Wrap Text
Preliminary audited year-end results for the 12 months to 30 September 2016
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) (JSE ISIN: ZAE000026639)
(Share code: BAWP) (JSE ISIN: ZAE000026647)
(Namibian Stock Exchange share code: BWL)
("Barloworld" or "the company")
Preliminary audited year-end results for the 12 months to 30 September 2016
Salient features
Clive Thomson, CE of Barloworld, said:
"The group's industry and geographic diversity has continued to provide resilience to the overall trading result.
Equipment southern Africa was impacted by a fourth consecutive year of declining capital expenditure in the mining sector,
however our Russian equipment business produced an excellent performance and Spain was profitable despite the uncertainty
created by two inconclusive general election results.
Automotive achieved a record year in a challenging market environment and the recent acquisitions delivered in line
with expectations. Operating profit growth in Logistics was robust as a result of contract awards and expansion into new
business segments.
All our businesses have a clear strategic focus and strong market positions. As a result of positive cash generation
the group's balance sheet is strong and we are well placed to capitalise on organic and acquisitive growth opportunities
as they arise. We have the right leadership in place in all of our businesses and expect 2017 to be another year of solid
progress for the group."
21 November 2016
Highlights
- Revenue up 6% to R66.5 billion
- Operating profit up 4% to R4 135 million
- Profit before non-operating and capital items up 14% to R2 693 million
- Cash generated from operations of R7 827 million
- Headline earnings per share up 3% to 838 cents
- Headline earnings per share (excluding B-BBEE charge) down 9% to 838 cents
- Total dividend per share maintained at 345 cents
Chairman and chief executive's report
Overview
The global economy continues to underperform with added risks to growth arising from the results of the Brexit vote in
the UK and uncertainties created by the recent US election result. The growth outlook for the South African economy
remains muted. Against this background the group produced a solid operating result for the year despite continued weakness
in the mining sector.
Revenue for the year of R66.5 billion was 6% ahead of last year while operating profit grew by 4% to R4.135 million.
Profit before non-operating and capital items was up 14% to R2 693 million, however net profit for the year was negatively
impacted by the significant decrease in income from associates primarily due to the temporary cessation of mining activity by
one of our largest customers in the DRC.
Headline earnings per share (HEPS) of 838 cents showed an increase of 24 cents (3%) over the prior year. If one excludes
the impact of the prior year B-BBEE charge, HEPS declined by 9% compared to the adjusted prior year HEPS of 926 cents,
mainly as a result of the impact of reduced associate earnings.
Cash generated from operations was very strong at R7 827 million (2015: R1 123 million) primarily as a result of
focused working capital management. This resulted in a sharp reduction in net debt levels and a healthy balance sheet
position at year end.
A total dividend for the year of 345 cents per share was declared in respect of this year's earnings (2015: 345 cents).
Operational review
Equipment and Handling
Equipment southern Africa
Revenue for the year of R18.5 billion was R1.8 billion (8.7%) down on last year. The slowdown in mining activity and
the reluctance of mines to incur both replacement and greenfields capital expenditure resulted in mining unit sales
dropping to their lowest level since 2010. While most of our major mining customers have maintained production levels we have
seen selective production curtailment in certain regions, including the iron ore mines in Northern Cape, which had some
impact on aftersales demand.
Operating profit for the year of R1 585 million is R309 million (16%) below last year. The operating margin declined
from 9.3% in 2015 to 8.5% in the current year due to margin pressures and a change in machine sales mix. Restructuring
costs of R30.5 million were incurred following actions taken to reduce the cost base principally in Angola. There has been
positive cash generation of R3.0 billion compared to cash utilisation of R1.7 billion in 2015, due to improved working
capital management and trimming the asset base.
While activity levels in Angola remained steady, the shortage of US dollars in that country has resulted in restrictions
in our ability to transact freely in the local currency and we have taken steps to limit our currency exposures.
Our associate in the Katanga province of the DRC generated a profit of R13 million for the year which was R252 million
below last year. While we showed a profit in the second half of R40 million, which is an improvement on the loss at March
of R27 million, it nonetheless represents a major variance in our earnings for the year. Mining activities at our largest
customer remain suspended following the slope failure in early March and copper processing is now only expected to
recommence in the second half of calendar 2017 once the new plant has been commissioned.
Equipment Russia
Revenue for the year of R4 837 million showed a R1 458 million (43%) increase over the prior year mainly due to
increased mining machine demand into the opencast gold mining segment while total after sales revenue was in line with the
prior year.
Operating profit of R599 million was R202 million up on last year with the operating margin increasing from 11.8% to
12.4%. This was a very good result in challenging market conditions and exceeded our expectations.
Equipment Iberia
Activity levels in Spain remained under pressure as a result of extensive delays in forming a government following two
inconclusive general election results.
Revenue to September of R4.5 billion was R680 million adrift of last year with activity levels in Portugal 25% below
the previous year with reduced export sales to Angola and Mozambique.
Operating profit of R55 million was R16 million (23%) below last year and included restructuring costs of R9.7 million
in Portugal.
Handling
Revenue for the year of R1.5 billion was R0.6 billion (26%) below last year which included Metso, Agriculture Russia
and SEM. The business saw a fall in the Agriculture South Africa business due to prevailing drought conditions.
The operating profit for the year of R25 million was well up on the R6 million earned last year despite the
R12 million restructuring costs incurred in December to lower the cost base.
Post year end we have entered into an agreement to dispose of the assets of our Agriculture and Handling businesses in South Africa
into a joint venture company in which we will retain a 50% stake and the balance will be owned by BayWa AG a German
listed company and a leader in global agriculture. The net assets of these businesses of R746 million have consequently been
classified as held for sale at September 2016.
Automotive and Logistics
Automotive
The Automotive division produced a strong result in very challenging markets. Revenue for the year of R31.4 billion
was R2.7 billion (9.5%) up on last year with all the business segments showing growth.
The operating profit of R1 654 million for the year showed an improvement of R125 million (8.2%) over the previous
year.
Car Rental
Revenue to September of R6.0 billion is R765 million (15%) up on last year. This is driven by a 5.4% growth in rental
revenue per day and a 3.8% increase in rental days. The balance of the increase comes from higher used vehicle sales.
Operating profit for the year of R536 million is R65 million (14%) ahead of last year.
Avis Fleet
Revenue to September of R3.6 billion is R279 million (8.3%) up on last year while operating profit of R560 million is
R12 million adrift of last year. The drop in profit is mainly as a result of the non-renewal of the Government of
Lesotho contract of 1 200 vehicles at the end of the previous financial year which was partly compensated by new contract
awards.
Motor Trading
SA industry vehicles sales for the calendar year to September show a decline of 11% compared to 2015 with new
passenger vehicle sales down by 12%.
