Corporate Presentation June 2018
Corporate Profile Incorporated in 1976 & commenced business in 1981 First listing in year 1997 & delisted in year 2004 Relisting under the construction sector of the Main Market of Bursa Malaysia on 28 th July 2015 Cumulative revenue since inception of RM25 bil Market capitalization: Around RM3.0 bil (June 2018 : 6% Foreigner; 29% Bumi and 65% Non Bumi) Top external shareholders (EPF >7%, Amanah Saham, Great Eastern, Citibank, Eastspring,CIMB) Tan Sri Dato Seri Dr Jeffrey Cheah 63.1% Other shareholders 35.54% 54.4% 10.06% Building Construction Services Revenue PATMI 100% Civil/Infrastructure Construction Services 100% 100% 100% 100% Construction Foundation and Geotechnical Engineering Services Mechanical, Electrical and Plumbing Services Precast 90% 10% 90% 10% Manufacturing and Sale of Precast Concrete Products FY 2018 2
Integrated Construction Business Model Building Construction Services Civil/Infrastructure Construction Services Foundation and Geotechnical Engineering Services Mechanical, Electrical and Plumbing Services Manufacturing and Sale of Precast Concrete Products Design and construction service provider in the residential, commercial, institutional and specialty projects International portfolio includes several large building construction services projects in Singapore, UAE and Trinidad and Tobago Special Purpose Building Projects include Kuala Lumpur Convention Centre, Pinewood Studio, Sunway Medical Centre, Monash University Campus Malaysia; Sunway Shopping Mall Major provider of civil/infrastructure construction services and have participated in various roads, highways, airports, bridges and rail transportation infrastructure projects over the last 30 years Local Projects include Ipoh Airport, SILK, Maju Expressway, SKVE and special rail transportation infrastructure like MRT, LRT and BRT Overseas Projects include 7 highways and bridges in India Core services include piling solutions and earth retaining systems Services cover all types of buildings such as residential, commercial, institutional, purposebuilt or specialty buildings, and civil/infrastructure construction projects. Main services are categorised into mechanical, electrical, plumbing and specialised engineering solutions Services offered to both internal and external clients as part of integrated services and on stand alone basis Develops, designs, manufactures and supplies precast concrete products with manufacturing plants located in Iskandar and Senai, Johor, Malaysia Precast concrete products manufactured, include Industrialised Building System ( IBS ) components, for residential, commercial and infrastructure development projects. 3
Proven Track Record Trading Information:- IPO (July 2015) 29.12.17 30.6.18 Price (RM) 1.20 2.51 1.81 Market Capitalisation 1.55b >3.0 b 2.34b 28 July 2015 Pre Listing Post Listing 4 2011 2012 2013 2014 2015 2016 2017 152 141 154 174 98 82 90 125 127 124 138 71 55 67 2011 to 2014 figures as per prospectus and circular PATMI PBT 4
Strong Financial Performance 2013 2014 2015 2016 2017 Mar-18 Jun-18 Audited* Audited* Audited Audited Audited Unaudited Unaudited RM mil RM mil RM mil RM mil RM mil RM mil RM mil Revenue 1,839.6 1,880.7 1,916.9 1,788.8 2,076.3 529.2 544.3 EBITDA 130.6 192.2 178.2 188.3 202.4 52.4 52.3 PBT 89.8 152.3 140.8 153.7 174.2 43.7 45.2 PBT % 4.9% 8.1% 7.3% 8.6% 8.4% 8.3% 8.3% PBT % - Con 2.5% 3.2% 3.8% 6.4% 7.6% 8.1% 8.4% PBT % - Precast 21.6% 39.1% 30.4% 20.3% 19.0% 9.7% 6.7% PATMI 66.9 124.8 127.2 123.5 137.8 35.9 35.9 ROE (%) 11.0% 16% 31% 26% 26% 25% 25% Management s commitment is 35% of full year PATMI Dividend for 2015 : 4 cents or > 40% of full year PATMI Dividend for 2016 : 5 cents or > 50% of full year PATMI Dividend for 2017: 7 cents or > 66% of full year PATMI First interim dividend for 2018 : 3.5 cents or > 60% of 1H PATMI 5
