2019 has been a tale of two halves for the Bell Equipment Group where respectable results and short-lived optimism at mid-year were followed by very tough global trading conditions, reduced margins and a number of extraordinary expenses during the second half of the year, resulting in below par performance for the full period. This was all overshadowed by the impact of the outbreak of the COVID-19 pandemic in the period subsequent to year end, leading up to the date of this report.

In South Africa, Bell Equipment managed to grow its share of a smaller market during the first half due to several of our new partner product lines gaining good market acceptance.

However, by the third quarter funding requirements needed by the market made it increasingly difficult to stay competitive and impacted on Bell not achieving the same gains as earlier in the year. We continue to work on plans to provide our customers with funding solutions.

Business and investor confidence continued to decline in the face of uncertainty regarding property rights, mining rights and the sustainability of state-owned enterprises.

Actions to reduce factory production to deal with high levels of inventory, and high borrowings in response to weakening market conditions, have also impacted the results and this will continue into 2020.

In addition, throughout 2019 we continued to face difficulties on the back of our E-series large truck implementation due to unforeseen challenges with component parts and higher than anticipated warranty costs. We are comfortable that we are resolving these issues along with our suppliers.

Although our major markets of North America and Europe benefited from another good year in 2019, a slowdown became apparent late in the year due to Brexit and China trade wars and the COVID-19 pandemic then struck globally.

Australia and New Zealand showed good growth in 2019 stimulated by infrastructure development in those countries while a stronger demand for commodities in Indonesia impacted favourably on the uptake of product in the SEA and Oceanic region.

The South American market remains relatively small and challenging but there was an overall increase in the total market and we increased our presence in the region.

Our less than satisfactory financial results are tempered by several achievements. In May Bell Equipment won ‘Exporter of the Year’ award (large category; turnover >R200 million) and was runnerup in the ‘Exporter of the Year Africa’ award (turnover >R100 million) at the inaugural Exporter of the Year Awards for capital equipment manufacturers.

An award for ‘Major Contributor to Innovation and Technological Advancement in KZN’ and Bell being named as a finalist in the ‘KZN Investor with a Global Footprint’ category followed in September at the inaugural KwaZulu-Natal Investor Awards. Hosted by the KZN Economic Development, Tourism and Environmental Affairs Department and its agency, Trade and Investment KZN, the awards acknowledge the ongoing commitment that investors and businesses have shown to the province through their significant economic contributions and job creation efforts.


Tough market conditions and lower than forecast sales resulted in excess inventory and consequently higher than planned borrowings and interest costs in 2019. Revenue increased by a modest 4% to R7,8 billion from R7,5 billion in 2018. Profit after tax reduced from R276,4 million in 2018 to just R61,0 million for 2019, following profit after tax reported for the 2019 half year of R152,3 million. Markets contracted in the second half of 2019, the pressure on sales margins increased and a number of once off costs, particularly the very substantial upfront IFRS 2 share based payment charges of R82,3 million and related professional services charges of approximately R10 million on the BBBEE transaction concluded in December 2019, were incurred in the second half of the year. Headline earnings reduced from 278 cents per share in 2018 to 80 cents per share in 2019.


To accommodate the empowerment transaction detailed further in this report, it was necessary to restructure the organisation. Current Bell executives, the Bell Foundation and the group’s long term BBBEE partners, Sibi Capital, participate in the structures that position our South African operations very favourably in terms of Government’s programme of historical redress.

During the third quarter we commenced production of our Mark 3 Bell E-series ADTs, which are fitted with the relevant Stage 5 emissions regulated engines in European markets. Included in the global upgrade are the new features and technologies to improve safety and fuel economy, thereby keeping Bell at the forefront in these critical areas. We now anticipate a relatively stable year from a product perspective with all emission projects now behind us. Furthermore, the favourable market acceptance of our range of Kobelco excavators has ensured that we are better positioned to provide customers with a full load and haul package, and we have seen growing interest from the Southern African mining sector in our large Kobelco excavators, which are well matched to our B45, B50 and B60 ADT units.

The acquisition of Matriarch Equipment the previous year has enabled the sharing of the manufacturing load and engineering skills for increased machine throughput of Matriarch and other low volume products. Together with the market acceptance of our Kobelco excavators in the forestry industry, it has also given impetus to forestry industry sales.

Our partnership with Kamaz has not been as successful as the group had envisioned as heavy-duty tipper trucks have proven not to be a strategic fit for our operations. In most cases tipper trucks have a different customer base to that of Bell Equipment’s traditional ADT customers, therefore requiring a different sales and support model to what we currently offer. Sales volumes in the current economic climate does not merit investment in a knock down manufacturing facility which was a part of the longer-term opportunity. Bell is committed to supporting the current machine park and our customers but we are working with Kamaz to appoint a dealer more aligned with this market.

