SMGR CORP PRESENTATION_Nov 2011_Final. (6.39 mb)

(1)

Corporat e Present at ion

NOVEMBER 2011

WHY SMGR?

±

42%

Domest ic

Market



SP



SG

(2)

1 INDONESIA’ S CEMENT INDUSTRY

SMGR Corporat e Present at ion

(3)

2 1. SMGR

20. 2 mn t on

-

Semen Padang : 6. 1 mn t on

-

Semen Gresik : 10. 0 mn t on

-

Semen Tonasa : 4. 1 mn t on

2. Semen Andal as

3)

_{1. 6 mn t on}

3. Semen Bat uraj a

1. 3 mn t on

4. Indocement TP

18. 6 mn t on

5. Hol cim Indonesia

8. 5 mn t on

6. Semen Bosowa

3. 8 mn t on

7. Semen Kupang

4)

_{0. 5 mn t on}

TOTAL

54. 5 mn ton

CEMENT INDUSTRY AT A GLANCE

• Production Capacity

: 51. 3 mio ton

54. 5 mio ton

59. 4 mio ton

• Domestic Growth

: 6. 0%

16. 0%

7. 0%

• Domestic Utilization

: 79%

87%

85%

• Total Utilization

: 85%

90%

88%

• Supply



Domestic

: 40. 8 mio ton

47. 3 mio ton

50. 6



Export

: 2. 9 mio tons

1. 5 mio ton

1. 5



Import

_{: 1. 5 mio tons}

_{1. 0 mio ton}

-1) Based on t he Company’ s f orecast

2) Import ed cement by PT Semen Andal as as it s cement pl ant is current l y under

reconst ruct ion

3) Under reconst ruct ion, schedul ed t o compl et e in mid 2011

4) Semen Kupang does not produce or sel l cement in t he l ast 3 years due t o it s f inancial probl em

Singapore Kuala

Lum pur

SMGR

2

1

3

4

5

1

6

7 THE PLAYERS and CAPACITY (2011

)

SMGR: 20. 2 mio ton

(37% of Industry Cap. )

(4)

3 COMPARISON: CEMENT CONSUMPTION PER CAPITA 2010

Source: UBS; Deut sche, Indonesi a Cement Associ at i on

0

200

400

600

800 1000

1200

1400

1600

S

au

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hin

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in

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Ja

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V

ie

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am

U

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A

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_ail

an

_d

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er

_m

an

_y

I n

do

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sia

I n

dia

Ph

ilip

in

_a

kg/ capit a

172 kg

(5)

Region

Populat ion

Cement

Consump-t ion (Consump-t on)

Cement

Consumpt .

Per Capit a

(kg)

GDP – US$

(2010)

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

6. PAPUA

3, 612, 854

513, 287

142 3, 792

Tot al Indonesia

237, 556, 470

40, 782, 377

172 2, 656

MARKET BY GEOGRAPHY & CEMENT CONSUMPTION PER CAPITA (FY2010)

Papua

Bali & N T

Kalimantan

Sulawesi

Populat ion Dist ribut ion

Sumatera

21.3%

Java

57.5.%

8.4%

5.8%

5.5%

1.5%

4 REGION

MARKET SHARE (%)

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



SG

SP

ST

1

2

3

4

5

6 23.9%

7.4%

7.1%

5.9%

2.2%

Java

53.5.%

Sumatera

Cement Dist ribut ion

(6)

DOMESTIC MARKET CONSUMPTION

Ret ail (resident ial) sect or is t he largest

consumer of cement in Indonesia

5 Bag

80%

Bulk

20%

Key Drivers of Domest ic cement demand:

• National Economic Growth

• Favorable Interest Rate Environment

• Infrastructure Expansion

• Per Capita Consumption increase from current low levels

• Ready-mix (inf rast ruct ure):

±

50%

• Fabricat or (pre-cast , f iber cement , cement based indust ry):

±

45%

• Proj ect s (mort ar, render):

±

5%

• Ready-mix (inf rast ruct ure):

±

50%

• Fabricat or (pre-cast , f iber cement , cement based indust ry):

±

45%

• Proj ect s (mort ar, render):

±

5%

• Housing:

±

90%

• Cement based indust ry:

±

10%

• Housing:

±

90%

• Cement based indust ry:

±

10%

±

(7)

6 COMPANY PROFILE

SMGR Corporat e Present at ion

(8)

