		#1 in HPGRs		#1 in Slurry Pumps		#1 in PD pumps

Highly abrasive applications that drive aftermarket demand

5

A PREMIUM MINING TECHNOLOGY BUSINESS

A HIGHLY RESILIENT AFTERMARKET-FOCUSED BUSINESS MODEL

MISSION	HIGHLY
CRITICAL	ENGINEERED
SOLUTIONS	EQUIPMENT

	Technology that enables		Large installed base from
	ongoing ore production		continuous innovation
	Disproportionate cost of		Smart, efficient and
	unplanned downtime		sustainable solutions

Up to £10m		>90%
Cost per day of unplanned downtime		Customer retention rate, with some
on a typical copper mine		relationships 50+ years

INTENSIVE

AFTERMARKET

CARE

• Highly abrasive applications
• Recurring revenue from higher-margin spares

20%-100%

Annual spares to original equipment

ratio for entire product range

COMPREHENSIVE

GLOBAL

SUPPORT

• On-sitecustomer support in need-it-now industry
• Regional manufacturing plants

Within 200km

Weir has facilities near every major

mine in the world

6

A PREMIUM MINING TECHNOLOGY BUSINESS	7

DELIVERING RESILIENT LONG-TERM PERFORMANCE THROUGH THE CYCLE

1	Biased to higher growth, future-facing commodities1	2		Best-in-class recurring revenue model - 80% AM2
							£m
		11%				1,200	Minerals AM revenue
		28%	Copper			1,000
		23%	Gold				800
		Iron				600
			Coal
						400
			Other mining
		14%
		Oil sands				200
		9%
		15%					0
							2009	2010	2011	2012	2013	2014	2015	2016	2017	2018	2019
3	High margins through the cycle3		4		Resilient earnings with long-term growth
	25%						450
	20%				(£m)EBITAConsensus division)byforwardyear1(rolling	400
				350
	15%						300
						250
		Divisional margins before
	10%					200
	Group central costs
					150
	5%	ESCO Operating Margin	ESCO +500 bps since			100
	Minerals Operating Margin	acquisition; target 17%			50
	0%						0
	2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019	H1			Jul-15	Jan-16	Jul-16	Jan-17Jul-17	Jan-18Jul-18Jan-19Jul-19Jan-20Jul-20
		7						Minerals	ESCO
				2020
										1. Weir mining commodity exposure 2. Minerals & ESCO combined AM%.

MAXIMISING LONG-TERM GROWTH OPPORTUNITIES

DEMAND FOR ESSENTIAL RESOURCES IS GROWING

WEIR IS AN IMPORTANT PART OF THE SOLUTION

COPPER ESSENTIAL TO ENABLING LOW CARBON TRANSITION1

Innovative

engineering is

the solution

But they need to

be produced

more sustainably

As the world

develops

c.3x c.4x c.10x

	Copper content of	Copper content of a	Copper content of
And	coal power alternative	conventional car	coal power alternative
electrification	GROWTH PROSPECTS FOR FUTURE FACING COMMODITIES2
increases

	115		Copper	Gold		Iron ore
	110
	105
It needs more
critical	100
We needs more
resou ces
critical
resources	95
	2019	2020	2021	2022	2023	2024

Weir technology processes the majority of the world's mined copper

8

1. IEA, 2020. 2. CRU, 2020

MAXIMISING LONG-TERM GROWTH OPPORTUNITIES

SUPPLY CONSTRAINTS AND SUSTAINABILITY DRIVING INNOVATION

Customers focused on productivity and sustainability

• Safety
• Process stability
• Reducing energy
• Increasing recoverability
• Social responsibility
• Water reduction
• Improving throughput
• Ore grade declines

With clear mid-term targets to reduce emissions

"Our actions must be of substance. They must be real, tangible actions to drive emissions down."

Mike Henry, CEO, BHP1

Miner2030

emissions target

-30%

-30%-30%

Making technology partners even more relevant

EFFICIENT

SMART SUSTAINABILE

9

1. BHP, September 2020

ENGINEERING SMARTER, MORE EFFFICIENT AND SUSTAINABLE MINING OPERATIONS

WEIR TECHNOLOGY TO SOLVE SOME OF MINING'S BIGGEST CHALLENGES

Value chain	Extraction	Material	Comminution	Mill circuit &	Tailings
stage	handling	concentration	management
			Increased				Increased
Industry			Reduce energy and			Reduce waste,		Increased volume
Challenge		operational		water consumption		throughput and		increase productivity		of tailings
	efficiency & safety			recoverability
Weir Solution			GET Detect		Long distance		HPGRs as a		Digitally		TerraflowingTM
	Toolhead		concentrate		substitute for		monitored and
				transportation			controlled mill		process
			Track Pro			SAG mills
					Ore hoisting				circuit

Delivering innovative engineering at every stage of the mining value chain

10

ENGINEERING SMARTER, MORE EFFFICIENT AND SUSTAINABLE MINING OPERATIONS

PUTTING SUSTAINABILITY AT THE HEART OF OUR STRATEGY

Priorities reflect where we make the biggest difference

• Creating sustainable solutions - making our customers more sustainable and enabling Net Zero
• Reducing our footprint - cutting relative emissions by 50% by 2030
• Nurturing our unique culture - delivering top-tier employee net promoter scores
• Championing zero-harm - protecting our people and environments

11

WINNING THROUGH 'WE ARE WEIR'

UNLOCKING GROWTH OPPORTUNITIES THROUGH DIFFERENTIATION

Improved employee engagement and	Increased market share
organisational effectiveness
	• Safety - journey to zero-harm		• Growing addressable markets through
		expanded technology offering
	• Making every employee a shareholder
		• Successful share gain campaigns
	• Engaging and empowering our people
		• Customer technology partnerships
People	• High performance culture	Customers
• Continue to build service footprint

Increased revenues from new solutions	Sustainably higher margins through the cycle
• Protecting the core through incremental	• Deliver divisional margin gains
development	• Underpinned by strong cash generation
• Expand into adjacent markets
• Optimise global manufacturing and supply chain
• Embrace digital and IOT
• Streamline systems and back office functions
Technology • Increase investment in disruptive innovation
Performance

12

KEY MESSAGES

1			3	4	5
2
Sale of Oil & Gas	Creating a Premium	Maximising long-term	Engineering smarter,	Winning through We
division a strong	Mining Technology	structural growth	more efficient and	are Weir
outcome for all	business	opportunities	sustainable mining
stakeholders				solutions

13