2019 UEM Edgenta Annual Report

68 69 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 The Economic pillar houses the initiatives which we have identified towards achieving Better Business for our organisation. This covers activities related to our Workplace, the Growth of our business and delivery of value, as well as Collaborations, which are integral to the continuity of our operations and industries which we operate in. ECONOMIC Operational Excellence and Technology Technology & Innovation represents one of our six Strategic Focus Areas and hence, is a key enabler of our sustainability, as it unleashes the operational excellence required for us to achieve long-term growth for our business, as well as offer value-added solutions for our clients. Key Initiatives include: 1 • Technology & Innovation: Command & Contact Centre in partnership with Microsoft (adoption of AI, Machine learning and Cloud-based systems) • Systems developed in-house - UE Track TM - Edgenta Smart Connect Solutions - Road Asset Management System (“RAMS”) 2 • Operational Excellence Through Process Improvement - Innovation Garage: High-impact problem solving - Continuous improvement through LEAN with manufacturing thinking - Outcome-driven delivery model - Asset-based P&L Accountability - Edgenta Academy 3 • Automation & Mechanisation - Radio Frequency Identification Technology - Real-Time Sensors - Mechanised vehicles for highway maintenance operations 4 • Research & Development - Pavement Research Centre - Environmental Material Testing Lab - Operations Central Workshop 5 • Productisation of RAMS For more information on our Technology & Innovation initiatives, please refer to pages 26 - 27 of this Report. Value Creation Over the years, we have streamlined our business and invested in our people to unleash operational excellence and value creation. This has enabled us to adopt new ways to work and provide new services to our clients, anchored on technology and innovation, as well as riding on digital transformation, automation and mechanisation. This has been enabled through our journey of expansion undertaken since 2014. BETTER BUSINESS – GROWTH Track record of successful corporate exercises: • Successful integration of entities to establish the UEM Edgenta of today: - Merger of PROPEL, Opus and Faber in 2014 - Acquisition of KFM Holdings Sdn. Bhd. (now known as Edgenta GreenTech Sdn. Bhd.) which strengthened our capabilities in green building solutions; and UEMS Pte. Ltd., which has expanded our regional presence in Singapore and Taiwan • Streamlined Company’s business via the divestment in Opus International Consultants, New Zealand Organic Growth Regional expansion through the award of the following projects: • Cikampek-Palimanan Highway, Indonesia • MoH Singapore restructured hospitals • Tri-Service General Hospital and National Taiwan University Hospital, Taiwan • wasl Group, United Arab Emirates Expanded offerings: Technology and Sustainability / Green Solutioning (Please refer to our Climate Positive initiatives under the Environment pillar in pages 76 - 77) Streamlined businesses to focus on our core expertise in Healthcare Support, Infrastructure Services, Property & Facility Solutions and Asset Consultancy Our value creation achievements between 2014 to 2019: Registered a compounded annual growth rate (“CAGR”) of 13.4% in our core revenue from RM1.27 billion in 2014 to RM2.38 billion in 2019, while core PAT has risen at a CAGR of 13.2% from RM101.0 million to RM188.0 million during the same period More than RM850 million in dividends paid out over the last six years This is in line with our dividend policy, which we revised in 2018, to distribute 50%-80% of our PATANCI. Please refer to 2019 Key Highlights on pages 16 - 17 on key financial and non-financial performance for FY2019 and Group Statement of Value Added on page 46 on distribution of value to various key stakeholders. Sustainability Statement Sustainability Statement