Leading Towards the Future
Leading Towards the Future
Leading Towards the Future
March 2008
AGENDA
I.
Indonesia Cement Highlights
II.
Corporat e Pr of il e
III. Financial Perf ormance
IV. St rat egi c Ini t iat ives
• Total Installed National Cap.:
45.07 mn tons/year (EoY 07)
• Domestic utilization rate per
Dec. 2007: 75.83%
Singapore Kual a Lumpur
SGG
*)
Semen Andalas Indonesia
Lhok Nga, Nanggroe Aceh D.
Cap. 1.4 mn tons (under plant reconstruction)
Indocement Tunggal Perkasa
Jakarta
Cap. 15.65 mn tons
Semen Tonasa
Pangkep, South Sulawesi
Cap. 3.5 mn tons
Semen Padang
Indarung, West Sumatera
Cap. 5.4 mn tons
Holcim Indonesia
Jakarta
Cap. 8.7 mn tons
Semen Bosowa Maros
Maros, South Sulawesi
Cap. 1.8 mn tons
Semen Baturaja
Palembang, South Sumatera
Cap. 1.25 mn tons
Semen Gresik
Gresik/Tuban, East Java
Cap. 8.2 mn tons
Semen Kupang
Kupang, East Nusa Tenggara
Cap. 0.57 mn tons
1.
INDUSTRY STRUCTURE AND PLANTS LOCATION
*)
Semen Gresik
Group
*)
Semen Gresik
AGENDA
I.
Indonesia Cement Highl ight s
II.
Corporat e Profile
III. Financial Perf ormance
IV. St rat egi c Ini t iat ives
SGG IS THE #1 CEMENT COMPANY IN INDONESIA
Founded August 1957 by the first
President of the Republic of Indonesia
Capacit y: 250, 000 t ons per annum (“ t pa” )
July 1991, Initial Public
Offering—listed on the
Jakarta Stock Exchange and
Surabaya Stock Exchange
Government of Republ ic of
Indonesia: 73%, Publ ic: 27%
Capacit y: 1. 8mn t pa
EoY market cap:
Rp 0. 63tn
Cemex S. A. de C. V. ("Cemex")
became a strategic partner by
buying a 14% stake
GoI: 51%, Publ ic: 35%, Cemex:
14%
Capacit y: 17. 3mn t pa
EoY market cap:
Rp 4. 9tn
September 1999, Cemex upsized its
stake to 26%
GoI: 51%, Publ ic: 23%, Cemex: 26%
Valley” ) bought Cemex’ s
24. 9% stake in SGG
Blue Valley: 25%
Capacit y: 17. 1mn t pa
EoY market cap:
Rp 33. 2tn
Rights Issue
Acquisition of Semen Padang and
Semen Tonasa
GoI: 65%, Publ ic: 35%
Capacit y: 8. 5mn t pa
Distribution warehouses in all areas of Java, Bali, Sumatra, Kalimantan, Sulawesi and Irian
15 large packing plants
Nationwide distribution network
Operate 4 special sea ports: Padang, Tuban, Gresik, Biringkassi
Total installed cap. EoY 2007: 17.1 mn tons
SGG’ s PRODUCTION FACILITIES ARE WELL SUPPORTED BY STRATEGICALLY
LOCATED MARKETING AND DISTRIBUTION FACILITIES
Teluk
Banj ar masin
Palu Singar aj an
DI Yogyakart a
Lempuyangan Jant i
Cent ral Java
Tegal Kual a Lumpur
Tuban
Surabaya
Cement Pl ant
Packi ng Pl ant
Port
Warehouse
East Java
Mar gomulyo Tanj ung Wangi
Bangkalan Swabina Aleh
Pelabuhan Tuban
Pelabuhan Gr esik
Ot hers
8. 1%
Player 2
19. 3%
Player 1
34. 7%
Semen
Gresi k
18. 2%
Semen
Padang
11. 9%
Semen
Tonasa
7. 8%
CAPACITY SHARE — 2007
CAPACITY SHARE — 2007
Semen
Tonasa
8. 6%
Ot hers
10. 2%
Semen
Padang
14. 2%
Semen
Gresi k
21. 6%
Player 1
30. 9%
Player 2
14. 6%
Total = 45. 07 mn tons
SGG
Tot al 37. 9%
SGG
Tot al 44. 4%
MARKET LEADER IN TERMS OF REVENUE AND CAPACITY SHARE
Highest revenue/ available capacit y among peers
Leading market share for t he past several years
Total = 34. 2 mn tons
DOMESTIC MARKET SHARE — 2007
DOMESTIC MARKET SHARE — 2007
SEMEN GRESIK’ S STOCK PRICE HAS CONTINUED TO PERFORM
Vol ume (per 10, 000)
Price (Rp/ share)
JCI (Jakart a Composi t e Index) i s r ebased t o Semen Gresi k shar e pri ce
Not e: US$1= IDR 9, 393 as per Dec. 28, 2007; Semen Gr esi k pri ces adj ust ed t o st ock spl i t
Key market data IDR USD
Current share price 5, 600 0. 60 52 week high 6, 200 0. 66 52 week low 3, 500 0. 37 Market cap (EoY 07) 33, 217bn 3, 536mm
St ock Spl it
St ock Spl it
US Subprime
crisis
US Subprime
crisis
1, 000
2, 000
3, 000
4, 000
5, 000
6, 000
7, 000
Jan-07
Feb-07
Mar-07
May-07
Jun-07
Jul-07
Sep-07
Oct -07
Dec-07
Jan-08
0
500
1, 000
1, 500
2, 000
2, 500
3, 000
3, 500
SMGR
JCI
AGENDA
I.
