31st ANNUAL GENERAL MEETING - ChartNexusir.chartnexus.com/umw/doc/Annual General Meeting Presso.pdf · 2014. 3. 13. · NAGA 4 1. We purchased a new premium jack-up drilling rig in

UMW Holdings Berhad

31st ANNUAL GENERAL MEETING

27th June 2013

Datuk Syed Hisham bin Syed Wazir

President & Group CEO

UMW Holdings Berhad

3

CORPORATE INFORMATION

Authorised Share Capital RM1,000,000,000

Issued and Paid Up Share Capital RM584,146,966

Component Of FTSE Bursa Malaysia KLCI (FBMKLCI)

Bursa Malaysia Listing Sector Main Market, Consumer Products

Market Capitalisation at RM14.30 per share

(As at 26th June 2013)

RM16.7 billion

Share Price – 2012

Year High = RM12.16

(Intraday-19 December 2012)

Year Low = RM6.80

(Intraday-19 January 2012)

(As at 31st December 2012) = RM11.94

UMW Holdings Berhad

4

SHAREHOLDING STRUCTURE As at 31st May 2013

Permodalan Nasional Berhad (PNB)/

PNB Managed Unit Trust Funds,

50.14%

Employees

Provident Fund

Board, 14.05%

• PNB and EPF shareholdings are based on direct interest and deemed interest

Other Local

Shareholders, 11.30%

Foreign

Shareholders, 24.51%

UMW Holdings Berhad

5

BUSINESS STRUCTURE

UMW TOYOTA MOTOR

• Lexus

• Toyota

PERUSAHAAN OTOMOBIL

KEDUA

• Perodua

Automotive

LUBRICANTS & FLUIDS

• Pennzoil

• Repsol

• Grantt

• GEP Fluids & Coolants

SHOCK ABSORBERS

/POWER STEERING

• KYB

AUTO COMPONENTS

• Filtration Products

• Plastic Injection

• Metal Stamping

• DENSO Spark Plugs &

Wiper Blades

• GEP Filters & Brake Pads

Manufacturing

& Engineering

HEAVY EQUIPMENT

• Construction

• Mining

• Agriculture

• Forestry

• Industrial

• Fire Fighting & Oil Spill

INDUSTRIAL EQUIPMENT

• Material-Handling

Equipment

• Industrial Cleaning

Equipment

• Tyres & Batteries

MARINE & POWER

EQUIPMENT

• Industrial Compressors

• Marine Engines

• Industrial Standby

Generators

• Power Products

• CNG Refuelling Stations

Equipment

DRILLING OPERATIONS

• Semi-submersible Rig

• Jack-up Rigs

• Onshore rigs

• Workover Rigs

OILFIELD SERVICES

• Generator Packages

• Pipe Inspection, Repair &

Threading

• Pipe Coating

MANUFACTURE OF PIPES

• Seamless OCTG

• SSAW Line Pipes

• LSAW Line Pipes

FABRICATION

• Onshore & Offshore

Structures

• Industrial Cranes

OILFIELD PRODUCTS

Oil & Gas

UMW Holdings Berhad

6

DOMESTIC PRESENCE

Malaysia Branches Dealerships Total

UMW Toyota Motor

Sdn. Bhd. (Including Lexus) 42 61 103

Topmark

(Division of UMW Toyota) 5 - 5

Perusahaan Otomobil Kedua

Sdn. Bhd. (Associate) 41 144 185

UMW Industries (1985)

Sdn. Bhd. 16 - 16

UMW Industrial Power

Sdn. Bhd. 8 - 8

UMW (East Malaysia)

Sdn. Bhd. (Sabah & Sarawak) 9 - 9

UMW Equipment

Sdn. Bhd. 5 - 5

Toyota Capital Malaysia

Sdn. Bhd. (Associate) 5 - 5

Total 131 205 336

UMW Holdings Berhad

7

INTERNATIONAL PRESENCE 13 countries (including Malaysia)