7 

1957 : Inaugurat ion of Gresik I, inst al l ed capacit y of 250, 000 t on cement per annum



1991 : Init ial Publ ic Of f ering, Market Cap. : IDR0. 63t n, resul t ing sharehol ding st ruct ure post IPO:

● Government of Republ ic of Indonesia: 73%

● Publ ic: 27%



1995 : Acquisit ion of PT Semen Padang (Persero) and PT Semen Tonasa (Persero)



1998 : Cemex became a st rat egic part ner, Market Cap. : IDR4. 9t n



2006 : Bl ue Val l ey Hol dings bought Cemex’ s 24. 9% st ake in SMGR, Market Cap. : IDR21. 5t n



2010 : In March 31, Bl ue Val l ey Hol dings sol d al l of it s st ake ownership in SMGR, Market Cap per March 31, 2010: IDR43. 3t n



2011 : Target ed t ot al inst al l ed capacit y of 20. 20mm t ons, Market Cap per Oct 31, 2011: IDR56. 3t n

BRIEF HISTORY

SMGR IS THE #1 CEMENT COMPANY IN INDONESIA

0,0

5,0

10,0

15,0

20,0

19

57

19

70

19

80

19

84

19

85

19

86

19

90

19

95

19

97

19

98

20

06

20

07

20

08

20

09

20

10

20

11 SMGR CAPACITY BUILD-OUT (MM TONS)

Pre-consol i dat ed capaci t y Pre-consol i dat ed capaci t y

Post -consol i dat ed capaci t y

Based capacit y: 16. 9 mio t ons

Upgrading: 3. 3 mio t ons

(9)

8 Public

The Government of the Republic of Indonesia

PT Semen Gresik (Persero) Tbk.

PT Semen Padang

PT Semen Tonasa

OWNERSHIP STRUCTURE

FOCUSES IN CORE BUSINESS

¹ As of Apri l 09, 2010

Four subsidiaries Non-cement producers:

51. 01%

48. 99%

99. 99%

Name

Act ivit ies

% Ownership

1. Igasar

Cement dist ribut ion

12. 00%

2. Sepat im B

General t rading, cement packaging 85. 00%

3. Bima SA

General t rading, cement packaging 80. 00%

4. SUPS

Cement Packaging

10. 00%

Six subsidiaries Non-cement producers:

Name

Act ivit ies

% Ownership

1. UTSG

Limest one & Clay Mining

55. 00%

2. IKSG

Cement Packaging

60. 00%

3. KIG

Indust rial Est at e

65. 00%

4. Swadaya Gra

St eel f abricat ion, cont ract or

25. 00%

5. Varia Usaha

Transport and general t rading

24. 90%

6. Et ernit Gresik

Building mat erials

17. 60%

(10)

9 

Tot al inst al l ed capacit y EoY 2010: 19. 0 mn t ons and EoY 2011: 20. 2 mn t ons



Nat ionwide dist ribut ion net work



Distribution warehouses in all areas of Java, Bali, Sumatra, Kalimantan, Sulawesi and Irian



Operat e 4 special sea port s: Padang, Tuban, Gresik, Biringkassi



17 large packing plants

SMGR’s PRODUCTION FACILITIES ARE WELL SUPPORTED BY STRATEGICALLY

LOCATED MARKETING AND DISTRIBUTION FACILITIES

(2011)

T eluk Bayur Sumat era Kalimant an Sulawesi Maluku Papua Lombok Bali Java Bat am Ciwandan

T anj ung Priok Jakart a

Samarinda Banj armasin Palu Bit ung Ambon Makassar Biringkasi Bali T abanan Denpasar Singaraj an DI Yogyakart a

Lempuyangan Jant i Cent ral Java T egal Purwokert o Kudus Magelang Solo/ Palur Alas T uwo Moj opahit Sayung West Java

Serang T angerang Bogor Cibit ung Bandung T asik Malaya Cirebon Narogong Belawan Singapore Kuala Lumpur T uban Surabaya

Cement Plant Packing Plant Port

Warehouse

East Java Margomulyo T anj ung Wangi Bangkalan Swabina Aceh

Pelabuhan T uban

Pelabuhan Gresik

Installed Cap.:

6.1 mn tons

Installed Cap.:

10.0 mn tons

Installed Cap.:

4.1 mn tons

Gresik

(11)

