WHY SMGR? - Semen Indonesia

WHY SMGR?
±42%
Domestic
Market
Share
SP



ST
SG
Corporate Presentation
NOVEMBER 2011
INDONESIA’S CEMENT INDUSTRY
SMGR Corporate Presentation
November 2011
1
CEMENT INDUSTRY AT A GLANCE
2
Kuala
Lumpur
Singapore
1
SMGR
3
1
4
1
6
7
5
CEMENT INDUSTRY
• Production Capacity
• Domestic Growth
• Domestic Utilization
• Total Utilization
• Supply
 Domestic
 Export
 Import 2)
1)
2)
3)
4)
2010
:
:
:
:
SMGR: 20.2 mio ton
(37% of Industry Cap.)
THE PLAYERS and CAPACITY (2011)
2011F 1)
2012F 1)
51.3 mio ton
6.0%
79%
85%
54.5 mio ton
16.0%
87%
90%
59.4 mio ton
7.0%
85%
88%
: 40.8 mio ton
: 2.9 mio tons
: 1.5 mio tons
47.3 mio ton
1.5 mio ton
1.0 mio ton
50.6
1.5
-
Based on the Company’s forecast
Imported cement by PT Semen Andalas as its cement plant is currently under reconstruction
Under reconstruction, scheduled to complete in mid 2011
Semen Kupang does not produce or sell cement in the last 3 years due to its financial problem
1. SMGR
20.2 mn ton
- Semen Padang : 6.1 mn ton
2.
3.
4.
5.
6.
7.
Semen Gresik : 10.0 mn ton
Semen Tonasa : 4.1 mn ton
Semen Andalas 3)
Semen Baturaja
Indocement TP
Holcim Indonesia
Semen Bosowa
Semen Kupang 4)
TOTAL
1.6 mn ton
1.3 mn ton
18.6 mn ton
8.5 mn ton
3.8 mn ton
0.5 mn ton
2
54.5 mn ton
COMPARISON: CEMENT CONSUMPTION PER CAPITA 2010
kg/capita
kg
1600
1400
1200
1000
800
600
400
172
200
0
Sa
Ch
ud
in
a
iA
ra
bi
a
So
ut
h
S
in
ga
Ko
re
a
M
po
re
It
al
al
y
ay
si
a
Ja
p
an
Vi
U
SA
et
na
m
G
In
Th
In
er
do
di
ai
m
a
la
ne
a
nd
ny
si
a
Ph
il i
p
in
a
Source: UBS; Deutsche, Indonesia Cement Association
3
MARKET BY GEOGRAPHY & CEMENT CONSUMPTION PER CAPITA (FY2010)
Population Distribution
Cement Distribution
2
5.9% 2.2%
4
7.1%
7.4%
3

6
SP
1
SG
Papua
5.8%
8.4%
ST
Sumatera
5
23.9%
1.5%
Bali & N T
Kalimantan

5.5%
Sumatera
21.3%
Sulawesi
Java
Java
57.5.%
53.5.%
Domestic Market Share (Up to 10M2011)
