ANNUAL REPORT
2023
Mining technology for a sustainable future.
Our purpose
We are here
to enable the
sustainable
and efficient
delivery of the
natural resources
essential to create
a better future
for the world.
2023 Highlights
Orders1
£2,585m
0%2
Revenue1
£2,636m
+9%2
Adjusted profit before tax1, 3
£411m
+18%
Statutory profit after tax
£229m
+7%
Total incident rate1,4
0.42
0.41 in 2022
Revenues from new solutions1,5
£154m
+48%
Employee net promoter score (eNPS)1,6
48
In the top 25% within manufacturing7,
51 in H2 2022
Greenhouse gas emissions1,8
142,213 tonnes CO2e
23% reduction in scope 1&2 emissions
since 2019
1. Continuing operations.
2. 2022 restated at 2023 average exchange rates.
3. Profit figures before adjusting items (note 2 of the Group Financial Statements).
4. Total incident rate is an industry standard indicator that measures lost time and
medical treatment injuries per 200,000 hours worked.
5. Defined as revenue from new products introduced in the last three years.
6. eNPS (employee net promoter score) is an index used to measure employee
satisfaction levels.
7. Based on Peakon’s Manufacturing sector benchmarks.
8. Market based greenhouse gas emissions. For definition, see page 57.
Strategic Report
Governance
Financial Statements
Additional Information
Contents
Strategic Report
Contents
Introducing Weir
Chair's statement
Case study - Mining technology for a sustainable future
Chief Executive Officer's strategic review
Case study - One team, delivering innovative mining solutions
Our markets
Our strategic framework
Strategic progress
Business model
Case study - Working together with our customers
Stakeholder engagement
Case study - Accelerating the path to sustainable mining
Technology for sustainable mining
Key Performance Indicators
Operating review: Minerals Division
Operating review: ESCO Division
Financial review
Sustainability introduction
Sustainability review
TCFD
GHG emissions
Sustainability and non-financial reporting
Risk management
Viability statement
Corporate Governance
Introduction from the Chair
Governance at a glance
Board of Directors
Group Executive
Our governance framework
Board activities 2023
Principal decisions made by the Board
Our culture and approach to employee engagement
Shareholder and investor engagement
Wider stakeholder engagement by the Board
Division of responsibilities
Composition, succession and effectiveness
Internal control and risk management
Nomination Committee report
Audit Committee report
Directors' remuneration report
Directors' report
Statement of Directors' responsibilities
Financial Statements
Independent Auditors’ Report to the Members of The Weir Group PLC
Consolidated Income Statement
Consolidated Statement of Comprehensive Income
Consolidated Balance Sheet
Consolidated Cash Flow Statement
Consolidated Statement of Changes in Equity
Notes to the Group Financial Statements
Company Balance Sheet
Company Statement of Changes in Equity
Notes to the Company Financial Statements
Additional Information
Subsidiary undertakings
Shareholder information
Glossary
1
2
8
10
11
15
16
18
20
22
25
26
29
30
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224
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234
The Weir Group PLC Annual Report and Financial Statements 2023
1
Helping our customers
deliver the metals and
minerals essential
for a sustainable future.
Find out more on page 10
One team, delivering
innovative mining
technology solutions.
Find out more on page 15
Helping miners move
less rock, use less energy,
use water wisely and
create less waste.
Find out more on page 25
Accelerating the path
to smart, efficient and
sustainable mining.
Find out more on page 29
Visit global.weir to find
out more about our purpose,
our people and the work
we’re doing to create a
more sustainable future.
Cautionary statement
This Annual Report contains forward-looking statements with
respect to the financial condition, operations and performance of
the Group. These statements reflect knowledge and information
available at the date of preparation of this Annual Report. By their
nature, these statements involve uncertainty since future events
and circumstances can cause results and developments to differ
materially from those anticipated. The Company undertakes no
obligation to update these forward-looking statements and nothing
in this Annual Report should be construed as a profit forecast.
Strategic Report
Governance
Financial Statements
Additional Information
Introducing Weir
Our planet’s future depends
on the transition to renewable
energy, and that transition
can only happen with the
metals and minerals our
mining customers deliver.
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Governance
Financial Statements
Additional Information
Strategic Report
Governance
Financial Statements
Additional Information
Introducing Weir
Introducing Weir
continued
Every mine is different.
Delivering innovative mining
technology solutions demands
a combination of deep customer
insight, world class engineering
and materials science, enabled
by intelligent automation.
Mining
technology for
a sustainable
future.
Strategic Report
Strategic Report
Governance
Governance
Financial Statements
Financial Statements
Additional Information
Additional Information
Introducing Weir
Introducing Weir
continued
No one serves more
No one serves more
mines than Weir.
mines than Weir.
Extraction
Extraction
Comminution
Comminution
Boosted by Synertrex® and Motion Metrics™ digital solutions
Boosted by Synertrex® and Motion Metrics™ digital solutions
our brand
our brand
ESCO®
ESCO®
our brand
our brand
ENDURON®
ENDURON®
The Weir Group PLC Annual Report and Financial Statements 2023
4
Strategic Report
Governance
Financial Statements
Additional Information
Strategic Report
Strategic Report
Governance
Governance
Financial Statements
Financial Statements
Additional Information
Additional Information
Introducing Weir
Introducing Weir
Introducing Weir
continued
continued
Working in close partnership with our
customers, we help them to move less rock,
use less energy, use water wisely and create
less waste – accelerating the path to smart,
efficient and sustainable mining.
Mill Circuit
Tailings
Boosted by Synertrex® and Motion Metrics™ digital solutions
our brands
WARMAN® CAVEX®
LINATEX®
our brand
GEHO®
The Weir Group PLC Annual Report and Financial Statements 2023
5
Strategic Report
Governance
Financial Statements
Additional Information
Introducing Weir
continued
Investment case:
Weir is a focused mining technology leader with
a compelling value creation opportunity
Over the last few years, we have completed our portfolio transformation to become a focused
mining technology leader and sold our businesses in other verticals.
We are strongly positioned for long-term sustainable growth
• Mining is expected to offer high growth
potential over the decades ahead driven
by demand for metals, such as copper,
nickel and lithium, that will enable the
global transition to net zero.
• Our ‘razor/razor blade’ business model
is highly resilient as around 80% of our
revenues come from supplying
aftermarket (AM) equipment. This is
driven by the tonnes of ore our
customers process and is largely
inelastic to mining capital expenditure
and commodity price cycles.
• Supported by our special culture of
customer intimacy and entrepreneurial
mindset, we will continue to expand our
addressable market over time through
organic growth initiatives that will
accelerate as the mining industry
embraces new technologies.
Find out more
Our markets
Business model
Our culture
See page 16
See page 22
See page 47
With unique capabilities and high barriers to entry
• We use our world class engineering,
innovation and manufacturing capability
to solve our customers’ most
difficult challenges.
• We are deeply embedded within our
customers’ operations and supply
chains, with both ‘boots on the ground’
relationships and strategic
global collaborations.
• We have a large captive installed base
of trusted mission-critical equipment,
underpinned by our intellectual property,
leading brands, customer intimacy and
vertically integrated regional operating
platform. We retain over 90% of the AM
opportunity from our installed base.
Find out more
Our technology
See page 30
Our commitments are simple and clear
Growth
Margins
Returns
Resilience
Sustainability
Outgrowing
our markets
Mid to high single digit
% organic revenue growth
through the cycle
Expanding
our margins
20% operating profit
margin in 2026
Converting earnings
into cash and returns
Providing resilience
and predictability
Delivering for people
and planet
90-100% free operating
cash conversion; focus on
growing ROCE
>7% Minerals AM revenue
CAGR since 2011
Accelerate sustainable
mining; deliver
sustainable Weir
Prioritising Total Shareholder Returns
The Weir Group PLC Annual Report and Financial Statements 2023
6
Strategic Report
Governance
Financial Statements
Additional Information
Introducing Weir
continued
Serving customers from pit to plant through two Divisions
Minerals Division
Engineering, manufacturing and servicing of
processing technology used in abrasive high
wear applications in mining and infrastructure
markets around the world.
Divisional revenue
£1,937m
Divisional adjusted operating profit1
£376m
ESCO Division
Ground engaging tools (GET), attachments,
AI and machine vision technologies that
optimise productivity for customers in global
mining and infrastructure markets.
Divisional revenue
£699m
Divisional adjusted operating profit1
£122m
% Divisional revenue from aftermarket
% Divisional revenue from aftermarket
72%
92%
Find out more
Operating review: Minerals Division
See pages 34-35
Find out more
Operating review: ESCO Division
See pages 36-37
Focused on
attractive markets
Highly resilient
through the cycle
Biased towards future-
facing commodities
73%
of revenues
from mining
applications
Mining applications
Infrastructure & other
27
73
77%
of revenues
from recurring
aftermarket
Aftermarket (AM)
Original Equipment (OE)
23
77
49%
of revenues from
copper, iron ore,
gold and battery
metals
11
3
6
8
10
24
12
8
8
10
Copper
Gold
Iron ore
Industrial
Infrastructure
Oil sands
Coal
Nickel, lithium, cobalt
Other minerals
Other
Global presence, close to our customers
We have c.12,000 colleagues in over 50 countries around the world.
Europe
1,637 colleagues
6%
of sales
31%
of sales
North America
3,291 colleagues
22%
of sales
South America
2,604 colleagues
12%
of sales
Middle East & Africa
1,420 colleagues
1. Profit figures before adjusting items (note 2 of the Group Financial Statements).
The Weir Group PLC Annual Report and Financial Statements 2023
7
Asia Pacific
1,859 colleagues
13%
of sales
Australasia
1,252 colleagues
16%
of sales
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Financial Statements
Additional Information
Chair’s statement
A compelling
opportunity to create
value for all of our
stakeholders.
" We have a great team,
committed to our
common purpose to
enable the sustainable
and efficient delivery of
the natural resources
essential to create a better
future for the world.”
Barbara Jeremiah
Chair
The Weir Group PLC Annual Report and Financial Statements 2023
8
Dear shareholder,
I am pleased to report on a year where Weir has made significant
strategic progress, executed strongly, and delivered on – and
strengthened – our commitments to stakeholders. These
achievements are testament to the dedication of all our colleagues
around the globe and I'd like to thank them for their contribution
to making 2023 another successful year.
Creating value through growth and Performance
Excellence
Weir is a great business with a compelling opportunity to create
value for all our stakeholders. Our customers see increasing demand
for the metals and minerals necessary to enable the global energy
transition and the need for the mining industry to scale up and clean
up. Our engineering technology is a critical enabler of our customers’
success in supporting this transition. In addition, through our
Performance Excellence transformation programme, we are taking
action to drive improvements in our own efficiency and
effectiveness. I am delighted with the progress achieved in the
programme's first full year and, with the foundations firmly in place,
we expect to see increasing benefits flowing through in the
year ahead.
Connecting with our stakeholders
Spending time with employees and customers is a very important
part of our Board agenda. This year we visited:
• Vancouver, Canada – meeting the team at our Motion Metrics AI
business and our senior leaders at their annual conference.
• Our facility at Venlo in the Netherlands – touring the operations
and the Sustainable Mining Technology Centre.
• Australia – a major market for us and the birthplace of our world-
leading Warman® pumps. We toured our operations and visited
customers including Fortescue Metals Group to whom we’ve
supplied innovative technology for their Iron Bridge project, and
Northern Star Resources where we toured the Kalgoorlie
Consolidated Gold Mine.
Individually or in small groups, my Board colleagues and I also
visited Weir’s operations in the US, Canada, South Africa and the
UK this year.
I also met with our major shareholders during 2023 to understand
their perspectives on our performance, governance and strategy.
It is evident from my discussions that the views of our shareholders
are well aligned with our own and I'd like to thank them for their
continued support and constructive input.
Our role in supporting engagement and shaping culture
The Board has a crucial role to play in shaping culture and setting the
tone. Safety is always our top priority, in our Board meetings and in
our virtual and in-person meetings with employees. It has been
pleasing to see the engagement across Weir in our Zero Harm
Behaviours programme, however, our safety performance is not yet
where it needs to be. The programme has laid important foundations
that we must build upon in 2024 and as a Board, we will continue our
engagement with management on safety and draw on the mining
industry experience of our Board members.
During our three site visits this year we hosted our regular 'Tell the
Board' and town hall sessions where we heard directly from
employees. Safety and business strategy remained key discussion
themes, along with inclusion, diversity and equity. The Board always
appreciates the candour of these discussions which highlight the
challenges experienced by colleagues both in the workplace and with
our customers. Raising these issues and sharing experiences is
invaluable in helping us focus on how best to create opportunities
for success and a sense of belonging for everyone at Weir.
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Additional Information
Chair’s statement
continued
Barbara and fellow Board members meet with colleagues at a 'Tell the Board'
session in Venlo, the Netherlands.
The Board and senior management on a customer site visit at Northern Star
Resources Consolidated Gold Mine in Kalgoorlie, Australia.
I’d like to again recognise the great work by our affinity groups – the
Global Weir Women's Network and the Weir Pride Alliance. Both
have developed and expanded their reach this year and my Board
colleagues and I have enjoyed and gained a great deal from our
engagements with them. We look forward to seeing these important
initiatives develop further in 2024.
Sustainability and technology at our core
Weir is a company founded on over 150 years' of engineering
expertise and which has always delivered technologies to tackle the
challenges of the time. The Weir of today is no different and the
challenge of enabling the transition to net zero is arguably one of the
most important and exciting we have ever faced. During the year, the
Board was pleased to approve a new technology strategy for the
Group, focusing our investment and innovation on sustainable mining
solutions. We have a critical role in accelerating sustainable mining as
a provider of technology-led solutions.
To support these strategic priorities, as a Board we agreed that we
would dedicate additional time and resources and announced, in
December, the formation of a new Sustainability and Technology
Committee. This new Committee will begin to meet in 2024 and
work with our management team to provide both strategic and
governance oversight in exploring the future of the mining industry
and the implications for Weir’s fully integrated business model. I am
delighted that Tracey Kerr will chair this Committee on behalf of the
Board, given her extensive experience of sustainability and
technology while working in major mining organisations.
Board changes
We have continued to refresh the skills, experience and diversity of
the Board. In November we said farewell to John Heasley, Chief
Financial Officer (CFO) who, after 15 years with Weir, left us to take
a new role as Finance Director of Anglo American plc. John has been
an outstanding member and valued colleague of the Board during his
tenure as CFO, and on behalf of the company and the Board, I would
like to thank him and wish him every success in his new role.
I am delighted that Brian Puffer will join the Board as our new CFO
from 1 March 2024. Brian is an accomplished finance leader with
over 30 years’ experience in driving commercial and financial
performance. He joins us from his current role as Chief Financial
and Risk Officer of BP plc Integrated Supply and Trading.
In December, we announced that Sir Jim McDonald will step down
at the end of our Annual General Meeting on 25 April 2024 having
served on the Board for nine years. During this time, he has been
instrumental in elevating our focus on engineering and technology as
a Board. Upon Sir Jim’s departure, Dame Nicola Brewer will succeed
him as our Senior Independent Director, and Ben Magara will
succeed Dame Nicola as designated Non-Executive Director for
employee engagement.
Since the year end, Andy Agg joined the Board as an independent
Non-Executive Director with effect from 27 February 2024. Andy
brings significant financial experience, in light of his role as CFO
of National Grid plc. We also announced that Srinivasan
Venkatakrishnan (Venkat) will be stepping down from the Board
at the end of March.
On behalf of us all, I'd like to thank Clare, Sir Jim and Venkat for their
contributions and wish each of them the very best for the future.
We also welcome Andy to the Board.
Final reflections
2023 was a good year for Weir; we expect further growth in the year
ahead and our longer-term opportunities remain compelling.
Consequently, the Board is recommending a final dividend of 20.8
pence per share which equates to a total full year dividend of 38.6
pence per share and represents an increase of 18% on the prior year.
As I look back on 2023, I remain convinced that we have a great
team of colleagues, united by the belief that the world needs the
essential natural resources our customers mine and process. Our
role is to deliver products that allow them to move less rock, use less
energy and use water wisely, and to hold ourselves to the highest
standards of performance in safety, while constantly reducing our
impact on the environment As we do this, we will use the Weir
assets – people, operations and intellect – ever more efficiently and
intelligently to deliver outstanding results for all of our stakeholders.
And I remain confident that the best is yet to come for Weir.
In October, we welcomed Penelope (Penny) Freer to the Board and
are already benefiting from her extensive investment experience
and wide-ranging leadership skills across many businesses as we
continue to execute our strategy.
Barbara Jeremiah
Chair
29 February 2024
At the end of December, Clare Chapman stepped down from the
Board after six years with us. Her leadership as Remuneration
Committee Chair has been instrumental in the adoption of The Weir
Group Share Reward Plan. Penny Freer has succeeded Clare as Chair
of the Remuneration Committee.
Find out more
Corporate Governance Report
Board of Directors
Nomination Committee report
Directors' report
The Weir Group PLC Annual Report and Financial Statements 2023
9
See page 71
See page 73
See page 91
See page 133
Strategic Report
Governance
Financial Statements
Additional Information
Helping our customers
deliver the metals
and minerals essential
for a sustainable future.
Metals such as copper play a crucial role in energy transition
and the drive towards net zero, as components at the heart
of powering renewable energy systems and electric vehicles.
As the world shifts away from fossil fuels and the demand for
critical metals increases, the mining industry is focused on delivering
more of these metals with less impact on the environment.
See how we’re innovating
solutions for the challenges
of today and the future.
Weir operates at the heart of the global mining industry – delivering
innovative solutions that increase efficiency and improve sustainability.
Visit www.global.weir/a-sustainable-tomorrow
The Weir Group PLC Annual Report and Financial Statements 2023
10
Strategic Report
Governance
Financial Statements
Additional Information
Chief Executive Officer’s strategic review
Realising our potential
as a mining
technology leader and
enabling a sustainable
future for all.
" Combined, our market
opportunity, technology-
focused strategy and
Performance Excellence
represent a compelling
value creation
opportunity, and we are
delivering on it."
Jon Stanton
Chief Executive Officer
Watch Jon's review of our 2023 peformance
Visit www.global.weir/ceo-review-2023
The Weir Group PLC Annual Report and Financial Statements 2023
11
Another strong year as a mining technology leader
2023 was a year of significant progress for Weir. We met our
commitments to stakeholders, advanced the transition to sustainable
mining for our customers and took major steps forward in delivering
our strategic agenda.
We capitalised on positive conditions in our mining markets and
executed strongly, delivering year-on-year growth in revenue and
operating profit, significantly expanding our operating margins and
meeting our cash conversion target. Throughout the year we
supported customers with essential spares and expendables to keep
their mines running, and also provided innovative new technologies
to make their operations more efficient and sustainable.
Our progress on strategy was a particular highlight with
achievements across the four pillars of People, Customer,
Technology and Performance in our We are Weir
strategic framework.
We built strong momentum in our Performance Excellence
transformation programme, realising absolute cost savings of £6m
and identifying new opportunities which enabled us to double our
previous cost saving target to £60m in absolute savings by 2026. In
parallel, we made good progress with our technology focused
growth initiatives, launching and commencing field trials of a number
of innovative new solutions, including our Cavex 2.0 technology in
Minerals and our latest generation GET system in ESCO. In addition,
the acquisition of SentianAI has expanded our digital capability and
stepped up the roll-out of our process optimisation solutions.
Sustainability remains core to our strategy. While our safety
performance was flat year-on-year, our Zero Harm Behaviours
programme gained real traction with colleagues at sites across the
globe. Achieving validation of our emissions reduction targets by the
Science Based Targets initiative (SBTi) in March and the launch of
our first avoided emissions (scope 4) study at COP28 were also
important milestones.
Our performance in 2023 is a testament to the hard work of Weir
colleagues across the globe, and I'd like to thank them for their
dedication and contribution through the year.
Going into 2024, notwithstanding complexity in the macroeconomic
and geopolitical environment, I’m confident of further progress.
Conditions in our mining markets are supportive and we are
positioned for another year of growth and margin expansion. Further
out, we have a clear strategy to capitalise on the attractive long-term
structural trends in our markets, helping our customers to deliver the
metals needed for the energy transition, and launching new
transformative technologies to accelerate the shift to sustainable
mining. In parallel, through Performance Excellence we are
optimising our operations and realising our full potential as a mining
technology leader. Combined, our market opportunity, technology
focused strategy and Performance Excellence represent a compelling
value creation opportunity, and we are delivering on it.
Read more about our strategic progress on pages 20-21.
Growth: Ore production trends driving demand for Weir
solutions
Throughout the year, activity levels in mining markets were high.
Market prices for our main commodity exposures of copper, gold and
iron ore were well above the cost curve, and our customers
capitalised by maximising ore production. Continued complexities in
the permitting and regulatory environment meant large expansion
projects remained slow to convert, so customers' capital expenditure
was largely focused on developing and improving the efficiency of
existing assets.
Strategic Report
Governance
Financial Statements
Additional Information
Chief Executive Officer’s strategic review
continued
Ore production trends, coupled with the effect of declining grades
and installed based expansion, drove demand for our aftermarket
(AM) spares and expendables. Original equipment (OE) demand was
primarily driven by orders for small brownfield and debottlenecking
projects at existing mines, with strong momentum through the year
as customers chose Weir solutions due to their sustainability and
performance benefits, coupled with our global service capability.
Across the Group, demand was particularly strong in Australasia,
with growth reflecting recent market share gains, while from a
commodity perspective, order growth was strongest in copper and
year-on-year demand decreased in both coal and the oil sands.
In infrastructure markets underlying demand was largely stable
through the year, though well below the peak levels seen in the prior
year, particularly the elevated levels seen in H1 2022.
On a constant currency basis, year-on-year Group orders were
broadly stable.
AM constant currency orders were marginally ahead of the prior year.
Growth in demand in hard rock mining and a contribution from
pricing, as expected, was partially offset by lower demand from
customers in the Canadian oil sands and ESCO’s infrastructure
customers, together with the non-repeat of Russia orders. As we go
into 2024, the impact of these offsetting factors will normalise and
we expect underlying growth in hard rock mining to be sustained.
In OE, constant currency orders were down 3% against a strong
prior year comparator, which included £33m of orders for nickel
expansion projects in H2 2022. In Minerals we converted over 85%
of our mill circuit pump trials and won market share with our latest
Cavex 2.0 cyclone technology, while in ESCO we delivered strong
growth in mining attachments as we continued to gain traction and
expand market share.
Revenue1
£2,636m
+9%2
Revenue for the Group was 9% higher on a constant currency basis.
This reflects strong execution, delivery of our record opening order
book and price realisation. The Group’s book-to-bill was 0.98.
Margins and resilience: 2023 operating margin target
exceeded
The operating environment in 2023 was stable. Relative to the prior
year, availability of raw materials and freight improved, and input
pricing steadied. While some pockets of inflation persisted,
particularly across wages and salaries during the first half, our leading
market positions and strong brands enabled us to achieve sufficient
price increases to protect our gross margins.
Adjusted operating margin1,3
17.4%
+140bps
On a constant currency basis adjusted operating profit grew 18%
year-on-year, and adjusted operating margins were 17.4%, exceeding
our 2023 target of 17%, and up 140bps on the prior year. Expansion
in operating margin reflects strong operational efficiency, the initial
benefits from Performance Excellence and a year-on-year reduction
in adverse transactional FX movements, partially offset by a
movement in Minerals revenue mix towards OE.
The Weir Group PLC Annual Report and Financial Statements 2023
12
Performance Excellence
Taking Weir from good to great
and an even better place to work
The 3 key
pillars
G
L
O
N
IO
T
A
S
M
I
I
T
Y
T
I
C
A
P
A
C
P
O
LEAN
PROCES S E S
S
I
B
A
L
E
R
V
C
E
S
B
U
S
I
N
E
S
S
Optimising
service centres
and facilities
Closer to customers
Better environments
Enhanced returns
Driving lean
philosophy
Eliminating waste
and delivering value
chain excellence
Creating
Weir Business
Services
Excellent customer
service
Less duplication and
simpler processes
Clearer career
opportunities
Upgrading our Performance Excellence targets
C A PACITY
O P T I MISATION
L EAN
P R O CESSES
L O B A L BUSINES
S E RVICES
S
G
Old target £10m
Old target £5m
Old target £15m
New target £20m
New target £20m
New target £20m
Revised cumulative phasing of benefits
£6m savings
delivered
FY23
FY24
FY25
£20m
£20m
£20m
FY26
Capacity optimisation
Lean processes
Global business services
£60m
Absolute savings
benefit in FY26
One-off cost
of £90m:
phasing biased
to initial years
Upgrade to
existing initiatives
and launch of
new initiatives
Strategic Report
Governance
Financial Statements
Additional Information
Chief Executive Officer’s strategic review
continued
In December, we announced a new medium-term operating margin
target of 20% in 2026. We expect to achieve this through operating
leverage from growth and realisation of £60m of absolute cost
savings from our Performance Excellence transformation
programme. This comprises £20m of savings from each of the three
main elements of capacity optimisation, lean processes and the
transition of our enabling functions to Weir Business Services (WBS).
The one-off cost to achieve the £60m of savings is £90m, with the
phasing of the costs biased towards the early years of the
programme.
Through the year we made good progress in delivering the initial
benefits from Performance Excellence, realising £6m of absolute
savings. This includes benefits from capacity optimisation, as we
completed projects to consolidate several Minerals manufacturing
facilities in the US and optimise our Australian service centre and
Latin American distribution footprints. In addition, a number of other
capacity optimisation and lean process projects were initiated during
the year, underpinned by our recent investments in foundational
systems and enhanced operational capability. Our transition to WBS
is also progressing well, with the detailed design phase of the project
complete and the transition of certain regional services underway.
In the period, an exceptional charge of £29m was recognised relating
to Performance Excellence, and the cash outflow for the programme
was £14m.
Return on capital employed1
18.0%
+280bps
in
Returns: Significant growth
employed, with balance sheet flexibility
Reflecting our focus on execution, return on capital employed
(ROCE) increased 280bps on the prior year to 18.0%, as we grew
revenue, expanded our margins and delivered strong cash
generation.
return on capital
Free operating cash conversion for the year was 85%, firmly within
our 2023 target range of 80% to 90%, while the efficiency of our
mining focused platform enabled us to reduce working capital as a
percentage of sales to 21.3% (2022: 23.7%).
Net debt to EBITDA at the end of December was 1.1x, giving the
Group considerable resilience and flexibility to deploy capital to drive
shareholder value.
Full year dividend
38.6p
+18%
Reflecting high levels of confidence in our strategy and future
prospects, the Board is recommending a final dividend of 20.8 pence
per share. In line with our policy to pay out 33% of adjusted earnings
per share (EPS), this equates to a total full year dividend of 38.6
pence per share and represents an increase of 18% on the prior year.
The Weir Group PLC Annual Report and Financial Statements 2023
13
Safety and sustainability: First ever avoided emissions
study for a mining use case
The safety of our 12,000 colleagues is my top priority, and for
everyone in Weir. Our goal is to make Weir a zero harm workplace
and so our total incident rate4 (TIR) of 0.42 (2022: 0.41) was
disappointing relative to our ambition. During the year we continued
the roll out of our Zero Harm Behaviours programme and, to date,
over 8,000 colleagues have completed the first phase of the training.
I’ve visited several of our sites this year and in every case, the
emphasis and ownership for safety came across very strongly. I am
encouraged that as we put the learnings from the programme into
action in 2024, we will drive forward towards achieving our ambition
of zero harm operations.
Total incident rate1,4
0.42
2022: 0.41
Beyond physical safety, we have increased our focus on supporting
health and wellbeing, including mental health. Our commitment to
workplace mental health was recognised in the CCLA Corporate
Mental Health Benchmark released in June, with Weir identified as
the biggest improver on performance and disclosure.
We have a very special culture at Weir and inclusion, diversity and
equity (ID&E) is an important part of that. We took positive steps
forward on gender diversity this year, growing the percentage of our
employees who are female across all levels of the organisation.
Our global affinity groups have continued to drive the debate on key
topics and it has been great to see that they have increased their
reach and impact.
Listening to our colleagues and acting on their feedback provides
valuable insight to help us keep our culture on track. In our most
recent all-employee survey, high levels of employee participation
were maintained with 87% of colleagues taking part and sharing
nearly 63,000 comments. Our employee net promoter score
(eNPS)1,5 – a measure of employee engagement – of 48 puts us in
the top 25% within manufacturing6 and demonstrates a strong
improvement from our eNPS score of 18 in our first survey in 2019.
We also made good progress on sustainability. In the first quarter our
scope 1, 2 & 3 emissions reduction targets were validated by SBTi,
and in the year we delivered a further 6% reduction in our scope 1&2
emissions7, meaning our cumulative reduction relative to our 2019
benchmark is now 23%. Our progress in this area continues to be
externally recognised, as we maintained our place on the prestigious
CDP A List for leadership in corporate transparency and performance
on climate change.
Furthermore, we published the findings from our first ever avoided
emissions study. The results, which have been independently
verified, show that by choosing our Redefined Mill Circuit
incorporating Enduron® High Pressure Grinding Rolls technology,
instead of a traditional mill circuit which uses tumbling mill
technology, energy consumption is reduced by over 40% and CO2
emissions are more than halved per tonne of ore. The study, which
we announced at the COP28 summit in December, is the first of its
kind for a mining use case and is receiving global interest from a
range of stakeholders, including customers, governmental bodies
and the finance sector.
In line with best practice, we also updated our double materiality
assessment, and key findings have been incorporated into a
refreshed sustainability strategy which we launched in early 2024.
Strategic Report
Governance
Financial Statements
Additional Information
Chief Executive Officer’s strategic review
continued
`
Jon with our two Divisional Presidents, Sean Fitzgerald (L) and Andrew
Neilson (R) at our Capital Markets Event in London in December 2023.
Jon engaging with a colleague in Alrode, South Africa during a visit to the
country in August 2023.
Transformative technology solutions
The findings of our avoided emissions study come at an important
time. Metals, such as copper, nickel and lithium, are critical elements
of the technologies that will power a low carbon future and it is
widely accepted that a substantial increase in the production of these
metals is needed for the transition to net zero. In response, the
mining industry is actively seeking to adopt new technologies which
extract and process those metals in more energy efficient and
sustainable ways, alongside increasing the use of renewable power.
In my discussions with our customers, it is clear they are looking for
more opportunities to work with technology partners like Weir to
drive innovation and transformational change in the way minerals
are extracted and processed.
Through our technology strategy, we are pivoting our engineering
expertise and R&D investment to tackle these challenges with our
customers – helping them to move less rock, use less energy, use
water wisely and create less waste. We are growing our capability in
digital and AI to add intelligent automation to our solutions, boosting
the productivity and sustainability performance even further. Our
pipeline of short, medium and long-term R&D projects will continue
to feed technology-led growth initiatives in our divisions that will
accelerate the path to smart, efficient, sustainable mining.
Outlook
Turning now to the outlook. We begin 2024 with a strong order book
and positive ore production trends in our mining markets. These
trends, coupled with the impact of declining grades and installed
base expansion, are driving increased demand for our AM spares and
expendables. We are also seeing good momentum in demand for our
OE solutions, as customers focus on improving the efficiency and
sustainability of existing assets.
In 2024, this continued favourable backdrop in mining, together with
softer year-on-year order comparatives in oil sands and infrastructure,
underpins our confidence in delivering growth in constant currency
revenue, profit and operating margins. Benefits from Performance
Excellence will support further margin expansion, and we expect free
operating cash conversion of between 90% and 100%.
Further out, the long-term value creation opportunity for Weir is
compelling. The fundamentals for our business are highly attractive,
underpinned by long-term structural growth trends in our mining
markets, and our technology strategy which is focused on enabling
sustainable mining. In addition, the benefits of Performance
Excellence will drive further margin expansion and underpin our 2026
operating margin target of 20%, while our strong cash generation
and balance sheet give us optionality to allocate capital to prioritise
growth in total shareholder returns.
Mining technology for a sustainable future
So, to conclude, we’ve executed well in 2023 and I am excited and
confident about the future for Weir. The world needs more transition
metals to achieve net zero, but the mining industry needs to extract
these using significantly less energy and water, and Weir’s
technology and people are at the heart of making this happen.
We have an excellent team and a world class business, and we are
delivering on the compelling value creation opportunity we set out
as a focused mining technology company. Our unique capabilities
are enabling us to capitalise on the structural growth in demand
for critical metals and the transition to more sustainable mining.
In parallel, through Performance Excellence we are optimising our
operations and driving efficiencies.
All of which leaves us positioned to be a stand-out performer in our
sector and for all our stakeholders in the years to come – moving
ahead to now realise our full potential as a focused mining
technology leader – and enabling a sustainable future for all.
Jon Stanton
Chief Executive Officer
29 February 2024
Find out more
Our markets
Our strategic framework
Strategic progress
Financial review
Technology for sustainable mining
Sustainability introduction
See page 16
See page 18
See page 20
See page 38
See page 30
See page 42
1. Continuing operations.
2. 2022 restated at 2023 average exchange rates.
3. Profit figures before adjusting items (note 2 of the Group Financial Statements).
4. Total incident rate is an industry standard indicator that measures lost time and medical
treatment injuries per 200,000 hours worked.
5. eNPS (employee net promoter score) is an index used to measure employee satisfaction
levels.
6. Based on Peakon’s Manufacturing sector benchmarks.
7. Market based greenhouse gas emissions. For definition, see page 57.
The Weir Group PLC Annual Report and Financial Statements 2023
14
Strategic Report
Governance
Financial Statements
Additional Information
One team, delivering
innovative mining
technology solutions,
one mine at a time.
Working in close partnerships with mining customers
across every continent we know that every mine is different.
Climate conditions, geographical location, rock formation,
water availability and a host of other factors all influence
the efficiency and sustainability of an individual mine.
Our engineers, digital specialists and other experts
bring unique insights to mining challenges to design and
implement the most effective solutions, day-in, day-out,
wherever they are in the world.
The Weir Group PLC Annual Report and Financial Statements 2023
15
See how we’re
innovating new solutions
to solve our customers’
biggest challenges.
Visit www.global.weir/innovation
Strategic Report
Governance
Financial Statements
Additional Information
Strategic Report
Governance
Financial Statements
Additional Information
Our markets
Our markets
continued
The long-term trends in our
markets are highly attractive.
The world needs to significantly increase the production of critical
metals to enable the transition to net zero. In parallel, our customers
must adopt new technologies to extract and process those metals
in a more sustainable way.
Combined, these represent a compelling growth opportunity for
Weir; one we are well placed to capitalise on.
Outlook for our core commodities
There are strong end market growth drivers across Weir’s main
commodity exposures of copper, iron ore and gold. Our exposures
are set out in the pie chart on page 7.
Copper is a key component of many technologies, particularly those
that will enable electrification and the transition to net zero. As such
the outlook for copper demand is particularly strong, and is
accelerating, as outlined in the section below.
The outlook for core iron ore demand is also solid, driven by
population demographics. Furthermore, the increasing shift towards
the more sustainable production of steel (so called blue or green
steel, manufactured using hydrogen) will require higher grade iron
ore. These higher grades require more processing and are present
in areas such as Brazil and the Pilbara in Western Australia – both
of which are locations where Weir has a strong presence today.
Gold continues to be an investment safe-haven and central banks
continue to grow their reserves. Long-term demand is also
underpinned by GDP growth, and increasing wealth, particularly
in developing economies.
Drivers of demand are also strong for other commodities, such as
high grade mineral sands used in the growing technology sector,
and phosphate and potash used in the fertilisers that will be needed
to support the ever-growing global population.
With a global shift away from fossil fuels, new project activity and
capital expenditure in the oil sands market is expected to reduce.
During the transition, we expect to continue to support customers
with high quality spare parts that enable them to operate existing
assets more efficiently and sustainably. Although we expect demand
from oil sands to reduce over the longer-term, this is anticipated to
be offset as a result of the strong market drivers for our other core
commodities as outlined above.
For Weir: Strong demand for our core commodities will incentivise
our customers to maximise ore production that, in turn, will drive
strong demand for our differentiated mining equipment, spares
and expendables.
Climate change action accelerating demand for key
electrification metals
Climate change remains high on political, industry and personal
agendas. 92% of the world’s GDP is now covered by a net zero
emissions target3 and there was consensus at the most recent
COP28 summit to transition away from fossil fuel use in
energy systems.
According to the Intergovernmental Panel on Climate Change
(IPCC)4, to limit warming to 1.5°C above pre-industrial levels, global
greenhouse gas emissions will need to decline by around 45% from
2010 levels by 2030 and continue to net zero by 2050.
Therefore, the world needs to move even more quickly to take action
to implement, at scale, technologies to decarbonise and electrify
energy supply and transportation. Doing so will create significant
demand for metals, such as copper, lithium and nickel, that are
essential in these technologies.
An electric vehicle, for example, requires around 4 times the amount
of copper as a conventional car. More copper will also be needed as
the world transitions to decarbonised infrastructure applications and
electrical grid expansion. With this backdrop, estimates suggest that
copper supply will need to more than double in the decades ahead1.
There is also strong projected demand for other battery electrification
metals, such as lithium, cobalt and nickel. Lithium demand, for
example, is forecast to rise by 20% annually to 20305.
This accelerating demand for electrification metals will require
major investment in both new mines and also in capacity expansions,
as outlined in the chart on page 17. As the chart shows, there have
already been announcements relating to around 45% of the required
additional investment, and we are starting to see some policy
response from governments, in the form of critical minerals policies.
However, more support is needed to put permits and finance in
place to deliver the vast quantities of metals required for the
energy transition.
For Weir: We have strong exposure to these ‘future facing’
commodities, with the majority of the world’s copper today being
processed using Weir technology. The significant demand for battery
and electrification metals creates a strong tailwind for Weir in the
years ahead, accelerating growth in these parts of our business,
which over time, will make them a larger overall component of our
mix. We continue to invest in differentiated technology solutions
to help customers improve productivity and reduce their
environmental footprint.
Declining ore grades, ore body development and
ore extraction
To meet projected demand, miners are increasing their focus on
accessing ore reserves at existing and future mines. However,
accessing higher quality deposits is getting harder. While evidence
suggests that there are new exploitable reserves for key
commodities, in reality, they are in environments that are deeper and
more difficult to extract from. Consequently, greater quantities of
rock must be excavated and processed to extract the same quantity
of ore – using energy and water, and causing processing equipment
to wear. The result is more waste rock per unit of ore and increased
CO2 emissions.
For Weir: Increased wear of processing equipment drives demand
for our aftermarket spares and expendables. In addition, lower grade
ore processing supports the use of our sustainable solutions to
deliver efficiency and environmental benefits. Alongside these,
we are also developing transformative AI based ore sorting and
characterisation technologies. They have the potential to enable
miners to select and then move only ore-containing rocks.
Key trends
Copper
>100%
Iron
c.12x
Net zero
92%
increase in production required
by 20501
anticipated growth in demand
for green steel by 20302
of the world's GDP is covered
by a net zero target3
2023 market review
Mining markets favourable
Ore production trends in mining continued to be strong,
despite complexities in the macroeconomic and geopolitical
environment. Throughout the year, activity levels in mining
markets were high and market prices for our main commodity
exposures of copper, gold and iron ore were well above our
customers' cost of production.
Miners maximised production from existing assets
Continued complexities in the permitting and regulatory
environment meant large expansion projects remained slow to
convert, so customers' capital expenditure was largely focused
on developing and improving the productivity of existing assets
– debottlenecking and driving efficiency in existing processes.
Our customers' focus on maximising ore production also meant
they ran existing equipment harder and developed more
complex and lower grade ore bodies.
Demand for original equipment was primarily driven by orders
for small brownfield and debottlenecking projects at existing
mines, with strong momentum through the year as customers
chose Weir solutions due to their sustainability and performance
benefits, coupled with our global service capability.
Demand for aftermarket spares and expendables was driven by
ore production trends, coupled with the effect of declining
grades and installed base expansion.
Across the Group, demand was particularly strong in
Australasia, with growth reflecting recent market share gains,
while from a commodity perspective, order growth was
A stable operating environment
The operating environment in 2023 was stable. Relative to the
prior year, availability of raw materials and freight improved,
and input pricing steadied. While some pockets of inflation
persisted, particularly across wages and salaries during the first
half of the year, our leading market positions and strong brands
enabled us to achieve sufficient price increases to protect our
gross margins.
Other markets
In infrastructure markets, underlying demand was largely stable
through the year, though well below the peak levels seen in
the prior year, particularly the elevated levels seen in H1 2022.
2024 outlook
We begin 2024 with a strong order book and positive ore
production trends in our mining markets. These trends,
coupled with the impact of declining ore grades and installed
base expansion, are driving increased demand for our
aftermarket spares and expendables. We are also seeing good
momentum in demand for our original equipment solutions,
as customers focus on improving the efficiency and
sustainability of existing assets.
Mining processes today use vast amounts of energy and water, and
strongest in copper and year-on-year demand decreased in both
create a lot of waste. So for the industry to have the environmental
coal and the oil sands.
More sustainable mining needed
In parallel with production growth, it is essential that the mining
industry adopts more sustainable extraction and processing
techniques in order to secure the social licence it needs to meet
anticipated demand.
and social licence to operate and secure permits for new mines,
more sustainable mining is needed.
In extraction, typical ore grades in a new copper mine are around
1%6, so 99% of rock that is moved and processed ends up as waste,
consuming huge amounts of energy and water.
In comminution, the process of making small particles out of large
rocks, the mining industry consumes a staggering 3% of global
electricity each year7.
In the mill circuit, the processes by which material is graded and
classified are traditionally very imprecise and lack dynamic control.
As a result, there is a high degree of recirculating load, yields are held
back and cost per tonne elevated, with scope for improvement.
The tailings produced in mining represents the biggest waste stream
on the planet. Close to 13 billion cubic metres of tailings are
produced each year8 and must be transported, processed and stored.
For Weir: There is a huge imperative for the mining industry to scale
up and clean up if it is to deliver the resources we need to stem
global warming. We are engineering new technologies to support the
industry’s reputation, working with our customers to create smart,
efficient and sustainable solutions for their biggest challenges.
This includes investment in new AI technology and the use of digital
and data. These technologies will play a key role in supporting miners
in executing their sustainability roadmaps, providing greater visibility
across asset performance and operations, and better monitoring
and optimisation of energy and water consumption.
1.
IEA, World Bank Minerals for Climate Action report.
2. McKinsey, The Resilience of Steel.
3. https://zerotracker.net/
4. https://www.ipcc.ch/sr15/
5. https://www.mckinsey.com/industries/metals-and-mining/our-insights/australias-potential-
in-the-lithium-market
6. https://investingnews.com/daily/resource-investing/base-metals-investing/copper-
investing/types-copper-deposits-world/
7. https://www.ceecthefuture.org/resources/mining-energy-consumption-2021
8. The Future of Tailings report; https://promo.mining-journal.com/future-of-tailings-2023/
The Weir Group PLC Annual Report and Financial Statements 2023
16
The Weir Group PLC Annual Report and Financial Statements 2023
17
Strategic Report
Governance
Financial Statements
Additional Information
Our markets
continued
Additional investment required
Required investment to reach net zero* ($bn)
2023 market review
Mining markets favourable
Ore production trends in mining continued to be strong,
despite complexities in the macroeconomic and geopolitical
environment. Throughout the year, activity levels in mining
markets were high and market prices for our main commodity
exposures of copper, gold and iron ore were well above our
customers' cost of production.
Miners maximised production from existing assets
Continued complexities in the permitting and regulatory
environment meant large expansion projects remained slow to
convert, so customers' capital expenditure was largely focused
on developing and improving the productivity of existing assets
– debottlenecking and driving efficiency in existing processes.
Our customers' focus on maximising ore production also meant
they ran existing equipment harder and developed more
complex and lower grade ore bodies.
Demand for original equipment was primarily driven by orders
for small brownfield and debottlenecking projects at existing
mines, with strong momentum through the year as customers
chose Weir solutions due to their sustainability and performance
benefits, coupled with our global service capability.
Demand for aftermarket spares and expendables was driven by
ore production trends, coupled with the effect of declining
grades and installed base expansion.
Across the Group, demand was particularly strong in
Australasia, with growth reflecting recent market share gains,
while from a commodity perspective, order growth was
strongest in copper and year-on-year demand decreased in both
coal and the oil sands.
A stable operating environment
The operating environment in 2023 was stable. Relative to the
prior year, availability of raw materials and freight improved,
and input pricing steadied. While some pockets of inflation
persisted, particularly across wages and salaries during the first
half of the year, our leading market positions and strong brands
enabled us to achieve sufficient price increases to protect our
gross margins.
Other markets
In infrastructure markets, underlying demand was largely stable
through the year, though well below the peak levels seen in
the prior year, particularly the elevated levels seen in H1 2022.
2024 outlook
We begin 2024 with a strong order book and positive ore
production trends in our mining markets. These trends,
coupled with the impact of declining ore grades and installed
base expansion, are driving increased demand for our
aftermarket spares and expendables. We are also seeing good
momentum in demand for our original equipment solutions,
as customers focus on improving the efficiency and
sustainability of existing assets.
c.$180bn
announced
Investment announced
Investment required
Lithium
Nickel
Copper
c.$400bn
Copper
Nickel
c.$220bn
unannounced
Lithium
*
IEA, World Bank Minerals for Climate Action report, MineSpans - McKinsey
Basic Materials Insights
More sustainable mining needed
In parallel with production growth, it is essential that the mining
industry adopts more sustainable extraction and processing
techniques in order to secure the social licence it needs to meet
anticipated demand.
Mining processes today use vast amounts of energy and water, and
create a lot of waste. So for the industry to have the environmental
and social licence to operate and secure permits for new mines,
more sustainable mining is needed.
In extraction, typical ore grades in a new copper mine are around
1%6, so 99% of rock that is moved and processed ends up as waste,
consuming huge amounts of energy and water.
In comminution, the process of making small particles out of large
rocks, the mining industry consumes a staggering 3% of global
electricity each year7.
In the mill circuit, the processes by which material is graded and
classified are traditionally very imprecise and lack dynamic control.
As a result, there is a high degree of recirculating load, yields are held
back and cost per tonne elevated, with scope for improvement.
The tailings produced in mining represents the biggest waste stream
on the planet. Close to 13 billion cubic metres of tailings are
produced each year8 and must be transported, processed and stored.
For Weir: There is a huge imperative for the mining industry to scale
up and clean up if it is to deliver the resources we need to stem
global warming. We are engineering new technologies to support the
industry’s reputation, working with our customers to create smart,
efficient and sustainable solutions for their biggest challenges.
This includes investment in new AI technology and the use of digital
and data. These technologies will play a key role in supporting miners
in executing their sustainability roadmaps, providing greater visibility
across asset performance and operations, and better monitoring
and optimisation of energy and water consumption.
1.
IEA, World Bank Minerals for Climate Action report.
2. McKinsey, The Resilience of Steel.
3. https://zerotracker.net/
4. https://www.ipcc.ch/sr15/
5. https://www.mckinsey.com/industries/metals-and-mining/our-insights/australias-potential-
in-the-lithium-market
6. https://investingnews.com/daily/resource-investing/base-metals-investing/copper-
investing/types-copper-deposits-world/
7. https://www.ceecthefuture.org/resources/mining-energy-consumption-2021
8. The Future of Tailings report; https://promo.mining-journal.com/future-of-tailings-2023/
The Weir Group PLC Annual Report and Financial Statements 2023
17
Strategic Report
Governance
Financial Statements
Additional Information
Our strategic framework
Mining technology
for a sustainable future.
Our We are Weir strategy for sustainable
mining sets out how we deliver excellent
outcomes for all our stakeholders.
We are a global family.
We are proud of our
unique blend of talent,
technology and culture.
We are here to inspire
our people to do the
best work of their lives.
People
Purpose
We are here to enable the sustainable
and efficient delivery of the natural
resources essential to create a better
future for the world.
We will be the most
admired business
in our sector.
Working in partnership,
we deliver distinctive
solutions and
compelling value.
C
u
s
t
o
m
e
r
U
se
w
y
g
r
e
n
s s e
U s e le
C
h
a
m
p
i
o
n
z
e
r
o
h
a
r
m
g t h e n
d atio n s
n
u
Accelerate
sustainable mining
e
C r
a
t
e
r
w
i
s
e
l
y
e
t
s
a
a t e less w
t u r e
r c u l
u
urture o
N
Deliver
sustainable Weir
R
e
d
u
c
e
o
ur footprint
n
S tr e
u r f o
o
P
e
r
f
o
r
m
a
n
ce
We deliver excellence
for all of our stakeholders,
through strong leadership,
performance culture
and rigorous standards
of governance.
T e c h n ology
We shape the
next generation of
smart, efficient and
sustainable solutions
with cutting-edge
science and our
tradition of innovation.
Our We are Weir strategy centres around four strategic pillars -
People, Customer, Technology and Performance - with our purpose
and our sustainability strategy at its core.
Find out more
Our strategic progress
Our sustainability strategy
See page 20
See page 42
It also sets out our values and defines our culture, guiding how we
behave and how we work.
In addition, it incorporates our business model that drives sustainable
compounding growth.
All of which help us deliver excellent outcomes for our stakeholders.
The Weir Group PLC Annual Report and Financial Statements 2023
18
Strategic Report
Governance
Financial Statements
Additional Information
Our strategic framework
continued
Our ways of working
Our values
We believe in...
Thinking safety first
Delighting your customer
Respecting each other
Doing the right thing
Aiming high
Our culture
We work this way...
We always seek to improve
and innovate
We care for, challenge and
encourage each other
We’re passionately,
authentically ourselves
We work together to enhance
our global communities
We speak up and take ownership
for our shared success
We can’t wait
Our promises
We commit to...
Our business model
We deliver...
n
g i n e e r e d
u i p m e n t
Hig hly e
e q
a
f
t
e
r
I
n
m
t
e
a
n
r
s
k
i
v
e
t
e
c
a
r
e
C
o
g
l
o
m
b
p
r
e
a
l
h
s
u
p
e
n
s
i
v
e
p
o
r
t
c ritical
s
n
Mi s s i o n -
s o l u t i o
This aftermarket-focused model delivers sustainable
compounding growth.
Find out more
Our business model
Our promises
See page 22
See page 6
Growth
Margins
Returns
Outgrowing our markets through the cycle
Expanding our margins to 20% operating profit margin in 2026
Converting earnings into cash and returns
Resilience
Providing resilience and predictability
Sustainability
Delivering for people and planet
The Weir Group PLC Annual Report and Financial Statements 2023
19
Strategic Report
Governance
Financial Statements
Additional Information
Strategic progress
People
Customer
Our strategic initiatives
• Deliver on zero harm for our people and the environment
Our strategic initiatives
• Outgrow our markets through voice-of-customer led initiatives
• Accelerate our purpose-driven culture and lead in inclusion,
• Solve our customers’ biggest smart, efficient and
diversity and equity
sustainable challenges
• Create talent and capabilities for the future
• Show leadership in our industries’ pathway to net zero
Our 2023 performance
Deliver on zero harm for our people and the environment
We maintained a world class safety record this year. However,
the number of recordable injuries increased and our total incident
rate (TIR) was 0.42 (2022: 0.41). We continue to strive for a zero
harm workplace and empower our employees to focus on safe
behaviours through our Zero Harm Behaviours Framework.
We were recognised by CCLA Investment Management for making
the biggest improvement amongst benchmarked companies in
managing workplace mental health from 2022 to 2023.
Accelerate our purpose-driven culture and lead
in inclusion, diversity and equity
In August, we ran our eighth global employee survey with excellent
participation levels at 87%. Our employee Net Promoter Score
(eNPS) is in the top quartile of Peakon’s Manufacturing benchmark.
We used insights to help improve our female employee
experiences and retention. Overall, the number of women at Weir
has increased to 19% this year (2022: 17%).
Our employee-led affinity groups have been highly active, nurturing
an environment where all employees feel that Weir is a great place
to work and belong. We expanded our Global Weir Women’s
Network with five new chapters and our Weir Pride Alliance made
good progress raising awareness and creating a welcoming
environment for our LGBTQ+ employees.
Create talent and capabilities for the future
We continued to build leadership capability at all levels, supporting
a culture of learning and personal growth, and maximising talent
development. We continued building capabilities for the future
through partnerships with universities, industry associations and
science and engineering outreach programmes.
Our 2023 performance
Outgrow our markets through voice-of-customer
led initiatives
We benefited from favourable mining markets and commodity
prices which resulted in increased market penetration in key
geographies and additional demand for our centrifugal pumps in
particular. We will continue to work with our customers to develop
transformative solutions for more sustainable mining and leverage
key reference installations like Fortescue Metals Group's Iron
Bridge mine in Western Australia to demonstrate the cost and
sustainability benefits of our comminution solutions and redefined
mill circuit.
Solve our customers’ biggest smart, efficient and
sustainable challenges
We have continued to work with strategic partners, including Eriez
and STM Minerals to mature our customer value proposition. These
relationships have helped us develop alternative flowsheets that
use less energy, use water wisely and create less waste during
minerals processing.
Show leadership in our industries’ pathway to net zero
We published a pioneering study on avoided emissions that
highlights a significant opportunity to reduce energy use and
emissions in comminution. The study is the first to use the World
Business Council for Sustainable Development's (WBCSD) Avoided
Emissions Guidance to study mining processes and the avoided
emissions results have been independently assured by SLR
Consulting Limited. We shared the details of the study at COP28.
Our 2024 strategic measures
• Retain our talent
• Succession planning
Our 2024 strategic measures
• Execute our strategic growth initiatives
• Capture value from new strategic alliances
• Maintain our engagement score in the top quartile of Peakon’s
• Position Weir as a mining technology solutions partner
Manufacturing benchmark
Our 2024 ESG measures
• Improve our safety TIR
• Improve our female gender diversity
Our 2024 ESG measures
• Customer avoided emissions
• Customer water optimisation
• Improve our CCLA corporate mental health benchmark score
• Customer waste impact
Find out more
Key Performance Indicators
Sustainability - Champion zero harm
Sustainability - Nurture our culture
Directors’ Remuneration Report
See page 32
See page 46
See page 47
Find out more
Key Performance Indicators
Sustainability – Accelerate sustainable mining
Our emissions strategy
See page 109
Directors’ Remuneration Report
See page 32
See page 48
See page 53
See page 109
The Weir Group PLC Annual Report and Financial Statements 2023
20
Strategic Report
Governance
Financial Statements
Additional Information
Strategic progress
continued
Technology
Performance
Our strategic initiatives
• Invest in innovating transformational solutions
Our strategic initiatives
• Drive clean, lean and agile operations and supply chain
• Digitally enable everything we do
• Deliver high quality, efficient back office functions
• Create new business and business models from data & insights
• Expand margins and deliver strong cash conversion
Our 2023 performance
Invest in innovating transformational solutions
Our technology strategy has ensured that our technology
development, R&D and engineering resources are prioritised in line
with our customers’ sustainability challenges – to move less rock,
use less energy, use water wisely and create less waste. Revenue
from new products increased and we continued to collaborate with
customers around the world on transformative flowsheets to make
mining more sustainable. R&D investment in the year of £47.3m
(2022: £48.1m) was 1.8% (2022: 1.9%) of revenues.
Digitally enable everything we do
We continued bringing our long-term digital vision to life.
We invested in Synertrex®, our proprietary digital platform that
provides customers with real-time data on the performance of their
Weir equipment, resulting in a strong order pipeline and more
than 60 sites now Synertrex® connected. In November we
acquired SentianAI, an innovative developer of cloud-based AI
solutions that optimise performance in minerals processing.
The technology bridges to our Synertrex® platform, providing
intelligent process optimisation, and accelerates our technology
roadmap and digital capability.
Create new business and business models from
data and insights
Our combined ESCO/Motion Metrics offer continues to deliver
significant safety and efficiency benefits for customers. ESCO’s
global sales coverage has driven Motion Metrics adoption and
opened doors to non-ESCO customers, increasing our share of
wallet and expanding our presence. Our field trials are proving the
value of our vision-based sensing technology, underpinned by AI,
including in other applications in the mine, such as ore sorting and
characterisation. These have the potential to radically improve the
sustainability footprint of mining.
Our 2023 performance
Drive clean, lean and agile operations and supply chain
We committed to ambitious emissions reduction targets in 2022 for
scopes 1, 2 & 3 and these were approved by the Science Based
Targets initiative (SBTi) in March 2023. We continued to drive down
CO2e emissions across our facilities, achieving a cumulative 23%
absolute reduction in our scope 1&2 market-based emissions since
2019, keeping us on track to achieve our goal of a 30% reduction
by 2030, versus our 2019 baseline.
Our Performance Excellence programme has accelerated our lean
journey - our continuous improvement approach to optimise
processes and reduce waste throughout our operations. It has
delivered efficiency gains and absolute savings of £6m this year.
We have completed projects to consolidate several North American
manufacturing facilities in Minerals . We have also optimised our
Australian service centre and Latin American distribution footprints.
Deliver high quality, efficient back office functions
As part of our Performance Excellence programme, we started the
transition to global shared business services – Weir Business
Services (WBS) – across our major functions. The detailed design
phase of the project is complete. The overall shape of the
transformation has been announced internally, and the first regional
transition commenced in Q1 2024.
Expand margins and deliver strong cash conversion
On a constant currency basis adjusted operating profit grew 18%
year-on-year, and adjusted operating margins were 17.4%,
exceeding our 2023 target of 17%, and up 140bps. Free operating
cash conversion for the year was 85%, firmly within our 2023
target range of 80% to 90%, while the efficiency of our mining
focused platform enabled us to reduce working capital as a
percentage of sales to 21.3% (2022: 23.7%).
Our 2024 strategic measures
• Revenue from new products
• Digitise our current business model
Our 2024 strategic measures
• Improve our lean processes
• Optimise our capacity
• Execute our Enterprise Technology Roadmap to plan
• Functional transformation, including Weir Business Services
Our 2024 ESG measures
• Progress our priority R&D projects
Find out more
Key Performance Indicators
Technology for sustainable mining
Sustainability – Accelerate sustainable mining
Directors’ Remuneration Report
Our 2024 ESG measures
• Reduce scope 1&2 CO2e vs 2019 base aligned to SBTi
• Develop and implement ESG data assurance roadmap
• Further integrate climate risk/opportunity in strategic planning
See page 32
See page 30
See page 48
Find out more
Key Performance Indicators
Performance Excellence
Sustainability – Reduce our footprint
See page 109
Financial review
Directors’ Remuneration Report
See page 32
See page 12
See page 47
See page 38
See page 109
Detailed results for the 2023 strategic measures and ESG measures are shown in the Directors’ Remuneration Report on pages 124-125. Further details of the target priorities for 2024 are
set out in the Directors’ Remuneration Report on page 115. Where not commercially sensitive to do so, we have provided prospective disclosure of the 2024 underlying targets. The result of
performance against all targets for all strategic and ESG measures will be disclosed in next year’s report.
The Weir Group PLC Annual Report and Financial Statements 2023
21
Strategic Report
Governance
Financial Statements
Additional Information
Business model
Our differentiated, aftermarket-
focused business model drives
sustainable compounding growth.
In mining, downtime is the enemy of our customers and if unplanned,
can cost them millions of dollars per day in lost production.
At the same time, the mining process is highly abrasive, so equipment
inevitably wears out, sometimes within a matter of weeks.
Customers therefore look for the premium solution – the
one that is the most reliable and has the longest wear life, thereby
minimising downtime – a solution that delivers the lowest total cost
of ownership.
This is Weir’s differentiator.
• We bring world class engineering, innovation and manufacturing
capability to deliver highly engineered original equipment and
aftermarket products that have the longest wear life.
• We are deeply embedded within our customers’ operations and
supply chains with local day-to-day relationships increasingly
complemented by strategic global collaboration.
• Our intellectual property, leading brands, customer focus and
vertically integrated manufacturing base means we benefit from a
large captive installed base of trusted mission-critical equipment.
Consequently, Weir benefits from there being a significant barrier to
entry for others, as demonstrated by the fact that we capture more
than 90% of our global aftermarket opportunity.
Our high capture rate supports our aftermarket focused business
model – with each piece of original equipment (OE) generating, on
average across the business, 30% of its original value in aftermarket
(AM) spares revenue every year, driven by non-discretionary spend
on aftermarket products that are essential to keeping ore
production going.
So our business model is inherently resilient, driving sustainable
compounding growth for Weir and differentiating us from our peers.
Our culture
We always seek to improve and
innovate and have a tradition
where we care for, challenge
and encourage each other.
We are passionately,
authentically ourselves and
work together to enhance our
global communities. We speak up
and take ownership for our
shared successes and can’t wait
for what the future brings.
Our purpose
To enable the sustainable and
efficient delivery of the natural
resources essential to create a
better future for the world.
Our unique strengths
Core expertise in materials, engineering and data
Our engineers use their deep understanding of materials
science, engineering and digital technology to create smart,
efficient and sustainable solutions for our customers’
biggest problems.
Our unique culture
Weir is a special place to work. People are inspired by our
purpose and proud of what we deliver. A sense of
belonging and the ability to do meaningful work are
important so our people around the world are inspired to do
the best work of their lives.
Integrated manufacturing and service facilities
Our vertically integrated supply chain and network of
foundries, manufacturing operations and service centres
give our customers certainty of supply and ensure we keep
our intellectual property in-house.
Unmatched customer focus
We have built a customer service network that is second to
none. We have people on the ground where and when our
customers need them. Our customers’ priorities are our
priorities and we provide a reliable and rapid response.
World-leading brands
Our product brands are synonymous with performance,
quality and reliability. We draw on decades of technology
investment to develop transformational solutions today and
for the future.
Financial strength
Through continued careful management, we are focused on
maintaining a strong and resilient balance sheet to support
future growth.
Supported by our values and our
risk management framework
The Weir Group PLC Annual Report and Financial Statements 2023
22
Strategic Report
Governance
Financial Statements
Additional Information
Business model
continued
How we use our strengths
How we deliver value
For the planet and society
Sustainable and efficient delivery of natural resources
essential to create a better future for the world
23%
reduction in scope 1&2 CO2e emissions
since 2019
For our customers
Market-leading technologies and excellent service
that helps them run smarter, more efficient
sustainable operations
£2.6bn
orders in 2023
For our people and communities
A rewarding place where people are empowered
to do the best work of their lives and support
local communities
£633m
paid in employee benefits in 2023
For governments
Support for economic growth and development in the
countries in which Weir operates
£104m
paid in corporate income tax in 2023
For our shareholders
An opportunity to invest in a low-carbon future
through the essential technology driving the global
mining industry's transition to net zero
£96m
total dividends paid in 2023
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Highly engineered equipment
We produce highly engineered equipment and solutions,
designed to solve our customers’ toughest operating challenges
with the lowest total cost of ownership. We operate across the
mine, from pit to processing plant, and have leading market
positions and premium brands.
Mission-critical solutions
Our equipment is mission-critical to our customers who rely on
our solutions to avoid costly, unplanned downtime. If our
equipment were to fail, their production can stop. So that makes
us a vital technology partner.
Comprehensive global support
No one serves more mines than Weir and we are operating every
day at the very heart of the world's mining processes. Our
customers rely on us to provide them with the technology they
need quickly and efficiently, supported by our global network of
colleagues and service centres.
Intensive aftermarket care
Our technology is used in high abrasion applications, such as
moving and crushing rock. Equipment parts wear out, and that
generates recurring demand for aftermarket spares and
expendables throughout the lifetime of the equipment.
This creates a reliable, sustained revenue stream for Weir,
throughout the mining cycle.
The Weir Group PLC Annual Report and Financial Statements 2023
23
Strategic Report
Governance
Financial Statements
Additional Information
Business model
continued
Our business model drives compounding growth
Sales of OE typically account for around 20% of our annual total
revenue. Every OE sale grows our installed base, generating a highly
valuable annuity-like aftermarket revenue stream on a recurring basis,
as we provide spare parts to the equipment for the life of the mine.
Today approximately 80% of our total revenue comes from
aftermarket. It is driven by non-discretionary spend on spare parts
that are essential to keep mines running. As a result, our growth is
predictable and sustainable.
Our installed base of OE is a huge asset for Weir as it fuels
significant aftermarket revenue. We protect it with our ‘boots on the
ground’ comprehensive global service approach.
We are also focused on growing our installed base of OE throughout
the mining cycle. So even when large projects are slower to convert,
we continue to grow the base by providing debottlenecking and
small brownfield expansion solutions to existing mines.
Highly resilient through the cycle
By combining installed base expansion with ore production growth,
the effects of declining grades and pricing, Weir consistently delivers
mid to high single digit through-cycle growth.
The chart below demonstrates this predicable and sustainable
aftermarket growth in action – with the graph showing >7%
compound growth in the Minerals aftermarket over the last 12 years,
and ESCO growing at a similar rate since acquisition.
Throughout various market cycles, including the global mining
downturn, which saw capital expenditure fall significantly and
commodity prices fall by 50%, our aftermarket has remained highly
resilient, continuing to grow and demonstrating its inelasticity to both
capital expenditure and commodity price cycles.
This embedded resilience is a major differentiator for Weir and our
aftermarket focused model, through the cycle, is proven to be among
the most resilient in our sector.
Business model drives compounding growth
Original equipment*
c.20%
Large installed base of equipment
• Used in high wear applications
• Installed for life of mine c.30 years
• Wear parts replaced frequently
Aftermarket*
Drives aftermarket revenues
• Spare parts and expendables
• Lifetime: weeks/months
c.80%
Original equipment sales expand installed base
Expanded installed base fuels further AM growth
OE growth drivers
Maintenance capex
Debottlenecking solutions
Small brownfield expansions
Large capital projects
* Revenue
Highly resilient through the cycle
Installed
base
Predictable and sustainable growth
AM growth drivers
Pricing
Declining ore grades
Ore production growth
Expanding installed base
End of the super cycle
Global mining downturn
Economic recovery
Minerals AM
ESCO
Blended commodity price*
Pandemic and complex
operating environment
Net zero focus
>7% Minerals AM revenue CAGR 2011 to 2023
7% Group AM revenue CAGR 2018 to 2023**
H1’11
H2’11 H1’12
H2’12
H1’13
H2’13
H1’14
H2’14
H1’15 H2’15 H1’16
H2’16
H1’17
H2’17
H1’18
H2’18
H1’19
H2’19
H1’20
H2’20
H1’21
H2’21
H1’22
H2’22
H1’23
H2’23
Growth
Resilience
Growth
Resilience
Growth
)
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Aftermarket growth is inelastic to capital expenditure and commodity price cycles
* Based on Weir’s three largest commodity exposures of copper, gold and iron ore ** Minerals AM revenue and ESCO Division revenue – H2 2018 to H2 2023
The Weir Group PLC Annual Report and Financial Statements 2023
24
Strategic Report
Governance
Financial Statements
Additional Information
Helping miners move
less rock, use less energy,
use water wisely and
create less waste.
We’ve worked closely with Fortescue Metals Group (FMG) to
help create the most energy and cost-efficient magnetite ore
processing facility in the world at FMG’s Iron Bridge mine in
Western Australia.
By combining a range of Weir crushing and pumping equipment,
including our Enduron® High Pressure Grinding Rolls and
GEHO® pumps, in an innovative way, our solution will reduce
energy consumption by more than 30%, and carbon emissions
by 40% compared to traditional mining technologies. In addition,
the technology used means that 13 million tonnes of waste will be
captured early and dry, significantly reducing wet tailings waste.
This is a great example of working together with an ambitious
customer who shares our passion for using innovative engineering
to make mining smart, efficient and sustainable.
The Weir Group PLC Annual Report and Financial Statements 2023
25
See how we’re
partnering with
customers to transform
traditional technology.
Visit www.global.weir/iron-bridge-case-study
Strategic Report
Governance
Financial Statements
Additional Information
Stakeholder engagement
Our success depends on building
and maintaining positive
relationships with the people,
communities and organisations
that have an interest in our
business and may be impacted
by the decisions we take.
These stakeholders are at the heart of our We are Weir strategic
framework that sets out our purpose, business model, strategic
priorities, values and culture. It makes it clear that we want to be
a business that provides excellent outcomes for our employees,
customers, shareholders, communities, environment, governments
and non-governmental organisations (NGOs), and other stakeholders,
such as suppliers.
Information on the Board’s approach to stakeholder engagement and
activities during the year is included in the Corporate Governance
Report on pages 82-83. The key decisions made by the Board during
2023, the stakeholders and strategic factors taken into consideration
when making decisions, and the outcomes are also outlined in the
Corporate Governance Report, on page 80.
UK Companies Act: section 172 statement:
Our Directors have a duty, both individually and collectively
as a Board, to act in the way they consider most likely to
promote the success of the Company for the benefit of our
members as a whole.
As part of this duty, our Directors are required to have regard to
a number of factors, including: the likely consequences of any
decision in the long-term; the interests of employees; the need
to foster business relationships with suppliers, customers and
others; the impact of our operations on the community and the
environment; the desirability of maintaining a reputation for high
standards of business conduct; and the need to act fairly as
between shareholders. Consideration of these factors and other
relevant matters is embedded into Board decision-making,
strategy development and risk assessment across the year.
Our key stakeholders, the issues that matter to them, and the
results of our engagement with them over the course of this
year are set out on pages 26-27 and 81-86. Further explanation
of our approach to understanding stakeholder interests and how
these impacted the principal decisions taken by the Board
during the year is set out on page 80.
Find out more
Our strategic framework
Business model
Sustainability strategy
Corporate Governance Report
Principal decisions taken by the Board
See page 18
See page 22
See page 42
See page 71
See page 80
Employees
Why is this stakeholder group important to us?
Our people are our key asset and a critical driver of our success, so
keeping them safe is our top priority. We recognise the importance
of listening to, responding to and acting on their feedback as we
work to create an environment where they can thrive, do the best
work of their lives, and contribute to Weir's success.
What matters to our people?
Our people want to work in an environment that is safe, where their
physical and mental health is prioritised. They want to feel that their
voice is heard and that everyone is treated fairly and equitably.
Ultimately, our people seek a workplace that nurtures their
individual success where they can also actively contribute to
broader societal and environmental goals. Being paid and rewarded
equitably for their work is also important.
How did we engage in 2023?
We ran our regular all-employee engagement survey, giving
colleagues the opportunity to feedback on Weir. Employees
continued to receive monthly 'CEO Briefings' from Jon Stanton
covering strategy and business progress and, in May, we held our
annual all-employee town hall. Additionally, colleagues received
updates at a divisional and functional level leadership throughout the
year. Locally, employees joined regular site-level meetings and
toolbox talks. We continued to engage colleagues in our Zero Harm
Behaviours Framework and in March 2023, we marked the annual
Weir safety day with activities and events held at sites globally.
Colleagues continued to engage throughout the year in activities led
by our employee-led affinity groups. Details of the Board's approach
to employee engagement and activities led by the designated Non-
Executive Director in the year are described on pages 81-83.
The Weir Group PLC Annual Report and Financial Statements 2023
26
What were the outcomes of our engagement with this
stakeholder group?
We continued to benefit from well-established methods of two-
way communication with our people on a local and regional level,
while also continually looking at ways we can improve. Local town
hall events with management, and toolbox chats allow everyone
the opportunity to express their thoughts and concerns on all
aspects of life at Weir.
We continue to communicate and act on the results of our all-
employee survey on a global and local level, ensuring our people
understand the priorities for improvement business-wide and the
actions being taken at their place of work to make things better.
Colleagues were updated on the progress from the previous
survey and what improvements have been made on the topics that
were most important.
We underlined our commitment to colleagues' safety and
wellbeing with continued roll out of the Zero Harm Behaviours
programme. In 2023, over 8,000 colleagues across 140 sites took
part in training and workshops, with the aim of encouraging a
broader range of safety behaviours expected of everyone, at all
times, and which represent the key elements of a broader safety
culture. Our approach to employee wellbeing and mental health
was also demonstrated in 2023 when we were recognised as the
biggest improver on performance among the UK’s top 100
companies in the CCLA Corporate Mental Health Benchmark. Case
studies showing our approach in action are detailed on our website
at global.weir/wellbeing-stories.
Colleagues' learning and development were supported with the
launch of several new programmes, including a reverse mentoring
programme and a leadership programme for first line leaders.
Strategic Report
Governance
Financial Statements
Additional Information
Stakeholder engagement
continued
Customers
Why is this stakeholder group important to us?
Customers are partners in our success, driving our growth and
informing our technology and sustainability priorities, so building and
maintaining strong relationships is key. By embedding our sales and
engineering teams close to our customers on mines across the
world, we develop effective working relationships and gain valuable
voice of customer insights, to guide our priorities and actions across
all four pillars of We are Weir.
What matters to our customers?
Our customers want a supplier that understands and responds
to their challenges with reliable high performance solutions that
supports their safety and productivity goals and provides them
with the lowest total cost of ownership. In addition they look to
Weir as a partner for smart, efficient, sustainable mining technology
solutions to help support their social licence to operate and their
sustainability ambitions.
Our proximity to our customers is crucial in an industry where
downtime and breakdowns can be critical. In addition, our technical
expertise and deep understanding of their challenges engenders
trusting long-term partnerships that will support the development
and commercialisation of innovative solutions that accelerate the
path to sustainable mining.
How did we engage in 2023?
Day-to-day, colleagues from Weir continued to support customers
across the globe with their productivity and sustainability
challenges. In addition, we worked with customers on field trials
of our latest solutions and innovations, including our next
generation of Ground Engaging Tools (GET) systems and new
technologies for ore characterisation. We also continued to work
with strategic partners, including Eriez and STM Minerals, to
advance our customer value proposition.
What were the key topics and the outcomes of our
engagement in 2023?
At Fortescue Metals Group's (FMG's) Iron Bridge site in Western
Australia, we started up the world’s first dry grinding circuit which
will save water and waste and reduce energy by at least 30%
compared to traditional milling methods. We continued to develop
our network of facilities and services centres so that we remain
close to our customers. We opened new facilities in key mining
regions such as Salt Lake City in North America and Port Hedland
in Australia (supporting FMG). To support technology and
innovation, we opened new hubs in the Netherlands and Canada,
the latter being our Centre for Excellence for AI. We engaged
customers in discussions that informed work on our matured
sustainability strategy and refreshed brand strategy.
Shareholders
Why is this stakeholder group important to us?
Our shares are listed on the London Stock Exchange and we raise
debt from banks and through listed bonds. Our equity and bonds are
owned by investors in the UK, US, Europe and other regions and we
engage with and provide information to them through our investor
relations programmes and communications.
What matters to our shareholders?
They are concerned with our financial and operational performance,
and our business strategy. They want to understand our business
and how we create value. Our approach to sustainability and our
environmental, social and governance (ESG) performance is also
important to them.
Suppliers
How did we engage in 2023?
We held over 280 investor meetings, covering c.50% of our
shareholder base and a number of prospective investors. We also
commissioned an investor perception study to understand in
greater detail key institutional investors’ views of Weir. In
December we hosted a Spotlight Capital Markets Event on growth
and Performance Excellence during which we announced our new
operating margin target of 20% in 2026.
What were the key topics and the outcomes of our
engagement in 2023?
Key topics included financial performance, long-term strategy and
our Performance Excellence transformation programme. In June,
the Group completed the issue of £300m five-year Sustainability-
Linked Notes and in December, we announced the formation of
a dedicated Sustainability and Technology Board Committee.
Why is this stakeholder group important to us?
Our global network of suppliers is critical in supporting robust supply
chains that allow us to serve our customers and operate efficiently.
What matters to our suppliers?
They want to understand how to support us through delivering
reliable, high quality and competitively priced products and services,
and engage with us on innovations and technology developments.
Effective collaboration, good communication and transparent
partnerships are important to them, and they are concerned with
sustainability, compliance and ethical practices.
How did we engage in 2023?
We continued to work positively and collaboratively throughout
the year, divisionally and functionally, on tactical matters, as well
as through strategic technology and R&D collaborations.
What were the key topics and the outcomes of our
engagement in 2023?
Engagement covered a range of topics relevant to our longer-term
technology and sustainability ambitions. At a tactical level, we
worked with suppliers on quality and improvements to their
internal manufacturing processes. We also engaged on health and
safety, modern slavery laws and anti-bribery and corruption laws.
The Weir Group PLC Annual Report and Financial Statements 2023
27
Strategic Report
Governance
Financial Statements
Additional Information
Stakeholder engagement
continued
Communities & environment
Why is this stakeholder group important to us?
Contributing to our local communities is core to our sustainable
business practices. Our communities serve as integral partners,
providing a skilled workforce and fostering innovation. We build
relationships through community engagement and recognise that
our success is intertwined with the prosperity of local stakeholders.
By prioritising communities in which we operate we are promoting
long-term resilience and growth for both the company and the
communities in which we serve.
What matters to our local communities?
Our communities want us to provide safe and attractive
employment opportunities together with investment and support for
local initiatives and education. Beyond this, they expect us to
demonstrate strong social responsibility, delivering on our
sustainability and environmental goals.
How did we engage in 2023?
We believe that our colleagues best understand the needs of their
communities at a local level and we engaged with communities
throughout the year, led by our sites across the globe. There have
been numerous examples of outreach initiatives, educational
seminars and support, including financial support, for important
areas such as safety, health, diversity and inclusion. Read more on
our website about how we connect with our communities.
What were the key topics and the outcomes of our
engagement in 2023?
Key topics included sustainability and education. We provided
employment to c.12,000 people in over 60 countries worldwide,
including through our apprenticeship programmes. We continued
to support local initiatives, including health, education and social
welfare charities.
Governments & NGOs
Why is this stakeholder group important to us?
We develop relationships with governments and NGOs to ensure
we stay abreast of developments in regulatory compliance and
responsible corporate practice. It also enables us to contribute to
the debate on industry-specific topics relating to sustainable mining.
At a local level, we engage on operating frameworks, environmental
standards, worker safety and ethical conduct.
What matters to governments & NGOs?
The role of mining in the energy transition and how technology
enables that, together with mining’s social licence to operate, are a
major focus of governments and NGOs at a global and local level.
In parallel, understanding the employment opportunities we provide
and the future skills we need are also important. They want to know
we are an ethical and responsible business and a good employer.
How did we engage in 2023?
We engaged with government, key NGOs, trade bodies and research
organisations throughout the year on topics including safety,
manufacturing, sustainable mining, education and skills, particularly
science, technology, engineering and maths (STEM) skills.
What were the key topics and the outcomes of our
engagement in 2023?
We continued to promote STEM education and opportunities,
particularly for women and other under-represented groups.
Our Young Weir Wise programme, in conjunction with Strathclyde
University, welcomed 150 students from 89 schools across
Scotland. We shared our industry-first study on avoided emissions
at the COP28 summit in December, highlighting the opportunity
for significant energy savings in mining.
Weir study highlights significant energy saving opportunity in mining
In 2023, we completed a study that highlights a significant
opportunity to reduce energy use and emissions in comminution,
the rock crushing process that is key to minerals extraction, and
that consumes c.3% of the world’s electrical power each year.
The study is the first to use the World Business Council for
Sustainable Development's (WBCSD) Avoided Emissions
Guidance to study mining processes, and the avoided emissions
results have been independently assured.
Three of Weir’s technology combinations were evaluated against
a conventional comminution circuit design and all three are
shown to yield sizeable benefits versus the traditional circuit.
In the optimal combination, the comminution process consumes
around 40% less energy and can avoid up to 50% of CO2e
emissions. Importantly, there is no trade off elsewhere, as the
redefined process uses less water too.
We unveiled the findings of the study in December 2023 at a
COP28 panel discussion hosted by the Ministry of Economy,
Trade and Industry of Japan and moderated by the WBCSD.
Weir's Chief Strategy & Sustainability Officer, Paula Cousins, revealing
details of the study during a panel discussion at COP28.
The Weir Group PLC Annual Report and Financial Statements 2023
28
Strategic Report
Governance
Financial Statements
Additional Information
Accelerating the path
to smart, efficient and
sustainable mining.
The need for transformative technology solutions in mining is
compelling – the world needs more critical metals to achieve net
zero and the mining industry needs to extract these with less
energy, water and waste.
That scale of innovation needs new ways of thinking. So we’re
pushing the boundaries – bringing together the best brains to
create mining technologies that prove it is possible to deliver
the resources needed now, for a low-carbon future.
No one serves more mines than Weir. And with our expertise
in engineering, materials science and intelligent automation,
we’re helping customers scale up and clean up, accelerating
the path to more sustainable mining.
The Weir Group PLC Annual Report and Financial Statements 2023
29
See the work we’re
doing to make mining
more sustainable.
Visit www.global.weir/sustainability
Strategic Report
Governance
Financial Statements
Additional Information
Technology for sustainable mining
Technology is at the heart of
what we do. We are investing
to develop the next generation
of innovative solutions
to tackle our customers’ biggest
sustainability challenges.
`
Weir’s mining technology operates in some of the harshest
conditions on earth and where downtime can cost our customers
tens of millions of dollars a day. Our core value proposition is lowest
total cost of ownership, or TCO. Our products operate more
efficiently, so use less energy and water, and last longer than
alternative solutions. As a result, spare parts need to be replaced
less frequently.
These characteristics stem from our world-class engineering and
materials science, manufacturing know-how and deep customer
insight, increasingly enabled by intelligent automation. We have
some of the world’s leading metallurgists, materials scientists, data
scientists and foundry experts in our team, and our exotic alloys and
specific foundry processes give our products their extended, best-in-
class wear life.
Higher performing, longer lasting products bring inherent
sustainability benefits too. Embodied carbon emissions are lower
because less metal is being poured, less waste is being created and
less carbon is expended in supply chains.
However, given the critical role of mining as an enabler in the
transition to net zero and the industry’s imperative to scale up and
clean up at the same time, we are increasing our R&D investment to
deliver innovative transformational technology solutions aligned to
our customers’ biggest priorities.
Move less rock
Miners want to reduce the
effort they expend on
processing zero and low
grade ore. They want to move
less rock by moving only high
grade material.
We are developing
technologies that identify and
select ore with the right
mineral content, helping
customers to optimise the
material entering their
processing plant.
Use less energy
Mining is energy intensive
and the industry accounts for
around 3.5% of total final
energy consumed globally1.
Energy costs money and
contributes to CO2 footprint,
so there is a dual impetus for
miners to use less energy in
their processes.
We are innovating solutions
that deliver significant energy
savings, helping our
customers meet their
sustainability goals.
Use water wisely
Water is fundamental to the
way minerals are processed.
However, in some parts of
the world there is not
enough, and in some parts
there's too much. So miners
want to use water wisely.
We are developing tailored
solutions that increase water
recovery and recycling rates
and, where possible,
introduce water-free
process steps.
Create less waste
Today, over 90% of mined
rock ends up as tailings – the
waste stream produced in
conventional mining
processes.
With technologies to tackle
the other priorities, mining
will create less waste and
lower volumes of tailings. In
addition, we are working on
innovative ways to manage
the tailings that are produced
more safely and sustainably.
1. https://www.ceecthefuture.org/resources/mining-energy-consumption-2021
The Weir Group PLC Annual Report and Financial Statements 2023
30
Strategic Report
Governance
Financial Statements
Additional Information
Technology for sustainable mining
continued
A technology strategy for growth
Through our technology strategy, we are creating the sustainable
solutions that underpin our growth ambition.
Fundamentally, miners want to get more from less. By working
closely with our customers and listening to them, we understand
their biggest priorities, which we have summarised into five
simple themes:
• Move less rock
• Use less energy
• Use water wisely
• Create less waste; and
• Boost with digital.
These themes are the framework for our technology strategy, and
we use them to prioritise and allocate our engineering and R&D
resources to address our customers' priorities.
With clear customer priorities and a compelling mandate to make
mining more sustainable, we continue to target investment in
R&D of 2% of revenue, differentiating ourselves further and
prioritising spend based on ‘voice-of-customer’ feedback and
projects. These include:
• protecting our core business – through investments in materials
science and core engineering capabilities; and
• developing new products and solutions which will address our
customer’s biggest sustainability challenges.
Expanding our digital ecosystem
capabilities
Digital technology has an important role in helping address the
challenges of declining ore grades, production efficiency, and CO2
emissions for our customers. Ultimately, miners want to optimise
their operations to get more from less. So we are boosting the
effectiveness of our engineering technology expertise with a digital
system overlay to provide added insight and enhanced
performance. Our Synertrex® platform offers data driven insights
on our equipment, while our Motion MetricsTM machine vision and
AI technology provides complementary insight on mine processes.
We continue to make good progress with Motion Metrics,
deploying more technology units across every region. This includes
at a large iron ore mine in Western Australia where the customer
wanted to reduce downtime in the processing plant and further
enhance its safety performance.
The Weir Group PLC Annual Report and Financial Statements 2023
31
In parallel, we are also adding new capabilities in areas such as
digital, data management and AI. Furthermore, strategic alliances
and acquisitions have further accelerated our organic strategy and
we continue to build our pipeline of new opportunities.
Our R&D strategy is therefore very clear. We will continue to
invest to protect our core value proposition, while increasing
spend to address our customers' biggest challenges and drive our
future growth.
Transformative solutions deliver compounding benefits
Many of our current growth initiatives are supported by new
innovations that already align to one or more of the key customer
themes in our technology strategy. Our range of more nascent
technologies has the potential to deliver further growth and is
similarly aligned.
However, the most exciting opportunity for Weir and our customers
comes from integrating technologies in innovative new ways. By
packaging technologies together, right across the mine, we can
create solutions that will deliver compounding benefits – driving
productivity up, and environmental footprint down. Our digital
insights ensure processes are optimised, which together with our
sustainable hardware solutions, will significantly reduce energy and
water consumption, and create less waste.
These transformative integrated solutions are set to be key growth
drivers for Weir in the years ahead and will further expand our
technology leadership.
Our latest generation LoaderMetricsTM and ShovelMetricsTM
solutions are being rolled out on all large machines at the mine
and the early feedback is very positive.
Complementing our platform with SentianAI
During the year we worked with SentianAI, a Swedish-based
developer of AI solutions, on a proof of concept project to
optimise the performance of Weir equipment in the minerals
processing plant. Then, in November 2023, we brought the
SentianAI technology in-house, announcing our acquisition of the
business and welcoming the team of highly skilled software
developers and data scientists to Weir.
Acquiring SentianAI accelerates our technology strategy and
expands our digital capability, enabling us to provide enhanced
productivity and sustainability offerings to customers.
Combining digital technologies to boost performance
SentianAI-enabled process optimisation software uses inputs
from Synertrex® and also takes inputs from across the broader
processing circuit. It makes recommendations on how ore
throughput can be increased and on how emissions and energy
consumption can be reduced. It can also enable automation,
opening the door for us to explore new business models such as
performance-based payments and Software as a Service.
We see long-term growth opportunities from digital technologies.
Combining SentianAI advanced software solutions to our
Synertrex® and Motion MetricsTM technologies is an exciting
development for Weir and our customers, enabling us to provide
holistic performance monitoring and optimisation for smart,
efficient and sustainable mining.
Strategic Report
Governance
Financial Statements
Additional Information
Key Performance Indicators
We have financial
and non-financial
metrics to measure
our performance.
These metrics are aligned to our We are
Weir strategic framework and the majority
are linked to executive remuneration.
In 2023, 60% of Executive Director annual
bonus was directly linked against financial
KPIs (adjusted profit before tax and free
operating cash conversion), 20% was
directly linked to progress against strategic
measures and 20% directly linked to ESG
measures. Further details are provided in
the Directors’ Remuneration Report on
pages 123-125.
Peo pl e
Cu
s
t
o
m
e
r
Financial
Adjusted profit before tax1 £m
Balance sheet efficiency –
Net debt To EBITDA2
411
348
2.8
2.4
269
249
249
1.9
1.5
1.1
2019
2020
2021
2022
2023
2019
2020
2021
2022
2023
2023 performance
Continuing operations adjusted profit
before tax was £411m (2022: £348m).
Continuing operations adjusting items
were £90m (2022: £87m). In 2023
these were mainly due to costs relating
to Performance Excellence and a
charge in relation to the legacy US
asbestos-related provision.
2023 performance
Net debt to EBITDA on a lender
covenant basis was 1.1x (2022: 1.5x)
compared to a lender covenant level of
3.5x. Within our capital allocation policy
we aim to keep net debt to EBITDA
between 0.5x to 1.5x, and up to 2.0x
for acquisitions, with through-cycle
33% adjusted earnings per share being
distributed by way of dividend.
P
e
r
f
o
r
m
ance
y
g
h n olo
c
T e
Link to strategy
People, Customer
Technology, Performance
Link to strategy
People, Customer
Technology, Performance
Find out more on pages 38-39
Find out more on page 41
Free operating cash
conversion ratio3 %
Revenue1 £bn
Adjusted operating margin1 %
91
87
85
63
2.0
2.0
1.9
2.5
2.6
15.4
15.2
15.3
17.4
16.0
2020
2021
2022
2023
2019
2020
2021
2022
2023
2019
2020
2021
2022
2023
2023 performance
Free operating cash conversion was
85% (2022: 87%) in line with our target
range of 80% to 90% for 2023. From
2024, we are targeting operating cash
conversion of 90% to 100% driven by
working capital efficiency and
maintaining capex and lease costs
close to 1.0x depreciation.
2023 performance
Continuing operations revenue of
£2,636m was up 9% on a constant
currency basis. Given our attractive
markets and distinctive proposition,
we expect to grow ahead of the growth
in ore production and deliver mid to
high single digit percentage revenue
growth through the cycle supported by
organic initiatives.
2023 performance
Continuing operations adjusted
operating margins were 17.4%,
exceeding our 2023 target of 17%
and up 140bps versus 2022. We have
a new operating margin target of 20%
in 2026. We expect to achieve this
through operating leverage from
growth and cost savings from
Performance Excellence.
Link to strategy
People, Customer
Technology, Performance
Link to strategy
People, Customer
Technology, Performance
Link to strategy
Performance
Find out more on page 41
Find out more on pages 38-39
Find out more on page 39
The Weir Group PLC Annual Report and Financial Statements 2023
32
Strategic Report
Governance
Financial Statements
Additional Information
Key Performance Indicators
continued
Non-financial
R&D investment as a percentage
of revenues1
1.9
1.8
1.7
1.3
1.3
Safety (total incident rate4,5)
Employee engagement (eNPS6)
0.48
0.41
0.45
0.41
0.42
48
48
51
48
42
34
28
18
2019
2020
2021
2022
2023
2019
2020
2021
2022
2023
2023 performance
Research & development costs for
continuing operations of £47.3m (2022:
£48.1m) were 2% lower year-on-year
and equated to 1.8% of revenues.
We continue to focus our R&D
investment on technologies that
make mining operations smart, efficient
and sustainable.
2023 performance
Our total incident rate (TIR) of 0.42
(2022: 0.41) puts us among the safest
companies in our sector but is
disappointing relative to our ambition
of zero harm. We are building good
momentum with our Zero Harm
Behaviours programme and will
continue to embed it in 2024.
2023
(H2)
2021
(H1)
2020
(H1)
2019
(H2)
2022
(H2)
2022
(H1)
2020
(H2)
2019
(H1)
2023 performance
Levels of engagement remained high
and our employee net promoter score
of 48 keeps us in the top 25% against
manufacturing sector benchmarks.
Participation levels in our regular all-
employee engagement survey
remained excellent at 87%.
Link to strategy
Technology
Link to strategy
People
Link to strategy
People
Find out more on pages 30-31 and 166
Find out more on page 46
Find out more on page 47
Inclusion, diversity & equity:
Female representation %
Greenhouse gas emissions
Scope 1&2 CO2e Tonnes CO2e
17
17
15
19
183,626
160,069
156,600
152,683
142,213
Key
Financial metric
Strategic metric
ESG metric
2020
2021
2022
2023
2019
2020
2021
2022
2023
2023 performance
Female representation increased to
19% of employees (2022: 17%)
supported by strategic actions including
a reverse mentoring programme,
a review of global maternity policies to
better support our workforce, and
listening activities into the female
employee experience at Weir.
Link to strategy
People
2023 performance
Scope 1&2 CO2e emissions7 in 2023
were 142,213 tCO2e, a cumulative
reduction of 23% since 2019, driven by
many projects at our sites across the
world. We are targeting a reduction
of 30% in absolute scope 1&2 market
based CO2e by 2030, from a 2019
baseline. This target has been
approved by the Science Based Targets
initiative (SBTi).
Link to strategy
Technology and Performance
Find out more on page 47
Find out more on pages 47 and 56
The Weir Group PLC Annual Report and Financial Statements 2023
33
The Key Performance Indicators include a mixture of GAAP
measures and those which have been derived from our
reported results in order to provide a useful basis for
measuring our operational performance. Adjusted results
are for continuing operations before adjusting items as
presented in the Consolidated Income Statement. Details
of alternative performance measures are provided in note 3
of the Group Financial Statements.
1. Continuing operations (2020 restated for SaaS
adjustments).
2. Calculation is on a lender covenant basis with net debt
at average exchange rates.
3. Total Group (2020 restated for SaaS).
4. Total incident rate is an industry standard indicator that
measures lost time and medical treatment injuries per
200,000 hours worked.
5. Total Group for 2019, Continuing operations for
2020-2023.
6. eNPS (employee net promoter score) is an index used
to measure employee satisfaction levels.
7. Market based greenhouse gas emissions. For definition,
see page 57.
Strategic Report
Governance
Financial Statements
Additional Information
Operating review: Minerals Division
Our Minerals Division is a
global leader in engineering,
manufacturing and servicing the
processing technology used
in abrasive, high-wear mining
applications. Its differentiated
technology is also used in
infrastructure and general
industrial markets.
2023 Divisional revenue
£1,937m
+12%1
2023 Divisional adjusted operating profit
£376m
+18%1,2
Divisional orders
by end market %
Divisional orders
by geography %
2 2 1
6
10
79
Mining
Industrial
Oil and gas
Naval and marine
Infrastructure
Power generation
1
5
12
17
19
South America
North America
Australasia
Asia Pacific
25
21
Africa
Europe and FSU
Middle East
Revenue by original
equipment /aftermarket %
Number of facilities
28
72
Aftermarket (AM)
Original Equipment (OE)
2
16
27
21
23
27
26
Europe and FSU
South America
Africa
Asia Pacific
North America
Australasia
Middle East
1. 2022 restated at 2023 average exchange rates.
2. Profit figures before adjusting items (note 2 of the Group Financial Statements).
The Weir Group PLC Annual Report and Financial Statements 2023
34
2023 strategic review
Minerals delivered a year of strong strategic progress, growing its
installed base, significantly enhancing its digital offering, and
completing and initiating a number of Performance Excellence
projects that will drive efficiency and margin expansion. Progress
across all four pillars of the ‘We are Weir’ strategic framework is
outlined below.
People
On safety, TIR for Minerals was 0.34 (2022: 0.27). The Division
remains amongst the safest in its sector, and through the Zero Harm
Behaviours Programme is reinforcing safety as a priority.
Inclusion, diversity and equity was a key focus in the year, and this is
reflected in improved gender diversity across the Division. Other
milestones included increased diversity in recruitment and talent
pipelines, and the global launch of our Woman in Leadership
Programme, in conjunction with the University of Pretoria.
Customers
Comminution is a high growth area of our portfolio, and in the year
we saw a significant increase in orders for our AM solutions. This
reflects growth in our installed base, and our increased strategic
focus on this area. A particular highlight was an order from a large
copper mine in South America, where our customer ordered
Enduron® rollers for their High Pressure Grinding Rolls (HPGR). The
installation will be the first instance of our rollers being fitted to a
competitor's HPGR, and enables us to showcase the performance
and reliability benefits of our technology. More generally, the pipeline
for our HPGR remains strong with a number of projects advancing
materially through the year.
We also gained further market share in mill circuit pumps, converting
over 85% of our competitive field trials.
Technology
In November we acquired SentianAI, an innovative developer of
process optimisation solutions powered by Artificial Intelligence.
Coupled with the launch of our Synertrex® intelli-solutions condition
monitoring technology, which now spans six product platforms and is
active at over 60 mines, the acquisition enhances our overall process
optimisation capabilities and positions us to develop new revenue
and business models.
Our portfolio of sustainable solutions, which improve water efficiency
and reduce energy consumption relative to traditional mining
technologies, also gained traction. We grew our sales pipeline for our
Redefined Mill Circuit and received initial commercial orders for
Coarse Particle Flotation technology, which we access through our
partnership with Eriez.
In addition, we launched our Cavex® 2.0 cyclone technology, and
invested in upgrades and range expansions for our industry leading
Warman® slurry pumps.
Performance
On Performance Excellence, the Division consolidated several of its
manufacturing facilities in the US, optimised its Australian service
centre and Latin America distribution footprints and initiated the
reconfiguration of its elastomer manufacturing in Asia Pacific. Several
new 'configure to order' tools were also launched, which will reduce
product variation and improve manufacturing efficiencies. These
included full launch of our HPGR configurator tool, and phase 1 roll-
out of our ‘Warman selector’ tool.
Among other Performance Excellence projects initiated was the
launch of Weir Integrating Network System (WINS), our new lean
manufacturing programme. WINS is our proprietary operating system
and is enabling us to extend our focus on lean to cover all value
streams in our global operations.
On sustainability, in our continued drive to reduce our environmental
footprint, we installed solar panels at our facilities in South Africa and
transitioned our Australian operations to a green energy tariff.
Strategic Report
Governance
Financial Statements
Additional Information
Operating review: Minerals Division
continued
Weir's HPGR technology sets new
standards for sustainable mining
At the Iron Bridge site in Western Australia, our installed High
Pressure Grinding Rolls (HPGR) technology is bringing increased
uptime and wear life benefits for Fortescue Metals Group.
Saving 30% in energy and 40% in carbon compared to
conventional comminution flowsheets, the solution is also the
world's first completely dry grinding circuit, which helps tackle
another important industry issue – waste. In total, 13m tonnes
of waste will be captured early and captured dry, reducing the
wet tailings requirements for the plant.
Reinvigorating our lean culture at
Weir Minerals Salt Lake City
The Weir Integrating Network System, or WINS, is
reinvigorating lean processes in the Minerals Division. WINS is
outcome-focused and concentrates on eliminating things that
waste time, effort or money, cutting out steps that do not
create value. Our Salt Lake City facility, which manufactures
rubber wear products for hard rock mining customers, was the
first to put the new WINS methods into practice and the team
is already seeing the benefits in rubber press utilisation and
reduced downtime of supporting work centres.
See how we're using our core expertise to solve our customers'
problems - today and in the future.
Visit www.global.weir/iron-bridge-case-study
See how we're reducing waste and improving efficiencies
in our own facilities.
Visit www.global.weir/salt-lake-city-case-study
year-on-year decreased by £38m as we wound down operations. Full
year revenue mix moved towards OE, which accounted for 28% of
revenue, up from 26% in the prior year.
Adjusted operating profit increased 18% on a constant currency
basis to £376m (2022: £318m) as the Division benefited from
increased volumes, strong execution and the initial benefits of
Performance Excellence. In addition, year-on-year, the Division
benefited from a reduction in adverse transactional FX movements of
£8m.
Adjusted operating margin on a constant currency basis was 19.4%
(2022: 18.3%). The year-on-year improvement of 110bps reflects
strong operational efficiency, early benefits from Performance
Excellence, and a reduction in adverse transactional FX movements,
partially offset by the movement in revenue mix towards OE.
Operating cash flow increased by 8% to £418m (2022: £386m)
reflecting growth in operating profit, partially offset by a modest
increase in working capital outflow to £26m (2022: £18m). Working
capital movements include a reduction in inventory resulting from
actions through Performance Excellence, and also a decrease in both
receivables and payables in line with phasing of revenue and
purchases respectively.
2023 financial review
Orders were broadly stable on a constant currency basis at £1,895m
(2022: £1,886m), with book-to-bill at 0.98 reflecting strong execution
and ongoing strength in mining markets. OE orders decreased 6%
year-on-year, relative to a strong prior year comparator which
included £33m of large orders for nickel projects in Indonesia.
Through the year, we continued to see good momentum in demand
for OE for small brownfield and debottlenecking projects, as
customers sought to maximise production from existing assets and
large projects remained slow to convert. AM orders increased 3%
year-on-year, with a contribution from pricing and an increase in
volume from customers in hard rock mining, partially offset by
reduced orders from customers in the Canadian oil sands and a loss
of orders from Russia. Excluding orders from Russia from the prior
year comparator, AM orders were up 4%. Contribution from pricing
in H2 was lower than in H1, as the pricing environment normalised
through the year. In line with prior years, AM orders in Q2 included
multi-period orders, and excluding these, AM orders grew
sequentially from H1 to H2. For the full year, AM orders represented
73% of total orders (2022: 71%), and mining end-markets accounted
for 79% of total orders (2022: 76%).
Revenue increased 12% on a constant currency basis to £1,937m
(2022: £1,735m), reflecting strong execution and price realisation.
Half-on-half, revenue grew sequentially through the year, as we
delivered our record opening order book in H1 and continued to
benefit from strength in our mining markets in H2, with orders
converting to revenue. Revenue growth in Canada was particularly
high, following strong order growth in the Canadian oil sands last
year. Partly offsetting this was reduced revenue from Russia, which
The Weir Group PLC Annual Report and Financial Statements 2023
35
Strategic Report
Governance
Financial Statements
Additional Information
Operating review: ESCO Division
2023 strategic review
ESCO made good strategic progress in the year, significantly
improving safety performance, delivering substantial growth in
mining attachments and advancing its foundry optimisation
programme. Progress across all four pillars of the ‘We are Weir’
strategic framework is outlined below.
People
Safety performance in ESCO was a highlight, with a reduction in TIR
to 0.81 (2022: 1.01). This reflects strong focus across the Division
and is an important step forward on our journey to delivering our
ambition of zero harm.
In addition, we continued to make significant strides with respect to
diversity, with improvement in gender diversity at all levels in the
Division.
Customers
Throughout the year, the Division made significant progress in
growing market share in mining attachments. Year-on-year orders
increased by 40%, as customers chose ESCO solutions for their
lowest total cost of ownership and productivity benefits. We grew
orders in our largest market of North America, and also won key
orders in Africa and Australia, reflecting our increased focus and
momentum in these regions.
We also won share in our core GET market, delivering positive net
conversions, and gained traction with our Motion Metrics digital
solutions, growing our sales pipeline and delivering year-on-year
revenue growth.
Technology
The development of our next generation GET technology was a
major focus in 2023. Results from field trials of the new solution
were positive, demonstrating that the technology further enhances
our customer proposition of best in class wear life and lowest total
cost of ownership.
We also delivered successful phase 1 field trials of our proprietary
ore characterisation technology, with the second phase of trials due
to commence in the first half of 2024.
In addition, we continued to invest in our materials science capability,
developing new alloys and composites to underpin our technology
leadership.
Performance
Optimising the performance of its foundry network is ESCO’s largest
Performance Excellence opportunity, and the Division made good
progress in the year. Construction of the new foundry in Xuzhou,
China, is now complete and equipment is being commissioned. The
first casting from the foundry was poured in February 2024 and, once
fully operational, the facility will significantly increase the Division’s
low cost manufacturing capacity. Progress in our North American
foundries was also positive, with year-on-year improvements in both
operational and quality metrics.
From a sustainability perspective, the Division took steps forward in
reducing its environmental footprint, completing environmental
audits across a number of its facilities and establishing work groups
that are addressing key findings.
Our ESCO Division is a global
leader in the provision of Ground
Engaging Tools (GET) for large
mining machines. Its highly
engineered technology
improves productivity through
extended wear life, increased
safety and reduced energy
consumption.
2023 Divisional revenue
£699m
+2%1
2023 Divisional adjusted operating profit
£122m
+11%1,2
Divisional orders
by end market %
Divisional orders
by geography %
3
10
25
62
Mining
Infrastructure
Oil and gas
General industrial
2
4
6
8
10
15
55
North America
South America
Australasia
Africa
Europe and FSU
Asia Pacific
Middle East
Revenue by original
equipment/aftermarket %
Number of facilities
8
92
4
4
6
8
9
24
Aftermarket (AM)
Original Equipment (OE)
North America
South America
Australasia
Africa
Asia Pacific
Europe and FSU
1. 2022 restated at 2023 average exchange rates.
2. Profit figures before adjusting items (note 2 of the Group Financial Statements).
The Weir Group PLC Annual Report and Financial Statements 2023
36
Strategic Report
Governance
Financial Statements
Additional Information
Operating review: ESCO Division
continued
Xuzhou 2 – ESCO's most modern
foundry
In line with our growth opportunities, 2023 saw continued
progress on the building of ESCO's newest foundry in Xuzhou,
China. A $60m investment, it will replace the existing facility in
the city which has been in operation since 2006. Once operating
at peak capacity, the foundry will produce around 70 tonnes of
GET per day. This is about 30% more than the foundry it
replaces – so will significantly increase the proportion of the
Division’s total capacity in its lowest cost location. Furthermore,
increased use of automation will improve efficiency and drive
down the cost of manufacture at the site. The transition to move
operations is already underway and the first pour took place in
early February 2024.
Customer proximity driving growth
in Australasia
Since Weir acquired ESCO in 2018, the Division has pursued
a 'direct in mining' strategy to expand sales and its service
network. Being on the ground and close to customers, and
using our leadership in GET and deep rooted mining knowledge,
we are able to cross-sell our portfolio of engineered technology
and Motion MetricsTM digital solutions and expand our presence
at the mine – all of which provides further productivity and
sustainability benefits to our customers. In Australasia we’ve
grown strongly over the past two years, leveraging the quality,
reliability and safety of the ESCO brand and our differentiated
core GET technology to help us embed ESCO more deeply with
customers in the region, with a broader suite of solutions.
See how we're expanding our production capability with state
of the art technologies.
Visit www.global.weir/xuzhou-case-study
See how we're increasing our footprint in Australasia and
working closely with our customers.
Visit www.global.weir/weir-esco-australasia-case-study
2023 financial review
Orders decreased 2% on a constant currency basis to £690m (2022:
£704m), with book-to-bill at 0.99 reflecting strong execution coupled
with high levels of activity in our mining markets. Year-on-year
movement in orders reflects growth in mining orders, including a
contribution from price, offset by a decrease in orders from
infrastructure customers relative to a strong prior year comparator.
Contribution from pricing in H2 was lower than in H1, as the pricing
environment normalised through the year. In mining, demand was
particularly strong for our mining attachments, which is reflected in
OE order growth of 41%. Notwithstanding this, AM continues to be
the largest part of ESCO accounting for 91% of total orders in the
year (2022: 94%). In total, mining end markets accounted for 62% of
orders (2022: 62%) and infrastructure accounted for 25% (2022:
26%).
Revenue on a constant currency basis increased by 2% to £699m
(2022: £688m) with price realisation and volume increases in mining,
partially offset by a decrease in infrastructure volumes. Year-on-year
revenues from infrastructure markets decreased by 14%.
Adjusted operating profit increased by 11% to £122m (2022: £109m)
on a constant currency basis, as the Division benefited from strong
execution and operational efficiencies.
Adjusted operating margin on a constant currency basis was 17.4%
(2022: 15.9%), with the year-on-year improvement of 150bps
reflecting strong operational efficiency.
Operating cash flow increased by 47% to £137m (2022: £93m)
reflecting growth in operating profit and a decrease in working capital
outflow to £4m (2022: £33m). Working capital movements include a
small reduction in inventory, and a modest increase and decrease in
receivables and payables respectively.
The Weir Group PLC Annual Report and Financial Statements 2023
37
Strategic Report
Governance
Financial Statements
Additional Information
Financial review
We delivered strong growth
in revenue and operating profit,
margin expansion and met our
free operating cash conversion
target. Leverage reduced to 1.1
times and our balance sheet
remains strong.
