SMGR CORP Presentation Feb 2014

(1)

(2)

INDONESIA’ S CEMENT INDUSTRY: NOW and THE FUTURE

SMGR Corporat e Present at ion

(3)

Together We Build a Better Future

2 1. SEMEN INDONESIA

29. 5 mn t on

- Semen Padang :

7. 3 mn t on

- Semen Gresik :

14. 4 mn t on

- Semen Tonasa :

7. 8 mn t on

2. Semen Andal as

_{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 12. 1 mn t on

6. Semen Bosowa

6. 0 mn t on

7. Semen Kupang

0. 5 mn t on

TOTAL

71. 5 mn ton

• Design Capacit y

: 68. 0 mio t ons

71. 5 mio t ons

82. 2 mio t ons

• Product ion Capacit y

: 55. 2 mio t ons

60. 0 mio t ons

69. 8 mio t ons

• Domest ic Growt h

: 5. 5%

6. 0%

• Domest ic Ut ilizat ion : 99%

99%

95%

• Supply



Domest ic

: 58. 0 mio t ons

61. 0 mio t ons

65. 8 mio t ons



Export

: 0. 5 mio t ons

0. 5 mio t ons



Import

: 3. 3 mio t ons

_{3. 0 mio t ons}

1) Based on t he Company’ s f orecast

2) Import ed cement by PT Semen Andalas (1. 0 mio t on) and clinker by Bosawa and Kupang

3) Import ed cement & clinker

Singapore Kuala

Lumpur

SMGR

2

1

3

4

5

1

6

7 DOMESTIC CAPACITY (2014

)

CEMENT INDUSTRY

2013

2014F

1)

_2015F

1)

CEMENT INDUSTRY AT A GLANCE

(4)

‘ 000 t ons

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)

Together We Build a Better Future

4

Source: Deut sche, Indonesia Cement Associat ion

229 kg

0

200

400

600

800 1, 000

1, 200

1, 400

1, 600

1, 800

2, 000

C

hin

_a

S

in

ga

po

re

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

58. 0

4. 6

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%

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

1M2014

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

45. 7

12. 2

3. 6

0. 9

0

5

10

15

20

25

30

35

40

45 1997

1999

2001

2003

2005

2007

2009

2011

2013

Bagged Cement

Bul k Cement

Bag and Bulk cement consumpt ion (million 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

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 (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%

±

Source: Int ernal Research

(9)

Together We Build a Better Future

8 MARKET UPDATE

SMGR Corporat e Present at ion

(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

41. 7

37. 8 18. 5 2. 0 - - - 2. SUMATERA

44. 4

13. 9 13. 0 3. 0 16. 0 10. 0 - 3. KALIMANTAN

43. 6

34. 7 12. 2 9. 0 - - - 4. SULAWESI

59. 0

17. 1 1. 3 23. 0 - - - 5. NUSA TENGGR.

41. 3

31. 8 3. 8 17. 1 - - 6. 0 6. EASTERN IND.

59. 2

16. 3 0. 6 23. 8 - -

TOTAL

INDONESIA

44. 0

29. 9

14. 3

5. 6

3. 4

2. 1

0. 3



SG

SP

ST

1

2

3

4

5

6 22.0%

8.1%

7.5%

5.5 1.9%

Java

54.9%

Sumatera

Cement Distribution (1M2014)

Domest ic Market Share (1M2014)

(11)

Together We Build a Better Future

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

10 AREA

1M 2014

1M 2013

CHANGE (%)

Jakart a

410, 452

423, 150

(3. 0)

Bant en

233, 769

300, 383

(22. 2)

West Java

706, 800

655, 042

7. 9

Cent ral Java

498, 328

545, 375

(8. 6)

Yogyakart a

82, 713

83, 223

(0. 6)

East Java

616, 914

593, 256

4. 0

Total Java

2, 548, 976

2, 600, 429

(2. 0)

Sumat era

1, 021, 724

1, 031, 750

(1. 0)

Kalimant an

374, 557

349, 559

7. 2

Sulawesi

348, 548

286, 775

21. 5

Nusa Tenggara

256, 794

270, 774

(5. 2)

Maluku & Papua

88, 450

109, 321

(19. 1)

TOTAL

INDONESIA

4, 639, 049

4, 648, 607

(0. 2)

Export Cement

3, 755

6, 189

(39. 3)

Export Clinker

-

Tot al Export

3, 755

6, 189

(39. 3)

GRAND TOTAL

4, 642, 804

4, 654, 796

(0. 3)

1M 2014 – Domest ic Consumpt ion

(mio tons)

DESCRIPTION

1M-14

1M-13

CHANGE (%)

