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Summary Annual Review 2018

NEW ERA OF OPPORTUNITY

Contents

4 Chairman’s Statement

6 CEO’s Message

8 Our Strategy

Performance Review10 Direct Investments14 Real Estate Investments16 Financial Investments

18 Corporate Review

20 Sustainability Review

24 2018 Awards

SEDCO Holding Group is a leading ethical and sustainable investor with a track record of excellence dating back over 43 years. SEDCO manages a diversified spectrum of real estate investments, investments in equities, and businesses in sectors key to national prosperity including healthcare, education, asset management, hospitality, information technology and real estate in Saudi Arabia and around the world.

Focus 2025 strategy

Aligning SEDCO Holding’s future with Saudi Vision 2030.

Elaf Grand Al Majeedi launch

New luxury hotel in Madinah with views of the Prophet’s Mosque.

Hotel Galleria opens its doors

Elaf’s award-winning flagship hotel launches in early 2018.

Private equity outperforms

SEDCO Capital private equity funds achieve an IRR of 18%.

Ocean Basket sales up 30%

Relaunch features a new menu carrying local seafood favorites.

Riyali partners with SABB

Riyali pursues its 2020 goal to educate 2 million people.

18%

Red Sea Mall launches cinemas

The mall’s third major expansion lifts 2018 footfall by 25%.

Supporting the local economy

Ejada partners with STC to boost innovation, jobs and growth.

Great Place to Work®

SEDCO recognized as Asia’s 12th best place to work.

+ 1,478%

SEDCO Capital discretionary portfolio AUMs grow by 1,478%.

The full version of SEDCO Holding’s Annual Review 2018 can be viewed at annualreview.sedco.com

1,140 Nahdi pharmacies

Sixty new pharmacies open across the country.

SEDCO Capital REIT IPO

Landmark IPO raises SR 600 million from 74,000 investors.

BUILDING ON MARKET LEADERSHIP POSITIONS

3

Chairman’s Statement

NEW STRATEGY ALIGNS WITH NATIONAL VISION

As we present SEDCO Holding’s Annual Review for 2018, we look forward to our success story continuing with renewed focus under new leadership, despite market challenges.

2018 was a challenging year as a host of factors redefined the social and economic fabric of the region. For SEDCO, this was a chance to differentiate ourselves based on our expertise and resilience. We combatted challenges and turned them into opportunities. I am pleased to say that we emerged from 2018 a stronger organization, prepared for a dynamic, rapidly-evolving future.

We move together towards a dynamic future, with our executive leaders emphasizing performance, accountability and shareholder value. Our directorial boards are part of this change and are embracing increased responsibility. Our shareholders too are demonstrating prudence, patience and trust in our executive leadership. Their unity and support are essential to our success.

In 2018 we strengthened the bridges linking our shareholders and decision-makers. In determining our future strategy, we convened two family advisory councils.

I am pleased to note that our new Focus 2025 strategy was set after in-depth consultation with our shareholders, Board members and the management team. Our channels of communication have always been open, and are now being formalized in quarterly reviews with our shareholders.

Our strategy is being refined and our vision further aligned with that of the country. I aspire to see SEDCO Holding become a global concern generating prosperity for audiences around the world. Focus 2025 supports that vision, positioning us for leadership and global outperformance in crucial sectors.

In early 2018 the executive reins of the organization were taken by Hasan AlJabri, previously the CEO of SEDCO Capital. Hasan has the confidence of both the Board and our shareholders in evolving SEDCO’s overall direction.

SEDCO has long prioritized community engagement and corporate social responsibility in the best traditions of Shariah. We believe it is our duty to foster our teams and the wider community.

Our belief in employee well-being is reflected in our Great Place to Work® in Saudi Arabia ranking, where we are near the top. Now, a culture of responsibility is permeating through the organization, with everyone from line employees to directors contributing towards organizational success in measurable ways.

On behalf of the shareholders and Board of Directors, I express our gratitude to the Custodian of the Two Holy Mosques, the Crown Prince, and all government ministers. It is their leadership that is transforming Saudi Arabia and starting a process of change that brings many new opportunities. I also thank our directors for their vision and contribution. Your responsibilities are growing, as is your enthusiasm.

I save my last words for our employees, who are SEDCO’s most powerful assets. We are grateful to be able to count on you as we chart a path to the future.

Saleh Salem Bin Mahfouz Chairman

Our strategy is being refined and our vision further aligned with that of the country. I aspire to see SEDCO Holding become a global concern generating prosperity for audiences around the world.

4 | SEDCO Summary Annual Review 2018 5

CEO’s Message

PERFORMANCE, RESULTS AND ACCOUNTABILITY

Our new approach is encapsulated in our Focus 2025 strategy, finalized after intensive work with internal stakeholders and international experts. As its name suggests, the strategy prioritizes focus and market leadership.

