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Corporate PresentationNOVEMBER 2011
WHY SMGR?WHY SMGR?±42%Domestic Market Share
SP
SG
ST
1
INDONESIA’S CEMENT INDUSTRYSMGR Corporate Presentation
November 2011
2
1. SMGR 20.2 mn ton- Semen Padang: 6.1 mn ton
- Semen Gresik : 10.0 mn ton
- Semen Tonasa : 4.1 mn ton
2. Semen Andalas 3) 1.6 mn ton3. Semen Baturaja 1.3 mn ton4. Indocement TP 18.6 mn ton5. Holcim Indonesia 8.5 mn ton6. Semen Bosowa 3.8 mn ton7. Semen Kupang 4) 0.5 mn ton
TOTAL 54.5 mn ton
CEMENT INDUSTRY AT A GLANCE
• Production Capacity : 51.3 mio ton 54.5 mio ton 59.4 mio ton• Domestic Growth : 6.0% 16.0% 7.0%• Domestic Utilization : 79% 87% 85%• Total Utilization : 85% 90% 88%• Supply Domestic : 40.8 mio ton 47.3 mio ton 50.6 Export : 2.9 mio tons 1.5 mio ton 1.5 Import 2) : 1.5 mio tons 1.0 mio ton -
1) Based on the Company’s forecast2) Imported cement by PT Semen Andalas as its cement plant is currently under reconstruction3) Under reconstruction, scheduled to complete in mid 20114) Semen Kupang does not produce or sell cement in the last 3 years due to its financial problem
Singapore
Kuala Lumpur
SMGR
22
11
33
4455
1
1
6677
THE PLAYERS and CAPACITY (2011)
SMGR: 20.2 mio ton (37% of Industry Cap.)
CEMENT INDUSTRY 2010 2011F 1) 2012F 1)
3
COMPARISON: CEMENT CONSUMPTION PER CAPITA 2010
Source: UBS; Deutsche, Indonesia Cement Association
0
200
400
600
800
1000
1200
1400
1600
Saudi Arabia
China
South Korea
Singapore
Malaysia
ItalyJapan
Vietnam
USAThailand
Germany
Indonesia
IndiaPhilipina
kg/capita
172
kgkg
Region PopulationCement
Consump-tion (ton)
Cement Consumpt. Per Capita
(kg)
GDP – US$ (2010)
1. JAVA 136,563,142 21,996,688 161 3,165
2. SUMATERA 50,613,947 9,690,931 191 2,712
3. SULAWESI & MALUKU 19,926,385 3,421,522 172 1,450
4. KALIMANTAN 13,772,543 2,833,018 206 4,976
5. BALI & NUSA TENGGARA 13,067,599 2,326,931 178 1,228
6. PAPUA 3,612,854 513,287 142 3,792
Total Indonesia 237,556,470 40,782,377 172 2,656
MARKET BY GEOGRAPHY & CEMENT CONSUMPTION PER CAPITA (FY2010)
Papua
Bali & N T
Kalimantan
Sulawesi
Population DistributionPopulation Distribution
Sumatera21.3% Java
57.5.%
8.4%
5.8% 5.5% 1.5%
4
REGIONMARKET SHARE (%)
SMGR INTP SMCB BSWA ANDLS BTRJA
1. JAVA 36.3 40.4 21.1 2.0 - 0.01
2. SUMATERA 42.6 15.9 11.5 2.0 16.0 12.0
3. SULAWESI 60.9 13.4 0.9 25.0 - -
4. KALIMANTAN 48.5 28.4 13.5 10.0 - -
5. NUSA TENGGR. 37.7 36.5 4.5 20.4 - -
6. EASTERN IND. 65.1 16.8 0.4 17.7 - -
TOTALINDONESIA
41.0 31.3 15.6 5.8 3.7 2.7
SG
SP
ST1
234
5
6
23.9%
7.4%7.1%
5.9% 2.2%
Java53.5.%
Sumatera
Cement DistributionCement Distribution
Domestic Market Share (Up to 10M2011)
DOMESTIC MARKET CONSUMPTION
Retail (residential) sector is the largest consumer of cement in Indonesia
5
Bag80%
Bulk20%
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): ± 50%
• Fabricator (pre-cast, fiber cement, cement based industry): ± 45%
• Projects (mortar, render): ± 5%
• Ready-mix (infrastructure): ± 50%
• Fabricator (pre-cast, fiber cement, cement based industry): ± 45%
• Projects (mortar, render): ± 5%
• Housing: ± 90%
• Cement based industry: ± 10%
• Housing: ± 90%
• Cement based industry: ± 10%±
±
Source: Internal Research