Sound Balance Sheet Shareholders Fund 2013 2014 2015 2016 2017 Mar-18 Jun-18 Audited* Audited* Audited Audited Audited Unaudited Unaudited RM mil RM mil RM mil RM mil RM mil RM mil RM mil 609.7 328.3 451.7 493.8 554.8 584.3 569.4 Total assets 1,441.9 1,272.2 1,397.4 1,597.2 1,885.9 1,754.4 1,905.8 Bank borrowings Cash + Placement Net Gearing Ratio(times)** 90.5 135.2 136.8 136.5 134.7 45.6 117.6 156.1 291.6 468.5 465.8 487.2 502.3 574.8 N/A N/A N/A N/A N/A N/A N/A Note : To be read in conjunction with our Combined Audited Accounts. *As per prospectus **Net Gearing Ratio = Net debt / Shareholders Funds 6
Investment highlights 1 Fully Integrated Construction Company 2 Solid Order Book of Diversified Projects Across the Construction Sub-Sector 6 3 Highly Experienced Senior Management Proven Track Record on the Local & International Stage 5 Continuing Support from Sunway Group 4 Strong Brand Heritage 7
1 Fully Integrated Construction Company A Turnkey Contractor with a Full Range of Integrated Services & Products Mechanical, Electrical Building Civil/Infrastructure Geotechnics Precast Concrete & Plumbing Design & Build of commercial buildings, convention centre, theme park and hotel Best Practices Across Our Business Division Quality Control Consolidating Management Functions CENTRES OF EXCELLENCE Rationalizing Functions Maximise Economies of Scale Maximizing Cost Savings and Improved Operating Efficiencies = Enhanced Profitability Construction of Infrastructure projects such as highways, LRT, BRT, MRT, airports, runways and bridges Range of Services Supported by Centres of Excellence, Technology & Large Asset Base V D C Operational Efficiency Through Virtual Design and Construction ( VDC ) since 2010 3 D 4 D 5 D 6 D Geotechnical and foundation specialist with deep and big diameter bored piles Comprehensive Parametric Model Faster Construction Process Construction Scheduling Solving Workflow Conflicts Cost Scenario Analysis Consolidating Procurement As-Built Model Project Life-cycle Management TIME INTEGRATED 3D MODELS OPTIMISE PROJECT RESOURCES Fast Delivery + Cost Effective Procurement + Reduce Project Risks Design and management, electrical, mechanical, IT and engineering services GREATER FACILITIES MANAGEMENT One of the Largest Construction Operations in Malaysia @ June 2018 31 Boring Rigs 21 Tower Cranes 14 Crawler Cranes 17 Mobile Cranes Manufacturing of precast concrete products 27 Excavators 7 Skylift 5 Launching Girders 2 Precast Concrete Plants 5 Passenger Hoist 64,000 M 2 System Formworks Large Asset Base Allows Us to Maximize Economies of Scale Well Positioned to Bid for and Undertake Large and Complex Projects Both Domestically & Internationally to Diversify Risk and Ensure Sustainable Development 8
