UMW Holdings Berhad. CORPORATE PRESENTATION October 2017

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1 UMW Holdings Berhad CORPORATE PRESENTATION October 2017

with Toyota 24 years with Daihatsu Founded in 1917

2 ENHANCING CAPABILITIES Laying Building Blocks for Excellence Tier 1 supplier to Rolls-Royce 35 years with Toyota 24 years with Daihatsu Founded in 1917 FAN CASE MANUFACTURER AUTOMOTIVE ASSEMBLY BICYCLE REPAIR SHOP 2

OUR BUSINESS Automotive Equipment M&E O&G (Listed)

Distribution Trading After-sales service Blending &

components Drilling operations Oilfield services

3 OUR BUSINESS Automotive Equipment M&E O&G (Listed) Manufacture Assembly Distribution Sales & Service Distribution Trading After-sales service Blending & Distribution of lubricants Manufacture of automotive components Drilling operations Oilfield services Unlisted O&G Assets Manufacture of fan case Manufacturing Land Rigs Trading

4 OUR SHAREHOLDERS - (As at 31/10/2017) Permodalan Nasional Berhad (PNB)/ PNB Managed Unit Trust Funds, 58.19% Foreign Shareholders, 11.34% KWAP, 8.16% Market Capitalisation (31/10/2017) RM6.1 billion Employees Provident Fund Board, 11.65% Other Local Shareholders, 10.66% * PNB and EPF shareholdings are based on direct interest and deemed interest 4

5 INTERNATIONAL PRESENCE 11 Countries Myanmar Automotive Equipment Manufacturing & Engineering Oil & Gas China Taiwan Employees 10,427 Vietnam Malaysia Papua New Guinea Singapore Australia Credit Rating RAM: AA2 Oman India Indonesia 5

6 AUTOMOTIVE Segment

7 UMW AUTOMOTIVE SEGMENT 51% 38% UMW Toyota Motor Sdn. Bhd.* Investment holding, importation and distribution of Toyota vehicles and related parts Perusahaan Otomobil Kedua Sdn. Bhd.** Investment holding and provision of management and administrative services 100% Perodua Sales Sdn. Bhd. Marketing and distribution of motor vehicles, related spare parts and other related activities 100% Assembly Services Sdn. Bhd. Assembler of vehicles 49% Perodua Auto Corporation Sdn. Bhd.*** 51% Investment holding and provision of management and administrative services 100% 65% 30% Automotive Industries Sdn. Bhd. Toyota Boshoku UMW Sdn. Bhd. UMW Toyotsu Motors Sdn. Bhd. 30% Toyota Capital Malaysia Sdn. Bhd. Manufacturer and supplier of exhaust systems Manufacturer of car seats Sales and service of Toyota and Lexus vehicles and parts Hire purchase financing of Toyota customers 49% 30% 49% 49% 51% 51% Perodua Manufacturing Sdn. Bhd. Perodua Global Manufacturing Sdn. Bhd. Perodua Engine Manufacturing Sdn. Bhd. Ingress Technologies Sdn. Bhd. Manufacturer and assembler of motor vehicles and other related activities Manufacturer and assembler of motor vehicles and other related activities Manufacturer and dealer in component parts including engines, couplings and transmission components Manufacturer of complete door assemblies and press parts 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 10% Toyota Tsusho Corporation ** 20% Daihatsu Motor Co., Ltd 20% MBM Resources Bhd 10% PNB Equity Resource Corporation Sdn Bhd 4.2% Mitsui & Co., Ltd 2.8% Mitsui & Co., ( Asia Pacific) Pte Ltd 5% Daihatsu (Malaysia) Sdn Bhd *** 41% Daihatsu Motor Co., Ltd 6% Mitsui Co., Ltd 4% Mitsui & Co., ( Asia Pacific) Pte Ltd

