PUBLIC EXPOSE - Indocement Tunggal Prakarsa, PT.

PUBLIC EXPOSE
Jakarta, 19 March 2010

Agenda
• General Information about Indocement
• Indonesia Current Market Condition
• Financial Update
• Investment Plan Strategy
• Outlook
• Corporate Social Responsibility
• Awards
2

Indocement history
1985
• PT Indocement Tunggal Prakarsa (“Indocement”) incorporated
following merger of 6 companies owning 8 cement plants
1989 • Public listing of Indocement on the Indonesia Stock Exchange
1991
• Acquired plant 9 in Palimanan
• Completed Surabaya cement terminal
• Started Ready-Mix concrete business
1996-1999 • Completed plants 10 and 11 in Palimanan and Citeureup
2000
2001
2003
2005
• Acquired Plant 12 via merger with PT Indo Kodeco Cement
• HeidelbergCement Group becomes a major shareholder
through its subsidiary Kimmeridge Enterprise Pte. Ltd.
• Kimmeridge Enterprise Pte. Ltd. transferred shares in
Indocement to HC Indocement GmbH
• Introduced Portland Composite Cement (“PCC”) product to
Indonesian market
•
2006 HC SE Asia GmbH, was merged into HeidelbergCement AG
which then controlled 65.14% shares of Indocement
• Acquisition 51% stake in PT Gunung Tua Mandiri
2007 • Completed modification of plant 8 which provided an additional
annual capacity of 600,000 tons of cements
2008 • Highest volumes in history: domestic sales of 12.3mn tons
2009 • Placement of 14.1% Heidelbergcement’s Shares in June 2009
3

Indocement today
Leading Indonesian producer of quality & specialty cement products
• 2nd largest cement manufacturer in Indonesia, listed on the
Indonesia Stock Exchange
• Integrated cement operations with a total current production
capacity of 17.1mn tons
• Diversified product range including
– PCC, Portland Cement I, II and V, Oil Well Cement, and
– Only producer of White Cement in Indonesia to date
• World’s largest cement producer HeidelbergCement Group is the
majority & controlling shareholder
• Over 6,000 employees
• Well established “Tiga Roda” brand
Public
36%
PT Mekar
Perkasa
13%
Birchwood
Omnia Limited,
Inggris
(100% owned
by HC Group)
51%
4

Indocement’s business divisions
Cement is the core division comprising over 95% of sales
INDOCEMENT
Cement Ready-mix concrete Others
• Citeureup - 9 Plants
• Cirebon - 2 Plants
• Tarjun - 1 Plant
• PT Indomix Perkasa –6
Plants (Capacity :
360.000 cubic meter)
• PT Pionirbeton
Industri* – 7 Plants
(Capacity : 420.000 cubic
meter)
• Effective per October 2009, Indocement had fully controlled
PT Bahana Indonor by acquiring 50% shares of PT BI from
Gearbulk
• In December 2009, Indocement had fully owned PT
Mandiri Sejahtera Sentra. Total investment costs is USD
10.5 mio with the total aggregates reserve of 95 mt.
• PT Dian Abadi Perkasa – 99.9%
(Cement Trading)
• PT Multi Bangun Galaxy* –
99.9% (Terminal-Land Operation)
• PT Pama Indo Mining - 40%
(Mining Services in Tarjun)
• PT Bahana Indonor - 100%
(Owns & operates one ship &
one floating terminal)
• PT Cibinong Center Industrial
Estate - 50% (Industrial Estate in
Citeureup)
• Indocement (Cayman Island)
Limited - 99.9% (Investment)
• PT Gunung Tua Mandiri - 51%
(Aggregates Business)
• PT Mandiri Sejahtera Sentra –
100% (Aggregates Business)
• PT Mineral Industri Sukabumi
100% (Trass Quarry)
5

Indocement Plant Locations and Major Terminal
Tj. Priok Terminal
Semarang Terminal
Tarjun Factory
1 plants with production
capacity of 2.6mt
Citeureup Factory
9 plants with
production capacity
of 11.9mt
Cirebon Factory
2 plants with production
capacity of 2.6mt
Surabaya Terminal
Lombok Terminal
Total current capacity of Indocement is 17.1 mt cement and an additional 1.5 mt cement in Cirebon
plant will be ready in April or May 2010. Therefore, total cement capacity will be 18.6 mt.
6

