Sime Darby Bhd. · MYX:SIME
Sime Darby Bhd — Citibank Malaysia Investor Symposium 2019
48 slides from Sime Darby Bhd's conference presentation, Sep 4, 2019
Slide 1: Citibank Malaysia Investor Symposium 2019
SIME DARBY BERHAD Citibank Malaysia Investor Symposium 2019 4 September 2019
Slide 2: Disclaimer
STRICTLY PRIVATE & CONFIDENTIAL Disclaimer This document is strictly confidential to the recipient. It is being supplied to you solely for your information and may not be reproduced, redistributed or passed on, directly or indirectly, to any other person or published, in whole or in part, for any pu
Slide 3: Table of Contents
STRICTLY PRIVATE & CONFIDENTIAL Table of Contents Section Page 1. Sime Darby Berhad 3 2. Motors Division 14 3. Industrial Division 25 4. Logistics Division 36 5. Healthcare Division 40 6. Others 43 7. Appendices 45 2
Slide 4: Company overview
STRICTLY PRIVATE & CONFIDENTIAL Company overview 3
Slide 5: Latest Developments (1/2)
STRICTLY PRIVATE & CONFIDENTIAL Latest Developments (1/2) US-China Trade War; China slowdown • 1 Sep: China imposed 5-10% tariffs on 5k items from USA; US imposed 15% tariffs on USD112bn Chinese imports • China lets the Renminbi weaken to 7 vs. USD, its lowest in a decade. As 40% of SDB’s earnings a
Slide 6: Latest Developments (2/2)
STRICTLY PRIVATE & CONFIDENTIAL Latest Developments (2/2) Minimal direct impact due to localization Total Goods hit with Tariffs imposed by US and China during the Trade War (2018-2019) (USD bn) US Tariff Action 200 200 China Tariff Action 112 60 60 75 34 34 16 16 July '18 Aug '18 Sept ' 18 May '19
Slide 7: Sime Darby Berhad 18 Countries & 20,586 Employees
STRICTLY PRIVATE & CONFIDENTIAL Sime Darby Berhad Leading trading company in Asia Pacific with strong partnerships with premium brands One of the largest BMW dealers in the world South Korea One of the largest CAT China dealers globally Hong Kong 6 hospitals in Malaysia & 18 Countries & Macau Taiwan
Slide 8: Business Overview
STRICTLY PRIVATE & CONFIDENTIAL Business Overview Diversified trading and logistics company; valuable healthcare component Motors Industrial Healthcare Logistics Retail, distribution and assembly Comprehensive range of 50:50 JV with Ramsay Ports and logistics in Shandong, businesses equipmen
Slide 9: FY2019: Segmental Information
STRICTLY PRIVATE & CONFIDENTIAL FY2019: Segmental Information Diversified exposure across segments and geographies, low gearing for expansion (Financial Year Ended 30 June 2019; RM million) Total Revenue Capital Structure By Segment By Geography Debt/Equity: 17.03% 15,118 405 Logistics Others 1% 0%
Slide 10: Our Core characteristics
STRICTLY PRIVATE & CONFIDENTIAL Our Core characteristics High volume, low margin business with significant footprint across Asia; world class partners Exposure to megatrends Vast network across Asia Pacific Business is a proxy to: • Established network and strong • Commodity price cycle for Industri
Slide 11: FY2019 Financial Results
STRICTLY PRIVATE & CONFIDENTIAL FY2019 Financial Results Reported Profit: Financial year ended 30 June 2019 In RM Million FY2019 FY2018 YoY % Revenue 36,156 33,828 6.9 PBIT 1,383 1,074 28.8 Finance income 32 104* Finance costs (124) (113) Profit before tax 1,291 1,065 21.2 Taxation (281) (380) Profi
Slide 12: FY2019 Financial Results
STRICTLY PRIVATE & CONFIDENTIAL FY2019 Financial Results Core Profit of Continuing Operations: Financial year ended 30 June 2019 In RM Million FY2019 FY2018 YoY % Reported PBIT 1,383 1,074 28.8 Adjustments • Motors Vietnam (12) 199 • Gain on disposals (126)1 (238)2 • Fair value loss on financial ass
