Wrap Text
Year-end results for the 12 months to 30 September 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”)
Year-end results for the 12 months to 30 September 2014
Salient features
- Revenue
Up by 4% to R62.1 billion
- Operating profit
Up by 16% to R3 830 million
- Australian motor retail operations
disposal for R1.3 billion
- Basic earnings per share
increased by 33% to 1 012 cents
- Headline earnings per share
from continuing operations up 10% to 857 cents
- Total dividend per share
increased 10% to 320 cents
Clive Thomson, CE of Barloworld, said:
“The group delivered a solid performance for the year with operating profits up 16% and headline earnings per share
from continuing operations up 10%.
Our Equipment business in southern Africa performed well notwithstanding weak commodity prices and reduced capital
expenditure in the mining sector. The construction sector in Spain remained depressed and necessitated a further
restructuring of our operations, while our Russian business delivered a pleasing result notwithstanding the uncertainties
emanating from the Ukraine crisis.
The Automotive and Logistics division traded strongly due to improved operating efficiency and disciplined cost
control.
While a number of geopolitical risks and economic uncertainties exist globally, our focus will remain on executing our
strategy, driving operational efficiencies and maintaining strong cash flows. We expect to continue to make good progress into
2015 and are well placed to benefit once the infrastructure and mining cycles move into a recovery phase across our key
geographies.”
17 November 2014
Chairman and Chief Executive’s report
Overview
Against a backdrop of challenging economic conditions and geopolitical uncertainty, the group produced a solid result
for our 2014 financial year.
Revenue from continuing operations increased by 4% to R62.1 billion while operating profit increased by 16% to R3 830
million. This reflects improvements in operating efficiencies and disciplined cost control as the operating margin
increased from 5.6% to 6.2%.
Headline earnings per share from continuing operations increased by 10% to 857 cents compared to the restated 780
cents in 2013. The dividend for the year of 320 cents is 10% higher (2013: 291 cents).
The group’s return on net operating assets of 18.8% was slightly up on the prior year notwithstanding the costs
incurred on restructuring the Iberian equipment business.
Strategic developments
A number of niche acquisitions were made in our Automotive business including Leach Toyota and Hino in Kuruman and 51%
of the Jaguar Land Rover dealership in Witbank. Post year end we concluded the acquisition of a fleet services business
in Tanzania which establishes a presence in East Africa to complement the West African presence we are building in
Ghana.
Our motor retail business in Australia was disposed of for R1.3 billion generating a profit of R374 million. This will
facilitate the redeployment of capital over time into businesses generating higher financial returns.
Within Logistics we made an acquisition in an extra heavy abnormal transport business which has synergies with our
equipment operations. We also diversified the Barloworld Transport business into the sugar cane sector and organically
established and secured the necessary skills to grow in the mobile crane segment. Our loss making Far East logistics
airfreight business was disposed of in November 2013.
In our Equipment division, the Bucyrus acquisitions (extended mining product range) previously concluded in southern
Africa and Russia are being successfully integrated into our Caterpillar mining equipment operations. These transactions
are performing well ahead of our acquisition projections.
We sold our materials handling business in Holland in December 2013 which concluded the disposals of our international
Handling operations. In September 2014 we acquired the AGCO agricultural equipment dealership in Zambia as part of our
Africa growth strategy.
Operational review
Equipment and Handling
Equipment southern Africa
The business increased revenue by R1.8 billion (9.3%) to R20.9 billion and delivered a good increase in operating
profitability despite the ongoing slowdown in the mining sector. Higher than planned activity in the extended mining product
range (EMPR) growth in aftermarket revenues and rand weakness contributed positively to the result.
The deferral of new mining capex was counteracted by growth in our parts and service business as existing equipment
fleets are maintained. Aftermarket revenues grew by close to 17% in the year and now represent approximately 43% of total
revenue.
Operating profit for the year of R1 968 million was 17.3% ahead of last year with the EMPR business exceeding
expectations. The operating margin of 9.4% was up on the prior year 8.8% and highlights the strength of the business model in a
difficult trading environment.
Income from joint ventures increased by 23.7% to R223 million.
Equipment Russia
The business delivered a pleasing result despite the difficult business environment and uncertainty caused by the
Ukraine crisis that persisted for most of the year.
Revenue for the year of $382.7 million was $115 million (23%) down on the prior year mainly due to the slowdown in
mining sales. The power business held up well aided by strong rental demand. Parts and service revenues grew by 7.6% in the
year with EMPR growing particularly strongly. After sales represented 46% of total revenue compared to 33% last year.
Operating profit of R429 million ($40 million) was generated which was slightly below the prior year in USD terms.
However, the rand operating margin of 10.7% was well up on the 8.8% achieved in 2013 due to the higher aftermarket mix,
good cost control and supply chain efficiencies.
Equipment Iberia
The recovery in the Spanish economy has not yet impacted fixed investment expenditure and consequently the local
construction industry remains in limbo.
Revenue for the year of €290 million was €76.6 million (21%) below last year which had included various large package
deals. While machine industry unit sales have started to show some signs of recovery in 2014 this has largely been in
the smaller general construction and tele handler markets which have had a limited impact on our revenues.
Operating losses from normal trading of €3.6 million were incurred in the second half compared to the €2 million loss
in the first half. These losses stem mainly from the earthmoving business in Spain while the power business remained
profitable. This has unfortunately meant that we have had to take further steps to adjust the overhead structure of the
businesses in line with current activity levels.
In September agreement was reached with the trade unions for a further reduction in the Spanish workforce. Total
restructuring costs expensed in the period amount to €6.2 million and are expected to generate €7.4 million savings in the
year ahead.
Handling
The business recorded revenue of R1.9 billion for the year which was R0.6 billion down on last year following the
disposals of the Handling businesses in Holland and Belgium. Increased activity levels were achieved in Agriculture SA and
Mozambique.
Operating profit of R55 million was slightly higher than the previous year which included certain businesses now
disposed. The Agriculture business in Russia was impacted by difficult trading conditions.
Automotive and logistics
The division delivered a strong performance generating revenue of R31.1 billion which was R2.3 billion (8.1%) up on
the last year excluding the results of the Motor Retail Australia businesses disposed of which are disclosed as
discontinued operations.
