New York 5-7 September 2012

Transcription

1 Barloworld Limited Deutsche Bank Global Emerging Markets Conference New York 5-7 September 2012

2 Current company structure 100% 100% 100% 2

3 Group revenue Revenue March 2012 R28 121m Revenue September 2011 R49 823m 10% 27% 10% 25% 50% 6% 7% 53% 5% 7% Equipment Southern Africa Equipment Europe Equipment Russia Automotive and Logistics Handling 3 3

4 The brands we represent 4

5 Strategic developments Corporate activity Acquisition of Bucyrus South Africa and Botswana completed for US$175m Russia Bucyrus acquisition expected H1 13 Sale of US Handling operation for US$60m completed Sale of UK Handling operation for 36m (R465m) by 30 th September 2012 JV signed with EMD/Progress Rail Power systems strategy gaining traction Significant investments in facility expansion across southern Africa and Russia Logistics business fully integrated into the Automotive business Logistics sign JV with Manline and acquire specialist chemical company Ecosse Emphasis on driving profitable growth and enhancing financial returns 5

6 Strategic framework 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 6

7 Strategic framework 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 UK, Europe, Siberia Southern Africa 7

8 Attractive long term demand outlook for key minerals 2.5x 1.3x 2.2x 2.4x Global Iron Ore (million tons) Global Coal (million tons oil equiv.) Global Copper (million tons) Global Aluminium (million tons) E 2020E 2025E 2030E E 2020E 2025E 2030E E 2020E 2025E 2030E E 2020E 2025E 2030E Demand for iron ore, coal, copper and aluminium is expected to be the main driver of global mining CAPEX Estimated total mining CAPEX growing at 9.8% CAGR to 2015 Source: HSBC Research 8

9 Miners view of global mining capex 9

10 Group Financial overview 10

11 Salient features financial as at March 2012 Revenue up 19% to R28.1bn Operating profit up 50% to R1 282m Profit before exceptional items up 84% to R829m HEPS up 70% to 245 cents (H1 11: 144 cents) Interim dividend of 80 cents per share up 60% Disposed of Handling US in April 2012 for approximately R460m 11

12 Salient features non-financial as at March 2012 Group celebrates 110 years 85 years as a Caterpillar dealer Broad-based black economic empowerment Remain in first position in General Industrial sector and number 12 overall* Achieved Level 2 BBBEE rating Remain in JSE SRI index ( Best Performer category) 6 th position and Gold Certificate in The JSE 100 Carbon Disclosure Leadership Index 2011 Improvement in group Lost Time Injury Frequency Rate (LTIFR) Improvement in energy and greenhouse gas emissions efficiency Implementation of water stewardship initiatives Continued focus on, and investment into, skills development * Per 2012 Financial Mail Survey 12

13 Income statement highlights March 2012 (Rm) 1H 12 1H 11 % chg Revenue EBITDA Operating profit Fair value adjustments on financial instruments (106) (66) Net finance costs (347) (338) Profit before exceptional items Exceptional items (26) 62 Taxation (343) (143) Secondary Tax on Companies (25) (11) Income from associates Net profit HEPS (cents)

14 Statement of financial position March 2012 (Rm) Mar 12 Sep 11 Non-current assets Current assets (excluding cash) Cash and cash equivalents Total assets Interest of all shareholders Total debt Other liabilities Total equity and liabilities Net debt

15 Summarised statement of cash flows March 2012 (Rm) 1H 12 1H 11 Operating cash flows before working capital Increase in working capital (3 574) (1 345) Net investment in leasing assets and vehicle rental fleet (1 155) (683) Cash utilised in operations (2 345) (115) Other net operating cash flows (636) (600) Dividends paid (250) (135) Net cash applied to operating activities (3 231) (850) Net cash used in investing activities (231) (435) Net cash outflow (3 462) (1 285) 15

16 Net cash investment in working capital March 2012 (Rm) 1H 12 1H 11 Inventories increase (2 361) (990) Receivables increase (1 134) (863) Payables (decrease)/increase (79) 508 Total working capital increase (3 574) (1 345) (Rm) 1H 12 1H 11 Equipment southern Africa (1 779) (614) Equipment Europe 9 (76) Equipment Russia (773) 65 Automotive and Logistics (633) (502) Handling (385) (124) Other (13) (94) Total working capital increase (3 574) (1 345) 16

17 Segmental gearing March 2012 Group segmental gearing ratios are as follows: Debt to equity (%) Trading Leasing Car Rental Total group Target range Gross Net 31 March September Net debt of R8 056m (Sep 2011: R4 489m) increased by R3 567m EBITDA interest cover 6.0 x (Sep 2011: 5.3 x) Fitch A+ rating maintained, stable outlook Capital structure strong 17

