UMW Holdings Berhad

BRIEFING ON

4Q14 RESULTS

27 February 2015

2

AGENDA

1. SHAREHOLDING STRUCTURE

2. GROUP RESULTS FOR 4Q14

3. GROUP RESULTS FOR 2014

4. SEGMENTAL RESULTS

• AUTOMOTIVE DIVISION

• EQUIPMENT DIVISION

• OIL & GAS DIVISION

• MANUFACTURING & ENGINEERING DIVISION

• OTHERS

5. DIVIDEND PAYOUT

6. PROSPECTS FOR 2015

7. Q & A

UMW HOLDINGS BERHAD

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SHAREHOLDING STRUCTURE As at 31 January 2015

Permodalan Nasional Berhad (PNB)/

PNB Managed Unit Trust Funds, 52.17%

(January 2014 = 54.91%)

Employees Provident Fund Board, 15.75%

(January 2014 = 15.38%)

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

*

Other Local Shareholders, 13.82%

(January 2014 = 12.77%)

Foreign Shareholders, 18.26%

(January 2014 = 16.94%)

UMW HOLDINGS BERHAD

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SUMMARY OF GROUP RESULTS – 4Q14

RM’ million 4Q14 4Q13 Variance

Revenue 3,706.1 3,636.3 1.9%

Forex impact (42.0) (8.0) >-100%

Profit before

taxation 289.1 314.1 -8.0%

UMW HOLDINGS BERHAD

While revenue increased by 2%, profit before taxation came down by 8% mainly due to:-

- Forex impact of RM42 million due to the strengthening of the US Dollar against the Malaysia

Ringgit in 4Q14. The forex impact in 4Q13 was only RM8 million.

- Without the forex impact, we would have done much better than the corresponding quarter.

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SUMMARY OF GROUP RESULTS - 2014

RM’ million FY2014 FY2013 Variance

Revenue 14,958.9 13,951.5 7.2%

Profit before taxation 1,620.8 1,435.7 12.9%

Profit to the equity holders of

the company (PATAMI) 657.7 652.9 0.7%

UMW HOLDINGS BERHAD

While revenue increased by 7% and profit before taxation went up by 13%, profit to the equity

holders of the company registered only a marginal increase mainly due to:-

- Provision for the expected losses on the disposal of our investment in the automotive

components manufacturing companies in India – RM93 million (reported in 2Q14 results).

- In 2013, UMW Oil & Gas was a wholly-owned subsidiary until the listing on 1 November.

Post-listing, UMW Holdings only owns about 55% of UMW Oil & Gas.

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AUTOMOTIVE DIVISION

UMW Holdings Berhad

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SEGMENTAL RESULTS

BUSINESS SEGMENT - AUTOMOTIVE

4Q14

RM’000

4Q13

RM’000 Variance

FY2014

RM’000

FY2013

RM’000 Variance

Revenue 2,573,505 2,626,197 -2.0% 10,777,731 10,022,984 7.5%

PBT 313,127 392,418 -20.2% 1,472,184 1,413,474 4.2%

While revenue came down slightly in the 4th quarter, we registered an 8% growth for the year.

However, profit margins were partly affected by the strengthening of the US Dollar. Despite this,

we still achieved a 4% increase for the year.

UMW TOYOTA MOTOR

- Toyota sold 27,405 units in 4Q14 compared to 27,109 units in 4Q13 (+1.1%) and 23,508 units

in 3Q14 (+16.6%).

- For 4Q14, Lexus sold 416 units compared to 483 units in 4Q13 (-13.9%) and 369 units in

3Q14 (+12.7%).

- Toyota sold 102,035 units in 2014 while Lexus registered 1,601 units. Total of 103,636 units

(2013 = 92,252 units; +12% growth).

- Market share for Toyota, including Lexus for 2014 was at 15.6%.

