Semen indonesia

1. Together We Build a Better Future 0

2. Together We Build a Better Future 1
INDONESIA’S CEMENT INDUSTRY: NOW and THE FUTURE
SMGR Corporate Presentation
FEBRUARY 2014

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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% 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 0.5 mio tons
 Import : 3.3 mio tons2) 3.0 mio tons 3) 3.0 mio tons3)
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
Singapore
Kuala Lumpur
SMGR
2
1
3
4
5
1
1
6
7
DOMESTIC CAPACITY (2014)
CEMENT INDUSTRY 2013 2014F 1) 2015F 1)
CEMENT INDUSTRY AT A GLANCE
2

4. Together We Build a Better Future
‘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%
100%
94%
89%
86%
Export
500
500
500
500
500
Domestic Consumption Growth
5.5%
6%
6%
6%
6% 3
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
Design Capacity
Real Production
Consumption Cement

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4
Source: Deutsche, Indonesia Cement Association
229
kg
02004006008001,0001,2001,4001,6001,8002,000 ChinaSingaporeVietnamThailandIndonesiaPhilippinesIndia kg/capita
COMPARISON: CEMENT CONSUMPTION PER CAPITA 2013

6. Together We Build a Better Future
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)
40.848.054.958.04.639.127.227.530.231.532.134.238.16.10%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% 0.010.020.030.040.050.060.02002200320042005200620072008200920102011201220131M20140.0% 10.0% 20.0%
Cement growth % (RHS)
(A)
5
INDONESIA’S SOLID ECONOMIC AND DOMESTIC CEMENT CONSUMPTION GROWTH
-0.2%

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21.06.518.11.016.91.920.02.322.73.023.73.523.73.825.25.025.56.026.95.128.26.032.25.932.86.234.26.639.28.844.110.845.712.23.60.9051015202530354045199719992001200320052007200920112013Bagged CementBulk Cement
Bag and Bulk cement consumption (million tons)
6
Source: Indonesia Cement Association and the Company’s data
SO FAR INFRASTRUCTURE EXPANSION RELATIVELY SLOW

8. Together We Build a Better Future
Retail (residential) sector is the largest consumer of cement in Indonesia
7
Bag79% Bulk21%
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
DOMESTIC MARKET CONSUMPTION (2013)

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MARKET UPDATE
SMGR Corporate Presentation
FEBRUARY 2014

10. Together We Build a Better Future
Papua Bali & N T Sulawesi Kalimantan
Population Distribution (2012)
Sumatera
21.3%
Java 57.5.%
8.4%
5.8%
5.5%
1.5%
9
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)
Domestic Market Share (1M2014)
MARKET BY GEOGRAPHY

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*) Source: Indonesia Cement Association, un-audited figures
10
AREA
1M 2014
1M 2013
CHANGE (%)
Jakarta
410,452
423,150
(3.0)
Banten
233,769
300,383
(22.2)
West Java
706,800
655,042
7.9
Central Java
498,328
545,375
(8.6)
Yogyakarta
82,713
83,223
(0.6)
East Java
616,914
593,256
4.0
Total Java
2,548,976
2,600,429
(2.0)
Sumatera
1,021,724
1,031,750
(1.0)
Kalimantan
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
-
-
-
Total Export
3,755
6,189
(39.3)
GRAND TOTAL
4,642,804
4,654,796
(0.3)
1M 2014 – Domestic Consumption (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 Consumption 1M2014
SMGR Sales Type (mio tons)
1M-14
1M-13
YoY Change
Bag
1.54 (75.5%)
1.59 (78.2%)
(3.2%)
Bulk
0.50 (24.5%)
0.44 (21.8%)
12.6%

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COMPANY PROFILE
SMGR Corporate Presentation
FEBRUARY 2014

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
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 19th, 2012: IDR91.9tn
BRIEF HISTORY
0.05.010.015.020.025.030.0 1957- 1970- 1980- 198419851986- 1990- 199519971998- 2006200720082009201020112012
SMGR CAPACITY BUILD-OUT (MM TONS)
Pre-consolidated capacity
Post-consolidated capacity
Installed capacity: 25.3 mio tons (2012)
including TLCC
_
_
_
_
_
_
SMGR IS THE #1 CEMENT COMPANY IN INDONESIA

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13
Public
The Government of the Republic of Indonesia
PT Semen Indonesia (Persero) Tbk.
PT Semen Padang
PT Semen Tonasa
OWNERSHIP STRUCTURE1
¹ As of Dec 18, 2012
51.01%
48.99%
99.99%
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

15. Competitiveness of Semen Indonesia
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
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. Together We Build a Better Future 15
FINANCIAL UPDATE
SMGR Corporate Presentation
FEBRUARY 2014

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16
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
EBITDA2)
5,402
6,869
27.2
Net Income
3,925
4,847
23.5
EPS (Rp)
662
817
23.5
FINANCIAL SUMMARY: FY2012 RESULTS 48473,9253,6333,3262,5241,77501,0002,0003,0004,0005,0002007200820092010201120125,4024,9704,7733,8672,8496,86901,0002,0003,0004,0005,0006,0007,000200720082009201020112012

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FINANCIAL SUMMARY: 9M-2013 RESULTS
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%
3,9062,4082,5222,7613,38905001,0001,5002,0002,5003,0003,5004,0004,5005,0009M099M109M119M20129M2013
9M-09
9M-10
9M-11
9M-12
9M-13
23.1%
24.5%
23.8%
24.8%
22.5% 5,8384,7283,8053,5463,37901,0002,0003,0004,0005,0006,0007,0009M099M109M119M129M13
Ratio (%)
Formula
9M 2012
9M 2013
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

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Cash balance (IDR bn)
Total debt (IDR bn)
2,6503,9053,3173,6823,8465,283200820092010201120129M20134,0123,8502511996861,871200820092010201120129M2013
* Include short term investment
Debt/EBITDA
Return on Assets
0.06x2.00x0.35x0.04x0.14x0.56x20082009201020112012
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% 20082009201020112012
18
STRONG BALANCE SHEET AND RETURNS

20. Together We Build a Better Future 19
50%50%55%50%45%50% 200720082009201020112012
Average: 50%
SMGR DIVIDEND PAY OUT RATIO IN THE LAST 6 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
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
Total Dividen Pay Out
total dividen (IDR billion)

21. Together We Build a Better Future 20
STRATEGIC PROJECTS
SMGR Corporate Presentation
FEBRUARY 2014

22. Together We Build a Better Future 21
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
SMGR LONG TERM STRATEGIC FOCUS

23. Together We Build a Better Future 22
Tuban’s view
Pyroprocessing Tonasa V
Jetty Extension Area
Tuban
Tonasa
Tonasa
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
TOTAL CAPEX
6.0
755
CEMENT PLANTS PROJECTS

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23
17.118191920.225.33031.833.339.340.820072008200920102011201220132014F2015F2016F2017FInstalled Capacity
INSTALLED CAPACITY (Mio Ton)

25. Together We Build a Better Future
CONCLUSION: WHY SMGR?
SMGR Corporate Presentation
FEBRUARY 2014
24

26. Together We Build a Better Future
25
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 44% market share based on sales volume for 1M2014 and approximately 42% 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 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.