SMGR CORP PRESENTATION September 2012 NDR US final

(1)

Corporat e Present at ion

Sept ember 2012

THE PROSPECT OF

INDONESIAN CEMENT INDUSTRY

THE PROSPECT OF

INDONESIAN CEMENT INDUSTRY

±

40%

Domestic

Market

(2)

1 INDONESIA’ S CEMENT INDUSTRY: NOW and THE FUTURE

SMGR Corporat e Present at ion

(3)

2 1. SMGR

22. 5 mn t on

- Semen Padang :

6. 4 mn t on

- Semen Gresik :

11. 4 mn t on

- Semen Tonasa :

4. 7 mn t on

2. Semen Andalas

2)

_{1. 6 mn t on}

3. Semen Bat uraj a

1. 3 mn t on

4. Indocement TP

18. 6 mn t on

5. Holcim Indonesia

8. 5 mn t on

6. Semen Bosowa

4. 8 mn t on

7. Semen Kupang

0. 5 mn t on

TOTAL

57. 8 mn ton

CEMENT INDUSTRY AT A GLANCE

• Design Capacity

: 54. 4 mio tons

57. 8 mio tons

64. 8 mio tons

• Production Capacity

: 51. 0 mio tons

55. 4 mio tons

61. 2 mio tons

• Domestic Growth

: 17. 7%

14. 0%

10. 0%

• Domestic Utilization

: 94%

98%

• Total Utilization

: 96%

99%

• Supply



Domestic

: 48. 0 mio tons

54. 7 mio tons

60. 1 mio tons



Export

: 1. 2 mio tons

0. 07 mio tons

0. 15 mio tons



Import

: 1. 8 mio tons

1. 0 mio tons

1. 75 mio tons

1) Based on t he Company’ s f orecast

2) Import ed cement by PT Semen Andal as (1. 0 mio t on) and cl inker by Bosawa and Kupang

3) Import ed cement & cl inker

Singapore Kuala

Lum pur

SMGR

2

1

3

4

5

1

6

7 THE PLAYERS and CAPACITY (2012

)

SMGR: 22. 5 mio ton

(38% of Industry Cap. )

(4)

DOMESTIC DEMAND VS NATIONAL CAPACITY (2011 – 2017)

‘ 000 t ons

(t housand t ons)

2011

2012F

2013F

2014F

2015F

2016F

2017F



Inst al l ed Capacit y

54, 370

57, 870

64, 870

66, 170

73, 670

83, 470

112, 670



Real Product ion

50, 200

55, 400

61, 200

62, 862

69, 987

79, 297

107, 037



Domest ic Consumpt ion

48, 000

54, 720

60, 192

65, 609

71, 514

77, 950

84, 966



Domest ic Growt h

17. 70%

14%

10%

9%



Surpl us/ (Def icit )

2, 200

680 1, 008

(2, 748)

(1, 528)

1, 346

22, 071



Domest ic Ut il izat ion

96%

99%

98%

100%

98%

79%



Export

1, 200

70

150 -

100 5, 000



Tot al Ut il izat ion

98%

99%

100%

98%

84%

40, 000

60, 000

80, 000

100, 000

120, 000

2011

2012F

2013F

2014F

2015F

2016F

2017F

(5)

CEMENT CAPACITY COULD ALMOST DOUBLE IN THE NEXT 5 YEARS

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

No

Company

Targeted Plant

Location

Capacity

(mn tons)

Investment

(US$ mn)

Remarks + Local Partner

1 Siam Cement (Thail and)

West Java

2. 0

250 Greenf iel d, Sukhabumi

2 CNBM (China)

Cent ral Java

2. 6

350 Greenf iel d, Semen Grobogan

3 Bant en – Zhej iang

Bant en

2. 0

700 (?)