Our Motor Trading business experienced a 6.4% decline in new unit sales for the year. Year to date revenue of
R21.8 billion is R1.7 billion (8.3%) up on last year driven by the acquisitions, double digit new vehicle inflation,
stronger used vehicle prices and increased parts activity.
Operating profit to September of R558 million, is R72 million (15%) up on last year.
The acquisition of two Mercedes-Benz dealerships in Mbombela, Mpumalanga and Shelley Beach, KwaZulu-Natal, together
with the acquisition in early May of Salvage Management and Disposals, the largest salvage operator in South Africa, have
now been integrated and are trading in line with expectations.
Logistics
Revenue for the year of R5.8 billion was R1.2 billion (28%) up on last year.
The Supply Chain Management business grew revenue by R1 billion (43%) mainly impacted by additional new contracts and
certain acquisitions. Transport increased revenue by R0.5 billion (21%) also as a result of new contracts and the Aspen
Logistics acquisition from January.
Operating profit to September of R223 million was R64 million (40%) above the prior year. The operating profit of
the Freight Management and Services segment has shown a significant turnaround from the loss of R4 million incurred last
year to a profit of R38 million in the current year, benefiting from the disposals of Logistica Spain and Sea Air
Transport at the end of last year.
Human resources, diversity and sustainable development
Despite our lost-time injury frequency rate continuing to improve year on year, tragically there was one work-related
fatality during the period. An employee was involved in a fatal motor vehicle collision while returning from a
customer's site.
Focus continued on our group sustainability targets, with good progress being made on renewable energy with the 300kW
(peak) solar photovoltaic installation at Equipment's Isando site and others planned.
Barloworld was again ranked in the top 20 overall for B-BBEE on the Codes of Good Practice applicable at the time,
conducted by an independent survey of the Top 100 JSE Listed Companies; and obtained a dti B-BBEE Level 3 rating under the
revised Codes.
During the past year, good progress has been made against our diversity targets with a number of women being appointed
into senior positions as well as improvement in South Africa of demographic representation at senior levels.
Barloworld was again included on the Dow Jones Sustainability Emerging Markets Index and also included in the FTSE/JSE
Responsible Investment Top 30 Index.
Executive leadership appointments
Mr Dominic Sewela, appointed as deputy chief executive of Barloworld Limited on 1 March 2016 as part of a structured
succession plan, was appointed as CEO-designate of the company effective 1 October 2016.
Mr Clive Thomson, who has successfully led the Barloworld group for the past 10 years, will be succeeded as chief
executive of Barloworld Limited by Mr Sewela at the next annual general meeting of the company planned for 8 February 2017.
Mr Thomson will remain employed by the company in an advisory capacity for a short period thereafter to ensure an
effective handover process and seamless leadership transition.
The following senior leadership appointments were also effective 1 October 2016:
- Emmy Leeka succeeded Dominic Sewela as chief executive of Barloworld Equipment southern Africa;
- Quinton McGeer succeeded Viktor Salzmann as chief executive of Barloworld Equipment Iberia following Viktor
Salzmann's retirement from his executive responsibilities;
- Gavin Knight succeeded Quinton McGeer as general director of Vostochnaya Technica, our Equipment business in
Russia; and
- Hilary Wilton (head of risk) and Chris Wierenga (head of strategy and M&A) were appointed to the group executive
committee.
These are all internal appointments of experienced Barloworld executives and the handover process has been seamlessly
managed.
Changes in directorate
Independent non-executive director, Dr Alexander Landia, resigned from the Barloworld board with effect from 31
December 2015 due to other business commitments and Mr Gordon Hamilton, having reached retirement age for non-executive
directors, retired from the board on 3 February 2016. We thank them for their valuable contribution to the board.
Funding
Net debt decreased by R2.7 billion from R10.7 billion at September 2015 to R8 billion at September 2016 due to strong
cash generation particularly in Equipment southern Africa.
Cash generated from operations of R7.8 billion was significantly ahead of the R1.1 billion generated last year driven
by a R2.1 billion decrease in working capital (compared to a R3.4 billion absorption last year) and a reduced investment
in fleet leasing and equipment rental fleet of R0.5 billion which was R1.3 billion lower than the prior year.
The net cash inflow before financing of R3.5 billion for the year showed a R7 billion improvement on 2015.
In June 2016 Moody's Investors Services initiated their rating of Barloworld with a long-term and short-term issuer
Global Scale Rating of Baa3 and P-3 and long-term and short-term issuer National Scale Rating of Aa3.za and P-1.za. Both
ratings come with a stable outlook.
Outlook
The firm order book for Equipment southern Africa of R1.3 billion is slightly up on March but down on the R1.7 billion
book at September 2015. Commodity prices have shown some recovery of late and certain green-shoots are evident in the
mining sector. Aftermarket remains resilient and is expected to show some improvement based on the higher average age of
mining equipment fleets. The need for infrastructure development is expected to underpin construction equipment demand.
The Russian economy has now been in recession for close to two years with expectations that it could show improvement
in 2017. Following the strong invoicing levels in the last quarter, the Equipment Russia firm order book currently
stands at $21 million which is below the September 2015 level of $28 million. The current level of major project tenders
remains strong.
In Spain, the Popular Party has finally formed a minority government to guide the Spanish economy out of the political
deadlock. The machine industry continues to show growth, however, this is concentrated in low-end building and
construction products. The current order book of €26 million remains predominantly in marine Power projects.
The Handling outlook is largely dependent on good rainfall breaking the prevailing drought conditions in southern
Africa. BayWa is a leader in global agriculture and the impending joint venture should generate new opportunities to expand
the business going forward.
Our Car Rental business will continue to benefit from the dual brand strategy and the growing foreign inbound segment.
In this high interest and high vehicle inflation environment focus will be placed on improving rental rates to protect
margins. We further anticipate another strong contribution from used vehicle disposals.
Avis Fleet should be stable due to the annuity based nature of the leasing contracts, however, there are certain
existing longstanding contracts that come up for renewal during the course of 2017.
The outlook for new vehicle sales in South Africa in 2017 remains weak. Consumers are facing the pressures of high
interest rates and continued high new vehicle inflation. Our Motor Trading business will focus on the opportunities
presented in used vehicles by the current economic conditions. In addition the new Salvage Management and Disposal Solutions
business provides a diverse revenue source independent of new vehicle sales.
In Logistics, business development continues to generate a strong pipeline of exciting new growth opportunities with
incremental revenue projected from logistics contracts won in 2016. The growth outlook for all three Logistics segments
is therefore positive going into 2017.
All our businesses have a clear strategic focus and strong market positions. As a result of positive cash generation
the group's balance sheet is strong and we are well placed to capitalise on organic and acquisitive growth opportunities
as they arise. We have the right leadership in place in all of our businesses and expect 2017 to be another year of solid
progress for the group.
