SMGR CORP Presentation March 2014 gy

(1)

(2)

INDONESIA’S CEMENT INDUSTRY: NOW and THE FUTURE

SMGR Corporate Presentation

MARCH 2014

(3)

Singapore Kuala

Lumpur

SMGR

2

1

3

4

5

1

6

7 CEMENT INDUSTRY AT A GLANCE

2 1. SEMEN INDONESIA

29.5 mn ton

- Semen Padang :

7.3 mn ton

- Semen Gresik :

14.4 mn ton

- Semen Tonasa :

7.8 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 12.1 mn ton

6. Semen Bosowa

6.0 mn ton

7. Semen Kupang

0.5 mn ton

TOTAL

71.5 mn ton

• Design Capacity

: 68.0 mio tons

71.5 mio tons

82.2 mio tons

• Production Capacity : 55.2 mio tons

60.0 mio tons

69.8 mio tons

• Domestic Growth

: 5.5%

6.0%

• Domestic Utilization : 99%

99%

95%

• Supply



Domestic

: 58.0 mio tons

61.0 mio tons

65.8 mio tons



Export

: 0.5 mio tons

0.5 mio tons



Import

: 3.3 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

DOMESTIC CAPACITY (2014

)

(4)

‘000 tons

ton ‘000

2013

2014F

2015F

2016F

2017F

Installed Capacity

68,000

71,500

82,200

97,800

100,800

Real Production

55,200

62,205

69,870

78,240

85,680

Consumption

58,580

62,095

65,820

69,770

73,956

Surplus/(deficit)

-3,380

110 4,050

8,470

11,724

Domestic Utilization

100%

94%

89%

86%

Export

500 Domestic Consumption

Growth

5.5%

6%

DOMESTIC DEMAND VS NATIONAL CAPACITY (2013

–

2017)

0

20.000

40.000

60.000

80.000

100.000

120.000 2013

2014F

2015F

2016F

2017F

(5)

No

Company

Targeted Plant

Location

Declared Capacity

(mn tons)

Prognose Design

Capacity (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

Banten

11.5

3.0 n.a

Greenfield (PT Cemindo Gemilg)

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

3.0 2,350

400

600

750 Greenfield

5 Ultratech

Wonogiri, Centr 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 (South Sulawesi)

8 Semen Panasia

Central Java

2.0

1.5

240 Greenfield (Banyumas)

9 Jui Shin Indonesia

West Java

1.5 n.a

Greenfield (Karawang)

T O T A L

40.3

10.8 4,470

New Cement Capacity from Existing Players (2013

–

2017)

No

Company

Targeted Plant

Location

Declared Capacity

(mn tons)

Prognose Design Capacity

(mn tons)

Investment

(US$ mn)

Remarks

1 Semen

Indonesia

Java, Sumatera,

Sulawesi

11.5

9.0

970 Upgrading +

green/brownfield

2 Indocement

Java, Kalimantan

8.8

6.3 1,560 (E)

Cement Mill +

brown/greenfield

3 Holcim

East Java

3.8

3.4 680 (E)

Brown/Greenfield

4 Bosowa

Java, Sulawesi

7.9

3.4

620 Cement Mill + Brownfield

5 Semen Andalas

Sumatera

1.6

0

300 Greenfield

6 Semen Baturaja

Sumatera

2.6

1.5

325 Greenfield/Brownfield

T O T A L

36.2

23.6 4,130

(6)

Source: Deutsche, Indonesia Cement Association

229 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)

INDONESIA

’S

ECONOMY AND DOMESTIC CEMENT CONSUMPTION GROWTH

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

58,0

9,2

39,1

27,2

27,5

30,2

31,5

32,1

34,2

38,1

6,10%

_6,00%

5,70%

6,80%

5,6%

4,7%

5,1%

5,4%

4,4%

6.3%

6.1%

4.60%

6,50%

1.3%

5,5%

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

2013

2M2014

0,0%

10,0%

20,0%

(8)

