#1UMW Beyond Boundaries UMW Holdings Berhad Corporate Presentation September 2018 UMW UMW 2451#2Introduction#3OUR JOURNEY Enhancing our capabilities Laying the building blocks for excellence Founded in 1917 Equipment Distribution Automotive Assembly Aerospace Bicycle repair shop >50 years with Komatsu >36 years with Toyota >50 years with TICO >25 years with Daihatsu R Rolls-Royce® UMW Fan Case Manufacturer for Rolls-Royce Tier 1 supplier UMW HOLDINGS BERHAD 3#4OUR SHAREHOLDERS As at 28th September 2018 PNB Permodalan Nasional Berhad & PNB Managed Unit Trust Funds, 58.42% EPF Employees Provident Fund Board, 10.57% 10.57% Other Local Shareholders ■ Other Local Shareholders, 13.84% UMW 58.42% RM 5.9b 28/09/2018 Market Capitalisation 10.81% 13.84% 6.36% Foreign Shareholders ☐ Foreign Shareholders, 10.81% KWAP Kumpulan Wang Persaraan (Diperbadankan), 6.36% UMW HOLDINGS BERHAD#5OVERVIEW OF OUR BUSINESSES 01 Automotive UMW QUALITY Manufacture Assembly Distribution • Sales & service 02 Equipment Distribution • Trading • Leasing After-sales service 03 M&E 04 Others • Blending & distribution of lubricants Manufacture of automotive components Manufacture of fan case Oil & Gas Unlisted • • Manufacture of OCTG and Line pipes Land rigs Trading UMW HOLDINGS BERHAD 5#6INTERNATIONAL PRESENCE 10 countries 8,346 Employees AA2- Z ■ RAM ■ Credit Rating Oman India UMW Myanmar Automotive Equipment Manufacturing & Engineering Oil & Gas China Vietnam Malaysia Papua New Guinea Singapore Australia Indonesia UMW HOLDINGS BERHAD 6#7Our Automotive business#8UMW AUTOMOTIVE SEGMENT UMW 51% UMW Toyota Motor Sdn. Bhd.* Investment holding, importation and distribution of Toyota vehicles and related parts 100% 38% PERODUA Perusahaan Otomobil Kedua Sdn. Bhd.** Investment holding and provision of management and administrative services Perodua Sales Sdn. Bhd. LEXUS TOYOTA 100% Assembly Services Sdn. Bhd. Assembler of vehicles 49% Perodua Auto Corporation Sdn. Bhd.** *** 51% Perodua Manufacturing 100% Automotive Industries Manufacturer and 49% supplier of exhaust Sdn. Bhd. Sdn. Bhd. systems 65% Toyota Boshoku UMW Sdn. Bhd. Manufacturer of car seats Marketing and distribution of motor vehicles, related spare parts and other related activities Investment holding and provision of management and administrative services Manufacturer and assembler of motor vehicles and other related activities 51% 49% Perodua Global Manufacturing Sdn. Bhd. Perodua Engine Manufacturing Sdn. Bhd. 30% Ingress Technologies Sdn. Bhd. 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% 30% UMW Toyotsu Motors Sdn. Bhd. Sales and service of 51% Toyota and Lexus vehicles and parts 30% Toyota Capital Malaysia Sdn. Bhd. Hire purchase financing of Toyota customers 49% *39% Toyota Motor Corporation UMW 10% Toyota Tsusho Corporation Daihatsu Perodua Engine Manufacturing Sdn. Bhd. 51% Daihatsu Motor Co., Ltd Manufacturer of engine and engine components for Energy Efficient Vehicles **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#9TOTAL INDUSTRY VOLUME (TIV) M MALAYSIAN AUTOMOTIVE YASSOCIATION TIV % Change Over Previous Year RHS Total Industry Volume ("TIV") - Unit Sales LHS 1,200,000- 12.5% 12.7% MAA 2018 TIV forecast 15.0% 4.6% 4.5% 1.6% 1,000,000 -2.0% -0.8% 0.0% 585,000 units 5.0% -13.0% -0.6% -5.0% 800,000 -15.0% 655,793 666,465 666,674 605,156 627,753 600,123 580,124 576,635 -25.0% 600,000 548,115 536,905 1423,730-35.0% 400,000 -45.0% -55.0% 200,000 -65.0% 0 -75.0% 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 8M18 Source: Malaysian Automotive Association • • Lower sales in 2017 were mainly due to weak consumer sentiment and stringent lending guidelines imposed by the financial institutions. TIV stood at 423,730 units in the first eight months of 2018. MAA revised its TIV forecast for 2018 to 585,000 units (+1.5% growth) from 590,000 units previously. UMW UMW HOLDINGS BERHAD 9#10LEXUS & TOYOTA UMW Toyota Motor Market Share Of TIV RHS