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Interim results for the six months ended 31 March 2014
Barloworld Limited
(Incorporated in the Republic of South Africa)
(Registration number 1918/000095/06)
(Income Tax Registration number 9000/051/71/5)
(Share code: BAW)
(JSE ISIN: ZAE000026639)
(Share code: BAWP)
(JSE ISIN: ZAE000026647)
(Bond issuer code: BIBAW)
(“Barloworld” or “the Company”)
Barloworld Limited Interim results for the six months ended 31 March 2014
Salient features
- Revenue up 5% to R29.9 billion
- Operating profit up 18% to R1 639 million
- Motor retail Australia disposal for R1.3 billion
- HEPS up 10% to 336 cents
- Interim dividend per share up 10% to 106 cents
- Basic EPS of 494 cents up 71%
Clive Thomson, CE of Barloworld, said:
The group delivered a sound performance in the first half with operating profits up 18% and headline earnings per
share increasing by 10%.
Our Equipment business in southern Africa delivered a good overall result despite the ongoing challenges in the mining
sector. Revenues were bolstered by a strong performance from the Extended Mining Product Range (EMPR) and continued
aftermarket growth. In Russia our business held up relatively well despite slowing economic growth and political
uncertainty arising from the Ukraine crisis.
The Automotive and Logistics division traded strongly with all business units performing well ahead of the prior year.
Our Australian motor retail operations were disposed in the period for R1.3 billion realising a profit of R370 million.
This continues our strategic objective to redeploy capital into those businesses earning the highest financial returns.
Overall the group is expected to produce a solid result for the full year and is well placed to benefit once the
global mining cycle moves into a recovery phase.
19 May 2014
Chairman and Chief Executive’s report
Overview
Revenue from continuing operations to March of R29.9 billion was 5% up on 2013 while operating profit of R1 639 million
was R255 million (18%) ahead of last year. This resulted in an improved operating margin of 5.5% (1H’13: 4.8%)
for the six months.
The group generated total headline earnings per share (HEPS) of 336 cents (including 20 cents from discontinued
operations) which exceeded the prior year by 10%.
Our Australian motor retail interests were disposed of in two separate transactions for a total of R1.3 billion and
are disclosed as discontinued operations in the results for the period, with comparatives restated accordingly.
HEPS from continuing operations of 316 cents exceeded the restated continuing HEPS for 2013 of 291 cents per share by 9%.
A dividend of 106 cents per share was declared compared to 96 cents last year, an increase of 10%.
Operational review
Equipment and Handling
Equipment southern Africa
As reported in our outlook at the end of last year, mining in southern Africa remains challenging with the major
mining companies continuing to cut or defer capital expenditure. However, we continue to service the large existing
population of Caterpillar equipment which has led to ongoing growth in our aftermarket revenues.
We have seen some improvement in our construction business in South Africa particularly with the mid-tier contractors
although the projects are of smaller scale and shorter duration.
The division generated revenue to March of R9.6 billion compared to R9 billion in the prior year. The bulk of the
increase came from the extended mining product range (EMPR) which increased current year revenue by R391 million (27%)
driven by deliveries to Swakop Uranium in Namibia and First Quantum Minerals (FQM) in Zambia, together with a rise in
after-sales revenues.
Operating profit to March of R768 million exceeded the prior year by R114 million (17%) with an improved operating
margin of 8% compared to 7.2% last year.
The firm order book at March stood at R2.8 billion which was below the September reported level of R3.5 billion
following the commencement of deliveries to the Swakop Uranium and FQM Kulumbila projects. Contract mining activity has
however increased of late with a number of projects awaiting confirmation.
Income from associates for the first half increased by 51%.
Equipment Iberia
While there are signs of an improvement in the overall economy in Iberia, the construction industry is not yet showing
signs of recovery. Year to date revenue of R2 277 million (€152 million) was well down on the previous year of R2 464
million (€215 million) which included the two large package deals to EPSA and Victorino Alonso.
The business generated an operating loss of R32 million (€2 million) compared to a loss of R5 million (€0.4 million)
last year. The result was impacted by reduced volumes, increased fixed costs as prior year salary decreases were
reinstated and a reduction in the number of service technicians earning revenue on projects outside Iberia.
The March firm order book of €42 million is down on the prior year €49 million with power representing 81% of
this book.
Equipment Russia
The deteriorating situation in Ukraine continues to take its toll on the Russian economy with the rouble weakening in
the period and the outlook for economic growth continuing to decline.
The limited economic sanctions announced by both the United States and the European Union while impacting certain
designated individuals and entities in Russia have thus far not had any significant direct impact on our business, our
customers, or the banking and financial sector in Russia.
Our operations have however been negatively impacted by lower activity in the mining sector as a result of reduced
commodity prices and curtailment of spend on mine expansions and new projects.
Revenue to March of R1 929 million ($183.7 million) was 11.8% below the prior year driven by lower mining sales into
Siberia and the Russian Far East.
Operating profit for the first half of R156 million ($14.7 million) compares to R157 million ($17.8 million) in 2013.
The firm order book at March of $36.5 million is down on the September 2013 book of $40.4 million however there remain
a number of projects under discussion which have the potential to benefit revenues in the second half.
Handling
Revenue to March of R947 million was well down on last year which included The Netherlands and Belgium businesses. The
Handling Belgium business was sold in May 2013, while the disposal of the Netherlands business was concluded in
December.
Handling SA revenue was slightly below last year with slower new and rental sales, while Agriculture SA revenue of
R432 million was 7% up.
Operating profit to March of R31 million compares to R36 million profit in 2013 which included profits from Belgium
and The Netherlands.
Automotive and Logistics
The division successfully exited the Australian motor retail operations with the sale of the Ferntree Gully dealership
in November 2013 and the sale of the remainder of the business effective 31 March 2014. Total disposal proceeds of R1.3
billion were generated and the majority of this was received after the half year end on 1 April 2014. A profit on
disposal of R370 million was recorded on the combined transactions. The segment has consequently been reflected as
discontinued in the period with the prior year restated on a comparable basis.
The Automotive and Logistics division generated revenue of R15.1 billion from continuing operations for the six months
to March which is R1.6 billion (11%) up on last year’s comparable revenue of R13.6 billion. All the business units
have shown good revenue growth in the current year.
Operating profit to March of R775 million (excluding motor retail Australia) exceeded the previous year by R159 million
(26%) with the divisional operating margin improving to 5.1% (1H’13: 4.5%).
Including Australia the division produced an operating profit of R861 million for the six months to March, up 29% on
the prior period.
Car rental
Revenue for the six months to March of R2.1 billion exceeded the prior period by R134 million (7%) due to improvements
in rental days of 11% and revenue per day of 2%. Fleet utilisation for the period reached 76% with volume increases in
most segments.
Operating profit to March of R220 million was 35% up on the prior period with the operating margin showing a pleasing
improvement from 8.2% in 1H’13 to 10.3% in the current year.
Motor retail
Motor Retail SA increased revenue by R1.1 billion (14%) to R9.3 billion mainly through a strong new vehicle sales
performance in the Mercedes-Benz franchise and a positive growth in aftermarket.
Year to date operating profit of R235 million was 17% (R34 million) up on last year due to improved finance and
insurance and aftermarket profitability.
South African consumer confidence levels remain low due to high levels of indebtedness and increased energy and
transport costs exacerbated by a slowdown in bank lending to households. Based on the tepid growth prospects for the SA
economy the motor industry is projecting a flat year for vehicle sales but in our view this is more likely to be slightly
negative. Industry vehicle sales to March show a 3.4% decline on last year.
The newly acquired Toyota dealership in Kuruman has been successfully integrated from 10 March 2014.
Fleet services
Fleet services maintained its strong momentum and generated revenue of R1.5 billion which was 18% ahead of the
previous period. Year to date operating profit of R264 million was up by 27% on 2013.
Logistics
Year to date March revenue of R2.2 billion exceeded the prior period by 3%. Operating profit to March of R56 million
was 27% ahead of the prior period with the transport business producing the bulk of the profit. This was despite the
impact of ongoing strike action in the platinum industry.
Supply Chain Management profitability was down due to lower gain shares on certain contracts as well as lower
Barloworld Equipment volumes.
The international businesses generated slightly increased losses in the first half with Sea Air volumes well down due
to a contract loss.
Funding
Group net debt increased by R3.6 billion from September 2013 to R11.2 billion at March 2014. This was at a similar
level to March 2013. The bulk of the increase was driven by the seasonal increase in working capital which is expected to
significantly reduce in the second half of this year.
