Dangote Cement Plc · NSENG:DANGCEM
Dangote Cement — FY2017 Earnings Presentation
39 slides from Dangote Cement's earnings presentation, March 2018
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 siment Highlight EBITDA §B 45.6Mta Margin capacity across 10 countries Sub-Saharan Africa's largest cement producer Largest company in ONO Eis West Africa ae Ee by market capitalisation; Only one of €4,516bn / US$12.58bn* three companies FYi4 FYI5 FYI6 FYI7 Ya
Slide 3: Our Capacity
Our Capacity oAsere CEMENT SENEGAL : Me ETHIOPIA 1.5Mta 4 Z 3.0Mta INTEGRATED Ue : j INTEGRATED CONGO SIERRA LEONE mee 1.5Mta 0.5Mta : _ INTEGRATED IMPORT : \ 4 TANZANIA ¢ 4 3.0Mta GHANA j INTEGRATED 1.5Mta NIGERIA J ZAMBIA IMPORT 29.3Mta . 1.5Mta INTEGRATED INTEGRATED CAMEROON 1.5Mta CLINKER GRINDI
Slide 4: Strong Financial Performance
Strong Financial Performance oAsere CEMENT 2012 2013 2014 2015 2016 2017 Revenue EBITDA m&Cash flow from operations mCapex mi Dividend paid Investor Presentation I reseconen ret
Slide 5: Strong Volume Growth
Strong Volume Growth oAsere CEMENT 2 2010 2011 2012 2013 2014 2015 2016 2017 mNigeria m= Cameroon Congo mEthiopia mGhana mSenegal mSierraLeone mSouth Africa mTanzania Zambia Investor Presentation I wreseconen res
Slide 6: Why Cement in Sub-Saharan Africa?
Why Cement in Sub-Saharan Africa? oAsere 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 Ni
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)
70 60 50 Cement consumption (Mt) 40 30 20 10 0 2012 2013 2014 2015 2016 2017E 2018F Cameroon Congo Ethiopia Ghana Nigeria Senegal Sierra Leone South Africa Tanzania Zambia
Slide 10: Strategic Raw Material Access
Strategic Raw Material Access oAsere 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 dist
Slide 11: Strategic Goals
Strategic Goals oAsere 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 Contin
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 Board of Directors Aliko Dangote (’) Joseph Makoju Brian Egan Olakunle Alake Sani Dangote Abdu Dantata Emest Ebi* Devakumar Edwin Emmanuel Ikazoboh* Fidelis Madavo Olusegun Olusanya* Viswanathan Shankar* Dorothy Ufot* Douraid Zaghouani SR DANGOTE CEMENT Finance & General Risk Co
Slide 15: 2017 Results
SIR DANGOTE CEMENT 2017 Results Building Prosperity in Africa Investor Presentation
Slide 16: FY 2017 Highlights
FY 2017 Highlights isere CEMENT t FINANCIAL Year to 31st December 2017 2016 Change 5 Sales volumes ‘o00t ‘ooot % * Group revenue up 31.0% ToT 75,128 (15.5%) * Group EBITDA up 50.9% — —_ at margin of 48.2% we i * Nigeria EBITDA up 49.1% with strong Revenues km xm % margin improvement to 65.3% Nigeria
Slide 17: Year in Detail
Year in Detail SR Sales volumes DANGOTE CEMENT Ql 2017 Q2 2017 Q3 2017 Q4 2017 FY 2017 FY 2016 % change ‘O0Ot ‘O0Ot ‘ooot ‘O0Ot ‘O0Ot ‘O0Ot 3,770 3,085 2,774 3,095 12,724 15,128 (15.9%) 2,342 2,401 2.280 2,342 9,365 8,639 8.4% (87) (54) (33) (174) (192) (7.0%) Revenues sim em sim em sim 8m % change
Slide 18: Group Financial Overview
Group Financial Overview Year to 2017 2016 31st December Nm Nm | % change Revenue 805,582 615,103 31.0% Cost of sales (351,290) (323,816) 8.5% Gross profit 454,292 291,287 56.0% Gross margin 56.4% 474% 20.3pp EBITDA 388,147 257,243 50.9% EBITDA margin 48.2% 41.8% 6.4pp EBIT 304,208 182,493 66.7% EBI
Slide 19: Impact of Tax Change
Impact of Tax Change oAsere CEMENT * Company remains confident that Pioneer Previous treatment applications will be approved by NIPC fobajana_| 2009 | 2010 | 2011 2012 | 2013 2014 | 2015 | 2016 | 2017 | 2018 | 2019 + Pioneer tax relief taken for the two-year extension on Lines 1&2 Ibese and Line 3 O
Slide 20: EBITDA Development
EBITDA Development ott cunt aa ‘iinet NB Nigeria Cameroon Congo* Central costs Total Ethiopia Ghana Senegal Sierra Leone* ‘ South Africa Tanzania start-ups Zambia * Impact of loss-making operations just breaking even would increase Pan-African margin to 22% * Levers of EBITDA improvement in 2018: —
Slide 21: Movement in Net Debt
SR Lt a | a Group Financial Overview «.::.) DANGOTE - CEMENT Movement in Net Debt Cash Debt Net debt sm m m As at 1st January 2017 115,693 (356,465) (240,772) Cash generated from operations before changes in working capital 379,701 379,701 Changes in working capital (31,351) (31,351) Income tax paid
