Barloworld Limited Interim Results

1
Barloworld LimitedInterim Results

• for the six months ended31st March 2009

11 May 2009
2
Overview

• Clive Thomson
• CEO, Barloworld Limited

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Highlights

• Revenue increased 6 to R22 514m
• Cash generated from operations up 26 to R1 195m
• Operating profit before restructuring charges
  decreased 12 to R1 159m
• Strong performance from Equipment southern Africa
• Automotive delivers good result in difficult
  markets
• Decisive action taken to reduce cost base in
  international operations
• Further improvement in debt maturity profile
• Interim dividend of 40 cents per share

4
1H 09 operating profit (Rm)
-21
3
-55
-27
1H 09
1H 08
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Economic backdrop

• Global financial crisis severely impacting credit
  markets and real economies
• Global economic growth will be negative in 2009
  for first time in post war period
• Major developed economies already in deep
  recession (US, Japan, Eurozone)
• SA economic growth will be significantly impacted
  by global slowdown
• Lower commodity prices impacting mining expansion
  plans

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Managing through the cycle
Expense management
Capital expenditure management

• Major expense reduction initiatives implemented
• Significant headcount reductions implemented or
  in progress includingIberia (402) Handling
  Europe (228)and Handling US (48)
• Annualised savings of R210m

• Reprioritisation of capex spend and deferral of
  non-essential projects (R740m)
• Focus on optimising rental and leasing fleets
  (R134m cash generation compared to R856m cash
  utilisation in 1H 08)

Working capital management
Cash flow management

• Management of inventory pipeline with principals
• Intensification of credit control and debtor
  collection processes
• Net investment in working capital of R777m (1H
  08 R1 640m)

• Cash generated from operations after working
  capital up 26 to R1 195m
• Net cash applied to investing activities
  reduction to R595m compared to R1 300m in 1H 08

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Financial Review

• Don Wilson
• Finance Director

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Income statement highlights
9
Exchange rate impact

• Income statement
• Impact benefit of 17.8 cents per share (9)

• Balance sheet
• Impact increase in net assets of R640m

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Balance sheet highlights
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Cash flow highlights

• Cash generated from operations up 26 to R1 195m
  (1H 08 R945m)
• Cash applied to investing activities R595m (1H
  08 R1 300m) includes

• Total dividend payments R358m (1H 08 R414m)

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Net cash investment in working capital
13
Segmental gearing

• Group segmental gearing ratios are as follows

• We forecast Trading gearing to be within target
  range by September 2009 and overall gearing will
  decline
• Figures include Avis Scandinavia

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Debt maturity profile

• Further improvement of debt maturity profile
• The ratio of long-term to short-term debt has
  improved to 6337 (September 2008 5743)
• Seven year bond of R750m issued in October 2008
• Five year term funding of R700m raised
• The group has R7.5bn confirmed unutilised
  facilities available for future use

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Divisional Overview

• Equipment

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Equipment southern Africa

• Southern Africa
• Delivery of order book for mining and
  construction sectors contributed to good results
• Diversity of country risk, commodity exposure and
  business model proves sustainable
• Angola continues to outperform
• Skills training remains a focus with the
  construction of the R180m training centre in
  Isando

Margin
Operating profit (Rm)
12.4
37
10.8
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Commodities Major Mining projects
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Mining - machine sales by commodity
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Developing coal reserves in Mozambique

• Contract awarded2010 start
• 5 year contract
• 116m units
• 72m MARC

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Significant infrastructure projects
Potential
Awarded and in progress
To commence short term
Major roads upgrade
Luanda Bay Airport 4.5bn
Dams and roads
National Re-hab 30bn
Power, roads and railways 14bn
Hydro electric schemeand railways 12bn
Power Station Laphalale R5.2bn
Roads RCC and Raubex R1bn
Fuel pipeline R2bn Spie/Group 5/WK JV
Dam and power station R5bn - CIC
Power StationMedupi and Kusile
Gauteng freeways R18bn
Hydro ElectricBraamhoek R1.6bn WBHO
Gautrain R28bn Bombela
2010 Soccer stadiums
King Shaka Airport R8.1bn WBHO/GROUP5
Durban Harbour upgrade R2.55bn GROUP 5
Coega Phase 2
Cape roads - R300, City I/T, N1, N2 Grabouw
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Key construction projects Angola
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Equipment - Iberia

• Iberia
• Overall construction equipment industry declines
  by 65
• Early and decisive action taken to re-align cost
  base
• Operating cost direct cost reductions
• Headcount reduction of 402 (7.3m redundancy
  cost R95m)
• Annualised cost saving of 9m (R114m)
• Significant market share gain (gt5 percentage
  points) entrenches leadership position
• 51m (R578m) positive cash generation due to
  intense working capital focus

Margin
Operating profit (Rm)
1.6
-85
7.8
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Industry sales construction equipment
Spain calendar 2008
Europe calendar 2008