Slide 13: 5-Year Value Creation Plan
STRICTLY PRIVATE & CONFIDENTIAL 5-Year Value Creation Plan Blueprint intact; Enhanced focus on Mobility & Healthcare; To continue operating Logistics To be the leading Motors & Industrial multi-national in Asia Pacific Revenue Cost Monetisation of Organic Business Expand Synergistic M&A enhancement
Slide 14: Executive Leadership
STRICTLY PRIVATE & CONFIDENTIAL Executive Leadership Qualified & Experienced Management Team DATO’ JEFFRI SALIM MUSTAMIR MOHAMAD DATUK THOMAS LEONG ROSELAINI FAIZ DAVIDSON Group Chief Financial Officer Group Chief Strategy Officer Group Chief Human Group Chief Executive Officer Resources Officer SCO
Slide 15: Motors Division
STRICTLY PRIVATE & CONFIDENTIAL Motors Division 14
Slide 16: History & Key Milestones
STRICTLY PRIVATE & CONFIDENTIAL History & Key Milestones Solid Track Record Across 9 Markets in the Asia Pacific Region BMW (HK & Macau) New Zealand Malaysia & China Jaguar & Land Rover (Malaysia), Ferrari 1972 1998 2010 2014 Acquired the sole importer Acquired 80% of Appointed distributor & and d
Slide 17: Sime Darby Motors
STRICTLY PRIVATE & CONFIDENTIAL Sime Darby Motors We represent strong luxury and mass market brands across APAC Malaysia Singapore Thailand Australia New Zealand Hong Kong Macau China China Taiwan Distributor Distributor Dealer Dealer Distributor Distributor Distributor Dealer Distributor & Dealer &
Slide 18: Sime Darby Motors
STRICTLY PRIVATE & CONFIDENTIAL Sime Darby Motors Focused on Expansion in Asia Pacific HK & Macau Current Presence Distributor & Dealer Dealer Countries & Achievements Assembly Rental One of the largest BMW dealer globally One of Top Rolls Royce dealers China Taiwan in Asia Pacific A leading D
Slide 19: Sime Darby Motors
STRICTLY PRIVATE & CONFIDENTIAL Sime Darby Motors Focus on new model launches, expand assembly, M&A for new territories and marques V IV Mobility III Strategy Business II Expansion Objectives Expand I Assembly Turnaround Poor Performers Operational Excellence Leverage on new Focused plan to As
Slide 20: Sime Darby Motors: Key Financial Highlights
STRICTLY PRIVATE & CONFIDENTIAL Sime Darby Motors Key Financial Highlights Revenue (RM million) PBIT (RM million) Record sales of the trucking business across all brands in Impacted by GST in Stronger contributions NZ, higher sales volume in China and increased COE quota Malaysia and government from
Slide 21: Sime Darby Motors
STRICTLY PRIVATE & CONFIDENTIAL Sime Darby Motors New models in premium segment to spur growth despite challenging market environment 86,906 9,219 9,093 17,404 20,310 Units Sold (FY2018: 81,741) Units Sold Units Sold FY2018 FY2019 16,872 37,210 35,601 16,611 43,537 Units Assembled (FY2018: 29,896) A
Slide 22: Units Sold, Revenue & PBIT by Region (1/2)
STRICTLY PRIVATE & CONFIDENTIAL Sime Darby Motors Units Sold, Revenue & PBIT by Region (1/2) FY19 Sales Contribution & Reported Revenue & PBIT Marques Units Sold Units Sold (RM miilion) 7.3% 4.7% 2.6% 6.2% 6.1% 6.3% Malaysia 31,230 333 223 247 Malaysia, 26,607 204 219 18% 87 18,571 17,663 Malaysia 4
Slide 23: Units Sold, Revenue & PBIT by Region (2/2)
STRICTLY PRIVATE & CONFIDENTIAL Sime Darby Motors Units Sold, Revenue & PBIT by Region (2/2) FY19 Sales Contribution Reported Revenue & PBIT Marques Units Sold & Units Sold (RM miilion) 3.5% 1.6% 1.7% 2.7% 3.2% 2.3% China / HK / 43,537 Macau / Taiwan 250 231 277 235 33,915 34,29335,601 124 134 31,59