Revenue1
£2,636m
+9%2
Adjusted operating profit1,3
£459m
+18%2
Adjusted operating margin1,3
17.4%
+140bps
Free operating cash conversion
85%
2,423
2,636
2022
2023
388
459
2022
2023
16.0
17.4
2022
2023
87
85
2022
2023
1.
Continuing operations.
2.
2022 restated at 2023 average exchange rates.
3.
Profit figures before adjusting items (note 2 of the Group Financial Statements).
4. Calculation is on a lender covenant basis with net debt at average exchange rates.
The Weir Group PLC Annual Report and Financial Statements 2023
38
Overview
Strong execution through 2023 supported by a record opening order
book saw the Group deliver year-on-year growth in revenue and
operating profit, significantly expanding our operating margins and
meeting our free operating cash conversion target. With leverage
reducing to 1.1 times, our balance sheet remains strong with
significant liquidity to support our future growth ambitions.
Our business model of vertically integrated operations and market-
leading positions ensures that we continue to deliver for our
customers while growing margins through operational efficiency, the
initial realisation of benefits from our Performance Excellence
programme and appropriate price increases despite a slightly adverse
revenue mix.
We enter 2024 with a strong order book, continued expansion in our
installed base and positive production trends in our mining markets.
Combined with our focus on delivering the benefits from our
Performance Excellence programme, for which we recently doubled
our target savings, we are well placed to progress further towards
our cash conversion target of between 90% and 100% in 2024 and
our new medium-term operating margin target of 20% in 2026.
Financial highlights
Continuing operations order input was in line year-on-year on a
constant currency basis, reflecting continued strength in demand for
our solutions. Demand for aftermarket (AM) was stable with growth
in mining offset by oil sands and infrastructure. Towards the end of
the year we saw a slight strengthening in AM orders with Q4 up 1%
year-on-year and 2% sequentially. In original equipment (OE), we
saw an overall 3% contraction in orders in comparison to a strong
comparator in 2022. Demand was driven by orders for small
brownfield and debottlenecking projects at existing mines with
momentum continuing through the year.
Continuing operations revenue increased 9% on a constant currency
basis, reflecting strong execution, delivery of our record opening
order book and price realisation. On a reported basis, revenues
increased 7%, impacted by a foreign exchange translation headwind of
£49m. Overall book-to-bill was 0.98.
Adjusted operating profit from continuing operations increased by
£64m (16%) to £459m on a reported basis (2022: £395m). Excluding
a £7m foreign currency translation headwind, the constant currency
increase was £71m (18%).
Continuing operations adjusted profit before tax of £411m was an
increase of £63m from £348m in the prior year, after a translational
foreign exchange headwind of £6m. Adjusted operating margin of
17.4% is 140bps ahead of 2022 on both constant currency and as
reported bases. Continuing operations adjusting items increased by
£3m to £90m (2022: £87m) with the current year mainly driven by
costs associated with our Performance Excellence programme and
an increase in US asbestos-related provision.
Statutory profit for the year after tax from total operations of £229m
(2022: £214m) reflects strong operational efficiency.
Cash generated from operations increased by £78m to £526m in
the year, and reflects an increase in profitability together with an
improvement in working capital performance, which saw working
capital as a percentage of sales improve to 21% from 24% in the
prior year. Free operating cash conversion of 85% (2022: 87%) is in
line with our external target of between 80% and 90%. A free cash
inflow of £238m funded dividends, exceptional cash flows, and
outflows in relation to acquisitions of subsidiaries and disposal of
discontinued operations, leaving a net cash inflow of £116m.
Favourable foreign exchange retranslations of £2m offset by adverse
movements in lease liabilities of £8m and £3m other non-cash
movements resulted in net debt decreasing by £107m to £690m. Net
debt to EBITDA on a lender covenant basis was 1.1 times4 compared
to a lender covenant level of 3.5 times.
Strategic Report
Governance
Financial Statements
Additional Information
Strategic Report
Governance
Financial Statements
Additional Information
2,423
2,636
Financial highlights
Financial review
We delivered strong growth
in revenue and operating profit,
margin expansion and met our
free operating cash conversion
target. Leverage reduced to 1.1
times and our balance sheet
remains strong.
Revenue1
£2,636m
+9%2
Adjusted operating profit1,3
£459m
+18%2
Adjusted operating margin1,3
17.4%
+140bps
Free operating cash conversion
85%
2022
2023
388
459
2022
2023
16.0
17.4
2022
2023
87
85
2022
2023
1.
Continuing operations.
2.
2022 restated at 2023 average exchange rates.
3.
Profit figures before adjusting items (note 2 of the Group Financial Statements).
4. Calculation is on a lender covenant basis with net debt at average exchange rates.
Overview
Strong execution through 2023 supported by a record opening order
book saw the Group deliver year-on-year growth in revenue and
operating profit, significantly expanding our operating margins and
meeting our free operating cash conversion target. With leverage
reducing to 1.1 times, our balance sheet remains strong with
significant liquidity to support our future growth ambitions.
Our business model of vertically integrated operations and market-
leading positions ensures that we continue to deliver for our
customers while growing margins through operational efficiency, the
initial realisation of benefits from our Performance Excellence
programme and appropriate price increases despite a slightly adverse
revenue mix.
We enter 2024 with a strong order book, continued expansion in our
installed base and positive production trends in our mining markets.
Combined with our focus on delivering the benefits from our
Performance Excellence programme, for which we recently doubled
our target savings, we are well placed to progress further towards
our cash conversion target of between 90% and 100% in 2024 and
our new medium-term operating margin target of 20% in 2026.
Continuing operations order input was in line year-on-year on a
constant currency basis, reflecting continued strength in demand for
our solutions. Demand for aftermarket (AM) was stable with growth
in mining offset by oil sands and infrastructure. Towards the end of
the year we saw a slight strengthening in AM orders with Q4 up 1%
year-on-year and 2% sequentially. In original equipment (OE), we
saw an overall 3% contraction in orders in comparison to a strong
comparator in 2022. Demand was driven by orders for small
brownfield and debottlenecking projects at existing mines with
momentum continuing through the year.
Continuing operations revenue increased 9% on a constant currency
basis, reflecting strong execution, delivery of our record opening
order book and price realisation. On a reported basis, revenues
increased 7%, impacted by a foreign exchange translation headwind of
£49m. Overall book-to-bill was 0.98.
Adjusted operating profit from continuing operations increased by
£64m (16%) to £459m on a reported basis (2022: £395m). Excluding
a £7m foreign currency translation headwind, the constant currency
increase was £71m (18%).
Continuing operations adjusted profit before tax of £411m was an
increase of £63m from £348m in the prior year, after a translational
foreign exchange headwind of £6m. Adjusted operating margin of
17.4% is 140bps ahead of 2022 on both constant currency and as
reported bases. Continuing operations adjusting items increased by
£3m to £90m (2022: £87m) with the current year mainly driven by
costs associated with our Performance Excellence programme and
an increase in US asbestos-related provision.
Statutory profit for the year after tax from total operations of £229m
(2022: £214m) reflects strong operational efficiency.
Cash generated from operations increased by £78m to £526m in
the year, and reflects an increase in profitability together with an
improvement in working capital performance, which saw working
capital as a percentage of sales improve to 21% from 24% in the
prior year. Free operating cash conversion of 85% (2022: 87%) is in
line with our external target of between 80% and 90%. A free cash
inflow of £238m funded dividends, exceptional cash flows, and
outflows in relation to acquisitions of subsidiaries and disposal of
discontinued operations, leaving a net cash inflow of £116m.
Favourable foreign exchange retranslations of £2m offset by adverse
movements in lease liabilities of £8m and £3m other non-cash
movements resulted in net debt decreasing by £107m to £690m. Net
debt to EBITDA on a lender covenant basis was 1.1 times4 compared
to a lender covenant level of 3.5 times.
Financial review
continued
Continuing operations orders
Orders1
£2.6bn
0%2
Orders at £2,585m on a constant currency basis were broadly stable
year-on-year. Original equipment orders were £576m and aftermarket
orders were £2,009m.
Minerals orders marginally increased year-on-year on a constant
currency basis to £1,895m (2022: £1,886m), with a book-to-bill of
0.98. Demand was strong in most regions, particularly Australasia
reflecting recent market share gains and a ramp-up in production at
recently commissioned lithium mines, however levels of activity in
North America were lower than in 2022 as a result of a demand
correction in the oil sands market. Order growth was strongest in
copper and battery metals. OE orders fell by 6% against a strong
2022 which included £33m of large nickel projects in Indonesia. AM
orders grew 3% year-on-year, with a contribution from pricing and an
increase in volume from customers in hard rock mining, partially
offset by reduced orders from customers in the Canadian oil sands
and a loss of orders from Russia. Excluding orders from Russia in the
prior year, AM orders increased by 4%. Contribution from pricing in
H2 was lower than in H1, as the pricing environment normalised
through the year. AM orders represented 73% of total orders (2022:
71%), and mining end-markets accounted for 79% of total orders
(2022: 76%).
ESCO orders decreased 2% on a constant currency basis to £690m
(2022: £704m) with growth in mining offset by weaker infrastructure
markets. Increased demand for mining attachments is reflected in
our OE order growth of 41% with OE representing 9% of total orders
(2022: 6%). Notwithstanding this growth, AM continues to be the
largest part of ESCO, accounting for 91% of total orders in the year
(2022: 94%). The Division’s book-to-bill for the year was 0.99.
Continuing operations revenue
Revenue1
£2.6bn
+9%2
Revenue of £2,636m increased 9% on a constant currency basis.
Aftermarket accounted for 77% of revenues, down from 80% in the
prior year. Reported revenues increased 7% (2022: £2,472m),
impacted by a foreign exchange translation headwind of £49m.
Minerals revenue grew 12% on a constant currency basis at
£1,937m (2022: £1,735m), reflecting strong execution and price
realisation. Half-on-half, revenue grew sequentially through the year,
as we delivered our record opening order book in H1 and continued
to benefit from strength in our mining markets in H2, with orders
converting to revenue. Revenue growth in Canada was particularly
high, following strong order growth in the Canadian oil sands last
year. Partly offsetting this was reduced revenue from Russia, which
year-on-year decreased by £38m as we wound down operations. Full
year revenue mix moved towards OE, which accounted for 28% of
revenue, up from 26% in the prior year.
ESCO revenue increased 2% on a constant currency basis to £699m
(2022: £688m) with price realisation and volume increases in mining,
partially offset by a decrease in infrastructure volumes. Year-on-year
revenues from infrastructure markets decreased by 14%.
Continuing operations profit
Adjusted operating profit1
£459m
+18%2
Minerals adjusted operating profit increased £58m on a constant
currency basis to £376m (2022: £318m) as the Division benefited
from increased volumes, strong execution and the initial benefits of
Performance Excellence. In addition, year-on-year, the Division
benefited from a reduction in adverse transactional FX movements of
£8m. Adjusted operating margin on a constant currency basis was
19.4% (2022: 18.3%), with the 110bps increase driven by factors
above partially offset by the movement in revenue mix towards OE.
ESCO adjusted operating profit increased by 11% on a constant
currency basis to £122m (2022: £109m), primarily as the Division
benefited from strong execution and operational efficiencies.
Adjusted operating margin of 17.4% was up 150bps on a constant
currency basis (2022: 15.9%).
Unallocated costs are in line with the prior year at £39m.
Statutory operating profit for the period of £368m was £61m
favourable to the prior year, with the increase in adjusted operating
profit of £64m being partially offset by an increase in adjusting items.
Continuing operations adjusting items
Continuing operations adjusting items increased by £3m to £90m
(2022: £87m). Intangibles amortisation decreased to £25m (2022:
£36m) primarily as a result of completed multi-year investment
activities now being recognised within adjusted operating profit.
Exceptional items decreased by £27m to £22m (2022: £49m). Costs
of £29m (2022: £3m) were recognised relating to initiatives across all
three pillars of our Performance Excellence programme - lean
processes, capacity optimisation and global business services. These
were partially offset by a net credit of £8m following the reversal of
prior year provisions in respect of the wind down of operations in
Russia as working capital recoveries have exceeded initial
expectations. Exceptional costs in 2022 relating to our Russian
operations totalled £44m. Exceptional items also included £1m for
acquisition and integration related costs. Other adjusting items of
£43m (2022: £3m) are primarily related to adjustments to the legacy
US asbestos-related provision following a period of increased claims
and the revised claims projections from the latest triennial actuarial
review undertaken in the year.
Continuing operations net finance costs
Net finance costs were £48m (2022: £47m) with an increase in
finance costs of £15m after a foreign currency translation tailwind of
£1m on USD denominated debt. The increase in costs was largely
offset by higher finance income in the year, with both being driven by
higher interest rates in the year.
Net finance costs (excluding retirement benefit related costs) were
covered 10.6 times by adjusted operating profit from continuing
operations on a lender covenant basis (2022: 9.5 times), compared
to a covenant level of 3.5 times.
Continuing operations adjusted profit before tax
Adjusted profit before tax from continuing operations was £411m
(2022: £348m), after a foreign currency translation headwind of £6m.
The statutory profit before tax from continuing operations of £321m
compares to £260m in 2022, the increase is primarily due to the
increase in adjusted operating profit.
The Weir Group PLC Annual Report and Financial Statements 2023
38
The Weir Group PLC Annual Report and Financial Statements 2023
39
Strategic Report
Governance
Financial Statements
Additional Information
Financial review
continued
Results summary
Continuing operations1
Orders2
Revenue
Adjusted operating profit3
Adjusted operating margin3
Statutory operating profit
Net finance costs
Adjusted profit before tax3
Statutory profit before tax
Adjusted effective tax rate3
Adjusted earnings per share3
Total Group
Statutory profit after tax
Statutory earnings per share
Operating cash flow3
Free operating cash conversion
Dividend per share
Net debt
2023
£2,585m
£2,636m
£459m
17.4%
£368m
£48m
£411m
£321m
27.0%
115.9p
£229m
88.2p
£526m
85%
38.6p
£690m
2022
£2,590m
£2,472m
£395m
16.0%
£308m
£47m
£348m
£260m
26.6%
98.4p
£214m
82.5p
£448m
87%
32.8p
£797m
As reported
n/a
+7%
+16%
+140bps
+20%
+1%
+18%
+23%
+40bps
+18%
+7%
+7%
+17%
-2pp
+18%
+£107m
Constant currency2
0%
+9%
+18%
+140bps
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
The Financial review includes a mixture of GAAP measures and those which have been derived from our reported results in order to provide a useful basis for measuring our operational
performance. Adjusted results are for continuing operations before adjusting items as presented in the Consolidated Income Statement. Details of alternative performance measures are
provided in note 3 of the Group Financial Statements.
1. Continuing operations.
2. 2022 restated at 2023 average exchange rates.
3. Profit figures before adjusting items. Total operations operating cash flow (cash generated from operations) excludes additional pension contributions, exceptional and other adjusting cash
items and income tax paid. Total operations net cash generated from operating activities was £394m (2022: £321m).
4. Calculation is on a lender covenant basis with net debt at average exchange rates.
Continuing operations taxation
The adjusted tax charge for the year of £111m (2022: £93m) on
adjusted profit before tax from continuing operations of £411m
(2022: £348m) represents an adjusted effective tax rate (ETR) of
27.0% (2022: 26.6%). Our ETR is principally driven by the
geographical mix of profits arising in our business and, to a lesser
extent, the impact of Group financing and transfer pricing
arrangements.
A tax credit of £20m has been recognised in relation to continuing
operations adjusting items (2022: £45m).
In terms of cash tax, the total Group paid income tax of £104m in
2023 across all of its jurisdictions compared to £93m in 2022. The
increase is a combination of increased profitability across the Group
combined with an increase in withholding taxes suffered on cash
repatriation to the UK, partly offset by cash tax refunds in the US.
Continuing operations profit after tax
The continuing operations adjusted profit after tax is £300m (2022:
£255m). The statutory profit after tax for the year from continuing
operations is £230m (2022: £213m).
Discontinued operations statutory loss after tax
The statutory loss after tax for the year from discontinued operations
was £1m (2022: profit of £1m) related to the finalisation of certain tax
indemnities under the sale and purchase agreement for the Oil & Gas
Division which was disposed of in 2021.
Acquisition of SentianAI
The Group completed the acquisition of Sentiantechnologies AB
(SentianAI) on 21 November 2023 for an enterprise value of SEK87m
(£7m) less customary debt and working capital adjustments, which
resulted in an initial cash consideration of £6m and deferred
consideration of £1m, payable in 2025.
Capital expenditure
Net capital expenditure increased by £25m to £83m (2022: £58m),
mainly due to the construction of our new ESCO foundry in China.
Lease payments of £31m were in line with the prior year (2022:
£31m).
Cash flow and net debt
Cash generated from operations3
£526m
+17%
Cash generated from total operations increased by £78m to £526m
(2022: £448m) primarily driven by the increase in adjusted operating
profit, coupled with an improvement in working capital of £21m
(2023: outflow of £28m vs 2022: £49m). The reduced working capital
cash outflow reflects an improvement in inventory, only partially
offset by receivables and payables. This reflects a combination of
phasing of purchases and the initial benefit of actions under our
Performance Excellence programme, as well as lower utilisation of
invoice discounting facilities. As a result, working capital as a
percentage of sales decreased to 21% from 24% in the prior year.
Non-recourse invoice discounting facilities, primarily customers
supply chain financing facilities, of £33m (2022: £45m) were utilised
and suppliers chose to utilise supply chain financing facilities of £32m
(2022: £54m). Net cash generated from operating activities is £394m
(2022: £321m).
The Weir Group PLC Annual Report and Financial Statements 2023
40
Strategic Report
Governance
Financial Statements
Additional Information
Financial review
continued
Free operating cash flow
£392m
Free operating cash flow increased by £50m to £392m (2022:
£342m) resulting in free operating cash conversion of 85% (2022:
87%) (refer to note 3 of the Group Financial Statements). This was in
line with our 2023 target of between 80% and 90% and reflected the
above noted improvement in cash generation, partially offset by the
increase in capital expenditure in the year as we continued to invest
in our new foundry in China. We continue to target free operating
cash conversion for 2024 of between 90% and 100% driven by
working capital efficiency and maintaining capex and lease costs
closer to one times depreciation.
Free cash flow (refer to note 3 of the Group Financial Statements)
from total operations was an inflow of £238m (2022: £193m). In
addition to the movements noted above, this was primarily impacted
by an increase in tax payments of £11m, partially offset by lower net
finance costs of £5m due to phasing.
Net debt
£690m
Net debt decreased by £107m to £690m (2022: £797m) and includes
£117m (2022: £115m) in respect of IFRS 16 'Leases'. The movement
reflects free cash inflow of £238m, offset by dividends of £96m,
exceptional cash flows of £18m, outflows of £8m in relation to
acquisition of subsidiaries and disposals of discontinued operations,
an increase in lease liabilities of £8m, other movements of £3m and
favourable FX on translation of £2m. Net debt to EBITDA on a lender
covenant basis was 1.1 times4 (2022: 1.5 times) compared to a
covenant level of 3.5 times.
In June 2023, the Group completed the issue of £300m five-year
Sustainability-Linked Notes due to mature in June 2028. These Notes
are in addition to the US$800m Sustainability-Linked Notes drawn in
May 2021 and due to mature in May 2026. The Group also continued
to have access to its US$800m Revolving Credit Facility (RCF) and, in
March 2023, exercised the option to extend the maturity date to April
2028, with the option to extend for a further year. As a result of
strong cash generation in the year, the Group reduced its RCF by
US$200m to US$600m in February 2024. Following these actions,
the Group will have more than £700m of immediately available
committed facilities and cash balances.
Pensions
The Group has a mixture of defined benefit pension plans and other
employee compensation or medical plans in both the UK and North
America.
The IAS 19 funding position across these schemes reduced from a
net surplus of £15m at December 2022 to a net surplus of £2m at
December 2023. This is primarily due to changes in financial
assumptions, which resulted in a loss of £13m (2022: gain of
£303m), mainly due to the decrease in discount rates over the year
compared to increasing discount rates in the prior year, as well as a
loss on plan assets of £12m (2022: £224m).
These movements contributed to a charge of £28m (2022: credit of
£65m) being recognised in the Consolidated Statement of
Comprehensive Income.
During the year the UK Main Plan completed a further pensioner buy-
in with the full buy-in premium amounting to £136m, which results in
insurance policy assets held for the UK scheme now covering 60%
(2022: 39%) of the UK’s total funded obligation, reducing the Group’s
exposure to actuarial movements. In addition, the strength of the
funding position of the UK Main Plan means that additional pension
cash contributions will reduce by approximately £6m from 2024.
Employer pension contributions in the year totalled £13m
(2022: £14m).
Asbestos-related provision
A US-based subsidiary of the Group is co-defendant in lawsuits
pending in the United States in which plaintiffs are claiming damages
arising from alleged exposure to products previously manufactured
which contained asbestos. At the end of 2023, there were 1,788
outstanding asbestos-related claims in the US (2022: 1,716).
The US subsidiary has recognised a US asbestos-related provision
of £76m (2022: £53m), which reflects the mean value of expected
future settlements and defence costs based on the triennial actuarial
review, which was completed in December 2023. Insurance cover
exists for claims with a pre-1981 date of first exposure and, as a
result, a corresponding insurance asset of £15m (2022: £32m) is
recognised. The net result is a £61m liability (2022: £21m). A charge
of £43m (2022: £3m) has been recognised as an other adjusting item
in the year (note 6 of the Group Financial Statements).
Based on the profile of the claims in the actuarial model, external
advisers expect the insurance cover and associated limits currently
in place related to claims with an exposure date pre-1981 to exhaust
during the first half of 2025. Following the exhaustion of the
insurance asset, the US subsidiary will be required to fund future
settlements and defence costs of c.£7m per annum from mid 2025.
Full details of the provision, plus the related insurance receivable, are
provided in note 22 to the Group Financial Statements.
Key accounting and policy judgements
The key accounting and policy judgements are contained within
note 2 to the Group Financial Statements on page 151.
Earnings per share
Adjusted earnings per share from continuing operations
115.9p
+18%
Adjusted earnings per share from continuing operations increased by
18% to 115.9p (2022: 98.4p) reflecting the increased profit offset by
higher effective tax rate in the year. Statutory reported earnings per
share from total operations is 88.2p (2022: 82.5p). The weighted
average number of shares in issue was 258.4m (2022: 258.7m).
Dividend
Full year dividend
38.6p
The Board is recommending a final dividend of 20.8p, resulting in a
total dividend of 38.6p for the year. If approved at the Annual General
Meeting on 25 April 2024, the final cash dividend will be paid on 31
May 2024 to Shareholders on the register as at 19 April 2024.
The Weir Group PLC Annual Report and Financial Statements 2023
41
Strategic Report
Governance
Financial Statements
Additional Information
Strategic Report
Governance
Financial Statements
Additional Information
Sustainability introduction
Maturing from a sustainability
roadmap to a fully integrated
sustainability strategy.
2023 was another year of strong progress against
our sustainability roadmap
Highlights include:
• Carbon emissions targets approved by the Science Based Targets
initiative (SBTi).
• Climate strategy, progress and governance recognised by our
continued inclusion in the CDP climate 'A List'.
• Refreshed climate scenarios for third year of TCFD disclosures.
• Zero Harm Behaviours workshops engaged 8,000+ employees
at 140 sites, generating valuable insights and data.
• The CCLA Corporate Mental Health benchmark – UK100
recognised Weir for the biggest improvement in managing
workplace mental health.
• Five new chapters of the Global Weir Women’s Network
established, taking the total to 14, and Group-wide Pride month
celebrations in June.
• Positive response to the Group’s investment grade Sterling
denominated Sustainability-Linked Notes in June.
• Completed a comprehensive double materiality review, leading
to an evolution of our sustainability strategy.
• Establishment of a new Sustainability and Technology Committee and
ESG data assurance roadmap (see pages 80 and 102 respectively).
We are continuing to listen and evolve
Sustainability continues to elevate in importance for all our key
stakeholders, and is increasingly driving associated decisions and
actions. As such, it is critical that we listen through our materiality
assessment (see page 43), as well as day-to-day management,
and use these insights to inform our strategy.
We have used these insights to mature our
sustainability strategy
In 2019, we designed our sustainability roadmap to support Weir’s
purpose to enable the sustainable and efficient delivery of the natural
resources essential to create a better future for the world. We
purposely chose not to cover all bases or report every ESG metric.
Instead we focused on four strategic areas that mattered most to our
stakeholders and where we could drive the most positive impact.
Since 2019, we have taken a number of positive steps to mature our
sustainability roadmap allowing us to progress to a fully integrated
sustainability strategy:
• Embedding – We have chosen to embed the execution of our
sustainability strategy in both our businesses and functions,
instead of building a large centralised sustainability function.
Accountability is clear and owned, and the priority ESG outcomes
have been linked to employee remuneration since 2020.
• Integration – In 2022, we launched Weir's first Enterprise
Technology Roadmap (ETR) focused on providing solutions to five
strategic customer challenges: move less rock, use less energy,
use water wisely, create less waste, and boost with digital (see
pages 30 to 31). This has driven further integration of our
sustainability and technology strategies.
• Revalidation – In addition to our ongoing voice of customer,
investor, employee and society channels, in 2023 we updated our
materiality assessment adopting a double materiality approach
which validated that existing priorities remain relevant. A full
summary of our approach and outcomes is on pages 43 to 44.
• Refocus – Throughout, we have challenged ourselves regularly
to focus on the Group's most strategic areas to enable pace and
impact. In 2023, we comprehensively updated our materiality
assessment and reframed our sustainability strategy into two
concise and complementary areas that carry forward our existing
priorities and address topics where priority has increased since
2019 – see more on page 45.
We've evolved our sustainability visual framework to reflect this
maturing from a sustainability roadmap to a fully integrated
sustainability strategy as shown below.
We have evolved our sustainability roadmap into an integrated strategy
Sustainability introduction
continued
Double materiality assessment
Investors
In 2023 we carried out a comprehensive sustainability materiality
assessment, with the results used to inform the evolution of our
sustainability strategy described on page 45.
Overview
The assessment considered evolving customer needs and the
perceptions of employees, investors and other stakeholders, as well
as the emerging regulatory landscape for sustainability reporting. It
updated our first materiality assessment conducted in 2019 which
informed our previous sustainability roadmap.
With support from an external advisor, we took an approach based
on double materiality, a concept proposed by the EU Corporate
Sustainability Reporting Directive (CSRD) and supporting standards
such as European Sustainability Reporting Standard (ESRS) 1. Double
materiality considers impacts the company has on people and planet
(inside-out view) as well as the financial risks and opportunities for
Weir resulting from those topics (outside-in view).
Stakeholder engagement
We conducted desktop research and sought direct inputs from key
internal and external stakeholders as outlined below.
Weir
Executive.
and Board.
• One-to-one interviews with members of the Board and Group
• Responses to a survey open to all employees.
• Outcome validation sessions with both the Group Executive
• Scoring and text responses to two questions in our global
employee engagement surveys.
I believe Weir is
committed to being a
sustainable business
8.6
8.8
Changes since 2019 included:
2021
2023
I feel empowered to take
actions to make Weir
more sustainable
• ESG-focused questions included in investor perceptions study.
• Ongoing direct engagement with investors on ESG topics involving
our Investor Relations and Sustainability teams.
We were encouraged that stakeholders participated actively in this
work. This indicates increasing priority on sustainability topics linked
to our operations and to mining, as well as a desire to engage with
providers of technology solutions to help accelerate sustainable
mining.
Topic identification
The stakeholder-driven double-materiality approach aligns with the
EU CSRD which, based on current legislation, will apply to us from
a Group reporting perspective under the non-EU parent group rules.
We also took account of other emerging requirements, including the
International Sustainability Standards Board (ISSB), the Taskforce for
Nature Related Financial Disclosure (TNFD) and the EU Taxonomy.
Since the universe of potential material sustainability topics is very large,
we wanted to maximise strategic value to the business by focusing on
the most material topics where we have significant impact, risk or
opportunity and the ability to make a meaningful difference.
This ‘better not more’ approach is aligned with guidance from the
Financial Reporting Council. Results are shown in the materiality
matrix on the next page.
Key changes since 2019
The assessment revalidated our overall focus on topics relating to
environment, protecting our people and culture, with increased
urgency around the need to manage key impact areas and to show
quantified progress. This includes some sector-specific concerns
about the mining industry – increasing critical mineral supply to drive
the transition to a low-carbon economy, minimising environmental
impact, protecting communities and licence to operate - as well as
our role as a technology provider.
• Increased focus on downstream water and waste topics. Waste is
most significantly driven by mine tailings which has associated
impacts on downstream biodiversity and pollution. Circularity of
Weir products at the end of life is considered less material but has
future potential. These topics align with our Enterprise Technology
Roadmap (ETR). See pages 30 to 31.
• More emphasis on responsible upstream supply chain. We
recognise this as an area for action and have engaged Division
supply chain teams to oversee roll-out of responsible supply chain
practices and tools across the group.
• Greater value placed on quantification and the provision of robust
ESG data, and recognition of the accelerator effect of emergent
regulation. This is aligned with our ongoing focus on digitisation,
ESG data assurance, and reporting.
U
ZERO TIR
ENABLING
NET ZERO
LEADING
eNPS SCORE
SBTi-aligned
REDUCTION
IN CO2e
BY 2030
t u re
r c u l
u
urture o
N
Deliver
sustainable Weir
R
e
d
u
c
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ur footprint
n
S tr e
u r f o
o
y
g
r
e
n
U s e le s s e
se
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p
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Accelerate
sustainable mining
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C r
a
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a t e less w
Customers
Next steps
• Desktop reviews of customers and peer companies to understand
published ESG policies and performance.
• Joint interview sessions with senior customer-facing employees in
both our Minerals and ESCO Divisions provided voice-of-customer
input. This method was chosen to enable views from a much
wider range of geography, commodity sector, role within
Since completing the assessment, we have assessed each high
priority topic with respective owners in our Divisions and functions.
This has identified less mature areas to accelerate by defining
governance, strategies and KPIs, as well as areas where governance
can be refined and areas where it is already well developed. During
2024, we plan to further analyse each topic to drive clarity of
company, company size and corporate structure than would have
accountability and purpose.
been possible with individual interviews.
Sector organisations
• Interviews with industry associations involved in responsible
business and the mining sector.
In addition, we intend to review all lower priority topics identified on
the matrix to identify relevant metrics to report. We also aim to
continuously improve the integrity of reported data through our ESG
assurance roadmap – see page 102.
Find out more
Our sustainability strategy
See page 45
urture o
N
t u re
r c u l
u
C
h
a
z
e
m
r
o h
p
i
o
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r
n
The Weir Group PLC Annual Report and Financial Statements 2023
42
m
The Weir Group PLC Annual Report and Financial Statements 2023
43
Deliver
sustainable Weir
R
e
d
u
c
e
o
ur footprint
g th e n
n d atio ns
u
S tr e n
u r f o
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e
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U s e le s s e
C
h
a
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m
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Accelerate
sustainable mining
U
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C r
Strategic framework
v04 - 19/02/2024
UNIVERS
SOLUTIONSCREATING SUSTAINABLEFOOTPRINTREDUCING OURZERO HARMCHAMPIONINGNURTURING OURUNIQUE CULTURE8.18.420212023
Strategic Report
Governance
Financial Statements
Additional Information
Sustainability introduction
continued
Double materiality assessment
In 2023 we carried out a comprehensive sustainability materiality
assessment, with the results used to inform the evolution of our
sustainability strategy described on page 45.
Investors
• ESG-focused questions included in investor perceptions study.
• Ongoing direct engagement with investors on ESG topics involving
our Investor Relations and Sustainability teams.
I believe Weir is
committed to being a
sustainable business
8.6
8.8
Changes since 2019 included:
Overview
The assessment considered evolving customer needs and the
perceptions of employees, investors and other stakeholders, as well
as the emerging regulatory landscape for sustainability reporting. It
updated our first materiality assessment conducted in 2019 which
informed our previous sustainability roadmap.
With support from an external advisor, we took an approach based
on double materiality, a concept proposed by the EU Corporate
Sustainability Reporting Directive (CSRD) and supporting standards
such as European Sustainability Reporting Standard (ESRS) 1. Double
materiality considers impacts the company has on people and planet
(inside-out view) as well as the financial risks and opportunities for
Weir resulting from those topics (outside-in view).
Stakeholder engagement
We conducted desktop research and sought direct inputs from key
internal and external stakeholders as outlined below.
Weir
• One-to-one interviews with members of the Board and Group
Executive.
• Responses to a survey open to all employees.
• Outcome validation sessions with both the Group Executive
and Board.
• Scoring and text responses to two questions in our global
employee engagement surveys.
2021
2023
I feel empowered to take
actions to make Weir
more sustainable
Customers
• Desktop reviews of customers and peer companies to understand
published ESG policies and performance.
• Joint interview sessions with senior customer-facing employees in
both our Minerals and ESCO Divisions provided voice-of-customer
input. This method was chosen to enable views from a much
wider range of geography, commodity sector, role within
company, company size and corporate structure than would have
been possible with individual interviews.
Sector organisations
• Interviews with industry associations involved in responsible
business and the mining sector.
The Weir Group PLC Annual Report and Financial Statements 2023
43
We were encouraged that stakeholders participated actively in this
work. This indicates increasing priority on sustainability topics linked
to our operations and to mining, as well as a desire to engage with
providers of technology solutions to help accelerate sustainable
mining.
Topic identification
The stakeholder-driven double-materiality approach aligns with the
EU CSRD which, based on current legislation, will apply to us from
a Group reporting perspective under the non-EU parent group rules.
We also took account of other emerging requirements, including the
International Sustainability Standards Board (ISSB), the Taskforce for
Nature Related Financial Disclosure (TNFD) and the EU Taxonomy.
Since the universe of potential material sustainability topics is very large,
we wanted to maximise strategic value to the business by focusing on
the most material topics where we have significant impact, risk or
opportunity and the ability to make a meaningful difference.
This ‘better not more’ approach is aligned with guidance from the
Financial Reporting Council. Results are shown in the materiality
matrix on the next page.
Key changes since 2019
The assessment revalidated our overall focus on topics relating to
environment, protecting our people and culture, with increased
urgency around the need to manage key impact areas and to show
quantified progress. This includes some sector-specific concerns
about the mining industry – increasing critical mineral supply to drive
the transition to a low-carbon economy, minimising environmental
impact, protecting communities and licence to operate - as well as
our role as a technology provider.
• Increased focus on downstream water and waste topics. Waste is
most significantly driven by mine tailings which has associated
impacts on downstream biodiversity and pollution. Circularity of
Weir products at the end of life is considered less material but has
future potential. These topics align with our Enterprise Technology
Roadmap (ETR). See pages 30 to 31.
• More emphasis on responsible upstream supply chain. We
recognise this as an area for action and have engaged Division
supply chain teams to oversee roll-out of responsible supply chain
practices and tools across the group.
• Greater value placed on quantification and the provision of robust
ESG data, and recognition of the accelerator effect of emergent
regulation. This is aligned with our ongoing focus on digitisation,
ESG data assurance, and reporting.
Next steps
Since completing the assessment, we have assessed each high
priority topic with respective owners in our Divisions and functions.
This has identified less mature areas to accelerate by defining
governance, strategies and KPIs, as well as areas where governance
can be refined and areas where it is already well developed. During
2024, we plan to further analyse each topic to drive clarity of
accountability and purpose.
In addition, we intend to review all lower priority topics identified on
the matrix to identify relevant metrics to report. We also aim to
continuously improve the integrity of reported data through our ESG
assurance roadmap – see page 102.
8.18.420212023 Strategic Report
Governance
Financial Statements
Additional Information
Sustainability introduction
continued
2023 double materiality assessment
Displayed below is the materiality matrix which shows the material impacts, risks and opportunities (IROs) for Weir identified from our double
materiality assessment. Recognising that these topics are all material for Weir, the matrix shows the relative positioning of each topic based on
potential financial materiality (i.e. impact on Weir) and impact materiality (i.e. impact by Weir). We have subsequently grouped the topics based
on their strategic importance as a means of informing the update to our sustainability strategy.
Materiality matrix
)
t
u
o
-
e
d
i
s
n
i
(
y
t
i
l
a
i
r
e
t
a
m
t
c
a
p
m
I
5
1
2
10
4
11
63
7
8
13
14
12
9
18
16
15
17
E = Environmental IROs
S = Social IROs
G = Governance IROs
Low
Medium
High
Financial materiality (outside-in)
Higher materiality
Higher impact, risk or opportunity
requiring strategic response with
sustainability KPIs and targets.
Governance topics
Foundational elements expected of
all responsible businesses.
Lower materiality
Lower impact, risk or opportunity
requiring operational response
and reporting.
1
2
3
4
5
6
7
8
Product responsibility and
innovation: Climate change
impacts (downstream)
Climate change impacts
(own operations)
Water consumption (downstream)
Waste circularity (downstream)
Workforce health and safety
Customer health and safety
Inclusion, diversity and equity
Workforce engagement –
talent attraction
9
10
11
12
Data privacy and cyber security
(own operations)
Responsible business practices
(own operations)
Customer data and privacy and
cyber security
Responsible supply chain practices
(own operations)
13
14
15
16
17
18
Waste circularity (own operations)
Product responsibility and
innovation: Biodiversity and
land use (downstream)
Product responsibility and
innovation: Pollution (downstream)
Biodiversity and land use
(own operations)
Water consumption
(own operations)
Community engagement
and impacts
The Weir Group PLC Annual Report and Financial Statements 2023
44
Strategic Report
Governance
Financial Statements
Additional Information
Sustainability introduction
continued
Our sustainability strategy
We've evolved our sustainability visual framework to reflect both our progress since 2019 and the insight from our
latest materiality assessment, maturing from a sustainability roadmap to a fully integrated sustainability strategy.
t u re
r c u l
u
urture o
N
Deliver
sustainable Weir
R
e
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ur footprint
n
S tr e
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g
r
e
n
U s e le s s e
C
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Accelerate
sustainable mining
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C r
U
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Deliver sustainable Weir
Accelerate sustainable mining
Find out more on pages 46 to 47
Find out more on pages 48 to 49
Focused externally on solving Weir customers' biggest
sustainability challenges:
• Champion zero harm (IRO 6) – Our zero harm culture is just as
important on our customers' sites, both in the safety first
behaviours and actions of our people, and our product design and
stewardship. We address this through our approach to customer
health and safety, see page 58.
n
U s e le s s e
• Use less energy (IRO 1) – Mining today is energy intensive and
the industry accounts for around 3.5% of total global electrical
power consumption. Energy is a significant cost for miners and
contributes to their CO2e footprint, so there is a dual impetus for
them to use less energy in their processes. We are innovating
solutions that deliver significant energy savings, helping our
customers meet their sustainability goals. See more on pages 48
to 49.
se
U
w
r
g
y
e
a
t
l
s
i
e
e
r
y
w
• Use water wisely (IRO 3, 15) – Water is fundamental to the way
minerals are processed. However, in some parts of the world
there is not enough, and in some parts there is too much. So
miners want to use water wisely and reduce pollution risks. We
are developing tailored solutions that increase water recovery and
recycling rates and, where possible, introduce water-free process
steps. See more on page 48.
Accelerate
sustainable mining
• Create less waste (IRO 4, 14) – Today, over 90% of mined rock
ends up as tailings, the waste stream produced in conventional
mining processes. With technologies to tackle energy and water
use, and for more efficient rock movement, mining will create less
waste and lower volumes of tailings. In addition, we are working
on innovative ways to manage the tailings that are produced more
safely and sustainably. See more on page 48.
a t e less w
pio
ar
e
t
s
a
r
o h
C r
n
a
z
m
e
h
C
m
e
urture o
N
Focused internally on Weir's people, operations and ways of working:
t u re
• Champion zero harm (IRO 5) – keeping our people safe remains
a top priority for Weir and all our stakeholders. We address it
through our vision for a zero harm workplace where everyone
goes home safe and healthy. See more on page 46.
r c u l
z
e
C
h
a
m
u
r
o h
p
i
o
• Nurture our culture (IRO 7, 8, 18) – it continues to matter to all
a
n
r
our stakeholders that we maintain strong engagement, the ability
to attract talent and a strong approach to inclusion, diversity and
equity. We are proud of our unique blend of talent, technology and
culture and seek to inspire our people to do the best work of their
lives. See more on page 47.
Deliver
sustainable Weir
m
• Reduce our footprint (IRO 2, 13, 16, 17) – the latest materiality
R
e
d
u
assessment showed that the climate impacts of our own
operations is among the most material issues and so we continue
to act to reduce our own CO2e footprint. We are also actively
reducing our own waste and water and associated biodiversity
impact. See more on page 47.
ur footprint
S tr e n
u r f o
o
e
c
u
o
g th e n
n d atio ns
• Strengthen our foundations (IRO 9, 10 11, 12) – governance
topics were highlighted as foundational elements expected of all
responsible businesses and so we address these through the
Strengthen our foundations segment of our strategy. See more
on page 58.
The Weir Group PLC Annual Report and Financial Statements 2023
45
Strategic framework
v04 - 19/02/2024
UNIVERS
Strategic Report
Governance
Financial Statements
Additional Information
Sustainability review
Deliver sustainable Weir
Champion zero harm
Total Incident Rate (TIR)
0.42
2022: 0.41
Total incident rate (TIR) is our key performance metric to measure
operational safety performance. The SHE Management System sets
out how we manage SHE risk (see page 59), and our Zero Harm
Behaviours Framework helps us continuously improve our safety
culture, focusing on personal accountability and providing clear
guidance on behaviours to ensure safety at all times.
Outcomes
Our goal is to make Weir a zero harm workplace and so TIR of 0.42
(2022: 0.41) was disappointing relative to our ambition. We have
taken some important steps during 2023 which have informed and
underpin our improvement strategy for 2024, such as the continued
roll out of our Zero Harm Behaviours Framework, with the majority of
the 1,500 improvement actions identified from our gap analysis
workshops across 140 sites (see page 26) due for completion next
year. Other actions include further digitalisation of SHE data to
improve data analysis and insights, adding links to other data sources
such as our employee global survey results, and extending our SHE
learning programme launching 17 new e-learnings and 186 translated
modules in the year. This contributed to an increase in training
participation with over 23,000 protocol modules and over 58,000 life-
saving behaviour modules completed by our employees.
Other areas
• Our SHE Management System is to be followed by all sites and
includes SHE Standards and Protocols which are aligned to ISO
14001 and 45001. We also maintain certification to ISO 14001 and
45001 in applicable Weir sites, defined according to a site's risk
profile, with an accreditation rate of 65% in 2023.
• Managing environmental risk is key to our operations and our SHE
Management System details minimum standards for controlling
risks to air, land and water. During the year ended 31 December
2023, there were no significant environmental incidents, penalties
or fines reported at sites under our operational control.
• Our Health and Wellbeing Framework underpins the global
approach to support our employees' mental health and wellbeing
while having the flexibility to be tailored locally to reflect different
cultural workplace needs. Our progress on this area was
recognised in the 2023 CCLA Corporate Mental Health Benchmark
which assessed 100 of the largest UK-listed companies on their
global approach to workplace mental health. In 2023 we were the
biggest improver, climbing two tiers from tier 4 in 2022 to tier 2,
and we have committed to improve our CCLA score further with
our new management incentive measure for 2024 (see page 115).
Our website includes more information on local initiatives in
support of the framework and our policies which highlight our
commitment to a supportive culture for workplace mental health.
• Our zero harm culture is equally important in our own facilities and
on our customers sites, both in the safety first behaviours and
actions of our people and our product design and stewardship
(see page 58).
Find out more
Chief Executive Officer’s strategic review
Strategic progress: People
Stakeholder engagement: Employees
global.weir/careers/our-zero-harm-behaviours/
global.weir/careers/health--wellbeing/
See page 13
See page 20
See page 26
We want to lead by example,
starting with our vision for a zero
harm workplace where everyone
goes home safe and healthy. We
are proud of our unique blend of
talent, technology and culture and
seek to inspire our people to do the
best work of their lives. We are
acting to reduce our own footprint
including CO2e, waste and water.
To reflect the importance to our
strategy of delivering a sustainable
Weir, our goals on each topic in this
section are aligned to our We are
Weir strategic framework and ESG
measures linked to remuneration
(see pages 18 to 21).
In support of UN Sustainable Development Goals (SDGs)
The Weir Group PLC Annual Report and Financial Statements 2023
46
Strategic Report
Governance
Financial Statements
Additional Information
Sustainability review
continued
Nurture our culture
Reduce our footprint
Employee net promoter score (eNPS)
2030 SBTi target: absolute scope 1&2 emissions
23%
2022: 17% (reduction vs 2019 baseline)
We have a Science Based Targets initiative (SBTi) approved target for
a 30% reduction in absolute scope 1&2 emissions by 2030 from a
2019 base year.
Outcomes
Our absolute scope 1&2 footprint in 2023 is 142,213 tonnes CO2e,
down 6% versus 2022, and down 23% against our 2019 baseline.
In line with our Transition Plan summary on page 53, our overall
approach to meet our 2030 target focuses on energy efficiency
initiatives and increasing low-carbon electricity supply, with
renewables now making up 23% of our total electricity supply (2022:
22%), and 9% of our total energy (2022: 9%). Key activity in the year
includes continued expansion of renewable electricity supply in
Australia, Malaysia and Peru, as well as ongoing energy efficiency
improvements.
In 2023, we also carried out a strategic review of our options to
deliver our SBTi target. This considered forecasts of likely energy
demand across our operations, based on high and low scenarios of
future growth, and reviewed options to scale up supply of low-carbon
electricity, with a particular focus on markets where commercial
supply options are limited. The model also considered opportunities
to improve energy efficiency of gas-fired processes to help reduce
emissions while the availability of low-carbon supply alternatives
remains low. The review concluded that we are on track to achieve
our target and proposed a framework to evaluate further steps in the
coming years.
We are also focused on options to reduce our natural gas usage,
advancements in foundry technology and behaviour improvements
which will help us develop our 2050 net zero operations pathways.
Other areas
• Our approach to managing water and waste in our operations is
underpinned by our SHE Management System.
• We continue to develop water stewardship programmes in all
water-stressed locations, aligning with the Alliance for Water
Stewardship Standard.
• The main focus of waste in our operations is on key waste
streams of sand, metal scrap, elastomer scrap and dust. For
example, in 2023, 80,066 tonnes of scrap metal were reused in
our foundries across both Divisions (2022: 90,928 tonnes).
• More information on our approach to water and waste is available
on our website.
Find out more
Chief Executive Officer's strategic review
Strategic progress: Performance
Transition plan
GHG emissions tables
global.weir/sustainability/
See page 13
See page 21
See page 53
See pages 56 to 57
48
2022: 51
Our employee net promoter score (eNPS) is used to measure
employee engagement in our global survey. Employee engagement
is a critical element of our overall stakeholder and Board engagement
approaches, as summarised on pages 26 and 81 to 83 respectively.
This is also reflected in our Inclusion, Diversity & Equity (ID&E)
Policy where we aim to create a truly inclusive culture in which
everyone's voice is heard, and where we care for, respect and
encourage each other.
Outcomes
The 2023 eNPS score of 48 puts us in the top 25% within
manufacturing, and demonstrates a strong improvement from our
eNPS score of 18 in our first survey in 2019.
We maintained a high level of employee participation in the
September 2023 survey with 87% of employees taking part and
sharing nearly 63,000 comments. This feedback provides useful
insight on what we do well and where we could do better, with
improved feedback on engagement drivers such as environment
and workload in the year. Results and findings were shared and
discussed with the Board and Group Executive (see page 81) and
then cascaded down by the CEO to all employees, along with
examples of best practice on how engagement feedback is being
actioned at different levels across the organisation. More information
on how our employee engagement is having an impact can be found
on pages 81 to 83.
Other areas
• Diversity continues to be an important area of focus for the
organisation and female representation increased in 2023 to 19%
of employees (2022: 17%). Key strategic actions on diversity in the
year include the reverse mentoring programme which focused on
listening, learning and gaining insights (see page 83), a review of
global maternity policies to better support our workforce (see page
112), and listening activities into the female employee experience
at Weir to understand where there are opportunities to improve
our structural inclusion. Underpinning our strategy is an exercise to
improve the robustness of our diversity data to ensure we can use
this insight to help inform decision making and drive change. This
will continue in 2024.
• Our ID&E compliance training in 2023 focused on harassment
prevention in the workplace for all employees and also all
managers, with a completion rate of 90% and 92% respectively.
• We continue to focus community partnership activities on projects
with strong community, health and education themes, including
initiatives across the globe that support under-represented groups
in STEM careers. Total charitable donations in 2023 amounted to
£486,715 (2022: £671,776, including a donation to support the
people of Ukraine) with examples of local activities available on
our website.
Find out more
Chief Executive Officer’s strategic review
Strategic progress: People
Stakeholder engagement: Employees
Board engagement
global.weir/careers/be-you-and-belong/
See page 13
See page 20
See page 26
See pages 81 to 83
The Weir Group PLC Annual Report and Financial Statements 2023
47
Strategic Report
Governance
Financial Statements
Additional Information
Sustainability review
continued
Accelerate sustainable mining
Use less energy
We have a goal to enable net zero for customers, measured by
a sustainability KPI of avoided emissions, through the use by
customers of energy efficient solutions. Our target in 2024 is to
increase avoided emissions against our 2023 baseline. This target
is embedded within our We are Weir strategic framework and
linked to executive and bonus eligible employee incentives, as
outlined on pages 20 and 115 respectively.
Outcome
During the year, we measured an avoided emissions baseline of
147,995 tCO2e avoided in 2023. This is based on the use of energy
efficient comminution solutions, as described in the case study on
page 49.
Mining activities are energy-intensive and we have an opportunity
through technology to help miners use less energy, mine more
efficiently, save operating costs and reduce emissions. We are
focused on expanding quantification of avoided emissions to other
products and solutions in our portfolio.
Use water wisely
We have added water to our Accelerate Sustainable Mining
strategy and embedded a goal within our strategic framework
to define specific milestones for water optimisation in 2024
(see page 115).
Water is fundamental to the way in which minerals are processed,
as outlined on pages 30 to 31. We are working to define metrics to
track positive water impact resulting from our solutions, including
reduced water consumption, as well as increased recovery and
recycling. KPIs will be informed by our participation in the Global
Water Initiative, a ground-breaking collaboration convened by CEEC
International: Coalition for Minerals Efficiency, a leader in mining
sustainability, to build a shared understanding, identify gaps, and
outline necessary actions to solve water-related challenges and
prioritise sustainable practices.
Water is identified as a high priority topic in our sustainability
materiality matrix, see page 44.
Create less waste
We have added waste to our Accelerate Sustainable Mining
strategy and embedded a goal within our strategic framework to
define specific milestones for customer waste impact in 2024 (see
page 115).
Challenges relating to waste production in mining are outlined on
pages 30 to 31. Safe storage of tailings waste presents a major
challenge to the sector and, therefore, waste is identified as a
high priority topic in our revised sustainability materiality matrix,
see page 44.
The need for technology solutions
in mining is compelling – the world
needs more transition metals to
achieve net zero, but the mining
industry needs to extract these
using significantly less energy and
water, so helping customers scale
up and clean up is more relevant
than ever.
Linked to our Enterprise
Technology Roadmap (see pages
30 to 31), we are working to
quantify sustainability and financial
benefits of our solutions. We are
also building relevant goals into our
remuneration-linked ESG
measures, starting with avoided
emissions in 2023 (see page 125),
and extending to water and waste
in 2024 (see page 115).
Our approach to zero harm for
customers is summarised on
page 58.
Find out more
Chief Executive Officer’s strategic review
In support of UN Sustainable Development Goals (SDGs)
Our Strategic Progress
Enterprise Technology Roadmap (ETR)
Strengthen our foundations
global.weir/AE-study
global.weir/innovation/transformative-technologies/
The Weir Group PLC Annual Report and Financial Statements 2023
48
See pages 13 to 14
See pages 20 to 21
See pages 30 to 31
See page 58
Strategic Report
Governance
Financial Statements
Additional Information
Sustainability review
continued
Case study – Quantifying the avoided emissions benefits
of our technology
To accelerate sustainable mining, we take a systems-based approach
to technology collaborations to help our customers deliver more from
less. Reducing energy use is a major focus for us and for them.
Indeed, the COP28 UN Climate Change Conference in December
2023 saw world leaders agree a global target to double energy
efficiency by 2030; and adopting more energy efficient technology
in key mining processes can make a significant contribution to
achieving this.
A major opportunity to reduce energy use and avoid
emissions in comminution
Comminution is the process to crush rock into tiny particles to
expose the entrapped mineral so that it can be extracted later in the
mining process and it is the most energy intensive stage of a typical
mine site process. It is already electrified and is responsible for at
least one-third of an average mine’s energy use and CO2e emissions1
and globally consumes around 3% of the world’s electrical power1.
Our High Pressure Grinding Rolls (HPGR) technology is proven to
deliver a step change in energy efficiency over conventional
comminution circuits. This is further improved by placing HPGR in
innovative combinations with other proven technologies.
Circuit 4 – redefining comminution
Primary
crusher
Secondary
crusher
HPGR
Stirred
mill
Coarse particle
flotation
20%
Lower operating cost
40%
Energy avoided
50%
CO2e avoided
Third party assured
Four technology configurations compared
Each circuit was based on a ‘rock to recovery’ system boundary –
reducing rock direct from the mine to a size that enables the mineral
to be recovered. The four configurations are:
1. Conventional comminution circuit based on a Semi-Autogenous
Grinding (SAG) mill and ball mill.
2. Weir HPGR replacing the SAG mill at the initial grinding stage.
During 2023, we carried out a comprehensive study to quantify the
benefits in terms of energy and avoided emissions.
3. HPGR, plus VSM, replacing the ball mill.
4. Addition of a CPF unit.
Our work shows that HPGR can cut energy use by 40% and avoid
50% of CO2e emissions, when placed in combination with a vertical
stirred mill (VSM) and coarse particle flotation (CPF). Emissions
savings are greater than direct energy savings because HPGR uses
no metal grinding media, leading to a further saving in embodied
emissions. Importantly, there is no trade off elsewhere, as the
redefined process uses less water too.
A first use case for mining, independently assured
The findings of the study come at an important time as the mining
industry is actively seeking to adopt new technologies which extract
and process metals in more energy efficient and sustainable ways,
alongside increasing the use of renewable power.
Given its energy intensity, the decarbonisation opportunities in
comminution are huge, with the basic comminution process not
having changed significantly for many decades. We are collaborating
with customers and other partners to redefine the process, using
innovative combinations of proven technologies to make significant
improvements to efficiency and environmental performance.
Our study is the first to use the World Business Council for
Sustainable Development’s (WBCSD) Guidance on Avoided
Emissions to study mining processes, and the avoided emissions
results have been independently assured by SLR Consulting. Three
of Weir’s technology combinations were evaluated against a
conventional comminution circuit design for an archetypal mine
processing 15 million tonnes of copper ore per year in Chile.
All three Weir technology combinations are shown to yield sizeable
benefits versus the conventional circuit. In the optimal combination,
configuration 4, the comminution process consumes around 40%
less energy and can avoid up to 50% of CO2e emissions.
Further details of the avoided emissions study are available on our
website (see www.global.weir/AE-study).
2023 avoided emissions baseline calculation
To calculate our avoided emissions baseline, we assessed the impact
of HPGR-based comminution circuits that became operational during
2023 by comparing them to the expected performance of
conventional technology.
The assessment calculated circuit-level savings by applying the
findings from our case study above to the key performance attributes
of each installation, based on calculated power consumption, design
capacity, ore type and location-specific emissions factors. Reference
scenarios were defined on a case-by-case basis, using the most likely
alternative technology at each site.
2023 baseline: 147,995 tCO2e avoided
2024 target: increase tCO2e avoided
Details of our target will be given in our 2024 Annual Report.
We have started to track revenues from solutions contributing to
avoided emissions in line with the EU Taxonomy, and propose to
report them in future.
Circuit 1:conventional
Circuit 2: HPGR + BM
Circuit 3: HGPR + VSM
Circuit 4: HGPR + VSM + CSF
Total emissions (tCO2e/y)
175,060
% Energy avoided
% CO2e avoided
0%
0%
117,618
30%
33%
91,934
38%
47%
85,269
43%
51%
Notes on Avoided Emissions:
Calculation Approach: Avoided emissions are calculated according to the World Business
Council for Sustainable Development (WBCSD) Guidance on Avoided Emissions, using
a year-on-year timeframe and attributional approach with a medium/company-specific
specificity level. The use phase only is assessed for both the solution and the
reference scenario.
Verification: The 2023 baseline assessment has been externally verified to a limited level of
assurance by SLR Consulting (see www.global.weir/AE-2023-baseline). The assurance work
included a review of the avoided emissions data and supporting methodology for
completeness, accuracy and appropriateness. Previous verification has included limited
assurance of our archetypal study (see www.global.weir/AE-study) and a high-level review of
cradle-to-grave life cycle assessment data showing that operational emissions represent the
overwhelming majority (more than 99%) of emissions across the system life cycle.
Acknowledgements and limitations: We comply with the three eligibility gates of the
WBCSD guidance:
i) our SBTi targets and scope 1, 2 and 3 CO2e emissions are externally reported at
www.global.weir/sustainability
ii) the solution aligns to the Intergovernmental Panel on Climate Change (IPCC) mitigation
options for energy efficiency and material efficiency/ demand reduction; and to EU
Taxonomy activities: installation, maintenance and repair of energy efficiency equipment
iii) the solution has a direct and significant decarbonising effect. Avoided emissions are
reported separately from our greenhouse gas inventory and we do not claim them as a
contribution towards climate neutrality. Potential negative side effects have been
assessed and there is no trade off elsewhere, as the redefined process consumes less
water and does not generate more waste. Application of this technology is likely to be in
situations - greenfield mine sites, or brownfield expansions - where production is likely to
increase. However, global mineral production is driven by market demand, which is not
sensitive to the emissions profile of production. We therefore consider rebound effects
to be minimal.
1. CEEC International, 2021: Mining Energy Consumption: https://www.ceecthefuture.org/
resources/mining-energy-consumption-2021
The Weir Group PLC Annual Report and Financial Statements 2023
49
Strategic Report
Governance
Financial Statements
Additional Information
Sustainability review: TCFD
We continue to embrace and embed TCFD reporting
We believe that companies should be transparent about how they plan to mitigate and be resilient in the face of climate change and enable
a just transition. The disclosures set out in the narrative on pages 51 to 55 are consistent with the four recommendations and eleven
recommended disclosures set by the Task Force on Climate-related Financial Disclosures (TCFD). The table below also provides references to
where you can find more information on our climate-related actions throughout our Annual Report. In preparing our disclosure, we have taken
into account the 2021 TCFD Annex (where appropriate).
Pillar/description
Recommendation
Governance
Disclose the organisation’s
governance around climate-
related risks and opportunities.
Describe the Board’s oversight of climate-related
risks and opportunities.
Reference points1
Governance section – page 51
Governance framework – page 78
Principal decisions made by the Board – page 80
Compliance Scorecard – page 101
ESG measures (Audited) – page 125
Strategy
Disclose the actual and
potential impacts of climate-
related risks and opportunities
on the organisation’s
businesses, strategy, and
financial planning where such
information is material.
Describe management’s role in assessing and
managing climate-related risks and opportunities.
Governance section – page 51
Governance framework – page 78
Describe the climate-related risks and opportunities
the organisation has identified over the short,
medium, and long term.
Strategy section – pages 51-52
Risks and opportunities – pages 54-55
Risk management – page 62
Describe the impact of climate-related risks and
opportunities on the organisation’s businesses,
strategy, and financial planning.
Strategy section – page 51
Transition Plan – page 53
Risks and opportunities – pages 54-55
Sustainability strategy – page 45
Viability statement – page 70
Financial Statements: Basis of Preparation – page 150
Describe the resilience of the organisation’s
strategy, taking into consideration different climate-
related scenarios, including a 2°C or lower scenario.
Strategy section – page 52
Risks and opportunities – pages 54-55
Enterprise Technology Roadmap – pages 30-31
Risk management
Disclose how the organisation
identifies, assesses and
manages climate-related risks.
Describe the organisation’s processes for
identifying and assessing climate-related risks.
Describe the organisation’s processes for
managing climate-related risks.
Risk management section – page 52
Strategy section – page 52
Risk management – page 62
Risk management section – page 52
Strategy section – page 52
Risks and opportunities – pages 54-55
Risk management – page 62
Technology principal risk – page 65
Market principal risk – page 67
Describe how processes for identifying, assessing
and managing climate-related risks are integrated
into the organisation’s overall risk management.
Risk management section – page 52
Risk management – page 62
Risk management roles & responsibilities – page 63
Climate principal risk – page 67
Metrics and targets
Disclose the metrics and
targets used to assess and
manage relevant climate-related
risks and opportunities where
such information is material.
Disclose the metrics used by the organisation to
assess climate-related risks and opportunities in
line with its strategy and risk management process.
Metrics and targets section – page 53
Key Performance Indicators – page 33
Sustainability review – pages 47-49
Transition Plan – page 53
Risks and opportunities – pages 54-55
ESG measures (audited) – page 125
Disclose scope 1, scope 2, and, if appropriate,
scope 3 greenhouse gas (GHG) emissions, and
the related risks.
Metrics and targets section – page 53
Sustainability review – page 47
Transition Plan – page 53
Scope 1, 2 & 3 annual GHG emissions – pages 56-57
Describe the targets used by the organisation to
manage climate-related risks and opportunities and
performance against targets.
Metrics and targets section – page 53
Transition Plan – page 53
Sustainability review – pages 47-49
1. Bold = TCFD consistent disclosure; Standard = additional information
The Weir Group PLC Annual Report and Financial Statements 2023
50
Strategic Report
Governance
Financial Statements
Additional Information
Sustainability review: TCFD
continued
Governance
The climate-related governance structure for 2023 is summarised
below and aligns with the underlying Group model on page 78. As
announced on 19 December 2023, the Board has established a
Sustainability and Technology Committee (see page 80). Further
information on its role in governance of climate-related risks and
opportunities will be included in our Annual Report next year.
Board
The Board is informed about and considers climate impacts across
a range of integrated business processes such as:
• Setting performance objectives and monitoring implementation
and performance: The Board approved our SBTi validation plan in
2022 which included the amendment of our emission targets to
align with the SBTi framework and receives periodic updates on
Group performance against those targets during the year from
management. These Group targets are incorporated within Board-
approved annual KPIs underpinning remuneration, with
performance monitored at each Board meeting. In 2023, KPIs
included three climate-related items (see page 125).
• Reviewing and guiding strategy: The Board undertakes an annual
deep-dive session on sustainability led by our Chief Strategy and
Sustainability Officer (CS&SO), including an update on our climate-
related strategy. In 2023 this focused on our materiality matrix
update and associated plans of action (see page 80). As a result,
the Board also consider climate-related issues when setting annual
budgets and business plans and overseeing major capital
expenditure, acquisitions and divestments.
• Reviewing and guiding the risk management process: Climate has
been identified as a principal risk for the Group with updates
provided to the Board via the Risk Committee two times a year.
In addition, the Audit Committee is informed about and considers
climate-related matters through their work to oversee the impact
of climate on the financial statements. Its review of results of the
scope 1&2 Compliance Scorecard responses (presented by
management) also enables the Audit Committee to monitor and
oversee progress against goals and targets for addressing climate-
related issues (see page 101).
Chief Executive Officer (CEO)
The CEO reports directly to the Board and is responsible for planning
Group climate-related objectives and strategy for Board approval,
along with ensuring the effective delivery of Group strategy.
Chief Strategy and Sustainability Officer (CS&SO)
The CS&SO is the Group Executive member with management
responsibility for climate-related matters and reports directly into
the CEO. This includes developing and implementing climate
transition plans, assessing and managing climate-related risks and
opportunities, and integrating climate-related items into Group
strategy. The CS&SO provides climate-related updates to the Board
and is informed about climate-related issues through input from their
specialist internal team, as well as various Group working groups and
third party advisers.
Sustainability Excellence Committee
The Sustainability Excellence Committee is the primary
management-level committee responsible for overseeing climate-
related matters. It is chaired by the CS&SO and includes CEO, CFO
and Presidents of each Division. The Committee has responsibility
for supporting the development of the climate transition plan, setting
and monitoring climate-related Group targets as well as assessing
climate-related risks and opportunities. The work of the Committee is
reported to the Board by the CEO and by CS&SO in the dedicated
Sustainability session described above. The Committee is supported
by, and receives reports from, working groups which comprise
management representatives from across the Group, with
responsibility to deliver and report against their climate-related
priorities. These reports then allow the Committee, including the
CEO and CS&SO, to monitor climate-related issues over time.
The Weir Group PLC Annual Report and Financial Statements 2023
51
Strategy
Risks and opportunities identified
The risks and opportunities table on pages 54 to 55 outlines the
Group's most material financial risks and opportunities, and considers
their potential impact on financial performance and position in the
future. We also track other identified climate-related risks and
opportunities that currently have a potential financial impact that is
less than our materiality threshold, which includes carbon pricing risk
and cost of capital opportunity from our 2021 and 2023 Sustainability-
Linked Notes and Revolving Credit Facility. Risks and opportunities
are prioritised based on their strategic importance and potential
financial impact.
Our risk assessment materiality threshold is defined in accordance
with set financial thresholds on page 55. In this context, our
materiality threshold is a gross risk or opportunity of 5% of current
year operating profit. Our time horizons, also on page 55, are in line
with our Risk Assessment Criteria and align to the time horizons
used in our strategic planning cycles. We recognise that climate-
related issues often manifest themselves over the medium and
longer terms, and this is reflected in our own medium and long term
horizons of 3 to 5 years, and +5 years respectively. We have not
identified any potential climate-related issues that could have a
material financial impact on the Group arising in our short-term (0-3
year) time horizon.
Risks and opportunities process
We assess the impacts of physical and transition risks and
opportunities identified in our risk management process, as outlined
on page 62, to quantify financial impact and compare to materiality
thresholds above. These assessments are validated annually as part
of our strategic plan with Divisions asked to confirm those risks and
opportunities that are of most relevance to them, and have the most
significant potential financial impact on their plans. We also annually
review the financial impact of all climate-related risks and
opportunities to consider factors that may change their materiality
status, such as the EU Carbon Border Mechanism Adjustment for
our carbon pricing risk, and the potential interest savings from our
2023 Sustainability-Linked Notes. Outputs are reported into the
Sustainability Excellence Committee and Group Executive. There
were no changes to our risks and opportunities in the year.
Impact on business, strategy and financial planning
Our Sustainability Strategy is outlined on page 45. We are already
adapting our strategy to address climate-related risks and
opportunities, including through:
• ‘Deliver Sustainable Weir’ with focus on reducing our scope 1&2
footprint as well as management of waste, water and biodiversity
within our own operations.
• ‘Accelerate Sustainable Mining’ with focus on the impact of
our equipment to use less energy, use water wisely and
create less waste. This is linked to our scope 3 and avoided
emissions workstreams.
Note 2 to the Group financial statements (page 150) outlines how we
have considered potential climate impacts in our financial
statements. This is further evidenced by the financial commitments
within our Transition Plan on page 53. The outputs from our scenario
analysis described on the next page have also been used in our
viability assessment (see page 70).
Climate-related issues are considered in the financial planning
processes in a number of ways:
• Validation of risks and opportunities through the annual 5-year
strategic planning process with Divisions, along with an
assessment of related strategic initiatives. We actively track for
indicators of a faster global transition requiring additional
investment allowing us to deploy capital flexibly where needed.
• Our ten-year operations CO2e forecasting model provides an
aligned view of the impact of planned production, facility and
energy changes to help plan future capital requirements.
Strategic Report
Governance
Financial Statements
Additional Information
Sustainability review: TCFD
continued
• As noted on page 49, we have developed a new annual target for
avoided emissions for 2024 which will also be embedded and
managed through the financial planning process.
Overall, there is no material impact to current financial performance
and both capital and operating expenditure needs to meet our 2030
CO2e targets have been assessed and built into our strategic plans.
Scenario analysis and resilience of our strategy
We have used scenario analysis to assess risks in greater depth and
assess resilience, working with Willis Towers Watson (WTW) to
model our physical and transition risk scenarios as outlined below:
• Physical risk: After identifying risks in the 2020 TCFD review, as
described in the Risk Management section, we modelled potential
increases in extreme weather risk under two physical climate
scenarios: less than 2 degrees of warming, applying physical
climate scenario RCP 2.6; and 4 degrees of warming, applying RCP
8.5. We assessed financial exposure in terms of the maximum
foreseeable one-off loss for facilities most at risk to flood risk
beyond 2040, based on potential costs of damage and business
interruption at facilities most exposed. The potential impacts are
considered material and are included in our risk and opportunity
disclosure on page 55.
• Transition risk: After the 2020 TCFD review, we conducted
detailed quantitative scenario analysis in 2021 to quantify risks
and opportunities related to markets for key minerals from the
transition to a low-carbon economy. The analysis was then
updated in 2023 for three different scenarios:
i. Business as usual (BAU) is based on market expectations derived
from the International Energy Agency (IEA) Stated Policy
Scenario, with temperatures exceeding +2°C by 2100 vs pre-
industrial levels.
ii. 2DS considers a transition to a low-carbon economy in line
with the Paris Agreement, based on IEA’s Sustainable
Development Scenario (SDS), assuming an orderly global
transition limiting warming to well below 2°C by 2100.
The scenario achieves net zero emissions by 2050 in developed
nations and global net-zero by 2070 through a forced (pushed
by policy), but economically optimised, trajectory constrained to
a carbon budget.
iii. An additional 1DS scenario with the same parameters as 2DS but
faster transition limiting warming to 1.5°C by 2100 and global net
zero emissions by 2050.
Our analysis highlighted accelerated movement in commodities in
the 2DS and 1DS scenarios, driven by technology changes such as
electrification, growth in battery storage and electric vehicles, as
well as the shift away from fossil fuels. It considered consequent
impacts on Weir’s business in terms of revenue trends from
customers operating in each commodity. The analysis assumed
no actions in our business strategy to mitigate the impact of
declining commodities or leverage the opportunity from future
facing minerals under the faster transition scenarios, and so can be
deemed a worst case. Outcomes are shown on page 54.
Overall, we believe our strategy is resilient and that we are well
positioned to address emerging climate-related risks and
opportunities and meet our target to grow faster than our markets.
Our global network has wide reach and flexible capacity to meet
changing customer demands under all three considered scenarios
and we have invested in recent years to expand capacity in key
growth markets. We are meeting customer demands for
new technology through our Enterprise Technology Roadmap (see
pages 30 to 31). And we are optimising our operations to drive up
energy efficiency, increase renewable energy and protect against
physical risks.
The Weir Group PLC Annual Report and Financial Statements 2023
52
Risk management
Group principal risk
Climate is included in the Group’s principal risk register due to the
wide implications on the Group’s performance and reputation (see
page 67). This risk was first added as a principal risk in 2019 and was
previously called 'Environmental Sustainability'. It was identified and
assessed in accordance with the Group’s Risk Management policy
on page 62, before being updated in 2021 to incorporate the outputs
from our TCFD assessments (see below). The principal risk is
managed at a Group level with the CS&SO assigned as the Group
Executive principal risk-owner. Updates to the risk are managed
through the risk process outlined on page 63.
Identification and assessment of climate-related risks
Our 2020 TCFD review was designed to identify and assess climate-
related risks as follows:
• Physical risk: As a business with operations across the world, we
are exposed to risks of extreme weather events disrupting our
facilities or supply chain networks. We performed scenario
analysis to identify risks related to physical impacts of climate
change – such as direct damage to property or ability to supply
customers. The assessment concluded that we are exposed to
physical risks with a potential to cause business interruption, in
particular flood risks at facilities. Further information is on page 55.
• Transition risk: The first step of our approach was to identify
plausible transition risks, over a time horizon of 10 years. Transition
risk types considered followed those prescribed by the TCFD
framework, covering market, reputation, technology and regulatory
factors, including existing and emerging regulatory risks. We
identified a shortlist of 12 topics in a survey of Senior Management
within each Division and assessed risks and opportunities for each
in greater detail through an approach aligned with Weir's risk
assessment criteria summarised on page 62, including in-depth
interviews and workshops with subject matter experts and an
assessment of likelihood and potential impact of each risk and
opportunity. We also considered any existing or potential
responses. The review highlighted markets as the most material
risk and technology as the most material opportunity, so these
were reviewed in more detail, with scenario analysis performed to
quantify potential impact of the market risk (further information
opposite). We have also, where possible, further assessed and
validated the impact of other transition risks, such as the financial
quantification of our carbon pricing exposure.
Our 2020 TCFD review allowed us to identify and assess climate-
related risks in isolation first, before subsequently considering their
relative significance alongside other, non-climate related risks. The
2020 TCFD review ultimately informed the Group's principal risk on
climate, as well as identifying links to other principal risks, enabling
a more fully informed and integrated risk management process
Managing climate-related risks
The disclosure on pages 54 to 55 set out the actions to mitigate our
material climate-related risks. As noted on page 51, climate-related
risks are prioritised based on their strategic importance and
potential impact in line with financial materiality thresholds. Other
climate-related risk exposure continues to be monitored through our
Strategic Plan process as outlined on page 51.
In terms of making decisions to mitigate, transfer, accept or control
climate-related risks, we followed a similar risk management
approach as outlined on page 62, considering the severity of each
risk (using the impact and likelihood outputs from TCFD assessment)
and the effectiveness and efficiency of internal controls. In 2021, we
updated our climate principal risk to embed further climate-related
mitigating actions. This process also highlighted links to our
technology and market principal risks, on pages 65 and 67
respectively, which incorporate climate-related actions to mitigate
overall Group exposure, such as R&D investment to develop more
sustainable technologies.
Strategic Report
Governance
Financial Statements
Additional Information
Sustainability review: TCFD
continued
Metrics
Key climate-related metrics and targets
The primary metrics we consider when assessing and managing
climate-related risks and opportunities are as follows:
Transition Plan summary
The summary below sets out key elements of our Transition Plan
in line with TCFD requirements. The plan is published in full on
our website*.
• Scope 1&2 emissions (see page 56)
• Scope 3 emissions (see page 57)
• R&D as a % of sales (see page 33)
• Avoided emissions (see page 49)
These metrics link to our key climate-related targets and
commitments as summarised in our Transition Plan summary
opposite. In 2023, this list was extended to include targets and
metrics for avoided emissions (see page 49). Scope 1, 2 and 3 and
avoided emissions are subject to limited assurance reviews
undertaken by third party assurance providers.
2023 measures
We embed climate-related measures within our remuneration policy
to drive strategic action to improve our overall performance of the
key metrics above. Our 2023 climate-related measures are
summarised in the Remuneration Report on page 125, and include
the following:
• Continued reduction in scope 1&2 emissions versus the 2019
baseline; and
• Developing our avoided emissions targets and growing green
revenues and progress priority R&D projects. In 2023 we
established our avoided emissions baseline and set a 2024 target.
Over time, we expect this to impact our future scope 3 emissions
as we drive customer uptake of more energy efficient products
with reduced emissions (see Transition Plan section opposite).
Other metrics
In addition, we consider a range of financial and operational metrics
when assessing climate-related risks and opportunities in line with
our strategy. These are included in our risks and opportunity
disclosure on pages 54 to 55 and Sustainability Review on page 47.
Although we recognise these metrics’ connection to climate, we do
not currently use these as our key metrics for the assessment and
management of climate-related issues.
Additionally, we provide a more detailed emissions breakdown within
our CDP disclosure and we separately report energy consumption in
operations and product fuel economy data in our Sustainability
Accounting Standards Board (SASB) disclosure. Both of these are
available in the Sustainability section of our website*.
As noted on page 43, we are continuing to evolve our metric and
target framework and are taking actions to strengthen quality and
governance of underlying data. In our 'Accelerate sustainable mining'
section on page 48, we outline our approach to developing metrics
around downstream water and waste in line with our updated
materiality assessment and Sustainability strategy on pages 43 to 45.
*Links to website:
• CDP and SASB reporting can be found on our website at www.global.weir/sustainability/
sustainability-performance-and-reporting;
• Transition Plan can be found at www.global.weir/Transition-plan.
Scope 1&2 emissions – c.0.5% of our footprint
This category includes emissions from our operations within our
management control, including energy used in manufacturing and
other facilities. One challenge for Weir is that we manufacture a high
proportion of products in our own foundries and therefore recognise
a higher proportion of emissions in scopes 1&2 than if we were to
export emissions to scope 3 by contracting out manufacturing.
Our scope 1&2 targets are as follows:
• SBTi approved 2030 Target: 30% reduction in absolute CO2e vs
2019 baseline (aligned to SBTi well below 2 degrees)
• 2050 Target: Net Zero Operations
The 2030 emissions reduction will continue to be achieved through:
• Energy efficiency initiatives, with a focus on emissions hot spots,
particularly our foundries.
• Low carbon electricity supply, including on-site renewable
generation, green contracts, power purchase agreements and,
where necessary, Renewable Energy Certificates (RECs).
• Purchase of offsets is not part of our transition plan to 2030.
Annual capital expenditure and operating costs required to deliver the
plan have been assessed at around £0.5m to £1m across the period,
and are considered non-material to our business plan. We remain
well on track to meet our 2030 targets, having achieved 23%
reduction in 2023 vs 2019 – see GHG Emissions data on page 56.
For 2030 to 2050, net zero requires economically viable low-carbon
alternatives to natural gas and other fuels to be used within our
facilities. We continue to explore technology and energy supply
options (see page 47) and have not yet quantified unabatable
emissions or potential offsets required beyond 2030.
Scope 3 emissions – c.99.5% of our footprint
The overwhelming majority, 98%, of Weir Group’s end-to-end carbon
footprint is attributable to downstream value-chain scope 3
emissions, specifically the use phase of our long-lifespan products
and solutions on our customers’ sites. Our scope 3 target is
therefore focused on our downstream footprint:
• SBTi approved 2030 target: 15% reduction in use of sold products
vs 2019 baseline.
We have a compelling shared goal with our customers to reduce our
scope 3 footprint. Through our technology strategy (pages 30 to 31), we
develop new or improved technologies to improve energy efficiency in
key mining processes. We have also developed our avoided emissions
value proposition to drive take-up by customers (see page 49).
Due to inherent uncertainties in calculating scope 3, we take a
continuous improvement approach to review our processes and data and
disclose any restatements in a timely and transparent manner.
Delivering against our 2030 target depends substantially on external
factors beyond our direct influence or control, notably the rate of adoption
of low-carbon energy by our customers and grid decarbonisation, given
that the majority of our equipment is already powered by electricity. Our
scope 3 target is based on emissions factors for customers purchased
electricity aligned to the IEA Stated Policy Scenario. However, our scope
3 footprint continued to rise in 2023 (see page 57) due in part to business
growth and sales to countries with high electricity emission factors. This
illustrates that achieving our 2030 scope 3 target will depend on
continued action to decarbonise electricity grids. We continue to engage
externally in favour of energy efficiency and the low-carbon energy
transition, as described on page 49.
The main cost to support our plan is R&D investment which is
already core to our business strategy (see page 33).
The Weir Group PLC Annual Report and Financial Statements 2023
53
Strategic Report
Governance
Financial Statements
Additional Information
Sustainability review: TCFD
continued
Description
Both risk and opportunity
Categorisation
Impact
Summary
Potential financial
impact3
Risk: c.£120m per annum
revenue under 2DS
scenario; c. £210m per
annum under 1DS
Opportunity: c.£70m
per annum revenue under
2DS scenario; c. £310m
per annum under 1DS
Cost of response
£47.4m costs per annum
Metric – Commodity
as % of revenue:
Risk commodities - coal,
oil sands and iron ore 24%
(2022: 26%; 2021: 25%)
Opportunity
commodities - copper,
nickel and lithium 28%
(2022: 26%; 2021: 23%)
Time horizon1
Short
Medium
Long
Likelihood
Unlikely Moderate
Likely
Magnitude2
Low
Medium
High
Risk 1
Changing
customer
behaviour
Decreased revenues
due to reduced
demand for products
and services
from declining
mining sectors
Category:
Transition – market
Opportunity 1
Time horizon1
Short
Medium
Long
Likelihood
Unlikely Moderate
Likely
Magnitude2
Low
Medium
High
Changing
customer
behaviour
Increased revenues
due to greater demand
for products and
services from growing
mining sectors
Category:
Transition – market
Longer-term trends in demand patterns for key minerals are
projected to change during the transition to a low-carbon
economy. Weir sells products and services to customers
producing fossil fuels and certain minerals that are due to
decline during the transition (coal, oil sands and iron ore), as
well as future-facing commodities that are due to increase
(copper, nickel, lithium and cobalt).
We describe on page 52 our analysis of forced commodity
market scenarios, constrained by carbon budgets. In 2022
and 2023, we compared the commodity market forecasts in
our 5-year strategic plan with those in the 10-year climate
scenario analysis. We found that our 5-year planning
assumptions broadly align with the BAU scenario,
particularly for the biggest commodities with most material
impact on risks and opportunities. We noted greater
variation between external data sources for timelines
beyond 5 years and for commodities with a smaller impact
on our revenue. Overall we considered that BAU is largely
built into our existing plans. The financial impact for both the
risk and opportunity is, therefore, the difference in revenue
between BAU and the 2DS and 1DS scenarios per annum
by 2033. The assessment indicated that overall net revenue
impact in 2033 would be about -£50 million under the 2DS
scenario, with a revenue downside of £120 million for risk
commodities and upside of £70 million for the opportunity
commodities. Under the 1DS scenario, this switched to a
net opportunity of around £100 million, due to the £210
million downside in coal, oil sands and iron ore, being
outweighed by a greater upside of £310 million in copper,
nickel, lithium and cobalt. ESCO is proportionately more
exposed to downside risks. The potential impact would
develop over a number of years, not as a one-off event,
and the potential financial impact does not take account
of mitigating actions, so can be deemed worst case.
We monitor ongoing commodity related data with recurring
annual cost of £0.1m. Actions in our strategic plan mitigate
the impact of declining commodities and leverage the
opportunity from future-facing minerals in line with the BAU
scenario, with contingency plans to manage a faster
transition. We are well placed to manage transition risk due
to long planning cycles in the mining sector, flexibility within
our network, active tracking of market signals and ongoing
resilience testing. In addition, our R&D capital allocation
targeting 2% of annual revenue means we continue to
provide compelling offers relevant to customer needs to
scale up future facing commodities, meet iron ore demand
from the low-carbon steel sector and manage assets in
declining sectors as efficiently and sustainably as possible.
R&D in 2023 totalled £47.3m.
The Weir Group PLC Annual Report and Financial Statements 2023
54
Strategic Report
Governance
Financial Statements
Additional Information
Sustainability review: TCFD
continued
Categorisation
Impact
Summary
Description
Risk 2
Increased severity
and frequency
of events
Impact of flood
(coastal, fluvial,
pluvial, groundwater)
Category:
Physical – acute
Time horizon1
Short
Medium
Long
Potential financial
impact3
£30m one-off cost
Likelihood
Unlikely Moderate
Likely
Magnitude2
Low
Medium
High
Cost of response
£0-0.1m per annum cost
Metric
We track our exposure
through our financial
impact and monitor
disruption at our sites, of
which there were no major
incidents in the year.
As a business with operations across the world, we are
exposed to risks of extreme weather events disrupting our
facilities or supply chain networks. As outlined in the
Strategy section on page 52, we modelled potential
increases in extreme weather risk under scenarios for <2°C
and +4°C of warming and then assessed the maximum
foreseeable one-off loss, based on potential costs of
damage and business interruption at facilities most exposed
to flood risk under a +4°C scenario beyond 2040. Analysis
identified an aggregate one-off loss range across the Group
of between £0-30m, reflecting a combination of
replacement of physical assets and gross profit exposed to
climate risks. The results were shared across the Group’s
operations, to reinforce both the appropriateness of our
existing physical risk mitigation strategies and inform
decisions on future risk initiatives and expansion plans.
We continue to monitor disruption of climate-related
physical incidents at our sites, with no significant events in
2023. In case of such events occurring, the Group maintains
robust business continuity plans and specific insurance
protection to mitigate against the extent of any operational
impact that may occur.
The loss range identified as part of the scenario analysis
reflected potential gross losses before taking into
consideration the Group’s controls environment. Through
a combination of existing physical defence measures and
business continuity plans, cross Divisional manufacturing
capacity and the applications of insurance, the net loss
forecast would reduce to a low figure. We therefore
categorise the magnitude of impact as low. The cost of
response reflects third-party loss control engineering
advice to assist facilities identify risks and develop
mitigation solutions.
We target mid-to-high single digit growth above market per
year, driven by four factors: sustainable solutions, integrated
solutions, expanding our product range and geographic
expansion. A 5% revenue uplift on annual continuing
operations revenue of c.£2bn would deliver increased
annual revenues of around £100m per annum, from the four
factors combined. We have assumed 50% of this uplift in
our calculations. Weir continues to target at least 2% of
revenues investment on R&D in line with our technology
strategy on pages 30 to 31. Our focus on sustainable
solutions creates a compelling value creation opportunity
as we link our goals directly with our customers, focus
investment to accelerate the technology transition in
mining, and quantify avoided emissions through our avoided
emissions initiative to unlock value for customers. The cost
of response reflects R&D in 2023 of £47.3m, as well as
recurring expenditure for the avoided emissions workstream
of £0.1m.
Opportunity 2
Time horizon1
Short
Medium
Long
Likelihood
Unlikely Moderate
Likely
Magnitude2
Low
Medium
High
Development and/
or expansion of
low emission
goods and services
Increased revenues
due to greater demand
for products and
services
Category:
Products and services
Potential financial
impact3
£50m per annum revenue
Cost of response
£47.4m of cost per annum
Metric
2023: 1.8% (2022: 1.9%,
2021: 1.7%)
1. Our Risk Horizons as defined in our Risk Assessment Criteria are: up to 3 years – short; 3 to 5 years – medium; 5+ years – long
2. Our Risk Assessment Criteria for the magnitude impact of gross risk are based on operating profit: >20% profits – high; 10-20% profits – medium to high; 5-10% of profits – moderate ;
0-5% profits – low Impact Score.
3. Potential financial impact is shown as increase or decrease in revenue or cost. Risk 2 also includes estimated profit impact.
The Weir Group PLC Annual Report and Financial Statements 2023
55
Strategic Report
Governance
Financial Statements
Additional Information
Sustainability review: GHG emissions
Total annual GHG emissions
We have provided below our GHG emissions, as required under the Companies Act 2006 (Strategic Report and Directors’ Report) Regulations
2013, and have reported the requirements of the Streamlined Energy & Carbon Reporting (SECR) framework. In 2023, we identified and
implemented energy efficiency measures across our business, which included manufacturing efficiency improvements, behavioural change,
process upgrades and selecting energy efficient technology, such as LED lighting. Our total identified and implemented energy savings from
projects implemented in 2023 are estimated to be 9,094,471kWh (2022:13,192,524kWh).
Scope 1&2 annual GHG emissions
Location-based Emissions
2023
2022
2019
2023
2022
2019
2023
2022
2019
UK & Offshore area annual
GHG emissions (tCO2e)
Global annual
GHG emissions (tCO2e)
Global GHG emissions intensity
(tCO2e per £m revenue)
Scope 1 emissions: fuel combustion and
operation of facilities (continuing operations)
Scope 2 emissions: purchased electricity,
heat and steam (continuing operations)
Scope 1 emissions: fuel combustion and
operation of facilities (continuing and
discontinued operations)
Scope 2 emissions: purchased electricity, heat and
steam (continuing and discontinued operations)
Total scope 1&2 (continuing and
discontinued operations)
Total scope 1&2 (continuing operations)
Total scope 1&2 (discontinued operations)
Market-based Emissions
Scope 2: purchased electricity, heat and steam
market-based emissions (continuing operations)
Scope 2: purchased electricity, heat and
steam market based emissions (continuing
and discontinued operations)
Total scope 1&2 (market-based); continuing
and discontinued operations
Total scope 1&2 (market-based); continuing
operations
Total scope 1&2 (market-based);
discontinued operations
Energy
Energy consumption used to calculated emissions;
continuing and discontinued operations
Energy consumption used to calculated emissions;
continuing operations
Annual GHG emissions from foundries
2,445
2,532
3,602
65,184
66,697
67,547
24.7
27.5
33.7
3,053
3,450
4,951
94,606
106,136
121,807
35.9
43.8
60.8
2,445
2,532
3,745
65,184
66,697
81,834
24.7
27.5
31.1
3,053
3,450
5,010
94,606
106,136
138,788
35.9
43.8
52.8
5,498
5,498
0
5,982
5,982
0
8,755
8,553
202
159,790
159,790
172,833
220,622
172,833
189,354
0
0
31,268
60.6
60.6
0.0
71.3
71.3
0.0
83.9
94.6
49.9
82
82
218
275
77,029
85,986
116,079
29.2
35.5
58.0
218
275
77,029
85,986
133,537
29.2
35.5
50.8
2,527
2,750
4,020
142,213
152,683
215,371
54.0
63.0
81.9
2,527
2,750
3,877
142,213
152,683
183,626
54.0
63.0
91.7
0
0
143
0
0
31,745
0.0
0.0
50.7
UK & Offshore area annual energy use (kWh)
Global annual energy use (kWh)
2023
2022
2019
2023
2022
2019
27,935,581
31,486,927
39,590,603
537,267,104
563,507,645
678,666,543
27,935,581
31,486,927
38,601,875
537,267,104
563,507,645
578,199,219
Scope 1 emissions: fuel combustion and
operation of facilities
Location-based scope 2 emissions:
purchased electricity and heat
Market-based scope 2 emissions: purchased
electricity and heat
Location Total
Market Total
Annual GHG emissions (tCO2e)
2019
2022
2023
Proportion of global
(continuing operations)
annual emissions (%)
2023
2022
2019
39,903
40,695
45,151
25.0
23.5
23.8
67,663
78,094
85,019
42.3
45.2
44.9
53,087
58,842
80,452
107,566
118,789
130,170
92,990
99,537
125,603
37.3
67.3
65.4
38.5
68.7
65.2
43.8
68.7
68.4
The Weir Group PLC Annual Report and Financial Statements 2023
56
GHG emissions intensity
(tCO2e per tonne of metal poured)
2019
2022
2023
0.4
0.7
0.6
1.1
1.0
0.4
0.8
0.6
1.2
1.0
0.4
0.8
0.8
1.2
1.2
Strategic Report
Governance
Financial Statements
Additional Information
Sustainability review: GHG emissions
continued
Scope 3 total annual GHG emissions
Scope 3 category – continuing operations only
1. Purchased goods & services
2. Capital goods
3. Fuel & energy related activities
4. Upstream transportation & distribution
5. Waste generated in operations
6. Business travel
7. Employee commuting
8. Upstream leased assets
9. Downstream transportation & distribution
10. Processing of sold products
11. Use of sold products
12. End of life treatment of sold products
13. Downstream leased assets
14. Franchises
15. Investments
Total
Evaluation status
Relevant, calculated
Relevant, calculated
Relevant, calculated
Relevant, calculated
Relevant, calculated
Relevant, calculated
Relevant, calculated
Relevant, calculated
Relevant, calculated
Not relevant, explanation provided
Relevant, calculated
Relevant, calculated
Relevant, calculated
Not relevant, explanation provided
Relevant, calculated
2023 tCO2e
527,382
2022 tCO2e*
659,775
12,064
38,267
90,803
16,964
17,941
8,145
97
82
0
9,149
41,601
141,282
17,457
14,029
8,631
0
78
0
43,343,096
38,639,264
881
10,040
0
4,726
1,061
7,530
0
6,248
44,070,488
39,546,105
Methodology and Notes
For commentary on our progress against scope 1&2 and scope 3 emissions targets, see our Transition Plan Summary on page 53.
Scope 1&2
In calculating our Location GHG emissions we have followed the principles of the ‘GHG Protocol: Corporate Accounting and Reporting Standard’ (revised edition) and emissions are reported
based on an operational control approach. We have used emission factors from the UK Government’s annual ‘GHG Conversion Factors for Company Reporting' for each year and other region-
specific factors where available to calculate our Scope 1&2 Location footprint. In calculating our Market Based Emissions we have followed the principles of the GHG Protocol: Corporate
Accounting and Reporting Standard’ (revised edition), the GHG Protocol Scope 2 Guidance (an amendment to the GHG Protocol Corporate Standard) and emissions are reported based on an
operational control approach. Scope 2 emissions are reported in line with the GHG Protocol’s dual reporting guidance. The location-based method calculates emissions using the average
emission intensity of local electricity grids which provide electricity to Weir’s facilities. The market-based method captures the impact of Weir’s contractual arrangements to procure renewable
or low-carbon energy and energy attribute certificates. We have used emission factors from the UK Government’s annual ‘GHG Conversion Factors for company Reporting' for each year and
other contractual, market, residual or location based emissions factors where available to calculate our Scope 1&2 Market footprint. We report on all emission sources required under the
Companies Act 2006 (Strategic Report and Directors’ Reports) Regulations 2013. These sources fall within our Consolidated Financial Statements. We do not have responsibility for emission
sources that are not included in our Consolidated Financial Statements. Reported Scope 1 emissions cover emissions from liquid fuel and gas - used for heat, transportation and process and
refrigerants. Scope 2 emissions cover emissions generated from heat, steam and purchased electricity for own use, calculated using both the location and market-based methodologies. Our
continuing operations consist of our Divisions (Minerals and ESCO) and Group functions. Our discontinued operations comprise our Oil & Gas Division which was sold in February 2021.
In line with SECR, energy consumption data has been provided for the UK & Offshore and globally, this data was used in the creation of our GHG emissions. Our Foundry GHG emissions are
provided globally and do not contain any discontinued operations so no differentiation is required. Revenue for 2019 and 2022 are based on 2023 average exchange rates. 2022 constant
currency revenue is disclosed in note 4 of the Group Financial Statements. 2019 constant currency revenue is £2,002m (continuing operations) and £626m (discontinued operations). For our
foundries, the scope 1 proportion of Global (continuing operations) annual emissions is a proportion of total Location Based GHG emissions. Therefore the % shown in the Market-based Total
row does not equal the sum of the scope 1 and Market-based scope 2 rows.
Our scope 1&2 GHG emissions data have been externally verified to a limited level of assurance by SLR Consulting. The assurance work covered an understanding of processes for
management, reporting and performance improvements as well as a review of underlying data sources, year-on-year performance trends, calculation accuracy and consistency with best
practice guidelines, consolidation of data and the calculation methodologies used for market-based scope 2 emissions.
*Scope 3
2022 category 11 is restated to reflect changes in methodology and data as outlined below. In calculating our scope 3 emissions we have followed the principles of the GHG Protocol
Corporate Value Chain (Scope 3) Accounting and Reporting Standard and Technical Guidance for Calculating Scope 3 Emissions (version1). Prior to calculating scope 3 emissions, categories
were screened for relevance using the protocol criteria. Those listed as 'not relevant' above were all considered to make no contribution to Weir's scope 3 emissions. It is not always possible
to distinguish upstream and downstream transport so categories 4 and 9 should be considered in aggregate.
The method used for our most material category Use of Sold Products has been to calculate the energy usage of machines sold in 2023 based on power consumption across their assumed
lifetime (20 years) whilst considering utilisation, load and motor efficiency. It is anticipated that this method will enable a ±20% estimation of total Weir product electrical power consumption.
Applicable emissions factors were then applied to this data (sources: IEA 2023, DEFRA 2023, NGAF 2023 and US EPA 2023), by country, to calculate CO2e across the assumed lifetime of the
products. For diesel-powered products, we used fuel consumption data to estimate diesel use and applied DEFRA 2023 emissions factors to calculate CO2e. Emissions relating to on-site
maintenance services are excluded. We intend to quantify these emissions and estimate them to be a very small (0.01% of category 11). All other categories have been calculated using
spend, tonnage, distance and headcount methods with the most appropriate emissions factors applied.
In line with the GHG Protocol we continue to review our reporting in the light of any changes in business structure, calculation methodology and the accuracy or availability of data. As a result,
we have re-stated 2022 scope 3 category 11 emissions to reflect changes in methodology and data for Use of Sold Products. Due to recognised inherent uncertainties in calculating scope 3,
we have adopted a continuous improvement approach. We will continue to review our processes and disclose any restatements in a timely and transparent manner. This review will include
reassessment of our 2019 baseline.
Our Use of Sold Products emissions category is the most material part of our scope 3 footprint and we have had this externally verified to a limited level of assurance by IBIS ESG Consulting.
The assurance work included a review of the Use of Products Sold data and supporting methodology for completeness, accuracy and appropriateness.
The Weir Group PLC Annual Report and Financial Statements 2023
57
Strategic Report
Governance
Financial Statements
Additional Information
Sustainability and non-financial reporting
Strengthen our foundations
In line with our materiality assessment, we have established a
priority in our sustainability strategy to Strengthen our foundations,
see page 45. This addresses governance-related factors from our
updated materiality assessment (see pages 43 to 44) that ensure a
consistent and responsible approach to running our business and
engaging with our value chain.
Responsible business practices
Responsible business practices are managed by our compliance
function, led by the General Counsel and Chief Compliance Officer,
who has a mandate to design and govern our Code of Conduct and
the Group’s compliance frameworks relating to bribery and
corruption, antitrust and competition, human rights and modern
slavery, data privacy, and trade sanctions and export control. You can
also read more about how the Directors have regard to various
matters under section 172 of the Companies Act 2006, including the
desirability of the Group maintaining a reputation for high standards
of business conduct, in the Strategic Report on page 26 and in the
Governance Report on page 80.
We seek to maintain high standards of corporate governance across
all areas of sustainability, as outlined in more detail on our website.
Below are specific areas of compliance reporting that summarise key
events in the year.
Code of Conduct
We are dedicated to doing business in an ethical and transparent
manner. This commitment has driven our legacy for more than 150
years. The Group’s Code of Conduct ('Code') provides direction and a
framework for how we expect our people to conduct themselves on
a day-to-day basis. Every year, we provide refresher Code training to
all our employees and contingent workers, and in 2023, 94% of all
employees completed the training.
To assure adherence to policies and procedures and that these
remain robust, Internal Audit performs (i) annual Code audits
(including employee expense reviews) at selected Group locations
and (ii) an annual audit of the items logged in the Group’s Gifts &
Hospitality Register. Further information on the work by Internal
Audit on this area can be found on page 99.
Ethics Hotline
The Group provides informal and formal channels to raise concerns
regarding unethical behaviour. Most employee concerns are resolved
by their managers or the local Human Resources function, but
employees may raise a concern through the Weir Ethics Hotline,
which is a 24-hour, multilingual service accessible via telephone or
online with the option of reporting anonymously.
The Compliance function works closely with the business to ensure
that matters raised via the Ethics Hotline are investigated in a fair and
impartial manner consistent with the Group Investigation Protocol.
During 2023, and as part of ongoing efforts to re-enforce the
availability of the hotline, the Compliance function produced new,
updated hotline posters, and coordinated with the Human Resources
function to post the posters in employee common areas across the
Group’s global facilities.
Human Rights
We respect the human rights of all those working for or with us, and
of the people in the communities where we operate. In accordance
with our Human Rights Policy, we will not do business with
companies, organisations or individuals that we believe are not
working to comparable human rights standards or are engaged in
forms of modern slavery. Further information can be found in our
Modern Slavery Statement on the policy page of our website.
The Compliance function developed a human rights related training
module focused on the risks of forced labour and modern slavery,
and delivered this training to designated high risk roles within the
Group. The training was rolled out in late Q4 with 83% of designated
employees having completed the module by the end of the year.
Also in 2023, the Compliance function continued to spearhead a
global human rights risk assessment of the Group’s operations and
supply chain. Both the Minerals and ESCO Supply Chain functions
are directing their key suppliers to report risk-related information
about their operations via a third-party ESG software tool. The
results will drive additional process improvements in managing
our supply chain.
We report on outcomes for safety on page 46, and Inclusion,
Diversity & Equity on page 47.
Anti-Bribery and Corruption
We are aware of the risk of bribery and corruption for companies that
operate globally and for our company specifically, and through our
Code of Conduct and Group Anti-Bribery and Corruption Policy (ABC
Policy), we have a zero tolerance towards bribery and corruption by
Group personnel and third parties working on our behalf. We
regularly provide reminders or training to key employees about
bribery and corruption risks. These efforts are supplemented by our
Gifts and Hospitality Policy and Agent and Business Partner Policy.
For third-party risk, our risk-based due diligence and management
programme enables the Group to work only with third parties that
meet our company standards and expectations for compliance.
Customer health and safety
Embedded within our SHE Management System is our Product
Stewardship standard to ensure a process is in place that a cohesive
and consistent approach toward Product Stewardship and that the
Product Risk Assessment Manual and process is communicated and
embedded.
Responsible supply-chain practices (own operations)
We source raw materials, components and services across the
globe. Our suppliers play a critical role in our business and our
relationships with them are based on achieving the best
performance, product delivery, service and total cost in an ethical and
sustainable manner. Therefore, we expect our suppliers to reflect the
same values and behaviours. All suppliers must abide by the
minimum standards set out in the Group Supply Chain Policy.
Data-privacy and cyber-security (own operations and
customer)
The Group’s main risk as it relates to privacy is with respect to the
protection of personal information of its employees. In 2023, the
Compliance function delivered training on privacy risks and
responsibilities to designated roles, and also refreshed the Group’s
privacy-related policies and requirements. 91% of designated
employees completed the training.
Our cyber-security strategy is managed through the IT governance
framework with oversight from the Board through the annual update
of the strategy (see page 79). During the year we ran cyber-security
education and awareness campaigns, with 94% of all employees
completing mandatory cyber-security training. Further information on
our approach to cyber-security is on page 69.
Find out more
Ethics & governance principal risk
Information security & cyber principal risk
Audit Committee Report: Main activities of the Audit Committee
global.weir/sustainability/our-governance-and-policies/
See page 68
See page 69
See page 99
The Weir Group PLC Annual Report and Financial Statements 2023
58
Strategic Report
Governance
Financial Statements
Additional Information
Sustainability and non-financial reporting
continued
Non-financial and sustainability information statement
The table below sets out our key policies and standards that govern our approach and due diligence, along with references to outcomes
and additional information included elsewhere in the annual report. Further information to support our disclosure can also be found on the
following pages:
• The required information about the business model can be found on pages 22 to 24.
• Information about medium-term Key Performance Indicators that are aligned to our We are Weir strategic framework and the Group's
remuneration policy can be found on pages 32 to 33.
• Our climate-related financial disclosures can be found on pages 50 to 55.
• Our principal risks are summarised on pages 64 to 69.
Policy
Sustainability
Strategy
SHE Management
System1
Zero Harms
Behaviour
Framework
Inclusion, Diversity
& Equity Policy1
Board Diversity
Policy1
Health & Wellbeing
Strategic
Framework1
Code of Conduct1
Human Rights
Policy1
Modern Slavery
Statement1
Supply Chain Policy1
Anti-Bribery and
Corruption Policy
and Standard1
Gifts and Hospitality
Policy1
Agent and Business
Partner Policy1
Reporting Requirement
Summary of areas covered
Sets out our strategic priorities in relation to sustainability, covering areas
such as champion Zero Harm, reduce our footprint, nurture our culture and
strengthen our foundations around governance-related factors.
Section of
Annual Report
Page 45
Sets out how we manage safety, health and environmental risk focusing
on areas such as product or service quality, environmental performance,
and employee safety, health and wellbeing.
Page 46
Provides guidance on behaviours to help improve our safety culture with
a focus on personal accountability for all team members.
Page 46
Sets out our policy and ambitions in relation to inclusion, diversity and
equity across Weir.
Page 47
Sets out the approach to diversity on the Board of Directors of The Weir
Group PLC.
Page 95
Sets out framework for employees to access a wide range of resources
in support of their broader health and wellbeing, including mental
wellbeing, at any time.
Outlines the ethical and legal standards to which Weir Group holds its
employees and stakeholders, covering a range of areas including anti-
bribery and corruption, competition (anti-trust) law, conflicts of interest
and use of Group property and resources.
Page 47
Page 58
Covers our main responsibilities in the areas of employee rights and the
risk of human rights violations in our supply chain.
Page 58
Sets out how we identify, assess and manage modern slavery risks
across our operations and supply chain.
Page 58
Sets out the minimum standards we expect our suppliers to abide by with
respect to areas such as business ethics and legal and regulatory compliance.
Page 58
Prohibits bribery and corruption, whether by Weir or any third party who acts
on behalf of the Group, and sets expected ethical business behaviours.
Page 58
Supplements the Code of Conduct by further describing the
requirements and process for providing business courtesies to
customers and other third parties.
Covers how to protect the Group from engaging with third parties who,
in the course of representing or working for the Group, could undertake
improper activities such as offering or accepting a bribe or engaging in
other misconduct.
Page 58
Page 58
1. These policies are available on our website: global.weir/sustainability/our-governance-and-policies/.
Employees
Environment
Social matters
Human Rights
Anti-corruption and anti-bribery
Employee numbers
As at 31 December 2023 there were 11,914 people, excluding contingent workers, employed by the Group of whom 2,269 were female, 9,628
were male, and 17 did not disclose their gender. As at 31 December 2023, there were nine Directors of The Weir Group PLC Board, five of
whom were male and four were female. Excluding the Executive Directors, there were 91 males and 16 females in our senior management
team, as defined by the Companies Act 2006. For further diversity-related disclosures, including our disclosures for the purposes of the UK
Listing Rules, Corporate Governance Code and FTSE Women Leaders and Parker Reviews, refer to the Nomination Committee report on pages
95 to 97.
The Weir Group PLC Annual Report and Financial Statements 2023
59
Strategic Report
Governance
Financial Statements
Additional Information
Risk management
We operate in a complex global
environment where the effective
management of risk is
fundamental to the delivery of our
strategic objectives. Our global risk
management system is designed
to provide both the necessary
level of oversight and a
consistent framework in which
our Group operations can take
advantage of attractive
opportunities whilst ensuring we
are not exposing the organisation
to excessive risk.
Main activities during 2023
• Continued roll out of our Zero Harm Behaviours programme with
8,000 employees across 140 sites participating in behavioural
safety gap analysis to determine safety maturity, identify
improvement areas and develop local action plans to continue
to drive cultural change.
Risk agenda
During the year, the Board has reviewed the effectiveness of the
systems of risk management and internal control and conducted a robust
assessment of both the principal and emerging risks potentially affecting
the Group in line with the risk appetite statement.
The risk appetite statement is the level of risk that the Board is
willing to take or tolerate to achieve our strategic objectives.
It articulates what is an acceptable level of exposure, relative to the
amount of reward we are seeking, and helps to determine how much
control or mitigating actions may be required.
The Group's risk appetite statement, which is detailed on page 61,
considers several different dimensions which balance commercial
performance with managing our business in a sustainable and
compliant manner.
Our appetite may vary from area to area, for example, it may be
higher where we are prepared to tolerate more risk to achieve a
specific outcome, such as entry into new countries which offer
growth opportunities.
The key principles underpinning the Group's risk appetite are:
• Risk appetite needs to be measurable, involving the use of
appropriate Key Risk Indicators (KRIs).
• Risk appetite is not a single fixed concept.
• There must be a range of appetites for the different risks that the
Group faces.
• Risk appetite must be integrated within the control culture of
the Group.
• Appetite must consider differing views at a strategic, tactical and
operational level.
• The defined risk appetite has been signed off by the Board.
Compliance with the risk appetite statement is monitored through
the Group's functional and frontline controls and monitoring and
oversight controls.
• Deep dive data analytics on female insights from our global
employee engagement surveys to better understand perceptions,
barriers versus perceived barriers and highlighting best practice.
The Board will continue to review and update the risk appetite
statement annually to ensure it remains consistent with the Group's
strategy and environment in which we operate.