DB Ntsebeza CB Thomson
Chairman Chief executive
Group financial review
Revenue for the year increased by R3.8 billion (6.1%) to R66.5 billion with the bulk of the improvement in Automotive
and Logistics which showed increases of R2.7 billion (9.5%) and R1.2 billion (28%) respectively. Revenue in Equipment
Russia was up by 17.5% in dollar terms while Equipment Iberia was down in euro terms. Rand revenues for both regions
benefited from translation gains. In Equipment southern Africa revenue decreased by R1.8 billion (8.7%). This was partially
offset by the benefits of the weaker rand in operations outside South Africa. The weaker rand favourably impacted total
revenue by R2.7 billion.
Earnings before interest, taxation, depreciation and amortisation (EBITDA) was up by 3% to R6 674 million with
depreciation and amortisation up by 2.2%.
Operating profit (excluding the B-BBEE charges) rose by 3.5% to R4 135 million with the operating margin down slightly
to 6.2%. In Equipment southern Africa, operating profit was down by 16.3% with reductions in mining capital expenditure
and production cutbacks negatively affecting both equipment and aftersales demand. Equipment Russia traded well ahead of the
prior year, due to higher mining equipment and aftersales demand. Equipment Iberia operating profit was down on last
year.
Automotive produced a record result with operating profit up 8.2% to R1 654 million. A marginal decline in the
Avis Fleet business was offset by improved profits in Motor Trading and Car Rental.
Logistics generated an operating profit of R223 million which was 40% ahead of the prior year.
The total net negative fair value adjustments on financial instruments of R209 million (2015: R198 million) mainly
relates to the cost of forward points on foreign exchange contracts and translation losses on monetary assets and
liabilities in Equipment southern Africa and Handling. This was off-set by some gains on forward cover contracts in Equipment
southern Africa.
Finance costs increased by R94 million to R1 346 million. This is mainly due to higher interest rates in South Africa.
Profits from non-operating and capital items of R120 million includes profits on sale of the Logistics Supply Chain
software business (R63.4 million), a R15 million profit on sale of the Agriculture Zambia business and a foreign currency
release in respect of an offshore subsidiary. This has been partially off-set by the impairments of goodwill in Avis
Fleet Tanzania and the investment in Energyst.
The taxation charge increased by R1 million to R809 million while the effective taxation rate for the period
(excluding prior year taxation and taxation on non-operating and capital items) was 27.4% (2015: 37.1%). The current year charge
was negatively impacted by local tax relating to forex gains in the local currency accounts. The prior year rate was
negatively impacted by the IAS 12.41 deferred tax charges arising from the depreciation of the rouble in Equipment Russia,
as well as local currency depreciation against the dollar in Angola, Zambia and Mozambique.
Income from associates and joint ventures is significantly down on the prior period reflecting a loss of R25 million
for the year compared to income of R287 million last year, mainly attributable to the decline in profits from the equipment
associates in the DRC and Europe. This swing of R312 million has materially impacted the net profit and earnings
for the year.
Headline earnings per share (HEPS) (excluding the B-BBEE transaction) was down by 9% to 838 cents compared to the
926 cents of last year, mainly as a result of the decrease of 148 cents per share arising from reduced associate earnings.
Basic earnings per share (EPS) of 891 cents is 10.1% higher than last year's comparable of 809 cents.
Cash flow
Cash generated from operations was strong increasing to R7.8 billion from the R1.1 billion generated in 2015. Working
capital decreased by R2.1 billion, mainly in Equipment southern Africa and Equipment Russia. This was significantly down
on the absorption last year of R3.4 billion. Equipment southern Africa produced a reduction in working capital of
R1.7 billion and Equipment Russia a reduction of R0.4 billion.
Cash applied to the investment in property, plant and equipment together with subsidiaries and intangibles of R1 436
million includes net acquisitions in the Automotive and Logistics divisions of R639 million. In addition a further R339
million ($25 million) was invested in Angolan US$ linked bonds as protection against currency devaluation. The total
investment in Angolan US$ linked government bonds at September was $51 million. The net cash inflow before financing
activities for the year of R3 507 million was R6 971 million better than the R3 464 million outflow at September 2015.
Financial position
Total assets employed in the group reduced by R2.1 billion (4.4%) to R46 billion compared to September 2015. The bulk
of the reduction was driven by a reduction in inventories and receivables in Equipment southern Africa and Russia while
the weaker rand added R340 million to the total assets. Assets held for sale comprise mainly the assets of the South
African Handling and Agriculture businesses which are to be sold into a joint venture.
Total interest-bearing debt at 30 September 2016 dropped strongly by R2.1 billion to R11 billion (September 2015:
R13.1 billion) while cash and cash equivalents increased to R3 billion (September 2015: R2.4 billion). Net interest-bearing
debt at 30 September 2016 of R8 billion was R2.7 billion down on September 2015 (R10.7 billion).
Debt
In October 2015, the company settled the R750 million BAW2 bond and in February 2016 the R200 million BAW15 bond
matured and was settled from available facilities utilising its available banking facilities. In December 2015 the company
issued an unsecured seven year bond (BAW22) totalling R253 million, and in January 2016 the company issued a R500 million
unlisted note (BAW23U), the proceeds of which were used to redeem the unlisted BAW20U. In September 2016, the company
issued a three-year bond (BAW24) totalling R501 million. The proceeds of this was used to settle the R614 million BAW 10
which matured on 30 September 2016. These bonds were issued under our existing South African Domestic Medium Term Note
programme.
During the 2016 financial year the group finalised a new three-year revolving credit facility for R700 million and an
ever-green facility for R650 million that will continue indefinitely subject to an 18-month notice period to exit the
facility.
South African short-term debt includes commercial paper totalling R807 million (September 2015: R861 million).
While this market has remained active, liquidity and spreads have been negatively impacted by interest rate uncertainty.
We expect to maintain our participation in this market to the extent permitted by overall liquidity in the market.
Cash and cash equivalents at September of R3.0 billion included $37.5 million (R516 million) held in local currency in
Angola of which $15.8 million is held in a captive account to support foreign currency allocations and $16.2 million is
required to fund local operating expenses.
At September the group had unutilised borrowing facilities of R9.6 billion, of which R7.2 billion was committed. The
group's ratio of long-term to short-term debt improved to 76%:24% (September 2015: 68%:32%).
Moody's Investors Services assigned a long-term and short-term issuer Global Scale Rating of Baa3 and P-3 and
long-term and short-term issuer National Scale Rating of Aa3.za and P-1.za in June 2016. The outlook on the ratings is stable.
