Sephaku Holdings Limited · JSE:SEP

Sephaku — Investor Presentation (May 2014)

26 slides from Sephaku's investor presentation, May 13, 2014

  1. Slide 1: Investor Presentation

    INVESTOR PRESENTATION DR. LELAU MOHUBA CHIEF EXECUTIVE OFFICER MAY 2014 13 May 2014 1

  2. 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 industr

  3. Slide 3: The Sephaku Story

    THE SEPHAKU STORY EXPLORATION Sephaku commenced business in 2006 as an HDSA-owned, mineral exploration company seeking opportunities brought about by changes in the MPRDA. Limestone and Fluorspar resources were quickly identified and proven as the most viable reserves in Sephaku's portfolio. This re

  4. Slide 4: Execution Time Line – Strategic Refocus

    EXECUTION TIME LINE – STRATEGIC REFOCUS • SepHold obtains • Listing on the JSE • Acquisition of first prospecting • 155 805 362 Métier Mixed rights shares issued Concrete enhancing shareholder value Growth 2005 2009 2010 2011 2012 2013 2014 • Production • Unbundling • African Nickel of cement of Inc

  5. Slide 5: The Sephaku Holdings Structure

    THE SEPHAKU HOLDINGS STRUCTURE www.sephakuholdings.co.za 13 May 2014 5

  6. Slide 6: Overview - Location of Assets

    OVERVIEW - LOCATION OF ASSETS Pretoria Johannesburg Durban Operations Aganang Cement Plant Delmas Milling Plant Sephaku Ash Cape Town Dwaalboom project Métier Mixed Concrete Note: Project locations not actual but indicative for illustrative purposes www.sephakuholdings.co.za 13 May 2014 6

  7. Slide 7: Building and Construction Materials Company

    BUILDING AND CONSTRUCTION MATERIALS COMPANY • 100% ownership; acquired in February 2013 for R365 million • Specialist in the manufacture, distribution and marketing of high-value ready mixed concrete • Fleet size, pumping division and advanced production technology enhances efficiency • Ten plants i

  8. Slide 8: Operational Highlights for the Interim Period FY 2014

    OPERATIONAL HIGHLIGHTS FOR THE INTERIM PERIOD FY 2014 ENDED 30 SEPTEMBER 2013  Initial reporting period of revenue  Métier sales constitute 100% of the revenue  Positive earnings : group profit  Sephaku Cement to contribute profit by end of CY 2014  Métier concrete sales increased by 35%  High

  9. Slide 9: Financial Highlights for the Interim Period FY 2014

    FINANCIAL HIGHLIGHTS FOR THE INTERIM PERIOD FY 2014  Operating profit of R33,8 million compared to the operating loss of R10,1 million for end of September 2012  Earnings before interest, taxation, depreciation and amortisation (“EBITDA”) of R40,3 million compared to the loss before interest, taxa

  10. Slide 10: Share Price Performance

    SHARE PRICE PERFORMANCE Share ticker: JSE (MAIN) SEP • Share has performed consistently better that Sector Construction and Materials the index since January Listing 2009 2013 to March 2014 Issued shares 189 872 979 • Attained position 13 on Closing price @ 6 May 2014 R6.60 the JSE one year top Mark

  11. Slide 11: Share Price Performance

    SHARE PRICE PERFORMANCE Peer performance January 2013 to March 2014 140% Sephaku has 120% consistently 100% outperformed its peers on share price 80% performance for the 60% period. % 40% 20% 0% Jan-13 May-13 Sep-13 Jan-14 -20% -40% Sephaku Company A Company B Company C Company ~Market Capitalisatio

  12. Slide 12: Our View on the Cement Industry

    OUR VIEW ON THE CEMENT INDUSTRY Metier supplying concrete at a construction site in Durban www.sephakuholdings.co.za 13 May 2014 12

  13. Slide 13: The South African Cement Industry Trends

    THE SOUTH AFRICAN CEMENT INDUSTRY TRENDS • Cement demand 7 Rate % growth was at 6% in 2013 6 › Growth at 3% per annum 2010 – 2012 5 • Residential plans YOY growth at 14,6% 4 and 19,7% for non-residential plans² 3 • Long-term cement growth trend projected 2 at 4,5%³ at a multiplier of 1.5 to GDP 1 0

