December 2016

Cement companies in Indonesia

Domestic Capacity (2016)

1. Semen Indonesia 30 mt
2. Semen Andalas 1.6 mt
3. Semen Baturaja 2.0 mt
4. Indocement TP 25.9 mt
5. Holcim Indonesia 12.1 mt
6. Semen Bosowa 6.0 mt
7. Semen Kupang 0.5 mt
8. Semen Jui Shin 2.0 mt
9. Semen Puger 0.3 mt

New Players 2016

10. Semen Merah Putih 4.0 mt

2016F
11. Semen Anhui Conch 1.7 mt
• Design Capacity : 89.7 mt 12. Siam Cement 1.8 mt
• Production Capacity : 75.5 mit 13. Semen Pan Asia 1.8 mt
• Domestic Growth : 5.5%
• Domestic Utilization: 87%
•Supply TOTAL 89.7 mio ton
 Domestic : 65 mt
 Export : 4.0 mt
 Import : 1.5 mt

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Opportunity Regional Cement Market

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Semen Indonesia’ sales volume

Million tonnes Nov-16 Nov-15 Change (%) 11M16 11M15 Change (%)
Indonesia
Semen Indonesia 1.26 1.38 -8.9% 12.76 12.77 0.0%
Semen Padang 0.56 0.67 -16.1% 5.75 5.84 -1.5%
Semen Tonasa 0.48 0.56 -13.4% 4.99 4.93 1.1%
Total domestic 2.31 2.61 -11.7% 23.50 23.54 -0.2%
Exports 0.07 0.03 127.8% 0.55 0.45 22.6%
Total volume from Indonesia 2.37 2.64 -10.2% 24.05 23.99 0.3%
Vietnam
Domestic Vietnam 0.16 0.15 5.7% 1.66 1.44 15.2%
Exports 0.06 0.06 3.1% 0.67 0.69 -2.0%
Total volume from Vietnam 0.21 0.20 5.0% 2.33 2.12 9.7%
Total volume 2.59 2.85 -9.1% 26.38 26.11 1.0%

Source: Company data, Indonesia Cement Association

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Indonesia cement sales volume
SMGR sales volume (million tons)
Nov-16 Nov-15 Change (%) 11M16 11M15 Change (%)
Domestic
Semen Indonesia 1.26 1.38 -8.9% 12.76 12.77 (0.0) Semen Indonesia:
Semen Padang 0.56 0.67 -16.1% 5.75 5.84 (1.5) • Bag 75.5%
Semen Tonasa 0.48 0.56 -13.4% 4.99 4.93 1.1
Total domestic 2.31 2.61 -11.7% 23.50 23.54 (0.2)
• Bulk 24.5%
Export 0.07 0.03 127.8% 0.55 0.45 22.6
Total volume 2.37 2.64 -10.2% 24.05 23.99 0.3
Market share 40.2% 41.4% -1.2% 41.6% 41.8% -0.2%
Industry:
• Bag 76.1%
Indonesia domestic sales volume (million tons)
Area Nov-16 Nov-15 Change (%) 11M16 11M15 Change (%)
• Bulk 23.9%
Jakarta 0.44 0.50 (11.7) 4.37 4.89 (10.6)
Banten 0.28 0.31 (7.1) 2.72 3.01 (9.8)
West Java 0.81 0.99 (18.2) 7.97 8.50 (6.2)
Central Java 0.73 0.77 (4.2) 7.09 6.67 6.3
Yogyakarta 0.09 0.09 (8.4) 0.89 0.89 0.2
East Java 0.78 0.83 (5.7) 7.74 7.49 3.4
Total Java 3.14 3.48 (10.0) 30.78 31.45 (2.1)
Sumatera 1.32 1.37 (4.1) 12.34 11.78 4.8
Kalimantan 0.36 0.45 (20.1) 3.85 4.36 (11.7)
Sulawesi 0.52 0.53 (3.7) 4.96 4.32 14.7
Nusa Tenggara 0.29 0.33 (10.1) 3.23 3.17 1.8
Maluku & Papua 0.12 0.14 (16.5) 1.35 1.26 7.1
Total outside Java 2.60 2.82 (7.9) 25.73 24.90 3.3
Total Indonesia 5.74 6.31 (9.0) 56.50 56.34 0.3
Export
Cement 0.07 0.06 16.8 0.48 0.53 (9.2)
Clinker 0.03 0.02 77.5 1.01 0.45 127.7
Total export 0.10 0.08 31.9 1.50 0.97 53.4
Grand total 5.84 6.38 (8.6) 58.00 57.32 1.2
Source: Company data, Indonesia Cement Association

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Domestic market consumption

Bulk • Ready-mix (infrastructure): ± 60%

± 24% • Fabricator (pre-cast, fiber cement, cement based industry): ± 35%
• Projects (mortar, render): ± 5%

