Barloworld Limited Year end results 30 September 2012 19 November 2012
Overview Clive Thomson CEO, Barloworld Limited
Salient features • Revenue up 18% to R58.6bn • Operating profit up 31% to R2 988m • Profit before exceptional items up 38% to R2 119m • HEPS up 46% to 680 cents (2011: 465 cents) • Return on net operating assets 18.8% (2011: 17.1%) • Total dividend of 230 cents per share up 48% 3
Key strategic developments • Bucyrus Africa and Eqstra mining services acquired for R1 381m • Reached agreement to acquire Bucyrus Russia effective 3 December for R436m • Finalised agreement to convert Congo Equipment in the DRC into a 50 year JV Equipment • EMD Africa JV with Electromotive Diesel to capture locomotive and rail services opportunities • MWM distribution rights for gas engines in southern Africa and Russia • Acquired Avis Coach Charter • Opened Soweto Toyota and Soweto VW joint venture dealerships Automotive • Acquired fuel management company and remaining 50% of Phakisaworld and Logistics • Expanded Avis Fleet Services into Ghana • Acquired specialised chemical transporter and formed Manline JV • Acquired 25% Logistics minority • Disposed of Handling US for R465m in complex transaction involving split of dealership territory Handling • Successfully concluded disposal of Handling UK for R626m • Expanded agriculture business in Siberia, western Russia and Mozambique 4
Financial Review Don Wilson Finance Director
Income statement highlights (Rm) FY’11 FY’12 % chg Revenue 49 823 58 554 18 EBITDA 3 993 4 905 Operating profit 2 289 2 988 31 Fair value adjustments on financial instruments (93) (65) Net finance costs (693) (776) Profit before exceptional items 1 531 2 119 38 Exceptional items 190 62 Taxation (566) (789) Secondary Tax on Companies (18) (26) Income from associates 141 71 Net profit 1 080 1 635 51 HEPS (cents) 465 680 46 6
Income statement highlights (Rm) FY’11 FY’12 % chg 49 823 Revenue 58 554 18 Equipment 24 273 18 687 30 30 Southern Africa 16 326 12 578 17 Europe 4 180 3 574 Russia 3 767 2 535 49 Automotive and Logistics 29 490 26 415 12 Handling 4 774 4 709 1 Corporate 17 12 Average exchange rates (Rands) FY’11 FY’12 United States Dollar 8.02 6.91 Euro 9.67 10.45 British Sterling 11.12 12.69 7
Income statement highlights (Rm) FY’11 FY’12 % chg Revenue 49 823 58 554 18 EBITDA 3 993 4 905 Operating profit 2 289 2 988 31 Fair value adjustments on financial instruments (93) (65) Net finance costs (693) (776) Profit before exceptional items 1 531 2 119 38 Exceptional items 190 62 Taxation (566) (789) Secondary Tax on Companies (18) (26) Income from associates 141 71 Net profit 1 080 1 635 51 HEPS (cents) 465 680 46 8
Income statement highlights (Rm) FY’11 FY’12 % chg Revenue 49 823 58 554 18 EBITDA 3 993 4 905 2 289 Operating profit 2 988 31 Equipment 1 740 1 352 29 Southern Africa 1 535 1 228 25 Europe (139) (102) Russia 344 226 52 Automotive and Logistics 1 152 911 26 Handling 38 72 Corporate 58 (46) 9
Income statement highlights (Rm) FY’11 FY’12 % chg Revenue 49 823 58 554 18 EBITDA 3 993 4 905 Operating profit 2 289 2 988 31 Fair value adjustments on financial instruments (93) (65) Net finance costs (693) (776) Profit before exceptional items 1 531 2 119 38 Exceptional items 190 62 Taxation (566) (789) Secondary Tax on Companies (18) (26) Income from associates 141 71 Net profit 1 080 1 635 51 HEPS (cents) 465 680 46 10
Statement of financial position (Rm) FY’11 FY’12 Non-current assets 12 667 13 470 Current assets (excluding cash) 15 498 19 716 Cash and cash equivalents 2 754 2 624 Assets classified as held for sale 0 13 30 932 Total assets 35 810 Interest of all shareholders 12 652 13 167 Total debt 10 088 7 243 Other liabilities 11 037 12 555 30 932 Total equity and liabilities 35 810 Net debt 4 489 7 464 11
Summarised statement of cash flows (Rm) FY’11 FY’12 Operating cash flows before working capital 4 528 5 199 Increase in working capital (27) (3 128) Net investment in leasing assets and vehicle rental fleet (1 397) (2 114) Cash utilised in operations (43) 3 104 Other net cash flows (1 189) (1 311) Dividends paid (257) (443) Net cash applied to operating activities (1 797) 1 658 Net cash used in investing activities (712) (1 120) 946 Net cash (outflow)/inflow (2 917) 12