REGION
SMGR
INTP
SMCB
BSWA ANDLS
BTRJA
1. JAVA
36.3
40.4
21.1
2.0
-
0.01
2. SUMATERA
42.6
15.9
11.5
2.0
16.0
12.0
3. SULAWESI
60.9
13.4
0.9
25.0
-
-
4. KALIMANTAN
48.5
28.4
13.5
10.0
-
-
5. NUSA TENGGR.
37.7
36.5
4.5
20.4
-
-
6. EASTERN IND.
65.1
16.8
0.4
17.7
-
-
TOTAL
INDONESIA
41.0
31.3
15.6
5.8
3.7
2.7
Cement
Consumpt. GDP – US$
Per Capita
(2010)
(kg)
Region
Population
Cement
Consumption (ton)
1. JAVA
136,563,142
21,996,688
161
3,165
2. SUMATERA
50,613,947
9,690,931
191
2,712
3. SULAWESI &
MALUKU
19,926,385
3,421,522
172
1,450
4. KALIMANTAN
13,772,543
2,833,018
206
4,976
5. BALI & NUSA
TENGGARA
13,067,599
2,326,931
178
1,228
3,612,854
513,287
142
3,792
237,556,470
40,782,377
172
2,656
MARKET SHARE (%)
6. PAPUA
Total Indonesia
4
DOMESTIC MARKET CONSUMPTION
Bulk
± 20%
Bag
±80%
± 50%
•
Ready-mix (infrastructure):
•
Fabricator (pre-cast, fiber cement, cement based industry): ± 45%
•
Projects (mortar, render): ± 5%
•
Housing: ± 90%
•
Cement based industry: ± 10%
Source: Internal Research
Retail (residential) sector is the largest
consumer of cement in Indonesia
Key Drivers of Domestic cement demand:
• National Economic Growth
• Favorable Interest Rate Environment
• Infrastructure Expansion
• Per Capita Consumption increase from current low levels
5
COMPANY PROFILE
SMGR Corporate Presentation
November 2011
6
SMGR IS THE #1 CEMENT COMPANY IN INDONESIA
BRIEF HISTORY
 1957 : Inauguration of Gresik I, installed capacity of 250,000 ton cement per annum
 1991 : Initial Public Offering, Market Cap.: IDR0.63tn, resulting shareholding structure post IPO:
● Government of Republic of Indonesia: 73%
● Public: 27%
: Acquisition of PT Semen Padang (Persero) and PT Semen Tonasa (Persero)
: Cemex became a strategic partner, Market Cap.: IDR4.9tn
: Blue Valley Holdings bought Cemex’s 24.9% stake in SMGR, Market Cap.: IDR21.5tn
: In March 31, Blue Valley Holdings sold all of its stake ownership in SMGR, Market Cap per March 31, 2010: IDR43.3tn
: Targeted total installed capacity of 20.20mm tons, Market Cap per Oct 31, 2011: IDR56.3tn
 1995
 1998
 2006
 2010
 2011
SMGR CAPACITY BUILD-OUT (MM TONS)
Total installed capacity: 20.2 mio tons
20,0
Post-consolidated capacity
Upgrading: 3.3 mio tons
Based capacity: 16.9 mio tons
15,0
10,0
Pre-consolidated capacity
5,0
0,0
57 970 980 984 985 986 990 995 997 998 006 007 008 009 010 011
9
1 1 1 1 1 1 1 1 1 1 2 2 2 2 2 2
7
FOCUSES IN CORE BUSINESS
OWNERSHIP STRUCTURE1
The Government of the Republic of Indonesia
Public
51.01%
48.99%
PT Semen Gresik (Persero) Tbk.
99.99%
99.99%
PT Semen Padang
PT Semen Tonasa
Six subsidiaries Non-cement producers:
Four subsidiaries Non-cement producers:
Name
Activities
% Ownership
Name
Activities
% Ownership
1. Igasar
Cement distribution
12.00%
1. UTSG
Limestone & Clay Mining
55.00%
2. Sepatim B
General trading, cement packaging 85.00%
2. IKSG
Cement Packaging
60.00%
3. Bima SA
General trading, cement packaging 80.00%
3. KIG
Industrial Estate
65.00%
4. SUPS
Cement Packaging
