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BAW/BAWP/BWL - Trading Statement
Barloworld Limited
(Incorporated in the Republic of South Africa)
(Registration number 1918/000095/06)
(Share code: BAW)
(JSE ISIN: ZAE000026639)
(Share code: BAWP)
(JSE ISIN: ZAE000026647)
(Bond issuer code: BIBAW)
("Barloworld” or “the Company")
TRADING STATEMENT
Trading summary for 6 months ended 31 March 2014:
The group has continued its solid performance in the first six months to 31 March 2014 with
headline earnings per share (HEPS) including discontinued operations expected to be 8% to
12% higher than the comparable restated HEPS of 304 cents in the prior period (as set out
below). HEPS from continuing operations are expected to be 7% to 11% higher than the
comparable restated HEPS from continuing operations of 291 cents (as set out below).
Equipment southern Africa delivered a strong overall result for the first half despite the
ongoing slowdown in the mining sector. Higher than planned activity in the Extended
Mining Product Range (EMPR) and growth in aftermarket revenues contributed positively to
the results.
Trading in Equipment Russia was under pressure due to ongoing project deferments in the
mining sector and slower economic growth exacerbated by uncertainty resulting from the
Ukraine crisis.
Construction activity in Equipment Iberia remains subdued notwithstanding early signs of
improving economic conditions in Spain.
The Automotive and Logistics division has traded strongly with all business units performing
well ahead of the prior period. At 31 March 2014 the group disposed of the remainder of its
motor retail operations in Australia. The exit of these operations resulted in an exceptional
profit of R370 million including the realisation of foreign currency translation reserves.
Basic earnings per share (EPS) including discontinued operations are expected to be 60% to
80% higher than the restated Basic EPS of 289 cents (as set out below) in the prior period
due to the exceptional profit generated on the disposal of the Australian motor retail
operations. Basic EPS from continuing operations are expected to be 6% to 8% higher than
last year’s comparable restated Basic EPS of 275 cents (as set out below).
Changes in Accounting Policies and Discontinued Operations:
Barloworld’s results for the half year ended 31 March 2013 and year ended 30 September
2013 have been restated to reflect changes in accounting policies as well as the disclosure of
the Australian motor retail interests as discontinued operations.
Changes in accounting policy resulting from applying IAS19 (revised) (employee benefits)
and IFRS10 (consolidated financial statements), resulted in a restatement of prior year
results on a comparable basis.
The revised IAS19 standard requires the recognition in earnings of a net interest expense on
the pension fund deficit. In addition, administration expenses (excluding investment
expenses) are also recognised in earnings. For the year ended September 2013 the
recognition of the administration expenses in earnings and the restatement of income
recognised on plan assets reduced operating profit by R64 million (March 2013: R24
million). Net finance costs increased by R30 million (March 2013: R19 million) with a net
after tax profit reduction of R83 million (March 2013: R34 million). This represents a 39
cents (March 2013: 17 cents) reduction in headline earnings per share.
In terms of IFRS10, certain cell captives are now disclosed as investments in terms of IAS 39
and no longer consolidated. While this impacts group operating income there is no impact
on headline earnings.
Following the disposal of the group’s motor retail interests in Australia, the results have
been disclosed as discontinued operations and comparatives restated on a comparable
basis. The restated basic earnings per share from continuing operations for the six months
ended 31 March 2013 is 275 cents per share and the restated basic headline earnings per
share from continuing operations is 291 cents per share.
The tables below summarise the impact of the restatement on Basic and Headline EPS:
Impact of restatements
Six
months Year ended
Cents per share ended
31-Mar-13 30-Sep-13
Reviewed Audited
Basic EPS previously reported 305.3 801.9
IAS 19 Employee benefits -16.6 -38.9
Basic EPS restated 288.7 763
Discontinued operations - Australia -13.4 -23.1
Basic Continuing EPS restated 275.3 739.9
Six
months Year ended
Cents per share ended
31-Mar-13 30-Sep-13
Reviewed Audited
Basic HEPS previously reported 320.9 859.7
IAS 19 Employee benefits -16.6 -38.9
Basic HEPS restated 304.3 820.8
Discontinued operations - Australia -13.3 -41.2
Basic Continuing HEPS restated 291.0 779.6
Funding:
Net debt increased in the first half as a result of the seasonal increase in working capital but
is expected to reduce significantly in the second half of the year. On 1 April 2014 the final
proceeds from the disposal of the Australian motor retail business were received which will
further reduce group net debt in the second half.
Barloworld Limited expects to announce its results for the six months to 31 March 2014 on
19 May 2014.
This financial information on which the trading statement has been based has not been
reviewed or reported on by Barloworld’s auditors.
Sandton Sponsor:
08 May 2014 J.P. Morgan Equities South Africa (Pty) Ltd.
About Barloworld
Barloworld is a distributor of leading international brands providing integrated rental, fleet
management, product support and logistics solutions. The core divisions of the group
comprise Equipment and Handling (earthmoving, power systems, materials handling and
agriculture), Automotive and Logistics (car rental, motor retail, fleet services, used vehicles
and disposal solutions, logistics management and supply chain optimisation). We offer
flexible, value adding, integrated business solutions to our customers backed by leading
global brands. The brands we represent on behalf of our principals include Caterpillar,
Hyster, Avis, Audi, BMW, Ford, General Motors, Mazda, Mercedes-Benz, Toyota,
Volkswagen, Massey Ferguson and others.
Barloworld has a proven track record of long-term relationships with global principals and
customers. We have an ability to develop and grow businesses in multiple geographies
including challenging territories with high growth prospects. One of our core competencies
is an ability to leverage systems and best practices across our chosen business segments. As
an organisation we are committed to sustainable development and playing a leading role in
empowerment and transformation. The company was founded in 1902 and currently has
operations in 24 countries around the world with approximately 70% of just over 19 100
employees in South Africa.
Corporate information
Registered office and business address
Barloworld Limited, 180 Katherine Street
PO Box 782248, Sandton, 2146, South Africa
Tel +27 11 445 1000
Email invest@barloworld.com
Directors
Non-executive: DB Ntsebeza (Chairman), NP Dongwana, NO Edozien^, AGK Hamilton*,
A Landia~, SS Mkhabela, B Ngonyama, SS Ntsaluba, SB Pfeiffer•
Executive: CB Thomson (Chief Executive), PJ Blackbeard, PJ Bulterman, M Laubscher,
DM Sewela, OI Shongwe, DG Wilson
^Nigerian *British ~German •American
Group company secretary: Lerato Manaka
Enquiries: Barloworld Limited: Lethiwe Motloung
Tel +27 11 445 1000
E-mail invest@barloworld.com
College Hill: Amelia Soares, Tel +27 11 447 3030
E-mail amelia.soares@collegehill.co.za
Date: 08/05/2014 04:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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