An emerging cement major building shareholder value and ... · •All pan-African operations...

An emerging cement major building shareholder value

and prosperity in Africa

May 2016

Introduction to Dangote Cement

2

• Largest independent cement producer in Africa, with 44Mta capacity operational as of May 2016

– 29.3Mta capacity across three state-of-the-art plants in Nigeria, Africa’s largest and most profitable market

– 11Mta new capacity commissioned in past 12 months in South Africa, Senegal, Ethiopia, Cameroon and Zambia

– 3Mta recently came onstream in Tanzania; 1.5Mta due onstream in Congo in H2 2016

• Delivering strong financial and operating performance

– FY 2015 revenues of ₦491.7bn

– FY 2015 EBITDA of ₦262.4bn at 53.4% margin

– Net debt of ₦204.2bn, 0.78x EBITDA and well below industry norms

• On track for a diversified pan-African business profile

– Massive expansion underway to operate more than 77Mta integrated / grinding / import capacity across 17 countries, including Nigeria

– Recently announced plans to expand capacity in Senegal, Ethiopia, Zambia, Cameroon

– New plants to be built in Okpella and Itori in Nigeria, Kenya, Mali, Niger, Nepal

• Largest company on Nigerian Stock Exchange

– Market capitalisation nearly $15bn; ca. 30% of NSE

– A bellwether on the cement sector and on Africa’s growth

Building a World-Class Company

3

Operational Scale and Scope Robust Financial Profile Improving Quality and De-Risking

Strong Governance Outstanding Management Key Relationships

• Currently operates 11 plants in 8 countries with a capacity of 44Mta, mostly fully integrated production factories

• Plan to have 77Mta by 2019, across 17 countries

• The largest manufacturer in Nigeria, Sub-Saharan Africa’s largest cement market, with a combined 29Mta capacity across 3 sites

• Modern, efficient, low-cost plants enable cost and quality leadership

• Owns fleet of >6,800 trucks enabling superior distribution

• Industry-leading margins and investment incentives ensure financial strength

• Strong financial and operating performance with FY 2015 revenues of ₦491.7B and EBITDA of ₦262.4B at 53.4% margin

• Modest net debt of ₦204B, 0.78x EBITDA and well below industry norms

– Able to invest while other producers hampered by debt or small scale

• Significant de-risking of business achieved in 2015 by opening new plants and diversifying throughout Africa into new markets

• Fuel security strategy in Nigeria reduces fuel risk and cost, protecting production and margins at key profit centres

• Reduced business risk and improved quality of earnings as new plants opened across Africa

• Diversification increased Group revenues and profits despite challenging 2014/5 operating environment in Nigeria and across Africa

• Listed on Premium Board of the Nigerian Stock Exchange after rigorous assessment

– One of only three companies currently listed, given stringent requirements

– Corporate governance assessed to meet LSE Main Board listing standard

• International standard of governance controls including risk management framework and comprehensive policies to support the Board

• Founded by Aliko Dangote, recognised as Africa’s most visionary industrialist

– Long term investor helping support growth and expansion of Dangote Cement

• Growth enabled by entrepreneurial spirit and flexibility, backed by financial strength and good internal controls

• Experienced management team with longstanding tenure within the global cement / FMCG industry

• Relationships with world-class international advisors including Accenture, Barclays, Clifford Chance, Deloitte, KPMG, PWC, SAP and Standard Chartered

• Excellent working relationships with Nigerian and other African Governments; recognised as a valuable investor in local economies

– E.g. Working with Nigerian government, to reduce cost of road building through use of concrete

Dangote Cement is a world-class and financially strong organisation with robust corporate governance

History & Timeline

DIL transferred its entire shareholding in Benue Cement Company to DCP

Added 5Mta of capacity in Obajana to become 10.25Mta (the largest cement plant in Sub-Saharan Africa)

Opened 6Mta plant in Ibese

Ghana consolidated into DCP accounts

Opened plants in Cameroon, Zambia, Senegal, Ethiopia & Tanzania

Total group capacity currently 44Mta

Joins NSE’s Premium Board as one of first three companies to pass rigorous evaluation of governance

Met the LSE corporate governance standards

Further expansion in Cameroon, Zambia, Senegal & Ethiopia

New facilities in Sierra Leone, Liberia, Cote d’Ivoire, Ghana, Congo, Niger, Mali, Kenya & Nepal

Planned Capacity growth from 44Mta in 2015 to 77Mta by 2019

Dangote Industries Ltd. (DIL) acquired Obajana Cement Plc from the Government (no installed capacity)

Changed its name from Obajana Cement Plc to Dangote Cement Plc

Merger between Dangote Cement Plc and Benue Cement Plc

Listed on the Nigerian Stock Exchange and became the largest quoted company in Nigeria, accounting for c. 30% of the NSE by market capitalization

Ibese 3 & 4 and Obajana 4 came online

Opened Delmas and Aganangplants in South Africa

Investment Corporation of Dubai acquired 1.4% of DCP for $300m

Begins installation of coal facilities at Nigerian plants to ensure fuel security and reduce costs

Public Investment Corporation of South Africa acquired 1.5% of DCP for $289m

Commenced construction of the of 5Mta at Obajana – biggest cement plant in Sub-Saharan Africa

DIL acquired majority stake in Benue Cement Company Plc

2002 2004-2005 2009 2010 2011 2012 2013 2014 2015 2018-2019

4Dangote Cement has rapidly grown to become the premier Pan-African cement manufacturer

0.7 Mta

Expanding and Diversifying the Business

5

2010 2015 2019E

Capacity: 8Mta

Geographical Presence: 1 country

Capacity: 44Mta

Geographical Presence: 8 countries

Capacity: 74-77Mta

Geographical Presence: 17 countries

Expanding to become the leader in key growth markets across Africa

8.0 Mta 29.3 Mta38-41 Mta

1.5 Mta

1.0 Mta1.5 Mta

2.5 Mta

3.0 Mta

1.5 Mta

3.3 Mta

3.0 Mta

2.5 Mta

3.0 Mta

5.0 Mta

3.0 Mta

3.0 Mta

3.3 Mta

0.5 Mta

3.0 Mta

3.0 Mta

1.5 Mta

1.5 Mta

1.5 Mta1.5 Mta

Nepal

3.0 Mta

Integrated Plant Grinding Plant Import Terminal Grinding + Import

Management Team

6

• Joined February 2015

• 23 years experience at senior levels in the cement industry

• Previously CEO/MD Ambuja Cement India, Area Manager Holcim India Plc between 2008 and 2014, a 62Mtabusiness unit of Holcim

• Holds a Bachelor’s Degree in Economics and Accounting from the University of Rotterdam in the Netherlands and anMBA from the University of Bradford in the UK

• Joined April 2014

• Previously CFO/Executive Director of Petropavlovsk Plc and Aricom Plc, both listed on Main Board of LSE

• 20 years experience in the Mining and FMCG industry

• Member of Institute of Chartered Accountants in Ireland

• Joined September 2015

• Over 30 years of experience in the cement industry

• Previously CEO at Reliance Cement and Regional CEO in ACC Limited, a 30Mta business unit of Holcim Plc

• Holds a degree in Electrical Engineering and a Post Graduate degree in Industrial Engineering and Management

• Joined 2013

• Over 30 years experience in the cement industry

• Previously Chief Executive of Lafarge South Africa and a Board Member of Compor Plc

• Joined August 2015

• Over 30 years of experience in the cement industry working across various functions

• Previously President of Hindalco Industries Limited (aluminium production capacity of 1.35Mta) and Chief ExecutiveOfficer, East Region of ACC Limited, a 30Mta business unit of Holcim Plc

• Holds a degree in Mining Engineering and a Diploma in Business Management

Onne van der WeijdeGroup Chief Executive Officer

Brian EganGroup Chief Financial Officer

Arvind PathakRegional CEO, Nigeria

Vivek ChawlaRegional CEO, West & Central Africa

Albert CorcosRegional CEO, South & East Africa

Experienced Management team with long-standing tenure in the global cement industry