The final proceeds on the disposal of the Australian motor retail interests of approximately R1.2 billion were
received on 1 April 2014 which will further reduce net debt levels by year end.
Human resources, diversity and sustainable development
Tragically motor vehicle accidents resulted in one work-related fatality in the reporting period and another two
subsequently. Steps have been taken to incorporate appropriate prevention measures in our ongoing safety awareness
programmes.
The implementation of our renewed Employee Value Proposition enhances our position to attract, develop and retain the
people and leadership required to implement our strategic objectives.
Our group-wide focus on diversity and inclusion resulted in the group retaining its broad-based black economic
empowerment (B-BBEE) level 2 rating and our major South African business units achieving a level 2 or 3. We remain committed
to being industry leaders in empowerment by aligning our transformation and B-BBEE strategy to the revised codes.
Expanding Logistics’ road transportation activities following acquisitions made last year contributed to increasing
group energy consumption and greenhouse gas emissions by 55% and 41% respectively. This in turn adversely impacts the
achievement of our related aspirational targets.
Changes in directorate
Hixonia Nyasulu retired by rotation from the board at the annual general meeting on 29 January 2014. We would like to
thank her for her contribution over the past seven years.
Dr Alexander Landia joined the board as a non-executive director on 1 October 2013.
With effect from 19 March 2014 Ngozichukwuka (Ngozi) Edozien was appointed a non-executive director of the company and
Dominic Sewela, Chief Executive of Barloworld Equipment southern Africa, was appointed as an executive director of the
company.
Isaac Shongwe, currently Executive Director: Human Resources, Strategy and Sustainability, having served the group for
more than nine years will relinquish his executive management responsibilities effective 31 May 2014. Mr Shongwe wishes
to devote more time to his social and leadership activities including the African Leadership Initiative (ALI) which he
founded in 2003. He has agreed to remain on the board of Barloworld Limited as a non-executive director effective 1 June
2014.
Outlook
The global economic recovery now appears to be led by the US and EU while China and the emerging market economies show
signs of slowing.
The South African economy continues to suffer from the impact of the prolonged strike in the platinum sector which is
diminishing growth prospects. Furthermore, high inflation levels would appear to make further interest rate hikes
inevitable.
Equipment southern Africa traditionally generates a stronger second half performance which will include deliveries in
respect of the major EMPR projects in this period. Aftermarket revenues are expected to generate continued growth.
While current economic indicators for Spain are turning positive we have yet to see this translate into improved
machine industry sales. As a result, we are looking at taking further steps to reduce our cost base and position the business
for future profitability.
The outlook for Equipment Russia is dependent on no further escalation in tensions between Russia, Ukraine, the EU and
the United States.
Trading conditions for Power in southern Africa and Russia will remain muted while Iberia has a solid order book
mainly in marine engines which will ensure growth on the prior year.
The order books for the Handling and Agriculture businesses in southern Africa are up which should add impetus for the
balance of the year.
We expect the Automotive businesses to show continued growth while the Logistics business should deliver a stronger
performance in the second half.
Overall the group is expected to produce a solid result for the full year and is well placed to benefit once the
global mining cycle moves into a recovery phase.
DB Ntsebeza CB Thomson
Chairman Chief Executive
Group financial review
The results for the year ended 30 September 2013 have been restated to reflect changes in accounting policies as well
as discontinued operations resulting from the disposal of our Australian motor retail business. The group applied IAS 19
revised (employee benefits) and IFRS 10 (consolidated financial statements), resulting in a restatement of the prior
year results on a comparable basis.
Revenue for the six months increased by R1.3 billion (5%) to R29.9 billion mainly due to increased revenues in
Equipment southern Africa in the extended mining product range (EMPR) and Automotive and Logistics (R1 558 million), offset
by lower revenues in Equipment Russia and Iberia. The weaker rand increased revenue by R919 million.
Earnings before interest, taxation, depreciation and amortisation (EBITDA) increased by 17% to R2 800 million while
operating profit rose by 18% to R1 639 million on the comparable restated number for last year. The increase in the company’s
share price since September 2013 resulted in a R43.8 million charge for the six months (1H’13: R5 million) in respect of the
cash-settled Share Appreciation Rights previously awarded to employees.
In Equipment southern Africa, operating profit increased by 17% despite weaker demand in the mining sector, largely
due to a strong contribution from EMPR. Losses in Equipment Iberia increased from R5 million last year to R32 million, as
construction and public works activity remained subdued despite the improving economic conditions in Spain. Operating
profit in Equipment Russia was in line with last year in rand terms but declined by 18% in dollar terms due to the current
slump in mining.
The Automotive and Logistics division continuing operations recorded substantially improved profits of R775 million,
up by 26% owing to increased earnings in all business segments.
Financial instrument costs were significantly up on the prior year and mainly relate to the forward points on forward
exchange contracts expensed in Equipment SA.
Net finance costs of R525 million are R37 million higher than last year owing to the increased cost of debt and some
increase in average net debt in the first half.
The exceptional charge of R49 million includes the impairment of goodwill in the logistics sea air transport business
in Germany and the Middle East, offset by profits from foreign currency translation reserves realised from disposals of
offshore businesses in automotive, handling and logistics.
Taxation increased by R41 million to R345 million. The effective taxation rate excluding prior year adjustments and
exceptional items was 34.5% (1H’13: 34.4%). This was impacted by unrelieved losses in Spain and deferred tax charges
arising out of exchange rate movements in foreign operations.
Income from associates of R95 million was R31 million higher than last year and arose mainly from the equipment joint
ventures which continued to perform strongly.
Minorities share of profit increased by R37 million to R86 million due to higher levels of profitability in the
Mercedes-Benz joint venture and Barloworld Transport Solutions operations.
Headline earnings per share (HEPS) including discontinued operations increased by 10% to 336 cents (1H’13: 304 cents)
on the comparable restated earnings from last year, while HEPS from continuing operations increased by 9% to 316 cents
(1H’13: 291 cents). Basic earnings per share (EPS) including discontinued operations is 71% higher than the restated
basic EPS of 289 cents in the prior period due to the exceptional profit generated on the disposal of the Australian motor
retail operations.
Cash flow and debt
Improved activity levels resulted in increased investment in working capital of R3 234 million (1H’13: R2 405 million).
Equipment SA increased working capital by R2 373 million and Automotive and Logistics by R399 million.
Total interest-bearing debt at 31 March 2014 of R13 008 million represents a debt to equity ratio of 79% (September
2013: 65%). In December the company issued three senior unsecured notes totalling R1 541 million under the South African
Domestic Medium Term Note programme. R714 million matures in 2018 and R827 million in 2020. In addition a R700 million
bank term facility was extended for a further five years. The funds raised were utilised to fund short-term working
capital requirements and to improve the maturity profile of group debt.
At March short-term debt represents 37% of total debt. In South Africa, short-term debt includes commercial paper
totalling R1.5 billion (September 2013: R1.2 billion). This market has remained liquid and we expect to maintain our
participation.
Cash balances of R1.8 billion are available to meet short-term commitments. In addition unutilised banking facilities
at March amounted to R5.5 billion.
Net interest-bearing debt at 31 March 2014 of R11 198 million represented an increase of R3 640 million on September
2013 and a net debt to equity ratio of 68% (September 2013: 48%).
Group Group
Debt to equity (%) Trading Leasing Car rental total debt net debt
Target range 30 - 50 600 - 800 200 - 300
Ratio at 31 March 2014 53 599 219 79 68
Ratio at 31 March 2013 64 464 233 89 77
Ratio at 30 September 2013 38 664 225 65 48
Total assets employed by the group increased by R2 450 million in the six months to R43 057 million mainly due to
increased working capital, with the weaker rand adding R752 million.
Going forward
Based on forecast deliveries in the second half in Equipment southern Africa and Russia, we are forecasting a
significant reduction in working capital and gearing by year end. In addition the receipt of the final proceeds from the
disposal of Motor Retail Australia received in April will further favourably impact net debt levels.
DG Wilson
Finance director
Operational reviews
Equipment and handling
Revenue Operating profit/(loss) Net operating assets
Six months Year Six months Year
ended ended ended ended
31 Mar 30 Sept 31 Mar 30 Sept 30 Sept
31 Mar 2013 2013 31 Mar 2013 2013 31 Mar 2013
2014 Restated* Restated* 2014 Restated* Restated* 2014 Restated*
Rm Rm Rm Rm Rm Rm Rm Rm
Equipment 13 824 13 672 28 148 892 806 2 069 15 661 12 098
- Southern Africa 9 618 9 021 19 126 768 654 1 678 9 714 6 901
- Europe 2 277 2 464 4 377 (32) (5) (16) 2 801 2 514
- Russia 1 929 2 187 4 645 156 157 407 3 146 2 683
Handling 947 1 329 2 534 31 36 54 910 751
14 771 15 001 30 682 923 842 2 123 16 571 12 849
Share of associate income 103 67 188
*Restated for the treatment of IFRS 10, IAS 19 and discontinued operation - refer to note 19.
