2019 UEM Edgenta Annual Report

Property & Facility Solutions Enhancing asset value, optimising asset performance We offer technology-driven Green Building Solutions and Asset Optimisation, with a focus on energy and sustainability. Through the use of technology, we reduce the operational costs of our clients’ businesses and enhance their asset value. WHO WE ARE Operational Review Our Property & Facility Solutions division registered muted growth in FY2019, with revenue rising 1.5% to RM192.2 million from FY2018. Nevertheless, we recorded a significant increase in profitability due to improved margins from new projects. During the year, EBITDA rose 67.3% to RM33.3 million and PAT increased 37.4% to RM23.9 million. We currently manage more than 300 buildings across Malaysia and Dubai, United Arab Emirates. From smart building solutions to recreational spaces, we improve quality of life and experience by connecting people, assets and processes. FINANCIAL PERFORMANCE (RM MILLION) 2019 2018 189.4 192.2 Revenue 19.9 33.3 EBITDA 17.4 23.9 PAT from 2018 1.5% from 2018 67.3% from 2018 37.4% 58 KEY INITIATIVES AND RESULTS OUTLOOK AND PROSPECTS The Property & Facility Solutions division will continue its focus on green and sustainable energy solutions. To date, we have a track record of undertaking energy efficiency initiatives at more than 80 buildings and have facilitated Green Building Index certification for, amongst others, a Gold Rating for the Petronas Twin Towers. In particular, we aim to scale-up our Energy Performance Contracting (“EPC”) solution, an innovative, turnkey financing concept of shared savings which helps building owners overcome upfront capital commitment. We have undertaken ten EPC projects for the Prime Minister’s Office, three industrial buildings and six MoH Malaysia hospitals which had resulted in a total contract value of more than RM100 million. Additionally, we will focus on selective projects within the highly competitive facility management sector in Malaysia, targeting the high-value industrial and commercial sectors. We are confident that our sustainable energy solutions will provide highly complementary and value-added services to our clients. Key Initiatives Results Operational Excellence • Surpassed targets in actual cost savings achieved with operational excellence team’s support such as CI & LEAN programmes at work sites Technology Driven Solutions • Continuous improvement on the Smart Connect platform – addition of features such as the Building Condition Assessment capability and Point-and-Shoot functions to provide intelligent insights leveraging on Artificial Intelligence / Machine Learning • Roll-out of a vendor marketplace platform to procure spare parts and sub-contractor services Development of Market Segment & Engagement • Continued to expand footprint in banking industry with new contracts to service Bank Negara Malaysia and more than 250 new CIMB branches, in addition to the existing nine CIMB buildings we manage in the Klang Valley and Penang • Secured contracts in facility management for additional wasl Asset Management Group sites in Dubai • New contract win from Sime Darby Motors for Architecture and Green Design & Build works signifies entrance into the automotive industry segment • Participation in International Greentech & Eco Products Exhibition and Conference Malaysia 2019 (“IGEM 2019”) to increase market and brand awareness Performance-Based Incentives • Operations Incentive Scheme (“OIS”) for Facility Managers implemented in 2019; the OIS rewards Facility Managers who manage and maintain site operations effectively and realise savings, contributing to improved gross profit 59 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 Operational Review