Merrill Lynch Conference. Sun City March 2014

Transcription

1 Merrill Lynch Conference Sun City March 2014

2 Group revenue Revenue Sept 2013 Revenue Sept % 7% 4% 53% 7% 7% 8% 50% 29% 28% Automotive and Logistics Equipment Southern Africa Equipment Europe Equipment Russia Handling 2

3 Group operating profit Operating Profit Sept 2013 Operating Profit Sept % 60% 50% 48% 50% 51% 40% 42% 40% 39% 30% 30% 20% 20% 10% 12% 10% 12% 0% -10% 0% 2% -2% 0% -10% -5% 1% 2% Automotive and Logistics Equipment Southern Africa Equipment Europe Equipment Russia Handling Corporate 3

4 Equipment Division

5 Caterpillar enhancing distribution model Objectives 1 Strengthening the Caterpillar-Dealer model 2 Enhancing customer focus 3 Achieving superior economics for Caterpillar and the dealer 4 Seizing opportunities / mitigating risks 5

6 Business overview Equipment southern Africa

7 Market outlook by segment (Rm) 34% 54% 31% 46% Building Construction Heavy Construction Contract Mining Mining Houses 7

8 Major surface mining opportunities Coal Copper/Nickel Iron ore Uranium Gold Jindal (2015) FQM Kalumbila (2014) Vedanta KCM ( ) Vale/Rio Tinto Tete (2013-) Exxaro Medupi Exp (2013-) Nippon Steel- Revuboè (2015) B2 Gold (2013-) ResGen Boikarabelo (2015) Extract Resources Husab CoAL Makhado (2016) Kumba Sishen (2013-) Exxaro Belfast Project (2015) Zonnebloem Xstrata (2016) Xstrata Tweefontein (2013-) Anglo New Largo (2017) 8

9 Major infrastructure opportunities Awarded and in progress To commence short term Potential Refinery Dams, Rail, Ports, Roads Mine Infrastructure Infrastructure Backlogs North South Water Pipeline Power, Ports, Roads and Railways Various Road Rehab Neckartal Dam Mine Infrastructure Rail and Dams Mine Infrastructure and Provincial and Municipal Infrastructure 17 Strategic Integrated Projects (SIPs) developed and approved in South Africa 9

10 We have the broadest mining truck line in the industry Helping customers choose the trucks that match precisely to their unique hauling needs CAT MECHANICAL DRIVE MINING TRUCKS 797F 793F 793D 789D 785D 785C CAT ELECTRIC DRIVE MINING TRUCKS 795F AC 793F AC UNIT RIG ELECTRIC DRIVE MINING TRUCKS MT6300 AC MT5500 AC MT5300D AC* MT4400D AC* MT3700 AC MT3300 AC 10 * Fully Caterpillarised former Unit Rig LMT

11 Kumba Electric Drive truck trial update Six Cat 795 AC trucks placed at Sishen (R250m) Performance is measured on Fleet availability Mean Time Between Failure Life Cycle Costing Fleet performance is above contractual KPI targets to date Exceptional parts and component availability 11

12 Zambia FQM Kalumbila Order of R1.1bn placed in 2011 for three Cat 7495 rope shovels and seven Cat MD 6640 drills 2 Rope shovels and 2 drills currently being assembled on site 39 local employees on site for the assembly of the machines First Cat electric rope shovel to be delivered in Zambia 12

13 Namibia Swakop Uranium Husab Project First machine, Cat 6060FS hydraulic shovel arrived in Walvis bay in September 2013; machine has been assembled, tested and handed over Assembly of second rope shovel and other machines in progress The whole fleet is expected to be commissioned by November 2014 Barloworld Operational team being put in place Components of the Cat 6060 in transit 13 Total contract value R1.3bn Assembled shovel and Barloworld Equipment team on site

14 Southern Africa revenue profile 2013 Revenue by line of business New equipment sales by industry 4% 3% 11% 41% 10% 42% 11% 52% 26% New equipment sales Product support Mining Construction EMPR Power Used equipment sales Rental Contract Mining 14

15 Southern Africa sales history R % % % 34% 36% 30% 46% % Equipment sales Product support 15

16 Equipment southern Africa outlook January 2014 firm back orders at R3.6bn (Sept 2013: R3.55bn) EMPR large mining machine deliveries and site solutions expected to offset slowdown in CAT legacy mining sales Strong after sales activity to continue Continued growth in construction with solid prospects for the medium term Positive outlook for Rental operation based on current market conditions Firm Order Book (Rm) Southern Africa Jan 2014 Sep