In 2018 SEDCO Holding built on its result-oriented and performance-based approach to the future. We are cementing our leadership position as an agile organization, well-positioned to respond to market opportunities while supporting Saudi Arabia’s economic diversification.

At the same time, we want to stay true to our goal of creating shareholder value through an ethical and sustainable investment model. Our new approach is encapsulated in our Focus 2025 strategy, finalized after intensive work with internal stakeholders and international experts. As its name suggests, the strategy prioritizes focus and market leadership.

Focus 2025 sees us orientate long-term direct investment towards key and essential sectors identified by Saudi Vision 2030 – such as healthcare, education, asset management, hospitality including Hajj & Umrah and real estate. Rather than diversify horizontally, we will target key verticals to attain market leadership.

Our real estate portfolios will also benefit from our renewed focus. 2018 saw us formalize a consolidated Real Estate division under the new Chief Real Estate Officer. This is a step towards consolidating all real estate activities, bringing together our expertise across the real estate value chain.

Focus 2025 formalizes our results, performance and responsibility based approach to generate shareholder value.

Our strong corporate governance will be boosted by refining our quarterly review mechanism and strengthening clear roles and responsibilities throughout our organization, director boards and operating companies. SEDCO Holding will have a more active role in supporting sectorial performance.

Our focus on strategy doesn’t negate the individual achievements of our teams and operating companies through 2018.

The Hotel Galleria by Elaf launched successfully to high customer appreciation. Nahdi continues to expand and further well-being and healthcare throughout Saudi Arabia. Red Sea Mall has witnessed high footfall increases, following its two expansion programs and the opening of a cinema complex. SEDCO Capital’s prudent and ethical multi asset class investment focus and Luxembourg platform differentiate it from other asset managers. The year was full of milestones crossed, challenges confronted and opportunities acted upon.

Our commitment to employees and communities endures. We ranked 4th in the Great Place to Work® in Saudi Arabia rankings and 12th across all of Asia.

Saudization and local empowerment is a cause close to our heart. We are proud that all of our portfolio companies maintain high levels of Saudization, and are offering Saudi citizens the training, learning and development to create a new generation of leaders. The Nahdi Academy, SEDCO Stars, and SEDCO Capital’s training initiatives are examples of the work we are doing to develop Saudi skillsets.

Riyali has become a nationwide initiative of financial literacy and empowerment and financial inclusion through our partnership with the Ministry of Education. Riyali’s new collaboration with SABB amplifies its reach as we progress towards benefitting 2 million people by 2020. We are also playing a major role in the entrepreneur ecosystem, helping entrepreneurs gain the financial skills to succeed.

Over four and a half decades we have built a strong foundation rooted in performance, transparency, governance, social responsibility towards our community and results. It is an example of transparency, global reach and performance for family-owned businesses. Focus 2025 continues those efforts, building on the Group’s sound foundations.

Thanks to the great and wise leadership of Saudi Arabia. This is an exciting time for the Kingdom, with a world of opportunity for businesses agile and focused enough to seize it. We have the expertise to serve as partner and consultant assisting in this transformation. We remain dedicated to the Saudi Arabian market, and Focus 2025 serves to formalize our alignment with Saudi Vision 2030 and the National Transformation Plan.

I thank our shareholders, Board members, the management teams of our portfolio companies, and our employees. Our successes have rested on your shoulders.

Hasan AlJabri Chief Executive Officer


Our Strategy

FOCUS 2025 EMBRACES ECONOMIC DIVERSIFICATION

Focus 2025 also positions SEDCO Holding for softening fundamentals in the global economy and a number of significant and positive reforms in the domestic market.

SEDCO has long prioritized direct investments in sectors beneficial to Saudi Arabia’s economic diversification. This approach is now formalized in a review of direct investment strategy. SEDCO Holding will channel direct investment into key sectors pinpointed by Saudi Vision 2030 – such as healthcare, education, hospitality, entertainment, logistics, IT, technology and food security.

These sector-specific investments will be of long tenure, with potential for growth and consolidation. The strategy calls for fewer direct investments, but of larger ticket size and in companies that have market leadership potential.

Sector-specific direct investments will be supported by a change in operating strategy. Operating companies previously had high autonomy to win market share, and were supported by on-demand services from the Holding Group. Now, a refreshed model clusters our operating companies into key verticals with the aim of generating depth.

SEDCO aims to build expertise in a limited number of verticals aligned with Saudi Vision 2030, with group companies supporting each other to create integrated value chains. Focus 2025 sees SEDCO Holding become a global outperformer by establishing leadership positions in the verticals it targets. This will require departments and organizations to work cohesively, with clear delineation of responsibility.

SEDCO’s real estate portfolio will also benefit from new focus. It will prioritize local income-generating assets.

