SMGR CORP Presentation Juni 2013

(1)

(2)

INDONESIA’S CEMENT INDUSTRY: NOW and THE FUTURE

SMGR Corporate Presentation

June 2013

(3)

2 1. SEMEN INDONESIA

27.7 mn ton

- Semen Padang :

6.4 mn ton

- Semen Gresik :

14.0 mn ton

- Semen Tonasa :

7.3 mn ton

2. Semen Andalas

2)

_{1.6 mn ton}

3. Semen Baturaja

1.3 mn ton

4. Indocement TP

20.5 mn ton

5. Holcim Indonesia 10.4 mn ton

6. Semen Bosowa

3.6 mn ton

7. Semen Kupang

0.5 mn ton

TOTAL

65.6 mn ton

• Design Capacity

: 60.2 mio tons

65.6 mio tons

74.0 mio tons

• Production Capacity : 54.2 mio tons

60.7 mio tons

66.6 mio tons

• Domestic Growth

: 14.5%

10.0%

9.0%

• Domestic Utilization : 98%

100%

99%

• Supply



Domestic

: 54.9 mio tons

60.5 mio tons

65.9 mio tons



Export

: 0.2 mio tons

0.5 mio tons

0.2 mio tons



Import

: 0.7 mio tons

3.0 mio tons

1)

Based on the Company’s forecast

2) Imported cement by PT Semen Andalas (1.0 mio ton) and clinker by Bosawa and Kupang

3) Imported cement & clinker

Singapore Kuala

Lumpur

SMGR

2

1

3

4

5

1

6

7 DOMESTIC CAPACITY (2013)

CEMENT INDUSTRY

2012

2013F

1)

_2014F

1)

(4)

‘000 tons

ton ‘000

2012

2013F

2014F

2015F

2016F

2017F

Installed Capacity

60,270

66,420

69,520

79,020

93,070

108,570

Real Production

54,243

61,106

63,958

72,698

79,110

98,073

Consumption

54,964

60,460

65,902

71,833

78,298

85,345

Surplus/deficit

(721)

646 (1,943)

865

812 12,728

Domestic Utilization

100%

99%

100%

99%

100%

87%

Export

200 Domestic

Consumption Growth

14.5%

10%

9%

DOMESTIC DEMAND VS NATIONAL CAPACITY (2012

–

2017)

20.000

40.000

60.000

80.000

100.000

120.000 2012

2013F

2014F

2015F

2016F

2017F

(5)

New Cement Capacity from Potential Foreign and Domestic Players (By 2017)

No

Company

Targeted Plant

Location

Capacity

(mn tons)

Pot. to be impl.

(mn tons)

Investment

(US$ mn)

Remarks + Local Partner

1 Siam Cement (Thailand)

West Java

1.8

360 Greenfield, Sukabumi

2 CNBM (China)

Central Java

2.4

0

350 Greenfield, Semen Grobogan

3 Semen Merah Putih (Wilmar)

Banten

11.5

4.5 n.a

Greenfield (PT Cemindo Gemilang

–

Commercial)

4 Anhui Conch Cement (China)

- Tanjung

- Tanah Grogot

- Pontianak

- West Papua

Various

- South Kalimantan

- East Kalimantan

- West Kalimantan

- West Papua

13.7

3.8

2.4

3.8 2,350

400

600

750 Greenfield

5 Ultratech

Wonogiri, Central Java

4.5

0

827 Greenfield

6 Semen Puger

East Java

0.6

0 n.a

Upgrading

7 Semen Barru

South Sulawesi

3.3

0

470 Greenfield (Barru, South Sulawesi)

New Cement Capacity from Existing Players (2013

–

2017)

No

Company

Targeted Plant Location

Capacity

(mn tons)

Investment

(US$ mn)

Remarks

1 Semen Indonesia

Java, Sumatera, Sulawesi

11.5

970 Upgrading + green/brownfield

2 Indocement

Java, Kalimantan

8.8 1,560 (E)

Cement Mill + brown/greenfield

3 Holcim

East Java

3.8 680 (E)