2 Solid Order Book of Diversified Projects As at June 2018 (RM mil) Completion Contract Sum O/S Orderbook Building 1,087 Putrajaya Parcel F 1Q 2019 1,610 421 KLCC 3Q 2018 646 43 HUKM 2Q 2019 66 26 ISKL 4Q 2018 268 36 GDC (Plant 1) 4Q 2018 152 50 PPA1M Kota Bharu 1Q 2020 582 420 Nippon Express 4Q 2019 70 68 M&E works 4Q 2018 10 10 Velocity Ecodeck 4Q 2018 11 11 Infrastructure/Piling 2,787 MRT V201 + S201 2Q 2021 1,213 587 MRT V201 - Advance Works 3Q 2018 53 7 SUKE + DASH (Bore Piling) 3Q 2018 34 11 BBCC 4Q 2018 88 42 LRT 3 : Package GS07-08 2Q 2021 2,178 2,067 Piling works 3Q 2018 75 74 Internal 1,729 Velocity Medical Centre 1Q 2019 185 95 SMC 4 2Q 2019 512 456 Emerald Residences 4Q 2018 175 12 Big Box - Iskandar 4Q 2017 170 130 Sunway Serene 4Q 2020 449 357 Sunway GEOLake 1Q 2021 223 210 Carnival Mall Ext 4Q 2020 286 277 SMC Seberang Jaya 4Q 2020 180 180 Others Various 13 12 Singapore 183 Precast Various 330 128 Precast - New order 2018 Various 55 55 Grand Total 9,633 5,786 Red : Secured in 2018 By Country Singapore Malaysia 49% 97% 3% 3% By Business Division Order Book Segmentation (YTD 2018) 48% 37% Civil Building Precast By Customer Public Private Sunway Group 29% 14% 89% 57% Design & Built vs Conventional D&B Conventional 11% Healthy Order Book with a Diversified Portfolio of Projects 9
3 Proven Track Record on the Local & International Stage Whilst Building Long Lasting Relationships Successfully Secured & Executed Major Projects both Domestically & Internationally.. Putrajaya Holdings Relationship >10 years 9 Major Projects Value >RM3.0 bil Kuala Lumpur Convention Centre Completed: 2005 Value: RM549mil HDB Bukit Merah Completed: 2016 Value: SGD31mil LRT Package B Completed : 2015 Value: RM569mil Klang Valley MRT Package V4 Completed : 2016 Value: RM1,172mil Relationship >20 years 17 Major Projects Value of Major Projects of more than RM3.0 bil KLCC Group of Companies Relationship >10 years 5 Major Projects Value >RM1.3 bil Trinidad and Tobago UAE India Malaysia Singapore IDR Asset Syarikat Prasarana Negara Relationship >4 years >2 Major Projects Value >RM300 mil Relationship >3 years 4 Major Projects Value of >RM3 bil Iskandar Malaysia Studios Relationship >3 years 1 Major Project Value >RM300 mil Phase 1A, Rihan Heights, UAE Completed: 2010 Value: US$510 mil East-West Corridor Uttar Pradesh, India Completed: 2008 Value: US$67 mil Ministry of Legal Affairs Completed: 2007 Value: US$58 mil Phase 1, Plot 1 Al-Reem Island Completed: 2009 Value: US$362 mil MMC Gamuda Relationship >5 years 3 Major Project Value >RM2.6 bil Established Ourselves as a Reputable Construction Player with Both the Private & Public Sector 10
4 Strong Brand Heritage Proven Capabilities Excellent Reputation Proven Operating Success Heritage of Over 30 years Leverage on the Sunway Brand We are amongst the 56 listed companies under the FTSE4Good Which Led to an Established Multi-Award Winning Brand Past notable winning Builders of the Year Award (2003, 2005 and 2013) 5-Star ratings in CIDB s SCORE Programme 2015 (Sunway Construction Sdn Bhd & Sunway Engineering Sdn Bhd SG50 Prestige Award 2015 (Sunway Concrete Products) The Malaysian Construction Industry Excellence Award 2012 (International Achievement Award) 2018 25 Jan 2018: ACCA Malaysia Sustainability Reporting Awards (MaSRA) 2017 Commendation Award Knowledge Management June 2018 : FTSE4Good reconfirm our inclusion for another year (score 3.2 and in the 82 percentile rank) 18 July 2018 : 5 star under CIDB SCORE assessment 2017 6 Dec 2017 : MSWG-ASEAN Corporate Governance Recognition 2017 Industry Excellence Award (Property and Construction) 23 Nov 2017 : National Annual Corporate Report Awards (NACRA) 2017 Certificate of Merit 24 Aug 2017 : MSOSH OSH Awards 2016. 5 Gold and 1 Silver award 8 Aug 2017 : MICG Top 100 listed companies in Transparency in Corporate Report. SunCon 4 th placing behind Petronas s 3 companies and ahead of Maybank. 16 May 2017 : MBAM Health and Safety Award. SunCon won under 2 category : Golden Helmet Award (Dato Johari) and Site Personnel Award (Teh Hang Loong) 10 Jan 2017 : ACCA Malaysia Sustainability Reporting Awards (MaSRA) 2016 24 out of 49 participants 11