  14. Slide 14: SA Plant Capacity Analysis – 2014

    SA PLANT CAPACITY ANALYSIS – 2014 Number of opera.ng Average opera.ng Es.mated cement kilns kiln age tonnes per annum (000') Producer A 3 27 3,200 Producer B 3 37 3,900 Producer C 9 38 5,600 Producer D 2 19 1,800 TOTAL 17 37 14,500  Production capacity determined by kiln instead of milling capacity

  15. Slide 15: SA Cement Capacity vs Demand: 2006 – 2020

    SA CEMENT CAPACITY vs DEMAND : 2006 – 2020  Capacities are based on 20 Sephaku's entry SepCem research, using Millions and ramp-up the maximum estimated clinker capacity of each 15 producer, combined with the estimated extender ratios to produce finished cement 10 Industry operating at  Demand for

  16. Slide 16: Construction Demand Drivers 1/2

    CONSTRUCTION DEMAND DRIVERS 1/2  Public and private sector building and construction potential investment  Bulk water infrastructure : R14.2 billion  Roads : R149 billion  Power generation : R300 billion  Education institutions : R140 billion  Residential demand in line with improved incomes 

  17. Slide 17: Construction Demand Drivers 2/2

    CONSTRUCTION DEMAND DRIVERS 2/2  Backlog in infrastructural projects coupled with the government’s NDP 18 defined strategic infrastructure projects (SIPs). Targeted cement-intensive projects include;  SIP 1:Unlocking the Northern Mineral Belt  SIP 2:Durban ,Free State & Gauteng Logistics and Indu

  18. Slide 18: SA Cement Market Overview

    SA CEMENT MARKET OVERVIEW Aerial view of Delmas milling plant : April 2014 www.sephakuholdings.co.za 13 May 2014 18

  19. Slide 19: Typical Industry Customer Channels: Relative Demand

    TYPICAL INDUSTRY CUSTOMER CHANNELS : RELATIVE DEMAND 50,0% 45,0% 40,0% 35,0% 30,0% 25,0% 20,0% 15,0% 10,0% 5,0% 0,0% Readymix Precast Resellers Blenders Civil Building Other Mining Producers (C.P.M.) % per channel 48,2% 18,3% 14,7% 5,8% 5,4% 4,4% 1,8% 1,5%  Resellers the largest volume customer cat

  20. Slide 20: SepCem's Approach to the Market

    SEPCEM’S APPROACH TO THE MARKET  Target to attain 20 – 25% of the inland market share  Resultant national market share of 13 -17%  To produce three cement strengths : 32.5R , 42.5R and 52.5N  Essentially 32.5 R and 42.5 R will be produced for the bag market  Bulk market to be supplied with the

  21. Slide 21: Competitive Edge to Industry Average

    COMPETITIVE EDGE TO INDUSTRY AVERAGE  Energy utilisation efficiency: 95 kWh per tonne as compared to 145 kWh per tonne  Consistent cement quality: single 6 000tpd kiln for clinker  Logistical advantage: proximity of Delmas to extender source, coal supply and the market  Environmental impact: low

  22. Slide 22: Our Brand New Plants

    OUR BRAND NEW PLANTS Delmas milling plant : April 2014 www.sephakuholdings.co.za 13 May 2014 22

  23. Slide 23: Unique Features of Our Plants

    UNIQUE FEATURES OF OUR PLANTS  Latest generation primary impact-crusher : Germany  Latest limestone roller-screening technology for beneficiation : Germany  Latest pyro-processing technology :air-separate pre-calciner kiln with 5-stage preheater  Latest generation high-impulse multi-channel main

  24. Slide 24: Conclusion

    CONCLUSION Bulk cement truck departing Delmas plant for the market : April 2014 www.sephakuholdings.co.za 13 May 2014 24

  25. Slide 25: SepHold Investment Case

    SEPHOLD INVESTMENT CASE  Key management ~ 250 years combined experience in cement manufacturing and technology  Technologically advanced plants  Profitable concrete asset providing solid earnings and cash flow  Focused strategy on the lucrative cement manufacturing sector  Potential share price

  26. Slide 26: Contact

    CONTACT Sakhile Ndlovu Investor Relations Officer Tel : + 27 12 622 9400 Email : Sakhile@sepman.co.za www.sephakuholdings.co.za 13 May 2014 26

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