Merrill Lynch Conference 14-16 March 2016 Group revenue and operating profit split – Sept 2015 2
Revenue Operating profit
47% 58%
42% 53%
Equipment and Handling Automotive and Logistics Equipment and Handling Automotive and Logistics
Merrill Lynch Conference 3
Divisional overview
Equipment southern Africa
Merrill Lynch Conference Equipment southern Africa – operational update 4
● Order book of R1.6bn at end Jan 2016 (Sept 2015: R1.7bn) ● South Africa: Northern Cape iron ore mines under pressure ● Angola: Weak oil price impacts economic activity ● DRC: Major customer suspends mining activity from December 2015 ● Other Africa territories trading in line with expectation ● Aftermarket activity remains resilient
Order book (Rm)
Southern Africa
0 1 000 2 000 Jan 2016 Sept 2015
Merrill Lynch Conference Southern Africa sales history 5
Rbn
25
20
15
10 50% 44% 41%
5 33% 36% 46% 28% 34% 37% 30% 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Product support Equipment sales
Merrill Lynch Conference Southern Africa revenue profile by line of business 6
2015 2014
5% 4% 6% 6%
39% 47%
50% 43%
New equipment Product support New equipment Product support
Used equipment Rental Used equipment Rental
Merrill Lynch Conference Southern Africa new equipment sales by industry 7
2015 2014
4% 12% 13% 26% 28% 9%
14%
21%
30% 43%
Mining Construction EMPR Mining Construction EMPR
Power Contract mining Power Contract mining
Merrill Lynch Conference Commodity mix - mining unit sales by commodity - 2012 – 2015 8
Glencore Exxaro COAL South 32 Vale
Mopani Copper Palabora Copper Manganese Platinum COPPER Vedanta DML Other Barrick FQM 2% 2% 6% Rental Namdeb 14% DeBeers Iron Ore DIAMONDS Petra Debswana 5% Catoca Gold 4% Uranium 2% GOLD B2Gold Gold One Zinc Diamonds 1% 13% Sishen IRON ORE Khumani Kolomela
MANGANESE South 32
PGM Coal PLATINUM Impala Anglo Platinum 25% Copper 13% URANIUM Rossing Uranium Swakop Uranium Contractors 13% Skorpion ZINC Rosh Pinah
Merrill Lynch Conference Surface mining project pipeline 9 Coal Copper / Zinc / Manganese Diamonds Uranium
Chitotolo / Catoca (2017) Vale – Moatize Expansion (2017)
Valencia – (Norasa) (2020) ICVL – Minas Benga (2017)
Debswana – Orapa Cut 3 (2019) Coal of Africa – Makhado (2018)
Debswana – Jwaneng Cut 9 (2018) South 32 – Wwk – VDD (2017)
Transhex – Namakwa Diamonds (2017) Sekoko – Waterberg (2017)
Tshipi Borwa (2017 – 2018) ResGen – Boikarabelo (2016)
Vedanta Gamsberg (2017) Glencore – Zonnebloem (2018)
Shanduka - Argent Project (2017) Exxaro – Belfast Project (2018)
Merrill Lynch Conference Underground mining project pipeline 10
Coal Copper/Zinc/Manganese Copper Uranium Diamonds
Assmang Black Rock (2017) Glencore Mopani (2017 - 2020) DRC ANGOLA MALAWI Platreef Project (2020) Konkola Copper mines) (2016 - 2020) ZAMBIA
ZIMBABWE MOZAMBIQUE Kgalagadi Project (2017 - 2020) NAMIBIA Palabora Copper (2016 - 2020)
BOTSWANA Palabora Copper (2016 -2019)
Lubambe Mine (2017 - 2018)
LESOTHO Venetia Underground Mine SOUTH (2020 – 2021) AFRICA PGM Maseve (2016 - 2018) Sasol Longwall (2020)
Merrill Lynch Conference Construction project pipeline 11