Operating profit for 2014 of R1 644 million showed an increase of R322 million (24%) over last year. The operating
margin for the division increased from 4.6% to 5.3% in the current year.
Motor Retail southern Africa
The South African vehicle industry remains under pressure as a result of increasing interest rates, lower economic
growth and above inflation new vehicle price increases following a sharp decline in the value of the rand. The domestic
vehicle market is projected to decline by 1% to 3% in calendar 2014.
In these difficult trading conditions our motor retail business produced a strong performance increasing revenue by
R1.7 billion (9.8%) to R19.2 billion. The growth came from increased used retail sales and strongly improved parts sales.
Operating profit of R542 million was R121 million (29%) up on last year with the operating margin increasing from 2.4%
to 2.8% for the year. We have also selectively increased our dealership footprint with new dealerships in the Northern
Cape and Mpumalanga.
Car Rental
Avis Rent a Car increased revenue by 11% to R4.5 billion supported by a 9.9% growth in rental days and a 2.7% increase
in revenue per day.
The operating profit for the year of R421 million was 33% ahead of the R317 million in the prior year with operating
margin increasing from 7.8% to 9.3%. Average fleet utilisation of 76% was slightly ahead of the 75% achieved in 2013.
Avis Fleet Services
Revenue increased by 6.6% to R3.1 billion. The financed fleet was maintained at similar levels, the managed
maintenance fleet grew by 16% while the total fleet under management was up 11%.
Operating profit for the year of R559 million, R75 million (16%) ahead of 2013, was also assisted by an improved
contribution from used vehicle sales. Operating margin for the division increased to 18.1% from 16.7% last year.
Logistics
The business generated revenue of R4.4 billion for the year which was similar to last year. The transport business has
made great strides since the acquisition of Manline in 2013.
Operating profit of R122 million, net of the R20 million Ellerines receivable provision, was 22% ahead of last year
driven by the transport business. The supply chain management profitability was adversely impacted by the provisioning
required for the Ellerines contract following that customer’s business rescue proceedings in early August. In addition, a
provision of R76 million was made for the impairment of intangibles and other assets related to the contract. Full
provision has thus been made in respect of this exposure.
The freight management and services loss for the year resulted from weak volumes in Spain and a reduction in Sea Air
volumes in the Middle East following the loss of a significant customer in January 2014. Steps have been taken to replace
the lost volumes.
Sustainable development
Underscoring our commitment to sustainability, we are constituents of the Dow Jones Sustainability Emerging Markets
Index and the Global Compact 100 Index, one of only a few South African companies to have achieved this recognition.
Stakeholder engagement continues to underpin sustainable value creation activities across our operations.
Providing a safe and healthy work environment is a key focus. It was therefore disappointing that our Lost-Time Injury
Frequency Rate (LTIFR) increased and tragically, there were three work-related fatalities due to motor vehicle
accidents during the year. We extend our condolences to the families of the deceased and continue to foster a culture of safety
and awareness in the group to prevent accidents and injuries in future.
The majority of our operations have performed ahead of our aspirational group target of a 12% efficiency improvement
for non-renewable energy consumption and greenhouse gas emissions (scope 1 and 2) set for the end of this financial year
off a 2009 baseline. However, our overall group target was not achieved due mainly to a number of investments made in
the logistics road transport business which has higher energy and emissions intensities compared to our other businesses.
Nonetheless this target played a major role in focusing our efforts on energy efficiency with significant benefits for
the organisation.
Human resources, diversity and empowerment
We continue to focus on people management and ensuring the required leadership and talent pipeline is in place.
Workforce diversity remains a key focus area across the group and in South Africa.
It was pleasing that the group maintained our dti B-BBEE level 2 rating. As part of our focus on enterprise and
supplier development we initiated supplier development workshops across our South African operations aimed at broadening the
diversity of our supply base.
The B-BBEE transaction entered into in September 2008 matures in September 2015. We have embarked on a process to
address the future of the credit sale structure which includes six Strategic Black Partners (SBPs) and three Community
Service Groups (CSGs).
Changes in directorate and executive management
Ms Hixonia Nyasulu retired by rotation from the board at the annual general meeting on 29 January 2014 having served
on the board for seven years. Ms Ngozichukwuka (Ngozi) Edozien was appointed as an independent non-executive director of
the company effective 19 March 2014.
Mr Isaac Shongwe, previously Executive director: Human resources, strategy and sustainability, having served the group
for more than nine years, relinquished his executive management responsibilities effective 1 June 2014 and became a
non-executive director of the company from that date.
Mr Dominic Sewela, Chief executive officer of Barloworld Equipment southern Africa, was appointed as an executive
director of the company with effect from 19 March 2014.
Mr Sibani Mngomezulu was appointed as Group executive: Human resources, strategy and sustainability effective 1 June
2014.
Outlook
The slowdown in the Chinese economy continues to impact commodity demand with a consequent reduction in commodity
prices.
While the Equipment southern Africa firm order book at September 2014 of R1.9 billion is well down on the R3.5 billion
at September 2013, there are a number of potential projects underway which should support our mining businesses into
2015 and aftermarket revenues are expected to continue to grow. The order book reduction is also reflective of the
shortening lead times for machine orders placed on Caterpillar; currently around 20 weeks for mining equipment.
We also expect the long-term rental business to continue to underpin demand as contract miners in particular take
advantage of this model to fund their capex requirements. Customer demand for rental machines is not included in the order
book.
The outlook for construction in southern Africa remains positive with a number of projects in Angola, Namibia and
Mozambique. The South African construction sector remains subdued with some activity at local government and municipal
levels for small and medium sized contractors, however, infrastructure projects in the remainder of southern Africa still
create significant opportunities. We will further intensify the focus on cost management in view of the prevailing
uncertainty in the market.
In Spain the outlook for improved economic growth in 2015 has been reduced by weakening external demand particularly
from other European markets. The government is expected to bring the budget deficit down to the 3% of GDP target in 2017
which could mean continued restrictions in public works spending in the short term.
The Equipment Iberia firm order book at September 2014 of €33 million was mainly related to Power (78%) which
continues to generate strong activity in the marine, electric power and industrial segments. The workforce restructure at the
end of 2014 is expected to reduce the division’s overhead structure by approximately €7.4 million in the coming year.
