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TRANSCRIPT
Merrill Lynch Conference
Sun City 24 – 26 March 2014
2 2
Group revenue
53%
29%
7%
7% 4%
Revenue Sept 2013
50%
28%
7%
7%
8%
Revenue Sept 2012
Equipment Southern Africa Automotive and Logistics
Handling
Equipment Europe
Equipment Russia
3 3
Group operating profit
42%
48%
0%
12%
2%
-2%
-10%
0%
10%
20%
30%
40%
50%
60%
Operating Profit Sept 2013
39%
51%
-5%
12%
1% 2%
-10%
0%
10%
20%
30%
40%
50%
60%
Operating Profit Sept 2012
Equipment Southern Africa Automotive and Logistics
Handling
Equipment Europe
Equipment Russia Corporate
Equipment Division
5 5
Caterpillar enhancing distribution model
Objectives
Strengthening the Caterpillar-Dealer model 1
Enhancing customer focus 2
Achieving superior economics for Caterpillar
and the dealer
3
Seizing opportunities / mitigating risks 4
Business overview
Equipment southern Africa
7 7
Market outlook by segment (Rm)
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Building Construction Heavy Construction Contract Mining Mining Houses
31%
34%
54%
46%
8
Xstrata – Tweefontein (2013-)
Major surface mining opportunities 2013 - 2018
Copper/Nickel Iron ore
Extract Resources – Husab
B2 Gold (2013-)
Exxaro Medupi Exp (2013-)
Jindal (2015)
Kumba – Sishen (2013-)
Exxaro – Belfast Project (2015)
FQM – Kalumbila (2014) Vedanta – KCM (2013-14)
CoAL – Makhado (2016)
ResGen – Boikarabelo (2015)
Nippon Steel- Revuboè (2015)
Vale/Rio Tinto –Tete (2013-)
Zonnebloem Xstrata (2016)
Anglo – New Largo (2017)
Coal Uranium Gold
9
Major infrastructure opportunities 2013 - 2018
Potential
Various Road Rehab
Neckartal Dam
To commence short term
17 Strategic Integrated
Projects (SIPs) developed
and approved in South Africa
Awarded and in progress
Dams, Rail, Ports, Roads
Refinery
North South Water Pipeline
Mine Infrastructure and Provincial and Municipal
Infrastructure
Mine Infrastructure
Infrastructure Backlogs
Power, Ports, Roads
and Railways
Mine Infrastructure
Rail and Dams
10 * Fully Caterpillarised former Unit Rig LMT
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
CAT
ELECTRIC DRIVE
MINING TRUCKS
UNIT RIG
ELECTRIC DRIVE
MINING TRUCKS
797F 793F 793D 789D 785D 785C
795F AC 793F AC
MT6300 AC MT5500 AC MT5300D AC* MT4400D AC* MT3700 AC MT3300 AC
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
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
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
Assembled shovel and Barloworld Equipment team on site
Total contract value
R1.3bn
14 14
Southern Africa revenue profile 2013
52%
41%
4% 3%
Revenue by line of business
New equipment sales Product support
Used equipment sales Rental
42%
26%
11%
10%
11%
New equipment sales by industry
Mining Construction
EMPR Power
Contract Mining
15 15
Southern Africa sales history
37%
30%
28% 34%
46%
36%
33%
41%
0
5 000 000
10 000 000
15 000 000
20 000 000
25 000 000
2006 2007 2008 2009 2010 2011 2012 2013
R‘000
Equipment sales Product support
16 16
● 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
Equipment southern Africa – outlook
0 2 000 4 000
SouthernAfrica
Firm Order Book (Rm)
Jan 2014 Sep 2013
Business overview
Equipment Russia
18
Commodities overview – Russia
Oil Copper Coal
Gold Aluminium Platinum
Silver Nickel Diamond
Industry value
US$448bn
Industry value
US$7bn
Industry value
US$33.3bn
Industry value
US$13.1bn
Industry value
US$8.8bn
Industry value
US$1.7bn
Industry value
US$1.4bn
Industry value
US$4.9bn
Industry value
US$4.4bn
19 19
Russia revenue profile 2013
63%
33%
2% 2%
Revenue by line of business
New equipment sales Product support
Used equipment sales Rental
71%
16%
7% 3%
3%
New equipment sales by industry
Mining Construction Power systems
Oil and gas Other
20 20
Russia sales history
25%
24%
25%
29%
36%
28%
27% 33%
0
100 000
200 000
300 000
400 000
500 000
600 000
2006 2007 2008 2009 2010 2011 2012 2013
US$ ‘000
Equipment sales Product support sales
21 21
Green field projects – surface
2015 2016 2017
Units 147 136 101
US$ 282m 313m 398m
22 22
EVRAZ Holding
Raspadskaya mine
Coal reserves – 451 m tonnes
Raspadskaya Koksovaya mine
Coal reserves – 101 m tonnes
SUEK JSC
A.D. Rubana mine Coal reserves – 40 m tonnes
Underground greenfield mining projects
Yakutsk Petropavlovsk-
Kamchatskiy
Magadan
Anadyr
Mirniy
Chita
Achinsk
Omsk
Kemerovo
Barnaul
Tomsk
Krasnoyarsk
Abakan
Novosibirsk
Region 1
Western and
Eastern Siberia
Region 2
Yakutia and
Russia Far East
UGMK
Baykaimskaya mine (underground)
Coal reserves – 68,7 m tonnes
Nerungry
MC Kolmar
Nerungryugol JSC
Inaglinskaya Mine
Coal reserves – 76,8 m tonnes
Denisovskaya Mine
Coal reserves – 64,5 m tonnes
SDS Ugol
Yuzhnaya Mine – Lutuginskiy
mine site:
Coal reserves – 40 m tonnes
EVRAZ Holding
Mezhegey Ugol
Coal reserves – 700 m tonnes
MC Sibirskaya
(Sibuglemet)
Uvalnaya mine
Coal reserves – 342 m tonnes
Depressed
coal market
delaying
investment
23 23
Yakutsk Petropavlovsk-
Kamchatskiy
Magadan
Anadyr
Mirniy
Chita
Achinsk
Omsk
