Barloworld Limited. Merrill Lynch Conference Sun City

Transcription

1 Barloworld Limited Merrill Lynch Conference Sun City 29th March 2012

2 2011 Financial highlights Revenue up 22% to R49 823m (2010: R40 830m) EBITDA up 20% to R3 993m (2010: R3 318m) Operating profit up 51% to R2 289m (2010: R1 518m) HEPS from continuing operations up 120% to 465 cents (2010: 212 cents) Total dividend up 107% to 155 cents Net debt to equity declines to 36% from 47% Net debt of R4 489m (2010: R5 049m) decreased by R560m A+ credit rating maintained, outlook stabilised Debt maturity profile improved 2

3 2012 Group update Group Maintained A+ Fitch rating in February 2012 Funding for the acquisition of the Bucyrus distribution business secured Group celebrates 110 th Anniversary in 2012 Equipment Automotive and Logistics Handling Strong overall performance on back of mining sector demand Russian dealership acquisition continues to deliver well Market leadership gains in key product segments Sizeable investments in facility expansion across southern Africa and Russia In Iberia, restructuring executed in 1st quarter to realign cost base Global power systems strategy gains traction Pleasing overall performance in competitive trading environment Avis coach charter and Dreamworks fuel management businesses acquired Opened Soweto Toyota and Soweto Volkswagen in December 2012 Automotive and Logistics integration progressing well Logistics awarded 10 year Meadow Feeds national transport contract Ellerines logistics contract now fully operational Turnaround in trading profitability continues SEM performance strong with products introduced into Russia and Mozambique Roadmap agreed with AGCO to expand into Western Russia and extend territory in Siberia Potential sale of Handling business in US. Due diligence in progress 3

4 Strategic focus area Profitable growth Mining Infrastructure Power Chinese demand and global economic recovery to drive commodity prices and increased levels of mining investment Geography Southern Africa Russia Infrastructure backlogs and rapid urbanisation in emerging markets to drive infrastructure investment Geography Southern Africa Iberia, Russia Capacity constraints and increasing electrification requirements provide opportunities in electric power Marine and petroleum segments also have significant potential Geography Southern Africa Iberia, Russia 4

5 Strategic focus area Profitable growth Automotive Logistics Handling Tourism potential, growing corporate demand for outsourced vehicle fleets, and other solutions platforms related to vehicle usage On-going trend to outsource supply chain management activities and recovery in world trade Growth opportunity in providing integrated fleet solutions Demand for food and bio-fuels likely to significantly increase agricultural equipment opportunity in emerging markets Geography Southern Africa Australia Geography Southern Africa Middle East, Europe, China Geography US, UK, Europe, Siberia Southern Africa 5

6 Divisional overview Equipment 6

7 Equipment southern Africa Operational update Firm back orders up from R5.2bn at Sept 11 to R6.2bn at Dec 11 Strong results expected in 2012 on emerging market driven commodity-backed mining activity Flat year expected in construction with prospects for rail and port infrastructure CRC expansion projected to double throughput and improve efficiencies Mozambique, Botswana and Zambia to continue delivering pleasing results Angola good recovery Order book (Rm) Southern Africa Dec 2011 Sep 2011 Sep

8 Global mining capex Vale, BHP, Rio and Anglo Source: BofA Merrill Lynch Global Research, US$bn, Big4=VALE,BHP, Rio, Anglo 8

9 Sustaining mining capex Repairs, replacement and growth Installed population drives replacement cycle and annuity aftermarket revenue streams Source: BofA Merrill Lynch Global Research, Metso CMD 2011, McKinsey

10 Market outlook Southern Africa Building construction Mining Contract mining Heavy construction Rbn* 34% 52% 58% * Constant Rand 2008 value 10

11 Progress on projects in Mozambique Vale US$116m new units; US$72m MARC over 5 year period Currently 29 x 793 OHTs operating 1 x 797 OHTs mega mining trucks 100% complete 7 x 797 OHT currently on site to be assembled Last 2 x 797 left the factory 1 March 2012 First CAT 6090 shovel arrived in Mozambique and assembly started 8 March 2012 Rio Tinto Potential 20m tons coal/year for 25 years (US$1bn mining project) Currently 14 x 793 OHTs operating 30 x 777F currently operating with the 793 s Rio Tinto acquire 100% of Riversdale and are operating as Rio Tinto in Tete 11

12 Caterpillar Inc. acquisition of Bucyrus International Caterpillar Inc. acquisition completed on 8th July 2011 Caterpillar now participates in 75% of mining equipment value chain versus 25% pre- acquisition Discussions with Caterpillar are progressing well in relation to the acquisition of Bucyrus distribution rights in our territories We are targeting a close in Southern Africa in final quarter of FY 12 Our transaction will be funded by releasing capital, vendor finance and bridge funding 12

