Economic

Management approach disclosures

Economic performance

Financial highlights included:

Revenue (Rm):  R 58 554
EBITDA (Rm):  R 4 095
Operating Profit (Rm): R 2 988
Profit Before Tax (Rm): R 2 309
Profit After tax (Rm): R 1 494
Net Profit (Rm): R 1 635
Total Assets (Rm):  R 35 810
Cash utilised  from operations (Rm): R 43
HEPS (cents): 679.7
Ordinary dividend (cents): 230 (full year)

In terms of its value-based management approach, Barloworld is committed to creating value for all stakeholders. Equally the group recognises that sustainability includes balancing the interests of all stakeholders. Direct economic value created for stakeholders is reflected in the Statement of Total Value Added, and should be considered with our enterprise development and social economic development initiatives.

Barloworld creates significant value for local suppliers, which includes OEMs and sub-contractors. This is reduced where plant and equipment can only be sourced from offshore principals, in which case we aim to spend the balance locally. This principally benefits communities in South Africa, as do our preferential procurement initiatives under the B-BBEE umbrella.

The value-added statement is designed to give the reader a full but concise understanding of how the group enhances its economic impacts in the regions where it operates.

Market presence

Specific industries in which we operate include: mining; construction; oil and gas; forestry; power; long and short-term vehicle and plant rental; distribution of vehicles; plant and equipment; agriculture; logistics management and supply chain optimisation.

Customer segments include: corporates; individuals; state; state owned enterprises; local utilities and municipalities; wholesale and retail; warehousing; ports and harbours; contractors and sub-contractors.

The group creates value by:

Providing flexible, value adding, integrated customer solutions in specific business segments:
° Equipment (earthmoving and power systems)
° Automotive (car rental, motor retail, fleet services, used vehicles and disposal systems)
° Logistics (logistics management and supply chain optimisation)
° Handling (forklift and truck distribution, agricultural equipment and SEM wheel loaders)
Representing leading global brands supported by Barloworld’s service excellence
Effectively managing our long-term relationships with global principals and customers.

The group’s exposure to the mining, infrastructure, power, agriculture, tourism and logistics sectors with above-average long-term growth potential particularly in emerging markets is the key driver in terms of establishing market presence in developing economies.

The group operates in 27 countries.

Barloworld Equipment: Andorra, Angola, Botswana, Cape Verde, China, The Democratic Republic of Congo, Lesotho, Malawi, Mozambique, Namibia, Portugal, Russia, São Tomé and Principé, South Africa, Spain, Swaziland, United Kingdom, Zambia, Zimbabwe

Barloworld Automotive and Logistics: Australia, Botswana, China, Germany, Ghana, Hong Kong, Lesotho, Mozambique, Namibia, Portugal, South Africa, Spain, Swaziland United Arab Emirates, United Kingdom, United States of America, Zambia.

Barloworld Handling: Angola, Belgium, Botswana, Lesotho, Malawi, Mozambique, Namibia, Netherlands, Russia, South Africa, United Kingdom (exited September 2012), United States of America (exited April 2012), Zambia

Indirect economic impacts

Indirect economic impacts include: employee spending, providing products and services, enhancing the image and reputation of areas, skills development and job creation that reduces demand on the fiscus and enables resources to be redirected elsewhere..

The group’s enterprise development and socio-economic development investments also create indirect value by creating employment opportunities and increasing overall economic output. Barloworld has a number of initiatives designed to bring previously disadvantaged people into the formal South African economy and its Siyakhula fund supports emerging black-owned enterprises by nurturing them into fully fledged businesses.

 

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