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Trading Update
Barloworld Limited
(Incorporated in the Republic of South Africa)
(Registration number 1918/000095/06)
(Income Tax Registration number 9000/051/71/5)
(JSE Share code: BAW) and (NSX share code: BWL)
(Ordinary share ISIN: ZAE000026639)
(Preference share code: BAWP)
(Preference share ISIN: ZAE000026647)
(Namibian Stock Exchange share code: BWL)
(“Barloworld” or “the Company”)
TRADING UPDATE
The group’s geographic and industry diversity contributed to a stable overall performance
despite difficult trading conditions in the first quarter of the 2016 financial year.
Equipment and Handling
Equipment Southern Africa has traded below the prior year in the first quarter due to continued
weakness in commodity markets. Reductions in capital expenditure and production cutbacks are
negatively affecting equipment demand from mining companies and contract miners. Trading in
Angola has also slowed due to the declining oil price and currency devaluations. Aftermarket activity
remains resilient, somewhat mitigating the impact of declining machine sales.
The firm order book for southern Africa at the end of December was down on September last year.
While equipment demand is expected to remain muted over the balance of the financial year we
expect to experience ongoing demand for major components used in equipment overhauls as the
life span of machinery is extended beyond the traditional replacement cycle.
In December a major customer in the Democratic Republic of Congo informed their business
partners of a temporary suspension of mining activity which will materially impact our
income from associates in the first half of the financial year.
In Equipment Russia trading in the first quarter is ahead of the prior period due to higher
mining equipment and aftermarket deliveries. Notwithstanding commodity price weakness
and the continuing economic recession the firm order book at the end of December is up on
September as a result of new contract awards. This should support trading levels over the
coming months.
The Spanish economy has continued its recovery and the trading profitability of the Iberian
business in the first quarter was ahead of the prior period. The December firm order book is
in line with September levels and the overall economic outlook remains broadly positive
notwithstanding some uncertainty created by the recent election result.
In the Handling division the agriculture businesses in southern Africa remains under
pressure mainly due to the prevailing drought conditions.
Automotive and Logistics
The Automotive division produced a steady overall result in the first quarter, demonstrating
the resilience of the integrated vehicle usage business model.
Car rental has seen an improved performance through growth in both rental days and rate
per day. Motor Retail has been impacted by declining industry vehicle sales, however used
vehicle and parts revenues have shown continued growth. Avis Fleet is trading slightly
down following the non-renewal of a fleet contract at the end of the prior year.
Logistics has traded in line with the first quarter of last year with improved results in the
freight management and services business.
Working capital and Funding
In line with our expectations, group working capital levels have shown some increase in the
quarter mainly in the automotive and logistics division. Net debt is however expected to
decline over the balance of the financial year as we generate positive cash flows by
continuing to focus on reducing working capital levels in all the businesses.
During the first quarter, the company raised R1 billion in long-term funding primarily to
refinance maturing debt and to improve the maturity profile of group borrowings.
Management appointments
Dominic Sewela, currently Chief Executive of Barloworld Equipment southern Africa, will be
appointed as deputy Chief Executive of Barloworld Limited effective 1 March 2016. Dominic will
also retain his responsibilities as Chief Executive of Barloworld Equipment southern Africa. In
his capacity as deputy Chief Executive of Barloworld Limited Dominic will report to the group
Chief Executive Clive Thomson and become involved in certain broader group responsibilities.
The remaining group executives retain their existing responsibilities and continue to report to
the group Chief Executive, Clive Thomson.
Quinton McGeer, currently General Director of Equipment Russia (Vostochnaya Technica), will
succeed Viktor Salzmann as Chief Executive of Equipment Iberia on 1 October 2016 when Viktor
Salzmann retires from his executive responsibilities after a long and distinguished career with
the company.
Gavin Knight, currently an executive director of Barloworld Equipment southern Africa, will
succeed Quinton McGeer as General Director of Equipment Russia on 1 October 2016. He will
relocate to Novosibirsk, Russia in May 2016 to allow for an effective handover process.
Gerhard Vorster, currently an executive director of Barloworld Equipment southern Africa, will
be appointed as Chief Executive of the Equipment business for the African territories outside of
South Africa on 1 April 2016. His role will include Gavin Knight’s previous responsibilities and
will cover the countries of Angola, Botswana, Malawi, Mozambique, Namibia and Zambia.
Directorate
Dr Alexander Landia, an independent non-executive director, resigned from the Barloworld board
with effect from 31 December 2015 as a result of increased external business commitments.
Mr Gordon Hamilton, having reached retirement age for non-executive directors, retires from the
board and as chairman of the audit committee and member of other sub-committees of the board at
this annual general meeting.
The directors of Barloworld extend their thanks to Mr Hamilton and Dr Landia for their contributions
during their tenure on the board.
Board committees
The following Barloworld Limited board committee appointments were approved by the board
with immediate effect:
Risk and Sustainability Committee B Ngonyama (Independent non-executive director)
D Sewela (Executive Director)
General Purposes committee S Ntsaluba (Independent non-executive director)
I Shongwe (Non-executive director)
Nomination committee I Shongwe (Non-executive director)
Mr Keith Rankin, the Chief Executive of Barloworld Automotive, and Mr Steve Ford, the Chief
Executive of Barloworld Logistics, have also been appointed to the Risk and Sustainability
committee.
I Shongwe steps down as a member of the risk and sustainability committee with immediate
effect.
This financial information on which the trading statement has been based has not been
reviewed or reported on by Barloworld’s auditors.
Sandton Sponsor:
3 February 2016 J.P. Morgan Equities South Africa (Pty) Ltd.
About Barloworld
Barloworld is a distributor of leading international brands providing integrated rental, fleet
management, product support and logistics solutions. The core divisions of the group comprise
Equipment and Handling (earthmoving, power systems, materials handling and agriculture),
Automotive and Logistics (car rental, motor retail, fleet services, used vehicles and disposal
solutions, logistics management and supply chain optimisation). We offer flexible, value adding,
integrated business solutions to our customers backed by leading global brands. The brands we
represent on behalf of our principals include Caterpillar, Hyster, Avis Budget, Audi, BMW, Budget,
Ford, General Motors, Jaguar Land Rover, Mazda, Mercedes-Benz, Toyota, Volkswagen, Challenger,
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 over 20 countries
around the world with 76% of just over 19 700 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, FNO Edozien^, AGK Hamilton*, SS
Mkhabela, B Ngonyama, SS Ntsaluba, SB Pfeiffer•, OI Shongwe
Executive: CB Thomson (Chief Executive), PJ Blackbeard, PJ Bulterman, DM Sewela, DG Wilson
*British •American ^Nigerian
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
Date: 03/02/2016 12:30:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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