Dangote Cement Plc: Emerging Global Cement Player

October 2010

Disclaimeredit Click to

Master title style

This document is not an offer of securities for sale in the United States. Any securities discussed herein have not been and will not be registered under the US Securities Act of 1933, as amended (the "US Securities Act") and may not be offered or sold in the United States absent registration or an exemption from registration under the US Securities Act. No public offering of any securities discussed herein is being made in the United States and the information contained herein does not constitute an offering of securities for sale in the United States, Canada, Australia or Japan. This document is not for distribution directly or indirectly in or into the United States, Canada, Australia or Japan or to US persons. This document is only addressed to and directed at persons in member states of the European Economic Area who are "qualified investors" within the meaning of Article 2(1)(e) of the Prospectus Directive ("Qualified Investors"). In addition, in the United Kingdom, this document is being distributed only to, and is directed only at, Qualified Investors (i) who are investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotions) Order 2005 (the "Order") or (ii) who are high net worth entities falling within Article 49(2) of the Order or (iii) to whom it may otherwise lawfully be communicated (all such persons together being referred to as "relevant persons"). This document must not be acted on or relied on (i) in the United Kingdom, by persons who are not relevant persons and (ii) in any member state of the European Economic Area other than the United Kingdom, by persons who are not Qualified Investors. By attending this presentation/accepting this document, you will be taken to have represented, warranted and undertaken that you are a relevant person (as defined above).
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Click to edit Master title style

SECTION 1 SECTION 2 SECTION 3 SECTION 4 SECTION 5 SECTION 6 SECTION 7 OVERVIEW ABOUT DANGOTE CEMENT PLC CEMENT INDUSTRY DYNAMICS EQUITY STORY HIGHLIGHTS FINANCIAL HIGHLIGHTS FUTURE OUTLOOK APPENDICES

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Overview Click to
PROFILE

edit Master title style

The leading Nigerian cement company with Pan-African expansion plans Market share of over 50% based on 2009 consumption data Key assets strategically located across Nigeria Strong distribution and logistics platform State of the art production facilities with state of the art technology Owns the largest plant in Sub-Saharan Africa being expanded to be the one of the largest in the world Total production capacity of 26 million Mtpa by 2011 In October 2010, Dangote Cement Plc merged with Benue Cement Company Plc (BCC) and is currently in advanced stages of listing the enlarged entity

KEY BUSINESS LINES

Cement Production Plants: Obajana, Gboko, Ibese Cement Terminals: Lagos, Rivers

GEOGRAPHICAL PRESENCE CORE VALUES

Nigeria: Kogi, Benue, Ogun, Lagos, Port Harcourt Customer Service Entrepreneurship Excellence Leadership

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Dangote Cement Investment style Click to edit Master title Highlights

1

Competitively positioned in the last cement frontier - Africa

Attractive Sector with Strong Fundamentals

Leading Nigerian Cement Production Company with over 50% market share

Outstanding Growth Story

Proven Track Record of Dangote Group

Strong and Dynamic Management Team

Sustainable Returns and unrivalled competitive advantage

Biggest Plant in Sub-Sahara Africa and most efficient plant in Nigeria

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Productionedit Master Click to Capacity

Cement Production Capacity (Mtpa)
30

title style
Current Capacity

25

3 3

Obajana Gboko Additional Capacity (by 2011)

5m 3m

20

6
15

26

4
10

Obajana Gboko Ibese Total Production Lagos Terminal PortHarcourt Terminal

5m 1m 6m 20m 3m 3m 26m

10

0 DCP

Gboko BCC

Ibese

Lagos Terminal

Port Harcourt Terminal

Total DCP

Total Production and Terminals

DCP has a substantial portfolio of greenfield and expansion projects expected to come on-stream within the next year and become accretive to the revenue stream Gboko plant has an installed production capacity of 2.8 million Mtpa of cement expected to increase to 4 million Mtpa by 2011 due to standard performance improvement projects. Ibese is approximately 80% completed and Obajana expansion is approximately 51% completed. Both have been designed to run primarily on Natural Gas supplies with dual firing kiln (Natural Gas and LPFO) Ongoing upgrade of all production facilities to also run on coal energy
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Notes

Depot Presence

Click to edit Master title style

National Sales Director

Regional Sales Directors

Regional Sales Managers

State and City Areas Sales Managers

Where there is a market, Dangote Cement is Present!

Standard Depot Size range between 10,000 50kg bags to 1 million 50kg bags Sales force of about 120 people, targeting 200 by next quarter

Notes

Two Regional Directors (RD) cover North and South and one manager covering corporate accounts Regional Sales Managers covering the six geo-political zones State and city area sales managers

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Transportation Fleet Click to edit Master

title style
Only cement company in Nigeria with the largest transportation fleet which ensures effective market coverage A significant competitive advantage as products are more accessible to customers in every State.

