BWO.L Regulatory News (BWO)

Barloworld Limited

(Incorporated in the Republic of South Africa)

(Registration number 1918/000095/06)

(Income Tax Registration number 9000/051/71/5)

(Share code: BAW)

(JSE ISIN: ZAE000026639)

(Share code: BAWP)

(JSE ISIN: ZAE000026647)

(Bond issuer code: BIBAW)

("Barloworld" or "the Company")

RESULTS FOR THE SIX MONTHS ENDED 31 MARCH 2012

Salient features

- Revenue up 19% to R28.1 billion

- Operating profit up 50% to R1 282 million

- Profit before exceptional items up 84% to R829 million

- HEPS up 70% to 245 cents (H1'11: 144 cents)

- Interim dividend of 80 cents per share up 60%

- Disposed of Handling US in April 2012 for approximately R460 million

Clive Thomson, CEO of Barloworld, said:

'The financial performance for the six months showed a pleasing trend with operating profits up 50% and headline earnings per share increasing by 70% over the first half of last year. We expect the second half to show strong activity levels primarily driven by significant mining equipment deliveries in southern Africa and Russia. Automotive and Logistics will continue to perform well.

The acquisition of the Bucyrus distribution businesses in certain of our southern African Caterpillar dealership territories is currently expected to close early in the fourth quarter of our financial year.

While recognising the uncertainties created by the economic challenges in the Eurozone, overall we expect to build on the good progress we have seen in the first six months and deliver a strong result for the 2012 financial year'.

21 May 2012

Chairman and Chief Executive's report

The group delivered a strong performance in the first half with revenues up 19% and operating profits up 50% on the six months ended 31 March 2011. Headline earnings per share from continuing operations of 245 cents compared to 144 cents in 2011, representing a 70% increase.

An interim dividend of 80 cents per share was declared which is 60% above the prior year.

Operational review

Equipment

Equipment southern Africa

Revenue of R7.5 billion for the first half was 41% up on the prior period mainly driven by mining and contract mining activity.

While confidence levels in the construction industry have shown some improvement, this has not yet translated into a significant increase in activity. Revenue in Angola is well ahead of last year as government spending on infrastructure rehabilitation gains traction.

Operating profit of R689 million is 44% up on 2011 with an operating margin of 9.1% also ahead of last year.

The firm order book at March of R6.2 billion remains strong which augurs well for second half activity levels.

Equipment Russia

Revenue to March of $211 million is 21% ahead of last year which included the $60 million mining package deal to Polyus Gold. Strong revenue growth in the current year was generated by power, forestry, as well as aftersales.

March operating profit of $18.3 million (after intangible amortisation) is 61% up on the prior year with a very pleasing operating margin of 8.8%. The firm order book of $90 million is well ahead of the September level and the pipeline of projects under discussion remains strong.

Equipment Iberia

The Spanish economy has slipped back into recession and the near term outlook remains challenging due to the impact of the severe austerity measures and structural reforms.

Industry unit sales have declined further in the current year, however we continue to make market share gains. Iberia generated an operating loss of €11.1 million (2011: €7.9 million loss) which included restructuring costs of €7.1 million (2011: €6.1 million) to realign the cost base. Iberia remained cash positive to March despite the losses incurred.

The firm order book at March is dominated by three large package deals the bulk of which will be delivered in the 2013 and 2014 financial years.

Automotive and Logistics

Revenue to March of R14.1 billion was 7.5% ahead of the prior year. All segments produced improved operating results with total operating profit increasing by 35% to R531 million.

Car rental

Rent a Car revenue for the period was 8% ahead of the prior year. This was driven by a 15% growth in rental days and a 4% increase in revenue per day. Fleet utilisation further improved to 76%. Operating profit was pleasingly 36% ahead of last year.

Motor retail

Total South African new vehicle sales for the first quarter of 2012 show an increase of 6% compared to the prior year driven by an estimated 8% growth in passenger vehicles for the period. In Australia new vehicle sales for the first quarter have improved by 5%.