10

9.601

12.210 14. 388

14.344

4.001 5. 355

6.774

6.810

1.779

2.234 8. 728

3.328

4.343 4. 489

3.387

2.397

4.970 4. 773

3.867

2.849 3. 633

3.326

2.524

1.775

1.296

0

2.000

4.000

6.000

8.000

10.000

12.000

14.000

16.000 2006

2007

2008

2009

2010

Re ve nue

Gross Profit

Ope rating Profit

Ebitda

Ne t Profit

(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%

SGG HAS EXPERIENCED ROBUST FINANCIAL GROWTH

2010

(12)

11 STRONG BALANCE SHEET AND RETURNS

Cash balance (IDR bn)

Total debt (IDR bn)

3. 836

3. 902

5. 283

1. 929

2. 939

2006

2007

2008

2009

2010

660

224

159

180

151 2006

2007

2008

2009

2010

* Include short t erm invest ment

Debt/ EBITDA

Return on Assets

20,8%

17,3%

23,4%

23,8%

25,7%

2006

2007

2008

2009

2010

0,10x

0,06x

0,05x

_0,03x

0.13x

2006

2007

2008

2009

2010

3, 0x

The proj ect ed adj ust ed debt / EBITDA of 3. 0x and EBITDA/ Int er est of 3-4x t o mai nt ai n rat i ng l evel f rom Moody’ s Invest ors Servi ce.

(13)

12 3. 0%

_{2. 7%}

5. 2%

4. 1%

3. 2%

2006

2007

2008

2009

2010

Average: 3, 6%

2.0%

_1.6%

3.2%

1. 0%

JSX

Top-20

*)

I NTP

SMCB

SMGR

SMGR DIVIDEND YIELD IN THE LAST 5 YEARS

*): Based on medi an of Top-20 Bi ggest Market Capi t al i zat i on JSX l i st ed compani es i n di vi dend yi el d, excl udi ng Semen Gresi k f or FY2010

2010 DIVIDEND YIELD

REGULAR DIVIDENDS



Key determinants of dividend policy:

• Historical dividend payout trends

• Comparison with peers

• Proj ected cash-flows available for dividends (after taking into account

potential expansionary capex etc)

• Analyst and investor expectations

• Shareholder profile

REGULAR DIVIDEND PAYMENTS WITH ATTRACTIVE YIELD

1)_{shares pri ce}

based on cl osi ng pri ce at t he end of year

(14)

Shares st ock split 1:10

US Sub-prime

mort gage crisis

US Sub-prime

mort gage crisis

Shares buy back

Blue Valley’s

divest ment

Blue Valley’s

divest ment

High inflat ion fear

No cart el

conclusion by

KPPU

No cart el

conclusion by

KPPU

M arket Cap:

Rp21.5T

M arket Cap:

Rp56.3T

3980

51605300

5600

5000

4000

3425

4175

3725

4900

6300

7550

7300

8750

9250

8700

9.9009.800

9.200

9.450

7.750

8.400

8.750

9.500 _9.450

9.100 8300

9.500

18

05 ,52

18

30 ,9

₂

21

39 _,2

8

23

59 ,21

27

45 ,83

24

47 ,3

23

49 _{,1 18}

32 ,5 135

5,4

14

34 _,07

20 _,7

8

24

67 ,59

25

34 ,3

₅

27

77 _,3

29

13 ,6

₈

3.0

69 ,2

₈

3.0

81 ,88

3.5

01 ,30

3.6

35 ,32

3.5

31 _,21

3.7

03 _,5

1

3.4

09 _,1

7

3.4

16 _,7

6

3.5

24 ,48

3.7

41 ,81

3.8

13 ,8

₆

3.8

88 ,5

₆

4.1

30 ,8

₀

3.8 ₄₁

,7

₃

35 ₄₉

,0

₃

3.7

90 ,8

₄

9.600

9.700 3630

0 1000

2000

3000

4000

5000

6000

7000

8000

9000

10000

28 -D

es

-0

6

30 -M

ar

-0

7

29 -J

un

-0

7

28 -S

ep

-0

7

28 -D

es

-0

7

31 -M

ar

-0

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30 -Ju

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29 -S

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-0

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30 -D

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-0

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30 -J

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-0

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ep

-0

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30 -Ju

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14 -F

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-1

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-1

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-1

1

03 /0

5/

20

11

30 /0

6/

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29 /0

7/

20

11

26 /0

8/

20

11

30 /0

9/

20

11

31 /1

0/

20

11 SMGR

JCI

SMGR STOCK PRICE HAS CONTINUED TO GROW….

