Beyond Boundaries UMW Holdings Berhad Corporate Presentation CIMB 10 th Annual Malaysia Corporate Day 4 th & 5 th January 2018 1
Introduction 2
OUR JOURNEY Enhancing our capabilities Laying the building blocks for excellence Founded in 1917 Automotive Assembly Tier 1 Supplier Bicycle repair shop 35 years with Toyota 24 years with Daihatsu Fan Case Manufacturer Rolls-Royce 3
OUR SHAREHOLDERS As at 31/11/2017 PNB Permodalan Nasional Berhad/ PNB Managed Unit Trust Funds, 58.28% 58.28% RM 6.2b EPF 31/11/2017 Foreign Shareholders Employee Provident Fund Board, 11.65% 11.65% Market Capitalisation Foreign Shareholders, 11.32% 10.58% 8.17% 11.32% Other Local Shareholders KWAP Other Local Shareholders, 10.58% Kumpulan Wang Amanah Pekerja, 8.17% 4
OVERVIEW OF OUR BUSINESSES 01 Automotive 02 Equipment 03 M&E Manufacture Assembly Distribution Sales & service Distribution Trading After-sales service Blending & distribution of lubricants Manufacture of automotive components Manufacture of fan case 04 Others Oil & Gas - Unlisted Manufacture Land rigs Trading 5
INTERNATIONAL PRESENCE 11 countries Myanmar Automotive Equipment Manufacturing & Engineering Oil & Gas China Taiwan 10,427 Vietnam Malaysia Employees AA2 RAM Credit Rating Oman India Papua New Guinea Singapore Australia Indonesia 6
Our Automotive business 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. Daihatsu Perodua Engine Manufacturing 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 Manufacturer of engine and engine components for Energy Efficient 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 *** 41% Daihatsu Motor Co., Ltd 2.8% Mitsui & Co., ( Asia Pacific) Pte Ltd 6% Mitsui Co., Ltd 5% Daihatsu (Malaysia) Sdn Bhd 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 1,000,000 12.5% -2.0% 12.7% -0.8% 4.6% 4.5% 1.6% 0.0% -13.0% 20% 0% 800,000 600,000 548,115 536,905 605,156 600,123 627,753 655,793 666,465 666,674 580,124 521,907-20% -40% 400,000-60% 200,000-80% 0 2008 2009 2010 2011 2012 2013 2014 2015 2016 11M2017-100% 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) UMW Holdings Berhad 9
LEXUS & TOYOTA UMW Toyota Motor Market Share Of TIV RHS UMW Toyota Motor Unit Sales LHS 200,000 150,000 100,000 50,000 0 18.6% 17.0% 15.3% 15.2% 15.6% 14.8% 14.1% 14.4% 101,839 11.2% 106,622 103,636 91,990 88,662 92,521 95,861 82,089 65,110 63,100 2008 2009 2010 2011 2012 2013 2014 2015 2016 11M2017 20% 18% 16% 14% 12% 10% 8% 6% 4% 2% 0% The improved models of Toyota Hilux, Fortuner, Innova and Vios were launched in the second half of 2017. Vios was the top selling model in 2017 with 34% of total Toyota sales. Hilux was second with 27%. Importation of CBU cars and CKD components are transacted in US Dollar. UMW Holdings Berhad 10
PERODUA Perodua Market Share Of TIV RHS Perodua Unit Sales LHS 350,000 35.7% 40% 300,000 250,000 200,000 150,000 30.5% 31.1% 31.2% 167,393 166,736 188,641 30.0% 30.1% 29.9% 29.3% 189,137 196,071 195,579 179,989 32.0% 213,307 207,110 184,707 30% 20% 100,000 10% 50,000 0 2008 2009 2010 2011 2012 2013 2014 2015 2016 11M2017 0% 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. The all-new Perodua Myvi was launched on 16 November 2017. Target for 2017 is 202,000 units. UMW Holdings Berhad 11
UMW GROUP S MARKET SHARE Units & Market Share (%) 2015 213,307 32.0% 35.7% Perodua 11.2% 207,110 UMW Toyota 65,110 2015 95,861 14.4% UMW companies sold 272,220 units in 2016 with a market share of 47%. Brand 2016 2015 Others 307,904 53.1% 2015 357,506 53.6% Honda Proton Nissan Mazda Hyundai, Kia Others Units 91,830 72,290 40,706 12,493 9,470 81,115 Market Share % 15.8 12.5 7.0 2.2 1.6 14.0 Units 94,902 102,174 47,235 14,325 10,960 87,910 Total 580.124 666.674 Market Share % 14.2 15.3 7.1 2.1 1.6 13.3 12
Our Equipment business 13
EQUIPMENT SEGMENT Heavy Equipment Industrial Equipment Marine & Power Equip 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 14
HEAVY EQUIPMENT Myanmar Malaysia Singapore Papua New Guinea Since 1965 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 2010-2015 15
INDUSTRIAL EQUIPMENT Toyota Forklift Franchise China Shanghai, Zhejiang Vietnam Malaysia Brunei Singapore 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 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. 16