DOMESTIC

2, 045, 347

2, 040, 930

0. 2

Semen Indonesia

1, 092, 575

1, 068, 681

2. 2

Semen Padang

568, 079

609, 252

(6. 8)

Semen Tonasa

384, 693

362, 997

6. 0

EXPORT

3, 755

6, 189

(39. 3)

GRAND TOTAL

2, 049, 102

2, 047, 119

0. 1

Industry Sales Type (mio tons)

1M-14

1M-13

YoY Change

Bag

3. 69 (79. 3%)

3. 70 (79. 7%)

(0. 4%)

Bulk

0. 96 (20. 7%)

0. 94 (20. 3%)

2. 5%

1M 2014 - SMGR Sales Volume

(million tons)

MARKET UPDATE - Cement Consumpt ion 1M2014

SMGR Sales Type (mio tons)

1M-14

1M-13

YoY Change

Bag

1. 54 (75. 5%)

1. 59 (78. 2%)

(3. 2%)

(12)

COMPANY PROFILE

SMGR Corporat e Present at ion

(13)

Together We Build a Better Future

12 

1957 : Inaugurat ion of Gresik I, inst alled capacit y of 250, 000 t on cement per annum



1991 : Init ial Public Of f ering, Market Cap. : IDR0. 63t n, result ing shareholding st ruct ure post IPO:

● Government of Republic of Indonesia: 73%

● Public: 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 : Blue Valley Holdings bought Cemex’ s 24. 9% st ake in SMGR, Market Cap. : IDR21. 5t n



2010 : In March 31, Blue Valley Holdings sold all of it s st ake ownership in SMGR, Market Cap per April 30, 2010: IDR72. 1t n



2011 : Tot al inst alled 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 alled 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 1986

-1990

-199519971998

-2006200720082009201020112012

SMGR CAPACITY BUILD-OUT (MM TONS)

Pre-consolidat ed capacit y

Post -consolidat ed capacit y

Inst alled capacit y: 25. 3 mio t ons (2012)

including 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 Limestone & 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 Contract 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 Concrete 99. 99%

(15)

Competitiveness of Semen Indonesia

Int egrat ed Cement Plant

4 locat ion

Kil n

13 Unit

Cement Mil l

22 Unit

Grinding Plant

2 locat ion

Cement Mil l

4 Unit

Warehouse

30 locat ion

Packing Plant

21 locat ion

Sea Port

11 locat ion

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

(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

_{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)

Tot al 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

Ret urn on Asset s

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 STRONG BALANCE SHEET AND RETURNS

(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-f lows

available f or dividends

(af t 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

(22)

SMGR

THE OVERALL

STRATEGY

COMBINES

6 CRITICAL

ELEMENTS

1. Undertake Capacity Growth

2. Manage Energy Security

3. Enhance Company Image

4. Move Closer To The Customer

5. Enable Corporate Growth

6. Manage Key Risks

(23)

Together We Build a Better Future

22 Tuban’s view

Pyroprocessing Tonasa V

Jetty Extension Area

ESP Power Plant

These st rat egic proj ect s will ensure sust ainabilit y of

t he Company’ s market leadership

Preheater Tuban IV

Raw Mill Dept. Tonasa V

New Plant s

Locat ion

Capacit y

(mn t ons)

Invest ment

(US$ mn)

Const ruct ion

St art

Complet ed

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

FEBRUARY 2014

(26)

Out st anding performance

Experienced

management

t eam

Conservative

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 player in Indonesia wit h over 44% market share based on

sales volume f or 1M2014 and approximat ely 42% share of t ot al inst alled

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

–

St rat egically plant s locat ion is close 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 alled 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 erials f or cement product ion and coal f or f uel

consumpt ion

–

Concerns on environment al and Corporat e Social Responsibilit y programs t o

ensure sust ainable growt h.



Favourable industry outlook

–

Cement consumpt ion pret t y much in-line wit h Indonesian economic growt h

–

Real est at e and inf rast ruct ure proj ect s and declining int erest rat es key

demand drivers

–

High barriers t o ent ry (plant , dist ribut ion and brand invest ment cost s)

–

Disciplined invest ment on supply side



Robust cash flow generation

–

Hist orically st rong revenue, margin and price t rends

–

High plant ut ilizat ion and st rong f ocus on cost and revenue management



Conservative capital structure and financial policies

–

[ Invest ment grade-like credit met rics]

–

Conservat ive capit al st ruct ure policy; low use of leverage

–

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, 18th_Floor,

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

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

www.semenindonesia.com

THANK YOU

IMPORTANT NOTICE

THIS PRESENTATION IS NOT AND DOES NOT CONSTITUTE OR FORM PART OF, AND IS NOT MADE IN CONNECTION WITH, ANY OFFER FOR SALE OR SUBSCRIPTION OF OR SOLICITATION, RECOMMENDATION OR INVITATION OF ANY OFFER TO BUY OR SUBSCRIBE FOR ANY SECURITIES NOR SHALL IT OR ANY PART OF IT FORM THE BASIS OF OR BE RELIED ON IN CONNECTION WITH ANY CONTRACT, COMMITMENT OR INVESTMENT DECISION WHATSOEVER.

