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TENAGA NASIONAL BERHAD (TNB)

Reimagining the future of utilities

Pantone 1795C

Pantone 286C

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Better

Brighter enaga Nasional Berhad (TNB) has both a rich and deep-rooted history in Malaysia, building the nation’s infrastructure even before the country received its independence. With an incredible 67 years of experience, the Company has an impressive hold as Malaysia’s leading electricity utility and a strong presence throughout Peninsular Malaysia, Sebah and Labuan. As Datuk Seri Ir. Azman Bin Mohd, the Company Chief Executive Officer goes onto explain: “The experience of working for TNB has led us towards building a performance and growth driven culture based on building trust and relationships, beginning our journey by looking at the respective strengths that already made us a great entity.”

Datuk Seri Ir. Azman Bin Mohd

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Tenaga Nasional Berhad aims to be among the leading corporations in energy and related businesses on a global platform Writer: Phoebe Calver Project Manager: Matt Cole-Wilkin

“If we were to go back in history and recall the development of Malaysia from a rural economy to what it is today, it is clear that by bringing electricity to homes, TNB was able to make a significant difference in the lives of people who before then have not had access to 24-hour electricity. Imagine not being able to read books at night. With electricity, lives of people, families and societies have been able to change for the better and as TNB, we are so privileged to be able to serve people this way. My colleagues can tell you heart warming stories of how ordinary people react when they first experience electricity in their own homes, and how much of a difference in their lives this makes. With electricity, people have been empowered. Moving forward, we will continue to serve society by empowering them in different ways – electricity is and remains but one way of empowerment. With developments in technology, such as renewable energy, energy storage, connectivity,

data analytics, and the Internet of Things, we see even more ways of empowering people further. We also look within the organization and how we can even empower our employees through the use of technology in order to change the way we work, manage and lead; by given our employees new skills, new opportunities, and new exposures. These are the core building blocks of our aspirations in Reimagining TNB.” The vision for TNB is to not only be

EME to increase both the efficiency and productivity of our service offering, while also creating a new product and services that lead to customer empowerment and satisfaction,” affirms the Company. “In the era of IoT that we are working in, we have to remain competitive by leveraging the latest technologies, capitalising on creativity and innovation in order to create business opportunities through establishing strategic affiliations and partnerships with industry leaders.” – Datuk Fazlur Rahman Bin Zainuddin, TNB’s Chief Finance Officer. The energy sector is completely saturated with opportunities for a company such as TNB; at present there are three main utilities in Malaysia which include, Tenaga Nasional Berhad, Sabah Electricity Sdn Bhd and Sarawak Energy. “We are proudly the largest industry player that serves 9.39 million customers in Peninsular Malaysia, with the important responsibility of providing electricity to the country’s businesses, homes and industries,” Datuk Fazlur adds. “Over the years we have ensured that the electricity industry that we support is always reliable, secured and that the platforms are on par with the other developing countries.”

External and domestic challenges

an ordinary electricity business entity, but also one that has the expertise and ability to offer several other services that may not even be related to the energy business. “We have always aspired to be a globally renowned Company and at present are building the foundations, as well as putting in place the resources to carry our brand to the international stage,” continues the CEO. “We are well aware of the challenges facing us in regards to

There are a wide variety of challenges both externally and domestically that TNB has had to foresee over the technology disruptions, emerging years, and subsequently has provided it with extensive experience within market economies, greater demands from shareholders and customers the industry. The external challenges as well as increased competition faced are those that affect the global globally.” energy sector, for example economic shifts, technology disruptions, higher Capitalising on creativity shareholder expectations, increasing In the everchanging market of energy pressure for cost efficiency and & utilities, TNB needs to ensure that competitive intensity from regulators. it is keeping abreast of the endless “At present Peninsular Malaysia’s technological advancements occurring electricity supply industry is converging into quite the perfect at present. “These advancements can be utilised storm,” continues Datuk Azman.

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“The electricity demand growth is forecasted to slow down to approximately 1.54 percent as we approach 2020. “The main changes to the industry landscape are linked with the deregulation of the gas market, providing a first step towards marketbased pricing and eventually this will lead to the progression of the electricity market.” Although Malaysia currently have the lowest electricity tariffs in the region, we are facing a challenge due to escalating costs of fuel. The imbalance cost pass-through mechanism ensures that TNB remains neutral to the fluctuation of fuel prices but there is a need to communicate this more effectively to the customers. We are also noticing greater Xxxxx demand for green energy, which calls xxxx xxxxx for decarbonization (reduction of xxxxx xxxx greenhouse xxxxxxxx xxx gas emissions by 70% by 2050) and decentralization (due to technological breakthrough leading to reduction in costs for solar PV and batteries). When bearing these factors in mind in relation to the future of the Company, TNB has outlined its strategic direction as part of its reimagining that consists of four pillars. These pillars include future generation sources, grid of the future, winning the customer and future proofing regulations to embrace challenges with specific strategies to turn them into opportunities. The reimagining of TNB will focus on shaping the Company into becoming one of the top 10 global utility companies in terms of market capitalisation by 2025.