18 Debt maturity profile March 2012 Interest bearing debt Redemption Rm Total Short-term Long-term South Africa Offshore Total debt March Total debt September Ratio of long-term to short-term debt 66:34 (Sep :24) New 3 and 5 year bonds raised in April, R760m to extend maturity profile R5.5bn unutilised bank facilities at March 2012 Additional funding secured for SA Bucyrus acquisition Cash and cash equivalents R1 053m (Sep 2011 R2 754m) Approximately US$60m cash proceeds from US Handling business in April Well placed to fund future growth opportunities 18

19 Barloworld Equipment Southern Africa 19

20 Our southern African footprint and country diversity 20

21 Market outlook suggests continued medium term growth, but short term softening Building Construction Heavy Construction Contract Mining Mining Houses 34% 52% 47%

22 High production/high utilisation machines are best fit for our solutions business model and we continue to retain this focus R hours 5 000x R hours 300x R hours 200x R hours 60x R hours 17x R

23 Extended mining product range Bucyrus acquisition Open Pit Surface Mining Coal Room and Pillar Hard Rock Longwall 23

24 Status of Bucyrus transaction SA Competition Authority approval granted on 28th June 2012 and transaction closed on the 2nd of July as planned Transition of Bucyrus Africa and Eqstra to SAP system was successful A stabilisation team from Caterpillar is working with Barloworld equipment on integrating the two business so synergies can be realised 24

25 Bucyrus consolidates our position as a major supplier to the mining industry 795F AC & Unit Rig trucks present an opportunity to participate in the electric drive ultra mining truck class 25

26 Major surface mining opportunities Coal Copper Iron ore Uranium Jindal FQM Kalumbila Barrick Lumwana Vale and Rio Tinto Tete Bannerman Etango Anglo Coal- Revuboe Extract Resources Husab Zonnebloem Xstrata Kumba Sishen ResGen Boikarabelo Exxaro Belfast Project CoAL Makhado Xstrata Tweefontein Anglo New Largo 26

27 Major underground mining opportunities Coal Copper Diamonds Hwange Zimbabwe Glencore Mopani Debswana Morupule Mabila Ermelo Project DeBeers Venetia Sasol Impumelelo Total Forzando West Exxaro Matla Xstrata Tweefontein Sasol Bossjespruit Anglo New Denmark Anglo Goedehoop 27

28 Progress on projects in Mozambique Vale US$210M in new units and US$72m MARC over 5 year period Currently 30 x 793 OHTs operating at Vale and 14 at Rio Tinto Currently 8 x 797F OHT operating Additional 2 x 797 OHTs, 4xD11T and a D10T to be delivered by September 2012 Inroads into shovel market with the first CAT 6090 shovel delivered. Future projects Rio Tinto Zambezi Project Anglo has announced the development of a coal mine. Nippon Steel to invest in a coal mine in Tete province VALE Moatize Phase II VALE phosphate mine in Evate Nampula JINDAL steel will initiate mining in Sept

29 Barloworld REMAN Centre (BRC) increases our capacity to service customer components Successful project completion Increased capacity Potential to handle legacy Bucyrus products Major aftermarket profit contributor 29

30 Major infrastructure projects dependent on governments ability to execute and raise finance Awarded and in progress To commence short term Potential 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 SIPS Projects 30

31 Equipment southern Africa Outlook Significant delivery of mining machines in previous years will drive after sales activity Encouraging prospects for rail and port infrastructure in Mozambique and South Africa Remanufacturing Centre to be major profit contributor as it increases capacity and has the potential to handle legacy Bucyrus components Angola, Botswana, Mozambique and South Africa will deliver strong performance Rm Southern Africa Order book Bucyrus Jul 2012 Mar 2012 Sep

32 Equipment Russia 32

33 Commodities overview Russia Oil Copper Coal Gold Aluminium Platinum Silver Nickel Diamond 33

34 Green field mining projects Udokan/Metalloinvest Project operator Baikal Mining Company Copper reserves 20m tonnes Start of the project 2014 Region 1 Western and Eastern Siberia Region 2 Yakutia and Russia Far East Anadyr Amaamskoye Project operator Northern Pacific Coal Company Coal reserves 120m tonnes Start of the project 2017 Chertandinskoye Magadan Natalkinskoye Coal reserves 123m tonnes Start of the project 2012 planned Mirniy Yakutsk Petropavlovsk- Kamchatskiy Gold reserves tonnes Annual production 18 tonnes Gold-bearing ore 40m tonnes pa Omsk Tomsk Elegestskoye Coal reserves 900m tonnes Mezhegey/Evraz Start of the project 2013 EPK/RMK Open-cast mine in process Underground mine launch in 2014 Planned production 15m tonnes Severstal Resourses Indeterminate data of the project Novosibirsk Achinsk Krasnoyarsk Kemerovo Barnaul Abakan Chita Ozernoye/Metropol Project operator MBC corporation Zinc and Lead ore reserves 135m tonnes Start of the project