6
COMPANY PROFILESMGR Corporate Presentation
November 2011
7
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 March 31, 2010: IDR43.3tn 2011 : Targeted total installed capacity of 20.20mm tons, Market Cap per Oct 31, 2011: IDR56.3tn
BRIEF HISTORYBRIEF HISTORY
SMGR IS THE #1 CEMENT COMPANY IN INDONESIA
0,0
5,0
10,0
15,0
20,0
1957
1970
1980
1984
1985
1986
1990
1995
1997
1998
2006
2007
2008
2009
2010
2011
SMGR CAPACITY BUILD-OUT (MM TONS)SMGR CAPACITY BUILD-OUT (MM TONS)
Pre-consolidated capacityPre-consolidated capacity
Post-consolidated capacity
Based capacity: 16.9 mio tons
Upgrading: 3.3 mio tons
Total installed capacity: 20.2 mio tons
8
Public The Government of the Republic of Indonesia
PT Semen Gresik (Persero) Tbk.
PT Semen Padang PT Semen Tonasa
OWNERSHIP STRUCTURE1OWNERSHIP STRUCTURE1
FOCUSES IN CORE BUSINESS
¹ As of April 09, 2010
Four subsidiaries Non-cement producers:
51.01% 48.99%
99.99% 99.99%
Name Activities % Ownership
1. Igasar Cement distribution 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%
Six subsidiaries Non-cement producers:
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%
99
Total installed capacity EoY 2010: 19.0 mn tons and EoY 2011: 20.2 mn tons Nationwide distribution network Distribution warehouses in all areas of Java, Bali, Sumatra, Kalimantan, Sulawesi and Irian Operate 4 special sea ports: Padang, Tuban, Gresik, Biringkassi 17 large packing plants
SMGR’s PRODUCTION FACILITIES ARE WELL SUPPORTED BY STRATEGICALLY LOCATED MARKETING AND DISTRIBUTION FACILITIES (2011)
TelukBayur
Sumatera
Kalimantan
SulawesiMaluku
Papua
LombokBaliJava
Batam
Ciwandan
Tanjung Priok Jakarta
Samarinda
Banjarmasin
Palu
Bitung
Ambon
Makassar
Biringkasi
BaliTabananDenpasarSingarajan
DI YogyakartaLempuyanganJanti
Central JavaTegalPurwokertoKudusMagelangSolo/PalurAlas TuwoMojopahitSayung
West JavaSerangTangerangBogorCibitungBandungTasik MalayaCirebonNarogong
Belawan
Singapore
Kuala Lumpur
Tuban
Surabaya
Cement Plant
Packing PlantPort
Warehouse
East JavaMargomulyoTanjung WangiBangkalanSwabina
Aceh
Pelabuhan Tuban
Pelabuhan Gresik
Installed Cap.:6.1 mn tons
Installed Cap.:10.0 mn tons
Installed Cap.:4.1 mn tons
Gresik
10101010
9.601
12.210
14.388 14.344
4.001
5.355
6.774 6.810
1.7792.234
8.728
3.3284.343 4.489
3.3872.397
4.9704.773
3.867
2.8493.6333.326
2.5241.7751.296
0
2.000
4.000
6.000
8.000
10.000
12.000
14.000
16.000
2006 2007 2008 2009 2010
Revenue Gross Profit Operating Profit Ebitda Net Profit
(Rp billions) CAGR(2006 – 2010)
Revenue 13%
Cost of Revenue 9%
Gross Profit 20%
Operating Income 26%
EBITDA 22%
Net Income 29%
Total assets 20%
Total Equity 22%
SGG HAS EXPERIENCED ROBUST FINANCIAL GROWTH
2010
1111
STRONG BALANCE SHEET AND RETURNS
Cash balance (IDR bn) Total debt (IDR bn)
3.836 3.9025.283
1.9292.939
2006 2007 2008 2009 2010
660
224159 180 151
2006 2007 2008 2009 2010
* Include short term investment
Debt/EBITDA Return on Assets
20,8%17,3%23,4%23,8% 25,7%
2006 2007 2008 2009 2010
0,10x 0,03x0,06x 0,05x 0.13x
2006 2007 2008 2009 2010
3,0x
The projected adjusted debt/EBITDA of 3.0x and EBITDA/Interest of 3-4x to maintain rating level from Moody’s Investors Service.
