slide1 n.
Download
Skip this Video
Loading SlideShow in 5 Seconds..
Building sustainable value PowerPoint Presentation
Download Presentation
Building sustainable value

Loading in 2 Seconds...

play fullscreen
1 / 47

Building sustainable value - PowerPoint PPT Presentation


  • 81 Views
  • Uploaded on

Building sustainable value. Presentation to the Investment Analysts Society. Tony Phillips CEO, Barloworld Limited. Today’s agenda. Where we have come from What we do today Value Based Management The current business environment 2x4x4. Building long term value: “From little acorns…..”.

loader
I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.
capcha
Download Presentation

Building sustainable value


An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript
slide1

Building sustainable value

Presentation to the

Investment Analysts Society

Tony Phillips

CEO, Barloworld Limited

today s agenda
Today’s agenda
  • Where we have come from
  • What we do today
  • Value Based Management
  • The current business environment
  • 2x4x4
building long term value from little acorns
Building long term value:“From little acorns…..”
  • Established, Durban 1902
    • branch of Thos Barlow & Sons Ltd, England
  • 1927 appointed Caterpillar dealer for SA
    • Charles Sydney “Punch” Barlow joins firms
  • 1929 appointed Hyster lift truck dealer for SA
  • 1941 listed on JSE
building long term value 1950 90 expansion diversification
Building long term value:1950-90 expansion & diversification
  • Everything from food to computers
  • 1971 acquired Rand Mines
  • 1979 acquired Hyster dealerships in US
  • 1984 acquired UK-based J Bibby & Sons
building long term value 1990 s bring change as sa re joins global economy
Building long term value:1990’s bring change as SA re-joins global economy
  • 1989 R1 billion profit, 240 000 employees
  • 1991 Warren Clewlow appointed Chairman & CEO
    • recognised illegitimacy of SA focused conglomerate
    • MS&A (now Columbus) sold + some mining interests
  • 1993/4 Barlow Rand unbundled
  • 1994 -1998 “A South African infrastructure play”
    • invested R5 bn to modernise operations
    • restructured for global market
today barloworld is an international industrial brand management company
Today Barloworld is an international industrial brand management company

providing business solutions

through leading industrial brands, supported by service, relationships and attention to detail,

to make our customers’ businesses excel

revenues have risen 3 fold in a decade to match pre unbundling levels
Revenues have risen 3-fold in a decade to match pre-unbundling levels

40

Pre-unbundling

35

30

25

Revenue R billion

20

15

10

5

0

1997

1993

1994

2000

1995

1996

1998

2002

1999

2001

2003

products services and solutions delivered through 7 operating business segments
Products, services and solutions delivered through 7 operating business segments

2003 trading revenues (excluding corporate ops & other)

equipment one of the world s largest cat dealers
A 77 year relationship

Exclusive dealer for:

Spain and Portugal

Southern Africa

Western Siberia

Bulgaria

Equipment: one of the world’s largest Cat dealers
equipment providing total solutions
Complementary brands complete the offering:

Perkins,Dezzi, Ingersoll Rand, Bitelli, Boart Longyear, Massey Ferguson, Mak

We add intellectual capital and deliver:

Smart Partnerships™

Equipment:… providing total solutions
cement lime leading in cement lime in southern africa
Cement & Lime:Leading in cement & lime in southern Africa
  • South Africa and Zimbabwe’s leading cement producer
    • 8 factories
  • Southern Africa’s leading lime producer
    • 1.8 m ton capacity plant
  • Saldanha Steel Smart Partnership
industrial distribution world s largest independent lift truck dealer
Industrial distribution:world’s largest independent lift truck dealer
  • 75 year Hyster relationship
  • Dealer for:
    • 8 states in South East US
    • UK
    • Belgium
    • Netherlands
    • Southern Africa
industrial distribution major presence in truck distribution in se us
Industrial distribution:major presence in truck distribution in SE US
  • Top 5 US dealer inFreightlinerand Sterling trucks
  • Arkansas, Louisiana, Mississippi, Tennessee &Texas
  • Only listed dealer in United States
motor major player in motor solutions in southern africa and growing in australia
Motor: major player in motor solutions in Southern Africa and growing in Australia
  • Motor vehicle dealerships
    • 55 outlets in southern Africa
    • growing base in Australia
    • Subaru distributor for southern Africa
    • other services (panel shops, truck hire)
  • Acquiring 100% of Avis Southern Africa
    • strategic move to total automotive solutions
coatings painting everything that moves and doesn t
Coatings:painting everything that moves (and doesn’t)
  • Decorative coatings
    • market leader in South Africa
    • no. 3 in Australia
      • business includes retail stores
      • franchised exports to China
  • Automotive and industrial coatings
    • JV’s in South Africa
scientific an international market leader in specialised scientific equipment
Scientific: an international market leader in specialised scientific equipment
  • Melles Griot
    • world leader in lasers and photonics
    • manufacturing in US, UK, Japan
    • headquarters in Carlsbad, CA
  • Laboratory (Bibby Sterilin)
    • UK-based leader in glass and plastic laboratory equipment and related products
steel tube regional player in africa
Steel tube:Regional player in Africa
  • Southern African market leader in small bore steel tube and pipe
  • Largest supplier of stainless steel into European Union
our success isn t built on what we do it is built on how we do things the barloworld way
Our success isn’t built on what we do - it is built on how we do things: “the Barloworld way”
  • Market leadership
  • Strong brands
  • Long term relationships
  • High ethical standards
  • Good governance
  • Sharing best practice & common business systems
  • Value Based Management
  • Barloworld management teams
vbm at the heart of everything we do
VBM: at the heart of everything we do

1999: Decision to build an integrated global company and

introduce a new measurement philosophy

The Barloworld Brand

+

Value Based Management

vbm what is it
VBM: What is it?

The essence of VBM is not

the measurement of value

It is aligning theorganisation

to create long term sustainable value

It is a journey not a destination

slide22

VBM : The 1999 framework

Shareholder Value

TSR (total shareholder return)

CFROI (cash flow return on investment)

Capital

Capital

Market

Company’s processes, activities and assets

Commercial

Market

Labour

Market

People Value

Compensation &

Worth What Paid For

Customer Value

Self fulfilment

Revenue

Employee Satisfaction

Value-Based

Compensation

Value for money

Innovation

Customer Value Attributes

Employee Satisfaction

Direct Measures of Quality

Innovation

vbm why use cfroi as the financial metric

ROE

IRR

VBM: Why use CFROI as the financial metric?

Reported ROE using actual U.S. inflation for a 6% “real” IRR project

20

15

% Return

10

5

Source: HOLT analysis

0

1870

1880

1890

1900

1910

1920

1930

1940

1950

1960

1970

1980

1990

vbm cfroi has the strongest correlation to total shareholder returns of any metric
VBM: CFROI has the strongest correlation to Total Shareholder Returns of any metric

Holt source data: US S&P industrials 1998

vbm 2000 2002 first phase of rollout
VBM: 2000 – 2002 first phase of rollout
  • Focus on financial measures
  • Building knowledge of CFROI
  • Modeling every business
  • Goal to achieve real 8% CFROI hurdle
vbm it s all about the bubbles
VBM:“It’s all about the bubbles”

Cost of Capital

10%

Real Growth In Assets

5%

CFROI

0%

5%

6%

7%

8%

9%

10%

-5%

-10%

vbm barloworld bubble progression delivers shareholder value
VBM: Barloworld bubble progression delivers shareholder value

Cost of Capital

25%

20%

1999

15%

10%

2000

Real Growth In Assets

5%

2001

0%

2002

6.0%

7%

8%

9%

10%

-5%

2003

-10%

-15%

since 2002 vbm has evolved into a fully integrated sustainability management system
Since 2002 VBM has evolved into a fully integrated sustainability management system

Community

(social and environment)

Shareholders

Integrated management of value

creation across all stakeholder

groups simultaneously

Employees

Customers

vbm driven actions include
Pricing and quality of customers improvements

Margin enrichment

Acquisitions and disposals

Emphasis on cash flows

Growth in Smart Partnerships

Strategic shifts in focus (eg Avis)

New products and services

Customer value analytics

Employee value models

CEO’s Awards

Sustainability reporting (GRI)

Black Economic Empowerment

Pac Man expansion

Surgery to improve operations in difficult markets

VBM-driven actions include:

Shareholders

Community

Customers

Employees

vbm driven actions smart partnerships moving up the value chain

Asset

Management

Parts & Service Products

Basic Support

VBM driven actions:Smart Partnerships - moving up the value chain

Cost per Ton

Maintenance & Repair Contract (MARC)

Ownership Options

Op Training

Application

Increasing value added

Systems

vbm driven actions acquiring avis c hanging strategic focus
VBM driven actions:Acquiring Avis - changing strategic focus

South Africa

“Shop Front”

C

U

S

T

O

M

E

R

S

BTH

Parts

AVIS

Fleet Services

Motor

Retail

Service

Fitment

/ Tyre

EMPOWERED

AVIS

Rent-A-Car

Subaru

Panel

slide32

VBM driven actions:Avis is a springboard for international growth

Scandinavia

– grow from existing Avis base

Africa

– leverage growth in other services from Avis footprint

Australia

– grow existing retail base and then add other offerings

USA

– established Freightliner base is foundation for future growth in commercial transport sector

vbm driven actions sustainable approach to bee founded on ethics governance community value
Strong ethics

Obey the law

Be fair

Be honest

Respect others

Protect the environment

Good governance

A business imperative

IAS compliant

Aligned with global standards of best practice

Continual evolution in approach

VBM driven actions: sustainable approach to BEE founded on ethics, governance & community value
vbm driven pac man strategy our hyster territory in the united states was built over 13 years
VBM driven Pac Man strategy: Our Hyster territory in the United States was built over 13 years

Va

Ky

Mo

Ok

NC ‘79

Tn ‘79

Ak ‘92

SC ‘79

‘92

Ms

Ga

‘79

Al

‘88

Tx

La

Fl

‘88

Hyster territory

vbm driven pac man strategy in 2000 acquired first freightliner dealerships

Freightliner Territory

Hyster Territory

VBM driven Pac Man strategy: In 2000 acquired first Freightliner dealerships

Tn

Ak

Ms

Barton Freightliner

vbm driven pac man strategy in 2003 freightliner territory expands for critical mass

Freightliner Territory

Hyster Territory

VBM driven Pac Man strategy: In 2003 Freightliner territory expands for critical mass

Ok

Ak

Tx

Northwest Arkansas Truck

Ms

La

Texarkana Truck Center

business environment update generally positive

Region

Drivers for Barloworld

Conditions

South Africa

GDP/GFCF and mining

Mixed

Rest of Africa

Mining and infrastructure

Slower

Spain

Infrastructure spend and GDP

Still going well

UK

GDP and manufacturing activity

Solid

USA

GDP, distribution and manufacturing in south east

Much more vibrant

Australia

GDP and housing

Bouyant

Business environment update:generally positive
in 2002 using our vbm principles we set ourselves a new medium term value goal

Double the value

we create

In 4 years

(2002 – 2006)

For all 4 stakeholders

(investors, customers, employees, social/environmental communities)

IN 2002 using our VBM principles we set ourselves a new medium term value goal

2 x 4 x 4

achieving 2x4x4 2 pillars of growth supported by long term r d businesses and built on vbm
Achieving 2x4x4: 2 pillars of growth, supported by long term “R&D” businesses and built on VBM

Southern

African

infrastructure

Global

business

solutions

Long term

“R&D”

businesses

VBM

achieving 2x4x4 profit analysis reveals 2 major streams of profit
Achieving 2x4x4: Profit analysis reveals 2 major streams of profit

Global business

solutions (41%)

Southern African

infrastructure (57%)

Long term “R&D”

businesses (2%)

2003 Segment results

achieving 2x4x4 different drivers for each pillar
Achieving 2x4x4: different drivers for each pillar

Excellent organic growth prospects

Pac Man expansion

Southern

African

infrastructure

Global

business

solutions

Long term

“R&D”

businesses

Blue sky

VBM

achieving 2x4x4 strategic focus
Achieving 2x4x4: strategic focus
  • “More of the same” in new geographies
  • Add complementary brands
  • Expand existing and new business solutions and Smart Partnerships™
  • Ongoing VBM-driven “quality of business” improvements
www barloworld com
www.barloworld.com

Our 5 year track record*

  • The share price has soared 203%
  • Profits have risen 97%
  • Dividends are up 106%

* Source: Financial Mail February 27 2003