TNB Q3 report card

TNB Q3
2021
PERFORMANCE REPORT CARD
• GroupPerformanceOverview • DeliveringRTValueLevers
• Delivering RT Enablers
• TNB Sustainability Pathway


1 GROUPPERFORMANCEHIGHLIGHTS
TNB recorded commendable financial achievement ending Q3 FY2021 despite challenging economic condition
FINANCIAL
TNB EBIT
REVENUE
PAT
RM6.51bn
RM36.89bn
RM2.87bn
Q3 FY2021 Target RM2.33bn
FY2021 Target RM3.11bn FY2021 Forecast RM4.04bn
WINNING THE CUSTOMER
Q3 FY2021 Target RM6.14bn
FY2021 Target RM8.18bn - 9.30bn FY2021 Forecast RM8.53bn
FUTURE GENERATION SOURCES
Q3 FY2021 Target RM36.41bn
Q3 FY2020 Actual RM33.65bn FY2021 Forecast RM4.04bn
GRID OF THE FUTURE
GENCO
RM2.08bn
FY2021 Target RM2.03bn - RM2.18bn FY2021Forecast RM2.46bn
IAG*
RM-0.32bn
FY2021 Target RM2.03bn - RM2.18bn FY2021Forecast RM-211.7mn
GRID
RM2.02bn
FY2021 Target RM2.50bn – RM2.58bn FY2021Forecast RM2.56bn
DISTRIBUTION
RM2.54bn
FY2021 Target RM2.79bn – RM3.19bn FY2021Forecast RM3.11bn
kWh
RM-0.1bn
FY2021 Target RM0.39bn FY2021Forecast RM0.20bn
Beyond kWh
RM-4.2mn
FY2021 Target: RM7.4mn FY2021Forecast: RM-1.98mn
*IAG (International Asset Group) accountability will be enhanced with the formation of New Energy Division (NED) effective 8th November 2021
CUSTOMER TNB continues delivering exceptional customer experience
Customer Service Index
Retail Division continue delivering excellent customer service in quest to maintain top quartile CSI index score
Note: FY2021 CSI result will be ready in December 2021
Customer Experience Index
CEI 94%
Social Media Sentiment
Target FY2021 90% 33% Forecast FY2021 > 90%
Negative Social Media Sentiment (%) Q2
Significant reduction of negative social media sentiment in Q3 mainly attributed by sharing of PEMULIH discount by Jabatan Penerangan and netizens
OPERATIONAL TNB technical indicators continue at world class performance
!"
Domestic Generation
GenCo’s Generation market-share at 52.7% with contracted capacity of 14.0GW out of total 26.7 GW
The 14.0GW of GenCo’s contracted capacity in Peninsular Malaysia are contributed by 15 power plants
International Generation
Q3
6%
TNB International Asset Group (IAG) continues driving value creation from international 4.8GW generation asset with capacity
TENAGA WIND VENTURES UK LTD
• Equity stake: 100% • Capacity: 26.6MW
in wind
• Equity stake: 55% • Capacity: 365MW
in solar
• Equity stake: 30% • Capacity: 2,064MW in coal, gas, solar
• REprojectsdeveloped:2large 2
• Equity stake: 30%
• Capacity: 1,102MW in gas, hydro, wind. Water conveyance in Jordan.
• Equity stake: 6% effective equity stake • Capacity : 1,190MW
IWPP and water desalination of 1,039,000 m3/day.