4. Swadaya Gra
Steel fabrication, contractor
25.00%
5. Varia Usaha
Transport and general trading
24.90%
6. Eternit Gresik
Building materials
17.60%
10.00%
¹ As of April 09, 2010
8
SMGR’s PRODUCTION FACILITIES ARE WELL SUPPORTED BY STRATEGICALLY
LOCATED MARKETING AND DISTRIBUTION FACILITIES (2011)
Aceh
Kuala Lumpur
Belawan
Singapore
Bitung
Batam
Palu
Samarinda
Kalimantan
Teluk
Bayur
Sulawesi
Maluku
Sumatera
Banjarmasin
Installed Cap.:
6.1 mn tons
Tuban
Jakarta
Java
Packing Plant
Port
Warehouse





Ambon
Papua
Ciwandan
Tanjung Priok
Cement Plant
Biringkasi
West Java
Serang
Tangerang
Bogor
Cibitung
Bandung
Tasik Malaya
Cirebon
Narogong
Central Java
Tegal
Purwokerto
Kudus
Magelang
Solo/Palur
Alas Tuwo
Mojopahit
Sayung
Gresik
Pelabuhan Tuban
Surabaya
Makassar
Bali
Lombok
Installed Cap.:
4.1 mn tons
Pelabuhan Gresik
DI Yogyakarta
LempuyanganEast Java
Janti
Margomulyo
Tanjung Wangi
Bangkalan
Swabina
Bali
Tabanan
Denpasar
Singarajan
Installed Cap.:
10.0 mn tons
Total installed capacity EoY 2010: 19.0 mn tons and EoY 2011: 20.2 mn tons
Nationwide distribution network
Distribution warehouses in all areas of Java, Bali, Sumatra, Kalimantan, Sulawesi and Irian
Operate 4 special sea ports: Padang, Tuban, Gresik, Biringkassi
17 large packing plants
9
SGG HAS EXPERIENCED ROBUST FINANCIAL GROWTH
2010
16.000
14.388
14.344
14.000
12.210
12.000
(Rp billions)
CAGR
(2006 – 2010)
Revenue
13%
Cost of Revenue
9%
Gross Profit
20%
Operating Income
26%
EBITDA
22%
Net Income
29%
Total assets
20%
Total Equity
22%
9.601
10.000
8.728
8.000
6.774
5.355
6.000
3.867
3.328
2.849
2.000
1.779
1.296
2.234
4.970
4.773
4.001
4.000
6.810
4.489
4.343
3.387
2.397
3.633
3.326
1.775
2.524
0
2006
Revenue
2007
Gross Profit
2008
Operating Profit
2009
Ebitda
2010
Net Profit
10
STRONG BALANCE SHEET AND RETURNS
Cash balance (IDR bn)
Total debt (IDR bn)
* Include short term investment
660
5.283
1.929
2006
2.939
2007
3.902
3.836
224
2008
2009
2010
Debt/EBITDA
2006
159
180
151
2007
2008
2009
2010
Return on Assets
3,0x
17,3%
0,10x
0,06x
0,05x
0,03x
2006
2007
2008
2009
20,8%
23,8%
25,7%
2008
2009
23,4%
0.13x
2010
2006
2007
2010
The projected adjusted debt/EBITDA of 3.0x and EBITDA/Interest of
3-4x to maintain rating level from Moody’s Investors Service.
11
REGULAR DIVIDEND PAYMENTS WITH ATTRACTIVE YIELD
SMGR DIVIDEND YIELD IN THE LAST 5 YEARS
2010 DIVIDEND YIELD
1)
1)
Average: 3,6%
3.2%
5.2%
3.0%
2.7%
2007
3.2%
2008
1.6%
1.0%
JSX
I NTP
SMCB
4.1%
1) shares
2006
2.0%
2009
2010
price
based on
closing price at
the end of year
Top-20
*)
SMGR
*):
Based on
median of Top20 Biggest
Market
Capitalization
JSX listed
companies in
dividend yield,
excluding
Semen Gresik
for FY2010
REGULAR DIVIDENDS
 Key determinants of dividend policy:
• Historical dividend payout trends
• Comparison with peers
• Projected cash-flows available for dividends (after taking into account
potential expansionary capex etc)
• Analyst and investor expectations
• Shareholder profile
12
SMGR STOCK PRICE HAS CONTINUED TO GROW….