0

5

10

15

20

25

30

35

40

45 1997

1999

2001

2003

2005

2007

2009

2011

2013

21,0

18,1

16,9

20,0

22,7

23,7 23,7

25,2

25,5

26,9

28,2

32,2

32,8

34,2

39,2

44,1 45,7

6,5

1,0

1,9

2,3

3,0

3,5

3,8

5,0

6,0

5,1

6,0

5,9

6,2

6,6

8,8

10,8

12,2

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

79%

Bulk

21%

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)

Together We Build a Better Future

SOURCES : DIREKTORAT JENDERAL BINA MARGA

Infrastructure Project in Corridor #1 (Trans Sumatera)

Bakaheuni - Indralaya

Indralaya - Pekanbaru

Pekanbaru - Medan

Medan - Aceh

Development Phases:

Phase I (2015-2020)

- Bakauheni-Indralaya

- Pekanbaru-Medan

Phase II (2020-2025)

- Indralaya-Pekanbaru

- Medan-Banda Aceh

- Tebing Tinggi-Sibolga

Phase III (>2025)

- Pekanbaru-Padang

- Palembang-Bengkulu

SEMEN ANADALAS

SEMEN BATURAJA

SEMEN PADANG

PACKING PLANT

5

1

2

3

4

1 Malahayati

2 Lhokseumawe

3 Medan

4 Batam

5 Dumai

Grinding Plant Dumai

Grinding Plant Lampung

1 Grinding Plant Palembang

2

1

2

(11)

MARKET UPDATE

SMGR Corporate Presentation

MARCH 2014

(12)

MARKET AND MARKET SHARE BY GEOGRAPHY

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

41.1

38.3

18.3

2.0 -

2. SUMATERA

42.5

14.2

13.1

3.0

16.0

10.0 -

3. KALIMANTAN

48.2

31.2

12.0

9.0 -

4. SULAWESI

60.5

16.8

0.9

22.0 -

5. NUSA TENGGR.

41.3

33.4

3.7

16.6 -

5.0 6. EASTERN IND.

56.6

18.3

0.8

24.3 -

TOTAL

INDONESIA

43.7

30.2

14.1

5.8

3.6

2.3

0.3 

SG

SP

ST

1

2

3

4

5

6 21.7%

7.9%

7.5%

6.2 2.0%

Java

54.7%

Sumatera

Cement Distribution (2M2014)

(13)

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

39.4

39.8

18.8

2.0 -

2. SUMATERA

45.2

12.5

13.4

2.9

15.7

10.4 -

3. KALIMANTAN

52.2

27.7

10.9

9.1 -

4. SULAWESI

64.2

13.4

0.9

21.6 -

5. NUSA TENGGR.

41.8

32.6

3.7

15.4 -

7.0 6. EASTERN IND.

56.2

21.8

0.8

21.2 -

TOTAL

INDONESIA

43.9

30.4

14.5

5.3

3.3

2.2

0.4 

SG

SP

ST

1

2

3

4

5

6 21.0%

7.6%

7.4%

5.6 2.1%

Java

56.4.%

Sumatera

Cement Distribution (FY 2013)

Domestic Market Share (FY-2013)

(14)

MARKET UPDATE - Cement Consumption 2M2014

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

AREA

2M 2014

2M 2013

CHANGE (%)

Jakarta

826,452

846,457

(2.4)

Banten

458,780

554,802

(17.3)

West Java

1,399,599

1,272,972

9.9 Central Java

958,742

1,015,038

(5.5)

Yogyakarta

147,911

148,353

(0.3)

East Java

1,224,161

1,134,561

7.9 Total Java

5,015,472

4,972,183

0.9 Sumatera

1,985,722

1,937,401

2.5 Kalimantan

725,880

693,319

4.7 Sulawesi

690,015

612,192

12.7 Nusa Tenggara

564,496

599,634

(4.3)

Maluku & Papua

180,687

240,581

(24.9)

TOTAL

INDONESIA

9,162,272

9,045,310

1.3 Export Cement

14,955

23,337

(35.9)

Export Clinker

-

Total Export

14,955

23,337

(35.9)

GRAND TOTAL

9.177,227

9,068,647

1.2 2M 2014

–

Domestic Consumption

(mio tons)

DESCRIPTION

2M-14

2M-13

CHANGE (%)

DOMESTIC

4,006,513

3,941,467

1.7 Semen Indonesia

2,124,645

2,038,679

4.2 Semen Padang

1,074,457

1,129,834

(4.9)

