Barloworld (BAW) H2 2024 earnings summary

Executive summary

• Delivered resilient performance in a challenging macroeconomic and trading environment, supported by portfolio diversification and disciplined strategy execution.

• Revenue declined 7% to ZAR 41.9 billion for the year ended 30 September 2024, reflecting tough economic and sector conditions.

• EBITDA margin held steady at 12.2% despite lower sales, and ROIC remained strong at 15.7%.

• Reduced gross debt by 29% and eliminated UK pension fund exposure, strengthening the balance sheet.

• Board approved a final dividend of ZAR 3.10 per share, totaling ZAR 5.20 for the year, a 4% increase year-over-year.

Financial highlights

• Normalized EBITDA up 9% and operating profit from core trading activities up 3% year-over-year, excluding non-recurring items.

• HEPS declined 12% to ZAR 10.22 per share; ROE at 11.7% (down from 15.5%).

• Net finance cost reduced by 5.3% due to lower gross debt.

• Free cash flow of ZAR 1.3 billion, reduced to ZAR 0.7 billion after UK pension fund payment.

• Returned ZAR 16.5 billion to shareholders over the past eight years.

Outlook and guidance

• Cautious optimism for 2025, with growth expected in construction and consumer segments, while mining remains subdued.

• Mongolia's growth to moderate but remain above historical levels; Russia faces continued headwinds from sanctions.

• Ingrain expects margin improvement from supply chain efficiencies and better crop yields.

• Focus on growing aftermarket and services to improve margins amid global economic headwinds.

• Macro-economic challenges expected to persist, with some easing possible in late 2025.