China

Malaysia

Thailand

Indonesia

Vietnam

Myanmar

India

Papua

New Guinea

Singapore

Turkmenistan

Taiwan

Australia

Oman

Automotive

Equipment

Manufacturing & Engineering

Oil & Gas

Total Staff Strength (as of May 2013) 13,467

UMW Holdings Berhad

FINANCIAL HIGHLIGHTS

9

2012 Financial Performance

2012 2011 %

Revenue RM mil 15,863.6 13,535.8 17.2

Profit Before Taxation RM mil 2,009.7 1,365.3 47.2

Profit Attributable To Equity

Holders of The Company

RM mil 994.3 485.8 104.7

Shareholders’ Funds RM mil 4,850.8 4,249.2 14.2

Return on Shareholders’ Funds

% 21.9 11.7 87.2

Return on Total Assets % 17.1 13.0 31.5

Dividend Rate - Gross % 100.0 62.0 61.3

Dividend Payout Ratio % 58.8 75.2 (21.8)

Basic Earnings Per Share Sen 85.1 41.6 104.6

Net Assets Per Share RM 4.15 3.64 14.0

UMW Holdings Berhad

10

AUTOMOTIVE EQUIPMENT M & E OIL & GAS

5,223

6,244

9,869 9,950 9,976

12,770

10,721

12,820

13,536

15,864

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

465

350

658754

856

1,277

847

1,313

1,365

2,010

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

10-YEAR GROUP FINANCIAL HIGHLIGHTS

Record Year

Profit Before Taxation

(RM million)

Revenue

(RM million)

UMW Holdings Berhad

11

3,4013,931

5,721

5,103

6,491

7,828

8,826

10,02410,541

11,792

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

10-YEAR GROUP FINANCIAL HIGHLIGHTS

1,9222,131

2,3422,560

3,130

3,5223,774

4,0274,249

4,851

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Shareholders‟ Funds

(RM million)

Total Assets

(RM million)

. . . AUTOMOTIVE EQUIPMENT M & E OIL & GAS

UMW Holdings Berhad

12

Key Performance Indicators – Dividend Policy

ANNUAL DIVIDEND PAYOUT, 50% OF PROFIT NET OF UNREALISED GAINS

28.0

45.0 48.8 50.3 50.857.7 59.0

75.8 75.2

58.8

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

% Of Group‟s Net Profit

12.0 10.519.0 20.5

30.037.0

20.030.0 31.0

50.0

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Gross Dividend Per

Share Of RM0.50 Each

(sen)

Target 50%

March 08

Share Split from

RM1.00 to RM0.50

each

October 03

2-for-3 Bonus

Issue

UMW Holdings Berhad

*

* Subject to shareholders’ approval

13

„AAA‟ CORPORATE CREDIT RATING

• UMW is rated AAA (Corporate Credit Rating) by RAM Rating Services Berhad

(RAM).

UMW Holdings Berhad

AUTOMOTIVE

Operations

15

600,123

615,000

627,753

585,000

590,000

595,000

600,000

605,000

610,000

615,000

620,000

625,000

630,000

2011 MAA forecast 2012 actual

TOTAL INDUSTRY VOLUME (TIV) FOR 2012

*MAA = Malaysian Automotive Association

+4.6%

UMW Holdings Berhad

Units

16

• UMW companies sold 295,759 units in 2012 with a market share of 47.1%.

• Our market share in 2011 was approximately 45%.

UMW Toyota106,62217.0%

Perodua189,13730.1%

Others331,99452.9%

UMW GROUP’S MARKET SHARE Units & Market Share (%) In 2012 Brand 2012 2011

Market

Share %

Units Market

Share %

Units

Proton

Nissan

Honda

Hyundai, Kia

Volkswagen

Others

22.5

5.8

5.6

2.1

2.1

14.9

141,121

36,271

34,950

13,168

13,019

93,465

26.4

5.4

5.4

1.5

1.2

15.3

158,657

32,276

32,480

9,259

7,350

91,450

Total 52.9 331,994 55.2 331,472

(2011)

Perodua

179,898

30.0%

(2011)

UMW Toyota

88,662

14.8% (2011)

Others

331,472

55.2%

UMW Holdings Berhad

17

UMW TOYOTA MOTOR ACHIEVEMENTS & HIGHLIGHTS IN 2012

1. UMW Toyota has maintained the No.1 position in the non-National segment for 23

consecutive years.