Semen Tonasa

807,411

772,954

4.5 EXPORT

14,955

14,537

2.9 GRAND TOTAL

4,021,468

3,956,004

1.7 Industry Sales Type (mio tons)

2M-14

2M-13

YoY Change

Bag

7.26 (79.4%)

7.24 (80.0%)

0.3%

Bulk

1.89 (20.6%)

1.81 (20.0%)

4.5%

2M 2014 - SMGR Sales Volume

(million tons)

SMGR Sales Type (mio tons)

2M-14

2M-13

YoY Change

Bag

3.05 (76.1%)

3.08 (78.1%)

1.0%

(15)

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

AREA

12M 2013

12M 2012

CHANGE (%)

Jakarta

5,379,767

5,093,517

5.6 Banten

3,474,592

3,186,377

9.0 West Java

8,615,293

8,145,885

5.8 Central Java

6,848,260

6,158,689

11.2 Yogyakarta

986,157

829,343

18.9 East Java

7,400,367

6,964,532

6.3 Total Java

32,704,304

30,378,342

7.7 Sumatera

12,182,616 12,008,597

1.4 Kalimantan

4,387,998

4,077,814

7.6 Sulawesi

4,273,766

4,111,423

3.9 Nusa Tenggara

3,255,259

3,164,283

2.9 Maluku & Papua

1,201,093 1,223,950

(1.9)

TOTAL

INDONESIA

58,005,037

54,964,407

5.5 Export Cement

178,418 115,261

54.8 Export Clinker

396,934

100,416

295.3 Total Export

575,352 215,677

166.8 GRAND TOTAL

58,580,388

55,180,084

6.2 FY 2013

–

Domestic Consumption

(mio tons)

DESCRIPTION

12M-13

12M-12

CHANGE

(%)

DOMESTIC

25,449,714

22,477,445

13.2 Semen Indonesia

13,239,252 11,398,751

16.1 Semen Padang

6,927,490 6,567,423

5.5 Semen Tonasa

5,282,971 4,511,270

17.1 EXPORT

328,756 76,956

327.3 GRAND TOTAL

25,778,470

22,554,391

14.3 Industry Sales Type (mio tons)

FY-13

FY-12

YoY Change

Bag

45.7 (78.8%)

44.0 (80.3%)

3.7%

Bulk

12.2 (21.2%)

10.8 (19.7%)

13.6%

FY 2013 - SMGR Sales Volume

(million tons)

SMGR Sales Type (mio tons)

FY-13

FY-12

YoY Change

Bag

19.4 (76.4%)

17.6 (78.7%)

10.1%

Bulk

6.0 (23.6%)

4.7 (21.3%)

26.0%

(16)

COMPANY PROFILE

SMGR Corporate Presentation

MARCH 2014

(17)



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

-

20062007200820092010201120122013

SMGR CAPACITY BUILD-OUT (Mio TONS)

Pre-consolidated capacity

Post-consolidated capacity

_

SMGR IS THE #1 CEMENT COMPANY IN INDONESIA

• Total Installed capacity: 30 million

tons (2013) including TLCC;

• Market share of Semen Indonesia in

2013 was 44% based on sales volume

• 2013 Revenues amounted to IDR 19.6

trillion (equivalent to EUR 1.2 billion),

with EBITDA margin of 35%

(18)

Public

The Government of the Republic of Indonesia

PT Semen Indonesia (Persero) Tbk.

PT Semen Padang

PT Semen Tonasa

OWNERSHIP STRUCTURE

¹ As of Jan, 2014

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%

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 Contractor & 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%

FOCUSES IN CORE BUSINESS

(19)

Integrated Cement Plant

4 location

Kiln

13 Unit

Cement Mill

22 Unit

Grinding Plant

2 location

Cement Mill

4 Unit

Warehouse

30 location

Packing Plant

22 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

(20)

FINANCIAL UPDATE

SMGR Corporate Presentation

MARCH 2014

(21)

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 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 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

2007

2008

2009

2010

2011

2012

FINANCIAL SUMMARY: FY2012 RESULTS

(22)

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 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

