Corporat e Present at ion
JANUARY 2012
THE PROSPECT OF
INDONESIAN CEMENT INDUSTRY
THE PROSPECT OF
INDONESIAN CEMENT INDUSTRY
±
41%
Domestic
Market
Share
SP
SG
INDONESIA’ S CEMENT INDUSTRY: NOW and THE FUTURE
SMGR Corporat e Present at ion
2
CEMENT INDUSTRY AT A GLANCE
•
Design Capacity
: 54. 4 mio ton
56. 8 mio ton
63. 9 mio ton
•
Domestic Growth
: 17. 7%
5. 0%
5. 0%
•
Domestic Utilization
: 89%
89%
83%
•
Total Utilization
: 91%
90%
85%
•
Supply
Domestic
: 48. 0 mio ton
50. 4 mio ton
53. 0 mio ton
Export
: 1. 2 mio ton
1. 0 mio ton
1. 5 mio ton
Import
: 1. 8 mio ton
2)1. 5 mio ton
3)1. 0 mio ton
3)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
THE PLAYERS and CAPACITY (2012)
SMGR: 22. 5 mio ton
(38% of Industry Cap. )
CEMENT INDUSTRY
2011
2012F
1)
2013F
1)
4
Source: Indonesian Cement Associat ion & BPS St at ist ic
Growth
Domest ic consumpt ion (LHS)
GDP growt h % (RHS)
(mio t ons)
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
DOMESTIC MARKET CONSUMPTION (2011)
Retail (residential) sector is the largest
consumer of cement in Indonesia
Bag
80%
Bulk
20%
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%
•
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%
±
±
21, 0
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 Bulk cement consumpt ion 1997 – 2011 (million t ons)
6
Region
Population
Per Capita
(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
Population Distribution (2010)
Population Distribution (2010)
Sumatera
MARKET SHARE (%)
SMGR
INTP
SMCB
BSWA ANDLS
BTRJA
1. JAVA
36. 2
40. 7
20. 8
2. 0
-
0. 01
Cement Distribution (2011)
Cement Distribution (2011)
8
DOMESTIC DEMAND VS NATIONAL CAPACITY
40.800
48.000
50.400
53.000
56.200
59.600
63.120
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
0
0
0
T
O
N
S
INSTALLED CAPACITY REAL PRODUCTION CEMENT CONSUMPTION
2.5%
6.0%
17.7%
5.0%
Real
&
Proj ected
Growth
5.0%
6.0%
6.0%
6.0%
Domestic
Consumption
COMPANY PROFILE
SMGR Corporat e Present at ion
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 March 31, 2010: IDR43. 3t n
2011 : Tot al inst al l ed capacit y of 20. 00mm t ons, Market Cap per Dec 30, 2011: IDR67. 9t n
2012 : Target ed t ot al inst al l ed capacit y of 22. 50mm t ons
BRIEF HISTORY
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)
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
Public
The Government of the Republic of Indonesia
PT Semen Gresik (Persero) Tbk.
PT Semen Padang
PT Semen Tonasa
OWNERSHIP STRUCTURE
1OWNERSHIP STRUCTURE
1FOCUSES IN CORE BUSINESS
¹ As of Apri l 09, 2010
Four subsidiaries Non-cement producers:
51. 01%
48. 99%
99. 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%
12
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
18 large packing plants
SMGR’s PRODUCTION FACILITIES ARE WELL SUPPORTED BY STRATEGICALLY
LOCATED MARKETING AND DISTRIBUTION FACILITIES
(2011)
T eluk DI Yogyakart a
Lempuyangan Jant i Cent ral Java T egal T asik Malaya Cirebon
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
3. 0%
2.7%
5.2%
4. 1%
3.2%
2006
2007
2008
2009
2010
Average: 3, 6%
2.0%
1.6%
I NTP
SMCB
SMGR
SMGR DIVIDEND YIELD IN THE LAST 5 YEARS
1)SMGR DIVIDEND YIELD IN THE LAST 5 YEARS
1)*): f or FY2010
2010 DIVIDEND YIELD
1)2010 DIVIDEND YIELD
1)REGULAR DIVIDENDS
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
14
MARKET UPDATE
SMGR Corporat e Present at ion
MARKET UPDATE - Cement Consumption FY2010 and FY2011
DESCRIPTION
2010
2009
CHANGE
(%)
DOMESTIC
17, 64
17, 82
(1. 0)
EXPORT
0. 29
0, 60
(52. 9)
GRAND TOTAL
17, 93
18, 43
(2. 8)
FY 2010 – Cement Consumpt ion
(mio tons)
Java
21, 99
21, 15
4. 0
*) Source: Indonesia Cement Associat ion, un-audit ed figures *) Source: Indonesia Cement Associat ion, un-audit ed figures