2. Production volume at UMW Toyota Motor‟s assembly/manufacturing arm reached 83,552

units, increased by 32% from 2011.

3. Vios continued to be UMW Toyota Motor‟s best-selling model, offering favourable design

at an affordable price, followed by Toyota Hilux - a new and improved version was

introduced to the market in October 2012.

4. Higher sales volume was recorded in 2012 due to:-

i. New models launched

ii. Incentives given to hybrid cars.

• Government introduced import and excise duties exemption for hybrid cars,

up to 2,000cc in 2011.

• This exemption will expire on 31st December 2013.

• We have 3 models in this category – Toyota Prius, Toyota Prius C and Lexus

CT200h.

iii. Special promotions in conjunction with UMW Toyota Motor‟s 30th Anniversary

celebrations.

UMW Holdings Berhad

18

TOYOTA MODEL LAUNCHES IN 2012

20 February 2012

Toyota Prius C 1.5 Hybrid

RM97,000

1 June 2012

Toyota 86

RM243,000 - RM249,000

1 June 2012

Toyota Camry

RM149,000 - RM181,000

11 January 2012

Toyota Avanza

RM65.8k to RM79.6k

UMW Holdings Berhad

19

LEXUS MODEL LAUNCHES IN 2012

March 2012

Lexus GS Series

OTR from RM376,000

May 2012

Lexus RX Series

OTR from RM369,000

UMW Holdings Berhad

20

PERODUA ACHIEVEMENTS & HIGHLIGHTS IN 2012

1. Retained No. 1 position for the 7th consecutive year in 2012, contributed by the best-

selling Myvi and increased sales of Alza.

2. Perodua produced 194,985 units (including export) for 2012 in tandem with the sales

demand.

3. Currently, Perodua exports its vehicles to seven countries, namely, Singapore, Brunei,

Mauritius, Fiji, Sri Lanka, the United Kingdom and Nepal.

4. Perodua also exports its Myvi model to Indonesia under the Daihatsu Sirion badge.

5. A new plant in Rawang is being set-up and it will be able to produce 100,000 vehicles

yearly on a one-shift cycle, by the middle of 2014.

UMW Holdings Berhad

21

PERODUA MODEL LAUNCHES IN 2012

2 February 2012

Alza SR

From RM53,517

16 June 2012

New Alza ZHV Advanced Version

From RM69,517

UMW Holdings Berhad

22

PROSPECTS FOR 2013

Malaysian Automotive Association (MAA) target = 640,000 units (+2.0% growth)

We expect a very competitive market in 2013 due to healthy demand and new model

launches.

We hope to maintain our market share between 45% and 47%.

UMW Holdings Berhad

EQUIPMENT

Operations

24

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 beverages, material handling and logistics

EQUIPMENT DIVISION

UMW Holdings Berhad

25

EQUIPMENT DIVISION ACHIEVEMENTS & HIGHLIGHTS IN 2012

1. Our Equipment Division continued to generate strong revenue due to sustained

demand for major equipment and forklifts, and expansion of equipment rental fleet

size.

2. UMW continues to be the No. 1 in the heavy equipment segment, with an overall market

share of above 30%.

3. Toyota forklift maintained its 50% market share in Malaysia‟s material handling

equipment business.

4. UMW again won the prestigious President‟s Gold Award 2012 from Toyota Material

Handling International for excellent performance in sales and customer support.

5. Our operations in Papua New Guinea registered a strong turnaround due to a new parts

supply agreement signed with the mining sector.

UMW Holdings Berhad

26

PROSPECTS FOR 2013

EQUIPMENT DIVISION

• We are confident of our Equipment Division‟s performance for 2013.

• The domestic situation in the jade mining area of Myanmar has stabilised. Jade

mining activities are expected to resume in the second half of 2013. Demand for

equipment is forecasted to improve.

• Profitability of the Division is expected to sustain resulting from better cost

management and increased parts sales.

• We hope to maintain our 50% market share for the forklift business in Malaysia.

