UEM Edgenta Berhad (formerly known as Faber Group Berhad) 52 nd Annual General Meeting Persada Plus 25 th May 2015
Contents 1. Overview of UEM Edgenta 2. Key Highlights FY2014 3. Financial Results FY2014 4. Business and Operations Updates 5. Outlook and Strategy
Section 1 Overview of UEM Edgenta
INTRODUCING UEM EDGENTA We are now a Total Asset Management Company with strong presence in the healthcare, infrastructure and commercial sectors. 3
VISION MISSION AND VALUES OUR VISION OUR MISSION OUR VALUES Optimising assets to improve lives Our services, commitment to smarter thinking and improved solutions place us at the forefront of the industry. We create opportunities for clients and assets that positively influence society. Teamwork Integrity Passion Success 4
UEM EDGENTA AT A GLANCE 5
WHAT DO WE DO? UEM Edgenta now comprises 6 Core Business Units which cover the entire asset life cycle 5. Infra Services Pavement Railway Bridges Airports 1. Healthcare Services 2. Facilities Services 3. Energy Services 4. Industrial Services Asset Life Cycle Model 6. Asset Consultancy Project management Design & Consulting services Asset Maintenance Programmes 6
SELECTED ON-GOING PROJECTS CIKAMPEK-PALIMANAN EXPRESSWAY LRT 2 EXTENSION NSE FOURTH LANE WIDENING WOMEN AND CHILDREN S HOSPITAL 7
5-YEAR GROUP FINANCIAL HIGHLIGHTS Revenue (RM mil) Profit Before Tax (RM mil) Total Assets (RM mil) Earnings Per Share (RM Sen) Note: The 5-Year Group Financial Summary is based on Annual Audited Financial Statements for the respective years. For the purpose of this annual report, the impact of the pooling of interest method on the acquisition of Opus Group Bhd and Edgenta PROPEL Bhd (formerly known as Project Penyelenggaraan Lebuhraya Bhd) has not been reflected for the years 2010, 2011 and 2012. 8
CORPORATE STRUCTURE ASSET CONSULTANCY HEALTHCARE SERVICES INFRA SERVICES FACILITIES SERVICES PROPERTY DEVELOPMENT Other Subsidiaries Opus Group Berhad Opus International (M) Berhad Opus Management Sdn Bhd Soil Centralab Sdn Bhd Other Subsidiaries Opus International (NZ) Limited (New Zealand) 61.22% Opus International Consultants Limited (New Zealand) 43% Edgenta Healthcare Management Sdn Bhd (formerly known as Faber Healthcare Management Sdn Bhd) 57% Edgenta Mediserve Sdn Bhd (formerly known as Faber Medi-serve Sdn Bhd) Edgenta Mediserve (Sabah) Sdn Bhd (formerly known as FMS Services (Sabah) Sdn Bhd) 40% Sedafiat Sdn Bhd Edgenta Mediserve (Sarawak) Sdn Bhd (formerly known as FMS Services (Sarawak) Sdn Bhd) 40% One Medicare Sdn Bhd Cermin Cahaya Sdn Bhd Edgenta PROPEL Berhad (formerly known as Projek Penyelenggaraan Lebuhraya Berhad) Aquatrans Sdn Bhd Edgenta Facilities Sdn Bhd (formerly known as Faber Facilities Sdn Bhd) 75% Faber L.L.C (UAE) Edgenta Facilities Management Sdn Bhd (formerly known as Faber Facilities Management Sdn Bhd) Faber Star Facilities Management Limited (India) 51% Faber Sindoori Management Services Private Limited (India) Faber Development Holdings Sdn Bhd Faber Union Sdn Bhd Country View Development Sdn Bhd Faber Grandview Development (Sabah) Sdn Bhd Faber Heights Management Sdn Bhd 55% Rimbunan Melati Sdn Bhd Other Subsidiaries Other Subsidiaries Edgenta Healthtronics Sdn Bhd (formerly known as Healthtronics (M) Sdn Bhd) 60% Fresh Linen Services (Sabah) Sdn Bhd Updated as at 22 May 2015 9
Section 2 Key Highlights FY2014
COMPLETION OF MERGER IN OCT 2014 REBRANDED TO UEM EDGENTA IN APRIL 2015 5 Aug 2013 18 Apr 2014 26 Jun 2014 29 Oct 2014 9 Apr 2015 Proposal from UEM Group for the RM1.15bil proposed merger with Opus and PROPEL Faber enter into conditional share sale agreement with UEM Group for the acquisition of Opus and PROPEL Faber s shareholders approval obtained for the proposed merger Completion of Merger with Opus and PROPEL Faber officially rebranded as 11
RESULTS HIGHLIGHTS Full consolidation of PROPEL and OPUS financials FY2014 Revenue, EBITDA, PBT and PATANCI are all up against FY2013 EPS of 24.88 sen Full year dividend of 23 sen representing payout ratio of 92% Special dividend of 18 sen paid on 22 Jan 2015 Final dividend of 5 sen to be paid upon approval by shareholders in the AGM Strong Balance Sheet and cash flow generation Net cash generated from operating activities are in excess of RM300 mil Net cash position with high interest coverage ratio (22x) REVENUE RM3.09 bil 14.4% EBITDA RM366.7 mil 6.4% PBT RM324.5 mil 2.3% PATANCI RM202.4 mil 6.3% 12
