BEYOND BOUNDARIES UMW HOLDINGS BERHAD CORPORATE PRESENTATION
FEBRUARY 2020
UMW HOLDINGS BERHAD OUR BUSINESS DIVERSIFIED PORTFOLIO
AUTOMOTIVE EQUIPMENT MANUFACTURING LANDBANK & ENGINEERING
• Manufacture • Distribution • Manufacture of • Unlocking value • Assembly • Trading fan case of our vast landbank in • Distribution • Leasing • Manufacture of automotive Serendah • Sales & service • After-sales components service • Blending & distribution of lubricants
UMW HOLDINGS BERHAD 2 OUR STRENGTH LEADER IN OUR CORE BUSINESS SEGMENTS
AUTOMOTIVE EQUIPMENT MANUFACTURING & ENGINEERING
• Leader in the Malaysian • Distribute Komatsu heavy • First Malaysian company to automotive industry with equipment in 5 countries in manufacture and assemble 51.4% market share (2019) the Asia-Pacific region. fan cases for Rolls-Royce as through Toyota, Lexus and a Tier 1 supplier. Perodua marques. • Hold more than 50% market share for Toyota forklift in • Manufacture and export Malaysia and Singapore; have KYB shock absorbers to 38 operations in 5 countries in countries from Malaysia. Asia-Pacific.
UMW HOLDINGS BERHAD 3 OUR REVENUE AND PBT CONTRIBUTION SEGMENTAL BREAKDOWN
2014 2015 2016 2017 2018
1% 2% 6% 5% 6% 7% 6% 7% 7% 7% 13% 13% 14% 20% 13% 13% 14% 21% 22% 21%
86% 81% 81% 78% 81% 81% 79% 72% 71% 72%
REVENUE PBT REVENUE PBT REVENUE PBT * REVENUE PBT * REVENUE PBT * Automotive Equipment Manufacturing & Engineering
* Excluding Aerospace sub-segment (within Manufacturing & Engineering) which was loss-making due to start-up operations
UMW HOLDINGS BERHAD 4 OUR INTERNATIONAL PRESENCE 12 KEY MARKETS
Automotive Myanmar Equipment Manufacturing & Engineering
WORKFORCE
Seychelles 18,342 China
Vietnam
Malaysia
Papua AA2 New Guinea Singapore CREDIT RATING Sri Lanka Fiji
RAM Ratings Indonesia
Mauritius Brunei
* Key markets and Workforce are inclusive of UMW and Perodua
UMW HOLDINGS BERHAD 5 OUR SHAREHOLDERS AS AT 31 JANUARY 2020
PNB 60.57 ▪ Permodalan Nasional Berhad & PNB Managed Unit Trust Funds, 60.57% RM4.6b
EPF 31/1/2020 Foreign Shareholders 11.31 Market Capitalisation ▪ Employees Provident Fund Board, ▪ Foreign Shareholders, 5.33% 11.31% 5.33
15.74 7.05
Other Local Shareholders KWAP ▪ Other Local Shareholders, 15.74% ▪ Kumpulan Wang Persaraan (Diperbadankan), 7.05%
Bloomberg ticker UMWH:MK
Total number of shares 1,168,293,932
FTSE4Good Bursa Malaysia Index constituent Bursa Malaysia Listing sector Main Market, Consumer Products & Services
UMW HOLDINGS BERHAD 6 GROUP FINANCIAL HIGHLIGHTS HISTORICAL PERFORMANCE
1 2 ▪ Revenue (RM million) ▪ PATAMI (RM million)
15,817 13,951 14,932 13,536 13,952 12,820 994 10,437 11,306 653 652 10,721 10,437 527 486 382 345
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 -37
-641
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
75.8 75.2 78.7 76.1 50.0 44.0 41.0 59.0 58.8 30.0 31.0 20.0 20.0 25.6 7.5 0.0 0.0 >100.0 0.0
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
UMW HOLDINGS BERHAD 7 AUTOMOTIVE SEGMENT
UMW HOLDINGS BERHAD AUTOMOTIVE SEGMENT STRUCTURE
51% 38%