SEDCO Capital, the group’s ethical asset manager, will focus on assets where it has a leadership position. The firm will capitalize on its early mover advantage in local REIT markets and extend its Build to Suit offerings. The firm will build on its competitive public equity positioning via its Luxembourg platform.

SEDCO Holding has a strong track record of corporate governance. This will be boosted by quarterly reviews of performance for SEDCO Holding and all its operating companies. Performance will be measured against investments, dividends, valuation, financial success, operational efficiencies and KPIs.

Focus 2025 refreshes SEDCO Holding’s direction, while building on past success. It stays true to the organization’s overarching aim of maximizing net asset value through a diversified ethical investment portfolio that drives long-term returns.

Focus 2025 is SEDCO Holding’s overarching strategy for the next seven years. It aligns SEDCO with the national agenda of Saudi Arabia’s leadership, and responds to opportunities generated by the National Transformation Program and Saudi Vision 2030.

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CREATING DEPTH IN KEY VERTICALS

Performance Review | Direct Investments

SEDCO CapitalSEDCO Capital’s private equity team committed investor capital to new funds in Europe, North America and Asia during the year. Existing funds made annual distribution at a YTD realized multiple of over 2.3x, with an IRR of 18%.

Funds managed by the regional public equity team grew by 116% while discretionary portfolios rose by 1,478%. The co-investments team executed 6 transactions. New investments included a gymnasium chain in China, a technology provider based in the UK and a physician services business in the US.

SEDCO Capital raised more than SAR 600 million from its initial public offering of SEDCO Capital REIT, an ethical investment real estate fund. Subsequently, the firm signed a banking facilities agreement with Al Rajhi Bank worth SAR 600 million for the benefit of the fund.

Elaf Group Elaf has tapped into new markets and deepened its footprint in existing ones. In 2018, hotel revenues rose by SAR 52 million. Hajj and Umrah tourism revenues climbed by SAR 28 million.

Hotel Galleria, the new flagship in Jeddah, was launched early in the year, performing strongly to achieve high revenue targets. The renovated Al Majeedi Grand relaunched in Madinah, with 631 rooms making it Elaf’s largest Madinah property.

Phase two of an enhanced call center created a centralized platform for all hotels under the Elaf brand and a new mobile app and a real-time booking engine was introduced.

Nahdi Medical Company Nahdi has continued to expand its network and pursue its mission of delivering personalized healthcare services to help create healthier communities across the Kingdom. In 2018, 60 pharmacies opened, and 45 closed for relocation, leaving Nahdi with 1,140 operating pharmacies by the year-end.

The company has also expanded other revenue lines, with high growth in specialty products, private label arrangements and insurance.

9.3%Intimaa’s revenue increased by 9.3%, with all business lines returning to positive operating income.

466%In regional public equity, SEDCO Capital assets under management rose by 466% in 2018. Discretionary portfolios grew by 1,478%.


Red Sea Markets2018 saw the launch of Red Sea Mall’s cinema expansion, taking its gross leasable area to 142,000m² and prompting a 25% increase in footfall. The cinemas consolidated Red Sea Mall’s position as Jeddah’s leading entertainment and retail destination.

Red Sea Mall’s successful marketing events, CSR activities and social media engagement received several awards.

In particular, winning a RECON CSR Award from the International Council of Shopping Centers (ICSC) in Dubai was a first for the company, qualifying it to compete with the world’s best in Las Vegas during 2019.

Dar Al Fouad Dar Al Fouad (DAF) started operations at its second Cairo facility during the year, the 170-bed Nasr City Hospital. An extension to the 6th of October University Hospital increased total available beds from 145 to 208. DAF’s overall revenues increased by more than 75% compared to a 2015 baseline.

Yusr International SchoolsYusr International Schools (YIS) operates two campuses, with the larger one in Jeddah accommodating 1,500 pupils. The company’s total student numbers rose to 2,107 during the year. YIS laid the groundwork for a Primary Years Program (PYP) accreditation from the International Baccalaureate Organization.

SEDCO DevelopmentIn 2018, SEDCO Development continued its pivot towards a revenue model where returns are generated via development fees, profits, income from operations, and capital gains.

The company concentrated on two key projects during 2018. It obtained a permit for Al Narwas, a Jeddah-based project owned by SEDCO Holding. Permits were also obtained for Al Rawdah project that is owned by SEDCO Holding and Methak.

Al Mahmal Facilities Services Al Mahmal Facilities Services posted strong growth in 2018 and brought new clients on board. It also expanded into new geographies in Saudi Arabia. Revenue grew 23%, powered by new project wins including the Ministry of Hajj & Umrah Building in Makkah and Al Baik restaurant branches in Jeddah.

IntimaaDuring the year, Intimaa cut fixed costs by 20%, reduced outstanding revenues and brought down bad debt provisions. Revenue increased by 9.3%, with all business lines returning to positive operating income.

