Sephaku Holdings Limited · JSE:SEP
Sephaku — Corporate Update (March 2015)
62 slides from Sephaku's corporate update, Mar 31, 2015
Slide 1: Aganang Site Visit Presentation: 31 March 2015
INVESTOR AGANANG SITE VISIT PRESENTATION : 31 MARCH 2015 AGANANG SITE VISIT PRESENTATION : 31 MARCH 2015 EXPLORATION,DEVELOPMENT,INCOME,GROWTH www.sephakuholdings.com 31 March 2015 1
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 indust
Slide 3: Agenda
AGENDA The SepCem group FY14 highlights Cement industry overview Plant technology & efficiencies Integrated plant configuration Quality control Delmas & SepAsh Delmas plant performance SepAsh Sephaku Holdings Overview Group performance update Share price performance Conclusion EXPLOR
Slide 4: Sephaku Cement Group
SEPHAKU CEMENT GROUP Above: Aganang integrated plant Below: Delmas milling plant EXPLORATION,DEVELOPMENT,INCOME,GROWTH www.sephakuholdings.com 31 March 2015 4
Slide 5: The Sephaku Holdings Structure
THE SEPHAKU HOLDINGS STRUCTURE EXPLORATION,DEVELOPMENT,INCOME,GROWTH www.sephakuholdings.com 31 March 2015 5
Slide 6: Overview - Location of Assets
OVERVIEW - LOCATION OF ASSETS Aganang Integrated Plant Delmas Grinding Plant Kendal Ash Plant Dwaalboom Project Metier Concrete Plants Note: Project locations not exact but indicative for illustrative purposes EXPLORATION,DEVELOPMENT,INCOME,GROWTH www.sephakuholdings.com 31 March 2015 6
Slide 7: SepCem FY 2014 Salient Points
SEPCEM FY 2014 SALIENT POINTS Revenue at approximately R919 million: Q4 revenue at cR405 million mainly due to the commencement of production at Aganang in October 2014 – SepCem gaining market share in all key inland markets in the retail sector Bag market entry successful with the SepCem bran
Slide 8: SepCem Increases Presence in the Inland Markets
SEPCEM INCREASES PRESENCE IN THE INLAND MARKETS Cumulative quarterly sales FY 2014 1000 000 919 000 800 000 Cumulative revenue (R000) 600 000 515 000 400 000 206 000 200 000 55 000 0 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Revenue increased at 25% quarterly compound rate as SepCem penetrated the market EXPL
Slide 9: SepCem EBITDA Evolution FY 2014
SEPCEM EBITDA EVOLUTION FY 2014 EBITDA % 30 26 20 15 10 -35 -2 0 Q1 Q2 Q3 Q4 -10 -20 -30 -40 EBITDA evolution a reflection of increasing sales volumes Targeting a margin 8 – 10% higher than industry average at steady state Q4 margin comparative to industry average in spite of volume not fully
Slide 10: Cement Industry Overview
CEMENT INDUSTRY OVERVIEW EXPLORATION,DEVELOPMENT,INCOME,GROWTH www.sephakuholdings.com 31 March 2015 10
Slide 11: Industry Analysis
INDUSTRY ANALYSIS Annual cement demand growth in developing countries typically increases at 1,5% above GDP SepCem’s long-term demand growth projection for SA between 4% and 4,5%¹ Demand growth may exceed capacity in 5 years times based on clinker production Possibility of inefficient capaci
Slide 12: Industry Capacity Analysis Based on Clinker Production
INDUSTRY CAPACITY ANALYSIS BASED ON CLINKER PRODUCTION No of Average age Annual estimated max cement production Company operating of operating Kilns Kilns 2015 2016 2017 2018 2019 Producer A 2 21 2 171 823 2 171 823 2 171 823 2 171 823 2 171 823 Producer B 3 38 3 947 931 3 947 931 3 947 931 3 947 93