Equipment southern Africa achieved a good result, with revenue increasing by 7% to R9.6 billion in the six months to March 2014,
despite the challenges faced in the mining environment. This increase was attributed to growth in EMPR sales, high
revenues in parts and service and a strong performance by the rental business in South Africa. Operating profit grew by 17%
to R768 million due to operational efficiencies and a concerted focus on cost management.
The outlook for the infrastructure and construction industry is positive. We expect the slow growth in the mining
sector to continue due to subdued commodity demand from China. Our Firm Order Book is at R2.8 billion, lower than R3.5
billion at September 2013, due to improved machine delivery lead times from Caterpillar and significant EMPR machine
deliveries to Swakop Uranium, FQM and De Beers (Venetia mine) in the past six months.
In Equipment Russia revenue was under pressure due to the continuing decline in mining sales and lower commodity
prices have delayed investments in greenfield projects. Operating margin benefited from favourable sales mix with the
increase in aftermarket sales which traditionally have higher margins. EMPR aftermarket trading was in line with expectation.
Equipment Iberia revenue to March was down 29% in euro terms with two package deals in the prior financial year not
replicated and margins were negatively affected by lower service activity. Power Systems has continued to act as a buffer
against the weak construction equipment market.
In the Handling operations, the market for forklift trucks in South Africa has reduced from last year. Trading in the
Agriculture business started slowly but has picked up appreciably in the last two months. Operating profit in South
Africa grew modestly, with an improved sales mix and favourable currency variances more than offsetting lower volumes. Sales
in Russia were adversely affected by a late winter and political uncertainty. The prior period included the Handling
Belgium and Netherlands businesses which have now been sold.
Automotive and logistics
Revenue Operating profit/(loss) Net operating assets
Six months Year Six months Year
ended ended ended ended
31 Mar 30 Sept 31 Mar 30 Sept 30 Sept
31 Mar 2013 2013 31 Mar 2013 2013 31 Mar 2013
2014 Restated* Restated* 2014 Restated* Restated* 2014 Restated*
Rm Rm Rm Rm Rm Rm Rm Rm
Car rental Southern Africa 2 131 1 997 4 069 220 163 317 2 127 1 863
Motor retail 9 254 8 136 17 465 235 201 421 2 333 3 290
- Southern Africa 9 254 8 136 17 465 235 201 421 2 345 1 942
- Australia (12) 1 348
Fleet services Southern Africa 1 545 1 309 2 895 264 208 484 3 320 3 191
Logistics 2 182 2 112 4 377 56 44 100 1 487 1 112
- Southern Africa 1 836 1 687 3 454 85 64 137 1 362 992
- Europe, Middle East and Asia 346 425 923 (29) (20) (37) 125 120
15 112 13 554 28 806 775 616 1 322 9 267 9 456
Share of associate loss (8) (3) (4)
*Restated for the treatment of IFRS 10, IAS 19 and discontinued operation - refer to note 19.
The division delivered another record result in difficult markets. These results exclude the Australian motor retail
operations which were sold, effective 31 March 2014. The operating margin improved to 5.1% from 4.5% in the prior period.
The division continued to generate strong operating cash flows which have been reinvested into profitable growth
opportunities across all business units. Operating profit improved by 26% off a growth in revenue of 11%.
Avis Rent a Car southern Africa delivered an excellent result, improving operating profit by 35%. The business further
improved fleet utilisation, grew rental day volumes and market share, and increased revenue per rental day. Used
vehicle profits which were maintained at the high levels of the previous year, supported the result.
The southern African motor retail operations delivered a pleasing result, growing operating profit by 17% while
margins were maintained in line with the prior period. Overall vehicle sales volumes were in line with market and the result
was supported by improved aftermarket volumes and a solid finance and insurance contribution. The acquisition of Leach
Toyota in Kuruman was effective 10 March 2014.
Avis Fleet Services produced a very good result, improving operating profit by 27%. The business maintained the level
of the financed fleet and benefited from further growth in the non-financed fleets and a strong used vehicle profit
contribution.
The logistics business has seen further improvements on the back of focused management actions in southern Africa.
Barloworld Transport Solutions has seen strong growth which supported the result, while the supply chain management
business in southern Africa remains stable and is well positioned for growth. Overall volumes and margins remain under pressure
in the international businesses.
Associates, including our Soweto motor retail and Sizwe BEE joint ventures, remain in the early stages of development.
Corporate
Revenue Operating loss Net operating assets/(liabilities)
Six months Year Six months Year
ended ended ended ended
31 Mar 30 Sept 31 Mar 30 Sept 30 Sept
31 Mar 2013 2013 31 Mar 2013 2013 31 Mar 2013
2014 Restated* Restated* 2014 Restated* Restated* 2014 Restated*
Rm Rm Rm Rm Rm Rm Rm Rm
- Southern Africa 4 6 10 (22) (47) (78) 609 543
- Europe (37) (27) (54) (584) (1 520)
4 6 10 (59) (74) (132) 25 (977)
*Restated for the treatment of IFRS 10, IAS 19 and discontinued operation - refer to note 19.
Corporate primarily comprises the operations of the headquarters and treasury in Johannesburg, the treasury in
Maidenhead (United Kingdom) and the captive insurance company.
In southern Africa, the operating loss has reduced mainly owing to lower charges and accruals for long-term incentives
and reduced operating expenditure. In Europe the higher operating loss is mainly due to the impact of currency
depreciation.
Dividend declaration
Dividend number 171
Notice is hereby given that interim dividend number 171 of 106 cents (gross) per ordinary share in respect of the six
months ended 31 March 2014 has been declared subject to the applicable dividends tax levied in terms of the Income Tax
Act (Act No. 58 of 1962)(as amended) (“the Income Tax Act”).
In accordance with paragraphs 11.17(a)(i) to (x) and 11.17(c) of the JSE Listings Requirements the following
additional information is disclosed:
- The dividend has been declared out of income reserves;
- Local dividends tax rate is 15% (fifteen per centum);
- There are no Secondary Tax on Companies (STC) credits utilised;
- Barloworld has 231 291 819 ordinary shares in issue;
- The Gross local dividend amount is 106 cents per ordinary share;
- The net dividend amount is 90.10 cents per share.
In compliance with the requirements of Strate and the JSE Limited, the following dates are applicable:
- Dividend declared Monday, 19 May 2014
- Last day to trade cum dividend Friday, 06 June 2014
- Shares trade ex dividend Monday, 09 June 2014
- Record date Friday, 13 June 2014
- Payment date Tuesday, 17 June 2014
Share certificates may not be dematerialised or rematerialised between Monday, 09 June 2014 and Friday, 13 June 2014,
both days inclusive.
On behalf of the board
LP Manaka
Group company secretary
Condensed consolidated income statement
Six months ended Year ended
31 Mar 30 Sept
31 Mar 2013 2013
2014 Reviewed Audited
Reviewed Restated* Restated*
Notes Rm Rm Rm
Continuing operations
Revenue 29 887 28 561 59 498
Operating profit before items listed below (EBITDA) 2 800 2 401 5 389
Depreciation (1 088) (945) (1 940)
Amortisation of intangible assets (73) (72) (136)
Operating profit 3 1 639 1 384 3 313
Fair value adjustments on financial instruments 4 (108) 7 (47)
Net finance costs and dividends received 5 (525) (488) (972)
Profit before exceptional items 1 006 903 2 294
Exceptional items 6 (49) (34) (79)
Profit before taxation 957 869 2 215
Taxation 7 (345) (304) (729)
Profit after taxation 612 565 1 486
Income from associates and joint ventures 95 64 185
Net profit from continuing operations for the period 707 629 1 671
Discontinued operations
Profit from discontinued operations 10 424 29 46
Net profit for the period 1 131 658 1 717
Net profit attributable to:
Owners of Barloworld Limited 1 045 609 1 609
Non-controlling interests in subsidiaries 86 49 108
1 131 658 1 717
Earnings per share^ (cents)
- basic 494.1 288.7 763.0
- diluted 492.5 287.6 759.2
Earnings per share from continuing operations^ (cents)
- basic 293.4 275.3 739.9
- diluted 292.7 274.2 736.2
Earnings per share from discontinued operations^ (cents)
- basic 200.7 13.4 23.1
- diluted 199.8 13.4 23.0
*Restated for the treatment of IFRS 10, IAS 19 and discontinued operation - refer to note 19.