All these activities meet the Board's responsibilities in connection
with Risk Management and Internal Control set out in the UK
Corporate Governance Code 2018.
Details of the review of the internal control and risk management
systems undertaken during the year are contained in the Audit
Committee report on page 101.
• Further maturing of our crisis readiness with the support
of external crisis management consultancy and strategic
communication advisers.
• Elevated geopolitical risk monitoring utilising third party
intelligence.
• Double materiality assessment completed and ESG data assurance
roadmap in progress and climate scenarios refreshed.
• Generative AI programme mobilised, successfully implementing
secure technology foundations and a solution to improve
development coding.
Areas of focus 2024
• Implementation and embedding of developed site specific
behavioural safety improvements plans.
• Continue to embed our ID&E strategy, including the launch of a
new senior ID&E steering committee to further promote and
advance the linkage with our overarching business strategy.
• Continue to evolve our horizon scanning capabilities with the
development of a systematic approach to the identification and
assessment of emerging risks and opportunities.
• Further integrate climate risk and opportunity in strategic planning.
• Complete and begin to execute our ESG data assurance roadmap.
• Continue to manage the risks associated with the implementation
of generative AI as we scale it across the business to generate the
greatest return on investment.
The Weir Group PLC Annual Report and Financial Statements 2023
60
Strategic Report
Governance
Financial Statements
Additional Information
Risk management
continued
Risk appetite statement
The Group is strategically positioned in markets with good long-term growth prospects. We will pursue ambitious growth targets, and we are willing to
accept a higher level of risk to increase the likelihood of achieving or exceeding our strategic priorities, subject to the parameters below.
Sustainability
Risk
Risk appetite
Risk parameters
Safety, health
& wellbeing
People
Climate
We will not undertake or pursue activities that pose
unacceptable hazard or risk to the health and wellbeing
of our people or the communities in which we operate
or the broader environment.
We will support, develop and reward our people in
keeping with local market conditions and will encourage
behaviour in line with our values and purpose.
We will evaluate and consider material climate transition
and physical risk in all major strategic decisions and take
adaptation and mitigation actions to minimise their impact.
(i) No tolerance for breaches of Weir Group SHE Charter (ii) Target zero harm
through continuous improvement (iii) Adherence to our Health & Wellbeing
Framework (iv) Active community and environmental engagement.
No tolerance for breaches of (i) We Are Weir framework (ii) Weir Code of
Conduct (iii) Group and Divisional HR policies.
We will monitor and maintain each of the following risk parameters within risk
appetite: (i) Physical (ii) Policy & legal (iii) Technology (iv) Market (v) Reputation.
Ethics &
governance
We have no tolerance for breaches of external legal
governance frameworks or internal control systems.
No tolerance for breaches of: (i) Legislative/statutory requirements (ii) Weir
Code of Conduct (iii) International sanctions (iv) Delegated authority levels (v)
Group & Divisional policies.
Growth
Technology
Market
Country
presence
We will ensure that we invest appropriately in R&D to both:
(i) Defend our core products to protect our installed based
aftermarket annuity model and (ii) Grow our innovation
technology solution offerings, focused on addressing our
customers most strategic challenges.
We will primarily operate in mining and infrastructure
markets and accept the associated cyclicality, but will
seek to minimise this risk as far as possible.
We are prepared to enter new countries that offer
opportunities for growth consistent with our overall
strategy. We will not enter, or will exit, countries that
present a high risk of harm to our people, damage to
our reputation, or breach of international sanctions.
Investment of R&D resources will be consistent with our purpose and
company values.
Focus growth and investment on businesses that demonstrate
a high aftermarket and offer a technology differentiator.
No tolerance for breaches of: (i) Legislative/statutory requirements
(ii) Weir Code of Conduct (iii) International sanctions (iv) Delegated authority
levels (v) Group & Divisional policies.
Organic
growth
We will rigorously pursue Divisional organic growth
strategies to meet our market growth objectives.
Investment of resources will be consistent with Divisional strategies and
expected mid to high single digit % revenue growth through cycles.
Capital allocation
& returns
We will encourage capital expenditure in pursuit of
our growth ambitions subject to Internal Rate of
Return (IRR) hurdles and capital structure targets.
Local country cash flow projections for investment appraisal purposes
discounted at country specific rates to account for risk weighted returns.
Capital
structure
Margins
Returns &
profitability
Resilience
Information
security
& cyber
Returns
Mergers &
acquisitions
We are prepared to use leverage in pursuit of our
growth agenda and will actively seek low-cost debt
to fund the Group but, recognising cyclicality in our
end markets, will maintain significant headroom
against our financial covenants.
We will seek to maintain the ratio of net debt/EBITDA between 0.5
and 1.5 with up to 2.0 for M&A (current financial covenants 3.5 times) and will
retain adequate headroom within our debt facilities at all times.
We will not pursue growth at all costs; however, we expect
high margins, strong returns on capital and working capital
discipline together with cash generation.
Short-term margin dilution is acceptable in gaining market entry but, over the
cycle, we aim for 20% operating margin in 2026.
Targeting free operating cash conversion of 90-100% in 2024.
We have no tolerance for material cyber security
incidents that impact our ability to operate as a business,
damage our reputation or lead to financial penalties.
No tolerance for breaches of Group cyber security policies or Group security
and education training.
We will actively pursue M&A opportunities that
enhance our strategic platform subject to meeting
investment criteria.
Post-tax returns should exceed our cost of capital within three years
of the acquisition.
The Weir Group PLC Annual Report and Financial Statements 2023
61
Strategic Report
Governance
Financial Statements
Additional Information
Risk management
continued
Risk management
The Group’s risk management and internal control frameworks
remain a core element of its Governance model. Our Risk
Management Policy defines how we expect risks to be identified,
assessed and managed throughout the organisation.
Risks are assessed and quantified in terms of impact and likelihood
of occurrence, both before and after control mitigation. Assessing
the gross risk before control mitigation allows the business to review
the relative impact of the existing controls by comparing the gross
and net risk assessment. Also, it allows the business to avoid
expending resources on mitigating controls and actions, which have
a negligible impact on the risk assessment.
The impact of risks is quantified across a range of factors including
financial; strategy; reputation; people and property; ability to perform
services; regulation; safety, health and environment; investors and
funding. The Risk Management Policy includes defined criteria for
each risk impact all the way up to Group level assessments, thereby
providing an integrated bottom-up and top-down approach to
risk management.
Ultimately, the Board is responsible for the Group’s risk management
and internal control framework. It has set out the decisions, and
hence the level of risk, which can be delegated to the Group
Executive and Divisional and operational company management
without requiring escalation. This is articulated in a series of Group
policies and delegated authority matrices, as well as the parameters
within the approved risk appetite statement. The Board and
Committee structure can be viewed on page 78.
The bottom-up risk reporting approach requires key risks identified
and reported at project level to be escalated to the operating
company management, which in turn may be escalated to Divisional
management, and ultimately to the management-level Risk
Committee and the Board. This is achieved through risk dashboard
reports, which are maintained at Divisional and Group levels. The
dashboards provide a summary of the major gross risks at each
respective level, as well as a summary of the key controls and
actions and resulting net risk, and any further risk mitigation actions
required.
The Risk Committee has oversight of the Group risk dashboard,
along with a routine review of key controls identified to manage each
risk and the sources of controls assurance.
The Board obtains assurance over risks and risk management
through the internal control framework. More information on the
internal control framework can be found within the Corporate
Governance Report on page 90 and within the Audit Committee
report on pages 98-108.
Group Risk Committee
The primary purpose of the Group’s Risk Committee is to assist the
Board in its oversight of the effectiveness of the risk management
framework. It performs its role through:
• Having an overview of the key risk issues identified across
the Group.
• Ensuring that the Group risk dashboard remains relevant on
an ongoing basis.
• Reflecting the Group's risk appetite against those identified risks.
• Overseeing and, where necessary, directing the effective design
and operations of the Group's governance, risk management and
internal control framework.
• Ensuring that there is adequate enterprise wide processes and
systems for identifying and reporting emerging risks.
The Group Risk Committee met three times during 2023 and was
chaired by the Chief Financial Officer, supported by Head of Risk.
The full responsibilities of the Committee are captured on page 63.
Emerging risk
The proactive management of emerging risk and opportunity is
regarded as a key priority for the Group, which will only continue in
importance given the ever evolving global operating environment.
By their nature, emerging risks are deemed different from our
identified principal risks due to their characteristics of ambiguity,
uncertainty, volatility and difficulty to define and quantify.
There is an acknowledgement however, that they have the potential
for both significant strategic impact and opportunity to create
competitive advantage.
To promote agility against these threats and continue to strengthen
our resilience, the Group’s current approach to the identification and
evaluation of emerging risk is via a combination of horizon scanning,
scenario planning, risk workshops, cross functional collaboration and
the use of external industry insights and thought leadership narrative
and perspectives.
Adopting this process allows the Board to remain alert to both
the internal and external emerging risk landscape and respond
and adapt accordingly.
An example of an emerging risk and opportunity identified by the
Group would be that of generative AI.
While not currently captured as a stand-alone principal risk,
components of this emerging exposure are already recognised in our
digital and cyber security risk mitigation strategies in recognition of
the pace of change.
Find out more
Risk appetite statement
Corporate Governance Report
Audit Committee report
See page 61
See page 71
See pages 98-108
The Weir Group PLC Annual Report and Financial Statements 2023
62
Strategic Report
Governance
Financial Statements
Additional Information
Risk management
continued
Risk management roles and responsibilities
The key roles and responsibilities for risk management are set out below.
Group
p Board
Overall responsibility for the Group’s risk management and
internal control frameworks, and strategic decision within
the Group.
Delegated responsibility from the Board to review the
effectiveness of the Group’s risk management and internal
control frameworks.
p Group Executive
Executive committee with overall responsibility for managing
the Group to ensure it achieves its strategic objectives.
Risk management responsibilities
• Annual review and ongoing monitoring of the effectiveness of the risk
management and internal control frameworks.
• Annual review of the Group’s risk appetite.
• Assessment of the Group’s principal and emerging risks.
• Twice a year receive a report from the Risk Committee that sets out the current
assessment of each principal risk, the effect of mitigating controls on each risk, the
direction of travel of each risk versus the prior year, the extent to which each could
potentially impact the Group’s strategic goals and any relevant findings relating to
significant control failings or weaknesses which have been identified.
• Taking decisions in accordance with the delegated authority matrices.
control frameworks.
• Review of reports from management and internal and external auditors.
• Review of the results from the six-monthly self-assessment
compliance scorecards.
• Managing risks that have the potential to impact the delivery of the Group’s
strategic objectives.
• Monitoring business performance, in particular, key performance indicators relating
to strategic objectives.
• Taking strategic decisions in accordance with the delegated authority matrices.
• Escalating issues to the Board as required.
Audit Committee
• Annual assessment of the effectiveness of the risk management and internal
Risk Committee
• Review of the design and operation of the Group’s Risk Management Policy
Management committee responsible for governance of the
Group’s Risk Management Policy and framework.
and framework.
• Identification and assessment of the key risks facing the Group, identification
of the key controls mitigating those risks and identification of further actions
where necessary.
• Identification and review of emerging risks and opportunities
• Review of the Divisional risk dashboards, considering the appropriateness
of management’s responses to identified risks and assessing whether there
are any gaps.
• Reporting key Group and Divisional risks to the Board.
Chief Executive’s Safety Committee
• Executive Committee representation to drive improvements in our safety
Safety committee with responsibility to set and monitor
the Group’s SHE principles, priorities and actions.
performance throughout the Group.
• Champion the Group’s Safety, Health and Environmental (SHE) Charter, reinforcing
our commitment to maintaining a zero harm workplace.
• Ensure the strategy for SHE improvements is comprehensive, risk-based,
deliverable and balanced and built on best practice from peers, customers
and suppliers.
Management Committees
• Monitoring the management of key risks across the Group associated with the
Several management-led committees, some of which are
known as Excellence Committees. These committees cover a
wide range of subject areas relevant to the Group and delivery
of its strategy objectives including safety, sustainability,
technology, and inclusion, diversity and equity.
p Divisional management
Responsible for managing the businesses within the Divisions
to ensure Divisional strategic objectives are achieved and
there is compliance with Group policies and standards
throughout their Division.
respective remits of the Management Committees.
• Monitoring performance and compliance with Group objectives, policies and
standards related to the respective remits of the Management Committees.
• Taking decisions in accordance with the delegated authority matrices.
• Escalating issues to the Group Executive as required.
• Reviewing the results from relevant assurance activities.
• Design and administration of the Group’s compliance programme covering core
areas including anti-bribery, anti-corruption, anti-trust, privacy, trade controls and
human rights.
• Identifying and managing risks that have the potential to impact the delivery of the
Division’s strategic objectives.
• Monitoring performance and compliance with Group objectives, policies
and standards within the Divisions and with regard to the outputs from the
Excellence Committees.
• Taking decisions in accordance with the delegated authority matrices.
• Escalating issues to the Group Executive as required.
• Reviewing the results from relevant assurance activities.
Operating company management
• Identifying and managing risks that have the potential to impact the delivery
Responsible for ensuring company objectives are achieved
and business activities are conducted in accordance with
Group policies and standards.
of their company’s strategic objectives.
• Monitoring performance and compliance with Group objectives, policies and
standards within their company.
• Taking decisions in accordance with the delegated authority matrices.
• Escalating issues to Divisional management and Excellence Committees
as required.
• Reviewing the results from relevant assurance activities.
E
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The Weir Group PLC Annual Report and Financial Statements 2023
63
Strategic Report
Governance
Financial Statements
Additional Information
Principal risks and uncertainties
As in any business, there are
risks and uncertainties that
could impact the Group's ability
to achieve its strategic objectives.
Our risk management and
internal control frameworks are
designed to make this less likely
by clearly identifying and seeking
to mitigate the key risks.
The Board has conducted a robust assessment of the company's
emerging and principal risks, alongside the risk appetite statements
set out on page 61, meeting the Board's responsibilities in
connection with risk management and internal control
requirements in the UK Corporate Governance Code 2018. Each of
the principal risks is assigned an owner from among the Board or
Group Senior Management team, and a detailed review of each
principal risk has been completed in the year.
The Group's risk dashboards were reviewed, and validity of the
existing prior year principal risks were reassessed, and
consideration was given as to whether any new principal risks have
emerged, or certain risks are no longer considered to be a principal
risk. This review resulted in changes being made to the principal
risks in 2023.
The identified principal risks were subjected to a detailed
assessment based on the following considerations:
• Potential severity of each risk relative to the Group's stated
risk appetite.
• Existence and effectiveness of actions and internal controls that
serve to mitigate the risk.
• The overall effectiveness of the Group's control environment,
including assurance and any identified control weakness.
• The extent to which each of the principal risks could impact the
Group's viability in financial or operational terms, due to their
potential effects on the business plan, solvency, reputation
or liquidity.
The principal risks set out on pages 64 – 69 are those that
we believe to have the greatest potential to impact our ability
to achieve the Group's strategic objectives, or which have
the greatest potential impact on the Group's solvency, liquidity
or reputation.
Find out more
Our strategic framework
Viability statement
See page 18
See page 70
Key
Strategy
Peo pl e
Cu
s
t
o
Risk trend
Viability statement
Impacted
Increasing
Viability statement
m
e
r
Not impacted
Decreasing
P
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f
o
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h n olo
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T e
Political & social
No change
Description
Adverse political action, or political and social pressures, in territories in which we operate may result in
strategic, financial or personnel loss to the Group.
Risk trend
Risk owner:
Chief Legal Officer and
Company Secretary
Why we think this is important
How we are mitigating the risk
Key changes during 2023
Given the global nature of the Group’s operations,
we are exposed to an ever-changing political and
social landscape where recent tensions are
anticipated to persist and spread with the potential
to threaten both energy and food security,
increasing the risks of conflict and cyberattacks.
Adverse events may occur in the territories in which
we operate that may require us to act swiftly to
continue to protect our people and property and
adjust to regulatory changes that have the potential
to impact our competitiveness or have a negative
impact on our return on capital employed.
Ongoing active monitoring of sanctions and
political developments.
Positive proactive engagement with a range of
governments/elected representatives and trade
and industry bodies allows the Group to
contribute to policy decisions and address
specific concerns.
Our strategic planning process allows for a
regular review of market attractiveness while
also assisting in the forecasting of potential
political and social instability in the regions in
which we operate. A combination of risk horizon
scanning and third party intelligence sourced
from risk consultants allows the Group to
maintain flexibility and develop appropriate
contingency and exit strategy plans.
In the face of continued global fragmentation and
geopolitical uncertainty the Group continued to
build its resilience throughout the year, while also
keeping an eye on opportunities that may emerge
from such volatility.
In response, the Group deployed a number of key
risk initiatives which included the enhancement
and strengthening of our crisis response
protocols and elevated geopolitical risk horizon
scanning, splitting the findings between near-
term exposures and longer-term strategic risks in
recognition of their varying potential velocity.
Given the ongoing levels of uncertainty this risk
remained high on the Group's radar.
Impact on strategy
The Weir Group PLC Annual Report and Financial Statements 2023
64
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Strategic Report
Governance
Financial Statements
Additional Information
Principal risks and uncertainties
continued
Technology
Description
Failure of the Group to embrace technology, innovate and continue to develop and invest in both our core
and next generation solutions and services for our customers, leaves the Group's market-leading
positions and ability to deliver on growth ambitions exposed.
Risk trend
Risk owner:
Chief Strategy &
Sustainability Officer
Why we think this is important
How we are mitigating the risk
Key changes during 2023
Continued investment in our technology strategy
aligned on smart, efficient and sustainable
priorities. Targeting R&D minimum spend of 2%
of revenue.
Use of new emergent technologies radar
software/process with embedded AI scanning
capability to assess potential risks and
opportunities.
Development of Enterprise Technology Roadmap
(ETR) focused on five customer facing themes
(see page 30).
Increased technology-specific C-suite
engagement with customers and key account
management.
The impact and likelihood of this risk is assessed
to have remained constant during the year.
Strong governance around intellectual property
and new material/product launches.
Impact on strategy
Evolving WARC (Weir Advanced Research
Centre) model with strategic international
research, academic and technology scanning
partnerships and funding.
Uplift in our AI capability with the integration of
Motion Metrics and SentianAI.
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We need to continue to drive innovation across the
Group through investment in talent and
collaboration with research partners, thus ensuring
there is a sustainable and evolving product offering
leveraging new and adjacent technologies.
Failure to achieve this could give rise to:
• An inability to give sufficient priority to outer
horizon technology leading to an under
investment/delayed development to meet our
medium to long-term performance goals.
• Failure to identify and mitigate potentially
disruptive technology trends as they appear in
mining or adjacent industries.
• Failure to leverage our deep customer/market
insights to develop products and solutions that
meet the most strategic needs of our customers
and other stakeholders.
• Failure to adapt our business model to capture
economic value/prevent economic loss from
technological advances.
• Failure to leverage new technology to reduce
costs/improve our own operational performance.
• Failure to develop, attract and retain the talent
and strategic R&D partnerships.
• Failure to capture climate transition opportunity/
mitigate risk via our technology offering.
Value chain excellence
Description
Failure to achieve value chain excellence improvements and the associated reduction in costs and
enhanced capital efficiency.
Risk trend
Risk owner:
Divisional Presidents
Why we think this is important
How we are mitigating the risk
Key changes during 2023
An effective and efficient value chain is fundamental to
the Group in maintaining its competitive advantage and
continuing to create and deliver for its customers.
Failure of the Group to drive improvements in its value
chain management presents the following risks:
• Loss of opportunity to meet our customers'
needs in terms of product volume, quality
and delivery, resulting in a loss of reputation
and sales.
• Failure to optimise our inventory inhibits the
Group's investment strategy and creates slow-
moving and absolute inventory, ultimately
impacting our operating profit and cash
conversion.
• Failure to effectively manage inflationary
increases in procurement costs as commodity
prices increase leads to a reduction in our cost
competitiveness and/or margins.
• Failure to develop organisational capability
to sustain and improve operational
performance results.
Regular KPI monitoring of the value chain
throughout the organisation.
Value Chain Excellence initiatives operate
throughout the Group to drive improvements,
including expanding production in best
cost countries.
The Group’s forward purchase commitments are
being closely monitored to manage inventories at
levels appropriate to market conditions.
Our credit risk management procedures are
under continuous appraisal and review.
We regularly monitor market activity to ensure
we remain competitive.
Through our Performance Excellence initiative
we have a clear pathway to optimise and
transform our business creating a lean and
efficient Weir, reducing our cost base and
driving margin expansion.
Since its launch last year, we have built great
momentum over the course of 2023 with the
scope of existing projects expanding, and a
number of new projects having been identified
which will all contribute to our operating margin
target.
Our value chain excellence risk was deemed
unchanged over the course of the year.
Impact on strategy
Improved demand planning and forecasting,
including sales and operations planning.
Realising value from shared service initiatives.
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Principal risks and uncertainties
continued
Safety, health & wellbeing
Description
Failure to adequately protect our people and customers from harm presents a significant threat to the
physical and mental wellbeing of the Group's existing and available workforce, leading to a resultant
impact on productivity and our ability to meet customer demands and expectations.
Risk trend
Risk owner:
Chief People Officer
Why we think this is important
How we are mitigating the risk
Key changes during 2023
Thinking safety first is one of the core values within our
We are Weir framework and we are 100% committed
to achieving zero harm at Weir with policies and
processes in place to ensure the continued health,
safety and physical and mental wellbeing of all
employees, customers and third parties.
The Group's SHE Charter sets out the guiding
principles, priorities and actions, each of which
play a vital role in supporting our shared vision of
achieving a zero harm workplace where everyone
goes home safe and healthy.
During 2023, over 8,000 employees across nearly
140 of our sites undertook a behavioural safety
gap analysis to determine safety maturity level,
identify areas for improvement and determine
local action plans to drive cultural change.
The Weir SHE Management System establishes
a common set of standards and expectations
for addressing risk throughout our
operations globally.
The Weir Health & Wellbeing Framework is
designed to support the broader health and
wellbeing of all employees, ensuring that
everyone knows that 'It's ok not to be ok'.
This framework provides access to a wide
range of resources focusing on key areas of
culture and leadership, safety and environment,
mental wellbeing, digital wellbeing and
financial wellbeing.
Using methodology from The Keil Centre,
employees attend workshops led by trained Zero
Harm facilitators. The process was overseen by
the SHE Excellence Committee, with insights and
outputs reviewed by the CEO Safety Committee.
The impact and likelihood of this risk was
assessed as remaining unchanged from the
prior year.
Impact on strategy
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People
Description
Failure of the Group to build an ever more inclusive, diverse and equitable culture and adopt new ways of
working that give rise to an inability to attract and retain the very best workforce.
Risk trend
Risk owner:
Chief People Officer
Why we think this is important
How we are mitigating the risk
Key changes during 2023
Our people represent our biggest asset and so
the ability of the Group to attract, develop and
retain talent and build capability at the pace required
is fundamental to the delivery of the Group's
strategic objectives.
Promotion of the Weir Group values and
behaviours, Code of Conduct and HR policies
sets the standards and expectations for all our
staff, reinforcing our stated commitment to
attracting and retaining the very best people.
Our ambition to foster an inclusive, diverse and
equitable workforce that increasingly reflects the
diversity of the markets in which we operate is key
to creating a purpose-driven culture where we can
all do the best work of our lives.
High performer assessments are undertaken to
identify and develop our very best talent.
Succession plans are in place and periodically
reviewed for all of our key management.
Personal development plans are set and
reviewed for the effective development of all
our staff.
We continue to offer competitive compensation
and benefits packages.
To further support the development of our high
performance culture and organisational capability,
the Group implemented a range of new initiatives
in 2023.
In the areas of inclusion, diversity and equity we
undertook deeper listening and insight analysis
including gender focus groups, ongoing allyship
building, expansion of affinity groups, launch of a
second reverse mentoring programme and
continued support for under-represented groups
in STEM.
In the pursuit of our agenda to build a sustainable
workforce which allows employees to grow, we
expanded the scope of our talent development
cycle to now include 900 people in order to
provide the visibility of our diverse talent pipeline
through the organisation.
Over the course of the year, our people risk was
assessed as remaining stable.
Impact on strategy
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Additional Information
Principal risks and uncertainties
continued
Market
Description
Changes in key mining markets, including commodity prices and macroeconomic conditions, have an
adverse impact on customers' expenditure plans. Fundamental market structure changes could alter the
long-term economics of the business.
Risk trend
Risk owner:
Chief Financial Officer
Why we think this is important
How we are mitigating the risk
Key changes during 2023
Risk of a short-term market contraction due to
heightened inflationary environment, corresponding
monetary response and geopolitical tensions
persisting and spreading could give rise to a
negative impact in logistics flow and supply/demand
dynamics in the commodity space.
Cyclical nature of the Group's end markets,
including continued exposure to oil sands, giving
rise to structural downturns and resultant pricing
and operational pressures.
Risk of credit markets tightening, limiting access to
capital limiting M&A opportunities.
Risk in China's post-Covid growth proving slower
than global expectations despite government
stimulus packages.
Our aftermarket-focused business model and
enhanced focus on technology to reduce cost
and improve efficiency combine to mitigate the
risk of future downturns.
Despite the inflationary and high interest
rate environment persisting into 2023 the
Group continued its journey of growth and
margin expansion.
The Group's strategic planning process utilises
extensive market intelligence to assist in
forecasting opportunities and dips in markets.
Key risk initiatives underpinning this performance
included (i) the Group completing the issue of
new five year UK Sustainability-Linked Notes
securing long-term liquidity and diversifying from
bank debt and (ii) continued investment in
enhanced technology as a key differentiator.
Reflecting these key mitigation initiatives, our
market risk was assessed as remaining flat.
Impact on strategy
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Climate
Description
Failure to adapt to and mitigate climate change and the associated impact on our current or future
business.
Risk trend
Risk owner:
Chief Strategy &
Sustainability Officer
Why we think this is important
How we are mitigating the risk
Key changes during 2023
Failure to adapt, manage and embrace the
challenges and opportunities presented by climate
change could have a significant impact on Weir, our
people, our customers and our supply chains.
Sustainability strategy developed via extensive
multi-stakeholder materiality assessment
encompassing Environmental, Social and
Governance (ESG) areas (see pages 42-45).
Physical risk exposures, both acute and chronic,
can be characterised by extreme weather events
including floods, heatwaves, storms and rising sea
levels that could threaten not only our own
operations, but also exacerbate geopolitical tensions
should these events lead to forced migration in
certain regions.
The world's climate challenge and transitioning to
a low-carbon economy brings with it significant
opportunity for the Group. However, failure to
innovate and deliver smarter, more efficient and
sustainable solutions for our customers and, at the
same time, effectively manage our own footprint,
could give rise to a number of risks ranging from
political and legal challenges, shifts in market
demands and changes in customer or community
perceptions.
CO2e reduction strategy prioritised and being
executed in both our own operations and those
of our customers and supply chain.
Deliver sustainable Weir – Reduce our footprint
priority with Science Based Target (SBTi) aligned
scope 1&2 CO2e reduction target being delivered
via combined efficiency improvements and
renewable supply optimisation. (see pages
46-47).
Accelerate sustainable mining -– Use less energy
priority with SBTi aligned scope 3 CO2e reduction
target and avoided emissions approach (see
pages 48-49).
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We are continuing strong engagement with
stakeholders in this area.
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Approval of the SBTi aligned scope 1, 2 & 3
targets that we set in 2022.
Third party limited assurance of our emissions
extended to include scopes 1,2,3 and avoided
emissions.
Climate scenarios analysis refreshed and
extended to include 1.5°C scenario, and reflected
in our further enhanced TCFD disclosures that
underpin our strategy (see page 52).
The impact and likelihood of this risk was
assessed as remaining unchanged from the
prior year.
Impact on strategy
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Additional Information
Principal risks and uncertainties
continued
Digital
Description
Failure to exploit 'digitalisation' opportunities impacting the Group's ability to meet evolving customer
expectations.
Risk trend
Risk owner:
Chief Information
Officer
Why we think this is important
How we are mitigating the risk
Key changes during 2023
To meet the needs of our customers, the ambitions
of the business and the expectations of an
increasingly digital world, Weir must prioritise and
accelerate its digital evolution.
Failure to do so will negatively impact Weir's market
position along with our ability to attract the people,
skills and investment needed as a premium mining
technology business.
If we fail to implement a holistic, digitalised
ecosystem and culture quickly and effectively,
competitors, who successfully embed digitalisation,
will benefit and increase their market share.
Having established our Future Back Digital
Vision & Roadmap and Digital Steering Group
in the prior year, 2023 has seen significant
progress throughout the Group in the delivery
of planned customer digital propositions and
enabling technology.
2023 saw the launch of our digital experience
platform (Weir global website and customer
portal platform) with an executive digital summit
held to ensure alignment on the digital
architecture and foundations needed to enable
the delivery of our digital product roadmap.
In addition we established a digital and data
job family, and digital and data community of
practices to optimise our digital fitness, our digital
capabilities and manage digital talent
and retention.
Aligned to the Digital Roadmap, both Group and
Divisions have collaborated across the strategic
planning processes to ensure appropriate
prioritisation of investment.
We continued to invest in technology for
sustainability mining through the maturing of
investment in our Motion Metrics business.
Acquisition of SentianAI to further enhance our
digital product capabilities and customer offering.
In 2023 we piloted generative AI to improve
digital development and will continue to invest
in 2024.
Over the course of the year, this risk was
assessed as remaining stable.
Impact on strategy
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Ethics & governance
Description
Interactions with our people, customers, suppliers and other stakeholders are not conducted with the
highest standards of integrity and in accordance with Group policies and procedures, which devalues our
reputation.
Risk trend
Risk owner:
Chief Legal Officer and
Company Secretary
Why we think this is important
How we are mitigating the risk
Key changes during 2023
We are unwilling to accept dishonest or
corrupt behaviour from our people, or external
parties working on our behalf, while conducting
our business.
The Weir Code of Conduct, supplemented with
Group policies on related topics, provides a clear
framework for how we expect our business will
be conducted.
If we fail to act with integrity, we are at risk of:
• Reputational damage leading to a loss of
business opportunity.
• Increased scrutiny from regulators.
• Legal action from regulators, including fines,
penalties and imprisonment.
• Exclusion from markets important for our
future growth.
• Failure to meet required social standards to
maintain licence to operate in our communities.
We expect all areas of the business to do the right
thing and conduct business in compliance with
applicable laws, Weir Group policies and
procedures, and the highest ethical standards.
Regular training and re-enforcement of principles
is provided using a range of mechanisms
including, town hall-style sessions and online and
induction training.
Our risk management and internal control
frameworks are continually monitored
for effectiveness.
Internal Audit's remit includes regular review of
the anti-bribery and corruption and financial
controls across the Group.
The Group Compliance function designs and
administers our global compliance
programme and assists Internal Audit in
monitoring adherence to enhance global focus
on compliance.
The Group delivered Code of Conduct,
competition law and modern slavery/forced
labour training modules to a wide range of
personnel across the organisation, thus
reinforcing our behavioural expectations and
raising awareness of key compliance risks.
The Group also took a number of different
actions to re-enforce the availability of the Ethics
Hotline as a tool to report concerns about
inappropriate behaviour.
The Group continued the work to enhance its
sanctions and trade control controls, and this
work will continue in 2024 including by providing
bespoke training to designated high risk roles.
Risk remained stable across the year.
Impact on strategy
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An Ethics Hotline is available to all members of
staff and the public. Reports are investigated on a
timely basis and summary reports provided to the
Group Executive and Board.
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Additional Information
Principal risks and uncertainties
continued
Information security & cyber
Description
Failure to adequately protect Weir from cyber-enabled fraud and other information security risks that can
lead to operational disruption, reputational damage, regulatory fines and/or financial impacts.
Risk trend
Risk owner:
Chief Information
Officer
Why we think this is important
How we are mitigating the risk
Key changes during 2023
Weir's global operations are heavily reliant on IT
systems, tools and infrastructure. As the scale,
frequency and impact of cyber attacks continue to
evolve and increase, we recognise the significant
risk this poses to Weir and its people, and take
appropriate steps to mitigate these threats.
Weir is part of an integrated, complex supply chain,
with each member of the supply chain managing
the risk of exposing each member of the supply
chain to their vulnerabilities.
Natural language processing and generative AI tools
(e.g. ChatGPT) are rapidly improving in capability in
the public domain, leading to the risk of misuse of
those tools by cyber criminals to develop the next
generation of hacking capability.
We have an IT governance framework that
underpins our technology operations. The IS&T
Risk and Assurance Board provides assurance
and oversight of our security posture across
the business, approves policy control and
assessments in relation to cyber risk and
information technology/operational
technology security.
Updates to the cyber security strategy is now
presented to the Board on an annual basis.
Our cyber security strategy continues to deliver
ongoing security enhancements to ensure the
business maintains a resilient response to cyber
threats, including a three-year rolling plan of cyber
security initiatives.
Security incidents are managed by the cyber
security operations team and serious incidents
are reported to the Group Executive. Internal and
external audits also take place regularly, providing
additional governance and resilience to our
controls, as well as highlighting opportunities to
make further improvements.
We run cyber security education and awareness
campaigns throughout the year to ensure
colleagues are equipped with the knowledge and
confidence they need to use technology safely
and securely.
Our technology enterprise architecture and cyber
security strategy roadmap continue to deliver
improvements across the business that will help
reduce the impact of any future cyber incidents.
Over the course of the year, we have continued
to improve our cyber security positioning which
included the development and implementation of
a new exceptions management policy to support
in the management and control of exceptions
being requested for cyber security policies.
In 2023 we rolled out mandatory data labelling,
which supports technically enforcing our Data
Classification and Labelling and Data Policy.
Over the course of the year, our information
security & cyber risk was assessed as stable.
Impact on strategy
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Competition
Description
Increasing presence of low-cost competitors with improving quality in our end markets leads to
significant pricing pressure and margin deterioration. Disruptive technologies, or new entrants with
alternative business models, could also reduce our ability to sustainably win future business, achieve
operating results and realise future growth opportunities. Continuing threat from third party replicators.
Risk trend
Risk owner:
Divisional Presidents
Why we think this is important
How we are mitigating the risk
Key changes during 2023
Continued presence of low-cost competitors
with improving quality in our end markets
leads to significant pricing pressure and
margin deterioration.
Alternatively, increased competition forces a
continual release of longer wear life products,
resulting in maintaining market share, but
cannibalising our sales volumes with difficulty
in realising commercial benefits.
Horizon scanning for competitor threats,
including patent searches and applications.
Technology solutions with differentiation on
engineering expertise, aftermarket service and
total costs of ownership.
Continued focus on improving sustainability and
efficiency of our existing operations, combined
with technology investment, including the
acquisition of SentianAI, served to accelerate
our technology roadmap and expand our
digital capabilities.
Continued development of operational efficiency
and improvement plans.
Over the course of the year, this risk was
assessed as remaining stable.
Continued investment in core product design,
process and materials that provide high value.
Impact on strategy
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The Strategic Report covering pages 1-70 of this Annual Report and
Financial Statements 2023, has been approved by the Board of
Directors in accordance with the Companies Act 2006 (Strategic
Report and Directors’ Report) Regulations 2013.
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On behalf of the Board of Directors
Graham Vanhegan
Chief Legal Officer and Company Secretary
29 February 2024
The Weir Group PLC Annual Report and Financial Statements 2023
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Financial Statements
Additional Information
Viability statement
In accordance with provision 31 of the UK Corporate Governance
Code 2018, the Directors have assessed the viability of the Group,
taking into account the Group’s current position and the potential
impact of the principal risks documented on pages 64 to 69 of the
Annual Report.
Assessment period
The Directors have determined that a three-year period to 31
December 2026 is an appropriate period over which to provide its
viability statement. The Group’s key markets are by nature cyclical
and therefore, while the Group operates a five-year strategic planning
process, market cyclicality and the related lack of visibility over
commodity prices in particular indicate that a period of three years is
appropriate. We believe that this approach presents the Board and
readers of the Annual Report with a reasonable degree of confidence
over this longer-term outlook.
Risk assessment
The Board considered the longer-term prospects of the Group as a
mining technology leader and carried out a robust assessment of the
principal risks facing the Group, including those that could threaten
its business model, future performance, solvency or liquidity.
While the review has considered all the principal risks identified by
the Group on pages 64 to 69, the following risks were focused on for
enhanced stress testing:
• Market volatility, modelled by applying downturn scenarios and
major customer shocks;
• Technology, digital, competition and value chain excellence,
modelled by significant loss of market share and pricing pressure
in key markets;
• Value chain excellence, information security & cyber, and safety,
health & wellbeing, modelled by major site shutdown scenarios
and significant disruption to operations as a result of a cyber
incident or pandemic;
• A regulatory shock scenario in response to the ethics and
governance or safety, health & wellbeing risks;
• Climate, modelled by major site shutdown scenarios as a result of
severe weather and potential downside impact on mining
revenues from certain commodities as a result of changes in
markets driven by climate action; and
• Political & social risks, modelled by a major economic shock and
the impact of supply chain and commodity inflation.
While the Group has delivered strong financial results in the current
year and enters 2024 with a strong order book, supportive mining
markets and a clear strategy to capitalise on the attractive long-term
structural trends in our markets, macroeconomic and geopolitical
uncertainty persists. Recognising these uncertainties and the
potential impact on our operations, the Directors have also
considered the longer-term prospects for the Group as part of the
overall consideration of viability.
It is acknowledged that a significant change in macroeconomic
conditions or the geopolitical landscape would cause short-term
disruption. However, these risks are mitigated by resilience of the
Group’s aftermarket-focused business model, the geographical
spread of the Group and the strong supply chain processes in place.
These would allow the Group to adapt and remain viable.
The impact of climate change on our operations has also been
carefully considered. The Group has made commitments to longer-
term targets to align with SBTi requirements and has conducted
scenario analysis to assess risks and opportunities related to the
transition to a low-carbon economy. There continue to be no
indicators that climate change and the steps taken to achieve these
targets will impact the viability of the Group.
The Weir Group PLC Annual Report and Financial Statements 2023
70
Process and key assumptions
The Strategic Plan, prepared bottom-up annually and approved by the
Board, is used as the basis for the viability modelling and is
supplemented with due consideration of current trading. The key
assumptions underpinning the Strategic Plan include continued
strong demand for minerals such as copper, gold and battery metals
such as nickel driven by global population growth, industrialisation
and electrification. This translates into supportive commodity prices,
long-term economic growth and increasing demand for our new,
more sustainable solutions technology.
The output of this plan is used to perform debt and headroom profile
analysis, which includes a review of sensitivity to ‘business as usual’
risks, such as profit growth, working capital variances and return on
capital investment. The base case has been stress tested to reflect:
i. a severe but plausible downside scenario; and
ii. a highly unlikely more severe scenario.
The resulting scenarios were modelled to include a series of
individual one-off ‘shocks’ which represent the principal risks
identified above, in combination with commodity price-based market
downturn scenarios. The assessment took into consideration the
potential impact on the Group’s profits and cash flows and resulting
impact on banking covenants.
The analysis indicated that the Group would be able to comply with
its current banking covenants, which are shown in note 31 within the
Group Financial Statements, and maintain sufficient liquidity
headroom within its existing lending facilities under both scenarios.
The outcome of the modelling is supported by the following factors:
• The geographic spread of the Group’s operations helps minimise
the risk of serious business interruption or catastrophic damage to
our reputation;
• While the Group remains exposed to some cyclicality from the
markets in which it operates, it continues to have a strong balance
sheet that helps support significant liquidity;
• The Group’s ability to flex its cost base and preserve cash, as
demonstrated in 2020 with the swift actions taken in response to
Covid-19, and seen in earlier downturn years;
• While climate change actions may give rise to changes in certain
of the Group’s markets, our aftermarket-focused and technology-
differentiated business model, together with a commodity mix
biased to commodities critical to supporting decarbonisation, gives
the Group good protection against downside risk and the ability to
benefit from opportunities in other markets; and
• The Group’s ability to secure funding, demonstrated via securing
the issuance of five-year £300m Sustainability-Linked Notes in
2023, and a one-year extension to our Revolving Credit Facility
(RCF) to 2028. In February 2024, the Group opted to reduce the
RCF facility from US$800m to US$600m following strong cash
generation in 2023. The combination of funding activity and strong
cash generation provides the Group with improved levels of
liquidity over an extended maturity profile.
These factors are considered critical in protecting the Group’s
viability in the face of adverse economic conditions and/or the
additional risks highlighted.
Review process
The Audit Committee, on behalf of the Board, have reviewed the
underlying processes and key assumptions underpinning the viability
statement. While this review does not consider all of the risks that
the Group may face, the Board considers that this stress testing-
based assessment of the Group’s prospects is reasonable in the
circumstances of the inherent uncertainty involved.
Confirmation of viability
Based on this assessment, the Directors confirm that they have a
reasonable expectation that the Group will be able to continue in
operation and meet its liabilities as they fall due over the period to
31 December 2026.
Strategic Report
Governance
Financial Statements
Additional Information
Introduction from the Chair
Our governance
framework is designed
to ensure we have the
processes and
resources in place
to meet our strategic
objectives.
" The Board strives to
ensure that we
understand the views of
all of the Company’s
stakeholders and that
we take those views into
account in our decisions.”
Barbara Jeremiah
Chair
Dear shareholder,
On behalf of the Board, I am pleased to present the Corporate
Governance Report for the year ended 31 December 2023.
Strategic focus and our governance framework
The Board and its Committees have had another busy year,
continuing to consider themes and issues impacting all areas of our
strategy and business model. Our governance framework, described
in more detail on page 78, promotes robust corporate governance
processes and ensures we have the necessary resources in place for
the Group to meet its strategic objectives and measure performance
against them. You can read more about some of the Board's most
important decisions in 2023, including the decision to establish a new
Sustainability and Technology Committee, on page 80.
Stakeholder engagement
The Board strives to ensure that we all understand the views of the
Company’s stakeholders and that we incorporate those views into
our decision-making process. This year we undertook a range of
investor and shareholder meetings on a variety of different topics,
and we look forward to further dialogue with you at our Annual
General Meeting (AGM) on 25 April 2024. The Board also maintains a
variety of effective engagement channels with our employee
population across the world, as described in more detail on pages 81
to 83. Additionally, we have also spent time engaging with other
stakeholders across our business. You can read more about our
stakeholder engagement on pages 84 to 86, and how these
engagement processes informed some of the Board’s most
important decisions in 2023 on page 80.
Board changes
We made several changes to Board and Committee membership
during 2023 and early 2024, bringing in new perspectives and useful
experience to enrich our discussions and support delivery of our
strategy. I was delighted to welcome both Penny Freer and Andy
Agg as new Non-Executive Directors in October 2023 and February
2024 respectively, and we look forward to welcoming our new Chief
Financial Officer Brian Puffer, on 1 March 2024. You can read more
about Penny, Andy and Brian’s appointment processes in the
Nomination Committee report on pages 91 to 97.
We also said goodbye to Ebbie Haan, Mary Jo Jacobi, John Heasley
and Clare Chapman during 2023. As announced on 27 February 2024,
Srinivasan Venkatakrishnan will be stepping down on 31 March 2024.
Following the AGM in April, Sir Jim McDonald will also be stepping
down after serving nine years on the Board. I would like to express
my thanks to each of them for their valuable contributions to the
Board over the course of their respective tenures.
Board effectiveness
At the end of 2023, the Board and its Committees were evaluated
with assistance from Lisa Thomas of Independent Board Evaluation
to ensure that we continue to operate as effectively as possible and
to offer opportunities for further enhancements in 2024. You can
read more about the effectiveness review process, as well as an
update on progress against our objectives from 2022 and our points
of focus for the year ahead, on page 89.
On behalf of your Board, I confirm that we consider that this Annual
Report, taken as a whole, is fair, balanced and understandable and
provides the information necessary to assess the Company’s
position, performance, business model and strategy.
The Weir Group PLC Annual Report and Financial Statements 2023
71
Barbara Jeremiah
Chair
29 February 2024
Strategic Report
Governance
Financial Statements
Additional Information
Governance at a glance
Navigating our Corporate Governance disclosures
Chair’s statement on governance
UK Corporate Governance Code compliance statement
Our Board of Directors
Our Group Executive
Our governance framework
Board leadership and activities
Principal decisions
Our culture and approach to employee engagement
Shareholder engagement
External stakeholder engagement
Division of responsibilities
Composition, succession and effectiveness
Risk management and internal controls
Nomination Committee report
Audit Committee report
Remuneration Committee report, including Directors' Remuneration Report
Pages
71
72
73 to 76
77
78
79
80
81 to 83
84
85
87 to 88
89
90
91 to 97
98 to 108
109 to 132
Compliance with the UK Corporate Governance Code
The Company is subject to the UK Corporate Governance Code, published by the Financial Reporting Council in 2018. The UK Corporate
Governance Code is available on the FRC’s website: www.frc.org.uk. The Board considers that the Company has, throughout the
year ended 31 December 2023, applied all of the principles and complied with all of the provisions of the Corporate Governance
Code. This Annual Report as a whole explains how the Company has applied the principles and complied with the provisions of the Code.
The table below offers a guide as to where the most relevant information can be found for each principle.
Principles of the UK Corporate Governance Code
1. Board leadership and company purpose
A. Leadership and long-term sustainable success
B. Purpose, values and culture
C. Resources and control framework
D. Shareholder and stakeholder engagement
E. Workforce policies and practices
2. Division of responsibilities
F. Leadership of the Board
G. Board composition and division of responsibilities
H. Role and commitment of non-executive directors
I. Board support
3. Composition, succession and evaluation
J. Board appointments, succession and diversity
K. Board skills and experience
L. Board effectiveness review
4. Audit, risk and internal controls
M. Internal and external audit functions
N. Fair, balanced and understandable assessment
O. Risk management and internal controls
5. Remuneration
P. Remuneration policies and practices
Q. Development of remuneration policy
R. Judgement and discretion
The Weir Group PLC Annual Report and Financial Statements 2023
72
Pages
73 to 76, 78 to 80
81
87 to 88, 90
84 to 86
81 to 83, 90
79
87 to 88
87
88
93
92
89
90, 98 to 108
71, 90,
98 to 108
90, 98 to 108
109 to 132
109 to 132
109 to 132
Strategic Report
Governance
Financial Statements
Additional Information
Board of Directors
Barbara Jeremiah (72)
Chair
Jon Stanton (56)
Chief Executive Officer
Sir Jim McDonald (66)
Senior Independent Director
Nationality: British
Independent: No
Date of appointment: Chief Executive Officer
since 1 October 2016, Finance Director from
April 2010 – October 2016
Nationality: British
Independent: Yes
Date of appointment: Non-Executive Director
since 1 January 2015, Senior Independent
Director since 28 April 2022
Nationality: American
Independent: Yes
Date of appointment: Non-Executive Director
since 1 August 2017, Senior Independent
Director from 1 January 2020 – 28 April 2022,
Chair Designate from 2 September 2021
and Chair from 28 April 2022
Key strengths and experience that support
strategy and long-term success
Barbara contributes considerable experience to
the Board having spent over 30 years in a
number of senior leadership roles within Alcoa
Inc., the global aluminium producer, and as the
Chairwoman of Boart Longyear Limited. She was
previously a Non-Executive Director and
Remuneration Committee Chair of Premier Oil
plc and Aggreko plc and a Non-Executive
Director of Russel Metals Inc.
Barbara’s leadership and governance experience
allows her to effectively contribute to the Board.
Barbara has a BA in Political Science and is a
qualified lawyer.
Key strengths and experience that support
strategy and long-term success
Jon became CEO in 2016 and contributes a
wealth of experience to the Board. Since
becoming CEO, he has led the Weir portfolio
transformation and oversees the delivery of the
We are Weir strategic framework to create long-
term sustainable performance improvement.
He provides leadership to deliver the strategy
and ensure it aligns with our purpose and values
and in particular our zero harm commitments.
Jon is committed to regular engagement with
stakeholders and to ensuring stakeholder
views and concerns are heard, understood
and considered.
Jon joined the Board as Finance Director in 2010.
Prior to this he was a partner with Ernst &
Young, where he led global board-level
relationships with a number of FTSE 100 multi-
national companies.
Jon is a Chartered Accountant and a member of
the Institute of Chartered Accountants in
England and Wales.
Key strengths and experience that support
strategy and long-term success
Sir Jim is a highly regarded expert in engineering
and technology and therefore contributes
specialist technical knowledge to the Board. He
is currently the Principal and Vice Chancellor of
the University of Strathclyde and has held the
Rolls-Royce Chair in Electrical Power Systems
since 1993. He holds a number of Non-Executive
Director roles and co-chairs the Scottish Energy
Advisory Board with the First Minister. Sir Jim
draws on his extensive experience to assist the
Board to approve the development of the
Group’s technology agenda and to provide
oversight and guidance on the sustainable
engineering solutions that promote the success
of the Company and build on its legacy of
engineering excellence. He is Chairman of the
Scottish Engineering and Energy Research Pools
and is FREng, FRSE, FIET, FInstP, FEI.
As announced on 19 December 2023, having
served on the Board for more than nine years,
Sir Jim will not be standing for re-election at the
2024 AGM.
Key external appointments
• Principal and Vice-Chancellor of Strathclyde
University
• Non-Executive Director of Scottish Power Ltd
• Non-Executive Director of UK National
Physical Laboratory
• President of Royal Academy of Engineering
• Senior Adviser to the UK Offshore Renewable
Energy Catapult Board
• Member of the Prime Minister's Council for
Science and Technology
Key external appointments
• Senior Independent Director and member of
the Audit and Nominations Committees and
Chair of the Remuneration Committee of
Senior Plc
• Senior Independent Director and member of
the Audit, Nomination and Societal Value
Board Committees of Johnson Matthey Plc
Key external appointments
• Non-Executive Director, member of the
Remuneration and People & Governance
Committees and Chair of the Audit
Committee of Imperial Brands Plc
Committee membership key
*
Committee Chair
A Audit Committee member
N Nomination Committee member
R
S
Remuneration Committee member
Sustainability and Technology Committee member
The Weir Group PLC Annual Report and Financial Statements 2023
73
Strategic Report
Governance
Financial Statements
Additional Information
Board of Directors
continued
Dame Nicola Brewer (66)
Non-Executive Director
Tracey Kerr (59)
Non-Executive Director
Ben Magara (56)
Non-Executive Director
Nationality: British
Independent: Yes
Date of appointment: 21 July 2022
Nationality: Australian/British
Independent: Yes
Date of appointment: 21 July 2022
Nationality: Zimbabwean
Independent: Yes
Date of appointment: 19 January 2021
Key strengths and experience that support
strategy and long-term success
Dame Nicola brings deep experience of
international relations and external
communications from a long and distinguished
diplomatic career. Most recently, she was Vice
Provost (international) of University College
London, and prior to that, held senior positions in
the Foreign and Commonwealth Office of the
British Government. Dame Nicola served as
British High Commissioner to South Africa
between 2009 and 2013 and was the first Chief
Executive of the Equality and Human Rights
Commission from 2007 to 2009.
Dame Nicola was a Non-Executive Director and
Chair of the Ethics & Corporate Responsibility
Committee of Aggreko plc from 2016 to 2021.
She was also a Non-Executive Director of
London First and of Scottish Power Limited.
Key strengths and experience that support
strategy and long-term success
Tracey brings extensive experience in
operations, sustainability and safety in global
mining businesses.
Tracey was Group Head of Sustainable
Development at Anglo American plc between
2020 and 2021. Prior to that, she held
accountability for safety, operational risk
management and sustainable development
across the Anglo American group from 2016 to
2020 and served as Group Head of Exploration
from 2011 to 2015. In her earlier career, she held
a variety of roles at Vale SA and BHP Pty Ltd.
Tracey was previously a Non-Executive Director
at Polymetal International Plc, where she chaired
the Sustainability Committee.
Key strengths and experience that support
strategy and long-term success
Ben is a seasoned mining industry leader.
He contributes extensive experience of leading
global mining businesses, which is of critical
importance to the Board as the Group delivers
on its strategy as a focused, premium mining
technology business. Since 2019, Ben has run
his own mining advisory firm.
Prior to joining the Weir Board, Ben served from
2013 to 2019 as CEO of Lonmin Plc, the then
third largest global platinum mining company.
He was a senior mining executive at Anglo
American plc, having served as Executive Vice
President of Engineering & Projects for Anglo
Platinum from 2009 to 2013 and CEO of Anglo
Coal SA from 2006 to 2009. Ben started his
career as a graduate with Anglo American plc
after completing his mining engineering degree
at the University of Zimbabwe.
Key external appointments
• Non-Executive Director and member of the
Key external appointments
• Non-Executive Director, member of the
Sustainable Development Committee
at Iberdrola SA
• Co-Chair of the UK group of the Trilateral
Commission
• Trustee of the Middle Temple Charity
Nomination and Remuneration Committees
and Chair of the Sustainability Committee of
Hochschild Mining PLC
Key external appointments
• Non-Executive Director and member of the
Risk and Business Resilience Committees of
Exxaro Resources Limited
• Non-Executive Director and Chair of the
• Non-Executive Director, member of the
Remuneration Committee of Grindrod Limited
Remuneration Committee and Chair of the
Sustainability Committee of Jubilee Metals
Group PLC
• Non-Executive Director of Antofagasta PLC
• Member of the Advisory Board of
Somika Sarlu
Committee membership key
*
Committee Chair
A Audit Committee member
N Nomination Committee member
R
S
Remuneration Committee member
Sustainability and Technology Committee member
The Weir Group PLC Annual Report and Financial Statements 2023
74
Strategic Report
Governance
Financial Statements
Additional Information
Board of Directors
continued
Srinivasan Venkatakrishnan (58)
Non-Executive Director
Stephen Young (68)
Non-Executive Director
Penelope Freer (63)
Non-Executive Director
Nationality: British/Indian
Independent: Yes
Date of appointment: 19 January 2021
Nationality: British
Independent: Yes
Date of appointment: 1 January 2018
Nationality: British
Independent: Yes
Date of appointment: 23 October 2023
Key strengths and experience that support
strategy and long-term success
Venkat brings a wealth of mining experience to
the Board gained through his vast experience of
leading global mining businesses.
He served as CEO of Vedanta Resources plc
from 2018 to 2020 and was CEO of AngloGold
Ashanti Limited between 2013 to 2018, having
previously been Chief Financial Officer of the
business from 2005, and of Ashanti Goldfields
Limited from 2000. His earlier career was as
a Chartered Accountant and restructuring
specialist with Deloitte & Touche in the UK
and India.
As announced on 27 February 2024, Venkat will
be stepping down from the Board on 31 March
2024 and therefore will not be standing for re-
election at the 2024 AGM.
Key strengths and experience that
support strategy and long-term success
Stephen is a skilled and experienced financial
professional. He was previously Chief
Executive of Meggitt PLC from 2013 to
2017, having previously served as Group
Finance Director from 2004. Prior to joining
Meggitt PLC, Stephen was Group Finance
Director of Thistle Hotels plc and the
Automobile Association.
Stephen’s financial background and his
leadership experience allow him to
contribute effectively both as a Board
member and as Chair of the Audit
Committee. His oversight of the Group’s
Audit function helps the Board to ensure
the ongoing integrity of the financial
information, internal controls and risk
management frameworks.
He is a Fellow of the Royal Aeronautical
Society, a Fellow of the Chartered Institute
of Management Accountants and a council
member of The University of Southampton.
Key strengths and experience that support
strategy and long-term success
Penny's extensive investment experience, as
well as her wide-ranging leadership skills across
many businesses, complement and strengthen
the Board and contribute to the delivery of the
Group's strategic objectives.
Penny has a background in investment banking,
having worked for over 25 years in a wide range
of roles. From 2000 to 2004 Penny led Robert W
Baird's UK equities division and prior to this she
spent eight years at Credit Lyonnais Securities
where she headed the small and mid-cap
equities business.
Penny has held a number of non-executive
director roles in both public and private
companies, including most recently as Chair of
Crown Place VCT Plc and as Senior Independent
Director and Chair of the Remuneration
Committee of Advanced Medical Solutions
Group PLC.
Key external appointments
• Non-Executive Chair of Endeavour Mining plc
• Non-Executive Director BlackRock World
Mining Trust plc
Key external appointments
• Non-Executive Director, member of the
Nomination and Sustainable Development
Committees and Chair of the Audit
Committee of Mondi plc
• Council Member of the University
of Southampton
Key external appointments
• Non-Executive Director and Chair of The
Henderson Smaller Companies Investment
Trust plc
• Non-Executive Director and Chair of
Empresaria Group PLC
• Chair of AP Ventures LLP
Committee membership key
*
Committee Chair
A Audit Committee member
N Nomination Committee member
R
S
Remuneration Committee member
Sustainability and Technology Committee member
The Weir Group PLC Annual Report and Financial Statements 2023
75
Strategic Report
Governance
Financial Statements
Additional Information
Board of Directors
continued
Gender diversity (full Board)
as at 31 December 2023
Women
Men
5
4
Ethnic diversity (full Board)
as at 31 December 2023
1
1
7
White
Asian/Asian
British
Black/African/
Caribbean/Black
British
Non-Executive Director tenure
as at 31 December 2023
0-3 years
3-6 years
6-9 years
4
2
1
Andrew Agg (54)
Non-Executive Director
Nationality: British
Independent: Yes
Date of appointment: 27 February 2024
Brian Puffer (54)
Chief Financial Officer
Designate*
Nationality: British/American
Independent: No
Key strengths and experience that
support strategy and long-term success
Andy brings significant financial experience
to the Board in light of his role as Chief
Financial Officer of National Grid plc. Andy
joined National Grid in 2008 and prior to his
current position held several senior finance
leadership roles across the National Grid
group, including as Group Financial
Controller, UK CFO and Group Tax and
Treasury Director.
Andy started his career at
PricewaterhouseCoopers and is a member of
the Institute of Chartered Accountants in
England and Wales.
Andy is also a member of The 100 Group,
an industry body representing the voice of
FTSE 100 CFOs, and forms part of its
Main Committee, as well as chairing its
Tax Committee.
Key strengths and experience that
support strategy and long-term success
Brian is an accomplished finance leader with
a strong track record, and his extensive
experience of business transformation
will help the Group to execute on its
strategy and deliver the benefits of
Performance Excellence.
Brian joins Weir from BP plc where he held
the role of Chief Financial and Risk Officer
for BP Integrated Supply and Trading. Prior to
that, Brian was Senior Vice President of BP's
Global Business Services between 2012 and
2017, having joined BP in 2009 as Senior
Vice President of Group Finance.
Brian spent 18 years at
PricewaterhouseCoopers, initially in various
roles in the US and UK before being
appointed as partner in 2002. Brian is both
a Certified Public Accountant and a
Chartered Accountant.
Key external appointments
• Chief Financial Officer of National Grid plc
• Member of The 100 Group Main
Committee and Chair of the Tax
Committee
Key external appointments
• None
* As announced on 5 December 2023, Brian Puffer
will join the Board as Executive Director and
Chief Financial Officer with effect from 1 March 2024.
Brian’s biography is included for informational
purposes.
Committee membership key
*
Committee Chair
A Audit Committee member
N Nomination Committee member
R
S
Remuneration Committee member
Sustainability and Technology Committee member
The Weir Group PLC Annual Report and Financial Statements 2023
76
Strategic Report
Governance
Financial Statements
Additional Information
Group Executive
Paula Cousins (50)
Chief Strategy and Sustainability Officer
Garry Fingland (59)
Chief Information Officer
Sean Fitzgerald (55)
President of Weir ESCO Division
Nationality: British
Date of appointment: 1 January 2020
Nationality: British
Date of appointment: 1 January 2020
Nationality: American
Date of appointment: 1 December 2022
Experience
Paula joined Weir in 2015 and before assuming
her current role was Group Head of Strategy &
Sustainability. Prior to Weir, Paula held a number
of strategy, commercial and engineering
leadership roles with Petrolneos, BP, McKinsey
& Company, ExxonMobil and Unilever. Paula has
a BEng Hons in Chemical and Process
Engineering and an MPhil in Chemical
Engineering Research, both from the University
of Strathclyde.
Experience
Garry joined Weir in April 2019 and has more
than 25 years' experience in leadership roles at
complex global technology organisations. Before
Weir, Garry was Chief Information Officer for
Bupa and served on its executive committee.
Garry has also held senior roles with Serco
Group and Diageo. A graduate of the University
of Glasgow, Garry also holds an MBA from the
University of Strathclyde.
Experience
Sean joined Weir in 2022 from A.P. Moeller
Maersk where he was Chief Executive Officer of
Maersk Container Industry. Sean started his
career as an Officer in the US Army, following
which he joined Bain & Company. Sean spent
nearly ten years with General Electric as the GM
of Onshore Wind Turbines before joining
Komatsu Mining Corporation as Americas
Regional VP for Underground Mining and later
as President for the China Region. Sean holds a
BS in Civil Engineering, an MA in Economics and
an MBA.
Rosemary McGinness (60)
Chief People Officer
Andrew Neilson (48)
President of Weir Minerals Division
Graham Vanhegan (59)
Chief Legal Officer and Company
Secretary
Nationality: British
Date of appointment: 31 July 2017
Nationality: British
Date of appointment: 1 April 2020
Nationality: British / American
Date of appointment: 1 May 2018
Experience
Rosemary joined Weir in 2017 from William
Grant & Sons, where she had been Group HR
Director. Having started her career in line
management with Forte Hotels, Rosemary has
held a range of positions covering all aspects of
human resources across the globe, including
being based in New York as Senior VP of HR for
Bowne Business Solutions. Rosemary is an
Advisory Board Member to the School for CEOs
and the University of Strathclyde Business
School, as well as a Fellow of the Chartered
Institute of Personnel and Development.
Gender diversity as at 31 December 2023
2
Men
Women
5
Experience
Andrew joined Weir in 2010 as Head of Strategy
and has undertaken a wide range of leadership
roles at Weir, including leading the integration of
ESCO into Weir and various positions within the
Weir Minerals Division. Prior to Weir, Andrew
held a variety of roles in banking, energy and
professional services companies, including
HSBC, HBOS, Scottish Power and KPMG.
Andrew holds a Masters degree in engineering
from the University of Strathclyde and is a
qualified accountant.
Experience
Graham joined Weir in 2018 from international
exploration and production company
ConocoPhillips, where he held a number of
senior positions for the company across a 24
year career. His roles included Deputy General
Counsel and most recently VP of Business
Development. A graduate of the University
of Glasgow, Graham is a solicitor qualified to
practise in both Scotland and England and is
an attorney-at-law before the State Bar of
New York, US.
Jon Stanton and, with effect from
1 March 2024 Brian Puffer, are also
members of the Group Executive.
Their biographical information can be
found on pages 73 and 76 respectively.
The Weir Group PLC Annual Report and Financial Statements 2023
77
Strategic Report
Governance
Financial Statements
Additional Information
Our governance framework
This page provides an overview of our governance framework, showing a clear and effective division of responsibility between our Board, its
Committees and operational management (which is in turn supported by a series of management-led committee.
Board of Directors
Primary Board responsibilities
include:
• Establishing Group purpose, values and
strategy (including in relation to ESG-
and cyber-related matters) and
ensuring appropriate resourcing to
meet strategic objectives (including
oversight of Group budget)
• Assessing and monitoring culture,
including ensuring alignment with
Group’s purpose, values and strategy
• Establishing framework of prudent and
effective controls that enable risk to be
assessed and managed
Board Committees
Nomination Committee
Leads the process for appointments,
ensures plans are in place for orderly
succession to both Board and senior
management positions and oversees
the development of a diverse pipeline
for succession.
• Ensuring that workforce policies and
practices are consistent with the
Group’s values and support long-
term sustainable success
• Approving significant M&A
transactions, capital and other
expenditure, contractual
commitments and other corporate
activity
• Approving Group dividend policy,
tax strategy and underlying
tax principles
• Overseeing Group’s overall corporate
governance framework
• Reviewing the means for the
workforce to raise concerns in
confidence and, if they wish,
anonymously and ensuring
arrangements are in place for
proportionate and independent
investigation of such matters
Find out more
Matters reserved to the Board
Board leadership and activities
Principal decisions
78
79
80
Audit Committee
Monitors integrity of financial
statements, reviews risk management
and internal control frameworks, and
considers both effectiveness of
internal audit function and
effectiveness, independence and
objectivity of external auditors.
Remuneration Committee
Determines policy for Executive
Director remuneration, sets
remuneration for Chair, Executive
Directors and senior management,
and considers potential application of
discretion to remuneration outcomes.
Nomination Committee Report
91
Audit Committee Report
98
Remuneration Committee Report
109
Sustainability and Technology
Committee Provides strategic and
governance oversight to explore the
future of the mining industry and the
implications for the Group's fully
integrated business model.
Disclosure Committee Assists
with decision-making on the
assessment, identification, handling
and disclosure of inside information
and compliance with applicable legal
and regulatory requirements.
General Administration
Committee Undertakes day-to-day
matters of a routine, administrative
or procedural nature on behalf of
the Board.
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Group Executive
The Board delegates execution of the Group’s strategy and day-to-day management of the Group to the Group Executive. The
Group Executive is therefore responsible for ensuring that each of the Group’s Divisions and functions are managed effectively
and monitoring and reporting on their performance against the Group’s key performance indicators, as approved by the Board.
The Group Executive is led by the Chief Executive Officer and comprises the other individuals whose names and roles are set out
on page 77. The Group Executive had 12 scheduled meetings during 2023.
Management Committees
The Group Executive is supported in its responsibilities by several management-led committees, some of which are known as
Excellence Committees. These management-led committees cover a wide range of subject areas relevant to the Group and
delivery of its strategic objectives, including safety, sustainability, technology, risk and inclusion, diversity and equity. The
committees may also report to the Group Executive and the Board from time to time. Each committee brings together other
individuals from across Weir with matter-specific expertise to promote coordinated delivery and information sharing.
The Weir Group PLC Annual Report and Financial Statements 2023
78
Strategic Report
Governance
Financial Statements
Additional Information
Board activities 2023
Board leadership
The Board has a collective responsibility to promote the long-term
sustainable success of the Company, generating value for
shareholders and contributing to wider society. This includes setting
the Company’s purpose, which is described on page 81, and a
description of the Company’s business model and strategy in support
of this purpose is set out on page 22. The Board leads the Group
within a framework of prudent and effective controls which enable
the assessment and management of risks, and seeks to ensure
that sufficient resources are available to meet the Group’s
strategic objectives.
There are a number of matters that are specifically reserved to the
Board for approval. These are set out in a clearly defined document
available on our website at global.weir/investors/corporate-
governance/matters-reserved-to-the-board/. The Board delegates
some of its responsibilities to its Committees as described on page
78, all of which operate within clearly defined terms of reference.
Membership of these Committees, their effectiveness and their
remit are considered at least annually.
Board meetings
Following recommendations from the external Board effectiveness
review conducted in 2021, 2023 was the first full year using our
revised Board calendar of six pre-scheduled meetings a year, all
of which were held in person and two of which were held at our
sites overseas. An additional two short Board meetings were held
during the year (one in person, one virtually) to deal with ad hoc
items arising. Board papers continue to be circulated well in
advance of meetings to allow Directors to give thorough
consideration of the issues prior to, and informed debate
and challenge at, Board meetings.
Feedback from the Board on this new six-meeting calendar, which
includes a revised topic planner to ensure that all items are
considered by the Board at the most appropriate time in both the
meeting and the financial year, has been very positive. The Board
continues to consider that it is meeting sufficiently regularly to
discharge its duties and consider all the matters falling within its
remit and on this basis, Board calendars for the next four years have
therefore been adapted to reflect this approach.
The Chair seeks consensus on all items that come before the Board
but, if there is a difference of opinion amongst Board members,
decisions are taken by majority. If any director has any concerns
about the operation of the Board or the management of the Group
that cannot be resolved through discussion and debate, their
concerns are recorded in the Board minutes.
Following recommendations from the external Board effectiveness
review conducted in 2021, the Non-Executive Directors, led by the
Chair, meet after every Board meeting without the Executive
Directors present. The Senior Independent Director also ensures that
meetings are held at least annually without the Chair present to
appraise the Chair’s performance.
The table opposite sets out Director attendance at each of the Board
meetings held during the year, and the tables on pages 91, 98 and
109 set out Director attendance at each of the Nomination, Audit and
Remuneration Committee meetings held during the year
respectively. Any Director who is unable to attend a meeting still has
the opportunity to review the associated Board papers, receive an
individual briefing from the Company Secretary and provide any
feedback in advance to the Chair or the Company Secretary.
The Board agenda for each meeting is split between discussion
topics, performance/reporting items and standing/formal matters.
Unless there is an agreed change to the agenda, the topics are
considered in this order to ensure there is adequate time to consider
the most substantive, strategic items.
The list of topics opposite sets out a selection of the diverse range of
matters the Board considered in its meetings during the year.
The Weir Group PLC Annual Report and Financial Statements 2023
79
Board meeting attendance 2023
Director
Barbara Jeremiah (Chair)
Jon Stanton
Sir Jim McDonald
Dame Nicola Brewer
Tracey Kerr
Ben Magara
Srinivasan Venkatakrishnan
Stephen Young
Penny Freer*
Ebbie Haan**
Mary Jo Jacobi**
John Heasley***
Clare Chapman****
Scheduled
Ad hoc
6/6
6/6
6/6
6/6
6/6
6/6
6/6
6/6
2/2
2/2
2/2
5/5
5/6
2/2
2/2
2/2
2/2
2/2
2/2
2/2
2/2
1/1
n/a
n/a
1/1
1/2
* Penny Freer joined the Board with effect from 23 October 2023.
** Ebbie Haan and Mary Jo Jacobi each resigned from the Board with effect from 27 April
2023.
*** John Heasley resigned from the Board with effect from 30 November 2023. John
recused himself from discussions at the Board’s ad hoc September meeting given they
related to the appointment of a new Chief Financial Officer.
**** Clare Chapman resigned from the Board with effect from 31 December 2023. Clare
sent apologies for the Board’s July meeting and its ad hoc meeting in September.
Andy Agg joined the Board with effect from 27 February 2024 and therefore did not
attend any meetings in 2023.
Strategy
• Annual strategy deep-dive, with sessions including corporate
finance, Performance Excellence and divisional strategy
• Sustainability strategy and climate-related matters, including
progress against our Sustainability Roadmap, our materiality
assessment and priority next steps
• IS&T digital strategy, including our work to accelerate
digitalisation, our cyber security strategy and transformation
of our IS&T function
• People strategy, including our strategic priorities and desired
outcomes, and data relating to headcount, retention, talent
acquisition, and global trends across various themes
Financial and operational performance
• Chief Executive Officer’s business report (including safety
update, Balanced Scorecard and market analysis)
• Chief Financial Officer’s report (including Performance
Excellence transformation programme updates)
• Divisional deep-dives for each of Minerals and ESCO, with
sessions across the year focusing on transformation, markets
and customer experience
• Full-year and half-year dividend proposals, viability scenarios
and 2024 budget
Acquisitions/disposals/corporate projects
• Issuance of Sustainability-Linked Notes
• Acquisition of Sentiantechnologies AB
Governance and risk
• Creation of new Sustainability and Technology Committee
• Global insurance programme and risk dashboard reviews
People
• Safety, health and wellbeing reports, as well as employee
insight and survey reporting
• Inclusion, diversity and equity updates
Strategic Report
Governance
Financial Statements
Additional Information
Principal decisions made by the Board
When making decisions throughout the year, each Director is aware of
their duty under section 172 of the Companies Act 2006 to ensure they
act in the way they consider, in good faith, would be most likely to
promote the success of the Company for the benefit of its members as a
whole. When considering what steps to take, the Board takes into
account a range of relevant factors including: the likely consequences of
the decision in the long-term; perspectives from the Company’s
stakeholders (including employees, suppliers, customers and others); the
impact on the environment and the communities in which we operate;
the desirability of maintaining a reputation for high standards of business
conduct; and the need to act fairly as between shareholders. The
examples below describe some of the principal decisions made by the
Board during the year, setting out which stakeholder groups were most
impacted by the decision and how their views were taken into account.
Key stakeholders
Employees
Customers
Suppliers
Shareholders
Communities and environment
Governments and NGOs
Approval of revised strategic plan, including
new operating margin target of 20% by 2026
Stakeholders most affected
Consideration of stakeholder views and interests
and impact on decision-making
As part of its annual review, the Board considered a refreshed strategic
plan (as described in more detail in the Strategic Report) including
assessing whether it was appropriate to implement a new operating
margin target of 20% in 2026.
Despite both geopolitical and macroeconomic uncertainty, the Board
ultimately confirmed its view that long-term trends in our markets are
attractive, with strong end market growth drivers which are incentivising
customers to maximise ore production and to accelerate demand for key
electrification metals. In turn, these trends are expected to drive demand
for the Group’s mining equipment, spares and expendables.
The Board noted that the Group was on track to deliver its previous
medium-term operating margin target of 17% in 2023 and, on this basis,
many stakeholders (in particular shareholders) were keen to understand
the next chapter of the Group's equity story, including a revised
commitment to unlock further the Group’s margin potential over a new
time horizon. When considering the revised margin target, the Board
noted that a significant portion could be achieved through measures
within the Group’s control, including savings attributable to Performance
Excellence, rather than purely growing margins through cost increases
that would impact customers. As part of the Board's continuing oversight
of Performance Excellence, the Board also approved the Group's
contractual arrangements with Accenture to provide outsourced services
as part of our new global business services model.
Equally, the Board was cognisant that delivery of the strategy, including
the new operating margin target, should not negatively impact our
existing commitments to other stakeholders, including our people and
the planet. Board discussions focused closely on how to deliver more
sustainable extraction and processing techniques to ensure that the
mining industry retains the social licence it needs to deliver on
forthcoming demand.
Approval of Enterprise Technology Roadmap
and sustainability strategy
Stakeholders most affected
Consideration of stakeholder views and interests
and impact on decision-making
Following strategy sessions conducted in 2022, during 2023 the
Board was asked to approve revised iterations of the Enterprise
Technology Roadmap (ETR). It also reviewed the outcomes of the
double materiality assessment conducted in 2023 and approved an
evolved, fully integrated sustainability strategy.
In both instances, the Board's decisions emphasised the importance
of ensuring that all strategies remained focused on helping
customers move less rock, use less energy, use water wisely, create
less waste and boost with digital – all of which, in turn, contribute to
enabling more sustainable mining by reducing the impact on the
environment and communities. Additionally, in the context of the
sustainability strategy, the Board reflected on stakeholder feedback
received during the double materiality assessment.
Both decisions involved the Board taking into account the likely
consequences of the decision in the long-term. For the ETR, the
Board considered the relationship between the product roadmaps
(which are focused on the nearer-term) and the ETR (which has a
longer-time horizon), as well as the justification for allocating more
resources to mid to long term potentially disruptive technologies. For
the sustainability strategy, the Board recognised that, as the Group
seeks to deliver on its commitments in the near-term, the Board
remains keen to maximise sustainability relevance over the longer-
term too. Maturing the Group's sustainability strategy over time is
expected to be a symbiotic process as evolving stakeholder
perspectives are taken into account, further supporting the Board
complying with its duties under section 172 of the Companies
Act 2006.
Following these decisions, the Board also approved a refreshed
brand strategy for the Group to underpin delivery of the strategic
plan, including both the ETR and sustainability strategy. The Board
considered the feedback from stakeholders that was used to inform
the brand strategy, designed to reflect Weir's status as a leading
mining technology brand.
Establishment of new Sustainability and
Technology Committee
Stakeholders most affected
Consideration of stakeholder views and interests
and impact on decision-making
As discussed in previous annual reports, the Board has been
considering for some time whether it might be appropriate to
establish a fourth principal committee to consider sustainability-
related matters.
In light of the other decisions disclosed on this page, this year Board
discussions galvanised around the importance of tackling longer-term
questions surrounding the future of the mining industry and exploring
the implications for Weir's business model. The Board also took into
account the views of customers, for whom sustainability (and
associated technological innovation) is an ever-increasing priority.
Following the Board’s decision, the Chief Executive Officer and our
Divisional Presidents outlined to investors at our Spotlight Capital
Markets Event in December 2023 our plans for growth and Performance
Excellence, including announcing the new operating margin target.
Investors highlighted that the operating margin target was viewed as
realistic and achievable, with praise for the areas of margin growth that
lay within the Group’s control.
On this basis, in December 2023 the Board concluded that it wished
to dedicate additional time and resources to consider sustainability
and technology matters, and to work more closely on these topics
with management through a specific Board committee. More
information on how the Nomination Committee selected Board
members to join the Sustainability and Technology Committee is set
out on page 95.
The Weir Group PLC Annual Report and Financial Statements 2023
80
Strategic Report
Governance
Financial Statements
Additional Information
Our culture and approach to employee engagement
Our purpose and strategy
Our purpose is clear: we are here to enable the sustainable and
efficient delivery of the natural resources essential to create a better
future for the world. Our purpose statement was specifically chosen
to address some of the biggest challenges in our markets, from
increasing productivity to supporting growing demand for
commodities like copper, to reducing the environmental impact of
both our operations and those of our customers. Our purpose
recognises that a growing world depends on essential resources and
we believe that the sustainable delivery of essential resources
depends on us.
Our purpose is the driving force behind our strategy and informs our
We Are Weir strategic framework, all of which is detailed on pages
18 to 19. Both our purpose, and We Are Weir, were most recently
refreshed in 2020 to reflect a number of internal and external factors
including the growing focus on ESG issues for all our stakeholders
and a series of employee insights which provided us with greater
insight into the areas that matter to our teams.
Our values and culture
Weir has always been a values-led business. Formulated in light of
our purpose and designed to help deliver our strategy, our values are
the guiding principles that apply across the Group and help define the
kind of business we are. Our values are:
How the Board assesses and monitors culture
The Board is ultimately responsible for ensuring that Weir’s
culture is aligned with the Group’s purpose, values and strategy.
The Board uses a range of different methods to assess and monitor
culture, including:
• Thinking safety first
• Delighting your customer
• Doing the right thing
• Aiming high
• Respecting each other
Our values are supplemented by our culture statement. Our culture
statement originated from insights generated through extensive
employee research and is used as a touchpoint when both Board and
senior management review behaviours and performance to confirm
alignment between actual and desired culture:
• We care for, challenge and encourage each other
• We always seek to improve and innovate
• We speak up and take ownership for our shared successes
• We work together to enhance our global communities
• We are passionately, authentically ourselves
• We can’t wait
We seek opportunities to embed our values and culture statement
across our activities. For example, our people-related work streams –
including our leadership development framework, selection and
assessment criteria, performance management and development
approach, employee engagement priorities and employee value
proposition – are all explicitly aligned to the expectations set out in
our values and culture statement.
As well as the local implementation of We Are Weir across our sites,
we issue a Group-wide “weekly round-up” communication that
features a wide range of global and local achievements and other
best practice highlights designed to share successes and bring to life
the individual stories that collectively make us who we are.
• Our Balanced Scorecard, which is considered by the Board as a
standing item at every meeting, contains a wide range of cultural
metrics and indicators including our safety total incident rate, our
gender diversity at all job role bands of our organisation and our
voluntary attrition rate.
• Our Group-wide Employee Engagement survey is undertaken
annually (see further details on page 47) using a third party
engagement survey provider. The Board utilises both the
qualitative and quantitative data to review engagement trends and
gain insights into the key drivers with the highest direct
correlations to loyalty and engagement, two of our key cultural
indicators, which in turn inform strategic discussions on people-
related matters. This year, AI personas were programmed to
synthesise direct employee feedback based on key segments
(such as gender, job family group and location) to highlight
intersectional trends across the employee experience at Weir.
More information on the actions we have taken based on our
culture statement, and the associated outcomes, are set out on
the following page.
• The Board also receives an annual employee insights report in
which our Group Head of Engagement accumulates the findings
from our wide range of employee voice channels across the year.
The insights are specifically crafted to help shape director decision-
making and inform focus areas for the year ahead, including the
employee engagement programme led by our designated Non-
Executive Director Dame Nicola Brewer (see more on page 82).
• Our Board also values its direct interactions with employees,
whether as part of site visits, Tell the Board sessions, attendance
at affinity group events, town halls or our annual senior leadership
conference. These exchanges offer Board members the
opportunity both to observe our culture in action, and to actively
reinforce and promote our culture across the Group.
The Weir Group PLC Annual Report and Financial Statements 2023
81
Strategic Report
Governance
Financial Statements
Additional Information
Our culture and approach to employee engagement
continued
Colleagues and Board members at a 'Tell the Board' session in Vancouver,
Canada
Barbara Jeremiah, Dame Nicola Brewer and Ben Magara speak with
colleagues on a visit to Perth, Australia in June 2023
Cultural actions and outcomes during 2023
Aspects of our culture statement
Our actions
We care for, challenge and
encourage each other
We are passionately,
authentically ourselves
Our ESCO Sudbury site has recently welcomed a number of culturally
and ethnically diverse new employees to fulfil skilled worker requirements.
To ensure we build a culture of inclusion and belonging where everyone
can succeed, our local teams have undertaken a range of activities
including teaching programmes (such as English as a second language),
additional translations on key resources and various awareness-raising
celebratory events.
Associated outcomes
The ESCO Sudbury equality
driver in our September 2023
employee engagement survey
showed a 0.5 increase since
the previous survey in
January 2023.
We always seek to improve
and innovate
We speak up and take
ownership for our
shared success
Our Minerals team in the APAC region have increased focus on individual
development plans and training in the past few years, with a frontline leader
development programme originally developed in Australia now ready to
launch across the region. More localised training and development
programmes at all levels, from apprenticeships through to senior leadership,
are now available.
The Minerals APAC growth
driver in our employee
engagement survey increased
by 0.3 since January 2023, and
by 1.4 since January 2019.
Our approach to employee engagement
We have in place a broad range of employee voice channels which
provide an array of opportunities for employees to share their views
and for the Board to listen and take action based on that feedback.
For the purposes of the UK Corporate Governance Code, we have a
designated Non-Executive Director responsible for employee
engagement. We have used this method of engagement for nearly
six years, and continue to consider it the most effective and
appropriate method on the basis that:
• it allows our designated Non-Executive Director to work with our
Group Head of Engagement to tailor a multi-year programme of
employee engagement events and initiatives;
• it ensures all Board members are regularly updated on workforce
engagement matters, while allowing our designated Non-
Executive Director to develop specific knowledge of our employee-
related opportunities and challenges over time; and
• it provides unity and consistency of approach to employee
engagement across our complex and geographically diverse Group
structure.
Following the departure of Mary Jo Jacobi in April 2023, Dame Nicola
Brewer took on the role of Non-Executive Director responsible for
employee engagement. The Nomination Committee recommended
Nicola for this role on the basis that her long career in the diplomatic
service have provided her with strong people skills combined with a
multicultural mindset.
As announced on 19 December 2023, in light of her appointment as
Senior Independent Director, Dame Nicola will be replaced in this
role by Ben Magara with effect from the conclusion of the
Company's AGM in April 2024. The Nomination Committee
recommended Ben for this role on the basis of his global experience
of working with and leading mining teams around the world, as well
as his strong commitment to our ID&E agenda.
Employee engagement activities during 2023
Led by our designated Non-Executive Director, our Board
members undertake various different types of direct employee
engagement activities to enhance their understanding of the
employee experience at Weir and inform Board-level decision-
making. This year, this included:
•
'Tell the Board' discussions involving groups of 12-15
employees and up to four Board members. Overarching topics
are suggested in advance based on employee survey feedback
from the relevant site as well as strategic priorities, but employees
and Board members are free to raise any matters they wish for
discussion. The most common topics discussed included safety,
wellbeing (including mental health), ID&E and technology/
sustainability. We held four Tell the Board sessions in 2023 (one
virtually and one in each of Canada, Australia and the Netherlands).
Given the Board’s continued focus on talent development and
succession planning, as well as the positive feedback from our Tell
the Board sessions, in 2024 we intend to run a number of smaller
sessions for participants specifically in our talent pipeline. These
sessions will help the Board to understand in more detail our
recruitment and retention drivers across the Group, as well as
allowing employees the chance to provide feedback to the Board.
• Affinity group engagement during site visits, undertaken
either by individual directors or by several Board members.
Often these interactions take the form of a panel/town hall event,
with a focus on enabling affinity group members and allies to share
their views with the Board and to ask questions. Panel questions
are usually pre-planned by the relevant affinity group chairs, with
input from our Group Head of Engagement, with the option for
employees to submit questions in advance if desired. Following a
structured discussion, the Q&A is open to the entire floor on any
topic. Dame Nicola has participated in three sessions with the
Global Weir Women’s Network across the year, joined in Australia
by Barbara Jeremiah and Tracey Kerr in Australia in June.
The Weir Group PLC Annual Report and Financial Statements 2023
82
Strategic Report
Governance
Financial Statements
Additional Information
Our culture and approach to employee engagement
continued
Global
employee
engagement
survey
01
Other
sources of
insight
Board
engagement
08
02
Zero Harm
Behaviours
gap analyses
07
03
Employee
focus
groups
Employee Voice
2023
06
04
Global
communications
channels
Employee
committees
and internal
networks
05
Employee
social
sentiment
The response to the mentoring programme during 2023 was very
positive from mentors and mentees alike, and indicated that
many of the objectives set out above had been met. Group
Executive members shared their experiences and learnings
informally as part of Board discussions.
Given the limited scale of the initial pilot, the Board has continued
to receive similar direct feedback about the desire for mentoring
in its direct engagement with employees this year. On this basis,
the Board has endorsed the expansion of the scheme over 2024
to encompass additional participants so that insights can be
shared across a wider cross-section of Group leadership.
• Town halls or other large employee gatherings at a single site.
Sessions usually commence with a verbal business update from
the Chief Executive Officer, and introductory remarks from the
Chair. A straightforward “hands up” approach is then taken to
questions from the floor, with as many employee participants as
possible taking part. A town hall formed part of the Board's
activities in its visit to the Netherlands in October.
• Site visits and other “walk the floor” activities, conducted
either individually, in small groups or as a full Board. Board
members enjoy the opportunity to engage with employees “on the
job” and observe Weir’s culture in action. Directors are able to
understand the key messages and priorities at the local site, and
employees are able to ask questions and receive feedback in real
time. Both Tracey and Dame Nicola undertook individual site visits
during the year.
•
Informal networking between the Board and employees. The
Board seeks to integrate networking events into as many of its
engagements as possible, including this year as part of our Senior
Leadership Conference in Canada and over BBQ lunches during
Board visits to Australia and the Netherlands. Networking sessions
are typically held over refreshments to allow Board members and
employees to interact more informally, with no particular structure
or topics pre-set for consideration.
• Access to employee communication channels. All Board
members have access to communications channels such as Viva
Engage (previously Yammer) and attend various events online. In
June this year, Tracey attended our LGBTQ+ allyship event online
which was run jointly by the Global Weir Women’s Network and
Weir Pride Alliance.
Direct engagement is supplemented by other periodic reviews,
reports and updates obtained through other employee voice
channels, which are provided to the Board at regular intervals,
primarily through reporting from our Group Head of Engagement.
Responding to employee feedback
over time: Reverse mentoring
programme
Over the past few years, Tell The Board sessions have revealed
a significant appetite for mentoring programmes, as well as
a desire to ensure that senior management truly understand
the inclusion, diversity and equity-related challenges within
our workforce.
As a result of this feedback, in 2022 we launched our first formal
reverse mentoring pilot, which inverts the traditional mentoring
approach to one that places the more senior person as the
primary learner. The programme consisted of virtual workshops,
monthly mentoring and supervision sessions and a post-
completion review. Participating mentees included members of
our Group Executive, including both our Chief Executive Officer
and previous Chief Financial Officer. By implementing reverse
mentoring, we hoped to:
• create an additional channel of listening and feedback to build
genuine awareness at a senior level of employees
representing a number of different dimensions of diversity;
• support those in our underrepresented groups to grow their
network across the business; and
• help both the mentee and mentor gain new perspectives into
our We Are Weir culture, values and strategy, as well as
building new skills like listening, coaching and curiosity.
The Weir Group PLC Annual Report and Financial Statements 2023
83
Strategic Report
Governance
Financial Statements
Additional Information
Shareholder and investor engagement
Overview
The Board recognises that the continued success of the Group
depends on establishing, developing and maintaining strong
relationships with all our shareholders. The Group has a dedicated
investor relations team that runs an annual global programme of
engagement events across the year, including formal presentations
and events, investor roadshows and conferences as well as
individual investor meetings.
In 2023, we held over 280 investor meetings, covering approximately
50% of our shareholder base and a number of prospective investors.
Meetings took place with investors in the UK, North America and
Europe and covered a wide range of topics including strategy,
financial performance, our Performance Excellence transformation
programme, sustainability and remuneration-related matters.
Additionally, a number of investors also attended our Spotlight
Capital Markets Event in December where we provided an update on
our growth and Performance Excellence opportunities.
Throughout the year, engagement was led primarily by the Chair
and executive directors, with other directors and members of the
Group Executive participating in discussions where appropriate –
for example:
• both Sean Fitzgerald and Andrew Neilson, our Divisional
Presidents, participated in our full-year results investor roadshow
in March 2023, and led sections of our Spotlight Capital Markets
Event to provide shareholders with a view of growth and
Performance Excellence opportunities for their respective
divisions; and
• as part of the transition of the Remuneration Committee Chair role,
both Clare Chapman and Penny Freer worked together to consult
with various major shareholders during Q4 2023 on the
Committee’s proposed approach to windfall gains in the
coming year.
All those directors who participate in shareholder and investor
engagement provide regular updates to the Board on the matters
arising from those discussions. The Board also receives periodic
feedback from the Head of Investor Relations and the Group’s
brokers on share price performance and shareholder expectations.
The Board takes the results of this engagement into account as part
of determining the Group’s strategy and making decisions on key
issues – for further information see pages 18 to 19 and 80.
Annual general meeting
Our annual general meeting is an important annual event, offering a
constructive opportunity to engage with shareholders in person, hear
their views and answer their questions about the Group and its
business. Last year’s annual general meeting was held on Thursday
27 April 2023 and all items proposed were passed on a poll with well
in excess of the requisite majority for each resolution.
This year’s annual general meeting will be held on Thursday 25 April
2024 at the Company’s head office located at 10th Floor, 1 West
Regent Street, Glasgow G2 1RW. As in previous years, we continue
to provide shareholders with the opportunity to pose their questions
to the Board in advance if desired, using a dedicated email address:
weirAGM@mail.weir. Further details are included in the Notice of
Annual General Meeting and associated proxy form.
Shareholder communications
Our website provides shareholders with regular updates on a range
of topics relevant to Weir. In addition to the information provided in
our annual report and periodic public announcements, there is a
dedicated investor section on our website that includes our financial
calendar, regulatory newsfeed, information on our leadership and
governance framework and copies of our recent publications and
reports. Shareholders can access this portion of our website at
global.weir/investors/.
The Weir Group PLC Annual Report and Financial Statements 2023
84
Shareholder engagement in action
Investor Perception Study
To supplement the Board and senior management’s direct
shareholder engagement activities, the Group commissioned
Rothschild & Co to undertake an investor perception study to
understand in greater detail key institutional investors’ views of
Weir. Over May and June 2023, 14 different institutional
investors participated in the study, representing 36% of the
Group’s total issued share capital at that time, as well as five
sell-side analysts. The pool provided a strong-cross section of
views, with discussions structured around a set of 35 open-
ended questions that had been pre-agreed with Weir to harness
the most useful insights for the Board.
Results showed that significant progress had been made year-
on-year, with positive perceptions around Weir’s transition to a
mining pure-play, as well as the Group’s growth potential,
improving financial position and strong ESG proposition. The
study also provided a number of useful takeaways for
consideration around promoting the Group’s core strengths,
taking opportunities to communicate the Group’s ESG
credentials with increasing impact and executing consistently
against the Group’s strategic objectives. These takeaways have
since been reflected in the Group’s approach to its strategic
priorities and messaging in subsequent investor engagement
sessions during H2 2023.
Shareholder event calendar 2023
Date
Events
March/April 2023
• Announcement of full-year results
• Post-full-year results investor meetings
• In-person investor roadshows – London
and North America
• Bank of America Merrill Lynch and
Berenberg investor conferences –
London
• Pre-AGM meetings with shareholders
led by Chair
• Q1 interim management statement
• Annual general meeting
May/June 2023
• Shareholder site visit: Venlo showcase
• In-person investor roadshows – Europe
and North America
• UBS and JP Morgan investor
conference – London
• Investor perceptions study
July/August 2023
• Announcement of half-year results
September/October
2023
November/December
2023
• Post-half-year results investor meetings
• In-person investor roadshow – London
• Morgan Stanley investor conference –
London
• In-person investor roadshow – London,
Europe, North America
• Q3 interim management statement
• Spotlight Capital Markets Event –
Growth and Performance Excellence
• In-person investor roadshow – London
• Post-Capital Markets Event Investor
meetings
Strategic Report
Governance
Financial Statements
Additional Information
Wider stakeholder engagement by the Board
Overview
The Board recognises the importance of a wide range of stakeholders to the Group and stakeholder interests are central to the We Are Weir
strategic framework. In order to identify our stakeholders, we triangulate our purpose, strategy and business model, as well as considering the
principal risks and uncertainties affecting the Group. You can read more about the stakeholder groups we have identified, the issues that matter
most to them, the actions we have taken to engage with them at a Group level and the associated outcomes on pages 26-28.
An overview of how the Board engaged with wider stakeholders and maintained its understanding of their interests during the year is set
out below.
Suppliers
Suppliers represent some of our most strategic relationships,
where all parties value the opportunity to collaborate and
innovate for the benefit of the broader value chain.
The Board receives updates on supplier dynamics as part of the
divisional deep-dive sessions from each of Minerals and ESCO during
the year. Direct engagement with suppliers is primarily led by local
management teams, with support from the Chief Executive Officer
and Group Executive team where appropriate.
The Board is also aware that we source raw materials, components
and services across the globe, including in countries and industries
where the risk of modern slavery may exist. The Board is fully
committed to a zero tolerance approach to any form of slavery and
therefore takes responsibility for approving the Group’s Human
Rights Policy. The Board receives periodic updates on human rights
considerations relevant to our supply chain through the Corporate
Services Report presented at each Board meeting. The Board
considered and approved the Group’s most recent Modern Slavery
Statement in February 2023, which you can read on our website at
https://www.global.weir/siteassets/pdfs/weir-group-modern-slavery-
statement-2023.pdf.
Customers
Customer proximity allows us to meet our customers’
needs better, and to create higher barriers to entry for
our competitors.
The Board receives customer insights at every scheduled meeting as
part of the Chief Executive Officer’s Business Report, which covers
topics such as customer behaviour, localised and macro-economic
trends, and expected and investment activity by customers
impacting the Group’s pipeline. Our Balanced Scorecard also includes
five customer-focused quantifiable metrics, covering both strategic
and ESG-related measures.
During the year the Board also received a commercial deep-dive
briefing from each of the Divisional Presidents on specific customer-
related factors relevant to our Minerals and ESCO businesses. Both
sessions highlighted the increasing importance of sustainability-
related themes to our customers and you can read more about our
continued work on our product and service offering to reflect these
insights on pages 48 to 49.
As well as receiving briefings from senior management, our Board
seek direct engagement with customers wherever possible. In June
2023, Barbara, Ben, Tracey, Nicola and Stephen all visited the
Kalgoorlie Consolidated Gold Mine in Australia, to hear more from
Northern Star Resources about their open pit and underground
operations and how the Weir installed base on site supports these
activities. Jon also conducted a number of site visits to customers
during the year to see Minerals, ESCO and Motion Metrics solutions
in action.
The Weir Group PLC Annual Report and Financial Statements 2023
85
Find out more
Read more about our engagement
with our suppliers
See page 27
All insights from these visits are shared with the Board on a timely
basis to inform Board discussions and shape decision-making.
Find out more
Read more about our engagement
with our customers
See page 27
Strategic Report
Governance
Financial Statements
Additional Information
Wider stakeholder engagement by the Board
Communities & environment
Sustainability is central to our strategy. This means that our
impact on the communities and environments in which we
work, and their impact on us, is core to our stakeholder
engagement process.
Our communities care deeply about the safety and sustainability of
our operations, and Weir seeks to be a good neighbour that operates
safely and ethically. Reinforcing our commitment to Zero Harm
Behaviours, safety is front and centre within all Board discussions
and is always covered as the priority item within the Chief Executive
Officer’s Business Report, as well as featuring in our Balanced
Scorecard. In line with our value of “Thinking Safety First”, almost all
divisional or functional reports presented to the Board commence
with a “safety moment” or “safety share” that underlines the latest
safety-related insights relevant to that area of our business.
As part of its programme of regular visits to Weir sites across the
world, the Board receives updates from local teams on ongoing
community engagement. For example, in Australia last year, the
Board was informed about initiatives Weir is involved in and gained a
greater understanding of associated community priorities, including
MATES in Mining (a suicide prevention charity), fundraising and
sporting events for mental health and children’s charities, as well as
the challenges presented by bushfires and support to Mangoola
Rural Fire Brigade.
Our Balanced Scorecard contains a range of environment-related
quantifiable metrics, including reducing our own carbon emissions
against a 2019 baseline as well as progressing research and
development priority projects aligned with our goals to move less
rock, use less energy, use water wisely, create less waste and
boost with digital. In addition to these regular updates, the Board
also reviewed the Group’s sustainability strategy in detail at its
July meeting.
Governments & NGOs
The Group has a global footprint and is therefore impacted by public
policy, as well as developments in legal frameworks, in the countries
in which it operates. These issues are escalated to the Board as and
when appropriate, typically forming part of divisional updates or the
Corporate Services Report that is presented at every Board meeting.
Political and social risk remains one of our principal risks (see page 64
for more detail) and the Board discusses geopolitical and
governmental considerations as part of its twice-yearly discussion of
the Group’s risk dashboard. From a UK perspective, changes in the
legal and regulatory environment relevant to a listed company also
form part of the Board’s annual training schedule.
The Group also seeks to work with non-governmental organisations,
often with a view to improving STEM education opportunities around
the world. These initiatives are typically organised on a local or
regional level to maximise the impact and relevance of our work with
NGOs for local communities. On its visit in June to Australia, the
Board was briefed on the local team's sponsorship of Warman
Design and Build, an engineering competition run in partnership with
Engineers Australia - in 2022, 800 students across 15 different
universities participated. The Board also heard about the Group's
support for Fitted For Work, a local organisation helping
disadvantaged young women become work ready, as well as Weir
employees' participation as mentors in the Women in Mining and
Resources Queensland mentoring programme during H2 2023.
The Weir Group PLC Annual Report and Financial Statements 2023
86
The session involved reviewing progress against the Sustainability
Roadmap originally set in 2019 and receiving an update on the double
materiality assessment conducted during the year. This then allowed
the Board to confirm the priority next steps for management to take
in this area.
Find out more
Read more about our engagement
with local communities and environment
See page 28
Discussions on the impact of local work with NGOs - both for
participants and Weir team members - allowed the Board to consider
further the opportunities and challenges associated with increasing
female participation in the sector.
Find out more
Read more about our engagement
with Governments and NGOs
See page 28
Strategic Report
Governance
Financial Statements
Additional Information
Division of responsibilities
Board composition
As at the date of this report, the Board comprises: one Non-
Executive Chair; one Executive Director; and eight Non-Executive
Directors. As announced on 5 December 2023, Brian Puffer will join
the Board as Executive Director and Chief Financial Officer with
effect from 1 March 2024.
We consider the Board includes an appropriate combination of
Executive and independent Non-Executive Directors, and that the
Board is of sufficient size to ensure diversity and a combination of
skills, experience and knowledge (see further information on page
92), while still being small enough to foster high quality debate.
Biographies of each Director and the specific reasons why their
contribution is, and continues to be, important to the Company’s
long-term sustainable success can be found on pages 73 to 76.
Roles and responsibilities
The roles of the Chair, each of the Executive Directors, the Senior
Independent Director, and the other Non-Executive Directors are
summarised below. Full details of the responsibilities of the Chair,
the Chief Executive Officer and Senior Independent Director are
set out in writing and available on the Company’s website at:
global.weir/globalassets/investors/role-of-the-board/weir-group---
division-of-responsibilities---2022.pdf. In accordance with the
Corporate Governance Code, the roles of Chair and Chief Executive
are held separately.
x
Non-Executive Director roles
e
c
Chair
• Leading the Board and ensuring its
Senior Independent Director
• Providing a sounding board for
overall effectiveness
the Chair
• Promoting constructive debate,
decision-making and Board relations
• Setting the Board agenda and ensuring
the effective contribution of all Non-
Executive Directors
• Overseeing the Board effectiveness
• Serving as an intermediary for other
Directors and shareholders where
necessary
• Leading (at least annual) discussions
amongst Non-Executive Directors on
the Chair’s performance
review and acting on its results
• Leading succession planning for
• Ensuring appropriate induction and
development programmes
• Ensuring effective engagement with
shareholders and stakeholders
Executive Director roles
Chief Executive Officer
• Proposing and, once agreed by the
Board, delivering Group strategy
• Communicating expectations on culture
across the Group
• Ensuring operational policies and
practices drive appropriate behaviour
• Leading management-level
stakeholder engagement
• Leading the Group Executive team,
including associated talent
development and succession planning
• Managing overall
business performance
Chair role
Chief Financial Officer
• Assisting with proposing and, once
agreed by the Board, delivering
Group strategy
• Ensuring effective management
of Group capital structure and
financing needs
• Providing accurate, timely and clear
information to the Board on the
Group’s financial performance
The Weir Group PLC Annual Report and Financial Statements 2023
87
Non-Executive Directors
• Providing constructive challenge,
strategic guidance and specialist advice
• Holding to account the performance
of management and individual
Executive Directors
• Developing and maintaining a good
understanding of the business and
its relationships with significant
stakeholders
Chief Legal Officer and
Company Secretary
• Supporting the Board in ensuring that
it has the policies, processes,
information, time and resources it
needs in order to function effectively
and efficiently
• Advising the Board on all
governance matters
• Facilitating induction, arranging Board
training and assisting with professional
development as required
• Ensuring directors have access to
independent professional advice at
the Company’s expense where they
judge it necessary to discharge
their responsibilities as directors
of the Company
Strategic Report
Strategic Report
Governance
Governance
Financial Statements
Financial Statements
Additional Information
Additional Information
Division of responsibilities
Division of responsibilities
continued
continued
Board committees
Board committees
The written terms of reference of each of the Nomination
The written terms of reference of each of the Nomination
Committee, Audit Committee and Remuneration Committee are
Committee, Audit Committee and Remuneration Committee are
available on the Company’s website at: global.weir/investors/
available on the Company’s website at: global.weir/investors/
corporate-governance/board-committees/. Terms of reference for the
corporate-governance/board-committees/. Terms of reference for the
Sustainability and Technology Committee will be made available on
Sustainability and Technology Committee will be made available on
our website in due course. Further details on the work of each of the
our website in due course. Further details on the work of each of the
Nomination, Audit and Remuneration Committees during 2023 is
Nomination, Audit and Remuneration Committees during 2023 is
included later in this Corporate Governance Report.
included later in this Corporate Governance Report.
Board independence
Board independence
We consider all of our Non-Executive Directors to be independent
We consider all of our Non-Executive Directors to be independent
for the purposes of the Corporate Governance Code. Our Chair,
for the purposes of the Corporate Governance Code. Our Chair,
Barbara Jeremiah, was also considered independent on appointment.
Barbara Jeremiah, was also considered independent on appointment.
As a result, more than half the Board (excluding the Chair) are
As a result, more than half the Board (excluding the Chair) are
independent Non-Executive Directors and this will remain the
independent Non-Executive Directors and this will remain the
case following Brian Puffer’s formal appointment to the Board
case following Brian Puffer’s formal appointment to the Board
on 1 March 2024.
on 1 March 2024.
Director commitments and significant appointments
Director commitments and significant appointments
The letters of appointment for our Non-Executive Directors set out
The letters of appointment for our Non-Executive Directors set out
the time commitment expected of them. All new Directors are
the time commitment expected of them. All new Directors are
required to seek approval from the Board before accepting any
required to seek approval from the Board before accepting any
additional roles.
additional roles.
When considering whether to approve new external appointments
When considering whether to approve new external appointments
for existing Directors, the Board takes into account a range of factors
for existing Directors, the Board takes into account a range of factors
including: the Director’s pre-existing commitments outside the
including: the Director’s pre-existing commitments outside the
Group; the Director’s attendance at Board and Committee meetings;
Group; the Director’s attendance at Board and Committee meetings;
the expected time requirement of the proposed position, factoring in
the expected time requirement of the proposed position, factoring in
the nature of the role and associated responsibilities; and the
the nature of the role and associated responsibilities; and the
benefits that the external appointment may bring to both the
benefits that the external appointment may bring to both the
individual Director and the Board as a whole, by virtue of wider
individual Director and the Board as a whole, by virtue of wider
commercial knowledge, expanded Board-level experience and
commercial knowledge, expanded Board-level experience and
a broader perspective from working in a different environment.
a broader perspective from working in a different environment.
The Company’s conflicts of interest procedure described below
The Company’s conflicts of interest procedure described below
is also followed.
is also followed.
During 2023, the Board approved the appointment of Barbara
During 2023, the Board approved the appointment of Barbara
Jeremiah as Non-Executive Director of Johnson Matthey Plc. The
Jeremiah as Non-Executive Director of Johnson Matthey Plc. The
Board considered this appointment to be significant for the purposes
Board considered this appointment to be significant for the purposes
of the Corporate Governance Code – in particular given Barbara
of the Corporate Governance Code – in particular given Barbara
would be serving as Senior Independent Director – but concluded
would be serving as Senior Independent Director – but concluded
that the appointment would not impair Barbara’s ability to serve as
that the appointment would not impair Barbara’s ability to serve as
the Company’s Chair in view of the anticipated time commitment.
the Company’s Chair in view of the anticipated time commitment.
The Board also considered carefully Penny Freer’s pre-existing
The Board also considered carefully Penny Freer’s pre-existing
commitments as part of her appointment process (described in more
commitments as part of her appointment process (described in more
detail on page 93). The Board agreed that although Penny held the
detail on page 93). The Board agreed that although Penny held the
role of Chair of three other companies at the time of her
role of Chair of three other companies at the time of her
appointment, her appointment in October 2023 was appropriate
appointment, her appointment in October 2023 was appropriate
given the importance of the Board’s strategy discussions that
given the importance of the Board’s strategy discussions that
month and the fact that she was due to step down from her role
month and the fact that she was due to step down from her role
as Chair of Crown Place VCT Plc within a month. The Board further
as Chair of Crown Place VCT Plc within a month. The Board further
noted that Penny would not be taking up the role of Remuneration
noted that Penny would not be taking up the role of Remuneration
Committee Chair at the Company until the end of the year. The
Committee Chair at the Company until the end of the year. The
Board remains fully satisfied of Penny’s ability to fulfil her
Board remains fully satisfied of Penny’s ability to fulfil her
commitments to the Company.
commitments to the Company.
Conflicts of interest
Conflicts of interest
The Company has a formal procedure in place to manage the
The Company has a formal procedure in place to manage the
disclosure, consideration and, if thought fit, authorisation of potential
disclosure, consideration and, if thought fit, authorisation of potential
conflicts of interest. Each Director is aware of the requirement to
conflicts of interest. Each Director is aware of the requirement to
notify the Board, via the Company Secretary, as soon as they
notify the Board, via the Company Secretary, as soon as they
become aware of any potential future conflict or any material change
become aware of any potential future conflict or any material change
to a pre-existing authorisation. Upon receipt of any such notification,
to a pre-existing authorisation. Upon receipt of any such notification,
the Board considers each conflict situation separately on its particular
the Board considers each conflict situation separately on its particular
facts, in conjunction with the rest of the potentially conflicted
facts, in conjunction with the rest of the potentially conflicted
Director’s duties under the Companies Act 2006. The Board keeps
Director’s duties under the Companies Act 2006. The Board keeps
records of any decisions taken, authorisations granted and the scope
records of any decisions taken, authorisations granted and the scope
of approvals given, and regularly reviews conflict authorisations
of approvals given, and regularly reviews conflict authorisations
previously granted.
previously granted.
