Dangote Cement Plc · NSENG:DANGCEM
Dangote Cement — 9M 2017 Earnings Presentation
41 slides from Dangote Cement's earnings presentation, October 2017
Slide 1: Dangote Investor Presentation
SBR DANGOTE INVESTOR ny PRESENTATION Building Prosperity in Africa
Slide 2: Overview of Dangote Cement
Overview of Dangote Cement isere CEMENT Revenue EBITDA NB Margin 45.6Mta NB Sub-Saharan Africa's largest cement producer capacity across 10 countries Largest company in porRDe West Africa Fl4«FYIS.—OFYI6.~—OOmM 16. Om 17 Fla. FYIS. ss FYI6. «Om 16. SMI7 by market capitalisation; Only one of #3,750bn
Slide 3: Our Capacity
Our Capacity SENEGAL 1.5Mta SIERRA LEONE O.5Mta Integrated Tika Import & bagging NIGERIA 29.25Mta ‘Obajana, Ibese, ‘Gboks, ‘OPERATION Integrated SINCE 2011 : SINCE 2007 ‘Aganang, Delmas ’ Integrated EN DANGOTE CEMENT ETHIOPIA 19% eB isso" aaa meses ly Sy ra cae, ans a) TANZANIA ZAMBIA ia SINCE 2015
Slide 4: Strong Financial Performance
Strong Financial Performance pAere CEMENT 2012 2013 2014 2015 2016 Revenue EBITDA m&Cash flow from operations mCapex mi Dividend paid Investor Presentation I reseconen ret
Slide 5: Strong Volume Growth
Strong Volume Growth pAere CEMENT Million tonnes 2010 2011 2012 2013 2014 2015 2016 mNigeria) mCameroon wmEthiopia mGhana mSenegal mSouth Africa mTanzania mZambia Investor Presentation I wreseconen res
Slide 6: Why Cement in Sub-Saharan Africa?
Why Cement in Sub-Saharan Africa? pAere CEMENT Cement is an essential building material Sub-Saharan Africa significantly lags with no viable substitutes, Africa needs —————* *— global average per-capita cement billions of tonnes in coming decades consumption FUTURE , DEMAND DCP’s key markets are Nig
Slide 7: African Cement Market
African Cement Market + Increasing demand for cement as urbanisation continues across the continent, demanding more infrastructure, housing and commercial building + Increasing political stability enabling rapid economic growth * Steady population growth, younger and more mobile population drive the
Slide 8: Cement consumption by region
4,500 140 4,000 120 3,500 100 3,000 2,500 80 2,000 60 1,500 40 1,000 20 500 0 0 2010 2011 2012 2013 2014 2015 2016E 2017F 2018F Australasia Central America Central Europe Eastern Europe Indian Sub-continent Middle East North Africa North America North Asia South America South Asia Sub-Saharan Africa
Slide 9: Cement consumption (Mt)
80 70 60 50 Cement consumption (Mt) 40 30 20 10 0 2012 2013 2014 2015 2016E 2017F 2018F Cameroon Congo Ethiopia Ghana Nigeria Senegal Sierra Leone South Africa Tanzania Zambia
Slide 10: Strategic Raw Material Access
Strategic Raw Material Access pAere CEMENT * Limestone is the key and irreplaceable ingredient of all types of modern cement * Commercially viable deposits of limestone are relatively scarce across many parts of Africa — Ideally need high-quality limestone to be near demand v centres, fuel and distr
Slide 11: Strategic Goals
Strategic Goals pAere CEMENT OUR OUR VISION To be a global leader in cement production, recognised for the quality of our products and services and for the way we conduct our business GOAL To deliver superior and sustainable risk-adjusted returns on our investments Strategic Pillars Focus on Continu
Slide 12: High Level of Business Integration
High Level of Business Integration Aare CEMENT Operating Challenges in Africa * Developed internal power generation capabilities to become self- : 1. sufficient in markets where the electrical grid is poorly developed or Power Availability nonexistent * On-site power plants at production facilities
Slide 13: Competitive Advantages
Competitive Advantages Investor Presentation BUYING POWER Cuts procurement costs, increases returns FAVOURABLE MARKETS Incentives, fragmented industry LARGER PLANTS Economies in procurement, operations NEW MINES Easier and cheaper access to materials MODERN TECHNOLOGIES Higher efficiency, lower-cost
Slide 14: Board and Committees