5 Continuing Support from Sunway Group Sunway Group Strategic Relationship Major property developer in Malaysia with revenue at 2016: RM1.2b from its property divisions Total gross development value of remaining landbank (3,305 acres) Johor 56%, Klang Valley 30%, Penang 6% RM53 bil (15 years) 2018 Launch Target RM2.0b (plus RM610m PI projects) (2017 : RM1.1b, 2016 : RM0.65b, 2015 : RM1.4 bil) Sales target 2018 RM1.3b (2017 : RM1.1b; 2016 : RM1.2b, 2015 : RM1.2b) At least 51% stake in Suncon Group post IPO Bed rock orders even during a decline in the construction sector Competitive advantage in property development design optimization, assurance on quality & timeliness Portfolio of diversified services across the construction sub-sector Our Key Developments with Sunway Group Sunway Group s Continued Support Revenue contribution Others Sunway Group Sunway Pyramid Ongoing Projects Sunway Carnival Mall Sunway Medical Centre Sunway Lagoon 38% 39% 40% 62% 61% 60% 26% 74% FYE2014 FYE2015 FYE2016 FYE 2017 Sunway Geo Suites Sunway Serene, Kelana Jaya Sunway Velocity Hospital Emerald Residence June 2018 successfully secured RM677 mil worth of orders from Sunway Group 2017 : reduced reliance on in-house jobs Symbiotic Relationship with Sunway Group Provides Stability During Periods of Downturn 12
6 Highly Experienced Senior Management Chung Soo Kiong Proven Capabilities Designation :Managing Director Datuk Kwan Foh Kwai Which Led to an Established Multi-Award Winning Brand Designation : Advisor Liew Kok Wing Designation :Deputy Managing Director Years in : 20 years Suncon Group Years in : > 20 years Suncon Group Years in : 20 years Suncon Group Construction Industry Experience : Over 20 years Construction Industry Experience : 40 years Construction Industry Experience : Over 20 years Evan Cheah Ng Bee Lien Thomas Samuel Designation :Non-Independent Non-Executive Director Years in : 15 years Suncon Group Construction Industry Experience : Over 15 years Designation :Chief Financial Officer Years in : 12 years Suncon Group Construction Industry Experience : 20 years Designation :Executive Director Sw.Geotechnics Years in : Since 2015 Suncon Group Construction Industry Experience : Over 33 years Richard Wong Kwong Tzyy En Eric Tan Chee Hin Designation :Executive Director Building Division Years in : 17 years Suncon Group Designation :Executive Director Precast Division Years in : 15 years Suncon Group Designation Years in Suncon Group :Senior GM MEP Division : 16 years Construction Industry Experience : Over 28 years Construction Industry Experience : Over 20 years Construction Industry Experience : Over 19 years Extensive Industry Expertise and Strong Execution Capability with an Average of Over 23 Years of Experience in the Construction Industry 13
Key Takeaways Fully integrated Construction Company Integrated business model providing end-to-end design and construction solutions VDC enabled Well supported by investment in capex and assets previously Solid Order Book Positioned for Growth Continuing Support from Sunway Group Financial Strong order book & tender book with diversified construction capabilities across various sub segments of the construction sector Proven Track Record in the Local & International Stage History of repeat order from reputable clients with high credit worthiness The largest pure play listed construction company