Barloworld Limited Results for the six months ended 31 March 2015 - PowerPoint PPT Presentation

Barloworld Limited Results for the six months ended 31 March 2015

Overview Clive Thomson CE, Barloworld Limited Barloworld Limited Results for the six months ended 31 March 2015

Salient features 3 ● Revenue up 3% to R30.7 billion ● Operating profit up 6% to R1 744 million ● Group operating margin increased from 5.5% to 5.7% ● Headline earnings per share from continuing operations up 16% to 367 cents ● Headline earnings per share up 9% to 367 cents ● Interim dividend per share increased 8% to 115 cents Barloworld Limited Results for the six months ended 31 March 2015

Overview and key developments 4 • Safety focus continues – no work-related fatalities Group • Proposed amendments to close out 2008 B-BBEE transaction Barloworld • Remain in JSE Socially Responsible Investment (SRI) Index • Resilient operating result despite weakness in mining and construction sectors Equipment southern Africa Equipment Iberia • Pleasing turnaround to profitability following actions taken to reduce cost base Equipment Equipment Russia • Challenging economic environment impacted by oil price decline and and international sanctions Handling • Growth in SA but reduced oil price impacts results in Angola and Russia Power systems • Reduced profitability impacted by Agriculture Russia losses Handling • Successfully integrated the Budget brand effective 1 Mar 2015 Car Rental • Acquired GM Ferndale in Cape Town effective 1 Dec 2014 Motor Retail Automotive and • Acquired leasing business in Tanzania effective 3 Nov 2014 Avis Fleet Logistics • Significant new contracts awarded and solid sales pipeline Logistics Barloworld Limited Results for the six months ended 31 March 2015

Financial overview Don Wilson Finance director Barloworld Limited Results for the six months ended 31 March 2015

Income statement highlights 6 1H’15 1H’14 (Rm) % chg Continuing operations Revenue 30 668 29 887 3 EBITDA 2 991 2 800 Operating profit 1 744 1 639 6 Fair value adjustments on financial instruments (158) (108) Net finance costs (559) (525) Profit before exceptional items 1 027 1 006 2 Exceptional items (12) (49) Taxation (321) (345) Income from associates 132 95 39 Net profit from continuing operations 826 707 17 HEPS – continuing operations (cents) 367 316 16 HEPS (cents) 367 336 9 Barloworld Limited Results for the six months ended 31 March 2015

Income statement highlights 7 1H’15 1H’14 (Rm) % chg Continuing operations Revenue 30 668 29 887 3 Equipment and Handling 14 254 14 771 (4) Southern Africa 9 618 3 9 927 Europe 1 861 2 277 (18) Russia 1 484 1 929 (23) Handling 982 947 4 Automotive and Logistics 16 414 15 112 9 Automotive 12 930 10 14 168 Logistics 2 182 3 2 246 Corporate 4 1H’15 1H’14 Average exchange rates (Rands) % chg United States Dollar 10.47 11.44 9 Euro 13.57 14.31 (5) British Sterling 17.77 17.22 3 Barloworld Limited Results for the six months ended 31 March 2015

Income statement highlights 8 1H’15 1H’14 (Rm) % chg Continuing operations Revenue 30 668 29 887 3 EBITDA 2 991 2 800 Operating profit 1 744 1 639 6 Fair value adjustments on financial instruments (158) (108) Net finance costs (559) (525) Profit before exceptional items 1 027 1 006 2 Exceptional items (12) (49) Taxation (321) (345) Income from associates 132 95 39 Net profit from continuing operations 826 707 17 HEPS – continuing operations (cents) 367 316 16 HEPS (cents) 367 336 9 Barloworld Limited Results for the six months ended 31 March 2015

Income statement highlights 9 1H’15 1H’14 (Rm) % chg Continuing operations Revenue 30 668 29 887 3 EBITDA 2 991 2 800 Operating profit 1 744 1 639 6 Equipment and Handling 940 923 2 Southern Africa 826 768 8 Europe 10 (32) Russia 156 (35) 101 Handling 3 31 Automotive and Logistics 836 775 8 Automotive 719 9 780 Logistics 56 56 Corporate (32) (59) Barloworld Limited Results for the six months ended 31 March 2015

Income statement highlights 10 1H’15 1H’14 (Rm) % chg Continuing operations Revenue 30 668 29 887 3 EBITDA 2 991 2 800 Operating profit 1 744 1 639 6 Fair value adjustments on financial instruments (158) (108) Net finance costs (559) (525) Profit before exceptional items 1 027 1 006 2 Exceptional items (12) (49) Taxation (321) (345) Income from associates 132 95 39 Net profit from continuing operations 826 707 17 HEPS – continuing operations (cents) 367 316 16 HEPS (cents) 367 336 9 Barloworld Limited Results for the six months ended 31 March 2015