Euro M arket

Crisis

Euro M arket

(15)

14 MARKET UPDATE

SMGR Corporat e Present at ion

(16)

MARKET UPDATE (Cement Sales FY2010 and 10M2011)

*)

DESCRIPTION

2010

2009

CHANGE

(%)

DOMESTIC

17, 64

17, 82

(1. 0)

EXPORT

0. 29

0, 60

(52. 9)

GRAND TOTAL

17, 93

18, 43

(2. 8)

FY 2010 - Sales Volume

(million tons)

Java

21, 99

21, 15

4. 0

Sumat era

9, 69

8, 87

9. 2

Kalimant an

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

TOTAL IND.

40, 78

38, 46

6. 0

Export Semen

0, 77

1, 23

(37. 2)

Export Clinker

2, 10

2, 79

(24. 7)

Tot al Export

2, 88

4, 03

(28. 5)

GRAND TOTAL

43, 66

42, 49

2. 7

*) Source: Indonesia Cement Associat ion, un-audit ed figures *) Source: Indonesia Cement Associat ion, un-audit ed figures

15 DESCRIPTION

2011

2010

CHANGE (%)

DOMESTIC

15, 961, 928

14, 400, 773

10. 8

EXPORT

116, 641

194, 618

(40. 1)

GRAND TOTAL

16, 078, 569

14, 595, 391

10. 2

Jakart a

3, 755, 721

3, 098, 155

21. 1

Bant en

2, 234, 315

1, 707, 054

30. 9

West Java

5, 733, 589

4, 809, 197

19. 2

Cent ral Java

4, 336, 6548

3, 708, 153

16. 9

Yogyakart a

624, 497

507, 942

22. 9

East Java

4, 839, 907

4, 173, 322

15. 9

Tot al Java

21, 521, 578

18, 003, 822

19. 5

Sumat era

8, 970, 306

7, 829, 036

14. 6

Kalimant an

2, 742, 141

2, 333, 295

17. 5

Sulawesi

2, 843, 419

2, 466, 471

15. 3

Nusa Tenggara

2, 254, 289

1, 969, 790

14. 4

Maluku & Papua

651, 559

737, 299

(11. 6)

TOTAL INDONESIA

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)

Tot al Export

1, 134, 984

2, 384, 054

(52. 4)

GRAND TOTAL

40, 118, 275

35, 723, 768

12. 3

(17)

16 FINANCIAL UPDATE

SMGR Corporat e Present at ion

(18)

17 FINANCIAL SUMMARY: FY2010 RESULTS

EBITDA (Rp bil l ion)

NET INCOME (Rp bil l ion)

EBITDA Margin (%)

FY06

FY07

FY08

FY09

FY10

25. 6

29. 7

31. 7

33. 2

34. 6

NET INCOME Margin (%)

FY06

FY07

FY08

FY09

FY10

14. 8

18. 5

20. 7

23. 1

25. 3

Description

(Rpbn)

FY2009

FY2010

Change

(%)

Revenue

14,388

14,344

(0.3)

Cost of revenue

7,614

7,534

(1.0)

Gross profit

6,774

6,810

0.5 Operating expenses

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 EPS (full amount)

566

613

8.3 4,970

4,773

3,867

2,849

2,234

0

1.000

2.000

3.000

4.000

5.000 2006

2007

2008

2009

2010

3,633

3,326

2,524

1,775

1,296

0

1.000

2.000

3.000

4.000

(19)

18 FINANCIAL SUMMARY: 9M-2011 RESULTS

EBITDA (Rp bil l ion)

NET INCOME (Rp bil l ion)

EBITDA Margin (%)

9M-07

9M-08

9M-09

9M-10

9M-11

29. 1%

31. 6%

32. 5%

34. 5%

32. 8%

NET INCOME Margin (%)

Description

(Rpbn)

9M-2010

9M-2011

Change

(%)

Revenue

10, 292

11, 611

12. 8

Cost of revenue

5, 356

6, 328

18. 1

Gross profit

4, 936

5, 283

7. 0

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

EPS (full amount)