Pl ant rel ocat ion f rm Zhej iang t o Bant en

4 Anhui Conch Cement (China)

- Tanj ung

- Tanah Grogot

- Pont ianak

- West Papua

Various

- Sout h Kal imant an

- East Kal imant an

- West Kal imant an

- West Papua

15. 0

4. 1

2. 6

2, 350

400

600

750 Greenf iel d

5 Wil mar (Local )

West Java

1. 5

n. a

Greenf iel d

T O T A L

23. 1

3, 650

New Cement Capacity from Existing Players (2012 – 2017)

No

Company

Targeted Plant

Location

Capacity

(mn tons)

Investment

(US$ mn)

Remarks

1 Semen Gresik Group

Java, Sumat era, Sul awesi

12. 8

1, 500

Upgrading + green/ brownf iel d

2 Indocement

Java, Kal imant an

7. 0

1, 100

Cement Mil l + brown/ greenf iel d

3 Hol cim

East Java

1. 7

400 Greenf iel d

4 Bosowa

Java, Sul awesi

2. 8

300 Cement Mil l + Brownf iel d

5 Semen Andal as

Sumat era

1. 5

556 Greenf iel d

(6)

5 COMPARISON: CEMENT CONSUMPTION PER CAPITA 2011

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

199 kg

0

200

400

600

800 1000

1200

1400

1600

1800

2000

C

hin

_a

S

in

ga

po

re

M

ala

ys

_ia

Vie

tn

_am

Th

ail

_an

d

I n

do

ne

sia

I n

dia

Ph

ilip

in

_a

kg/ capit a

(7)

6

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

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)

40. 8

48. 0

34. 3

39. 1

27. 2

27. 5

30. 2

31. 5

32. 1

34. 2

38. 1

6. 10%

12. 6%

6. 40%

5. 6%

4. 7%

5. 1%

5. 4%

4. 4%

6. 3%

6. 1%

4. 60%

6. 50%

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

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

8M-12

0. 0%

10. 0%

20. 0%

Cement growt h % (RHS)

(F)

INDONESIA HAS EXPERIENCED SOLID ECONOMIC AND DOMESTIC CEMENT

CONSUMPTION GROWTH

(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

21, 0

4, 8

0

5

10

15

20

25

30

35

40 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

1H-12

Bag Consumpt i on

Bulk Consumpt i on

SO FAR INFRASTRUCTURE EXPANSION HAS BEEN RELATIVELY SLOW

Bag and Bulk cement consumpt ion (million t ons)

7

(9)

DOMESTIC MARKET CONSUMPTION (2011)

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 (inf rast ruct ure):

±

60%

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

±

35%

• Proj ect s (mort ar, render):

±

5%

• Ready-mix (inf rast ruct ure):

±

60%

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

±

35%

• Proj ect s (mort ar, render):

±

5%

• Housing:

±

90%

• Cement based indust ry:

±

10%

• Housing:

±

90%

• Cement based indust ry:

±

10%

±

(10)

9 INFRASTRUCTURE INVESTMENT ACCORDING TO MP3EI (2012 – 2017)

Corridor

Road

Railway Track

Harbor

Airport

Length (Km)

Invest

Length (Km)

Invest



Sumat era

2, 130

IDR 229 T

1, 067

IDR 70 T

IDR 1 T

IDR 4 T



Java

1, 481

IDR 203 T

336 IDR 25 T

IDR 22 T

IDR 8 T



Kal imant an

735 IDR 18 T

388 IDR 35 T

IDR 0. 5 T

IDR 3 T



Sul awesi

49 IDR 2 T

0 IDR 0. 5 T

0 

Bal i-NT

10 IDR 2 T

50 IDR 12 T

0 IDR 1 T



Papua Mal uku

1, 535

IDR 53 T

0 IDR 55 T

0 Total

5, 940

IDR 507 T

1, 841

IDR 142 T

IDR 79 T

IDR 16 T

Total Investment : IDR 744 T

Road Development Plan 5, 940 Km

Total Investment IDR 507 T

Tol l Road

Lengt h (KM)

Invest

• Sumat era

382 IDR 229 T

• Java

1, 481

IDR 203 T

• Kalimant an

84 IDR 18 T

• Sulawesi

49 IDR 2 T

• Bali-NT

10 IDR 2 T

• Papua Maluku

0 Total

2, 006

IDR 387 T

Percentage

76%

Non Tol l Road

Lengt h (KM)

Invest

• Sumat era

1, 748

IDR 56 T

• Java

0

• Kalimant an

651 IDR 11 T

• Sulawesi

0

• Bali-NT

0

• Papua Maluku

1, 535

IDR 53 T

Total

3, 934

IDR 120 T

(11)

MARKET UPDATE

SMGR Corporat e Present at ion

(12)

Region

Population

Cement

Consump-tion (ton)

Cement

Consumpt.

