02. SMGR Corp Presentation April 2012

(1)

Corporat e Present at ion

April 2012

THE PROSPECT OF

INDONESIAN CEMENT INDUSTRY

THE PROSPECT OF

INDONESIAN CEMENT INDUSTRY

±

40%

Domest ic

Market



_SP



SG

(2)

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 Andal as

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. 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

56. 8 mn ton

CEMENT INDUSTRY AT A GLANCE

• Design Capacity

: 54. 4 mio ton

56. 9 mio ton

63. 9 mio ton

• Domestic Growth

: 17. 7%

7. 0%

6. 0%

• Domestic Utilization

: 89%

90%

86%

• Total Utilization

: 91%

92%

88%

• Supply



Domestic

: 48. 0 mio ton

51. 4 mio ton

54. 5 mio ton



Export

: 1. 2 mio ton

1. 0 mio ton

1. 5 mio ton



Import

: 1. 8 mio ton

_{1. 5 mio ton}

_{1. 0 mio ton}

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 SMGR

3) Import ed cement & cl inker

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 (2012

)

SMGR: 22. 5 mio ton

(38% of Industry Cap. )

CEMENT INDUSTRY

2011

2012F

1)

_2013F

1)

(4)

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

V

ie

tn

am

Th

ail

_an

d

I n

do

ne

sia

I n

dia

Ph

ilip

in

_a

kg/ capit a

(5)

4

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)

4 0. 8

4 8. 0

1 2 . 5

39 . 1

27 . 2

27 . 5

3 0. 2

3 1. 5

3 2. 1

34 . 2

3 8 . 1

6. 10%

6. 40%

1 8. 2 %

5. 6%

4. 7%

5. 1%

5. 4%

4. 4%

6. 3%

6. 1%

4. 60%

6. 50%

6 . 0 %

1 1 . 5%

4 . 2%

9. 7 %

2 . 5%

6 . 6 %

1 . 8%

1. 1 %

5 . 8%

1 7 . 7 %

0. 0

1 0. 0

2 0. 0

3 0. 0

4 0. 0

5 0. 0

20 0 2

20 03

2 0 04

2 0 05

20 0 6

20 0 7

20 0 8

2 00 9

2 01 0

20 1 1

Mar -12

0 . 0%

1 0. 0 %

2 0. 0 %

Cement growt h % (RHS)

(F)

INDONESIA HAS EXPERIENCED SOLID ECONOMIC AND DOMESTIC CEMENT

CONSUMPTION GROWTH

(6)

DOMESTIC MARKET CONSUMPTION (2011)

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%

±

(7)

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

0

5

10

15

20

25

30

35

40 1997 1998

1999

2000

2001 2002

2003

2004

2005

2006 2007

2008

2009

2010 2011

Bag Consumpt i on

Bulk Consumpt i on

SO FAR INFRASTRUCTURE EXPANSION HAS BEEN RELATIVELY SLOW

Bag and Bul k cement consumpt ion 1997 – 2011 (mil l ion t ons)

6

(8)

Region

Populat ion

Cement

Consump-t ion (Consump-t on)

Cement

Consumpt .

Per Capit a

(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 (FY2011)

Papua

Bali & N T

Kalimantan

Sulawesi

Populat ion Dist ribut ion (2010)

Sumatera

21.3%

Java

57.5.%

8.4%

5.8%

5.5%

1.5%

REGION

MARKET SHARE (%)

SMGR

INTP

SMCB

BSWA ANDLS

BTRJA

1. JAVA

36. 2

40. 7

20. 8

2. 0

-

0. 01

2. SUMATERA

43. 1

15. 5

11. 7

3. 0

16. 0

11. 0

3. SULAWESI

60. 1

13. 6

1. 1

25. 0

-

-4. KALIMANTAN

47. 6

28. 9

14. 1

9. 0

-

-5. NUSA TENGGR.

37. 2

36. 9

4. 5

19. 6

-

-6. EASTERN IND.

62. 2

17. 3

0. 5

20. 3

-

-TOTAL

INDONESIA

40. 8

31. 5

15. 6

5. 8

3. 6

2. 6



SG

SP

ST

1

2

3

4

5

6 23.0%

7.3%

7.0%

5.8%

1.6%

Java

55.2%

Sumatera

Cement Dist ribut ion (2011)

(9)

8 DOMESTIC DEMAND VS NATIONAL CAPACITY

40.800

48.000

51.400

54.400

57.700

61.200

64.900

39.100

0 1 0 .0 0 0 2 0 .0 0 0 3 0 .0 0 0 4 0 .0 0 0 5 0 .0 0 0 6 0 .0 0 0

2 0 0 9 2 0 1 0 2 0 1 1 2 0 1 2 2 0 1 3 2 0 1 4 2 0 1 5 2 0 1 6

TAHUN

INSTALLED CAPACITY REAL PRODUCTION CEMENT CONSUMPTION

2.5%

6.0%

17.7%

7.0%

Real &

Proj ect ed

Growt h

6.0%

Domest ic

Consumpt ion

Domest ic

Consumpt ion

(10)

COMPANY PROFILE

SMGR Corporat e Present at ion

(11)