Investment holding, UMW Toyota Motor Perusahaan Otomobil Kedua Investment holding and importation and distribution provision of management and Sdn. Bhd.* of Toyota vehicles and Sdn. Bhd.** administrative services related parts Marketing and distribution of 100% Perodua Sales motor vehicles, related spare 100% Assembly Services Assembler of Sdn. Bhd. parts and other related activities Sdn. Bhd. vehicles 49% Investment holding and Perodua Auto provision of management and 100% Automotive Industries Manufacturer and Corporation Sdn. Bhd.*** administrative services supplier of exhaust Sdn. Bhd. systems 51% Manufacturer and assembler of Perodua Manufacturing motor vehicles and other related Manufacturer of car 65% Toyota Boshoku 49% activities seats, door trims, Sdn. Bhd. UMW Sdn. Bhd. headlining, etc. 51% Manufacturer and assembler of Perodua Global Manufacturing motor vehicles and other related 49% Sdn. Bhd. activities Manufacturer and dealer in 49% Perodua Engine Manufacturing component parts including 51% Sdn. Bhd. engines, couplings and 30% UMW Toyotsu Motors Sales and service of Toyota transmission components and Lexus vehicles and Sdn. Bhd. parts 30% Ingress Technologies Manufacturer of complete door Sdn. Bhd. assemblies and press parts 30% Toyota Capital Malaysia Hire purchase financing of Toyota customers Sdn. Bhd. 51% Daihatsu Motor Co., Ltd 49% Daihatsu Perodua Engine Manufacturer of engine and Manufacturing Sdn. Bhd. engine components for Energy Efficient Vehicles
** 4.2% Mitsui & Co., Ltd ******* 41% Daihatsu Motor Co., Ltd *39% Toyota Motor Corporation 2.8% Mitsui & Co., ( Asia Pacific) Pte Ltd UMW6% HOLDINGS Mitsui Co., Ltd BERHAD 10% Toyota Tsusho Corporation 9 5% Daihatsu (Malaysia) Sdn Bhd 4% Mitsui & Co., ( Asia Pacific) Pte Ltd UMW GROUP MARQUES AND MODELS
LS ES NX RX LX LC COMPLETELY KNOCKED-DOWN (CKD)
VIOS YARIS HILUX INNOVA FORTUNER RUSH HIACE COMPLETELY BUILT-UP (CBU) THAILAND INDONESIA JAPAN
CAMRY COROLLA C-HR AVANZA ALPHARD VELLFIRE HARRIER
COMPLETELY KNOCKED-DOWN (CKD)
MYVI AXIA BEZZA ARUZ ALZA
UMW HOLDINGS BERHAD 10 TOTAL INDUSTRY VOLUME (TIV) MALAYSIA AUTOMOTIVE ASSOCIATION (MAA)
Unit sales % Growth Year-on-Year 655,744 666,487 666,677 627,733 605,156 600,123 598,598 604,287 607,000 580,085 576,625 536,905 12.7%
4.6% 4.5% 3.8% 1.6% 0.0% 1.0%
-2.0% -0.8% -0.6%
-13.0%
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020T
▪ Low industry growth due to no end-of-life policy, no scrap policy, high car ownership. ▪ In 2019,TIV grew 1.0% to register sales of 604,287 units, fueled by the passenger vehicles (PV) segment which saw sales of 550,179 units. Within the PV segment, passenger cars continued to form the biggest segment with 69.4%. ▪ MAA is forecasting a marginal TIV growth in 2020, with a sales target of 607,000 units.
UMW HOLDINGS BERHAD 11 UNIT SALES UMW TOYOTA MOTOR - TOYOTA AND LEXUS MODELS
Unit sales Market Share 17.0% 15.3% 15.6% 15.2% 14.8% 14.1% 14.4% 12.2% 11.2% 11.1% 11.6% 106,622 103,636 95,861 91,990 88,662 92,521 82,089 70,445 70,009 65,110 66,562
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
▪ Importation of CBU vehicles and CKD components are transacted in US Dollar. ▪ UMWT launched the all-new Vios, Yaris and Corolla in 2019. ▪ Vios and Yaris are produced at UMWT’s new Bukit Raja plant whilst the Corolla is a CBU model from Thailand. Vios and Yaris share the same platform, with local content above 80%.
UMW HOLDINGS BERHAD 12 UNIT SALES PERODUA – 38%-OWNED ASSOCIATE
Unit sales Market Share 39.8% 38.0% 35.7% 35.5% 31.1% 31.2% 32.0% 30.0% 30.1% 29.9% 29.3% 240,341 240,000 227,243 213,307 207,110 196,071 195,579 204,887 188,641 179,989 189,137 166,736
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020T ▪ Perodua maintained its No.1 position in overall market share for the 14th consecutive year in 2019. ▪ The all-new 7-seater SUV, Perodua Aruz was launched in January 2019. Enhanced Perodua Axia was introduced in September 2019. ▪ Exports to 7 countries - Indonesia, Singapore, Mauritius, Fiji, Sri Lanka, Brunei and Seychelles.