In addition to the worldwide slowdown in commodity demand the Russian economy has weakened following the imposition of
sanctions by the US and EU, the collapse in the oil price and the related sharp decline in the value of the rouble. The
current view is that the Russian economy is unlikely to show positive growth in 2015.
The Equipment Russia firm order book of $14 million is well down on the prior year. However, there remains a number of
major projects currently under discussion for both Caterpillar legacy and EMPR products. In addition there are orders
of $17 million carried forward from the EMPR acquisition for delivery in 2015.
The focus on the Global Power business continues to gain traction. The marine market in Spain remains strong and we
have gained some inroads in the South African market with the recent Transnet tug order. The electric power market has
been under pressure in both Iberia and southern Africa although we did secure a large order in Mozambique in October 2014
and some significant opportunities are in the pipeline.
Despite current lower order books the medium-term outlook appears brighter for the Agriculture businesses in South
Africa and Mozambique, particularly in the high technology Equipment segment.
The South African vehicle industry is expected to remain subdued in 2015 with consumers under pressure and increasing
vehicle price inflation. However we anticipate some resilience in the premium brands, while we should further benefit
from the contribution of the newly acquired dealerships for the full year.
Car rental days should continue to grow positively and benefit from a further improvement in revenue per day. Our
fleet services business will continue to generate organic growth in revenue and profitability based on the existing customer
base. The National department of Transport contract is expected to be adjudicated before this calendar year end.
The logistics growth outlook for 2015 is positive. The transport business will benefit from the organic capital
deployed and acquisitions finalised during the year. The international Logistics businesses are expected to improve in 2015 as
a result of new contracts that have been secured and various actions taken.
While a number of geopolitical risks and economic uncertainties exist globally, our focus will remain on executing our strategy,
driving operational efficiencies and maintaining strong cash flows. We expect to continue to make progress into 2015
and are well placed to benefit once the infrastructure and mining cycles move into a recovery phase across our key
geographies.
DB Ntsebeza CB Thomson
Chairman Chief Executive
Group financial review
Revenue for the year increased by 4% to R62.1 billion, mainly due to increased revenues in Equipment southern Africa
(R1.8 billion) in particular the extended mining product range (EMPR) and Automotive and Logistics (R2.3 billion), offset
by reduced revenue in Equipment Russia, Iberia and Handling. The weakening rand increased revenue for the year by
R2 billion.
Earnings before interest, taxation, depreciation and amortisation (EBITDA) increased by 14% to R6 170 million with
depreciation and amortisation increasing by 13%.
Operating profit rose by 16% to R3 830 million with the group operating margin increased to 6.2%. The strong operating
results generated in Equipment southern Africa (R1 968 million) and Russia (R429 million) made up for the operating
loss of R168 million (€11.7 million) incurred in Equipment Iberia which included restructure costs of R88 million
(€6.2 million).
The Automotive and Logistics division produced another strong performance with all business units performing well,
increasing operating profit by 24% to R1 644 million. This was after making provision for the exposure arising from the
Ellerines Holdings business rescue.
The total negative fair value adjustments on financial instruments of R156 million (2013: R47 million) mainly relate
to the cost of forward points on foreign exchange contracts in Equipment southern Africa and Handling South Africa.
Finance costs increased by R117 million to R1[####]117 million. The increase is mainly due to higher average debt levels,
arising from increased average working capital levels for the year, increased fleet leasing and rental fleets and capex
relating to investment in the logistics business, further impacted by higher short-term interest rates. We remitted £60
million of the proceeds on sale of the Australian operations back to South Africa at the end of September in order to
reduce local borrowing costs in the coming year.
Exceptional items of R66 million (net charge) mainly comprise the impairments of goodwill in the logistics sea air
transport business (R208 million), and intangible assets and other assets in the logistics supply chain management business
related to the Ellerines contract (R76 million). This was offset by profits from foreign currency translation reserves
of R97 million realised on disposals of offshore businesses in handling and logistics, profits on disposal of
investments (R64 million), and a profit on sale of property of R77 million.
Taxation charge for the year was R837 million. This included further impairment of the Spanish deferred tax asset of
€3 million (R42 million). The effective taxation rate (excluding prior year taxation and taxation on exceptional items)
was 34.1% (2013: 31.8%). The effective rate was negatively impacted by the unrelieved tax losses in Equipment Iberia and
deferred tax arising on exchange movements in foreign subsidiaries.
Income from associates and joint ventures increased by 17% to R217 million (2013: R185 million) again driven by a
strong performance from Equipment joint ventures.
The non-controlling interest in the current year’s earnings includes dividends of R44 million paid to participants of
the BEE transaction with the balance relating to the minorities in our NMI/DSM and Transport subsidiaries.
Headline earnings per share (HEPS) from continuing operations increased by 10% to 857 cents (2013: 780 cents) and
total HEPS (including discontinued operations) increased by 8% to 883 cents (2013: 821 cents). Basic earnings per share
(EPS) (including discontinued operations) of 1 012 cents is 33% higher than the prior year due to the exceptional profit of
R374 million generated on the disposal of the Australian Motor Retail operations.
The group’s results for the year ended 30 September 2013 discontinued operation have been restated to reflect the changes
in accounting policies as well as discontinued operations resulting from the disposal of our Australian motor retail business.
The group applied the revised IAS19 (employee benefits) and IFRS 10 (consolidated financial statements) resulting in restatement
of prior year results on a comparable basis.
Cash flow
Cash generated from operations decreased to R3.0 billion (2013: R4.3 billion generated). Activity levels in the second
half resulted in an increase in working capital for the year of R470 million (2013: R539 million decrease) which
includes a funding payment to the UK defined benefit pension scheme of £15.2 million (R0.3 billion). The increased investment
in fleet leasing assets was mainly due to the increased Equipment SA long-term rental fleet.
Net cash applied in the net investment of property, plant and equipment together with subsidiaries and intangibles of
R1.4 billion was largely offset by the proceeds on disposal of motor retail Australia of R1.3 billion. This contributed
to a net inflow of funds for the year of R145 million compared to an inflow of R660 million last year which represented
a significant improvement on the cash outflow of R3.9 billion reported at the interim.
