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Trading Statement
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”)
Trading Statement
The group much improved result for the six months ended 31 March 2018 particularly on the back of
strong earnings in our southern African and Russian Equipment businesses.
Investors are referred to the SENS announcement relating to the finalization of negotiations for the
sale of our Equipment Iberia business (issued 25 April 2018). This disposal is expected to be
concluded by 2 July 2018 with the sale price representing a premium to net asset value. The results
of these operations have been presented as discontinued operations and assets and liabilities held
for sale consistent with the treatment at September 2017. Comparatives have been restated to
represent the continuing operations of the group and commentary within is regarding continuing
operations unless otherwise stated.
Equipment
Equipment Southern Africa's operating performance has shown a steady improvement in the first
half of FY2018 supported by favourable global commodity prices and increased mining activity. This
also assisted our joint venture in the Katanga province of the Democratic Republic of Congo to
deliver strongly improved earnings for the period. Equipment Russia has continued to benefit from
greenfield and brownfield mining projects, as well as a recovery in commodity prices, in particular
the coal sector, mining projects and produced record US$ revenue and operating profit for the first
six months of FY2018.
Automotive
The Automotive division produced solid results despite challenging market conditions. Revenues
were negatively impacted by the sale and closure of a number of BMW and GM dealerships in the
latter part of FY2017. Both operating profit and operating margin for the division exceeded the first
half of 2017.
Logistics
Revenue in Logistics was negatively impacted by lower activity. Turnaround initiatives implemented
towards the end of 2017 are bearing fruit with operating profits, operating margins and overall return
metrics all significantly up on the FY2017 first half results.
Earnings per share (EPS)/Headline earnings per share (HEPS) guidance
Barloworld expects that EPS, including both continuing and discontinued operations, for the six
months ended 31 March 2018 will be between 35%-45% higher than the reported EPS for the
previous six months ended 31 March 2017 of 336.6 cents. This translates to an expected EPS range
of between 454.4 cents and 488.1 cents for the period.
The company expects that EPS from continuing operations for the six months ended 31 March 2018
will be between 15%-25% higher than the adjusted reported EPS from continuing operations for the
previous six months ended 31 March 2017 of 380.5 cents. This translates to an expected EPS from
continuing operations range of between 437.6 cents and 475.6 cents for the period.
The company expects that HEPS, including both continuing and discontinued operations, for the six
months ended 31 March 2018 will be between 25%-35% higher than the reported HEPS for the
previous six months ended 31 March 2017 of 364.9 cents. This translates to an expected HEPS
range of between 456.1 cents and 492.6 cents for the period.
Barloworld expects that HEPS from continuing operations for the six months ended 31 March 2018
will be between 10%-20% higher than the restated reported HEPS from continuing operations for the
previous six months ended 31 March 2017 of 400.0 cents. This translates to an expected HEPS
from continuing operations range of between 440.0 cents and 480.0 cents for the period.
Net debt and Funding
Net debt increased in the first half mainly as a result of working capital absorption across the group.
Extended Caterpillar lead times and the uptick in mining activity has resulted in an increased
investment in inventories in the first six months of the year. We however expect our working capital
to normalize in the second half to ensure that we reduce net debt levels by year end.
In October 2017 two bonds totaling R425 million were repaid using existing facilities. In February
2018 we issued a new five year bond (BAW 29) for R400 million.
The group's results for the six months ended 31 March 2018 are scheduled to be announced on the
Stock Exchange News Service on or about 21 May 2018.
The financial information on which this trading statement has been based has not been reviewed or
reported on by the Company’s auditors.
08 May 2018
J.P. Morgan Equities South Africa (Pty) Ltd.
Date: 08/05/2018 01:30:00 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.