Brown/Greenfield

4 Bosowa

Java, Sulawesi

7.9

620 Cement Mill + Brownfield

5 Semen Andalas

Sumatera

1.6

300 Greenfield

6 Semen Baturaja

Sumatera

2.6

325 Greenfield/Brownfield

T O T A L

36.2 4,130

(6)

Source: Deutsche, Indonesia Cement Association

223 kg

0

200

400

600

800

1.000

1.200

1.400

1.600

1.800 C

hin

_a

Si

nga

po

re

M

ala

ys

_ia

Vi

etn

am

Th

aila

nd

In

_do

ne

sia

Ph

ilippi

ne

_s

In

_di

a

kg/capita

(7)

Source: Indonesian Cement Association & BPS Statistic

Growth

:

1.1%

Growth

:

9.7%

Growth

:

4.2%

Growth

:

1.8%

Growth

:

6.6%

Growth

:

5.8%

Growth

:

19.4%

Domestic consumption (LHS)

GDP growth % (RHS)

(mio tons)

40.8

48.0

54.9

22.9

39.1

27.2

27.5

30.2

31.5

32.1

34.2

38.1 6.10%

6.00%

6.80%

5.6%

4.7%

5.1%

5.4%

4.4%

6.3%

6.1%

4.60%

6.50%

7.2%

14.5%

6.0%

11.5%

4.2%

9.7%

2.5%

6.6%

1.8%

1.1%

5.8%

17.7%

0.0

10.0

20.0

30.0

40.0

50.0

60.0 2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

5M2013

0.0%

10.0%

20.0%

Cement growth % (RHS)

(A)

INDONESIA

’S

SOLID ECONOMIC AND DOMESTIC CEMENT CONSUMPTION

(8)

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

39.2

8.8

44.1

10.8

18.2

4.7

0

5

10

15

20

25

30

35

40

45 1997

1999

2001

2003

2005

2007

2009

2011

5M2013

Bagged Cement

Bulk Cement

Bag and Bulk cement consumption (million tons)

Source: Indonesia Cement Association and the Company’s data

(9)

Retail (residential) sector is the largest

consumer of cement in Indonesia

Bag

80%

Bulk

20%

Key Drivers of Domestic cement demand:

• National Economic Growth

• Favorable Interest Rate Environment

• Infrastructure Expansion

• Per Capita Consumption

increase from

current low levels

• Ready-mix (infrastructure):

±

60%

• Fabricator (pre-cast, fiber cement, cement based industry):

±

35%

• Projects (mortar, render):

±

5%

• Housing:

±

90%

• Cement based industry:

±

10%

±

Source: Internal Research

(10)

MARKET UPDATE

SMGR Corporate Presentation

June 2013

(11)

Papua

Bali & N T

Kalimantan

Sulawesi

Population Distribution (2012)

Sumatera

21.3%

Java

57.5.%

8.4%

5.8%

5.5% 1.5%

REGION

MARKET SHARE (%)

SMGR

INTP SMCB BSWA ANDLS BTRJA

KPG

1. JAVA

39.1

40.5

18.4

2.0 -

2. SUMATERA

45.5

13.0

13.8

3.0

16.0

9.0 -

3. SULAWESI

64.1

14.8

0.9

20.0 -

4. KALIMANTAN

51.0

28.6

11.3

9.0 -

5. NUSA TENGGR.

41.9

31.8

3.7

16.5 -

6.0 6. EASTERN IND.

53.6

24.3

0.8

21.1 -

TOTAL

INDONESIA

43.7

30.9

14.3

5.3

3.4

1.9

0.3 

SG

SP

ST

1

2

3

4

5

6 21.5%

7.1%

7.9%

5.9 2.4%

Java

55.2%

Sumatera

Cement Distribution (5M 2013)

Domestic Market Share (5M-2013)

(12)

Together We Build a Better Future

*) Source: Indonesia Cement Association, un-audited figures

AREA

5M 2013

5M 2012

CHANGE (%)