SELECTED MAJOR NEW CONTRACTS SECURED RM1.03 bil Asset Management Services for Women and Children s Hospital over a period of 27 years Opus IC secured 6 out of 9 new NZTA highway maintenance and operations contracts (>NZD35 million in fees over the next 7 years) Runway upgrade for KLIA; and Kampung Sg. Serai Rawang Highway Exit on NSE RM3.07 bil 10-year new Concession Agreement for Hospital Support Services NZD20 million, 5-year contract by the Royal Commission for Jubail and Yanbu in Kingdom of Saudi Arabia Infra works related to the Integrated Pengerang Complex Project 13
Section 3 Financial Results FY2014
GROUP FINANCIAL HIGHLIGHTS Group Revenue and PATANCI grew by 14.4% and 6.3% Figures in RM Million unless otherwise stated FY2014 FY2013 Variance Amount % Revenue 3,089.3 2,699.7 389.6 14.4% Gross Profit 981.3 883.1 98.2 11.1% Gross Margin (%) 31.8% 32.7% - 0.9% PBT 324.5 317.2 7.3 2.3% PBT (%) 10.5% 11.7% - 1.2% PAT 241.9 229.8 12.1 5.3% PAT (%) 7.8% 8.5% - 0.7% PATANCI 202.4 190.4 12.0 6.3% PATANCI (%) 6.6% 7.1% - 0.5% EPS (Sen) 24.88 23.41 1.47 6.3% Liquidity Ratio 0.9x 1.0x - - Gearing Ratio 0.3x 0.1x - - Return on Equity (ROE) 15.9% 14.4% - - Return on Invested Capital (ROIC) 16.5% 16.1% - - 15
FY2014 REVENUE BREAKDOWN 53% of revenue was generated from AC; 36% contribution from Concession TOTAL REVENUE RM3.09 bil Healthcare & Facilities Services ( IFM ) Property Development 1% Concession Property Development 1% 22% 36% SERVICES 53% SECTORS Infra Services ( IS ) 24% Asset Consultancy ( AC ) 63% Non-Concession 16
REVENUE BREAKDOWN 53% of revenue were generated domestically 47% of revenue from international presence United Kingdom Canada and USA RM372mil (12%) RM134mil (4%) Malaysia RM1,628mil (53%) Australia RM175mil (6%) Note: Contribution from UAE and Indonesia are less than 1% New Zealand RM779mil (25%) 17
YOY REVENUE Higher revenue contributed by AC and IS divisions of RM284mil and RM102mil respectively 283.8 102.0 (15.6) RM389.6mil (14%) 3,089.3 2,699.7 19.4 Dec-13 IFM AC IS Property Dec-14 IFM AC IS Property Development Slight increase due to higher Variation Orders and reimbursable works for government hospital Higher revenue mainly due to consolidation of full year results of Opus SW (RM209 mil) and strengthening of NZD against MYR (RM67 mil) Higher revenue by mainly due to highway road maintenance works and Fourth Lane Widening project Decline in revenue due to lower sales in view of challenging market condition 18
YOY PROFIT BEFORE TAX (PBT) PBT is marginally higher by RM7.3mil due to set off of higher contribution by AC and IS and lower contribution from IFM 317.2 32.1 20.2-3.0-8.1 RM7.3mil (2%) 324.5-33.9 Dec-13 IFM AC IS Property Others Dec-14 IFM AC IS Property Development Lower PBT due to reversal of over accrued cost for UAE project of RM10.2mil and oneoff linen loss claimed of RM13.3mil in FY2013, and higher incineration & transportation costs incurred on clinical waste in Sabah of RM11.4mi Higher PBT by RM32.1mil contributed from higher revenue on new projects secured, lower professional fees incurred through maximizing utilisation of internal resource & reversal of deferred consideration arising from acquisition of Opus Stewart Weir Higher PBT due to more work progress and certifications for Fourth Lane Widening and Coastal Road projects Lower PBT flow through of lower revenue contribution for property development 19
DIVIDENDS For the past 5 years, the company has declared a total gross dividend of 79 sen 1 amounting to net payout of RM349 million 28% 37% 75% 25% 58% 92% 20% 20 18 8 8 10 10 5 2010 2011 2012 2013 2014 Final Dividend Special Dividend Net Payout Ratio (ex Special Dividend) Net Payout Ratio (inc Special Dividend) 92% PAYOUT RATIO FOR FY2014 For FY2014, the total dividend declared is 23 sen, representing payout ratio of 92%. Excluding special dividend, the payout ratio will be 20% Note: 1) Dividends paid between 2010 to 2012 are gross dividend while dividends declared and/or paid in 2013 to 2014 are single-tier (net) dividend 20