Board and Committees ote CEMENT Board of Directors Aliko Dangote “) Devakumar Edwin Onne van der Weijde == Emmanual Ikazoboh* Brian Egan Fidelis Madavo Olakunle Alake Joseph Makoju Sani Dangote Olusegun Olusanya* Abdu Dantata Dorothy Ufot* Ernest Ebi" Douraid Zaghouani Finance & General Audit, Compl
Slide 15: Strong Corporate Governance
Strong Corporate Governance International standards of governance Achieved Premium Listing status on the Nigerian Stock Exchange, August 2015 — Followed rigorous audit of governance policies June 2016 appointment of first female director, Mrs Dorothy Ufot, SAN — Adds strong legal experience Four Ind
Slide 16: 9M 2017 results
SHR DANGOTE CEMENT 9M 2017 results Building Prosperity in Africa Investor Presentation
Slide 17: 9m 2017 Highlights
9m 2017 Highlights isere CEMENT Nine months to 30th September 2017 2016 Change * Group revenue up 36.5% Sales volumes ‘ooot ‘oot * Group EBITDA up 64.9% 9,630 11,913] (19.2%) at margin of 48.8% 6535 | 7.5% (85) * Nigeria EBITDA up 64.8% with (10.19%) strong margin Improvement Revenues um Nm © Pan-Af
Slide 18: Year to Date
Year to Date SR DANGOTE CEMENT Q1 2017 Q2 2017 Q3 2017 9m 2017 9m 2016 % change Sales volumes ‘O0Ot ‘O0Ot ‘O0Ot ‘O0Ot ‘O0Ot 3,770 3,085 2,775 9,360 11,913 (19.2%) 2,342 2,405 2.274 7,022 6,535 7.5% (87) (6) (49) (143) (85) (10.1%) Revenues sim sm m im Rm Nigeria 152,355 139,040 124,718 416,113 307,7
Slide 19: Group Financial Overview
Group Financial Overview EN DANGOTE CEMENT Nine months to 2017 2016 30th September Nm Nm % change Revenue 603,575 442,092 36.5% Cost of sales (259,854) (231,684) 12.2% Gross profit 343,721 210,408 63.4% Gross margin 57.0% 47.6% EBITDA 294,306 178,444 64.9% EBITDA margin 48.8% 40.4% EBIT 233,139 122,
Slide 20: Group Financial Overview (cont'd): Movement in Net Debt
SR G Fi ial O i ' roup Financial Uverview (cont'd) DANGOTE - CEMENT Movement in Net Debt Cash Debt Net Debt sm m Am As at 1st January 2017 115,693 (356,465) (240,772) Cash generated from operations before changes in working capital 282,851 282,831 Changes in working capital (29,998) (29,998) Income
Slide 21: Financial Overview (cont'd)
Financial Overview (cont'd) ote ceMENT As at 30/9/17 As at 30/12/16 mM sm Property, plant and equipment 1,197,425 1,155,711 Other non-current assets 78,297 64,888 Intangible Assets 5,119 4,145 Current Assets 234,597 187,471 Cash and Cash Equivalents 130,124 115,693 Total Assets 1,645,562 1,527,908 N
Slide 22: Analysis of Debt
Analysis of Debt a DANGOTE CEMENT NB Short-term* Long-term Total % Naira 209 28 237 61% US$ 35 10 45 11.5% Rand 3 42 45 11.5% Other 16 45 61 16% *including overdraft * $190B debt is to parent company * Low US$ debt exposure, mainly in relation to LCs * DCP Nigeria lends to country operations in US$,
Slide 23: Credit Ratings Published
Credit Ratings Published isere CEMENT > Mo ODY S | GCR| GLOBAL CREDIT RATING CO. | Local Expertise # Global Presence Ba3 Local Currency Corporate Family Rating, Aaa.ng National Scale Rating AA+(NG) and A1+(NG) ratings Dangote Cement Plc’s Ba3 local The ratings take cognisance of the currency corpora
Slide 24: Strong Nigeria performance
Strong Nigeria performance pAere CEMENT Revenues up 36.5% despite fall in volumes — Estimated 6596 share Quarterly sales (‘000 tonnes) : 5,000 EBITDA margins up 64.8% — Helped by better fuel mix Coal and gas use increased — Own-mined coal now available to all plants 4,000 = — Significantly reduced i
Slide 25: Revenue and EBITDA per tonne
₦ 50,000 5,000 ₦ 45,000 ₦ 40,000 ₦ 45,070 ₦ 44,943 4,500 ₦ 35,000 ₦ 40,412 ₦ 30,000 ₦ 37,817 65.7% 4,000 64.8% 64.4% ₦ 25,000 65.7% ₦ 28,192 ₦ 28,961 ₦ 20,000 ₦ 23,743 ₦ 29,630 3,500 ₦ 25,738 ₦ 15,000 ₦ 19,780 61.8% 53.3% ₦ 26,175 61.0% 44.0% ₦ 10,000 ₦ 14,674 ₦ 13,729 3,000 ₦ 24,859 ₦ 12,060 ₦ 12,4
Slide 26: Cement price per bag and per tonne
₦ 2,400 $190 $180 ₦ 2,200 $170 ₦ 2,000 $160 ₦ 1,800 $150 $140 ₦ 1,600 $130 ₦ 1,400 $120 ₦ 1,200 $110 ₦ 1,000 $100 ₦/bag (LH scale) $/tonne (RH scale)