Bag
±76% • Housing: ± 90%
• Cement based industry: ± 10%

Source: Internal Research

Retail (residential) sector is the largest consumer of cement

in Indonesia

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Market by Geography
National cement distribution Population distribution

Semen Indonesia’ market destinations Domestic Market Share

Source: Company data, Central Bureau of Statistics, Indonesia Cement Association

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Current overcapacity condition

Source: Internal Research, Indonesia Cement Association

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Long-term demand growth 6% pa

Source: Company data, Indonesian Cement Association & BPS Statistic

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Key factors supporting domestic cement demand

 Infrastructure Development 
 Housing
 Population Growth
Infrastructure Spending Planned for 2015 – 2019
(USD Bn)  Rising per Capita Income

113 433  Mass urbanization

172 42
106 
 Cement Consumption (kg/capita)

Central Regional SOEs Private Total

Govt Govt

 Commercial and Industrial
 High growth in retail, commercial and
institutional sector in urban and semi-urban area 
 Demographic Bonus
 High growth industry segment (precast, light brick,
cement fiber, pave, ready mixed concrete) Rapidly Growing
Productive Population


 Potential Market
The fourth largest population in the world: 240
millions people (2014)
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Arising infrastructure activities

Source: Company data, Indonesia Cement Association

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Strategic Projects
Rembang Project – Central Java
Investment Construction
Strategic Projects Capacity
(US$mn)
Start Completion
Indarung VI- 3.0
352 Q2-2013 Q4-2016
Sumatera Barat Mt
Rembang – 3.0
403 Q2-2013 Q4-2016
Jawa Tengah Mt
Grinding mill 2.0
61.1 Q2-2015 Q4-2016
Jawa Barat Mt
Waste Heat
Recovery Power 30.6 MW 49.3 Q4-2014 Q4-2016
Generation Pre-heater area
Indarung Project – West Sumatra
Projects completed in 2015:
• Packing Plant Pontianak
• Packing Plant Balikpapan
• Packing Plant Lampung
• Grinding Plant Dumai
• New Coal Mill Tonasa

These strategic projects are to ensure the Clinker Storage

Company’ position as the market leader.
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 Our facilities
Kiln 1 unit
Integrated Cement Plant 4 location
Cement Mill
1 unit Kiln 13 Unit
Cement Mill 22 Unit
Grinding Plant 2 location
Cement Mill 4 Unit
Grinding 1 unit Cement
Plant Mill Warehouse 30 location
Packing Plant 25 location
Sea Port 12 location

Kiln 4 unit
Cement Mill 6 unit

Kiln 4 unit Kiln 4 unit

Cement Mill 9 unit Cement Mill 6 unit
Grinding 3 unit Cement
Plant Mill
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Financial Summary – First nine month of 2016
In Rpbn 9M16 9M15 Change EBITDA
Revenue 19,082 19,115 -0.2%
Cost revenue 11,509 11,602 -0.8%
Gross profit 7,574 7,513 0.8%
Operating expenses 3,621 3,352 8.0%
Operating income 3,953 4,160 -5.0%
EBITDA 5,130 5,207 -1.5%
Pre-tax profit 3,868 4,102 -5.7%
Net profit after minority 2,929 3,198 -8.4%
EPS (Rp) 494 539 -8.4%
Ratio
EBITDA margin 27% 27% 0%
Gross margin 40% 39% 0% Net profit
Interest coverage - x 20 19 1
Cost ratio 79% 78% 1%
Net debt to equity 0.08 0.05 3%
Debt to equity 0.18 0.16 2%
Debt to EBITDA 0.74 0.59 14%
Receivable turnover - days 55 52 3

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Balance Sheet
Cash balance (Rpbn) Total debt (Rpbn)

Debt/EBITDA (x) Net Debt/Equity

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Margin & Returns
Return on Equity (%) Return on Assets (%)

EBITDA/t (US$/t) Receivables Turnover (days)

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 Cost structure
Rp000/t 9M16 9M15 Change Cash COGS Rp000/t
Raw materials 33 37 -11%
Fuel 108 110 -2%
Electricity 94 104 -9%
Labor 53 53 2%
Maintenance 50 54 -8%
Depreciation 51 49 6%
GA,tax,insurance 21 20 5%
Packaging 29 27 5%
Transportation 67 85 -22%
Others 41 53 -22%
Cost of goods sold 549 592 -7%
Unit cash COGS (US$/t) 497 544 -9%
Selling expense 102 93 10%
G&A 74 75 -2%
Total cost 584 613 -5% Energy prices in US$/unit

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EBITDA margin vs utilisation rate

Source: Company data

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EBITDA margin vs oil and coal prices

Source: Company data

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Development New Industrial Estates is a catalyst for
cement demand