Goal

Vision

Strategic Initiatives and Goals

7

Grow and diversify

across the last and

potentially most

attractive major

growth market for

cement

Strategic Pillars / Long-Term Goals

Consolidate expansion across

Africa

Achieve leadership in key

markets

Tap high-value export markets

Capture local markets with

superior quality and service

Adhere to global standards of governance

Improve sustainability

Strive to obtain a #1 or

#2 position in each

market, with at least

30% share

Serve landlocked

markets with high

sales prices and

margins, generate FX

to offset imported raw

materials

Serve markets with

delivered product

instead of factory gate

sales; use financial

strength to improve

service, reduce costs

Achieving international

standing through good

governance enables us

to access global

financial markets

Be most energy and

CO2 efficient company

in our industry, with

low environmental

footprint when

compared to peers

• Key elements of business model

– Target high-growth, populous markets with cement deficits and older/less efficient producers

– Be the leader in quality, costs and service wherever we operate

– Expand quickly and profitably when rivals are hampered by debt or smaller scale

A strategy to become a respected and world-class business leader

To deliver superior and sustainable risk-adjusted ROI, IRR on our investments

To be Africa’s leading producer of cement, respected for the quality of its products and services and for the way it conducts its business

Key Success Factors

8

Capex – Bulk Purchasing

Power

Strategic access to resources

Cost Effective Fuel Strategy

Superior Distribution

Channels

Superior & Modern Facilities

Project Execution Capacity

• Size and scale of Dangote’s expansion plans has enabled negotiation of extremely attractive capex terms for new factories• Around 60% of overall project cost paid upfront during the next building phase – remainder funded from operational cash flows• New capacities can be built at significantly less than $200 per tonne, increasing ROI• “Brownfield” strategy for future expansion in some countries (e.g. Senegal, Ethiopia, Zambia) reduces build costs and also improves ROI

• Limestone is a strategic asset in Africa, where many countries lack commercially viable deposits to support native cement industries• Site selection targets good-quality limestone near demand centres, fuel sources, good distribution networks , in thriving economies• Newly-opened mines at new plants enable extraction of high-quality limestone at lower cost than possible at older mines

• Recent upgrades to enable key Nigerian profit centres to run on gas and coal, phasing out use of expensive low-pour fuel oil (LPFO), which is up to 2.9x more expensivethan gas per tonne of cement

• Fuel security strategy will include development of coal mining to further reduce costs, become self-sufficient in key fuel;parent DIL may also invest in gas fields and distribution infrastructure that will benefit subsidiaries

• Dangote Cement’s size and financial strength enable the procurement of large numbers of trucks to get product to key demand centres• Many customers prefer the direct-delivery strategy model, which is already in operation in Nigeria, for its convenience and competitive cost• Direct delivery strategy and strong customer relationships are differentiators versus rivals and raise barriers to new entrants• Partner with key third-party distributors whose scale and reach add value

Market Selection

• Undisputed leader in Nigeria, Africa’s biggest economy and its biggest cement market, within export distance of many countriesthat lack sufficient limestone to support production of their own cement

• Target new markets where incumbents operate older, smaller, less-efficient plants producing lower-quality cement• Create local jobs and prosperity in markets that incentivise Dangote Cement to build facilities

• In Nigeria, Dangote Cement operates very large-scale plants at Obajana (13.25Mta) and Ibese (12.0Mta), which deliver substantial economies of scale and producehigher-quality products at significantly lower costs than competitors

• In other markets, Dangote replicates this strategy at a local level, with modern plants delivering superior products at competitive prices

• Proven ability to manage major, multi-year building projects simultaneously across diverse geographies• Proven ability to ramp up and achieve high volume of sales with newly opened factories• Operating excellence with good practices and value-creating replicable at new facilities

Unique business model and best-in-class execution capabilities across the entire value chain

Value Creation

Size and buying power enables favourable

procurement of plants at lower cost; brownfield

increases returns

Careful market selection looks for countries with good resources, cement deficit, ageing peers and

investment incentives

Larger scale of plants built with high degree of

standardisation and prefabrication to reduce capex, improve returns

New quarries enable optimal mining of

highest quality raw materials, improving

product quality

Good emissions control helps environment,

improves competitiveness in face of increasing industry regulation

Strong focus on quality ensures best-quality

materials, manufacturing processes and end

products, reduces waste

Fuel strategy improves margins by bulk

procurement, switch to lower-cost kiln/power

fuels e.g. coal

Larger kiln sizes enables higher-efficiency

production of clinker in most expensive step of

production

Use of modern vertical rolling mills enables finer

cement grinding, improves quality with

positive impact on setting time for block makers

Highly automated packing and loading reduces

manual loading, enables higher throughput

through packing lines

Ability to buy/operate trucks in bulk enables superior distribution capabilities, extends

market reach

Strong competitive advantages delivering improved returns for

shareholders

=

10

Board and Committee Structure

10

Board of Directors

Aliko Dangote (1)

Onne van der WeijdeDevakumar EdwinSani DangoteAbdu DantataOlakunle AlakeJoseph MakojuOlusegun OlusanyaEmmanual Ikazoboh*

Ernest Ebi*

Fidelis MadavoDouraid Zaghouani

Finance and General Purpose Committee

Olusegun Olusanya(1)

Devakumar EdwinSani DangoteOlakunle AlakeEmmanuel IkazobohErnest EbiFidelis Madavo

Audit and Risk Committee

Ernest Ebi(1)

Devakumar EdwinOlusegun OlusanyaSani DangoteOlakunle AlakeEmmanuel IkazobohFidelis Madavo

Remuneration and Governance Committee

Emmanuel IkazobohDevakumar EdwinSani DangoteOlusegun OlusanyaAbdu DantataJoseph MakojuErnest Ebi

Nomination Committee

Aliko Dangote(1)

Olusegun OlusanyaEmmanuel IkazobohErnest EbiFidelis Madavo

TechnicalCommittee

Fidelis Madavo(1)

Devakumar EdwinOlakunle AlakeAbdu DantataJoseph MakojuErnest EbiDouraid Zaghouani

Statutory Audit Committee(2)

Robert Ade-Odiachi(1)

Olakunle AlakeJoseph MakojuOlusegun OlusanyaSada Ladan-BakiBridget Shiedu

Note: * denotes Independent Non-Executive Directors.1. Chairman of Committee.2. The Statutory Audit Committee is not a Committee of the Board.

56 58

106 106

166

214

0

50

100

150

200

250

2010 2011 2012 2013 2014 2015

Annual Report Pages

Strong Corporate Governance

11

• Achieved Premium Listing status on the Nigerian Stock Exchange, August 2015

• Followed rigorous audit of governance policies

• Two Independent Non-Executive Directors appointed in 2014

• Ernest Ebi

• Emmanuel Ikazoboh

• Group-wide risk management initiative

• Deloitte is Group’s Auditor

• Improved Annual Report providing stakeholders with more information and greater transparency

• Implementation of key policies in order to meet international standards of governance

International standards of governance

EHSS commitments

• Major Environment, Health & Safety and Social initiative

• Standard approaches to be rolled out across all territories

• Occupational Health & Safety Management System

• Improves on plant-by-plant approach adopted so far

• Teams being recruited to Dangote Cement EHSS program in 2015

• Working to adopt IFC Performance Standards

• Environmental Resources Management engaged as consultant

• Active internal EHSS educational program/workshops

Improving corporate disclosure

Highlights for 2015

12

Financial results

• Revenue up 25.6% to ₦491.7B on success across Africa

• EBITDA up 17.5% to ₦262.4B at 53.4% margin

• All pan-African operations profitable at EBITDA level

• Earnings per share up 15.2% to ₦10.86

• Strong cash flow funds dividend, capex and reduces

net debt to ₦204.2B (0.78x EBITDA)

• Dividend up 33.3% to ₦8.0 per share, 73.7% payout ratio

Operational highlights

• Group cement volumes up 35.0% to nearly 19Mt

• New Nigeria pricing drives record Q4 sales of nearly 4Mt

• Overall, Nigerian volumes up 3.2% to 13.3Mt

• Pan-African operations make strong starts with 5.5Mt shipped

outside Nigeria

• Excellent market share gains against long-established peers

• Further expansion planned within and beyond Africa

• Joins Premium Board of NSE, after rigorous review of governance

Regional revenues (₦bn)