THE SLIDES USED IN THIS PRESENTATION ARE STRICTLY CONFIDENTIAL AND HAVE BEEN PREPARED AS A SUPPORT FOR ORAL DISCUSSIONS ONLY. THE INFORMATION CONTAINED IN THIS PRESENTATION IS BEING PRESENTED TO YOU SOLELY FOR YOUR INFORMATION AND MAY NOT BE REPRODUCED OR REDISTRIBUTED TO ANY OTHER PERSON, IN WHOLE OR IN PART.

This presentation includes forward-looking statements, which are based on current expectations and forecast about future events. Such statements involve known / unknown risks uncertainties and other factors, which could cause actual results to differ materially from historical results or those anticipated. Such factors include, among others:

● economic, social and political conditions in Indonesia, and the impact such conditions have on construction and infrastructure spending in Indonesia; ● the effects of competition;

● the effects of changes in laws, regulations, taxation or accounting standards or practices; ● acquisitions, divestitures and various business opportunities that we may pursue; ● changes or volatility in inflation, interest rates and foreign exchange rates;

● accidents, natural disasters or outbreaks of infectious diseases, such as avian influenza, in our markets; ● labor unrest or other similar situations; and

● the outcome of pending or threatened litigation.

We can give no assurance that our expectations will be attained.

DISCLAIMER

The information contained in this report has been taken from sources which we deem reliable. However, none of PT Semen Indonesia (Persero) Tbk and/or its affiliated companies and/or their respective employees and/or agents make any representation or warranty (express or implied) or accepts any responsibility or liability as to, or in relation to, the accuracy or completeness of the information and opinions contained in this report or as to any information contained in this report or any other such information or opinions remaining unchanged after the issue thereof. We expressly disclaim any responsibility or liability (express or implied) of PT Semen Indonesia (Persero) Tbk, its affiliated companies and their respective employees and agents whatsoever and howsoever arising (including, without limitation for any claim, proceedings, action, suits, losses, expenses, damages or costs) which may be brought against or suffered by any person as a result of acting in reliance upon the whole or any part of the contents of this report and neither PT Semen Indonesia (Persero) Tbk, its affiliated companies or their respective employees or agents accepts liability for any errors, omission or mis-statements, negligent or otherwise, in the report and any liability in respect of the report or any inaccuracy therein or omission therefrom which might otherwise arise is hereby expresses disclaimed.

(1)

SMGR

THE OVERALL

STRATEGY

COMBINES

6 CRITICAL

ELEMENTS

1. Undertake Capacity Growth

2. Manage Energy Security

3. Enhance Company Image

4. Move Closer To The Customer

5. Enable Corporate Growth

6. Manage Key Risks

(2)

Tuban’s view

Pyroprocessing Tonasa V

Preheater Tuban IV

Raw Mill Dept. Tonasa V

New Plant s

Locat ion

Capacit y

(mn t ons)

Invest ment

(US$ mn)

Const ruct ion

St art

Complet ed

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

FEBRUARY 2014

(5)

Out st anding performance

Experienced

management

t eam

Conservative

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 player in Indonesia wit h over 44% market share based on

sales volume f or 1M2014 and approximat ely 42% share of t ot al inst alled

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

–

St rat egically plant s locat ion is close 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 alled 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 erials f or cement product ion and coal f or f uel

consumpt ion

–

Concerns on environment al and Corporat e Social Responsibilit y programs t o

ensure sust ainable growt h.



Favourable industry outlook

–

Cement consumpt ion pret t y much in-line wit h Indonesian economic growt h

–

Real est at e and inf rast ruct ure proj ect s and declining int erest rat es key

demand drivers

–

High barriers t o ent ry (plant , dist ribut ion and brand invest ment cost s)

–

Disciplined invest ment on supply side



Robust cash flow generation

–

Hist orically st rong revenue, margin and price t rends

–

High plant ut ilizat ion and st rong f ocus on cost and revenue management



Conservative capital structure and financial policies

–

[ Invest ment grade-like credit met rics]

–

Conservat ive capit al st ruct ure policy; low use of leverage

–

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, 18th_Floor,

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

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

www.semenindonesia.com

THANK YOU

IMPORTANT NOTICE

● economic, social and political conditions in Indonesia, and the impact such conditions have on construction and infrastructure spending in Indonesia; ● the effects of competition;

● 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