^ Refer note 2 for details of headline earnings per share calculation.
Condensed consolidated statement of comprehensive income
Six months ended Year ended
31 Mar 30 Sept
31 Mar 2013 2013
2014 Reviewed Audited
Reviewed Restated* Restated*
Rm Rm Rm
Profit for the period 1 131 658 1 717
Items that may be reclassified subsequently to profit
or loss: (108) 781 1 691
Exchange gain on translation of foreign operations 449 746 1 680
Translation reserves realised on the disposal of foreign
joint ventures and subsidiaries (509) (14)
(Loss)/gain on cash flow hedges (68) 48 33
Deferred taxation on cash flow hedges 20 (13) (8)
Items that will not be reclassified to profit or loss: 34 (289)
Actuarial losses on post-retirement benefit obligations 44 (318)
Taxation effect (10) 29
Other comprehensive (loss)/income for the period (108) 815 1 402
Total comprehensive income for the period 1 023 1 473 3 119
Total comprehensive income attributable to:
Owners of Barloworld Limited 937 1 424 3 011
Non-controlling interests in subsidiaries 86 49 108
1 023 1 473 3 119
*Restated for the treatment of IFRS 10, IAS 19 and discontinued operation - refer to note 19.
Condensed consolidated statement of financial position
Six months ended Year ended
31 Mar 30 Sept
31 Mar 2013 2013
2014 Reviewed Audited
Reviewed Restated* Restated*
Notes Rm Rm Rm
ASSETS
Non-current assets 15 980 14 913 16 023
Property, plant and equipment 11 477 10 584 11 356
Goodwill 1 636 1 821 1 820
Intangible assets 1 396 1 265 1 399
Investment in associates and joint ventures 8 584 527 571
Finance lease receivables 73 82 115
Long-term financial assets 9 111 104 108
Deferred taxation assets 703 530 654
Current assets 27 077 24 067 24 213
Vehicle rental fleet 2 483 2 038 2 081
Inventories 12 989 12 401 11 688
Trade and other receivables 9 774 8 054 7 687
Taxation 21 9 62
Cash and cash equivalents 15 1 810 1 565 2 695
Assets classified as held for sale 10 293 371
Total assets 43 057 39 273 40 607
EQUITY AND LIABILITIES
Capital and reserves
Share capital and premium 316 311 316
Other reserves 3 992 3 032 4 094
Retained income 11 663 10 499 11 035
Interest of shareholders of Barloworld Limited 15 971 13 842 15 445
Non-controlling interest 501 439 462
Interest of all shareholders 16 472 14 281 15 907
Non-current liabilities 10 663 8 970 9 611
Interest-bearing 8 231 6 950 7 285
Deferred taxation liabilities 449 441 421
Provisions 219 138 267
Other non-current liabilities 1 764 1 441 1 638
Current liabilities 15 922 15 817 14 983
Trade and other payables 10 030 8 977 10 780
Provisions 1 011 924 995
Taxation 104 154 240
Amounts due to bankers and short-term loans 4 777 5 762 2 968
Liabilities directly associated with assets
classified as held for sale 10 205 106
Total equity and liabilities 43 057 39 273 40 607
*Restated for the treatment of IFRS 10, IAS 19 and discontinued operation - refer to note 19.
Condensed consolidated statement of changes in equity
Attributable to
Barloworld
Share capital Other Retained Limited
and premium reserves income shareholders
Rm Rm Rm Rm
Balance at 309 2 433 10 181 12 923
1 October 2012 Restated
Total comprehensive income for the period 781 643 1 424
Transactions with owners, recorded directly in equity
Other reserve movements 27 (5) 22
Purchase of shares in subsidiaries (209) (209)
Dividends (320) (320)
Shares issued in current period 2 2
Balance at 311 3 032 10 499 13 842
31 March 2013
Total comprehensive income for the period 910 676 1 586
Transactions with owners, recorded directly in equity
Other reserve movements (57) 62 6
Purchase of shares in subsidiaries agreement amended 209 209
Dividends (202) (202)
Treasury shares issued 3 3
Shares issued in current period 2 2
Balance at 30 September 2013 316 4 094 11 035 15 445
Total comprehensive income for the period (108) 1 045 937
Other reserve movements 6 6
Dividends (417) (417)
Balance at 316 3 992 11 663 15 971
31 March 2014 (reviewed)
Condensed consolidated statement of changes in equity (continued)
Non- Interest
controlling of all
interest shareholders
Rm Rm
Balance at 298 13 221
1 October 2012 Restated
Total comprehensive income for the period 49 1 473
Transactions with owners, recorded directly in equity
Other reserve movements 1 23
Purchase of shares in subsidiaries 129 (80)
Dividends (38) (358)
Shares issued in current period 2
Balance at 439 14 281
31 March 2013
Total comprehensive income for the period 59 1 645
Transactions with owners, recorded directly in equity
Other reserve movements 141 147
Purchase of shares in subsidiaries agreement amended (129) 80
Dividends (48) (250)
Treasury shares issued 3
Shares issued in current period 2
Balance at 30 September 2013 462 15 907
Total comprehensive income for the period 86 1 023
Other reserve movements 7 13
Dividends (54) (471)
Balance at 501 16 472
31 March 2014 (reviewed)
Condensed consolidated statement of cash flows
Six months ended Year ended
31 Mar 30 Sept
31 Mar 2013 2013
2014 Reviewed Audited
Reviewed Restated* Restated*
Notes Rm Rm Rm
Cash flow from operating activities
Operating cash flows before movements in working capital 2 925 2 648 5 925
(Increase)/decrease in working capital (3 234) (2 405) 538
Cash (outflow)/generated from operations before investment
in rental assets (309) 243 6 463
Net investment in fleet leasing and equipment rental assets 11 (1 047) (702) (1 636)
Net investment in vehicle rental fleet 11 (666) (406) (572)
Cash (utilised in)/generated from operations (2 022) (865) 4 255
Realised fair value adjustments on financial instruments (82) 55 (56)
Finance costs and investment income (432) (408) (771)
Taxation paid (421) (372) (821)
Cash (outflow)/inflow from operations (2 957) (1 590) 2 607
Dividends paid (including non-controlling interest) (481) (358) (598)
Net cash (applied to)/retained from operating activities (3 438) (1 948) 2 009
Net cash applied to investing activities (440) (963) (1 349)
Acquisition of subsidiaries, investments and intangibles 13 (92) (594) (775)
Proceeds on disposal of subsidiaries, investments,
intangibles and loans repaid 14 126 105
Net investment in leasing receivables 13 (5) 22
Acquisition of property, plant and equipment (595) (417) (818)
Proceeds on disposal of property, plant and equipment 108 53 117
Net cash (outflow)/inflow before financing activities (3 878) (2 911) 660
Net cash from/(applied to) financing activities 2 924 1 902 (620)
Ordinary shares issued 1 4
Shares repurchased for forfeitable share plan (28) (32)
Purchase of non-controlling interest (4) (125) (125)
Non-controlling equity loans 6
Increase/(decrease) in interest-bearing liabilities 2 956 2 026 (473)
Net decrease in cash and cash equivalents (954) (1 009) 40
Cash and cash equivalents at beginning of period 2 695 2 476 2 476
Effect of foreign exchange rate movements 40 113 208
Effect of cash balances held for sale 29 (16) (29)
Cash and cash equivalents at end of period 1 810 1 564 2 695
*Restated for the treatment of IFRS 10, IAS 19 and discontinued operation - refer to note 19.