Malawi Various Road Projects & Angola Electricity Infrastructure Hydro-Electric Projects. Roads Rehab & New DRC ANGOLA MALAWI Mozambique Power, Road, Port and Dams Zambia ZAMBIA Various Road Projects & New Hydro Electric station Limpopo ZIMBABWE MOZAMBIQUE Various Railway NAMIBIA Line Expansions Namibia Baines Dam, BOTSWANA Road Projects Free State Polihali Dam
Botswana Eastern Cape Infrastructure and LESOTHO Wind Farm Development Water Projects SOUTH AFRICA
CAPE KZN N2/N1 & Various Infrastructure Spend, Infrastructure Projects Roads , Ports Services
Merrill Lynch Conference Mozambique | Vale Moatize project update 12
● 8 Cat 793D trucks and 1 Cat 6090 hydraulic mining shovel -approximate value US$ 42m delivered
● Vale forecast is to have a total of 90 large mining trucks by 2018 – doubling of the existing fleet. A large portion of the future fleet will be through the appointment of a
mining contractor for Moatize II Cat 6090 Hydraulic Mining Shovel loading a Cat 797F truck
● On site support structure of 110 people
● Investment of $11m in a new facility, and $37m in inventory
● The initial fleet is undergoing the first Planned Component Replacement cycle over the next 18 months - significant
aftermarket opportunity Barloworld Equipment Mozambique’s new branch in Tete
Merrill Lynch Conference Angola | CATOCA project update 13
● Catoca is 4th biggest Kimberlite Mine in the world and represents 75% of the diamond exploration in Angola
● 2016 started with delivery of the first CAT 6040 Hydraulic Mining Shovel and also the first two CAT MD6290 Drilling Rigs (Geosondas) Cat 6040 Hydraulic Mining Shovel ● On site support structure of 55 people
● Total CAT fleet on site is 58 units, including Large Dozers (D11R and D10R); OHT (777D/G); motor graders (16M and 160K) and others.
● Several machine rebuilds are planned for 2016 - significant aftermarket opportunity
Geosondas MD6290 commissioning and BWE team on site
Merrill Lynch Conference 14
Divisional overview
Equipment Russia
Merrill Lynch Conference Equipment Russia – operational update 15 ● Order book of $58.2m at end Jan 2016 (Sept 2015: $27.7m) ● Trading ahead of prior year in 1st quarter ● Gold and nickel mining still active whilst coal market remains depressed ● Construction and Oil & Gas industries under pressure ● Aftermarket revenues being maintained ● Positive cash generation due to improved working capital utilisation
Order book ($m)
Russia
0 20 40 60 80 Jan 2016 Sept 2015
Merrill Lynch Conference Russia sales history 16
$m
600
500
400
300
200
33% 46% 61% 27% 100 28% 25% 36% 24% 29% 25% 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Product support Equipment sales
Merrill Lynch Conference Russia revenue profile by line of business 17
2015 2014
1% 4% 1% 5%
34% 48%
61% 46%
New equipment Product support New equipment Product support
Used equipment Rental Used equipment Rental
Merrill Lynch Conference Russia new equipment sales by industry 18
2015 2014
8% 10% 5% 3%
10%
18%
59% 10% 17% 60%
Mining Construction Power Oil and gas Other Mining Construction Power Oil and gas Other
Merrill Lynch Conference Surface mining – medium term opportunities 19
Firm orders at 30th Sept Firm orders signed after 30th Sept Major projects / greenfields
3xR1700G 3xD10T $2.9m $2.7m
5x785C 8x777D, $10.1m D10T, 140M $9.5m