SMGR
JCI
9.9009.800
10000
9250
8750
9000
9.700
9.450
9.200
8700
9.5009.600 9.450
9.100
8.750
8.400
8300
Shares stock split 1:10
8000
7000
7.750
7300
Euro Market
Crisis
Blue Valley’s
divestment
6300
6000
5160 5300
5600
5000
4900
5000
4000
7550
US Sub-prime
mortgage crisis
3980
3630
Market Cap:
Rp56.3T
3 .0
,3
,6 8
77
13
69
29
27
,59
,7 8
14
34
30
28
-D
es
-0
-M 6
a
29 r - 0 7
- Ju
2 8 n-0
7
-S
ep
-0
28
-D 7
e
31 s -07
-M
a
30 r - 08
- Ju
2 9 n-0
8
-S
ep
-0
30
-D 8
e
31 s -08
-M
a
30 r - 0 9
- Ju
30 n-0
9
-S
ep
-0
30
-D 9
e
31 s -09
-M
a
30 r - 1 0
- Ju
n
30 -1 0
31 - Ju l
-A
g u 10
st1
30
-S 0
ep
29 -10
-O
30 kt- 10
-N
o
3 0 p- 10
-D
es
31 -10
- Ja
14 n-1 1
-F
e
15 b -1 1
-M
a
08 r -1 1
-A
p
03 r - 1 1
/0 5
3 0 /2 0 1
/0 6 1
2 9 /2 0 1
/0 7 1
2 6 /2 0 1
/08 1
30 /20 1
/09 1
3 1 /20 1
/1 0 1
/2 0
11
,4
,0 7
55
,9 2
,52
13
2 ,5
,2 8
20
,3 5
67
34
24
20
59
39
30
05
3
118
,
49
23 3
,
47
24 3
,8
45
,2 1
25
27
23
21
18
18
0
High inflation fear
,8 4
90 0 3
3 .7 4 9 ,
35 7 3
,
41
3 .8,80
30
4 .1
,5 6
88
3 .8 , 8 6
13
3 .8 , 8 1
41
3 . 7 ,4 8
24
3 . 5 ,7 6
16
3 .4 ,1 7
09
3.4,5 1
03
3 .7 ,21
31
3.5 ,32
35
3.6 ,30
01
3.5
,88
81
3 .0 ,2 8
Market Cap:
Rp21.5T
2000
No cartel
conclusion by
KPPU
3725
3425
3000
1000
Shares buy back
4175
4000
9.500
MARKET UPDATE
SMGR Corporate Presentation
November 2011
14
MARKET UPDATE (Cement Sales FY2010 and 10M2011)
FY 2010 - Sales Volume (million tons)
DESCRIPTION
DOMESTIC
EXPORT
2010
2009
CHANGE
(%)
17,64
17,82
(1.0)
0.29
0,60
(52.9)
17,93
18,43
(2.8)
10M-2011 - Sales Volume (million tons)
DESCRIPTION
DOMESTIC
EXPORT
GRAND TOTAL
GRAND TOTAL
Java
*)
2011
2010
CHANGE (%)
15,961,928
14,400,773
10.8
116,641
194,618
(40.1)
16,078,569
14,595,391
10.2
Jakarta
3,755,721
3,098,155
21.1
Banten
2,234,315
1,707,054
30.9
West Java
5,733,589
4,809,197
19.2
4,336,6548
3,708,153
16.9
624,497
507,942
22.9
4,839,907
4,173,322
15.9
21,521,578
18,003,822
19.5
Sumatera
8,970,306
7,829,036
14.6
21,99
21,15
4.0
Sumatera
9,69
8,87
9.2
Kalimantan
2,83
2,44
15.8
Sulawesi
3,04
3,00
1.5
Nusa Tenggara
2,32
2,18
6.6
Maluku & Papua
0,88
0,80
10.4
40,78
38,46
6.0
Export Semen
0,77
1,23
(37.2)
Kalimantan
2,742,141
2,333,295
17.5
Export Clinker
2,10
2,79
(24.7)
Sulawesi
2,843,419
2,466,471
15.3
Total Export
2,88
4,03
(28.5)
Nusa Tenggara
2,254,289
1,969,790
14.4
43,66
42,49
2.7
651,559
737,299
(11.6)
38,983,292
33,339,714
16.9
Export Cement
211,929
637,460
(66,8)
Export Clinker
923,055
1,746,594
(47.2)
1,134,984
2,384,054
(52.4)
40,118,275
35,723,768
12.3
TOTAL IND.