Notes

Fleet is larger than available commercial fleet in Nigeria which ensures effective dispatch of Dangote Cement bags Bags are loaded onto trucks using automatic bag placers Dedicated fleet ensures the Dangote Cement products are competitively priced in the market

With a transportation fleet of about 2,000 trucks, Dangote Cement has access to every state in Nigeria a key competitive advantage over industry peers
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Sales, Distribution and Pricing Strategy

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Strategy

Sales are done wholesale, either ex-plant or ex-depot; pricing is a function of demand and supply dynamics DCP has a relationship with all major cement distributors in Nigeria All sales are on a cash basis with credit granted to selected loyal distributors for a maximum of 10 days

Ensures all strategic markets have access to products Transportation of cement from plants to depots

SALES, DISTRIBUTION AND PRICING

Logistics

DCP has about 2000 trucks allocated to various plants, a key competitive advantage over industry peers Trucks are run by experienced fleet managers

Cement bags are transferred from the silos to the depots for pick up 39 Depots in Nigeria widely distributed regionally and

Depots

represented in 34 states and the FCT Lagos/SW: 16 Depots; Abuja/NC:3 Depots; NW/NE: 11 Depots; SE/SS: 9 Depots 10 Depots expected to come on stream within the next six months

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Click to edit Master title style

SECTION 1 SECTION 2 SECTION 3 SECTION 4 SECTION 5 SECTION 6 SECTION 7 OVERVIEW ABOUT DANGOTE CEMENT PLC CEMENT INDUSTRY DYNAMICS EQUITY STORY HIGHLIGHTS FINANCIAL HIGHLIGHTS FUTURE OUTLOOK APPENDICES

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About DCPedit Click to

Master title style

Other Shareholders 4.1%

Dangote Industries Limited 95.9%

Obajana Plant

Gboko Plant

Ibese Plant

Port Harcourt Terminal

Lagos Terminal

Total Cement Plant capacity 20Million Mt/annum Total Cement Terminal capacity 6Million Mt/annum

Notes

The Company plans to list in Nigeria by end of October, 2010 Dangote has other Sub-Saharan cement interests expected to come on-stream in the near future

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Operating edit Master titlePlants Click to Facilities Cement style

CEMENT PLANTS

OBAJANA 10M MTPA

Single largest cement production plant in Sub-Saharan Africa located in Kogi State Consists of two production lines with combined annual production capacity of five (5) million MT plant capacity. A third 5 million MT production line is currently under construction Utilises Natural Gas as the primary fuel source for firing the kiln and powering the plant. Located next to limestone deposits sufficient to sustain the plant for another 70 years (50 years proven) Energy needs are met by a 135 megawatts (MW) electric power generating plant

GBOKO 4M MTPA
Second largest plant in Nigeria located in Benue States. Installed capacity has increased from 900,000 MT to 2.8 million MT per annum Production capacity of plant is forecast to increase to 4 million MT from the current level before the end of 2011 Proven limestone reserve of 40 years proven with 50 years unproven

IBESE 6M MTPA
A green field plant being constructed at Ibese, Ogun State The plant consists of two 3 million MT annual capacity production lines making for a combined 6 Million MT per annum capacity plant, with Lines 1 and 2 scheduled for completion before the end of 2011 Dual firing plant (Natural Gas and LPFO) Proven limestone reserve of 50 years with 30 years unproven

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Operating edit Master titleTerminals Click to Facilities Bagging style

CEMENT TERMINALS

PORT HARCOURT - 3M MTPA

Dangote Bail is responsible for implementing the Companys bulk cement importation strategy in the South-South and South-Eastern parts of the country. It operates two (2) bulk cement terminals at Port-Harcourt and Onne respectively with a combined annual bagging capacity of three (3) million MT of cement. This operation, combined with the Lagos cement terminals, helps DCP complement its domestic manufacturing output with imports particularly during peak demand periods.

LAGOS CEMENT 3M MTPA

Consists of three (3) terminals: Apapa, Aliko and Tincan Strategically located to bag imported bulk cement and is a key part of the Companys product supply strategy for Lagos and South-Western Nigeria Combined annual bagging capacity is also approximately 3 million MT of cement.

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Management Structure Click to edit Master

title style
Other

Managing Director Head of National Sales/Marketing Mr. Ajoy Sinha Head of Logistics Mr. Knut Ulvmoen Mr. Daljeet Ghai

Head of Finance Mr. Wole Adeleke

Company Secretary Mallam Mohammed Shitu Jibril Human Resources

Mr. Pabby Paranjit TBC

Obajana Plant Chief Operating Of f icer

Gboko Plant Chief Operating Of f icer

Ibese Plant Chief Operating Of f icer

Port Harcourt Terminal Chief Operating Of f icer

Lagos Terminal Chief Operating Of f icer

Production Financial Controller Logistics Human Resources

Production Financial Controller Logistics Human Resources

Production Financial Controller Logistics Human Resources

Bagging Manager Financial Controller Logistics Human Resources

Bagging Manager Financial Controller Logistics Human Resources

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Click to edit Master title style

SECTION 1 SECTION 2 SECTION 3 SECTION 4 SECTION 5 SECTION 6 SECTION 7 OVERVIEW ABOUT DANGOTE CEMENT PLC CEMENT INDUSTRY DYNAMICS EQUITY STORY HIGHLIGHTS FINANCIAL HIGHLIGHTS FUTURE OUTLOOK APPENDICES

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Competitive Positioning - title style Click to edit Master Africa