Slide 13: Our Products Always Get to the Market
OUR PRODUCTS ALWAYS GET TO THE MARKET Production Production of of 32.5 32.5 R R cement cement at at Delmas Delmas plant plant EXPLORATION,DEVELOPMENT,INCOME,GROWTH www.sephakuholdings.com 31 March 2015 13
Slide 14: SepCem's Competitive Edge
SEPCEM’S COMPETITIVE EDGE High energy efficiency Logistical advantage • Guaranteed 97.5 kWh/tonne utilisation • Delmas plant proximity to Gauteng • Relative cost saving of 25 - 30% • Return load cost advantages between the two plants Inland market focus Minimal maintenance • Coastal margins being im
Slide 15: Customer Centric Sales Focus
CUSTOMER CENTRIC SALES FOCUS SAP system was installed prior to market entry Fully integrated contact centre for centralised order placement and logistical planning Integrated despatch system at both plants, with weighbridges and out-loading systems Full sales staff complement based at Centur
Slide 16: Modern Plant Technology & Efficiencies
MODERN PLANT TECHNOLOGY & EFFICIENCIES EXPLORATION,DEVELOPMENT,INCOME,GROWTH www.sephakuholdings.com 31 March 2015 16
Slide 17: Cement Plant Technology Overview
CEMENT PLANT TECHNOLOGY OVERVIEW Global trends towards reduction of carbon footprint Reduction of carbon footprint generally through: Improved electrical energy efficiency Improved thermal energy efficiency Use of renewable energy sources Use of cement extenders maximised by using more r
Slide 18: Integrated Cement Plant Configuration
INTEGRATED CEMENT PLANT CONFIGURATION Sephaku Development (Pty) Ltd AGANANG MINING OPERATION QUARRYING Limestone Quarry Total limestone mineed = 3 Mtpa Coal from third-party supplier by road transport Raw materials from third-party suppliers by road transport Sephaku Cement (Pty) Ltd Magnetite S toc
Slide 19: Limestone Opencast Quarry
LIMESTONE OPENCAST QUARRY Limestone mine (North West) Situated adjacent to the Aganang plant with an expected life of mine at 30 years Limestone is mined opencast at a rate of 1.6 for 1.0 million tonnes of clinker Extensive quality control in conducted on the drilling of reserves and real-ti
Slide 20: Integrated Cement Plant Configuration
INTEGRATED CEMENT PLANT CONFIGURATION Sephaku Development (Pty) Ltd AGANANG MINING OPERATION Limestone Quarry Total limestone mineed = 3 Mtpa Coal from third-party supplier by road transport Raw materials from third-party suppliers by road transport Sephaku Cement (Pty) Ltd Magnetite S tockpile AGAN
Slide 21: Limestone Crusher Building
LIMESTONE CRUSHER BUILDING Latest generation primary impact - crusher Latest limestone roller-screening technology - beneficiation Supplied by Hazemag : Germany EXPLORATION,DEVELOPMENT,INCOME,GROWTH www.sephakuholdings.com 31 March 2015 21
Slide 22: Hazemag Primary Impactor Crusher for Limestone
HAZEMAG PRIMARY IMPACTOR CRUSHER FOR LIMESTONE (AP-PM 2022) EXPLORATION,DEVELOPMENT,INCOME,GROWTH www.sephakuholdings.com 31 March 2015 22
Slide 23: Integrated Cement Plant Configuration
INTEGRATED CEMENT PLANT CONFIGURATION Sephaku Development (Pty) Ltd AGANANG MINING OPERATION Limestone Quarry Total limestone mineed = 3 Mtpa Coal from third-party supplier by road transport Raw materials from third-party suppliers by road transport Sephaku Cement (Pty) Ltd Magnetite S tockpile AGAN
