Dangote Cement Plc · NSENG:DANGCEM
Dangote Cement — Investor Presentation (May 2017)
30 slides from Dangote Cement's investor presentation, May 2017
Slide 1: Group presentation May 2017
SAR DANGOTE CEMENT =a Group presentation May 2017 \l BOARDA —
Slide 2: At a glance
At a glance • Largest cement producer in Africa, 45.8Mta capacity as of May 2017 – Operations in 10 countries across Africa • Delivering strong financial and operating performance – 6.0Mt cement sold through operations in ten countries in Q1 2017 – Q1 2017 revenues of ₦208.2bn, up 48% on Q1 2016 – Q
Slide 3: Our presence
SR DANGOTE Our presence CEMENT < g = & & s = 3 B
Slide 4: Our achievements so far
Our achievements so far Before we began manufacturing, Nigeria was one of the world’s biggest importers of cement. In 2012 we opened 11Mta new capacity that enabled it to become self-sufficient In 2016 we transformed Nigeria into a NET EXPORTER OF CEMENT +45.4% 4
Slide 5: Strong financial growth
Strong financial growth 700 600 +47% +46% 500 400 ₦B 300 200 100 0 2012 2013 2014 2015 2016 Revenue EBITDA Cash flow from operations Capex Dividend paid 5
Slide 6: Strong volume growth
Strong volume growth 25 20 20.4% CAGR 15 Million tonnes 10 5 0 2010 2011 2012 2013 2014 2015 2016 Nigeria Cameroon Ethiopia Ghana Senegal South Africa Tanzania Zambia 6
Slide 7: Why Sub-Saharan Africa? Why cement?
Why Sub-Saharan Africa? Why cement? Cement is an essential building material with no Sub-Saharan Africa viable substitutes, significantly lags global Africa needs billions of average per-capita cement tonnes in the coming consumption Key markets are decades Nigeria, Ethiopia, South Africa; Africa is
Slide 8: Overview of African cement market
Overview of African cement market Positive long-term mega-trends Rapid increase in urbanisation presents strong opportunity • Increasing political stability enabling rapid economic growth 2,500 • Steady population growth, younger profile increases need for building Rural Urban Millions 163m more urb
Slide 9: Strategic raw material access
Strategic raw material access • 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 centres, fuel and distribution network
Slide 10: Strategic initiatives and goals
Strategic initiatives and goals To be Africa’s leading producer of cement, respected for the quality of Vision its products and services and for the way it conducts its business Goal To deliver superior and sustainable risk-adjusted ROI, IRR on our investments • Key elements of business model – Targ
Slide 11: How we create value
How we create value Size and buying power Careful market selection Larger scale of plants New quarries enable enables favourable looks for countries with built with high degree of optimal mining of procurement of plants at good resources, cement standardisation and highest quality raw lower cost; br
Slide 12: Board and Committees
Board and Committees Board of Directors Aliko Dangote (1) Onne van der Weijde Olakunle Alake Sani Dangote Abdu Dantata Ernest Ebi* Devakumar Edwin Emmanual Ikazoboh* Fidelis Madavo Joseph Makoju Olusegun Olusanya * Dorothy Ufot * Douraid Zaghouani Finance & General Audit, Compliance & Remuneration &
Slide 13: Strong corporate governance
Strong corporate governance International standards of governance Improving corporate disclosure • Achieved Premium Listing status on the Nigerian Stock Exchange, August 2015 Annual Report Pages • Followed rigorous audit of governance policies 250 232 214 • June 2016 appointment of first female dire
Slide 14: Q1 2017 highlights
Q1 2017 highlights • Strong financial performance despite volume fall 3m to 31st March 2017 2016 Change Sales volumes ‘000t ‘000t • Revenues up 48.1% Nigeria 3,770 4,513 (16.5%) Pan-Africa 2,342 1,937 21.0% • Group EBITDA up 42.3% Inter-company sales (87) (15) • Nigeria EBITDA / tonne up 78.4% Total
Slide 15: Financial overview
Financial overview Income Statement Three months to 31st March 2017 2016 ₦B ₦B % change Comments Revenue 208.2 140.5 48.1% Cost of sales (87.8) (62.2) 41.2% Gross profit 120.4 78.3 53.7% Gross margin 57.8% 55.7% EBITDA 103.0 72.4 42.4% Strong uplift from Nigeria after price increase EBITDA margin 49
Slide 16: Financial overview (cont’d)
Financial overview (cont’d) Movement in net debt Cash Debt Net debt ₦B ₦B ₦B As at 1st January 2017 115.7 (356.5) (240.8) Cash generated from operations before 108.2 - 108.2 changes in working capital Changes in working capital (9.1) - (9.1) Income tax paid (0.1) - (0.1) Additions to fixed assets (1