Indonesia Cement Market Analysis
47.5 mt
+1.8%
27.5 mt
47.5 mt
+9.7%
30.2 mt
46.1 mt
+4.2%
31.5 mt 31.9 mt
44.9 mt 45.5 mt 46.2 mt 46.2 mt
+1.5%
+7.0%
34.2 mt
+11.4%
38.1 mt
38.4 mt
+0.9%
2003 2004 2005 2006 2007 2008 2009
Domestic Consumption Total Supply Consumption Growth
Source: ASI Published data
• The domestic cement consumption reached 38.4 million tons in 2009, grew only by 0.9% compared to
38.1 million tons in 2008.
• In the second semester 2009, the domestic market in particular after the fasting month was robust and
rebounding very significant and even the strong consumption can remove the negative growth in the first
semester of -7%.
• In addition, the 4th quarter of 2009 is the strongest quarter whereby domestic consumption growth
to17.7% YoY.
7

Domestic Consumption Growth by area – 2009
Market Growth:
>20%
15-20%
10-15%
5-10%

Market Shares Composition
Source: ASI data
29.8%
15.2%
25.1%
12.3%
7.9%
30.6%
12.7%
24.4%
13.6%
8.4%
30.9%
14.6%
21.7%
14.2%
8.6%
31.7%
14.1%
21.9%
13.5%
8.3%
30.2%
13.8%
22.2%
13.0%
9.4%
2005 2006 2007 2008 2009
Indocement Holcim Semen Gresik Semen Padang Semen Tonasa
Note:
Gresik Group is a combination of Semen Gresik, Padang, and Tonasa
Indocement’s market share in 2009 was 30.2% compared to the same period last
year at 31.7%.
9

12-month rolling average growth of domestic consumption
Mainly due to our proximity Plant location to high demand market & our ample capacity, we
have continuously outperformed the market
• Due to Indocement keep its price-leader position in its home market, it costs less
growth rate than national growth especially valid in down-turn condition of domestic
cement market
6.5% 7.5% 9.9% 11.2%
11.7% 11.5% 10.9% 11.3%
12.0%
10.1%
10.8% 10.8%
7.7% 8.1%8.6%
18.9%
18.0%
15.1%
13.4%
18.2% 17.8%
18.9%
16.7%
14.2%
10.5%
7.1%
-1.9%
-2.5%
-1.4%
-2.2%
-2.0%
-1.0%
2.7%
3.3%
4.1%
4.4%
6.1%
7.2%
8.2%
9.5%
8.9%
11.2%
7.6%
7.0%
7.1%
8.1%
9.1%
11.0%
11.8%
13.3%
13.3%
11.8%
11.7%
12.7%
12.0%
11.4%
9.6%
8.2%
6.0%
3.4%
0.2%
0.9%
1.2%
1.4%
4.5%
1.1%
Note: Data based on report of Indonesia Cement Association
10
0.4%
-4.1%
-7.1%
-9.7%
-10.4%
-8.9%
-8.0%
-3.8%
-7.6%
-1.2%
Feb 06 - Jan 07
Mar 06 - Feb 07
Apr 06 - Mar 07
May 06 - Apr 07
Jun 06 - May 07
Jul 06 - Jun 07
Aug 06 - Jul 07
Sep 06 - Aug 07
Oct 06 - Sep 07
Nov 06 - Oct 07
Dec 06 - Nov 07
Jan 07 - Dec 07
Feb 07 - Jan 08
Mar 07 - Feb 08
Apr 07 - Mar 08
May 07 - Apr 08
June 07 - May 08
July 07 - June 08
Aug 07 - July 08
Sep 07 - Aug 08
Oct 07 - Sep 08
Nov 07 - Oct 08
Dec 07 - Nov 08
Jan 08 - Dec 08
Feb 08 - Jan 09
Mar 08 - Feb 09
Apr 08 - Mar 09
May 08 - Apr 09
Jun 08 - May 09
Jul 08 - Jun 09
Aug 08 - Jul 09
Sep 08 - Aug 09
Oct 08 - Sep 09
Nov 08 - Oct 09
Dec 08 - Nov 09
Jan 09 - Dec 09
Feb 09 - Jan 10
Mar 09 - Feb 10
National ITP