8 TOTAL INDUSTRY VOLUME (TIV) TIV % Change Over Previous Year RHS Total Industry Volume Unit Sales LHS 1,200,000 1,000, % 12.5% -2.0% 12.7% -0.8% 4.6% 4.5% 1.6% 0.0% -13.0% 20% 0% 800, , , , , , , , , , , ,124-20% -40% 400,000-60% 200,000-80% % Lower sales in 2016 were mainly due to weak consumer sentiment and stringent lending guidelines imposed by the financial institutions. Target for 2017 is 590,000 units (+1.7% growth) 8

9 LEXUS & TOYOTA UMW Toyota Motor Market Share Of TIV RHS UMW Toyota Motor Unit Sales LHS 200, , ,000 50, % 16.9% 17.0% 15.3% 15.2% 15.6% 14.8% 14.1% 14.4% 11.2% 101, , ,636 91,990 88,662 92,521 95,861 82,188 82,089 65, % 18% 16% 14% 12% 10% 8% 6% 4% 2% 0% Vios was the top selling model in 2016 with 38% of total Toyota sales. Hilux was second with 28%. The all-new Toyota Innova and face-lift Toyota Vios, Toyota Camry and Toyota Corolla Altis were launched in 4Q16. Importation of CBU cars and CKD components are transacted in US Dollar. Target for 2017 is 70,000 units. 9

10 PERODUA Perodua Market Share Of TIV RHS Perodua Unit Sales LHS 350, , , , , % 30.5% 31.1% 31.2% 188, , , , % 30.1% 29.9% 29.3% 189, , , , % 213, % 207,110 40% 30% 20% 100,000 10% 50, % Perodua maintained the No. 1 position in overall market share since 2006 Currently exporting to six countries, namely, Indonesia, Singapore, Mauritius, Fiji, Sri Lanka and Brunei. Perodua s first sedan, Bezza, was launched on 21 July Target for 2017 is 202,000 units. 10

0 94,902 102,174 47,235 14,325 10,960 87,910 Total 580.124 666.674 14.2 15.3 7.1 2.1 1.6 13.3 2015 213,307 32.

11 UMW GROUP S MARKET SHARE Units & Market Share (%) Brand Units Market Share % Units Market Share % Honda Proton Nissan Mazda Hyundai, Kia Others 91,830 72,290 40,706 12,493 9,470 81, , ,174 47,235 14,325 10,960 87,910 Total , % Perodua 207, % , % UMW Toyota 65, % Others 307, % , % UMW companies sold 272,220 units in 2016 with a market share of 47%. 11

12 EQUIPMENT Segment

13 EQUIPMENT SEGMENT 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 13

HEAVY EQUIPMENT Myanmar Malaysia Singapore

in Malaysia, Singapore, Myanmar and Papua New

supplying equipment to the jade mining and

Since 1979 Since 1996 Delivered 38 units of

14 HEAVY EQUIPMENT Myanmar Malaysia Singapore Since 1965 Papua New Guinea Komatsu franchise in Malaysia, Singapore, Myanmar and Papua New Guinea Has strong presence in Myanmar, supplying equipment to the jade mining and resource mining sectors. Since 1979 Since 1996 Delivered 38 units of Rosenbauer Panther Airport Fire Fighting Vehicles to MAHB from

INDUSTRIAL EQUIPMENT TOYOTA FORKLIFT FRANCHISE China Shanghai, Zhejiang Vietnam Malaysia Brunei Singapore Strong

Toyota forklift maintained its 50% market share in Malaysia s material handling equipment business.

Globally, UMW is the only Diamond member (the highest elite tier) in the Premier Club Recognition Programme,

15 INDUSTRIAL EQUIPMENT TOYOTA FORKLIFT FRANCHISE China Shanghai, Zhejiang Vietnam Malaysia Brunei Singapore Strong market leadership position No. 1 position in Malaysia since Toyota forklift maintained its 50% market share in Malaysia s material handling equipment business. Toyota Forklifts UMW is one of the Top 5 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. 15

16 MARINE AND POWER EQUIPMENT CompAir Air Compressor Honda Power Products Mitsubishi Marine Engines Ingersoll Rand Centrifugal Compressor Mitsubishi Gen-sets GE Reciprocating Compressor 16

