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ANNUAL REPORT 2018 FUTURE FOCUSED Sime Darby Berhad Annual Report 2018 FUTURE FOCUSED At Sime Darby Berhad, we are setting the stage for an exciting future. Our core trading businesses have growing footprints across the Asia Pacific growth region. Leaner and more agile, we are able to take advantage of new opportunities in key sectors and explore innovative technologies as potential new revenue streams. To support our strategy, we will continue to focus on operational excellence, growth acceleration and work towards rationalising our non-core businesses. The end goal is to be the leading motors and industrial player in Asia Pacific. With proven trading and services business models, balanced portfolio exposure and long-standing partnerships with established brands, we are well positioned to leverage on the region’s growth and rising affluence. To be the leading Motors and Industrial player in Asia Pacific. OUR VISION & MISSION We are committed to developing a winning portfolio of sustainable businesses. We subscribe to good corporate governance and high ethical values. We continuously strive to deliver superior financial returns through operational excellence and high performance standards. We provide an environment for our people to realise their full potential. OUR CORE VALUES Integrity Respect & Responsibility Uphold high levels of Respect for the individuals personal and professional we interact with and the values in all our business environment that we interactions and decisions. operate in (internally and externally) and committing to being responsible in all our actions. Excellence Enterprise Stretch the horizons of Seek and seize opportunities growth for ourselves and with speed and agility, our business through our challenging set boundaries. unwavering ambition to achieve outstanding personal and business results. GENERATING PROGRESSIVE DEVELOPMENT A Leading Dealer of Caterpillar Products and Allied Solutions A leader in the heavy equipment business, Sime Darby Industrial represents ONE OF THE Caterpillar and a range WORLD’S of allied brands. It is among the world’s largest LARGEST Caterpillar dealers, offering a comprehensive range of CATERPILLAR industrial solutions across DEALERS a network of 131 branches throughout 15 countries and territories in the Asia Pacific 131 branches region. Sime Darby Industrial throughout the also distributes other Asia Pacific region equipment brands such as New Holland agricultural tractors, Terberg terminal tractors and Perkins engines. Representing more than 30 Allied Brands and Business activities: Solutions • Heavy Equipment Sales – New and Used • Power Systems Sales • Product Support • Equipment Rental • Industrial Solutions 15 Operating in 15 countries and territories Find out more • Australia • New Caledonia Sime Darby Industrial Website • Brunei • Papua New Guinea • China • Singapore • Christmas Island • Solomon Islands • Hong Kong • Thailand • Macau • Vietnam • Malaysia • South Korea Download • Maldives Sime Darby Industrial Fact Sheet Read more about the performance of our Industrial Division on pages 35 to 43 of this Annual Report. L IA TR INDUS Industrial Valet - Sime Darby Industrial Malaysia’s one-stop shop for heavy equipment parts and accessories Sime Darby Industrial Malaysia launched its first e-commerce platform - Industrial Valet, for non-CAT heavy machinery equipment parts and merchandise. The e-commerce platform serves as an additional sales channel for customers to purchase parts and merchandise with just a few clicks online. Industrialvalet.com is touted as one of its kind in the marketplace in Malaysia. It was created exclusively with its customers in mind, providing them with a convenient, fast, efficient and value-added innovative service. ACCELERATING TO SUCCESS ONE One of the Leading OF THE Automotive Players in Asia Pacific LARGEST Sime Darby Motors is one BMW Dealers of the leading automotive in the World groups in the Asia Pacific region, representing luxury brands such as BMW, Rolls-Royce, Jaguar, Land Rover and Porsche to broad-appeal market brands including Ford and Hyundai as well as commercial vehicles. Sime Darby Motors is actively involved in all facets of the automotive business – from importation and assembly to distribution, retail and rental. Sime Darby Motors serves as a bridge between its principals and customers through the extensive networks in the markets it operates in. Its retail operations feature some of the best and latest state-of-the-art facilities in the region. Business activities: • Assembly • Distributor/Importer • Retail of New & Used Cars • After-sales Services • Vehicle Rental More than 80,000 Vehicles sold last year Find out more Sime Darby Motors Website Download Sime Darby Motors Fact Sheet Read more about the performance of our Motors Division on pages 44 to 52 of this Annual Report. Represents more than 30 brands in the Asia Pacific region S R O T O M Sime Darby Auto Engineering (SDAE) Engine Assembly Facility - Increasing our assembly capacity with the introduction of BMW engine assembly In May 2018, Sime Darby Motors via its wholly-owned subsidiary, Sime Darby Auto Engineering Sdn Bhd, opened a new BMW engine assembly plant in Kulim, Kedah. The RM132 million plant with a built-up area of 24,000 sqm has the capacity to assemble 10,000 engines for BMW’s range of locally- assembled vehicles, and is the second BMW engine assembly plant in Southeast Asia after Thailand. The new plant supports our strategy to expand our assembly capacity to cater for the domestic market with the newest capabilities in engine assembly technology, and supports BMW’s export initiatives to other ASEAN markets. INSIDE THIS REPORT pages 59-67 5. E OU LU 6 R VA 8 GO Creating Sustainable Value E Cha V BL 70 irm ER A Bo an N IN ar ’s A This section provides an understanding on A 74 d o St N T Gr f D at C S e oup ir em E U nc 84 M ec e our focus and approach with regards to S t a No an to n G n rn l m a rs t o N e ve ria e 8 ina ge n I m o te nc 8 G ti m C Sustainability, outlining our commitment to T it G a s lia ov on e o A m y M er p y 9 er & nt r E lit r t om fet 7 na R C p R m i u a C Sa Ris nc e o o o b O M d d k e m m ra Delivering Sustainable Futures. C C a n an ity 99 M & u t r in ng ity s a h bil S an A n m e . u a i il ic lt a ta a u e it 4 O t fy b h a ain te ge d ra G s ti a t e st m m i ti e o u n E l H u an en e t C o e v 9 S n i s a S ns d t n o n e 5 e ta s n al ti o 1 In o t r 9 Id s e o t u 06 t n C m C n 5 u n ti n ib In er R o m o S si a e tr ve n is m m a 9 u p m on 1 st al k it n 5 u n C t 08 o C M m m c B c o n A r o i e e c ir ty e d Re n a t e it O v le i m 1 di l t n e R 0 n p n p 10 ti o ati ro a e e 6 E o u lo S n o l g e e 1 e m e ta al n e R p 6 P m v te C s m e o R 3 e m o p r e pages 6 o D by e m e o t p 4 C t n n 6 d h t p t r o 7 n e o lia t r a B f t 6 o R n a e ce rd sp o o In f n fo D s r 22-58 i i m re b ili a W c t E to y ti & I r o s n N V Our Performance Review E O R I S E In this section, we provide our Leadership S C U N C A S Statements and Performance Reports for I M R t s D n n O T e o F m ti our Divisions for FY2018. N R e a E r E t a e w w P t e M p S : S e e i i E T S s v v O m ' I G e e l o n N S R R a c a t A E r Y s s n n w ' ' I m L o o N e M r O O i s i e p s E i n A E F s A a v r v v e s y o T C C h i e o N si R o it ti M t C G R G A D ’ n L n t s A c u si T s t r o e r e . r q 2 8 5 5 S o n o r ti h o 3 i o 2 2 2 P 3 E e p L a t e t D i l r r e n i A f m d a a p R y i s I l o e u s ’ c B c r t C m w e s A n e a t P r o g o N t t a l n o D f C n S A t n n e o i F pages y f a l c e r F h a N s o h e m i I d t s r o f e s C c F i t n n a t t o f n D a u e e .