35 Construction Opportunity Railways Hydro power stations Continual projects Other projects Severo-Sibirskaya Rail road (mega project) 2 000km (Nizhnevartovsk to Ust-Ilimsk) Stage: start 2016 US$4bn Enisey bridge Stage: active ( ) Region 1 Western and Eastern Siberia Region 2 Yakutia and Russia Far East Anadyr Viluy, Federal road Low-motion, permanently active Kolyma, Federal road Low-motion, permanently active Eastern bypass road Stage: projecting Magadan Magadan-Chukotka road Stage: active project, start km Western bypass road Omsk 17,4 km Stage: start 2012 Mirniy Yakutsk Petropavlovsk- Kamchatskiy Ust-Srednekan GES Kolyma Hydrapower station mega project) Stage: active project Planned startup in 2012 Irtysh dam Stage: start 2012 Omsk Tomsk Lena, Federal road Low-motion, permanently active Novosibirsk Achinsk Chuisky Trakt broaden Stage: start 2012 Krasnoyarsk Kemerovo Barnaul Abakan Chita Kankunskaya PowerStation mega project MW Start in 2013 Project docs in process Kyzyl-Kuragino 411,7 km Stage: active BAM rail way mega project Stage: active ( ) 35

36 Novosibirsk facility expansion VT Headquarters Offices and new Power facility Service and rebuild centre Rental premises Parts warehouse New equipment inventory SEM and Agriculture 36

37 Facilities Novosibirsk CRC opened in July 2011 Irkutsk opening in September 2012 Neryungry Project concept underway Magadan opening in

38 Equipment Russia Outlook Mining activity still strong driven by gold. Coal industry has slowed down Construction segment will double in revenue compared to 2011 Dedicated focus on recruitment, training and retention of technical staff Power business to continue developing turnkey solution capabilities Overall will exceed activity levels of first half Transition planning for the Russia Bucyrus transaction has commenced $m Order book Russia Jul 2012 Mar 2012 Sep

39 Equipment Iberia 39

40 Strategic analysis: Macro economic situation GDP Growth 6.0% 4.0% 2.0% 0.0% (2.0%) (4.0%) (6.0%) Both regions are officially in recession and have experienced double dip recessions since 2009 Forecast for 2013 shows limited recovery GDP Growth Spain GDP Growth Portugal GDP Growth Euro 40

41 Industry Forecast Iberia: Total IBERIA F/C

42 Headcount evolution Spain Number of employees: Spain Headcount across the Iberian region (Spain + Portugal) has been reduced by 939 employees or 40% Technical capabilities have been maintained Workforce: Number of active employees Not included: pre-retirement and suspensions. 42

43 Equipment Iberia Outlook Macro economic environment remains challenging but expected to stabilise in 2013 Business profitability expected to improve into 2013 due to reduced cost base Continued focus on growing market share while maintaining margins Restructuring will position the business to achieve acceptable returns as market recovers Continued focus on cash generation and asset efficiency Marine Shipyards gaining momentum Decline in order book due to Victorina Alonso and Transportes Peal cancellations m Order book *Decline due to order cancellations Iberia Jul 2012 Mar 2012 Sep

44 Power 44

45 Power systems strategy gaining traction Oil and Gas Electric Power Generation Marine Industrial 45

46 Market segments Oil & Gas Drilling Onshore RUS Offshore AGO,MOZ,NAM Well Servicing OEMs Well servicing companies (AGO, MOZ, RUS) Engines, transmissions, packages used to drill O&G wells for onshore and offshore applications Engines, transmissions, packages used to complete new wells or improve production from existing ones Gas Compression RUS MOZ to become a natural gas player; NAM next Production LNG projects Moz Onshore production RUS Offshore AGO; MOZ to be Gas engines used to drive compressors for gas recovery, reinjection, gathering, processing, storage and transmission Engines for exploration, recovery and transmission of petroleum products including gathering, production, pumping, and refining. Onshore and offshore 46

