MERRILL LYNCH CONFERENCE 12 -13 March 2019 GROUP HIGHLIGHTS - 2018 - PowerPoint PPT Presentation

MERRILL LYNCH CONFERENCE 12 -13 March 2019

GROUP HIGHLIGHTS - 2018 Total dividend per share (cents) HEPS growth % 1500.0 18% 500 18% BEE transaction 5% 400 462 1000.0 -5% 1150.9 390 approved 300 975.0 345 838.0 200 on 14 Feb 2019 500.0 100 0.0 0 2016 2017 2018 2016 2017 2018 Iberia exit generates Free Cash (Rbn) ROE % R2.5bn in cash 8.0 15 11.4 10.5 6.0 9.3 10 4.3 3.6 3.4 4.0 Logistics 5 2.0 turnaround on track 0.0 0 2016 2017 2018 2016 2017 2018 Barloworld Limited Merrill Lynch Conference March 2019

SEGMENTAL 12 MONTH ROLLING ROIC – HURDLE RATE 13.0% 21.6% 19.5% 18.4% 18.1% WACC 12.5% 14.5% 13.1% 12.7% 12.8% 12.8% 12.4% 12.3% 11.2% 9.4% 8.7% 9.5% 7.8% 6.0% 4.5% 2.5% -0.5% Equipment Equipment Automotive Logistics Group southern Russia Africa -5.5% AVERAGE INVESTED CAPITAL R11.5bn R2.8bn R9.8bn R2.6bn R29.4bn FY16 FY17 R10.2bn R2.6bn R10.0bn R2.4bn R27.1bn FY18 R10.9bn R2.9bn R10.0bn R1.9bn R26.3bn Barloworld Limited Merrill Lynch Conference March 2019

CORPORATE LEVEL STRATEGY UPDATE FIX OPTIMISE GROW Address underperforming Realise full potential of Targeted growth: business units: business units:  Considering  Iberia exit complete –  Equipment SnA operational opportunities that fit the group’s capabilities Released R2.5bn transformation   Logistics turnaround Motor Retail restructure and Optimise group on track cost optimisation capital structure: Optimal capital allocation  Further asset disposals in  Through value- across portfolio: Logistics (SmartMatta, ME) enhancing growth or  Restructure of Leasing and Rental capital reduction Assets Invested Capital 4.0 2.5 2.0 Iberia Auto Leasing Equip Rental ACTIVE SHAREHOLDER  Allocate Resources, Capital and Talent across the group  Strengthened group’s core capabilities to deliver on new strategy Barloworld Limited Merrill Lynch Conference March 2019

INCOME STATEMENT HIGHLIGHTS FROM CONTINUING OPERATIONS Revenue Operating profit Profit before non-operating & capital items R63.4bn R4.4bn R3.2bn up 2% up 8% up 22% (FY17: R62bn) (FY17: R4.1bn) (FY17: R2.7bn) Headline earnings per share Effective tax rate Income from associates 1 151 cents 28.5% R235m up 18% (FY17: 23.9%) up 153% (FY17: 975 cents) (FY17: R93m) Barloworld Limited Merrill Lynch Conference March 2019

DIVISIONAL OVERVIEW EQUIPMENT SOUTHERN AFRICA

OPERATIONAL REVIEW - EQUIPMENT SOUTHERN AFRICA  Revenue up 8% due to improved machine sales growth of 21%  Operating margin decreased to 9.1% due to sales mix, exchange rate impact and investment in operational and digital transformation  Solid performance in the DRC JV significantly boosting attributable income  Marginal decrease in return on invested capital (ROIC) to 12.7% (2017:12.8%) Operating profit (Rm) Margin Sept 2018 Sept 2017 9.1% Southern Africa 9.8% 0 500 1 000 1 500 2 000 Barloworld Limited Merrill Lynch Conference March 2019

AFTERMARKET CONTRIBUTION REMAINS STRONG Rbn Equipment sales Product support 25 60% 50% 46% 20 50% 52% 41% 56% 40% 57% 15 33% 30% 28% 36% 10 34% 20% 30% 46% 5 10% 0 0% 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Barloworld Limited Merrill Lynch Conference March 2019

SOUTHERN AFRICA REVENUE BY LINE OF BUSINESS - SEPTEMBER 2018 2017 4% 6% 5% 10% 29% 37% 52% 57% New equipment Product support Used equipment Rental Barloworld Limited Merrill Lynch Conference March 2019

SOUTHERN AFRICA NEW EQUIPMENT SALES BY INDUSTRY - SEPTEMBER 2018 2017 16% 20% 23% 30% 14% 8% 49% 40% Mining Construction Energy & Transportation Power Contract mining Barloworld Limited Merrill Lynch Conference March 2019

BARTRAC JV IN DRC DELIVERS SOLID PERFORMANCE ASSOCIATE INCOME (Rm) 300 265 251 250 200 150 97 100 50 13 0 FY 2015 FY 2016 FY 2017 FY 2018  Economic outlook in the DRC remains stable post elections  Key customers continue to invest in existing operations focusing on productivity improvements  Outlook for BARTRAC expected to be in line with prior year Barloworld Limited Merrill Lynch Conference March 2019