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reasonably robust financial position, with extensive manpower experience that means we are able to execute major initiatives and developments that require huge investment and commitment,” states Datuk Fazlur. “However, we do have to remember that as a public listed Company, we are also answerable to our shareholders and stakeholders and obliged by our sound risk management.” Says Hj. Jalaluddin Megat, “We are also guided by the reimaging of our TNB strategy, venturing into new businesses and opportunities beyond our conventional business and territories. As a result of this during the past few years, we have been able to expand our international footprint, establishing our name into countries such as Pakistan, Saudi Arabia, India, Turkey and the UK.” From a domestic point of view, TNB is also venturing into adjacent businesses to the energy industry in the local market and other businessrelated services that provide them with more empowerment and options in Distinguishing factor the way that they consumer their daily With thanks to its extensive experience, electricity. the Company has developed into a top “Through our domestic and utility business in Malaysia, with its core international investments as well as business focusing on generation, grid operational cost efficiency measures, and distribution. we expect to increase our EBIT by 30% in “At TNB we are lucky to have a the next 3-5 years,” Says Datuk Azman.

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GVO Wind Bluemerang As a part of TNB’s journey to strategic growth, renewable energy has been identified as a key focus-point in cementing its position as an industry leader. The acquisition of GVO Wind Bluemerang is part of the Company’s new target for renewables, both in terms of geography and technology as it is looking to make investments that offer stability in UK and Australian markets with growth potential.

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TNB Energy Strategy

As part of the Company’s 10-year strategy in the lead up to 2025, it is quickly showing signs of achieving the aspirations of becoming a top energy player globally. The strategic plan has been formulated through the careful consideration of the four global trends seen dramatically impacting the utilities industry, comprising the shift in economic power to Asia, technology disruptions, the end of cheap capital and evolving regulatory developments. TNB believes that these trends have the potential to substantially reshape the future of the Company, presenting many exciting opportunities and capitalising on the trends that will enable it to unlock new growth areas. The four pillars include: future generation sources, grid of the future, winning the customer and anticipating future regulations changes.

CEPSI

The Conference of the Electric Power Supply Industry (CEPSI) is recognised as one of the largest and most prestigious events in the electricity supply industry in the Asia Pacific region. The first edition of the CEPSI event was held in Hong Kong in 1976 and has since been successfully organised biennially with the most recent even held in Bangkok in 2016. CEPSI plays host to an array of power industry companies, utility leaders, industry professionals and experts from all over the world. The event provides a premiere platform for the to gather, exchange ideas and learn from each other, while also being a renowned avenue for industry players to showcase technologies, products and services. The next edition of CEPSI 2018 will be hosted in Kuala Lumpur by TNB and held at the Kuala Lumpur Convention Centre, Malaysia from the 17 – 22 September, 2018. The even is expected

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next three to five years it will have approximately 50 percent of its restructuring implemented. “It will be exciting to see how TNB has fared since the strategy’s inception and how far we will have to go before we meet out objectives,” concludes Datuk Azman. “It is my hope that we will be able to achieve or even surpass the targets and aspirations set out in the strategy by that time, including becoming the ASEAN leader to host more than 2,000 delegates that in renewables, building profitable include high-profile industry CEO’s, key business in South Asia, Southeast Asia decision makers and C-Suite leaders and the Middle East.” who innovated within their respective The journey to the top entails a shift organisations. in mindset and culture towards a more performance oriented and adaptive Brand sustainability culture. “We are currently working As Malaysia’s leading utility company, towards ensuring that this culture is TNB is aware that its value not only lies imbibed by the staff and ultimately within providing access to electricity adopted,” Says Datuk Wira Roslan. to homes and businesses throughout At the same time, TNB have begun the country, while also adopting the process of communicating with sustainable practices and activities in customers and the public on how TNB its operations to improve societal and is progressively improving and easing environmental outcomes. the lives of customers through the “It is in this area that we are able imminent introduction of MyTNB, the to ensure the sustainability of our numerous payment channels available business, alongside the continued today, ultimately delivering customer growth and development of the empowerment. And TNB will continue community and people that we are to communicate as implementation of serving on a daily basis,” the Company the other new initiatives such as Smart explains. “As part of our efforts, we Meter etc. take place. have put in place a Green Policy that “It is my hope that we will have guides us in our efforts to minimise made all of our customers are digitally our environmental impact by adopting connected, receiving the opportunity sustainable practices,” Says Datuk Seri to access real-time services and Ir Azman customised products and enabling us TNB has also successfully been to build an even better reputation with expanding its portfolio of clean our clients all over the world,” power assets to now include two CEPSI is being regarded as one of ultra-supercritical coal-fire power the vehicles that embodies TNB’s plants, Manjung 4 and the recently aspiration by bringing the topic of commissioned Manjung 5, a large scale Reimagining Utility of the Future to solar plant, biomass power plant and the forefront and inviting the world’s two biogas power plants. best utility players and experts to Surpassing targets share, network and highlight the On the whole the Company is company’s goals, meet partners extremely optimistic about the future and set conversation going even as of both the industry and its operations, the company looks for like-minded hoping that moving forward in the partners from across the world.

Pantone 1795C

Pantone 286C

C5 M90 Nasional Y100 K0 C100 M66 Y0 Tenaga Berhad R222 G52 B20 R0 G93 B170 HEX #005DAA NoHEX129#DE3314 Jalan Bangsar 59200 Kuala Lumpur Malaysia Tel: +603 2296 5566