The new credit rating implies that any new bonds issued would now qualify as level 2A High Quality Liquid Assets (HQLAs)
which should make Barloworld paper more attractive to banks, which are required to hold a certain level of HQLAs to meet
their liquidity coverage ratio targets.
The group total debt-to-equity ratio at 30 September 2016 was 56% (September 2015: 67%), while group net debt to
equity improved to 41% (September 2015: 55%).
Gearing in the three segments are as follows:
Group
Car total Group
Debt to equity (%) Trading Leasing Rental debt net debt
Target range 30 - 50 600 - 800 200 - 300
Ratio at 30 September 2016 29 720 216 56 41
Ratio at 30 September 2015 43 688 211 67 55
Accounting policies
The annual financial statements have been prepared in accordance with International Financial Reporting Standards
(IFRS) as issued by the International Accounting Standards Board (IASB). The basis is consistent with the prior year
except for the reclassification of the interest-bearing floor plan facilities provided to motor retail dealerships by the
vehicle manufacturers to acquire inventories. The change in disclosure of the interest-bearing floor plan from borrowings
to payables reflects the nature of the transactions and is in line with current industry disclosures.
Barloworld's results for the year ended 30 September 2015 were restated to reflect changes in disclosure of the
interest-bearing floor plan facilities.
Dividend
Dividends totalling 345 cents per share were declared in respect of this year's earnings (2015: 345 cents). All
issued shares are entitled to receive dividends. The dividends declared this year are covered 2.4 times by headline earnings
(2015: 2.6 times).
Going forward
The group will continue to work on improving margins while containing its cost base. This is particularly relevant in
our Equipment businesses in southern Africa and Iberia which are generating returns below target. The group will further
continue to focus on generating positive free cashflow in 2017 and trimming the total asset base to improve returns. We
will also proactively take steps for the early refinancing of debt that is maturing within the next 18 months.
DG Wilson
Finance director
Group financial review continued
Operational reviews
Equipment and Handling
Revenue Operating profit/(loss) Net operating assets
Year ended Year ended
30 September 30 September 30 September
2016 2015 2016 2015 2016 2015
Rm Rm Rm Rm Rm Rm
Equipment 27 857 27 479 2 239 2 362 15 642 18 681
- Southern Africa 18 547 20 307 1 585 1 894 10 546 12 761
- Europe 4 473 3 793 55 71 2 694 2 913
- Russia 4 837 3 379 599 397 2 402 3 007
Handling 1 505 2 027 25 6 910 1 125
29 362 29 506 2 264 2 368 16 552 19 806
Share of associate (loss)/income (22) 294
Equipment southern Africa results were impacted by the slowdown in mining and volatility of commodity prices.
Revenue declined 8.7%, with operating profits of R1 585 million down 16.3% and an operating margin of 8.5% (2015: 9.3%).
Despite the slowdown in the mining sector, firm back orders held up at R1.3 billion. Again, the robustness of the
business model was evident, with aftersales contributing 56% to total revenue, up from 50% last year. The number of used
machine units sold was 8% up on last year. Cash generation for the year of R3.0 billion was a significant improvement from
the cash utilisation of R1.7 billion in 2015; this was due to an improvement in inventory turns and receivables
collections.
Russia produced a strong result despite continued contraction in Russian economy and machine industry. Operating
profit of R599 million (2015: R397 million) for the year was supported by mining equipment deliveries predominantly to
gold mining customers, resilient aftermarket performance and tight cost control. Significant inroads were made into reducing
working capital and realising aged inventories. Management is observing an increase in tender activity for both existing
and greenfield mining operations, with a number of major projects currently underway.
Iberia continued to operate in a market which saw slowing machine industry growth with the light construction sector
continuing to show better growth as compared to the heavy construction and mining sectors. Activity levels were affected
by economic and political uncertainty and the order book ended the year lower than the prior year. The business
delivered an operating profit of R55 million which included restructuring costs of R9.7 million, mainly in the Portuguese
operations.
In Handling severe drought and the slowdown in the mining sector and slow SA economy continued to impact revenue in
southern Africa and necessitated a restructuring of the SA business. Overall operating profit of R25 million was well up
on the R6 million earned last year following the disposal of the loss-making Agriculture Russia business.
Automotive and Logistics
Revenue Operating profit/(loss) Net operating assets
Year ended Year ended
30 September 30 September 30 September
2016 2015 2016 2015 2016 2015
Rm Rm Rm Rm Rm Rm
Automotive 31 427 28 704 1 654 1 529 8 686 8 047
- Car Rental 5 967 5 202 536 471 2 534 1 994
- Avis Fleet 3 641 3 362 560 572 3 786 3 785
- Motor Trading 21 819 20 140 558 486 2 366 2 268
Logistics 5 756 4 509 223 159 2 472 2 403
- Southern Africa 5 527 3 980 226 186 2 348 2 241
- Europe and Middle East 229 529 (3) (27) 124 162
37 183 33 213 1 877 1 688 11 158 10 450
Share of associate loss (4) (7)
The Automotive division delivered another record result, continuing to prove resilient in challenging markets. The
division generated strong operating cash flows and has continued to reinvest into profitable growth opportunities.
Divisional operating profit improved by 8.2% off revenue growth of 9.5%, while achieving an overall operating margin
of 5.3% (2015: 5.3%).
Car Rental delivered an excellent result, further improving operating profit by 14% off a revenue growth of 14.7% and
achieving an operating margin of 9.0% (2015: 9.1%). The business grew rental day volumes, increased revenue per rental day,
successfully managed fleet utilisation at 75% and maintained market leadership in a competitive environment. Avis Car
Sales continued to earn good returns on the sale of ex-rental vehicles.
Avis Fleet produced a slightly lower result, with operating profit declining by 2.1%. The financed fleet declined by
2.4% mainly due to the non-renewal of the Lesotho government contract, however, the business continues to have high-level
customer retention. Reduced fleet terminations negatively impacted the overall used vehicle profit contribution in this
business.
The Motor Trading operations delivered a good result given the tough trading conditions and declining new vehicle
market. Operating profit increased by 15% off a revenue growth of 8.3%, improving overall operating margin to 2.6% (2015:
2.4%). New vehicle sales volumes declined by 6.4% against a total market decline of 9.5% during the financial year under
review. The overall result was supported by an improved used vehicle and aftersales performance. The acquisitions of two
Mercedes-Benz dealerships and a majority stake in Salvage Management and Disposal contributed to the result.
Logistics delivered a pleasing result with revenue up 28% and operating profit up 40% on last year driven by the
full year financial impact of new contracts and the Smartmatta acquisition, growth in Transport volumes, favourable trading
on key Supply Chain Management contracts, record trading within the South Africa freight forwarding business and the
favourable impact from the disposal of the loss making SAT Sea Air and Logistics Spain. Operating margins increased
to 3.9% (2015: 3.5%). The acquisitions of KLL group and a 51% interest in Aspen Logistics effective 1 January 2016
provide multi-party, multi-temperature warehousing and distribution capabilities.