The Weir Group PLC Annual Report and Financial Statements 2023
The Weir Group PLC Annual Report and Financial Statements 2023
88
88
None of the Non-Executive Directors has any material business or
None of the Non-Executive Directors has any material business or
other relationship with the Company or its management. Sir Jim
other relationship with the Company or its management. Sir Jim
McDonald is the Principal and Vice Chancellor of the University of
McDonald is the Principal and Vice Chancellor of the University of
Strathclyde, however he has no direct involvement on a day-to-day
Strathclyde, however he has no direct involvement on a day-to-day
basis in relation to the Weir Advance Research Centre (WARC) which
basis in relation to the Weir Advance Research Centre (WARC) which
is operated by the Company in conjunction with the University of
is operated by the Company in conjunction with the University of
Strathclyde. Nevertheless, Sir Jim has agreed that he will offer to
Strathclyde. Nevertheless, Sir Jim has agreed that he will offer to
recuse himself from any discussion concerning the relationship
recuse himself from any discussion concerning the relationship
between the Group and the University of Strathclyde, whether in
between the Group and the University of Strathclyde, whether in
relation to WARC or otherwise. As announced on 19 December
relation to WARC or otherwise. As announced on 19 December
2023, Sir Jim will be stepping down from the Board with effect from
2023, Sir Jim will be stepping down from the Board with effect from
the conclusion of the AGM on 25 April 2024.
the conclusion of the AGM on 25 April 2024.
Directors' information and advice
Directors' information and advice
The Company Secretary manages the provision of accurate, timely
The Company Secretary manages the provision of accurate, timely
and clear information to the Board at appropriate intervals in
and clear information to the Board at appropriate intervals in
consultation with the Chair and the Chief Executive Officer, and
consultation with the Chair and the Chief Executive Officer, and
assists with ensuring that the Board has the policies, processes, time
assists with ensuring that the Board has the policies, processes, time
and resources it needs in order to function effectively. In addition to
and resources it needs in order to function effectively. In addition to
formal meetings, the Chair, Chief Executive Officer and Company
formal meetings, the Chair, Chief Executive Officer and Company
Secretary all maintain regular contact with Directors and work
Secretary all maintain regular contact with Directors and work
together to ensure that the Board and Committee governance
together to ensure that the Board and Committee governance
processes remain fit for purpose.
processes remain fit for purpose.
All Directors have access to the Company Secretary, who is
All Directors have access to the Company Secretary, who is
responsible for advising the Board on all governance matters.
responsible for advising the Board on all governance matters.
Additionally, all Directors have access to independent professional
Additionally, all Directors have access to independent professional
advice at the Company’s expense if they judge it necessary to
advice at the Company’s expense if they judge it necessary to
discharge their responsibilities as Directors.
discharge their responsibilities as Directors.
Induction
Induction
All Directors receive a full, formal and tailored induction programme
All Directors receive a full, formal and tailored induction programme
upon joining the Board, with the programme of sessions
upon joining the Board, with the programme of sessions
personalised by the Company Secretary to reflect the incoming
personalised by the Company Secretary to reflect the incoming
Director’s skills, experience, knowledge and role within the Board
Director’s skills, experience, knowledge and role within the Board
and its Committees.
and its Committees.
Penny commenced her induction following her appointment in
Penny commenced her induction following her appointment in
October 2023 and will complete the remaining sessions over the
October 2023 and will complete the remaining sessions over the
course of the first half of 2024. Sessions were conducted through
course of the first half of 2024. Sessions were conducted through
both virtual and in-person briefings (including a site visit to Venlo) to
both virtual and in-person briefings (including a site visit to Venlo) to
allow for efficient delivery of a programme covering topics including
allow for efficient delivery of a programme covering topics including
safety, Group strategy, sustainability, our approach to stakeholder
safety, Group strategy, sustainability, our approach to stakeholder
engagement divisional deep-dives, financial and treasury matters,
engagement divisional deep-dives, financial and treasury matters,
risk, corporate governance and directors’ duties.
risk, corporate governance and directors’ duties.
In preparation for her role as Chair of the Remuneration Committee,
In preparation for her role as Chair of the Remuneration Committee,
Penny also received a specific focus on executive remuneration
Penny also received a specific focus on executive remuneration
matters including meetings with the Committee’s UK remuneration
matters including meetings with the Committee’s UK remuneration
consultants, Deloitte.
consultants, Deloitte.
Inductions for each of Brian and Andy will take place over the course
Inductions for each of Brian and Andy will take place over the course
of 2024 and will involve a similarly tailored approach, further details
of 2024 and will involve a similarly tailored approach, further details
of which will be provided in next year's annual report.
of which will be provided in next year's annual report.
Ongoing training and development
Ongoing training and development
Under the direction of the Chair, the Company Secretary is
Under the direction of the Chair, the Company Secretary is
responsible for arranging Board training throughout the year and
responsible for arranging Board training throughout the year and
assisting with professional development as required. Training is built
assisting with professional development as required. Training is built
into our annual Board agenda at regular intervals, and is facilitated by
into our annual Board agenda at regular intervals, and is facilitated by
both internal specialists and external advisors. The menu of topics is
both internal specialists and external advisors. The menu of topics is
carefully designed to develop and update our Directors’ knowledge
carefully designed to develop and update our Directors’ knowledge
and capabilities, with a view to enhancing Director effectiveness on
and capabilities, with a view to enhancing Director effectiveness on
the Board and its committees.
the Board and its committees.
During the year, the Board received briefings on a variety of topics,
During the year, the Board received briefings on a variety of topics,
including: key legal and regulatory developments, including recent
including: key legal and regulatory developments, including recent
enforcement actions; updates on the corporate and litigation
enforcement actions; updates on the corporate and litigation
landscape; shareholder activism; and the UK takeover regime.
landscape; shareholder activism; and the UK takeover regime.
Strategic Report
Governance
Financial Statements
Additional Information
Composition, succession and effectiveness
Board composition and succession planning
Details of the composition of the Board are set out on page 92.
There is a formal, rigorous and transparent procedure for new
appointments to the Board, details of which are set out in the
Nomination Committee Report on pages 93 to 94. The Nomination
Committee Report also provides details on the approval of the
appointments of Penny Freer and Brian Puffer, as well as details
of Board and senior management succession plans and diversity-
related disclosures.
Board performance review
The Board is fully committed to conducting annual reviews in order
to continuously improve its performance and overall effectiveness.
During 2023, the Board has taken action in relation to a number of
the key recommendations arising from the review conducted in
2022, as described in more detail in the table below.
Key recommendations from 2022 review
Actions and outcomes during 2023
Expand the remit of the Nomination Committee by planning for
deeper dives on talent management, diversity and succession
planning at senior management level
Continue to assess whether and, if so, when Board Committees
on safety and sustainability matters should be formed
Evaluate employee engagement process to enable all Board
members to rotate and take part in initiatives in different parts of
the world, increase interactions with high potential employees
for succession reasons and keep the Board in touch with
Weir practice
Nomination Committee terms of reference amended in July 2023
to reflect expanded remit (see page 95)
Sustainability and Technology Committee established in
December 2023. Board to continue to have oversight of safety
via existing reporting channels
Various enhancements to the employee engagement process
throughout 2023 (see pages 81 to 83), with all directors as at the
date of this report having participated in at least two different
engagement activities in different countries during 2023
The headline findings of the 2023 Board performance review
were that:
• The Board has seen significant progress with its agenda during the
year, and substantial progress from the full external review
conducted two years ago. Board members had identified many
highlights during 2023 including alignment on strategy, work on
stock value, the overall approach to major agenda items and
valuable visits to the business. The Board has demonstrated
excellent teamwork on multiple occasions across the year.
• The Board’s composition is strongly rated with a blend of skills that
makes it well positioned for the future. There have been changes
in terms of composition during 2023, with more expected in 2024
as part of the Board’s natural maturation. (On this basis, it is not
expected that the findings of the review will directly impact Board
composition at this stage.)
• The Board has excellent oversight of and high engagement with
the Group as a whole, and there are high levels of confidence in
the Group’s overall culture. There are multiple lines of sight and
good data available to the Board, and Board visits and engagement
are well received within the business as a two-way process.
The recommendations arising for the Board for 2024 and beyond are:
• To consider carefully Board focus at each meeting and shape both
agenda and papers accordingly, including potentially allocating
more time to discuss longer-term (i.e. 5-10 year) questions around
strategy, technology and sustainability.
• To capitalise further on Non-Executive Directors’ specialist
knowledge and domain expertise, including taking opportunities for
Non-Executives to feed into external or industry events or
allocating individual Non-Executives to different areas of the
business to build deeper working relationships.
• To ensure the Board has time for informal relationship building
between Non-Executives and the Group Executive.
Board performance review in 2023
As in 2022, this year a light-touch external review was undertaken
with assistance from Lisa Thomas of Independent Board Evaluation
(IBE) following IBE’s work on our thorough external performance
review conducted in 2021. Full details of how IBE were originally
selected can be found in our 2021 Annual Report, available on our
website at global.weir/siteassets/pdfs/investors/weir-group-annual-
report-2021-website-version.pdf. Aside from assistance on prior
Board effectiveness reviews in 2021 and 2022, neither IBE nor Ms
Thomas has any other connection with the Group, any individual
Directors or the Company Secretary, nor do they provide any other
services to the Group. The sections of the report describing the
process followed and outcome of the review (including the
recommendations for the Board) have been agreed with IBE.
In 2023, the Board performance review process took the
following approach:
• Objectives and scope: This targeted review considered the
Board's composition and diversity, as well as how effectively
Directors contribute individually and work together to achieve
objectives. Given the light-touch nature of the review in 2023,
detailed matters concerning the role and functioning of the
Committees were not considered this year but will form part of the
comprehensive external review to be conducted in 2024.
• Process and views sought: IBE observed Board and Committee
meetings undertaken in Venlo in October 2023. IBE also
interviewed each of the Board members on a 1-to-1 basis at that
time, including former CFO John Heasley and former
Remuneration Committee Chair Clare Chapman. Each meeting
was framed using a short set agenda which had been agreed with
the Chair in advance. IBE also had access to all October Board
papers. In addition to interviews with Board members, IBE spoke
with all members of the Group Executive about their interactions
with the Board over the course of the year.
• Company involvement and oversight: The Chief Legal Officer
and Company Secretary was responsible for providing IBE with all
necessary access and support to conduct the light-touch review.
The Senior Independent Director was identified as IBE’s
independent escalation point if required.
The Weir Group PLC Annual Report and Financial Statements 2023
89
Strategic Report
Governance
Financial Statements
Additional Information
Risk management and internal controls
Our internal control framework has four key tiers:
4
Ethical and cultural environment
3
Assurance activities
2
Monitoring and oversight controls
1
Functional and front line controls
Tier 4: Ethical and cultural environment
We are committed to doing business at all times in an ethical and
transparent manner. This is supported by the Weir values, which are
the core behaviours we expect our people to live by in their working
lives. The Weir Code of Conduct also contributes to our culture,
providing a high benchmark by which we expect our business to be
conducted. You can read more about our culture on page 81.
Any examples of unethical behaviour are dealt with appropriately and
promptly. The Group has a combination of formal and informal
channels to raise concerns regarding unethical behaviour, including
the Weir Ethics Hotline, which enables any member of the workforce
to raise concerns in confidence and, if they wish, anonymously. The
Board reviews the operation of the Hotline on an annual basis, and is
provided with updates regarding the Hotline routinely through the
Corporate Services Report which is presented at every Board
meeting. The Group's Compliance function works closely with the
business to ensure that any matters raised via the Weir Ethics
Hotline are investigated in a fair and impartial manner consistent with
the Group Investigation Protocol, and the Board is notified of follow-
up actions taken where appropriate to do so.
The Responsible Business Practices section on page 58 provides
more details on the Group’s activities to promote ethical behaviour
and the Weir Ethics Hotline.
The Audit Committee, our internal audit function and our
external auditors
Details of the roles and responsibilities of the Audit Committee and
its members can be found in the Audit Committee Report on pages
98 to 108. Information on the role of the Group's internal audit
function, as well as that of the Company’s external auditors, is also
contained within the Audit Committee Report.
Risk management and internal controls
In accordance with the UK Corporate Governance Code and the
accompanying FRC's Guidance on Risk Management and Internal
Controls, the Group has an ongoing process for identifying,
evaluating and managing the significant risks through a
comprehensive internal control framework. This four-tier process has
been in place throughout 2023 and is described in more detail below.
The Board, in seeking to achieve the Group’s business objectives,
cannot offer an absolute guarantee that the application of a risk
management process will overcome, eliminate or mitigate all
significant risks. However, by further developing and operating an
annual and ongoing risk management process to identify, report
and manage significant risks, the Board seeks to provide a
reasonable assurance against material misstatement or loss. More
information on how the Group seeks to manage risk can be found
on pages 60 to 69.
The Audit Committee conducted a review of the effectiveness of the
Group’s systems of internal control and risk management during
2023 on behalf of the Board, as set out on page 99. The Group’s
internal control procedures described on page 101 of the Audit
Committee Report do not cover joint venture interests. We have
Board representation on each of our joint venture companies,
where separate, albeit similar, internal control frameworks have
been adopted.
Tier 1: Functional and front line controls
This includes a wide spectrum of controls common to many
organisations, including: standard operating procedures and policies;
a comprehensive financial planning and reporting system, including
quarterly forecasting; regular performance appraisals and training for
employees; restricted access to financial systems and data;
delegated authority matrices for the review and approval of key
transactions, arrangements and other corporate actions; protective
clothing and equipment to protect our people from harm; IT and data
and cyber security controls; business continuity planning; and
assessment procedures for potential new recruits.
Tier 2: Monitoring and oversight controls
There is a clearly defined organisational structure within which roles
and responsibilities are articulated. There are monitoring controls at
operating company, regional, Divisional and Group level, including
standard key performance indicators, with action plans drawn up,
implemented and monitored to address any underperforming areas.
A Compliance Scorecard self-assessment is completed and reported
by all operating companies twice per annum. The Scorecard
assesses compliance with Group policies and procedures, see page
101 for further details.
Financial monitoring includes comparing actual results with the
forecast and prior year position on a monthly and year-to-date basis.
Significant variances are highlighted to Directors on a timely basis,
allowing appropriate action to be taken.
Tier 3: Assurance activities
We obtain a wide range of both internal and external assurances to
provide comfort to management and the Board that our controls are
providing adequate protection from risk and are operating as we
would expect.
These sources of assurance were reviewed by the Board during the
year, and principally comprise external audit, internal audit, SHE
audits and IT audits. As described in the Audit Committee Report on
page 102 and in the Sustainability section of the strategic report on
page 58, we are also enhancing our internal capabilities around
assurance on ESG and non-financial reporting-related matters.
The various audit teams plan their activities on a risk basis, ensuring
resources are directed at the areas of greatest need. Issues and
recommendations to enhance controls are reported to management
to ensure timely action can be taken, with oversight provided from
the relevant governance committees, including the Audit Committee
and the Excellence Committees.
The Weir Group PLC Annual Report and Financial Statements 2023
90
Strategic Report
Governance
Financial Statements
Additional Information
Nomination Committee report
Dear shareholder,
I am pleased to present an
overview of the Nomination
Committee’s work during 2023.
It has been a busy year for the Committee as valued colleagues
departures and we welcomed new Board members.
Two of our Non-Executive Directors, Mary Jo Jacobi and Ebbie Haan,
left the Board in April 2023. John Heasley, our former Chief Financial
Officer, and Clare Chapman, our former Remuneration Committee
Chair, each stepped down from the Board in November and
December 2023 respectively. As announced on 19 December 2023,
Sir Jim McDonald will be stepping down at the conclusion of the
AGM in 2024 having served nine years with us. Finally, as announced
on 27 February 2024, Srinivasan Venkatakrishnan is not standing for
re-election to the Board. I am very grateful to each of Mary Jo, Ebbie,
John, Clare, Sir Jim and Venkat for their insightful and important
contributions to the Board and its Committees during their tenures,
and they all leave with our best wishes for their future endeavours.
In October 2023, we were pleased to welcome Penny Freer as a
new Non-Executive Director and Remuneration Committee Chair
with effect from 31 December 2023. We also welcomed Andy Agg
as another new Non-Executive Director on 27 February 2024.
Additionally, the Committee was heavily involved in the Group’s
search for a new Chief Financial Officer and we look forward to
welcoming Brian Puffer to the Board formally on 1 March 2024. You
can read more about our approach to appointments, as well as the
specific processes followed for the recruitment of Penny and Brian,
on pages 93 and 94.
In addition to considering Board and Committee composition,
including for the new Sustainability and Technology Committee, the
Nomination Committee has also spent considerable time this year
considering talent development and succession planning amongst
our Group Executive and their direct reports. You can read more
about our activities in this area on page 95.
As ever, the Nomination Committee remains dedicated to recruiting
globally recognised, industry-leading talent, so that our Weir
colleagues see great leaders – at both Board and senior management
level – who look and sound like them. In the various roles I have
been privileged to hold, including serving as Weir's Chair, I have seen
and embrace the value and power of visible role models.
You can read more about how we continue to meet all of the
measurable objectives set out in our Board Diversity Policy, as well
as the gender and ethnic diversity-related targets set out in the UK
Listing Rules on page 95. We continue to support both the FTSE
Women Leaders’ Review and the Parker Review and our associated
disclosures are set out on page 97.
If you wish to discuss any aspects of the Nomination Committee
report, or our activities more generally, with me then please join our
AGM on 25 April 2024 in Glasgow. You can share your question with
me in advance if you wish to do so via our dedicated email address:
weirAGM@mail.weir.
Barbara Jeremiah
Chair of the Nomination Committee
Role of the Committee
The Nomination Committee has responsibility for: considering
the size, structure and composition of the Board; reviewing
Director and senior management succession plans, and
overseeing the development of a diverse talent pipeline; and
making appropriate recommendations to the Board on
candidates, so as to maintain an appropriate balance of skills,
experience and knowledge on the Board.
Nomination Committee meeting attendance
Members
Barbara Jeremiah (Chair)
Dame Nicola Brewer*
Mary Jo Jacobi**
Ben Magara
Sir Jim McDonald
Attendance
5/5
3/4
2/2
5/5
5/5
*Dame Nicola was appointed to the Committee from 28 April 2023. Dame Nicola was
unable to join one of the Committee's meetings during the year due to prior
commitments but liaised with the Chair on the matters to be discussed.
**Mary Jo stepped down from the Board with effect from the conclusion of the 2023
AGM on 27 April 2023.
2023 Highlights
• Led process for appointment of new Non-Executive Director,
Penny Freer
• Led process for appointment of new Chief Financial Officer,
Brian Puffer
Engagement with external stakeholders
• Engaged with various internal and external stakeholders,
including the Group’s corporate brokers, in relation to
appointment of new Chief Financial Officer
• Attended AGM in April 2023 and discussed Committee's
activities with shareholders
Find out more
The full responsibilities of the Nomination Committee are set out in its Terms of
Reference, which are reviewed annually and available at global.weir/investors/
corporate-governance/board-committees/.
The Weir Group PLC Annual Report and Financial Statements 2023
91
Barbara Jeremiah
Chair of the Nomination Committee
29 February 2024
Strategic Report
Governance
Financial Statements
Additional Information
Nomination Committee report
continued
Board composition, skills and attributes
At Weir, we recognise the importance of the Board and its
Committees having a combination of skills, experience and
knowledge to ensure we have an effective and entrepreneurial Board
that is well-placed to promote the long-term sustainable success of
the Company, generating value for shareholders and contributing to
wider society.
The Nomination Committee reviews the skills, attributes and
diversity represented by the Directors on the Board and determines
whether the existing Board composition remains appropriate to
achieve the Group’s purpose and strategy.
The Nomination Committee does this by maintaining a skills matrix
that tracks both the skills and experience needed currently, and
those future-facing attributes the Board intends to develop or acquire
Board skills and attributes matrix
over the longer term as it executes its strategy. This matrix is then
reviewed in conjunction with individual Director tenure to assist with
Board appointments and associated succession planning.
The most recently approved version of our Board skills matrix is set
out below. The charts that follow describe various elements of
diversity across the Board, and are supplemented by our disclosures
under the UK Listing Rules, FTSE Women Leaders Review and
Parker Review set out on page 97.
The Nomination Committee is satisfied that the Board and its
Committees have the right combination of skills, experience and
knowledge amongst a group of individuals that embody many
aspects of diversity.
Director
Barbara Jeremiah
Jon Stanton
Andy Agg
Dame Nicola Brewer
Penny Freer
Tracey Kerr
Ben Magara
Sir Jim McDonald
Brian Puffer (with effect from 1 March 2024)
Srinivasan Venkatakrishnan
Stephen Young
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Board independence as at 31 December 2023
Board gender balance as at 31 December 2023
1
Non-Executive
Executive
Men
Women
4
5
8
Board ethnicity as at 31 December 2023
Board nationality as at 31 December 2023
1
1
White British or other White minority
Black/African/Caribbean/Black British
Asian/Asian British
7
British
British/Australian
British/Indian
Zimbabwean
American
5
1
1
1
1
The Weir Group PLC Annual Report and Financial Statements 2023
92
Strategic Report
Governance
Financial Statements
Additional Information
Nomination Committee report
continued
Board appointments process
The Nomination Committee leads the process for appointments to
the Board, ensuring that there is a formal, rigorous and transparent
procedure in place for each appointment.
All appointments are based on merit and objective criteria, with
candidates being evaluated to assess their suitability across a
number of areas, including (without limitation) skills, education,
experience, background and independence.
Non-executive director appointment process
Within this context, due regard is also given to promoting diversity
of gender, social and ethnic backgrounds, and cognitive and personal
strengths, and the benefits that this can bring to the Board and its
Committees, in line with the measurable objectives set out in our
Board Diversity Policy.
The specific appointment processes followed during the year in
relation to the appointment of Penny Freer and Brian Puffer are
described in more detail below and on the following page.
Candidate specification
Engagement of professional
advisers and candidate
review process
In each case, the Nomination Committee began by considering the current Board composition,
the existing skills and attributes matrix and tenure of individual Directors. On this basis, it was
recognised that an additional director with specific experience as either a member or chair of a
remuneration committee would bolster the Remuneration Committee pipeline. It was also
recognised that an additional director with recent and relevant financial and accounting experience
would provide bench strength for the Audit Committee.
In light of its global approach and strong track record, leading executive search firm Hedley May was
engaged to assist with profiling candidates for the Remuneration Committee position. Hedley May is
a signatory to the Voluntary Code of Conduct for Executive Search Firms. Save for its involvement in
prior non-executive director searches (including the appointments of Tracey Kerr and Nicola Brewer
in 2022), Hedley May does not have any connection with Weir or individual Directors.
Later in the year, leading executive search firm Korn Ferry was engaged to assist with profiling
candidates for the Audit Committee position. In addition to having a wide pool of potential
candidates, Korn Ferry is also a signatory to the Voluntary Code of Conduct for Executive Search
Firms, and is accredited in the Enhanced Code of Conduct for Executive Search Firms (in line with
our Board Diversity Policy measurable objectives). Save for its involvement in prior director searches
and leadership insights assessments (described on page 95), Korn Ferry does not have any
connection with Weir or individual Directors.
Interviews and associated
due diligence
Shortlisted candidates were then interviewed by the Chair, with high potential candidates then being
invited to meet with other Board members (including the Chief Executive Officer, Senior
Independent Director and Chair of the Committees on which the successful candidate would
ultimately sit).
Recommendation and approval
In October 2023, the Nomination Committee unanimously decided to recommend Penny’s
appointment to the Board. Penny was selected on the basis that she had strong experience on listed
company boards and committees (including specific remuneration-related expertise), as well as
wide-ranging knowledge in banking and financial matters by virtue of her executive career. Following
Clare Chapman’s confirmation that she intended to step down from the Board at the end of 2023,
it was determined that Penny join the Board as an independent Non-Executive initially and that she
take on the role of Remuneration Committee Chair following Clare’s departure
In February 2024, the Nomination Committee also unanimously decided to recommend Andy's
appointment to the Board. Andy was recognised by the Committee as a candidate with strong
financial and commercial acumen, in addition to significant international experience through his
executive career, and therefore an ideal addition to the Audit Committee.
Induction
Following her appointment, Penny has undertaken a comprehensive and tailored induction
programme. Further details on our induction process can be found on page 88.
Andy's induction will be similarly personalised and will take place over the course of 2024.
Further details will be provided in next year's Annual Report.
The Weir Group PLC Annual Report and Financial Statements 2023
93
Strategic Report
Governance
Financial Statements
Additional Information
Nomination Committee report
continued
Chief Financial Officer appointment process
Candidate specification
The Nomination Committee, together with the Chief Executive Officer, commenced the search by
articulating the key qualities for a Chief Financial Officer, as well as considering the principles and
measurable objectives set out in our Board Diversity Policy. The specification articulated a range of
expectations in terms of strategic, operational and technical experience appropriate for a Chief
Financial Officer of a multi-billion revenue group spanning multiple territories and business streams,
as well as reflecting the personal attributes needed to develop a collaborative, high-performing,
pragmatic Finance function.
Engagement of professional
advisers and candidate
review process
The Nomination Committee engaged leading executive search firm Odgers Berndtson (“Odgers”) to
assist with evaluating both internal and external talent against the qualities identified. Odgers was
appointed due to its high-quality credentials and international reach. Odgers is also a signatory to the
Voluntary Code of Conduct for Executive Search Firms, and is accredited in the Enhanced Code of
Conduct for Executive Search Firms (in line with our Board Diversity Policy measurable objectives).
Other than in relation to its engagement on other executive search processes, Odgers does not have
any connection with Weir or individual Directors other than its engagement in this capacity.
Longlist and shortlist review
Odgers provided an initial longlist that was presented to the Committee in Q3 2023, encompassing a
wide range of potential candidates from diverse personal and professional backgrounds. Given the
Committee’s prior work through the year on talent development and succession planning (including a
market benchmarking exercise), positive progress was made towards creating a diverse shortlist of
seven potential candidates swiftly following that meeting.
Interviews
Initial interviews were led by the Chief Executive Officer, with support from the Chief People Officer.
Preferred candidates were then asked to complete additional interviews with the Chair, Senior
Independent Director and Chair of the Audit Committee. The interview process ran through late
summer into autumn, and the Board met for a progress update in September 2023.
Due diligence and references
Recommendation and approval
Preferred candidates then completed a Leadership Insights assessment run by Korn Ferry, designed
to evaluate competencies, traits, drivers, and experiences. Korn Ferry was selected to assist with
this element of the process in line with our standard practice for hires at job role Band 5 or above
across the Group, and does not have any connection with Weir or individual Directors other than its
provision of this assessment process and its engagement on other search mandates. Odgers
assisted with the usual pre-employment due diligence checks as well as facilitating references, and
the views of both the Group’s brokers were also sought.
Following this robust and rigorous process, the Nomination Committee, working in tandem with the
Remuneration Committee in relation to an appropriate financial package, unanimously decided to
recommend Brian’s appointment to the Board for approval. Brian was selected due to his status as
an accomplished finance leader and broad range of experience (including most recently as Chief
Financial and Risk Officer of BP plc’s Integrated Supply and Trading business). In particular, Brian’s
extensive experience of business transformation was assessed as enabling Brian to make an
immediate contribution to the Group’s strategic priorities, including the delivery of the Performance
Excellence programme.
Induction
Following his appointment, Brian will undertake a comprehensive and tailored induction programme.
Further details on our induction process can be found on page 88.
Interim arrangements
The Nomination Committee also considered with the Chief Executive Officer the arrangements for
the interim period following John Heasley’s departure and prior to Brian’s arrival. It was unanimously
agreed that, given his strong finance and accounting background and prior tenure as the Group’s
Chief Financial Officer, the Chief Executive Officer would supervise the Finance function, with
associated changes in reporting lines within the team, for the interim period. It was also agreed that
the Chief Executive Officer would lead on both the strategic and financial aspects of the year end
process and be supported in the results presentation and associated roadshow by the Head of
Investor Relations.
The Weir Group PLC Annual Report and Financial Statements 2023
94
Strategic Report
Governance
Financial Statements
Additional Information
Nomination Committee report
continued
Succession planning
Weir adopts a structured and formalised approach to succession
planning at both Board and senior management level. Our succession
planning processes encompass a range of planning, communication
and development activities designed to:
• ensure individuals at Weir are developed to their fullest potential;
• facilitate the orderly replacement of individuals who are ready
to move on from Weir;
• strengthen retention and avoid unforeseen or regretted
departures;
• ensure there is emergency cover in place for all key roles at
Group Executive level; and
• oversee the development of a diverse pipeline into both the
Board and the Group Executive and direct reports.
Succession planning was an agenda item at all of the Nomination
Committee’s substantive meetings this year, with the key items
under consideration including:
• Board composition, including the departures of Mary Jo Jacobi,
Ebbie Haan and Clare Chapman, and the appointments of
Penny Freer and Andy Agg;
• Committee membership, including the appointment of
Penny Freer as Chair of the Remuneration Committee;
• the transition of our Senior Independent Director role, which will
transition from Sir Jim McDonald to Dame Nicola Brewer with
effect from the conclusion of the AGM in 2024;
• the transition of our Non-Executive Director responsible for
employee engagement role, which transitioned from
Mary Jo Jacobi to Dame Nicola Brewer in April 2023 and will
transition from Nicola to Ben Magara with effect from the
conclusion of the AGM in 2024;
• Group Executive succession planning, including the appointment
of Brian Puffer as Chief Financial Officer Designate.
During 2023, the Nomination Committee also updated its Terms of
Reference to reflect an expanded remit in relation to oversight of
succession planning for job role Band 5 leaders (and Band 4 leaders
in the Band 5 succession pipeline), in addition to the Group
Executive. It is anticipated that this deeper, broader view of talent
development at these levels will assist further in the development
of a diverse pipeline into leadership positions across the Group, as
well as providing the opportunity to identify deeper cross-divisional
talent pools.
Sustainability and Technology Committee membership
In addition to considering periodic refreshment of Committee
membership as part of succession planning, this year the Nomination
Committee also helped to determine the membership of the new
Sustainability and Technology Committee. In particular:
• Tracey Kerr was selected as Chair of the Sustainability and
Technology Committee given her vast experience of sustainable
development matters during the course of her career, including
most recently her role as Group Head of Sustainable Development
at Anglo American Plc;
• each of Ben Magara, Dame Nicola Brewer and Penny Freer were
selected as members of the Sustainability and Technology
Committee, on the basis of their combined insights into matters
relevant to the Committee's remit (such as environmental and
sustainability matters, strategic planning, horizon scanning), as well
as the need to ensure as much diversity of gender, ethnicity and
personal background within the Committee. Further to Andy's
appointment on 27 February 2024 and in light of Penny's other
duties, it was agreed that Andy would join Sustainability and
Technology Committee instead of Penny with immediate effect.
Andy will bring broad experience in sustainability-related matters
by virtue of his executive position at National Grid plc to the
Committee and its discussions.
The Weir Group PLC Annual Report and Financial Statements 2023
95
Board diversity policy and associated objectives
Weir has had a Board Diversity Policy for more than 10 years and a
copy is available on our website at global.weir/siteassets/pdfs/
sustainability/our-governance-and-policies/board-diversity-policy-
december-2022.pdf. Our Board Diversity Policy was most recently
updated in 2022 to incorporate a number of new measurable
objectives aligned with the diversity-related disclosure requirements
set out in the UK Listing Rules. The Committee reviewed the Board
Diversity Policy in December 2023 and confirmed that no
amendments were necessary at this time.
Our Board Diversity Policy is integral to achieving our strategic
objectives, and we are fully committed to ensuring our Board and all
its Committees encompass all aspects of diversity because:
• gender diversity is critical to our equity and equality obligations;
• it is important that the Board composition better reflects the
diversity of our people around the world;
• fundamentally, better business outcomes are achieved when
diversity is achieved in its broadest sense; and
• being able to draw on the individual and collective contributions of
a diverse Board will ultimately lead to a competitive advantage and
enhance delivery of our strategy.
For the second year running since our most recent measurable
objectives were introduced, I am delighted to confirm that we have
met all four objectives (and therefore, as at 31 December 2023, all
three of the targets on Board diversity set out in LR 9.8.6R(9)).
Further detail on our disclosures for the purposes of the UK Listing
Rules are set out on the following page.
Board Diversity Policy measurable
objective
At least 40% of the Directors are women
At least one of the positions of Chair, Chief
Executive Officer, Senior Independent
Director and Chief Financial Officer to be
held by a woman.
At least one Director to be from a minority
ethnic background.
Engage only executive search firms who
have signed up to both the voluntary code of
conduct and enhanced voluntary code of
conduct for executive search firms in relation
to Board appointments.
Progress during
2023
Objective achieved:
As at 31 December
2023, four out of nine
Directors (44%) were
women.
Objective achieved:
One position is held
by a woman (Chair).
Objective achieved:
As at 31 December
2023, two out of nine
Directors (22%) were
from minority ethnic
backgrounds.
Objective
substantially
achieved: Odgers
Berndtson and Korn
Ferry meet these
requirements. Hedley
May is a signatory to
the voluntary code of
conduct.
Strategic Report
Governance
Financial Statements
Additional Information
Nomination Committee report
continued
Board and executive management diversity
In accordance with the UK Listing Rules, the tables below set out our gender and ethnic representation at Board and executive management level.
Gender representation: Board and executive management as at 31 December 2023
Description
Men
Women
Other categories
Not specified/prefer not to say
Number of
Board members*
Percentage
of the Board
Number of senior
positions on the
Board (CEO,
CFO**, SID and
Chair)
Number in
executive
management***
Percentage of
executive
management***
5
4
–
–
56 %
44 %
–
–
2
1
–
–
5
2
–
–
71%
29%
–
–
Ethnic representation: Board and executive management as at 31 December 2023
Description
White British or other White (including minority-
white ethnic groups)
Mixed / Multiple ethnic groups
Asian/Asian British
Black/African/Caribbean/Black British
Other Ethnic group including Arab
Not specified/prefer not to say
Number of
Board members*
Percentage
of the Board
Number of senior
positions on the
Board (CEO,
CFO**, SID and
Chair)
Number in
executive
management***
Percentage of
executive
management***
7
–
1
1
–
–
78 %
–
11 %
11 %
–
–
3
–
–
–
–
–
7
–
–
–
–
–
100%
–
–
–
–
–
For the purposes of the tables set out above (and all disclosures in relation to Board and executive management diversity in this annual report, unless otherwise specified): .
* Clare Chapman resigned from the Board with effect from and including 31 December 2023 and therefore no data relating to Clare is included in our disclosures.
** John Heasley, the Group’s former Chief Financial Officer, resigned from the Board with effect from 30 November 2023. Brian Puffer, the Group’s Chief Financial Officer Designate,
will join the Board on 1 March 2024. On this basis, no data relating to either the gender or ethnic diversity of the Chief Financial Officer position is included in our disclosures
displayed above.
We continue to use 31 December as our reference date, given that this aligns with our financial year end and provides a consistent snapshot of our position on gender and ethnic
diversity to allow for comparison across years
Andy Agg joined the Board with effect from 27 February 2024 (between the reference date of 31 December 2023 and the date of this Annual Report, 29 February 2024). As a result, this
had the following impact on the statistics set out above:
• four out of ten Board members are women (40%);
• one of the four senior positions on the Board is held by a woman (Chair); and
• two out of ten Board members will be from a minority ethnic background (20%).
Following Brian Puffer's appointment to the Board on 1 March 2024, the statistics set out above will be impacted as follows:
• four out of eleven Board members will be women (36%) on a temporary, transitional basis until 31 March 2024, at which point Venkat will step down and then four out of ten Board
members will be women (40%);
• one of the four senior positions on the Board will be held by a woman (Chair);
• two out of eleven Board members will be from a minority ethnic background (20%);
• two of the eight executive management positions will be held by a woman (25%);
• all four senior positions on the Board will be held by an individual who is White British or other White;
• all eight executive management positions will be held by individuals who are White British or other white (100%).
*** Executive management as defined in the UK Listing Rules means the executive committee or most senior executive or managerial body below the Board, including the company
secretary but excluding administrative and support staff. At Weir, executive management therefore comprises the Group Executive (which includes the Company Secretary).
Our approach to data collection
Gender and ethnicity data relating to the Board and Group Executive (which includes the Company Secretary) are collected on an annual
basis applying a standardised process managed by the Company Secretariat team in conjunction with our HR function.
Each individual is requested to complete an identical questionnaire on a strictly confidential and voluntary basis, through which the
individual self-reports their ethnicity and gender identity or states that they do not wish to report such data. Consent is provided for data
collection and processing of that data in accordance with the Group’s Privacy Statement.
The criteria of the standard form questionnaire are fully aligned to the definitions specified in the UK Listing Rules, with individuals required
to specify:
a.
b.
self-reported gender identity – selection from the following categories: (a) man; (b) woman; (c) other category (please specify);
and (d) not specified / prefer not to say
self-reported ethnic background – selection from the following categories, as designated by the UK Office of National Statistics:
(a) White British or other White; (b) Mixed / Multiple ethnic groups; (c) Asian / Asian British; (d) Black / African / Caribbean / Black
British; (e) other ethnic group, including Arab; and (f) not specified / prefer not to say.
The Weir Group PLC Annual Report and Financial Statements 2023
96
Strategic Report
Governance
Financial Statements
Additional Information
This year, we have set a target of 14% ethnic diversity amongst
our senior management team by the end of 2027. Currently, 4%
of our senior management population has self-declared as being
ethnically diverse for the purposes of the Parker Review. The target
we have selected therefore seeks to more than double our
performance in this area, while recognising that there may be scope
to set a more stretching goal as we see progress in both gender and
ethnic diversity in due course.
Election and re-election of Directors
With the exception of Srinivasan Venkatakrishnan (who will step
down from the Board from 31 March 2024) and Sir Jim McDonald
(who will be stepping down from the Board at the conclusion of the
meeting), the Company will submit all eligible Directors for re-
election, and in the case of each of Andy Agg, Brian Puffer and
Penny Freer, election for the first time at the Company’s annual
general meeting in April 2024.
As part of making any recommendation to the Board in respect of
elections or re-elections, the Nomination Committee assesses each
Director, including considering: their performance on the Board and
its Committees; the findings of the Board performance review; their
attendance record during the year and their other time commitments
outside Weir; and their contribution to the long-term sustainable
success of the Company. For Non-Executive Directors, the
Committee also considers whether each individual Director continues
to be considered independent for the purposes of the UK Corporate
Governance Code. You can read more on our independence
assessment on page 88.
In accordance with the UK Corporate Governance Code, the notice of
Annual General Meeting sets out the specific reasons why each
Director’s contribution is, and continues to be, important to the
Company’s long-term sustainable success.
Nomination Committee effectiveness
The Nomination Committee’s performance was reviewed during the
year as part of the 2023 Board performance review process
facilitated by IBE, further details of which are set out on page 89.
The Nomination Committee continues to fulfil its responsibilities
effectively. The review highlighted that the Nomination Committee
had made significant progress on the prior year, including progress
against the recommendations set out in the Board performance
reviews undertaken in 2021 and 2022. In particular, the Nomination
Committee's expanded remit in relation to talent development and
succession planning has enabled it to undertake important work
during the year in this area, and it will want to establish an
appropriate cadence for these topics going forwards.
Find out more
Inclusion, Diversity & Equity policies can be viewed on our website:
www.global.weir/sustainability/policies
Board performance review
See page 89
Nomination Committee report
continued
FTSE Women Leaders' Review
We continue to support the targets set out in the FTSE Women
Leaders Review, and include data from previous years to allow for
historic trend analysis.
In line with the FTSE Women Leaders Review reporting cycle, all
data is shown at the snapshot date of 31 October in each reporting
year. Our data on Board and Group Executive diversity as at 31
December 2023, which reflects changes that have occurred since 31
October 2023 including the departures of Clare Chapman and John
Heasley, can be found on page 96.
As at
31 October
2023
As at
31 October
2022
As at
31 October
2021
45% (5
out of 11)
42% (5 out
of 12)
27% (3 out
of 11)
Yes
(Chair)
Yes
(Chair)
Yes
(SID)
% of females on Board
At least one Chair/CEO/
SID/CFO to be held by a
woman
% of females in leadership
teams
25% (13
out of 51)
24% (13
out of 55)
29% (17
out of 58)
The FTSE Women Leaders Review defines “leadership teams” as
members of the executive committee and their direct reports
(excluding administrative and support staff). At Weir, "leadership
teams" for the purposes of the FTSE Women Leaders Review
therefore comprise the Group Executive and any roles at job role
bands 4 or 5 which report to a member of the Group Executive.
We use this same group of individuals to report on gender diversity
of senior management and their direct reports for the purposes of
Provision 23 of the UK Corporate Governance Code.
We are pleased with the progress we continue to make on female
representation at Board level. While progress at the leadership team
level is being made, we are seeking to accelerate this in spite of the
challenges we face as a result of operating in an historically male-
dominated industry. The Group Executive remains committed to
achieving an improved gender balance amongst the leadership teams
category over the next few years, including through strengthened
communication of our gender diversity targets and increasing
accountability for their delivery.
Parker Review
We also continue to support the targets set out in the Parker Review,
including the recommendation to set a percentage target by
December 2023 for ethnic minority representation amongst senior
management, to be achieved by December 2027.
In line with the Parker Review reporting cycle, all data for our Board-
level ethnicity disclosures is shown at the snapshot date of 31
December in each reporting year.
As at
31
December
2023
As at
31
December
2022
As at
31
December
2021
Number of directors from
an ethnic minority
background
2
2
2
The Parker Review defines “senior management” as members of
the executive committee (or equivalent) and those senior managers
who report directly to them – this is aligned with the definition of
"leadership teams" in the FTSE Women Leaders Review. At Weir,
“senior management” for the purposes of the Parker Review
therefore comprises the Group Executive and any roles at job role
bands 4 or 5 which report to a member of the Group Executive.
The Weir Group PLC Annual Report and Financial Statements 2023
97
Strategic Report
Governance
Financial Statements
Additional Information
Audit Committee report
Dear Shareholder,
I am pleased to present our
report for the year ended 31
December 2023, which outlines
how the Committee has fulfilled
its key objective of providing
effective governance over the
Group’s financial reporting during
the year, and also highlights
our key priorities for 2024.
2023 highlights
In addition to our routine business, we:
• Continued to monitor preparations to address UK Corporate
Governance reforms.
• Considered the findings from the external review of the
effectiveness of the Internal Audit function.
• Reviewed and considered the adequacy of current levels of
assurance over key, strategic non-financial metrics, such as
environmental, health and safety and diversity measures.
• Reviewed the updated Group Crisis Management Plan.
Areas of focus 2024
The key areas of focus for the Audit Committee in 2024 will be:
• Ongoing oversight of the Group's response to the revised UK
Corporate Governance Code as regards internal controls.
• Reviewing any changes to the Company’s procedures for
detecting fraud in response to the failure to prevent fraud offence
introduced by The Economic Crime and Corporate Transparency
Act 2023.
• Confirming the adequacy of the control environment of the newly
established Weir Business Services and monitoring the stability of
controls during transition, supported by Internal Audit.
• Reviewing the Group's ESG assurance roadmap, supported by
Internal Audit, with a view to ensuring appropriate plans are in
place to meet regulatory requirements as they emerge.
• Preliminary planning for the audit tender which is required to be
concluded for the year ending 31 December 2026.
Stephen Young
Chair of the Audit Committee
29 February 2024
Stephen Young
Chair of the Audit Committee
Role of the Committee
The Audit Committee is responsible for providing effective
governance over the Group’s financial reporting and making
appropriate recommendations to the Board. This includes
reviewing the effectiveness of the risk management and
internal control frameworks, reviewing significant financial
reporting judgements and reviewing the activities of Internal
Audit. The Committee is also responsible for appointing the
external auditor, approving fees and assessing audit quality and
independence.
Committee evaluation
The Audit Committee’s performance was reviewed during the
year as part of the 2023 Board performance review process
facilitated by Independent Board Evaluation, further details of
which are set out on page 89 The Audit Committee continues to
fulfil its responsibilities effectively, with the review noting that
the Audit Committee handles its remit extremely well.
Audit Committee members and meeting attendance
Members
Stephen Young (Chair)
Clare Chapman
Ebbie Haan
Tracey Kerr
Srinivasan Venkatakrishnan
Attendance
4/4
0/2
2/2
4/4
4/4
The Company Secretary, Graham Vanhegan, acts as Secretary
to the Committee. Members have been selected with the aim
of providing the wide range of financial and commercial
expertise necessary to fulfil Committee responsibilities.
Individual biographies have been presented on pages 73 to 76.
Clare Chapman stood down from the Committee on 27
February 2023 and Ebbie Haan on 27 April 2023, and, as
announced on 27 February 2024 Srinivasan Venkatakrishnan will
be stepping down from the Board on 31 March 2024. I would
like to thank Clare, Ebbie and Venkat for their contributions to
the Committee during their tenures. I would also like to
welcome to the Committee Penny Freer, having joined with
effect from 15 December 2023, and Andy Agg, having joined
with effect from 27 February 2024.
Find out more
The full responsibilities of the Audit Committee are set out in its Terms of Reference
which are reviewed annually and available at:
https://www.global.weir/globalassets/investors/role-of-the-board/the-weir-group-plc---
audit-committee-terms-of-reference--2023.pdf.
The Weir Group PLC Annual Report and Financial Statements 2023
98
Strategic Report
Governance
Financial Statements
Additional Information
Audit Committee report
continued
MAIN ACTIVITIES OF THE AUDIT COMMITTEE
The main activities of the Audit Committee are outlined below. We
meet four times during the year and have met twice since the year
end. Each Committee meeting normally takes place prior to a Board
meeting, at which an update on Committee activities is provided. We
have the ability to call on Group employees to assist in our work and
to obtain any information required from Executive Directors in order
to carry out our roles and responsibilities. We are also able to obtain
outside legal or independent professional advice if required.
(i) Financial reporting
Our principal responsibility in this area is the review and challenge of
the actions and judgements of management in relation to the interim
and annual financial statements before submission to the Board,
paying particular attention to:
• critical accounting policies and practices, and any changes therein;
• decisions requiring significant judgements or estimates or where
there has been discussion with the external auditor;
• the existence of any errors, adjusted or unadjusted, resulting
from the audit;
• the clarity of the disclosures and compliance with accounting
standards and relevant financial and governance reporting
requirements;
• an assessment of the adoption of the going concern basis of
accounting and a review of the process and financial modelling
underpinning the Group’s Viability statement;
• how the impact of climate change is considered and reflected
in the financial statements and related assessments; and
• the processes surrounding the compilation of the Annual Report
and Financial Statements with regard to presenting a fair,
balanced and understandable assessment of the Group’s position
and prospects.
(ii) Internal control and risk management
While overall responsibility for the Group’s risk management and
internal control frameworks rests with the Board, the Audit
Committee has a delegated responsibility to keep under review the
effectiveness of the systems supporting these. Further details on
accountability for Risk Management are provided in the Corporate
Governance Report on page 90.
Our work in this area is supported by reporting from the Group Head
of Internal Audit on the results of the programme of internal audits
completed; the overall assessment of the internal control
environment, with reference to the results of their work and the
results from the self-assessed Compliance Scorecards; and in
addition, reporting, either verbal or written, from Senior Management
covering any investigations into known or suspected fraudulent or
inappropriate activities. We take comfort from work undertaken for
the Board on a review of the sources of assurance, which are
mapped against the principal risks (see (iii) Internal audit). In addition,
the Committee take comfort from the audit work performed and
conclusions reached by PwC over the controls environment of the
Group’s critical IT systems.
The Committee also receives regular reporting on the Group’s Ethics
and Compliance related activities from the Chief Compliance Officer,
as well as the Group Head of Internal Audit. This includes reviewing
the Group’s Ethics Hotline programme, which provides a mechanism
for employees with concerns about the conduct of the Group or its
employees to report their concerns. The Committee ensures that
appropriate arrangements are in place to receive and act
proportionately on any complaint about malpractice, in financial
reporting or otherwise.
The Committee also receive presentations from each Divisional VP of
Finance, Group Head of Tax, Group Treasurer, Group Head of Risk
and Insurance and Group Chief Information Security Officer.
The Weir Group PLC Annual Report and Financial Statements 2023
99
(iii) Internal audit
The Committee has a responsibility to monitor the effectiveness of
the Group’s Internal Audit function. During the year, the Group Head
of Internal Audit provides the Committee Chair with copies of all
internal audit reports, and presents the results of audit visits and
progress against the internal audit plan to the Committee, with
particular focus on high priority findings and the action plans,
including management responses, to address these areas. Private
discussions between the Committee Chair and the Group Head of
Internal Audit are held during the year as required and at least once a
year with the full Committee.
These updates, combined with Compliance Scorecard reporting,
provide broad coverage of the Internal Audit function and a good
sense of the control environment. This also allows the Committee to
ensure the function is effective, which includes assessing the
independence of the function, ensuring that it is adequately
resourced and has appropriate standing within the Company.
One of the main duties of the Committee is to review the Annual
Internal Audit Plan and to ensure that Internal Audit remains
focused on providing effective assurance. As part of the Group’s
risk management procedures, key sources of assurance are
mapped against the Group’s core processes and this is used to
ensure internal audit planning considers wider internal assurance
risk indicators.
The factors considered when deciding which businesses to audit and
the scope of each audit are, amongst other things, critical system or
Senior Management changes, financial results, assessments from
other assurance reviews undertaken, whistleblower report instances
and whether the business is a recent acquisition. The timing of the
most recent visit and consideration of the number of visits to each
operating company in the Group on a cyclical basis is also taken into
account. In addition, the emergence of any common themes or
trends in the findings of recent internal audits or Compliance
Scorecard submissions is taken into consideration. Planning is
further assisted by a risk modelling tool for dynamic risk prioritisation
of audits.
(iv) External audit
The Committee is responsible for recommending to the Board the
appointment, re-appointment, remuneration (including non-audit
services) and removal of the external auditor. The external auditors
are PwC who were first appointed for the financial year commencing
1 January 2016 following a competitive tender process. The
Committee has complied with the Competition and Markets
Authority Order ‘The Statutory Audit Services for Large Companies
Market Investigation (Mandatory Use of Competitive Tender
Processes and Audit Committee Responsibilities) Order 2014’ during
the financial year ended 31 December 2023.
When considering whether to recommend the re-appointment of the
external auditor, the Committee considers a range of factors,
including the effectiveness of the external audit, the period since the
last audit tender was conducted, and the ongoing independence and
objectivity of the external auditor. The next audit tender process is
required to be concluded for the year ending 31 December 2026,
subject to the ongoing satisfactory performance of PwC in the
intervening period.
Should the external auditor resign, the Committee would be
responsible for investigating the issues surrounding the resignation
and consider whether any action is required.
(v) Non financial reporting
In response to emerging requirements, the Committee are taking
more of an active role in considering sustainability matters and
reporting, particularly in relation to the assurance of environmental,
social and governance metrics.
Strategic Report
Governance
Financial Statements
Additional Information
Audit Committee report
continued
AUDIT COMMITTEE MEETING CALENDAR
The below calendar of activities sets out the matters discussed and outcomes reached at each of the Committee meetings. This reflects
Committee meetings whereby content relevant to the 2023 financial year was discussed.
July 2023
October 2023
• Reviewed the findings from the internal audits performed to
date and the results from the H1 2023 compliance scorecard.
• Received an update on the anticipated impact of the UK
Corporate Governance reforms.
• Reviewed the findings from further internal audits performed.
• Received an update to PwC's audit plan and agreed to
recommend approval of the plan and fees to the Board.
• Received annual updates in relation to Ethics & Compliance,
• Considered the findings from the ESG assurance work
Crisis Management and Treasury Strategy & Risk.
undertaken and noted the next steps to develop the broader
ESG assurance roadmap.
• Reviewed and confirmed external auditor effectiveness.
• Received an update in respect of Weir Business Services, part of
the Group's Performance Excellence programme.
• Received the annual update from the Minerals Division VP of
• Reviewed PwC's draft audit plan and agreed to recommend
Finance & IT.
approval of the plan to the Board.
• Reviewed the Committee's terms of reference and agreed to
• Reviewed the key judgemental issues, PwC's interim
recommend approval of the updated terms to the Board.
review findings and the interim financial statements; agreed
to recommend approval of PwC's letter of representation,
key accounting judgements and the financial statements to
the Board.
• Received the annual update from the ESCO Division VP of
Finance & Accounting.
• Held private session with the external auditors.
January 2024
February 2024
• Reviewed the findings from the remaining 2023 internal audits.
• Reviewed the results of the H2 2023 compliance scorecard.
• Confirmed the independence of the Internal Audit function.
• Received an update on the anticipated impact of the revised
• Considered the findings from the external quality review of the
UK Corporate Governance Code.
Internal Audit function.
• Received a progress update in relation to the development of
• Approved the 2024 Internal Audit strategy, charter and plan.
• Considered the judgements relating to 2023 and responses
from PwC in relation to management conclusions presented.
• Received an update on the status of the Annual Report and
Financial Statements preparation.
• Considered the risk management and internal controls
effectiveness review and agreed to recommend to the Board
that the Group's risk management and internal control
frameworks remain effective.
the ESG assurance roadmap.
• Received annual updates in relation to Risk Management and
Tax Strategy and Risk.
• Considered the remaining key judgements relating to 2023
including a review of the going concern assessment.
• Considered the responses from PwC in relation to the key
judgements and other audit findings.
• Reviewed the draft financial statements with particular focus
on disclosures in relation to judgemental issues.
• Noted the results of the committee effectiveness review.
• Agreed to recommend approval of PwC's letter of
• Held private session with the Head of Internal Audit.
representation, the key accounting judgements and the
financial statements to the Board.
• Confirmed the independence of PwC.
• Reviewed the results of viability modelling; considered
the process supporting the fair balanced and understandable
review; and reviewed the Audit Committee Report;
agreeing recommendations for approval to the Board
in respect of each.
• Held private session with the External Auditors.
Audit Committees and the External Audit: Minimum Standard
The Company and its Audit Committee apply the 'Audit Committees
and the External Audit: Minimum Standard' (the Standard) published
by the FRC in 2023. This Committee report describes how and the
extent to which the Company has complied with the provisions of
the Standard during 2023.
There were no shareholder requests for certain matters to be
covered in the audit during the year and there were no regulatory
inspections of the quality of the Company's audit. An explanation of
the application of the Group's accounting policies is provided in note
2 to the financial statements.
The Weir Group PLC Annual Report and Financial Statements 2023
100
Strategic Report
Governance
Financial Statements
Additional Information
Audit Committee report
continued
The following pages provide further detail of Committee activity in
relation to the current financial year.
Compliance scorecard
(i) Financial reporting
Exceptional items, other adjusting items and provisions have been
the main areas of financial reporting focus in 2023. The Committee
received and reviewed details of exceptional and other adjusting
items, which include costs in relation to the Group's Performance
Excellence programme, the reversal of previously taken provisions in
relation to the wind down of Russia operations and the charge in
relation to the US subsidiary's legacy asbestos-related liabilities,
which followed the planned triennial actuarial valuation.
During its meetings, the Committee challenged management
assumptions, judgements and estimates. With regard to the US
subsidiary's asbestos-related liabilities, the Committee received
detailed reporting in respect of the findings and associated financial
modelling from the latest triennial actuarial review and gave careful
consideration to the associated disclosures within the Annual Report.
Further detail on these and other financial reporting matters
discussed in the current year and recurring agenda items can be
found on pages 103 to 108.
(ii) Internal control and risk management
During 2023, the Committee were updated on the work performed in
the year by the Compliance team. This included progress in relation
to automating sanctions screening, therefore reducing reliance on
manual controls, moving forward with work in relation to Human
Rights legislative requirements, increasing awareness of the Ethics
Hotline as a reporting tool and general re-enforcement across all
aspects of compliance. The Committee were reminded of the
ongoing training provision in areas such as the Group’s Code of
Conduct, anti-trust and anti-bribery.
The Committee also received presentations from each Divisional VP
of Finance. These presentations included a review of the Divisional
risk dashboards, significant findings from internal audit visits and
recent Compliance Scorecard process results, control themes and
areas of focus, as well as an overview of their Divisional finance
leadership teams. In addition, the Committee were updated on
progress of strategic initiatives, including Performance Excellence
initiatives and the associated impacts in each Division.
Focus is given to the strength and depth of the finance team’s
capability; the quality and efficiency of responses to findings of
internal audit visits, including whether learning has been shared more
widely across the Group to mitigate the risk of recurrence and to
share good practice; the quality of the discussion around Divisional
risk dashboards; and, progress against strategic initiatives.
The Committee also received annual updates on Tax and Treasury
Strategy and Risk Management.
In October, the Committee received a Crisis Management update
from the Group Chief Information Security Officer. This followed the
creation of a crisis management working group in 2022 and provided
the Committee with an update on work carried out by this group
during the year. The Committee were advised that a new Crisis
Management Plan has been created and scenario testing performed
with the Group Executive, supported by an external specialist
consultancy firm. The Committee were advised the feedback
from the scenario tests was positive with lessons learned from
the exercise being incorporated into final internal documentation
and processes.
Performance Excellence
The Committee also received an update from the VP Transformation
in relation to the functional transformation element of the Group's
Performance Excellence programme. This provided the Committee
with an overview of the methodology supporting the transition to
Weir Business Services, focusing on the internal controls aspects of
the transition, risks and mitigations.
The Compliance scorecard is a control mechanism whereby each
operating company undertakes self-assessments every six
months of their compliance with Group policies and procedures,
including key internal controls across a range of categories
including finance, anti-bribery and corruption, tax, treasury, trade
and customs, HR, cybersecurity, IT and legal. As far as the
elements relating to finance are concerned, these cover (but are
not limited to) management accounts and financial reporting,
balance sheet controls and employee costs. The scorecard
process has been extended in recent years to cover areas of
non-financial reporting such as scope 1&2 emissions and Total
Incident Rate reporting. Each operating company is expected to
prepare and execute action plans to address any weaknesses
identified as part of the self-assessment process.
Operating companies are required to retain evidence of their
testing in support of their self-assessment responses. Internal
audit has responsibility for confirming the self-assessment
during planned audits. Any significant variances are reported to
local, Divisional and Group management. Any companies
reporting low levels of compliance are required to prepare
improvement plans to demonstrate how they will improve over a
reasonable period of time. The overall compliance scores (as a
percentage) are tracked over time and reported to the Audit
Committee twice a year, with the Committee paying particular
attention to the variances between self-assessed and Internal
Audit assessed scores as well as trends and the performance of
newly acquired companies.
(iii) Internal audit
The results of internal audits and the compliance scorecard process
through 2023 have continued to be positive, providing comfort over
the control environment across both divisions and Corporate. Few
high priority actions were identified and audit actions continue to be
closed out efficiently and effectively.
Completed internal audits
2023
31
2022
27
The Committee were also updated on work done in collaboration
with the Data and Digital team to enhance Internal Audit's access to
data and work being done with Group Sustainability and Group
Finance to determine the approach and resource necessary to
provide appropriate assurance in relation to ESG data.
Internal audit plan
The 2024 plan continues to focus the largest proportion of
resource on financial assurance reviews whilst incorporating
wider risk assurance coverage, both financial and non-financial,
as described below:
• Reviews are undertaken to assess compliance with Weir’s Code of
Conduct procedures, including anti-bribery and corruption; this
includes areas, such as policy and procedures, employee training,
relationships with agents, accounting for employee expenses and
corporate hospitality and gifts.
• The IT assurance programme for 2024 will focus on areas such as
responsible AI framework review and supply chain effectiveness.
• ESG assurance will be a key feature of the 2024 plan, including
review of the framework under development for ESG assurance
and assessing key risks and controls as well as Internal Audit
performing assurance and assurance readiness reviews.
• Wider risk assurance projects with a particular focus on
Performance Excellence initiatives.
• An element of the Annual Plan is reserved for assurance coverage
of any emerging risk or regulatory changes, including UK Corporate
Governance reforms.
The Committee considered and approved the 2024 Internal Audit
Strategy and Plan noting the inclusion of Performance Excellence and
ESG assurance activity in particular.
The Weir Group PLC Annual Report and Financial Statements 2023
101
Strategic Report
Governance
Financial Statements
Additional Information
Audit Committee report
continued
Internal Audit effectiveness
An external effectiveness review was performed by BDO LLP during
the year. The review assessed Internal Audit against the professional
Internal Audit Standards set out in The Global Institute of Internal
Auditors’ International Professional Practices Framework. The review
also consisted of questionnaires to senior finance management. The
review concluded that Internal Audit were performing well,
conforming to required standards and comparing well to peers.
(iv) External audit
2023 Audit
Audit risks identified by PwC have changed from last year to reduce
the audit risk for the valuation of pension assets from significant in
the prior year to normal for the current year. This follows the pension
buy-in during 2023 which has significantly decreased the volume of
complex invested assets. Key audit matters are included in their
Audit Report on pages 138 to 143.
The Group audit team visited the Netherlands in 2023 and field work
has been carried out on a hybrid basis by component teams across
the globe. Well established procedures are in place for component
audit supervision and remote file reviews.
Auditor effectiveness
The effectiveness of the external audit process is highly dependent
on appropriate audit risk identification at the start of the audit cycle
and the quality of planning. PwC present their detailed audit plan to
the Committee each year, identifying their assessment of the key
risks, amongst other matters.
Our assessment of the effectiveness and quality of the audit covers
a number of other matters, including consideration of the auditors
judgement, skills and culture, a review of the reporting from the
auditors to the Committee, a review of the latest FRC Audit Quality
Inspection & Supervision Report and also by seeking feedback from
management and Internal Audit on the overall conduct and
effectiveness of the audit process and whether the agreed audit plan
and any commitments made during the tender process have been
met. This includes whether the auditors are considered to have a
good understanding of the Group's business and sufficient
knowledge of the industry, whether the level of challenge provided
by the auditors is deemed appropriate and whether
recommendations have been acted upon (and if not, why not).
Overall, management were satisfied that there had been appropriate
focus and challenge on the primary areas of audit risk and assessed
the quality of the audit process as satisfactory. It was also noted that
the hybrid mixture of remote and on-site working through the 2022
audit process was effectively managed and efficient.
In addition, during 2023 the Committee were provided with a
summary of the FRC’s Audit Quality Inspection and Supervision
Report. This showed a slight reduction in inspection results for PwC
audits selected for review compared to the prior year, with no audits
identified as requiring significant improvement.
The Committee held two private meetings with the external auditor
in 2023. This provided opportunity for open dialogue and feedback
from the Committee and the auditor without Executive management.
Matters discussed included the auditors assessment of business
risks and management activity thereon, the key audit firm and
network level controls the auditors relied upon to address any
identified risks to audit quality, the transparency and openness
of management interactions, confirmation that there has been
no restriction in scope placed on them by management and
how they exercised professional scepticism and challenged
management assumptions.
The Audit Committee Chair also meets with the PwC Group
Engagement Leader outside the formal Committee process as
necessary through the year. Such interactions are also important in
the assessment of quality. Based on the work carried out and the
FRC Audit Quality Inspection and Supervision Report, the Committee
are of the view that the quality of the audit process is satisfactory.
The Weir Group PLC Annual Report and Financial Statements 2023
102
Independence policy and non-audit services
A formal policy exists which provides guidelines on any non-audit
services which may be provided and ensures that the nature of the
advice to be provided cannot impair the objectivity of the auditor’s
opinion on the Group’s Financial Statements.
The policy makes it clear that only certain types of service are
permitted to be carried out by the auditors. All permitted non-audit
services require the approval of the Chief Financial Officer and,
where the expected cost of the service is in excess of £75,000, the
approval of the Audit Committee Chair. If non-audit fees approach
£0.5m during a calendar year, the Committee will consider imposing
additional restrictions.
The auditor confirms their independence at least annually. The
independence rules allow a maximum of five years as engagement
leader of the Group. Kenneth Wilson is in his third year as PwC
Group Engagement Leader.
Fees payable to PwC in respect of audit services, as set out in
the table below, were approved by the Committee after a review
of the level and nature of work to be performed and after being
satisfied by PwC that the fees were appropriate for the scope of
the work required.
The audit-related assurance work is primarily in relation to PwC's
review of the half year results. The non-audit fees are primarily
attributable to the appointment of PwC for assistance in the Offering
Memorandum required for the five-year £300m Sustainability-Linked
Notes. We are of the view that the level and nature of non-audit work
does not compromise the independence of the external auditor.
Having considered the relationship with PwC, their qualifications,
expertise, resources and effectiveness, the Committee concluded
that they remained independent and effective for the purposes of the
2023 year end. As a result, the Committee recommended to the
Board that PwC should be re-appointed as auditor at the next AGM.
Audit services
Audit-related
assurance services
Non-audit fee work
Total fees
2023
(% of total
fees)
93 %
2 %
5 %
100 %
2023
(£m)
4.0
0.1
0.2
4.3
2022
(% of total
fees)
97 %
3 %
— %
100 %
2022
(£m)
3.8
0.1
0.0
3.9
(v) Non financial reporting
In July 2023, the Committee received a report on ESG assurance,
focusing on a preliminary evaluation of the existing reporting and
control framework in relation to several key strategic ESG metrics.
The objective of the report was to provide the Committee with an
overview of the current and anticipated regulatory landscape and its
impact on Weir, other ESG reporting and assurance obligations and
how the Group intends to meet these requirements. Next steps
were agreed to develop a broader ESG assurance roadmap which the
Committee expect to be further updated on through 2024.
Engagement with external regulators
We are pleased to report that the Financial Reporting Council
(FRC) included extracts from Weir's 2022 Annual Report &
Accounts as examples of good practice in their "Review of
Corporate Reporting" published in November 2023. The first
extract was in relation to scope 3 emissions and the second was
in relation to how we monitor and review the effectiveness of
the Group's risk management and internal control frameworks.
The FRC is committed to improving the quality of corporate
reporting and their publication is intended to set out the FRC’s
view on the attributes of a good annual report and accounts in
order to drive continuous improvement in the quality of reporting.
The FRC’s role is not to verify the information.
Strategic Report
Governance
Financial Statements
Additional Information
Conclusion
The Committee agrees with the
accounting treatment and disclosure of
these items in the Annual Report.
Find out more
See notes 6 and 22 of the Group
Financial Statements
Audit Committee report
continued
Current year matters
Exceptional and adjusting items
The issue
Management exercises judgement on the classification of certain items as exceptional
or adjusting.
Role of the Committee
We have received detailed reporting covering the following exceptional and other adjusting
items:
i.
ii.
overview of acquisition and integration related costs;
the net credit in the year resulting primarily from the reversal of provisions taken in the prior
year in relation to the wind down of our Minerals Russia operations;
iii. details of the costs incurred in relation to the Group’s Performance Excellence
programme which includes costs in relation to lean and capacity optimisation initiatives
across North America, South America and Australia, and costs relating to the transition
to Weir Business Services;
iv. details of the charge in respect of the US subsidiary's asbestos-related liabilities; and
v. disclosure of the amounts and related narrative reporting.
Our work has focused on ensuring that exceptional items met the criteria as such due to their
size, nature and/or frequency, and, other adjusting items met the criteria being legacy items not
relatable to current and ongoing trading.
We reviewed the detail of the net credit in respect of the Minerals Russia business wind down.
Having reviewed this, we are satisfied that the reversal of the inventory and receivables
impairments is appropriate following higher than anticipated recoveries since the provisions
were booked in December 2022, at a time when there was still considerable uncertainty. In
addition, we are comfortable that additional provision was made for new exposures which
emerged in the year. We are satisfied that the additional provision and the credit arising from
reversals of prior year provisions are appropriately reflected as exceptional items, consistent with
the prior year.
We reviewed the charges in respect of the Group's Performance Excellence programme and
confirm we are satisfied with their classification as exceptional items due to size and nature.
Lean and capacity optimisation initiatives include service centre restructuring and the relocation
of various distribution, manufacturing and production activities in North America, Australia and
South America with costs largely related to severance. Costs in relation to Weir Business
Services primarily reflect consulting and other costs associated with the establishment of Weir
Business Services.
We received detailed reporting in respect of the findings and associated financial modelling from
the latest US asbestos-related provision triennial actuarial review. The Committee noted the
continuation of higher claims in the year with these trends also reflected in the updated actuarial
review and resulting in the higher provision at 31 December 2023. The Committee are satisfied
that the charge in the Consolidated Income Statement and its classification as an adjusting item
is appropriate (see provisions section for further details).
We noted the exceptional and adjusting items reflected the way in which we, as members
of the Board, reviewed the performance of the Group and were disclosed appropriately
and consistently.
PwC reviewed all exceptional and adjusting items, testing a sample to supporting documentation
and performing a detailed review of the latest US asbestos-related provision triennial actuarial
review and associated financial modelling. Discussions were held with management to
understand and challenge the assumptions and judgements, most notably with the US asbestos-
related provision and Performance Excellence costs. PwC assessed the appropriateness of
classification of all items as exceptional or adjusting items and confirmed the treatment and
related disclosures were appropriate.
Consideration was also given to the current balance sheet position of all related provisions,
including both new provisions and those remaining from previous years, with management
providing details of the remaining liabilities and expected utilisation.
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Additional Information
Audit Committee report
continued
Current year matters continued
Acquisition accounting for Motion Metrics
The issue
Management exercises judgement on the probability of contingent consideration
becoming payable.
Role of the Committee
We received an update on the assessment of contingent consideration and the related
disclosures in the financial statements displayed in note 14.
We considered the treatment of contingent consideration and agreed with the decision
to continue to record this as nil and reassess at the next balance sheet date in light of
ongoing performance.
PwC concurred with the treatment.
Conclusion
The Committee agrees with the
conclusion reached on Motion Metrics
contingent consideration in this
Annual Report.
Acquisition accounting for Carriere Industrial Supply
The issue
Management exercises judgement on the type of intangible assets acquired and estimates are
made of the fair value of all assets and liabilities.
Role of the Committee
We received a summary report from management which outlined:
i.
the finalisation of the opening balance sheet required no adjustment to be made to the fair
values reported in the 2022 Annual Report;
ii.
the movements in deferred consideration in the year; and
iii.
the related disclosures in the financial statements displayed in note 14.
We considered the finalisation of the opening balance sheet and movements in deferred
consideration and agree with the accounting for these. We received confirmation from PwC that
management’s assumptions and calculations were appropriate.
Conclusion
The Committee agrees with the
finalisation of the Carriere Industrial
Supply Limited acquisition accounting
and related disclosures in this
Annual Report.
Acquisition accounting for Sentiantechnologies AB (SentianAI)
The issue
Management exercises judgement on the type of intangible assets acquired and estimates are
made of the fair value of all assets and liabilities.
Role of the Committee
We received a summary report from management which outlined:
Conclusion
The Committee agrees with the
provisional fair values and related
disclosure of the SentianAI acquisition
in this Annual Report including the
contingent consideration.
i.
ii.
iii.
the provisional fair values;
the consideration paid and deferred consideration payable;
the contingent consideration arrangements as outlined in the share purchase agreement;
and
iv.
the related disclosures in the financial statements displayed in note 14.
We reviewed the provisional fair values, noting these are subject to finalisation within 12 months
of acquisition. We considered the treatment of contingent consideration and agreed with the
decision to record this as nil and reassess at the next balance sheet date in light of ongoing
performance.
PwC concurred with the treatment.
Find out more
See note 14 of the Group Financial Statements
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Additional Information
Audit Committee report
continued
Recurring agenda items
Impairment
The issue
Management undertakes an annual detailed, formal impairment review of goodwill and other
intangible assets, with judgements made on the relevant Cash Generating Units (CGUs) and
estimates of available headroom.
Role of the Committee
The Group has two CGUs: Minerals and ESCO. The goodwill and other intangibles assets arising
from the acquisition of SentianAI have been included within the Minerals CGU. The purchase
price is considered to reflect the fair value of the assets and therefore the addition to the
Minerals CGU is considered to have neutral impact on the impairment analysis.
The most significant estimates are in setting the assumptions underpinning the calculation of
the value in use of the CGUs. We specifically reviewed:
i.
the achievability of the long-term business plan numbers and macroeconomic assumptions
underlying the valuation process; and
ii.
long-term growth rates and discount rates used in the cash flow models for the CGUs.
Business plans and budgets were Board-approved and underpin the cash flow forecasts.
We noted that the impairment testing results for both CGUs produce significant headroom
above carrying value for each and, as such, no sensitivity analysis was required. We discussed
management's approach, the underlying plans which form the basis of the impairment review
and the assumptions in relation to long-term growth and discount rates. We concluded the
methodology and rates applied to be consistent and appropriate. We also reviewed the
disclosures in the financial statements and the related narrative.
Further to their work benchmarking management's assumptions against their independently
determined ranges and challenging underlying business plans, we also received confirmation
from PwC that they are in agreement with management’s conclusions.
Conclusion
We are satisfied that the impairment
analysis supports the carrying value
of the underlying assets in the CGUs
and that no sensitivity disclosures
are required.
Find out more
See note 15 of the Group Financial Statements
Inventory valuation
The issue
Management applies estimates on inventory valuation and provisioning.
Role of the Committee
Given the significant investment in inventory, and being cognisant of the impact of commodity
cycles, this remains a judgement for specific consideration. Reporting has been received from
management on the business drivers behind movements in both gross inventory and the related
slow-moving and obsolete provision.
Conclusion
Based on the information provided, the
Committee concluded that
management action had been effective
and that the level of provisioning
appeared adequate.
Find out more
See note 17 of the Group Financial Statements
Pensions
The issue
The valuation of pension liabilities can be materially affected by the assumptions utilised by
management on areas such as discount and inflation rates.
Role of the Committee
We received details of the key assumptions underpinning the valuation, taking assurance from
the fact that external advice had been taken by the Company and that PwC had benchmarked
these assumptions to their own internal ranges and consider them appropriate.
We noted the UK Main Scheme completed a further pensioner buy-in during the year, the
accounting impact of which was not material but importantly this provided further de-risking of
the scheme. We noted that PwC reduced the audit risk for the valuation of pension assets from
significant in the prior year to normal for the current year following this buy-in transaction.
We noted the overall pension surplus reduced in the year primarily due to changes in market
conditions impacting the financial assumptions.
The Committee are satisfied with the recognition of the asset on the Consolidated Balance
Sheet. PwC concurred with this treatment.
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Conclusion
The Committee is satisfied with the
assumptions and related pension
disclosures, including the
appropriateness of continuing to
recognise an asset in respect of the UK
Main Scheme.
Find out more
See note 24 of the Group Financial Statements
Strategic Report
Governance
Financial Statements
Additional Information
Conclusion
We are satisfied that the current
provisioning levels and approach are
appropriate, as is the recognition of an
insurance asset in relation to the US
asbestos-related provision.
We have reviewed the disclosures with
respect to the US asbestos-related
provision, including sensitivity analysis
and are satisfied with the disclosures.
Find out more
See note 22 of the Group Financial Statements
Audit Committee report
continued
Recurring agenda items
Provisions
The issue
Significant balance sheet provisions are underpinned by management’s key judgements
on obligating events and timeframes over which a reliable estimate for provision values
can be made.
Role of the Committee
As mentioned in the ‘Exceptional and adjusting items’ section above, we received detailed
reporting in respect of the US asbestos-related provision and corresponding insurance asset.
This included actual claims experience, the US asbestos-related provision planned triennial
actuarial update undertaken in 2023 and the associated updated financial modelling, the results
of which have led to an increase in the provision in the year and a reduction in the corresponding
insurance asset. The Committee’s focus was centred on gaining an understanding of:
i.
ii.
iii.
iv.
v.
actual claims and settlement data in the year;
revised claims projections and estimated future settlement rates and values;
their relation to the assumptions that underpin the discounted cash flow model;
the period over which the liability can be reasonably estimated;
the position with regard to availability of insurance cover; and
vi.
the adequacy and transparency of the disclosures in note 22.
This reporting confirmed the 2023 claims experience continued to trend higher than that
modelled as part of the 2020 triennial actuarial review. Average settlement values have remained
broadly stable for Mesothelioma cases and lower for Lung Cancer cases. However, settlement
rates were slightly higher than that modelled for Mesothelioma and slightly lower for Lung
cases. The Committee noted these trends were reflected in the updated triennial actuarial
review, as well as the lengthening of the industry standard epidemiological decay model,
resulting in an overall increase in the provision of £23.5m.
The reporting also considered the insurance coverage and confirmed that, based on the updated
financial modelling, this is now expected to be sufficient to meet settlement and associated
costs until early to mid 2025. The insurance asset reduced to £14.9m at 31 December 2023
(2022: £32.0m).
The Committee considered the ongoing appropriateness of basing the provision on ten years of
projected claims (16 years for cash flows) and concluded it continues to be appropriate due to
the inherent uncertainty resulting from the changing nature of the US litigation environment.
Taking the observed claims experience and updated triennial actuarial review under
consideration and having discussed and challenged management assumptions and judgements
in detail, the Committee are satisfied with the overall level of provisioning, the related insurance
asset and the charge to the Consolidated Income Statement. A charge of £43.2m has been
recognised in the Consolidated Income Statement and a net liability on the Consolidated Balance
Sheet of £61.3m (2022: £20.7m).
The Committee also carefully reviewed the disclosures in the Annual Report, including the
sensitivity analysis, and are comfortable that the disclosures presented by management are
appropriate, particularly in light of continued inherent uncertainty in this area.
PwC's work in this area included a review of current year experience, the latest triennial actuarial
review, management's updated financial model and the resulting impact on the financial
statements. PwC provided confirmation that management’s assumptions were reasonable and
disclosures were appropriate.
With regard to other provisions (other than inventory), we received details of the nature of each
provision and explanations of the key movements between the opening and closing balances.
The Committee are satisfied with the accounting treatment and related disclosures in respect of
other provisions in the financial statements.
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Additional Information
Conclusion
Based on the information reviewed, we
are satisfied that the tax charge and
provisioning presented in these
financial statements, including the
recognition of the DTA is appropriate.
Find out more
See notes 8 and 23 of the Group Financial
Statements
Audit Committee report
continued
Recurring agenda items continued
Tax charge and provisioning
The issue
The tax position is complex, with a number of international jurisdictions requiring management’s
judgement with regard to effective tax rates, tax compliance and tax provisioning.
Role of the Committee
The Committee receives a detailed report every six months, which covers the following
key areas:
i.
ii.
iii.
status of significant ongoing enquiries and tax audits with local tax authorities;
the Group’s effective tax rate for the current year; and
the level of provisioning for known and potential liabilities, including significant movements
on the prior period.
The Committee also receives an annual presentation on tax strategy and risk from the Group
Head of Tax.
In recent years significant tax focus has been in respect of certain balance sheet deferred tax
assets (DTA) which arose from the disposal of the Oil & Gas Division and which would remain
available to the Group to offset future US taxable income of the continuing operations. The
recognition of these assets in the future would depend on the level of future US profitability and
the US tax law in force at that point in time.
The Committee were updated on the latest DTA modelling undertaken, which was based on the
Group’s latest Strategic Plan to forecast levels of future US group taxable income over a ten-year
period. This concluded that it continued to remain appropriate to recognise the net DTA, which
amounted to US$76.6m (£60.0m) at 31 December 2023. A key judgement in arriving at the
supportable net DTA is the Group’s current strategy of deferring the cash settlement of intra-
group interest in respect of internal US loan financing. The Group will continue to monitor the US
group’s levels of taxable income and performance against the modelling undertaken and current
assumptions around interest payment deferral, together with the impact of any reforms to the
US tax code, in order to evaluate the appropriate ongoing level of balance sheet DTA in
future periods.
The Committee were also updated on the Pillar 2 Global Minimum Tax rules and the associated
impact assessment on the Group as well as the related disclosures in the financial statements.
Having considered the current year tax charge and provisions, the Committee are satisfied with
the appropriateness of these including the continued DTA recognition. The Committee also takes
comfort from the work done and conclusions reached by PwC in this area. PwC concurred with
the appropriateness of the tax accounting including the continued DTA recognition.
Fair, balanced and understandable
The issue
The Board is required to state that the Group’s external reporting is fair, balanced and
understandable. The Committee is requested by the Board to provide advice to support this.
Conclusion
The successful completion of this work
has been reported to the Board.
Role of the Committee
The Committee received a report from management summarising the detailed approach that had
been taken to ensure that the Group’s external reporting is fair, balanced and understandable.
This covered, but was not limited to, the following:
i.
involvement of a cross section of management across the organisation during the
preparation of the external reporting, including the Group Executive, Divisional VPs of
Finance, Group Communications, Sustainability, Group Finance (including Group Tax and
Group Treasury) and Company Secretariat;
ii.
input from external advisers, including Company brokers and public relations agency;
iii. use of disclosure checklists for Corporate Governance and financial statement reporting;
iv.
regular research to identify emerging practice and guidance from relevant regulatory bodies;
v.
regular meetings involving the key contributors to the document, during which specific
consideration was given to the fair, balanced and understandable assertion; and
vi. use of four ‘cold’ readers; three employees independent of the preparation process
(including two members of the Senior Management group) and an external, independent
proofreader.
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Additional Information
Audit Committee report
continued
Recurring agenda items continued
Going concern
The issue
The Committee’s role, as delegated by the Board, is to carry out an assessment of the adoption
of the going concern basis of accounting and report to the Board accordingly.
Role of the Committee
We fulfilled our responsibilities in this area through the review and discussion of reporting
received from management, which covered the following areas:
Conclusion
The successful completion of this work
has been reported to the Board. The
Group’s statement on going concern is
included on page 136.
i.
ii.
iii.
iv.
assessment of borrowing facilities available to the Group;
review of budget and latest forecast information, including debt covenants, and associated
financial modelling;
liquidity and credit risk; and
the existence of contingent liabilities.
When considering going concern, we specifically noted the Group completed the issue of
£300m five-year Sustainability-Linked Notes in June 2023 and exercised the option to extend
its US$800m Revolving Credit Facility (RCF) by one year to April 2028. The Committee also
noted the Group reduced its RCF to US$600m in February 2024. Following these actions,
the Committee noted the Group retained significant levels of liquidity over an extended
maturity profile.
We also reviewed the outputs from financial modelling of future cash flows and the reverse
stress testing performed in addition to the base modelling. This stress testing focused on the
level of downside risk which would be required for the Group to breach its current lending
facilities and related financial covenants. The review indicated that the Group continues to have
sufficient headroom on both lending facilities and related financial covenants. The circumstances
which would lead to a breach are not considered plausible.
We note the net debt to EBITDA on a lender covenant basis improved to 1.1 times and is in line
with the Group's capital allocation policy. We note this is also significantly below the lender
covenant of 3.5 times.
Finally, we note the work performed by PwC in this area and their conclusion that the Directors’
use of the going concern basis of accounting in the preparation of the financial statements
is appropriate.
Viability statement
The issue
The Board approves the period of assessment, the stress testing scenarios to be modelled and
the basis of financial modelling with respect to the Viability statement. The Committee’s role,
as delegated by the Board, is to review the output of the modelling underpinning the Viability
statement and report to the Board accordingly.
Conclusion
The successful completion of this work
has been reported to the Board. The
Group’s Viability Statement is reported
on page 70.
Role of the Committee
We fulfilled our responsibilities in this area through the review and discussion of reporting
received from management, which covered the following areas:
i.
ii.
overview of the construct of the financial model and base case data underpinning the
sensitivity and stress-test scenarios;
results of financial modelling which reflected the crystallisation of those principal risks
identified by the Board as having the greatest potential impact on the Group’s viability, both
individually and when taken together in a severe but plausible stress-test scenario;
iii. extent of mitigating actions included in the financial modelling, relative to the population of
such actions that had been identified as within the control of management and the Board;
and
iv. banking covenant calculations and assessment of facility headroom in each of the downside
and stress-test scenarios.
Notwithstanding the opportunities that climate change presents to the business, we noted the
specific consideration of climate change downside risks in the Group’s viability modelling.
The Committee also received confirmation from PwC that they considered management’s
assessment of the Group’s longer-term viability was consistent with the financial statements and
their knowledge and understanding of the Group.
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Additional Information
Directors’ remuneration report
Dear Shareholder,
I am pleased to introduce our
Directors’ Remuneration Report
for the year ended 31 December
2023. This is my first report as
Chair of the Remuneration
Committee, having taken over the
role in December 2023.
I would like to thank Clare Chapman for her significant contribution
during her time as Chair of the Remuneration Committee and I am
very much looking forward to serving you in this new role.
2023 highlights
• Consideration of wider workforce remuneration themes, including
the impact of global inflation and the associated cost of living, pay
equity and fairness, and the feedback received from employees
following the inclusion for the first time of a specific reward
question in our annual employee engagement survey.
• Review and approval of remuneration decisions with regard to the
recruitment of the new Chief Financial Officer.
• Determining the implementation of the Directors’ Remuneration
Policy in 2024, including the continued approach to ‘windfall gains’
in relation to the third and fourth tranches of the 2020 restricted
share award vesting in 2024 and 2025.
Areas of focus 2024
• Continued focus on pay for performance and Executive
remuneration considerate of the wider stakeholder experience,
including Shareholders and employees.
• In line with the normal three-year renewal cycle, detailed review of
our current Executive remuneration arrangements to ensure they
continue to appropriately support our strategy ahead of the
Directors’ Remuneration Policy being presented to Shareholders
for approval at the 2025 AGM.
• Continuing to positively influence the ‘Fair Reward’ agenda in
relation to wider workforce remuneration, including i) actions in
response to what we are learning from the employee voice and ii)
oversight of Company initiatives which are related to pay equity
and fairness.
I would like to thank Shareholders for their support of our Directors’
Remuneration Report at the 2023 AGM. Our current Directors’
Remuneration Policy, approved by Shareholders in April 2022,
continues to support the Group’s strategic ambitions and aligns with
market best practice. In keeping with the normal three-year renewal
cycle, the Committee will spend time in 2024 carefully reviewing the
current policy, ahead of it next being presented to Shareholders for
approval at the 2025 AGM.
We continue to experience unprecedented and unpredictable
geographic, economic, political and societal events on the world
stage. Given the global footprint of Weir operating in over 50
countries, most of our employees are affected by these issues in
some way. It is against this backdrop that I want to recognise
another year of tremendous contribution from our employees, who
have played a pivotal role in delivering for our customers and which
in turn has been a key contributory factor in the achievement of a
strong set of business results. In particular, we recognise the cost of
living challenges being faced by many of our employees and
therefore in 2023 we significantly strengthened our salary review
Penny Freer
Chair of the Remuneration Committee
Role of the Committee
The Remuneration Committee is responsible for determining
the remuneration policy for the Chair of the Company, the
Executive Directors and the members of the Group Executive.
The Directors’ Remuneration Policy is designed to reflect best
practice, align with our purpose and values, incentivise
performance and delivery of strategy, and attract and retain
senior talent in a competitive labour market. The Committee
actively listens to stakeholders in its decision-making process,
including the voice of employees and our Shareholders. It also
considers wider all-employee remuneration items, such as pay
equity and fairness, employee benefit changes and employee
share plan design.
Meeting attendance
Members
Penny Freer (Chair)1
Clare Chapman1
Dame Nicola Brewer
Ben Magara
Stephen Young
Attendance
2/2
4/4
4/4
4/4
4/4
1. With effect from 23 October 2023, Penny Freer was appointed as a member of
the Remuneration Committee and with effect from 31 December 2023 succeeded
Clare Chapman as Chair of the Committee, when Clare stepped down from the
Board.
Find out more
The full responsibilities of the Remuneration Committee are set out in its Terms of
Reference, which are reviewed annually and available at:
https://www.global.weir/investors/corporate-governance/board-committees
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Strategic Report
Strategic Report
Governance
Governance
Financial Statements
Financial Statements
Additional Information
Additional Information
Directors’ remuneration report
Directors’ remuneration report
continued
continued
budgets globally relative to recent prior years. We have also taken a
budgets globally relative to recent prior years. We have also taken a
number of other actions to promote ‘Fair Reward’ for our employees
number of other actions to promote ‘Fair Reward’ for our employees
and you can read more about these on page 112.
and you can read more about these on page 112.
Our employee engagement score continues to be in the top quartile
Our employee engagement score continues to be in the top quartile
of the manufacturing sector. The new inclusion of a specific reward
of the manufacturing sector. The new inclusion of a specific reward
question in both the 2022 and 2023 employee engagement surveys
question in both the 2022 and 2023 employee engagement surveys
means we have a source of rich and constructive comments from
means we have a source of rich and constructive comments from
our employees about what we are doing well and what we can
our employees about what we are doing well and what we can
improve, as well as the ability to identify trends and develop more
improve, as well as the ability to identify trends and develop more
meaningful medium and long-term insights.
meaningful medium and long-term insights.
The Committee recognises that it has an important role to play in
The Committee recognises that it has an important role to play in
responding to the voice of our employees and ensuring that
responding to the voice of our employees and ensuring that
remuneration within Weir is attractive, retentive and aligned to long-
remuneration within Weir is attractive, retentive and aligned to long-
term business strategy. Accordingly, we continue to strengthen the
term business strategy. Accordingly, we continue to strengthen the
insight on wider remuneration matters which is provided to the
insight on wider remuneration matters which is provided to the
Committee and which in turn informs decision making.
Committee and which in turn informs decision making.
Performance context
Performance context
We have delivered strong performance in 2023. Revenues are 9%
We have delivered strong performance in 2023. Revenues are 9%
higher than last year on a constant currency basis and adjusted profit
higher than last year on a constant currency basis and adjusted profit
before tax is £411m, increasing by 18% from 2022. Adjusted
before tax is £411m, increasing by 18% from 2022. Adjusted
operating margins increased to 17.4%, exceeding our 2023 target of
operating margins increased to 17.4%, exceeding our 2023 target of
17%. Free operating cash conversion, which measures the Group's
17%. Free operating cash conversion, which measures the Group's
efficiency at generating cash from its operating results, had an
efficiency at generating cash from its operating results, had an
outcome in 2023 of 85%, firmly within our 2023 target range of
outcome in 2023 of 85%, firmly within our 2023 target range of
80%-90%. We continue to take advantage of the supportive
80%-90%. We continue to take advantage of the supportive
conditions in mining markets and you can read more about our
conditions in mining markets and you can read more about our
financial performance in the Financial Review on pages 38-41.
financial performance in the Financial Review on pages 38-41.
We have also made good progress against our strategic initiatives,
We have also made good progress against our strategic initiatives,
aligned to our We are Weir framework:
aligned to our We are Weir framework:
• Our employee engagement score remains in the top 25% of the
• Our employee engagement score remains in the top 25% of the
manufacturing benchmark group.
manufacturing benchmark group.
• We have achieved strong momentum in our Performance
• We have achieved strong momentum in our Performance
Excellence transformation programme, with initial cost savings
Excellence transformation programme, with initial cost savings
realised and new opportunities identified which means we have
realised and new opportunities identified which means we have
doubled our initial cost saving target from £30m to £60m by 2026.
doubled our initial cost saving target from £30m to £60m by 2026.
• We maintained a world class safety record in 2023, with a Total
• We maintained a world class safety record in 2023, with a Total
Incident Rate (TIR) of 0.42. We continue to place significant focus
Incident Rate (TIR) of 0.42. We continue to place significant focus
on our Zero Harm Behaviours Framework as we strive for a zero
on our Zero Harm Behaviours Framework as we strive for a zero
harm workplace.
harm workplace.
• Our continued focus is on sustainability and transition to net zero.
• Our continued focus is on sustainability and transition to net zero.
The inclusion of standalone ESG measures from 2022 onwards in
The inclusion of standalone ESG measures from 2022 onwards in
our annual bonus plan transparently illustrates our priorities and
our annual bonus plan transparently illustrates our priorities and
performance in this critical area, including development of
performance in this critical area, including development of
technology which uses less resources, reducing our own
technology which uses less resources, reducing our own
emissions aligned to SBTi, and working closely with customers to
emissions aligned to SBTi, and working closely with customers to
provide new and efficient solutions.
provide new and efficient solutions.
More detail on progress against our strategic initiatives and delivery
More detail on progress against our strategic initiatives and delivery
against related 2023 targets can be found on pages 124-125.
against related 2023 targets can be found on pages 124-125.
Reflecting the high levels of confidence in our strategy and future
Reflecting the high levels of confidence in our strategy and future
prospects, the Board is recommending a final dividend of 20.8p per
prospects, the Board is recommending a final dividend of 20.8p per
share, resulting in a total dividend of 38.6p for the year and which is
share, resulting in a total dividend of 38.6p for the year and which is
33% of adjusted EPS for the period. This is in line with our capital
33% of adjusted EPS for the period. This is in line with our capital
allocation policy of returning a third of adjusted EPS through
allocation policy of returning a third of adjusted EPS through
the cycle.
the cycle.
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110
110
2023 outcomes
2023 outcomes
The remuneration outcomes for the Executive Directors during 2023
The remuneration outcomes for the Executive Directors during 2023
reflect the strong business performance achieved in the year. The
reflect the strong business performance achieved in the year. The
Committee also took into account the wider stakeholder experience
Committee also took into account the wider stakeholder experience
when determining remuneration outcomes.
when determining remuneration outcomes.
2023 annual bonus outcome
2023 annual bonus outcome
There was no change to our bonus framework for 2023. 60% of the
There was no change to our bonus framework for 2023. 60% of the
bonus was based on financial measures, being Group PBTA (40%
bonus was based on financial measures, being Group PBTA (40%
weighting) and cash conversion (20% weighting). The remaining
weighting) and cash conversion (20% weighting). The remaining
40% was based on non-financial elements, being strategic measures
40% was based on non-financial elements, being strategic measures
and ESG measures (20% weighting each), directly aligned to our We
and ESG measures (20% weighting each), directly aligned to our We
are Weir strategic framework.
are Weir strategic framework.
For 2023, the Committee awarded a bonus of 85.5% of maximum
For 2023, the Committee awarded a bonus of 85.5% of maximum
opportunity, being 128.3% of salary for the CEO. In line with our
opportunity, being 128.3% of salary for the CEO. In line with our
remuneration policy, 30% of this bonus will be deferred into shares
remuneration policy, 30% of this bonus will be deferred into shares
for three years.
for three years.
Full details of achievement against targets are provided on page 123
Full details of achievement against targets are provided on page 123
and reflect the strong progress we have made in the year as outlined
and reflect the strong progress we have made in the year as outlined
earlier in my letter.
earlier in my letter.
Restricted share awards vesting in 2024
Restricted share awards vesting in 2024
The third tranche of the 2020 restricted share award is due to vest in
The third tranche of the 2020 restricted share award is due to vest in
April 2024. The Committee made a downwards adjustment to the
April 2024. The Committee made a downwards adjustment to the
first two tranches of the award vesting in April 2022 and April 2023
first two tranches of the award vesting in April 2022 and April 2023
to take into account the market volatility at the time of grant and
to take into account the market volatility at the time of grant and
concern around the potential for perceived ‘windfall gains’. The
concern around the potential for perceived ‘windfall gains’. The
Committee discussed the issue of ‘windfall gains’ again in advance
Committee discussed the issue of ‘windfall gains’ again in advance
of the third tranche vesting, and in light of Weir’s continued strong
of the third tranche vesting, and in light of Weir’s continued strong
performance and evolving market practice.
performance and evolving market practice.
In considering the matter, the Committee recognised that a number
In considering the matter, the Committee recognised that a number
of the business context and share price reference points that shaped
of the business context and share price reference points that shaped
the decision in respect of the first two tranches of the award
the decision in respect of the first two tranches of the award
continue to remain relevant. However, the Committee also
continue to remain relevant. However, the Committee also
recognised that Weir’s business performance has been strong in the
recognised that Weir’s business performance has been strong in the
period since grant, and in particular over the course of 2023. Some of
period since grant, and in particular over the course of 2023. Some of
the key business performance highlights in the period since grant are
the key business performance highlights in the period since grant are
as follows:
as follows:
• The management team has delivered the value-accreting Oil & Gas
• The management team has delivered the value-accreting Oil & Gas
disposal and the successful acquisition of Motion Metrics. They
disposal and the successful acquisition of Motion Metrics. They
have also launched our Performance Excellence programme, with
have also launched our Performance Excellence programme, with
2023 performance exceeding our 17% operating margin target,
2023 performance exceeding our 17% operating margin target,
and our free operating cash conversion of 85% within our target of
and our free operating cash conversion of 85% within our target of
80% to 90%.
80% to 90%.
• We re-joined the FTSE 100 index in December 2022 and have
• We re-joined the FTSE 100 index in December 2022 and have
sustained this position.
sustained this position.
• Our share price has increased by around 130% in the period
• Our share price has increased by around 130% in the period
since grant, compared to the FTSE 100 increase of around 34%.
since grant, compared to the FTSE 100 increase of around 34%.
Our share price has also outperformed almost all of our sector
Our share price has also outperformed almost all of our sector
peers over this time, outperforming the average increase by our
peers over this time, outperforming the average increase by our
mining peers by around 30% and the average increase by our
mining peers by around 30% and the average increase by our
UK industrial peers by around 90%. The Board believes
UK industrial peers by around 90%. The Board believes
this differentiated performance is the result of the continued
this differentiated performance is the result of the continued
successful execution of our strategy by a strong
successful execution of our strategy by a strong
management team.
management team.
• We resumed our dividend in 2021, in line with our capital allocation
• We resumed our dividend in 2021, in line with our capital allocation
policy, and since then we have returned over £192m to our
policy, and since then we have returned over £192m to our
Shareholders in the period to 31 December 2023.
Shareholders in the period to 31 December 2023.
• Management have also supported our colleagues throughout this
• Management have also supported our colleagues throughout this
time, in line with the values embedded in our We are Weir
time, in line with the values embedded in our We are Weir
framework. We have provided one-off payments to recognise the
framework. We have provided one-off payments to recognise the
challenges faced as a result of Covid-19, quarterly and mid-yearly
challenges faced as a result of Covid-19, quarterly and mid-yearly
salary increases for employees in high inflationary environments,
salary increases for employees in high inflationary environments,
and we have made awards of free shares under our Weir
and we have made awards of free shares under our Weir
ShareBuilder plan to ensure all our employees can share in our
ShareBuilder plan to ensure all our employees can share in our
long-term success.
long-term success.
Strategic Report
Governance
Financial Statements
Additional Information
Directors’ remuneration report
continued
Taking all of the above into account, the Committee has determined
that the 15% downward adjustment agreed for the first two tranches
of the award should be adjusted to 10% for the third tranche of the
award, to reflect the strong business performance achieved in the
year and to ensure that management are appropriately rewarded for
their contribution to this performance. The intention is that this level
of reduction will also apply to the fourth tranche of the award vesting
in April 2025, to give an aggregate reduction to the 2020 restricted
share award of 12.5%.
The scaled back third tranche of the 2020 restricted share award and
the relevant tranches of the 2019 and 2021 restricted share awards
will vest in April 2024 and be released following a further two-year
holding period.
Board changes
Earlier in 2023, John Heasley informed the Board of his decision to
step down from his role as CFO to take up a new role elsewhere,
and resigned from the Board on 30 November 2023. His departure
terms are consistent with our remuneration policy for resignations.
His unvested restricted share awards lapsed and he will not receive
an annual bonus payment in respect of 2023. Full details of his
departure terms are set out on page 127.
As announced in November 2023, Brian Puffer will join as our new
CFO from 1 March 2024. Brian’s remuneration arrangements have
been set in accordance with our remuneration policy and reflect his
calibre as an accomplished finance leader. His salary has been set at
£500,000, with pension, benefits and incentive opportunities in line
with our current approach for the CFO. Brian will also receive Weir
share awards to compensate him for the share awards forfeited on
leaving his previous employer. These awards are being made on a
like-for-like basis to reflect the timing and value of the forfeited
awards from the previous employer. More detail in respect of these
awards can be found on page 126.
2024 decisions
Salaries
With effect from April 2024, the salary for the CEO will increase by
4% to £829,000. This is in line with the average increase for UK
employees.
Pension contributions
Executive Directors will continue to receive a pension provision
of 12% of salary, in line with the rate available to the wider
UK workforce.
Annual bonus
The maximum bonus opportunity will remain at 150% of salary
for the CEO and 125% of salary for the CFO, in line with the
remuneration policy.
The targets for 2024 will be fully disclosed in next year’s report,
although where the information is not deemed to be commercially
sensitive, the Committee has provided prospective disclosure of the
2024 strategic and ESG targets in this year’s report. The Committee
continues to place strong emphasis on developing the strategic
measures to focus on output based metrics and, where possible, to
ensure that results can be benchmarked externally.
The strategic measures also form part of the annual bonus measures
for the bonus-eligible wider workforce, creating strong alignment and
focus across the company.
Restricted share awards
The Committee is confident that the introduction of restricted share
awards to Executives and senior leaders since 2018 has been a key
enabler to driving long-term orientation, value creation and alignment
with Shareholders. New restricted share awards will be granted to
the CEO and CFO in April 2024, with no change to the award sizes
(CEO: 125% of salary; CFO: 100% of salary) or performance
underpins from the 2023 awards. Further detail can be found on page
116. The awards will vest after three years and be subject to a
holding period until five years from grant.
Looking ahead
In line with the normal three-year renewal cycle, our Directors’
Remuneration Policy will be presented to Shareholders for approval
at the 2025 AGM. During 2024 we will therefore be undertaking a
detailed review of our current remuneration arrangements to ensure
that they continue to appropriately support our reward principles and
the delivery of our We are Weir strategy.
The Remuneration Committee has engaged extensively with
Shareholders over recent years and I look forward to continuing
this transparent and open dialogue as we consider our 2025
Directors’ Remuneration Policy. We very much value the input of
our major Shareholders.
This year the Remuneration Committee has again sought to take a
simple and responsible approach to Executive pay, and decisions in
the year have been made taking into account the experience of our
employees, Shareholders and key stakeholders in the period. The
Committee appreciated the strong endorsement of last year’s
Directors’ Remuneration Report and we look forward to receiving
Shareholder support again at the 2024 AGM.
There is no proposed change to the bonus measures and weightings
which continue to be aligned to our reward principles and the
delivery of our We are Weir strategy:
Penny Freer
Chair of the Remuneration Committee
29 February 2024
• 40% PBTA;
• 20% cash conversion;
• 20% strategic measures; and
• 20% ESG measures.
The 2024 strategic measures will continue to focus on our long-term
goals in areas such as innovation and technology and will also include
ongoing measurement of progress against our Performance
Excellence programme. The ESG measures will continue to focus on
key people priorities, such as TIR and diversity as well as reducing
both our own and our customers' environmental impacts.
The Weir Group PLC Annual Report and Financial Statements 2023
111
Strategic Report
Governance
Financial Statements
Additional Information
Fair reward
Fair reward for employees
We believe in fair reward for all of our employees, regardless of
where in the world they live or which part of our business they work
in. This is reflected in our approach to reward as follows:
• Simple, transparent, effective and linked to business success.
• Delivered in a way that rewards fairly and appropriately in line
with our culture.
• Enables attraction and retention, establishing us as an employer
of choice.
• Rewards individual contribution whilst incorporating a focus on
team performance to create collective accountability.
• Brings focus to sustainable improvement in the underlying
business through linkage to our strategic framework.
• Encourages and enables long-term share ownership for all
employees, rewarding long-term value creation.
Over the last 12 months and going into 2024, we have continued to
progress a number of initiatives that are linked to the above and the
delivery of fair reward.
Supporting our employees with the cost of living
Our global pay award budgets for the annual salary review effective
March 2023 were significantly increased compared to the equivalent
2022 budgets as we sought to help our employees with the cost of
living challenges created by global inflation. We have continued to
take specific action in Turkey in recognition of the particularly high-
inflation environment, with additional salary progression
implemented during the year beyond the normal annual cyclical
award. In Latin America, where the majority of our employees are
covered by collective arrangements, we have continued to progress
salary growth during 2023 in line with the higher inflation rates.
Looking ahead to 2024, whilst we expect our global annual salary
review budgets to be lower than those implemented in 2023, they
will continue to be above the more normalised levels which we had
typically operated in prior years, recognising that in many countries in
which we operate, inflation and therefore the cost of living continues
to be an issue.
Listening to the voice of the employee
In late 2022, we included a specific reward question in our global
employee engagement survey for the first time, receiving the results
from this in early 2023. We were delighted to achieve a scoring
response which placed us in the top quartile of the manufacturing
sector for this particular metric, with the scores augmented by over
2,400 comments left by individual employees in response to the
question, providing a rich source of feedback and insight. Following
comprehensive analysis of the data and comments, we have taken
action across a number of global locations in response through local
market benchmarking exercises and benefits enhancements. The
same reward question was included again in the very latest
employee engagement survey run later in 2023, and we were
pleased to see that the results remained consistent with that of
2022, retaining our position in the manufacturing sector top quartile.
In addition to the insight received from the annual employee
engagement survey, we continue to provide employees with other
opportunities to provide feedback, for example through our 'Tell the
Board' sessions or the global town halls which are hosted by the
Group Executive. Our Employee Engagement Director is also a
member of the Remuneration Committee which provides natural
opportunity for remuneration matters to be a discussion and
feedback area.
Delivering free shares to employees
In 2019, we launched our global all-employee free shares plan,
ShareBuilder, which allows all of our employees, regardless of role or
geography to become Shareholders in Weir. Since its launch in 2019,
we have made ShareBuilder awards to over 17,000 individual
employees, including in May 2023 when 1,628 new employees with
the required 12 months’ service received the latest award of £300 of
free shares. We are also pleased to see that since beginning making
the awards in 2019, c.70% of current employees who have received
a vested award in that time have retained the free shares they
received from ShareBuilder.
Enhancing our global employee benefits proposition
We have continued to progress our multi-year global benefits
management programme, which allows us to develop and deliver a
more coherent and consistent suite of employee global benefits.
During 2023 we have made a number of enhancements through the
programme, including improvements to life insurance and healthcare
benefits. This has spanned a number of countries and has in part
been informed by the insight which we gained from our reward
question in the global employee engagement survey.
We also increased our maternity leave provision across several
countries following a comprehensive market benchmarking exercise.
This will see a minimum of 12 weeks' fully paid maternity leave
provided to employees in these countries and in 2024 we will further
implement this as a minimum standard globally.
Following the acquisition of Motion Metrics in 2021, we have also
taken steps in 2023 to accelerate the harmonisation of employment
terms for these employees with the wider workforce, which includes
employee benefits.
Our goal is to ensure that our benefits proposition is market
competitive, promotes fairness and equity, leverages Weir’s scale,
and enables attraction and retention of talent.
Operating pay equity and fairness
In the second half of 2023, we entered into a new partnership with
the Fair Wage Network to undertake a global benchmarking exercise
to assess our individual rates of employee pay in every country in
which we operate against the Fair Wage Network's living wage
references for those locations. Good progress has been made during
the second half of 2023, with anonymised data for c.12,000
employees being assessed by the Fair Wage Network. This work
continues into 2024, with our objective to achieve formal certification
in 2024 from the Fair Wage Network as recognition of our fair wage
practices in Weir.
In addition to the new partnership with the Fair Wage Network, we
have also continued with our established practices of undertaking
both gender pay gap and equal pay analysis on a global basis. Our
latest published UK gender pay report can be found on our website
at www.genderpay.weir.