North America Demand: 78.6 Mt Capacity: 134 Mt Surplus: 55.4 Mt Europe Cembureau Demand: 184 Mt Capacity: 220 Mt Surplus: 36 Mt Surplus: 31 Mt Russia Demand: 44 Mt Capacity: 75 Mt (e)

Sub-Saharan Africa remains the only deficit region in the world Due to the high prices, the SubSaharan Africa cement market is a very attractive market for investors Significant unsatisfied demand in Africa is expected to sustain cement consumption

$70-95/t

$80-100/t
MENA Demand: 262 Mt Capacity: 335 Mt Surplus: 73 Mt

$55-120/t

China Demand: 1622 Mt Capacity: 1900 Mt Surplus: 278 Mt

$55-100/t

$35-65/t

$55-80/t $100-380/t
Latin America Demand: 134 Mt Capacity: 140 Mt Surplus: 6 Mt

India Demand: 185 Mt Capacity: 215 Mt

$70-100/t

$55-100/t

Surplus: 30 Mt

Sub-Saharan Africa Demand: 72 Mt Capacity: 67 Mt Deficit: 5Mt

Source: Industry Estimates

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Cement Trading Master title Click to edit Comparables

Market cap. ($mm) FV/EBITDA 2010E
7.0x 7.6x 7.0x 10.6x

style
FV/EBITDA 2012E
5.8x 6.1x 5.7x 8.0x

FV/EBITDA 2011E
6.4x 6.8x 6.3x 9.1x

P/E 2011E
11.3x 9.7x 8.3x

EBITDA CAGR 10E12E

EBITDA margin 11E

International

Emerging markets cement companies in general command a premium to global cement companies

Holcim

20,566 16,583 9,174 7,774

9.8% 11.3% 11.4% 14.7%

23.2% 24.2% 21.4% 20.4%

Global

Lafarge HeidelbergCement Cemex

N/M Average 9.8x

15.2x 12.2x 15.6x

Average 8.0x Anhui Siam Cement Indocement Semen Gresik CNBM BBMG Ambuja Cimpor ACC Sinoma Ultratech PPC Yamama Saudi Cement

Average 7.1x
9.0x 9.4x 10.3x

Average 6.4x
7.9x 8.5x 9.0x

Average 11.8%
18.5% 12.4% 18.1%

Average 22.3%
26.5% 16.8% 44.1%

13,091 12,968 7,479

6,574 6,397 5,672 4,710 4,666 4,105 4,033 3,161 2,775 1,818 1,791

11.1x 10.8x 12.5x

10.2x 10.7x 8.4x 9.2x 8.0x 8.2x 10.3x 6.6x 8.0x 7.6x 8.8x Average 9.3x

8.6x 9.3x 6.1x 8.8x 7.5x 8.1x 8.4x 5.9x 7.2x 7.3x 8.7x Average 8.2x 7.7x 6.4x Average 7.1x

7.5x 8.5x 4.7x 8.5x 7.1x 7.6x 6.8x 4.6x 5.8x 7.7x 9.2x Average 7.4x 6.7x 4.0x Average 5.4x

13.5x 12.2x 10.1x 15.4x 11.9x 13.6x 16.5x 10.0x 13.1x 10.1x 9.5x Average 12.8x 8.5x 11.1x Average 9.8x (0.9)% (2.1)%

16.9% 12.2% 34.2% 4.0% 5.7% 4.4% 23.1% 19.4% 17.9%

36.0% 17.2% 25.4% 27.3% 28.9% 23.7% 8.3% 17.2% 38.1% 65.6% 57.9% Average 30.9% 54.5% 35.3% Average 44.9% 60.0%
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Average 13.1% 21.7% 66.7% Average 44.2% 17.3%

Local

BCC Lafarge Wapco

1,733 846

9.9x 11.1x Average 10.5x

Source: Broker reports, company filings, FactSet as of October 18, 2010, J.P. Morgan

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Cement Trading Master title Click to edit Comparables