Corporate
Revenue Operating profit/(loss)* Net operating assets/ (liabilities)
Year ended Year ended
30 September 30 September 30 September
2016 2015 2016 2015 2016 2015
Rm Rm Rm Rm Rm Rm
Southern Africa 2 1 48 17 578 480
Europe (54) (78) (2 908) (1 979)
2 1 (6) (61) (2 330) (1 499)
Share of associate income 1
* Excluding B-BBEE charge of R251 million in 2015.
Corporate Office primarily comprises the operations of the group headquarters and treasury in Johannesburg, the treasury in
Maidenhead (United Kingdom) and the captive insurance company.
Southern Africa has shown a higher operating profit compared to the previous comparative period as a result of lower
charges and accruals for long-term incentives and reduced operating costs. In Europe the lower operating loss is due
mainly to lower operating costs and lower insurance claims in BIL the captive insurance company.
The UK pension scheme deficit increased from R1.9 billion (£93 million) to R2.8 billion (£161 million) primarily as a result
of a 1.5% reduction in the AA-Corporate bond yield which significantly impacted the future pension liability. This reduction
in the yield resulted from market moves which were further adversely impacted by the Brexit vote in the year.
Dividend declaration
Ordinary dividend number 176
Notice is hereby given that final dividend number 176 of 230 cents (gross) per ordinary share in respect of the year
ended 30 September 2016 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);
- Barloworld has 212 692 583 ordinary shares in issue;
- The Gross local dividend amount is 230 cents per ordinary share;
- The net dividend amount is 195.5 cents per share.
In compliance with the requirements of Strate and the JSE Limited, the following dates are applicable:
- Last day to trade cum dividend Tuesday, 10 January 2017
- Shares trade ex-dividend Wednesday, 11 January 2017
- Record date Friday, 13 January 2017
- Payment date Monday, 16 January 2017
Share certificates may not be dematerialised or rematerialised between Wednesday, 11 January 2017 and Friday,
13 January 2017, both days inclusive.
On behalf of the board
LP Manaka
Group company secretary
Directors
Non-executive: DB Ntsebeza (Chairman), NP Dongwana, FNO Edozien^, SS Mkhabela, B Ngonyama, SS Ntsaluba, SB Pfeiffer•,
OI Shongwe
Executive: CB Thomson (Chief executive), PJ Blackbeard, PJ Bulterman, DM Sewela, DG Wilson
^Nigerian •American
Summarised consolidated income statement
for the year ended 30 September
Audited
Note 2016 2015 %
Rm Rm change
Revenue 66 547 62 720 6
Operating profit before items listed below (EBITDA) 6 674 6 479
Depreciation (2 426) (2 355)
Amortisation of intangible assets (113) (129)
Operating profit 4 135 3 995 4
B-BBEE charge (251)
Operating profit including B-BBEE charge 4 135 3 744 10
Fair value adjustments on financial instruments (209) (198)
Finance costs (1 346) (1 252)
Income from investments 113 67
Profit before non-operating and capital items 2 693 2 361 14
Non-operating and capital items 3 120 (6)
Profit before taxation 2 813 2 355
Taxation (809) (808)
Profit after taxation 2 004 1 547 30
(Loss)/income from associates and joint ventures (25) 287
Profit for the year 1 979 1 834
Net profit attributable to:
Owners of Barloworld Limited 1 883 1 713 10
Non-controlling interest in subsidiaries 96 121
1 979 1 834
Earnings per share (cents)
- basic 890.5 808.7
- diluted 888.2 806.1
Summarised consolidated statement of comprehensive income
for the year ended 30 September
Audited
2016 2015
Rm Rm
Profit for the year 1 979 1 834
Items that may be reclassified subsequently to profit or loss: (550) 1 336
Exchange (loss)/gains on translation of foreign operations (377) 1 454
Translation reserves realised on disposal of foreign joint
venture and subsidiaries (83) (130)
(Loss)/gain on cash flow hedges (121) 16
Deferred taxation on cash flow hedges 31 (4)
Items that will not be reclassified to profit or loss: (1 134) (46)
Actuarial losses on post-retirement benefit obligations (1 343) (57)
Taxation effect 209 11
Other comprehensive (loss)/income for the year, net of taxation (1 684) 1 290
Total comprehensive income for the year 295 3 124
Total comprehensive income attributable to:
Owners of Barloworld Limited 199 3 003
Non-controlling interest in subsidiaries 96 121
295 3 124
Summarised consolidated statement of financial position
at 30 September
Audited
Restated
Note 2016 2015
Rm Rm
ASSETS
Non-current assets 20 179 19 906
Property, plant and equipment 13 806 14 380
Goodwill 2 015 1 740
Intangible assets 1 713 1 500
Investment in associates and joint ventures 923 923
Finance lease receivables 147 142
Long-term financial assets 448 438
Deferred taxation assets 1 127 783
Current assets 25 015 28 052
Vehicle rental fleet 2 789 2 488
Inventories 10 317 13 767
Trade and other receivables 8 826 9 331
Taxation 55 94
Cash and cash equivalents 3 028 2 372
Assets classified as held for sale 6 828 197
Total assets 46 022 48 155
EQUITY AND LIABILITIES
Capital and reserves
Share capital and premium 441 282
Other reserves 5 134 5 793
Retained income 13 367 13 351
Interest of shareholders of Barloworld Limited 18 942 19 426
Non-controlling interest 737 616
Interest of all shareholders 19 679 20 042
Non-current liabilities 12 446 12 078
Interest-bearing 8 379 9 074
Deferred taxation liabilities 703 571
Provisions 111 139
Other non-current liabilities 3 253 2 294
Current liabilities 13 830 15 992
Trade and other payables 10 054 10 832
Provisions 931 1 058
Taxation 180 52
Amounts due to bankers and short-term loans 2 665 4 050
Liabilities directly associated with assets classified
as held for sale 6 67 43
Total equity and liabilities 46 022 48 155
Summarised consolidated statement of changes in equity
at 30 September
Attribu-
table
to
Share Barloworld Interest
capital Limited Non- of all
and Other Retained share- controlling share-
premium reserves income holders interest holders
Rm Rm Rm Rm Rm Rm
Balance at 1 October 2014 316 4 517 12 049 16 882 604 17 486
Total comprehensive income for the year 1 336 1 667 3 003 121 3 124
Transactions with owners, recorded
directly in equity
Other reserve movements (60) 136 76 76
B-BBEE IFRS 2 198 198 198
Dividends (699) (699) (109) (808)
Share buy-back (34) (34) (34)
Balance at 30 September 2015 282 5 793 13 351 19 426 616 20 042
Total comprehensive income for the year (550) 749 199 96 295
Transactions with owners, recorded
directly in equity
Other reserve movements (109) (109) (109)
Acquisition of subsidiary 96 96
Other changes in minority shareholders'
interest and minority loans (55) (55)
Dividends (733) (733) (16) (749)
Share buy-back during the year (127) (127) (127)
