The Weir Group H1 Earnings Call Highlights

The Weir Group H1 Earnings Call Highlights

The Weir Group LON: WEIR said first-half order growth accelerated in the second quarter, supported by mining activity across copper, gold, iron ore and oil sands, while production-transfer disruptions in its Minerals division delayed some revenue and pressured margins.

The company reported an 8% year-over-year increase in orders on a constant-currency basis for the first half of 2026. Original equipment orders rose 10%, while aftermarket orders increased 8%. Revenue grew 5% on a constant-currency basis to £1.3 billion. Management said weather-related mine-site disruption in the first quarter had reversed during the second quarter, bringing Minerals aftermarket demand back into its expected mid- to high-single-digit growth range. The group ended June with a book-to-bill ratio of 1.12 and an order book that increased by about £150 million during the half.

Margins affected by production transfers Adjusted operating profit was stable on a constant-currency basis, but the operating margin declined by 100 basis points to 18.8%. The company attributed the decline to product mix, aftermarket demand phasing and higher costs related to the transfer of production between sites. Late in 2025, Weir began relocating rubber-parts manufacturing to Malaysia and India and casting production to facilities in the Americas and Africa, following capacity reductions in Australia and the U.K. Management said unusual demand patterns during the first quarter and early second quarter complicated those moves, resulting in deferred deliveries and manufacturing inefficiencies. Brian Puffer, chief financial officer, said the Minerals division faced a 130-basis-point margin headwind from mix and a further 70-basis-point impact from production-transfer delays. However, he said the company expects those factors to reverse in the second half as production is replanned and delayed orders are delivered. “We are on track to deliver our £90 million target in cumulative Performance Excellence savings,” Puffer said, adding that the company expects to sustain operating margins above 20% for the full year. The company said its S/4HANA program will have a smaller-than-previously-expected impact in 2026, with Puffer estimating a full-year effect of about half the previously indicated 70 to 80 basis points.

Divisional performance Minerals orders rose 7% on a constant-currency basis, including 9% growth in original equipment and 7% growth in aftermarket orders. Revenue increased 3% to £900 million, helped by the Townley acquisition. However, operating profit fell 5% to £181 million and the division’s margin declined 170 basis points to 20.1%. Management said Minerals won more than two-thirds of new large pump tenders during the half and succeeded in 13 of 14 competitive mill-pump trials. The company said its more than 90% success rate in pump trials reflects the performance of its technology and customer-service model. It characterized pricing conditions as low single-digit, noting customer cost consciousness and more competitive conditions for original equipment early in the capital-expenditure cycle. ESCO delivered stronger financial results, with orders rising 10%, revenue increasing 11% to £369 million and operating profit growing 17% to £79 million on a constant-currency basis. Its operating margin improved 120 basis points to 21.5%. The division benefited from demand for mining buckets in North America and Australia, improving aftermarket demand, the return of dredging orders in the Middle East, and contributions from Micromine, Fast2Mine and ESEL. Mining markets represented 81% of ESCO orders.

Technology, software and growth markets Weir highlighted several product launches during the period, including the WARMAN MCR² mill-circuit pump, which it said provides a 20% increase in operational ...