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BARLOWORLD LIMITED - Update - Strategic review

Release Date: 01/09/2017 14:00
Code(s): BAW BAWP     PDF:  
Wrap Text
Update - Strategic review

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)
(Namibian Stock Exchange share code: BWL)
("Barloworld” or “the Company")


Update - Strategic review

During the Interim Results presentation, the Company advised that it has completed a
comprehensive strategic review (Strategic Review). The following key initiatives were identified:

    -   Fix and address underperforming businesses
    -   Optimise returns from the existing portfolio
    -   Look at high growth opportunities based on existing capabilities


The Company wishes to provide an update based on the implementation of some of the initiatives to
date.

The underperformance of the group’s Iberian equipment business (“Equipment Iberia”) was
highlighted during the Strategic Review. Equipment Iberia has recently undergone a restructure in
terms of a carefully formulated business improvement plan (BIP). The BIP focused on several areas
including a comprehensive network review and a cost review resulting in a further reduction in
headcount in line with forecast activity levels. The BIP, which has been communicated to Caterpillar
as part of our ongoing engagement with our principal supply partner, is expected to improve
profitability in the business over the coming periods but the ability of Equipment Iberia to achieve
the Group’s targeted return hurdle remains unclear.

The group is therefore reviewing all of its options in respect of Equipment Iberia including
preliminary discussions with an interested party. In addition to this, the group will continue to assess
the possibility of expanding its Caterpillar dealership footprint in emerging markets where its mining
competencies and capital can be better deployed.

The Board has made no decision regarding any potential transactions and at this early stage there is
no certainty that a transaction may occur. The company will provide further updates to shareholders
as and when relevant information becomes available.


Sandton
1 September 2017
Sponsor: J.P. Morgan Equities South Africa Proprietary Limited

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