465

425 9. 4

2.761

1.272

1.791

2.408

2.522

0

500

1.000

1.500

2.000

2.500 9M07

9M08

9M09

9M10

9M11

9M-07

9M-08

9M-09

9M-10

9M-11

17. 9%

20. 3%

23. 1%

24. 5%

23. 8%

3.805

3.546

3.379

2.783

2.063

0

1.000

2.000

3.000

4.000

(20)

19 STRATEGIC PROJECTS

SMGR Corporat e Present at ion

(21)

20 SMGR LONG TERM STRATEGIC FOCUS

SMGR

THE OVERALL

STRATEGY

COMBINES

6 CRITICAL

ELEMENTS

1. Undert ake Capacit y Growt h

2. Manage Energy Securit y

3. Enhance Company Image

4. Move Closer To The Cust omer

5. Enable Corporat e Growt h

(22)

21 Cement Finish Grinding

Preparation Bored Pile

Coal Storage Steel Structure

Jetty Extension Area

T

u

b

a

n

T

u

b

a

n

T

o

n

a

sa

T

o

n

a

sa

T

o

n

a

sa

T

o

n

a

sa

New Pow er Plant Area

New Plants

Location

Capacity

(mn tons)

Investment

(US$ mn)

Construction

Start

Completed

Java

2. 5

304 2009

Dec 2011

Sul awesi

2. 5

290 2009

Apr 2012

Sub Total

5. 0

594 Power Plants

Location

Capacity

(MW)

Investment

(US$ mn)

Construction

Start

Completed

Sul awesi

2 x 35

114 2010

2012

TOTAL CAPEX

US$ 708mn

CEMENT PLANTS & POWER PLANT PROJECTS

These st rat egic proj ect s wil l ensure sust ainabil it y of

t he Company’ s market l eadership

Preheater Tuban IV

(23)

22 Progress of Tonasa V Cement Plant Project

Progress of Tuban IV Cement Plant Project

Progress of Power Plant Project - Tonasa 2 x 35 M W

Preheater Tonasa V

Preheater Tuban IV

PROGRESS OF CEMENT & POWER PLANT PROJECTS – October 31, 2011

Description

Weight

Planning

Actual

Preparat ion

0. 39%

100. 00%

Management

2. 88%

95. 30%

97. 07%

Engineering

3. 83%

100. 00%

Procurement

72. 82%

99. 19%

99. 03%

Const ruct ion

18. 03%

95. 93%

73. 95%

Commissioning

2. 05%

31. 66%

4. 12%

Total

100 %

97. 14%

92. 55%

Description

Weight

Planning

Actual

Preparat ion

0. 12%

97. 37%

97. 42%

Management

5. 58%

93. 59%

98. 40%

Engineering

4. 14%

100. 00%

Procurement

69. 41%

100. 00%

99. 49%

Const ruct ion

18. 77%

92. 02%

84. 80%

Commissioning

1. 97%

52. 84%

52. 53%

Total

100 %

97. 21%

95. 77%

Description

Weight

Planning

Actual

Preparat ion

2. 63%

100. 00%

Management

4. 60%

66. 75%

66. 78%

Engineering

5. 75%

98. 58%

95. 54%

Procurement

55. 13%

62. 27%

65. 91%

Const ruct ion

26. 45%

38. 67%

31. 66%

Commissioning

5. 44%

0. 00%

0. 18%

(24)

DESIGN CAPACITY (Mio Ton)

23. 0

26. 2

26. 9

17, 7

17. 8

16. 7

15. 2

1. 0

0. 7

0, 3

1. 8

2007

2008

2009

2010

2011F 2012F 2013F 2014F 2015F

17. 1

18. 0

19. 0

Export

sal es

▪ Domest ic

sal es

▪ Export

sal es

▪ Domest ic

sal es

▪ 20. 2

28. 7

Based

Capacity

Based

Capacity

Up-grading

New

Capacity

New

Capacity

16. 9

3. 1

8. 7

(25)

24 ENVIRONMENTAL FOCUS

SMGR Corporat e Present at ion

(26)

25 Generate revenue



Emissions reduction programs



Carbon credits trading

Environment al

Management

Reduce operating expense



Energy efficiency programs



Technology-driven cost savings

Promote company image



Domestic capacity expansion



Investment communities

SMGR IS FOCUSED ON DRIVING VALUE THROUGH AN

ENVIRONMENTALLY-SUSTAINABLE BUSINESS PLATFORM

1. Alternative Fuel

The use of al t ernat ive f uel is t he company’ st rat egy pl an in order t o improve non

renewabl e energy ef f iciency as wel l as consume f riendl y environment al energy.