17 MANUFACTURING & ENGINEERING Segment

18 KEY PRODUCTS AEROSPACE COMPONENT LUBRICANTS AUTO COMPONENTS Fan Case Lubricants & Fluids Shock Absorbers & Power Steering Lubricants & Fluids (China) Automotive Components Fluids & Chemicals 18

MANUFACTURE OF AERO ENGINE FAN CASES UMW AEROSPACE SDN BHD Component Part Manufacturing for RR s Most Advanced Passenger Aircraft Engines UMW is the 1 st Malaysian Tier 1 Supplier to Rolls-Royce The

19 MANUFACTURE OF AERO ENGINE FAN CASES UMW AEROSPACE SDN BHD Component Part Manufacturing for RR s Most Advanced Passenger Aircraft Engines UMW is the 1 st 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. UMW will be the only supplier ( single-source supplier ) for fan cases for both the engines. Be Part of Asian Supply Chain Development Single Source Final Assembly of the Trent 1000 and Trent 7000 engines in Singapore The manufacturing plant is located in Serendah, Selangor. The first delivery is targeted for late

20 OIL & GAS Segment 20

21 UMW OIL & GAS CORPORATION BERHAD Listed On Bursa Malaysia (55.73% subsidiary) A Malaysian-based multinational oil & gas ( O&G ) player focused on providing drilling and oilfield services for the upstream sector of the O&G industry. The demerger was completed on 11 July 2017 Revenue and profit(loss) for 1H17 will be reflected in UMW Holdings Berhad s financial performance for FY17 21

22 UNLISTED OIL & GAS SEGMENT - companies that are not part of the listed entity. Drilling & Exploration Trading and Oilfield services INDIA UMW Sher (L) Ltd. Jaybee Drilling Pvt. Ltd. 3 onshore drilling rigs OMAN Arabian Drilling Services LLC 7 onshore drilling rigs (CEASED OPERATIONS) MALAYSIA UMW Synergistic Generation Sdn. Bhd. Total power solutions provider UMW Oilfield International (M) Sdn. Bhd. Trading UMW Oilfield International (L) Ltd. CHINA Shanghai BSW Petro- Pipe Co. Ltd. INDIA SSAW line pipes Oil Country Tubular Limited Finishing mill OCTG & Line Pipe United Seamless Tubulaar Pvt. Ltd. Seamless steel pipes Zhongyou BSS (Qinhuangdao) Petropipe Co. Ltd. LSAW and SSAW line pipes SINGAPORE Tubulars International Pte. Ltd. Seamless steel pipes PFP Holdings Pty. Ltd. (offices in Australia, Malaysia, Singapore, Taiwan, China) Trading CHINA Jiangsu Tube-Cote Shuguang Coating Co. Ltd. MALAYSIA UMW Fabritech Sdn. Bhd. Fabrication Services Sichuan Haihua Petroleum Steel Pipe Ltd. Pipe coating Fabrication Electric Resistance Welded pipes Shanghai Tube-Cote Petroleum Pipe Coating Co. Ltd. CHINA UMW Coating Technologies (Tianjin) Co., Ltd Fabrication Services 22

23 ADDRESSING EXIT OF UNLISTED OIL & GAS SEGMENT No. of Assets Target 2017 Target 2018 Oil & Gas unlisted assets o 16 assets to exit. Drilling & Exploration 3 1- Ceased operations, to dispose assets 2- Active negotiations - o o Target to complete progressive exit by Likely to incur operational losses given limited income. OCTG & Line Pipe Fabrication Trading and Oilfield services Offer received, to exit 2- Active negotiations 2 Offer received, final negotiations 1 Phased out exit (Phase 1 completed, Phase 2 by year end) 1 - Offer received, finalisation 1 - Restructure and exit 1 To cease operations 2 active negotiations - 2- exit o o o Until exit, numerous mitigation strategies deployed to minimise operational losses such as ceasing operations. Various exit strategies considered including outright sale. In active negotiations with interested parties to dispose our equity in several companies. Total 16 23