Share issue during the year 286 286 286
Balance at 30 September 2016 441 5 134 13 367 18 942 737 19 679
Summarised consolidated statement of cash flows
for the year ended 30 September
Audited
Restated
Note 2016 2015
Rm Rm
Cash flows from operating activities
Operating cash flows before movements in working capital 7 161 7 094
Movement in working capital 2 119 (3 370)
Cash generated from operations before investment in
leasing and rental fleets 9 280 3 724
Fleet leasing and equipment rental fleet (506) (1 847)
Additions (2 580) (4 029)
Proceeds on disposal 2 074 2 182
Vehicles rental fleet (947) (754)
Additions (3 798) (3 276)
Proceeds on disposal 2 851 2 522
Cash generated from operations 7 827 1 123
Finance costs (1 346) (1 252)
Realised fair value adjustments on financial instruments (105) (210)
Dividends received from investments, associates and joint ventures 31 218
Interest received 113 67
Taxation paid (805) (770)
Cash inflow/(outflow) from operations 5 715 (824)
Dividends paid (including non-controlling interest) (772) (814)
Cash retained from/(applied to) operating activities 4 943 (1 638)
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of subsidiaries, investments and intangibles 4 (1 057) (641)
Proceeds on disposal of subsidiaries, investments and intangibles 5 258 61
Movement investment in leasing receivables 9 (128)
Acquisition of other property, plant and equipment (980) (1 363)
Replacement capital expenditure (459) (690)
Expansion capital expenditure (521) (673)
Proceeds on disposal of property, plant and equipment 334 245
Net cash used in investing activities (1 436) (1 826)
Net cash inflow/(outflow) before financing activities 3 507 (3 464)
CASH FLOWS FROM FINANCING ACTIVITIES
Shares repurchased for equity-settled share-based payment (95) (22)
Share buy-back (162)
Share issue 286
Purchase of non-controlling interest (142) (6)
Non-controlling interest loan and equity movements 24
Proceeds from long-term borrowings 2 500 3 921
Repayment of long-term borrowings (3 311) (1 971)
Movement in short-term interest-bearing liabilities (1 853) (390)
Net cash (used in)/from financing activities (2 753) 1 532
Net increase/(decrease) in cash and cash equivalents 754 (1 932)
Cash and cash equivalents at beginning of year 2 372 4 162
Effect of foreign exchange rate movement on cash balance (112) 156
Effect of cash balances classified as held for sale 14 (14)
Cash and cash equivalents at end of year 3 028 2 372
Cash balances not available for use due to reserving restrictions* 580 337
* Includes cash balances held in local currency in Angola.
Summarised notes to the consolidated financial statements
for the year ended 30 September
1. Basis of preparation
The summarised 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 the summarised
financial statements. The Listings Requirements require preliminary reports to contain as a minimum the information
required by IAS 34 Interim Financial Reporting and to be prepared in accordance with the SAICA Financial Reporting
Guides as issued by the Accounting Practices Committee and the Financial Pronouncements as issued by the Financial
Reporting Standards Council and with the framework concepts and the measurements and recognition requirements of the
International Financial Reporting Standards. The accounting policies applied in the preparation of the summarised
consolidated financial statements are derived in terms of International Financial Reporting Standards and are
consistent with those accounting policies applied in the preparation of the previous consolidated financial statements,
except for the restatement as detailed in note 11. This announcement is a summary of the complete set of financial
statements available for inspection at our registered office.
This preliminary report and the complete set of the consolidated financial statements were prepared under the
supervision of SY Moodley (group general manager: finance) B.Com CA(SA), ACMA.
Audited
2016 2015
Rm Rm
2. Reconciliation of net profit to headline earnings
Net profit attributable to Barloworld shareholders 1 883 1 713
Adjusted for the following:
(Profit)/loss on disposal of subsidiaries and investments (IFRS 10) (168) 4
Profit on disposal of property and other assets (IAS 16) (10) (35)
Impairment of goodwill (IFRS 3) 15 33
Impairment/(reversal) of investments in associates and joint ventures (IAS 36) 37 (2)
Impairment of plant and equipment (IAS 16) and intangibles (IAS 38) and other assets 6 6
Profit on sale of plant and equipment excluding rental assets (IAS 16) (1) (10)
Rate change of amounts excluded from headline earnings 13
Taxation on profit of disposal of subsidiaries 10
Taxation benefit on impairment of plant and equipment (IAS 16) and intangible assets (IAS 38) 1
Headline earnings 1 772 1 724
Headline earnings - excluding B-BBEE charge 1 772 1 960
Weighted average number of ordinary shares in issue during the year (000)
- basic 211 425 211 843
- diluted 211 973 212 537
Headline earnings per share (cents)
- basic 838.1 813.8
- diluted 836.0 811.1
Headline earnings per share (cents) - excluding B-BBEE charge
- basic 838.1 925.5
- diluted 836.0 922.3
3. Non-operating and capital items
Profit/(loss) on acquisitions and disposal of investments and subsidiaries 168 (4)
Impairment of goodwill (15) (33)
(Impairment)/reversal of investments (37) 2
Profit on disposal of properties and other assets 10 35
Impairment of property, plant and equipment, intangibles and other assets (6) (6)
Gross non-operating and capital items 120 (6)
Rate change of amounts excluded from headline earnings (13)
Taxation charge on non-operating and capital profit (10) (1)
Net non-operating and capital items 110 (20)
4. Acquisition of subsidiaries, investments and intangibles
Inventories acquired (154) (21)
Receivables acquired (183) (41)
Payables, taxation and deferred taxation acquired 457 61
Borrowings net of cash (34) 62
Property, plant and equipment, non-current assets, goodwill and non-controlling interest (239) (97)
Total net assets acquired (153) (36)
Goodwill arising on acquisitions (290) (92)
Intangibles arising on acquisition in terms of IFRS 3 Business Combinations (196) (34)
Total purchase consideration (639) (162)
Deemed disposal of associate at fair value on obtaining control 21 20
Net cash cost of subsidiaries acquired (618) (142)
Bank balances and cash in subsidiaries acquired 142 6
Investment and intangible assets acquired (581) (505)
Cash amounts paid to acquire subsidiaries, investments and intangibles (1 057) (641)
During the year the group acquired various businesses of which none was
individually material.