Slide 17: Financial overview (cont’d)
Financial overview (cont’d) Balance sheet As at As at 31/3/17 31/12/16 ₦B ₦B Property, plant and equipment 1,151.3 1,155.7 Other non-current assets 67.6 64.9 Intangible assets 5.0 4.1 Current assets 211.0 187.5 Cash and cash equivalents 143.9 115.7 Total Assets 1,578.8 1,527.9 Non-current liabilitie
Slide 18: Analysis of debt
Analysis of debt ₦B Short-term* Long-term Total % Naira 159 20 179 55% US$ 40 13 53 16% Rand 7 40 47 15% Other 11 34 45 14% Total 217 107 324 100% *Including overdraft • Most short-term debt is to parent; plan to refinance with Naira bond • Low US$ debt exposure, mainly in relation to LCs • DCP Nige
Slide 19: Strong Nigeria performance
Strong Nigeria performance • Strong improvement in Q1 EBITDA Nigeria performance – EBITDA per tonne of ₦26,175 (Q1 2016: ₦14,674) Three months to 2017 2016 Change 31st March – Higher pricing Volumes* (kt) 3,770 4,513 (16.5%) – Better fuel mix including own-mined coal Revenue* (₦B) 152.4 107.2 42.2%
Slide 20: Strong uplift in Nigeria Q1 EBITDA
Strong uplift in Nigeria Q1 EBITDA ₦ 45,000 4,513 4,500 ₦ 40,000 4,253 ₦ 35,000 ₦ 40,412 ₦ 37,817 ₦ 30,000 4,000 64.8% ₦ 25,000 65.7% ₦ 28,192 ₦ 20,000 ₦ 23,743 ₦ 25,738 3,770 ₦ 15,000 ₦ 24,859 61.8% 53.3% 3,500 44.0% ₦ 10,000 ₦ 26,175 ₦ 14,674 3,233 3,130 ₦ 13,729 ₦ 5,000 ₦ 12,407 ₦0 3,000 Q1 2016
Slide 21: Nigeria price evolution
Nigeria price evolution Ex-factory price before discounts (excl. VAT) ₦ 2,600 ₦ 2,533 $200 ₦ 2,462 ₦ 2,400 $189 $190 ₦ 2,224 ₦ 2,200 $180 $177 ₦ 2,081 $176 ₦ 2,033 ₦ 2,000 $170 $167 $166 $164 $160 ₦ 1,800 $156 $160 ₦ 1,652 ₦ 1,629 ₦ 1,567 ₦ 1,581 ₦ 1,600 $150 ₦ 1,462 $145 $137 $142 ₦ 1,400 ₦ 1,327 $
Slide 22: Nigeria fuel mix greatly improved
Nigeria fuel mix greatly improved Three months Relative cost of alternative fuels vs gas per to 31st March Obajana Ibese tonne of clinker 2017 2016 2017 2016 Obajana Ibese Gas 47.9% 66.8% 53.5% 43% Own-mined coal 0.9x 0.9x Imported Locally bought coal 1.0x 0.9x 8.0% 14.6% 30.9% 43% coal Nigerian Imp
Slide 23: Pan-Africa gaining momentum
Pan-Africa gaining momentum • Strong performance despite economic downturn Rest of Africa performance across much of Africa Year ended 2017 2016 Change 31st December • Sales volumes up 21.0% to 2.3Mt Volumes sold (kt) 2,342 1,937 21.0% • Revenues up 74.2% to ₦58.7B • EBITDA up 2.2% to ₦7.5B Revenue
Slide 24: Country updates
Country updates Cameroon Ethiopia • GDP expected to grow by nearly 6% in 2017 • Economy remains robust; increasing number of • Over 300kt cement sold in Q1 2017, up 14% on the government driven projects 261kt old in Q1 2016 • Dangote Cement sold 527kt cement in Q1 2017, up • Market share 43% 17% on
Slide 25: Country updates
Country updates Sierra Leone Tanzania • Surge in building activities after Ebola epidemic • Volumes up 340% to 228Kt • Dangote Cement operations began in January 2017, • Market share of 21% just 12m after launch making first contributions to Group results • Diesel gensets to be replaced by gas • Nea
Slide 26: Update on trading and outlook for 2017
Update on trading and outlook for 2017 • Sharp increase in Nigerian EBITDA/tonne will drive substantial margin gains in 2017, even if volumes are flat • Focus remains on EBITDA in US$ +47% • Volume growth expected from: +46% • Increased exports from Nigeria to Ghana • Tanzania ramp-up in 2017 • New
Slide 27: Sustainability
Sustainability • 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 +47% +46% • Global Reporting Initiative G4 Sustainabilit
Slide 28: Pioneer Tax schedule
Pioneer Tax schedule Gboko 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 +47% +46% 2018 2019 Line 1 Line 2 Ibese 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Line 1 Line 2 Line 3 Line 4 Feb Obajana 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Line 1 Line 2 Line 3 Li
Slide 29: Country capacities
Country capacities Nigeria Cameroon Congo Ethiopia Ghana Producer Capacity Producer Capacity Producer Capacity Producer Capacity Producer Capacity Dangote 29.3 Lafarge 1.7 Dangote 1.5 Dangote 2.5 Ghacem 4.4 Lafarge Africa 10.5 Dangote 1.5 Others 1.5 Mugher 2.2 Diamond 3.0 BUA 3.5 MEDCEM 0.6 Total 3.
Slide 30: Investor Relations contacts
Investor Relations contacts For further information contact: Carl Franklin Head of Investor Relations Dangote Cement Plc +44 207 399 3070 +44-7713 634 834 [email protected] www.dangotecement.com @DangoteCement 30