Investment in working capital supports revenue growth (Rm) FY’11 FY’12 Inventories – (increase) (1 359) (3 147) Receivables – (increase) (791) (937) Payables – increase 2 123 956 Total working capital – (increase) (3 128) (27) (Rm) FY’12 FY’11 Equipment southern Africa 100 (1 879) Equipment Europe 5 212 Equipment Russia (791) (135) Automotive and Logistics (37) (211) Handling and other 40 (459) Total working capital – (increase) (27) (3 128) 13
Capital structure remains strong Group segmental gearing ratios are as follows: Debt to equity (%) Trading Leasing Car Rental Total group Target range 30 - 50 600 - 800 200 - 300 Gross Net Ratio at 30 Sept 2012 50 472 217 77 57 Ratio at 30 Sept 2011 30 577 196 57 36 • Net debt of R7 464m (Sep 2011: R4 489m) increased by R2 975m • EBITDA interest cover 5.9 x (Sep 2011: 5.3 x) • Fitch A+ rating maintained, stable outlook 14
Debt maturity profile Interest bearing debt Redemption (Rm) Total Short-term Long-term South Africa 8 958 2 138 6 820 Offshore 1 130 902 228 Total debt September 2012 10 088 3 040 7 048 Total debt September 2011 7 243 1 721 5 522 • Ratio of long-term to short-term debt 70:30 (Sep 2011 – 76:24) • New 3 and 5 year bonds raised in April, R760m to extend maturity profile • R1bn 18 month note to fund Bucyrus southern Africa acquisition • R6.4bn unutilised bank facilities at Sept 2012 • Cash and cash equivalents R2 624m (Sept 2011 – R2 754m) 15
Divisional overview Equipment southern Africa
Operational review – Equipment southern Africa Performance • Revenue up 30% to R16.3bn • Operating profit up 25% to R1 535m • Profit boosted by increased demand for mining machinery in South Africa, Zambia and Botswana • Angolan recovery continues on back of infrastructure investments • Investments in product support capability underpin parts and service growth • Market leadership position maintained Operating profit (Rm) Margin 9.4% 25% Southern Africa 9.8% 0 1 000 2 000 Sep 2012 Sep 2011 17
Status of Bucyrus transaction • Acquisition of Bucyrus Africa and Eqstra Mining Services business for US$164m successfully concluded on 2 July 2012 • Bedding down and integrating the business • Focused management team in place • Significant machine sale opportunities being pursued • Plans established to drive up after sales activity • Earnings impact not material in 2012 18
Most extensive mining product range in the industry Open Pit Surface Mining Underground Mining Room and Pillar Hard Rock Longwall 19
BENIN GHANA TOGO COTE ETHIOPIA D`IVOIRE CENTRAL AFRICAN Major surface mining opportunities REPUBLIC IA CAMEROON Copper Iron ore Coal UGANDA Uranium KENYA GABON RWANDA DEMOCRATIC REPUBLIC BURUNDI Jindal FQM – Kalumbila Barrick – Lumwana Vale and Rio Tinto – Tete OF THE CONGO (ZAIRE) TANZANIA Bannerman – Etango Anglo Coal- Revuboe MALAWI ANGOLA ZAMBIA Extract Resources – Husab Zonnebloem Xstrata ZIMBABWE NAMIBIA Kumba – Sishen ResGen – Boikarabelo BOTSWANA SWAZILAND Exxaro – Belfast Project CoAL – Makhado LESOTHO SOUTH AFRICA Xstrata – Tweefontein Anglo – New Largo 20
BENIN GHANA TOGO COTE ETHIOPIA D`IVOIRE CENTRAL AFRICAN Major underground mining opportunities REPUBLIC IA CAMEROON Copper Diamonds Coal UGANDA KENYA GABON RWANDA DEMOCRATIC REPUBLIC BURUNDI Hwange Zimbabwe Glencore – Mopani OF THE CONGO (ZAIRE) TANZANIA Debswana Morupule Mabila Ermelo Project MALAWI ANGOLA ZAMBIA DeBeers Venetia Sasol Impumelelo ZIMBABWE NAMIBIA Total Forzando West Exxaro – Matla BOTSWANA SWAZILAND Xstrata – Tweefontein Sasol Bossjespruit LESOTHO SOUTH AFRICA Anglo – New Denmark Anglo – Goedehoop 21
Progress on Bucyrus opportunities in Zambia Confirmed order from FQM for mining machinery worth US$115m 3 Electric Rope Shovels (Model 7495) • first machine due for delivery during February 2013 • planned commissioning during July 2013 • second and third machines to follow at roughly three month intervals 7 Rotary Blast hole Drills (Model 6640) • first machine due for delivery during September 2013 • planned commissioning during January 2014 • final machine to be commissioned mid 2015 22
Congo Equipment JV extension Joint Venture Extension - Tractafric • Excellent result: equity accounted share of the JV profits more than doubling from R63m to R138m • Term of the JV agreement previously scheduled to terminate in 2017, extended 50 years from October 2012 • Major customers include Tenke Fungurume Mining (Freeport) and Katanga Mining (Glencore) • Strong growth in aftersales 23
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