Financial position and debt
Total assets employed in the group increased by R3.4 billion to R44 billion. The increase was driven by the weaker
rand (R1.3 billion) and an increase in rental and leasing assets, as well as the acquisition of property, plant and
equipment during the year.
Total interest-bearing debt at 30 September 2014 increased to R11.3 billion (2013: R10.3 billion) while cash and cash
equivalents increased to R4.2 billion (2013: R2.7 billion). Net debt reduced in the second half as a result of the
seasonal decrease in working capital, and was positively impacted by the receipt of the proceeds from the sale of Motor
Retail Australia. Net interest-bearing debt at 30 September 2014 of R7.2 billion was R404 million down on the prior year of
R7.6 billion.
Debt
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 2019 financial year and R827 million in 2021 financial year. In
addition a R700 million bank term facility was extended for a further five years. During the second half the group concluded
a five-year revolving bank credit facility of R1 billion, while Barloworld Transport finalised banking facilities of
R561 million. The funds raised have been utilised to fund short-term working capital requirements and to improve the
maturity profile of group debt.
In South Africa, short-term debt includes commercial paper totalling R1.0 billion (September 2013: R1.2 billion).
While this market has remained liquid, spreads have been negatively impacted by interest rate uncertainty. We expect to
maintain our participation in this market.
Cash balances of R4.2 billion are available to meet short-term commitments. The group has short-term borrowings at 30
September 2014 of R4 395 million, committed unutilised borrowing facilities of R6 102 million and further uncommitted
facilities of R2 280 million.
Fitch Ratings downgraded the company’s long term credit rating to A+(zaf) (Stable Outlook) following the annual credit
review in February 2014. While this had a marginal impact on the cost of short-term commercial paper funding, we have
not experienced any impact on our cost of long-term borrowings.
The group debt to equity ratio at 30 September 2014 was 64.7% (September 2013: 64.0%), while group net debt to equity
was 40.9% (September 2013: 47.5%).
Gearing in the three segments are as follows:
Total debt to equity (%) Group Group
Trading Leasing Car rental debt net debt
Target range 30 - 50 600 - 800 200 - 300
Ratio at 30 September 2014 40 662 205 65 41
Ratio at 30 September 2013 38 666 224 64 48
Going forward
The group return on net operating assets increased from 18% in 2013 to 18.8% in the current year driven by the strong
operating performances in Equipment southern Africa and the Automotive and Logistics division. The group continues to
deploy capital into higher returning businesses, which together with a projected return to profitability in Equipment
Iberia, should further contribute to improved returns in 2014.
DG Wilson
Finance director
Operational reviews
Equipment and Handling
Revenue Operating profit/(loss) Net operating assets
Year ended Year ended
30 September 30 September 30 September
2014 2013 2014 2013 2014 2013
Rm Rm Rm Rm Rm Rm
Restated* Restated* Restated*
Equipment 29 031 28 148 2 229 2 069 14 064 11 877
- Southern Africa 20 903 19 126 1 968 1 678 8 770 6 901
- Europe 4 134 4 377 (168) (16) 2 343 2 293
- Russia 3 994 4 645 429 407 2 951 2 683
Handling 1 929 2 534 55 54 781 751
30 960 30 682 2 284 2 123 14 845 12 628
Share of associate and joint venture income 228 188
*Restated for the treatment of IFRS 10.
Equipment southern Africa delivered a solid performance in the year ending September 2014, despite the tough economic
environment characterised by volatile commodity prices globally and labour unrest in South Africa. Revenue increased by
9.3% to R20.9 billion. Factors that have led to the slowdown in growth in the mining sector in southern Africa will
continue to have a negative impact on the mining industry in 2015; with the recovery only expected from the second half of
2015 onwards.
Operating profit for the period improved by 17.3% to R1 968 million driven mainly by stronger machine, parts and MARC
performance. This was underpinned by strong rental activity, driving growth in the active machine population and
consequently the aftersales business.
EMPR produced a strong performance driven by deliveries to Swakop Uranium in Namibia, FQM in Zambia, Moolmans and
Kolomela, and continues to contribute at a higher level than anticipated at acquisition. Joint venture income grew by 23.7%
over last year.
Slow economic growth in China had an unfavourable impact on commodity prices and demand, with the tough environment
resulting in capex reduction by mining customers. The lower firm orders of R1.9 billion compared to R3.5 billion in 2013
is reflective of the challenging industry climate but is also likely to underpin strong aftersales and rental activity.
Shorter lead times on machinery enhance our ability to deliver orders faster than in the past, resulting in a shorter
turnaround on order to delivery.
Equipment Russia produced a pleasing result under challenging conditions. Operating profit of $40 million for the year
was supported by a strong aftermarket performance combined with tight cost controls in both CAT Legacy as well as the
EMPR business segment. The mining downturn continued throughout 2014, with recovery anticipated to commence
during 2016. The impact of a weak mining segment has been exacerbated by uncertainties created by the Ukrainian crisis.
Equipment Iberia operated amidst a continuing depressed construction sector. Revenue of R4 134 billion was down from
last year as the large package deals delivered in 2013 were not repeated. The operating loss of R168 million to September
included restructuring costs of R88.5 million. Macroeconomic indicators have, however, started showing a slow recovery
of the regions´ economy but the construction sector continues to lag.
While power systems activity in both Spain and Portugal was down on the prior year, there are better prospects for the
year ahead as evidenced by a steadily improving order book.
The restructuring of the Handling division was completed in December 2013 with the sale of The Netherlands Handling
business. The remaining forklift operation in South Africa grew profits, with increased aftersales activity more than
compensating for a weak new equipment market. The SEM business saw solid growth in Russia but faced increased competition in
SA. The South African agricultural operation enjoyed record sales, though a decline in maize prices and a credit
squeeze impacted sentiment and demand towards the end of the year. Mozambique doubled sales and moved into profit. Russia grew
share in a depressed market, but volume shortfalls and higher stock impairment charges led to increased losses. The
newly acquired Zambian Agriculture business started trading in September and overall growth prospects in Agriculture remain
encouraging.
