Sephaku Holdings Limited · JSE:SEP
Sephaku — Corporate Update (April 2016)
31 slides from Sephaku's corporate update, Apr 14, 2016
Slide 1: Aganang Site Visit Presentation
INVESTOR AGANANG SITE VISIT PRESENTATION : 31 MARCH 2015 AGANANG AGANANGSITE SITEVISIT VISITPRESENTATION PRESENTATION 14 14April April2016 2016 EXPLORATION,DEVELOPMENT,INCOME,GROWTH www.sephakuholdings.com 14 April 2016 1
Slide 2: Disclaimer
DISCLAIMER This presentation includes certain forward-looking information. All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements, including, without limitation, those concerning: Sephaku Holdings’ strategy; the economic outlook for the indust
Slide 3: Agenda
AGENDA Dangote Cement SA (DangCemSA) overview Pieter Fourie South Africa cement market dynamics Pieter Fourie Aganang integrated plant performance Aganang management Sephaku Holdings overview Neil Crafford – Lazarus EXPLORATION,DEVELOPMENT,INCOME,GROWTH www.sephakuholdings.com 14 April 2016 3
Slide 4: Dangote Cement South Africa (DangCemSA), formerly Sephaku Cement
DANGOTE CEMENT SOUTH AFRICA [DANGCEMSA] FORMERLY SEPHAKU CEMENT (PTY) LTD Above: Aganang integrated plant Below: Delmas milling plant EXPLORATION,DEVELOPMENT,INCOME,GROWTH www.sephakuholdings.com 14 April 2016 4
Slide 5: DangCemSA FY 2015 Salient Points
DANGCEMSA FY 2015 SALIENT POINTS Revenue at approximately R2,3 billion for the 12 months ended December 2015 Q4 revenue at R640 million a 1,5% decline from Q3 mainly due to seasonality – The quarter with fewer trading days ¹Overall industry sales volumes including imports at 3,6 million tonnes
Slide 6: Optimisation Programme
OPTIMISATION PROGRAMME To improve margins by enhancing efficiencies During ramp-up focus was on maximising market share Programme targeting the following operational functions Logistics - Rationalisation of volumes and re-negotiation of rates Sales - Refining customer segmentation and prov
Slide 7: DangCemSA Product Mix
DANGCEMSA PRODUCT MIX Approximately 75% - 80% of sales SALES VOLUME SPLIT % volumes in bagged cement 70% in the inland markets Bulk Increasing 42.5 strength class 20% volumes up to 40% by end of December 2015 65% of sales volumes from the rural markets 20% of the sales volumes sold in the
Slide 8: SepCem Brand Equity
SEPCEM BRAND EQUITY All SepCem brand strength classes offer consistent quality Excellent delivery and after-sales service Highly experienced sales and technical personnel to support customers Development and maintenance of strategic relationships with the distribution channel Introduction
Slide 9: Customer Purchasing Decision Process
CUSTOMER PURCHASING DECISION PROCESS • Customer chooses brands from within the consideration set Trusted brand • trusted brand means that the cement is good quality • Customer considers lower price than others in the Affordability competitor set - not necessarily the cheapest • Contractors particula
Slide 10: Sephaku Cement Distinctive Advantage
SEPHAKU CEMENT DISTINCTIVE ADVANTAGE Quality Increased perceptions of Sephaku as a quality cement through in-store communication and sales assistant information Cost Brand Increased perceptions of Sephaku as good Provides consumers with compelling reasons value by cost/value equations on the bag
Slide 11: Sephaku Cement Brand Perceptions
SEPHAKU CEMENT BRAND PERCEPTIONS Perception Customer assertion Sephaku can help one to build the • Very positive message that re-inforces that Sephaku is a buildings of your dreams strong, appealing brand Sephaku is a quality brand • Strong and reliable cement • The idea that people came together to
Slide 12: South Africa Cement Market Dynamics
SOUTH AFRICA CEMENT MARKET DYNAMICS EXPLORATION,DEVELOPMENT,INCOME,GROWTH www.sephakuholdings.com 14 April 2016 12
Slide 13: Industry Analysis
INDUSTRY ANALYSIS RSA cement demand market at 13,8 million tonnes per annum (mtpa) with potential for growth 3,2% year on year cement demand growth including imports in calendar year 2015¹ Market progressively skewed towards bagged cement with high demand in the rural areas Lower demand for
Slide 14: Imports
IMPORTS 900 Volume decline of 37% for the 12 – months 800 ended December 2015 to 820 ktpa 700 600 Reduction mainly due to the tariffs Volumes(000) 500 imposed on the dumped cement from 400 Pakistan 300 200 Approximately 500kt imported in the 100 initial 6 months to the end of June 2015 0 CY '1
Slide 15: DangCemSA Market Positioning