5. Proceeds on disposal of subsidiaries, investments and intangibles
Inventories disposed 39 147
Receivables disposed 22 71
Payables, taxation and deferred taxation balances disposed and settled (46) (55)
Borrowings net of cash 9 (1)
Property, plant and equipment, non-current assets, goodwill and intangibles 146 16
Net assets disposed 170 179
Receivable from subsidiary disposed (22)
Less: Non-cash translation reserves realised on disposal of foreign subsidiaries 1 (127)
Profit on disposal 117 10
Net cash proceeds on disposal of subsidiaries 266 62
Bank balances and cash in subsidiaries disposed (9) (2)
Proceeds on disposal of investments and intangibles 1 1
Cash proceeds on disposal of subsidiaries, investments and intangibles 258 61
The net cash proceeds on disposal of subsidiaries includes the disposal of Barloworld Supply Chain Software for
R176.5 million and the proceeds from the sale of the assets of the Agriculture Zambia business into a joint venture
company with BayWa AG.
Audited
2016 2015
Rm Rm
6. Assets classified as held for sale
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 152 5
Goodwill 29
Intangibles 2 97
Inventories 650 32
Trade and other receivables 24 20
Cash balances 14
Assets classified as held for sale 828 197
Trade and other payables (67) (42)
Provisions (1)
Total liabilities associated with assets classified as held for sale (67) (43)
Net assets classified as held for sale 761 154
Per business segment:
Handling 746 73
Logistics 15 81
Total group 761 154
The majority of the assets held for sale relate to the net assets of the Handling South Africa and Agriculture
South Africa operations.
Audited
2016 2015
Rm Rm
7. Financial instruments
Carrying value of financial instruments by class:
Financial assets:
Trade receivables
- Industry 5 654 6 136
- Government 423 419
- Consumers 540 644
Other loans and receivables and cash balances 4 899 3 823
Finance lease receivables 379 400
Derivatives (including items designated as effective hedging instruments)
- Forward exchange contracts 2 136
Other financial assets at fair value 33 50
Other financial assets at fair value 11 930 11 609
Financial liabilities:
Trade payables
- Principals 2 603 2 903
- Other suppliers 5 684 6 124
Other non-interest-bearing payables 369 352
Derivatives (including items designated as effective hedging instruments)
- Forward exchange contracts 46 20
Interest-bearing debt measured at amortised cost 10 085 11 961
Total carrying value of financial liabilities 18 787 21 360
Fair value measurements recognised in the statement of financial position
Level 1 measurements are derived from quoted prices in active markets. Level 2 and level 3 measurements are
determined using discounted cash flows.
2016
Level 1 Level 2 Level 3 Total
Financial assets at fair value through profit or loss
Financial assets designated at fair value through profit or loss 28 28
Available-for-sale financial assets
Shares 5 5
Derivative assets designated as effective hedging instruments 2 2
Total 2 33 35
Financial liabilities at fair value through profit or loss
Financial liabilities designated at fair value through profit or loss 2 2
Derivatives 91 91
Total 93 93
2015
Level 1 Level 2 Level 3 Total
Financial assets at fair value through profit or loss
Financial assets designated at fair value through profit or loss 59 45 104
Available-for-sale financial assets
Shares 5 5
Derivative assets designated as effective hedging instruments 77 77
Total 136 50 186
Financial liabilities at fair value through profit or loss
Financial liabilities designated at fair value through profit or loss 1
Derivatives 20 13
Total 20 15
Audited
2016 2015
Rm Rm
8. Dividends
Ordinary shares
Final dividend No 174 paid on 18 January 2016: 230 cents per share
(2015: No 172 - 214 cents per share) 488 456
Interim dividend No 175 paid on 13 June 2016: 115 cents per share
(2015: No 173 - 115 cents per share) 245 243
733 699
Paid to non-controlling interest 16 109
749 808
Dividends per share (cents) 345 345
- interim (declared May) 115 115
- final (declared November) 230 230
9. Contingent liabilities
Performance guarantees given to customers, other guarantees and claims 1 017 1 343
Buy-back and repurchase commitments not reflected on the statement of financial position 98 62
The group has received a provisional statement of objection from the Dutch competition
authorities in respect of a subsidiary disposed of in 2013 setting out their provisional
findings on an industry wide investigation for the period ending 2010. At this stage the
outcome of these proceedings cannot be predicted with any certainty. Management are,
however, giving the matter their full attention and are, in conjunction with
legal advisors, drafting a written response to the objection.
10. Commitments
Capital expenditure commitments to be incurred: 2 231 2 112
Contracted - Property, plant and equipment 392 406
Contracted - Vehicle rental fleet 1 196 1 354
Approved but not yet contracted 643 352
Operating lease commitments 3 316 3 187
Finance lease commitments 1 243 1 451
Capital expenditure will be financed by funds generated by the business, existing cash resources and borrowing
facilities available to the group.
11. Changes in comparatives
Floorplan
Motor Trading has a number of floorplan facilities which are arranged by the vehicle manufacturers to finance
dealer inventory purchases. These short-term credit lines are initially interest free and only become interest
bearing after a certain specified period. During the current year the group reclassified the interest-bearing
floorplan liability from Amounts due to bankers and short-term loans to Trade and other payables. This treatment
is in line with the disclosure of other automotive companies.
The impact of the change in accounting policy on the comparative amounts is as follows:
2015
Previously
stated Restatement Restated
Rm Rm Rm
Consolidated statement of financial position
Amounts due to bankers and short-term loans 4 351 (301) 4 050
Trade and other payables 10 531 301 10 832
Current liabilities 14 882 14 882
Consolidated statement of cash flows
Cash flows from operating activities
Increase in working capital (3 429) 59 (3 370)
Cash (utilised in)/retained from operating activities (1 697) 59 (1 638)
Cash flows from financing activities
(Decrease)/increase in short-term interest-bearing liabilities (331) (59) (390)
Net cash from financing activities 1 591 (59) 1 532
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
Independent auditor's report on summarised financial statements
To the shareholders of Barloworld Limited
The summarised consolidated financial statements of Barloworld Limited, contained in the accompanying preliminary
report, which comprise the summarised consolidated statement of financial position as at 30 September 2016, the
summarised consolidated income statement, statement of comprehensive income, changes in equity and cash flows for
the year then ended, and related notes, are derived from the audited consolidated financial statements of Barloworld
Limited for the year ended 30 September 2016. We expressed an unmodified audit opinion on those consolidated
financial statements in our report dated 18 November 2016. Our auditors' report on the audited consolidated
financial statements contained an Other Matter paragraph: Other reports required by the Companies Act (refer below).
The summarised consolidated financial statements do not contain all the disclosures required by International
Financial Reporting Standards and the requirements of the Companies Act of South Africa as applicable to annual
financial statements. Reading the summarised consolidated financial statements, therefore, is not a substitute for
reading the audited consolidated financial statements of Barloworld Limited.
