56 YINSON HOLDINGS BERHAD STRATEGY & OUTLOOK STRATEGY REVIEW STRENGTHENING YINSON’S UNIQUE RIGHTS TO WIN Since the company was founded, the Group has demonstrated unique abilities that we believe will allow us to thrive in the face of the changing global landscape. These are what I like to call our unique ‘rights to win’, depicted in the following infographic. Entrepreneurial capabilities Yinson’s ability and success to build businesses and pivot to new segments over the years from a local transportation business to diversified businesses in offshore production, renewables, green technologies and offshore marine Project management excellence Yinson’s project management team works on a lean structure that enables us to address problems and make decisions quickly Operational excellence Yinson is recognised for its technical and operational performance in offshore production, with an excellent track record in delivering projects on time and on budget Strategic risk management approach Yinson’s willingness to make bold investment decisions in innovations and businesses that we believe in, balanced by a healthy consideration for the risks involved Building new businesses to embrace change and disruption has proven to be one of Yinson’s unique rights to win. The differing risk-return profiles of our latest ventures, renewables and green technologies, as compared to the offshore production business, is an example of our willingness to make bold investment decisions in businesses that we believe in. Our green technologies ventures will require considerable amount of capital and time to blossom. Data has shown that it takes a median of 6 years for start-ups to reach a USD1.0 billion valuation. In this context, our green technologies division is still in its early phase of growth. We aim to establish a valuable and impactful business ecosystem, for all stakeholders alike. This is a journey and I expect we will be welcoming many like-minded partners along the way to build a fully integrated, end-to-end ecosystem that is profitable and based on clean technologies and digitalisation. A key message from COP26 that took place in November 2021 was the crucial role the private financing industry has to play in the transition journey. Further, as policymakers become more vocal on ESG, financial institutions can no longer afford to ignore ESG to remain ahead of public and regulatory expectations. Banks and lenders are taking steps to execute a strong and integrated sustainable finance strategy by making necessary adjustments to their risk-return framework. Given the growing focus on ESG, it may seem risky to raise further funds for our offshore production business. However, I believe we are in a strong position, strategically. When assessing investments into the oil & gas industry, many financial partners prioritise a company with an energy transition story and a concrete energy transition plan to meet both of their financing strategies in supporting short term energy security whilst promoting the shift to cleaner energy. As elaborated earlier and by my colleagues, I believe that Yinson fits well in both narratives, hence is in a great position for further capital raising and to explore new opportunities in SLF. On 1 March 2022, a strategic review for the Offshore Production business was announced, conveying our intention to tap into international capital markets by exploring an initial public offering (IPO) or strategic partnership opportunities. As elaborated by my colleague Flemming in the Business Review for Offshore Production, we believe that the next 5 to 8 years will provide unparalleled growth opportunities for the FPSO industry, due to high demand for FPSOs and a shrinking pool of contractors who can deliver them. Business Review - Offshore Production, pg 98 If we continue business-as-usual, I have full confidence that we will still receive stable income run from our FPSO projects for the next few decades, and in line with that, continue growing our green technologies and renewables divisions steadily. There is nothing wrong with this picture, as we will still be a profitable business for many years to come, delivering value to our stakeholders. However, we believe that taking bold action to perform a strategic review for Yinson Production shows that we are never complacent on our past successes. We aim to unlock greater value in the division, providing even larger pockets of capital to fuel the Group’s overall growth at a scale that far surpasses the YINSON’S UNIQUE RIGHTS TO WIN
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