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Fitch Ratings affirms Barloworld Ltd at 'AA-(Zaf)'; Outlook Stable
Barloworld Limited
(Incorporated in the Republic of South Africa)
(Registration number 1918/000095/06)
(Bond issuer code: BIBAW)
(“Barloworld” or “the Company”)
Fitch Ratings affirms Barloworld Ltd at 'AA-(Zaf)'; Outlook Stable
Notice is hereby given that Fitch Ratings-Johannesburg/ London, has on 11 February 2013,
affirmed Barloworld Ltd’s (‘‘Barloworld’’) National Long-term rating at 'AA-(zaf)' and domestic
medium term note (DMTN) senior unsecured issue rating at 'AA-(zaf)'.The agency has upgraded
the National Short-term rating to 'F1+(zaf)' from 'F1(zaf)' in line with the mapping between the
Long-term and Short-term National Rating. The Outlook on the National Long-term rating is
Stable.
The affirmation and Stable Outlook are underpinned by the group's stable financial profile with
FFO adjusted net leverage expected to be maintained in the region of 2.1x-1.5x (below Fitch's
guideline of 2.5x) over the short to medium term, and operating profit margins to be sustained
above 4.5% over the same period. Despite trading uncertainty, the key factors supporting the
group's financial profile are prudent financial policies, stringent cost control and optimal capital
deployment and returns. The group also benefits from the recurrent nature of some of its
operations, notably the maintenance and repair-related as well as the logistic and fleet
management businesses.
Fitch expects that Barloworld will benefit from its strong ZAR5.7bn Southern Africa equipment
order book for at least the next 12 to 24 months, with stable demand for power and infrastructure
linked commodities expected to support future order book growth. The positive momentum in
Barloworld's automotive operations is expected to continue over the next two years, albeit at a
slower pace due to continuing pressure on consumers' disposable income and intense market
competition. However, we expect operating margins to remain relatively stable in view of cost
control and ongoing operational rationalisation.
Fitch also notes that Barloworld's ratings will likely be constrained at the 'AA-(zaf)' level given the
group's significant exposure to cyclical end-markets and trading conditions concentrated to the
South African economy.
Johannesburg
13 February 2012
Debt Sponsor
Absa Bank Limited (acting through its Corporate and Investment Banking division)
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