Automotive and Logistics
Revenue Operating profit/(loss) Net operating assets
Year ended Year ended
30 September 30 September 30 September
2014 2013 2014 2013 2014 2013
Rm Rm Rm Rm Rm Rm
Restated* Restated* Restated*
Car rental 4 510 4 069 421 317 1 808 1 863
southern Africa
Motor retail 19 173 17 465 542 421 2 258 3 290
- Southern Africa 19 173 17 465 542 421 2 258 1 942
- Australia 1 348
Fleet services 3 087 2 895 559 484 3 318 3 191
southern Africa
Logistics 4 367 4 377 122 100 1 761 1 112
- Southern Africa 3 709 3 454 174 137 1 618 992
- Europe, Middle East and Asia 658 923 (52) (37) 143 120
31 137 28 806 1 644 1 322 9 145 9 456
Share of associate and joint venture loss (11) (4)
*Restated for the treatment of IFRS 10 and discontinued operations.
The division produced an exceptional result in difficult markets. These results exclude the Australian motor retail
operations which were sold, effective 31 March 2014. The continued focus on improving margins and returns across the
division has resulted in operating profit improving by 24% off a growth in revenue of 8.1%. Operating margin improved to 5.3%
from 4.6% in the prior year. The division generated strong operating cash flows, which have been reinvested into
leasing and rental assets, and growing the logistics business in southern Africa.
Avis Rent a Car southern Africa delivered an excellent result, improving operating profit by 33%. The business further
improved fleet utilisation, grew rental day volumes and market share, and increased revenue per rental day. Used
vehicle profits which were marginally better than the high levels achieved in the previous year, supported the result.
The southern African motor retail operations delivered a very good result, growing operating profit by 29% while the
operating margin improved to 2.8% (FY13 2.4%). Overall vehicle sales volumes were ahead of market and the result was
supported by improved after-sales volumes. The acquisition of Leach Toyota and Hino in Kuruman was effective 10 March 2014
and Jaguar Land Rover N4 Witbank was effective 1 July 2014.
Avis Fleet Services produced a pleasing result, further improving operating profit by 16% and improved the operating
margin to 18.1% (FY13: 16.7%) The business maintained 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 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. Certain niche acquisitions and fleet investments made
towards the end of the year will only fully benefit operating profit in the year ahead. Unfortunately R20 million was
provided against operating profit as a result of the Ellerines Holdings business rescue. Overall volumes and margins remain
under pressure in the international businesses. The loss-making Far East airfreight business was exited on 1 November 2013
and further action is being taken to restore profitability in the remaining international operations. Currency weakness
negatively impacted the net operating assets on translation.
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/
Year ended Year ended (liabilities)
30 September 30 September 30 September
2014 2013 2014 2013 2014 2013
Rm Rm Rm Rm Rm Rm
Restated* Restated* Restated*
Southern Africa 4 10 (24) (78) 652 543
Europe (74) (54) (1 944) (1 299)
4 10 (98) (132) (1 292) (756)
*Restated for the treatment of IFRS 10 and IAS 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 corporate operating loss has reduced
mainly owing to lower charges and accruals for long-term incentives linked to the Barloworld share price. In Europe the
higher operating loss is mainly due to the loss in the group’s insurance cell captive as a result of higher claims during
the year. The net operating assets (and liabilities) for corporate includes the UK pension fund deficit which has
increased in the current year and has been affected on translation by the depreciation of the rand.
Dividend declaration
Dividend number 172
Notice is hereby given that final dividend number 172 of 214 cents (gross) per ordinary share in respect of the year
ended 30 September 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 is no Secondary Tax on Companies (STC) credits utilised;
- Barloworld has 231 291 819 ordinary shares in issue;
- The Gross local dividend amount is 214 cents per ordinary share;
- The net dividend amount is 181.9 cents per share.
In compliance with the requirements of Strate and the JSE Limited, the following dates are applicable:
- Dividend declared Monday, 17 November 2014
- Last day to trade cum dividend Friday , 16 January 2015
- Shares trade ex-dividend Monday, 19 January 2015
- Record date Friday, 23 January 2015
- Payment date Monday, 26 January 2015
Share certificates may not be dematerialised or rematerialised between Monday, 12 January 2015 and Friday, 16 January
2015, both days inclusive.
On behalf of the board
LP Manaka
Group company secretary
Summarised consolidated income statement
for the year ended 30 September
Audited
2013
2014 Rm %
Notes Rm Restated* change
Continuing operations
Revenue 62 101 59 498 4
Operating profit before items listed below (EBITDA) 6 170 5 389
Depreciation (2 198) (1 940)
Amortisation of intangible assets (142) (136)
Operating profit 3 830 3 313 16
Fair value adjustments on financial instruments (156) (47)
Finance costs (1 117) (1 000)
Income from investments 39 28
Profit before exceptional items 2 596 2 294 13
Exceptional items 3 (66) (79)
Profit before taxation 2 530 2 215
Taxation (837) (729)
Profit after taxation 1 693 1 486
Income from associates and joint ventures 217 185
Net profit from continuing operations 1 910 1 671
Discontinuing operations
Profit from discontinued operations 6 428 46
Net profit 2 338 1 717
Net profit attributable to:
Owners of Barloworld Limited 2 143 1 609
Non-controlling interest in subsidiaries 195 108
2 338 1 717
Earnings per share (cents)
- basic 1 012.3 763.0
- diluted 1 007.5 759.2
Earnings per share from continuing operations (cents)
- basic 810.3 739.9
- diluted 806.4 736.2
Earnings per share from discontinued operations (cents)
- basic 202.0 23.1
- diluted 201.1 23.0
*Restated for the treatment of IFRS 10, IAS 19 and discontinued operations - refer to note 10.
Summarised consolidated statement of comprehensive income
for the year ended 30 September
Audited
2013
2014 Rm
Rm Restated*
Profit for the year 2 338 1 717
Items that may be reclassified subsequently to profit or loss: 370 1 691
Exchange gains on translation of foreign operations 862 1 680
Translation reserves realised on disposal of foreign joint venture and subsidiaries (510) (14)
Gain on cash flow hedges 25 33
Deferred taxation on cash flow hedges (7) (8)
Items that will not be reclassified to profit or loss: (497) (290)
Actuarial losses on post-retirement benefit obligations (617) (320)
Taxation effect 120 30
Other comprehensive (loss)/income for the year, net of taxation (127) 1 401
Total comprehensive income for the year 2 211 3 118
Total comprehensive income attributable to:
Owners of Barloworld Limited 2 016 3 010
Non-controlling interest in subsidiaries 195 108
2 211 3 118
*Restated for the treatment of IFRS 10, IAS 19 and discontinued operations - refer to note 10.