2. Waste Heat Recovery Power Generator

Ut il ize exhaust (wast e gas) f rom pre-heat er &

cool er t o produce el ect ricit y (power pl ant ).

3. Shifting Coal Consumption from

High-Medium CV to Low CV by 2011

4. Environmental Management System:

• Environment Monit oring Program

• Environment Management Program

• Resources Conservat ion Program

• Communit y Devel opment Program

• Environment Monit oring Program

• Environment Management Program

• Resources Conservat ion Program

• Communit y Devel opment Program

(27)

26 FUTURE OF INDONESIA’ S CEMENT INDUSTRY

SMGR Corporat e Present at ion

(28)

27 

Pessimist

: 5. 5%



Moderate

: 6. 5%



Optimist

: 7. 0

%

Annual Growth Rates

NATIONAL DEMAND IS FORECAST TO RISE TO 142mm TONS BY 2030

Indonesia Cement Market Growth 2010-2030

43

46

49

52

56

59

63

67

72

81

86

92

98

104

111

118

125

133

117

40

76

142

163

0

20

40

60

80

100

120

140

160

180 2010

2015

2020

2025

2030

Pessimist

Moderate

Optimist

Indonesia’s demand growt h will make it t he largest cement producer in Sout heast Asia

Sour ce: Int er nal Resear ch

2020:

76 mio

t ons

2030:

142 mio

t ons

2030:

142 mio

t ons

2015:

56 mio

t ons

SMGR

• Design Cap

: 29. 8 mio t ons

• Product ion (P)

: 28. 5 mio t ons

• Domest ic market

: 25. 0 mio t ons

• Export market

: 3. 5 mio t ons

(29)

28 DEMAND IN 2010-2030 WILL INCREASINGLY SHIFT TO THE OUTER ISLANDS

SMGR wit h it s wide geographical presence is well posit ioned t o t ap t he growt h

t hroughout Indonesia

Malaysia

Timor Leste Malaysia

Malaysia

Timor Leste Timor Leste Timor Leste

22

50

10

39

20 ₁₆

6

11 Kalimantan

17 MT (618%)

Sulawesi

13 MT (406%)

Bali

9 MT (403%)

Java

28 MT (130%)

Sumatera

29 MT (310%)

East of Indonesia

5 MT (625%)

2010

2030

Key

Figures are in MT

2020

20

8 ₇

34

(30)

29

Tr anspor tati on 2,458

Rai l ways 11,960

Tol l r oads 15,248

Po wer 3,695 W ater resour ces 779

Proj ect Value by Sector (US$ million) 2010-2014

Toll Road

Proj ect Status

No. of

proj ects

Proj ect

value

(USD mio)

Length

(Km)

Cement

demand

(MT)

Proj ect s Ready For Offer

3 1, 000

135

405 Priorit y Proj ect s

8 2, 474

342 1, 026

Pot ent ial Proj ect s

19 11, 774

857 2, 571

TOTAL

30 15, 248

1, 334

4, 002

Source: Nat i onal Devel opment Pl anni ng Agency/ Redwi ng est i mat es

INDONESIA PLANS TO INVEST HEAVILY IN INFRASTRUCTURE – PARTICULARLY

TOLL-ROADS

TOTAL VALUE:

US$34, 140 mn

Det ails Toll Road

Proj ect s

(31)

CONCLUSION: WHY SMGR?

SMGR Corporat e Present at ion

(32)

31 SMGR’s COMPARATIVE & COMPETITIVE ADVANTAGE HAS DRIVEN SMGR TO BE

THE MARKET LEADER IN INDONESIA

Out st anding performance Experienced

management t eam

Conservat ive capit al st ruct ure

and financial policies

Robust cash flow generat ion

Out st anding business performance

Favorable indust ry

out look



Outstanding business performance

–

Leading cement pl ayer in Indonesia wit h over 43% market share based on

sal es vol ume f or 2010 and approximat el y 37% share of t ot al inst al l ed

cement capacit y (Source: Indonesia Cement Associat ion (“ ASI” ))

–

St rat egical l y l ocat ed pl ant s proximat e t o key market s t hroughout t he

count ry

–

Subst ant ial growt h opport unit ies t hrough expansion and opt imizat ion

–

Superior dist ribut ion net work and st rong brands recognit ion

–

Long-t erm access t o raw mat erial s f or cement product ion and coal f or f uel

consumpt ion

–

Concerns on environment al and Corporat e Social Responsibil it y programs t o

ensure sust ainabl e growt h.



