Cementing Path For Sustainable Growth Corporate Presentation

Transcription

1 Cementing Path For Sustainable Growth Corporate Presentation JULY, 2010

2 INDONESIA S CEMENT INDUSTRY July 2010 SMGR Corporate Presentation 1

3 CEMENT INDUSTRY AT A GLANCE 4 Kuala Lumpur Singapore SMGR CEMENT INDUSTRY F 1) SMGR: SMGR: mio mio ton ton CEMENT PLAYERS and CAPACITY Production Capacity : 46.6 mio ton 49.8 mio ton 51.7 mio ton Domestic Growth : 11.5% 2.5% 6.5% Domestic Utilization : 82% 78% 80% Supply Domestic : 38.1 mio ton 39.1 mio ton 41.6 mio ton Export : 4.9 mio tons 4.0 mio tons 3.6 mio ton Import 2) : 1.5 mio tons 1.5 mio tons - 1) Based on Company s forecast 2) Imported cement by PT Semen Andalas as its cement plant is currently under reconstruction 1. Semen Padang 5.9 mn ton 2. Semen Gresik 9.0 mn ton 3. Semen Tonasa 4.1 mn ton 4. Semen Andalas 1.6 mn ton 5. Semen Baturaja 1.3 mn ton 6. Indocement TP 17.1 mn ton 7. Holcim Indonesia 8.5 mn ton 8. Semen Bosowa 1.8 mn ton 9. Semen Kupang 0.5 mn ton TOTAL 49.8 mn ton 2

4 COMPARISON: CEMENT CONSUMPTION PER CAPITA 2009 kg 1200 kg/capita China Singapore Saudi Arabia Italy Malaysia USA Vietnam Japan Thailand India Germany Philipina Indonesia Source: Deutshe Bank; CEIC; Bahana Research, Indonesia Cement Association 3

5 INDONESIA CEMENT CONSUMPTION PER CAPITA ( ) 18% growth in 12 years kg/per capita Source: Indonesia Cement Association 4

6 INDONESIA HAS EXPERIENCED SOLID ECONOMIC AND DOMESTIC CEMENT CONSUMPTION GROWTH DOMESTIC CEMENT CONSUMPTION, CEMENT GROWTH, GDP GROWTH AND CONSTRUCTION GROWTH IN INDONESIA (mio tons) 40.0 Domestic consumption (LHS) Cement growth (RHS) 20.0% GDP growth % (RHS) % % % % Growth 4.4% : 5.8% 4.7% Growth : 1.1% 5.1% Growth 4.2% : 9.7% 5.6% 5.4% Growth : 4.2% 1.1% 1.8% 6.3% 6.6% Growth : 1.8% Growth 6.1% : 6.6% 4.60% Growth : 2.5% 19.4% 0.0% Source: Indonesian Cement Association & BPS Statistic 5

7 DOMESTIC MARKET CONSUMPTION ± Bulk 20% Ready-mix Ready-mix (infrastructure): (infrastructure): ± 50% Fabricator Fabricator (pre-cast, (pre-cast, fiber fiber cement, cement, cement cement based based industry): industry): ± 45% Projects Projects (mortar, (mortar, render): render): ± 5% Bag ± 80% Housing: Housing: ± 90% Cement Cement based based industry: industry: ± 10% Source: Internal Research Retail (residential) sector is the largest consumer of cement in Indonesia Key Drivers of Domestic cement demand: National Economic Growth Favorable Interest Rate Environment Infrastructure Expansion Per Capita Consumption increase from current low levels 6

8 July 2010 SMGR Corporate Presentation COMPANY PROFILE 7

9 SMGR IS THE #1 CEMENT COMPANY IN INDONESIA BRIEF HISTORY 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 23.65% of its stake ownership in SMGR, Market Cap per March 31, 2010 IDR43.3tn 2010 : Targeted total installed capacity of 19.50mm tons, Market Cap per May 31, 2010 IDR50.1tn OWNERSHIP STRUCTURE1 1 The Government of the Republic of Indonesia (51.01%) SMGR CAPACITY BUILD-OUT (MM TONS) 20,0 15,0 10,0 5,0 0, Public (48.99%) PT Semen Gresik (Persero) Tbk. PT Semen Padang (99.99%) PT Semen Tonasa (99.99%) Five subsidiaries Non-cement producers Six subsidiaries Non-cement producers ¹ As of April 09,