Million SHARE PRICE PERFORMANCE UEM Edgenta s share hit a record high intra-day price in the past 52 weeks @ RM3.85 on 21 st May 2015; also the highest recorded price in the last 15 years SHARE PRICE AND VOLUME (1 ST APRIL 2013 22 ND MAY 2015) 4.00 30 3.50 25 3.00 20 2.50 15 2.00 10 1.50 5 1.00 - Volume Share Price Source: S&P Capital IQ Share Price (Closing Price) Price Date Highest 3.81 21 May 2015 Lowest 1.48 2 May 2013 21
Apr-13 Jul-13 Oct-13 Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 CAPITAL APPRECIATION Market Capitalisation grew by more than 3.7x in under 3.5 years. Total shareholders return for the past 2 years significantly outperformed FBMKLCI by ~170% MARKET CAPITALISATION TOTAL SHAREHOLDERS RETURN VS FBMKLCI (1 ST APRIL 2013 22 ND MAY 2015) 376% (RM2,441.5 mil) 3,091.3 200% 180% UEM Edgenta FBMKLCI +184% 160% 2,220.9 140% 120% 80% 60% 925.7 40% 649.8 526.4 20% +15% 0% -20% Dec-11 Dec-12 Dec-13 Dec-14 22-May-15 Source: Bloomberg and S&P Capital IQ 22
Section 4 Business and Operations Updates
ASSET CONSULTANCY Opportunities exist in transportation sector which will drive the growth of AC Sector Expected to match 2014 s performance even though Alberta govt. expenditure on O&G projects might be affected by global oil crisis Significant opportunities exist in the market, especially in the transportation sector Position to bid for further large country council transport asset management contracts Strong growth potential in infrastructure sector supported by both public and private investment Well positioned as a potential key partner in the proposed Pan Borneo highway Developing a new pavement research centre to lead new technology development Opportunities exist specifically in transportation sector supported by Government spending Restructuring and cost cutting exercise of 2014 expected to manage performance for 2015 Strong growth outlook 6 further Network Outcome Contracts for the NZTA are coming to market in 2015 24
INFRASTRUCTURE SERVICE Positive outlook for 2015 as new infra development projects roll out and expansion into new segments/markets continue Business & Operations Updates Continued strong growth in revenue driven by large infrastructure projects such as 4 th Lane Widening (expected completion in 3Q2015) and Coastal Road in Penang 2015 Outlook Strong growth in infrastructure spending expected to boost revenue growth. Expected projects to be rolled out in 2015 Pan Borneo Highway, SKLIA Expressway Exploring new business opportunities in the utilities relocation segment To strengthen regional presence by exploring opportunity to provide O&M services to the soon to be completed Cikampek- Palimanan Expressway in Indonesia 25
HEALTHCARE SERVICES AND FACILITIES SERVICES nca signed on 11 March 2015 for concession period of 10 years New Concession Agreement with Ministry of Health executed on 11 March 2015 for concession period of 10 years. Edgenta Mediserve shall be the HSS concessionaire for government hospital in the northern region and 40% equity stake in each of the concessionaire JVs for HSS in Sabah and Sarawak Company UEM Edgenta s Shareholding Region No of Hospitals Edgenta Mediserve Northern Region of Peninsular Malaysia 32 Sedafiat Sdn Bhd 40% Sabah 26 One Medicare Sdn Bhd 40% Sarawak 23 To ensure no interruption to the HSS services and operations with the changing of the East Malaysia concession companies, the JVs co will outsource all HSS to Edgenta Mediserve for a period of 6 months at the below fees: Sabah (by Sedafiat) Sarawak (By One Medicare) RM77.7 million RM68.0 million 26
Section 5 Outlook and Strategy
OUTLOOK AND STRATEGY Continue Integration efforts of combined entity Streamline and improve the internal operations and processes. Engage employees to embrace the new vision, mission and values Business Model Improvement Strong focus on operational efficiency, procurement and cost model (i.e. set up of premix plant) Improve delivery and technology utilisation New Business Initiative Infra Services: Expansion into utilities relocation Facilities Services: Township management services Industrial Services: Penetrate O&G sector Energy Services: Rollout Control & Monitoring services Strengthen International Presence To strengthen presence in selected countries i.e. Indonesia and Middle East which have high growth potential 28