Favourable industry outlook

–

Cement consumpt ion pret t y much in-l ine wit h Indonesian economic growt h

–

Real est at e and inf rast ruct ure proj ect s and decl ining int erest rat es key

demand drivers

–

High barriers t o ent ry (pl ant , dist ribut ion and brand invest ment cost s)

–

Discipl ined invest ment on suppl y side



Robust cash flow generation

–

Hist orical l y st rong revenue, margin and price t rends

–

High pl ant ut il izat ion and st rong f ocus on cost and revenue management



Conservative capital structure and financial policies

–

[ Invest ment grade-l ike credit met rics]

–

Conservat ive capit al st ruct ure pol icy; l ow use of l everage

–

Access t o capit al market s f or expansion init iat ives



Experienced management team

–

Experienced and successf ul management t eam

(33)

APPENDIX

SMGR Corporat e Present at ion

(34)

21. 0

6. 5

18. 1

1. 0

16. 9

1. 9

20. 0

2. 3

22. 7

3. 0

23. 7

3. 5

23. 7

3. 8

25. 2

5. 0

25. 5

6. 0

26. 9

5. 1

28. 2

6. 0

32. 2

5. 9

32. 8

6. 2

34. 2

6. 6

0

5

10

15

20

25

30

35 1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

Bag Consumpt i on

Bul k Consumpt i on

SO FAR INFRASTRUCTURE EXPANSION HAS BEEN RELATIVELY SLOW

Bag and Bul k cement consumpt ion 1997 – 2010 (mil l ion t ons)

33 Source: Credit Suisse Research, Indonesia Cement Association, the Company’s data

(35)

34 INDONESIA CEMENT CONSUMPTION PER CAPITA (1997 – 2010)

123

128

141

96 ₉₄

110

125 130 130

140 144 145

152

162

167

172

0

20

40

60

80

100

120

140

160

180 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

kg/ per capita

Source: Indonesi a Cement Associ at i on

34 It was onl y back in 2004

ASIAN

Economics

Crisis

ASIAN

Economics

(36)

35

Source: Indonesian Cement Associat ion & BPS St at ist ic

INDONESIA HAS EXPERIENCED SOLID ECONOMIC AND DOMEST IC CEMENT

CONSUMPT ION GROWT H

Growth

:

1.1%

Growth

:

9.7%

Growth

:

4.2%

Growth

:

1.8%

Growth

:

6.6%

Growth

:

5.8%

Growth

:

19.4%

Domest ic consumpt ion (LHS)

GDP growt h % (RHS)

(mio t ons)

DOMEST IC CEMENT CONSUMPT ION, CEMENT GROWT H, GDP GROWT H AND CONST RUCT ION GROWT H IN

INDONESIA

40 , 8

39 , 0

39 , 1

27 , 2

2 7, 5

3 0, 2

3 1 , 5

3 2 , 1

34 , 2

3 8 , 1

6, 10%

5, 6%

4, 7%

5, 1%

5, 4%

4, 4%

6. 3%

6. 1%

4. 60%

6, 60%

6. 0 %

1 1 . 5%

4 . 2 %

9. 7 %

2 . 5%

6 . 6%

1. 8 %

1 . 1 %

5 . 8 %

1 6. 9 %

0, 0

1 0, 0

2 0, 0

3 0, 0

4 0, 0

2 00 2

2 0 03

2 0 04

20 0 5

2 0 06

2 0 07

20 0 8

20 0 9

2 01 0

1 0M2 01 1

0 , 0%

1 0, 0 %

2 0, 0 %

Cement growt h % (RHS)

(F)

(37)

36 IN ADDITION TO CEMENT DEMAND FROM TOLL ROAD PROJECTS, THE MULTIPLIER

EFFECT WILL FURTHER STRENGTHEN RETAIL CEMENT DEMAND

Riau

480,000

W. Java

507,000

Lampung

600,000

S. Sumatera

216,000

N. Sumatera

408,000

Jabotabek

264,000

E. Java

693,000

C. Java

507,000

Bali

24,000

W. Sumatera

165,000

N. Sulawesi

138,000

Potential cement demand : Toll road projects 2010 to 2014

Source: Nat i onal Devel opment Pl anni ng Agency/ Redwi ng est i mat es

(38)

37 Main Office:

Main Building of Semen Gresik

Jln. Veteran Gresik 61122 –

Indonesia

Phone: (62-31) 3981731 -2, 3981745

Fax: (62-31) 3983209, 3972264

Representative Office:

Gedung The East, 18

_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

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 howsoever arising (including, without limitation for any claim, proceedings, action, suits, losses, expenses, damages or costs) which may be brought against or suffered by any person as a 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.

