Jon Stanton - Weir Group Full Year Results 2021

Hello everyone. I'd like to update you on Weir's results for 2021, but let me begin with a few words on the situation that continues to unfold in Ukraine and Russia. Following rapid escalation last week, we do have people in both countries, albeit our operations are relatively small, and our first priority is the safety of our colleagues and their families who have been impacted by these events. We are doing whatever we can to support them through this very difficult and dynamic situation, and our thoughts are with them all. Turning next to reflect on 2021, it was a year where we dealt with a number of significant external challenges, and I'd like to thank everyone around the group for their tenacity and determination as we faced into them. The strength of our common purpose and the willingness of our colleagues to go the extra mile was crucial to ensuring we delivered a strong performance overall. This is our first year as a focused mining technology business following the sale of our oil and gas division last February, and we're already seeing the benefits of this increased focus. First, our mining markets were highly active, supported by near-record commodity prices that are incentivizing miners to maximize production. That backdrop is very positive for us. Second, the global recovery from the pandemic gathered pace, with economies and markets beginning to reopen as restrictions were relaxed or lifted, and governments and businesses around the world prioritized the investment necessary to build back better, which will support both mining and infrastructure demand. Third, as a business we executed strongly in 2021, with both our operational and strategic initiatives making significant progress. That included increasing our commitment to R&D and new product development, continuing to lead the technology change in our markets, acquiring Motion Metrics to accelerate our technology and digital strategy, and staying on track with our financial and sustainability performance goals. And you can see this fundamental strength of our positioning reflected in our results. Order momentum was strong across the year, being up 22%, with a significant acceleration in the final quarter when order growth reached 26%. Recurring demand for aftermarket consumables has now surpassed pre-COVID levels. We delivered a good set of results with pre-tax profits of £249 million, in line with last year despite FX headwinds, and the strength of operational execution across the group delivered a 40 basis point adjusted operating margin expansion. Crucial to this performance was a swift and effective response to the cybersecurity incident in September. The team rose magnificently to this challenge, and I'm pleased to say it's now behind us, with the financial impact at the lower end of the range we gave at the time. So all in all, a positive performance with the accelerating momentum giving us greater confidence in our outlook as the year progressed. We start the new financial year with a record order book. Our market conditions continue to be favorable. In common with most global businesses, we are managing ongoing disruption from COVID-19, as well as inflationary and logistical challenges in the supply chain, and remain very vigilant of the heightened geopolitical risk, specifically the rapid escalation of events in Ukraine and Russia has created uncertainty about our operations and trading in those countries. Our overall exposure is small, with combined Ukraine and Russia net assets of around 2% of the group total, and combined revenue and profit being less than 5%. We are actively assessing the situation closely and will update further as required. But subject to the ongoing geopolitical uncertainty in 2022, we expect to deliver strong growth in constant currency revenue and profit in line with our medium-term targets. Our full-year dividend of 23.8 pence reflects our confidence in our strategy and future prospects. Climate change and the need for net zero solutions is accelerating demand for critical metals such as copper, nickel, and lithium, just at the time that longer-term supply constraints are emerging. And we have continued to invest in new technologies that are making miners smarter, more efficient, and sustainable. Looking further ahead, our mining technology focus puts us at the heart of a multi-decade growth opportunity as the global mining industry delivers more of the metals essential to the energy transition and decarbonization, but in a more efficient and sustainable way. We're excited about working in partnership with our customers to solve these challenges and capturing that growth opportunity. So we're energized about the year ahead and confident about our prospects as a high quality mining technology business with strong market positions and a clear strategy to deliver long-term sustainable growth that will benefit all our stakeholders. In closing, I'd like to once again extend my thoughts to our impacted colleagues and their families as we stand by them and support them in whatever way we can. Thank you for listening, and I look forward to updating you again as the year progresses.