1212
3.0% 2.7%
5.2%4.1%
3.2%
2006 2007 2008 2009 2010
Average: 3,6%
2.0% 1.6%
3.2%
1.0%
JSX
Top-20
*)
INTP SMCB SMGR
SMGR DIVIDEND YIELD IN THE LAST 5 YEARS 1)SMGR DIVIDEND YIELD IN THE LAST 5 YEARS 1)
*):Based on median of Top-20 Biggest Market Capitalization JSX listed companies in dividend yield, excluding Semen Gresik for FY2010
2010 DIVIDEND YIELD 1)2010 DIVIDEND YIELD 1)
REGULAR DIVIDENDSREGULAR 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• Shareholder profile
REGULAR DIVIDEND PAYMENTS WITH ATTRACTIVE YIELD
1) shares price based on closing price at the end of year
Shares stock split 1:10Shares stock split 1:10
US Sub-prime mortgage crisisUS Sub-prime
mortgage crisis
Shares buy backShares buy back
Blue Valley’s divestment
Blue Valley’s divestment
High inflation fearHigh inflation fear
No cartel conclusion by
KPPU
No cartel conclusion by
KPPU
Market Cap:Rp21.5T
Market Cap:Rp56.3T3980
516053005600
5000
40003425
41753725
4900
6300
75507300
87509250
8700
9.9009.800
9.2009.450
7.750
8.4008.750
9.500 9.4509.100
8300
9.500
1805 ,521830 ,92
2139 ,282359 ,21
2745 ,832447 ,32349 ,1 1832 ,5 1355 ,4
1434 ,072020 ,78
2467 ,592534 ,35
2777 ,32913 ,68
3.069 ,283.081 ,88
3.501 ,303.635 ,323.531 ,21
3.703 ,513.409 ,173.416 ,76
3.524 ,483.741 ,813.813 ,86
3.888 ,564.130 ,80
3.841 ,733549 ,03
3.790 ,84
9.6009.700
3630
0
1000
2000
3000
4000
5000
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7000
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9000
10000
28-D
es-06
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ar-07
29-Ju
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gust-
1030
-Sep
-1029
-Okt-
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-Nop
-1030
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-1031
-Jan-1
114
-Feb
-1115
-Mar-
1108
-Apr-
1103
/05/20
1130
/06/20
1129
/07/20
1126
/08/20
1130
/09/20
1131
/10/20
11
SMGR JCI
SMGR STOCK PRICE HAS CONTINUED TO GROW….