(1)

APPENDIX

SMGR Corporat e Present at ion

(2)

21. 0

6. 5

18. 1

1. 0

16. 9

1. 9

20. 0

2. 3

22. 7

3. 0

23. 7

3. 5

23. 7

3. 8

25. 2

5. 0

25. 5

6. 0

26. 9

5. 1

28. 2

6. 0

32. 2

5. 9

32. 8

6. 2

34. 2

6. 6

0

5

10

15

20

25

30

35 1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

Bag Consumpt i on

Bul k Consumpt i on

SO FAR INFRASTRUCTURE EXPANSION HAS BEEN RELATIVELY SLOW

Bag and Bul k cement consumpt ion 1997 – 2010 (mil l ion t ons)

(3)

INDONESIA CEMENT CONSUMPTION PER CAPITA (1997 – 2010)

123

128

141

96 ₉₄

110

125 130 130

140 144 145

152

162

167

172

0

20

40

60

80

100

120

140

160

180 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

kg/ per capita

Source: Indonesi a Cement Associ at i on

It was onl y back in 2004

ASIAN

Economics

Crisis

ASIAN

Economics

(4)

Source: Indonesian Cement Associat ion & BPS St at ist ic

INDONESIA HAS EXPERIENCED SOLID ECONOMIC AND DOMEST IC CEMENT

CONSUMPT ION GROWT H

Growth

:

1.1%

Growth

:

9.7%

Growth

:

4.2%

Growth

:

1.8%

Growth

:

6.6%

Growth

:

5.8%

Growth

:

19.4%

Domest ic consumpt ion (LHS)

GDP growt h % (RHS)

(mio t ons)

DOMEST IC CEMENT CONSUMPT ION, CEMENT GROWT H, GDP GROWT H AND CONST RUCT ION GROWT H IN

INDONESIA

40 , 8

39 , 0

39 , 1

27 , 2

2 7, 5

3 0, 2

3 1 , 5

3 2 , 1

34 , 2

3 8 , 1

6, 10%

5, 6%

4, 7%

5, 1%

5, 4%

4, 4%

6. 3%

6. 1%

4. 60%

6, 60%

6. 0 %

1 1 . 5%

4 . 2 %

9. 7 %

2 . 5%

6 . 6%

1. 8 %

1 . 1 %

5 . 8 %

1 6. 9 %

0, 0

1 0, 0

2 0, 0

3 0, 0

4 0, 0

2 00 2

2 0 03

2 0 04

20 0 5

2 0 06

2 0 07

20 0 8

20 0 9

2 01 0

1 0M2 01 1

0 , 0%

1 0, 0 %

2 0, 0 %

Cement growt h % (RHS)

(F)

(5)

IN ADDITION TO CEMENT DEMAND FROM TOLL ROAD PROJECTS, THE MULTIPLIER

EFFECT WILL FURTHER STRENGTHEN RETAIL CEMENT DEMAND

Riau

480,000

W. Java

507,000

Lampung

600,000

S. Sumatera

216,000

N. Sumatera

408,000

Jabotabek

264,000

E. Java

693,000

C. Java

507,000

Bali

24,000

W. Sumatera

165,000

N. Sulawesi

138,000

Potential cement demand : Toll road projects 2010 to 2014

(6)

Main Office:

Main Building of Semen Gresik

Jln. Veteran Gresik 61122 –

Indonesia

Phone: (62-31) 3981731 -2, 3981745

Fax: (62-31) 3983209, 3972264

Representative Office:

Gedung The East, 18

_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

THANK YOU

IMPORTANT NOTICE

● economic, social and political conditions in Indonesia, and the impact such conditions have on construction and infrastructure spending in Indonesia; ● the effects of competition;

● 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