Barloworld Limited

Good morning, ladies and gentlemen, and welcome to our interim results presentation for the six months ended 31 March 2025. My name is and it gives me a great pleasure to welcome our executive team to take you through our results. First, led by Mr. Dominic Suela, Group CEO. He'll take us through our group highlights. Ms. Nopasikalila, our Group Financial Director, will, as usual, provide the financial summary. Andronika Masemula, the CEO of Equipment Southern Africa, will take us through, obviously, Equipment Southern Africa's results, which fall under industrial equipment pillar, and she will be followed by Mr. Emilie Eka. Emil will proceed to industrial services, and he'll take us through the results for our business VT, and Chris will conclude the divisional results by providing an update for ingrain, which falls under the consumer industries pillar. To close off, Dominic will give us a strategy update, provide an outlook, and as usual, we'll take time to address whatever questions you may have. Please feel free to post them online, and we will address those at the end. Without much further ado, ladies and gentlemen, I'd like to welcome our group CEO, Mr. Dominic Suela.

Thank you, KG. Ladies and gentlemen, Welcome to our interim results for 2025. It's always a pleasure and an honor to present our financial results alongside my executive team. 2025, certainly this year has been very interesting in all its hallmark when you look at the volatility, uncertainty, complexity and ambiguity. The world is changing faster than ever in terms of economic shifts, tech breakthroughs, global politics and climate changes are reshaping our daily living. In such a dynamic environment, businesses such as ourselves, especially those in cyclical industries, need to look beyond short-term gains and prepare for long-term resilient strategies. Investing in ESG is a smart strategy for building resilience in the face of economic cycles, regulation, and evolving expectation. On the environmental front, we have revisited our long-term climate strategy to focus on absolute reduction in scope one and scope two, carbon emission, instead of efficiency-based targets. We continue to invest in environmental infrastructure. In May this year, we proudly celebrated the launch of the upgraded maritime water effluent plant. Our solar installation in Cliff River is in progress, and hopefully before the end of this year, we will be able to launch that project. Investing in our employees and establishing a culture of zero harm is fundamental to our strategy. We are pleased to report that there were no work-related fatalities during this period. However, we did observe an increase in our lost time injuries and resultant frequency rates. Each incident has been thoroughly investigated and appropriate corrective actions have been implemented to prevent the recurrence. We are committed to cultivating a diverse and inclusive workforce where every individual feels a genuine sense of belonging. Equally, we adopt a comprehensive approach to employee well-being, ensuring not only that our employees return home safely each day, but their overall health, dignity, and fulfillment upheld throughout their professional journey at Baloworld. On the training and development, this remains one of our focus area. Over the last six months, we provided about 248 apprentices and interns with the work opportunities in the group. Since its launch, we have 84 Baloworld leaders graduate from the SEED program, equipping them with the skills and knowledge to drive our company forward. Our independent board serve as a custodian of our governance and strategy and continue to exercise independent oversight over the business. As I indicated in November last year, we were disappointed to learn of the potential export control breach in our division in VT. We filed a notification of self-disclosure to BIS on a voluntary basis. The investigation is ongoing as announced this morning that BIS has granted a further extension from the 2nd of June to about the 2nd of September, and we'll keep you updated as we progress with that investigation. If we just change tack a little bit to look at some of the highlights, the year of 2025 commenced with a guided sense of optimism characterized by lower global headline inflation and prospects for pockets of global economic growth. When you look at the trading conditions within the period which we operate in, we have entered a lower cycle where commodity prices have subdued. As some African mining clients remain cautious about capital investment. They're preferring to rent equipment from us than to buy. On the construction sector side, there is still a recovery in progress in that area. But when you look at Zambia, particularly the copper mines in that area, they've been spared by favorable copper prices. And when you look at our business in Mongolia, the sector continued to grow, albeit at a slower pace. You're all well aware of our activity in VT that has been significantly reduced by sanctions and prolonged geopolitical environment, and largely because the addressable market has shrunk in that area. At the current rate, we expect our operations in VT to trade toward break-even levels and to remain self-sufficient. During this period, we focus on levels That we can control. Because some of the issues that I've spoken about, geopolitical issues, are way beyond our control. We primarily focus on reducing overall operating and financing costs through our fiscal discipline and agile treasury management. Including VTE, group revenue declined marginally by 2.2% to $16.8 billion. EBITDA margin expansion of about 0.6% when compared to prior period. Similarly, operating margin expanded by about 0.3% to 8.8%. Group headline earnings per share declined by about 20.5% to 423 cents per share. Normalized headline earnings per share, which exclude VT, amounted to about 356 cents per share. I'm pleased that the board agreed has declared a digital dividend of about 120 cents per share, which is in line with our dividend policy. Our balance sheet remains robust. In light of the uncertain times ahead, I'm confident that it is resilient enough to absorb future volatility. I'm going to hand over to Nopa Sika just to give us a financial overview.