Euro Market Crisis
Euro Market Crisis
14
MARKET UPDATESMGR Corporate Presentation
November 2011
MARKET UPDATE (Cement Sales FY2010 and 10M2011) *)
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 - Sales Volume (million tons)
Java 21,99 21,15 4.0
Sumatera 9,69 8,87 9.2
Kalimantan 2,83 2,44 15.8
Sulawesi 3,04 3,00 1.5
Nusa Tenggara 2,32 2,18 6.6
Maluku & Papua 0,88 0,80 10.4
TOTAL IND. 40,78 38,46 6.0
Export Semen 0,77 1,23 (37.2)
Export Clinker 2,10 2,79 (24.7)
Total Export 2,88 4,03 (28.5)
GRAND TOTAL 43,66 42,49 2.7
*) Source: Indonesia Cement Association, un-audited figures*) Source: Indonesia Cement Association, un-audited figures 15
DESCRIPTION 2011 2010 CHANGE (%)
DOMESTIC 15,961,928 14,400,773 10.8
EXPORT 116,641 194,618 (40.1)
GRAND TOTAL 16,078,569 14,595,391 10.2
Jakarta 3,755,721 3,098,155 21.1
Banten 2,234,315 1,707,054 30.9
West Java 5,733,589 4,809,197 19.2
Central Java 4,336,6548 3,708,153 16.9
Yogyakarta 624,497 507,942 22.9
East Java 4,839,907 4,173,322 15.9
Total Java 21,521,578 18,003,822 19.5
Sumatera 8,970,306 7,829,036 14.6
Kalimantan 2,742,141 2,333,295 17.5
Sulawesi 2,843,419 2,466,471 15.3
Nusa Tenggara 2,254,289 1,969,790 14.4
Maluku & Papua 651,559 737,299 (11.6)
TOTAL INDONESIA 38,983,292 33,339,714 16.9
Export Cement 211,929 637,460 (66,8)
Export Clinker 923,055 1,746,594 (47.2)
Total Export 1,134,984 2,384,054 (52.4)
GRAND TOTAL 40,118,275 35,723,768 12.3
10M-2011 - Sales Volume (million tons)
16
FINANCIAL UPDATESMGR Corporate Presentation
November 2011
1717
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 FY1014.8 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
4,9704,773
3,867
2,8492,234
0
1.000
2.000
3.000
4.000
5.000
2006 2007 2008 2009 2010
3,6333,326
2,524
1,7751,296
0
1.000
2.000
3.000
4.000
2006 2007 2008 2009 2010
1818
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(Rpbn)
9M-2010
9M-2011
Change (%)
Revenue 10,292 11,611 12.8
Cost of revenue 5,356 6,328 18.1
Gross profit 4,936 5,283 7.0
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 9.42.761
1.272
1.791
2.408 2.522
0
500
1.000
1.500
2.000
2.500
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%
3.8053.5463.3792.783
2.063
0
1.000
2.000
3.000
4.000
9M07 9M08 9M09 9M10 9M11
19
STRATEGIC PROJECTSSMGR Corporate Presentation
November 2011
2020
SMGR LONG TERM STRATEGIC FOCUS
SMGRSMGR
THE OVERALL
STRATEGY
COMBINES
66 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
2121
Cement Finish GrindingPreparation Bored Pile
Coal StorageSteel Structure
Jetty Extension Area
TubanTuban
TonasaTonasa
TonasaTonasa
New Power Plant Area
New Plants Location
Capacity (mn tons)
Investment (US$ mn)
Construction
Start Completed
Java 2.5 304 2009 Dec 2011
Sulawesi 2.5 290 2009 Apr 2012
Sub Total 5.0 594
Power Plants Location
Capacity (MW)
Investment (US$ mn)
Construction
Start Completed
Sulawesi 2 x 35 114 2010 2012
TOTAL CAPEX US$ 708mn
CEMENT PLANTS & POWER PLANT PROJECTS
These strategic projects will ensure sustainability of the Company’s market leadership
Preheater Tuban IV
Blending Silo Tonasa V
22
Progress of Tonasa V Cement Plant Project Progress of Tuban IV Cement Plant Project
Progress of Power Plant Project - Tonasa 2 x 35 MW
