Barloworld Limited

and welcome to Bala World's annual results presentation for the year 2024. My name is Khao Gelo Lugwabe Komari, and I'm very proud to welcome you to our results and also to introduce our executive team led by Mr. Dominique Sewela. Apologies, ladies and gents. It seems like we've got a technical issue which should be resolved in a few seconds. I was pressing the wrong button. Anyway, so back to the results. As I said, Mr. Dominic Suella will take us through the group highlights. He will be followed by Ms. Nopasika Leela, our group financial director, who will provide the financial summary. First up in the industrial equipment and services pillar is Ms. Andronika Masemola, who will deliver results for Equipment Southern Africa, and she will be followed by Mr. Emiliaka, who will provide results for Eurasia. Mr. Chris Varenga will take us through results for InGrain, which falls within our consumer industries pillar. Thereafter, Dominique will wrap it up by providing a strategy update and give an outlook for the year 2025. We'll take some time to address any questions that you may have, and you're welcome to post them on the line. Without much further ado, I'll hand over to our Group CE, Mr. Dominique Sowela.

Thank you, KJ. Good morning, ladies and gentlemen. Once again, welcome to the results presentation for the year ended September 2024. As per usual, I always open up with a presentation of our review of the contribution to the environment and the societies in which we operate, starting with the environment. In 2022, we set an ambitious target. of improving our consumption metrics by 15% by 2027. These targets are in respect of non-renewable energy consumption, scope one and scope two greenhouse gas emission and municipal and borehole water withdrawal. We have implemented several environmental initiatives as we work towards meeting these targets. In 2024, we increase our renewable energy consumption as we continue to invest in our solar PV capacity. We celebrated the opening of our Pakalani facility in Botswana, which is EDGE advanced certified in accordance with the global standards developed by the IFC for green building. On diversity and inclusion, our corporate profile closely resemble the world we operate in. We surpassed our goal of having at least 50% women representation in leadership, and we continue to transform our workforce to resemble the demographics of the populations we serve. In 2024, we continue to advance our holistic employee well-being program, where we have expanded our definition of safety and wellness to include psychological safety and mental well-being. I'm proud of the impact of our corporate social investment programs. Our effort towards social entrepreneurship, economic development, and inclusion were recognized through Mbe'u receiving the CSI Legacy Best Award Corporate Award for 2024. Siakuna contributed $16 million to fund 46 beneficiaries as part of our enterprise and supply development program. The multiply effect of our contributions provided 896 individuals with such needed employment opportunity. We continue to address the challenges of youth unemployment through our group-wide young talent program, apprenticeship, internships, and lendership. Our board is a custodian of corporate governance and it shows that Baloworld has sound governance structures in place. The board is appropriately balanced in terms of knowledge, skills, experience, diversity, and most importantly, independence. However, we are disappointed to learn of the potential export control bridges in our division at VT. As indicated, we filed a notification of self-disclosure to BIS on a voluntary basis. We expect to complete this filing by the 3rd of March 2025. In 2023, I did caution against an expected slowdown in business activity, driven not only by cyclicality of the equipment, South Africa business, but also other factors which led to the constrained trading environment. Our results for 2024 bear testament to the effectiveness of our fixed, optimized growth strategy in navigating these challenges. Our portfolio diversification and strategy execution through the valuable business system has enabled us to weather the volatile macroeconomic backdrop. We indicated at the beginning of the financial year that we would focus on reducing our interest-bearing obligations, including normalizing the utilization of our floor plan facilities. I'm pleased to report that we reduced gross debt by 29%. We totally removed the UK Pension Fund exposure from our balance sheet. In this regard, we made a final payment of 27.2 million British pounds to the Barlow World UK Pension Fund. Our revenue declined by 7% to 41.9 billion, and yet we maintained our EBITDA margin. The respective CE will provide further details thereon. Although ROIC has dipped from a prior year, it remains above our cost of capital. Our HEPs at 1,022 cents per share declined by 12%, and Missoula will provide more color with regards to the normalization of HEPs. I mean, there's certain specific events that are not gonna be repeating in the following year. I'm confident in our liquidity position and positive that the consistent execution of our strategy will be sustainable going forward. I'm pleased to announce that the board has approved a final dividend of 310 cents per share, representing a total dividends of 5.20 per share in respect of 2024 financial year. This represent 4% growth relative to prior year. I'll hand over to Ms. Lira to take us through the financial overview. Thank you, Ms. Lira.