% 52 wk Market cap. Country Global Lafarge Holcim Cemex HeidelbergCement Average Median International CIMPOR PPC ACC Ambuja Ultratech Anhui BBMG CNBM Sinoma Indocement Siam Cement Semen Gresik Saudi Cement Yamama Average Median Local BCC Lafarge Wapco Average Median Nigeria Nigeria 96.4% 93.1% 1,733 846 1,709 1,004 5.20x 3.25x 4.22x 4.22x 4.20x 2.27x 3.24x 3.24x 3.70x 1.59x 2.65x 2.65x 9.9x 11.1x 10.5x 10.5x 7.7x 6.4x 7.1x 7.1x 6.7x 4.0x 5.4x 5.4x 52.4% 29.1% 40.8% 40.8% Portugal South Africa India India India China China China China Indonesia Indonesia Thailand Saudi Arabia Saudi Arabia 77.2% 91.8% 92.5% 91.1% 96.1% 87.9% 95.6% 91.5% 88.9% 93.6% 94.4% 95.7% 82.8% 92.7% 4,666 2,775 4,105 4,710 3,161 13,091 5,672 6,397 4,033 7,479 12,968 6,574 1,791 1,818 7,210 3,096 4,060 4,549 3,472 14,078 6,289 12,830 3,062 7,161 17,855 5,991 2,123 1,719 2.28x 3.03x 2.11x 2.67x 1.37x 2.87x 1.97x 1.89x 0.83x 5.32x 1.80x 3.44x 5.18x 4.99x 2.84x 2.48x 2.16x 2.73x 1.92x 2.39x 1.01x 2.39x 1.56x 1.61x 0.69x 4.56x 1.58x 3.10x 5.05x 4.80x 2.54x 2.27x 2.07x 2.24x 1.75x 2.19x 0.87x 2.08x 1.29x 1.52x 0.59x 3.91x 1.40x 2.76x 5.14x 4.83x 2.33x 2.08x 8.0x 8.0x 8.2x 9.2x 6.6x 11.1x 8.4x 10.7x 10.3x 12.5x 10.8x 10.2x 8.8x 7.6x 9.3x 9.0x 7.5x 7.2x 8.1x 8.8x 5.9x 9.0x 6.1x 9.3x 8.4x 10.3x 9.4x 8.6x 8.7x 7.3x 8.2x 8.5x 7.1x 5.8x 7.6x 8.5x 4.6x 7.9x 4.7x 8.5x 6.8x 9.0x 8.5x 7.5x 9.2x 7.7x 7.4x 7.6x 28.7% 37.9% 25.6% 29.2% 20.7% 25.8% 23.4% 17.7% 8.1% 42.6% 16.7% 33.8% 58.6% 65.9% 31.0% 27.3% France Switzerland Mexico Germany 63.8% 72.3% 57.1% 68.0% 16,583 20,566 7,774 9,174 39,952 37,083 27,935 23,322 1.76x 1.56x 1.96x 1.42x 1.68x 1.66x 1.65x 1.48x 1.86x 1.35x 1.58x 1.56x 1.53x 1.39x 1.70x 1.27x 1.47x 1.46x 7.6x 7.0x 10.6x 7.0x 8.0x 7.3x 6.8x 6.4x 9.1x 6.3x 7.1x 6.6x 6.1x 5.8x 8.0x 5.7x 6.4x 6.0x 23.2% 22.4% 18.6% 20.2% 21.1% 21.3% high ($mm) Firm value ($mm) 2010E FV / Sales 2011E 2012E FV / EBITDA 2010E 2011E 2012E 2010E

style
FV / EBIT 2012E 2010E 2011E 2012E 2010E P/E 2011E 2012E CAGR 10-12E Sales EBITDA EPS FV/ton ($/t) 2011E 24.2% 23.2% 20.4% 21.4% 22.3% 22.3% 25.0% 24.0% 21.1% 22.4% 23.1% 23.2% 11.1x 11.0x 20.9x 10.6x 13.4x 11.0x 9.6x 9.6x 16.6x 8.9x 11.2x 9.6x 8.4x 8.4x 13.0x 7.8x 9.4x 8.4x 12.7x 14.7x N/M 12.3x 13.2x 12.7x 9.7x 11.3x N/M 8.3x 9.8x 9.7x 7.8x 9.3x 14.9x 6.5x 9.6x 8.6x 7.2% 6.0% 7.4% 5.8% 6.6% 6.6% 11.3% 9.8% 14.7% 11.4% 11.8% 11.4% 27.2% 25.8% 190.0% 37.2% 70.0% 32.2% 224 187 291 233 234 229

EBITDA margin

28.9% 38.1% 23.7% 27.3% 17.2% 26.5% 25.4% 17.2% 8.3% 44.1% 16.8% 36.0% 57.9% 65.6% 30.9% 26.9%

29.1% 38.8% 23.1% 25.9% 18.7% 26.3% 27.5% 17.9% 8.6% 43.6% 16.4% 37.0% 55.8% 62.7% 30.8% 26.9%

12.3x 9.3x 10.0x 11.2x 7.4x 14.5x 8.3x 14.7x 11.1x 14.2x 16.1x 11.2x 11.6x 9.7x 11.5x 11.2x

11.3x 8.2x 10.4x 11.9x 6.2x 12.3x 6.3x 13.0x 9.0x 11.5x 13.7x 9.9x 11.2x 9.5x 10.3x 10.8x

10.5x 6.6x 9.8x 10.2x 5.2x 10.6x 4.1x 10.8x 7.4x 9.9x 11.0x 8.2x 12.2x 10.3x 9.1x 10.1x

13.1x 15.2x 13.8x 16.1x 12.6x 18.9x 14.4x 14.3x 20.1x 19.0x 14.6x 15.7x 10.0x 10.4x 14.9x 14.5x

11.9x 13.1x 13.6x 15.4x 10.0x 15.2x 10.1x 12.2x 16.5x 15.6x 12.2x 13.5x 9.5x 10.1x 12.8x 12.7x

10.8x 10.8x 13.6x 15.4x 10.0x 15.2x 10.1x 12.2x 16.5x 15.6x 12.2x 13.5x 9.5x 10.1x 12.5x 12.2x

4.9% 16.5% 9.9% 10.4% 25.6% 17.5% 23.7% 11.5% 19.3% 16.6% 13.4% 11.7% 0.3% 1.6% 13.1% 12.6%

