A LEGACY TO BE CELEBRATED 19th November 1955 - 8th May 2018 - PowerPoint PPT Presentation

A LEGACY TO BE CELEBRATED 19th November 1955 - 8th May 2018 Barloworld Limited Interim Results for the six months ended 31 March 2018 1

INTERIM RESULTS For the six months ended 31 March 2018

Dominic Sewela Group chief executive

SALIENT FEATURES Revenue Total Headline earnings per share Operating profit (from continuing operations) (incl. discontinued operations) (from continuing operations) R30.9bn 481 cents R2.0bn up 1% up 32% up 6% (1H’17: R30.6bn) (1H’17: 365 cents ) (1H’17: R1.8bn) Headline earnings per share Return on equity (from continuing operations) Group return on invested capital (from continuing operations) 457 cents 11.0% 9.7% up 14 % (1H’17: 9.2%) (1H’17: 9.0%) (1H’17: 400 cents) Disposal of Logistics Interim dividend per share Equipment Iberia turnaround 145 cents Progressing according to plan Improved positive returns up 16 % (1H’17: 125 cents) Barloworld Limited Interim Results for the six months ended 31 March 2018 4

ROLLING 12 MONTH ROIC SEGMENTAL – 13.0% HURDLE RATE 25.0% 19.40% 20.0% FIX OPTIMISE 19.4% 18.5% 18.4% 15.0% 12.4% WACC 12.1% 13.1% 12.4% 12.8% 11.9% 11.2% 10.0% 11.0% 11.6% 9.2% 8.5% 5.0% 5.0% 3.3% 2.5% 0.0% -3.2% -5.3% -5.0% -9.8% -10.0% Iberia Logistics Automotive Equipment Equipment Group -15.0% southern Africa Russia AVERAGE INVESTED CAPITAL H1’17 R3.0bn R2.9bn R11.3bn R11.1bn R2.9bn R30.7bn FY’17 R2.7bn R2.4bn R10.0bn R10.2bn R2.6bn R27.2bn H1’18 R2.3bn R2.7bn R11.3bn R10.9bn R2.6bn R29.1bn Barloworld Limited Interim Results for the six months ended 31 March 2018 5

STRATEGY UPDATE • Focus continues on optimal deployment of capital • Exit of Iberia according to plan: R2.3bn • Leasing asset solution being sought: R2.0 – R4.0bn (next 6-12 months) • Equipment southern Africa: circa R2.0bn (next 12 months) • Existing business units focussing on: • Cost reduction • Efficient capital utilisation to enhance ROIC and EP • Underlying Return on Invested Capital improving as a result of key actions • Actions to improve ROE • Continued focus on driving business unit performance • Optimise capital structure through value-enhancing growth or capital reduction • Group remains focused on effective resource allocation Barloworld Limited Interim Results for the six months ended 31 March 2018 6

Don Wilson Finance director

INCOME STATEMENT HIGHLIGHTS (Rm) 1H’18 1H’17 % chg Continuing operations Revenue 30 850 30 604 1 EBITDA 3 228 3 134 Operating profit 1 954 1 841 6 Fair value adjustments on financial instruments (127) (123) Net finance costs (519) (604) (14) Profit before non-operating and capital items 1 308 1 114 17 Non-operating and capital items (14) (38) Taxation (406) (261) Profit after tax 888 815 9 Income from associates & joint ventures 113 43 Profit for the year from continuing operations 1 001 858 17 Discontinued operation Profit / (loss) from discontinued operation 57 (93) Profit for the year 1 058 765 38 HEPS continuing operations (cents) 457.1 400.0 14 HEPS (cents) 481.3 364.9 32 Barloworld Limited Interim Results for the six months ended 31 March 2018 8

INCOME STATEMENT HIGHLIGHTS – REVENUE (Rm) 1H’18 1H’17 % chg Continuing operations Revenue 30 850 30 604 1 Equipment 12 489 11 084 13 Southern Africa 8 670 8 214 6 Russia 3 766 2 267 66 Handling 53 603 Automotive and Logistics 18 361 19 520 (6) Automotive 15 372 16 321 (6) Logistics 2 989 3 199 (7) Average exchange rates (Rands) 1H’18 1H’17 % chg United States Dollar 12.75 13.56 (6) Euro 15.34 14.57 5 British Sterling 17.42 16.91 3 Barloworld Limited Interim Results for the six months ended 31 March 2018 9

INCOME STATEMENT HIGHLIGHTS (Rm) 1H’18 1H’17 % chg Continuing operations Revenue 30 850 30 604 1 EBITDA 3 228 3 134 Operating profit 1 954 1 841 6 Fair value adjustments on financial instruments (127) (123) Net finance costs (519) (604) (14) Profit before non-operating and capital items 1 308 1 114 17 Non-operating and capital items (14) (38) Taxation (406) (261) Profit after tax 888 815 9 Income from associates & joint ventures 113 43 Profit for the year from continuing operations 1 001 858 17 Discontinued operation Profit / (loss) from discontinued operation 57 (93) Profit for the year 1 058 765 38 HEPS continuing operations (cents) 457.1 400.0 14 HEPS (cents) 481.3 364.9 32 Barloworld Limited Interim Results for the six months ended 31 March 2018 10

