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Cement Industry Overview in Indonesia 2018

Explore the corporate presentation on the Indonesian cement industry, covering market shares, growth factors, market consumption, key strategies, and financial summaries as of August 2018.

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Cement Industry Overview in Indonesia 2018

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  1. PT Semen Indonesia (Persero) Tbk. And the Prospect of Indonesia Cement Industry Corporate Presentation - August2018

  2. Cement Companies in Indonesia Domestic Capacity 2017 Total 107.4Mio Ton 2017 SMGR market share 2017 was 40.8% despite of only 33.4% capacity share

  3. Sales Volume August 2018 (in Ton) Semen Indonesia Group Industry - Domestic source: company data, Indonesia Cement Association Note: The market data is not final since one small player has not updated its sales volume.

  4. Domestic and SMGR’s MarketConsumption (up to August 2018) • –Type of Cement Domestic Demand SMGR Sales • Ready-mix (infrastructure): ± 60% • Fabricator (pre-cast, fiber cement, cement based industry): ± 35% • Projects (mortar, render): ± 5% source: Indonesia Cement Association • Housing: ± 90% • Cement based industry: ±10% Demand Growth by Type • Retail(residential) sector is still the largest consumer of cement in Indonesia • Bulk cement growth is higher than bag cement in the last two years. Bulk demand growth up to August 2018 was 12.3% while demand for bag was 2%

  5. Market by Geography – up to August 2018 SMGR is still the dominant player in all regions other than West Java & Jakarta where the competition is more intense SMGR MS 38% SMGR MS 42% SMGR MS 54% 6% of total national demand SMGR MS 55% 8% of total national demand 22% of total national demand 2% of total national demand SMGR MS 17% WEST JAVA, DKI JAKARTA, BANTEN SMGR MS 42% 26% of total national demand SMGR MS 28% SMGR MS 66% CENTRAL JAVA 16 % of total national demand EAST JAVA 6% of total national demand 14% of total national demand Overall Market Share up to August: 39.4%

  6. Key Factors Supporting Domestic Cement Consumption • Infrastructure Development • Cement Consumption per Capita (2016) Continuous increase in infrastructure budget (RpTn) Source: Ministry of Finance • Commercial & Industrial • High growth in retail, commercial and institutional sector in urban and semi-urban area • High growth industry segment (precast, light brick, cement fiber, pave, ready mixed concrete) • Interest Rate BI policy on interest rate is expected to remain low which drives demand for housing loan • LTV Policy Bank Indonesia loosening macro-prudential policies in the form of an increase in Loan to Value Ratio • Potential Market • The fourth largest population in the world: 267 millions people (2017) • Demographic bonus: rapidly growing productive population in Indonesia Average (ex China) = 462 kg

  7. Our facilities

  8. Opportunity Regional Cement Market

  9. Financial Summary 1H-2018

  10. Cost of Revenue Breakdown 1st Half 2018

  11. Balance Sheet Total Interest Bearing Debt (IDRbn) Cash Balance (IDRbn) Net Debt/Equity Debt/EBITDA (x)

  12. Dividend Pay Out Dividen Pay Out (DPO) Dividend Per Share (DPS)

  13. 2018 - KEY STRATEGY (Growth) Strategy Refresh • Supply Chain Optimization • Centralize Marketing • Centralize Procurement Cost Transformation & Enable Corporate Growth

  14. 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. HeadOffice: Gedung Utama Semen Indonesia Jalan Veteran,Gresik 61122, East Java– Indonesia Phone: (62-31) 3981731 -2, 3981745 Fax: (62-31) 3983209, 3972264 Representative Office: The East Tower, 18th floor JalanDr. Ide Anak Agung Gde Agung Kav. E3.2 No. 1 Jakarta12950, Indonesia Telp.: (62-21)– 5261174, 5261175; Fax : (62-21)– 5261176 www.semenindonesia.com

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