24 FINANCIAL INFORMATION 24

25 10-YEAR GROUP FINANCIAL HIGHLIGHTS AUTOMOTIVE EQUIPMENT M & E OIL & GAS Revenue (RM million) Profit Before Taxation (RM million) 15,817 2,020 12,770 12,820 13,536 13,952 14,933 14,442 1,277 1,313 1,365 1,436 1,622 9,976 10,721 10, (2,130) 25

26 Key Performance Indicators ANNUAL DIVIDEND PAYOUT Payout Ratio (%) Gross Dividend Per Share Of RM0.50 Each (sen) March 08 Share Split from RM1.00 to RM0.50 each 26

27 Key Performance Indicators RETURN ON SHAREHOLDERS FUNDS 16.5% 17.0% 10.5% 13.5% 11.7% 21.9% 11.7% 10.1% -0.6% -29.3%

28 2016 FINANCIAL RESULTS 28

29 ANALYSIS OF GROUP RESULTS BEFORE IMPAIRMENTS & PROVISIONS (AUDITED) RM'mil Actual YTD Dec 2016 Actual YTD Dec 2015 Automotive Equipment Manufacturing & Engineering Others 12 (108) Oil & Gas (Listed) (400) (1) Oil & Gas (Unlisted) (171) (183) (571) (184) Profit/(Loss) before impairment Impairment - Oil & Gas (Listed) Oil & Gas (Unlisted) Provision - Others , Profit/(Loss) after impairment (2,130) 270 PATAMI (1,658) (37) 29

30 2016 REVENUE & PBT BREAKDOWN (AUDITED) Revenue Profit Before Taxation RM543 mil RM1,383 mil RM601 mil 5% 5% RM146 mil RM25 mil 4% RM497 mil 13% 22% 74% RM8,451 mil 77% Total - RM10,959 mil Total (RM2,130 mil) due to losses in O&G and, impairments and provisions Automotive Equipment M&E Oil & Gas 30

31 STRATEGIC DIRECTION 31

32 NEW STRATEGY - ANNOUNCED ON 19 JANUARY 2017 CORE BUSINESSES Planned strategic exit from O&G sector Automotive Equipment M&E O&G (Listed) Non-listed O&G Assets Drilling operations Oilfield services Manufacture Assembly Distribution Sales & Service Distribution Trading After-sales service Blending & Distribution of lubricants Manufacture of automotive components Manufacture of fan case Demerge via distribution in specie to the shareholders of UMWH Demerger completed on 3 July 2017 Manufacturing Land Rigs Trading Progressive exit 32

33 RATIONALE FOR EXIT FROM THE OIL & GAS SECTOR o Losses in the Oil & Gas segment have affected the Group s profitability o Recovery of the oil & gas industry may take much longer than expected o The slow recovery has resulted in the over supply of drilling rigs higher competition, reduced margins 33

34 BENEFITS TO UMWH FOLLOWING THE STRATEGIC EXIT 1 Stabilizing Our Earnings 2 Enhancing Financial Flexibility 3 Optimal Allocation of Resources o Oil & Gas investments were impacted by the low oil price environment o This has affected the Group s earnings o Exiting the oil & gas industry would result in improved profitability o Reduced debt at Group level o Gearing ratio will come down o Strengthened balance sheet o Improvement in the Group s financial position allowing for better financial flexibility o Demerger would reduce constraints on cash flow from oil & gas capex requirement o Enables the Group to embark on various asset allocation strategy for investments in growth areas Exit positions UMWH for more sustainable long-term profitability 34

35 OUR STRATEGIC PLANS MOVING FORWARD 1 Automotive - enhancing returns from our Automotive segment 2 Equipment - expanding market presence and new products 3 M&E - expanding further into high value manufacturing (Aerospace, etc.) 35

(Initial) o Expected to start operations in early 2019.