Preheater Tonasa VPreheater Tuban IV
PROGRESS OF CEMENT & POWER PLANT PROJECTS – October 31, 2011
Description Weight Planning Actual
Preparation 0.39% 100.00% 100.00%
Management 2.88% 95.30% 97.07%
Engineering 3.83% 100.00% 100.00%
Procurement 72.82% 99.19% 99.03%
Construction 18.03% 95.93% 73.95%
Commissioning 2.05% 31.66% 4.12%
Total 100 % 97.14% 92.55%
Description Weight Planning Actual
Preparation 0.12% 97.37% 97.42%
Management 5.58% 93.59% 98.40%
Engineering 4.14% 100.00% 100.00%
Procurement 69.41% 100.00% 99.49%
Construction 18.77% 92.02% 84.80%
Commissioning 1.97% 52.84% 52.53%
Total 100 % 97.21% 95.77%
Description Weight Planning Actual
Preparation 2.63% 100.00% 100.00%
Management 4.60% 66.75% 66.78%
Engineering 5.75% 98.58% 95.54%
Procurement 55.13% 62.27% 65.91%
Construction 26.45% 38.67% 31.66%
Commissioning 5.44% 0.00% 0.18%
Total 100% 55.93% 55.92%
DESIGN CAPACITY (Mio Ton)
23.0
26.226.9
17,717.816.715.2
1.00,30.7
1.8
2007 2008 2009 2010 2011F 2012F 2013F 2014F 2015F
17.118.0
19.0 19.0
Export sales ▪
Domestic sales ▪
Export sales ▪
Domestic sales ▪
20.2
28.7
Based Capacity
Based Capacity
Up-grading
Up-grading
New Capacity
New Capacity
16.9
3.1
8.7
24
ENVIRONMENTAL FOCUSSMGR Corporate Presentation
November 2011
2525
Generate revenue
Emissions reduction programs
Carbon credits trading
Environmental Management
Reduce operating expense
Energy efficiency programs
Technology-driven cost savings
Promote company image
Domestic capacity expansion
Investment communities
SMGR IS FOCUSED ON DRIVING VALUE THROUGH AN ENVIRONMENTALLY-SUSTAINABLE BUSINESS PLATFORM
1. Alternative Fuel
The use of alternative fuel is the company’ strategy plan in order to improve non renewable energy efficiency as well as consume friendly environmental energy.
2. Waste Heat Recovery Power Generator
Utilize exhaust (waste gas) from pre-heater & cooler to produce electricity (power plant).
3. Shifting Coal Consumption from High-Medium CV to Low CV by 2011
4. Environmental Management System:• Environment Monitoring Program• Environment Management Program• Resources Conservation Program• Community Development Program
• Environment Monitoring Program• Environment Management Program• Resources Conservation Program• Community Development Program
26
FUTURE OF INDONESIA’S CEMENT INDUSTRYSMGR Corporate Presentation
November 2011
2727
Pessimist : 5.5%
Moderate : 6.5%
Optimist : 7.0%
Annual Growth Rates
NATIONAL DEMAND IS FORECAST TO RISE TO 142mm TONS BY 2030
Indonesia Cement Market Growth 2010-2030
43 46 49 52 56 59 63 6772
8186
9298
104111
118125
133
117
40
76
142
163
0
20
40
60
80
100
120
140
160
180
2010 2015 2020 2025 2030
Pessimist
Moderate
Optimist
Indonesia’s demand growth will make it the largest cement producer in Southeast Asia
Source: Internal Research
2020:76 mio tons
2030:142 mio tons
2030:142 mio tons
2015:56 mio tons
SMGR•Design Cap : 29.8 mio tons•Production (P) : 28.5 mio tons•Domestic market : 25.0 mio tons•Export market : 3.5 mio tons
2828
DEMAND IN 2010-2030 WILL INCREASINGLY SHIFT TO THE OUTER ISLANDS
SMGR with its wide geographical presence is well positioned to tap the growththroughout Indonesia
Malaysia
Timor Leste
MalaysiaMalaysia