UMW HOLDINGS BERHAD

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SEGMENTAL RESULTS

BUSINESS SEGMENT - AUTOMOTIVE

PERODUA

- Perodua registered sales of 55,262 units for 4Q14 compared to 48,673 units in 4Q13

(+13.5%) and 45,837 units in 3Q14 (+20.6%).

- Higher sales was mainly due to the launch of Perodua Axia, Malaysia’s first energy-efficient

vehicle (EEV) in September.

- Perodua sold 195,579 units in 2014, slightly lower than the record of 196,071 units achieved

in 2013.

- Perodua’s market share in 2014 was 29.3% and it has maintained the No. 1 position since

2006.

- Perodua and Daihatsu Motor Corporation Ltd of Japan began construction of a new engine

manufacturing plant here as part of their business expansion plan in the area of engine,

engine components and parts sales.

UMW HOLDINGS BERHAD

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• UMW companies sold 299,215 units in 2014 with a market share of 45%.

UMW GROUP’S MARKET SHARE Units & Market Share (%) in 2014

UMW HOLDINGS BERHAD

UMW Toyota103,63615.6%

Perodua195,57929.3%

Others367,25055.1%

2013

196,071

29.9%

2013

367,201

56.0%

Brand 2014 2013

Market

Share %

Units Market

Share %

Units

Proton

Honda

Nissan

Hyundai, Kia

Volkswagen

Others

17.4

11.6

7.0

2.5

1.3

15.3

115,783

77,495

46,352

16,886

8,916

101,818

21.2

7.9

8.1

2.5

1.5

14.9

138,753

51,544

53,156

16,537

9,619

97,592

Total 55.1 367,250 56.0 367,201

2013

92,521

14.1%

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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

UMW HOLDINGS BERHAD

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SEGMENTAL RESULTS

BUSINESS SEGMENT - EQUIPMENT

4Q14

RM’000

4Q13

RM’000 Variance

FY2014

RM’000

FY2013

RM’000 Variance

Revenue 445,628 371,084 20.1% 1,769,077 1,705,458 3.7%

PBT 78,689 29,237 169.1% 217,266 195,838 10.9%

- Higher revenue during the quarter was contributed by the Industrial and Heavy Equipment

Segments, especially Myanmar business following the uplift of suspension on the mining

activities effective 1st September 2014, and from our operations in Papua New Guinea.

- The higher revenue for the year was contributed mainly by the overseas industrial

equipment segment. Overall revenue contribution: Heavy Equipment 45% and Industrial

Equipment (with marine and power products) 55%.

- In line with the increase in revenue, profit before taxation for the segment increased by

RM21.5 million or 11.0%, from RM195.8 million to RM217.3 million.

UMW HOLDINGS BERHAD

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OIL & GAS DIVISION

UMW HOLDINGS BERHAD

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SEGMENTAL RESULTS

BUSINESS SEGMENT – OIL & GAS

4Q14

RM’000

4Q13

RM’000 Variance

FY2014

RM’000

FY2013

RM’000 Variance

Revenue 327,660 207,130 58.2% 1,016,330 737,752 37.8%

PBT 85,798 55,994 53.2% 286,184 206,849 38.4%

i. The revenue contribution from the Oil & Gas Segment in 4Q14 increased by RM120.6 million

or 58.2% from RM207.1 million to RM327.7 million. The increase is mainly from the Drilling

Services which sees additional contribution especially from the new UMW NAGA 5 and

UMW NAGA 6. Consequently, profit before taxation increased by 53%.

ii. The revenue improvement for the year is mainly attributable to the following:

a) Higher daily operating rates for UMW NAGA 2 and UMW NAGA 3;

b) Full year contribution from UMW NAGA 4;

c) Additional contribution from UMW NAGA 5 and UMW NAGA 6, which commenced

operations in May and October 2014 respectively; and

d) Improved utilisation rate of GAIT 3.

