Beyond Boundaries UMW Holdings Berhad Corporate Presentation - - PowerPoint PPT Presentation

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UMW HOLDINGS BERHAD

Beyond Boundaries

UMW Holdings Berhad

Corporate Presentation

September 2018

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UMW HOLDINGS BERHAD

Introduction

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UMW HOLDINGS BERHAD

OUR JOURNEY Enhancing our capabilities

Founded in 1917 Automotive Assembly Aerospace

Bicycle repair shop >36 years with Toyota >25 years with Daihatsu Fan Case Manufacturer for Rolls-Royce Tier 1 supplier

Laying the building blocks for excellence

UMW HOLDINGS BERHAD

Equipment Distribution

>50 years with Komatsu >50 years with TICO

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UMW HOLDINGS BERHAD

58.42% 10.81% 6.36% 13.84% 10.57%

OUR SHAREHOLDERS As at 28th September 2018

28/09/2018 Market Capitalisation

RM 5.9b

PNB EPF Other Local Shareholders KWAP Foreign Shareholders

▪ Permodalan Nasional Berhad & PNB Managed Unit Trust Funds, 58.42% ▪ Employees Provident Fund Board, 10.57% ▪ Foreign Shareholders, 10.81% ▪ Other Local Shareholders, 13.84% ▪ Kumpulan Wang Persaraan (Diperbadankan), 6.36%

UMW HOLDINGS BERHAD

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UMW HOLDINGS BERHAD

OVERVIEW OF OUR BUSINESSES

01 02 03 04

• Manufacture
• Assembly
• Distribution
• Sales &

service

Automotive Equipment M&E Others

• Distribution
• Trading
• Leasing
• After-sales

service

• Blending &

distribution

• f lubricants
• Manufacture
• f

automotive components

• Manufacture
• f fan case
• Manufacture
• f OCTG and

Line pipes

• Land rigs
• Trading

Oil & Gas - Unlisted

UMW HOLDINGS BERHAD

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UMW HOLDINGS BERHAD

INTERNATIONAL PRESENCE 10 countries

China Malaysia Indonesia Myanmar India Papua New Guinea Singapore Australia Oman Automotive Equipment Manufacturing & Engineering Oil & Gas Vietnam

8,346

▪ Employees

AA2

▪ RAM ▪ Credit Rating

UMW HOLDINGS BERHAD

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UMW HOLDINGS BERHAD

Our Automotive business

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UMW HOLDINGS BERHAD

UMW AUTOMOTIVE SEGMENT

UMW Toyota Motor

• Sdn. Bhd.*

Manufacturer and dealer in component parts including engines, couplings and transmission components

Perodua Engine Manufacturing

• Sdn. Bhd.

Perodua Manufacturing

• Sdn. Bhd.

Perodua Sales

• Sdn. Bhd.

30%

Toyota Boshoku UMW Sdn. Bhd. Automotive Industries

• Sdn. Bhd.

Assembly Services

• Sdn. Bhd.

Perusahaan Otomobil Kedua

• Sdn. Bhd.**

Manufacturer and assembler

• f motor vehicles and other

related activities Investment holding and provision of management and administrative services Marketing and distribution of motor vehicles, related spare parts and

• ther related activities

Manufacturer

• f car seats

Manufacturer and supplier of exhaust systems Assembler of vehicles

Ingress Technologies

• Sdn. Bhd.

Manufacturer of complete door assemblies and press parts

UMW Toyotsu Motors

• Sdn. Bhd.

Sales and service of Toyota and Lexus vehicles and parts 65% 100% 100% 49% 49% 49% 100% 30% Investment holding, importation and distribution

• f Toyota vehicles and

related parts Investment holding and provision of management and administrative services 39% Toyota Motor Corporation 10% Toyota Tsusho Corporation 4.2% Mitsui & Co., Ltd 2.8% Mitsui & Co., ( Asia Pacific) Pte Ltd 5% Daihatsu (Malaysia) Sdn Bhd 30%

Toyota Capital Malaysia

• Sdn. Bhd.

Hire purchase financing of Toyota customers

*

51% 38%

51% 51%

****

*** 41% Daihatsu Motor Co., Ltd 6% Mitsui Co., Ltd 4% Mitsui & Co., ( Asia Pacific) Pte Ltd 20% Daihatsu Motor Co., Ltd 20% MBM Resources Bhd 10% PNB Equity Resource Corporation Sdn Bhd

**

Perodua Global Manufacturing

• Sdn. Bhd.

49% 51%

Daihatsu Perodua Engine Manufacturing Sdn. Bhd.

49% 51% Daihatsu Motor Co., Ltd Manufacturer of engine and engine components for Energy Efficient Vehicles Manufacturer and assembler

• f motor vehicles and other

related activities

Perodua Auto Corporation Sdn. Bhd.***

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UMW HOLDINGS BERHAD

• Lower sales in 2017 were mainly due to weak consumer sentiment and stringent lending guidelines

imposed by the financial institutions.

• TIV stood at 423,730 units in the first eight months of 2018. MAA revised its TIV forecast for 2018 to

585,000 units (+1.5% growth) from 590,000 units previously.

548,115 536,905 605,156 600,123 627,753 655,793 666,465 666,674 580,124 576,635 423,730 12.5%

• 2.0%

12.7%

• 0.8%

4.6% 4.5% 1.6% 0.0%

• 13.0%
• 0.6%
• 75.0%
• 65.0%
• 55.0%
• 45.0%
• 35.0%
• 25.0%
• 15.0%
• 5.0%

5.0% 15.0% 200,000 400,000 600,000 800,000 1,000,000 1,200,000

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 8M18

MAA 2018 TIV forecast

585,000 units

TOTAL INDUSTRY VOLUME (TIV)

TIV % Change Over Previous Year RHS

UMW HOLDINGS BERHAD

Source: Malaysian Automotive Association

Total Industry Volume (“TIV”) – Unit Sales LHS

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UMW HOLDINGS BERHAD

LEXUS & TOYOTA

• Distributes 6 CKD and 7 CBU Toyota models. Lexus models are all CBU.
• Top selling Toyota models in 2017 – Vios (35%) and Hilux (27%).
• Importation of CBU cars and CKD components are transacted in US Dollar.
• The all-new models launched in 2018 – Toyota Harrier (January), Toyota C-HR (March) and

Lexus LS 500 (March).

101,839 82,089 91,990 88,662 106,622 92,521 103,636 95,861 65,110 70,445 50,434 18.6% 15.3% 15.2% 14.8% 17.0% 14.1% 15.6% 14.4% 11.2% 12.2% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 16.0% 18.0% 20.0% 50,000 100,000 150,000 200,000 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 8M18

UMWT 2018 sales target

70,000 units

UMW Toyota Motor Market Share Of TIV RHS

UMW HOLDINGS BERHAD

Source: Malaysian Automotive Association

UMW Toyota Motor Unit Sales LHS

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UMW HOLDINGS BERHAD

PERODUA

• In 2017, Perodua maintained its No. 1 position in overall market share since 2006

(12th consecutive year).

• Currently exporting to six countries - Indonesia, Singapore, Mauritius, Fiji, Sri Lanka

and Brunei.

• The all-new Perodua Myvi was launched on 16 November 2017.
• Target for 2018 is 209,000 units (+2% growth).

167,393 166,736 188,641 179,989 196,071 195,579 213,307 207,110 204,887 158,732 30.5% 31.1% 31.2% 30.0% 29.9% 29.3% 32.0% 35.7% 35.5% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0% 50,000 100,000 150,000 200,000 250,000 300,000 350,000 2008 2009 2010 2011 2013 2014 2015 2016 2017 8M18

Perodua 2018 sales target

209,000 units

Perodua Market Share Of TIV RHS

UMW HOLDINGS BERHAD

Source: Malaysian Automotive Association

Perodua Motor Unit Sales LHS

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8M18: UMW GROUP’S MARKET SHARE Units & Market Share (%)

37.5% 11.9% 50.6%

Brand 8M18 2017 Units Market Share % Units Market Share % Honda Proton Nissan Mazda Others 74,951 44,709 18,730 9,844 66,330 17.7 10.6 4.4 2.3 15.6 109,511 70,991 27,154 9,730 75,676 19.0 12.3 4.7 1.7 13.1 Total TIV 423,730 576,635 2017 204,887 35.5% 2017

70,445 12.2% 2017 301,303 52.3%

Perodua 158,732 UMW Toyota 50,434 Others 214,564

Source: Malaysian Automotive Association

Other Carmakers’ Sales and Market Share

UMW HOLDINGS BERHAD

• UMW Group sold 209,166

units in 8M18 with a market share of 49% (2017 – 48%)

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Our Equipment business

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EQUIPMENT SEGMENT

▪ Agriculture ▪ Construction ▪ Forestry ▪ Mining ▪ Industrial and manufacturing ▪ Industrial cleaning – food and beverage, material handling and logistics ▪ Industrial and marine power solutions

UMW represents all of the above principals for some of the world’s most recognised products in: HEAVY EQUIPMENT Material handling Marine & Power INDUSTRIAL EQUIPMENT

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Heavy Equipment

• We have the largest equipment servicing fleet in Malaysia and can therefore provide

extensive after-sales and maintenance services to our clients wherever they may be. Myanmar Papua New Guinea Malaysia Singapore

Since 1979 Since 1996 Delivered 38 units

• f Rosenbauer

Panther Airport Fire Fighting Vehicles to MAHB from 2010-2015 Since 1965

Brunei

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UMW HOLDINGS BERHAD

Industrial Equipment Material Handling

Toyota Forklift Franchise

Malaysia Vietnam Brunei Singapore China : Shanghai, Zhejiang

▪ No. 1 position in Malaysia since 1972. Toyota forklift maintained its 50% market share in Malaysia’s material handling equipment business. ▪ Toyota Forklifts – UMW is one of the Top 10 Distributors in the world. ▪ Globally, UMW is the only Diamond member (the highest elite tier) in the Premier Club Recognition Programme, awarded by Toyota Material Handling International (TMHI). ▪ Also awarded the Undisputed Performance Award by Toyota Material Handling International for outstanding performance. ▪ Have ventured into leasing of Toyota forklifts.

Strong market leadership position

Since 1967

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UMW HOLDINGS BERHAD

Industrial Equipment Marine & Power

CompAir Air Compressor Mitsubishi Marine Engines Honda Power Products Ingersoll Rand Centrifugal Compressor GE Reciprocating Compressor Mitsubishi Gen-sets

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EQUIPMENT SEGMENT Financial Highlights

REVENUE CONTRIBUTION

40% 60%

Heavy Equipment Industrial Equipment

1H 2018

PBT CONTRIBUTION

1H 2018

35% 65%

Heavy Equipment Industrial Equipment

Myanmar

39%

Malaysia

45%

PNG

16%

28 September 2018 Signed a Joint Venture with Komatsu Formed a new company – UMW Komatsu Heavy Equipment Sdn. Bhd.

• UMW Corporation (74%) and Komatsu (26%)
• Komatsu to pay RM133.9 million for the 26%

stake

• Objective
• To introduce more products/models to

cater to urbanisation sector

• Opportunity to introduce

SMARTCONSTRUCTION: ICT solutions to construction job sites

• Provision of value-added services

through competitive product pricing, forex and financing assistance

Singapore

36%

Malaysia

50%

Vietnam

10%

China

3%

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Our Manufacturing & Engineering business

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MANUFACTURING & ENGINEERING SEGMENT Key Products

Aerospace Component Lubricants Auto Components

Aero Engine Fan Cases Lubricants & Fluids Fluids & Chemicals Lubricants & Fluids (China) Shock Absorbers & Power Steering Automotive Components

• Grantt lubricants, UMW’s in-house brand was

launched in 2015

• Grantt lubricants are distributed in 9 countries, ie:

Malaysia, Singapore, Brunei, the Philippines, Cambodia, Vietnam, Indonesia, Thailand and China. UMW is the largest distributor of Repsol lubricants outside Spain, mainly driven by strong sales in China

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UMW HOLDINGS BERHAD

MANUFACTURING & ENGINEERING SEGMENT Manufacture of Aero Engine Fan Cases

• The contract is for the manufacture of fan cases for the

Trent 1000 aero engines for 25+5 years (Trent 7000 engines later) for Rolls-Royce.

• Both Trent engines are the most advanced in aero engine

technology, with increased fuel efficiency and noise reduction.

• UMW will be the only supplier (‘single-source supplier’) for

fan cases for both the engines.

• The manufacturing plant is located in Serendah, Selangor.
• Successfully delivered the first fan case on 29 November

2017.

• 2018 - Ramp-up production. Target to produce 70 fan

cases.

Component Part Manufacturing for RR’s Most Advanced Passenger Aircraft Engines Part of Rolls-Royce’s Asian Supply Chain Single Source Final Assembly of the Trent 1000 and Trent 7000 engines in Singapore

UMW is the 1st Malaysian Tier 1 Supplier to Rolls- Royce

UMW Aerospace Sdn Bhd

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UMW HOLDINGS BERHAD

MANUFACTURING & ENGINEERING SEGMENT Financial Highlights

Malaysia

45%

* excluding aerospace business

• The segmental loss before

taxation of RM3.4 million is mainly due to start up losses incurred at the aerospace business.

• We expect the aerospace

business to be profitable in 2020.

M&E PBT* 1H2018 RM25.9m

Auto components

66%

Lubricants

34%

1H 2018

PBT CONTRIBUTION *

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UMW HOLDINGS BERHAD

1H18 Financial Results

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1H18 CONSOLIDATED FINANCIAL RESULTS

UMW HOLDINGS BERHAD

RM’ mil 1H2018 1H2017 %yoy Revenue 5,389.2 5,729.2

• 5.9%

Associate’s profit 112.0 73.2 53.1% Profit before tax 303.0 (175.1) >100% PATAMI 198.5 (189.1) >100%

Automotive 80% Equipment 14% M&E 6%

1H18

Revenue contribution

SEGMENTAL BREAKDOWN OF CORE BUSINESSES

Automotive 76% Equipment 24%

1H18

PBT contribution

*M&E registered a loss of RM3.4m due to start-up losses at the aerospace plant

In 1Q 2018, the Company declared a single-tier dividend of 5 sen per share for the financial year ending December 2018, paid on 21 June 2018

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UMW HOLDINGS BERHAD

No Company Status 1 2 3 UMW Synergistic Generation Sdn. Bhd. * Sichuan Haihua Petroleum Steelpipe Co. Ltd. * PFP Holdings Pty. Ltd. * ✓ COMPLETED rationalisation ✓ COMPLETED ✓ Completed disposal of PFP Taiwan 4 5 UMW Fabritech Sdn. Bhd. * UMW Coating Technologies (Tianjin) Co. Ltd. * ✓ COMPLETED ✓ Executed SPA, awaiting authorities approval 6 Arabian Drilling Services LLC * ✓ Ceased operations, finalisation of disposal of assets 7 United Seamless Tubulaar Pvt. Ltd. ✓ Ceased operations, under receivership and to proceed with disposal of assets 8 Oil Country Tubular Limited ✓ Ongoing disposal onto the open market 9 10 11 12 13 14 15 16 Jaybee Drilling Pvt. Ltd. * UMW Sher (L) Ltd. * Shanghai BSW Petro-pipe Co. Ltd. Zhongyou BSS (Qinhuangdoa) Petropipe Co. Ltd. Tubulars International Pte. Ltd. UMW Oilfield International (M) Sdn. Bhd. / UMW Oilfield International (L) Ltd. * Jiangshu Tube-Cote Shuguang Coating Co. Ltd. Shanghai Tube-Cote Petroleum Pipe Coating Co. Ltd. Active negotiations

REMAINDER OF THE UNLISTED OIL & GAS SEGMENT

Companies

* subsidiary

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UMW HOLDINGS BERHAD

REMAINDER OF THE UNLISTED OIL & GAS SEGMENT

Carrying value following write-downs

57m

RM

▪Remaining carrying value for investments in associates and joint ventures ▪We do not expect any further material impact to the Group

11m

RM

▪Remaining carrying value for subsidiaries ▪We do not expect any further material impact to the Group

Associates & JVs Subsidiaries

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Historical performance

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SELECTED GROUP FINANCIAL HIGHLIGHTS

▪ Revenue (RM million) ▪ PATAMI (RM million) ▪ Gross Dividend Per Share of RM0.50 each (sen)

1 2 4 3

12,770 10,721 12,820 13,536 15,817 13,952 14,933 14,442 10,437*11,067

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 566 382 527 486 994 653 652 (1,658) (641) 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

▪ Dividend Payout Ratio (%)

57.7 59.0 75.8 75.2 58.8 78.7 76.1 >100.0 0.0 0.0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 37.0 20.0 30.0 31.0 50.0 44.0 41.0 20.0 0.0 0.0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

March 08 Share Split from RM1.00 to RM0.50 each

UMW HOLDINGS BERHAD

*Restated

(37)

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Looking Ahead

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OUR BROAD STRATEGY Focusing on mid to long term strategic initiatives to enhance growth

Digitize and digitalize – the Group’s business strategy is aligned with digital strategy – IoT like initiatives across our

• perations

03 01 02

Optimising our profitability and growth – Continued focus on our three core businesses and monetising long held assets Building capability & capacity – Group Human Resource transformation initiatives

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AUTOMOTIVE STRATEGY Strengthening our market position

• Second plant – located in Bukit Raja, Klang
• Localisation
• Strategic location
• High automation
• Focus on passenger vehicles and EEV

segment

• Plant & land size - 670,000 m²
• T
• tal Investment – RM1.8 billion
• Annual Capacity - 50,000 units (initial)
• Expected to start operations in early 2019

Value Drivers Increase local content Competitive pricing Meeting market expectations on EEV More exciting new CKD models Boost capacity and capability

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EQUIPMENT STRATEGY To meet new market expectations while leveraging on the expertise of our partners

Heavy Equipment

• Leveraging on our partnership with Komatsu
• Repositioning our heavy equipment business

to focus on other more urbanised sectors such as construction Industrial Equipment

• Bringing other products into the existing

regional network

• Leveraging on Internet of Things (IoT) for

enhancing product offering

• Enhancing fleet management / rental

business

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UMW HOLDINGS BERHAD

M&E STRATEGY Strategic transformation focusing on HVM with Aerospace as catalyst

Advance Land Transportation Industrial Automation Energy Medical Devices High End Electronics

Aerospace Entry Point

And Beyond… Enable HVM in

Potential opportunities in HVM space

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UMW HOLDINGS BERHAD

MONETISING OUR LAND ASSETS

• Serendah Land – 861 acres.
• Plan to develop this into a High Value Manufacturing Park focusing on industrial.
• Signed an MoU with MIDA to collaborate on the park’s development.
• Working with Invest Selangor and MATRADE.
• Part of the land currently housed the Rolls-Royce fan case project which acts as a

catalyst for further development of Serendah

LOW-DENSITY RESIDENTIAL COMMUNITY COMMERCIAL CORE WITH INTEGRATED CONNECTION TO LANDSCAPE MIXED-USE & RESIDENTIAL LOOP ROAD HIGH-END, LOW-DENSITY RESIDENTIAL COMMUNITY AEROSPACE INDUSTRY CLUSTER AUTOMOTIVE INDUSTRY CLUSTER MEDIUM-DENSITY AFFORDABLE HOUSING COMMUNITY

UMW Aerospace Sdn. Bhd (24 acres) T7 Kilgour Sdn Bhd (2 acres)

Corporate Portal www.umw.com.my

This material is proprietary and is prepared specifically for the recipient’s reference. The information contained herein is not to be distributed without the consent of UMW Holdings Berhad. Any recommendation or views contained in this document do not have regard to specific investment objectives, financial situation and the particular needs of any specific audience. The content furthermore is believed to be correct at the time of the issue of this document, and is not and should not be construed as an offer or a solicitation of any offer to buy or sell any securities. Nor does this document purport to contain all the information a prospective investor may require.

• S. Vikneshwaran

Head, Investor, Media Relations & Sustainability Email: vikneshwaran.s@umw.com.my Telephone: +603 20252104

THANK YOU

Roza Shahnaz Omar Director, Group Strategy UMW Corporation Sdn. Bhd.