10 

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 Jan 31, 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

(12)

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%

(13)

12 

Tot al product ion capacit y EoY 2011: 19. 8 mn t ons and t arget t ed EoY 2012: 22. 2 mn t ons



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



35 distribution warehouses in all areas of Java, Bali, Sumatra, Kalimantan, Sulawesi and Papua



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



19 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

(14)

STRONG BALANCE SHEET AND RETURNS

Cash balance (IDR bn)

Total debt (IDR bn)

3. 350

3. 836

3. 902

5. 283

1. 929

2. 939

2006

2007

2008

2009

2010

2011F

1. 601

660

224 ₁₅₉

₁₈₀

₁₅₁

2006

2007

2008

2009

2010

2011F

* Include short t erm invest ment

Debt/ EBITDA

Return on Assets

20,8%

17,3%

23,4%

23,8%

25,7%

19.5%

2006

2007

2008

2009

2010

2011F

0,31x

0,10x

0,06x

0,05x

_0,03x

0.13x

2006

2007

2008

2009

2010

2010F

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.

*)

(15)

14 50%

55%

50%

2006

2007

2008

2009

2010

Average: 51%

2, 0%

1, 6%

3, 2%

1. 0%

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 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

(16)

MARKET UPDATE

SMGR Corporat e Present at ion

(17)

MARKET UPDATE - Cement Consumption FY2011 and 3M2012

DESCRIPTION

2011

2010

CHANGE

(%)

DOMESTIC

19, 59

17, 64

11. 1

EXPORT

0. 12

0. 29

(56. 2)

GRAND TOTAL

19, 71

17, 93

10. 0

FY 2011 – Cement Consumpt ion

(mio tons)

Java

26, 51

21, 99

20. 5

Sumat era

11, 02

9, 69

13. 8

Kalimant an

3, 36

2, 83

18. 6

Sulawesi

3, 52

3, 04

15. 7

Nusa Tenggara

2, 77

2, 32

19. 4

Maluku & Papua

0, 78

0, 88

(10. 9)

TOTAL IND.

48, 00

40, 78

17. 7

Export Semen

0, 25

0, 77

(67. 5)

Export Clinker

0, 99

2, 10

(52. 6)

Tot al Export

1, 25

2, 88

(56. 6)

GRAND TOTAL

49, 25

43, 66

12. 8

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

16 DESCRIPTION

2012

2011

CHANGE (%)

DOMESTIC

4, 943, 861

4, 303, 635

14. 9

EXPORT

20, 354

36, 811

(44. 7)

GRAND TOTAL

4, 964, 215

4, 340, 446

14. 4

Jakart a

1, 199, 597

1, 099, 404

9. 1

Bant en

733, 205

586, 702

25. 0

West Java

1, 781, 177

1, 563, 572

13. 9

Cent ral Java

1, 294, 732

1, 079, 118

20. 0

Yogyakart a

183, 804

156, 578

17. 4

East Java

1, 537, 689

1, 254, 870

22. 5

Tot al Java

6, 730, 203

5, 740, 246

17. 2

Sumat era

2, 857, 383

2, 597, 582

10. 0

Kalimant an

984, 987

727, 764

35. 3

Sulawesi

987, 804

751, 536

31. 4

Nusa Tenggara

671, 045

564, 744

18. 8

Maluku & Papua

269, 825

192, 342

40. 3

TOTAL INDONESIA

12, 501, 247

10, 574, 214

18. 2

Export Cement

29, 141

75, 960

(61. 6)

Export Clinker

100, 416

324, 244

(69. 0)

Tot al Export

129, 557

400, 204

(67. 6)

GRAND TOTAL

12, 630, 804

10, 974, 417

15. 1

(18)

FINANCIAL UPDATE

SMGR Corporat e Present at ion

(19)

18 EBITDA (Rp bil l ion)

NET INCOME (Rp bil l ion)

EBITDA Margin (%)

FY06

FY07

FY08

FY09

FY10

FY11

25. 6

29. 7

31. 7

33. 2

34. 6

32. 4

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

(Rpbn)

FY-2010

FY-2011

*)

Change

(%)

Revenue

14,344

16,169

12.7 Cost of revenue

7,534

8,870

17.7 Gross profit

6,810

7,299

7.2 Operating expenses

2,321

2,576

11.0 Operating income

4,489

4,723

5.2 Ebitda

4,970

5,233

5.3 Net Income

3,633

3,856

6.1 EPS (full amount)

613

650

6.1 FINANCIAL SUMMARY: FY2011 RESULTS (F)

*)

(20)

FINANCIAL SUMMARY: 1Q-2012 RESULTS

EBITDA (Rp bil l ion)

NET INCOME (Rp bil l ion)

EBITDA Margin (%)

3M-08

3M-09

3M-10

3M-11

3M-12

34. 4%

30. 2%

34. 6%

33. 3%

32. 9%

NET INCOME Margin (%)

3M-08

3M-09

3M-10

3M-11

3M-12

20. 2%

21. 0%

24. 7%

24. 4%

23. 4%

Description

(Rpbn)

1Q2011

1Q2012

Change

(%)