The company has focused on growing its main lines of business, improving internal management and bolstering cost controls. Mall Management was segregated as a stand-alone business line, while Operations & Management and Project Management were separated to enhance accountability.

23%Al Mahmal Facilities’ revenue grew 23%, powered by new project wins including the Ministry of Hajj & Umrah Building in Makkah and Al Baik restaurant branches in Jeddah.

Performance Review | Direct Investments (Continued)

Dar Al Fouad opens new state-of-the-art hospital

Nasr City Hospital opened in April, accommodating 170 beds and 220 outpatient clinics.

Yusr International Schools plans two new schools

The two campuses in Jeddah’s Al Shatea District will cater for 4,000 students when completed in 2019.

TarfeehIn the face of rapidly evolving market dynamics, the company has undertaken a complete portfolio restructuring.

Tarfeeh focused on leadership in the fast-casual and quick-service sectors. Ocean Basket was relaunched with a new menu, prompting a 30% sales increase. Applebee’s retained its market leadership amongst direct competitors.

AutoWorld AutoWorld increased its fleet size from 2,500 to over 10,000 between 2010 and 2018. The company strengthened its organizational structure during the year by hiring new C-level members for its management team. A new Board structure and committees were also introduced, enhancing governance.

Late in the year, an organizational restructuring and reinforcement exercise was initiated, resulting in a number of strategic decisions and operational improvements.

Al Mahmal Development Co.Al Mahmal Development manages Al Mahmal Shopping Center in Jeddah. 2018 continued a strategy of tenant mix optimization and diversification in the mall, resulting in strong occupancy numbers. A contract was signed to overhaul the entry and exit mechanism for the adjacent 550-bay parking structure, improving efficiency while reducing operating costs.

EjadaEjada’s portfolio of large-scale government contracts increased 133% during the year. Transport-related large contracts increased 200%, while telecoms-related contracts grew 67%. The company’s Data Management and Business Intelligence services roster grew 104% from 2017.

A major national-level project for the Saudi Ministry of Health was completed. Implementation was also completed on a major project for the Ministry of Finance.

Arabian FarmsThe company’s Dubai operation increased production by 7.8% and remains the GCC’s sole producer of pasteurized-shell eggs. In Al Ain, the company began work on a facility to increase production to 6,000 tons of broiler meat.

AlshiakaAlshiaka opened 7 showrooms in new localities in 2018. The company also soft-launched its store.alshiaka.com e-commerce platform. The brand achieved 100% compliance with new Saudization regulations in its 50+ showrooms across Saudi Arabia within six months. Staff training initiatives saw the development of a new Learning and Performance team to systematically boost soft and sales skills.

A SEDCO Holding Company

TARFEEH


CAPITALIZING ON OUR DIVERSE CAPABILITIES

Performance Review | Real Estate Investments

In Saudi Arabia, SEDCO’s portfolio of real estate assets includes shopping malls, hotels, apartment blocks, office buildings, industrial units and prime development lands, investment funds and a strategic land bank.

Internationally, SEDCO owns and manages a portfolio ranging from high-yield developments in global cities to capital-gain investments and land. SEDCO’s international assets span America, Asia Pacific, Europe, the Middle East, India and the Far East.

Saudi Arabia Real Estate The highlight of the year in Saudi Arabia was the opening of Hotel Galleria in Jeddah. Situated in Prince Mohammed Bin Abdulaziz Street, the property combines an upscale mall and a five-star hotel totaling 79,329 m² of built area on a site of 8,740 m².

The design features a classical facade enclosing a contemporary core. SEDCO is a co-investor in the project, which was executed by SEDCO Development and Elaf manages the property.

Other Saudi properties also had important news to report in 2018. In Jeddah, Red Sea Mall finished its third expansion, including a cinema complex. The expansion consolidated its position as Jeddah’s leading super-mall and immediately sparked a 25% increase in footfall.

In Makkah, the Elaf Kinda five-star hotel property has recently been renovated. The property, with 4 restaurants and a range of amenities, is wholly owned by SEDCO Holding.

Many of our Saudi properties reported excellent occupancy rates in 2018. For example, the Al Khaimah Commercial Center (Tent Souk) in Jeddah maintains 99% occupancy. SEDCO Holding is a co-investor in Al Khaimah Commercial Center, with 50% ownership.

Regarding our Saudi land bank, regulatory changes and a white land tax have increased momentum towards turning unused land into projects that support Saudi Vision 2030. SEDCO has a significant bank of prime undeveloped land across the Kingdom, with sites in Riyadh, Taif, Madinah, Abha, Yanbu, Makkah, Jazan and Jeddah.

International Real EstateWe have optimized our international portfolio with well-timed divestments and new deployments gathering pace. Income-generating properties recorded strong occupancy and delivered stable returns.