2007

2008

2009

2010

2011

2012

FINANCIAL SUMMARY: FY2012 RESULTS

Description

(Rp bn)

FY 2011 FY 2012

Change

(%)

H1 2013

Net Revenue

16,379

19,598

19.7%

_11,422

Cost of Revenue

8,892

10,300

15.8%

_6,275

Gross Profit

7,487

9,297

24.2%

_5,146

Operating Income

4,892

6,181

26.4%

_3,366

EBITDA

5,402

6,869

27.2%

_3,858

Net Income

3,925

4,847

23.5%

_2,584

Total Assets

19,661 26,579

35.2%

_26,713

Equity

14,615 18,165

24.3%

_18,591

Debt

1,890.7 3,846.7

103.5%

_4,141

EBITDA Margin (%)

33%

35%

-

_33.8%

(23)

EBITDA (Rp billion)

NET INCOME (Rp billion)

EBITDA 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

₂₀₁₂

9M

₂₀₁₃

9M

Ebitda margin

Ebitda / Revenue

34.6

33.6 Interest coverage (x)

Ebitda / Interest

expense

262.5

25.15 Cost ratio

[COGS + Opex] /

Revenue

69.1

71.0 Total debt to equity *)

Total debt / Total

equity

16.7

20.3 Total debt to asset *)

Total debt / Total

asset

12.1

14.5 *) Total debt calculated from interest bearing debt

(24)

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 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 to

maintain rating level from Moody’s Investors

Service.

18.2%

24.0%

25.8%

23.5%

_20.1%

2008

2009

2010

2011

2012

(25)

50%

55%

50%

_45%

2007

2008

2009

2010

2011

2012

2013

Average: 50%

SMGR DIVIDEND PAY OUT RATIO IN THE LAST 7 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

REGULAR DIVIDEND PAYMENTS WITH ATTRACTIVE YIELD

887,7

1.261,7

1.829,5 1.816,7

1.962,7

2.181,3

2.416,6

0

500 1000

1500

2000

2500

3000

2007 2008 2009 2010 2011 2012 2013

Total Dividend Payout

Total

Dividend

(IDR billion)

(26)

(27)

STRATEGIC PROJECTS

SMGR Corporate Presentation

MARCH 2014

(28)

SMGR LONG TERM STRATEGIC FOCUS

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

(29)

CEMENT PLANTS PROJECTS

Tuban’s ie

Pyroprocessing Tonasa V

Jetty Extension Area

Tu

ban

Tona

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

(30)

INSTALLED CAPACITY (Mio Ton)

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

(31)

UP GRADING CAPACITY PLAN

Year

Plant

Design Capacity

(mio tons)

Est. Time

Operation

Location

2013

New Cement Mill

1.5 Q3

Tuban

2014

New Cement Mill

0.9 Q3

Dumai

Cement Mill

0.4 Q2

Gresik Plant B

2015

New Cement Mill

1.5 Q3

Tonasa

2015

New Cement Plant

3.0 Q4

Indarung

2016

New Cement Plant

3.0 Q2

Rembang

(32)

CONCLUSION: WHY SMGR?

SMGR Corporate Presentation

MARCH 2014

(33)

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 43.8% market share based on

sales volume for 10M-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

(34)

Gresik Office: Semen Indonesia 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

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)

CEMENT PLANTS PROJECTS

Tuban’s ie

Pyroprocessing Tonasa V

Jetty Extension Area

Tu

ban

Tona

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

(2)

INSTALLED CAPACITY (Mio Ton)

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

(3)

UP GRADING CAPACITY PLAN

Year

Plant

Design Capacity

(mio tons)

Est. Time

Operation

Location

2013

New Cement Mill

1.5 Q3

Tuban

2014

New Cement Mill

0.9 Q3

Dumai

Cement Mill

0.4 Q2

Gresik Plant B

2015

New Cement Mill

1.5 Q3

Tonasa

2015

New Cement Plant

3.0 Q4

Indarung

2016

New Cement Plant

3.0 Q2

Rembang

(4)

CONCLUSION: WHY SMGR?

SMGR Corporate Presentation

MARCH 2014

(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 43.8% market share based on

sales volume for 10M-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

(6)

Gresik Office: Semen Indonesia 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

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