5.7% 17.9% 4.4% 4.0% 19.4% 18.5% 34.2% 12.2% 23.1% 18.1% 12.4% 16.9% (2.1%) (0.9%) 13.1% 14.6%

9.9% 18.5% 0.8% 2.1% 12.2% 11.4% 19.3% 8.2% 10.4% 10.5% 9.3% 7.9% 3.0% 1.6% 8.9% 9.6%

244 387 155 207 67 117 299 98 N/M 385 N/M 315 188 273 228 226

54.5% 35.3% 44.9% 44.9%

55.3% 39.5% 47.4% 47.4%

9.6x 9.0x 9.3x 9.3x

7.3x 5.6x 6.5x 6.5x

6.1x 4.3x 5.2x 5.2x

11.9x 16.7x 14.3x 14.3x

8.5x 11.1x 9.8x 9.8x

9.9x 5.8x 7.9x 7.9x

18.5% 43.0% 30.8% 30.8%

21.7% 66.7% 44.2% 44.2%

9.8% 68.9% 39.3% 39.3%

427 335 381 381

Source: J.P. Morgan, I/B/E/S forecasts, company reports, Factset as of October 18, 2010; Note: Financials calendarised to December year end; FV/ton based on installed capacity FV/ton based on expected capacity of 4mmt by 21011

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Attractive Cement Prices Click to edit Master

title style
Cement prices in Nigeria are the highest at US$180/ton in comparison to the listed international countries Due to the high prices, the Nigerian cement market is a very attractive market for investors

Nigeria Vs Rest of the World: Cement Prices (US$ per ton)

180

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Supporting Demographics Selected Emerging Click to edit Master title style Markets
GDP per Capita (US$) - 2009 Consumption per capita VS GDP per capita of the world (2009)
600

12,000
10,300

Cement Consumption per capita (Kg)

10,000 8,000
6,000 7,100

500

Algeria Egypt
Algeria Egypt Morocco

400

6,000
4,700

4,000
2,300

300

2,000 0

1,500

1,600

South Africa Senegal Ghana Nigeria

200

Ghana

Senegal

Nigeria

Morocco

Egypt

Algeria

Source: CIA Factbook

South Africa

100

Cement Consumption per Capita (KG) - 2009

600 500 400 300 200
105 168 190
295 274 420 451 472 479

512 479

2,000

4,000

6,000

8,000

10,000

12,000

GDP per capita (USD)

KEY HIGHLIGHTS Nigeria is at the low end of the cement consumption relative to other emerging economies A strong correlation exists between GDP/capita and cement consumption/capita
Ghana Senegal South Morocco Egypt Algeria Algeria Egypt Africa

138

100 0 Nigeria

Source: Cemnet

With GDP forecast to grow at an average of 6% over the next 5 years, cement consumption is estimated to trend upwards
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Conducive edit Master Click to Environment

title style
Estimates of Nigerias Population 2005 2009 (Million)
150.0 149.2

148.0 146.2 146.0

CAGR: 1.64%

144.0

143.3

142.0 140.4 140.0 139.8

138.0

Source: CIA Factbook

2005

2006

2007

2008

2009

Total Area = 923,768 km2 Total Population = Approx. 150,000,000; CAGR 1.64% GDP Per Capita = USD2,300 Natural Gas Reserves: 185 trillion cubic feet (2009); 7th largest reserves in the world Rich in Limestone with reserves in 21 out of 36 states

Notes

States have experienced a growth of over 50% since the 1991 census Nigeria was identified as part of the Next Eleven high potential of becoming the worlds largest economies in the 21st Century along with BRICs Nigerias population and GDP continues to show strong growth which are essential for the continued growth of the building material sector Potentially the largest cement market in Africa and is positioned to be a net exporter of cement by 2012

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Demand DriversMaster Click to edit

Nigerian Housing Stock per Capita Actual vs Ideal
45 40 35 30 25 20 15 10 5 0 27.1 27.2 27.3 27.4 27.5 Housing Stock 36.9 37.0 Ideal Housing Stock 37.8 38.6 39.4

title style
Federal Capital Budget Expenditure (2010)

2005

2006

2007

2008

2009
Source: Federal Ministry of Finance

Source: Industry Estimates

High potential for cement consumption with dearth in basic infrastructure across all sectors: transportation, housing, health, agriculture, power, and oil and gas Housing deficit of about 43% of the existing housing stock in 2009 based on average housing stock per capita of selected emerging market peers Notes Road density (road length/population) of 1.3 km/1,000 persons compares unfavourably with the emerging market average of 4.2 km/1,000 persons The government recognises these deficits and is seriously attempting to address the situation through measures that seek not only to bridge Nigerias infrastructural deficit, but also to sustain infrastructural development in the future
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Demand/SupplyMaster Click to edit Gap