Year ended 31st December

2015 2014 Change

Nigeria 389.2 371.5 4.8%

West & Central Africa

42.3 6.2 582%

South & East Africa

61.2 13.9 340%

Total 491.7 391.6 25.6%

0

1,000

2,000

3,000

4,000

5,000

6,000

Q12014

Q22014

Q32014

Q42014

Q12015

Q22015

Q32015

Q42015

Nigeria West & Central Africa South & East Africa

Regional volumes 2014-15(Kt)

Key Achievements in 2015

13

Improved financial strength

Reduced business risk

Revenues increased

Profits increased

Positive EBITDA from all operations

Cash flow improved

Balance sheet strengthened

Net debt reduced

Expansion model proven, successful market entries diversify and increasing revenues and profits

Pricing risk proactively managed in Nigeria as price reduction delivers immediate positive impact on sales volumes and market share

Fuel optimisation strategy reduces use of expensive LPFO, delivers margin gains in Nigeria

NSE Premium Listing reflects high standards of governance, 15 new policies adopted at Board level

Improved financial strength while reducing business risk

AND

Highlights for Q1 2016

14

Financial results

• Revenue up 22.5% to ₦140.5B

• EBITDA up 0.6% at ₦72.4B at 51.5% margin,

• Net debt of ₦148.7B, down from ₦204.2B at 31/12/15

Operational highlights

• Group cement volumes up 69.6% to 6.4Mt

• Strong market shares in all territories

• Record sales volumes in Nigerian market, up 45.4% to 4.5Mt after price reduction

• West & Central Africa sales volumes up 448.9% to 1.2Mt*

• South & East Africa sales volumes up 49.2% to 0.7Mt*

• Tanzania now onstream

• Ground broken for 6.0Mta plant at Okpella, Edo State, Nigeria

• Work begins at 3.0Mta grinding plant in Cote d’Ivoire

*As of 1st January 2016, Ethiopia was regrouped into the West & Central operating region

Regional revenues (₦bn)

Three months to31st March

2016 2015 Change

Nigeria 107.2 101.4 5.7%


23.5 4.7 402%

South & East Africa

10.2 8.7 17.4%

Inter-company sales (0.3) -

Total 140.5 114.7 22.5%

Regional sales volumes (‘000 tonnes)

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

Q1 2015 Q1 2016Nigeria West & Central Africa South & East Africa

+45.4%

+69.6%

Financial Overview

Three months to 31st March 2016 2015

₦B ₦B % change Comments

Revenue 140.5 114.7 22.5% Increase mainly due to non-Nigerian factories offsetting price cut in Nigerian market

Cost of sales (62.2) (40.0) 55.5% Higher fuel cost owing to increased LPFO use in Nigeria

Gross profit 78.3 74.7 4.8% Impact of price reduction in Nigeria

Gross margin 55.7% 65.1%

EBITDA 72.4 72.0 0.6% Absolute EBITDA increased despite fall in Nigerian profits after price reduction

EBITDA margin 51.5% 62.8%

EBIT 56.1 58.4 (5.7%)

EBIT margin 39.9% 50.9%

Finance income 7.2 28.0 (74.3%) Q1 2015 included significant FX gains not repeated in Q1 2016

Finance costs (8.8) (16.3) (45.9%)

Profit before tax 54.5 70.2 (22.3%)

Income tax (expense)/credit (1.7) (1.5) 13.7%

Profit for the period 52.8 68.6 (23.1%)

Earnings per share 3.12 4.09 (23.6%)

15

Income Statement

Financial Overview

16

Kiln fuel28%

Power & Maintenance11%

Limestone 1%

Mine costs2%

Gypsum5%

Packaging10%

Refractories2%

Other variable2%

Maintenance supplies7%

O&M contract3%

Direct wages7%

Plant general9%

SG&A13%

% of average cash costs per tonne (Nigeria, 2016 ytd)

(cont’d)

Financial Overview

17

Movement in net debt

Cash₦B

Debt₦B

Net debt₦B

As at 1st January 2016 40.8 (245.0) (204.2)

Cash generated from operations beforechanges in working capital

75.2 - 75.2

Changes in working capital 12.6 - 12.6

Income tax paid - - -

Capital expenditure (24.7) - (24.7)

Other investing activities (0.2) - (0.2)

Change in non-current prepayments 2.8 - 2.8

Net interest payments (13.0) - (13.0)

Net loans obtained (repaid) (31.1) 31.1 -

Other cash and non-cash movements 3.4 (0.6) 2.9

Dividend paid - - -

As at 31st March 2016 65.7 (214.4) (148.7)

(cont’d)

18

As at As at31/03/16 31/12/15

₦B ₦B

Property, plant and equipment 921.7 917.2

Other non-current assets 24.5 25.1

Intangible assets 2.7 2.6

Current assets 147.3 125.2

Cash and cash equivalents 65.7 40.8

Total Assets 1,161.9 1,110.9

Non-current liabilities 60.9 57.2

Current liabilities 188.2 164.1

Debt 214.4 245.0

Total liabilities 463.6 466.0

Net Assets 698.4 644.7

Net debt as % of net assets 21.3% 31.7%

Financial Overview

Balance sheet

(cont’d)

Nigeria Q1 2016

19

• Price reduction drives record Q1 sales up 45.4% to 4.5Mt

• Market share of 66% vs 58% in Q1 2015

• Imports rapidly falling away at lower price

• Gas disruption at Ibese weighs on margins

• Successful marketing initiatives target 14,000+ retail outlets

• Late Q1 reduction of rebates, transport subsidies and other discounts at combined value of ₦100/bag

• Strong momentum continues into April

Nigeria performance


2016 2015 Change

Volumes sold (kt) 4,513 3,104 45.4%

Revenue (₦B) 107.1 101.4 5.7%

EBIT* (₦B) 53.7 59.0 (9.1%)


0

1,000

2,000

3,000

4,000

5,000

Q1 Q2 Q3 Q42014 2015 2016

Quarterly sales (‘000 tonnes)

+36.3%+45.4%

Q1 2016 (Q1 15) Obajana Ibese Average

Gas 72% (92%) 34% (85%) 55% (89%)

Coal 15% (1%) 52% (15%) 31%

LPFO 13% (7%) 14% 14% (5%)

Kiln fuel mix

* Excluding corporate costs and eliminations (see note 4 to accounts)

West & Central Africa Q1 2016

20

• Strong performance across the region

• Sales volumes rise 449% to 1.2Mt, including Ethiopia

• Revenues rise 402% to ₦23.5B

• Excellent sales increases across the region

– Senegal sales up 225%

– Ghana up 94%

• Strong market shares achieved within a year of launch

– Senegal 27% share

– Ethiopia 27% share

– Cameroon 44% share

• Expansion announced to capitalise on early success

– New line in Senegal to feed Mali with clinker

– New 1.5Mta facility planned for Cameroon

• Congo set for 2016 opening, progress continuesat other sites

Quarterly sales ('000 tonnes)

0

200

400

600

800

1,000

1,200

1,400

2015 2016

West & Central Africa performance


2016 2015 Change

Volumes sold (kt) 1,246 227 449%

Revenue (₦B) 23.5 4.7 402%

EBIT (₦B) 4.1 0.2 1,718%


South & East Africa Q1 2016

21

Quarterly sales ('000 tonnes)

0

100

200

300

400

500

600

700

2015 2016

South & East Africa performance


2016 2015 Change

Volumes sold (kt) 691 463 49.2%

Revenue (₦B) 10.2 8.7 17.4%

EBIT (₦B) (1.2) 0.9 (233%)

EBIT margin Na 10.9%

• Sales volumes up 50% to 0.7Mt

• Region hit by economic downturn and currency challenges

• Revenues up 17.4% to ₦10.2B

• Operating loss of ₦1.2B owing to currency devaluation

• South Africa volumes up despite poor economy

• Zambia achieves 40% market share in market subdued by economy, lack of mining projects and rainy season

• New projects

– New 1.5Mta capacity in Zambia

– Entry into Zimbabwe announced

– Kenya finalising plans for 3.0Mta capacity across two sites

Outlook for 2016

22

• Strong Nigeria sales momentum maintained into Q2

• Building activity driven mostly by local investment in building

• Nigerian Government committed to infrastructure spend• Budget approved 6th May

• Allocated approx. ₦350B ($1.7B) for capital projects,

• ₦200B ($1B) for roads vs ₦18B ($90m) in 2015 budget

• To be supported by $6B infrastructure loan from China

• Infrastructure represents strong upside on existing sales (c. 95% bagged)