Per Capita

(kg)

1. JAVA

136, 563, 142

21, 996, 688

161 2. SUMATERA

50, 613, 947

9, 690, 931

191 3. SULAWESI &

MALUKU

19, 926, 385

3, 421, 522

172 4. KALIMANTAN

13, 772, 543

2, 833, 018

206 5. BALI & NUSA TENGGARA

13, 067, 599

2, 326, 931

178 6. PAPUA

3, 612, 854

513, 287

142 Tot al Indonesia

237, 556, 470

40, 782, 377

172 MARKET BY GEOGRAPHY & CEMENT CONSUMPTION PER CAPITA

Papua

Bali & N T

Kalimantan

Sulawesi

Population Distribution (2010)

Sumatera

21.3%

Java

57.5.%

8.4%

5.8%

5.5%

1.5%

11 REGION

MARKET SHARE (%)

SMGR

INTP

SMCB

BSWA ANDLS BTRJA

KPG

1. JAVA

35. 6

42. 3

20. 1

2. 0

-

-2. SUMATERA

44. 4

14. 2

13. 0

3. 0

15. 0

11. 0

-3. SULAWESI

60. 1

15. 4

1. 3

23. 0

-

-4. KALIMANTAN

43. 8

30. 7

16. 8

9. 0

-

-5. NUSA TENGGR.

32. 5

37. 6

6. 6

16. 1

-

8. 0

6. EASTERN IND.

59. 6

17. 2

1. 2

21. 7

-

-TOTAL

INDONESIA

40. 3

32. 4

15. 7

5. 5

3. 2

2. 4

0. 4



SG

SP

ST

1

2

3

4

5

6 23.0%

7.3%

7.0%

5.8%

1.6%

Java

55.2%

Sumatera

Cement Distribution (2011)

(13)

MARKET UPDATE - Cement Consumption 8M2012

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

AREA

8M 2012

8M 2011

CHANGE (%)

Jakart a

3,207,483

3,025,229

6.0 Bant en

2,030,276

1,743,273

16.5 West Java

4,997,281

4,441,052

12.5 Cent ral Java

3,816,070

3,339,706

14.3 Yogyakart a

513,188

485,560

5.7 East Java

4,296,595

3,718,259

15.6 Total Java

18,860,892

16,753,079

12.6 Sumat era

7,578,181

7,123,395

6.4 Kal imant an

2,581,785

2,147,580

20.2 Sul awesi

2,492,746

2,198,042

13.4 Nusa Tenggara

1,991,450

1,704,467

16.8 Mal uku & Papua

799,144

545,977

46.4 TOTAL

INDONESIA

34,304,199

30,472,541

12.6 Export Cement

60,690

172,732

(64.9)

Export Cl inker

100,416

607,367

(83.5)

Tot al Export

161,106

780,099

(79.3)

GRAND TOTAL

34,465,305

31,252,640

10.3 8M 2012 – Domest ic Consumpt ion

(mio tons)

DESCRIPTION

8M-12

8M-11

CHANGE (%)

DOMESTIC

13. 8

12. 3

11. 9

- GRESIK *)

- PADANG

- TONASA

6. 9

4. 1

2. 7

6. 2

3. 6

2. 4

11. 2

13. 0

12. 1

EXPORT

0. 04

0. 07

(43. 1)

GRAND TOTAL

13. 8

12. 4

11. 6

Industry Sales Type (mio tons)

1H-12

1H-11

YoY Change

Bag

21. 0 (81%)

18. 4 (82%)

14. 1%

Bul k

4. 8 (19%)

4. 0 (18%)