Looking ahead
Looking ahead to 2024, employee benefits and related policy will
continue to be a key area of focus. Building on the 2023
enhancements made to maternity policy, we will consider where
investment can be made in employee benefits and policy which
further strengthens our ability to meet the demands of a modern
workforce and which can also support in the achievement of a
diverse employee population.
We will carry-over some activity from 2023 into 2024 including our
aim to achieve certification from the Fair Wage Network on a global
basis. In 2023 we undertook pilot financial wellbeing education
sessions which we intend to offer across more countries in 2024.
Going forward, the continued regular inclusion of a reward question
in our annual employee engagement survey will also allow us to build
more meaningful data insights and trends over a longer period.
The Weir Group PLC Annual Report and Financial Statements 2023
112
Strategic Report
Governance
Financial Statements
Additional Information
Strategic Report
Governance
Financial Statements
Additional Information
Fair reward
Remuneration at a glance
DIRECTORS’ REMUNERATION POLICY
The key components of our remuneration framework are fixed pay, annual bonus and restricted share awards as set out in the
Remuneration Policy on pages 117-122. Our objective is to appropriately reward the continuous improvement of our value-drivers and the
delivery of sustained value over time.
FIXED PAY
Consists of salary,
pension and benefits
ANNUAL BONUS
Includes a core financial component
and an element based on the delivery
of key objectives aligned to the
strategic framework
Maximum: 150% (CEO)
and 125% (CFO) of salary
30% deferred into shares for three years
RESTRICTED SHARE AWARDS
Encourages substantial long-term share
ownership and increases emphasis on
the creation of long-term value for end
market customers and Shareholders
Award size: 125% (CEO) and
100% (CFO) of salary
Shares vest three years from
grant and are released at year 5.
Vesting subject to underpin
ANNUAL BONUS OUTCOME FOR THE YEAR ENDED 31 DECEMBER 2023
Further details, including information on the performance assessment of the strategic measures and ESG measures are set out on pages
123-125.
Entry
(20%
payable)
Maximum
(100%
payable)
Target
Payout % of
maximum for
each
measure
FY23
Outcome
Weighted
payout %
£359.3m
£393.4m
£427.6m
£442.1m
100.0%
40.0%
PBTA (40% weighting)
(defined as profit before tax and adjusting items from continuing operations)
CASH CONVERSION (20% weighting)
(defined as free operating cash flow as a percentage of adjusted operating profit)
80.3%
85.0%
89.7%
85.3%
62.6%
12.51%
4%
12%
20%
15.38%
76.9%
15.38%
STRATEGIC MEASURES (20% weighting)
ESG MEASURES (20% weighting)
4%
12%
20%
17.64%
88.2%
17.64%
Note
John Heasley received no bonus after resigning on 30 November 2023.
Total
Jon Stanton Actual
85.53%
£1,022,519
2023 CEO SINGLE TOTAL FIGURE OF REMUNERATION
2022
2022
2023
2023
£858,970
£858,970
£912,209
£941,186
£941,186
£1,022,519
£712,252 Total £2,512,408
£712,252 Total £2,512,408
£839,527
Total £2,774,255
£0m
£0.5m
£912,209
£1.0m
£1.5m
£1,022,519
£2.0m
£839,527
£2.5m
Total £2,774,255
£3.0m
£0m
Fixed pay
£0.5m
Annual bonus
£1.0m
Restricted shares
£1.5m
£2.0m
£2.5m
£3.0m
Fair reward for employees
Delivering free shares to employees
We believe in fair reward for all of our employees, regardless of
In 2019, we launched our global all-employee free shares plan,
where in the world they live or which part of our business they work
ShareBuilder, which allows all of our employees, regardless of role or
in. This is reflected in our approach to reward as follows:
geography to become Shareholders in Weir. Since its launch in 2019,
• Simple, transparent, effective and linked to business success.
• Delivered in a way that rewards fairly and appropriately in line
with our culture.
of choice.
• Enables attraction and retention, establishing us as an employer
• Rewards individual contribution whilst incorporating a focus on
team performance to create collective accountability.
• Brings focus to sustainable improvement in the underlying
business through linkage to our strategic framework.
• Encourages and enables long-term share ownership for all
employees, rewarding long-term value creation.
Over the last 12 months and going into 2024, we have continued to
progress a number of initiatives that are linked to the above and the
delivery of fair reward.
Supporting our employees with the cost of living
Our global pay award budgets for the annual salary review effective
March 2023 were significantly increased compared to the equivalent
2022 budgets as we sought to help our employees with the cost of
living challenges created by global inflation. We have continued to
take specific action in Turkey in recognition of the particularly high-
inflation environment, with additional salary progression
implemented during the year beyond the normal annual cyclical
award. In Latin America, where the majority of our employees are
covered by collective arrangements, we have continued to progress
salary growth during 2023 in line with the higher inflation rates.
Looking ahead to 2024, whilst we expect our global annual salary
review budgets to be lower than those implemented in 2023, they
will continue to be above the more normalised levels which we had
typically operated in prior years, recognising that in many countries in
which we operate, inflation and therefore the cost of living continues
to be an issue.
Listening to the voice of the employee
In late 2022, we included a specific reward question in our global
employee engagement survey for the first time, receiving the results
from this in early 2023. We were delighted to achieve a scoring
response which placed us in the top quartile of the manufacturing
sector for this particular metric, with the scores augmented by over
2,400 comments left by individual employees in response to the
question, providing a rich source of feedback and insight. Following
comprehensive analysis of the data and comments, we have taken
action across a number of global locations in response through local
market benchmarking exercises and benefits enhancements. The
same reward question was included again in the very latest
employee engagement survey run later in 2023, and we were
pleased to see that the results remained consistent with that of
2022, retaining our position in the manufacturing sector top quartile.
In addition to the insight received from the annual employee
engagement survey, we continue to provide employees with other
opportunities to provide feedback, for example through our 'Tell the
Board' sessions or the global town halls which are hosted by the
Group Executive. Our Employee Engagement Director is also a
member of the Remuneration Committee which provides natural
opportunity for remuneration matters to be a discussion and
feedback area.
we have made ShareBuilder awards to over 17,000 individual
employees, including in May 2023 when 1,628 new employees with
the required 12 months’ service received the latest award of £300 of
free shares. We are also pleased to see that since beginning making
the awards in 2019, c.70% of current employees who have received
a vested award in that time have retained the free shares they
received from ShareBuilder.
Enhancing our global employee benefits proposition
We have continued to progress our multi-year global benefits
management programme, which allows us to develop and deliver a
more coherent and consistent suite of employee global benefits.
During 2023 we have made a number of enhancements through the
programme, including improvements to life insurance and healthcare
benefits. This has spanned a number of countries and has in part
been informed by the insight which we gained from our reward
question in the global employee engagement survey.
We also increased our maternity leave provision across several
countries following a comprehensive market benchmarking exercise.
This will see a minimum of 12 weeks' fully paid maternity leave
provided to employees in these countries and in 2024 we will further
implement this as a minimum standard globally.
Following the acquisition of Motion Metrics in 2021, we have also
taken steps in 2023 to accelerate the harmonisation of employment
terms for these employees with the wider workforce, which includes
employee benefits.
Our goal is to ensure that our benefits proposition is market
competitive, promotes fairness and equity, leverages Weir’s scale,
and enables attraction and retention of talent.
Operating pay equity and fairness
In the second half of 2023, we entered into a new partnership with
the Fair Wage Network to undertake a global benchmarking exercise
to assess our individual rates of employee pay in every country in
which we operate against the Fair Wage Network's living wage
references for those locations. Good progress has been made during
the second half of 2023, with anonymised data for c.12,000
employees being assessed by the Fair Wage Network. This work
continues into 2024, with our objective to achieve formal certification
in 2024 from the Fair Wage Network as recognition of our fair wage
practices in Weir.
In addition to the new partnership with the Fair Wage Network, we
have also continued with our established practices of undertaking
both gender pay gap and equal pay analysis on a global basis. Our
latest published UK gender pay report can be found on our website
at www.genderpay.weir.
Looking ahead
Looking ahead to 2024, employee benefits and related policy will
continue to be a key area of focus. Building on the 2023
enhancements made to maternity policy, we will consider where
investment can be made in employee benefits and policy which
further strengthens our ability to meet the demands of a modern
workforce and which can also support in the achievement of a
diverse employee population.
We will carry-over some activity from 2023 into 2024 including our
aim to achieve certification from the Fair Wage Network on a global
basis. In 2023 we undertook pilot financial wellbeing education
sessions which we intend to offer across more countries in 2024.
Going forward, the continued regular inclusion of a reward question
in our annual employee engagement survey will also allow us to build
more meaningful data insights and trends over a longer period.
Notes
In 2022 the restricted shares value comprised the third 25% of the 2018 award vesting, the second 25% of the 2019 award vesting and the first 25% of the 2020 award vesting.
The 2023 restricted shares value comprises the fourth and final 25% of the 2018 award vesting, the third 25% of the 2019 award vesting and the second 25% of the 2020 award
vesting. The vesting values from the 2020 award in each of the 2022 and 2023 single figures incorporate the discretionary 15% reduction applied by the Remuneration Committee in
view of ‘windfall gains’, and as disclosed in the 2021 and 2022 Directors’ Remuneration Reports.
EXECUTIVE DIRECTORS’ SHAREHOLDING
EXECUTIVE DIRECTORS’ SHAREHOLDING
CEO
CEO
CFO
CFO
0%
0%
100%
100%
200%
200%
500%
500%
600%
600%
700%
700%
800%
800%
Shareholding requirement
Shareholding requirement
Shareholding requirement
Restricted shares
Annual bonus
300%
400%
Fixed pay
The Weir Group PLC Annual Report and Financial Statements 2023
112
The Weir Group PLC Annual Report and Financial Statements 2023
113
Notes
Shareholdings include interests in unvested restricted share awards which are not subject to performance measures.
The position shown for the CFO is at 30 November 2023 when John Heasley stepped down as CFO and resigned from the Board.
400%
300%
98,523 shares
Shareholding requirement
98,523 shares
318,019 shares
318,019 shares
Strategic Report
Governance
Financial Statements
Additional Information
Directors’ remuneration in 2024
Implementation of remuneration policy in 2024
The table below summarises the key components of our remuneration framework and indicates how we intend to operate the policy in 2024.
Fixed
Salary
Pension
Benefits
Variable
Annual
bonus
Operation
2024 implementation
Fixed remuneration,
which reflects role, skills,
and responsibilities.
• CEO – £829,000
• CFO – £500,000
The 4% increase for the CEO is aligned to the average increase for the wider UK
workforce and will take effect from 1 April 2024. The CFO salary is in accordance
with Brian Puffer's appointment terms, announced on 1 November 2023 and will
take effect from 1 March 2024. The salary level is below the salary for our former
CFO John Heasley, if his salary had been uplifted by 4% in line with the wider UK
workforce at this year's salary review.
No change for 2024. Aligned with wider UK workforce.
Executive Directors
receive pension
contributions of 12%
per annum.
Car allowance, healthcare
and life assurance.
No change for 2024.
Maximum opportunity:
CEO 150% of base salary
CFO 125% of base salary
30% deferred into shares
for three years. Annual
bonus awards will also be
subject to malus and
clawback provisions.
No change to maximum opportunities for 2024. No change to measures and
weightings for 2024 as follows:
• 40% PBTA (defined as profit before tax and adjusting items from continuing
operations)
• 20% Cash conversion (defined as free operating cash flow as a percentage of
adjusted operating profit)
• 20% Strategic measures
• 20% ESG measures
Given their overall commercial sensitivity, underlying targets across the financial
measures will be disclosed in next year’s report provided they are no longer
commercially sensitive at that point. Set out on the following page are details of the
target priorities for 2024 for both the strategic measures and the ESG measures.
Where not commercially sensitive to do so, we have provided prospective
disclosure of the 2024 underlying targets for these. The results of performance
against the targets for all strategic measures and ESG measures will be disclosed
in next year's report.
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Financial Statements
Additional Information
Directors’ remuneration in 2024
continued
Strategic and ESG annual bonus measures 2024
People
Strategic measures:
Target performance:
ESG measures:
Target performance:
Retain our talent.
Voluntary attrition rate of 11%.
Safety Total Incident Rate (TIR).
Improve our TIR to 0.385.
Succession planning.
8% improvement in total number of
succession plans that have at least
one named successor in the
readiness pipeline.
Improve our female gender
diversity.
Maintain our engagement
score in top quartile of
Peakon's Manufacturing
benchmark.
Customer
Maintain position in top quartile
of Peakon’s Manufacturing
benchmark.
Health and wellbeing.
Improve our female gender
diversity across all job bands.
For job bands 1-2, a 1.25%
increase and for job bands 3-5,
a 2.5% increase.
Maintain our Tier 2 ranking and
improve on our 2023 CCLA
Corporate Mental Health
benchmark score.
Strategic measures:
Target performance:
ESG measures:
Execution of top growth
initiatives.
Minerals – £m orders.*
Customer Avoided Emissions.
Target performance:
Tonnes CO2e.*
ESCO - $m orders and number of
specific product conversions/
upgrades.*
Position Weir as a mining
technology solutions partner.
Capture value from new
strategic alliances.
Technology
Specific roadmap milestones.*
Customer water optimisation.
Number of orders.*
Customer waste impact.
Specific milestones for water
optimisation.*
Specific milestones for customer
waste impact.*
Strategic measures:
Target performance:
ESG measures:
Target performance:
Revenue from new products.
£m orders.*
Progress priority R&D projects.
Specific milestones for ETR
themes:*
• Move less rock
• Use less energy
• Use water wisely
• Create less waste
Digitise our current business
model.
Enterprise Technology
Roadmap execution progress.
Number of Synertrex® and Motion
MetricsTM connected sites.*
Progress of R&D portfolio against
Weir specific technology readiness
levels.*
Performance
Strategic measures:
Target performance:
Lean Processes.
Capacity Optimisation.
Functional Transformation.
Process management scores by
Division.*
£m run rate savings (Minerals) and
specific project milestones
(ESCO).*
£m run rate savings (WBS project)
and specific project milestones
(Target Enterprise Architecture).*
* Specific targets will be included in the 2024 Annual Report.
ESG measures:
Reduce scope 1&2 CO2e vs
2019 base aligned to SBTi.
Target performance:
SBTi-aligned absolute reduction.*
ESG data assurance roadmap.
Specific roadmap milestones.*
Further integrate climate risk and
opportunity in strategic planning.
Specific project milestones.*
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Additional Information
Directors’ remuneration in 2024
continued
Restricted share awards Maximum award size:
No change to the award size or vesting schedule for 2024.
Operation
2024 implementation
CEO 125% of base salary
CFO 100% of base salary
Awards subject to a 3-year
vesting period and
subsequent 2-year holding
period. Vesting subject to
the underpin. Prior to
vesting, if any of the
thresholds have not been
met, it would trigger the
Committee to consider
whether a discretionary
reduction was required.
Restricted share awards
will also be subject to
malus and clawback
provisions.
The Remuneration
Committee has the ability
to make adjustment at the
time of grant to address, if
relevant, concerns about
'windfall gains' and taking
into account latest
Shareholder guidance. The
Committee also retains
discretion to review
awards at the point of
vesting, in accordance
with our wider policy and
principle of best practice.
No change to the underpin:
Balance sheet health
Breaching covenants
• No breach of debt covenant or re-negotiation of covenant terms outside of a
normal refinancing cycle
Investor returns
Return on Capital Employed (ROCE)
• Maintain average ROCE over the vesting period above the average Weighted
Average Cost of Capital for that period
Environmental, social and governance (ESG)
Sustainability Roadmap progress
• Awarded a B listing or better by CDP1 through the vesting period in recognition of
climate change contribution
Corporate governance
Major governance failure
• No material failure in governance or an illegal act resulting in significant
reputational damage and/or material financial loss to the Group
Note
1. CDP are one of the world’s leading climate change research groups https://www.cdp.net. CDP’s annual
environmental disclosure and scoring process is respected as the gold standard of corporate environmental
transparency. It ranks companies on a scale of A to D- based on the comprehensiveness of disclosure,
awareness and management of environmental risks and demonstration of best practices associated with
environmental leadership, such as setting ambitious and meaningful targets. Weir’s score was A- in 2020 and
2021, improving to A in 2022 and again in 2023, reflecting our continued substantial progress in executing our
sustainability strategy. The underpin for the 2024 award will be set such that if Weir’s score falls below a
threshold of B for any year during the vesting period, this would trigger the Committee to consider an
adjustment to vesting. The CDP methodology requires continuous improvement even to maintain a level of
scoring and therefore the Committee believes this is an appropriate level at which to set the threshold for the
underpin.
Other
Shareholding guidelines
• CEO – 400% of base
No change.
salary
• CFO – 300% of base
salary
Shareholding guidelines
continue post-
employment. The
requirement falls to half
the normal level on leaving
and then tapers down to
zero after two years.
Fees reflect
responsibilities and time
commitments for the role.
Chair and Non-Executive
Director (NED) fees
Chair and NED fees will increase by 4% effective 1 April 2024, which is aligned to
the average increase for the wider UK workforce.
• Chair’s fee – £364,000
• NED base fee – £72,900
• Chair of Committee fee – £19,000
• Senior Independent Director fee – £15,300
• Employee Engagement Director fee – £19,000
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Financial Statements
Additional Information
Directors’ remuneration policy
Remuneration policy
The Directors' Remuneration Policy was approved by Shareholders at the AGM on 28 April 2022 and is intended to apply for three years. The
Directors' Remuneration Policy is published on the Company's website at: https://www.global.weir/siteassets/pdfs/investors/board-
committees/weir-group-directors-remuneration-policy-2023.pdf. This section sets out the Directors' Remuneration Policy with some minor
amendments made to update references, where appropriate.
Policy table
Base salary
Purpose
To provide a salary that takes into account an individual’s role, skills
and responsibilities and enables the Group to attract and retain
talented leaders.
Operation
Reviewed annually, with increases normally taking effect from 1
April. Salaries are set by reference to market practice for similar roles
in companies of similar size and complexity. The Committee also
takes into account personal performance, the wider employee
context, and economic and labour market conditions.
Pension
Purpose
To encourage long-term saving and planning for retirement.
Operation
A contribution into the Company’s defined contribution pension plan
or an equivalent cash allowance, or any other arrangement the
Committee considers has the same economic benefit.
Benefits
Purpose
To provide cost-effective benefits valued by individuals.
Operation
Benefits include, but are not limited to, healthcare, car allowance,
liability insurance and death in service insurance.
Other benefits may be provided from time-to-time if considered
reasonable and appropriate, such as relocation benefits or long-term
disability insurance.
Maximum value
While there is no stipulated maximum salary increase, increases will
not normally be greater than the average salary increase for UK
employees (or the relevant jurisdiction if an Executive Director is
based outside the UK).
Different increases may be awarded at the Committee’s discretion in
instances such as where:
• there has been a significant increase in the size, complexity or
value of the Group;
• there has been a change in role or responsibility;
• the individual is relatively new in the role and the salary level has
been set to reflect this; and
• the individual is positioned below relevant market levels.
Maximum value
12% of base salary per annum in line with the maximum contribution
rate available to the wider UK workforce.
Maximum value
• Car allowance – no greater than £20,000 per annum
• Life assurance – 5 x base salary
The cost of providing insurance and healthcare benefits varies
according to premium rates, so there is no formal maximum
monetary value.
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Financial Statements
Additional Information
Directors’ remuneration policy
continued
Annual bonus
Purpose
To incentivise the delivery of our strategic plan and to reward the
achievement of stretching performance on an annual basis.
To focus incentives on team performance to create collective
accountability.
Operation
Measures, targets and weightings are reviewed and determined
annually at the start of each financial year to ensure they are
appropriate and support the Company’s strategy.
30% of any bonus will be deferred into an award of Weir Group
shares, which will normally be released after three years. The
deferred bonus shares are not ordinarily subject to any further
conditions. Malus and clawback provisions may be applied in the
event of:
• a material misstatement in the financial statements of the Group
or a subsidiary/Division;
• the discovery that information used to determine an award was
materially incorrect, mistaken or misrepresented;
• gross misconduct (leading to termination for cause);
• a material corporate failure in any Group company or a relevant
business unit; or
• reputational damage causing significant damage to the Company
and clearly attributable to the individual.
Share reward plan (SRP)
Purpose
To encourage and enable substantial long-term share ownership.
To reward the delivery of sustainable value over time.
Operation
The Committee may grant awards under the SRP on an annual basis.
Awards will vest at the end of a three-year period, subject to
continued employment and assessment of the underpin.
Following vesting, an additional two-year holding period will also
apply, such that vested shares are released five years from grant.
Awards will normally be in the form of conditional share awards, but
may be awarded in other forms if appropriate (e.g. as nil cost
options).
Malus and clawback (applicable for three years from vesting)
provisions may be applied in the event of:
• a discovery of a material misstatement in the audited consolidated
accounts of the Group or audited accounts of any Group company;
• action or conduct that can be considered as gross misconduct;
• events or behaviour that have a significant detrimental impact on
the reputation of any Group company, and can be attributed to the
individual award holder;
• the information used to determine the number of shares over
which an award is granted, or vests is found to be materially
incorrect, mistaken or misrepresented to the advantage of the
award holder; and
• a material corporate failure in any Group company or a relevant
business unit.
Maximum value
• CEO 150% of base salary
• CFO 125% of base salary
Performance assessment
Annual bonuses will be subject to such targets as the Committee
considers appropriate each year.
Financial measures will normally be used to calculate at least 50% of
the bonus, with the remainder being based on strategic, ESG and/or
personal objectives.
The performance targets for financial measures are set in the context
of the internal budget taking into account other relevant factors, such
as external forecasts.
All financial measures are calibrated with payment on a straight-line
basis between threshold (up to 20% of maximum bonus payable),
stretch, and any points in between.
Payment of any non-financial measures component will be subject to
a discretionary underpin (including individual performance).
In exceptional circumstances, the Committee has discretion to alter
the measures and/or targets during the performance period if it
believes the original measures and/or targets are no longer
appropriate.
The Committee has discretion in exceptional circumstances to
amend the payout level if it believes this will better reflect the
Company’s underlying performance.
Maximum value
The Committee will determine the grant level each year. The
maximum value of award that may be granted in respect of a financial
year is:
• CEO 125% of base salary
• CFO 100% of base salary
The Committee has the ability to adjust award levels at the time of
grant to address, if relevant, concerns about the potential for
perceived ‘windfall gains’.
Performance assessment
No performance measures are associated with the awards.
The underpin will consist of a ‘basket’ of pre-determined key metrics
that will best reflect overall business health over the vesting period.
For each metric, a clearly defined and, where relevant, quantifiable
‘threshold’ will be set at the time of grant. Thresholds will be
disclosed on a prospective basis.
Prior to vesting, if any of the thresholds have not been met, it would
trigger the Committee to consider whether a discretionary downward
adjustment was required.
In addition, the Committee will also have general discretion to reduce
vesting levels if it believes this will better reflect the underlying
performance of the Company over the period.
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Additional Information
Directors’ remuneration policy
continued
Shareholding requirements
Purpose
To ensure Executive Directors build and hold a significant
shareholding long-term.
To align Executive Directors’ interests with Shareholders.
Operation
Executive Directors are required to build up a shareholding in the
Company over a five-year period.
All beneficially owned shares, deferred shares and unvested
restricted share awards count towards an individual’s shareholding
(on a net of tax basis where relevant).
Until the shareholding requirement is met an Executive Director must
retain 50% of net restricted share awards, performance share
awards, and deferred bonus award shares.
Shareholding requirements continue post-employment:
• The requirement will fall to half the normal level on leaving.
• The requirement would then taper down to zero after two years.
All employee share plans
Purpose
To enable long-term share ownership for all employees, and to
increase alignment with Shareholders.
To provide one common benefit to all employees.
Operation
Executive Directors may be entitled to participate in all-employee
share plans on the same basis as all other employees.
Chair and non-executive directors’ fees
Purpose
To attract and retain experienced and skilled Non-Executive Directors
and to reflect the responsibilities and time commitment involved.
Fees are reviewed by reference to companies of similar size and
complexity, economic and labour market conditions.
Additional fees may be made available to Non-Executive Directors,
where appropriate, to reflect any additional time commitment or
duties.
The Company may reimburse Non-Executive Directors for any
business-related costs (such as travel and accommodation costs
incurred in connection with their duties) and any associated tax on
these costs.
Shareholding guidelines
• CEO 400% of base salary
• CFO 300% of base salary
Maximum value
The maximum value will be in line with the maximum value for all
other employees.
Maximum value
Fees as prescribed in the Articles of Association.
Planned increases in fees will take into account general increases
across the Group, along with market practice.
Choice of performance measures and targets
The performance measures selected for the annual bonus awards and the performance underpins selected for the restricted share awards are
set on an annual basis by the Committee, to ensure that they remain appropriate to reflect the priorities for the Company in the year ahead.
The annual bonus plan measures are chosen to align to our reward principles and the delivery of our strategy. The restricted shares
performance underpins are chosen to align with our key underlying drivers of value. The targets for the performance measures are set taking
into account a number of factors, including the Company’s annual operating plan, strategic priorities, the economic environment and market
conditions and expectations.
Dividends
Executive Directors are entitled to receive the value of dividends payable on any deferred bonus awards under the annual bonus or awards
under the SRP up to the point of vesting. This value may be calculated assuming that the dividends were notionally reinvested in the
Company’s shares.
Common award terms
Awards granted under the share plans may be adjusted in the event of any variation of the Company’s share capital or any demerger, special
dividend or other event that may affect the current or future value of the awards.
Legacy arrangements
The Committee reserves the right to make any remuneration payments and/or payments for loss of office, this includes exercising any
discretions available to it in connection with such payments (notwithstanding that they are not in line with this policy) where the terms of
payment:
• came into effect before this policy was approved and implemented (including where such payments are in line with a previously approved
policy); and
• were agreed at a time when the individual was not a Director of the Company and, in the opinion of the Committee, the payment is not in
consideration for the individual becoming a Director.
This includes the vesting of any awards granted under the SRP.
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Additional Information
Directors’ remuneration policy
continued
Recruitment policy
The Committee’s approach when considering the overall remuneration arrangements in the recruitment of an Executive Director is to take
account of all relevant factors, such as the individual’s remuneration package in their prior role and the market positioning of the package
against the local market. We will not pay more than necessary to facilitate the recruitment.
Component
Remuneration
Buy-out awards
Other
Policy and operation
The salary level, benefits, pension, annual bonus and annual SRP participation will be in line with the policy
table, including the maxima shown.
The Committee will consider whether any buy-out awards are reasonably necessary to facilitate the
recruitment of an Executive Director, and if there are any other compensation arrangements that would be
forfeited on leaving the previous employer.
The Committee will seek to structure any buy-out award taking into account relevant factors, including any
performance conditions, the form in which it is to be paid and the timeframe of the award.
Buy-out awards will generally be made on a like-for-like basis and will be no more generous in quantum than
the awards being forfeited.
The Committee may agree to meet certain mobility or relocation costs, including but not limited to,
temporary living and transportation expenses. The Committee may also agree to meet the costs of relevant
professional fees.
Reasonable expenses and associated tax incurred as part of their recruitment will be reimbursed to the
Executive Director.
Internal promotion to
Executive Director
The Committee will honour existing remuneration arrangements made prior to and not in contemplation of
promotion. The arrangements will continue to pay out in accordance with the respective rules and guidelines.
Service contracts and policy on payment of loss of office
It is the Committee’s policy that there should be no element of reward for failure. The Committee’s approach when considering payments in
the event of termination is to take account of the individual circumstances including the reason for termination, contractual obligations of both
parties as well as incentive plan and pension scheme rules.
If an Executive Director’s service contract is terminated other than in accordance with its terms, the Committee will give full consideration to
the obligation and ability of the individual to mitigate any loss they may suffer as a result of the termination of their contract.
Service contracts and letters of appointment are available for inspection at the Company’s registered office.
Provision
Unexpired term
Change of control
Notice period
Contractual payments
Annual bonus and deferred
bonus awards
Policy
The unexpired term of Executive Directors’ contracts is 12 months.
Executive Directors have rolling contracts.
No provisions in service contracts relate to a change of control.
Refer to the relevant sections below for annual bonus and share plans provisions.
Executive Directors have 12 months’ notice by either the Company or the individual. This would be the
normal policy for new appointments.
Termination with contractual notice or termination by way of payment in lieu of notice (PILON) at the
Company’s discretion.
Neither notice nor PILON will be given in the event of gross misconduct.
The calculation of PILON will be at 1.2 x gross salary to reflect the value of salary and contractual benefits.
PILON will be made where circumstances dictate that Executive Directors’ services are not required for their
full notice period. Contracts also allow for phased payments on termination which provides for mitigation,
including remuneration from alternative employment.
The Committee may authorise:
• payments for statutory entitlements in the event of termination;
• reasonable settlement of potential legal claims; and
• payment of reasonable reimbursement of professional fees in connection with such agreements.
At the discretion of the Committee, where an individual leaves as a Good Leaver (as defined below),
a pro rated payment (payable in such proportions of cash and shares as the Committee may determine)
may be earned if employment ceases during the year. Any payment will be subject to the assessment of
bonus targets.
Dismissal for gross misconduct – all entitlements will be forfeited, including any unvested deferred
bonus awards.
All other departure events – existing rights are normally retained in respect of any deferred bonus awards.
Vesting will take place at the normal vesting date unless the Committee determines otherwise.
Malus and clawback provisions will continue to apply.
Change in control – any bonus will normally be determined by the Committee up to the expected date of
change in control taking into account both performance and the period of the financial year which has
elapsed. Deferred bonus awards will vest on change in control.
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Additional Information
Directors’ remuneration policy
continued
Outstanding share plan awards The treatment of awards will be governed by the rules of the relevant plan.
Where an individual leaves as a Good Leaver (which includes for reasons of death, retirement, ill-health,
injury or disability, redundancy, the sale of employing company or business, or other circumstances that the
Committee determines) unvested awards will normally continue and vest on the normal vesting date, taking
into account the assessment of any applicable underpins and pro-rated to reflect the proportion of the vesting
period which has elapsed.
The Committee may exercise its discretion to apply a different pro-rata methodology or to dis-apply time
pro rating completely.
Awards subject to a holding period will continue to be subject to that holding period as if employment had
not ceased, except in the case of death, or in such other circumstances as the Committee may determine,
when the holding period will end at that time.
The rules provide flexibility that in the case of the participant’s death (or such other exceptional
circumstances as the Committee considers appropriate), awards will vest (and awards in the holding
period will be released) at the time of death/leaving.
If an individual leaves for any reason other than as a Good Leaver, any unvested awards will lapse
on termination.
Awards will remain subject to the operation of malus and clawback provisions.
Change in control – the extent to which unvested awards vest will be determined by the Committee, taking
into account the performance conditions and/or underpins as applicable and the proportion of the vesting
period that has elapsed. Alternatively, awards may be exchanged for new equivalent awards in the acquiring
company. The holding period applicable to any awards will end at the time of change in control.
All employee share plans
The rules of any all-employee share plans will apply in the event of termination of employment or change in control.
Relocation
The Committee may determine that share plan awards or deferred bonus awards should vest early if an
Executive Director is relocated to a country where they would suffer a tax or regulatory disadvantage by
holding the award.
Chair and Non-Executive
Directors
Non-Executive Directors have letters of appointment. The letters do not contain any contractual entitlement
to a termination payment and the Non-Executive Directors can be removed in accordance with the
Company’s Articles of Association.
Notice periods are six months from the Company and no notice from the individual.
There are no change in control provisions in the letters of appointment.
Service agreements and letters of appointment
The following table sets out the dates of each of the Executive Directors’ service agreements, the dates of the Non-Executive Directors’ letters
of appointment and the date on which the Non-Executive is subject to election or re-election. Directors are required to retire at each Annual
General Meeting and seek re-election by Shareholders.
Executive Director
Jon Stanton
Brian Puffer1
Non-Executive Director
Barbara Jeremiah
Andy Agg2
Dame Nicola Brewer
Penny Freer
Tracey Kerr
Ben Magara
Sir Jim McDonald3
Srinivasan Venkatakrishnan4
Stephen Young
Contract commencement date
Unexpired term (months)
28 July 2016
1 March 2024
Date of appointment
1 August 2017
27 February 2024
21 July 2022
23 October 2023
21 July 2022
19 January 2021
1 January 2015
19 January 2021
1 January 2018
12
12
Date when next subject to election/re-election
25 April 2024
25 April 2024
25 April 2024
25 April 2024
25 April 2024
25 April 2024
n/a
n/a
25 April 2024
1. Brian Puffer will join Weir Group as Chief Financial Officer and be appointed to the Board with effect from 1 March 2024.
2. Andy Agg joined the Board with effect from 27 February 2024.
3. Sir Jim McDonald will step down from the Board following the AGM on 25 April 2024.
4. Srinivasan Venkatakrishnan will step down from the Board on 31 March 2024.
Consideration of conditions elsewhere in the Group
The reward principles set out earlier in the Directors’ Remuneration Report reflect the reward principles that apply to all employees across the
Group. Although these principles apply across the Group, given the size of the Group and the geographical spread of its operations, the way in
which the principles are implemented in practice varies. For example, annual bonus deferral applies at the more senior levels within the Group
and participation in restricted share awards is typically limited to Senior Management and executives. All employees are eligible to participate in
our global all-employee share plan, Weir ShareBuilder, and we offer competitive and fair rates of pay across the organisation.
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Additional Information
Directors’ remuneration policy
continued
Consideration of employee engagement
Meaningful engagement with customers and employees plays a crucial role in both innovation and the continuous improvement of the
Weir business.
The Board recognises the importance of culture and effective employee relations in the creation of good work and good workplaces.
The role of the Board therefore is to ensure that mechanisms are in place, and monitored, for effective employee engagement and that there
is governance of the process for management standards and training to continue to assure ourselves of the leadership skills required
to do engagement well. Given the multi-national nature of our business, the management team also recognise that their approaches to insight-
gathering and dialogue need to reflect country practices so that engagement can be led well locally and be mindful of circumstances
and culture.
As a Board, we recognise the importance of a Group-wide framework for employee dialogue, which is why our continued focus is to ensure
that we broaden our Group-wide practices for gathering workforce views and engaging in meaningful dialogue and for measuring and further
strengthening employee engagement. Monitoring of progress will take place at the Board in the form of an annual employee insights report.
We have in place a variety of employee voice channels, such as our global employee engagement survey and our ‘Tell the Board’ sessions,
which provide employees with an opportunity to provide feedback on any topics that interest or concern them. Outputs from these channels
are provided to the Board, and any remuneration concerns would be flagged to the Remuneration Committee for separate consideration. We
also include a specific reward question in our annual employee engagement survey and the results we receive help us shape our reward
agenda and actions.
Consideration of shareholder engagement
Shareholders and their representative bodies played a very active role in the development of our current remuneration policy, which was
approved by Shareholders at the 2022 AGM.
The Committee remains committed to ongoing dialogue and will seek input from Shareholders when considering any further changes.
Pay at Weir
Application of remuneration policy
JON STANTON
BRIAN PUFFER
Fixed Pay
100%
£960,649
Mid Point
35%
£960,649
Maximum
30%
£960,649
Maximum1 +
26%
£960,649
27%
38%
£746,100
£1,036,250
38%
£1,243,500
33%
£1,243,500
32%
£1,036,250
41%
£1,554,375
Fixed Pay
100%
£579,820
Mid Point
40%
£579,820
Maximum
34%
£579,820
Maximum1 +
30%
£579,820
26%
34%
£375,000
£500,000
37%
£625,000
32%
£625,000
29%
£500,000
38%
£750,000
1 Maximum + 50% share price increase.
1 Maximum + 50% share price increase.
Fixed pay
Annual bonus
SRP
Fixed pay
Annual bonus
SRP
Notes to application of remuneration policy charts
The above chart illustrates the potential total remuneration for the Executive Directors in respect of the application of our Remuneration Policy.
Brian Puffer will join Weir Group as Chief Financial Officer and be appointed to the Board with effect from 1 March 2024. The chart above has
been determined in accordance with his appointment terms, announced on 1 November 2023.
Element of package
Assumptions used
Fixed Pay
Annual Bonus
SRP
Base salary: effective 1 April 2024
Benefits: benefits as disclosed in single total figure of remuneration for 2023. For Brian Puffer this includes an
estimated 2024 benefits figure calculated as the annualised value of the benefits provided to the previous Chief
Financial Officer in 2023 and as disclosed in the single total figure of remuneration on page 123.
Pension: 12% pension contribution or cash allowance, which is also the maximum rate available to the wider UK
workforce
Minimum: no bonus is earned
Mid-point: 60% of maximum is earned (being the mid-point under the annual bonus between the threshold pay-
out of 20% and maximum pay-out)
Maximum: 100% of maximum is earned
Minimum: no vesting
Mid-point: 100% vesting
Maximum: 100% vesting
Maximum +50%: As above for maximum performance but includes share price appreciation in respect of the
SRP of 50%
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Additional Information
Directors’ remuneration report
continued
Single total figure of remuneration for Executive Directors (audited)
This section sets out how the Remuneration Policy was applied for the year ended 31 December 2023.
Base salary1
Benefits2
Pension3
Total fixed pay
Annual bonus
Restricted shares4
Total variable pay
Total pay
Executive Director
Jon Stanton
Former Executive Director
John Heasley5
2023 (£)
785,750
32,169
94,290
912,209
1,022,519
839,527
1,862,046
2,774,255
2022 (£)
741,000
29,050
88,920
858,970
941,186
712,252
1,653,438
2,512,408
2023 (£)
442,167
18,168
53,060
513,395
0
413,397
413,397
926,792
2022 (£)
455,500
18,502
54,660
528,662
481,857
350,767
832,624
1,361,286
Notes to the total figure of remuneration for the Executive Directors (audited)
1. Salary - Jon Stanton's annual salary was £752,000 in the period 1 January 2023 to 31 March 2023 and £797,000 in the period 1 April 2023 to 31 December 2023. John Heasley's annual
salary was £462,000 in the period 1 January 2023 to 31 March 2023 and £490,000 in the period 1 April 2023 to 30 November 2023.
2. Benefits – corresponds to the value of benefits in respect of the year ended 31 December 2023, as set out in the table below.
3. Pension – corresponds to the cash allowance provided to the Executive Directors during the year ended 31 December 2023. This equates to 12% of salary.
4. Restricted shares - the 2023 value comprises the fourth and final 25% of the 2018 award vesting on 30 April 2023, the third 25% of the 2019 award vesting on 9 April 2023 and the second
25% of the 2020 award vesting on 8 April 2023. The restricted share awards have been valued using the share price at the date of vest. The vesting in 2022 and 2023 of the first and
second 25% tranches of the 2020 award incorporate the downward discretion applied by the Remuneration Committee to reduce the number of shares vesting on each occasion by 15%
for 'windfall gains', as disclosed in the respective 2021 and 2022 Directors' Remuneration Reports. Of the 2023 restricted shares value shown above, £204,153 for Jon Stanton and
£100,573 for John Heasley reflects the share price appreciation in the period since award. As previously communicated to Shareholders, the dividend underpin relating to the tranches of
the 2018 and 2019 restricted share awards vesting in 2023 was not met following decisive action taken by the Board to withdraw the final dividend for 2019 and any dividend payments in
2020 in response to the outbreak of Covid-19. To recognise the breach of the dividend underpin, the Committee made a downwards adjustment to the tranches of the 2018 and 2019
restricted share awards vesting in 2021. In line with the approach taken last year, no further adjustments have been made to the tranches of these awards vesting in 2023. All other
underpins for tranches of the awards vesting in 2023 were met.
5. John Heasley provided notice of his resignation on 27 July 2023 and then stepped down as CFO and resigned from the Board on 30 November 2023. During this period, John continued to
receive his contractual salary and benefits. John received no annual bonus payment for 2023 and all unvested restricted share awards lapsed upon receipt of his notice.
Benefits
Car allowance
Healthcare
Life assurance
Total
Jon Stanton
2023 (£)
17,000
1,982
13,187
32,169
John Heasley
2023 (£)
12,806
1,817
3,545
18,168
2023 annual bonus (audited)
The table below details the performance achieved against the stretching targets set at the beginning of the year. As a result, a bonus of
85.53% of maximum was payable to the Executive Directors. Jon Stanton's bonus award is 128.3% of salary as at 31 December 2023. John
Heasley received no bonus after resigning on 30 November 2023. In accordance with our Remuneration Policy set out on page 118, 30% of the
bonus for Executive Directors is deferred into shares for three years and is not ordinarily subject to any further conditions. Malus and clawback
may be applied in the circumstances set out on page 118.
Payout as % of maximum
PBTA1
Cash conversion2
Strategic measures
ESG measures
Total bonus
Entry
20%
£359.3m
80.3%
Weighting
40%
20%
20%
20%
100%
Mid-point
Maximum
Achievement
Pay-out (%)
60%
£393.4m
85.0%
100%
£427.6m
89.7%
£442.1m
85.3%
See page 124
See page 125
40.0%
12.51%
15.38%
17.64%
85.53%
Notes
1. PBTA is defined as profit before tax and adjusting items. The performance targets and achievements are calculated using October 2022 closing exchange rates.
2. Cash conversion is defined as free operating cash flow as a percentage of adjusted operating profit.
The next two pages detail the annual bonus achievement on the strategic measures and ESG measures aligned to the pillars of our We are
Weir Framework of People, Customer, Technology and Performance.
The Weir Group PLC Annual Report and Financial Statements 2023
123
Strategic Report
Governance
Financial Statements
Additional Information
Directors’ remuneration report
continued
Strategic measures (audited)
Below are the detailed results for the 2023 strategic measures. The % bonus contribution for each measure is determined by the result relative
to threshold, target and maximum performance metrics, with the % bonus for a result between these points calculated on a straight-line basis.
People
Priority for 2023
Retain our talent.
Outcome required for on-target bonus
achievement
Result
• 11% voluntary attrition rate.
• 9.4% voluntary attrition rate.
Build our digital literacy.
• 71% of employees with more than
one log-in to key software platform.
• 76.3% of employees with more than one
log-in to key software platform.
Rating
Bonus
contribution
l 1.53%
out of 1.67%
l 1.67%
out of 1.67%
Employee engagement.
• Maintain our engagement score in top
quartile of Peakon Manufacturing
benchmark.
• Engagement score of 8.4, which is within
top quartile of Peakon Manufacturing
benchmark.
l 1.0%
out of 1.67%
Customer
Priority for 2023
Execute top three strategic
growth initiatives.
Outcome required for on-target bonus
achievement
Result
• Minerals: £371m orders.
• Minerals: £314m orders.
• ESCO: $272m orders.
• ESCO: $273.6m orders.
Capture value from new
strategic alliances.
Digitise our customer
experience.
• Four orders originating from new
• Seven orders originating from new
strategic alliances.
strategic alliances.
• 40% of Minerals customer quotes
completed via online configurator.
• >90% of Minerals customer quotes
completed via online configurator.
• 80% of ESCO customer quotes
• Near 100% of ESCO customer quotes
completed via online configurator.
completed via online configurator.
Rating
Bonus
contribution
out of 0.83%
l 0%
l 0.52%
l 1.67%
l 0.83%
l 0.83%
out of 0.83%
out of 1.67%
out of 0.83%
out of 0.83%
Technology
Priority for 2023
Outcome required for on-target bonus
achievement
Result
Rating
Bonus
contribution
Revenue from new products.
• Minerals: £45m of revenue.
• ESCO: $3m of revenue.
Digitise our current business
model.
• Minerals: 45 Synertrex connected
sites.
• ESCO: $3.1m of revenue.
• Minerals: £108m of revenue.
l 1.25%
l 0.78%
• Minerals: 63 Synertrex connected sites. l 1.25%
out of 1.25%
out of 1.25%
out of 1.25%
• ESCO: $37m sales from Motion
• ESCO: $22.1m sales from Motion
Metrics.
Metrics.
l 0%
out of 1.25%
Outcome required for on-target bonus
achievement
Result
• Target IT architecture agreed.
• Delivered ambitions for IT architecture
outcomes.
• Minerals: Sites achieving GEMBA
• Achieved our ambitions for our sites at
Academy scores of 93% at Level 2,
50% at Level 3 and 10% at Level 4.
Level 2 and 4.
• ESCO: achieve process management
score for the critical processes at our
fabrication and foundry sites of 3.4.
• ESCO: process management score of 3.7
achieved.
• £4.5m run rate.
• Exceeded our goal delivering £7.2m run rate
of savings.
Rating
Bonus
contribution
l 1.0%
out of 1.67%
l 0.56%
out of 0.83%
l 0.83%
out of 0.83%
l 1.67%
out of 1.67%
Performance
Priority for 2023
Performance Excellence
process.
Performance Excellence
outcomes - improve our lean
scores.
Performance Excellence
outcomes - savings from
restructuring.
Total bonus for strategic measures
(unrounded sum of the rounded individual
bonus contributions in the table above)
15.38%
out of 20%
maximum
The Weir Group PLC Annual Report and Financial Statements 2023
124
Strategic Report
Governance
Financial Statements
Additional Information
Directors’ remuneration report
continued
ESG measures (audited)
Below are the detailed results for the 2023 ESG measures. The % bonus contribution for each measure is determined by the result relative to
threshold, target and maximum performance metrics, with the % bonus for a result between these points calculated on a straight-line basis.
People
Priority for 2023
Safety Total Incident Rate
(TIR).
Outcome required for on-target bonus
achievement
Result
• Improve on our 2022 TIR.
• 0.42 TIR compared to the 2022 TIR of
0.41.
Rating
Bonus
contribution
l 0%
out of 1.67%
Improve our gender
diversity.
• Increase % of females in job bands
• % of females in job bands 3-5
3-5 by 2.5%.
increased by 3.1%.
• Increase % of females in job bands
• % of females in job bands 1-2
1-2 by 1.25%.
increased by 1.6%.
out of 1.67%
l 1.67%
l 1.67%
out of 1.67%
Customer
Priority for 2023
Develop our scope 4 value
proposition.
Build customer-specific
scope 3 and scope 4 data
insight.
Technology
Priority for 2023
Progress priority R&D
projects.
Outcome required for on-target bonus
achievement
Result
Rating
Bonus
contribution
• Develop scope 4 target for phase 1
products/solutions.
• Scope 3 and scope 4 data insights
developed using customer asset level
data.
• Target developed for phase 1
products and externally benchmarked. l 2.5%
l 2.5%
• Data pipeline developed from
customer projects and Weir digital
tools.
out of 2.5%
out of 2.5%
Outcome required for on-target bonus
achievement
Result
• Move less rock: investigate correlation
• Laboratory testing favourable with
between ore content and crusher
energy.
client site testing planned.
• Use less energy - Minerals: complete
• Pre-treatment completed and design
evaluation of microwave pre-
treatment.
enhancement established.
• Use less energy - ESCO: laboratory
validation of payload monitoring.
• Prototype validated in laboratory and
delivered to customer site.
• Use water wisely: product design
evaluated for cyclone separation
control.
• Testing ongoing at Weir Technology
Centre.
Rating
Bonus
contribution
l 1.25%
out of 1.25%
l 0.63%
out of 0.63%
out of 0.63%
l 0.38%
l 1.25%
out of 1.25%
• Create less waste: distributed
• Additive manufacturing cell fully
manufacturing.
operational.
l 1.25%
out of 1.25%
Performance
Priority for 2023
Reduce scope 1&2 CO2e vs
2019 base aligned with
SBTi.
Enable emergent ESG
reporting governance.
Outcome required for on-target bonus
achievement
• 15% absolute CO2e reduction.
Result
• 22.5% absolute CO2e reduction
achieved and verified.
Rating
Bonus
contribution
l 2.5%
out of 2.5%
• Automation of scope 1, 2 & 3 data.
• Automated dashboard developed.
l 2.5%
out of 2.5%
Total bonus for ESG measures1
(unrounded sum of the rounded individual bonus contributions
in the table above, and incorporating the downward adjustment
detailed in Note 1 below).
17.64%
out of 20%
maximum
1. A downward adjustment has been made to the 2023 ESG bonus outcome to account for injuries inadvertently excluded from prior year TIR rates. The overall ESG bonus outcome has
therefore been reduced from the formulaic 2023 outcome of 18.08% to 17.64%.
Rating key
l Outcome achieved meets or
exceeds on-target.
l Outcome achieved is between
threshold and on-target.
l Outcome achieved is below
threshold.
The Weir Group PLC Annual Report and Financial Statements 2023
125
Strategic Report
Governance
Financial Statements
Additional Information
Directors’ remuneration report
continued
Share scheme interests awarded during 2023 (audited)
The following table sets out awards granted to the Executive Directors in the year ended 31 December 2023.
Jon Stanton
John Heasley
Share award
Restricted Share (Conditional)1
Bonus (Deferred)2
Restricted Share (Conditional)1
Bonus (Deferred)2
Award basis
Grant date
Face value of award
No of shares granted
125% salary
18 April 2023
30% bonus
18 April 2023
100% salary
18 April 2023
30% bonus
18 April 2023
£996,250
£282,358
£490,000
£144,550
52,600
14,908
25,871
7,632
Notes
1. There are no performance conditions associated with the restricted share awards. Awards will vest at the end of a three-year period and an additional two-year holding period will also apply,
such that vested shares are released five years from grant. The face value of the restricted share award is based on the average of the closing price for the three days prior to the date of
grant, being £18.94. John Heasley's restricted share award was subsequently forfeited upon receipt of his notice of resignation on 27 July 2023.
2. There are no performance conditions associated with the deferred bonus share awards. Awards will vest at the end of a three-year deferral period. The face value of the deferred bonus
share award is based on the average of the closing price for the three days prior to the date of grant, being £18.94. John Heasley retains his deferred bonus share award post-employment
in accordance with its terms and it remains subject to the three-year deferral period.
As there are no performance conditions attached to the 2023 restricted share awards there can be no threshold or maximum outcomes.
Vesting is subject to continued employment and assessment of the underpin at the date of vesting in April 2026. Prior to vesting, if any of the
thresholds set out below have not been met, it would trigger the Committee to consider whether a discretionary reduction was required.
Balance sheet health
Breaching covenants
Investor returns
Return on Capital Employed (ROCE)
No breach of debt covenant or renegotiation of covenant terms outside a normal refinancing cycle.
Maintain average ROCE over the vesting period above the average Weighted Average Cost of Capital for that
period.
Environmental, Social and
Governance (ESG)
Sustainability Roadmap progress
Awarded a B listing or better by CDP through the vesting period in recognition of climate change contribution.
Corporate governance
Major governance failure
No material failure in governance or an illegal act resulting in significant reputational damage and/or material
financial loss to the Group.
Chief Financial Officer change
Joining arrangements for Brian Puffer
Brian Puffer will join Weir and be appointed to the Board of Directors as Chief Financial Officer (CFO) and Executive Director on 1 March 2024.
Brian's remuneration arrangements have been set in accordance with our Directors' Remuneration Policy. His base salary will be £500,000 per
annum, which is below the salary for our former CFO John Heasley, if his salary had been uplifted by 4% in line with the wider UK workforce at
this year's salary review.
• Annual bonus opportunity is set at a maximum of 125% of salary and will be pro-rated for his period of employment in 2024. 30% of any
bonus is deferred into Weir shares and will be released after three years.
• Eligible for an annual award of restricted shares of 100% of salary under the Share Reward Plan.
• In addition, will receive other standard benefits including a car allowance, healthcare, life assurance and a pension contribution of 12% of
salary (or an equivalent cash allowance in lieu) which is in line with the maximum contribution rate available to the wider UK workforce.
Brian will forfeit various equity awards due to leaving his previous employer and the Remuneration Committee has agreed to grant restricted
share awards to compensate him for the forfeited awards. The awards are being made on a like-for-like basis to reflect the nature, timing and
value of the equity awards being forfeited. An overview of the expected Weir awards to be granted is provided below, with further details to be
provided in next year’s report once the awards have been granted.
Details of buy-out awards
• Replacement of two restricted share awards forfeited which had no performance conditions and a current estimated value of
approximately £687k. The Weir awards will vest in February 2025 and February 2026 in accordance with the timing of the former
employer's awards.
• Replacement of two share awards forfeited which had performance conditions and a current estimated value of approximately £420k. The final
number of Weir shares vesting from these awards will be subject to the achievement of the original performance conditions attached to these
awards (as disclosed in the former employer’s annual report and accounts) and may be anywhere from nil to two times the initial number of
Weir shares awarded. The Weir awards will vest in February 2025 and February 2026 in accordance with the timing of the former employer's
awards.
• Replacement of market value options forfeited which had no performance conditions and a current estimated value of the gain under
these options of approximately £752k. The Weir award will vest in March 2025 in accordance with the timing of the former employer’s
options becoming exercisable.
• Replacement of 2023 deferred bonus shares which would have been awarded in 2024 and which would have had no performance
conditions and a current estimated value of approximately £157k. The Weir award will vest in 2028 in accordance with the timing of the
former employer's award.
Total estimated buy-out awards of approximately £2.02m
Notes
The estimated values are calculated using the average of the former employer's closing share price for each trading day over the 30 day period to 31 December 2023.
The Weir awards will have the same value as the forfeited awards based on the Weir and former employer's share prices at the time of appointment. With regard to the replacement of the
market value options, the forfeited options will be replaced with a Weir award with a value equal to the gain on the options at appointment based on the 90-day average former employer's
share price to the date of appointment less the exercise price.
The Weir Group PLC Annual Report and Financial Statements 2023
126
Strategic Report
Governance
Financial Statements
Additional Information
Directors’ remuneration report
continued
The Remuneration Committee is satisfied that the structure of the buy-out awards is consistent with our Remuneration Policy. Vesting of all of
the buy-out awards is conditional on remaining in employment at the vesting dates, not being under notice of termination of employment and
satisfactory individual performance and conduct during the vesting period. Awards will be granted subject to the terms of the Weir Share
Reward Plan including malus and clawback.
Leaving arrangements for John Heasley (audited)
John Heasley provided notice of his resignation on 27 July 2023 and then stepped down as Chief Financial Officer and resigned from the Board
on 30 November 2023. John’s departure terms are consistent with the terms of his service agreement and our Remuneration Policy for
resignation:
• Contractual salary and benefits continued to be paid until 30 November 2023. A payment of £26,385 was made to John along with his final
salary in November 2023 in lieu of unused annual leave entitlement at his date of leaving.
• No annual bonus was paid for 2023.
• All restricted share awards under the Share Reward Plan which had not yet vested were forfeited and lapsed.
• All restricted share awards under the Share Reward Plan which had vested but remained subject to an additional holding period continue to
do so for the appropriate remaining time period in accordance with their terms.
• All deferred bonus shares awarded which remain subject to the three-year deferral continue to do so for the appropriate remaining time
period in accordance with their terms.
• Malus and clawback provisions will continue to apply to the relevant shares which have vested under the Share Reward Plan or the unvested
deferred bonus shares awarded in accordance with our Remuneration Policy.
• The in-employment shareholding requirement of 300% of salary falls to 150% upon leaving employment, tapering down to zero after two
years.
Single total figure of remuneration for chair and non-executive directors (audited)
Basic Fee (£)
2023
2022
346,750
248,644
69,425
69,425
13,641
21,973
21,973
69,425
69,425
69,425
69,425
69,425
29,898
66,750
–
66,750
66,750
29,898
66,750
66,750
66,750
66,750
Senior Independent Director/
Employee Engagement Non-
Executive Director/Committee
Chair Fee (£)
2023
–
12,270
18,125
–
–
2022
4,485
–
17,425
–
–
5,737
17,425
–
–
14,550
–
18,125
–
–
9,508
–
17,425
Taxable Benefits6(£)
Total Fees (£)
2023
24,138
1,888
1,968
2,982
760
2,208
2,978
2,578
3,270
1,688
5,431
2022
15,887
3,825
5,142
–
2,808
25,805
5,438
3,628
656
2,678
5,988
2023
2022
370,888
269,016
83,583
89,518
16,623
22,733
29,918
72,403
72,003
87,245
71,113
92,981
33,723
89,317
–
69,558
109,980
35,336
70,378
76,914
69,428
90,163
Barbara Jeremiah
Dame Nicola Brewer1
Clare Chapman2
Penny Freer3
Ebbie Haan4
Mary Jo Jacobi5
Tracey Kerr
Ben Magara
Sir Jim McDonald
Srinivasan Venkatakrishnan
Stephen Young
Notes
1. Dame Nicola Brewer succeeded Mary Jo Jacobi as Employee Engagement Director following the AGM on 27 April 2023.
2. Clare Chapman stepped down from the Board with effect from 31 December 2023.
3. Penny Freer was appointed to the Board on 23 October 2023 and succeeded Clare Chapman as Chair of the Remuneration Committee with effect from 31 December 2023.
4. Ebbie Haan stepped down from the Board following the AGM on 27 April 2023.
5. Mary Jo Jacobi stepped down from the Board following the AGM on 27 April 2023.
6. Taxable benefits includes travel and accommodation to attend Board meetings. The amounts in the table include the grossed-up cost of the UK tax to be paid by the Company on behalf of
the Directors.
Payments for loss of office (audited)
Leaving arrangement for John Heasley, who stepped down as CFO and resigned from the Board on 30 November 2023, are set out above.
There were no payments for loss of office.
Payments to past directors (audited)
No payments were made to past Directors.
The Weir Group PLC Annual Report and Financial Statements 2023
127
Strategic Report
Governance
Financial Statements
Additional Information
Directors’ remuneration report
continued
Statement of directors’ shareholdings and share interests (audited)
Shares owned
outright
Scheme Interests
As at 31 December 2023
Unvested restricted
share awards with
underpin and no
performance
conditions
Unvested deferred
bonus share awards
with no
performance
conditions
Shares owned
outright (% of salary)
Shares owned
outright plus
scheme interests
(% of salary)6
Jon Stanton1
John Heasley2
Barbara Jeremiah
Dame Nicola Brewer
Clare Chapman3
Penny Freer
Ebbie Haan4
Mary Jo Jacobi5
Tracey Kerr
Ben Magara
Sir Jim McDonald
Srinivasan Venkatakrishnan
Stephen Young
185,038
92,050
9,750
500
456
–
1,000
5,000
–
–
500
500
7,904
225,646
–
–
–
–
–
–
–
–
–
–
–
–
25,261
12,945
438%
352%
753%
377%
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Shareholding
requirement
(% of salary)
400%
300%
–
–
–
–
–
–
–
–
–
–
–
Notes
1. The share price of £18.865 on 31 December 2023 has been used to calculate Jon Stanton's shares owned outright and scheme interests percentages of salary.
2. The values shown for John Heasley reflect the position when he resigned on 30 November 2023. The share price of £18.73 on 30 November 2023 has been used to calculate John's shares
owned outright and scheme interests percentages of salary. In accordance with our Remuneration Policy, all restricted share awards subject to an underpin which had not yet vested were
forfeited and lapsed upon receipt of notice of John's resignation. John's unvested deferred bonus share awards which remained subject to a deferral period on 30 November 2023 will
continue to be subject to the remaining deferral time period and vest to John in future in accordance with their terms.
3. Reflects the shares owned outright position when Clare Chapman stepped down from the Board with effect from 31 December 2023.
4. Reflects the shares owned outright position when Ebbie Haan stepped down from the Board following the AGM on 27 April 2023.
5. Reflects the shares owned outright position when Mary Jo Jacobi stepped down from the Board following the AGM on 27 April 2023. The interest in 5,000 shares shown above is through a
holding of 10,000 American Depository Receipts (ADRs). One ADR being equivalent to 0.5 ordinary shares.
6. The value of scheme interests is included in the percentage assessment against the shareholding requirement given there are no performance conditions attached to the scheme interests.
The value of scheme interests are on an estimated net-of-tax basis.
There have been no changes in the interests of each Director between 31 December 2023 and the date of this Report.
External appointments
During the year, Jon Stanton was a Non-Executive Director of Imperial Brands PLC. He received £118,035 in fees. John Heasley was a Non-
Executive Director of Royal Scottish National Orchestra Society Ltd. He received no fees.
CEO pay ratio
The table below shows our CEO pay ratio at 25th, median and 75th percentile of our UK employees as at 31 December 2023. The 25th, median
and 75th percentile employees were determined by calculating total pay for the 2023 financial year using payroll data from 1 January 2023 to 31
December 2023. The ratios for 2019 to 2023 have been determined using Option A of the regulations given Option A is the most robust
approach and preferred by Shareholders. The increase in the pay ratio from 2022 to 2023 is primarily due to i) the higher annual bonus for the
CEO resulting from strong business performance and ii) the share price growth between April 2022 and April 2023 meaning the CEO's
restricted shares which vested in April 2023 had a higher value at vest than those which vested in April 2022. We are satisfied that the median
pay ratio is consistent with the pay, reward and progression policies for our UK employees.
Financial year
Calculation Method
25th percentile pay ratio
Median pay ratio
75th percentile pay ratio
2023
2022
2021
2020
2019
Total pay
Base Salary
Notes
Option A
Option A
Option A
Option A
Option A
Jon Stanton
£2,774,255
£785,750
69:1
67:1
53:1
27:1
56:1
25th percentile
£40,042
£22,217
57:1
53:1
42:1
22:1
44:1
Median
£49,045
£22,610
39:1
39:1
30:1
17:1
34:1
75th percentile
£71,369
£67,823
Total pay for the percentile employees includes the following pay elements: base salary, annual bonus, restricted shares, ShareBuilder, annual leave adjustment, shift premium and allowance,
sick pay, overtime pay, first aid allowance, living allowances, employer pension contribution and the provision of private medical and life assurance. We have uprated pay for part-time
employees and new joiners accordingly to calculate full-time equivalent total pay. The median employee in the table above was on maternity leave for part of the year and therefore not in
receipt of full base salary in the calculation period. For employees other than the CEO, annual bonuses considered for the purposes of the calculation are those which are paid in the financial
year, as wider workforce bonuses related to 2023 performance remain to be determined at the time of the calculation. We offer competitive and fair rates of pay across the organisation, and
employees are eligible to participate in our global all-employee share plan, Weir ShareBuilder.
The Weir Group PLC Annual Report and Financial Statements 2023
128
Strategic Report
Governance
Financial Statements
Additional Information
Directors’ remuneration report
continued
Gender pay
For 2023, our mean gender pay gap has remained broadly consistent as being in favour of females when compared to 2022, changing slightly
from -9% to -7%. Our median gender pay gap in favour of females has changed from -13% to -18%. Whilst our outcomes show we are
generally well positioned on gender pay, we recognise that this is largely due to the high number of males who are working in lower paid
production and field roles. We continue to take action and set targets to appoint more females across our workforce, albeit noting that our
female gender pay percentages can be influenced significantly by only small changes in the female workforce. For example, a small volume of
female attrition and maternity leave cases have reduced the number of females in the upper quartile pay band from 35% in 2022 to 30% in
2023. The median gender bonus gap for 2023 is significantly in favour of females due to the value of the 18 shares from our 2020 ShareBuilder
award vesting in November 2022. Whilst ShareBuilder is gender agnostic, given the mainly male profile of our UK workforce it significantly
impacts both the mean and median bonus for males. A copy of the full Gender Pay report can be found on our website www.genderpay.weir
The requirements and our outcomes
The UK Government’s Gender Pay Gap Regulation requires legal entities with 250 or more employees to publish details of their gender pay and
bonus gap. In Weir, there is one employing entity required to publish this data, but we have taken the opportunity to publish the consolidated
data for our UK employees as this is more representative of our UK organisation.
Gender pay and equal pay
The gender pay gap is different from equal pay, which relates to men and women being paid the same for similar roles or work of equal
value. Our pay policies are designed to ensure equal pay for equal jobs and we have processes in place to ensure pay levels are
reviewed consistently.
Mean and median pay and bonus gap
Gender pay gap
Gender bonus gap
Proportion of males and females receiving a bonus
Male
Female
Proportion of males and females in each pay quartile band
Upper
Upper middle
Lower middle
Lower
Mean
-7%
-27%
Male
70%
79%
87%
74%
Median
-18%
-2,103%
81%
81%
Female
30%
21%
13%
26%
Historical TSR performance
The graph below shows Weir’s TSR performance against the performance of the FTSE 350 over the ten-year period to 31 December 2023.
The FTSE 350 was chosen because it is a broad equity index of which Weir is a constituent.
200
150
100
50
0
2013
The Weir Group
2014
2015
FTSE 350
2016
2017
2018
2019
2020
2021
2022
2023
The graph below shows Weir’s TSR performance against the performance of the FTSE 350 over the five-year period to 31 December 2023,
providing a view of relative performance which is broadly aligned to the tenure of the current Executive team.
200
150
100
50
0
2018
The Weir Group
2019
FTSE 350
2020
2021
2022
2023
The Weir Group PLC Annual Report and Financial Statements 2023
129
Strategic Report
Governance
Financial Statements
Additional Information
Directors’ remuneration report
continued
Change in Chief Executive’s remuneration over 10 years
The table below shows the total remuneration over the period 1 January 2014 to 31 December 2023, as well as outcomes under the annual
bonus and long-term incentive plans.
Single total figure £000
Jon Stanton
Keith Cochrane
Annual bonus
(% of maximum)
Jon Stanton
Keith Cochrane
Long-term incentive
(% of maximum)4
Jon Stanton
Keith Cochrane
2014
–
2015
–
1,456
1,065
2016
2811
1,0122
2014
–
61%
2014
–
0%
2015
–
20%
2015
–
0%
2016
38%
40%
2016
0%
0%
2017
1,441
–
2017
70%
–
2017
0%
–
2018
2,400
–
2018
62%
–
2018
75%
–
2019
1,434
–
2019
38%
–
2019
45%
–
2020
897
–
2020
0%3
–
2020
100%
–
2021
1,768
–
2021
52%
–
20215
93%
–
2022
2,512
–
2022
83%
–
20226
92%
–
2023
2,774
–
2023
86%
–
20236
92%
–
Notes
1. Relates to the period Jon Stanton was CEO from 1 October 2016.
2. Relates to the period Keith Cochrane was on the Board to 30 September 2016.
3. The formulaic annual bonus outcome for 2020 was 46%, however this was waived by the Executive Directors.
4. The final award under the Long Term Incentive Plan was made in 2017 and which vested at 45% of maximum in 2019 as shown above. From 2018, restricted shares were awarded to the
CEO which have no performance conditions. Vesting of the restricted shares commenced from 2020 onwards and will ordinarily be at 100% of the shares initially granted, subject to an
underpin consisting of a basket of threshold metrics being met.
5. The value of 93% in 2021 incorporates the respective 10% and 5% downwards adjustment to the tranches of the 2018 and 2019 restricted share awards vesting in 2021 to reflect the
technical breach of the dividend underpin, as previously communicated to Shareholders.
6. The value of 92% in each of 2022 and 2023 incorporates the 'windfall gains' related downwards adjustment of 15% to the first and second tranches of the 2020 restricted share award in
these years, as previously communicated to Shareholders..
Percentage change in remuneration of board directors and wider employee population
The table below shows the percentage change in elements of remuneration for the Board Directors.
The employee population comprises those employed by The Weir Group PLC.
% Change 2022-2023
% Change 2021-2022
% Change 2020-2021
% Change 2019-2020
Average UK Employee
Salary/
Fees5
(0.3%)
Taxable
Benefits5
52.6%
Bonus5
26.8%
Salary/
Fees5
9.1%
Taxable
Benefits5
(34.2%)
Bonus5
69.3%
Salary/
Fees5
0.2%
Taxable
Benefits5
26.6%
Bonus5
73.6%
Salary/
Fees5
(3.3%)
Taxable
Benefits5
(36.6%)
Bonus5
(65.4%)
Jon Stanton (CEO)
6.0%
10.7%
8.6%
5.4%
7.0%
71.4%
2.3%
0.5%
n/a
0.7%
28.3%
(100%)
(2.9%)
(1.8%)
(100%)
5.3%
(3.0%)
71.0%
2.3%
(1.3%)
n/a
0.7%
7.2%
(100%)
37.0%
51.9%
—%
225.3% 18813.1%
—%
2.3%
(87.8%)
—%
21.8%
n/a
—%
John Heasley
(CFO)1
Barbara Jeremiah
Dame Nicola
Brewer
Clare Chapman
Penny Freer2
Ebbie Haan3
Mary Jo Jacobi4
Tracey Kerr3
Ben Magara
173.2%
(50.6%)
4.0%
(61.7%)
n/a
n/a
(67.1%)
(72.9%)
(67.1%)
(91.4%)
132.2%
(45.2%)
4.0%
(28.9%)
—%
—%
—%
—%
—%
—%
—%
n/a
3.8%
n/a
3.8%
3.8%
n/a
9.0%
Sir Jim McDonald
10.1%
398.5%
—%
18.6%
Srinivasan
Venkatakrishnan
4.0%
(37.0%)
Stephen Young
4.0%
(9.3%)
—%
—%
9.0%
3.8%
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
—%
—%
—%
—%
—%
—%
—%
—%
—%
—%
n/a
n/a
2.3%
(100%)
n/a
n/a
—%
—%
—%
n/a
0.7%
n/a
2.3%
(100%)
—%
15.6%
n/a
n/a
n/a
n/a
2.3%
(100%)
n/a
n/a
2.3%
n/a
n/a
n/a
n/a
n/a
2.3%
(100%)
—%
—%
—%
—%
—%
—%
0.7%
(92.4%)
n/a
n/a
0.7%
n/a
0.7%
n/a
n/a
n/a
n/a
n/a
—%
—%
—%
—%
—%
—%
—%
—%
—%
—%
Notes
1. John Heasley provided notice of his resignation on 27 July 2023 and then stepped down as CFO and resigned from the Board on 30 November 2023. During this period, John continued to
receive his contractual salary and benefits.
2. Penny Freer was appointed to the Board on 23 October 2023.
3. Ebbie Haan stepped down from the Board following the AGM on 27 April 2023.
4. Mary Jo Jacobi stepped down from the Board following the AGM on 27 April 2023.
5. The n/a values shown reflect that a % change cannot be calculated given the nil value in the previous year. The Single Total Figure of Remuneration for Executive Directors on page 123 and
the Single Total Figure of Remuneration for Chair and Non-Executive Directors on page 127 provide further detail.
The Weir Group PLC Annual Report and Financial Statements 2023
130
Strategic Report
Governance
Financial Statements
Additional Information
Directors’ remuneration report
continued
Relative importance of spend on pay
The table below shows the change in total staff pay for continuing operations between 2023 and 2022, and dividends paid out in respect of
2023 and 2022.
Financial year
Overall spend on pay for employees
Profit distributed by way of dividend
2023
£m
632.9
95.9
2022
£m
604.9
66.7
Percentage
Change
4.6 %
43.8 %
Details of the overall spend on pay for employees can be found in note 5 to the Group Financial Statements on page 164. Details of the
dividends declared and paid are contained in note 11 to the Group Financial Statements on page 171.
Complying with UK Corporate Governance Code 2018
The following table summarises how our Remuneration Policy set out on pages 117-122 fulfils the factors set out in provision 40 of the UK
Corporate Governance Code 2018.
Clarity
Remuneration arrangements should be transparent and
promote effective engagement with Shareholders and
the workforce.
Simplicity
Remuneration structures should avoid complexity and
their rationale and operation should be easy to
understand.
Risk
Remuneration arrangements should ensure
reputational and other risks from excessive rewards,
and behavioural risks that can arise from target-based
plans, are identified and mitigated.
Predictability
The range of possible values of rewards to individual
Directors and any other limits or discretions should
be identified and explained at the time of approving
the policy.
Proportionality The link between individual awards, the delivery of
strategy and the long-term performance of the
Company should be clear. Outcomes should not
reward poor performance.
Alignment to
culture
Incentive schemes should drive behaviours consistent
with Company purpose, values and strategy.
The Committee is committed to providing open and transparent
disclosures to Shareholders and the workforce with regards to
executive remuneration arrangements.
The 2023 Directors’ Remuneration Report sets out the
remuneration arrangements for the Executive Directors in a clear
and transparent way.
There is also an AGM where Shareholders can ask any questions
on the remuneration arrangements.
Our remuneration arrangements for Executive Directors, as well as
those throughout the organisation, are simple in nature and
understood by all participants.
The structure for Executive Directors consists of fixed pay (salary,
benefits, pension), annual bonus scheme and a restricted
share plan.
The Committee considers that the structure of incentive
arrangements does not encourage inappropriate risk-taking.
Under the annual bonus, discretion may be applied where formulaic
outcomes are not considered reflective of underlying Company
performance. There are robust underpins in place for restricted
share awards.
Malus and clawback provisions also apply to variable incentives.
The annual bonus scheme is the only scheme currently in operation
for Executive Directors where there is variability in payouts
depending on the performance of the Company. The restricted
share awards are subject to share price movements and therefore
aligned with the Shareholder experience.
The potential value and composition of the Executive Directors’
remuneration packages at below threshold, mid-point, maximum
and maximum including a 50% share price increase scenarios are
provided in the Directors’ Remuneration Policy.
Payments from annual bonus require robust performance against
challenging conditions. Performance conditions have been
designed to link with Group strategy and consist of financial and
non-financial metrics.
The Committee has discretion to override formulaic outturns
to ensure that they are appropriate and reflective of
overall performance.
We granted free shares under Weir ShareBuilder to all employees
newly-attaining 12 months' service by the 2023 award date.
ShareBuilder is our global all employee share plan, and is part of
our ambition of making all Weir colleagues Shareholders.
The variable incentive schemes, performance measures and
underpins are designed to be consistent with the Company’s
purpose, values and strategy.
The Weir Group PLC Annual Report and Financial Statements 2023
131
Strategic Report
Governance
Financial Statements
Additional Information
Directors’ remuneration report
continued
The Remuneration Committee in 2023
There were four Committee meetings during 2023.
Role
Chair and members
Internal attendees
Name
Clare Chapman1
Dame Nicola Brewer
Penny Freer2
Mary Jo Jacobi3
Ben Magara
Stephen Young
Barbara Jeremiah
Jon Stanton
Rosemary McGinness
Craig Gibson
Gillian Kyle4
Caroline Hagg5
Graham Vanhegan
Title
Independent Non-Executive Directors
Chair
Chief Executive Officer
Chief People Officer
Group Head of Reward
Deputy Company Secretary
Corporate Lawyer
Chief Legal Officer and Company Secretary and Secretary
to the Committee
Committee’s external adviser
Deloitte LLP
Adviser to Committee
Notes
1. Clare Chapman stepped down from the Board and Chair of the Remuneration Committee with effect from 31 December 2023.
2. Penny Freer was appointed to the Board and as a member of the Remuneration Committee on 23 October 2023 and succeeded Clare Chapman as Chair of the Remuneration Committee
with effect from 31 December 2023.
3. Mary Jo Jacobi stepped down from the Board and a member of the Remuneration Committee following the AGM on 27 April 2023.
4. Until August 2023.
5. From August 2023.
Internal advisers provided important information to the Committee and attended meetings. None of the individuals were involved in any
decisions relating to their own remuneration.
Deloitte LLP was appointed by the Committee in 2016 following a competitive tender process, and provided services to the Committee for the
year ended 31 December 2023. Fees paid to Deloitte LLP for work that materially assisted the Committee were £134,700 charged on a time
and material basis. Deloitte LLP also provided other services to the Weir Group in the year, principally tax advisory and compliance services.
Deloitte is a signatory to the Remuneration Consultants’ Group Voluntary Code of Conduct and the Committee is satisfied that Deloitte’s advice
was objective and independent. The Committee is comfortable that the Deloitte engagement partner and team that provides advice to the
Committee do not have connections with the Company or its Directors that may impair their independence.
Committee’s performance
The Committee’s Terms of Reference are reviewed on an annual basis and were last updated in December 2023. A copy can be found on our
website: https://www.global.weir/globalassets/investors/role-of-the-board/weir-group-remuneration-committee---terms-of-reference-2023.pdf
The Committee was evaluated as part of the 2023 Board Effectiveness Review (see page 89), and it was concluded that the Committee was
fulfilling its terms of reference effectively.
Shareholding voting
The table below sets out the voting by Shareholders on the resolution to approve the Directors’ Remuneration Report at the AGM held in April 2023.
Remuneration Report
For
209,599,282
(95.29%)
Against
10,370,788
(4.71%)
Total Votes Cast
219,970,070
(84.73%)
Withheld
15,680
The table below sets out the voting by Shareholders on the resolution to approve the current Directors’ Remuneration Policy at the AGM held
in April 2022.
Remuneration Policy
For
193,938,328
(90.47%)
Against
20,430,745
(9.53%)
Total Votes Cast
214,369,073
(82.57%)
Withheld
5,321,171
Annual General Meeting
This report will be submitted to Shareholders for approval at the Annual General Meeting to be held on 25 April 2024.
Penny Freer
Chair of the Remuneration Committee
29 February 2024
The Weir Group PLC Annual Report and Financial Statements 2023
132
Strategic Report
Governance
Financial Statements
Additional Information
Directors’ report
The Directors present their report for the year ended 31 December 2023.
Disclosures set out elsewhere in this Annual Report
The following cross-referenced material, which would otherwise be required to be disclosed in this Directors' Report, is incorporated into the
Director's Report.
Subject matter
Particulars of any important events, if any, affecting the Company which have occurred
since the end of the financial year
An indication of likely future developments in the business of the Company
An indication of the activities of the Company in the field of research and development
Details of employee policy and involvement
Details of engagement with other stakeholders
Greenhouse gas emissions and energy consumption
Principal risks and uncertainties
Section 172 statement
Corporate Governance Report
Page reference
208
16 to 17
30 to 31
26, 81 to 83
84 to 86
56 to 57
60 to 69
26, 81 to 86
71 to 132
Disclosures required under Listing Rule 9.8.4R
For the purposes of LR 9.8.4C, the information to be disclosed under the Listing Rule 9.8.4 is set out in the table below.
Subject matter
Shareholder waiver of dividends
(LR 9.8.4(12))
Page reference
134
Paragraphs (1), (2), (4), (5), (6), (7), (8), (9), (10), (11), (13) and (14) of Listing Rule 9.8.4 are not applicable.
Company number
The Weir Group PLC is registered in Scotland under company number SC002934 with its registered address at 10th Floor, 1 West Regent
Street, Glasgow, G2 1RW, Scotland.
2024 Annual General Meeting
The Annual General Meeting will be held on 25 April 2024 at 2.30pm at the Head Office, 1 West Regent Street, Glasgow, G2 1RW.
The Notice of Meeting, along with an explanation of the proposed resolutions, are set out in a separate document which accompanies this
Annual Report and can be downloaded from the Company’s website. The Company conducts the vote at the AGM by poll and the result of the
votes, including proxies, is published on the Company’s website after the meeting.
Dividend
The Directors have recommended a final dividend of 20.8p per share for the year ended 31 December 2023. Payment of this dividend is subject
to shareholder approval at the Annual General Meeting to be held on 25 April 2024.
Substantial shareholders
As at 31 December 2023, the following substantial interests in the Company's ordinary share capital had been notified to the Company in
accordance with Disclosure Guidance and Transparency Rule 5 (DTR 5). It should be noted that these holdings may have changed since the
Company was notified. However, notification of any change is not required until the next notifiable threshold under DTR 5 is crossed.
Shareholder
Baillie Gifford & Co
Black Creek Investment Management
Massachusetts Financial Services Company
Number of voting
rights
Percentage of voting
rights
12,917,453
13,130,259
12,955,326
4.98%
5.06%
4.99%
Between 31 December 2023 and 29 February 2024, the Company was notified of the following changes to the table above:
• On 6 February 2024, Black Creek Investment Management Inc. notified the Company that, on 2 February 2024, its interest in ordinary shares
had decreased to 12,910,988 (4.97% of voting rights).
• On 23 February 2024, Black Creek Investment Management Inc. notified the Company that, on 21 February 2024, its interest in ordinary
shares had increased to 12,993,988 (5.00% of voting rights).
The Weir Group PLC Annual Report and Financial Statements 2023
133
Strategic Report
Governance
Financial Statements
Additional Information
Directors’ report
continued
Employee-related information
The average number of employees in the Group during the period is given in note 5 to the Group Financial Statements on page 165.
Group companies operate within a framework of HR policies, practices and regulations appropriate to their market sector and country of
operation. Policies and procedures for recruitment, training and career development promote equality of opportunity regardless of gender,
sexual orientation, age, marital status, disability, race, religion or other beliefs and ethnic or national origin. At Weir, we strive to build an
inclusive culture in which all employees have the opportunity to succeed and to be able to do the best work of their lives. The Group remains
committed to the fair treatment of people with disabilities, including: giving full and fair consideration to applications made by people with
disabilities, having regard to their particular aptitudes and abilities; continuing the employment of, and arranging training for, employees who
have become disabled during the course of their employment; and offering training, career development and promotion opportunities for people
with disabilities. Meaningful dialogue with our employees is actively encouraged. Further details on our employees can be found on page 82.
Use of financial instruments
The information required in respect of financial instruments as required by Schedule 7 of The Large and Medium-sized Companies and Groups
(Accounts and Reports) Regulations 2008 is given in note 30 to the Group Financial Statements on page 201.
Share capital and rights attaching to the company’s shares
Details of the issued share capital of the Company, which comprises a single class of ordinary shares of 12.5p each are set out in note 25 to the
Group Financial Statements on page 193. The rights attaching to the shares are set out in the Company’s Articles of Association. There are no
special control rights in relation to the Company’s shares and the Company is not aware of any agreements between shareholders that may
result in restrictions on the transfer of securities and/or voting rights.
Voting rights
The Company’s Articles of Association provide that on a show of hands at a general meeting of the Company, every holder of ordinary shares
present in person and by proxy and entitled to vote shall have one vote and on a poll, every member present in person or by proxy and entitled
to vote shall have one vote for every ordinary share held.
The Notice of the AGM specifies deadlines for exercising voting rights and appointing a proxy or proxies to vote in relation to resolutions to be
passed at the AGM. The Company conducts the vote at the AGM by poll and the result of the poll will be released to the London Stock
Exchange and posted on the Company’s website as soon as practicable after the meeting.
The Articles of Association may only be amended by a special resolution passed at a general meeting of Shareholders.
Transfer of shares
There are no restrictions on the transfer of ordinary shares in the Company, other than as contained in the Articles of Association:
• The Directors may refuse to register any transfer of any certificated share which is not fully paid up, provided that this power will not be
exercised so as to disturb the market in the Company’s shares.
• The Directors may also refuse to register the transfer of a certificated share unless it is delivered to the Registrar’s office, or such other place
as the Directors have specified, accompanied by a certificate for the shares to be transferred and such other evidence as the Directors may
reasonably require to prove title of the intending transferor.
Certain restrictions may from time to time be imposed by laws and regulations, for example, insider trading laws, in relation to the transfer
of shares.
Employee benefit trust arrangements (including waiver of dividends)
The Group has a nominee arrangement with Computershare Investor Services PLC (the ‘Computershare Nominee’) and employee benefit
trusts with Estera Trust (Jersey) Limited (the ‘Estera EBT’) and Computershare Trustees (Jersey) Limited (the ‘Computershare EBT’).
The Computershare EBT purchased 1,246,700 shares in the market at an aggregate value of £24,042,263 on behalf of the Company for
satisfaction of any future vesting of the awards granted under the Share Reward Plan and the ShareBuilder plan.
During the period, the SRP vested and the trustees of the Computershare EBT transferred 439,191 ordinary shares to employees to satisfy the
SRP awards and transferred 2,160 shares to Computershare Nominee to be held on behalf of participants and subject to the rules of the SRP
Deferred Bonus Plan.
During the period, the ShareBuilder plan vested and the trustees of the Computershare EBT transferred 7,428 ordinary shares to employees to
satisfy the ShareBuilder plan awards.
Both the Estera EBT and Computershare Nominee agreed to waive any right to all dividend payments on shares held by them with the
exception of shares held in respect of awards which have a dividend entitlement.
Details of the shares held by the Computershare Nominee, the Computershare EBT and the Estera EBT are set out in note 25 to the Group
Financial Statements on page 193.
The 1,006,456 shares held in the Computershare Nominee are the shares in respect of which dividends have not been waived. The 180,523
shares held in the Computershare Nominee are subject to post vesting restrictions.
The Computershare Nominee held 0.39% of the issued share capital of the Company as at 31 December 2023. The shares are held on behalf
of employees and former employees of the Group.
The Computershare EBT held, through nominee account Computershare Nominees (Channel Islands) Limited, 0.65% of the issued share
capital of the Company as at 31 December 2023. This is held in trust on behalf of the Company for satisfaction of any future vesting of the
awards granted under the Share Reward and ShareBuilder Plans.
The voting rights in relation to these shares are exercised by the trustees. The Computershare EBT may vote or abstain from voting with the
shares or accept or reject any offer relating to shares, in any way they see fit, without incurring any liability and without being required to give
reasons for their decision.
The Weir Group PLC Annual Report and Financial Statements 2023
134
Strategic Report
Governance
Financial Statements
Additional Information
Directors’ report
continued
Authority to issue shares
At the 2023 Annual General Meeting, shareholders renewed the directors' authority to allot shares in the Company up to an aggregate nominal
amount equivalent to two thirds of the shares in issue (of which one third must be offered by way of rights issue). No shares were issued
under this authority during the year ended 31 December 2023.
A further special resolution passed at the 2023 Annual General Meeting granted authority to the directors to allot equity securities in the
Company for cash, without regard to the pre-emption provisions of the Companies Act 2006 in certain circumstances. No shares were issued
under this authority during the year ended 31 December 2023.
At the forthcoming Annual General Meeting, the Board will again seek shareholder approval to renew these authorities to allot shares.
Authority to purchase own shares
At the 2023 Annual General Meeting, shareholders renewed the Company’s authority to make market purchases of up to 25.9m ordinary
shares (representing approximately 10% of the issued share capital excluding treasury shares). No shares were purchased under this authority
during the year ended 31 December 2023. At the forthcoming Annual General Meeting, the Board will again seek shareholder approval to
renew the annual authority for the Company to make market purchases at the same level.
Directors
The names of the persons who were directors of the Company as at the date of this report are set out on pages 73 to 76. During the financial
year, the following individuals also acted as directors of the Company:
• Ebbie Haan (resigned 27 April 2023)
• Mary-Jo Jacobi (resigned 27 April 2023)
• John Heasley (resigned 30 November 2023)
• Clare Chapman (resigned 31 December 2023)
As announced on 5 December 2023, Brian Puffer will be appointed as director of the Company with effect from 1 March 2024.
Appointment and replacement of Directors
The provisions about the appointment and re-election of Directors of the Company are contained in the Articles of Association. Under the
terms of reference of the Nomination Committee, any appointment must be recommended by the Nomination Committee for approval by the
Board. All directors retire and seek election or re-election (as applicable) at each annual general meeting in line with the UK Corporate
Governance Code.
Powers of Directors
The business of the Company is managed by the Directors, who may exercise all the powers of the Company, subject to the provisions of the
Company’s Articles of Association, any special resolution of the Company and any relevant legislation.
Directors’ indemnities
The Company has granted indemnities to each of its Directors in respect of all losses arising out of or in connection with the execution of their
powers, duties and responsibilities as Directors to the extent permitted by the Companies Act 2006 and the Company’s Articles of Association.
In addition, Directors and Officers of the Company and its subsidiaries and trustees of its pension schemes are covered by Directors’ and
Officers’ liability insurance.
Pension scheme indemnities
The Group operates a closed defined benefit pension scheme in the UK which provides retirement and death benefits for employees and
former employees of the Group: The Weir Group Pension and Retirement Savings Scheme. The corporate trustee of the pension scheme is
The Weir Group Pension Trust Limited, a subsidiary of The Weir Group PLC. Qualifying pension scheme indemnity provisions, as defined in
section 235 of the Companies Act 2006, were in force for the financial year ended 31 December 2023 and remain in force for the benefit of
each of the Directors of The Weir Group Pension Trust Limited. These indemnity provisions cover, to the extent permitted by law, certain
losses or liabilities incurred as a Director or officer of the corporate trustees of the pension schemes.
Directors' share interests
Details regarding the share interests of the directors (and the persons closely associated with them) in the share capital of the Company are set
out in the Directors' Remuneration Report on page 128.
Change of control – significant agreements
The following significant agreements contain provisions entitling the counterparties to require prior approval, exercise termination, alteration or
similar rights in the event of a change of control of the Company.
The Group has in place a US$600m multi-currency revolving credit facility (the ‘Facility’) which is due to mature in April 2028. Under the terms
of this Facility, if there is a change of control of the Company, the Company has 30 days from the date of the change of control to agree terms
for continuing the Facility. If at the end of the 30 days no agreement is reached between the Company and the banks, then any lender may
request, by not less than 30 days’ notice to the Company, that its commitment be cancelled and all outstanding amounts be repaid to that
lender at the expiry of such notice period.
The Company has issued US$800m Sustainability-Linked Notes. If a Change of Control Repurchase Event occurs, the Company will be required
to make an offer to each Holder of the Notes to repurchase all or any part of the Notes of such Holders at a repurchase price in cash equal to
101% of the aggregate principal amount of the Notes repurchased, plus any accrued and unpaid interest on the Notes repurchased to, but
not including, the date of repurchase. A Change of Control Repurchase Event means the occurrence of both a Change of Control and a
Rating Event.
The Company has also issued £300m Sustainability-Linked Notes. If a Change of Control Repurchase Event occurs, the Company will be
required to make an offer to each Holder of the Notes to repurchase all or any part of the Notes of such Holders at a repurchase price in cash
equal to 101% of the aggregate principal amount of the Notes repurchased, plus any accrued and unpaid interest on the Notes repurchased to,
but not including, the date of repurchase. A Change of Control Repurchase Event means the occurrence of both a Change of Control and a
Rating Event.
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Governance
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Additional Information
Directors’ report
continued
There are no agreements between the Company and its Directors or employees providing for compensation for loss of office or employment
(whether through resignation, purported redundancy or otherwise) that occurs because of a takeover bid.
Political donations
The Group did not make any political donations or incur any political expenditure, or make any contributions to a non-UK political party, during
the year.
Branches
The Company, through various subsidiaries, has established branches in a number of different countries in which the Group operates.
Disclaimer and forward-looking statements
This Annual Report has been prepared for, and only for, the members of the Company, as a body, and no other persons. The Company, its
directors, employees, agents and advisers, do not accept or assume responsibility to any other person to whom this document is shown or into
whose hands it may come, and any such responsibility or liability is expressly disclaimed. This Annual Report may contain statements that are
not based on current or historical fact and/or that are forward-looking in nature. Please refer to the cautionary statement on page 1.
Disclosure of information to auditor
Each of the directors who held office at the date of approval of this Directors' Report confirms that:
• so far as each Director is aware, there is no relevant audit information (as defined by section 418 of the Companies Act 2006) of which the
Company’s auditors are unaware; and
• each Director has taken all of the steps that they ought to have taken as a director to make themselves aware of any relevant audit
information and to establish that the Company’s auditors are aware of that information.
Going concern
These financial statements have been prepared on the going concern basis.
As discussed in the Chief Executive Officer’s review, the Group capitalised on positive conditions in the mining markets in 2023 and executed
strongly, delivering year-on-year growth in revenue and operating profit, significantly expanding operating margins and meeting our cash
conversion target.
As discussed in the Financial Review, the Group has extended the maturity profile of its debt financing, with the issue of £300m five-year
Sustainability-Linked Notes due to mature in June 2028, and exercise of the one year extension of the Revolving Credit Facility to April 2028.
As a result of strong cash generation in the year, the Group reduced its Revolving Credit Facility by US$200m to US$600m in February 2024.
Following these actions, the Group retains substantial levels of liquidity over the medium term.
While the Group has delivered strong financial results in the current year and enters 2024 with a strong order book, supportive mining markets
and a clear strategy to capitalise on the attractive long-term structural trends in our markets, macroeconomic and geopolitical uncertainty
persists. Recognising these uncertainties, the Group performed financial modelling of future cash flows, which cover a period of 12 months
from the approval of the 2023 Annual Report and Financial Statements.
The financial modelling included reverse stress testing which focused on the level of downside risk which would be required for the Group to
breach its current lending facilities (note 20 to the Group Financial Statements) and related financial covenants (note 31 to the Group Financial
Statements). The review indicated that the Group continues to have sufficient headroom on both lending facilities and related financial
covenants. The circumstances which would lead to a breach are not considered plausible.
The Directors, having considered all available relevant information, have a reasonable expectation that the Group has adequate resources to
continue to operate as a going concern.
The Directors’ Report has been approved by the Board of Directors in accordance with the Companies Act 2006.
On behalf of the Board of Directors
Graham Vanhegan
Chief Legal Officer and Company Secretary
29 February 2024
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Additional Information
Statement of Directors’ responsibilities
The Directors are responsible for preparing the Annual Report
and the Financial Statements in accordance with applicable law
and regulations.
Company law requires the Directors to prepare financial statements
for each financial year. Under that law, the Directors have prepared
the Group financial statements in accordance with both international
accounting standards in conformity with the requirements of the
Companies Act 2006 and UK-adopted International Accounting
Standards and the Company financial statements in accordance with
United Kingdom Generally Accepted Accounting Practice (United
Kingdom Accounting Standards, comprising FRS 101 ‘Reduced
Disclosure Framework’, and applicable law.)
Under company law, the Directors must not approve the financial
statements unless they are satisfied that they give a true and fair
view of the state of affairs of the Group and Company and of the
profit or loss of the Group for that period. In preparing the financial
statements, the directors are required to:
• Select suitable accounting policies and then apply
them consistently;
• State whether applicable international accounting standards in
conformity with the requirements of the Companies Act 2006 and
the UK-adopted International Accounting Standards, have been
followed for the group financial statements and United Kingdom
Accounting Standards, comprising FRS 101 have been followed for
the company financial statements, subject to any material
departures disclosed and explained in the financial statements;
Each of the Directors, as at the date of this report, confirms to the
best of their knowledge that:
• The Group financial statements, which have been prepared in
accordance with international accounting standards in conformity
with the requirements of the Companies Act 2006 and the UK-
adopted International Accounting Standards, give a true and fair
view of the assets, liabilities, financial position and profit of
the Group;
• The Company financial statements, which have been prepared in
accordance with United Kingdom Accounting Standards,
comprising FRS 101, give a true and fair view of the assets,
liabilities, financial position and profit of the Company; and
• The Strategic Report and the Directors’ Report include a fair
review of the development and performance of the business and
the position of the Group and Company, together with a
description of the principal risks and uncertainties that it faces.
In the case of each Director in office at the date the Directors’ Report
is approved:
• so far as the Director is aware, there is no relevant audit
information of which the Group’s and Company’s auditors are
unaware; and
• they have taken all the steps that they ought to have taken as a
Director in order to make themselves aware of any relevant audit
information and to establish that the Group’s and Company’s
auditors are aware of that information.
• Make judgements and estimates that are reasonable and prudent;
On behalf of the Board of Directors
• Prepare the financial statements on the going concern basis unless
it is inappropriate to presume that the Group and Company will
continue in business.
The Directors are also responsible for safeguarding the assets of the
Group and Company and hence for taking reasonable steps for the
prevention and detection of fraud and other irregularities.
The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Group’s and
Company’s transactions and disclose with reasonable accuracy at
any time the financial position of the Group and Company and enable
them to ensure that the financial statements comply with the
Companies Act 2006.
The Directors are responsible for the maintenance and integrity of
the company’s website. Legislation in the United Kingdom governing
the preparation and dissemination of financial statements may differ
from legislation in other jurisdictions.
The Directors consider that the Annual Report and Financial
Statements, taken as a whole, are fair, balanced and understandable
and provide the information necessary for Shareholders to assess the
Group’s performance, business model and strategy.
Jon Stanton
Chief Executive Officer
29 February 2024
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Additional Information
Independent auditors’ report to the members of
The Weir Group PLC
Report on the audit of the financial statements
Opinion
In our opinion:
• The Weir Group PLC’s Group financial statements and Company financial statements (the “financial statements”) give a true and fair view of
the state of the Group’s and of the Company’s affairs as at 31 December 2023 and of the Group’s profit and the Group’s cash flows for the
year then ended;
• The Group financial statements have been properly prepared in accordance with UK-adopted International Accounting Standards as applied in
accordance with the provisions of the Companies Act 2006;
• The Company financial statements have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice
(United Kingdom Accounting Standards, including FRS 101 “Reduced Disclosure Framework”, and applicable law); and
• The financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
We have audited the financial statements, included within the Annual Report and Financial Statements 2023 (the “Annual Report”), which
comprise: the Consolidated and Company Balance Sheets as at 31 December 2023; the Consolidated Income Statement, the Consolidated
Statement of Comprehensive Income, the Consolidated Cash Flow Statement, and the Consolidated and Company Statements of Changes in
Equity for the year then ended; and the notes to the financial statements, comprising material accounting policy information and other
explanatory information.
Our opinion is consistent with our reporting to the Audit Committee.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and applicable law. Our responsibilities under
ISAs (UK) are further described in the Auditors’ responsibilities for the audit of the financial statements section of our report. We believe that
the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Independence
We remained independent of the Group in accordance with the ethical requirements that are relevant to our audit of the financial statements in
the UK, which includes the FRC’s Ethical Standard, as applicable to listed public interest entities, and we have fulfilled our other ethical
responsibilities in accordance with these requirements.
To the best of our knowledge and belief, we declare that non-audit services prohibited by the FRC’s Ethical Standard were not provided.
Other than those disclosed in note 5 of Notes to the Group Financial Statements, we have provided no non-audit services to the Company or its
controlled undertakings in the period under audit.
Our audit approach
Context
The Group is organised into two continuing Divisions: Minerals and ESCO. On 1 February 2021, the Group completed its disposal of the
majority of the Oil & Gas Division, and the disposal of the Group’s shareholding in the remaining joint venture in the Oil & Gas Division was
completed on 30 June 2021. The sale of the Oil & Gas Division has been disclosed as a discontinued operation in the current and prior year.
Each continuing division conducts its business in a number of locations around the world. Many of the business locations (or components) are
of a similar size, so we scoped our audit to ensure we had appropriate coverage of the Group. We included components that accounted for the
largest share of the Group’s results or where we considered there to be areas of significant risk.
Overview
Audit scope
• We conducted audit work on 13 components in seven countries. We conducted full scope audits on seven of these components, specified
scope on three components and specified procedures on the remaining three components.
• The 13 components where we performed audit work accounted for 69% of total Group revenue and 61% of adjusted profit before tax from
continuing operations.
Key audit matters
• Valuation of pension liabilities (Group and Company)
• Accounting for asbestos-related claims (Group)
Materiality
• Overall Group materiality: £20,300,000 (2022: £17,375,000) based on 5% of profit before tax and adjusting items from continuing operations.
• Overall Company materiality: £18,000,000 (2022: £15,000,000) based on 1% of net assets.
• Performance materiality: £15,251,000 (2022: £13,031,250) (Group) and £13,500,000 (2022: £11,250,000) (Company).
The scope of our audit
As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the financial statements.
Key audit matters
Key audit matters are those matters that, in the auditors’ professional judgement, were of most significance in the audit of the financial
statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud)
identified by the auditors, including those which had the greatest effect on: the overall audit strategy; the allocation of resources in the audit;
and directing the efforts of the engagement team. These matters, and any comments we make on the results of our procedures thereon, were
addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a
separate opinion on these matters.
This is not a complete list of all risks identified by our audit.
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Additional Information
Independent auditors’ report to the members of
The Weir Group PLC
continued
Valuation of pension assets (Group and Company), which was a key audit matter last year, is no longer included because of the reduction of the
audit risk associated with the valuation of pension assets as a result of the 2023 pension buy-in which has significantly decreased the volume of
complex invested assets. Otherwise, the key audit matters below are consistent with last year.
Key audit matter
Valuation of pension liabilities (Group and Company)
Note 2 to the Group financial statements – Accounting policies –
Note 1 to the Company financial statements – Accounting policies –
Note 24 to the Group financial statements – Retirement benefits –
Note 8 to the Company financial statements – Retirement benefits
– Audit Committee report
How our audit addressed the key audit matter
We reviewed the independent actuary’s report on the assumptions
and methodology used to calculate the pension liabilities and
compliance of management’s approach with the relevant
accounting standard IAS 19 ‘Employee Benefits’ (Revised). We
used our actuarial experts to assess whether the assumptions used
in calculating the pension liabilities are reasonable by:
The Group operates a number of defined benefit pension plans,
giving rise to a defined benefit obligation of £712.9m as at 31
December 2023 (2022: £719.2m). In respect of the Company, there
is a liability of £563.4m as at 31 December 2023 (2022: £560.1m).
These balances are significant in the context of the overall
Balance Sheet of the Group and of the Company. The valuation of
pension liabilities requires judgement and technical expertise in
choosing appropriate assumptions such as discount rate, inflation
and mortality.
Management engaged external actuarial experts to assist them in
selecting appropriate assumptions and to calculate the liabilities.
Inappropriate selection of assumptions or methodologies for
calculating the pension liabilities could result in a material difference
in the value of the liabilities. The use of a regulated and qualified
3rd party mitigates the risk to a degree, however it remains a
judgemental area with significant values involved.
Accounting for asbestos related claims (Group)
Note 2 to the Group financial statements – Accounting policies –
Note 22 to the Group financial statements – Provisions – Audit
Committee report
Total asbestos related provisions as at 31 December 2023
amounted to £78.7m (2022: £55.2m). This consists of a provision
of £76.2m (2022: £52.7m) for the Group’s liabilities arising
from asbestos-related damages claims in the US and £2.5m
(2022: £2.5m) in the UK.
The valuation of the liability involves significant estimation. In
arriving at the estimate of the liability, management is required to
make assumptions that include the number and value of claims and
the time period over which the liability can be reliably measured.
As a result, there is a high degree of uncertainty in this estimate
and management uses an independent actuary to assist with
this assessment.
The Group has insurance cover in place to partially offset the US
provision of £14.9m as at 31 December 2023 (2022: £32.0m) which
is recognised within other receivables. After deduction of the
insurance asset there is a net provision for the estimated uninsured
US liability of £61.3m (2022: £20.7m).
• Assessing whether mortality assumptions are appropriate in line
with the demographics of each significant plan and, where
applicable, with UK industry benchmarks;
• Verifying that the methodology of the discount and inflation rate
assumptions is in line with the accounting framework and the
position of the assumptions are within our acceptable ranges;
and
• Performing independent testing of the roll-forward approach to
calculate the liabilities for the significant plans and compared
against management’s actuary’s results.
Based on our procedures, we concluded management’s key
assumptions individually and collectively were acceptable.
We assessed the related disclosures included in the Group and
Company financial statements and consider them to be appropriate
and in compliance with IAS 19.
We performed procedures on both the UK and US asbestos
liabilities. The US provision is the more significant and has a greater
level of estimation uncertainty.
Management obtains a triennial actuarial estimate of the US
asbestos liability from an independent expert and the most recent
assessment was performed by external actuarial consultants in
2023. We involved our PwC actuarial experts to assess the 2023
valuation and the reasonableness of the methodology used by the
independent expert.
We evaluated management’s underlying assumptions used in its
calculation which included testing of:
• The mathematical accuracy of the underlying calculations in
management’s model;
• The input data to management’s model, such as the average
cost per claim and the number of settled claims to source data,
which we verified directly with the Group’s external lawyers and
to the independent actuarial assessment; and
• The reasonableness of forecast number and value of claims to be
settled to the actuarial assessment for the period of provision.
We evaluated the appropriateness of management’s assessment
of the timescale over which a liability can be reliably measured,
which remains at 10 years plus cash flows for a further 6 years. We
also examined the insurance cover held by the Group and
recalculated the expected date of insurance exhaustion to be in line
with that disclosed by management. In addition, we validated that
the insurance cover remains active and currently continues to settle
claims as expected.
We tested the reasonableness of the provision made for the
estimated uninsured liability.
Finally, we tested the disclosures in the financial statements and
checked for compliance with IAS 37 ‘Provisions, Contingent
Liabilities and Contingent Assets’ and IAS 1 ‘Presentation of
Financial Statements’ and consider them to be appropriate.
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Governance
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Additional Information
Independent auditors’ report to the members of
The Weir Group PLC
continued
How we tailored the audit scope
We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on the financial statements as a
whole, taking into account the structure of the Group and the Company, the accounting processes and controls, and the industry in which
they operate.
The Group is organised into two continuing Divisions: Minerals and ESCO. On 1 February 2021, the Group completed its disposal of the
majority of the Oil & Gas Division, and the disposal of the Group’s shareholding in the remaining joint venture in the Oil & Gas Division was
completed on 30 June 2021. The sale of the Oil & Gas Division has been disclosed as a discontinued operation in the current and prior year.
Each continuing division conducts its business in a number of locations around the world. Many of the business locations (or components) are
of a similar size, so we scoped our audit to ensure we had appropriate coverage of the Group. We included components that accounted for the
largest share of the Group’s results or where we considered there to be areas of significant risk.
The Group’s components vary significantly in size and we identified seven components that, in our view, required an audit of their complete
financial information due to their relative size or risk characteristics. Of these full scope component audits, two were based in the UK and were
performed by members of the Group engagement team. These covered central functions and Head Office managed balances, including the
asbestos provision, treasury, uncertain tax provisions, post-retirement benefits, goodwill, intangibles and the consolidation.
The remaining five full scope component audits were performed by other PwC network firms. Other PwC network firms also performed
specific scope audits over a further three components, which covered all line items on the income statement and specified line items on the
balance sheet. Specified procedures audits were performed on the remaining three components and this work was completed by the Group
audit team.
The scope of work at each component was determined by its contribution to the Group’s overall financial performance or balance sheet and its
risk profile. Where component audits were performed by teams from other PwC network firms, members of the Group engagement team
were involved in their work throughout the audit. We maintained regular communication and conducted formal interim and year end video calls
with all full and specified scope component teams. The discussions during the audit also included divisional management. Members of the
Group audit team visited one of our overseas locations.
Of the 13 components in scope, we deemed three to be financially significant to the Group.
The impact of climate risk on our audit
Our Group and component audits considered the impact of climate change. As part of our audit, we made enquiries with management to
understand the process adopted to assess the extent of the potential impact of climate risk on the Group's financial statements and to support
the disclosures made in the Sustainability review in the Strategic report. We also read the Group's governance process in response to climate
risk and read additional reporting made by the Group including its Carbon Disclosure Project ("CDP") public submission. Our testing involved:
• Making enquiries with local and Group management and the Group sustainability team to obtain their risk assessment and understand the
governance processes in place to address climate risk impacts;
• Reviewing the Group’s CDP submission made during 2023; and
• Obtaining an understanding of the carbon reduction commitments made by the Group and the impact of these on the financial statements.
In 2023, the Group's scope 1, 2 and 3 emissions reduction targets were approved by the Science Based Targets Initiative (SBTi). The targets
include absolute reductions in scope 1 and 2 emissions of 30% and scope 3 emissions of 15% by 2030, versus a 2019 baseline. Management
does not consider the annual capital expenditure and operating costs required to deliver the plan across the target period to be material to the
financial plans of the Group.
Using our knowledge of the business, we focused our work on how the impact of climate commitments made by the Group would impact the
assumptions within the discounted cash flows prepared by management that are used in the Group's goodwill and indefinite life asset
impairment tests. We also evaluated whether the impact of both physical and transitional risks had been appropriately included in
management's going concern and viability assessments.
We challenged the completeness of management's climate impact assessment by reading the external reporting made by management,
including the CDP submission in 2023, as well as internal climate plans and board minutes. We also considered the completeness of the impact
on financial statement line items by comparing management’s assessment of the impact of climate risk, including the potential impact on the
underlying assumptions and estimates as outlined in the basis of preparation in note 1 of the Notes to the Group Financial Statements.