• We have also recently been awarded a contract in March 2013 to supply 15 units of

Airport Fire-Fighting Vehicles and 1 unit of Tactical Simulator Static Cabin to

Malaysia Airports Holdings Berhad (MAHB) at a total value of more than RM45

million.

UMW Holdings Berhad

OIL & GAS

Operations

28

OIL & GAS OPERATIONS

Upstream Exploration & Production

• Drilling Operations

• Oilfield Services

- Generator Packages

- Pipe Inspection, Repair & Threading

- Pipe Coating

Manufacture Of OCTG & Line Pipes

• Fabrication

• Oilfield Products

UMW Holdings Berhad

29

OIL & GAS DIVISION ACHIEVEMENTS & HIGHLIGHTS

NAGA 1

1. The current contract duration is for five years which commenced in 2010, valued at

USD250 million, with Petronas Carigali Sdn. Bhd.

2. During the period, rig upgrading works were carried out for a duration of about nine

months. In view of this, the current contract expiry date is extended to August 2016.

3. In addition, Petronas Carigali Sdn. Bhd. has awarded a contract extension for a

further period of two years commencing August 2016, valued at USD130 million.

UMW Holdings Berhad

30


NAGA 2

1. Commenced drilling operations in September 2010 after being awarded a contract by

HESS (Indonesia - Pangkah) Limited. The contract expired in March 2013.

2. NAGA 2 has secured a new contract from Petrovietnam Drilling and Well Services

Corp for the provision of drilling services.

3. The contract secured is for six months with an option for another six months,

starting from May 2013.

UMW Holdings Berhad

31


NAGA 3

1. Started working for Petronas Carigali Sdn. Bhd. in March 2011.

2. The contract was extended by Petronas Carigali Sdn. Bhd. for a 2-year period, worth

USD105 million in March 2012.

3. This will result in higher earnings contribution from NAGA 3.

UMW Holdings Berhad

32


NAGA 4

1. We purchased a new premium jack-up drilling rig in June 2012 for USD214 million.

2. We took delivery of the rig, NAGA 4 on 16th February 2013.

3. Entered into a contract with Petronas Carigali Sdn. Bhd., valued at approximately

USD158 million in April 2013.

4. The contract is for a duration of three years, with an additional two-year option for

renewal. The rig is operating at offshore Terengganu.

UMW Holdings Berhad

33


WORKOVER SERVICES

1. UMW Petrodril (Malaysia) Sdn. Bhd. owns and operates 4 hydraulic workover units

(HWUs).

2. Currently, 3 HWUs are in operations in Malaysia, Indonesia and Thailand.

3. We were awarded a USD140 million contract by Sabah Shell Petroleum Co. Ltd. to

supply a single combo top tension riser for the latter's offshore oil and gas

operations within deepwater Malikai field in Sabah in November 2012.

UMW Holdings Berhad

34


1. Revenue for 2012 increased by 40% due to:-

• A full-year operation of NAGA 3, coupled with an increased day-rate.

• A full-year operation of HAKURYU-5

• Additional revenue contribution from the Garraf Power Plant Phase 1 project in

Iraq.

2. In 2012, the Oil & Gas Division has achieved a profit before taxation of RM57.7 million.

This shows that the Division has turned-around after 2 consecutive years of losses.

3. UMW Oil & Gas signed an MoU with Institut Teknologi Petroleum PETRONAS (INSTEP)

for the establishment of a drilling academy to build local capabilities in the oil & gas

industry.

• 20 participants completed the first joint-programme, “Surface Blowout Preventer

Programme” in February 2013.

• A structured, long-term Professional Driller training programme is expected to start

in July 2013.

UMW Holdings Berhad

35

PROSPECTS FOR 2013

• Full-year contribution from the refurbished NAGA 1, higher daily operating rate for

NAGA 2 and continuing contract for NAGA 3.

• Additional contribution from the new NAGA 4.

• Commissioning of the new Electric Resistance Welded (ERW) and coating plant in

China.

• On 16th May 2013, we announced plans to list our Oil & Gas Division this year.

Accelerate the growth of the oil & gas business.

Enable us to unlock and crystallise the value of our investment in oil & gas.

