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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)
(Share code: BAW)
(JSE ISIN: ZAE000026639)
(Share code: BAWP)
(Bond issuer code: BIBAW)
(JSE ISIN: ZAE000026647)
(Namibian Stock Exchange share code: BWL)
("Barloworld” or the “Company" or the “Group”)
Trading statement
Shareholders are referred to our voluntary business updates issued on SENS on 30 March 2020, 23
April 2020 and 28 May 2020 which provided insight into the results of our operations to March 2020
through to May 2020. These releases provided the perspectives of the board and management of
Barloworld on the unfolding COVID-19 pandemic, an update on the impact on the Group’s businesses
and the measures taken in response thereto.
We are in the process of finalising our results for the six month interim period ended 31 March 2020.
In terms of the JSE Listings Requirements, shareholders are advised that Barloworld is satisfied that
a reasonable degree of certainty exists that the financial results for the period will differ by at least
20% from the six month interim period ended 31 March 2019.
The Group’s results for the period were impacted by several factors, including:
• A challenging trading environment, characterised by continuing low business confidence,
dropping commodity prices, and depressed consumer demand. COVID-19 and the prevailing
global economic slowdown resulted in higher credit losses and impairments included in non-
operating and capital items. Operating results were also negatively impacted in the month of
March in some businesses;
• The classification of the Avis Fleet business as held for sale and discontinued operations at
31 March 2020 (reported as a continuing operation at 31 March 2019);
• The implementation of our B-BBEE deal Khula Sizwe (Khula Sizwe);
• The first time adoption of IFRS 16 Leases; and
• Higher effective tax rates driven by local currency devaluations and gains made on the sale of
properties to Khula Sizwe.
The performance of the Group was impacted by a number of impairments recognised in the period,
namely within Rent a Car southern Africa, Equipment Botswana, Zambia, Angola, Mozambique and
Malawi (BZAMM) together with impairments to our investments in NMI-DSM and BHBW. These
impairments were as a result of lower forecast cash flows impacted by the COVID-19 pandemic and
the expected slowdown in economic growth in the territories in which we operate, coupled with higher
discount rates which have increased in line with these and other macroeconomic factors. These
impairments are excluded from Headline Earnings Per Share (HEPS) however they have negatively
impacted our Earnings Per Share (EPS) in the period.
Taking into account these factors, the Group’s balance sheet at 31 March 2020 remained strong. The
Group maintained a robust cash balance with the net debt position (excluding IFRS 16) increasing in
line with operational cycles. Headroom on facilities for both the local and off-shore operations
remained substantial.
Normalised headline earnings per share from continuing operations (HEPS)
Due to the number of items impacting on the Group’s results in the current year, the Company will be
presenting normalised Group HEPS. Normalisation adjustments will be consistent with those
presented at the year-end. Specifically the costs of our B-BBEE deal Khula Sizwe will be normalised
together with an additional normalisation adjustment for the first time adoption of IFRS 16. The
Guaranteed Minimum Pension (GMP) charge incurred by our defined benefit pension scheme in the
UK in the prior period was not recurring.
Basic EPS, basic HEPS and normalised basic HEPS
The range for basic EPS, basic HEPS and normalised basic HEPS for the six months ended 31 March
2020 is expected to be as follows:
ZAR cents 31 March 2019 Expected range 31 March 2020
as reported of increase/ expected results
(decrease)
Basic (loss)/earnings per share - 438.1 (265%) to (275%) (721.8) (767.8)
GROUP
Basic (loss)/earnings per share
Continuing operations 438.1 (285%) to (300%) (810.5) (876.2)
Discontinued operations 0.0 Not applicable 88.7 108.4
Basic HEPS – GROUP 476.0 (40%) to (50%) 285.6 238.0
Basic Headline (loss)/earnings per share
Continuing operations 476.0 (105%) to (110%) (23.8) (47.6)
Discontinued operations 0.0 Not applicable 309.4 285.6
Normalised basic HEPS – GROUP 521.4 (25%) to (35%) 391.1 338.9
Notes:
1. For the six months ended 31 March 2019 Avis Fleet was reported as part of the Group’s continuing
operations. Therefore, in line with JSE guidance for this trading update, basic EPS and basic HEPS
for the six months ended 31 March 2019 presented above have not been restated in line with the
methodology Barloworld will use when reporting its results for the six months ended 31 March 2020,
which will classify Avis Fleet as a discontinued operation.
2. Normalised basic HEPS figures are the responsibility of the directors and have been presented for
illustrative purposes only. Because of their nature, normalised basic HEPS figures may not fairly
present Barloworld’s basic HEPS.
Withdrawal of earnings guidance
In light of the results to 31 March 2020, the increased uncertainty of the impact of COVID-19 and the
related global economic downturn we are withdrawing all previous guidance in respect of our future
outlook, specifically our short term targets for the Logistics business and the Group’s medium term
return on equity and return on invested capital guidance. We will continue to provide regular trading
updates to assist investors in assessing the Group’s performance and financial position during this
challenging time.
The information contained in this trading statement has not been reviewed nor reported on by
Barloworld’s independent external auditors.
The Group's results for six months ended 31 March 2020 are scheduled to be released on SENS on
or about 30 June 2020.
Sandton
12 June 2020
Equity and Debt Sponsor: Nedbank Corporate and Investment Banking, a division of Nedbank Limited
Date: 12-06-2020 08:30:00
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