Slide 24: Raw Mill Building
RAW MILL BUILDING Vertical roller mills throughout the plant for raw, coal and cement milling Supplied by Loesche – Germany EXPLORATION,DEVELOPMENT,INCOME,GROWTH www.sephakuholdings.com 31 March 2015 24
Slide 25: Loesche LM 56.4 Vertical Roller Mill
LOESCHE LM 56.4 VERTICAL ROLLER MILL EXPLORATION,DEVELOPMENT,INCOME,GROWTH www.sephakuholdings.com 31 March 2015 25
Slide 26: Integrated Cement Plant Configuration
INTEGRATED CEMENT PLANT CONFIGURATION Sephaku Development (Pty) Ltd AGANANG MINING OPERATION Limestone Quarry Total limestone mineed = 3 Mtpa Coal from third-party supplier by road transport Raw materials from third-party suppliers by road transport Sephaku Cement (Pty) Ltd Magnetite S tockpile AGAN
Slide 27: Sinoma 5-Stage Preheater / Calciner
SINOMA 5-STAGE PREHEATER / CALCINER Latest pyro-processing technology : air – separate pre-calciner kiln with a 5-STAGE preheater EXPLORATION,DEVELOPMENT,INCOME,GROWTH www.sephakuholdings.com 31 March 2015 27
Slide 28: Integrated Cement Plant Configuration
INTEGRATED CEMENT PLANT CONFIGURATION Sephaku Development (Pty) Ltd AGANANG MINING OPERATION Limestone Quarry Total limestone mineed = 3 Mtpa Coal from third-party supplier by road transport Raw materials from third-party suppliers by road transport Sephaku Cement (Pty) Ltd Magnetite S tockpile AGAN
Slide 29: Sinoma Kiln (5.4 x 72)
SINOMA KILN (5.4 X 72) Latest generation high-impulse multi-channel burner Supplied by Pillard - France EXPLORATION,DEVELOPMENT,INCOME,GROWTH www.sephakuholdings.com 31 March 2015 29
Slide 30: Integrated Cement Plant Configuration
INTEGRATED CEMENT PLANT CONFIGURATION Sephaku Development (Pty) Ltd AGANANG MINING OPERATION Limestone Quarry Total limestone mineed = 3 Mtpa Coal from third-party supplier by road transport Raw materials from third-party suppliers by road transport Sephaku Cement (Pty) Ltd Magnetite S tockpile AGAN
Slide 31: IKN Pendulum Cooler
IKN PENDULUM COOLER Latest generation pendulum – grate cooler Supplied by IKN – Germany EXPLORATION,DEVELOPMENT,INCOME,GROWTH www.sephakuholdings.com 31 March 2015 31
Slide 32: Integrated Cement Plant Configuration
INTEGRATED CEMENT PLANT CONFIGURATION Sephaku Development (Pty) Ltd AGANANG MINING OPERATION Limestone Quarry Total limestone mineed = 3 Mtpa Coal from third-party supplier by road transport Raw materials from third-party suppliers by road transport Sephaku Cement (Pty) Ltd Magnetite S tockpile AGAN
Slide 33: 50 kt Clinker Silo
50 KT CLINKER SILO EXPLORATION,DEVELOPMENT,INCOME,GROWTH www.sephakuholdings.com 31 March 2015 33
Slide 34: Integrated Cement Plant Configuration
INTEGRATED CEMENT PLANT CONFIGURATION Sephaku Development (Pty) Ltd AGANANG MINING OPERATION Limestone Quarry Total limestone mineed = 3 Mtpa Coal from third-party supplier by road transport Raw materials from third-party suppliers by road transport Sephaku Cement (Pty) Ltd Magnetite S tockpile AGAN
Slide 35: Cement Mill Building
CEMENT MILL BUILDING EXPLORATION,DEVELOPMENT,INCOME,GROWTH www.sephakuholdings.com 31 March 2015 35
Slide 36: Loesche LM 53.3 + 3 Vertical Roller Mill