UMW HOLDINGS BERHAD 13 AUTOMOTIVE INDUSTRY – MARKET SHARE UMW GROUP MARKET SHARE GREW TO 51.4% IN 2019
• UMW Group sold 310,350
2018 units in 2019 with a market 227,243 38.0% share of 51.4% (2018 – 49.1%) 2018 39.8% 66,562 11.1% Perodua 11.6% 240,341 UMW Toyota 70,009 Other Carmakers’ Sales and Market Share
Brand 2019 2018
48.6% Units Market Units Market Others Share % Share % 293,937 Proton 100,183 16.6 64,744 10.8 Honda 85,418 14.1 102,282 17.1 Nissan 21,239 3.5 28,610 4.8 Mazda 11,651 1.9 16,038 2.7 Other brands 75,446 12.5 93,119 15.6 2018 304,909 Total TIV 604,287 598,598 50.9%
Source: Malaysian Automotive Association
UMW HOLDINGS BERHAD 14 AUTOMOTIVE INDUSTRY OUTLOOK AUTO SALES GROWTH LARGELY DEPENDS ON THE STATE OF THE ECONOMY
INDICATORS
Real private consumption growth (% y-o-y) Private consumption have normalized towards its long- 8.9 8.4 7.9 7.6 7.8 term average trend after the exceptional period during 7.1 6.9 6.6 7.0 the GST-free phase of June to August 2018.
3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19
Malaysia TIV 2018-2020F (units) 612,000 Sustained private consumption growth could underpin 600,000 598,714 TIV growth in 2020
2018 2019F 2020F
Source: MAA
UMW HOLDINGS BERHAD 15 UMW TOYOTA MOTOR OPTIMISE COSTS WHILE ELEVATING REVENUE
Improve Cost optimisation Competitiveness
1 Expansion of model line-up 1 Higher localisation
2 Attractive financing packages – 2 Higher automation in partnership with Toyota Capital 3 Highly-efficient Bukit Raja plant 3 Collaboration with dealers to boost after-sales 4 Network rationalisation
• 4 new SUV models 2020 • Market share of 12%
UMW HOLDINGS BERHAD 16 UMW TOYOTA MOTOR ATTRACTIVE STEP-UP FINANCING PACKAGES
TOYOTA EZ BELI CAMPAIGN • 9-year financing plan – 3-tier step-up • Currently for Yaris, Vios, Avanza and Hilux – with plans for other models • Mainly to target first time buyers
UMW HOLDINGS BERHAD 17 PERODUA LEVERAGE ON EXCELLENT BRAND PERCEPTION FOR ENTRY-LEVEL SEGMENT
1 Strategic planning of future car 2 Ride on Perodua’s success in the models entry-level segment • To ensure it can compete effectively against • Perodua introduced an all-new SUV model, its direct competitors Aruz in January 2019
• Enhanced Perodua Axia was introduced in September 2019 • Facelift Perodua Bezza to be launched in early 2020
UMW HOLDINGS BERHAD 18 FINANCIAL HIGHLIGHTS AUTOMOTIVE
11,498.1 10,766.0 10,722.0 10,023.0 8,451.0 8,972.2 8,946.7 Revenue (RM million)
2012 2013 2014 2015 2016 2017 2018
1,796.8
1,413.5 1,475.3 PBT * 860.9 550.0 (RM million) 496.9 446.1
2012 2013 2014 2015 2016 2017 2018
* PBT includes contribution from Perodua
UMW HOLDINGS BERHAD 19 EQUIPMENT SEGMENT
UMW HOLDINGS BERHAD EQUIPMENT SEGMENT DISTRIBUTOR OF GLOBALLY-KNOWN BRANDS IN SOME PARTS OF THE REGION
• Agriculture HEAVY • Construction EQUIPMENT • Forestry • Mining
Material handling • Industrial and manufacturing • Industrial cleaning- ▪ food and INDUSTRIAL beverage EQUIPMENT Marine & Power ▪ material handling ▪ logistics • Industrial and marine power solutions
UMW HOLDINGS BERHAD 21 HEAVY EQUIPMENT STRUCTURE
UMW Komatsu Heavy Equipment Sdn Bhd
2018 Revenue contribution UMW Corporation Komatsu Ltd (74%) (26%) Singapore, 3% PNG, 17% Principal-distributorship Oct 2018 Malaysia, relationship between UMW and 42% Komatsu began
Joint-venture agreement Myanmar, between UMW and Komatsu 38% 1965 begins
Also distributes:
Since 1965 Since 1979 Malaysia Myanmar Singapore Papua New Guinea Since 1996 Brunei
UMW HOLDINGS BERHAD 22 INDUSTRIAL EQUIPMENT MATERIAL HANDLING
Toyota Forklift Franchise – UMW is one of the Top 10 distributors globally
Malaysia China : Since 1965 Shanghai, Singapore Zhejiang Vietnam
Brunei 2018 Revenue contribution
China, 3% Strong market leadership position Vietnam, 12% ▪ No. 1 position in Malaysia since 1972. Toyota forklift maintained its 50% market share in Malaysia’s material handling equipment business. Malaysia, 46% ▪ Under the 2018 Toyota Material Handling International (TMHI) Award Programme, UMW Industries was awarded the Diamond Club Singapore, Recognition, President’s Award (Gold) and Vision 2020 Award. 39% ▪ Have ventured into leasing of Toyota forklifts – about 9,000 units in the region.