Summarised consolidated statement of financial position
at 30 September
Audited
2013
2014 Rm
Notes Rm Restated*
ASSETS
Non-current assets 17 287 16 023
Property, plant and equipment 12 614 11 356
Goodwill 1 661 1 820
Intangible assets 1 380 1 399
Investment in associates and joint ventures 720 571
Finance lease receivables 123 115
Long-term financial assets 94 108
Deferred taxation assets 695 654
Current assets 26 719 24 213
Vehicle rental fleet 2 307 2 081
Inventories 11 814 11 688
Trade and other receivables 8 357 7 687
Taxation 79 62
Cash and cash equivalents 4 162 2 695
Assets classified as held for sale 6 371
Total assets 44 006 40 607
EQUITY AND LIABILITIES
Capital and reserves
Share capital and premium 316 316
Other reserves 4 517 4 094
Retained income 12 049 11 035
Interest of shareholders of Barloworld Limited 16 882 15 445
Non-controlling interest 604 462
Interest of all shareholders 17 486 15 907
Non-current liabilities 9 700 9 611
Interest-bearing 6 921 7 285
Deferred taxation liabilities 377 421
Provisions 182 267
Other non-current liabilities 2 220 1 638
Current liabilities 16 820 14 983
Trade and other payables 11 263 10 780
Provisions 1 046 995
Taxation 116 240
Amounts due to bankers and short-term loans 4 395 2 968
Liabilities directly associated with assets
classified as held for sale 6 106
Total equity and liabilities 44 006 40 607
*Restated for the treatment of IFRS 10, IAS 19 and discontinued operations - refer to note 10.
Summarised consolidated statement of changes in equity
at 30 September
Attributable
to Barloworld Non- Interest
Share capital Other Retained Limited controlling of all
and premium reserves income shareholders interest shareholders
Rm Rm Rm Rm Rm Rm
Balance at 1 October 2012 (Restated) 309 2 433 10 181 12 923 298 13 221
Total comprehensive income for the year 1 655 1 355 3 010 108 3 118
Transactions with owners, recorded directly in equity
Other reserve movements 6 21 27 142 169
Dividends (522) (522) (86) (608)
Treasury shares issued 3 3 3
Shares issued in current year 4 4 4
Balance at 30 September 2013 (Restated) 316 4 094 11 035 15 445 462 15 907
Total comprehensive income for the year 370 1 646 2 016 195 2 211
Transactions with owners, recorded directly in equity
Other reserve movements 52 7 59 39 98
Dividends (639) (639) (92) (731)
Balance at 30 September 2014 316 4 517 12 049 16 882 604 17 486
Summarised consolidated statement of cash flows
for the year ended 30 September
Audited
2013
2014 Rm
Notes Rm Restated*
CASH FLOWS FROM OPERATING ACTIVITIES
Operating cash flows before movements in working capital 6 302 5 924
(Increase)/decrease in working capital (470) 539
Cash generated from operations before investment in leasing and rental assets 5 832 6 463
Net investment in fleet leasing and equipment rental assets (2 143) (1 636)
Net investment in vehicle rental fleet (736) (572)
Cash generated from operations 2 953 4 255
Finance costs (1 125) (1 022)
Realised fair value adjustments on financial instruments (162) (54)
Dividends received from investments, associates and joint ventures 197 221
Interest received 39 28
Taxation paid (947) (821)
Cash inflow from operations 955 2 607
Dividends paid (including non-controlling interest) (742) (598)
Cash retained from operating activities 214 2 009
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of subsidiaries, investments and intangibles 4 (323) (775)
Proceeds on disposal of subsidiaries, investments and intangibles 5 1 316 105
Net investment in leasing receivables (15) 22
Acquisition of other property, plant and equipment (1 323) (818)
Replacement capital expenditure (476) (339)
Expansion capital expenditure (847) (479)
Proceeds on disposal of property, plant and equipment 276 117
Net cash used in investing activities (69) (1 349)
Net cash inflow before financing activities 145 660
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds on share issue 4
Shares repurchased for equity-settled share-based payment (34) (32)
Non-controlling equity loans 6
Purchase of non-controlling interest (4) (125)
Proceeds from long-term borrowings 3 651 1 614
Repayment of long-term borrowings (3 987) (1 748)
Increase/(decrease) in short-term interest-bearing liabilities 1 535 (339)
Net cash from/(used in) financing activities 1 161 (620)
Net increase in cash and cash equivalents 1 306 40
Cash and cash equivalents at beginning of year 2 695 2 476
Effect of foreign exchange rate movement on cash balance 131 208
Effect of cash balances classified as held for sale 29 (29)
Cash and cash equivalents at end of year 4 162 2 695
Cash balances not available for use due to reserving restrictions 58 189
*Restated for the treatment of IFRS 10, IAS 19 and discontinued operations - refer to note 10.
Summarised notes to the consolidated financial statements
for the year ended 30 September
1. Basis of preparation
The summary consolidated financial statements are prepared in accordance with the requirements of the JSE Limited
Listings Requirements for preliminary reports, and the requirements of the Companies Act applicable to summary
financial statements. The Listings Requirements require preliminary reports to be prepared in accordance with the
framework concepts and the measurement and recognition requirements of International Financial Reporting Standards
(IFRS) and the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee and Financial
Pronouncements as issued by Financial Reporting Standards Council and to also, as a minimum, contain the
information required by IAS 34 Interim Financial Reporting. The accounting policies applied in the preparation of
the consolidated financial statements from which the summary consolidated financial statements were derived are in
terms of International Financial Reporting Standards and are consistent with those accounting policies applied in
the preparation of the previous consolidated annual financial statements, except for the adoption of the following
amended or new standards and interpretations as detailed in note 11.