2xD9R $1.4m 6018FS $2.2m
AFC/BSL 2x6018FSD, $9.8m 14x777G, 3xD9R $23.3m
4x777D 88 units $4m $175m
Merrill Lynch Conference Power of Siberia opportunity 20
● Slow progress – expected commissioning date moving out beyond 2020 ● VT sold 13 units, value $6m to the project to date ● Potential opportunity for 2016 difficult to estimate in the current climate
Merrill Lynch Conference 21
Divisional overview
Equipment Iberia
Merrill Lynch Conference Equipment Iberia – operational update 22 ● Order book of €37m at end Jan 2016 (Sept 2015: €42m)
● General Elections held in December 2015 have pushed Spain into a period of political uncertainty which is having an effect on economic activity
● Revenue mix consistent with prior year
● Machine industry growth weighted towards small construction equipment
● Power systems activity remains solid
Order book (€m)
Iberia
0 20 40 60 Jan 2016 Sept 2015
Merrill Lynch Conference Iberia sales history 23
EURm
900
800
700
600
500
400
300
200 32% 30% 30% 34% 40% 100 37% 33% 35% 41% 44%
0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Product support Equipment sales
Merrill Lynch Conference Iberia revenue by line of business 24
2015 2014
3% 3% 16% 17%
37% 39%
44% 41%
New equipment Product support New equipment Product support
Used equipment Rental Used equipment Rental
Merrill Lynch Conference Iberia new equipment sales by industry 25
2015 2014
2% 8%
46% 52% 49% 43%
Mining Construction Power Mining Construction Power
Merrill Lynch Conference Machine industry – Spain 26
Units
• Machine industry for 2015 calendar year grows ahead of expectation • Industry weighted heavily toward small construction equipment • Despite unit industry growth since 2013, estimated Euro value of industry has remained relatively flat
Actual PY Forecast Forecast Change
Merrill Lynch Conference 27
Divisional overview
Power systems
Merrill Lynch Conference Power systems – operational update 28
• Order book of $65m at end Jan 2016 (Sept 2015: $75m) • Marine business in Iberia is holding up well and has potential to grow in SnA • Low oil price impacting new activity but resilient aftersales business • Rental to oil and gas customers in Siberia is lower but used sales stronger • Electric Power sales in SA lower than last year due to cessation of load shedding but percentage of revenue from aftersales is growing • Trading will remain challenging while oil prices and mining commodities stay low
Order book* ($m)
Power
0 50 100 Jan 2016 Sept 2015
* Included with Equipment order books by geography
Merrill Lynch Conference 29
Divisional overview
Handling
Merrill Lynch Conference Handling - operational update 30
● The severe drought continues to impact sales in Southern Africa - some rain in January has allowed farmers to plant late
● Maize prices at record highs – historically a positive leading indicator of tractor sales
● New tractor ranges from AGCO will enable us to cover more of the market in second half
● Trading in the lift truck business in SA is challenging due to the slow down in mining and the SA economy in general
● The business was restructured in December to reduce people and costs to better match the new forecast revenue levels.