DANGCEMSA MARKET POSITIONING Well positioned in the rural bag market with approximately 65% of the sales volumes Established and solid strategic relationships with the distribution channels Significant share of the Gauteng bulk market through the Métier relationship Strong sales and marketin
Slide 16: Modern Plant Technology & Efficiencies
MODERN PLANT TECHNOLOGY & EFFICIENCIES EXPLORATION,DEVELOPMENT,INCOME,GROWTH www.sephakuholdings.com 14 April 2016 16
Slide 17: Integrated Cement Plant Configuration
INTEGRATED CEMENT PLANT CONFIGURATION Sephaku Development (Pty) Ltd AGANANG MINING OPERATION Limestone Quarry Total limestone mineed = 3 Mtpa Coal from third-party supplier by road transport Raw materials from third-party suppliers by road transport Sephaku Cement (Pty) Ltd Magnetite S tockpile AGAN
Slide 18: The Aganang Value Drivers
THE AGANANG VALUE DRIVERS GOOD QUALITY EFFICIENT EFFICIENT STRATEGIC MARKET RESOURCE PLANT LOGISTICS RELATIONSHIPS • ~1 km from • Only plant in SA with • Several transport • SepCem brand in all Aganang integrated vertical mills across suppliers to the major retail plant the board enhance negotiation
Slide 19: The Winning Operational Team
THE WINNING OPERATIONAL TEAM Mark Hechter Plant Manager Mark has over 25 years experience in cement manufacture at various factories Engineering Manager Production Manager Packing & Despatch Mining Manager Chris van Aswegen Quinton Newton Manager Danie Jacobs Essie Esterhuizen 15 years in the cement
Slide 20: Over 150 Years Combined Experience
OVER 150 YEARS COMBINED EXPERIENCE The plant operates effectively on a lean employee complement of 192 Significantly lower headcount than all competitors High productivity rate per person per tonne The team has successfully improved plant availability through being astute Plant management
Slide 21: Aganang Employees Core to Success
AGANANG EMPLOYEES CORE TO SUCCESS Regular sepcoms – daily, weekly and monthly communication system Highly inclusive Leaders Connect communication system reaching all employees Performance management through a scorecard system and regular feedback An intensive training done to ensure young pe
Slide 22: Commendable Safety Performance
COMMENDABLE SAFETY PERFORMANCE Aganang plant has had no fatalities since inception Plant has had 2 Lost Time Injuries since production commenced 1 * twisted knee – lost 3 days (April 2015) 1 * twisted ankle – lost 1 day (Jan 2016) Extremely low Lost Time Injury Frequency Rate (LTIFR) of
Slide 23: Social Relevance
SOCIAL RELEVANCE Job creation and supporting the development of SMME’s identified as important factors in the sustainability of the local economy and community development strategy. DangCemSA has an Enterprise and Supplier Development programme aimed at mentoring emerging enterprises Has provi
Slide 24: Sephaku Holdings Overview
SEPHAKU HOLDINGS OVERVIEW EXPLORATION,DEVELOPMENT,INCOME,GROWTH www.sephakuholdings.com 14 April 2016 24
Slide 25: Quick Facts
QUICK FACTS Share ticker: JSE (MAIN) Sector Construction and Materials JSE Listing (SEP) 2009 Issued shares 201 224 508 Closing price as at 11 April 2016 420 cents Market capitalisation as at 11 April 2016 R848 million Highest 12 month market capitalisation (April 2015) cR2 billion Group interim rev
Slide 26: Drivers for Success
DRIVERS FOR SUCCESS The group is anchored by the following cornerstones Deep technical, Leading Customer focus Strategic project management technologies that through service relationships and marketing skills facilitate the excellence and deal-making production of high abilities quality cement and m
Slide 27: Our Investment Proposition
OUR INVESTMENT PROPOSITION EXPLORATION,DEVELOPMENT,INCOME,GROWTH www.sephakuholdings.com 14 April 2016 27
Slide 28: Our Investment Proposition
OUR INVESTMENT PROPOSITION EXPLORATION,DEVELOPMENT,INCOME,GROWTH www.sephakuholdings.com 14 April 2016 28
Slide 29: Our Investment Proposition
OUR INVESTMENT PROPOSITION EXPLORATION,DEVELOPMENT,INCOME,GROWTH www.sephakuholdings.com 14 April 2016 29
Slide 30: Our Investment Proposition
OUR INVESTMENT PROPOSITION EXPLORATION,DEVELOPMENT,INCOME,GROWTH www.sephakuholdings.com 14 April 2016 30
Slide 31: Contact
CONTACT Sakhile Ndlovu Investor Relations Officer Tel: + 27 12 612 0210 Email: Sakhile@sepman.co.za Website: www.sephakuholdings.com EXPLORATION,DEVELOPMENT,INCOME,GROWTH www.sephakuholdings.com 14 April 2016 31