INDONESIA’ S CEMENT INDUSTRY: NOW and THE FUTURE
SMGR Corporat e Present at ion
Together We Build a Better Future
2) Import ed cement by PT Semen Andalas (1. 0 mio t on) and clinker by Bosawa and Kupang
3) Import ed cement & clinker
DOMESTIC CAPACITY (2014
)
CEMENT INDUSTRY
2013
2014F
1)
2015F
1)
CEMENT INDUSTRY AT A GLANCE
‘ 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%
100%
94%
89%
86%
Export
500
500
500
500
500
Domestic Consumption
Growth
5.5%
6%
6%
6%
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
Together We Build a Better Future
4
Source: Deut sche, Indonesia Cement Associat ion
229
Source: Indonesian Cement Associat ion & BPS St at ist ic
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
Together We Build a Better Future
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
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
Together We Build a Better Future
8
MARKET UPDATE
SMGR Corporat e Present at ion
Papua
Bali & N T
Sulawesi
Kalimantan
Population Distribution (2012)
Sumatera
Cement Distribution (1M2014)
Domest ic Market Share (1M2014)
Together We Build a Better Future
*) Source: Indonesia Cement Associat ion, un-audit ed f igures
10
AREA
1M 2014
1M 2013
CHANGE (%)
1M 2014 – Domest ic Consumpt ion
(mio tons)
DESCRIPTION
1M-14
1M-13
CHANGE (%)
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%)
COMPANY PROFILE
SMGR Corporat e Present at ion
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
_
_
_
_
_
_
Public
The Government of the Republic of Indonesia
PT Semen Indonesia (Persero) Tbk.
PT Semen Padang
PT Semen Tonasa
OWNERSHIP STRUCTURE
1¹ As of Dec 18, 2012
51. 01%
48. 99%
99. 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%
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
FINANCIAL UPDATE
SMGR Corporat e Present at ion
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
FINANCIAL SUMMARY: FY2012 RESULTS
4847
2007
2008
2009
2010
2011
2012
5,402
FINANCIAL SUMMARY: 9M-2013 RESULTS
EBIT DA (Rp billion)
NET INCOME (Rp billion)
EBIT DA Margin (%)
9M-2012 9M-2013
Change
(%)
9M09
9M10
9M11
9M2012 9M2013
9M-09
9M-10
9M-11
9M-12
9M-13
9M09
9M10
9M11
9M12
9M13
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
50%
50%
55%
50%
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
Together We Build a Better Future
20
STRATEGIC PROJECTS
SMGR Corporat e Present at ion
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
Together We Build a Better Future
22
Tuban’s view
Pyroprocessing Tonasa V
Jetty Extension Area
T
u
b
a
n
T
o
n
a
sa
T
o
n
a
sa
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
17.1
18
19
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
Together We Build a Better Future
CONCLUSION: WHY SMGR?
SMGR Corporat e Present at ion
FEBRUARY 2014
Out st anding
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
Together We Build a Better Future
26
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