• Gas supply expected to improve, coal projects complete in H2

• Expect to improve on absolute EBITDA and earnings in 2016

• Sourcing foreign currency remains challenging

• Around 55% of opex exposed to FX but most import needs are on ‘approved list’ at CBN rate

• Gas is priced in US$ but paid in Naira, reducing need for FX

• All non-Nigerian plants expected at high capacity utilisation in 2016 (Tanzania ramping up steadily, already gaining share in key market)

• Republic of Congo and Sierra Leone operational this year

• Next phase of expansion begins to reach 74-77Mta by end 2019• MOU signed with ICBC and Sinoma for funding and construction

+46%+47%

Expanding and Diversifying

23

End 2015 End 2019 TypeNigeria Mta Mta

Obajana 13.3 13.3 Integrated

Ibese 12.0 12.0 Integrated

Gboko 4.0 4.0 Integrated

Itori - 3.0-6.0 Integrated

Okpella - 6.0 Integrated

Total Nigeria 29.3 38.3-41.3

West & Central Africa Mta Mta

Cameroon 1.5 3.0 Grinding

Cote d'Ivoire - 3.0 Grinding

Ghana 1.0 2.5 Grinding + Import

Liberia - 0.5 Grinding

Mali - 1.5 Grinding

Niger - 1.5 Integrated

Republic of Congo - 1.5 Integrated

Senegal 1.5 3.0 Integrated

Sierra Leone - 0.7 Import

Total W&C Africa 4.0 17.2

South & East Africa Mta Mta

Ethiopia 2.5 5.0 Integrated

Kenya - 3.0 Integrated

South Africa 3.3 3.3 Integrated

Tanzania 3.0 3.0 Integrated

Zambia 1.5 3.0 Integrated

Zimbabwe - 1.5 Integrated

Total S&E Africa 10.3 18.8

TOTAL 74.3-77.3

* Provisional timetable, timings and capacities subject to change

*Expected capacity additions, 2016-2019* (Mta)

0

10

20

30

40

50

60

70

80

2011 2012 2013 2014 2015 2016 2017 2018 2019

Nigeria Ghana South Africa Tanzania Ethiopia Zambia

Senegal Cameroon Sierra Leone Congo Côte d'Ivoire Liberia

Zimbabwe Niger Nepal Mali Kenya

Why Sub-Saharan Africa? Why Cement?

24

Cement demand driven by

increasing population,

urbanisation and prosperity

Sub-Saharan Africa

significantly lags global

average per-capita cement

consumption

Huge opportunity for African

producers to expand, replace

imports, especially in West

Africa, much of which lacks

limestone

Africa is the last major

growth market for cement

with relatively little surplus

capacity at present

High capital cost of

entry, construction time

and access to resources

are key barriers to entry

Key markets are

Nigeria, Ethiopia, South Africa;

cement ‘majors’ with high net

debt/ EBITDA are less able to

take on additional debt to to

finance entry to these markets

Cement is an essential

building material with no

viable substitutes,

Africa needs billions of

tonnes in coming

decades

Dangote Cement is the only large-scale player in Sub-Saharan African Cement markets

Many incumbents are sub-

scale, use older technologies,

so are vulnerable to well-

funded industry disruptors

Overview of African Cement Market

25

• Increasing political stability enabling rapid economic growth

• Steady population growth, younger profile increases need for building

• Emerging middle-class, increasing consumerisation and access to financial services e.g. banking, mortgages, credit

• Increasing demand for more and higher grades of cement as urbanisation continues across the continent, demanding more infrastructure, housing and commercial building

Positive Long-Term Mega Trends

Source: Industry Sources, BMI.

1. Global average includes China.

• Unlocking of natural resources (oil, commodities)

• Increased manufacturing capabilities (for both domestic consumption and exports)

• Increasing inward investment as aid is replaced by commercial funding

• Accelerating technological adoption, enabling ‘leap-frogging’

• In early build-out phase of development, cement is used in ‘economic multipliers’ e.g. infrastructure, with positive feedback for cement demand

Supportive Growth Factors

• Historical SSA GDP growth of 4.6% between 2010 – 2014

• Expected SSA GDP growth of 4.2% between 2014 – 2018

• Construction industry value forecast to grow at a 6.5% CAGR between 2015 – 2017

Attractive Macro Economic Situation

Rapid Increase in Urbanisation Presents Strong Opportunity

408m

1,427m634m

1,046m

1,041m

2,473m

2010 2050Urban Rural

Liberia Niger

EthiopiaMali

Zimbabwe

Sierra Leone

Tanzania

Senegal

Kenya

Nepal

Cameroon

Côte d’Ivoire

Zambia

Ghana

Laos

Congo

Palestine

Pakistan

Nigeria

0

100

200

300

400

500

600

0 1,000 2,000 3,000 4,000 5,000 6,000

Global Average: 573kg(1)

Materially Lower Cement Consumption in Africa

GNI US$

Pe

r-ca

pit

a ce

men

t co

nsu

mp

tio

n (

Kg)

Cement consumption in Africa has high and long-term growth potential

• Over 1.4B Africans are forecast to live in urban areas by 2050, which is > 4x North America’s current population

Sub-Saharan Africa’s Demand Drivers

• Increasing political & economic stability

• Good GDP growth across the region

– IMF forecasts 3.8% - 4.3% for SSA in 2015/16

• Emerging middle class, consumerisation

• Steady population growth, younger profile

• Rapid urbanisation, requiring more and stronger grades of cement

– Higher-density housing, infrastructure, commercial buildings

• Serious housing deficits

– e.g. Nigeria: 18m shortage, at estimated $375bn building cost

• Massive drive for infrastructure investment

• Strengthening financial services

• Increasing inward investment

• Rapid technological adoption

• Unlocking natural resources

• Increased manufacturing for export

26

New light railway in Addis Ababa, Ethiopia

27

Strategic Raw Material Access

Location, quality and quantity of Dangote Cement’s limestone reserves is a key competitive advantage

• Limestone is the key and irreplaceable ingredientof all types of modern cement

• Commercially viable deposits of limestone are relativelyscarce across many parts of Africa

– Ideally need high-quality limestone to be neardemand centres, fuel and distribution network

• Nigeria has a relative abundance of quality limestoneespecially in key southern regions near to demandcentres, export facilities

• Absence of limestone in much of West and East Africa,especially coastal states, forces those countries to importbulk cement or its intermediate product, clinker, usuallyfrom Far East and Nigeria

• Limestone reserves close to existing facilities each with alife of mine in excess of 30 years

• Dangote Cement plans an ‘export to import’ strategy toserve West Africa and Cameroon from Nigerian factories,exporting by road and in time by sea

African Limestone Overview African Limestone Reserves

• Key regions to the East and West of Nigeria have minimal limestone reserves– Increased dependence on Nigeria– Nigeria able to pursue an export-led strategy in future

Limestone in Nigeria is high quality and close to demand centres

Nigeria’s Market Strengths

Abundant Limestone in a Region of Shortage

Access to Low-Cost Fuels

Large and Growing Population

Strong Economy

Investment Incentives for Manufacturing

Import Restrictions and Tariffs Support Local

Manufacturers

Good Export Potential in Neighbouring Countries

Lacking Limestone

High Upside on Low Per-Capita Consumption

Government Commitment to Infrastructure

Nigeria

28Nigeria is the most attractive African market and an ideal base for exporting to a quarter of Africa

Nigeria Market Summary

29

Market Drivers

• Largest economy in Africa ($450 billion), but lagging in scale ofper-capita GDP ($2,536 per capita)

• Strong, sustained GDP growth of c. 7% over the last 10 years• New Federal Government indicating strong commitment to

infrastructure spending and improving project execution rates– Will reconstruct the budget allocating 30% to capital projects

compared to an average of 15% in previous budgets

– Willing to finance a deficit in order to boost economic growth

• Federal Government recognises need to diversify economyaway from oil, following recent price decline

• All sectors show considerable scope for improvement,especially agriculture and housing

Source: Industry Estimates, Budget Office of the Federal Republic of Nigeria, African Economic Outlook.