•
Services: Investment asset management
scale solar parks (123MWp total)
5 power plant Coal-fired: 6,440 MW2
7 power plant Gas-fired: 5,062 MW2
3 hydro schemes Hydro: 2,536 MW
Grid
Distribution Network
Retail
Grid Regulatory Asset Base
Distribution Network Regulatory Asset Base
Unit sold
RM26.15bn
RM31.31bn
92.77 TWh
Length of Domestic Transmission Network
Number of distribution substations
Sales of electricity
25,413km
85,815 unit
RM37.06bn
*Peninsular Malaysia only
Equivalent Availability Factor
84.42%
FY2021 Target 86.10 % - 86.80 % FY2021 Forecast 83.60 %
ORGANISATIONAL
Key Technical Performance Indicators
System Minutes
0.09min
FY2021 Target 1.5 - 2.0 min FY2021 Forecast Below 1.0 min
SAIDI
43.17min/cust/year
FY2021 Target 55 - 50 min/cust/year FY2021 Forecast 43.17 min/cust/year
TNB organizational health is continously strengthened as lever to drive high performance
RM0.24bn
CJC staff cost saving Mainly contributed by WFH
3.67 HCROI score
Well ahead of 2.73 -2.90 target
407 Contract staff absorption
85 executives and 322 non-executives
62.1% BookDoc enrollment
10.14 billion steps recorded
98.4% Vaccination Rate
34,585 staffs registered for vaccination


2 DELIVERING RT VALUE CREATIONS
FUTURE GENERATION SOURCES
GenCo and IAG continue to be our key drivers in accelerating TNB’s generation capacity growth domestically and internationally
GENCO RM13.4bn
FY2021 Target: RM17.53bn FY2021 Forecast RM17.37bn
UOR
6.01%
FY2021 Target 4.26% FY2021 Forecast: 4.87%
Productivity
4.06 MW/Employee
FY2O21 Target 3.98 MW/Employee FY2021 Forecast 4.06 MW/Employee
EBIT Contribution
by Plant Type
Revenue
International Asset Group (IAG)
International EBIT (Adjusted)
RM-315.7mn
Ground Zero
Divestment of Liberty Power Limited (LPL) at USD54.5mn (RM226.75mn)
TNB Topaz Energy (TNBTE) divested its investment in the Bajoli Holi CCD for INR1,176mn (~RM67.0mn)
Ambition 1 TNB RE Plant Capacity
GRID OF THE FUTURE Grid and Distribution Network (DN) continue to become the biggest contributor to TNB’s strong financial and technical performance
GRID
FY2021 Target: 7.3% FY2021 Forecast: 7.6%
DN
FY2021 Target: 7.3% FY2021 Forecast: 9.6%
Q3 EVENT
Key Events
CAPEX UTILISATION
RM1.28bn
FY2021 Target RM2.298bn – RM2.4bn FY2021 Forecast RM2.30bn
CAPEX UTILISATION
RM3.3bn
FY2021 Target: RM4.9bn FY2021 Forecast: RM4.9bn
OPEX SAVINGS
RM0.60bn
FY2021 Target: RM1.832bn – RM1.868bn FY2021 Forecast: RM1.77bn
OPEX SAVINGS
RM1.73bn
FY2021 Target: RM5.31bn – RM5.29bn
FY2021 Forecast: RM4.95bn
PROJECT DELIVERY INDEX
4.09 month
FY2021 Target: 5 month FY2021 Target: TBC
AMI INSTALLATION
RM1.55mn
FY2021 Target: 1.5mn – 1.8mn FY2021 Forecast: 1.8mn
Divestment of GMR Bajol Holi Hydropower Limite
(“GBHH”)
18 Aug 2021
RM928.3mn
- Wind
- Solar
- Biogas & Biomass 13MW
Solar
RM28.5mn
Hydro
Coal
RM960.7mn RM578.2mn
Gas
Vantage RE acquired 49% stake in BODL UK that owns 41.5MW offshore wind assets (Blyth 1)
3.4GW
Domestic RE 2.75GW International RE 0.67GW
• Constitute 18% from 18.8GW TNB capacity
• Consist of: - Hydro
2,690 MW 144MW 587MW
RORAB
8%
RORAB
9.6%
30 July 2021
Submitted revised RP3 proposal
12 July 2021
30 July 2021
Sustainability Pathway 2050 (SP2050) approved
by Board
Business Plan & AOP completed
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RETAIL
WINNING THE CUSTOMER
TNB Retail continues to unlock value through transformation of customer experience and beyond kWh business growth
Non-regulated Business (Beyond kWh)
Regulated Business (kWh)
REVENUE
RM1.2bn
FY2021 Target: RM1.78 Bn FY2021 Forecast: RM1.67 Bn
COLLECTED REVENUE PARAMETER (CRP), %
96%
FY2021 Target: 98.5% FY2021 Forecast: 97%
EBIT
RM-0.1bn
FY2021 Target: RM0.39 Bn FY2021 Forecast: RM0.20 Bn
PROMPT BILLING
99%
