SMGR CORP Presentation Dec 2013 NDR UK

(1)

(2)

INDONESIA’ S CEMENT INDUSTRY: NOW and THE FUTURE

SMGR Corporat e Present at ion

DECEMBER 2013

(3)

Together We Build a Better Future

2 1. SEMEN INDONESIA

27. 7 mn t on

- Semen Padang :

6. 4 mn t on

- Semen Gresik :

14. 0 mn t on

- Semen Tonasa :

7. 3 mn t on

2. Semen Andal as

2)

_{1. 6 mn t on}

3. Semen Bat uraj a

1. 3 mn t on

4. Indocement TP

20. 5 mn t on

5. Hol cim Indonesia

10. 4 mn t on

6. Semen Bosowa

6. 0 mn t on

7. Semen Kupang

0. 5 mn t on

TOTAL

68. 0 mn ton

• Design Capacity

: 60. 2 mio tons

68. 0 mio tons

74. 0 mio tons

• Production Capacity

: 54. 2 mio tons

60. 7 mio tons

66. 6 mio tons

• Domestic Growth

: 14. 5%

6. 0%

• Domestic Utilization

: 100%

99%

98%

• 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 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 DOMESTIC CAPACITY (2013

)

CEMENT INDUSTRY

2012

2013F

1)

_2014F

1)

CEMENT INDUSTRY AT A GLANCE

(4)

‘ 000 t ons

ton(‘000)

2012

2013F

2014F

2015F

2016F

2017F

Installed Capacit y

60,270

68,000

74,000

84,700

100,300

103,300

Real Product ion

54,243

60,724

66,600

71,995

80,240

87,805

Consumpt ion

54,964

58,262

61,758

65,463

69,391

73,554

Surplus/ (deficit )

-721

2,462

4,842

6,532

10,849

14,251

Domest ic Ut ilizat ion

100%

96%

93%

91%

86%

84%

Export

200

500

200 Domest ic

Consumpt ion Grow t h

14.50%

6%

DOMESTIC DEMAND VS NATIONAL CAPACITY (2012 – 2017)

0 20, 000

40, 000

60, 000

80, 000

100, 000

120, 000

2012

2013F

2014F

2015F

2016F

2017F

(5)

Together We Build a Better Future

4

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

223 kg

0

200

400

600

800 1. 000

1. 200

1. 400

1. 600

1. 800

C

hin

_a

S

in

ga

po

re

M

ala

ys

_ia

V

ie

tn

am

Th

ail

_an

d

I n

do

ne

sia

Ph

ilip

es

I n

dia

kg/ capit a

(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

54. 9

52. 7

39. 1

27. 2

27. 5

30. 2

31. 5

32. 1

34. 2

38. 1

6. 10%

5. 90%

6. 80%

5. 6%

4. 7%

5. 1%

5. 4%

4. 4%

6. 3%

6. 1%

4. 60%

6. 50%

5. 8%

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

11M2013

0. 0%

10. 0%

20. 0%

Cement growt h % (RHS)

(A)

INDONESIA’ S SOLID ECONOMIC AND DOMESTIC CEMENT CONSUMPTION

GROWTH

(7)

Together We Build a Better Future

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

41. 6

11. 0

0

5

10

15

20

25

30

35

40

45 1997

1999

2001

2003

2005

2007

2009

2011

11M2013

Bagged Cement

Bulk Cement

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

6 Source: Indonesia Cement Association and the Company’s data

(8)

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

consumer of cement in Indonesia

Bag

80%

Bulk

20%

Key Drivers of Domestic cement demand:

• Nat ional Economic Growt h

• Favorable Int erest Rat e Environment

• Infrast ruct ure Expansion

• Per Capit a Consumpt ion 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%

±

Source: Int ernal Research

(9)

Together We Build a Better Future

8 MARKET UPDATE

SMGR Corporat e Present at ion

DECEMBER 2013

(10)

Papua

Bali & N T

Sulawesi

Kalimantan

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. 3

39. 8

18. 8

2. 0

-

-2. SUMATERA

45. 1

12. 7

13. 5

3. 0

16. 0

10. 0

-3. KALIMANTAN

52. 3

27. 9

10. 7

9. 0

-

-4. SULAWESI

63. 9

13. 6

0. 9

22. 0

-

-5. NUSA TENGGR.