Motor retail revenue for the first six months of R9.6 billion showed an 11% increase on 2011. The operating profit of R206 million for the period is 27% up on last year with the operating margin improving from 1.9% to 2.1%. Both southern Africa and Australia performed well.

Two new motor dealerships were officially opened in Soweto. This joint venture with respected entrepreneur Dr Richard Maponya is of historic importance, as these are pioneering dealerships in Soweto and represent a significant growth opportunity for the group.

Fleet services

Fleet services delivered a solid performance with operating profit increasing by 7% to R144 million. The fleet under finance grew by 14% in the period mainly as a result of the consolidation of Phakisaworld following the acquisition of the remaining 50% shareholding with effect from January 2012.

Logistics

The logistics business delivered a strong turnaround with operating profits of R37 million compared to a loss of R9 million in the prior period. The southern African business performed well while the international businesses also improved.

Handling

Activity in the division was 13% ahead of the prior year with revenue of £224.4 million. The operating profit of £2.3 million is in line with last year with good performances from Handling US, UK, Belgium and South Africa while Netherlands was down.

The agriculture operations also showed an improvement in trading despite slightly higher losses from the start-up operations in Siberia. Recent drought conditions in South Africa as well as product availability problems negatively impacted trading towards the end of the period.

Corporate activity

We continue to evolve the corporate strategy in a direction which results in the allocation of capital to the opportunities with the highest financial returns.

Negotiations are at an advanced stage with Caterpillar Global Mining LLC in respect of the acquisition of the Bucyrus distribution businesses for certain of our existing Cat dealership territories. Upon completion of the acquisition, Barloworld expects to begin providing sales, service and support for all of the former Bucyrus mining products in all our dealership territories in southern Africa. This transaction will significantly enhance the range of surface and underground equipment solutions we will be able to provide to the mining industry. The legal and due diligence process in southern Africa is nearing completion and integration teams are currently evaluating the most effective systems solutions for the integrated businesses. We expect to be able to make a formal announcement on this transaction in the near future and it is anticipated to close, subject to regulatory approvals, early in the fourth quarter of our financial year. We will then work to finalise the acquisition of a portion of the Bucyrus distribution business in Russia, which will be concluded as a separate transaction.

Within the Automotive and Logistics division we have made some niche acquisitions including Avis Coach Charter, Dreamworks (a fuel management company) and post March, Ecosse (a specialised chemical transporter). We have also acquired the remaining 50% shareholding in our fleet services joint venture, Phakisaworld.

The sale of the US Handling business to Briggs and LiftOne was concluded at the end of April. The purchase consideration approximated tangible net asset value and realised approximately US$60 million in cash for the group.

Empowerment, transformation and sustainable development

Barloworld again achieved first position in the general industrial sector of the Financial Mail's 2012 top empowerment companies survey. We have held this position for the past three years. In addition, we were ranked 12th overall in 2012, previously being 18th and 21st in 2011 and 2010 respectively.

Barloworld Limited and all but one of our business units currently have a Level 2 BEE rating. In order to remain a leader in empowerment and transformation, the group target is to maintain the B-BBEE status of Level 2 or 3 notwithstanding the increased thresholds and new standards that came into effect early this year.

We continue to make good progress on our various sustainable development objectives including energy and greenhouse gas emissions efficiency improvements, water conservation and recycling. Safety remains a primary focus area in all our operations.

Directorate

Mr MJN Njeke and Justice SAM Baqwa resigned from the board on 29 February and 10 May 2012 respectively. Mr Njeke was appointed chairman of a major South African insurance company while Justice Baqwa was appointed a permanent judge of the North and South Gauteng High Court of South Africa.

Ms B Ngonyama and Ms NP Dongwana were appointed as non-executive directors of the board with effect from 1 May 2012. In addition Ms B Ngonyama was appointed a member of the audit committee from that date.

Outlook

While the Chinese growth outlook has moderated, commodity demand remains strong. The Equipment southern Africa firm mining order book is at record levels and we are therefore projecting a strong second half for 2012. While the lead times for mining equipment remain tight, we have secured production slots with Caterpillar to meet our customers' future delivery requirements.

