2019 UEM Edgenta Annual Report

Partnering for a better healthcare experience We ensure the hospital assets and clinical facilities of our healthcare clients in the public and private sectors at more than 300 hospitals and clinics in Malaysia, Singapore, Taiwan and India are functioning at optimal levels of efficiency. WHO WE ARE Healthcare Support Operational Review 56 We achieve this through our non-clinical healthcare support services and technology solutions, including biomedical equipment maintenance, environmental services and integrated facilities management. FINANCIAL PERFORMANCE (RM MILLION) Concession 463.5 490.2 Revenue 64.7 57.4 EBITDA 42.1 41.0 PAT from 2018 5.8% Commercial 2019 2018 EBITDA 57.1 58.2 PAT 44.4 43.4 Revenue 521.1 642.0 from 2018 23.2% from 2018 1.9% from 2018 2.3% from 2018 11.3% from 2018 2.5% Our Healthcare Support business registered a 15.0% year-on-year growth in revenue to RM1.13 billion in FY2019, covering both our Concession and Commercial businesses. This was a result of new contracts won, in particular the Ministry of Health Singapore’s (“MoH Singapore”) restructured hospitals. Stagnant profitability for our Concession business was mainly due to unscheduled maintenance on major equipment in our Malaysian concession hospital business. For our Commercial business, despite the increase in revenue from execution of significant contacts won, the margins recorded were lower due to the competitive tendering environment. KEY INITIATIVES AND RESULTS Operational Review OUTLOOK AND PROSPECTS In 2020, the Asset Management segment led by the Healthcare Support division is expected to continue delivering growth for the Company, fuelled by the increasing demand for hospital support services and the emergence of new care models beyond the traditional hospital settings. In Malaysia, we will focus on enhancing our collaboration with MoH Malaysia through higher value solutions. This will include scaling up value- added services at MoH Malaysia hospitals and developing more Digital Healthcare solutions. Among other projects we will focus on include our Replacement Through Maintenance programme, Blood Bank Information Systems and Energy Performance Contracting services. We will also continue our expansion into private hospitals in Malaysia, where the trend of outsourcing is gradually increasing. On the regional front, we will place emphasis on operationalising and optimising the contracts secured from MoH Singapore. While we are cautious on the short-term outlook due to the ongoing global coronavirus (“COVID-19”) outbreak, we will remain focused on achieving operational excellence to safeguard margins and deliver quality service. The MoH Singapore contracts provide us with long-term earnings visibility, with the contracts’ duration of up to five years and renewal options of up to five years. Operational Excellence • Secured Energy Performance Contracts (“EPC”) for six hospitals • Successfully mobilised larger scale operations for new contracts secured, amongst others such as clinic support services for nine state clinics in Penang, comprehensive IFM for CVSKL and housekeeping services at Changi General Hospital, Singapore • All 32 of the government hospitals we manage in Northern Peninsular Malaysia have received 1 or 2-star ratings by AEMAS / EMGS • Achieved the National Environment Agency of Singapore Enhanced Clean Mark Accreditation Scheme (Gold) Award for 5 th consecutive year • Achieved high ratings in MoH’s Company Performance Assessment and Customer Feedback Survey; the best-rated among hospital support service concession companies • Slim River Hospital, Perak awarded National Energy Award Runner-Up, Level 5 • Maintained ISO 9001:2015, ISO 13485:2016, ISO 14001:2015, OHSAS 18001:2007 and MS1722:2011 certifications for concession business operations • Maintained Integrated Management System (“IMS”) certification including ISO 9001:2015, ISO 14001:2015, ISO 45001:2018; continuity management system ISO 22301:2013 for commercial business • Achieved new certification for Information Security Management System (ISO 27001:2013) for commercial business in Singapore and Taiwan • Attained bizSAFE Partner on top of the bizSAFE Level Star, an accreditation under the Workplace Safety & Health Council (“WSHC”), Singapore to promote safety standards Key Initiatives Results • Completed full-year implementation of Healthcare Support Performance Incentive (“PI”) Scheme 2.0 for Facility Heads of Services; the PI Scheme rewards Facility Heads who manage and maintain site operations effectively resulting in savings, contributing to a higher gross profit • Trained & certified 29 laundry & linen services supervisory personnel through National Occupational Skill Standard certification programme from Malaysian Skills Certification • Edgenta UEMS won the Malaysia Best Employer Brand Award at the World Human Resource Development (“HRD”) Congress 2019 Organisational Excellence • Implemented UE Track TM for eight additional hospitals • Installed Radio Frequency Identification (“RFID”) tagging for linen management at selected hospitals in Northern Region to enhance inventory management and decision making • Expanded use of Infra-red Thermography (“IrT”), Vibration Analysis and Drones to undertake cost saving initiatives generated from automation, mechanisation and technology utilisation • Scaled up Active FM dashboard monitoring using predictive, condition-based and Internet of Things (“IoT”) technology at four hospitals • Rolled out optimisation of existing 24-hour Regional Helpdesk Centre operations for 32 hospitals • Installed Ambulance Monitoring Systems in 213 ambulances Technology and Innovation • The Biomedical Engineering Maintenance Services (“BEMS”) unit embarked on a new Replacement Through Maintenance (“RTM”) project for hospital equipment at four hospitals for up to six years • Secured first contract to provide visitor management services in Singapore General Hospital • Secured an integrated facilities management (“IFM”) contract with Cardiac Vascular Sentral Kuala Lumpur (“CVSKL”), marking the first comprehensive IFM contract for private hospitals in Malaysia Expansion Into New Areas 57 UEM Edgenta Berhad UEM EDGENTA AT A GLANCE MESSAGE FROM OUR LEADERSHIP STRATEGIC FOCUS OPERATIONAL REVIEW SUSTAINABILITY EFFORTS CORPORATE GOVERNANCE INTRODUCTION FINANCIAL REVIEW ADDITIONAL INFORMATION Annual Report 2019