LOESCHE LM 53.3 + 3 VERTICAL ROLLER MILL EXPLORATION,DEVELOPMENT,INCOME,GROWTH www.sephakuholdings.com 31 March 2015 36
Slide 37: Integrated Cement Plant Configuration
INTEGRATED CEMENT PLANT CONFIGURATION Sephaku Development (Pty) Ltd AGANANG MINING OPERATION Limestone Quarry Total limestone mineed = 3 Mtpa Coal from third-party supplier by road transport Raw materials from third-party suppliers by road transport Sephaku Cement (Pty) Ltd Magnetite S tockpile AGAN
Slide 38: 2x Ventomatic 8-Spout Rotary Packers
2X VENTOMATIC 8-SPOUT ROTARY PACKERS EXPLORATION,DEVELOPMENT,INCOME,GROWTH www.sephakuholdings.com 31 March 2015 38
Slide 39: 2x Ventomatic Palletizers
2X VENTOMATIC PALLETIZERS EXPLORATION,DEVELOPMENT,INCOME,GROWTH www.sephakuholdings.com 31 March 2015 39
Slide 40: 2x Bocedi Stretch Hood Machines
2X BOCEDI STRETCH HOOD MACHINES EXPLORATION,DEVELOPMENT,INCOME,GROWTH www.sephakuholdings.com 31 March 2015 40
Slide 41: Integrated Cement Plant Configuration
INTEGRATED CEMENT PLANT CONFIGURATION Sephaku Development (Pty) Ltd AGANANG MINING OPERATION Limestone Quarry Total limestone mineed = 3 Mtpa Coal from third-party supplier by road transport Raw materials from third-party suppliers by road transport Sephaku Cement (Pty) Ltd Magnetite S tockpile AGAN
Slide 42: Bulk Cement Loading and Despatch
BULK CEMENT LOADING AND DESPATCH EXPLORATION,DEVELOPMENT,INCOME,GROWTH www.sephakuholdings.com 31 March 2015 42
Slide 43: Integrated Cement Plant Configuration
INTEGRATED CEMENT PLANT CONFIGURATION Sephaku Development (Pty) Ltd AGANANG MINING OPERATION Limestone Quarry Total limestone mineed = 3 Mtpa Coal from third-party supplier by road transport Raw materials from third-party suppliers by road transport Sephaku Cement (Pty) Ltd Magnetite S tockpile AGAN
Slide 44: Bag Loading
BAG LOADING EXPLORATION,DEVELOPMENT,INCOME,GROWTH www.sephakuholdings.com 31 March 2015 44
Slide 45: Bag Despatch
BAG DESPATCH EXPLORATION,DEVELOPMENT,INCOME,GROWTH www.sephakuholdings.com 31 March 2015 45
Slide 46: State-of-the Art Quality Control
STATE-OF-THE ART QUALITY CONTROL Product consistency is of paramount importance SepCem achieves this through: • Single limestone source (consistent chemistry) • On-line chemical analyses of crusher product (PGNA-technology) • Consistent raw material additives • Automated sampling, sample transpo
Slide 47: PGNA On-line Analyser of Limestone
PGNA ON-LINE ANALYSER OF LIMESTONE EXPLORATION,DEVELOPMENT,INCOME,GROWTH www.sephakuholdings.com 31 March 2015 47
Slide 48: Automatic Sample Transport Systems
AUTOMATIC SAMPLE TRANSPORT SYSTEMS EXPLORATION,DEVELOPMENT,INCOME,GROWTH www.sephakuholdings.com 31 March 2015 48
Slide 49: Robo-Lab
ROBO-LAB EXPLORATION,DEVELOPMENT,INCOME,GROWTH www.sephakuholdings.com 31 March 2015 49
Slide 50: Automatic Sample Receiving Station
AUTOMATIC SAMPLE RECEIVING STATION EXPLORATION,DEVELOPMENT,INCOME,GROWTH www.sephakuholdings.com 31 March 2015 50
Slide 51: Delmas Milling and Sephaku Ash Plants
DELMAS MILLING AND SEPHAKU ASH PLANTS EXPLORATION,DEVELOPMENT,INCOME,GROWTH www.sephakuholdings.com 31 March 2015 51
Slide 52: Delmas Cement Plant Configuration