Notes to the condensed consolidated financial statements
1. Basis of preparation
The condensed consolidated interim financial statements are prepared in accordance with International Financial
Reporting Standards, (IAS) 34: Interim Financial Reporting, the SAICA Financial Reporting Guides as issued by the
Accounting Practices Committee and Financial Pronouncements as issued by Financial Reporting Standards Council and
the requirements of the Companies Act of South Africa. The accounting policies applied in the preparation of these
interim financial statements are in terms of International Financial Reporting Standards and are consistent with
those applied in the previous annual financial statements, except for the adoption of the following amended or new
standards and interpretations:
- IFRS 10 Consolidated Financial Statements (May 2011)
- IFRS 11 Joint Arrangements (May 2011)
- IFRS 12 Disclosure of Interest in Other Entities (May 2011)
- IAS 27 Separate Financial Statements (May 2011)
- IAS 28 Investments in Associates and Joint Ventures (May 2011)
- Consolidated Financial Statements, Joint Arrangements and Disclosure of Interest in Other Entities: Transition
Guidance (Amendments to IFRS 10, IFRS 11 and IFRS 12) (June 2012)
- IFRS 13 Fair Value Measurement (May 2011)
- IAS 19 Employee Benefits (June 2011)
- IFRS 7 Disclosures - Offsetting Financial Assets and Financial Liabilities
- IFRS 1 Government Loans (March 2012)
- Annual improvements to IFRS (2009 to 2011) (May 2012)
- Amendment to IFRS 1: First-Time Adoption of International Financial Reporting Standards
- Amendment to Basis of Conclusion on IFRS 13 Fair Value Measurement
Comparative numbers have been restated as per note 19.
This report was prepared under the supervision of SY Moodley BCom CA(SA).
Six months ended Year ended
31 Mar 30 Sept
31 Mar 2013 2013
2014 Reviewed Audited
Reviewed Restated* Restated*
Rm Rm Rm
2. Reconciliation of net profit to headline earnings
Group
Net profit attributable to Barloworld shareholders 1 045 609 1 609
Adjusted for the following:
(Profit)/loss on disposal of subsidiaries and
investments (IAS 27) (520) 31 43
Profit on disposal of properties (IAS 16) (12) (18)
(Profit)/loss on sale of plant and equipment
excluding rental assets (IAS 16) (13) 2 6
Impairment of goodwill (IFRS 3) 209 3 71
Impairment of plant and equipment (IAS 16) and
intangibles (IAS 38) and other assets 2 23
Taxation effects of remeasurements (3) (1)
Non-controlling interest in subsidiaries in remeasurements (2)
Headline earnings 711 642 1 731
*Restated for the treatment of IFRS 10, IAS 19 and discontinued operation - refer to note 19.
Six months ended Year ended
31 Mar 30 Sept
31 Mar 2013 2013
2014 Reviewed Audited
Reviewed Restated* Restated*
Rm Rm Rm
2. Reconciliation of net profit to headline earnings continued
Continuing operations
Profit from continuing operations 707 629 1 671
Minority shareholders‘ interest in net profit from
continuing operations (86) (49) (108)
Profit from continuing operations attributable to Barloworld
Limited 621 580 1 563
Adjusted for the following items in continuing operations:
(Profit)/loss on disposal of subsidiaries and investments (IAS 27) (150) 31 43
Profit on disposal of properties (IAS 16) (12) (18)
(Profit)/loss on sale of plant and equipment excluding rental
assets (IAS 16) (1) 2 6
Impairment of goodwill (IFRS 3) 209 3 31
Impairment of plant and equipment (IAS 16) and intangibles
(IAS 38) and other assets 2 23
Taxation effects of remeasurements (3) (1)
Non-controlling interest in subsidiaries in remeasurements (2)
Headline earnings from continuing operations 669 613 1 645
Discontinued operations
Profit from discontinued operations attributable to
Barloworld Limited 424 29 46
Adjusted for the following items in discontinued operations:
Profit on disposal of subsidiaries and investments (IAS 27) (370)
Impairment of goodwill (IFRS 3) 40
Profit on sale of plant and equipment excluding rental assets
(IAS 16) (12)
Headline earnings from discontinued operations 42 29 86
Weighted average number of ordinary shares in issue during the
period (000)
- basic 211 535 210 636 211 011
- diluted 212 191 211 376 211 953
Headline earnings per share (cents)
- basic 336.1 304.3 820.8
- diluted 335.0 303.3 817.1
Headline earnings per share from continuing operations (cents)
- basic 316.3 291.0 779.6
- diluted 315.2 290.0 776.1
Headline earnings per share from discontinued operations (cents)
- basic 19.9 13.3 41.2
- diluted 19.8 13.3 41.0
*Restated for the treatment of IFRS 10, IAS 19 and discontinued operation - refer to note 19.
Six months ended Year ended
31 Mar 30 Sept
31 Mar 2013 2013
2014 Reviewed Audited
Reviewed Restated* Restated*
3. Operating profit Rm Rm Rm
Included in operating profit
Cost of sales (including allocation of depreciation) 23 393 22 869 47 324
(Profit)/loss on disposal of other plant and equipment (1) 2 12
Amortisation of intangible assets in terms of IFRS 3
Business Combinations 17 14 50
4. Fair value adjustments on financial instruments
(Losses)/gains arising from:
Forward exchange contracts and other financial instruments (104) 2 (51)
Translation of foreign currency monetary items (4) 5 4
(108) 7 (47)
5. Net finance costs and dividends received
Total finance costs (542) (499) (1 000)
Interest received 16 11 27
Net finance costs (526) (488) (973)
Dividends - listed and unlisted investments 1 1
(525) (488) (972)
6. Exceptional items
Profit/(loss) on acquisitions and disposal of properties,
investments and subsidiaries 162 (31) (25)
Impairment of goodwill (209) (3) (31)
Impairment of property, plant and equipment, intangibles
and other assets (2) (23)
Gross exceptional loss from continuing operations (49) (34) (79)
Taxation charge on exceptional items 3 1
Net exceptional loss continuing operations (49) (31) (78)
Gross exceptional loss from discontinued operations (40)
Net exceptional loss before non-controlling interest (49) (31) (118)
Non-controlling interest on exceptional items 2
Net exceptional loss - total group (49) (31) (116)
7. Taxation
Taxation per income statement (345) (304) (729)
Prior year taxation 2 4 1
Taxation on exceptional items 3 1
Taxation on profit before prior year taxation and exceptional
items (347) (311) (731)
Effective taxation rate excluding exceptional items, prior
year taxation (%) 34.5 34.4 31.9
*Restated for the treatment of IFRS 10, IAS 19 and discontinued operation - refer to note 19.
Six months ended Year ended
Book value Book value
31 Mar 30 Sept
31 Mar 2013 2013
2014 Reviewed Audited
Reviewed Restated* Restated*
Rm Rm Rm
8. Investment in associates and joint ventures
Joint ventures 332 268 302
Unlisted associates 241 240 254
573 508 556
Loans and advances 11 19 15
584 527 571
9. Long-term financial assets
Listed investments^ 1
Unlisted investments 73 56 60
73 57 60
Other long-term financial assets 38 47 48
111 104 108
* Restated for the treatment of IFRS 10, IAS 19 and discontinued operation - refer to note 19.
^ PPC shares held amounting to Rnil (March 2013: R1 million and September 2013: Rnil) for the commitment
to deliver PPC shares to option holders following the unbundling of PPC.
Six months ended Year ended
31 Mar 30 Sept
31 Mar 2013 2013
2014 Reviewed Audited
Reviewed Restated* Restated*
Rm Rm Rm
10. Assets classified as held for sale and discontinued operations
Following the disposal of the Automotive Australia business it
has been classified as a discontinued operation.
Results from discontinued operations are as follows:
Revenue 2 783 2 699 5 508
Operating profit before items listed below (EBITDA) 96 62 165
Depreciation (10) (10) (20)
Operating profit 86 52 145
Net finance costs and dividends received (8) (11) (21)
Profit before exceptional items 78 41 124
Exceptional items (40)
Profit before taxation 78 41 84
Taxation (24) (12) (38)
Net profit of discontinued operation before profit on disposal 54 29 46
Profit on disposal of discontinued operation (including realisation
of translation reserve) 365
Taxation effect of disposal 5
Profit from discontinued operations per income statement 424 29 46
* Restated for the treatment of IFRS 10, IAS 19 and discontinued
operation - refer to note 19.
Six months ended Year ended
31 Mar 30 Sept
31 Mar 2013 2013
2014 Reviewed Audited
Reviewed Restated* Restated*
Rm Rm Rm
10. Assets classified as held for sale and discontinued operations
continued
The cash flows from the discontinued operations are as follows:
Cash flows from operating activities 114 147 102
Cash flows from investing activities 103 (1) (8)
Cash flows from financing activities (225) (143) (95)
The major classes of assets and liabilities comprising the disposal
group and other assets classified as held for sale are as follows:
Property, plant and equipment 44 105
Goodwill 22
Investment classified as held for sale 30
Inventories 83 103
Trade and other receivables 150 80
Deferred tax asset 2
Cash balances 16 29
Assets of disposal group held for sale 293 371
Trade and other payables (155) (95)
Other current and non-current liabilities (25) (11)
Interest-bearing liabilities (24)
Deferred tax liability (1)
Total liabilities associated with assets classified as held for sale (205) (106)
Net assets classified as held for sale 88 265
Per business segment:
Automotive and Logistics 223
Equipment and Handling 88 42
Total group 88 265
The September 2013 assets held for sale relate to the net assets of the Ferntree Gully motor dealership
in Australia, the Handling Holland Hyster dealership and the Flynt Logistics operations, all of which were
sold in the period.