Semen Indonesia
Packing Plant
New Industrial
Estate Area

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Infrastructure Projects (2015 – 2019)
Sector Amount % of total
If 1% from total project
(Rptn)
Road infrastructure 733 15%
value were spent for
Railway infrastructure 226 5% cement, we estimate
Sea transportation 591 12% cement requirement for
Air transportation 144 3% these projects of around
Land transportation 47 1% 10-12 mt per annum.
Urban transportation 86 2%
Electricity infrastructure 1,000 21% Infrastructure budget cut
Oil & gas infrastructure 507 11% Rp7tn for 2016, but not
Telecommunication and Information infrastructure 280 6%
affecting main trans road in
Water resources 451 9%
Papua and Java.
Drinking and waste water 403 8%
Housing 328 7%
Total 4,796 100%
Annual spending 959 20%
APBN-P 2016 2,083
APBN-P for infrastructure 2016 314 33%
Private portion 645 67%
Source: Bappenas

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Infrastructure Spending in State Budget
Amount in Rp trillion 2017 2016 2015
APBN APBN-P APBN APBN-P
Economic infrastructure 336.9 307.1 302.3 280.0
Ministrial spending 161.0 151.2 165.5 196.4
Ministry of Public Work and Public Housing 102.9 94.7 101.7 111.1
Ministry of Transportation 44.9 39.9 45.5 59.1
Ministry of Agriculture 2.9 4.1 5.3 8.9
Ministry of Energy and Mineral Resoures 3.8 3.7 4.6 8.1
Non-ministrial spending 2.7 5.9 5.3 6.8
Transfer to Region and Village Fund 133.7 88.0 83.4 41.0
Payment Funding 39.5 62.1 48.3 35.7
Social infrastructure 5.5 5.7 6.5 6.5
Infrastructure support 4.2 4.2 4.4 3.9
Ministry of Agrarian & Spatial Planning 0.2 0.3 0.3 1.3
Ministry of Industry 0.6 0.4 0.5 0.3
Total 346.6 317.1 313.5 290.3
Source: Ministry of Finance

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Instrastructure funding is priority
 The infrastructure is the
government’ priority
 Gets funding priority despite tax
revenue not achieving target
 Key risks are more on the project
risks such as land acquisition.
 Increasing government’ debt to
around US$137bn by end of 2015
 Government’s securities also
increased to around Rp1.37tn by
end of 2015

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Semen Indonesia highlights
BRIEF HISTORY SMGR CAPACITY BUILD-OUT (MM TONS)
31,8 mn tons
 1957 : Inauguration of Gresik I, installed capacity of 35,0
250,000 ton cement per annum
30,0
 1991 : Initial Public Offering, Market Cap.: IDR0.63tn,
resulting shareholding structure post IPO: 25,0

●Government of Republic of Indonesia: 73% 20,0

●Public: 27% 15,0
 1995 : Acquisition of PT Semen Padang (Persero) and 10,0
PT Semen Tonasa (Persero)
5,0
 1998 : Cemex became a strategic partner, Market Cap.:
IDR4.9tn 0,0
 2006 : Blue Valley Holdings bought Cemex’s 24.9%

19 7
19 0
80

19 4
85

19 6
90

19 5
19 7
98

20 6
20 7
20 8
09
10

20 1
20 2
13

20 4
15
5
7

9
9

0
0
0

1
1

1
19

19

19

19

20

20
20

20
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 April 30,
2010: IDR72.1tn
 2011 : Total installed capacity of 20.00mm tons, Market
Cap per June 29, 2012: IDR67.0tn
 2012 : Acquisition of Thang Long Cement Vietnam, Total
installed capacity of 2.3mm tons, Market Cap Dec 19th,
2012: IDR91.9tn
 2013: Transformed to PT Semen Indonesia (Persero)
Tbk as strategic holding co.

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Semen Indonesia as strategic holding company

Komposisi Pemegang Saham Per 31 PT Krakatau Semen

50,0%
Desember 2015 SG SP ST TLCC Indonesia

99,9% 99,9% 99,9% 70,0% PT United Tractors

55,0% Semen Gresik

CEMENT COMPANY 97,0%

PT SGG Energi Prima

PT Industri Kemasan
60,0%

NON CEMENT COMPANY

Semen Gresik

PT Kawasan Industri
65,0%
Gresik

PT SGG Prima Beton

No Shareholders % 99,99%

1 Government RI 51.01
24,95% PT Varia Usaha
2 Foreign Institution 36.94

25% PT Swadaya Graha

3 Foreign Individual 0.03

4 Domestic Institution 10.58 PT Eternit Gresik

17,6%
5 Domestic Individual 1.43
PT SISI
85%

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 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 Indonesia (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 Indonesia (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 Indonesia (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.

Main Office: Representative Office:

Main Building of Semen Gresik
Jln. Veteran Gresik 61122 – Indonesia
Phone: (62-31) 3981731 -2, 3981745
Fax: (62-31) 3983209, 3972264
The East Building, 18 floor
Jl. Lingkar Mega Kuningan Blok E 3.2 No. 1,
JAKARTA – 12950
Telp.: 021 – 5261174, 5261175;
Faks : 021 – 5261176

www.semenindonesia.com

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