Timor LesteTimor LesteTimor Leste
22 50
10 39
3 20 3 16
1 6
2 11
Kalimantan17 MT (618%) Sulawesi
13 MT (406%)
Bali9 MT (403%)
Java28 MT (130%)
Sumatera29 MT (310%)
East of Indonesia 5 MT (625%)
2010
2030
Key
Figures are in MT
202020
8 7
2
534
Source: Internal Research
2929
Transportation 2,458
Rai lways 11,960
Toll roads15,248
Power 3,695
Water resources 779
Project Value by Sector (US$ million) 2010-2014
Toll RoadProject Status
No. of projects
Project value
(USD mio)
Length(Km)
Cement demand
(MT)
Projects Ready For Offer 3 1,000 135 405
Priority Projects 8 2,474 342 1,026
Potential Projects 19 11,774 857 2,571
TOTAL 30 15,248 1,334 4,002
Source: National Development Planning Agency/Redwing estimates
INDONESIA PLANS TO INVEST HEAVILY IN INFRASTRUCTURE – PARTICULARLY TOLL-ROADS
TOTAL VALUE: US$34,140 mn
Details Toll Road Projects
CONCLUSION: WHY SMGR?SMGR Corporate Presentation
November 2011
313131
SMGR’s COMPARATIVE & COMPETITIVE ADVANTAGE HAS DRIVEN SMGR TO BE THE MARKET LEADER IN INDONESIA
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 43% market share based on
sales volume for 2010 and approximately 37% share of total installed cement capacity (Source: Indonesia Cement Association (“ASI”))
– Strategically located plants proximate to key markets throughout the country
– 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
APPENDIXSMGR Corporate Presentation
November 2011
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
0
5
10
15
20
25
30
35
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Bag Consumption Bulk Consumption
SO FAR INFRASTRUCTURE EXPANSION HAS BEEN RELATIVELY SLOW
Bag and Bulk cement consumption 1997 – 2010 (million tons)
33
Source: Credit Suisse Research, Indonesia Cement Association, the Company’s data
34
INDONESIA CEMENT CONSUMPTION PER CAPITA (1997 – 2010)
123 128
141
96 94
110
125 130 130140 144 145
152162
167 172
0
20
40
60
80
100
120
140
160
180
1995 19961997 19981999 20002001 20022003 20042005 20062007 20082009 2010
kg/per capitaSource: Indonesia Cement Association
34
It was only back in 2004
ASIAN Economics
Crisis
ASIAN Economics
Crisis
35
Source: Indonesian Cement Association & BPS Statistic
INDONESIA HAS EXPERIENCED SOLID ECONOMIC AND DOMESTIC CEMENT CONSUMPTION GROWTH
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)
DOMESTIC CEMENT CONSUMPTION, CEMENT GROWTH, GDP GROWTH AND CONSTRUCTION GROWTH IN INDONESIA
40,839,039,1
27,2 27,5
30,231,5 32,1
34,2
38,1
6,10%
5,6%
4,7%
5,1%5,4%
4,4%
6.3%
6.1% 4.60%
6,60%
6.0%
11.5%
4.2%
9.7%
2.5%
6.6%
1.8%1.1%
5.8%
16.9%
0,0
10,0
20,0
30,0
40,0
2002 2003 2004 2005 2006 2007 2008 2009 2010 10M2011
0,0%
10,0%
20,0%Cement growth % (RHS)
(F)(F)
3636
IN ADDITION TO CEMENT DEMAND FROM TOLL ROAD PROJECTS, THE MULTIPLIER EFFECT WILL FURTHER STRENGTHEN RETAIL CEMENT DEMAND
Riau480,000
W. Java507,000
Lampung600,000
S. Sumatera216,000
N. Sumatera408,000
Jabotabek264,000
E. Java693,000C. Java
507,000
Bali24,000
W. Sumatera165,000
N. Sulawesi138,000
Potential cement demand : Toll road projects 2010 to 2014
Source: National Development Planning Agency/Redwing estimates
TOTAL CEMENT DEMAND: 4,002 MT
3737
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