36 AUTOMOTIVE - ENHANCING VALUE o Second plant located in Bukit Raja, Klang o Strategic location o High automation o Focus on passenger vehicles o Plant & land size - 670,000 m². o Total Investment - RM2 billion o Annual Capacity - 50,000 units. (Initial) o Expected to start operations in early o o VALUE DRIVERS Boost capacity and capability More exciting new locallyassembled (CKD) models o Promotes localisation o Competitive pricing o Meeting market expectations on Energy-Efficient-Vehicles (EEV) 36

37 EQUIPMENT EXPANDING MARKET PRESENCE o Rich pickings in ASEAN o o o o VIETNAM: Government announced master plan for industrial development to 2025, with focus on electronics, telecommunications and industrial processing MYANMAR: According to World Bank, economy will grow an average of 7.1 percent per year in the next three years. Private and public investments in infrastructure services are forecast to rise THAILAND: Strong automotive hub, with greenfield investment in tire manufacturing yielding highest FDI, strong growth despite political unrest INDONESIA: Abundant mineral resources, government policy prioritises infrastructure and industrial manufacturing 37

38 MANUFACTURING & ENGINEERING SEGMENT A Low-to-High Strategic Transformation The Present Low Margin Business The Future High Margin Business Low Engineering Skills Base High Precision Engineering/Machining Low Barriers of Entry High Barriers of Entry (capex, skills) Low Value Manufacturing High Value Manufacturing 38

39 OUTLOOK FOR

40 OUTLOOK FOR 2017 Group Demerger to be completed by July 2017 Following demerger, gearing ratio is expected to improve significantly 2017 to be a turnaround and recovery year 2018 expected to be a much better year Automotive 272,000 units forecasted for UMW Group (46.1% of TIV) Toyota & Lexus 70,000 units Perodua 202,000 units 1 all-new & 3 face-lift models introduced in 4Q16; full-year contribution in 2017 To launch new models in 2H17 Perodua contribution sustainable with continued strong demand in entry-level segment. Equipment Over RM550 billion from catalytic mega projects in the pipeline - Pan Borneo Highway, LRT3, MRT2, MRT3, TRX, ECRL, HSR, Merdeka PNB 118, Bukit Bintang City Centre, Batu Kawan, etc. Establishing and expanding market presence in ASEAN Repositioning heavy equipment to more urbanised sectors Expanding products in the Industrial Equipment sector Strengthen forklift Fleet Management and rental business Focus on export opportunities for used equipment and parts To open 1S/2S facilities in outskirt industrial areas in Vietnam 40

41 OUTLOOK FOR 2017 Manufacturing & Engineering Lubricants business expansion into new markets in ASEAN, focusing on home-grown GRANTT lubricants Continued marketing and positioning of REPSOL brand in China in view of huge opportunities Autoparts business - transforming existing KYB plant to increase productivity and diversify product range Expanding into high value manufacturing Production of aero engine fan case for Rolls-Royce is progressing as scheduled Delivery of first fan case is targeted for end-2017 Oil & Gas Listed Oil & Gas assets to be reflected for first two quarters of 2017 Target for disposal of non-listed Oil & Gas assets by end 2018 Operational losses are expected pending demerger and disposal of non-listed assets 41

THANK YOU Roza Shahnaz Omar Director, Group Strategy UMW Corporation Sdn. Bhd. S. Vikneshwaran Head, Investor, Media Relations & Sustainability Email: vikneshwaran.

The information contained herein is not to be distributed without the consent of UMW Holdings Berhad.

financial situation and the particular needs of any specific audience.

should not be construed as an offer or a solicitation of any offer to buy or sell any securities.

42 THANK YOU Roza Shahnaz Omar Director, Group Strategy UMW Corporation Sdn. Bhd. S. Vikneshwaran Head, Investor, Media Relations & Sustainability Telephone: Corporate Portal 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.

UMW Holdings Berhad. CORPORATE PRESENTATION April 2017

UMW Holdings Berhad. CORPORATE PRESENTATION April 2017 UMW Holdings Berhad CORPORATE PRESENTATION April 2017 ENHANCING CAPABILITIES Laying Building Blocks for Excellence Tier 1 supplier to Rolls-Royce 35 years with Toyota 24 years with Daihatsu Founded in