11. Net investment in fleet leasing and rental assets
Net investment in fleet leasing and equipment rental assets (1 047) (702) (1 636)
Additions (1 971) (1 356) (3 362)
Transfers and proceeds on disposals 924 654 1 726
Net investment in vehicle rental fleet (666) (406) (572)
Additions (1 539) (1 194) (2 335)
Transfers and proceeds on disposals 873 788 1 763
* Restated for the treatment of IFRS 10, IAS 19 and discontinued operation - refer to note 19.
Six months ended Year ended
31 Mar 30 Sept
31 Mar 2013 2013
2014 Reviewed Audited
Reviewed Restated* Restated*
Rm Rm Rm
12. Dividends declared
Ordinary shares
Final dividend No 170 paid on 20 January 2014: 195 cents
per share (2013: No 168 - 150 cents per share) 416 320 320
Interim dividend No 169 paid on 18 June 2013: 96 cents per share 202
Paid to Barloworld Limited shareholders 416 320 522
Paid to non-controlling interest 54 38 86
470 358 608
6% cumulative non-redeemable preference shares
Preference dividends totaling R22 500 were declared and paid on
each of the following dates:
- 7 October 2013 (paid on 4 November 2013)
- 8 April 2013 (paid on 3 May 2013)
Preference dividends totalling R22 500 were declared on
14 April 2014 and paid on 19 May 2014.
13. Acquisition of subsidiaries, investments and intangibles
Inventories acquired (17) (218) (218)
Receivables acquired (3) (154) (113)
Payables, taxation and deferred taxation acquired 5 173 138
Borrowings net of cash 6 311 353
Property, plant and equipment, other non-current assets and
non-controlling interest (2) (421) (488)
Total net assets acquired (11) (309) (328)
Goodwill arising on acquisition (28) (17) (37)
Intangibles arising on acquisition in terms of IFRS 3
Business Combinations (134) (132)
Net cash cost of subsidiaries acquired (39) (460) (497)
Investments and intangibles acquired (53) (134) (278)
Cash amounts paid to acquire subsidiaries, investments and intangibles (92) (594) (775)
Barloworld’s Motor Retail division acquired two dealerships for a total purchase consideration of R34.6 million.
The effective date of the transaction was 7 March 2014 and the acquisition was accounted for from 10 March 2014.
The primary reason for the acquisition was expansion of Motor Retail operations with support of Toyota South Africa
into the Northern Cape mining triangle which is considered a growth node because of the strong mining (iron ore)
activities. The acquisition gave rise to goodwill of R24 million. The transaction was accounted for in terms of
IFRS 3 Business Combinations, and thus, management has 12 months to finalise the accounting in terms of the transaction.
In December 2013 Barloworld Logistics acquired Aero Aqua, a small clearing and forwarding business for a total
cash consideration of R3.5 million. The primary reason for the acquisition was to gain a niche in the bulk chemical
business customs clearance market and the transaction gave rise to goodwill of R3.5 million.
* Restated for the treatment of IFRS 10, IAS 19 and discontinued operation - refer to note 19.
Six months ended Year ended
31 Mar 30 Sept
31 Mar 2013 2013
2014 Reviewed Audited
Reviewed Restated* Restated*
Rm Rm Rm
14. Proceeds on disposal of subsidiaries, investments,
intangibles and loans repaid
Inventories disposed 826 90
Receivables disposed 160 182
Payables, taxation and deferred taxation balances disposed (384) (159)
Borrowings net of cash (180) (56)
Property, plant and equipment, non-current assets, goodwill
and intangibles 878 48
Net assets disposed 1 300 105
Less: Non-cash translation reserves realised on disposal
of foreign subsidiaries (413) (14)
Receivable from subsidiary disposed (1 171)
Profit on disposal 453 14
Net cash proceeds on disposal of subsidiaries 169 105
Bank balances and cash in subsidiaries disposed of (44)
Proceeds on disposal of investments and intangibles 1
Cash proceeds on disposal of subsidiaries, investments,
intangibles and loans repai 126 105
The net cash proceeds on disposal of subsidiaries relates to the
disposal of Ferntree Gully, during October 2013,
Flynt during November 2013 and Handling Netherlands during December
2013. The non-cash proceeds primarily relates to the proceeds
receivable in relation to the remainder of the Motor
Australia operations that were disposed of during March 2014.
15. Cash and cash equivalents
Cash balances not available for use due to reserving and other
restrictions 146 150 189
16. Commitments
Capital commitments to be incurred 2 074 2 233 2 262
Contracted - Property, plant and equipment 1 112 1 179 718
Contracted - Vehicle Rental Fleet 454 664 1 021
Approved but not yet contracted 508 390 523
Operating lease commitments 2 280 1 814 2 224
Capital expenditure will be financed by funds generated by the business, existing cash resources and borrowing
facilities available to the group.
* Restated for the treatment of IFRS 10, IAS 19 and discontinued operation - refer to note 19.
Six months ended Year ended
31 Mar 30 Sept
31 Mar 2013 2013
2014 Reviewed Audited
Reviewed Restated* Restated*
17. Contingent liabilities Rm Rm Rm
Bills, lease and hire-purchase agreements discounted with
recourse, other guarantees and claims 1 869 1 600 1 668
Buy-back and repurchase commitments^ 299 317 288
Litigation, current or pending, is not considered likely to
have a material adverse effect on the group.
The group has given guarantees to the purchaser of the
coatings Australian business relating to environmental claims. The guarantees will expire in 2016 and are
limited to the sales price received for the business. Freeworld Coatings Limited is responsible for the first
A$5 million of any claims arising in terms of the unbundling agreement.
A joint venture has received tax assessments relating to prior years which it is contesting. It is the present
opinion of local management, after consulting with advisers, that the possibility of a material outflow of resources
in connection with these assessments is considered to be remote.
* Restated for the treatment of IFRS 10, IAS 19 and discontinued operation - refer to note 19.
^ The related assets are estimated to have a value of at least equal to the commitment.
18. Related party transactions
There has been no significant change in related party relationships and the nature of related party transactions since
the previous year.
Other than in the normal course of business, there have been no other significant transactions during the year with
associate companies, joint ventures and other related parties.
19. Comparative information
In terms of IFRS 10, an investor controls (and therefore should consolidate) an investee when the investor has power over
the investee, is exposed, or has rights to variable returns from its involvement with the investee and has the ability to
affect those returns through its power over the investee. An investee can either be a separate legal entity or a deemed
separate entity. The cell captives do not meet the criteria to be classified as a separate entity. As a result Barloworld
will not consolidate the cell captives from the 2014 financial year and will disclose the cell captives as investments in
terms of IAS 39. The cells are actively managed on a fair value basis. The movement in the investment will go through the
income statement and will be disclosed in the “Operating profit line”. These changes are retrospective and the prior year
numbers have been restated accordingly. The operating profit was reduced as follows: September 2013: R6 million and March
2013: R3 million but the net impact on headline earnings was zero.
Amendments to IAS 19 require that all actuarial gains and losses in respect of defined benefit post-employment plans are
recognised in other comprehensive income. In addition, the standard no longer requires the expected return on plan assets
to be recognised in profit or loss, rather a net interest income/expense be recognised on the net asset or liability.
All other remeasurements relating to plan assets are also recognised in other comprehensive income. These changes are
retrospective and the prior year numbers have been restated accordingly. September 2013 operating profit was reduced by
R64 million (March 2013: R24 million), net finance cost increased by R30 million (March 2013: R19 million) and the net
after tax impact on headline earnings was a reduction of R83 million (March 2013: R34 million).
In addition, the prior year numbers were further restated to disclose the Australian automotive business as a discontinued
operation. The business was sold effective 31 March 2014.