47 Market segments Marine Passenger Vessels Cargo Large Prime & After Sales market in Iberia Shipyards with expertise and Spanish owners very active in Mediterranean Opportunity mainly After Sales in Southern Africa and Iberia Direct influence on workboats segment Workboats Others: Fishing/ Military/ High P. Largest part of BW s marine market Offshore prime & after sales opportunities Tug & Salvage prime opp Dredging prime opp Fishing: large Prime & After sales opp in Iberia, ZAF, NAM. To be explored in RUS Highly dependent on subsidies Military: Emergent market High P: Depressed market 47

48 Market segments Electric Power (EPG) By Customer/ Market By Fuel Residential Commercial Medical Entertainment Infrastructure Industrial Mining Construction Telecommunications Diesel / Heavy fuel oil Gas (fossil fuel & renewables ) By Application By Business Peak load Medium load Base load Time of day Baseload Prime Standby Retail Package Turnkey 48

49 EPG NamPower Project N$250m Turnkey power project 3 x 16 CM32 MAK engines/generators producing 22MW Successfully commissioned in July

50 Rail EMD Africa joint venture 50

51 Locomotive and railcar services Product Offering Service Offering Draft Gear Sideframes Bearings Locomotive Reconfigured rebuild locomotive Locomotive Repair Coupler Brake beam Freight car wheelset Slack adjuster Bolsters Yoke Transit car rebuild Freight car repair & remanufacturing Reconfigured loco Traction motor Combo assembly EMD engine rebuild Transit wheelset Locomotive wheelset Ramp Operations New Railcars 51

52 Rich history in Africa TUNISIA 214 ALGERIA LIBYA EGYPT WESTERN SAHARA CAPE VERDE THE GAMBIA 15 GUINEA-BISSAU SENEGAL SIERRA LEONE MAURITANIA 37 GUINEA LIBERIA 25 COTE D`IVOIRE MALI 17 BURKINA FASO 3 GHANA 45 BENIN TOGO 73 NIGERIA CAMEROON 4 EQUATORIAL GUINEA SAO TOME AND PRINCIPE NIGER GABON 8 CHAD CENTRAL AFRICAN REPUBLIC 40 SUDAN ERITREA ETHIOPIA UGANDA KENYA RWANDA DEMOCRATIC REPUBLIC BURUNDI OF THE CONGO (ZAIRE) TANZANIA DJUBOUTI EMD locomotives delivered 10 MALAWI ANGOLA NAMIBIA ZAMBIA BOTSWANA 76 ZIMBABWE 10 SWAZILAND SEYCHELLES MAURITIUS SOUTH AFRICA 804 LESOTHO Estimate of delivered locomotives in Africa 52

53 Southern Africa rail drivers South Africa Increase coal volumes from 68m tons (2011) to 98m tons (2018/19) Increase iron ore capacity from 53m tons (2011) to 83m tons (2018/19) Increase capacity of general freight from 80m tons (2011) to 170m tons (2018/19) Mozambique Increase coal capacity from 6m tons annually (current) to 50m tons (2015) Zambia Increase copper production to 1,6m tons by

54 Transnet rolling stock acquisition plan 54

55 Automotive and Logistics 55

56 Automotive and Logistics Division Automotive and Logistics Division overview Barloworld Automotive (Automotive Business model) Barloworld Logistics Car Rental Fleet Services Used Vehicles & Disposal Solutions Motor Retail Southern Africa Motor Retail Australia Freight Management and Services Supply Chain Management Supply Chain Software Southern Africa Southern Africa South Africa Southern Africa Australia South Africa; Spain; Germany; Middle East; Far East Southern Africa UK; USA; South Africa; Middle East 56

57 Automotive and Logistics Division Automotive and Logistics Division overview Customers Barloworld Automotive (Automotive Business model) Barloworld Logistics Car Rental Fleet Services Used Vehicles & Disposal Solutions Motor Retail Southern Africa Motor Retail Australia Freight Management and Services Supply Chain Management Supply Chain Software Communication, HR, IT, Legal, Finance, Sustainable Development, Strategy, Empowerment and Transformation, Risk Management, Sales, Governance, Ethics and Compliance Logistics and fleet services synergies Cost efficiencies Leveraging Automotive infrastructure to achieve critical mass for growth Retain strategic focus on each business unit 57

58 Automotive and Logistics Division overview Sense of Scale General Information Employees Countries 14 Automotive Principals Avis EMEA, BMW, Chrysler,Daimler, Ford, General Motors, Suzuki, Toyota, VW/ Audi Car Rental locations >190 Wholly owned Motor Retail dealerships (SnA & Oz) 41 Key Indicators HY Mar 11 HY Mar 12 Rental Days 2.6m 3.0m New & Used retail units sold Total vehicles under management New vehicles sold per dealership per month