Indocement Sales Highlights
Market Share
29,7%
30,6%
30,9%
31,7%
30,2%
9.6 mt 10.0 mt
10.7 mt
12.3 mt 11.8 mt
2.5 mt
3.2 mt
3.8 mt
2.3 mt
1.6 mt
2005 2006 2007 2008 2009
Domestic
Export
• Cement domestic sales volumes reached 11.8 million tons, an decrease of 3.9% from
12.3 million tons in 2008 but it’s a substantially improve from negative growth of 14% in
the first half 2009.
• Meanwhile, export sales volume was reduced to 1.6 million tons from 2.3 million tons in
2008 as the weakened global economy effect
• Domestic market share in 2009 was 30.2% vs 31.7% in 2008
• Total sales in 2009 of 13.4 mt was 8% lower than last year (PY: 14.6mt)
11

Financial Results 2009
Consolidated Income Statement
2009
2008
Change
Comments
Sales Volume (k Tons)
13,455
14,662
-8%
Lower domestic sales by 4% and export
sales volume by 45%
Net Revenues
10,576
9,780
8%
Maintaining price policy but with the
consequence of lower market share
Cost of Revenues
5,468
5,756
-5%
Lower production volume, stronger IDR;
only the most efficient kilns were running
in low sales season, successful in
renegotiating of purchase price of major
material & fuels- cause our production
cost/ ton only increase by 4%
Gross Profit
as % of Net Revenues
5,108
48.3%
4,025
41.1%
27%
Operating Expenses
1,415
1,565
-9.6%
Fixed Cost under strict control & lower
logistics cost due to fall in fuel &
reduction of tariff
Income from Operations
as % of Net Revenues
3,693
34.9%
2,460
25.2%
50%
EBITDA
as % of Net Revenues
4,263
40.3%
3,059
31.3%
39%
Interest Expenses
-40
-124
-68%
In line with ongoing de-gearing, incl.
repayment of Rp550bn loan in 1Q09
Forex Gains/(Losses)
-8
-73
89%
NET INCOME
2,747
1,746
57%
12

Financial Results 2009
Consolidated Balance Sheet & Financial Highlights
2009
2008
Comments
Current Assets
5,323
3,471
Significant increase in cash & cash equivalent
balance following strong free operating cash flow in
3Q09 and effort to manage tight working capital in all
aspect
Non Current Assets
7,953
7,815
Mainly related to increase of capital expenditures
Current Liabilities
1,771
1,944
Repayment of outstanding balance of
Rp550bn(US$50m) loan from HC Finance B.V.
Non Current Liabilities
801
821
Mainly related to the decrease in obligation under
capital lease and deferred tax liability
Equity + Minority Interest
10,704
8,522
Assets
13,276
11,287
Solid Balance Sheet with strong financial condition
• The outstanding loan balance per 31 December 2009 is only USD 25 mio revolving loan.
• Cost of fund: LIBOR plus 90 bps
• Gearing ratio and debt level at the lowest level in more than a decade.
13

Capex Plan Strategy:
Strategically positioned to capitalize on 2009 demand and beyond
• Two new cement mills of 1.5 million tons of cement will be in commercial operation by
April 2010 with total investment costs about USD35mio
• Future Plan: Additional one new cement mills with capacity of 1.5 MT per annum to be
constructed in Citeureup and be ready for operation by beginning 2012.
• If the market demand keeps strong, Indocement is also preparing itself to expand into
new kiln and cement factory in next 3-4 years period. Indocement is currently conducting
several geological survey and feasibility study to determine its location of the new kiln of
2-3 MT capacities.
• We concentrated in two locations:
– Existing of our factory i.e. Citeureup and Tarjun
– In Central Java area
+ 0.6 mt
+ 1.5 mt
+ 2.0 mt
+ 2~3 mt
16.5 mt
17.1 mt
18.6mt
21.1 mt
23.1
2005 2007 2010 2012 2014
• 2 x 50 MW Coal fired power plants is also one of the future consideration
14