Proceeds from the listing will enable us to finance our expansion and reduce

our borrowings.

Provide further flexibility for us to raise funds for other strategic purposes.

Increase UMW O&G‟s visibility as one of the leading oil & gas companies in

Malaysia.

UMW Holdings Berhad

(Due to the regulations related to the IPO, further details will be provided upon approval by the relevant authorities).

MANUFACTURING & ENGINEERING

Operations

37

KEY PRODUCTS

Auto

Components

Lubricants

& Fluids

Shock

Absorbers

& Power

Steering

Auto

Components

(India)

Fluids &

Chemicals

Lubricants

& Fluids

(China)

38

MANUFACTURING & ENGINEERING DIVISION ACHIEVEMENTS &

HIGHLIGHTS

1. Revenue for 2012 increased marginally due to:-

• Stronger demand for Kayaba products

• Improved sales from our automotive parts business in India.

• Improved lubricants business in China.

2. Consequently, the Division turned-around to register a profit before taxation of RM3.6

million, after registering a loss of RM11.9 million in 2011.

3. Started supplying high-end automotive lubricants to First Automobile Works (FAW) of

China – for Mazda, Hongqi and Ben Teng.

4. Lubetech Sdn. Bhd. secured new businesses from PERODUA and Delphi in 2012.

5. REPSOL products are distributed by a wide network of 350 Master Dealers.

UMW Holdings Berhad

39

PROSPECTS FOR 2013

• Higher capacity utilisation for our automotive component plants in India and

lubricant plant in China.

• Increased sales of Repsol and Pennzoil lubricant products.

• Kayaba is optimistic of a better performance this year, particularly from the

replacement equipment (RE) for export market.

• Further opportunities with the FAW Group, one of the biggest automotive

groups in China.

• We entered into a joint venture with the Blue Bird Group (BBG) of Indonesia to

provide lubricants, automotive components and service centre operations in

Indonesia. BBG is a leading transportation company in Indonesia with a fleet of

26,000 vehicles.

UMW Holdings Berhad

Corporate Social Responsibility 2012

Highlights

41

CORPORATE SOCIAL RESPONSIBILITY (CSR)

Our CSR strategy is in line with and reflective of our rallying call “Beyond Boundaries”.

• UMW CSR programmes are focused on:

• EDUCATION

• COMMUNITY DEVELOPMENT

• ENVIRONMENT

• We also invest our time in various CSR projects, through our employee-volunteers, the

UMW Community Champions.

•

UMW Holdings Berhad

42

UMW PINTAR Programme

(an educational programme)

• In 2012, UMW continued to sponsor 7 schools under the UMW-PINTAR

Programme. Our participation started in 2007.

• Activities include extra tuition classes, PMR motivational camps, etc.

• To date, 16 schools and 13,171 students have benefited from the

programme


43


UMW-MERCY Malaysia Outreach Clinic

(a community development programme)

• The UMW-MERCY CSR partnership continued on its mission to

bridge the healthcare divide for the 5th year.

• To date, approximately 14,563 people have benefited from our

projects with MERCY Malaysia since 2009.

UMW Holdings Berhad

44


UMW COMMUNITY CHAMPIONS‟ PROJECTS

- staff volunteerism programme, focusing on:-

• The environment (planted more than 4,000 trees over 3 years).

• The underprivileged

• Festive seasons

In 2012, UMW Community Champions clocked 3,576 community hours.

UMW Holdings Berhad

45

OTHER SOCIAL & CHARITABLE ACTIVITIES

• Toyota Classics Concert 2012 managed to raise RM320,328. The

proceeds were donated to two charitable and non-governmental

organisations:

i. Persatuan Pemulihan Orang-Orang Cacat Selangor & Wilayah

Persekutuan;

ii. Malaysia-Japan International Institute of Technology.

• Contribution for major religious festivals‟ celebrations

• UMW also has an annual scheme to award small grants and special

donations to the community on a case-to-case basis.


UMW Holdings Berhad

QUESTIONS

from

MINORITY SHAREHOLDER WATCHDOG

GROUP (MSWG)

47

Strategic and Financial Matters

1. The Chairman in his statement stated that the Automotive Division achieved record

sales and remained the biggest contributor to the Group‟s earnings.