UMW Toyota Motor Unit Sales LHS LEXUS TOYOTA 200,000 18.6% 17.0% 15.3% 15.2% 14.8% UMWT 20.0% 2018 18.0% 15.6% 14.1% 14.4% sales target 16.0% 150,000 70,000 units 14.0% 12.2% 11.2% 12.0% 106,622 101,839 103,636 95,861 100,000 91,990 92,521 88,662 10.0% 82,089 70,445 8.0% 65,110 50,434 6.0% 50,000 4.0% 2.0% 0 2008 0.0% 2009 2010 2011 2012 2013 2014 2015 2016 2017 8M18 Source: Malaysian Automotive Association • Distributes 6 CKD and 7 CBU Toyota models. Lexus models are all CBU. • Top selling Toyota models in 2017 - Vios (35%) and Hilux (27%). • Importation of CBU cars and CKD components are transacted in US Dollar. • The all-new models launched in 2018 - Toyota Harrier (January), Toyota C-HR (March) and Lexus LS 500 (March). UMW UMW HOLDINGS BERHAD 10#11PERODUA • • • Perodua Market Share Of TIV RHS Perodua Motor Unit Sales LHS Perodua 350,000 40.0% 35.7% 35.5% 2018 300,000 32.0% 30.5% 31.1% 31.2% 30.0% 29.9% sales target 35.0% 29.3% 209,000 units 30.0% 250,000 213,307 207,110 204,887 188,641 196,071 195,579 25.0% 200,000 179,989 167,393 166,736 158,732 20.0% 150,000 15.0% 100,000 10.0% 50,000 5.0% 0 2008 0.0% 2009 2010 2011 2013 2014 2015 2016 2017 8M18 Source: Malaysian Automotive Association In 2017, Perodua maintained its No. 1 position in overall market share since 2006 (12th consecutive year). Currently exporting to six countries - Indonesia, Singapore, Mauritius, Fiji, Sri Lanka and Brunei. The all-new Perodua Myvi was launched on 16 November 2017. • Target for 2018 is 209,000 units (+2% growth). UMW UMW HOLDINGS BERHAD 11#128M18: UMW GROUP'S MARKET SHARE Units & Market Share (%) 2017 204,887 35.5% 37.5% 2017 70,445 12.2% 11.9% Perodua 158,732 UMW Toyota 50,434 50.6% Others 214,564 Source: Malaysian Automotive Association UMW UMW Group sold 209,166 units in 8M 18 with a market share of 49% (2017 -48%) Other Carmakers' Sales and Market Share Brand 8M 18 2017 Units Market Share % Units Market Share % Honda 74,951 17.7 109,511 19.0 Proton 44,709 10.6 70,991 12.3 Nissan 18,730 4.4 27,154 4.7 Mazda 9,844 2.3 9,730 1.7 Others 66,330 15.6 75,676 13.1 2017 301,303 Total TIV 423,730 576,635 52.3% UMW HOLDINGS BERHAD 12#13Our Equipment business#14EQUIPMENT SEGMENT HEAVY EQUIPMENT KOMATSU LS Mtron Rrosenbauer ELGIN TOYOTA INDUSTRIAL EQUIPMENT (A) AICHI TOKAI INDUSTRIAL EQUIPMENT Material handling Marine & Power RAYMOND CompAir HONDA POWER PRODUCTS TENNANT DESMI EVERDIGM BOMAG FAYAT GROUP (GSYÚASA BT T!!! TRELLEBORG R Ingersoll Rand. MITSUBISHI HEAVY INDUSTRIES, LTD. 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 UMW UMW HOLDINGS BERHAD 14#15Heavy Equipment Malaysia Myanmar Singapore Papua New Guinea Brunei KOMATSU Since 1965 · We have the largest equipment servicing fleet in Malaysia and can therefore provide extensive after-sales and maintenance services to our clients wherever they may be. BEARER UMW BOMAG Since 1979 Prosenbauer Since 1996 Delivered 38 units of Rosenbauer Panther Airport Fire Fighting Vehicles to MAHB from 2010-2015 UMW HOLDINGS BERHAD 15#16Industrial Equipment Material Handling Toyota Forklift Franchise TOYOTA INDUSTRIAL EQUIPMENT Since 1967 Malaysia China: Singapore Shanghai, Zhejiang Vietnam Brunei 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 10 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. UMW UMW HOLDINGS BERHAD 16 16#17Industrial Equipment Marine & Power CompAir Air Compressor Mitsubishi Marine Engines Mitsubishi Gen-sets UMW AComple Powered by 2 units MS12-MPTK highine Shipping Sdn Bhd, Miri Sarawak MITSUBISHI & Comple 56R2-MPTK2 SA SERIES (VEE TYPE) LTIRS EUT Honda Power Products Ingersoll Rand Centrifugal Compressor GE Reciprocating Compressor UMW HOLDINGS BERHAD 17#18EQUIPMENT SEGMENT Financial Highlights REVENUE CONTRIBUTION Heavy Equipment 40% 1 H 2018 Industrial Equipment 60% China Vietnam 3% PBT CONTRIBUTION Heavy Equipment 35% 1H 2018 Industrial Equipment 65% PNG 10% 16% Malaysia 45% Myanmar 39% Singapore 36% Malaysia 50% . UMW 