in Malaysia Top 3 construction group by turnover and profit Overseas venture to Myanmar and India Construction sector growth in 2017 : 6.7%; 2016 : 7.4% ; 2015 : 8.2% vs BNM forecast of 7.3% for 2018 Singapore Precast : JV with Hong Leong to tender for ICPH (will double capacity) At least 51% stake in Suncon Group post IPO Bed rock orders even during a decline in the construction sector (past years 40% revenue) Treasury support from Sunway Bhd High Return on Equity (> 25%) Sound balance sheet with net cash position 35% dividend policy (2015 : > 40%, 2016 : > 50%, 2017 : > 60%) 14
Building Construction Central PARCEL F, Precinct 1 Contract Sum Client : RM1.6 bil (34 acres, GFA = 445,170 sqm) : Putrajaya Bina Sdn Bhd Completion Year : 1Q2019 15
Building Construction Central KLCC Car Park 6 level of basement 646m (2Q 2018) ISKL 268m (95,000M 2 ), 3Q 2018 Green Building Index Platinum Rated Building The scope of work includes the proposed construction of 5 teaching facilities for Early Years, Elementary, Middle and High school students, a main building which has a theatre, libraries, gym, kitchen & dining, a performance art centre and sport facilities which includes a fitness centre, swimming pool, track, tennis and basketball court amongst others to create the most advanced learning environment accommodating a max capacity of 2,500 students. 16
Building Construction Southern Citrine mixed development 213m (1Q 2017) Afiniti Medini mixed development 283m (2016) Pinewood Iskandar Studio 309m (2013) Legoland Theme Park + Water Theme Park, 303m (2012 / 2013) 17
Building Construction In House Sunway Velocity Ph2 Mall 350m (2016) Sunway Geo Retails Shops & Flexi Suites Phase 1&2 397m (1Q 2018) 20 Sunway Medical 3 & 4 595m (4Q 2018) 18
Overseas Projects Al-Reem Island Abu Dhabi AED1.33b (2009) Rihan Heights project Abu Dhabi AED1.88b (2010) Ministry of Legal Affairs Tower Trinidad and Tobago TT368m (2010) RJ9 Kalisindh Bridge the longest bridge in the state of Rajasthan INR 2,866,500,000(2008) 19
Mechanical, Electrical and Plumbing Distribution Pipe, Bio-Xcell 75m (2014) Gas District Cooling Plant (Putrajaya) 49m (2011 / 2015 / 2018) MRT Pasar Seni Station 32m (2017) 20
Civil/Infrastructure Construction LRT 3 (GS0708) : RM2.18b : 9.2km (Kaw 17 to Taman Sri Andalas) Secured on 6 Oct 2017 MRT 2 : V201 (4.9km) + VO (0.7km) : RM1.27b Duration : 60 months (completion May 2021) Job Scope : Construction and Completion of Viaduct Guideway from Sungai Buloh to Persiaran Dagang and Advance Work Construction of Viaduct Guideway between Kampung Muhibbah to Serdang Raya. Works involves 3 nos station, 142 nos piers, 180 km telco fibre optic relocation, 21.5 km underground HT cables relocation, 5.4 km water pipe relocation and 701 nos bored piles Job Scope : 9.2km of viaduct works 6 stations works 1 iconic bridge over Klang River (Design & Build) 2 Park & Ride at Pasar Besar Klang and Sri Andalas 1 Centralised Labour Quarter at Johan Setia 21
Precast Concrete Products Household shelters Iskandar Precast Plant Prefabricated toilet Precast water tank Precast wall/column Refuse chute Facade Lift well and lift cover Precast beam / column 22
Precast installation in M3 Iskandar 23