Jakarta

2,177,464

2,033,529

7.1 Banten

1,382,750

1,256,732

10.0 West Java

3,288,320

3,038,365

8.2 Central Java

2,578,205

2,256,123

14.3 Yogyakarta

368,214

310,430

18.6 East Java

2,869,734

2,647,113

8.4 Total Java

12,664,688

11,542,291

9.7 Sumatera

4,932,070

4,896,337

0.7 Kalimantan

1,803,045

1,678,952

7.4 Sulawesi

1,622,599

1,617,705

0.3 Nusa Tenggara

1,355,331

1,154,576

17.4 Maluku & Papua

556,752

512,975

8.5 TOTAL

INDONESIA

22,934,485

21,402,837

7.2 Export Cement

85,240

43,508

95.9 Export Clinker

21,467

100,416

(78.6)

Total Export

106,707 143,924

(25.9)

GRAND TOTAL

23,041,192

21,546,761

6.9 5M 2013

–

Domestic Consumption

(mio tons)

DESCRIPTION

5M-13

5M-12

CHANGE (%)

DOMESTIC

10,017,522

8,512,926

17.7 Gresik

5,190,159

4,259,574

21.8 Padang

2,796,549

2,582,087

8.3 Tonasa

2,030,813

1,671,265

21.5 EXPORT

89,907

29,246

207.4 GRAND TOTAL

10,107,429

8,542,172

18.3 Industry Sales Type (mio tons)

5M-13

5M-12

YoY Change

Bag

18.2 (79.5%)

17.4 (81.7%)

4.6%

Bulk

4.7 (20.5%)

3.9 (18.3%)

20.5%

5M 2013 - SMGR Sales Volume

(million tons)

(13)

COMPANY PROFILE

SMGR Corporate Presentation

June 2013

(14)



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%



1995 : Acquisition of PT Semen Padang (Persero) and PT Semen Tonasa (Persero)



1998 : Cemex became a strategic partner, Market Cap.: IDR4.9tn



2006 : Blue Valley Holdings bought

Cemex’s

24.9% stake in SMGR, Market Cap.: IDR21.5tn



2010 : In March 31, Blue Valley Holdings sold all of its stake ownership in SMGR, Market Cap per April 30, 2010: IDR72.1tn



2011 : Total installed capacity of 20.00mm tons, Market Cap per June 29, 2012: IDR67.0tn



2012 : Acquisition of Thang Long Cement Vietnam, Total installed capacity of 2.3mm tons, Market Cap Dec 19

_{, 2012: IDR91.9tn}

BRIEF HISTORY

0.0

5.0

10.0

15.0

20.0

25.0

30.0 1957

-

1970

-

1980

-

198419851986

-

1990

-

199519971998

-

2006200720082009201020112012

SMGR CAPACITY BUILD-OUT (MM TONS)

Pre-consolidated capacity

Post-consolidated capacity

Installed capacity: 25.3 mio tons (2012)

including TLCC

_

(15)

Public

The Government of the Republic of Indonesia

PT Semen Indonesia (Persero) Tbk.

PT Semen Padang

PT Semen Tonasa

OWNERSHIP STRUCTURE

¹ As of Dec 18, 2012

51.01%

48.99%

99.99%

Name

Activities

% Ownership

1. Igasar

Cement distribution & Trading

12.00%

2. Sepatim B

General trading, cement packaging 85.00%

3. Bima SA

General trading, cement packaging 80.00%

4. SUPS

Cement Packaging

10.00%

Name

Activities

% Ownership

1. UTSG

Limestone & Clay Mining

55.00%

2. IKSG

Cement Packaging

60.00%

3. KIG

Industrial Estate

65.00%

4. Swadaya Gra Steel fabrication, contractor

25.00%

5. Varia Usaha

Transport and general trading

24.90%

6. Eternit Gresik Building materials

17.60%

7. SGG Prima Coal Trading Coal

99.99%

8. SGG Prima Beton Ready Mix Concrete

99.99%

Thang Long Cement, VN

70.00%

PT Semen Gresik

Name

Activities

% Ownership

1. UTSG

Limestone & Clay Mining

55.00%

2. IKSG

Packaging Paper

60.00%

3. KIG

Industrial Estate

65.00%

4. Swadaya Graha Conyractor & Machine Fabricator 25.00%

5. Varia Usaha

Transport and general trading 24.90%

6. Eternit Gresik Building materials 17.60%

7. SGG Energy Prima Coal Mining and Trading

97.00%

8. SGG Prima Beton Ready Mix Concrete

99.99%

(16)