Six months ended
31 March 31 March 31 March 31 March
2013 2013 2013 2013
Rm Rm Rm Rm
Previously Adjustments relating to Restated
stated restatements
Discontinued IFRS 10/
operation IAS 19
19. Comparative information continued
Revenue 31 310 (2 698) (51) 28 561
Operating profit before items listed below (EBITDA) 2 490 (62) (27) 2 401
Depreciation (955) 10 (945)
Amortisation of intangible assets (72) (72)
Operating profit 1 463 (52) (27) 1 384
Fair value adjustments on financial instruments 7 7
Net finance costs and dividends received (475) 11 (24) (488)
Profit before exceptional items 995 (41) (51) 903
Exceptional items (34) (34)
Profit before taxation 961 (41) (51) 869
Taxation (333) 12 17 (304)
Profit after taxation 628 (29) (34) 565
Income from associates and joint ventures 64 64
Net profit from continuing operations 692 (29) (34) 629
Discontinued operations
Profit from discontinued operations 29 29
Net profit for the period 692 (34) 658
Net profit attributable to:
Owners of Barloworld Limited 643 (34) 609
Non-controlling interest in subsidiaries 49 49
692 (34) 658
Earnings per share^ (cents)
- basic 305.3 (16.6) 288.7
- diluted 304.2 (16.6) 287.6
Earnings/(loss) per share from continuing operations^ (cents)
- basic 305.3 (13.4) (16.6) 275.3
- diluted 304.2 (13.4) (16.6) 274.2
Loss per share from discontinued operations^ (cents)
- basic 13.4 13.4
- diluted 13.4 13.4
^Refer note 2 for details of headline earnings per share calculation.
Condensed consolidated statement of comprehensive income restatement
Items that will not be reclassified to profit or loss: 34 34
Actuarial losses on post-retirement benefit obligations 44 44
Taxation effect (10) (10)
Year ended
30 Sept 30 Sept 30 Sept 30 Sept
2013 2013 2013 2013
Rm Rm Rm Rm
Previously Adjustments relating to Restated
stated restatements
Discontinued IFRS 10/
operation IAS 19
19. Comparative information continued
Revenue 65 102 (5 508) (96) 59 498
Operating profit before items listed below (EBITDA) 5 623 (165) (69) 5 389
Depreciation (1 960) 20 (1 940)
Amortisation of intangible assets (136) (136)
Operating profit 3 527 (145) (69) 3 313
Fair value adjustments on financial instruments (47) (47)
Net finance costs and dividends received (942) 21 (51) (972)
Profit before exceptional items 2 538 (124) (120) 2 294
Exceptional items (119) 40 (79)
Profit before taxation 2 419 (84) (120) 2 215
Taxation (804) 38 37 (729)
Profit after taxation 1 615 (46) (83) 1 486
Income from associates and joint ventures 185 185
Net profit from continuing operations 1 800 (46) (83) 1 671
Discontinued operations
Profit from discontinued operations 46 46
Net profit for the period 1 800 (83) 1 717
Net profit attributable to:
Owners of Barloworld Limited 1 692 (83) 1 609
Non-controlling interest in subsidiaries 108 108
1 800 (83) 1 717
Earnings per share (cents)
- basic 801.9 (38.9) 763.0
- diluted 798.3 (39.1) 759.2
Earnings per share from continuing operations (cents)
- basic 801.9 (23.1) (38.9) 739.9
- diluted 798.3 (23.0) (39.1) 736.2
Profit per share from discontinued operations^ (cents)
- basic 23.1 23.1
- diluted 23.0 23.0
Condensed consolidated statement of comprehensive income
restatement
Items that will not be reclassified to profit or loss: (377) 87 (290)
Actuarial losses on post-retirement benefit obligations (430) 112 (318)
Taxation effect 53 (24) 29
^ Refer note 2 for details of headline earnings per share calculation.
Six months ended
31 March 31 March 31 March
2013 2013 2013
Rm Rm Rm
Previously IFRS 10/ Restated
stated IAS 19
19. Comparative information continued
Condensed consolidated statement of financial
position at 31 March
ASSETS
Non-current assets 14 882 31 14 913
Property, plant and equipment 10 584 10 584
Goodwill 1 821 1 821
Intangible assets 1 265 1 265
Investment in associates and joint ventures 527 527
Finance lease receivables 82 82
Long-term financial assets 73 31 104
Deferred taxation assets 530 530
Current assets 24 221 (154) 24 067
Vehicle rental fleet 2 038 2 038
Inventories 12 401 12 401
Trade and other receivables 8 064 (10) 8 054
Taxation 9 9
Cash and cash equivalents 1 709 (144) 1 565
Assets classified as held for sale 293 293
Total assets 39 396 (123) 39 273
EQUITY AND LIABILITIES
Capital and reserves
Share capital and premium 311 311
Other reserves 3 030 2 3 032
Retained income 10 445 54 10 499
Interest of shareholders of Barloworld Limited 13 786 56 13 842
Non-controlling interest 439 439
Interest of all shareholders 14 225 56 14 281
Non-current liabilities 9 087 (117) 8 970
Interest-bearing 6 950 6 950
Deferred taxation liabilities 427 14 441
Provisions 197 (59) 138
Other non-current liabilities 1 513 (72) 1 441
Current liabilities 15 879 (62) 15 816
Trade and other payables 8 983 (6) 8 977
Provisions 973 (49) 924
Taxation 161 (7) 154
Amounts due to bankers and short-term loans 5 762 5 762
Liabilities directly associated with assets classified
as held for sale 205 205
Total equity and liabilities 39 396 (123) 39 273
Year ended
30 Sept 30 Sept 30 Sept
2013 2013 2013
Rm Rm Rm
Previously IFRS 10/ Restated
stated IAS 19
19. Comparative information continued
Condensed consolidated statement of financial
position at 30 September
ASSETS
Non-current assets 15 997 26 16 023
Property, plant and equipment 11 356 11 356
Goodwill 1 820 1 820
Intangible assets 1 399 1 399
Investment in associates and joint ventures 571 571
Finance lease receivables 115 115
Long-term financial assets 82 26 108
Deferred taxation assets 654 654
Current assets 24 365 (152) 24 213
Vehicle rental fleet 2 081 2 081
Inventories 11 688 11 688
Trade and other receivables 7 698 (11) 7 687
Taxation 62 62
Cash and cash equivalents 2 836 (141) 2 695
Assets classified as held for sale 371 371
Total assets 40 733 (126) 40 607
Year ended
30 Sept 30 Sept 30 Sept
2013 2013 2013
Rm Rm Rm
Previously IFRS 10/ Restated
stated IAS 19
19. Comparative information continued
Condensed consolidated statement of financial
position at 30 September continued
EQUITY AND LIABILITIES
Capital and reserves
Share capital and premium 316 316
Other reserves 4 084 10 4 094
Retained income 10 977 58 11 035
Interest of shareholders of Barloworld Limited 15 377 68 15 445
Non-controlling interest 462 462
Interest of all shareholders 15 839 68 15 907
Non-current liabilities 9 708 (97) 9 611
Interest-bearing 7 285 7 285
Deferred taxation liabilities 404 17 421
Provisions 294 (27) 267
Other non-current liabilities 1 725 (87) 1 638
Current liabilities 15 080 (97) 14 983
Trade and other payables 10 787 (7) 10 780
Provisions 1 079 (84) 995
Taxation 246 (6) 240
Amounts due to bankers and short-term loans 2 968 2 968
Liabilities directly associated with assets classified
as held for sale 106 106
Total equity and liabilities 40 733 (126) 40 607
Six months ended
31 Mar 31 Mar 31 Mar
2013 2013 2013
Rm Rm Rm
Previously IFRS 10/ Restated
Notes stated IAS 19
19. Comparative information continued
Condensed consolidated statement of cash flows
Cash flow from operating activities
Operating cash flows before movements in working capital 2 653 (5) 2 648
Increase in working capital (2 408) 3 (2 405)
Cash generated from operations before investment in
rental assets 245 (2) 243
Net investment in fleet leasing and equipment rental assets 11 (702) (702)
Net investment in vehicle rental fleet 11 (406) (406)
Cash utilised in operations (863) (2) (865)
Realised fair value adjustments on financial instruments 55 55
Finance costs and investment income (407) (1) (408)
Taxation paid (378) 6 (372)
Cash outflow from operations (1 593) 3 (1 590)
Dividends paid (including non-controlling interest) 12 (358) (358)
Net cash applied to operating activities (1 951) 3 (1 948)
Net cash applied to investing activities (963) (963)
Acquisition of subsidiaries, investments and intangibles 13 (594) (594)
Net investment in leasing receivables (5) (5)
Acquisition of property, plant and equipment (417) (417)
Proceeds on disposal of property, plant and equipment 53 53
