UMW Holdings Berhad

BRIEFING ON

4Q13 RESULTS

27th February 2014

2

AGENDA

1. SHAREHOLDING STRUCTURE

2. GROUP RESULTS FOR 2013

3. SEGMENTAL RESULTS

• AUTOMOTIVE DIVISION

• EQUIPMENT DIVISION

• OIL & GAS DIVISION

• MANUFACTURING & ENGINEERING DIVISION

4. BALANCE SHEET HIGHLIGHTS

5. DIVIDEND PAYOUT

6. PROSPECTS FOR 2014

7. Q & A

UMW HOLDINGS BERHAD

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SHAREHOLDING STRUCTURE As At 30 January 2014

Permodalan Nasional Berhad (PNB)/

PNB Managed Unit Trust Funds, 54.91%

(January 2013 = 50.20%)

Employees Provident Fund Board, 15.38%

(January 2013 = 12.65%)

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

*

Other Local Shareholders, 12.77%

(January 2013 = 11.19%)

Foreign Shareholders, 16.94%

(January 2013 = 25.96%)

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SUMMARY OF GROUP RESULTS

RM’ million 4Q2013 4Q2012

Restated Variance FY2013

FY2012

Restated Variance

Revenue 3,891.8 4,050.4 -3.9% 14,206.9 15,816.9 -10.2%

PBT 333.7 471.0 -29.2% 1,455.2 2,020.3 -28.0%

Profit for the

period 229.7 384.9 -40.3% 1,085.8 1,588.8 -31.7%

Non-

controlling

Interests

120.6 134.0 -10.0% 404.6 594.5 -31.9%

Profit to the

equity

shareholders

of the

company

109.1 250.9 -56.5% 681.2 994.3 -31.5%

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AUTOMOTIVE DIVISION

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SEGMENTAL RESULTS

BUSINESS SEGMENT - AUTOMOTIVE

4Q2013

RM’000

4Q2012

RM’000

(Restated)

Variance FY2013

RM’000

FY2012

RM’000

(Restated)

Variance

Revenue 2,866,912 3,029,208 -5.4% 10,263,669 11,498,096 -10.7%

PBT 390,931 424,564 -7.9% 1,411,987 1,796,792 -21.4%

i. Lower revenue and profit due to:-

- UMW Toyota Motor recorded lower vehicle sales (92,521 units; -13% y-o-y)

- Stiff competition from other car makers with new model launches.

- The early run-out of Toyota Vios resulted in no sales of Vios for 2 months.

Note: In 2012, UMW Toyota Motor sales grew by 20% (TIV grew by 5%) due to 4 new model launches in 1H2012.

UMW Toyota Motor celebrated its 30th anniversary in 2012 with special promotions.

ii. Perodua achieved a new record sales of 196,071 units in 2013 (+4% y-o-y). Higher vehicles sales were mainly

attributed to the good performance of the new competitively-priced S Series variants.

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• UMW companies sold 288,592 units in 2013 with a market share of 44%.

UMW Toyota92,52114.1%

Perodua196,07129.9%

Others367,20156.0%

UMW GROUP’S MARKET SHARE Units & Market Share (%) In 2013 Brand 2013 2012

Market

Share

%

Units Market

Share

%

Units

Proton

Nissan

Honda

Hyundai, Kia

Volkswagen

Others

21.2

8.1

7.9

2.5

1.5

14.9

138,753

53,156

51,544

16,537

9,619

97,592

22.5

5.8

5.6

2.1

2.1

14.9

141,121

36,271

34,950

13,168

13,019

93,465

Total 56.0 367,201 52.9 331,994 (2012)

Perodua

189,137

30.1%

(2012)

UMW Toyota

106,622

17.0% (2012)

Others

331,994

52.9%

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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

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SEGMENTAL RESULTS

BUSINESS SEGMENT - EQUIPMENT

4Q2013

RM’000

4Q2012

RM’000

(Restated)

Variance FY2013

RM’000

FY2012

RM’000

(Restated)

Variance

Revenue 371,147 435,795 -14.8% 1,705,521 2,138,469 -20.2%

PBT 24,544 19,247 27.5% 191,145 183,458 4.2%

i. Lower revenue was due to:-

- Softer construction sector during the period

- Drop in commodity prices that dampened equipment demand in the palm oil, iron ore and

mining sectors.