FY2021 Target: 95% FY2021 Forecast: 99%
REVENUE
RM9.7mn
FY2021 Target: RM35.2Mn FY2021 Forecast: RM22.5Mn
EBIT
RM-4.2mn
FY2021 Target: RM7.4Mn FY2021 Forecast: RM -1.98 Mn
SUBSIDIARIES AS TNB subsidiaries play significant role in seizing new growth opportunity
GROWTH CATALYST
arising from adjacent businesses
SUBSIDIARIES
REVENUE
RM2.25bn
FY2021 Target:RM3.5bn FY2021 Target:RM3.5bn
EBIT
RM426mn
FY2021 Target:RM684mn FY2021 Target:RM554mn
ROIC
6.2%
FY2021 Target:4.9% FY2021 Target:5.7%
PAT
RM132.2mn
FY2021 Target:RM 251mn FY2021 Target:RM 145mn
Capability and Talent Management
RETAIL ACADEMY ENROLLMENT
34.36%
FY2021 Target: 30% Retail employees FY2021 Forecast 30% Retail employees
Note: Contribution from 7 SMD subsidiaries i.e SESB,TCI, MTM, TNBES, Allo, TNEC, TSG.
FUTURE PROOF
Insentive Based
Regulation (IBR)
TNB RP3 IBR proposal submitted to ST & KETSA in July 2021 with proposed WACC of 7.5%
TNB continues to drive and shape successful MESI implementation towards reliable, affordable, sustainable and economical electricity industry landscape
Malaysia Electricity Supply Industry (MESI)
>50% of MyPower’s acceptance on TNB’s recommendations
Budget Challenge completed
30 S3e0ptS2e0p2t 12021
National Energy Policy (NEP)
>50% of KeTSA’s acceptance on TNB’s gas price proposals
Regulatory Relationship
Strength Index (RRSI)
Continue enhancing regulatory relationship and trust through ~1000, engagement sessions at federal and state levels
Tabung Prihatin collection RM 3,297,430
30 Sept 2021
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16 Sept 2021
30 Sept 2021
98.4% staffs fully vaccinated
imah East Power awarded or Clean Coal Technology tilisation for Large Power
Generation by Asean Business Forum
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3 DELIVERING RT ENABLERS
CAPITAL ALLOCATION & VALUE CREATION
Setting medium to long term aspirations, priorities and strategic themes
1
Strategic
Planning process cycle
4 3
Performance review
Rolling executable plans with clear targets, initiatives, resource requirements and implementation plans
• Allocate available capital to optimize TNB’s risk / return profile
TNB Capital Allocation Framework developed in Q3 to ensure optimisation of TNB capital allocation by balancing return profile and investment risk
Strategy
Annual Review Q1
Business Plan
Annual 1+4 Rolling Plan
Monthly, quarterly, mid-year
Capital Allocation
Stock-take of previous year’s performance and discussion of forward-looking remedial actions
5
2 • Capital Allocation Strategy as guidance in developing TNB’s business plan
Target and KPI setting
Budget and AOP
KPIs set for overall organization based on business plan and AOP, and cascaded to individuals
Translation of business plans to annual budgeting and annual operating plans
Annual
Annual
CORPORATE AND TNB Corporate Structure and New Operating Model are continously ORGANIZATION STRUCTURE reviewed and enhanced to accelerate delivery of Reimagining TNB
Corporate Re-organization :
- Merger of Corporate Services Division & TGBS
- Merger or Subsidiary Management Division with Strategy & Ventures Div.
strategic pillars
Corporate Structure and New Operating Model
Organizational Structure Review:
- Addressing capacity and capabilities demand through continues collaboration with Corporate & BEs on future structure change
- Quarterly monitoring on TNB Headcounts against IBR RP and RT approved numbers
People Policy & Guidelines:
- Establishment of People Mobility Policy, People Mobility Guideline for International Duty and Pre-Boarding to Post Offboarding Guideline for International Duty
DIGITAL AND DATA ANALYTICS
7
key initiatives as foundation to support RT pillars
Network of the Future (NoTF)
Established NoTF masterplan.