MARINE AND POWER EQUIPMENT CompAir Air Compressor Honda Power Products Mitsubishi Marine Engines Ingersoll Rand Centrifugal Compressor Mitsubishi Gen-sets GE Reciprocating Compressor 17
Our Manufacturing & Engineering business 18
KEY PRODUCTS Aerospace Component Fan Case Lubricants Lubricants & Fluids Lubricants & Fluids (China) Fluids & Chemicals Auto Components Shock Absorbers & Power Steering Automotive Components 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. Successfully delivered the first fan case on 29 November 2017. 20
Others 21
OIL & GAS (UNLISTED) Companies that are not part of the listed segment No of remaining assets Jaybee Drilling Pvt Ltd Drilling & Exploration UMW Sher (L) Ltd Arabian Drilling Services CEASED OPERATIONS 3 Shanghai BSW Petro-pipe Co. Ltd OCTG & Line Pipe Zhongyou BSS(Qinhuangdoa) Petropipe Co. Ltd Oil Country Tubular Limited United Seamless Tubulaar Pvt Ltd 5 Tubulars International Pte Ltd UMW Fabritech Sdn Bhd -DIVESTED Fabrication UMW Coating Technologies (Tianjin) Co. Ltd 1 UMW Synergistic Generation Sdn Bhd - RATIONALISED Trading and Oilfield services UMW Oilfield International (M) Sdn Bhd. UMW Oilfield International (L) Ltd Sichuan Haihua Petroleum Steelpipe Co. Ltd-Sub - DIVESTED PFP Holdings Pty Ltd Jiangshu Tube-Cote Shuguang Coating Ltd 4 Shanghai Tube-Cote Petroleum Pipe Coating Total 13 22
Going Beyond Boundaries 23
TOWARDS A RESILIENT ORGANIZATION The broad strategic framework towards managing Group s challenges and future needs CONTINUED EXPANSION OF OUR CORE BUSINESS 01 ADDRESSING EXIT OF UNLISTED OIL & GAS SEGMENT 02 03 MONETIZING LONG HELD, LAND ASSETS UMW HOLDINGS BERHAD 24
CONTINUED EXPANSION OF OUR BUSINESS AUTOMOTIVE Enhancing and optimizing profitability EQUIPMENT Strengthening of heavy equipment segment with Komatsu M&E Continued expansion of core business and HVM 25
MONETISING LONG HELD, LAND ASSETS o o o Serendah Land 861 acres Opportunity exist for unlocking of value. Part of the land currently housed the Rolls-Royce fan casing project which acts as a catalyst for further development of Serendah. UMW Aerospace Sdn. Bhd s site LOW-DENSITY RESIDENTIAL COMMUNITY COMMERCIAL CORE WITH INTEGRATED CONNECTION TO LANDSCAPE HIGH-END, LOW-DENSITY RESIDENTIAL COMMUNITY AEROSPACE INDUSTRY CLUSTER AUTOMOTIVE INDUSTRY CLUSTER MIXED-USE & RESIDENTIAL LOOP ROAD MEDIUM-DENSITY AFFORDABLE HOUSING COMMUNITY 26
Performance Data 27
SELECTED GROUP FINANCIAL HIGHLIGHTS 1 2 Revenue (RM million) PBT (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 10,959 856 847 270 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 (2,130) 3 KPI Annual Dividend Payout Ratio (%) 4 KPI Gross Dividend Per Share of RM 0.50 each (sen) 100.0 50.8 57.7 59.0 75.8 75.2 58.8 78.7 76.1 30.0 37.0 20.0 30.0 31.0 50.0 44.0 41.0 20.0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 0.0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 0.0 March 08 Share Split from RM1.00 to RM0.50 each 28
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% 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 29
Prospects for 2018 30
CURRENT PROSPECTS - 2018 Automotive New models for 2018 Equipment Product and market expansion UMW Toyota to launch new car models to boost market share Perodua contribution sustainable with continued strong demand in entry level segment Leveraging on Partner s (KOMATSU & TICO) strength to boost product range and market penetration Expanding value added services total solutions provider M&E Growth area Increasing market share for lubricants business in existing markets (Malaysia, China Indonesia) Aerospace plant commence full operations and ramping up production Others Focus on divestment of unlisted Oil & Gas assets UMW is actively implementing action plans towards exit from this segment Target complete disposal by 2018 31
THANK YOU Roza Shahnaz Omar Director, Group Strategy UMW Corporation Sdn. Bhd. S. Vikneshwaran Head, Investor, Media Relations & Sustainability Email: vikneshwaran.s@umw.com.my Telephone: +603 5163 5000 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 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.