MINING OPPORTUNITIES Delivered FY18 to date Greenfields/Major Projects Firm order Luaxe Venetia 8 units 20 units 1 unit ZAMBIA $100m <$1m $14,1m ANGOLA MOZAMBIQUE Mopani Mota Engil 17 units 35 units $11.3m $101m BOTSWANA ZIMBABWE Platreef Vale 20 units 2 units NAMIBIA $50m $13m Trollope Mogalakwena 3 units 6 unit 12 units $4.6m $7m $50m RSA Tharisa Gamsberg 11 units 24 units $16m $80m Belfast Kolomela 25 units $200m $80m Barloworld Limited Merrill Lynch Conference March 2019

COMMODITY MIX – MINING UNIT SALES BY COMMODITY - 2012 - 2018 Glencore Exxaro COAL South 32 Vale Mopani Copper Palabora Copper Zinc COPPER Vedanta DML Uranium 1% 1% Barrick FQM Rental 12% Coal Namdeb DeBeers 23% DIAMONDS Petra Debswana Platinum Catoca 2% New Kleinfontein GOLD B2Gold Other Gold One 7% Sishen Manganese IRON ORE Assmang Kolomela 3% Iron Ore UMK 4% MANGANESE South 32 Assmang Gold 4% PGM Impala PLATINUM Contractors Anglo Platinum Tharisa 18% Diamonds URANIUM Rossing Uranium Swakop Uranium 13% Copper 12% Skorpion ZINC Rosh Pinah Barloworld Limited Merrill Lynch Conference March 2019

EQUIPMENT SOUTHERN AFRICA OUTLOOK  Commodities fundamentals remain favourable  Government commitment in Infrastructure  Mining investments to boost growth  Competitive aftermarket solutions to drive aftermarket growth  Investment in operational and digital transformation  Continued focus to improve returns in underperforming businesses  Firm order book as at February 2019 - R2.36bn Order book (Rbn) Sep-18 2.4 1.5 Sep-17 Barloworld Limited Merrill Lynch Conference March 2019

DIVISIONAL OVERVIEW EQUIPMENT RUSSIA

OPERATIONAL REVIEW – RUSSIA  Record results with revenue of $606m, up 57%, driven by strong prime product sales, particularly gold and coal, including $100m Polyus project  Operating profit of R804m - US Dollar terms up 41% to $61.7m (2017: $43.7m)  Operating margin impacted by sales mix  Continued aftermarket growth from direct parts sales, component and machine rebuilds  Return on invested capital of 21.6%, economic profit of $20m and positive cash generation of $22.2m Operating profit (Rm) Sept 2018 Sept 2017 Margin 10.3% 38% Russia 11.3% 0 250 500 750 1 000 Barloworld Limited Merrill Lynch Conference March 2019

AFTERMARKET CONTRIBUTION DRIVING PROFITABILITY $m Equipment sales Product support 700 600 37% 500 33% 27% 400 51% 28% 46% 300 51% 25% 61% 200 36% 24% 29% 100 - 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Barloworld Limited Merrill Lynch Conference March 2019

RUSSIA REVENUE PROFILE BY LINE OF BUSINESS – SEPTEMBER 2018 2017 1%2% 1% 2% 1% 3% 45% 57% 37% 51% New equipment Product support Technology Used equipment Rental Barloworld Limited Merrill Lynch Conference March 2019

RUSSIA NEW EQUIPMENT SALES BY INDUSTRY – SEPTEMBER 2018 2017 4% 2%1% 3% 1% 7% 10% 13% 76% 83% Mining Infrastructure Energy & Transportation SEM Other Barloworld Limited Merrill Lynch Conference March 2019

MINING OPPORTUNITIES Delivered in FY 2018 Greenfields/Major Projects Firm order Polyus Alrosa 35 units 40 units 10 units 15 units $122.2m $116.7m $8m $9.9m Anadyr Norilsk Nickel Pavlik 17 units 6 units 5 units 14 units $15.8m $4.6m $4.5m $14m Magadan Norilsk KRU Kekura Petropavloysk- 23 units 2 units 11 units 11 units Yakutsk Mirniy Kamchatskiy $44.6m $2.9m $11.8m $8.1m Nerungry Omsk Tomsk Arshanovskiy Service Integrator Achinsk Novosibirsk 14 units 14 units 17 units 14 units 7 units KemerovoKrasnoyarsk $15.4m $13m $15.9m $8.1m $4.2m Chita Barnaul Irkutsk Ulan-Ude Zadubrovskiy Noviy NordGold 20 units 6 units 30 units 6 units 7 units 16 units $18.8m $5.4m $23.4m $14.4m $16.7m $25.5m Barloworld Limited Merrill Lynch Conference March 2019

EQUIPMENT RUSSIA – GEOPOLITICAL LANDSCAPE  Increased duties on US Sourced Products: • Large machines: TTT, wheel loaders, motor graders, mining trucks, wheel dozers, pipelayers  Potential sanctions under consideration by US Senate / Congress: • Chemical warfare act on the basis of Skripal poisoning • Defending American Security Against Kremlin Aggression Act (meddling in elections)  Rusal sanctions lifted following Deripaska’s removal as majority owner  Russian economy showing small growth despite the sanctions  Commodities driving revenue include coal, gold, nickel and copper Barloworld Limited Merrill Lynch Conference March 2019