13 Caterpillar s previously limited product range 23% of surface and underground mobile equipment 13

14 The expanded Caterpillar product line Caterpillar meeting the challenge of providing expanded value chain solutions 14

15 Dozers & Graders Wheel Loaders Mining Trucks Hydraulic Shovels Highwall Miners Surface Drills Rope Shovels Draglines Surface Belt Systems Belt Systems Roof Supports Armored Face Conveyors Shearers Drills Truck s & Continuous Miners Diesel Transport Caterpillar and Bucyrus combined Surface Mining Equipment Underground Mining Equipment Company Caterpillar Joy Global Komatsu Hitachi Liebherr 15

16 Bucyrus product line overview Hydraulic Excavators and Rope Shovels Drills Draglines Highwall Miner Longwall Room and Pillar Belt Systems Consumables Trucks 16

17 Global mining capex breakdown The combined Caterpillar-Bucyrus offering competes in all key segments Source: BofA Merrill Lynch Global Research 17

18 Major opportunities Surface Extract Resources Swakop Husab Barrick - Lumwana Bannerman Resources Etango Uranium FQM - Kalumbila Rio Tinto Madagascar Townlands - Eloff Vale - Moatize Anglo - Kumba Anglo New Largo 18

19 Major opportunities Underground Anglo New Denmark Mabila Ermelo project Anglo Goodehoop Sasol Impumulelo Total Forzando West Sasol Bossjespruit Exxaro Matla 1 Debswana Morupule Hwange Zimbabwe 19

20 Equipment Iberia 20

21 Equipment Iberia Operational update Challenging macro economic environment with further market contraction expected for 2012 Power activity steady Order book, boosted by large package deals, delivers largely in 2013 Continued focus on growing market share while maintaining margins Further rationalisation - Spain, Portugal and Rental ( 7.6m cost) will impact H1 12 profitability Restructuring will position the business to achieve acceptable returns as market recovers Continued focus on cash generation and asset efficiency Order book ( m) Iberia Dec 2011 Sep 2011 Sep

22 Recent large deals awarded in Spain machines Delivery Timing of Iberian delivery US$m Deal value Outside Iberia Inside Iberia Victorino Alonso¹ EPSA¹ Transportes Peal² ¹ Victorino Alonso and EPSA deals both extended since March 2011 ² Closed in October

23 Iberian new machine market in units (56%) (54%) (14%) (26%) (2%) F/C Contraction in machine market in Iberia remains in double digits for fourth consecutive year, accelerating when compared to 2010; All segments affected during 2011 year, with no individual segment showing year on year growth 23

24 Iberia market leadership trends Monetary Value Market Share Units Market Share Strong market share gains in 2011 as customer relationship and support strategies deliver Monetary value market share is now 4 times that of nearest competitor 24

25 Equipment Russia 25

26 Equipment Russia Operational update Record result achieved in 2011 US$374m (80% growth) in revenue US$33m operating profit Good growth expected in 2012 FY over 2011 result on target to achieve Order book remains strong Dec 11 US$78m (Sept 11 US$63m) Further diversification of customer base inroads into smaller mining Customers Continue with facility development programme (Irkutsk, Magadan and Krasnoyarsk) Bucyrus integration underground and shovels opportunity Order book (US$m) Russia Dec 2011 Sep 2011 Sep

27 Russian territory coverage map Owned facility Bucyrus facility Planned facility 27

28 New service and component rebuild facility Novosibirsk 28

29 Russia key mining customers 29

30 Russia Power Systems opportunities ( ) 30

31 Power growth strategy 31

32 Strategic framework Profitable growth: Power Oil and Gas Electric Power Generation Marine Industrial 32

33 Electric power Nampower project Radiator Farm Power House Transformer Room Main HFO Tank Water Treatment House Day tanks HFO Treatment House 33

34 Electric power Gas engines (MWM) CAT has acquired MWM Enhances the range and efficiency of gas products, including cogeneration and special gases Barloworld has secured the rights as a 1 st wave dealer for Russia and Southern Africa Significant growth opportunity in gas and cogeneration in these territories 34

35 Divisional overview Automotive and Logistics 35

36 Overview: Automotive and Logistics Barloworld Automotive and Logistics Car Rental Motor Retail Fleet Services Logistics Short-term vehicle usage Franchised motor retail Long term rental and fleet management Supply chain management Coachworks Used vehicles and disposal solutions Freight management and services Software Southern Africa Southern Africa Australia Southern Africa Southern Africa EMEA Inter- and intra-business unit synergies Market leadership Complementary components Balanced portfolio 36

37 Overview: Automotive and Logistics Sense of Scale General Information Employees Countries 14 Automotive Principals Avis, BMW, Chrysler,Daimler, Ford, General Motors, Subaru, Suzuki, Toyota, VW Car Rental locations >190 Wholly owned Motor Retail dealerships (SnA & Oz) 41 Key Indicators FY Sep 10 FY Sep 11 Rental Days 5.02m 5.14m New & Used retail units sold Total vehicles under management New vehicles sold per dealership per month Average km s travelled per month FY m Average tons shipped per month (SAT) FY t 37