To drive efficiencies and consolidation going forward, we reviewed our footprint as well as our service and product offerings. Towards the end of the year BESSA was re-structured from three regions into two, namely Central and Coastal, of which the latter combines the Cape and KwaZulu-Natal. This effectively allows BESSA to share overheads related to sales and general management to achieve greater efficiency.

European production has improved the group’s lead times providing greater flexibility and better response to dealers and customers. Efficiency in freight and working capital costs are being targeted by eliminating the shipping of raw material from Europe to South Africa and then shipping the bulky components back to the northern hemisphere for consumption in those markets.

The American Logistics Centre (ALC), which was commissioned over a year ago to support our growing machine population with parts, is proving to be a valuable addition to Bell Equipment’s business for both the USA and Canadian distribution companies and customers and has capacity to support growth in the dealer network.

Bell has a strong dealer network in the US that covers over 70% of that country’s ADT sales market. A strategic objective is to appoint additional dealers in targeted regions to enable coverage of over 90%. Bell has focused additional resources on Canada and the USA as we continue to develop this market.


We appreciate the importance of being a sustainable business and the risks associated with not continuously pursuing this as a goal. The board therefore directly participates in our strategic planning process, which addresses the risks associated with the sustainability of the group.

Following the expansion of the group’s European Logistics Centre (ELC) in Germany in 2017 and the establishment of the ALC the following year, the long-term project to expand our Eisenach-Kindel assembly facility in Germany was completed in the latter half of 2019 at a cost of 13 million Euros.

This project accommodates the fabrication of ADT components for the northern hemisphere thereby evolving Bell from a global supplier to a global supplier and global manufacturer. This is a progression of our sustainable growth strategy to bring the Bell ADT range closer to our customers in the major markets while driving improved flexibility and reduced operational and product costs.

The group continues to evaluate ways in which to improve sustainability and believes that continuous improvement across all aspects of the business is key. For this reason, adequate investment has been allocated to production-orientated equipment and maintenance at our South African and German manufacturing operations to ensure ongoing sustainability.

Respect for the environment is important to our sustainability and during 2019 the group initiated several projects aimed at lessening our environmental footprint in terms of water and power usage as well as waste to landfill.

Product development projects continue with the clean sheet design of our new tracked carrier units, a niche solution for select markets, and the development of a system of small timber units under the Matriarch brand.

Internet of Things and the Fourth Industrial Revolution are areas receiving more focus going forward as the group understands that there is significant scope to grow the business with better adoption of these technologies.

Corporate Governance

Our commitment to be a good corporate citizen pervades our total approach to the business and we endeavour to act in a responsible, balanced and commercially sensible manner.

We are ever conscious of the impact on the environment and we have made pleasing progress, as detailed in our stakeholder relations report, as we continue to measure and mitigate these risks.

Bell is committed to the highest standards of corporate governances. Details of governance structures and the extent to which we apply relevant principles of corporate governance, including King IV and regulatory requirements, are provided in this report.


At the end of 2019 the group successfully concluded a BBBEE transaction, which took effect on 1 January 2020. Through this transaction our South African manufacturing subsidiary, BECSA, has been empowered and the South African sales and distribution subsidiary, BESSA, has been further empowered following a transaction in April 2017.

BECSA and BESSA are now 51% black owned and aligned with Government’s economic transformation policies, which improves the BEE scorecards of both entities and positions the Group more competitively in the local market.

BECSA, which is estimated to achieve a Level 2 BBBEE recognition, will benefit from continued access to Automotive Production and Development Programme (APDP) funding, the ability to increase manufacturing throughput and encourage the drive for greater industrialisation.

The transformation is advantageous to Bell customers as BESSA is now a 51% black owned and 30% black women owned entity, with an estimated Level 1 BBBEE recognition, allowing customers to maximise the benefit of their procurement spend from BESSA.

An improved BBBEE level, coupled with local manufacturing, is aligned with the goals of the 2018 Mining Charter and SANRAL’s transformation goals.

This transaction reflects the group’s commitment to South Africa and optimally positions the Bell entities to continue to deliver our premium product range and comprehensive support for the benefit of our local customers.


The 35 day nationwide lockdown implemented by the South African government at midnight on 26 March 2020 to contain the COVID-19 pandemic, and the subsequent gradual phasing out approach of the lockdown based on five phases from 1 May 2020, has significantly impacted the group’s operations.