• 1st quarter -20
• 2nd quarter -60
• 3rd quarter -75
• 4th quarter -85

• 1st quarter 0
• 2nd quarter -10
• 3rd quarter -35
• 4th quarter -50

-65
-25
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Total construction machine market - Spain
2009forecast

• Our Spanish business has outperformed the market
  trend through improved market share
• Disciplined sales force and increased deal
  participation in markets

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Spanish GDP decline has bottomed- delayed
recovery
Bank of Spain, April 2009
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Spanish government stimulus plan

• Stimulus budget approved will monitor time to
  market
• Further 8bn emergency plan (Plan E) to encourage
  local councils to undertake works and investments
  - should support our rental and small machine
  business

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Equipment Siberia

• Revenue down 9 on prior year
• Mining activity held up by gold projects
• Slowdown in construction and power segments
• Expense reduction plan to realign cost base
• Opportunity in forestry segment

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Order books equipment (Rm)

• US257m in orders placed on Caterpillar, 31
  March 2009 (Sep 08 986m)

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Divisional overview

• Automotive

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Automotive

• Revenue R8.3bn (Mar 08 R8.1bn)
• Integrated Motor Vehicle Usage Solutions offering
  resilient and delivered a good result in
  difficult trading conditions
• Operating profit R320m (Mar 08 R310m)
• Improved overall margin to 3.9 (Mar 08 3.8)
• Strong positive cash flow (R206m positive vs
  R962m absorption in 1H 08)

Margin
Operating profit (Rm)
18.8
-10
20.8
1.8
42
1.3
0.9
-64
2.4
9.7
59
7.2
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Automotive Car Rental

• Southern Africa
• Improved rate per day and increased fleet
  utilisation
• Used vehicle contribution supported operating
  margin
• Facility investment at key locations secures
  future growth
• R275m positive cash generation
• Scandinavia
• Disposal progressing to plan
• Reduced fleet and improved utilisation
• R190m positive cash generation

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Automotive Motor Retail

• Motor Retail Southern Africa
• Good result in difficult market
• Fewer, Bigger, Better approach continues to
  support the overall business model
• Focused used vehicle initiatives mitigate
  declining new vehicle sales
• Improved contribution from after-sales activity
• NMI-DSM consolidated for full period
• Appropriate dealer network
• Subaru 50 disposal completed
• Motor Retail Australia
• Softer market conditions impact result
• Start up costs - Bayside operations

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Automotive Fleet Services

• Strong overall improvement in profitability
• Sustained profitable fleet growth continues
• Benefits from past contracts won

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Divisional overview

• Handling

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Handling

• Southern Africa
• Lift truck market slowing
• Agriculture maintains excellent performance
• Results boosted by forex gains
• Europe and US
• Belgium and Netherlands worst affected by market
  downturn but still profitable
• UK produced a loss in a declining market
• US produced a loss but growing market share in a
  difficult market
• Further restructuring to remove costs

Margin
Operating profit (Rm)
93
16.8
8.9
-1.8
2.3
-2.0
1.8
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Handling order books (Rm)

• Southern Africa
• Agriculture order book down due to faster
  deliveries
• Lift truck order book down from last year
• Europe
• UK is down, but largest drop is in Belgium and
  Holland
• US
• Slight reduction despite growing market share

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Divisional overview

• Logistics

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Logistics

• Africa
• Some organic growth but affected by lower
  industry volumes
• Received preferred bidder status for Supply Chain
  Managementcontract with one of SAs largest
  furniture retail groups
• Europe, Middle East Asia
• Europe impacted significantly by lower trading
  volumes, expected to continue throughout 2009
• Significant reduction in trade flows results in
  lower than expected profits in Middle East

Margin
Operating profit (Rm)
-16
3.1
6.4
-0.1
2.7
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Attractive investment case

• Clear vision
• Market leader integrated solutions in
  distribution, rental, fleet management, logistics
• Strategic focus
• Four core divisions Equipment, Automotive,
  Handling and Logistics
• Leading international brands
• Caterpillar, Hyster, Avis and leading automotive
  brands
• Geared to fixed investment
• Exposure to infrastructure and mining
• Business and geographic diversity
• 42 countries
• Strong balance sheet
• Strong operational cash flows and 63 of debt in
  long-term
• Experienced management team
• Robust and adaptable Barloworld people at all
  levels

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2009 outlook
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2009 outlook
The overall trading environment in the second
half is expected to remain difficult. In these
circumstances we will retain our focus on cash
flow generation through operational efficiencies
and expense reduction, working capital
improvement,streamlining capital expenditure and
optimisation of rental and leasing fleets. These
initiatives will result in strong cash flow for
the full year which will reduce debt and
strengthen the group balance sheet. Furthermore,
we expect to entrench our positions of market
leadership through product and service
excellence. This will ensure that we are well
placed to weather the economic downturn and
position ourselves for long-term success as the
external environment improves. CEO, 11 May 2009
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Barloworld LimitedInterim Results

• for the six months ended31st March 2009

11 May 2009