GRAND TOTAL
Central Java
Yogyakarta
East Java
Total Java
Maluku & Papua
TOTAL INDONESIA
Total Export
GRAND TOTAL
*) Source: Indonesia Cement Association, un-audited figures
15
FINANCIAL UPDATE
SMGR Corporate Presentation
November 2011
16
FINANCIAL SUMMARY: FY2010 RESULTS
EBITDA (Rp billion)
Description
(Rpbn)
Revenue
FY2009
FY2010
Change
(%)
5.000
14,344
(0.3)
Cost of revenue
7,614
7,534
(1.0)
Gross profit
6,774
6,810
0.5
3.000
2,432
2,321
(4.5)
Operating income
4,343
4,489
3.4
Ebitda
4,773
4,970
4.1
Net Income
3,326
3,633
9.2
566
613
8.3
2010
2.000
1.000
0
2007
2008
EBITDA Margin (%)
FY06
FY07
FY08
FY09
FY10
25.6
29.7
31.7
33.2
34.6
NET INCOME (Rp billion)
4.000
EPS (full amount)
2009
2,849
2,234
2006
Operating expenses
4,970
3,867
4.000
14,388
4,773
3,326
3,633
2,524
3.000
1,775
2.000
1,296
1.000
0
2006
2007
2008
2009
2010
NET INCOME Margin (%)
FY06
FY07
FY08
FY09
FY10
14.8
18.5
20.7
23.1
25.3
17
FINANCIAL SUMMARY: 9M-2011 RESULTS
EBITDA (Rp billion)
Description
(Rpbn)
9M2010
9M2011
Change
(%)
4.000
10,292
11,611
12.8
3.805
9M09
9M10
9M11
2.063
2.000
Cost of revenue
5,356
Gross profit
4,936
6,328
18.1
1.000
5,283
7.0
0
9M07
Operating expenses
1,729
1,881
8.8
Operating income
3,207
3,402
6.1
Ebitda
3,546
3,805
7.3
Net Income
2,522
2,761
9.5
465
425
9.4
EPS (full amount)
3.546
2.783
3.000
Revenue
3.379
9M08
EBITDA Margin (%)
9M-07
9M-08
9M-09
9M-10
9M-11
29.1%
31.6%
32.5%
34.5%
32.8%
NET INCOME (Rp billion)
2.408
2.522
2.761
9M09
9M10
9M11
2.500
1.791
2.000
1.500
1.272
1.000
500
0
9M07
9M08
NET INCOME Margin (%)
9M-07
9M-08
9M-09
9M-10
9M-11
17.9%
20.3%
23.1%
24.5%
23.8%
18
STRATEGIC PROJECTS
SMGR Corporate Presentation
November 2011
19
SMGR LONG TERM STRATEGIC FOCUS
THE OVERALL
STRATEGY
COMBINES
6 CRITICAL
ELEMENTS
1. Undertake Capacity Growth
2. Manage Energy Security
3. Enhance Company Image
SMGR
4. Move Closer To The Customer
5. Enable Corporate Growth
6. Manage Key Risks
20
CEMENT PLANTS & POWER PLANT PROJECTS
New Plants
Location
Investment
(US$ mn)
Java
2.5
Sulawesi
Construction
Start
Completed
304
2009
Dec 2011
2.5
290
2009
Apr 2012
Sub Total
5.0
594
Power Plants
Location
Capacity
(MW)
Investment
(US$ mn)
2 x 35
114
TOTAL CAPEX
Cement Finish Grinding
Preparation Bored Pile
Preheater Tuban IV
Construction
Start
Completed
2010
2012
US$ 708mn
Tonasa
Sulawesi
Tuban
Capacity
(mn tons)
Coal Storage
Steel Structure
Blending Silo Tonasa V
Tonasa
These strategic projects will ensure sustainability of
the Company’s market leadership
New Power Plant Area
Jetty Extension Area
21
PROGRESS OF CEMENT & POWER PLANT PROJECTS – October 31, 2011
Progress of Tonasa V Cement Plant Project
Progress of Tuban IV Cement Plant Project
Weight
Planning
Actual
Preparation
0.12%
97.37%
97.42%
97.07%
Management
5.58%
93.59%
98.40%
100.00%
100.00%
Engineering
4.14%
100.00%
100.00%
72.82%
99.19%
99.03%
Procurement
69.41%
100.00%
99.49%
Construction
18.03%
95.93%
73.95%
Construction
18.77%
92.02%
84.80%
Commissioning
2.05%
31.66%
4.12%
Commissioning
1.97%
52.84%
52.53%
Total
100 %
97.14%
92.55%
Total
100 %
97.21%
95.77%
Description
Weight
Planning
Actual
Preparation
0.39%
100.00%
100.00%
Management
2.88%
95.30%
Engineering
3.83%
Procurement
Description
Progress of Power Plant Project - Tonasa 2 x 35 MW