59 Automotive and Logistics Division overview Operational review Strong overall result in a competitive trading environment Revenue: R14.1bn (1H 11: R13.1bn) up 7.5% Record operating profit R531m (1H 11: R393m) up 35% Operating margin for the period 3.8% (1H 11: 3.0%) Operating profit (Rm) Car Rental +36% Motor Retail +27% Fleet Services +7% Logistics +511% (50) H' 12 1H' 11 Margin 8.1% 6.4% 2.1% 1.9% 13.8% 16.3% 2.2% -0.5% 59

60 Automotive and Logistics 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 Exceeding customer expectations Implementing Logistics growth strategy 60

61 Car Rental Good overall operational performance Strong growth in rental volumes Pleasing revenue per day increase in a competitive environment Operating costs well contained Further improved fleet utilisation to 76% Continued solid used vehicle profit contribution Sustained customer satisfaction above 90% Car Rental southern Africa FYTD 12 (growth) Rental days +12.4% Rental revenue per day +3.0% 61

62 Motor Retail Total South African vehicle market '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12F '13F '14F '15F '16F Passenger LCV M&HCV Source: KPMG, Econometrix 62

63 Motor Retail Southern Africa delivered a much improved result Muted activity levels Improved operating profit and margins Cost containment supported result Continued strong finance and insurance contribution Opened Soweto Toyota and Volkswagen dealerships Australia delivered a good result Activity levels improved across all departments Opened Suzuki dealership in Sydney Motor Retail FYTD 12 (growth) Southern Africa Australia New unit sales (Oct 2011 Jul 2012) +7.4% +13% Parts revenue +10% +26% Service hours 0.0% +5.8% 63

64 Fleet Services Solid result in low interest rate environment Strong financed fleet growth supported by Phakisaworld acquisition Strong growth in fleets under maintenance Stable used vehicle profits despite lower margins Ghana operations commenced trading April 2012 Fleet Services FYTD 12 (growth) Finance fleet +12% Under maintenance +21% Total vehicles under management +22% 64

65 Logistics Much improved result and positioned for growth Southern Africa - Meadow Feeds 10 year transport contract settling well - Ellerines supply chain contract progressing well - Higher volumes through Barloworld Equipment - Acquired chemical transport business effective 30 April Established Barloworld Manline Logistics JV Europe, Middle East and Asia - Rationalisation and cost control taking effect, however lower sea-air volumes continue - Secured first significant supply chain management contract in Dubai Pan Furnishers United Kingdom - Supply chain software selling well and planned upgrades all on schedule 65

66 Handling 66

67 Handling United Kingdom After growth last year, the market is now slowing Share is slightly up on LY Continued focus on major accounts Order book slightly up on LY end Short term rental utilisation slowing Business to be sold effective 30 th September 2012 South Africa Market is growing slowly but still off peak of in 2008 Market share up 2,3% points on last year Order book up 20% on LY end Good progress on major accounts Short term rental fleet has grown DX and Utilev low cost lift trucks selling well Expansion into Angola and Mozambique gaining momentum Belgium / Netherlands Market in Belgium is slowing down Market in Netherlands is 8% below LYTD Share in Belgium slightly down but profitability improved Share in Netherlands is down slightly Order book down on last year end s extremely high value in Belgium Order book up on last year end by 20% in Netherlands Short term rental utilisation has slowed Good progress on big trucks in Netherlands United States The business was sold at the end of April

68 Agriculture expansion project Excellent growth and expansion prospects Growing in Africa Mozambique up and running New retail outlet for CLAAS opened in Middelburg Growing in Siberia and Western Russia Further expansions planned 68

69 SEM This business has continued to grow albeit slower than last year s fast growth Returns exceed Barloworld targets New products being added to the product range, - Motor graders launched in Siberia - Southern Africa to follow - More to come Expanded the business to Siberia - Synergistic with Agriculture in Siberia 69

70 Handling Outlook The Eurozone debt crisis is impacting negatively on markets in UK, Belgium/Holland Drought in Siberia and parts of SA has impacted agriculture profits and stock levels Further growth in agricultural footprint being explored Business development teams addressing major new solutions opportunities Outlook for H2 is for reduced profits compared to last year as a result of the Eurozone debt crisis and the drought in Siberia and parts of SA Southern Africa Rm Order book Europe US July 2012 Mar 2012 Sep

71 Barloworld Limited Deutsche Bank Conference Investor relations contact Jacey de Gidts