DELMAS CEMENT PLANT CONFIGURATION DELMAS OPERATION Fly Ash from Kendal 480 ktpa Clinker from Aganang Clinker Storage Cement mill stack 980 ktpa 30 000 ton 1 000 ton 1 000 ton Gypsum 80 ktpa Feed proportioning Cement Mill Bag Filter Bulk Cement Storage Fly ash mixing screw Packers / Palletisers 10 00
Slide 53: Delmas Stellar Performance in Spite of Slow Start
DELMAS STELLAR PERFORMANCE IN SPITE OF SLOW START Delmas is in close proximity to SepAsh (34kms away) and has access to markets with higher demand namely Limpopo, Gauteng & Mpumalanga By end of Q3 CY2014 Delmas was operating at 80% capacity and increased to just below 100% in the fourth quarter
Slide 54: Delmas Plant Turnaround vs Capacity Utilisation
DELMAS PLANT TURNAROUND VS CAPACITY UTILISATION Capacity Utlisation Turanround times - bags Turnaround times - bulk 120.00% 80.0 70.0 100.00% 60.0 80.00% Capacity Utilisation 50.0 Time in minutes 60.00% 40.0 30.0 40.00% 20.0 20.00% 10.0 0.00% 0.0 Jan 2014 Feb 2014 Mar 2014 Apr 2014 May 2014 Jun 2014
Slide 55: Cement Strength Performance – Concrete Comparative
CEMENT STRENGTH PERFORMANCE – CONCRETE COMPARATIVE 1 day 3 days 7 days 28 days 50.00 45.00 40.00 35.00 30.00 MPA 25.00 20.00 15.00 10.00 5.00 - 32,5 - 32,5 - 32,5 - 42,5 42,5 - 42,5 - 42,5R - 42,5 - 42,5R - Sephaku Producer A Producer B Sephaku Producer B Producer A Producer A Producer C Producer C
Slide 56: Sephaku Ash – Strategic Value Creation for Cement
SEPHAKU ASH – STRATEGIC VALUE CREATION FOR CEMENT Sephaku Ash continues to operate well and is now in its sixth year of operation. Producing classified ash to various sectors Primary focus has shifted during the course of 2014 to ensure continuous ash supply to Delmas Key bulk customers have
Slide 57: Sephaku Holdings Overview
SEPHAKU HOLDINGS OVERVIEW EXPLORATION,DEVELOPMENT,INCOME,GROWTH www.sephakuholdings.com 31 March 2015 57
Slide 58: Group Performance
GROUP PERFORMANCE Share ticker: JSE (MAIN) SEP Sector Construction and Materials Listing 2009 Issued shares 201 224 508 Closing price as at 25 March 2015 880 Average value traded per week 10 494 382 Average volume traded per week 1 217 398 Market capitalisation 1 770 775 670 Group net profit or (los
Slide 59: Share Price on an Upward Trend
SHARE PRICE ON AN UPWARD TREND 12000000 900 850 10000000 800 8000000 750 6000000 700 4000000 650 2000000 600 0 550 Volume Share price Linear (Share price ) EXPLORATION,DEVELOPMENT,INCOME,GROWTH www.sephakuholdings.com 31 March 2015 59
Slide 60: Increasing Investor Interest
INCREASING INVESTOR INTEREST Highest 52-week price at R9.01 and lowest at R5.15 High volumes traded in November following a targeted roadshow Significant increase in institutional interest on the share as cement production ramps up and management demonstrates : Technical ability to produce g
Slide 61: Investment Case
INVESTMENT CASE New technologically advanced production plants with higher cost efficiencies enhance competitiveness Profitable concrete operations with distinctive technical skills providing solid earnings and positive net operating cash flows Strategic focus on the building materials sector
Slide 62: Contact
CONTACT Sakhile Ndlovu Investor relations officer Tel: + 27 12 612 0210 Email: [email protected] Website: www.sephakuholdings.com EXPLORATION,DEVELOPMENT,INCOME,GROWTH www.sephakuholdings.com 31 March 2015 62