41. 4

33. 1

3. 6

15. 5

-

6. 0

6. EASTERN IND.

56. 1

22. 3

0. 9

21. 8

-

-TOTAL

INDONESIA

43. 8

30. 5

14. 5

5. 3

3. 3

2. 1

0. 4



SG

SP

ST

1

2

3

4

5

6 21.0%

7.6%

7.4%

5.8 2.1%

Java

56.3%

Sumatera

Cement Distribution (11M 2013)

Domest ic Market Share (11M-2013)

(11)

Together We Build a Better Future

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

10 AREA

11M 2013

11M 2012

CHANGE (%)

Jakart a

4, 874, 570

4, 618, 989

5. 5

Bant en

3, 145, 866

2, 902, 347

8. 4

West Java

7, 806, 852

7, 402, 019

5. 5

Cent ral Java

6, 230, 001

5, 628, 201

10. 7

Yogyakart a

892, 129

753, 396

18. 4

East Java

6, 711, 738

6, 319, 985

6. 2

Tot al Java

29, 661, 156

27, 624, 937

7. 4

Sumat era

11, 080, 958

10, 868, 295

2. 0

Kal imant an

3, 980, 800

3, 694, 290

7. 8

Sul awesi

3, 876, 790

3, 717, 612

4. 3

Nusa Tenggara

3, 033, 322

2, 848, 126

6. 5

Mal uku & Papua

1, 091, 160

1, 099, 775

(0. 8)

TOTAL

INDONESIA

52, 724, 187

49, 853, 035

5. 8

Export Cement

164, 818

111, 261

48. 1

Export Cl inker

396, 934

100, 416

295. 3

Tot al Export

561, 752

211, 677

165. 4

GRAND TOTAL

53, 285, 938

50, 064, 712

6. 4

11M 2013 – Domest ic Consumpt ion

(mio tons)

DESCRIPTION

11M-13

11M-12

CHANGE

(%)

DOMESTIC

23, 095, 160

20, 356, 276

13. 5

Semen Indonesia

12, 015, 958

10, 328, 517

16. 3

Semen Padang

6, 298, 093

5, 944, 672

5. 9

Semen Tonasa

4, 781, 108

4, 083, 087

17. 1

EXPORT

317, 556

72, 946

335. 3

GRAND TOTAL

23, 412, 716

20, 429, 222

14. 6

Industry Sales Type (mio tons)

11M-13

11M-12

YoY Change

Bag

41. 6 (79. 0%)

40. 1 (80. 6%)

3. 8%

Bul k

11. 0 (21. 0%)

9. 6 (19. 4%)

14. 6%

11M 2013 - SMGR Sales Volume

(million tons)

MARKET UPDATE - Cement Consumption 11M-2013

SMGR Sales Type (mio tons)

11M-13

11M-12

YoY Change

Bag

17. 6 (76. 4%)

16. 0 (78. 9%)

10. 1%

Bul k

5. 4 (23. 6%)

4. 2 (21. 1%)

27. 1%

(12)

COMPANY PROFILE

SMGR Corporat e Present at ion

DECEMBER 2013

(13)

Together We Build a Better Future

12 

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 : Acquisit ion of Thang Long Cement Viet nam, Tot al inst al l ed capacit y of 2. 3mm t ons, Market Cap Dec 19

t h

_{, 2012: IDR91. 9t n}

BRIEF HISTORY

0.0

5.0

10.0

15.0

20.0

25.0

30.0

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 -consolidat ed capacit y

Inst al l ed capacit y: 25. 3 mio t ons (2012)

incl uding TLCC

_

(14)

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

Act ivit ies

% Ownership

1. Igasar

Cement dist ribut ion & Trading

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%

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 fabricat 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%

7. SGG Prima Coal Trading Coal

99. 99%

8. SGG Prima Bet on Ready Mix Concret e

99. 99%

Thang Long Cement, VN

70. 00%

Name

Act ivit ies

% Ownership

1. UTSG

Limest one & Clay Mining

55. 00%

2. IKSG

Packaging Paper

60. 00%

3. KIG

Indust rial Est at e

65. 00%

4. Swadaya Graha Cont ract or & Machine Fabricat or 25. 00%

5. Varia Usaha

Transport and general t rading

24. 90%

6. Et ernit Gresik

Building mat erials

17. 60%

7. SGG Energy Prima Coal Mining and Trading

97. 00%

8. SGG Prima Bet on

Ready Mix Concret e

99. 99%

(15)

Competitiveness of Semen Indonesia

Integrated Cement Plant

4 location

Kil n

13 Unit

Cement Mil l

22 Unit

Grinding Plant

2 location

Cement Mil l

4 Unit

Warehouse

30 location

Packing Plant

21 location

Sea Port

11 location

Kiln

1 unit

Cement

Mill

1 unit

Kiln

4 unit

Cement

Mill

6 unit

Kiln

4 unit

Cement

Mill

9 unit

Grinding

Plant

1 unit Cement

Mill

Kiln

4 unit

Cement

Mill

6 unit

Grinding

Plant

3 unit Cement

Mill

(16)

FINANCIAL UPDATE

SMGR Corporat e Present at ion

DECEMBER 2013

(17)

Together We Build a Better Future

16 EBITDA (Rp bil l ion)

NET INCOME (Rp bil l ion)

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

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

FINANCIAL SUMMARY: FY2012 RESULTS

4847

3,925

3,633

3,326

2,524

1,775

0 1,000

2,000

3,000

4,000

5,000

2007

2008

2009

2010

2011

2012

5,402

4,970

4,773

3,867

2,849

6,869

0 1,000

2,000

3,000

4,000

5,000

6,000

7,000

(18)