Description
Weight
Planning
Actual
Preparation
2.63%
100.00%
100.00%
Management
4.60%
66.75%
66.78%
Engineering
5.75%
98.58%
95.54%
Procurement
55.13%
62.27%
65.91%
Construction
26.45%
38.67%
31.66%
Commissioning
5.44%
0.00%
0.18%
Total
100%
55.93%
55.92%
Preheater Tuban IV
Preheater Tonasa V
22
DESIGN CAPACITY (Mio Ton)
28.7
26.2
26.9
8.7
New
Capacity
23.0
18.0
17.1
1.8
1.0
19.0
19.0
0.7
0,3
20.2
3.1
Upgrading
16.9
Based
Capacity
Export
sales ▪
Domestic
sales ▪
15.2
16.7
17.8
17,7
2007
2008
2009
2010
2011F 2012F 2013F 2014F 2015F
ENVIRONMENTAL FOCUS
SMGR Corporate Presentation
November 2011
24
SMGR IS FOCUSED ON DRIVING VALUE THROUGH AN
ENVIRONMENTALLY-SUSTAINABLE BUSINESS PLATFORM
1. Alternative Fuel
Environmental
Management
Generate revenue
 Emissions reduction programs
 Carbon credits trading
Reduce operating expense
 Energy efficiency programs
 Technology-driven cost savings
The use of alternative fuel is the company’ strategy plan in order to improve non
renewable energy efficiency as well as consume friendly environmental energy.
2. Waste Heat Recovery Power Generator
Utilize exhaust (waste gas) from pre-heater &
cooler to produce electricity (power plant).
Promote company image
 Domestic capacity expansion
 Investment communities
3. Shifting Coal Consumption from HighMedium CV to Low CV by 2011
4. Environmental Management System:
•
•
•
•
Environment Monitoring Program
Environment Management Program
Resources Conservation Program
Community Development Program
25
FUTURE OF INDONESIA’S CEMENT INDUSTRY
SMGR Corporate Presentation
November 2011
26
NATIONAL DEMAND IS FORECAST TO RISE TO 142mm TONS BY 2030
Annual Growth Rates
Indonesia Cement Market Growth 2010-2030
180

Pessimist
: 5.5%

Moderate
: 6.5%

Optimist
: 7.0%
Pessimist
163
Moderate
160
142
140
120
2020:
76
mio
tons
2015:
56
mio
tons
100
60
40
40
49
43 46
52
133
125
118
111
104
92
80
56 59
63
67
72
76
81
117
98
86
2030:
142
mio
tons
20
0
2010
2015
Optimist
2020
2025
2030
SMGR
• Design Cap
• Production (P)
• Domestic market
• Export market
: 29.8 mio tons
: 28.5 mio tons
: 25.0 mio tons
: 3.5 mio tons
Source: Internal Research
Indonesia’s demand growth will make it the largest cement producer in Southeast Asia
27
DEMAND IN 2010-2030 WILL INCREASINGLY SHIFT TO THE OUTER ISLANDS
Kalimantan
Key
Sulawesi
17 MT (618%)
13 MT (406%)
2010
Sumatera
3
29 MT (310%)
8
20
3
7
16
Malaysia
10
20
39
2020
2030
Java
28 MT (130%)
Timor Leste
Bali
22
34
50
1
9 MT (403%)
2
5
11
2
6
East of Indonesia
5 MT (625%)
Figures are
in MT
Source: Internal Research
SMGR with its wide geographical presence is well positioned to tap the growth
throughout Indonesia
28
INDONESIA PLANS TO INVEST HEAVILY IN INFRASTRUCTURE – PARTICULARLY TOLLROADS
Project Value by Sector (US$ million) 2010-2014
Power 3,695
Transportation 2,458
Water resources 779
Railways
11,960
TOTAL VALUE:
US$34,140 mn
Toll roads
15,248
Toll Road
Project Status
Details Toll Road
Projects
No. of
projects
Project
value
(USD mio)
Length
(Km)
Cement
demand
(MT)
Projects Ready For Offer
3
1,000
135
405
Priority Projects
8
2,474
342
1,026
Potential Projects
19
11,774
857
2,571
TOTAL
30
15,248
1,334
4,002
Source: National Development Planning Agency/Redwing estimates
29
CONCLUSION: WHY SMGR?