UMW HOLDINGS BERHAD

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MANUFACTURING & ENGINEERING DIVISION

UMW HOLDINGS BERHAD

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SEGMENTAL RESULTS

BUSINESS SEGMENT – MANUFACTURING & ENGINEERING

4Q14

RM’000

4Q13

RM’000 Variance

FY2014

RM’000

FY2013

RM’000 Variance

Revenue 173,284 181,566 -4.6% 724,291 735,498 -1.5%

PBT (4,402) (14,912) 70.5% 15,661 (39,164) 140%

- Revenue for 4Q14 decreased by 4.6% compared to last quarter due to lower overall demand

in the automotive components business.

- The segment recorded a lower loss of RM4.4 million for the current quarter. This was

mainly due to the improved performance of the lubricants business in China.

- For FY2014, the division recorded PBT of RM15.7 million against loss of RM39.2 million for

FY2013. The loss in 2013 was contributed by impairment of assets.

- The Division is expected to sustain and marginally improve its performance through better

sales of lubricant products via the newly launched Grantt Oil, export program to ASEAN

and further market share improvement in China operation.

UMW HOLDINGS BERHAD

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SEGMENTAL RESULTS

BUSINESS SEGMENT – OTHERS

FY2014

RM’000

FY2013

RM’000 Variance

Revenue 751,681 826,627 (9.1%)

PBT (370,462) (341,324) (8.5)%

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

1) United Seamless Tubulaar Pvt. Ltd., India

• Operating loss was incurred due to low production for the first 9 months of the year.

• Production has improved in the last quarter of 2014 due to:-

- The countervailing duties imposed by the US Government on pipes from India have been

reduced to 12.62%. We are now able to export to the US market again.

- OCTG from China is now imposed with countervailing duties. This provides us with a

much bigger potential for the Indian domestic market too.

• We are confident of securing 100,000 MT to 140,000 MT orders from the US in 2015 through

our partner there.

• The plant has the capacity to produce 300,000 MT per annum.

• We have regional representatives in the Middle East and China.

• Performance of the company is expected to improve in 2015.

UMW HOLDINGS BERHAD

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SEGMENTAL RESULTS

BUSINESS SEGMENT – OTHERS (con’t)

UMW HOLDINGS BERHAD

2) Provision for the expected losses on the disposal of our investment in the automotive

components manufacturing companies in India

• We made this announcement on 25th July 2014 and the provision of RM93 million was

included in our 2Q14 results.

• The original investment was premised upon the bullish outlook of the Indian automotive

component industry. However, over the years there were challenges in the Indian automotive

component business environment and regulatory policies which rendered these investments

no longer meeting UMW’s investment strategy. Hence, the Proposed Disposals offer a

strategic opportunity for UMW to exit and re-allocate resources to other businesses within the

UMW Group.

• The transaction is expected to be completed by 31 March 2015.

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SEGMENTAL RESULTS

BUSINESS SEGMENT – OTHERS (con’t)

UMW HOLDINGS BERHAD

3) WSP Holdings Limited

The provision for impairment of investment‎ was RM28 million and another RM13 million was

the share of losses during 1H 2014.

With that, the book value of our investment in WSP is reduced to zero.

As such, there is no further provision required for WSP moving forward.

4) Arabian Drilling Services, Oman

We have taken over the management and renegotiated the onshore drilling contracts.

We have also incurred cost to provide maintenance; and upgrading of our onshore drilling

rigs as requested by our customers.

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SEGMENTAL RESULTS

BUSINESS SEGMENT – OTHERS (con’t)

UMW HOLDINGS BERHAD

5) PFP Holdings Pty. Ltd., Australia

International traders and stockists of the complete range of piping and pressure vessel

components. Supplies components to the Power Generation, Processing, Mining,

Petrochemical and Oil & Gas industries

A new CEO has been appointed.

Operationally profitable.

We made provision for old stocks.