Good morning, ladies and gentlemen, and thank you, Mr. Suela. Thank you for joining us in these results presentations for the period ended September 2024. Resilient performance in tough business environment. If you will allow me to focus on normalized performance for the group, And this is before taking into account the extraordinary items that will not repeat, being the $10 million in Mongolia for the earn out. And this is indicative of great performance coming from that territory. Also, provisions for VAT amounting to 26.7 million. This is also in dollars. Also, an extraordinary item not to repeat. Taking these two items out, you will observe that we delivered exceptional results. EBITDA up 9%. Operating profit from core trading activities up 3%. ROIC up 2.3% at 19%, ROE 2.6% at 15.5%, and then on the HEP side up 21% at 13.98%. Moving on to the income statement, our overall revenue reduced by 7%, and this is owing to Barlow World Equipment Southern Africa revenue reduction as well, and that was set off by the great performance coming through from Eurasia. The Eurasia revenue was as a result of the Mongolia that increased by 69% in this financial year. And this was bolstered by the strong economy in Mongolia. We maintained our EBITDA margin at 12.2%, very much in line with the previous financial year, and similarly with our operating profit margin at 9%, almost flat from the previous 9.6% in the previous year. peak of interest rates across the globe, we have been able to reduce our net finance cost by 5%, 5.3 to be exact, benefiting from the 29% reduction in our gross debt. And we had opened the financial year with a peak of gross debt of 11.1%. And over the period of the year, we have gradually reduced that debt. We were able to counter the revenue from some of the geographies with a significant improvement in others, and this is demonstrating the resilience of our geographic diversity. The revenue reduction in Southern Africa is attributable to the soft sales volumes amid weak global economy as well as mining activities. The VT revenue reduced by 20.7% on the face of prolonged sanctioned environment and the contraction of its addressable market. Mongolia, as I've said earlier, increased by 69% as a result of the demand in both prime products as well as the aftermarket. Moving back to South Africa on the ingrain front, ingrain showed resilient performance in revenue and it retained and remained flat from the prior year. Operating profit was impacted by the two extraordinary items that I've mentioned earlier. And these expenses being Mongolia and VT provisions. Southern Africa, improving its margins due to the sales mix moving more towards the after sales. I am proud and equally excited to share with you that Mongolia's performance in the current year surpassed our acquisition thesis and therefore triggered the earn out of $10 million, translating to 185 million rands, as I've mentioned. And this has resulted, therefore, into the contribution of that 108 million to our fair value loss in financial instruments. On the tax side, our effective tax was favorably impacted by the reduction in inventory in the jurisdiction that our dollar denominated, and adversely impacted by the expenses, extraordinary, as well as impairments and any other capital items. On the joint ventures and associates, These businesses continue to deliver positive results, although slightly behind the previous year. NMI operated in a constrained consumer market because of the high interest rates. And we are also slowly starting to see an influx of the Chinese OEMs into the market, and we are participating in some. I'll allow Andronica to elaborate further in terms of the performance of Bartrak. Turning our attention to the balance sheet, our balance sheet remains solid. With assets exceeding liabilities by 16.7 billion rand. Gross debt reduced by 29%. Also, our floor plans reduced by 27%. And also the pension fund liability, as Dom had mentioned earlier, we were able to settle the pension fund and that was a final settlement of 632 million Rand. working capital management improved through the reduction in inventory, as well as use of excess cash to pay down our debt, as well as payables as we were reducing our event inventory. This is a solid and strong balance sheet, ladies and gentlemen. Moving to Our net debt, we were able to maintain our net debt year on year, as you can see, and we were successful in executing on the UK pension fund. And you will not be seeing assets and liability in our balance sheet as a result. And also then the settlement of the pension fund of $632 million has resulted in the increase in our net debt to 1.4 billion rand. On the covenant side, we continue to comfortably meet our covenants while we maintain a healthy headroom. In the current year, and in line with our dividend policy, I'm pleased to announce that the board has approved three Rand 10 cents per share in dividend, and this totals five Rand 20 cents, including the two Rand 10 interim that we had paid during the year. The overall dividend increased by 4% year on year, We have created value for our shareholders, and we continue to do so. And this is reflected in the 16.5 billion that we've returned to our shareholders in the past eight years. With that, I'd like to thank you, ladies and gentlemen, and hand over to Andronika Masimulya.