Slide 24: Competition in China affecting margins; Tax-free period spurred Malaysia
STRICTLY PRIVATE & CONFIDENTIAL Sime Darby Motors Competition in China affecting margins; Tax-free period spurred Malaysia China, HK, Macau, Taiwan +6.2% +15.7% • Higher units of BMW and Super Luxury vehicles sold in China, 21,606 628 20,341 however margins for BMW operations were lower due to 543 c
Slide 25: Upcoming model launches expected to boost sales in 1QFY2020
STRICTLY PRIVATE & CONFIDENTIAL Sime Darby Motors Upcoming model launches expected to boost sales in 1QFY2020 BMW Z4 2019 Mini 60 Years Edition July 2019 August 2019 BMW X3M & X4M Porsche 911 Cabriolet September 2019 September 2019 24
Slide 26: Industrial Division
STRICTLY PRIVATE & CONFIDENTIAL Industrial Division 25
Slide 27: History & Key Milestones
STRICTLY PRIVATE & CONFIDENTIAL History & Key Milestones Long-standing Partnership with Caterpillar Since 1929 Sime Darby & Co China Engineers Ltd USD8.8 bn acquisition of (Kumpulan Sime Darby became a subsidiary of the group 1910 1972 Bucyrus by Caterpillar. 2011 Bhd) established in Hastings Deerin
Slide 28: Sime Darby Industrial
STRICTLY PRIVATE & CONFIDENTIAL Sime Darby Industrial Strong brands and comprehensive market reach across APAC Energy Solutions CAT Dealer Operations Allied Brands Group Group Malaysia Malaysia, Brunei (via JV with Hong Kong & Kubota Corp & Macau, China Marubeni Corp) Singapore, Maldives, Christmas
Slide 29: Regional Presence Across Countries and Territories
STRICTLY PRIVATE & CONFIDENTIAL Sime Darby Industrial Regional Presence Across 17 Countries and Territories, Supported by a Network of Branches Principal activities Xinjiang – Sale, rental and used equipment of Caterpillar South Korea Hunan equipment and engine Jiangxi Fujian – Sale of parts
Slide 30: Sime Darby Industrial
STRICTLY PRIVATE & CONFIDENTIAL Sime Darby Industrial Leverage on commodity upswing, digital as key enabler, enhance recurring income profile IV III Restructuring of Non-Core II Businesses Organic Objectives Business I Expansion Cost Optimization Revenue Enhancement Enhanced sales from Operation
Slide 31: Sime Darby Industrial: Key Financial Highlights
STRICTLY PRIVATE & CONFIDENTIAL Sime Darby Industrial Key Financial Highlights Revenue (RM million) PBIT (RM million) 14,429 14,113 13,575 1,396 13,041 1,331 12,073 10,637 10,962 1,106 9,946 10,127 1,039 8,645 898 8,210 7,629 793 798 725 612 552 341 253 FY2008 FY2009 FY2010 FY2011 FY2012 FY2013 FY20
Slide 32: Outlook remains positive despite slight reduction in order book
STRICTLY PRIVATE & CONFIDENTIAL Sime Darby Industrial Outlook remains positive despite slight reduction in order book AUSTRALASIA • Growth in mining industry in Asia Pacific region propelling demand for both mining equipment RM2,747m RM2,381m replacement cycles and expansions Order book as at -13% O
Slide 33: Revenue & PBIT by Region (1/2)
STRICTLY PRIVATE & CONFIDENTIAL Sime Darby Industrial Revenue & PBIT by Region (1/2) FY19 Sales Contribution & Products / Services Revenue (RM million) PBIT (RM million) YoY Orderbook FY19 Sales Contribution CAT New Equipment & Engines 10.5% 8.5% 5.2% 5.5% 3.9% 4.6% Malaysia, 8% 1,423 150 1,230 1,18
Slide 34: Revenue & PBIT by Region (2/2)
STRICTLY PRIVATE & CONFIDENTIAL Sime Darby Industrial Revenue & PBIT by Region (2/2) FY19 Sales Contribution & Products / Services Revenue (RM million) Core PBIT (RM million) YoY Orderbook FY19 Sales Contribution CAT New Equipment & 5.4% 4.7% 3.9% 3.5% 4.1% 4.9% Engines China / HK / Macau, 27% 188 3