UMW HOLDINGS BERHAD 23 INDUSTRIAL EQUIPMENT MARINE & POWER
Compressors
Generators
Marine Engines
Oil spill equipment
UMW HOLDINGS BERHAD 24 EQUIPMENT INDUSTRY OUTLOOK POCKETS OF OPPORTUNITIES
HEAVY EQUIPMENT INDUSTRIAL EQUIPMENT
• The higher allocation in development expenditure • The US-China trade conflict could provide opportunities during Budget 2020 could accelerate implementation for ASEAN countries, especially in the manufacturing of projects sector ❑ Approved manufacturing investments in Malaysia • Singapore’s healthy pipeline of public and private surged to RM33.1 bn in 1H19 sector projects should drive the construction sector recovery and support sales of heavy equipment in the • The Singapore’s Ministry of Trade & Industry expects the country manufacturing sector to return to positive growth in 2020
Construction sector growth in Malaysia Approved manufacturing investments in I (% y-o-y) I Malaysia (RMbn) N N 33.1 M 2.6% M D Y 0.3% 0.5% D Y 19 I I C -1.5% C 4Q18 1Q19 2Q19 3Q19 1H18 1H19 A A Source: MIDA T Construction in Singapore (Real growth) T Manufacturing in Singapore (Real growth) O 2.7% 2.8% 2.9% O 4.6% R S R S -0.4% -1.2% -1.7% S G S G -3.3%
4Q18 1Q19 2Q19 3Q19 4Q18 1Q19 2Q19 3Q19
UMW HOLDINGS BERHAD 25 EQUIPMENT SEGMENT SECTORAL SHIFT; EXPANSION OF PRODUCTS AND SERVICES
HEAVY EQUIPMENT INDUSTRIAL EQUIPMENT 1 Focus on more urbanised sectors – construction & mega infrastructure 1 Further expansion into the leasing Projects projects Est. cost Projects Est. cost business model Penang Transport Master Plan RM32bn Sarawak Coastal Highway RM5bn
Klang Valley MRT Line 3 (MRT3) RM20bn Sarawak Second Trunk Road RM6bn
KL-Singapore High Speed Rail RM20bn Sarawak Water Grid Phase 1 RM8bn
East Coast Rail Link sub-contracts RM18bn Labuan Bridge RM4bn
Pan Borneo Highway Sabah RM13bn Johor BRT RM3bn Bandar Malaysia infrastructure RM21bn Kota Kinabalu Water Supply Scheme RM3bn Ride on the urbanisation of Source: Affin-Hwang Research 2 Vietnam 2 Leverage on Papua New Guinea’s gold mining and construction sectors 3 Expand product line-up 4 Provision of value-added services 3 Diversify product base Implement extended warranty programme 5 and maintenance service contract
6 Venture into leasing business model and equipment-as-a-service
UMW HOLDINGS BERHAD 26 FINANCIAL HIGHLIGHTS EQUIPMENT
2,138.5 1,882.6 1,705.5 1,767.2 1,458.9 1,539.6 Revenue 1,382.8 58.0% (RM million) 65.0% 61.0%
35.0% 39.0% 42.0%
2012 2013 2014 2015 2016 2017 2018
218.2 226.5 195.8 183.5 160.1 PBT 145.6 141.8 68.0% (RM million) 75.0% 68.0%
25.0% 32.0% 32.0%
2012 2013 2014 2015 2016 2017 2018
Heavy Equipment Industrial Equipment
UMW HOLDINGS BERHAD 27 MANUFACTURING & ENGINEERING SEGMENT
UMW HOLDINGS BERHAD MANUFACTURING & ENGINEERING SEGMENT KEY PRODUCTS
Contract Manufacturer for Aerospace Component Aero Engine Fan Cases
Shock Absorbers
Auto Components Shock Absorbers Auto parts • Oil Filters, Eco Filters & Fuel Filters Cylinder Head Cover Motorcycle suspension units • Air Filters & Cabin Filters • Hydarulic & ATF Filters • Brake pads Engineering plastic • Brake Fluid & Long-life • Cam Cover or Cylinder Head Cover • For both OEM and REM markets. Radiator Coolant • Air Intake Manifold • Auto Transmission Fluid • Charcoal Canister • Export to more than 38 countries • Integrated Air Cleaner Assembly from Malaysia.