Investments in our “vertical integration strategy”
Aggregates:
• In December 2009, Indocement had completed 100% owned of PT Mandiri Sejahtera
Sentra (MSS) quarry with 0.5 MT p.a. existing capacity and total of about 95 MT
reserve in Purwakarta – West Java
• The acquisition had leaded Indocement as a market leader with the total 115 million
tons aggregate reserves including 51% shares own in PT Gunung Tua Mandiri
Ready-Mix:
• Plan to install 3 new batching plants, loaders and new truck mixers to strengthening
our ready-mix business in order to anticipate GoI infrastructure projects and the
recovery of property market in the near future
115 mt
MSS
22 mt
GTM
GTM
2007 2009
15

Other Investments:
Logistics:
• Acquire 50% of PT Bahana Indonor (to make 100% shares ownership now)
• PT Bahan Indonor owns two vessels:
1. the MV Tiga Roda: a 10,000 DWT pneumatic cement carrier and
2. the MV Quantum One: a 8,000 tonne capacity barge / floating terminal with
bag and bulk discharging capabilities.
MV Tiga-Roda
MV Quantum One
16

Market outlook
• In the last four months of 2009 domestic demand was robust and rebounding.
By having positive rebound on the latest domestic cement consumption, we
forecast domestic demand to grow by 6% in 2010
• Current and continuing benign inflation outlook, low interest rate and stable
currency environment are the key drivers to boost the construction activities
• The housing shortage is still one of the catalyst for cement demand. The
Indonesian Real Estate Association estimates Indonesia needs 800,000
houses a year to cater to the 4 million net increase in population.
• Strong consumptive nation, e.g half of population is at age 25 years or below,
along with fast growth urbanization
• The trend of a stronger residential market than the infrastructure or high-rise
building still continues in 2010, but we expect some higher proportion of bulk
cement (about 25~30%) after the Governmental infrastructure projects are
executed
• Continuing IDR appreciation will help costs of production structure since more
than 60% costs in USD equivalent
17

Corporate Social Responsibility (CSR)
MILLENNIUM DEVELOPMENT GOALS
TRIPPLE BOTTOM LINE
• Integrate the principles of
sustainable development
into country policies and
programs; reverse loss of
environmental resources
• Reduce by half the proportion
of people living on less than a
dollar a day;
• Achieve full and productive
employment and decent work
for all, including women and
young people;
• Reduce by half the proportion
of people who suffer from
hunger
18

Sustainable Development Program
• Jatropha Curcas plantation.
• Management of municipal waste
• Biogas from Cow Manure
• Integrated Goat Farming
• Supporting home-scale production of a
world-class product
19

Community Development Program
The Five Pillars
• Education
• Economy
• Health
• Social-culture-religion-sport
• Security
20

Awards 2009
• 15 January 2009: The Best 4 in Corporate Governance Awards 2008 for
Indonesia companies - The Asset, Hongkong.
• 23 February 2009: Indocement obtained Gold Award and 1st Best Award
in “Indonesian CSR Awards 2008” and Indocement HR Director, Kuky
Permana, succeeded in obtaining 1st Best in “Indonesian CSR Awards
2008”
• 19 June 2009 - Indocement’s received award from the Governor of West
Java for the implementation of CDM program in its production activity.
• 27 July 2009: Top Brand Award 2008 for cement category
• 28 July 2009: Silver Medal of Sustainable Engineering Award - Granted by
the Indonesian Engineer Association (Persatuan Insinyur Indonesia) for
the achievement in the environmental sustainable development.
• 12 August 2009: Indonesia’s Most Admired Company Award (IMAC) 2009
– as “The Best Performance Company Image” for cement category.
21

Awards 2009
• 15 October 2009: - Gold Rating (Citeureup factory) & Green Rating
(Palimanan factory) for PROPER 2008-2009 from from Ministry of
Environment of the Republic Indonesia
22

Thank You
23