Market Landscape

Macro Overview

Demographic Trends

• Africa’s largest population 177m, rising at 2.6% p.a.

• Younger profile suggests greater housing need in coming years

• Massive housing shortage, strong urbanization trends• Government commitment to increasing infrastructure, plans for

$25B infrastructure fund to help bridge the gap of the estimated$14.2B / annum required to build out Nigeria's infrastructure

• Dangote is the market leader in Nigeria with 60%+ market share (Lafarge Africa has c. 30%)

• Cement sales have grown strongly at nearly 10% since 1996

(30%)

(10%)

10%

30%

0

20

40

60

20

11

20

12

20

13

20

14

20

15E

20

16E

20

17E

20

18E

20

19E

20

20E

20

21E

20

22E

Construction Industry Value Y-o-Y Growth % of GDP

3.6 3.5 4.2 5.6 5.78.1 8.1 8.4 8.4 9.4 10.1 11.0

13.4 14.8 15.8 17.1 18.321.2 21.0 21.5

199

6

199

7

199

8

199

9

200

0

200

1

200

2

200

3

200

4

200

5

200

6

200

7

200

8

200

9

201

0

201

1

201

2

201

3

201

4

201

5

Manufactured Imported Estimate

0.18 0.19 0.19 0.20 0.20 0.210.23

0.260.29

0.330.36

0.40

'15 '16 '17 '18 '19 '20 '25 '30 '35 '40 '45 '50

CAGR: 2.6%

Nigeria Population Development (B)

Nigerian Construction Spend (US$B)

Cement Sales (Mt)

The largest economy in Africa, Nigeria has strong potential for growth in cement demand

Nigerian Operations

30

Nigeria Operations Overview

Oyo

Adamawa

Abia

Enugu

Benue

Borno

Bauchi

Bayelsa

Ebonyi

Edo

Cross River

Delta Imo

Jigawa

Gombe

Katsina

Kebbi

Kaduna

Kano

Lagos

Nasarawa

Kogi

Kwara

OndoOsun

Niger

Rivers

Sokoto

Plateau

Anambra

Zamfara

Abuja

FCT

Taraba

Yobe

AkwaIbom

Ogun

Ekiti

Existing Plants

Strategic initiatives

Able to deliver cement anywhere in Nigeria and at lower cost than competitors

• Obajana

– 13.25Mta capacity across four lines, opened in 2008, 2012, 2014 – largest cement plant in Africa

– Sited in Kogi state, south of and near to confluence of Niger and Benue

– Gas is primary fuel, with coal as back-up on Line 3, with Lines 1,2,4 being retrofitted by mid-2016 to use entirely coal if necessary

– On-site gas turbine and diesel power plants supplying >150MW

• Ibese

– 12Mta capacity across four lines opened in 2012, 2014 in Ogun State

– 2nd largest cement plant on Africa

– Gas fired with coal facilities in Lines 1,2 and soon on Lines 3,4

– On-site gas turbine generators with diesel back-ups, >130MW

• Gboko

– 4Mta, LPFO-fuelled in Benue State, mothballed to fit coal facilities

• Marketing drive to establish 10,000 branded retail outlets in Nigeria

– Retail marketing drive started in earnest in Q2 2015

• New plants for Itori and Okpella by 2019

– 6Mta plant for Itori, near Lagos, 3Mta in Okpella, Edo State.

• Export drive begun

– Exporting cement by road to neighbouring countries e.g. Ghana, Togo, Benin, Niger, Chad

– Supported by large truck fleet and recruitment of new drivers

– Planning to build port facilities to export bulk cement and clinker by barge along the coast from Cameroon to West Africa, thus enabling exports at dramatically lower costs than transporting by road

– Exports to other ECOWAS countries will be free of landing duties, enabling further competition against Far Eastern imports

– Producing in Nigeria for export improves utilisation and efficiency of plants, helping to offset lower scale pricing in neighbouring countries

Depots

Region No. of Depots

Lagos 5

South West 1 8

South West 2 3

South East 2

South South 8

North Central 5

North East 5

North West 9

Total 45

Factories

Location Capacity

Obajana 13.25Mta

Ibese, 12.0Mta

Gboko 4.0Mta

Nigeria Historic Sales Data

31

Sales volumes (‘000 tonnes)

Q1 Q2 Q3 Q4 FY

2016 4,513

2015 3,104 3,223 2,991 3,980 13,297

2014 3,462 3,394 3,096 2,920 12,872

2013 3,395 3,434 3,150 3,322 13,301

2012 2,434 2,868 2,521 2,650 10,473

2011 2,238 1,892 2,281 2,243 8,654

Growth rates vs previous year

Q1 Q2 Q3 Q4 FY

2016 45.4%

2015 -10.5% -5.0% -3.3% 36.3% 3.3%

2014 2.0% -1.2% -1.7% -12.1% -3.2%

2013 39.5% 19.7% 25.0% 25.4% 27.0%

2012 8.8% 51.6% 10.5% 18.1% 21.0%

Quarter as % of year

Q1 Q2 Q3 Q4

2015 23.3% 24.3% 22.5% 29.9%

2014 26.9% 26.4% 24.1% 22.7%

2013 25.5% 25.8% 23.7% 25.0%

2012 23.2% 27.4% 24.1% 25.3%

2011 25.9% 21.9% 26.4% 25.9%

Average 25.0% 25.1% 24.1% 25.8%

500

600

700

800

900

1,000

1,100

1,200

1,300

1,400

1,500

1,600

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

FY 2016 FY 2015 FY 2014 FY 2013

FY 2012 FY 2011 FY 2010

Seasonality (‘000 tonnes)

West & Central Africa Market Summary

32

Market Drivers


Note: Excludes Nigeria in market statistics.

Market Landscape

Macro Overview

Demographic Trends

• Access to 15 countries with a combined population of more than

290m people, (forecast to reach 700m by 2050)

• Increasing development of coastal states, urbanization

• Lack of viable limestone means Cameroon and many West Africancountries are obligatory importers of cement; some are phasing outimports of bulk cement in favour of clinker

• Strong infrastructure programmes in many states; house building

• Dangote is extending its footprint across the region, establishing new facilities and augmenting recently opened ones in Senegal, Cameroon, from 3.0Mt expected to double in size to 6.0Mt– Competitors in Senegal are Sococim (Vicat) and Ciments du Sahel; competitors

in Cameroon are Cimencam and Cimaf• W&C Africa has mostly smaller-scale importers of bulk cement, some

cement producers in Senegal, where there is limestone

(40%)

(20%)

0%

20%

0

20

40

60

20

11

20

12

20

13

20

14

20

15E

20

16E

20

17E

20

18E

20

19E

20

20E

20

21E

20

22E

Construction Industry Value % of Growth % of GDP

13.3 14.6 16.8 19.6 21.0 22.7 23.6 26.129.0

32.4 34.938.1

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

20

15E

0.29 0.30 0.31 0.32 0.33 0.34 0.39

0.44 0.50

0.56 0.63

0.70

'15 '16 '17 '18 '19 '20 '25 '30 '35 '40 '45 '50

Cement Sales (Mt)

West & Central Africa Population Development (B)

West & Central Africa Construction Spend (US$B)

• Operations in Senegal, Ghana and Cameroon

• Historical GDP growth of 5.3% between 2010 – 2014

• Expected GDP growth of 4.9% between 2014 – 2018

• Coastal economies generally higher-growth than inland

• Ebola badly affected Sierra Leone, Liberia and others in 2014/5 but

confidence returning to region

Aiming to become West & Central Africa’s leading supplier of cement


33

• Economic Community of West African States

– 15 countries, >310m people, (800m by 2050)