Net cash outflow before financing activities (2 914) 3 (2 911)
Net cash from financing activities 1 902 1 902
Ordinary shares issued 1 1
Purchase of non-controlling interest (125) (125)
Increase in interest-bearing liabilities 2 026 2 026
Net decrease in cash and cash equivalents (1 012) 3 (1 009)
Cash and cash equivalents at beginning of period 2 624 (148) 2 476
Effect of foreign exchange rate movements 113 113
Effect of cash balances held for sale (16) (16)
Cash and cash equivalents at end of period 1 709 (145) 1 564
Year ended
30 Sept 30 Sept 30 Sept
2013 2013 2013
Rm Rm Rm
Previously IFRS 10/ Restated
Notes stated IAS 19
19. Comparative information continued
Condensed consolidated statement of cash flows continued
Cash flow from operating activities
Operating cash flows before movements in working capital 5 936 (12) 5 924
Increase in working capital 535 4 539
Cash generated from operations before investment in
rental assets 6 471 (8) 6 463
Net investment in fleet leasing and equipment rental assets 11 (1 636) (1 636)
Net investment in vehicle rental fleet 11 (572) (572)
Cash utilised in operations 4 263 (8) 4 255
Realised fair value adjustments on financial instruments (55) (1) (56)
Finance costs and investment income (771) (771)
Taxation paid (837) 16 (821)
Cash outflow from operations 2 600 7 2 607
Dividends paid (including non-controlling interest) 12 (598) (598)
Net cash applied to operating activities 2 002 7 2 009
Net cash applied to investing activities (1 349) (1 349)
Acquisition of subsidiaries, investments and intangibles 13 (775) (775)
Proceeds on disposal of subsidiaries, investments,
intangibles and loans repaid 14 105 105
Net investment in leasing receivables 22 22
Acquisition of property, plant and equipment (818) (818)
Proceeds on disposal of property, plant and equipment 117 117
Net cash outflow before financing activities 654 6 660
Net cash from financing activities (620) (620)
Ordinary shares issued 4 4
Shares repurchased for forfeitable share plan (32) (32)
Purchase of non-controlling interest (125) (125)
Non-controlling equity loans 6 6
Increase in interest-bearing liabilities (473) (473)
Net decrease in cash and cash equivalents 34 6 40
Cash and cash equivalents at beginning of year 2 624 (148) 2 476
Effect of foreign exchange rate movements 208 208
Effect of cash balances held for sale (29) (29)
Cash and cash equivalents at end of period 2 837 (142) 2 695
20. Events after the reporting period
The final cash proceeds on the sale of the Australian automotive business were received on 1 April 2014.
21. Auditor’s review
These interim condensed consolidated financial statements for the period ended 31 March 2014 have been
reviewed by Deloitte & Touche, who expressed an unmodified review conclusion. A copy of the auditor’s
review report is available for inspection at the company’s registered office together with the financial
statements identified in the auditor’s report.
The auditor's report does not necessarily report on all of the information contained in this announcement/
financial results. Shareholders are therefore advised that in order to obtain a full understanding of the
nature of the auditor's engagement they should obtain a copy of the auditor's report together with the
accompanying financial information from the issuer's registered office.
Operating segments
Revenue Operating profit/(loss)
Six months ended Year ended Six months ended Year ended
31 Mar 31 Mar 30 Sept 31 Mar 31 Mar 30 Sept
2014 2013 2013 2014 2013 2013
Reviewed Reviewed Audited Reviewed Reviewed Audited
Rm Restated* Restated* Rm Restated* Restated*
Rm Rm Rm Rm
Equipment and Handling 14 771 15 001 30 682 923 842 2 123
Automotive and Logistics 15 112 13 554 28 806 775 616 1 322
Corporate 4 6 10 (59) (74) (132)
Total continuing operations 29 887 28 561 59 498 1 639 1 384 3 313
Southern Africa 25 212 22 949 48 631 1 604 1 287 3 046
Europe 4 674 5 606 10 856 35 94 265
United States 1 6 11 3 2
Australia and Asia
Total continuing operations 29 887 28 561 59 498 1 639 1 384 3 313
* Restated for the treatment of IFRS 10, IAS 19 and discontinued operation - refer to note 19.
Operating segments (continued)
Fair value adjustments Segment result: Operating profit/(loss)
on financial instruments including fair value adjustments
Six months ended Year ended Six months ended Year ended
31 Mar 31 Mar 30 Sept 31 Mar 31 Mar 30 Sept
2014 2013 2013 2014 2013 2013
Reviewed Reviewed Audited Reviewed Reviewed Audited
Rm Restated* Restated* Rm Restated* Restated*
Rm Rm Rm Rm
Equipment and Handling (109) 3 (54) 814 845 2 069
Automotive and Logistics 3 4 775 619 1 326
Corporate 1 1 3 (58) (73) (129)
Total continuing operations (108) 7 (47) 1 531 1 391 3 266
Southern Africa (95) 8 (40) 1 509 1 295 3 006
Europe (13) (1) (6) 22 93 259
United States (1) 3 1
Australia and Asia
Total continuing operations (108) 7 (47) 1 531 1 391 3 266
* Restated for the treatment of IFRS 10, IAS 19 and discontinued operation - refer to note 19.
Operating segments (continued)
Operating margin (%) Net operating assets/
(liabilities)
Six months ended Year ended
31 Mar 31 Mar 30 Sept 31 Mar 30 Sept
2014 2013 2013 2014 2013
Reviewed Reviewed Audited Reviewed Audited
% Restated* Restated* Rm Restated*
% % Rm
Equipment and Handling 6.2 5.6 6.9 16 571 12 849
Automotive and Logistics 5.1 4.5 4.6 9 267 9 456
Corporate 25 (977)
Total continuing operations 5.5 4.8 5.6 25 863 21 328
Southern Africa 6.4 5.6 6.3 20 178 16 021
Europe 0.7 1.7 2.4 5 706 3 972
United States 25.6 48.1 18.2 (9) (13)
Australia and Asia (12) 1 348
Total continuing operations 5.5 4.8 5.6 25 863 21 328
* Restated for the treatment of IFRS 10, IAS 19 and discontinued operation - refer to note 19.
Salient features
Six months ended Year ended
31 Mar 31 Mar 30 Sept
2014 2013 2013
Restated* Restated*
Financial
Group headline earnings per share (cents) 336.1 304.3 820.8
Continuing headline earnings per share (cents) 316.3 291.0 779.6
Dividends per share (cents) 106 96 291
Continuing operating margin (%) 5.5 4.8 5.6
Continuing net asset turn (times) 2.2 2.3 2.4
Continuing EBITDA/interest paid (times) 5.2 4.8 5.4
Net debt/equity (%) 68.0 77.0 47.5
Continuing return on net operating assets (RONOA) (%) 14.8 13.7 17.4
Net asset value per share including investments at
fair value (cents) 7 513 6 511 7 266
Number of ordinary shares in issue, including BEE
shares (000) 231 292 231 106 231 292
Non financial - continuing operations#
Energy consumption (GJ) 1 425 224 918 023 2 779 570
Greenhouse gas emissions (tCO2e)@ 133 743 94 679 260 422
Water consumption (ML) 347 338 832
Number of employees 19 141 19 124 19 182
LTIFR† 1.25 1.11 0.99
Fatalities 1 0 3
dti^ B-BBEE rating (level)+ 2 2 2
Closing rate Average rate
Six months ended Year ended Six months ended Year ended
31 Mar 31 Mar 30 Sept 31 Mar 31 Mar 30 Sept
2014 2013 2013 2014 2013 2013
Rand Rand Rand Rand Rand Rand
Exchange rates
United States dollar 10.52 9.17 10.06 10.47 8.78 9.28
Euro 14.50 11.78 13.62 14.31 11.51 12.18
British sterling 17.54 13.93 16.30 17.22 13.91 14.48
# Disclosure of discontinued operations available on Barloworld website.
@ Scope 1 and 2.
† Lost-time injuries multiplied by 200 000 divided by total hours worked.
^ Department of Trade and Industry (South Africa).
+ Audited and verified by Empowerdex.
*Restated for the treatment of IFRS 10, IAS 19 and discontinued operation - refer to note 19.
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.
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
Email invest@barloworld.com
College Hill: Amelia Soares
Tel +27 11 447 3030
Email amelia.soares@collegehill.co.za
Sponsor: J.P. Morgan Equities South Africa (Pty) Ltd
For background information visit www.barloworld.com
For more information visit www.barloworld.com
Date: 19/05/2014 07:30:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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