Kemerovo
Barnaul
Tomsk
Krasnoyarsk
Abakan
Novosibirsk
Region 1
Western and
Eastern Siberia
Region 2
Yakutia and
Russia Far East
BAM railway
• mega project (second spur of Baikal-Amur Mainline)
• Stage: start in 2014 • $15 bn
Severo-Sibirskaya
railroad
• 2 000km (Nizhnevartovsk to Ust-Ilimsk (BAM))
• Stage: start 2016 – US$4bn
Railways Oil & Gas projects
Nerungry
Kyzyl-Kuragino
railroad • 411,7 km • 2013 - Contractor chosen –
Mostovik • US$5,57bn
Power of Siberia
gas pipeline • implem. period – 2012-
2016 • Length – over 2700 km • Cost – over $13,6 bn
Ust-Kut GPP
• 2,3 bn m3 of natural gas to be processed (INK)
• Commissioning – 2014
Kuyumba – Tayshet
oil trunk pipeline • implem. period – 2013-2016 • Length – 704 km • Cost – $3 bn
Construction/oil and gas – opportunity
24 24
● Mining order book showing downward trend
● Gold under pressure with coal market still weak
● Continued branch infrastructure development throughout the territory remains key
to growing long term market share
Equipment Russia – outlook
0 20 40 60
Russia
Order book (US$m)
Jan 2014 Sep 2013
Order book excludes EMPR orders retained
by CAT to the value of US$28.7m – VT will
receive margin via service fee
Business overview
Equipment Iberia
26 Source: IMF and Ministry of Economy Spain
GDP Forecasts
1.0%
1.5%
3.4%
0.8%
-3.8%
-0.2% -0.1%
-1.6% -1.2%
0.5% 0.9%
2007 2008 2009 2010 2011 2012 2013 2014 2015
Actual Previous forecast - Oct 2013 Current forecast - Feb 2014
Spain starting to recover
27 27
Machine Industry trend and outlook (Iberia)
0
5 000
10 000
15 000
20 000
25 000
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Un
its
28 SITECH + MYTRACTOR: 9 employees
2 388 2 363
2 146
1 954
1 665
1 482 1 428 1 423 1 407
1792
1150 1134
250 0 0
346 264 264
0
500
1 000
1 500
2 000
2 500
3 000
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
Headcount
• Headcount across the Iberian region has
been reduced by 965 employees or 40.4%
29 29 * Construction includes contract mining
Iberia revenue profile 2013
38%
35%
25%
2%
Revenue by line of business
New machine sales Product support
Used machine sales Rental
35%
14% 5%
46%
New equipment sales by industry
Mining Construction
Other Power
30
Iberia sales history
32%
30% 30%
34%
40% 37% 33% 35%
0
100 000
200 000
300 000
400 000
500 000
600 000
700 000
800 000
900 000
2006 2007 2008 2009 2010 2011 2012 2013
€ ‘000
Equipment sales Product support
31 31
● 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
Equipment Iberia – outlook
0 20 40 60
Iberia
Order book (€m)
Jan 2014 Sep 2013
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 large-
scale 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
Automotive and Logistics
35 35
Strategic positioning
Barloworld Automotive
(Automotive Business model)
Au
tom
otive
an
d L
og
istics D
ivis
ion
Barloworld Logistics
Communication, HR, IT, Legal, Finance, Sustainable Development, Strategy,
Empowerment and Transformation, Risk Management, Business Development and
Sales, Governance, Ethics and Compliance
Customers
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
• 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
36 36
Sense of scale
General Information
Employees 10 765
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 88 467 97 484
Total vehicles under management 227 019 277 164
New vehicles sold per dealership per month incl. Oz 76 83
DTS km’s travelled FY’13 75.0m
SAT tons shipped FY’13 16 333t
37 37
● 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
Operational review
+38%
+39%
+20%
+26%
0 150 300 450 600
Logistics
Fleet Services
Motor Retail
Car Rental
Operating profit (Rm)
2013 2012
7.7%
7.1%
2.5%
2.4%
16.7%
15.2%
2.3% 2.1%
Margin
38 38
● Revenue CAGR = 14%
● Operating profit CAGR = 27%
● Operating margins improved from
3.4% to 4.3%
● Balanced mix of businesses
delivers value through synergies
Integrated automotive and logistics business model delivers
2.0%
3.0%
4.0%
5.0%
0
10
20
30
40
2011 2012 2013
Margin Rbn Revenue and Margin
Revenue Margin
0200400600800
1 0001 2001 4001 600
2011 2012 2013
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
40 40
● 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%
Car Rental
-5
0
5
10
15
Rental days Rate per day Fleet utilisation Fleet size
% G
row
th
Leading indicators
Jan '14 YTD Sept '13 YTD
41 41 Source: RGT
Motor Retail
0
100
200
300
400
500
600
700
800
900
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Total South African Vehicle Market
Passenger LCV M&HCV
42 42
● 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
Motor Retail
-5
5
15
25
New units Service hours Parts revenue F & I Net profit
% G
row
th
Leading indicators
Jan '14 YTD Sept '13 YTD
43 43
● 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
Fleet Services
-5
5
15
25
Maintenance fleet Finance fleet Total fleet
% G
row
th
Leading indicators
Jan '14 YTD Sept '13 YTD
44 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
2013
Merrill Lynch Conference