UMW Holdings Berhad Corporate presentation April 2019 Beyond - - PowerPoint PPT Presentation

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UMW HOLDINGS BERHAD

UMW Holdings Berhad

Corporate presentation

April 2019

Beyond Boundaries

INTRODUCTION

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UMW HOLDINGS BERHAD

OUR JOURNEY Enhancing our capabilities

Founded in 1917 Automotive Assembly Aerospace

Bicycle repair shop >37 years with Toyota >26 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

59.24% 6.49% 6.26% 17.91% 10.10%

OUR SHAREHOLDERS As at 31 March 2019

31/03/2019 Market Capitalisation

RM6.7b

PNB EPF Other Local Shareholders KWAP Foreign Shareholders

▪ Permodalan Nasional Berhad & PNB Managed Unit Trust Funds, 59.24% ▪ Employees Provident Fund Board, 10.10% ▪ Foreign Shareholders, 6.49% ▪ Other Local Shareholders, 17.91% ▪ Kumpulan Wang Persaraan (Diperbadankan), 6.26%

UMW HOLDINGS BERHAD

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UMW HOLDINGS BERHAD

OVERVIEW OF OUR BUSINESSES

• Manufacture
• Assembly
• Distribution
• Sales & service

Automotive Equipment M&E Others

• Distribution
• Trading
• Leasing
• After-sales

service

• Manufacture of

fan case

• Manufacture of

automotive components

• Blending &

distribution of lubricants

• Unlocking value
• f the land in

Serendah

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UMW HOLDINGS BERHAD

INTERNATIONAL PRESENCE 8 countries

China Malaysia Indonesia Myanmar Brunei Papua New Guinea Singapore Automotive Equipment Manufacturing & Engineering Vietnam

8,301

▪ Employees

AA2

▪ RAM ▪ Credit Rating

UMW HOLDINGS BERHAD

AUTOMOTIVE

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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 of car seats, door trims, headlining, etc. 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

548,115 536,905 605,156 600,123 627,753 655,793 666,465 666,674 580,124 576,625 598,714

12.5%

• 2.0%

12.7%

• 0.8%

4.6% 4.5% 1.6% 0.0%

• 13.0%
• 0.6%

3.8%

• 30.0%
• 20.0%
• 10.0%

0.0% 10.0% 20.0% 30.0%

• 100,000

100,000 300,000 500,000 700,000 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Unit sales % Growth Year-on-Year

TOTAL INDUSTRY VOLUME (TIV) 2019 target - 600,000 units (0.2% YoY)

▪ 2018 car sales saw a growth of 3.8% year-on-year with 598,714 units sold, exceeding MAA’s revised target of 585,000 units. The 2018 TIV growth marks the end of two consecutive years of sales decline. ▪ Sales improved substantially during the three-month GST-free period. ▪ MAA is forecasting a flat TIV growth in 2019, with a sales target of 600,000 units.

Source: Malaysian Automotive Association

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UMW HOLDINGS BERHAD

101,839 82,089 91,990 88,662 106,622 92,521 103,636 95,861 65,110 70,445 66,562 18.6% 15.3% 15.2% 14.8% 17.0% 14.1% 15.6% 14.4% 11.2% 12.2% 11.1%

• 20.0%
• 15.0%
• 10.0%
• 5.0%

0.0% 5.0% 10.0% 15.0% 20.0%

• 10,000

30,000 70,000 110,000 150,000 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Unit sales Market Share

UMW TOYOTA MOTOR (UMWT) UNIT SALES 2019 sales target - 75,000 Units (13% YoY)

▪ Distributes 6 CKD and 8 CBU Toyota models. Lexus models are all CBU. ▪ Importation of CBU cars and CKD components are transacted in US Dollar. ▪ All-new models launched in late 2018 – Toyota Rush (October) and Toyota Camry (November). ▪ As a result of the run-out of Vios towards the end of 2018, UMWT sold 66,562 units during the year. Delivery of Rush started in Feb 2019 despite the launch in Oct 2018.

Source: Malaysian Automotive Association

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UMW HOLDINGS BERHAD

167,393 166,736 188,641 179,989 189,137 196,071 195,579 213,307 207,110 204,887 227,243 30.5% 31.1% 31.2% 30.0% 30.1% 29.9% 29.3% 32.0% 35.7% 35.5% 38.0% 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 2012 2013 2014 2015 2016 2017 2018 Unit sales Market Share

PERODUA UNIT SALES IN 2018 2019 sales target - 231,000 Units (2% YoY)

*

Source: Malaysian Automotive Association

▪ Perodua exceeded its 2018 target with a record breaking sales of 227,243 units and maintained its No.1 position in overall market share for the 13th consecutive year. The all-new Myvi (launched in Nov 2017) was the best-selling model. ▪ Exporting to 6 countries - Indonesia, Singapore, Mauritius, Fiji, Sri Lanka and Brunei. ▪ Order taking for the new 7-seater SUV, Perodua Aruz started on 2 Jan 2019, with monthly sales target of 2,500 units.

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UMW HOLDINGS BERHAD

2018: UMW GROUP’S MARKET SHARE Units & Market Share (%)

38.0% 11.1% 50.9%

Brand 2018 2017 Units Market Share % Units Market Share % Honda Proton Nissan Mazda Others 102,282 64,744 28,610 16,038 93,235 17.1 10.8 4.8 2.7 15.6 109,511 70,991 27,154 9,730 75,676 19.0 12.3 4.7 1.7 13.1 Total TIV 598,714 576,635 2017 204,887 35.5%

2017 70,445 12.2% 2017 301,303 52.3%

Perodua 227,243

UMW Toyota 66,562

Others 304,909

Source: Malaysian Automotive Association

Other Carmakers’ Sales and Market Share

UMW HOLDINGS BERHAD

• UMW Group sold 293,805

units in 2018 with a market share of 49.1% (2017 – 47.7%)

EQUIPMENT

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UMW HOLDINGS BERHAD

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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UMW HOLDINGS BERHAD

Heavy Equipment

UMW Komatsu Heavy Equipment Sdn Bhd UMW Corporation (74%) Komatsu Ltd (26%)

Joint venture effective 1 October 2018

Myanmar Papua New Guinea Malaysia Singapore

Since 1965

Brunei

Since 1979 Since 1996

Principal-distributorship relationship between UMW and Komatsu began

1965 Oct 2018

Joint-venture agreement between UMW and Komatsu begins

Also distributes:

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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

Compressors Generators Oil spill equipment Marine engines

MANUFACTURING & ENGINEERING

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UMW HOLDINGS BERHAD

MANUFACTURING & ENGINEERING SEGMENT Key Products

Aerospace Component Lubricants Auto Components

Aero Engine Fan Cases Lubricants & Fluids Fluids & Chemicals Lubricants & Fluids (China) Shock Absorbers 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. Started generating revenue in 2018.
• 2019 - Ramp-up production.

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

2018 FINANCIAL PERFORMANCE

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UMW HOLDINGS BERHAD

CORE SEGMENTS CONTINUED TO DELIVER HEALTHY RESULTS IN 2018

RM’m

UMW HOLDINGS BERHAD

RM446m RM143m

• RM18m

RM545m RM152m RM22m

Automotive Equipment M&E

2017 2018

Combined total PBT

2018: RM719m 2017: RM571m

25.9%

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UMW HOLDINGS BERHAD

PATAMI FROM CONTINUING OPERATIONS SURGED IN 2018

UMW HOLDINGS BERHAD

(RM‘m) FY17 FY18

Net profit from Continuing Operations 144.9 643.7 Attributable to perpetual sukuk holders (35.4) PATAMI from Continuing Operations 35.3 490.6 Losses from Discontinued

• perations

(675.9) (148.9) Consolidated PATAMI (640.6) 341.7 Attributable to non- controlling shareholders (109.6) (117.7)

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UMW HOLDINGS BERHAD

DISCONTINUED OPERATIONS

Unlisted Oil & Gas segment - carrying value

33m

RM

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

19m

RM

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

Associates & JVs Subsidiaries

UMW HOLDINGS BERHAD

• Out of 16 companies, only 6 are remaining
• Active negotiations are on-going to divest/liquidate the remaining companies

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UMW HOLDINGS BERHAD

TOTAL EQUITY

RM5.7 billion

SHORT-TERM BORROWINGS

RM535 million

CONSOLIDATED BALANCE SHEET AS AT 31 DECEMBER 2018

UMW HOLDINGS BERHAD

50%

27%

Debt-to-equity ratio Net Debt-to- equity ratio

LONG-TERM BORROWINGS

RM2.3 billion

DEPOSITS, CASH & BANK BALANCES

RM1.3 billion

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 12,82013,536 15,817 13,952 14,93314,442 10,43711,06711,306

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 566 382 527 486 994 653 652 (1,658) (641) 342 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

▪ Dividend Payout Ratio (%)

57.7 59.0 75.8 75.2 58.8 78.7 76.1 >100.0 0.0 0.0 25.6 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 37.0 20.0 30.0 31.0 50.0 44.0 41.0 20.0 0.0 0.0 7.5 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

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

UMW HOLDINGS BERHAD *2018 figures are unaudited

(37)

2019 AND BEYOND…

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OUR TRANSFORMATION STRATEGY 7 Strategic Pillars of Transformation Framework

UMW HOLDINGS BERHAD

Rationalise non strategic assets Unlock value of non productive assets Digitise & Digitalise Revenue Elevation Innovation Platform Cost Optimisation & Synergy Human Capital Strategic Support

7 Strategic Pillars

TRANSFORMATION STRATEGY

Capstone for strategic planning at UMW

1 2 3 4 5 6 7

• 1. To focus and expand on the Group’s core businesses
• 2. To pursue sustainable growth strategies
• 3. To unlock value of the Group’s assets for further value creation

Objectives

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AUTOMOTIVE STRATEGY – UMW TOYOTA MOTOR To regain No. 1 position in non-National segment

• Boost capacity and capability

✓ High automation ✓ Plant & land size - 670,000 m²

• 2.6x bigger than the Shah Alam plant

✓ Annual capacity – 50,000 units on 1-shift operations ✓ Increase localisation. The all-new Vios has more than 80% local content (previously 58%)

• T
• tal Investment – RM1.8 billion
• Commenced operations in January 2019 with the

production of the all-new Toyota Vios

• Increase localisation – to improve cost and pricing competitiveness
• Expand CKD model offering, including EEV models

Strategy

Second plant - Bukit Raja, Klang

UMW HOLDINGS BERHAD

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UMW HOLDINGS BERHAD

AUTOMOTIVE SEGMENT – TOYOTA

TOYOTA CAMRY

Launched in Nov 2018, full- year contribution in 2019

NEW MODEL OFFERINGS IN 2019 TO BOOST SALES

TOYOTA VIOS

Launched in Jan 2019; target 30,000 unit sales in 2019

TOYOTA C-HR

The model update was introduced in Jan 2019

TOYOTA YARIS

To be launched in 2Q19

75,000 units 2019 TARGET

• Produced from the new Bukit Raja plant
• Volume-driven models to increase sales

and market share

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AUTOMOTIVE STRATEGY – PERODUA Defend leading position in the Malaysian automotive market

• Improve model offering for the entry-level market

✓ To offer models in popular segments at an affordable price

Strategy

PERODUA ARUZ

Launched in Jan 2019; target 30,000 unit sales in 2019

Perodua Aruz caters to the popular SUV-segment

231,000 units 2019 TARGET

UMW HOLDINGS BERHAD

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EQUIPMENT STRATEGY Moving to strategic partnership and innovate new value-added solutions and services to complement product range

Leveraging on our partnership with Komatsu

➢ Introduction of 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 ➢ Enhancement in rental/leasing business ➢ Expansion in existing markets, ie: Myanmar

Heavy Equipment

UMW Komatsu Heavy Equipment Sdn Bhd

UMW (74%) Komatsu Ltd (26%)

JV officially took effect 1 Oct 2018

The entire heavy equipment business is parked under the JV, with the following brands distributed in its respective existing markets

Since 1965

14 JAN 2019

• UMW

Launches New

Komatsu

Hi-efficiency Excavator Model PC210-10M0 in Malaysia

UMW HOLDINGS BERHAD

Since 1979

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EQUIPMENT STRATEGY Moving to strategic partnership and innovate new value-added solutions and services to complement product range

Industrial Equipment

Diversifying and expanding product and service

• ffering in growth markets, i.e. Vietnam

➢ Provide improved after-sales services ➢ To explore new opportunities in various customer segments

Leveraging on Internet of Things (IoT) to enhance service and product offering Expanding fleet management / rental business

UMW HOLDINGS BERHAD

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M&E STRATEGY Further expansion into high-value / advanced manufacturing

To expand automotive components business ➢ Improve synergies with UMWT and Perodua in its efforts to increase localisation ➢ Increase sales for OEM and REM in both domestic and foreign markets, from continued expansion of products and services ➢ KYB-UMW to commence plant modernisation initiatives to cater to increasing demand Explore opportunities in the HVM space ➢ Optimising our aerospace manufacturing capabilities ➢ Diversify into non-aerospace related projects To improve margins ➢ Higher automation to optimize operations ➢ Material cost reduction with vendors and global sourcing ➢ Lean organization structure and processes to drive efficiency

Strategy

UMW HOLDINGS BERHAD

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MONETISING OUR LAND ASSETS

UMW HOLDINGS BERHAD

SERENDAH LAND – 861 acres

• Will be developed into a High Value Manufacturing Park – by clusters
• Signed an MoU with MIDA and Invest Selangor to collaborate on the park’s development to

attract potential tenants

• Continuously working with MATRADE
• UMW Aerospace’s engine fan case manufacturing facility is the pioneer tenant – taking up 24

acres

• Several other tenants, including T7 Global took up 7 acres of land
• UMW’s operations in Shah Alam to move to Serendah within the next few years
• There have been strong interest with several deals in

the pipeline

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▪ Continued expansion of our core business segments by venturing into new markets, diversifying product mix and ancillary businesses ▪ Continued margin improvements via business optimisation initiatives ▪ Unlock value of the Group’s assets

UMW Group Our goals

UMWT To regain No. 1 position in non-National segment Perodua to defend leading position in the Malaysian automotive market Expand and innovate new value-added solutions and services to complement product range Evolve relationship with Principals from Distributor to Strategic Partner Further expansion in high- value / advanced manufacturing portfolio Expansion

• f

auto components business

SHORT- TO MID-TERM Automotive Equipment M&E

UMW HOLDINGS BERHAD

▪ Pursuing industrial innovation in order to generate our own products and services ▪ Balanced portfolio in terms of earnings contribution between Automotive and non- Automotive segments

LONG-TERM

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.