Finally, we assessed the consistency of the information in the front half of the Annual Report regarding Task Force on Climate-Related Financial
Disclosures (TCFD) and the financial statements.
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Governance
Financial Statements
Additional Information
Independent auditors’ report to the members of
The Weir Group PLC
continued
Materiality
The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds for materiality. These, together
with qualitative considerations, helped us to determine the scope of our audit and the nature, timing and extent of our audit procedures on the
individual financial statement line items and disclosures and in evaluating the effect of misstatements, both individually and in aggregate on the
financial statements as a whole.
Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:
Overall materiality
£20,300,000 (2022: £17,375,000).
£18,000,000 (2022: £15,000,000).
Financial statements - Group
Financial statements - Company
How we determined it
5% of profit before tax and adjusting items
from continuing operations.
1% of net assets.
Rationale for benchmark
applied
It is clear from the Annual Report that this
profit measure is used by shareholders in
evaluating the underlying business
performance. We applied a lower materiality
to the audit of exceptional items.
The nature of the Company’s activities supports a net asset basis
for the calculation of materiality.
For each component in the scope of our Group audit, we allocated a materiality that is less than our overall Group materiality. The range of
materiality allocated across components was between £600,000 and £14,000,000. Certain components were audited to a local statutory audit
materiality that was also less than our overall Group materiality.
We use performance materiality to reduce to an appropriately low level the probability that the aggregate of uncorrected and undetected
misstatements exceeds overall materiality. Specifically, we use performance materiality in determining the scope of our audit and the nature
and extent of our testing of account balances, classes of transactions and disclosures, for example in determining sample sizes. Our
performance materiality was 75% (2022: 75%) of overall materiality, amounting to £15,251,000 (2022: £13,031,250) for the Group financial
statements and £13,500,000 (2022: £11,250,000) for the Company financial statements.
In determining the performance materiality, we considered a number of factors - the history of misstatements, risk assessment and
aggregation risk and the effectiveness of controls - and concluded that an amount at the upper end of our normal range was appropriate.
We agreed with the Audit Committee that we would report to them misstatements identified during our audit above £1,000,000 (Group audit)
(2022: £868,000) and £900,000 (Company audit) (2022: £750,000) as well as misstatements below those amounts that, in our view, warranted
reporting for qualitative reasons.
Conclusions relating to going concern
Our evaluation of the directors’ assessment of the Group's and the Company’s ability to continue to adopt the going concern basis of
accounting included:
• Review and evaluation of management’s cash flow forecasts and the process by which they were determined and approved, agreeing the
forecasts with the latest Board approved budgets and confirming the mathematical accuracy of underlying calculations;
• Assessment of management’s forecast assumptions for base case and severe but plausible downside scenarios on the Group’s ability to
continue as a going concern; and
• Consideration of the Group’s liquidity and availability of financing to support the going concern basis of accounting.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or
collectively, may cast significant doubt on the Group's and the Company’s ability to continue as a going concern for a period of at least twelve
months from when the financial statements are authorised for issue.
In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of accounting in the preparation of
the financial statements is appropriate.
However, because not all future events or conditions can be predicted, this conclusion is not a guarantee as to the Group's and the Company's
ability to continue as a going concern.
In relation to the directors’ reporting on how they have applied the UK Corporate Governance Code, we have nothing material to add or draw
attention to in relation to the directors’ statement in the financial statements about whether the directors considered it appropriate to adopt the
going concern basis of accounting.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
Reporting on other information
The other information comprises all of the information in the Annual Report other than the financial statements and our auditors’ report
thereon. The directors are responsible for the other information. Our opinion on the financial statements does not cover the other
information and, accordingly, we do not express an audit opinion or, except to the extent otherwise explicitly stated in this report, any form
of assurance thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether
the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be
materially misstated. If we identify an apparent material inconsistency or material misstatement, we are required to perform procedures to
conclude whether there is a material misstatement of the financial statements or a material misstatement of the other information. If, based on
the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report based on these responsibilities.
With respect to the Strategic report and Directors' report, we also considered whether the disclosures required by the UK Companies Act 2006
have been included.
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Governance
Financial Statements
Additional Information
Independent auditors’ report to the members of
The Weir Group PLC
continued
Based on our work undertaken in the course of the audit, the Companies Act 2006 requires us also to report certain opinions and matters as
described below.
Strategic report and Directors’ report
In our opinion, based on the work undertaken in the course of the audit, the information given in the Strategic report and Directors' report
for the year ended 31 December 2023 is consistent with the financial statements and has been prepared in accordance with applicable
legal requirements.
In light of the knowledge and understanding of the Group and Company and their environment obtained in the course of the audit, we did not
identify any material misstatements in the Strategic report and Directors' report.
Directors’ Remuneration
In our opinion, the part of the Directors' remuneration report to be audited has been properly prepared in accordance with the Companies
Act 2006.
Corporate governance statement
The Listing Rules require us to review the directors’ statements in relation to going concern, longer-term viability and that part of the corporate
governance statement relating to the Company’s compliance with the provisions of the UK Corporate Governance Code specified for our
review. Our additional responsibilities with respect to the corporate governance statement as other information are described in the Reporting
on other information section of this report.
Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the corporate governance
statement is materially consistent with the financial statements and our knowledge obtained during the audit, and we have nothing material to
add or draw attention to in relation to:
• The directors’ confirmation that they have carried out a robust assessment of the emerging and principal risks;
• The disclosures in the Annual Report that describe those principal risks, what procedures are in place to identify emerging risks and an
explanation of how these are being managed or mitigated;
• The directors’ statement in the financial statements about whether they considered it appropriate to adopt the going concern basis of
accounting in preparing them, and their identification of any material uncertainties to the Group’s and Company’s ability to continue to do so
over a period of at least twelve months from the date of approval of the financial statements;
• The directors’ explanation as to their assessment of the Group's and Company’s prospects, the period this assessment covers and why the
period is appropriate; and
• The directors’ statement as to whether they have a reasonable expectation that the Company will be able to continue in operation and meet
its liabilities as they fall due over the period of its assessment, including any related disclosures drawing attention to any necessary
qualifications or assumptions.
Our review of the directors’ statement regarding the longer-term viability of the Group and Company was substantially less in scope than an
audit and only consisted of making inquiries and considering the directors’ process supporting their statement; checking that the statement is
in alignment with the relevant provisions of the UK Corporate Governance Code; and considering whether the statement is consistent with
the financial statements and our knowledge and understanding of the Group and Company and their environment obtained in the course of
the audit.
In addition, based on the work undertaken as part of our audit, we have concluded that each of the following elements of the corporate
governance statement is materially consistent with the financial statements and our knowledge obtained during the audit:
• The directors’ statement that they consider the Annual Report, taken as a whole, is fair, balanced and understandable, and provides the
information necessary for the members to assess the Group’s and Company's position, performance, business model and strategy;
• The section of the Annual Report that describes the review of effectiveness of risk management and internal control systems; and
• The section of the Annual Report describing the work of the Audit Committee.
We have nothing to report in respect of our responsibility to report when the directors’ statement relating to the Company’s compliance with
the Code does not properly disclose a departure from a relevant provision of the Code specified under the Listing Rules for review by the
auditors.
Responsibilities for the financial statements and the audit
Responsibilities of the Directors for the financial statements
As explained more fully in the Statement of directors’ responsibilities, the directors are responsible for the preparation of the financial
statements in accordance with the applicable framework and for being satisfied that they give a true and fair view. The directors are also
responsible for such internal control as they determine is necessary to enable the preparation of financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the Group’s and the Company’s ability to continue as a going
concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either
intend to liquidate the Group or the Company or to cease operations, or have no realistic alternative but to do so.
Auditors’ responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement,
whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but
is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected
to influence the economic decisions of users taken on the basis of these financial statements.
The Weir Group PLC Annual Report and Financial Statements 2023
142
Strategic Report
Governance
Financial Statements
Additional Information
Independent auditors’ report to the members of
The Weir Group PLC
continued
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities,
outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of
detecting irregularities, including fraud, is detailed below.
Based on our understanding of the Group and industry, we identified that the principal risks of non-compliance with laws and regulations related
to the Listing Rules, the Companies Act 2006 and UK and overseas tax legislation, and we considered the extent to which non-compliance
might have a material effect on the financial statements. We evaluated management’s incentives and opportunities for fraudulent manipulation
of the financial statements (including the risk of override of controls), and determined that the principal risks were related to posting manual
journal entries to manipulate financial performance and management bias through judgements and assumptions in significant accounting
estimates. The Group engagement team shared this risk assessment with the component auditors so that they could include appropriate
audit procedures in response to such risks in their work. Audit procedures performed by the Group engagement team and/or component
auditors included:
• Discussions with management, internal audit and Group General Counsel, including consideration of known or suspected instances of non
compliance with laws and regulations and fraud or matters reported on the Group’s Ethics Hotline;
• Evaluation of management’s controls designed to prevent and detect irregularities;
• Review of Board Minutes;
• Challenging assumptions and judgements made by management in its significant accounting estimates, in particular in relation to the
classification of costs as exceptional; and
• Identifying and testing journal entries, in particular any journal entries posted by senior management or unexpected users and unusual
account combinations.
There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-compliance with
laws and regulations that are not closely related to events and transactions reflected in the financial statements. Also, the risk of not detecting a
material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate
concealment by, for example, forgery or intentional misrepresentations, or through collusion.
Our audit testing might include testing complete populations of certain transactions and balances, possibly using data auditing techniques.
However, it typically involves selecting a limited number of items for testing, rather than testing complete populations. We will often seek to
target particular items for testing based on their size or risk characteristics. In other cases, we will use audit sampling to enable us to draw a
conclusion about the population from which the sample is selected.
A further description of our responsibilities for the audit of the financial statements is located on the FRC’s website at: www.frc.org.uk/
auditorsresponsibilities. This description forms part of our auditors’ report.
Use of this report
This report, including the opinions, has been prepared for and only for the Company’s members as a body in accordance with Chapter 3 of Part
16 of the Companies Act 2006 and for no other purpose. We do not, in giving these opinions, accept or assume responsibility for any other
purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior
consent in writing.
Other required reporting
Companies Act 2006 exception reporting
Under the Companies Act 2006 we are required to report to you if, in our opinion:
• We have not obtained all the information and explanations we require for our audit; or
• Adequate accounting records have not been kept by the Company, or returns adequate for our audit have not been received from branches
not visited by us; or
• Certain disclosures of directors’ remuneration specified by law are not made; or
• The Company financial statements and the part of the Directors' remuneration report to be audited are not in agreement with the accounting
records and returns.
We have no exceptions to report arising from this responsibility.
Appointment
Following the recommendation of the Audit Committee, we were appointed by the members on 28 April 2016 to audit the financial statements
for the year ended 31 December 2016 and subsequent financial periods. The period of total uninterrupted engagement is eight years, covering
the years ended 31 December 2016 to 31 December 2023.
Other matter
In due course, as required by the Financial Conduct Authority Disclosure Guidance and Transparency Rule 4.1.14R, these financial statements
will form part of the ESEF-prepared annual financial report filed on the National Storage Mechanism of the Financial Conduct Authority in
accordance with the ESEF Regulatory Technical Standard (‘ESEF RTS’). This auditors’ report provides no assurance over whether the annual
financial report will be prepared using the single electronic format specified in the ESEF RTS.
Kenneth Wilson (Senior Statutory Auditor)
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
Glasgow
29 February 2024
The Weir Group PLC Annual Report and Financial Statements 2023
143
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Financial Statements
Additional Information
Consolidated Income Statement
for the year ended 31 December 2023
Year ended 31 December 2023
Year ended 31 December 2022
Adjusted
results
Adjusting
items
(note 6)
Statutory
results
Notes
£m
£m
£m
Adjusted
results
£m
Adjusting
items
(note 6)
£m
Statutory
results
£m
4
2,636.0
—
2,636.0
2,472.1
—
2,472.1
Share of results of joint ventures
16
2.5
—
Continuing operations
Revenue
Continuing operations
Operating profit before share of results of joint
ventures
Operating profit
Finance costs
Finance income
Profit before tax from continuing operations
Tax (expense) credit
Profit for the year from continuing operations
(Loss) profit for the year from discontinued
operations
Profit (loss) for the year
Attributable to:
Equity holders of the Company
Non-controlling interests
Earnings per share
Basic – total operations
Basic – continuing operations
Diluted – total operations
Diluted – continuing operations
7
7
8
9
10
456.3
(90.4)
458.8
(90.4)
(66.4)
18.7
411.1
(110.9)
300.2
—
300.2
—
—
(90.4)
20.1
(70.3)
(1.3)
(71.6)
365.9
2.5
368.4
(66.4)
18.7
320.7
(90.8)
229.9
(1.3)
228.6
392.3
(87.3)
2.5
—
394.8
(87.3)
(51.0)
3.7
347.5
(92.5)
255.0
—
—
(87.3)
44.9
(42.4)
1.2
—
256.2
(42.4)
305.0
2.5
307.5
(51.0)
3.7
260.2
(47.6)
212.6
1.2
213.8
299.5
(71.6)
0.7
—
300.2
(71.6)
227.9
0.7
228.6
255.8
(42.4)
0.4
—
256.2
(42.4)
213.4
0.4
213.8
115.9p
115.3p
88.2p
88.7p
87.7p
88.2p
98.4p
97.8p
82.5p
82.0p
82.0p
81.5p
The Weir Group PLC Annual Report and Financial Statements 2023
144
Strategic Report
Governance
Financial Statements
Additional Information
Consolidated Statement of Comprehensive Income
for the year ended 31 December 2023
Profit for the year
Other comprehensive (expense) income
Losses taken to equity on cash flow hedges
Cost of hedging taken to equity on fair value hedges
Exchange (losses) gains on translation of foreign operations
Reclassification of foreign currency translation reserve on disposal of operations
Exchange gains (losses) on net investment hedges
Reclassification adjustments on cash flow hedges
Reclassification adjustments on fair value hedges
Tax credit (charge) relating to above items
Items that are or may be reclassified to profit or loss in subsequent periods
Other comprehensive (expense) income not to be reclassified to profit or loss in subsequent
periods:
Remeasurements on defined benefit plans
Tax credit (charge) relating to above item
Items that will not be reclassified to profit or loss in subsequent periods
Net other comprehensive (expense) income
Total net comprehensive income for the year
Attributable to:
Equity holders of the Company
Non-controlling interests
Total net comprehensive income (expense) for the year attributable to equity holders of the
Company
Continuing operations
Discontinued operations
Year ended
Year ended
31 December
2023
31 December
2022
£m
228.6
£m
213.8
Notes
(0.4)
(0.8)
(159.1)
—
27.6
0.5
0.1
0.1
(132.0)
—
—
223.1
0.1
(124.9)
0.5
—
(0.1)
98.7
(28.2)
7.1
(21.1)
65.3
(16.3)
49.0
(153.1)
147.7
75.5
361.5
76.1
(0.6)
75.5
77.4
(1.3)
76.1
360.8
0.7
361.5
359.6
1.2
360.8
8
24
8
9
The Weir Group PLC Annual Report and Financial Statements 2023
145
Strategic Report
Governance
Financial Statements
Additional Information
Strategic Report
Governance
Financial Statements
Additional Information
Consolidated Balance Sheet
at 31 December 2023
Consolidated Cash Flow Statement
for the year ended 31 December 2023
ASSETS
Non-current assets
Property, plant & equipment
Intangible assets
Investments in joint ventures
Deferred tax assets
Other receivables
Retirement benefit plan assets
Total non-current assets
Current assets
Inventories
Trade & other receivables
Derivative financial instruments
Income tax receivable
Cash & short-term deposits
Total current assets
Total assets
LIABILITIES
Current liabilities
Interest-bearing loans & borrowings
Trade & other payables
Derivative financial instruments
Income tax payable
Provisions
Total current liabilities
Non-current liabilities
Interest-bearing loans & borrowings
Other payables
Derivative financial instruments
Provisions
Deferred tax liabilities
Retirement benefit plan deficits
Total non-current liabilities
Total liabilities
NET ASSETS
CAPITAL & RESERVES
Share capital
Share premium
Merger reserve
Treasury shares
Capital redemption reserve
Foreign currency translation reserve
Hedge accounting reserve
Retained earnings
Shareholders' equity
Non-controlling interests
TOTAL EQUITY
Other proceeds from sale of property, plant & equipment and intangible assets
Disposals of discontinued operations, net of cash disposed and disposal costs
Total operations
Cash flows from operating activities
Cash generated from operations
Additional pension contributions paid
Exceptional and other adjusting cash items
Exceptional cash items - acquired vendor liabilities
Income tax paid
Net cash generated from operating activities
Cash flows from investing activities
Acquisitions of subsidiaries, net of cash acquired
Purchases of property, plant & equipment
Purchases of intangible assets
Exceptional cash item - disposal of ESCO Russia
Interest received
Dividends received from joint ventures
Net cash used in investing activities
Cash flows from financing activities
Proceeds from borrowings
Repayments of borrowings
Lease payments
Settlement of external debt of subsidiary on acquisition
Settlement of derivative financial instruments
Interest paid
Dividends paid to equity holders of the Company
Dividends paid to non-controlling interests
Purchase of shares for employee share plans
Net cash used in financing activities
Net increase (decrease) in cash & cash equivalents
Cash & cash equivalents at the beginning of the year
Foreign currency translation differences
Cash & cash equivalents at the end of the year
The cash flows from discontinued operations included above are disclosed separately in note 9.
Year ended
Year ended
31 December
31 December
2023
£m
2022
£m
525.5
(9.3)
(18.0)
—
(103.9)
394.3
(6.9)
(79.1)
(7.6)
4.2
(0.4)
—
15.1
4.1
(70.6)
512.6
(627.6)
(31.0)
(0.2)
(0.5)
(55.0)
(95.9)
(0.9)
(24.0)
1.2
477.5
(31.3)
447.4
447.8
(9.7)
(14.2)
(9.7)
(93.4)
320.8
(15.2)
(56.1)
(6.6)
4.4
(0.1)
(2.0)
4.6
2.7
(68.3)
822.8
(958.9)
(30.5)
—
(0.3)
(49.9)
(66.7)
(0.3)
(20.0)
(51.3)
500.0
28.8
477.5
(322.5)
(303.8)
Notes
26
26
9,26
26
16
11
19
31 December
2023
31 December
2022
Notes
£m
£m
12
13
16
23
18
24
17
18
30
19
20
21
30
22
20
21
30
22
23
24
25
490.5
1,316.0
12.2
111.3
53.8
30.1
2,013.9
608.1
526.2
7.9
29.4
707.2
1,878.8
3,892.7
286.2
581.3
6.4
1.9
47.6
923.4
1,111.1
0.6
2.3
80.7
46.9
28.0
1,269.6
2,193.0
1,699.7
32.5
582.3
332.6
(29.0)
0.5
(238.7)
1.4
1,008.2
1,689.8
9.9
1,699.7
462.2
1,409.9
15.1
92.5
76.8
50.0
2,106.5
679.1
528.9
8.9
41.3
691.2
1,949.4
4,055.9
406.3
623.5
13.2
7.4
35.3
1,085.7
1,082.1
1.0
—
62.9
51.4
34.9
1,232.3
2,318.0
1,737.9
32.5
582.3
332.6
(14.3)
0.5
(108.5)
1.9
899.5
1,726.5
11.4
1,737.9
The financial statements were approved by the Board of Directors and authorised for issue on 29 February 2024. The financial statements
also comprise the notes on pages 150 to 208.
Jon Stanton
Director
The Weir Group PLC Annual Report and Financial Statements 2023
146
The Weir Group PLC Annual Report and Financial Statements 2023
147
Strategic Report
Governance
Financial Statements
Additional Information
Consolidated Cash Flow Statement
for the year ended 31 December 2023
Total operations
Cash flows from operating activities
Cash generated from operations
Additional pension contributions paid
Exceptional and other adjusting cash items
Exceptional cash items - acquired vendor liabilities
Income tax paid
Net cash generated from operating activities
Cash flows from investing activities
Acquisitions of subsidiaries, net of cash acquired
Purchases of property, plant & equipment
Purchases of intangible assets
Other proceeds from sale of property, plant & equipment and intangible assets
Disposals of discontinued operations, net of cash disposed and disposal costs
Exceptional cash item - disposal of ESCO Russia
Interest received
Dividends received from joint ventures
Net cash used in investing activities
Cash flows from financing activities
Proceeds from borrowings
Repayments of borrowings
Lease payments
Settlement of external debt of subsidiary on acquisition
Settlement of derivative financial instruments
Interest paid
Dividends paid to equity holders of the Company
Dividends paid to non-controlling interests
Purchase of shares for employee share plans
Net cash used in financing activities
Net increase (decrease) in cash & cash equivalents
Cash & cash equivalents at the beginning of the year
Foreign currency translation differences
Cash & cash equivalents at the end of the year
The cash flows from discontinued operations included above are disclosed separately in note 9.
Year ended
Year ended
31 December
2023
31 December
2022
Notes
£m
£m
26
26
9,26
26
16
11
19
525.5
(9.3)
(18.0)
—
(103.9)
394.3
(6.9)
(79.1)
(7.6)
4.2
(0.4)
—
15.1
4.1
(70.6)
512.6
(627.6)
(31.0)
(0.2)
(0.5)
(55.0)
(95.9)
(0.9)
(24.0)
(322.5)
1.2
477.5
(31.3)
447.4
447.8
(9.7)
(14.2)
(9.7)
(93.4)
320.8
(15.2)
(56.1)
(6.6)
4.4
(0.1)
(2.0)
4.6
2.7
(68.3)
822.8
(958.9)
(30.5)
—
(0.3)
(49.9)
(66.7)
(0.3)
(20.0)
(303.8)
(51.3)
500.0
28.8
477.5
The Weir Group PLC Annual Report and Financial Statements 2023
147
Strategic Report
Governance
Financial Statements
Additional Information
Consolidated Statement of Changes in Equity
for the year ended 31 December 2023
Share
capital
Share
premium
Merger
reserve
Treasury
shares
Capital
redemption
reserve
Foreign
currency
translation
reserve
Hedge
accounting
reserve
Retained
earnings
Attributable
to equity
holders of
the
Company
Non-
controlling
interests
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
Total
equity
£m
At 31 December
2021
32.5
582.3 332.6
Profit for the year
—
— —
(5.3)
—
0.5
(206.5)
1.5
705.9
1,443.5
11.0 1,454.5
—
—
—
213.4
213.4
0.4
213.8
Exchange gains
on translation of
foreign operations —
— —
—
—
222.8
—
—
222.8
0.3
223.1
Reclassification of
foreign currency
translation
reserve on
disposal of
operations
Exchange losses
on net
investment
hedges
—
— —
—
—
0.1
—
—
0.1
—
0.1
—
— —
—
—
(124.9)
—
—
(124.9)
—
(124.9)
Reclassification
adjustments on
cash flow hedges —
— —
—
—
—
0.5
—
0.5
—
0.5
Remeasurements
on defined
benefit plans
Tax relating to
other
comprehensive
income
Total net
comprehensive
income for the
year
Cost of share-
based payments
inclusive of tax
credit
Dividends
Purchase of
shares for
employee share
plans
Dividends paid to
non-controlling
interests
Exercise of share-
based payments
At 31 December
2022
—
— —
—
—
—
—
65.3
65.3
—
65.3
—
— —
—
—
—
(0.1)
(16.3)
(16.4)
—
(16.4)
—
— —
—
—
98.0
0.4
262.4
360.8
0.7
361.5
—
—
— —
— —
—
—
—
—
—
—
—
—
8.9
8.9
(66.7)
(66.7)
—
—
8.9
(66.7)
—
— —
(20.0)
—
—
—
—
(20.0)
—
(20.0)
—
— —
—
—
—
—
—
—
(0.3)
(0.3)
—
— —
11.0
—
—
—
(11.0)
—
—
—
32.5
582.3 332.6
(14.3)
0.5
(108.5)
1.9
899.5
1,726.5
11.4 1,737.9
The Weir Group PLC Annual Report and Financial Statements 2023
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Financial Statements
Additional Information
Consolidated Statement of Changes in Equity
for the year ended 31 December 2023 continued
Share
capital
Share
premium
Merger
reserve
Treasury
shares
Capital
redemption
reserve
Foreign
currency
translation
reserve
Hedge
accounting
reserve
Retained
earnings
Attributable
to equity
holders of
the
Company
Non-
controlling
interests
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
Total
equity
£m
At 31 December
2022
32.5
582.3 332.6
(14.3)
0.5
(108.5)
1.9
899.5
1,726.5
11.4 1,737.9
Profit for the year
—
— —
—
—
—
—
227.9
227.9
0.7
228.6
Losses taken to
equity on cash
flow hedges
Cost of hedging
taken to equity on
fair value hedges
—
— —
—
—
—
(0.4)
—
(0.4)
—
(0.4)
—
— —
—
—
—
(0.8)
—
(0.8)
—
(0.8)
Exchange losses
on translation of
foreign operations —
Exchange gains
on net
investment
hedges
—
Reclassification
adjustments on
cash flow hedges —
— —
—
—
(157.8)
—
—
(157.8)
(1.3)
(159.1)
— —
—
—
27.6
—
—
27.6
—
27.6
— —
—
—
—
0.5
—
0.5
—
0.5
Reclassification
adjustments on
fair value hedges
Remeasurements
on defined
benefit plans
Tax relating to
other
comprehensive
expense
Total net
comprehensive
income for the
year
Cost of share-
based payments
inclusive of tax
credit
Dividends
Purchase of
shares for
employee share
plans
Dividends paid to
non-controlling
interests
Exercise of share-
based payments
At 31 December
2023
—
— —
—
—
—
0.1
—
0.1
—
0.1
—
— —
—
—
—
—
(28.2)
(28.2)
—
(28.2)
—
— —
—
—
—
0.1
7.1
7.2
—
7.2
—
— —
—
—
(130.2)
(0.5)
206.8
76.1
(0.6)
75.5
—
—
— —
— —
—
—
—
—
—
—
—
—
7.1
7.1
(95.9)
(95.9)
—
—
7.1
(95.9)
—
— —
(24.0)
—
—
—
—
(24.0)
—
(24.0)
—
— —
—
—
— —
9.3
—
—
—
—
—
—
—
(0.9)
(0.9)
—
(9.3)
—
—
—
32.5
582.3 332.6
(29.0)
0.5
(238.7)
1.4 1,008.2
1,689.8
9.9 1,699.7
The Weir Group PLC Annual Report and Financial Statements 2023
149
Strategic Report
Governance
Financial Statements
Additional Information
Notes to the Group Financial Statements
1. Authorisation of financial statements and statement of compliance
The Consolidated Financial Statements of The Weir Group PLC (the ‘Company’) and its subsidiaries (together, the ‘Group’) for the year ended
31 December 2023 (‘2023’) were approved and authorised for issue in accordance with a resolution of the Directors on 29 February 2024. The
comparative information is presented for the year ended 31 December 2022 (‘2022’).
The Consolidated Financial Statements of The Weir Group PLC have been prepared in accordance with UK-adopted International Accounting
Standards and with the requirements of the Companies Act 2006 as applicable to those companies reporting under those standards.
The Weir Group PLC is a public limited company, limited by shares, incorporated in Scotland, United Kingdom and is listed on the London Stock
Exchange. The principal activities of the Group are described in note 4.
2. Accounting policies
Basis of preparation
These financial statements are presented in Sterling. All values are rounded to the nearest 0.1 million pounds (£m) except where
otherwise indicated.
The financial statements are also prepared on a historic cost basis except where measured at fair value as outlined in the accounting policies.
Going concern
The Directors have a reasonable expectation that the Group has adequate resources to continue to operate for a period of at least 12 months
from the date of approval of the financial statements. For this reason, they continue to adopt the going concern basis of preparing the financial
statements. In forming this view the Directors have reviewed the Group's budget and sensitivity analysis as discussed further in the Directors'
Report on pages 133 to 136.
Basis of consolidation
The Consolidated Financial Statements include the results, cash flows and assets and liabilities of The Weir Group PLC and its subsidiaries, and
the Group’s share of results of its joint venture. For consolidation purposes, subsidiaries and joint ventures prepare financial information for the
same reporting period as the Company using consistent accounting policies.
A subsidiary is an entity controlled, either directly or indirectly, by the Company, where control is achieved when the Group is exposed, or has
rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee.
The results of a subsidiary acquired during the period are included in the Group’s results from the effective date on which control is transferred
to the Group. The results of a subsidiary sold during the period are included in the Group’s results up to the effective date on which control is
transferred out of the Group. All intra-group transactions, balances, income and expenses are eliminated on consolidation.
Non-controlling interests represent the portion of profit or loss and net assets in subsidiaries that are not held by the Group and are presented
within equity in the Consolidated Balance Sheet, separately from the Company Shareholders’ equity.
A full list of the Company’s related undertakings can be found on pages 224 to 230.
New accounting standards, amendments and interpretations
The accounting policies that follow are consistent with those of the previous period, with the exception of the following standards,
amendments and interpretations which are effective for the year ended 31 December 2023:
• IFRS 17 'Insurance contracts' as amended in December 2021;
• Definition of Accounting Estimates - amendments to IAS 8;
• International Tax Reform - Pillar Two Model Rules - amendments to IAS 12;
• Deferred Tax related to Assets and Liabilities arising from a Single Transaction - amendments to IAS 12; and
• Disclosure of Accounting Policies - amendments to IAS 1 and IFRS Practice Statement 2.
The amendments listed above are not considered to have a material impact on the Consolidated Financial Statements of the Group.
The following new accounting standards and interpretations have been published but are not mandatory for 31 December 2023:
• Amendments to IAS 1 - Classification of liabilities as current or non-current;
• Amendments to IAS 1 - Non-current liabilities with covenants;
• Amendments to IAS 21 - Lack of exchangeability;
• Amendments to IAS 7 and IFRS 7 - Supplier finance arrangements; and
• Amendments to IFRS 16 - Lease liability in a sale and leaseback.
These amendments have not been early adopted by the Group. The impact assessment is ongoing, however, from initial review these
standards are not expected to have a material impact on the Group in the current or future reporting periods.
Climate change
Climate change is considered to be a key element of our overall sustainability roadmap. As well as considering the impact of climate change
across our business model, the Directors have considered the impact on the financial statements in accordance with the Task Force on
Climate-related Financial Disclosures (TCFD) recommendations. Climate change is not considered to have a material impact on the financial
reporting judgements and estimates arising from our considerations. Overall, sustainability is recognised in the market as a growth driver for
Weir and a key part of our investment case. This is consistent with our assessment that climate change is not expected to have a detrimental
impact on the viability of the Group in the medium-term. Specifically we note the following:
• The impact of climate change has been included in the modelling to assess the viability and going concern status of the Group, both in terms
of the preparation of our Strategic Plan, which underpins our viability statement modelling, and the modelling of our severe, but plausible
downside scenarios;
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• Our assessment of the carrying value of goodwill and intangible assets included consideration of scenario analysis of potential climate
change on our end markets and this did not introduce a set of circumstances that were considered could reasonably lead to an impairment;
• The impact on the carrying value and useful lives of tangible assets has been considered and while we continue to invest in projects to
reduce our carbon impact, there is not considered to be a material impact on our existing asset base;
• In May 2021, the Group successfully completed the issuance of five-year US$800m Sustainability-Linked Notes. The cost of meeting our
linked targets in 2024 has been considered within the above modelling and the impact is not material; and
• In June 2023, the Group successfully completed the issuance of five-year £300m Sustainability-Linked Notes. The cost of meeting our linked
targets in 2026 has been considered within the above modelling and the impact is not material.
Further detail on our science-based targets and performance against them is included in the Emissions Strategy in the Strategic Report.
Use of estimates and judgements
The Group’s material accounting policy information is set out below. The preparation of the Consolidated Financial Statements, in conformity
with IFRS, requires management to make judgements that affect the application of accounting policies and estimates that impact the reported
amounts of assets, liabilities, income and expense.
Management bases these judgements on a combination of past experience, professional expert advice and other evidence that is relevant to
each individual circumstance. Actual results may differ from these judgements and the resulting estimates, which are reviewed on an ongoing
basis. Revisions to accounting estimates are recognised in the year in which the estimate is revised.
Areas requiring significant judgement in the current year and on a recurring basis are presented to the Audit Committee, as summarised on
pages 103 to 108.
Critical judgments and estimates
The areas where management considers critical judgements and estimates to be required, which are areas more likely to be materially adjusted
within the next 12 months due to inherent uncertainty regarding estimates and assumptions, are those in respect of the following:
Retirement benefits (estimate)
The assumptions underlying the valuation of retirement benefit assets and liabilities include discount rates, inflation rates and mortality
assumptions, which are based on actuarial advice. Changes in these assumptions could have a material impact on the measurement of the
Group’s retirement benefit obligations. Sensitivities to changes in key assumptions are provided in note 24.
Provisions (judgement/estimate)
Management judgement is used to determine when a provision is recognised, taking into account the commercial drivers that gave rise to it,
the Group’s previous experience of similar obligations and the progress of any associated legal proceedings. The calculation of provisions
typically involves management estimates of associated cash flows and discount rates. The key provision, which currently requires a greater
degree of management judgement and estimate is the US asbestos provision and associated insurance asset, details of which are included
in note 22.
Deferred taxation (estimate)
The level of current and deferred tax recognised in the financial statements is dependent on subjective judgements as to the interpretation of
complex international tax regulations and, in some cases, the outcome of decisions by tax authorities in various jurisdictions around the world,
together with the ability of the Group to utilise tax attributes within the time limits imposed by the relevant tax legislation. The value of the
recognised US deferred tax asset in relation to US tax attributes is based on expected future US taxable profits with reference to the Group's
ten-year forecast period and assumptions over the intended use of these tax attributes during this period. The application of this model and its
underlying assumptions may result in future changes to the deferred tax asset recognised. In particular, the recognition of US deferred tax
assets relating to deferred intra-group interest deductions is based upon the current policy and modelling demonstrating full utilisation of that
attribute over the ten-year forecast period. If the current policy were to change then the utilisation of this tax attribute, as demonstrated by the
model, may reduce resulting in a reduction in US deferred tax asset recognised of a maximum of £37.6m (2022: £41.2m).
Other estimates
Taxation (estimate)
The Group faces a variety of tax risks, which result from operating in a complex global environment, including the ongoing reform of both
international and domestic tax rules in some of the Group’s larger markets and the challenge to fulfil ongoing tax compliance filing and transfer
pricing obligations given the scale and diversity of the Group’s global operations.
The Group makes provision for open tax issues where it is probable that an exposure will arise including, in a number of jurisdictions, ongoing
tax audits and uncertain tax positions including transfer pricing which are by nature complex and can take a number of years to resolve. In all
cases, provisions are based on management’s interpretation of tax law in each country, as supported where appropriate by discussion and
analysis undertaken by the Group’s external advisers, and reflect the single best estimate of the likely outcome or the expected value for each
liability. Provisions for uncertain tax positions are included in current tax liabilities and total £5.4m at 31 December 2023 (2022: £7.1m).
The Group believes it has made adequate provision for such matters although it is possible that amounts ultimately paid will be different from
the amounts provided, but not materially within the next 12 months.
Accounting policies
Adjusting items
In order to provide the users of the Consolidated Financial Statements with a more relevant presentation of the Group’s performance, statutory
results for each year have been analysed between:
• adjusted results; and
• the effect of adjusting items.
The principal adjusting items are summarised below. These specific items are presented on the face of the Consolidated Income Statement,
along with the related adjusting items' taxation, to provide greater clarity and a better understanding of the impact of these items on the
Group’s financial performance. In doing so, it also facilitates greater comparison of the Group’s underlying results with prior years and
assessment of trends in financial performance. This split is consistent with how business performance is measured internally.
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Intangibles amortisation
Intangibles amortisation is expensed in line with the other intangible assets policy, with separate disclosure provided to allow visibility of the
impact of both:
• intangible assets recognised via acquisition, which primarily relate to items that would not normally be capitalised unless identified as part
of an acquisition opening balance sheet. The ongoing costs associated with these assets are expensed; and
• ongoing multi-year investment activities, which previously included our IT transformation strategy and digitalisation strategy.
In the prior year, amortisation of £7.4m was included within adjusting items in relation to assets which are part of ongoing multi-year
investment activities. As these assets are now fully amortised, no charge has been recognised during the current year.
Exceptional items
Exceptional items are items of income and expense which, because of the nature, size and/or infrequency of the events giving rise to them,
merit separate presentation. Exceptional items may include, but are not restricted to: profits or losses arising on disposal or closure of
businesses; the cost of significant business restructuring; significant impairments of intangible or tangible assets; adjustments to the fair value
of acquisition-related items such as contingent consideration and inventory; acquisitions and other items deemed exceptional due to their
significance, size or nature.
Other adjusting items
Other adjusting items are those that do not relate to the Group’s current ongoing trading and, due to their nature, are treated as adjusting
items. For example these may include, but are not restricted to, movements in the provision for asbestos-related claims or the associated
insurance assets, which relate to the Flow Control Division that was sold in 2019, but the provision remains with the Group and is in run-off,
or past service costs related to pension liabilities.
Further analysis of the items included in the column ‘Adjusting items’ in the Consolidated Income Statement are provided in notes 5 and 6
to the financial statements.
Discontinued operations
In compliance with IFRS 5 ‘Non-current assets held for sale and discontinued operations’, when it is known that a significant component of the
Group will be held for sale or disposed of the results are disclosed within one line in the Consolidated Income Statement, with the comparative
periods also restated. In the Consolidated Balance Sheet, the assets and liabilities of the component, in the current period only, are reported as
current assets/liabilities held for sale.
As a discontinued operation, the component is measured at the lower of its carrying amount and fair value less costs to sell. At the time
of disposal the foreign currency translation reserve will be recycled to the Consolidated Income Statement and included in the gain or loss
on disposal.
Business combinations
The Group applies the acquisition method in accounting for business combinations. The consideration transferred by the Group to obtain control
of a subsidiary is the sum of the fair values of assets transferred, liabilities incurred and the equity interests issued by the Group, which
includes the fair value of any asset or liability arising from a contingent consideration arrangement. Any goodwill arising from the business
combination is accounted for in line with the goodwill policy below.
Acquisition costs are expensed as incurred.
On the acquisition of a business, management assesses: (i) the Purchase Price Allocation (PPA) in order to attribute fair values to separately
identifiable intangible assets providing they meet the recognition criteria and (ii) the fair values of other assets and liabilities. The fair values of
these intangible assets are dependent on estimates of attributable future revenues, margins and cash flows, as well as appropriate discount
rates. In addition, the allocation of useful lives to acquired intangible assets requires the application of judgement based on available information
and management expectations at the time of recognition. The valuation of other tangible assets and liabilities involves aligning accounting
policies with those of the Group, reflecting appropriate external market valuations for property, plant and equipment, assessing recoverability of
receivables and inventory, and exposures to unrecorded liabilities.
Joint venture
The Group has a long-term contractual arrangement with another party, which represents a joint venture. The Group’s interests in the results
and assets and liabilities of its joint venture are accounted for using the equity method.
This investment is carried in the Consolidated Balance Sheet at cost plus post-acquisition changes in the Group’s share of net assets less any
impairment in value. The Consolidated Income Statement reflects the share of results of operations of the investment after tax. Where there
has been a change recognised directly in the investee’s equity, the Group recognises its share of any changes and discloses this when
applicable in the Consolidated Statement of Comprehensive Income.
Any goodwill arising on the acquisition of a joint venture, representing the excess of the cost of the investment over the Group’s share of the
net fair value of the joint venture’s identifiable assets, liabilities and contingent liabilities, is included in the carrying amount of the joint venture
and is not amortised. To the extent that the net fair value of the joint venture’s identifiable assets, liabilities and contingent liabilities is greater
than the cost of the investment, a gain is recognised and added to the Group’s share of the joint venture’s profit or loss in the year in which the
investment is acquired.
Foreign currency translation
The financial statements for each of the Group’s subsidiaries and joint ventures are prepared using their functional currency. The functional
currency is the currency of the primary economic environment in which an entity operates.
At the entity level, transactions denominated in foreign currencies are translated into the entity’s functional currency at the exchange rate ruling
on the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the exchange rate ruling on
the balance sheet date. Currency translation differences are recognised in the Consolidated Income Statement except when hedge accounting
is applied and for differences on monetary assets and liabilities that form part of the Group’s net investment in a foreign operation. These are
recognised in other comprehensive income until the disposal of the net investment, at which time they are recognised in profit or loss.
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On consolidation, the results of foreign operations are translated into Sterling at the average exchange rate for the year and their assets and
liabilities are translated into Sterling at the exchange rate ruling on the balance sheet date. Currency translation differences, including those on
monetary items that form part of a net investment in a foreign operation, are recognised in the foreign currency translation reserve and in other
comprehensive income.
In the event that a foreign operation is sold, the gain or loss on disposal recognised in the Consolidated Income Statement is determined after
taking into account the cumulative currency translation differences that are attributable to the operation. As permitted by IFRS 1, the Group
elected to deem cumulative currency translation differences to be £nil as at 27 December 2003. Accordingly, the gain or loss on disposal of
a foreign operation does not include currency translation differences arising before that date.
In the Consolidated Cash Flow Statement, the cash flows of foreign operations are translated into Sterling at the average exchange rate for
the year.
Revenue recognition
Revenue is the consideration the Group expects to receive from customers in exchange for goods and services. Revenue is recognised in the
Consolidated Income Statement when control of goods and services is transferred to the customer. Transfer of control is deemed to be over
time where the following criteria are met:
• The customer concurrently receives and consumes the benefits from the Group’s performance;
• The Group’s performance creates or enhances a customer-controlled asset; or
• The Group’s performance does not create an asset with an alternative use and the Group has a right to payment for performance completed
to date.
Where the above criteria are not met, then revenue is recognised at a point in time when control is transferred to the customer.
Revenue is shown net of sales taxes, discounts and after eliminating sales within the Group. No revenue is recognised where recovery of the
consideration is not probable or there are significant uncertainties regarding associated costs, or the possible return of goods. Variable
consideration is recognised only if it is highly probable that there will not be a significant revenue reversal. The consideration is an estimation
based on the terms of the contract and other available information. Liquidated damages can result in variable consideration and will only be
recognised as a deduction from revenue where there is a history of recurring liquidated damages, for example, for the same customer or
product line with the value of the reduction being the most likely amount from a range of possible outcomes. The adjustment to revenue will be
monitored throughout the contract and adjusted as liquidated damages become more or less likely. Volume discounts are deducted from
revenue based on the most reliable estimates of volumes to be purchased. The timing of payment from customers is generally aligned to
revenue recognition, subject to agreed payment terms usually in line with industry standards. Certain contracts may include milestone
payments which do not necessarily align to revenue recognition: a contract asset is recorded where revenue is recognised in advance of
customer invoicing, and a contract liability is recognised where cash is received in advance of revenue recognition.
Sale of goods
This policy is applicable to the sale of both original equipment and spare parts whether sold individually, in bulk or as part of a cross-selling
marketing strategy. Contracts for the provision of both original equipment and spare parts, and where required services, are combined if one or
more of the following is met:
• The contract achieves a single commercial objective and is negotiated as a package;
• The price or performance of one contract influences the amount of consideration to be paid in the other contract; or
• The goods or services in the separate contracts represent a single performance obligation.
Each cross-selling contract is reviewed to identify the performance obligations in relation to original equipment and spare parts with them only
being combined if they are not capable of being distinct and are not distinct in the context of the contract.
Revenue from the sale of goods is recognised in line with incoterms which in the majority of transactions is at the point of despatch. This
reflects when the customer obtains control of the product and can determine its future use and location. For larger orders where multiple units
are delivered in instalments as part of one performance obligation, revenue will be recognised over time in line with delivery. These items are a
series of distinct goods that have the same pattern of transfer of control being the fulfilment of the incoterm, provided the customer has control
of the goods as they are delivered.
Where the sale of product requires customer inspection, this is deemed to be part of the main performance obligation so revenue is not
recognised until the inspection has been completed and approved by the customer. In instances where commissioning is provided, the transfer
of control for the sale of goods is at the point of despatch where commissioning is a separate performance obligation or once commissioning is
complete where combined in the sale of goods performance obligation. A separate performance obligation for commissioning is identified
where a customer could obtain the same service from a third-party supplier with revenue in respect of commissioning being recognised once
the commissioning is complete.
Provision of services
The revenue recognition of provision of services is dependent on the nature of the contracts. Shorter-term contracts tend to be for ‘one-off’
service provision, which means the customer only consumes the benefit from the Group’s performance when the work is complete.
Revenue is therefore recognised at a point in time for such contracts. For other contracts, revenue from the rendering of services is generally
recognised over time where the customer concurrently receives and consumes a benefit from the Group’s performance over the period of the
contract duration. Revenue from services is recognised in proportion to the stage of completion of the performance obligations at the balance
sheet date. The stage of completion is assessed by reference to the transfer of control over time, which usually corresponds to the
contractual agreement with each separate customer and the costs incurred on the contract to date in comparison with the total forecast costs
of the contract.
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Construction contracts
Revenue for construction contracts is recognised over time as the contracts usually contain discrete elements separately transferring control
to customers over the life of the contract and the Group’s performance does not create an asset with an alternative use.
The stage of completion of a contract is determined either by reference to the proportion that contract costs incurred for work performed to
date bear to the estimated total contract costs, or by reference to the completion of a physical proportion of the contract work. Both these
methods are faithful depictions of the transfer of control given the Group has a right to payment for performance completed to date. The basis
used is dependent upon the nature of the underlying contract. For instances where the work is subject to formal customer acceptance
procedures, revenue will only be recognised once the customer review has been completed and approved by the customer as this is the point
both parties are in agreement that control has been transferred in line with contract terms. Losses on contracts are recognised in the year
when such losses become probable.
Property, plant & equipment
Property, plant and equipment comprises owned assets and right-of-use assets that do not meet the definition of investment property.
Owned assets
Owned property, plant and equipment is stated at cost less accumulated depreciation and any recognised impairment losses. Freehold land
and assets under construction are not depreciated. Depreciation of property, plant and equipment is provided on a straight-line basis so as to
charge the cost less residual value to the Consolidated Income Statement over the expected useful life of the asset concerned, and is in the
following ranges:
Freehold buildings, long leasehold land and buildings 10 – 40 years
Plant and equipment
3 – 20 years
Right-of-use assets and lease liabilities
At inception of a contract, the Group assesses whether the contract is, or contains, a lease. A contract is, or contains, a lease if the contract
conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract
conveys the right to control the use of an identified asset, the Group assesses whether it has both the right to obtain substantially all of the
economic benefits from use of the identified asset and the right to direct the use of the identified asset throughout the period of use.
The Group recognises a lease liability and right-of-use asset at the lease commencement date. The lease liability is initially measured as the
present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease, or
where the interest rate implicit in the lease cannot be readily determined, the Group’s incremental borrowing rate. Generally, the Group uses its
incremental borrowing rate as the discount rate. The Group’s incremental borrowing rate is calculated by taking the government borrowing rate
in any given currency and adding the estimated Group credit spreads for a variety of tenors. An interpolation is performed annually to obtain one
rate for each of the major lease currencies based on the weighted average life of the lease book.
Lease payments consist of the following components:
• fixed payments, including in-substance fixed payments, less any lease incentives receivable;
• variable lease payments that depend on an index or a rate;
• amounts expected to be payable by the lessee under residual value guarantees;
• the exercise price of a purchase option (if the lessee is reasonably certain to exercise that option); and
• payments of penalties for terminating the lease (if the lease term reflects the lessee exercising the option to terminate the lease).
The right-of-use asset is measured as equal to the lease liability and adjusted for:
• lease payments made to the lessor at or before the commencement date;
• lease incentives received;
• initial direct costs associated with the lease; and
• an initial estimate of restoration costs.
The right-of-use asset is depreciated using the straight-line method over the lease term. In addition, the right-of-use asset is periodically
reduced by any impairment losses.
The Group has adopted the exemption available for short-term leases, with payments being recognised on a straight-line basis over the lease
term. Short-term leases are defined as leases with a lease term of 12 months or less.
The Group has adopted the exemption available for low value assets, with payments being recognised on a straight-line basis over the lease
term. Leases relating to laptops, desktop computers, mobile phones, photocopiers, printers and other office equipment, where the asset value
is less than £3,500 or the local currency equivalent have been treated as low value. Where the lease contract meets both short-term and low
value exemptions, the annual cost of the lease is reported within expenses relating to short-term leases.
For each lease, the lease term has been calculated as the non-cancellable period of the lease contract, except where the Group is reasonably
certain that it will exercise contractual extension options. In assessing whether a lessee is reasonably certain to exercise an option to extend a
lease, or not to exercise an option to terminate a lease, the Group shall consider all relevant facts and circumstances that create an economic
incentive for the lessee to exercise the option to extend the lease, or not to exercise the option to terminate the lease. In certain
circumstances, the Group will refer to the five-year Strategic Plan period as an appropriate period to consider whether the ‘reasonably certain’
criteria are met.
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Goodwill
Goodwill arises on the acquisition of businesses and represents any excess of the cost of the acquired entity over the Group’s interest in the
fair value of the entity’s identifiable assets, liabilities and contingent liabilities determined at the date of acquisition. Acquisition costs are
recognised in the Consolidated Income Statement in the year in which they are incurred. Goodwill in respect of an acquired business is
recognised as an intangible asset. Goodwill is carried at cost less any recognised impairment losses and is tested at least annually or where
there are indicators of impairment.
The carrying amount of goodwill allocated to a cash generating unit is taken into account when determining the gain or loss on disposal of
the unit.
An assessment of probable contingent consideration is recognised at the date of acquisition or disposal. For acquisitions, subsequent changes
to the fair value of the contingent consideration are adjusted against the cost of acquisition where they qualify as measurement period
adjustments. The measurement period is the period from the date of acquisition to the date that the Group obtains complete information about
facts and circumstances that existed as of the acquisition date, and is subject to a maximum of one year. If the change does not qualify as a
measurement period adjustment, it is reflected in the Consolidated Income Statement as an adjusting item. For disposals, any subsequent
change in contingent consideration is adjusted against the disposal proceeds and the gain or loss on disposal.
Other intangible assets
Intangible assets acquired separately are measured at cost on initial recognition. An intangible resource acquired in a business combination is
recognised as an intangible asset if it is separable from the acquired business or arises from contractual or legal rights, is expected to generate
future economic benefits and its fair value can be measured reliably.
An intangible asset with a finite life is amortised on a straight-line basis so as to charge its cost, which in respect of an acquired intangible asset
represents its fair value at the acquisition date, to the Consolidated Income Statement over its expected useful life. An intangible asset with an
indefinite life is not amortised but is tested at least annually for impairment and carried at cost less any recognised impairment losses.
Brand names
Brands are recognised as a result of a business combination. The brand is recognised if it is separable from the remaining business and is
expected to generate future economic benefits. Internally generated brands are not capitalised in accordance with IAS 38 'Intangible assets'.
Brands are fair valued at acquisition and subsequently measured at cost less any accumulated impairment. All subsequent expenditure is
expensed to the Consolidated Income Statement as incurred.
Due to the long-term nature of the brands, the Group has assessed that they have indefinite useful lives, with the exception of Motion Metrics,
which is amortised over 15 years. An annual impairment exercise is completed for brands with an indefinite useful life, to confirm that the value
in use, based on discounted cash flows, exceeds the carrying value.
Customer and distributor relationships
Customer and distributor relationships are recognised as part of a business combination if they are separable from the acquired business or
arise from contractual or legal rights. They represent the relationships that the acquiree has built up over a significant period of time and will
provide repeat custom to the business which will generate future economic benefit.
The assets are initially recorded at fair value at acquisition and subsequently recognised at cost less accumulated amortisation and impairment.
All subsequent expenditure is charged to the Consolidated Income Statement as incurred. Amortisation is charged to the Consolidated Income
Statement over the useful life of the asset. The useful life can vary depending on the circumstances of each acquisition. The useful lives range
from five to 30 years.
If there are any indicators of impairment an assessment of the value in use of the relationships is completed. If the carrying value exceeds the
value in use the variance is accounted for as an impairment to the asset with a corresponding charge to the Consolidated Income Statement.
Software
Software assets can be purchased, acquired or internally generated. Software that is not an integral part of related hardware is recognised as an
intangible asset.
Software is recognised at cost less accumulated amortisation and impairment. Amortisation is spread over the estimated useful life of the
software which can range from four to eight years.
Software as a Service (SaaS) arrangements provide the Group with the right to access cloud-based software applications over a contractual
period. The software remains the intellectual property of the developer and as a result the Group does not recognise an intangible asset in
relation to subscription fees and costs incurred to customise or configure the software. The related costs are recognised in the Consolidated
Income Statement when the service is received.
Costs incurred to enhance or develop an existing intangible asset or develop new software code that meet the definition and recognition criteria
of an intangible asset are capitalised as intangible software assets. Amortisation is recognised over the expected useful life of the software.
Trademarks and intellectual property
Trademarks and intellectual property are legally protected rights that are expected to generate future revenues. On acquisition, they are
measured at fair value based on discounted expected cash flows. Assets are subsequently held at cost less accumulated amortisation
and impairment.
The assets are amortised based on the period in which the legal protection is in place or the asset is expected to generate revenues. The
amortisation period for the currently capitalised trademarks ranges from six to 15 years.
Other
Other intangible assets are stated at cost less accumulated amortisation and any recognised impairment losses. The expected useful life of
other intangible assets is up to six years.
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Research & development costs
All research expenditure is charged to the Consolidated Income Statement in the year in which it is incurred.
Development expenditure is charged to the Consolidated Income Statement in the year in which it is incurred unless it relates to the
development of a new product or technology and meets the following requirements:
• it is incurred after the technical feasibility and commercial viability of the product has been proven;
• the development costs can be measured reliably;
• future economic benefits are probable; and
• the Group intends, and has sufficient resources, to complete the development and to use or sell the asset.
Any such capitalised development expenditure is amortised on a straight-line basis so it is charged to the Consolidated Income Statement over
the expected life of the resulting product or technology.
Government grants
Government grants are recognised at their fair value where it is certain that the grant will be received and the Group will comply with all
attached conditions. Government grants relating to costs are deferred and recognised in the income statement over the period necessary to
match them with the costs they are intended to compensate. Government grants relating to the purchase of property, plant and equipment are
deducted in arriving at the carrying amount of the related asset.
Impairment of non-current assets
All non-current assets are tested for impairment whenever events or circumstances indicate that their carrying values might be impaired.
Additionally, goodwill and intangible assets with an indefinite life are subject to an annual impairment test.
An impairment loss is recognised to the extent that an asset’s carrying value exceeds its recoverable amount, which represents the higher of
the asset’s fair value less costs to sell and its value in use. An asset’s value in use represents the present value of the future cash flows
expected to be derived from the asset. Where it is not possible to estimate the recoverable amount of an individual asset, the impairment test
is conducted for the cash generating unit to which it belongs. Similarly, the recoverable amount of goodwill is determined by reference to the
discounted future cash flows of the cash generating units to which it is allocated.
Impairment losses are recognised in the Consolidated Income Statement. Impairment losses recognised in previous periods for an asset other
than goodwill are reversed if there has been a change in the estimates used to determine the asset’s recoverable amount. The carrying amount
of an asset shall not be increased above the carrying amount that would have been determined had no impairment loss been recognised for the
asset in prior periods. Impairment losses recognised in respect of goodwill are not reversed.
Inventories
Inventories are valued at the lower of cost and net realisable value, with due allowance for any obsolete or slow-moving items. Cost represents
the expenditure incurred in bringing inventories to their existing location and condition and comprises the cost of raw materials, direct labour
costs, other direct costs and related production overheads. Raw material cost is generally determined on a first-in, first-out basis. Net realisable
value is the estimated selling price less costs to complete and sell.
Financial assets & liabilities
The Group’s principal financial assets and liabilities, other than derivatives, comprise bank overdrafts, short-term borrowings, loans and fixed-
rate notes, cash and short-term deposits. The Group also has other financial assets and liabilities such as trade receivables, trade payables and
leases which arise directly from its operations.
A financial asset is generally derecognised when the contract that gives rise to it is settled, sold, cancelled or expires.
A financial liability is derecognised when the obligation under the liability is discharged, cancelled or expires. Where an existing financial liability
is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such
an exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability, such that the difference in
the respective carrying amounts together with any costs or fees incurred are recognised in profit or loss. Under IFRS 9 ‘Financial instruments’
where the modification is not substantial, any difference in the modified cash flows is recognised in profit or loss.
Reimbursement asset
The Group has several insurance policies in place with regards to legal claims in relation to alleged asbestos exposure as discussed in note 22.
In accordance with IAS 37 ‘Provisions, contingent liabilities and contingent assets’ a reimbursement asset is only recognised when it is virtually
certain that the asset will be received and there is a corresponding liability recognised. The value recognised is the lower of the amount
confirmed by the insurer under the policy and the provision for the related liability. If receipt of the asset is probable the asset is not recognised
but disclosed.
Trade receivables
Trade receivables, which are generally of a short-term nature, are recognised at original invoice amount where the consideration is
unconditional. If they contain significant financing components, trade receivables are instead recognised at fair value. The Group holds trade
receivables to collect the contractual cash flows and therefore measures them subsequently at amortised cost using the effective interest
method. Details of the Group’s impairment policies and the calculation of the loss allowance are provided in note 18 and the policy in respect of
invoice discounting is included in note 30.
Cash & cash equivalents
Cash and cash equivalents comprise cash in hand, deposits available on demand and other short-term highly liquid investments with a maturity
on acquisition of three months or less and bank overdrafts and short-term borrowings with a maturity on acquisition of three months or less.
Bank overdrafts are presented as current liabilities to the extent that there is no right of offset with cash balances.
Trade payables
Trade payables are recognised and carried at original invoice amount. The Group’s supply chain financing programme policy and assessment for
the period is provided in note 21.
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Notes to the Group Financial Statements
continued
Interest-bearing loans & borrowings
Obligations for loans and borrowings are recognised when the Group becomes party to the related contracts and are measured initially at fair
value less directly attributable transaction costs. After initial recognition, interest-bearing loans and borrowings are subsequently measured at
amortised cost using the effective interest method. Amortised cost is calculated by taking into account any issue costs and any discount or
premium on settlement. Borrowings are classified as current liabilities unless the Group has an unconditional right to settle the liability at least
12 months after the balance sheet date.
Provisions, contingent liabilities & contingent assets
A provision is recognised in the Consolidated Balance Sheet when the Group has a legal or constructive obligation as a result of a past event,
the obligation can be estimated reliably and it is probable that an outflow of economic benefits will be required to settle the obligation. If the
effect is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market
assessments of the time value of money and, where appropriate, the risks specific to the liability.
A contingent liability is disclosed if there is a possible obligation as a result of a past event that might, but will probably not, require an outflow
of economic benefits; or there is a present obligation as a result of a past event that probably requires an outflow of economic benefits, but
where the obligation cannot be measured reliably.
A contingent asset is disclosed if an inflow of economic benefits is probable arising from past events and whose existence will be confirmed
only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity.
Derivative financial instruments & hedge accounting
The Group uses derivative financial instruments, principally forward foreign currency contracts and cross-currency swaps, to reduce its exposure to
exchange rate movements. The Group also uses foreign currency borrowings as a hedge of its exposure to foreign exchange risk on its investments in
foreign subsidiaries. Additionally, the Group periodically uses interest rate swaps to manage its exposure to interest rate risk. The Group does not hold
or issue derivatives for speculative or trading purposes.
Derivative financial instruments are recognised as assets and liabilities measured at their fair values at the balance sheet date. The fair value of forward
foreign currency contracts is calculated as the present value of the estimated future cash flows based on spot and forward foreign exchange rates and
counterparty and the Group’s own credit risk. The fair value of interest rate swaps and cross-currency swaps is calculated as the present value of the
estimated future cash flows based on interest rate curves, spot foreign exchange rates and counterparty and own credit risk. Changes in their fair values
are recognised in the Consolidated Income Statement, except where hedge accounting is used, provided the conditions specified by IFRS 9 are met.
Hedge accounting is applied in respect of hedge relationships where it is both permissible under IFRS 9 and practical to do so. When hedge accounting
is used, the relevant hedging relationships are classified as fair value hedges, cash flow hedges or net investment hedges, as appropriate.
Where the hedging relationship is classified as a fair value hedge, the carrying amount of the hedged asset or liability will be adjusted by the increase or
decrease in its fair value attributable to the hedged risk and the resulting gain or loss will be recognised in the Consolidated Income Statement where, to
the extent that the hedge is effective, it will be offset by the change in the fair value of the hedging instrument.
For fair value hedges in which the spot element of the hedging instrument has been designated to the hedge, the changes in the forward
element of the hedging instrument is recognised within other comprehensive income in the costs of hedging reserve within equity.
Where the hedging relationship is classified as a cash flow or net investment hedge, to the extent that the hedge is effective, changes in the fair value
of the hedging instrument will be recognised directly in other comprehensive income. For the cash flow hedge, when the hedged asset or liability is
recognised in the financial statements, the accumulated gains and losses recognised in other comprehensive income will be either recycled to the
income statement or, if the hedged item results in a non-financial asset, will be recognised as adjustments to its initial carrying amount. For net
investment hedges, gains and losses on hedging instruments designated as hedges of the net investments in foreign operations are recognised in other
comprehensive income to the extent that the hedging relationship is effective. Gains and losses accumulated in the foreign currency translation reserve
are recycled to the income statement when the foreign operation is disposed of.
Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated or exercised, or no longer qualifies for hedge accounting.
At that point in time, any cumulative gain or loss on the hedging instrument recognised through other comprehensive income is kept in equity until the
forecasted transaction occurs. If a hedged transaction is no longer expected to occur, the net cumulative gain or loss that was reported in equity is
immediately reclassified to the income statement in the period.
Derivatives embedded in non-derivative host contracts, which are not already measured at fair value through profit or loss, are recognised separately as
derivative financial instruments when their risks and characteristics are not closely related to those of the host contract and the host contract is not
stated at its fair value with changes in its fair value recognised in the Consolidated Income Statement.
Where items are recognised in the Consolidated Income Statement, these are presented within operating profit or finance costs dependent on
their nature.
Share-based payments
Equity settled share-based incentives are provided to employees under the Group’s Share Reward Plan (SRP), formerly the Long Term
Incentive Plan (LTIP), the Weir ShareBuilder Plan (WSBP) and as a consequence of occasional one-off conditional awards made to employees.
The fair value of SRP awards and one-off conditional awards at the date of the grant is calculated using appropriate option pricing models and
the cost is recognised on a straight-line basis over the vesting period. Adjustments are made to reflect expected and actual forfeitures during
the vesting period due to failure to satisfy service or performance conditions, where applicable. The conditions of the SRP for the Executive
Directors, which took effect in 2018, are summarised in the Directors’ Remuneration Policy, which can be found on the Company’s website at
www.corporategovernance.weir. The conditions of the SRP for Senior Management are summarised in note 28.
The fair value of WSBP awards at grant date is calculated as the share price at the date of the grant less an adjustment for loss of reinvestment
return on the dividend equivalent. There are no performance conditions attached to these awards, but participants who leave the Company prior
to vesting lose their right to the awards. The terms of the share awards granted under the WSBP are set out on the plan’s website at
www.sharebuilder.weir.
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Notes to the Group Financial Statements
continued
Treasury shares
The Weir Group PLC shares held by the Company, or those held in Trust, are classified in Shareholders’ equity as treasury shares and are
recognised at cost. Consideration received for the sale of such shares is also recognised in equity, with any difference between the proceeds
from sale and the original cost being taken directly to retained earnings. No gain or loss is recognised in total comprehensive income on the
purchase, sale, issue or cancellation of equity shares.
Post-employment benefits
Post-employment benefits comprise pension benefits provided to certain current and former employees in the UK, US and Canada and post-
retirement healthcare benefits provided to certain employees in the US.
For defined benefit pension and post-retirement healthcare plans, the annual service cost is calculated using the projected unit credit method
and is recognised over the future service lives of participating employees, in accordance with the advice of qualified actuaries. Current service
cost and administration expenses are recognised in operating costs and net interest on the net pension liability is recognised in finance costs.
The finance cost recognised in the Consolidated Income Statement in the year reflects the net interest on the net pension liability. This
represents the change in the net pension liability resulting from the passage of time, and is determined by applying the discount rate to the
opening net liability, taking into account employer contributions paid into the plan, and hence reducing the net liability, during the year.
Past service costs resulting from enhanced benefits are recognised immediately in the Consolidated Income Statement. Actuarial gains and
losses, which represent differences between interest on the plan assets, experience on the benefit obligation and the effect of changes in
actuarial assumptions, are recognised in full in other comprehensive income in the year in which they occur.
The defined benefit liability or asset recognised in the Consolidated Balance Sheet comprises the net total for each plan of the present value of
the benefit obligation, using a discount rate based on yields at the balance sheet date on appropriate high quality corporate bonds that have
maturity dates approximating the terms of the Group’s obligations and are denominated in the currency in which the benefits are expected to
be paid minus the fair value of the plan assets, if any, at the balance sheet date. The balance sheet asset recognised is limited to the present
value of economic benefits which the Group expects to recover by way of refunds or a reduction in future contributions. In order to calculate
the present value of economic benefits, consideration is also given to any minimum funding requirements.
For defined contribution plans, the cost represents the Group’s contributions to the plans and these are charged to the Consolidated Income
Statement in the year in which they fall due, along with any associated administration costs.
Taxation
Current tax is the amount of tax payable or recoverable in respect of the taxable profit or loss for the year.
Deferred tax liabilities represent tax payable in future years in respect of taxable temporary differences. Deferred tax assets represent tax recoverable in
future years in respect of deductible temporary differences, the carry forward of unutilised tax losses and the carry forward of unused tax credits.
Deferred tax is measured on an undiscounted basis using the tax rates and laws that have been enacted or substantively enacted at the balance sheet
date and are expected to apply when the deferred tax asset is realised or the deferred tax liability is settled.
Deferred tax is recognised on temporary differences between the carrying amount of an asset or liability in the balance sheet and its tax base with the
following exceptions:
i) Deferred tax arising from the initial recognition of goodwill, or of an asset or liability in a transaction that is not a business combination, that, at the
time of the transaction, affects neither accounting nor taxable profit or loss, is not recognised;
ii) Deferred tax is provided on temporary differences arising on investments in subsidiaries and joint ventures, except where the timing of the reversal of
the temporary difference can be controlled and it is probable that the temporary difference will not reverse in the foreseeable future; and
iii) A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the asset can
be utilised.
Current and deferred tax is recognised in the Consolidated Income Statement except if it relates to an item recognised directly in equity, in which case it
is recognised directly in equity.
The Group also recognises provisions in the Consolidated Balance Sheet for uncertain tax positions as disclosed above in other accounting estimates.
3. Alternative performance measures
The Consolidated Financial Statements of The Weir Group PLC have been prepared in accordance with UK-adopted International Accounting
Standards and with the requirements of the Companies Act 2006 as applicable to those companies reporting under those standards. In
measuring our performance, the financial measures that we use include those which have been derived from our reported results in order to
eliminate factors which we believe distort period-on-period comparisons. These are considered alternative performance measures. This
information, along with comparable GAAP measurements, is useful to investors in providing a basis for measuring our operational performance.
Our management uses these financial measures, along with the most directly comparable GAAP financial measures, in evaluating our
performance and value creation. Alternative performance measures should not be considered in isolation from, or as a substitute for, financial
information in compliance with GAAP. Alternative performance measures as reported by the Group may not be comparable with similarly titled
amounts reported by other companies.
Below we set out our definitions of alternative performance measures and provide reconciliations to relevant GAAP measures.
Adjusted results and adjusting items
The Consolidated Income Statement presents Statutory results, which are provided on a GAAP basis, and Adjusted results (non-GAAP), which
are management’s primary area of focus when reviewing the performance of the business. Adjusting items represent the difference between
Statutory results and Adjusted results and are defined within the accounting policies section above. The accounting policy for Adjusting items
should be read in conjunction with this note. Details of each adjusting item are provided in note 6. We consider this presentation to be helpful
as it allows greater comparability of the underlying performance of the business from year to year.
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continued
EBITDA
EBITDA is operating profit from continuing operations, before exceptional items, other adjusting items, intangibles amortisation, and excluding
depreciation of owned assets and right-of-use assets. EBITDA is a widely used measure of a company's profitability of its operations before any
effects of indebtedness, taxes or costs required to maintain its asset base. EBITDA is used in conjunction with other GAAP and non-GAAP
financial measures to assess our operational performance. A reconciliation of EBITDA to the closest equivalent GAAP measure, operating profit,
is provided.
Continuing operations
Operating profit
Adjusted for:
Exceptional and other adjusting items (note 6)
Adjusting amortisation (note 6)
Adjusted operating profit
Non-adjusting amortisation (note 5)
Adjusted earnings before interest, tax and amortisation (EBITA)
Depreciation of owned property, plant & equipment (note 12)
Depreciation of right-of-use property, plant & equipment (note 12)
Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA)
2023
£m
2022
£m
368.4
307.5
64.9
25.5
458.8
12.2
471.0
39.9
31.6
542.5
51.4
35.9
394.8
5.7
400.5
47.0
31.4
478.9
Operating cash flow (cash generated from operations)
Operating cash flow excludes additional pension contributions, exceptional and other adjusting cash items and income tax paid. This is a useful
measure to view or assess the underlying cash generation of the business from its operating activities. A reconciliation to the GAAP measure
‘Net cash generated from operating activities’ is provided in the Consolidated Cash Flow Statement.
Free operating cash flow and free cash flow
Free operating cash flow (FOCF) is defined as operating cash flow (cash generated from operations), adjusted for net capital expenditure, lease
payments, dividends received from joint ventures and purchase of shares for employee share plans. FOCF provides a useful measure of the
cash flows generated directly from the operational activities after taking into account other cash flows closely associated with maintaining
daily operations.
Free cash flow (FCF) is defined as FOCF further adjusted for net interest, income taxes, settlement of derivative financial instruments,
additional pension contributions and non-controlling interest dividends. FCF reflects an additional way of viewing our available funds that we
believe is useful to investors as it represents cash flows that could be used for repayment of debt, dividends, exceptional and other adjusting
items, or to fund our strategic initiatives, including acquisitions, if any.
The reconciliation of operating cash flows (cash generated from operations) to FOCF and subsequently FCF is as follows.
Operating cash flow (cash generated from operations)
Net capital expenditure from purchase & disposal of property, plant & equipment and intangibles
Lease payments
Dividends received from joint ventures
Purchase of shares for employee share plans
Free operating cash flow (FOCF)
Net interest paid
Income tax paid
Settlement of derivative financial instruments
Additional pension contributions paid
Non-controlling interest dividends
Free cash flow (FCF)
2023
£m
525.5
(82.5)
(31.0)
4.1
(24.0)
392.1
(39.9)
(103.9)
(0.5)
(9.3)
(0.9)
237.6
2022
£m
447.8
(58.3)
(30.5)
2.7
(20.0)
341.7
(45.3)
(93.4)
(0.3)
(9.7)
(0.3)
192.7
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continued
Free operating cash conversion
Free operating cash conversion is a non-GAAP key performance measure defined as free operating cash flow divided by adjusted operating
profit on a total Group basis. The measure is used by management to monitor the Group's ability to generate cash relative to operating profits.
Adjusted operating profit
Free operating cash flow
Free operating cash conversion %
2023
£m
458.8
2022
£m
394.8
392.1
341.7
85%
87%
Working capital as a percentage of sales
Working capital as a percentage of sales is calculated based on working capital as reflected below, divided by revenue, as included in the
Consolidated Income Statement. It is a measure used by management to monitor how efficiently the Group is managing its investment in
working capital relative to revenue growth.
Working capital as included in the Consolidated Balance Sheet
Other receivables
Inventories
Trade & other receivables
Derivative financial instruments (note 30)
Trade & other payables
Other payables
Adjusted for:
Insurance contract assets (note 18)
Interest accruals
Deferred consideration (note 21)
Working capital
Revenue
Working capital as a percentage of sales
2023
£m
53.8
608.1
526.2
(0.8)
(581.3)
(0.6)
605.4
(57.5)
12.3
1.6
(43.6)
2022
£m
76.8
679.1
528.9
(4.3)
(623.5)
(1.0)
656.0
(77.9)
5.3
2.0
(70.6)
561.8
2,636.0
585.4
2,472.1
21%
24%
Net debt
Net debt is a widely used liquidity metric calculated by taking cash and cash equivalents less total current and non-current debt. A reconciliation
of net debt to cash and short-term deposits and interest-bearing loans and borrowings is provided in note 26. It is a useful measure used by
management and investors when monitoring the capital management of the Group. Net debt, excluding lease liabilities and converted at the
exchange rates used in the preparation of the Consolidated Income Statement, is also the basis for covenant reporting as included in note 31.
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continued
4. Segment information
Continuing operations includes two operating Divisions: Minerals and ESCO. These two Divisions are organised and managed separately based
on the key markets served and each is treated as an operating segment and a reportable segment under IFRS 8 'Operating segments'. The
operating and reportable segments were determined based on the reports reviewed by the Chief Executive Officer, which are used to make
operational decisions.
The Minerals segment is a global leader in engineering, manufacturing and service processing technology used in abrasive, high-wear mining
applications. Its differentiated technology is also used in infrastructure and general industrial markets. The ESCO segment is a global leader in
the provision of Ground Engaging Tools (GET) for large mining machines. It operates predominantly in mining and infrastructure markets where
its highly engineered technology improves productivity through extended wear life, increased safety and reduced energy consumption.
Following the acquisition of Sentiantechnologies AB (SentianAI) on 21 November 2023 and Carriere Industrial Supply Limited (CIS) on 8 April
2022, these entities have been included in the Minerals and ESCO segments respectively. SentianAI is a developer of innovative cloud-based
Artificial Intelligence solutions to the mining industry. CIS is a premier manufacturer and distributor of highly engineered wear parts and
aftermarket service provider to the Canadian mining industry.
The Chief Executive Officer assesses the performance of the operating segments based on operating profit from continuing operations before
exceptional and other adjusting items (‘segment result’). Finance income and expenditure and associated interest-bearing liabilities and
financing derivative financial instruments are not allocated to segments as all treasury activity is managed centrally by the Group Treasury
function. The amounts provided to the Chief Executive Officer with respect to assets and liabilities are measured in a manner consistent with
that of the financial statements. The assets are allocated based on the operations of the segment and the physical location of the asset. The
liabilities are allocated based on the operations of the segment.
Transfer prices between business segments are set on an arm’s length basis, in a manner similar to transactions with third parties.
The segment information for the reportable segments for 2023 and 2022 is disclosed below. Information related to discontinued operations is
included in note 9.
Revenue
Sales to external customers
Inter-segment sales
Segment revenue
Eliminations
Minerals
2023
£m
ESCO
Total continuing operations
2022
£m
2023
£m
2022
£m
2023
£m
2022
£m
1,937.4
0.1
1,937.5
1,780.5
0.1
1,780.6
698.6
2.5
701.1
691.6
3.2
694.8
2,636.0
2.6
2,638.6
(2.6)
2,636.0
2,472.1
3.3
2,475.4
(3.3)
2,472.1
Sales to external customers – 2022 at 2023 average exchange rates
Sales to external customers
1,937.4
1,734.6
698.6
688.2
2,636.0
2,422.8
Segment result
Segment result before share of results of joint ventures
Share of results of joint ventures
Segment result
Corporate expenses
Adjusted operating profit
Adjusting items
Net finance costs
Profit before tax from continuing operations
Segment result – 2022 at 2023 average exchange rates
Segment result before share of results of joint ventures
Share of results of joint ventures
Segment result
Corporate expenses
Adjusted operating profit
375.7
—
375.7
323.5
—
323.5
119.4
2.5
121.9
107.5
2.5
110.0
375.7
—
375.7
317.5
—
317.5
119.4
2.5
121.9
106.9
2.5
109.4
495.1
2.5
497.6
(38.8)
458.8
(90.4)
(47.7)
320.7
495.1
2.5
497.6
(38.8)
458.8
431.0
2.5
433.5
(38.7)
394.8
(87.3)
(47.3)
260.2
424.4
2.5
426.9
(38.9)
388.0
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Notes to the Group Financial Statements
continued
Revenues from any single external customer do not exceed 10% of Group revenue.
Timing of revenue recognition
At a point in time
Over time
Segment revenue
Eliminations
Minerals
2023
£m
2022
£m
1,825.2
112.3
1,937.5
1,682.7
97.9
1,780.6
ESCO
2023
£m
685.3
15.8
701.1
2022
£m
681.9
12.9
694.8
Total continuing operations
2023
£m
2,510.5
128.1
2,638.6
(2.6)
2,636.0
2022
£m
2,364.6
110.8
2,475.4
(3.3)
2,472.1
Geographical information
Geographical information in respect of revenue for 2023 and 2022 is disclosed below. Revenues are allocated based on the location to which
the product is shipped.
Revenue by geography
UK
US
Canada
Asia Pacific
Australasia
South America
Middle East & Africa
Europe & FSU
Revenue
An analysis of the Group's revenue is as follows:
Original equipment
Aftermarket parts
Sales of goods
Provision of services – aftermarket
Construction contracts – original equipment
Subscription services
Revenue
2023
£m
23.9
412.4
420.8
347.4
412.4
576.3
317.4
125.4
2,636.0
2023
£m
552.3
1,864.3
2,416.6
160.7
54.3
4.4
2,636.0
2022
£m
34.8
418.1
378.3
288.2
336.3
540.8
295.3
180.3
2,472.1
2022
£m
456.0
1,825.7
2,281.7
141.9
45.5
3.0
2,472.1
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continued
Minerals
2023
£m
567.9
312.3
844.9
1,725.1
—
1,725.1
2022
£m
600.8
303.4
902.0
1,806.2
—
1,806.2
ESCO
2023
£m
748.0
168.4
288.1
1,204.5
12.2
1,216.7
2022
£m
809.0
147.6
307.3
1,263.9
15.1
1,279.0
476.6
476.6
543.7
543.7
129.9
129.9
139.9
139.9
Total Group
2023
£m
1,315.9
480.7
1,133.0
2,929.6
12.2
2,941.8
950.9
3,892.7
606.5
606.5
1,586.5
2,193.0
79.7
68.7
46.6
29.4
126.3
1.3
127.6
2022
£m
1,409.8
451.0
1,209.3
3,070.1
15.1
3,085.2
970.7
4,055.9
683.6
683.6
1,634.4
2,318.0
98.1
1.1
99.2
Assets & liabilities
Intangible assets
Property, plant & equipment
Working capital assets
Investments in joint ventures
Segment assets
Corporate assets
Total assets
Working capital liabilities
Segment liabilities
Corporate liabilities
Total liabilities
Other segment information - total Group
Segment additions to non-current
assets
Corporate additions to non-current
assets
Total additions to non-current
assets
Other segment information - total Group
Segment depreciation & amortisation
65.0
73.8
42.2
43.1
107.2
116.9
Segment impairment of property, plant
& equipment
Segment impairment of intangible
assets
Corporate depreciation & amortisation
Total depreciation, amortisation &
impairment
1.4
—
1.3
0.3
—
—
—
—
1.4
—
2.0
1.3
0.3
3.1
110.6
121.6
The asset and liability balances include right-of-use assets and lease liabilities. Refer to note 12 for depreciation on right-of-use assets.
Corporate assets primarily comprise cash and short-term deposits, asbestos-related insurance asset, Trust Owned Life Insurance policy
investments, derivative financial instruments, income tax receivable, deferred tax assets and elimination of intercompany as well as those
assets which are used for general head office purposes. Corporate liabilities primarily comprise interest-bearing loans & borrowings and related
interest accruals, derivative financial instruments, income tax payable, provisions, deferred tax liabilities, elimination of intercompany and
retirement benefit deficits as well as liabilities relating to general head office activities. Segment additions to non-current assets include right-of-
use assets.
Geographical information
Geographical information in respect of non-current assets for 2023 and 2022 is disclosed below. Assets are allocated based on the location of
the assets and operations. Non-current assets consist of property, plant & equipment, intangible assets and investments in joint ventures.
Non-current assets by geography
UK
US
Canada
Asia Pacific
Australasia
South America
Middle East & Africa
Europe & FSU
Non-current assets
The Weir Group PLC Annual Report and Financial Statements 2023
163
2023
£m
308.8
707.6
168.8
195.1
201.8
81.4
97.6
57.6
1,818.7
2022
£m
310.3
765.5
177.7
184.6
210.5
82.9
105.1
50.6
1,887.2
Strategic Report
Governance
Financial Statements
Additional Information
Notes to the Group Financial Statements
continued
5. Revenues & expenses
The following disclosures are given in relation to continuing operations.
Year ended 31 December 2023
Year ended 31 December 2022
Adjusted
results
Adjusting
items
Statutory
results
Adjusted
results
Adjusting
items
Statutory
results
£m
£m
£m
£m
£m
£m
A reconciliation of revenue to operating profit is as follows:
Revenue
Cost of sales
Gross profit
Other operating income
Selling & distribution costs
Administrative expenses
Share of results of joint ventures
Operating profit
2,636.0
(1,641.1)
994.9
5.9
(291.4)
(253.1)
2.5
458.8
—
(1.6)
— 2,636.0 2,472.1
(1.6) (1,642.7) (1,573.4)
898.7
993.3
5.9
(293.8)
(339.5)
2.5
368.4
(279.8)
(237.0)
394.8
10.4
(2.4)
2.5
—
(90.4)
(86.4)
— 2,472.1
(24.8) (1,598.2)
(24.8)
873.9
—
10.4
(4.2)
(284.0)
(58.3)
(295.3)
—
2.5
(87.3)
307.5
Year ended 31 December 2023
Year ended 31 December 2022
Adjusted
results
Adjusting
items
Statutory
results
Adjusted
results
Adjusting
items
Statutory
results
£m
£m
£m
£m
£m
£m
Operating profit from continuing operations is stated after charging (crediting):
Cost of inventories recognised as an expense
1,641.1
Depreciation of property, plant & equipment (note 12)
Lease expenses (note 12)
Amortisation of intangible assets (note 13)
Net foreign exchange losses
Net impairment charge of trade receivables (note 18)
Exceptional and other adjusting items (note 6)1
1. Items not separately disclosed above.
71.5
14.5
12.2
9.2
1.5
—
25.5
—
—
12.2
— 1,641.1 1,573.4
78.4
71.5
14.5
37.7
9.2
3.4
63.0
14.3
5.7
1.7
—
—
1.9
63.0
— 1,573.4
—
—
35.9
—
8.3
43.1
78.4
12.2
41.6
14.3
10.0
43.1
Research & development costs
Research & development costs for continuing operations amount to £47.3m (2022: £48.1m) of which £46.4m (2022: £46.9m) was charged
directly to cost of sales in the income statement and £0.9m (2022: £1.2m) was capitalised (note 13).
Government grants
In the year to 31 December 2023, ESCO has benefited from two government grants. Both grants are recorded in deferred income when
received and are amortised to the Consolidated Income Statement on a straight-line basis. The first grant is in relation to research &
development projects in Motion Metrics under which £0.5m (2022: £nil) was received in the year. As this grant is received in phases, there was
no deferred income balance at 31 December 2023 in relation to this grant. The second grant is in relation to operating expenditure associated
with the relocation and construction of the new Xuzhou foundry. In the year £0.5m (2022: £nil) was recognised in the Consolidated Income
Statement under this grant and £4.8m was held in deferred income (2022: £nil) at 31 December 2023. There are no unfulfilled conditions or
other contingencies attaching to either grant.
Employee benefits expense
Wages & salaries
Social security costs
Other pension costs
Defined benefit plans
Defined contribution plans
Share-based payments – equity settled transactions (note 28)
Details of Directors’ remuneration is disclosed in note 29.
The Weir Group PLC Annual Report and Financial Statements 2023
164
2023
£m
549.3
47.5
0.1
29.0
7.0
632.9
2022
£m
525.0
44.7
0.4
26.8
8.0
604.9
Strategic Report
Governance
Financial Statements
Additional Information
Strategic Report
Governance
Financial Statements
Additional Information
Notes to the Group Financial Statements
continued
Notes to the Group Financial Statements
continued
The average monthly number of people employed by the Company and its subsidiaries is as follows:
Minerals
ESCO
Group companies
2023
Number
9,185
2,577
301
12,063
2022
Number
8,880
2,507
482
11,869
At 31 December 2023, the total number of people employed by the Group, including contingent workers, was 12,391 (2022: 12,627).
The total fees payable by the Group to our auditors for work performed in respect of the audit and other services provided to the Company and
its subsidiary companies during the year are disclosed below.
Operating profit from continuing operations is stated after charging (crediting):
Cost of inventories recognised as an expense
1,641.1
— 1,641.1 1,573.4
— 1,573.4
6. Adjusting items
Year ended 31 December 2023
Year ended 31 December 2022
The audit of the Company's subsidiaries
Adjusted
Adjusting
Statutory
Adjusted
Adjusting
Statutory
results
items
results
results
items
results
£m
£m
£m
£m
£m
£m
Audit-related assurance services
Other non-audit services
Auditors' remuneration
Fees payable to the Company's auditors for the audit of the Company and Consolidated Financial
Statements
Fees payable to the Company's auditors for other services
Research & development costs for continuing operations amount to £47.3m (2022: £48.1m) of which £46.4m (2022: £46.9m) was charged
Other restructuring and rationalisation activities
directly to cost of sales in the income statement and £0.9m (2022: £1.2m) was capitalised (note 13).
Recognised in arriving at operating profit from continuing operations
Intangibles amortisation (note 5)
Exceptional items
Acquisition and integration related costs
Russian operations wind down
Performance Excellence programme
Other adjusting items
Asbestos-related provision
Total adjusting items
Recognised in arriving at operating profit from discontinued operations
Exceptional items
Finalisation of Oil & Gas related tax assessment
Total adjusting items (note 9)
2023
£m
2.2
1.8
0.1
0.2
2023
£m
2022
£m
2.3
1.5
0.1
—
2022
£m
(25.5)
(35.9)
(0.7)
7.7
(28.8)
0.1
(21.7)
(43.2)
(90.4)
(2.4)
(44.0)
(2.9)
0.4
(48.9)
(2.5)
(87.3)
(1.3)
(1.3)
—
—
Continuing operations
Intangibles amortisation
Intangibles amortisation of £25.5m (2022: £35.9m) relates to acquisition related assets. In the prior year the £35.9m amortisation charge
included £7.4m in relation to ongoing multi-year investment activities, as outlined in the accounting policy in note 2.
Exceptional items
Exceptional items in the year include £0.7m of acquisition and integration related costs. These costs were cash settled during the year.
During the prior year exceptional costs of £44.0m were recognised in the Consolidated Income Statement in respect of the wind down of
Russia operations. Of this total, £39.1m arose from the uncertainty over recoverability of assets in the Minerals division, with provisions made
for the majority of Weir Minerals Russia’s closing third-party net assets of £19.5m, severance costs of £3.3m, customer penalties of £1.8m and
other costs of £0.8m mainly relating to staff retention. Exceptional charges were also recognised in other Minerals entities, including provision
for 'made to order' inventory prohibited from being shipped of £7.0m, receivables from sanctioned customers of £2.8m, and severance and
incremental warehousing costs totalling £3.9m. A further £4.9m arose from the loss on disposal of the ESCO Russia operations. In the current
year a net credit of £7.7m has been recognised, primarily in respect of the reversal of previously impaired inventory and receivables, as working
capital recoveries have exceeded initial expectations. These reversals were partially offset by £2.0m of additional inventory provision made for
newly emerging contract exposures in the first half of the year and £1.9m of additional receivables provisions.
5. Revenues & expenses
The following disclosures are given in relation to continuing operations.
A reconciliation of revenue to operating profit is as follows:
Revenue
Cost of sales
Gross profit
Other operating income
Selling & distribution costs
Administrative expenses
Share of results of joint ventures
Operating profit
Year ended 31 December 2023
Year ended 31 December 2022
Adjusted
Adjusting
Statutory
Adjusted
Adjusting
Statutory
results
items
results
£m
£m
£m
results
£m
items
£m
results
£m
2,636.0
— 2,636.0 2,472.1
— 2,472.1
(1,641.1)
(1.6) (1,642.7) (1,573.4)
(24.8) (1,598.2)
994.9
(1.6)
993.3
898.7
(24.8)
873.9
5.9
—
5.9
10.4
—
10.4
(291.4)
(2.4)
(293.8)
(279.8)
(4.2)
(284.0)
(253.1)
(86.4)
(339.5)
(237.0)
(58.3)
(295.3)
2.5
—
2.5
2.5
—
2.5
458.8
(90.4)
368.4
394.8
(87.3)
307.5
Depreciation of property, plant & equipment (note 12)
Lease expenses (note 12)
Amortisation of intangible assets (note 13)
Net foreign exchange losses
Net impairment charge of trade receivables (note 18)
Exceptional and other adjusting items (note 6)1
1. Items not separately disclosed above.
Research & development costs
71.5
14.5
12.2
9.2
1.5
—
—
—
25.5
—
1.9
71.5
14.5
37.7
9.2
3.4
63.0
63.0
78.4
12.2
5.7
14.3
1.7
—
—
—
35.9
—
8.3
43.1
78.4
12.2
41.6
14.3
10.0
43.1
Government grants
In the year to 31 December 2023, ESCO has benefited from two government grants. Both grants are recorded in deferred income when
received and are amortised to the Consolidated Income Statement on a straight-line basis. The first grant is in relation to research &
development projects in Motion Metrics under which £0.5m (2022: £nil) was received in the year. As this grant is received in phases, there was
no deferred income balance at 31 December 2023 in relation to this grant. The second grant is in relation to operating expenditure associated
with the relocation and construction of the new Xuzhou foundry. In the year £0.5m (2022: £nil) was recognised in the Consolidated Income
Statement under this grant and £4.8m was held in deferred income (2022: £nil) at 31 December 2023. There are no unfulfilled conditions or
other contingencies attaching to either grant.
Employee benefits expense
Wages & salaries
Social security costs
Other pension costs
Defined benefit plans
Defined contribution plans
Share-based payments – equity settled transactions (note 28)
Details of Directors’ remuneration is disclosed in note 29.
2023
£m
549.3
47.5
0.1
29.0
7.0
632.9
2022
£m
525.0
44.7
0.4
26.8
8.0
604.9
The Weir Group PLC Annual Report and Financial Statements 2023
164
The Weir Group PLC Annual Report and Financial Statements 2023
165
Strategic Report
Governance
Financial Statements
Additional Information
Notes to the Group Financial Statements
continued
As a result of our ongoing Performance Excellence programme, an exceptional charge of £28.8m has been recorded. The three-year
programme aims to transform the way we work with more agile and efficient business processes, with a focus on customer and service-
delivery. The programme includes capacity optimisation, lean processes and global business services. Costs of £16.5m, primarily severance,
have been recognised under the capacity optimisation and lean processes pillars of the programme due to the relocation of facilities, service
centre restructuring and transfer of certain manufacturing operations across the USA, Australia and South America. Of these costs, £9.1m have
been cash settled in the year. The remaining costs of £12.3m primarily relate to consulting fees and other costs associated with establishing
Weir Business Services, with £5.2m being cash settled in the year.
Also included within exceptional items is a £0.1m credit for the release of an unutilised prior year provision for restructuring and rationalisation
activities in China.
Other adjusting items
A charge of £43.2m (2022: £2.5m) has been recorded in respect of movements in the US asbestos-related liability and associated insurance
asset that relate to legacy products sold by a US-based subsidiary of the Group. Further details of this are included in note 22.
Discontinued operations
Exceptional items
A charge of £1.3m has been recognised in the period in relation to the gain on sale of discontinued operations (note 9). This relates to the
finalisation of certain tax indemnities under the sale and purchase agreement for the Oil & Gas Division, which was disposed of in 2021.
7. Finance (costs) income
Finance costs
Interest payable on financial liabilities
Interest and finance charges payable on lease liabilities
Change in fair value of forward points in cross-currency swaps and forward contracts
Finance charges related to committed loan facilities
Finance charges related to discounting of trade receivables
Other finance costs - retirement benefits
Finance income
Interest receivable on financial assets
Other finance income - retirement benefits
2023
£m
(54.1)
(4.8)
(0.1)
(5.2)
(0.7)
(1.5)
(66.4)
2023
£m
16.1
2.6
18.7
2022
£m
(38.1)
(4.0)
(0.5)
(6.6)
(0.5)
(1.3)
(51.0)
2022
£m
3.7
—
3.7
The Weir Group PLC Annual Report and Financial Statements 2023
166
Strategic Report
Governance
Financial Statements
Additional Information
Notes to the Group Financial Statements
continued
8. Tax expense
Income tax (expense) credit from total operations
Consolidated Income Statement
Current income tax
UK corporation tax
Adjustments in respect of previous years
Total UK corporation tax
Foreign tax
Adjustments in respect of previous years
Total current income tax
Deferred income tax
Origination & reversal of temporary differences
Adjustment to estimated recoverable deferred tax assets
Effect of changes in tax rates
Adjustments in respect of previous years
Total deferred tax1
2023
£m
3.9
(1.3)
2.6
(115.3)
1.9
(110.8)
21.1
0.2
(4.1)
2.8
20.0
2022
£m
2.2
(2.2)
—
(89.8)
2.8
(87.0)
11.0
31.3
0.2
(1.9)
40.6
Total income tax expense in the Consolidated Income Statement
(90.8)
(46.4)
Total income tax (expense) credit is attributable to:
Profit from continuing operations
Loss from discontinued operations
1. Includes £10.5m of a deferred tax credit relating to foreign tax (2022: £41.0m credit).
The total income tax expense is disclosed in the Consolidated Income Statement and note 9, as follows.
Tax (expense) credit
- adjusted results
- adjusting items
Continuing operations income tax expense in the Consolidated Income Statement
Discontinued operations income tax credit in the Consolidated Income Statement
Total income tax expense in the Consolidated Income Statement
(90.8)
—
(90.8)
2023
£m
(110.9)
20.1
(90.8)
—
(90.8)
(47.6)
1.2
(46.4)
2022
£m
(92.5)
44.9
(47.6)
1.2
(46.4)
The tax credit of £20.1m (2022: £44.9m) which has been recognised in adjusting items includes £0.9m (2022: £8.6m) in respect of adjusting
intangibles amortisation and impairment. The £0.9m credit consists of a £5.6m credit in relation to intangibles amortisation which is offset by a
non-recurring £4.7m charge in relation to changes in tax rates. The remaining £19.2m (2022: £36.3m) relates to exceptional and other adjusting
items and includes a credit of £10.1m (2022: £3.5m) which primarily relates to the US asbestos-related provision.
The total deferred tax included in the income tax expense is detailed in note 23.
The Weir Group PLC Annual Report and Financial Statements 2023
167
Strategic Report
Governance
Financial Statements
Additional Information
Notes to the Group Financial Statements
continued
Tax relating to items credited or (charged) to equity from continuing operations
Consolidated Statement of Comprehensive Income
Deferred tax – origination & reversal of temporary differences
Deferred tax – effect of change in tax rates
Tax credit (charge) on actuarial gains/losses on retirement benefits
Tax credit (charge) on hedge losses
Tax credit (charge) in the Consolidated Statement of Comprehensive Income
Consolidated Statement of Changes in Equity
Deferred tax on share-based payments
Tax credit in the Consolidated Statement of Changes in Equity
2023
£m
7.5
(0.4)
7.1
0.1
7.2
0.1
0.1
2022
£m
(12.4)
(3.9)
(16.3)
(0.1)
(16.4)
0.9
0.9
Reconciliation of the total tax charge from total operations
The tax charge (2022: charge) in the Consolidated Income Statement for the year is higher (2022: lower) than the weighted average of standard
rates of corporation tax across the Group of 28.1% (2022: 27.7%). The differences are reconciled below.
Profit before tax from continuing operations
Loss before tax from discontinued operations
Profit before tax
At the weighted average of standard rates of corporation tax across the Group of 28.1% (2022: 27.7%)
Adjustments in respect of previous years
- current tax
- deferred tax
Joint ventures
Unrecognised deferred tax assets
Overseas tax on unremitted earnings
Permanent differences
Effect of changes in tax rates
Exceptional and other adjusting items ineligible for tax
At effective tax rate of 28.5% (2022: 17.8%)
2023
£m
320.7
(1.3)
319.4
89.6
(0.6)
(2.8)
(0.6)
(0.2)
(1.2)
5.6
4.1
(3.1)
90.8
2022
£m
260.2
—
260.2
72.2
(0.6)
1.9
(0.2)
(31.3)
(0.7)
(0.7)
(0.2)
6.0
46.4
Exceptional and other adjusting items ineligible for tax includes the impact of a non-taxable movement in the provision for write-offs of third-
party receivables and inventory balances relating to the winding down of operations in Russia.
Unrecognised deferred tax assets decreased from a reduction of £31.3m in 2022 to a reduction of £0.2m in 2023.
The Group’s provision for overseas tax on unremitted earnings decreased from a reduction of £0.7m in 2022 to a reduction of £1.2m in 2023.
This is due to an increase in dividend payments from Chile during the year.
Permanent differences increased from a reduction of £0.7m in 2022 to an addition of £5.6m in 2023. The increase in 2023 permanent
differences includes the impact of non-deductible foreign exchange losses, increased irrecoverable withholding tax on dividends and the impact
of a reduction in inflationary adjustments in territories including Chile and Argentina.
The Weir Group PLC Annual Report and Financial Statements 2023
168
Strategic Report
Governance
Financial Statements
Additional Information
Notes to the Group Financial Statements
continued
9. Discontinued operations
In the year ended 31 December 2023, a charge of £1.3m has been recognised in relation to the finalisation of certain tax indemnities under the
sale and purchase agreement for the Oil & Gas Division, which was disposed of in 2021. In the prior year, a tax credit of £1.2m was recognised
following the filing of the 2021 US tax return for Oil & Gas Division related activities. Total current year investing cash outflows from
discontinued operations related to the charge in the period are £0.4m (2022: £0.1m).
For full disclosure of the disposal of the Oil & Gas Division refer to note 8 of the Group's 2021 Annual Report and Financial Statements.
(Loss) earnings per share
(Loss) earnings per share from discontinued operations were as follows.
Basic
Diluted
2023
pence
(0.5)
(0.5)
2022
pence
0.5
0.5
The (loss) earnings per share figures were derived by dividing the net (loss) profit attributable to equity holders of the Company from
discontinued operations by the weighted average number of ordinary shares, for both basic and diluted amounts, shown in note 10.
The Weir Group PLC Annual Report and Financial Statements 2023
169
Strategic Report
Governance
Financial Statements
Additional Information
Notes to the Group Financial Statements
continued
10. Earnings per share
Basic earnings per share amounts are calculated by dividing net profit for the year attributable to equity holders of the Company by the
weighted average number of ordinary shares in issue after deducting the own shares held by employee share ownership trusts and treasury
shares. Diluted earnings per share is calculated by dividing the net profit attributable to equity holders of the Company by the weighted average
number of ordinary shares outstanding during the year, adjusted for the effect of dilutive share awards.
The following reflects the earnings used in the calculation of earnings per share.
Profit attributable to equity holders of the Company
Total operations1
Continuing operations1
Continuing operations before adjusting items1
2023
£m
227.9
229.2
299.5
2022
£m
213.4
212.2
254.6
The following reflects the share numbers used in the calculation of earnings per share, and the difference between the weighted average share
capital for the purposes of the basic and the diluted earnings per share calculations.
Weighted average number of ordinary shares for basic earnings per share
Effect of dilution: employee share awards
Adjusted weighted average number of ordinary shares for diluted earnings per share
2023
Shares
million
258.4
1.4
259.8
2022
Shares
million
258.7
1.6
260.3
The profit attributable to equity holders of the Company used in the calculation of both basic and diluted earnings per share from continuing
operations before adjusting items is calculated as follows.
Net profit attributable to equity holders from continuing operations1
Adjusting items net of tax
Net profit attributable to equity holders from continuing operations before adjusting items
Basic earnings per share
Total operations1
Continuing operations1
Continuing operations before adjusting items1
Diluted earnings per share
Total operations1
Continuing operations1
Continuing operations before adjusting items1
2023
£m
229.2
70.3
299.5
2023
pence
88.2
88.7
115.9
87.7
88.2
115.3
2022
£m
212.2
42.4
254.6
2022
pence
82.5
82.0
98.4
82.0
81.5
97.8
1 Adjusted for a profit of £0.7m (2022: £0.4m) in respect of non-controlling interests for total operations.
There have been nil share awards (2022: 839) exercised between the reporting date and the date of signing of these financial statements. They
were settled out of existing shares held in trust.
(Loss) earnings per share from discontinued operations is disclosed in note 9.
The Weir Group PLC Annual Report and Financial Statements 2023
170
Strategic Report
Governance
Financial Statements
Additional Information
Notes to the Group Financial Statements
continued
11. Dividends paid & proposed
Declared & paid during the year
Equity dividends on ordinary shares
Final dividend for 2022: 19.3p (2021: 12.3p)
Interim dividend for 2023: 17.8p (2022: 13.5p)
Proposed for approval by Shareholders at the Annual General Meeting
Final dividend for 2023: 20.8p (2022: 19.3p)
2023
£m
49.9
46.0
95.9
53.6
2022
£m
31.8
34.9
66.7
49.9
The current year dividend is in line with the capital allocation policy announced in our 2020 Annual Report and Financial Statements, under
which the Group intends to distribute 33% of adjusted earnings by way of dividend. As a result, dividend cover in 2023 is 3.0 times.
The proposed dividend is based on the number of shares in issue, excluding treasury shares held, at the date that the financial statements were
approved and authorised for issue. The final dividend may differ due to increases or decreases in the number of shares in issue between the
date of approval of this Annual Report and Financial Statements and the record date for the final dividend.
The Weir Group PLC Annual Report and Financial Statements 2023
171
Strategic Report
Governance
Financial Statements
Additional Information
Notes to the Group Financial Statements
continued
12. Property, plant & equipment
Property, plant & equipment comprises owned and right-of-use assets that do not meet the definition of investment property.
Cost
At 31 December 2021
Additions
Acquisitions
Disposals
Disposal of business
Reclassifications
Reassessments and modifications
Inflation adjustment
Exchange adjustment
At 31 December 2022
Additions
Disposals
Reclassifications to inventory
Reclassifications
Reassessments and modifications
Inflation adjustment
Exchange adjustment
At 31 December 2023
Accumulated depreciation & impairment
At 31 December 2021
Depreciation charge for the year
Impairment during the year
Disposals
Disposal of business
Reclassifications
Reassessments and modifications
Inflation adjustment
Exchange adjustment
At 31 December 2022
Depreciation charge for the year
Impairment during the year
Disposals
Reclassifications
Reassessments and modifications
Inflation adjustment
Exchange adjustment
At 31 December 2023
Owned
land &
buildings
£m
Owned
plant &
equipment
£m
Total
owned
property,
plant &
equipment
£m
Right-of-
use land &
buildings
£m
Right-of-
use plant &
equipment
£m
Total right-
of-use
property,
plant &
equipment
£m
Total
property,
plant &
equipment
£m
134.0
494.6
628.6
136.0
29.0
165.0
793.6
4.8
0.8
(4.9)
—
0.6
—
—
55.9
2.8
60.7
3.6
(18.7)
(23.6)
(0.4)
(0.6)
—
0.4
(0.4)
—
—
0.4
54.1
24.9
—
(6.3)
—
—
2.0
—
7.6
6.8
—
(5.3)
(0.1)
—
1.5
—
1.8
31.7
—
(11.6)
(0.1)
—
3.5
—
9.4
10.9
43.2
146.2
577.2
723.4
164.2
33.7
197.9
92.4
3.6
(35.2)
(0.5)
—
3.5
0.4
63.5
921.3
120.0
(28.8)
(0.2)
—
3.5
2.0
33.3
(12.0)
—
—
3.5
—
(9.4)
(53.6)
213.3
964.2
66.5
31.4
—
(11.2)
—
—
(0.3)
—
5.0
91.4
31.6
—
377.7
78.4
1.3
(31.2)
(0.1)
—
(0.3)
0.3
33.0
459.1
71.5
1.4
7.5
(4.2)
—
0.1
0.5
—
(1.7)
35.9
14.6
8.3
—
(5.1)
—
—
(0.9)
—
1.2
18.1
7.6
—
(4.1)
(11.2)
(26.9)
—
(0.3)
—
(0.8)
20.5
14.4
15.6
15.4
—
(2.6)
—
—
(2.6)
1.6
(4.5)
(30.4)
104.7
473.7
98.5
106.5
108.6
415.9
462.2
490.5
3.1
(0.9)
—
5.9
—
—
83.6
(15.9)
(0.2)
(5.9)
—
2.0
86.7
(16.8)
(0.2)
—
—
2.0
(8.1)
(36.1)
(44.2)
25.8
(7.8)
—
(0.1)
3.0
—
(7.7)
146.2
604.7
750.9
177.4
36.8
274.4
311.2
5.2
0.1
(2.6)
—
(0.1)
—
—
3.1
41.8
1.2
47.0
1.3
(17.4)
(20.0)
(0.1)
0.1
—
0.3
24.9
(0.1)
—
—
0.3
28.0
42.5
325.2
367.7
4.8
0.9
(0.8)
(0.1)
—
—
(2.7)
44.6
35.1
0.5
39.9
1.4
(14.9)
(15.7)
0.1
—
1.6
—
—
1.6
(23.2)
(25.9)
324.4
369.0
51.9
23.1
—
(6.1)
—
—
0.6
—
3.8
73.3
24.0
—
(7.1)
—
(2.3)
—
(3.7)
84.2
84.1
90.9
93.2
Net book value at 31 December 2021
Net book value at 31 December 2022
Net book value at 31 December 2023
97.2
220.2
317.4
103.7
252.0
355.7
101.6
280.3
381.9
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Financial Statements
Additional Information
Notes to the Group Financial Statements
continued
Owned property, plant & equipment
In 2023, an impairment of £1.4m (2022: £1.3m) has been recognised following the cessation of capital expenditure projects in the United States
and Australia totalling £0.9m and £0.5m respectively. Impairment in the prior year primarily relates to assets located in Russia, following the
Group's announcement to wind down operations.
Acquisitions of £3.6m recorded in 2022 relate to Carriere Industrial Supply Limited (CIS), which was acquired on 8 April 2022.
The prior year disposal of business related wholly to assets held by ESCO Russia, which was disposed of on 15 September 2022, which
decreased cost by £0.4m and accumulated depreciation by £0.1m.
In 2023, the inflation adjustment recorded was to increase cost by £2.0m (2022: £0.4m) and increase accumulated depreciation by £1.6m
(2022: £0.3m). The inflation adjustments relate to owned plant and equipment assets located in Argentina, within the Minerals Division.
Inflation adjustments were recorded in accordance with IAS 29 'Financial Reporting in Hyperinflationary Economies'.
The carrying amount of assets under construction included in plant and equipment is £64.7m (2022: £41.6m).
Right-of-use assets
The Group leases many assets, including buildings, vehicles, forklifts, photocopiers and printers, machinery and IT equipment. Building lease
terms are negotiated on an individual basis and contain a wide range of terms from one to 20 years. The average lease term is approximately
five years. Plant and equipment lease terms range from one to 16 years, with an average lease term of approximately four years. The current
and non-current lease liabilities are disclosed in notes 20 and 30 respectively. The maturity analysis of contractual undiscounted cash flows is
included in note 30. The following table shows the breakdown of the lease expense between amounts charged to operating profit and amounts
charged to finance costs in the Consolidated Income Statement in the year.