2010
20 18 16 14 12 18.0 10 8 6 4 2 0 Local Capacity Supply Gap Effective Demand 13.7

title style
Nigerian Cement Consumption Trend (million MT)
14.8 14.0 13.4 13.0

Demand/Supply of Cement in Nigeria (Millions Mtpa) -

23.9%
4.3

11.1 10.2 9.4

76.1%

Source: Industry Estimates

2005

2006

2007

2008

2009

The Nigerian cement industry currently suffers from a supply deficit based on production capacity as demand for cement far outstrips supply. Total demand was estimated at 14.8m Mtpa for 2009, compared to an estimated local production of 8.7m Mtpa. The Nigerian cement market is the largest in Sub Sahara Africa with consumption largely determined by the level of available supply. The Ministry of Commerce and Industry, however, estimates the effective demand for cement for 2010 to be approximately 18m Mtpa. With increasing local production and a steady decrease in importation, the production deficit is forecasted to have disappeared by 2012 The prospects for Nigerian cement consumption are very strong, and robust growth is envisaged, conservatively forecasted at 22 million MT in 2012, on the back of: 1) strong economic growth, expected to average 6.6%/year over the next three years in real terms; and 2) increased government spending on infrastructure over the coming years in a bid to meet its millennium development goal.
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Notes

Click to edit Master title style

SECTION 1 SECTION 2 SECTION 3 SECTION 4 SECTION 5 SECTION 6 SECTION 7 OVERVIEW ABOUT DANGOTE CEMENT PLC CEMENT INDUSTRY DYNAMICS EQUITY STORY HIGHLIGHTS FINANCIAL HIGHLIGHTS FUTURE OUTLOOK APPENDICES

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Equity to edit Master Click Story Highlights

1

title style
2

Africas Leading Independent Cement Player

Unprecedented Organic Expansion Programme

Conscious Corporate Citizenship Initiative

Strategically Located

Superior Financial Performance

Relies on State OfThe-Art Operations

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Equity to edit Click Story

1

Master title style

Wholly owned Nigerian cement company Nigeria focused: one of the worlds most attractive cement markets with substantial upside on the consumption side: estimated to be slightly above 100kg/cap. Vs. other resource rich countries Dangote Cement has the most attractive exposure: Lagos, South West and South East, Abuja and North Central, North East and North West

...Africas Leading Independent Cement Player

Unprecedent ed Organic Expansion Programme

Aspirations clearly defined and coordinated by a set of extremely talented professionals Ambition to transform Dangote cement from Nigerias market leader (2011 target capacity of 26 MMtpa) into pan Africas undisputed champion with 46.2 MMtpa by 2015 Unique company with a stellar growth and profitability trajectories, in particular considering our organic nature

...Strategically Located

Being at the crossroads of the Guinea Gulf provides Dangote Cement with a superb opportunity to become a cement dispatch point for West Africa Defensive moves with the intention to orient itself towards untapped markets with nil/very little local installed capacity, but highly attractive prospects Furthermore, every new operation is conceived as being a potential hub for regional consolidation

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Equity to edit Click Story

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All Dangote Cement Plants are now being built under turnkey EPC contract with Sinoma engineering, one of the worlds leading contractors using equipments from European companies Gboko and Obajana Plants are amongst Africas most modern Production units - Backwards Integration into energy sourcing to further streamline cash costs - Efficient distribution network internal market and exports wise with Sub-Saharan Africas largest terminal capacity (6.0 MMtpa) Obajana plant is the youngest, biggest and most efficient operating cement plant in Nigeria; Gboko plant is the second largest plant in Nigeria; Ibese to mirror the efficiency of Obajana

Relies on State Of-The-Art Operations

Superior Financial Performance

EBITDA margin at Obajana estimated at 71% and Gboko at 45% positions Dangote Cement as one of the most profitable players in the sector, globally - Estimated EBITDA/t higher than peers; outranks BRICs most profitable operators, despite operating in a most challenging environment

... Conscious Corporate Citizenship Initiative

Dangote Industries has established a philanthropic organization (Dangote Foundation), which is dedicated to providing assistance to the less privileged mainly in the development of education, health care facilities, water supply, poverty alleviation and sports By doing so, the company fulfills one of its longstanding commitments, which has been to promote Nigerias economic growth and welfare

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Click to edit Master title style

SECTION 1 SECTION 2 SECTION 3 SECTION 4 SECTION 5 SECTION 6 SECTION 7 OVERVIEW ABOUT DANGOTE CEMENT PLC CEMENT INDUSTRY DYNAMICS EQUITY STORY HIGHLIGHTS FINANCIAL HIGHLIGHTS FUTURE OUTLOOK APPENDICES

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Historical Financial Highlights Click to edit Master title

Turnover (N Billions)
CAGR 133%

style
Operating Profit (N Billions)
CAGR 103%

Profit After Tax

SUMMARY

CAGR 148%

Year Turnover (Billions) Operating Profit (Billions) Profit After Tax (Billions)

2007 34.6

2008 61.9

2009 189.6

15.9

32.4

66.3

11.6

17.9

57.5

*2009 Group Consolidated

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Forecast Financials Click to edit Master