Total production 2012: 22.8 mn tons and targetted 2013 domestic: 26.0 mn tons and TLCC: 2.0 mn tons



Operate 8 special sea ports: Padang, Tuban, Gresik, Biringkassi, Dumai, Ciwandan, Banyuwangi and Sorong



20 large packing plants: Aceh, Belawan, Padang, Dumai, Batam, Ciwandan (2 Units), Tanjung Priok, Tuban,

Gresik, Banyuwangi, Banjarmasin, Samarinda, Celukan Bawang, Tonasa, Makassar, Palu, Bitung, Ambon and

Sorong



Supported by warehouses in all areas of Java, Bali, Sumatra, Kalimantan, Sulawesi and Papua



Nationwide distribution networks

SMGR’s PRODUCTION FACILITIES ARE WELL SUPPORTED BY

STRATEGICALLY LOCATED MARKETING AND DISTRIBUTION FACILITIES

Teluk Bayur Sumatera Kalimantan Sulawesi Maluku Papua Lombok Bali Java Batam Ciwandan

Tanjung Priok Jakarta

Samarinda Banjarmasin Palu Bitung Ambon Makassar Biringkasi Bali Tabanan Denpasar Singarajan DI Yogyakarta Lempuyangan Janti Central Java Tegal Purwokerto Kudus Magelang Solo/Palur Alas Tuwo Mojopahit Sayung West Java Serang Tangerang Bogor Cibitung Bandung Tasik Malaya Cirebon Narogong Belawan Singapore Kuala Lumpur Tuban Surabaya Cement Plant Packing Plant Port Warehouse East Java Margomulyo Tanjung Wangi Bangkalan Swabina Aceh Pelabuhan Tuban Pelabuhan Gresik

Installed Cap.:

6.4 mn tons

Installed Cap.:

14.0 mn tons

Installed Cap.:

7.3 mn tons

Gresik

Sorong Pontianak

(17)

FINANCIAL UPDATE

SMGR Corporate Presentation

June 2013

(18)

EBITDA

(Rp billion)

NET INCOME

(Rp billion)

EBITDA Margin

(%)

FY07

FY08

FY09

FY10

FY11

FY12

29.7

31.7

33.2

34.6

33.0

35.0 NET INCOME Margin

(%)

FY07

FY08

FY09

FY10

FY11

FY12

18.5

20.7

23.1

25.3

24.0

24.7 4,970

4,773

3,867

2,849

2,234

6.869

0

1.000

2.000

3.000

4.000

5.000

6.000

7.000 2007

2008

2009

2010

2011

2012

4847

3,633

3,326

2,524

1,775

1,296

0

1.000

2.000

3.000

4.000

5.000 2007

2008

2009

2010

2011

2012

Description

(Rp bn)

FY 2011

FY 2012

Change

(%)

Net Revenue

16,379

19,598

19.7 Cost of Revenue

8,892

10,300

15.8 Gross Profit

7,487

9,297

24.2 Operating Expenses

2,595

3,116

20.1 Operating Income

4,892

6,181

26.4 EBITDA

2)

_5,402

_6,869

_27.2

Net Income

3,925

4,847

23.5 EPS (Rp)

662

817

23.5

(19)

Description

(Rp bn)

1Q

2012

1Q

2013

Change

(%)

Net Revenue

4.284 5,584

29.4 Cost of Revenue

2,362

3,058

29.5 Gross Profit

1,922

2,484

29.3 Operating Expenses

669

879

31.6 Operating Income

1,254

1,605

28.0 EBITDA

1,410

1,862

32.0 Net Income

1,011

1,236

22.3 EPS (Rp)

170

208

22.3 Ratio (%)

Formula

1Q

2012

1Q

2013

Ebitda margin

Ebitda / Revenue

32.9

33.6 Interest coverage (x)

Ebitda / Interest expense

258.3

24.7 Cost ratio

[COGS + Opex] / Revenue

70,7

71,2

Total debt to equity *) Total debt / Total equity

48.5

44.0 Total debt to asset *)

Total debt / Total asset

29,7

31.7 *) Total debt calculated from interest bearing debt

(20)