Audited
2013
2014 Rm
Rm Restated*
2. Reconciliation of net profit to headline earnings
Net profit attributable to Barloworld shareholders 2 143 1 609
Adjusted for the following:
(Profit)/loss on disposal of subsidiaries and investments (IFRS 10) (530) 43
Profit on disposal of properties (IAS 16) (77) (18)
Impairment of goodwill (IFRS 3) 208 71
Reversal of impairment of investments in associates and joint ventures (IAS 28) 2
Impairment of plant and equipment (IAS 16) and intangibles (IAS 38) and other assets 94 23
Loss on sale of plant and equipment excluding rental assets (IAS 16) 6
Taxation effect of remeasurements (1)
Non-controlling interest in remeasurements 27 (2)
Headline earnings 1 867 1 731
Headline earnings from continuing operations 1 813 1 645
Headline earnings from discontinued operations 54 86
Weighted average number of ordinary shares in issue during the year (000)
- basic 211 669 211 011
- diluted 212 680 211 953
Headline earnings per share (cents)
- basic 882.5 820.8
- diluted 877.7 817.1
Headline earnings per share from continuing operations (cents)
- basic 856.5 779.6
- diluted 852.1 776.1
Headline earnings per share from discontinued operations (cents)
- basic 26.0 41.2
- diluted 25.6 41.0
*Restated for the treatment of IFRS 10, IAS 19 and discontinued operations - refer to note 10.
3. Exceptional items
Profit/(loss) on acquisitions and disposal of investments and subsidiaries 161 (43)
Impairment of goodwill (208) (31)
Impairment of investments (2)
Profit on disposal of property 77 18
Impairment of property, plant and equipment, intangibles and other assets (94) (23)
Gross exceptional loss from continuing operations (66) (79)
Taxation (charge)/benefit on exceptional items (5) 1
Net exceptional loss from continuing operations (71) (78)
Gross exceptional profit from discontinued operations (40)
Net exceptional loss before non-controlling interest (71) (118)
Non-controlling interest on exceptional items (27) 2
Net exceptional loss (98) (116)
4. Acquisition of subsidiaries, investments and intangibles
Inventories acquired (63) (218)
Receivables acquired (5) (113)
Payables, taxation and deferred taxation acquired 36 138
Borrowings net of cash 30 353
Property, plant and equipment, non-current assets, goodwill and non-controlling
interest (100) (488)
Total net assets acquired (101) (328)
Goodwill arising on acquisitions (38) (37)
Intangibles arising on acquisition in terms of IFRS 3 Business Combinations (42) (132)
Total purchase consideration (181) (497)
Investment and intangible assets acquired (142) (278)
Cash amounts paid to acquire subsidiaries, investments and intangibles (323) (775)
During the year the group acquired various businesses of which none was individually material.
*Restated for the treatment of IFRS 10, IAS 19 and discontinued operations - refer to note 10.
5. Proceeds on disposal of subsidiaries, investments and intangibles
Inventories disposed 826 90
Receivables disposed 160 182
Payables, taxation and deferred taxation balances disposed and settled (384) (159)
Borrowings net of cash (180) (56)
Property, plant and equipment, non-current assets, goodwill and intangibles 878 48
Net assets disposed 1 301 105
Less: Non-cash translation reserves realised on disposal of foreign subsidiaries (413) (14)
Profit on disposal 456 14
Net cash proceeds on disposal of subsidiaries 1 343 105
Bank balances and cash in subsidiaries disposed (44)
Proceeds on disposal of investments and intangibles 17
Cash proceeds on disposal of subsidiaries, investments and intangibles 1 316 105
The net cash proceeds on disposal of subsidiaries relates to the disposal of Fern Tree Gully, during October 2013,
Flynt Logistics Operations during November 2013 and Handling Holland during December 2013. The proceeds on disposal
of the remaining portion of Motor Retail Australia were received in April 2014. Additional proceeds of R3.2 million
were received in June 2014.
*Restated for the treatment of IFRS 10, IAS 19 and discontinued operations - refer to note 10.
6. Assets classified as held for sale and discontinued operations
Following the disposal of the Automotive Australia business on 31 March 2014 it
has been classified as a discontinued operations.
Results from discontinued operations are as follows:
Revenue 2 783 5 508
Operating profit before items listed below (EBITDA) 96 166
Depreciation (10) (20)
Operating profit 86 145
Net finance costs and dividends received (8) (21)
Profit before exceptional items 78 124
Exceptional items (40)
Profit before taxation 78 84
Taxation (24) (38)
Net profit of discontinued operations before profit on disposal 54 46
Profit on disposal of discontinued operations (including realisation of
translation reserve) 369
Taxation effect of disposal 5
Profit from discontinued operations per income statement 428 46
The cash flows from the discontinued operations are as follows:
Cash flows from operating activities 198 143
Cash flows from investing activities 1 179 (8)
Cash flows from financing activities (889) (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 105
Goodwill 22
Investment classified as held for sale 30
Inventories 103
Trade and other receivables 80
Deferred tax asset 2
Cash balances 29
Assets of disposal group held for sale 371
Trade and other payables (95)
Other current and non-current liabilities (11)
Total liabilities associated with assets classified as held for sale (106)
Net assets classified as held for sale 265
Per business segment:
Automotive and Logistics 223
Equipment and Handling 42
Total group 265
The September 2013 assets held for sale relate to the net assets of the Ferntree Gully motor dealership in
Australia, the Handling Holland dealership and the Flynt Logistics operations and were sold in the period.
*Restated for the treatment of IFRS 10, IAS 19 and discontinued operations - refer to note 10.
7. Dividends
Ordinary shares
Final dividend No 170 paid on 20 January 2014: 195 cents per share
(2013: No 168 - 150 cents per share) 413 320
Interim dividend No 171 paid on 17 June 2014: 106 cents per share
(2013: No 169 - 96 cents per share) 226 202
639 522
Paid to non-controlling interest 92 86
731 608
Dividends per share (cents) 320 291
- interim (declared May) 106 96
- final (declared November) 214 195
8. Contingent liabilities
Bills, lease and hire-purchase agreements discounted with recourse,
other guarantees and claims 1 720 1 668
Buyback and repurchase commitments not reflected on the statement
of financial position 262 288
The group has given guarantees to the purchaser of the coatings Australian business relating to environmental
claims. The guarantees are for a maximum period of eight years up to July 2015 and are limited to the sales price
received for the business. Freeworld Coatings Limited is responsible for the first AUD5 million of any claim in
terms of the unbundling arrangement.
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.