CULTURE, CAPABILITIES
AND PERFORMANCE MANAGEMENT
TNB culture adoption enhanced through continuous communications
• TNB Change Engagement Circle (CEC) plays significant role in driving culture adoption
In driving high performing organisation, TNB core values are continously reinforced coupled with adoption of performance management best practices
TNB workforce capability strengthened aligning with future ways of working
• E-Learning by ILSAS implemented through 632 sessions attended by 12,377 participants
TNB digital and data analytics implementation is in progress focusing on 7 key initiatives
Process Automation
17 Robotic Process Automation (RPA) deployed for TGBS, Procurement & Retail.
5000 TNB Field Crew enabled by field service management automation solution (mobility)
Application Programming Interface
Set up TNB’s API Platform, running on hybrid cloud.
Established API roadmap and its operating model.
Cloud Transformation
Enterprise Agreement with AWS and Microsoft Azure for use of public cloud.
Enterprise Data Governance (EDG) EDG Framework & Methodology & Data Sharing Guideline developed
Cyber Security
28 NEW initiatives have been added to CSOM, from the original 39.
61% or 41 initiatives completed to-date.
Data Analytics
Developed and maintain data platform (Data Warehouse, Data Visualization, Analytic Sandbox & Data Lake).
Establishment of Data Analytics Strategy and Digital Architecture Framework e.g. DN, Grid.
• TNB Living The Identity (LTI) program rolled-out to 79% of TNB employees
• Living the ‘mindfulness’ values, TNB employees donated RM 3.3 million under Tabung Warga TNB Prihatin during MCO
Robust succession management is critical to ensure readiness of successors for TNB leadership team
• A new Succession Management Framework and talent pipeline approved
Culture Talent
•
Capabilities
Performance Management
2,030 Learning Journey established for various job functions
• Learning and Development Policy established with incorporation of
Digital Learning framework
TNB performance management reinforced to drive performance excellent mindset and business results
by Board Nomination and Remuneration Committee (BNRC) in September 2021
• Successors for 60% (26 out of 43) of C-suites positions deliberated in
Jawatankuasa Insan Kumpulan (JIK)
• Talent Readiness Analysis and Individual Development Plan (IDP) completed for
all C-suites positions
• •
• JEK quarterly performance review reinforced by emphasizing action oriented and forward-looking discussion commencing in Q3 2021
TNB performance governance enhanced through top-down moderation approach for FY2021 performance appraisal
Ongoing effort to strengthen effectiveness of performance conversation between IM and subordinates


4 “BETTERWORLD·BRIGHTERLIVES”
TNB SUSTAINABILITY PATHWAY 2050
Our ESG Journey
Aspire to achieve Net Zero emissions & be Coal-Free by 2050
TNB is committed to embed the sustainability agenda into our organization in order to seize opportunities in a rapidly transforming business landscape
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Commitment of 35% reduction in emission intensity & halving our coal capacity by 2035
Our ESG Targets, Commitment and Aspirations
Equivalent to reducing emmisions from 1.1m combustion engine vehicles off the road for one year
Requiring effort equivalent to planting of new trees through 40 million acres of forests in a year
Our Target for 2025
Build scale in renewable generation Improve thermal plant efficiency
2025
TNB RE Target of 8,300MW with an acceleration of RE investments towards 2050
Our Commitment to 2035
Significant renewable generation growth 50% reduction in coal generation capacity
2035
Emission intensity
reduction of 35% Reduction of coal capacity by 50%
Our Aspiration to 2050
Invest and grow our emerging green technologies including Hydrogen and Carbon Capture & Utilization (CCU)
2050
Aspire to achieve Net Zero Free by 2050
ENERGY TRANSITIONS
Our 6 Game Changers
Building a Global Solar Manufacturing Hub
Electrifying Mobility for Malaysia
Catalysing the economy through
Grid of the Future
TNB aims to unlock values emerging from energy transition opportunities and committed to play leading role to reshape Malaysia’s economy through
6 Game Changers
Raising National Competitiveness through Energy Efficiency
Advancing connectivity for our
Digital Economy
Reskilling Malaysia by embracing the future of work
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