Revenue

3,553

4,284

20.5 Cost of revenue

1,910

2,362

23.7 Gross profit

1,644

1,922

16.9 Operating expenses

586

669

17.4 Operating income

1,058

1,254

16.7 Ebitda

1,185

1,410

19.1 Profit attributable to

equity holders of

parent entity (Net

Income)

871 1,011

16.0 EPS (full amount)

147

170

16.0 1,410

1,185

1,125

974

881

250

500

750 1,000

1,250

1,500

3M-08

3M-09

3M-10

3M-11

3M-12

1,011

871

802

681

519

200

400

600

800 1000

1200

(21)

20 STRATEGIC PROJECTS

SMGR Corporat e Present at ion

(22)

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

(23)

22 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

Mar 2012

Sul awesi

2. 5

290 2009

Jul 2012

Sub Total

5. 0

594 Power Plants

Location

Capacity

(MW)

Investment

(US$ mn)

Construction

Start

Completed

Sul awesi

2 x 35

114 2010

Nov 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

(24)

Preheater Tonasa V

Preheater Tuban IV

Progress of Tonasa V Cement Plant Project

Progress of Tuban IV Cement Plant Project

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

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

Description

Weight

Planning

Actual

Preparat ion

0. 39%

100. 00%

Management

2. 88%

98. 75%

98. 99%

Engineering

3. 83%

100. 00%

Procurement

72. 82%

99. 67%

99. 66%

Const ruct ion

18. 03%

91. 12%

89. 64%

Commissioning

2. 05%

26. 02%

11. 10%

Total

100. 00%

96. 61%

96. 04%

Description

Weight

Planning

Actual

Preparat ion

0. 12%

100. 00%

Management

5. 58%

100. 00%

99. 98%

Engineering

4. 14%

100. 00%

Procurement

69. 41%

100. 00%

99. 88%

Const ruct ion

18. 77%

100. 00%

98. 05%

Commissioning

1. 97%

100. 00%

90. 58%

Total

100. 00%

99. 37%

Description

Weight

Planning

Act ual

Preparat ion

2. 63%

100. 00%

Management

4. 60%

76. 93%

77. 03%

Engineering

5. 75%

99. 91%

99. 62%

Procurement

55. 13%

98. 29%

95. 42%

Const ruct ion

26. 45%

80. 04%

69. 55%

Commissioning

5. 44%

3. 42%

0. 18%

(25)

DESIGN CAPACITY (Mio Ton)

15. 2

16. 7

17. 8

17. 7

19. 6

22. 5

25. 9

27. 3

30. 0

1.8

1.0

0.7 _0.3

0.1 2007

2008

2009

2010

2011

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

Based

Capacity

Based

Capacity

Up-grading

New

Capacity

New

Capacity

16. 9

3. 1

10. 3

(26)

CONCLUSION: WHY SMGR?

SMGR Corporat e Present at ion

(27)

26 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

(28)

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)

22 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

Mar 2012

Sul awesi

2. 5

290 2009

Jul 2012

Sub Total

5. 0

594 Power Plants

Location

Capacity

(MW)

Investment

(US$ mn)

Construction

Start

Completed

Sul awesi

2 x 35

114 2010

Nov 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

(2)

23 Preheater Tonasa V

Preheater Tuban IV

Progress of Tonasa V Cement Plant Project

Progress of Tuban IV Cement Plant Project

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

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

Description

Weight

Planning

Actual

Preparat ion

0. 39%

100. 00%

Management

2. 88%

98. 75%

98. 99%

Engineering

3. 83%

100. 00%

Procurement

72. 82%

99. 67%

99. 66%

Const ruct ion

18. 03%

91. 12%

89. 64%

Commissioning

2. 05%

26. 02%

11. 10%

Total

100. 00%

96. 61%

96. 04%

Description

Weight

Planning

Actual

Preparat ion

0. 12%

100. 00%

Management

5. 58%

100. 00%

99. 98%

Engineering

4. 14%

100. 00%

Procurement

69. 41%

100. 00%

99. 88%

Const ruct ion

18. 77%

100. 00%

98. 05%

Commissioning

1. 97%

100. 00%

90. 58%

Total

100. 00%

99. 37%

Description

Weight

Planning

Act ual

Preparat ion

2. 63%

100. 00%

Management

4. 60%

76. 93%

77. 03%

Engineering

5. 75%

99. 91%

99. 62%

Procurement

55. 13%

98. 29%

95. 42%

Const ruct ion

26. 45%

80. 04%

69. 55%

Commissioning

5. 44%

3. 42%

0. 18%

Total

100. 00%

87. 46%

82. 91%

(3)

DESIGN CAPACITY (Mio Ton)

15. 2

16. 7

17. 8

17. 7

19. 6

22. 5

25. 9

27. 3

30. 0

1.8

1.0

0.7 _0.3

0.1 2007

2008

2009

2010

2011

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

Based

Capacity

Based

Capacity

Up-grading

New

Capacity

New

Capacity

16. 9

3. 1

10. 3

(4)

CONCLUSION: WHY SMGR?

SMGR Corporat e Present at ion

(5)

26 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

(6)

27 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