20. 0%

*) i ncl udi ng

458, 235

t ons cement pr oduct i on f r om Tuban

IV dur i ng commi ssi oni ng per i od of Feb - June 2012

8M 2012 - SMGR Sales Volume

(million tons)

(14)

13 COMPANY PROFILE

SMGR Corporat e Present at ion

(15)



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 April 30, 2010: IDR72. 1t n



2011 : Tot al inst al l ed capacit y of 20. 00mm t ons, Market Cap per June 29, 2012: IDR67. 0t n



2012 : Target ed t ot al inst al l ed capacit y of 22. 50mm t ons

BRIEF HISTORY

SMGR IS THE #1 CEMENT COMPANY IN INDONESIA

0,0

5,0

10,0

15,0

20,0

25,0

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

20

12 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. 1 mio t ons

Inst alled capacit y: 22. 5 mio t ons (2012)

(16)

15 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%

(17)



Tot al product ion 2011: 19. 8 mn t ons and t arget t ed 2012: 22. 5 mn t ons



Operat e 8 special sea port s: Padang, Tuban, Gresik, Biringkassi, Dumai, Ciwandan, Banyuwangi

and Sorong



19 l arge packing pl ant s: Aceh, Bel awan, Padang, Dumai, Bat am, Ciwandan, Tanj ung Priok, Tuban,

Gresik, Banyuwangi, Banj armasin, Samarinda, Cel ukan Bawang, Tonasa, Makassar, Pal u, Bit ung,

Ambon and Sorong



Support ed by warehouses in al l areas of Java, Bal i, Sumat ra, Kal imant an, Sul awesi and Papua



Nat ionwide dist ribut ion net works: 361 Dist ribut ors

SMGR’s PRODUCTION FACILITIES ARE WELL SUPPORTED BY STRATEGICALLY

LOCATED MARKETING AND DISTRIBUTION FACILITIES

(2012)

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.:

6.5 mn tons

Installed Cap.:

11.5 mn tons

Installed Cap.:

4.5 mn tons

Gresik

Sorong Pont ianak

(18)

PRODUCTION PERFORMANCE

Unit

Cement Product ion

Growt h (%)

• Semen Gresik

• Semen Padang

• Semen Tonasa

5, 143, 351

3, 254, 276

2, 030, 194

11. 5

13. 5

14. 4

TOTAL

10, 427, 821

12. 7

1H-2012

PROGNOSES 2H-2012

Unit

Prognoses Product ion

Growt h (%)

• Semen Gresik

• Semen Padang

• Semen Tonasa

6, 407, 300

3, 292, 850

2, 574, 159

23. 7

3. 0

22. 9

TOTAL

12, 274, 309

16. 3

TARGET 2013

Unit

Cement Product ion

• Semen Gresik

• Semen Padang

• Semen Tonasa

12, 800, 000

6, 500, 000

6, 300, 000

TOTAL

25, 600, 000

17 PROGNOSES 2012

Unit

Prognoses Product ion

Growt h (%)

• Semen Gresik

• Semen Padang

• Semen Tonasa

11, 550, 651

6, 547, 126

4, 604, 353

(19)

FINANCIAL UPDATE

SMGR Corporat e Present at ion

(20)

19 FINANCIAL SUMMARY: 1H-2012 RESULTS

Description (Rpbn)

_1H2011

_1H2012

Change (%)

Revenue

7, 606

8, 658

14 Cost of revenue

4, 110

4, 696

14 Gross profit

3, 496

3, 961

13 Operating expenses

1, 223

1, 364

11 Operating income

2, 301

2, 644

15 Ebitda

2, 528

2, 894

14 Profit attributable to

equity holders of

parent entity (Net

Income)

1, 873

2, 103

12 EPS (full amount)

316

355

12 EBITDA

(Rp billion)

NET INCOME

(Rp billion)

NET INCOME

(Rp billion)

EBITDA Margin

(%)

EBITDA Margin

(%)

1H-08

1H-09

1H-10

1H-11

1H-12

31. 28

31. 45

34. 13

33. 2

33. 4

NET INCOME Margin

(%)

NET INCOME Margin

(%)

