2018 UEM Edgenta Annual Report

Where We Are Today UEM Edgenta is in a healthy state. Revenue has grown to RM2.18 billion in FY2018 while PAT increased 21.8% year-on-year to RM152.4 million. We have a healthy balance sheet with a net cash position of RM71.0 million, net asset per share of RM1.81 and a gross gearing ratio of 0.35x. Total shareholder returns for 2018 was an impressive 24.1% with a dividend payout of 14 sen representing a 79% payout ratio on the back of earnings per share (“EPS”) of 17.8 sen. The overall positive financial results present a snapshot of where we are today. However, from an investment point of view, what is more important is what we did to get there, and what we will be doing to sustainably grow in the future. What We Did to Get There Leading up to 2018, we identified several key areas in which we needed to address in order to sustain our growth and be the clear market leader in markets we operate. BUSINESS OVERVIEW As mentioned in the Chairman’s Statement, our strategic business model is heavily reliant on operational efficiency and calls for the integration of new technologies and innovation to ensure continuous improvement in the six (6) strategic focus areas of Operational Excellence; Health, Safety, Security and Environment (“HSSE”); Client Solutions; Technology; and Communications and Stakeholder Management. During the year under review, we embarked on a rebranding and repositioning exercise to simplify and streamline UEM Edgenta and its subsidiaries. Branding is absolutely critical because of the overall impact it has on the Company. It influences how people perceive us, allows customers and clients to know what to expect from us and help drive new businesses. Apart from the visual elements of the brand where we aim to present a consistent look in redefining the Group as an “Asset Management and Infrastructure Solutions” Company which simply describes what we do, the exercise also involves the development of our people to instil a culture of change and innovation throughout the Company. Total Asset Solutions uemedgenta.com Asset Management & Infrastructure Solutions uemedgenta.com At 1 January 2018 UEMS OPUS KFM PROPEL By 4 th Quarter 2018 By 1 st Quarter 2019 By 2021 / 2022 Safety was identified as a material component of our journey, and a detailed and focused roadmap to deliver Behavioural Safety was introduced. This resulted in the development of a comprehensive HSSE Master Plan to optimise safety in our operations. The plan is being implemented in stages, and while there is still a long way to go, we have seen significant improvements in our HSSE performance. We have also formally activated Continuous Improvement (“CI”) initiatives in our operations such as the LEAN programme, which inculcates manufacturing mindset, discipline and accountability for operational excellence, notwithstanding the non-manufacturing nature of our service provision business. The LEAN framework encompasses innovation programmes, training and process improvements, all of which are expected to improve operational efficiencies and cost savings. Additionally, we have also set up the Innovation Garage as a new department to institutionalise the learnings from Khazanah’s TIDE programme to tackle high-impact problem statements by harnessing technology & innovation. Both of these programmes have started to deliver commendable results in FY2018. Financial Review Stakeholder Information AGM Information 69 Governance Review of Sustainability Activities