SEDCO is focused internationally on Grade A assets that generate sustainable long-term net revenues, while also contributing to societal good. SEDCO’s portfolio follows a balanced strategy and is diversified in terms of operating sectors and geography.

SEDCO’s real estate holdings in America now include senior housing, retail centers, office properties, hospitality assets and veterinary clinics. In Europe and the Middle East, the portfolio includes industrial estates, trade parks, office properties and retail destinations.

Assets in India and the Far East include blue-chip storage facilities, mixed-use seaport properties, information technology and research parks, and land plots.

In the wider Middle East, SEDCO has developed a portfolio of retail, F&B, hospitality, residential and industrial assets. It also holds prime land plots for development.

+25%Red Sea Mall achieved a 25% increase in footfall, largely a result of its third major expansion including 12 cinemas operated by VOX.

International

SEDCO’s international real estate assets span America, Asia Pacific, Europe, the Middle East, India and the Far East.


BECOMING A GLOBAL OUTPERFORMER

Public Equities and Liquid Assets Most major asset classes posted negative results in 2018 as markets changed from a low-volatility, mid-cycle environment to a late-cycle, high-volatility environment. Market sentiment was driven by persistent concerns over global trade, slowing economic growth, and tighter monetary policy from central banks.

The international liquid assets team continued the optimization of SEDCO’s core/satellite strategy for international liquid assets. Regionally, large funds demonstrated robust performance and assets under management increased.

International equities Portfolio optimization saw two regional active funds discontinued and a new global defensive strategy launched. Most active managers managed to outperform their benchmarks, even in a volatile market, boosting overall portfolio results.

Islamic indices once again outperformed their conventional peers, with Dow Jones Islamic indices leading. SEDCO Capital’s passive funds, which track the Dow Jones, benefited from this outperformance.

An actively managed equity fund also managed to generate positive absolute returns for 2018, despite bourses and indices trending downwards in the year’s last quarter.

Regional equities

SEDCO Capital’s MENA Liquid Assets team continued managing SEDCO Capital’s liquid investments in MENA markets. The team’s largest fund, the SEDCO Capital GCC Equity fund, closed the year as number three in terms of equity performance amongst its peers.

Funds managed by the regional liquid asset team grew by 116% in 2018, while capital being managed in discretionary portfolios grew by 1,478%.

International Private Equities SEDCO Holding has direct equity stakes in operating companies and real estate assets in Saudi Arabia. Its international private equity portfolio is managed by wholly-owned subsidiary, SEDCO Capital.

Direct operating companies

In 2018, SEDCO Holding revaluated its operating company portfolio with a view to optimization, cost rationalization and consolidation. A central treasury function lowered costs of borrowing and reduced group leverage.

The Group’s new Focus 2025 strategy sought to increase long-term performance by aligning operating businesses into key verticals, supporting Saudi Vision 2030.

Fund performance

SEDCO Holding’s international private equity investments are managed through its SEDCO Capital asset-management arm. In 2018 the private equity team committed an additional amount of investor capital to new funds in Europe, North America and Asia. Meanwhile, existing funds made annual distributions at a realized multiple of over 2.3x, with an IRR of 18%. 2018 also saw the private equity team commit more capital to funds than in any previous year.

Co-investments

The co-investments team executed 6 transactions globally in 2018, providing growth capital to fast-growing companies in consumer, healthcare, industrial and tech-enabled businesses.

Income Generating Private Investments

SEDCO Capital has continued building on the newly defined asset class of Income Generating Private Investments or IGPIs. This new asset class delivers regular income streams to complement existing alternative investments.

IGPIs offer a hedge against inflation and interest rate fluctuations. They improve portfolio diversification and offer strong downside protection in the face of market fluctuations.

Performance Review | Financial Investments

2.3 XSEDCO’s funds made annual distributions at a realized multiple of over 2.3x, with an internal rate of return of 18%.

116%Funds managed by the regional liquid asset team grew 116% in 2018.


Corporate Review

Corporate Investments A review during the year focused on consolidating Group activities in line with Focus 2025 strategy. A roadmap for the next five years was created towards monetizing assets, optimizing businesses into verticals, and deriving sector-specific synergy to create vertical value chains.

2018 presented opportunities for investments both locally and internationally. Investment was channeled towards sectors prioritized by Saudi Vision 2030 and SEDCO Holding’s Focus 2025 strategy.

Several promising opportunities were initiated to acquire new businesses, add new business lines, or add capacity. Co-investments were made in healthcare, industrial technology and fitness.

Group Finance During 2018, Group Finance continued enhancing the Group’s balance sheet. Liquidity ratios were improved and cash utilization optimized. Excess operating company cash was invested in Islamic deposits and the team identified and mitigated liquidity, forex and counter-party risks for better performance. It capitalized on the Group’s size and resources to negotiate major savings on groupwide insurance premiums.

Group Finance has led the successful implementation of VAT across the Group.