SMGR Corporate Presentation
November 2011
SMGR’s COMPARATIVE & COMPETITIVE ADVANTAGE HAS DRIVEN SMGR TO BE
THE MARKET LEADER IN INDONESIA
 Outstanding business performance
Strengths of SMGR
Experienced
management
team
Conservative
capital structure
and financial
policies
Outstanding
business
performance
Favorable
industry
outlook
Outstanding
performance
– Leading cement player in Indonesia with over 43% market share based on
sales volume for 2010 and approximately 37% share of total installed
cement capacity (Source: Indonesia Cement Association (“ASI”))
– Strategically located plants proximate to key markets throughout the
country
– Substantial growth opportunities through expansion and optimization
– Superior distribution network and strong brands recognition
– Long-term access to raw materials for cement production and coal for fuel
consumption
– Concerns on environmental and Corporate Social Responsibility programs to
ensure sustainable growth.
 Favourable industry outlook
– Cement consumption pretty much in-line with Indonesian economic growth
– Real estate and infrastructure projects and declining interest rates key
demand drivers
– High barriers to entry (plant, distribution and brand investment costs)
– Disciplined investment on supply side
 Robust cash flow generation
Robust cash flow
generation
– Historically strong revenue, margin and price trends
– High plant utilization and strong focus on cost and revenue management
 Conservative capital structure and financial policies
– [Investment grade-like credit metrics]
– Conservative capital structure policy; low use of leverage
– Access to capital markets for expansion initiatives
 Experienced management team
– Experienced and successful management team
31
APPENDIX
SMGR Corporate Presentation
November 2011
SO FAR INFRASTRUCTURE EXPANSION HAS BEEN RELATIVELY SLOW
Bag and Bulk cement consumption 1997 – 2010 (million tons)
35
32.2
30
25
23.7
22.7
21.0
20
28.2
26.9
25.5
25.2
34.2
32.8
23.7
20.0
18.1
16.9
15
10
6.5
5
1.0
1.9
2.3
3.0
3.8
3.5
5.0
6.0
5.1
6.0
5.9
6.2
6.6
0
1997
1998
1999
2000
2001
2002
2003
Bag Consumption
2004
2005
2006
2007
2008
2009
2010
Bulk Consumption
Source: Credit Suisse Research, Indonesia Cement Association, the Company’s data
33
INDONESIA CEMENT CONSUMPTION PER CAPITA (1997 – 2010)
180
It was only back in 2004
162
160
140 144 145
141
140
123
128
120
ASIAN
Economics
Crisis
125
167
172
152
130 130
110
96
100
94
80
60
40
20
0
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
kg/per capita
Source: Indonesia Cement Association
34
INDONESIA HAS EXPERIENCED SOLID ECONOMIC AND DOMESTIC CEMENT
CONSUMPTION GROWTH
DOMESTIC CEMENT CONSUMPTION, CEMENT GROWTH, GDP GROWTH AND CONSTRUCTION GROWTH IN
INDONESIA
(mio tons)
Cement growth % (RHS)
GDP growth % (RHS)
Domestic consumption (LHS)
40,0
16.9%
20,0%
40,8
39,0
39,1
38,1
34,2
30,0
30,2
27,2
32,1
31,5
11.5%
27,5
9.7%
10,0%
20,0
5.8%
10,0
4,4%
5,1%
Growth
:
4,7%
5.8%
Growth
:
1.1%
5,6%
4.2%
2002
2003
4.2%
9.7%
6,10%
6.3%
Growth
6.6%
:
Growth
:
Growth
6.1%
:
4.60% Growth
6.0%
:
6.6%
1.8%
6,60% (F)
Growth
:
19.4%
2.5%
1.8%
1.1%
0,0
5,4%
0,0%
2004
2005
2006
2007
2008
2009
2010
10M2011
Source: Indonesian Cement Association & BPS Statistic
35
IN ADDITION TO CEMENT DEMAND FROM TOLL ROAD PROJECTS, THE MULTIPLIER
EFFECT WILL FURTHER STRENGTHEN RETAIL CEMENT DEMAND
Potential cement demand : Toll road projects 2010 to 2014
N. Sumatera
408,000
Riau
N. Sulawesi
480,000
138,000
W. Sumatera
165,000
S. Sumatera
Jabotabek
216,000
264,000
Bali
Lampung
24,000
600,000
W. Java
507,000