10 TOP 20 SHAREHOLDERS (per June 30, 2010) NO NAME OF INVESTORS AMOUNT % 1 GOVERNMENT OF REPUBLIC OF INDONESIA 3,025,406, SSB 4545 S/A LAZARD EMERGING MARKETS EQUITY PORTFOLIO 139,736, JPMCB-EUROPACIFIC GROWTH FUND 129,396, JPMCB-EMERGING MARKETS GROWTH FUND INC. 113,763, JPMCB-NEW WORLD FUND, INC. 89,607, JPMCB-CAPITAL INTERNTNL EMERGINGMARKETS FUND 60,511, PT JAMSOSTEK (PERSERO) - NON JHT 55,008, THE NORTHERN TRUST S/A AVFC 48,379, JPMCB-CAP WORLD GROWTH AND INCOME FUND INC 47,248, SSB HG09 AMERICAN FUNDS INSURANCE SERIES INTERNATIONAL FUND 44,361, JP MORGAN CHASE BANK RE ABU DHABI INVESTMENT AUTHORITY 38,889, BBH BOSTON S/A VANGRD EMG MKTS STK INFD 38,351, PERUSAHAAN PEMGELOLA ASET (PERSERO), PT 36,923, PT PRUDENTIAL LIFE ASSURANCE-REF 36,583, THE BANK OF NEW YORK MELLON DR 30,243, JPMORGAN CHASE BANK NA RE NON-TREATY CLIENTS ,825, DANAREKSA PERSERO, PT S/A 03 28,229, PT JAMSOSTEK (PERSERO) - JHT 28,035, BBH LUXEMBOURG S/A FIDELITY FD, SICAV-SE ASIA FD 27,642, PT AIA FINL - UL EQUITY 27,565, TOTAL 4,074,253, Other Shareholders (3,156) 1,857,266, GRAND TOTAL 5,931,500,

11 SMGR s COMPARATIVE & COMPETITIVE ADVANTAGE HAS DRIVEN SMGR TO BE THE MARKET LEADER IN INDONESIA MARKET LEADER MARKET SHARE + 45% SMGR s COMPARATIVE & COMPETITIVE ADVANTAGE 10

12 SMGR s PRODUCTION FACILITIES ARE WELL SUPPORTED BY STRATEGICALLY LOCATED MARKETING AND DISTRIBUTION FACILITIES (2009) Aleh Kuala Lumpur Belawan Singapore Bitung Batam Samarinda Teluk Bayur Installed Cap.: 5.9 mn tons Cement Plant Packing Plant Port Warehouse Tanjung Priok Sumatera West Java Serang Tangerang Bogor Cibitung Bandung Tasik Malaya Cirebon Narogong Ciwandan Jakarta Central Java Tegal Purwokerto Kudus Magelang Solo/Palur Alas Tuwo Mojopahit Sayung Tuban Java Kalimantan Banjarmasin Surabaya DI Yogyakarta LempuyanganEast Java Janti Margomulyo Tanjung Wangi Bangkalan Swabina Pelabuhan Tuban Bali Bali Tabanan Denpasar Singarajan Installed Cap.: 9.0 mn tons Biringkasi Makassar Lombok Pelabuhan Gresik Palu Sulawesi Maluku Ambon Installed Cap.: 4.1 mn tons Papua 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 2008: 18.0 mn tons and EoY 2009: 19.0 mn tons 11

13 SGG HAS EXPERIENCED ROBUST FINANCIAL GROWTH (Rp billions) CAGR ( ) Revenue 18% Gross Profit 24% Operating Income 30% EBITDA 24% Net Income 35% Total assets 15% Total Equity 23% Revenue Gross Profit Operating Profit Ebitda Net Profit 12

14 STRONG BALANCE SHEET AND RETURNS Cash balance (IDR bn) Total debt (IDR bn) * Include short term investment CAGR (05 09) 39% CAGR (05 09) -35% Debt/EBITDA Return on Assets 0,40x 13,7% 17,3% 20,8% 23,8% 25,7% 0,10x 0,06x 0,05x 0,03x