Slide 22: Group Financial Overview
Group Financial Overview «..::: As at 31/12/17 As at 31/12/16 mM sm Property, plant and equipment 1,192,140 1,155,711 Other non-current assets 57,089 66,084 Intangible Assets 6,355 4,145 Current Assets 241,912 187,471 Cash and Cash Equivalents 168,387 115,693 Total Assets 1,665,883 1,529,104 Non-cur
Slide 23: Strong Nigeria Performance
Strong Nigeria Performance oAsere CEMENT Revenues up 29.6% despite fall in volumes — Estimated 65% market share Ciurian) Salles (O00) “oumes) 5,000 EBITDA up 49.1% — Helped by better fuel mix Coal and gas use increased — Own-mined coal now available to all plants 4,000 = — Significantly reduced impo
Slide 24: Nigeria revenue and EBITDA per tonne
₦ 50,000 5,000 ₦ 45,000 ₦ 40,000 ₦ 45,070 ₦ 44,960 ₦ 44,023 4,500 ₦ 35,000 ₦ 40,412 ₦ 30,000 ₦ 37,817 65.7% 66.3% 4,000 64.8% 64.4% ₦ 25,000 65.7% ₦ 28,192 ₦ 28,972 ₦ 20,000 ₦ 23,743 ₦ 29,630 3,500 ₦ 29,176 ₦ 25,738 ₦ 15,000 ₦ 19,780 61.8% 53.3% ₦ 26,175 44.0% 61.0% ₦ 10,000 ₦ 14,674 ₦ 13,729 3,000
Slide 25: Nigeria Price Development
Nigeria Price Development oAsere CEMENT Ex-factory price after discounts and other rebates 2,200 $200 aN $180 7 \ $160 | f~—\ $140 1,600 AS ; $120 § 2,000 1,800 § 1,400 $100 § 1,200 V ae $80 ¥ 1,000 $60 OS LY Dm PM DO OO DO HM © © WO © O wo Ww NN NN & & & & Ss & we & & we we ao & we we x yw & oul we
Slide 26: Nigeria's Key Markets, 2017
Nigeria’s Key Markets, 2017 oAsere CEMENT Corporate, 4% North West, 7% North East, 7% Lagos, 22% Investor Presentation
Slide 27: Better Nigeria Fuel Mix Reduces Costs
Better Nigeria Fuel Mix Reduces Costs < DANGOTE CEMENT Fuel mix Year to 31st December Obajana Ibese 2017 2016 2017 2016 Gas 60% 45% 61% 41% Coal 38% 26% 38% 43% LPFO 2% 29% 1% 16% Relative cost of fuels vs gas per tonne of clinker As at December 2017 Obajana Ibese Own-mined coal 0.8x 0.9x Imported c
Slide 28: Nigeria Cash Cost Analysis
Nigeria Cash Cost Analysis xed Kiln Fuel a Power Plant Production Wages & Salaries SR DANGOTE CEMENT Maintenance Manpower Mine Costs Cash cost was approximately $35/tonne in FY2017 65% of cash costs are US Dollar based, though less than 20% paid in Dollars Investor Presentation
Slide 29: Pan-Africa Growing Well
Pan-Africa Growing Well pase CEMENT * Sales volumes up 8.4% to 9.4Mt sales ('000 tonnes) * Revenues up 32.5% to %258.4B * EBITDA up 48.5%, higher volumes and pricing * Strong performances in key markets — Cameroon sales volumes up 14.8% — Ethiopia volumes up 13.2% — Senegal volumes up 21.4% * Congo,
Slide 30: Country Updates: Cameroon, Congo, Ethiopia
Country Updates Cameroon 4.0% GDP growth estimate by IMF for 2017 Housing, infrastructure, football driving cement demand 1,.2Mt cement sold, up 14.8% Estimated 46% market share Increasing brand recognition, strengthening relationships with distributors Pricing averaged $106 across 2017 1.5Mta plant
Slide 31: Country Updates: Ghana, Senegal, Sierra Leone
Country Updates isere = ee Strong economic growth 1.3Mt cement sold in 2017, up Economy recovering from forecast to support expanding oil 21% on 2016 Ebola, GDP growth expected at : : . oni and gas industies 8 0 GDP Coal shortage affected Sept. 6.0% in 2017 production, but issue resolved Steady star
Slide 32: South Africa, Tanzania, Zambia
South Africa Tanzania Zambia
Slide 33: Appendix
SIR DANGOTE CEMENT APPENDIX Building Prosperity in Africa Investor Presentation
Slide 34: Sustainability
Sustainability pase CEMENT + First Sustainability Report published in 2017 Annual Report * Reporting guided by: — Nigerian Stock Exchange requirements on sustainability reporting — Cement Sustainability Initiative — Global Reporting Initiative G4 Sustainability Reporting Guidelines * Focus upon: — C
Slide 35: 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 2017
Slide 36: 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 37: Investment in Plants
Investment in Plants oestE 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
Slide 38: Country Statistics & Information
Country Statistics & Information oAsere 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 4.0% 3.6% 8.5% 5.9% 0.8% 6.8% 6.0% 0.7% 6.5% 4.0% 52.0% 64.0% 17.0% 51.0% 50.0% 47.0% 41.0% 62.0
Slide 39: 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