TNB FY2021

TNB
FY2021
PERFORMANCE REPORT CARD
• Group Performance Highlights • Delivering RT Value Creations • Delivering RT Enablers
• “Better World · Brighter Lives”


1 GROUPPERFORMANCEHIGHLIGHTS
TNB recorded commendable FY2021 financial results aligned with the increased domestic economic activities
FINANCIAL
TNB EBIT
RM 8.1bn
+9.8% from FY2020
FY2020 Actual: RM7.4 bn
FUTURE GENERATION SOURCES
GENCO NEW ENERGY DIVISION
RM 2.3bn RM (0.4)bn
Source: Q4 FY2021 TNB Consolidated Result and Segmental Reporting
REVENUE
RM 52.6bn
+19.7% from FY2020
FY2020 Actual: RM 44.0 bn
EBIT contribution by core businesses
GRID OF THE FUTURE
GRID DISTRIBUTION NETWORK
RM 2.6bn RM 3.1bn
PAT
RM 3.9bn
+6.9% from FY2020
FY2020 Actual: RM 3.6 bn
WINNING THE CUSTOMER
RETAIL
RM (0.05)bn
CUSTOMER True to our values, customer centricity continues to be our primary focus
Number of customers
10.32mn Customers
in Peninsular Malaysia and Sabah
OPERATIONAL
Customer Satisfaction Index
8.1 8.6 8.7
2019 2020 2021 All-time high CSI score recorded
in FY2021
Customer Experience Index
91% CEI
delivered via myTNB app, myTNB portal, TNB Careline & Kedai Tenaga
TNB remains committed in delivering strong operational performance across our supply chain
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Domestic Generation Capacity
GenCo’s Generation market-share at 52.8% from Peninsular total installed capacity: 26.7GW
14.1GW of GenCo’s contracted capacity in Peninsular Malaysia are contributed by
15 power plants
5 power plant Coal-fired: 6,440 MW
International Generation Capacity
New Energy Division (NED) continues driving value creation from 4.8GW international generation asset
• •
• •
TENAGA WIND VENTURES UK LTD
Equity stake: 100% Capacity: 26.6MW (wind)
VANTAGE SOLAR INVESTMENTS S.A.R.L.
Equity stake: 55% Capacity: 365MW (solar)
BLYTH OFFSHORE DEMONSTRATOR LIMITED
• Equity stake: 30% • Capacity: 1,133MW (gas, hydro, wind)
3 hydro schemes Hydro: 2,536 MW
123MWp of TRe's operational capacity from TNB Sepang Solar, TNB Bukit Selambau Solar and SD Plantation TNB RE
Generation EAF
82.9%
3% lower than targeted EAF due to technical challenges at key power plants
Grid Asset
• Equity stake: 49% • Capacity: 41.5MW
7 power plant Gas-fired: 5,062 MW
• •
• •
Equity stake: 30% Capacity: 2,064MW (coal, gas & solar)
Equity stake: 6% Capacity : 1,190MW (IWPP) and water desalination of 1,039,000m3/day
(wind)
Maintaining world-class performance below the 2-minute mark since FY2009
Distribution Network Asset
Length of Domestic Transmission Network
Sales of electricity
25,186km
Note: Peninsular Malaysia only
ORGANISATIONAL
Safety Excellence
1.03
Lost Time Injury Frequency (LTIF)
RM44.6bn
Grid System Minutes
0.09 min
Distribution SAIDI
45.25 min/cust/year
Sustaining world-class performance (< 50 mins) despite challenges during pandemic and flash flood
Retail Business
Grid Regulatory Asset Base
Distribution Network Regulatory Asset Base
Unit sold
RM26.5bn
RM31.62bn
112,106 GWh
Number of distribution substations
86,105 Nos
TNB organisational capacity is strengthened through adoption of new TNB identity and values
TNB Identity & Values
8.0
TNB Identity Barometer Score
Employee Engagement
85%
Employee Engagement Score
Vaccination
99.4%
Employee Vaccination Rate