In line with SOCPA’s directives to adopt International Financial Reporting Standards, the team produced the first IFRS-compliant financial statements for SEDCO Holding and its subsidiaries.

Audit, Assurance and ConsultingIn 2018, Audit, Assurance and Consulting (AAC) department continued its evolution from pure auditing to consulting. AAC’s expertise in process mapping, financial accounting, taxation and Zakat regulations helped it to optimize SEDCO Holding’s processes.

The Guest Auditor Program was enhanced, and AAC’s knowledge transfer secondment program also gathered momentum, with a new secondee welcomed to the team. The department has a strong tradition of incubating talent before seeing it transferred to other areas of the Group.

Land DepartmentA digitalization initiative was completed in 2018 and the department moved to paperless record keeping, streamlining operations, improving transparency and enhancing operational agility.

Close to the year-end, a decision was announced to form the Real Estate division under the leadership of new Chief Real Estate Officer and SEDCO Development CEO, Eng. Zuhair Hamzah. This is the first step towards consolidating all real estate activities into one coherent business.

Legal The Legal team allocated resources to staying abreast of the many legal reforms catalyzed by Saudi Vision 2030. The team studied reform impact and ramification, and ensured that SEDCO Holding and Group companies were prepared and in compliance.

In 2018, the team facilitated several large private-equity deals and continued ensuring Group-wide compliance with legislative frameworks. It also responded to global corporate and tax law reforms advocating simpler corporate structures.

Risk Management Risk Management has continued putting in place extensive mechanisms to identify, measure, monitor and mitigate risks. In 2018 it carried on systematically identifying and quantifying risk, while matching it with risk appetite and tolerance.

The department furthered its risk evaluation of all Group assets. Continuous evaluation is part of a strategy to turn risk into a quantifiable element priced directly into SEDCO Holding’s investment strategies.

On the personnel front, the department conducted a campaign of in-house training for Group employees with the aim of helping them embed the idea of quantifiable risk into daily processes and company culture.

Human ResourcesHR department introduced the new direction of ‘Living Our Values’ to inform Group-wide Learning & Development activities in 2018. Training modules were mapped to specific group values for accountability. The department started moving away from standard training approaches, towards story-based simulations to boost empathy, involvement and learning. 587 employees passed through corporate competencies improvement programs.

In 2018, HR also implemented a unique and competitive pay strategy including short- and long-term incentives linked to company performance, fostering employee retention and helping to minimize turnover.

A third wave of future leaders graduated from the SEDCO Group Stars program – an initiative that identifies high-potential employees and fast-tracks them to leadership roles. A further 15 stars were enrolled in the fourth wave. The program continued benefiting from mentoring by previous Stars.

Information TechnologyIn 2018, IT department delivered 27 projects for central departments and SEDCO operating companies with a high 87% satisfaction rating. Further, 100% of all SLAs with operating companies were fulfilled. IT also led SEDCO Holding’s Digital Workplace Initiative, which brought efficiency and compatibility benefits.

The initiative was complemented by a Business Intelligence platform that draws on operational data to deliver vital insights through easy-to-read dashboards. This empowers senior management to make informed, timely and accurate decisions.

Continual Group-wide cybersecurity assessments and vulnerability tests were conducted. SEDCO Holding and SEDCO Capital’s IT disaster recovery and business continuity plans were tested in line with CMA requirements.

The IT team also completed a number of value-adding projects for SEDCO Holding’s operating companies.

Marketing and Corporate Responsibility Marketing rebuilt its capabilities in 2018 while onboarding new colleagues and bringing the team to full strength. SEDCO Holding’s strategy was refined, and Corporate Social Responsibility continued to take center stage.

The Marketing team continued to support SEDCO operating companies and launched the new branding for Galleria, SEDCO’s magnificent new hotel and retail development in Jeddah.

A renewed focus on impact and cost rationalization was formalized in a KPI-driven approach, and a new brand tracker was launched to monitor SEDCO Holding’s brand performance.

The 2018 Annual Marketing Forum was a highlight, bringing together decision-makers from Group companies to share knowledge, expertise and case studies.

Employee engagement remained central. The collaborative innovation platform Fikra continued crowdsourcing ideas from employees. These initiatives sparked a positive work environment that saw SEDCO win 12th place in the Great Place to Work® rankings in Asia.

Corporate Social Responsibility and the spirit of volunteering became embedded in the organizational culture, with employees routinely exceeding needed volunteering limits.

Riyali exceeded its 2018 targets and an important new collaboration was initiated with Saudi British Bank (SABB) to amplify Riyali’s reach.

OUR STRONG FOUNDATION FOR GROWTH


Sustainability Review

EMBRACING OUR NATION’S VISION

Corporate Social Responsibility is a core element of SEDCO Holding’s organizational culture and radiates outwards to involve Group companies. CSR is inspired by the values of SEDCO’s shareholders and Saudi Vision 2030, which specifically calls on the private sector to be socially responsible.