Indonesia Cement Highl ight s
II.
Corporat e Pr of il e
III. Financial Performance
IV. St rat egi c Ini t iat ives
FINANCIAL HIGHLIGHTS
OVER THE YEARS, SGG HAS EXPERIENCED ROBUST EARNINGS GROWTH …
OVER THE YEARS, SGG HAS EXPERIENCED ROBUST EARNINGS GROWTH …
5,172
5,450
6,068
7,532
8,728
9,601
2002
2003
2004
2005
2006
2007
•
Net Revenues
(Bn Rp)
2,397
1,779
1,539
980
929
749
2002
2003
2004
2005
2006
2007
•
Operating Income
(Bn Rp)
2,855
2,234
1,999
1,412
1,386
1,186
2002
2003
2004
2005
2006
2007
•
EBITDA
(Bn Rp)
1,775
1,296
1,002
509
373
151
2002
2003
2004
2005
2006
2007
•
Net Income
(Bn Rp)
26.79
23.56
22.43
13.97
11.17
4.86
2002
2003
2004
2005
2006
2007
•
Return on Equity
(%)
27.09
34.80
61.80
81.30
95.00
117.20
2002
2003
2004
2005
2006
2007
…. RESULTING IN RISING PROFITS AND IMPROVING MARGINS
Gross pr ofit
EBITDA
Net income
PROFITABILITY TREND (Rp Bn)
PROFITABILITY TREND (Rp Bn)
CAGR
(03-07)
20%
21%
47%
PROFIT MARGINS—LAST 5 YEARS
PROFIT MARGINS—LAST 5 YEARS
4 1 . 7%
Sour ce: I/ B/ E/ S mean est i m at es
Not e: Act ual numbers ar e report ed number on t he year of announcement
SUSTAINABLE EPS GROWTH VS. ANALYST ESTIMATES
SUSTAINABLE EPS GROWTH VS. ANALYST ESTIMATES
SGG HAS BEEN ABLE TO OUTPERFORM MARKET EXPECTATIONS
ACT
UAL
EP
S C
AGR
(20
02-
200
6) 4
8%
590
514
743
1, 206
2, 147
255
628
858
1,689
2, 184
0
500
1,000
1,500
2,000
2,500
2002
2003
2004
2005
2006
Consensus analyst EPS fore cast s
Act ual EPS
AGENDA
I.
Indonesian Cement Highl ight s
II.