Precast Capacity & Cost Component Plant Senai Plant (own) Oct 2012 Iskandar Plant (rented) 5 years Pioneer Status Area (sq. ft.) Built up area : 262,231 Land area : 475,409 Land area : 9 hectares Max Annual Capacity (m 3 ) Utilisation rate YTD Q2 2018 (%) Utilisation rate 2017 (%) No. of lines 75,000 70% 53% 6+3 (half) lines 81,600 35% 45% 9 lines HDB BTO Launch 2018 = 17,000 nos (2017 : 17.593; 2016 17,891; 2015 : 15,100 ; 2014 : 22,455) Capacity building ICPH (Integrated Construction Precast Hub) in Pulau Punggol Barat costing SGD80m during the 3 years construction period for a 30 years lease for a fully automated robotic precast plant (Tender won on 27 July 2018) Opportunities HDB will implement prefabricated bathroom units (PBU) for all Singapore new flats by 2019. 24
Precast Opportunities in Singapore 25
Precast Opportunities in Singapore 26
Potential Key Risk Potential Risk Potential Impact Controls to Mitigate Risk Fluctuation of material price steel rebar Foreign workers levy Foreign currency fluctuation Steel bar price Dec 2017: RM 2,583/mt Jun 2018: RM 2,406/mt RM 1,850p.a. for 600 direct workers. Cost impact: RM1.1mil Importation of special lightings, furnishing & façade components Bulk locked-in steel rebar in advanced at lower prices or when price is favorable. Forward-looking steel rebar requirement (approximately 6 months in advanced). Manage foreign workers efficiently as the cost on existing direct workers (600pax) are fixed. Levy cost will be factored in in new tender. FOREX hedging in advance once design and bill of quantity is confirmed. FOREX rates are fixed upfront at the contractual level. 2,800.00 2,600.00 2,400.00 2,200.00 MONTHLY AVERAGE (RM/MT) 2,269 2,224 2,130 2,425 2,603 2,348 2,677 2,631 2,627 2,543 2,583 2,412 2,406 2,000.00 1,800.00 1,991 1,600.00 1,447 1,400.00 JAN 14 FEB 14 MAR 14 APR 14 MAY 14 JUNE 14 JULY 14 AUG 14 SEPT 14 OCT 14 NOV 14 DEC 14 JAN 15 FEB 15 MAR 15 APRIL 15 MAY 15 JUNE 15 JULY 15 AUG 15 SEPT 15 OCT 15 NOV 15 DEC 15 JAN 16 FEB 16 MAR 16 APRIL 16 MAY 16 JUNE 16 JULY 16 AUG 16 SEPT 16 OCT 16 NOV 16 DEC 16 JAN 17 FEB 17 MAR 17 APRIL 17 MAY 17 JUNE 17 JULY 17 AUG 17 SEPT 17 OCT 17 NOV 17 DEC 17 JAN 18 FEB 18 MAR 18 APRIL 18 MAY 18 JUNE 18 27
New Order Book 2018 Secured YTD Projects (2018 new awards) Client Duration Sunway Medical Centre Seberang Jaya SMCSJ - Phase 1 Sunway Carnival 2 Extension, Seberang Perai, Penang - PDP contract Sunway GEOLake 44 storey residential tower at Sunway South Quay. 44 storey/420 units with 44 units of 3 storey townhouse including facility floor and 3 basement carpark Alliance Parade Sdn Bhd Sunway REITS Mgmt Sdn Bhd Sunway South Quay Sdn Bhd Contract Sum (RM'mil) 31 months 180 32 months 286 36 months 223 Others - Inhouse Sunway Group of Co 12 months 35 Precast Various 55 Piling works Various 75 Grand Total 854 Target NEW order book for FYE 2018 : RM 1.5b to RM 2.0b New order 2017 : 4.0b, 2016 : 2.7b, 2015 : 2.6b, 2014 : 0.8b, 2013 : 2.9b, 2012 : 1.9b Outstanding Order book 2017 : 6.1b, 2016 : 4.8b, 2015 : 3.8b, 2014 : 3.0b, 2013 : 3.2b, 2012 : 4.1b 28
Thank You ISKL Project Progress @ September 2017 This presentation may contain certain forward looking statements due to a number of risks, uncertainties and assumptions. Representative examples of these factors include (without limitation) general industry and economic conditions; interest rate trends; cost of capital and capital availability including availability of financing in the amounts and the terms necessary to support future business; competition from other companies, changes in operating expenses including employee wages, benefits, government and public policy changes. You are cautioned not to place undue reliance on these forward looking statements which are based on Management's current view of future events. Past performance is not necessarily indicative of its future performance