Q1: Given the intense competition in the automotive industry, how confident is the Board that the

Company would be able to sustain the performance of its Automotive Division for FY2013?

A1: We are not new to competition in the Automotive Industry. There will always be new

and competitively-priced models introduced by various players in the industry. Our

strategy is to provide value-for-money models and a positive ownership experience.

For now, UMW Toyota Motor and Perodua are maintaining their 2013 sales targets.

Q2: Would there be any launch of new models this year?

A2: New model launches are part of our strategy to keep up with the competition. We

launched the enhanced Camry earlier this month. We are unable to disclose new model

launches as this may have an impact on the sales of existing models. Announcements on

new or enhanced models will be made by UMW Toyota Motor and Perodua in due course.

48


2. It was reported in the latest quarterly announcement that the revenue of the

Equipment segment declined due to lower demand for the Group‟s major equipment

in Myanmar, but this was compensated by the higher parts sales in Niugini.

Q1: What are the factors that would impact the demand for equipment?

A1: The low worldwide demand for jade in Q4 2012 and Q1 2013 coupled with the

suspension of the jade mining industry by the Myanmar Government due to some

domestic issues, affected our operations in Myanmar, contributing to the lower revenue

achieved.

Q2: What is the Board’s view on the performance of this segment for the rest of the year?

A2: We are confident of our Equipment Division‟s performance for 2013. The domestic

situation in the jade mining area of Myanmar has stabilised. Jade mining activities are

expected to resume in the second half of 2013. Demand for equipment is forecasted to

improve.

We have also recently been awarded a contract in March 2013 to supply 15 units of Airport

Fire-Fighting Vehicles and 1 unit of Tactical Simulator Static Cabin to Malaysia Airports

Holdings Berhad (MAHB) at a total value of more than RM45 million.

49


Q3. What is the nature of impairment loss of RM25.2 million on property, plant and

equipment?

A3. The carrying amount of property, plant and equipment are reviewed at each reporting

date to determine whether there is any indication of impairment. When such indication

exists, the carrying amount of the assets are written down immediately to its recoverable

value, to reflect the market value. In this case, assets being impaired are rigs and property.

50

CORPORATE GOVERNANCE MATTERS

Q1: We noted that the Company had not disclosed the executive directors’ remuneration

according to the requirement under Chapter 9, Appendix 9C, Part A of the Main Market Listing

Requirement in 11(b) where directors’ remuneration must be disclosed by band of RM50,000. We

would like to seek the Board’s explanation on the matter.

A1: We wish to highlight that Directors‟ Remuneration has been disclosed on page 63

(Corporate Governance) and page 179 (Note 29 of the Financial Statements) of the Annual

Report, according to the respective bands. In respect of the Corporate Governance

section, disclosure of the 2012 remuneration starts with the RM100,000 band as none of

the Directors is in the RM50,000 band level whereas in 2011, one of the Directors fell

within the RM50,000 band level as disclosed in the Financial Statements.

Q2: We also noted the Board’s view on gender diversity on board and we look forward to its

implementation and disclosure of the measures and positive steps taken in future Annual Reports.

A2: The Board takes cognisance of MSWG‟s remarks on the above matter and will

endeavour to include women participation in the management as well as the Board to fill

vacancies as and when these arise. In identifying suitable candidates to fill these

vacancies, the Board will assess the suitability of all candidates, based on their merits

and contribution to the Board, regardless of gender.

China

Malaysia

Thailand Indonesia

Vietnam

Myanmar

Papua New Guinea

Singapore

Turkmenistan

Taiwan

Australia

India Oman

Terima Kasih

Sag Bol

Cyay Zun Tin Par Tel

謝謝

cám ơn

Tanikiu

Thank You

Terima Kasih

ขอบคณุ நன்றி شكًرا

31st ANNUAL GENERAL MEETING - ChartNexusir.chartnexus.com/umw/doc/Annual General Meeting Presso.pdf · 2014. 3. 13. · NAGA 4 1. We purchased a new premium jack-up drilling rig in

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