17 Business overview Equipment Russia

18 Commodities overview Russia Oil Copper Coal Industry value US$448bn Industry value US$7bn Industry value US$33.3bn Gold Aluminium Platinum Industry value US$13.1bn Industry value US$8.8bn Industry value US$1.7bn Silver Nickel Diamond Industry value US$1.4bn Industry value US$4.9bn Industry value US$4.4bn 18

19 Russia revenue profile 2013 Revenue by line of business New equipment sales by industry 2% 2% 7% 3% 3% 33% 16% 63% 71% New equipment sales Product support Mining Construction Power systems Used equipment sales Rental Oil and gas Other 19

20 Russia sales history US$ % 33% 28% % % 29% 36% % Equipment sales Product support sales 20

21 Green field projects surface Units US$ 282m 313m 398m 21

22 Underground greenfield mining projects SDS Ugol Yuzhnaya Mine Lutuginskiy mine site: Coal reserves 40 m tonnes UGMK Region 1 Western and Eastern Siberia Region 2 Yakutia and Russia Far East Anadyr Depressed coal market delaying investment Baykaimskaya mine (underground) Coal reserves 68,7 m tonnes EVRAZ Holding Magadan Raspadskaya mine Coal reserves 451 m tonnes Raspadskaya Koksovaya mine Coal reserves 101 m tonnes SUEK JSC Omsk Tomsk Novosibirsk Achinsk Mirniy Yakutsk Nerungry Petropavlovsk- Kamchatskiy MC Kolmar Nerungryugol JSC A.D. Rubana mine Coal reserves 40 m tonnes Krasnoyarsk Kemerovo Barnaul Abakan Chita Inaglinskaya Mine Coal reserves 76,8 m tonnes Denisovskaya Mine Coal reserves 64,5 m tonnes MC Sibirskaya (Sibuglemet) EVRAZ Holding Uvalnaya mine Coal reserves 342 m tonnes Mezhegey Ugol Coal reserves 700 m tonnes 22

23 Construction/oil and gas opportunity Railways Oil & Gas projects Kuyumba Tayshet oil trunk pipeline implem. period Length 704 km Cost $3 bn Region 1 Western and Eastern Siberia Region 2 Yakutia and Russia Far East Anadyr Power of Siberia gas pipeline implem. period Length over 2700 km Cost over $13,6 bn Severo-Sibirskaya railroad Magadan 2 000km (Nizhnevartovsk to Ust-Ilimsk (BAM)) Stage: start 2016 US$4bn Mirniy Yakutsk Petropavlovsk- Kamchatskiy Omsk Tomsk Novosibirsk Achinsk Krasnoyarsk Kemerovo Nerungry Ust-Kut GPP 2,3 bn m3 of natural gas to be processed (INK) Commissioning 2014 Kyzyl-Kuragino railroad 411,7 km Contractor chosen Mostovik US$5,57bn Barnaul Abakan Chita BAM railway mega project (second spur of Baikal-Amur Mainline) Stage: start in 2014 $15 bn 23

24 Equipment Russia outlook Mining order book showing downward trend Gold under pressure with coal market still weak Continued branch infrastructure development throughout the territory remains key to growing long term market share Order book (US$m) Russia Order book excludes EMPR orders retained by CAT to the value of US$28.7m VT will receive margin via service fee Jan 2014 Sep

25 Business overview Equipment Iberia

26 GDP Forecasts 3.4% Spain starting to recover 0.8% 1.0% 0.5% 1.5% 0.9% -0.2% -0.1% -1.6% -1.2% -3.8% Actual Previous forecast - Oct 2013 Current forecast - Feb Source: IMF and Ministry of Economy Spain

27 Units Machine Industry trend and outlook (Iberia)

28 Headcount Headcount across the Iberian region has been reduced by 965 employees or 40.4% Sept 2007 Sept 2008 Sept 2009 Sept 2010 Sept 2011 Sept 2012 Sept 2013 Jan 2014 Sept 2014 BW Iberia staff BW FSA BW MERA BW STET 28 SITECH + MYTRACTOR: 9 employees

29 Iberia revenue profile 2013 Revenue by line of business New equipment sales by industry 2% 25% 38% 46% 35% 35% 5% 14% New machine sales Product support Mining Construction Used machine sales Rental Other Power 29 * Construction includes contract mining

30 Iberia sales history % 30% % % 40% 37% 33% 35% Equipment sales Product support 30

31 Equipment Iberia outlook Iberian economy appears to have bottomed Order books continue at low levels but slightly better than 2013 Focus on maintaining market share, margins and cost control New Mining projects appear on the horizon Power systems sector remains solid Improved operating performance due to lower cost base Order book ( m) Iberia Jan 2014 Sep