C. Java
E. Java
693,000
507,000
TOTAL CEMENT DEMAND: 4,002 MT
Source: National Development Planning Agency/Redwing estimates
36
THANK YOU
IMPORTANT NOTICE
THIS PRESENTATION IS NOT AND DOES NOT CONSTITUTE OR FORM PART OF, AND IS NOT MADE IN CONNECTION WITH, ANY OFFER FOR SALE OR SUBSCRIPTION OF OR SOLICITATION,
RECOMMENDATION OR INVITATION OF ANY OFFER TO BUY OR SUBSCRIBE FOR ANY SECURITIES NOR SHALL IT OR ANY PART OF IT FORM THE BASIS OF OR BE RELIED ON IN
CONNECTION WITH ANY CONTRACT, COMMITMENT OR INVESTMENT DECISION WHATSOEVER.
THE SLIDES USED IN THIS PRESENTATION ARE STRICTLY CONFIDENTIAL AND HAVE BEEN PREPARED AS A SUPPORT FOR ORAL DISCUSSIONS ONLY. THE INFORMATION CONTAINED IN
THIS PRESENTATION IS BEING PRESENTED TO YOU SOLELY FOR YOUR INFORMATION AND MAY NOT BE REPRODUCED OR REDISTRIBUTED TO ANY OTHER PERSON, IN WHOLE OR IN
PART.
This presentation includes forward-looking statements, which are based on current expectations and forecast about future events. Such statements involve known / unknown risks uncertainties
and other factors, which could cause actual results to differ materially from historical results or those anticipated. Such factors include, among others:
● economic, social and political conditions in Indonesia, and the impact such conditions have on construction and infrastructure spending in Indonesia;
● the effects of competition;
● the effects of changes in laws, regulations, taxation or accounting standards or practices;
● acquisitions, divestitures and various business opportunities that we may pursue;
● changes or volatility in inflation, interest rates and foreign exchange rates;
● accidents, natural disasters or outbreaks of infectious diseases, such as avian influenza, in our markets;
● labor unrest or other similar situations; and
● the outcome of pending or threatened litigation.
We can give no assurance that our expectations will be attained.
DISCLAIMER
The information contained in this report has been taken from sources which we deem reliable. However, none of PT Semen Gresik (Persero) Tbk and/or its affiliated companies and/or their
respective employees and/or agents make any representation or warranty (express or implied) or accepts any responsibility or liability as to, or in relation to, the accuracy or completeness of the
information and opinions contained in this report or as to any information contained in this report or any other such information or opinions remaining unchanged after the issue thereof.
We expressly disclaim any responsibility or liability (express or implied) of PT Semen Gresik (Persero) Tbk, its affiliated companies and their respective employees and agents whatsoever and
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result of acting in reliance upon the whole or any part of the contents of this report and neither PT Semen Gresik (Persero) Tbk, its affiliated companies or their respective employees or agents
accepts liability for any errors, omission or mis-statements, negligent or otherwise, in the report and any liability in respect of the report or any inaccuracy therein or omission therefrom which
might otherwise arise is hereby expresses disclaimed.
Main Office:
Main Building of Semen Gresik
Jln. Veteran Gresik 61122 –
Indonesia
Phone: (62-31) 3981731 -2, 3981745
Fax: (62-31) 3983209, 3972264
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Gedung The East, 18th Floor,
Jln. Lingkar Mega Kuningan Kav. E3.2 No. 1,
Jakarta 12950 – Indonesia
Phone : (62-21) 5261174 – 5
Fax
: (62-21) 5261176
www.semengresik.com
37