Barloworld Limited

1
BarloworldLimited

• Reviewed interim results for the six months
  ended 31 March 2004

2
Barloworld is an international industrial brand
management company

• 24 000 people ........... in 33 countries
• providing business solutions
• through leading industrial brands, supported by
  service, relationships and attention to detail
• to make our customers businesses excel

3
In November 2003 we said
The company is in great shape and we look
forward to making further progress in 2004.
4
H1 04 results rand highlights

• Rand revenues down 2
• Operating margins increase to 6.8
• SA 65 of segmental profits (2003 41)
• Operating cash flows up 48
• HEPS up 77 to 374 cents

See P5 of announcement for definition of
Segment Result
5
Revenue up 8 in constant currency terms
For this constant currency analysis H1 03
numbers in all regions except South Africa and
Rest of Africa have been restated at the
equivalent exchange rate used to translate the H1
04 numbers.
6
Constant currency segment results up 49
See P5 of announcement for definition of
Segment Result. For this constant currency
analysis H1 03 numbers in all regions except
South Africa and Rest of Africa have been
restated at the equivalent exchange rate used to
translate the H1 04 numbers.
7
Operational highlights

• Equipment Spain powers on
• Industrial Distribution US sales grow strongly
  with market
• Motor restructuring in full swing
• Cement and Lime efficiency improvements take
  full advantage of record cement demand
• Coatings margin growth especially in South
  Africa
• Scientific turnaround at Melles Griot

8
Acquisitive growth

• Adding more of what we have
• Avis Southern Africa (34.7 to 100)
• PPC shares (67.4 to 70.1)
• Adding territory
• Texarkana Truck Center (US, Freightliner)
• Geveke Intern Transport BV (Netherlands,
  Handling)
• Expanding business solutions
• ZA Trans (South Africa, Logistics)

9
Disposals and restructuring for value

• During the year
• Three motor dealerships in manufacturer
  rationalisation/BEE
• Henry Cooke paper business
• Melles Griot Ely facility
• Still to be finalised
• SA Equipment Leasing Book to WesBank
• 75 of Afripack to BEE consortium

10
Financial review
Clive Thomson Finance Director
11
H1 04 Income statement key issues
Rand H1 03 H1 04 change
Revenue (million) 17 915 17 532 (2)
Operating profit (million) 1 120 1 184 6
Financial instrument adjustments (million) (313) (57)
Finance costs (million) (298) (182) (61)
Exceptional Items (million) 46 159
Taxation (million) (274) (428)
Headline EPS (cents) 211 374 77
Dividend (cents) 90 115 28
12
Strong rand impacts profit translation
Average rate H1 03 H1 04 Rand appreciation
US 9.0423 6.7659 25.2
Euro 9.3408 8.2522 11.7
GBP 14.3450 11.9851 16.5
Impact of translation of offshore profits on HEPS
estimated at 16 cents
13
Comparative impact of financial instrument
adjustments
R million H1 03 H1 04
Equipment SA Other Operations (298) (15) (77) 20
Financial instrument adjustments (313) (57)
Recoupment at operating level 71 84
Impact on profit before tax (242) 27
Realised component for H1 04 R15 million
14
H1 03 25 rand appreciation v US drives
negative fair value adjustments
15
H1 04 less appreciation and greater volatility
16
Taxation rate analysis
H1 04 H1 03 FY 03
R million Reviewed Reviewed Audited
Tax per income statement 428 274 604
Prior year tax (11) 30
Tax on exceptionals (27) 11
STC (60) (59) (58)
Tax before STC exceptionals 341 204 587
Profit before exceptionals 1 048 658 1 762
Dividend income (12) (14) (30)
Profit before exceptionals and dividends received 1 036 644 1 732
Effective tax rate excluding exceptionals, STC, prior year tax and dividends received () 32,9 31,6 33,9
17
Exceptional items
H1 04 H1 03 FY 03
R million Reviewed Reviewed Audited
Profit on disposal of properties, investments and subsidiaries 64 50 123
Impairment losses (5) (4) (45)
Reversal of provision for liquidation of pension fund 100
Other (1) 3
159 45 81
18
Balance sheet March 31 2004 reflects 100
consolidation of Avis

• Total assets employed up R5 089m
• Avis acquisition and goodwill arising
• Borrowings up R4 084m
• R2 028m interest bearing debt in Avis
• R1 085m cash portion of Avis acquisition
• Balance primarily other acquisitions and
  leasing/rental growth
• Gearing targets reviewed post Avis transaction

19
Segmentation for gearing analysis
Gearing Segmentation
Trading manufacturing / dealership operations
Leasing long-term leasing solutions including
pure asset finance and long-term rentals with
maintenance ( Avis Fleet Services)
Car Rental short-term hire of vehicles ( Avis
Rent A Car)
20
Revised gearing targets and actuals post Avis
acquisition
Total debt to equity () Trading Leasing Car Rental Total group
Target range 20 40 600 - 800 200 - 300
Ratio at 31 March 2004 34 614 264 95
R1 085 million acquisition debt allocated
between Fleet services and Rent A Car in
proportion to equity

• Group target depends on asset mix between the
  three segments
• Sale of Equipment Finance book projected to
  reduce group ratio by 13 percentage points

21
Interest cover significantly improved
Interest cover (times) H1 04 H1 03 FY 03
Trading 6.6 3.0 4.1
Total group 4.6 2.4 3.1
22
Cash flow highlights

• Strong cash generated from operations of R1 472m
  (2003 R994m)
• Dividends paid R596m (2003 R711m)
• Net cash applied to investing activities of R2
  255 m (2003 R1 305m)
• Cash element of Avis acquisition (R1 085 m)
• Lease receivables/rental assets investment R623m
  (2003 R981m)
• PPC shares (R189m)
• Proceeds on disposals R184m
• 31 March 04 cash cash equivalents R1 637m
  (2003 R1 547m)