Construction activity in South Africa continues to show a slow recovery. Recent government infrastructure spend projections in SA are positive but have yet to materialise into activity for our industry. Increasing infrastructure spend in Angola will have a beneficial impact on our short-term results.

In Russia the strong activity levels experienced in the first half are expected to be exceeded in the second half. This is underpinned by a strong firm order book driven by continued demand for commodities and a growing domestic economy. The pipeline of projects in Russia is strong with a high probability of being converted into firm orders.

We are unlikely to see any meaningful improvement in the Spanish economy in the near term but will benefit from cost savings in the second half as well as some machine deliveries from the package deals. While some further limited rationalisation is likely to be undertaken before financial year end the significant restructure costs incurred in the first half will not reoccur.

The automotive industry in SA may see some slowing in the balance of this year as consumers face up to increased fuel and energy prices, increased inflation and the threat of rising interest rates in the latter part of the year. We nonetheless project continued improvement in profitability in the second half.

In Logistics, our southern African business has seen good volume increases in certain key contracts and has benefited from a number of cost saving initiatives. Several complementary business opportunities to increase activity levels are currently under consideration and the overall business is expected to show continued progress.

Our materials handling businesses should show limited on-going improvement notwithstanding slowing order intake as a result of the Eurozone debt crisis.

We expect the second half of the financial year to show strong activity levels primarily driven by significant mining equipment deliveries in southern Africa and Russia. Automotive and Logistics will continue to perform well. The acquisition of the Bucyrus distribution businesses in certain of our southern African Caterpillar dealership territories is currently expected to close early in the fourth quarter of our financial year. While recognising the uncertainties created by the economic challenges in the Eurozone, overall we expect to build on the good progress we have seen in the first six months and to deliver a strong result for the 2012 financial year.

DB Ntsebeza CB Thomson

Chairman Chief Executive Officer

Group financial review

Revenue for the six months increased by 19% to R28.1 billion. The improvement on last year was mainly driven by increased activity in mining in Equipment southern Africa and Russia and the motor retail businesses.

Earnings before interest, taxation, depreciation and amortisation (EBITDA) increased by 30% to R2 244 million while operating profit rose by 50% to R1 282 million. Operating profit in Equipment southern Africa and Russia improved by R211 million (44%) and R66 million (85%), respectively. The combined Automotive and Logistics division recorded improved profits of R531 million, up by 35% largely owing to a return to profit in the logistics business and increased margins in car rental and motor retail.

Restructuring charges of R73 million (€7.1 million) were incurred in Equipment Iberia where trading conditions remained difficult. The increase in the company's share price since September 2011 resulted in a charge for the six months of R118 million (1H'11: R64 million) in respect of cash-settled Share Appreciation Rights previously awarded to employees. A change in the statutory measure of inflation for the UK pensioner increases reduced the company's pension fund liability in the period giving rise to a once-off benefit to operating profit of R74 million (£6 million).

Increased trading activity and rand volatility contributed to higher foreign currency contract costs and negative fair value adjustments in Equipment southern Africa and the South African handling and agriculture businesses.

Net finance costs of R348 million are in line with last year. This was mainly due to lower short-term interest rates despite higher average borrowings during the period.

Exceptional charges of R26 million mainly relate to the impairment of intangible assets in the US Handling business which is now held for sale.

Taxation, before Secondary Tax on Companies (STC), increased by R200 million to R343 million. The charge includes the impairment of the deferred tax asset in Handling US (R61 million). The effective taxation rate (excluding STC, prior year taxation and taxation on exceptional items) was 34.5% (1H'11: 32.7%). The effective rate was negatively impacted by the decision not to raise further deferred tax assets relating to losses in Spain.

Income from associates of R31 million mainly comprises the contribution from the equipment joint venture in the Democratic Republic of Congo.

Headline earnings per share (HEPS) increased by 70% to 245 cents (1H'11: 144 cents).

Cash flow and debt

Improved activity mainly in Equipment southern Africa and Russia has led to increased investment in working capital. This, coupled with growth in leasing assets and the short-term vehicle rental fleet, has led to an outflow of funds in the period of R3 462 million.