Slide 27: Better Nigeria Fuel Mix Reduces Costs
Better Nigeria Fuel Mix Reduces Costs pAere CEMENT Fuel mix Nine months to 30 September Obajana Ibese 2017 2016 2017 2016 Gas 41% 45% 43% 30% Coal 57% 18% 56% 49% LPFO 2% 37% 1% 21% 100% 100% 100% 100% per tonne of clinker As at September 2017 Obajana Ibese Own-mined coal 0.84x 0.88x Imported coal 1
Slide 28: Nigeria Cash Cost Analysis
Nigeria Cash Cost Analysis pAere _ Power Plant Production wages & Sala Maintenance manpower Maintenance jum supplies DANGOTE CEMENT O&M Technical _ Contract Maintenance Cash cost is approximately $38/tonne, 9m to Sept 2017 Investor Presentation
Slide 29: Pan-Africa Growing Well
Pan-Africa Growing Well * Sales volumes up 7.5% to 7.OMt * Revenues up 40.4% * Strong performances in key markets * Cameroon sales volumes up 16% * Ethiopia volumes up 16.8% * Senegal volumes up 21.7% * Congo now onstream, 1.5Mta Pan-Africa perfor Nine months to 30% September 2017 2016 Change Volume
Slide 30: Country Updates: Cameroon, Congo, Ethiopia
Country Updates Cameroon 3.7% GDP growth forecast by IMF in 2017 Housing, infrastructure, football driving cement demand 938Kt cement sold, up 16.4% Estimated 46% market share Increasing brand recognition, strengthening relationships with distributors Pricing about $110/tonne in September 1.5Mta pla
Slide 31: Country Updates: Ghana, Senegal, Sierra Leone
Country Updates isere CEMENT Ss WH) © Strong economic growth IMF forecasts 6.8% GDP growth Economy recovering from forecast to support expanding oil in 2017 Ebola, GDP growth expected : : oni and gas industries 1.OMt cement sold in 9M 2017, 6.9% in 2017 (World Bank) 670kt cement sold in up 21.7% on
Slide 32: South Africa, Tanzania, Zambia
South Africa Tanzania Zambia
Slide 33: Tanzania power plant, Pan-Africa, Nigeria
• • Tanzania power plant, 100 • Pan-Africa, 140 • Nigeria, 60
Slide 34: Appendix
SIR DANGOTE CEMENT APPENDIX Building Prosperity in Africa Investor Presentation
Slide 35: Sustainability
Sustainability pase CEMENT * Dangote Cement is committed to introducing sustainability reporting in its 2018 Annual Report * Reporting will be guided by: — Nigerian Stock Exchange requirements on sustainability reporting — Cement Sustainability Initiative — Global Reporting Initiative G4 Sustainabil
Slide 36: Manufactured vs Imported Cement
25 Manufactured Imported 20 15 10 5 0 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Slide 37: Pioneer Tax schedule
Pioneer Tax schedule SR DANGOTE CEMENT Gboko 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Ibese 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Line 1 Line 2 Line 3 Line 4 Obajana 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Line 1 Line 2 Line 3 Line 4 Inves
Slide 38: Investment in Plants
Investment in Plants ote CEMENT $m Obajana 1,895 Ibese 1,440 Gboko 561 NIGERIA $3,897m Cameroon 138 Congo 312 Ethiopia 521 Senegal 358 Sierra Leone 52 South Africa 330 Tanzania 540 Zambia 358 PAN-AFRICA $2,609m AL | NB. Total investment in Nigeria is $5.3B including coal mills, logistics and other c
Slide 39: Country Statistics & Information
Country Statistics & Information pAere CEMENT Cameroon Congo Ethiopia Ghana Nigeria Senegal SierraLeone South Africa. Tanzania Zambia Demographic & economic 233 46 99.4 27.4 182.2 15.1 6.5 54.5 Se} 16.2 5.7% 4.3% 8.9% 7.5% 1.0% 6.8% 6.9% 1.19% 7.1% 4.0% 52.0% 64.0% 17.0% 51.0% 50.0% 47.0% 41.0% 62.0
Slide 40: Regional Cement Consumption Trends
Regional Cement Consumption Trends SR DANGOTE CEMENT 2010 2011 2012 2013 2014 2015 2016E 2017F 2018F — CAGR 2010-18F Mt Mt Mt Mt Mt Mt Mt Mt Mt % Australasia 13.1 13.2 119 10.5 11.2 113 114 11.8 12.0 -1.19% Central America 50.3 517 53.4 52.9 55.0 58.1 59.1 60.6 613 2.5% Central Europe 43.1 46.5 42.5
Slide 41: Investor Relations Contacts
INVESTOR RELATIONS CONTACTS For further information contact: Carl Franklin Head of Investor Relations. Dangote Cement Plc +44 207 399 3070 BOARD. 3a SRR } DANGOTE | CEMENT