15 REGULAR DIVIDEND PAYMENTS WITH ATTRACTIVE YIELD SMGR DIVIDEND YIELD IN THE LAST 5 YEARS 1) 1) 2009 DIVIDEND YIELD 1) 1) Average: 3,5% 5.2% 2.5% 3.0% 2.7% 4.1% ) shares price based on closing price at the end of year 1.8% JSX Top-20 *) 4.1% 1.1% 0% I NTP SMCB SMGR *): Based on median of Top-20 Biggest Market Capitalizatio n JSX listed companies in dividend yield, excluding Semen Gresik for FY2009 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 Shareholder profile 14

16 SMGR STOCK PRICE HAS CONTINUED TO OUTPERFORM JCI SMGR JCI Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Jul-10 15

17 July 2010 MARKET UPDATE (6M2010) SMGR Corporate Presentation 16

18 MARKET BY GEOGRAPHY (6M2010) Domestic Consumption Java remains as the largest market *) 7% 6% 3% 8% Sumatera 24% Java 53% East of Indonesia Nusa Tenggara Kalimantan Sulawesi Domestic Market Share *) REGION MARKET SHARE (%) SMGR INTP SMCB BSWA ANDLS BTRJA SP SG *) *) Source: ASI (Indonesia Cement Association) Source: ASI (Indonesia Cement Association) ST JAVA SUMATERA SULAWESI KALIMANTAN NUSA TENGGR EASTERN IND TOTAL INDONESIA

19 July 2010 FINANCIAL UPDATE (3M2010) SMGR Corporate Presentation 18

20 FINANCIAL SUMMARY (3M-2010 RESULTS) Description (Rp bn) 3M-09 3M-10 Change (%) EBITDA (Rp billion) Net Revenue 3,228 3, Cost of Revenue 1,850 1,705 (7.8) Gross Profit 1,378 1, Operating Income 866 1, EBITDA 974 1, Net Income M-06 3M-07 3M-08 3M-09 3M-10 EBITDA Margin (%) 3M06 3M07 3M08 3M09 3M % 25.5% 34.4% 30.2% 34.6% NET INCOME (Rp billion) EPS (full amount) M06 3M-07 3M-08 3M-09 3M-10 NET INCOME Margin (%) 3M06 3M07 3M08 3M09 3M % 15.7% 20.2% 21.0% 24.7% 19

21 July 2010 SMGR Corporate Presentation STRATEGIC PROJECTS 20

22 STRATEGIC PROJECTS New Plants Location Capacity (mn tons) Investment (US$ mn) Start Construction Completed Java Sulawesi Sub Total Power Plants Location Capacity (MW) Investment (US$ mn) Start Construction Completed Sulawesi 2 x TOTAL CAPEX US$ 708mn Main Substation Electrical Equipment Foundation Coal Storage Steel Structure Tuban Tonasa Tonasa Cement Finish Grinding Preparation Bored Pile Cement Silo Pile Cap Preparation These strategic projects will ensure sustainability of the Company s market leadership New Power Plant Area Jetty Extension Area 21

23 PRODUCTION CAPACITY (Mio Ton) Export Export sales sales Domestic Domestic sales sales F 2011F 2012F 2013F 22

24 CAPEX PLANNING PROFILE ( ) Detailed Detailed capex capex schedule schedule (US$ (US$ mm) mm) Key Items (Capex) (US$ Mio) Capacity Expansion 594 Power Plants 114 De-bottlenecking 106 Human Capital Master Plan & ICT 40 Others 101 Maintenance 227 Efficiency Improvement 35 Mandatory 45 Total Capex Total HCMP & ICT Mandatory Power plants (under review) Capacity exp. Others Maintenance Efficiency Improvement , , % 3% 18% 32% 30% 8% 4% 5% 23

25 July 2010 ENVIRONMENTAL FOCUS SMGR Corporate Presentation 24

26 SMGR IS FOCUSED ON DRIVING VALUE THROUGH AN ENVIRONMENTALLY-SUSTAINABLE BUSINESS PLATFORM Environmental Management 1. Alternative Fuel Generate revenue Emissions reduction programs Carbon credits trading Reduce operating expense Energy efficiency programs Technology-driven cost savings Promote company image Domestic capacity expansion Investment communities 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 Generation 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 Environmental Management System: Environment Environment Monitoring Monitoring Program Program Environment Environment Management Management Program Program Resources Resources Conservation Conservation Program Program Community Community Development Development Program Program 25