JSE listed companies with inter alia 31 December year ends were granted a blanket authority by the JSE, through the Financial Sector Conduct Authority, to extend the compliance period relating to the publication of year end results by an additional two months. The group made use of the extension for the board of directors to further consider the impact of the COVID-19 pandemic on the group’s results and delayed the release of its results to 29 May 2020.

Measures were implemented by the group prior to the South African lockdown to prevent and minimise potential infections and transmissions of the virus within its operations globally. The group’s employees received and continue to receive ongoing education and communication on the COVID-19 pandemic and the appropriate preventative measures to be taken.

The current economic challenges arising from COVID-19 induced lockdowns across the world which have been unprecedented and resulted in uncertainty and reduced demand across all our key markets. South Africa has been particularly hard hit as the lockdown coincided with further downgrades by both Moody’s and Fitch in 2020, to align with the Standard & Poor’s downgrade in prior years. Our suppliers have also been impacted and we anticipate significant supply chain disruption as business resumes.

The combination of these factors has meant that our sales and production plans have been reduced across the group.

Significant short term decisions have therefore been taken by the group to mitigate some of the impact of the virus as the situation develops. These include the undesirable but unavoidable step of implementing 20% short time across the global operations, starting in May 2020 for an initial three-month period; the group executive committee has committed to a 25% salary reduction for the corresponding period and the non-executive directors of the Bell Equipment Limited board have committed to a 30% reduction in their directors meeting fees for a six month period.

In addition to these measures, and in order to deal with the immediate loss of trading as well as the expected reduction in sales and income in months to come, action has been taken to delay capex, halt any unnecessary expenses and restructure supplier payments where possible. The real impact of COVID-19 pandemic on the business during 2020 is currently difficult to assess and the group is continuing to focus on ensuring that business continuity plans are relevant and that we are able to deal with major issues out of our control as best as possible. At this stage we believe that any external government support is critical for the stability of the global economy.

Actions to reduce factory production to deal with high levels of inventory and high borrowings in response to weakening market conditions will continue to impact the results into the new year.

Margins in various territories will also continue to face pressure as the market gets smaller.

We anticipate another difficult year in 2020 characterised by ongoing uncertainty in the major markets. Commodities are also expected to face pressure due to a slowdown in demand from China brought on by the COVID-19 pandemic.

As the most significant local manufacturer of goods in South Africa, and a significant employer, we continue to lobby government with regards to levelling the playing field between ourselves and our major foreign competitors. Our competitors are significantly larger offshore multinationals which enjoy a number of associated benefits that make it harder for us to compete.

Construction and mining are tipped as the key players to realising the projected economic growth in South Africa. Pledges made at the President’s 2019 Investment Summit suggest investment in infrastructure is on the cards and SANRAL is expected to kickstart the momentum by allocating a significant number of projects.

However, a steady flow of projects is needed in the medium to long term to drive meaningful recovery, investment and equipment purchases in South Africa. This seems unlikely due to a lack of  clear, decisive leadership by Government, the increased cost of doing business due to ongoing power cuts by Eskom and the diminishing attractiveness of South African commodities.

After a stringent design and testing phase, Bell showcased a new machine, the Bell tracked carrier, at ConExpo in Las Vegas in March 2020, which was well received. The machine, geared for short hauls, is designed to provide a niche solution to the US pipelaying industry and production is planned for later in 2020.

A portion of the main administration building in Richards Bay was destroyed by fire on 5 January 2020, which has necessitated the temporary relocation of the Marketing, Strategic Sourcing and Supplier Quality departments to available offices on site. The building will be rebuilt to its original state, however in light of the lockdown as a result of the COVID-19 pandemic, the work on this project will be delayed. All documentation was backed up on servers and in the cloud, which ensured that business could resume as normal when employees returned after the annual 


In the current difficult economic circumstances and the global uncertainty caused by the COVID-19 pandemic, the board of directors has resolved not to declare a final dividend for the year.

An interim dividend of 20 cents per share was paid.

Board Changes

Ashley Bell resigned from the employ of the Bell Equipment group and his board status changed from executive to non-executive director, effective 1 December 2019.


We are grateful to our executive management for their hard work and dedication as well as for their hands-on leadership and motivation of our Bell employees during a trying year.

Challenging times are a character test and our 1-Bell team is also to be commended for the resilience, determination and teamwork displayed.

Our appreciation goes to our fellow board members for their guidance and commitment as well as to all of our stakeholders for their continued support and confidence in the group.

We wish all our stakeholders, employees, customers and suppliers a safe period going forward as we navigate through this difficult and uncertain time and we look forward to improved business when we rebound from the COVID-19 pandemic.

A special thanks to our extended family of customers and dealers across the globe who continue to invest in the group and our products and entrust us with the ongoing support of their Bell  machines.