Corporat e Pr of il e
III. Financial Perf ormance
IV. Strategic Initiatives
SGG 5-YEAR CORPORATE STRATEGY
Product
Pr oduct development
Pr oduct Di ver si f i cat i on
Capacit y & Energy Management
Debot t lenecking / Opt imiz at ion
New Plant
Pow er Plant
New Plant
Power Plant Debot t lenecking /
Opt imizat ion
Organizat ion Capit al
Corpor at e rest ruct ur ing
Subsidiaries & Af filiat es r est ruct uring
Effect ive holding
Inf ormat ion Capit al
Inf or mat i on & Communi cat i on Technol ogy
Syst em Management
Indust ry landscape scenario
Brand equit y st rengt he ning
Cust omer value pr oposit ion
Compet it ive advant age
20 06 2 00 7 20 0 8 2 0 09 20 1 0 Onw ards
Consolidat ing leadership posit ion
Eff iciency
Synergy
Human Capit al
Human Resour ce Compet enci es
2 0 11
Int ense
compet it ion
(Pot ent ial) New ent rant s
2 01 2
Br and
Init iat ives
Revenue management
Cost management
Capacity management
Increasing
competitive advantage
Maint ain market
share
Increase
operat ing margin
Market share opt imizat ion
Margin opt imizat ion
Raw mat erial
Maint enance cost s
Yiel d
improvement
Energy suppl y
al t ernat ives
Raw mat erial
Maint enance
cost s
Yiel d/ ut il izat ion
Maximize
ut il izat ion
Capacit y opt imizat ion
Capacit y expansion
Corporat e rest ruct uring
Human resource compet encies
Management Inf or mat ion Syst ems (MIS)
Profitability
And
Sustainable
growt h
ACTIVITY
ACTIVITY
NEAR TERM INITIATIVES
NEAR TERM INITIATIVES
LONG TERM INITIATIVES
LONG TERM INITIATIVES
ULTIMATE OBJECTIVE
ULTIMATE OBJECTIVE
CURRENT PRODUCT MOVEMENT
CROSS-BAGGING INITIATIVE
CURRENT PRODUCT MOVEMENT
CROSS-BAGGING INITIATIVE
The cross bagging init iat ive wil l resul t in a dif f erent movement of product t o
t he market wit hout changing t he f inal brand l eading t o
Lesser t ime t o market
Logist ics cost savi ngs
Cost savings i n t ransport at ion, packaging, invent ory and raw mat erial
procurement t hrough increased coordinat ion among t he various uni t s;
pot ent ial t o reduce t ransport at ion cost s
1
COORDINATED GROUP NEGOTIATIONS
COORDINATED GROUP NEGOTIATIONS
2
In t he past t arget market s
were served predominant l y by
one of t hree compani es–but
overl ap market s exist in Java,
Bal i and Kal imant an l eading
t o high t r ansport at i on cost s in
t hose areas
16.9
16. 9
16.9
16.9
1. 5
16.9
17. 1
17.7
0. 8
0.2
18.4
15.0
16.0
17.0
18.0
19.0
2006
2007
2008
2009
Inst alled base capacit y
Increment al capacit y f rom de-bot t lenecking/ opt imizat ion plans
4
3
t o set up capt ive power suppl y
Rat ional e f or cont rol l ing of power vs. cur rent suppl y
The Company needs rel iabl e and cost ef f ect ive energy/
power suppl y
Expect ed t o l ead t o l ower operat ing cost s and minimize
l oss of product ion capacit y
Capt ive power suppl y are est imat ed t o provide
signif icant cost savings
CAPACITY ESTIMATES (MILLION TONS)
CAPACITY ESTIMATES (MILLION TONS)
SET UP POWER SUPPLY TO CONTROL ENERGY COSTS
SET UP POWER SUPPLY TO CONTROL ENERGY COSTS
17. 1
17. 7
18. 4
18. 4
18. 4
18. 4
18. 4
18. 4
1.84. 0 4. 8 5.0
2007
2008
2009
2010
2011
2012
2013
2014
DOMESTIC CAPACITY BUILD-OUT (MILLION TONS)
DOMESTIC CAPACITY BUILD-OUT (MILLION TONS)
Base capaci t y New capaci t y
Current capacit y of SGG is in l ine wi t h our t arget t o
maint ain l eading market shar e posit ion
To st rengt hen t his posi t ion we are const r uct ing new
cement pl ant s (2 x 2. 5 mi o t ons of cement ) t o expand
capaci t y t o meet domest ic and export demand
Pl ant s are t arget ed t o come onl ine st ar t ing 2011
Addit ional capacit y wil l hel p diversif y market base, bot h
domest ic and export market
17. 1 17. 7
18. 4 18. 4
20. 2
22. 4 23. 2
GREENFIELD/ BROWNFIELD PROJECTS
DOMESTIC CAPACITY EXPANSION
DOMESTIC CAPACITY EXPANSION
SUMARY OF SMGR’ s PROJECTS IN 5-YEAR DOWN THE ROADS
Power Plants
Location
Investment
US$/ Tons
New Plants
AGENDA
I.
