2020 UEM Edgenta Annual Report

• The pandemic and resulting response (i.e. MCO) were challenging for the Malaysian infrastructure industry due to the deferment of higher-value infrastructure projects • The operational nature of our business (which tends to be deprioritised as a strategic business imperative by clients/potential clients in price sensitive industries). Service commoditisation leads to competitive price • Margin compression in the market continues to pose challenges to growing our revenue stream and maintaining a healthy order book Our continuing challenges are: • Focusing on cost stewardship and service efficiency improvement to protect margins and improve cash flow • Increase in operating costs to implement COVID-19 precautionary and safety measures • Manual and labour-intensive aspects of operations • Inculcating a safety-first mindset and continuous monitoring of our work environment to ensure compliance with HSSE standards Context Context • Continued organic and inorganic growth through: - Expansion and enlarging addressable market to diversify revenue streams through the Pan-Malaysia Strategy, regional expansion and new industry - Developing technology solutions to enhance service delivery in healthcare and infrastructure sector - Productisation and scalability of existing sector technology solutions - New digital solutions such as digital healthcare • Continued focus on cost rationalisation initiatives and prudent cash flow management • Sustaining the concession business, maintaining pipeline and growing market shares • Cross-selling, expanding client base and new delivery model via performance-based contracting Preserve operational excellence amid adaption to the new normal: • Manage cost and preserve margins by keeping fundamentals strong • Deliver value through technology via automation & mechanisation, data analytics, artificial intelligence and IoT as foundations of our technology enabled platforms We maintain a safe and healthy work environment to protect our people, business partners and other stakeholders including healthcare front liners: • Contribute to national efforts to combat COVID-19 via donation of patient monitoring systems and ventilator machines to MoH Malaysia and a cloud-based healthcare information system • Continuously promote our ‘Goal Zero’ aspiration in line with the theme ‘Comply with Quality’ • Drive innovation via the introduction of new technologies Mitigation Mitigation MARKET/INDUSTRY (STRATEGY) RISK OPERATIONAL RISK Industry/Strategic risk refers to the potential exposure to a changing market landscape which could affect an organisation’s business strategy or model. This risk could result in the potential loss of market share and growth, shareholders’ value or even reputational damage. Operational risk relates to the risk of losses resulting from uncertainties and hazards a company faces when it attempts to do its day-to-day business within the industry. Risk Description Risk Description Capitals Impacted Transformation Pillars Transformation Pillars Capitals Impacted ANNUAL REPORT 2020 61 1 2 3 4 5 6 7 8