Barloworld Limited: Leading Brands

Our shareholders entrust us with their capital and expect returns on their investment.

As the primary providers of financial capital, our shareholders are critical to the success of our business. Through their ongoing support, we are able to raise the financial capital necessary to grow our business and deliver on our vision.

• UK pension fund deficit
• Corporate costs
• Changing capital market dynamics driven by changes in regulation
• Fund management business models changing influenced by big data and analytics
• Increased focus on ESG matters and general reporting
• Financial results below expectation and weak demand across operations
• Challenging trading conditions and increasing accounting complexity
• Concerns around direction of capital allocations
• Misunderstanding of growth strategy, in particular the acquisition and divestment strategy
• Ingrain transaction vertical integration
• Address valuation gap benefits not obvious
• Remuneration policy and implementation

• Corporate website serves as a key information platform
• Annual and interim results presentations
• One-on-one engagements with investors and funders that includes non-executive directors
• Electronic announcements
• Attendance at industry and investor conferences
• The integrated report
• Chair meetings with investors
• Government roadshows

• Address valuation gap
• Ensure a clear view of what our intrinsic value is, and watch the stock price closely to ensure our actions maximise value for shareholders
• Drive efficiencies for non-renewable energy consumption, greenhouse gas emissions (scope 1 and 2), water usage, responsible waste disposal, and drive the uptake of renewable energy sources
• Understand rising shareholder activism, investors nervousness/pensiveness
• Participate in ESG related assessments - serve as a criteria for possible inclusion in responsible indices e.g. FTSE corporate sustainability assessment and Dow Jones

• Invest in business excellence and significantly reduce costs
• Material sustainability aspects identified, aspirational group targets set and progress monitored
• ESG aspects included in our strategic framework and related risks in our risk management approach
• Continue to review our portfolio to ensure continued resilience
• Looking at sectors that have better cash, returns and long term growth prospects than some of our current verticals
• Strategic guardrails of targeting capital light, high growth, cash generative businesses with lower asset-intensity are increasingly relevant
• Organic and inorganic high growth opportunities in emerging markets
• Demonstrable experience in the development and growth of businesses in multiple geographies including challenging territories with high growth prospects
• Recognise opportunities, but continue to exercise discipline and caution given the macroeconomic environment

Link to material matters:

• Increasing eCommerce focus
• Retail strategy
• COVID-19 complicated by economic climate
• Pricing, parts availability
• Obligations within CVAs given austerity measures and economic climate
• Price - value for money/ease of doing business/increasing lead time
• After-sales support
• Having systems and digital platforms for tracking performance of products and pre-empting maintenance requirements

• Collaboration
• Website
• Various industry platforms
• Global leaders conference - feedback elicited

• Service delays
• Contractual obligations we are expected to meet
• A group-wide programme of digital enhancement
• Regular, proactive updates to key customers, e.g. Anglo American
• Promoting integrated procurement
• Continuing to provide a great customer experience during COVID-19 restrictions
• Company reputation/image - perceived treatment of employees during COVID-19

• Expanding our digital solutions to enhance customer service and employee engagement
• Audits of retail facilities
• Service Growth Execution Plan
• Execution is the key focus
• Assessment of obligations to be met and possible deferment arrangements
• Customer feedback assessments

Link to material matters:

The relationships between our principals and Barloworld are built on trust and usually span decades.

Our supplier diversity and localisation initiatives create legitimacy and credibility in the eyes of our stakeholders.

• Operational performance
• High-performance culture
• Licence to operate
• Access to commercial opportunities, particularly for black-, and black women-owned enterprises
• Fair treatment
• Reasonable payment terms
• Enterprise supplier development
• Success story - Staza Cleaning (Siyakhula)
• Performance of various Industry Associations
• Mutually beneficial relationships

• Various forums and conferences
• Board meetings
• Website
• Other social media platforms

• Requested deferred payment from major suppliers - most are agreeable to revised terms
• After-sales focus provides significant growth opportunity in services offering
• Emerging contractor programme
• Isando development allowed scope for increasing Staza Cleaning contract