Directors' responsibility for the summarised consolidated financial statements
The directors are responsible for the preparation of the summarised consolidated financial statements in accordance
with the requirements of the JSE Limited Listings Requirements for preliminary reports, and the requirements of the
Companies Act of South Africa as applicable to summarised financial statements, and for such internal control as
the directors determine is necessary to enable the preparation of summarised consolidated financial statements that
are free from material misstatement, whether due to fraud or error.
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), the SAICA
Financial Reporting Guides as issued by the Accounting Practices Committee and Financial Pronouncements as issued
by the Financial Reporting Standards Council, and to also, as a minimum, contain the information required by IAS 34,
Interim Financial Reporting.
Auditors' responsibility
Our responsibility is to express an opinion on the summarised consolidated financial statements based on our
procedures, which were conducted in accordance with International Standard on Auditing (ISA) 810, Engagements to
Report on Summarised Financial Statements.
Opinion
In our opinion, the summarised consolidated financial statements derived from the audited consolidated financial
statements of Barloworld Limited for the year ended 30 September 2016 are consistent, in all material respects,
with those consolidated financial statements, in accordance with the requirements of the JSE Limited Listings
Requirements for preliminary reports set out in note 1, and the requirements of the Companies Act of South Africa
as applicable to summarised financial statements.
Other reports required by the Companies Act
The Other reports required by the Companies Act paragraph in our audit report dated 18 November 2016 states that
as part of our audit of the consolidated financial statements for the year ended 30 September 2016, we have read
the directors' report, the audit committee's report and the company secretary's certificate for the purpose of
identifying whether there are material inconsistencies between these reports and the audited consolidated financial
statements. These reports are the responsibility of the respective preparers. The paragraph states that, based on
reading these reports, we have not identified material inconsistencies between these reports and the audited
consolidated financial statements. The paragraph furthermore states that we have not audited these reports and
accordingly do not express an opinion on these reports. The paragraph does not have an effect on the summarised
consolidated financial statements or our opinion thereon.
Other matter
We have not audited future financial performance and expectations by management included in the accompanying
summarised consolidated financial statements and accordingly do not express any opinion thereon.
Deloitte & Touche
Registered auditors
Per Bongisipho Nyembe
Partner
18 November 2016
Johannesburg, South Africa
National executive: *LL Bam Chief Executive Officer, *TMM Jordan Deputy Chief Executive Officer,
*MJ Jarvis Chief Operating Officer, *GM Pinnock Audit, *N Singh Risk Advisory, *NB Kader Tax,
TP Pillay Consulting, S Gwala BPaaS, *K Black Clients & Industries, *JK Mazzocco Talent & Transformation,
*MJ Comber Reputation & Risk, *TJ Brown Chairman of the Board
*Partner and Registered Auditor
A full list of partners and directors is available on request.
Associate of Deloitte Africa, a Member of Deloitte Touche Tohmatsu Limited
14. Events after the reporting period
On 17 November 2016 Barloworld signed an agreement for the sale of the assets of its Agriculture and Handling
businesses in South Africa to a new operating company. The new operating entity will be held 50%:50% by
Barloworld and BayWa AG, a German listed company. The closing of this transaction is contingent upon the
fulfilment of the conditions precedent including approvals from the competition commission and principals,
which we anticipate will be in place by the end of February 2017.
15. Operating segments (audited)
Fair value adjustments
Revenue Operating profit/ (loss) on financial instruments
Year ended Year ended Year ended
30 September 30 September 30 September
2016 2015 2016 2015 2016 2015
Rm Rm Rm Rm Rm Rm
Equipment and Handling 29 362 29 506 2 264 2 368 (201) (210)
Automotive and Logistics 37 183 33 213 1 877 1 688 (7) (4)
Corporate 2 1 (6) (61) (1) 16
Total group 66 547 62 720 4 135 3 995 (209) (198)
Operating profit/(loss) Net operating
including fair value adjustments assets/(liabilities)
Year ended
30 September 30 September
2016 2015 2016 2015
Rm Rm Rm Rm
Equipment and Handling 2 064 2 158 16 552 19 806
Automotive and Logistics 1 870 1 684 11 158 10 450
Corporate (8) (45) (2 330) (1 499)
Total group 3 926 3 797 25 380 28 757
Salient features
Audited
2016 2015
Financial
Group headline earnings per share (cents) 838 814
Headline earnings per share (cents) - excluding B-BBEE charge 838 926
Dividend per share (cents) 345 345
Operating margin (%) - excluding B-BBEE charge 6.2 6.4
Net asset turn (times) 2.1 2.1
EBITDA/interest paid (times) 5.0 5.2
Net debt/equity (%) 40.7 55.1
Group return on net operating assets (RONOA) (%) 15.9 17.0
Group return on ordinary shareholders' funds (%) 9.2 10.9
Net asset value per share including investments at fair value (cents) 8 997 9 157
Number of ordinary shares in issue, including B-BBEE shares (000) 212 693 226 728
Non-financial#
Non-renewable energy consumption (GJ)* 3 117 091 2 925 449
Greenhouse gas emissions (tCO2e)*@ 272 961 257 192
Water withdrawals (municipal sources) (ML) 788 745
Number of employees 20 786 19 745
Lost-time injury frequency rate (LTIFR)† 0.83 1.11
Work-related fatalities 1 0
Corporate social investment (R million) 17 17
dti^ B-BBEE rating (level)+ 3 2
# Deloitte & Touche have issued an unmodified limited assurance report on the non-financial salient
features included above, in accordance with International Standard 3000 (Revised) on Assurance
Engagements Other Than Audits or Reviews of Historical Financial Information.
* Based on updated energy (GJ) and emission (tCO2e) conversion factors.
@ 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. 2016 rating based on the revised Codes of Good Practice.
Closing rate Average rate
Exchange rates (rand) 2016 2015 2016 2015
United States dollar 13.75 13.86 14.75 11.98
Euro 15.45 15.43 16.32 13.73
British sterling 17.86 20.94 20.99 18.52
Exchange rates used:
Balance sheet - closing rate (rand)
Income statement and cash flow statement - average rate (rand)
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,
innovative 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, 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 diversity and inclusion. The
company was founded in 1902 and currently has operations in over 20 countries around the world with 78% of over 20 000
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^, SS Mkhabela, B Ngonyama, SS Ntsaluba, SB Pfeiffer•,
OI Shongwe
Executive: CB Thomson (Chief executive), PJ Blackbeard, PJ Bulterman, DM Sewela, DG Wilson
^Nigerian •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
www.barloworld.com
Date: 21/11/2016 07:05:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
Sharenet Sites 