Depreciation of right-of-use assets
Expenses relating to short-term leases
Expenses relating to leases of low value assets, excluding short-term leases of low value
Income from sub-leasing right-of-use assets
Expenses relating to variable lease payments not included in the measurement of lease liabilities
Charge to operating profit
Finance cost - interest expense related to lease liabilities
Charge to profit before tax from continuing operations
2023
£m
(31.6)
(11.3)
(2.3)
0.4
(1.3)
(46.1)
(4.8)
(50.9)
2022
£m
(31.4)
(9.6)
(2.4)
0.6
(0.8)
(43.6)
(4.0)
(47.6)
The total cash outflow in the year, which includes right-of-use cash flows and associated finance costs, as well as cash flows for the above
expenses, is £50.7m (2022: £47.4m). Future cash outflows from leases not yet commenced to which the Group is committed total £32.8m
(2022: £16.2m).
The Weir Group PLC Annual Report and Financial Statements 2023
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Financial Statements
Additional Information
Notes to the Group Financial Statements
continued
13. Intangible assets
Cost
Goodwill
£m
Brand
names
£m
Customer &
distributor
relationships
Purchased
software
Intellectual
property &
trademarks
Development
costs
£m
£m
£m
£m
Other
£m
Total
£m
At 31 December 2021
800.8
258.9
181.5
89.2
123.6
47.7
68.4
1,570.1
Additions
Acquisitions
Disposals
Exchange adjustment
At 31 December 2022
Additions
Acquisitions
Disposals
Inflation adjustment
Exchange adjustment
At 31 December 2023
—
3.7
—
—
—
—
77.0
30.2
—
3.1
(8.9)
17.7
5.6
—
(2.3)
6.0
—
—
—
12.6
1.2
—
—
0.8
—
—
(0.1)
6.7
6.8
6.8
(11.3)
151.0
881.5
289.1
193.4
98.5
136.2
49.7
75.0
1,723.4
—
5.9
—
—
—
—
—
—
—
—
—
—
(44.9)
(14.9)
842.5
274.2
(10.1)
183.3
6.7
0.8
(0.8)
0.1
(5.2)
—
—
—
—
(6.4)
100.1
129.8
0.9
—
—
—
(0.7)
(0.4)
—
(0.4)
49.5
—
(4.1)
7.6
6.7
(1.9)
0.1
(86.0)
70.5
1,649.9
Accumulated amortisation & impairment
At 31 December 2021
Charge for the year
Impairment during the year
Disposals
Reclassifications
Exchange adjustment
At 31 December 2022
Charge for the year
Disposals
Inflation adjustment
Exchange adjustment
At 31 December 2023
3.2
—
—
—
—
0.2
3.4
—
—
—
(0.3)
3.1
—
0.3
—
—
—
—
0.3
0.2
—
—
—
0.5
84.0
8.0
—
(8.9)
1.1
6.7
90.9
6.1
—
—
(5.0)
92.0
Net book value at 31 December 2021
797.6
258.9
Net book value at 31 December 2022
878.1
288.8
Net book value at 31 December 2023
839.4
273.7
97.5
102.5
91.3
48.3
10.3
0.3
(2.3)
—
3.7
60.3
10.3
(0.7)
0.1
(3.2)
66.8
40.9
38.2
33.3
58.1
14.0
—
—
—
7.0
79.1
12.9
—
—
(4.6)
87.4
65.5
57.1
42.4
37.7
30.4
261.7
2.6
—
—
—
0.4
6.4
—
(0.1)
(1.1)
3.2
40.7
38.8
1.8
(0.7)
—
(0.3)
41.5
6.4
(0.2)
—
(2.4)
42.6
41.6
0.3
(11.3)
—
21.2
313.5
37.7
(1.6)
0.1
(15.8)
333.9
10.0
38.0
1,308.4
9.0
8.0
36.2
1,409.9
27.9
1,316.0
In 2023, no impairment has been recorded (2022: £0.3m). Impairment in the prior year relates to assets located in Russia, following the Group's
announcement to suspend and wind down operations.
In 2023, acquisitions of £6.7m (2022: £6.8m) related to the acquisition of Sentiantechnologies AB (SentianAI) on 21 November 2023, as outlined
in note 14. Acquisitions in the prior year relate to Carriere Industrial Supply Limited (CIS), which was acquired on 8 April 2022.
In 2023, the inflation adjustment recorded was to increase cost by £0.1m (2022: £nil) and increase accumulated amortisation by £0.1m (2022:
£nil). The inflation adjustments related to purchased software assets located in Argentina, within the Minerals Division. Inflation adjustments
were recorded in accordance with IAS 29 'Financial Reporting in Hyperinflationary Economies'.
The carrying amount of assets under construction included in intangible assets is £3.9m (2022: £6.1m).
Brand names, with the exception of the Motion Metrics™ brand name, have been assigned an indefinite useful life and as such are not
amortised, but are tested annually for impairment, as detailed in note 15. At 31 December 2023 the carrying value of brand names with an
indefinite life was £270.8m (2022: £285.6m). The Motion Metrics™ brand name has an expected useful life of 15 years and is being amortised
over this period.
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Additional Information
Notes to the Group Financial Statements
continued
Brand names includes ESCO™, Linatex® and Warman®, all of which are considered to be leaders in their respective markets. The allocation of
significant brand names is as follows.
ESCO
Warman
Linatex
Trio
Other1
Brand names
2023
£m
133.6
65.0
44.7
18.6
11.8
273.7
2022
£m
141.0
68.6
47.1
19.7
12.4
288.8
1. Included within 'Other' is the Motion Metrics® brand name, which has a carrying value of £2.9m at 31 December 2023 (2022: £3.2m), and is being amortised over an expected remaining
useful life of 13 years (2022: 14 years).
The allocation of customer and distributor relationships, and the amortisation period of these assets is as follows.
ESCO
Carriere Industrial Supply
Trio
Other
Remaining amortisation
period
Customer & distributor
relationships
2023
Years
22-25
13
1
Up to 2
2022
Years
23-26
14
2
Up to 3
2023
£m
87.0
2.6
0.8
0.9
91.3
2022
£m
95.9
2.9
2.0
1.7
102.5
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Governance
Financial Statements
Additional Information
Notes to the Group Financial Statements
continued
14. Business combinations
Sentiantechnologies AB
On 21 November 2023, the Group completed the acquisition of 100% of the voting rights of Sentiantechnologies AB (SentianAI) for an
enterprise value of SEK87.3m (£6.7m). SentianAI is a Swedish-based developer of innovative cloud-based Artificial Intelligence (AI) solutions for
the mining industry. The acquisition has joined the Minerals Division and SentianAI's technology will integrate with Minerals' existing product
lines, and expand the Division's digital capabilities. Initial consideration of £6.1m was paid on completion, with a further deferred consideration
of £0.6m recognised, payable 15 months after the date of acquisition.
The provisional fair values, which are subject to finalisation within 12 months of acquisition, include intangible assets £0.8m, trade & other
receivables £0.2m, cash & cash equivalents £0.2m, trade & other payables £0.2m and external debt £0.2m, with resulting goodwill arising on
consolidation of £5.9m.
Prior year business combination
Carriere Industrial Supply Limited
On 8 April 2022, the Group completed the acquisition of 100% of the voting rights of Carriere Industrial Supply Limited (CIS) for an enterprise
value of CAD$32.5m (£20.2m). CIS is a Canadian-based manufacturer and distributor of wear parts, and an aftermarket service provider to the
mining industry, with exposure across both surface and underground mining in Ontario and Quebec. The acquisition joined the ESCO Division
and reporting segment as CIS was already an established distributor of ESCO's core Ground Engaging Tools (GET) products. This acquisition
will maintain ESCO's leading core GET presence in Ontario and provide opportunities to expand into fabricated hardware and
underground capabilities.
Initial consideration of £16.2m was paid on completion, with a further deferred consideration of £2.5m recognised reflecting indemnification
and working capital hold backs. In the year ended 31 December 2023, the Group settled £1.0m (2022: £0.5m) of the deferred consideration
balance, on the first anniversary of the acquisition date as per the sale and purchase agreement. The remaining £1.0m balance will be settled in
April 2024, on the second anniversary of the acquisition date.
The provisional fair values of the opening balance sheet acquired were finalised in April 2023, following a review over a 12 month period since
the date of acquisition, as permitted by IFRS 3 'Business combinations'. No adjustment was required to be made to the fair values reported in
the 2022 Annual Report.
Contingent consideration
SentianAI
Included in the sale and purchase agreement of SentianAI, a maximum of an additional SEK23.7m (£1.9m) is payable by the Group contingent
on SentianAI exceeding specific revenue and EBITDA margin targets over the next three years and meeting non-financial targets by the end of
2026. The entry point for any contingent payment would require significant growth in terms of revenue and EBITDA margin by 2026. While the
Group expects SentianAI to grow as it leverages the benefits of being partnered with Minerals, and the opportunities within ESCO, the entry
targets are considered challenging. At present the probability of SentianAI exceeding the revenue and EBITDA margin targets in order to trigger
a contingent payment is considered uncertain, in part due to the relative infancy of the business. As a result no contingent consideration has
been recorded at the acquisition date. This will be reassessed in future periods as the business develops.
Motion Metrics
The Group completed the acquisition of 100% of the voting rights of Motion Metrics on 30 November 2021. As part of the purchase agreement
a maximum of an additional CAD$100.0m (£59.3m) is payable by the Group contingent on Motion Metrics exceeding specific revenue and
EBITDA targets over the first three years following acquisition. Any balance that becomes payable would be split, with 80% reflecting further
consideration and 20% for a new employee bonus plan. The entry point for any contingent payment would require significant growth both in
terms of revenue and EBITDA margin by 2024. Progress has been made towards these targets throughout 2023 and, while the Group expects
Motion Metrics to continue to grow as it leverages the benefits of being partnered with ESCO and the opportunities with Minerals, the entry
targets are considered challenging. Due to the commercial sensitivity these targets are not disclosed. At present, given the results achieved
over the course of 2022 and 2023, the probability of Motion Metrics exceeding these targets in 2024 in order to trigger a contingent payment
are considered remote. As a result, no contingent consideration has been recorded at the balance sheet date in both the current and prior
periods. This will be reassessed in future periods as the business develops.
The Weir Group PLC Annual Report and Financial Statements 2023
176
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Governance
Financial Statements
Additional Information
Notes to the Group Financial Statements
continued
15. Impairment testing of goodwill & intangible assets with indefinite lives
Goodwill acquired through business combinations and intangible assets with indefinite lives have been allocated at acquisition to Cash
Generating Units (CGUs) that are expected to benefit from the business combination. The Group tests goodwill and intangible assets (brand
names) with indefinite lives annually for impairment, or more frequently if there are indications that these might be impaired.
The carrying amounts of goodwill and intangible assets with indefinite lives have been allocated as per the table below.
Minerals
ESCO
Total Group
Goodwill
Intangibles
Goodwill
Intangibles
2023
£m
377.7
461.7
839.4
2023
£m
137.2
133.6
270.8
2022
£m
392.5
485.6
878.1
2022
£m
144.6
141.0
285.6
Description of CGUs
A description of each of the CGUs is provided below along with a summary of the key drivers of revenue growth and operating profit margin.
Minerals
Minerals includes the Weir Warman, Weir Linatex and Weir Trio brands. Weir Minerals companies supply pumps and associated equipment and
services to all global mining markets. The key drivers for revenues are: (i) levels of mining capital expenditure that drives demand for original
equipment; and (ii) levels of actual mining activity that drives demand for spare parts and service. Independent forecasts of mining capital
expenditure and activity have been used to derive revenue growth assumptions. These independent forecasts were prepared during the final
quarter of 2023.
The goodwill and intangible assets arising from the acquisition of Sentiantechnologies AB (SentianAI) have been included within the Minerals
CGU from 21 November 2023. At 31 December 2023, the purchase price is considered to reflect the fair value of the assets and therefore the
addition to the Minerals CGU is considered to have a neutral impact on the impairment analysis.
ESCO
ESCO includes the ESCO and Bucyrus Blades brands. This CGU is a supplier of Ground Engaging Tools (GET) and associated equipment and
services to the mining and infrastructure industries. The key drivers for revenues are: (i) levels of mining and infrastructure capital expenditure
that drives demand for original equipment; and (ii) levels of actual mining and infrastructure activity that drives demand for spare parts and
service. Independent forecasts of expenditure in these sectors have been used to derive revenue growth assumptions. These independent
forecasts were prepared during the final quarter of 2023.
Impairment testing assumptions
Impairment testing requires an estimate of the value in use of the CGUs to which the goodwill and intangible assets are allocated. To estimate
the value in use, the Group estimates the expected future cash flows from the CGU and discounts them to their present value at a determined
discount rate, which is appropriate for the geographic location of the CGU. Forecasting expected cash flows and selecting an appropriate
discount rate inherently requires estimation. The forecasts reflect latest strategic plans, for each of the CGUs, covering a period of five years,
with cash flows beyond five years extrapolated using an estimated growth rate. The strategic plans incorporate initial plans for achieving the
Group’s long-term sustainability goals, which are described more fully in the Strategic Report.
The basis of the impairment tests for the two CGUs, including key assumptions, are set out in the table below.
Basis of
valuation
CGU
Minerals Value in use
Period of
forecast
5 years
Discount
rate1
12.2% (2022: 11.9%)
Real
growth2
0.0% (2022: 0.0%) Revenue growth/Adjusted
Key
assumptions3
operating profit margins
ESCO
Value in use
5 years
13.7% (2022: 13.8%)
0.0% (2022: 0.0%) Revenue growth/Adjusted
operating profit margins
Source
External forecast
Historic experience
External forecast
Historic experience
1. Discount rate
The pre-tax nominal weighted average cost of capital (WACC) is the basis for the discount rate, with adjustments made for geographic risk. The WACC is the weighted average of the pre-
tax cost of debt financing and the pre-tax cost of equity finance. The discount rate has increased in Minerals, due to changes in country mix with mining asset betas remaining stable, and
ESCO has remained broadly the same.
2. Real growth
For both CGUs the real growth beyond the five-year forecast period typically reflects external International Monetary Fund (IMF) forecast growth rates for the countries in which the CGU
operates. Whilst short-term inflation rates have eased in the last 12 months, they remain above historical levels. In light of this, for modelling purposes we have continued to restrict the real
growth to 0.0% in both CGUs to compensate for current volatility in rates. We do not believe this reflects our outlook on real growth given the global nature of these businesses, the long-
term growth prospects in their end markets and the fact that they sell a significant proportion of their products to emerging markets which also have strong long-term growth prospects.
3. Adjusted operating profit margins
Adjusted operating profit margins have been forecast based on historic levels taking cognisance of the likely impact of changing economic environments and competitive landscapes on
volumes and revenues, and the impact of associated management actions.
Impairment testing and sensitivity analysis
The Directors consider that the assumptions made represent their best estimate of the future cash flows generated by the CGU, and that the
discount rate used is appropriate given the risks associated with the specific cash flows. The resulting value in use model for the Minerals and
ESCO CGUs show significant headroom above carrying value.
While cash flow projections are subject to inherent uncertainty, no detailed sensitivity analysis has been performed for these CGUs, as there is
no reasonably possible change in key assumptions that would cause the carrying value amounts to exceed recoverable amounts. A 1%
increase in the pre-tax real discount rate and 1% decrease in growth rate for each CGU, also indicated significant headroom on the carrying
value of the assets.
Additionally, the Directors have considered scenarios consistent with meeting the Paris goals of limiting the global temperature increase to well
below 2°C, which the Directors consider to be a reasonably possible outcome. In these scenarios, assumptions have been made over the price
and production volumes of certain commodities, that are key to end customers, with several of these commodities being vital globally in
achieving the Paris goals. Under the scenarios considered by the Directors, there are no indicators of impairment in relation to either CGU.
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177
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Governance
Financial Statements
Additional Information
Notes to the Group Financial Statements
continued
16. Investments in joint ventures
At the year end, the Group held an investment in one joint venture, ESCO Elecmetal Fundición Limitada.
At 31 December 2021
Share of results
Share of dividends
Exchange adjustment
At 31 December 2022
Share of results
Share of dividends
Exchange adjustment
At 31 December 2023
The Group’s 50% share of the joint venture balance sheet is detailed below.
Share of joint venture's balance sheet
Current assets
Non-current assets
Current liabilities
Non-current liabilities
Net assets
The Group’s share of the revenue and profit of its joint venture is included below.
Share of joint venture's revenue & profits
Revenue
Cost of sales
Administrative expenses
Income tax expense
Interest
Profit after tax
The Group’s investment in the joint venture is included in the list of subsidiaries on pages 224 to 230.
£m
12.3
2.5
(2.7)
3.0
15.1
2.5
(4.1)
(1.3)
12.2
2022
£m
10.0
13.3
(2.2)
(6.0)
15.1
2022
£m
17.8
(14.8)
(0.2)
(0.2)
(0.1)
2.5
2023
£m
8.1
11.4
(4.4)
(2.9)
12.2
2023
£m
15.6
(12.6)
—
(0.6)
0.1
2.5
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Governance
Financial Statements
Additional Information
Notes to the Group Financial Statements
continued
17. Inventories
Raw materials
Work in progress
Finished goods
2023
£m
38.8
61.9
507.4
608.1
2022
£m
40.5
77.6
561.0
679.1
In 2023, the cost of inventories recognised as an expense within cost of sales amounted to £1,641.1m (2022: £1,573.4m). In 2023, the write
down of inventories to net realisable value amounted to £5.5m (2022: £26.7m), of which £2.0m (2022: £17.2m) was recognised as an
exceptional item (note 6). The reversal of previous write downs amounted to £9.7m (2022: £6.0m), of which £7.2m (2022: £nil) was recognised
as an exceptional item (note 6).
18. Trade & other receivables
Other receivables presented as non-current on the face of the Consolidated Balance Sheet of £53.8m (2022: £76.8m) are primarily in respect of
insurance contracts, including Trust Owned Life Insurance policy investments of £42.6m (2022: £45.9m) that provide a form of security for
certain unfunded employee benefit plans operated by ESCO, and insurance contracts relating to asbestos-related claims in the US of £5.4m
(2022: £24.5m). Further detail on these claims is presented in note 22.
Current trade and other receivables are analysed in the following table.
Trade receivables
Loss allowance
Other debtors
Sales tax receivable
Prepayments
Contract assets
2023
£m
412.5
(12.9)
399.6
30.9
31.5
33.2
31.0
526.2
2022
£m
444.7
(26.9)
417.8
24.7
20.1
39.4
26.9
528.9
The average credit period on sales of goods is 55 days (2022: 62 days) on a continuing basis. Other debtors includes £0.4m (2022: £0.3m)
in respect of amounts due from joint ventures, and £9.5m (2022: £7.5m) in respect of insurance contracts relating to asbestos-related claims
(note 22).
Impairment of trade & other receivables
The Group has two types of financial assets that are subject to the IFRS 9 'Financial instruments' expected credit loss model:
• trade receivables for sales of products and services; and
• contract assets relating to construction contracts.
The Group applies the IFRS 9 simplified approach to measuring expected credit losses, which uses a lifetime expected loss allowance for all
trade receivables and contract assets. To measure the expected credit losses, trade receivables and contract assets have been grouped based
on shared credit risk characteristics.
The contract assets relate to unbilled work in progress and have substantially the same risk characteristics as the trade receivables for the
same types of contracts. Due to the way in which these contracts are managed, expected credit loss if recognised is included within the loss
allowance for trade receivables.
Due to the diverse end markets and customer geographies within the Group, the methodology applied to arrive at the expected loss rate is
dictated by local circumstances. For short-term trade receivables, historical loss rates might be an appropriate basis for the estimate of
expected future losses. They are then adjusted to reflect current and forward-looking information on macroeconomic factors affecting the ability
of the customers to settle the receivables. As such, one methodology applied is the use of a provision matrix, where different loss rates are
applied depending on the number of days that a trade receivable is past due. Alternatively, the expected credit loss is calculated on an individual
customer basis based on historical loss data for that customer, their receivables ageing, and any other knowledge of the customer’s current
and forecast financial position.
Trade receivables and contract assets are written off when there is no reasonable expectation of recovery.
Impairment losses on trade receivables and contract assets are presented as net impairment losses within operating profit (note 5).
Subsequent recoveries of amounts previously written off are credited against the same line item.
The gross carrying amount of trade receivables, for which the loss allowance is measured at an amount equal to the lifetime expected credit
losses under the simplified method, is analysed below.
The Weir Group PLC Annual Report and Financial Statements 2023
179
Strategic Report
Governance
Financial Statements
Additional Information
Notes to the Group Financial Statements
continued
Analysis of gross carrying amount of trade receivables by days past due
Not past due
Up to 3 months past due
Between 3 & 6 months past due
More than 6 months past due
Reconciliation of opening to closing loss allowance for trade receivables
Balance at the beginning of the year
Impairment losses recognised on receivables
Amounts written off as uncollectable
Amounts recovered during the year
Impairment losses reversed
Exchange adjustment
Balance at the end of the year
2023
£m
282.2
75.5
16.9
37.9
412.5
2023
£m
(26.9)
(6.4)
12.6
4.0
3.0
0.8
(12.9)
2022
£m
313.2
81.6
12.1
37.8
444.7
2022
£m
(17.4)
(14.3)
1.5
0.3
4.3
(1.3)
(26.9)
Impairment losses recognised on receivables includes an amount of £1.9m (2022: £8.3m) recognised as an exceptional item (note 6). Amounts
recovered during the year includes an amount of £3.9m (2022: £nil) recognised as an exceptional item.
The Group has recognised the following assets in relation to contracts with customers.
Construction contract assets
Accrued income
Total contract assets
2023
£m
6.8
24.2
31.0
2022
£m
5.3
21.6
26.9
The increase in construction contract assets relates to a combination of the mix of contracts, and the timing of billing versus the percentage of
completion of projects.
19. Cash & short-term deposits
Cash at bank & in hand
Short-term deposits
For the purposes of the Consolidated Cash Flow Statement, cash & cash equivalents comprise the following:
Cash & short-term deposits
Bank overdrafts (note 20)
2023
£m
654.4
52.8
707.2
707.2
(259.8)
447.4
2022
£m
591.6
99.6
691.2
691.2
(213.7)
477.5
Cash at bank and in hand earns interest at floating-rates based on daily bank deposit rates. Short-term deposits are made for varying periods of
between one day and three months, depending on the immediate cash requirements of the Group and earns interest at the respective short-
term deposit rates.
The Group operates a notional cash pooling arrangement in which individual balances are not offset for reporting purposes as the Group does
not intend to settle on a net basis. Cash and short-term deposits at 31 December 2023 includes £256.0m (2022: £206.9m) that is part of this
arrangement and both cash and interest-bearing loans and borrowings are grossed up by this amount.
The Weir Group PLC Annual Report and Financial Statements 2023
180
Strategic Report
Governance
Financial Statements
Additional Information
Notes to the Group Financial Statements
continued
20. Interest-bearing loans & borrowings
Current
Bank overdrafts
Fixed-rate notes
Lease liabilities
Non-current
Bank loans
Fixed-rate notes
Lease liabilities
2023
£m
259.8
—
26.4
286.2
97.7
922.3
91.1
1,111.1
2022
£m
213.7
165.3
27.3
406.3
336.5
657.8
87.8
1,082.1
The Group operates a notional cash pooling arrangement in which individual balances are not offset for reporting purposes as the Group does
not intend to settle on a net basis. Cash and short-term deposits at 31 December 2023 includes £256.0m (2022: £206.9m) that is part of this
arrangement and both cash and interest-bearing loans and borrowings are grossed up by this amount.
Bank loans
Revolving credit facility
Sterling variable-rate loans
United States Dollar variable-rate loans
Non-current bank loans
Weighted average interest rate
Maturity Interest basis
2028
2028
£ SONIA
US$ SOFR
2023
%
5.84
—
2022
%
—
4.96
2023
£m
97.7
—
97.7
2022
£m
—
336.5
336.5
The weighted average interest rates include an applicable margin over and above the interest basis.
Fixed-rate notes
Private placement
Maturity Interest basis
Fixed interest rate
2023
%
2022
%
2023
£m
2022
£m
United States Dollar fixed-rate notes
2023
FIXED
—
4.34
—
165.3
Other
United States Dollar Sustainability-Linked Notes
Sterling Sustainability-Linked Notes
2026
2028
FIXED
FIXED
2.20
6.88
2.20
—
Less: current instalments due on fixed-rate notes
United States Dollar fixed-rate notes
Non-current fixed-rate notes
2023
FIXED
624.4
297.9
922.3
657.8
—
823.1
—
922.3
(165.3)
657.8
The disclosures above represent the interest profile and currency profile of financial liabilities before the impact of derivative financial instruments.
The Group utilises a number of sources of funding including Sustainability-Linked Notes, revolving credit facility, term loan, private placement debt,
commercial paper and uncommitted facilities.
In January 2023, the Group added a further £300m term loan facility to its available financing. The facility was due to mature in January 2024, subject to
a one-year extension option, but the Group took the decision to cancel the facility in June 2023.
In March 2023, the Group exercised the option to extend its US$800m multi-currency Revolving Credit Facility (RCF) by one year to now mature in April
2028, with the option to extend for a further year.
In June 2023, the Group completed the issue of £300m five-year Sustainability-Linked Notes due to mature in June 2028. The notes include a
Sustainability Performance Target (SPT) to reduce scope 1&2 CO2 emissions by 19.1% in absolute terms by 2026 from a 2019 baseline, consistent with
the Group’s SBTi approved target of 30% reduction by the end of 2030. The notes will initially bear interest at a rate of 6.875% per annum to be paid
annually in June. The interest on the notes will be linked to achievement of the SPT with an interest rate increase of 0.75% to 7.625% per annum for
the last interest payment due on 14 June 2028 if the Group does not attain its SPT. These notes are in addition to the US$800m Sustainability-Linked
Notes drawn in May 2021, due to mature in May 2026, which bear interest at a rate of 2.20% per annum.
In June 2023, the Group amended its US$1bn commercial paper programme to a US$800m commercial paper programme. At 31 December 2023, a
total of £nil (2022: £nil) was outstanding under the programme.
At 31 December 2023, £97.7m (2022: £336.5m) was drawn under the US$800m multi-currency RCF which, is disclosed net of unamortised issue costs
of £2.3m (2022: £2.4m).
At 31 December 2023, a total of £nil (2022: £165.3m) was outstanding under private placement, which is disclosed net of unamortised issue costs of
£nil (2022: £nil).
At 31 December 2023, a total of £922.3m (2022: £657.8m) was outstanding under Sustainability-Linked Notes, which is disclosed net of unamortised
issue costs of £4.5m (2022: £3.5m).
The Weir Group PLC Annual Report and Financial Statements 2023
181
Strategic Report
Governance
Financial Statements
Additional Information
Notes to the Group Financial Statements
continued
21. Trade & other payables
Current
Trade payables
Other creditors
Other taxes & social security costs
Accruals
Deferred consideration payable
Contract liabilities
Non-current
Deferred consideration payable
2023
£m
260.1
9.8
11.4
187.7
1.0
111.3
581.3
0.6
0.6
2022
£m
319.3
14.0
24.2
162.4
1.0
102.6
623.5
1.0
1.0
Trade payables includes balances due to suppliers that have signed up to a supply chain financing programme, under which all invoices are
settled via a partner bank. This allows the suppliers to elect on an invoice-by-invoice basis to receive a discounted early payment from the
partner bank rather than being paid in line with the agreed payment terms. The value of the liability payable by the Group remains unchanged.
The aggregate limit of facilities available at 31 December 2023 was £101.2m (2022: £113.1m) and may be voluntarily cancelled under bilateral
terms of 30 days notice. At 31 December 2023, suppliers chose to utilise supply chain financing facilities of £32.0m (2022: £53.9m).
The Group assesses the arrangement against indicators to assess if debts, which vendors have sold to the partner bank under the supplier
financing scheme, continue to meet the definition of trade payables or should be classified as borrowings. At 31 December 2023 and
31 December 2022, the payables met the criteria of trade payables and the arrangement had no impact on the results or the financial position
of the Group.
The Group has recognised the following liabilities in relation to contracts with customers.
Construction contract liabilities
Deferred income
Total contract liabilities
2023
£m
10.7
100.6
111.3
2022
£m
4.7
97.9
102.6
The increase in contract liabilities in the year relates to changes in the mix of contracts and percentage of completion status of individual
projects, together with a general increase in project activity.
Revenue recognised in relation to contract liabilities
The following table shows the revenue recognised in the current reporting period related to carried forward contract liabilities.
Revenue recognised that was included in the contract liability balance at the beginning of the year
2023
£m
36.0
2022
£m
37.5
Transaction price allocated to unsatisfied performance obligations
The transaction price allocated to performance obligations unsatisfied at the year end is £106.9m (2022: £128.5m). This relates only to
performance obligations from contracts with a duration of over a year as permitted by the practical expedient in paragraph 121 of IFRS 15
'Revenue from contracts with customers'.
The following table shows when revenue is expected to be recognised for unsatisfied performance obligations from contracts with a duration
of over one year.
Less than one year
After one year, but not more than five years
After five years
Total value of performance obligations unsatisfied from contracts with a duration over one year
2023
£m
75.9
5.0
26.0
106.9
2022
£m
95.0
9.1
24.4
128.5
The Weir Group PLC Annual Report and Financial Statements 2023
182
continued
21. Trade & other payables
Current
Trade payables
Other creditors
Accruals
Other taxes & social security costs
Deferred consideration payable
Contract liabilities
Non-current
Deferred consideration payable
2023
£m
260.1
9.8
11.4
187.7
1.0
111.3
581.3
0.6
0.6
2022
£m
319.3
14.0
24.2
162.4
1.0
102.6
623.5
1.0
1.0
2023
£m
10.7
100.6
111.3
2022
£m
4.7
97.9
102.6
2023
£m
36.0
2022
£m
37.5
2023
£m
75.9
5.0
26.0
2022
£m
95.0
9.1
24.4
Trade payables includes balances due to suppliers that have signed up to a supply chain financing programme, under which all invoices are
settled via a partner bank. This allows the suppliers to elect on an invoice-by-invoice basis to receive a discounted early payment from the
partner bank rather than being paid in line with the agreed payment terms. The value of the liability payable by the Group remains unchanged.
The aggregate limit of facilities available at 31 December 2023 was £101.2m (2022: £113.1m) and may be voluntarily cancelled under bilateral
terms of 30 days notice. At 31 December 2023, suppliers chose to utilise supply chain financing facilities of £32.0m (2022: £53.9m).
The Group assesses the arrangement against indicators to assess if debts, which vendors have sold to the partner bank under the supplier
financing scheme, continue to meet the definition of trade payables or should be classified as borrowings. At 31 December 2023 and
31 December 2022, the payables met the criteria of trade payables and the arrangement had no impact on the results or the financial position
of the Group.
The Group has recognised the following liabilities in relation to contracts with customers.
Construction contract liabilities
Deferred income
Total contract liabilities
The increase in contract liabilities in the year relates to changes in the mix of contracts and percentage of completion status of individual
projects, together with a general increase in project activity.
Revenue recognised in relation to contract liabilities
The following table shows the revenue recognised in the current reporting period related to carried forward contract liabilities.
Revenue recognised that was included in the contract liability balance at the beginning of the year
Transaction price allocated to unsatisfied performance obligations
The transaction price allocated to performance obligations unsatisfied at the year end is £106.9m (2022: £128.5m). This relates only to
performance obligations from contracts with a duration of over a year as permitted by the practical expedient in paragraph 121 of IFRS 15
The following table shows when revenue is expected to be recognised for unsatisfied performance obligations from contracts with a duration
'Revenue from contracts with customers'.
of over one year.
Less than one year
After five years
After one year, but not more than five years
Strategic Report
Governance
Financial Statements
Additional Information
Strategic Report
Governance
Financial Statements
Additional Information
Notes to the Group Financial Statements
Notes to the Group Financial Statements
continued
22. Provisions
At 31 December 2022
Additions
Utilised
Unutilised
Transfers
Exchange adjustment
At 31 December 2023
Current 2023
Non-current 2023
At 31 December 2023
Current 2022
Non-current 2022
At 31 December 2022
Warranties &
contract
claims
Asbestos-
related
Employee-
related
Exceptional
items
£m
10.4
9.4
(9.2)
(0.2)
(0.2)
(0.6)
9.6
9.6
—
9.6
10.4
—
10.4
£m
55.2
33.2
(7.9)
1.7
—
(3.5)
78.7
11.2
67.5
78.7
8.5
46.7
55.2
£m
13.5
16.5
(17.2)
—
—
(0.7)
12.1
8.4
3.7
12.1
7.9
5.6
13.5
£m
5.4
30.3
(19.6)
(0.6)
0.2
—
15.7
15.7
—
15.7
5.2
0.2
5.4
Other
£m
13.7
1.7
(0.8)
(1.8)
—
(0.6)
12.2
Total
£m
98.2
91.1
(54.7)
(0.9)
—
(5.4)
128.3
2.7
9.5
47.6
80.7
12.2
128.3
3.3
10.4
13.7
35.3
62.9
98.2
The impact of discounting is only material for the asbestos-related category of provision, with lower discount rates at 31 December 2023,
resulting in a £1.9m increase in the provision, which is reflected as unutilised above.
Warranties & contract claims
Provision has been made in respect of actual warranty claims on goods sold and services provided, and allowance has been made for potential
warranty claims based on past experience for goods and services sold with a warranty guarantee. At 31 December 2023, the warranties portion
of the provision totalled £7.2m (2022: £6.6m). At 31 December 2023, all of these costs relate to claims that fall due within one year of the
balance sheet date.
Provision has been made in respect of sales contracts entered into for the sale of goods in the normal course of business where the
unavoidable costs of meeting the obligations under the contracts exceed the economic benefits expected to be received from the contracts
and before allowing for future expected aftermarket revenue streams. Provision is made immediately when it becomes apparent that expected
costs will exceed the expected benefits of the contract. At 31 December 2023, the contract claims element, which includes onerous provision,
was £2.4m (2022: £3.8m), all of which is expected to be incurred within one year of the balance sheet date.
Asbestos-related claims
US asbestos-related provision – pre-1981 date of first exposure
US asbestos-related provision – post-1981 date of first exposure
US asbestos-related provision – total
UK asbestos-related provision
Total asbestos-related provision
2023
£m
67.4
8.8
76.2
2.5
78.7
2022
£m
49.9
2.8
52.7
2.5
55.2
US asbestos-related provision
A US-based subsidiary of the Group is co-defendant in lawsuits pending in the US in which plaintiffs are claiming damages arising from alleged
exposure to products previously manufactured which contained asbestos. The dates of alleged exposure currently range from the 1950s to the
1990s.
The Group has historically held comprehensive insurance cover for cases of this nature and its subsidiary continues to do so for claims with a
date of first exposure (dofe) pre-1981. The expiration of one of the Group’s insurance policies in 2019 resulted in no further insurance cover for
claims with a post-1981 dofe. All claims are directly administered by National Coordinating Counsel on behalf of the insurers who also meet
associated defence costs. The insurers, their legal advisers and in-house counsel agree and execute the defence strategy between them.
Total value of performance obligations unsatisfied from contracts with a duration over one year
106.9
128.5
A summary of the US subsidiary's asbestos-related claim activity is shown in the table below.
Number of open claims
Opening
New
Dismissed
Settled
Closing
2023
Number
1,716
664
(362)
(230)
1,788
2022
Number
1,765
633
(443)
(239)
1,716
The Weir Group PLC Annual Report and Financial Statements 2023
182
The Weir Group PLC Annual Report and Financial Statements 2023
183
Strategic Report
Governance
Financial Statements
Additional Information
Notes to the Group Financial Statements
continued
A review of the US subsidiary's expected liability for US asbestos-related diseases and the adequacy of the insurance policies to meet future
settlement and defence costs was completed in conjunction with external advisers in 2023 as part of a planned triennial actuarial review. This
review was based on an industry standard epidemiological decay model, and the subsidiary's claims settlement history. Consistent with recent
claims experience, the 2023 review reflected a higher levels of claims, particularly relating to the 1970s and 1980s.
The actuarial model incorporates claims, with a dofe pre- and post-1981, primarily relating to Lung Cancer and Mesothelioma and includes
estimates relating to:
• the number of future claims received through to 2064;
• settlement rates by disease type;
• mean settlement values by disease type;
• ratio of defence costs to indemnity value; and
• the profile of associated cash flows through to 2068.
The actuarial model in 2023 provided a range of potential liability based on levels of probability from 10% to 90%, which, on an undiscounted
basis, equates to £89m-£195m. The mean actuarial estimate of £142m represents the expected undiscounted value over the range of
reasonably possible outcomes. The provision in the financial statements is based on the mean actuarial estimate, which is then adjusted each
year to reflect expected settlements in the model, discounting and restricting the timescale over which a liability can be reliably measured to
ten years plus cash flows over a further six years.
Period of future claims provided
Discount rate
2023
10 years
4.7 %
2022
10 years
5.0 %
The period over which the provision can be reliably estimated is judged to be ten years, plus cash flows for a further six years, due to the
inherent uncertainty, resulting from the changing nature of the US litigation environment detailed below, and cognisant of the broad range of
probability levels included within the actuarial model. While claims may extend past ten years and may result in a further outflow of economic
benefits, the Directors do not believe any obligation that may arise beyond ten years can be reliably measured at this time. The effect of
extending the claims period by a further ten years is included in the sensitivities below. The discount rate is set based on the corporate bond
yield available at the balance sheet date denominated in the same currency, and with a term broadly consistent to that of the liabilities being
provided for, with sensitivities to the discount rate also included below.
In 2023, confirmation was also received from external advisers of the insurance asset available, which includes the estimated defence costs
that would be met by the insurer. An update to the insurance asset is obtained annually and totals £14.9m at 31 December 2023 (2022:
£32.0m). Based on the profile of the claims in the actuarial model, external advisers expect the insurance cover and associated limits currently
in place to be sufficient to meet the settlement and associated costs until 2025. No cash flows to or from the US subsidiary, related to claims
with an exposure date pre-1981, are expected until the exhaustion of the insurance asset. Claims with an exposure date post-1981 are
estimated to incur cash outflows of less than £0.8m per annum and are not insured currently or in the future.
The table below represents the Directors’ best estimate of the future liability and corresponding insurance asset.
US asbestos-related provision
Gross provision
Effect of discounting
Discounted US asbestos-related provision
Insurance asset
Net US asbestos-related liability
2023
£m
101.5
(25.3)
76.2
14.9
61.3
2022
£m
68.8
(16.1)
52.7
32.0
20.7
The gross provision and effect of discounting at 31 December 2022 have been amended from what was initially published in the 2022 Annual Report and Financial Statements, with both
figures grossed up by £10.0m to correctly reflect the impact of discounting. There is no further impact from this change across the financial statements.
The net provision and insurance asset are presented in the financial statements as follows.
Provisions – current
Provisions – non-current
Trade & other receivables
Non-current other receivables
2023
£m
10.3
65.9
9.5
5.4
2022
£m
7.8
44.9
7.5
24.5
There remains inherent uncertainty associated with estimating future costs in respect of asbestos-related diseases. Actuarial estimates of
future indemnity and defence costs associated with asbestos-related diseases are subject to significantly greater uncertainty than actuarial
estimates for other types of exposures. This uncertainty results from factors that are unique to the asbestos claims litigation and settlement
process including but not limited to:
• the possibility of future state or federal legislation applying to claims for asbestos-related diseases;
• the ability of the plaintiff’s bar to develop and sustain new legal theory and/or develop new populations of claimants;
• changes in focus of the plaintiff’s bar;
• changes in defence strategy; and
• changes in the financial condition of other co-defendants in suits naming the US subsidiary.
The Weir Group PLC Annual Report and Financial Statements 2023
184
Strategic Report
Governance
Financial Statements
Additional Information
Notes to the Group Financial Statements
continued
As a result, there can be no guarantee that the assumptions used to estimate the provision will result in an accurate prediction of the actual
costs that may be incurred.
Since the previous triennial update completed in 2020, the US subsidiary has experienced a higher number of claims received than modelled
across both disease types. As noted in our 2022 Annual Report we expected these variations from the model may have been influenced by
fluctuations in the profile of case rates across jurisdictions with higher average settlements coupled with the potential impact of the Covid-19
pandemic. However, the higher level of claims continued into 2023 demonstrating a longer-term trend of higher claims as opposed to one-off
year-on-year variation.
Average settlement values have remained broadly stable over recent years for Mesothelioma cases, but have been lower than modelled in
2020 for Lung Cancer cases. Settlements largely occurred within four years of a claim being received and the settlement rates for
Mesothelioma cases were slightly higher than previously modelled while Lung Cancer case settlement rates were trending marginally lower.
As noted above there are a number of uncertain factors involved in the estimation of the provision and variations in case numbers and
settlements are to be expected from period-to-period. The trends witnessed in our recent claims experience have been reflected in the 2023
triennial actuarial review and provided the basis for the higher provision recognised at 31 December 2023.
Uncertainty regarding the timing and extent of variations year to year and whether they are short or long-term in nature, mean it is not
considered possible to provide reasonably probable scenarios. The impact on the provision of incremental changes in key assumptions is
provided below for guidance.
Estimated impact on the discounted US asbestos-related provision of
Increasing the number of projected future settled claims by 20%
Increasing the estimated settlement value by 10%
Increasing the basis of provision by ten years
Decreasing the discount rate by 50bps
2023
£m
12.9
6.4
10.1
2.2
Application of these sensitivities, on an individual basis, would not lead to a material change in the provision.
The Group’s US subsidiary has been effective in managing the asbestos litigation, in part, because it has access to historical project documents
and other business records going back more than 50 years, allowing it to defend itself by determining if legacy products were present at the
location of the alleged asbestos exposure and, if so, the timing and extent of their presence. In addition, the US subsidiary has consistently and
vigorously defended claims that are without merit.
UK asbestos-related provision
In the UK, there are outstanding asbestos-related claims that are not the subject of insurance cover. The extent of the UK asbestos exposure
involves a series of legacy employer’s liability claims that all relate to former UK operations and employment periods in the 1950s to 1970s. In
1989, the Group’s employer’s liability insurer (Chester Street Employers Association Ltd) was placed into run-off, which effectively generated
an uninsured liability exposure for all future long-tail disease claims with an exposure period pre-dating 1 January 1972. All claims with a disease
exposure post 1 January 1972 are fully compensated via the Government-established Financial Services Compensation Scheme. Any
settlement to a former employee whose service period straddles 1972 is calculated on a pro rata basis. The Group provides for these claims
based on management’s best estimate of the likely costs given past experience of the volume and cost of similar claims brought against
the Group.
The UK provision was reviewed and adjusted accordingly for claims experience in the year, resulting in a provision of £2.5m (2022: £2.5m).
Employee-related
Employee-related provisions arise from legal obligations in a number of territories in which the Group operates, the majority of which relate to
compensation associated with periods of service. A large proportion of the provision is for long service leave. The outflow is generally
dependent upon the timing of employees’ period of leave with the calculation of the majority of the provision being based on criteria
determined by the various jurisdictions.
Exceptional items
The exceptional items provision relates to certain exceptional charges included within note 6 where the cost is based on a reliable estimate of
the obligation.
The opening balance of £5.4m includes £4.3m related to Russia, £0.4m for the Performance Excellence programme, and £0.7m for other
smaller provisions.
Additions in the year total £30.3m, and includes £29.4m in relation to the Performance Excellence programme, of which £14.3m has been
settled in the year. The remaining additions of £0.9m include acquisition and integration costs, and amounts in relation to the wind down of our
Minerals Russia subsidiary. Of the provision balance related to the Russia wind down, £2.4m has been cash settled in the year.
The closing balance of £15.7m includes £1.3m related to Russia, and £14.2m in relation to the Performance Excellence programme of which
£7.1m relates to capacity optimisation costs and £7.1m to functional transformation. Also included in the closing balance are £0.2m of smaller
balances relating to an onerous lease and residual costs related to the Oil & Gas Division sale.
Other
Other provisions include environmental obligations, penalties, duties due, legal claims and other exposures across the Group. These balances
typically include estimates based on multiple sources of information and reports from third-party advisers. The timing of outflows is difficult to
predict as many of them will ultimately rely on legal resolutions and the expected conclusion is based on information currently available. Where
certain outcomes are unknown, a range of possible scenarios is calculated, with the most likely being reflected in the provision.
The Weir Group PLC Annual Report and Financial Statements 2023
185
Strategic Report
Governance
Financial Statements
Additional Information
Notes to the Group Financial Statements
continued
23. Deferred tax
Deferred income tax assets
Post-employment benefits
Decelerated depreciation for tax purposes
Intangible assets
Untaxed reserves
Offset against liabilities
Deferred income tax assets
Deferred income tax liabilities
Accelerated depreciation for tax purposes
Overseas tax on unremitted earnings
Intangible assets
Other temporary differences
Post-employment benefits
Offset against assets
Deferred income tax liabilities
Net deferred income tax asset
2023
£m
10.6
16.7
13.9
180.6
(110.5)
111.3
(18.3)
(3.3)
(117.8)
(6.5)
(11.5)
110.5
(46.9)
2022
£m
12.5
11.8
16.1
210.7
(158.6)
92.5
(16.7)
(6.7)
(153.6)
(16.3)
(16.7)
158.6
(51.4)
64.4
41.1
The Weir Group PLC Annual Report and Financial Statements 2023
186
Strategic Report
Governance
Financial Statements
Additional Information
Notes to the Group Financial Statements
continued
The movement in deferred income tax assets and liabilities during the year was as follows.
At 31 December 2021
(Charged) credited to the Consolidated Income
Statement (note 8)
(Charged) credited to equity (note 8)
Acquisition of business
Exchange adjustment
At 31 December 2022
(Charged) credited to the Consolidated Income
Statement (note 8)
Credited to equity (note 8)
Exchange adjustment
At 31 December 2023
Post-
employment
benefits
Accelerated
depreciation
for tax
purposes
Overseas tax
on
unremitted
earnings
Intangible
assets
Untaxed
reserves, tax
losses &
other
temporary
differences
£m
13.4
(2.4)
(16.4)
—
1.2
(4.2)
(3.4)
7.1
(0.4)
(0.9)
£m
(16.4)
£m
£m
£m
(7.3)
(116.1)
142.6
14.4
—
(0.6)
(2.3)
(4.9)
3.2
—
0.1
(1.6)
0.7
—
—
(0.1)
(6.7)
2.9
—
0.5
(3.3)
(7.8)
—
(1.0)
(12.6)
35.7
0.9
—
15.2
(137.5)
194.4
27.9
(10.6)
—
5.7
0.1
(9.8)
(103.9)
174.1
Total
£m
16.2
40.6
(15.5)
(1.6)
1.4
41.1
20.0
7.2
(3.9)
64.4
Untaxed reserves primarily relate to accruals and provisions for liabilities where the tax allowance is deferred until the cash expense occurs, and
to temporarily disallow inventory/receivable provisions. Included in this balance is a deferred tax asset in relation to tax losses of £22.7m (2022:
£39.8m). This includes £1.8m (2022: £21.9m) relating to US Federal and State tax losses and £9.7m (2022: £10.0m) relating to UK tax losses.
Deferred tax assets of £3.2m (2022: £0.4m) have been recognised in respect of entities which have suffered a tax loss in either the current or
preceding period. Deferred tax assets have been recognised in these territories on the basis of forecast future profitability. Of the recognised
deferred tax assets, £19.4m (2022: £24.2m) of US foreign tax credits have a ten-year time expiry with the earliest expiration date being 2027,
£10.6m (2022: £10.3m) of US research and development tax credits have a 20-year time expiry with the earliest expiration date being 2036, and
£2.8m (2022: £3.6m) of US State attributes have a ten-year time expiry.
Deferred tax assets of £37.6m (2022: £41.2m) have been recognised in relation to deferred deductions for intra-group interest in the US group.
Deferred tax asset balances for unused tax losses of £22.9m (2022: £34.0m) have not been recognised on the grounds that there is insufficient
evidence that these assets will be recoverable. Composition of these unrecognised assets as at 31 December 2023 are set out below.
Jurisdiction
Africa
Australia
Chile
China
Malaysia
Sweden
United Kingdom
United States
Other
Total
Gross closing
balance
Net closing
balance
£m
0.9
1.8
2.3
33.4
1.2
2.6
2.4
48.1
7.3
100.0
£m
0.2
0.5
0.6
8.3
0.3
0.6
0.6
10.1
1.7
22.9
The Weir Group PLC Annual Report and Financial Statements 2023
187
Strategic Report
Governance
Financial Statements
Additional Information
Notes to the Group Financial Statements
continued
Deferred tax asset balances for capital losses amounting to £1.7m (2022: £7.9m) have not been recognised, but would be available in the event
of future taxable capital gains being incurred by the Group. Composition of these unrecognised capital losses as at 31 December 2023 are set
out below:
Jurisdiction
Australia
United Kingdom
Total
Gross closing
balance
Net closing
balance
£m
4.8
1.2
6.0
£m
1.4
0.3
1.7
In addition, a US deferred tax asset balance relating to the disposal of Seaboard International arose as part of the Group's divestiture of its Oil &
Gas Division in 2021. The deferred tax asset balance is estimated to be £85m but has yet not been recognised pending completion of
supporting US tax technical analysis.
Unrecognised assets will be recovered when future tax charges are sufficient to absorb these tax benefits.
The net deferred tax asset due after more than one year is £64.4m (2022: £41.1m).
Pillar Two
The Group has adopted the amendments to IAS 12 'Income taxes' for the first time in the current year. The IASB amends the scope of IAS 12
to clarify that the Standard applies to income taxes arising from tax law enacted or substantively enacted to implement the Pillar Two model
rules published by the OECD, including tax law that implements qualified domestic minimum top-up taxes described in those rules.
The amendments introduce a temporary exception to the accounting requirements for deferred taxes in IAS 12, so that an entity would neither
recognise nor disclose information about deferred tax assets and liabilities related to Pillar Two income taxes. Following the amendments, the
group is required to disclose that it has applied the exception and to disclose separately its current tax expense (income) related to Pillar Two
income taxes. The Group has applied the temporary exception issued by the IASB in May 2023 from the accounting requirements for deferred
taxes in IAS 12. Accordingly, the Group neither recognises nor discloses information about deferred tax assets and liabilities related to Pillar
Two income taxes.
On 20 June 2023, the government of the United Kingdom, where The Weir Group PLC is incorporated, substantively enacted the Pillar Two
income taxes legislation effective from 1 January 2024. Under the legislation, the parent company will be required to pay, in the United
Kingdom, top-up tax on profits of its subsidiaries that are taxed at an effective tax rate of less than 15%. The Weir Group PLC falls within the
scope of Pillar Two legislation therefore, these rules will apply to the Group from 1 January 2024.
Ahead of the legislation coming into effect from 1 January 2024 the Group has analysed its eligibility for the Transitional Country By Country
Reporting Safe Harbours on a jurisdiction by jurisdiction basis using data covering the periods to 31 December 2022 and 31 December 2023,
which we consider to be a good proxy for the predicted position in respect of the period ending 31 December 2024. Based on the outcome of
this analysis the Group considers the main jurisdiction for which a higher risk of exposure to Pillar Two may exist is the United States. The
Group therefore conducted a more in depth analysis of our likely position with regards to Pillar Two for the United States, with a particular focus
on the available substance-based concessions, and have concluded that for this specific jurisdiction, and the wider global group, we do not
anticipate that a material Pillar Two top-up tax is likely to arise in respect of the period ending 31 December 2024. The Group is aware that the
rules and guidance in relation to Pillar Two continue to evolve and we are working alongside tax specialists in order to continually assess the
impact of the Pillar Two income taxes legislation on future financial performance. As a result of this changing landscape, there is a possibility
that top-up taxes may arise at some point in the future.
Temporary differences associated with Group investments
A deferred tax liability of £4.6m (2022: £6.1m) has been recognised in respect of taxes on the unremitted earnings of the South American
subsidiaries. As at 31 December 2023, this is the only recognised deferred tax liability in respect of taxes on unremitted earnings, as the Group
does not foresee a distribution of unremitted earnings from other subsidiaries or joint ventures which would result in a reversal of deferred tax.
The temporary differences associated with investments in subsidiaries and joint ventures, for which a deferred tax liability has not been
recognised, aggregate to £2,608.9m (2022: £2,531.8m).
There are no income tax consequences attaching to the payment of dividends by the Company to its shareholders.
UK corporation tax rate changes
An increase in the UK rate from 19% to 25% from April 2023 was substantively enacted as part of Finance Bill 2021 (on 25 May 2021). As a
result, at 31 December 2023, deferred tax balances have been calculated at 25%.
The Weir Group PLC Annual Report and Financial Statements 2023
188
Strategic Report
Governance
Financial Statements
Additional Information
Notes to the Group Financial Statements
continued
24. Pensions & other post-employment benefit plans
The Group operates various defined benefit pension plans in the UK and North America. All defined benefit plans are closed to new members.
The most significant defined benefit plan is the Main funded UK plan.
UK plans
At the balance sheet date, the Group has a funded defined benefit plan (the Main Plan) and an unfunded retirement benefit plan for retired
Executive Directors. The Group also operates a defined contribution plan, the contributions to which are in addition to those set out below, and
are charged directly to the Consolidated Income Statement.
For the defined benefit plans, benefits are related to service and final salary. The Main Plan closed to future accrual of benefits effective from
30 June 2015.
The weighted average duration of the expected benefit payments from the Main Plan is around 12 years.
The current funding target for the UK plans is to maintain assets equal to the value of the accrued benefits. The Main Plan holds three
insurance policies that match the liabilities in respect of a significant proportion of deferred and retired pensioners.
The regulatory framework in the UK requires the pension scheme Trustees and Group to agree upon the assumptions underlying the funding
target, and then to agree upon the necessary contributions required to recover any deficit at the valuation date. There is a risk to the Group that
adverse experience against these assumptions could lead to a requirement for the Group to make considerable contributions to recover any
deficit. This risk is significantly reduced through the insurance policies held.
North American plans
The Group also sponsors funded defined benefit pension plans in the US and Canada and certain unfunded arrangements (including post-
employment healthcare benefits for senior employees) in the US.
These plans combined make up 21% of the Group’s pension and other post-employment benefit plan commitments and 17% of the Group’s
total associated assets.
The weighted average duration of these plans is around eight years.
Plan risks
The defined benefit plans in the UK and North America expose the Group to a number of risks.
Uncertainty in benefit payments
The value of the Group’s liabilities for the defined benefit plans will ultimately depend on the amount of benefits paid out. This in turn will
depend on the level of inflation (for those benefits that are subject to some form of inflation protection) and how long individuals live. This risk is
significantly reduced through the insurance policies held in the UK.
Volatility in asset values
The Group is exposed to future movements in the values of assets held in the funded defined benefit plans to meet future uninsured
benefit payments.
Uncertainty in cash funding
Movements in the values of the obligations or assets may result in the Group being required to provide higher levels of cash funding, although
changes in the level of cash required can often be spread over a number of years. This risk is significantly reduced through the insurance
policies held. In addition, the Group is also exposed to adverse changes in pension regulation.
Exchange rate movements
Movements in exchange rates will affect the value in GBP of the assets and obligations of the Group’s North American defined benefit plans.
The Weir Group PLC Annual Report and Financial Statements 2023
189
Strategic Report
Governance
Financial Statements
Additional Information
Notes to the Group Financial Statements
continued
Assumptions
The significant actuarial assumptions used for accounting purposes reflect prevailing market conditions in the UK and North America and are
as follows.
Significant actuarial assumptions:
Discount rate (% pa)
Retail Prices Inflation (RPI) assumption (% pa)
Post-retirement mortality (life expectancies in years):
Current pensioners at 65 – male
Current pensioners at 65 – female
Future pensioners at 65 – male
Future pensioners at 65 – female
Other related actuarial assumptions:
Rate of increases for pensions in payment (% pa)
Pre 6 April 2006 service
Post 5 April 2006 service
Consumer Prices Inflation (CPI) assumption (% pa)
Rate of increase in healthcare costs
UK
pensions
North American pensions &
post-retirement healthcare
2023
2022
2023
2022
4.5
3.1
21.0
22.9
22.3
24.4
3.0
2.1
2.5
n/a
4.8
3.4
21.3
23.2
22.6
24.7
3.2
2.1
2.8
n/a
4.7
n/a
20.6
22.6
22.1
24.0
n/a
n/a
n/a
*
5.0
n/a
20.6
22.5
22.1
23.9
n/a
n/a
n/a
**
* Between 5.2% and 11.75% per annum decreasing to 4.5% per annum and remaining static at that level from 2033 (Weir)/2037 (ESCO) onwards.
** Between 5.2% and 7.4% per annum decreasing to 4.5% per annum and remaining static at that level from 2032 (Weir)/2037 (ESCO) onwards.
The assumptions used to determine end-of-year benefit obligations are also used to calculate the following year’s cost. For North America,
weighted average assumptions are shown above where applicable.
The post-retirement mortality assumptions allow for expected increases in longevity. The ‘current’ disclosures above relate to assumptions
based on longevity (in years) following retirement at the balance sheet date, with ‘future’ being that relating to a member retiring in 2044 (in 20
years’ time).
The assets and liabilities of the plans are as follows.
Plan assets at fair value
Equities (quoted)
Diversified Growth Funds
(2022: c.27% quoted)
Corporate bonds (quoted)
Government bonds (quoted)
Insurance policies (unquoted)
Property
Private debt (unquoted)
Multi Asset Credit Funds (quoted)
Cash (quoted)
Fair value of plan assets
Present value of funded obligations
Net asset (liability) for funded
obligations
Present value of unfunded obligations
Effect of asset limit
Net asset (liability)
Plans in surplus
Plans in deficit
UK
pensions
North American pensions &
post-retirement healthcare
2023
£m
2022
£m
2023
£m
2022
£m
Total
2023
£m
2022
£m
—
48.3
9.1
21.6
9.1
69.9
—
—
170.8
336.4
—
37.1
39.7
8.7
592.7
(562.6)
30.1
(0.8)
—
29.3
30.1
(0.8)
36.6
36.6
168.4
219.9
—
56.3
36.0
8.0
610.1
(559.2)
50.9
(0.9)
—
50.0
50.9
(0.9)
—
70.1
38.7
—
4.0
—
—
2.2
124.1
(125.6)
(1.5)
(23.9)
(1.8)
(27.2)
—
(27.2)
1.4
61.9
34.9
—
4.7
—
—
1.5
126.0
(132.8)
(6.8)
(26.3)
(1.8)
(34.9)
—
(34.9)
—
70.1
209.5
336.4
4.0
37.1
39.7
10.9
716.8
(688.2)
28.6
(24.7)
(1.8)
2.1
30.1
(28.0)
38.0
98.5
203.3
219.9
4.7
56.3
36.0
9.5
736.1
(692.0)
44.1
(27.2)
(1.8)
15.1
50.9
(35.8)
Of the government bonds held at 31 December 2023, 75% (2022: 60%) are fixed interest bonds. The pension plans have not directly invested
in any of the Group’s own financial instruments, or in properties or other assets used by the Group.
The Weir Group PLC Annual Report and Financial Statements 2023
190
Strategic Report
Governance
Financial Statements
Additional Information
Notes to the Group Financial Statements
continued
In the UK, where the majority of the Group's pension assets are held, the investment strategy is to primarily hold government bonds to meet
the assessed value of the benefits promised for the non-insured members, along with holding private debt and multi-asset credit funds. The
insured members are backed by the insurance policies held within the Scheme.
The ESCO unfunded arrangements are backed by a grantor trust that contains Trust Owned Life Insurance (TOLI) policy investments. These
investments do not match the obligations of the corresponding employee benefit plans, they are not used in practice to pay the benefits as
they fall due and they are available to the Group’s creditors in the event of insolvency. This means the grantor trust does not qualify as a 'plan
asset' for the purposes of IAS 19 'Employee benefits' and is instead treated as a separate Group asset outside of this note. The value of these
assets was estimated at £42.6m as at 31 December 2023 and are recognised in note 18.
The change in the IAS 19 funding position recognised in the Consolidated Balance Sheet is comprised as follows.
Opening net assets (liabilities)
Expense credited (charged) to the Consolidated Income
Statement
Amount recognised in the Consolidated Statement of
Comprehensive Income
Employer contributions
Exchange adjustment
Closing net assets (liabilities)
UK
pensions
North American pensions &
post-retirement healthcare
2023
£m
50.0
2022
£m
(13.4)
2023
£m
(34.9)
2022
£m
(43.3)
Total
2023
£m
15.1
2022
£m
(56.7)
2.0
(0.8)
(1.8)
(2.4)
0.2
(3.2)
(29.0)
6.3
—
29.3
57.9
6.3
—
50.0
0.8
7.0
1.7
(27.2)
7.4
8.1
(4.7)
(34.9)
(28.2)
13.3
1.7
2.1
65.3
14.4
(4.7)
15.1
The amounts recognised for the Group in the Consolidated Income Statement and in the Consolidated Statement of Comprehensive Income for
the year are analysed as follows.
Recognised in the Consolidated Income Statement
Current service cost
Curtailment gain
Administrative expenses
Included in operating profit
Interest on net pension asset (liability)
Total credit (expense) charged to the Consolidated
Income Statement
Recognised in the Consolidated Statement of
Comprehensive Income
Actual return on plan assets
Less: interest on plan assets
Other actuarial (losses) gains due to:
Changes in financial assumptions
Changes in demographic assumptions
Experience on benefit obligations
Effect of asset limit
UK
pensions
North American pensions &
post-retirement healthcare
2023
£m
—
—
(0.6)
(0.6)
2.6
2022
£m
—
—
(0.6)
(0.6)
(0.2)
2023
£m
(0.1)
0.5
(0.7)
(0.3)
(1.5)
2022
£m
(0.4)
—
(0.9)
(1.3)
(1.1)
Total
2023
£m
(0.1)
0.5
(1.3)
(0.9)
1.1
2.0
(0.8)
(1.8)
(2.4)
0.2
12.5
(28.7)
(16.2)
(10.1)
7.2
(9.9)
—
(178.4)
(15.3)
(193.7)
261.5
4.4
(14.3)
—
10.3
(6.1)
4.2
(2.7)
—
(0.7)
—
(26.4)
(4.1)
(30.5)
41.6
(0.4)
(1.5)
(1.8)
22.8
(34.8)
(12.0)
(12.8)
7.2
(10.6)
—
2022
£m
(0.4)
—
(1.5)
(1.9)
(1.3)
(3.2)
(204.8)
(19.4)
(224.2)
303.1
4.0
(15.8)
(1.8)
Actuarial (losses) gains recognised in the
Consolidated Statement of Comprehensive Income
(29.0)
57.9
0.8
7.4
(28.2)
65.3
Current service cost and administration expenses are recognised in operating costs and interest on net pension liability is recognised in other
finance costs.
The Group’s largest North American plan is the US ESCO Corporation pension plan. The Group’s current funding policy for this plan is to pay the
minimum required contributions under US regulation. However, in the event the plan’s funding level is projected to fall below particular
thresholds, the Group will consider funding more than the minimum required contribution.
Pension contributions are determined with the advice of independent qualified actuaries on the basis of regular valuations using the projected
unit method. The Group made special contributions of £9.3m in 2023 (2022: £9.7m) in addition to the Group’s regular contributions.
In 2015, the Group entered into a pension funding partnership structure under which it has contributed interests in a Scottish Limited
Partnership (SLP) for the Main Plan.
The Weir Group PLC Annual Report and Financial Statements 2023
191
Strategic Report
Governance
Financial Statements
Additional Information
Notes to the Group Financial Statements
continued
The Main Plan’s interests in the SLP reduce the deficit on a funding basis, although the agreement will not affect the position directly on an IAS
19 accounting basis as the investments held do not qualify as assets for IAS 19 purposes. As a partner in the SLP, the Main Plan is entitled to
receive a share of the profits of the SLP once a year for 15 years, subject to conditions being met. The profits to be shared with the Plan will be
reflected in the Group’s financial statements as a pension contribution.
The latest actuarial funding valuation of the Main Plan was completed in 2022. Under the agreed recovery plan, the Group has agreed to
contribute £6.2m in respect of years ending 31 December 2021 to 31 December 2029 inclusive. These contributions are primarily funded by the
income payments from the SLP described above. However, the contributions are subject to an annual review mechanism, which states that if
the Main Plan's funding level on a funding basis exceeds 105% then the contributions can be temporarily ceased. The 31 December 2022
funding basis funding level was above 105% thereby triggering a Switch-Off Event in terms of the pension funding partnership structure. As a
result, the £6.2m which would normally have been paid to the Main Plan in early 2024 will now not be paid.
The Group has taken legal advice regarding its UK arrangements to confirm the accounting treatment under IFRIC 14 'IAS 19 - The limit on a
defined benefit asset, minimum funding requirements and their interaction' with regard to recognition of a surplus and also recognition of a
minimum funding requirement. This confirmed that there is no requirement to adjust the balance sheet and that recognition of a current surplus
is appropriate on the basis that the Group has an unconditional right to a refund of a current (or projected future) surplus at some point in the
future. For the same reason, there is no requirement for the Group to adjust the balance sheet to recognise the future agreed deficit recovery
contributions. Having considered the position, taking account of the legal input received and noting that the Trustees of the UK arrangements
do not have discretionary powers to unilaterally wind down the schemes without cause, the Directors of the Group have concluded that the
Group has an unconditional right to a refund of any surplus.
The Group is aware of a case involving Virgin Media and NTL Pension Trustee, which could potentially lead to additional liabilities for some
pension schemes and sponsors, including (if applicable) the Group. This case is subject to appeal and the impact (if any) is not known and will
be assessed as relevant in future.
The total Group contributions for 2024 are expected to be £6.8m.
Effect of asset limit at start of period
Interest on the asset limit
Change in the asset limit other than interest
Exchange rate adjustment
Effect of asset limit at end of period
UK pensions
2023
£m
—
—
—
—
—
North American pensions &
post-retirement benefits
2022
£m
—
—
—
—
—
2023
£m
(1.8)
(0.2)
—
0.2
(1.8)
2022
£m
—
—
(1.8)
—
(1.8)
Total
2023
£m
(1.8)
(0.2)
—
0.2
(1.8)
2022
£m
—
—
(1.8)
—
(1.8)
Changes in the present value of the defined benefit obligations are analysed as follows.
Opening defined benefit obligations
Current service cost
Interest on benefit obligations
Benefits paid
Actuarial (losses) gains due to:
Changes in financial assumptions
Changes in demographic assumptions
Experience on benefit obligations
Liabilities removed due to curtailments/settlements
Exchange rate adjustment
Closing defined benefit obligations
UK pensions
North American pensions &
post-retirement benefits
Total
2023
£m
(560.1)
—
(26.1)
35.6
(10.1)
7.2
(9.9)
—
—
(563.4)
2022
£m
(830.2)
—
(15.5)
34.0
261.5
4.4
(14.3)
—
—
(560.1)
2023
£m
(159.1)
(0.1)
(7.4)
12.5
(2.7)
—
(0.7)
0.5
7.5
(149.5)
2022
£m
(187.1)
(0.4)
(5.2)
12.8
41.6
(0.4)
(1.5)
—
(18.9)
(159.1)
2023
£m
(719.2)
(0.1)
(33.5)
48.1
(12.8)
7.2
(10.6)
0.5
7.5
(712.9)
2022
£m
(1,017.3)
(0.4)
(20.7)
46.8
303.1
4.0
(15.8)
—
(18.9)
(719.2)
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Financial Statements
Additional Information
Notes to the Group Financial Statements
continued
Changes in the fair value of plan assets are analysed as follows.
Opening plan assets
Interest on plan assets
Employer contributions
Administrative expenses
Benefits paid
Actual return on plan assets less interest on plan assets
Exchange rate adjustment
Closing plan assets
UK pensions
North American pensions &
post-retirement benefits
2023
£m
610.1
28.7
6.3
(0.6)
(35.6)
(16.2)
—
592.7
2022
£m
816.8
15.3
6.3
(0.6)
(34.0)
(193.7)
—
610.1
2023
£m
126.0
6.1
7.0
(0.7)
(12.5)
4.2
(6.0)
124.1
2022
£m
143.8
4.1
8.1
(0.9)
(12.8)
(30.5)
14.2
126.0
Total
2023
£m
736.1
34.8
13.3
(1.3)
(48.1)
(12.0)
(6.0)
716.8
2022
£m
960.6
19.4
14.4
(1.5)
(46.8)
(224.2)
14.2
736.1
Sensitivity analysis
Changes in key assumptions can have a significant effect on the reported retirement benefit obligation and the Consolidated Income Statement
expense for 2024. The effects of changes in those assumptions on the reported retirement benefit obligation are set out in the table below.
Discount rate
Effect on defined benefit obligation of a 1.0% change
Effect on net funding position of a 1.0% change
RPI inflation (and associated assumptions)
Effect on defined benefit obligation of a 1.0% change
Effect on net funding position of a 1.0% change
Life expectancy
Effect on defined benefit obligation of a 1 year change
Effect on net funding position of a 1 year change
Increase
Decrease
Increase
Decrease
2023
£m
68.7
42.8
(29.1)
(14.1)
(30.9)
(9.1)
2023
£m
(82.1)
(52.2)
29.7
14.3
30.9
9.1
2022
£m
72.7
58.4
(29.3)
(20.4)
(30.2)
(17.4)
2022
£m
(87.1)
(70.8)
31.3
22.0
30.2
17.4
The impact on the IAS 19 net funding position is significantly reduced as a result of the insurance policies held. In the absence of such policies,
the impact on the IAS 19 net funding position would be much closer to the significantly higher impact on the defined benefit obligation shown
in the table.
These sensitivities have been calculated to show the movement in the defined benefit obligation and IAS 19 net funding position in isolation
and assume no other changes in market conditions at the accounting date. In practice, for example, a change in discount rate is unlikely to
occur without any movement in the value of the invested (non-insurance policy) assets held by the plans.
25. Share capital & reserves
Issued & fully paid share capital
At the beginning of the year
At the end of the year
Treasury shares
At the beginning of the year
Purchase of shares in respect of equity settled share-based payments
Utilised during the year in respect of equity settled share-based payments
At the end of the year
2023
Number
million
2022
Number
million
259.6
259.6
259.6
259.6
0.9
1.2
(0.4)
1.7
0.3
1.3
(0.7)
0.9
The Company has one class of ordinary share with a par value of 12.5p, which carries no rights to fixed income.
As at 31 December 2023, Computershare Investor Services PLC held the following shares, which are subject to restriction, on behalf
of individuals:
• 171,792 shares (2022: 111,314) for restricted shares that have vested under the Share Reward Plan. These shares have a market value
of £3.2m.
• 8,731 shares (2022: 24,655) for bonus shares awarded under the Share Reward Plan. These shares have a market value of £0.2m.
As at 31 December 2023, 1,686,148 shares (2022: 888,227) were unallocated and held by the Computershare Trustees (Jersey) Limited with
a market value of £31.8m.
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Financial Statements
Additional Information
Notes to the Group Financial Statements
continued
Reserves
The period movements on the below reserves are summarised in the Consolidated Statement of Changes in Equity.
Merger reserve
The merger reserve relates to the issue of new equity as part of the consideration paid for an acquisition. Shares issued directly to ESCO
Shareholders on 12 July 2018, as part of the total acquisition consideration, qualified for merger relief under Section 612 of the Companies Act
2006 and resulted in an increase to the reserve of £323.2m. The remaining reserve balance of £9.4m relates to shares issued in part
consideration for the acquisition of Delta Industrial Valves Inc. during 2015.
Capital redemption reserve
The capital redemption reserve was created by a repurchase and cancellation of own shares during the 53 weeks ended 1 January 1999.
Foreign currency translation reserve
The foreign currency translation reserve is used to record exchange differences arising from the translation of the financial statements of
foreign operations and the Group’s hedge of its net investment in foreign operations.
Hedge accounting reserve
This reserve records the portion of the gains or losses on hedging instruments used as cash flow and fair value hedges that are determined
to be effective. Net gains (losses) transferred from equity during the year are included in the following line items in the Consolidated
Income Statement.
Revenue
Finance costs
2023
£m
(0.5)
(0.1)
(0.6)
2022
£m
(0.5)
—
(0.5)
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Governance
Financial Statements
Additional Information
Notes to the Group Financial Statements
continued
26. Additional cash flow information
Total operations
Net cash generated from operations
Operating profit – continuing operations
Operating loss – discontinued operations
Operating profit – total operations
Exceptional and other adjusting items
Amortisation of intangible assets
Share of results of joint ventures
Depreciation of property, plant & equipment
Depreciation of right-of-use assets
Impairment of property, plant & equipment
Capital grants received
Gains on disposal of property, plant & equipment
Funding of pension & post-retirement costs
Employee share schemes
Transactional foreign exchange
(Decrease) increase in provisions
Cash generated from operations before working capital cash flows
Decrease (increase) in inventories
Decrease in trade & other receivables & construction contracts
(Decrease) increase in trade & other payables & construction contracts
Cash generated from operations
Additional pension contributions paid
Exceptional and other adjusting cash items
Exceptional cash items - acquired vendor liabilities
Income tax paid
Net cash generated from operating activities
Cash flows from discontinued operations included above are disclosed separately in note 9.
The following tables summarise the cash flows arising on acquisitions (note 14) and disposals (notes 6 and 9).
Acquisitions of subsidiaries
Acquisition of subsidiaries – cash consideration paid
Acquisition of subsidiaries - deferred consideration paid
Cash & cash equivalents acquired
Total cash outflow on current period acquisitions
Prior period acquisitions - deferred consideration paid
Total cash outflow relating to acquisitions
Net cash outflow arising on disposals
Consideration received net of costs paid & cash disposed of – ESCO Russia
Prior period disposals
Total cash outflow relating to disposals
Net debt comprises the following
Cash & short-term deposits (note 19)
Current interest-bearing loans & borrowings (note 20)
Non-current interest-bearing loans & borrowings (note 20)
The Weir Group PLC Annual Report and Financial Statements 2023
195
Notes
2023
£m
6
13
16
12
12
12
28
24
368.4
(1.3)
367.1
66.2
37.7
(2.5)
39.9
31.6
0.9
(0.5)
(0.4)
(1.1)
7.0
9.2
(1.5)
553.6
42.0
15.2
(85.3)
525.5
(9.3)
(18.0)
—
(103.9)
394.3
2023
£m
6.1
—
(0.2)
5.9
1.0
6.9
—
0.4
0.4
2023
£m
2022
£m
307.5
—
307.5
51.4
41.6
(2.5)
47.0
31.4
0.2
(0.2)
(0.6)
(2.9)
8.0
14.3
1.2
496.4
(128.6)
49.8
30.2
447.8
(9.7)
(14.2)
(9.7)
(93.4)
320.8
2022
£m
16.3
0.5
(1.6)
15.2
—
15.2
2.0
0.1
2.1
2022
£m
707.2
(286.2)
(1,111.1)
(690.1)
691.2
(406.3)
(1,082.1)
(797.2)
Strategic Report
Governance
Financial Statements
Additional Information
Notes to the Group Financial Statements
continued
Reconciliation of financing cash flows to movement in net debt
Cash & cash equivalents
Third-party loans
Leases
Unamortised issue costs
Amounts included in gross debt
Opening balance
at 31 December
2022 Cash movements
Additions/
acquisitions
£m
477.5
(1,165.5)
(115.1)
5.9
(1,274.7)
£m
1.0
111.2
31.0
4.0
146.2
£m
0.2
(0.2)
(38.4)
—
(38.6)
Non-cash
movements
Closing balance
at 31 December
2023
£m
—
—
(0.3)
(3.1)
(3.4)
£m
447.4
(1,026.8)
(117.5)
6.8
(1,137.5)
FX
£m
(31.3)
27.7
5.3
—
33.0
Amounts included in net debt
(797.2)
147.2
(38.4)
1.7
(3.4)
(690.1)
Financing derivatives
(0.1)
0.5
—
—
(2.7)
(2.3)
Total financing liabilities1
(1,274.8)
146.7
(38.6)
33.0
(6.1)
(1,139.8)
Opening
balance at 31
December
2021
Cash
movements
Additions/
acquisitions
Cash & cash equivalents
Third-party loans
Leases
Unamortised issue costs
£m
500.0
£m
(51.0)
(1,174.7)
133.4
(105.4)
7.6
30.5
2.7
Amounts included in gross debt
(1,272.5)
166.6
£m
1.6
(0.4)
(35.0)
—
(35.4)
FX
£m
28.8
(123.8)
(6.0)
—
(129.8)
Non-cash
movements
£m
—
—
0.8
(4.4)
(3.6)
Closing
balance at 31
December
2022
£m
477.5
(1,165.5)
(115.1)
5.9
(1,274.7)
Disposals
£m
(1.9)
—
—
—
—
Amounts included in net debt
(772.5)
115.6
(33.8)
(1.9)
(101.0)
(3.6)
(797.2)
Financing derivatives
1.4
0.3
—
—
—
(1.8)
(0.1)
Total financing liabilities1
(1,271.1)
166.9
(35.4)
—
(129.8)
(5.4)
(1,274.8)
1 Total financing liabilities comprise gross debt plus other liabilities relating to financing activities.
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196
Strategic Report
Governance
Financial Statements
Additional Information
Notes to the Group Financial Statements
continued
27. Commitments & legal claims
Capital commitments
Outstanding capital commitments contracted but not provided for – property, plant & equipment
2023
£m
19.1
2022
£m
35.0
Legal claims
The Company and certain subsidiaries are, from time-to-time, party to legal proceedings and claims that arise in the normal course of business.
Provisions have been made where the Directors have assessed that a cash outflow is probable. All other claims are believed to be remote or
are not yet ripe.
28. Equity settled share-based payments
Employee share plans
The Group’s 2018 Share Reward Plan (SRP) allows for Restricted shares and Bonus shares to be awarded to employees under the Plan. Details
of the SRP for Executive Directors are outlined in the Remuneration report on pages 109 to 132. The vesting period varies with awards issued
between 2018 - 2020 vesting in four tranches for Group Executives and Executive Directors and three tranches for all other participants on a
pro rata basis, awards issued in 2021 vesting in three tranches, while awards issued in 2022 and 2023 will vest in full at the end of three years.
Underpins and two and three-year holding periods are attached to the Executive Directors’ and Group Executives’ SRP awards. Dividend
equivalents are added in the form of shares at each vesting date.
In 2019, the Weir Group All-Employee Share Ownership Plan (Weir ShareBuilder) launched. Awards granted under Weir ShareBuilder are free
shares given to all employees who meet the eligibility criteria. Awards vest in one tranche on the second anniversary of the grant date. The
2021 award vested on 24 August 2023. Dividend equivalents are added in the form of shares at each vesting date.
One-off conditional share awards are also occasionally granted to employees. These transactions fall under the scope of IFRS 2 'Share-based
payments' and are treated in line with awards issued under the Group’s SRP in the year of award.
The following tables illustrate the number and weighted average share prices (WASP) of shares awarded.
Restricted shares
Outstanding at the beginning of the year
Awarded during the year
Vested during the year
Forfeited during the year
Outstanding at the end of the year
Weir ShareBuilder Plan (WSBP)
Outstanding at the beginning of the year
Vested during the year
Outstanding at the end of the year
2023
Number
million
1.6
0.6
(0.4)
(0.3)
1.5
2023
Number
million
—
—
—
2023
WASP
£14.35
£18.64
£12.46
£14.58
£16.04
2023
WASP
—
—
—
2022
Number
million
1.5
0.7
(0.6)
—
1.6
2022
Number
million
0.2
(0.2)
—
2022
WASP
£13.14
£15.96
£13.11
—
£14.35
2022
WASP
£16.57
£16.57
—
A total of 26,098 awards (2022: 15,080) were issued to new employees under the Weir ShareBuilder Plan in the year.
In respect of awards issued in the year and revised estimates of previously issued awards, under the SRP and Weir ShareBuilder, an amount of
£7.0m has been charged (2022: £8.0m) to the Consolidated Income Statement in respect of the number of awards that are expected to be
made at the end of the vesting period.
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197
Strategic Report
Governance
Financial Statements
Additional Information
Notes to the Group Financial Statements
continued
The remaining contractual lives of the outstanding SRP, Weir ShareBuilder and one-off conditional share awards at the end of the period are
as follows.
2023
2023
2022
2022
Year of award
2019
2020
2021
2022
2023
million
—
0.1
0.2
0.6
0.6
—
8 months
8 months
14 months
24 months
million
0.1
0.4
0.4
0.7
—
9 months
10 months
16 months
26 months
—
Number
Remaining
contractual life*
Number
Remaining
contractual life*
* Remaining contractual life reflects an average across awards with one to five year vesting periods.
The fair value at date of grant of the conditional awards has been independently estimated for both the Restricted shares and Weir ShareBuilder
awards. The grant date fair value of these awards is calculated as the share price at the date of grant less an adjustment for loss of
reinvestment return on the dividend equivalent. There are no performance conditions attached to these awards.
The fair value of occasional one-off conditional awards at grant date is also estimated on this basis.
Bonus shares
Under the Group’s annual bonus plan, Executive Directors and members of the Group Executive defer 30% of any bonus received into an
award of Weir Group shares, which will normally be released after three years. These awards are entitled to receive the value of the dividends
paid by the Company during the three-year holding period or to have dividend equivalents added in the form of shares at each vesting date.
The SRP bonus shares are administered by Computershare Trust Company, N.A., CPU Share Plans Pty Ltd and Computershare Investor
Services PLC. The shares are acquired on market at the grant date and are held in Computershare Trust Company, N.A., CPU Share Plans Pty
Ltd and Computershare Investor Services PLC until such time as they are vested. Forfeited shares are reallocated in subsequent grants. Under
the terms of the Trust Deed, Weir Group is required to provide the necessary funding for the acquisition of the shares at the time of the grant.
The number of shares to be granted is determined based on the applicable annual bonus divided by the average share price for the three days
immediately prior to the date of the grant or the number of shares purchased in the stock market with the applicable annual bonus. In 2023,
49,023 shares were awarded (2022: 33,677).
The fair value of the rights at grant date was estimated by taking the market price of the Company’s shares on that date.
29. Related party disclosure
The following table provides the total amount of significant transactions that have been entered into by the Group with related parties for the
relevant financial year and outstanding balances at the year end.
Related party
Joint ventures
Group pension plans
Sales to
related parties
- goods
Sales to
related parties
- services
Purchases
from related
parties -
goods
Amounts
owed to
related parties
Amounts
owed by
related parties
2023
2022
2023
2022
£m
0.9
1.1
—
—
£m
0.1
0.1
—
—
£m
19.2
25.9
—
—
£m
3.8
6.2
1.6
8.2
£m
0.4
0.3
—
—
Contributions to the Group pension plans are disclosed in note 24.
Terms & conditions of transactions with related parties
Sales to and from related parties are made at normal market prices. Outstanding balances at the period end are unsecured and settlement
occurs in cash. There have been no guarantees provided or received for any related party balances. For 2023, the Group has not raised any
provision for doubtful debts relating to amounts owed by related parties (2022: £nil) as the payment history has been excellent and there is no
forward-looking information that suggests there will be any issues affecting the ability for future settlement. This assessment is undertaken
each financial year through examining the financial position of the related party and the market in which the related party operates.
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Governance
Financial Statements
Additional Information
Notes to the Group Financial Statements
continued
Compensation of key management personnel
Short-term employee benefits
Share-based payments
Post-employment benefits
Emoluments paid to the Directors of The Weir Group PLC
Remuneration
Gains made on the exercise of Long Term Incentive Plan awards
2023
£m
7.6
2.3
0.4
10.3
2023
£m
3.5
1.3
4.8
2022
£m
8.0
2.4
0.3
10.7
2022
£m
3.8
1.1
4.9
Key management comprises the Board and the Group Executive. Further details of the Directors’ remuneration are disclosed in the Directors’
Remuneration Report on pages 109 to 132.
30. Financial instruments
Derivative financial instruments
The Group enters into derivative financial instruments in the normal course of business in order to hedge its exposure to foreign exchange risk.
Derivatives are only used for economic hedging purposes and no speculative positions are taken. Derivatives are recognised as held for trading
and at fair value through profit and loss unless they are designated in IFRS 9 'Financial Instruments' compliant hedge relationships.
The table below summarises the types of derivative financial instrument included within each balance sheet category.
Included in current assets
Forward foreign currency contracts designated as cash flow hedges
Other forward foreign currency contracts
Included in current liabilities
Forward foreign currency contracts designated as cash flow hedges
Forward foreign currency contracts designated as net investment hedges
Other forward foreign currency contracts
Included in non-current liabilities
Forward foreign currency contracts designated as fair value hedges
2023
£m
0.6
7.3
7.9
(0.5)
—
(5.9)
(6.4)
(2.3)
(2.3)
2022
£m
1.0
7.9
8.9
(1.9)
(0.1)
(11.2)
(13.2)
—
—
Net derivative financial liabilities
(0.8)
(4.3)
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199
Strategic Report
Governance
Financial Statements
Additional Information
Notes to the Group Financial Statements
continued
Financial assets and liabilities
Financial assets and liabilities (with the exception of derivative financial instruments) are initially recognised at fair value net of transaction costs.
Subsequently they are recognised at either fair value or amortised cost. Derivative financial instruments are initially recognised at fair value and
subsequently remeasured at fair value.
The Group uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:
Level 1: Quoted (unadjusted) prices in active markets for identical assets or liabilities;
Level 2: Other techniques for which all inputs that have a significant effect on the recorded fair value are observable, either directly or
indirectly; and
Level 3: Techniques that use inputs that have a significant effect on the recorded fair value that are not based on observable market data.
During the year ended 31 December 2022, there were no transfers between level 1 and level 2 fair value measurements and no transfers into
or out of level 3 fair value measurements.
During the year ended 31 December 2023, following the settlement of private placement debt and the issue of further Sustainability-Linked
Notes, the fair value of fixed-rate borrowings has been reassessed as a level 1 fair value measurement rather than level 2 as the full balance is
now calculated using quoted market prices.
Offsetting
Financial assets and liabilities are offset and the net amount reported in the balance sheet where the Group currently has a legal right to offset
the recognised amounts, and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously.
As at 31 December 2023, cash and short-term deposits of £707.2m (2022: £691.2m) and current interest-bearing loans and borrowings of
£286.2m (2022: £406.3m) were presented after elimination of debit and credit balances within individual pools of £nil (2022: £nil).
The Group operates a notional cash pooling arrangement in which individual balances are not offset for reporting purposes as the Group does
not intend to settle on a net basis. Cash and short-term deposits at 31 December 2023 includes £256.0m (2022: £206.9m) that is part of this
arrangement and both cash and interest-bearing loans and borrowings are grossed up by this amount.
The Group has also entered into arrangements that do not meet the criteria for offsetting, but still allow for the related amounts to be offset in
specific circumstances. As at 31 December 2023, the Group had derivative financial instruments of £1.5m (2022: £4.5m) which were subject to
master netting arrangements, but not offset.
Carrying amounts and fair values
The table below shows the carrying amounts and fair values of the Group’s financial instruments that are reported in the financial statements.
Financial assets
Derivative financial instruments recognised at fair value
through profit or loss
Derivative financial instruments in designated hedge
accounting relationships
Trade & other receivables excluding statutory assets,
prepayments & construction contract assets
Cash & short-term deposits
Financial liabilities
Derivative financial instruments recognised at fair value
through profit or loss
Derivative financial instruments in designated hedge
accounting relationships
Deferred consideration payable
Amortised cost:
Fixed-rate borrowings
Floating-rate borrowings
Leases
Bank overdrafts
Trade & other payables excluding statutory liabilities &
contract liabilities
Fair value measurement using
Level 1
Quoted prices in
active markets
Level 2
Significant
observable
inputs
Level 3
Significant
unobservable
inputs
£m
£m
£m
Fair value
2023
£m
7.3
0.6
508.5
707.2
5.9
2.8
1.6
895.9
97.7
n/a
259.8
457.6
—
—
—
—
—
—
—
895.9
—
n/a
—
—
7.3
0.6
508.5
707.2
5.9
2.8
1.6
—
97.7
n/a
259.8
457.6
—
—
—
—
—
—
—
—
—
n/a
—
—
Carrying
amount
2023
£m
7.3
0.6
508.5
707.2
1,223.6
5.9
2.8
1.6
922.3
97.7
117.5
259.8
457.6
1,865.2
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200
Strategic Report
Governance
Financial Statements
Additional Information
Strategic Report
Governance
Financial Statements
Additional Information
Notes to the Group Financial Statements
continued
Financial assets
Derivative financial instruments recognised at fair value
through profit or loss
Derivative financial instruments in designated hedge
accounting relationships
Trade & other receivables excluding statutory assets,
prepayments & construction contract assets
Cash & short-term deposits
Financial liabilities
Derivative financial instruments recognised at fair value
through profit or loss
Derivative financial instruments in designated hedge
accounting relationships
Deferred consideration payable
The Group has also entered into arrangements that do not meet the criteria for offsetting, but still allow for the related amounts to be offset in
Amortised cost
Fixed-rate borrowings
Floating-rate borrowings
Leases
Bank overdrafts
Trade & other payables excluding statutory liabilities &
contract liabilities
Carrying amount
Fair value
2022
£m
2022
£m
Fair value measurement using
Level 1
Quoted prices in
active markets
Level 2
Significant
observable
inputs
Level 3
Significant
unobservable
inputs
£m
£m
£m
7.9
1.0
540.9
691.2
1,241.0
7.9
1.0
540.9
691.2
11.2
11.2
2.0
2.0
823.1
336.5
115.1
213.7
2.0
2.0
784.3
336.5
n/a
213.7
495.7
495.7
1,999.3
—
—
—
—
—
—
—
—
—
n/a
—
—
7.9
1.0
540.9
691.2
11.2
2.0
2.0
784.3
336.5
n/a
213.7
495.7
—
—
—
—
—
—
—
—
—
n/a
—
—
Assets and liabilities recognised at amortised cost
Following the settlement of private placement debt and the issue of further Sustainability-Linked Notes, the fair value of fixed-rate borrowings
has been reassessed as a level 1 fair value measurement rather than level 2 as the full balance is now calculated using quoted market prices.
All other financial assets and liabilities carried at cost require level 2 fair value measurement for disclosure purposes. The fair value of floating
rate borrowings approximates the carrying value due to the variable nature of the interest terms. The carrying amount of lease liabilities is
estimated by discounting future cash flows using the rate implicit in the lease or the Group’s incremental borrowing rate. The fair value of cash
and short-term deposits, trade and other receivables and trade and other payables approximates their carrying amount due to the short-term
maturities of these instruments.
Assets and liabilities recognised at fair value
The Group enters into derivative financial instruments with various counterparties, principally financial institutions with investment grade credit
ratings. The derivative financial instruments are valued using valuation techniques with market observable inputs including spot and forward
foreign exchange rates, interest rate curves, counterparty and own credit risk. The fair value of cross-currency swaps is calculated as the
present value of the estimated future cash flows based on spot and forward foreign exchange rates. The fair value of forward foreign currency
contracts is calculated as the present value of the estimated future cash flows based on spot and forward foreign exchange rates.
Hedging activities
The Group designates certain derivative financial instruments in either cash flow hedging, net investment hedging or fair value hedging
relationships in accordance with IFRS 9.
Cash Flow Hedge
Net Investment Hedge
Fair Value Hedge
Hedge relationship Cash flow hedge of highly probable
forecast foreign currency purchases
and sales
Net investment hedge of foreign
operations
Fair value hedge of foreign currency
debt
Hedged risk
Hedging
instruments
Transactional foreign exchange risk
Translational foreign exchange risk
Transactional foreign exchange risk
Forward foreign currency contracts
Foreign currency debt
Forward foreign currency contracts
Forward foreign currency contracts
Notes to the Group Financial Statements
continued
Financial assets and liabilities
subsequently remeasured at fair value.
Financial assets and liabilities (with the exception of derivative financial instruments) are initially recognised at fair value net of transaction costs.
Subsequently they are recognised at either fair value or amortised cost. Derivative financial instruments are initially recognised at fair value and
The Group uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:
Level 1: Quoted (unadjusted) prices in active markets for identical assets or liabilities;
Level 2: Other techniques for which all inputs that have a significant effect on the recorded fair value are observable, either directly or
indirectly; and
Level 3: Techniques that use inputs that have a significant effect on the recorded fair value that are not based on observable market data.
During the year ended 31 December 2022, there were no transfers between level 1 and level 2 fair value measurements and no transfers into
or out of level 3 fair value measurements.
During the year ended 31 December 2023, following the settlement of private placement debt and the issue of further Sustainability-Linked
Notes, the fair value of fixed-rate borrowings has been reassessed as a level 1 fair value measurement rather than level 2 as the full balance is
now calculated using quoted market prices.
Offsetting
Financial assets and liabilities are offset and the net amount reported in the balance sheet where the Group currently has a legal right to offset
the recognised amounts, and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously.
As at 31 December 2023, cash and short-term deposits of £707.2m (2022: £691.2m) and current interest-bearing loans and borrowings of
£286.2m (2022: £406.3m) were presented after elimination of debit and credit balances within individual pools of £nil (2022: £nil).
The Group operates a notional cash pooling arrangement in which individual balances are not offset for reporting purposes as the Group does
not intend to settle on a net basis. Cash and short-term deposits at 31 December 2023 includes £256.0m (2022: £206.9m) that is part of this
arrangement and both cash and interest-bearing loans and borrowings are grossed up by this amount.
specific circumstances. As at 31 December 2023, the Group had derivative financial instruments of £1.5m (2022: £4.5m) which were subject to
master netting arrangements, but not offset.
Carrying amounts and fair values
The table below shows the carrying amounts and fair values of the Group’s financial instruments that are reported in the financial statements.
Financial assets
through profit or loss
Derivative financial instruments recognised at fair value
Derivative financial instruments in designated hedge
accounting relationships
Trade & other receivables excluding statutory assets,
prepayments & construction contract assets
Cash & short-term deposits
Financial liabilities
through profit or loss
Derivative financial instruments recognised at fair value
Derivative financial instruments in designated hedge
accounting relationships
Deferred consideration payable
Amortised cost:
Fixed-rate borrowings
Floating-rate borrowings
Leases
Bank overdrafts
contract liabilities
Trade & other payables excluding statutory liabilities &
Fair value measurement using
Level 1
Quoted prices in
active markets
Level 2
Significant
observable
inputs
Level 3
Significant
unobservable
inputs
£m
£m
£m
Fair value
2023
£m
7.3
0.6
508.5
707.2
5.9
2.8
1.6
895.9
97.7
n/a
259.8
457.6
—
—
—
—
—
—
—
—
n/a
—
—
895.9
7.3
0.6
508.5
707.2
5.9
2.8
1.6
—
97.7
n/a
259.8
457.6
—
—
—
—
—
—
—
—
—
n/a
—
—
Carrying
amount
2023
£m
7.3
0.6
508.5
707.2
1,223.6
5.9
2.8
1.6
922.3
97.7
117.5
259.8
457.6
1,865.2
The Weir Group PLC Annual Report and Financial Statements 2023
200
The Weir Group PLC Annual Report and Financial Statements 2023
201
Strategic Report
Governance
Financial Statements
Additional Information
Notes to the Group Financial Statements
continued
For each type of derivative financial instrument, the net carrying amount and maturity date ranges are set out in the table below.
Year ended 31 December 2023
Forward foreign currency contracts designated as cash flow hedges
Forward foreign currency contracts designated as fair value hedges
Other forward foreign currency contracts at fair value through profit or loss
Year ended 31 December 2022
Forward foreign currency contracts designated as cash flow hedges
Forward foreign currency contracts designated as net investment hedges
Other forward foreign currency contracts at fair value through profit or loss
Net carrying
amount
£m Maturity dates
0.1
2024 to 2025
2025
2024
(2.3)
1.4
(0.8)
Net carrying
amount
£m
Maturity dates
(0.9) 2023 to 2024
(0.1)
(3.3)
(4.3)
2023
2023
For each type of derivative financial instrument, the amounts recognised for the year in profit or loss and equity are set out in the table below.
In the financial statements these amounts are offset by the retranslation of foreign currency denominated receivables and payables, the impact
of which is also set out in the table below.
Year ended 31 December 2023
Instruments measured at fair value
Designated in hedge accounting relationships
Amounts recognised in
profit or loss
Other gains
in operating
profit
Total
amounts
recognised in
profit or loss
£m
£m
Amounts recognised in equity
Cost of
hedging
reserve
£m
Cash flow
hedge
reserve
Foreign
currency
translation
reserve
£m
£m
Forward foreign currency contracts designated as cash flow hedges
0.5
0.5
—
(0.4)
—
Forward foreign currency contracts designated as net investment
hedges
Forward foreign currency contracts designated as fair value hedges
Not designated in hedge accounting relationships
Other forward foreign currency contracts at fair value through profit or
loss
Total gains (losses) on instruments
Year ended 31 December 2022
Instruments measured at fair value
Designated in hedge accounting relationships
—
0.1
—
0.6
—
0.1
—
0.6
—
(0.8)
—
(0.8)
—
—
—
(0.4)
(2.7)
—
—
(2.7)
Amounts recognised in
profit or loss
Amounts recognised in equity
Other gains in
operating
profit
Total amounts
recognised in
profit or loss
£m
£m
Cost of
hedging
reserve
£m
Cash flow
hedge reserve
Foreign
currency
translation
reserve
£m
£m
Forward foreign currency contracts designated as cash flow hedges
0.5
0.5
Forward foreign currency contracts designated as net investment
hedges
Not designated in hedge accounting relationships
Other forward foreign currency contracts at fair value through profit or
loss
Total gains (losses) on instruments
—
—
14.1
14.6
14.1
14.6
—
—
—
—
—
—
—
—
—
(1.2)
—
(1.2)
Hedge ineffectiveness
Hedge effectiveness is determined at the inception of the hedge relationship and through periodic prospective effectiveness assessments to
ensure that an economic relationship exists between the hedged item and hedging instrument.
For hedges of foreign currency revenue and cost of sales, the Group enters into hedge relationships where the critical terms of the hedging
instrument match exactly with the terms of the hedged item. The Group therefore performs a qualitative assessment of effectiveness. If
changes in circumstances affect the terms of the hedged item such that the critical terms no longer match exactly with the critical terms of the
hedging instrument, the Group uses the hypothetical derivative method to determine whether an economic relationship remains, and so assess
effectiveness. As all critical terms matched during the year, the economic relationships were 100% effective.
Ineffectiveness may arise if the timing of the forecast transaction changes from what was originally estimated, or if there are changes in the
credit risk of the Group or the derivative counterparty.
The Weir Group PLC Annual Report and Financial Statements 2023
202
Strategic Report
Governance
Financial Statements
Additional Information
Notes to the Group Financial Statements
continued
The Group utilises borrowings that are measured at amortised cost and denominated in the currency of the hedged net assets, as hedging
instruments in net investment hedges. The Group does not hedge 100% of its net assets of foreign operations, therefore the hedged item is
identified as a proportion of the net assets of the foreign operations up to the notional amount of the foreign exchange forwards and principal
amount of the borrowings. The Group also utilises forward foreign currency contracts as hedging instruments in net investment hedges. As all
critical terms matched during the year, the economic relationships were 100% effective.
There was no ineffectiveness during 2023 or 2022 in relation to hedge relationships.
Effects of hedge accounting on financial position and performance
The effects of the foreign currency related hedging instruments on the Group’s financial position and performance are as follows.
Cash flow hedging: foreign currency forwards
Carrying amount (£m)
Assets
Liabilities
Notional amounts (m)
USD
GBP
NZD
EUR
AUD
Average exchange rates
EUR:AUD
USD:AUD
GBP:CAD
USD:CAD
GBP:AUD
GBP:EUR
GBP:USD
NZD:AUD
USD:EUR
Maturity dates
Hedge ratios1
Change in fair value of outstanding hedging instruments since 1 January (£m)
Change in value of hedged item used to determine hedge effectiveness (£m)
1. The foreign currency forwards are denominated in the same currency as the highly probable future transactions, therefore the hedge ratio is 1:1.
Net investment hedging: foreign currency forwards and borrowings
Carrying amount (£m)
Liabilities - derivatives
Liabilities - borrowings
Notional amounts (m)
USD
Average exchange rates
GBP:USD
Maturity dates
Hedge ratios1
Change in fair value of outstanding hedging instruments since 1 January (£m)
Change in value of hedged item used to determine hedge effectiveness (£m)
The Weir Group PLC Annual Report and Financial Statements 2023
203
2023
0.1
0.6
(0.5)
39.8
0.1
0.5
13.7
—
1.66
1.51
—
1.33
1.88
1.13
1.22
0.92
—
2022
(0.9)
1.0
(1.9)
92.1
6.4
3.2
6.1
2.0
1.54
1.44
1.61
1.30
1.78
1.17
1.24
0.92
0.95
01/2024 -
03/2025
01/2023 -
07/2024
1:1
(0.4)
0.4
2023
(626.8)
—
(626.8)
1:1
—
—
2022
(1,165.6)
(0.1)
(1,165.5)
800.0
1,422.5
1.24
05/2026
1:1
27.6
(27.6)
1.24
02/2023 -
04/2027
1:1
(124.9)
124.9
Strategic Report
Governance
Financial Statements
Additional Information
Notes to the Group Financial Statements
continued
Fair value hedging: foreign currency forwards
Carrying amount (£m)
Liabilities - derivatives
Notional amounts (m)
USD
Average exchange rates
GBP:USD
Maturity dates
Hedge ratios1
Change in fair value of outstanding hedging instruments since 1 January (£m)
Change in value of hedged item used to determine hedge effectiveness (£m)
1. The derivatives are denominated in the same currency as the foreign currency debt, therefore the hedge ratio is 1:1.
2023
(2.3)
(2.3)
110.0
1.25
05/2025
1:1
(1.8)
1.8
2022
—
—
—
—
—
—
—
—
Financial risk management
Financial risk management of the Group is carried out by Group Treasury in conjunction with individual subsidiaries. The principal financial risks
to which the Group is exposed are market risk, liquidity risk and credit risk.
Market risk
The Group is exposed to foreign exchange risk and interest rate risk in the ordinary course of business.
Foreign exchange risk
The Group is exposed to both transactional and translational foreign exchange risk. Transactional risk arises when subsidiaries enter into
transactions denominated in currencies other than their functional currency for operational or financing purposes or when the Group’s Treasury
function enters into transactions for financing or risk management purposes. Translational risk arises on the translation of overseas earnings
and investments into Sterling for consolidated reporting purposes. Foreign currency transactional and translational risk could result in volatility in
reported consolidated earnings and net assets.
In respect of transactional foreign currency risk, the Group maintains a policy that all operating units eliminate exposures on committed foreign
currency transactions, usually by entering into forward foreign currency contracts through the Group’s Treasury function. Certain operating units
apply cash flow hedge accounting in accordance with IFRS 9. The Group does not engage in any speculative foreign exchange transactions.
The Group has material foreign investments in the US, Australia, Canada, Europe, South America and South Africa. In respect of translational
risk, the Group has a policy of partially hedging its net investment exposure to US Dollar (US$). This is achieved through designating an element
of US$ denominated borrowings and forward currency contracts as net investment hedges against the Group’s investments. The Group does
not hedge the translational exposure arising from profit and loss items.
Sensitivity to foreign exchange rates
The Group considers the most significant transactional foreign exchange risk relates to the US Dollar, Australian Dollar, Euro and Canadian
Dollar. The following table shows the impact of movements in derivative valuation as a result of a weakening of these currencies. In the
Consolidated Income Statement, these amounts are partially offset by the retranslation of foreign currency denominated receivables
and payables. The table also shows the impact of movements in foreign currency debt designated in net investment hedges.
Transactional foreign exchange
2023
US Dollar
Australian Dollar
Euro
Canadian Dollar
2022
US Dollar
Australian Dollar
Chinese Yuan
Canadian Dollar
Increase in
currency rate
Effect on profit
gain (loss)
Effect on equity
gain (loss)
£m
£m
+25%
+25%
+25%
+25%
+25%
+25%
+25%
+25%
6.2
6.8
(6.2)
(12.6)
22.3
8.4
(6.6)
(5.0)
125.4
—
—
—
235.3
—
—
—
The Group is also exposed to translational foreign exchange risk as a result of its global operations and therefore the earnings of the Group will
fluctuate due to changes in foreign exchange rates in relation to Sterling. The Group’s operating profit before adjusting items was denominated
in the following currencies.
The Weir Group PLC Annual Report and Financial Statements 2023
204
Strategic Report
Governance
Financial Statements
Additional Information
Notes to the Group Financial Statements
continued
US Dollar
Canadian Dollar
Australian Dollar
Chilean Peso
Euro
South African Rand
Brazilian Real
Chinese Yuan
Indian Rupee
UK Sterling
Other
Adjusted operating profit
2023
£m
165.6
78.8
79.7
69.0
34.6
24.8
18.8
11.0
6.8
(34.4)
4.1
458.8
2022
£m
192.8
63.5
55.4
53.8
24.4
11.3
10.4
10.3
7.1
(34.9)
0.7
394.8
Interest rate risk
The Group is exposed to interest rate risk on its outstanding borrowings. Changes in interest rates will affect future interest cash flows on
floating-rate debt and the fair value of fixed-rate borrowings.
The earnings of the Group are sensitive to changes in interest rates in respect of floating-rate borrowings. As at 31 December 2023, 10%
(2022: 29%) of the Group’s borrowings were at floating interest rates. The interest rate profile of the Group’s interest-bearing borrowings was
as follows.
US Dollar
UK Sterling
£m
—
(100.0)
£m
(626.8)
(300.0)
£m
(626.8)
(400.0)
£m
£m
(338.9)
(826.6)
(1,165.5)
—
—
—
2023
2022
Floating-rate
Fixed-rate
Total
Floating-rate
Fixed-rate
Total
£m
Sensitivity to interest rates
Based on borrowings at 31 December 2023, a 1% increase in interest rates would have a £1.0m (2022: £3.4m) impact on the profit before tax
and amortisation of the Group. This assumes that the change in interest rates is effective from the beginning of the period and that all other
variables are constant throughout the period.
The Weir Group PLC Annual Report and Financial Statements 2023
205
Strategic Report
Governance
Financial Statements
Additional Information
Notes to the Group Financial Statements
continued
Liquidity risk
Liquidity risk is the risk that the Group is unable to meet its financial liabilities as they fall due.
Liquidity risk is managed by monitoring forecast and actual cash flows and ensuring that sufficient committed facilities are in place to meet
possible downside scenarios. The Group’s objective is to maintain a balance between continuity of funding and flexibility through the use of
fixed-rate loan notes, bank loans and bank overdrafts. Further details of the Group’s borrowing facilities are disclosed in note 20.
The tables below show only the financial liabilities of the total Group by maturity. The amounts disclosed in the table are undiscounted cash
flows and may therefore not agree to the amounts disclosed in the Consolidated Balance Sheet.
The Group manages its liquidity to ensure that it always has sufficient funding to grow the business and is able to meet its obligations as they
fall due.