Cash balance (IDR bn)

Total debt (IDR bn)

3,905

3,682

₃₃₁₇

3,846

5,283

2008

2009

2010

2011

2012

3,850

251

199

686 1,871

2008

2009

2010

2011

2012

* Include short term investment

Debt/EBITDA

Return on Assets

0,06x

2,00x

0,35x

0,04x

0,14x

0.56x

2008

2009

2010

2011

2012

The projected adjusted debt/EBITDA of 2.0x and

operating margin below 20-%23% to maintain rating

level from Moody’s Investors Service.

18.2%

24.0%

25.8%

23.5%

_20.1%

2008

2009

2010

2011

2012

(21)

50%

55%

50%

_45%

2007

2008

2009

2010

2011

2012

Average: 50%

SMGR DIVIDEND PAY OUT RATIO IN THE LAST 6 YEARS

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

REGULAR DIVIDEND PAYMENTS WITH ATTRACTIVE YIELD

887,7

1261,7

1829,5 1816,7

1962,7

2181,3

0,0

500,0

1000,0

1500,0

2000,0

2500,0

2007 2008

2009

2010

2011

2012

Total Dividen Pay Out

(22)

STRATEGIC PROJECTS

SMGR Corporate Presentation

June 2013

(23)

SMGR

THE OVERALL

STRATEGY

COMBINES

6 CRITICAL

ELEMENTS

1. Undertake Capacity Growth

2. Manage Energy Security

3. Enhance Company Image

4. Move Closer To The Customer

5. Enable Corporate Growth

6. Manage Key Risks

(24)

Tuban’s ie

Pyroprocessing Tonasa V

Jetty Extension Area

T

u

b

a

n

T

o

n

a

sa

Tona

sa

ESP Power Plant

These strategic projects will ensure sustainability of

the Company’s market leadership

Preheater Tuban IV

Raw Mill Dept. Tonasa V

New Plants

Location

Capacity

(mn tons)

Investment

(US$ mn)

Construction

Start

Completed

Indarung VI-SumBar

3.0

352 2013

Q4-2015

Rembang-Java 2

3.0

403 2013

Q2-2016

TOTAL CAPEX

6.0

755

(25)

17,1

18

19 20,2

25,3

30 31,8

33,3

39,3

40,8

2007 2008 2009 2010 2011 2012 2013 2014F 2015F 2016F 2017F

Installed Capacity

(26)

2

3

1 Packing plants

Sea port

Warehouses

SMGR's existing plant locations

TLCC

–

Existing plants

TLCC

–

Expansion projects

Potential synergies in:

-

Investment

-

Production,

-

Marketing,

-

Procurement,

-

etc.

(27)

1995

2003-5

Thn

2011

1991

GO PUBLIC

The process of consolidation of

SP, SG and ST through the

acquisition method.

• Implementation of

Synergy & Practice GCG

program consistently.

Business

Expansion

IPO (SG became the

first state-owned

Enterprise to go

public on IDX).

1

2

3

4 Background changes Company Name:

PT Semen Gresik (Persero). Tbk PT Semen Indonesia (Persero) Tbk.

Post-Acquisition

Consolidated

_{and Synergy}

Business

Expansion

SG

Operating Holding

Functional Holding

Strategic Holding

1. Creates Strategic Holding, to Enhance Competitiveness and to Increase Bargaining Power

2. Separates and Optimize the Role or Function of Holding and Operating Co.

3. Tax Considerations, in order to implement the Best Form of Holding

4. Support the Future Company Vision

5. Faces Challenging Environment and Business Competition

6. Optimize Performance through increased Consolidation and Synergy

Operating Company

Independent Company

(28)

CONCLUSION: WHY SMGR?