28 September 2018 Signed a Joint Venture with Komatsu Formed a new company - UMW Komatsu Heavy Equipment Sdn. Bhd. UMW Corporation (74%) and Komatsu (26%) Komatsu to pay RM133.9 million for the 26% stake Objective To introduce more products/models to cater to urbanisation sector Opportunity to introduce SMARTCONSTRUCTION: ICT solutions to construction job sites Provision of value-added services through competitive product pricing, forex and financing assistance UMW HOLDINGS BERHAD 18#19Our Manufacturing & Engineering business#20MANUFACTURING & ENGINEERING SEGMENT Key Products Aerospace Component Aero Engine Fan Cases LOWLY Rolls-Royce® Auto Components Shock Absorbers & Power Steering KYB 21 UMW Lubricants UMW is the largest distributor of Repsol lubricants outside Spain, mainly driven by strong sales in China Automotive Components umw ADVANTECH Lubricants & Fluids Lubricants & Fluids (China) Fluids & Chemicals REPSOL PENNZOIL GRANTT CHR SLubriTech C GEP. Graffen Grantt lubricants, UMW's in-house brand was launched in 2015 Grantt lubricants are distributed in 9 countries, ie: Malaysia, Singapore, Brunei, the Philippines, Cambodia, Vietnam, Indonesia, Thailand and China. UMW HOLDINGS BERHAD 20#21MANUFACTURING & ENGINEERING SEGMENT Manufacture of Aero Engine Fan Cases UMW Aerospace Sdn Bhd ROLLS R Rolls-Royce ROYCE UMW is the 1st 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. The manufacturing plant is located in Serendah, Selangor. Successfully delivered the first fan case on 29 November 2017. 2018 cases. UMW Ramp-up production. Target to produce 70 fan Component Part Manufacturing for RR's Most Advanced Passenger Aircraft Engines Trent 1000 Trent 7000 Boeing 787 Dreamliner A330 New Engine Option Part of Rolls-Royce's Asian Supply Chain Single Source Final Assembly of the Trent 1000 and Trent 7000 engines in Singapore UMW HOLDINGS BERHAD 21 21#22MANUFACTURING & ENGINEERING SEGMENT Financial Highlights M&E PBT* 1H2018 RM25.9m PBT CONTRIBUTION * Lubricants 34% * excluding aerospace business The segmental loss before taxation of RM3.4 million is mainly due to start up losses incurred at the aerospace business. We expect the aerospace business to be profitable in 2020. UMW 1H 2018 Auto components 66% UMW HOLDINGS BERHAD 22#231H18 Financial Results#241H18 CONSOLIDATED FINANCIAL RESULTS RM' mil Revenue Associate's profit Profit before tax PATAMI 1H2018 1H2017 % yoy 5,389.2 5,729.2 -5.9% 112.0 73.2 53.1% 303.0 (175.1) > 100% 198.5 (189.1) >100% In 1Q 2018, the Company declared a single-tier dividend of 5 sen per share for the financial year ending December 2018, paid on 21 June 2018 SEGMENTAL BREAKDOWN OF CORE BUSINESSES M&E 6% Equipment 14% UMW 1H18 Revenue contribution Automotive 80% Equipment 24% 1H18 PBT contribution Automotive 76% *M&E registered a loss of RM3.4m due to start-up losses at the aerospace plant UMW HOLDINGS BERHAD 24#25REMAINDER OF THE UNLISTED OIL & GAS SEGMENT Companies No Company 1 2 3 45 * UMW Synergistic Generation Sdn. Bhd. Sichuan Haihua Petroleum Steelpipe Co. Ltd. * PFP Holdings Pty. Ltd. * UMW Fabritech Sdn. Bhd. * UMW Coating Technologies (Tianjin) Co. Ltd. * 6 Arabian Drilling Services LLC 7 United Seamless Tubulaar Pvt. Ltd. Status ✓ COMPLETED rationalisation ✓ COMPLETED ✓ Completed disposal of PFP Taiwan COMPLETED ✓ Executed SPA, awaiting authorities approval ✓ Ceased operations, finalisation of disposal of assets ✓ Ceased operations, under receivership and to proceed with disposal of assets Ongoing disposal onto the open market Shanghai BSW Petro-pipe Co. Ltd. 8 Oil Country Tubular Limited 9 Jaybee Drilling Pvt. Ltd. * 10 UMW Sher (L) Ltd. * * 11 12 13 14 UMW Oilfield International (L) Ltd. * 15 16 16 Zhongyou BSS (Qinhuangdoa) Petropipe Co. Ltd. Tubulars International Pte. Ltd. UMW Oilfield International (M) Sdn. Bhd. / Jiangshu Tube-Cote Shuguang Coating Co. Ltd. Shanghai Tube-Cote Petroleum Pipe Coating Co. Ltd. Active negotiations * subsidiary