Slide 35: Increased sales and profits in Australasia
STRICTLY PRIVATE & CONFIDENTIAL Sime Darby Industrial Increased sales and profits in Australasia Australasia +8.2% +30.4% 14,113 798 • Higher equipment deliveries to both mining and 13,041 construction sectors 612 • Higher margins from parts and services • Contribution from Hardchrome since Dec 2018
Slide 36: Acquisition of Gough Group
STRICTLY PRIVATE & CONFIDENTIAL Acquisition of Gough Group Rare opportunity to expand CAT franchise into NZ • Caterpillar distributor in New Provides comprehensive range of CAT Forestry Zealand and products and services CAT Pacific Islands since 1932 Building Construction • 23 locations and 455 empl
Slide 37: Logistics Division
STRICTLY PRIVATE & CONFIDENTIAL Logistics Division 36
Slide 38: Business Overview
STRICTLY PRIVATE & CONFIDENTIAL Business Overview Well-connected major multipurpose port in the Yellow Delta River Sime Darby Logistics is the primary operator of Weifang Port, of which operations cover dry bulk, break bulk, liquid bulk, general cargo and container handling services. The Divisio
Slide 39: Key Financial and Operational Highlights
STRICTLY PRIVATE & CONFIDENTIAL Key Financial and Operational Highlights Revenue (RM million) PBIT (RM million) 341 Lower Jining Port tariffs as a 103 result of intense competition & 303 - 294 294 283 tighter environmental controls 66 28 by Jining authority 250 77 74 44 53 60 19 70 - 64 - 12 2 37 6
Slide 40: Logistics results weighted down by impairment
STRICTLY PRIVATE & CONFIDENTIAL Sime Darby Logistics Logistics results weighted down by impairment -17.0% 341 -97.3% Ports 74 283 • Weaker performance due to lower throughput at ports • Weifang Port Services share of loss of RM119m Water 2 • Recorded 3 months contribution prior to disposal Revenue J
Slide 41: Healthcare Division
STRICTLY PRIVATE & CONFIDENTIAL Healthcare Division 40
Slide 42: Ramsay Sime Darby Health Care
STRICTLY PRIVATE & CONFIDENTIAL Ramsay Sime Darby Health Care Premium hospitals in Malaysia and Indonesia ranging from primary to quaternary care Ara Damansara Medical Subang Jaya Medical Centre Park City Medical Centre Joint Venture with Ramsay Centre Opening date: 1985 Opening date: 2012 Ope
Slide 43: Ramsay Sime Darby Health Care
STRICTLY PRIVATE & CONFIDENTIAL Ramsay Sime Darby Health Care Significant earnings growth since inception of JV; strong growth in Asia expected to continue RSDH Financials SDB Share of RSDH JV -14.0% 57 962 49 847 881 800 719 657 Healthcare PBIT FY2014 FY2015 FY2016 FY2017 FY2018 FY2019 Jun-18 Jun-1
Slide 44: Others
STRICTLY PRIVATE & CONFIDENTIAL Others 43
Slide 45: Malaysia Vision Valley Land
STRICTLY PRIVATE & CONFIDENTIAL Malaysia Vision Valley Land ~8,800 acres of land – Option to sell to SD Property Highlights of MVV Option to sell ~8,800 acres MVV is a large scale project announced by the Malaysian Prime Minister during his 2016 Budget speech, and is a component of the Government's
Slide 46: Appendices
STRICTLY PRIVATE & CONFIDENTIAL Appendices 45
Slide 47: FY2019 Balance Sheet
STRICTLY PRIVATE & CONFIDENTIAL Sime Darby Berhad FY2019 Balance Sheet As at 30 June Corporate/ Industrial Motors Logistics Healthcare Others Total 2019 Elimination Segment 10,909 9,691 2,253 784 276 894 24,807 assets Segment (3,283) (3,456) (264) - (361) (14) (7,378) liabilities Segment invested 7,
Slide 48: Thank You
Thank You 47
Sime Darby Berhad — Citibank Malaysia Investor Symposium 2019 on 6ix