INCOME STATEMENT HIGHLIGHTS – OPERATING PROFIT (Rm) 1H’18 1H’17 % chg Continuing operations Revenue 30 850 30 604 1 EBITDA 3 228 3 134 Operating profit 1 954 1 841 6 Equipment 1 035 978 6 Southern Africa 734 713 3 Russia 310 263 18 Handling (9) 2 Automotive and Logistics 982 914 7 Automotive 883 863 2 Logistics 99 51 94 Corporate (63) (51) (23) Barloworld Limited Interim Results for the six months ended 31 March 2018 11

INCOME STATEMENT HIGHLIGHTS (Rm) 1H’18 1H’17 % chg Continuing operations Revenue 30 850 30 604 1 EBITDA 3 228 3 134 Operating profit 1 954 1 841 6 Fair value adjustments on financial instruments (127) (123) Net finance costs (519) (604) (14) Profit before non-operating and capital items 1 308 1 114 17 Non-operating and capital items (14) (38) Taxation (406) (261) Profit after tax 888 815 9 Income from associates & joint ventures 113 43 Profit for the year from continuing operations 1 001 858 17 Discontinued operation Profit / (loss) from discontinued operation 57 (93) Profit for the year 1 058 765 38 HEPS continuing operations (cents) 457.1 400.0 14 HEPS (cents) 481.3 364.9 32 Barloworld Limited Interim Results for the six months ended 31 March 2018 12

STATEMENT OF FINANCIAL POSITION (Rm) 1H’18 FY’17 Non-current assets 19 028 18 613 Current assets (excluding cash) 22 913 20 443 Cash and cash equivalents 2 172 3 925 Assets held for sale 3 245 3 343 Total assets 47 358 46 324 Interest of all shareholders 20 018 20 877 Total debt 11 761 9 678 Other liabilities 14 672 14 972 Liabilities held for sale 907 797 Total equity and liabilities 47 358 46 324 Net debt* 9 589 5 753 * Net debt 1H’17 R9 085m. Barloworld Limited Interim Results for the six months ended 31 March 2018 13

SUMMARISED STATEMENT OF CASH FLOWS (Rm) 1H’18 1H’17 Operating cash flows before working capital 3 416 3 262 Movement in working capital (3 075) (362) Net investment in leasing assets and vehicle rental fleet (1 775) (1 971) Cash (utilised in) / generated by operations (1 434) 929 Other net cash flows (1 097) (1 167) Dividends paid (606) (514) Net cash applied to operating activities (3 137) (752) Net cash used in investing activities (482) (105) Net cash outflow (3 619) (857) Barloworld Limited Interim Results for the six months ended 31 March 2018 14

INVESTMENT IN WORKING CAPITAL (Rm) 1H’18 1H’17 Inventories – movement (1 745) 56 Receivables – movement (1 148) (1 178) Payables – movement (182) 760 Total working capital (3 075) (362) (Rm) 1H’18 1H’17 Equipment southern Africa (1 578) 561 Equipment Europe (85) 76 Equipment Russia (255) (121) Handling 67 79 Automotive (773) (602) Logistics (359) (293) Corporate (92) (62) Total working capital (3 075) (362) Barloworld Limited Interim Results for the six months ended 31 March 2018 15

SUMMARISED STATEMENT OF CASH FLOWS (Rm) 1H’18 1H’17 Operating cash flows before working capital 3 416 3 262 Movement in working capital (3 075) (362) Net investment in leasing assets and vehicle rental fleet (1 775) (1 971) Cash (utilised in) / generated by operations (1 434) 929 Other net cash flows (1 097) (1 167) Dividends paid (606) (514) Net cash applied to operating activities (3 137) (752) Net cash used in investing activities (482) (105) Net cash outflow (3 619) (857) Barloworld Limited Interim Results for the six months ended 31 March 2018 16

DEBT MATURITY PROFILE Total interest bearing debt Redemption (Rm) Total Short-term Long-term South Africa 11 173 4 119 7 054 Offshore 588 340 248 Total debt Mar 2018 11 761 4 459 7 302 Total debt Mar 2017 12 315 4 182 8 133 Total debt Sept 2017 9 678 2 055 7 623 ▪ Ratio of long-term to short-term debt 62:38 (Sept 2017 – 79:21) ▪ BAW29, R400m 5 year bond issued in current year ▪ BAW3 and BAW8, R425m bonds repaid in current year ▪ R8.1bn (committed R7.1bn) unutilised bank facilities at March 2018 ▪ Cash and cash equivalents R2 172m (Sept 2017 – R3 925m) Barloworld Limited Interim Results for the six months ended 31 March 2018 17

CAPITAL STRUCTURE REMAINS STRONG Group segmental gearing ratios within target ranges: Debt to equity (%) Trading Leasing Car Rental Total group Target range 30 - 50 600 - 800 200 - 300 Gross Net Ratio at 29 521 254 59 48 31 March 2018 Ratio at 32 604 279 63 47 31 March 2017 Ratio at 21 560 203 46 28 30 Sept 2017 ▪ Net debt of R9 589m (Sept 2017: R5 753m) ▪ EBITDA interest cover 5.5 x (Sept 2017: 5.0 x) ▪ Net debt to EBITDA 1.4 x (Sept 2017: 0.9 x) ▪ Moody’s confirmed Global Scale Rating of Baa3 (stable outlook) and National Scale Rating of Aa1.za (stable outlook) Barloworld Limited Interim Results for the six months ended 31 March 2018 18

Equipment southern Africa Emmy Leeka