Thank you, Dominic, and thank you all for joining us this morning. Our results in this interim period demonstrates that our business is agile and can withstand turbulent times. As Dominic has already mentioned, performance in VT has declined following the prolonged geopolitical environment. So in order to understand our group's performance, it is important to isolate VT for a moment. The income statement excluding VT yielded impressive results considering the challenging trading environment. Revenue achieved was $16.8 billion from $17.2 billion in the prior year. EBITDA and operating profit increased by 3% and 1.3% respectively. The EBITDA margin rose to 12.5%. and the operating profit margin improved to 8.8%, benefiting from prior year's restructuring and cost containment measures. Impairment in the current period relates mostly to our SMD business, which was successfully disposed in April this year. Our share of profits from joint ventures and associates declined due to our ongoing challenges in the DRC and reduced trading activities in bar track. Andronica will elaborate on this a little later. NMI's operating profit remained flat year on year. And you may recall that in the previous year, their results included profit from sale of property of 14 million rand. Moving on now to the performance of VT, as expected, ongoing geopolitical situation continue to impact their results. The business, however, is still on track to break even and remains self-sufficient as we had previously guided. Transitioning to the group's view, including VT, as anticipated, resulted in reduction in revenue, EBITDA, and operating profit. Net finance costs improved by 24%, benefiting from lower interest rates and the reduction in floor plans, which we replaced with less expensive debt. We estimate an ETR of 31.1% for the full year, which is in line with what we had reported in September at 33%. Group HEPs declined by 20.5% from 5.32 cents per share to 4.23 cents per share. On the segmental front, Equipment Southern Africa's revenue declined by 6%, mainly due to the reduction in aftermarket revenue. Machine sales remained flat, and rental revenue performed exceptionally well, increasing by 17.8% year-on-year. Mongolia continued its upward trajectory with strong revenue increase of 23%, benefiting from growth, both prime product and aftermarket activity. In-grains revenue remained flat, with volumes decreasing by 3%, while the average price increase was 2.8%. The divisional CEs will expand on the divisional performance a little later. As previously mentioned, the group's operating profit, excluding VT, improved by 0.3% to 8.8%. Mongolia's operating margin remained flat above 0%. beg your pardon, it remained above the 20% mark. A slight reduction in equipment Southern Africa margin, mainly as a result of the change in sales mix. And with ingrains margin improving by 1%. Our balance sheet remains strong, with assets exceeding liabilities by 17.5 billion. This represents a 5.2% increase compared to the September results. Total assets rose by 4.2% to 42.9 billion, two key contributors to the increase. in the total assets are the rise in foreign currency translation reserves, driven by the strong U.S. dollar against the rand, and the increase in working capital. And here, in particular, the accounts receivable. Accounts payable, including floor plans, decreased to 13.1 billion compared to September 2024. Free cash outflow of $2.8 billion in this first half is in line with the working capital, and this is expected to reverse in the second half. We continue to invest in capital expenditure across the division, positioning the group for growth. The group remains compliant with all its debt covenants. ROIC and ROE are below our target rates of 14% and 15%, noting that we are still halfway through the year. And contributing to the current shortfall is the increase in invested capital and reduced profitability during the reporting period. In declaring the dividend, the board took into account levels of debt, required investment, as well as the macroeconomic outlook. I'm delighted to share that the board declared an interim dividend of 120 cents per share. Now with that, I'd like to hand over to Andronika Masimula.