CommunityGiving back to the community is a key element of SEDCO culture. During Ramadan, the CSR team combined community-focused activities under one purpose. The ‘Journey of Giving’ initiative engaged employees, reached out to families and gave back to society’s most vulnerable, including orphans.

Volunteering went mainstream in 2018. The target of 2,160 volunteering hours was comfortably exceeded, with employees participating in 36 initiatives, a 6% increase compared to the previous year.

SEDCO’s Group-wide culture of community outreach saw it win the Gulf Sustainability Award for volunteering. 2019 will bring a more streamlined volunteering approach that puts employees in the driver’s seat and encourages them to take ownership of volunteering opportunities without being driven by the CSR team.

EmployeesTeam spirit and positivity were facilitated in 2018 through initiatives such as Smile Day. The SEDCO Football Cup held another successful season, with the number of participating employees and operating companies increasing.

SEDCO continued recognizing employee achievements with its Employee of the Month award. The SEDCO Group Stars program, which fast-tracks high-potential employees to leadership roles, saw its third wave of future leaders graduate. A further 15 stars were enrolled in the fourth wave.

2018 also saw an expansion of SEDCO’s Tawasul alumni program.

2019 will expand employee wellness to cover personal wellbeing beyond physical fitness. SEDCO Holding will initiate programs for mental and spiritual wellbeing, and promote holistic health.

Group company initiativesIn 2018, Ejada signed a new partnership with STC to support Saudi Vision 2030, with investment in local goods, services, assets and technology to spur economic diversification and improve Saudi Arabia’s balance of payments. Arabian Farms participated in the UAE Ag-Ccelerator initiative to adopt sustainable technologies, enabling effective agriculture in marginal environments. And SEDCO Capital continued to promote its Prudent Ethical Investing (PEI) approach on the world stage.

15 new starsSEDCO Group Stars enrolled further 15 stars in the program’s fourth wave.

2,160 The target of 2,160 volunteering hours was comfortably exceeded in 2018, with employees participating in 36 initiatives.


Riyali What started as a community outreach program has become a national movement of youth empowerment. Set in 2012, Riyali’s original target was to reach 50,000 young people in 5 years. This target was achieved two years ahead of schedule.

The targets were then expanded, with Riyali looking to reach 2 million people by 2020, backed by partnerships with public and private sector entities. Riyali has also been made available via online learning-on-demand channels to increase reach. A recent partnership with the Ministry of Education sees Riyali coursework taught in schools to benefit younger audiences.

In 2018, Riyali partnered with HSBC-affiliate SABB Bank to further amplify reach. A formal agreement offers Riyali the funding to achieve its goal of 2 million beneficiaries by 2020.

Salem Bin Mahfouz FoundationSalem Bin Mahfouz Foundation (SBMF) focused on three key areas during the year – maximization of grant impact, managing image and reputation, and delivering institutional excellence.

The foundation allocated a total of SAR 38.7 million for its programs: SAR 20.7 million to education, SAR 9.1 million to social development, and SAR 8.9 million to empowering non-profit organizations.

In addition, four key partnerships were finalized: the General Department of Education in Makkah Region, the Department of Education in Laith Province, the Sulaiman Bin Abdul Aziz Al Rajhi Foundation, and the Abdulrehman Saleh Al Rajhi & Family Foundation.

EducationFour new scholarships were awarded in 2018, with 84 scholarships continued. 49 students were offered SAR 10,000 each as financial aid. 85 faculty members benefited from an academic leaders training program across 4 universities in 3 cities.

In addition, the Sufara Alwastia Student Forum saw 180 students qualify. A further 175 students benefited from a program to develop undergraduate leadership skills.

2 millionRiyali aims to reach 2 million people by 2020.

Sustainability Review (Continued)

383,938

On International Volunteer Day, SBMF declared that it had sponsored over 9,000 volunteers and totaled 383,938 volunteering hours over the last five years.

Riyali’s remit has been expanded to include entrepreneur support. The resulting Rowad Riyali initiative helps startups manage cash flow and overcome financial hurdles. It has developed links with incubators, accelerators and Chambers of Commerce in Saudi Arabia.

In 2018, Rowad Riyali partnered with Blossom, Saudi’s first female-focused accelerator, to support local talent. A joint program inducted 10 startups into an intensive four-week accelerator to equip founders with the tools, networks and resources to succeed.

Rowad Riyali also participated at the 2018 Business Youth Exhibition, where visitors were asked to try an on-the- spot lesson to deliver a successful elevator pitch.

Riyali’s successes in 2018 saw it win the 2018 IBX CSR and 2018 Learning Technologies Award.