– Good GDP growth across the region

– Strong demand driven by infrastructure, housing

– Many states lack limestone, obliged to import

– Attractive cement pricing across the region

– Average 114kg per capita cement consumption

• Attractive trading in ECOWAS FTZ, CEMAC

– Duty free trading between members, tariffs on imports

from non-members

– Cash incentives available exporting from Nigeria

• Able to reach 19 countries – 1/3rd of Africa

• Export clinker, bulk cement from Nigeria, Senegal

– Clinker benefits from easier transport and lower tax,

and adds manufacturing value in target country

• Region’s leading producer

– 32Mta integrated production capacity by H2 2016,

across Nigeria, Senegal, Congo

– Grinding plants in Cameroon, Cote d’Ivoire, Ghana,

Liberia

– Import terminals in Sierra Leone, Ghana

• Ethiopia regrouped with W&C Africa as of 1/1/16

0.7 Mta

3.0 Mta

2.5 Mta

3.0 Mta

5.0 Mta

3.0 Mta

3.0 Mta

3.3 Mta

0.5 Mta

3.0 Mta

3.0 Mta

1.5 Mta

1.5 Mta

1.5 Mta1.5 Mta

Expected capacity end 2019

38-41 Mta

Senegal

34

Economic & demographic

Population 2014 14.7m Population 2050E 36.2m

Urbanisation 43% GNI / capita $2,240

Per capita cons. 202kg

Project details

Capacity Type Primary fuel Location

1.5Mta Integrated Coal Pout

Operational December 2014 Target markets Domestic, Mali

Sources: Global Cement Report estimates 2015 / IMF Regional Economic Outlook: Sub-Saharan Africa, October 2015

Source: Global Cement Report estimates, UN Population estimates, Dangote Cement estimates

Senegal’s robust economy and stable government have enabled strong investments in infrastructure,particularly power, transport and education. With nearly 15 million people, per-capita consumption ofcement is high by regional standards, at 202Kg, and Global Cement Report expects solid growth over thecoming years

Senegal is a strategically important manufacturing base for Dangote Cement, having large deposits oflimestone in a region where most coastal countries are devoid of this essential raw material. Our factory hasabout 300 million tonnes of limestone available in its quarry, which is enough for many decades. Itslimestone and coastal location make it an excellent base from which to export to countries such as Mali,Sierra Leone, Liberia and others. In September 2015 we announced our intention to build a second line atSenegal, which will provide clinker for export, mostly to Mali, where we plan a cement grinding facility.

The Senegalese market already had two incumbents before we entered, claiming a combined capacity ofabout 6.7Mta. Although many observers considered that the market could not sustain a third manufacturer,we took the view that we could compete successfully on the quality of our products.

We opened our 1.5Mta factory in Pout, 29km from Dakar, at the end of December 2014 and begancommercial sales in January 2015. After a steady start, we found that market was highly receptive to ourproduct and the factory quickly achieved almost full utilisation by the middle of the year, giving us a marketshare of more than 40% in some months. We have achieved such a successful market entry by selling ourhigh-quality 42.5-grade product at the same price as other manufacturers’ less strong 32.5-grade products.

Senegal kiln and pre-heater

Cement consumption and GDP growth 2012 – 2016E

2.0

3.0

4.0

3%

4%

5%

6%

2012 2013 2014 2015E 2016E

Cement consumption (Mt) GDP growth

Senegal

35

• Plant operational in December 2015

– Easy access to key domestic and export markets

• Highly successful market entry against two entrenched manufacturers with 6.7Mta combined capacity

– Achieved monthly market shares of >40% in 2015

– Rapid market acceptance of our 42.5R, priced very competitively vs rival 32.5 brands

• Local consumption rising at c7% in recent years

– 75% of exports go to Mali

• Major infrastructure projects

– New airport with transport links, Dakar Touba Highway, new universities, Trans-Gambia Bridge, Diamniado regeneration

• Huge limestone reserves are strategic asset

– Most coastal states lack limestone

• Second 1.5Mta line planned to supply export markets

– Clinker for Mali grinding plant, bulk cement for others

– Mali consumed 1.7Mt in 2014, of which 1.3Mt imported

– Mali will import only clinker from 2016

Senegal consumption and exports (Mt)

0.0

1.0

2.0

3.0

4.0

5.0

6.0

2010 2011 2012 2013 2014Local consumption Exports

Sococim (Vicat)

3.5Ciments du

Sahel

3.2

Dangote Cement

1.5

Senegal market share by capacity (Mta)

Cameroon

36





Project details


1.5Mta Grinding N/A Douala

Operational March 2015 Target markets Mostly domestic




0.0

1.0

2.0

3.0

4.0

4%

5%

6%

2012 2013 2014 2015E 2016E


Cameroon is a potentially excellent market for Dangote Cement. With a population of nearly 23 millionpeople, Cameroon borders Nigeria but has very little native limestone to make cement in large quantities.Although an importer, mostly of clinker and cement from the Far East, Cameroon has taken the bold step ofsuspending the importation of bulk and bagged cement – a prohibition that will begin to take effect in 2016.

At present, per-capita consumption is low, at 83Kg in 2014, according to Global Cement Report. Totalconsumption was about 2.5Mt in 2014, but this had risen from just 1.3Mt in 2011. Consumption is expectedto rise to more than 3Mt by 2016, driven by solid growth in GDP and an ambitious programme of investmentin infrastructure, notably electricity and transport.

The suspension of bulk and bagged cement imports represents an immediate opportunity to substituteperhaps 1Mt of product with locally-ground cement made form imported clinker. Taking advantage of thisopportunity, we opened our 1.5Mta cement grinding facility in Douala in March 2015 and the plant reachedhigh levels of production within a few months. Initially, we are importing clinker from sources in the FarEast. In time, we plan to use clinker made at our own factories in Nigeria. In Cameroon, we use pozzolanaadditives rather than limestone and our product is bagged 42.5-grade cement. Most sales are to domesticmarkets at present, but we may look to begin exports at some stage in the future.

In August 2015, as we ceremonially commissioned the plant, we announced our intention to build a secondfacility at Yaounde, to open by 2018. This reflects our confidence that the market for cement will continue toachieve good growth.

Inauguration of Dangote Cement Cameroon by Prime Minister Philemon Yang and Aliko Dangote, August 2015

Cameroon

37

• Entered market in March 2015

– Quickly ramped up to >65% utilisation

– Successful entry vs larger competitor in country for 40 years

– No new entrants on horizon

• Local production surpassed imports in 2014

– Ban on imported bulk cement being implemented Jan 2016

• Plan is to supply clinker from Nigeria

– Will replace clinker imported from Far East

• Most of our sales will be domestic

• Consumption being driven by infrastructure, housing

• Major infrastructure projects

– National Ports Master Plan

– Road upgrades and new highways

– Construction of 400MW and 50MW hydroelectric dams

Local production and imports (Mt)

0.9 0.7 0.91.2

1.5

1.11.2

1.4

1.6 1.0

0.0

0.5

1.0

1.5

2.0

2.5

3.0

2010 2011 2012 2013 2014Local production Imports

Cimencam

1.6

Cimaf

0.5

Dangote Cement

1.5

Cameroon market share by capacity (Mta)

Ghana

38





Project details


1Mta Import & bagging N/A Tema

Operational 5+ years Target markets Domestic




4.0

5.0

6.0

3%

4%

5%

6%

7%

8%

2012 2013 2014 2015E 2016E


With 27 million people and per-capita consumption at 212kg, Ghana is perhaps West Africa’s mostimportant market after Nigeria. Consumption has been steady over the past few years at 5-6Mta, almost allof which is imported owing to the lack of native limestone. Although GDP growth has slowed down fromnearly 10%, growth has remained good by regional standards and enabled investment in infrastructure andhousing. The slowdown in GDP was triggered by falling commodity prices and these factors, along with thedepreciation of the cedi, have weighed on demand for cement over the past few years.

Dangote Cement has operated in Ghana for a number of years with an import terminal based at Tema, nearAccra. Although the terminal has a capacity of 1.0Mta, we were faced by unfavourable trading and currencyconditions in 2015 and 2014 that made importation less profitable than we had hoped.

However, we continue to see Ghana as a major opportunity because of its robust demand, lack of limestoneand proximity to Nigeria. Until now we have been importing and bagging bulk cement from the Far East,which attracts significant import duties on landing. In September 2015 we began to export cement from ourIbese plant in Nigeria, along the coastal road through Benin and Togo. Our strategy in the short term is toreduce our own reliance on Far Eastern imports and in fact replace them entirely with Nigerian-producedcement

At present, Ghana has three manufacturers that grind cement, with a combined capacity of about 6.5Mta.However, we have announced our intention to build a grinding plant at Takoradi, south west of Accra, with acapacity of 1.5Mta, reflecting our long-term confidence that the market will show good growth.

