The Weir Group (LON:WEIR) said third-quarter orders rose 8% including acquisitions, supported by customer demand in gold, copper and oil sands as miners sought to maximize production. The company said it remains on track to meet current market expectations for constant-currency revenue and operating-profit growth in 2026, with full-year operating margins above 20% and strong cash conversion.
Chief Executive Officer Andrew Neilson, who took the role three months ago, said customers are looking to expand their relationships with Weir across their operations. He said the company’s technology, hardware, software and local service presence position it to benefit as mining customers work to sustainably supply critical minerals.
Aftermarket demand offsets site disruptions
Group aftermarket orders increased 10% during the quarter. Minerals aftermarket orders rose 7%, or 5% organically, despite weather-related mine disruptions in Chile as well as softer demand in phosphate and African mineral sands.
Neilson said Chile was the most significant disruption because copper is Weir’s largest exposure and Chile is its largest copper market. He added that phosphate typically accounts for around 4% of annual company revenue, with some phosphate customers having shut sites.
For the fourth quarter, the company does not expect a recovery in phosphate demand, but it also does not expect a further deterioration. In Chile, customers are seeking to return to full production and operate without further shutdowns through the quarter, Neilson said.
ESCO aftermarket orders grew 14%, or 10% organically. The company cited growth in mining ground-engaging tools and continuing progress in Software Solutions. Chief Financial Officer Brian Puffer said Software Solutions remains on track to deliver annual recurring revenue growth of more than 25% for the full year.
Puffer said half of ESCO’s aftermarket growth in the third quarter came from ESCO and roughly half from Micromine, the company’s software business.
Original equipment pipeline continues to develop
Group original-equipment orders rose 3%, with Minerals original-equipment orders up 6% on demand for brownfield projects. The company said some orders were delayed into the fourth quarter, including two projects worth a combined £30 million that had been expected during the third quarter.
Weir booked one of those projects, valued at £10 million, in October. Neilson said the remaining project, worth approximately £20 million, is still expected to arrive before year-end. He said the project pipeline continues to grow and projects are progressing through it, although the timing of order awards can be difficult to forecast.
ESCO original-equipment orders declined by £3 million year over year, or 24%, in the quarter. Neilson attributed the decline to the annual phasing of large bucket and truck-body orders, while noting that ESCO original-equipment orders were higher year to date.
Neilson said Weir’s original-equipment portfolio places it later in the mining investment cycle than some peers. He added that original-equipment growth can ultimately support recurring aftermarket revenues once equipment is commissioned.
Order book supports fourth-quarter delivery outlook
Puffer said the company expects a large fourth-quarter revenue contribution, supported by an order book that has not been drawn down during the first nine months of the year. He noted that book-to-bill was at least 1.1 in each of the first three quarters, including 1.1 in the third quarter.
At the start of the fourth quarter, Minerals aftermarket orders scheduled for delivery during the remainder of the year were about £50 million to £60 million higher than they were a year earlier, according to Puffer. He said this reflected backlog accumulated during plant transfers and site transitions, which are now largely complete.
The company expects to ship that backlog in the fourth quarter. However, management said execution will depend in part on the reliability of freight routes and vessel schedules. Neilson said geopolitical events remain a potential near-term risk, while Puffer said the company’s outlook is based on current conditions and its existing order book.
Margins, costs and leadership changes
Weir maintained its expectation for an operating margin above 20% for the year. Puffer said the anticipated fourth-quarter delivery includes a substantial aftermarket contribution, which carries higher margins.
Looking ahead, management said the S/4HANA implementation will create an incremental margin headwind of about 75 basis points in 2027. Neilson said implementation costs are expected to remain at that level in 2028, decline to about half that amount in 2029 and disappear in 2030. The company already expects roughly £5 million to £6 million of implementation costs in 2026.
Neilson said Weir expects to offset the 2027 headwind through benefits from its Performance Excellence program, operating leverage from growth and additional efficiency measures. He said there is no intention to reset the company’s structural margin expectations lower, even as it continues to invest in research and development, automation, robotics and other initiatives.
On input costs, Neilson said inflation in the company’s cost base has not materially changed and that Weir has generally been able to pass inflationary costs through to customers. He described pricing as more challenging than it was two or three years ago, but said it currently represents neither a material headwind nor tailwind.
The company also announced recent executive changes. Marc Cameron joined from Caterpillar as President of Minerals, while Brian Doffing joined as President of ESCO after a career at Epiroc, succeeding Sean Fitzgerald following his retirement.
About The Weir Group (LON:WEIR)
Founded in 1871, Weir is one of the world’s leading engineering businesses with a purpose to make its mining and infrastructure customers’ operations more sustainable and efficient. Weir’s highly engineered technology enables critical resources to be produced using less energy, water and waste while reducing customers’ total cost of ownership. Weir is ideally positioned to benefit from structural trends that support long-term demand for its technology including the need for more essential metals to support economic development and carbon transition.
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