9. Commitments
Capital expenditure commitments to be incurred: 2 918 2 262
Contracted - Property, plant and equipment 674 718
Contracted - Vehicle Rental Fleet 1 251 1 021
Approved but not yet contracted 993 523
Operating lease commitments 3 154 2 224
Finance lease commitments 1 252 872
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 operations - refer to note 10.
10. 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 September 2012: R5 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 is recognised on the net asset
or liability. Plan administration expenses are recognised as operating expenses. 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
(September 2012: R58 million), net finance cost increased by R39 million (September 2012: R47 million) and the net after
tax impact on headline earnings was a reduction of R83 million (September 2012: R58 million).
In addition, the prior year numbers were further restated to disclose the Australian automotive business as a
discontinued operations. The business was sold effective 31 March 2014.
Summarised consolidated income statement
30 Sept 30 Sept 30 Sept
2013 2013 2013 30 Sept
Previously Discontinued IFRS 10/ 2013
Rm stated operations IAS 19 Restated
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 statement
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
Summarised consolidated statement of financial position
30 Sept 30 Sept
2013 2013 30 Sept
Previously IFRS 10/ 2013
Rm stated IAS 19 Restated
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
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
Condensed consolidated statement of cash flows
30 Sept 30 Sept
2013 2013 30 Sept
Previously IFRS 10/ 2013
Rm stated IAS 19 Restated
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 (1 636) (1 636)
Net investment in vehicle rental fleet (572) (572)
Cash utilised in operations 4 263 (8) 4 255
Realised fair value adjustments on financial instruments (55) 1 (54)
Finance costs and investment income (771) (2) (773)
Taxation paid (837) 16 (821)
Cash outflow from operations 2 600 7 2 607
Dividends paid (including non-controlling interest) (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 (775) (775)
Proceeds on disposal of subsidiaries, investments, intangibles and loans repaid 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 653 7 660
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 33 7 40
Cash and cash equivalents at beginning of period 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 2 836 (141) 2 695
11. Accounting policies
The group adopted the following new and amended Standards and new Interpretations during the current year:
- 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)
- 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’s 2009 - 2011 cycle (May 2012) effective September 2014
- Annual improvements to IFRS’s 2011 - 2013 cycle (Dec 2013) effective September 2014
- Annual improvements to IFRS’s 2010 - 2012 cycle (Dec 2013) effective September 2014
12. Related party transactions
There has been no significant change in related party relationships 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.
13. Audit opinion
These summary consolidated financial statements for the year ended 30 September 2014 have been audited by Deloitte &
Touche, which is attached. The auditor also expressed an unmodified opinion on the annual financial statements from
which these summary consolidated financial statements were derived. A copy of the auditor’s report on the consolidated
financial statements is available for inspection at the company’s registered office, together with the financial
statements identified in the auditor’s reports.
The auditor’s report does not necessarily report on all the information contained in this preliminary report.
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.
14. Preparer of financial statements
These summarised consolidated financial statements have been prepared under the supervision of SY Moodley BCom CA(SA),
Group General Manager: Finance
15. Operating segments (audited)
Fair value adjustments
Revenue Operating profit/(loss) on financial instruments
2013 2013 2013
2014 Rm 2014 Rm 2014 Rm
Rm Restated* Rm Restated* Rm Restated*
Equipment and Handling 30 960 30 682 2 284 2 123 (161) (54)
Automotive & Logistics 31 137 28 806 1 644 1 322 1 4
Corporate 4 10 (98) (132) 4 3
Total group 62 101 59 498 3 830 3 313 (156) (47)
*Restated for the treatment of IFRS 10, IAS 19 and discontinued operations - refer to note 10.
Operating segments (audited)
Operating profit/(loss)
including fair value Net operating assets/
adjustments (liabilities)
2013 2013
2014 Rm 2014 Rm
Rm Restated* Rm Restated*
2 123 2 069 14 845 12 628
1 645 1 326 9 145 9 456
(94) (129) (1 292) (756)
3 674 3 266 22 698 21 328
Salient features
for the year ended 30 September
Audited
2013
2014 Restated*
Financial
Group headline earnings per share (cents) 883 821
Continuing headline earnings per share (cents) 857 780
Dividend per share (cents) 106 291
Continuing operating margin (%) 6.2 5.6
Continuing net asset turn (times) 2.4 2.6
Continuing EBITDA/interest paid (times) 5.5 5.4
Net debt/equity (%) 40.9 47.5
Group return on net operating assets (RONOA) (%) 18.8 18.0
Group return on ordinary shareholders’ funds (%) 11.6 12.2
Net asset value per share including investments at fair value (cents) 7 941 7 266
Number of ordinary shares in issue, including BEE shares (000) 231 292 231 292
Non-financial - continuing operations#
Energy consumption (GJ) 2 953 038 2 779 570
Greenhouse gas emissions (tCO2e) - Scope 1 and 2 273 986 260 422
Water consumption (ML) 785 832
Number of employees 19 616 19 182
LTIFR† 1.23 0.99
Work-related fatalities 3 3
Corporate social investment (R million) 17 17
B-BBEE rating (level)+ 2 2
Closing rate Average rate
Exchange rates (Rand) 2014 2013 2014 2013
United States Dollar 11.30 10.06 10.57 9.28
Euro 14.27 13.62 14.35 12.18
British Sterling 18.32 16.30 17.56 14.48
* Restated for the treatment of IFRS 10, IAS 19 and discontinued operations - refer to note 8.
# Deloitte & Touche have issued an unmodified limited assurance report on the non-financial salient
features included above, in accordance with International Standard 3000 on Assurance Engagements
Other Than Audit or Reviews of Historical Financial Information.
† Lost-time injuries multiplied by 200 000 divided by total hours worked.
+ Audited and verified by Empowerdex.
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, Jaguar Land Rover, 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 75% of just over
19 600 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, FNC Edozien^, AGK Hamilton*, A Landia~, SS Mkhabela, B Ngonyama,
SS Ntsaluba, SB Pfeiffer•, OI Shongwe
Executive: CB Thomson (Chief Executive), PJ Blackbeard, PJ Bulterman, M Laubscher, DM Sewela, 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
Instinctif: Morne Reinders
Tel +27 11 447 3030
E-mail: morne.reinders@instinctif.com
For more information visit www.barloworld.com
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