DESCRIPTION
2011
2010
CHANGE (%)
DOMESTIC
19, 591, 300
17, 639, 686
11. 1
EXPORT
127, 148
290, 551
(56. 2)
GRAND TOTAL
19, 718, 448
17, 930, 237
10. 0
Jakart a
6, 630, 161
3, 820, 650
21. 2
Bant en
2, 779, 158
2, 091, 186
32. 9
West Java
7, 060, 905
5, 875, 212
20. 2
Cent ral Java
5, 302, 862
4, 471, 010
18. 6
Yogyakart a
762, 668
611, 889
24. 6
East Java
5, 979, 268
5, 126, 741
16. 6
INDONESIA
48, 000, 345
40, 782, 376
17. 7
Export Cement
252, 340
776, 297
(67. 5)
Export Clinker
999, 588
2, 106, 699
(52. 6)
Tot al Export
1, 251, 928
2, 882, 996
(56. 6)
GRAND TOTAL
49, 252, 273
43, 665, 372
12. 8
16
FINANCIAL UPDATE
SMGR Corporat e Present at ion
FINANCIAL SUMMARY: FY2010 RESULTS
EBITDA
(Rp billion)
NET INCOME
(Rp billion)
NET INCOME
(Rp billion)
EBITDA Margin
(%)
EBITDA Margin
(%)
FY06
FY07
FY08
FY09
FY10
25. 6
29. 7
31. 7
33. 2
34. 6
NET INCOME Margin
(%)
NET INCOME Margin
(%)
FY06
FY07
FY08
FY09
FY10
14. 8
18. 5
20. 7
23. 1
25. 3
Description
(Rpbn)
FY2009
FY2010
Change
(%)
Revenue
14,388
14,344
(0.3)
Cost of revenue
7,614
7,534
(1.0)
Gross profit
6,774
6,810
0.5
Operating expenses
2,432
2,321
(4.5)
Operating income
4,343
4,489
3.4
Ebitda
4,773
4,970
4.1
Net Income
3,326
3,633
9.2
EPS (full amount)
566
613
8.3
4,970
2006
2007
2008
2009
2010
3,633
18
18
FINANCIAL SUMMARY: 9M-2011 RESULTS
EBITDA
(Rp billion)
NET INCOME
(Rp billion)
NET INCOME
(Rp billion)
EBITDA Margin
(%)
EBITDA Margin
(%)
9M-07
9M-08
9M-09
9M-10
9M-11
29. 1%
31. 6%
32. 5%
34. 5%
32. 8%
NET INCOME Margin
(%)
NET INCOME Margin
(%)
Description
Operating expenses
1, 729
1, 881
8. 8
Operating income
3, 207
3, 402
6. 1
Ebitda
3, 546
3, 805
7. 3
Net Income
2, 522
2, 761
9. 5
EPS (full amount)
465
425
9. 4
2.761
9M07
9M08
9M09
9M10
9M11
9M-07
9M-08
9M-09
9M-10
9M-11
17. 9%
20. 3%
23. 1%
24. 5%
23. 8%
STRATEGIC PROJECTS
SMGR Corporat e Present at ion
20
20
SMGR LONG TERM STRATEGIC FOCUS
SMGR
SMGR
THE OVERALL
STRATEGY
COMBINES
6
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
Cement Finish Grinding
Preparation Bored Pile
Coal Storage Steel Structure
Jetty Extension Area
T
New Power Plant Area
New Plants
Sulawesi
2. 5
290
2009
Jun 2012
Sub Total
5. 0
594
Sulawesi
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
Progress of Tonasa V Cement Plant Project
Progress of Tuban IV Cement Plant Project
Progress of Power Plant Project - Tonasa 2 x 35 M W
PROGRESS OF CEMENT & POWER PLANT PROJECTS – December 31, 2011
22
Description
Weight
Planning
Actual
Preparat ion
0. 39%
100. 00%
100. 00%
Management
2. 88%
100. 00%
98. 19%
Engineering
3. 83%
100. 00%
100. 00%
Procurement
72. 82%
100. 00%
99. 26%
Const ruct ion
18. 03%
100. 00%
78. 86%
Commissioning
2. 05%
100. 00%
5. 05%
Total
100 %
100. 00%
93. 65%
Description
Weight
Planning
Actual
Preparat ion
0. 12%
100. 00%
100. 00%
Management
5. 58%
100. 00%
99. 18%
Engineering
4. 14%
100. 00%
100. 00%
Procurement
69. 41%
100. 00%
99. 83%
Const ruct ion
18. 77%
100. 00%
91. 83%
Commissioning
1. 97%
100. 00%
66. 95%
Total
100 %
100. 00%
97. 65%
Description
Weight
Planning
Actual
Preparat ion
2. 63%
100. 00%
100. 00%
Management
4. 60%
70. 68%
72. 17%
Engineering
5. 75%
99. 77%
98. 62%
Procurement
55. 13%
85. 86%
82. 25%
Const ruct ion
26. 45%
51. 63%
43. 98%
Commissioning
5. 44%
0. 00%
0. 18%
Total
100%
72. 61%
68. 61%
DESIGN CAPACITY (Mio Ton)
2007
2008
2009
2010
2011
2012F
2013F
2014F
2015F
CONCLUSION: WHY SMGR?
SMGR Corporat e Present at ion
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
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
26
26
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
thFloor,
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
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.