1H-08

1H-09

1H-10

1H-11

1H-12

19. 94

22. 37

24. 43

24. 6

24. 3

2.894

2.528

2.273

2.129

1.782

250

650

1.050

1.450

1.850

2.250

2.650

3.050 1H-08

1H-09

1H-10

1H-11

1H-12

2103

1873

1627

1514

1136

200

450

700

950 1200

1450

1700

1950

2200

1H-08

1H-09

1H-10

1H-11

1H-12

Ratio (%)

Formula

1H

2011

1H

2012

Ebitda margin

Ebitda / Revenue

33.2

33.4 Interest coverage (x)

Ebitda / Interest expense

201.1

237.0 Cost ratio

[COGS + Opex] / Revenue

70,1

70,0

Total debt to equity *)

Total debt / Total equity

9.1

15.8 Total debt to asset *)

Total debt / Total asset

6.3

10.44

(21)

EBITDA

(Rp billion)

NET INCOME

(Rp billion)

NET INCOME

(Rp billion)

EBITDA Margin

(%)

EBITDA Margin

(%)

FY06

FY07

FY08

FY09

FY10

FY11

25. 6

29. 7

31. 7

33. 2

34. 6

32. 4

NET INCOME Margin

(%)

NET INCOME Margin

(%)

FY06

FY07

FY08

FY09

FY10

FY11

14. 8

18. 5

20. 7

23. 1

25. 3

23. 8

4,970

4,773

3,867

2,849

2,234

5.233

0

1.000

2.000

3.000

4.000

5.000

6.000 2006

2007

2008

2009

2010

2011F

3856

3,633

3,326

2,524

1,775

1,296

0

1.000

2.000

3.000

4.000 2006

2007

2008

2009

2010

2011F

Description

(Rp bn)

FY

2010

1)

FY 2011

Change

(%)

Net Revenue

14, 344

16, 379

14. 2

Cost of Revenue

7, 534

8, 892

18. 0

Gross Profit

6, 810

7, 487

9. 9

Operating Expenses

2, 300

2, 595

12. 8

Operating Income

4, 510

4, 892

8. 5

EBITDA

2)

_{4, 970}

_{5, 402}

_{8. 7}

Net Income

3, 633

3, 925

8. 0

EPS (Rp)

613

662 8. 0

FINANCIAL SUMMARY: FY2011 RESULTS

1)

Restated: related to adaption of IFRS

2)

Based on Operating Income excluded Other Operating Income (Expenses) +

Depreciation & Amortization

(22)

STRONG BALANCE SHEET AND RETURNS

Cash balance (IDR bn)

Tot al debt (IDR bn)

4390

3, 682

3, 846

3, 905

5, 283

1, 945

2, 950

2006

2007

2008

2009

2010

2011

1H2012

2, 337

1, 891

686

256

202

251

199 2006

2007

2008

2009

2010

2011 1H2012

* Include short t erm invest ment

Debt / EBIT DA

Ret urn on Asset s

0.35x

0.11x

2.00x

0.04x

0.07x

0.06x

0.13x

2006

2007

2008

2009

2010

2011

T he proj ect ed adj ust ed debt / EBIT DA of 2. 0x and

operat ing margin below 20-%23% t o maint ain rat ing

level f rom Moody’ s Invest ors Service.

(23)

50%

55%

50%

2007

2008

2009

2010

2011

Average: 51%

2.2%

3.0%

2.9%

1.5%

JSX

Top-20

*)

INTP

SMCB

SMGR

SMGR DIVIDEND PAY OUT RATIO 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 FY2011

2011 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

(24)

23 STRATEGIC PROJECTS

SMGR Corporat e Present at ion

(25)

SMGR LONG TERM STRATEGIC FOCUS

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

(26)

25 Tuban’s view

Pyroprocessing Tonasa V

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

ESP Power Plant

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

Raw M ill Dept. Tonasa V

New Plants

Location

Capacity

(mn tons)

Investment

(US$ mn)

Construction

Start

Completed

Java 1

3. 0

355 2009

Apr 2012

Sulawesi

3. 0

315 2009

Oct 2012

Sumat era

3. 0

352 2012

Q4-2015

Java 2

3. 0

403 2012

Q2-2016

Sub Total

12. 0

1, 425

Power Plants

Location

Capacity

(MW)

