2020 UEM Edgenta Annual Report

OUTLOOK The pandemic has accelerated the need for us to take a more critical review of our business models, internal operations and financial management to ensure optimal efficiencies. This will allow us to re-emerge stronger and be better prepared to benefit from the economic rebound post-pandemic situation, as we operate in the ‘New Normal’. In the New Normal, new economies will emerge and the needs of our customers and potential customers will change. Our customers will likely have budget constraints, therefore, we will partner with them to strengthen their capability and operational efficiency by introducing high-tech and digitalisation element in our asset management and infrastructure solutions services. Healthcare Support division will continue to focus on operationalising and optimising new contracts secured. At the same time, we also aim to accelerate adjacent revenue streams beyond our traditional hospital support service offerings with the development of our digital healthcare solutions. We will continue to expand our stronghold niche offerings such as BEMS and FEMS in Singapore. From geographical expansion perspective, we also aim to replicate our successes in Singapore and Taiwan to other new growth markets such as Indonesia and the Gulf Cooperation Council (“GCC”) states. For Property & Facility Solutions division, we are looking to expand into high-value commercial IFM contracts for industrial- based buildings, technology based solutioning and continue to scale up our Energy Performance Contracts to champion the industry in the green/sustainability and industrial space. Building from our strong foothold in Dubai, GCC also will be one of the key geographical target markets in the near future. Infrastructure Services division will focus on long-term growth opportunities in East Malaysia, Indonesia and Southeast Asia while continuing to enhance operational efficiencies through the use of digitalisation solutions to preserve profit margins in delivering our existing large book order. We believe the Pan Borneo expansion strategy will resume in the near future, providing huge opportunities for the Asset Consultancy division to pursue actively. In order to improve margins and profitability, we seek to enhance efficiencies through process improvement and operational excellence initiatives, including Innovation Garage and LEAN programmes. We will also implement tighter cost controls and leverage on technology to enable efficiencies. Among others, we have launched Strategic Procurement Initiatives to drive cost optimisation in both Demand and Supply Management; detailed cost modeling and strategic sourcing are some of the key initiatives planned for FY2021. Our Digital Transformation journey, which was started with the migration of three core support functions systems (Finance, Human Capital and Procurement) onto the Oracle ERP Cloud, provides the core enabler platform for us to achieve operational excellence for our business support functions. The Oracle ERP allows for streamlining of financial information and processes across our companies, helps to optimise procurement process and promotes better governance and transparency. Moving forward, this will help to drive decision making based on data analytics and enhance speed to market for all our business divisions. Our key focus will be on prudent cash and liquidity management to optimise our business in these challenging times, we will continue to invest cautiously in area of adjacent new businesses, digitalisation of our solutions and new geographical markets. Given our strong financial position, we strive to continue to deliver shareholders’ value, while still maintain a dividend payout ratio of between 50% to 80% for subsequent years. Ultimately, healthy revenue growth, continuous improvement in operational efficiencies and better cashflow management will set us up to realise our Edgenta of the Future vision by year 2025. HILLARY CHUA PEI SUM Chief Financial Officer HEALTHY REVENUE GROWTH, CONTINUOUS IMPROVEMENT IN OPERATIONAL EFF ICIENCIES AND BETTER CASHFLOW MANAGEMENT WI LL SET US UP TO REAL ISE OUR EDGENTA OF THE FUTURE VISION BY YEAR 2025. ANNUAL REPORT 2020 47 1 2 3 4 5 6 7 8