Statement of financial position 11 1H’15 FY’14 (Rm) Continuing operations Non-current assets 17 708 17 287 Current assets (excluding cash) 27 141 22 557 Cash and cash equivalents 3 125 4 162 Total assets 47 974 44 006 Interest of all shareholders 17 909 17 486 Total debt 14 763 11 316 Other liabilities 15 302 15 204 Total equity and liabilities 47 974 44 006 Net debt 11 638 7 154 Barloworld Limited Results for the six months ended 31 March 2015

Summarised statement of cash flows 12 1H’15 1H’14 (Rm) Operating cash flows before working capital 3 214 2 925 Increase in working capital (3 944) (3 234) Net investment in leasing assets and vehicle rental fleet (1 421) (1 713) Cash utilised in operations (2 151) (2 022) Other net cash flows (1 005) (935) Dividends paid (531) (481) Net cash applied to operating activities (3 687) (3 438) Net cash applied to investing activities (503) (440) Net cash outflow (4 190) (3 878) Barloworld Limited Results for the six months ended 31 March 2015

Investment in working capital 13 1H’15 1H’14 (Rm) Inventories – (increase) (2 427) (1 737) Receivables – (increase) (1 123) (820) Payables – (decrease) (394) (677) Total working capital – (increase) (3 944) (3 234) 1H’15 1H’14 (Rm) Equipment southern Africa (2 039) (2 373) Equipment Europe (16) (70) Equipment Russia 140 (243) Handling (590) (181) Automotive (811) (147) Logistics (307) (252) Corporate (321) 32 Total working capital – (increase) (3 944) (3 234) Barloworld Limited Results for the six months ended 31 March 2015

Capital structure remains strong 14 Group segmental gearing ratios Debt to equity (%) Trading Leasing Car Rental Total group Target range 30 - 50 600 - 800 200 - 300 Gross Net Ratio at 31 Mar 2015 56 634 229 82 65 Ratio at 31 Mar 2014 53 599 219 79 68 40 662 205 65 41 Ratio at 30 Sept 2014 ● Net debt of R11 638m (Mar 2014: R11 198m) increased by R440m ● Net debt to equity ratio 65% (Mar 2014: 68%) ● EBITDA interest cover 5.0 x (Mar 2014: 5.2 x) Barloworld Limited Results for the six months ended 31 March 2015

Debt maturity profile 15 Interest bearing debt Redemption (Rm) Total Short-term Long-term South Africa 13 040 6 130 6 910 Offshore 1 723 486 1 237 Total debt March 2015 14 763 6 616 8 147 Total debt March 2014 13 008 4 777 8 231 Total debt September 2014 11 316 4 395 6 921 ● Ratio of long-term to short-term debt 55:45 (Sept 2014 – 61:39) ● Refinancing of BAW2, BEE loan of R1.2bn and off shore PLC bilaterals underway ● R5.1bn unutilised bank facilities at Mar 2015 ● Cash and cash equivalents R3 125m (Sept 2014 – R4 162m) ● R710m 7yr fixed-rate bond raised in Mar Barloworld Limited Results for the six months ended 31 March 2015

Close out of 2008 B-BBEE transaction 16 ● Sept 2008 transaction matures Sept 2015 ● Proposed amendments – Circular distributed to shareholders 15 May 2015 ● Amendments will unlock value for BEE participants and increase Barloworld black ownership ● Proposed share buyback to minimise shareholder dilution ● Shareholder approval – special general meeting to be held 19 Jun 2015 Barloworld Limited Results for the six months ended 31 March 2015

Close out of 2008 B-BBEE transaction – financial impact 17 IFRS2 charge Cashflow Shares (Rm) (Rm) issued Original agreement Estimated cash value accumulated in structure of R269.9m Compulsory subscription price per share of R179.69 1 501 901 shares subscribed for by BEE parties at R179.69 269.9 1 501 901 Proposed amendments Termination of compulsory subscription and lock-in 155.3 Additional allocation of 450 000 shares with lock-in 42.8 450 000 Proposed share buyback Share buyback (1 951 901 shares @ R95.1) (185.6) (1 951 901) Total 198.1 84.3 - Barloworld Limited Results for the six months ended 31 March 2015

Divisional overview Barloworld Limited Results for the six months ended 31 March 2015

Divisional overview Equipment southern Africa Barloworld Limited Results for the six months ended 31 March 2015

Operational review – Equipment southern Africa 20 ● Operating profit up 8% despite continued weakness in the mining sector ● Parts sales growth and improvement in service productivity ● Cost control and efficiency optimisation contributed to margin improvement ● Income from associates and joint ventures in line with prior period Margin Operating profit (Rm) 8.3% Southern Africa 8.0% 0 500 1 000 1H'15 1H'14 Barloworld Limited Results for the six months ended 31 March 2015

Southern Africa sales history 21 Rbn 20 46% 41% 33% 15 36% 28% 34% 10 51% 30% 46% 5 37% 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 1H'15 Equipment sales Product support Barloworld Limited Results for the six months ended 31 March 2015