Less than 1
year
1 to 2 years
2 to 5 years
More than 5
years
Year ended 31 December 2023
Total Group
Forward foreign currency contracts - net outflow
Cash flows relating to derivative financial liabilities
Trade & other payables excluding statutory liabilities & deferred income
Leases
Bank overdrafts
Bank loans
Fixed-rate notes
Cash flows relating to non-derivative financial liabilities
Year ended 31 December 2022
Total Group
Forward foreign currency contracts - net outflow
Cash flows relating to derivative financial liabilities
£m
(1.4)
(1.4)
(469.3)
(33.4)
(259.8)
(5.8)
(34.4)
(802.7)
(804.1)
£m
(4.9)
(4.9)
Trade & other payables excluding statutory liabilities & deferred income
(501.4)
Leases
Bank overdrafts
Bank loans
Fixed-rate notes
Cash flows relating to non-derivative financial liabilities
(31.8)
(213.7)
(16.8)
(183.5)
(947.2)
(952.1)
£m
2.4
2.4
(0.6)
(26.1)
—
(5.8)
(34.4)
£m
—
—
—
£m
—
—
—
(45.1)
(34.2)
—
(113.4)
(995.6)
—
—
—
Total
£m
1.0
1.0
(469.9)
(138.8)
(259.8)
(125.0)
(1,064.4)
(66.9)
(1,154.1)
(34.2)
(2,057.9)
(64.5)
(1,154.1)
(34.2)
(2,056.9)
£m
0.1
0.1
(1.0)
£m
—
—
—
£m
—
—
—
(24.6)
(44.1)
(36.0)
—
(16.8)
(14.5)
—
(378.7)
(683.1)
—
—
—
Total
£m
(4.8)
(4.8)
(502.4)
(136.5)
(213.7)
(412.3)
(881.1)
(56.9)
(1,105.9)
(36.0)
(2,146.0)
(56.8)
(1,105.9)
(36.0)
(2,150.8)
Less than 1
year
1 to 2 years
2 to 5 years
More than 5
years
Credit risk
The Group is exposed to credit risk to the extent of non-payment by either its customers or the counterparties to its derivative financial instruments.
The Group’s credit risk is primarily attributable to its trade receivables with risk spread over a large number of countries and customers, with no
significant concentration of risk. Where appropriate, the Group endeavours to minimise risk by the use of trade finance instruments such as
letters of credit and insurance. In addition, applicable credit worthiness checks are undertaken with external credit rating agencies before
entering into contracts with customers and credit limits are set as appropriate and enforced. As shown in note 18, the trade receivables
presented in the balance sheet are net of the expected credit loss allowance. Refer to note 18 for details of the loss allowance calculation.
In certain circumstances, operating entities are permitted to make use of invoice discounting facilities, primarily customer supply chain
financing arrangements, to reduce counterparty credit risk. The arrangements are assessed to ensure the entity has transferred substantially all
the risks and rewards of ownership of the receivables, allowing the derecognition of the receivables in their entirety. The cash when received is
recognised as a working capital movement and presented in cash generated from operations. The total amount of receivable invoices
discounted at the year end and therefore derecognised was £33.0m (2022: £44.7m) and this is reflected in the working capital cash flows
section of note 26. The fees incurred as part of the invoice discounting programme are as shown in note 7.
The Group’s exposure to the credit risk of financial instruments is limited by the adherence to counterparty credit limits, and by only trading
with counterparties that have an investment grade credit rating or better at contract inception, based upon ratings provided by the major credit
rating agencies. Exposures to those counterparties are regularly reviewed and, when the market view of a counterparty’s credit quality
changes, adjusted as considered appropriate.
The maximum exposure to credit risk is equal to the carrying value of the financial assets of the Group.
The Weir Group PLC Annual Report and Financial Statements 2023
206
Strategic Report
Governance
Financial Statements
Additional Information
Notes to the Group Financial Statements
continued
31. Capital management
The primary objective of the Group’s capital management is to ensure that it maintains robust capital ratios in order to support its business and
maximise Shareholder value.
The Group manages its capital structure and makes adjustments in light of changes in economic conditions. To maintain or adjust the capital
structure, the Group may adjust the dividend payment to Shareholders, return capital to Shareholders or issue new shares. The Group’s banking
arrangements include bi-annual financial covenants based on adjusted net debt to EBITDA (not greater than 3.5) and adjusted interest cover
(not less than 3.5). The Group has complied with these covenants throughout the reporting period and monitors capital using the
following indicators.
Net debt to EBITDA cover – covenant basis
Net debt to EBITDA comprises net debt divided by operating profits from total operations before exceptional and other adjusting items,
intangibles amortisation, depreciation and excluding the impact of IFRS 16 ‘Leases’.
For the purposes of the covenants required by the Group’s lenders, net debt is to be converted at the exchange rate used in the preparation of
the Group’s Consolidated Income Statement and Consolidated Cash Flow Statement, i.e. average rate. In addition, results of businesses
acquired in the financial year have to be included as if the acquisitions occurred at the start of the financial year, while the results of businesses
disposed of in the year are to be excluded. During the prior year, the Group acquired Carriere Industrial Supply Limited and the impact is
reflected below.
The Group considers the ratio of net debt to EBITDA on a covenant basis to be the key metric from a capital management perspective. The
Group seeks to maintain the ratio between 0.5 to 1.5 times, with up to 2.0 times for acquisitions.
Net debt at average exchange rates (£m)
Adjusted EBITDA from continued operations (note 3) (£m)
Adjustment for IFRS 16 (£m)
Adjustment for Carriere Industrial Supply acquisition (£m)
Adjusted EBITDA – covenant basis (£m)
Net debt to adjusted EBITDA cover (ratio)
2023
573.9
542.5
(35.8)
—
506.7
1.1
2022
663.0
478.9
(34.6)
0.7
445.0
1.5
Interest cover – covenant basis
Interest cover comprises adjusted operating profit from total operations divided by adjusted net finance costs (excluding other finance costs)
and excluding the impact of IFRS 16 ‘Leases’.
Adjusted EBITA from continuing operations (note 3) (£m)
Adjustment to exclude the impact of IFRS 16 (£m)
Adjustment for Carriere Industrial Supply acquisition (£m)
Operating profit – covenant basis (£m)
Adjusted net finance costs (excluding other finance costs) – covenant basis (£m)
Interest cover (ratio) – covenant basis
2023
471.0
(4.2)
—
466.8
44.0
10.6
2022
400.5
(3.2)
0.5
397.8
42.0
9.5
Gearing ratio
Gearing comprises net debt divided by total equity. Net debt comprises cash and short-term deposits and interest-bearing loans and borrowings
(note 26).
Net debt (£m)
Total equity (£m)
Gearing ratio (%)
2023
690.1
1,699.7
40.6
2022
797.2
1,737.9
45.9
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Additional Information
Notes to the Group Financial Statements
continued
32. Exchange rates
The principal exchange rates applied in the preparation of these financial statements were as follows.
Average rate (per £)
US Dollar
Australian Dollar
Euro
Canadian Dollar
Chilean Peso
South African Rand
Brazilian Real
Chinese Yuan
Indian Rupee
Closing rate (per £)
US Dollar
Australian Dollar
Euro
Canadian Dollar
Chilean Peso
South African Rand
Brazilian Real
Chinese Yuan
Indian Rupee
2023
1.24
1.87
1.15
1.68
1,044.69
22.94
6.21
8.81
102.66
2023
1.28
1.87
1.15
1.69
1,124.43
23.30
6.19
9.06
105.96
2022
1.24
1.78
1.17
1.61
1,078.02
20.19
6.39
8.30
97.06
2022
1.21
1.77
1.13
1.64
1,026.77
20.61
6.39
8.34
100.05
33. Events after the balance sheet date
The Group reduced its Revolving Credit Facility from US$800m to US$600m in February 2024. There are no further post balance sheet events
requiring disclosure.
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Company Balance Sheet
at 31 December 2023
ASSETS
Non-current assets
Intangible assets
Property, plant & equipment
Investments in subsidiaries & loans
Deferred tax assets
Trade & other receivables
Retirement benefit plan assets
Total non-current assets
Current assets
Trade & other receivables
Derivative financial instruments
Cash & short-term deposits
Total current assets
Total assets
LIABILITIES
Current liabilities
Trade & other payables
Derivative financial instruments
Provisions
Total current liabilities
Non-current liabilities
Interest-bearing loans & borrowings
Derivative financial instruments
Deferred tax liabilities
Retirement benefit plan deficits
Total non-current liabilities
Total liabilities
NET ASSETS
CAPITAL & RESERVES
Share capital
Share premium
Merger reserve
Treasury shares
Capital redemption reserve
Special reserve
Hedge accounting reserve
Retained earnings
TOTAL EQUITY
31 December
2023
31 December
2022
Notes
£m
£m
3
4
5
6
7
8
7
9
10
9
12
11
9
6
8
13
13
13
13
13
13
0.1
9.7
4,062.4
19.8
34.2
30.1
4,156.3
194.8
14.3
27.3
236.4
4,392.7
1,294.4
14.3
6.0
1,314.7
1,266.4
2.3
7.3
0.8
1,276.8
2,591.5
1,801.2
32.5
582.3
332.6
(29.0)
0.5
1.8
(0.5)
881.0
1,801.2
0.2
9.9
4,013.1
11.9
44.1
50.0
4,129.2
137.4
22.2
61.1
220.7
4,349.9
1,021.8
22.2
0.1
1,044.1
1,572.0
—
12.5
—
1,584.5
2,628.6
1,721.3
32.5
582.3
332.6
(14.3)
0.5
1.8
—
785.9
1,721.3
In accordance with the concession granted under section 408 of the Companies Act 2006, the Income Statement and Statement of
Comprehensive Income of the Company have not been separately presented in these financial statements. The profit of the Company was
£215.0m (2022: £362.8m).
The financial statements on pages 209 to 223 were approved by the Board of Directors on 29 February 2024 and signed on its behalf by:
Jon Stanton
Director
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Strategic Report
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Financial Statements
Additional Information
Company Statement of Changes in Equity
for the year ended 31 December 2023
Notes to the Company Financial Statements
At 31 December 2021
Profit for the year
Remeasurements on defined
benefit plans
Tax relating to other
comprehensive income
Total net comprehensive
income for the year
Cost of share-based payments
inclusive of tax credit
Dividends (note 2)
Purchase of shares for employee
share plans
Exercise of share-based
payments
At 31 December 2022
Profit for the year
Cost of hedging taken to equity
on fair value hedges
Remeasurements on defined
benefit plans
Reclassification adjustments on
fair value hedges
Tax relating to other
comprehensive income
Total net comprehensive
(expense) income for the year
Cost of share-based payments
inclusive of tax credit
Dividends (note 2)
Purchase of shares for employee
share plans
Exercise of share-based
payments
At 31 December 2023
Share
capital
Share
premium
Merger
reserve
Treasury
shares
£m
32.5
£m
582.3
£m
332.6
£m
(5.3)
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
32.5
582.3
332.6
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
32.5
582.3
332.6
—
—
—
—
—
—
(20.0)
11.0
(14.3)
—
—
—
—
—
—
—
—
(24.0)
9.3
(29.0)
Capital
redemption
reserve
Special
reserve
Hedge
accounting
reserve
Retained
earnings
Total
equity
£m
0.5
—
—
—
—
—
—
—
—
0.5
—
—
—
—
—
—
—
—
—
£m
1.8
—
—
—
—
—
—
—
—
1.8
—
—
—
—
—
—
—
—
—
—
0.5
—
1.8
£m
—
—
—
—
—
—
—
—
—
—
—
£m
448.4
362.8
£m
1,392.8
362.8
57.9
57.9
(14.4)
(14.4)
406.3
406.3
8.9
(66.7)
8.9
(66.7)
—
(20.0)
(11.0)
785.9
215.0
—
1,721.3
215.0
(0.8)
—
(0.8)
—
(29.0)
(29.0)
0.1
0.2
—
7.2
0.1
7.4
(0.5)
193.2
192.7
• IFRS 17 'Insurance contracts' as amended in December 2021;
—
—
—
—
(0.5)
7.1
7.1
(95.9)
(95.9)
—
(24.0)
(9.3)
881.0
—
1,801.2
• Definition of Accounting Estimates - amendments to IAS 8;
• International Tax Reform - Pillar Two Model Rules - amendments to IAS 12;
• Deferred Tax related to Assets and Liabilities arising from a Single Transaction - amendments to IAS 12; and.
• Disclosure of Accounting Policies - amendments to IAS 1 and IFRS Practice Statement 2.
The amendments listed above are not considered to have a material impact on the financial statements.
The following new accounting standards and interpretations have been published but are not mandatory for 31 December 2023:
1. Accounting policies
Authorisation of financial statements and statement of compliance
The company financial statements of The Weir Group PLC (the ‘Company’) for the year ended 31 December 2023 (‘2023’) were approved and
authorised for issue in accordance with a resolution of the Directors on 29 February 2024. The comparative information is presented for the
The Weir Group PLC is a public limited company limited by shares and incorporated in Scotland, United Kingdom and is listed on the London
The company financial statements of The Weir Group PLC have been prepared on a going concern basis under the historic cost convention and
in accordance with FRS 101 and applied in accordance with the provisions of the Companies Act 2006. These financial statements are
presented in Sterling. All values are rounded to the nearest 0.1 million pounds (£m) except where otherwise indicated. The following disclosure
exemptions from the requirements of IFRS have been consistently applied in the preparation of these financial statements, in accordance with
• Disclosures required by paragraphs 45(b) and 46-52 of IFRS 2 ‘Share-based payment’ can be found in note 28 to the Group financial
• IFRS 7 ‘Financial instruments: disclosures’ exemption has been taken as a result of the disclosures in note 30 to the Group financial
year ended 31 December 2022 (‘2022’).
Stock Exchange.
Basis of preparation
FRS 101:
statements;
statements;
• IAS 7 ‘Statement of cash flows’;
• Disclosure of key management compensation as required by paragraph 17 of IAS 24 ‘Related party disclosures’;
• Disclosure of related party transactions with wholly owned subsidiaries as required by IAS 24 ‘Related party disclosures’;
• Paragraph 38 of IAS 1 ‘Presentation of financial statements’ comparative information requirements in respect of paragraph 79(a)(iv) of IAS 1;
paragraph 73(e) of IAS 16 ‘Property, plant and equipment’; and paragraph 118(e) of IAS 38 ‘Intangible assets’;
• Paragraph 10(d), 10(f), 16, 38A, 38B, 38C, 38D, 40A, 40B, 40C, 40D, 111 and paragraphs 134-136 of IAS 1 ‘Presentation of financial
statements’; and
• Paragraphs 52 and 58 of IFRS 16 ‘Leases’.
The Company is the parent of the group of companies ultimately owned by the Company and known as the Weir Group (the "Group"). Its
principal activity is to act as a holding company for the Group and perform the head office function.
The accounting policies which follow are consistent with those of the previous period with the exception of the following standards,
amendments and interpretations which are effective for the year ended 31 December 2023:
• Amendments to IAS 1 - Classification of liabilities as current or non-current;
• Amendments to IAS 1 - Non-current liabilities with covenants;
• Amendments to IAS 21 - Lack of exchangeability;
• Amendments to IAS 7 and IFRS 7 - Supplier finance arrangements; and
• Amendments to IFRS 16 - Lease liability in a sale and leaseback.
These amendments have not been early adopted by the Company. These standards are not expected to have a material impact on the
Company in the current or future reporting periods or on foreseeable future transactions.
Use of estimates and judgements
The Company’s material accounting policy information is set out below. The preparation of the Company Financial Statements, in conformity
with FRS 101, requires management to make judgements that affect the application of accounting policies and estimates that impact the
reported amounts of assets, liabilities, income and expense.
Management bases these judgements and estimates on a combination of past experience, professional expert advice and other evidence that
is relevant to each individual circumstance. Actual results may differ from these judgements and estimates, which are reviewed on an ongoing
basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised and in any future periods affected.
Critical estimates
The area where management considers the more complex estimates are required is in respect of retirement benefits. The assumptions
underlying the valuation of retirement benefit assets and liabilities include discount rates, inflation rates and mortality assumptions which are
based on actuarial advice. Changes in these assumptions could have a material impact on the measurement of the Company’s retirement
benefit obligations. Sensitivities to changes in key assumptions are provided in note 8.
Foreign currency translation
The presentational and functional currency of the Company is Sterling. Transactions denominated in foreign currencies are translated into the
Company’s functional currency at the exchange rate ruling on the date of the transaction. Monetary assets and liabilities denominated in foreign
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Financial Statements
Additional Information
Notes to the Company Financial Statements
1. Accounting policies
Authorisation of financial statements and statement of compliance
The company financial statements of The Weir Group PLC (the ‘Company’) for the year ended 31 December 2023 (‘2023’) were approved and
authorised for issue in accordance with a resolution of the Directors on 29 February 2024. The comparative information is presented for the
year ended 31 December 2022 (‘2022’).
The Weir Group PLC is a public limited company limited by shares and incorporated in Scotland, United Kingdom and is listed on the London
Stock Exchange.
Basis of preparation
The company financial statements of The Weir Group PLC have been prepared on a going concern basis under the historic cost convention and
in accordance with FRS 101 and applied in accordance with the provisions of the Companies Act 2006. These financial statements are
presented in Sterling. All values are rounded to the nearest 0.1 million pounds (£m) except where otherwise indicated. The following disclosure
exemptions from the requirements of IFRS have been consistently applied in the preparation of these financial statements, in accordance with
FRS 101:
• Disclosures required by paragraphs 45(b) and 46-52 of IFRS 2 ‘Share-based payment’ can be found in note 28 to the Group financial
statements;
• IFRS 7 ‘Financial instruments: disclosures’ exemption has been taken as a result of the disclosures in note 30 to the Group financial
statements;
• IAS 7 ‘Statement of cash flows’;
• Disclosure of key management compensation as required by paragraph 17 of IAS 24 ‘Related party disclosures’;
• Disclosure of related party transactions with wholly owned subsidiaries as required by IAS 24 ‘Related party disclosures’;
• Paragraph 38 of IAS 1 ‘Presentation of financial statements’ comparative information requirements in respect of paragraph 79(a)(iv) of IAS 1;
paragraph 73(e) of IAS 16 ‘Property, plant and equipment’; and paragraph 118(e) of IAS 38 ‘Intangible assets’;
• Paragraph 10(d), 10(f), 16, 38A, 38B, 38C, 38D, 40A, 40B, 40C, 40D, 111 and paragraphs 134-136 of IAS 1 ‘Presentation of financial
statements’; and
• Paragraphs 52 and 58 of IFRS 16 ‘Leases’.
The Company is the parent of the group of companies ultimately owned by the Company and known as the Weir Group (the "Group"). Its
principal activity is to act as a holding company for the Group and perform the head office function.
The accounting policies which follow are consistent with those of the previous period with the exception of the following standards,
amendments and interpretations which are effective for the year ended 31 December 2023:
• IFRS 17 'Insurance contracts' as amended in December 2021;
• Definition of Accounting Estimates - amendments to IAS 8;
• International Tax Reform - Pillar Two Model Rules - amendments to IAS 12;
• Deferred Tax related to Assets and Liabilities arising from a Single Transaction - amendments to IAS 12; and.
• Disclosure of Accounting Policies - amendments to IAS 1 and IFRS Practice Statement 2.
The amendments listed above are not considered to have a material impact on the financial statements.
The following new accounting standards and interpretations have been published but are not mandatory for 31 December 2023:
• Amendments to IAS 1 - Classification of liabilities as current or non-current;
• Amendments to IAS 1 - Non-current liabilities with covenants;
• Amendments to IAS 21 - Lack of exchangeability;
• Amendments to IAS 7 and IFRS 7 - Supplier finance arrangements; and
• Amendments to IFRS 16 - Lease liability in a sale and leaseback.
These amendments have not been early adopted by the Company. These standards are not expected to have a material impact on the
Company in the current or future reporting periods or on foreseeable future transactions.
Use of estimates and judgements
The Company’s material accounting policy information is set out below. The preparation of the Company Financial Statements, in conformity
with FRS 101, requires management to make judgements that affect the application of accounting policies and estimates that impact the
reported amounts of assets, liabilities, income and expense.
Management bases these judgements and estimates on a combination of past experience, professional expert advice and other evidence that
is relevant to each individual circumstance. Actual results may differ from these judgements and estimates, which are reviewed on an ongoing
basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised and in any future periods affected.
Critical estimates
The area where management considers the more complex estimates are required is in respect of retirement benefits. The assumptions
underlying the valuation of retirement benefit assets and liabilities include discount rates, inflation rates and mortality assumptions which are
based on actuarial advice. Changes in these assumptions could have a material impact on the measurement of the Company’s retirement
benefit obligations. Sensitivities to changes in key assumptions are provided in note 8.
Foreign currency translation
The presentational and functional currency of the Company is Sterling. Transactions denominated in foreign currencies are translated into the
Company’s functional currency at the exchange rate ruling on the date of the transaction. Monetary assets and liabilities denominated in foreign
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Additional Information
Notes to the Company Financial Statements
continued
currencies are retranslated at the exchange rate ruling on the balance sheet date. Currency translation differences are recognised in the
Income Statement.
Revenue recognition
Revenue is the consideration received or receivable which reflects the amount expected to be received, mainly the transaction price. Revenue
will only be recognised when the fulfilment of performance obligations is achieved. Revenue mainly relates to transactions with other entities
within the Group, primarily in relation to management recharges.
Property, plant & equipment
Property, plant and equipment comprises owned assets and right-of-use assets that do not meet the definition of investment property.
Owned assets
Owned property, plant and equipment is stated at cost less accumulated depreciation and any recognised impairment losses. Depreciation of
property, plant and equipment is provided on a straight-line basis so as to charge the cost less residual value, to the Income Statement over the
expected useful life of the asset concerned, and is in the following ranges:
Long leasehold land and buildings
20 years
Office and computer equipment
3 – 10 years
Right-of-use asset and lease liability
At inception of a contract, the Company assess whether the contract is, or contains, a lease. A contract is, or contains, a lease if the contract
conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract
conveys the right to control the use of an identified asset, the Company assesses whether it has both the right to obtain substantially all of the
economic benefits from use of the identified asset and the right to direct the use of the identified asset throughout the period of use.
The Company recognises a lease liability and right-of-use asset at the lease commencement date.
The lease liability is initially measured as the present value of the lease payments that are not paid at the commencement date, discounted
using the interest rate implicit in the lease, or where the interest rate implicit in the lease cannot be readily determined, the Company’s
incremental borrowing rate. Generally, the Company uses its incremental borrowing rate as the discount rate.
Lease payments consist of the following components:
• fixed payments, including in-substance fixed payments, less any lease incentives receivable;
• variable lease payments that depend on an index or a rate;
• amounts expected to be payable by the lessee under residual value guarantees;
• the exercise price of a purchase option (if the lessee is reasonably certain to exercise that option); and
• payments of penalties for terminating the lease (if the lease term reflects the lessee exercising the option to terminate the lease).
The Company’s incremental borrowing rate is calculated by taking the Government borrowing rate in any given currency and adding the
estimated Company credit spreads for a variety of tenors. An interpolation is performed to obtain one rate for each of the major lease
currencies based on the weighted average life of the lease book.
The right-of-use asset is measured as equal to the lease liability and adjusted for:
• lease payments made to the lessor at or before the commencement date;
• lease incentives received;
• initial direct costs associated with the lease; and
• an initial estimate of restoration costs.
The right-of-use asset is depreciated using the straight-line method over the lease term. In addition, the right-of-use asset is periodically
reduced by any impairment losses.
The Company has adopted the exemption available for low value assets, with payments being recognised on a straight-line basis over the lease
term. Leases relating to laptops, desktop computers, mobile phones, photocopiers, printers and other office equipment, where the asset value
is less than £3,500 or the local currency equivalent have been treated as ‘low value’. Where the lease contract meets both ‘short-term’ and ‘low
value’ exemptions, the lease is reported within expenses relating to short-term leases.
For each lease, the lease term has been calculated as the non-cancellable period of the lease contract, except where the Company is
reasonably certain that it will exercise contractual extension options. In assessing whether a lessee is reasonably certain to exercise an option
to extend a lease, or not to exercise an option to terminate a lease, the Company shall consider all relevant facts and circumstances that create
an economic incentive for the lessee to exercise the option to extend the lease, or not to exercise the option to terminate the lease. In certain
circumstances the Company will refer to the five-year Strategic Plan period as an appropriate period to consider whether the ‘reasonably
certain’ criteria are met.
Intangible assets
Intangible assets are stated at cost less accumulated amortisation and any recognised impairment losses.
The expected useful lives of acquired intangible assets are as follows:
Purchased software
4 - 8 years
Software as a Service (SaaS) arrangements provide the Company with the right to access cloud-based software applications over a contractual
period. The software remains the intellectual property of the developer and as a result the Company does not recognise an intangible asset in
relation to subscription fees and costs incurred to customise or configure the software. The related costs are recognised in the Income
Statement when the service is received.
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Additional Information
Notes to the Company Financial Statements
continued
Costs incurred to enhance or develop an existing intangible asset or develop new software code which meet the definition and recognition
criteria of an intangible asset are capitalised as intangible software assets. Amortisation is recognised over the expected useful life of
the software.
Investments
Investments in subsidiaries are held at cost less accumulated impairment losses.
Loans are carried at amortised cost using the effective interest method.
Impairment of non-current assets
All non-current assets are tested for impairment whenever events or circumstances indicate that their carrying values might be impaired such
as a significant change in the market or a deviation from budget in the year.
An impairment loss is recognised to the extent that an asset’s carrying value exceeds its recoverable amount, which represents the higher of
the asset’s fair value less costs to sell and its value in use. An asset’s value in use represents the present value of the future cash flows
expected to be derived from the asset. Where it is not possible to estimate the recoverable amount of an individual asset, the impairment test
is conducted for the cash generating unit to which it belongs. The value in use calculation is based on discounted cash flows from the Board
approved Budget and Strategic Plan prepared in the final quarter of 2023. Cash flows beyond the five-year period are extrapolated using an
estimated growth rate that is appropriate for the geographic location of the asset.
Impairment losses are recognised in the Income Statement. Impairment losses recognised in previous periods for an asset other than goodwill
are reversed if there has been a change in the estimates used to determine the asset’s recoverable amount. The carrying amount of an asset
shall not be increased above the carrying amount that would have been determined had no impairment loss been recognised for the asset in
prior periods.
Post-employment benefits
Post-employment benefits comprise pension benefits provided to certain current and former employees in the UK.
For defined benefit pension plans, the annual service cost is calculated using the projected unit credit method and is recognised over the future
service lives of participating employees, in accordance with the advice of qualified actuaries. Current service cost and administration expenses
are recognised in operating costs and net interest on the net pension liability is recognised in finance costs.
The finance cost recognised in the Income Statement in the period reflects the net interest on the net pension liability. This represents the
change in the net pension liability resulting from the passage of time, and is determined by applying the discount rate to the opening net
liability, taking into account employer contributions paid into the plan, and hence reducing the net liability, during the period.
Past service costs resulting from enhanced benefits are recognised immediately in the Income Statement. Actuarial gains and losses,
which represent differences between interest on the plan assets, experience on the benefit obligation and the effect of changes in actuarial
assumptions, are recognised in full in other comprehensive income in the period in which they occur.
The defined benefit liability or asset recognised in the balance sheet comprises the net total for each plan of the present value of the benefit
obligation, using a discount rate based on yields at the balance sheet date on appropriate high-quality corporate bonds that have maturity dates
approximating the terms of the Company’s obligations and are denominated in the currency in which the benefits are expected to be paid,
minus the fair value of the plan assets, if any, at the balance sheet date. The balance sheet amount recognised is limited to the present value
of economic benefits which the Company expects to recover by way of refunds or a reduction in future contributions. In order to calculate the
present value of economic benefits, consideration is also given to any minimum funding requirements.
For defined contribution plans, the cost represents the Company’s contributions to the plans and these are charged to the Income Statement
in the period in which they fall due.
Share-based payments
Equity settled share-based incentives are provided to employees under the Group’s Share Reward Plan (SRP), formerly the Long Term
Incentive Plan (LTIP), the Weir ShareBuilder Plan (WSBP) and as a consequence of occasional one-off conditional awards made to employees.
The fair value of SRP awards and one-off conditional awards at the date of the grant is calculated using appropriate option pricing models and the cost is
recognised on a straight-line basis over the vesting period. Adjustments are made to reflect expected and actual forfeitures during the vesting period
due to failure to satisfy service or performance conditions where applicable. The conditions of the SRP for the Executive Directors, which took effect in
2018 are summarised in the Directors’ Remuneration Policy, which can be found on the Company’s website at www.corporategovernance.weir.
The conditions of the SRP for Senior Management are summarised in note 28 of the Group Financial Statements.
The fair value of WSBP awards at grant date is calculated as the share price at the date of the grant less an adjustment for loss of reinvestment
return on the dividend equivalent. There are no performance conditions attached to these awards, but participants who leave the Company prior
to vesting lose their right to the awards. The terms of the share awards granted under the WSBP are set out on the plan’s website at
www.sharebuilder.weir.
Financial assets & liabilities
The Company’s principal financial assets and liabilities, other than derivatives, comprise bank overdrafts, short-term borrowings, loans and
fixed-rate notes, cash and short-term deposits. The Company also has other financial assets and liabilities, such as trade receivables and trade
payables which arise directly from its operations.
A financial asset is generally derecognised when the contract that gives rise to it is settled, sold, cancelled or expires.
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. Where an existing financial
liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially
modified, such an exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability, such that
the difference in the respective carrying amounts together with any costs or fees incurred are recognised in profit or loss. Under IFRS 9
'Financial instruments', where the modification is not substantial, the modified cash flows are discounted at the original effective interest rate
to determine a revised carrying amount of the liability, with any difference in carrying amount recognised in the Income Statement.
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Additional Information
Notes to the Company Financial Statements
continued
Derivative financial instruments
The Company uses derivative financial instruments, principally forward foreign currency contracts, to reduce its exposure to exchange rate
movements. The Company does not hold or issue derivatives for speculative or trading purposes.
Derivative financial instruments are recognised as assets or liabilities measured at their fair values at the balance sheet date. The fair value of
forward foreign currency contracts is calculated as the present value of the estimated future cash flows based on spot and forward foreign
exchange rates. The fair value of interest rate swaps and cross-currency swaps is calculated as the present value of the estimated future cash
flows based on interest rate curves, spot foreign exchange rates and counterparty and own credit risk. Changes in their fair values have been
recognised in the Income Statement and presented within operating profit or finance costs dependent on their nature.
Where the hedging relationship is classified as a fair value hedge, the carrying amount of the hedged asset or liability will be adjusted by the increase or
decrease in its fair value attributable to the hedged risk and the resulting gain or loss will be recognised in the Income Statement where, to the extent
that the hedge is effective, it will be offset by the change in the fair value of the hedging instrument.
For fair value hedges in which the spot element of the hedging instrument has been designated to the hedge, the changes in the forward
element of the hedging instrument is recognised within other comprehensive income in the costs of hedging reserve within equity.
Treasury shares
The Weir Group PLC shares held by the Company, or those held in Trust, are classified in Shareholders’ equity as treasury shares and are
recognised at cost. Consideration received for the sale of such shares is also recognised in equity, with any difference between the proceeds
from sale and the original cost being taken directly to revenue reserves. No gain or loss is recognised in the total comprehensive income on the
purchase, sale, issue or cancellation of equity shares.
Taxation
Current tax is the amount of tax payable or recoverable in respect of the taxable profit or loss for the period.
Deferred tax liabilities represent tax payable in future periods in respect of taxable temporary differences. Deferred tax assets represent tax
recoverable in future periods in respect of deductible temporary differences, the carry forward of unutilised tax losses and the carry forward of
unused tax credits. Deferred tax is measured on an undiscounted basis using the tax rates and laws that have been enacted or substantively
enacted at the balance sheet date and are expected to apply when the deferred tax asset is realised or the deferred tax liability is settled.
Deferred tax is recognised on temporary differences between the carrying amount of an asset or liability in the balance sheet and its tax base
with the following exceptions:
• Deferred tax is provided on temporary differences arising on investments in subsidiaries and joint ventures, except where the timing of the
reversal of the temporary difference can be controlled and it is probable that the temporary difference will not reverse in the foreseeable
future.
• A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the asset can
be utilised.
Current and deferred tax is recognised in the Income Statement except if it relates to an item recognised directly in equity, in which case it is
recognised directly in equity.
2. Profit attributable to the Company
The profit dealt with in the financial statements of the Company was £215.0m (2022: £362.8m). The corporate tax credit dealt with in the
accounts of the Company was £26.5m (2022: £6.3m).
Dividends paid & proposed
Declared & paid during the year
Equity dividends on ordinary shares
Final dividend for 2022: 19.3p (2021: 12.3p)
Interim dividend for 2023: 17.8p (2022: 13.5p)
Proposed for approval by Shareholders at the Annual General Meeting
Final dividend for 2023: 20.8p (2022: 19.3p)
2023
£m
49.9
46.0
95.9
53.6
2022
£m
31.8
34.9
66.7
49.9
The current year dividend is in line with the Group's capital allocation policy announced in the 2020 Annual Report and Financial Statements,
under which the Group intends to distribute 33% of adjusted earnings by way of dividend. As a result the Group's dividend cover in 2023 is 3.0
times.
The proposed dividend is based on the number of shares in issue, excluding treasury shares held, at the date that the financial statements were
approved and authorised for issue. The final dividend may differ due to increases or decreases in the number of shares in issue between the
date of approval of this Annual Report and Financial Statements and the record date for the final dividend.
Employee benefits expense
Wages & salaries
Social security costs
Defined contribution plans
Share-based payments – equity settled transactions
The Weir Group PLC Annual Report and Financial Statements 2023
214
2023
£m
32.8
4.4
1.0
7.0
45.2
2022
£m
30.8
4.3
0.9
8.0
44.0
Strategic Report
Governance
Financial Statements
Additional Information
Notes to the Company Financial Statements
continued
During 2023, the average number of people employed by the Company was 301 (2022: 294).
Directors
Details of Directors’ remuneration, benefits and SRP awards are included in the Remuneration report on pages 109 to 132, and in note 29
to the Group Consolidated Financial Statements.
Auditors’ remuneration
The total fees payable by the Company to PricewaterhouseCoopers LLP (PwC) for work performed in respect of the audit of the Company were
£35,000 (2022: £33,200). Fees paid to PwC for non-audit services to the Company itself are not disclosed in these financial statements as the
Group’s Consolidated Financial Statements, in which the Company is included, are required to disclose such fees on a consolidated basis.
Fees payable by the Company to Ernst & Young LLP for work performed in respect of the audit of the pension scheme were £51,500 (2022: £41,000).
3. Intangible assets
Cost
At beginning and end of the year
Accumulated amortisation
At 31 December 2022
Charge for the year
At 31 December 2023
Net book value at 31 December 2022
Net book value at 31 December 2023
4. Property, plant & equipment
Cost
At 31 December 2022
Additions
At 31 December 2023
Accumulated depreciation
At 31 December 2022
Charge for the year
At 31 December 2023
Net book value at 31 December 2022
Net book value at 31 December 2023
Purchased software
total
£m
0.7
0.5
0.1
0.6
0.2
0.1
Total
£m
14.8
1.3
16.1
4.9
1.5
6.4
9.9
9.7
Owned long
leasehold land
& buildings
Owned office &
computer
equipment
Right-of-use
land & buildings
Right-of-use
plant &
equipment
£m
£m
£m
£m
3.7
—
3.7
1.3
0.2
1.5
2.4
2.2
2.8
1.3
4.1
1.5
0.7
2.2
1.3
1.9
8.1
—
8.1
2.0
0.5
2.5
6.1
5.6
0.2
—
0.2
0.1
0.1
0.2
0.1
—
Right-of-use assets
The Company leases buildings and IT equipment. The current and non-current lease liabilities are disclosed in note 11. The following table
shows the breakdown of the lease expense between amounts charged to operating profit and amounts charged to finance costs in the year.
Depreciation of right-of-use assets
Charge to operating profit
Finance cost – interest expense related to lease liabilities
Charge to profit before tax
The total cash outflow in the year is £0.8m (2022: £0.8m).
2023
£m
0.6
0.6
0.2
0.8
2022
£m
0.5
0.5
0.2
0.7
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Governance
Financial Statements
Additional Information
Notes to the Company Financial Statements
continued
5. Investments in subsidiaries & loans
Cost
At 31 December 2022
Additions
Settlement
Exchange
At 31 December 2023
Impairment
At beginning and end of the year
Net book value at 31 December 2022
Net book value at 31 December 2023
Subsidiaries
shares
£m
Loans
£m
Total
£m
4,386.4
1,388.4
5,774.8
573.9
—
—
4,960.3
1,757.2
2,629.2
3,203.1
41.7
(539.0)
(27.3)
863.8
4.5
1,383.9
859.3
615.6
(539.0)
(27.3)
5,824.1
1,761.7
4,013.1
4,062.4
The subsidiaries and joint ventures of the Company are listed on pages 224 to 230.
During 2023, the Company carried out a corporate restructure for both external and internal financing purposes. This resulted in a series of
investments of £573.9m, in wholly owned subsidiaries, to reduce intercompany loans and outstanding interest balances and to fund a foundry
project in China.
The loan balances above are amounts owed by subsidiaries and represent long-term funding arrangements under term or cash management
loans. Additions and settlements are movements on these loan facilities due to changes in individual subsidiary funding requirements.
Over the term of the loans, the Company accounts for its credit risk by appropriately providing for expected credit losses on a timely basis.
The majority of the Company’s loans are repayable on demand by the Company. In calculating the expected credit loss allowance of repayable
on demand loans, the Company considers the financial position and internal forecasts of each subsidiary and their ability to repay on request,
or over time. For those loans repayable on maturity, expected credit losses are calculated using market-implied probabilities of default and loss-
given-default estimations.
The Company considers the probability of default upon initial recognition of an asset and subsequently whether there has been a significant
increase in credit risk on an ongoing basis throughout each reporting year. To assess whether there is a significant increase in credit risk,
the Company compares the risk of a default occurring on the asset as at the reporting date with the risk of default as at the date of initial
recognition. The primary indicators considered are actual or expected significant adverse changes in business and financial conditions that
are expected to cause a significant change to the borrower’s ability to meet its obligations.
Independent of the primary indicators above, a significant increase in credit risk is presumed if a debtor is more than 30 days past due in
making a contractual payment. A default on a financial asset is considered to occur when the counterparty fails to make contractual payments
within 90 days of when they fall due. A write-off is considered to be required when there is no reasonable expectation of recovery, or when
a debtor fails to make contractual payments greater than 120 days past due. Where loans or receivables have been written off, the Company
continues to engage in enforcement activity to attempt to recover the receivable due. Where recoveries are made, these are recognised in
the Income Statement.
As at 31 December 2023 and 31 December 2022, the loss allowances for all loans to subsidiaries were measured at an amount equal to
12 month expected credit losses.
The carrying value of loans and investments is considered to be supported by the value in use and market capitalisation of the Group.
The Weir Group PLC Annual Report and Financial Statements 2023
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Governance
Financial Statements
Additional Information
Notes to the Company Financial Statements
continued
6. Deferred tax
Deferred income tax assets
Other timing differences
Deferred income tax liabilities
Retirement benefits
2023
£m
19.8
19.8
(7.3)
(7.3)
2022
£m
11.9
11.9
(12.5)
(12.5)
Net deferred income tax
12.5
(0.6)
Deferred tax assets of £19.8m include £9.7m (2022: £10.0m) recognised in respect of losses suffered in preceding periods. The movement
in the year is a result of prior year adjustments. The deferred tax asset has been recognised on the basis that the losses can be carried forward
indefinitely and are available to surrender against UK taxable profits of the UK group in the future.
Deferred tax liabilities of £7.3m (2022: £12.5m) relate entirely to retirement benefits. The movement in the year is a direct result of the
movement in the UK pension plan during 2023.
7. Trade & other receivables
Trade and other receivables presented as non-current on the face of the Company balance sheet of £34.2m (2022: £44.1m) are in respect of
a prepayment recognised as a result of the pension funding partnership structure. Further information pertaining to this arrangement can be
found in note 8.
Amounts recoverable within one year:
Amounts owed by subsidiaries
Tax receivable
Other debtors
Prepayments & accrued income
2023
£m
144.6
38.4
6.5
5.3
194.8
2022
£m
104.9
24.4
3.0
5.1
137.4
Amounts owed by subsidiaries relate to management recharges in respect of support services provided. Intercompany balances are typically
managed on a Group basis, and the Company’s credit risk management practices reflect this. The Group applies the IFRS 9 'Financial
instruments' simplified approach to measuring expected credit losses, which uses a lifetime expected loss allowance for all such
trade receivables.
The amounts owed by subsidiaries do not carry an interest charge, and it is the Company’s expectation that materially all the amounts owed by
subsidiaries are fully recoverable over time. Expected credit losses at both 31 December 2023 and 31 December 2022 are therefore immaterial,
and there has been no material change to the expected loss allowance during the year.
8. Retirement benefits
At the balance sheet date, the Company has a funded defined benefit plan (the Main Plan) and an unfunded retirement benefit plan for retired
Executive Directors. The Company also operates a defined contribution plan, the contributions to which are in addition to those set out below,
and are charged directly to the Consolidated Income Statement.
For the defined benefit plans, benefits are related to service and final salary. The Main Plan closed to future accrual of benefits effective from 30 June 2015.
The weighted average duration of the expected benefit payments from the Main Plan is around 12 years.
The current funding target for the Main Plan is to maintain assets equal to the value of the accrued benefits. The Main Plan holds three
insurance policies which match the liabilities in respect of a significant proportion of deferred and retired pensioners.
The defined benefit plans expose the Company to a number of risks.
Uncertainty in benefit payments
The value of the Company’s liabilities for the defined benefit plans will ultimately depend on the amount of benefits paid out. This in turn will
depend on the level of inflation (for those benefits that are subject to some form of inflation protection) and how long individuals live. This risk
is significantly reduced through the insurance policies held.
Volatility in asset values
The Company is exposed to future movements in the values of assets held in the defined benefit plans to meet future uninsured
benefit payments.
Uncertainty in cash funding
The regulatory framework in the UK requires the Trustees and Company to agree upon the assumptions underlying the funding target, and then
to agree upon the necessary contributions required to recover any deficit at the valuation date. There is a risk to the Company that adverse
experience could lead to a requirement for the Company to make considerable contributions to recover any deficit. This risk is significantly
reduced through the insurance policies held. In addition, the Company is also exposed to adverse changes in pension regulation.
The Weir Group PLC Annual Report and Financial Statements 2023
217
Strategic Report
Governance
Financial Statements
Additional Information
Notes to the Company Financial Statements
continued
Assumptions
The significant actuarial assumptions used for accounting purposes reflect prevailing market conditions and are as follows.
Significant actuarial assumptions:
Discount rate (% pa)
Retail Prices Inflation (RPI) assumption (% pa)
Post-retirement mortality (life expectancies in years):
Current pensioners at 65 – male
Current pensioners at 65 – female
Future pensioners at 65 – male
Future pensioners at 65 – female
Other related actuarial assumptions:
Rate of increases for pensions in payment (% pa)
Pre 6 April 2006 service
Post 5 April 2006 service
Consumer Prices Inflation (CPI) assumption (% pa)
2023
2022
4.5
3.1
21.0
22.9
22.3
24.4
3.0
2.1
2.5
4.8
3.4
21.3
23.2
22.6
24.7
3.2
2.1
2.8
The assumptions used to determine end-of-year benefit obligations are also used to calculate the following year’s cost.
The post-retirement mortality assumptions allow for expected increases in longevity. The ‘current’ disclosures above relate to assumptions
based on longevity (in years) following retirement at the balance sheet date, with ‘future’ being that relating to a member retiring in 2044
(in 20 years' time).
The assets and liabilities of the plans are as follows.
Plan assets at fair value:
Equities (quoted)
Diversified Growth Funds (quoted)
Corporate bonds (quoted)
Government bonds (quoted)
Insurance policies (unquoted)
Private debt (unquoted)
Multi Asset Credit Funds
Cash (quoted)
Fair value of plan assets
Present value of funded obligations
Net asset for funded obligations
Present value of unfunded obligations
Net asset
Plans in surplus
Plans in deficit
2023
£m
—
—
—
170.8
336.4
37.1
39.7
8.7
592.7
(562.6)
30.1
(0.8)
29.3
30.1
(0.8)
2022
£m
48.3
36.6
36.6
168.4
219.9
56.3
36.0
8.0
610.1
(559.2)
50.9
(0.9)
50.0
50.9
(0.9)
Of the government bonds held at 31 December 2023, 75% (2022: 60%) are fixed interest bonds. The pension plans have not directly invested
in any of the Company’s own financial instruments, or in properties or other assets used by the Company.
The investment strategy for the UK is to primarily hold government bonds to meet the assessed value of the benefits promised for the non-
insured members, along with holding private debt and multi-asset credit funds. The insured members are backed by the insurance policies held
within the Scheme.
The Weir Group PLC Annual Report and Financial Statements 2023
218
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Governance
Financial Statements
Additional Information
Notes to the Company Financial Statements
continued
The change in net liabilities recognised in the Company Balance Sheet is comprised as follows.
Opening net assets (liabilities)
Expense credited (charged) to the Income Statement
Amount recognised in Statement of Comprehensive Income
Employer contributions
Closing net assets
2023
£m
50.0
2.0
(29.0)
6.3
29.3
The amounts recognised in the Income Statement and in the Statement of Comprehensive Income for the year are analysed as follows.
Recognised in the Income Statement
Administrative expenses
Included in operating profit
Interest on net pension asset (liability)
Total credit (expense) charged to the Income Statement
Recognised in the Statement of Comprehensive Income
Actual return on plan assets
Less: interest on plan assets
Other actuarial (losses) gains due to:
Changes in financial assumptions
Changes in demographic assumptions
Experience on benefit obligations
Actuarial (losses) gains recognised in the Statement of Comprehensive Income
2023
£m
(0.6)
(0.6)
2.6
2.0
12.5
(28.7)
(16.2)
(10.1)
7.2
(9.9)
(29.0)
2022
£m
(13.4)
(0.8)
57.9
6.3
50.0
2022
£m
(0.6)
(0.6)
(0.2)
(0.8)
(178.4)
(15.3)
(193.7)
261.5
4.4
(14.3)
57.9
Administration expenses are recognised in operating costs and interest on net pension liability is recognised in other finance costs.
Pension contributions are determined with the advice of independent qualified actuaries on the basis of regular valuations using the projected
unit method. The Company made special contributions of £6.2m in 2023 (2022: £6.2m) in addition to the Company’s regular contributions.
In 2015, the Company entered into a pension funding partnership structure under which it has contributed interests in a Scottish Limited
Partnership (SLP) for the Main Plan. The Main Plan’s interests in the SLP reduce the deficit on a funding basis, although the agreement will
not affect the position directly on an FRS 101 accounting basis as the investments held do not qualify as assets for FRS 101 purposes. As a
partner in the SLP, the Main Plan is entitled to receive a share of the profits of the SLP once a year for 15 years, subject to conditions being
met. The profits to be shared with the Plan will be reflected in the Company’s financial statements as a pension contribution.
The latest actuarial funding valuation of the Main Plan was completed in 2022. Under the agreed recovery plan, the Company has agreed to
contribute £6.2m in respect of years ending 31 December 2021 to 31 December 2029 inclusive. These contributions are primarily funded by
the income payments from the SLP described above. However, the contributions are subject to an annual review mechanism which states if
the Main Plan's funding level on a funding basis exceeds 105% then the contributions can be temporarily ceased. The 31 December 2022
funding basis funding level was above 105% thereby triggering a Switch-Off Event in terms of the pension funding partnership structure. As a
result, the £6.2m which would normally have been paid to the Main Plan in early 2024 will now not be paid.
The Company has taken legal advice regarding its UK arrangements to confirm the accounting treatment under IFRIC 14 'IAS 19 - The limit on a
defined benefit asset, minimum funding requirements and their interaction' with regard to recognition of a surplus and also recognition of a
minimum funding requirement. This confirmed that there is no requirement to adjust the balance sheet and that recognition of a current surplus
is appropriate on the basis that the Company has an unconditional right to a refund of a current (or projected future) surplus at some point in the
future. For the same reason, there is no requirement for the Company to adjust the balance sheet to recognise the future agreed deficit
recovery contributions. Having considered the position, taking account of the legal input received and noting that the Trustees of the UK
arrangements do not have discretionary powers to unilaterally wind down the schemes without cause, the Directors of the Company have
concluded that the Company has an unconditional right to a refund of any surplus.
The Company is aware of a case involving Virgin Media and NTL Pension Trustee, which could potentially lead to additional liabilities for some
pension schemes and sponsors, including (if applicable) the Company. This case is subject to appeal and the impact (if any) is not known and
will be assessed as relevant in future.
The total Company contributions for 2024 are expected to be £0.1m.
Changes in the present value of the defined benefit obligations are analysed as follows.
The Weir Group PLC Annual Report and Financial Statements 2023
219
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Governance
Financial Statements
Additional Information
Notes to the Company Financial Statements
continued
Opening defined benefit obligations
Interest on benefit obligations
Benefits paid
Actuarial (losses) gains due to:
Changes in financial assumptions
Changes in demographic assumptions
Experience on benefit obligations
Closing defined benefit obligations
Changes in the fair value of plan assets are analysed as follows.
Opening plan assets
Interest on plan assets
Employer contributions
Administrative expenses
Benefits paid
Actual return on plan assets less interest on plan assets
Closing plan assets
2023
£m
(560.1)
(26.1)
35.6
(10.1)
7.2
(9.9)
(563.4)
2023
£m
610.1
28.7
6.3
(0.6)
(35.6)
(16.2)
592.7
2022
£m
(830.2)
(15.5)
34.0
261.5
4.4
(14.3)
(560.1)
2022
£m
816.8
15.3
6.3
(0.6)
(34.0)
(193.7)
610.1
Sensitivity analysis
Changes in key assumptions can have a significant effect on the reported net retirement benefit obligation and the Income Statement expense
for 2024. The effects of changes in those assumptions are set out in the table below.
Discount rate
Effect on defined benefit obligation of a 1.0% change
Effect on net funding position of a 1.0% change
RPI inflation (and associated assumptions)
Effect on defined benefit obligation of a 1.0% change
Effect on net funding position of a 1.0% change
Life expectancy
Effect on defined benefit obligation of a 1 year change
Effect on net funding position of a 1 year change
Increase
Decrease
Increase
Decrease
2023
£m
57.2
31.3
(29.1)
(14.1)
(26.5)
(4.7)
2023
£m
(69.5)
(39.6)
29.7
14.3
26.5
4.7
2022
£m
58.6
44.3
(29.3)
(20.4)
(30.2)
(17.4)
2022
£m
(71.5)
(55.2)
31.3
22.0
30.2
17.4
The impact on the net funding position is significantly reduced as a result of the insurance policies held. In the absence of such policies, the
impact on the net funding position would be much closer to the significantly higher impact on the defined benefit obligation shown in the table.
These sensitivities have been calculated to show the movement in the defined benefit obligation and net funding position in isolation and
assume no other changes in market conditions at the accounting date. In practice, for example, a change in discount rate is unlikely to occur
without any movement in the value of the invested (non-insurance policy) assets held by the plans.
9. Derivative financial instruments
Current assets
Forward foreign currency contracts
Current liabilities
Forward foreign currency contracts
Non-current liabilities
Forward foreign currency contracts designated as fair value hedges
2023
£m
14.3
14.3
(14.3)
(14.3)
(2.3)
(2.3)
2022
£m
22.2
22.2
(22.2)
(22.2)
—
—
The figures in the above table include derivative financial instruments where the counterparty is a subsidiary of the Company.
Details of the hedging activities is provided in note 30 to the Group Financial Statements.
The Weir Group PLC Annual Report and Financial Statements 2023
220
Strategic Report
Governance
Financial Statements
Additional Information
Notes to the Company Financial Statements
continued
10. Trade & other payables
Bank overdrafts & short-term borrowings
Loans from subsidiaries (note 11)
Lease liability (note 11)
Amounts owed to subsidiaries
Tax payable
Other taxes & social security costs
Other creditors
Accruals & deferred income
11. Interest-bearing loans & borrowings
Amounts due are repayable as follows:
Less than one year:
Fixed-rate notes
Loans from subsidiaries
Lease liability
More than one year but not more than two years:
Loans from subsidiaries
Lease liability
More than two years but not more than five years:
Bank loans
Fixed-rate notes
Loans from subsidiaries
Lease liability
More than five years:
Loans from subsidiaries
Lease liability
Less current instalments due on:
Fixed-rate notes
Loans from subsidiaries
Lease liability
2023
£m
240.4
996.9
0.6
14.2
0.3
2.4
9.1
30.5
1,294.4
2023
£m
—
996.9
0.6
86.2
0.6
97.7
922.3
53.6
1.9
99.7
4.4
2,263.9
—
(996.9)
(0.6)
1,266.4
2022
£m
356.9
626.7
0.7
9.1
—
2.1
6.2
20.1
1,021.8
2022
£m
165.3
626.7
0.7
513.8
0.6
336.5
657.8
56.4
1.8
—
5.1
2,364.7
(165.3)
(626.7)
(0.7)
1,572.0
The loans from subsidiaries with a maturity date of less than one year are repayable in 2024 and have a weighted average interest rate of
3.95%. The loans for subsidiaries with a maturity date greater than one year and less than two years are repayable in 2025 and have an interest
rate of 5.58%. The loans for subsidiaries with a maturity date greater than two years and less than three years are repayable in 2026 and have
an interest rate of 2.85%. The loans for subsidiaries with a maturity date greater than five years and over are repayable in 2028 and have an
interest rate of 8.99%.
Details of the interest and repayment terms of the bank loans and fixed-rate notes can be found in note 20 to the Group Financial Statements.
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Additional Information
Notes to the Company Financial Statements
continued
12. Provisions
At 31 December 2022
Additions
Utilised
At 31 December 2023
Current 2023
Non-current 2023
At 31 December 2023
Current 2022
Non-current 2022
At 31 December 2022
Exceptional
items
£m
0.1
10.9
(5.0)
6.0
6.0
—
6.0
0.1
—
0.1
The opening balance relates to some residual costs for the sale of the Oil & Gas Division. During the year, there were additions for costs
associated with the Performance Excellence programme. The closing balance is predominantly costs related to the Performance
Excellence programme.
13. Share capital & reserves
Allotted, called up & fully paid
Ordinary shares of 12.5p each
Treasury shares
At the beginning of the year
Purchase of shares in respect of equity settled share-based payments
Utilised during the year in respect of equity settled share-based payments
At the end of the year
Equity settled share-based payments
Share awards outstanding at the end of the year
2023
£m
2022
£m
32.5
32.5
2023
Number
million
2022
Number
million
0.9
1.2
(0.4)
1.7
0.3
1.3
(0.7)
0.9
1.5
1.6
Merger reserve
The merger reserve relates to the issue of new equity as part of the consideration paid for an acquisition. Shares issued directly to ESCO
shareholders on 12 July 2018, as part of the total acquisition consideration, qualified for merger relief under Section 612 of the Companies
Act 2006 and resulted in an increase to the reserve of £323.2m. The remaining reserve balance of £9.4m relates to shares issued in part
consideration for the acquisition of Delta Industrial Valves Inc. during 2015.
Capital redemption reserve
The capital redemption reserve was created by a repurchase and cancellation of own shares during the 53 weeks ended 1 January 1999.
Special reserve
The premium of £1.8m arising on the issue of shares for the acquisition of the entire share capital of Liquid Gas Equipment Limited in 1988
has been credited to a special reserve in accordance with the merger relief provisions of the Companies Act 1985.
Hedge accounting reserve
This reserve records the portion of the gains or losses on hedging instruments used as cash flow and fair value hedges that are determined to
be effective.
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Financial Statements
Additional Information
Notes to the Company Financial Statements
continued
14. Guarantees & legal claims
Guarantees
The Company has given guarantees in relation to the bank and other borrowings of certain subsidiary companies amounting to £754.8m (2022:
£857.2m) of which £175.3m (2022: £298.6m) was utilised at 31 December 2023. These guarantees, recognised as IFRS 9 fair value, do not
have a material value at the balance sheet date and the likelihood of the guarantees being called upon is considered remote.
Legal claims
The Company and certain subsidiaries are, from time-to-time, party to legal proceedings and claims that arise in the normal course of business.
Provisions have been made where the Directors have assessed that a cash outflow is probable. All other claims are believed to be remote or
are not yet ripe.
15. Related party disclosures
The Company has taken advantage of the exemption under paragraph 8(k) of FRS 101 not to disclose transactions with related parties that are
wholly owned by a subsidiary of the Company. The following table provides the total amount of transactions that have been entered into with
non-wholly owned related parties for the relevant financial year and outstanding balances at the year end.
Related party
Weir ABF LP
Weir Minerals (India) Private Limited
Vulco S.A.
2023
2022
2023
2022
2023
2022
Group charges
Amounts
due by
£m
—
—
(0.1)
1.4
0.7
2.8
£m
57.3
53.5
—
0.3
—
0.5
16. Financial risk management objectives and policies
The description of the Group’s financial risk management objectives and policies is provided in note 30 to the Group Financial Statements.
These financial risk management objectives and policies also apply to the Company.
17. Events after the balance sheet date
The Group reduced its Revolving Credit Facility from US$800m to US$600m in February 2024. There are no further post balance sheet events
requiring disclosure.
The Weir Group PLC Annual Report and Financial Statements 2023
223
Strategic Report
Governance
Financial Statements
Additional Information
Subsidiary undertakings
Directly
Held By
PLC*
The subsidiary undertakings of the Company as at 31 December 2023 are noted below. Unless otherwise indicated, the Company’s
shareholdings are held indirectly.
Company Name
Alebras Aços e Peças Ltda. Brazil
Country
Registered Office address
2151 Avenida José Benassi, Sala B, Parque Industrial, CEP
13.213-085., Brazil
Class name
Ordinary
Aspir Pty Ltd
Australia
1-5 Marden Street, Artarmon NSW 2064, Australia
Ordinary
Bucyrus Blades de Mexico
S.A. DE C.V.
Bucyrus Blades Inc.
Bucyrus Blades of Canada
ULC
Carriere Industrial Supply
Limited
Mexico
United
States
Canada
Canada
CH Warman Asia Limited Malta
Calle 14, Manzana 4, Lote 4, Parque Industrial, Apartado
Postal 129, Atlacomulco, Mexico
Fixed;
Variable Capital
C T Corporation System, 4400 Easton Commons Way,
Suite 125, Columbus OH 43219, United States
1800 - 510 West Georgia Street, Vancouver BC V6B 0M3,
Canada
222 Bay Street, Suite 3000, P O Box 53, Toronto ON M5K
1E7, Canada
Level 2 West, Mercury Tower, The Exchange Financial &
Business Centre, Elia Zammit Street, St. Julian's, STJ
3155, Malta, STJ 3155, Malta
Common
Class A
Common
Common
Ordinary
% of
class
100
100
100
100
100
100
100
CIS First Nations Services
Inc.
Electric Steel Foundry
Company
Canada
United
States
222 Bay Street, Suite 3000, P O Box 53, Toronto ON M5K
1E7, Canada
Common
100
780 Commercial Street SE, Suite 100, Salem OR 97301,
United States
Fixed Capital
100
EnviroTech (Pty) Limited
South Africa
31 Isando Road, Isando, Gauteng, 1600, South Africa
Ordinary;
A Ordinary
Ordinary
ESCO
ESCO - Bucyrus Blades
Canada
ESCO (UK) Holdings
Limited
ESCO (UK) Limited
ESCO (Xuzhou) Trading
Company Limited
France
Canada
England and
Wales
England and
Wales
China
57 rue d’Amsterdam, 75008, Paris, France
1800 - 510 West Georgia Street, Vancouver BC V6B 0M3,
Canada
Corporate
Relationship %
Ings Road, Doncaster, DN5 9SN
Ings Road, Doncaster, DN5 9SN
Ordinary
Ordinary
West of Dazhai Road, , South of Dazhai Road and Cui
Zhuang South Road, High-tech Industrial Zone, Xuzhou
City, Jiangsu Province, China
Corporate
Relationship %
ESCO (Xuzhou) Wearparts
Co., Ltd.
China
Dazhai Road, south of Cui Zhuang Road and west of
Dazhai Roa, Tongshan Economic Development Zone,
Xuzhou City, Jiangsu Province, 221116, China
Corporate
Relationship %
100
ESCO Australia Holdings
Pty Limited
ESCO Belgium
ESCO Canada Finance
Company Inc.
Australia
25 Trade Street, Lytton, Queensland QLD 4178, Australia Ordinary
Belgium
Canada
Rue des Fours a Chaux 122, Zoning Industriel, 7080
Frameries, Belgium
Ordinary
1800 - 510 West Georgia Street, Vancouver BC V6B 0M3,
Canada
Common
ESCO Canada Ltd.
Canada
14648 134 Ave NW Edmonton AB T5L 4T4, Canada
Ordinary
ESCO Dunedin Pty Ltd
Australia
25 Trade Street, Lytton, Queensland QLD 4178, Australia Ordinary
ESCO Elecmetal Fundición
Limitada
Chile
Calle Miraflores, Numero 222, Piso veinticuatro, Santiago,
Chile
Corporate
Relationship %
ESCO Electric Steel
Foundry Company of Africa
(Pty) Ltd
South Africa Meadowview Business Estate CNR Clulee and
Ordinary
Meadowview lane, Linbro Park, Johannesburg, South
Africa, 2090, South Africa
Ings Road, Doncaster, DN5 9SN
Ordinary
ESCO EMEA Holdings (UK)
Limited
England and
Wales
ESCO Engineering
Kingaroy Pty Ltd
Australia
25 Trade Street, Lytton, Queensland QLD 4178, Australia Ordinary;
D-Ordinary;
F-Ordinary
ESCO Engineering Pty. Ltd. Australia
25 Trade Street, Lytton, Queensland QLD 4178, Australia Ordinary
ESCO GmbH
Germany
ESCO GP Ltd.
Canada
Marie-Bernays Ring 1, Moenchengladbach, 41199,
Germany
400 3rd Avenue SW, Suite 3700, Calgary AB T2P 4H2,
Canada
Ordinary
Common
ESCO Group Holdings Pty
Ltd
Australia
25 Trade Street, Lytton, Queensland QLD 4178, Australia Ordinary
The Weir Group PLC Annual Report and Financial Statements 2023
224
100
100
100
100
100
100
100
100
100
100
100
50
100
100
100
100
100
100
100
Strategic Report
Governance
Financial Statements
Additional Information
Subsidiary undertakings
continued
ESCO Group LLC
ESCO Hydra (UK) Limited
ESCO Indonesia Investco
No 1 Pty Ltd
ESCO Indonesia Investco
No 2 Pty Ltd
ESCO International (H.K.)
Holdings Limited
ESCO International
Holdings
ESCO Japan, Inc.
Esco Latin América
Comércio e Indústria Ltda.
ESCO Limited
Canada
United
States
England and
Wales
1209 Orange Street, Wilmington DE 19801, United States Membership
100
Ings Road, Doncaster, DN5 9SN
Units
Ordinary;
Ordinary A
Australia
25 Trade Street, Lytton, Queensland QLD 4178, Australia Ordinary
Australia
25 Trade Street, Lytton, Queensland QLD 4178, Australia Ordinary
Hong Kong
Suites 5801, 5804-06,, Central Plaza, 18 Harbour Road,
Wanchai, Hong Kong
Belgium
Japan
Brazil
122 Rue des Fours à Chaux, Zoning Industriel, Frameries,
7080, Belgium
Marunouchi Mitsui Building, 2-2-2 Marunouchi, Chiyoda-ku,
Tokyo, 100-0005, Japan
Ordinary
Rua Engenheiro Gerhard Ett, nº 1.215, Galpão 02, Distrito
Industrial Paulo Camilo Sul, Betim, 32668-110, Brazil
Ordinary
1800 – 510 West Georgia Street, Vancouver BC V6B 0M3 ,
Canada
Class A
Common
Ordinary
Ordinary
ESCO Moçambique S.A.
Mozambique Avenida Kim IL Sung, no. 961, Maputo, Mozambique
Ordinary
ESCO Northgate Pty Ltd
Australia
25 Trade Street, Lytton, Queensland QLD 4178, Australia Ordinary
ESCO Peru S.R.L.
Peru
Av. Manuel Olguin 211, Suite 304, Surco, Lima, Peru
Common
Argentina
Tucuman 1, Piso 4, C1049AAA, Buenos Aires, Argentina
Ordinary
ESCO Servicios Mineros
S.A.
ESCO South Africa
Wearparts (Pty) Limited
South Africa Meadowview Business Estate CNR Clulee and
Meadowview lane, Linbro Park, Johannesburg, South
Africa, 2090, South Africa
100
100
100
100
100
100
100
100
100
100
100
100
99.35
Ordinary A;
Cumulative
redeemable
preference;
Empowerment
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
100
100
100
100
100
99.23
99.23
Corporate
Relationship %
Corporate
Relationship %
ESCO Supply and Service
Kazakhstan
Kazakhstan
4 th floor, 192/2 Dostyk avenue, Almaty city, 050051,
Kazakhstan
Esco Supply Carajás
Indústria de Peças e
Equipamentos Ltda
Brazil
Rodovia PA-160, S/N, Sala B, Quadra 73, Lotes 1, 2, 3, 4,
5, 6, 7, 22, 23 e 24, Parque dos Carajas Il, Parauapebas/PA,
68515000, Brazil
ESCO Turbine Components
Europe
Belgium
122 Rue des Fours à Chaux, Zoning Industriel, Frameries,
7080, Belgium
Namibia
Unit 3, 2nd Floor, Ausspann Plaza, Dr Agostinho Neto
Road, Ausspannplatz, Windhoek, Namibia
ESCO Wearparts Supply
and Services (Namibia)
(Proprietary) Limited
ESCO-Bucyrus Blades
Financing Limited
Partnership
ESCOSupply Ltd.
Fabrica de Aisladores
Sismicos de Chile Limitada
Canada
Canada
1800 - 510 West Georgia Street, Vancouver BC V6B 0M3,
Canada
Corporate
Relationship %
100
395 Mackenzie Blvd., Fort McMurray AB T9H 5E2, Canada Class A
Common
Chile
San José N° 0815, San Bernardo, Santiago de Chile, Chile
Fundición Vulco Ltda
Chile
San José N° 0815, San Bernardo, Santiago de Chile, Chile
G. & J. Weir, Limited
England and
Wales
C/o Weir Minerals Europe, Halifax Road, Todmorden, OL14
5RT
Ordinary
100
*
Inversiones ESCO Chile
Limitada
Inversiones Linatex Chile
(Holdings) Limitada
Chile
Chile
Linatex (H.K.) Limited
Hong Kong
Linatex Asset Holdings
Malaysia Sdn. Bhd.
Malaysia
Calle Miraflores, Numero 222, Piso veinticuatro, Santiago,
Chile
Corporate
Relationship %
San José N° 0815, San Bernardo, Santiago de Chile, Chile
Corporate
Relationship %
Level 54, Hopewell Centre, 183 Queen's Road East, Hong
Kong
Ordinary
2nd Floor, No 2-4 Jalan Manau, Wilayah
Persekutuan,Wilayah Persekutuan, 50460 Kuala Lumpur,
Malaysia
Ordinary
Linatex Australia Pty.
Limited
Australia
1-5 Marden Street, Artarmon NSW 2064, Australia
Linatex Chile Limitada
Chile
San José N° 0815, San Bernardo, Santiago de Chile, Chile
Class A;
Class B
Corporate
Relationship %
100
100
100
100
100
100
The Weir Group PLC Annual Report and Financial Statements 2023
225
Strategic Report
Governance
Financial Statements
Additional Information
Subsidiary undertakings
continued
Linatex Chile SpA
Chile
Santa Catalina de Chena 850, San Bernardo, Santiago de
Chile, Chile
Linatex Consolidated
Holdings Ltd
British Virgin
Islands
Kingston Chambers, PO Box 173, Tortola, Road Town,
British Virgin Islands
Ordinary
Nominative
Share
Ordinary
Linatex Limited
England and
Wales
C/o Weir Minerals Europe, Halifax Road, Todmorden, OL14
5RT
Ordinary
Linatex Rubber Limited
England and
Wales
C/o Weir Minerals Europe, Halifax Road, Todmorden, OL14
5RT
Ordinary
Linatex Rubber Products
Sdn. Bhd.
Malaysia
2nd Floor, No 2-4 Jalan Manau, Wilayah
Persekutuan,Wilayah Persekutuan, 50460 Kuala Lumpur,
Malaysia
Ordinary
Metalúrgica Vulco Ltda
Chile
San José N° 0815, San Bernardo, Santiago de Chile, Chile
Common
Australia
25 Trade Street, Lytton, QLD 4178
Ordinary
Motion Metrics Australia
Pty. Ltd.
Motion Metrics
International Corp.
Motion Metrics Latin
America SpA
Canada
Chile
1800 - 510 West Georgia Street, Vancouver BC V6B 0M3,
Canada
Class A
Common
Edificio Nueva Santa Maria, Los Conquistadores 1730, Of.
2805 Providencia, Santiago, Chile
Ordinary
Ordinary
Ordinary
Multiflo Pumps Pty Ltd
Australia
1-5 Marden Street, Artarmon NSW 2064, Australia
Overseas ESCO
Corporation Ltd.
British Virgin
Islands
The Lake Building, 1st Floor, Wickams Cay 1,Tortola, P. O.
Box 3152, Road Town, British Virgin Islands
PT ESCO Mining Products
Indonesia
The Garden Centre #3-04, Cilandak Commercial Estate, JL
Raya Cilandak KKO, Jakarta, 12075, Indonesia
Ordinary
PT Weir Minerals Contract
Services Indonesia
Indonesia
Jl. Mulawarman Rt. 20 No. 20 Kelurahan Manggar, Kec,
Balikpapan Timur, Kota Balikpapan, 76116, Indonesia
PT Weir Minerals Indonesia Indonesia
Jl. Mulawarman Rt. 20 No. 20 Kelurahan Manggar, Kec,
Balikpapan Timur, Kota Balikpapan, 76116, Indonesia
PT Weir Oil & Gas
Indonesia
Indonesia
Jl. Mulawarman Rt. 20 No. 20 Kelurahan Manggar, Kec,
Balikpapan Timur, Kota Balikpapan, 76116, Indonesia
Ordinary
Ordinary
Ordinary -
Class A;
Ordinary -
Class B
Seaboard Holdings, LLC
United
States
The Corporation Trust Company, 1209 Orange Street,
Wilmington DE 19801, United States
Membership
Units
Sentiantechnologies AB
Sweden
Bredgatan 4, 211 30, Malmo, Sweden
Slurry Holdings Limited
Malta
Level 2 West, Mercury Tower, The Exchange Financial &
Business Centre, Elia Zammit Street, St. Julian's, STJ
3155, Malta, STJ 3155, Malta
Ordinary
Ordinary
Soldering Comercio e
Industria Ltda
Brazil
Rua Engenheiro Gerhard Ett, nº 1.215, Distrito Industrial
Paulo Camilo Sul, CEP 32669-110, Brazil
Ordinary
Thandilwa Training Centre
(Pty) Ltd
South Africa Meadowview Business Estate CNR Clulee and
Ordinary
Meadowview lane, Linbro Park, Johannesburg, South
Africa, 2090, South Africa
The Weir Group Insurance
Company Limited
Isle of Man
1st Floor Goldie House 1-4 Goldie Terrace, Upper Church
Street, Douglas, IM1 1EB, Isle of Man
The Weir Group
International S.A.
Switzerland
Rue de Romont 35, c/o Daniel Schneuwly, 1700
FRIBOURG, Fribourg, Switzerland
Ordinary
Ordinary
100
100
100
100
100
99.22
100
100
100
100
100
100
100
100
95
100
100
100
100
100
100
100
The Weir Group Pension
Trust Limited
Trio Engineered Products
(Hong Kong) Limited
TWG Canada Holdings
Limited
TWG Cayman Limited
TWG Finance, Inc.
TWG Investments (No. 6)
Limited
TWG Investments (No. 7)
Limited
TWG Investments (No. 8)
Limited
Scotland
10th Floor, 1 West Regent Street, Glasgow, G2 1RW
N/A
100
*
Hong Kong
Level 54, Hopewell Centre, 183 Queen's Road East, Hong
Kong
Ordinary
Scotland
10th Floor, 1 West Regent Street, Glasgow, G2 1RW
Ordinary
Cayman
Islands
United
States
M & C Corporate Services Limited, PO Box 309, Ugland
House, Grand Cayman, KY1-1104, Cayman Islands
The Corporation Trust Company, 1209 Orange Street,
Wilmington DE 19801, United States
Ordinary;
Preference
Common
Scotland
10th Floor, 1 West Regent Street, Glasgow, G2 1RW
Ordinary
100
100
100
100
100
Scotland
10th Floor, 1 West Regent Street, Glasgow, G2 1RW
Ordinary
100
*
Scotland
10th Floor, 1 West Regent Street, Glasgow, G2 1RW
Ordinary
100
The Weir Group PLC Annual Report and Financial Statements 2023
226
Weir B.V.
Netherlands
PO Box 249, 5900 AE, Venlo, Netherlands
Strategic Report
Governance
Financial Statements
Additional Information
Subsidiary undertakings
continued
TWG Investments (No.10)
Limited
TWG Investments (No.3)
Limited
TWG Investments (No.4)
Limited
TWG South America
Holdings Limited
Scotland
10th Floor, 1 West Regent Street, Glasgow, G2 1RW
Ordinary
Scotland
10th Floor, 1 West Regent Street, Glasgow, G2 1RW
Scotland
10th Floor, 1 West Regent Street, Glasgow, G2 1RW
Scotland
10th Floor, 1 West Regent Street, Glasgow, G2 1RW
Ordinary;
Preference
Ordinary;
Preference
Ordinary;
Preference
TWG UK Holdings Limited
Scotland
10th Floor, 1 West Regent Street, Glasgow, G2 1RW
Ordinary
TWG US Finance LLC
TWG US Holdings LLC
United
States
United
States
The Corporation Trust Company, 1209 Orange Street,
Wilmington DE 19801, United States
Membership;
Preferred Units
The Corporation Trust Company, 1209 Orange Street,
Wilmington DE 19801, United States
TWG Young Limited
Scotland
10th Floor, 1 West Regent Street, Glasgow, G2 1RW
Units
Ordinary
Common
Ordinary
Ordinary
Common
Common
Nominal
CT Corporation System, 1999 Bryan St., Suite 900, Dallas
TX 75201, United States
Av. Separadora Industrial, N° 2201 Urb Vulcano Ate, Lima,
Peru
Ordinary
99.22
San José N° 0815, San Bernardo, Santiago de Chile, Chile Ordinary
99.22
1-3 Marden Street, Artarmon NSW 2064, Australia
Ordinary
1 West Regent Street, Glasgow, G2 1RW, Scotland
Corporate
Relationship %
Scotland
10th Floor, 1 West Regent Street, Glasgow, G2 1RW
Ordinary
Rodovia BR-101, KM 43, N° 43.000, Galpão 10-C, Bairro
Nova Brasília, Joinville/SC, CEP 89213-125, Brazil
1800 - 510 West Georgia Street, Vancouver BC V6B 0M3,
Canada
1800 - 510 West Georgia Street, Vancouver BC V6B 0M3,
Canada
Av Jose Benassi, 2151, Sala A, Condominio Fazgran,
Jundiaí/SP, 13.213-085, Brazil
Canada
Brazil
China
Room 318, Floor 3, No. 458, Fute North Road, Shanghai,
China
N/A
Scotland
10th Floor, 1 West Regent Street, Glasgow, G2 1RW
Ordinary
Scotland
10th Floor, 1 West Regent Street, Glasgow, G2 1RW
Ordinary
Scotland
10th Floor, 1 West Regent Street, Glasgow, G2 1RW
Ordinary
Hong Kong
Level 54, Hopewell Centre, 183 Queen's Road East, Hong
Kong
Ordinary
Scotland
10th Floor, 1 West Regent Street, Glasgow, G2 1RW
Ordinary
Scotland
10th Floor, 1 West Regent Street, Glasgow, G2 1RW
Ordinary
Scotland
10th Floor, 1 West Regent Street, Glasgow, G2 1RW
Ordinary
Australia
1-5 Marden Street, Artarmon NSW 2064, Australia
Ordinary
100
*
Valves and Controls US,
Inc.
Vulco Peru SA
Vulco S.A.
Warman Pumps Ltd
Weir ABF LP
Weir Australia Finance
Limited
United
States
Peru
Chile
Australia
Scotland
Weir Brasil Comercio Ltda
Brazil
Weir Canada, Inc.
Canada
Weir Canadian
Investments, Inc.
Weir do Brasil Ltda
Weir Engineering Products
(Shanghai) Co., Ltd
Weir Engineering Services
Limited
Weir Group (Australian
Holdings) Pty Limited
Weir Group (Overseas
Holdings) Limited
Weir Group African IP
Limited
Weir Group Engineering
Hong Kong Limited
Weir Group Executive
SUURB Trustee Limited
Weir Group General
Partner Limited
Weir Group Holdings
Limited
Weir Group Inc.
Weir Group Machinery
Equipment (Shanghai) Co.
Ltd.
Weir Group Machinery
Equipment (Wuxi) Co., Ltd.
Weir Group Management
Services Limited
China
China
Weir Group IP Limited
Scotland
10th Floor, 1 West Regent Street, Glasgow, G2 1RW
United
States
The Corporation Trust Company, 1209 Orange Street,
Wilmington DE 19801, United States
No.4918, Liuxiang Road, Xuxing Town, Jiading District,
Shanghai, China
Common
Ordinary
Ordinary
No. 9, Wenzhu Road, Hudai Town, Binhu District, Wuxi
City, China
Ordinary
100
Scotland
10th Floor, 1 West Regent Street, Glasgow, G2 1RW
Ordinary
100
*
The Weir Group PLC Annual Report and Financial Statements 2023
227
*
*
*
*
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
*
*
*
*
Strategic Report
Governance
Financial Statements
Additional Information
Subsidiary undertakings
continued
Weir Group Trading
Mexico, S.A. de C.V.
Mexico
Av. Nafta No. 775, Col. Parque Industrial, Stiva Aeropuerto,
Mexico
Weir HBF (Pty) Ltd
South Africa
50 Strudebaker Street, Markman Industria, Port Elizabeth,
South Africa
Weir Holdings B.V.
Netherlands
Egtenrayseweg 9, 5928PH Venlo, Netherlands
Weir Investments Two
Limited
Scotland
10th Floor, 1 West Regent Street, Glasgow, G2 1RW
Weir Malaysia Sdn. Bhd.
Malaysia
2nd Floor, No 2-4 Jalan Manau, Wilayah
Persekutuan,Wilayah Persekutuan, 50460 Kuala Lumpur,
Malaysia
Weir Minerals (India)
Private Limited
India
NCC Urban Windsor, 1st Floor, New Airport Road,
Opp.Jakkur Aerodrome, Yelahanka, Bangalore, Karnataka,
560 064, India
Ordinary
Nominative
Share
Ordinary
Ordinary
Ordinary A;
Preference
Ordinary -
Class A;
Ordinary -
Class B
Ordinary
100
100
100
100
100
97.25
*
South Africa
5 Clarke Street South, Alrode, Alberton, 1449, South Africa Ordinary A;
100
Weir Minerals Africa
(Proprietary) Limited
Ordinary B
Ordinary
Ordinary
Ordinary
Ordinary
Weir Minerals Armenia LLC Armenia
22 Hanrapetutyan Str, 5th Floor, Yerevan Centre, 0010,
Armenia
Weir Minerals Australia Ltd Australia
1-3 Marden Street, Artarmon NSW 2064, Australia
Weir Minerals Balkan d.o.o.
Beograd
Weir Minerals Botswana
(Proprietary) Limited
Weir Minerals Caribe SRL
Serbia
Dimitrija Tucovica 28b, Zvezdara, Belgrade, Serbia
Botswana
Plot 64518 Deloitte House Fairgrounds, Gaborone,
Botswana
Dominican
Republic
KK 22,5 Autopista Duarte, Parque Industrial Duarte, Parque
de Naves PID 4, Santo Domingo, Dominican Republic
Ordinary
Weir Minerals Central
Africa Limited
Weir Minerals China Co.,
Limited
Weir Minerals Colombia
SAS
Zambia
China
Plot No. 3655, Chibuluma Road, Light Industrial Area,
Kitwe, Copperbelt Province, Zambia
Factory #27, 158 Hua Shan Road, Suzhou New District,
Suzhou, 215011, China
Colombia
Carrera 43 B # 16 41 Office 904, Building Staff, Medellin
Antioquia, Colombia
Weir Minerals Czech &
Slovak, s.r.o.
Czech
Republic
Hlinky 118, 603 00 Brno, Czech Rep., Brno, Czech
Republic
Ordinary
Ordinary
Ordinary
Ordinary
100
100
100
100
100
100
100
100
100
Weir Minerals DRC SAS
Weir Minerals East Africa
Limited
The
Democratic
Republic of
the Congo
The United
Republic of
Tanzania
1222 Route Likasi, Quartier Musompo - Mutshatsha,
Kolwezi, Province de Lualaba, Congo (the Democratic
Republic of the)
B Shares
64.87
Plot 38, Mahango Road, Nyakato Industrial Area, Mwanza,
Tanzania, the United Republic of
Ordinary
100
Weir Minerals Egypt (L.L.C) Egypt
11 Hanin Ibn Isaac St, 7th District, Nasr City, Cario, 11727,
Egypt
Ordinary
Weir Minerals Europe
Limited
England and
Wales
Halifax Road, Todmorden, OL14 5RT
Weir Minerals Finland Oy
Finland
Askonkatu 13 D, Lahti, FIN-15100, Finland
Weir Minerals France SAS
France
Parc Technoland, Baitment H, 6-8 Allee du Piemont,
69800, Saint-Priest, France
Weir Minerals FZCO
United Arab
Emirates
Unit 2W M058, Dubai Airport Free Zone Area, Dubai,
United Arab Emirates
Ordinary
Ordinary
Ordinary
Ordinary
100
100
100
100
100
Weir Minerals Germany
GmbH
Germany
Lise-Meitner-Straße 12, 74074, Heilbronn, Germany
Issued Capital
100
Weir Minerals Hungary Kft Hungary
Teleki László utca 11 1/.3, Tatabánya, 2800-HU, Hungary
Issued Capital
Weir Minerals Isando (Pty)
Ltd
South Africa
31 Isando Road, Isando, Gauteng, 1601, South Africa
Ordinary
Weir Minerals Italy S.r.l.
Italy
Via Fratelli Cervi 1/D, Cernusco sul Naviglio, 20063, Milan,
Italy
Ordinary
100
100
100
Weir Minerals Kazakhstan
LLP
Kazakhstan
4th Floor, 192/2 Dostyk Avenue, Almaty, 050051,
Kazakhstan
Weir Minerals Kenya
Limited
Kenya
LR No. 1870/1/569, Ring Road Parklands, P.O. Box 764 -
00606 - Sarit Centre, Nairobi, Kenya
Weir Minerals Madagascar
Sarlu
Madagascar
Immcuble Mining Business Center sis a Mamory Ivato,
10518 Ivato Aeroport ,Analamanga, Madagascar
Charter Capital 100
Ordinary
Ordinary
100
100
The Weir Group PLC Annual Report and Financial Statements 2023
228
Strategic Report
Governance
Financial Statements
Additional Information
Subsidiary undertakings
continued
Weir Minerals Mexico
Servicios, S.A. de C.V.
Mexico
Av. Nafta No. 775, Col. Parque Industrial, Stiva Aeropuerto,
Mexico
Weir Minerals Mexico, SA
de CV
Mexico
Av. Nafta No. 775, Col. Parque Industrial, Stiva Aeropuerto,
Mexico
Ordinary
Nominative
Share
Ordinary
Nominative
Share
Weir Minerals Mongolia
LLC
Weir Minerals Mozambique
Ltd
Weir Minerals Netherlands
B.V.
Mongolia
205, 2nd Khoroo, Bayangol District, Ulaanbaatar, Mongolia Ordinary
Mozambique Mozambique, Maputo Cidade, Distrito urbano1, Bairro,
Ordinary
Centrall, AV. Zedequias ,Manganhela, Mozambique
Netherlands
PO Box 249, 5900 AE, Venlo, Netherlands
Ordinary
Weir Minerals North Africa
SARL
Morocco
Boulevard Sidi Mohamed, Ben Abdellah, IMB, 1Eretage N
29, Casablanca, 20160, Morocco
Ordinary
Weir Minerals Panama S.A. Panama
Urbanización Vista Alegre, Edificio Parque Logístico
Panawest Bodega 7 Autopista, Panama-Arraijan, Panamá
Ordinary
100
100
100
100
100
100
100
Weir Minerals Poland Sp.
z.o.o.
Poland
ul. WILKOWICKA, nr 20, lok. ---, miejsc. LESZNO, kod
64-100,, Poland
Weir Minerals Processing
Equipment & Services LLC
United Arab
Emirates
EFCO Cement Products Factory, Plot No
597901, Dubai Investment Park II, Dubai, United Arab
Emirates
Capital shares 100
Ordinary
49
Namibia
597901, Dubai Investment Park II, Dubai, United Arab
Emirates
Ordinary
100
Russian
Federation
Senegal
Bolshaya Polyanka, Building 2, house 2, 119180, Moscow,
Russian Federation
Corporate
Relationship %
Sacré Coeur Pyrotechnique Residence Les Signares 1er
Etage F4B - BP 21378 Dakar - Ponty (Senegal)
Ordinary
South Africa
5 Clarke Street South, Alrode, Alberton, 1449, South Africa Ordinary
Weir Minerals Pump &
Mining Solutions Namibia
(Proprietary) Limited
Weir Minerals RFW LLC
(OOO)
Weir Minerals Senegal
SUARL
Weir Minerals Shared
Services Proprietary
Limited
Weir Minerals South Africa
Proprietary Limited
South Africa
5 Clarke Street, Alrode, Alberton, Gauteng, 1449, South
Africa
Weir Minerals Sweden AB
Sweden
Polervägen 4, 774 41 Avesta, Sweden
Weir Minerals Ukraine LLC Ukraine
2 Glinka str., letter Ƃ-18, б-1, Dnipropetrovsk Reg,
Dnipropetrovsk, 49000, Ukraine
Weir Minerals West Africa
Ltd Company
Ghana
Phase 31, WH 5 & 6, Plot A, Tema Freezone Enclave, Agility
Logistics Park, Kpone-Katamanso, Greater Accra, Ghana
Ordinary
Australia
1-5 Marden Street, Artarmon NSW 2064, Australia
Ordinary
Ordinary;
Ordinary A
Ordinary
Share Capital
Weir Oil & Gas Australia
Pty Limited
Weir Pump and Valve
Solutions, Inc
Weir Pumps Limited
Weir Services Australia Pty
Ltd
Weir Services Tanzania
Limited
Weir Slurry Group, Inc.
Weir Sudamerica S.A.
Weir Turkey Mineralleri
Limited Sirketi
Weir US Holdings Inc.
United
States
Scotland
Australia
The United
Republic of
Tanzania
United
States
Chile
Turkey
United
States
The Corporation Company, 40600 Ann Arbour Road, Este,
201, Plymouth Mi 48170 4675, United States
Common
10th Floor, 1 West Regent Street, Glasgow, G2 1RW
1-5 Marden Street, Artarmon NSW 2064, Australia
Plot No 38 Mahango Road, Nyakato Industrial Area,
Mwanza, The United Republic of Tanzania
Ordinary
Ordinary
Ordinary
CT Corporation System, 301 South Bedford Street, Suite 1,
Madison, Wisconsin, 53703
Common;
Preferred Stock
100
San José N° 0815, San Bernardo, Santiago de Chile, Chile Ordinary
99.99
1 13 Tepeören Mah. Dervispasa Cad.Weir, Merkez-
Merkez, Tuzla, Istanbul, 3080535234, Turkey
The Corporation Trust Company, 1209 Orange Street,
Wilmington DE 19801, United States
Nominative
Share
Bearer
Common
100
100
Weir Vulco Argentina S.A.
Argentina
Sarmiento 511 Sur 1°Piso A, San Juan, CP 5400, Argentina Ordinary
99.96
Weir Warman (U.K.)
Limited
WHW Group Inc.
Wuxi Weir Minerals
Equipments Co., Ltd.
England and
Wales
United
States
China
Halifax Road, Todmorden, OL14 5RT
Ordinary
100
*
The Corporation Trust Company, 1209 Orange Street,
Wilmington DE 19801, United States
Lot 265, Wuxi-Singapore Industrial Park, Wuxi City,
Jiangsu Province, China
Common
Ordinary
100
100
The Weir Group PLC Annual Report and Financial Statements 2023
229
100
100
100
74.9
100
100
100
100
100
100
100
100
Strategic Report
Governance
Financial Statements
Additional Information
Subsidiary undertakings
continued
The Group has an interest in a partnership, the Weir ABF LP, which is fully consolidated into these statements. The Group has taken advantage
of the exemption conferred by Regulation 7 of the Partnerships (Accounts) Regulations 2008 and has, therefore, not appended the accounts of
this qualifying partnership to these financial statements. Separate accounts for the partnership are not required to be, and have not been, filed
at Companies House in the UK.
Statutory audit exemptions
The Weir Group PLC has issued guarantees over the liabilities of the following companies at 31 December 2023 under Section 479C of
Companies Act 2006 and these entities are exempt from the requirements of the Act relating to the audit of individual accounts by virtue
of Section 479A of the Act:
Company Name
Company number
ESCO (UK) Holdings Limited
ESCO EMEA Holdings (UK) Limited
Linatex Limited
TWG Canada Holdings Limited
TWG Investments (No.3) Limited
TWG Investments (No.4) Limited
TWG Investments (No.6) Limited
TWG Investments (No.7) Limited
TWG Investments (No.8) Limited
TWG South America Holdings Limited
TWG UK Holdings Limited
Weir Australia Finance Limited
Weir Engineering Services Limited
Weir Group (Overseas Holdings) Limited
Weir Group African IP Limited
Weir Group General Partner Limited
Weir Group Holdings Limited
Weir Group IP Limited
Weir Warman (U.K.) Limited
04743623
08690169
00246713
SC288837
SC197235
SC197236
SC292269
SC292270
SC292721
SC380944
SC311635
SC706473
SC033381
SC054821
SC333781
SC522808
SC187227
SC267963
01636530
The Weir Group PLC Annual Report and Financial Statements 2023
230
Strategic Report
Governance
Financial Statements
Additional Information
Shareholder information
Company secretary & registered office
Graham Vanhegan
The Weir Group PLC
1 West Regent Street
Glasgow
G2 1RW
Registered in Scotland.
Company No. SC002934.
Registrar
Computershare Investor Services PLC
The Pavilions
Bridgwater Road
Bristol
BS99 6ZZ
Website: www.investorcentre.co.uk
Telephone: 0370 707 1402
Online Communications
Shareholders are encouraged to visit the Company’s corporate
website (www.global.weir), which contains a wealth of information
about the Weir Group. The website includes information about the
markets in which we operate, our strategy and business
performance, recent news from the Group and product information.
The investor section is a key source of information for Shareholders,
containing details on the share price, our financial results,
Shareholder meetings and dividends, as well as a ‘Shareholders
FAQ’ section.
E-Communications
We are encouraging our Shareholders to receive their information by
email and via our website. Not only is this quick, it helps to reduce
paper, printing and costs.
To register for e-communications, log on to
www.investorcentre.co.uk
Follow us
Shareholder enquiries relating to shareholding, dividend payments,
change of name or address, lost share certificates or transfer of
shares etc. should be addressed to Computershare.
Shareholder analysis
Ordinary shareholder analysis at 31 December 2023 (excluding 1,465 treasury shares)
By country
8%
92%
UK Shareholders
Overseas Shareholders
By holding size
Range
1-1,000
1,001-5,000
5,001-10,000
10,001-100,000
100,001-500,000
500,001-1,000,000
1,000,001-999,999,999
Total
By Shareholder category
Individuals
Bank or Nominees
Investment Trust
Insurance Company
Other Company
Pension Trust
Other Corporate Body
Total
No. of
Shareholders
1,932
865
175
254
146
41
46
%
55.99
25.47
4.65
7.68
3.81
1.06
1.34
Shares
731,938
1,870,637
1,246,802
9,694,254
34,574,828
29,286,155
182,207,438
3,459
100%
259,612,052
Holdings
2,663
727
8
0
47
1
13
3,459
%
77.86%
20.10%
0.22%
0.00%
1.34%
0.03%
0.45%
100%
Shares
3,661,740
254,953,862
22,834
0
685,480
1
288,135
259,612,052
%
0.30
0.75
0.47
3.99
12.63
10.35
71.51
100%
%
1.69%
97.92%
0.01%
0.00%
0.29%
0.00%
0.09%
100%
Annual and interim reports
Our Annual Report is available online. You can view or download the full Annual Report and Interim Report from our website at
www.global.weir/investors/reporting-centre.
Managing your shareholding online with Investor Centre is a free, secure online service run by Computershare, giving you convenient access
to information on your shareholdings. Manage your shareholding online and take advantage of all these features and more:
• View share balances and market values for all of your Computershare-managed holdings
• Update dividend mandate bank instructions, including global payments and view dividend payment history
• Register to receive company communications online
• Cast your Proxy Vote online for forthcoming General Meetings
• Update personal details, such as your address
Registration is quick and easy. Just visit www.investorcentre.co.uk with your Shareholder Reference Number (SRN) to hand. After registering,
you may be sent an activation code in the post, used to validate your account.
The Weir Group PLC Annual Report and Financial Statements 2023
231
Strategic Report
Governance
Financial Statements
Additional Information
Shareholder information
continued
Annual general meeting 2024
Our Annual General Meeting will be held at 2.30pm on Thursday 25 April 2024. Further details are contained in the Notice of Annual General
Meeting 2024, which is available to download from our website at www.global.weir/shareholder-information/agm.
Voting
Information on how you can vote electronically on the resolutions that will be put forward at our 2024 Annual General Meeting can be obtained
through our Registrar by visiting www.investorcentre.co.uk/eproxy. You will need details of the Control Number, your SRN and PIN, which can
be found on the Form of Proxy or email, if you have asked to be sent email communications.
Dividends
The Directors have recommended a final dividend of 20.8p per share, for the year ended 31 December 2023. Payment of this dividend is
subject to approval at the 2024 Annual General Meeting. Key dates relating to this dividend are given below.
Annual General Meeting
Ex-dividend date
Record date
Mandatory Direct Credit deadline
Payment date
Dividend history – (pence per share)
25 April 2024
18 April 2024
19 April 2024
8 May 2024
31 May 2024
Interim
Final
Total
2016
15.0
29.0
44.0
2017
15.0
29.0
44.0
2018
15.75
30.45
46.20
2019
16.5
0.0
16.5
2020
0.0
0.0
0.0
2021
11.5
12.3
23.8
2022
13.5
19.3
32.8
2023
17.8
20.8
38.6
Important – payment of dividends by mandatory direct
credit
In 2019, the Company simplified the way in which it pays dividends
to Shareholders and now pays cash dividends by direct credit only.
If our Registrar Computershare does not have any bank/building
society details on record for you, future payments will remain
unissued and you may then be charged to have your payments
issued at a later date.
Paying dividends into a bank or building society account is a quicker
and more secure way for your dividends to be paid directly to you.
In order to receive your dividends directly into your bank account,
you will need to register your bank/building society details on our
Registrars’ website at investorcentre.co.uk. You will need your ten
digit Shareholder Reference Number (SRN), which starts with the
letter C or G to log in.
This can be found on your share certificate(s) and dividend
confirmation. Alternatively, you can call Computershare on the
dedicated Shareholder helpline 0370 707 1402, should you have
any questions about registering your payment instruction.
An Annual Dividend Confirmation detailing all payments made
throughout the tax year is sent once a year either electronically
or to your registered address.
International Funds Transfers
If you live overseas, Computershare offers an International Funds
Transfers service that is available in certain countries. This may make
it possible to receive dividends direct into your bank account in your
local currency. Please note that the fees applied for this service will
be automatically deducted from the proceeds before it is paid to you.
For further details go to www.investorcentre.co.uk/faq/payments.
American Depositary Receipt (ADR) programme
The Company has a sponsored level 1 ADR programme in the United
States. Each ADR represents 0.5 ordinary shares of 12.5 pence each,
in the Company. The Company’s ADR programme is administered by
Citibank, who were appointed in February 2016.
ADR investor contact
Telephone: +1 781 575 4555 Citibank representatives are available
from 8.30am to 6.00pm US Eastern Standard Time (EST) Monday
to Friday. Email: citibank@shareholders-online.com
In writing
Citibank Shareholder Services
P.O. Box 43077
Providence,
Rhode Island 029403077
ADR broker contact
Telephone: +1 212 723 5435 /
+44 207 500 2030
Email: citiadr@citi.com
The Weir Group PLC Annual Report and Financial Statements 2023
232
Strategic Report
Governance
Financial Statements
Additional Information
Shareholder information
continued
Dividend tax allowance
With effect from 6 April 2023, the annual tax free allowance on
dividend income was reduced from £2,000 to £1,000 and will further
reduce to £500 with effect from 6 April 2024.
Above this amount, individuals will pay tax on their dividend income
at a rate dependent on their income tax bracket and personal
circumstances. We will continue to provide registered Shareholders
with confirmation of the dividends paid and this should be included
with any other dividend income received when calculating and
reporting total dividend income received. It is a Shareholder’s
responsibility to include all dividend income when calculating any
tax liability.
This provision is enshrined in the Finance Act 2016. If you have any
tax queries, please contact a financial adviser.
United Kingdom capital gains tax
For the purpose of capital gains tax, the market value of an ordinary
share of The Weir Group PLC as at 31 March 1982 was 29.75p. This
market value has been adjusted to take account of the sub-Division
of the share capital whereby each ordinary share of 25p was sub-
divided into two ordinary shares of 12.5p each on 28 June 1993.
Rights issues of ordinary shares took place in April 1987 at 157p per
share on the basis of one new ordinary share for every seven
ordinary shares held, in July 1990 at 250p per share on the basis of
one new ordinary share for every five ordinary shares held and in
September 1994 at 252p per share on the basis of one new ordinary
share for every four ordinary shares held.
Share dealing services
Shareholders have the opportunity to buy or sell The Weir Group PLC
shares using a share dealing facility operated by our Registrar,
Computershare. You will need to register for this service prior to
using it. To access this service, go to www.computershare.com/
dealing/uk.
Internet share dealing – commission is 1.4% of the value of each
sale or purchase of shares, subject to a minimum charge of £40. In
addition, stamp duty, currently 0.5%, is payable on purchases. Real
time dealing is available during market hours (0800 to 1630 Monday
to Friday excluding bank holidays). In addition, there is a convenient
facility to place your order outside of market hours. Up to 90-day limit
orders are available for sales. To access the service, go to
www.computershare.com/dealing/uk. Shareholders should have their
SRN available. The SRN appears on share certificates and
dividend documentation.
Please note that, at present, this service is only available to
Shareholders in certain jurisdictions. Please refer to the
Computershare website for an up-to-date list of these countries.
Registry postal share dealing service – commission is 1.4% of the
value of each sale or purchase of shares, subject to a minimum of
£40. In addition, stamp duty, currently 0.5%, is payable on
purchases. You can contact Computershare on 0370 703 0084.
Shareholders should have their SRN ready when making the call. The
SRN appears on share certificates and dividend documentation.
Detailed terms and conditions are available at
www.investorcentre.co.uk or by contacting Computershare. Please
note this service is, at present, only available to Shareholders
resident in certain jurisdictions. Please refer to the Computershare
website for an up-to-date list of these countries.
These services are offered on an execution only basis and subject to
the applicable terms and conditions. Computershare Investor
Services PLC is authorised and regulated by the Financial Conduct
Authority.
This is not a recommendation to buy, sell or hold shares in The Weir
Group PLC. Shareholders who are unsure of what action to take
should obtain independent financial advice. Share values may go
down as well as up which may result in a Shareholder receiving less
than he/she originally invested.
Shareholder warning alert: unsolicited investment advice
and fraud
Many companies have become aware that their shareholders have
received unsolicited phone calls or correspondence concerning
investment matters. Share scams are often run from ‘boiler rooms’
where fraudsters cold-call investors offering them worthless,
overpriced or even non-existent shares.
These callers can be very persistent and extremely persuasive and
their activities have resulted in considerable losses for some
investors. Whilst usually by telephone, the high pressure sales
tactics can also come by email, post, word of mouth or at a seminar.
Shareholders are advised to be very wary of any unsolicited advice,
offers to buy shares at a discount, sell your shares at a premium or
offers of free company reports.
If you receive any unsolicited investment advice:
• Make sure you get the correct name of the person and
organisation and take a note of any other details they provide, such
as a telephone number or address.
• Check that the caller is properly authorised by the Financial
Conduct Authority (FCA) by visiting www.fca.org.uk.
• Report any approach from such organisations to the FCA using the
share fraud reporting form at www.fca.org.uk/consumers/report-
scam-unauthorised-firm, where you can also find out about the
latest investment scams. You can also call the Consumer Helpline
on 0800 111 6768.
• If calls persist, hang up.
The Weir Group PLC Annual Report and Financial Statements 2023
233
Strategic Report
Governance
Financial Statements
Additional Information
Glossary
AGM
Annual General Meeting
AI
Artificial intelligence
Board
The Board of Directors of The Weir Group PLC
bps
Basis points
brownfield
A term used to describe existing mining operations
capex
Capital expenditure
CGU
Cash generating unit
Comminution
Crushing, screening and grinding of materials in mining and sand and aggregates markets
Company
The Weir Group PLC
Computershare EBT
Employee benefit trust (Computershare Trustees (Jersey) Limited)
Constant currency
2022 restated at 2023 average exchange rates.
Continuing operations
Continuing operations excludes the Oil & Gas Division, which was sold to Caterpillar Inc. in February 2021 and the Saudi Arabian joint venture,
which was sold to Olayan Financing Company in June 2021
Director
A Director of The Weir Group PLC
EBIT
Earnings before interest and tax
EBITDA
Earnings before interest, tax, depreciation and amortisation
eNPS
A scoring system designed to help employers measure employee satisfaction and loyalty within their organisations
EPS
Earnings per share
Estera EBT
Employee benefit trust (Estera Trust (Jersey) Limited)
Excellence Committees
Management-level committees seeking to promote best practice on a variety of specialist topics
External Auditors
PricewaterhouseCoopers LLP
free cash flow
Operating cash flow (cash generated from operations) adjusted for net capital expenditure, lease payments, dividends received from joint
ventures, purchase of shares for employee share plans, net interest, income taxes, settlement of derivative financial instruments, additional
pension contributions and non-controlling interest dividends
GAAP
Generally Accepted Accounting Practice
GHG
Greenhouse gases
greenfield
A term used to describe new mine developments
Group
The Company together with its subsidiaries
IAS
International Accounting Standards
ID&E
Inclusion, diversity and equity
The Weir Group PLC Annual Report and Financial Statements 2023
234
Strategic Report
Governance
Financial Statements
Additional Information
Glossary
continued
IFRS
International Financial Reporting Standards
ISO
International Organisation for Standardisation
KPI
Key performance indicator
Like-for-like
On a consistent basis, excluding the impact of acquisitions
LTIP
Long Term Incentive Plan
NGO
Non-governmental organisation
operating margin
Operating profit including our share of results of joint ventures divided by revenue
2026 operating margin target
Adjusted operating profit margin for full year ending 31 December 2026
ordinary shares
The ordinary shares in the capital of the Company of 12.5p each
Performance Excellence
A transformation programme to optimise the structure of our operations and drive synergy across our processes
PILON
Payment in lieu of notice
Registrar
Computershare Investor Services PLC
R&D
Research and development
RPI
UK Retail Prices Index
Scope 1 Emissions
Direct GHG emissions occur from sources that are owned or controlled by the company, for example, emissions from combustion in owned
or controlled boilers, furnaces, vehicles and process emissions.
Scope 2 Emissions
Indirect GHG emissions. Scope 2 accounts for GHG emissions from the generation of purchased electricity, heat or steam consumed by the
company and is purchased or otherwise brought into the organisational boundary of the company
Scope 3 Emissions
Other indirect GHG emissions across the value chain Scope 3 emissions are a consequence of the activities of the company, but occur from
sources not owned or controlled by the company. Some examples of scope 3 activities are extraction and production of purchased materials;
transportation of purchased fuels; and use of sold products and services
Scope 4 Emissions, also known as avoided emissions
Scope 4 Emissions, also known as avoided emissions, are the comparative measure between the lifecycle greenhouse gas emissions of an
improved technology versus the business as usual alternative
SHE
Safety, Health and Environment
SRP
Share Reward Plan
subsidiary
An entity that is controlled, either directly or indirectly, by the Company
tCO2e
Tonnes of carbon dioxide equivalent
TIR
Total incident rate is an industry standard indicator that measures lost time and medical treatment injuries per 200,000 hours worked
TSR
Total Shareholder Return comprising dividends paid on ordinary shares and the increase or decrease in the market price of ordinary shares
WACC
Weighted average cost of capital
WBS
Weir Business Services
The Weir Group PLC Annual Report and Financial Statements 2023
235
Strategic Report
Governance
Financial Statements
Additional Information
Strategic Report
Strategic Report
Governance
Governance
Financial Statements
Financial Statements
Additional Information
Additional Information
Glossary
AGM
Annual General Meeting
AI
Artificial intelligence
Board
The Board of Directors of The Weir Group PLC
bps
Basis points
brownfield
A term used to describe existing mining operations
capex
Capital expenditure
CGU
Cash generating unit
Comminution
Crushing, screening and grinding of materials in mining and sand and aggregates markets
Company
The Weir Group PLC
Computershare EBT
Employee benefit trust (Computershare Trustees (Jersey) Limited)
Constant currency
2022 restated at 2023 average exchange rates.
Continuing operations
Continuing operations excludes the Oil & Gas Division, which was sold to Caterpillar Inc. in February 2021 and the Saudi Arabian joint venture,
which was sold to Olayan Financing Company in June 2021
Director
A Director of The Weir Group PLC
EBIT
Earnings before interest and tax
EBITDA
Earnings before interest, tax, depreciation and amortisation
eNPS
A scoring system designed to help employers measure employee satisfaction and loyalty within their organisations
Photographic references:
EPS
Cover image - CSA mine at Cobar, New South Wales, Australia
Earnings per share
Pages 2-3 – Costa Masnaga quarry, Italy
Estera EBT
Page 10 – Copper mine in Røros, Norway
Employee benefit trust (Estera Trust (Jersey) Limited)
Page 29 – Miralga Creek iron ore mine, Western Australia
Excellence Committees
Management-level committees seeking to promote best practice on a variety of specialist topics
External Auditors
Designed and produced by RadleyYeldar www.ry.com
PricewaterhouseCoopers LLP
Printed in the UK by Park using vegetable inks and their environmental printing technology
Photographic references:
free cash flow
Park is a CarbonNeutral company. Both Manufacturing mill and the printer are registered to the Environmental Management System ISO14001
Operating cash flow (cash generated from operations) adjusted for net capital expenditure, lease payments, dividends received from joint
Cover image - CSA mine at Cobar, New South Wales, Australia
and are Forest Stewardship Council (FSC) chain-of-custody certified
ventures, purchase of shares for employee share plans, net interest, income taxes, settlement of derivative financial instruments, additional
Pages 2-3 – Costa Masnaga quarry, Italy
pension contributions and non-controlling interest dividends
Page 10 – Copper mine in Røros, Norway
GAAP
Page 29 – Miralga Creek iron ore mine, Western Australia
Generally Accepted Accounting Practice
GHG
Greenhouse gases
Designed and produced by RadleyYeldar www.ry.com
The Weir Group PLC Annual Report and Financial Statements 2023
greenfield
Printed in the UK by Park using vegetable inks and their environmental printing technology
A term used to describe new mine developments
Park is a CarbonNeutral company. Both Manufacturing mill and the printer are registered to the Environmental Management System ISO14001
Group
and are Forest Stewardship Council (FSC) chain-of-custody certified
The Company together with its subsidiaries
236
IAS
International Accounting Standards
ID&E
Inclusion, diversity and equity
The Weir Group PLC Annual Report and Financial Statements 2023
The Weir Group PLC Annual Report and Financial Statements 2023
234
236
The Weir Group PLC
1 West Regent Street
Glasgow
G2 1RW