• Management is exploring future business model of the Automotive business to respond to evolving customer needs. The Integration of Avis Fleet/Rent a Car is implemented as of 1 October 2020
• Continue to work closely with Caterpillar and other principals
• Barloworld Siyakhula Incubation Hub targets, ensured continued targeting of black-owned SMMEs, who are existing suppliers within the Group, while also providing support to eligible SMMEs within our larger value chain
• Support programmes for the 30 participants in Barloworld Mbewu began in March 2020

Link to material matters:

• Diversity and inclusion
• Fair remuneration - equal pay for equal work
• Connection to the business
• Work/life balance
• Safety
• Return to work blueprint and 'new normal'
• Employee Engagement Survey
• Security of employment particularly as a result of the impending Section 189 process
• Salary sacrifices in pandemic environment for 12 months
• No bonuses
• Section 197 on some of the functions (e.g. Internal Audit)
• Pension contribution deferment for 12 months

• Transformation Empowerment Dialogues
• Engagement surveys
• Information sharing in Town Hall meetings
• One-on-one interactions between staff and line managers
• Staff events
• Intranet and electronic newsletters
• Rewards and recognition programme
• Communications from the CEO's office
• Performance reviews and exit interviews
• Internal roadshows and presentations
• Conferences and special events (farewells and year end)

• Occupational Health and Safety, Reputational risks
• Use of employee feedback to improve engagement
• COVID-19 negative impact on business resulting in retrenchments and salary sacrifice
• Challenge with operational activities as lockdown is not instituted in all territories
• A COVID-19 Response Plan has been developed, which seeks to guide employees on remote working and other health measures*
• The empowerment of women remains one of Barloworld's top priorities under the transformation umbrella
• Geared for Living Employee Wellness Programme
• Ongoing safety initiatives

• Increased diversity and inclusion weighting on divisional scorecards
• 29.3% (FY2019: 30.0%) of workforce is female (FY2020: Male: 9 127, Female: 3 778)
• Employees in South Africa by ethic backgrounds 7 318 AIC (FY2019: 9 555), 1 951 White (FY2019: 2 462) and foreign nationals 274 (FY2019: 335)
• Multi-Disciplinary teams appointed with direct reporting line to group crisis management committee
• Detailed results awaited from the survey to consider and assess required actions
• Structural changes within the Group will necessitate handovers and facilitated training to equip remaining employees
• Support for staff during volatile and uncertain times

  Limited Assurance over selected FY2020 non-financial indicators by PwC
* For our response to the global pandemic see here.

Link to material matters:

• Limit environmental footprint
• Social investment
• Community upliftment
• Contractual obligations with customers (Social and Labour plans for Mining)
• Outbreak of the COVID-19 pandemic
• CSI activities to be deferred in line with austerity measures

• Consultation
• Open dialogue
• Interaction
• CSI initiatives

• Licence to operate (contractual and B-BBEE verification)
• Reputational risks on commitments made
• Community vigilantism (destruction of equipment, buildings, etc.)
• Partner with relevant customers, NGO/NPOs, divisions and Caterpillar implementation of sustainable CSI initiatives
• Maintain or improve recycling and reuse
• Manage and where practical, limit negative impact on communities in which we operate and leverage positive impacts

• R16m (FY19: R19m)
• Discretionary funds on disaster relief efforts - goods and services worth R8.8m
• BEE transaction - 57 of the 64 properties transferred (valued at R2.4bn)

Link to material matters:

• Localisation and Empowerment legislation in southern Africa (e.g. Botswana, Namibia, Zambia and Mozambique)
• Intake of balance of 70 YES interns suspended
• Requirement to partner with SMMEs and QSEs
• Safety performance/mortality rates
• Investment - community

• Consultation and open communication
• Engagement and monitoring
• Participation in various platforms e.g. Business Unity South Africa (BUSA)
• Participation in presidents drive for foreign investment

• Financial where there is no compliance
• Reputational if commitments not met
• Loss of revenue/income
• Ongoing sanctions compliance requirements, trade policy, a new duty regime and changes to VAT requirements
• Become an influential voice in public policy space
• Proactively and constructively engage in dialogue related to local and national issues as and when they arise

• Implementation of all legislation that could impact the Group

Link to material matters: