UMW Holdings Berhad Corporate presentation
May 2019 Beyond Boundaries UMW HOLDINGS BERHAD 1 INTRODUCTION OUR JOURNEY Enhancing our capabilities
Laying the building blocks for excellence
Founded in 1917 Equipment Distribution Automotive Assembly Aerospace
Bicycle repair shop >50 years with Komatsu >37 years with Toyota >50 years with TICO >26 years with Daihatsu
Fan Case Manufacturer for Rolls-Royce Tier 1 supplier
UMW HOLDINGS BERHAD 3 OUR SHAREHOLDERS As at 30 April 2019
PNB ▪ Permodalan Nasional Berhad & PNB Managed Unit Trust Funds, 59.24%
59.24%
RM6.7b EPF 30/04/2019 Foreign Shareholders Market Capitalisation ▪ Employees Provident Fund Board, 10.10% ▪ Foreign Shareholders, 6.21% 10.10% 6.21%
6.26% 18.19%
Other Local Shareholders KWAP ▪ Other Local Shareholders, 18.19% ▪ Kumpulan Wang Persaraan (Diperbadankan), 6.26%
UMW HOLDINGS BERHAD 4 OVERVIEW OF OUR BUSINESSES
Automotive Equipment M&E Others
• Manufacture • Distribution • Manufacture of • Unlocking value fan case • Assembly • Trading of the land in • Manufacture of Serendah • Distribution • Leasing automotive • Sales & service • After-sales components service • Blending & distribution of lubricants
UMW HOLDINGS BERHAD 5 INTERNATIONAL PRESENCE 8 countries
Automotive Equipment Myanmar Manufacturing & Engineering
China
Vietnam
8,301 Malaysia ▪ Employees Papua New Guinea AA2 Singapore ▪ RAM Indonesia ▪ Credit Rating Brunei
UMW HOLDINGS BERHAD 6 AUTOMOTIVE UMW AUTOMOTIVE SEGMENT
51% 38%
Investment holding, Investment holding and UMW Toyota Motor importation and distribution Perusahaan Otomobil Kedua provision of management and Sdn. Bhd.* of Toyota vehicles and Sdn. Bhd.** administrative services related parts
100% Perodua Sales Marketing and distribution of motor vehicles, related spare parts and Sdn. Bhd. other related activities
49% Perodua Auto Investment holding and provision of management and 100% Assembly Services Assembler of Corporation Sdn. Bhd.*** administrative services vehicles Sdn. Bhd. 51%
Manufacturer and assembler Manufacturer and Perodua Manufacturing 100% Automotive Industries 49% of motor vehicles and other supplier of exhaust Sdn. Bhd. related activities Sdn. Bhd. systems 51% Manufacturer and assembler Perodua Global Manufacturing of motor vehicles and other 65% Toyota Boshoku Manufacturer of car 49% seats, door trims, Sdn. Bhd. related activities UMW Sdn. Bhd. headlining, etc. 49% Manufacturer and dealer in Perodua Engine Manufacturing component parts including 30% UMW Toyotsu Motors Sales and service of 51% Sdn. Bhd. engines, couplings and Toyota and Lexus transmission components Sdn. Bhd. vehicles and parts 30% Ingress Technologies Manufacturer of complete door assemblies and press parts 30% Toyota Capital Malaysia Hire purchase Sdn. Bhd. financing of Toyota Sdn. Bhd. customers 49% 51% Daihatsu Motor Co., Ltd Daihatsu Perodua Engine Manufacturer of engine and engine components for Energy Efficient Manufacturing Sdn. Bhd. Vehicles
* 39% Toyota Motor Corporation ** 20% Daihatsu Motor Co., Ltd 4.2% Mitsui & Co., Ltd ******* 41% Daihatsu Motor Co., Ltd 10% Toyota Tsusho Corporation 20% MBM Resources Bhd 2.8% Mitsui & Co., ( Asia Pacific) Pte LtdUMW HOLDINGS6% Mitsui Co., BERHAD Ltd 8 10% PNB Equity Resource 5% Daihatsu (Malaysia) Sdn Bhd 4% Mitsui & Co., ( Asia Pacific) Pte Ltd Corporation Sdn Bhd TOTAL INDUSTRY VOLUME (TIV) 2019 target - 600,000 units (0.2% YoY)
Unit sales % Growth Year-on-Year
700,000 655,793 666,465 666,674 30.0% 627,753 605,156 600,123 598,714 580,124 576,625 548,115 536,905 20.0% 500,000 12.5% 12.7% 10.0% 4.6% 4.5% 3.8% 1.6% 0.0% 300,000 0.0% -2.0% -0.8% -0.6% -10.0% 100,000 -13.0% -20.0% 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 -100,000 -30.0% Source: Malaysian Automotive Association
▪ 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.
UMW HOLDINGS BERHAD 9 UMW TOYOTA MOTOR (UMWT) UNIT SALES 2019 sales target - 75,000 Units (13% YoY) Unit sales Market Share 18.6% 150,000 17.0% 20.0% 15.3% 15.6% 15.2% 14.8% 14.1% 14.4% 12.2% 15.0% 11.2% 11.1% 106,622 110,000 101,839 103,636 10.0% 95,861 91,990 88,662 92,521 82,089 5.0% 70,445 66,562 70,000 65,110 0.0%
-5.0%
30,000 -10.0%
-15.0%
-10,000 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 -20.0% Source: Malaysian Automotive Association ▪ 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.
UMW HOLDINGS BERHAD 10 PERODUA UNIT SALES IN 2018 2019 sales target - 231,000 Units (2% YoY) Unit sales Market Share 350,000 38.0% 40.0% 35.7% 35.5% 300,000 31.1% 31.2% 32.0% 35.0% 30.5% 30.0% 30.1% 29.9% 29.3% 30.0% 250,000 227,243 213,307 207,110 196,071 195,579 204,887 25.0% 200,000 188,641 179,989 189,137 167,393 166,736 20.0% 150,000 * 15.0% 100,000 10.0%
50,000 5.0%
0 0.0% 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 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.
UMW HOLDINGS BERHAD 11 2018: UMW GROUP’S MARKET SHARE Units & Market Share (%)
• UMW Group sold 293,805
2017 units in 2018 with a market 204,887 35.5% share of 49.1% (2017 – 47.7%) 2017 70,445 38.0% 12.2% 11.1% Perodua 227,243 UMW Toyota 66,562 Other Carmakers’ Sales and Market Share
Brand 2018 2017
50.9% Units Market Units Market Share % Share % Others 304,909 Honda 102,282 17.1 109,511 19.0 Proton 64,744 10.8 70,991 12.3 Nissan 28,610 4.8 27,154 4.7 Mazda 16,038 2.7 9,730 1.7 Others 93,235 15.6 75,676 13.1 2017 301,303 Total TIV 598,714 576,635 52.3%
Source: Malaysian Automotive Association
UMW HOLDINGS BERHAD 12 EQUIPMENT EQUIPMENT SEGMENT
HEAVY INDUSTRIAL EQUIPMENT EQUIPMENT Material handling Marine & Power
UMW represents all of the above principals for some of the world’s most recognised products in:
▪ Agriculture ▪ Construction ▪ Forestry ▪ Mining ▪ Industrial and manufacturing ▪ Industrial cleaning – food and beverage, material handling and logistics ▪ Industrial and marine power solutions
UMW HOLDINGS BERHAD 14 Heavy Equipment
UMW Corporation Komatsu Ltd (74%) Joint venture (26%) effective 1 October 2018
UMW Komatsu Heavy Equipment Sdn Bhd
Principal-distributorship relationship Oct 2018 between UMW and Komatsu began
Joint-venture agreement between 1965 UMW and Komatsu begins
Also distributes:
Since 1965 Since 1979 Malaysia Myanmar Singapore Papua New Guinea Since 1996 Brunei
UMW HOLDINGS BERHAD 15 Industrial Equipment Material Handling Toyota Forklift Franchise
Malaysia China : Shanghai, Singapore Since 1967 Zhejiang Vietnam Brunei
Strong market leadership position
▪ 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.