2010 '000 Turnover Cost of sales Gross profit Operating Expenses Operating Profit Interest (Expense)/Income Profit Before Taxation Taxation Profit After Taxation Proposed Dividend Retained Earnings for the year Earnings per share (kobo) Dividend per share (kobo) PE Ratio EBITDA Multiple Dividend Yield 225,878,619 (98,623,398) 127,255,221 (4,900,117) 122,355,104 (993,121) 121,361,984 (2,568,575) 118,793,409 (89,095,056) 29,698,353 767 575 17.6x 15.4x 4.3%

title style
2011 '000 397,954,678 (142,475,655) 255,479,023 (5,581,604) 249,897,419 (456,195) 249,441,224 (1,828,437) 247,612,787 (185,709,590) 61,903,197 1,598 1,198 8.4x 7.8x 8.9% 2012 '000 510,820,418 (172,419,152) 338,401,266 (5,939,796) 332,461,470 (1,175,815) 331,285,654 (9,499,992) 321,785,662 (241,339,247) 80,446,416 2,077 1,558 6.5x 6.0x 11.5% 2013 '000 512,771,363 (182,271,501) 330,499,862 (6,095,355) 324,404,507 11,026 324,415,533 (11,572,277) 312,843,256 (234,632,442) 78,210,814 2,019 1,514 6.7x 6.1x 11.2% 2014 '000 537,364,955 (189,001,449) 348,363,506 (6,228,854) 342,134,651 33,630 342,168,281 (81,482,520) 260,685,761 (195,514,321) 65,171,440 1,682 1,262 8.0x 5.8x 9.3%

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Forecast Financial Key Ratios style Click to edit Master title

Turnover (N Billion)
CAGR 24%
511 398 513 537

EBITDA Margin (%)

CAGR 3%
67%

EBIT Margin (N Billion)

CAGR 4%

600 500 400 300 200 100 0

226

70% 68% 66% 64% 62% 60% 58% 56% 54%

69% 67%

68%

70% 60% 50% 40% 30% 20% 10% 0%

54%

63%

65%

63%

64%

60%

2010

2011

2012

2013

2014

2010 2011 2012 2013 2014

2010 2011 2012 2013 2014

Profit After Tax (N Billion)

CAGR 22%
350 300 250 200 150 100 50 0 2010 2011 2012 2013 2014
119 248 322 313 261

EPS (Naira)
CAGR 22%
20.8 20.2 16.8

DPS (Naira)
CAGR 21%
18 16 14 12 10 8 6 4 2 0
15.6 12.0 15.1 12.6

25.0 20.0 15.0 10.0 5.0 0.0

16.0

7.7

5.8

2010 2011 2012 2013 2014

2010

2011

2012

2013

2014
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Business Plan Assumptions - Capacity Click to edit Master title style

Cement Production / Capacity (Million MT) Cement Import / Capacity (Million MT)

20.0 14.0

20.0

6.0 18.6

6.0

6.0

8.0

7.1

1.8

1.7

1.6

Cement Dispatch (Million MT) UTILISATION

20.2 15.7 8.9

2010 89%

2011 72%

2012 93%

Cement Production Capacity Utilization Cement Import Capacity Utilization

31%

28%

27%

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Business Plan Assumptions Fuel & Power Click to edit Master title style
Fuel Costs (N Billion) Power Costs (N Billion)

Fuel Cost / Power Cost Per Tonne (N000)

KEY HIGHLIGHTS Average Fuel Costs and Power Costs for Cement Plants in Nigeria is about 40-45% (estimated using LPFO) and 15-20% of cost of production respectively Obajana and Ibese are linked to gas supply from Ajaokuta and Itori respectively with approx. 90 km long gas pipeline with a capacity to deliver 96,000 cu.m/h. of natural gas for Obajana This has resulted in better fuel and power efficiencies and reduction of Fuel and Power costs for the plants

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Business Plan Assumptions Click to edit Master title

Buildup / Tonne (N000/Tonne)

style
Buildup (%)

Contribution / Tonne (N000/Tonne)

KEY HIGHLIGHTS Operating Profit/Tonne is expected to reach N16,900 by 2014, a 64% rise from 37% in 2009 reflecting the higher contribution of higher margin local production Variable Cost is expected to decrease by 22% between 2009 and 2014 majorly due to the cost savings from energy sources used leading to a 46% increase in Contribution/tonne over the same period

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Click to edit Master title style

SECTION 1 SECTION 2 SECTION 3 SECTION 4 SECTION 5 SECTION 6 SECTION 7 OVERVIEW ABOUT DANGOTE CEMENT PLC CEMENT INDUSTRY DYNAMICS EQUITY STORY HIGHLIGHTS FINANCIAL HIGHLIGHTS FUTURE OUTLOOK APPENDICES

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Future to edit Click Outlook

Key overall long term driver for the industry is growth in GDP/capital, population and infrastructure investment DCP is planning an additional 10M Mtpa increase in plant capacity (Obajana 5M and Sagamu 5M) due by 2015 This will bring the total capacity to 30M Mtpa

Master title style

With the demand/supply gap estimated to have wiped out by 2012, DCP is positioned through its current terminals to export to other West African countries

Domestic Expansion

Export Strategy

Most majors are no longer producing cement out of Africa and many countries do not have the resources (limestone and natural gas) advantage, increasing the market for DCP

With low consumption per capita level of GDP/capita, Africa represents a phenomenal growth potential Expand to other SubSaharan African countries with a total planned capacity of 16.2M Mtpa (midwifed by DIL) Upon transfer and completion, DCP would be present in 11 African countries aside Nigeria

CORPORATE STRATEGY

Consolidate leadership position in Africa Sustain African leadership with continued focus on building a world class institution Continuously leverage on companys dominant position to identify and exploit growth opportunities