Ghacem

4.4Savannah Diamond

1.6

WACEM

0.5

Dangote Cement

1.0

Ghana market share by capacity (Mta)

Ethiopia

39


Population 2014 97m Population 2050E 188m



Project details


2.5Mta Integrated Coal Mugher

Operational May 2015 Target markets Domestic




0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

7%

8%

9%

10%

11%

2012 2013 2014 2015E 2016E


Along with Nigeria and South Africa, Ethiopia is one of three key markets in Africa where we aim to havemore than 25%-30% market share. With 97 million people and GDP growth of 9%-10%, Ethiopia is thesecond most populous country in Africa and has superior economic growth to most countries in the region.Despite its strong growth, Ethiopia lags many African countries in cement consumption at just 61Kg perperson, according to Global Cement Report. Urbanisation is low at 17% and outside of the major cities, muchhousing is still of traditional wooden construction.

However, the country has a strong commitment to infrastructure development, evidenced by the new metrorailway opened in Addis Ababa in September 2015. The latest five-year Growth & Transformation plan(2011-2015) has placed a high priority on supporting agriculture with investment in transportation andpower infrastructures. Indeed, Ethiopia is one of a few countries where we have a reliable supply ofelectricity from the national grid.

Our 2.5Mta plant at Mugher, less than 90km from the key market of Addis Ababa, opened in May 2015 andramped up to almost full capacity within a matter of months. We attribute this success to the fact that ourplant is the largest in Ethiopia, capable of producing large amounts of high-quality 32.5 and 42.5-gradecements to meet market needs. While leading on cost and quality, we feel we have been able to offer abetter product at the same price as lesser-quality cements in the market.

In September 2015 we confirmed our intention to double the size of the plant at Mugher with a second lineto open by the end of 2017 or early 2018.

Inauguration of Dangote Cement Ethiopia, June 2015

Ethiopia

40

• Nameplate capacity: 5,000 tonnes clinker per day, 2.5Mt cement per year

• Plan to double capacity in 2-3 years

• Single production line with coal-fired kiln, using thermally efficient dry pre-calciner technology

• Reliable grid electricity (no on-site power plant)

• Location: 87km from Addis Ababa in West Shoa zone, District Ada-berga

• Plant located 2,600m above sea level

– Impact on plant efficiency owing to lower oxygen levels in kiln (i.e. plant would produce more at sea level)

– Lower air density means process fans have to work harder to transport materials to kiln

• Plant land: 134 hectares

– Residential housing estate: 20 Hectares

– Additional 45ha space for raw material storage and truck stand

Ethiopian Cement Industry

41

0.0

0.5

1.0

1.5

2.0

2.5

Kiln type and size(million tonnes)

Dry rotary VerticalNot yet in

production

• Plant is close to major markets, good roads

• Large-scale plant with modern technology

– Dry process rotary kilns with pre-calciners

– Higher performance, more reliable

– Lower energy / power consumption

– Highly automated, latest equipment

– New mines produce higher-quality limestone

• Lower delivered cost to market

• Higher-quality products to meet market needs

• Many competitors are distant from major markets

• Much of industry uses aging plants

– Older technology (e.g. vertical kilns)

– Older quarries more difficult / costly to mine

• Many operations are sub-scale

– Lower efficiency, lacking economies of scale

– Unable to produce at 100% capacity

– ‘Overcapacity’ is misleading

• Result is higher cost to market

Ethiopia Products

42

32.5RPortland Pozzolana Cement

• CEM II B-P

• Lower clinker content, augmented by pumice additive and gypsum

• Suitable for plastering, low-rise buildings, masonry etc.

• Serving strong demand in local market

3XOrdinary Portland Cement

• CEM I

• Higher clinker content, augmented by limestone additive and gypsum

• Suitable for most building uses including high-rise, some infrastructure work

• Increasing demand for OPC

Market will move towards stronger OPC with increase in housing density, high-rise, commercial buildings and infrastructure

Mid/Long term market

forces

20.7 23.2 25.128.2 28.1 27.6

29.032.0

38.241.9 43.4

47.02

004

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

20

15E

South & East Africa Market Summary

43

Market Drivers


Market Landscape

Macro Overview

Demographic Trends

• Southern & Eastern Africa population of 444m; forecast to reach 953m by 2050

• Low urbanisation, 32% average, suggests good potential

• Most states are improving infrastructure from relatively lowbaselines

• Housing and commercial building will also drive cement demand

• Well-established incumbents, e.g. PPC, ARM, Bamburi, LafargeAfrica, Afrisam etc., but generally lacking scale and resources togrow significantly

• Region has many older, less efficient plants• Coastal markets exposed to imports from Pakistan, Far East

0.46 0.47 0.48 0.49 0.50 0.51 0.58

0.65 0.72

0.79 0.87

0.95

'15 '16 '17 '18 '19 '20 '25 '30 '35 '40 '45 '50

CAGR: 2.5%

(40%)

(20%)

0%

20%

0

20

40

60

20

11

20

12

20

13

20

14

20

15E

20

16E

20

17E

20

18E

20

19E

20

20E

20

21E

20

22E

Construction Industry Value Growth % of GDP

Cement Sales (Mt)

South & East Africa Population Development (B)

South & East Africa Construction Spend (US$B)

• Operations existing or planned in six countries within the COMESA

trading region which include Ethiopia, Kenya, South Africa,

Tanzania, South Africa and Zimbabwe

• Historical GDP growth of 3.8% between 2010 – 2014

• Expected GDP growth of 3.5% between 2014 – 2018

• Region has good political stability that is supporting economic

growth and transformation

Good potential to capture markets in South & East Africa

South & East Africa

• Operations in South Africa, Zambia, Tanzania

– Eastern/Southern Africa population of 400m (868m by 2050)

– Low urbanisation, 32% average– Low average per-capita cement consumption of

102kg

• Access to neighbouring countries

• Good growth potential across the region

• Adequate availability of other additives, henceable to manage cost of production

• Enter markets with new, highly efficient plantsable to compete with older facilities on lowerproduction and maintenance costs, lowerpower consumption, higher cement output

• Most Dangote Cement plants to be sitedinland, where pricing is higher, away fromimports

• Within COMESA trading region

• Region’s leading producer

– 10 Mta integrated production capacity

44

Expected capacity end 2019

0.7 Mta

3.0 Mta

2.5 Mta

3.0 Mta

5.0 Mta

3.0 Mta

3.0 Mta

3.3 Mta

0.5 Mta

3.0 Mta

3.0 Mta

1.5 Mta

1.5 Mta

1.5 Mta1.5 Mta

38-41 Mta

South Africa

45





Project details


Combined 3Mta Integrated Coal Aganang, Delmas

Operational February 2014 Target markets SA Inland




11.0

12.0

13.0

0%

1%

2%

3%

2012 2013 2014 2015E 2016E


Along with Nigeria and Ethiopia – for their large populations and economic growth – South Africa is the thirdkey market for Dangote Cement in Africa. It has the second-largest economy in Africa and perhaps the mostmature, with GNI at more than $12,000 per person and well-developed infrastructure and housing.However, South Africa’s economic growth has been constrained over the past few years and this hasaffected its infrastructure spending plans, according to Global Cement Report. Economic growth is expectedto remain slow at about 2% in the coming years, according to World Bank forecasts.

South Africa’s cement market has seen consumption of 12Mt-13Mt over the past couple of years andsignificant growth is not expected in the next year. Per-capita consumption is relatively high for Sub-SaharanAfrica, at 230Kg. The market has a number of long-established incumbents including PPC, Afrisam andLafarge Africa, with some importation on the eastern coast from Pakistan. While there is a perception of‘overcapacity’ in the market, it is important to understand that South Africa’s cement factories and theirkilns are relatively old, with an average age of about 30 years. This means they are unable to operate asefficiently as new plants such as those we have established at Aganang and Delmas, and therefore theiractual output may be lower than the nameplate suggests.