UMW HOLDINGS BERHAD 16 Industrial Equipment Marine & Power
Compressors Generators
Marine engines Oil spill equipment
UMW HOLDINGS BERHAD 17 MANUFACTURING & ENGINEERING MANUFACTURING & ENGINEERING SEGMENT Key Products
UMW is the largest distributor of Repsol Aerospace Component lubricants outside Spain, mainly driven by strong sales in China Aero Engine Fan Cases Lubricants
Lubricants & Fluids
Lubricants & Fluids Auto Components (China)
Fluids & Shock Automotive Chemicals Absorbers 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 HOLDINGS BERHAD 19 MANUFACTURING & ENGINEERING SEGMENT Manufacture of Aero Engine Fan Cases
UMW Aerospace Sdn Bhd Component Part Manufacturing for RR’s Most Advanced Passenger Aircraft Engines
UMW is the 1st Malaysian Tier 1 Supplier to Rolls- Royce • 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. Part of Rolls-Royce’s Asian Supply Chain • UMW will be the only supplier (‘single-source supplier’) for fan cases for both the engines. Single Source Final Assembly of the Trent 1000 and Trent 7000 engines in Singapore • 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.
UMW HOLDINGS BERHAD 20 2018 FINANCIAL PERFORMANCE CORE SEGMENTS CONTINUED TO DELIVER HEALTHY RESULTS IN 2018
RM’m Combined total PBT RM545m 2018: RM719m 25.9% RM446m 2017: RM571m
2017 2018
RM143m RM152m
RM22m -RM18m
Automotive Equipment M&E
UMW HOLDINGS BERHAD 22 PATAMI FROM CONTINUING OPERATIONS SURGED IN 2018
(RM‘m) FY17 FY18
Net profit from Continuing 144.9 643.7 Operations
Attributable to perpetual 0 (35.4) sukuk holders
Attributable to non- (109.6) (117.7) controlling shareholders
PATAMI from Continuing 35.3 490.6 Operations
Losses from Discontinued (675.9) (148.9) operations
Consolidated PATAMI (640.6) 341.7
UMW HOLDINGS BERHAD 23 DISCONTINUED OPERATIONS Unlisted Oil & Gas segment - carrying value
RM RM 33m 19m Associates & JVs Subsidiaries
▪Remaining carrying value for ▪Remaining carrying value for investments in associates and subsidiaries joint ventures ▪We do not expect any adverse ▪We do not expect any adverse material impact to the Group material impact to the Group
• Out of 16 companies, only 6 are remaining • Active negotiations are on-going to divest/liquidate the remaining companies
UMW HOLDINGS BERHAD 24 CONSOLIDATED BALANCE SHEET AS AT 31 DECEMBER 2018
DEPOSITS, CASH & BANK BALANCES RM1.3 billion 50% Debt-to-equity TOTAL EQUITY ratio RM5.7 billion
LONG-TERM BORROWINGS RM2.3 billion Net Debt-to- 27% equity ratio SHORT-TERM BORROWINGS RM535 million
UMW HOLDINGS BERHAD 25 HISTORICAL PERFORMANCE SELECTED GROUP FINANCIAL HIGHLIGHTS
1 2 ▪ Revenue (RM million) ▪ PATAMI (RM million)
15,817 994 14,933 14,442 13,536 13,952 653 652 12,770 12,820 566 527 486 382 11,06711,306 342 10,721 10,437
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 (37)
(641)
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 (1,658)
3 4 ▪ Gross Dividend Per Share of RM0.50 each (sen) ▪ Dividend Payout Ratio (%)
>100.0 50.0 44.0 75.8 75.2 78.7 76.1 37.0 41.0 30.0 31.0 57.7 59.0 58.8 20.0 20.0 7.5 25.6 0.0 0.0 0.0 0.0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 March 08 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Share Split from RM1.00 to RM0.50 each
*2018 figures are unaudited
UMW HOLDINGS BERHAD 27 2019 AND BEYOND… OUR TRANSFORMATION STRATEGY 7 Strategic Pillars of Transformation Framework
TRANSFORMATION STRATEGY Capstone for strategic planning at UMW
7 Strategic Pillars
1 2 3 4 5 6 7
Rationalise Unlock Digitise & Revenue Innovation Cost Human non value of Digitalise Elevation Platform Optimisation Capital strategic non & Synergy Strategic assets productive Support assets