38 % Growth Overview: Automotive and Logistics Car Rental Continue with yield strategy/ cost reduction Stable used retail and wholesale margins Productivity improvements Settle coach charter acquisition 20 Jan '12 YTD Leading Indicators Sep '11 YTD Rental Days Rate Per Day Fleet Utilisation Fleet Size People Productivity 38

39 % Growth Overview: Automotive and Logistics Motor Retail Fewer, Bigger, Better Strategy continues - 71 new vehicles sold per dealership per month (Sep 10: 62) - Appropriate dealership footprint Southern Africa - Focused brand strategy aligned to overall Automotive business model - Opened Soweto Toyota and Soweto Volkswagen - Finance and insurance improved contribution Australia - Portfolio performing well SA - Jan '12 YTD Leading Indicators AUS - Jan'12 YTD New Units Service Hours Parts Revenue F & I Net Profit

40 % Growth Overview: Automotive and Logistics Fleet Services Business model continues to deliver value Sustained used vehicle contribution Targeted growth Phakisaworld 100% owned Opening Fleet Services in Ghana Acquired small fuel management company 30 Jan '12 YTD Leading Indicators Sep '11 YTD Maintenance Fleet Finance Fleet Total Fleet 40

41 % Growth Overview: Automotive and Logistics Used vehicles & Disposal Solutions Integrated approach centrally managed Comprehensive Automotive systems continue to deliver value Maximise use of virtual channels across all business units YTD used retail units = (prior period = ) Service offering to our major business units in South Africa with on-going innovation Telematics and lead management projects across the division 20 Jan '12 YTD Leading Indicators Sep '11 YTD Used Units - SA Used Units - Aus 41

42 Overview: Automotive and Logistics Logistics Southern Africa - Ellerine s contract settling well; improved volumes in supply chain management - Higher volumes through Barloworld Equipment - Awarded 10 year contract for dedicated transport services to Meadow Feeds from 1 October 2011 Europe, Middle East and Asia - Rationalisation and cost control taking effect, however lower volumes continue - Renegotiated contract in SAT supported the result - Focusing on growing contractual revenue Targeted growth opportunities Good improvement in profitability 42

43 Divisional overview Handling 43

44 Handling overview United Kingdom Market is recovering ( units) but still off peak of units in 2007 Growing maintenance work which is higher margin Order book at 16.5m is 3 year high Short term rental remains good with a fleet 11% larger than LY Both MOD contracts extended to 2013 European Union Market in Belgium recovering (8 187units) vs peak of units in 2008 Market in Netherlands weak ( units) vs peak of units in 2008 Order book in Belgium record high 16.4m Short term rental utilisation flat but fleets larger in both countries Good success in big trucks in Belgium United States Market is recovering ( units) but still off peak of units Order book good Short term rental revenue and margins continue to grow Balance sheet in good shape Potential sale of US business announced in January; due diligence started South Africa Handling Market is recovering units Renewed focus on major accounts New SAP system installed Used stock levels reduced Expansion into Angola and Mozambique gaining momentum 44

45 Agriculture Global markets for agriculture equipment have grown strongly Industry tractor sales in SA up by 18% over LY and our share grown by 3 points Low cost tractor ranges from CLAAS and MF helping Industry baler sales up 16% on LY and our share up in balers up 1.5 points Industry combine sales up 25% but our share down 4 points (timing of sales) Excellent growth prospects in Africa Mozambique progressing well Two retail outlets opened Growing in Russia Expanding footprint in Siberia and Western Russia 45

46 Growth in Siberia Moscow Agro machinery Territories (Novosibirsk, Omsk & Altay) Nizhniy Novgorod Region Republic of Chuvashia Vologda Region Republic of Udmurtia Perm Region Kirov region Kemerovo Khakassia Krasnoyarsk 46

47 Outlook Division Equipment Commodity prices are at levels that should continue to be favourable for mining investment Strong performance to continue in southern Africa and Russia on the back of mining demand Iberian industry to remain depressed on general Eurozone weakness, 2013 better year Restructure implemented and a strong order book in Iberia will position business for future profitability Expected growth in Power Systems Strong order book in all our regions Automotive and Logistics Car Rental: Current positive momentum to continue despite competitive trading environment Motor Retail: A good performance expected in southern Africa and Australia Fleet Services: Continued growth expected across all product offerings Logistics: Integration benefits as well as improving volumes and margins expected Handling Sales-led recovery to continue in Handling operations on back of stronger order books Expansion of agriculture footprint to yield medium term benefits Strong growth expected in SEM product line Sale of US business planned for completion in next few months 47

48 Barloworld Contacts Clive Thomson Barloworld CEO Don Wilson Barloworld Finance director Jacey de Gidts Head: Group Communication and Marketing 48

49 Thank you