Indonesian Cement Highl ight s
II.
Corporat e Pr of il e
III. Financial Perf ormance
IV. St rat egi c Ini t iat ives
3 0. 7
30. 7
33 . 2
3 3. 9
3 3. 0
35 . 1
27. 2
27 . 5
30. 2
31. 5
32 . 1
3 4. 2
5 . 6 %
4. 7%
5. 1%
5 . 4 %
4 . 4 %
6 . 3%
-5. 0
5. 0
15. 0
25. 0
35. 0
45. 0
55. 0
65. 0
200 2
20 03
200 4
200 5
20 06
FY 2 007 (E)
0. 0%
1. 0%
2. 0%
3. 0%
4. 0%
5. 0%
6. 0%
7. 0%
Source: Indonesi an Cem ent Associ at i on, *) Court esy of Bahana Resear ch Inst i t ut e (P)
Cement Product ion
Domest ic consumpt ion
GDP growt h %
(mio t ons)
*)
*)
Growth:
5.8%
Growth:
1.1%
Growth:
9.7%
Growth:
4.2%
Growth:
1.8%
Growth:
6.6%
INDONESIA HAS EXPERIENCED SOLID ECONOMIC AND DOMESTIC CEMENT
CONSUMPTION GROWTH
SGG has highest overal l capacit y
The ut il izat ion rat es are t he best in
t he l ocal indust ry
Wide geogr aphical cover age t hrough
dispersed f act ories
COMPARISON WITH PEERS (Cement Product ion – 2007)
COMPARISON WITH PEERS (Cement Product ion – 2007)
Semen Gresik (SG)
Semen Padang (SP)
Semen Tonasa (ST)
Company name Locat ion Capacit y (mm t on) Ut ilizat ion*)(%)
Semen Gresik
Gresik & Tuban, East Java
8. 2
Semen Padang
Indarung, West Sumat era
5. 4
Semen Tonasa
Pangkep, Sout h Sulawesi
3. 5
SGG – Tot al Capacit y
Padang, Gresik/ Tuban, Pangkep
17. 1
89%
Player 1
Cit eureup (W-Java) , Tarj un (Sout h Kalimant an) 15. 65
Player 2
Narogong, Cilacap, Cent ral Java
8. 70
Ot hers
NA
3. 62
Industry
45. 0 7
76%
MARKET DINAMICS
KEY HIGHLIGHTS
KEY HIGHLIGHTS
*)Domest i c Ut i l i zat i on
SGG’ s BRANDS LEAD INDONESIA’ s TOP MARKETS
Sour ce: Indonesi a Cem ent Associ at i on
SGG ’ s brands are wel l-recognized t hroughout Indonesia
Dominant market posit ion in Indonesia’ s t op t hree market s which comprise 88% of t ot al
domest ic consumpt ion
St rong brand l oyalt y al l ows Semen Gresik t o dominat e East Java wit h 73% market share
Market share by maj or market FY2007
Sumatera
Sulawesi
Java
Sulawesi t ot al: 2. 07mn t ons
Indocement
12. 7%
Semen Bosowa
19. 4%
SGG 67. 9%
SGG 49. 1%
Semen Andalas
17. 4%
Indocement
15. 3%
Ot her 18. 2%
SGG 37. 3%
Holcim 22%
Indocement
39. 3%
Ot her 1. 4%
Java t ot al: 19. 66mn t ons
Sumatera t ot al:
8. 04mn tons
Kalimant an tot al: 1. 98mn tons
Indocem ent 28. 6%
Semen Bosow a 4. 1%
SGG 61%
SGG HAS STRONGER CREDIT METRICS VS. ITS PEERS
DEBT/ EQUITY
DEBT/ EQUITY
0. 5 x
Cement Corp, Laf arge Mal ayanRegional peer median (2006): 1. 9x
Regional peer median (2006): 0. 7x
0.00
Ratio
1.60
1.40
3.00
2.40
3.90
5.00
2002
2003
2004
2005
2006
2007
PRICE TO BOOK VALUE (2002 – 2007)
PRICE TO BOOK VALUE (2002 – 2007)
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:
Graha Irama Building, 11
thFloor,
Jln. HR Rasuna Said, Kuningan, Jakarta 12950 – Indonesia
Phone : (62-21) 5261174 – 5
Fax
: (62-21) 5261176
www.semengresik.com
T h a n k y o u
T h a n k y o u
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
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