Total interest-bearing debt at 31 March 2012 of R9 109 million represents a group debt to equity ratio of 73% (September 2011: 57%). Short-term debt represents 34% of total debt. No material long-term debt falls due for repayment this year or early in 2013. The company issued two corporate bonds on the domestic capital markets in April raising R760 million. These bonds are repayable in 2015 and 2017. The proceeds were utilised to repay short-term debt.

Net interest-bearing debt at 31 March 2012 totalled R8 056 million (September 2011: R4 489 million). This represents a net debt to equity ratio of 65% (September 2011: 36%).

Gearing in the three segments are as follows:

The company's credit rating of A+ (Stable Outlook) was re-affirmed by Fitch Ratings in February 2012.

Total assets employed by the group increased by R1 583 million in the six months to R32 515 million.

Going forward

Deliveries of inventory to customers in the mining sector in the second half of the year will see a reduction in working capital by year end. We have secured bridging finance for the proposed Bucyrus transaction in South Africa and plans are well advanced to secure the necessary offshore funding for the balance of the transaction. The proceeds on disposal of the US Handling assets in April generated net cash of approximately $60 million which will be used to reduce debt and partly fund the Bucyrus offshore acquisition.

We continue to focus on improving our returns by maintaining strict discipline over the allocation of capital and releasing capital from underperforming businesses. Further improvement in our returns is expected this year.

DG Wilson

Finance Director

Operational reviews

Barloworld Equipment southern Africa produced a strong result, driven largely by mining and contract mining. South Africa, Angola, Mozambique and Botswana produced excellent growth in profitability, due largely to the increased demand for machine sales and parts and service, to support the large and growing installed Cat machine population.

The R250 million Remanufacturing Centre in Boksburg, which will double our component rebuilding capability, was opened on 3 May by Caterpillar Chairman and CEO Doug Oberhelman. This event coincided with the celebration of the 85th anniversary of Barloworld's partnership with Caterpillar. Leadership development and technical training remain a key sustainability focus and we continue to aggressively drive a culture of sound environmental health and safety for all stakeholders in our business.

The firm order book in southern Africa stands at more than R6 billion and increases in new machine market share are providing a solid base for future after sales growth, particularly in the mining sector.

Iberia continued to weather the effects of growing uncertainty in the Eurozone. Both Spain and Portugal have slipped back into recession as their governments address budget deficits with severe austerity measures. This has led to a further reduction in the new machines market, leaving the total Iberian industry at a fraction of what is considered to be normalised levels.

Our Iberian management team continued to focus on extending our market leadership position, cost control and asset efficiency. Actions taken included further staff reductions at a cost of €7.1 million, the closure of unprofitable facilities, and a significant reduction of the rental fleet. Deliveries commenced on the large package deals reported in the previous year. However, in the case of one large Spanish mining customer, certain orders are likely to be deferred from 2013 to 2014 due to a reduction in coal subsidies.

The Russian business produced a record result with $211 million in revenues and $18.3 million in operating profit. The outlook for the full year remains positive with the current order book of over $90 million.

The mining sector continues to be the primary driver of the Russian revenue performance, supported by the construction and power segments. Strong growth in aftermarket revenues continued to be driven by the ongoing increase in our installed Caterpillar machine population.

Facility development to support our customers throughout the territory remains a priority with construction in Irkutsk, Krasnoyarsk and Magadan progressing well.

The division produced a strong result in a competitive trading environment. The operating margin improved to 3.8% from 3.0% in the prior period. The division generated good positive operating cash flow, which was reinvested into operating assets. Despite a modest 7.5% growth in revenue, overall operating profit improved by 35%.

Avis Rent a Car southern Africa performed well, improving operating profit by 36% despite difficult trading conditions. The business further improved its high fleet utilisation, grew rental day volumes and increased revenue per rental day.

The southern African motor retail operations delivered a much improved result. Improved margins, cost containment and a strong finance and insurance contribution supported the result, while service hours were marginally lower than the prior period. The Australian operations continued to perform well.