Investment

(US$ mn)

Construction

Start

Completed

Sulawesi

2 x 35

114 2010

May 2013

(27)

Progress of Tonasa V Cement Plant Proj ect

• Capacit y: 3. 0 mio t ons of cement

• Est imat ed Invest ment cost : USD315 million

• Proj ect complet ion: 99%

• Some main equipment s such as Cement

Grinding and Packaging (Packer) has been

operat ed (commissioning) since May 2012

• Fire on: Sept ember 16

t h

_{, 2012}

• Commissioning: Sept ember – December 2012

Progress of Tuban IV Cement Plant Proj ect

• Capacit y: 3. 0 mio t ons of cement

• Invest ment cost : USD355 million

• Fire on: April 2012

• Commissioning periode: April - June 2012

Preheater Tonasa V

Preheater Tuban IV

PROGRESS OF CEMENT & POWER PLANT PROJECTS – August 31, 2012

Progress of Power Plant Proj ect - Tonasa

• Capacit y: 2 x 35 MW

• Est imat ed Invest ment cost : USD114 million

• Proj ect progress: 92%

(28)

DESIGN CAPACITY (Mio Ton)

27 17. 1

18. 0

19. 0

20. 2

New

Capacity

New

Capacity

27. 2

25. 9

22. 5

32. 8

30. 3

Existing +

Upgrading

(29)

CAPEX PLANNING PROFILE (2012 – 2016)

Uses of f unds

Det ailed capex schedule (US$ mm)

STRATEGIC

Capacit y Expansion

1, 008

Dist ribut ion Facil it y

323 Power Pl ant s

31 De-bot t l enecking

133 Energy Conservat ion

163 Ready Mix Business

22 Human Capit al Mast er Pl an & ICT

14 Ot hers

43 NON STRATEGIC

Keep Perf ormance

465 Ef f iciency Improvement

39 Mandat ory

49

(30)

CONCLUSION: WHY SMGR?

SMGR Corporat e Present at ion

(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 41% 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

(32)

31 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)

26 Progress of Tonasa V Cement Plant Proj ect

• Capacit y: 3. 0 mio t ons of cement

• Est imat ed Invest ment cost : USD315 million

• Proj ect complet ion: 99%

• Some main equipment s such as Cement

Grinding and Packaging (Packer) has been

operat ed (commissioning) since May 2012

• Fire on: Sept ember 16

t h

_{, 2012}

• Commissioning: Sept ember – December 2012

Progress of Tuban IV Cement Plant Proj ect

• Capacit y: 3. 0 mio t ons of cement

• Invest ment cost : USD355 million

• Fire on: April 2012

• Commissioning periode: April - June 2012

Preheater Tonasa V

Preheater Tuban IV

PROGRESS OF CEMENT & POWER PLANT PROJECTS – August 31, 2012

Progress of Power Plant Proj ect - Tonasa

• Capacit y: 2 x 35 MW

• Est imat ed Invest ment cost : USD114 million

• Proj ect progress: 92%

(2)

DESIGN CAPACITY (Mio Ton)

27 17. 1

18. 0

19. 0

20. 2

New

Capacity

New

Capacity

27. 2

25. 9

22. 5

32. 8

30. 3

Existing +

Upgrading

(3)

28 CAPEX PLANNING PROFILE (2012 – 2016)

Uses of f unds

Det ailed capex schedule (US$ mm)

STRATEGIC

Capacit y Expansion

1, 008

Dist ribut ion Facil it y

323 Power Pl ant s

31 De-bot t l enecking

133 Energy Conservat ion

163 Ready Mix Business

22 Human Capit al Mast er Pl an & ICT

14 Ot hers

43 NON STRATEGIC

Keep Perf ormance

465 Ef f iciency Improvement

39 Mandat ory

49

(4)

CONCLUSION: WHY SMGR?

SMGR Corporat e Present at ion

(5)

30 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 41% 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

Strengths of SMGR

(6)

31 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;

● 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