SMGR Corporate Presentation

June 2013

(29)

Outstanding performance

Experienced

management

team

Conservative

capital

structure and

financial

policies

Robust cash flow

generation

Outstanding

business

performance

Favorable

industry

outlook



Outstanding business performance

–

Leading cement player in Indonesia with over 43.% market share based on

sales volume for 4M-2013 and approximately 41% share of total installed

cement capacity (Source: Indonesia Cement Association (“ASI”))

–

Strategically plants location is close to key markets throughout the country

–

As of Dec 2012, acquired Thang Long Cement Company, Vietnam by 70%

share with installed capacity 2.3 mio tons per annum

–

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

–

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

Strengths of SMGR

SMGR’s COMPARATIVE & COMPETITIVE ADVANTAGE DRIVE

S SMGR TO BE

THE MARKET LEADER IN INDONESIA

(30)

Main Office: Semen Gresik Tower Jln. Veteran Gresik 61122 – Indonesia Phone: (62-31) 3981731 -2, 3981745 Fax: (62-31) 3983209, 3972264

Jakarta Office:

The East Building, 18th_Floor,

Jln. DR. Ide Anak Agung Gde Agung Kav. E3.2 No.1, Mega Kuningan, Jakarta 12950 – Indonesia

Phone : (62-21) 5261174 – 5 Fax : (62-21) 5261176

www.semenindonesia.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 Indonesia (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 Indonesia (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 Indonesia (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)

17,1

18

19 20,2

25,3

30 31,8

33,3

39,3

40,8

2007 2008 2009 2010 2011 2012 2013 2014F 2015F 2016F 2017F

Installed Capacity

(2)

2

3

1 Packing plants

Sea port

Warehouses

SMGR's existing plant locations

TLCC

–

Existing plants

TLCC

–

Expansion projects

Potential synergies in:

-

Investment

-

Production,

-

Marketing,

-

Procurement,

-

etc.

(3)

1995

2003-5

Thn

2011

1991

GO PUBLIC

The process of consolidation of

SP, SG and ST through the

acquisition method.

• Implementation of

Synergy & Practice GCG

program consistently.

Business

Expansion

IPO (SG became the

first state-owned

Enterprise to go

public on IDX).

1

2

3

4 Background changes Company Name:

PT Semen Gresik (Persero). Tbk PT Semen Indonesia (Persero) Tbk.

Post-Acquisition

Consolidated

_{and Synergy}

Business

Expansion

SG

Operating Holding

Functional Holding

Strategic Holding

1. Creates Strategic Holding, to Enhance Competitiveness and to Increase Bargaining Power

2. Separates and Optimize the Role or Function of Holding and Operating Co.

3. Tax Considerations, in order to implement the Best Form of Holding

4. Support the Future Company Vision

5. Faces Challenging Environment and Business Competition

6. Optimize Performance through increased Consolidation and Synergy

Operating Company

Independent Company

(4)

CONCLUSION: WHY SMGR?

SMGR Corporate Presentation

June 2013

(5)

Outstanding performance

Experienced

management

team

Conservative

capital

structure and

financial

policies

Robust cash flow

generation

Outstanding

business

performance

Favorable

industry

outlook



Outstanding business performance

–

Leading cement player in Indonesia with over 43.% market share based on

sales volume for 4M-2013 and approximately 41% share of total installed

cement capacity (Source: Indonesia Cement Association (“ASI”))

–

Strategically plants location is close to key markets throughout the country

–

As of Dec 2012, acquired Thang Long Cement Company, Vietnam by 70%

share with installed capacity 2.3 mio tons per annum

–

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

–

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

Strengths of SMGR

SMGR’s COMPARATIVE & COMPETITIVE ADVANTAGE DRIVE

S SMGR TO BE

(6)

Main Office: Semen Gresik Tower Jln. Veteran Gresik 61122 – Indonesia Phone: (62-31) 3981731 -2, 3981745 Fax: (62-31) 3983209, 3972264

Jakarta Office:

The East Building, 18th_Floor,

Jln. DR. Ide Anak Agung Gde Agung Kav. E3.2 No.1, Mega Kuningan, Jakarta 12950 – Indonesia

Phone : (62-21) 5261174 – 5 Fax : (62-21) 5261176

www.semenindonesia.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;

● 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