6) Zhongyou BSS (Qinhuangdao), China

Manufacturers of LSAW and SSAW oil & gas transmission pipes.

The slowdown in major pipeline projects in China has affected the demand for our pipes.

However, orders have picked-up in 4Q14 both domestically and for the export market.

Our joint-venture partner is Baoji Petroleum, a subsidiary of China National Petroleum

Corporation. The company mostly supplies to government entities in China.

Due to the business environment in China, some of the payments for our pipes have been

delayed.

20 UMW HOLDINGS BERHAD

DIVIDEND PAY-OUT

2014 (sen)

1st interim single-tier dividend 10.0

2nd interim single-tier dividend 15.0

3rd interim single-tier dividend 16.0*

Total 41.0

* Yesterday, the Board declared a third interim single tier-dividend of 32% or 16.0 sen per share of

RM0.50 each, amounting to a net dividend payable of approximately RM186.9 million, to be paid on

24th April 2015.

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PROSPECTS FOR 2015

AUTOMOTIVE DIVISION

Malaysian Automotive Association’s target for this year is 680,000 units, 2% growth

from last year.

UMW TOYOTA MOTOR

• Sales forecast for Toyota (93,000 units) & Lexus (3,000 units) = 96,000 units.

• Improved Toyota Vios, Hilux and Fortuner were introduced early this year.

• Lexus NX-series was launched in January with 5 variants.

• The facelift Camry and Camry Hybrid will be introduced in 2Q15.

PERODUA

• Sales forecast for Perodua is 208,000 unit, 6.4% growth from last year.

• The New MyVi is packed with better features and provides greater value and

Perodua targets to sell 6,000 units of the New MyVi a month.

• Perodua Axia has a total booking of 68,000 units. To-date, only 29,000 units

have been registered.

• Axia will be exported sometime in the second half of this year.

UMW HOLDINGS BERHAD

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PROSPECTS FOR 2015

EQUIPMENT DIVISION

• Equipment segment is expected to remain challenging if commodity prices

continue to be at the current low level.

• However, the resumption of mining activities in Myanmar is expected to

mitigate the impact of low commodity prices. The consumption of spare parts

and related service are expected to increase in tandem with the heightened

level of mining activities.

• The main growth for the division is expected to be from the heavy equipment

segment - (Myanmar – jade mining and PNG – gold mining).

• Vietnam and Singapore are expected to continue to contribute to our

industrial equipment business.

UMW HOLDINGS BERHAD

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PROSPECTS FOR 2015

OIL & GAS DIVISION

• The recent slowdown in the oil and gas industry will affect the level of

activities in the exploration and production sector in 2015. The Oil & Gas

Division is expected to face challenges in securing high day rates for its

drilling rigs and rigs utilisation rates are expected to be lower than the high

levels seen in 2014.

• Nevertheless, revenue from existing contracts and potential future contracts,

albeit at lower day rates, together with various cost-cutting initiatives and

available reserves, are expected to enable the Company to sail through

challenging times.

• The oil price is on an upward trend. It has picked up from a low of

USD46/barrel on 13 January 2015 to USD60/barrel on 26 February 2015.

• UMW-OG will be taking delivery of UMW NAGA 8 in September 2015.

UMW HOLDINGS BERHAD

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PROSPECTS FOR 2015

MANUFACTURING & ENGINEERING DIVISION

• The lubricant business will be the main contributor for growth and will be

contributed by the newly-launched GRANTT lubricants, export initiatives to

ASEAN markets and improved operations in China.

• UMW is currently the sole supplier of the premium lubricants for First

Automobile Works (FAW) Mazda, Red Flag and Besturn.

• UMW is also the largest Repsol partner in Asia. China is Repsol’s largest

market in Asia.

• The automotive components manufacturing business in Malaysia is expected

to continue to be challenging.

UMW HOLDINGS BERHAD

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THANK YOU

UMW HOLDINGS BERHAD