1. To focus and expand on the Group’s core businesses Objectives 2. To pursue sustainable growth strategies 3. To unlock value of the Group’s assets for further value creation
UMW HOLDINGS BERHAD 29 AUTOMOTIVE STRATEGY – UMW TOYOTA MOTOR To regain No. 1 position in non-National segment
• Increase localisation – to improve cost and pricing competitiveness Strategy • Expand CKD model offering, including EEV models
Second plant - Bukit Raja, Klang
• 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%) • Total Investment – RM1.8 billion • Commenced operations in January 2019 with the production of the all-new Toyota Vios
UMW HOLDINGS BERHAD 30 AUTOMOTIVE SEGMENT – TOYOTA
NEW MODEL OFFERINGS IN 2019 TO BOOST SALES
TOYOTA CAMRY TOYOTA C-HR TOYOTA VIOS TOYOTA YARIS Launched in Nov 2018, full- The model update was Launched in Jan 2019; To be launched in year contribution in 2019 introduced in Jan 2019 target 30,000 unit sales in 2Q19 2019
2019 TARGET • Produced from the new Bukit Raja plant 75,000 units • Volume-driven models to increase sales and market share
UMW HOLDINGS BERHAD 31 AUTOMOTIVE STRATEGY – PERODUA Defend leading position in the Malaysian automotive market
• Improve model offering for the entry-level market Strategy ✓ To offer models in popular segments at an affordable price
Perodua Aruz caters to the popular SUV-segment
2019 TARGET
231,000 units
PERODUA ARUZ Launched in Jan 2019; target 30,000 unit sales in 2019
UMW HOLDINGS BERHAD 32 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 Heavy ➢ Enhancement in rental/leasing business Equipment ➢ Expansion in existing markets, ie: Myanmar
UMW Komatsu Ltd (74%) JV officially took (26%) 14 JAN 2019 - UMW Launches New effect 1 Oct 2018 Komatsu Hi-efficiency Excavator Model PC210-10M0 in Malaysia UMW Komatsu Heavy Equipment Sdn Bhd
The entire heavy equipment business is parked under the JV, with the following brands distributed in its respective existing markets
Since 1965 Since 1979
UMW HOLDINGS BERHAD 33 EQUIPMENT STRATEGY Moving to strategic partnership and innovate new value-added solutions and services to complement product range
Diversifying and expanding product and service offering 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 Industrial Equipment Expanding fleet management / rental business
UMW HOLDINGS BERHAD 34 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
Strategy 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
UMW HOLDINGS BERHAD 35 MONETISING OUR LAND ASSETS
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
UMW HOLDINGS BERHAD 36 UMW Group Our goals
SHORT- TO MID-TERM ▪ Continued expansion of our core business segments by venturing into new markets, diversifying product mix and ancillary businesses Automotive Equipment M&E
UMWT To regain No. 1 Expand and innovate new Further expansion in high- position in non-National value-added solutions and value / advanced segment services to complement manufacturing portfolio product range Perodua to defend leading Expansion of auto position in the Malaysian Evolve relationship with components business automotive market Principals from Distributor to Strategic Partner
▪ Continued margin improvements via business optimisation initiatives ▪ Unlock value of the Group’s assets LONG-TERM ▪ 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
UMW HOLDINGS BERHAD 37 THANK YOU
Roza Shahnaz Omar S. Vikneshwaran Director, Group Strategy Head, Investor, Media Relations & Sustainability UMW Corporation Sdn. Bhd. Email: [email protected] Telephone: +603 20252104
Corporate Portal www.umw.com.my
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