2 DELIVERING RT VALUE CREATIONS
FUTURE GENERATION SOURCES
GENCO
57.6% 29.8% EBIT
11.6% RM2.3bn
Coal Hydro Gas
FY2021 Target: RM2.0bn Source: FY2021 GenCo segmental reporting
NEW ENERGY DIVISION (NED)
Ground Zero (Value Protection Plan)
Divestment of Liberty Power Limited (LPL) completed in November 2021 (RM226.9mn)
TNB Topaz Energy (TNBTE) divested its investment in the Bajoli Holi CCD in August 2021 (~RM66.0mn)
GRID OF THE FUTURE
GRID
FY2021 Target: 7.3%
GenCo and NED as the key drivers in accelerating TNB's generation capacity growth domestically and internationally
Revenue
RM19.50bn
FY2021 Target: RM17.53bn
Ambition 1 (UK & Europe)
In October 2021, Vantage RE acquired 49% stake in BODL UK that owns 41.5MW offshore wind assets (Blyth 1)
Productivity
4.54 MW/Employee
FY2O21 Target: 3.98 MW/Employee
Ambition 2 (South East Asia)
Awarded 78MWp of Large Scale Solar 4 (LSS4) project at Bukit Selambau, Kedah
Projects in pipeline
20MW Waste-to-Energy project in Melaka 50MW Floating Solar project in Sarawak
Grid and DN consistently deliver strong financial and technical performance in providing sustainable regulated return to TNB
RORAB
7.9%
CAPEX UTILISATION
RM2.22bn
FY2021 Target: RM2.298bn – RM2.4bn
OPEX SAVINGS
RM0.07bn
FY2021 Target: RM1.832bn – RM1.868bn
OPEX SAVINGS
RM0.26bn
FY2021 Target: RM5.31bn – RM5.29bn
SYSTEM AVAILABILITY
99.79%
FY2021 Target: 99.78%
AMI INSTALLATION
1.84mn
FY2021 Target: 1.5mn – 1.8mn
DISTRIBUTION NETWORK (DN)
RORAB
9.0%
FY2021 Target: 7.3%
CAPEX UTILISATION
RM4.7bn
FY2021 Target: RM4.9bn
FY2021 KEY EVENT
Southern Power Generation COD (1,440 MW)
19 Feb 2021
Successful operationalization of Vantage RE Ltd
1st July 2021
Successful divestment of CCD issued by GMR Bajoli Holi
18 Au3g0 S2e0p2t 12021
Datuk Seri Arifin appoin TNB Chair
1 Oct 202
1 March 2021
Datuk Ir Baharin bin Din appointed as TNB President / CEO
30 July 2021
Sustainability
Pathway 2050 (SP2050) approved by Board
30 Sept 2021
International Asset Group (IAG) restructured to New Energy Division (NED)
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RETAIL
WINNING THE CUSTOMER Unlocking value through transformation of customer experience and beyond kWh solutions remains a top priority for TNB Retail
Regulated Business (kWh)
Non-regulated Business (Beyond kWh)
REVENUE
RM1.68bn
FY2021 Target: RM1.78 Bn
COLLECTED REVENUE PARAMETER (CRP), %
97.2%
FY2021 Target: 98.5% Source: FY2021 Retail segmental reporting
FUTURE PROOF REGULATION
Incentive Based
Regulation (IBR)
The cabinet has approved TNB’s IBR RP3 proposal in January 2022 with WACC of 7.3%
EBIT
RM0.16bn
FY2021 Target: RM0.39 Bn
PROMPT BILLING
98.7%
FY2021 Target: 95%
REVENUE
RM17.2mn
FY2021 Target: RM35.2Mn
EBIT
-RM2.4mn
FY2021 Target: RM7.4Mn
SUBSIDIARIES AS GROWTH CATALYST
SUBSIDIARIES
PAT
RM499mn
TNB Subsidiaries play significant role in seizing new growth opportunities arising from adjacent businesses
Capability and Talent Management
RETAIL ACADEMY ENROLLMENT
37.15%
FY2021 Target: 30% Retail employees
TNB continues to drive and shape MESI implementation towards reliable, affordable, sustainable and economical electricity industry landscape
Malaysia Electricity Supply Industry (MESI)
>50% of TNB’s recommendations accepted by MyPower
Gas Price for IBR RP3
>80% of KeTSA’s acceptance on TNB’s gas price proposals
Regulatory Relationship Strength Index (RRSI)
87% RRSI score
5% YoY improvement through continous engagements at federal and states level
FY2021 Target: RM 251mn
Note: Financial performance of 7 subsidiaries i.e. SESB,TCI, MTM, TNBES, Allo, TNEC and TSG
EBIT
RM640mn
REVENUE
RM3.22bn
FY2021 Target: RM3.5bn
ROIC
6.7%
FY2021 Target: 4.9%
asan ted as
Operationalisation of TNB largest rooftop solar in UTHM (6.9MWp)
15 Nov 2021
TNB donated
> RM4mn through Tabung Warga TNB Prihatin
Dec 2021
RP3 negotiations with regulators led to approval of TNB RP3 WACC of 7.3% in January 2022
July - Dec 2021
man
1
18 Oct 2021
Acquisition of Blyth Offshore Demonstrator Limited
30 Nov 2021
Divestment of TNB Liberty Power Limited
June - Dec 2021
TNB Retail secured 3 EV MOUs with DHL, SOCAR & Sime Darby
FY2021 Target: RM684mn
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2