FINANCIAL SUMMARY: 9M-2013 RESULTS

EBIT DA (Rp billion)

NET INCOME (Rp billion)

EBIT DA Margin (%)

9M-09

9M-10

9M-11

9M-12

9M-13

32. 5%

34. 5%

32. 8%

34. 6%

33. 6%

NET INCOME Margin (%)

Description

(Rpbn)

9M-2012

9M-2013

Change

(%)

Revenue

13,677

17,391

27.2%

Cost of revenue

7,260

9,551

31.5%

Gross profit

6,407

7,840

22.4%

Operating

expenses

2,188

2,794

27.7%

Operating

income

4,275

5,104

19.4%

Ebitda

4,728

5,838

23.5%

Net Income

3,389

3,906

15.3%

EPS (full

amount)

571

659 15,3%

3,906

2,408

2,522

2,761

3,389

0

500 1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

9M09

9M10

9M11

9M2012 9M2013

9M-09

9M-10

9M-11

9M-12

9M-13

23. 1%

24. 5%

23. 8%

24. 8%

22. 5%

5,838

4,728

3,805

3,546

3,379

0 1,000

2,000

3,000

4,000

5,000

6,000

7,000

9M09

9M10

9M11

9M12

9M13

Ratio (%)

Formula

9M

2012

9M

2013

Ebit da margin

Ebit da / Revenue

34. 6

33. 6

Int erest coverage (x)

Ebit da / Int erest

expense

262. 5

25. 15

Cost rat io

[ COGS + Opex] /

Revenue

69. 1

71. 0

Tot al debt t o equit y *)

Tot al debt / Tot al

equit y

16. 7

20. 3

(19)

Together We Build a Better Future

Cash balance (IDR bn)

Total debt (IDR bn)

2, 650

3, 905

3, 682

_{3, 317}

3, 846

5, 283

2008

2009

2010

2011

2012

9M2013

4, 012

3, 850

251

199

686 1, 871

2008

2009

2010

2011

2012

9M2013

* Include short t erm invest ment

Debt/ EBITDA

Return on Assets

0.06x

2.00x

0.35x

0.04x

0.14x

0.56x

2008

2009

2010

2011

2012

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

maint ain rat ing level f rom Moody’ s Invest ors

Service.

18. 2%

24. 0%

25. 8%

23. 5%

20. 1%

2008

2009

2010

2011

2012

18

(20)

50%

55%

50%

_45%

2007

2008

2009

2010

2011

2012

Average: 50%

SMGR DIVIDEND PAY OUT RAT IO IN T HE LAST 6 YEARS

REGULAR DIVIDENDS



Key det erminant s of

dividend policy:

• Hist orical dividend payout

t rends

• Comparison wit h peers

• Proj ect ed cash-flows

available for dividends

(aft er t aking int o account

pot ent ial expansionary

capex et c)

• Analyst and invest or

expect at ions

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

Tot al Dividen Pay Out

(21)

Together We Build a Better Future

20 STRATEGIC PROJECTS

SMGR Corporat e Present at ion

DECEMBER 2013

(22)

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

6. Manage Key Risks

(23)

Together We Build a Better Future

22 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 Pow er Plant

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

Indarung VI-SumBar

3. 0

352 2013

Q4-2015

Rembang-Java 2

3. 0

403 2013

Q2-2016

TOTAL CAPEX

6. 0

755

(24)

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

(25)

Together We Build a Better Future

CONCLUSION: WHY SMGR?

SMGR Corporat e Present at ion

DECEMBER 2013

(26)

Out st anding 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 pl ayer in Indonesia wit h over 43. 8% market share based on

sal es vol ume f or 10M-2013 and approximat el y 41% share of t ot al inst al l ed

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

–

St rat egical l y pl ant s l ocat ion is cl ose t o key market s t hroughout t he count ry

–

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

share wit h inst al l ed capacit y 2. 3 mio t ons per annum

–

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

SMGR’s COMPARATIVE & COMPETITIVE ADVANTAGE DRIVES SMGR TO BE

THE MARKET LEADER IN INDONESIA

(27)

Together We Build a Better Future

26 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, 18

_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)

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

6. Manage Key Risks

(2)

Tuban’s view

Pyroprocessing Tonasa V

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

Preheater Tuban IV

Raw M ill 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

(3)

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

(4)

CONCLUSION: WHY SMGR?

SMGR Corporat e Present at ion

(5)

Out st anding 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 pl ayer in Indonesia wit h over 43. 8% market share based on

sal es vol ume f or 10M-2013 and approximat el y 41% share of t ot al inst al l ed

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

–

St rat egical l y pl ant s l ocat ion is cl ose t o key market s t hroughout t he count ry

–

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

share wit h inst al l ed capacit y 2. 3 mio t ons per annum

–

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

Strengths of SMGR

SMGR’s COMPARATIVE & COMPETITIVE ADVANTAGE DRIVES SMGR TO BE

THE MARKET LEADER IN INDONESIA

(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, 18

_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