Aganang and Delmas opened in 2014, under the brand Sephaku Cement, and quickly ramped up to highutilisation levels that were maintained into 2015, even despite a six-week kiln outage at Aganang in the firsthalf of the year. The factories are on opposite sides of Johannesburg and enable us to reach a substantialpart of the South Africa’s inland market, selling cement of all classes through retail outlets and bulkdistribution. Sephaku Cement is a joint venture with Sephaku Holdings, which owns 34% of the operation.

Delmas cement milling plant

South Africa

46

• Five major manufacturers

• Consumption was 13.8Mt in 2015

– Including 0.8Mt imports

• 17Mt nameplate capacity

BUT:

• South Africa’s kilns are ageing

– Less efficient, more expensive to run / maintain

– Industry cannot run at 100% capacity

– Some older kilns likely to be retired

– Others will require investment to modernise

Producer No. of kilns Average age of kiln(years)

Sephaku 1 1

Lafarge 3 29

Afrisam 3 36

PPC 14 32

NPC/Cimpor 2 19

0

1

2

3

4

5

6

PPC Afrisam Lafarge Sephaku NPC

South African capacity / size of plants (Mta)

South Africa

47

• Joint venture with Sephaku Holdings

– 64% Dangote Cement

– 36% Sephaku Holdings (JSE listed)

• Addressable market about 9 million tonnes (2014)

• Aganang, Lichtenburg

– Fully integrated facility

• Delmas, Mpumalanga

– Grinding facility

– Uses clinker produced at Aganang

– Fly ash from local power station

• Sells all types of cement

– 32.5, 42.5, 42.5

– Large retail market

• Diverse market

– 50% resellers

– 20% readymix

– 15% concrete products makers

Aganang

Delmas

Zambia

48


Population 2014 15.7m Population 2050E 43m



Project details


1.5Mta Integrated Coal Ndola

Operational June 2015 Target markets Local, export




0.0

1.0

2.0

3%

4%

5%

6%

7%

2012 2013 2014 2015E 2016E


In recent years, Zambia has experienced good economic growth that helped to drive cement consumptionfrom around 1.1Mt in 2012 to nearly 1.6Mt in 2015. With a population of nearly 16 million, Zambia’s per-capita consumption of cement is relatively low at 85kg, which indicates good potential for growth if theeconomy continues to grow at recent rates. However, forecasts of growth have been tempered by recentfalls in commodity prices and the associated cutbacks in capital expenditure to open new mines. Housingremains a priority in Zambia with an estimated shortfall of more than a million units. Urbanisation isrelatively modest at 40%.

Major infrastructure projects include the development of new highways to link Zambia with neighbouringcountries, a substantial upgrade of the domestic road network, a rehabilitation of its rail and powerlineinfrastructure, an upgrade to Lusaka Airport and a new airport to serve the key Copperbelt region.

Zambia’s cement industry produces mostly bagged 32.5 or 42.5-grade cements from factories situated eithernear Lusaka or in Copperbelt. These two regions respectively account for about 46% and 21% of Zambia’scement consumption. Our 1.5Mta plant at Ndola is now the largest cement factory in Zambia. Located nearthe border with the Democratic Republic of Congo (DRC), quickly ramped up to high utilisation rates, selling32.5 Portland Cement and our 3X brand 42.5 Portland Limestone Cement. We firmly believe that long-termmarket forces will drive the increasing adoption of the stronger grades of cement in the Zambian market, aselsewhere in Africa. Our key markets will remain Zambia as well as the Katanga region of the DRC. InSeptember 2015, we announced our intention to double our capacity in Zambia, most likely by extendingthe Ndola plant. We anticipate this new factory coming onstream in 2018.

Inauguration of Dangote Cement Zambia, September 2015

Zambian Cement Industry

49

Industry profile

• 3,264,000 tonnes of capacity

– Shared between four companies

• Clustered in Ndola and Lusaka

– Close to major markets on good road network

• 2014 industry sales of 2.1 million tonnes

– Including 0.5 million tonnes exported to DRC, Malawi

– Some imports from Zimbabwe

Competitive advantage

• Larger-scale plant

– Dry process rotary kilns with pre-calciners

– High performance, reliable

– Lower energy / power consumption

– Highly automated, latest equipment

– New mines produce higher-quality limestone

• Competitive delivered cost to market

• High-quality products to meet market needs

• Plan to double capacity in 2-3 years

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

DangoteCement

Lafarge(Lusaka)

Lafarge(Ndola)

ZPC Scirocco

Zambian cement industry

Lusaka46%

Copperbelt21%

Eastern6%

Central5%

Southern5%

North Western4%

Northern4%

Luapula3%

Muchinga3%

Western3%

Cement consumption by province

Zambia Products

50

32,5Portland Cement

• CEM II B-L

• 32.5 strength, rapid setting

• Lower clinker content, augmented by limestone additive and gypsum

• Suitable for plastering, low-rise buildings, road stabilisation, mortar

• Serving strong demand in local market

3XPortland Limestone Cement• CEM II A-L

• 42.5 strength, rapid setting

• Higher clinker content, augmented by limestone additive and gypsum

• Suitable for most building uses including high-rise, some infrastructure work

• Increasing demand for stronger cements

Market will move towards stronger cements with increase in housing density, high-rise, commercial buildings and infrastructure

Mid/Long term market

forces

Tanzania

51





Project details


3.0Mta Integrated Coal, gas Mtwara

Operational December 2015 Target markets Local, export




0.0

1.0

2.0

3.0

4.0

5.0

4%

5%

6%

7%

8%

2012 2013 2014 2015E 2016E


Tanzania is enjoying political stability and sustained economic growth of around 7%, driven by exports, andincreasing tourism. Recent finds of offshore oil and gas are expected to give a boost to the economy in thecoming years. Tanzania’s high population, low urbanisation and low per capita consumption of cement(65kg) suggest considerable upside potential as the population becomes both larger and wealthier.Infrastructure priorities are expected to be electricity and roads, investment in oil and gas infrastructure,expansions to the ports at Dar Es Salaam and Mtwara and a new port at Bagamayo. Furthermore, significantconstruction will be required in both public and private sectors if tourism is to increase with governmentambitions to attract 8m visitors a year by 2025, from around a million at present.

Cement consumption was estimated at about 4.2Mt in 2015 with 0.4Mt being imported, mostly fromPakistan. Before Dangote Cement entered the market, Tanzania had around 4.5Mta of capacity sharedbetween six incumbents, mostly operating integrated factories near to the coast to serve the key coastal andnorthern markets.

In December 2015 we fired kilns in our 3.0Mta integrated plant at Mtwara. Although gas is available in theregion, we decided on dual-fuel strategy to ensure the security and stability of our supplies. Our factory willbe the largest and most efficient in Tanzania. We will sell both 32.5 and 42.5 grades of cement and mostproduct is bagged for distribution. Although the plant is located in the south of Tanzania, by the coast, and aconsiderable distance from the capital, we expect cost advantages will enable us to complete in local andexport markets, such as Mozambique and the Indian Ocean islands.

Inauguration of Dangote Cement Tanzania, October 2015

Tanzania

52

• Entered market in February 2016

– Will have largest, most modern and efficient plant

• Main demand centres are

– Coastal region: ≈2Mt

– Northern region: ≈0.6Mt

– Lake region : ≈0.6Mt

– Zanzibar: ≈0.35Mt

• Consumption being driven by good economic growth and building across all sectors

• Opportunity to replace imported cement and clinker

• Steady start selling 32.5-grade cement before certification of 42.5 product Arm/Rhino

2.25

Camel

0.22

Dangote Cement

3.0Nyati/Lake

0.5

Twiga

1.4

Lafarge/Mbeya

0.4

Tanga/Simba

1.25

Tanzania market share by capacity (Mta)

Tanzania production, imports and exports (Mt)

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

2012A 2013A 2014A 2015E 2016E

Local production Imports Exports

Investor Relations

53

For further information contact:

Carl FranklinHead of Investor RelationsDangote Cement Plc

+44 207 399 3070+44-7713 634 [email protected]

www.dangotecement.com

@DangoteCement

Ayeesha AliyuInvestor RelationsLagos

+234 1 448 0815

[email protected]

mailto:[email protected]

http://www.dangotecement.com/

mailto:[email protected]

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