Premium range of Repsol lubricants for the automotive industry Lubricants across Asia and Southeast Asia UMW’s proprietary Region lubricant brand.
UMW HOLDINGS BERHAD 29 MANUFACTURING & ENGINEERING SEGMENT MANUFACTURE OF AERO ENGINE FAN CASES
Component Part Manufacturing for RR’s Most Advanced UMW Aerospace Sdn Bhd Passenger Aircraft Engines
• UMW is the 1st Malaysian Tier 1 Supplier to Rolls-Royce - single-source supplier of fan cases for Trent 1000, with production for Trent 7000 engines expected in 4Q20 • Long-term contract of 25+5 years; signed in 2015 • The manufacturing plant is located in Serendah, Selangor
Milestones Part of Rolls-Royce’s Asian Supply Chain
Single Source Final Assembly of the Trent 1000 and Trent 29 Nov 2017 2019 7000 engines in Singapore Delivery of the first fan case Ramp-up production
Delivered more than 150 units
2020 – Production ramp-up to continue
UMW HOLDINGS BERHAD 30 MANUFACTURING & ENGINEERING SEGMENT INDUSTRY OUTLOOK
AEROSPACE AUTO COMPONENTS • Production ramp-up is progressing well as per • Local indicators suggest stable demand for scheduled orders from Rolls-Royce. auto parts in Malaysia, underpinned by • Production of Trent 7000 fan case scheduled to healthy private consumption. commence in 4Q20. • Growth in the automotive industry will • Combine production of Trent 1000 and Trent sustain demand for lubricants, auto 7000 fan cases are expected to drive the components. volume beyond break-even in 2020. Sale of Motor Vehicle Parts & Accessories in Malaysia (%, y-o-y) 7.5
4.4 4.6 4.3 4.5 3.5
2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 Source: DoSM
UMW HOLDINGS BERHAD 31 MANUFACTURING & ENGINEERING SEGMENT EXPANDING AND STRENGTHENING OPERATIONS
Commencement of KYB-UMW’s plant expansion and modernisation & 01 improve synergies with UMWT and Perodua
Enhance position in aerospace business & entry into other High-Value 02 Manufacturing sectors
03 Continuous margin improvement efforts
04 Expansion of dealership network
05 Development of our own products
UMW HOLDINGS BERHAD 32 FINANCIAL HIGHLIGHTS MANUFACTURING & ENGINEERING
843.2 735.5 725.1 707.5 680.7 645.1 601.5 Revenue (RM million)
2012 2013 2014 2015 2016 2017 2018
24.6 21.5 14.8 16.8 9.9 PBT
(RM million) -17.7
-39.2 2012 2013 2014 2015 2016 2017 2018
Revenue – exited automotive components manufacturing business in India in late 2015. PBT – Losses in automotive components manufacturing business in India (2013); Start-up losses at Aerospace sub-segment (2017)
UMW HOLDINGS BERHAD 33 LANDBANK IN SERENDAH
UMW HOLDINGS BERHAD UNLOCKING VALUE OF OUR ASSETS MONETISING LONG-HELD ASSETS
861 acres Close to 40 acres of UMW’s land in of land in Serendah Serendah have been taken up so far Company Acreage
UMW Aerospace 24.0 acres
Multi-Code Electronics Industries (M) 8.25 acres Bhd Private local company 5.3 acres
T7 Kilgour Sdn Bhd 2.0 acres
We are actively negotiating with interested parties and hope to close some deals soon. UMW’s operations in Shah Alam to move to Serendah within the next few years.
UMW HOLDINGS BERHAD 35 THANK YOU
Nik Azlan Bin Nik Abdul Aziz Group Chief Financial Officer UMW Corporation Sdn. Bhd.
S. Vikneshwaran General Manager Group Investor & Media Relations Email: [email protected] Telephone: +603 20252104
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 this30th document May do not have2019 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 UMW HOLDINGS BERHAD information a prospective investor may require.