32 Business overview Global Power Systems

33 Power Systems opportunities Oil & Gas Good progress in penetration of international key accounts After sales growth in Angola and Russia Working with Concession holders and service providers on largescale projects i.e. Mozambique LNG and Karoo unconventional gas Electric Power Electricity shortfall and large-scale infrastructure development are driving the market Growing gas opportunities; cogeneration, landfill, greenhouses, etc Project participation and orders growing Marine Main prime and after sales opportunities with offshore vessels, ferries, cargo, governmental (military) and fishing (tuna) Emphasis going forward on gas propulsion, systems integration and coverage of international key accounts following CAT s acquisition of Berg 33

34 Automotive and Logistics

35 Automotive and Logistics Division Strategic positioning Customers Barloworld Automotive (Automotive Business model) Barloworld Logistics Car Rental Fleet Services Digital Disposal Solutions Motor Retail Southern Africa Motor Retail Australia Freight Mangmt and Services Supply Chain Mangmt Supply Chain Mangmt Transpor t Solutions Communication, HR, IT, Legal, Finance, Sustainable Development, Strategy, Empowerment and Transformation, Risk Management, Business Development and Sales, Governance, Ethics and Compliance Inter-business unit synergies and cost efficiencies Apply Collective Wisdom Leveraging Automotive infrastructure to achieve critical mass for growth Retain strategic focus on each business unit 35

36 Sense of scale General Information Employees Countries 16 Automotive Principals Avis, Audi, BMW, Ford, General Motors, Mazda, Mercedes-Benz, Toyota, Volkswagen Car Rental locations >190 Wholly owned Motor Retail dealerships (SnA & Oz) 40 Key Indicators FY Sep 12 FY Sep 13 Rental Days 5.71m 6.06m New & Used retail units sold Total vehicles under management New vehicles sold per dealership per month incl. Oz DTS km s travelled FY m SAT tons shipped FY t 36

37 Operational review Strong overall result in a demanding trading environment Revenue: R34.4bn (FY 12: R29.5bn) up 17% Record operating profit R1 479m (FY 12: R1 152m) up 28% Operating margin for the year 4.3% (FY 12: 3.9%) All business segments performed well Operating profit (Rm) Margin Car Rental Motor Retail Fleet Services Logistics +38% +26% +39% +20% 7.7% 7.1% 2.5% 2.4% 16.7% 15.2% 2.3% 2.1%

38 Integrated automotive and logistics business model delivers Revenue CAGR = 14% Operating profit CAGR = 27% Operating margins improved from 3.4% to 4.3% Rbn Revenue and Margin Margin 5.0% 4.0% Balanced mix of businesses delivers value through synergies % 2.0% Revenue Margin Rm Operating profit

39 Division overview Enhance return on equity Continued cash focus Targeted capital allocation Growing market share Optimising vehicle fleets (utilisation) Managing working capital levels Improving asset turn Expense management Controlling interest costs Implementing Logistics growth strategy Targeted growth opportunities across all units Exceeding customer expectations Australia negotiations 39

40 % Growth Car Rental Improved rental days despite competitive market Static revenue per day Continued focus on operating costs Fleet utilisation remains well controlled Continued solid used vehicle profit contribution Sustained customer satisfaction above 90% Leading indicators Rental days Rate per day Fleet utilisation Fleet size Jan '14 YTD Sept '13 YTD 40

41 Motor Retail Total South African Vehicle Market Passenger LCV M&HCV 41 Source: RGT

42 % Growth Motor Retail Southern Africa Fewer, Bigger, Better Strategy continues 71 new vehicles sold per dealership per month (Sep 13: 75) Appropriate dealership footprint Focused brand strategy aligned to overall Automotive business model presents some targeted growth Improved operating margin through cost containment and margin expansion Continued strong finance and insurance contribution 25 Leading indicators New units Service hours Parts revenue F & I Net profit Jan '14 YTD Sept '13 YTD 42

43 % Growth Fleet Services Pleasing performance in low interest rate environment Finance fleet growth slows post large contract roll-outs Strong growth in fleets under maintenance Continued strong used vehicle profits COJ settled and performing well Awaiting adjudication on further tenders Investigating further African growth opportunities 25 Leading indicators Maintenance fleet Finance fleet Total fleet Jan '14 YTD Sept '13 YTD 43

44 Logistics Good turnaround and positioned for growth Manline contributing strongly to the newly formed Barloworld Transport Solutions from 1 Feb 2013 Niche acquisition effective 5 Jun 2013, rebranded Manline Mega, is well positioned in the abnormal load transport market with further growth potential Successfully renewed all expiring contracts in Supply Chain Management and Dedicated Transport Awarded Pioneer Bakery fleet 4PL contract International operations continue to face difficult trading conditions Restructured Spanish operations Exited Far East business effective 1 Nov

45 Merrill Lynch Conference