2020 UEM Edgenta Annual Report

OUR KEY STRATEGIES TO STRENGTHEN THE CORE In 2020, in response to the significant shift in our operating landscape brought about by the pandemic, we reviewed and refreshed our Edgenta of the Future vision. This vision represents a departure from our traditional concession-based business model into one which is focused on commercial contracts, technology differentiation and regional diversification. Throughout our transformation plan, we will drive efficiency from our core businesses, while pivoting the company into a scalable technology-based solutions company by the year 2025. ‘A Technology-Enabled Solutions Company with a Focus on Healthcare’ by 2025. We have identified three key pillars of our transformation strategy towards achieving our Edgenta of the Future vision Release inefficiencies and cashflows to fund the journey • RM100 million of cost savings over 5 years • Mechanisation & automation, optimise procurement spend and streamline business structure Products and solutions oriented towards achieving optimised outcomes • Optimising service availability • Superior user experience Differentiated and diversified income streams • Accelerating digital adoption • Diversify into new growth markets WE PREPARE FOR TOMORROW’S CHALLENGES, TODAY • We know howwe contribute to Edgenta’s goals • We plan our work to anticipate future challenges • We prioritise the sustainability of Edgenta whenmaking decisions WE IMAGINE NEWWAYS TODELIVER BETTERWORK • We provide ideas to improve processes in the way that we work • We have the courage to try new ideas • We support new ideas and experiment with our colleagues WE TREAT OUR COLLEAGUES & STAKEHOLDERSWITH RESPECT • We respect and value diverse backgrounds & ideas • We act professionally at all times • We stand up for our colleagues if they are treated in a disrespectful manner WE SOLVE CHALLENGES TODELIVER RESULTS • We nd ways to solve problems, no matter how challenging • We weigh the pros and cons of solutions that we are proposing before providing recommendations WE ARE GUIDED BY INTEGRITY TO BUILD TRUST • We keep our promises, always • We complete our work on time and responsibly • We comply with the organisation’s code of conduct, procedures and guidelines They are further supported by our FIRST core values: THE FUNDAMENTAL SHIFT: OUR BUSINESS MODEL The unprecedented challenges brought on by the pandemic has prompted the necessity to pivot to a more sustainable model that will enable the Group to capitalise on potential growth opportunities in key target markets. Our shift towards a commercially driven business model under EoTF25 will allow us to strengthen our order book by pursuing a diversified range of higher value commercial contracts. The transformation enables us to operate under a leaner operating structure with agility in managing various circumstances in our markets in future. Further, adoption of technology and mechanisation in all aspects of our business will be our key differentiator in industries we operate in. Under the refreshed strategy, we will focus on pursuing output-based contracts in high growth industries and markets to effectively provide us with greater top line growth and margin expansion across a larger diversified footprint. EXTRACT MORE VALUE FROM CORE BUSINESSES ENHANCE PRODUCT AND TECHNOLOGY PROPOSITION EXPAND OUR FOOTPRINT AND DEEPEN SOLUTIONS BASE OUR EDGENTA OF THE FUTURE 2025 GOALS Create sustainable shareholder value Pivot to a business model with a strong focus on commercial work (vis-à-vis concession work) to ensure growth and sustainability of future dividends. Improve profitability across all businesses Enable businesses to operate under an agile and lean operating model through rapid digitalisation and cost efficiency initiatives. Digitalisation and disrupting our industries Accelerate transformation journey through digitalisation and disrupt existing old economy industries where we operate in. UEM EDGENTA BERHAD 70 Management Discussion & Analysis EDGENTA OF THE FUTURE 2025 A. STRATEGIC REVIEW