UMW UMW HOLDINGS BERHAD 25#26REMAINDER OF THE UNLISTED OIL & GAS SEGMENT Carrying value following write-downs RM 57m Associates & JVs ▪ Remaining carrying value for investments in associates and joint ventures ▪We do not expect any further material impact to the Group RM 11m Subsidiaries ▪Remaining carrying value for subsidiaries -We do not expect any further material impact to the Group UMW UMW HOLDINGS BERHAD 26#27Historical performance#281 SELECTED GROUP FINANCIAL HIGHLIGHTS Revenue (RM million) 15,817 14,933 14,442 13,952 13,536 12,770 12,820 10,721 10,437* *11,067 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 3 Gross Dividend Per Share of RM0.50 each (sen) 50.0 44.0 41.0 37.0 30.0 31.0 20.0 20.0 0.0 0.0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 March 08 Share Split from RM 1.00 to RM0.50 each *Restated UMW 2 PATAMI (RM million) 994 653 652 4 566 527 486 382 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Dividend Payout Ratio (%) (37) (1,658) >100.0 75.8 78.7 75.2 76.1 57.7 59.0 58.8 (641) 0.0 0.0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 UMW HOLDINGS BERHAD 28#29Looking Ahead#30OUR BROAD STRATEGY Focusing on mid to long term strategic initiatives to enhance growth 01 Optimising our - profitability and growth - Continued focus on our three core businesses and monetising long held assets Digitize and digitalize - the Group's business strategy is aligned with digital strategy - lot like initiatives across our operations UMW 02 20 03 Building capability & capacity Group Human - Resource transformation initiatives UMW HOLDINGS BERHAD 30#31AUTOMOTIVE STRATEGY Strengthening our market position Value Drivers Boost capacity and capability More exciting new CKD models Increase local content Second plant - located in Bukit Raja, Klang Localisation Strategic location High automation Focus on passenger vehicles and EEV segment Plant & land size 670,000 m² - Total Investment - RM1.8 billion Annual Capacity - 50,000 units (initial) Expected to start operations in early 2019 Competitive pricing Meeting market expectations on EEV UMW TEU NEW PLANT PROJECT SAFETY FIRST UTAMAKAN KESELAMATAN UMW HOLDINGS BERHAD 31#32EQUIPMENT STRATEGY To meet new market expectations while leveraging on the expertise of our partners UMW Heavy Equipment ○ Leveraging on our partnership with Komatsu Repositioning our heavy equipment business to focus on other more urbanised sectors such as construction Industrial Equipment Bringing other products into the existing regional network Leveraging on Internet of Things (IoT) for enhancing product offering Enhancing fleet management / rental business UMW HOLDINGS BERHAD 32 32#33M&E STRATEGY Strategic transformation focusing on HVM with Aerospace as catalyst Potential opportunities in HVM space High End Electronics UMW Aerospace Entry Point Enable HVM in Advance Land Transportation Energy Industrial Automation Medical Devices And Beyond... UMW HOLDINGS BERHAD 33#34MONETISING OUR LAND ASSETS О Serendah Land - 861 acres. Plan to develop this into a High Value Manufacturing Park focusing on industrial. 。 Signed an MoU with MIDA to collaborate on the park's development. ○ Working with Invest Selangor and MATRADE. О Part of the land currently housed the Rolls-Royce fan case project which acts as a catalyst for further development of Serendah LOW-DENSITY RESIDENTIAL COMMUNITY COMMERCIAL CORE WITH INTEGRATED CONNECTION TO LANDSCAPE UMW HIGH-END, LOW-DENSITY RESIDENTIAL COMMUNITY MIXED-USE & RESIDENTIAL LOOP ROAD AEROSPACE INDUSTRY CLUSTER MEDIUM-DENSITY AFFORDABLE HOUSING COMMUNITY AUTOMOTIVE INDUSTRY CLUSTER UMW Aerospace Sdn. Bhd (24 acres) T7 Kilgour Sdn Bhd (2 acres) UMW HOLDINGS BERHAD 34#35UMW THANK YOU Roza Shahnaz Omar Director, Group Strategy UMW Corporation Sdn. Bhd. S. Vikneshwaran Head, Investor, Media Relations & Sustainability 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 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.