Avis Fleet Services produced a good result in the current low interest rate environment. The remaining shares in Phakisaworld Fleet Solutions were acquired during the period and the business consolidated with effect from January.

The logistics business has improved on the back of focused management actions. New contracts awarded in southern Africa supported the result. Overall volumes and margins remain under pressure in the international businesses, however opportunities to improve the mix of business continue to be progressed.

Associates include our Soweto and Sizwe BEE joint ventures which performed in line with expectations. The Soweto Toyota and Volkswagen dealerships will take time to mature in this developing market.

The market for new forklift trucks grew in all our territories but at a slower pace than last year. UK, Belgium and Netherlands in particular have slowed largely as a result of the Eurozone debt crisis. Revenue grew in all businesses apart from the UK which was flat compared to last year. Orders on hand at the end of March were flat against last year-end, but 7% higher than March last year. Margins continued to show growth driven mainly by improvements in used, service and short-term rental though rental utilisation has moderated over the last quarter in the European operations.

Trading profit was up in all operations apart from The Netherlands with currency movements impacting the southern African operations. Overall operating profits are similar to last year. Market shares improved in the UK, Belgium and Agriculture.

Agricultural sentiment improved and the increased availability of low-cost tractors has bolstered sales and market share; however, drought conditions in certain parts of South Africa since March led to a pause in demand. The new agricultural operations in Mozambique and Siberia both incurred start-up losses but future prospects remain bright. The SEM activity in South Africa again showed growth and the product line was introduced to Siberia and Mozambique.

While the division continued to exercise tight control over the asset base, stock levels were increased to ensure adequate stock for anticipated sales growth in the second half and in the face of possible product shortages from some OEMs.

After a strategic review that showed the returns from the Handling business in the US would not reach group hurdle rates in the near term, the business was sold at the end of April, generating some US$60 million of cash for the group.

The trading outlook for the remainder of 2012 is marginally positive notwithstanding slowing order intake as a result of the Eurozone debt crisis.

Corporate comprises the activities of the corporate offices, including the treasuries, in South Africa and the United Kingdom. In southern Africa the operating loss has increased due to higher provisions required for cash-settled share appreciation rights previously awarded to staff, following the rise in the company's share price since September 2011. In Europe a change in the statutory measure for inflation on UK pension increases reduced the company's pension fund liability in the period giving rise to a once-off benefit to operating profit of R74 million.

Dividend declaration

Dividend number 167

Notice is hereby given that interim dividend number 167 of 80 cents (gross) per ordinary share in respect of the six months ended 31 March 2012 has been declared subject to the applicable dividends tax levied in terms of the Income Tax Act (Act No. 58 of 1962)(as amended) (the Income Tax Act).

In accordance with paragraphs 11.17 (a) (i) to (x) and 11.17(c) of the JSE Listings Requirements the following additional information is disclosed:

- The dividend has been declared out of income reserves;

- Local dividends tax rate is 15% (fifteen per centum);

- Gross local dividend amount is 80 cents per ordinary share;

- Net local dividend amount is 68 cents per ordinary share;

- Barloworld has 230 934 823 ordinary shares in issue;

- There are no Secondary Tax on Companies (STC) credits utilised.

In compliance with the requirements of Strate and the JSE Limited, the following dates are applicable:

- Dividend declared Monday, 21 May 2012

- Last day to trade cum dividend Friday, 8 June 2012

- Shares trade ex-dividend Monday, 11 June 2012

- Record date Friday, 15 June 2012

- Payment date Monday, 18 June 2012

Share certificates may not be dematerialised or rematerialised between Monday, 11 June 2012 and Friday, 15 June 2012, both days inclusive.

On behalf of the board

B Ngwenya

Group company secretary

Condensed consolidated income statement

Condensed consolidated statement of comprehensive income

Condensed consolidated statement of financial position

Condensed consolidated statement of changes in equity

Condensed consolidated statement of cash flows

Notes to the condensed consolidated financial statements

Operating segments

Operating segments (continued)

Operating segments (continued)

Operating segments (continued)

Operating segments (continued)

Salient features