Merrill Lynch Conference 31
Divisional overview
Automotive
Merrill Lynch Conference Business perspective Sense of scale 32
Barloworld Automotive provides a range of vehicle usage solutions to Car rental fleet 25 600 individuals, local and foreign corporates and governments in select African markets Leasing Fleet size 280 703
New Vehicle Units 36 360* *Incl. demos
Used Vehicle Units 59 050* *Trade and retail As at 30 September 2015
Merrill Lynch Conference Sense of scale 33
General Information
Employees* 7 563
Countries 8 Avis Budget Group, Audi, BMW, Ford, General Motors, Jaguar Land Automotive Principals Rover, Mazda, Mercedes-Benz, Toyota, Volkswagen Car Rental locations >190
Wholly owned Motor Retail dealerships (SnA)* 45
Key Indicators FY Sep ’15 FY Sep ’14
Rental Days 7.05m 6.66m
New & Used retail units sold 86 884 85 719
Total vehicles under management 280 703 307 456
New vehicles sold per dealership per month 69 73 * January 2016
Merrill Lynch Conference Integrated business model delivers sustained value 34
• Well balanced Automotive portfolio Operating profit Rm provides resilience 1800 1500 • Revenue CAGR of 11% delivers 1200 operating profit CAGR of 18% 900 600 • Operating margin of 5.3% remains 300 respectable in difficult trading conditions 0 2011 2012 2013 2014 2015 • Inter-business unit synergies including Operating profit 1H Operating profit 2H
• Used vehicle disposal solutions
• New vehicle procurement Rm Operating profit by BU 1800 • Parts and Service 1500 1200 • Finance and Insurance 900 600 • Targeted capital allocation supports value 300 creation 0 2011 2012 2013 2014 2015 Car Rental Motor Retail Avis Fleet
Merrill Lynch Conference Car Rental 35
• Sustained growth in rental days in a flat market • Improved market share through targeted growth utilising a dual brand approach • Pleasing revenue per day increase • Continued focus on operating costs • Fleet utilisation remains well controlled at 75% • Strong used vehicle profit contribution given stock shortages • Sustained customer satisfaction above 90%
• Budget brand successfully integrated Leading Indicators Jan '16 YTD Sep '15 YTD 8
6
4
% % Growth 2
0
-2 Rental Days Rental revenue p/day Fleet Utilisation Fleet Size
Merrill Lynch Conference Motor Retail 36
Total South African Vehicle Market 800
700
600
500
400
300
200
100
0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Passenger LCV M&HCV
Total vehicle market: 2016 – 572 348 (2015: 617 691) Forecast decline in market (2016) Passenger: -9% and Commercial: -3% to -5%
Source: Lightstone Auto, adapted management estimates
Merrill Lynch Conference Motor Retail 37
• Focused dealership footprint – “Fewer, Bigger, Better” Strategy continues
• 69 new vehicles sold per dealership per month (Sep’14: 73)
• Focused brand strategy aligned to overall Automotive business model
• Improved operating margin through cost containment and margin expansion
• Continue strong OEM alignment
• Acquisition of two Mercedes-Benz dealerships - Nelspruit and KZN South Coast Leading Indicators Jan '16 YTD Sep '15 YTD 10 8 6 4
2 % % Growth - -2 -4 -6 New Units Service Hours Parts Revenue F & I Net Profit
Merrill Lynch Conference Avis Fleet 38
• Finance fleet impacted by Lesotho contract non-renewal • Sustained growth in fleets under maintenance • Good profit contribution from used vehicles • Progressing growth opportunities in select African territories • Tanzania settling • Zambian start up operations • Tougher trading conditions • Competitive pricing • Customers extending fleet Leading Indicators Jan '16 YTD Sep '15 YTD 10
% % Growth 0
-10 Maintenance Fleet Finance Fleet Total Fleet
Merrill Lynch Conference Automotive outlook 39
Car Rental • Volume and revenue per day increases expected to deliver top line revenue growth, supported by the Budget brand • Productivity, fleet utilisation and cost focus will maintain return on equity above hurdle rates • Market leadership position to be maintained
Motor Retail • Difficult market conditions to continue with some resilience in certain brands • Targeted dealership acquisitions will deliver incremental profitability • Opportunities for growth being explored within broader automotive value chain • Expected decline in 2016 industry sales
Avis Fleet • Well positioned for continued organic growth • Market leadership position and strong return on equity expected to be sustained • Tanzania acquisition and Zambian start-up establishes medium term platform for growth in targeted African regions
Merrill Lynch Conference 40
Divisional overview
Logistics
Merrill Lynch Conference Operational update – Logistics 41
● Logistics trading in line with prior period ● Increased stake in Barloworld Transport ● Addition of new contracts and SmartMatta acquisition supports revenue growth ● Acquired KLL and Aspen Logistics Services multi-temperature foods logistics businesses ● Disposed of Supply Chain Software business and formed strategic partnership with Llamasoft
Merrill Lynch Conference Merrill Lynch Conference 14-16 March 2016