27 FUTURE OF INDONESIA S CEMENT INDUSTRY July 2010 SMGR Corporate Presentation 26

28 NATIONAL DEMAND IS FORECAST TO RISE TO 142mm TONS BY 2030 Indonesia Cement Market Growth Annual Growth Rates Pessimist Moderate Pessimist : 5.5% Moderate : 6.5% : 76 mio tons : 2030: mio mio tons tons Optimist Optimist : 7.0% Source: Internal Research Indonesia s demand growth will make it the largest cement producer in Southeast Asia 27

29 DEMAND IN WILL INCREASINGLY SHIFT TO THE OUTER ISLANDS Sumatera 29 MT (310%) Kalimantan 17 MT (618%) Sulawesi 13 MT (406%) Key Malaysia 2020 Java 28 MT (130%) Bali 9 MT (403%) Timor Leste East of Indonesia 5 MT (625%) 2030 Figures are in MT Source: Internal Research SMGR with its wide geographical presence is well positioned to tap the growth throughout Indonesia 28

30 SO FAR INFRASTRUCTURE EXPANSION HAS BEEN RELATIVELY SLOW 35 Bag and Bulk cement consumption (million tons) 32,2 32, ,0 18,1 16,9 20,0 22,7 23,7 23,7 25,2 25,5 26,9 28, ,5 6,0 5,0 5,1 6,0 5,9 6,2 2,3 3,0 3,5 3,8 1,9 1, Bag Consumption Bulk Consumption Source: Credit Suisse Research, Indonesia Cement Association, the Company s data 29

31 INDONESIA PLANS TO INVEST HEAVILY IN INFRASTRUCTURE PARTICULARLY TOLL- ROADS Project Value by Sector (US$ million) Water resources 779 Power 3,695 Transportation 2,458 Railways 11,960 TOTAL VALUE: US$34,140 mn Toll roads 15,248 Details Toll Road Projects Toll Road Project Status No. of projects Project value (USD mio) Length (Km) Cement demand (MT) Projects Ready For Offer 3 1, Priority Projects 8 2, ,026 Potential Projects 19 11, ,571 TOTAL 30 15,248 1,334 4,002 Source: National Development Planning Agency/Redwing estimates 30

32 IN ADDITION TO CEMENT DEMAND FROM TOLL ROAD PROJECTS, THE MULTIPLIER EFFECT WILL FURTHER STRENGTHEN RETAIL CEMENT DEMAND Potential cement demand : Toll road projects 2010 to 2014 N. Sumatera 408,000 W. Sumatera 165,000 Riau 480,000 N. Sulawesi 138,000 S. Sumatera 216,000 Lampung 600,000 W. Java 507,000 C. Java 507,000 Jabotabek 264,000 Bali 24,000 E. Java 693,000 TOTAL CEMENT DEMAND: 4,002 MT Source: National Development Planning Agency/Redwing estimates 31

33 SMGR LONG TERM STRATEGIC FOCUS 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 32

34 APPENDIX July 2010 SMGR Corporate Presentation

35 INDONESIA AT A GLANCE Kuala Lumpur Singapore Sulawesi Sumatera Kalimantan Jakarta * Java Nusa Tenggara Islands Papua Area : 1.9 million km 2 Capital City : Jakarta Significant Islands : Java, Sumatera, Kalimantan, Sulawesi, Nusa Tenggara Islands, Papua Population (2009) : 230 Million Population Growth : 1.3% p.a F Annual GDP Growth : 6.1% 4.5% 5.5% Annual Inflation rate : 11.1% 2.8% 5.5% BI Rate (year end) : 9.25% 6.5% 7.25% US$ Exchange Rate : Rp10,950 Rp9,400 Rp9,100 34

36 THANK YOU Main Office: Main Building of Semen Gresik Jln. Veteran Gresik Indonesia Phone: (62-31) , Fax: (62-31) , 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. 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 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. Representative Office: Gedung The East, 18 th Floor, Jln. Lingkar Mega Kuningan Kav. E3.2 No. 1, Jakarta Indonesia Phone : (62-21) Fax : (62-21)