PPC Limited · JSE:PPC
PPC — Merrill Lynch Investor Conference 2012
16 slides from PPC's conference presentation, Mar 27, 2012
Slide 1: Merrill Lynch Investor Conference
Merrill Lynch Investor Conference Sun City, South Africa 27 to 29 March 2012 1
Slide 2: Contents
Contents Cement South Africa, Zimbabwe, Botswana and Mozambique Lime and Aggregates South Africa, Botswana and exports Rest of Africa Status of projects General investment Dividend tax & policy, carbon tax and information CEO succession 2
Slide 3: South African industry cement demand
South African industry cement demand • Sales volumes by South African producers increased 9.4% during the first five months of PPC’s 2012 financial year. (Oct 2011 to Feb 2012) • However demand in the Western Cape province still reduced during this period. Source: CNCI data, PPC calculations • SA in
Slide 4: Imports into South Africa
Imports into South Africa • Imports not reported in the C&CI# and continue to put pressure on coastal markets. • Imports have been increasing and now represent ~5% of local demand on a 12 month moving average. Ports of entry for imports (by volume)* • ~80% of imports are from Pakistan and the balanc
Slide 5: PPC's South African cement market
PPC’s South African cement market Demand Pricing • Cement volume growth lagging • 5% price increase 1 Feb 2012. industry growth. • Price still has better leverage on • Western Cape continues to lag bottom line than volume. rest of market. • Price strategy has resulted in • Eastern Cape showing good
Slide 6: PPC's South African cost inputs
PPC’s South African cost inputs • Total manufacturing and distribution cost inflation is in low double digits. • Energy • Diesel in Rand per litre up 30% on average for the first half of FY2012. • The reduced electricity tariff price increase will only have a marginal effect on planned electricity c
Slide 7: South Africa capex and acquisitions
South Africa capex and acquisitions • Western Cape modernisation: • Phase 1 – De Hoek Kiln 6 • New clinker cooler will improve efficiency and capacity output. • Commissioning on track for June 2012. • Within budget of R280m. • Phase 2 – New Riebeeck Kiln3 • EIA – submitted & awaiting response from a
Slide 8: Zimbabwe, Botswana and Mozambique
Zimbabwe, Botswana and Mozambique Zimbabwe Botswana • Demand continues to increase, but • Demand significantly down at lower rate than 2011 in-line with government • Production problems at competitor postponing road and other plants continue . infrastructure related • Input cost inflation high, but
Slide 9: Lime and Aggregates
Lime and Aggregates Lime Aggregates • SA volumes up due to improved demand • Improved volumes in Gauteng from steel & alloys industry. market due to improved demand • Better export volumes to Botswana, from regular construction industry Zambia and southern DRC customers and new projects near • Expor
Slide 10: Rest of Africa strategy
Rest of Africa strategy Tunisia Morocco Algeria Libya Western Egypt Sahara Mauritania Mali Niger Chad Sudan Senegal Djibouti Gambia Guinea Burkina Faso Benin Togo Nigeria Ethiopia Sierra Leone Central AR South Ghana Cameroon Liberia Sudan Ivory Coast E Guinea Somalia • Target for manufacturing opera
Slide 11: Rest of Africa strategy
Rest of Africa strategy • Strategy remains to grow revenue outside SA to 40-50% by 2016 (2011 = 18%). • Limited acquisitions possibilities so focussing on green fields opportunities • Plant size between 0.6 and 1million ton per annum. • Capex ~US$200 per annual ton capacity including services and mi
Slide 12: General investment information
General investment information • Dividends • The removal of STC will have minimal impact on the 2012 financial year reducing the effective tax rate by ~1.5 percentage points from 38% to 36.5%. • From 2013 the absence of STC will see the effective tax rate reduce by between 6 and 7 percentage points
Slide 13: Conclusion
Conclusion • Cement demand in South Africa appears to have bottomed during 2011. This combined with government impetus on infrastructure development and job creation bode well for future demand. • Increasing demand will tend to improve operating leverage and margins. • While the current pressure on
Slide 14: Investor contacts
Investor contacts Paul Stuiver Chief Executive Officer Tryphosa Ramano Chief Financial Officer Kevin Odendaal Investor Relations Tel. +27 11 386 9000 www.ppc.co.za 14
Slide 15: Addendum: Southern African cement industry map
Addendum: Southern African cement industry map 15
Slide 16: Disclaimer
Disclaimer This document including, without limitation, those statements concerning the demand outlook, PPC’s expansion projects and its capital resources and expenditure, contain certain forward- looking statements and views. By their nature, forward-looking statements involve risk and uncertainty