3 DELIVERING RT ENABLERS
CAPITAL ALLOCATION & VALUE CREATION
TNB Capital Allocation framework will be introduced to drive value creation and balance return and risks at group level
Strategy
Setting medium to long term aspirations, priorities and strategic themes
1
Management 4 Cycle 3
Performance review
Stock-take of previous year’s performance and discussion of forward-looking remedial actions
Target and KPI setting
KPIs set for overall organization based on business plan and AOP, and cascaded to individuals
Strategic
1. Process Automation
• Desktop Automation platform established
• 16 Robotic Process Automation (RPA) deployed to handle repetitive, high volume, rule-based digital operation tasks
2. Application Programming
Interface (API)
API CoE formed to drive the integration of strategy, governance, platform and core capabilities
Pilot Studio launched to develop API capabilities and accelerate the above integration initiatives
3. Cloud Transformation
• A robust and secure cloud architecture established with aim to create value through strategic migration to cloud platforms
4. Enterprise Data Governance (EDG)
• Corporate guidelines on data governance published to ensure security and quality of TNB data assets
• Surpassed FY2021 data maturity assessment target
• Strategic partners engaged for capability building to expedite analytics implementation
• Analytics successfully embedded in various platforms, e.g. in load profile analysis
5
Planning 2 & Performance
• •
Business Plan
Rolling executable plans with clear targets, initiatives, resource requirements and implementation plans
Budget and AOP
Translation of business plans to annual budgeting and annual operating plans
CORPORATE AND ORGANIZATION STRUCTURE
Corporate Re-organization
- Merger of Corporate Services Division & TGBS - Merger of Subsidiary Management Division with
Strategy & Ventures Division
- Restructuring of International Asset Group (IAG)
TNB Corporate Structure and New Operating Model are continously reviewed and enhanced to accelerate delivery of Reimagining TNB strategic pillars
as New Energy Division (NED)
DIGITAL AND DATA ANALYTICS
7
key initiatives as foundation to support RT pillars
Corporate Structure and New Operating Model
Operational Structure Review
- Addressing capacity and capabilities demand through continuous 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
TNB digital and data analytics implemented across divisions focusing on 7 key initiatives
5. Data Analytics
6. Network of the Future (NoTF)
• NoTF Masterplan established -
a holistic telecommunication strategy framework to ensure a reliable, secure and future-ready internal telecommunication network infrastructure
7.
• • •
Cyber Security
Zero disruption to electricity supply and TNB operations due to cyber attack
Continuous improvement to enhance cyber resiliency of IT and OT systems throughout TNB A secure remote-working environment enabled for staff
CULTURE, CAPABILITIES AND PERFORMANCE MANAGEMENT
TNB culture adoption enhanced through continuous communications
• TNB Change Engagement Circle (CEC) plays key role in driving culture adoption
• 95% of TNB Reimagining Culture (RC) plan executed including
Pelaksanaan CEO Turun Padang & Penganugerahan Wira Budaya • TNB employees donated RM4.03mn under Tabung Warga TNB
Prihatin during MCO
Stronger succession planning for C-suites and key positions
• TNB Succession Management Framework approved by Board Nomination and Remuneration Committee (BNRC) in Q3 2021
Coupled with adoption of performance management best practices, talent management and TNB core values are continuously reinforced
Workforce capability enhanced through online platform
• Learning and Development Policy strengthened with incorporation of Digital Learning framework • E-Learning by ILSAS conducted through 1,479 sessions with 25,011 participants
Culture Talent
Capabilities
Performance Management
• 2,178 Learning Journey of various job functions established
• 5,202 job matching completed under TNB Reskilling Malaysia program by ILSAS
TNB performance management reinforced to accelerate delivery of business outcomes
• 75% of C-suites having at least one ready successors
• Succession planning for key positions (SGM level) implemented at all divisions
• JEK performance review enhanced emphasizing forward looking discussion and steering outcomes
• Strategy driven KPI extended and rolled down to all subsidiaries
• Newtop-downapproach&reviewerprocessimplementedforFY2021YearEndEvaluation(YEE)
Capital Allocation
• Capital Allocation Strategy as guidance in developing TNB’s business plan
• Allocate available capital to optimize TNB’s risk / return profile


4 “BETTERWORLD·BRIGHTERLIVES”
TNB SUSTAINABILITY PATHWAY 2050 (SP2050)
SP2050 Targets
Achieve Net Zero by 2050, 35% emission intensity reduction by 2035
SP2050 Strategic Pillars
Evolve the Grid and Grow Renewables
• Expandrenewableassetswithin
Malaysia,ASEANandEurope • ExpandGrid&Distributionto
enable increased demand and lower energy losses
• Upskilling and reskilling
Our Journey Towards SP2050
2025
TNB RE target of 8,300MW with an acceleration of RE investments towards 2050
TNB is committed to embed and drive sustainability (ESG) agenda in line with global effort to collaboratively enhance the planetary health
Achieve Zero Fatalities and LTIF < 1.0
Invest in Low Emission & Green Technologies
• InvestinR&Dandgreeneralternativenew energy sources
• Reduceoreliminateemissionfromcurrent generation fleet
Future Proof TNB’sBusiness
Enabled by:
• Digitalisation
2035
Emission intensity reduction of 35% and reduction of coal capacity by 50%
1% Profit
After Tax (PAT) towards environmental and community related programmes
Unlock New Energy revenue stream
• GrowkWhandbeyondkWh business
• Grownonregulatedbusinessto meetevolvingcustomerenergy demands
• Strategic Partnerships
2050
Aspire to achieve
Net Zero by 2050
“TENAGA HARI INI MENJANA HARI ESOK”