- Continued suspension of the jade mining activities in a country where we operate.

ii. Profit before taxation was higher compared with 2012 due to better margins.

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OIL & GAS DIVISION

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SEGMENTAL RESULTS

BUSINESS SEGMENT – OIL & GAS

4Q2013

RM’000

4Q2012

RM’000

(Restated)

Variance FY2013

RM’000

FY2012

RM’000

(Restated)

Variance

Revenue 206,054 128,177 60.8% 736,676 724,336 1.7%

PBT 54,526 12,546 >100% 205,381 83,566 >100%

i. The increase in revenue for FY13 was due to:-

- New contribution from NAGA 4

- Higher contribution from NAGA 1 and NAGA 2; and offset by

- Lower contribution from HAKURYU 5 and barge services.

ii. Profit before taxation was higher mainly due to higher contribution from NAGA 1, NAGA 2

and NAGA 4, and the gain from the sale of property by one of the subsidiaries.

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MANUFACTURING & ENGINEERING DIVISION

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Auto Components In India

MANUFACTURE OF COMPONENTS

India

Pune

(Maharashtra)

Chennai

(Tamil Nadu)

• UMW Dongshin Motech Pvt. Ltd. in Pune – involved

in OE market for stamped automotive body

• Sathya Auto Pvt. Ltd. in Chennai – manufacturer of

automotive components such as jacks, toolkits,

wheel hubs, wiper arms, stampings and hot forgings.

• Castwell Auto Parts Pvt. Ltd. in Chennai –produces

aluminium die casting automotive parts.

Auto components manufacturing operations in India were badly affected by:-

i) Slowdown in the Indian automotive industy. TIV dropped in 2013, first time in 11 years.

Passenger car sales dropped by 9.6% in 2013. TIV showed a slide of 7.2%

ii) A combination of factors – the general economic slowdown, high interest rates and

increasing fuel prices – affected the Indian automotive industry to a large extend.

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SEGMENTAL RESULTS

BUSINESS SEGMENT – MANUFACTURING & ENGINEERING

4Q2013

RM’000

4Q2012

RM’000

(Restated)

Variance FY2013

RM’000

FY2012

RM’000

(Restated)

Variance

Revenue 184,017 168,329 9.3% 737,949 680,708 8.4%

PBT (11,637) (1,426) >-100% (35,889) 3,604 >-100%

i. The increase in revenue was due to:-

- Higher demand for our lubricant products and automotive components.

ii. The higher loss was due to the continued slump in the automotive industry in India,

impairment of assets and the weakening Indian Rupee.

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SEGMENTAL RESULTS

BUSINESS SEGMENT – OTHERS

FY2013

RM’000

FY2012

RM’000

(Restated)

Variance

Revenue 848,293 866,720 -2.13%

PBT (317,405) (47,143) >-100%

The main contributors to the losses in this segment are:-

1. United Seamless Tubulaar Pvt. Ltd.

- Manufacturer of OCTG that started operations in late 2010.

- This is a heavy capital investment that takes a longer gestation period.

- Normal for OCTG business to take about 5 to 7 years to be profitable – to build a good brand first.

- There were also other problems such a power outage.

- Political issues in the state of Andhra Pradesh,

- We are also talking to strategic partners to improve the company’s production and sales.

- The US government plans to introduce preliminary rates (countervailing duties) on OCTG from India. The industry

players in India have asked for a review of the rates.

- There is still a good market for OCTG in North America (Canada), South America and also in other regions. As

such, we have intensified our marketing activities.

- There will be continuous improvement in operations and we believe that we should see better results in 2 to 3 years.

- Incurred operational losses, impairment and a provision for loan.

- The bulk of the operational losses were due to forex – weakening of the Indian Rupee.

- The provision for loan - there is potential for a write-back.

