LEVERAGING OUR SCALE AND ASSETS AND MAINTAINING LEADING BRANDS

Corporate

OUR OPERATING PROFILE

Centres of excellence - strategy, mergers and acquisitions (M&A), human capital, corporate affairs, finance, internal audit, risk, governance, compliance and sustainability

Active shareholder operating model - strategy, M&A, leadership and talent, responsible corporate, performance management and resource allocation

Corporate functions provide group-led strategic direction and facilitate collaboration

Duplicated functions redeployed to value adding activities within the Group

PERFORMANCE OVERVIEW

The Corporate Office primarily comprises operations of the Group headquarters and treasury in Johannesburg, the treasury and the captive insurance company in Maidenhead (United Kingdom). Southern Africa's higher operating loss of R327 million (2019: R253 million loss) largely driven by lower rental income in Barloworld and investments in corporate affairs activities and other strategic projects. Strategic projects included the implementation of the Barloworld Business System across the Group and due diligence for the acquisition of Ingrain. The UK operating loss of R115 million (2019: R156 million loss) was down on 2019 with the prior year including the once-off pre-tax R88 million (GBP4.7 million) charge to equalise guaranteed minimum pensions (GMP) within our historic UK defined benefit pension fund. This business also incurred due diligence costs for the acquisition of Equipment Mongolia.


OUR OPERATING CONTEXT IN 2020

  • Discussed here in this report

MANAGING FOR VALUE IN 2020

Similar to the operating divisions, various austerity measures were implemented to ensure fitness to support the Group while transitioning and ensuring long term sustainable value creation. The measures included a headcount reduction and containing consulting costs to key projects. Notably, the central treasury in South Africa maintained efficient funding rates for the Group.

The active shareholder model, a key strategic lever to changing the nature of the Group's operating model is in place. With the reviewed head office costs the Group continues to drive certain elements centrally while employing a more flexible resource model and driven execution through utilising divisional resources more effectively. Options around the redevelopment of Barlow Park at 180 Katherine Street precinct in Sandton are being reassessed, in line with current market conditions.

DIVISIONAL KEY PERFORMANCE INDICATORS

CORPORATE  SOUTH AFRICA  EUROPE 
2020  2019  2020  2019  2020  2019 
FINANCIAL 
Revenue (Rm) 2  1  2  1  -  - 
Operating loss (Rm) (442) (409) (327) (253) (115) (156)
Invested capital (Rm) (1 184) (674) 394  1 033  (1 578) (1 707)
Share of associate loss  -  -  (1) -  -  - 
HUMAN AND SOCIAL  -  -  -  -  -  - 
Employee headcount  112  139  101  126  11  13 
LTIFR*  0.00  0.00  0.00  0.00  0.00  0.00 
Work-related fatalities  0  0  0  0  0  0 
NATURAL 
Petrol and diesel (ML) 0.01  0.01  0.01  0.01  0.00  0.00 
Grid electricity (MWh) 375  520  349  422  27  98 
Non-renewable energy (GJ)+ 1 630  2 297  1 534  1 842  96  455 
GHG emissions (tCO2e)# 390  507  378  456  12  51 
Water withdrawals (ML)^ 2  3  2  3  0.04  0.35 
   
* Lost-time injury frequency rate = (Number of lost-time injuries x 200 000)/hours worked
+ Excludes energy from rental fleets
# Scope 1 and 2
^ Municipal sources


LOOKING FORWARD

AREAS OF FOCUS

Strategy and M&A

Capital allocation
optimisation

Performance monitoring

Talent

BUSINESS
TRANSFORMATION
FOCUS

The deployment of our
continuous improvement
programme through the
BBS is centrally led

FUTURE FOCUS

Targeted group savings
from centralisation of
key functions and the
removal of duplicated
functions throughout
the businesses

Growth through the
deployment of people
to critical areas

OPPORTUNITIES

Investment in technology
and digital capabilities
to enable growth

Targeted acquisitions
focused on growth