In 2019, Riyali will pursue ambitious expansion to accommodate more stakeholders and engage new audiences. Its growth plans are aligned with entrepreneurial opportunities sparked by the National Transformation Plans 2020 and 2023, and Saudi Vision 2030.

SBMF’s program of volunteering units also expanded. 75 school volunteering clubs were added, with additional 65 university volunteers.

The SBMF-supported Jeddah Award for Outstanding Teachers awarded 14 teachers. SBMF supported the implementation of Kagan’s cooperative learning models and the Judhur program qualified 50 nursery teachers. Meanwhile, the STEM learning lab initiative launched two labs to help students explore science, technology and mathematics.

Empowering third sector organizationsThe foundation continued allocating resources to improve third sector organizations by developing human resources and organizational structures. SBMF’s Tawasul Forum is a platform for exchanging expertise on effective community development by non-profits.

30 women graduated from the Ta’atheer program for building female capabilities in the non-profit sector. The Rubban program, which helps develop young leaders for third-sector organizations, also saw 30 people qualify.

The Rakeen Consulting and Capacity Building program continued training employees, while 150 non-profit employees benefited from the Jadara specialized qualification program. The foundation also focused on its own Bin Mahfouz mosques, with 800 teachers and members of staff benefiting from development programs.

Community development2018 continued an emphasis on community development. An array of programs targeted family development, individual economic empowerment, youth participation in sports, and volunteering. The Ghars social initiatives competition launched 900 initiatives by an equal number of volunteer teams.

The Kafa’at (competences) program benefited 85 young people. The Iftikar program provided 250 children with guidance and monitoring. During Ramadan, over 10,000 food care packages were distributed.

The Bin Mahfouz mosques continued their special community programs, with over 100 social and cultural activities and 55 Quran memorization sessions throughout the year.

Looking to the futureSBMF will launch its second five-year strategic plan (2019-2023) to align with Saudi Vision 2030. This is being developed using the Balanced Score Card approach. Apart from strategic imperatives, the plan includes key social causes and the interventions planned by SBMF for maximum impact.


24 | SEDCO Summary Annual Review 2018

2018 Awards جــوائـــــز ٢٠١٨

ريالي Riyali

جائز IBX الدولية لألعمال - المسؤولية المجتمعية

برنامج جوائز التميز في األعمال الدولية

IBX Award for Corporate Social Responsibility

International Business Excellence Awards

رياليRiyali

ريالي للوعي الماليالشبكة اإلقليمية للمسؤولية المجتمعية

Riyali Financial Literacy Program Impact

Regional CSR Network

النهدي Nahdi Medical Company

أفضل برنامج لتنمية المجتمع المحلي جوائز الخليج لالستدامة والمسؤولية المجتمعية

Best program to develop the local community

Gulf Sustainability and CSR Award

رد سي مول Red Sea Mall

جائزة التسويق التقليدي لـ »كأس رد سي مول«

(ICSC) «المجلس الدولي لمراكز التسوق»

Traditional marketing award for ‘Red Sea Mall Cup’

International Council of Shopping Centers (ICSC)

ريالي Riyali

أفضل مشروع لتقنيات التعلم – للقطاع العام و غير الربحي

جائزة تقنيات التعلم

Best Learning Technologies Project – Public and

Non-Profit SectorLearning Technologies Awards

النهدي Nahdi Medical Company

المبادرة المجتمعية األكثر تأثيرًا »برنامج وازن«

جوائز مؤسسة تأثير

Best CSR impact initiative ‘Wazen Program’

Ta’theer CSR Award

سدكو القابضة SEDCO Holding

المركز ١٢ – قائمة أفضل بيئة عمل على مستوى آسيا

Great Place to Work®

12th in Asia’s Top Best WorkplacesGreat Place to Work®


أفضل برنامج تطوعي للموظفين »طّوع مهارتك«

جوائز الخليج لالستدامة والمسؤولية المجتمعية

Best Sustainability Program for ‘Volunteer Your Skill’

Gulf Sustainability and CSR Award


قائمة أفضل اإلدارات القانونية الداخلية للشركات في منطقة الشرق األوسط

The Legal 500

Top Legal Teams list in the Middle EastThe Legal 500

رد سي مولRed Sea Mall

جائزة »المجلس الدولي لمراكز التسوق« لمشروع »إطعام«

(ICSC) «المجلس الدولي لمراكز التسوق»

ICSC Foundation Award for ‘ITAA’M’ project

International Council of Shopping Centers (ICSC) فندق غاليريا من إيالفHotel Galleria

جائزة أفضل تصميم معماري فاخر في المملكة

الجوائز العالمية للفنادق الفاخرة

Best Luxury Architecture Design HotelWorld Luxury Hotel Awards

24 | ســدكو تقريــر المراجعــة الســنوية الموجز لعام 2018

new era of opportunity - sedco holding · hasan has the confidence of both the board and our...

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