African Expansion

African Leadership

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Click to edit Master title style

SECTION 1 SECTION 2 SECTION 3 SECTION 4 SECTION 5 SECTION 6 SECTION 7 OVERVIEW ABOUT DANGOTE CEMENT PLC CEMENT INDUSTRY DYNAMICS EQUITY STORY HIGHLIGHTS FINANCIAL HIGHLIGHTS FUTURE OUTLOOK APPENDICES

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Historyto Click

edit Master title style

Commenced the construction of the companys first cement production plant (Obajana Cement Plant) Changed its name to Dangote Cement Plc; Scheme of Merger between Dangote Cement and BCC

Incorporated as Obajana Cement Plc by the Kogi State Government in November, 1992

1992

2004

2010

Africas leading Independent Cement Player

2002

2007

Beyond 2010 . Oct 2010 Listing of Dangote Cement on the NSE Feb 2011 Additional 6Million MT at Ibese Plant July-Dec 2011 Additional 5Million MT capacity at Obajana Plant and 1Million MT at Gboko Plant

DIL bought over Obajana Cement Plc from Kogi State Government

Commissioned the Obajana Cement Plant with two production lines and capacity of 5Million MT/Annum

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Business Plan Assumptions - Operating Click to edit Master title style Environment
2009 USD/MNGN Exchange Rate Fx Inflation Rate (%) GDP Growth Price Inflation Freight Costs (USD/Tonne)-Adjusted for Inflation FOB price (USD/Tonne)-Adjusted for Inflation *Import Duty (%) Surcharge on Import Duty (%) 0% 87 42 35% 7% 0% 2010 153.0 5% 3% 0% 55 35 35% 7% 2011 160.7 5% 6% 0% 55 35 35% 7% 2012 168.7 5% 6% 0% 55 35 35% 7% 2013 177.1 5% 6% 0% 55 35 35% 7% 2014 186.0 5% 6% 0% 55 35 35% 7%

Assumptions Steady increase in exchange rate by 5% annually; Expected growth in GDP; Freight costs trend downwards in 2010 and remain stable; Stable Free-on-Board (FOB) price; Import duty set at 35% ( Existing Current Tarrif)

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Appendix 1: Historical Profit and Loss Click to edit Master title style
FOR THE YEAR ENDED 31 DECEMBER Turnover Cost of sales Gross profit Less expenses: Administrative expenses Selling and distribution Operating profit Other income Interest received Finance charges Profit on ordinary activities before taxation Taxation Dividend paid during the year Profit on ordinary activities after taxation transferred to revenue reserve Earning per share (Naira) (10,096,157) (116,426) 50,448,366 902,187 2,330,862 (4,171,378) 49,510,037 (2,258,711) 47,251,326 47,251,326 95 (9,371,016) (99,308) 32,400,251 1,038,910 1,833,111 (8,647,487) 26,624,785 (8,664,675) 17,960,110 17,960,110 36 (4,886,746) (105,717) 15,957,815 664,581 1,767,969 (6,137,490) 12,252,875 (630,766) 11,622,109 11,622,109 23 Company 2009 =N=000 129,797,087 (69,136,138) 60,660,949 Company 2008 =N=000 61,906,088 (20,035,513) 41,870,575 Company 2007 =N=000 34,595,913 (13,645,635) 20,950,278

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Appendix 2: Historical Balance Sheet Click to edit Master title style

AS AT 31 DECEMBER ASSETS Fixed Assets Investment Stock Trade Debtors Other Debtors and Prepayments Due from related companies Deferred Expenses Short term investments C ash and bank balances Company 2009 000 142,388,500 16,659,134 10,251,365 6,038,627 35,267,394 41,755,054 9,452,915 6,240,202 268,053,191 LIABILITIES Amount falling due within one year Bank overdrafts Trade creditors Other creditors Due to related companies Short term debts Taxation Total Assets less liabilities Deferred taxation Long term debts PROVISION FOR LIABILITIES AND CHARGES Staff retirement benefits FINANCED BY: Share C apital Share Premium Revaluation Reserve C aoital Reserve Revenue Reserve Foreign exchange revaluation reserve SHAREHOLDERS' FUND Company 2008 000 135,621,674 5,042,770 2,923,863 76,568,666 3,015,436 8,283,055 5,264,190 236,719,654 Company 2007 000 130,518,631 2,790,453 875,984 14,155,585 1,176,121 24,268 12,649,776 6,291,171 168,481,989

3,272,082 2,922,304 18,473,160 24,959,453 14,789,269 3,068,077 67,484,345 200,568,846 (8,486,075) (49,619,797) (350,740) 142,112,234 500,000 42,430,000 985,805 98,196,429 142,112,234

6,501,755 2,411,382 9,749,970 7,454,839 71,837,065 1,336,315 99,291,326 137,428,328 (7,959,126) (56,889,822) (67,162) 72,512,218 500,000 42,430,000 29,582,218 72,512,218

5,359,820 1,878,471 8,913,113 920,083 15,463,380 630,766 33,165,633 135,316,356 (77,211,790) (33,581) 58,070,985 500,000 42,430,000 11,622,109 3,518,876 58,070,985
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