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SEGMENTAL RESULTS

BUSINESS SEGMENT – OTHERS (con’t)

2. UMW Synergistic Generation Sdn. Bhd.

- Received a contract from PETRONAS Carigali in respect of the procurement of materials and equipment, and

installation and commissioning of the Garraf Power Plant project in Iraq in December 2011.

- Iraq presented us with many challenges due to the security situation there.

- The closure of a port also delayed supply of some equipment.

- Despite the challenging environment, we worked closely with our client to fulfil our contractual obligations.

- We managed to complete a 10-Megawatt plant that helped PETRONAS strike oil in Garraf.

- Due to the exceptional situation in Iraq, we had a cost over-run that resulted in operational losses.

3. Wuxi Seamless Oil Pipe Co. Ltd.

- The company is still in the process of being taken private.

- We are pushing for the privatisation with the objective of creating a higher value for our investment.

4. Arabian Drilling Services L.L.C, Oman

- Due to the unrest in the Middle-East, the labour cost in Oman went up substantially,

- The contractual rates were rather low.

- This led to operational losses.

- We have appealed to our clients to for some compensation. We have been promised some reimbursement.

- Received long-term contracts (4 years) for two of our rigs, with much higher day-rates.

- Currently have 4 onshore drilling rigs in Oman and due to the good potential and demand, and the increasing

day-rates, we have plans to increase our fleet.

- Convinced with the opportunities in Oman and look forward to a better result in 2014.

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DIVIDEND PAYOUT

2013 (sen)

1st interim single-tier dividend 10.0

2nd interim single-tier dividend 15.0

Special interim dividend 10.0

3rd interim single-tier dividend 9.0

Total 44.0

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‘AAA’ CORPORATE CREDIT RATING

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

Services Berhad (RAM)

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PROSPECTS FOR 2014

AUTOMOTIVE DIVISION

Malaysian Automotive Association’s target for this year is 670,000 units, 2% increase

as compared to 2013 TIV of 655,793 units.

UMW Group’s combined total sales is forecasted to be about 295,400 units for 2014.

UMW TOYOTA MOTOR

• Sales forecast for Toyota (97,000 units) & Lexus (1,400units) = 98,400 units.

• We plan to introduce some CBU models from Toyota this year.

PERODUA

• Sales forecast for Perodua is 197,000 units.

• The new Alza was launched on 10 January with better offerings. There was

also a price reduction between 2.1% and 7.4% from the previous model,

making the new Alza the most competitive MPV in the market.

• The company plans to launch a new model in the second half of this year.

• The second plant in Rawang is expected to be operational by the second half

of this year.

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PROSPECTS FOR 2014

EQUIPMENT DIVISION

• The segment is expected to remain challenging if commodity prices continue

to be at the current level.

• However, the segment is expected to sustain its performance from the sale of

parts.

• We are expanding our equipment leasing business. The demand for this

segment is increasing and this business gives us better margins.

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PROSPECTS FOR 2014

MANUFACTURING & ENGINEERING DIVISION

• We have signed a 10-year contract extension with Repsol, effective 1st

January 2014.

• We are among the top Repsol distributors in the world.

• Better performance of lubricant sales and higher plant utilisation in China are

expected to sustain the performance of this segment in 2014.

• We are also in the final stage of discussions with new customers for our

lubricant products in China.

• We have delivered the first shipment of lubricants to the Blue Bird Group in

Indonesia and this is expected to improve significantly this year.

• In line with a higher TIV, our automotive components business in Malaysia is

expected do to well. KYB has also intensified its export initiatives.

• The automotive industry in India is expected to improve after the general

election in May.

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PROSPECTS FOR 2014

OIL & GAS DIVISION

• The performance of this segment is expected to continue to improve.

• We will be taking delivery of NAGA 5 in May 2014. We have secured a

contract with NIDO Petroleum Philippines Pty. Ltd. for NAGA 5, for a duration

of 6 weeks with a contract value of approximately USD7 million.

• We have also recently announced purchase of 3 jack-up drilling rigs.

• The first of the three will be delivered to us in September this year, with the

second rig targeted for December.

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THANK YOU

UMW HOLDINGS BERHAD