23
Operations review
Tony Phillips CEO
24
Equipment Spain maintains and market share grows
in Africa

• Spain continues high plateau
• Portugal turnaround
• Siberia profitable
• SA market share gains
• SA leasing book being sold into Smart Partnership

See P5 of announcement for definition of
Segment Result. For this constant currency
analysis H1 03 numbers in all regions except
South Africa have been restated at the equivalent
exchange rate used to translate the H1 04
numbers.
25
Equipment southern African market positive
26
Equipment order book still strong
For this constant currency analysis H1 03
numbers in Europe have been restated at the
equivalent exchange rate used to translate the
H1 04 numbers.
27
Industrial Distribution accelerating

• Europe
• Revenues rise due to Geveke acquisition
• Strong order book
• US
• Lift truck vols match H1 03 and order book
  strong
• Freightliner vols treble
• US2.9m write off in leasing book

See P5 of announcement for definition of
Segment Result. For this constant currency
analysis H1 03 numbers in all regions except
South Africa have been restated at the equivalent
exchange rate used to translate the H1 04
numbers.
28
Industrial Distribution lift truck order book
strong
NB growth cannot be projected into a volume
forecast as these are spot numbers
29
Industrial Distribution Freightliner order book
still growing
NB growth cannot be projected into a volume
forecast as these are spot numbers
30
Motor business in transition

• SA
• Good performance from smaller business
• Australia
• Demand up
• Results affected by facility rebuild
• Rest of Africa
• Corrective action on under performance
• Associates
• 100 Avis assets reflected but only 35 of income

See P5 of announcement for definition of
Segment Result. For this constant currency
analysis H1 03 numbers in all regions except
South Africa and Rest of Africa have been
restated at the equivalent exchange rate used to
translate the H1 04 numbers.
31
Motor SA motor demand up 13.9 year on year but
only 7.7 from 2002
32
Motor Avis H1 04 key performance indicators

• Rent A Car Southern Africa
• Market share maintained at 40
• Rental days up 3 to 1.79m
• Fleet of 12 455 vehicles (2003 12 804)
• Rent A Car Scandinavia
• Total rental days up 10 to 0.61m
• Fleet of 4 880 vehicles (2003 4 565)
• Fleet Services Southern Africa
• Vehicles on balance sheet 14 995 (14 577)
• Vehicles under maintenance contracts 16 950 (11
  859)

33
Cement and Lime impressive performance

• Strong domestic cement demand (15) and further
  efficiency improvements
• Zimbabwe de-consolidated
• Lime demand lower

See P5 of announcement for definition of
Segment Result.
34
Cement and Lime SA cementitious demand stronger
than anticipated
35
Coatings good result

• Efficiency improvements in all territories
• SA
• Strong decorative demand
• Rest of Africa
• matched H1 03
• Australia
• buoyant market

See P5 of announcement for definition of
Segment Result. For this constant currency
analysis H1 03 numbers in all regions except
South Africa and Rest of Africa have been
restated at the equivalent exchange rate used to
translate the H1 04 numbers.
36
Scientific on track for solid H2 turnaround

• Europe
• Weak Q1 Laboratory demand recovers in Q2
• Restructuring costs
• Melles Griot Ely sold
• US
• Laser and optics market upturn
• Benefits flow from restructuring

See P5 of announcement for definition of
Segment Result. For this constant currency
analysis H1 03 numbers in all regions have been
restated at the equivalent exchange rate used to
translate the H1 04 numbers.
37
Steel Tube set for H2 recovery

• Depressed projects demand
• Mining
• Exporters
• Low export margins
• Signs of a domestic upturn

See P5 of announcement for definition of
Segment Result.
38
Corporate Operations and Other

• South Africa
• Gain on fair value adjustments
• Good progress in Logistics business development
• Europe
• 3m charge for UK pension fund deficits

See P5 of announcement for definition of
Segment Result. For this constant currency
analysis H1 03 numbers in all regions except
South Africa and Rest of Africa have been
restated at the equivalent exchange rate used to
translate the H1 04 numbers.
39
Short term - excellent prospects for FY 04 VBM
will enhance benefit of better markets
Region Drivers for Barloworld Conditions / key issues
Southern Africa GDP/GFCF and mining Good GFCF activity (esp. cement and paint) Mining still patchy Benefits of 100 Avis (incl. profits and cash flows)
Spain Portugal Infrastructure spend and GDP Continued strength in Spain Recovery in Portugal
UK GDP and manufacturing activity UK Laboratory and Handling improving
USA GDP, distribution and manufacturing in SE Industrial Distribution margins/volumes rising Melles Griot turnaround
Australia GDP and housing Margin enhancement on higher volumes
40
Medium-term VBM foundation to structured value
creation growth strategy
2x4x4
Expand existing and new business solutions and
Smart Partnerships
More of the same in new geographies

• Add complementary brands

41
The outlook for the full year is excellent.
www.barloworld.com
42
IAS39/21 group impact
Pre IAS 21/39 IAS 21/39 Total Realised Unrealised
Inventory
Recorded at FEC blend rate Spot rate at transaction date 28 (8) 36
Operating profit
Cost of sales adjustment Cost of sales adjustment 84 93 (9)
Trade creditors/debtors
Recorded at FEC blend rate Month end spot adj (115) (102) (13)
Forward exchange contracts
Held at historical cost-nil Marked-to-market 62 28 34
Foreign currency bank accounts
Stated at month end spot Stated at month end spot 6 2 4
Other monetary items (8) 2 (10)
Total impact 57 15 42
Contra with operating profit (84)
Net income statement impact (before tax) Net income statement impact (before tax) (27)